BRITISH COLUMBIA W!» 

Fraser, later the manager of the bank's branch at Rossland and now
(1913) manager of the branch in Victoria. 

Fully alive to the local conditions the Bank of Montreal has con-
sistently followed a policy of expansion — locating its branches in
every section of the province, and meeting in every instance all legiti-
mate requirements of the trade and manufacturing interests. 

In 1897, ^^^ years after it opened for business in the province the
Bank of Montreal had seven branches in operation: Vancouver, man-
ager, Campbell Sweeny; Victoria, manager, A. J. C. Galletly;
New Westminster, manager, George D. Brymner; Rossland, man-
ager, J. S. C. Fraser; Nelson, manager, A. H. Buchanan; Vernon,
manager, G. A. Henderson; New Denver, manager, J. F. Finucane.
It maintains some twenty-six branches in British Columbia. Its
pioneer representative, Mr. Campbell Sweeny, now occupies the of-
fice of superintendent of the British Columbia branches. 

Following upon the footsteps of the Bank of Montreal other
eastern banks opened branches in British Columbia. Amongst the
earliest were the Canadian Bank of Commerce (which, later, ab-
sorbed the Bank of British Columbia, as already mentioned), the
Imperial Bank of Canada, the Merchant's Bank of Halifax (which,
in January, 1901, changed its name to that of the Royal Bank of
Canada), and the Molson's Bank. These institutions together with
the Bank of Montreal, the Bank of British Columbia and the Bank
of British North America established in 1898 the Vancouver Clear-
ing House. The clearings for 1899 were $37,820,218. 

In 1902 the banks operating in the province were: The Bank of
Montreal, eight branches; the Molson's Bank, three branches; the
Bank of British North America, seveii branches; the Imperial [?ank
of Canada, five branches; the Bank of Toronto, one branch; the
Canadian Bank of Commerce, twelve branches; the Kastern Town-
shirs Bank, two branches; the Bank of Hamilton, one branch; and
the Royal Bank of Canada, seven branches — a total of nine banks
with fortv-six branches. In every case these banks had an ofHce in
the city of Vancouver. 

In 1906 the returns from the Vancouver Clearing House exceeded
$100,000,000. In 1911 thev had grown to the enormous sum of 

One by one the other banking houses of eastern Canada became
persuaded that the held offered by British Columbia could no longer 

650 BRITISH COLUMBIA 

be neglected, until now (1913) besides those mentioned the follow-
ing banks have branches in this province: The Bank of Nova Scotia,
the Quebec Bank, the Northern-Crown Bank, the Merchants' Bank
of Canada, the Bank of Ottawa, the Traders' Bank of Canada, the
Home Bank of Canada, the Union Bank of Canada, the Dominion
Bank, and the Eastern Townships Bank until its absorption by the
Royal Bank of Canada. 

A clearing house was established in New Westminster — where
nine banks had established branches — in 191 2. 

In 1910 the first bank having its head office in the province was
incorporated. This was the Bank of Vancouver, which opened for
business in July of that year. It has an authorized capital of
$2,000,000, of which $1,169,900 has been subscribed and $830,000 paid
up. The first general manager was A. L. Dewar, who was succeeded
by L. W. Shatford. The present board of directors include the Hon.
T. W. Paterson, Lieutenant-Governor J. A. Mitchell, J. A. Harvey,
K. C, E. H. Heaps, C. S. Douglas, M. B. Carlin and A. Istel. Mr.
R. P. McLennan is the president, a position which he has occupied
from the inception of the bank. 

Already the Bank of Vancouver has twelve branches, of which
four are in its natal city. The other offices are located in Vic-
toria (two branches). New Westminster, Collingwood East, Cedar
Cottage, Coquitlam, Hazelton, and Fort George. Our history,
however, and our banking system would lead one to regard as prob-
lematical the continued expansion of a local bank when in competi-
tion with other institutions having branches over all of Canada. 

APPENDIX CONTAINING PROOFS AND ILLUSTRATIONS 

1. Memorial of lieutenant John Meares respecting seizure of vessels by the Spaniards at
Nootka Sound, in 1789. 

2. Memorial of the Court of Spain, respecting the Nootka Affair, June 13, 1790. 

3. Declaration and Counter Declaration, Nootka Sound Affair, July 24, 1790.
+. The Nootka Sound Convention, October 28, 1790. 

5. Nootka Claims Convention, February 12, 1793. 

6. Convention for the Mutual Abandonment of Nootka, January 11, 1794. 

7. Third Article, Convention of October 20, 1818, between (ireat Britain and the United
States. 

8. Fifth Article, Convention of October 20, 1818, between Great Britain and the United
States. 

9. Hudson's Bay and North-West Companies' License of Exclusive Trade, 1821. 

10. Convention of 1827 continuing in force Article III, Treaty of i8i8. 

11. Hudson's Bay Company's License of Exclusive Trade, 1838. 

12. Treaty establishing boundary west of the Rocky Mountains, June 15, 1846. 

13. Royal Grant of Vancouver Island to Hudson's Bay Company, January 13, 1849. 

14. An Act to provide for the administration of Justice in Vancouver Island, 1849. 

646 BRITISH COLUMBIA 

money without loss, a sort of unreasoning faith grew up, in paper
money of any kind — men, as a whole, are undiscriminating — which
received a bad blow when Macdonald's Bank failed in the follow-
ing year. 

In September, 1862, a branch of the Bank of British Columbia
was opened in New Westminster, which was then the capital of the
separate colony of British Columbia. Edwin Russell was the first
agent in charge. Of course, the mining region of Cariboo could
not be overlooked, especially as Macdonald was operating at that
point, and in May, 1863, the Bank of British Columbia established
a branch on Williams Creek (Richfield at first, but later Barker-
ville) with H. Shirley Blunt as manager and R. Fraser as clerk. Mr.
Walker retired from the management of the Victoria office in July,
1864, and removed to San Francisco. The New Westminster branch
of this bank had in the beginning a rather checkered career. It was
opened, as already stated, in September, 1862, and was closed in the
following November. During that period its rate of discount on gold
bars was being gradually raised until it reached three per cent, and
then, naturally, the buying soon ceased altogether. The branch
was scarcely closed before its re-opening began to be spoken of as
a possibility. It was actually re-opened on July 22, 1863. D. M.
Lang was the manager, after the departure of James D. Walker.
With the advent of "hard times'' in 1865-6 this branch was again
closed. In August, 1865, the Bank of British Columbia had branches
in operation at New Westminster, Yale, Quesnel Mouth, Cariboo,
Victoria, and Nanaimo. One by one they were closed, until, of
them all, only Victoria and Cariboo remained. 

The Bank of British Columbia had, in 1868, branches at Vic-
toria, Cariboo, San Francisco, and Portland. Its capital had then
been increased to $2,500,000. The officers in the Victoria office were :
inspector, Alex. Watson; manager, William C. Ward; accountant,
C. S. Jones; clerks, E. H. Jackson and Isaac Birch Fisher; in Cari-
boo: agent, H. S. Blunt; clerk, R. Fraser. In 1872 Isaac B. Fisher
became manager of the Cariboo branch. From that date until 1876
— being the palmy days of Lightning Creek — Mr. Fisher remained
in charge. Soon after his removal the branch was closed, for Cariboo
had ceased to produce gold in large quantities. As if to equalize
conditions the branch at New Westminster, which had been closed
for ten years was reopened in 1878 with Mr. Fisher as manager. The 

Copyrigtn, Canada, 1 » 1 2. by R. UruadbrUlei-. 

HASTINGS STREET WEST FROM CAMBIE STREET, VANCOUVER 

GRANVILLE STKEKP, Mkikinc XdUTII I'liOM 1)1 \s.\II II! STREET. VANCOUVER 

1 

NORTir VANCOUVER FRd.M IKKKY WHARF 

VIRW OF VAXrOT'VER HARBOTTR AND SHIPPING 

BRITISH COLUMBIA 647 

bank was very slow to open new branches. In 1882, besides the Port-
land and San Francisco offices, it had only those in Victoria and
New Westminster. The Victoria officials, in 1884, were: W. C. ^^'ard,
manager; Charles S. Jones, assistant manager; George Gillespie,
accountant; J. K. Wilson, teller; Robert Croft, receiving teller; H.
Rhodes, George Cruickshank, J. S. Milligan, R. G. Harvey, and H.
Beaven, clerks. Eighteen years later the bank had offices in
Victoria, Vancouver, New Westminster, Nanaimo, Kamloops,
Nelson, Sandon, and Rossland. Its capital had been increased to
£600,000, and it had a reserve of £100,000. During these years
JNIr. William C. Ward, one of the most successful bankers in the
province, was the general manager. 

The Bank of British Columbia ceased to exist in January, 1901.
Its shareholders had in the preceding December passed a resolu-
tion whereby it had been resolved to sell the whole assets of the bank
to the Canadian Bank of Commerce, for $2,000,000 payable in the
latter's stock. The value placed thereupon was $2,600,000; so that the
shareholders of the Bank of British Columbia obtained stock in
the purchasing bank at 1 30. The officers were provided for, as, fortu-
nately, the two banks had but rarely branches in the same places.
In order to place these persons on the same footing as their old em-
ployees the sum of about $100,000 was added to the bank's pension
fund. 

The Bank of British North America was the first chartered bank
to enter into business on V\incouvcr Island. Established in 1836,
with branches in the principal cities of the Canadas and the Mari-
time Provinces, and having a capital of £1,000,000, it was in a posi-
tion to meet the demand for banking facilities which went up from
the people as soon as gold began to flow from the working of the
Eraser's bars. In t8(;9 a branch was established on Yates street, Vic-
toria. This was somewhat in the nature of an experiment. The bank
does not appear to have entered keenly into the purchasing of gold
dust. It was content, at least in the early years, to leave that to the
express companies and Macdonald's Bank. The other lines of bank-
ing business were more attractive to it. It was the bank for the city of
Victoria and for the government of the colony of Vancouver Island.
So slowly did its business grow that in the spring of 1862, the man-
ager, J. G. Shepherd, reduced the small stafif of officials to even
smaller proportions. 

648 BRITISH COLUMBIA 

But when both Macdonald's Bank and the Bank of British
Columbia reached out into Cariboo, this bank followed the same
policy and for some years, while Cariboo was producing millions
annually, a branch of the Bank of British North America, which
was opened in August, 1865, existed on Williams Cresk. In 1867
Robert Burrell was the agent in charge; the clerk was George Grant.
At this period the bank entered largely into the purchasing of gold
dust and for that purpose opened a fully equipped assay office in
Victoria. 

In 1877 the Bank of British North America had but one oflice in
the province — viz., at Victoria. Its stafif consisted of John Goodfel-
low, manager; A. B. Ritchie, accountant; A. Maxwell, teller; M. G.
Staples, assayer; Alex. Munro, Jr., clerk; and John Hart, messenger.
Seven years later it had still only the Victoria office, with the fol-
lowing stafif: R. Burns, manager; G. H. Burns, accountant; Alex.
K. Munro, teller; H. M. Innes and D. Doig, clerks. No in-
crease was made in its offices until the city of Vancouver came
into existence, when Mr. W. Godfrey opened on its behalf a branch
there, which has been one of the most successful in the province. The
growth of the Kootenay mining region caused the Bank of British
North America to break away from its centralizing policy and in
1897 it had no fewer than five offices there, viz., at Rossland, Sandon,
Kaslo, Trail, and Slocan City. 

Until the completion of the Canadian Pacific Railway the Bank
of British North America, the Bank of British Columbia, and '
the private bank of Garesche, Green & Co. were in possession of the
whole field of banking in the province. But with that event and the
location of the terminus at Vancouver the banks of eastern Canada
awoke to the possibilities which the province offered for their opera-
tions. The first of these eastern institutions to cross the Rockies was
the Bank of Montreal, the oldest bank in all Canada. 

In 1887, while Vancouver was yet in her swaddling clothes, Mr.
Campbell Sweeny arrived with a stafif of three assistants to open
in the Terminal city a branch of the Bank of Montreal. 'I'odav the
stafif of the principal office in Vancouver numbers forty-three. The
bank at once extended its operations. In 1888 a branch was opened
at New Westminster under the able management of Mr. George D.
Brymner. Accompanying him as his assistant was Mr. J. S. C. 

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CHAPTER XXI 

' 

BANKS AND BANKING 

Until 1910 there did not exist within the limits of the province
of British Columbia a chartered bank having its head office therein;
hence the story of banking in this province is largely the development
of the eastern banks. 

The first rude attempts at carrying on a banking business were
made by the express companies, which early extended their opera-
tions within our borders. The miners who foregathered upon the
banks of the Fraser river in the first wild rush of 1858 came from
California; and soon in their train and from the same place came
branches of Wells, Fargo & Co.'s express and Freeman's express.
Their connection with California and the eastern United States
afiforded ready facilities for the safe transport of gold dust. These
companies, especially the former, were also large purchasers of dust;
in fact, during 1858 and 1859 the greater part of the product reached
the outer world through this medium. Wells, Fargo & Co. exported
in 1858 $337, 76^; in 18159, $823,488. The total gf)ld output handled
by this company up to the end of 1862 was $5,373,21 1. This was tlie
only phase of banking which the express companies engaged in for
a considerable period, inasmuch as it could scarcely be expected that
in colonies so recently established and in such variable conditions as
existed at the time advances to merchants and traders could assume
any importance. Monevs were received on deposit and for trans-
inission, but no attempt was made to issue money. The express com-
panies always paid in the recognized currency or in drafts upon
their branches. 

Wells, Fargo & Co. continued to carry on business as bankers
and express agents in the colonies of Vancouver Island and British
Columbia; but thev soon allowed the business on the mainland to
pass into the hands of Dietz & Nelson and Barnard's express (which 

(i4:{ 

644 BRITISH COLUMBIA 

will be dealt with in another place), and concentrated their efforts
in Victoria. During the early '60s, C. C. Prendergast was their
representative, but about 1866 F. Garesche became the Victoria
agent. Later this gentleman associated with himself, A. A. Green,
under the firm name of Garesche, Green & Co. This firm became
the agents of Wells, Fargo and ultimately took over the business.
The senior partner was lost on the Pacific in November, 1875. No
business house was better known in Victoria than that of Garesche,
Green & Co., which was located at the corner of Government street
and Trounce alley. Mr. Green died in 1891. In its later days the
business was carried on under the name of Green, Worlock & Co.
About 1894 the bank went into liquidation. The Hon. Robert Bea-
ven and Mr. James S. Yates were appointed as trustees to settle its
affairs. In the end the depositors received about fifty cents on the
dollar. • 

The first institution to undertake banking in all its branches was
Macdonald's Bank, which was founded by Alexander D. Macdonald
in Victoria in 1859. This bank, which had its office on Yates street,
has the honour of being the first to issue paper money in British
Columbia and Vancouver Island. These notes were issued without
restriction of any kind and were absolutely unsecured. The bank had
no charter and for some time was subject to no rules or supervision.
In 1863 a branch was opened in Cariboo, and for about a year it did
a large amount of business. Its export of gold up to the end of 1862
was $1,543,035. In 1864 the bank was robbed and although Mac-
donald made a gigantic effort to overcome the loss he was unsuc-
cessful and the bank — the first bank in either colony — failed. The
details of this story will be found in a subsequent chapter. None of
the holders of Macdonald's notes received any payment after the
failure. They were simply unsecured creditors. 

In 1862 an attempt was made to establish a local chartered bank
to be known as the Colonial Bank of British Columbia. The prime
movers in the scheme were Henry Holbrook, F. G. Claudet, and John
Cooper. The capital proposed was $250,000 divided into 2,500
shares of $100 each. The movement did not even reach to the extent
of obtaining a charter. 

Although the bank known as the Bank of British Columbia had
its head ofl^ce in London, England, yet owing to its name, if for
no other reason, a short outline of its growth and development will
be given. 

VIEW OF VA^•COL■\•L:K CITY COIXCIL, MEETIXG AFTER THE FIKE. 13T1I JUNE. 1S86 

J. W. HORKE'S REAL ESTATE OFFICE, AFTER THE VANXOm^ER FIRE 

BRITISH COLUMBIA 645 

The Bank of British Columbia which was for a time known as
the Chartered Bank of British Columbia and Vancouver's Island,
was formed in May, 1862. Its capital was originally £250,000
divided into 12,500 shares of £20 each. The prospectus after re-
ferring to the great necessity for additional banking facilities in
these colonies and to the discovery of the wealth of Cariboo (which
it described as a field of vast extent in which the gold lay near the
surface) stated that the yield for 1861 was estimated at $6,791,409 —
figures which arc now recognized as being about three times the
actual production. It then mentioned the discovery of silver, cop-
per, and coal, the abounding wealth of the fisheries, the salubrity of
the climate, the possibilities of agricultural development, and the
rigid enforcement of English law which would insure the safety
of the fortune that the earlier-mentioned factors would provide. As
a further inducement to investors a list was subjoined of colonial
banks operating under less attractive conditions, principally in
Australia and the Orient, whose dividend rate varied from six to
si.xteen per cent. 

The Bank of British Columbia was opened for business on Gov-
ernment street in Victoria in August, 1862. James D. Walker u as
its first manager, and George Cruickshank, its first accountant. It
carried on business for nearly six months before it issued any paper
money. In January, 1863, the first notes of this bank, which were of
the denomination of five dollars, were received from England and
at once placed in circulation. Thev were printed on good paper and
were rather larger than those in circulation in Canada and the I'nited
States. They bore in one corner the bust of Queen Victoria, and in
the other the figures "$5.00." On one end was the representation of
a miner at work, on the other, a ship. At the top was Britannia
bearing the national flag, beneath an arch formed by the words
"The Bank of British Columbia." The Centre or body was written
minutely over with the words "Five dollars." Tliey were dated
January 6, 1863, and bore the signature of James D. Walker. 

Up to that date the only paper monev in circulation, except, of
course, foreign monev, had been Macdonald's Bank bills. These
had not been very favourably looked upon by the public. But when
the Bank of British Colinnbia issued these bills and, later, others
of different denominations they worked their wav into circulation
and as the miners became accustomed to seeing and handling paper