^> ^> IMAGE EVALUATION TEST TARGET (MT-3) fe fe ■^ rf" 1.0 I.I l^m |2.5 £ Itt 12.0 1.25 ■ 1.4 1.8 1.6 ^h Va 7W />^ "^ /A JV rO^ -*\ ^P?A '"W*^-^ a mw CIHM/ICMH Microfiche Series. CIHIVI/ICIVIH Collection de microfiches. Canadian Institute for Historical Microreproductions Institut Canadian de microreproductions historiques 1980 Technical Notes / Notes techniques The Institute has attempted to obtain the best original copy available for filming. Physical features of this copy which may alter any of the images in the reproduction are checked below. n n Coloured covers/ Couvertures de couleur Coloured maps/ Cartes giographiques en couleur Pages discoloured, stained or foxed/ Pages d6colordes, tachet6es ou piqu^es Tight binding (may cause shadows or distortion along interior margin)/ Reliure serr6 (peut causer de I'ombre ou de la distortion le long de la marge int6rieure) L'Institut a microfilm^ le meilleur exemplaire qu'il lui a 6t6 possible de se procurer. 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The following diagrams illustrate the method: Les cartes ou les planches trop grandes pour dtre reproduites en un seul ciichd sont filmdes d partir de Tangle sup6rieure gauche, de gauche d droite et de haut en bas, en prenant le nombre d'images n6cessaire. Le diagramme suivant illustre la m6thode : 1 2 3 1 2 8 4 5 6 s<t .^* t ; ^ yf,- iw. bix'iyu(i)roj! vq fan ^frnmumm «M • ,_,' ''^s. ^ - v: 3fej iSJia&lsAfeLtJas .|i -- ^... STATEMENT OF THE HONORABLE A. T. GALT, IN aEFERENCE TO THE FAILURE OF THE COMMERCIAL BANK CDtt ttiua PRINTED BY HUNTER, ROSE & COMPANY 1867. STA^TEMEIS^T OF TBB HONORABLE A. T; GALT, IN aEFSaCNCB TO THB FAILURE OF THB COMMERCIAL BANK. HOUSE OF COMMONS, Thursday, Dec. 13, 1867. The Orders of the Day having beeu called, Hon. A. T. Galt rose and said: Mr. Speaker, before the Orders of the Day are proceeded with, I propose to make a statc- luent with reference to the events which pre- ceded and followed the failure of the Com- mercial Bank of Canada ; and, to put myaelf in order, I propose to follow what is the usual practice of the House of Commons in Eng- land, by making a pro forma motion of ad- journment. I may perhaps be asked why I did not take an earlier opportunity of making the statement I am now about to submit. My reason for not having done so is simply this — that the statement will disclose that in the courpe of the events I am about to refer to, certain diflferenccs of opinion happened un- fortunately to arise between myself and my late colleagues, and I thought that, in the public interest it would be better that no •subject should be introduced at the first meet- ing of this Parliament, which could by pos- sibility, in the then excited state of public opinion, lead to any angry discussion or angry feeling in this House. I felt that it would be better for me to remain subject for a time to a certain amount of misapprehension and misconstruction, than to run the risk of put- ting any obstacle in the way of my honor- able friends in the Government, whose policy I intend to support, and to whom posiibly the result of those events might cause some partial embarrassment. But I am now brought to the conclusion, that it is my duty, for my own defence as a public man, to make the .statement I am about to lay before the House. This has to a large extent arisen from the circumstance that, in another place a Com- mittee has been granted in reference to the late crisis in Canada West. I am, of course, quite ignorant of tho course that Committee may take. It was applied for — you will per- mit me to say — entirely without my know- ledge or concurrence, and, in fact, during my absence from this city. And though it was applied for, undoubtedly, by a personal friend of my own, still as I knew they could not be in possession of the facts relating to the course which 1 myself took in regard to the Com- mercial Bank, and during the subsequent crisis, I did not feel myself at liberty to run the risk of that Committee presenting a re- port which might pos.sibly for all future time leave me responsible in the eyes of the public for events which I deplored in common with everybody else. I have, therefore, felt that I could not let Parliament rise, without apply- ing, through my honorable friend at the head of the Government, for the permission of His Excellency the Governor General, to make such a statement as might be necessary with regard to my own course in reference to those unfortunate events. I made that application the day before yesterday to my honorable friend at the head of the Government, and he at once obtained for me the permission I sought, from His Excellency, and I am bound to say that that permission which has been given me to-day, would as readily have been accorded to me by my honorable friend, if I had applied for it at an earlier period of tho Session. I propose now to refer to the vari- •is events which led up to the failure of the jimercial Bank, and, subsequently, to the crisis which followed. The first intimation which I received, in reference to the Com- mercial Bank being in danger, was from my honorable friend, Mr. Holton. I was, at the time, on a visit, on public business, to the Treasurer of Quebec. On my return home to Sherbrooke, I found a telegram from Mr. Holton, informing me that he desired par- ticularly to see mc on public business, Failure of the Commercial Bank. [l»i Sest. \«t and wifiliiDfr to know where he miyht do so. It did not happen to bo convenient to me to vipiit Montreal next day. So I replied, that I wished him to come to Sherbrooke, which he did by the first train. lie then informed mc that the bu.sincss on which he desired to see me related to the Commercial Bank, which, owing to a partial but continuous withdrawal of deposits was, ia the opinion of the Directors, getting into a position of serious danger — and that ho was desirous of submitting the case to mc, that I might, if I thought proper, biing the matter before the Government, and obtain a deposit of public moneys, iu ordw to give the Bank an additional reserve, as a security for their meeting their engagements. At the request of my honorable triend, I accompanied him the following day to Montreal. At the same time, Mr. Ilolton telegraphed to the officers of the Bank at Kingston, requesting that, if possible, the presence of Sir John A. Macdon- ald, one of the Directors of the Bank, should be obtained at Montreal. It was found im- possible, however, as the elections were pro- ceeding, for Sir John A. Macdonald to attend the meeting which took ph ce at Montreal. It was there submitted to me by the Direc- tors, that the position of the Bank was such, that they were apprehensive it might be brought into a condition which would re- quire it to suspend payments, unless assistance could be obtained for it from the Govern- ment. I informed these gentlemen that there were, in my opinion, serious diflSculties in the way of the Government rendering such assistance : That, in the first place, the Government did not possess, in a formal way, the approval of Parliament — that they had no authority — and that they would be obliged, if they gave assistance, to seek indemnity for their course from Parliament — and that to obtain that indemnity would require such a disclosure of the affairs of the Bank, as might possibly do them more harm, than the momen- tary assistance would do them good. I also said that I thought there were objections on the ground of its constituting a precedent — that it was diflScult for the Government to come to the assistance of any one Bank, unless they were prepared to come to the assistance of all — and that it ap- peared to mo that it was only in circumstances where a great public disaster might bo im- pending, that the Government could be justi- fied in interfering. But I informed them at the same time that I would take the oppor- tunity of consulting my honorable friend, Mr. Cartier, who was then in Montreal, as I had not the advantage of seeing Sir John A. Mac- donald. I accordingly saw Mr. Cartier, and found that his views on the points I have re- ferred to, were, if anything, stronger than my own. However, at the desire of the Directors of the Hank, and particularly of its President, Mr. Cartwright, I consented to accompany them to Kingston, for the purpose of myself submitting the case to Sir John A. Macdonald, and ascertaining whether his views would differ in any material respect from those which had been expressed by Mr. Cartier and myself. I went to Kingston, and, having met Sir John, found that ho shared the same opinion — that the Govern- ment, under the circumstances, would not bo justified in interfering on behalf of the Bank. At the same time, we both agecd that the Government might possibly express such a desire to the Bank of Montreal, as would in- duce them to give the assistance that might be required, on such securities as the Com- mercial Bank had it in its power to hand over to that institution. J then had an inter- view with a deputation of the Director;^ at Kingston, and conveyed to them the decision at which wc had arrived. I may here remark that it was impossible to obtain a meeting of the Priry Council at that time, as the mem- bers were necessarily distributed over the whole Dominion, engaged more or less in at- tending to the various elections that were going on, and it would have been very difficult to have assembled more than a nominal quorum at Ottawa. I inti- mated, as T have said, to those gentle- men, the decision at which we had ar- rived, and expressed my belief that the Bank of Montreal would, on their satisfying them as to the security, be prepared to give them assistance to the amount that would be neces- sary — that amount, it was supposed, being somewhere between $300,000 and $500,000. I then went down to Montreal, accompanied by Mr. Cartwright, the President of the Commercial Bank, and the other gentlemen who were then acting on behalf of Jthat insti- tution. I saw jMr. Angus, the Manager of the Bank of Montreal — ]\Ir. King being then in England — and expressed to him the hope and the desire of the Government that that Bank would — so far as was consistent with its own safety, and on the deposit of satisfactory securities — extend such assistance to the Com- mer»ial Bank as would meet the exigencies of the case. Mr. Angus met the desire I ex- pressed, in the most friendly way, and stated that, when the gentlemen representing the Commercial Bank made their application, he 1st &'e88. IH Far."] Failure of the Commercial Bank. lA.iMac tier, and liavo rfi. ;er tlum of tho riyof'iffl en ted )o purpose Mr .John thcr hifi espect 1 by Mr. Kingston, that hf! <>ovorn- uot ho ic Bank, that the such a fould in- hoped there would be no difficulty in making ^ un arrangement with them. This was un the < 16th or 17th of September, a month before the final dii&culty arose which resulted in the fiUspenHiou of payments by the Commercial Hank. I did not, after that, ha7o occa.'^ion to i meet the gentlemen connected with that Bank, further than to tell them that I had Hcen the Manager of the Bank of Montreal ; and hoped, whon they met him, they would be able to make a satisfactory arrangement. 1 subsequently heard, the same day or the next day, that nn arrangemcut had been made for an advance of $300,000, on a deposit of ( Commercial paper ; and 1 had reason to hope the crisis in the afl'aira of the Bank had been averted. For some time I heard no more with reference to any difficulty as to the Com- mercial Bank. There seemed to be no alarm cxprescd ^through the public press — I ob- served no disquietude in the public mind; and I was under the impression that everything was going on in a satisfactory manner. But on Tuesday, 15th October, being on that day in Montreal, I was met by Mr. Cartwright and Mr. Holton, who informed me that the posi- tion of the Bank had within a very few days assumed again an alarming oharucter — that the run of depositors, or rather the notices of the withdrawal of deposits, had increased to an extent that would, they were very much afraid, rapidly exhaust the resources of the Bank, and they were desirous that I would again meet the Board of Directors, in order to consider what steps should bo taken. I met on Tuesday, l.^)th October, the Directors who were then in Montreal, Mr. Holton, Mr. Cartwright, Mr. Allan, Mr. Morris, and I think, Mr. Crilderslcevc. We discussed very fully the position and resources of the Bank — considered the fact that its affairs had been subjected to a close scrutiny by three gentlemen whose names were themselves a "ruarantcc for the accuracy of the report they had made — I mean Mr. Holton, J^lr. Hugh Allan and Mr. iMorris — gentlemen who had not been connected with the direction of the Bank, until appointed for the purpose of this enquiry. \ wiis satLslicd in my own mind, (lom the discussion which then took place, that the position of the Bank was one of merely temporary embarrassment, arising Ironi an undue dis(iuietude in the public mind, or in llie minds of the depositors, and that a very short time and a very limited amount of assistance would be sufficient to enable them to overcome the difficulty. But 1 stated to the Directors that, inasmuch :u> Mr. King, the Manager of the Bank of Mont- real, had arrived from England, and was expected to be in Montreal next morning, 1 would prefer postponing any decision as to the course T would recommend the Govern- ment to take, until the following day, and that I wished to have thoir sanction to com- municate to Mr. King the information which hail been conveyed by them to mo. They agreed to this, and I promised to meet them again the following day at three o'clock. I met Mr. King on the Wednesday morning, immediately after his return from England, and we spent a very long interview — extending over two or three hours — in considering very fully the infor- mation with which those gentlemen had sup- plied me, and the poaitiim of the whole mat- ter as it then .stood. We considered, more- over, the effect which would probably be produced on thocouutry, if the failure of the Commercial Bank became a fact. We looked into the condition, so far as the published statements enabled us to do so, of all the vari- ous Banks of the country, compared it with what it had been at previous periods, and considered what effect, according to the best of our Judgment, the failure of the Commer- cial Bank, coming unexpectedly on the coun- try, would have. The conclusion which both Mr. King and 1 arrived at, was that it might be fraught with very serious disasters indeed. Mr. King was d'lulufiil whether any adequate assistance could or would be given by the other Banks. For himself, bo said he had only just arrived in Canada, after an absence of some duration, and ho could not even tell what was the position of the Bank of Montreal, as to its ability to give as- sistance, and he doubted whether aid to a sufficient amount could be obtained by appli- cation to the Banks. After, as I have said, several hours of very serious consideration of these points, I came to the conclusion, and it was acquiesced in by Mr. King, that the best course to take under the circumstances was this — that the Government should take the responsibility of coming to the assistance of the Bank, and that it would be well for me to submit the ease to tic Government, with a recommendation to give assistance to the amount of half a million of dollars. 1 met the Directors of the Bank at three o'clock, and informed them that, under the circumstances, I was prepared to accompany them to Ottawa the same night for the purpose ofconsul ting my colleagues in regard to giving a.ssistanoe to the Bank. I therefore left for Ottawa, and arrived there, with Mr. Cartwright, on Thurs- day, the 17th. I immediately saw Sir John A. Failure of the Commsroial Bank. [l8t S'eta. Macdonald, and explained to him the nature of tho busincBH which had brought mc ho un- cxpeotedly to Ottawa. Very naturally, Hir John Hharcd with mc — and at onoc expressed — an anxiety and dosiro to oavo the Commer- cial Bank from disaster ; and at the Hamc time, I am bound to say, agreed with me fully that serious danger might occur to other insti- tutions, and to tho business of the country, if tho failure took place. Sir John directed a meeting of Council to be called, and sug- gested that I should see the Hon. Mr. Gar- tier. I did 80, and found that he still at- tached great weight to tho objections that we all agreed to as existing at tho previous plication They both agreed that by putt, huch pressure as the riovernment might pro- perly employ, upon tho financial institutions of the country, the necessary assistance might be obtained from them instead of our being required ourselves to como to the re- lief of tho Commercial liank. After consul- tation with Sir John, wo came to tho conclu- nion that it was not expedient to submit the case to the Executive Council. I wai very reluctant indeed to accede to that course I had como up to Ottawa for the express pur- pose of submitting the matter to the Execu- tive, and I thought some of juy colleagues mi^ht feel that I was treating them with dis- courtesy if I went away without submitting it to them. However, I agreed in deferring my own views to his, but I requested him to see Mr. (^artwright, the President of the Bank, himself, to ascertain if he did not wish formal application to be laid before the Government, and at the same time Sir John and Mr. Cartior suggested that I should accompany Mr. Cartwright to Montreal, in order that 1 might use my best efforts to obtain assistance for the Bank from the other monetary inbtitutions of the country. With the understandin,!:; that as soon as that i effort cither failed or succeeded, I should at once advise the Government of the result, I | went back with Mr. Cartwright to Montreal. , We arrived there on Friday morning, the 18th October. I had a consultation with i .Mr. King, the Manager of the Bank of Montreal, and I will take this opportunity of i reading a letter which he wrote to me on the I day on which I was in Ottawa, addressing it ' to mo there, and which consequently did not I reaoh me till after my return to that city ] on the 27th October, though dated the 17th. i The letter is marked " confidential," but I ! have obtained his permission to read it to the j House, and I will do so now, because it con- 1 iains his view of the question as he discussed ' it when it was thought desirable by both of us that the Government should oomc to the assistance of the Bank. The letter is as follows : — ♦* (Confidential.) Bank ok Montreal, " Montreal, 17th Oct., 1867. " My Dkah Sir, — Referring to the conver- sation between us yesterday, upon the unsa- tisfactory position of the Commercial Bank, it may be well that 1 should put in writing tho opinion expressed to you verbally respect- ing the probable eflfect of a refusal upon the part of the Government to afford that Bank the temporary assistance it has applied for to enable it to meet the increaaing demand.^ upon its decreasing resources, arising from the want of confidence felt in its stability by the depositors and noteholders. " After considering the position of the Bank, as set forth in the statements to the 12th October, in your posse3;;ion, and with the in- I'ormation 1 have tfoui other sources of the drain upon the Bank by both its depositors and noteholders, I am satisfied that the Bank must suspend payment within a few days, unless it obtains assistance cither from the Govern- ment or some other quarter. I believe that the difficulty of the Bank has been rendered more imminent by an unwise expansion of its discounts within the last few weeks, upon the unsatisfactory pica of rendering assistance to others, when its own life was in danfjer. " I think it extremely improbable that the Bank can obtain assistance from any other quarter than the Government, as T should most strongly advise my Directors not to lii- ercasc the amount this Bank has already advanced to the (Commercial Bank with the knowledge of the Government, for the reason that 1 believe all assistance will be in vain, if th«c is nut a peremptory cuntraction of their loans. " With regard to the effect, of a !<uspenyion upon the other chartered Banks, you are aware that tho position of some ot the Banks is not in my opinion by any means safe, and I think that they would be compelled to apply for assistance. I do not think, however, that any other Bank is so weak as to be unabh; to furnish satisfactory Bills Keceivable for any reasonable advance they might require, and which this Bank might bo in a jiosition to afford, with the consent of the Government, as regards tho temporary use of Provincial notes. " At the same time 1 cannot conceal from myself that the suspension of the Commercial Bank might create such wide-spread distrMst [lat Sets. Ut Par.] Failure of the Commercial Bank. by both of 3onje to the '«tter is m »TREAL, 3t., 1867. the coQver- 1 the UDsa- rcial Ban k, in writing illy respect^ ^1 upon tho that Bank >licd for to : dcmandf. sing from •ability by 1 of the otho 12th ;h the in- * of the sitors and ank njust unless it nrovern - ieve that eudercd Dsion of 'S, upon istancc n/i;er. hat the f othor Hhould to lil- Ircady th tho reason vain, on of n.siiin I warp « not hink V tor that •: to any and n til nf, <'ial oui ?ial UPt, that my opiaion would prove incorrect, and that other Bank.'! would also be compelled to -juspend. '* There \^ no quustiou that it i.i a matter of very great importance that the (/'ommcrcial Bank should be Navcd from the necc8>iity of suspen.sion at the present moment,[and it will be a great relief to me to hear that the Government a-aumc the reaponsibibity of affording assist- ance. I trust, however, that if thin i.s done, tho Government will insi-st upon tho adoption of immediate measures for bringing tho busi- ncsB of the Bank within such a compas.i as will enable it to meet its obligations ; and if it were possible, I should still further wish tho Gov- ernment and this Bank to combine in ex- erting such a pressure upon tho weak Bank:i throughout tho Dominion as would compel them to abandon their present vicious system of czpanpion without proper reserves, and which will sooner or later bring disaster upon themselves and their confiding creditors. " Yours truly, (Sij^ned,) " K. II. King, " General Manager. " Hon. A. T. Galt, Ottawa." Now, Sir, I have .stated that on my return with Mr. Cartwright from Ottawa, on the morning of Friday, the 18th October, wo met 3Ir. King, and after consultation with that gentleman, it was thought advisable that the representatives of the western Banks .should be invited to attend a meeting in Montreal. Telegrams were accordinj^ly .sent to the head officers of those Banks, requesting that they would as soon as possible send representatives to Montreal, for the purpose of attending the meeting. That meeting took place on Mon- day, the 21st October. 1 do not propose to enter into any detailed statement of the events of that day, because statements of all the proceedings have been so fully put forth by the gentlemen on both side;) who attended, that it is unnecessary for me to do so. I think, however, that no gentleman who was present will refuse me the credit of saying that all my efforts were directed to promote harmony, and to bring about a measure of real relief. I will say further, that during the greater portion of the day, from about twelve o'clock, the understanding was come to, which, in my opinion, and also in the opi- nion of all the gentlemen who were at the meeting, we believed would have produced the necessary assistance to the Commercial Bask. It was necessary, however, that the plan should be communicated for approval to the head officiers of the several Bauks^ and we had therefore to await their reply. Con- sequently the time ibetween twelve or one o'clock and five in the evening, was .spent iu communicating between the agents at Mon- treal aud their superiors, and in awaiting the final issue. At half-past five o'clock the de- cision came, which was to the effect that the plan suggested could not be carried out. (Jp to that moment I had been sanguine that the crisis might be averted. JJpon learning that assistance could not be obtained in the way in which I hoped it could, the Directors of the Commercial Bank called a meeting, at which Mr. Cartwright invited me to be present. He then stated, that as all hope of assistance seemed to have failed, he could only make one suggestion, and that was that he should be authorized to place tho affairs of the Bank in the hands of the Bank of Mon- treal, il" that institution would undertake to protect the interests of the creditois of the Commercial. That proposition was as- sented to, and I promised such moral sup- port as I could afford to overcome tlie diffi- eulticH of the position. Mr. King, however, upon hearing a statement from Mr. Cart- wright, .said that he feared it was impossible for the Bank of Montreal to incur the re- sponsibility of assuming the control of the affairs of the Commercial Bank in the ;itale in which they then were, especially when it was certain that more or less discredit would I attach to that institution from the known I events of the day. For my own part, I felt that 1 I could not urge Mr. King, beyond a certain point, to come to any different conclusion from that at which he had arrived, and for this rea- son, that the Government themselves had been obliged to borrow largely from the Bank of Montreal. We owed the Bank about two and a half millions of dollars, and I wa.s mj'self, as Finance Minister, perfectly aware, and so was Mr. King, that with the provision to be made for the January interest, the Gov- ernment would require to continue that loan ; and therefore I felt that if the assumption of the liabilities of the Bank by tho Bank of Montreal was likely to cripple the resources of that institution, it might interfere with the arrangements of the Government itself. The opinion of Mr. King was confirmed in the course of a few minutes by Mr. Ryan, one of his Directors, who stated that if Mr. King made the recommendation, the Directors would not feel them.sclves justified in assum- ing the management of the affairs of the Commercial Bank. I then told Mr. King that now that the matter had come to the point that assistance could not be obtained 8 Failure of the Commercial Bank. {lit Sets. from the other banking institutions of the country, I must immediately telegraph to the Government of the unfortunate failure of our eflPorts. I went to the telegraph offce within three quarters of an liour of the un- successful termination of our negotiations, and telegraphed to tSir John A. Macdonald to the effect, that the attempts to obtain aid from the other Banks had failed ; that the suspension of the (yomraercial Bank had been determined upon by the Directors ; and that I wished him to call a meeting of the Executive Council immediately, and to inlbrm me of the course to be taken. At the name time I took steps to have the telegraph offices kept open all over the country during that night. I saw Mr. King subsequently, and in- formed him that the telegram had gone. I then asked him whether in the event of of the Government authorizing me to inter- fere on behalf of the Commercial Bank, I could rely upon the resources of the Bank of Montreal, if necessary. Ho at once replied that the whole resources of tlic Bank would be at the di.'iposal of the Government if re- quired. I then said to him, I now think it necessary that we should make arrangements at the earliest hour in the morning ; and therefore I must request you to remain with me to-night until a iinal answer is received from thi; Uovernmont. ! made this request with a view, if our efforts should prove successful, of transmitting the necessary instructians to the various agencies throughout the country, before the doors were opened the next morning. He assent- ed to my proposal, and we remained together until half-past eleven o'clock in the evening, when 1 received a message I'rom Sir John A. Macdonald, to the effect, that he had been un- able to obtain the attendance of two leadinp, members of the Government, and he desired if passible, that the crisis should be delayed until the next lay. I immediately replied that it was impossible to do that, as all the Banks throughout the country had been tele- graphed that the doors of the Commercial would not be opened the next morning, and therefore I repeated my request that he would call his colleagues together to obtain their as- sent, and inform me before 8, a.m. I then told Mr. King that it would not be necessary ior him to remain with me any lo^ !;er, but that I would instruct the telegiaph otfices to £eud the answer to me, and to be prepared to receive our instructions at any honr during the night. I further stated that if I received the reply which I hoped to re- ceive, he would have to allow me to see him at any time in the course of the night or in the morning before eight o'clock, to which he assented. At half-past two o'clock in the morning, [ received a teleg»'am, which I now propose to read to the House : — "Ottawa, 'J 1st Oct., 18G7. '<To Hon. A. T. Galt,— "Private. — Council met and considered yuur telegrams. Information as to condition of Bank, character of security offered, and rea- sons why other Banks declined to help, insufficient to warrant any action by Govern- ment. (Signed,) ''J.vo. A. Macdonald," When I received that message it produced a very painful feeling of disappointment in my mind. My first enquiry was whether the telegraph offices were still open, to which the messenger replied that the agent at Montreal, on receipt of this message, had not consider- ed it necessary to keep open the offices in the West, and therefore there was no means at my disposal to communicate with my col- leagues. It became necessary for me then to face the failure of the Bank, and the pos- sible consequences. I felt the delicacy of the position in which t was placed by the telegrams which were .sent through the coun- try, and it appeared to me, as I shall presently have occasion to point out, that I had not been treated with the courtesy or fairness which, as Finance Minister, I had a right to expect. I thought that the Government had placed the failure of the Bank in such a posi- tion that the matter would necessarily come before Parliament and tlie country in such a way as to make that event appear to be attri- butable to me, for not having giveu the Government full information, and that the whole responsibility of not having obtained assistance, and of not averting any disaster that might occur, would fall upon my shoul- ders. The disappointment which I experi- enced was also increased by the feeling that I was placed in the painful position of being betrayed by my friends. Moreover, as Fi- nance Minister, I had believed that I posses- sed the confidence of my coUeages, and that they would not have deserted me under such circumstances. I had not recommended in my telegrams to Sir John that any as- sistance should be given to the Bank, because he was aware that I had been in Ottawa lor the express purpose of recom- mending that assistance should be given. Therefore, I felt that I had been deserted*by my friends, and that, as Finance Minister, looked to by the country for the maintenance 1st Par.] Failure of the Commercial Bank. 9 whole case to express desire of its credit and the averting of disaster, I was in the position of being supposed to have had power while I was impotent to save. Under these circumstances I felt that there was only one course for me to pursue, name- ly, to place my resignation in his Excellen- cy's hands. I thought it necessary to ad- dress this answer to Sir John : — '< Montreal, 22nd Oct., 1867. " Mv Dear Sir John, — At two a.m. I received the following telegram from you. ' Private. — Council met and considered your telegrams — information as to condition of Bank^ character of security oflFered, and reasons why other banks declined to help, insufficient to warrant any action by Govern- ment.' " The grounds stated for the refusal of the Government to act appear to me to imply both censure and want of confidence. As regards the alleged want of information, I must remind you that I went to Ottawa with Mr. Cartwright, the President of the Com- mercial Bank, on Thursday last, for the purpose of submitting the Council, and only at your abstained from doing so. The whole state of facts were thus known to you, and also to other members of the Government. If you sup- posed any change had taken place, you could have sought and obtained this information by telegraph last night, before adopting the resolution you have communicated to me. " Had the Government seen fit to rest their decision upon the want of proper authority, or the inconvenience of establishing a prece- dent, I might have consented to share the responsibility of this action; but I must decline to do so upon the grounds statod in your telegram. " I have therefore only to place my resigna- tion in your hands, and to request that you will submit the same to Elis Excellency the Governor General. "Believe me, &o., &., (Signed,) '^ A. T. Galt. >' Hon. Sir J. A. Macdonald, K.C.B." That letter was written on the 22nd Octo- ber, the day in fact of the suspension of the Commercial Bank. I did not receive an answer until Wednesday morning, when Sir John telegraphed me that I had entirely misunderstood the action of the Council ; explanations were due between us, and that he wished me to como up to Ottawa. I still felt, under the feeling of very severe dis- appointment, not to use a stronger term, which I then entertained, that I could not 2 accede to his request. I therefore replied that I must decline his proposition, and stated that any explanations must be in writing. — Sir John then did me the favor, and I must thank him lor the consideration which he displayed towards me, of telegraphing to say that- he had engaged a special train and would como down to Montreal. On Thurs- day, the 24th, we met, not until two o'clock, the train on which he was having been de- layed. He stated to me that I quite mis- understood the intention of the Govern- ment ; that they had no wish to throw any undue responsibility upon me; and added that I was entirely mistaken in supposing that either himself or Mr. Cartier, or any of the other members of the Government, had any lack of confidence in me, or any intention of withholding their support from me. We had considerable discussion to- gether, but I still remained under the im- pression that I should be obliged to adhere to my first resolution. However, I had an appointment with Mr. King at the Bank ot ftlontreal, at five o'clock — because I was still anxiously watching the efiFect of the failure on the Banks of Western Canada — and my honorable friend the Premier had also an ap- pointment with the present Finance Minister at the same hour. I therefore left him and went to see Mr. King, who met me with the statement that the crisis had commenced in the Province of Ontario, and he read to me a message in cyphbr, which said that a run had commenced on the Royal Canadian Bank, and threatened to extend to the other Banks in Western Canada, and might assume a gen- eral character on the next morning. He urged me most strongly to withdraw my resigna- tion, and not to leave the charge of the finances of the country at the moment when a crisis had come upon us. There was the more force in the demand which he made upon me at that time, because in view of the possible crisis which might arise, he had with my knowledge and full concurrence, but cer- tainly at the risk of some inconvenience to the Bank, provided himself with a large amount of specie from New York, both sent to Toronto and to Montreal. Consequently he had made all possible provision for the crisis if it did occur, and for extending aid if necessary. Therefore Mr. King was war- ranted under the circumstances in asking me not to insist upon retiring from the Govern- ment on this particuler question, and at a time when if my retirement had been known it might have caused much public embarrass- ment. Finally I made up my mind, under 10 Failure of the Commercial Bank. \\&t Seas. the exceptional circumstances, to retain uiy office. 1 returned to Sir John and stated to him that I would accept frankly the expla- nations which ho had given, but that I must have them in writing, because the telegram which he had sent me was on record. The question then arose as to the best means to meet the difficulty which had come upon us. Sir John left for Ottawa, assuring me that Government would give me any support that I might desire while I remained in Montreal. The next day, Friday, the 25th October, passed without any material change in the position of affairs. We got information that the Banks had, as was supposed, suffered to some extent, but it was believed that the efforts which were being made by the various banks to sustain themselves would be successful, and no event of any importance occurred. Saturday, the 2Gth came, and with regard to that day, I shall be obliged to trouble the House, by residing several telegrams which passed be- tween myself and members of the Govern- ment. It was really the important day of the crisis. I first received a telegram from Sir John A. Macdonald, in which he suggested that it might bo desirable that I should pro- ceed by special train to Ottawa. To that I replied, that I did not think it necessary for me to go up, and that I could avail myself of the following day, Sunday, for communica- tion, if necessary. He answered, that I was quite right in remaining in Montreal. I re- ceived at 2. p.m., from Mr. Rowland the following telegram "Ottawa, 6th Oct., 1867. "To Hon. A. T. Gait, . "Confidential. — Public officers telegraph that Bank of Montreal refuses bills of all Upper Canada Banks, except on collection. Anxious to hear from you. Carticr has left lor Montreal. (Signed,) " W. P. Rowland." To that I replied at 3:25, as follows : — "MoNTiiEAL, Oct. 26th, 1867. "Hon. VV. P. Rowland, Ottawa. ? ^"Private. — Message received. Have seen King. His Kingston mistook instructions. Has been advised of his mistake. Bank does not refuse Royal Cana- dian notes so far, but instructed ^agents to have understanding with parties de- positing. Nothing with regard* to other Banks. 'We cannot interfere with dis- cretion of Bank without giving *^our own guarantee. Do you lliink public interest would justify ? Answer. (Signed,) "A. T. Galt." A few minutes afterwards I received fur- ther information, which induced me to send the following message to Mr. Rowland : — " 3:45 P. M., " Montreal, 26th Oct., 1867. P. Rowland, Ottawa : telegraphing have heard more news i'rom West. Fear distrust " Hon. W " Since alarmin^; becoming general. Will be better able to judge after business hours. Think Mon- day will be a critical day. Bank of Montreal has done nothing except what her own inter- ests demanded. (Signed,) « A. T. Galt." I may state in reference to the first tele- gram, that Mr. King informed me that he had learned before twelve o'clock that his Kingston manager was acting as stated, refusing the bills of all Upper Canada Bank.s, and that he at occe sent instructions to him. I then sent to Mr. Rowland the telegram which I have just read, and received the following reply : — " Montreal, Oct. 26, 1867. " To Hon. A. T. Galt, " Confidential. — Message received. Order given. Does not determine policy. All desire that you should come up to-night, " W. P. Rowland." And also the ibllowing : — " Montreal, Oct. 26, 1867. " To Hon. xV. T. Galt, " Confidential — Have seen your message to Rowland. We have authorized public officers to receive notes of all chartered banks^ except Commercial and Upper Canada. Council thoroughly converted to our opinion as to support of banks. " John A. Macdonald." I had no doubt that the stops taken by the Government would go far to allay the distrust existing in the public mind. I therefore telegraphed to Sir John, as follows : — " Montreal, Oct. 26, 1867- " To Sir John A, Macdonald. " My information does not lead me to believe things so serious. Kin<T has telegra- phed to receive all notes on Monday morning. Believe I had better wait here. No justifi- cation yet for measure proposed. "A. T. Galt." Sir John answered to the following effect: — Id J'ar.] Failure of the Commercial Bank. 11 « Ottawa, Oct. 26, 1867. " To Hon. A. T. Galt. " Come up by all means. Bring Tilley with you. (Signed), <'JonN A. MACDONALit." I saw Mr. Tilley that evening, and also Mr. Kenney, the lleceivcr General, both of them happening to bo in Montreal. I ex- plained the position of matters to them, and they agreed with me as to the course that should be taken. As to going to Ottawa, Mr. Tilly did not choose to make the journey at that time. He had only just arrived in iu Montreal after a tedious and long voyage from New Brunswick, which, aside from the weariness incident to travelling, was made under circumstances that, I trust, rendered it ii happy one. (Ilcift-, hear, and laughter.) lie therefore did not consent to accompany me, nor did Mr. Kenney, but we all agreed as to what course should be taken. Mr. Howland also tcUgraphcd me to this effect : — " Ottawa, Oct. 26, 1867. "ToA. T. Galt. " Confidential. — Mcs.sagc received. Hope that you will come up to-night. Have tele- graphed Government officers Government will receive notes of all chartered banks except Commercial of Kingston and Bank of Upper Canada. Officers asked instructions, and have given this reply by advice of Council. (Signed), " W. P. Howl.'VNT)." Sir John again telegraphed mo : — " Ottawa, Oct. 26, 1867. «' To Hon. A. T. Galt. " Confidential. — Council agree fliat you hud better run up to-night. Carticr left at one thirty (1:30) to-day for Montreal. Brini him back. Telegraph Detlor for special train Prescott. (Signed), "Jno. A. .Macdonald." Of course, after receiving these telegrams from Sir John, I at once waived uiy own opinion as to the necc.'rsity of going to Ottawa, and went. I am bound to .say lierc. Sir, that I was disappointed at the telegram having been sent to the public officers throughout the country under the signature of any other member of the Government than myself. The fact that it w:is signed by Sir John instead of myself might, I feared, lead to a conviction iu the public mind that in regard to the panic and the mode of dealing with the JJanks there, was a distinct policy on the part of the Gov- ernment which differed from my own. I was afraid such a misconception would be formed in the public mind, ond I would therefore have preferred him to have put my name to the telegram or put mo in posRession of the announcement before he sent it to the , officers of the Government. I now come to the events of Sunday the 27th. I left Mon- treal by the evening train and arrived at Ot- tawa on Sunday morning at ten or eleven o'clock. I will take this opportunity of re- ferring to what some of our writers in this country, who prefer so mnch the letter to the spirit of the Bible, liave said in regard to Mr. Cartier and my.4elf for having, on that particular Sunday, devoted them- selvet;, as members of the Government, to the fask of trying to save the coun- try from disaster. I have as much re- spect for the Sabbath as any one, and have always abstained from the practice of violating it ; but, I would never hesitate to act in a case of necessity, even although it was on the Sabbath ; and if there ever was a pressing necessity it was that on that Sunday the Go- vernment should devote itself to the christian duty of saving the country, (Hear, hear.) We met in Council on Sunday, and the first question that came up for discussion was what policy the Government should adopt with reference to the crisis that then actually pre- vailed iu the Province. I stated to my col- leagues what the point was that required to bo settled — would or would not the Govern- ment interfere w. i all the power at its command to prevent the impending dis- aster, and the proposition met the unanimous approval of the members of the Government who were present, that they would, if neces- sary, come to the a»!slstance of the Banks, on Monday morning. I informed the Council that the most effective arrangements that could be made to meet the apprehended danger, had been already doue, namely, largely to increase the stock of specie held at Montreal and Toronto, and to forward Provincial notes to different points of danger, where they might be ready to be paid out, in case of a continued run ; so that the only thin'^ that would be required would bo to telegraph instructions on Monday morning, in order to put the crisis at an end. The question then was, whether the Govern- ment was called upon to do this. No applica- tion had been made by the Banks for aid ; but fooling that the Banks were in great dan- ger, and that, perhaps, they thought an aplica- tion to the Government would be useless, we sent this telegram to the Managers of the Banks. Before reading it, I may mention that on tiiat, particular Suiidiiy, the telegraph offices all over the country were kept open. We had it therefore iu our power to communicate at onco with any point where danger was threat- ened. This message was sent : — 12 Failure of the Commercial Bank. \l8t iSesa. " Crown Law Department, " Ottawa, 27th Oct., 1867. ^ To Bank Managers at Toronto, Mannger of Goro iiank and lion. Mr. Simpson. "Will you ascertain, for information of Government now in Council, what are the views of the Western Banks in regard to pro- gress of panic and ability to meet it. (Signed), " A. T. Galt." To this telegram wc received a reply in each case. 1 will not trouble the House by reading all these replies, for they are of the same tenor throughout, but I may say that I will hand theui to the reporters for the Press in order that they may appear afterwards in extenso. 1 will read one of them, the first that comes to hand. It is from Mr. Smith, the President of the Royal Bank, Toronto : "Toronto, 27th Oct.. 1867. " To lion. A. T. Galt. " The Bank of Montreal having yesterday, at several points, refused the bills of other Banks, will have the effect of increasing (he panic which was subsiding. Should another Bank suspend all must follow, and universal bankruptcy ensue Think all the Banks can redeem unless the panic is intensified. Mean- time all discounts are stopped and business suffering. Wheat has dcclipcd twenty (20) cents. (Signed), " A. M. Smith, " President." I: 1 The following replies were also received but were not read by Mr. Galt. "Toronto, 27th Oct. 1807. " To Hon. A. T. Galt, " Run subsiding — gold arriving freely from New York. Royal Canadian niiiy want help if King continue his course. (Signed), " Jas. G. Worts."' " Bowmanville, 27th Oct., 1867. "To Hon. A. T. Galt, " Finance Minister. " Little or no excitement here — good deal Toronto and westward — think will spread. By sacrificing material interests our Bank can stand hard run ; can't speak for others. — Think steps should be taken to redeem Com- mercial notes at par ; Government giving no- tice that notes of all chartered banks received at par in payment public dues — this would stop panic. Will be Toronto to-morrow. (Signed), " John Simpson." " Toronto, 27th Oct., 1867. « To Hon. A. T. Galt : " Telegraph received. Have just come to town to see the different parties, and will communicate result the earliest moment pos- sible. Council had better not adjourn until they hear i'rom me again. (Signed), " W. McMaster." " Toronto, 27th Oct., 1867. " To Hon. A. T. Galt, " Panic which appeared to bo subsiding a little, is likely to be greatly intensified by the Bank of Montreal having refu.sed Royal (,'ana'liaii bill.s at some of its branches. In the event of this being the case the conse- quences must be very serious, and the Go- vernment should do something in order to avert the calamitous results that must follow in Western Canada. I shall wait a reply in order to see managers as requested. (Signed), " Wm. McMaster." "ToRON-o, 27th Oct., 1867." "To the Hon. A. T. Galt: " If your Government in Council can suffi- cently control your Bank to continue publicly usual courtesies to Wei-tern Banks, think the panic will subside, and that they will be pre- pared to meet the demands of public. Want of confidence by it in any oao of them at present time might prove disasterous to the whole. (Signed), " A. FisiiER, " Manager Ontario Bank." The Government then sent this message to the?e gentlemen : — " Ottawa, 27ih Oct., 1867. " A. Fisher, Esq., " Ontario Bank, Toronto. " Government have already instructed their officers aud Bank of Montreal to receive pub- lie dues in notes of Banks. We cannot instruct Bank of Montreal beyond this point, without assuming res;:onsibility of all their business, which form of aid could not be adopted. Have requested King to go as far as consistent with safety, without our actual guarantee. He informs us refui^al arose from mistake of instruction.^ at Kingston, and wo understand all current notes will be taken by Montreal Bank to-morrow. Keep us ad- vised. (Signed), " A. T. Galt." There was no reply to this message, and the Banks, as I have said, did not make ap- plication for aid. Coincident with this wc sent two messages to read thus: Mr. King — the first 1st Par.] Failure of the Commercial Bank. 18 "Ottawa, 27th Oct., 1867. "E. H. Kins, Esq., "Bank of Montreal, "Montreal, "Government arc informed by Ontario and Toronto managers, that they believe panic will subside, if Bank of Montreal continue usual courtesies. Government trust you will be able to do so, consistently with your own safe- ty, but we do not guarantee your collections beyond thosa paid in by public officers. We have sent the following telegram to Toronto : 'Keep mo advised.' (Signed,) "A. T. G." The second reads as follows : '• Montreal, 27th Feb , 1807. " E. H. Kino, Esq., "Private.— Government wish you to increase our specie reserve at Toronto by transfer of gild from Montreal; also, to send up supply of notes payable in Montreal. Small denominations likely to be most useful. This is precautionary. I shall remain here. Have written you. (Signed,) "A. T. Galt." This last telegram was sent with a view of our being in a position, as I have said, to meet any possible application that might be made to us. In reply we received this mes- sage from Mr. King : — " MONTREAI., 27th Oct., 1807. " To Hon. A. T. Galt, " Message received. We have already given instructions to receive all Hank notes except Commercial and Bank of Upper Canada. Our wishes are those of the Government, and in this emergency we regret to receiving no encouragement to look beyond our own .safety. — The Bank holds specie at Montreal and Toronto in excess uf Government reserve, which is quite at your service. We tele- graphed last night offering assistance to Bank most in danger. (Signed,) " E. H. King." I again telegraphed on this same day to Mr. King : " Ottawa, 27th Oct., 1807. "ToE. H. Kino: " Message recei:ed. Let me know your ad- vices from West to-morrow. It run continues and extends it will probably be necessary for you to accompauy me to Toronto. (Signed,) " A. T. G." The letter to which I referred in this mes sago I shall read to the House. It was sub- mitted to and approved by the Privy Council : " Ottawa, 27th Oct., 1807. " (Confidential.) " Mv DEAR Kino, — Government will come to aid of Western Banks if they ask it ; but thus far in reply to us they allege their ability to stand, if the Bank of Montreal does not discredit them. " We cannot sec our way to desire you to take their notes, except for our own collec- tions, though we should be happy if you can do so. But we feel that to go beyond that la in reality endorsing them without limit, and without conditions. " Mr. Simpson, of the Ontario, thinks panic will spread, and suggests we should take all notes, incliidiny Commercidl, at par for public dues. " I would request, on the part of the Government, that yon will strengthen our specie reserves at Toronto, by transfer of gold from Montreal, and that you also for- ward to your Branch there as many notes, pai/abk in Montreal^ as you mny think likely to be wanted in case of need. I presume small denominations will be most useful. Of course they can be reinforced day by day if required. " Yours faithfully, (Signed,) " A. T. Galt." I may state that the reason for desiring these notes to be made payable in Montreal was that in case of a continued demand for specie the Government would have at least twenty-four hours to prepare for its with- drawal by holders of the notes. I may take this opportunity of saying that the panic had not shown any inclination of extending to Provincial notes, and I am informed by the Manager of the Bank of Montreal that only two thousand dollars of them were presented for redemption during the three days in which the panic prevailed. On the Monday Mr. King addressed the following letter to me, which I have his permission to read to the House : " Bank of Montreal, " Montreal, 28th Oct., 1867. " (Private.) " Mt dear Galt, — " Your note by Mn Cartier reached me this morning. I think it right to say that I fully understood the effect of the advertisement which appeared in this morning's papers, that the Government 'would receive the notes of Chartered Banks, &c.' "It placed this Bank whioh has no circula- tion, and which is the agent of the Govern- ment, in the unenviable position of electing to take a very heavy risk by receiving the notes of 14 Failure of the Commercial Bunk. [lut Sent. other Banks iodiscriminately, or of incurring the great unpopularity of derending itself, as it has a perfect right to do, by reiuciing any bank note. If the ineusuro taken by the Government was of itself suflicient to restore confidence, I would not have thought bo much of it, but I well know, and so do the Banks themselves, that the Govcrun:ent ad- vcrtiscmcut would not have been sufficient if wo had discredited them to-day, and it is for thatreaeoQ I feel that the Government threw nil the responsibility upon the Bank — its own agent — without consultation or asking our co-operation, until the telegrams had been sent over the country. I do not of course mean to say that the Government would not be prepared to take any responsi- bility that the exigency of the public in- terests might demand, but I think it will be admitted on reflection, that the course that was taken was not of itself sufficient, and placed U3 in an invidious position, such as wc hardly deserved. It is true that the Government could not bo expected to endorse all the Banks at such a moment. But if they could not, could we ? At least the Government might have stood by us for one day. If the Bank had joined in the adver- tisement, the panic was at an end. If the Bank had discredited the other Banks, who can tell which of them would have stood ? It was a serious responsibility [This refers to Mr. King having agreed to accept all notes] and I took it in the best interests of the country ; but I would not be frank if I did not let you see that I feel that the Bank hardly received that consideration which it might have expected at this critical period. I am of course aware that the telegrams were dispatched by the Council before you left the city, and there is no doubt on my mind that tlie full bearing of the measures that were taken, and the effect of your telegrams last night, that we must consult our own safety, were not fully apparent. * =i: * * * * * (Signed,) " K. 11. Kino." On Monday morning, when the Council met, we were very much gratified to find by intelli- gence which reached us from all quarters of the Province, that the panic had really subsided, and that there was no apparent necessity — at any rate, there was no demand — for the Gov- ernment coming to the assistance of any of the Banks. In the course of the day, we received a telegram from Mr. Cameron, the hon. mem- ber for Peel, stating that the Banks had had a meeting, and desired to send a deputation to Ottawa, to have an interview with the Gov- ernment. To that telegram, I replied that we would be glad to see any gentlemen who might come on behalf of the Banksjbutthat wo would ike to know the object sought to bo attained by the visit. Mr. Cameron replied that that would be fully explained when they arrived. The Council mot again on the 29th. At that meeting, I thought tin time had arrived when I should ask my hon. friend at the head of the Government to give mo in writing, the ex- planations which ho gave J^mcjverbally on the lay of the panic. This, my hon. friend, in the kindest and handsomest manner, did, and I will now read to the House his letter. I may premise it by stating that I, as stated, en- tertained a mo.st painful feeling on reading the telegram from my hon. friend, and it, therelbrc, gave mo a corresponding feeling of satisfaction to receive the assurances contained in this letter. It is to the following effect : — " Ottawa, 30th October, 1867. " My Dear Galt, — T was not conscious, until I heard your statement in Council tliis afternoon, that you deemed it essential that I should, in writing, respond to your note of the 22nd instant, but I mo.st eiietrfully accede to your wishes, and have pleasure in repeating the assurances which 1 have made to you verbally, that in framing the telegram to which your note refers, no member of the Council (and least or last of all myself) had the most remote idea of geoking to throw upon you the rcspon.sibilily of the failure of the Commercial Bank, or of thi cour.se wlii'^h the Government pursued in not coming to the assistance of that institution. The actual wording of the telegram leaves open, certain- ly, the inference which you have drawn, but we '1 disclaim the supposed intention which ha.s - iven you ofTence ; and you must bear in mind that the message was not meant to indicate the final action, or even a decision, of the Government; it was rather a confiden- tial communication from one section of the Council to another, thrown out by way of consultation, and seeking for a reply. A decided negative to the proposal was over- ruled, because we wished to keep the door open for further negotiation, and for infor- mation as to the reasons which actuated the other Banks in rofusingtouid the Commercial ; but we all recognized the earnest endeavors which you had made for the maintenance of the Bank, and no one had any idea of imput- ing blame to you for not having put tho Gov- ?rnment in full possession of every inforuju- tion as to tho position of the IJank, which you had it in your power to afi"ord. " I hope that this explanation will satisfy Itt Par.] Failure of the Commercial Bank. 1.0 you, that wliafever was unfortunate in the wording of iho tolegram, nothing could have been furtlier from our thoughts than to have occasioned tho annoyance a;id nuBtrust whluh it gave riso to on your part. " Believe use, my dear Gait, " Very siccerely yourw, (Signed,) " John A. MACDONAiiU. "The Hon. A. T. Gait, " &c., &c., &e." I may state, whit I have already said before, that it was impossible to answer tho tele- gram, the substance of it having been so understood by the operator wlio trans- mitted it, that the oflSces had been closed. I now arrive. Sir, at tho conclusion of all I have to say in reforonco to the failure of the Com mercial Bank, the panic having ceased on the day that letter was written. I may add a word in regard to tho extraordinary jpprcs- sion which seems to have prevailed in the public mind, in respect to the causes of that panic — an impression founded on the impu- tation that tho Finance Minister of I he coun- try and the manager of the largest Bank in the country de.«ircd and deliberately attempted to bring about tho ruin of one of the largest and most influential banking institutions in Canada, and to plunge the country into all the misery of a great commercial disaster. As far as the Finance Minister was concrned, I think he would have shown himself a fitting inmate for a lunatic asylum, if, a few days before the meeting of a new Parliament, ho had put himself in the position of trying to bring about a violent disturbance of the financial and commercial relations of the country. To lay such an imputation upon one occupying the responsible position of Finance Minister, is, I think, extraordinary and preposterous — the very acme of absurd- ity. (Hear, hear.) Besides, Sir, to put it even on the low ground of personal interest, it is perhaps known to soma honorable mem- bers that I am a shareholder in the Commer- cial Bank, and for me to have entertained a desire of tiio kind that has been imputed to me was equivalent to a wish deliberately to destroy my own property. So much for myself. With regard to the charge against the Bank of Montreal, I think that tho bank- ing institution whic'- carries on the largest commercial transactions in the country mu?t, rxttcrls paribuK, bo tho largest loser in tho event of a panic. Therefore I say that the impression that thu Bank of Montreal and myself, as Finance Minister, entertained that design was the most extraordinary delusion that ever took possession of the public of this or any other country. (Hear, hear.) I hope that the explanations \«hich I have just made will at any rate satisfy tho House and the country, that what- ever misconception may have taken place in regard both to Mr. King and myself, cer- tainly, as far as I was concerned, every eftbrt that could have been made was made willingly by me to sustain the Commercial Bank, and, I'ailing that, to prevent the disaster spreading to the other Banks. (Hear, hear.) I shall say no more upon that point, because it is not my desire, in making these explanations, to say anything that is likely to give offence or raise unnecessary discussion upon a ques- tion that is not properly before the House. I have only now to add. Sir, that on the receipt of the letter of the 80th October, from Sir John A. Macdonald, I waited upon my colleagues in Council and informed them that I accepted, as I had ."wi I would do, the explanations Sir John .ad given me, and thanked them for their f'.isideration and goodness in putting thei: m the shape he did in his letter. Two ''u, * afterwards I re* viewed carefully my own personal position, and came to the conclusions, for tho reasons which I have already conveyed to the House, that it was noces.sary lor me to resign my oflice as Minister of Finance. On the 1st of November I did so, and the responsibility for the subsequent course of events, which I am happy to say, has not been of a character to excite any apprehension or alarm, so far as that responsibility falls upon those who have tho duty of guiding the financial affairs of the country, is a subject npon which I have no observations now to offer. I thank the House for the opportunity it has afforded me of making these explanations. I think that, at all events, they relieve me from the charge of attempting to bring about a great financial disaster, ani also show that I endeavored faithfully to do my duty in tho very anxious and trying pa.sition in which T was plaoo 1 . (Applause.) *'^'\y y\^\ *"\*^ ".