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BANKING IN THE EARLY DAYS

This is a manuscript in the Perth Museum research files.
Transcribed by Robert T. Bond.


           This is a true copy of the paper presented to the Perth Historical Society, on November 11th, 1898. The paper is one of a set presented to the Perth Museum Inc., by the late Mrs. John A. Stewart. Please remember that the places named were in existence 65 years ago, and may have vanished or changed ownership several times since then.

           In the earliest days of the Settlement, there was no bank in Perth, nor was one required, as the settlers came out from the Old Country, bringing their effects with them, to make a home in the new land. All their produce was traded or bartered, as it was termed at that time, to the local merchants, and any little surplus they may have had was probably kept for safe keeping in the proverbial stocking-leg.
           At one time small change was so scarce that Mexican silver dollars, or American ones, were cut into four or eight pieces for change, and passed current for several years, when it was called in. In 1837, owing to the embarrassed state of commercial affairs, W. & J. Bell, the leading merchants in the town at that time, issued their own notes in the form of bank bills of fifty and twenty-five cents, and 12d, 7 1/2d and 6d. scripts payable on demand in current bank bills. This fractional currency took the place of all coins, and their circulation at this time proved a great accommodation to the public. (The Perth Museum Inc., has a number of these bills on display.)
           From 1845 to 1848, Mr. James Allan, merchant, collected all notes due in the town and country for the Commercial Bank at Brockville, where the Hon. James Morris was Manager.
           The City Bank was the first bank to establish an agency in Perth, the Hon. Roderick Matheson being agent. He transacted business in his own office, where Matheson & Balderson now are, but finding that his own business required all his attention he gave up the agency, as no other agent was appointed, the office was closed. Then the Commercial Bank opened an agency, with Captain Leslie as Manager. His office was kept in the small stone building, which still stands on the property near the old dwelling house. John A. McLaren now lives in this building. He farmed a little, as well as managed the Bank, and had in his employ an old man by the name of McFarlane, but transacted all his business himself.
           In order to do this, he had a bell put on the building, which was rung if he was wanted while out attending to his farm duties during bank hours, but he had no scruples about keeping people waiting. He was very exact and particular about paying out money, as even in these days, a stranger could not draw money for a cheque unless identified, or accompanied by a friend known to the Manager. He married a lady from Kingston, who was very peculiar. She never went out except to church, and very rarely there, and always dressed in the same 'good' clothes from the time she came to Perth until they left. Captain Leslie did not do a very large business, in fact, not enough to pay his salary which was six hundred dollars per year. He only had an ordinary iron box for a safe, which was built in the floor of his private office, the top opening upward from the floor like a trapdoor, so that his business could not have been very extensive.
           In 1856, he handed over the books to Mr. James Bell, who later became the Registrar of South Lanark, and the Bank was removed to his dwelling on Drummomd Street, where Mr. McArthur's house now stands. As the Bank quarters were not ready for him, a small brick addition was built for an office, which was pulled down when Mr. McArthur built his present residence.
           The block on the corner of Drummond and Foster Streets, where the Merchants' Bank now stands, was bought for the Commercial Bank from The Spalding Estate. On the corner of Foster and Drummond Streets was a small brick cottage occupied by Mr. Shaw, a tailor, and latterly by his wife, familiarly known as Nurse Thompson. At the back nearer James' blacksmith shop, was a small two-story frame building occupied by Mr. Dettrick, father of Mr. John Dettrick. These buildings were torn down and the present structure erected in 1863. The architect was Power of Kingston, and the Contractor was Samuel Bothwell, brother of Mr. Joshua Bothwell, who built Victoria Hall. It cost less than six thousand dollars and was a great loss to the contractor. The Bank afterwards gave him a bonus of eight hundred dollars to make up in part his loss.
           The safe for the bank was sent from Kingston by boat to the ferry, and placed in the temporary office here, and then built into the new vault, and is, I believe, the same one used at the present day. The men who brought it here, worked all night, and had it in place and ready for use the next morning. For the first six months Mr. Bell transacted all business himself, and then Donald Fraser was taken in as Clerk. He afterwards had a private bank at Kingston, but failed a few years ago, when he removed with his family to Vancouver.
           A large business was done by the Commercial Bank here, and they usually had from fifteen to seventy-five thousand dollars under the control of the teller. Weekly returns were sent to Brockville, and monthly reports to Kingston, where the Head Office for the district was located. Mr. Bancroft was the Manager at Brockville. At the time of the Fenian Raid in 1866, they were afraid of the Bank at Prescott being robbed, so nearly all their notes and private papers were sent here, where they were kept for a month before being sent back to Prescott.
           The first Inspector was Mr. J. H. Campbell of Toronto. At this time they had a great deal of trouble with the silver quarter. The shilling was really worth twenty-four cents, but it passed in the town for twenty cents. Speculators bought it up in quantities at the lower rate, and then compelled the Bank to pay them the twenty-four cents for it, which was a loss.
           On the capital invested here, a profit of thirteen percent was made, but not withstanding this the Commercial Bank was forced to close owing to the Branch at Hamilton having advanced three millions of dollars to the Great Western Railway. The Bank's stock was bought by the Merchants' Bank for fifty or sixty cents on the dollar.
           Before this, in 1858, dollars and cents became the legal currency of the Province. The old currency of pounds, shillings and pence still remained in force, which allowed all accounts to be kept and payments made in the old way according to the new system. The pound sterling was equal to $4.86-5/8. As the decimal system was decidedly the easiest and most simple way of keeping accounts and counting money, it was almost generally adopted after this date, and the Government in this year, to make it easier still, issued the copper one-cent piece and the silver twenty-five cent piece.
           In 1856, a movement was set on foot to establish Banks, which, if properly managed, would have proved a great benefit to the country. As far as I can understand, the plan was something like this. In order to establish a County Bank, a special meeting of the County Council should be called for that purpose, and if approved, the Warden should sign and execute Municipal Bonds to a certain amount, which amount would represent the capital of the Bank. These bonds were to be placed in the hands of the Receiver General of the Province as security. This done, the County Council should proceed to issue promissory notes to the amount of the bonds deposited with the Receiver General; the County Warden to be ex-officio Managing Director. The Head Office was to be at the County Town, and agencies to be established at all the principal villages throughout the County.
           The County Bank was to be the place of deposit for all County or local municipal funds - for instance - a Bank established like this in Perth would have been called the Lanark County Bank, with the Head Office in Perth and agencies at Carleton Place, Almonte, Pakenham, Renfrew, Pembroke, and other places as the business requirements might dictate, with a capital of, say fifty thousand pounds ($248,125.00).
           County bonds to that amount would have been deposited with the Receiver General of Canada West. This would have been a safe banking institution, with sufficient funds to supply all local wants of the County, and arrangements could have been made with some of the Chartered Banks to honor drafts or bills of exchange issued by the County Bank. If this could have been arranged, it would have been a great boon to the County, as the banking capital of Canada was not by any means adequate to meet the demands of the country, and as long as this was the case, of a necessity enterprise and industry would be crippled. Every man engaged in business at this time needed accommodation at some time or other, and on furnishing security should have been accommodated, but without capital on hand, it could not always be done.
           The Banks were willing to accommodate the public to the extent of their ability, but the means at their disposal fell far short of the demand, and as a consequence, the trade of the country was very much restricted for the want of the necessary funds to carry it on. The establishment of County Banks on the basis something like this sketched above, would at once have relieved the necessities of trade, and placed a sufficient amount of money in circulation to enable business to be done on a cash basis instead of the ruinous long date credit system then in vogue, which was the necessary result of the meagre supply of floating currency in the country.
           However, under the other banking acts then in force, any number of persons could associate themselves together and organize a Bank by fixing on the amount of capital required, and this being decided upon, the capital to be divided into shares of not less than ten pounds each. By this means, people who had money at their disposal, and not desirous of investing it in trade, could put their money into Bank stocks.
           In 1853, a branch of the Bank of Montreal was opened here, with a Mr. John McIntyre as Manager. He was formerly Principal of the Grammar School and married a Miss Margaret Mair. The office (was) in the Mair block, now owned by Mr. W. A. Meighen, in a room of the McIntyre house. He was succeeded by Mr. Ness, when the bank was removed to Gore Street, to the premises at present occupied by Mr. F. A. Hall. This property was purchased from the late Dr. James Wilson. Mr. James Allan, who kept store just across the road, was called in to count the bills for the transaction, but he cannot remember the price paid for it. With Mr. Ness for a number of years was Mr. William Munroe, a brother of Dr. David Munroe. It is said he frequently applied to the Head Office for promotion, but he was very popular, and almost invaluable to Mr. Ness, who never forwarded his applications. Finally he went to Montreal to interview the Directors, and succeeded in having his ability recognized. He was Manager here for about a year in 1868, after Mr. Gray was removed to the Merchants' Bank. Mr. Richardson was the next acting Manager, and later moved to Picton.
           The next Manager was Mr. James Gray, a man well known to us all in his capacity of Manager of the Merchants' Bank. He was a very popular agent when the Commercial Bank stock was bought up by the Merchants' Bank, and he was offered the position of Manager. At first he refused, but after making a good many stipulations which he could not get from the Bank of Montreal, he accepted the position and became the Manager in 1867. He gave as one of his reasons for leaving the Bank of Montreal, that it was an easy matter for any speculator or sporting character to obtain money from this Bank, which was very much against his personal wishes or taste. However, he was a very popular agent and was superannuated in 1889. He was succeeded for a period of years by Mr. C. G. Morgan, who was removed to the Head Office at Montreal, when the present Manager, Mr. H. D. Wells was appointed agent in 1895.
           After Mr. Gray left the Bank of Montreal, Mr. William Munroe was agent here for about a year, when he was removed and Mr. Despard came in his place. He was succeeded by Mr. Stewart, who robbed the Bank and got away with the funds as far as Watertown, where he was caught and part of the money secured, but the Bank did not prosecute. After Mr. Stewart left, Mr. Robertson was appointed agent, but he was only here for a short time when the present Manager, Mr. R. J. Drummond was appointed. In 1885, the Bank was removed to the present stone building built for Mr. Drummond, and Mr. F. A. Hall purchased the old site for a dwelling house, and occupies it as such at present.
           When the Bank of Montreal was removed to the Mair Block, the Royal Canadian Bank opened an agency in their old quarters with a Mr. Freeman as the agent. He was succeeded by Mr. W. J. Morris, who got into some difficulty, when Mr. Kirkland was appointed for a short time, but they could not have done much business, as the Bank was very soon closed.

Perth, November 11th, 1898.
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