October 23, 1867

BANK OF MONTREAL SINKS RIVAL

More news on the collapse of the Commercial Bank:

Those knowledgeable of the discussions amongst the various bank executives regarding the Commercial Bank have revealed that the Bank of Montreal was the lone hold out, sinking the deal.

The position of Edwin King, general manager of the Bank of Montreal was such that having already advanced $300,000 to the Commercial a few weeks ago it was not in a position to make a second loan without a guarantee from the others. The other banks, willing to help out the Commercial could not agree to the Bank of Montreal having special terms and so the bailout has come to naught.

The Globe reports that the original $300,000 loan from the Bank of Montreal was arranged by the Government after an application for help had been made to it by the Commercial Bank. The Globe also suggests that the all banks had requested security for the additional loan. The negotiations fell apart, the Globe says when the Commercial offered Detroit and Milwaukee bonds as security.

The Globe is satisfied that the failure of the bank is owning solely to mismanagement and not any broader economic difficulties in the Dominion.

The Globe reports that in addition to the $1,800,000 loan to the Detroit and Milwaukee Railway that is the source of such the bulk of the bank’s troubles, there is $1,100,000 in loans reported lost that was lent to the old directors of the Bank, including some two or three hundred thousand dollars that was loaned to a single director who was insolvent at the time the loan was made. At least three directors are reported to be indebted to the bank and are unable to repay their loans.

The Globe further reports that the run on the bank began when the Home District Building Society withdrew $60,000 of the $180,000 it kept at the bank. This was followed by a demand from the Court of Chancery for additional security on the $200,000 it has deposited at the bank. The security was granted owing to the understanding that the Court would have withdrawn its savings without it. When word of these transactions leaked the result was several other depositors withdrawing large sums.

The run has been mimicked amongst bill holders.

The Lawson Brothers have placed a notice in the Hamilton Evening Times announcing their desire to purchase Commercial Bank bills “at the highest rates”. Such rates are reported to range from fifty to seventy-five cents on the dollar. In Toronto the notes are being purchased for between sixty-five and eighty cents per dollar.

MINISTERIAL MARRIAGE

Hon. Samuel Tilley (Customs) has married Alice Starr Chipman. This is Mr. Tilley’s second marriage. Mrs. Tilley is the daughter of Zachariah Chipman and Mary Eliza.

NOTES FROM NEW BRUNSWICK

The Speakership

The Fredricton (N.B.) Head Quarters has endorsed Bliss Botsford, Esq., for the position of Speaker in the Legislative Assembly of that province owing not only to his ability but as a show of unity to bury the political animosities of the fight over the question of Union. The paper hopes that the supporters of Union will see the wisdom of the recommendation rather than declaring Botsford illegible for his having previously argued against Confederation.

The Lieutenant-Governor

His Honour, the Honourable Colonel Francis Pym Harding was sworn in as Lieutenant-Governor on October 19 by Judge Allen in the Legislative Council Chamber at the Provincial Buildings. He was saluted with a military ceremony, the firing of a cannon, and a guard of honour from the 22nd Regiment.

His Honour is reported to have said that his term is likely to be very short but that he would try to make it a merry one.

CANADIAN MEDICAL ASSOCIATION

The medical convention held at Québec has concluded with the decision to form the Canadian Medical Association. Dr. Charles Tupper, the former premier of Nova Scotia, MP for Cumberland, and rumoured soon to be member of the Her Majesty’s Privy Council for Canada, has been elected as the Association’s first president.

ON MEMBERS OF PARLIAMENT

As the first sitting of the new Dominion Parliament approaches, The Globe exocriates members who do not put the public’s business ahead of their private business. Canadians may be willing to give MPs the benefit of the doubt but

They will hold to strict account any man who attempts “to serve two masters,” and shows that his public duties are considered by him as comparatively unimportant compared with his dollars, his pleasures, or his fees. These men are worse than traitors in the present momentous crisis of our national existence, and must be made to give way to others.