Farmer's Joint Stock Bank

The Farmer's Joint Stock Bank was a bank that operated in Upper Canada, and later in the Province of Canada, from 1834 to 1854.

Farmer's Joint Stock Bank
TypeJoint stock company
IndustryBanking
FateClosed
Founded1835 in Toronto, Upper Canada
FoundersGeorge Truscott
John Cleveland Green
Defunct1854
Key people
1st President: Sir Francis Hincks

History

Following the 1821 legalization of small notes and bills of exchange in Upper Canada,[1][2] the Bank was formed in 1834 as a private bank by George Truscott and John Cleveland Green in Toronto, Upper Canada.[3] Francis Hincks, a journalist and colonial administrator, was invited to become its first cashier.[lower-alpha 1] In 1835, it was taken over by a group of Reformers[lower-alpha 2] and constituted as a joint-stock company called the Farmers' Joint Stock Banking Company by deed of settlement.[3] The first board of directors appointed John Elmsley, a member of the Family Compact,[lower-alpha 3] to be its first president, which forced Hincks and other Reform investors to leave and found the Bank of the People in December 1835.[lower-alpha 4] When Upper Canada moved in 1837 to restrict the ability of institutions other than incorporated banks to issue their own banknotes, the Bank was exempted.[7]

A financial crisis that affected Upper Canada in 1837 resulted in a suspension of the Bank's activities for two months at the end of that year.[8] In 1838, it was barred from issuing banknotes that were not payable on demand.[9]

Economic conditions, together with poor management and political intrigue, led to a move by the board to wind up the Bank in January 1844,[10] which was not completed until December 1848 with its sale to new owners.[10] William Brown Phipps, who had been Manager since 1841, returned to become Manager of the revived Bank in March 1849.[10] In June 1849, it flooded Toronto and Buffalo with new issues of its banknotes, which were subsequently boycotted by merchants.[11] It was finally closed in 1854.[11]

Sources
  • "Deed of Settlement of the Farmers' Joint Stock Banking Company" (PDF). torontopubliclibrary.ca. 1835.
  • Breckenridge, Roeliff Morton (1895). "The Canadian Banking System, 1817-1890". Publications of the American Economic Association. American Economic Association. 10 (1): 13–476. JSTOR 2560443.CS1 maint: ref=harv (link)
  • Ryan, Christopher D. (2004). "William Brown Phipps, Private Banker" (PDF). Canadian Revenue Newsletter. Canadian Revenue Study Group, British North America Philatelic Society (44): 2–3, 6. ISSN 1488-5255.CS1 maint: ref=harv (link)

Notes
  1. In essence, its first general manager.[4]
  2. Truscott and Green, the original founders, had also started the undercapitalized Agricultural Bank[5]
  3. son of John Elmsley (1762-1805), and also a director of the Bank of Upper Canada until 1834[6]
  4. later becoming part of the Bank of Montreal

References
  1. An Act to rendere legal certain small Notes and inland Bills of Exchange within this Province, S.U.C. 1821, c. 12
  2. Breckenridge 1895, pp. 73-74.
  3. Breckenridge 1895, p. 74.
  4. Ormsby 1982.
  5. In collaboration 1985.
  6. Pilon 1976.
  7. An Act to protect the public against injury from private Banks, S.U.C. 1837, c. 13, s. 4
  8. Breckenridge 1895, p. 92.
  9. An Act to repeal part of an Act passed in the seventh year of His late Majesty's reign, intituled, 'An Act to protect the public against injury from private Banks,' and for other purposes therein mentioned, S.U.C. 1838, c. 23, s. 3
  10. Ryan 2004, p. 2.
  11. Ryan 2004, p. 3.
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