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Lea diagrammas suivanta ilhiatrent la mAthoda. errata to pelura, >n i 32X 1 8 ; ' 1- ■.' , - - ; *• : • A FEW WOR^ . h r#i. $ s I I I ^ •f; on THB I Ja»in95 g»nfes IN EASTERN AND WESTERN CANADA AND PARTICULABLY ON THE " MONTREAL CITY AND DISTRICT FROM ITS ESTABLISHMENT. j» ]Vf antiieal : PRINTED BY JJOHN LOVELL A SON. 1884. ^•^*^*^'*^^^^^***Vi^^^?v%i%%^^ jig '^. *yt % $ ■f^ 1 if '. > » ;V 1*^ ;1» 'J % ^ ^ i^* '% S^ % •*s» » ■"^ ;** '*> 1' ;% v. ^> :•; > ■1. 1 >^ -/*' V >? *^ :\» *' tJ •> i^ >i* V > ' ^ 5^ *' 1 t '^ •l 1 * ^ S % 4 :% I % J *^ri,r^ * ,c \ ^^'^mi 'p''! .•'■■"•'.t'fiS'Jife;* ■^ iJL ? ■^ f. -"• t^,^ A FEW WORDS ON THE awxttjgfli gattli6 IN EASTERN AND WESTERN CANADA, AND PARTICULARLY ON THE « MONTREAL CITY AND DISTRICT >> FROM ITS ESTABLISHMENT. 3^ontiieal : PRINTED BY JOHN LOVELL & SON. 1884. A FEW WORDS ON SAVINGS BANKS IN CANADA. The credit of having first given a praotioal form to Institutions for encouraging habits of economy among the poorer classes fairly belongs to this century, and it is but natural that an effort of this kind should have come from woman — that better part of man — whose heart is more accessible to the sufferings of humanity, and who is ever ready to devise means to alleviate distress and want. In 1804, the Tottenham Bank (England), which had been conducted for some time previous by Mrs. Wakefield, was regu- larly organized, and trustees appointed. The effort was somewhat crude. Pensions were given at a certain age, and weekly allow- ances, in cases of sickness, to regular subscribers. But, with the newly-organized Institution, depositors were first admitted to place their savings, and to withdraw the money, receiving interest for the time. From that moment the idea of establishing Savings Banks became general, and soon every city or important town in England had its institution. We find that the founders were the most distinguished and influential men of their times, and many of them, either as states- men, merchants, or financiers, have secured for themselves a name in the history of their country. But were it only for their connec- tion with, and their efforts and eaorificea of time and money for the benefit of the institutions they were the means of establishing, and through which so many persons of all ranks can trace the origin of their success in life, their names would merit a prom- inent place in the memory of all as public benefactors. If our beloved Mother Country is rich in such men, her example in that direction has not been lost, for in this colony, and where the field for such a work was and yet is limited, those noble- minded men have had imitators, and the names of William Lunn, Hon. James Ferrier, and their collaborators, although not success- ful in their efforts, should be gratefully remembered as the found- ers of the first incorporated Savings Bank in Canada. In writing these few lines on the history of the Savings Banks of the country, and more particularly on that of the " Montreal City and District," we must say more than a passing word of one of our most prominent, benevolent, and useful citizens — the late William Workman, the principal mover in the foundation of the institution in question. To eminent qualities as a man of business Mr. Workman was blessed with a moat benevolent disposition, and with the influence of his pen, guided by a powerful mind, his schemes for the benefit of the sick and infirm were numerous and important, while the drains upon his purse were constant. But he was one of those who thought it a greater service to enable the laborer or artizan to provide for himself by teaching him the wholesome lessons of thrift and economy than to give alms, though none gave more than he. By the first means the moral of the working-classes is elevated. They become industri- ous, and then, through the influence of their own saving, they form citizens who are the strength and honor of their country. With Mr. Workman, charitable enterpriees invariably succeeded* for he neyer hesitated to draw largely on his own financial resouroes to sustain the credit of the institution he had fathered, and thereby avert a danger which could alone be met by the suggestions of a great and noble heart. In 1841 the first Act, 4 and 5 Vict. Chap. 32, incorporating Savings Banks, was passed. It was a general Act. There was then only one institution for savings — the Montreal Savings Bank, kept within the Bank of Montreal. But at the death of its manager, Mr. John Armour, the business was taken up by the Bank of Montreal, and was the origin of the Savings Bank Department of that institution. Five Banks were founded on the Act of 1841 : the Provident Savings Bank of Montreal, the Montreal Oity and District in 1846, La Caisso d'Economie, Quebec, in 1855— although in exist- ence since 1848, the Provident and Savings Bank of Quebec, and one in Ontario, then known as Upper Canada. The Act in question permitted Savings Banks to invest in bank stocks and mortgages. At the time of the establishment of the City and District, poli- tical feeling ran high. There was a certain antagonism between certain classes, which perhaps influenced the founders of the insti- tution ; but a feeling of insecurity also manifested itself on account of the only Savings Bank then existing — the Provident and Savings — investing too largely in mortgages, especially as it seems to have been within the knowledge of those who took an interest in the welfare of the poorer classes that some, at least, of the mortgages then held must inevitably end in loss to that Bank. And, as the laboring classes had little opportunity of choosing the institution to which they might confide its savings, the establish- ment of the City and District was seriously considered ; and in 6 1846 the Bank was organized, having fifteen managing, chosen from among about sixty honorary directors. The SavingH Banks under the Act of 1841 , being entirely of an eleemoi^ary character, the then Roman Catholic Bishop of Mont- real, Monseigneur Bourget, was invited to becoL. : its patron, with- out however imparting to it any sectionalism, as vhe greater number of the members of the Board were at the time of a religion different from his. But the French Canadians and the Irish were then enabled to patronize an institution at the head of which they recognized men who had stood by them in their political struggles and in whom they had the greatest confidence. One of the first determinations of the Managers from the outset was not to invest any povtion of the funds of the Bank in mort- gages, although such a disposition would have been permitted by law. The wisdom of this was soon to become apparent, as it saved the Bank from the fate of its prei cessor, and contributed greatly to its success. In the management of ordinary Ban ), and particulaily of Savings Banks, an essential element is th possession of securities that can be at any time easily converte into cash. The best securities, be they bonds or mortgages, ^ not of that character, will not save the credit of an institution iu i. crisis wbere nothing but cash will answer. The first fifteen Directors of the City and District were : William Workman, Joseph Bourret, Francis Hincks, Hy. MulhoUand, Hy. Judah, Joseph Grenier, Nelson Davis, Jacob Dewitt, Alfred LaRocque, Luther H. Holton, Damase Masson, Pierre Beaubitu, Chas. Wilson, John E. Mills, John TuUy, L. T. Drummond. / ./ K 7 For two years (from 1846 to 1848) the Bank progressed quietly, meeting however with one mishap^which might have proved serious but for the devotion of the above Directors, who, although 7 7 O not remunerated for the time they gave to the business of the bank, generously subscribed their names to notes to meet a loss which had occurred in the depreciation of City Bank stock. There was then no stock or accumulated profits to secure the deposits, and losses to be made good had to be assumed by the Directors. This generous act on the part of these gentlemen saved the Bank on that occasion. In 1848 there occurred a general crisis in financial affairs, and then was seen the wisdom of the originators of the City and Dis- trict in not lending on mortgages. The Provident and Savings Bank of Montreal, whose funds were largely placed in that kind of security, was forced to suspand payment. This unfortunate event shook the confidence of the working classes in Savings Banks to such an extent that for years they were regarded with much suspicion, and their growth was retarded. As an illustra- tion we may notice that the amount due depositors by the City and District were : In 1847 $250,702 1848 178,241 1849 153,770 1850 273,994 From this time the progress was rapid, there being a consider- able increase in amount every year, with the exception of 1854, 1855 and 1857 — ^years of general depression and financial difficulty and wherein the deposits in Savings Banks showed a diminution. In 1870 the amount due depositors was $2,880,769; the num- ber of depositors 9,362 ; average amount due each depositor $307.68. 8 The Board of Directors consisted of : Hod. L. H. Holton, Presdt, Henry Stames, Henry Judah, Vice-Presdt., William Workman, A. M. Delisle, Edwin Atwater, ^ Henry Mulholland, Edw. Murphy, Alf. LaBocque, Hon. JustioeJ. A. Berthelot. At this period a change was brought about in the constitution of the Savings Banks of the country. For some time back, states- men, financiers and that class of persons who, as representative men, take an interest in the welfare of the industrial classes, had their attention directed to the necessity of giving greater security to the depositors, that offered by prudent management and accum- ulated profits being only accidental. In the case of the '' City and District " these accumulations amounted to about $180,000 — a sum insufficient to meet any large loss, and out of proportion to the sum then due its depositors. And as the deposits were increas- ing very rapidly it was evident that to rely simply on accumulat- ing profits as a guarantee to depositors, was unwise. It was evident, also, that the Act of 1841 and its amendments did not sufficiently prescribe the mode of investments to guard against all danger of loss. What, then, were the best means of giving to depositors the security which, under the present constitution, the Savings Banks did not possess ? No safer or better means could be devised than the creation of stock sufficient to place the depositors beyond the possibility of losing their earnings. This, with new enactments regulating the manner in which the business should be conducted and the nature of investments permitted, would secure the desired object. This was fixed at two mUlions of dollars for the " City and District," and one million for " La Caisse d'Economie " and 9 the " Provident and Savings," of Quebec." But, os it was not certain ^rhcther they all would or could subscribe the amount of stock required by law, they were offered a choice of the following alternatives: 1st. To continue their business and subscribe the stock, paying it up according to the requirements of the Act ; 2nd. To hand over their assets to a Chartered Bank which might continue the business as a Savings Bank Department and by which means the depositors would have the guarantee of the whole capital of that Bank, or 3rd. To hand over their assets and business to Grovernment. But in any case the law stipulated that the books of the various Savings Banks then existing should be balanced, and whatever profits existed at that moment were to form a Poor Fund to be invested in municipal or Government securities approved of by the Treasury-Board, and the interest distributed every year to the various charitable societies of the cities in which the respective Savings Banks were situated. The law further enacted thi t hence forth those institutions which should elect to continue business, would be prohibited from investing their funds in mortgages or in any- thing but municipal debentures and Government securities. They might accept, but only as collateral security, bank stocks and the other securities specified ; but twenty per cent, of the total amount on deposit should consist of Federal Government securities or cash on deposit in Chartered Banks. Of the then existing Savings Banks, two chose the first alterna- tive, and subscribed the required amount of stock, which now, with the profits they may possess, are a guarantee to depositors : the " City and District," with two millions subscribed and $600,- 000 paid up and " La Caisse d'Economie " of Quebec, with one 10 million subscribed and $250,000 paid up. One Savings Bank in Toronto, tbe " Toronto Savings Bank," surrendered its business to Government and the otber tbe " Provident and Savings Bank," of Quebec, banded over its budiness to tbe Union Bank of Lower Canada, wbicb continues tbe business in tbe old office of the " Provident " in tbe Upper Town. Tbe accumulated profits of tbe " City and District," when tbe books were balanced, amounted to 8180,000, which constitutes tbe Poor Fund. Besides this sum, this Bank had previously paid during several years, to charities of tbe city, $80,715. Tbe inter- est of the " Poor Fund " is now and has been distributed to various Institutions according to population, and a new distribu- tion is made after every decennial census. Tbe accumulated profits of " La Caisse d'Economie " were put at $83,000, and that forms the " Poor Fund " for the City of Quebec. Tbe " Provident and Savings " of Quebec distributed the whole principal of its accumulated profits to charities before tbe surrender of its business to tbe Union Bank. Such is the short history of the Savings Banks of tbe country and more particularly that of the " Montreal City and District." It must not be supposed, however, that this Institution has had an alto- gether uneventful time. Tbe wisdom of converting these institutions from their purely benevolent nature witb very inadequate security for the vast interests confided to their care, into joint stock concerns was not understood then as it is at present. And perhaps because of the success of the " City and District " it bad its enemies who, at times, succeeded in creating a momentary distrust which cul- minated in very severe runs ; but in all these cases calls were most promptly met; depositors were paid without exacting notice, and the office, instead of closing at tbe usual hours, remained open until late at night, so as to satisfy all demands. And it certainly is creditable to the management that the avail- able cash was more than sufficient to meet those heavy drains without having to pledge any of the Bank's securities or to call in any of its loans. The " City and District " has its offices in a splendid building at the corner of St. James and St. John streets, which extends to Notre Dame street. Its three branches in the East, West and South of the city, are certainly ornaments to Montreal. The following figures are taken from its balance sheet of 1883, and will convey to the mind of the reader an idea of its import- ance and of the services it renders to the public : Capital stock subscribed 12,000,000 Do. paidup 600,000 Liabilities: / Due depositor?. Head Office and Branches $6,212,685.57 Special Charity Trust Fund 180,000.00 Sundry open accounts 232,042.94 Total 6,624,678.61 Resources: Bonded securities (Municipal and Montreal Harbour)..l,153,849.64 Poor Fund Investment (Municipal Debentures) 180,000.00 Loans on collateral security as required by law 4,226,904.58 Bank Premises, Head Office and Branches 375,762.64 Bank fixtures and furniture 5,619.20 Sundry open accounts 44,3.35..31 Cash inBanks 1,530,206.93 Total 7,516,578.10 Number of depositors 29,795. Average amount due each depositor $208.61. 12 One thing luay be said which will speak eloquently in favor of the organization. The sum lost by the Bank since it was founded in 1846 by forgery, is under $2,000, and the lois through the dishonesty of its employes is still less. If we consider that the amount of cash passing over its coun- ters during the last year was $41,268,654, we will see evidence of conHtant care and attention to the smallest details. The present directors are : Edward Murphy, President, Alfred LaRocque, V.-President, W. H. Kingston, M.D., James O'Brien, Thos. Workman, The first Manager was Mr. John Collins, who left the Bank in 1855. He was succeeded by Mr. Edmond J. Bearbeau, who retired in 1880, afler thirty years' service. Mr. Henry Barbeau is the present Manager. Montreal, January, 1884. B. Bellemare, J. Aid. Ouimet, M.P., E. J. Barbeau, F. T. Judah, John H. R. Molson.