The first known history of banking was the loan of grains made by the merchants of the old world, to traders and farmers who transported goods between cities. This can be traced back to around 2000 BC.
Banking, in the modern sense of the word, can be traced to medieval and early Renaissance Italy, to the rich cities in the north such as Florence, Venice and Genoa. The Bardi and Peruzzi families dominated banking in 14th century Florence, establishing branches in many other parts of Europe.
One of the earliest references to banks in the central area - Upper and Lower Canada, later the United Province, and now Ontario and Quebec - was in 1792, when some gentlemen of Montreal decided to establish a bank under the name of the Canada Banking Company. Only a private bank of deposit, however, resulted from this effort. In 1808, another attempt at establishing a bank was made in the city of Quebec, when a charter was asked from the legislature, but was not granted.
In 1817, Montreal bankers were granted a charter by the British government to open the first formal bank in Canada. The Bank of Montreal is generally regarded as the first bank of discount, deposit, and issue to be established in what is now the Dominion of Canada.
In Upper Canada the first bank charter was granted in 1819 to the Bank of Kingston, and the second in 1821 to the Bank of Upper Canada. The latter is of peculiar interest because one-quarter of the capital was subscribed by the government, and also because the bank was largely under the control of the Family Compact.
In 1841 the Bank of Montreal charter was amended, and a change was made in the form of the monthly return to the government. This return was greatly amplified and remained practically unchanged until Confederation. Another point in the amended charter limited the circulation of the bank to its paid-up capital. Even at this date the circulation of the banks was approximately half of their total debts to the public, while at the present time it is only about one-twentieth; this shows the importance of this banking function in the early period.
Banking, in the modern sense of the word, can be traced to medieval and early Renaissance Italy, to the rich cities in the north such as Florence, Venice and Genoa. The Bardi and Peruzzi families dominated banking in 14th century Florence, establishing branches in many other parts of Europe.
One of the earliest references to banks in the central area - Upper and Lower Canada, later the United Province, and now Ontario and Quebec - was in 1792, when some gentlemen of Montreal decided to establish a bank under the name of the Canada Banking Company. Only a private bank of deposit, however, resulted from this effort. In 1808, another attempt at establishing a bank was made in the city of Quebec, when a charter was asked from the legislature, but was not granted.
In 1817, Montreal bankers were granted a charter by the British government to open the first formal bank in Canada. The Bank of Montreal is generally regarded as the first bank of discount, deposit, and issue to be established in what is now the Dominion of Canada.
In Upper Canada the first bank charter was granted in 1819 to the Bank of Kingston, and the second in 1821 to the Bank of Upper Canada. The latter is of peculiar interest because one-quarter of the capital was subscribed by the government, and also because the bank was largely under the control of the Family Compact.
In 1841 the Bank of Montreal charter was amended, and a change was made in the form of the monthly return to the government. This return was greatly amplified and remained practically unchanged until Confederation. Another point in the amended charter limited the circulation of the bank to its paid-up capital. Even at this date the circulation of the banks was approximately half of their total debts to the public, while at the present time it is only about one-twentieth; this shows the importance of this banking function in the early period.
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