Volume 2 - ElectricCanadian.com

THE CHARTER 3The revolutionary outbreaks of 1848 on the continent ofEurope, following a period of over-speculation, led to an almostcomplete paralysis of trade in Europe. This soon spread toNorth America and the closing years of the decade witnessedone of the most severe commercial crises of the century.The repeal of the corn laws in Great Britain in 1846, and theconsequent abolition of the preference hitherto granted toCanadian wheat and flour, had at the same time dislocatedthe accustomed channels of Canadian trade, and increasedthe adverse effect on this country of the international crisis.Up to this time the trade of Canada had consisted in very largemeasure of the export, via the ports of the St. Lawrence, Quebecand Montreal, of her chief natural products, wheat and timberthe wheat being principally the product of the farms ofUpper Canada. She was now thrown back more upon herself,and the increase of population and the springing up of newtowns and villages already referred to led to the development ofa number of small local manufacturing industries supplying thehome markets. There were at this period several banks inthe country of considerable size and importance, chief amongwhich were the Bank of Montreal, the ill-fated Bank of UpperCanada and the unfortunate Commercial Bank. All of themincurred heavy losses during the crisis, particularly throughthe accounts of those of their customers who had been engagedin trading with Great Britain. These losses not only restrictedthe supply of available funds, but tended to make the bankingpolicy one of unusual caution for the time being. Com-became common, and anplaints of lack of banking facilitiesagitation sprang up for an increase of banking capital, regardlessof the fact that the existing banks had for years beenengaged in fruitless efforts to increase their capital.to foster and build up the newly-established localIn orderindustriesthere was also a demand for the extension of banking facilitiesto the smaller communities, and especially for the establishmentof small local banks in the towns and villages throughoutthe country. Under these circumstances it was only natural