Volume 2 - ElectricCanadian.com

6 HISTORY OF THE BANKtain the usual reserves.There were other objections to thesystem, but the foregoing were sufficient to prevent its provinga success in a country where efforts were being made to increasethe supply of capital available for banking. When a changeof government took place in 11854, the Hon. William Cayley,who succeeded Francis Hincks 2 as inspector-general favoureda return to the older system, and the existing free banksspeedily obtained charters. Thus the free banking systemwent out of existence, although the Act itself was not formallyrepealed as a whole until the 3passing of the Bank Act of 1880.Mr. Merritt maintained that his plan had never had a fairtrial and that it was "the best system adopted in any countryin mi the beginning of the world to the present time." Somewhatlater he was able to boast of a distinguished convert inMr. E. H. King, president and general manager of the Bankof Montreal, 4 and in the controversies that took place afterConfederation, when the best minds in this country wereapplied to securing a permanent and efficient banking law, thefree system was frequently canvassed.The "fifties" in the Canadas were an era of railwayconstruction. The six years, 1852 to 1858 inclusive, witnessedthe construction of 1563 miles of new track, whereas in 1849the total mileage had been about fifty. The construction of1William Cayley (1807-90) was called to the bar at Lincoln's Inn in 1834 and tothe Ontario bar in 1838.He entered public life in August, 1845, becoming Inspector-General (as the Minister of Finance was then called) of the province of Canada inthe Draper administration. He held this office until 1848 and again from 1854 to1858. As such, in 1857, he introduced a bill to discontinue the "free banking" systemfavoured by William Hamilton Merritt, but the bill failed to become law. Subsequentlybe was for some years Registrar of the Surrogate Court of the County of York.See page 85.The sections granting note issuing powers were repealed by the Dominion \ot-Act of 1806 (49-30 Viet. c. x).'Adam Shortt, Canada and Its Province, 1914, X, 627. Edwin H. King (1828-96)came to Canada from Ireland and entered the service of the Bank of British NorthAmerica. He resigned in 1857 to become inspector of the Bank of Montreal, ofwhich institution he became general manager in 1863 and president in 1869, retiringin 1878 and passing the remainder of his life in England. He was one of the ablestand most forceful bankers of his day.