Volume 2 - ElectricCanadian.com

14 HISTORY OF THE BANKUpper Canada's place, to take rank among the leading banksof the Dominion." 1Looking back after many years, now thatthe passing of time has effaced the sense of the heavy financialloss which the failure of the Bank of Upper Canada broughtto so many in the province, it is comparatively easy to see thebeneficial side, but at the time this was not evident. One ofthe first results was to focus public attention on the difficultiesin which its old rival and most important competitor, theCommercial Bank of Canada, found itself. As the head officeof this bank was in Kingston, which no longer held theimportant place in the commercial life of the province whichit had formerly occupied, the bank was perhaps not quite soclosely in touch as the Bank of Upper Canada with the developmentstaking place at the capital of the province. Partly onthis account it had not lost so heavily in the land speculationof the "fifties," but it had become involved in the rivalry andspeculative expansion of the railways, which was one of theresults of the era of feverish railway construction. Litigationensued with the Great Western Railway Company over verylarge advances made to the Detroit and Milwaukee RailroadCompany, control of which had been obtained by the formercompany. The revelations which were the result of thislitigation disturbed public confidence in the bank, and thisultimately led to its downfall.The position in which the two leading banks of UpperCanada thus found themselves left the Bank of Montrealparamount in the field of Canadian banking. Its positionwas further strengthened by the passing of the ProvincialNote Act of 1866. The Government of the province, of whichthe Hon. Alexander T. Gait 2 was then the Finance Minister,was seriously embarrassed by its inability to withdraw thegovernment moneys in the Bank of Upper Canada, owing to^reckenridge, The Canadian Banking System, p. 177.'Sir Alexander Tilloch Gait, G.C.M.G. (1817-93), as he became in later life,was the youngest son of John Gait, the friend and biographer of Lord Byron, and thefounder of the domestic school of Scottish literature. John Gait, so far as Canada