In the early Eighties the Merchants, like other Canadian Banks, had to face the collapse of the Western land excitement and the depression which lasted in that region until the completion of the C. P. R. and incoming immigration changed conditions for the better. In 1886 (June 16) Mr. Hague was able to report a considerable increase in deposits not bearing interest and additions to the Rest in the 6 years of nearly $1,000,000. He urged the formation of a Canadian Bankers' Association and regretted the appearance of a real estate inflation in Toronto. Messrs. W. Darling and A. Masson died during this year and were replaced on the Board by H. Montague Allan and J. P. Dawes. In 1887 the Directors' Report stated that Mr. Hague's services had been re-engaged for a term of years. In the succeeding year Mr. Abbott retired from the Board and was succeeded by T. H. Dunn.

In 1892 Mr. Duncan died and was succeeded as Director by Sir Joseph Hickson while the capital stock was increased to the even sum of $6,000,000 by the issue of $200,000 of new stock at 145, $90,000 going to the Reserve Fund; this latter sum being the only addition to that Fund ever made from such source up to Nov. 30th, 1911. In 1894 the Rest was raised to within 50 per cent. of the Capital and stood at $3,000,000 and the dividend was increased to an 8 per cent. basis, at which it remained for three years more; in 1896 Thomas Long of Toronto was appointed to the Board in place of the late Sir Joseph Hickson; in this year also it was announced that the Directors, at the request of Mr. Hague, had decided to make provision for the future by appointing Thomas Fyshe, for many years the successful Cashier of the Bank of Nova Scotia, as Joint General Manager. This would seem, therefore, to be a suitable time to indicate the general management of the institution under Mr. Hague's 20 years of sole management:

5,499,353

1880.

5,520,000

Deposits. Circulation. Loans.
$9,033,153
$475,000 5,590,129
475,000 6,105,042
475,000

Assets.

$2,070,654

$13,343,179

$18,506,808

1,994,977

11,498,485

14,988,626

1,744,123

11,095,453

14,423,538

1881.

5,611,603

525,000

1882.

1883.

1884.

1885.

1886.

1887.

7,296,151 2,127,695 8,169,256 2,835,519 5,698,696 750,000 10,786,497 3,942,049 16,516,002 21,883,406 5,714,506 1,150,000 9,016,928 3,625,739 16,585,128 5,721,726 1,250,000 8,416,194 3,092,377 16,198,809 5,724,976 1,375,000 8,574,495 2,896,074 16,344,029 5,799,200 1,500,000 9,591,685 2,869,308 5,799,200 1,700,000 8,736,812

10,822,573

15,781,563

9,942,740

1890.

1891.

1892. 1893.

5,799,200 2,335,000 5,799,200 2,510,000 5,799,200 2,635,000 10,644,276 6,000,000 2,900,000 10,941,867 1894. 6,000,000 3,000,000 10,376,198 1895. 6,000,000 3,000,000 11,019,131 1896. 6,000,000 3,000,000 11,361,794 1897... 6,000,000 3,000,000 12,069,345

9,309,723

10,054,094

Mr. Fyshe now assumed a large responsibility and with 1898 began a new period of new period of progress. Western conditions were marked in 1897-8 by the opening of Branches at Portage la Prairie, Neepawa and Souris in Manitoba and at Medicine Hat and Edmonton in the Territories. In January, 1899, Mr. Fyshe assumed the sole active management, Mr. Hague practically retiring. A number of new Branches were opened and a Pension Fund organized by Mr. Fyshe for the officials of the Bank with a yearly contribution of $15,000; in 1901 and 1902 Andrew Allan and Hector McKenzie (Vice-President since 1896), who had been devoted and long-continued friends of the Bank, died. C. F. Smith and Hugh A. Allan were appointed to the Board while H. Montagu Allan was elected President of the institution and John Cassils Vice-President. Mr. Cassils died shortly afterwards and was succeeded by Jonathan Hodgson in 1903. Mr. Fyshe held the General-Management until 1905 when he retired and was succeeded by Mr. E. F. Hebden, Superintendent of Branches and Chief Inspector, who had been with the Bank for 33 years. During the régime of Mr. Fyshe, who had been practically in control for the seven years, the business of the institution had grown to large proportions and the Branches from 35 in number to 94. The Rest, which had to be reduced in 1898 by $400,000, grew again by $800,000, the deposits literally leaped up by $15,000,000, or more than double, the Loans increased by $8,000,000 and the total Assets by $16,000,000. The dividend was 72 per cent. in 1899 and then stood at 7 per cent. until 1906.

With Mr. Hebden a still greater period of development commenced and the Bank kept in full touch with the stable and yet wonderful progress of the country. In 1905-6 a number of Branches were opened including Fort William and Vancouver; in the calendar year 1907 8 Branches were opened and 3 closed; in 1908 three were opened and in 1909 14 Branches-chiefly in the West-and several sub-agencies; in 1910 14 more were established including the Bank's first appearance in the Maritime Province by opening at Halifax and St. John; the following year saw a dozen more with a total of Branches and agencies at the close of 1911 numbering 170. At the 1906 annual meeting quarterly dividends were announced and a contribution of $19,000 to the Officials' Pension Fund; in 1907 Mr. Dawes passed away and was succeeded on the Board by C. M. Hays. C. R. Hosmer had become a Director in 1899 and Alex. Barnet in 1903. In 1907 the dividend was increased to 8 per cent., in 1910 to 9 per cent., and in 1911 to 10 per cent.

At the annual meeting of this year (Dec. 16) Mr. Hague drew attention to the Bank's "immediately available resources " as being 50 per cent. of the Liabilities. F. Orr Lewis was elected to the Board at this meeting in place of C. R. Hosmer, resigned. The

Net Profits of 1909 were $831,159 or 13.85 per cent. upon the capital and $500,000 was transferred to the Reserve Fund with $50,000 granted to the Pension Fund and, as in each of the past three years, $100,000 written off Bank Premises account. It was also decided to increase the authorized capital from six to ten millions and to ask Parliament for power accordingly. During 1910 the earnings continued to grow and the Net Profits ran over the million mark. Another $100,000 was written off Bank Premises, $50,000 added to Pension Fund and $400,000 to the Rest. Mr. Hebden, in addressing the Shareholders (Dec. 31) stated that $18,000,000 had been paid to them in dividends up to date or more than three times the paid-up Capital stock.

The year 1911 was again the best in the Bank's history and showed Net Profits of $1,179,581, the same policy as to Bank Premises and Pension Fund as in 1910, the addition of $500,000 to the Rest which now equalled 90 per cent. of the paid-up capital. During the year Hugh A. Allan resigned and C. F. Smith died and the newly-elected Board at the annual meeting of Dec. 20th was as follows: Sir H. Montagu Allan, c.v.o. (President), Jonathan Hodgson (Vice-President), Thomas Long, C. M. Hays, Alex. Barnet, F. Orr Lewis, K. W. Blackwell, Andrew A. Allan and C. C. Ballantyne. An issue of $1,000,000 new stock was announced chiefly for purposes of additional circulation. During these seven years of Mr. Hebden's management the Bank's Rest had grown by $2,000,000, the Deposits $35,000,000, the Loans by $33,000,000 and the total Assets by $40,000,000. The details from 1898 to 1911 inclusive were as follows:

During these changing years of difficulty and development, of contribution to Canadian progress and a share in Canada's depressions, of eventual and apparently permanent prosperity, the Merchants Bank had various important officials besides the Cashier or General Managers. In its earlier history W. J. Ingram was Assistant General Manager from 1874 to 1882 when J. H. Plummer occupied the position, or that of Superintendent of Branches, until 1886; John Gault succeeded him until 1896 when Mr. Hebden became Chief Superintendent of Branches and so remained until accession to the General Management when Mr. T. E. Merritt came from the New York Agency to take his place.

HISTORICAL SKETCH OF

THE DOMINION BANK

The Dominion Bank is fortunate in having had a history conspicuous for steady and unbroken progress and, obviously, unmarked by any serious reverse. Founded by a group of Toronto business men, amongst whom James Austin and Sir Frank Smith were prominent, and fortunate in at once acquiring the trained services of Mr. R. H. Bethune-then Manager of the Quebec Bank in Toronto with 18 years of banking experience as Cashier, the institution started in a small way but one which proved successful from the very beginning. Its Charter received the Royal Assent on June 22nd, 1869, and provided for an authorized capital of $1,000,000 with $400,000 to be paid up; the promoters named in the Charter were John Worthington, James Crowther, John W. Crawford, M.P., Hon. J. C. Aikins, Walter S. Lee, Joseph Gould, Hon. John Ross, James Holden and Aaron Ross. The organization meeting took place on January 10, 1871, when the following Board was elected: James Austin (President), Peleg Howland (Vice-President), Frank Smith, James Crowther, James Holden of the Whitby and Port Perry Railway, J. H. Mead, and John Worthington. The brokers who had charge of placing the stock on the market were Messrs. Pellatt and Osler and of the first issue of $1,000,000 there had been allotted on May 31st, 1872, $970,252 at a premium of 5 per cent.

Business was commenced on Feb. 1, 1871, on the north side of King Street East, near Toronto Street, and the first Report was presented to the Shareholders on May 1st, 1872, for the term ended April 22nd. Despite a period of dulness in trade-a condition which prevailed more or less during the next seven years— net profits of $107,488 were reported with a dividend at the rate of 8 per cent. and with the interesting statement that "no losses have been made at either Head Office or agencies since the Bank opened." Mr. Bethune was in charge of the management during this preliminary period and Agencies had been opened at Whitby, Oshawa, Orillia, Uxbridge and on Queen Street West, Toronto. This latter was the first City Branch opened in Toronto by any of our modern Banks and was succeeded by many more until in 1912 the Dominion had more than 20 Branches in Toronto alone. The Directors were all re-elected at the 1872 meeting, as above. During the next ten years the Bank management was carried on quietly but with substantial yearly profits and a uniform dividend

of 8 per cent. Even in the severe depression period of 1876-79 there was only a slight diminution in the net profits of the Bank. Few Agencies were opened-Bowmanville (closed in 1881), Cobourg, Napanee, Belleville and Lindsay being the chief. Mr. Worthington died in 1873 and was succeeded on the Board by John Severn, Mr. Mead in 1879 and was succeeded by Edward Leadley, Mr. Severn in 1880 and was succeeded by James Scott. An interesting reference was made in the 1879 Directors' Report to the sum of $294,160 which was invested in Government securities. "They think it advisable to keep as much of the funds of the Bank, as the Rest amounts to, invested in this way. The rate of interest will of course be less than what might be made out of ordinary business; still the amount will be without risk and always available." In 1880 it was noted that the total invested in these and Municipal securities was larger than the amount of the Rest. Ten years later (1890) changes in national development and the greater degree of municipal progress and security were probably indicated in the fact of Government securities standing at $277,511 and Municipal at $1,257,525 while in 1896 the former total was $96,081 and Municipal and other Debentures $2,117,383. By 1911 the total investment in municipal, British, Foreign and Colonial, and Railway Bonds, Debentures and Stocks was $12,246,525.

Returning to 1878 it may be stated that the present Head Office site at the corner of King and Yonge Streets was then secured. The new building, in one of the most conspicuous business locations of Toronto, was occupied in 1879, while additional frontage was purchased and building improvements effected in 1884. The year 1882 had seen a notable financial appointment to the Board in the selection of Edmund B. Osler to replace the late James Holden. At the annual meeting in this year, also, the capital stock was increased by $500,000 and allotted to the Shareholders at a premium of 50 per cent. At the succeeding meeting (May 30, 1883) the Hon. (afterwards Sir) Frank Smith, a member of the Dominion Government, was elected Vice-President in succession to the late Peleg Howland. W. D. Matthews was also added to the Board and the dividend was increased to 10 per cent. The progress of the institution up to this time will be seen in the following table: