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