By Gregory DL Morris

Canada is thought of as a very old country , the land of First Nations and fur-clad trappers . It is also thought of as a young country , confederated as a nation only in 1867 and then only as an expedient to prevent annexation by the expansive juggernaut to the south . But in terms of financial history , Canada is contemporaneous with the United States .

In some aspects the Canadian banking and financial regulatory system has proven to be superior to that of the United States ; Canada had no real estate crisis and no near-meltdown in 2009 – 10 despite the

Façade of the Bank of Montreal . fact that there is no mandatory separation between banking and brokerage . There are several reasons for the relative stability , but a major one is significantly higher reserve requirements ( see “ How Canadian Banks Avoided the Recent Financial Crisis ,” Issue 106 , Spring 2013 , p . 13 ).

Canadian bank stocks have long been considered safe investments paying high dividends . That contrasts sharply to the outlook for shares of most US banks . Among those Canadian stalwarts , the first among equals is the Bank of Montreal , which celebrates its bicentennial this year .

BMO (“ BEE-moe ”), as it is universally known , was formed in 1817 with capital stock worth 250,000 pounds sterling under “ articles of association ” by nine men who represented a cross section of business and finance in the early 19th century . Five had been born in Scotland , two in the United States , one in England and one was of French extraction . The global entity they founded prospered and later included other notable names : Harris Bank , the white-shoe operation of Chicago ; investment firm Nesbitt Burns ; and the Milwaukee institution of Marshall & Ilsley .

BMO was an international operation from the start , as clearly illustrated in A Vision Greater Than Themselves : The Making of the Bank of Montreal 1817 – 2017 , by Laurence B . Mussio ( McGill-Queen ’ s University Press ), the bank ’ s lavishlyillustrated official bicentennial book . Less than a year after the charter , a shipment of 130,000 Spanish silver dollars in 65 kegs weighing 100 pounds each was sent to merchants in Boston who needed the hard currency to pay for imports from Asia .

28 FINANCIAL HISTORY | Winter 2017 | www . MoAF . org