The development of railways in Canada and the growth of financial facilities, through the improvement of currency, and the expansion of Banks, made possible and inevitable, the breakdown of the isolation of pioneer days, and the growth of nation-wide and eventually world-wide trade and connections. Farming ceased to be carried on wholly for use and became specialized. In manufacturing and trade, we note the gradual concentration in large towns and cities, taking the production of the country’s needs out of the hands of the primitive Village Manufacturer, shifting from the self-contained life of the back woods clearing to production for nation-wide exchange, the linking up of the country by railways and Banks into a single market, and the specialization of all industry.
The evolution of Canadian Banking began before Confederation. The first half century of Canadian Banking might be called the period of Provincial Banking, as the only Legislative authority exercised over Banking was that of the Legislatures of the individual Provinces. The only unifying institution was the British Government.
From 1841 to 1867 in Upper and Lower Canada there was legislative unity and as a result, unification of Banking Legislation was accomplished, during that period. The federation of the scattered Provinces in 1867 resulted in a series of general Banking Acts and the unification of Banking regulations throughout the Dominion.
Owing to the nature of the Physical and Georgraphical conditions of the settlements in Upper Canada, the means of communication being very imperfect, they had little or no choice as to the places in which they might purchase supplies or dispose of their products. Even though there had been an abundance of circulating medium, their trade would still have been essentially one of barter; an exchange of their surplus products with the nearest merchant, for a limited range of goods. Many functions were united in one person in those days; all kinds of goods were supplied by one merchant and all kinds of surplus products were purchased and exported by the same merchant. Where mills were erected the leading merchants commonly owned them. The system of barter is as old as the race. All primitive races have adopted this means of supplying their needs. Various articles have been used as a medium of exchange, something commonly and generally in demand such as ivory, skins of animals, ornaments, etc. Since the depreciation of the German mark, many places in Germany have reverted to the early form of barter. School tuitions are fixed in rye. Physicians are asking patients to pay their fees in produce at pre war cost.
In the early days of Upper Canada the local merchants dealt largely with the importers at Kingston and Queenston. These wholesale merchants acted as Bankers as well, and dealt in exchange, took deposits and allowed their customers to issue orders on them. Later the most pressing currency needs were supplied by the issue of what were known as army bills which circulated freely throughout the country. Halifax Currency was made the legal standard, but York Currency was used by Montreal and Upper Canada merchants in trade. The original York shilling was the Mexican Real, but in later times it became known as the British sixpence. As the demand for the decimal system became stronger, it finally became the standard in Canada.
The Canadian Banking system which later was introduced, was founded on the system introduced by Alexander Hamilton, the First Secretary of the Treasury under the present constitution of the United States.
What was true of most rural communities we find was the conditions prevailing in Smithville in these early days, Halifax Currency, barter, restricted trade, few channels for exchange of produce, a limited currency and no banking facilities. I recall the time as a lad when any large financial transaction necessitated a journey to Hamilton or St. Catharines. Banks were invited to come in and give even a one-day a week service, but to no avail until June 22nd, 1905, when Mr. Joseph Anderson, an organizer of Branch Banks for the Union Bank of Canada, a Quebec institution, chartered in 1865 at Quebec City, came unsolicitea into Smithville and opened a Branch of that Institution in the Murgatroyd Block, where Mr. J. A. Schnicks’ tailor shop used to be. Mr. Anderson became the first Manager of Smithville’s first chartered Bank. He is now an Inspector of that Institution, with headquarters at Toronto. Mr. J. M. Thomson of Hastings, Ontario, was the first Teller and Mr. Wesley B. Brant, son of John B. Brant of Smithville, was the first Junior Clerk. In February of the following year the writer entered the service of the same institution, his first day’s work being to assist in the removal to the new building, which is now the home of the Union Bank of Canada in Smithville. The next Manager was Mr. J. Gordon Moffat of Norwood, who was followed by Mr. C. Brooke Mars-land. Mr. Marsland’s successor was Mr. H. G. Parrott, the present Manager.
Previous to this time the firm of R. Murgatroyd and Sons, Private Bankers, did considerable discounting and exchange business, the latter being turned over to the Union Bank of Canada upon their entering the field. This firm of Private Bankers is still doing business in Smithville and is composed of Messrs. Ellis and Robert Murgatroyd, both well-schooled in business and commercial law, and both of them have had a wide business experience in the mercantile business of R. Murgatroyd and Sons.
The Royal Bank of Canada one of Canada’s largest Banks, established a Branch in Smithville in the Spring of 1920, being the second Chartered Bank to enter the field. These three Banking institutions give Smithville and the surrounding country excellent banking accommodation. Mr. A. A. Hutchison is the Manager of the Royal Bank of Canada at the present time. No longer do the citizens drive for miles in order to transact business. All their financial operations may be completed satisfactorily in their own village, no matter what part of the civilized world the business may originate from. Smithville is proud of her financial institutions and of the office appointments, which have been provided, insuring comfort and security to the Banks’ numerous patrons.