The first known history of banking was the loan of grains made by the merchants of the old world, to traders and farmers who transported goods between cities. This can be traced back to around 2000 BC.
Later, in ancient Greece and during the Roman Empire, lenders based in temples made loans and added two important innovations: they accepted deposits and changed money. Archaeology from this period in ancient China and India also shows evidence of money lending activity. Banking as we know it today can be traced back to medieval and early Renaissance Italy, to the northern cities of Florence, Venice and Genoa. The Bardi and Peruzzi families dominated the banking industry in 14th century Florence.
The British administration under Isaac Brock introduced what became known as army bills in 1812, in order to finance the War of 1812. The total value of these bills was 250 000 pounds. These were promissory notes issued directly by the government. They came into wide usage during the war (1812-1815) to make up for the lack of bullion in Upper and Lower Canada. Unlike the card money used in the late 17th century, army bills could be and were in fact exchanged for gold coin once the war had ended.
In 1817, Montreal bankers were granted a charter by the British government to open the first formal bank in Canada. As the early charters indicate the path on which the Canadian banking system eras starting, their main points may be set out briefly. All the charters were alike and, therefore, the Bank of Montreal charter may be taken as typical.
In 1818, the Quebec Bank was started, as well as an institution called the Bank of Canada, which should not be confused with a later bank of the same name or with the present central bank. These two banks applied for charters and received them about the same time as the Bank of Montreal. Then, as now, each bank required a separate Act of incorporation, but then there was no general banking code, and the charter was the source of the bank's legal capacities.
Through the collapse of the private Bank of Upper Canada at Kingston and the inability of the Bank of Kingston to get going within the period of its charter, the Bank of Upper Canada obtained a monopoly of banking within the province and hoped to keep it. With its control of the Legislative Council it could have thwarted all efforts to obtain new charters, but a financial crisis in 1821-2 made it necessary for the bank to apply to the legislature for a reduction in its capital and for other considerations.
Later, in ancient Greece and during the Roman Empire, lenders based in temples made loans and added two important innovations: they accepted deposits and changed money. Archaeology from this period in ancient China and India also shows evidence of money lending activity. Banking as we know it today can be traced back to medieval and early Renaissance Italy, to the northern cities of Florence, Venice and Genoa. The Bardi and Peruzzi families dominated the banking industry in 14th century Florence.
The British administration under Isaac Brock introduced what became known as army bills in 1812, in order to finance the War of 1812. The total value of these bills was 250 000 pounds. These were promissory notes issued directly by the government. They came into wide usage during the war (1812-1815) to make up for the lack of bullion in Upper and Lower Canada. Unlike the card money used in the late 17th century, army bills could be and were in fact exchanged for gold coin once the war had ended.
In 1817, Montreal bankers were granted a charter by the British government to open the first formal bank in Canada. As the early charters indicate the path on which the Canadian banking system eras starting, their main points may be set out briefly. All the charters were alike and, therefore, the Bank of Montreal charter may be taken as typical.
In 1818, the Quebec Bank was started, as well as an institution called the Bank of Canada, which should not be confused with a later bank of the same name or with the present central bank. These two banks applied for charters and received them about the same time as the Bank of Montreal. Then, as now, each bank required a separate Act of incorporation, but then there was no general banking code, and the charter was the source of the bank's legal capacities.
Through the collapse of the private Bank of Upper Canada at Kingston and the inability of the Bank of Kingston to get going within the period of its charter, the Bank of Upper Canada obtained a monopoly of banking within the province and hoped to keep it. With its control of the Legislative Council it could have thwarted all efforts to obtain new charters, but a financial crisis in 1821-2 made it necessary for the bank to apply to the legislature for a reduction in its capital and for other considerations.
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