Bank of the People

434: 105: 569: 297: 450: 425:", whereby they would issue a banknote only if they had enough specie to cover it. They avoided speculative risk because if they failed, their shareholders were responsible for the full loss. Since the banks did not require a legislated charter, many more banks could be founded, and they were more competitive, thereby endangering the solvency of the speculative chartered banks. 463:

argued that the Bank of Upper Canada "served the double purpose of keeping the merchants in chains of debt and bonds to the bank manager, and the Farmer's acres under the harrow of the storekeeper. You will be shewn how to break this degraded yoke of mortgages, ejectments, judgments and bonds. Money

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During the financial panic of 1837-8, the Tory dominated Legislative Assembly banned all further joint-stock banks, even though it was the speculative chartered Bank of Upper Canada that was insolvent and required a government bailout. The Bank of the People survived the panic unscathed and without

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The new bank was soon to prove its distinctiveness. Despite offering 5% interest on deposits, it was able to deliver a 6% dividend in 1837, in spite of paying off £1,200 in start-up costs. It managed to do this despite the general economic downturn, and without resorting to widespread litigation.

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in Toronto in 1835. It was founded after they failed to establish a "Provincial Loan Office" in which farmers could borrow small sums guaranteed by their land holdings. The Bank of the People was the only bank in Upper Canada not to suspend payments during the financial panic of 1837-8. Many of the

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Dr. Duncombe's report opened the legal door for new banks to be founded. The Reformers' abandoned their attempt to establish a "Provincial Loan Fund" for farmers in the Legislative Assembly, and instead turned their efforts to creating a new joint-stock bank. The first bank to be proposed was the

418:(legal tender) to exchange for those notes once redeemed. The more banknotes they loaned out the more interest they made, but at the increased risk of bankruptcy. Protected by limited liability, their shareholders put profit above risk. 446:. However, in a bitter shareholder proxy battle, control of the bank was won by the Hon. John Elmsley Jr., a member of the Family Compact. He was one of the largest shareholders in the Bank of Upper Canada. 410:, hence every partner in the bank was responsible for the bank's debts to the full extent of their personal property. The chartered banks, in contrast, protected their shareholders with 387:" who used their control of the currency supply and credit to control trade and ultimately, the farmers. They had a "licensed monopoly" to print paper money, which reduced competition. 993: 1139: 1124: 414:

and hence from major loss; they thus encouraged speculation. The chartered banks would loan out many more banknotes (little more than bank issued I.O.U.s) than they had

652: 1229: 557:, a wealthy American-born hardware merchant, ship owner and reform politician. They drew their clientele from among the French farmers and artisans. 398:

based on several successful Scottish banks. The Scottish bank system had always differed from the English system. The difference between the English

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shareholders, however, took part in the Rebellion of 1837 and the Family Compact plotted to have it taken over by the Bank of Montreal in 1840.

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One loan from the bank stood out: they gave William Lyon Mackenzie £200 to found the Constitution newspaper on July 4, 1836 to organize the

394:, a Reform politician in the Legislative Assembly, was part of a "Select Committee on Currency" that offered a template for the creation of 372: 325: 220: 533:

The name selected by the reformers, the Bank of the People, reflects their emerging strong ties and shared strategies with reformers in

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and the Scottish joint stock banks lay almost entirely on the issue of stockholder liability and its implications for the issuance of

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was established through the Bank of Canada Act of 1934 and the banks relinquished their right to issue their own currency.

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