Week 2 Lecture- Business Canadian Context

Coins dicult to nance exports and imports lack of

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Unformatted text preview: Banking Dare to be dull! http://www.canada.com/story_print.html?id=1461341&sponsor= Jim Love ADMS 1010 16 It wasn’t always like that •  From 1867 to 1923 - 25% of all Canadian banks failed. •  Shareholders in failed banks lost large amounts of money Jim Love ADMS 1010 17 Pre 1867 •  From 1759 to 1763 – no financial system •  Paper currency in “Lower Canada” issued by the French Government – not trusted •  Aner the fall of Quebec in 1759 paper money was worthless •  S@ll most agrarian Jim Love ADMS 1010 18 Pre 1867 (cont’d) •  Emergence of merchants – coming to Montreal from London, New York, Boston and Philadelphia •  Montreal has the popula@on – 70,000 people in total (only 5,000 English) •  Currencies were gold and silver coins •  Difficult to finance exports and imports •  Lack of trust, large @me lapse Financial intermediary – buys and sells “bills of exchange” and provides credit to facilitate trade Jim Love ADMS 1010 19 Upper and Lower Canada •  Lower Canada – US Dollar is work 5 shillings •  Upper Canada – “York Currency” values the dollar at 8 shillings •  Arbitrage develops between Montreal, York (Toronto), New...
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