A Vision Greater than Themselves: The Making of the Bank of Montreal, 1817-2017 9780773599949

Citation preview

A V I S I O N G R E AT E R T H A N T H E M S E LV E S

Main Branch, Montreal

bmo Institute for Learning, Toronto

A Vision Greater than Themselves THE MAKING OF THE BANK OF MONTREAL, 1817–2017 Laurence B. Mussio

Published for the Bank of Montreal by McGill-Queen’s University Press | Montreal & Kingston | London | Chicago

© bmo Financial Group 2016

isbn 978-0-7735-4829-9 (cloth) isbn 978-0-7735-9994-9 (epdf) Legal deposit fourth quarter 2016 Bibliothèque nationale du Québec

Printed in Canada on acid-free paper

C016245

McGill-Queen’s University Press acknowledges the support of the Canada Council for the Arts for our publishing program. We also acknowledge the financial support of the Government of Canada through the Canada Book Fund for our publishing activities.

Library and Archives Canada Cataloguing in Publication

Mussio, Laurence B., author A vision greater than themselves : the making of the Bank of Montreal, 1817–2017 / Laurence B. Mussio. Issued also in French under title: Un destin plus grand que soi. Issued in print and electronic formats. isbn 978-0-7735-4829-9 (hardback). – isbn 978-0-7735-9994-9 (epdf) 1. Bank of Montreal – History – Pictorial works. 2. Banks and banking – Canada – History – Pictorial works. i. Title.

hg2708.m63m 87 2016

332.1’20971

c2016-903868-8 c2016-903869-6

Set in Sina Nova and Hypatia Sans Pro Book design & typesetting by Garet Markvoort, zijn digital

CONTENTS

Foreword by William A. Downe

ix

Introduction: A Vision Greater

xi

Part One | The BMO Universe The Founders Through Time

A Sense of Place: A National Architectural Legacy 95

Assets

In Hoc Signo: 200 Years of Royal Arms, Logotypes, and Trademarks 137

Determining Destinies: Leaders and Leadership 11 The Written World of bmo : Defining Documents and Directions 27 A Growth Business: bmo and Its Canadian Acquisitions 41 53

Currency, Cash, and Legal Tender: bmo ’s Richly Denominated Legacy 65 Financial Innovations and Firsts

Part T wo | t wo centuries of Banking by the Numbers 203

bmo’s Most Wanted: Protecting Your Money 125

3

Ten Days of Decision: Pivot Points

1

Speed, Distance, Access: bmo ’s First-to-Market Technologies 87

77

bmo Bankers and the Dream of Nation 145 Markets of the Mind: bmo Advertising and the Art of Persuasion 157 On the Playing Fields of North America: Sponsorships 169 From Charity to Philanthropy

181

Cultural Capital: Bankers and Art

205

Deposits

206

The Trajectory of Wealth Generation: 1917–2016 207 Loans

208

Customer Base Employees

210

Branches and Access

211

Mapping Global Operations Branch Network

189

209

213

Community Giving

214

Women in Leadership

215

212

Investment in Technology Employee Giving

216

Memorials to the World Wars: Montreal Head Office, 1923 and 1951 229

217

Investment in Human Capital

The Circular

218

Banking System Stability and Soundness

219

The Passbook

230 231

The “Miller” Chest

223

Deposit Ledger No. 1: The First Database The Certificate of Stock

225

The Bank’s Corporate Seal

The Dictograph, 1970s

Rules and Regulations for the Branches

234

228

vi

C O NTENTS

237 238

Victorian Cryptography: Telegraph Codebooks 239 Minute Book H, 1905–09

244

“… that thou mayest prosper”: The Bank of Montreal/Waskaganish Belt, 1994 245

bmo Harris’s Lionheart: Hubert T. Lion 247

236

Ledger for Foreign Agents, 1885 227

243

M-Bar Chic? The Promotional Bow Tie, 1977

235

The Protectograph

Championship Trophy, Montreal Bankers Hockey League 242

Manual for Tellers, 1965 233

The Blickensderfer Typewriter

226

The William Notman Albums, 1884

224

232

The Bank of Montreal Centenary Medal

The Gold Scale

241

The Pension Fund Society Seal, 1884

Time Lords: The John Wood Clock

Part Three | The Material Culture of BMO Banking 221

Money Boxes

240

Epilogue

249

Acknowledgments

251

A Note on Sources

253

Image Credits

258

246

To the ten generations of the people of the Bank of Montreal who for two centuries have pursued a vision greater than themselves and have created one of the great banking institutions of the world

Bank of Montreal Completes Century This article marking the Bank’s centenary describes economic conditions the Bank’s founders faced that few today could imagine. Their venture flourished because it filled an important need.

Article re-created based upon original. Published 4 November 1917. Copyright The New York Times.

FOREWORD William A. Downe

S

ome would say there’s little place for history in the world of business. It’s true, in banking we typically measure history in second-by-second quotes and quarterly investor calls. The perspective we have about important periods of history while we are living through them generally reflects the concerns of the day. This book started eight years ago when Dr. Laurence Mussio was working on an oral history project for the Bank. He was interviewing bmo employees and retirees whose long experience gave them a unique perspective on our company. In the context of our upcoming bicentennial, he and I spoke about the project being much more than a record of events in the life of a very old company. We both saw the opportunity to draw real meaning from key moments over those years that would allow us to better understand ourselves, both the Bank and the country in which we were founded. I believe you will agree it is exactly what Laurence has accomplished: the telling of a

200-year story that is highly informative, keenly insightful and, while exhaustively researched, tremendously accessible and a delight to read. Identifying this handful of items from the many thousands of possible candidates was itself a massive task and, of course, many interesting items were left on the cutting-room floor. Still, Laurence managed this process with a deft hand and great sensitivity, and I think you will enjoy what you find among the 200 milestone items that together tell our story. They have special relevance to the many people across Canada, the United States, and in major financial markets overseas who have worked for bmo over the years. As this book reminds us, bmo ’s M-Bar carries with it proud traditions of pioneering financial services companies: the Bank of Montreal, Chicago’s N.W. Harris Trust Co., Milwaukee’s Marshall & Ilsley, Canadian investment firms Nesbitt Thomson and Burns Fry – to name just a few. It is our hope that today’s generation of bmo bankers will

learn from and be inspired by the work of their predecessors. In the spirit of this book I would like to add one more exhibit – the 201st. It is a news item from The New York Times in 1917 written to report on the Bank’s 100th anniversary. The article describes how the founders of this company used their vision and daring to establish the first banking business in colonial Canada. Their venture flourished because it filled an important need by facilitating trade and commerce. In the years that followed, as the scope and scale of colonial and then national aspirations grew, the Bank paced that growth by providing the capital and expertise to underwrite the transformational mega-projects of the day. A case in point was the financing of the Canadian Pacific Railway – the transportation system that opened the West to settlement and linked Canada from coast to coast, realizing our national dream. Donald Smith, a vice-president and future long-serving president of the Bank,

“History shows us not only how things get done but also the value of realizing the vision of great nations.”

drove the last spike on 7 November 1885. The Times article also reminds us that decades earlier, during the American Civil War, the Bank of Montreal was a critical source of finance to the US government in an equally critical period. History shows us not only how things get done but also the value of realizing the vision of great nations. I hope that you will enjoy touring the past in these pages. It is our hope that this book and its companion volume, Whom Fortune Favours: The Bank of Montreal and the Rise of Canadian Banking, 1817–2017, will make important contributions to the scholarship on Canada’s business history. This is also an appropriate moment to send birthday greetings to Canada on its 150th

x

FO RE W O RD

anniversary. The Bank of Montreal was already 50 years old when Canada was formed in 1867 – our histories are inextricably intertwined. I would like to thank our author and historian, Dr. Mussio, for the great care he took looking back. I would also like to thank Yolaine Toussaint, bmo archivist, and her team for their many contributions to this work. And I want to thank David Galloway and Robert Prichard – the chairmen of our Board of Directors during my tenure as bmo ’s chief executive officer – for their ongoing support of the Bank’s bicentennial celebration. To our customers – from the most recent, to those whose families have banked with us for generations – thank you on behalf of all of us at bmo . It is our promise that we will continue to strive, to

serve, and to innovate for you and to contribute new great moments in the story of this company.

William A. Downe Chief Executive Officer bmo Financial Group 2016

INTRODUCTION

A Vision Greater

Time and Memory People and institutions exist in time. Those institutions that manage to measure their pedigree in centuries are few. In the North Atlantic world, the small number of corporate and private institutions that have persisted over two centuries form an elite circle. Among those, the ones that have remained relevant through continuous adaptation are rarer still. In banking and finance, things become even more complicated: the landscape of the last two centuries is littered with discredited gothic ruins and abandoned capital fortresses. In Canada, fortune has favoured one singular institution in this category: the Bank of Montreal, Canada’s first bank, established in 1817. Two hundred years of banking represents an extraordinary moment and a remarkable achievement. The Bank began life in Montreal. It carries the city’s name, a distinctive style, and its ancient

spirit of enterprise. As colony grew to nation, as capital flowed continentally, as trade and opportunity first crossed oceans and then encircled the globe, the Bank and its people have been able to call the many cities and regions their own: Halifax, Toronto, Chicago, Milwaukee, Calgary, Vancouver, London, Seoul, Tokyo. The Bank’s home since 1817, in other words, is where the action is. Over 200 years, the Bank of Montreal has come to embrace a hundred different cities, regions, and territories across borders and frontiers. Those borders transcend geography, embracing new realms: service, innovation, and leadership. The Bank’s ten generations of leadership and people have crossed these many borders to create new opportunities. The Bank’s roots are two centuries deep and a continent wide. The history of the Bank of Montreal is the history of not only the first Canadian bank but also one of Canada’s founding

institutions. The bank is half a century older than Canada itself, or for that matter, older than many of the principal contemporary nation-states of Europe. The leaders and the people of the Bank have engaged in a cycle of generation, regeneration, and renewal for ten generations – from shortly after the end of the Napoleonic era in the nineteenth century to the global technologydriven era of the twenty-first century. In 200 years, our world has gone through the rise and fall of empires; the emergence of nation-states; multiple cycles of panics, depressions, and catastrophes; world wars; internationalization; globalization; new technologies; and accelerating information flows. Our world has seen powerful new social and geopolitical forces, revolutions in science, education, culture, style, fashion, faith, and thought. Contemporary observers often feel that in our own day, someone has hit fast-forward on these changes. Past generations often felt the same way.

In all generations of the Bank, change has demanded a confrontation with a continuous series of opportunities, challenges, and risks in protecting and generating wealth.

What We Are Celebr ating This book marks 200 years of the Bank of Montreal. But what, exactly, does it celebrate? Ageing gracefully for one thing. Mere longevity is not really the point of the Bank’s historical experience. This bicentennial is, instead, a point of reference, a setting in time and memory that urges us on toward appreciating the more substantial, multi-faceted, and often-amazing story of the last two centuries. We mark it in the present, but it allows us to imagine what comes next. The rise of the network society in this last generation has changed the way we look at time. In the twenty-first century, we live in the eternal present. Our contemporary temptation is to see history as something to visit. The past can be a stage-set in the background, or a beautiful cold gem set in the institutional, corporate, and individual memory. It is something to visit on your day off, to admire, to marvel at, sometimes to regret, occasionally to exploit for contemporary ends. Static. But take a closer look. When you do, you see in the case of Canada’s first bank an intense, dynamic engagement of people with the wider world. It’s there, underneath the surface. It’s the story of a people forcing forward frontiers for a bank, a city, a nation, and countless customers. It’s the story of the moments they triumphed, and the hard punches they suffered; the tools they used, the

xii

INTRO D U C TIO N

buildings they built, the technologies they used, the innovations they developed, the businesses and governments they helped, the markets they created. It’s also a story of how the leadership and the people of the Bank of Montreal lived the present with passion and commitment and embraced the future with hope and confidence. The Bank of Montreal’s history shows us what happens when ten generations of individual and collective energy, strategy, performance, and vision are released, channelled, and put to work for people and communities. Our eternal focus on the present and the future distances us from that history. This book aims to restore our relationship to that history, to understand through word and image how the Bank of Montreal became what it is today. Read this as a bmo employee or executive and you might say, “this is the way we were, how we became who we are today, and what we carry into the next generation.” Read it as a customer and you might say, “this is how my Bank became an important part of the financial lives of millions of people.” And anybody reading it will say, “this is why Canada’s first bank became a national institution over two centuries, and how it contributed to the multiple destinies of people, communities, regions, and nations.” That, in essence, is what this book celebrates. The subjects explored in this book – through entries about the people, the documents, technologies, events, and achievements – represent an iconography of the Bank’s story, expressing in images what otherwise is described in words. Individually, each entry is intended to put us in touch with an aspect of the Bank’s past:

a personality, a fragment, an innovation, a record, a forgotten advertisement. Each of the entries calls us to an understanding of the Bank of Montreal’s experience through a carefully chosen and unique prism. Individually, they tell a self-contained story, sometimes entertaining, sometimes extraordinary, always informative. (In some ways, that was the point of putting together a book that people could read piecemeal.) Put them together and they tell a much larger story: across the pages of this book, a high-definition portrayal emerges of the experience of the Bank.

An Emerging Picture The picture that emerges from these pages is an extraordinary one. These 200 subjects constitute a vast field of action over time and space where the Bank led, determined, shaped, participated, assisted, or otherwise ushered in the key financial events in Canada and in its field of operation. The Bank was at the epicentre of building, first, the Canadian nation and, then, a host of other regions and territories. It financed governments, public projects, economic development, and trade. You can say that it financed not one but two projects of nation: when Canada became Canada at Confederation in 1867, and when the Canadian Pacific Railway got underway in 1881. No bank or institution ever did it alone, of course. But the Bank is central to the relationships, flows and circulation of currency, assets, and wealth in its home territory. It shaped the Canadian banking system – first, as the first bank, then the dominant bank, then the senior bank, then in concert with other institutions both private and public.

It is an important chapter in the history of North American capitalism. The Bank’s contributions to other kinds of capital – human, leadership, and reputational – are also important. The Bank has provided some of the country’s key financial leaders down the centuries. Its executives, managers, and workers have contributed leadership and service at every conceivable level of public and community life – virtually wherever it has operated. Its thriving subcultures embrace not just banking but also investment, risk management, accounting, security, information technology, and more. The Bank of Montreal has contributed and helped to sustain a remarkable reputation for leadership in banking for Canada in the world. The Bank’s contributions to both the built environment and the material culture of our world are also an important element of its legacy. The buildings, the offices, and the branches mark and shape the urban landscape. The symbols of the Bank through time – the coat of arms and the M-Bar Roundel – are some of the most iconic symbols of their kind. These are the places where Bank culture took root and grew. But it is also the artefacts of the management of banking – the currency, the legal tender, the shares, the ledgers, account books, the instruments, the rulebooks, the regulations, the drafts and overdrafts, the machines and technologies – that symbolize important aspects of the experience of the Bank. Those contributions usually take centre stage. The more dimly lit backstage also produces important, though less common, touchstones you wouldn’t immediately associate with Bank of Montreal banking – support of the arts through a league-leading art collection, and the vital

contributions of the Bank to the full range of local, national, and international initiatives in arts and letters; to higher learning; to medical research; and to a stunning array of worthy causes that bind the Bank to the communities it serves.

to the present and to the challenges of the next generation: cyclical instability, complex operating environments, technological disruption, market volatility, and a changing international political economy will require nimble leadership.

From Many, One

Message from the Past

If we stand back and consider these 200 subjects as a whole, a single message emerges that gives the title to this book. From its earliest days, the Bank of Montreal has pursued a vision beyond itself. That vision has, always and everywhere in the last two centuries, inspired the leadership and people of the Bank to pursue projects and initiatives that transcended the business of banking. The vision is plural and multiple. It takes in projects of a national and global scale, as well as those in a local context. It helps to build nations, cities, and industries, as well as families and communities. It also extends powerfully into those realms of human endeavour that enrich communities: sponsorships in sports, patronage of the arts, initiatives that focus on improvement and sustainability of human capital where it can be found. To confine the history to financial transaction is to miss a fundamental truth of the history of the Bank of Montreal and lose the key reason it has succeeded. The 200 subjects in this book tell a much different, a deeper, more complex, and much more extraordinary story. To the greatest extent possible, individually and together, they tell the sweeping story of Canada’s first bank, one of North America’s oldest banks, and a bank that has made a deep imprint on the financial, economic, and professional landscape of the North Atlantic world. The arc of the Bank’s history brings us

The subjects presented here from over two centuries of the Bank of Montreal’s history deliver a message to the contemporary Bank: that time and again, the leadership and people of the Bank rose to meet an astonishing variety of economic, financial, social, political, and technological challenges and opportunities. Time and again, bmo bankers have confronted and tamed those challenges and exploited those opportunities for two centuries. The past tells the present that they walk with the power of ten generations of bankers – bankers who in their time have faced similar circumstances as important participants, players, and protagonists in Canadian and North American finance – and prospered. Their gaze was firmly fixed on the future, but they never forgot the history and the achievements that bound them to the tradition of their forebears. To borrow an aphorism from banking, while past performance is never a guarantee of future results, the history of the Bank of Montreal shows that hard work, the right leadership and vision, and the best team can make all the difference.

The L ayout of this Book I am going to make an astonishing claim: this book is not designed to be read sequentially cover to cover. Of course, it can be, but it is hoped

INTROD UC TION

xiii

that readers will delve into chapters and subjects according to interest. The book is divided into three parts. Part One, The bmo Universe, includes sixteen chapters that range from the founders to bank leaders, defining documents, currency, innovation, technology, architecture, and the like. Each chapter and entry comes with a short description and explanation. Part Two, Two Centuries of Banking by the Numbers, provides a series of statistical snapshots. Part Three, The Material Culture of

xiv

INTRO D U C TIO N

bmo Banking, showcases the objects that together tell the story of Canada’s first bank. The entries – the people, events, facts and figures, locations, icons, artefacts … – number 200, to give this celebration a certain symmetry with the bicentennial year. Each represents a tile in a complex, important, and historically momentous mosaic, important in its own right, but all the same an integral part of a larger picture. Happy reading.

PA R T O N E The bmo Universe What is the Bank of Montreal and why does it matter? Part One seeks to answer that question by exploring the Bank’s universe as it developed, grew, and extended outwards from a small North American city to the world. The chapters cover people, places, subjects, and events across two centuries of time and space. The mission of this section is to help the reader explore the Bank’s ‘solar system’ by providing a trajectory across 200 years of time, space, experience, and activity. Through word and image, Part One explores Bank of Montreal leaders, people and culture, places, architecture, documents, and key tools and technologies. It also offers a look at how the Bank’s activities helped to build one of the world’s most prosperous and advanced economies and reliable banking systems. The section also examines how, over two centuries, the Bank both served and empowered customers and communities across its territory.

the fo under s thro ugh ti m e

T

he Bank of Montreal is a complex organization that has evolved through two centuries. That complexity extends to its foundation. Its deepest origins are reflected in its name. That name also camouflages the different cultures and distinct organizations that integrated and assimilated into the Bank but yet continue to leave their mark on its nature. Of course, the main foundations are to be found where and when you would expect them – in Montreal in 1817. But the twenty-first century Bank can trace its foundations – its founders and founding cultures – to several places and organizations in time, across Canada and the United States and through once-separate, distinct disciplines: banking, investment, and securities dealing. This chapter focuses on the founders of those key institutions within the Bank of Montreal. It is distinct from the chapter on mergers and acquisitions, which also have a special place in this volume. Here, we shine a light on the founders of those organizations whose cultures have marked

the overall culture of the Bank. If we are to understand the evolving nature of today’s Bank toward a single, integrated culture, we also need to trace the roots of the diversity of cultures and subcultures that contributed to the making of the Bank of Montreal. These individual cultures, moreover, are of varying weights and impacts within the larger Bank of Montreal culture. Cultures and leaders leave behind legacies, inheritances, assumptions, aims, beliefs, and values that can persist in institutional memory and over time. In many cases, the organizational cultures that are so created can generate subconscious ways of thinking and behaving, even as they merge and become a single institution under a single banner. Contemporary culture gives pride of place to founders – founding fathers, mothers, leaders, visionaries, businessmen, statesmen. We recall and celebrate what they said, what they wrote, what they thought, what they were establishing, whether it was a republic, a confederation, a community organization, a club, an order, a business.

The focus on individuals, leaders, founders rather than just the institutions provides an opportunity to rewind the history of a particular culture to its unique beginnings. These institutions were not spontaneously formed – they were born of conscious, often bold or visionary, acts of entrepreneurial leadership. Those leaders had a particular idea or vision of how they could make a living, exploit a new opportunity, and serve a community. They brought people together. They had particular assumptions about how to proceed and what kind of institution they wanted to develop. They set the tone, selected the people, adapted to circumstances, set in place systems and procedures, and determined the composition, scope, and nature of the team. It was at that point that they gave birth to a specific culture, shaped by its context and its environment. Here, we go right back to the first generation, to the first organizers, and offer a glimpse of the distinctive character of the enterprise through a brief look at the people who started it all.

For all the time travel involved in tracing the founders of the Bank’s culture to the nineteenth and early twentieth centuries, with the exception of the Montreal Nine, this is very much a story about the last thirty years, beginning with the arrival of Harris Bank in 1984, Nesbitt Thomson in 1987, and extending to the addition of m&i in 2001 and Foreign & Colonial Investment plc of London in 2014. Along the way, the Bank entered new markets, crossing over into insurance. This speaks clearly to how in this contemporary generation, banking has transformed itself to embrace larger markets, sectors, and territories.

4

Th e BM O Un iv er se

PR AGM ATIC VISIONS

The Montreal Nine

N

ine men signed the original Articles of Association establishing the Bank of Montreal. They represented not only Montreal’s elite but also young Canada’s most enterprising merchants and aspiring financiers. The project of a banking institution had been, in one way or another, a vision that extended back to the 1790s.

Of the nine who signed the Articles of Association, John Richardson was the obvious leader, deserving his title of “Father of Canadian Banking.” He came to America from Scotland in 1773 at age eighteen and worked for Phyn & Ellice at Schenectady, ny , before coming to Canada in 1787. He became a partner in both Forsyth, Richardson & Co., leading merchants, and the North West Co., rivals of the long-established Hudson’s Bay Company. He served two active terms representing Montreal in the legislature of Lower Canada and was appointed to the Executive Council and the Legislative Council. Horatio Gates, born in Massachusetts in 1777, came to Canada in 1804, opened up the immense flour trade with the West, and was described as one of the most enterprising men of his time. No doubt he influenced a large number of his American friends and associates to purchase shares in this new financial institution. He served twice as president of the new Bank. A key figure in the group was George Moffatt. After he arrived at age fourteen in Canada from England in 1801, he earned partnership in the noted firm of Gerard, Gillespie, Moffatt & Co., and eventually acquired controlling interest, becoming deeply involved in the fur trade. He served as an officer in the War of 1812, and in 1826, with his usual far-sightedness, Moffatt established a branch of his firm at York (now Toronto). He was also appointed Commissioner of the British American Land Company, developers in the Eastern Townships with headquarters in Sherbrooke. He served in both the Legislative Council and the Executive Council and represented Montreal in the Canadian Legislature. Moffatt was key in shaping the early character of the Bank in its first decade. Robert Armour emigrated to Canada from Scotland around 1800. Owner of the premises occupied by the new Bank, he was also publisher of the Montreal Almanac and one of the proprietors of the Montreal Gazette. For a time he was cashier of the relatively short-lived Bank of Canada, taken over by Bank of Montreal in 1831. George Garden was a prominent member of the leading merchants Auldjo, Maitland and Company. Active

in St Gabriel’s Church, he was also a charter governor of the new Montreal General Hospital, opened in 1822 on Dorchester Street (now René Lévesque Boulevard) near Montreal’s business centre. This Scot filled the position of the vice-president of the Bank on two occasions. Thomas A. Turner, of the wholesale firm Allison, Turner and Company, was the first vice-president of the Bank. He was born in Aberdeenshire in 1775. He played a role in the Bank’s first foreign exchange transaction, in early 1818, when some 130,000 Spanish silver dollars, in sixty-five kegs weighing one hundred pounds each, were carried by stagecoach along primitive roads through New England’s mountains to reach Boston. Americans in the New England states needed the Spanish silver for their trade with China and the East Indies. Lt. Col. James Leslie, another founder, was a merchant, retired army officer, and son of General James Wolfe’s assistant quarter-master-general at Quebec. Born at Kair, Kincardine, Scotland, in 1786, to minor nobility, he came to Montreal in 1808. He held a variety of legislative and executive positions in Canada for decades. John Churchill Bush, a Montreal merchant born in the United States, also appears on the Bank’s Articles of Association, but he had little to do thereafter with the Bank’s activities. Augustin Cuvillier played a key strategic role in the Bank’s founding. He was a member of the Legislative Assembly, a well-to-do importer, and the only nativeborn Canadian amongst the distinguished group. One of the leading political and economic figures of his time, he provided vital legislative support for the Bank’s incorporation and charter. After the Union of the Canadas in 1841, Augustin Cuvillier became the first Speaker of the Assembly. These nine early bankers were the founders of the Bank of Montreal.

the fo und er s thro ugh ti m e

5

YANKEE VISIONARY

Norman Wait Harris

A

lthough the Bank of Montreal had been active in the United States since the nineteenth century, the 1984 acquisition of Harris Bankcorp, Inc. created a significant American footprint. This was the first time a Canadian bank had a major US subsidiary, and created the first North American bank to provide full service in both Canada and the United States. The founder of the Harris Bank, Norman Wait Harris, was born in Berkshire, Massachusetts, in 1846. He made his way in life as a life insurance salesman in upper New York State before heading west to Cincinnati in 1866. His life insurance connection continued there as he assumed managerial responsibilities of the successful Union Central Life Insurance Company. At age thirty-five, he moved his family west to Chicago in 1881, perceiving new opportunities dealing in municipal and other public franchise bonds. Norman W. Harris & Company opened for business as a securities firm on 1 May 1882, based in Chicago, specializing in municipal bonds. The firm started with $30,000 in capital. The business flourished, as did deposits. After a quarter century of those humble beginnings, the company applied for a banking charter in Chicago. In 1907, it was incorporated as a bank, and become Harris Trust and Savings Bank. Harris served as president from its inception in 1882 until 1913. Harris’s success lay in striking into the retail securities market, particularly with new methods of promotion and advertising. As the Harris’s historian remarks, Norman Harris put securities on a new, more

6

Th e BM O Un iv er se

public foundation. “He believed that the existence and value of good [securities] should be made known to all potential buyers,” in a time when public notices for such investments were rare or even considered unsavoury. The Harris Bank’s success in subsequent decades was in part a testament to the strong philosophical and managerial foundations set by its founder.

POWER COUPLE

Arthur James Nesbitt and Peter Alfred Thomson

T

he acquisition of the investment firm Nesbitt Thomson in 1987 by the Bank of Montreal was the first of its kind between a Canadian chartered bank and a Canadian investment firm. The firm’s founders, Arthur James Nesbitt (photo on left) and Peter Alfred Thomson (photo on right), formed their eponymous investment firm in 1912 after years of partnership in sales in the Maritimes. They understood in particular the importance of hydroelectric development to Canada’s increasingly industrial economy and became prominent hydroelectric utility underwriters. Under the strategic vision of both partners, the firm expanded its utilities. In 1925, it formed Power Corporation of Canada, one of Canada’s most important and successful enterprises, and owned and operated it until 1968. With an investment company and a merchant banking organization in hand, the firm’s success grew exponentially. Eventually Nesbitt’s son Deane assumed control of Nesbitt Thomson, while Peter Thomson, son of the other founder, took Power Corporation. The firm’s expertise in all aspects of the energy sector was remarkable – from uranium debt financing to TransCanada PipeLines. In 1968, it bought a seat on the New York Stock Exchange – the first non-US firm to do so in over thirty years. From the beginning, Nesbitt Thomson shared common interests, common philosophies, and common endeavours with the Bank of Montreal. In fact, this Montreal-based investment brokerage had its offices just down the street from the Bank of Montreal on St Jacques Street, sharing a common alleyway, Fortification Lane. The firm prided itself on being built by risk takers, and by “making things happen.” This premier investment firm had also been known for making its decisions based on serious research – on information, analysis, and network intelligence.

The affinity in operations, territory, and operation between the Bank and the investment firm drew them closer to union. In 1986, the firm went public; in 1987, regulatory changes permitted banks to purchase investment firms, and in short order secret high-level talks were launched that led to Canada’s first integration of a chartered bank and an investment firm through a 75 per cent equity interest. This was a major strategic move into the Canadian and international securities markets, bringing into the Bank of Montreal 650 account executives in fifty-five offices – and a diverse and dynamic corporate culture.

the fo und er s thro ugh ti m e

7

INVESTOR PIONEER

Charles F.W. Burns

T

he prominent Canadian brokerage Burns Fry Limited merged with bmo ’s Nesbitt Thomson in 1994, placing it firmly within the Bank of Montreal orbit. Charles F.W. Burns (1907–1982) was born in Vancouver, British Columbia, son of a Bank of Nova Scotia banker who later moved to Toronto. He began his professional life as a business banker in the 1920s. In 1928, he moved into the brokerage business at the height of the boom of the 1920s. His experience included trading on the floor of the stock exchange and, later, travelling as a securities salesman throughout Ontario. Borrowing $500 from his father, he began his own company, Charles Burns & Company, with a rented desk, a telephone, and a part-time bookkeeper in the offices of another firm. In 1935, Charles was joined by his brother Latham, and they purchased a seat on the Toronto Stock Exchange with a $50,000 loan from Charles’s mother-in-law. Latham died suddenly in 1936. In 1939, Wilfred Denton came aboard and Charles and Wilfred formed Burns Brothers & Denton Limited.

8

Th e BM O Un iv er se

The Toronto firm braved Depression-era conditions to prosper in Canadian finance. The company continued to grow in the post-war period, establish new offices, and penetrate into areas of financing as diverse as uranium mining, oil development, and jockey clubs. Within years of the establishment of the firm, Charles had developed an organization capable of dealing in most facets of the investment industry of the day – transactions through the stock exchange and dealings in government, municipal, and corporation bonds. By the 1970s, it had become one of Canada’s leading investment firms, merging with other companies such as J.R. Timmins & Co. and Fry Mills Spence Limited. By the 1980s, it was widely recognized as one of the most professional of Canada’s fully integrated investment firms. In July 1994, this venerable Canadian investment institution merged with Nesbitt Thomson to create the largest network of investment advisers in the country at that time. The investment capabilities in Canada and the potential that the merger offered toward realizing the North American vision of the bank was uppermost in the minds of contemporary management.

BANKING IN THE FEDER AL TERRITORY

Samuel Marshall and Charles F. Ilsley

T

he Bank of Montreal acquired the Milwaukeebased Marshall & Ilsley Corporation (m&i ) in July 2011. The deal added a substantial US private banking presence, asset management, and institutional trust businesses as well as bolstering global investment capabilities. bmo also acquired two new founders: Samuel Marshall and Charles F. Ilsley. Samuel Marshall (photo on left) was born on 24 November 1820 in the Quaker community of Concordville, Pennsylvania. Educated for a career in business, he entered an apprenticeship with Edward Grubb and family in Wilmington, Delaware, for five years. He then found himself moving west in search of business opportunities, eventually landing a stint in a dry goods business, and learning a great deal about the exchange business and especially about bank notes – the valuable ones and the worthless ones in a territory with dozens of banks, not all of them trustworthy! (See Currency, Cash, and Legal Tender, pages 65–76, for a discussion about the evolution of bank notes and currency.) Exchange brokerages were important in exchanging out-of-town money for local currency. On 21 April 1847, Marshall established the Samuel Marshall & Co., Exchange Brokers banking institution in Milwaukee, Wisconsin. In his first year, he cleared an $800 profit, had taken more than $2,000 in deposits, and began an active investment portfolio in the territory. Thus began a prosperous, private, non-chartered banking institution that under Marshall’s careful tutelage would help to define banking in the city, region, and state itself, which entered the Union in 1848. Marshall’s partner, Charles Ferdinand Ilsley (photo on right), was born in Eastport, Maine – near the

Canadian border – in October 1827. After some experiences and travel in the Boston states and the Midwest, he obtained a job clerking in Milwaukee with Alexander Mitchell and “Mitchell’s Bank,” part of the Wisconsin Marine and Fire Insurance Company. In the summer of 1849, Samuel Marshall and Charles Ilsley began to discuss a prospective partnership in banking. On 1 October 1849, they officially announced the creation of their new private banking partnership. On 29 March 1850, the first advertisement under the Marshall

& Ilsley banner was published, and the beginnings of a great banking institution were launched. After a state plebiscite legalized the existence of banks, in 1853, the partners became Wisconsin’s first chartered bank, incorporating the State Bank of Madison.

the fo und er s thro ugh ti m e

9

F

THE PATHBREAKERS

Philip Rose and the Rt Hon. Richard Bethell, 1st Baron Westbury, Foreign & Colonial Investment Trust plc

10

Th e BM O Un iv er se

oreign & Colonial Investment Trust (f&c ) has the distinction of being the world’s first investment trust. Its founding in London in 1868 is a landmark event in the history of finance. f&c helped to popularize, for the first time, share ownership for the ‘investor of moderate means.’ The stock market of the nineteenth century had been largely limited to wealthy individuals and institutions. As f&c ’s first prospectus declared, “The object of this Trust is to give the investor of moderate means the same advantages as the large Capitalists, in diminishing the risk in investing in Foreign and Colonial Stocks, by spreading the investment over a number of stocks, and reserving a portion of the extra interest as a Sinking Fund to pay off the original capital.” That prospectus launched one of the great financial innovations of its time. As the historians of f&c note in their fine history of the Trust, “it was the precocious talents of City lawyer Philip Rose” that gave life to the company. Rose (photo on right) was born in High Wycombe in 1816, son of the physician who would later become the Disraelis’ family doctor. Young Rose met and befriended the great statesman and future prime minister Benjamin Disraeli, creating a lifelong and mutually beneficial friendship. Rose became a partner in Barker & Rose, solicitors, a forerunner of the present-day London law firm Norton Rose Fullbright. Rose, who had risen to prominence during the railway boom of the 1840s, involved himself in philanthropic pursuits (he founded the Royal Brompton Hospital) before turning his mind to the creation of this new form of investment. Rose approached the Rt Hon. Richard Bethell, 1st Baron Westbury, a Liberal politician, lawyer, and judge (born in Bradford on Avon on 30 June 1800), to discuss the new venture. Lord Westbury (photo on left) was said to epitomize “trustworthiness, security, prudence and reliability.” He served as Lord Chancellor of Great Britain between 1861 and 1865. It was also said that Westbury should “be remembered as a zealous and wise reformer, and as the boldest judge who ever sat on the English bench.” With those credentials, f&c could differentiate itself from the indifferent reputation of the financial sector in

London. The Trust went on to become one of the most successful institutions of its kind in the City. The Bank of Montreal acquired f&c in 2014 as part of a strategy to expand bmo Global Asset Management’s European operations. In the process, it made these two gentlemen co-founders of the Bank of Montreal – an outcome that they assuredly would never have expected in their most fevered imaginings.

Deter m ining Destinies

Leaders and Leadership

T

his chapter centres on two centuries of Bank leaders and leadership. The presidents and chief executives featured here have been selected for their exemplary contribution to shaping the destiny of the Bank of Montreal since its earliest days. The Bank has been favoured with some of the highest calibre of leadership in Canadian banking. Each of the leaders in this gallery was called in his time to respond to a unique set of challenges, a series of complex competitive environments, and tricky opportunities. Collectively, they faced virtually every conceivable challenge that could be posed in the environment of colony, nation, continent, and North Atlantic world. Panics, short depressions, long depressions, rebellions, imperial wars, colonial wars, and world wars top the list of challenges. Less spectacular but no less consequential were the challenges of

competition, technological transformation and disruption, regulatory regime change, globalization, market fluctuation, and social upheaval. But let’s not forget the good times – the bull markets, the postwar booms, the vast stretches of expansion and growth. From the beginning, leaders predicated their success on the ability to gather the right people, deliver the right strategic vision, and build or shape the organization of the Bank to provide the right response to the times. The leadership and people of the Bank were able, to varying degrees, to respond to the demands of their time in different ways and different styles with a range of successful outcomes. Naturally, not every strategy succeeded and not every decision was applauded by posterity; sometimes reversal was inevitable. What is remarkable, however, is the

consistent record of performance over two centuries. Together, these Bank of Montreal leaders have provided a legacy of leadership in Canadian and North American finance that has deeply shaped the course of banking. Choosing the Bank’s greatest leaders is not an easy task – there are always a few who deserve the podium, but for reasons of space or circumstance are runners-up. Here, consulting the traditional minimum qualifications for sainthood has been useful: to qualify, you must be dead and have two confirmed miracles. I have strictly applied only the first condition to our Bank leaders, in spite of the manifest merits of living leadership. I encourage the reader to decide whether the second condition applies.

THE CHIEFTAIN BORN | August 1789 in Creebridge,

Peter McGill

Scotland

MOVED TO CANADA | June 1809 Peter McGill was president of the Bank of Montreal between 1834 and 1860, but involved in the bank’s activities from just after its founding in 1819. The position of president in the Bank was a variable one: the general manager held more operational control and responsibility, while the president’s role could be symbolic, ceremonial, strategic, reputational, or somewhere in between. During his long tenure, McGill’s involvement in the destiny of the Bank tended to be varied according to the period. What is incontestable, however, is the sheer extent and range of McGill’s activities in the life of Montreal. McGill’s business career began and thrived as a mercantile capitalist and importer in Montreal through Peter McGill & Company. Through an increasingly elaborate network of imports and cross-ownerships, McGill rose to prominence in the Montreal business community, becoming its de facto leader by the 1840s. McGill’s interests also extended to the chairmanship of the first board of directors of the Champlain and St Lawrence Railroad, British North America’s first railway, in 1831. By the 1840s, President McGill was one of the most connected and most influential businessmen in the city. The spinning of fortune’s wheel, however, ensured that McGill would become well familiar with both profit and loss in his personal affairs. McGill’s prolific career extended also to prominence in public, social, and religious life. He sat on the Executive and Legislative councils before and after the 1841 Union of the Canadas. He was appointed Montreal’s second mayor after Jacques Viger, but became the city’s first mayor under the new Constitution. He was also Montreal’s first Englishspeaking mayor. McGill was also a devout member of the Church of Scotland, owning St Paul’s Church in

JOINED BANK OF MONTREAL | 1819

PRESIDENT | 1834–60 RETIRED | 1860 DIED | 28 September 1860 in Montreal, qc

TRIVIA | Peter McGill’s original name was Peter McCutcheon. On 29 March 1821, he agreed to become Peter McGill by royal licence, a condition of inheriting his Uncle John McGill’s fortune. He was appointed Montreal’s first mayor under the new Constitution (British North America Act) in 1840.

Montreal along with another prominent Montrealer, John Redpath. Under his presidency and largely under the management of Benjamin Holmes, the Bank of Montreal pursued a ‘stability strategy’ that saw its operations carefully extended across colonial territory. This early period in the Bank’s history and in the Canadian

banking system required strong networks, shrewd negotiations with merchants, local governments, and imperial authorities. By this measure, and despite areas of weakness, the McGill presidency established the foundation, the essential conditions, for the Bank of Montreal to consolidate its leadership in Canadian banking. D e ter m ining D estinies

13

THE CHA M PION

John Molson

J

ohn Molson was president of the Bank of Montreal in four critical years of the bank’s existence – 1826 to 1830 – when its reputation was in play, its present was in turmoil, and its future was anything but clear. Molson’s involvement with the Bank of Montreal grew naturally out of his three decades of success as a businessman, landowner, and politician. Molson’s was the greatest entrepreneurial spirit of his age. His launch of one of Canada’s other enduring institutions – Molson Brewery – was a visionary move into a sector in the vanguard of technological innovation. He considered it his “Commencement on the Grand Stage of the World.” Molson also launched another such sector: steam-powered shipping. As a colonial politician, an investor in key infrastructure and in enterprises including Montreal’s first luxury hotel, a major landowner and philanthropist, John Molson’s interests focused both on the growth of his widening business interests and the expansion of Montreal. Molson’s presidency was inaugurated by a board governance crisis that his election sought to end. With the Bank’s capital – real and reputational – at stake with roiling markets and the liquidation of the principal fur trading houses in Montreal, Molson’s responsibilities were more than merely ceremonial. Molson’s reputation for probity and conservatism in banking was of essential importance in navigating the turbulence of those times. In fact, there were few Montreal bankers who could command the contacts, the networks, and the insight into the colonial economy than John Sr could. Molson championed the Bank’s transition to a wider vision of banking. Molson worked in close concert with Peter McGill and George Moffatt not only

14

Th e BM O Un iv er se

in Bank of Montreal matters in the 1820s and 1830s but also in virtually all investment, monetary, banking, and financial questions facing the colony in their capacity as politicians and public officials. John Molson’s connection with the Bank ended with his death in 1836. His central role in the entrepreneurial life of Montreal and his ability to “reject all national distinctions” in a time when those distinctions were vividly drawn between French and English was of inestimable value to the consolidation of the Bank of Montreal and its future success. Molson’s involvement in the Bank of Montreal began a long, intimate association that saw representatives of multiple successive generations of prominent Molsons represented on the board of directors.

BORN | 28 December 1763 in Lincolnshire, England MOVED TO CANADA | July 1782 JOINED BANK OF MONTREAL | 1817 PRESIDENT | 1826–30 RETIRED | 1836 DIED | 11 January 1836 in Boucherville, Lower Canada TRIVIA | There has been a Molson on the bmo board of directors for 108 of the Bank’s 200 years.

“ THE MONETARY KING OF C ANADA”

Edwin Henry King

E

dwin Henry King joined the Bank of Montreal in 1857. At age thirty-five, on 23 March 1863, he became general manager. Six years later – at forty-one – he became president, the youngest ever elected. By 1873, he resigned and moved to London, England. His tenure may have been relatively short, but it was also perhaps the most intense, maybe the most consequential, and almost definitely the most controversial. King has been called the “most striking figure in Canadian banking history” and the “Napoleon of Canadian Finance” by various historians down the years. He has also been called – derisively – the “King of Canada,” “a little God who dares to treat the representatives of all other banks” in an insulting manner, a “truculent and uncompromising” fellow, and even by his allies as “very peculiar.” King promoted the interests of the Bank of Montreal often brilliantly, frequently ruthlessly, and always with an eye for exploiting emerging opportunities. He was also a polarizing figure who did not suffer fools gladly, to put it mildly. By personality, strategy, and result, King was the great disruptor. Whatever King was, he was arguably the most brilliant strategist and visionary in the history of the Bank. In a key period of the Bank’s history, he professionalized the business of banking, putting commercial credit on an entirely new basis in the 1860s. King took full strategic advantage of the Bank’s leading position in Canadian banking. At home, he re-established the Bank’s faltering position in the Canadian market, showing little mercy to banks in trouble. King especially incurred the wrath of Toronto capitalists for both style and strategy – one of whom, Bank of Montreal

director Senator William McMaster, was so incensed he founded the Canadian Bank of Commerce. During the US Civil War, King vaulted the Bank to prominence as the go-to bank in the New York gold market. He extended Bank operations to London. King also established close ties to the new Government of Canada – both as government banker and as advocate of an ill-starred new banking system whose rules of the game would benefit larger, more stable banks like his own. The resulting political firestorm forced compromise on the new system that led to Canada’s first Bank Act in 1871. King’s exit mirrored his meteoric rise. He departed the field after only four years as president, retiring to London. His spectacular achievements positioned the Bank of Montreal as the incontestable leader in Canadian banking, to the delight of the shareholders and the consternation of his enemies. Meteors burn brightly, make their mark, and burn out. King did all three.

BORN | December 1828 in Ireland MOVED TO CANADA | 1850 JOINED BANK OF MONTREAL | 1857 GENERAL MANAGER | 1863–69 PRESIDENT | 1868–73 RETIRED | 1873 DIED | 14 April 1896 in Monte Carlo, Monaco TRIVIA | King’s parting gift when he left the Bank in 1873 was a full and magnificent service set of solid silver imported from the well-known establishment of Messrs Garrard & Co., London, England. It was valued at $10,000 and was on display for a few days at the Bank office for the inspection of shareholders.

D e ter m ining D estinies

15

THE “GREATEST CREATIVE GENIUS”

George Stephen, 1st Baron Mount Stephen

16

Th e BM O Un iv er se

G

eorge Stephen’s official connection to the Bank of Montreal lasted less than decade: first as director (1873–76) and then as president (1876–81). However, it is hard to overestimate the impact of Stephen’s leadership on the Bank’s destinies in the 1870s and 1880s. During a spectacular rise to prominence as a businessman and financier in Montreal in the 1850s and 1860s, Stephen’s interests spanned virtually every investment and finance activity in the city. His close association with the leading financiers and entrepreneurs of the day – E.H. King, Hugh Allan, Matthew Gault, and especially his cousin Donald Smith – formed a formidable Montreal investment ‘brain trust’ that acted as an important engine for Canadian economic activity. Stephen’s challenge as president of the Bank was to weather a sharp contraction in the Canadian economy. Here, Stephen’s networks and his financial and political acuity assured the Bank’s supremacy in Canadian finance. If he was “the greatest creative genius in the whole history of Canadian finance,” as the historian D.G. Creighton suggested, then he was also the Great Persuader. As his obituary in the Times of London suggested, Stephen had a great gift – a leader in whose presence “doubt and difficulties vanished and hope and confidence revived.” Stephen made his greatest mark in railways. From 1870, he had begun to become convinced of the possibilities of the promise of the Canadian northwest. In the late 1870s, a series of complex and sometimes controversial financial deals – with the Bank in firm alliance – put Stephen in a position to secure the contract to build the Canadian Pacific Railway (cpr ) from the Government of Canada – including $25 million in cash and 25 million acres. He assumed the presidency of the cpr and immediately resigned from the board of the Bank to devote his prodigious energies and intellect to the building and financing of Canada’s transcontinental railway. Failure would mean endangering not only the project but likely the entire banking system of the country, given the Bank of Montreal’s exposure. With essential support from the government of Sir John A. Macdonald – Stephen’s indispensable ally – Stephen,

Donald Smith, and R.B. Angus saw the project to the end. There were no doubts about the importance of the cpr to creating a transcontinental nation. Was it a good investment? Even Stephen sometimes had his doubts. Stephen left a deep imprint on his times and the city that made him famous. He was a key benefactor of the Royal Victoria Hospital ($1 million and real estate) and donated an entire wing of the Montreal General Hospital. His greatest philanthropic passion was the Prince of Wales Hospital Fund for London where his contributions of time, expertise, and funds (£1.3 million) were vital to its success. He built a stately mansion in Montreal that was later called “a masterpiece of the Italianate style in Canada.” By the late 1880s, Stephen moved to Brocket Hall in Hertfordshire, England, a wealthy and honoured man. His last trip to Canada was in 1894. He died on 29 November 1921.

BORN | 5 June 1829 in Dufftown, Banffshire, Scotland MOVED TO CANADA | 1850 JOINED BANK OF MONTREAL | 1873 DIRECTOR | 1871–81 PRESIDENT | 1876–81 RETIRED | 1873 ELEVATED TO THE BARONETCY | 3 March 1886 ELEVATED TO THE PEERAGE | 1891 as Baron Mount Stephen (taking the title from a Rocky Mountain peak near the cpr Line in British Columbia)

DIED | 29 November 1921 in Hatfield, Hertfordshire, England

TRIVIA | Lord Mount Stephen never missed a day of work in fifty-three years.

I M PERIAL COLOSSUS

Donald Smith, 1st Baron Strathcona

D

onald Smith’s connection with the Bank of Montreal spanned four decades as director, vice-president, and eventually president from 1887 to 1905. He began his professional career as an officer of the Hudson’s Bay Company (hbc ) in the 1840s, rising through the ranks by expanding the company’s field of action beyond the fur trade, and modernizing its

operations. Smith was the last hbc imperial governor and was associated with the company for an astonishing seventy-five years. By the 1860s, his ever-closer connection with Montreal brought him into the orbit of financiers, including his cousin George Stephen, R.B. Angus, and E.H. King (all of whom are featured in this chapter). Smith frequently found himself at the centre of the action in the 1860s and 1870s as Canada pushed into the North-Western Territory – as an experienced observer, protagonist, and universally respected diplomat. By intelligence, temperament, and intuition, he was extremely useful in finding solutions to some of young Canada’s most complex and potentially explosive problems. Smith’s involvement and investment in railways in the 1870s, however, was the foundation of his wealth and his success. His key participation in the Canadian Pacific Railway, his loyalty to the project, and his moral support when times got tough were all vital to seeing the project through. Therefore, for more than one reason, it is merited and fitting that Smith drove in the last spike of the railroad – a moment captured in what has since become an iconic photograph. His entrepreneurial talents allowed him to identify opportunities in new fields: in 1888, for example, he was a founding partner of the Federal Telephone Company, which later merged with Bell Telephone. His ventures went beyond the financial: he was elected several times to represent Montreal in the Canadian House of Commons – in 1891, with the largest majority in Canada. In 1896, he was offered the prime ministership by the outgoing incumbent, Sir Mackenzie Bowell, but declined. His public appointments and successes included a long tenure as High Commissioner to the UK. Smith also spent $1 million raising and equipping an entire regiment known as Lord Strathcona’s Horse – 28 officers and 272 non-commissioned officers – to fight in the Boer War (1899–1902). Smith was an extraordinary philanthropist – one of the most generous of his age – giving in excess of $7.5 million in donations and bequests, the greatest of which he reserved for McGill University and the education of women. He earned a well-deserved

BORN | 6 August 1820 in Forres, Scotland MOVED TO CANADA | 1838 JOINED BANK OF MONTREAL | 1872 PRESIDENT | 1887–1905; HON . PRESIDENT | 1905–14 RETIRED | 1905 ELEVATED TO THE BARONETCY | 3 March 1886; gcmg 1897

ELEVATED TO THE PEERAGE | 1897 as Baron Strathcona

OTHER HONOURS | Royal Society of London, 1904; Albert Medal, 1904; gcvo, 1908; Knight of the Order of St John of Jerusalem, 1910

DIED | 21 January 1914 in London, England TRIVIA | Lord Strathcona was a champion of women’s education at McGill University. His financial support inspired the first women students of McGill to be called the “Donaldas,” after him.

reputation not only for his supreme generosity but also his lavish hospitality, his patronage of the arts, and as a prodigiously tireless worker who could outpace men half his age. Smith’s involvement in the Bank of Montreal was extensive, but perhaps not intensive. He was, after all, involved with multiple corporations. The record of his success, his outstanding achievements, and his reputational capital were key elements in the longevity of his tenure with the Bank. In an age where that reputational capital was an essential element of success in the North Atlantic world, Smith was the greatest possible symbol for the Bank. He was at the centre of the action of most successful business ventures in the 1880s and 1890s in Canada. His role in young Canada’s parliamentary life also put him in the centre of Canadian public life, while his passionate belief in Empire and his ability to achieve remarkable successes in the promotion of an imperial vision put Lord Strathcona in a singular category. D e ter m ining D estinies

17

THE M ASTER BUILDER

Sir George Alexander Drummond, kcmg

G

eorge Drummond’s introduction to Montreal business life was intimately linked to his work at John Redpath’s sugar refinery, with which he was associated in the 1850s and 1860s. It was in fact a family business, since George married into the Redpath clan and soon was made partner in John Redpath & Son for a time. Drummond’s involvement in Montreal sugar refining led into politics, especially in the realm of tariff protection and his being in favour of Sir John A. Macdonald’s National Policy. By the 1880s, Drummond became the effective leader of the powerful Montreal business community. He was named to the Senate in 1888, and his ability to speak authoritatively on commercial and financial matters concerning the nation was widely respected and valued. It is during this period that Drummond begins to become involved in the Bank of Montreal. He was a tireless advocate for Canadian banking, and for liberalized regulations on loans to promote industrial development. Drummond’s activity in the Bank of Montreal as vice-president, then as a de facto president during the tenure of Donald Smith, and finally as the official president focused on aligning the services and policies of the Bank of Montreal to the emerging opportunities in Canadian manufacturing and industry. The Bank also embarked on a major expansion of its branch network and field of operation, opening 110 branches and better than tripling its employee base from 300 to 1,000. Drummond’s leadership pushed and pulled the Bank to fully serve and exploit the emerging economy of the early twentieth century. He also provided support for Montreal capitalists to strike into the West Indies

18

Th e BM O Un iv er se

and Mexico in search of new fields of investments. This is how George Drummond ensured the central place of the Bank to the financial salience of the Dominion of Canada. Like a few of his contemporaries in the Bank’s upper echelons, Drummond was made a Knight Commander of the Most Distinguished Order of Saint Michael and Saint George (kcmg ) in 1904 and commander of the Royal Victorian Order in 1908. He and his wife pursued an amazing variety of philanthropic, artistic, and sporting interests to the greater glory of making Montreal Canada’s metropolis. Drummond’s contributions to the Bank, to the city, and to the civic and social life of his city and country seem remote and locked in time – sugar refineries, the red chamber of the Senate, tariff policy, knighthoods. For us, from this distance, the main point is how Drummond and his contemporaries built a banking system, and ceaselessly sought out investment, development, and opportunity not only to build their own fortunes but also for the prosperity of their customers and the wealth of nations. The fortunes they amassed doing so, they typically distributed, inspired by their Christian faith, conviction, and in the very finest philanthropic and civic traditions. So it was with Sir George Drummond.

BORN | 11 October 1829 in Edinburgh, Scotland MOVED TO CANADA | 1854 JOINED BANK OF MONTREAL | 1882 VICE -PRESIDENT | 1887–1905 PRESIDENT | 1897–1904 (de facto); 1905–10 RETIRED | Died in office DIED | 2 February 1910 in Montreal, qc TRIVIA | In 1895, George Drummond became the Royal Canadian Golf Association’s first president.

LEADER AND SERVANT

Richard Bladworth Angus

R

ichard Bladworth Angus stands out in the Bank of Montreal pantheon for several reasons. He was among the first to rise to the executive ranks in the nineteenth century as a career banker. Angus began his Bank of Montreal life as a bookkeeper/clerk. The leadership quickly understood his extraordinary talent and acuity. In 1861, he was sent to lead the Chicago agency. In 1863, he was reassigned to the much more consequential New York office as agent before coming back to Montreal in 1864 to occupy a series of progressively more responsible roles. In November 1869, he became general manager of the Bank. His first-hand knowledge of bank operations throughout the Bank’s field of action was unique and priceless. During the 1870s, his superb leadership is in large part responsible for the success of the Bank’s fortunes in the face of a stubborn economic depression. He was tempted away from the Bank by the siren call of railway development, resigning his position to manage the St Paul, Minneapolis and Manitoba Railroad (a Stephen-Smith syndicate interest). The Bank leadership was not a little unhappy to lose such a brilliant general manager. But Angus’s future and fortune lay down the track, in railways, with his involvement with the Canadian Pacific Railway. He worked hard, however, to maintain close ties between the cpr and the Bank of Montreal. In May 1891, Angus returned as a director of the Bank, taking a back seat in the affairs of the Bank until two decades later, when he was called to the presidency in 1910. Two years after that, he became the Bank’s largest shareholder.

R.B. Angus in many ways represented the last of that heroic generation of polymath businessmeninvestors-entrepreneurs of later nineteenth-century Montreal. He symbolized how Bank of Montreal banking expertise was harnessed to the cause of the great projects of the century, especially the railway. The Bank conferred not just capital but also first-class managerial and administrative expertise to Canadian economic development. Angus used his considerable wealth to invest in a wide variety of firms, and to create massive estates in Montreal and in the countryside. His accumulation of a considerable art collection, valued at $50 million in 1889, is still considered one of the most extensive and significant in Canada.

BORN | 28 May 1831 in Bathgate, Scotland MOVED TO CANADA | 1857 JOINED BANK OF MONTREAL | 1857 GENERAL MANAGER | 1869–79 PRESIDENT | 1910–13 RETIRED | 1922 (died in office as a director) DIED | 17 September 1922 in Senneville, qc TRIVIA | Unlike his contemporaries, R.B. Angus refused a knighthood in 1910. On the day of his funeral, 19 September 1922, the cpr stopped all trains for two minutes in homage to the contributions of one of the railway’s founders.

D e ter m ining D estinies

19

V

THE ESTABLISH M ENT BANKER

Sir Henry Vincent Meredith

20

Th e BM O Un iv er se

incent Meredith’s life and career neatly reflects the rise of Canada as a nation and the development of a homegrown Canadian financial leadership cadre. Meredith was the first Canadian-born leader of the Bank. His career as a professional banker began in Hamilton, Ontario, in Canada’s Confederation year, 1867. His success both shaped and was shaped by the rising fortunes of the Bank of Montreal in this era. Meredith knew the banking business from the ground up. As the radius of his responsibilities grew, Meredith’s managerial achievements reinforced and deepened the Bank’s imprint on the economic and financial life of young Canada. Meredith was described as “alert, keen, and absolutely exacting as to the details of the bank.” Meredith symbolized the quintessential Canadian establishment banker of his day – the epitome of integrity, conservatism, and professionalism. As one biographer noted, “There were men like him in London … but few in Canada.” Meredith’s regal, upright bearing and personality nicely complemented that of his outgoing and extroverted general manager, Sir Frederick Williams-Taylor. Cometh the hour, cometh the man: Meredith assumed the helm at the Bank of Montreal on the eve of First World War. As the head of the leading Canadian bank, Meredith’s advice and counsel were vital in supporting the Canadian war effort. The Bank was also called on to represent Canadian financial interests abroad and safeguard the credit of the nation in a turbulent time. Keeping the Canadian financial system from peril was the number-one priority. In the 1920s, Meredith’s Bank piloted a wave of mergers and acquisitions that included the Bank of British North America (1918), the Colonial Bank (1920), the Merchants Bank of Canada (1922), and Molsons Bank (1925). Together, they tripled the Bank’s asset base from $244.8 million to $831.5 million between 1913 and 1927.

Like a few great men of his day, Meredith’s philanthropic impulse was an essential part of his impact in the community. He established a trust fund to help Bank employees in straitened circumstances due to illness or crisis and a second fund to assist women employees. His involvement with the Royal Victoria Hospital was a particular passion. One observer commented in the late 1920s that “during the last 25 years there was hardly a … campaign launched for betterment of conditions of the relief of suffering, or the advancement of the city but had the encouragement and sympathy … as well as the practical support of this banker.” One obituary in 1929 remarked that “it is not only the brilliance of his genius” that evoked the outpouring of sympathy at his death but also his humanity: a fitting epitaph for Meredith’s contributions to the Bank and to the country.

BORN | 27 February 1850 in London, United Province of Canada

JOINED BANK OF MONTREAL | 1867 GENERAL MANAGER | 1911; Vice -PRESIDENT | 1912 PRESIDENT | 1913–27; CHAIRMAN OF THE BOARD | 1927–29

RETIRED | Died in office ELEVATED TO THE BARONETCY : 15 September 1916 DIED | 24 February 1929 in Montreal, qc TRIVIA | Meredith’s annual salary as president began at $40,000. He was an accomplished boxer.

THE NAVIGATOR

Sir Charles Blair Gordon

T

he presidency of Charles Blair Gordon coincided with one of the most tumultuous periods in the history of the twentieth-century Bank. It began during the two last good years of the 1920s – 1927 and 1928 – and ended just shy of Canada’s entry into the Second World War in 1939. Economic, social, and political forces dramatically altered the Canadian and continental landscape. The boom of the 1920s gave way to the great stock market crash of October 1929 and contributed in

BORN | 22 November 1867 in Montreal, qc JOINED BANK OF MONTREAL | 1912 (as director) PRESIDENT | 1927–39 RETIRED | Died in office HONOURS | obe, 1917; gbe, 1918 DIED | 30 July 1939 in Montreal, qc TRIVIA | Gordon’s wartime service included vice-chairmanship of the Imperial Munitions Board in Canada (1915–17) and Director General for War Supplies for Great Britain in Washington, dc (1917–18).

its wake to the Great Depression of the 1930s. Canadian banking came under intense scrutiny. The transformations in the financial system included the creation of a central bank – the Bank of Canada – and the establishment of a single Canadian government-issued currency. The careful and complex navigation through these turbulent waters summoned the full capacities of the Bank’s management of the day. Gordon and his General Manager Jackson Dodds were major protagonists in these changes as defenders of the Bank’s interests and advocates for Canadian banking. They were also facilitators of the new world of banking that was emerging. Gordon’s experience in industry (at Dominion Textile) and within the most influential financial and political circles was essential for the Bank and the country in these troubled times. Gordon had an earned reputation as a shrewd negotiator and businessman. For his contributions to the war effort in Ottawa and Washington, first on behalf of Canada and then the Empire, he was made a knight commander of the newly formed Order of the British Empire. “Perhaps there is no other man in Canadian business life,” one newspaper enthused in 1917, “whose career so aptly illustrates the reward of conscientious business energy as that of Chas. B. Gordon.” Gordon the man was said to be quiet in manner and simple in mode of life. He would be one of the first to arrive at Place d’Armes for work, and by many accounts exercised his authority with a “kindly demeanour and disarming modesty.” He was also a devoted Montrealer – the “chief of the successors” of those Scots who contributed so much to the life, commerce, and culture of Montreal in the heroic age of the nineteenth century. Yet he was also a businessman who circulated in the North Atlantic world of his time, putting Montreal in play with London and New York.

D e ter m ining D estinies

21

THE QUIET M AN

George W. Spinney

G

eorge Wilbur Spinney’s leadership of the Bank effectively began with his appointment as general manager in 1936, but his influence was felt much earlier. A major reorganization of the Bank in the early 1920s under Spinney’s supervision launched it into securities with the establishment of the Securities Department, giving the Bank the administrative capacity to underwrite and distribute investment securities. This transformation ensured the Bank could meet its expanding responsibilities in the financial system. In 1942, Spinney (standing centre in photo) became the Bank’s wartime leader virtually ‘in absentia’ as he was serving in Ottawa as chairman of the National War Finance Committee. He was effectively the first professional career banker to lead the bank. By the time he reached the position of general manager, he had thirty years of expertise in all aspects of the banking business. Spinney’s brilliance, however, resided in the knowledge and understanding of the emerging field of securities, particularly government securities. This expertise was put to national service with his leadership of nine successful Victory Loan drives to finance the Canadian war effort. The Bank of Montreal in George Spinney’s time had to deal with a series of formidable challenges, including the persistence of the Depression beyond the 1930s and Canada’s entry into the Second World War.

22

Th e BM O Un iv er se

In the post-war years, pent-up consumer demand and reconstruction would pose a different set of challenges: growth, opportunity, competition. Spinney’s career was marked with tough cases – with economic adversity, with special accommodation for cities and towns in the depths of depression, with extraordinary loans for public works, and with the supreme challenge of wartime. If the Bank of Montreal stepped up to the mark in meeting these challenges, it has bankers like George W. Spinney, the ‘Quiet Man,’ to thank for it.

BORN | 3 April 1889 in Yarmouth, ns JOINED BANK OF MONTREAL | 1906 (Bank of Yarmouth)

GENERAL MANAGER | 1936–42 PRESIDENT | 1942–48 RETIRED | 1948 HONOURS | cmdg, 1941 DIED | February 1948 (n.d.), Westmount, qc TRIVIA | He was the first leader of the Bank to be called “chief executive officer.”

W THE BANKER’S BANKER

Gordon R. Ball

ith the accession of Gordon R. Ball to the presidency from 1952 to 1959, the contemporary Bank begins to come into view. Ball was the epitome of a twentieth-century Canadian banker, working his way up the ranks and through the branches, including spending his formative years as a manager in New York during some of the most interesting times faced by the financial system – boom, crash, panic, depression, and war (1924–45). At the time of his appointment to the Bank’s presidency in 1952, he was the youngest president of Canada’s oldest chartered bank. He oversaw the Bank’s expansion in the post-war period. Ball’s early life shaped his approach to leadership. Born in Toronto in 1897, his youth was one of great economic hardship. He and his brothers supported the family from a very early age after the death of his father. He was a decorated member of the Canadian Field Artillery in the Great War, earning the nickname “Gunner Ball G.R.,” partly because of his stature (he was 5 feet tall) and partly because of his courage in the face of the enemy at the Ypres Salient and at Cambrai – both scenes of bloody conflict for the Canadian Expeditionary Force. He emerged from that conflict with a lifelong limp. In his banking career, he also took on the tough tasks. He managed the Bank’s New York agency Securities Department during the depths of the Depression. During the Second World War, Ball organized the British Treasury’s liquidation of American securities owned by British interests to finance the imperial war effort against the Axis powers. Ball’s New York time marked him and his approach to banking. Returning to Montreal in 1947 to become general manager, he became head of the bank in 1951–52, where he oversaw the Bank’s expansion in the heady post-war boom of the 1950s. In 1958, he established a joint Caribbean venture with the Bank of London and South America Limited called the Bank of London and Montreal. He was also responsible for the purchase of the 2 Wall Street building and oversaw the planning of a major new office tower in Place d’Armes. Gordon Ball was an intensely hard-working executive and inveterate traveller. He also was among the most social leaders in the Bank’s history, attending as many

BORN | 17 August 1897 in Toronto, on JOINED BANK OF MONTREAL | 1914 GENERAL MANAGER | 1947–52 PRESIDENT | 1947–52 RETIRED | 1959 HONOURS | Military Medal, 1919 (3d Batt, 1st Brig., Cdn Field Artillery)

DIED | 28 February 1959 in Montreal, qc TRIVIA | In 1939, Ball acted as the “Keeper of the Purse” for the Visit of HM King George VI and Queen Elizabeth to the United States. Ball found himself dressed in tails in front of a massive crowd who mistook him for King George VI. Ball had no choice but to walk the red carpet to great cheers – until the throng realized he was not the King, at which point the enthusiasm transformed into something rather different. He remarked that he knew what it was like to be king.

as 500 luncheons, cocktail parties, and events in a year. He was a tireless supporter of his community, judging from his devotion to everything from the Royal Victoria Hospital to the many associations in Montreal to the Canadian Mental Health Association. His contemporaries most remembered Ball the man as warm, unpretentious, and humorous. Until the day he died in office of a cerebral haemorrhage in February 1959, he kept a motto at his desk that read, “One of the surest signs of increasing growth in wisdom is a disinclination to take oneself seriously.”

D e ter m ining D estinies

23

THE MODERNIZER

George Arnold Reeve Hart

T

he leadership of George Arnold Reeve Hart coincided with the economic, social, and technological transformations of advanced industrial economies in the 1960s and 1970s. The banking sector itself was beginning to realize, perhaps late, that these changes would transform banking itself. Hart was well qualified to lead the Bank into the contemporary era. He joined the Bank in the depths of the Depression and served five years in the Canadian Army (1941–46). In the post-war period, Hart held a succession of posts from Montreal to Edmonton to New York City (where the Bank was the oldest foreign agency). In the Big Apple, Hart once quipped that he learned “to deal in millions and tens of millions.” Hart envisioned the Bank playing on a national and international scale. He himself travelled to the Asia Pacific and the subcontinent as early as 1953 and clocked 35,000 miles by air – an astonishing statistic considering that air travel was in its infancy. Hart was proud to claim years later that his was the first such trip of any Canadian bank executive. Hart recognized the urgency of change in the Bank in the 1960s, and moved accordingly, famously hiring Fred McNeil and a few executives from Ford Motor Co. to move to a new style of banking. Hart’s motives were intended to push and pull the Bank’s organization into the twentieth century through information technology and new information and control processing systems. The oil shocks and inflation of the 1970s also posed a series of challenges to the Bank. This last challenge, inflation, occupied many of Hart’s public interventions in the early to mid-1970s, as well as the troubling state of the national public debt. Hart led the Bank in a changing social and commercial landscape in Canada, recognizing that

24

Th e BM O Un iv er se

transformations were necessary not only at the Bank but also in the country. He was an energetic contributor to the economic, financial, and business debates of his day. He offered clear, insightful, and authoritative views on the present and future of Canada. “I feel strongly,” he told an audience in Toronto in 1958, “that this country’s growth will be assured, and the purchasing power of its currency preserved, only if Canadians are prepared to work for those rewards … this country was not built by people whose chief concern was how little they should work.” Hart was a Bank of Montreal banker through and through, believing that “you have to treat your people fairly if you want them to pull their share in promoting the business of the bank for the benefit of everyone working in it.” To the contemporary executive his words of 1975 may resonate: “All banking is a judgement exercise. You can’t always be right … You have to take some risks.” And on the Bank’s future: “I want to see the Bank move ahead with the times.” Hart reflected that his greatest satisfaction was “getting to know people … and trying to assist them with their various problems as they relate to banking” – truly the mark of a great servant-leader.

BORN | 2 April 1913 in Toronto, on JOINED BANK OF MONTREAL | 11 September 1931 PRESIDENT AND CHIEF EXECUTIVE OFFICER | 1959–74

RETIRED | 1984 HONOURS | mbe, 1946; cm, 1981 DIED | 5 October 2001 TRIVIA | The Bank’s early judgments of Arnold Hart were on the mark: “A good type of lad who has more than ordinary ability … is keenly interested in and is progressing favourably … Outstanding in every respect and should go far if given the opportunity.” His first job: control the postage at Mount Pleasant Road branch.

COM ES A HORSEM AN

W.D. Mulholland

W

.D. (Bill) Mulholland’s accession to the leadership first as president (1975–79) then as chief executive officer (1979–89) and also chairman of the board (1981–90) caused an earthquake within the Bank – a disruption whose tremors and aftershocks were felt for decades. Mulholland’s career had prepared him for the transformational role he was to play in putting the Bank of Montreal on a bold new strategic course. In 1944, he was commissioned in the US Army in the Philippines. His education included a ba from Harvard College (1951) and an mba from Harvard Business School (1952). His early career was with Morgan Stanley (1952) where, as partner, he led the financing of the massive Churchill Falls Hydroelectric Project in 1962, taking over the entire leadership of that project by becoming president and ceo of Brinco. In 1975, he was appointed president of the Bank of Montreal. The Mulholland era is the stuff of legend among a certain generation of bmo bankers. His style betrayed a single-minded focus on his number-one task: the transformation of the Bank of Montreal. His exacting personality, unimpeachable ethical code, and insistence on operational and strategic excellence would have made him feel at home as a Roman proconsul or a field marshal. The truth of the matter is, in retrospect, the Bank needed to be pushed and pulled into the contemporary era of financial services, to re-create the thrust, capacity, and strategic drive that had propelled it to the top of the Canadian banking system in the past. In carrying out that task, Mulholland was viewed by some as a horseman of the Apocalypse, while others saw a transformational leader – Napoleon crossing the Alps: the conqueror with his steed Marengo. However one viewed him, there was no questioning his commitment to ensuring the institution under his leadership would change to be ready for the future.

Mulholland’s singular vision was to transform the entire Bank – to elevate it to a premier international rank, to restore its operational and competitive edge. Under his leadership, the Bank of Montreal embarked on an epochal internal transformation. The Bank modernized its international and financial markets operations. It moved aggressively into large corporate finance. It streamlined its leadership structure. It established new groups and working groups to respond to the emerging needs of customers and markets. For the first time, women were being more aggressively promoted into the executive ranks. Technology transformation continued and accelerated. In 1984, Mulholland led the Bank to purchase Harris Bankcorp Inc. of Chicago, perhaps the most far-sighted of his actions. In one stroke, he had given the future Bank the strongest position of any Canadian bank in the US market and permanently established the character and remit of the Bank as firmly North American. In 1987, he led the Bank into investment with the purchase of Nesbitt Thomson. The Bank was challenged by global headwinds in the early 1980s, as third-world countries defaulted on loans. Mulholland took a risk and, rarely for him, found himself playing defence. Mulholland’s fame and his transformation of the Bank also came with a shadow side that provided grist for the mill of the popular press. He kept people waiting, sometimes for hours. He kept people guessing as to what his next move would be. The quest for excellence sometimes veered into perfectionism. His streamlining eliminated an entire generation of management. He stuck by unpopular decisions such as the separation of personal and commercial banking. As he himself realized, his single-combat-warrior style of leadership was, by 1990, passing from the scene. But there is a difference between style and substance: in substance – what remains of what was built – his legacy is complex, far-reaching, and created to last. His larger-than-life personality dominated the era at the Bank. But if it hadn’t been for Bill Mulholland, the avatar of transformation in an era of change, the destiny of the Bank would have been very different.

BORN | 13 June 1926 in Albany, ny, usa JOINED BANK OF MONTREAL | 1975 PRESIDENT | 1975–79; CHIEF EXECUTIVE OFFICER | 1979–89; CHAIRMAN OF THE BOARD | 1981–90

RETIRED | 1990 HONOURS | Prime Minister’s Medal (Israel); Knight Commander’s Cross (Badge and Star) (Bundesrepublik Deutschland)

DIED | 8 September 2007 at Windswept Farm, Georgetown, on

TRIVIA | Bill Mulholland’s lifelong passion was horses. He and his family built one of the premier Hanoverian stud farms in the world, Windswept Farm.

D e ter m ining D estinies

25

The W rit ten W orld of bm o

Defining Documents and Directions

A

nyone who visits the Bank of Montreal Corporate Archives will leave with no doubt that the banking business is a supremely information-intensive and document-rich enterprise. As the Bank grew and prospered over time, the challenges of information processing and control grew exponentially. Record-keeping and accounting, tracking and coordination, and correspondence all provided the pulse and the content of the Bank of Montreal information network.

Rules, regulations, strategic decisions, special projects, deals, contracts: the banking world is a written world. In the multi-million-document flow of the Bank’s history, some documents stand out because of their sheer volume and weight: think of the regulations and rules that govern banking. Others, however, stand out because they crystallize a turning point or a particular road taken. These documents define or direct. They each tell a story

about a dimension of the Bank’s experience – from a real estate deed, to a royal charter, to the first annual report published in French, to a key strategic document that launched the Bank into the 1990s. The documents presented here are in no way definitive – an entire book of documents would have to be dedicated to such an endeavour. These, by contrast, are meant to be representative exemplars – and a thematic cross-section – through two centuries.

The Articles of Association

T

he Bank’s Articles of Association are, in many ways, its Magna Carta. The document was the product of a protracted legislative and administrative struggle to establish Canada’s first bank. For many complex reasons, not the least of which was the concern for the financial well-being of the British North American colonies, the imperial Lords of the Treasury were reluctant to offer their full support to colonial banking, except under very specific circumstances and conditions. The first charter would not come until July 1822. Therefore, these Articles of Association represent the foundational document of the Bank of Montreal. The Subscribers, or signatories, had entered into an “Association or limited Co-Partnership” and agreed to “conduct banking Business in the manner hereinafter specified and described, by and under the name or style of the montreal bank .” The private company would conduct its banking business under the ‘superintendence’ of John Richardson, George Garden, George Moffatt, Thomas Andrew Turner, Robert Armour, James Leslie, Horatio Gates, John C. Bush, and Augustin Cuvillier. There were twenty-five articles in all setting out the rules, regulations, and conditions of the banking business, the capital stock of the bank (£250,000 “current money of this province”), the number of directors (thirteen), director eligibility, and other conditions “for the good management of the affairs of the said Association or Company.” The signatories to these original Articles of Association could scarcely have imagined how their actions in the summer and autumn of 1817 would influence the entire course of the Canadian financial system and set the foundations for one of Canada’s key institutions.

The W r it ten W or ld of b m o

29

O Land Purchase Contract for the First Bank of Montreal Building, 1818

30

Th e BM O Un iv er se

n 6 February 1818, James McDowall, a merchant of the city of Montreal sold a lot of land to John Gray, Horatio Gates, and George Platt, representing the newly formed Bank of Montreal, for the sum of £1,872. The first real estate purchased for a Canadian bank was Lot Number 11, “bounded in the front by the Line of continuation of St James Street, on one side by the Line of continuation of St François Xavier Street, on the other side by Lot Number twelve, herein after mentioned, and in the rear by Fortification Lane.” The original land belonged to Paul de Chomedey, Sieur de Maisonneuve, who is immortalized in bronze in Place d’Armes. Maisonneuve sold the land to Jean DesRoches on 10 January 1648. This was only

the second grant of land made by Maisonneuve. The ground on which the Bank’s head office stands, therefore, is rich in historical significance. The Bank purchased that original deed for $1,000 in 1948 after encouragement by former Dominion Archivist of Canada Gustave Lanctôt, who felt strongly that this document should remain in Canadian hands. Construction was completed in less than a year and a half. The first Annual Meeting of Shareholders convened in the new building on 7 June 1819. The classic portico with its Doric columns heralded an architectural style that would be adopted by many other banks and public buildings across Canada during the nineteenth century.

The Royal Charter

T

he Royal Charter of the Bank of Montreal came only after a long struggle, an interminable wait, and an eventual acquiescence on the part of the British imperial authorities. The Bank’s organizers had to wait until the summer of 1822 – almost five years after the institution had begun transacting business. The Lords of the Treasury in Whitehall as well as Colonial Office officials were very careful about issuing banking charters. Joint-stock banking was a relatively fresh innovation: imperial decision-makers had to be sure that royal approval would be merited and that the activity they were sanctioning was worthwhile and beneficial. As a result, royal charters were not easy to obtain and detailed in their restrictions. The articles of the first charter essentially set out the rules of the banking game, who paid and who played. Of the twenty clauses, four are devoted to banking crimes: embezzlement, theft, counterfeiting, and forgery. The first three were punishable by death “without benefit of clergy.”

The W r it ten W or ld of b m o

31

The Resolution to Print the First Bank Notes

T

he resolution to print the very first Bank of Montreal bank notes was passed by the directors on 13 September 1817, weeks before the Bank opened its doors on 3 November 1817. The order to print the first notes was given to Mr Reid, an engraver in Hartford, Connecticut. That same day, the directors of the Bank agreed that one of the partners, John Richardson, be instructed to procure for the Bank a set of plates in London – have

a certain number struck off on the “best Bank paper.” The watermark would have the name of the Montreal Bank as closely as possible imitate the watermark of the Bank of England notes. These materials would then be shipped to Montreal by the first vessel in the spring of 1818, together with a rolling press of the “best construction.” This is how the story of bank paper currency began in Canada.

Letter to George Spinney from Prime Minister Mackenzie King

T

he Bank of Montreal’s involvement in wartime finance for both the first and second world wars was extensive and often intense. The Bank mobilized its head office administration and branch network to promote the savings campaigns in order to raise the funds required for the national war efforts in both conflicts. On a separate track, fundraising was also supported on behalf of Canadian auxiliary war services such as the Royal Canadian Legion, Salvation Army, Knights of Columbus, and ymca /ywca . The Bank’s role in wartime finance was not limited to these extensive activities. The Bank’s senior

managerial capabilities were also conscripted to the war effort. The managerial capabilities that were required in mobilizing the administrative capacities of wartime finance were considerable – so considerable, in fact, that the capacities of the Government of Canada expanded virtually exponentially during this period. The document provided here is a letter from Prime Minister William Lyon Mackenzie King to the Bank of Montreal’s G.W. Spinney. Spinney was on loan to the Dominion war effort as the chairman of the National War Finance Committee. The letter congratulates Spinney on the overwhelming success of the Fourth

Victory Loan in May 1943. The success of the loan came at a crucial time in the war, as King mentions in the letter, coinciding with the need to “demonstrate unity of purpose” in the ongoing war effort. King expressed his appreciation in the House of Commons on 17 May 1943 for the record $1.1 billion raised “in firm support of Canada’s fighting men in the campaigns which must be undertaken before victory can be achieved.” There were a total of nine victory loans in the Second World War, raising approximately $12 billion.

The W r it ten W or ld of b m o

33

The First Annual Report in the French Language

T

he first annual report of the Bank of Montreal to be published in French came in 1962, in the 145th year of the institution’s existence. What today is taken for granted – the publication of key bank documents in both official languages – was only beginning to become de rigueur. The fact is that the Bank’s roots – its culture, character, and activities – for over a century were deeply anchored in the English-speaking Protestant community of Montreal. The cultural and operational parameters of its management found its expression predominantly in English, the language of business. The cultural, political, and linguistic ferment of the 1960s in Quebec gave rise to what historians call La révolution tranquille or the Quiet Revolution. This movement transformed almost every aspect of Quebec society – social, cultural, political, and economic. Under the banner of maîtres chez nous – masters in our own house – the people of Quebec began to assert their collective rights as a people, not least in the area of language and linguistic rights. Therefore, the appearance of the Bank’s first annual report in French is the modest beginning of part of a much larger and complex story of adaptation to new conditions and realities, new dynamics and new opportunities in the province. As General Manager R.D. Mulholland instructed in a circular on the subject, the Bank had in mind “important French-speaking customers to whom the new [French] edition of the report may be of interest, and also prominent citizens, officials of community organizations and municipal officers, including mayors of municipalities who are customers of the Bank.” As the province’s economic power began to grow, so did the possibilities of finding new ways to reach customers – beginning with speaking their language.

34

Th e BM O Un iv er se

Canada’s First Bank, Volumes i and ii

T

he celebration and commemoration of history and historical milestones has long been a subject for historians to ponder. What, exactly, are people celebrating? What was important to them? What did they emphasize, and what did they leave out? Were any controversies buried? Were people looking back or looking forward? These are questions that future generations will ask of our generation. Our generation gets to ask them of the last one. The Bank’s 150th anniversary celebration in 1967 was celebrated on a substantial scale. The Bank participated actively in Expo 67 and in the Centennial of Canadian Confederation in 1967. The Bank’s 1967 Committee was formed in January 1963, four years before the event. The Bank’s celebrations included scholarships, art exhibits, and a host of civic awards. The Bank also commissioned drawings of every corner of Canada by artist R.D. Wilson. Other plans included postage stamps, silver dollars, pins, new scholarships, a film, and the funding of a Montreal Observation Tower, anniversary dinners and receptions, and special donations. The 150th anniversary was also the year of a new beginning, a new reorganization, and a stunning corporate symbol: the M-Mark (more commonly known as the M-Bar), marking the “spirit of vitality and progressiveness with which the Bank faces the future,” in the words of one memorandum of the era. Publication of the two-volume Canada’s First Bank is the lasting legacy of the 150th anniversary celebration. The author, amateur historian and journalist Merrill Denison, was commissioned in 1955 to write the volumes, which took twelve years to complete (a luxurious time frame considering contemporary timelines!). The volumes showed the generation of 1967 how much the Bank had accomplished in 150 years. While the volumes are very much a tribute to the historical biographical style of yesteryear – even at the time of their

publication – the sheer work involved and the attention to detail are also legacies of the 150th anniversary. Past commemorations remind us of how different, and yet how very much similar, we are to the generations that preceded us. Generation 1967 and Generation 2017 are not so far apart. We are, as a people, an

historical people. We understand its importance. We celebrate our achievements. We use anniversaries not only to mark the past but also to express our enthusiasm for the present and future. We try to learn from that past by embracing what is worthwhile and leaving behind the rest.

The W r it ten W or ld of b m o

35

I

The Task Force Report on the Advancement of Women in the Bank

36

Th e BM O Un iv er se

n the early 1990s, the Bank struck three important internal task forces on the advancement of women and other groups. Under the leadership of President and Chief Operating Officer F. Anthony Comper, the Bank moved to understand and act upon the question of how best to unleash the capacities of people and groups whose talents and potential had not been sufficiently recognized or taken care of in the world of work. The Task Force on the Advancement of Women in the Bank, led by bmo Senior Executive Marnie J. Kinsley, reported in November 1991. Its findings included, for example, that three-quarters of the then-28,000 permanent employees were women, yet they constituted only 9 per cent of executive positions and 13 per cent of senior management. That “dismal” performance, as Tony Comper explained in the preface to the report, was among the best in the banking industry, thus underlining the seriousness of the issue. The landmark report was an unusually candid examination of the perceptions and the realities of contemporary women bankers struggling to move forward in financial institutions. It also served as an important reality check to the Bank’s leadership. The report also began to shape future strategy and the four key recommendations – get the facts out; help employees get ahead; reduce the stress (on women and families); and make it official (and accountable) – was the beginning of a long process toward gender balance in the Bank. The task force also came up with twenty-six action plans that would be implemented in the wake of the report. The report began to change the culture at the Bank over time through initiatives that have sustained the momentum of the initial work in the early 1990s. The Bank’s efforts were recognized by the 1994 Catalyst Award for promoting the advancement of women. Similar task forces followed in the 1990s on Aboriginal advancement, visible minorities, and the employment of people with disabilities. Both of these important reports were inspired by the success and effectiveness of the advancement of women task force.

The 1990 Corporate Strategic Plan

The Plan unleashed an energy and enthusiasm within the Bank that not even the senior leadership was completely prepared for. The framework it laid out very much set the stage for the Bank’s renewal and its achievements during the critical decade of the 1990s.

T

he 1990 Corporate Strategic Plan was perhaps the most important strategic document of its generation. It signalled a major shift in the operational philosophy of the Bank under the new leadership of Matthew W. Barrett (pictured here), successor to W.D. Mulholland. The shift focused on reorienting the leadership, the organization, the operations, and the outlook of the entire Bank organization toward customer service. But this document was rather more than just a reorientation toward customer service. The times demanded that the Bank step up to a transforming operational landscape. The Strategic Plan did just that. It set out a specific vision that focused on renewing the Bank’s commitment to operational excellence and to providing customers with value, service, and high ethical standards. It refreshed commitments to shareholders, employees, and communities in a way that encouraged a sustained engagement with the wider world. The document also set out priority markets in Canada and the United States that ranged from individuals and small- and medium-sized businesses to larger enterprises to corporate and institutional investors. The Strategic Plan was itself a well-planned exercise that involved a wide canvas of executives over every aspect of the business. The process identified what was working and what was not working. The exploration phase examined morale, chain of command, business planning, and even the Bank’s image. The plan that emerged from the research phase then encompassed every aspect of the business and presented “success strategies” for each. Crucially, it also did a few things that were deeply desired and popular within the Bank, such as reintegrating personal and commercial banking.

The W r it ten W or ld of b m o

37

Authorization for Banking in China

T

he authorization to begin branch operations in China was officially announced on 21 December 1994, after months of negotiation. The Bank received approval to open a branch in Guangzhou, capital of Guangdong province. The branch was a Bank first in the People’s Republic of China, although a representative office had been operating since October 1993. The Bank was one of only ten international banks granted permission to open a branch in Guangzhou. The branch was opened on 20 November 1995. Entry into China was a key element in the Bank’s targeted global expansion strategy. bmo ’s presence in Guangzhou, a manufacturing city of 8 million northwest of Hong Kong on the Pearl River, was essentially to help Canadian businesses, especially small- and medium-sized enterprises who were looking to finance trade and investment opportunities in China. “There is an insatiable demand for financing in this region,” explained one bmo official on the ground in China, especially from joint-venture companies and Canadian enterprises wanting to do business in China. The Bank’s move into China in the 1990s and its sustained interest made excellent economic sense. From a trade perspective, China had already become one of Canada’s most promising partners by the mid-1990s. In the five years between the opening of the bmo branch in Guangzhou and 2000, China-Canada trade flows vaulted from $8 billion to almost $15 billion. The Bank’s sustained interest in, and commitment to, the Asia Pacific over the subsequent two decades has been an important hallmark of the Bank’s recent history.

38

Th e BM O Un iv er se

Announcement of the Institute for Learning (ifl )

O

n 1 October 1991, the Bank announced plans to build a $40-million complex in Toronto, Ontario, destined to become the Institute for Learning. The new centre was the only facility in the industry dedicated exclusively to the development of employees, and one of only a few such facilities in the corporate world in North America. Launched by Matthew W. Barrett, the Bank’s ceo and chairman saw this landmark initiative as bmo ’s

reaffirmation “that to be among the best banks in North America, Bank of Montreal must have the best employees in the business.” The new complex would be the physical manifestation of those aspirations – “our strategic plan cast in brick and glass and concrete.” Under the superb guidance of principal architect Raymond Moriyama, the ifl was to have a teaching college of thirteen classrooms, four student lounges, a resource library, a corporate training department, and a presentation hall that could accommodate up to 250 people for all kinds of meetings. The ifl was also to have 150 single sleeping rooms, a dining room, bar, reading room, and fitness facilities. It was estimated

that more than 13,000 employees would visit the centre each year to meet the Bank’s goal of providing five training days for 34,000 employees each year – “a level matched by only a handful of corporations in North America.” The decision to build the centre was a strategic investment decision, according to Barrett. “There are many competing claims on our funds,” he concluded, “but we believe that none is as important as the development of our own people, and none has greater potential to provide a significant return to the Bank in the future.”

The W r it ten W or ld of b m o

39

A Gro w th Business

bmo and Its Canadian Acquisitions

S

uccessful, well-managed banks will typically be confronted by the challenge of the nature, extent, and speed of expansion. Should they grow organically, branch by branch? Should they purchase other, smaller, or less efficient financial institutions in order to achieve immediate results and a ready-made set of branches and assets? There are further considerations that transcend any individual bank. For example, do changing economic conditions in technology, management, or market conditions suggest to bank managers that economies of scale are needed to pursue their business more effectively? Can smaller companies and institutions compete as economies and markets develop? Sometimes, it is not even a question of size or scale, but the ability to innovate and embrace new, lucrative markets.

For the Bank of Montreal, all these questions have come into play in the question of acquiring competitors or other banks. In the real world of Canadian banking, moreover, the decisions to acquire have been more complex than the considerations that economic theory would set out. Sometimes, the motivation was to gain entry into a market. At other times, the reputation of the Canadian banking system might have been at stake in the case of a struggling or failing bank. In that case, the Bank of Montreal as the senior Canadian bank, along with a few of the other established banks, felt a responsibility to ensure the smooth operation and the high reputation of the system itself. Sometimes, the story is straightforward; occasionally, the story of an acquisition is more curious or exciting as Bank of Montreal

managers move to acquire banks as part of a competitive impulse, or to forestall the arrival of unwanted or undesirable players in the market. The mergers featured here take place in two eras: the first is the 1820s and 1830s; the second is between 1900 and 1925. In fact, the last bank to be acquired before the contemporary era was the Molsons Bank in 1925. The Bank’s next major Canadian acquisition would come over sixty years later, with the acquisition of Nesbitt Thomson in 1987. To a greater or lesser extent, the banks featured here have their own histories and trajectories. They have also been part of the Bank of Montreal’s trajectory, making them a notable part of the history of the Bank.

The Bank of Canada, 1818–31

T

he Montreal-based Bank of Canada has the distinction of being the first bank to be taken over by the Bank of Montreal, in 1831. This Bank began life in 1818 as a private enterprise. In 1820, the organizers of the bank petitioned for incorporation. In 1822, the

administration of the colony granted it a charter to conduct business. Canadian banking had only just taken root in the British North American colonies, and so banking establishments were somewhat experimental enterprises, especially in the colonial context. Add to this the untamed and sometimes wildly swinging nature of the colonial economy and you have a recipe for a potentially unstable banking and financial environment. The short lifespan of the Bank of Canada underlines the bad chemistry that can occur between untrained

management, bad markets, and bad luck. The sharp economic contraction of 1825 in the colony and the following depression in 1826 sealed the fate of the first Bank of Canada. The bank was not alone in suffering the consequences of the downturn. It was a blow from which the management could not recover. By 1831, the Bank of Canada discontinued business, with its business taken over the Bank of Montreal, which had been able to weather the storms of the late 1820s more effectively.

A Gro w th Business

43

The Bank of the People, 1835–42

T

he Bank of the People was established in Upper Canada in 1835 and conducted a respectable business in the colony – which is saying something in the tumultuous 1830s. That decade featured a boomand-bust economic cycle and rising political tensions in both Upper and Lower Canada, culminating in the

44

Th e BM O Un iv er se

outbreak of rebellion in 1837–38. In 1838, the Bank of Montreal bought the bank. In 1841, it purchased the bank’s entire capital stock of £50,000 for one main reason: to gain access to the potentially lucrative markets of Upper Canada. After 1823, the Montreal Bank had been prohibited by law from conducting a banking business in the neighbouring colony. Upper Canadians argued successfully that they wanted to favour the development of banking on their own soil, in their own colony. As a growing and successful bank, the management of the Bank of Montreal understood the importance of expansion into the economically promising communities west of the colonial border. Control of the Bank of the People was the way for Montreal capital to be deployed into the communities of Upper Canada. Where politics failed, business succeeded in finding a way through. The union of the Canadas in 1841 brought together what is now southern Ontario and southern Quebec under one administrative and legislative unit. New political arrangements meant that the prohibition against Montreal-based banks conducting business in Toronto, and vice versa, was solved. The Bank of the People had served its purpose and retired as the Bank of Montreal established its first branch in the city of Toronto under cashier and agent William Allan. It was, therefore, from modest, almost borrowed beginnings that the Bank of Montreal’s presence grew in Toronto. In fact, the Bank of the People branch was located at the intersection of King Street and Bay Street – the place where First Canadian Place would rise a century and a half later. (For the Bank’s contribution to the architecture and built environment of Toronto, see A Sense of Place, page 98.)

The Exchange Bank of Yarmouth, 1869–1903

T

he Exchange Bank of Yarmouth was established in 1869 in Yarmouth, Nova Scotia, a seaport town in the southwestern part of the province on the Bay of Fundy founded in 1759 by New England Planters from Yarmouth, Massachusetts. Its claim to fame has been

its location in the heart of some of the world’s largest lobster fishing grounds. In the nineteenth century, however, the lifeblood of the town was its shipbuilding industry. The Exchange Bank of Yarmouth prospered in the ensuing three decades. By the dawn of the twentieth century, however, the problem was how to compete with larger, better-managed banks with superior technology and access to resources. The Yarmouth bankers found a willing purchaser in the Bank of Montreal, which was looking to expand its presence in Atlantic Canada.

By the end of the Yarmouth bank’s tenure, its circulation of notes was approximately $200,000. The Bank of Montreal paid $321,190 for the bank upon the transfer of the assets of the purchased bank on 15 May 1903. The Yarmouth bank had assets of $680,303. The purchse of the Exchange Bank of Yarmouth in 1903 was the Bank of Montreal’s first acquisition in six decades, beginning a wave of mergers and consolidations in the Canadian banking system that would transform the face of the system for decades to come. A Gro w th Business

45

The People’s Bank of New Brunswick, 1864–1907

T

he People’s Bank of New Brunswick, like so many regional banks in Canada, provides us with a good example of the rise of the civic and entrepreneurial spirit in the nineteenth cenutry. The founder of the bank, Archibald Drummond Fitz Randolph, was a Fredericton wholesaler/entrepreneur who established

46

Th e BM O Un iv er se

the bank with $60,000 in start-up capital. “Archie” Randolph’s career was that of railway promoter, serving as treasurer of the Fredericton Railway Company, which succeeded in building a line to connect to the Western Extension railway from Saint John to Maine in 1869. His enterpreneurial drive also propelled him into the insurance business and into gas lighting and lumber concerns. This was in many ways a family bank, since the founder managed the bank until his death in 1902, and his family as principal shareholders sold it to the Bank of Montreal in 1906.

In the early 1900s, the Bank of Montreal management had decided to expand its territory through acquisition of smaller regional banks, which included the Exchange Bank of Yarmouth (1903) and the People’s Bank of Halifax (1905). In 1907, the Bank purchased all the shares of the New Brunswick bank for $350 per share.

The People’s Bank of Halifax, 1864–1905

W

hen banks are prosperous and want to expand, they go shopping. Such was the case with the People’s Bank of Halifax, founded in 1864. The acquisition of the Halifax bank, with its paid-up capital of $1 million and a reserve fund of $440,000, allowed the Bank of Montreal to expand significantly, largely but not exclusively in the Maritimes and in Quebec. For the managers of the People’s Bank, sale was inevitable. In a note to the shareholders on 25 March 1905, the directors wrote that they were “led to take this course in consequence of impending losses, keen competition and the strained resources of the Bank which seem to make it advisable in the interests of the shareholders. Your Directors have found great difficulty in providing for the wants of their customers and keeping the business of the Bank in a healthy condition with the limited resources at their command, while the keen competition of the larger institutions render it year by year more difficult to make profits for the shareholders.” At the time of purchase, the People’s Bank of Halifax operated twenty-four branches, fifteen of them in the Maritime provinces, and a number of branches in southern Quebec. One Bank of Montreal memo suggested that with judicious management, the People’s Bank would become “a source of profit to the Bank of Montreal, while affording increased banking facilities to the mercantile community in Quebec, New Brunswick and Nova Scotia.” The Bank’s acquisition of the Halifax bank allowed the Bank of Montreal in one stroke to become as strong as other major banks in Nova Scotia and New

Brunswick. The price tag was $1.15 million – $138,000 in cash and the rest in Montreal stock (valued at $253 per share). This was considered below market price. In the last year of its pre-takeover operations, the People’s Bank was able to register a profit of $35,655.57.

A Gro w th Business

47

The Ontario Bank, 1857–1906

T

he Ontario Bank was established in 1857. By 1906, it had twenty-two branches in Ontario and Quebec. That year, the Bank of Montreal took over the assets of the Ontario Bank after a general manager, Charles McGill, had invested badly in the stock market and lost $1 million, but not before falsifying the books to cover the mistakes. “The immediate absorption of the Ontario

48

Th e BM O Un iv er se

Bank by the Bank of Montreal,” the Globe suggested, “is a most gratifying proof that our banking system and banking institutions are too strong to be shaken by even the worst effects of personal or corporate delinquencies. Instead of alarmed depositors and panicky noteholders who crowd to the closed doors of embarrassed banking institutions under less stable conditions, we witness the simple transfer of the accounts to the largest and strongest of our chartered banks. The injurious disturbance of commerce and finance which elsewhere attends and follows the forced closing of a banking institution is thus entirely averted, and the business goes smoothly on without a loss or inconvenience to the general public.” The paper went on to suggest that “the highest praise should also be accorded to the president and directors of the Bank of Montreal for their prompt action and assuming all the Ontario Bank’s liabilities to depositors and noteholders.” While the banks had no legal obligation to act, “all chartered banking corporations also feel a responsibility to the business community for the general stability of the fiscal system under which they operate, and are directly interested in maintaining that stability and sustaining unshaken the confidence of the public. The Bank of Montreal has risen to all the demands of this broader responsibility and promptly assuming the liabilities of the Ontario Bank before the nature of its impairment could be known to the general public, and even before the story of its difficulties could obtain general circulation. Simultaneous with the story of personal mismanagement and recklessness has come the announcement that all the liabilities of been assumed, that accounts will be transferred to the Bank of Montreal, and that all obligations will be liquidated with open doors.”

The Newfoundland Savings Bank, 1834–1962

T

he Newfoundland Savings Bank was founded in 1834 and operated a colony-wide savings business from a single branch in St John’s, on Duckworth Street. The savings bank was run as a department of the provincial government until then. Much of the old bank’s business with depositors in the outlying areas of the province was conducted by mail. The Bank of Montreal has had a long and complex relatonship with the Dominion of Newfoundland. In the 1890s, a bank crisis precipitated by a financial downturn compelled the Newfoundland government to invite the Canadian banks into the banking market, chief among them the Bank of Montreal. The Bank thereafter established a close working relationship with the government, becoming government banker in the early part of the twentieth cenutry, opening for business in the same premises occupied by the Newfoundland Savings Bank. It is difficult to overestimate the Bank of Montreal’s persistent influence in the history of twentieth-century Newfoundland in banking and in the government of the Dominion. It is, therefore, not surprising that the Newfoundland Savings Bank was sold to the Bank of Montreal in 1962, adding its $27.8 million deposits and its office to the Bank’s then $3.653 billion on deposit bank-wide. The bank was sold to the highest bidder – the Bank of Montreal paid a shade less than $3 million – after the provincial government of Premier J.R. Smallwood decided that the offers they were receiving were insufficient.

A Gro w th Business

49

T The Bank of British North America, 1836–1918

50

Th e BM O Un iv er se

he Bank of British North America (bbna ) was founded in 1836 under royal charter and had the distinction – and one-time advantage – of being organized and run from London. The bank had a branch network that extended from St John’s in the Dominion of Newfoundland to the principal cities of Atlantic and Central Canada. It was also the first bank to operate in British Columbia. The Bank of Montreal’s takeover of the bbna is a particular case in point on the importance of reputation to Bank of Montreal bankers. By the 1910s, the UKbased board of the bbna found it increasingly difficult

to manage the intricacies of Canadian banking from across the ocean, which can perhaps be considered an operational or practical matter. As early as 1915, in fact, the Bank of Montreal had been receiving representations from the bbna about a possible merger. But Canadian Finance Minister Sir Thomas White poured cold water on the suggestion, informing the Bank that the country would not be friendly to further bank amalgamations. However, the threat of a bbna takeover by Lord Beaverbrook, the Canadian financier Max Aitken, was much more in the realm of reputational risk for Canadian banking, and therefore, acquisition by the Bank of Montreal was approved. From the Bank’s perspective, it would be a shock if Beaverbrook’s plans were carried through to completion. The Beaverbrook strategy seemed to focus on the Colonial Bank, which he controlled, taking over the bbna in anticipation of a merger of Canada and the West Indies. The negotiations for the bbna were long, drawn out, and extensive. The magnitude of the acquisition was significant, and involved a mobilization of administration and a great deal of preparation. It also involved the Canadian government. Finance Minister White was increasingly reluctant to grant any further mergers or acquisitions among Canadian banks or financial institutions as public sentiment had become decidedly uneasy about a perceived lack of competition among banks. By the spring of 1917, the situation had deteriorated so much – from the Bank of Montreal’s point of view, at least – that bmo President Sir Vincent Meredith wrote to White recalling that while in 1915 the “feeling of the country was strongly opposed to such Bank amalgamation unless the Bank to be purchased was nearing financial straits,” he yet felt that the time had come for action. As Meredith explained to the finance minister, more than one reputation was at stake in the deal: those of the bank, the Canadian banking system, and the country. The deal was sealed on 20 March 1918.

The Merchants Bank of Canada, 1861–1922

T

he Merchants Bank got its charter on 18 May 1861, and began business three years later, in 1864, with an authorized capital of $2 million. The bank’s Montreal founders included Hugh Allan, the Hon. Louis Renaud, Harrison Stephens, Edwin Atwater, and other prominent citizens of Montreal. The bank was chartered in 1868 as the Merchants Bank of Canada, absorbing in the process the Commercial Bank of Canada. This Montreal-based bank prospered until after the First World War. The Merchants was credited with being the first Canadian bank ‘to follow the star of empire westward’ and the first to open a branch west of Ontario – in Winnipeg. In the early 1920s, its management got into trouble with investments – a typical story – and in the 1922 annual meeting, the $12.298 million loss was revealed. The cause of the collapse was a large loan to Thornton Davidson, an investment house that failed. In the autumn of 1921, the Bank of Montreal stepped in with an offer to purchase the struggling bank following “wild days of rumours, much excitement on the stock market, and some concern among financial men generally,” according to press reports. The failure of that bank under the presidency of Sir Montagu Allan was ascribed to “adventurous banking carried on by the General Manager” and “transacted without the knowledge of the Directors.” Allan himself was charged with fraud and malfeasance offences but was not committed to trial and escaped any prison sentence. The Bank of Montreal purchased the Merchants Bank of Canada for $1.05 million, equal to $10 per share. The Bank was also granted an increase in its capital stock

to meet the increased circulation requirements of the Bank post-acquisition. The Government of Canada was reluctant to approve the deal on general principles, especially since the wave of mergers in the previous decades had created an impression in the public mind that competition would be unduly restricted. But it was the specifics of the case, and the danger of the collapse of the Merchants itself, that persuaded the Dominion government to acquiesce in the purchase for the safety of the system and to avoid “a condition of alarm concerning our banks generally, which would be prejudicial to the public interests.”

A Gro w th Business

51

T Molsons Bank, 1853–1925

52

Th e BM O Un iv er se

he Molsons Bank was established in 1855 under the provisions of the Free Banking legislation passed in Canada in the early 1850s. The bank’s establishment realized the dream of John Molson Sr that banking should be owned by a family or tight partnership to ensure sound management. The new family bank provided greater financial flexibility to the expanding busines of the Molson enterprises and, in particular, became an important resource to the agricultural community of its day. Its growth throughout the nineteenth century and early twentieth century is testament to this fact. The connection between the Molsons and the Bank of Montreal extends virtually to the latter’s origins, with John Molson’s participation in the management of the young Montreal bank – and eventually its presidency. Thereafter, the family provided business and enterprise expertise on the board fairly consistently for decades. By the mid-1920s, the Molsons Bank had 125 branches in its network, mainly but not exclusively in Ontario and Quebec. The bank’s president, Fred Molson, began discussions with Bank of Montreal director Col. Herbert Molson (who was also his cousin) on the possibility of the larger bank taking over the smaller one. Banking in the 1920s, especially for smaller banks, had become more difficult in the wake of some spectacular failures, including the Merchants Bank and, notably, the Home Bank in Ontario. Bank depositors had every right to be vigilant, since there was no deposit insurance. Bank customers had to assess the risk of investing and depositing in smaller banks in particular, since they could lose their money. The merging of the two banks was made easier by the close ties – social, banking, financial, and otherwise – between the respective managements, and especially between the Molson family and the Bank of Montreal as an institution. The merger was completed in early 1925.

ten Days of Decision

Pivot Points

D

evoting a chapter to particular days that changed the Bank can be a dangerous undertaking, not least because it can raise more questions than it resolves. First of all, why ten? Why days and not months or years? Doesn’t the choice of days themselves suggest something about the way history itself is being viewed? What difference can a day – a mere twenty-four hours, if you’ll forgive the phrase – really make? Why those days and not these much more interesting/ important/consequential days? Some might suggest that we are making some assumptions about organizations in time, that the longue durée is far more consequential than the individual, formal day when something happens. That day can represent merely the culmination of a process, a decision, an event that in itself took months or years to come to fruition. History and

historians constantly are reminding us of the deeper, subterranean processes at work in the making of our history, the tidal forces of global capitalism, nationalism, world wars, and the like. These perspectives allow us to understand that the people of each generation of the Bank of Montreal were not just directing their steps and taking their decisions toward a horizon without a future. Yet there is something intuitive and compelling about focusing on the day. It is a unit of time that is human and easily understandable. Some days stand out – birthdays, anniversaries, deaths, the birth of nations – and for all that, can be no less complex than a longer duration. There is a ‘before’ and an ‘after.’ There is something that binds us to the day, as we live most dramatically in the day. We know that there are good days and bad days, important days, days that flow quickly, and

days that drip slowly on the page. This chapter, therefore, uses these days as points of reference, days that meant something to the past, present, or future of the Bank of Montreal – and sometimes all three. Each day represents a particular moment in time that symbolizes, projects, starts, or ends something. The days chosen here offer us different pieces that form a mosaic of the experience of the Bank. It is by no means comprehensive – only suggestive of some of the major turning points in the life of the Bank. Each Bank of Montreal employee, past and present, will have his or her own perspective on the specific days that changed their institution. In truth, there are likely hundreds of such days that cut across the surface of two centuries. While these chosen barely scratch that surface, they all point to an important aspect of the Bank’s story.

3 NOVE M BER 1817

Open for Business

W

taken up with preparing for the opening, hiring personnel, raising capital, preparing the currency, holding the requisite meetings, and giving the final approvals. The announcement in the Montreal Herald and the Canadian Courant was plain and simple – “without fanfare” as it was once described: “23d October 1817. the bank will begin its operations on monday the 3d of November next. Bank Hours from 10 o’clock a m to 3 o’clock p m . Discount days, Tuesdays and Fridays. Bills and Notes for Discount to be sent under cover to the Cashier on the days preceeding.” It is from these humble beginnings that what seem like ordinary days turn out to be significant in the retrospective gaze of posterity. At the time, however, some humility was perhaps in order: the Montreal Bank was not chartered and, in fact, would have to wait five years for its first official charter. The opening was also something of an exhausted ending as well as a beginning: an ending to the struggle for colonial banking that had taken up the greater part of a quarter century. The Bank’s first offices were on St Paul Street – the main commercial artery of this city of 16,000 inhabitants that dissected the centre from east to west. This was the epicentre of Montreal’s – and Canada’s – commercial awakening in the nineteenth century. The Bank’s premises were very likely comprised of a small door through which one would find a small vestibule leading to a small banking chamber, a fireplace, some high bookkeeping desks, and the then-current equipment of Canada’s first banking venture. Thus began what would become the extraordinary adventure of Canada’s first bank.

e are compelled to go back to the very beginning – to the first day of business – to find the first truly remarkable day in the Bank of Montreal experience. Of course, the Bank was not built in a day. In fact, this day, 3 November 1817, was the culmination of days, weeks, months, and years of struggle by Montreal merchants to establish such an operation in the face of imperial ambivalence about the wisdom of such a project. Much of August and September of that year was

ten Days of D ecision

55

Parliament buildings under construction, Ottawa, Ontario, 1865. Photograph by William Notman

19 NOVEM BER 1863

Canada’s Banker

B

y an Order-in-Council, dated 19 November 1863, the account of the Government of the Province of Canada was transferred to the Bank of Montreal on 1 January 1864. From that date, the Bank acted as the financial agent of the United Province of Canada.

56

Th e BM O Un iv er se

In the past, the Bank of Montreal had acted as a financial agent of the United Province, but the 1863 appointment was in some respects different. The Bank by the 1860s had managed to emerge as the dominant player in Canadian banking, especially after the difficulties and eventual demise of its archrival, the Bank of Upper Canada. This was a critical decade for Canada, with political and economic momentum growing to join the British North American colonies into one political and administrative unit. The Bank’s capital and resources were critical to the operations of the

colonial government in the run-up to Confederation in 1867, and thereafter. The Bank’s leaders, moreover, were deeply involved in the financing of the projects of the new Dominion, not to mention attempts to develop a new banking system for the country. Relations between Bank of Montreal executives and key members of the newly minted Canadian Cabinet, especially Prime Minister Sir John A. Macdonald, were especially close. The Bank also acted as the key Canadian bank in the financing of the Canadian Pacific Railway (1880–85), a project closely allied not only to the Bank but also some of its brightest individual lights – Lord Mount Stephen and Lord Strathcona. The Bank’s capabilities and capital and its establishment in the two great capital markets of the North Atlantic world – London and New York – also led the Bank to later represent the Dominion of Canada’s financial affairs in those capital markets. The Bank acted as financial agent of the Dominion in London well into the 1930s, until the newly established Bank of Canada took over those responsibilities. It was financial agent not only to the Government of Canada but also to myriad provinces, cities, and towns across the vast transcontinental expanse that required financing and representation for their needs in the capital markets of the North Atlantic world. At home, as the senior bank, it acted as the ‘coordinator-in-chief ’ of the Canadian banking system as that system grew and matured across the country. In many ways, then, the Bank of Montreal was ‘Canada’s Banker’ for a vital period in the country’s development, providing capital, resources, expertise, financial talent, and personnel for the great Canadian project. Times change; new players like the Bank of Canada emerge; new challenges and opportunities present themselves. At every stage of Canada’s development, past and present, the Bank has answered the call to serve the country, its communities, enterprises, and individuals with probity and distinction.

15 M ARCH 1870

The Bank at the Centre of Empire – London

T

he establishment of a permanent office in the City of London was a signal achievement for the Bank of Montreal. It was also an important moment in the history of Canadian colonial capital. Of course, the Bank was not only familiar with its principal capital market for decades but also had established a web of close relationships within government and financial circles in the City. Such networks were essential for the Bank’s business and for the financing of Canadian development. Later, the Government of Canada would depend on the Bank’s operations to represent its capital requirements and financial interests in the imperial capital. The day in question, 15 March 1870, was the day that the Bank board granted authority to open an office in London. Premises were leased at 27 Lombard Street, mere yards from the Bank of England, the Royal Exchange, and the Mansion House. The branch later moved to Abchurch Lane, and thence to Threadneedle Street in 1907. The Bank’s operations there were supervised by an “influential local board,” with the “object of developing and extending the British and Foreign trade of the Dominion through the agency of the Bank of Montreal,” commented E.H. King, president of the Bank, at the annual meeting in June 1870. Robert Gillespie Esq., Sir John Lubbock, Bart., Sir John Rose, kcmg, and Brice Hugh Pearse, Esq. were appointed to form a committee to represent and superintend the business of the Bank in London for a remuneration of 300 sterling each per annum. Mr Fred Gundry, formerly second agent in New York was secretary of the committee. The formal establishment of a permanent London presence of the Bank of Montreal was not only a Bank achievement but also a significant achievement for the young Canadian nation as it sought to promote trade, finance its requirements, and embark upon a period of nation-building infrastructure projects. The London office put the Bank of Montreal in the 1870s exactly where it wanted to be: in the centre of the action, acting as an emerging player in the finance of the North Atlantic world.

ten Days of D ecision

57

23 M ARCH 1863

“The Monetary King of Canada” Takes the Reins of the Bank

T

he appointment of Edwin Henry King to the general manager’s position of the Bank of Montreal was perhaps the most significant appointment to leadership in the history of the institution. King’s biographical details are recounted in Determining Destinies, page 15: born in 1828, arrived in Canada in 1850, employed in banking for seven years before arriving at the Bank of Montreal. He quickly ascended the ranks, succeeding David Davidson as general manager on 23 March 1863. He became president on 5 November 1869 and retired in 1873. It is hard to overestimate King’s influence both on the Bank of Montreal and on the Canadian banking system in the key decade of the 1860s. He inherited the leadership of the Bank at a time when its performance and its destiny were anything but clear. He put the Bank’s operations on a much more solid footing, gave it a thrust and a strategic vision that fully exploited the

58

Th e BM O Un iv er se

Bank’s capacities in the financial markets of colonial Canada. He extended and developed the Bank’s links with the New York and London capital markets. Under his leadership, the Bank was able not only to navigate some of the most dangerous challenges it had yet faced, including the US Civil War (1861–65), but also to consolidate its leadership in Canadian banking and exert every possible influence on the formation of the Canadian banking system in the advent of Confederation. While King’s plan for a new architecture of Canadian banking did not see the light of day, his influence on the destiny of the Bank and the Canadian banking system in the dangerous decade of the 1860s is undeniable. As a leader in Canadian banking, King was destined to last but a few short, intense years. His nicknames “The Monetary King of Canada” and “the Napoleon of Canadian Finance” offer clear hints as to how he approached the Canadian banking fraternity of the 1860s. He was aggressive, high-handed, harsh, and arrogant. These qualities also ensured that his career, however brilliant, would be short. But King’s influence, his vision, his performance, and his achievements re-established the supremacy of the Bank of Montreal as a financial institution in the lead-up to, and advent of, the creation of Canada.

11 M ARCH 1935

The Bank of Canada Opens for Business

T

he emergence of the Bank of Canada as the country’s central bank was a key moment in twentieth-century banking history. Canada was one of the last major North Atlantic countries to establish a central bank, since the need for one was hotly contested up until the mid-1930s. In other words: the banking system worked, so what was there to fix? As Canada’s first bank and senior bank, the Bank of Montreal had acted as government banker for decades while the Canadian Bankers Association acted as a coordinating body for the banks alongside the Canadian Department of Finance. Therefore, Bank of Montreal bankers were key protagonists in the debate leading up to the establishment of Canada’s central bank, ensuring that existing institutions and systems that had served Canada well continued to do so. The Depression changed everything: pressure from both domestic and international banking circles, not a little political intrigue, outright imperialist meddling from the Bank of England, and a Royal Commission on Banking and Currency (1933) all led to the establishment of the central bank. The Bank of Canada began life as a shareholder-controlled private institution in 1935, but then in a second phase of developments, new legislation in 1936 put the Bank exclusively in the control of the Canadian government, with the Department of Finance as the sole shareholder. Bank of Montreal President Sir Charles Gordon remarked in the 1934 annual meeting, “Your bank, in common with other banks, has pledged cooperation with the Central Bank, and I think it not unreasonable to expect equal cooperation from that institution.” The appearance of the Bank of Canada represented the definitive end of an era for Canadian banking.

The notes of the Bank of Montreal and others were to be retired ten years hence, and gold holdings were similarly to be transferred to the custody of the Bank of Canada. The net effect was to lessen the earning power of the banks through circulation and the operation of interest-limitation features. The era of Bank of Montreal presidents and general managers appearing on the currency was drawing to a close. As the first deputy governor of the new bank, J.A.C. Osborne, remarked in the late 1930s, “it would only have been human … if the commercial banks did not

exactly welcome the advent of the Bank of Canada.” The Bank of Montreal had served the country as the ‘coordinator in chief ’ of the banking system – successfully – until then. Bankers in the Bank of Montreal, and in the other chartered banks, quickly adapted and, indeed, later welcomed the central bank, and worked closely during wartime and postwar reconstruction to continue to lay the proper foundations of the Canadian banking system as it grew and evolved – a typically Canadian hybrid of public policy, regulation, and private initiative.

ten Days of D ecision

59

13 NOVE M BER 1969

Mechanization in Telecom Nation

B

anking and information control-processing systems have been at the forefront of banking – from the early adoption of methods of information control into the mid-twentieth century to the emergence and diffusion of new technologies in the 1960s and subsequent decades. The relationship of contemporary banking to technological systems are so close, they are virtually indistinguishable. Technologically mediated systems have utterly transformed banking in the last generation, and are set to do so once again in the early twentyfirst century. It all seems so inevitable, does it not? Yet, in each generation, in each era, there are people with choices to make about when to change, what to transform, and how much capital to commit. Timing is an issue and failure is a possibility, especially when you are dealing with a young technology. So it was that in November 1969, the Bank of Montreal made public a massive five-year program to create a continent-wide first in a “computer-based, fingertip banking system.” The system was hailed as the “most revolutionary development in the history of Canadian banking and a world first in terms of its scope.” The object of the initiative was to covert “just about everything we do” to computer operation. The “on-line banking” – a new phrase in the parlance of the day – would be set to free branch personnel to concentrate on customer service and give the bank a capability to offer a whole new range of banking services. The plan had been in the works for at least a couple of years prior to the landmark announcement, and

60

Th e BM O Un iv er se

involved not only the Bank itself but also ibm Canada, Ltd and agt Data Systems Ltd, the country’s largest computer consulting firm, in which the Bank had owned a substantial interest. The new system would connect 1,100 branches via communications terminals linked to a large central computer – the ibm System/360 Model 65 to be located in Toronto. “mech ” as it was known would give the Bank of Montreal the largest banking terminal network in the world. The technological leap forward envisaged by the promoters of mech also looked forward to the day when it would be possible to have a “single bank concept.” As one document from the era suggested, “it will not matter whether a customer uses his home branch or one a thousand miles away. Any teller in the system would be able to cash his cheque.” As R.A. MacDougall, the leader of the project, suggested, “such a system could offer fantastic possibilities for all levels of Management throughout the Bank: by and large, this tremendous fund of information could be regarded as available simultaneously and instantaneously to all of our people.” The possibilities were, quite literally, revolutionary. The complexity and sheer magnitude of the project also stretched the capabilities of the Bank. The success of the project as it rolled out in subsequent years also ushered in a young, new cadre of Bank leaders and executives who were destined to lead the Bank to the threshold of the twenty-first century. Most of all, however, this epoch-making project allowed the Bank of Montreal to effect a technological leap forward in tackling the emerging challenges of contemporary banking. Simplicity in banking in the late twentieth century meant increased dependence on an ever-more complexity of systems to serve the customer.

4 SEPTEM BER 1984

bmo Acquires

Harris Bank, Chicago

“T

he corporate historian delving in to the archives of the Bank of Montreal a few decades from now,” suggested a particularly prescient article in the Toronto Globe and Mail in April 1984, “probably will find that 1984 was a watershed in the institution’s evolution.” The first change was the completion of the Domestic Development Program, which dramatically reorganized personal, retail, and commercial banking in the 1980s. The second epochal change came with the move to acquire Harris Bankcorp, Inc. of Chicago.

On a late summer day in 1984, the day after Labour Day, the Bank of Montreal officially acquired Harris Bankcorp, one of the great Chicago banks – established in 1907 as a bank, but with roots extending as far back as 1882. The Chicago bank became a wholly owned subsidiary of the Bank. Harris ceo Ken West (right, in photo) was a vital partner in the success of the acquisition. With the stroke of the pen of bmo chairman and chief executive officer William D. Mulholland (left, in photo), what emerged was his generation’s greatest strategic achievement. “This transaction gives Bank of Montreal a full operating capability both in Canada and the United States, a status which is probably unequalled by any other bank,” Mulholland remarked at the time. Upon his return, when Canada Customs asked him whether he had acquired anything on his trip to United States, Mulholland replied that he had indeed – a bank!

It was agreed that the Harris organization would continue to operate under its own distinguished name and solid reputations: it had assets of us $7.8 billion and was the thirty-fourth largest bank in the United States. The subsidiary Harris Trust and Savings Bank managed trust assets of us $13.9 billion, ranking seventh in the United States. The September signing had come in the wake of the approval of both boards of directors in October 1983, the approval of the shareholders in January 1984, and the approval of the United States Federal Reserve on 25 July 1984. The price tag for the Harris was us$546.7 million (though news reports suggest us$672.3 million) for 6.66 million shares. The landmark decision was destined to put the Bank on a specific historical path – into becoming a more fully North American bank. The move was also historically fitting: the Bank of Montreal was the first Canadian bank to establish operations in Chicago, opening an agency in 1861. A founding member of the Chicago Clearing House Association in 1865, the Bank was closely associated with the development of the fur and grain trades across the Great Lakes. The banking markets of the Midwestern United States would increase the scope and reach of the Bank’s operations dramatically. As Bill Mulholland told US Banker in June of that year, “Let me suggest to you a great pipe running from north to south through which flows $106 billion in trade a year, total volume and an undetermined amount of transactional items. We have a large apparatus at one end of the pipe … The economic activity between the two countries is so enormous that it is obvious logic to get yourself on both ends of the pipe.” One of the more remarkable elements of the first chapters of the bmo -Harris story was the fact that for a number of years, the Harris continued to have its own board and was managed as a self-sufficient organization. “We do not contemplate any significant changes in the Harris management structure or personnel,” Mulholland reassured at the signing. By the 1990s and 2000s, the process of becoming one bank had begun, and the emergence of a single strategy had emerged.

ten Days of D ecision

61

T 13 AUGUST 1987

The Acquisition of Nesbitt Thomson

62

Th e BM O Un iv er se

he purchase of one of Canada’s most respected investment firms in 1987 was made possible by Canadian government regulatory reforms of the same year that allowed banks to purchase investment houses. This was Canada’s response to “The Big Bang” of global financial deregulation coursing through markets and institutions in the 1980s. The purchase allowed the Bank to deliver a broad range of investment services for the first time across the massive transcontinental branch network. The deal was announced on 13 August 1987 and was to cost $290.9 million for a 75 per cent equity interest in this largest and best-performing investment firm.

Nesbitt Thomson was the product of a partnership between Arthur James Nesbitt and Peter Alfred Thomson, who launched the investment firm in Canada in 1912. The affinity with the Bank of Montreal was more than passing: each had its head offices on St James Street in Montreal. Each institution was a part of that Montreal financial capitalist class that invested in the nation-building projects of the nineteenth and twentieth centuries. The financing of hydroelectric development in particular was a dual strength and commonality. In the 1970s and 1980s, Nesbitt Thomson grew ever closer to bmo management by becoming a principal investment firm in the Bank’s affairs. As W.D. Mulholland remarked at a ceremony announcing the acquisition, “I think all of us were quite impressed with their professionalism and the quality of the advice as well as their performance. I think that was certainly a favour in our judgement that they were the firm we wanted to be associated with, if the world was going to change, so that we would be all in the same business.” The bmo –Nesbitt Thomson deal was an historic one in that it was the first of its kind between a Canadian chartered bank and a Canadian investment firm. Other mergers and acquisitions followed in the industry, but this was the first. The Bank’s large size, capital base, retail distribution network, computer systems, and global operations were nicely aligned with the brokerage’s experience and entrepreneurial skills in the securities industry. The Bank envisioned new markets, especially the personal market where investment and savings products needed a reimagining. The investment people – led by the powerful figures of Brian Steck and Brian Aune – also brought a new culture and a new way of doing things into the Bank that persists to the present day. New people, new capabilities, new markets equalled an important new day for the Bank of Montreal in August 1987. The integration of this Canadian investment institution into the Bank’s growing capabilities, strategic interests, and performance proved to be one of the key days that changed the Bank.

20 NOVEM BER 1996

Commercial Branch Licence Granted in Beijing

F

or at least a century or more, Asia has held a special place in the imagination of Canadian bankers. For Bank of Montreal bankers down the generations, the same could also be said. Beginning in 1962, the Bank had opened operations throughout the region, specifically in Japan, South Korea, Singapore, Taiwan, and Hong Kong. The great desire, and the great market, was China. The Bank’s connections with the Celestial Empire in the nineteenth century grew in tandem with the first great wave of globalization in the 1860s. An incipient global network of banking arrangements and institutions began to draw in distant parts of the globe. By the 1860s, Bank of Montreal drafts were to be honoured in India and China. The development of Vancouver as Canada’s Pacific port, with its connections to the trading empires of the Asia Pacific, provided more and more connections as the times and circumstance allowed. Relations between the contemporary Bank and the People’s Republic of China extended back to December 1960 through the financing of loans for wheat sales – a commodity that accounted for almost all of the ChinaCanada trade in the 1960s. The Bank of Montreal established a full correspondent banking relationship with the head office of the Bank of China in 1963, seven years before diplomatic relations were formally established between the two countries. The pedigree extends back yet further: an emissary of the Bank travelling in 1929 in the “Far East,” as it was then known in Western circles, first recommended that the Bank of Montreal establish itself in Shanghai. The onset of the Great Crash and Great Depression put a temporary end to those fleeting dreams.

Top Bank officials visited China in 1971 and 1975. There followed the establishment of a direct correspondent banking network with the Bank of China in most Chinese cities. In 1983, the Bank opened a representative office in Beijing – a clear runner-up to the day chosen here in terms of its significance to the contemporary and historical presence of the Bank of Montreal in China. A decade later, the Bank opened another office in Guangzhou. The Bank’s China relationships and collaboration in utilities, mining, and other sectors deepened its connection to this rising economic superpower. In 2008, bmo gained yet another licence to operate: this time in Shanghai. On 20 November 1996, the Bank announced that it received approval to open a full-service commercial branch – the first Canadian bank to be granted a full-service licence in Beijing, the first to have two branches in mainland China, and the third North American bank that was granted permission to open a branch in the capital city of China. The announcement was an important step in this long, growing, and mutually beneficial relationship. It was not the only one, before or since. In the two decades since the opening of the Beijing branch, bmo has dramatically expanded its presence in China in multi-faceted ways: through funds management, the selling of derivative instruments, foreign exchange trading through China Foreign Exchange Trade System, and the ability to offer a full range of banking services in local currency. It was the first Canadian bank to establish an investment bank representative office in China. In many cases and initiatives, bmo was either the first Canadian bank to be offered licences into new markets or the sole Canadian financial institution in those markets. In 2010, bmo ChinaCo. was established and approved to transact business in China – a major development. This gave bmo the legal capacity to operate in all the same spaces as local banks. In 2014–15, bmo also played an important role in the establishment of the renminbi (rmb ) hub in Canada.

This development would have major positive and longterm implications for trade. The success of the Bank of Montreal in China has been the work of at least three generations of leaders on both sides of the equation. Since 1960, the senior leadership of the Bank have recognized the key importance of the need for the Bank to work with China. They have made it into a multi-generational long-term commitment. For Chinese bankers, that commitment – and the deep expertise and capabilities of the Bank – have allowed the Chinese banking system to acquire capabilities and expertise while extending their global network of interests.

Matthew Barrett and former prime minister Pierre E. Trudeau at the bmo board meeting in Beijing.

ten Days of D ecision

63

3 NOVEM BER 2017

Crossing the Threshold of Centuries

T

here are obvious difficulties in writing for a day that is yet to come. On 3 November 2017, the Bank of Montreal will cross the threshold of two centuries – it is the reason for this book, the reason for the celebrations inside the Bank, and the motivation to launch a score of initiatives to mark this unique milestone in the life of an important Canadian financial institution. The day will be a day not only to look back but also to look forward to what the future holds. The

contemporary generation of bmo bankers is intensely engaged in navigating a key Canadian and global institution through what appear to be a series of fundamental technological and market transformations affecting both the wider world and specifically the financial system. Business leaders from every walk of life look to the future and see a fourth industrial revolution emerging, in the words of Klaus Schwab. That revolution promises shifts and disruptions, promise and peril. How do organizations adapt? Banking and the architecture of finance have already undergone a serious transformation in the last generation. This new wave of change brings with it a group of innovations that cross physical, digital, and biological worlds. If that future is “marked by the emergence of new business models [and] the disruption of incumbents and the reshaping of production, consumption, transportation

and delivery systems,” banking and finance are central to all these fundamental economic forces. The leaders and the people of the Bank will be looking back and looking ahead on that day. When their future selves look back on 3 November 2017, they will see what you see in this book – generations of bankers who have had to grapple with all kinds of transformations and step up to the mark that the world has created for them. In every great institution, every generation looks ahead and tries to answer the challenge of how to serve their people and their communities in light of new assumptions, new paradigms, and new tools. In this case, the Bank of Montreal has an established track record through 200 years – not a guarantee, not a roadmap, not an excuse to rest, but an inspiration.

Currenc y, C a sh, a nd Leg a l Tender

bmo ’s Richly Denominated Legacy

T

his chapter offers a fascinating look into the history of currency. The Bank of Montreal was the first Canadian bank to issue paper notes. Throughout the nineteenth century and until the end of chartered bank note currency in the early 1940s, the Bank was also the country’s most prominent issuer of notes. Featured here are, quite literally, some of the most consequential and valuable documents ever to have circulated in Canada. They would have also been the most popular, for obvious reasons! Of course, these documents had a specific job to do: currency is a medium of exchange and a store of value. That, however, is only the beginning. The rise of paper currency can tell us a lot about the history of the Bank and the financial system. The bills described here were part of the fabric of everyday life in Canada. Their images depicted personalities, landmarks, allegories, and events.

They were an artefact that was used everywhere, in the city and the countryside, by rich and poor. The bank’s notes represented a fiduciary trust and a promise to pay. The confidence on which it rested depended upon the reputational capital of the Bank and its leaders. In that way, the Bank’s performance and economic prosperity became interdependent. Think also of the Bank’s currency as a system of accountancy bound together by a huge information network that tied the Bank, its reputation, its performance, and, most importantly, its wealth to the community. The currencies you see showcased here encouraged trade and investment; they also calibrated value. Paper notes created an efficient, ordered, and understood way of exchanging. The notes were part of a larger framework of measurement, accuracy, and judgment. The

story of currency, therefore, is how trust draws together people and institutions across time and place. Currency is also an agent of change: the circulation of paper money heralded the arrival of a firmly capitalist society based on trade and exchange. What really attracts the casual observer to these currencies, however, is not what they did, but what they look like. The iconography – the visual images on the bank notes – tell historians a great deal about how previous generations saw themselves. The imagery, the personalities, the icons, the scenes – all telegraph stories about culture, identity, and aspiration. The notes themselves required not only reserves and reputation to be issued but also art, skill, and design to be produced. In addition, the images had to function as a security device in a land where one out of every two bills could be counterfeit. Technical

knowledge, security, complexity, and beauty: the imagery of the Bank’s notes had them all. Surveying this theme highlights examples not only from the Bank of Montreal’s currency but also from those banks folded into the Bank of Montreal over time.

66

Th e BM O Un iv er se

T

his extraordinary note was printed before the Bank began business on 3 November 1817. The first notes were printed in Hartford, Connecticut, where the Bank then obtained the plates, the special bank note paper, and the press required for reproducing the notes in Montreal. With this note issued in autumn of 1817, we are witness to the effective introduction of a Canadian currency and a Canadian system of banking. In this case, the $20 bill was a promise to pay the bearer, on demand, the face value of the note in gold and silver

coins. Here, the reputation of the bank as establishment and of the directors was absolutely paramount. The entire system being tested for the first time rested on a foundation of trust. This note is signed by John Gray, first president of the Bank, and R. Griffin, cashier of the Bank. The centrepiece features a scene of Montreal and its port. The circle in the lower centre features Britannia, trident in hand, the lion at her feet, and a ship on the distant sea over which she rules.

THE PROM ISE TO PAY

The $20 Bank of Montreal Note, October 1817

Cur r enc y, C a sh, a nd Leg a l Tend er

67

CURRENCY IN TURBULENT TIM ES

The $1 Bank of Montreal Note, 1835

68

Th e BM O Un iv er se

T

his note was issued on 1 January 1835 amidst slowly rising tensions in the ethnically riven, politically divided, and economically fragile colony of Lower Canada. Unusually – because of the English basis of the Bank and its directors – a French translation of the promise to pay appears here. Beyond the actual denomination, three images dominate the note. First, on the left, there is a pastoral scene entitled Lower Canada and picturing healthy cattle. At the centre, the

monarch William IV’s portrait lends royal authority to the note. Finally, on the right, a very intent St George, patron of England, slays the dragon, of which (metaphorically speaking) there were many in the colonies of British North America as reform turned into rebellion in 1837–38. The note is signed by Benjamin Holmes, cashier, and Peter McGill, president of the Bank.

T

he Bank of the People had a short but eventful life. Established in Toronto by proponents of the Reform Movement in 1835, it was purchased by the Bank of Montreal in 1840. The reason for the purchase: the Bank wanted to, but could not, expand into what is now southern Ontario because of charter restrictions. This multilingual Eight dollar/Huit Piastre bill also showed its value in pounds sterling, as imperial

currency still dominated much exchange. The amount is also expressed in German (Acht Dollar). The design is rather rudimentary, but some distinctive features emerge: the “8” embedded in an octagonal shape, as well as the Royal Crest prominently displayed in the centrepiece of the note.

TICKET TO UPPER C ANADA

The $8 Bank of the People Note, 1840

Cur r enc y, C a sh, a nd Leg a l Tend er

69

COLONIAL PROGRESS

The $3 Bank of Montreal Note, May 1844

T

his $3/15 shillings bill was issued in May 1844, a testament to the enduring nature of the dualcurrency system of British North America in the pre-Confederation period. You can begin to see the evolution of the notes, with inclusion of information about the Bank: its holdings, capitalization, and reserve, for example. The notes of the 1840s also begin to be more sophisticated, with

70

Th e BM O Un iv er se

idealized female allegorical figures gracing the numerals on the side. In the centre is a woman holding a laurel wreath representing prosperity and probity in business affairs. The images by the 1840s are becoming more intricate, and also more difficult to reproduce. The note is signed by Alexander Simpson, a popular and successful cashier of the Bank (equivalent of chief operating officer) from 1846 to 1855.

T

he Merchants Bank of Canada was established in 1864. This $10 note is from the bank’s first issue (1868–71). It was founded by the Allan family, whose most famous son was Sir Hugh Allan, the ship and railway builder. Years later (in 1922), it was acquired by the Bank of Montreal, whose interests were closely tied to the Merchants’ activities. The straightforward imagery nicely captures the Allan spirit. On the left appears the image of the captain

of a river vessel firmly in command of the destiny of the ship (Lachine Pilot). Pictured in the centre is the 355 St Jacques Street head office, built on the remains of a gunpowder depot and on part of the old wall surrounding the city of Montreal. It later became the headquarters for Nesbitt Thomson, providing another unexpected and later connection to the Bank. On the right is pictured Andrew Allan.

PILOT OF THE WAVES

The $10 Merchants Bank of Canada Note, 1871

Cur r enc y, C a sh, a nd Leg a l Tend er

71

A WESTERN HORIZONS

The $5 Bank of Montreal Note, 1895

72

Th e BM O Un iv er se

s the century drew to a close, currency notes became more sophisticated, more complex in their weave and design, and thus more secure. By this time, the Bank of Montreal had long established its leadership in Canadian banking, with a paid-up capital of $12 million. The figures in the forefront of this 1895 bill are Sir Edward Clouston, general manager, and Donald Smith, later Lord Strathcona. Pictured in the middle of the bill is the coat of arms of the Bank with two First Nations warriors supporting the shield. The beaver on the top of the coat of arms (in the parlance of heraldry, “ensigned upon a log proper”) recalls the past: the fur

trade and the industriousness and thrift of the previous generations. The reverse of the note depicts the Bank’s majestic new office in Toronto, Toronto Main Branch, located at the corner of Front and Yonge streets (1885). The expansion of Toronto, its remarkable economic growth and its rise to prominence, is nicely captured in the decision to feature the Bank’s Toronto branch on the Bank of Montreal $5 note. Today, the building is, famously, Canada’s Hockey Hall of Fame. The building itself is a Toronto rococo-inspired masterpiece envisioned by the Toronto architects Darling and Curry and executed in part by sculptors Holbrook and Mollington. The Bank’s projection of its power and influence in Toronto was unmistakeable: Ohio stone; Corinthian design, with the pilasters inside mythical figures decorating representing Commerce, Music, Architecture, Agriculture, Industry, Science, Literature and the Arts. This was no ordinary five-dollar note!

BANKING ASCENDANCY

The $50 Bank of Montreal Note, 1903

T

his marvelous outsized $50 bill is a beautiful example of the currency engraver’s craft, with Lord Strathcona (Donald Smith) and Sir George Drummond guaranteeing the value of this large-denomination note. The front is black with tints of blue, rose, and gold, while the reverse is black with brown tint. This particular bill was countersigned by James Aird, a career Bank of Montreal manager and, from 1896, the secretary of the Bank. All bills over $50 had to be countersigned by a competent authority. The reverse features images of both the Montreal and Toronto main branches of the Bank. The bill was designed and executed by Waterlow & Sons Limited, London Wall, London, one of the great engravers of currency, stamps, and monetary instruments in the world. Here again, the prestige of the Bank is on full display as its reach spans the principal Canadian centres of commerce. Its imagery also recalls the imperial connection through both Strathcona (who was living in London at that time as Canadian High Commissioner) and the bank note pedigree.

Cur r enc y, C a sh, a nd Leg a l Tend er

73

BARLEY AND BANKING

The $6 and $7 Molsons Bank Notes, 1871

T

he Molsons Bank came into the Bank of Montreal orbit in 1925. The Molson family, however, had a long and illustrious connection to the Bank. When the family decided to strike out into the banking field on their own in 1853, it prospered, focusing mainly on the agricultural community and especially on grain. The Molson brewery, of course, had a more than passing interest in the grain harvest as a key ingredient of its success. The $6 and $7 bank notes are strange artefacts in Canadian banking history. Only one other bank ever

74

Th e BM O Un iv er se

issued $6 bills (La Banque Nationale). Molsons had the distinction of being the only one to issue the $7 bank note; the first were issued in 1871. The question is why those specific denominations? Bearing in mind that, after Confederation, banks were only allowed to issue notes above $4 in value, one explanation offered in the literature is that these allowed the Molsons Bank to increase the circulation of its notes. The more circulation: the more “interest-free deposits” a bank could enjoy. Molsons Bank did not have the size or capacity to use other methods to boost circulation

The notes feature Thomas Molson, cashier, on the left and William Molson, president, on the right. The $6 bill features two beavers building a dam, while the $7 note renders the same idea of the nobility of labour, only with farmers. The reverse features latheworks, counters, and the bank name.

T

he story of banking in the Dominion of Newfoundland in the late nineteenth century and early twentieth is a troubled one. The precarious nature of the staples-led export economy made for a boom-and-bust cycle on the island. As historian of Newfoundland Peter F. Neary memorably put it, “Individually, many Newfoundlanders were skilled and seasoned survivors, but as a people they depended on a precarious export trade, with a narrow range of goods produced in the country’s basic and interconnected industries of fishing, forestry, and mining.” Little cash

changed hands, individual and government debt was high, and the Newfoundland and Labrador economy depended heavily on international markets. The Bank of Montreal became the Newfoundland government`s banker in 1898, four years after a banking collapse. For the first time, Canadian notes could be used in the country. The note featured here is a government-issue 80-cent note, but pay attention to where it is paid: at the Bank of Montreal in St John’s. The Bank`s close involvement with Newfoundland continued and intensified in the decades following.

HARD SCR ABBLE

Dominion of Newfoundland Cash Note, 1902

Cur r enc y, C a sh, a nd Leg a l Tend er

75

ONE L AST NOTE

The $5 Bank of Montreal Note, 1942

O

n 7 December 1942, the last Bank of Montreal note went into circulation, with General Manager B.C. Gardner and President George W. Spinney at their posts on either side of the money. They seem to summon all the gravitas they could command for the moment.

76

Th e BM O Un iv er se

The establishment of the Bank of Canada in 1935 as the country’s central bank had set in motion a series of major changes to the Canadian banking system. A new central reserve bank came with the exclusive right to issue currency against the credit of the Dominion of Canada. The banks did not relent without a fight. But once the decision was made, the Bank of Montreal and its fellow chartered banks made the new system work to face the challenges of wartime emergency and postwar reconstruction. The chartered banks were given ten years to retire their circulation to 25 per cent of their paid-up capital.

New Bank of Canada notes would slowly but surely replace the various bank notes and the old Dominion notes. Further changes to banking legislation ensured that what the professionals call ‘an irredeemable government paper currency’ was complete. Canadians would become accustomed to the image of Queen Elizabeth II ($1 and $20 notes), Sir Wilfrid Laurier ($5), Sir John A. Macdonald ($10), William Lyon Mackenzie King ($50), and, if they were lucky, Sir Robert L. Borden ($100).

Fin a nci a l Innovations a nd Fir sts

T

here are key moments, key innovations in the history of Canadian banking where an innovation has led to a game change. This chapter examines eight such innovations that have changed the face of Canadian banking. Financial innovation can embrace a number of fields. It can focus on banking practices or on credit and lending. It can also embrace concepts such as the arrival of ‘scientific management’ and systematic analysis of financial data in the 1920s, risk analysis and management, and so forth. In

fact, the Bank of Montreal, like most of the major banks of the world, was continuously innovating in one form or another throughout its lifetime in these areas. Here, we take a slightly different approach by examining the much broader trends and innovations that have influenced the business of banking at the Bank of Montreal. The areas of governance, currency, consumer credit, and large technological innovations are featured. Naturally, these eight entries just scratch the surface, but they do

shine a light on the diversity of the sources of innovation in banking and financial institutions. We normally think of innovation as principally technological, yet some of the changes come in structures, or ideas, or new ways of thinking. These innovations have been chosen because of their effects on the way Bank of Montreal bankers and their colleagues in other institutions went about the business of banking, how they adapted to change, and how they evolved to serve nations, markets, and customers.

INNOVATION IN LEGISL ATION

The Bank Act, 1871

T

he Bank Act of 1871 was the first comprehensive legislation passed by the new Dominion of Canada. It set out the organization of the Canadian banking system. The struggle over that legislation – over the questions of currency, gold reserves, and note issue – resulted in a protracted, acrimonious, and at times vicious struggle for advantage in parliamentary

committees between rival banking interests. Original proposals for Canadian banking had, among other things, suggested the establishment of a system of twotiered banks: local banks that would not be allowed to have branches and that would service the immediate community; and the big banks (such as the Bank of Montreal) that would take care of foreign trade and mercantile interests. The struggle over the elasticity and adequacy of the money supply was a particularly sensitive issue in Ontario, and especially among farmers who needed cyclical access to cash around harvest time. When the dust settled, the rules of the game for Canadian banking were set, to be revised every decade according to emerging financial and monetary conditions. The legislation covered the ability for the chartered banks to have a widespread system of branches, to double liability of shareholders, and to issue notes. The need to keep a certain amount in reserves, the lack of a central reserve bank, a prohibition against owning real estate as an investment, the monopoly of government currency for values under $4, and a whole host of other rules and regulations would fence-and-post Canadian banking, giving it its unique character and configuration in banking in the North Atlantic World. The leaders of the Bank of Montreal in the 1860s, like those in every other banking interest in the country, fought hard to shape the system to their bank’s advantage and vision. The Bank Act of 1871, however, was a compromise that set the stage for the successful development of Canadian banking and currency, and gave the public an instrument – Parliament – through which to express the public interest in banking. In many ways, it allowed Canadian banking to adapt itself to the widespread enterprises that banks were organized to serve. Adaptation of banking practice “to the special requirements of Canada” was the Bank Act’s greatest service.

Fin a nci a l Innovations a nd Fir sts

79

INNOVATION IN CURRENCY

The Evolution of the Dollar, 1817–1934

T

he Canadian currency passed through a steady evolution since the establishment of the Bank of Montreal in 1817. The Bank itself, of course, had its own currency, as did other banks, alongside the British

pound sterling and a bewildering array of monetary instruments across North America. Governments also had the right to issue currency in certain lower-value denominations. The question of currency in Canada occupied bankers and legislators consistently from the 1820s to the 1860s. Colonial Canadians periodically debated the most effective way to handle concerns about banking and currency. Questions of money supply and the expansion and contraction of credit, circulation of note issues, and, in general, the control of credit were uppermost in the minds of the currency debaters. For Bank of Montreal bankers, the services that they rendered to the community were dependent on the

stability of the institution, and so a careful approach to monetary and currency policy was typically taken. In 1857, Canada passed legislation requiring that accounts to the provincial government be rendered in dollars and cents – much to the disappointment of imperial authorities, who believed that the Canadians ought to have adopted the pound sterling. With Canada’s first Bank Act in 1871, the new Dominion of Canada moved to a more systematic approach to currency questions, leaving the Canadian chartered banks to issue note circulation above $4, while the Dominion of Canada would circulate the more popular smaller denominations.

INNOVATION IN SYSTE M ARCHITECTURE

The Creation of Canada’s Central Bank, 1935

T

he establishment of the Bank of Canada as the country’s central bank in 1935 was the most important development in Canadian banking in the twentieth century. The establishment of the Bank of Canada came decades, and in some cases centuries, after every major nation in the North Atlantic world had established theirs. However, the absence of a central bank did not prevent Canada from establishing a strong, stable, and successful banking system of chartered banks, maintaining price stability, and avoiding systemic failures. Canada’s senior bank, the Bank of Montreal, acted as government banker and the Canadian Treasury acted as lender of last resort, while the Canadian Bankers

Association (cba ) acted as a coordinating body for the banks alongside the Canadian Department of Finance. The Depression changed everything. Between 1932 and 1936, the idea of establishing a central bank gathered momentum both domestically in political circles and internationally through such gatherings as the International Financial Conference (Brussels, 1932) and the World Monetary and Economic Conference (London, 1933). Canada’s effective decision to move off the gold standard in 1928 was another mitigating factor. In 1933, the Royal Commission on Banking and Currency formally recommended the establishment of a central bank. From there, the Government of Canada drafted legislation, and a central bank was established in 1935 as a shareholder-controlled privately owned institution. In 1936, a second phase of legislation put the Bank of Canada exclusively in the control of the

Canadian government, with the Finance Department as the sole shareholder. Those tumultuous events ended a major era for Canadian banks, and especially the Bank of Montreal, since it was such a prominent part of Canadian government banking. It also began a new era for the chartered banks. The right of chartered banks to issue or reissue their own notes expired on 1 January 1945, leaving the Bank of Canada with sole authority to issue notes. These developments were, in the long run, extremely positive both for the financial system of the country and for the banks themselves, who could then turn to new pursuits and markets. The Bank of Montreal and its counterparts had built a strong Canadian banking system that would be able to make room for public participation through the instrument of the Bank of Canada.

Fin a nci a l Innovations a nd Fir sts

81

INNOVATION IN CREDIT

MasterCard

I

n the late 1960s and early 1970s, Canada was one of the key world markets for the “Interbank Card System” or the charge card system. The only major international bank card system in Canada by the early 1970s was Bankamericard, which was known as “Chargex” to Canadians. It was established in August 1968 and

had 3.2 million cardholders and 50,000 participating merchants in the country. The Bank of Montreal joined the Interbank Card under the name of Master Charge. Together with the Provincial Bank (later National Bank), it entered the credit card market, frankly, belatedly, since the 240,000 Bank of Montreal customers in 1970 who held Chargex cards were clearly telling the Bank their intentions to move into this channel of consumer credit. Once the decision was taken to proceed, the Bank mobilized its considerable technological resources to pilot, test, and introduce Master Charge to Bank of Montreal customers.

In March 1973, Chairman Fred McNeil announced that the Bank of Montreal and the Provincial Bank had chosen Master Charge as their preferred credit card. The Bank opted for Master Charge not least because it was the world’s best-known and accepted all-purpose bank charge card at the time. The revolution in credit was joined in earnest. In 1977, Canadians held 8.2 million credit cards that were used at 27,150 different merchant terminals across the country. They spent $3.1 billion on credit annually. By 2014, Canadians possessed 72 million cards used at 1.4 million merchant terminals for a total of $369 billion spent annually on credit.

INNOVATION IN MOBILIT Y

Instabank/Multi-Branch Banking, 1979

P

resident W.D. Mulholland, addressing the Bank’s annual meeting in 1979, called Multi-Branch Banking “one of the most exciting developments” of the year. “For the first time, any customer of the Bank of Montreal will be able to go into any on-line branch in Canada, make deposits and withdrawals and obtain the balance in his account just as if he were in his own branch.” He added later, “Need I add that this service is not available at other chartered banks.” The introduction of Multi-Branch Banking (mbb ) in 1979 was a major advancement in customer service and convenience. The system used the network that linked on-line branches. It made it possible for customers to conduct personal banking transactions at any of the mechanized branches as if they were dealing with their home branch. Here again, the Bank of Montreal was first to the frontier, leveraging its technological investments to usher in new possibilities for the customer. mbb was also a precursor to the vast expansion in access and convenience to come in the 1980s. Personal account customers at mbb branches have access to their accounts at any other mbb branch. The concept is routine today, but the ability of customers to perform deposits, withdrawals, fund transfers, and passbook updates and procure account information outside of their home branch represented a significant advancement in customer convenience.

Fin a nci a l Innovations a nd Fir sts

83

NET WORK INNOVATION

National Computer Network, 1980

B

y the mid-1970s, some basic decisions had to be taken about the future of the increasingly complex technological data processing systems in the Bank. At the same time, the Bank was taking its first major steps toward the basic realignment of its banking functions. The objectives were clear: the adoption of a structure that would mirror the market and create an organizational environment conducive to the professional development of banking officers. Accordingly, the Corporate Banking Group was established, complete with specialized financing capabilities, especially in world-scale project loans and large internationally syndicated loans. The Domestic Banking Group also reordered its resources. Treasury-related activities were also put on a new foundation. The most urgent question in the technological realm was: convergence or divergence – in other words, whether to move toward integrated worldwide systems or distributed systems. The Bank chose the former path. Years of intensive research and development had given the Bank a unique data processing plant “of a sophistication and size unsurpassed in the North American financial service industry,” remarked W.D. Mulholland in 1981. The centralized database located at the Scarborough and Willowdale computer centres in Toronto were equipped with the fastest commercial computers available at that time. They stored 6 million accounts and had a storage capacity of 280 billion characters. The Bank of Montreal databases were linked by 150,000 miles of telecom lines connecting eight regional data centres and 5,000 branch terminals, automated teller machines, and customer terminals.

84

Th e BM O Un iv er se

In 1981, for example, the data centres were processing over 3 million transactions annually – and, crucially, the entire Bank network was ‘on line’ and operated in real time. Any kind of transaction could be processed instantaneously anywhere a terminal was located. Acquiring this capability was a major milestone in the technological history of the Bank for a few reasons. It empowered the Bank to take full advantage of available technological transformation. It positioned, and kept, the Bank well ahead of the demands upon it from the expanding array of computerized, connected financial services. In other words, the basic system put in place in the early 1980s prepared the Bank for what was coming next. In Mulholland’s prophetic words of 1981, the technological systems of the Bank provided it “with the means to provide service in real time not only beyond the confines of conventional ‘bricks and mortar’ branches, but also beyond the constraints of time, of geography and of currency.” The Bank’s leaders were among the first to see the implications of the borderless nature of the movement of technology, information, and capital.

INNOVATION IN C APITAL AND CONVENIENCE, 1985

I

n the mid-1980s, advances in information technology were enabling exponential growth in the network. In the process, a whole new world of customer convenience and access was unleashed. Instabank was the Bank’s own network. circuit was a Canadian network set up by the Bank and had the distinction of being the first nationwide shared network in the country. The Bank of Montreal was the first Canadian bank to link its abm s to it, and become part-owner of the largest US abm network, cirrus . That network linked automated banking machines in North America, and increasingly around the world – in the mid-1980s, over 11,000 machines. In 1985, the Bank of Montreal became a founding member of Interac, Canada’s shared network linking banking machines across institutions and platforms. The new network suddenly had 3,000 abm s coast-to-coast to allow customers convenient access to their funds. For the first time, customers would be able to access their cash from bank machines around the globe. The electronic payments system that underpinned this emerging network architecture in Canada was the subject of lengthy discussions and negotiations to ensure the orderly development of the system in the country. These networks eventually expanded to include electronic funds transfer at the point of sale – a concept piloted by the Bank in Calgary in October 1989 that allowed Bank of Montreal customers with a “FirstBank” card to purchase goods and services at Calgary-area retail outlets. The instantaneous access to funds and the revolution in convenience offered by cashless transactions depended on the vast, complex networked technological systems that were built in the 1980s. Technological systems, however, are only one part of the equation. Every step of the way, executives had to make choices about how to deploy the technology, its best uses, and how it could allow the Bank to serve the customer.

DAWN OF THE NET

Online Everything, 1995

T

he invention of the World Wide Web by Sir Tim Berners-Lee in the early 1990s and the subsequent development of technologies based on Internet protocol platforms constituted a deep, lasting, and long-wave revolution in information and communication technologies. The advent of the Internet, of course, rested on the technological systems of a generation. In the two decades since its introduction, it has led to a fundamental transformation in how we handle information, buy and sell goods, and interact as individuals, communities, and institutions. The Bank of Montreal was quick to seize the opportunities offered by the dawn of the Net. The year 1995 was the inflection point. The Bank’s first website was launched in January 1995, offering basic information on the Bank and its rates. By 1996, President and coo Tony Comper was talking about 1996 being the “Digital Autumn” – “a time in our history when we are taking one of those critical quantum leaps.” Comper talked about setting the course for the digital future – which included branchless banking, banking by personal computer, and online banking. Here again, the Bank was first to the frontier with the introduction of a virtual banking service, and looking forward to “entering the age of digital banking – of utterly customer-driven, anywhere-anyhow-anytime banking.” The key pillars would include the overall customer experience, satisfaction, ease of use, and privacy and security. The Bank’s most spectacular technological move of the 1990s was to offer full-service banking on the Internet – mbanx – in October 1996. “mbanx is neither a new product nor a new add-on deliver channel,” the Bank announced on 16 October, “but an entirely new virtual banking enterprise designed to meet the needs and realities of time-pressed, financially

86

Th e BM O Un iv er se

active consumers.” It was a bold move, and a visionary one – an Internet-only bank to be headed by Jeffrey S. Chisholm, a bmo senior executive. The concept was a first for North America, let alone Canada. In one stroke it eliminated considerations of geography, time, and territory in banking. The concept was probably before its time, and so suffered the fate of such enterprises. However, mbanx showed that the Bank of Montreal understood the potential of the Internet, and sought to transform the technology to serve the customer. It also showed that the Bank was not afraid to take a risk in pushing the boundaries of the possible in banking. As Canadians and the millions of bmo customers gained access to the Internet, the Bank broadened its offerings, including expansion of online access to applications, accounts, and the whole range of banking

activities. The story ever since has been to continuously upgrade technologies across all banking platforms to offer superior levels of customer experience with access to transactions, financial planning, and expertise. Today, technological transformation in financial services has reached another inflection point as the Bank continues its tradition of building a technological architecture that is competitive and constantly strives to reimagine the customer experience. The dramatic extension of bmo ’s technology capabilities opens up new possibilities for greater speed, lower cost, enhanced risk management, and greater productivity – just as past transformations have done. In other words, by seizing the technological possibilities of a digital future, the contemporary Bank is continuing its legacy of adaptation and leadership.

Speed, Dista nce, Access

bmo ’s First-to-Market Technologies

T

his chapter examines bank technologies from a different perspective. Instead of a look at the range of technologies involved in banking over 200 years, I have selected a few of the technologies that the Bank of Montreal implemented first. For the Bank, being ‘first’ to do something, try something, offer something, or implement something has acquired a special importance down the years. So, too, with technology. Perhaps it is due to the Bank’s permanent status as the first Canadian bank. There is a certain pride for Bank of Montreal bankers to be first. Just in the period since the Second World War, the Bank has been first in a number of innovations in customer service and technology: first drive-in bank (1950), first after-hours depository (1954), first Bancardchek (1967), first to offer equipment leasing applications in its branches (1973), multi-branch banking

(1979), first to offer farm creditor insurance (1980), first to offer telephone banking (1982), first to offer automatic overdraft protection (1983), first premium credit card (Gold MasterCard, 1984), first transborder electronic funds transfer (1985), Electronic Data Interchange (1991), first bank to establish a web presence (1995), first full-service Internet banking with mbanx (1996), first to offer online mortgage adjudication (1997), first in North American wireless banking (1999), first to offer full-service online brokerage (2000), first to offer online fixed-income trading (2001), first Canadian bank to provide banking services in renminbi in Beijing (2006), first bank to offer a registered disability savings plan (2008), first bank to offer a World Elite MasterCard (2010). Twenty-first-century banking is a highly technologized business. Automated teller machines, Internet, and mobile banking are only the

beginning. The office environment is also highly technologized and interconnected. The ability to process and coordinate millions of financial transactions per second across vast territories, markets, and populations has become routine. Both information flows and capital flows have reached dizzying velocities in the contemporary world. Customers banking today have an astounding array of technologies available to them to access and manage their funds. Bank of Montreal has unprecedented technological power at its fingertips to serve the increasingly complex demands of those customers. In the trading world, the astonishing intricacy of that field stems partially at least from the magnitude of the information and communications technology and algorithms that support the business today. One glance at the long line of obsolete (but still remarkably functional) machines in a special

section of the Bank of Montreal Corporate Archives gives testament to the vital role that technology has played in the emergence of banking – and its extension and diffusion. Some are tabulation machines, others count bills, while yet others store or begin to process information. From the earliest days, technology has been entrenched in the activities of Bank of Montreal bankers. Banking is an information-intensive industry – it collects, stores, and processes massive amounts of data. By the dawn of the twentieth century, the Bank of Montreal and other banks began to turn toward the deployment and mechanization of their operations, especially if they were expanding. In fact, banks have been places where significant technological change has taken place. Wave after wave of new technology has allowed the Bank to adapt to change, to expand what it does, and to find ways of doing its work faster, more securely, and more efficiently. For much of the nineteenth century, the ‘technology’ that underpinned all banks was a system of control and coordination that reigned over the organization from the head office through to the retail branches and agencies. An elaborate system of clear, detailed, and highly specified routines, rules, regulations, inspection and audit policies and procedures, as well as the assignment of leadership responsibilities across the network. Rapid access to accurate, up-to-date data was and continues to be essential to the management of the bank. The ledgers acted as the great Victorian databases of banking. By the twentieth century, new technologies changed the face of banking – telephones, typewriters, and a range of information and control

88

Th e BM O Un iv er se

processing technologies from counting to mail handling. The adding machine (1901) was a prominent addition to the world of banking. Accounting machines followed, including ledger posting machines. Later in the century, electromechanical machine technology allowed more centralized ledgers and registers to be kept. The emergence and popularity of cheques promoted further technological changes in banking with the cheque-reading machines. By the 1950s and 1960s, electronic recording machine accounting was being rolled out to record bookkeeping functions. Similar waves of transformation in the 1970s and 1980s began to integrate automatic teller machines and a variety of other expanded services based on information and communication technology, and computer technology began to take centre stage with the advent of Internet-platform-based technologies. The Bank of Montreal has engaged with innovation in every major technological wave in banking. The speed of implementation always depended on many factors – resources, availability, policy, strategy. But constant throughout each era of the Bank’s operation is its understanding that, most importantly, information systems and technological innovations had to be focused on providing operational excellence, administrative precision, and, most of all, a superior customer experience. The half-dozen technological innovations highlighted here are in no way a comprehensive list of technologies. Rather, they represent technologies and innovations introduced first by the Bank – some are famous; some are lesser known outside the Bank. They all, however, made their mark one way or another in the technological transformation

of the Bank. The importance of technology in finance is tellingly evident in this book: you will find technological advancements showing up in other chapters as well.

The Telegraph, 1847

T

he telegraph was the first of the electrical technologies destined to have a significant and complex impact on the business of banking. The Bank’s early investment in the Magnetic Telegraph Company – engaged in building the first telegraph line in the summer of 1847 – consisted of a £2,000 loan secured by the notes of individual directors. As businessmen who understood the implications of the telegraph for control and coordination in banking, branches, and administration, the promotion of the telegraph was understandable. The direct impact of the telegraph on the operations of the Bank of Montreal was dramatic over time. As the

reach of the telegraph expanded, so did the reach of the Bank’s head office. This effectively meant the extension of progressively greater control over branches and the network flows of capital. Importantly, it also facilitated the more direct sharing of banking expertise and the proper execution of strategy. In practical terms, the reduction, or in some cases elimination, of the time lag allowed a more nimble approach to executing buying and selling. There were a few elements at play in the introduction of the telegraph. With Montreal being the de facto Canadian financial capital, its businessmen would naturally want to promote the new technology and make the city a central hub in the incipient network. The unmistakable leader in this enterprise was Hugh Allan, whose telegraph business was part of a developing commercial and industrial empire that embraced steamship, rail, and now telegraphic communication.

(Telephone communication would come later.) By 1850, Montreal Telegraph laid down and operated 500 miles of line throughout the United Province of Canada. By 1860, and under the presidency of Sir Hugh Allan, Montreal Telegraph managed to build a 1,865-mile network of telegraph lines across the southern portions of Canada and some lines connecting into the United States. By 1870, Montreal Telegraph was able to operate almost 12,450 miles of line. Montreal’s supremacy in the telegraph business was assured through the Montreal Telegraph Company’s acquisitions of smaller networks – Toronto, Hamilton & Niagara ElectroMagnetic Telegraph; Montreal and Troy, Vermont, and Boston; and Prescott-Bytown. In 1855, the company also ran the telegraph facilities of the Grand Trunk. The telegraph, therefore, was not just a communications tool but also a key strategic resource in the battle for position between cities and rival interests.

T THE BANK’S ELECTRONIC BR AIN

Semi-Electronic Bookkeeping, 1958

90

Th e BM O Un iv er se

echnological advancements come in various guises and speeds. We focus on the revolutions, but it’s the less-talked-about, incremental shifts – hidden in the back office – that often deserve more attention. In 1958–59, the Bank introduced National Cash Register’s “Post-Tronic” posting machines, putting it in the lead among Canadian banks in the field. It was the first bank in Canada to introduce the technology, and first in the various cities where it deployed the technology in 1959 – Montreal, Toronto, and Calgary. The Montreal installation was not only the first but also the largest such installation in the field of Canadian banking at the time. The machines enabled the Bank to provide faster and more efficient service in posting current-account cheques and deposits. It allowed a “neat and uniform statement” for the customer. The key benefit was the savings in time – posting and checking operations would take less than half the time needed under former methods. The new technology greatly reduced the possibility of human error because of built-in redundancies and fail-safes in the design of the technology. The account numbers and balances were stored electronically on magnetized “memory strips” on the back of the ledger-statement sheets. The contemporary reader may look at this relatively modest advance in bookkeeping and, with the condescension of posterity, gloss over this all-but-forgotten advance. But this innovation, like a few others in this chapter, was part of a process of continuous search, adaptation, and improvement of the key technological systems of the Bank. Technology and operations people in today’s Bank would understand acutely the step-bystep process – the small victories – that allow the Bank to maximize its technological systems to facilitate the work of Bank employees and allow them to focus on the customer.

genie Unleashed, 1963

O

n Canada Day 1963, the Bank breathlessly announced its first fully integrated automatic banking system – and the first one of its kind in Canada. Making “full use of electronic speeds,” the country’s first data processing banking operation combined cheque clearing and ledger posting for many of the Bank’s Montreal-area branches. The heart of genie was the ibm 1419 magnetic character sorter, which was capable of sorting more than 1,600 cheques a minute – an astounding increase from manual methods. The utilization of Magnetic Ink Character Recognition (micr ) numerals (the numbers at the bottom of cheques) was the heart of the system’s machine-reading capabilities. The control panel of the central processing unit of the computer at the genie centre contained electronic circuitry capable of posting 3,000 banking transactions per minute. For the first time, the records of 25,000 individual bank accounts could be kept on a single reel of magnetic tape. The genie centre itself recorded the details of 1.5 million separate accounts by that method. In announcing the “revolutionary system,” VicePresident and General Manager R.D. Mulholland (no relation to W.D. Mulholland) said that the centre was named for the “magical hero of the Arabian nights story of Aladdin and his lamp.” genie stood for GENerating Information Electronically. More to the point, the system would provide faster and more efficient service, enabling the bank to keep current with greater demands for service. “It is not surprising,” one newspaper review suggested, “that the Bank of Montreal has taken the initiative to become the first Canadian bank to provide a fully integrated data processing operation:” the Bank, by 1963, had over 900 branches, 16,000 employees, and 3 million customers. The Bank also had offices in the United States, Great Britain, continental Europe,

and Japan. To keep track of its expansion and serve customers would require close attention to technological innovation. A team of programmers, recruited from within the Bank and trained by the equipment manufacturers, spent eight months writing programs for the launch. Management consultants Booz Allen & Hamilton also assisted the Bank in coaxing genie out of its technological bottle. The Bank was confident, in the words of one report, “that ‘Genie,’ the genial wonder-working giant, will help

to lighten the burden of paperwork that was threatening to engulf it … assuring its customers of faster and more efficient service than ever before.” With genie , the Bank had firmly crossed the threshold into the electronic age, helping to provide Canadians with some of the best systems in the world for handling payments.

Speed, D ista nce, Access

91

Electronic Data Interchange, 1989

I

n September 1989, the Bank of Montreal was the first bank to install the first automated ordering process, along with Telecom Canada. Electronic Data Interchange (edi ) involved computer-to-computer electronic exchange of business documents such as purchase orders, invoices, and payments between two businesses in a public standard or Open Systems Interconnect format. edi targeted the accuracy, efficiency, and timeliness of the 25,000 purchase orders that the Bank issued every year – kind of like a backbone to the delivery of electronic banking services to retail and corporate customers. edi was a response to a range of information management challenges. In other words, here again, technological change was resulting in the elimination of a ton of paperwork. By the 1990s, the Bank of Montreal had become a recognized leader in electronic banking, including edi in the financial community in Canada. It had taken a proactive role in the development, implementation, and evolution of Canada’s financial edi within the Canadian payments system. That leadership extended to cross-border trades. Indeed, Harris Bank in the 1990s was also ranked among the top 10 Financial edi banks in the United States. The fact is that each of these step changes in the evolution of technology in banking took major financial investments in order to make the Bank of Montreal first in the field, and to help sustain its competitive advantage. Like most of its predecessors in this chapter, edi as a technological tool offered a greater strategic control over the vast pipeline of information coursing through the Bank. As one executive put it in relation to edi, it was not so much the technology deployed as the

92

Th e BM O Un iv er se

strategic direction of the corporation. “Decision-makers must look beyond the focus on systems applications and integrations to keep the key strategy and business process in the forefront.” The Bank’s investment in electronic commerce came at a time when corporate managers across the economic landscape saw electronic commerce as a short-term technological fix and not a long-term strategic tool. As the technology became more and more used – and in many quarters, a requirement for doing business with the larger enterprises in the 1990s – the Bank’s first-mover advantage, with its strong grasp and deep experience with edi , conferred a major competitive advantage in the field. As one executive suggested in the mid-1990s, “We’ve probably been one of the leading banks in setting the rules for edi … and if you’re driving, you get the route you want.” Consistently striving to match new technologies with its own and its customers’ evolving and anticipated needs put the Bank in the driver’s seat.

Magnetic Ink Character Recognition and Automated Banking, 1963

M

agnetic Ink Character Recognition (micr ) was a close relative of the genie innovation of the 1960s. “In selecting micr ,” one customer pamphlet suggested, “Canadian, British and United States banks considered many different systems. Major factors in the decision were that micr figures are not only “machine

language.” They’re “people language, too.” micr focused on automated banking of cheques. Encoded cheques would prepare them for fully automated processing, “forerunners of a new era of ‘increased service’ banking for customers of Canada’s First Bank.” With manual methods, cheques needed to pass through twelve to fifteen different pairs of hands, introducing the possibility of error at each stage. This innovation promised a “new high standard of neatness and accuracy in your statements from now on … and furthermore, introduction of these new methods will enable us to keep service charges at minimum levels.” The use of electronic data processing wasn’t just about the efficiency of handling an increasing number

of vouchers; it was also “most advantageous in promoting a firm’s Corporate Image,” suggested one report in 1964. “To date we have obtained excellent publicity … and our competitors are endeavouring to overcome our initial advantage in this field.” The Bank of Montreal still held the advantage, however, since the bank had the most completely integrated system in the electronic data processing field at the present time.” The arrival of several technologies related to automation in banking seemed to have launched a new front in the competition between Canadian banks. The central role of new technologies would ensure that the rivalry would continue into the next generation.

Speed, D ista nce, Access

93

Mobile Banking, 1999

T

he Bank introduced mobile banking in the spring of 1999. bmo customers would be able to move money, check credit card balances, trade stocks, and more through mobile banking. The Bank’s Emfisys Group and 724 Solutions Inc., a software firm, combined forces to offer mobile banking and brokerage to the Bank’s customers. Mobile banking came on the heels of the Internet, which in itself had profoundly affected the way banks reached their customers. The

94

Th e BM O Un iv er se

innovation here was to perceive the combination of wireless and Internet for banking. Work on the concept began in the summer of 1997 and rolled out eighteen months later. Veev was launched in May 1999 and became the first wireless financial services package in North America. The nature, complexity, and pace of technological change by the 1990s had changed significantly. Some of the entries in this chapter were implemented in a more stable, symmetrical environment. By contrast, mobile banking was introduced amidst a classic “gale of creative destruction” represented by the arrival

of the technologies based on Internet protocol. The implementation had to be much more nimble. The rationale was also partly defensive. “Even if it doesn’t generate revenues in the near term, there’s no question that someone else will get into the mobile e-banking and e-brokerage business if we don’t,” suggested Frank Techar, a senior vice-president who was coordinating the project’s business implementation strategy for mobile banking. Techar perceived correctly the overwhelming challenge of technological disruption in financial services: that in the long run, these technologies had the potential to completely transform the entire banking sector and upend established players. Being first to market with an important new technology was a way to combine the transformative power of a new technology with the depth of experience, insight, and professionalism of an adaptive, established player in the field. As senior technology executive Lloyd Darlington suggested to a British audience in 2000, “we have learned the critical importance of moving early and moving fast … We believe … that we were justified in assuming the risks and the aggravation that inevitably come with being first in any market. We have gained a leadership position, experience in a field where experience is scarce, a much deeper understanding of the technology and the market, and growing recognition.” The Bank of Montreal, therefore, could lay claim to at least two North American firsts: the first commercial launch of financial services over a browser-enabled mobile device; and the first multi-device, multi-line of business mobile channel. It later added real-time trading through InvestorLine and the rollout of Harris Bank’s own mobile banking offering in 1999. Those remarks could very well capture the Bank’s entire experience with its leadership in technological innovation: move early, move fast, assume the risk, establish leadership. Of course, no institution can do it every time, but the Bank of Montreal has had a firstclass track record in the field.

A Sense of Pl ace

A National Architectural Legacy

T

he relationship between banking and the evolution of the country’s architecture is a strong and enduring one. Banking halls and branches represent an important element in the contemporary history of architecture. In its main territories – Canada and the US Midwest – the buildings, branches, and agencies connected to the Bank of Montreal have made a continuous, sometimes transformational, and always evolving imprint on the urban landscape. The reasons are not hard to discern, with the Bank’s importance to the economic activity of cities, regions, and nations being perhaps the most important. In the metropolitan landscape, financial districts teem with glassand-steel manifestations of capital. The noble structures of nineteenth- and twentieth-century banking have anchored numerous city centres across the country. Banks also act as important providers of jobs. As people moved to suburbs and

urban areas expanded outward, Bank of Montreal branches followed their customers by establishing their presence in shopping centre malls and along new thoroughfares. In the twenty-first century, new waves of transformation are taking place, driven by technology and inspired by the constantly evolving understanding of the needs of the client. Bank architecture has also made its mark on smaller towns and outposts across the country, driven by demand for banking services from enterprises and the people who work for them. The impact of the Bank’s architectural legacy in its territories has been significant. Banking halls, headquarters, and regional centres as much as individual branches have made their mark on the larger urban fabric through their facades, on the major street corners and in the plazas where the Bank has operated. In concert with the institutions that came after the Bank of Montreal, the impact

on urban architecture has been deep and lasting, from neo-classical architecture to the contemporary skyscraper to the highly technologized branch offices of modern times.

An Evolving Architecture of Service As the following pages show, the architecture of banking has evolved over time, sometimes dramatically. It is an art form constantly in flux. The nineteenth-century temples of finance, such as the Bank’s headquarters at Place d’Armes in Montreal, are wondrous and elegant examples of the period, but they would be inconceivable today. In each generation, several powerful forces are at work in creating the built environment of the Bank. The first consideration is the utility and function of the building for banking. A second consideration is

the needs of the customer and client. A third consideration: the changing nature of the business. A fourth and critical consideration is architectural expression: what message does the Bank want to convey? These considerations are always in a dynamic relationship with each other, to be resolved and expressed by bankers, architects, and builders. Finally, bank buildings have to respond to their broader cultural, social, and economic environment, whether in Montreal, Toronto, or Chicago, or Sarnia, Winnipeg, or Milwaukee. There have been monumental changes in the way the Bank has expressed itself across the generations according to the needs of the era: classic or contemporary, safe or avant-garde, established or upstart. The architecture followed suit and both accompanied and reinforced these changes. For much of its first century, the Bank of Montreal resided in buildings that projected safety, solidity, and security. They were formidable, conventional, conservative. The buildings invited customers into an institution that was not only secure; it was wealthy and connected. By the 1960s and 1970s, security as the prime consideration began to give way to another priority: service. This was in tandem with major changes in the way people perceived money. In the early days of banking, people saw money as a passive physical property. It needed to be protected and slowly accumulated. By the postwar period, more and more people came to see money as something that was in rapid motion. As one historian describes it, the transformation is from money storage to money stores. Customers became less interested in passive saving and more interested in active investing.

96

Th e BM O Un iv er se

The impact of these changes in consumer culture and banking had a major impact on the architecture of banking. The bank was not just a place where you locked away your treasure and visited infrequently. It was becoming a place where your money actively worked for you; where you struck relationships; where connection, transparency, and openness became priorities. The transformation of the office environment over time is striking. Where rank, hierarchy, and function were once prominent, a flatter, more collaborative impulse began to transform the working spaces of Bank of Montreal employees. As the Bank crosses the threshold of 200 years, its relationship with architecture remains in flux as it responds to the changing demands of customers and employees, the transformations of technology, and the shifting ideas of how we think of personal, private, and public capital. The entries in this chapter roughly conform to the three architectural ages of the Bank: classic, frontier, and contemporary.

Classic Age

C ANADA’S C APITAL OF C APITAL

Montreal Main Branch

T

he Bank’s main branch at Place d’Armes is a transformational Canadian landmark. This was the first building in Canada specifically designed for banking purposes. It was completed in 1819 at a cost of £8,750. For three decades, it served as the principal branch and the head office for the Bank. In 1848, it was enlarged

to accommodate the expansion of the Bank’s business. The prominent dome was added in 1904, but the facade has remained the same since the expansion of 1848. The building complex was remodelled and extended in 1905 by the American architectural firm of McKim, Mead & White, which pushed the original building and its extension onto Craig Street (now known as St Antoine Street). In the 1950s, the Bank acquired land immediately to the west to complete the current seventeen-storey structure (with four additional floors below ground). The square in front of the Bank’s main branch is a vital point of reference for the history of the region. Maisonneuve,

who founded Montreal in 1642, fought a decisive battle on that ground. Nearby lived the founder of Detroit, Lamothe Cadillac, and Sieur Dulhut, explorer of the Mississippi River and founder of Duluth, Minnesota. It is here, too, that the Canadian financial system took flight – first in the city, then expanding into region, colony, country, and continent. Directly opposite the Bank is Notre-Dame Basilica, built in 1829. Montreal Main Branch represents a unique architectural contribution to the city and the country on both the inside and outside. Such architecture was clearly meant to evoke the monumental style and solidity of the Bank itself. The main banking room was constructed in the form of a Roman basilica, inspired by Santa Maria Maggiore and San Paolo fuori le Mura in Rome, though with a decidedly different business transacting within! The ceiling is gilded with 350,000 23.5-karat gold leaf sheets. “Certainly no other bank is in possession of such a room,” reported one paper in 1903, “and it is indeed very doubtful if the large American or even English cities can produce its equal either in size, decoration or appointment.” For example, the floor-to-ceiling height in the banking hall was approximately 80 feet, with the Corinthian columns of Windsor green granite resting upon black Belgian marble. A major renovation completed in 1905 made Montreal Main Branch “probably the largest, and architecturally the most monumental, bank building in the world.” Montreal Main Branch has also served as the inspiration for the architecture of many of the Bank’s branches across Canada. The buildings were said to reflect and express the purpose of the occupants. The exterior structures were dignified, majestic, and monumental; the interior impressive, grand, and rich – all hallmarks of the classic banking hall of the previous century. A Sense of Pl ace

97

DOM INION RISING

Toronto Main Branch

T

he Bank’s operations in Toronto began a year after its establishment in 1818 with an agency on Frederick Street. Anxious to conduct business in Toronto but prohibited by then-current banking laws, the Bank of Montreal bought the Bank of the People and ran a banking operation on the corner of King and Bay streets – a corner to which it would return in the twentieth century. That first Toronto office was opened in 1842. In 1845, under the supervision of IrishCanadian architect Kivas Tully, the Bank had a stone building erected on the northeastern corner of Front and Yonge streets. The building served its purpose, but by the 1880s was looking rather ‘retro’ in a neighbourhood where more elaborate, Beaux-Arts-inspired buildings were being built around it. But it was in 1885, at that same corner, that the Bank of Montreal would offer its most impressive contribution to Toronto architecture (until the arrival of First Canadian Place). First, it demolished the old branch. Second, the Bank engaged noted architect Frank Darling to build an impressive new building. Darling and partners were the same architects who designed Convocation Hall at the University of Toronto, the Royal Ontario Museum, and the Art Gallery of Toronto (later Ontario), and a host of other famous buildings. But it was with the Bank of Montreal building – the building pictured here – that his place in the pantheon of Canadian architecture would be secured. The branch at 30 Yonge Street signalled a new perspective in the bank – one that was more self-confident and secure in its prosperity. In Montreal, the Place d’Armes building was undergoing extensive updates and a major facelift; Toronto would get a new building altogether. The

98

Th e BM O Un iv er se

Toronto Historical Board note on the Front and Yonge property calls it “one of the most joyously self-confident buildings ever erected in Canada, perhaps the only building in the Dominion that really exemplifies those feelings … described as ‘The National Dream.’” This building can be interpreted as a new generation of bankers asserting itself. The exterior is scaled for maximum effect. The vast banking hall contained inside completes the effect and was called the “finest

interior of any banking institution in the Dominion” by one contemporary observer. Certain elements recall the Montreal office, while retaining a clear Beaux-Arts look and feel. The Pantheon-inspired dome with vibrant stained glass covers virtually the entire interior space. The building has long since ceased to be a Bank of Montreal branch, but with some major renovations and upgrades it has become the worthy home today of the Hockey Hall of Fame.

THE CIT Y AS FRONTIER

Montreal West End Branch

T

he Bank of Montreal’s West End branch was opened on 10 June 1889 at 950 St Catherine Street West, the first of its kind beyond the majestic Main Branch of the Bank. The building is the work of Sir Andrew Taylor, one of Canada’s founding architects and the intellect behind a number of Montreal buildings, including McGill’s Redpath Library. It was built with sandstone from Scotland, and involved a good number of Scottish settlers, who worked on cutting the stone for this handsome building. Its first manager, D.N. Macpherson, led the branch until his retirement in 1920. He was said to be the most popular bank official in the city. Good leadership and popularity were strong competitive advantages as the Bank began to move beyond its traditional precincts in the old financial district of St James Street. The West End branch is a fine indication of the Bank’s expanding presence and prosperity in the late nineteenth century beyond the core of Montreal’s financial district. In fact, the Bank’s move to the west end was considered a bold ‘pioneer’ move to developing (but not developed) Upper Town Montreal. This was the first office opened by any bank, apart from the Main Branch, in the city of Montreal – the first step in the network of branches covering the city. By the mid-1920s, this was the busiest retail district in Canada. Many of Montreal’s most prominent merchants – many of whom lived and worked in the west end of the city – became lifelong customers of the branch. This included jeweller Henry Birks & Sons and E.M. Renouf of the Renouf Publishing Company, two prominent local merchants. One early patron of the branch noted that the West End branch obtained “most of the Savings Accounts in those days. The Bank of Montreal was the only place where a cautious man felt his money would be safe.”

A Sense of Pl ace

99

DOM INION BANKER

Ottawa Main Branch

T

he Bank’s close relationship with governments began virtually from the establishment of the institution in 1817. The Bank’s presence in Ottawa after Confederation in 1867 took on a particular prominence in its role as government banker, first Canadian bank, senior Canadian bank, and ambassador of Canadian capital in New York and London.

100

Th e BM O Un iv er se

The Bank established a branch in Ottawa – the city’s first bank – in 1842 to serve a local economy dominated by the wood and lumber trades. Ottawa’s designation as the new Canadian capital in the 1860s of course transformed the region. The importance of the city and the close nature of the relationship between the bank and the new government of Canada demanded that its premises be equal to the task. In 1867, the Bank purchased a lot at the corner of Wellington and O’Connor streets, opposite the parliamentary West Block. The building itself was constructed in 1873–74. Later, a small limestone house was built against the southern wall on O’Connor Street to accommodate Bank of

Montreal senior executives and directors visiting the national capital. The building underwent several expansions and renovations over time to accommodate the influx of work and business at the Bank. This was especially true during the First World War when the Bank in one year alone (1917) handled between 5 million and 6 million government cheques. In May 1929, the Bank announced that it would build a major new building in Ottawa to be designed by the architects Barott & Blackader of Montreal. The new building was inspired by a modern interpretation of Greek design in Queenston limestone and Stanstead granite. As the Royal Architectural Institute of Canada Journal reported in 1932, “the Wellington and Sparks Streets facades are heroic size relief panels depicting the future and past of Canada allegorically. Bronze and iron grilles have been used for the large windows at the ends of the building.” The impressive interior featuring a large banking hall – “a traditional temple bank in Modernistic guise” – imparted a more contemporary look to the Bank while at the same time recalling its past. This new building has been called the Bank’s “most noteworthy building project since the … head office enlargement of the turn of the century.” Here again, the Beaux-Arts design inspired Ernest I. Barott, the main architect, to propose a building of “severe, contained, classical composition.” As one observer remarked, “no bank at the time could have asked for a more perfect balance between modernity and tradition than Barott provided with his elegant sophisticated design.” Indeed, the work won the Gold Medal for 1932 from the Royal Architectural Institute of Canada. Today, the building has passed into the hands of the Government of Canada, which, after a $99-million investment, has restored it beautifully to its former glory, expanded it, and renamed it the Sir John A. Macdonald Building. Unveiled in June 2015, the building is now the home for large parliamentary meetings and functions.

WESTERN C APITAL

Winnipeg Main Branch

T

he Bank of Montreal opened its first branch in Winnipeg on 19 November 1877 under the leadership of Campbell Sweeny, the man who opened up the West for the Bank. The city in the 1870s was essentially a long street running from Fort Garry at the mouth of the Assiniboine River to a little north of the market square with a few parallel streets. The main national enterprises represented were, of course, the Hudson’s Bay Company, the Canadian Pacific Railway, and the Bank of Montreal. The first railroad to enter Winnipeg arrived on Dominion Day 1886. From the 1880s, Winnipeg was about to explode with flows of immigration, the seeding of the prairie wheat fields, and the development of the grain trade. Winnipeg presided over and participated in the strong growth of the West – as an entrepôt, distributing centre, and inspection point. The city became the fourth largest manufacturing centre in the country after Montreal, Toronto, and Hamilton. The city surpassed the billion-dollar clearing mark in 1911, a flow that undeniably conferred it the title of financial capital of the Canadian West. The rise of Winnipeg is admirably captured by the monumental Bank of Montreal Main Branch. The building, another in the banking temple style recalling the Roman Parthenon, is situated on the corner of Portage Avenue and Main Street in the heart of the business district. The Bank’s favoured architects, McKim, Mead & White, oversaw the construction of this neo-classicalstyle building. It was built as a three-storey frame structure with granite walls. The exterior is modelled on a Greek temple with Corinthian columns, while the interior recalls a Roman basilica with Ionic columns. The interior is rich in detail, with an impressive 50-foot height to the main banking hall. The ceiling is decorated in gold leaf.

The building’s monumental status in the city reflected Winnipeg’s rapid advance to metropolitan status as much as the Bank’s key involvement in the rising fortunes of the city. Winnipeg’s economic fortunes were also transformed specifically by the proliferation of banking, insurance, and investment institutions that took root in the prosperous soil of this remarkable

city. The building is also a statement of the Bank of Montreal’s engagement with the Prairie West as economic development flourished. The building served both as a main branch and western divisional headquarters until 1971 and has since been used for various functions.

A Sense of Pl ace

101

PACIFIC VISION

Victoria, British Columbia

V

ictoria is not only the provincial capital of British Columbia but was also an important centre for the movement of commercial timber in North America. For most of the twentieth century, lumbering was the predominant industry on Vancouver Island. The city has also had a long-standing tourist trade. The building pictured here is an enlargement of the 1907 Merchants Bank of Canada building in Victoria designed by architect Francis M. Rattenbury (at a total cost of $72,000, or thirty-two cents per square foot!). A major renovation was completed in 1924. The branch is located on the corner of Douglas and Yates streets, with a frontage of 120 feet on Douglas and 49 feet on Yates. The branch has undergone major expansion and renovation on a number of occasions as its connection to the community has grown and evolved and as the business of banking has transformed over the years. The history of the Bank in Victoria begins on not one but two dates: 20 May 1859, with the establishment of the British Bank of North America’s branch (a bank that merged with the Bank of Montreal in 1918), and 1 April 1891, the date of the Bank of Montreal’s opening at 1200 Government Street. In 1859, the city was not yet incorporated. In 1891, it was little more than a small but busy seaport of 17,000 people slowly making its way to its elevated status as one of the most attractive cities in North America. The leader behind the expansion of the Bank into the city was Campbell Sweeny, Victoria branch’s first manager from 1891. Indeed, Sweeny was responsible for establishing agencies in Winnipeg and Vancouver. In his career in Victoria alone, he laid the foundation of eight Bank of Montreal offices in various parts of the city.

102

Th e BM O Un iv er se

MODEL BR ANCH, MODEL CIT Y

Montreal Mont Royal, Quebec

T

he Bank’s Mont Royal office opened at 1625 Graham Boulevard on 1 November 1946, part of the great branch expansion following the Second World War. The branch itself, particularly its position and premises, signals an important change to the way branches were established across Bank of Montreal territory. The building, for example, was a converted restaurant with a residential apartment on the second floor. During the war, it functioned as a local office of the Canadian Red Cross. The Bank’s move into Mont Royal was part of a larger strategy of expansion. The city itself was founded in 1912 as a ‘model city’ inspired by several urban movements – notably City Beautiful, Garden City, and Garden Suburb – of the turn of the century. Originally a compact residential area, the city evolved into an affluent residential district and attracted some major industrial players like the radio electronics manufacturer Canadian Marconi and Canada Flooring Co. – both customers of this branch. The branch grew exponentially in the 1950s and 1960s, prompting renovation and additions to the building. Pictured here is the front of the branch, constructed in Vitrolite, vitreous marble used for the facades of buildings, especially in the Art Deco and Art Modern architecture of interwar America. This unusual building material was extraordinarily versatile. In the United States, it was extensively used to retrofit existing buildings in an effort to modernize the look and feel of Main Street America. In this case, the Bank used the material to put a new face on an old building and to start a new chapter of banking in a rapidly growing, affluent community.

A Sense of Pl ace

103

Frontier Times

T

SPECIAL BR ANCH

Isle Maligne, Quebec

104

Th e BM O Un iv er se

his Bank of Montreal branch was established in December 1952 on Isle Maligne as a sub-agency of the Saint Joseph d’Alma, Quebec, branch, in the heart of the Saguenay district. The Isle Maligne was the site of a massive hydroelectric generating station developed by the Saguenay Power Company, Ltd in the 1920s. The station was a wonder of its day, producing 540,000 horsepower, or 10 per cent of the total electrical energy output of all central stations in Canada. The Isle Maligne was considered to be the gateway to the ‘Northern Empire’ that beckoned north of Lac Saint-Jean. The branch opened at the special request of the Aluminum Company of Canada to accommodate its employees, which totalled around 800. Initially, the branch was open on every second Friday – payday – from 10 a.m. to 3 p.m. for deposit-taking. The publicity for the opening of the branch underlined the attractiveness of the interior of the building and the fact that a staff of three would be on hand to serve customers. This sub-branch was made a full branch of the bmo network in January 1957. Thereafter followed the construction of a more permanent structure that was “the most modern available.” The establishment of the branch was a fairly typical indication of how the postwar Bank was willing to meet the needs of both its enterprise and individual customers in the communities of the Bank’s territory. “Our ambition,” read one newspaper advertisement, “is to furnish the same level of efficient and practical service that Canadians in all walks of life have come to expect from the B of M for the last 139 years.” The fortunes of the district closely matched those of the broader district and its main employer. Although the branch was closed in August 1981, it serves as an important reminder of how the Bank sought to serve new districts, new customers, and new territories.

THE HEART OF THE EASTERN TOWNSHIPS

Knowlton, Quebec

T

his branch was opened on 19 April 1899 as a branch of the Molsons Bank. The original twostorey building also housed the manager’s residence, a fairly typical arrangement of the late nineteenth- and early twentieth-century bank halls in smaller communities. The branch is in the heart of Knowlton, about 60 miles southeast of Montreal on Brome Lake. The village of Knowlton was established in 1821 and thrived as a regional centre for flour processing. The city and county’s beautiful surroundings gradually attracted a wealthy clientele of Montreal businesspeople who built summer homes on Brome Lake. The region is famous for its winter skiing and its bucolic surroundings. Pictured here is an early photo of this modest but attractive branch, with ample parking for customer horse and carriage.

A Sense of Pl ace

105

M ARITIM E ELEGANCE

Mahone Bay, Nova Scotia

T

his bank hall began life as a sub-branch of the People’s Bank of Halifax in April 1900 in Mahone Bay, about 55 miles southwest of Halifax, Nova Scotia. The town was founded in 1754 by Captain Ephraim Cook, who brought the original German settlers to the area. The town is said to have derived its name from pirates infesting the bay and using low-lying craft with both sails and oars sloped slightly back, known in French as Mahonne. The first office on this land was a small storey-and-ahalf wooden building on one side of a dry goods store. In 1905, the Bank of Montreal acquired the People’s Bank and built a new structure in 1911. The arrival of the railway in 1905 connected the region to Halifax and Yarmouth, which had only been reachable by water in the summer and by stagecoach in the winter. The bank served customers principally in the fishing and shipbuilding industries. In fact, there were at least six shipyards operating when the branch opened in 1900. Fishing schooners were plentiful and the West India trade was thriving. Both activities, however, gradually faded into history as shipping gained the upper hand in the regional economy. The branch pictured here was originally built in 1911 on Main Street in the town. Its semi-colonial design and Corinthian pillars project the kind of classic style typically preferred by the Bank in smaller towns. The architectural image is strong, solid, elegant, timeless, and classic, and fits in with the architecture so characteristic of the Maritime region. As one Bank memorandum suggested, “the value of the Bank to the country is not to be measured so much by the amount of capital … as by the security it has given to those who have trusted it, the facilities it has furnished for the exchange and increase of commodities and the assistance it has contributed to the development of the country … everywhere in Canada it is a factor in the life of the community.” The Mahone Bay branch had the distinction of being featured on the cover of the Bank’s 1984 annual report: a tribute to its architectural elegance and symbolic power.

THE QUEEN CIT Y AND HER BANKER

Nelson, British Columbia

B

y the late nineteenth century, the Bank’s network of branches was reaching newly formed cities, towns, and districts across Canada. The Bank arrived in Nelson, “the Queen City of the Kootenays,” in the southern interior of British Columbia in February 1892, five years before the town itself was incorporated. The first manager, A.H. Buchanan, was reputed to have walked 50 miles from Northport, Washington, across the Canada-US border in snowshoes. In his pockets was the necessary capital to start the branch: $11.50. The Bank responded to the urgent call for banking facilities during the early days of the gold rush in Nelson in the 1890s, and was the first to arrive, if only by a few months. Nelson’s main industries in the late nineteenth and early twentieth centuries were mining and forestry, followed later by fruit growing. It also grew as a transportation entrepôt and administrative centre. The city grew to become the most vital distribution point between Calgary and Vancouver. The Canadian Pacific Railway reached Nelson in 1891, and the famous Crowsnest Pass branch of the cpr was completed in 1896, linking the town to markets both east and west. The Bank’s increasing specialization in understanding and serving these sectors in developing communities across the West allowed it to flourish in many such towns. The Bank in this instance very much grew in tandem with the city. The Bank of Montreal branch pictured here was completed in 1900 on the corner of Baker and Kootenay streets and was considered thereafter one of the finest banking buildings in the province. The black-and-white photo does not show it so much, but the construction is of a cream-coloured Washington pressed brick. The

architect combined the Beaux-Arts classicism of the era with a number of engineering innovations such as the use of steel T-beams in place of traditional wooden joists. The stylistic details – decorative scrolls, basreliefs, balustrades, and finials – connected the Bank and the town to a larger movement and context. The importance of the banking hall to the developing towns of the interior – location, position, and the projection of confident permanence – is nicely captured in the construction as much as the details.

The building was designed by Victoria architect Francis Rattenbury, the young designer of the British Columbia legislative buildings. He was the architect of choice in that era for three key Canadian institutions in British Columbia: the government, the Canadian Pacific Railway (for an office building), and the Bank of Montreal.

A Sense of Pl ace

107

BANKING IN NEX T-YEAR COUNTRY

Rimbey, Alberta

108

Th e BM O Un iv er se

T

he Bank’s presence in Rimbey, Alberta, on 17 November 1913 came as a result of the acquisition of the Merchants Bank of Canada, which had established the first banking branch in the town. The town, founded northwest of Red Deer and south of Edmonton in the Blindman River valley, was named after the Rimbey brothers who came from Kansas to Alberta in 1899. The town boasted one store, one post office, a creamery, two livery stables, and two hotels. The beginnings of the branch were as modest as one could imagine, being housed in a portion of a private residence. The town itself only had forty to fifty people, but its economic prospects were sound. The first manager, J.O. Lethbridge, and his assistant lived in a tent for two years – summer and winter – to provide banking services to the community. Lethbridge did, however, have the first motor car in the district (but no garage). By the 1920s, the branch moved into larger premises originally intended to serve as a billiards hall. The building you see here was built in 1928. Rimbey’s development after 1913 was uneven and halting, and oil and gas discoveries were decades away. The early days witnessed development in diversified farming and hog raising. Wheat growing was also important. The Bank’s presence in the region was considered to be an “important contributing factor” to the growth and development of the town and the district. In 1963, the Bank built “new air-conditioned premises” for the branch on the corner of Jasper Avenue and Main Street, just in time for the fiftieth anniversary of the branch. The Rimbey branch experience – the humble beginnings, the struggle, and the architecture – produce a fascinating snapshot of the Bank along roads less travelled, and its engagement with the struggles and successes of a diversity of regions and realities and peoples, yet at once connected to a common enterprise and purpose.

THE FRONTIER

Mayo, Yukon Territory

I

n 1928, the Bank of Montreal opened a branch in Mayo, Yukon Territory – an inland mining town 250 miles from Whitehorse at the confluence of the Mayo and Stewart rivers. This outpost of banking is about as far away architecturally from the bank halls of central Canada as one can possibly get. The notation on the back of the original photograph says that the building is “rather crude looking, but warm and cosy inside.” The Bank’s activities in the heartland of the Yukon Territory were stimulated principally by the mining sector. By the 1920s, the Bank’s specialization in the mining sector had already been established. Silver, zinc, and lead ores have drawn economic development activity to the area for a century. This log cabin branch was closed in 1942, although the Bank has maintained a presence in the Territory matching the evolving needs of the community.

A Sense of Pl ace

109

BANKING ON THE BAY OF HA! HA!

Port-Alfred, Quebec

110

Th e BM O Un iv er se

T

he Bank’s commitment to pushing the frontiers of branch banking in Canada in the 1920s is manifested here in Port-Alfred, Quebec, on the Bay of Ha! Ha! (now called Ville de La Baie). The Bay’s name is said to derive from the francization of the Huron word, “ahaha,” meaning ordinary trail. The Bank established its presence in Port-Alfred in December 1925 in order to provide banking services to this growing community between Chicoutimi and Bagotville. Like so many other Canadian cities and towns of the hinterland, Port-Alfred’s economy depended upon resource extraction. The Sulphite Pulp and Paper Corporation, the Consolidated Paper Co., and a subsidiary of the Aluminum Company of Canada, which owned and operated the deep-water facilities of the harbour, formed the heart of the economy. The history of the branch itself followed the fortunes of the town and its industries. Five years after its opening, in 1930, it was closed. In 1952, the branch was reopened for business, sharing the rented premises with a furniture store, a dentist, and the landlord. In 1962, the Bank entered its own premises as business grew, and to meet the demand for more banking services. The story of the Bank in Port-Alfred demonstrates the sheer range and reach of the Bank’s branch activities across geography and industrial sectors. In its multiple manifestations, the Bank’s presence in small communities, rural regions, and far-flung cities and towns was a response to both need and opportunity. The people who managed and staffed those branches were important pillars of the community, who functioned as local leaders, advocates of the region, and connections to the larger metropolitan centres. In the case of Port-Alfred, Manager Conrad Vanasse was the Bank of Montreal banker with those specific responsibilities in this region. Vanasse was a career banker with extensive experience in the Bank’s Eastern Canadian operations. The modesty of the architecture, therefore, belies a greater story contained therein.

BANKERS ON THE C ARIBOO TR AIL

Williams Lake, British Columbia

T

his branch was opened as a sub-office to 150 Mile House branch on 16 September 1919, and was promoted to a branch in June 1920. The arrival of the railroad – the Pacific Great Eastern – opened up this district to settlement and systematic economic activity. The business of the Bank was transacted in a 10-foot by 10-foot roughboard shack until February 1921. The new office was a one-storey frame building constructed mainly of fir and cedar, joining the provincial government offices and the hospital as the main institutions in the town. Banking on the British Columbia frontier was not a matter for the faint-hearted. In the railway construction

days, once a week a bank clerk took the payroll into town on horseback. On one occasion, the bank clerk readied himself for the long journey with his bag of cash containing $5,000 and several bottles of ‘liquid refreshment.’ By the time he reached Williams Lake, the clerk was the worse for wear, crawling under the counter at the general store to recuperate. When he woke the next morning, he found his money satchel underneath his head, where the townspeople had carefully placed it. The Williams Lake branch underwent renovations and expansion in the coming decades, with a new building being constructed in 1958.

A Sense of Pl ace

111

SERVING THE SUNSHINE COAST

Sechelt, British Columbia

T

he Bank of Montreal established itself in Sechelt, British Columbia, along the province’s Sunshine Coast, in July 1948 with a sub-branch to the Vancouver Branch. The branch conducted business out of this modest small frame building previously run as the telegraph office. Sechelt in the 1940s was primarily a summer resort, with logging and fishing as the principal activities. At the time this picture was taken, Sechelt had about twenty businesses. The Bank considered the area a “progressive community” and, with staff from Vancouver, also established a sub-branch two days a week out of Gibsons Landing. If weather prevented the Bank employees from returning home, local residents readily provided billeting. The Bank upgraded Sechelt to a full branch in 1955, moving to a larger location. In 1965, the Bank completed another round of modernization to accommodate the growth in its business. In 1973, the Bank moved into new quarters at the corner of Cowrie and Wharf streets. The branch stories of the Bank in Sechelt and in communities across its territory is one of nimbly meeting the rising demands for banking services as economies develop and mature. The growth of the Sechelt branch is a case in point: from the simplicity of a small rented premises to a more permanent structure, the constant element is the service.

112

Th e BM O Un iv er se

“A

pril 9 – a bank!” That’s how the Whitehorse Star

reported the arrival of the Bank of Montreal in this small community in southeastern Yukon Territory named for Frank Watson, an American trapper and prospector. “The bank will be located next to the Watson Lake Trading Post … this year has begun with an important and necessary addition to the community.” Until the building was completed, Bank business was conducted from Room 13 in the Watson Lake Hotel. The new 12-foot by 25-foot frame cabin would feature a small counter borrowed from one of the local stores and a portable typewriter obtained from the hotel. As the image suggests, this is very likely the smallest, most northerly, and coldest branch in the network. It

also shows the extent to which the Bank has widened its branch network to embrace the needs of customers and businesses. Watson Lake is just inside the Yukon Territory border on the Alaska Highway. The settlement has been a service centre serving primarily tourists and construction and highway crews, as well as exploratory mining crews operating in the area. It is also the centre of forestry in the area. In 1960, the discovery of large tungsten ore deposits attracted significant interest. The branch was closed in 1978, with the Whitehorse branch of the Bank taking over its activities.

BANKING AT M ILE 635

Watson Lake, Yukon Territory

O

n 12 April 1955, the Bank established a branch from a trailer set up on cement blocks in the Elliot Lake area (in Spragge, to be precise), 20 miles north of the Trans-Canada Highway between Sudbury and Sault Ste Marie, Ontario. In the 1950s, uranium mining drove economic development in the Blind River region and attracted a significant population. The trailer was hauled 500 miles, from London, Ontario, to serve the people of this post-war boom town. The journey took the two-person crew up from Highway 17 to non-existent roads to reach a temporary site on Highway 108 at the base of the Algom uranium mine. Six months later, the mobile bank was transported over a partly constructed road to Elliot Lake. The manager of the day, James B. Emsley, had doubts that the trailer would ever make it, but it did. A lean-to wooden structure was added to the trailer to deal with the flood of new customers – mainly construction workers who flocked to the area. In 1956, the Bank added another wooden shack to cope with the overflow of workers, cheques, and money orders. The Bank became the first commercial institution to establish itself in the community. Shortly after the opening, a payroll destined for the bank was stolen in a holdup while in transit, accelerating plans for a more secure commercial building in the city. In August 1958, the Bank established a “fine modern building” in the downtown commercial area of the city – to the relief of staff and customers! The history of the trailer and its subsequent evolution is a symbolic part of the post-war story of the Bank of Montreal. Its management was ready to strike out in bold new directions in certain fields as the times demanded. Elliot Lake represented a significant opportunity surrounded by practical challenges. The trailer captures a certain attitude and spirit of the Bank in the 1950s.

114

Th e BM O Un iv er se

FUTURE GREATNESS

Elliot Lake, Ontario

GOTHIC TUDOR REVIVAL

Libertyville, Illinois

T

he bmo Harris Bank branch in Libertyville, Illinois, is housed in the Public Service Building at 354–356 Milwaukee Avenue. The building is a Gothic Tudor Revival/ Neo-Plateresque structure officially inaugurated on 17 November 1928. The building was imagined to be an important anchor in a “dream-concept” community of the Bank owner. The exterior is an extraordinary synthesis of English, Moorish, and Asian styles. Moreover, the building was meant to house a number of businesses and establishments. The architecture of the bank is interesting, of course, but the historical interest in the building only begins there. This bank was originally the Libertyville Bank, established by British-American investor and business magnate Samuel Insull. He was also president of Commonwealth Edison Co. and presided over a massive holding company that financed electricity and public utilities. The entire Insull empire collapsed in the 1930s. In the late 1920s, at the height of his power and wealth, Insull commissioned architect Hermann V. von Holst with designing a building to both house Libertyville Bank and function as a promotion for the electric-powered world, Insull’s principal source of power and wealth. Harris Bank acquired the Libertyville Bank well before bmo emerged on the scene in the 1980s. The unique features of the building as well as its origins propelled it into the United States National Register of Historic Places in 1982.

A Sense of Pl ace

115

Contemporary Era

BANKING IN C ARS

Vancouver, British Columbia

I

n September 1949, the Bank received unprecedented national media coverage for the introduction of “Drive-in Banking” at the 10th and Granville (North Side) branch in Vancouver. It was the first drive-in bank in Canada, part of the Bank of Montreal spirit for being ‘first.’

116

Th e BM O Un iv er se

In 1955, the Branch went one further and introduced a “curb-side” teller’s unit to respond to the challenges of parking in the city by “allowing bank customers to carry out simple transactions without leaving their cars.” The “Snorkel Teller” – actually a mechanical arm – would reach out to you in your car. The device was an endless belt that extended from a special control area inside the bank, under the sidewalk, and up into a box a few inches from the car window. The customer could complete a transaction in as little as fifteen seconds. Bank officials also reckoned that the innovation would save about 150 parking spaces in the overall traffic picture. At the time, only the London, Ontario, Bank of Montreal branch could claim such an innovation. The Vancouver Province saw these innovations as “complete and final proof that banks have gone modern.” The article also marvelled at the fact that Manager Harold Whitmore’s desk was made of “freeform Danish teakwood furniture,” a sure sign of post-war modernity. “Just think. You can drive from the office on pay day; cash your cheque; go to a drive-in restaurant for dinner and then on to a drive-in movie; go home without getting out of your car.” The technology was not the only thing keeping up with the times. The manager insisted on being called by his first name, making him “one of the few managers in the country to own but one initial,” a local newspaper reported. The Sun quipped that “You might think a bank is a bank, but when you find one that has dumb-waiters, and loungers for employees, and comfortable chairs for customers, and a manager’s office that permits the public actually to see the boss sitting there keeping track of the income and the outgo, and handsome Danish furniture, and all and all, it is worth writing home about methinks.” The drive-in and curb-side innovations, the Danish furniture, the first-name basis with the manager – these are emblematic of a clean break with the pre-war style of Canadian banking that emerged after 1945. A new generation, impatient with formality and eager to embrace novelty, burst onto the scene.

SHOWC ASE BANKING

Don Mills, Ontario

T

he Bank of Montreal’s Don Mills branch opened in 1955 at 877 Lawrence Avenue East, Toronto, and signalled a deliberate break from the past. With its glass exterior, the bank’s architecture not only fit in with the new Don Mills Development north and east of the Toronto core but was also a sign of changing times in banking. “Showcase Banking is literally what residents of the Don Mills Development in Toronto will boast of once the Bank of Montreal’s eye-catching glass branch there is completed,” one press release gushed. Transparency and customer convenience replaces the

focus on building monuments and emphasizing security over all other priorities. John B. Parkin Associates designed and built the structure for about $100,000. The Canadian Architect in October 1957 asserted that just twenty years previous “the last type of building one might have examined for symptoms of translucence would have been a bank. It says something for modern architecture that it has been able to overcome the reluctance of bankers and the banking public, and their need for an unsubtle symbol of reliability and security, to the point where [the Don Mills branch] could be designed.” The building had a twin in Don Mills, authored by the same architect and commissioned by the Bank of Nova Scotia. In fact, the banks had gotten together to commission a building with similar features “so that costs would not get out of hand.” The enthusiasm of the architects perhaps led them to the conclusion that they were the only driving force behind the major changes in the way banks were

built. Bankers themselves were responding to changes in the way people wanted to interact with their bank. To the architects, this branch and similar others were “in the vanguard of a clarified understanding of the function of bank architecture.” To Bank of Montreal bankers, delighted to be in a new environment in almost every sense, it signalled a bank moving with the times. For customers, the overpowering architecture of the nineteenth century – appropriate for its time and place – would give way to a more friendly and approachable environment that encouraged interaction and relationship. The scale of this change in banking from the early part of the century to the post-war period is hard to exaggerate. When you compare, for example, the Front and Yonge branch (1885) and the Don Mills branch (1955), the radically different architecture speaks volumes of the revolution within banking at the Bank of Montreal and in the entire Canadian banking system.

MODERNIST AND M INI M ALIST

Villa Park, Illinois

T

he bmo Harris Bank branch at 10 South Villa in Villa Park is an astonishing and unusual example of suburban bank architecture. The branch was designed in 1964 for Villa Park Bank by the architectural firm of Hammond & Roesch. Peter Roesch was a student of the modernist visionary Ludwig Mies van der Rohe, the architect who would later design the TorontoDominion Centre in Toronto. As Lee Bey notes in an article on the subject, the vision for this branch was inspired by a Mies design for an Indianapolis drive-in restaurant that was supposed to be built in the late 1940s, but was never realized. The

concept of the restaurant, complete with the steel girders, exterior columns, and open ‘universal space’ was realized by Roesch’s execution of the branch design. The idea of an all-glass bank was increasingly popular in the post-war period as a way of focusing on transparency, openness, and customer confidence. Even in that trend, however, the Villa Park branch stands as a particularly stunning example of architectural vision and expression. The branch has become a major landmark as an important contribution to the built environment of this fine city.

T

his bmo Harris Bank branch in Spring Green began serving customers as the Bank of Spring Green. It was later acquired by Marshall & Ilsley Bank – and thus came into the Bank of Montreal stable. Spring Green was home to one of the greatest American architects, Frank Lloyd Wright. It was here that he had his studio and Taliesin, his estate. This branch at 209 E. Jefferson Street was designed by Wright’s protégé, William Wesley Peters, who kept faith with the Wright style, designing the curvilinear, limestone structure in 1972 and later adding the drive-up annex in 1975. As Wright once said of his métier, “Architecture is life, or at least it is life itself taking form, and therefore it is the truest record of life as it was lived

in the world yesterday, as it is lived today or ever will be lived.” If we apply that insight to this bank’s architecture, we can learn how the original bank desired to shape and be shaped by its wider surroundings and culture in Wisconsin. Peters’s oeuvre included an eclectic range of buildings: Fallingwater, the structure of the Guggenheim Museum, the laboratory tower at Johnson Wax, and the San Jose Center for the Performing Arts in California. Perhaps his most astonishing work was the Pearl Palace, or Kakh-e-Shams, built near Karaj, Iran, for the sister of the last Shah of Iran. Peters is also known for briefly being married to Svetlana Alliluyeva, the only daughter of Joseph Stalin.

ARCHITECTURE IS LIFE

Spring Green, Wisconsin

A Sense of Pl ace

119

CONTINENTAL DESTINY

New York City, New York

T

he Bank of Montreal established its first office in New York in 1859. The agency there has been a vital strategic link for the entire bank, acting as a clearing agent for all the branches in Canada and for London, Mexico, and Paris. It also negotiated loans to brokers against stock exchange collateral securities, purchased and sold foreign exchange and securities for customers, and performed a range of services. It also has been at once a command post and an information-gathering hub for the Bank at the centre of global capitalism. The Bank’s presence in New York from 1859 witnessed a number of moves as business grew and operations expanded. A hundred years later, in 1959, it began its second century in New York City at No. 2 Wall Street. The Bank acquired the building following the merger of the First National Bank with the National City Bank, and occupied the first four storeys and four basements of the structure. The building itself boasted 3.1 million square feet with a facade of polished granite. The building, extending 114 feet along Wall Street and 72 feet along Broadway, was built in 1932. The Bank’s standing among the banks of the world was very much on the minds of the management. The acquisition of the building was accompanied by an extensive and well-considered publicity campaign to promote the Bank’s expansion in New York, linked to the 100th anniversary of its arrival. In addition to the new building, the Bank could also point to other accomplishments. Measured by deposits, in 1958, the Bank of Montreal was the ninth largest in the world. And that year, it was run by the youngest president of those

120

Th e BM O Un iv er se

nine banks: Arnold Hart, age forty-six. In the 1980s, the building was sold after the purchase of the Harris Bank. The Bank then moved to 430 Park Avenue. The site of No. 2 Wall Street is connected to US banking history in a peculiar way: US Vice-President Aaron Burr (1801–05) had a part interest in the property. The connection to Burr is a curious one. He was a sworn enemy of Alexander Hamilton, first secretary of the treasury in the first American administration of George Washington and, more importantly, founder of the First Bank of the United States. The two famously fought a duel on 12 July 1804 wherein Burr killed Hamilton. The famous federalist is buried across the street from No. 2 Wall Street in Trinity Church cemetery.

IN THE LOOP

Chicago, Illinois

T

he headquarters of bmo Harris in Chicago is actually three buildings – built in 1911, 1960, and 1975 – that are connected internally. Each is architecturally significant in its own right. Together, the complex on the corner of Monroe and LaSalle streets constitutes an important address in the Chicago Loop neighbourhood, the city’s financial district as well as the seat of city and county government. The first building, the centre one, was designed by architects Shepley, Rutan and Coolidge and opened on 1 May 1911 as the first permanent home for the Harris Bank organization. These distinguished architects were also responsible for the Art Institute of Chicago (1893) and the Harvard Medical School (1906). One of the distinguishing features of this first major Harris building was the bas-relief lion sculptures on the facade, which established the lion as the symbol of the bank. The central building is flanked by the glass-and-steel towers built in 1960 and in 1975. The architects for both buildings were Skidmore, Owings & Merrill (som ), one of America’s most celebrated architectural firms. The East Building has twenty-three storeys and opened in the same year as Harris acquired the Chicago National Bank. This particular edifice is an early example of the International Style skyscraper that the firm would return to in the construction of the Sears Tower (1973) and, four decades later, 7 World Trade Centre (2008). The West Building was also an som -conceived project that opened in 1975, with thirty-eight floors. One of its distinguishing characteristics is incorporation of a public plaza. This building project was the first in the United States to include a program of commissioned art, including large works by Yaacov Agam and Evelyn Anselevicius, as well as a plaza fountain sculpture by Russell Secrest. It was also the first Harris Bank building to house an automatic teller machine.

A Sense of Pl ace

121

MODERN OUTLOOK

Milwaukee, Wisconsin

T

he building at 770 North Water Street acts as bmo Harris’s Milwaukee headquarters. Marshall & Ilsley (m&i ) Bank was expanding its operations and activities in the late 1960s and opened this building in 1968.

Architects Grassold, Johnson Wagner & Ilsley designed this contemporary twentieth-century concrete tower. Press releases of the day heralded the building as the avatar of a coming “modern Wisconsin,” both for its exterior and interior, which featured “colours common to Wisconsin’s outdoors.” This building’s construction was a symbol of m&i ’s rise to regional banking powerhouse in the 1960s and 1970s, the pride of Wisconsin banking. By 1972, the year of the bank’s 125th anniversary, m&i was second only to First Wisconsin. By the 1990s, it was

number one in the state. Its executives in 770 North Water were looking out toward the national horizon for new markets. The history of the Marshall & Ilsley Bank in the last few years has merged into that of the Bank of Montreal. The current Milwaukee headquarters has become an important nerve centre for the Bank’s expanding Midwestern United States operations. The m&i building is an architectural reminder of the m&i ’s importance to the development of banking in Wisconsin.

THE KING OF BAY

Toronto, Ontario

F

irst Canadian Place, or fcp as it is known to its inhabitants, was built in 1975–76 at the northwest corner of King Street West and Bay Street. The tower was co-developed by Olympia & York Developments Limited, the Bank of Montreal and the North American Life Assurance Company under the supervision of Bregman and Hamann, Architects. At seventy-two storeys, it was Canada’s tallest office tower and the tallest tower in the Commonwealth. In addition, this Ontario headquarters for the Bank was, at the moment of its unveiling, the eighth tallest and the world’s largest (117,000 square feet) bank building in the world. The plans included ample space for shopping and green space in addition to offices. Only two acres of the seven-acre development were to be used for the highrise buildings. The top of the podium was to become a park devoted to public use “with flower beds, pools, fountains, benches and plantings, where the public can escape from the claustrophobia and pressure of the downtown environment.” The marble on the tower was imported from Carrara, Italy, and filled 400 containers, each weighing twenty tons, for the sea voyage to its final destination. The entire cost of the tower was reputed to be in the neighbourhood of $160 million. It was the largest and tallest building incorporating a framed steel tube structural design concept. Plans for fcp in the mid-1970s came with their share of controversy. Some city residents and councillors wanted the old Globe building on the site preserved; others believed that the era of the highrise was over. The developers, however, made the required concessions and negotiations to proceed were concluded. When Pauline McGibbon, Ontario’s

lieutenant-governor, unveiled the cornerstone, she called the project one “designed to serve people rather than overwhelm them … There is no longer room for rampant growth. In this age, planners and builders more and more must look to creating functional, people-oriented structures rather than edifices for personal glamour or glory.” A Sense of Pl ace

123

bm o’s M ost Wa nted

Protecting Your Money

T

he physical security and protection of the wealth of the community has been one of banking’s most vital – and most fundamental – functions. From the very beginning, the physical protection of the gold, specie, notes, legal tender, and more recently, the electronic assets of Canada’s first bank and its customers has been a key preoccupation in all of the Bank of Montreal’s banking activities. People need to feel confident that their money is literally safe before they can think of more productive uses of their capital. Security and stability are the foundation of a successful financial system. This chapter is in some ways a testament to two universal impulses. The first is the persistent desire to get rich quick, and the many ingenious ways criminals have found over time to try to make that happen – sometimes through brute force and violence, sometimes through intricate

plots and conspiracies, and sometimes through attempting to outfox or outsmart humans or technological systems. The impulse to steal is an ancient one; it is also one that constantly finds new and sometimes inventive expressions over time and space. Physical force and violence is the most basic and the most brutal, but it is only one. Counterfeiting bills and notes, kiting cheques, defalcation, and fraud also take their place in the rogue’s gallery. When value and wealth begin to flow more freely, the criminal mind perceives an opportunity. In the highly technologized contemporary era, debit and credit card fraud, skimming, and all sorts of Internetinspired fraud and theft take billions upon billions of dollars from the world’s financial systems. The second impulse is the powerful determination of financial institutions to fulfill a prime directive: to keep your money safe – literally. This

applies equally across all banking institutions, of course, but when you are Canada’s first bank, and you are a leading bank, you take very seriously the responsibility to maintain the highest possible standards of security and protection available. Throughout the Bank’s history, security and protection of money have been fundamental considerations across the Bank’s territory and operations. At the branch level, the response was often physical and visceral: the Bank managers and employees were issued firearms and used them when absolutely unavoidable. Until about a generation ago, banks were central institutions in most communities, repositories of hard-earned and slowly accumulated wealth. Bank robbers were not often shown any mercy by townsfolk. In other cases, branches and head offices had to deal with system-wide issues such as counterfeit notes and corporate-wide security concerns such

as technology-based fraud. Internal audit systems, moreover, kept a close watch on the day-to-day operations of the bank. Organizations in contemporary banking also use their sophisticated systems to mitigate risk through insurance and an elaborate web of protective systems. Coordination and collaboration amongst institutions are also the order of the day in the fight against an increasingly sophisticated enemy. Complete protection everywhere and at all times is an impossible dream, but banks can ensure not only that money and wealth are protected as much as possible but also that the victims of such crimes are taken care of.

126

Th e BM O Un iv er se

The ancient philosophers had it right: the beginning of freedom is to be free from crimes. In the case of the defence of the community wealth vested in the Bank of Montreal, that freedom flowed from the confidence and trust people put in the Bank itself and as part of a Canadian-wide banking system that would protect their money from evolving and multi-faceted threats. The objects featured in this chapter represent an arc of the story of protection over time – designed to keep wealth safe, free flowing in the world, and away from the underworld.

MONEY BEHIND BARS

Teller Cages

T

he evolution of teller’s cages were yet another way bank branches on the front lines attempted to protect their money and their personnel. The twentiethcentury teller cages were typically equipped with a variety of electrical devices, hidden from view and known only to the teller. The cage was part of an overall architecture of security progressively being built into the design of nineteenth- and twentieth-century banks. Such security measures were part and parcel of the idea of reinforcing the security and stability aspect of banking. This approach was, on the one hand, pragmatic because of the security it afforded and, on the other hand, symbolic because such improvements aligned to the generalized approach of banking in this era. Contrast this with contemporary banking, where the emphasis has long been on openness, relationship, and transparency in banking transactions.

b m o’s M ost Wa nted

127

The Safety of Vaults

T

he desire to keep valuables and wealth hidden away and protected has an ancient lineage. The Emperor of Annan was said to keep gold in a large water tank guarded by crocodiles. When he wanted to withdraw gold, the crocodiles were killed, the gold was retrieved, and a new supply of crocodiles was put into the tank. Effective but at the very least impractical! By the eighteenth century in England, treasure chests were initially built of heavy substantial wood, reinforced with iron, and then made entirely of iron. By the nineteenth century, in the United States, modern safes began to be developed, and the idea developed rapidly. The protection of Canadian colonial wealth in the Bank of Montreal began with those eighteenth-century English-style chests. By the mid-nineteenth century, much more substantial wealth and progress in the art of vault building began to change the significance of the vault, making it in effect a building within a building. The Winnipeg Main Branch’s vault in 1912 was the heaviest and most protected vault ever built to that date. It was constructed in three sections, with foundations poured down to the bedrock, and it was isolated from any outside walls. The first section of the vault was a book vault; the second, on the basement floor, was a safety deposit vault; and the third, on the main floor, was used as the Bank’s cash vault. The safety deposit vault was 32 feet long, 9 feet 2 inches wide, and 8 feet high, with the steel in the doors and lining of the vault weighing 250 tons. The outer door of the safety deposit vault was 18.5 inches thick and weighed 18 tons, while the inner door weighed 10 tons. The doors were reinforced with thick layers of carborundum to prevent burning through the door. There were twenty-four solid-steel, 4-inch-diameter, locking bolts on the outer door, and two combination locks on each door. The codes were known only to two officers of the

128

Th e BM O Un iv er se

Bank. Quadruple time locks ensured extra security. Of course, security patrols and “electric protection” were also an indispensable feature of the vault system. An elaborate daily ritual accompanied the opening and closing of the vaults in almost every branch across the Bank of Montreal territory. The construction of new branches or the leasing of new premises – especially after the Second World War – spawned an impressive

documentary record of the specifications for and uses of vaults. The bank vault is the symbol par excellence of the protection that financial institutions afford their customers, keeping wealth in the hands of those who owned it and earned it. Winnipeg was but one example of the fortresses built inside the Bank of Montreal branches.

BULLETPROOF AND ROLLING

Armoured Cars

A

rmoured cars emerged as a natural response to the growing risk of transporting large volumes of wealth from branch to branch. This, of course, has always been a risk since the beginning of banking itself: protecting what is inside from malevolent forces on the outside. Bank robbery is always hell, but this was hell on wheels, adding speed, and an additional layer of risk to transportation. The evolution of the armoured car stretches back to the Wells Fargo stagecoaches of the nineteenth century and railroad ‘treasure cars,’ as well as the armoured vehicles used during the Great War. The mobile fortress began to be deployed in number by the 1920s and followed strict rules regarding construction. Smith Brothers of Toronto was one company that began to specialize in the construction of these special vehicles, customized for clients. One such car in 1924 was described as “made entirely of Special Armoured Steel, walls to be 3/16 gauge, roof and floor to be 12 gauge … Frame-work of body to be constructed of angle iron and all parts well fitted and securely riveted. The body to have such portholes for shooting purpose and in position as requested by customer.” The armoured car has, of course, become an essential feature of transportation in financial services today. The cars themselves have come a long way from their primitive beginnings at the dawn of the twentieth century, with innumerable improvements to the security features as the means to assail them have also grown. It is also frequently an object of fascination among movie producers, an object of desire among criminals, and a key source of protection of your valuables. In fact, armoured cars are much less likely to be the object of theft than bank branches.

b m o’s M ost Wa nted

129

BULLETS, BR ANCHES, AND BANKING

Guns

130

Th e BM O Un iv er se

F

irearms and banks have had a close and sometimes uneasy relationship. Of all the ways of protecting the bank’s money, this was the most potentially volatile. Up until the last generation, bank managers’ standard issue in branches included a revolver or pistol in case the unthinkable happened. In fact, it was less a matter of ‘a’ revolver, but revolvers in quantity. One Bank of Montreal Circular in 1964 suggested that a miminum of two revolvers be on hand for a staff of six persons or

fewer. If the branch was considerably bigger, say, forty staff, then five revolvers were suggested. For the really big branches, it was suggested to keep twenty or more revolvers on hand. The guns were used as protection when money needed to be moved around the city. The rules surrounding the care, maintainence, and use of the revolvers were carefully laid down: always “fully loaded and readily accessible … properly oiled and otherwise kept in order … and out of sight of the general public.” Handling guns in branches was as routine as counting money. Pistol practice was also a routine part of the life of the branch in the twentieth century, with the local police often providing instruction to bank employees. It was “not the wish of the Head Office that women members of the staff hold revolvers” until much later in the century. All guns were recalled by the head office in 1978. One of the many stories about bullets and banking comes from the old Bloor and Bay branch in Toronto, which had a storefront on both streets. Frank Pugh, the manager, saw a car quickly pull up in front of the branch. As he tells it, “While one man waited in the car, three young men climbed out and made a beeline for the branch door. I reached into my drawer, pulled out the gun … and waved it at one of the guys before slamming it onto the desk and glaring at him. I then ran into the line of Tellers, telling them there was a potential hold-up, to slam all their big bills into the waste baskets and then do whatever the robbers demanded.” Fortunately, the robbery never materialized – Pugh’s gun waves made the robbers think twice. The police were called, but apparently made no note of the call. Fifteen minutes later, a branch of the TorontoDominion Bank was robbed. In November 2001, due to federal legislation on firearms, the Bank donated its collection of firearms and shotguns to the Stewart Museum in Montreal (the second largest military museum in Canada). To preserve physical evidence of a striking and little-known aspect of the Bank’s history, two permanently disabled weapons – a revolver and a shotgun – remained with the Bank’s Archives.

PRIVACY, SECURIT Y, CERTAINT Y

The Safety Deposit Box

S

afety deposit boxes within the environment of the vault have provided customers a space of exceptional security and privacy for the most treasured of their belongings: insurance papers, personal effects, wills, share certificates, personal mementos, jewels, and much more. The service, of course, is as old as the Bank itself: the original Articles made clear that the institution could “receive deposits of Ingots of Gold, Bars of Silver, wrought plate, or other valuable articles of small bulk, for safe keeping at the risk of the depositor.” In the Montreal safety deposit vault, a client would be brought down via elevator to the basement floor and proceed to a locked steel grill door where the “keeper of the keys” would allow entry if the client was known. If not known, the client would have to explain his or her business and give proof of identity. The client would then sign in at the manager’s desk, showing the date and hour of the visit. “Saftey Deposit Boxes should not be rented to strangers,” one circular in 1918 suggested, “unless they give the best of references, which can easily be referred to for confirmation, and no one other than those authorized should be given access to the boxes.” After signing in, the client would be ushered into the vault where a “Guard Key” would be inserted into the lock of the respective box and the guard mechanism thrown off. The client’s key would then be inserted, thus completing the dual control system. After taking out the inner tin box containing the stored valuables, the client would retire to one of the “Coupon” rooms to conduct his or her business.

These deposit boxes were not just a matter for the wealthy and their share or bond coupons. Many people of more modest means, but with valuables, used the facilities of the Bank. One keeper of the keys reported that a returned soldier who left Winnipeg in August 1914 with the “Little Black Devils” (Royal Winnipeg Rifles) came in with both keys to his box, which he had rented upon his return from overseas in 1919. In fact, he was like many small investors who, in the wake of Victory Bond campaigns, now had papers and certificates they wished to protect. The soldier’s story is not much different. He worked for the railway in the post-war period. The veteran revealed to the manager the contents of the box: a Military Medal for bravery on the field, a Mons Star, a Victory Medal and Service Medal, and a German Iron Cross that he picked up on the battlefield. But by 1932, he could no longer afford to pay the rent on the deposit box and would have to “give up his box for the sake of a $5.00 annual fee.” The Depression vacated a great many boxes, but the postwar period saw a dramatic resumption of safety deposit box use to protect valuables, especially irreplaceable items and original copies of documentation.

b m o’s M ost Wa nted

131

24-HOUR STRONG BOX

Around-the-Clock Depositories

T

he installation of Around-the-Clock (atc ) Depositories in the 1950s provided an additional measure of security and convenience to the banking public. It increased security by eliminating the risk of loss or theft of cash held overnight on client premises. This small but useful innovation also served to reduce costs by lowering insurance premiums for companies and businesses that up to then had, indeed, kept cash on the premises. Retail outlets such as stores, restaurants, and gas stations – all businesses that had to remove cash from their premises after banking hours – found atc Depositories a marked improvement over previous practices. As the Elora Express reported in June 1958, “The accommodation provided is unlimited and local business people and any who care to use it will find this security they can enjoy any time outside of banking hours much to be grateful for.” The atc Depositories can be seen as part of a larger movement in the post-war period to constantly improve business services to customers. This included expanding payroll handling, investment, safekeeping of securities, bank-by-mail, and traveller services. As one brochure in 1954 enthused, “First Canadian chartered bank to adopt widespread use of after-hours depository, the B of M continues in the pioneering pattern it has followed since it founded the nation’s banking system 137 years ago.”

132

Th e BM O Un iv er se

ENSURING THINGS ADD UP

Inspectors and Auditors

T

he inspection and auditing function within the Bank has been an essential feature of the protection of the Bank’s administration and handling of its operations. Since the first formal inspectors were appointed in the 1850s, this function has ensured that the most stringent possible procedures, and the most efficient ones, have been brought to bear on the branch and head office operations. This perhaps explains why Corporate Audit has acquired a reputation for ensuring that the Bank adheres to the highest standards of administration and operation. One of the most exacting auditors of his generation suggested that the auditor worked with staff but had to be discerning enough to form independent evaluations. “You have to know when to pursue a problem in more depth, and when to drop it. You can never lose your independence or be talked out of things. Co-operation without compromise is the expression I use to describe this fine balance … [and] this is one of the things that makes a good auditor.” Auditors were tasked with examining the bank operations and the efficiency of administration and with reporting the situation to the executive. They were also required to assist managers and officers, especially the younger ones, in the execution of their duties. Every aspect of the banking business came under scrutiny. The auditing function kept pace with transformations in the field, for example, moving to risk-based approaches in the 1980s. Defalcation, fraud, and embezzlement were rare but only part of the overall picture for the Bank of Montreal inspectorate. To be honest, the auditors of the Bank were not exactly popular. The audit team would show up at a branch – unannounced – lock it down, demand the

surrender of keys and instruments of authority, and begin the process of ensuring that all the books were in order, ledgers balanced, securities counted, and liability list prepared. At the departmental level, more notice was usually given, but the methods used were not only pragmatic and useful but also designed to strike the fear of the Almighty into the operations of the Bank! Auditors were exclusively equipped with the “auditor’s purple pencil” (pictured here). Nobody in the Bank was allowed to possess or use this colour pencil except the auditors. Therefore, any writing or notation in that colour (in reality, magenta) bore the authority of the Bank’s audit team. It is likely safe to suggest that magenta was the least popular colour among generations of Bank of Montreal employees! Popularity and efficiency, however, do not always go together. The inspectorate of the Bank was commissioned to submit factual, unbiased reports at all times and to encourage managers and accountants in maintaining proper training sessions for their staff. Some auditors, such as David J. Montgomery, a senior auditor in International Operations, got to travel the world to ensure that the same level of oversight was applied to the Bank’s international operations from the Bahamas to Seoul to London. The reality is that the inspector and corporate audit function provided a comprehensive picture of the Bank’s performance in the multi-faceted and increasingly complex world of banking. R.D. Mulholland, general manager of the Bank in the 1960s, noted “the dependence of the Executive on the independent factual reporting of each Inspector as the Chief General Manager’s personal respresentative.” They were the “eyes and ears of the Bank” inside the organization. The reports were frank and fearless – exactly the kind of report a serious executive would earnestly desire. The result has made and continues to make Corporate Audit a vital and sophisticated element of the Bank’s responsibility to its customers and its own future.

Reward Posters

T

he circulation of reward or wanted posters in nineteenth- and twentieth-century Canada were, quite simply, the most effective communication means that banks and the forces of order had to counteract crime. The poster would be disseminated in the community where the forgeries, counterfeit, or robberies took place. In retrospect, these posters have become not merely conveyers of information but also offer glimpses into the social and environmental landscape of the time. As one can well imagine, crimes against Canadian banks generated a great number of posters. Some of them were quite detailed in their descriptions, as the following reward poster for the arrest of Alexander Allan, forger , attests: Left Montreal on the night of 28th December. He is 40 years of age; about 5 feet 7 inches high; weight 165 pounds, medium stout, good build; sallow complexion, has the appearance of a hard drinker. Medium size moustaches and dark brown whiskers; hair on head in clind [sic] to be turning grey; full blue eyes; regular features; short chubby hands, and wears a plain gold ring on third finger of left hand; quick walker, nervous temperament; usually dresses plainly in dark coat and vest, small stripe pants and derby hat; wore a curb chain and locket suspended from the center of chain; is a pleasant conversationalist; has a slight Scotch accent. If arrested, charge with Forgery, and communicate with JOS. KELLERT Gen’l Supt. Metropolitan Detective Bureau 237 St James Street, Montreal Canada. 31 December, 1888. Some of the posters were issued by the police, while others were issued by Pinkerton’s National Detective

134

Th e BM O Un iv er se

Agency across their agencies. The Canadian Bankers Association (cba ) played a preponderant role in offering rewards leading to the capture of bank robbers. Between 1924 and 1950, the cba had paid rewards aggregating $253,203. Smaller towns were particularly

vulnerable because of the absence of police and the existence of good highways providing means of escape. The reward poster was one of the many instruments in attempting to bring criminals to justice.

GENUINE FR AUDS

Forgeries and Counterfeits

O

f banking’s deadly sins, counterfeiting surely must rank amongst the most pernicious and pervasive. Forgeries and counterfeiting have been around virtually as long as paper money itself. The problem has spanned the entire history of the banking system in Canada, and has cost untold hundreds of millions of dollars. The attempts of banks and the banking system to stay one step ahead of the counterfeiters have never fully succeeded. It has been called a ‘crime of creativity,’ where “the day you think you have the problem solved is the day you have a problem.” Its contemporary equivalent is bogus credit cards and debit cards. Indeed, the problem of counterfeit bills in the 1820s was so great that it commanded the attention of the Lower Canada legislature. The Bank of Montreal reported that its notes were frequently counterfeited, and thence withdrawn from circulation, and that it had “expended large sums in its endeavoures [sic] to suppress and break up gangs of Counterfeiters, and has withdrawn from circulation various issues that have been altered or counterfeited.” The production of counterfeit notes required a high degree of technical skill, an offset prress, and engraved plates. In the later twentieth century, technological advances from photocopiers to scanners and computers made the job much easier. By the early to mid-nineteenth century, the trade newspapers of the day routinely published discoveries of bad or counterfeit bills and their provenance – and the Bank of Montreal was, as a prominent Canadian bank, never immune to the attempt. The monthly journal The National Counterfeit Detector was published in New York for bankers and merchants in the United States and Canada. Banking’s information network had become elaborate, complex, and effective to counter the

counterfeiting menace. The network extended between banks and through organizations right to the teller’s position. The counterfeiting was only the beginning: forgeries, false or bad cheques, and bogus signatures were all part of the cat-and-mouse game with the criminal element determined to separate the bank and its customers from their money. “In recent years,” one Bank of Montreal teller manual suggested in 1965, “losses to the Bank through successful frauds and forgeries have been substantial. These attempts are often very skilful and their defeat calls for the constant vigilance of every teller.”

The art of the bank note got progressively more and more complex, with micro lettering, radial lines, planchettes, and a number of other special features designed to make it as difficult as possible to copy the real notes. But as long as counterfeiting is profitable – and it can be immensely profitable for organized crime – passing off what is false and worthless for what is true and valuable will continue.

b m o’s M ost Wa nted

135

PROVING WHO YOU REALLY ARE

Pinpads and Internet Security

I

n the late twentieth century, the advent of electronic banking initiated a revolution in customer convenience. In 1984, the Bank unveiled the Multi-Branch Banking card and a Personal Identification Number (pin ) for customers to access their accounts across the automatic teller machines. This was based on the magnetic stripe technology originally developed by ibm in the 1960s, which unleashed a world of new possibilities for a number of industries where identification and authentication was important. By the 1980s, the cards and their use had been standardized internationally and regulated by the International Organization for Standardization. Banking technologies were making banking simpler for customers, allowing instant access to multiple accounts – two features that distinguished the Bank of Montreal’s Instabank machine features from that of the competition in the mid-1980s. Protecting customer money had always been coupled with exploiting the possibilities that technologies could provide in the realm of convenience. Customers could now conduct most banking transactions on their own, such as cash withdrawals, making deposits, checking account balances, paying utility bills, tranferring funds, and getting cash advances. The emergence of the Internet and, in particular, Internet banking has added innumerable layers of complexity in order to unlock convenience for the customer. Here again, the security dimensions have rested upon elaborate information technology systems and, it would seem, more than a passing knowledge of one’s mother’s maiden name, favourite pet, and first school attended. The sheer range of transactions now possible from the Internet is impressive and growing every day, at a fraction of the cost these transactions once demanded. Putting that range of instruments into the hands of the customer – individual, small business, large enterprise – has facilitated a wealth of new cost savings and possibilities. Revolutions in convenience have typically meant parallel revolutions in protecting the wealth entrusted in the bank.

In Hoc Signo

200 Years of Royal Arms, Logotypes, and Trademarks

T

he Latin In Hoc Signo means “In this sign,” part of the phrase “In this sign you shall conquer,” which tradition traces back to Constantine the Great. The symbols and icons of the Bank of Montreal are among the most recognizable and most important design elements in Canadian history. The symbols – the seals, arms, and logos – tell a sometimes-complex story. Used as a significant system of communication, they embraced many different kinds of media – seals, letters, pins, coins, paper currency, and architecture, to name a few. The iconography of the Bank was its signature. Its symbols came to project authority, confidence, trust, and permanence. In the nineteenth to mid-twentieth centuries, when people regarded the coat of arms of the Bank of Montreal, they were looking at a history, a connection with city, region, and nation. Governments, garrisons, brokers, agents, businesses, agencies,

institutions, families, and individuals who did business with the Bank of Montreal all had an ongoing relationship with the institution linked in the most concrete way imaginable: through their own wealth and capital. The symbols of the Bank, the meaning the Bank’s people invested in those symbols, and the way people interpreted them over time were, of course, all influenced by the nature of the business and the relationships that defined the Bank. Above all, these symbols transmitted – and continue to represent – the earned reputation of Canada’s oldest financial institution. They also in some ways carry with them the values to which the institution aspires. These symbols over time are responses to questions that generations of Bank of Montreal people ask themselves: Who do we want to be? What values do we want to project? That ‘visual conversation,’ however, is not

one-way. Audiences and publics also have a say in how these images are received and interpreted, understood and acted upon. The symbols of bmo Bank of Montreal will have different receptions in Montreal, Toronto, Chicago, Milwaukee, and London according to reputation and experience. Today, the ‘brand’ has become one of the most valuable assets an institution can possess. As a result, the symbols of that brand have become some of the most precious and protected symbols in the corporate world. As we move into modern times, the changing symbols of the Bank point to how identity changes over time, and with the times. The nobility of the coat of arms gives way to more contemporary symbols – more abstract ones, such as the highly recognizable M-Bar – that capture the evolving nature of the Bank’s activities. The contemporary symbols strive to capture a more complex

corporate enterprise that makes up a diverse range of people and activities. The proud connection to place – Montreal, Canada, the North Atlantic world – gives way to more abstract representations that embrace a larger idea of time and space: colony to nation, nation to continent, continent to global reach. The vast expansion in the Bank’s activities, products, and services over the past 200 years is mirrored in the evolution of the symbols of the Bank. From the earliest manifestations of the Bank of Montreal’s symbols we see stability and change

138

Th e BM O Un iv er se

in identities, shifting values, and evolving meaning. We also see an evolution in aspiration and a transformation in what people respond to and what they belong to. The symbols and signs tell of a cultural fluidity across time. They tell a story. They really do stand out amid the constant flow of visual material we see, hear, and experience every day. For generations of Bank of Montreal people, these symbols and signs spoke and continue to speak of an important history, an engaged present, and a strong future.

T

AN EM ERGING IDENTIT Y

The Coat of Arms, 1837

he Bank’s remarkable original coat of arms has its beginnings and development in the fervid political and economic environment of Montreal in the 1830s. It was not only inspired by but also closely resembled the City of Montreal’s first coat of arms proposed by Jacques Viger in 1833. All the elements you’d expect to find are there in the city’s coat of arms: the fleur-de-lys of France, the rose of England, the thistle of Scotland, and the shamrock of Ireland. The beaver is a highly recognizable symbol of Canada, and also recalls the fur trade. At the base, a cornucopia represents the fruits of industrious labours, while two First Nations supporters, one in ceremonial dress and the other in hunting dress, grace either side of the coat of arms, acting as guardians. The Bank’s coat of arms preserves most of these elements, except the fleur-de-lys. The absence of the French could be justified somewhat on the grounds that the Bank was predominantly an Anglo-Scots institution. The political turmoil of the decade may offer another possible clue, as ethnic rivalries and republican sympathies would reach their culmination with the rebellions of 1837–38. The leaders of the Bank in the 1830s wanted the coat of arms to serve as a symbol of stability in troubled times, to recall the source and summit of their prosperity, to underline Viger’s motto – that prosperity flowed through harmony – and to pay homage to kith and kin through the bonds that united the British peoples. The success of the Bank in the North Atlantic world allowed its coat of arms to become a symbol for Canadian banking in that world. It also reinforced the Bank of Montreal’s connection to Canada, and vice versa.

In Hoc Signo

139

PROSPERIT Y THROUGH HAR MONY

The Coat of Arms, 1934

T

his logo is perhaps the most recognizable as symbolic of the historical Bank of Montreal. It is the armorial bearings of the Bank, or coat of arms. The bearing was granted by the College of Arms on 21 April 1934. The original coat of arms was an adaptation of the arms of the City of Montreal. The London, England, office of the Bank advised the Bank management in Montreal in the early 1930s that in London at least, armorial bearings not registered with the College of Arms had no official recognition. In addition, the design was all wrong. The First Nations supporters were reclining, something no supporter did in heraldry: supporters always stood. The beaver had to rest on something firm and not directly on the coat of arms. The oval shape of the original coat of arms was intended for “Dames, Misses and Eccelesiastics” – and not many of those were to be found within the Bank of Montreal upper management. There is a lot that meets the eye in this splendid coat of arms. The Bank’s origins, the provenance of its leaders, the sources of its wealth, and the perspectives of its management are all captured. The registered coat of arms features red bands crossing diagonally on a silver shield between the Rose (England), the Thistle (Scotland), and the Shamrock (Ireland). On the crest there is a Beaver (Canada) in natural colouring upon a maple log resting on a wreath or garland of silver and black. The supporters on either side of the escutcheon, or shield, are First Nations men.. The first is holding, in his outside hand, the “Calumet” or ceremonial pipe, and raising his other hand to his forehead to gaze into the distance. The second is in hunting dress, holding a bow

140

Th e BM O Un iv er se

in his outside hand. The motto, Concordia Salus, can be transliterated to mean, “In harmony there is safety or wholeness (or perhaps even prosperity).” The push to legalize the coat of arms of the Bank in the 1930s had less to do with the normal marketing preoccupations and more with the cultural preoccupations of the Bank’s management, its links to Empire, and its responsibilities and image as one of the primordial Canadian institutions. In other words, it mattered to the leaders and the people of this colonial Canadian bank

in the 1930s to ‘get it right’ for itself and the circles in which the Bank’s executive management circulated. This historical coat of arms is a product of a bygone era and a bygone culture. The absence of the fleur-delys, for example, would never pass today. To have any person – let alone First Nations representatives – “support” the shield on the coat of arms is inconceivable. Yet, the Bank’s coat of arms remains a remarkable historical artefact, statement, and symbol of a complex and original Canadian institution.

M ASS APPEAL

“My Bank,” 1946

I

n Canada, the end of the Second World War was met not only with relief at the cessation of hostilities but also with a fresh, new perspective on everything from markets to the role of the state to what Canadians had a right to expect as individuals and as a country. Postwar reconstruction also prominently featured a release of massive pent-up consumer demand, a new energy, and a renewed confidence in Canada’s future. The war, in other words, was a watershed for the country in so many ways. The “My Bank” logotype pictured here captures some of that new spirit. Its focus is at once individual and collective (it’s “My Bank” but it is that to a million, then 2 million, then 3 million Canadians as the bank tripled its customer base). In fact, one of the early prominent post-war campaigns was being a “No. 1 Citizen,” looking after No. 1. That did not mean ‘selfishness,’ but rather sticking to a five-point program of personal finances: (1) holding onto Victory Bonds; (2) buying only goods in fair supply and saving money; (3) avoiding black market purchases; (4) keeping up insurance; and (5) building up a savings account. The informality of the name “B of M” nicely contrasted with the more formal ways of Canadian banking up to the 1930s. An elite institution such as Canada’s first bank had to move with the times, to capture the zeitgeist emerging in post-war Canada. As banking focused on broadening its appeal to larger and larger publics, such a transformation was a necessity. “The Bank does not deal in money alone,” one 1946 advertisement reminded Canadians. The new logo also coincided with a transformation in the Bank’s public relations strategy to focus on a

broad appeal to Canadians. “In our day-to-day dealings, our managers and staff are [dealing] with the many human relationships arising out of the financial problems of our customers, both of large and small means, but particularly the latter, who seek assistance from a reliable and trustworthy source.” The new logo in many ways captured that new departure in postwar consumer outreach at the Bank of Montreal. The strategy attracted the public relations community’s commendation: the “Socrates High Award of the Year” for the best bank public relations. “It appears,” the award committee concluded, “that the Bank of Montreal has achieved a lasting scheme of forceful advertising … The Bank of Montreal has pointed the way. Its accomplishments deserve, at the very least, the careful study and consideration of similar institutions.” Its focus on demobilized veterans, for example, was seen not as a “gesture of heartiness which meant nothing to either bank or veteran. It was, on the contrary, a definite bid for the friendship of the generation who will be the leaders of Canadian thought and accomplishment in the near future.” The new post-war logo captured the Bank’s new post-war spirit: its strategy and its vision for a bank ready to extend itself to serve the needs of the post-war Canadian public.

DIAL M FOR MODERNIT Y

The M-Bar, 1967

T

he M-Bar logo was the brainchild of Hans Kleefeld of Stewart & Morrison Ltd, Toronto. Kleefeld was one of Canada’s greatest graphic designers of his day, giving logographic identities to key Canadian

142

Th e BM O Un iv er se

institutions, including Air Canada, Molson, Seagram, and Johnson & Johnson, not to mention the TorontoDominion Bank. The new logo was unveiled with great éclat by Chairman and ceo Arnold Hart in 1967 as “another major development being taken by the ‘new’ Bank of Montreal to advance our image of vitality and service.” The new look was to match the new outlook at the Bank, rendered in “First Bank Blue,” a strong light shade that became the official colour.

The introduction of the M-Bar was accompanied inside the bank with a certain impatience to reposition the Bank to a new, more aggressive, and contemporary posture. The revisions of the Bank Act in 1967 allowed the Bank to enter into the mortgage business. It launched into radio and television advertisements. Hart and his team reorganized management and began a series of transformations inspired by a key report on the Bank’s identity, strategy, and performance by McKinsey, which found the Bank too “stuffy.” Salaries were boosted. Incentive pay was rolled out. New business was actively and aggressively sought. Hart’s push to renew was more than welcomed by the Bank’s staff from coast to coast: Hart quipped that “our people seemed to be just waiting for some new policies” to rekindle the Bank’s innovative spirit of ‘first.’ This bracing spirit of renewal, of a rededication to excellence and innovation was symbolized by announcement of the M-Bar on the Canadian stage. It coincided with the Bank’s 150th anniversary, tying the acknowledgment of the past with the vision of the future. “Within the Bank, as well as to the public eye,” one internal Bank document suggested, “here is the symbol of an organization in which originality is welcome, staffed by people eager to provide the best and broadest service to individuals and to all enterprises regardless of size and degree.” Designer Clair Stewart once said that there were two things that made a corporate logo last: “it has to be designed well, and the company must be absolutely convinced that the design that’s being presented to them is just the right one for them.” In the case of the M-Bar, half a century of continuous and proud use has made it one of the most evocative and well-recognized symbols in Canadian enterprise.

FROM M ANY, ONE

bmo Financial Group’s Unified Brand

I

n June 2002, the Bank of Montreal and its group of companies came under a single, unified brand: bmo Financial Group. The new identifier incorporated several classic and contemporary elements, and the stock ticker symbol of the Bank, “bmo ,” was given prominence. The M-Bar logo was updated with a red roundel background.

This decision was in many ways a practical move by the Bank. The proliferation of companies and activities, products and services across North America required a graphic response that, on the one hand, recognized the diversity and, on the other, emphasized the unity under the aegis of the Bank. At the time, bmo Financial Group was operating more than thirty lines of business, including Harris Bank and bmo Nesbitt Burns, the Bank’s investment arm. As Chairman and Chief Executive Officer F. Anthony Comper remarked at the time, “The new bmo Financial Group identifier tells a unifying story for the bank and all its member companies.” The prefix – bmo – signalled that all the businesses operating under the

Bank’s seal would have the strength, resources, and values of the Bank of Montreal. The new name was the culmination of bmo ’s investments in integrating its many businesses and groups to provide more comprehensive customer service as well as to increase market share. The new logo/identifier was also coupled with an extensive dialogue within the organization to identify its key attributes and to rally around them, linking the new brand with the Bank’s efforts at renewal and transformation to meet both a changing marketplace and evolving customer needs and expectations.

In Hoc Signo

143

bm o Ba nker s a nd the Dre a m of N ation

T

he role of banks and banking in promoting national economic development is not always as straightforward as it might at first seem. The people who have studied such subjects in the North Atlantic world come up with different questions and different answers at different stages of development. For example, some ask whether the growth of commercial banking at the beginnings of the banking system is a result of the process of economic development, or was it a necessary element in the financial infrastructure? In other words, do banks lead or do they follow? This chapter points strongly to the “lead” hypothesis in the case of the Bank of Montreal and, later, the Canadian banking system. As Canada’s first bank, it was able to begin the process of increasing the pool of capital available to prospective borrowers. That capital could then be allocated to prospective borrowers professionally and efficiently. In the lending process, search, information, and transaction costs are all part and

parcel of the symmetry of saving and investing. The information networks and commercial relationships that the Bank established over long distances enabled Canadian capitalists to mobilize capital resources to finance a remarkable range of projects. The scarcity of locally available capital for most of the nineteenth century put an even greater emphasis on representation in the capital markets of the North Atlantic world. The importance of banking institutions such as the Bank of Montreal to the economic development of the country is significant not only for the capital flows it generated but also for the vital networks and relationships it was able to build both in Canada and in the AngloAmerican world in which it sought to develop and prosper. The building of a world-class financial and banking system for Canada is perhaps the greatest contribution to nation building. The nation-building projects highlighted here are representative of the many specific ways that the Bank has been a partner in facilitating and

promoting trade and economic development in Canada. The projects span the nineteenth and twentieth centuries. As one might expect of nation-building projects in a country with vast territories and a massive natural resource endowment, the projects are predominantly in the transportation sector – in the railways and canals that facilitate flows of people and goods, with the greatest coming in the 1880s with the completion of the transcontinental railway. Three are in the utilities sector – three of the greatest projects in the twentieth-century history of Canada: Churchill Falls, James Bay, and development of Alberta’s oil production capacity. Many of these undertakings were the product of the Bank, governments, businesses, and the community working together to realize a vision of an accelerated flow of trade and goods, a vision that could unlock the natural potential of the vast country. To varying degrees, the Bank was a vital player in allowing those visions to be realized.

Its contributions have been made not solely in the realms of capital but also in providing the vision, managerial capacity, financial expertise, and the talents and abilities for which the Bank of Montreal and its managers have become justly famous down the years. Because of the times and the circumstances, of borders and varying possibilities, the “nation”

146

Th e BM O Un iv er se

in nation building for the Bank has generally been north of the 49th parallel: Canada and its regions, its cities and towns, its people. As the Bank’s vision has come to embrace the American Midwest, there too it is pursuing an even greater and deeper presence.

HUM BLE BEGINNINGS

The Lachine Canal, 1821–24

C

anal building in the early nineteenth century was the key public infrastructure project of its day. The liberation of inland navigation was a top economic and trade priority in North America. In the United States, the building of the Erie Canal from Albany to Lake Erie would create a navigable waterway 4 feet deep between the Great Lakes and the Atlantic Ocean via the Hudson River. Canals meant trade and competitive advantage. They did much more than connect up trade flows: they were highways to prosperity and national supremacy. Visions of a canal at Lachine Rapids, just upstream from Montreal, had inspired navigators and traders from the days of the French ancien régime. The dream was to open up trade and exchange with the upper province. It was to remain a dream for decades – well past the British conquest of New France. From the 1790s, Lower Canadian merchants urged its construction. For imperial authorities, the War of 1812 had made the eventual construction of such a canal – and with it, seamless communication with the Upper Canadian frontier – a military priority. However, it was not until 1819 that the colony’s merchant class successfully petitioned the government to allow the formation of “The Company of the Proprietors of the Lachine Canal” with a capitalization of £150,000 divided into £50 shares. The imperial government held shares, as did the colonial government. The project was troubled from the beginning, and the government dissolved the corporation and took over the construction of the entire canal, with a key Bank of Montreal founder, John Richardson, as chairman. The canal was, in his words, “a work of great public importance and expectancy” – and, indeed, had been for decades.

The newly formed Bank of Montreal loans and advances were important to actually getting the longhoped-for project started. The involvement of this four-year-old bank was significant to the project and a considerable undertaking for the Montreal Bank itself. Work began under Richardson’s supervision in July 1821. The canal as originally built was 8.5 miles long, 28 feet in breadth at the bottom and 48 feet at the surface. It had seven locks of cut stone, each 100 feet long, 20 feet wide, and with a 5-foot depth of water. The Lachine Canal was opened in August 1824 and received its first vessels in 1825. The total construction cost of

£109,601, or $440,000, was borne by the government of Lower Canada (with a £10,000 grant from the British government). It was renovated, improved, and expanded in subsequent decades. The Lachine Canal project showed just how much of a struggle a public project could be in a country with few resources, scarce capital, and generally in competition against well-financed and prosperous competitors. It also showed how vital co-operation and collaboration was to attaining any measure of success. This project, like so many of its successors in Canada’s transportation and communications fields, demanded public and private partnership.

b m o B a nker s a nd the D r e a m of N ation

147

A NEW YORK STATE OF M IND

The Champlain and St Lawrence Railway

T

he Champlain and St Lawrence Railroad (c&sl ), commissioned in 1832 and completed in 1836, was Canada’s first railway. And Canada’s first railway, not surprisingly, pointed directly to New York City, underlining the enduring importance for Montreal merchants of continental connections and trade, especially with that rapidly growing metropolis. The new route would cut hours off the journey that they were compelled to travel. This railway project of the 1830s was largely financed by Bank of Montreal director and Montreal merchant John Molson. It is a perfect exemplar of the Bank’s early pragmatic and clear-eyed approach to large projects. The scope of the project was manageable: laying 16 miles of track that would then connect Montreal and New York City via the steamers on Lake Champlain. And it was manageable from a finance perspective. When it came to railway financing, the Bank’s leaders throughout the nineteenth century were tough, knowledgeable skeptics – in retrospect, a far-sighted position to take, since over-enthusiasm for railways, or real estate, or both at the same time, caused the ruin of many a bank. The railway was chartered in 1832 to run from La Prairie to St Johns, Quebec. It opened for traffic with horses in 1836 and with locomotives in 1837. The c&sl also featured British North America’s first locomotive, the Dorchester, built by Robert Stephenson in Newcastle upon Tyne and delivered to Molson’s wharf

148

Th e BM O Un iv er se

in June 1836. The top speed of the locomotive was about 30 miles per hour. The opening festivities of 21 July 1836 were reported in the Montreal Gazette: “The public opening of this important route took place on Thursday last under circumstances of peculiar interest … Among the guests who assembled on board the ‘Princess Victoria’ at about ten thirty a.m. were the Earl of Gosford, Sir Charles Gray, Sir George and Lady Gipp, Mr Elliott secretary of the Commissioners, and several of the Legislature Council and House of Assembly, also, a number of the mercantile body and garrison and many respectable strangers to the number of about three hundred.” The c&sl was in many ways a sensible Canadian project ahead of its time: modest in its reach but serving a distinct and productive purpose.

MONTREAL’S “ VICTORIAN INTERNET ”

The Telegraph

T

he telegraph was the first of the electrical communications technologies that would slowly transform the world’s telecommunications landscape. If it wasn’t quite the “Victorian Internet” envisioned by contemporary author Tom Standage, the telegraph heralded a remarkable transformation for the coordination and organization of business and government. The technology was in development for decades in the North Atlantic world. In 1844, Samuel Morse organized a company to erect a telegraph line linking New York City, Baltimore, and Washington. The information and

control processing revolution ushered in by the electric telegraph would initiate a long-wave transformation in the way people interacted with each other. In the first generation, however, it is most useful to think of the telegraph as a tool of business communication. The transformational possibilities for banking – and Canadian colonial banking in particular – were evident from the outset. Until the 1840s, top-speed communications across the imposing geography – even of southern Ontario and Quebec – were limited first to the fastest horse, then increasingly to primitive locomotives on developing networks of railways. The telegraph would usher in a new, more connected era. The Bank’s leaders in the 1840s certainly believed that, granting a £2,000 loan to the Montreal [Magnetic] Telegraph Company. In fact, without private capital, the project would not have seen the light of day. The Montreal Telegraph Company was formed December 1846, with a capitalization of £12,500, for

the purpose of connecting Toronto to Montreal by electro-magnetic telegraph. Its first superintendent was O.S. Wood, the first pupil of inventor Samuel Morse. By mid-October 1847, the telegraph would cover Quebec City to London, Canada West. By the end of 1847, the company had completed 540 miles of lines, established nine offices, and transmitted 33,000 messages. The following year, a line was completed to the United States. Business was prosperous enough for the Montreal company that in 1852 it bought out the Toronto, Hamilton, Niagara and St Catharines Electro-Magnetic Telegraph Company, Canada’s first telegraph company. For the first time, communication and transportation could be separated. Breakdowns and interruptions were frequent; the ungalvanized iron wires sometimes broke from the weight of flocks of wild pigeons roosting on them. Moreover, short-circuits were common in wet weather. As the network grew and the technology improved, the full power and potential of the telegraph began to show itself. It changed, forever, social and commercial relationships. In the memorable words of James Carey, it “allowed symbols to move independently and faster than transportation.” Merchant-to-merchant relationships became buyer- and-seller relationships. The vastness of geography was reduced. Communities began to be tied to regions and nations in terms of ideas, language, and style. Communication with distant places, ideologies, and ideas became not only possible but also accessible. In a metaphoric sense, the telegraph allowed many Canadian communities to join the nineteenth century. The telegraph also revolutionized business, spawning the first great industrial monopoly – Western Union – and founding the electrical goods industry. The challenging complexity of the telegraph as a network, a system, together with the railroad, led to modern management techniques. Steamboat, railroad, telegraph: three nineteenthcentury revolutions in transportation and communication. In different ways, the Bank of Montreal both shaped and was shaped by all three.

b m o B a nker s a nd the D r e a m of N ation

149

A M ARE USQUE AD M ARE

The Canadian Pacific Railway

T

he national project of binding together the vast transcontinental expanse of the new Dominion of Canada from sea to sea by rail was one of the most ambitious and risky in the history of the country. On 21 October 1880, the Canadian Pacific Railway Company (cpr ) signed a contract with the federal government to build a railway across the Canadian prairies and to the Pacific Coast. It was to be completed by 1890 to fulfill a condition of British Columbia

150

Th e BM O Un iv er se

entering Confederation: connect us to the rest of the country by rail. This archetypal nation-building project was highly controversial and derided in the press as a useless enterprise, an “out-and-out impossibility” from an engineering perspective, and sure to be one of the great blunders of all time. In payment, the cpr was to receive $25 million in cash, 25 million acres of right-ofway, $37 million for surveying costs, and a twenty-year monopoly over transportation to the United States. From every angle – political, economic, financing, capital, engineering – the project of Prime Minister Sir John A. Macdonald, J.J. Hill, George Stephen (president of the Bank of Montreal), Donald Smith (a later Bank president), and other key players would be visionary at best, delusional at worst. One London observer warned

in 1881 that “Canada is one of the most over-rated Colonies we have, but it is heartily loyal and makes its loyalty pay … as for the country as a whole it is poor and crushed with debt. The Supreme Government owes about thirty-five million pounds altogether, and every province has its separate debt, as also almost every collection of shanties calling itself a ‘city.’ The Canadians spend money and we provide it. That has been the arrangement hitherto, and it has worked out splendidly – for the Canadians – too well for them to try another scheme with the Canadian Pacific, which they must know is never likely to pay a single red cent of interest on the money that may be sunk in it.” In spite of the naysayers, in November 1885, the cpr succeeded in linking tidewater to tidewater across the Dominion of Canada. The unprecedented complexity of the project – and its controversial nature – called for the full capabilities of a young country, its institutions, and its sharpest managers. The project was managed by W.C. Van Horne, whose workers sought to overcome some of the greatest engineering challenges of the day through the Canadian Shield and the Rocky Mountains. The project was driven by business-politicians, railway promoters, and Montreal capitalists. The Bank of Montreal not only provided Canadian financing for the construction of the railway but was also deeply involved in the broader complexities of raising capital both in the United States and in the United Kingdom, from where most of the capital would, by necessity, flow. In addition to capital resources, George Stephen left his duties as president of the Bank of Montreal in 1880 to take on the presidency of the Canadian Pacific Railway. The last spike of the railway was driven in on 7 November 1885 at Craighellachie, in Eagle Pass, British Columbia, by Lord Strathcona, producing perhaps the most iconic photograph in the history of Canadian enterprise. The completion of Canada’s transcontinental railroad ushered in a wealth of new possibilities in trade, tourism, immigration, and economic development that were simply impossible without that vital nineteenth-century connection from sea to sea.

Ward M , Montreal General Hospital, Montreal, Quebec, 1910. Photograph by Wm. Notman & Son

Montreal General Hospital and the Development of Civil Society

T

he destinies of the Bank of Montreal and the Montreal General Hospital were intertwined from the beginning of the hospital in 1821. Most of the hospital’s founding managers and governors – Armour, Garden, Gates, Gerrard, Leslie, Moffat, Molson, Richardson, Turner, and others – were intimately involved in the Bank’s activities. John Richardson, however, stands out as ‘father of the institution.’ He was

its first president; he played a leading role in supplying the necessary land as well as taking on financial debt on behalf of the struggling hospital. The establishment of the hospital took place in the context of a growing health care crisis in Montreal. The Hôtel-Dieu de Montréal was established in the mid-seventeenth century, but by the 1820s, it could not hope to accommodate the growing population with thirty beds. The city divided between those who wished to have a new hospital and those who wanted to enlarge the old one. The battle became quite personal, and a duel ensued between Dr Caldwell (pro Montreal General) and Mr O’Sullivan (a proponent of the Hôtel-Dieu). Both men were injured but survived. The contentious nature of the plan meant that official support would not be forthcoming. Therefore, money was raised by public subscription. In a full Masonic ceremony, the cornerstone of the new hospital was laid on 5 June 1821 by the officials of the three Masonic Lodges of the city – St Paul’s, Union, and Wellington Persevering – and the Building Committee. The permanent Montreal General Hospital opened its doors in May 1822. In 1823, Dr Caldwell and his colleagues established the Montreal Medical Institution – the forerunner of the Faculty of Medicine at McGill University. The Montreal General Hospital has the distinction of receiving the first corporate donation offered by the Bank – £100 – thus beginning a long and close association with this venerable Montreal institution. This early ‘nation-building project’ was modest by contemporary standards, but the contribution of the citizen-bankers of the Bank of Montreal – with time, talent, organizational capabilities, and both personal and corporate money – was consistent with the desire to build and develop civil society and its institutions. Health care and hospitals in the nineteenth century were only starting to take their rightful place in the urban life of the country, and the Bank and its people were full participants from the outset.

b m o B a nker s a nd the D r e a m of N ation

151

OVERCOM ING THE NIAGAR A BARRIER

The Second Welland Canal, 1850

T

he Welland Canal was first opened in 1829 after five years of work cutting through the Niagara Escarpment. The objective was simple: connect Lake Erie and Lake Ontario and offer some competition to the Erie Canal. Looking at a map, it is clear why nineteenth-century Canadians were particularly

152

Th e BM O Un iv er se

interested in Welland: it provided one of the main links in the chain of water transportation extending from Thunder Bay (then Fort William and Port Arthur) to the Atlantic Ocean – 2,200 miles – later nicknamed the “Grain Lane to Europe.” Canal construction was shorthand for expanding markets and increased trade, not to mention naval security. For Ontario, canals also meant reducing its dependence on American transport routes and tariffs to get produce and goods to Montreal. One enthusiastic observer suggested that the Welland Canal was “the lung of Canada, carrying commerce into our arteries and remote veins, expelling our goods, our wheat, our minerals.” Another observer suggested that Lake Ontario, locked in with rapids at either end, “has been unlocked by triumphs of engineering.” In 1841, the newly minted United Province of Canada took over the ownership and management of the canal as part of a broader strategy to renovate the Great Lakes and St Lawrence system of navigable waterways. Financing construction was the major problem, given that the colonial governments were practically bankrupt or unable to mount the project. But the Second Welland Canal project was initiated, backed by a London-based loan of £1.5 million and guaranteed by the imperial government. The Bank of Montreal’s role was in the active provision of advances to contractors pending the collection of claims, thus ensuring the project’s completion. The enlarged, deepened, and updated Second Welland Canal was opened for traffic in 1845. It enabled sailing vessels of 750-ton cargo capacity to pass from lake to lake. Subsequent improvements were made in 1887 and in 1933, each time to facilitate larger vessels. The Welland Canal was part of a chain of first-class canals that provided a complete system of St Lawrence waterways linking Lake Erie to the Atlantic Ocean. The mobilization of the massive public and private resources required to complete this task was, in many ways, a clear, unambiguous vote of confidence in the future of the region and in Canada as an emerging nation.

HARNESSING THE R AW POWER OF NATURE

brinco and the Churchill Falls Hydroelectric Project

O

n 17 July 1967, the massive $800 million British Newfoundland Corporation (brinco ) hydroelectric project was inaugurated in Churchill Falls, Labrador. It was the largest hydroelectric power development of its kind on the continent, set to produce 34 billion kilowatt hours of energy annually – enough, it was said at the time, to supply 10 million households. Once again, the Bank of Montreal was the chief project

financier to brinco , heading up a consortium of Canadian banks. The funding for Churchill Falls was $150 million. Like many previous Bank of Montreal projects in this chapter, the cash was guaranteed for construction and development until the project started earning enough to pay its way. It was cited as the “biggest bank financing venture in Canadian history” to that point. The Churchill Falls development was a highly complex project with more than its fair share of challenges. Commercial and political arrangements delayed it by two years, until May 1969. The ceo ’s sudden death in the middle of this turbulent time and a railway strike had a dramatic impact on timetables and costs. In November 1969, the president of the company and five others key to the management of the project died in a plane crash in Labrador. That same year, new taxation regimes and a floating Canadian dollar added multiple millions to the project costs. The management overcame the difficulties, and by December 1971, the first two units in the generating facility were spinning. On 1 May 1972, commercial service began as scheduled. One of the great achievements of this megaproject was the taking on of large financial commitments spanning a long period of time. As W.D. Mulholland suggested in the 1970s, this can be a “risky business and there are a number of chilling examples of this.” He spoke from rather personal experience, since he was compelled to take over the leadership of brinco after the Labrador plane crash. At the same time, he saw – as did the Bank – that it was important that financial institutions develop the techniques for carrying out these kinds of projects successfully. Churchill Falls was a great example of the Bank’s leadership in responding and adapting to the banking opportunities in the era of the financing of Canada’s great natural-resource megaprojects.

b m o B a nker s a nd the D r e a m of N ation

153

Hydro-Québec James Bay Development

I

n the late 1970s, the Bank once again put together a landmark financing deal as the head of a seven-bank consortium to underwrite the biggest corporate loan in Canadian history: $1.25 billion credit with HydroQuébec for the development of James Bay (Phase i ). Phase ii would come a decade later. The James Bay hydroelectric project was a monumental undertaking. Phase i cost $13.7 billion and diverted the course of three rivers to reservoirs on La Grande Rivière, increasing the flow from 449,000 to 872,000 gallons per second. The spillway was three times the height of Niagara Falls. The development boasts North America’s largest power-generating site: it can crank out 7,722 megawatts of electric power annually! In all, four power-generating sites were established between 1978 and 1984. The collaboration of six other Canadian banks as well as twenty-two foreign banks was coordinated by the Bank of Montreal as lead manager. Here again, it was W.D. Mulholland who would lead the charge, noting at the time that the Bank’s role “demonstrate[s] our ability to compete and succeed in major financings against the toughest competition.” The James Bay development, according to press accounts, was “the biggest credit facility ever afforded a private, public or para-public company” and “undoubtedly one of the great success stories of 1977–78,” not to mention “a good deal for both the borrower and lenders.” The financial specialization in energy projects grew in tandem with Canada’s increasing international specialization in the sector.

154

Th e BM O Un iv er se

A Leading Continental Banker to the Oil and Gas Industry

T

he Bank has been a partner in the development of the Canadian oil and gas industry through its genesis and development. In the process, it has become one of the leading banks in the sector in both Canada and the United States. The importance of the oil and gas sector to Canada’s twentieth-century economic history and prosperity, especially that of Western Canada, cannot be overstated. But it is also complicated. The industry is characterized by high capital investment, cyclical growth, and price volatility. Financial institutions in the field need to have specialist knowledge and capabilities to manage the risks associated with oil and gas development and to exploit the most attractive financial opportunities. The Bank’s Oil and Gas Department was established in 1962 and quickly established a strong record in translating expertise in the industry and banking to advantage. Project financing for the sector has included some of the major deals of the 1970s. By the 1980s, the Bank ranked in the global top ten for syndicated loans to the oil industry – the only Canadian bank in that select group. Some of the Bank’s key future executives would pass through this department on their way to leadership positions in the Bank. One of the largest projects the Bank has been associated with is the Alberta oil sands – the world’s third-largest proven oil reserves after the Kingdom of Saudi Arabia and Venezuela – with an estimated 1.84 trillion barrels of crude bitumen, which translates into 168.7 billion barrels of oil. The Athabasca, Cold Lake, and Peace River areas of northern Alberta set the stage for this massive group of reserves. The development of what has been called the world’s “first oil mine” was first opened in 1967 by Sun Oil (Suncor), followed by Syncrude in 1978.

M a rkets of the M ind

bmo Advertising and the Art of Persuasion

T

he emergence and development of advertising in the industrialized world is a fascinating and complex story. As we see with the Bank of Montreal, the field has grown and developed with the rise of consumer culture. These developments have been shaped by needs and necessity: new and expanding markets need to be reached and persuaded. Where there are markets, there is also competition: advertising and promotion thus becomes a vital element in ensuring that an institution’s efforts are highlighted, recognized, and appreciated. Advertising also seeks to connect, persuade, and motivate. It is, in fascinating ways, a type of public discussion. It speaks, of course, to corporate strategy, performance, and positioning as you would expect it to. It also speaks to our contemporary aspirations, what we value, how a generation of advertising people believe is the best way of connecting with their customers and the

broader market – and in that regard, our assumptions about the way the world works, and how to create and perpetuate that bond. At one time confined to print, the emergence of first radio then television broadcasting, and then of course online marketing, exponentially raised the reach and elevated the importance of advertising. The Bank, of course, has advertised since the beginning. For most of the nineteenth century, that consisted of newspaper advertisements showing annual report statistics and hours of operation – and frequent references to the Bank of Montreal being Canada’s first bank. In the 1920s, the Bank established an advertising department that prepared advertisements for newspapers, magazines, and the like, “but is concerned with many forms of publicity in connection with the relations between the Bank and the community.” The publicity focused on a wide range of subjects – business

summaries, appointments, crop situations. Publications in the 1930s like “Canada To-Day” and “Your Bank and How You May Use It” were meant to promote knowledge of the Bank and to establish “friendly relations with possible customers, a new generation of which is constantly arising,” in the words of F.W. Munro Brown, head of the Bank’s advertising in the 1930s. In that decade, for example, strength, stability, and “prestige copy” dominated, to ensure that people remained confident in the Bank during the Depression. The “services” copy focused on the products, services, and methods of doing business. “Advertisements must have about them,” one official suggested in 1931, “a certain distinctive atmosphere, and this is accomplished not only in the formulation of the general advertising plan and tenor of the text, but in the physical appearance of each advertisement.”

By the end of the Second World War, the Bank won the “Socrates High Award of the Year” for their advertising related to the battle against inflation and “the Bank’s role in building the postwar world.” The Bank was hailed as “the leader in bank advertising – and the executive responsible, the most valuable member to his field.” The award citation suggested that “Banking is, after all, dependent on the good will and respect of intelligent people. Bank of Montreal copy could never be called ‘cute.’ Nor, on the other hand, is it ever ‘stuffy.’” In the last half-century or more, the advertising world has become a terrain of institutional mammoths, large agencies, and boutique shops. But a perspective from the 1930s still holds: “Try to look at the Bank’s advertising, in whatever form it may appear, as designed to help you in promoting the business of your branch … to show him the advantages of banking with our Institution and, if he is

158

Th e BM O Un iv er se

not already a customer, to put him in a receptive mood so that when he comes in contact with the staff the work of securing him as a customer is half done … [making advertising] live up to the Bank’s service and to present that service in its true form to the public.” One advertising award citation back in the 1940s suggested that “the effective balance of dignity and alertness … typify Bank of Montreal advertising” and that the Bank “has pointed the way.” This chapter highlights some of the more interesting or memorable advertising campaigns in the Bank’s history. Its gaze is mainly directed to the last couple of generations of the Bank of Montreal campaigns – the slogans and approaches that deserve particular mention. Undoubtedly, this short list does not quite do justice to the advertising history of the Bank. Rather, it will provide an enjoyable tour through the past to whet the appetite.

M AKING IT PERSONAL

My Bank Emerges, 1940s

T

he simple yet enduringly effective “My Bank” formulation was introduced after the Second World War. The tagline then became over the following several years: “My Bank to One Million Canadians” – then two million, then in short order, three million Canadians. The thrust of advertising to embrace the mass market had been coming for some time, but changes in Canadian banking in the 1930s and 1940s pointed banks firmly in the direction of broadening their appeal to a much broader market of depositors. After 1945, Canadian banking crossed a clear line and began, step by step, to throw off the vestiges of its nineteenth-century past – in its messaging, architectural and interior design, advertising, publicity, and publications, not to mention its approach to markets. Strong economic growth and the steadily growing incomes and purchasing power of the parents of the baby boom generation began to change many things, and not just banking and advertising. The My Bank taglines were used for two decades and considered “landmarks in the personalization of banking institutions’ services presented meaningfully to the public.”

Some quick statistics will offer an idea of the change. In 1947, the Bank operated 521 branches; by 1957: 725; and by 1967: 1,033. Deposits in 1947: $1.7 billion; 1957: $2.6 billion; and 1967: $5.6 billion. A similar story can be told with loans. The basis for banking was broadening out. A labour, societal, and consumer revolution is hidden in those simple post-war numbers. My Bank emerged from that post-war sense of the great possibilities that Canada had in store. Fast-forward to 1999: newly appointed ceo Tony Comper wrote in the annual report that “those bus ads [with the My Bank slogan] from the sixties kept pushing back into my consciousness, reminding me of what really counts in building a bank for our time.” Accordingly, Comper briefly resurrected the tagline for a couple of campaigns of the era. The afterlife of My Bank and its enduring appeal to successive generations is a testament to the powerful, compelling simplicity of the message.

M a r ke ts of the M ind

159

FIRST MOVER ADVANTAGE

Canada’s First Bank, 1950

“I

n order to form a link between the Bank’s premises and its advertising,” a Bank of Montreal memorandum suggested in September 1950, “it has been decided to introduce the slogan ‘Canada’s First Bank’ in our window and hanging glass signs.” So began the official introduction of an important and enduring advertising slogan. The phrase recalled the Bank’s lasting historical importance to young Canada, before it was even a country. Moreover, it had all the right attributes, projecting as it did the strength, stability, and solidity of an institution that in many ways defined Canadian banking. Some runners-up that were road-tested but never used for long included “Canada’s First-Established Bank” and “Canada’s Oldest Bank.” One can see why these were not used for long! The tagline was accompanied by another historical reminder: “Founded in 1817,” a subtle change from “Established in 1817.” It was made to conform with the

160

Th e BM O Un iv er se

Bank’s post-war advertising and was seen to be a gentler and more sophisticated rendering of the idea. The slogan proved popular and durable – so much so that, when the Bank’s famous new symbol – the M-Bar – was introduced in 1967 and the entire range of identification of the Bank was standardized, the slogan was prominently incorporated in the new arrangements. As Elliot J. Morrison suggested in a memorandum on the subject of corporate image in 1966, the Canada’s First Bank slogan carried with it an important message about the identity of the Bank itself. It was part and parcel of the Bank’s abandonment of the colour green as its principal house colour, substituting a lively, vibrant blue, which was immediately referred to as “First Bank Blue.” (For more information on the Bank’s logos, see In Hoc Signo, pages 137–43.) While other slogans and taglines waxed and waned with time, Canada’s First Bank persisted. One executive suggested that since it was the Bank’s first claim to fame, it would also serve as its “most effective tool in reinforcing its unique position in the country … a statement of fact and pride! First historically and first in aspiration to serve Canadians everywhere with the most efficient banking services.”

First Canadian Bank, 1969

B

y the end of the 1960s, Canada’s First Bank was morphing slightly into “First Canadian Bank” or simply First Bank – the same idea, but offering wider possibilities for the Bank if it wanted to change its proper name. As early as 1969, Bank executives were contemplating a possible name change, particularly in markets in the United States and areas of anglophone Canada. This was part of a larger trend in advertising to de-emphasize territoriality and underline other features. This industry-wide trend also saw the shortening of “Bank of Montreal” to “B of M” or “BM,” and then eventually, of course, to bmo . The name of the Bank was never changed, but the tagline stuck around in the 1970s, memorialized by the fact that the Bank’s Toronto headquarters are in First Canadian Place. Throughout the 1970s, the appellation First Canadian Bank was used in some places but not consistently, it would appear. It surfaced, for example, on the covers of the Bank’s annual reports from 1971 to 1977. In 1978, a return to the Bank’s coat of arms put an end to appearance of the phrase on annual reports. Generally speaking, First Canadian Bank appeared to be popular until the early 1980s. The linkages to both time (the first) and territory (Canadian) were gradually being replaced by the memorable symbol and acronym that is universally recognizable today.

M a r ke ts of the M ind

161

Let’s Talk, 1971

“L

et’s Talk” was introduced in the early 1970s as an invitation to discuss the Bank’s products and services – mortgages, loans, travel services, and the like. It was used alongside the M-Bar and the First Canadian Bank identifications. The executive responsible suggested that this advertising campaign was “a statement of our feeling as well as a reflection of the Bank’s customer philosophy. The old adage that Talk Is Cheap is one of the great fallacies of all times. It may be the most valuable commodity we have in our possession.” The intention of the campaign was to find new ways to open up to the needs, wants, and aspirations of the Bank of Montreal customer. In this era, the Bank’s branches were given a certain level of autonomy over the choice of message, displays, and decorations in-branch. However, standardization and control over advertising efforts began to become more systematic in this period. The radio advertising campaign featured Leslie Nielsen, a popular actor and comedian of the day, doing the voiceovers. By 1980, the Let’s Talk tagline quietly faded from prominence, having served its purpose and having emphasized the importance of listening to the customer.

SETTING BMO APART

Doing More for You, 1985

I

n April 1985, the Bank launched a nationwide “unique customer service advertising campaign” to unveil a new slogan and a new emphasis: “Doing More for You.” Developed by Carder Gray Advertising of Toronto and, in French, by Publicité Martin Inc. of Montreal, the slogan’s introduction was the product of two years of research involving surveys of customers and Bank staff to identify how the Bank could evolve with the people it served. What did “doing more” mean? To the Bank of the 1980s, it meant more and more of a focus on five customer service needs: (1) to be treated with courtesy and understanding; (2) to be served promptly and efficiently; 3) to get reliable information on personal finances; (4) to feel confident in the Bank’s professionalism – the way it looks and the way it works; and finally, (5) to know the manager is accessible and willing to help. The new slogan was accompanied by a massive training program, guidebooks, and training modules and workbooks. Videocassette players were delivered to branches to permit staff to use the materials. The training also came with an accreditation: the Customer Service Certificate of Achievement. The slogan was emblematic of a major transformation in the way the Bank wished to serve its customers, and in the words of the executive responsible, Matthew W. Barrett, it represented the “beginning of a long-term effort to emphasize a strength we take pride in.” The April 1985 launch involved two 30-second television commercials aired in markets across the country, followed up by magazine advertisements and other print media.

M a r ke ts of the M ind

163

We’re Paying Attention, 1991

I

n May 1991, the Bank launched a new image campaign – one that had emerged from the landmark Corporate Strategic Plan (see The Written World of bmo, page 37). Therefore, the slogan “We’re Paying Attention” represented an important public declaration of the direction of the Bank under Matthew W. Barrett and F. Anthony Comper. In some ways it sought to break away from the past, signalling that “Canada’s oldest financial institution” would take “a radical departure from conventional bank advertising. The theme of paying attention (and for the Francophone market “Au delà de l’argent, il y des gens”) was developed after a year of intensive research that polled Bank employees, customers, and the public. The “customer of the 1990s” demanded more of everything, especially superior customer service. The focus on customer service was in a sense carried over from the 1980s, but there was an urgency and a fresh emphasis on broadening and deepening that commitment in light of the major new strategic direction the Bank was taking in the early 1990s. “Excellence in customer service is not something new at Bank of Montreal,” Tony Comper wrote in April 1991. “But for the first time we are going to talk openly about it to Canadians. Our new image campaign will stand out from any other bank advertising in the country, and will place us first in our customers’ minds.” The creative element of the new campaign and slogan was executed by the Bank’s two advertising agencies, Vickers & Benson and Publicité Martin. Three initial English advertisements focused on three themes. The first was “Vision” – to introduce the world to the Bank’s commitment to change for the better and its promise of bringing service back to banking. The second element was “Employees,” featuring Bank of Montreal employees discussing their increased participation within the new strategy, as well as their

164

Th e BM O Un iv er se

individual approaches to superior customer service. The third element, “Customers,” focused on customers sharing their views on what set Bank of Montreal apart from and above other financial institutions. The bracing freshness of the approach struck a chord with both customers and employees alike: “Banking is perceived as a very large and sometimes faceless

operation,” one voiceover in a commercial suggested, “That’s what we’ve got to change … I think banking’s a customer business, a people business.” And another: “We want to walk around with pride, and we’re starting to do that.” That, in essence, is what the Bank was paying attention to: their customers, their employers, and the increasingly personalized nature of banking.

It Is Possible, 1994

T

hree years after We’re Paying Attention came the related theme of possibility. “It Is Possible” was launched in May 1994 in twenty-eight regional centres across Canada, to ensure that the national campaign was also a local community campaign. It was accompanied with a public launch of The Possibility Network, which aspired to being more than a marketing initiative: to telegraph clear messages of hope and

confidence in the sometimes-challenging economic climate of the early 1990s. The new slogan was accompanied by a “no-charge planning” service for customers. “The new program will involve a free consulting service for customers and non-customers alike, provided by panels of people across the country.” The Bank would then formulate a personalized package of information about how a panel worked through similar challenges

to the ones presented by the client. The extraordinary initiative underlined the theme of how the Bank could unlock both individual and community possibility. The campaign featured stark, surrealistic settings – a dystopian picture if ever there was one – with a prosecutor taunting and cross-examining a caged man on trial about his faith in the future. The “defendant” testifies that he can indeed pay off his mortgage, cover the cost of his children’s education, and have a winter vacation in the sun. That, in essence, is what is possible: financial freedom, and especially faith in the future. The campaign was an instant hit for its boldness and willingness to break the banking mould. To an unusual degree, the slogan seemed to capture the élan of the Bank of the 1990s, and its willingness to strike out in new directions. The massive press coverage was a testament to its success: inside and outside the Bank, people hailed the campaign as a “marked new way for doing business.” The It Is Possible campaign won Matthew Barrett, chairman and ceo , the “Sales and Marketing Executive of the Year” award for 1995. In typical Barrett style, he began his acceptance speech by noting that it took an “unusual amount of courage, if not foolhardiness, for a selection committee to pick a banker for any marketing award, let alone such a prestigious one. Talk about flying in the face of conventional wisdom!” Barrett explained that this effective marketing was successful because it was “consonant with the prevailing competitive structure and environment.” His predecessors, he argued, were also effective marketers with approaches appropriate for their era that, “if followed today, would bankrupt the contemporary bank in no time at all. So, as we applaud past laurels, let us not rest on them. These days in the banking business if you snooze, you lose.” For Barrett and the Bank of that era, marketing was not just part of the corporate strategic plan: it was the strategic plan. This campaign and the previous one were part of a thorough transformation of the Bank’s marketing philosophy to one deeply attuned to the pulse of the customer.

M a r ke ts of the M ind

165

Making Money Make Sense, 2008

166

Th e BM O Un iv er se

T

he “Making Money Make Sense” campaign was produced in 2008, when the Bank, under the leadership of William A. Downe, was engaged in effecting a radical transformation in the minds of customers. As Downe explained, “it led us to a series of insights that we ultimately were able to capture in a single line: Making money make sense.” The campaign was at least in part inspired by the Bank’s Quebec market brand promise: “Ça a du sens. Profitez.” The thrust into new markets, and the insights so generated, gave a deeper meaning and expression to that basic message of giving customers confidence to make the kinds of decisions they needed to make for their futures. The campaign was “partly about the words, but more importantly it was about the feelings of affection and loyalty that we were trying to evoke by tapping into everyday life,” Downe suggested in 2013. The search for a crystallizing, unifying phrase – one that captures strategic vision of the Bank, inspires employees, and connects to the needs and aspirations of existing and prospective customers – is never easy. In many ways, the 2008 slogan, like the taglines before it, captured the zeitgeist of the millennium’s first decade – at a time when money, as well as capital, and its system manifestly made less sense than it had for a long time. The global financial crisis was the worst since the Great Depression. Canada may have felt it markedly less because of the stability of its banks, but clearly it was a time when clarity, sense, and insight of the kind offered by seasoned bankers was in great need. For many, banking and investing are of such intimidating complexity that clear sightlines and greater understanding become priorities. The aspiration was to have bmo “offer simple answers to the financial challenges and decisions faced by individuals and businesses … by removing confusion and complexity from the world of money.”

We’re Here to Help, 2014

T

here is a narrative or thematic arc that unites all of the taglines of the last three decades: the emerging supremacy of the customer and the customer experience. Each era has defined it somewhat differently, but there is a clear, bright line that brings together the four campaigns. The spirits of those different ages demanded different areas of focus touching on the progressive stages of a relationship – understanding, thinking about possibilities, making things clear and simple. The current tagline – “We’re Here to Help” – therefore, has a long pedigree. This current simple but powerful tagline can claim a dual heredity: for years, Harris Bank in Chicago used it as an expression of its regional brand; at the same time, it was seen as a natural development of the Canadian bmo brand. The alignment was natural – and timely – as Canadian and US brands started to move closer to the expression of a single bank under the bmo banner. The new tagline put bmo ’s people at the centre of the bank. In the words of ceo Bill Downe: “It implicitly acknowledges that people’s financial lives may be imperfect and sometimes challenging, and in the same moment it reassures them that we’re uniquely qualified to provide the solutions they’re looking for.” The focus now was on the personal – and bringing the human touch to the business of banking. “Human, Intuitive, One Bank – these aren’t words that will ever appear in an ad,” Downe announced in October 2014. “But they’ll guide us as we build our brand from this point forward.” The campaign was a creation of y&r , the Bank’s creative agency of record. Here again, there are continuities with the heavy focus on financial guidance and

customer service. For the first time, however, the “focus and brand promise” was meant to appeal to consumers across North America – including bmo ’s 2 million US customers with 600 branches across eight states. The strategy remained the same, but the expression was different. The evolution of taglines and campaigns represent a relentless quest to maintain that precious alignment

between what the Bank aspires to do and what customers perceive it stands for. In the words of Joanna Rotenberg, bmo ’s then-chief marketing officer, “At the end of the day, we know if we are successful if we bring what customers love about us to the rest of the market in a way that’s relatable, understandable and gets at the heart of financial decisions people are making, but also has a little bit of fun with it.”

M a r ke ts of the M ind

167

On the Pl aying Fields of North A m eric a

Sponsorships

F

rom the days of the first Olympics in classical Greece, patronage of the games and community activities has been an important element in the success and popularity of the form. Sponsorship could take many forms, from the support of an individual athlete to groups and teams. Fast-forward to more modern times and one sees how essential sponsorship was for the revival of contemporary games. For financial institutions, sponsorship decisions can be complex – decisions often overshadowed by the glamour and excitement of the sport. The questions focus not only on marketing and considerations of brand but also the proper role of the institution as a supporter of city and region. Not all customers are fans, and not all fans are customers. But sponsorship can also be an effective way of getting noticed in a high visibility environment. It is also where a lot of current and future customers gather, so it’s also a way to reach

those customers. The encouragement of individual athletes, teams, and communities in their aspirations are also important considerations. The support institutions like Bank of Montreal offer are also acknowledgments of the importance of the play element in culture. And a sporting spirit. For bmo , the sponsorship of sport is, of course, all of those things and more. The Bank’s support of major league teams extends across the playing fields of North America. Its supporting role has evolved over time, as new sports and new forms of organization have sprung up. In the advent of television broadcasting of sport in the last generation, sport has become a massive outlet for markets and marketing, for entertainment and reputation-making, for recognition and brand association. It is exactly the kind of place you would expect a leading bank to be represented in the contemporary era. The support of a wide variety

of sporting activities is a way to reach the Bank’s customers where they live and play, to strengthen the bond of identification and affiliation. The inspiration is not just for customers: the people of the Bank are also inspired by their connections to the teams they support and the individuals they admire. Like everything the Bank does, the decisions it takes on sponsorships must meet the many high standards that it sets for itself in how, where, and why it spends the institution’s money on activities in the community. For any fan inside or outside the Bank, the foregoing explanations about sponsorship of sports clearly lack something. They lack something because the sporting event is simply not experienced as other forms of entertainment. It is much more visceral and connected to the competitive and communal instinct of the individual. To varying degrees, sport is a national language. It remains

an arena, for example, where excellence is clearly and unambiguously celebrated. For all its commercialism, it is also where the play instinct is front and centre. The artistry, the drama, the excitement of competitive sport, the respect for limits, the longing for perfection, the impulse of freedom: this is what author Michael Novak once credited with the joy of sport. In few other activities does one find such a powerful communal feeling as at “the game.” It can, therefore, be no surprise that a bank so involved in its community will be found sponsoring, participating, and wholeheartedly engaging in the games of our contemporary world.

170

Th e BM O Un iv er se

TOP SHELF

The Chicago Blackhawks

T

he Chicago Blackhawks hockey team was founded by Major Frederic McLaughlin, who paid the $12,000 entry fee to become part of the National Hockey League on 25 September 1926. In their first game, played on 17 November 1926, they beat the Toronto St Pats 4–1. And thus began the history of one of the legendary teams of hockey. The connection to, and the rivalry with, the Toronto and Montreal teams born in that first season continues to burn brightly into the twenty-first century. bmo’s sponsorship of the Chicago Blackhawks of the National Hockey League began in 2007. The Bank’s partnership with the Blackhawks has seen the team win the Stanley Cup three times – in 2010, 2013, and 2015. While there is not a cause-and-effect relationship between partnership and victory, the benefits that accrue to each are significant, on and off the ice. The bmo -Blackhawks sponsorship has been considered a key part of the Bank’s overall efforts to support Chicago’s leading organizations. The fact that the Blackhawks win frequently and at the right time has been a stroke of good fortune. bmo ’s relationship with the Blackhawks began as the team sought to revitalize both its brand and its image, thus providing an ideal fit for both Bank and hockey team.

On the Pl aying Fields of North A m er ic a

171

NOTHING BUT NET

The Chicago Bulls

T

he Chicago Bulls of the National Basketball Association (nba ) were established on 16 January 1966. Their rise to prominence in the game, especially in the 1980s and 1990s, transformed the team into one of the most powerful sports dynasties in America. Players such as Joakim Noah, Michael Jordan, Scottie Pippen, and Dennis Rodman have not only been stars of the game but they also transcended their sport to become household names. Their on-court performance, popularity, and deep roots in Chicago have made the Bulls organization one of the most valuable and powerful franchises in the nba , estimated at $2.3 billion in 2015. This is not only a Chicago brand: it is a brand with a global reach. bmo Harris’s sponsorship of the Bulls began in 2007 when it became the Bulls’ “Official Bank.” The relationship represented the largest banking partnership in franchise history. Since then, it has become one of the best-known and recognized relationships in Illinois. The Bank’s close engagement with the Bulls’ organization has created a partnership that many say extends far beyond contractual elements. The chemistry between the two organizations, the alignment of goals and objectives, and their mutual embrace of community has made the bmo Harris–Chicago Bulls sponsorship one of the most effective relationships in the Bank’s portfolio. In 2015, Bank of Montreal became the official bank of the National Basketball Association in Canada.

172

Th e BM O Un iv er se

#WETHENORTH

The Toronto Raptors

O

n 3 November 1995, the Toronto Raptors played their first home-opener in the National Basketball Association. Toronto had not had a major-league basketball franchise since the short-lived Toronto Huskies in 1946. A half-century later, Raptors founder John Bitove and partners succeeded in having the game return to Toronto. The Toronto franchise was the first granted outside the borders of the United States. The team’s name was chosen from among 2,000 entries in a competition that included names such as Dragons, Grizzlies, Hogs, Tarantulas, and Terriers before Raptors was chosen as the final and most appropriate name. On 30 October 2013, bmo announced its multi-year sponsorship of the Toronto Raptors nba franchise. The agreement reinforced the Bank’s strong relationship with Maple Leaf Sports & Entertainment in the city. Most of all for the Bank, it marked what newspapers of the day considered a “forceful return to Canadian basketball,” establishing the sport as a premier marketing vehicle in Canada. Basketball’s popularity as a sport, especially among young urban dwellers, has made the relationship with the Raptors a powerful and productive one.

On the Pl aying Fields of North A m er ic a

173

THE BANK’S CLEAR ROUND

Spruce Meadows

S

how jumping is an elegant sport developed in the eighteenth century in England and revolutionized by Italian Federico Caprilli, hailed as the father of

174

Th e BM O Un iv er se

modern riding. The sport highlights the remarkable physical power and agility of the horse and the superb, supreme control of the rider. The harmony of human and horse in overcoming obstacles, avoiding faults, and completing the course can be considered fluid poetry in motion. The Bank of Montreal is proud to be a founding sponsor of Spruce Meadows, Canada’s premier equestrian show jumping facility near Calgary, Alberta, since its inception in 1975. In fact, the Bank has supported equestrian sport in Canada for four decades in a variety

of ways, both individually and in the development of this international team competition. It has supported Canadian Equestrian Team member and Olympic record holder Ian Millar for more than a quarter century. The bmo Nations’ Cup has been an exciting opportunity to showcase talented athletes from around the world, and bring international recognition to the Calgary’s Spruce Meadows “Masters” tournament. The Nations’ Cup has become a leading global competition in the sport, drawing the world’s best riders.

WILD ROSE VISIONS

The Calgary Stampede

S

ome annual events in the life of a city begin modestly and then eventually grow to symbolize the spirit of an age, a place, and a people. The Calgary Stampede has become such an event and institution in the life of Calgary, Alberta. The first Stampede event

was held in September 1912, supported by four prosperous southern Alberta ranchers who got behind the idea of a world-class rodeo competition to exalt the culture of the Old West. The Bank of Montreal was there from the very beginning in 1912 as the “Official Bank of the Calgary Stampede.” For the last three-plus decades, the Bank has been a sponsor of this remarkable annual event. Sponsorship provides the institution an opportunity to connect and collaborate with the community, to celebrate Western heritage, and to showcase the importance

of agriculture not only to the West but also to Canada as a whole. There are not many relationships between institutions that surpass a century.. That of the bmo -Stampede therefore stands out as a fine example of a productive, prosperous, and successful relationship that has helped to build the bonds of community in southern Alberta. When you add the immense entertainment value of the Stampede to the equation, you get a remarkably happy picture of what the Stampede brings to its people and community.

THE ENDURING NATIONAL PASTIM E

Skate Canada

A

s in so many areas of both amateur and professional sport, bmo has had transformative long-standing partnerships. For two decades, the Bank was the “official bank” of Canadian skating. bmo first entered into an agreement with Skate Canada in 1996 to become the title sponsor of the Canadian Figure Skating Championships and a sponsor of the National Team. This partnership grew to include the bmo Skate Canada Junior Nationals, bmo Skate Canada Challenge Events, bmo Skate Canada Sectionals, and bmo Skate Canada Synchronized Championships, which have provided the opportunity for nearly one million spectators to enjoy the country’s top figure skaters live. bmo has been particularly proud to be the presenting sponsor of the CanSkate learn-to-skate program, delivered through 1,475 clubs across Canada and taught by professional coaches. This program enables skaters of all ages to participate in recreational skating and provides them with the skills to enter into the competitive skating stream. The Bank’s sponsorship of title events was one piece of a larger and intensive commitment to the sport. Another is helping young skaters who are first starting out. And at the opposite end of the spectrum, helping elite skaters to compete effectively and successfully at the international level. The Bank’s commitment reaches from the support of recreational skaters to competing athletes. The long-term commitment to Skate Canada was considered transformative in the sense that the organization was able to focus on creating the best environment for its members to thrive and succeed. bmo Financial Group’s partnership with Skate Canada has developed into what was considered a leading and award-winning example of corporate sponsorships.

176

Th e BM O Un iv er se

T GOING THE DISTANCE

The bmo Vancouver Marathon

he Bank’s sponsorships in the support of healthy lifestyles embrace a wide spectrum. The marathon, for example, in both ancient and contemporary times, has captured the imagination as a popular test of physical prowess and endurance. For almost a decade, bmo Bank of Montreal has been the title sponsor of the bmo Vancouver Marathon. bmo supports the running community through sponsorship of marathon events throughout North America – in Vancouver, Kelowna, and Charlottetown in Canada; Phoenix, Arizona; and Milwaukee and Madison, Wisconsin. In recent years, the Vancouver event has completely sold out, reaching the 5,000-runner limit. Over years, the Vancouver Marathon has become one of the world’s most significant races. Between 2012 and 2015, for example, the marathon had over sixty-three nationalities represented and an impressive contingent of international marathon runners registered and running. In 2014, Forbes magazine ranked the bmo Vancouver Marathon as one of the world’s best marathon locations. The course leads runners through twelve unique neighbourhoods, showcasing panoramic views of snow-capped mountains, cherry trees in blossom, shoreline for 70 per cent of the course, and the famous Stanley Park. Thirty bands along the course motivate runners to a downtown finish in the heart of the city, where participants are able to reconnect with friends and family at the Street Festival located on West Hastings. The organization puts on a marathon, a half-marathon, and various other races to encourage participation at all levels. In 2015, the bmo Vancouver Marathon hosted about 14,000 registered runners and many more spectators during the race weekend. The event has also raised more than $12 million for thirty charities since its launch in 1971.

On the Pl aying Fields of North A m er ic a

177

THE BEAUTIFUL GA M E

Canadian Soccer

B

mo’s support of soccer was not only inspired by

the beautiful game itself but also by the fact that the sport has the highest participation in the country. In 2007, the Bank entered the soccer sponsorship realm with its support of Toronto fc and bmo Field. The approach to the investment, however, targeted both elite and grassroots levels of play. The Bank promoted professional teams and Canada’s national teams through Major League Soccer and the Canadian Soccer Association. Remarkably, the Bank supported each of the Major League Soccer teams in Vancouver (Vancouver Whitecaps fc ), Toronto (Toronto fc ), and Montreal (Montreal Impact). bmo also supported youth soccer teams and sough to celebrate and engage young Canadians with the bmo Team of the Week, a national youth soccer contest launched in 2011 and run by the Bank. The Local Soccer Clubs program supported grassroots soccer teams at the branch level, enabling bmo branches and employees to engage directly in community activities. This was how bmo in Canada became the “Bank of Soccer” – by promoting outreach programs that grew quickly year by year. The Bank’s hard work and promotion of the sport resulted in the support of more than 20,000 youth league soccer players across the country. bmo’s extraordinary commitment to soccer focused its investments on a comprehensive, across-the-board approach to the sport, from the kids starting out in the game at the community level, through the young adults in associations, through the truly gifted international-class players – men and women that Canada needs in order to compete and win on the world stage.

INVESTING IN THE FUTURE

Bradley Center and the Milwaukee Bucks

I

n 2012, the Bank acquired the naming rights for the bmo Harris Bradley Center in Milwaukee, Wisconsin, the home of the Milwaukee Bucks basketball team. The Bank was seen as something of a white knight in the affair, since the Bucks would have in all likelihood been forced to find a new home. As a relative newcomer to the Wisconsin market after its merger with m&i , bmo was searching for ways of engaging meaningfully with important community initiatives and institutions. In concert with a host of other Wisconsin-based companies, bmo stepped up to the challenge. As in any great relationship, the benefits have been mutual. The preservation of the Bradley Center until a new structure could be built was an important community objective, not least since the Center had an annual economic impact of more than us $80 million in metro Milwaukee alone. Communities find out who their friends are when the need is greatest. By that measure, bmo Harris came through with flying colours. For its part, bmo Harris was able not only to introduce itself to the community in a big way but also to promote its name, its products and services, and the ways it wanted to continue to be a community player in the Milwaukee area. The announcement was coupled with the signing of a six-year sponsorship of the Milwaukee Bucks, as well as a new initiative to establish a bmo Harris Boys and Girls Club section of the center to support the community and broaden the fan base.

Minnesota Wild, 2015

T

he Minnesota Wild of the National Hockey League and bmo Harris Bank have had a relationship that extends back to the very beginnings of the franchise in the mid-1990s. The Wild took to the ice for the first time in the 2000 season in the nhl ’s Central Division, Western Conference. Franchise founder Robert Naegele Jr considered the Bank’s support crucial in helping him and his partners realize the goal of bringing a major-league franchise back to Minnesota. “They shared our vision for the entire community to become the State of Hockey that exists today.” The Bank had a long history with Naegele in his role as the owner of Rollerblade, Inc, aiding the entrepreneur in financing that venture as well. bmo Harris Bank was also vital in securing the final funding to build the Xcel Energy Center in 1998 so that when the players took to the ice in St Paul, they would do so in a brand new arena. In September 2015, bmo Harris Bank announced a multi-year partnership with the Wild. As in other key markets and communities where the Bank operates, the sponsorship recognizes just how much of an asset the Wild is to the community – this time in the Minneapolis–St Paul region. As a bank founded in Montreal, the growing collaboration with nhl teams – Chicago, St Louis, and Minnesota – seems a natural fit: a beloved sport, cherished on both sides of the border, helping to break down borders.

180

Th e BM O Un iv er se

Fro m Ch a rit y to Phil a nthropy

I

n the two centuries of the Bank’s operations, both the concept and the practice of philanthropy and charitable giving have undergone a thorough and complete transformation. The Bank’s earliest donations were focused first on local Montreal institutions, and then extended outward to its territory of operations through branches. The earliest donations were concerned with institution-building in health care (hospital construction) and education (universities), disaster relief, or the raising of funds for soldiers and veterans. Donations also went to the support and management of other young institutions in theatre and the arts. In national emergencies, the Bank’s leadership were attentive to wartime relief, supporting a national war effort, the Red Cross or the United Way, or health-based campaigns. In Chicago, for example, Harris Bank was the founding funder of the Chicago Community Trust (cct ) in 1915 with a donation of $600,000, and the bank was the original sole trustee. (The cct now has consolidated

assets of $2.1 billion and provides $161 million in annual grants.) In addition, both the leaders of the Bank and its employees, inspired by deep religious conviction and community spirit, developed a long-standing tradition of both personal and corporate generosity. The transfer of wealth from private to public and community has undergone a continuous evolution since the very first Bank of Montreal corporate donation in 1835. In 2015, the Bank contributed more than $56.9 million in community donations. Over time, the Bank’s donations have increasingly sought to connect the Bank’s existence as an important North American financial institution to the material support of community-building projects on a local, national, and international scale. As a bank, it does so in the name of the shareholders and the customers of the institution. Over time, donations and philanthropy have focused on making a difference in building the communities the Bank serves – through transformational

gifts, the funding of post-secondary educational initiatives, and in the realms of health care, arts and letters, and a variety of other causes important to its customers. These donations and investments reflect not only the sense of community of the Bank and its people but also the duty and responsibility it feels to civil society and a broader set of publics beyond its immediate circle of shareholders, managers, employees, and customers. In this way, the noble pursuit of giving has also spawned at the Bank and other institutions an increasingly sophisticated and developed sense of corporate social responsibility, where the Bank seeks to take on its social obligations through short-term, targeted projects as well as longer-term sustained or ‘transformational’ ones at city, regional, or national levels. These exciting developments in the Bank’s relationship with the wider world have emerged alongside a growing complexity and discernment in its approach. For the Bank of Montreal, this has

been a natural evolution: in its corporate culture, it has sought to give expression to its purpose beyond its operations. The Bank, in other words, has sought through this avenue to focus on its values, on human dignity, on solidarity, and on the kinds of initiatives that will strengthen individuals and communities. Throughout its history, the Bank has instinctively understood the importance of community goodwill and what experts call ‘reputational capital.’ That explains not only the Bank’s adherence to the highest and most exacting standards in banking but also how it has moved toward a deeper and broader understanding of its social purpose, beyond its core function. Some of the donations featured here exemplify the Bank’s philanthropic path over time. The story tracks how generations of Bank of Montreal bankers evolved their understanding of the proper role of the Bank beyond banking. Included also are special examples from both the Bank of Montreal and its other founding institutions, Harris Bank and m&i , thereby embracing both Canada and the United States. There are literally thousands of examples of donations, large and small, that could be cited. Instead, this chapter showcases five entries that cover the categories of charitable giving over the years: health care, education, research, the arts, and community. The story begins informally right from the beginning through the philanthropy of the Bank’s founders. For the Bank as an institution, the story begins in the 1830s, with the first official donation to the Montreal General Hospital.

182

Th e BM O Un iv er se

HEALTH C ARE AND THE HEALING ARTS

H

ealth care has pride of place in this list as it was the Montreal General Hospital that became the recipient of the Bank’s very first corporate donation. (See also bmo Bankers and the Dream of Nation, page 151.) On 10 February 1835, the board of directors agreed to donate £100, thus beginning a long and close association with this venerable Montreal institution. The leaders of the Bank, however, gave far more of their personal wealth – in time and treasure – to this worthy cause. This great impulse of charity is deeply rooted in tradition and seeks to relieve the physical and mental suffering of humanity. Throughout the late nineteenth century and into the twentieth, the need to fund and build hospitals grew in tandem with the urbanization of the country and the professionalization of medicine. In the twentieth and twenty-first centuries, the Bank has been active in helping hospitals focus on vulnerable groups and contribute to the eradication of disease in its key centres of operation. In Montreal, the Bank has supported the Hopital Sainte-Justine since 1930, making major donations throughout the decades. In 2003, the Bank offered $2.5 million to the hospital and, in 2016, $2 million for a Chair in Autoimmune Diseases. One shining example is St Michael’s Hospital in Toronto, a Catholic teaching and research hospital founded by the Sisters of St Joseph in 1892 to look after the sick and poor of the inner city. The hospital today is an outstanding medical centre of education and treatment. bmo has been its banker for over one hundred years and a key supporter of its campaigns through the 1980s and the 1990s. In 2001, the Bank pledged $730,000 over four years as the first major funder of the Centre for Research on Inner City Health (now the Centre for Urban Health Solutions). In 2006, bmo Financial Group gave $2 million for the extension of

this initiative centred on helping Toronto’s vulnerable and inner city populations – mothers at risk, new immigrants, and people living rough on the streets. Again in 2012, bmo contributed $3 million over a decade to support the expansion of facilities at the hospital. Among the other hospitals in Toronto receiving support over several decades, the Princess Margaret Hospital has been a consistent recipient, culminating in a 2013 pledge of $3 million over a decade to fund a Chair in Precision Genomics. The relationship with the Hospital for Sick Children extends back to 1967 and includes a total of $5 million in funding since 2006 for research and related activities. In Chicago, bmo has a distinguished tradition of supporting Chicago’s Rush University Medical Center in a variety of programs. Rush was the first medical school in Chicago. Its commitment to the low-income neighbourhoods on Chicago’s West and South sides is

focused on addressing and eliminating health disparities – in other words, getting high-quality health care to people who need it most. bmo Harris is Rush’s major collaborator in the Building Healthy Urban Communities project, which includes Malcolm X College, a City College of Chicago, and the Medical Home Network. As part of that project, the Bank funds five bmo Harris Bank Health Disparities Fellowships in aid of providing diversity in health care delivery. The frequency and the dollar amounts can make the head spin, but there is a strategy behind the giving. Many of the most recent contributions have sought to target specific programs and to offer the possibility of a transformation in the various fields of health care provision. The Bank has stepped up to the mark in ensuring that its giving reflects its values and its mission, and attempts to make a tangible difference in the communities it serves.

AN ENDURING COM M ITM ENT TO HIGHER LEARNING

T

he nexus between the Bank of Montreal and the development of Canada’s university network extends deep into the nineteenth century past. The Bank’s donations have benefitted a number of Canada’s leading universities in larger and larger amounts. In the early part of the twentieth century, McGill University

184

Th e BM O Un iv er se

received substantial amounts ranging from $10,000 in 1911 to $250,000 in both 1920 and 1943 with various amounts in between, in the years between. The University of New Brunswick (unb ) was also one of the earliest supported universities, with a banking relationship extending back decades. The Bank has made contributions to McMaster, Queen’s, Western, Laval, and Acadia universities, to name a few. The contributions and donations have been underpinned by a growing awareness of the role of universities in creating strong foundations for civil society, tackling the great challenges of our world, and creating the conditions for

the kind of country and the kind of people we aspire to become. In contemporary times, the donations have flowed to universities with ambitious agendas. The Bank’s historic $3 million donation to the University of Toronto’s capital campaign in 1996–97 was a turning point for the way the Bank viewed its corporate giving, preferring to make a stronger impact in strategic areas of need. A few examples will suffice. In 2005, $750,000 went to the unb ’s International and Business Entrepreneurship Centre in the Faculty of Business. In 2011, the Bank returned to unb to announce a $1.75 million gift to support student projects – the single largest donation ever received by the university and the largest the Bank had given in the region. In 2013, the Bank offered $1.75 million for a fresh renovation of the Finance Research and Trading Lab at the Rotman School of Management at the University of Toronto. The lab offers real-time financial resources and the opportunity to gain hands-on training in a range of disciplines. bmo Harris’s philanthropic focus in education responds directly to the most urgent challenges of the community it serves. Its $900,000 support to Marquette University and the Boys & Girls Clubs of Greater Milwaukee is an extraordinary case in point. The funds are used to support college preparation and career readiness programs at the Boys & Girls Clubs and provide scholarships for club members to attend Marquette University. Currently, thirty members attend Marquette as bmo Harris Scholars. That program provides a range of support for first-generation college students from preparation to mentoring programs. In Chicago, the Bank has been the co-lead sponsor of One Book, One Chicago since 2013 – an initiative aimed at creating a community of readers. Every September, about 25,000 Chicagoans read the same book at the same time. Then, a variety of free programming prepared by Chicago’s cultural, educational, and civic institutions – discussions, author series, performances, art exhibits, and films – is held in connection with the book.

T PURE RESEARCH

At the Perimeter of Expectation

hrough its support for universities and endowed chairs in health and other fields in the last generation, bmo has kept its finger on the pulse of the evolving financial needs of advanced research. One contemporary gift stands out, however. On 29 November 2010, bmo announced its largest single donation to date, a landmark $4-million investment in the Perimeter Institute for Theoretical Physics (pi ), in Waterloo, Ontario. The gift established the bmo Financial Group Isaac Newton Chair in Theoretical Physics at the Perimeter Institute. In one stroke, it represented the largest single donation ever made by bmo to support scientific research. It was also the largest single contribution in the history of the Perimeter Institute. The $4-million donation came with an additional $4 million in private funding.

The Chair selected was Xiao-Gang Wen, one of the pre-eminent physicists of our generation. Wen received his PhD from Princeton University in 1987. He is a Cecil and Ida Green Professor of Physics at mit , and a Moore Distinguished Scholar at Caltech. Wen’s expertise is in condensed matter theory of strongly correlated electronic systems. Among many other outstanding achievements, he introduced the notion of topological order (1989) and quantum order (2002) to describe a new class of matter states. This opened up a new research direction in condensed matter physics. bmo ceo Bill Downe has been one of the Perimeter Institute’s most convinced supporters. As he wrote in an op-ed in 2015, transformational change begins to happen “when exceptional people ask fundamental questions about the deepest problems and make extraordinary discoveries that benefit us all.” The far-sighted decision to support that branch of knowledge stemmed from an understanding that quantum physics is at the foundation of the world’s advanced economies. Downe wrote: “The commercial applications are rarely obvious at first – it is one hundred years later, yet we are only now reaping some of the benefits of Albert Einstein’s profound insights. The ideas of Max Planck, Niels Bohr and other thinkers of Einstein’s generation advanced human knowledge, science and technology, altering our lives forever.” “Transformational giving” is already looking like a shopworn phrase in the contemporary world of philanthropy. But there’s still the hope – that if you push hard enough and deep enough, you have a shot at breaking through, or solving twenty-first-century challenges. The transformation sought is the discovery of a solution to an intractable challenge. It is what contemporary leaders both see and aspire to in their own organizations, and in the vision and resources they offer to the wider world. 185

THE ARTS

T

he Bank has long been a major patron of the arts. In Canada, the patronage of the Bank of Montreal and others has been essential to the flowering of cultural forms across the country. Promoting those splendid manifestations of human creativity in dance, theatre, art, and music demands a cultural understanding. It also requires support of cultural communities and the fostering of both individual and collective genius. Supporting extraordinary creative excellence in the nation’s artistic realms has been done for complex reasons deeply rooted in the convictions and aspirations of generations of Bank of Montreal leaders and people. Each generation has had to ask itself: What kind of society do we want to live in? How can we do our part to make it more culturally enriching, uplifting, or worthwhile? The Bank’s answers have come down through its long-standing support of some of Canada’s founding regional and national cultural institutions. In ballet, the Bank was the original sponsor of the Winnipeg Ballet Club in 1939. In 1953, the club would become the Royal Winnipeg Ballet after HM Queen Elizabeth II granted the group the first royal charter to be conferred in the Commonwealth. Also in the 1950s, Celia Franca founded the National Ballet of Canada (1951) in Toronto, and the Bank was also there to lend its support. The National Ballet has become Canada’s premier dance company, performing for over 10 million people since Celia Franca’s day. It has earned an admirable reputation across the globe for its range of traditional full-length classics. The Bank of Montreal has been the banker to the Stratford Festival virtually since its establishment in 1952. The founding of the festival was a stroke

186

Th e BM O Un iv er se

of vaulting ambition for a small southern Ontario town, but under the leadership of Tyrone Guthrie, the festival’s first artistic director, and intrepid actors who were attracted to the new stage, the venture was launched. Unusually, the original Bank gift came from the branch manager at Stratford, underlining the Bank’s and the community’s commitment to the success of what has become a Canadian theatrical institution. The Bank’s support for the fine arts extends right across the country in communities where it has conducted business: through the support of individual artists and young artist competitions (1st Art!) as well as educational institutions, such as the Ontario College of Art and Design (now ocad University) – Canada’s largest art, design, and new media post-secondary institution. Support for community galleries is a hallmark of the Bank’s giving in this area. The Winnipeg Art Gallery stands out, as the Bank has been both banker and supporter for over a century. The Bank’s Chicago experience with fine art has a long pedigree. The Norman Wait Harris Prize medals in American painting, endowed by the Art Institute of Chicago, were awarded to some of the most renowned artists of the twentieth century. Grant Wood’s iconic American Gothic won the $300 Harris Prize bronze medal in 1930. The Bank supports the Toronto Symphony Orchestra and the Ravinia Festival in Chicago, among other groups and events. But the Montreal Symphony Orchestra (mso ) has a special place in the history of the Bank’s giving. In 1981, the Bank began its sponsorships of mso international tours. In 1984, the Bank sponsored the mso ’s 1984 spring tour of Europe. It was the largest single cultural sponsorship up to that time for the Bank ($200,000). The smash success of that tour prompted another tour – this time of the United States – in 1985. In 1989, the Bank again sponsored a North American tour for this much-acclaimed orchestra. In Chicago, bmo Harris is the season sponsor of the Shakespeare in the Parks tour, and has been since 2012. The production tours city parks, especially in underserved neighbourhoods. The plays attract 25,000

families, and audience members of all ages. For ten weeks, the Grant Park Music Festival brings free, outdoor, classical music to the Jay Pritzker Pavilion in Millennium Park. The Festival is America’s only free concert series of its kind, and bmo Harris is a season sponsor. Throughout the years, as the Bank has become an integral part of the cities and towns it serves, it has striven to promote the well-being of the whole community. In so doing, it has enriched the North American cultural landscape.

Two men defiantly pose in front of the Bank’s office amidst the ruins of post–Great Fire Chicago, 1871. Three days after the fire, the directors authorized a $5,000 donation in aid of the stricken city.

COM MUNIT Y OF COM MUNITIES

A

sk any Bank employee in any branch or office about the importance of community support and they will tell you that their Bank’s support, encouragement, and passionate commitment for strong communities everywhere is a defining feature of its engagement with the world. Military conflict and natural catastrophe have always called forth a response: the Bank of Montreal donated $5,000 for the relief of Chicago after the Great Fire of 8–10 October 1871 “in view of the unparalleled calamity which had befallen Chicago” as the directors noted on 13 October 1871. Marshall & Ilsley established a fund to support orphans in the wake of the US Civil War. One of the

The Soldiers’ Orphans Home in Madison, Wisconsin, opened its doors on 1 January 1866 for the care and tutelage of children left without parents after the Civil War. Marshall & Ilsley established a fund to support these poor orphans.

earliest donations of the Bank was for the relief of cholera and pestilence in its hometown – an all-toocommon occurrence in the age before sanitation and before the rise of health care. More recently, the Employee Giving Campaign has raised over $22 million (2013) and $26 million (2014) – remarkably generous sums that come from the people of the Bank themselves. One of the keystone charities the Bank has supported over the years has been the Community Chest, United Appeal, and Red Feather – better known today as the United Way Centraide. bmo has become one of the most generous corporate supporters of the United Way. Many of the Bank’s senior executives and branch managers in the communities they serve have chaired the annual appeals. In recent years, the Bank’s strategic shift to larger gifts that carry more impact inspired it to provide funding for United Way’s “Building Strong 188

Th e BM O Un iv er se

Neighbourhoods Strategy” (bsns ) to confront the threat of growing urban poverty. By focusing efforts where they are needed most, supporting neighbourhood change from within, and improving access to community supports, the United Way in cities such as Toronto and Chicago can give people the necessary tools to improve individual lives and the life of the community. bmo Harris in Chicago has been especially active in funding projects that respond directly to the needs of underserved populations. The Bank provided a $1 million multi-year pledge to the ymca of Metropolitan Chicago toward the ymca 1030 Building Campaign to construct the Learning Institute. The institute will be a state-of-the-art space for collaborative learning across the spectrum of childhood development into adulthood. It will also be a destination for best-practice dialogue among city, state, and national institutions and non-profit organizations. Over half a million Chicagoans rely on the ymca for support, making this project one that will touch many lives. The Bank’s support, and that of its employees, for community causes is strong and has a long tradition.

The Kids Help Phone is a sterling example. From its beginnings in 1989, this charity has become one of Canada’s largest and most respected services for children and teens. It is national, bilingual, free, and available 24 hours a day for children and youth in Canada. The bmo loyalty to Kids Help Phone has seen millions of dollars raised from its employees and their families over the decades. In Chicago and area, bmo Harris has supported such diverse projects as Openlands’ Building School Gardens program, creating and installing outdoor teaching spaces at disadvantaged Chicago public schools, and benefitting students, teachers, and the wider community. In the civic realm, the Bank provided $1 million in “founder” funding in 2001 to build the now-famous Millennium Park. This depth of commitment demonstrates just how seriously the Bank and the people of bmo take to heart the welfare of their community.

Cultur a l C a pita l

Bankers and Art

C

ompanies maintain an interest in acquiring an art collection for a variety of reasons. Art collections can give a sophisticated expression to an institution’s support for the community beyond the strict confines of its business. The best collections not only reflect a corporate social responsibility – in the assistance to up-andcoming artists, for example – but also serve to enhance the cultural richness of the community and the workplace itself. Art in the corporate setting has been seen as a “‘catalyst for change because it changes people’s perceptions.” It can motivate employees and broaden their horizons. Above all, perhaps, corporate collections at their best view art as a manifestation of the creative spirit that should not be confined to a gallery or museum, but should help to elevate our physical environment and inspire people. Collections can

reflect the creativity, energy, and modernity of the institution. The Bank of Montreal has played an important role in Canada’s cultural evolution, and the art world is no exception. Its head offices in Montreal and architecturally memorable branches across Canada set a standard of refinement for new buildings that was emulated for decades in every part of the country. Early bank presidents like Donald A. Smith (1820–1914) and Sir George Alexander Drummond (1829–1910) were actively involved in the arts, both as notable collectors and, in Drummond’s case, as chairman of the fledgling National Gallery of Canada. The bmo Financial Group art collection has amassed more than 7,500 works, displayed in bank offices in five countries and dozens of cities. The collection has become an integral part of

the working environment of the bank itself. In recent years, the collection has been expanded with works from artists active in every region of the territories in which the Bank operates. Artistic and technical excellence is the standard in this collection. The bmo collection has a remarkable range of historically significant art, including Marc-Aurèle Fortin, Emily Carr, Maurice Cullen, Group of Seven members J.E.H. MacDonald and Lawren Harris, and modernist masters like Yves Gaucher, Willem de Kooning, Robert Motherwell, and Alfred Pellan. The collection also contains many works by notable contemporary artists, including Lois Andison, Shuvinai Ashoona, John Brown, Edward Burtynsky, Pascal Grandmaison, Angela Grauerholz, Micah Lexier, Evan Penny, Sarah Anne Johnson, Julian Schnabel, and Gregory Scott.

The Bank’s collection also features works by the best of the newest generation of Canadian artists. That generation is actively encouraged by the bmo Financial Group 1st Art! Invitational Student Art Competition, which has run since 2003. The works presented here represent a fascinating cross-section of the collection in North America.

190

Th e BM O Un iv er se

JOSEPH PANZETTA and THOM AS DUBBIN

Agriculture, Arts and Crafts, Commerce, Navigation, 1818–19

F

ashioned in the neo-classical style then popular in Europe, these four panels are the oldest works in the bmo collection, which gives them a special place of honour. They also represent the first decorative or ‘artistic’ pieces to adorn a financial institution in Canada. At the time, Coade stone was a new, ‘high tech’ form of artificial stone developed to be more durable than the stone or terracotta materials then used on the exterior of buildings. The decorative scheme for the country’s first bank building was intended to set a culturo-artistic imprimatur on a long-awaited moment for the aspiring merchant-bankers of Montreal. The

four plaques feature allegorical figures in bas-relief symbolizing the ambitions and wide-ranging interests of the bank, together with those of the bank’s clientele: Commerce, Agriculture, Arts et Métiers (Arts and Crafts), and Navigation. Joseph Panzetta (active 1789–1830) and Thomas Dubbin (no dates known), Agriculture, Arts and Crafts, Commerce, Navigation, 1818–19. Coade stone, each panel 30 × 46 inches (inv # 389, 390, 391, 392). Set of four architectural relief panels or “plaques” commissioned in London, England, in 1818 to adorn the exterior of the first Bank of Montreal building in Montreal. Currently on display at the Montreal head office.

Cultur a l C a pita l

191

ROBERT HARRIS

Lord Strathcona and Mount Royal, 1905

T

he practice of immortalizing the Bank’s presidents in oil on canvas has become an unbroken tradition. Upon retirement, a portrait is commissioned – though in some cases the work was done posthumously. This portrait is one of the most distinguished and celebrated of the entire collection. It features Donald A. Smith, Lord Strathcona and Mount Royal, whose influence on the Bank and the nineteenth-century economic development of young Canada was powerful and incontestable. (See also Determining Destinies, page 17.) Lord Strathcona was extremely knowledgeable about the art of his day, and his personal art collection was held in high esteem. It is, therefore, not surprising that Robert Harris, one of the most eminent and accomplished portraitists of the day, and best known for his portrait of the Fathers of Confederation, was commissioned to create Smith’s portrait.

Robert Harris (1849–1919), Lord Strathcona and Mount Royal, 1905. Oil on canvas, 46 × 30 inches, unframed.

192

Th e BM O Un iv er se

NICHOL AS DE GR ANDM AISON

The Walker (Pemota), 1930

N

icholas de Grandmaison devoted four decades of his life to documenting and creating portraits of First Nations people in Canada, particularly in Manitoba, Alberta, and British Columbia. After his death, the Bank acquired from his family a portfolio of one hundred oil pastels on paper dating from the 1930s to 1960s. The Bank’s purchase was thought to have saved the collection from being broken up or sold outside the country. This acquisition made the bmo collection one of the largest holders of the artists’ work. After donating sixty-seven pieces to the University of Lethbridge in 2013, bmo retains thirty-three portraits, the greatest number of works by a single artist in the collection. De Grandmaison’s portrait The Walker (Pemota) is one of his earliest and most accomplished portrayals.

Nicholas de Grandmaison (1892–1978), The Walker (Pemota), 1930. Oil pastel on paper, 29.5 × 23.38 inches, unframed.

Cultur a l C a pita l

193

M ARC-AURÈLE FORTIN

Paysage à Grande Vallée, ca. 1942–48

194

Th e BM O Un iv er se

M

arc-Aurèle Fortin was born in Sainte-Rose, Quebec. He established a successful early career as a painter, watercolourist, printmaker, and draftsman. He also became one of Quebec’s most beloved twentieth-century landscape artists. Fortin studied in Montreal under Ludger Larose and Edmond Dyonnet. He also studied at the Art Institute of Chicago under the direction of Edward J. Timmons. He returned to Montreal in 1914, but really began his painting career after a formative trip to England and France in 1920. One contemporary critic likened him to a “magician

conjuring up, out of the earth, out of his palette, giant trees, extravagant skies, a whole enchanted nature.” Over his long career, his love of the countryside around the St Lawrence Valley inspired many of his paintings. Paysage à Grande Vallée is an exceptional example of his best work, being one of two pieces by Fortin in the collection.

Marc-Aurèle Fortin (1888–1970), Paysage à Grande Vallée, ca. 1942–48 (inv # 8011). Casein on board, 35 × 47.5 inches, unframed.

EM ILY C ARR

Young Trees, Mount Douglas, 1942

B

ritish Columbia artist Emily Carr is a seminal figure in Canadian art history and one of the most important female artists of the early twentieth century in North America. Her passion and inspiration throughout her life remained the British Columbia coast. As she wrote in 1912, “Art is art, nature is nature, you cannot improve upon it … Pictures should be inspired by nature, but made in the soul of the artist; it is the soul of the individual that counts.” Carr’s formation was as expansive as her art. She studied at the California School of Design in San Francisco in the early 1890s and travelled to England in 1899, where she stayed for five years. She returned to British Columbia and the Northwest Coast before travelling to Europe once again – this time to France – in 1910. She settled in Victoria, British Columbia. By the late 1920s, she became increasingly known and appreciated, especially for her paintings of Aboriginal subjects and the trees, forests, and coastal skies of her native province. bmo has three pieces by Carr in the collection, this work being most representative of her mature style.

Emily Carr (1871–1945), Young Trees, Mount Douglas, 1942. Oil on paper mounted on wood board, 35 × 24 inches.

THOM AS UGJUK

Community, 1973

T

he bmo collection includes a rich selection of 265 works by Inuit artists dating from the second century to the present day; pieces are on paper, textile, stone, and bone and in mixed media, with the bulk being limited-edition prints on paper. This impressive sculpture, one of sixty-nine Inuit sculptures in the collection, is by master carver Thomas Udjuk from Kangiqtiniq (Rankin Inlet), located on the west coast of Hudson Bay. The subject of family and community activity rendered in expressive, simplified forms is characteristic of much sculpture from this region, as is the hard, grey stone used.

Thomas Ugjuk (1921–2014), Community, 1973. Stone, 14 × 32 × 10 inches.

196

Th e BM O Un iv er se

YA ACOV AGA M

Remembrance and Growth, 1972–75

Y

aacov Agam, an Israeli sculptor, was born in Palestine. He studied art in Jerusalem and settled in Paris in the 1950s, where he eventually became interested in perceptual or Op art, an art that causes illusionary or perceptual effects in the viewer’s eye. Critics have claimed that Agam and other artists involved with the group called Nouvelle Tendance (New Tendency) sought a parascientific role for art. However, Agam’s foremost emphasis in his work has been spiritual. As one source reveals: “The driving force and the source from which I draw my inspiration stem from my desire to give plastic and artistic expression to the ancient Hebrew concept of reality, which differs in its essence from that of all other civilizations, and which, to my mind, has never found its true artistic expression.” In the 1960s and 1970s, the Harris family commissioned several works by internationally known artists for the Harris Bank in Chicago, and these pieces are now part of the bmo Financial Group corporate art collection. The large, colourful metal wall sculpture Remembrance and Growth has been hanging on the main floor of the Harris Bank’s 111 West Monroe building since 1975. In 2007, the artist mentioned in a personal correspondence that Harris suggested the title for this work, feeling that the piece expressed the purpose, history, and future of the Bank.

Yaacov Agam (b. 1928), Remembrance and Growth, 1972–75. Acrylic lacquer on aluminum, 132 × 252 × 6 inches.

Cultur a l C a pita l

197

GREGORY SCOTT

Color Grid, 2009

that do magical and unexpected things. Composed like a modernist colour-field painting, in the centre of this composition the artist has organized nine squares in three rows of three, each delineated by white paint on the canvas. Traditional references to static painting end there. Instead of painted colours, the checkerboard of squares contains a series of moving images – chromatic and representational – that, over the course of almost nine minutes, shift and flow through a kind of fractured narrative that is evocative, witty, and thoroughly fascinating.

Gregory Scott (b. 1957), Color Grid, 2009. Mixed media, archival digital print, oil on panel, hd video, 45 × 46.5 inches.

O

ver the years, the art that bmo has acquired to enhance its office spaces has reflected changing modes of expression and materials in contemporary artmaking by artists living and working in the countries the bank serves. Gregory Scott is one of a growing number of artists interested in exploring and expanding the demarcations between traditional and newer media. With Color Grid and related works, he challenges the definitions placed on photography, painting, and video by combining all three media in the creation of narrative works

198

Th e BM O Un iv er se

LOIS ANDISON

Heartbreaking 91, 2009

A

significant strand of contemporary art internationally is based on words or text. The bmo collection includes several such pieces in a variety of media including painting, printmaking, watercolour, neon, and electronic and mechanical works – Heartbreaking 91 being the most exceptional. Considerations of language as a medium and kinetic type as movement prompted Canadian artist Lois Andison to incorporate text in sculptures like Heartbreaking 91. She started with pencil and paper, not a computer, to work out the various words that could be formed from “heartbreaking,” organizing them in a meaningful sequence. Her finished sculpture was inspired in form by the game Scrabble, but reconceived as a mechanical piece using acrylic letter squares set on rods, programmed electronics, and motors that allow each piece to rotate from the letter to the blank side. Over the course of several minutes, the word “heartbreaking” kinetically deconstructs and reassembles to form ninety other words found through combinations of the thirteen letters and their reverse blank sides, before returning to the original source, “heartbreaking,” the ninety-first word. The experience is witty, poetic, and affecting, and, as the artist says, “self-reflexive as the performance is a self-fulfilling prophecy.”

Lois Andison (n.d.), Heartbreaking 91, 2009. Edition 3 of 3. Acrylic, metal, custom mechanics and electronics, powder-coated shelf, 5.625 × 40 × 4 inches.

Cultur a l C a pita l

199

ENRIQUE SANTANA

Lake Michigan, 2010 Enrique Santana (b. 1947), Lake Michigan, 2010. Oil on linen, 60 × 90 inches, unframed.

E

nrique Santana was born in Spain, where he received his training. The artist has been living and pursuing his career in Chicago since 1991. Santana is the recipient of the Government of Andalusia Gold Medal of Honor for his contribution to the arts. In 2010, Sanatana was commissioned by bmo Financial Group to create this extraordinary work, Lake Michigan, for the bmo Harris offices in Chicago. From the earliest times, nature has been a strong source of inspiration for artists. Indeed, it remains a subject of enduring interest and pleasure for artist and viewer alike. The natural environment dominates

200

Th e BM O Un iv er se

as an artistic subject in the Bank’s collection – in any medium or idiom. It is, therefore, not surprising that an artist such as Santana, celebrated for his keen powers of observation and interpretation, was commissioned to capture the great primal force that is Lake Michigan. One gallery description of him recently suggested that Santana rendered Chicago with an “all-knowing hand.” In the global urban experience, lakes and rivers are shapers, protagonists, connectors. Chicago is also intimately connected with waterways: they shape and are shaped by the city; they are the source of power,

commerce, and communication; they help to provide sanitation, give pleasure, and, as Santana shows us, beauty. They inspire poetry, art, and metaphor. Lake Michigan in particular holds a special fascination for Santana as a realist painter, who has rendered it in small- and large-scale works during various seasons and times of the day. His approach to the subject is decidedly poetic, yet few artists working in any medium have captured its dynamic, elemental beauty with such acuity. For Santana, no two ‘portraits’ of the lake are identical: each reveals yet another side to its changeable character.

JA M ES EARLE FR ASER

Victory, 1923

V

ictory by American sculptor James Earl Fraser was commissioned by the Bank to honour the “many members of the staff who made the last great sacrifice in the cause of liberty and civilization” in the Great War. The Bank ran an international competition and selected Fraser, a talented exponent of the Beaux-Arts tendency in sculpture. Beaux-Arts was inspired by Classical, Renaissance, and Baroque models in combination with a “virtuoso technical facility at modeling the human form,” in the words of one observer. Originally, the bankers desired a figure of a soldier in bronze. Fraser came back with a concept of a figure “emblematic not of death, but of victory.” Victory stands in the atrium of Montreal Main Branch, 9 feet high in Seravezza marble. She stands on an 8-foot-high pedestal of Botticino marble. The inscription “Patria” (Homeland) is on the side facing the Bank entrance, followed by the words “To the Memory of our men who fell in the Great War.” Fraser was a rising star in the American artistic community when he executed this sculpture. His works are particularly prominent across the major monuments and institutions of Washington, dc , and include Contemplation of Justice and Authority of Law at the Supreme Court of the United States. Fraser also executed medals and special coins, including the Indian Head (or Buffalo) US nickel. His most famous sculpture is End of the Trail (1915), depicting an American Aboriginal warrior slumped over on his horse.

James Earle Fraser (1876–1953), Victory, 1923. Serezza and Botticino marble, 165 × 64 × 64 inches (sculpture and base).

Pa r t T w o Two Centuries of Banking by the Numbers This section offers a different perspective on the Bank’s first 200 years. A series of charts and graphs tell the story of the Bank of Montreal in numbers. The very essence of the Bank’s business – any bank’s business – starts with numbers and statistics. The lifeblood of the Bank’s information flow – the holdings, investments, rates, yields, dividends, capital, reserves, profits and losses, and a hundred other measures – has been measured and tested, forecasted and predicted, reported, analyzed, and discussed for two centuries. Our contemporary world both inside and outside banking is accustomed to measures and comparisons by quarter and by year. Sometimes five- and ten-year performances are considered. By contrast, these glimpses into the life of the Bank – and the development of the economic and financial life of the nation – provide the long view.

ASSETS Total bmo assets in 1817, 1917, and 2016.

$

681,458,000,000 Assets in 2016*

150,000

$

Assets in 1817

$

403,980,000 Assets in 1917

* Second quarter

T w o Centur ies of B a nking by the Num ber s

205

DEPOSITS Growth in bmo deposits, 1827–2016.

$

496,000 in 1827

$

11,199,000 in 1867

335,439,000

$

in 1917

5,608,490,000

$

in 1967

444,793,000,000

$

in 2016*

* Second quarter

206

T w o C enturies o f Ba n king by the Num ber s

THE TR AJECTORY OF WEALTH GENER ATION: 1917–2016 How much would a single Bank of Montreal share purchased in 1917 be worth down the years? This chart answers that intriguing question by examining the growth in value of the stock at ten-year intervals, factoring in stock splits that occurred four times during this period. It also assumes that the investor used the dividends to buy more stock every year (at the average stock price for that year).

Through war, depression, national emergency and the many cycles of the North Atlantic economy, the Bank has a perfect record of delivering dividends and the share price has risen steadily. If you bought one share in 1917 for $222 ($3,600 in 2016 dollars) and reinvested every penny of your dividends, we estimate you would have at least 52,000 shares today worth more than $4.4 million at current prices.

$

No of shares

4.4 million

more than 52,000 shares in 2016

60,000

$ Value (2016 $) 5,000,000 4,500,000

50,000

4,000,000 3,500,000

40,000

3,000,000 30,000

2,500,000 2,000,000

20,000

222 3,600

$ 10,000

=$

1,500,000

in 2016 dollars

1,000,000

1 share in 1917

500,000 0

0 1917

1927

1937

1944

1947

1957

1967

1977

1987

1993

1997

2001

2007

2016

1944: 10-for-1 stock split 1967: 5-for-1 stock split 1993: 2-for-1 stock split 2001: 2-for-1 stock split

T w o Centur ies of B a nking by the Num ber s

207

LOANS bmo Loans, 1817–2016. $million

Loans

350,000

Panics of 1825 London stock market (often called “first modern financial crisis”)

300,000

1837 United States financial crisis

250,000

1817–1917

1857 International – famously called “first worldwide economic crisis”

200,000 $millions

1873 United States financial crisis – triggers two decades of economic depression

400

150,000

300

1901 New York Stock Exchange (nyse) crash

200

100,000

1907 New York bankers – nyse falls 50% from peak of 1906

100 50,000

0

1929 Great Crash triggers Great Depression

0

1800

1850 War of 1812

Reign of Queen Victoria 1838–1901 Rebellion of 1837

1900

1950 First World War

Second World War

Last Spike in the Canadian Pacific Railway Telephone patented Great Fire of Chicago

2000

2008 Financial Crisis

September 11 terrorist attacks on the United States Sir Tim Berners-Lee invents the World Wide Web Margaret Thatcher elected first female prime minister of the uk

Canadian Confederation US Civil War

Morse develops electric telegraph

208

T w o C enturies o f Ba n king by the Num ber s

Notes: (1) Since 1 November 2002, customers’ liability under acceptances have been included in Loans (previously included in Other Assets). Prior periods have not been restated. (2) Since 1 November 2011, bmo ’s financial statements

have been prepared in accordance with International Financial Reporting Standards. Results for years prior to 2011 have not been restated and are presented in accordance with Canadian gaap .

CUSTOM ER BASE Post–Second World War growth in bmo customer base, 1947–2015. North America’s rapidly expanding post-war economy fuelled unprecedented increases in household income and wealth. Banks and financial institutions also experienced something of a consumer-finance

Year Number of customers

revolution after 1945. People had more and more ability to spend, borrow, deposit, and invest. They also began to demand access to an expanding range of financial products and services. This is the story that underlies these statistics on bmo customers.

1947

1957

1967

1987

1997

2015

more than

more than

more than

more than

more than

more than

1,000,000

2,000,000

3,000,000

4,000,000

11,000,000

12,000,000*

in North Amercia

Source: Archival material, annual reports, and internal measures.

* As at 31 October 2015

T w o Centur ies of B a nking by the Num ber s

209

EM PLOYEES Number of bmo employees in 1817, 1913, and 2016.

7

1,883

46,166

1817

1913

2016*

Canada

30,330 * Second quarter

210

T w o C enturies o f Ba n king by the Num ber s

United States Other international

14,443

1,393

BR ANCHES AND ACCESS Number of bmo branches, atm s, and app downloads, 1817–2016.

Year

Branches

atm

App downloads**

1817

2

-

-

1917

172

-

-

1967

1,033

-

-

1977

1,234

78

-

1987

1,220

689

-

1997

1,246

2,035

-

2007

1,224

2,561

-

2016*

1,538

4,746

2,125,960

* Second quarter ** Includes bmo ® Mobile Banking App, bmo InvestorLine App, and bmo Harris Mobile Banking® App downloads (as of May 2016).

T w o Centur ies of B a nking by the Num ber s

211

M APPING GLOBAL OPER ATIONS bmo growth from one city in one country to an international presence.

1817 Montreal, Canada

2016* 22 Countries 5 Continents * Second quarter

212

T w o C enturies o f Ba n king by the Num ber s

BR ANCH NET WORK Expansion of bmo branch network, 1817–2016.

61.1

%

Canada

%

38.6% United States

of branches by country

2016*

0.3% Other International

2016

Number of branches

1967

1,800 1,600 1,400 1,200 1,000 800 600 400 200

1917

1817

1867

172

1867

1917

26

1,538

1,033

2

1817

1967

2016

Year

* Second quarter

T w o Centur ies of B a nking by the Num ber s

213

COM MUNIT Y GIVING Some examples from a long history of support to address a wide range of community needs, 1835–2015.

2015

$

2001

56.9

$1 million Millennium Park, Chicago (Founder grant)

million

2010–2014

$2.5 million United Way Neighbourhood Strategies, Toronto and Chicago

1800

1835

1900

1948

2015

£100 Montreal General Hospital

$10,000 relief fund for Ottawa-Hull fire

$100,000 University of Toronto

$650,000 Remai Modern Art Gallery of Saskatchewan

1850

1900

1950

2000

1871

1920

2013

$5,000 relief fund for

$250,000 McGill University

$5 million Rush University Medical Center, Chicago

Great Chicago Fire

1915

1996

$600,000 Chicago Community Trust (founding member)

$150,000 Royal Winnipeg Ballet

1912

1979

$2,000 disaster relief for rms Titanic tragedy

$50,000 Vancouver Art Gallery

1967 $200,000 Bank of Montreal Canada Centennial Scholarships 214

T w o C enturies o f Ba n king by the Num ber s

WOM EN IN LEADERSHIP The first women to hold senior positions at bmo . They were the first to break the glass ceiling at the Bank by assuming leadership positions across its operations.

1926

1939

1963

1967

1982

m&i Officer

Harris Personnel Officer

bmo Branch Manager

bmo Board Member

bmo Vice-Presidents

Gertrude M. Jacobs

Mary Kennedy

Rebecca Watson

Pauline Vanier

Deanna Rosenswig Dorothy Ottersen Catherine Irwin

2015 percentage of senior leaders who are women compared to 6% in 1991

37.5%

T w o Centur ies of B a nking by the Num ber s

215

bmo Today The final four charts offer four different perspectives on the present and future Bank. They are not meant to offer a comprehensive picture – just glimpses of the kinds of categories that will determine the success of bmo and Canadian banking in the future. Mastering these elemental categories – technology, employee engagement, training, and the system-wide stability of the Canadian banking system compared to the rest of the world – will be the primary responsibility of the current and future generation of leaders at bmo .

INVESTM ENT IN TECHNOLOGY Canadian banking investment in technology, 2005–14. Extraordinary investments in technology allow the people of bmo to confront and master the ‘creative gales’ of transformation coursing through the

industry. The application of these transformational technologies is very much an industry-wide phenomenon; hence, the view offered here of Canadian banking investment in technology, 2005–14.

Year 9.0

2014

8.2

2013

7.7

2012

7.0

2011

6.1

2010

5.8

2009

6.0

2008

5.3

2007

4.8 5.0

2006 2005 0.0

1.0

2.0

3.0

4.0

Source: Data courtesy of Canadian Bankers Association. Latest available data was for 2014.

216

T w o C enturies o f Ba n king by the Num ber s

5.0

6.0

7.0

8.0

9.0

10.0 $billion

EM PLOYEE GIVING The generosity of bmo employees – with time, effort, and donations – has become one of the defining features of the bank’s culture down

the years. The numbers are quite extraordinary, and reflect both an individual and collective ethos of community service.

Over

$82 million

donated and raised by bmo employees

More than

88,000

2011–15

91%

volunteer hours

Employee participation rate in United Way Campaign

2012–15 % Employee Participation Rate

2015

100 90 80 70 60 50 40 30 20 10 0

2011

2012

2013

2014

2015

T w o C entur ies of B a n ki ng by the N um ber s

217

INVESTM ENT IN HUM AN C APITAL Extensive training efforts for over two decades. bmo has been a recognized global leader in the training and development of its greatest asset: its people. Through the Institute for Learning (ifl ) [see page 39],

bmo has placed a top priority on investment in its own human capital. The result has been a superbly trained workforce ready to step up to the mark that a changing world is creating for them every day.

1994

Today*

1994

500

The ifl opened its doors

First bmo eLearning program developed

Leaders trained each year through custom internal and university programs

1.5 million Hours of learning per year

$

93.2 million

Spent on learning per year

* As at 31 October 2015

218

T w o C enturies o f Ba n king by the Num ber s

BANKING SYSTE M STABILIT Y AND SOUNDNESS A comparison of national banking systems, 2006–15, shows the stability of Canada’s banking system in international context. In contemporary times, Canada has had the soundest banking system in the world for several years running. Canada’s consistent top ranking is the product

of a blend of long-term stability in government policy, prudential regulation, and sensible and results-focused leadership from both the central bank and the chartered banks.

Soundness of banks (on a scale of 1 to 7)

7

Canada Australia Hong Kong sar Singapore

6

Luxemburg Switzerland G7 Countries – less Canada

5

4

0 2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Years

Source: Global Competitiveness Report, World Economic Forum, Switzerland, 2006–07 to 2015–16.

T w o Centur ies of B a nking by the Num ber s

219

Pa r t T h r e e The Material Culture of bmo Banking Can objects have biographies? They undoubtedly have a story to tell. Some objects are common, with long lives of service. Others have highly specialized functions and are used by a select few. Yet others function as symbols – of power, authority, legitimacy, victory, service, community, connection, and relationship. The third and final part of this celebratory retrospective focuses on a range of artefacts drawn from the history of the Bank. The people of the Bank of Montreal have engaged with all sorts of material objects just by the nature of the business. The material world – the material culture – featured here is that of the common objects and the tools of the trade, as well as the symbols, of Bank life and experience. They are united by their power to tell an aspect of the Bank of Montreal story. Naturally, their number multiplied over two centuries, embracing an ever-widening circle of objects from head offices and branches throughout the land. A great many of them were prominent for well over a century, changing only slightly over time: deposit slips, passbooks,

ledgers, calendars, and so forth. Many have disappeared with innovation, new ways of doing things, and technological transformations. What, exactly, is material culture? Well, we know one thing it’s not: it is not cataloguing and describing objects. The key element in material culture, as my historian colleague Maureen C. Miller writes, is that “it focuses on objects as sources of human action and ideas.” There are no people in this section, but people are absolutely integral. They used these objects; they worked with them; they imbued them with a particular meaning in time and space. The study of material culture is not just about the beautiful or valuable but also the useful and the everyday. It has been used by people in disciplines such as anthropology, archaeology, art history, and history itself. The first two parts of this book have shown how the history of the Bank of Montreal can be uncovered, discovered, and reconstructed from the historical record. The chapters and their entries are based on archival sources. This section, however, makes the history more inclusive

and multi-faceted. By broadening our source base, and by embracing the interesting and diverse material culture that the Bank has produced over two centuries, we get a fresh perspective on the meaning of the historical experience not only of the Bank of Montreal but also, in a wider frame, of Canadian banking. The material objects depicted here represent a virtual tour of the human and material experience within the Bank. Twenty-five have been chosen for both their symbolic value and their relevance to the lived experience of the Bank, its employees, and its customers – but even multiples of that number would still not have covered the entire experience of the material culture of the Bank. However, each artefact tells a relevant story and exemplifies an aspect of the Canadian banking experience. Documentation of all sorts – from ledgers to stock certificates and passbooks – are prominently represented and allow us to pull back the veil on practices, operations, and actions of bygone eras. Some artefacts tell the story of money: how it was handled and how the ‘grammar of money’ – its role, its function, and its cultural meaning – was transmitted. Other elements represent the engagement of the people of the Bank in a larger corporate or banking culture. Some reveal new relationships with groups, nations, and communities. More than a few are technologically based. There is even a lion and his cubs, who were born and currently live in Chicago. The direct encounter with material culture – with a single material object, sometimes only vaguely familiar, perhaps a relic of the past – can be both revealing and stimulating. It forces the contemporary viewer to confront an often-unfamiliar aspect of history – or to put it more bluntly: to confront how much we don’t know about the past and the lived experience of people. At its best, a focus on the material culture can lead us to ask new kinds of questions. It can also serve as a tangible point of entry to learn about an aspect of banking that has long faded from memory, replaced by new and more direct methods and objects.

222

Th e M ateri a l C ulture o f b m o B a nki ng

THE “M ILLER” CHEST

T

he “Miller” Chest has occupied an unassuming corner of the Bank’s museum in Montreal Main Branch for decades. This first seemingly innocuous artefact was named for the man who built it sometime in the latter half of the eighteenth century. It predates by at least two decades the establishment of the Bank itself. The chest is the nineteenth century’s answer to the challenge of protection of valuables in transportation. By contemporary standards it is, of course, rudimentary. But this chest and a few others like it that have not survived have been in dangerous and forlorn places: in the back of a stagecoach, dragged through the snow, hauled through brush and forest, and through the worst that a northeastern North American climate could throw at it. It would have crossed rough terrain, rivers, lakes, and international borders. Because of its contents – the wealth, treasure, and vital information of the Bank and the merchants and customers it served – the chest was one of the most anticipated objects to arrive in settlements and military outposts with precious currency and specie, not only for bankers but also for their expectant customers. It is an artefact clearly intended for utilitarian purposes only: anodyne, anonymous, just a black box, nothing to attract attention. These treasure chests of yore were, of course, also great objects of desire and perpetually in the crosshairs of highwaymen and criminals. Often, a decent portion of the wealth of the community would end up in these chests, destined for more secure places or for investment. The chest is very much a physical reminder of the hardships endured in early Canadian banking. The Bank received the chest as a gift in October 1943 from Katie Drummond of Kingston, Ontario. Her father was Andrew Drummond, a lifelong Bank of Montreal employee who joined the bank in 1847. Her more famous uncle was Sir George Drummond, a general manager and later president of the Bank. The M ater i a l Cultur e of b m o B a nking

223

DEPOSIT LEDGER NO. 1

The First Database

T

he deposit ledger was not only vital to the business of the Bank – in many ways it was the business of the Bank, encapsulated in the oversized book form. More than any other artefact, these ledgers symbolize the early business of banking. They were, in a sense, the earliest principal database of the Bank of Montreal. Shown here is “Ledger A, 1817,” a general account ledger for the Bank spanning the years 1817 to 1820. The ledger covers an impressive range of the Bank’s business. The names of personal and corporate accounts fill the pages. In this particular ledger, the head office accounts for instalment payments for the original

shares in the Bank are recorded as well as exchange bills drawn and purchased, notes sent to Quebec for collection, interest accounts, and dividend payments. It also covered bills payable and receivable, cash on hand, and real estate and expenses. Banking, like life insurance, for example, was an information-intensive business from the outset. Accounts and ledgers were only the beginning: the entire structure of credit reporting and credit worthiness would become an important part of the business of banking as well. Later, adding more sophisticated tools such as economic reports, summaries, economic forecasts, and similar ‘networked’ statistics brought both depth and intensity to the Bank’s emerging world of information. So, at the very deepest layer of the history of the Bank, at its foundations, you will find the ledger – the ‘accounting’ soul of the Bank. This ledger appears

at least a generation or two before the emergence of accounting as a professional activity in both Britain and the United States – in the mid-nineteenth century, when it was defined by a prominent American author of the period as “the art of keeping Accounts in such a systematic mode, that we may be enabled to know the real state of each branch of our mercantile transaction with ease and promptitude.” By the later 1800s, ledger-based bookkeeping began to take on a more scientific aspect, with new ways of organizing account classifications and spawning the creation of the accounting profession. As the Bank grew and the banking system developed, the need for a more systematic approach to the procurement and recording of accurate information was required, revealing something approximating ‘objective truth’ in flows of capital and information into and out of the Bank.

THE CERTIFIC ATE OF STOCK

T

o the contemporary eye, this stock certificate looks standard enough, especially since stocks – in banks and virtually every other area of economic activity – constitute the universal language of capitalism, investment, and ownership. The original organization of the Bank under a joint-stock form allowed a group of Montreal businessmen and merchants to get together to establish and manage their new venture. Other banks, by contrast, could often be privately owned or run as family concerns, private banks, or limited partnerships. The Bank’s relationship to the stock certificate is a deep one. The shares in the “Montreal Bank,” were among the first shares to be issued in Canada. In the late 1810s, banking forms and institutions were only just taking shape across the North Atlantic world. Questions about private versus joint-stock forms of banking ownership and governance were being discussed and debated. How liable were the stockholders to be? The idea of “limited liability” for bank stock did not develop until much later. A detailed prescription for stocks, dividends, and the responsibilities of stockholders was carefully laid out in the Bank’s Articles of Association. The capital stock of the Bank was initially £250,000 divided into shares of £50 each.

Bank of Montreal stock certificates like the one featured here became a consequential type of document in the emerging economic and financial life of Canada. With other bank and financial stocks, it helped to create an early securities market in the country and a more sophisticated financial system of trade and exchange along with it. The development of the Montreal and Toronto stock exchanges were the result. Remarkably, a Bank of Montreal share dividend has been declared in every single year of its 200-year existence with two exceptions: in 1827 and 1828. This stock certificate is dated 16 March 1839 and certifies that two shares are held by Duncan McFarlane of Quebec. The certificate is signed by Peter McGill, president of the Bank, and countersigned by Benjamin Holmes, the Bank’s cashier. It comes with a curious instruction: to transfer the shares of “Montreal Bank Stock to William Bailey, Assistant Commissary General, reserving to myself any dividend or bonus that may be declared and payable in 1839.” This was likely done for the most classic of reasons: McFarlane owed money.

The M ater i a l Cultur e of b m o B a nking

225

THE BANK’S CORPOR ATE SEAL

T

his impressive artefact is the official seal of the Bank of Montreal. Its origins have been lost in the mists of time, but the impression it makes is of the Bank’s historic coat of arms used after 1837. Corporate seals were, and in many cases still are, used to certify official documents, deeds, or acts. This particular seal indicated the formal sanction of the Bank, its signature through an embossed imprint into wax of an official act. Artefacts, however, are rarely that straightforward. The seal is also a symbol of the growing power and authority of the Bank in both colonial Canada and in the North Atlantic world. It stood for the legitimacy of the Bank, underwritten by the reputation of the institution and the personal probity of its leaders. It represented a promise and a guarantee. In a world where it was difficult to procure information and verify reputation easily, symbols and seals were tangible manifestations of security, legitimacy, and trust. They were also extremely difficult to replicate, unique in their rendering, and so carried with them an element of security. When business people or customers saw the Bank of Montreal corporate seal on a document, they knew immediately what it meant and who stood behind it.

226

Th e M ateri a l C ulture o f b m o B a nki ng

THE WILLIA M NOTM AN ALBUMS, 1884

I

n 1884, one of Canada’s most famous and most prolific nineteenth-century photographers, William Notman, was commissioned by the Bank of Montreal to take photographs of the members of staff. Notman accordingly agreed to send “first class artists” to all the branches and have photographs taken. Notman’s studio in Montreal grew rapidly in the late 1850s and 1860s, especially after his photos found royal favour with Queen Victoria. His influence was cross-border, moreover: nineteen of the twenty-six branches of his firm were in the United States. The idea of Montreal’s most prestigious photographer photographing staff members was, according to the internal correspondence of the era, “received with good favour” – as well it might be. Photographs, as Notman’s biographers perceptively note, were not only the most common icons of the age but they also “represented more than a mere chronicling of events, more than the creation of ‘likenesses,’ more than a new voguish aesthetic. Rather, they exhibited and conveyed to others a sense of the century’s dramatic dynamism.” Of course, there were practical reasons – there always are – for the Bank to commission photographs of its staff. But one suspects that during the 1880s, the growing pride in the Bank of Montreal as an institution, the confidence of its people, and their place in the past and future of the country all warranted capturing the images of those who were making it happen. Notman’s massive and historically precious photography collection is at Montreal’s McCord Museum. The Bank of Montreal Archives has eleven albums of photos from the studio of Wm Notman & Son.

THE DICTOGR APH, 1970s

T

his extraordinary telecommunications relic was used in the executive suite of the Bank’s Montreal head office. It functioned as a supplementary intercom system to provide direct connection among a relatively small number of executives: the call buttons labels indicate this machine served the top decision-makers of the Bank in the late 1970s. The names on the switchboard are: G.L. Reuber (former president), W.D. Mulholland (president, 1975–81; ceo , 1979–89; chairman, 1981–90), J.A. Whitney (former executive vice-president and chairman, Credit and Policy Committee), H. MacDougall (vice-chairman), W.E. Bradford (former deputy chairman), J.H. Warren (former vice-chairman), W.E. Bateman (former executive vice-president and head of Corporate and Government Banking), R.H. Call (former senior vice-president, Corporate Planning), G.E. Neal (former executive vice-president and treasurer), Robert Muir (former vice-president and secretary), and four others, including Richard O’Hagan, the Bank’s communications mastermind of the 1980s. Judging from the cast of characters immortalized on the call buttons, the conversations connecting through this device must have been, at the very least, interesting, frequently important, and often taking place on the verge of momentous decisions for the destiny of the Bank. As several chapters in this book attest, in almost every sense, the late 1970s and early 1980s was a time of technological change, reorganization, and transformation of the global financial services sector. In other words, there would have been no shortage of subjects to talk about.

228

Th e M ateri a l C ulture o f b m o B a nki ng

M EMORIALS TO THE WORLD WARS

the individual names of those killed in action. Gardner spoke briefly: “Here are inscribed the names of those whom we shall see no more. They were our comrades. We mourn their loss, mindful too of those who were

near and dear to them. While we are gathered here in this busy financial centre it is well to remind ourselves that there are values in life more precious than those dealt with in the market place.”

Montreal Head Office, 1923 and 1951

“T

wice in a quarter century, the call to arms was heard … and our young men were not found wanting.” So begins the memorial edition of the Staff Magazine of 1951. These ‘artefacts’ are not so much objects as memorials to those who gave their lives to King, Commonwealth, and Canada. Of the 1,414 Bank employees who enlisted for the Great War, 230 of the men were killed. In the Second World War, 1,450 employees enlisted, with 84 of the men killed. For the fallen of the Great War, the figure of Victory is their memorial. She measures 9 feet in height, sculpted in white Seravezza marble, and stands upon a pedestal of Botticino marble, 8 feet high, giving a total height of 17 feet. At the unveiling in 1923, Bank President Sir Vincent Meredith’s remarks were brief but poignant: “We have met here to-day with mingled feelings of sadness and of pride, of sadness because two hundred and thirty of the bravest and best of our staff, those to whom we looked to fill the highest positions in the service, will not return to us. Of pride, because they went forward at the call of their King and Country to save the British Empire from the ruthless domination of a foreign foe. This beautiful monument will for all time remain a memorial for their valour, and their self-sacrifice will be to all of us an inspiring and enduring memory.” The memorial wall was unveiled on 24 April 1951 by Bank President B.C. Gardner in front of a crowd of Bank employees and relatives of the honoured dead. Together with Gordon Ball, general manager, he read

The M ater i a l Cultur e of b m o B a nking

229

THE CIRCUL AR

T

he circular memorandum began in 1855 and rapidly became the key channel for command, control, and coordination of an expanding information network and branch system. It was issued from the head office, typically from the general manager. As the Bank grew and extended its operations across the country and deepened its involvement in the New York and London markets, the circular dealt with an expanding range of subjects. Between 1855 and 1922, the Bank generated fifteen bound volumes of circulars issued from the head

office to branches and agencies in the network. The early circulars were handwritten, then duplicated by letterpress. The advent of the typewriter facilitated the production and distribution of these administrative orders and guidance. The subject matter of these circulars, taken together, offers a detailed picture of the growing importance of the head office in chartered banking in Canada. The highly detailed and prescriptive nature also suggests that new methods of scientific management were being brought to bear on the banking system. The great challenge in a transcontinental network of branches is the risks associated with too much local autonomy; these circulars are an attempt to anticipate those challenges. The circulars also offer a mosaic of branch and agency openings, staff changes, and performance

bonuses for staff (which were publicly circulated!), statistical reporting, new policies, alerts, and the like. It is through the circulars that we see the pulse of the expanding operations of the Bank of Montreal – its challenges and the opportunities it was able to seize. The circulars reflect a great push to standardize procedures and reporting, especially as the Bank grew in the late nineteenth and early twentieth century. They were also concerned with the establishment of an economic intelligence network, often asking branch managers to report on competitive and economic conditions in their area. In many ways, these circulars laid a solid administrative foundation for the Bank to grow consistently and with the integrity that so distinctively marked its operations in this period.

THE PASSBOOK

T

he passbook was a booklet issued by the Bank to an account-holding customer for recording sums deposited and withdrawn. From the Bank’s earliest beginnings to very recent times, this document was one of the most highly identifiable physical connections between the Bank, the branch, the customer, and his or her money. It was a personal document and an official record. This small document passed routinely between customer and teller after each transaction, thereby earning its name. Passbooks were a small but customer-focused innovation in how banks dealt with the personal and collective information flows about accounts. It certainly beat having customers occasionally check the large, unwieldy ledger account books. The Bank of Montreal Corporate Archives has passbooks that date as far back as 1820 – three years after the establishment of the institution. The cultural significance of the passbook should not be overlooked. In 1952, the Bank of Montreal was the first bank to have a children’s wicket where youngsters could make transactions (usually deposits, and usually held in trust). In this instance, the passbook’s relationship with the younger generation attempted to instill a sense of the value of money, savings, and thrift – in the contemporary parlance, ‘financial literacy.’ There is no question that most passbooks told a highly personal tale – individual stories of earnings, savings, interest, and withdrawals; stories of big circumstance, lucky and otherwise; stories of triumph and loss, hope and aspiration; stories of endurance and perseverance. The rise and decline of the passbook chronicles how information and its associated technologies change the way accounts are managed and experienced. Advances in mechanization and information storage facilitate continuously less expensive, more comprehensive, and certainly more convenient ways to deliver personal information – from passbook, printed statements, and instant online access to up-to-date statements any time of day or night.

THE JOHN WOOD CLOCK

Time Lords

T

his impressive clock presided over the main banking hall of the Molson’s Bank building on St James Street. It was ordered for the Bank in 1866 from John Wood, a noted Montreal clockmaker whose clocks also kept the measure of the racing hour at the Grand Trunk Railway Depot. This artefact was chosen because of the importance of the measurement and passage of time to banking. It governs so many aspects of the business of banking – the precision of the work schedule, the timing of opening and closing (the famous banker’s hours), the time-release locks on bank vaults, the timed deposits and interest, and so forth. Time is no longer connected to eternity, but rather with measurement. We need to understand not only what an object is and how it looks but also what it means to the people related to it. This clock had a commanding presence in the banking hall – everyone at all times was not only aware of the time but could also read it. Its classic Roman numerals and ornate wood casing hearkened back to the past, yet hid something transformational about the prominence of time. The clock’s installation in the 1860s came in a milieu where time, like many other elements of contemporary life, were being more regimented and standardized. It was in this era, after all, that standard time zones were introduced. The industrialization of the North Atlantic world depended on greater precision and a loyalty to exactitude and the schedule. Telegraphs and communications hastened the pace. Complex transportation systems increasingly relied on standard time to avoid calamity. Time becomes a commodity. When time is money, we value every second differently. Now, sometimes a clock is just a clock. But for Canadian bankers of the Victorian era, as for their broader society, we can sensibly suggest that their era was one in which the concept of time was shifting, morphing, adapting into something experienced differently than that of their predecessors in the profession.

THE BANK OF MONTREAL CENTENARY M EDAL

A

Centenary Medal was struck in 1917 to commemorate the Bank’s 100th anniversary. The Bank’s leadership began preparations to celebrate the landmark event the year before, just as the First World War was reaching an awful intensity in Europe and ever greater numbers of Canadian troops were joining the conflict. The Bank had two of its favourite firms of architects advise on the medal: Barott & Blackader in Montreal and McKim, Meade & White in New York. The latter had been responsible for some of the Bank’s most famous and enduring architectural symbols. The medals were conceived and executed by American sculptor Ulysses Ricci, whose artistry can be seen in a range of architectural sculptures in banks and large enterprises across the United States. The obverse features the most recognizable architectural landmark of the Bank of Montreal: the domed headquarters at Place d’Armes – complete with rinascimento facade, six Corinthian pillars, and a pediment holding one of the largest sculpture groups in the country executed by Scot Sir John Steell. The reverse displays the Bank’s coat of arms, wreathed on the periphery with the names of the presidents and general managers in 1817 (John Gray and Robert Griffin) and 1917 (Sir Vincent Meredith and Sir Frederick Williams-Taylor). The gold medals were struck in New York and awarded to Meredith and Williams-Taylor. The silver medals were struck by Henry Birks & Sons and awarded to the board of directors and the executive, the managers, and others with a quarter-century or more of service. The bronze medals were given to executives and managers with less than twenty-five years of service. This medal and its history reveals a great deal more than what is on the medal itself. It also shows how the generation in command one hundred years ago

decided to commemorate their history, who was to participate, what exactly was to be celebrated, and why. The medals, and their strict distribution protocol, showed how the values of service and loyalty were cherished by the leaders of the Bank. General manager Sir Frederick Williams-Taylor paid very close attention to the execution, the images, the font, and the rendering of the medal: nothing was to be left to chance, because the medal would be left to posterity – and they were to be ready, at all costs, by 3 November 1917. The small

number of medals struck is a further indication of the particular nature of the celebration. Commemoration of the centenary of the Bank also occasioned a brief but informative pamphlet history of the Bank, the mounting of the names, in bronze letters, of the 1817 and 1917 board and senior executive on a wall in the Montreal Main Branch, as well as some other festivities.

The M ater i a l Cultur e of b m o B a nking

233

RULES AND REGUL ATIONS FOR THE BR ANCHES

B

ecoming a great Bank in the nineteenth and twentieth centuries meant a lot of things. One of elements successful institutions had to get right was how to effectively reign over an increasingly complex and often geographically distant bureaucracy whose main purpose was to handle money. The answer for the banks of the late nineteenth century was strict adherence to rules and regulations. The rule book offers a glimpse into the regimented world of turn-of-the-century banking. The rule book featured here was published in 1901 under the authority of Sir Edward S. Clouston, the

234

Th e M ateri a l C ulture o f b m o B a nki ng

general manager, and was the possession of Bank Officer Campbell Sweeny. It was prescriptive, precise, and pointed. It covered an extraordinary range of responsibilities and duties about the business of banking, his staff, and the wider world. Article 7 requires the manager to “keep himself informed of the general news of the neighbourhood”; Article 21 required that the manager would “ascertain the general habits of his staff, and, if they are such as may affect the Bank’s interests injuriously … the circumstances shall be reported to Head Office.” Other instructions covered everything from the nature and use of telegraphic communications to the handling of nitroglycerine for oiling locks. There were 371 rules in the rule book. This document is very much a product of its times: demanding and didactic in laying down the law.

Of course, officers of the bank would have entirely expected such a document to do so in order to “secure a regular and faithful administration” in the affairs of the Bank. The preface admonished every officer to “make the book a study so that there shall be no excuse for departure from its instructions.” But rules and regulations, in whatever way they were called, updated, or communicated thereafter, constituted a vital part of making the system safe, minimizing risk, and ensuring the smooth functioning of Bank of Montreal banking. Many of the non-managerial functions listed in this 1901 rule book are now carried out or assisted by information technology.

THE GOLD SC ALE

T

his artefact is a gold scale from the Bank of British North America (bbna )’s Dawson City branch. The bank followed the Yukon gold rush of the 1890s, establishing a branch in Dawson Creek on 19 May 1898 to serve the active and sometimes chaotic gold mining industry there. “Our instructions were to spare no expense in reaching our destination as soon as possible,” wrote the branch’s first manager, David Doig. The bbna was acquired by the Bank of Montreal in 1918, and maintained a vibrant branch network in the country. The scale could be found on a desk in a frame-andcanvas tent on Queen Street in Dawson Creek. The scale had travelled with Doig and two bank clerks,

E.O. Finlayson and J.F. Stow, for forty-seven days – by steamer, dogsled, pack pony, and canoe over 1,500 miles from Vancouver to Dawson City. The trek itself has become the stuff of legend. The intrepid bankers had also brought $202,000 in cash to open the bank. The scale was an essential tool not only for the nuggets that would come in for sale but also for the gold dust that was used as currency ($17.50 to the ounce in 1898). The branch eventually found more secure premises: a twostorey wood building, 970 square feet in area, complete with a steel-lined brick vault. The town itself was essentially one unpaved street along the riverfront with log and frame buildings occupied by trading companies, saloons, dance halls, and brokers’ offices. “Gambling seems to be the staple industry, and the fleecing of ingoing Klondikers was

carried on merrily with great success in the most open and barefaced manner possible,” reported Doig. The population of 4,000 would swell to 25,000 in the summer months at the height of the gold rush. The Klondike camp was estimated to have produced $200 million in gold in the several years following its discovery in August 1896. The scale pictured here is symbolic of the readiness of the Canadian banks to adapt to changing economic conditions and opportunities, and especially to serve the unique nature of Canadian economic development – much of which has involved resource extraction or mining.

The M ater i a l Cultur e of b m o B a nking

235

THE PROTECTOGR APH

T

his machine was invented in 1870 as a means of protection against cheque forgers. The machine pictured here is the Todd Check Writer manufactured by G.W. Todd & Co. of New York. The machine quickly gained widespread acceptance among banks and large enterprises, with the company claiming 85,000 in use across North America. Check Writers were used to print the face value on negotiable securities in relief so that the value could be both seen and felt. The fraudulent alteration of cheques, securities, cash certificates, bills, receipts, and other forms of exchange instrument was a continual challenge for financial institutions. This machine printed a mark before the digits in the face value, which made it impossible to change the amount after the cheque had been printed. The corrugated surface of the digit stamps was pressed into the paper fibres, which absorbed the special ink. This technique made it virtually impossible to erase or even chemically remove the printed money value. This machine is a testament to the power of the darker side of banking – the eternal struggle to keep money in the hands of those whose money it is, and out of the hands of those whose money it is not. The Protectograph was part of a long line of technologies aimed directly at keeping the bank and its customers safe from fraud.

236

Th e M ateri a l C ulture o f b m o B a nki ng

THE BLICKENSDERFER T YPEWRITER

T

he typewriter appeared at a time when the Bank and other information-intensive industries were beginning to collapse underneath the weight of the data and information they had to process. Information control and processing became not just a challenge but also an imperative. The typewriter was invented in 1873 by C.L. Sholes, a Milwaukee journalist, and marketed by the Remington Arms Co. in the United States. The technology went through various iterations and improvements, including the introduction of “ten-finger typing.” The diffusion of the typewriter would, in time, become an important influence in the unfolding information revolution of the late 1800s by allowing faster processing of data and a reduced dependence on often hard-to-read handwriting. The typewriter was also a key agent in the transformation of nineteenth-century management, putting it on a more solid systematic and ‘scientific’ basis. The typewriter also began to change the organization of work and the composition of the workplace. The skills demanded by the typewriter, as well as the growth in office jobs generally, opened doors for women to enter the workplace. By the end of the century, the majority of stenographers and typists were women. The Bank’s adoption of new information processing technologies such as the typewriter allowed it to manage its growing business both at the local point of contact in the branches and in the regional and head offices. As we have seen with other artefacts, banking was becoming a highly regulated and regimented business. In fact, it had to be in order to stay on top of its growth and the increasing complexity of managing a large enterprise. The typewriter can be considered the workhorse of the information age at the turn of the twentieth century. The typewriter pictured here was invented by George C. Blickensderfer. It was a small, portable

writing machine that had the advantage of changeable type styles – a unique design feature. And the Blick typewriter was priced lower than the more expensive models. It had yet another advantage: it was one of the first truly portable typewriters with a full

keyboard – not the qwerty keyboard most of us are used to, but the dhiatensor keyboard. The Blickensderfer Model 7 seen here, offered in 1897, was the deluxe version of the basic design.

LEDGER FOR FOREIGN AGENTS, 1885

“F

oreign Agents Ledger 14th July 1885 to 30th April 1901 Bank of Montreal Head Office, No. 10” is a record of the Bank’s transactions between itself and its international agencies and foreign banks. The entries span the North Atlantic world, detailing the Bank of Montreal’s connections with its Chicago and New York agencies, the Bank of New York, the National City Bank of New York, and several other New York banks. The ledgers also detail the relationships between the head office and the branch at St John’s, Newfoundland. The London sections are particularly noteworthy, as the Bank was active in the City through its own agencies and operations there, as well as with the Bank of Liverpool. Their handling of the Dominion of Canada accounts in both London and New York were especially relevant. The connections into the North Atlantic world of finance exemplified here extend back to the very beginning of the Bank’s operations. Three months after the Bank opened for business in November 1817, Prime, Ward, and Sands were appointed agents of the Bank in New York. For the main Canadian colonial bank, such links were vital to the success of the Bank as the capital markets in Canada were slow to develop. The networks of finance and capital that were so created – and that are in a sense captured in this foreign agents’ ledger – reveal a kind of first wave of globalization that was binding together the North Atlantic world in the nineteenth century. As a country that depended so heavily on international connections and terms of trade, the Bank of Montreal’s connections and correspondences helped to generate, foster, and strengthen Canada’s bonds of commerce and exchange with the rest of the world.

VICTORIAN CRYPTOGR APHY

s described in Speed, Distance, Access, page 89, and bmo Bankers and the Dream of Nation, page 149, the telegraph was a vital part of the transportation and communication revolution of the nineteenth century. It heralded the death of distance and the acceleration of decision-making. It was vital to the information and control-processing revolution. For financial institutions, technological transformation, then as now, can lead to complete financial transformation. Transmitting intelligence and sensitive financial data through public telegraph lines demanded a code language. The one developed by the Bank was

continuously updated down the years. As the introduction to one such codebook (in 1960!) suggested: the codebook’s purpose was “to conceal the meaning of messages and to minimize telegraphic charges. Important or confidential messages should be closely coded in order to disguise the meaning as far as possible; where there is not the same need for secrecy, economy of words is the primary objective.” The codebooks were high-value intelligence documents and so were kept in a safe or a locked compartment in the custody of the manager or accountant. The chain of custody during office hours was carefully set out, and only authorized personnel would be able to see or use the codebook. Here are some examples from the 1887 codebook of the kind of cyphers used – randomly selected and perhaps unintentionally amusing!

Information

Information in Cypher

The Number “2”

Above; in Pounds Sterling: “Abreast”; in Dollars: “Abridge”; in Cents, “Abridgement” “Extort” in Pounds Sterling “Extorted”; in Dollars “Extols” “Furnishes”

Telegraph Codebooks

A

The number “10 Million” “Cannot Open Vault; lock out of order; have sent for locksmiths to ____: Panic in Montreal Panic in New York You have made a mistake – Bank of Nova Scotia Bank of Toronto Baring Bros. & Co. Bank of Montreal Head Office Canadian Bank of Commerce Bank of England

The Bank of Montreal Corporate Archives has a collection of telegraph codebooks from 1878 to 1965,

“Jerking” “Jerks” “Notoriety” “Raging” “Ransack” “Rational” “Plutonic” “Remember” “Plodding”

including those from the Merchants Bank of Canada, the Molsons Bank, and the Harris Bank in Chicago.

The M ater i a l Cultur e of b m o B a nking

239

M INUTE BOOK H, 1905–09

T

he Bank’s Minute Books began the official record of the meetings of the board of directors on 9 August 1817 and have continued since. The books form a virtually complete factual record of the decisions taken by the board, including the opening and closing of branches, the hiring of personnel, loans, advances to companies, note circulation, new currency issue, and the like. The Minute Book is, therefore, one of the classic documents of Bank of Montreal history. This particular Minute Book records the decisions and actions of the board between 26 December 1905 and 26 August 1909. More than a few entries deal with counting and burning notes in circulation (an important board responsibility at the time). Approvals for loans made, bills discounted, and exchanges purchased also figure prominently. This period was also witness to a number of acquisitions that required board approval, in particular, the purchase of the Ontario Bank in 1906 and the People’s Bank of New Brunswick in 1907. What you typically won’t find in these Minute Books are debates and proceedings. Who said what, who agreed and disagreed, who objected, who promoted a cause – all of those elements need to be sought elsewhere in the historical record. What the books do contain, however, is a precious weekly account of the emergence of Canada’s senior bank. In contemporary times, boards naturally do not meet as frequently – typically on a monthly basis. The Minute Books contain the tangible results of the strategies deployed, the decisions and risks taken, successes celebrated, and dangers confronted or averted. Reading them from week to week, cover to cover, volume to volume offers a glimpse at the structure and construction of Canada’s first bank.

240

MONEY BOXES

M

oney boxes, penny banks, piggy banks: whatever the name, the desire to secret away hard-earned coins is as old as the notion of saving itself. The origins of the folk practice of using piggy banks is said to come from the habit of using clay jars (‘pygg pots,’ named after the rudimentary type of clay used to make pottery). By the nineteenth century, these piggy banks became objects of pleasure meant to inspire children to the virtue of thrift while having a bit of fun in the process. It was a practical but subtle way to induce financial literacy in the young! The choice of theme underscored moral principles or lessons: a mother eagle feeding its young, or the recalling of a familiar and popular story. The two mechanical money boxes pictured here from the Bank’s heritage collection do both. The first is the “Eagle and Eaglets” – a cast-iron bank with a large eagle standing on one side facing two of its young in the nest. When you place a coin in the eagle’s beak and press a lever, the eaglets rise from the nest looking for food. As the eagle bends forward to feed them, the coin falls in the nest and disappears. The device was patented by Charles M. Heen of Chicago in 1883 and made by J. & E. Stevens Co. The second bank is called “Jonah and the Whale” – a rectangular cast-iron coin box with the biblical personage Jonah in a small boat on top at one end and a whale at the other. A coin is placed on Jonah’s back, a lever is pressed on the left side of the base, and Jonah is ‘swallowed’ by the whale (as in the Old Testament story from the Book of Jonah) – and the penny, of course, follows. The bank was patented by Peter Adams in 1890 and manufactured by the Shepard Hardware Company.

CHA M PIONSHIP TROPHY, MONTREAL BANKERS HOCKEY LEAGUE

T

242

he artefact pictured is a sterling silver trophy on a wooden base, presented by the American Bank

Th e M ateri a l C ulture o f b m o B a nki ng

Note Company to the Montreal Bankers Hockey League in 1911. Growth of the Bank across the country as a financial institution also meant growth as a social and cultural institution. The corporate culture of the Bank is expressed not only in its values, principles, what it does, the tools it uses, and how it works but also in the way it plays. For the people of the Bank in the head office and the branches, being a Bank of Montreal employee

involved a tangible sense of belonging, an esprit de corps that has manifested itself in vastly different ways across time and space. In the first part of the twentieth century, Canadian business institutions from finance to manufacturing were spawning large corporate organizations burgeoning with young clerks and aspiring professionals looking for something more than work. Naturally, many of them turned to hockey. The Montreal Bankers Hockey League was established in 1903 when Bank of Montreal President Lord Strathcona offered a cup to the best bank-clerk hockey team. Many major branches across the country fielded teams, and the leagues were in hot competition. As this artefact shows, the major struggle between 1911 and 1922 for the championship of the league was between the Bank of Montreal and the Royal Bank of Canada, with the Bank of Commerce firmly in third position. During those years (with a break during the war years), the Bank of Montreal won the trophy three times, the Royal Bank twice, and the Commerce once. Branches from other cities such as Toronto, Hamilton, Winnipeg, Saskatoon, Edmonton, and, in fact, most every other major city in Canada also fielded competitive teams in their district and in a number of leagues (Commercial League, the Bankers Hockey League, the Financial Hockey League, and a host of others across the Dominion). Some of the players would go on to play nationally in professional leagues. Bank hockey matches routinely attracted impressive numbers: in Montreal, between 4,000 and 5,000 fans would come to every game and cheer on their team. Hockey was not the only sport in which Montreal bankers competed, and the sports were not restricted to men. Tennis was popular beginning in the 1930s (especially women’s singles). Skiing became particularly popular in the 1970s and 1980s. Each generation seeks recreation and pursues leisure in different ways. Generations of Montreal bankers turned to sports in large numbers, as individuals and as members of teams, playing on fields and in arenas across the country.

THE PENSION FUND SOCIET Y SEAL, 1884

T

he Pension Fund Society of the Bank of Montreal was established on 1 July 1884 with assets of $263,677. It was organized to provide for retired Bank officers and employees “incapacitated through age or infirmity,” with a provision for annuities to widows and minor children upon untimely death. An Act of Parliament was passed officially setting the Society into legislation on 1 May 1885. Bank employees initially established an organization for this purpose in 1860; at that time, it involved up to two-thirds of the officers of the Bank. The original provision was to pay a pension to any employee of the Bank with ten or more years of service, who was over sixty years of age, and declared to be incapacitated or infirm from properly performing his duties. The pension was to be 1/50th of his or her salary at the date of superannuation for every year of such service in the Bank up to 35/50ths of the salary. It was also not to exceed $5,000 per year. The terms and rules changed substantially over time of course, and as the Bank grew. The pension fund was among the early examples of its kind in Canada. Its private nature meant that provision for long-serving employees could be made while creating a pool of capital that could be invested for future provision. The bylaws and structure of the Society have changed significantly down the years, but the Society itself is one of the longest-running pension funds in the country. In June 2015, members approved the Society’s dissolution, and in February 2016, the pension plan transitioned to a modernized trust structure. This artefact’s date of origin is unknown, but it is likely that the 22-pound seal was struck not long after the incorporation of the Society.

The M ater i a l Cultur e of b m o B a nking

243

M ANUAL FOR TELLERS, 1965

244

Th e M ateri a l C ulture o f b m o B a nki ng

F

or most of its history in the last three generations, the Bank of Montreal has been one of the country’s largest training organizations – by virtue of its size and the necessity to confer constantly evolving personal, business, and technological skills across a widely distributed workforce.

This artefact comes to us from the 1960s and was required reading for every teller in the system. The booklet outlined the basic tasks and responsibilities of a teller, including sensible advice about handling cash books, cheques, frauds and forgeries, utility payments, payrolls, and such like. The language, tone, and attitude of this document represented a significant departure from its more, shall we say, didactic instruction manuals of the previous generation. The foreword begins: “As bankers, we are engaged in a service industry. Service means helping people .” There is an explicit recognition of the primacy of the customer and the importance of customer service. “The Bank of Montreal has nothing to sell except banking services,” the foreword continued. “Our competitors have the same services for sale. The only difference there can be is the more friendly and efficient manner in which the staff of the B of M render these banking services to customers and to the public.” The manual underlined the need for accuracy and precision in the teller’s work, but by far the greatest emphasis was on attitude toward the customer. “They are not an interruption to our work – they are the reason for it … We’re not doing the customer a favour by serving him; he is doing us a favour by maintaining his bank account with us. He is not an outsider to ‘my bank’; he is the most important part of it.” The emphasis on the role of the teller in the Bank was properly placed – they were, indeed, most often the first point of contact with the wider public. The teller position was also the employment entry point for women joining the Bank. In fact, in the Canadian banking industry of the 1960s, women comprised the majority of the workforce – in 1960, 55.6 per cent and by 1970, 67.1 per cent. In the coming years, that female workforce would begin to push beyond the confines of the counter wicket to the executive office to help guide the destiny of the Bank.

“… that thou mayest prosper …” THE BANK OF MONTREAL/ WASK AGANISH BELT, 1994

T

he Bank received this leather belt as a gesture of friendship from the Cree community of Waskaganish on the occasion of the opening of the Bank’s branch in the town, located at the southern tip of James Bay at the mouth of the Rupert River. In exchange, the Bank presented Billy Diamond, chief of the Waskaganish First Nation, a scholarship to be awarded to a top-performing student aspiring to a career in business.

This was the Bank’s first Aboriginal branch in Quebec. In order to serve the Cree community there, the Bank translated key banking forms and product brochures into Cree and recruited its personnel from the community. Information sessions on the banking system for elders, youth, and the broader community were also part of the integration of the Bank into Waskaganish. The Bank also became the official sponsor of the 1994 Inter-Band Aboriginal Games, in keeping with its commitment to the Aboriginal community. The Bank moved into Aboriginal banking in 1992, with Senior Vice-President Ron Jamieson as the Bank’s first executive in charge of the Aboriginal Banking portfolio. The objective: to contribute to the economic self-sufficiency of Aboriginal communities,

businesses, and individuals across Canada. This was the fifth branch of its kind on First Nations territory, with branches already on reserves in British Columbia, Northwest Territories, and Ontario. The Bank had also collaborated with the federal government to ensure that individuals and enterprises on reserves were eligible for small business loans and other forms of government incentives to promote business. In contemporary times, the Canadian Council for Aboriginal Business has recognized the Bank’s commitment to Aboriginal peoples with multiple Gold-level Progressive Aboriginal Relations (par ) certifications. Certification signals First Nations communities that these companies are good business partners, great places to work, and committed to prosperity in Aboriginal communities.

M-Bar Chic? THE PROMOTIONAL BOW TIE, 1977

T

his artefact comes directly from the Bank of Montreal promotional catalogue of March 1977. It featured a whole range of sales promotion aids to “familiarize you with various materials and concepts created to help your branch increase business.” The catalogue suggested that each aid could be considered a “specialized tool” to sell activities. The bow tie ($5.95 for the regular, $2.95 for the clip-on) was just one of a number of personal items for sale that included earrings, bracelets, cufflinks, tie bars, lighters, pencils, charms, and the like. The tie came in blue, brown, or burgundy. Branded clothing would likely not have suited every taste, but this comes down to us as an artefact of a particular age that began to test the limits of promotion. In its enthusiasm to promote the Bank’s services, the catalogue offered unorthodox, sometimes cool, sometimes lighthearted ways to get the message across. This branding also remains a way to telegraph the firm’s image in unexpected ways, while having the employee feel an additional connection to the institution. An M-Bar on a bow tie is fun and outlandish, and like the branded cigarette lighter, can fall in and out of fashion according to contemporary mores and tastes. What is elegant and chic in one decade may look dated in the next. Tastes and usages have evolved somewhat since 1977. Yet, the desire to promote your brand and perhaps have some fun in doing so seems to be a constant!

246

Th e M ateri a l C ulture o f b m o B a nki ng

bmo Harris’s Lionheart HUBERT T. LION

H

ubert is a cartoon lion who helped the Harris Bank introduce itself to the world of retail banking in the late 1950s. When the Harris bought the Chicago National Bank in 1960, Hubert’s image helped to establish a warm, friendly image for the Bank. By any measure, Hubert has been a remarkably durable and successful ‘spokeslion’ for the Bank and the most recognizable symbol in Chicago banking, for years vaulting Harris into the leading-bank position in terms of advertising. Hubert the Lion has a long pedigree. The Harris Trust and Savings Bank began using the lion as its symbol in 1911, but the Harris family association goes back to the bank’s founding in 1882. The cartoon character had several parents. Dr Agha, a New York art consultant, did some layouts that would prove to be the forerunner to Hubert. From this idea, Ben Laitin, Norm Houk, and Dick Weiner of Leo Burnett Company, an advertising agency, developed the cartoon character “Hubert the Harris Lion” in the fall of 1957 for the 1958 advertising campaign. Hubert first appeared in the Chicago Tribune on 26 March 1957. The bankers of the Harris agreed to the name – after some suggestions were considered and discarded (Harris, Leo) – and used the spokeslion for a savings advertising campaign. Later consideration of a possible name change elicited a memorandum from Hubert himself on 6 February 1958 (on Leo Burnett Company letterhead, however) agreeing to a “face-lift” but resisting any name change. “Hubert is just right for my new role. Aristocratic but not snobbish. Unusual but not bizarre. Faintly amusing but not snicker-making. Dignified but not stuffy. So why can’t I be Hubert, like I was christened … Shucks fellers. Why not just let me be? Hubert that is.” Hubert was a sensation, commanding widespread attention not only from the public but also from public relations professionals across the United States. He

was used in print from 1958 on. He debuted on tv in 1962 with a series of animated twenty-second spots and eventually became one of the most recognizable fictional animals in the United States, alongside Smokey Bear and Tony the Tiger. Hubert also knew how to draw new customers with Hubert-inspired promotions that set records. His popularity continued on television. He was reproduced in ceramic cookie jars, clocks, and the original Hubert doll. If Leo Burnett created Hubert, it was Chicago-area artist Sam Koukios (1929–2009) who standardized Hubert’s look. Koukios was the official Hubert artist for over three decades, called upon for virtually every advertising campaign when Hubert was needed. On Koukios’s death in 2009, Senior Marketing Executive Justine Fedak eulogized him as the artist who “brought so much character” to the lion, ensuring Hubert kept with the times. Hubert has become one of Chicago’s most recognized and beloved icons. He has also been one of the most successful advertising phenomena in the history of Chicago banking. Hubert has transcended his category to symbolize trust, comfort, and credibility in the Bank’s offerings and expertise. He has also become a cultural phenomenon with whom bmo Harris bankers are proud to be associated.

The M ater i a l Cultur e of b m o B a nking

247

EPI LO GU E

T

his book has presented a complex and comprehensive cross-section of two centuries of the history of the Bank of Montreal. I have tried to offer a fresh perspective about what we believe we know about the Bank’s history by momentarily taking 200 subjects out of their time-bound context. It gives us a chance to look at them in a new way, as if for the first time. It allows us to re-present them through a multi-dimensional yet integrated approach.

Subjects vs. Objects This book has dealt with subjects rather than objects – a subtle but important difference. A subject can simply be something that is a theme or an issue. It can also be a branch of knowledge. As an adjective, a subject becomes something affected by an occurrence or environment, subordinate to the power of another. As a verb, subject becomes something that causes or forces something to happen. By contrast, an object is acted upon, presented or placed before – as a material thing.

The people, the events, the symbols, the projects, the technologies, the environments, the buildings, and the elements that make up the Bank’s story were in varied ways, subjects. In vastly diverse arenas and time periods, they exerted influence and, at the same time, were shaped by their environment. Individually, each entry – from the founders, to the documents, to the days of decision, to the performance charts, to the special artefacts chosen to represent the material culture – forms a piece of the Bank’s history, contributing in its own way to the larger story, sometimes in epic ways, sometimes in infinitesimal. Without exception, each piece of the bmo mosaic contributes to a complex contemporary portrait of Canada’s first bank, and one of Canada’s founding institutions.

Revel ations This book allows the Bank to be seen through 200 different subjects over time. It has attempted to capture the richness and the complexity of the historical and contemporary record. However,

mere objects could not hope to portray that rich experience on their own. That much, I hope, is obvious. Thus, from researching and writing this book, there are some subtler elements about the making of the Bank of Montreal that I would like to share as a final reflection. They relate not to the many parts, but to the whole. In physics, unified field theory suggests fundamental forces and elementary particles, once thought distinct, diverse, or separate, can be considered a single field. This is an elegant metaphor for thinking about how things cohere together and what they tell us. So in this case, what does the Bank of Montreal’s ‘single field’ – its universe – tell us? What is first striking about the bmo experience through these two centuries is the dialectic relationship between dynamism and form, between the energetic ability to adapt and the structures that endure. (This relationship has been written about in other contexts, most brilliantly by twentieth-century scholar Paul Tillich.) Whether it was building a financial system, promoting

economic development, or competing in regional, national, and global markets, it was the people who made a positive impact at the Bank. The leaders mentioned here, and those countless Bank employees who made the Bank better and reside in posterity, were able to build a successful formula by striking the right relationship between the strategic response of the moment while envisioning and carefully building forms built to last, structures and reputations. Also striking are the subtle continuities that persist in the history of the institution. The differences are easily enough spotted. The contrasts between Edwin King’s Bank of Montreal (1860) and Bill Downe’s bmo (2017) create a high-definition portrait of discontinuities in strategy, style, attitude, vision, and mission. The continuities show how through ten generations, the people of this organization spent their best powers in building a Bank that aspired to build; a Bank that was deeply committed not only to its own people (leaders, investors, shareholders, employees), naturally, but also to a larger set of causes over time – nation building, community engagement, the development of specific economic sectors, securing the place of Canada in the financial world, and the list goes on. Not least, the foundation of the Bank’s business – the customer – has undergone a constant transformation across the centuries. So, a paradox: the ‘history’ shows that the Bank has been deeply engaged in something very much focused on the ‘present’ and the ‘future’: adaptation and transformation. Adaptation: to constantly changing environments – government, regulatory, market, customer-focused. Transformation: technological, strategic, administrative, social, cultural,

250

EP ILO GUE

national, regional, global. Those changes did not happen always at the same speed, nor with the same tools or strategies, but they happened consistently and, over time, responded to the unique circumstances that presented themselves. Each chapter shows that unbroken arc of history in one form or another: people, buildings, tools, advertisements – all of it. To borrow a popular contemporary phrase, all of it makes up the dna of the Bank of Montreal – the “instruction manual” for building life forms. For those who think, okay, most big Canadian banks share a large part of their dna , they would be right. Similarly, humans and chimpanzees share 98.8 per cent of their dna , yet the differences are obvious! That 1.2 per cent is crucial. The point is that institutions can be similar, and yet very different. So it is with each of Canada’s great chartered banks. So it is, in particular, with Canada’s first bank. It’s the combination, the sequence, the dna ‘pairings’ that make the difference and allow similar national and enterprise cultures to share much yet assert their uniqueness. I leave you with a final thought, one that dwells on both transformation and vision. The Canadian Museum of History in Gatineau features a remarkable work by Kwakwaka’wakw artist Beau Dick – a transformation mask. When the mask is closed, we see Raven. When it opens, we see the first human being between the split image of a bird flanked by two supernatural Wolves. At the Brooklyn Museum in New York, a mask shows Thunderbird; opened, it reveals a human face flanked by two lightning snakes. At the Field Museum in Chicago, a transformation mask created by Xániyus (Bob Harris) before 1893 (Kwakiutl, Vancouver Island) shows a shamanic figure when opened. These masks of the

Northwest Coast First Nations tell of change and transformation. The structure of these double masks allows them to show an outer mask and an inner mask, past and present, before and after, but all in a close relationship, both part of the same mask. The history of an institution as complex and deep as that of Canada’s first bank has striking parallels to these extraordinary cultural tools. Over time, a transformation takes place. What you see changes into something that is related, but distinct; unified, but somehow new and separate. Over time and space, over the course of this book, what one sees at the beginning changes into something else, but a shared connection always remains. In my introduction, I suggested that the vision to which people in the Bank across the generations aspired has been plural and multiple. It changed in substance over time. In the end, that vision ‘greater than themselves’ was ultimately about the future – how to succeed in it, how to secure it, and how to make it happen in a complex, uncertain, and competitive world. That’s the spirit that the Bank of Montreal carries with it into the next century of its experience.

ACKNOWLEDGMENTS

A Vision Greater than Themselves has been an ambitious project. It began life as a challenge: Chief Executive William A. Downe’s challenge to me to produce a history that was conceptually innovative, relevant, and broadly accessible, and that captured the spirit of the Bank of Montreal as a dynamic organization in time. Historians are at their best when they can meet the challenges that their audiences set for them. In large part that is what has animated the conceptualization, research, and writing of this book. My greatest debt, therefore, is to William A. Downe. From the commanding heights, some leaders can see how everything is connected in time and space – past, present, and future: a vision beyond. Bill is just such a leader. He is also someone who creates the conditions for great things to happen. I also take pleasure in thanking Mr Downe’s predecessor, F. Anthony Comper. Mr Comper’s support of forerunner historical projects helped to lay a foundation for both this project and for the definitive history that is to come. There are few who possess a greater or finer sense of the historical spirit than Tony Comper. My thanks, therefore, is not merely formal, but heartfelt.

Acknowledgments in books such as these have a danger of becoming name-checking exercises. I will try, instead, to give you a sense of my debt to people. The procession begins with the Bank’s Book Committee under the chairship of Brian J. Smith, who has watched the bmo universe unfold as it should for many years. Thanks are extended to him and to the committee. The fact that their work is not yet done (there is a definitive history on its way) is even more of a reason to thank them for their service thus far. David J. Montgomery has earned a special place as one of the project’s earliest and most convinced supporters. I thank Maurice Hudon, Paul Deegan, and Peter E. Scott for their counsel and commitment to this project. To this list, I add all those who helped us along the way with the procurement of hard-to-get images, dossiers, and statistics. There are so many who have also helped me personally on countless occasions. Thank you, John D. Stoneman, Charis Willats, Carole Lam, Nina Adloo, and Emily Rugole. My heartfelt thanks to the Bank’s Bicentennial Committee under the executive sponsorship of L. Jacques Ménard, cc , oq , whose personal support and friendship have been one of the most satisfying

aspects of my work. I also thank Claude Gagnon for his encouragement and generosity. This book would simply not have been possible without the assistance and enthusiastic support of the Bank of Montreal Corporate Archives – Yolaine Toussaint, archivist; Shawna Satz, associate archivist; and Erin Bienert, associate archivist. They have spent countless hours on thousands of requests and made the impossible possible. Thank you. Intense projects forge intense collaborations. Sometimes they create new friendships and connections. Ron Taylor of bmo has contributed a great deal to this project and has done so with an eye for the right image and angle, a superb work ethic, and a humanity that tamed passions and got things done. Thank you, Ron. Exceptionally, fortune or circumstance allows a figure to rise: the right person at the right time. Fiona M. Skelding is such a person. Fiona’s passionate intelligence, her spirit and insight, her unstinting support of bmo and its history, and her friendship have been an unfailing inspiration. Fiona, you have my sincere gratitude. Historian Tim Müller has been my assistant on this book since its beginning. His superior organizational

skills, research capacities, and high sense of professionalism allowed this project to proceed as smoothly as it did. Combine an extraordinary capacity for work, a commitment to operational excellence, and an extraordinary expertise in Bavarian beer – all of which were important in the making of this book – and you have a sense of the debt I owe to Tim. Thank you also for your loyalty and friendship. I reserve a special place of honour for Miada Neklawi, a vice-president of communications for the Bank. She has been the project’s guardian angel, guiding it from the very beginning. All institutions have their pathfinders, those who find a way. Miada has acted as both advocate and champion at key times. Thank you. The McGill-Queen’s University Press has been my home for two decades. Executive Director Philip J. Cercone has built an institution to the greater glory of Canadian publishing. To you, maestro, and to your team, my heartfelt thanks for your uncompromising commitment to producing books of the highest distinction.

252

AC KN O W LEDG M ENTS

Finally, I offer thanks to my wife, Flavia, my greatest supporter whose self-sacrifice has contributed in hidden but important ways to the success of this book. From different disciplines and perspectives these people have rallied together around the idea that their history matters, that it is worth doing right, and that it should be understood, celebrated, and shared. That many have done so with such professionalism, generosity, and warmth is something I shall always cherish. Their commitment pays eloquent tribute to the spirit of the contemporary Bank of Montreal.

Dr Laurence B. Mussio Montreal, Quebec June 2016

A N OTE O N SO U RCES

A Vision Greater than Themselves: The Making of the Bank of Montreal, 1817–2017 has relied on intensive and extensive research. A total of 30,000 pages of original research informed the direction and contents of this book. The author and his team compiled over 1,000 image options for the book, and reduced the 1,200 artefacts available at the Bank of Montreal Corporate Archives to a final twenty-five. After the chapters were outlined and related subjects were chosen, a research dossier that could run as many as 200 pages was prepared. It contained relevant sources from the Bank of Montreal Corporate Archives both in Montreal and Chicago as well as from several other public and private repositories in the North Atlantic world, including Library and Archives Canada and the National Archives of the United Kingdom. The dossiers included a variety of secondary sources drawn from the literature relevant to the subject matter at hand – biographies, articles, books, and monographs. In some cases, the records of the contemporary Bank of historical value but not yet in the archives were consulted. A few of bmo ’s divisions were also conscripted to offer assistance with specific entries, and especially with image procurement. In 2017, Whom Fortune Favours: The Bank of Montreal and the Rise of Canadian Banking, 1817–2017 will be published by McGill-Queen’s University Press, the

publisher of this book. The forthcoming book is a very different undertaking from the one you are reading now: it will draw on massive archival documentation to produce the first definitive, professional history of the Bank of Montreal over two centuries. As a substantial contribution to Canadian business history, that volume will include an extensive bibliography that will cover all the sources also used in this book. In the meantime, following is a reference list of direct quotations appearing in the text that come from an external source. Direct quotations that come from internal Bank documents or sources, or primary evidence from other archives and repositories, are not referenced here, but will be included in the scholarly work.

The Founders through Time page 6: “He believed that the existence and value of good [securities] should be made known to all potential buyers”: Jay Pridmore, Harris: A History of the Bank. page 10: “The object of this Trust is to give the investor of moderate means the same advantages as the large Capitalists, in diminishing the risk in investing in Foreign and Colonial Stocks, by spreading the

investment over a number of stocks, and reserving a portion of the extra interest as a Sinking Fund to pay off the original capital”: Neil McKendrick and John Newlands, f&c : A History of Foreign and Colonial Investment Trust. page 10: “it was the precocious talents of City lawyer Philip Rose”: Neil McKendrick and John Newlands, f&c: A History of Foreign and Colonial Investment Trust. page 10: “trustworthiness, security, prudence and reliability”: Neil McKendrick and John Newlands, f&c: A History of Foreign and Colonial Investment Trust. page 10: “be remembered as a zealous and wise reformer, and as the boldest judge who ever sat on the English bench”: Neil McKendrick and John Newlands, f&c : A History of Foreign and Colonial Investment Trust.

Determining Destinies: Leaders and Leadership page 14: “Commencement on the Grand Stage of the World”: Alfred Dubuc, “Molson, John (1763–1836),” in Dictionary of Canadian Biography, vol. 7,

University of Toronto/Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/ molson_john_1763_1836_7E.html. page 14: “reject all national distinctions”: Alfred Dubuc, “Molson, John (1763–1836),” in Dictionary of Canadian Biography, vol. 7, University of Toronto/Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/molson_ john_1763_1836_7E.html. page 15: “most striking figure in Canadian banking history”: R.E. Rudin, “King, Edwin Henry,” in Dictionary of Canadian Biography, vol. 12, University of Toronto/Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/king_edwin_ henry_12E.html. page 15: “Napoleon of Canadian Finance”: R.E. Rudin, “King, Edwin Henry,” in Dictionary of Canadian Biography, vol. 12, University of Toronto/Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/king_edwin_henry_ 12E.html. page 15: “King of Canada”; “a little God who dares to treat the representatives of all other banks”: R.E. Rudin, “King, Edwin Henry,” in Dictionary of Canadian Biography, vol. 12, University of Toronto/ Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/king_edwin_henry_ 12E.html. page 15: “truculent and uncompromising”: R.E. Rudin, “King, Edwin Henry,” in Dictionary of Canadian Biography, vol. 12, University of Toronto/Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/king_edwin_henry_ 12E.html. page 15: “very peculiar”: R.E. Rudin, “King, Edwin Henry,” in Dictionary of Canadian Biography, vol. 12, University of Toronto/Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/ king_edwin_henry_12E.html. page 16: “Greatest Creative Genius”: Alexander Reford, “Stephen, George, 1st Baron Mount Stephen,” in

254

A N OTE O N SO URC ES

Dictionary of Canadian Biography, vol. 15, University of Toronto/Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/stephen_ george_15E.html. page 16: “the greatest creative genius in the whole history of Canadian finance”: Alexander Reford, “Stephen, George, 1st Baron Mount Stephen,” in Dictionary of Canadian Biography, vol. 15, University of Toronto/Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/stephen_ george_15E.html. page 16: “doubt and difficulties vanished and hope and confidence revived”: Alexander Reford, “Stephen, George, 1st Baron Mount Stephen,” in Dictionary of Canadian Biography, vol. 15, University of Toronto/ Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/stephen_george_ 15E.html. page 16: “a masterpiece of the Italianate style in Canada”: Alexander Reford, “Stephen, George, 1st Baron Mount Stephen,” in Dictionary of Canadian Biography, vol. 15, University of Toronto/Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/stephen_george_15E.html. page 20: “There were men like him in London … but few in Canada.”: “Sir Vincent Meredith,” Journal of the Canadian Bankers Association, Spring 1929. page 20: “during the last 25 years there was hardly a … campaign launched for betterment of conditions of the relief of suffering, or the advancement of the city but had the encouragement and sympathy … as well as the practical support of this banker”: “Sir Vincent Meredith,” Montreal Daily Star, 24 February 1929. page 20: “it is not only the brilliance of his genius”: “Sir Vincent Meredith,” Montreal Daily Star, 24 February 1929. page 21: “Perhaps there is no other man in Canadian business life”; “whose career so aptly illustrates the reward of conscientious business energy as that of Chas. B. Gordon.”: “King Honors a Montreal Man,” Montreal Gazette, 25 August 1917.

page 21: “kindly demeanour and disarming modesty”: “Sir Charles Blair Gordon – Appreciations,” Times of London, 3 August 1939.

The Written World of bmo: Defining Documents and Directions page 33: “in firm support of Canada’s fighting men in the campaigns which must be undertaken before victory can be achieved”: Canada, Parliament, House of Commons, Debates, 17 May 1943.

A Grow th Business: bmo and Its Canadian Acquisitions page 48: “The immediate absorption of the Ontario Bank by the Bank of Montreal” … “is a most gratifying proof that our banking system and banking institutions are too strong to be shaken by even the worst effects of personal or corporate delinquencies. Instead of alarmed depositors and panicky noteholders who crowd to the closed doors of embarrassed banking institutions under less stable conditions, we witness the simple transfer of the accounts to the largest and strongest of our chartered banks. The injurious disturbance of commerce and finance which elsewhere attends and follows the forced closing of a banking institution is thus entirely averted, and the business goes smoothly on without a loss or inconvenience to the general public”: “Strength of Our Banking System,” The Globe, 12 October 1906. page 48: “the highest praise should also be accorded to the president and directors of the Bank of Montreal for their prompt action and assuming all the Ontario Bank’s liabilities to depositors and noteholders” … “all chartered banking corporations also feel a responsibility to the business community for the general stability of the fiscal system under which they operate, and are directly interested in maintaining that stability and sustaining unshaken the confidence of the public. The Bank

of Montreal has risen to all the demands of this broader responsibility and promptly assuming the liabilities of the Ontario Bank before the nature of its impairment could be known to the general public, and even before the story of its difficulties could obtain general circulation. Simultaneous with the story of personal mismanagement and recklessness has come the announcement that all the liabilities of been assumed, that accounts will be transferred to the Bank of Montreal, and that all obligations will be liquidated with open doors”: “Strength of Our Banking System,” The Globe, 12 October 1906. page 51: “wild days of rumours, much excitement on the stock market, and some concern among financial men generally”: “Merchants Bank to be taken over by Bank of Montreal,” Montreal Star – Late Ed., 16 December 1921. page 51: “adventurous banking carried on by the General Manager” … “transacted without the knowledge of the Directors”: “Editorial,” Globe 9 February 1922.

Days of Decision: Pivot Points page 55: “without fanfare”: Merrill Denison, Canada’s First Bank, vol. 1. page 55: “23d October 1817. the bank will begin its operations on monday the 3d of November next. Bank Hours from 10 o’clock a m to 3 o’clock p m . Discount days, Tuesdays and Fridays. Bills and Notes for Discount to be sent under cover to the Cashier on the days preceeding”: Quoted in Merrill Denison, Canada’s First Bank, vol. 1. page 58: “The Monetary King of Canada”; “the Napoleon of Canadian Finance”: R.E. Rudin, “King, Edwin Henry,” in Dictionary of Canadian Biography, vol. 12, University of Toronto/Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/ king_edwin_henry_12E.html. page 61: “The corporate historian delving in to the archives of the Bank of Montreal a few decades

from now” … “probably will find that 1984 was a watershed in the institution’s evolution”: Tracy LeMay, “Domestic Shift, Takeover Reshaping Bank of Montreal,” The Globe and Mail, 6 April 1984. page 61: “Let me suggest to you a great pipe running from north to south through which flows $106 billion in trade a year, total volume and an undetermined amount of transactional items. We have a large apparatus at one end of the pipe … The economic activity between the two countries is so enormous that it is obvious logic to get yourself on both ends of the pipe”: Quoted in “$546m gets B of M U.S. Bank,” Toronto Sun, 5 September 1984. page 64: “marked by the emergence of new business models [and] the disruption of incumbents and the reshaping of production, consumption, transportation and delivery systems”: Klaus Schwab, The Fourth Industrial Revolution.

Currency, Cash, and Legal Tender: bmo’s Richly Denominated Legacy page 75: “Individually, many Newfoundlanders were skilled and seasoned survivors, but as a people they depended on a precarious export trade, with a narrow range of goods produced in the country’s basic and interconnected industries of fishing, forestry, and mining”: Peter F. Neary, White Tie and Decorations: Sir John and Lady Hope Simpson in Newfoundland, 1934–1936.

Speed, Distance, Access: bmo’s First-to-Market Technologies page 91: “It is not surprising”: “Bank of Montreal Introduces Fully Integrated Automatic Banking in Canada,” Toronto Stock Exchange Review, September 1963. page 91: “that the Bank of Montreal has taken the initiative to become the first Canadian bank to provide a fully integrated data processing operation”: Toronto Stock Exchange Review, September 1963.

A Sense of Pl ace: A National Architectur al Legacy page 97: “Certainly no other bank is in possession of such a room”; “and it is indeed very doubtful if the large American or even English cities can produce its equal either in size, decoration or appointment”: “Palace of Marble: Bank of Montreal Moves into New Premises Today,” Montreal Gazette, 15 June 1903. page 97: “probably the largest, and architecturally the most monumental, bank building in the world”: “Palace of Marble: Bank of Montreal Moves into New Premises Today,” Montreal Gazette, 15 June 1903. page 100: “the Wellington and Sparks Streets facades are heroic size relief panels depicting the future and past of Canada allegorically. Bronze and iron grilles have been used for the large windows at the ends of the building”: “The New Bank of Montreal Building,” The Journal of the Royal Architectural Institute of Canada 9 (September 1932). page 100: “a traditional temple bank in Modernistic guise”: “The New Bank of Montreal Building,” The Journal of the Royal Architectural Institute of Canada 9 (September 1932). page 100: “most noteworthy building project since the … head office enlargement of the turn of the century”: “The New Bank of Montreal Building,” The Journal of the Royal Architectural Institute of Canada 9 (September 1932). page 100: “severe, contained, classical composition”: “The New Bank of Montreal Building,” The Journal of the Royal Architectural Institute of Canada 9 (September 1932). page 113: “april 9 – a bank !”: Doug Bell, ‘Bank of Montreal Opens at Watson,” Whitehorse Star, Yukon, 28 April 1960. page 113: “The bank will be located next to the Watson Lake Trading Post … this year has begun with an important and necessary addition to the community”: Doug Bell, “Bank of Montreal Opens at Watson,” Whitehorse Star, Yukon 28 April 1960.

A NOTE ON SO URCES

255

page 116: “complete and final proof that banks have gone modern”; “freeform Danish teakwood furniture”: “Snorkles and Overdrafts,” The Vancouver Province, 22 October 1955. page 116: “Just think. You can drive from the office on pay day; cash your cheque; go to a drive-in restaurant for dinner and then on to a drive-in movie; go home without getting out of your car”: “Branch Bank Has Curb-Side Teller,” The Vancouver Province 21 October 1955. page 116: “one of the few managers in the country to own but one initial”: “Snorkels and Overdraughts,” The Vancouver Province, 22 October 1955. page 116: “You might think a bank is a bank, but when you find one that has dumb-waiters, and loungers for employees, and comfortable chairs for customers, and manager’s office that permits the public actually to see the boss sitting there keeping track of the income and the outgo, and handsome Danish furniture, and all and all, it is worth writing home about methinks”: The Vancouver Sun, 29 October 1955. page 117: “the last type of building one might have examined for symptoms of translucence would have been a bank. It says something for modern architecture that it has been able to overcome the reluctance of bankers and the banking public, and their need for an unsubtle symbol of reliability and security, to the point where [the Don Mills branch] could be designed”: “Two Branch Banks, Don Mills, Ont.,” in The Canadian Architect, October 1957.

“In the Cause of Architecture,” in The Architectural Record, March 1908. page 123: “designed to serve people rather than overwhelm them … There is no longer room for rampant growth. In this age, planners and builders more and more must look to creating functional, people-oriented structures rather than edifices for personal glamour or glory”: “Lady with a Hard Hat,” Daily Commercial News, 8 October 1975.

bmo’s Most Wanted: Protecting Your Money page 132: “The accommodation provided is unlimited and local business people and any who care to use it will find this security they can enjoy any time outside of banking hours much to be grateful for”: “Depository Installed,” Elora Express, 12 June 1958.

bmo Bankers and the Drea m of Nation

page 117: “so that costs would not get out of hand”: “Two Branch Banks, Don Mills, Ont.,” in The Canadian Architect, October 1957.

page 148: “The public opening of this important route took place on Thursday last under circumstances of peculiar interest … Among the guests who assembled on board the ‘Princess Victoria’ at about ten thirty a.m. were the Earl of Gosford, Sir Charles Gray, Sir George and Lady Gipp, Mr Elliott secretary of the Commissioners, and several of the Legislature Council and House of Assembly, also, a number of the mercantile body and garrison and many respectable strangers to the number of about three hundred”: “The public opening …,” Montreal Gazette, 23 July 1836.

page 117: “in the vanguard of a clarified understanding of the function of bank architecture”: “Two Branch Banks, Don Mills, Ont.,” in The Canadian Architect, October 1957.

page 149: “Victorian Internet”: Tom Standage, The Victorian Internet: The Remarkable Story of the Telegraph and the Nineteenth Century’s Online Pioneers.

page 119: “Architecture is life, or at least it is life itself taking form, and therefore it is the truest record of life as it was lived in the world yesterday, as it is lived today or ever will be lived”: Frank Lloyd Wright,

page 149: “allowed symbols to move independently and faster than transportation”: James W. Carey, Communication as Culture: Essays on Media and Society.

256

A N OTE O N SO URC ES

page 150: “Canada is one of the most over-rated Colonies we have, but it is heartily loyal and makes its loyalty pay … as for the country as a whole it is poor and crushed with debt. The Supreme Government owes about thirty-five million pounds altogether, and every province has its separate debt, as also almost every collection of shanties calling itself a ‘city.’ The Canadian spend money and we provide it. That has been the arrangement hitherto, and it has worked out splendidly – for the Canadians – too well for them to try another scheme with the Canadian Pacific, which they must know is never likely to pay a single red cent of interest on the money that may be sunk in it”: Quoted in John Murray Gibbon, Steel of Empire: History of the Canadian Pacific. page 152: “the lung of Canada, carrying commerce into our arteries and remote veins, expelling our goods, our wheat, our minerals”: Canada, Department of Railways and Canals, Welland Ship Canal. page 152: “has been unlocked by triumphs of engineering”: Canada, Department of Railways and Canals, Welland Ship Canal. page 153: “biggest bank financing venture in Canadian history”: Clair Balfour, “Churchill Falls Provided Credit of $150 Million,” Globe and Mail, 21 December 1968. page 154: “the biggest credit facility ever afforded a private, public or para-public company” … “undoubtedly one of the great success stories of 1977–78”: “Canadian Banks Form Group for $1.25 Billion Loan,” First Bank News, February 1976. page 154: “a good deal for both the borrower and lenders”: “Canadian Banks Form Group For $1.25 Billion Loan,” First Bank News, February 1976.

On the Pl aying Fields of North A merica : Sponsorships page 173: “forceful return to Canadian basketball”: Morgan Campbell, “Toronto Raptors, bmo

Team Up in Sponsorship Deal,” The Toronto Star, 28 October 2013. page 180: “They shared our vision for the entire community to become the State of Hockey that exists today”: “Minnesota Wild Announces Multi-Year Partnership With bmo Harris Bank,” 15 September 2015, accessed 11 January 2016, www.wild.nhl.com.

Cultur al Capital: Bankers and Art page 194: “magician conjuring up, out of the earth, out of his palette, giant trees, extravagant skies, a whole enchanted nature”: Jean Chauvin, Ateliers – Etude Sur Vingt-deux Peintres et Sculpteurs Canadiens.

Deposit Ledger No. 1: The First Database page 224: “the art of keeping Accounts in such a systematic mode, that we may be enabled to know the real state of each branch of our mercantile transaction with ease and promptitude”: T. Jones, Bookkeeping and Accountantship, Elementary and Practical. page 227: “represented more than a mere chronicling of events, more than the creation of ‘likenesses,’ more than a new voguish aesthetic. Rather, they exhibited and conveyed to others a sense of the century’s dramatic dynamism”: Gordon Dodds, Roger Hall, and Stanley Triggs, The World of William Notman: The Nineteenth Century through a Master Lens.

page 195: “Art is art, nature is nature, you cannot improve upon it … Pictures should be inspired by nature, but made in the soul of the artist; it is the soul of the individual that counts”: “Emily Carr, 1871–1945, National Gallery of Canada, accessed 11 January 2016, www.gallery.ca/en/see/collections/ artist.php?iartistid=915. page 197: “The driving force and the source from which I draw my inspiration stem from my desire to give plastic and artistic expression to the ancient Hebrew concept of reality, which differs in its essence from that of all other civilizations, and which, to my mind, has never found its true artistic expression”: “Israeli Consul Guest of Museum,” in Desert Sun, 28 January 1976. page 200: “all-knowing hand”: “Santana,” Maya Polsky Gallery, accessed 11 January 2016, www.mayapolskygallery.com.

Part Three: The Material Culture of bmo Banking page 221: “it focuses on objects as sources of human action and ideas”: Maureen C. Miller, “Introduction: Material Culture and Catholic History,” The Catholic Historical Review vol. 101, Centennial Issue 2015, No 1.

A NOTE ON SO URCES

257

IM AGE CREDITS

Images reproduced in this book but not listed below are used with permission from or courtesy of bmo Financial Group and/or Harris Bank, or are in the public domain.

Page 36: Photographer: Frank Grant.

Page 185: Photographer: Jim Ryce.

Page 56: Courtesy of McCord Museum, Montreal.

Pages i, 2, 33, 35, 45, 49, 62, 64, 82, 83, 85, 86, 89, 123, 127, 128, 133, 139, 141, 162, 201, 221, 223, 227–46: Photographer: Christian Fleury.

Page 81: By permission. Bank of Canada/Avec la permission. Banque du Canada.

Page 186 (top): Ginette Letondal as Katherine and Christopher Plummer as Henry V, Henry V, 1956. Photographer: Peter Smith. Courtesy of the Stratford Festival.

Page ii: Photographer: Jim Ryce. Page 7: Arthur James Nesbitt and Peter Alfred Thomson: Nesbitt photo courtesy of A.R. Deane Nesbitt, Dry Goods & Pickles: The Story of Nesbitt, Thomson (n.p.: A.R. Deane Nesbitt, 1989); Thomson photo courtesy of Thomson family. Page 10 (both): Philip Rose and the Rt Hon. Richard Bethell, 1st Baron Westbury, Foreign and Colonial Investment Trust plc . By permission. © National Portrait Gallery, London. Page 15: Edwin Henry King. By permission. Canadian Illustrated News, 14 June 1873, 373.

Pages 59, 130, 136, 226, 246: Photographer: Matthew Liteplo.

Page 186 (bottom): Photographer: Ernest Mayer.

Page 100: Courtesy of Bill Olson, Dominion-Wide Photographs Limited.

Page 188 (bottom): Courtesy of United Way Toronto & York Region. Photographer: McPherson Photography.

Page 115: Courtesy of Libertyville-Mundelein Historical Society, Libertyville, Illinois.

Page 188 (top): By permission. Wisconsin Historical Society, whs -2690.

Page 118: Photographer: Jacob Hand.

Page 191: Photographer: Guy L’Heureux.

Page 119: Courtesy of Rachel Bankowitz, Wisconsin Historical Society – Public History.

Pages 192, 193, 195, 196, 199 (all): Photographer: Toni Hafkenscheid.

Page 143: Photographer: Matthew Gilson.

Page 194: © Fondation Marc-Aurèle Fortin/sodrac (2016). Photographer: Toni Hafkenscheid.

Page 149: Courtesy of Bell Canada Historical Collection. Page 150: Courtesy of Exporail, le Musée ferroviaire canadien / fonds Canadian Pacific Railway Company. Page 151: Courtesy of McCord Museum, Montreal.

Page 25: W.D. Mulholland. © V. Tony Hauser.

Page 171: Photographer: Bill Smith.

Pages 29, 31, 32, 202, 224: By permission. Restoration carried out by the Centre de conservation du Québec. Photographer: Christian Fleury.

Page 182: © 1995 Matthew Gilson. Page 183: Courtesy of St Michael’s Hospital, Toronto. Page 184: Courtesy of Rotman School of Management, University of Toronto.

Page 197: © 2016 Artists Rights Society (ars ), New York/adagp , Paris. Photographer: Alan Klehr. Pages 198, 200: Photographer: Alan Klehr. Page 215: Photo of Pauline Vanier courtesy of Concordia University Records Management and Archives. Photo of Deanna Rosenwig by Jean Desjardins.

A V I S I O N G R E AT E R T H A N T H E M S E LV E S

Main Branch, Montreal

bmo Institute for Learning, Toronto

A Vision Greater than Themselves THE MAKING OF THE BANK OF MONTREAL, 1817–2017 Laurence B. Mussio

Published for the Bank of Montreal by McGill-Queen’s University Press | Montreal & Kingston | London | Chicago

© bmo Financial Group 2016

isbn 978-0-7735-4829-9 (cloth) isbn 978-0-7735-9994-9 (epdf) Legal deposit fourth quarter 2016 Bibliothèque nationale du Québec

Printed in Canada on acid-free paper

C016245

McGill-Queen’s University Press acknowledges the support of the Canada Council for the Arts for our publishing program. We also acknowledge the financial support of the Government of Canada through the Canada Book Fund for our publishing activities.

Library and Archives Canada Cataloguing in Publication

Mussio, Laurence B., author A vision greater than themselves : the making of the Bank of Montreal, 1817–2017 / Laurence B. Mussio. Issued also in French under title: Un destin plus grand que soi. Issued in print and electronic formats. isbn 978-0-7735-4829-9 (hardback). – isbn 978-0-7735-9994-9 (epdf) 1. Bank of Montreal – History – Pictorial works. 2. Banks and banking – Canada – History – Pictorial works. i. Title.

hg2708.m63m 87 2016

332.1’20971

c2016-903868-8 c2016-903869-6

Set in Sina Nova and Hypatia Sans Pro Book design & typesetting by Garet Markvoort, zijn digital

CONTENTS

Foreword by William A. Downe

ix

Introduction: A Vision Greater

xi

Part One | The BMO Universe The Founders Through Time

A Sense of Place: A National Architectural Legacy 95

Assets

In Hoc Signo: 200 Years of Royal Arms, Logotypes, and Trademarks 137

Determining Destinies: Leaders and Leadership 11 The Written World of bmo : Defining Documents and Directions 27 A Growth Business: bmo and Its Canadian Acquisitions 41 53

Currency, Cash, and Legal Tender: bmo ’s Richly Denominated Legacy 65 Financial Innovations and Firsts

Part T wo | t wo centuries of Banking by the Numbers 203

bmo’s Most Wanted: Protecting Your Money 125

3

Ten Days of Decision: Pivot Points

1

Speed, Distance, Access: bmo ’s First-to-Market Technologies 87

77

bmo Bankers and the Dream of Nation 145 Markets of the Mind: bmo Advertising and the Art of Persuasion 157 On the Playing Fields of North America: Sponsorships 169 From Charity to Philanthropy

181

Cultural Capital: Bankers and Art

205

Deposits

206

The Trajectory of Wealth Generation: 1917–2016 207 Loans

208

Customer Base Employees

210

Branches and Access

211

Mapping Global Operations Branch Network

189

209

213

Community Giving

214

Women in Leadership

215

212

Investment in Technology Employee Giving

216

Memorials to the World Wars: Montreal Head Office, 1923 and 1951 229

217

Investment in Human Capital

The Circular

218

Banking System Stability and Soundness

219

The Passbook

230 231

The “Miller” Chest

223

Deposit Ledger No. 1: The First Database The Certificate of Stock

225

The Bank’s Corporate Seal

The Dictograph, 1970s

Rules and Regulations for the Branches

234

228

vi

C O NTENTS

237 238

Victorian Cryptography: Telegraph Codebooks 239 Minute Book H, 1905–09

244

“… that thou mayest prosper”: The Bank of Montreal/Waskaganish Belt, 1994 245

bmo Harris’s Lionheart: Hubert T. Lion 247

236

Ledger for Foreign Agents, 1885 227

243

M-Bar Chic? The Promotional Bow Tie, 1977

235

The Protectograph

Championship Trophy, Montreal Bankers Hockey League 242

Manual for Tellers, 1965 233

The Blickensderfer Typewriter

226

The William Notman Albums, 1884

224

232

The Bank of Montreal Centenary Medal

The Gold Scale

241

The Pension Fund Society Seal, 1884

Time Lords: The John Wood Clock

Part Three | The Material Culture of BMO Banking 221

Money Boxes

240

Epilogue

249

Acknowledgments

251

A Note on Sources

253

Image Credits

258

246

FOREWORD William A. Downe

S

ome would say there’s little place for history in the world of business. It’s true, in banking we typically measure history in second-by-second quotes and quarterly investor calls. The perspective we have about important periods of history while we are living through them generally reflects the concerns of the day. This book started eight years ago when Dr. Laurence Mussio was working on an oral history project for the Bank. He was interviewing bmo employees and retirees whose long experience gave them a unique perspective on our company. In the context of our upcoming bicentennial, he and I spoke about the project being much more than a record of events in the life of a very old company. We both saw the opportunity to draw real meaning from key moments over those years that would allow us to better understand ourselves, both the Bank and the country in which we were founded. I believe you will agree it is exactly what Laurence has accomplished: the telling of a

200-year story that is highly informative, keenly insightful and, while exhaustively researched, tremendously accessible and a delight to read. Identifying this handful of items from the many thousands of possible candidates was itself a massive task and, of course, many interesting items were left on the cutting-room floor. Still, Laurence managed this process with a deft hand and great sensitivity, and I think you will enjoy what you find among the 200 milestone items that together tell our story. They have special relevance to the many people across Canada, the United States, and in major financial markets overseas who have worked for bmo over the years. As this book reminds us, bmo ’s M-Bar carries with it proud traditions of pioneering financial services companies: the Bank of Montreal, Chicago’s N.W. Harris Trust Co., Milwaukee’s Marshall & Ilsley, Canadian investment firms Nesbitt Thomson and Burns Fry – to name just a few. It is our hope that today’s generation of bmo bankers will

learn from and be inspired by the work of their predecessors. In the spirit of this book I would like to add one more exhibit – the 201st. It is a news item from The New York Times in 1917 written to report on the Bank’s 100th anniversary. The article describes how the founders of this company used their vision and daring to establish the first banking business in colonial Canada. Their venture flourished because it filled an important need by facilitating trade and commerce. In the years that followed, as the scope and scale of colonial and then national aspirations grew, the Bank paced that growth by providing the capital and expertise to underwrite the transformational mega-projects of the day. A case in point was the financing of the Canadian Pacific Railway – the transportation system that opened the West to settlement and linked Canada from coast to coast, realizing our national dream. Donald Smith, a vice-president and future long-serving president of the Bank,

“History shows us not only how things get done but also the value of realizing the vision of great nations.”

drove the last spike on 7 November 1885. The Times article also reminds us that decades earlier, during the American Civil War, the Bank of Montreal was a critical source of finance to the US government in an equally critical period. History shows us not only how things get done but also the value of realizing the vision of great nations. I hope that you will enjoy touring the past in these pages. It is our hope that this book and its companion volume, Whom Fortune Favours: The Bank of Montreal and the Rise of Canadian Banking, 1817–2017, will make important contributions to the scholarship on Canada’s business history. This is also an appropriate moment to send birthday greetings to Canada on its 150th

x

FO RE W O RD

anniversary. The Bank of Montreal was already 50 years old when Canada was formed in 1867 – our histories are inextricably intertwined. I would like to thank our author and historian, Dr. Mussio, for the great care he took looking back. I would also like to thank Yolaine Toussaint, bmo archivist, and her team for their many contributions to this work. And I want to thank David Galloway and Robert Prichard – the chairmen of our Board of Directors during my tenure as bmo ’s chief executive officer – for their ongoing support of the Bank’s bicentennial celebration. To our customers – from the most recent, to those whose families have banked with us for generations – thank you on behalf of all of us at bmo . It is our promise that we will continue to strive, to

serve, and to innovate for you and to contribute new great moments in the story of this company.

William A. Downe Chief Executive Officer bmo Financial Group 2016

INTRODUCTION

A Vision Greater

Time and Memory People and institutions exist in time. Those institutions that manage to measure their pedigree in centuries are few. In the North Atlantic world, the small number of corporate and private institutions that have persisted over two centuries form an elite circle. Among those, the ones that have remained relevant through continuous adaptation are rarer still. In banking and finance, things become even more complicated: the landscape of the last two centuries is littered with discredited gothic ruins and abandoned capital fortresses. In Canada, fortune has favoured one singular institution in this category: the Bank of Montreal, Canada’s first bank, established in 1817. Two hundred years of banking represents an extraordinary moment and a remarkable achievement. The Bank began life in Montreal. It carries the city’s name, a distinctive style, and its ancient

spirit of enterprise. As colony grew to nation, as capital flowed continentally, as trade and opportunity first crossed oceans and then encircled the globe, the Bank and its people have been able to call the many cities and regions their own: Halifax, Toronto, Chicago, Milwaukee, Calgary, Vancouver, London, Seoul, Tokyo. The Bank’s home since 1817, in other words, is where the action is. Over 200 years, the Bank of Montreal has come to embrace a hundred different cities, regions, and territories across borders and frontiers. Those borders transcend geography, embracing new realms: service, innovation, and leadership. The Bank’s ten generations of leadership and people have crossed these many borders to create new opportunities. The Bank’s roots are two centuries deep and a continent wide. The history of the Bank of Montreal is the history of not only the first Canadian bank but also one of Canada’s founding

institutions. The bank is half a century older than Canada itself, or for that matter, older than many of the principal contemporary nation-states of Europe. The leaders and the people of the Bank have engaged in a cycle of generation, regeneration, and renewal for ten generations – from shortly after the end of the Napoleonic era in the nineteenth century to the global technologydriven era of the twenty-first century. In 200 years, our world has gone through the rise and fall of empires; the emergence of nation-states; multiple cycles of panics, depressions, and catastrophes; world wars; internationalization; globalization; new technologies; and accelerating information flows. Our world has seen powerful new social and geopolitical forces, revolutions in science, education, culture, style, fashion, faith, and thought. Contemporary observers often feel that in our own day, someone has hit fast-forward on these changes. Past generations often felt the same way.

In all generations of the Bank, change has demanded a confrontation with a continuous series of opportunities, challenges, and risks in protecting and generating wealth.

What We Are Celebr ating This book marks 200 years of the Bank of Montreal. But what, exactly, does it celebrate? Ageing gracefully for one thing. Mere longevity is not really the point of the Bank’s historical experience. This bicentennial is, instead, a point of reference, a setting in time and memory that urges us on toward appreciating the more substantial, multi-faceted, and often-amazing story of the last two centuries. We mark it in the present, but it allows us to imagine what comes next. The rise of the network society in this last generation has changed the way we look at time. In the twenty-first century, we live in the eternal present. Our contemporary temptation is to see history as something to visit. The past can be a stage-set in the background, or a beautiful cold gem set in the institutional, corporate, and individual memory. It is something to visit on your day off, to admire, to marvel at, sometimes to regret, occasionally to exploit for contemporary ends. Static. But take a closer look. When you do, you see in the case of Canada’s first bank an intense, dynamic engagement of people with the wider world. It’s there, underneath the surface. It’s the story of a people forcing forward frontiers for a bank, a city, a nation, and countless customers. It’s the story of the moments they triumphed, and the hard punches they suffered; the tools they used, the

xii

INTRO D U C TIO N

buildings they built, the technologies they used, the innovations they developed, the businesses and governments they helped, the markets they created. It’s also a story of how the leadership and the people of the Bank of Montreal lived the present with passion and commitment and embraced the future with hope and confidence. The Bank of Montreal’s history shows us what happens when ten generations of individual and collective energy, strategy, performance, and vision are released, channelled, and put to work for people and communities. Our eternal focus on the present and the future distances us from that history. This book aims to restore our relationship to that history, to understand through word and image how the Bank of Montreal became what it is today. Read this as a bmo employee or executive and you might say, “this is the way we were, how we became who we are today, and what we carry into the next generation.” Read it as a customer and you might say, “this is how my Bank became an important part of the financial lives of millions of people.” And anybody reading it will say, “this is why Canada’s first bank became a national institution over two centuries, and how it contributed to the multiple destinies of people, communities, regions, and nations.” That, in essence, is what this book celebrates. The subjects explored in this book – through entries about the people, the documents, technologies, events, and achievements – represent an iconography of the Bank’s story, expressing in images what otherwise is described in words. Individually, each entry is intended to put us in touch with an aspect of the Bank’s past:

a personality, a fragment, an innovation, a record, a forgotten advertisement. Each of the entries calls us to an understanding of the Bank of Montreal’s experience through a carefully chosen and unique prism. Individually, they tell a self-contained story, sometimes entertaining, sometimes extraordinary, always informative. (In some ways, that was the point of putting together a book that people could read piecemeal.) Put them together and they tell a much larger story: across the pages of this book, a high-definition portrayal emerges of the experience of the Bank.

An Emerging Picture The picture that emerges from these pages is an extraordinary one. These 200 subjects constitute a vast field of action over time and space where the Bank led, determined, shaped, participated, assisted, or otherwise ushered in the key financial events in Canada and in its field of operation. The Bank was at the epicentre of building, first, the Canadian nation and, then, a host of other regions and territories. It financed governments, public projects, economic development, and trade. You can say that it financed not one but two projects of nation: when Canada became Canada at Confederation in 1867, and when the Canadian Pacific Railway got underway in 1881. No bank or institution ever did it alone, of course. But the Bank is central to the relationships, flows and circulation of currency, assets, and wealth in its home territory. It shaped the Canadian banking system – first, as the first bank, then the dominant bank, then the senior bank, then in concert with other institutions both private and public.

It is an important chapter in the history of North American capitalism. The Bank’s contributions to other kinds of capital – human, leadership, and reputational – are also important. The Bank has provided some of the country’s key financial leaders down the centuries. Its executives, managers, and workers have contributed leadership and service at every conceivable level of public and community life – virtually wherever it has operated. Its thriving subcultures embrace not just banking but also investment, risk management, accounting, security, information technology, and more. The Bank of Montreal has contributed and helped to sustain a remarkable reputation for leadership in banking for Canada in the world. The Bank’s contributions to both the built environment and the material culture of our world are also an important element of its legacy. The buildings, the offices, and the branches mark and shape the urban landscape. The symbols of the Bank through time – the coat of arms and the M-Bar Roundel – are some of the most iconic symbols of their kind. These are the places where Bank culture took root and grew. But it is also the artefacts of the management of banking – the currency, the legal tender, the shares, the ledgers, account books, the instruments, the rulebooks, the regulations, the drafts and overdrafts, the machines and technologies – that symbolize important aspects of the experience of the Bank. Those contributions usually take centre stage. The more dimly lit backstage also produces important, though less common, touchstones you wouldn’t immediately associate with Bank of Montreal banking – support of the arts through a league-leading art collection, and the vital

contributions of the Bank to the full range of local, national, and international initiatives in arts and letters; to higher learning; to medical research; and to a stunning array of worthy causes that bind the Bank to the communities it serves.

to the present and to the challenges of the next generation: cyclical instability, complex operating environments, technological disruption, market volatility, and a changing international political economy will require nimble leadership.

From Many, One

Message from the Past

If we stand back and consider these 200 subjects as a whole, a single message emerges that gives the title to this book. From its earliest days, the Bank of Montreal has pursued a vision beyond itself. That vision has, always and everywhere in the last two centuries, inspired the leadership and people of the Bank to pursue projects and initiatives that transcended the business of banking. The vision is plural and multiple. It takes in projects of a national and global scale, as well as those in a local context. It helps to build nations, cities, and industries, as well as families and communities. It also extends powerfully into those realms of human endeavour that enrich communities: sponsorships in sports, patronage of the arts, initiatives that focus on improvement and sustainability of human capital where it can be found. To confine the history to financial transaction is to miss a fundamental truth of the history of the Bank of Montreal and lose the key reason it has succeeded. The 200 subjects in this book tell a much different, a deeper, more complex, and much more extraordinary story. To the greatest extent possible, individually and together, they tell the sweeping story of Canada’s first bank, one of North America’s oldest banks, and a bank that has made a deep imprint on the financial, economic, and professional landscape of the North Atlantic world. The arc of the Bank’s history brings us

The subjects presented here from over two centuries of the Bank of Montreal’s history deliver a message to the contemporary Bank: that time and again, the leadership and people of the Bank rose to meet an astonishing variety of economic, financial, social, political, and technological challenges and opportunities. Time and again, bmo bankers have confronted and tamed those challenges and exploited those opportunities for two centuries. The past tells the present that they walk with the power of ten generations of bankers – bankers who in their time have faced similar circumstances as important participants, players, and protagonists in Canadian and North American finance – and prospered. Their gaze was firmly fixed on the future, but they never forgot the history and the achievements that bound them to the tradition of their forebears. To borrow an aphorism from banking, while past performance is never a guarantee of future results, the history of the Bank of Montreal shows that hard work, the right leadership and vision, and the best team can make all the difference.

The L ayout of this Book I am going to make an astonishing claim: this book is not designed to be read sequentially cover to cover. Of course, it can be, but it is hoped

INTROD UC TION

xiii

that readers will delve into chapters and subjects according to interest. The book is divided into three parts. Part One, The bmo Universe, includes sixteen chapters that range from the founders to bank leaders, defining documents, currency, innovation, technology, architecture, and the like. Each chapter and entry comes with a short description and explanation. Part Two, Two Centuries of Banking by the Numbers, provides a series of statistical snapshots. Part Three, The Material Culture of

xiv

INTRO D U C TIO N

bmo Banking, showcases the objects that together tell the story of Canada’s first bank. The entries – the people, events, facts and figures, locations, icons, artefacts … – number 200, to give this celebration a certain symmetry with the bicentennial year. Each represents a tile in a complex, important, and historically momentous mosaic, important in its own right, but all the same an integral part of a larger picture. Happy reading.

the fo under s thro ugh ti m e

T

he Bank of Montreal is a complex organization that has evolved through two centuries. That complexity extends to its foundation. Its deepest origins are reflected in its name. That name also camouflages the different cultures and distinct organizations that integrated and assimilated into the Bank but yet continue to leave their mark on its nature. Of course, the main foundations are to be found where and when you would expect them – in Montreal in 1817. But the twenty-first century Bank can trace its foundations – its founders and founding cultures – to several places and organizations in time, across Canada and the United States and through once-separate, distinct disciplines: banking, investment, and securities dealing. This chapter focuses on the founders of those key institutions within the Bank of Montreal. It is distinct from the chapter on mergers and acquisitions, which also have a special place in this volume. Here, we shine a light on the founders of those organizations whose cultures have marked

the overall culture of the Bank. If we are to understand the evolving nature of today’s Bank toward a single, integrated culture, we also need to trace the roots of the diversity of cultures and subcultures that contributed to the making of the Bank of Montreal. These individual cultures, moreover, are of varying weights and impacts within the larger Bank of Montreal culture. Cultures and leaders leave behind legacies, inheritances, assumptions, aims, beliefs, and values that can persist in institutional memory and over time. In many cases, the organizational cultures that are so created can generate subconscious ways of thinking and behaving, even as they merge and become a single institution under a single banner. Contemporary culture gives pride of place to founders – founding fathers, mothers, leaders, visionaries, businessmen, statesmen. We recall and celebrate what they said, what they wrote, what they thought, what they were establishing, whether it was a republic, a confederation, a community organization, a club, an order, a business.

The focus on individuals, leaders, founders rather than just the institutions provides an opportunity to rewind the history of a particular culture to its unique beginnings. These institutions were not spontaneously formed – they were born of conscious, often bold or visionary, acts of entrepreneurial leadership. Those leaders had a particular idea or vision of how they could make a living, exploit a new opportunity, and serve a community. They brought people together. They had particular assumptions about how to proceed and what kind of institution they wanted to develop. They set the tone, selected the people, adapted to circumstances, set in place systems and procedures, and determined the composition, scope, and nature of the team. It was at that point that they gave birth to a specific culture, shaped by its context and its environment. Here, we go right back to the first generation, to the first organizers, and offer a glimpse of the distinctive character of the enterprise through a brief look at the people who started it all.

For all the time travel involved in tracing the founders of the Bank’s culture to the nineteenth and early twentieth centuries, with the exception of the Montreal Nine, this is very much a story about the last thirty years, beginning with the arrival of Harris Bank in 1984, Nesbitt Thomson in 1987, and extending to the addition of m&i in 2001 and Foreign & Colonial Investment plc of London in 2014. Along the way, the Bank entered new markets, crossing over into insurance. This speaks clearly to how in this contemporary generation, banking has transformed itself to embrace larger markets, sectors, and territories.

4

Th e BM O Un iv er se

PR AGM ATIC VISIONS

The Montreal Nine

N

ine men signed the original Articles of Association establishing the Bank of Montreal. They represented not only Montreal’s elite but also young Canada’s most enterprising merchants and aspiring financiers. The project of a banking institution had been, in one way or another, a vision that extended back to the 1790s.

Of the nine who signed the Articles of Association, John Richardson was the obvious leader, deserving his title of “Father of Canadian Banking.” He came to America from Scotland in 1773 at age eighteen and worked for Phyn & Ellice at Schenectady, ny , before coming to Canada in 1787. He became a partner in both Forsyth, Richardson & Co., leading merchants, and the North West Co., rivals of the long-established Hudson’s Bay Company. He served two active terms representing Montreal in the legislature of Lower Canada and was appointed to the Executive Council and the Legislative Council. Horatio Gates, born in Massachusetts in 1777, came to Canada in 1804, opened up the immense flour trade with the West, and was described as one of the most enterprising men of his time. No doubt he influenced a large number of his American friends and associates to purchase shares in this new financial institution. He served twice as president of the new Bank. A key figure in the group was George Moffatt. After he arrived at age fourteen in Canada from England in 1801, he earned partnership in the noted firm of Gerard, Gillespie, Moffatt & Co., and eventually acquired controlling interest, becoming deeply involved in the fur trade. He served as an officer in the War of 1812, and in 1826, with his usual far-sightedness, Moffatt established a branch of his firm at York (now Toronto). He was also appointed Commissioner of the British American Land Company, developers in the Eastern Townships with headquarters in Sherbrooke. He served in both the Legislative Council and the Executive Council and represented Montreal in the Canadian Legislature. Moffatt was key in shaping the early character of the Bank in its first decade. Robert Armour emigrated to Canada from Scotland around 1800. Owner of the premises occupied by the new Bank, he was also publisher of the Montreal Almanac and one of the proprietors of the Montreal Gazette. For a time he was cashier of the relatively short-lived Bank of Canada, taken over by Bank of Montreal in 1831. George Garden was a prominent member of the leading merchants Auldjo, Maitland and Company. Active

in St Gabriel’s Church, he was also a charter governor of the new Montreal General Hospital, opened in 1822 on Dorchester Street (now René Lévesque Boulevard) near Montreal’s business centre. This Scot filled the position of the vice-president of the Bank on two occasions. Thomas A. Turner, of the wholesale firm Allison, Turner and Company, was the first vice-president of the Bank. He was born in Aberdeenshire in 1775. He played a role in the Bank’s first foreign exchange transaction, in early 1818, when some 130,000 Spanish silver dollars, in sixty-five kegs weighing one hundred pounds each, were carried by stagecoach along primitive roads through New England’s mountains to reach Boston. Americans in the New England states needed the Spanish silver for their trade with China and the East Indies. Lt. Col. James Leslie, another founder, was a merchant, retired army officer, and son of General James Wolfe’s assistant quarter-master-general at Quebec. Born at Kair, Kincardine, Scotland, in 1786, to minor nobility, he came to Montreal in 1808. He held a variety of legislative and executive positions in Canada for decades. John Churchill Bush, a Montreal merchant born in the United States, also appears on the Bank’s Articles of Association, but he had little to do thereafter with the Bank’s activities. Augustin Cuvillier played a key strategic role in the Bank’s founding. He was a member of the Legislative Assembly, a well-to-do importer, and the only nativeborn Canadian amongst the distinguished group. One of the leading political and economic figures of his time, he provided vital legislative support for the Bank’s incorporation and charter. After the Union of the Canadas in 1841, Augustin Cuvillier became the first Speaker of the Assembly. These nine early bankers were the founders of the Bank of Montreal.

the fo und er s thro ugh ti m e

5

YANKEE VISIONARY

Norman Wait Harris

A

lthough the Bank of Montreal had been active in the United States since the nineteenth century, the 1984 acquisition of Harris Bankcorp, Inc. created a significant American footprint. This was the first time a Canadian bank had a major US subsidiary, and created the first North American bank to provide full service in both Canada and the United States. The founder of the Harris Bank, Norman Wait Harris, was born in Berkshire, Massachusetts, in 1846. He made his way in life as a life insurance salesman in upper New York State before heading west to Cincinnati in 1866. His life insurance connection continued there as he assumed managerial responsibilities of the successful Union Central Life Insurance Company. At age thirty-five, he moved his family west to Chicago in 1881, perceiving new opportunities dealing in municipal and other public franchise bonds. Norman W. Harris & Company opened for business as a securities firm on 1 May 1882, based in Chicago, specializing in municipal bonds. The firm started with $30,000 in capital. The business flourished, as did deposits. After a quarter century of those humble beginnings, the company applied for a banking charter in Chicago. In 1907, it was incorporated as a bank, and become Harris Trust and Savings Bank. Harris served as president from its inception in 1882 until 1913. Harris’s success lay in striking into the retail securities market, particularly with new methods of promotion and advertising. As the Harris’s historian remarks, Norman Harris put securities on a new, more

6

Th e BM O Un iv er se

public foundation. “He believed that the existence and value of good [securities] should be made known to all potential buyers,” in a time when public notices for such investments were rare or even considered unsavoury. The Harris Bank’s success in subsequent decades was in part a testament to the strong philosophical and managerial foundations set by its founder.

POWER COUPLE

Arthur James Nesbitt and Peter Alfred Thomson

T

he acquisition of the investment firm Nesbitt Thomson in 1987 by the Bank of Montreal was the first of its kind between a Canadian chartered bank and a Canadian investment firm. The firm’s founders, Arthur James Nesbitt (photo on left) and Peter Alfred Thomson (photo on right), formed their eponymous investment firm in 1912 after years of partnership in sales in the Maritimes. They understood in particular the importance of hydroelectric development to Canada’s increasingly industrial economy and became prominent hydroelectric utility underwriters. Under the strategic vision of both partners, the firm expanded its utilities. In 1925, it formed Power Corporation of Canada, one of Canada’s most important and successful enterprises, and owned and operated it until 1968. With an investment company and a merchant banking organization in hand, the firm’s success grew exponentially. Eventually Nesbitt’s son Deane assumed control of Nesbitt Thomson, while Peter Thomson, son of the other founder, took Power Corporation. The firm’s expertise in all aspects of the energy sector was remarkable – from uranium debt financing to TransCanada PipeLines. In 1968, it bought a seat on the New York Stock Exchange – the first non-US firm to do so in over thirty years. From the beginning, Nesbitt Thomson shared common interests, common philosophies, and common endeavours with the Bank of Montreal. In fact, this Montreal-based investment brokerage had its offices just down the street from the Bank of Montreal on St Jacques Street, sharing a common alleyway, Fortification Lane. The firm prided itself on being built by risk takers, and by “making things happen.” This premier investment firm had also been known for making its decisions based on serious research – on information, analysis, and network intelligence.

The affinity in operations, territory, and operation between the Bank and the investment firm drew them closer to union. In 1986, the firm went public; in 1987, regulatory changes permitted banks to purchase investment firms, and in short order secret high-level talks were launched that led to Canada’s first integration of a chartered bank and an investment firm through a 75 per cent equity interest. This was a major strategic move into the Canadian and international securities markets, bringing into the Bank of Montreal 650 account executives in fifty-five offices – and a diverse and dynamic corporate culture.

the fo und er s thro ugh ti m e

7

INVESTOR PIONEER

Charles F.W. Burns

T

he prominent Canadian brokerage Burns Fry Limited merged with bmo ’s Nesbitt Thomson in 1994, placing it firmly within the Bank of Montreal orbit. Charles F.W. Burns (1907–1982) was born in Vancouver, British Columbia, son of a Bank of Nova Scotia banker who later moved to Toronto. He began his professional life as a business banker in the 1920s. In 1928, he moved into the brokerage business at the height of the boom of the 1920s. His experience included trading on the floor of the stock exchange and, later, travelling as a securities salesman throughout Ontario. Borrowing $500 from his father, he began his own company, Charles Burns & Company, with a rented desk, a telephone, and a part-time bookkeeper in the offices of another firm. In 1935, Charles was joined by his brother Latham, and they purchased a seat on the Toronto Stock Exchange with a $50,000 loan from Charles’s mother-in-law. Latham died suddenly in 1936. In 1939, Wilfred Denton came aboard and Charles and Wilfred formed Burns Brothers & Denton Limited.

8

Th e BM O Un iv er se

The Toronto firm braved Depression-era conditions to prosper in Canadian finance. The company continued to grow in the post-war period, establish new offices, and penetrate into areas of financing as diverse as uranium mining, oil development, and jockey clubs. Within years of the establishment of the firm, Charles had developed an organization capable of dealing in most facets of the investment industry of the day – transactions through the stock exchange and dealings in government, municipal, and corporation bonds. By the 1970s, it had become one of Canada’s leading investment firms, merging with other companies such as J.R. Timmins & Co. and Fry Mills Spence Limited. By the 1980s, it was widely recognized as one of the most professional of Canada’s fully integrated investment firms. In July 1994, this venerable Canadian investment institution merged with Nesbitt Thomson to create the largest network of investment advisers in the country at that time. The investment capabilities in Canada and the potential that the merger offered toward realizing the North American vision of the bank was uppermost in the minds of contemporary management.

BANKING IN THE FEDER AL TERRITORY

Samuel Marshall and Charles F. Ilsley

T

he Bank of Montreal acquired the Milwaukeebased Marshall & Ilsley Corporation (m&i ) in July 2011. The deal added a substantial US private banking presence, asset management, and institutional trust businesses as well as bolstering global investment capabilities. bmo also acquired two new founders: Samuel Marshall and Charles F. Ilsley. Samuel Marshall (photo on left) was born on 24 November 1820 in the Quaker community of Concordville, Pennsylvania. Educated for a career in business, he entered an apprenticeship with Edward Grubb and family in Wilmington, Delaware, for five years. He then found himself moving west in search of business opportunities, eventually landing a stint in a dry goods business, and learning a great deal about the exchange business and especially about bank notes – the valuable ones and the worthless ones in a territory with dozens of banks, not all of them trustworthy! (See Currency, Cash, and Legal Tender, pages 65–76, for a discussion about the evolution of bank notes and currency.) Exchange brokerages were important in exchanging out-of-town money for local currency. On 21 April 1847, Marshall established the Samuel Marshall & Co., Exchange Brokers banking institution in Milwaukee, Wisconsin. In his first year, he cleared an $800 profit, had taken more than $2,000 in deposits, and began an active investment portfolio in the territory. Thus began a prosperous, private, non-chartered banking institution that under Marshall’s careful tutelage would help to define banking in the city, region, and state itself, which entered the Union in 1848. Marshall’s partner, Charles Ferdinand Ilsley (photo on right), was born in Eastport, Maine – near the

Canadian border – in October 1827. After some experiences and travel in the Boston states and the Midwest, he obtained a job clerking in Milwaukee with Alexander Mitchell and “Mitchell’s Bank,” part of the Wisconsin Marine and Fire Insurance Company. In the summer of 1849, Samuel Marshall and Charles Ilsley began to discuss a prospective partnership in banking. On 1 October 1849, they officially announced the creation of their new private banking partnership. On 29 March 1850, the first advertisement under the Marshall

& Ilsley banner was published, and the beginnings of a great banking institution were launched. After a state plebiscite legalized the existence of banks, in 1853, the partners became Wisconsin’s first chartered bank, incorporating the State Bank of Madison.

the fo und er s thro ugh ti m e

9

F

THE PATHBREAKERS

Philip Rose and the Rt Hon. Richard Bethell, 1st Baron Westbury, Foreign & Colonial Investment Trust plc

10

Th e BM O Un iv er se

oreign & Colonial Investment Trust (f&c ) has the distinction of being the world’s first investment trust. Its founding in London in 1868 is a landmark event in the history of finance. f&c helped to popularize, for the first time, share ownership for the ‘investor of moderate means.’ The stock market of the nineteenth century had been largely limited to wealthy individuals and institutions. As f&c ’s first prospectus declared, “The object of this Trust is to give the investor of moderate means the same advantages as the large Capitalists, in diminishing the risk in investing in Foreign and Colonial Stocks, by spreading the investment over a number of stocks, and reserving a portion of the extra interest as a Sinking Fund to pay off the original capital.” That prospectus launched one of the great financial innovations of its time. As the historians of f&c note in their fine history of the Trust, “it was the precocious talents of City lawyer Philip Rose” that gave life to the company. Rose (photo on right) was born in High Wycombe in 1816, son of the physician who would later become the Disraelis’ family doctor. Young Rose met and befriended the great statesman and future prime minister Benjamin Disraeli, creating a lifelong and mutually beneficial friendship. Rose became a partner in Barker & Rose, solicitors, a forerunner of the present-day London law firm Norton Rose Fullbright. Rose, who had risen to prominence during the railway boom of the 1840s, involved himself in philanthropic pursuits (he founded the Royal Brompton Hospital) before turning his mind to the creation of this new form of investment. Rose approached the Rt Hon. Richard Bethell, 1st Baron Westbury, a Liberal politician, lawyer, and judge (born in Bradford on Avon on 30 June 1800), to discuss the new venture. Lord Westbury (photo on left) was said to epitomize “trustworthiness, security, prudence and reliability.” He served as Lord Chancellor of Great Britain between 1861 and 1865. It was also said that Westbury should “be remembered as a zealous and wise reformer, and as the boldest judge who ever sat on the English bench.” With those credentials, f&c could differentiate itself from the indifferent reputation of the financial sector in

London. The Trust went on to become one of the most successful institutions of its kind in the City. The Bank of Montreal acquired f&c in 2014 as part of a strategy to expand bmo Global Asset Management’s European operations. In the process, it made these two gentlemen co-founders of the Bank of Montreal – an outcome that they assuredly would never have expected in their most fevered imaginings.

Deter m ining Destinies

Leaders and Leadership

T

his chapter centres on two centuries of Bank leaders and leadership. The presidents and chief executives featured here have been selected for their exemplary contribution to shaping the destiny of the Bank of Montreal since its earliest days. The Bank has been favoured with some of the highest calibre of leadership in Canadian banking. Each of the leaders in this gallery was called in his time to respond to a unique set of challenges, a series of complex competitive environments, and tricky opportunities. Collectively, they faced virtually every conceivable challenge that could be posed in the environment of colony, nation, continent, and North Atlantic world. Panics, short depressions, long depressions, rebellions, imperial wars, colonial wars, and world wars top the list of challenges. Less spectacular but no less consequential were the challenges of

competition, technological transformation and disruption, regulatory regime change, globalization, market fluctuation, and social upheaval. But let’s not forget the good times – the bull markets, the postwar booms, the vast stretches of expansion and growth. From the beginning, leaders predicated their success on the ability to gather the right people, deliver the right strategic vision, and build or shape the organization of the Bank to provide the right response to the times. The leadership and people of the Bank were able, to varying degrees, to respond to the demands of their time in different ways and different styles with a range of successful outcomes. Naturally, not every strategy succeeded and not every decision was applauded by posterity; sometimes reversal was inevitable. What is remarkable, however, is the

consistent record of performance over two centuries. Together, these Bank of Montreal leaders have provided a legacy of leadership in Canadian and North American finance that has deeply shaped the course of banking. Choosing the Bank’s greatest leaders is not an easy task – there are always a few who deserve the podium, but for reasons of space or circumstance are runners-up. Here, consulting the traditional minimum qualifications for sainthood has been useful: to qualify, you must be dead and have two confirmed miracles. I have strictly applied only the first condition to our Bank leaders, in spite of the manifest merits of living leadership. I encourage the reader to decide whether the second condition applies.

THE CHIEFTAIN BORN | August 1789 in Creebridge,

Peter McGill

Scotland

MOVED TO CANADA | June 1809 Peter McGill was president of the Bank of Montreal between 1834 and 1860, but involved in the bank’s activities from just after its founding in 1819. The position of president in the Bank was a variable one: the general manager held more operational control and responsibility, while the president’s role could be symbolic, ceremonial, strategic, reputational, or somewhere in between. During his long tenure, McGill’s involvement in the destiny of the Bank tended to be varied according to the period. What is incontestable, however, is the sheer extent and range of McGill’s activities in the life of Montreal. McGill’s business career began and thrived as a mercantile capitalist and importer in Montreal through Peter McGill & Company. Through an increasingly elaborate network of imports and cross-ownerships, McGill rose to prominence in the Montreal business community, becoming its de facto leader by the 1840s. McGill’s interests also extended to the chairmanship of the first board of directors of the Champlain and St Lawrence Railroad, British North America’s first railway, in 1831. By the 1840s, President McGill was one of the most connected and most influential businessmen in the city. The spinning of fortune’s wheel, however, ensured that McGill would become well familiar with both profit and loss in his personal affairs. McGill’s prolific career extended also to prominence in public, social, and religious life. He sat on the Executive and Legislative councils before and after the 1841 Union of the Canadas. He was appointed Montreal’s second mayor after Jacques Viger, but became the city’s first mayor under the new Constitution. He was also Montreal’s first Englishspeaking mayor. McGill was also a devout member of the Church of Scotland, owning St Paul’s Church in

JOINED BANK OF MONTREAL | 1819

PRESIDENT | 1834–60 RETIRED | 1860 DIED | 28 September 1860 in Montreal, qc

TRIVIA | Peter McGill’s original name was Peter McCutcheon. On 29 March 1821, he agreed to become Peter McGill by royal licence, a condition of inheriting his Uncle John McGill’s fortune. He was appointed Montreal’s first mayor under the new Constitution (British North America Act) in 1840.

Montreal along with another prominent Montrealer, John Redpath. Under his presidency and largely under the management of Benjamin Holmes, the Bank of Montreal pursued a ‘stability strategy’ that saw its operations carefully extended across colonial territory. This early period in the Bank’s history and in the Canadian

banking system required strong networks, shrewd negotiations with merchants, local governments, and imperial authorities. By this measure, and despite areas of weakness, the McGill presidency established the foundation, the essential conditions, for the Bank of Montreal to consolidate its leadership in Canadian banking. D e ter m ining D estinies

13

THE CHA M PION

John Molson

J

ohn Molson was president of the Bank of Montreal in four critical years of the bank’s existence – 1826 to 1830 – when its reputation was in play, its present was in turmoil, and its future was anything but clear. Molson’s involvement with the Bank of Montreal grew naturally out of his three decades of success as a businessman, landowner, and politician. Molson’s was the greatest entrepreneurial spirit of his age. His launch of one of Canada’s other enduring institutions – Molson Brewery – was a visionary move into a sector in the vanguard of technological innovation. He considered it his “Commencement on the Grand Stage of the World.” Molson also launched another such sector: steam-powered shipping. As a colonial politician, an investor in key infrastructure and in enterprises including Montreal’s first luxury hotel, a major landowner and philanthropist, John Molson’s interests focused both on the growth of his widening business interests and the expansion of Montreal. Molson’s presidency was inaugurated by a board governance crisis that his election sought to end. With the Bank’s capital – real and reputational – at stake with roiling markets and the liquidation of the principal fur trading houses in Montreal, Molson’s responsibilities were more than merely ceremonial. Molson’s reputation for probity and conservatism in banking was of essential importance in navigating the turbulence of those times. In fact, there were few Montreal bankers who could command the contacts, the networks, and the insight into the colonial economy than John Sr could. Molson championed the Bank’s transition to a wider vision of banking. Molson worked in close concert with Peter McGill and George Moffatt not only

14

Th e BM O Un iv er se

in Bank of Montreal matters in the 1820s and 1830s but also in virtually all investment, monetary, banking, and financial questions facing the colony in their capacity as politicians and public officials. John Molson’s connection with the Bank ended with his death in 1836. His central role in the entrepreneurial life of Montreal and his ability to “reject all national distinctions” in a time when those distinctions were vividly drawn between French and English was of inestimable value to the consolidation of the Bank of Montreal and its future success. Molson’s involvement in the Bank of Montreal began a long, intimate association that saw representatives of multiple successive generations of prominent Molsons represented on the board of directors.

BORN | 28 December 1763 in Lincolnshire, England MOVED TO CANADA | July 1782 JOINED BANK OF MONTREAL | 1817 PRESIDENT | 1826–30 RETIRED | 1836 DIED | 11 January 1836 in Boucherville, Lower Canada TRIVIA | There has been a Molson on the bmo board of directors for 108 of the Bank’s 200 years.

“ THE MONETARY KING OF C ANADA”

Edwin Henry King

E

dwin Henry King joined the Bank of Montreal in 1857. At age thirty-five, on 23 March 1863, he became general manager. Six years later – at forty-one – he became president, the youngest ever elected. By 1873, he resigned and moved to London, England. His tenure may have been relatively short, but it was also perhaps the most intense, maybe the most consequential, and almost definitely the most controversial. King has been called the “most striking figure in Canadian banking history” and the “Napoleon of Canadian Finance” by various historians down the years. He has also been called – derisively – the “King of Canada,” “a little God who dares to treat the representatives of all other banks” in an insulting manner, a “truculent and uncompromising” fellow, and even by his allies as “very peculiar.” King promoted the interests of the Bank of Montreal often brilliantly, frequently ruthlessly, and always with an eye for exploiting emerging opportunities. He was also a polarizing figure who did not suffer fools gladly, to put it mildly. By personality, strategy, and result, King was the great disruptor. Whatever King was, he was arguably the most brilliant strategist and visionary in the history of the Bank. In a key period of the Bank’s history, he professionalized the business of banking, putting commercial credit on an entirely new basis in the 1860s. King took full strategic advantage of the Bank’s leading position in Canadian banking. At home, he re-established the Bank’s faltering position in the Canadian market, showing little mercy to banks in trouble. King especially incurred the wrath of Toronto capitalists for both style and strategy – one of whom, Bank of Montreal

director Senator William McMaster, was so incensed he founded the Canadian Bank of Commerce. During the US Civil War, King vaulted the Bank to prominence as the go-to bank in the New York gold market. He extended Bank operations to London. King also established close ties to the new Government of Canada – both as government banker and as advocate of an ill-starred new banking system whose rules of the game would benefit larger, more stable banks like his own. The resulting political firestorm forced compromise on the new system that led to Canada’s first Bank Act in 1871. King’s exit mirrored his meteoric rise. He departed the field after only four years as president, retiring to London. His spectacular achievements positioned the Bank of Montreal as the incontestable leader in Canadian banking, to the delight of the shareholders and the consternation of his enemies. Meteors burn brightly, make their mark, and burn out. King did all three.

BORN | December 1828 in Ireland MOVED TO CANADA | 1850 JOINED BANK OF MONTREAL | 1857 GENERAL MANAGER | 1863–69 PRESIDENT | 1868–73 RETIRED | 1873 DIED | 14 April 1896 in Monte Carlo, Monaco TRIVIA | King’s parting gift when he left the Bank in 1873 was a full and magnificent service set of solid silver imported from the well-known establishment of Messrs Garrard & Co., London, England. It was valued at $10,000 and was on display for a few days at the Bank office for the inspection of shareholders.

D e ter m ining D estinies

15

THE “GREATEST CREATIVE GENIUS”

George Stephen, 1st Baron Mount Stephen

16

Th e BM O Un iv er se

G

eorge Stephen’s official connection to the Bank of Montreal lasted less than decade: first as director (1873–76) and then as president (1876–81). However, it is hard to overestimate the impact of Stephen’s leadership on the Bank’s destinies in the 1870s and 1880s. During a spectacular rise to prominence as a businessman and financier in Montreal in the 1850s and 1860s, Stephen’s interests spanned virtually every investment and finance activity in the city. His close association with the leading financiers and entrepreneurs of the day – E.H. King, Hugh Allan, Matthew Gault, and especially his cousin Donald Smith – formed a formidable Montreal investment ‘brain trust’ that acted as an important engine for Canadian economic activity. Stephen’s challenge as president of the Bank was to weather a sharp contraction in the Canadian economy. Here, Stephen’s networks and his financial and political acuity assured the Bank’s supremacy in Canadian finance. If he was “the greatest creative genius in the whole history of Canadian finance,” as the historian D.G. Creighton suggested, then he was also the Great Persuader. As his obituary in the Times of London suggested, Stephen had a great gift – a leader in whose presence “doubt and difficulties vanished and hope and confidence revived.” Stephen made his greatest mark in railways. From 1870, he had begun to become convinced of the possibilities of the promise of the Canadian northwest. In the late 1870s, a series of complex and sometimes controversial financial deals – with the Bank in firm alliance – put Stephen in a position to secure the contract to build the Canadian Pacific Railway (cpr ) from the Government of Canada – including $25 million in cash and 25 million acres. He assumed the presidency of the cpr and immediately resigned from the board of the Bank to devote his prodigious energies and intellect to the building and financing of Canada’s transcontinental railway. Failure would mean endangering not only the project but likely the entire banking system of the country, given the Bank of Montreal’s exposure. With essential support from the government of Sir John A. Macdonald – Stephen’s indispensable ally – Stephen,

Donald Smith, and R.B. Angus saw the project to the end. There were no doubts about the importance of the cpr to creating a transcontinental nation. Was it a good investment? Even Stephen sometimes had his doubts. Stephen left a deep imprint on his times and the city that made him famous. He was a key benefactor of the Royal Victoria Hospital ($1 million and real estate) and donated an entire wing of the Montreal General Hospital. His greatest philanthropic passion was the Prince of Wales Hospital Fund for London where his contributions of time, expertise, and funds (£1.3 million) were vital to its success. He built a stately mansion in Montreal that was later called “a masterpiece of the Italianate style in Canada.” By the late 1880s, Stephen moved to Brocket Hall in Hertfordshire, England, a wealthy and honoured man. His last trip to Canada was in 1894. He died on 29 November 1921.

BORN | 5 June 1829 in Dufftown, Banffshire, Scotland MOVED TO CANADA | 1850 JOINED BANK OF MONTREAL | 1873 DIRECTOR | 1871–81 PRESIDENT | 1876–81 RETIRED | 1873 ELEVATED TO THE BARONETCY | 3 March 1886 ELEVATED TO THE PEERAGE | 1891 as Baron Mount Stephen (taking the title from a Rocky Mountain peak near the cpr Line in British Columbia)

DIED | 29 November 1921 in Hatfield, Hertfordshire, England

TRIVIA | Lord Mount Stephen never missed a day of work in fifty-three years.

I M PERIAL COLOSSUS

Donald Smith, 1st Baron Strathcona

D

onald Smith’s connection with the Bank of Montreal spanned four decades as director, vice-president, and eventually president from 1887 to 1905. He began his professional career as an officer of the Hudson’s Bay Company (hbc ) in the 1840s, rising through the ranks by expanding the company’s field of action beyond the fur trade, and modernizing its

operations. Smith was the last hbc imperial governor and was associated with the company for an astonishing seventy-five years. By the 1860s, his ever-closer connection with Montreal brought him into the orbit of financiers, including his cousin George Stephen, R.B. Angus, and E.H. King (all of whom are featured in this chapter). Smith frequently found himself at the centre of the action in the 1860s and 1870s as Canada pushed into the North-Western Territory – as an experienced observer, protagonist, and universally respected diplomat. By intelligence, temperament, and intuition, he was extremely useful in finding solutions to some of young Canada’s most complex and potentially explosive problems. Smith’s involvement and investment in railways in the 1870s, however, was the foundation of his wealth and his success. His key participation in the Canadian Pacific Railway, his loyalty to the project, and his moral support when times got tough were all vital to seeing the project through. Therefore, for more than one reason, it is merited and fitting that Smith drove in the last spike of the railroad – a moment captured in what has since become an iconic photograph. His entrepreneurial talents allowed him to identify opportunities in new fields: in 1888, for example, he was a founding partner of the Federal Telephone Company, which later merged with Bell Telephone. His ventures went beyond the financial: he was elected several times to represent Montreal in the Canadian House of Commons – in 1891, with the largest majority in Canada. In 1896, he was offered the prime ministership by the outgoing incumbent, Sir Mackenzie Bowell, but declined. His public appointments and successes included a long tenure as High Commissioner to the UK. Smith also spent $1 million raising and equipping an entire regiment known as Lord Strathcona’s Horse – 28 officers and 272 non-commissioned officers – to fight in the Boer War (1899–1902). Smith was an extraordinary philanthropist – one of the most generous of his age – giving in excess of $7.5 million in donations and bequests, the greatest of which he reserved for McGill University and the education of women. He earned a well-deserved

BORN | 6 August 1820 in Forres, Scotland MOVED TO CANADA | 1838 JOINED BANK OF MONTREAL | 1872 PRESIDENT | 1887–1905; HON . PRESIDENT | 1905–14 RETIRED | 1905 ELEVATED TO THE BARONETCY | 3 March 1886; gcmg 1897

ELEVATED TO THE PEERAGE | 1897 as Baron Strathcona

OTHER HONOURS | Royal Society of London, 1904; Albert Medal, 1904; gcvo, 1908; Knight of the Order of St John of Jerusalem, 1910

DIED | 21 January 1914 in London, England TRIVIA | Lord Strathcona was a champion of women’s education at McGill University. His financial support inspired the first women students of McGill to be called the “Donaldas,” after him.

reputation not only for his supreme generosity but also his lavish hospitality, his patronage of the arts, and as a prodigiously tireless worker who could outpace men half his age. Smith’s involvement in the Bank of Montreal was extensive, but perhaps not intensive. He was, after all, involved with multiple corporations. The record of his success, his outstanding achievements, and his reputational capital were key elements in the longevity of his tenure with the Bank. In an age where that reputational capital was an essential element of success in the North Atlantic world, Smith was the greatest possible symbol for the Bank. He was at the centre of the action of most successful business ventures in the 1880s and 1890s in Canada. His role in young Canada’s parliamentary life also put him in the centre of Canadian public life, while his passionate belief in Empire and his ability to achieve remarkable successes in the promotion of an imperial vision put Lord Strathcona in a singular category. D e ter m ining D estinies

17

THE M ASTER BUILDER

Sir George Alexander Drummond, kcmg

G

eorge Drummond’s introduction to Montreal business life was intimately linked to his work at John Redpath’s sugar refinery, with which he was associated in the 1850s and 1860s. It was in fact a family business, since George married into the Redpath clan and soon was made partner in John Redpath & Son for a time. Drummond’s involvement in Montreal sugar refining led into politics, especially in the realm of tariff protection and his being in favour of Sir John A. Macdonald’s National Policy. By the 1880s, Drummond became the effective leader of the powerful Montreal business community. He was named to the Senate in 1888, and his ability to speak authoritatively on commercial and financial matters concerning the nation was widely respected and valued. It is during this period that Drummond begins to become involved in the Bank of Montreal. He was a tireless advocate for Canadian banking, and for liberalized regulations on loans to promote industrial development. Drummond’s activity in the Bank of Montreal as vice-president, then as a de facto president during the tenure of Donald Smith, and finally as the official president focused on aligning the services and policies of the Bank of Montreal to the emerging opportunities in Canadian manufacturing and industry. The Bank also embarked on a major expansion of its branch network and field of operation, opening 110 branches and better than tripling its employee base from 300 to 1,000. Drummond’s leadership pushed and pulled the Bank to fully serve and exploit the emerging economy of the early twentieth century. He also provided support for Montreal capitalists to strike into the West Indies

18

Th e BM O Un iv er se

and Mexico in search of new fields of investments. This is how George Drummond ensured the central place of the Bank to the financial salience of the Dominion of Canada. Like a few of his contemporaries in the Bank’s upper echelons, Drummond was made a Knight Commander of the Most Distinguished Order of Saint Michael and Saint George (kcmg ) in 1904 and commander of the Royal Victorian Order in 1908. He and his wife pursued an amazing variety of philanthropic, artistic, and sporting interests to the greater glory of making Montreal Canada’s metropolis. Drummond’s contributions to the Bank, to the city, and to the civic and social life of his city and country seem remote and locked in time – sugar refineries, the red chamber of the Senate, tariff policy, knighthoods. For us, from this distance, the main point is how Drummond and his contemporaries built a banking system, and ceaselessly sought out investment, development, and opportunity not only to build their own fortunes but also for the prosperity of their customers and the wealth of nations. The fortunes they amassed doing so, they typically distributed, inspired by their Christian faith, conviction, and in the very finest philanthropic and civic traditions. So it was with Sir George Drummond.

BORN | 11 October 1829 in Edinburgh, Scotland MOVED TO CANADA | 1854 JOINED BANK OF MONTREAL | 1882 VICE -PRESIDENT | 1887–1905 PRESIDENT | 1897–1904 (de facto); 1905–10 RETIRED | Died in office DIED | 2 February 1910 in Montreal, qc TRIVIA | In 1895, George Drummond became the Royal Canadian Golf Association’s first president.

LEADER AND SERVANT

Richard Bladworth Angus

R

ichard Bladworth Angus stands out in the Bank of Montreal pantheon for several reasons. He was among the first to rise to the executive ranks in the nineteenth century as a career banker. Angus began his Bank of Montreal life as a bookkeeper/clerk. The leadership quickly understood his extraordinary talent and acuity. In 1861, he was sent to lead the Chicago agency. In 1863, he was reassigned to the much more consequential New York office as agent before coming back to Montreal in 1864 to occupy a series of progressively more responsible roles. In November 1869, he became general manager of the Bank. His first-hand knowledge of bank operations throughout the Bank’s field of action was unique and priceless. During the 1870s, his superb leadership is in large part responsible for the success of the Bank’s fortunes in the face of a stubborn economic depression. He was tempted away from the Bank by the siren call of railway development, resigning his position to manage the St Paul, Minneapolis and Manitoba Railroad (a Stephen-Smith syndicate interest). The Bank leadership was not a little unhappy to lose such a brilliant general manager. But Angus’s future and fortune lay down the track, in railways, with his involvement with the Canadian Pacific Railway. He worked hard, however, to maintain close ties between the cpr and the Bank of Montreal. In May 1891, Angus returned as a director of the Bank, taking a back seat in the affairs of the Bank until two decades later, when he was called to the presidency in 1910. Two years after that, he became the Bank’s largest shareholder.

R.B. Angus in many ways represented the last of that heroic generation of polymath businessmeninvestors-entrepreneurs of later nineteenth-century Montreal. He symbolized how Bank of Montreal banking expertise was harnessed to the cause of the great projects of the century, especially the railway. The Bank conferred not just capital but also first-class managerial and administrative expertise to Canadian economic development. Angus used his considerable wealth to invest in a wide variety of firms, and to create massive estates in Montreal and in the countryside. His accumulation of a considerable art collection, valued at $50 million in 1889, is still considered one of the most extensive and significant in Canada.

BORN | 28 May 1831 in Bathgate, Scotland MOVED TO CANADA | 1857 JOINED BANK OF MONTREAL | 1857 GENERAL MANAGER | 1869–79 PRESIDENT | 1910–13 RETIRED | 1922 (died in office as a director) DIED | 17 September 1922 in Senneville, qc TRIVIA | Unlike his contemporaries, R.B. Angus refused a knighthood in 1910. On the day of his funeral, 19 September 1922, the cpr stopped all trains for two minutes in homage to the contributions of one of the railway’s founders.

D e ter m ining D estinies

19

V

THE ESTABLISH M ENT BANKER

Sir Henry Vincent Meredith

20

Th e BM O Un iv er se

incent Meredith’s life and career neatly reflects the rise of Canada as a nation and the development of a homegrown Canadian financial leadership cadre. Meredith was the first Canadian-born leader of the Bank. His career as a professional banker began in Hamilton, Ontario, in Canada’s Confederation year, 1867. His success both shaped and was shaped by the rising fortunes of the Bank of Montreal in this era. Meredith knew the banking business from the ground up. As the radius of his responsibilities grew, Meredith’s managerial achievements reinforced and deepened the Bank’s imprint on the economic and financial life of young Canada. Meredith was described as “alert, keen, and absolutely exacting as to the details of the bank.” Meredith symbolized the quintessential Canadian establishment banker of his day – the epitome of integrity, conservatism, and professionalism. As one biographer noted, “There were men like him in London … but few in Canada.” Meredith’s regal, upright bearing and personality nicely complemented that of his outgoing and extroverted general manager, Sir Frederick Williams-Taylor. Cometh the hour, cometh the man: Meredith assumed the helm at the Bank of Montreal on the eve of First World War. As the head of the leading Canadian bank, Meredith’s advice and counsel were vital in supporting the Canadian war effort. The Bank was also called on to represent Canadian financial interests abroad and safeguard the credit of the nation in a turbulent time. Keeping the Canadian financial system from peril was the number-one priority. In the 1920s, Meredith’s Bank piloted a wave of mergers and acquisitions that included the Bank of British North America (1918), the Colonial Bank (1920), the Merchants Bank of Canada (1922), and Molsons Bank (1925). Together, they tripled the Bank’s asset base from $244.8 million to $831.5 million between 1913 and 1927.

Like a few great men of his day, Meredith’s philanthropic impulse was an essential part of his impact in the community. He established a trust fund to help Bank employees in straitened circumstances due to illness or crisis and a second fund to assist women employees. His involvement with the Royal Victoria Hospital was a particular passion. One observer commented in the late 1920s that “during the last 25 years there was hardly a … campaign launched for betterment of conditions of the relief of suffering, or the advancement of the city but had the encouragement and sympathy … as well as the practical support of this banker.” One obituary in 1929 remarked that “it is not only the brilliance of his genius” that evoked the outpouring of sympathy at his death but also his humanity: a fitting epitaph for Meredith’s contributions to the Bank and to the country.

BORN | 27 February 1850 in London, United Province of Canada

JOINED BANK OF MONTREAL | 1867 GENERAL MANAGER | 1911; Vice -PRESIDENT | 1912 PRESIDENT | 1913–27; CHAIRMAN OF THE BOARD | 1927–29

RETIRED | Died in office ELEVATED TO THE BARONETCY : 15 September 1916 DIED | 24 February 1929 in Montreal, qc TRIVIA | Meredith’s annual salary as president began at $40,000. He was an accomplished boxer.

THE NAVIGATOR

Sir Charles Blair Gordon

T

he presidency of Charles Blair Gordon coincided with one of the most tumultuous periods in the history of the twentieth-century Bank. It began during the two last good years of the 1920s – 1927 and 1928 – and ended just shy of Canada’s entry into the Second World War in 1939. Economic, social, and political forces dramatically altered the Canadian and continental landscape. The boom of the 1920s gave way to the great stock market crash of October 1929 and contributed in

BORN | 22 November 1867 in Montreal, qc JOINED BANK OF MONTREAL | 1912 (as director) PRESIDENT | 1927–39 RETIRED | Died in office HONOURS | obe, 1917; gbe, 1918 DIED | 30 July 1939 in Montreal, qc TRIVIA | Gordon’s wartime service included vice-chairmanship of the Imperial Munitions Board in Canada (1915–17) and Director General for War Supplies for Great Britain in Washington, dc (1917–18).

its wake to the Great Depression of the 1930s. Canadian banking came under intense scrutiny. The transformations in the financial system included the creation of a central bank – the Bank of Canada – and the establishment of a single Canadian government-issued currency. The careful and complex navigation through these turbulent waters summoned the full capacities of the Bank’s management of the day. Gordon and his General Manager Jackson Dodds were major protagonists in these changes as defenders of the Bank’s interests and advocates for Canadian banking. They were also facilitators of the new world of banking that was emerging. Gordon’s experience in industry (at Dominion Textile) and within the most influential financial and political circles was essential for the Bank and the country in these troubled times. Gordon had an earned reputation as a shrewd negotiator and businessman. For his contributions to the war effort in Ottawa and Washington, first on behalf of Canada and then the Empire, he was made a knight commander of the newly formed Order of the British Empire. “Perhaps there is no other man in Canadian business life,” one newspaper enthused in 1917, “whose career so aptly illustrates the reward of conscientious business energy as that of Chas. B. Gordon.” Gordon the man was said to be quiet in manner and simple in mode of life. He would be one of the first to arrive at Place d’Armes for work, and by many accounts exercised his authority with a “kindly demeanour and disarming modesty.” He was also a devoted Montrealer – the “chief of the successors” of those Scots who contributed so much to the life, commerce, and culture of Montreal in the heroic age of the nineteenth century. Yet he was also a businessman who circulated in the North Atlantic world of his time, putting Montreal in play with London and New York.

D e ter m ining D estinies

21

THE QUIET M AN

George W. Spinney

G

eorge Wilbur Spinney’s leadership of the Bank effectively began with his appointment as general manager in 1936, but his influence was felt much earlier. A major reorganization of the Bank in the early 1920s under Spinney’s supervision launched it into securities with the establishment of the Securities Department, giving the Bank the administrative capacity to underwrite and distribute investment securities. This transformation ensured the Bank could meet its expanding responsibilities in the financial system. In 1942, Spinney (standing centre in photo) became the Bank’s wartime leader virtually ‘in absentia’ as he was serving in Ottawa as chairman of the National War Finance Committee. He was effectively the first professional career banker to lead the bank. By the time he reached the position of general manager, he had thirty years of expertise in all aspects of the banking business. Spinney’s brilliance, however, resided in the knowledge and understanding of the emerging field of securities, particularly government securities. This expertise was put to national service with his leadership of nine successful Victory Loan drives to finance the Canadian war effort. The Bank of Montreal in George Spinney’s time had to deal with a series of formidable challenges, including the persistence of the Depression beyond the 1930s and Canada’s entry into the Second World War.

22

Th e BM O Un iv er se

In the post-war years, pent-up consumer demand and reconstruction would pose a different set of challenges: growth, opportunity, competition. Spinney’s career was marked with tough cases – with economic adversity, with special accommodation for cities and towns in the depths of depression, with extraordinary loans for public works, and with the supreme challenge of wartime. If the Bank of Montreal stepped up to the mark in meeting these challenges, it has bankers like George W. Spinney, the ‘Quiet Man,’ to thank for it.

BORN | 3 April 1889 in Yarmouth, ns JOINED BANK OF MONTREAL | 1906 (Bank of Yarmouth)

GENERAL MANAGER | 1936–42 PRESIDENT | 1942–48 RETIRED | 1948 HONOURS | cmdg, 1941 DIED | February 1948 (n.d.), Westmount, qc TRIVIA | He was the first leader of the Bank to be called “chief executive officer.”

W THE BANKER’S BANKER

Gordon R. Ball

ith the accession of Gordon R. Ball to the presidency from 1952 to 1959, the contemporary Bank begins to come into view. Ball was the epitome of a twentieth-century Canadian banker, working his way up the ranks and through the branches, including spending his formative years as a manager in New York during some of the most interesting times faced by the financial system – boom, crash, panic, depression, and war (1924–45). At the time of his appointment to the Bank’s presidency in 1952, he was the youngest president of Canada’s oldest chartered bank. He oversaw the Bank’s expansion in the post-war period. Ball’s early life shaped his approach to leadership. Born in Toronto in 1897, his youth was one of great economic hardship. He and his brothers supported the family from a very early age after the death of his father. He was a decorated member of the Canadian Field Artillery in the Great War, earning the nickname “Gunner Ball G.R.,” partly because of his stature (he was 5 feet tall) and partly because of his courage in the face of the enemy at the Ypres Salient and at Cambrai – both scenes of bloody conflict for the Canadian Expeditionary Force. He emerged from that conflict with a lifelong limp. In his banking career, he also took on the tough tasks. He managed the Bank’s New York agency Securities Department during the depths of the Depression. During the Second World War, Ball organized the British Treasury’s liquidation of American securities owned by British interests to finance the imperial war effort against the Axis powers. Ball’s New York time marked him and his approach to banking. Returning to Montreal in 1947 to become general manager, he became head of the bank in 1951–52, where he oversaw the Bank’s expansion in the heady post-war boom of the 1950s. In 1958, he established a joint Caribbean venture with the Bank of London and South America Limited called the Bank of London and Montreal. He was also responsible for the purchase of the 2 Wall Street building and oversaw the planning of a major new office tower in Place d’Armes. Gordon Ball was an intensely hard-working executive and inveterate traveller. He also was among the most social leaders in the Bank’s history, attending as many

BORN | 17 August 1897 in Toronto, on JOINED BANK OF MONTREAL | 1914 GENERAL MANAGER | 1947–52 PRESIDENT | 1947–52 RETIRED | 1959 HONOURS | Military Medal, 1919 (3d Batt, 1st Brig., Cdn Field Artillery)

DIED | 28 February 1959 in Montreal, qc TRIVIA | In 1939, Ball acted as the “Keeper of the Purse” for the Visit of HM King George VI and Queen Elizabeth to the United States. Ball found himself dressed in tails in front of a massive crowd who mistook him for King George VI. Ball had no choice but to walk the red carpet to great cheers – until the throng realized he was not the King, at which point the enthusiasm transformed into something rather different. He remarked that he knew what it was like to be king.

as 500 luncheons, cocktail parties, and events in a year. He was a tireless supporter of his community, judging from his devotion to everything from the Royal Victoria Hospital to the many associations in Montreal to the Canadian Mental Health Association. His contemporaries most remembered Ball the man as warm, unpretentious, and humorous. Until the day he died in office of a cerebral haemorrhage in February 1959, he kept a motto at his desk that read, “One of the surest signs of increasing growth in wisdom is a disinclination to take oneself seriously.”

D e ter m ining D estinies

23

THE MODERNIZER

George Arnold Reeve Hart

T

he leadership of George Arnold Reeve Hart coincided with the economic, social, and technological transformations of advanced industrial economies in the 1960s and 1970s. The banking sector itself was beginning to realize, perhaps late, that these changes would transform banking itself. Hart was well qualified to lead the Bank into the contemporary era. He joined the Bank in the depths of the Depression and served five years in the Canadian Army (1941–46). In the post-war period, Hart held a succession of posts from Montreal to Edmonton to New York City (where the Bank was the oldest foreign agency). In the Big Apple, Hart once quipped that he learned “to deal in millions and tens of millions.” Hart envisioned the Bank playing on a national and international scale. He himself travelled to the Asia Pacific and the subcontinent as early as 1953 and clocked 35,000 miles by air – an astonishing statistic considering that air travel was in its infancy. Hart was proud to claim years later that his was the first such trip of any Canadian bank executive. Hart recognized the urgency of change in the Bank in the 1960s, and moved accordingly, famously hiring Fred McNeil and a few executives from Ford Motor Co. to move to a new style of banking. Hart’s motives were intended to push and pull the Bank’s organization into the twentieth century through information technology and new information and control processing systems. The oil shocks and inflation of the 1970s also posed a series of challenges to the Bank. This last challenge, inflation, occupied many of Hart’s public interventions in the early to mid-1970s, as well as the troubling state of the national public debt. Hart led the Bank in a changing social and commercial landscape in Canada, recognizing that

24

Th e BM O Un iv er se

transformations were necessary not only at the Bank but also in the country. He was an energetic contributor to the economic, financial, and business debates of his day. He offered clear, insightful, and authoritative views on the present and future of Canada. “I feel strongly,” he told an audience in Toronto in 1958, “that this country’s growth will be assured, and the purchasing power of its currency preserved, only if Canadians are prepared to work for those rewards … this country was not built by people whose chief concern was how little they should work.” Hart was a Bank of Montreal banker through and through, believing that “you have to treat your people fairly if you want them to pull their share in promoting the business of the bank for the benefit of everyone working in it.” To the contemporary executive his words of 1975 may resonate: “All banking is a judgement exercise. You can’t always be right … You have to take some risks.” And on the Bank’s future: “I want to see the Bank move ahead with the times.” Hart reflected that his greatest satisfaction was “getting to know people … and trying to assist them with their various problems as they relate to banking” – truly the mark of a great servant-leader.

BORN | 2 April 1913 in Toronto, on JOINED BANK OF MONTREAL | 11 September 1931 PRESIDENT AND CHIEF EXECUTIVE OFFICER | 1959–74

RETIRED | 1984 HONOURS | mbe, 1946; cm, 1981 DIED | 5 October 2001 TRIVIA | The Bank’s early judgments of Arnold Hart were on the mark: “A good type of lad who has more than ordinary ability … is keenly interested in and is progressing favourably … Outstanding in every respect and should go far if given the opportunity.” His first job: control the postage at Mount Pleasant Road branch.

COM ES A HORSEM AN

W.D. Mulholland

W

.D. (Bill) Mulholland’s accession to the leadership first as president (1975–79) then as chief executive officer (1979–89) and also chairman of the board (1981–90) caused an earthquake within the Bank – a disruption whose tremors and aftershocks were felt for decades. Mulholland’s career had prepared him for the transformational role he was to play in putting the Bank of Montreal on a bold new strategic course. In 1944, he was commissioned in the US Army in the Philippines. His education included a ba from Harvard College (1951) and an mba from Harvard Business School (1952). His early career was with Morgan Stanley (1952) where, as partner, he led the financing of the massive Churchill Falls Hydroelectric Project in 1962, taking over the entire leadership of that project by becoming president and ceo of Brinco. In 1975, he was appointed president of the Bank of Montreal. The Mulholland era is the stuff of legend among a certain generation of bmo bankers. His style betrayed a single-minded focus on his number-one task: the transformation of the Bank of Montreal. His exacting personality, unimpeachable ethical code, and insistence on operational and strategic excellence would have made him feel at home as a Roman proconsul or a field marshal. The truth of the matter is, in retrospect, the Bank needed to be pushed and pulled into the contemporary era of financial services, to re-create the thrust, capacity, and strategic drive that had propelled it to the top of the Canadian banking system in the past. In carrying out that task, Mulholland was viewed by some as a horseman of the Apocalypse, while others saw a transformational leader – Napoleon crossing the Alps: the conqueror with his steed Marengo. However one viewed him, there was no questioning his commitment to ensuring the institution under his leadership would change to be ready for the future.

Mulholland’s singular vision was to transform the entire Bank – to elevate it to a premier international rank, to restore its operational and competitive edge. Under his leadership, the Bank of Montreal embarked on an epochal internal transformation. The Bank modernized its international and financial markets operations. It moved aggressively into large corporate finance. It streamlined its leadership structure. It established new groups and working groups to respond to the emerging needs of customers and markets. For the first time, women were being more aggressively promoted into the executive ranks. Technology transformation continued and accelerated. In 1984, Mulholland led the Bank to purchase Harris Bankcorp Inc. of Chicago, perhaps the most far-sighted of his actions. In one stroke, he had given the future Bank the strongest position of any Canadian bank in the US market and permanently established the character and remit of the Bank as firmly North American. In 1987, he led the Bank into investment with the purchase of Nesbitt Thomson. The Bank was challenged by global headwinds in the early 1980s, as third-world countries defaulted on loans. Mulholland took a risk and, rarely for him, found himself playing defence. Mulholland’s fame and his transformation of the Bank also came with a shadow side that provided grist for the mill of the popular press. He kept people waiting, sometimes for hours. He kept people guessing as to what his next move would be. The quest for excellence sometimes veered into perfectionism. His streamlining eliminated an entire generation of management. He stuck by unpopular decisions such as the separation of personal and commercial banking. As he himself realized, his single-combat-warrior style of leadership was, by 1990, passing from the scene. But there is a difference between style and substance: in substance – what remains of what was built – his legacy is complex, far-reaching, and created to last. His larger-than-life personality dominated the era at the Bank. But if it hadn’t been for Bill Mulholland, the avatar of transformation in an era of change, the destiny of the Bank would have been very different.

BORN | 13 June 1926 in Albany, ny, usa JOINED BANK OF MONTREAL | 1975 PRESIDENT | 1975–79; CHIEF EXECUTIVE OFFICER | 1979–89; CHAIRMAN OF THE BOARD | 1981–90

RETIRED | 1990 HONOURS | Prime Minister’s Medal (Israel); Knight Commander’s Cross (Badge and Star) (Bundesrepublik Deutschland)

DIED | 8 September 2007 at Windswept Farm, Georgetown, on

TRIVIA | Bill Mulholland’s lifelong passion was horses. He and his family built one of the premier Hanoverian stud farms in the world, Windswept Farm.

D e ter m ining D estinies

25

The W rit ten W orld of bm o

Defining Documents and Directions

A

nyone who visits the Bank of Montreal Corporate Archives will leave with no doubt that the banking business is a supremely information-intensive and document-rich enterprise. As the Bank grew and prospered over time, the challenges of information processing and control grew exponentially. Record-keeping and accounting, tracking and coordination, and correspondence all provided the pulse and the content of the Bank of Montreal information network.

Rules, regulations, strategic decisions, special projects, deals, contracts: the banking world is a written world. In the multi-million-document flow of the Bank’s history, some documents stand out because of their sheer volume and weight: think of the regulations and rules that govern banking. Others, however, stand out because they crystallize a turning point or a particular road taken. These documents define or direct. They each tell a story

about a dimension of the Bank’s experience – from a real estate deed, to a royal charter, to the first annual report published in French, to a key strategic document that launched the Bank into the 1990s. The documents presented here are in no way definitive – an entire book of documents would have to be dedicated to such an endeavour. These, by contrast, are meant to be representative exemplars – and a thematic cross-section – through two centuries.

The Articles of Association

T

he Bank’s Articles of Association are, in many ways, its Magna Carta. The document was the product of a protracted legislative and administrative struggle to establish Canada’s first bank. For many complex reasons, not the least of which was the concern for the financial well-being of the British North American colonies, the imperial Lords of the Treasury were reluctant to offer their full support to colonial banking, except under very specific circumstances and conditions. The first charter would not come until July 1822. Therefore, these Articles of Association represent the foundational document of the Bank of Montreal. The Subscribers, or signatories, had entered into an “Association or limited Co-Partnership” and agreed to “conduct banking Business in the manner hereinafter specified and described, by and under the name or style of the montreal bank .” The private company would conduct its banking business under the ‘superintendence’ of John Richardson, George Garden, George Moffatt, Thomas Andrew Turner, Robert Armour, James Leslie, Horatio Gates, John C. Bush, and Augustin Cuvillier. There were twenty-five articles in all setting out the rules, regulations, and conditions of the banking business, the capital stock of the bank (£250,000 “current money of this province”), the number of directors (thirteen), director eligibility, and other conditions “for the good management of the affairs of the said Association or Company.” The signatories to these original Articles of Association could scarcely have imagined how their actions in the summer and autumn of 1817 would influence the entire course of the Canadian financial system and set the foundations for one of Canada’s key institutions.

The W r it ten W or ld of b m o

29

O Land Purchase Contract for the First Bank of Montreal Building, 1818

30

Th e BM O Un iv er se

n 6 February 1818, James McDowall, a merchant of the city of Montreal sold a lot of land to John Gray, Horatio Gates, and George Platt, representing the newly formed Bank of Montreal, for the sum of £1,872. The first real estate purchased for a Canadian bank was Lot Number 11, “bounded in the front by the Line of continuation of St James Street, on one side by the Line of continuation of St François Xavier Street, on the other side by Lot Number twelve, herein after mentioned, and in the rear by Fortification Lane.” The original land belonged to Paul de Chomedey, Sieur de Maisonneuve, who is immortalized in bronze in Place d’Armes. Maisonneuve sold the land to Jean DesRoches on 10 January 1648. This was only

the second grant of land made by Maisonneuve. The ground on which the Bank’s head office stands, therefore, is rich in historical significance. The Bank purchased that original deed for $1,000 in 1948 after encouragement by former Dominion Archivist of Canada Gustave Lanctôt, who felt strongly that this document should remain in Canadian hands. Construction was completed in less than a year and a half. The first Annual Meeting of Shareholders convened in the new building on 7 June 1819. The classic portico with its Doric columns heralded an architectural style that would be adopted by many other banks and public buildings across Canada during the nineteenth century.

The Royal Charter

T

he Royal Charter of the Bank of Montreal came only after a long struggle, an interminable wait, and an eventual acquiescence on the part of the British imperial authorities. The Bank’s organizers had to wait until the summer of 1822 – almost five years after the institution had begun transacting business. The Lords of the Treasury in Whitehall as well as Colonial Office officials were very careful about issuing banking charters. Joint-stock banking was a relatively fresh innovation: imperial decision-makers had to be sure that royal approval would be merited and that the activity they were sanctioning was worthwhile and beneficial. As a result, royal charters were not easy to obtain and detailed in their restrictions. The articles of the first charter essentially set out the rules of the banking game, who paid and who played. Of the twenty clauses, four are devoted to banking crimes: embezzlement, theft, counterfeiting, and forgery. The first three were punishable by death “without benefit of clergy.”

The W r it ten W or ld of b m o

31

The Resolution to Print the First Bank Notes

T

he resolution to print the very first Bank of Montreal bank notes was passed by the directors on 13 September 1817, weeks before the Bank opened its doors on 3 November 1817. The order to print the first notes was given to Mr Reid, an engraver in Hartford, Connecticut. That same day, the directors of the Bank agreed that one of the partners, John Richardson, be instructed to procure for the Bank a set of plates in London – have

a certain number struck off on the “best Bank paper.” The watermark would have the name of the Montreal Bank as closely as possible imitate the watermark of the Bank of England notes. These materials would then be shipped to Montreal by the first vessel in the spring of 1818, together with a rolling press of the “best construction.” This is how the story of bank paper currency began in Canada.

Letter to George Spinney from Prime Minister Mackenzie King

T

he Bank of Montreal’s involvement in wartime finance for both the first and second world wars was extensive and often intense. The Bank mobilized its head office administration and branch network to promote the savings campaigns in order to raise the funds required for the national war efforts in both conflicts. On a separate track, fundraising was also supported on behalf of Canadian auxiliary war services such as the Royal Canadian Legion, Salvation Army, Knights of Columbus, and ymca /ywca . The Bank’s role in wartime finance was not limited to these extensive activities. The Bank’s senior

managerial capabilities were also conscripted to the war effort. The managerial capabilities that were required in mobilizing the administrative capacities of wartime finance were considerable – so considerable, in fact, that the capacities of the Government of Canada expanded virtually exponentially during this period. The document provided here is a letter from Prime Minister William Lyon Mackenzie King to the Bank of Montreal’s G.W. Spinney. Spinney was on loan to the Dominion war effort as the chairman of the National War Finance Committee. The letter congratulates Spinney on the overwhelming success of the Fourth

Victory Loan in May 1943. The success of the loan came at a crucial time in the war, as King mentions in the letter, coinciding with the need to “demonstrate unity of purpose” in the ongoing war effort. King expressed his appreciation in the House of Commons on 17 May 1943 for the record $1.1 billion raised “in firm support of Canada’s fighting men in the campaigns which must be undertaken before victory can be achieved.” There were a total of nine victory loans in the Second World War, raising approximately $12 billion.

The W r it ten W or ld of b m o

33

The First Annual Report in the French Language

T

he first annual report of the Bank of Montreal to be published in French came in 1962, in the 145th year of the institution’s existence. What today is taken for granted – the publication of key bank documents in both official languages – was only beginning to become de rigueur. The fact is that the Bank’s roots – its culture, character, and activities – for over a century were deeply anchored in the English-speaking Protestant community of Montreal. The cultural and operational parameters of its management found its expression predominantly in English, the language of business. The cultural, political, and linguistic ferment of the 1960s in Quebec gave rise to what historians call La révolution tranquille or the Quiet Revolution. This movement transformed almost every aspect of Quebec society – social, cultural, political, and economic. Under the banner of maîtres chez nous – masters in our own house – the people of Quebec began to assert their collective rights as a people, not least in the area of language and linguistic rights. Therefore, the appearance of the Bank’s first annual report in French is the modest beginning of part of a much larger and complex story of adaptation to new conditions and realities, new dynamics and new opportunities in the province. As General Manager R.D. Mulholland instructed in a circular on the subject, the Bank had in mind “important French-speaking customers to whom the new [French] edition of the report may be of interest, and also prominent citizens, officials of community organizations and municipal officers, including mayors of municipalities who are customers of the Bank.” As the province’s economic power began to grow, so did the possibilities of finding new ways to reach customers – beginning with speaking their language.

34

Th e BM O Un iv er se

Canada’s First Bank, Volumes i and ii

T

he celebration and commemoration of history and historical milestones has long been a subject for historians to ponder. What, exactly, are people celebrating? What was important to them? What did they emphasize, and what did they leave out? Were any controversies buried? Were people looking back or looking forward? These are questions that future generations will ask of our generation. Our generation gets to ask them of the last one. The Bank’s 150th anniversary celebration in 1967 was celebrated on a substantial scale. The Bank participated actively in Expo 67 and in the Centennial of Canadian Confederation in 1967. The Bank’s 1967 Committee was formed in January 1963, four years before the event. The Bank’s celebrations included scholarships, art exhibits, and a host of civic awards. The Bank also commissioned drawings of every corner of Canada by artist R.D. Wilson. Other plans included postage stamps, silver dollars, pins, new scholarships, a film, and the funding of a Montreal Observation Tower, anniversary dinners and receptions, and special donations. The 150th anniversary was also the year of a new beginning, a new reorganization, and a stunning corporate symbol: the M-Mark (more commonly known as the M-Bar), marking the “spirit of vitality and progressiveness with which the Bank faces the future,” in the words of one memorandum of the era. Publication of the two-volume Canada’s First Bank is the lasting legacy of the 150th anniversary celebration. The author, amateur historian and journalist Merrill Denison, was commissioned in 1955 to write the volumes, which took twelve years to complete (a luxurious time frame considering contemporary timelines!). The volumes showed the generation of 1967 how much the Bank had accomplished in 150 years. While the volumes are very much a tribute to the historical biographical style of yesteryear – even at the time of their

publication – the sheer work involved and the attention to detail are also legacies of the 150th anniversary. Past commemorations remind us of how different, and yet how very much similar, we are to the generations that preceded us. Generation 1967 and Generation 2017 are not so far apart. We are, as a people, an

historical people. We understand its importance. We celebrate our achievements. We use anniversaries not only to mark the past but also to express our enthusiasm for the present and future. We try to learn from that past by embracing what is worthwhile and leaving behind the rest.

The W r it ten W or ld of b m o

35

I

The Task Force Report on the Advancement of Women in the Bank

36

Th e BM O Un iv er se

n the early 1990s, the Bank struck three important internal task forces on the advancement of women and other groups. Under the leadership of President and Chief Operating Officer F. Anthony Comper, the Bank moved to understand and act upon the question of how best to unleash the capacities of people and groups whose talents and potential had not been sufficiently recognized or taken care of in the world of work. The Task Force on the Advancement of Women in the Bank, led by bmo Senior Executive Marnie J. Kinsley, reported in November 1991. Its findings included, for example, that three-quarters of the then-28,000 permanent employees were women, yet they constituted only 9 per cent of executive positions and 13 per cent of senior management. That “dismal” performance, as Tony Comper explained in the preface to the report, was among the best in the banking industry, thus underlining the seriousness of the issue. The landmark report was an unusually candid examination of the perceptions and the realities of contemporary women bankers struggling to move forward in financial institutions. It also served as an important reality check to the Bank’s leadership. The report also began to shape future strategy and the four key recommendations – get the facts out; help employees get ahead; reduce the stress (on women and families); and make it official (and accountable) – was the beginning of a long process toward gender balance in the Bank. The task force also came up with twenty-six action plans that would be implemented in the wake of the report. The report began to change the culture at the Bank over time through initiatives that have sustained the momentum of the initial work in the early 1990s. The Bank’s efforts were recognized by the 1994 Catalyst Award for promoting the advancement of women. Similar task forces followed in the 1990s on Aboriginal advancement, visible minorities, and the employment of people with disabilities. Both of these important reports were inspired by the success and effectiveness of the advancement of women task force.

The 1990 Corporate Strategic Plan

The Plan unleashed an energy and enthusiasm within the Bank that not even the senior leadership was completely prepared for. The framework it laid out very much set the stage for the Bank’s renewal and its achievements during the critical decade of the 1990s.

T

he 1990 Corporate Strategic Plan was perhaps the most important strategic document of its generation. It signalled a major shift in the operational philosophy of the Bank under the new leadership of Matthew W. Barrett (pictured here), successor to W.D. Mulholland. The shift focused on reorienting the leadership, the organization, the operations, and the outlook of the entire Bank organization toward customer service. But this document was rather more than just a reorientation toward customer service. The times demanded that the Bank step up to a transforming operational landscape. The Strategic Plan did just that. It set out a specific vision that focused on renewing the Bank’s commitment to operational excellence and to providing customers with value, service, and high ethical standards. It refreshed commitments to shareholders, employees, and communities in a way that encouraged a sustained engagement with the wider world. The document also set out priority markets in Canada and the United States that ranged from individuals and small- and medium-sized businesses to larger enterprises to corporate and institutional investors. The Strategic Plan was itself a well-planned exercise that involved a wide canvas of executives over every aspect of the business. The process identified what was working and what was not working. The exploration phase examined morale, chain of command, business planning, and even the Bank’s image. The plan that emerged from the research phase then encompassed every aspect of the business and presented “success strategies” for each. Crucially, it also did a few things that were deeply desired and popular within the Bank, such as reintegrating personal and commercial banking.

The W r it ten W or ld of b m o

37

Authorization for Banking in China

T

he authorization to begin branch operations in China was officially announced on 21 December 1994, after months of negotiation. The Bank received approval to open a branch in Guangzhou, capital of Guangdong province. The branch was a Bank first in the People’s Republic of China, although a representative office had been operating since October 1993. The Bank was one of only ten international banks granted permission to open a branch in Guangzhou. The branch was opened on 20 November 1995. Entry into China was a key element in the Bank’s targeted global expansion strategy. bmo ’s presence in Guangzhou, a manufacturing city of 8 million northwest of Hong Kong on the Pearl River, was essentially to help Canadian businesses, especially small- and medium-sized enterprises who were looking to finance trade and investment opportunities in China. “There is an insatiable demand for financing in this region,” explained one bmo official on the ground in China, especially from joint-venture companies and Canadian enterprises wanting to do business in China. The Bank’s move into China in the 1990s and its sustained interest made excellent economic sense. From a trade perspective, China had already become one of Canada’s most promising partners by the mid-1990s. In the five years between the opening of the bmo branch in Guangzhou and 2000, China-Canada trade flows vaulted from $8 billion to almost $15 billion. The Bank’s sustained interest in, and commitment to, the Asia Pacific over the subsequent two decades has been an important hallmark of the Bank’s recent history.

38

Th e BM O Un iv er se

Announcement of the Institute for Learning (ifl )

O

n 1 October 1991, the Bank announced plans to build a $40-million complex in Toronto, Ontario, destined to become the Institute for Learning. The new centre was the only facility in the industry dedicated exclusively to the development of employees, and one of only a few such facilities in the corporate world in North America. Launched by Matthew W. Barrett, the Bank’s ceo and chairman saw this landmark initiative as bmo ’s

reaffirmation “that to be among the best banks in North America, Bank of Montreal must have the best employees in the business.” The new complex would be the physical manifestation of those aspirations – “our strategic plan cast in brick and glass and concrete.” Under the superb guidance of principal architect Raymond Moriyama, the ifl was to have a teaching college of thirteen classrooms, four student lounges, a resource library, a corporate training department, and a presentation hall that could accommodate up to 250 people for all kinds of meetings. The ifl was also to have 150 single sleeping rooms, a dining room, bar, reading room, and fitness facilities. It was estimated

that more than 13,000 employees would visit the centre each year to meet the Bank’s goal of providing five training days for 34,000 employees each year – “a level matched by only a handful of corporations in North America.” The decision to build the centre was a strategic investment decision, according to Barrett. “There are many competing claims on our funds,” he concluded, “but we believe that none is as important as the development of our own people, and none has greater potential to provide a significant return to the Bank in the future.”

The W r it ten W or ld of b m o

39

A Gro w th Business

bmo and Its Canadian Acquisitions

S

uccessful, well-managed banks will typically be confronted by the challenge of the nature, extent, and speed of expansion. Should they grow organically, branch by branch? Should they purchase other, smaller, or less efficient financial institutions in order to achieve immediate results and a ready-made set of branches and assets? There are further considerations that transcend any individual bank. For example, do changing economic conditions in technology, management, or market conditions suggest to bank managers that economies of scale are needed to pursue their business more effectively? Can smaller companies and institutions compete as economies and markets develop? Sometimes, it is not even a question of size or scale, but the ability to innovate and embrace new, lucrative markets.

For the Bank of Montreal, all these questions have come into play in the question of acquiring competitors or other banks. In the real world of Canadian banking, moreover, the decisions to acquire have been more complex than the considerations that economic theory would set out. Sometimes, the motivation was to gain entry into a market. At other times, the reputation of the Canadian banking system might have been at stake in the case of a struggling or failing bank. In that case, the Bank of Montreal as the senior Canadian bank, along with a few of the other established banks, felt a responsibility to ensure the smooth operation and the high reputation of the system itself. Sometimes, the story is straightforward; occasionally, the story of an acquisition is more curious or exciting as Bank of Montreal

managers move to acquire banks as part of a competitive impulse, or to forestall the arrival of unwanted or undesirable players in the market. The mergers featured here take place in two eras: the first is the 1820s and 1830s; the second is between 1900 and 1925. In fact, the last bank to be acquired before the contemporary era was the Molsons Bank in 1925. The Bank’s next major Canadian acquisition would come over sixty years later, with the acquisition of Nesbitt Thomson in 1987. To a greater or lesser extent, the banks featured here have their own histories and trajectories. They have also been part of the Bank of Montreal’s trajectory, making them a notable part of the history of the Bank.

The Bank of Canada, 1818–31

T

he Montreal-based Bank of Canada has the distinction of being the first bank to be taken over by the Bank of Montreal, in 1831. This Bank began life in 1818 as a private enterprise. In 1820, the organizers of the bank petitioned for incorporation. In 1822, the

administration of the colony granted it a charter to conduct business. Canadian banking had only just taken root in the British North American colonies, and so banking establishments were somewhat experimental enterprises, especially in the colonial context. Add to this the untamed and sometimes wildly swinging nature of the colonial economy and you have a recipe for a potentially unstable banking and financial environment. The short lifespan of the Bank of Canada underlines the bad chemistry that can occur between untrained

management, bad markets, and bad luck. The sharp economic contraction of 1825 in the colony and the following depression in 1826 sealed the fate of the first Bank of Canada. The bank was not alone in suffering the consequences of the downturn. It was a blow from which the management could not recover. By 1831, the Bank of Canada discontinued business, with its business taken over the Bank of Montreal, which had been able to weather the storms of the late 1820s more effectively.

A Gro w th Business

43

The Bank of the People, 1835–42

T

he Bank of the People was established in Upper Canada in 1835 and conducted a respectable business in the colony – which is saying something in the tumultuous 1830s. That decade featured a boomand-bust economic cycle and rising political tensions in both Upper and Lower Canada, culminating in the

44

Th e BM O Un iv er se

outbreak of rebellion in 1837–38. In 1838, the Bank of Montreal bought the bank. In 1841, it purchased the bank’s entire capital stock of £50,000 for one main reason: to gain access to the potentially lucrative markets of Upper Canada. After 1823, the Montreal Bank had been prohibited by law from conducting a banking business in the neighbouring colony. Upper Canadians argued successfully that they wanted to favour the development of banking on their own soil, in their own colony. As a growing and successful bank, the management of the Bank of Montreal understood the importance of expansion into the economically promising communities west of the colonial border. Control of the Bank of the People was the way for Montreal capital to be deployed into the communities of Upper Canada. Where politics failed, business succeeded in finding a way through. The union of the Canadas in 1841 brought together what is now southern Ontario and southern Quebec under one administrative and legislative unit. New political arrangements meant that the prohibition against Montreal-based banks conducting business in Toronto, and vice versa, was solved. The Bank of the People had served its purpose and retired as the Bank of Montreal established its first branch in the city of Toronto under cashier and agent William Allan. It was, therefore, from modest, almost borrowed beginnings that the Bank of Montreal’s presence grew in Toronto. In fact, the Bank of the People branch was located at the intersection of King Street and Bay Street – the place where First Canadian Place would rise a century and a half later. (For the Bank’s contribution to the architecture and built environment of Toronto, see A Sense of Place, page 98.)

The Exchange Bank of Yarmouth, 1869–1903

T

he Exchange Bank of Yarmouth was established in 1869 in Yarmouth, Nova Scotia, a seaport town in the southwestern part of the province on the Bay of Fundy founded in 1759 by New England Planters from Yarmouth, Massachusetts. Its claim to fame has been

its location in the heart of some of the world’s largest lobster fishing grounds. In the nineteenth century, however, the lifeblood of the town was its shipbuilding industry. The Exchange Bank of Yarmouth prospered in the ensuing three decades. By the dawn of the twentieth century, however, the problem was how to compete with larger, better-managed banks with superior technology and access to resources. The Yarmouth bankers found a willing purchaser in the Bank of Montreal, which was looking to expand its presence in Atlantic Canada.

By the end of the Yarmouth bank’s tenure, its circulation of notes was approximately $200,000. The Bank of Montreal paid $321,190 for the bank upon the transfer of the assets of the purchased bank on 15 May 1903. The Yarmouth bank had assets of $680,303. The purchse of the Exchange Bank of Yarmouth in 1903 was the Bank of Montreal’s first acquisition in six decades, beginning a wave of mergers and consolidations in the Canadian banking system that would transform the face of the system for decades to come. A Gro w th Business

45

The People’s Bank of New Brunswick, 1864–1907

T

he People’s Bank of New Brunswick, like so many regional banks in Canada, provides us with a good example of the rise of the civic and entrepreneurial spirit in the nineteenth cenutry. The founder of the bank, Archibald Drummond Fitz Randolph, was a Fredericton wholesaler/entrepreneur who established

46

Th e BM O Un iv er se

the bank with $60,000 in start-up capital. “Archie” Randolph’s career was that of railway promoter, serving as treasurer of the Fredericton Railway Company, which succeeded in building a line to connect to the Western Extension railway from Saint John to Maine in 1869. His enterpreneurial drive also propelled him into the insurance business and into gas lighting and lumber concerns. This was in many ways a family bank, since the founder managed the bank until his death in 1902, and his family as principal shareholders sold it to the Bank of Montreal in 1906.

In the early 1900s, the Bank of Montreal management had decided to expand its territory through acquisition of smaller regional banks, which included the Exchange Bank of Yarmouth (1903) and the People’s Bank of Halifax (1905). In 1907, the Bank purchased all the shares of the New Brunswick bank for $350 per share.

The People’s Bank of Halifax, 1864–1905

W

hen banks are prosperous and want to expand, they go shopping. Such was the case with the People’s Bank of Halifax, founded in 1864. The acquisition of the Halifax bank, with its paid-up capital of $1 million and a reserve fund of $440,000, allowed the Bank of Montreal to expand significantly, largely but not exclusively in the Maritimes and in Quebec. For the managers of the People’s Bank, sale was inevitable. In a note to the shareholders on 25 March 1905, the directors wrote that they were “led to take this course in consequence of impending losses, keen competition and the strained resources of the Bank which seem to make it advisable in the interests of the shareholders. Your Directors have found great difficulty in providing for the wants of their customers and keeping the business of the Bank in a healthy condition with the limited resources at their command, while the keen competition of the larger institutions render it year by year more difficult to make profits for the shareholders.” At the time of purchase, the People’s Bank of Halifax operated twenty-four branches, fifteen of them in the Maritime provinces, and a number of branches in southern Quebec. One Bank of Montreal memo suggested that with judicious management, the People’s Bank would become “a source of profit to the Bank of Montreal, while affording increased banking facilities to the mercantile community in Quebec, New Brunswick and Nova Scotia.” The Bank’s acquisition of the Halifax bank allowed the Bank of Montreal in one stroke to become as strong as other major banks in Nova Scotia and New

Brunswick. The price tag was $1.15 million – $138,000 in cash and the rest in Montreal stock (valued at $253 per share). This was considered below market price. In the last year of its pre-takeover operations, the People’s Bank was able to register a profit of $35,655.57.

A Gro w th Business

47

The Ontario Bank, 1857–1906

T

he Ontario Bank was established in 1857. By 1906, it had twenty-two branches in Ontario and Quebec. That year, the Bank of Montreal took over the assets of the Ontario Bank after a general manager, Charles McGill, had invested badly in the stock market and lost $1 million, but not before falsifying the books to cover the mistakes. “The immediate absorption of the Ontario

48

Th e BM O Un iv er se

Bank by the Bank of Montreal,” the Globe suggested, “is a most gratifying proof that our banking system and banking institutions are too strong to be shaken by even the worst effects of personal or corporate delinquencies. Instead of alarmed depositors and panicky noteholders who crowd to the closed doors of embarrassed banking institutions under less stable conditions, we witness the simple transfer of the accounts to the largest and strongest of our chartered banks. The injurious disturbance of commerce and finance which elsewhere attends and follows the forced closing of a banking institution is thus entirely averted, and the business goes smoothly on without a loss or inconvenience to the general public.” The paper went on to suggest that “the highest praise should also be accorded to the president and directors of the Bank of Montreal for their prompt action and assuming all the Ontario Bank’s liabilities to depositors and noteholders.” While the banks had no legal obligation to act, “all chartered banking corporations also feel a responsibility to the business community for the general stability of the fiscal system under which they operate, and are directly interested in maintaining that stability and sustaining unshaken the confidence of the public. The Bank of Montreal has risen to all the demands of this broader responsibility and promptly assuming the liabilities of the Ontario Bank before the nature of its impairment could be known to the general public, and even before the story of its difficulties could obtain general circulation. Simultaneous with the story of personal mismanagement and recklessness has come the announcement that all the liabilities of been assumed, that accounts will be transferred to the Bank of Montreal, and that all obligations will be liquidated with open doors.”

The Newfoundland Savings Bank, 1834–1962

T

he Newfoundland Savings Bank was founded in 1834 and operated a colony-wide savings business from a single branch in St John’s, on Duckworth Street. The savings bank was run as a department of the provincial government until then. Much of the old bank’s business with depositors in the outlying areas of the province was conducted by mail. The Bank of Montreal has had a long and complex relatonship with the Dominion of Newfoundland. In the 1890s, a bank crisis precipitated by a financial downturn compelled the Newfoundland government to invite the Canadian banks into the banking market, chief among them the Bank of Montreal. The Bank thereafter established a close working relationship with the government, becoming government banker in the early part of the twentieth cenutry, opening for business in the same premises occupied by the Newfoundland Savings Bank. It is difficult to overestimate the Bank of Montreal’s persistent influence in the history of twentieth-century Newfoundland in banking and in the government of the Dominion. It is, therefore, not surprising that the Newfoundland Savings Bank was sold to the Bank of Montreal in 1962, adding its $27.8 million deposits and its office to the Bank’s then $3.653 billion on deposit bank-wide. The bank was sold to the highest bidder – the Bank of Montreal paid a shade less than $3 million – after the provincial government of Premier J.R. Smallwood decided that the offers they were receiving were insufficient.

A Gro w th Business

49

T The Bank of British North America, 1836–1918

50

Th e BM O Un iv er se

he Bank of British North America (bbna ) was founded in 1836 under royal charter and had the distinction – and one-time advantage – of being organized and run from London. The bank had a branch network that extended from St John’s in the Dominion of Newfoundland to the principal cities of Atlantic and Central Canada. It was also the first bank to operate in British Columbia. The Bank of Montreal’s takeover of the bbna is a particular case in point on the importance of reputation to Bank of Montreal bankers. By the 1910s, the UKbased board of the bbna found it increasingly difficult

to manage the intricacies of Canadian banking from across the ocean, which can perhaps be considered an operational or practical matter. As early as 1915, in fact, the Bank of Montreal had been receiving representations from the bbna about a possible merger. But Canadian Finance Minister Sir Thomas White poured cold water on the suggestion, informing the Bank that the country would not be friendly to further bank amalgamations. However, the threat of a bbna takeover by Lord Beaverbrook, the Canadian financier Max Aitken, was much more in the realm of reputational risk for Canadian banking, and therefore, acquisition by the Bank of Montreal was approved. From the Bank’s perspective, it would be a shock if Beaverbrook’s plans were carried through to completion. The Beaverbrook strategy seemed to focus on the Colonial Bank, which he controlled, taking over the bbna in anticipation of a merger of Canada and the West Indies. The negotiations for the bbna were long, drawn out, and extensive. The magnitude of the acquisition was significant, and involved a mobilization of administration and a great deal of preparation. It also involved the Canadian government. Finance Minister White was increasingly reluctant to grant any further mergers or acquisitions among Canadian banks or financial institutions as public sentiment had become decidedly uneasy about a perceived lack of competition among banks. By the spring of 1917, the situation had deteriorated so much – from the Bank of Montreal’s point of view, at least – that bmo President Sir Vincent Meredith wrote to White recalling that while in 1915 the “feeling of the country was strongly opposed to such Bank amalgamation unless the Bank to be purchased was nearing financial straits,” he yet felt that the time had come for action. As Meredith explained to the finance minister, more than one reputation was at stake in the deal: those of the bank, the Canadian banking system, and the country. The deal was sealed on 20 March 1918.

The Merchants Bank of Canada, 1861–1922

T

he Merchants Bank got its charter on 18 May 1861, and began business three years later, in 1864, with an authorized capital of $2 million. The bank’s Montreal founders included Hugh Allan, the Hon. Louis Renaud, Harrison Stephens, Edwin Atwater, and other prominent citizens of Montreal. The bank was chartered in 1868 as the Merchants Bank of Canada, absorbing in the process the Commercial Bank of Canada. This Montreal-based bank prospered until after the First World War. The Merchants was credited with being the first Canadian bank ‘to follow the star of empire westward’ and the first to open a branch west of Ontario – in Winnipeg. In the early 1920s, its management got into trouble with investments – a typical story – and in the 1922 annual meeting, the $12.298 million loss was revealed. The cause of the collapse was a large loan to Thornton Davidson, an investment house that failed. In the autumn of 1921, the Bank of Montreal stepped in with an offer to purchase the struggling bank following “wild days of rumours, much excitement on the stock market, and some concern among financial men generally,” according to press reports. The failure of that bank under the presidency of Sir Montagu Allan was ascribed to “adventurous banking carried on by the General Manager” and “transacted without the knowledge of the Directors.” Allan himself was charged with fraud and malfeasance offences but was not committed to trial and escaped any prison sentence. The Bank of Montreal purchased the Merchants Bank of Canada for $1.05 million, equal to $10 per share. The Bank was also granted an increase in its capital stock

to meet the increased circulation requirements of the Bank post-acquisition. The Government of Canada was reluctant to approve the deal on general principles, especially since the wave of mergers in the previous decades had created an impression in the public mind that competition would be unduly restricted. But it was the specifics of the case, and the danger of the collapse of the Merchants itself, that persuaded the Dominion government to acquiesce in the purchase for the safety of the system and to avoid “a condition of alarm concerning our banks generally, which would be prejudicial to the public interests.”

A Gro w th Business

51

T Molsons Bank, 1853–1925

52

Th e BM O Un iv er se

he Molsons Bank was established in 1855 under the provisions of the Free Banking legislation passed in Canada in the early 1850s. The bank’s establishment realized the dream of John Molson Sr that banking should be owned by a family or tight partnership to ensure sound management. The new family bank provided greater financial flexibility to the expanding busines of the Molson enterprises and, in particular, became an important resource to the agricultural community of its day. Its growth throughout the nineteenth century and early twentieth century is testament to this fact. The connection between the Molsons and the Bank of Montreal extends virtually to the latter’s origins, with John Molson’s participation in the management of the young Montreal bank – and eventually its presidency. Thereafter, the family provided business and enterprise expertise on the board fairly consistently for decades. By the mid-1920s, the Molsons Bank had 125 branches in its network, mainly but not exclusively in Ontario and Quebec. The bank’s president, Fred Molson, began discussions with Bank of Montreal director Col. Herbert Molson (who was also his cousin) on the possibility of the larger bank taking over the smaller one. Banking in the 1920s, especially for smaller banks, had become more difficult in the wake of some spectacular failures, including the Merchants Bank and, notably, the Home Bank in Ontario. Bank depositors had every right to be vigilant, since there was no deposit insurance. Bank customers had to assess the risk of investing and depositing in smaller banks in particular, since they could lose their money. The merging of the two banks was made easier by the close ties – social, banking, financial, and otherwise – between the respective managements, and especially between the Molson family and the Bank of Montreal as an institution. The merger was completed in early 1925.

ten Days of Decision

Pivot Points

D

evoting a chapter to particular days that changed the Bank can be a dangerous undertaking, not least because it can raise more questions than it resolves. First of all, why ten? Why days and not months or years? Doesn’t the choice of days themselves suggest something about the way history itself is being viewed? What difference can a day – a mere twenty-four hours, if you’ll forgive the phrase – really make? Why those days and not these much more interesting/ important/consequential days? Some might suggest that we are making some assumptions about organizations in time, that the longue durée is far more consequential than the individual, formal day when something happens. That day can represent merely the culmination of a process, a decision, an event that in itself took months or years to come to fruition. History and

historians constantly are reminding us of the deeper, subterranean processes at work in the making of our history, the tidal forces of global capitalism, nationalism, world wars, and the like. These perspectives allow us to understand that the people of each generation of the Bank of Montreal were not just directing their steps and taking their decisions toward a horizon without a future. Yet there is something intuitive and compelling about focusing on the day. It is a unit of time that is human and easily understandable. Some days stand out – birthdays, anniversaries, deaths, the birth of nations – and for all that, can be no less complex than a longer duration. There is a ‘before’ and an ‘after.’ There is something that binds us to the day, as we live most dramatically in the day. We know that there are good days and bad days, important days, days that flow quickly, and

days that drip slowly on the page. This chapter, therefore, uses these days as points of reference, days that meant something to the past, present, or future of the Bank of Montreal – and sometimes all three. Each day represents a particular moment in time that symbolizes, projects, starts, or ends something. The days chosen here offer us different pieces that form a mosaic of the experience of the Bank. It is by no means comprehensive – only suggestive of some of the major turning points in the life of the Bank. Each Bank of Montreal employee, past and present, will have his or her own perspective on the specific days that changed their institution. In truth, there are likely hundreds of such days that cut across the surface of two centuries. While these chosen barely scratch that surface, they all point to an important aspect of the Bank’s story.

3 NOVE M BER 1817

Open for Business

W

taken up with preparing for the opening, hiring personnel, raising capital, preparing the currency, holding the requisite meetings, and giving the final approvals. The announcement in the Montreal Herald and the Canadian Courant was plain and simple – “without fanfare” as it was once described: “23d October 1817. the bank will begin its operations on monday the 3d of November next. Bank Hours from 10 o’clock a m to 3 o’clock p m . Discount days, Tuesdays and Fridays. Bills and Notes for Discount to be sent under cover to the Cashier on the days preceeding.” It is from these humble beginnings that what seem like ordinary days turn out to be significant in the retrospective gaze of posterity. At the time, however, some humility was perhaps in order: the Montreal Bank was not chartered and, in fact, would have to wait five years for its first official charter. The opening was also something of an exhausted ending as well as a beginning: an ending to the struggle for colonial banking that had taken up the greater part of a quarter century. The Bank’s first offices were on St Paul Street – the main commercial artery of this city of 16,000 inhabitants that dissected the centre from east to west. This was the epicentre of Montreal’s – and Canada’s – commercial awakening in the nineteenth century. The Bank’s premises were very likely comprised of a small door through which one would find a small vestibule leading to a small banking chamber, a fireplace, some high bookkeeping desks, and the then-current equipment of Canada’s first banking venture. Thus began what would become the extraordinary adventure of Canada’s first bank.

e are compelled to go back to the very beginning – to the first day of business – to find the first truly remarkable day in the Bank of Montreal experience. Of course, the Bank was not built in a day. In fact, this day, 3 November 1817, was the culmination of days, weeks, months, and years of struggle by Montreal merchants to establish such an operation in the face of imperial ambivalence about the wisdom of such a project. Much of August and September of that year was

ten Days of D ecision

55

Parliament buildings under construction, Ottawa, Ontario, 1865. Photograph by William Notman

19 NOVEM BER 1863

Canada’s Banker

B

y an Order-in-Council, dated 19 November 1863, the account of the Government of the Province of Canada was transferred to the Bank of Montreal on 1 January 1864. From that date, the Bank acted as the financial agent of the United Province of Canada.

56

Th e BM O Un iv er se

In the past, the Bank of Montreal had acted as a financial agent of the United Province, but the 1863 appointment was in some respects different. The Bank by the 1860s had managed to emerge as the dominant player in Canadian banking, especially after the difficulties and eventual demise of its archrival, the Bank of Upper Canada. This was a critical decade for Canada, with political and economic momentum growing to join the British North American colonies into one political and administrative unit. The Bank’s capital and resources were critical to the operations of the

colonial government in the run-up to Confederation in 1867, and thereafter. The Bank’s leaders, moreover, were deeply involved in the financing of the projects of the new Dominion, not to mention attempts to develop a new banking system for the country. Relations between Bank of Montreal executives and key members of the newly minted Canadian Cabinet, especially Prime Minister Sir John A. Macdonald, were especially close. The Bank also acted as the key Canadian bank in the financing of the Canadian Pacific Railway (1880–85), a project closely allied not only to the Bank but also some of its brightest individual lights – Lord Mount Stephen and Lord Strathcona. The Bank’s capabilities and capital and its establishment in the two great capital markets of the North Atlantic world – London and New York – also led the Bank to later represent the Dominion of Canada’s financial affairs in those capital markets. The Bank acted as financial agent of the Dominion in London well into the 1930s, until the newly established Bank of Canada took over those responsibilities. It was financial agent not only to the Government of Canada but also to myriad provinces, cities, and towns across the vast transcontinental expanse that required financing and representation for their needs in the capital markets of the North Atlantic world. At home, as the senior bank, it acted as the ‘coordinator-in-chief ’ of the Canadian banking system as that system grew and matured across the country. In many ways, then, the Bank of Montreal was ‘Canada’s Banker’ for a vital period in the country’s development, providing capital, resources, expertise, financial talent, and personnel for the great Canadian project. Times change; new players like the Bank of Canada emerge; new challenges and opportunities present themselves. At every stage of Canada’s development, past and present, the Bank has answered the call to serve the country, its communities, enterprises, and individuals with probity and distinction.

15 M ARCH 1870

The Bank at the Centre of Empire – London

T

he establishment of a permanent office in the City of London was a signal achievement for the Bank of Montreal. It was also an important moment in the history of Canadian colonial capital. Of course, the Bank was not only familiar with its principal capital market for decades but also had established a web of close relationships within government and financial circles in the City. Such networks were essential for the Bank’s business and for the financing of Canadian development. Later, the Government of Canada would depend on the Bank’s operations to represent its capital requirements and financial interests in the imperial capital. The day in question, 15 March 1870, was the day that the Bank board granted authority to open an office in London. Premises were leased at 27 Lombard Street, mere yards from the Bank of England, the Royal Exchange, and the Mansion House. The branch later moved to Abchurch Lane, and thence to Threadneedle Street in 1907. The Bank’s operations there were supervised by an “influential local board,” with the “object of developing and extending the British and Foreign trade of the Dominion through the agency of the Bank of Montreal,” commented E.H. King, president of the Bank, at the annual meeting in June 1870. Robert Gillespie Esq., Sir John Lubbock, Bart., Sir John Rose, kcmg, and Brice Hugh Pearse, Esq. were appointed to form a committee to represent and superintend the business of the Bank in London for a remuneration of 300 sterling each per annum. Mr Fred Gundry, formerly second agent in New York was secretary of the committee. The formal establishment of a permanent London presence of the Bank of Montreal was not only a Bank achievement but also a significant achievement for the young Canadian nation as it sought to promote trade, finance its requirements, and embark upon a period of nation-building infrastructure projects. The London office put the Bank of Montreal in the 1870s exactly where it wanted to be: in the centre of the action, acting as an emerging player in the finance of the North Atlantic world.

ten Days of D ecision

57

23 M ARCH 1863

“The Monetary King of Canada” Takes the Reins of the Bank

T

he appointment of Edwin Henry King to the general manager’s position of the Bank of Montreal was perhaps the most significant appointment to leadership in the history of the institution. King’s biographical details are recounted in Determining Destinies, page 15: born in 1828, arrived in Canada in 1850, employed in banking for seven years before arriving at the Bank of Montreal. He quickly ascended the ranks, succeeding David Davidson as general manager on 23 March 1863. He became president on 5 November 1869 and retired in 1873. It is hard to overestimate King’s influence both on the Bank of Montreal and on the Canadian banking system in the key decade of the 1860s. He inherited the leadership of the Bank at a time when its performance and its destiny were anything but clear. He put the Bank’s operations on a much more solid footing, gave it a thrust and a strategic vision that fully exploited the

58

Th e BM O Un iv er se

Bank’s capacities in the financial markets of colonial Canada. He extended and developed the Bank’s links with the New York and London capital markets. Under his leadership, the Bank was able not only to navigate some of the most dangerous challenges it had yet faced, including the US Civil War (1861–65), but also to consolidate its leadership in Canadian banking and exert every possible influence on the formation of the Canadian banking system in the advent of Confederation. While King’s plan for a new architecture of Canadian banking did not see the light of day, his influence on the destiny of the Bank and the Canadian banking system in the dangerous decade of the 1860s is undeniable. As a leader in Canadian banking, King was destined to last but a few short, intense years. His nicknames “The Monetary King of Canada” and “the Napoleon of Canadian Finance” offer clear hints as to how he approached the Canadian banking fraternity of the 1860s. He was aggressive, high-handed, harsh, and arrogant. These qualities also ensured that his career, however brilliant, would be short. But King’s influence, his vision, his performance, and his achievements re-established the supremacy of the Bank of Montreal as a financial institution in the lead-up to, and advent of, the creation of Canada.

11 M ARCH 1935

The Bank of Canada Opens for Business

T

he emergence of the Bank of Canada as the country’s central bank was a key moment in twentieth-century banking history. Canada was one of the last major North Atlantic countries to establish a central bank, since the need for one was hotly contested up until the mid-1930s. In other words: the banking system worked, so what was there to fix? As Canada’s first bank and senior bank, the Bank of Montreal had acted as government banker for decades while the Canadian Bankers Association acted as a coordinating body for the banks alongside the Canadian Department of Finance. Therefore, Bank of Montreal bankers were key protagonists in the debate leading up to the establishment of Canada’s central bank, ensuring that existing institutions and systems that had served Canada well continued to do so. The Depression changed everything: pressure from both domestic and international banking circles, not a little political intrigue, outright imperialist meddling from the Bank of England, and a Royal Commission on Banking and Currency (1933) all led to the establishment of the central bank. The Bank of Canada began life as a shareholder-controlled private institution in 1935, but then in a second phase of developments, new legislation in 1936 put the Bank exclusively in the control of the Canadian government, with the Department of Finance as the sole shareholder. Bank of Montreal President Sir Charles Gordon remarked in the 1934 annual meeting, “Your bank, in common with other banks, has pledged cooperation with the Central Bank, and I think it not unreasonable to expect equal cooperation from that institution.” The appearance of the Bank of Canada represented the definitive end of an era for Canadian banking.

The notes of the Bank of Montreal and others were to be retired ten years hence, and gold holdings were similarly to be transferred to the custody of the Bank of Canada. The net effect was to lessen the earning power of the banks through circulation and the operation of interest-limitation features. The era of Bank of Montreal presidents and general managers appearing on the currency was drawing to a close. As the first deputy governor of the new bank, J.A.C. Osborne, remarked in the late 1930s, “it would only have been human … if the commercial banks did not

exactly welcome the advent of the Bank of Canada.” The Bank of Montreal had served the country as the ‘coordinator in chief ’ of the banking system – successfully – until then. Bankers in the Bank of Montreal, and in the other chartered banks, quickly adapted and, indeed, later welcomed the central bank, and worked closely during wartime and postwar reconstruction to continue to lay the proper foundations of the Canadian banking system as it grew and evolved – a typically Canadian hybrid of public policy, regulation, and private initiative.

ten Days of D ecision

59

13 NOVE M BER 1969

Mechanization in Telecom Nation

B

anking and information control-processing systems have been at the forefront of banking – from the early adoption of methods of information control into the mid-twentieth century to the emergence and diffusion of new technologies in the 1960s and subsequent decades. The relationship of contemporary banking to technological systems are so close, they are virtually indistinguishable. Technologically mediated systems have utterly transformed banking in the last generation, and are set to do so once again in the early twentyfirst century. It all seems so inevitable, does it not? Yet, in each generation, in each era, there are people with choices to make about when to change, what to transform, and how much capital to commit. Timing is an issue and failure is a possibility, especially when you are dealing with a young technology. So it was that in November 1969, the Bank of Montreal made public a massive five-year program to create a continent-wide first in a “computer-based, fingertip banking system.” The system was hailed as the “most revolutionary development in the history of Canadian banking and a world first in terms of its scope.” The object of the initiative was to covert “just about everything we do” to computer operation. The “on-line banking” – a new phrase in the parlance of the day – would be set to free branch personnel to concentrate on customer service and give the bank a capability to offer a whole new range of banking services. The plan had been in the works for at least a couple of years prior to the landmark announcement, and

60

Th e BM O Un iv er se

involved not only the Bank itself but also ibm Canada, Ltd and agt Data Systems Ltd, the country’s largest computer consulting firm, in which the Bank had owned a substantial interest. The new system would connect 1,100 branches via communications terminals linked to a large central computer – the ibm System/360 Model 65 to be located in Toronto. “mech ” as it was known would give the Bank of Montreal the largest banking terminal network in the world. The technological leap forward envisaged by the promoters of mech also looked forward to the day when it would be possible to have a “single bank concept.” As one document from the era suggested, “it will not matter whether a customer uses his home branch or one a thousand miles away. Any teller in the system would be able to cash his cheque.” As R.A. MacDougall, the leader of the project, suggested, “such a system could offer fantastic possibilities for all levels of Management throughout the Bank: by and large, this tremendous fund of information could be regarded as available simultaneously and instantaneously to all of our people.” The possibilities were, quite literally, revolutionary. The complexity and sheer magnitude of the project also stretched the capabilities of the Bank. The success of the project as it rolled out in subsequent years also ushered in a young, new cadre of Bank leaders and executives who were destined to lead the Bank to the threshold of the twenty-first century. Most of all, however, this epoch-making project allowed the Bank of Montreal to effect a technological leap forward in tackling the emerging challenges of contemporary banking. Simplicity in banking in the late twentieth century meant increased dependence on an ever-more complexity of systems to serve the customer.

4 SEPTEM BER 1984

bmo Acquires

Harris Bank, Chicago

“T

he corporate historian delving in to the archives of the Bank of Montreal a few decades from now,” suggested a particularly prescient article in the Toronto Globe and Mail in April 1984, “probably will find that 1984 was a watershed in the institution’s evolution.” The first change was the completion of the Domestic Development Program, which dramatically reorganized personal, retail, and commercial banking in the 1980s. The second epochal change came with the move to acquire Harris Bankcorp, Inc. of Chicago.

On a late summer day in 1984, the day after Labour Day, the Bank of Montreal officially acquired Harris Bankcorp, one of the great Chicago banks – established in 1907 as a bank, but with roots extending as far back as 1882. The Chicago bank became a wholly owned subsidiary of the Bank. Harris ceo Ken West (right, in photo) was a vital partner in the success of the acquisition. With the stroke of the pen of bmo chairman and chief executive officer William D. Mulholland (left, in photo), what emerged was his generation’s greatest strategic achievement. “This transaction gives Bank of Montreal a full operating capability both in Canada and the United States, a status which is probably unequalled by any other bank,” Mulholland remarked at the time. Upon his return, when Canada Customs asked him whether he had acquired anything on his trip to United States, Mulholland replied that he had indeed – a bank!

It was agreed that the Harris organization would continue to operate under its own distinguished name and solid reputations: it had assets of us $7.8 billion and was the thirty-fourth largest bank in the United States. The subsidiary Harris Trust and Savings Bank managed trust assets of us $13.9 billion, ranking seventh in the United States. The September signing had come in the wake of the approval of both boards of directors in October 1983, the approval of the shareholders in January 1984, and the approval of the United States Federal Reserve on 25 July 1984. The price tag for the Harris was us$546.7 million (though news reports suggest us$672.3 million) for 6.66 million shares. The landmark decision was destined to put the Bank on a specific historical path – into becoming a more fully North American bank. The move was also historically fitting: the Bank of Montreal was the first Canadian bank to establish operations in Chicago, opening an agency in 1861. A founding member of the Chicago Clearing House Association in 1865, the Bank was closely associated with the development of the fur and grain trades across the Great Lakes. The banking markets of the Midwestern United States would increase the scope and reach of the Bank’s operations dramatically. As Bill Mulholland told US Banker in June of that year, “Let me suggest to you a great pipe running from north to south through which flows $106 billion in trade a year, total volume and an undetermined amount of transactional items. We have a large apparatus at one end of the pipe … The economic activity between the two countries is so enormous that it is obvious logic to get yourself on both ends of the pipe.” One of the more remarkable elements of the first chapters of the bmo -Harris story was the fact that for a number of years, the Harris continued to have its own board and was managed as a self-sufficient organization. “We do not contemplate any significant changes in the Harris management structure or personnel,” Mulholland reassured at the signing. By the 1990s and 2000s, the process of becoming one bank had begun, and the emergence of a single strategy had emerged.

ten Days of D ecision

61

T 13 AUGUST 1987

The Acquisition of Nesbitt Thomson

62

Th e BM O Un iv er se

he purchase of one of Canada’s most respected investment firms in 1987 was made possible by Canadian government regulatory reforms of the same year that allowed banks to purchase investment houses. This was Canada’s response to “The Big Bang” of global financial deregulation coursing through markets and institutions in the 1980s. The purchase allowed the Bank to deliver a broad range of investment services for the first time across the massive transcontinental branch network. The deal was announced on 13 August 1987 and was to cost $290.9 million for a 75 per cent equity interest in this largest and best-performing investment firm.

Nesbitt Thomson was the product of a partnership between Arthur James Nesbitt and Peter Alfred Thomson, who launched the investment firm in Canada in 1912. The affinity with the Bank of Montreal was more than passing: each had its head offices on St James Street in Montreal. Each institution was a part of that Montreal financial capitalist class that invested in the nation-building projects of the nineteenth and twentieth centuries. The financing of hydroelectric development in particular was a dual strength and commonality. In the 1970s and 1980s, Nesbitt Thomson grew ever closer to bmo management by becoming a principal investment firm in the Bank’s affairs. As W.D. Mulholland remarked at a ceremony announcing the acquisition, “I think all of us were quite impressed with their professionalism and the quality of the advice as well as their performance. I think that was certainly a favour in our judgement that they were the firm we wanted to be associated with, if the world was going to change, so that we would be all in the same business.” The bmo –Nesbitt Thomson deal was an historic one in that it was the first of its kind between a Canadian chartered bank and a Canadian investment firm. Other mergers and acquisitions followed in the industry, but this was the first. The Bank’s large size, capital base, retail distribution network, computer systems, and global operations were nicely aligned with the brokerage’s experience and entrepreneurial skills in the securities industry. The Bank envisioned new markets, especially the personal market where investment and savings products needed a reimagining. The investment people – led by the powerful figures of Brian Steck and Brian Aune – also brought a new culture and a new way of doing things into the Bank that persists to the present day. New people, new capabilities, new markets equalled an important new day for the Bank of Montreal in August 1987. The integration of this Canadian investment institution into the Bank’s growing capabilities, strategic interests, and performance proved to be one of the key days that changed the Bank.

20 NOVEM BER 1996

Commercial Branch Licence Granted in Beijing

F

or at least a century or more, Asia has held a special place in the imagination of Canadian bankers. For Bank of Montreal bankers down the generations, the same could also be said. Beginning in 1962, the Bank had opened operations throughout the region, specifically in Japan, South Korea, Singapore, Taiwan, and Hong Kong. The great desire, and the great market, was China. The Bank’s connections with the Celestial Empire in the nineteenth century grew in tandem with the first great wave of globalization in the 1860s. An incipient global network of banking arrangements and institutions began to draw in distant parts of the globe. By the 1860s, Bank of Montreal drafts were to be honoured in India and China. The development of Vancouver as Canada’s Pacific port, with its connections to the trading empires of the Asia Pacific, provided more and more connections as the times and circumstance allowed. Relations between the contemporary Bank and the People’s Republic of China extended back to December 1960 through the financing of loans for wheat sales – a commodity that accounted for almost all of the ChinaCanada trade in the 1960s. The Bank of Montreal established a full correspondent banking relationship with the head office of the Bank of China in 1963, seven years before diplomatic relations were formally established between the two countries. The pedigree extends back yet further: an emissary of the Bank travelling in 1929 in the “Far East,” as it was then known in Western circles, first recommended that the Bank of Montreal establish itself in Shanghai. The onset of the Great Crash and Great Depression put a temporary end to those fleeting dreams.

Top Bank officials visited China in 1971 and 1975. There followed the establishment of a direct correspondent banking network with the Bank of China in most Chinese cities. In 1983, the Bank opened a representative office in Beijing – a clear runner-up to the day chosen here in terms of its significance to the contemporary and historical presence of the Bank of Montreal in China. A decade later, the Bank opened another office in Guangzhou. The Bank’s China relationships and collaboration in utilities, mining, and other sectors deepened its connection to this rising economic superpower. In 2008, bmo gained yet another licence to operate: this time in Shanghai. On 20 November 1996, the Bank announced that it received approval to open a full-service commercial branch – the first Canadian bank to be granted a full-service licence in Beijing, the first to have two branches in mainland China, and the third North American bank that was granted permission to open a branch in the capital city of China. The announcement was an important step in this long, growing, and mutually beneficial relationship. It was not the only one, before or since. In the two decades since the opening of the Beijing branch, bmo has dramatically expanded its presence in China in multi-faceted ways: through funds management, the selling of derivative instruments, foreign exchange trading through China Foreign Exchange Trade System, and the ability to offer a full range of banking services in local currency. It was the first Canadian bank to establish an investment bank representative office in China. In many cases and initiatives, bmo was either the first Canadian bank to be offered licences into new markets or the sole Canadian financial institution in those markets. In 2010, bmo ChinaCo. was established and approved to transact business in China – a major development. This gave bmo the legal capacity to operate in all the same spaces as local banks. In 2014–15, bmo also played an important role in the establishment of the renminbi (rmb ) hub in Canada.

This development would have major positive and longterm implications for trade. The success of the Bank of Montreal in China has been the work of at least three generations of leaders on both sides of the equation. Since 1960, the senior leadership of the Bank have recognized the key importance of the need for the Bank to work with China. They have made it into a multi-generational long-term commitment. For Chinese bankers, that commitment – and the deep expertise and capabilities of the Bank – have allowed the Chinese banking system to acquire capabilities and expertise while extending their global network of interests.

Matthew Barrett and former prime minister Pierre E. Trudeau at the bmo board meeting in Beijing.

ten Days of D ecision

63

3 NOVEM BER 2017

Crossing the Threshold of Centuries

T

here are obvious difficulties in writing for a day that is yet to come. On 3 November 2017, the Bank of Montreal will cross the threshold of two centuries – it is the reason for this book, the reason for the celebrations inside the Bank, and the motivation to launch a score of initiatives to mark this unique milestone in the life of an important Canadian financial institution. The day will be a day not only to look back but also to look forward to what the future holds. The

contemporary generation of bmo bankers is intensely engaged in navigating a key Canadian and global institution through what appear to be a series of fundamental technological and market transformations affecting both the wider world and specifically the financial system. Business leaders from every walk of life look to the future and see a fourth industrial revolution emerging, in the words of Klaus Schwab. That revolution promises shifts and disruptions, promise and peril. How do organizations adapt? Banking and the architecture of finance have already undergone a serious transformation in the last generation. This new wave of change brings with it a group of innovations that cross physical, digital, and biological worlds. If that future is “marked by the emergence of new business models [and] the disruption of incumbents and the reshaping of production, consumption, transportation

and delivery systems,” banking and finance are central to all these fundamental economic forces. The leaders and the people of the Bank will be looking back and looking ahead on that day. When their future selves look back on 3 November 2017, they will see what you see in this book – generations of bankers who have had to grapple with all kinds of transformations and step up to the mark that the world has created for them. In every great institution, every generation looks ahead and tries to answer the challenge of how to serve their people and their communities in light of new assumptions, new paradigms, and new tools. In this case, the Bank of Montreal has an established track record through 200 years – not a guarantee, not a roadmap, not an excuse to rest, but an inspiration.

Currenc y, C a sh, a nd Leg a l Tender

bmo ’s Richly Denominated Legacy

T

his chapter offers a fascinating look into the history of currency. The Bank of Montreal was the first Canadian bank to issue paper notes. Throughout the nineteenth century and until the end of chartered bank note currency in the early 1940s, the Bank was also the country’s most prominent issuer of notes. Featured here are, quite literally, some of the most consequential and valuable documents ever to have circulated in Canada. They would have also been the most popular, for obvious reasons! Of course, these documents had a specific job to do: currency is a medium of exchange and a store of value. That, however, is only the beginning. The rise of paper currency can tell us a lot about the history of the Bank and the financial system. The bills described here were part of the fabric of everyday life in Canada. Their images depicted personalities, landmarks, allegories, and events.

They were an artefact that was used everywhere, in the city and the countryside, by rich and poor. The bank’s notes represented a fiduciary trust and a promise to pay. The confidence on which it rested depended upon the reputational capital of the Bank and its leaders. In that way, the Bank’s performance and economic prosperity became interdependent. Think also of the Bank’s currency as a system of accountancy bound together by a huge information network that tied the Bank, its reputation, its performance, and, most importantly, its wealth to the community. The currencies you see showcased here encouraged trade and investment; they also calibrated value. Paper notes created an efficient, ordered, and understood way of exchanging. The notes were part of a larger framework of measurement, accuracy, and judgment. The

story of currency, therefore, is how trust draws together people and institutions across time and place. Currency is also an agent of change: the circulation of paper money heralded the arrival of a firmly capitalist society based on trade and exchange. What really attracts the casual observer to these currencies, however, is not what they did, but what they look like. The iconography – the visual images on the bank notes – tell historians a great deal about how previous generations saw themselves. The imagery, the personalities, the icons, the scenes – all telegraph stories about culture, identity, and aspiration. The notes themselves required not only reserves and reputation to be issued but also art, skill, and design to be produced. In addition, the images had to function as a security device in a land where one out of every two bills could be counterfeit. Technical

knowledge, security, complexity, and beauty: the imagery of the Bank’s notes had them all. Surveying this theme highlights examples not only from the Bank of Montreal’s currency but also from those banks folded into the Bank of Montreal over time.

66

Th e BM O Un iv er se

T

his extraordinary note was printed before the Bank began business on 3 November 1817. The first notes were printed in Hartford, Connecticut, where the Bank then obtained the plates, the special bank note paper, and the press required for reproducing the notes in Montreal. With this note issued in autumn of 1817, we are witness to the effective introduction of a Canadian currency and a Canadian system of banking. In this case, the $20 bill was a promise to pay the bearer, on demand, the face value of the note in gold and silver

coins. Here, the reputation of the bank as establishment and of the directors was absolutely paramount. The entire system being tested for the first time rested on a foundation of trust. This note is signed by John Gray, first president of the Bank, and R. Griffin, cashier of the Bank. The centrepiece features a scene of Montreal and its port. The circle in the lower centre features Britannia, trident in hand, the lion at her feet, and a ship on the distant sea over which she rules.

THE PROM ISE TO PAY

The $20 Bank of Montreal Note, October 1817

Cur r enc y, C a sh, a nd Leg a l Tend er

67

CURRENCY IN TURBULENT TIM ES

The $1 Bank of Montreal Note, 1835

68

Th e BM O Un iv er se

T

his note was issued on 1 January 1835 amidst slowly rising tensions in the ethnically riven, politically divided, and economically fragile colony of Lower Canada. Unusually – because of the English basis of the Bank and its directors – a French translation of the promise to pay appears here. Beyond the actual denomination, three images dominate the note. First, on the left, there is a pastoral scene entitled Lower Canada and picturing healthy cattle. At the centre, the

monarch William IV’s portrait lends royal authority to the note. Finally, on the right, a very intent St George, patron of England, slays the dragon, of which (metaphorically speaking) there were many in the colonies of British North America as reform turned into rebellion in 1837–38. The note is signed by Benjamin Holmes, cashier, and Peter McGill, president of the Bank.

T

he Bank of the People had a short but eventful life. Established in Toronto by proponents of the Reform Movement in 1835, it was purchased by the Bank of Montreal in 1840. The reason for the purchase: the Bank wanted to, but could not, expand into what is now southern Ontario because of charter restrictions. This multilingual Eight dollar/Huit Piastre bill also showed its value in pounds sterling, as imperial

currency still dominated much exchange. The amount is also expressed in German (Acht Dollar). The design is rather rudimentary, but some distinctive features emerge: the “8” embedded in an octagonal shape, as well as the Royal Crest prominently displayed in the centrepiece of the note.

TICKET TO UPPER C ANADA

The $8 Bank of the People Note, 1840

Cur r enc y, C a sh, a nd Leg a l Tend er

69

COLONIAL PROGRESS

The $3 Bank of Montreal Note, May 1844

T

his $3/15 shillings bill was issued in May 1844, a testament to the enduring nature of the dualcurrency system of British North America in the pre-Confederation period. You can begin to see the evolution of the notes, with inclusion of information about the Bank: its holdings, capitalization, and reserve, for example. The notes of the 1840s also begin to be more sophisticated, with

70

Th e BM O Un iv er se

idealized female allegorical figures gracing the numerals on the side. In the centre is a woman holding a laurel wreath representing prosperity and probity in business affairs. The images by the 1840s are becoming more intricate, and also more difficult to reproduce. The note is signed by Alexander Simpson, a popular and successful cashier of the Bank (equivalent of chief operating officer) from 1846 to 1855.

T

he Merchants Bank of Canada was established in 1864. This $10 note is from the bank’s first issue (1868–71). It was founded by the Allan family, whose most famous son was Sir Hugh Allan, the ship and railway builder. Years later (in 1922), it was acquired by the Bank of Montreal, whose interests were closely tied to the Merchants’ activities. The straightforward imagery nicely captures the Allan spirit. On the left appears the image of the captain

of a river vessel firmly in command of the destiny of the ship (Lachine Pilot). Pictured in the centre is the 355 St Jacques Street head office, built on the remains of a gunpowder depot and on part of the old wall surrounding the city of Montreal. It later became the headquarters for Nesbitt Thomson, providing another unexpected and later connection to the Bank. On the right is pictured Andrew Allan.

PILOT OF THE WAVES

The $10 Merchants Bank of Canada Note, 1871

Cur r enc y, C a sh, a nd Leg a l Tend er

71

A WESTERN HORIZONS

The $5 Bank of Montreal Note, 1895

72

Th e BM O Un iv er se

s the century drew to a close, currency notes became more sophisticated, more complex in their weave and design, and thus more secure. By this time, the Bank of Montreal had long established its leadership in Canadian banking, with a paid-up capital of $12 million. The figures in the forefront of this 1895 bill are Sir Edward Clouston, general manager, and Donald Smith, later Lord Strathcona. Pictured in the middle of the bill is the coat of arms of the Bank with two First Nations warriors supporting the shield. The beaver on the top of the coat of arms (in the parlance of heraldry, “ensigned upon a log proper”) recalls the past: the fur

trade and the industriousness and thrift of the previous generations. The reverse of the note depicts the Bank’s majestic new office in Toronto, Toronto Main Branch, located at the corner of Front and Yonge streets (1885). The expansion of Toronto, its remarkable economic growth and its rise to prominence, is nicely captured in the decision to feature the Bank’s Toronto branch on the Bank of Montreal $5 note. Today, the building is, famously, Canada’s Hockey Hall of Fame. The building itself is a Toronto rococo-inspired masterpiece envisioned by the Toronto architects Darling and Curry and executed in part by sculptors Holbrook and Mollington. The Bank’s projection of its power and influence in Toronto was unmistakeable: Ohio stone; Corinthian design, with the pilasters inside mythical figures decorating representing Commerce, Music, Architecture, Agriculture, Industry, Science, Literature and the Arts. This was no ordinary five-dollar note!

BANKING ASCENDANCY

The $50 Bank of Montreal Note, 1903

T

his marvelous outsized $50 bill is a beautiful example of the currency engraver’s craft, with Lord Strathcona (Donald Smith) and Sir George Drummond guaranteeing the value of this large-denomination note. The front is black with tints of blue, rose, and gold, while the reverse is black with brown tint. This particular bill was countersigned by James Aird, a career Bank of Montreal manager and, from 1896, the secretary of the Bank. All bills over $50 had to be countersigned by a competent authority. The reverse features images of both the Montreal and Toronto main branches of the Bank. The bill was designed and executed by Waterlow & Sons Limited, London Wall, London, one of the great engravers of currency, stamps, and monetary instruments in the world. Here again, the prestige of the Bank is on full display as its reach spans the principal Canadian centres of commerce. Its imagery also recalls the imperial connection through both Strathcona (who was living in London at that time as Canadian High Commissioner) and the bank note pedigree.

Cur r enc y, C a sh, a nd Leg a l Tend er

73

BARLEY AND BANKING

The $6 and $7 Molsons Bank Notes, 1871

T

he Molsons Bank came into the Bank of Montreal orbit in 1925. The Molson family, however, had a long and illustrious connection to the Bank. When the family decided to strike out into the banking field on their own in 1853, it prospered, focusing mainly on the agricultural community and especially on grain. The Molson brewery, of course, had a more than passing interest in the grain harvest as a key ingredient of its success. The $6 and $7 bank notes are strange artefacts in Canadian banking history. Only one other bank ever

74

Th e BM O Un iv er se

issued $6 bills (La Banque Nationale). Molsons had the distinction of being the only one to issue the $7 bank note; the first were issued in 1871. The question is why those specific denominations? Bearing in mind that, after Confederation, banks were only allowed to issue notes above $4 in value, one explanation offered in the literature is that these allowed the Molsons Bank to increase the circulation of its notes. The more circulation: the more “interest-free deposits” a bank could enjoy. Molsons Bank did not have the size or capacity to use other methods to boost circulation

The notes feature Thomas Molson, cashier, on the left and William Molson, president, on the right. The $6 bill features two beavers building a dam, while the $7 note renders the same idea of the nobility of labour, only with farmers. The reverse features latheworks, counters, and the bank name.

T

he story of banking in the Dominion of Newfoundland in the late nineteenth century and early twentieth is a troubled one. The precarious nature of the staples-led export economy made for a boom-and-bust cycle on the island. As historian of Newfoundland Peter F. Neary memorably put it, “Individually, many Newfoundlanders were skilled and seasoned survivors, but as a people they depended on a precarious export trade, with a narrow range of goods produced in the country’s basic and interconnected industries of fishing, forestry, and mining.” Little cash

changed hands, individual and government debt was high, and the Newfoundland and Labrador economy depended heavily on international markets. The Bank of Montreal became the Newfoundland government`s banker in 1898, four years after a banking collapse. For the first time, Canadian notes could be used in the country. The note featured here is a government-issue 80-cent note, but pay attention to where it is paid: at the Bank of Montreal in St John’s. The Bank`s close involvement with Newfoundland continued and intensified in the decades following.

HARD SCR ABBLE

Dominion of Newfoundland Cash Note, 1902

Cur r enc y, C a sh, a nd Leg a l Tend er

75

ONE L AST NOTE

The $5 Bank of Montreal Note, 1942

O

n 7 December 1942, the last Bank of Montreal note went into circulation, with General Manager B.C. Gardner and President George W. Spinney at their posts on either side of the money. They seem to summon all the gravitas they could command for the moment.

76

Th e BM O Un iv er se

The establishment of the Bank of Canada in 1935 as the country’s central bank had set in motion a series of major changes to the Canadian banking system. A new central reserve bank came with the exclusive right to issue currency against the credit of the Dominion of Canada. The banks did not relent without a fight. But once the decision was made, the Bank of Montreal and its fellow chartered banks made the new system work to face the challenges of wartime emergency and postwar reconstruction. The chartered banks were given ten years to retire their circulation to 25 per cent of their paid-up capital.

New Bank of Canada notes would slowly but surely replace the various bank notes and the old Dominion notes. Further changes to banking legislation ensured that what the professionals call ‘an irredeemable government paper currency’ was complete. Canadians would become accustomed to the image of Queen Elizabeth II ($1 and $20 notes), Sir Wilfrid Laurier ($5), Sir John A. Macdonald ($10), William Lyon Mackenzie King ($50), and, if they were lucky, Sir Robert L. Borden ($100).

Fin a nci a l Innovations a nd Fir sts

T

here are key moments, key innovations in the history of Canadian banking where an innovation has led to a game change. This chapter examines eight such innovations that have changed the face of Canadian banking. Financial innovation can embrace a number of fields. It can focus on banking practices or on credit and lending. It can also embrace concepts such as the arrival of ‘scientific management’ and systematic analysis of financial data in the 1920s, risk analysis and management, and so forth. In

fact, the Bank of Montreal, like most of the major banks of the world, was continuously innovating in one form or another throughout its lifetime in these areas. Here, we take a slightly different approach by examining the much broader trends and innovations that have influenced the business of banking at the Bank of Montreal. The areas of governance, currency, consumer credit, and large technological innovations are featured. Naturally, these eight entries just scratch the surface, but they do

shine a light on the diversity of the sources of innovation in banking and financial institutions. We normally think of innovation as principally technological, yet some of the changes come in structures, or ideas, or new ways of thinking. These innovations have been chosen because of their effects on the way Bank of Montreal bankers and their colleagues in other institutions went about the business of banking, how they adapted to change, and how they evolved to serve nations, markets, and customers.

INNOVATION IN LEGISL ATION

The Bank Act, 1871

T

he Bank Act of 1871 was the first comprehensive legislation passed by the new Dominion of Canada. It set out the organization of the Canadian banking system. The struggle over that legislation – over the questions of currency, gold reserves, and note issue – resulted in a protracted, acrimonious, and at times vicious struggle for advantage in parliamentary

committees between rival banking interests. Original proposals for Canadian banking had, among other things, suggested the establishment of a system of twotiered banks: local banks that would not be allowed to have branches and that would service the immediate community; and the big banks (such as the Bank of Montreal) that would take care of foreign trade and mercantile interests. The struggle over the elasticity and adequacy of the money supply was a particularly sensitive issue in Ontario, and especially among farmers who needed cyclical access to cash around harvest time. When the dust settled, the rules of the game for Canadian banking were set, to be revised every decade according to emerging financial and monetary conditions. The legislation covered the ability for the chartered banks to have a widespread system of branches, to double liability of shareholders, and to issue notes. The need to keep a certain amount in reserves, the lack of a central reserve bank, a prohibition against owning real estate as an investment, the monopoly of government currency for values under $4, and a whole host of other rules and regulations would fence-and-post Canadian banking, giving it its unique character and configuration in banking in the North Atlantic World. The leaders of the Bank of Montreal in the 1860s, like those in every other banking interest in the country, fought hard to shape the system to their bank’s advantage and vision. The Bank Act of 1871, however, was a compromise that set the stage for the successful development of Canadian banking and currency, and gave the public an instrument – Parliament – through which to express the public interest in banking. In many ways, it allowed Canadian banking to adapt itself to the widespread enterprises that banks were organized to serve. Adaptation of banking practice “to the special requirements of Canada” was the Bank Act’s greatest service.

Fin a nci a l Innovations a nd Fir sts

79

INNOVATION IN CURRENCY

The Evolution of the Dollar, 1817–1934

T

he Canadian currency passed through a steady evolution since the establishment of the Bank of Montreal in 1817. The Bank itself, of course, had its own currency, as did other banks, alongside the British

pound sterling and a bewildering array of monetary instruments across North America. Governments also had the right to issue currency in certain lower-value denominations. The question of currency in Canada occupied bankers and legislators consistently from the 1820s to the 1860s. Colonial Canadians periodically debated the most effective way to handle concerns about banking and currency. Questions of money supply and the expansion and contraction of credit, circulation of note issues, and, in general, the control of credit were uppermost in the minds of the currency debaters. For Bank of Montreal bankers, the services that they rendered to the community were dependent on the

stability of the institution, and so a careful approach to monetary and currency policy was typically taken. In 1857, Canada passed legislation requiring that accounts to the provincial government be rendered in dollars and cents – much to the disappointment of imperial authorities, who believed that the Canadians ought to have adopted the pound sterling. With Canada’s first Bank Act in 1871, the new Dominion of Canada moved to a more systematic approach to currency questions, leaving the Canadian chartered banks to issue note circulation above $4, while the Dominion of Canada would circulate the more popular smaller denominations.

INNOVATION IN SYSTE M ARCHITECTURE

The Creation of Canada’s Central Bank, 1935

T

he establishment of the Bank of Canada as the country’s central bank in 1935 was the most important development in Canadian banking in the twentieth century. The establishment of the Bank of Canada came decades, and in some cases centuries, after every major nation in the North Atlantic world had established theirs. However, the absence of a central bank did not prevent Canada from establishing a strong, stable, and successful banking system of chartered banks, maintaining price stability, and avoiding systemic failures. Canada’s senior bank, the Bank of Montreal, acted as government banker and the Canadian Treasury acted as lender of last resort, while the Canadian Bankers

Association (cba ) acted as a coordinating body for the banks alongside the Canadian Department of Finance. The Depression changed everything. Between 1932 and 1936, the idea of establishing a central bank gathered momentum both domestically in political circles and internationally through such gatherings as the International Financial Conference (Brussels, 1932) and the World Monetary and Economic Conference (London, 1933). Canada’s effective decision to move off the gold standard in 1928 was another mitigating factor. In 1933, the Royal Commission on Banking and Currency formally recommended the establishment of a central bank. From there, the Government of Canada drafted legislation, and a central bank was established in 1935 as a shareholder-controlled privately owned institution. In 1936, a second phase of legislation put the Bank of Canada exclusively in the control of the

Canadian government, with the Finance Department as the sole shareholder. Those tumultuous events ended a major era for Canadian banks, and especially the Bank of Montreal, since it was such a prominent part of Canadian government banking. It also began a new era for the chartered banks. The right of chartered banks to issue or reissue their own notes expired on 1 January 1945, leaving the Bank of Canada with sole authority to issue notes. These developments were, in the long run, extremely positive both for the financial system of the country and for the banks themselves, who could then turn to new pursuits and markets. The Bank of Montreal and its counterparts had built a strong Canadian banking system that would be able to make room for public participation through the instrument of the Bank of Canada.

Fin a nci a l Innovations a nd Fir sts

81

INNOVATION IN CREDIT

MasterCard

I

n the late 1960s and early 1970s, Canada was one of the key world markets for the “Interbank Card System” or the charge card system. The only major international bank card system in Canada by the early 1970s was Bankamericard, which was known as “Chargex” to Canadians. It was established in August 1968 and

had 3.2 million cardholders and 50,000 participating merchants in the country. The Bank of Montreal joined the Interbank Card under the name of Master Charge. Together with the Provincial Bank (later National Bank), it entered the credit card market, frankly, belatedly, since the 240,000 Bank of Montreal customers in 1970 who held Chargex cards were clearly telling the Bank their intentions to move into this channel of consumer credit. Once the decision was taken to proceed, the Bank mobilized its considerable technological resources to pilot, test, and introduce Master Charge to Bank of Montreal customers.

In March 1973, Chairman Fred McNeil announced that the Bank of Montreal and the Provincial Bank had chosen Master Charge as their preferred credit card. The Bank opted for Master Charge not least because it was the world’s best-known and accepted all-purpose bank charge card at the time. The revolution in credit was joined in earnest. In 1977, Canadians held 8.2 million credit cards that were used at 27,150 different merchant terminals across the country. They spent $3.1 billion on credit annually. By 2014, Canadians possessed 72 million cards used at 1.4 million merchant terminals for a total of $369 billion spent annually on credit.

INNOVATION IN MOBILIT Y

Instabank/Multi-Branch Banking, 1979

P

resident W.D. Mulholland, addressing the Bank’s annual meeting in 1979, called Multi-Branch Banking “one of the most exciting developments” of the year. “For the first time, any customer of the Bank of Montreal will be able to go into any on-line branch in Canada, make deposits and withdrawals and obtain the balance in his account just as if he were in his own branch.” He added later, “Need I add that this service is not available at other chartered banks.” The introduction of Multi-Branch Banking (mbb ) in 1979 was a major advancement in customer service and convenience. The system used the network that linked on-line branches. It made it possible for customers to conduct personal banking transactions at any of the mechanized branches as if they were dealing with their home branch. Here again, the Bank of Montreal was first to the frontier, leveraging its technological investments to usher in new possibilities for the customer. mbb was also a precursor to the vast expansion in access and convenience to come in the 1980s. Personal account customers at mbb branches have access to their accounts at any other mbb branch. The concept is routine today, but the ability of customers to perform deposits, withdrawals, fund transfers, and passbook updates and procure account information outside of their home branch represented a significant advancement in customer convenience.

Fin a nci a l Innovations a nd Fir sts

83

NET WORK INNOVATION

National Computer Network, 1980

B

y the mid-1970s, some basic decisions had to be taken about the future of the increasingly complex technological data processing systems in the Bank. At the same time, the Bank was taking its first major steps toward the basic realignment of its banking functions. The objectives were clear: the adoption of a structure that would mirror the market and create an organizational environment conducive to the professional development of banking officers. Accordingly, the Corporate Banking Group was established, complete with specialized financing capabilities, especially in world-scale project loans and large internationally syndicated loans. The Domestic Banking Group also reordered its resources. Treasury-related activities were also put on a new foundation. The most urgent question in the technological realm was: convergence or divergence – in other words, whether to move toward integrated worldwide systems or distributed systems. The Bank chose the former path. Years of intensive research and development had given the Bank a unique data processing plant “of a sophistication and size unsurpassed in the North American financial service industry,” remarked W.D. Mulholland in 1981. The centralized database located at the Scarborough and Willowdale computer centres in Toronto were equipped with the fastest commercial computers available at that time. They stored 6 million accounts and had a storage capacity of 280 billion characters. The Bank of Montreal databases were linked by 150,000 miles of telecom lines connecting eight regional data centres and 5,000 branch terminals, automated teller machines, and customer terminals.

84

Th e BM O Un iv er se

In 1981, for example, the data centres were processing over 3 million transactions annually – and, crucially, the entire Bank network was ‘on line’ and operated in real time. Any kind of transaction could be processed instantaneously anywhere a terminal was located. Acquiring this capability was a major milestone in the technological history of the Bank for a few reasons. It empowered the Bank to take full advantage of available technological transformation. It positioned, and kept, the Bank well ahead of the demands upon it from the expanding array of computerized, connected financial services. In other words, the basic system put in place in the early 1980s prepared the Bank for what was coming next. In Mulholland’s prophetic words of 1981, the technological systems of the Bank provided it “with the means to provide service in real time not only beyond the confines of conventional ‘bricks and mortar’ branches, but also beyond the constraints of time, of geography and of currency.” The Bank’s leaders were among the first to see the implications of the borderless nature of the movement of technology, information, and capital.

INNOVATION IN C APITAL AND CONVENIENCE, 1985

I

n the mid-1980s, advances in information technology were enabling exponential growth in the network. In the process, a whole new world of customer convenience and access was unleashed. Instabank was the Bank’s own network. circuit was a Canadian network set up by the Bank and had the distinction of being the first nationwide shared network in the country. The Bank of Montreal was the first Canadian bank to link its abm s to it, and become part-owner of the largest US abm network, cirrus . That network linked automated banking machines in North America, and increasingly around the world – in the mid-1980s, over 11,000 machines. In 1985, the Bank of Montreal became a founding member of Interac, Canada’s shared network linking banking machines across institutions and platforms. The new network suddenly had 3,000 abm s coast-to-coast to allow customers convenient access to their funds. For the first time, customers would be able to access their cash from bank machines around the globe. The electronic payments system that underpinned this emerging network architecture in Canada was the subject of lengthy discussions and negotiations to ensure the orderly development of the system in the country. These networks eventually expanded to include electronic funds transfer at the point of sale – a concept piloted by the Bank in Calgary in October 1989 that allowed Bank of Montreal customers with a “FirstBank” card to purchase goods and services at Calgary-area retail outlets. The instantaneous access to funds and the revolution in convenience offered by cashless transactions depended on the vast, complex networked technological systems that were built in the 1980s. Technological systems, however, are only one part of the equation. Every step of the way, executives had to make choices about how to deploy the technology, its best uses, and how it could allow the Bank to serve the customer.

DAWN OF THE NET

Online Everything, 1995

T

he invention of the World Wide Web by Sir Tim Berners-Lee in the early 1990s and the subsequent development of technologies based on Internet protocol platforms constituted a deep, lasting, and long-wave revolution in information and communication technologies. The advent of the Internet, of course, rested on the technological systems of a generation. In the two decades since its introduction, it has led to a fundamental transformation in how we handle information, buy and sell goods, and interact as individuals, communities, and institutions. The Bank of Montreal was quick to seize the opportunities offered by the dawn of the Net. The year 1995 was the inflection point. The Bank’s first website was launched in January 1995, offering basic information on the Bank and its rates. By 1996, President and coo Tony Comper was talking about 1996 being the “Digital Autumn” – “a time in our history when we are taking one of those critical quantum leaps.” Comper talked about setting the course for the digital future – which included branchless banking, banking by personal computer, and online banking. Here again, the Bank was first to the frontier with the introduction of a virtual banking service, and looking forward to “entering the age of digital banking – of utterly customer-driven, anywhere-anyhow-anytime banking.” The key pillars would include the overall customer experience, satisfaction, ease of use, and privacy and security. The Bank’s most spectacular technological move of the 1990s was to offer full-service banking on the Internet – mbanx – in October 1996. “mbanx is neither a new product nor a new add-on deliver channel,” the Bank announced on 16 October, “but an entirely new virtual banking enterprise designed to meet the needs and realities of time-pressed, financially

86

Th e BM O Un iv er se

active consumers.” It was a bold move, and a visionary one – an Internet-only bank to be headed by Jeffrey S. Chisholm, a bmo senior executive. The concept was a first for North America, let alone Canada. In one stroke it eliminated considerations of geography, time, and territory in banking. The concept was probably before its time, and so suffered the fate of such enterprises. However, mbanx showed that the Bank of Montreal understood the potential of the Internet, and sought to transform the technology to serve the customer. It also showed that the Bank was not afraid to take a risk in pushing the boundaries of the possible in banking. As Canadians and the millions of bmo customers gained access to the Internet, the Bank broadened its offerings, including expansion of online access to applications, accounts, and the whole range of banking

activities. The story ever since has been to continuously upgrade technologies across all banking platforms to offer superior levels of customer experience with access to transactions, financial planning, and expertise. Today, technological transformation in financial services has reached another inflection point as the Bank continues its tradition of building a technological architecture that is competitive and constantly strives to reimagine the customer experience. The dramatic extension of bmo ’s technology capabilities opens up new possibilities for greater speed, lower cost, enhanced risk management, and greater productivity – just as past transformations have done. In other words, by seizing the technological possibilities of a digital future, the contemporary Bank is continuing its legacy of adaptation and leadership.

Speed, Dista nce, Access

bmo ’s First-to-Market Technologies

T

his chapter examines bank technologies from a different perspective. Instead of a look at the range of technologies involved in banking over 200 years, I have selected a few of the technologies that the Bank of Montreal implemented first. For the Bank, being ‘first’ to do something, try something, offer something, or implement something has acquired a special importance down the years. So, too, with technology. Perhaps it is due to the Bank’s permanent status as the first Canadian bank. There is a certain pride for Bank of Montreal bankers to be first. Just in the period since the Second World War, the Bank has been first in a number of innovations in customer service and technology: first drive-in bank (1950), first after-hours depository (1954), first Bancardchek (1967), first to offer equipment leasing applications in its branches (1973), multi-branch banking

(1979), first to offer farm creditor insurance (1980), first to offer telephone banking (1982), first to offer automatic overdraft protection (1983), first premium credit card (Gold MasterCard, 1984), first transborder electronic funds transfer (1985), Electronic Data Interchange (1991), first bank to establish a web presence (1995), first full-service Internet banking with mbanx (1996), first to offer online mortgage adjudication (1997), first in North American wireless banking (1999), first to offer full-service online brokerage (2000), first to offer online fixed-income trading (2001), first Canadian bank to provide banking services in renminbi in Beijing (2006), first bank to offer a registered disability savings plan (2008), first bank to offer a World Elite MasterCard (2010). Twenty-first-century banking is a highly technologized business. Automated teller machines, Internet, and mobile banking are only the

beginning. The office environment is also highly technologized and interconnected. The ability to process and coordinate millions of financial transactions per second across vast territories, markets, and populations has become routine. Both information flows and capital flows have reached dizzying velocities in the contemporary world. Customers banking today have an astounding array of technologies available to them to access and manage their funds. Bank of Montreal has unprecedented technological power at its fingertips to serve the increasingly complex demands of those customers. In the trading world, the astonishing intricacy of that field stems partially at least from the magnitude of the information and communications technology and algorithms that support the business today. One glance at the long line of obsolete (but still remarkably functional) machines in a special

section of the Bank of Montreal Corporate Archives gives testament to the vital role that technology has played in the emergence of banking – and its extension and diffusion. Some are tabulation machines, others count bills, while yet others store or begin to process information. From the earliest days, technology has been entrenched in the activities of Bank of Montreal bankers. Banking is an information-intensive industry – it collects, stores, and processes massive amounts of data. By the dawn of the twentieth century, the Bank of Montreal and other banks began to turn toward the deployment and mechanization of their operations, especially if they were expanding. In fact, banks have been places where significant technological change has taken place. Wave after wave of new technology has allowed the Bank to adapt to change, to expand what it does, and to find ways of doing its work faster, more securely, and more efficiently. For much of the nineteenth century, the ‘technology’ that underpinned all banks was a system of control and coordination that reigned over the organization from the head office through to the retail branches and agencies. An elaborate system of clear, detailed, and highly specified routines, rules, regulations, inspection and audit policies and procedures, as well as the assignment of leadership responsibilities across the network. Rapid access to accurate, up-to-date data was and continues to be essential to the management of the bank. The ledgers acted as the great Victorian databases of banking. By the twentieth century, new technologies changed the face of banking – telephones, typewriters, and a range of information and control

88

Th e BM O Un iv er se

processing technologies from counting to mail handling. The adding machine (1901) was a prominent addition to the world of banking. Accounting machines followed, including ledger posting machines. Later in the century, electromechanical machine technology allowed more centralized ledgers and registers to be kept. The emergence and popularity of cheques promoted further technological changes in banking with the cheque-reading machines. By the 1950s and 1960s, electronic recording machine accounting was being rolled out to record bookkeeping functions. Similar waves of transformation in the 1970s and 1980s began to integrate automatic teller machines and a variety of other expanded services based on information and communication technology, and computer technology began to take centre stage with the advent of Internet-platform-based technologies. The Bank of Montreal has engaged with innovation in every major technological wave in banking. The speed of implementation always depended on many factors – resources, availability, policy, strategy. But constant throughout each era of the Bank’s operation is its understanding that, most importantly, information systems and technological innovations had to be focused on providing operational excellence, administrative precision, and, most of all, a superior customer experience. The half-dozen technological innovations highlighted here are in no way a comprehensive list of technologies. Rather, they represent technologies and innovations introduced first by the Bank – some are famous; some are lesser known outside the Bank. They all, however, made their mark one way or another in the technological transformation

of the Bank. The importance of technology in finance is tellingly evident in this book: you will find technological advancements showing up in other chapters as well.

The Telegraph, 1847

T

he telegraph was the first of the electrical technologies destined to have a significant and complex impact on the business of banking. The Bank’s early investment in the Magnetic Telegraph Company – engaged in building the first telegraph line in the summer of 1847 – consisted of a £2,000 loan secured by the notes of individual directors. As businessmen who understood the implications of the telegraph for control and coordination in banking, branches, and administration, the promotion of the telegraph was understandable. The direct impact of the telegraph on the operations of the Bank of Montreal was dramatic over time. As the

reach of the telegraph expanded, so did the reach of the Bank’s head office. This effectively meant the extension of progressively greater control over branches and the network flows of capital. Importantly, it also facilitated the more direct sharing of banking expertise and the proper execution of strategy. In practical terms, the reduction, or in some cases elimination, of the time lag allowed a more nimble approach to executing buying and selling. There were a few elements at play in the introduction of the telegraph. With Montreal being the de facto Canadian financial capital, its businessmen would naturally want to promote the new technology and make the city a central hub in the incipient network. The unmistakable leader in this enterprise was Hugh Allan, whose telegraph business was part of a developing commercial and industrial empire that embraced steamship, rail, and now telegraphic communication.

(Telephone communication would come later.) By 1850, Montreal Telegraph laid down and operated 500 miles of line throughout the United Province of Canada. By 1860, and under the presidency of Sir Hugh Allan, Montreal Telegraph managed to build a 1,865-mile network of telegraph lines across the southern portions of Canada and some lines connecting into the United States. By 1870, Montreal Telegraph was able to operate almost 12,450 miles of line. Montreal’s supremacy in the telegraph business was assured through the Montreal Telegraph Company’s acquisitions of smaller networks – Toronto, Hamilton & Niagara ElectroMagnetic Telegraph; Montreal and Troy, Vermont, and Boston; and Prescott-Bytown. In 1855, the company also ran the telegraph facilities of the Grand Trunk. The telegraph, therefore, was not just a communications tool but also a key strategic resource in the battle for position between cities and rival interests.

T THE BANK’S ELECTRONIC BR AIN

Semi-Electronic Bookkeeping, 1958

90

Th e BM O Un iv er se

echnological advancements come in various guises and speeds. We focus on the revolutions, but it’s the less-talked-about, incremental shifts – hidden in the back office – that often deserve more attention. In 1958–59, the Bank introduced National Cash Register’s “Post-Tronic” posting machines, putting it in the lead among Canadian banks in the field. It was the first bank in Canada to introduce the technology, and first in the various cities where it deployed the technology in 1959 – Montreal, Toronto, and Calgary. The Montreal installation was not only the first but also the largest such installation in the field of Canadian banking at the time. The machines enabled the Bank to provide faster and more efficient service in posting current-account cheques and deposits. It allowed a “neat and uniform statement” for the customer. The key benefit was the savings in time – posting and checking operations would take less than half the time needed under former methods. The new technology greatly reduced the possibility of human error because of built-in redundancies and fail-safes in the design of the technology. The account numbers and balances were stored electronically on magnetized “memory strips” on the back of the ledger-statement sheets. The contemporary reader may look at this relatively modest advance in bookkeeping and, with the condescension of posterity, gloss over this all-but-forgotten advance. But this innovation, like a few others in this chapter, was part of a process of continuous search, adaptation, and improvement of the key technological systems of the Bank. Technology and operations people in today’s Bank would understand acutely the step-bystep process – the small victories – that allow the Bank to maximize its technological systems to facilitate the work of Bank employees and allow them to focus on the customer.

genie Unleashed, 1963

O

n Canada Day 1963, the Bank breathlessly announced its first fully integrated automatic banking system – and the first one of its kind in Canada. Making “full use of electronic speeds,” the country’s first data processing banking operation combined cheque clearing and ledger posting for many of the Bank’s Montreal-area branches. The heart of genie was the ibm 1419 magnetic character sorter, which was capable of sorting more than 1,600 cheques a minute – an astounding increase from manual methods. The utilization of Magnetic Ink Character Recognition (micr ) numerals (the numbers at the bottom of cheques) was the heart of the system’s machine-reading capabilities. The control panel of the central processing unit of the computer at the genie centre contained electronic circuitry capable of posting 3,000 banking transactions per minute. For the first time, the records of 25,000 individual bank accounts could be kept on a single reel of magnetic tape. The genie centre itself recorded the details of 1.5 million separate accounts by that method. In announcing the “revolutionary system,” VicePresident and General Manager R.D. Mulholland (no relation to W.D. Mulholland) said that the centre was named for the “magical hero of the Arabian nights story of Aladdin and his lamp.” genie stood for GENerating Information Electronically. More to the point, the system would provide faster and more efficient service, enabling the bank to keep current with greater demands for service. “It is not surprising,” one newspaper review suggested, “that the Bank of Montreal has taken the initiative to become the first Canadian bank to provide a fully integrated data processing operation:” the Bank, by 1963, had over 900 branches, 16,000 employees, and 3 million customers. The Bank also had offices in the United States, Great Britain, continental Europe,

and Japan. To keep track of its expansion and serve customers would require close attention to technological innovation. A team of programmers, recruited from within the Bank and trained by the equipment manufacturers, spent eight months writing programs for the launch. Management consultants Booz Allen & Hamilton also assisted the Bank in coaxing genie out of its technological bottle. The Bank was confident, in the words of one report, “that ‘Genie,’ the genial wonder-working giant, will help

to lighten the burden of paperwork that was threatening to engulf it … assuring its customers of faster and more efficient service than ever before.” With genie , the Bank had firmly crossed the threshold into the electronic age, helping to provide Canadians with some of the best systems in the world for handling payments.

Speed, D ista nce, Access

91

Electronic Data Interchange, 1989

I

n September 1989, the Bank of Montreal was the first bank to install the first automated ordering process, along with Telecom Canada. Electronic Data Interchange (edi ) involved computer-to-computer electronic exchange of business documents such as purchase orders, invoices, and payments between two businesses in a public standard or Open Systems Interconnect format. edi targeted the accuracy, efficiency, and timeliness of the 25,000 purchase orders that the Bank issued every year – kind of like a backbone to the delivery of electronic banking services to retail and corporate customers. edi was a response to a range of information management challenges. In other words, here again, technological change was resulting in the elimination of a ton of paperwork. By the 1990s, the Bank of Montreal had become a recognized leader in electronic banking, including edi in the financial community in Canada. It had taken a proactive role in the development, implementation, and evolution of Canada’s financial edi within the Canadian payments system. That leadership extended to cross-border trades. Indeed, Harris Bank in the 1990s was also ranked among the top 10 Financial edi banks in the United States. The fact is that each of these step changes in the evolution of technology in banking took major financial investments in order to make the Bank of Montreal first in the field, and to help sustain its competitive advantage. Like most of its predecessors in this chapter, edi as a technological tool offered a greater strategic control over the vast pipeline of information coursing through the Bank. As one executive put it in relation to edi, it was not so much the technology deployed as the

92

Th e BM O Un iv er se

strategic direction of the corporation. “Decision-makers must look beyond the focus on systems applications and integrations to keep the key strategy and business process in the forefront.” The Bank’s investment in electronic commerce came at a time when corporate managers across the economic landscape saw electronic commerce as a short-term technological fix and not a long-term strategic tool. As the technology became more and more used – and in many quarters, a requirement for doing business with the larger enterprises in the 1990s – the Bank’s first-mover advantage, with its strong grasp and deep experience with edi , conferred a major competitive advantage in the field. As one executive suggested in the mid-1990s, “We’ve probably been one of the leading banks in setting the rules for edi … and if you’re driving, you get the route you want.” Consistently striving to match new technologies with its own and its customers’ evolving and anticipated needs put the Bank in the driver’s seat.

Magnetic Ink Character Recognition and Automated Banking, 1963

M

agnetic Ink Character Recognition (micr ) was a close relative of the genie innovation of the 1960s. “In selecting micr ,” one customer pamphlet suggested, “Canadian, British and United States banks considered many different systems. Major factors in the decision were that micr figures are not only “machine

language.” They’re “people language, too.” micr focused on automated banking of cheques. Encoded cheques would prepare them for fully automated processing, “forerunners of a new era of ‘increased service’ banking for customers of Canada’s First Bank.” With manual methods, cheques needed to pass through twelve to fifteen different pairs of hands, introducing the possibility of error at each stage. This innovation promised a “new high standard of neatness and accuracy in your statements from now on … and furthermore, introduction of these new methods will enable us to keep service charges at minimum levels.” The use of electronic data processing wasn’t just about the efficiency of handling an increasing number

of vouchers; it was also “most advantageous in promoting a firm’s Corporate Image,” suggested one report in 1964. “To date we have obtained excellent publicity … and our competitors are endeavouring to overcome our initial advantage in this field.” The Bank of Montreal still held the advantage, however, since the bank had the most completely integrated system in the electronic data processing field at the present time.” The arrival of several technologies related to automation in banking seemed to have launched a new front in the competition between Canadian banks. The central role of new technologies would ensure that the rivalry would continue into the next generation.

Speed, D ista nce, Access

93

Mobile Banking, 1999

T

he Bank introduced mobile banking in the spring of 1999. bmo customers would be able to move money, check credit card balances, trade stocks, and more through mobile banking. The Bank’s Emfisys Group and 724 Solutions Inc., a software firm, combined forces to offer mobile banking and brokerage to the Bank’s customers. Mobile banking came on the heels of the Internet, which in itself had profoundly affected the way banks reached their customers. The

94

Th e BM O Un iv er se

innovation here was to perceive the combination of wireless and Internet for banking. Work on the concept began in the summer of 1997 and rolled out eighteen months later. Veev was launched in May 1999 and became the first wireless financial services package in North America. The nature, complexity, and pace of technological change by the 1990s had changed significantly. Some of the entries in this chapter were implemented in a more stable, symmetrical environment. By contrast, mobile banking was introduced amidst a classic “gale of creative destruction” represented by the arrival

of the technologies based on Internet protocol. The implementation had to be much more nimble. The rationale was also partly defensive. “Even if it doesn’t generate revenues in the near term, there’s no question that someone else will get into the mobile e-banking and e-brokerage business if we don’t,” suggested Frank Techar, a senior vice-president who was coordinating the project’s business implementation strategy for mobile banking. Techar perceived correctly the overwhelming challenge of technological disruption in financial services: that in the long run, these technologies had the potential to completely transform the entire banking sector and upend established players. Being first to market with an important new technology was a way to combine the transformative power of a new technology with the depth of experience, insight, and professionalism of an adaptive, established player in the field. As senior technology executive Lloyd Darlington suggested to a British audience in 2000, “we have learned the critical importance of moving early and moving fast … We believe … that we were justified in assuming the risks and the aggravation that inevitably come with being first in any market. We have gained a leadership position, experience in a field where experience is scarce, a much deeper understanding of the technology and the market, and growing recognition.” The Bank of Montreal, therefore, could lay claim to at least two North American firsts: the first commercial launch of financial services over a browser-enabled mobile device; and the first multi-device, multi-line of business mobile channel. It later added real-time trading through InvestorLine and the rollout of Harris Bank’s own mobile banking offering in 1999. Those remarks could very well capture the Bank’s entire experience with its leadership in technological innovation: move early, move fast, assume the risk, establish leadership. Of course, no institution can do it every time, but the Bank of Montreal has had a firstclass track record in the field.

A Sense of Pl ace

A National Architectural Legacy

T

he relationship between banking and the evolution of the country’s architecture is a strong and enduring one. Banking halls and branches represent an important element in the contemporary history of architecture. In its main territories – Canada and the US Midwest – the buildings, branches, and agencies connected to the Bank of Montreal have made a continuous, sometimes transformational, and always evolving imprint on the urban landscape. The reasons are not hard to discern, with the Bank’s importance to the economic activity of cities, regions, and nations being perhaps the most important. In the metropolitan landscape, financial districts teem with glassand-steel manifestations of capital. The noble structures of nineteenth- and twentieth-century banking have anchored numerous city centres across the country. Banks also act as important providers of jobs. As people moved to suburbs and

urban areas expanded outward, Bank of Montreal branches followed their customers by establishing their presence in shopping centre malls and along new thoroughfares. In the twenty-first century, new waves of transformation are taking place, driven by technology and inspired by the constantly evolving understanding of the needs of the client. Bank architecture has also made its mark on smaller towns and outposts across the country, driven by demand for banking services from enterprises and the people who work for them. The impact of the Bank’s architectural legacy in its territories has been significant. Banking halls, headquarters, and regional centres as much as individual branches have made their mark on the larger urban fabric through their facades, on the major street corners and in the plazas where the Bank has operated. In concert with the institutions that came after the Bank of Montreal, the impact

on urban architecture has been deep and lasting, from neo-classical architecture to the contemporary skyscraper to the highly technologized branch offices of modern times.

An Evolving Architecture of Service As the following pages show, the architecture of banking has evolved over time, sometimes dramatically. It is an art form constantly in flux. The nineteenth-century temples of finance, such as the Bank’s headquarters at Place d’Armes in Montreal, are wondrous and elegant examples of the period, but they would be inconceivable today. In each generation, several powerful forces are at work in creating the built environment of the Bank. The first consideration is the utility and function of the building for banking. A second consideration is

the needs of the customer and client. A third consideration: the changing nature of the business. A fourth and critical consideration is architectural expression: what message does the Bank want to convey? These considerations are always in a dynamic relationship with each other, to be resolved and expressed by bankers, architects, and builders. Finally, bank buildings have to respond to their broader cultural, social, and economic environment, whether in Montreal, Toronto, or Chicago, or Sarnia, Winnipeg, or Milwaukee. There have been monumental changes in the way the Bank has expressed itself across the generations according to the needs of the era: classic or contemporary, safe or avant-garde, established or upstart. The architecture followed suit and both accompanied and reinforced these changes. For much of its first century, the Bank of Montreal resided in buildings that projected safety, solidity, and security. They were formidable, conventional, conservative. The buildings invited customers into an institution that was not only secure; it was wealthy and connected. By the 1960s and 1970s, security as the prime consideration began to give way to another priority: service. This was in tandem with major changes in the way people perceived money. In the early days of banking, people saw money as a passive physical property. It needed to be protected and slowly accumulated. By the postwar period, more and more people came to see money as something that was in rapid motion. As one historian describes it, the transformation is from money storage to money stores. Customers became less interested in passive saving and more interested in active investing.

96

Th e BM O Un iv er se

The impact of these changes in consumer culture and banking had a major impact on the architecture of banking. The bank was not just a place where you locked away your treasure and visited infrequently. It was becoming a place where your money actively worked for you; where you struck relationships; where connection, transparency, and openness became priorities. The transformation of the office environment over time is striking. Where rank, hierarchy, and function were once prominent, a flatter, more collaborative impulse began to transform the working spaces of Bank of Montreal employees. As the Bank crosses the threshold of 200 years, its relationship with architecture remains in flux as it responds to the changing demands of customers and employees, the transformations of technology, and the shifting ideas of how we think of personal, private, and public capital. The entries in this chapter roughly conform to the three architectural ages of the Bank: classic, frontier, and contemporary.

Classic Age

C ANADA’S C APITAL OF C APITAL

Montreal Main Branch

T

he Bank’s main branch at Place d’Armes is a transformational Canadian landmark. This was the first building in Canada specifically designed for banking purposes. It was completed in 1819 at a cost of £8,750. For three decades, it served as the principal branch and the head office for the Bank. In 1848, it was enlarged

to accommodate the expansion of the Bank’s business. The prominent dome was added in 1904, but the facade has remained the same since the expansion of 1848. The building complex was remodelled and extended in 1905 by the American architectural firm of McKim, Mead & White, which pushed the original building and its extension onto Craig Street (now known as St Antoine Street). In the 1950s, the Bank acquired land immediately to the west to complete the current seventeen-storey structure (with four additional floors below ground). The square in front of the Bank’s main branch is a vital point of reference for the history of the region. Maisonneuve,

who founded Montreal in 1642, fought a decisive battle on that ground. Nearby lived the founder of Detroit, Lamothe Cadillac, and Sieur Dulhut, explorer of the Mississippi River and founder of Duluth, Minnesota. It is here, too, that the Canadian financial system took flight – first in the city, then expanding into region, colony, country, and continent. Directly opposite the Bank is Notre-Dame Basilica, built in 1829. Montreal Main Branch represents a unique architectural contribution to the city and the country on both the inside and outside. Such architecture was clearly meant to evoke the monumental style and solidity of the Bank itself. The main banking room was constructed in the form of a Roman basilica, inspired by Santa Maria Maggiore and San Paolo fuori le Mura in Rome, though with a decidedly different business transacting within! The ceiling is gilded with 350,000 23.5-karat gold leaf sheets. “Certainly no other bank is in possession of such a room,” reported one paper in 1903, “and it is indeed very doubtful if the large American or even English cities can produce its equal either in size, decoration or appointment.” For example, the floor-to-ceiling height in the banking hall was approximately 80 feet, with the Corinthian columns of Windsor green granite resting upon black Belgian marble. A major renovation completed in 1905 made Montreal Main Branch “probably the largest, and architecturally the most monumental, bank building in the world.” Montreal Main Branch has also served as the inspiration for the architecture of many of the Bank’s branches across Canada. The buildings were said to reflect and express the purpose of the occupants. The exterior structures were dignified, majestic, and monumental; the interior impressive, grand, and rich – all hallmarks of the classic banking hall of the previous century. A Sense of Pl ace

97

DOM INION RISING

Toronto Main Branch

T

he Bank’s operations in Toronto began a year after its establishment in 1818 with an agency on Frederick Street. Anxious to conduct business in Toronto but prohibited by then-current banking laws, the Bank of Montreal bought the Bank of the People and ran a banking operation on the corner of King and Bay streets – a corner to which it would return in the twentieth century. That first Toronto office was opened in 1842. In 1845, under the supervision of IrishCanadian architect Kivas Tully, the Bank had a stone building erected on the northeastern corner of Front and Yonge streets. The building served its purpose, but by the 1880s was looking rather ‘retro’ in a neighbourhood where more elaborate, Beaux-Arts-inspired buildings were being built around it. But it was in 1885, at that same corner, that the Bank of Montreal would offer its most impressive contribution to Toronto architecture (until the arrival of First Canadian Place). First, it demolished the old branch. Second, the Bank engaged noted architect Frank Darling to build an impressive new building. Darling and partners were the same architects who designed Convocation Hall at the University of Toronto, the Royal Ontario Museum, and the Art Gallery of Toronto (later Ontario), and a host of other famous buildings. But it was with the Bank of Montreal building – the building pictured here – that his place in the pantheon of Canadian architecture would be secured. The branch at 30 Yonge Street signalled a new perspective in the bank – one that was more self-confident and secure in its prosperity. In Montreal, the Place d’Armes building was undergoing extensive updates and a major facelift; Toronto would get a new building altogether. The

98

Th e BM O Un iv er se

Toronto Historical Board note on the Front and Yonge property calls it “one of the most joyously self-confident buildings ever erected in Canada, perhaps the only building in the Dominion that really exemplifies those feelings … described as ‘The National Dream.’” This building can be interpreted as a new generation of bankers asserting itself. The exterior is scaled for maximum effect. The vast banking hall contained inside completes the effect and was called the “finest

interior of any banking institution in the Dominion” by one contemporary observer. Certain elements recall the Montreal office, while retaining a clear Beaux-Arts look and feel. The Pantheon-inspired dome with vibrant stained glass covers virtually the entire interior space. The building has long since ceased to be a Bank of Montreal branch, but with some major renovations and upgrades it has become the worthy home today of the Hockey Hall of Fame.

THE CIT Y AS FRONTIER

Montreal West End Branch

T

he Bank of Montreal’s West End branch was opened on 10 June 1889 at 950 St Catherine Street West, the first of its kind beyond the majestic Main Branch of the Bank. The building is the work of Sir Andrew Taylor, one of Canada’s founding architects and the intellect behind a number of Montreal buildings, including McGill’s Redpath Library. It was built with sandstone from Scotland, and involved a good number of Scottish settlers, who worked on cutting the stone for this handsome building. Its first manager, D.N. Macpherson, led the branch until his retirement in 1920. He was said to be the most popular bank official in the city. Good leadership and popularity were strong competitive advantages as the Bank began to move beyond its traditional precincts in the old financial district of St James Street. The West End branch is a fine indication of the Bank’s expanding presence and prosperity in the late nineteenth century beyond the core of Montreal’s financial district. In fact, the Bank’s move to the west end was considered a bold ‘pioneer’ move to developing (but not developed) Upper Town Montreal. This was the first office opened by any bank, apart from the Main Branch, in the city of Montreal – the first step in the network of branches covering the city. By the mid-1920s, this was the busiest retail district in Canada. Many of Montreal’s most prominent merchants – many of whom lived and worked in the west end of the city – became lifelong customers of the branch. This included jeweller Henry Birks & Sons and E.M. Renouf of the Renouf Publishing Company, two prominent local merchants. One early patron of the branch noted that the West End branch obtained “most of the Savings Accounts in those days. The Bank of Montreal was the only place where a cautious man felt his money would be safe.”

A Sense of Pl ace

99

DOM INION BANKER

Ottawa Main Branch

T

he Bank’s close relationship with governments began virtually from the establishment of the institution in 1817. The Bank’s presence in Ottawa after Confederation in 1867 took on a particular prominence in its role as government banker, first Canadian bank, senior Canadian bank, and ambassador of Canadian capital in New York and London.

100

Th e BM O Un iv er se

The Bank established a branch in Ottawa – the city’s first bank – in 1842 to serve a local economy dominated by the wood and lumber trades. Ottawa’s designation as the new Canadian capital in the 1860s of course transformed the region. The importance of the city and the close nature of the relationship between the bank and the new government of Canada demanded that its premises be equal to the task. In 1867, the Bank purchased a lot at the corner of Wellington and O’Connor streets, opposite the parliamentary West Block. The building itself was constructed in 1873–74. Later, a small limestone house was built against the southern wall on O’Connor Street to accommodate Bank of

Montreal senior executives and directors visiting the national capital. The building underwent several expansions and renovations over time to accommodate the influx of work and business at the Bank. This was especially true during the First World War when the Bank in one year alone (1917) handled between 5 million and 6 million government cheques. In May 1929, the Bank announced that it would build a major new building in Ottawa to be designed by the architects Barott & Blackader of Montreal. The new building was inspired by a modern interpretation of Greek design in Queenston limestone and Stanstead granite. As the Royal Architectural Institute of Canada Journal reported in 1932, “the Wellington and Sparks Streets facades are heroic size relief panels depicting the future and past of Canada allegorically. Bronze and iron grilles have been used for the large windows at the ends of the building.” The impressive interior featuring a large banking hall – “a traditional temple bank in Modernistic guise” – imparted a more contemporary look to the Bank while at the same time recalling its past. This new building has been called the Bank’s “most noteworthy building project since the … head office enlargement of the turn of the century.” Here again, the Beaux-Arts design inspired Ernest I. Barott, the main architect, to propose a building of “severe, contained, classical composition.” As one observer remarked, “no bank at the time could have asked for a more perfect balance between modernity and tradition than Barott provided with his elegant sophisticated design.” Indeed, the work won the Gold Medal for 1932 from the Royal Architectural Institute of Canada. Today, the building has passed into the hands of the Government of Canada, which, after a $99-million investment, has restored it beautifully to its former glory, expanded it, and renamed it the Sir John A. Macdonald Building. Unveiled in June 2015, the building is now the home for large parliamentary meetings and functions.

WESTERN C APITAL

Winnipeg Main Branch

T

he Bank of Montreal opened its first branch in Winnipeg on 19 November 1877 under the leadership of Campbell Sweeny, the man who opened up the West for the Bank. The city in the 1870s was essentially a long street running from Fort Garry at the mouth of the Assiniboine River to a little north of the market square with a few parallel streets. The main national enterprises represented were, of course, the Hudson’s Bay Company, the Canadian Pacific Railway, and the Bank of Montreal. The first railroad to enter Winnipeg arrived on Dominion Day 1886. From the 1880s, Winnipeg was about to explode with flows of immigration, the seeding of the prairie wheat fields, and the development of the grain trade. Winnipeg presided over and participated in the strong growth of the West – as an entrepôt, distributing centre, and inspection point. The city became the fourth largest manufacturing centre in the country after Montreal, Toronto, and Hamilton. The city surpassed the billion-dollar clearing mark in 1911, a flow that undeniably conferred it the title of financial capital of the Canadian West. The rise of Winnipeg is admirably captured by the monumental Bank of Montreal Main Branch. The building, another in the banking temple style recalling the Roman Parthenon, is situated on the corner of Portage Avenue and Main Street in the heart of the business district. The Bank’s favoured architects, McKim, Mead & White, oversaw the construction of this neo-classicalstyle building. It was built as a three-storey frame structure with granite walls. The exterior is modelled on a Greek temple with Corinthian columns, while the interior recalls a Roman basilica with Ionic columns. The interior is rich in detail, with an impressive 50-foot height to the main banking hall. The ceiling is decorated in gold leaf.

The building’s monumental status in the city reflected Winnipeg’s rapid advance to metropolitan status as much as the Bank’s key involvement in the rising fortunes of the city. Winnipeg’s economic fortunes were also transformed specifically by the proliferation of banking, insurance, and investment institutions that took root in the prosperous soil of this remarkable

city. The building is also a statement of the Bank of Montreal’s engagement with the Prairie West as economic development flourished. The building served both as a main branch and western divisional headquarters until 1971 and has since been used for various functions.

A Sense of Pl ace

101

PACIFIC VISION

Victoria, British Columbia

V

ictoria is not only the provincial capital of British Columbia but was also an important centre for the movement of commercial timber in North America. For most of the twentieth century, lumbering was the predominant industry on Vancouver Island. The city has also had a long-standing tourist trade. The building pictured here is an enlargement of the 1907 Merchants Bank of Canada building in Victoria designed by architect Francis M. Rattenbury (at a total cost of $72,000, or thirty-two cents per square foot!). A major renovation was completed in 1924. The branch is located on the corner of Douglas and Yates streets, with a frontage of 120 feet on Douglas and 49 feet on Yates. The branch has undergone major expansion and renovation on a number of occasions as its connection to the community has grown and evolved and as the business of banking has transformed over the years. The history of the Bank in Victoria begins on not one but two dates: 20 May 1859, with the establishment of the British Bank of North America’s branch (a bank that merged with the Bank of Montreal in 1918), and 1 April 1891, the date of the Bank of Montreal’s opening at 1200 Government Street. In 1859, the city was not yet incorporated. In 1891, it was little more than a small but busy seaport of 17,000 people slowly making its way to its elevated status as one of the most attractive cities in North America. The leader behind the expansion of the Bank into the city was Campbell Sweeny, Victoria branch’s first manager from 1891. Indeed, Sweeny was responsible for establishing agencies in Winnipeg and Vancouver. In his career in Victoria alone, he laid the foundation of eight Bank of Montreal offices in various parts of the city.

102

Th e BM O Un iv er se

MODEL BR ANCH, MODEL CIT Y

Montreal Mont Royal, Quebec

T

he Bank’s Mont Royal office opened at 1625 Graham Boulevard on 1 November 1946, part of the great branch expansion following the Second World War. The branch itself, particularly its position and premises, signals an important change to the way branches were established across Bank of Montreal territory. The building, for example, was a converted restaurant with a residential apartment on the second floor. During the war, it functioned as a local office of the Canadian Red Cross. The Bank’s move into Mont Royal was part of a larger strategy of expansion. The city itself was founded in 1912 as a ‘model city’ inspired by several urban movements – notably City Beautiful, Garden City, and Garden Suburb – of the turn of the century. Originally a compact residential area, the city evolved into an affluent residential district and attracted some major industrial players like the radio electronics manufacturer Canadian Marconi and Canada Flooring Co. – both customers of this branch. The branch grew exponentially in the 1950s and 1960s, prompting renovation and additions to the building. Pictured here is the front of the branch, constructed in Vitrolite, vitreous marble used for the facades of buildings, especially in the Art Deco and Art Modern architecture of interwar America. This unusual building material was extraordinarily versatile. In the United States, it was extensively used to retrofit existing buildings in an effort to modernize the look and feel of Main Street America. In this case, the Bank used the material to put a new face on an old building and to start a new chapter of banking in a rapidly growing, affluent community.

A Sense of Pl ace

103

Frontier Times

T

SPECIAL BR ANCH

Isle Maligne, Quebec

104

Th e BM O Un iv er se

his Bank of Montreal branch was established in December 1952 on Isle Maligne as a sub-agency of the Saint Joseph d’Alma, Quebec, branch, in the heart of the Saguenay district. The Isle Maligne was the site of a massive hydroelectric generating station developed by the Saguenay Power Company, Ltd in the 1920s. The station was a wonder of its day, producing 540,000 horsepower, or 10 per cent of the total electrical energy output of all central stations in Canada. The Isle Maligne was considered to be the gateway to the ‘Northern Empire’ that beckoned north of Lac Saint-Jean. The branch opened at the special request of the Aluminum Company of Canada to accommodate its employees, which totalled around 800. Initially, the branch was open on every second Friday – payday – from 10 a.m. to 3 p.m. for deposit-taking. The publicity for the opening of the branch underlined the attractiveness of the interior of the building and the fact that a staff of three would be on hand to serve customers. This sub-branch was made a full branch of the bmo network in January 1957. Thereafter followed the construction of a more permanent structure that was “the most modern available.” The establishment of the branch was a fairly typical indication of how the postwar Bank was willing to meet the needs of both its enterprise and individual customers in the communities of the Bank’s territory. “Our ambition,” read one newspaper advertisement, “is to furnish the same level of efficient and practical service that Canadians in all walks of life have come to expect from the B of M for the last 139 years.” The fortunes of the district closely matched those of the broader district and its main employer. Although the branch was closed in August 1981, it serves as an important reminder of how the Bank sought to serve new districts, new customers, and new territories.

THE HEART OF THE EASTERN TOWNSHIPS

Knowlton, Quebec

T

his branch was opened on 19 April 1899 as a branch of the Molsons Bank. The original twostorey building also housed the manager’s residence, a fairly typical arrangement of the late nineteenth- and early twentieth-century bank halls in smaller communities. The branch is in the heart of Knowlton, about 60 miles southeast of Montreal on Brome Lake. The village of Knowlton was established in 1821 and thrived as a regional centre for flour processing. The city and county’s beautiful surroundings gradually attracted a wealthy clientele of Montreal businesspeople who built summer homes on Brome Lake. The region is famous for its winter skiing and its bucolic surroundings. Pictured here is an early photo of this modest but attractive branch, with ample parking for customer horse and carriage.

A Sense of Pl ace

105

M ARITIM E ELEGANCE

Mahone Bay, Nova Scotia

T

his bank hall began life as a sub-branch of the People’s Bank of Halifax in April 1900 in Mahone Bay, about 55 miles southwest of Halifax, Nova Scotia. The town was founded in 1754 by Captain Ephraim Cook, who brought the original German settlers to the area. The town is said to have derived its name from pirates infesting the bay and using low-lying craft with both sails and oars sloped slightly back, known in French as Mahonne. The first office on this land was a small storey-and-ahalf wooden building on one side of a dry goods store. In 1905, the Bank of Montreal acquired the People’s Bank and built a new structure in 1911. The arrival of the railway in 1905 connected the region to Halifax and Yarmouth, which had only been reachable by water in the summer and by stagecoach in the winter. The bank served customers principally in the fishing and shipbuilding industries. In fact, there were at least six shipyards operating when the branch opened in 1900. Fishing schooners were plentiful and the West India trade was thriving. Both activities, however, gradually faded into history as shipping gained the upper hand in the regional economy. The branch pictured here was originally built in 1911 on Main Street in the town. Its semi-colonial design and Corinthian pillars project the kind of classic style typically preferred by the Bank in smaller towns. The architectural image is strong, solid, elegant, timeless, and classic, and fits in with the architecture so characteristic of the Maritime region. As one Bank memorandum suggested, “the value of the Bank to the country is not to be measured so much by the amount of capital … as by the security it has given to those who have trusted it, the facilities it has furnished for the exchange and increase of commodities and the assistance it has contributed to the development of the country … everywhere in Canada it is a factor in the life of the community.” The Mahone Bay branch had the distinction of being featured on the cover of the Bank’s 1984 annual report: a tribute to its architectural elegance and symbolic power.

THE QUEEN CIT Y AND HER BANKER

Nelson, British Columbia

B

y the late nineteenth century, the Bank’s network of branches was reaching newly formed cities, towns, and districts across Canada. The Bank arrived in Nelson, “the Queen City of the Kootenays,” in the southern interior of British Columbia in February 1892, five years before the town itself was incorporated. The first manager, A.H. Buchanan, was reputed to have walked 50 miles from Northport, Washington, across the Canada-US border in snowshoes. In his pockets was the necessary capital to start the branch: $11.50. The Bank responded to the urgent call for banking facilities during the early days of the gold rush in Nelson in the 1890s, and was the first to arrive, if only by a few months. Nelson’s main industries in the late nineteenth and early twentieth centuries were mining and forestry, followed later by fruit growing. It also grew as a transportation entrepôt and administrative centre. The city grew to become the most vital distribution point between Calgary and Vancouver. The Canadian Pacific Railway reached Nelson in 1891, and the famous Crowsnest Pass branch of the cpr was completed in 1896, linking the town to markets both east and west. The Bank’s increasing specialization in understanding and serving these sectors in developing communities across the West allowed it to flourish in many such towns. The Bank in this instance very much grew in tandem with the city. The Bank of Montreal branch pictured here was completed in 1900 on the corner of Baker and Kootenay streets and was considered thereafter one of the finest banking buildings in the province. The black-and-white photo does not show it so much, but the construction is of a cream-coloured Washington pressed brick. The

architect combined the Beaux-Arts classicism of the era with a number of engineering innovations such as the use of steel T-beams in place of traditional wooden joists. The stylistic details – decorative scrolls, basreliefs, balustrades, and finials – connected the Bank and the town to a larger movement and context. The importance of the banking hall to the developing towns of the interior – location, position, and the projection of confident permanence – is nicely captured in the construction as much as the details.

The building was designed by Victoria architect Francis Rattenbury, the young designer of the British Columbia legislative buildings. He was the architect of choice in that era for three key Canadian institutions in British Columbia: the government, the Canadian Pacific Railway (for an office building), and the Bank of Montreal.

A Sense of Pl ace

107

BANKING IN NEX T-YEAR COUNTRY

Rimbey, Alberta

108

Th e BM O Un iv er se

T

he Bank’s presence in Rimbey, Alberta, on 17 November 1913 came as a result of the acquisition of the Merchants Bank of Canada, which had established the first banking branch in the town. The town, founded northwest of Red Deer and south of Edmonton in the Blindman River valley, was named after the Rimbey brothers who came from Kansas to Alberta in 1899. The town boasted one store, one post office, a creamery, two livery stables, and two hotels. The beginnings of the branch were as modest as one could imagine, being housed in a portion of a private residence. The town itself only had forty to fifty people, but its economic prospects were sound. The first manager, J.O. Lethbridge, and his assistant lived in a tent for two years – summer and winter – to provide banking services to the community. Lethbridge did, however, have the first motor car in the district (but no garage). By the 1920s, the branch moved into larger premises originally intended to serve as a billiards hall. The building you see here was built in 1928. Rimbey’s development after 1913 was uneven and halting, and oil and gas discoveries were decades away. The early days witnessed development in diversified farming and hog raising. Wheat growing was also important. The Bank’s presence in the region was considered to be an “important contributing factor” to the growth and development of the town and the district. In 1963, the Bank built “new air-conditioned premises” for the branch on the corner of Jasper Avenue and Main Street, just in time for the fiftieth anniversary of the branch. The Rimbey branch experience – the humble beginnings, the struggle, and the architecture – produce a fascinating snapshot of the Bank along roads less travelled, and its engagement with the struggles and successes of a diversity of regions and realities and peoples, yet at once connected to a common enterprise and purpose.

THE FRONTIER

Mayo, Yukon Territory

I

n 1928, the Bank of Montreal opened a branch in Mayo, Yukon Territory – an inland mining town 250 miles from Whitehorse at the confluence of the Mayo and Stewart rivers. This outpost of banking is about as far away architecturally from the bank halls of central Canada as one can possibly get. The notation on the back of the original photograph says that the building is “rather crude looking, but warm and cosy inside.” The Bank’s activities in the heartland of the Yukon Territory were stimulated principally by the mining sector. By the 1920s, the Bank’s specialization in the mining sector had already been established. Silver, zinc, and lead ores have drawn economic development activity to the area for a century. This log cabin branch was closed in 1942, although the Bank has maintained a presence in the Territory matching the evolving needs of the community.

A Sense of Pl ace

109

BANKING ON THE BAY OF HA! HA!

Port-Alfred, Quebec

110

Th e BM O Un iv er se

T

he Bank’s commitment to pushing the frontiers of branch banking in Canada in the 1920s is manifested here in Port-Alfred, Quebec, on the Bay of Ha! Ha! (now called Ville de La Baie). The Bay’s name is said to derive from the francization of the Huron word, “ahaha,” meaning ordinary trail. The Bank established its presence in Port-Alfred in December 1925 in order to provide banking services to this growing community between Chicoutimi and Bagotville. Like so many other Canadian cities and towns of the hinterland, Port-Alfred’s economy depended upon resource extraction. The Sulphite Pulp and Paper Corporation, the Consolidated Paper Co., and a subsidiary of the Aluminum Company of Canada, which owned and operated the deep-water facilities of the harbour, formed the heart of the economy. The history of the branch itself followed the fortunes of the town and its industries. Five years after its opening, in 1930, it was closed. In 1952, the branch was reopened for business, sharing the rented premises with a furniture store, a dentist, and the landlord. In 1962, the Bank entered its own premises as business grew, and to meet the demand for more banking services. The story of the Bank in Port-Alfred demonstrates the sheer range and reach of the Bank’s branch activities across geography and industrial sectors. In its multiple manifestations, the Bank’s presence in small communities, rural regions, and far-flung cities and towns was a response to both need and opportunity. The people who managed and staffed those branches were important pillars of the community, who functioned as local leaders, advocates of the region, and connections to the larger metropolitan centres. In the case of Port-Alfred, Manager Conrad Vanasse was the Bank of Montreal banker with those specific responsibilities in this region. Vanasse was a career banker with extensive experience in the Bank’s Eastern Canadian operations. The modesty of the architecture, therefore, belies a greater story contained therein.

BANKERS ON THE C ARIBOO TR AIL

Williams Lake, British Columbia

T

his branch was opened as a sub-office to 150 Mile House branch on 16 September 1919, and was promoted to a branch in June 1920. The arrival of the railroad – the Pacific Great Eastern – opened up this district to settlement and systematic economic activity. The business of the Bank was transacted in a 10-foot by 10-foot roughboard shack until February 1921. The new office was a one-storey frame building constructed mainly of fir and cedar, joining the provincial government offices and the hospital as the main institutions in the town. Banking on the British Columbia frontier was not a matter for the faint-hearted. In the railway construction

days, once a week a bank clerk took the payroll into town on horseback. On one occasion, the bank clerk readied himself for the long journey with his bag of cash containing $5,000 and several bottles of ‘liquid refreshment.’ By the time he reached Williams Lake, the clerk was the worse for wear, crawling under the counter at the general store to recuperate. When he woke the next morning, he found his money satchel underneath his head, where the townspeople had carefully placed it. The Williams Lake branch underwent renovations and expansion in the coming decades, with a new building being constructed in 1958.

A Sense of Pl ace

111

SERVING THE SUNSHINE COAST

Sechelt, British Columbia

T

he Bank of Montreal established itself in Sechelt, British Columbia, along the province’s Sunshine Coast, in July 1948 with a sub-branch to the Vancouver Branch. The branch conducted business out of this modest small frame building previously run as the telegraph office. Sechelt in the 1940s was primarily a summer resort, with logging and fishing as the principal activities. At the time this picture was taken, Sechelt had about twenty businesses. The Bank considered the area a “progressive community” and, with staff from Vancouver, also established a sub-branch two days a week out of Gibsons Landing. If weather prevented the Bank employees from returning home, local residents readily provided billeting. The Bank upgraded Sechelt to a full branch in 1955, moving to a larger location. In 1965, the Bank completed another round of modernization to accommodate the growth in its business. In 1973, the Bank moved into new quarters at the corner of Cowrie and Wharf streets. The branch stories of the Bank in Sechelt and in communities across its territory is one of nimbly meeting the rising demands for banking services as economies develop and mature. The growth of the Sechelt branch is a case in point: from the simplicity of a small rented premises to a more permanent structure, the constant element is the service.

112

Th e BM O Un iv er se

“A

pril 9 – a bank!” That’s how the Whitehorse Star

reported the arrival of the Bank of Montreal in this small community in southeastern Yukon Territory named for Frank Watson, an American trapper and prospector. “The bank will be located next to the Watson Lake Trading Post … this year has begun with an important and necessary addition to the community.” Until the building was completed, Bank business was conducted from Room 13 in the Watson Lake Hotel. The new 12-foot by 25-foot frame cabin would feature a small counter borrowed from one of the local stores and a portable typewriter obtained from the hotel. As the image suggests, this is very likely the smallest, most northerly, and coldest branch in the network. It

also shows the extent to which the Bank has widened its branch network to embrace the needs of customers and businesses. Watson Lake is just inside the Yukon Territory border on the Alaska Highway. The settlement has been a service centre serving primarily tourists and construction and highway crews, as well as exploratory mining crews operating in the area. It is also the centre of forestry in the area. In 1960, the discovery of large tungsten ore deposits attracted significant interest. The branch was closed in 1978, with the Whitehorse branch of the Bank taking over its activities.

BANKING AT M ILE 635

Watson Lake, Yukon Territory

O

n 12 April 1955, the Bank established a branch from a trailer set up on cement blocks in the Elliot Lake area (in Spragge, to be precise), 20 miles north of the Trans-Canada Highway between Sudbury and Sault Ste Marie, Ontario. In the 1950s, uranium mining drove economic development in the Blind River region and attracted a significant population. The trailer was hauled 500 miles, from London, Ontario, to serve the people of this post-war boom town. The journey took the two-person crew up from Highway 17 to non-existent roads to reach a temporary site on Highway 108 at the base of the Algom uranium mine. Six months later, the mobile bank was transported over a partly constructed road to Elliot Lake. The manager of the day, James B. Emsley, had doubts that the trailer would ever make it, but it did. A lean-to wooden structure was added to the trailer to deal with the flood of new customers – mainly construction workers who flocked to the area. In 1956, the Bank added another wooden shack to cope with the overflow of workers, cheques, and money orders. The Bank became the first commercial institution to establish itself in the community. Shortly after the opening, a payroll destined for the bank was stolen in a holdup while in transit, accelerating plans for a more secure commercial building in the city. In August 1958, the Bank established a “fine modern building” in the downtown commercial area of the city – to the relief of staff and customers! The history of the trailer and its subsequent evolution is a symbolic part of the post-war story of the Bank of Montreal. Its management was ready to strike out in bold new directions in certain fields as the times demanded. Elliot Lake represented a significant opportunity surrounded by practical challenges. The trailer captures a certain attitude and spirit of the Bank in the 1950s.

114

Th e BM O Un iv er se

FUTURE GREATNESS

Elliot Lake, Ontario

GOTHIC TUDOR REVIVAL

Libertyville, Illinois

T

he bmo Harris Bank branch in Libertyville, Illinois, is housed in the Public Service Building at 354–356 Milwaukee Avenue. The building is a Gothic Tudor Revival/ Neo-Plateresque structure officially inaugurated on 17 November 1928. The building was imagined to be an important anchor in a “dream-concept” community of the Bank owner. The exterior is an extraordinary synthesis of English, Moorish, and Asian styles. Moreover, the building was meant to house a number of businesses and establishments. The architecture of the bank is interesting, of course, but the historical interest in the building only begins there. This bank was originally the Libertyville Bank, established by British-American investor and business magnate Samuel Insull. He was also president of Commonwealth Edison Co. and presided over a massive holding company that financed electricity and public utilities. The entire Insull empire collapsed in the 1930s. In the late 1920s, at the height of his power and wealth, Insull commissioned architect Hermann V. von Holst with designing a building to both house Libertyville Bank and function as a promotion for the electric-powered world, Insull’s principal source of power and wealth. Harris Bank acquired the Libertyville Bank well before bmo emerged on the scene in the 1980s. The unique features of the building as well as its origins propelled it into the United States National Register of Historic Places in 1982.

A Sense of Pl ace

115

Contemporary Era

BANKING IN C ARS

Vancouver, British Columbia

I

n September 1949, the Bank received unprecedented national media coverage for the introduction of “Drive-in Banking” at the 10th and Granville (North Side) branch in Vancouver. It was the first drive-in bank in Canada, part of the Bank of Montreal spirit for being ‘first.’

116

Th e BM O Un iv er se

In 1955, the Branch went one further and introduced a “curb-side” teller’s unit to respond to the challenges of parking in the city by “allowing bank customers to carry out simple transactions without leaving their cars.” The “Snorkel Teller” – actually a mechanical arm – would reach out to you in your car. The device was an endless belt that extended from a special control area inside the bank, under the sidewalk, and up into a box a few inches from the car window. The customer could complete a transaction in as little as fifteen seconds. Bank officials also reckoned that the innovation would save about 150 parking spaces in the overall traffic picture. At the time, only the London, Ontario, Bank of Montreal branch could claim such an innovation. The Vancouver Province saw these innovations as “complete and final proof that banks have gone modern.” The article also marvelled at the fact that Manager Harold Whitmore’s desk was made of “freeform Danish teakwood furniture,” a sure sign of post-war modernity. “Just think. You can drive from the office on pay day; cash your cheque; go to a drive-in restaurant for dinner and then on to a drive-in movie; go home without getting out of your car.” The technology was not the only thing keeping up with the times. The manager insisted on being called by his first name, making him “one of the few managers in the country to own but one initial,” a local newspaper reported. The Sun quipped that “You might think a bank is a bank, but when you find one that has dumb-waiters, and loungers for employees, and comfortable chairs for customers, and a manager’s office that permits the public actually to see the boss sitting there keeping track of the income and the outgo, and handsome Danish furniture, and all and all, it is worth writing home about methinks.” The drive-in and curb-side innovations, the Danish furniture, the first-name basis with the manager – these are emblematic of a clean break with the pre-war style of Canadian banking that emerged after 1945. A new generation, impatient with formality and eager to embrace novelty, burst onto the scene.

SHOWC ASE BANKING

Don Mills, Ontario

T

he Bank of Montreal’s Don Mills branch opened in 1955 at 877 Lawrence Avenue East, Toronto, and signalled a deliberate break from the past. With its glass exterior, the bank’s architecture not only fit in with the new Don Mills Development north and east of the Toronto core but was also a sign of changing times in banking. “Showcase Banking is literally what residents of the Don Mills Development in Toronto will boast of once the Bank of Montreal’s eye-catching glass branch there is completed,” one press release gushed. Transparency and customer convenience replaces the

focus on building monuments and emphasizing security over all other priorities. John B. Parkin Associates designed and built the structure for about $100,000. The Canadian Architect in October 1957 asserted that just twenty years previous “the last type of building one might have examined for symptoms of translucence would have been a bank. It says something for modern architecture that it has been able to overcome the reluctance of bankers and the banking public, and their need for an unsubtle symbol of reliability and security, to the point where [the Don Mills branch] could be designed.” The building had a twin in Don Mills, authored by the same architect and commissioned by the Bank of Nova Scotia. In fact, the banks had gotten together to commission a building with similar features “so that costs would not get out of hand.” The enthusiasm of the architects perhaps led them to the conclusion that they were the only driving force behind the major changes in the way banks were

built. Bankers themselves were responding to changes in the way people wanted to interact with their bank. To the architects, this branch and similar others were “in the vanguard of a clarified understanding of the function of bank architecture.” To Bank of Montreal bankers, delighted to be in a new environment in almost every sense, it signalled a bank moving with the times. For customers, the overpowering architecture of the nineteenth century – appropriate for its time and place – would give way to a more friendly and approachable environment that encouraged interaction and relationship. The scale of this change in banking from the early part of the century to the post-war period is hard to exaggerate. When you compare, for example, the Front and Yonge branch (1885) and the Don Mills branch (1955), the radically different architecture speaks volumes of the revolution within banking at the Bank of Montreal and in the entire Canadian banking system.

MODERNIST AND M INI M ALIST

Villa Park, Illinois

T

he bmo Harris Bank branch at 10 South Villa in Villa Park is an astonishing and unusual example of suburban bank architecture. The branch was designed in 1964 for Villa Park Bank by the architectural firm of Hammond & Roesch. Peter Roesch was a student of the modernist visionary Ludwig Mies van der Rohe, the architect who would later design the TorontoDominion Centre in Toronto. As Lee Bey notes in an article on the subject, the vision for this branch was inspired by a Mies design for an Indianapolis drive-in restaurant that was supposed to be built in the late 1940s, but was never realized. The

concept of the restaurant, complete with the steel girders, exterior columns, and open ‘universal space’ was realized by Roesch’s execution of the branch design. The idea of an all-glass bank was increasingly popular in the post-war period as a way of focusing on transparency, openness, and customer confidence. Even in that trend, however, the Villa Park branch stands as a particularly stunning example of architectural vision and expression. The branch has become a major landmark as an important contribution to the built environment of this fine city.

T

his bmo Harris Bank branch in Spring Green began serving customers as the Bank of Spring Green. It was later acquired by Marshall & Ilsley Bank – and thus came into the Bank of Montreal stable. Spring Green was home to one of the greatest American architects, Frank Lloyd Wright. It was here that he had his studio and Taliesin, his estate. This branch at 209 E. Jefferson Street was designed by Wright’s protégé, William Wesley Peters, who kept faith with the Wright style, designing the curvilinear, limestone structure in 1972 and later adding the drive-up annex in 1975. As Wright once said of his métier, “Architecture is life, or at least it is life itself taking form, and therefore it is the truest record of life as it was lived

in the world yesterday, as it is lived today or ever will be lived.” If we apply that insight to this bank’s architecture, we can learn how the original bank desired to shape and be shaped by its wider surroundings and culture in Wisconsin. Peters’s oeuvre included an eclectic range of buildings: Fallingwater, the structure of the Guggenheim Museum, the laboratory tower at Johnson Wax, and the San Jose Center for the Performing Arts in California. Perhaps his most astonishing work was the Pearl Palace, or Kakh-e-Shams, built near Karaj, Iran, for the sister of the last Shah of Iran. Peters is also known for briefly being married to Svetlana Alliluyeva, the only daughter of Joseph Stalin.

ARCHITECTURE IS LIFE

Spring Green, Wisconsin

A Sense of Pl ace

119

CONTINENTAL DESTINY

New York City, New York

T

he Bank of Montreal established its first office in New York in 1859. The agency there has been a vital strategic link for the entire bank, acting as a clearing agent for all the branches in Canada and for London, Mexico, and Paris. It also negotiated loans to brokers against stock exchange collateral securities, purchased and sold foreign exchange and securities for customers, and performed a range of services. It also has been at once a command post and an information-gathering hub for the Bank at the centre of global capitalism. The Bank’s presence in New York from 1859 witnessed a number of moves as business grew and operations expanded. A hundred years later, in 1959, it began its second century in New York City at No. 2 Wall Street. The Bank acquired the building following the merger of the First National Bank with the National City Bank, and occupied the first four storeys and four basements of the structure. The building itself boasted 3.1 million square feet with a facade of polished granite. The building, extending 114 feet along Wall Street and 72 feet along Broadway, was built in 1932. The Bank’s standing among the banks of the world was very much on the minds of the management. The acquisition of the building was accompanied by an extensive and well-considered publicity campaign to promote the Bank’s expansion in New York, linked to the 100th anniversary of its arrival. In addition to the new building, the Bank could also point to other accomplishments. Measured by deposits, in 1958, the Bank of Montreal was the ninth largest in the world. And that year, it was run by the youngest president of those

120

Th e BM O Un iv er se

nine banks: Arnold Hart, age forty-six. In the 1980s, the building was sold after the purchase of the Harris Bank. The Bank then moved to 430 Park Avenue. The site of No. 2 Wall Street is connected to US banking history in a peculiar way: US Vice-President Aaron Burr (1801–05) had a part interest in the property. The connection to Burr is a curious one. He was a sworn enemy of Alexander Hamilton, first secretary of the treasury in the first American administration of George Washington and, more importantly, founder of the First Bank of the United States. The two famously fought a duel on 12 July 1804 wherein Burr killed Hamilton. The famous federalist is buried across the street from No. 2 Wall Street in Trinity Church cemetery.

IN THE LOOP

Chicago, Illinois

T

he headquarters of bmo Harris in Chicago is actually three buildings – built in 1911, 1960, and 1975 – that are connected internally. Each is architecturally significant in its own right. Together, the complex on the corner of Monroe and LaSalle streets constitutes an important address in the Chicago Loop neighbourhood, the city’s financial district as well as the seat of city and county government. The first building, the centre one, was designed by architects Shepley, Rutan and Coolidge and opened on 1 May 1911 as the first permanent home for the Harris Bank organization. These distinguished architects were also responsible for the Art Institute of Chicago (1893) and the Harvard Medical School (1906). One of the distinguishing features of this first major Harris building was the bas-relief lion sculptures on the facade, which established the lion as the symbol of the bank. The central building is flanked by the glass-and-steel towers built in 1960 and in 1975. The architects for both buildings were Skidmore, Owings & Merrill (som ), one of America’s most celebrated architectural firms. The East Building has twenty-three storeys and opened in the same year as Harris acquired the Chicago National Bank. This particular edifice is an early example of the International Style skyscraper that the firm would return to in the construction of the Sears Tower (1973) and, four decades later, 7 World Trade Centre (2008). The West Building was also an som -conceived project that opened in 1975, with thirty-eight floors. One of its distinguishing characteristics is incorporation of a public plaza. This building project was the first in the United States to include a program of commissioned art, including large works by Yaacov Agam and Evelyn Anselevicius, as well as a plaza fountain sculpture by Russell Secrest. It was also the first Harris Bank building to house an automatic teller machine.

A Sense of Pl ace

121

MODERN OUTLOOK

Milwaukee, Wisconsin

T

he building at 770 North Water Street acts as bmo Harris’s Milwaukee headquarters. Marshall & Ilsley (m&i ) Bank was expanding its operations and activities in the late 1960s and opened this building in 1968.

Architects Grassold, Johnson Wagner & Ilsley designed this contemporary twentieth-century concrete tower. Press releases of the day heralded the building as the avatar of a coming “modern Wisconsin,” both for its exterior and interior, which featured “colours common to Wisconsin’s outdoors.” This building’s construction was a symbol of m&i ’s rise to regional banking powerhouse in the 1960s and 1970s, the pride of Wisconsin banking. By 1972, the year of the bank’s 125th anniversary, m&i was second only to First Wisconsin. By the 1990s, it was

number one in the state. Its executives in 770 North Water were looking out toward the national horizon for new markets. The history of the Marshall & Ilsley Bank in the last few years has merged into that of the Bank of Montreal. The current Milwaukee headquarters has become an important nerve centre for the Bank’s expanding Midwestern United States operations. The m&i building is an architectural reminder of the m&i ’s importance to the development of banking in Wisconsin.

THE KING OF BAY

Toronto, Ontario

F

irst Canadian Place, or fcp as it is known to its inhabitants, was built in 1975–76 at the northwest corner of King Street West and Bay Street. The tower was co-developed by Olympia & York Developments Limited, the Bank of Montreal and the North American Life Assurance Company under the supervision of Bregman and Hamann, Architects. At seventy-two storeys, it was Canada’s tallest office tower and the tallest tower in the Commonwealth. In addition, this Ontario headquarters for the Bank was, at the moment of its unveiling, the eighth tallest and the world’s largest (117,000 square feet) bank building in the world. The plans included ample space for shopping and green space in addition to offices. Only two acres of the seven-acre development were to be used for the highrise buildings. The top of the podium was to become a park devoted to public use “with flower beds, pools, fountains, benches and plantings, where the public can escape from the claustrophobia and pressure of the downtown environment.” The marble on the tower was imported from Carrara, Italy, and filled 400 containers, each weighing twenty tons, for the sea voyage to its final destination. The entire cost of the tower was reputed to be in the neighbourhood of $160 million. It was the largest and tallest building incorporating a framed steel tube structural design concept. Plans for fcp in the mid-1970s came with their share of controversy. Some city residents and councillors wanted the old Globe building on the site preserved; others believed that the era of the highrise was over. The developers, however, made the required concessions and negotiations to proceed were concluded. When Pauline McGibbon, Ontario’s

lieutenant-governor, unveiled the cornerstone, she called the project one “designed to serve people rather than overwhelm them … There is no longer room for rampant growth. In this age, planners and builders more and more must look to creating functional, people-oriented structures rather than edifices for personal glamour or glory.” A Sense of Pl ace

123

bm o’s M ost Wa nted

Protecting Your Money

T

he physical security and protection of the wealth of the community has been one of banking’s most vital – and most fundamental – functions. From the very beginning, the physical protection of the gold, specie, notes, legal tender, and more recently, the electronic assets of Canada’s first bank and its customers has been a key preoccupation in all of the Bank of Montreal’s banking activities. People need to feel confident that their money is literally safe before they can think of more productive uses of their capital. Security and stability are the foundation of a successful financial system. This chapter is in some ways a testament to two universal impulses. The first is the persistent desire to get rich quick, and the many ingenious ways criminals have found over time to try to make that happen – sometimes through brute force and violence, sometimes through intricate

plots and conspiracies, and sometimes through attempting to outfox or outsmart humans or technological systems. The impulse to steal is an ancient one; it is also one that constantly finds new and sometimes inventive expressions over time and space. Physical force and violence is the most basic and the most brutal, but it is only one. Counterfeiting bills and notes, kiting cheques, defalcation, and fraud also take their place in the rogue’s gallery. When value and wealth begin to flow more freely, the criminal mind perceives an opportunity. In the highly technologized contemporary era, debit and credit card fraud, skimming, and all sorts of Internetinspired fraud and theft take billions upon billions of dollars from the world’s financial systems. The second impulse is the powerful determination of financial institutions to fulfill a prime directive: to keep your money safe – literally. This

applies equally across all banking institutions, of course, but when you are Canada’s first bank, and you are a leading bank, you take very seriously the responsibility to maintain the highest possible standards of security and protection available. Throughout the Bank’s history, security and protection of money have been fundamental considerations across the Bank’s territory and operations. At the branch level, the response was often physical and visceral: the Bank managers and employees were issued firearms and used them when absolutely unavoidable. Until about a generation ago, banks were central institutions in most communities, repositories of hard-earned and slowly accumulated wealth. Bank robbers were not often shown any mercy by townsfolk. In other cases, branches and head offices had to deal with system-wide issues such as counterfeit notes and corporate-wide security concerns such

as technology-based fraud. Internal audit systems, moreover, kept a close watch on the day-to-day operations of the bank. Organizations in contemporary banking also use their sophisticated systems to mitigate risk through insurance and an elaborate web of protective systems. Coordination and collaboration amongst institutions are also the order of the day in the fight against an increasingly sophisticated enemy. Complete protection everywhere and at all times is an impossible dream, but banks can ensure not only that money and wealth are protected as much as possible but also that the victims of such crimes are taken care of.

126

Th e BM O Un iv er se

The ancient philosophers had it right: the beginning of freedom is to be free from crimes. In the case of the defence of the community wealth vested in the Bank of Montreal, that freedom flowed from the confidence and trust people put in the Bank itself and as part of a Canadian-wide banking system that would protect their money from evolving and multi-faceted threats. The objects featured in this chapter represent an arc of the story of protection over time – designed to keep wealth safe, free flowing in the world, and away from the underworld.

MONEY BEHIND BARS

Teller Cages

T

he evolution of teller’s cages were yet another way bank branches on the front lines attempted to protect their money and their personnel. The twentiethcentury teller cages were typically equipped with a variety of electrical devices, hidden from view and known only to the teller. The cage was part of an overall architecture of security progressively being built into the design of nineteenth- and twentieth-century banks. Such security measures were part and parcel of the idea of reinforcing the security and stability aspect of banking. This approach was, on the one hand, pragmatic because of the security it afforded and, on the other hand, symbolic because such improvements aligned to the generalized approach of banking in this era. Contrast this with contemporary banking, where the emphasis has long been on openness, relationship, and transparency in banking transactions.

b m o’s M ost Wa nted

127

The Safety of Vaults

T

he desire to keep valuables and wealth hidden away and protected has an ancient lineage. The Emperor of Annan was said to keep gold in a large water tank guarded by crocodiles. When he wanted to withdraw gold, the crocodiles were killed, the gold was retrieved, and a new supply of crocodiles was put into the tank. Effective but at the very least impractical! By the eighteenth century in England, treasure chests were initially built of heavy substantial wood, reinforced with iron, and then made entirely of iron. By the nineteenth century, in the United States, modern safes began to be developed, and the idea developed rapidly. The protection of Canadian colonial wealth in the Bank of Montreal began with those eighteenth-century English-style chests. By the mid-nineteenth century, much more substantial wealth and progress in the art of vault building began to change the significance of the vault, making it in effect a building within a building. The Winnipeg Main Branch’s vault in 1912 was the heaviest and most protected vault ever built to that date. It was constructed in three sections, with foundations poured down to the bedrock, and it was isolated from any outside walls. The first section of the vault was a book vault; the second, on the basement floor, was a safety deposit vault; and the third, on the main floor, was used as the Bank’s cash vault. The safety deposit vault was 32 feet long, 9 feet 2 inches wide, and 8 feet high, with the steel in the doors and lining of the vault weighing 250 tons. The outer door of the safety deposit vault was 18.5 inches thick and weighed 18 tons, while the inner door weighed 10 tons. The doors were reinforced with thick layers of carborundum to prevent burning through the door. There were twenty-four solid-steel, 4-inch-diameter, locking bolts on the outer door, and two combination locks on each door. The codes were known only to two officers of the

128

Th e BM O Un iv er se

Bank. Quadruple time locks ensured extra security. Of course, security patrols and “electric protection” were also an indispensable feature of the vault system. An elaborate daily ritual accompanied the opening and closing of the vaults in almost every branch across the Bank of Montreal territory. The construction of new branches or the leasing of new premises – especially after the Second World War – spawned an impressive

documentary record of the specifications for and uses of vaults. The bank vault is the symbol par excellence of the protection that financial institutions afford their customers, keeping wealth in the hands of those who owned it and earned it. Winnipeg was but one example of the fortresses built inside the Bank of Montreal branches.

BULLETPROOF AND ROLLING

Armoured Cars

A

rmoured cars emerged as a natural response to the growing risk of transporting large volumes of wealth from branch to branch. This, of course, has always been a risk since the beginning of banking itself: protecting what is inside from malevolent forces on the outside. Bank robbery is always hell, but this was hell on wheels, adding speed, and an additional layer of risk to transportation. The evolution of the armoured car stretches back to the Wells Fargo stagecoaches of the nineteenth century and railroad ‘treasure cars,’ as well as the armoured vehicles used during the Great War. The mobile fortress began to be deployed in number by the 1920s and followed strict rules regarding construction. Smith Brothers of Toronto was one company that began to specialize in the construction of these special vehicles, customized for clients. One such car in 1924 was described as “made entirely of Special Armoured Steel, walls to be 3/16 gauge, roof and floor to be 12 gauge … Frame-work of body to be constructed of angle iron and all parts well fitted and securely riveted. The body to have such portholes for shooting purpose and in position as requested by customer.” The armoured car has, of course, become an essential feature of transportation in financial services today. The cars themselves have come a long way from their primitive beginnings at the dawn of the twentieth century, with innumerable improvements to the security features as the means to assail them have also grown. It is also frequently an object of fascination among movie producers, an object of desire among criminals, and a key source of protection of your valuables. In fact, armoured cars are much less likely to be the object of theft than bank branches.

b m o’s M ost Wa nted

129

BULLETS, BR ANCHES, AND BANKING

Guns

130

Th e BM O Un iv er se

F

irearms and banks have had a close and sometimes uneasy relationship. Of all the ways of protecting the bank’s money, this was the most potentially volatile. Up until the last generation, bank managers’ standard issue in branches included a revolver or pistol in case the unthinkable happened. In fact, it was less a matter of ‘a’ revolver, but revolvers in quantity. One Bank of Montreal Circular in 1964 suggested that a miminum of two revolvers be on hand for a staff of six persons or

fewer. If the branch was considerably bigger, say, forty staff, then five revolvers were suggested. For the really big branches, it was suggested to keep twenty or more revolvers on hand. The guns were used as protection when money needed to be moved around the city. The rules surrounding the care, maintainence, and use of the revolvers were carefully laid down: always “fully loaded and readily accessible … properly oiled and otherwise kept in order … and out of sight of the general public.” Handling guns in branches was as routine as counting money. Pistol practice was also a routine part of the life of the branch in the twentieth century, with the local police often providing instruction to bank employees. It was “not the wish of the Head Office that women members of the staff hold revolvers” until much later in the century. All guns were recalled by the head office in 1978. One of the many stories about bullets and banking comes from the old Bloor and Bay branch in Toronto, which had a storefront on both streets. Frank Pugh, the manager, saw a car quickly pull up in front of the branch. As he tells it, “While one man waited in the car, three young men climbed out and made a beeline for the branch door. I reached into my drawer, pulled out the gun … and waved it at one of the guys before slamming it onto the desk and glaring at him. I then ran into the line of Tellers, telling them there was a potential hold-up, to slam all their big bills into the waste baskets and then do whatever the robbers demanded.” Fortunately, the robbery never materialized – Pugh’s gun waves made the robbers think twice. The police were called, but apparently made no note of the call. Fifteen minutes later, a branch of the TorontoDominion Bank was robbed. In November 2001, due to federal legislation on firearms, the Bank donated its collection of firearms and shotguns to the Stewart Museum in Montreal (the second largest military museum in Canada). To preserve physical evidence of a striking and little-known aspect of the Bank’s history, two permanently disabled weapons – a revolver and a shotgun – remained with the Bank’s Archives.

PRIVACY, SECURIT Y, CERTAINT Y

The Safety Deposit Box

S

afety deposit boxes within the environment of the vault have provided customers a space of exceptional security and privacy for the most treasured of their belongings: insurance papers, personal effects, wills, share certificates, personal mementos, jewels, and much more. The service, of course, is as old as the Bank itself: the original Articles made clear that the institution could “receive deposits of Ingots of Gold, Bars of Silver, wrought plate, or other valuable articles of small bulk, for safe keeping at the risk of the depositor.” In the Montreal safety deposit vault, a client would be brought down via elevator to the basement floor and proceed to a locked steel grill door where the “keeper of the keys” would allow entry if the client was known. If not known, the client would have to explain his or her business and give proof of identity. The client would then sign in at the manager’s desk, showing the date and hour of the visit. “Saftey Deposit Boxes should not be rented to strangers,” one circular in 1918 suggested, “unless they give the best of references, which can easily be referred to for confirmation, and no one other than those authorized should be given access to the boxes.” After signing in, the client would be ushered into the vault where a “Guard Key” would be inserted into the lock of the respective box and the guard mechanism thrown off. The client’s key would then be inserted, thus completing the dual control system. After taking out the inner tin box containing the stored valuables, the client would retire to one of the “Coupon” rooms to conduct his or her business.

These deposit boxes were not just a matter for the wealthy and their share or bond coupons. Many people of more modest means, but with valuables, used the facilities of the Bank. One keeper of the keys reported that a returned soldier who left Winnipeg in August 1914 with the “Little Black Devils” (Royal Winnipeg Rifles) came in with both keys to his box, which he had rented upon his return from overseas in 1919. In fact, he was like many small investors who, in the wake of Victory Bond campaigns, now had papers and certificates they wished to protect. The soldier’s story is not much different. He worked for the railway in the post-war period. The veteran revealed to the manager the contents of the box: a Military Medal for bravery on the field, a Mons Star, a Victory Medal and Service Medal, and a German Iron Cross that he picked up on the battlefield. But by 1932, he could no longer afford to pay the rent on the deposit box and would have to “give up his box for the sake of a $5.00 annual fee.” The Depression vacated a great many boxes, but the postwar period saw a dramatic resumption of safety deposit box use to protect valuables, especially irreplaceable items and original copies of documentation.

b m o’s M ost Wa nted

131

24-HOUR STRONG BOX

Around-the-Clock Depositories

T

he installation of Around-the-Clock (atc ) Depositories in the 1950s provided an additional measure of security and convenience to the banking public. It increased security by eliminating the risk of loss or theft of cash held overnight on client premises. This small but useful innovation also served to reduce costs by lowering insurance premiums for companies and businesses that up to then had, indeed, kept cash on the premises. Retail outlets such as stores, restaurants, and gas stations – all businesses that had to remove cash from their premises after banking hours – found atc Depositories a marked improvement over previous practices. As the Elora Express reported in June 1958, “The accommodation provided is unlimited and local business people and any who care to use it will find this security they can enjoy any time outside of banking hours much to be grateful for.” The atc Depositories can be seen as part of a larger movement in the post-war period to constantly improve business services to customers. This included expanding payroll handling, investment, safekeeping of securities, bank-by-mail, and traveller services. As one brochure in 1954 enthused, “First Canadian chartered bank to adopt widespread use of after-hours depository, the B of M continues in the pioneering pattern it has followed since it founded the nation’s banking system 137 years ago.”

132

Th e BM O Un iv er se

ENSURING THINGS ADD UP

Inspectors and Auditors

T

he inspection and auditing function within the Bank has been an essential feature of the protection of the Bank’s administration and handling of its operations. Since the first formal inspectors were appointed in the 1850s, this function has ensured that the most stringent possible procedures, and the most efficient ones, have been brought to bear on the branch and head office operations. This perhaps explains why Corporate Audit has acquired a reputation for ensuring that the Bank adheres to the highest standards of administration and operation. One of the most exacting auditors of his generation suggested that the auditor worked with staff but had to be discerning enough to form independent evaluations. “You have to know when to pursue a problem in more depth, and when to drop it. You can never lose your independence or be talked out of things. Co-operation without compromise is the expression I use to describe this fine balance … [and] this is one of the things that makes a good auditor.” Auditors were tasked with examining the bank operations and the efficiency of administration and with reporting the situation to the executive. They were also required to assist managers and officers, especially the younger ones, in the execution of their duties. Every aspect of the banking business came under scrutiny. The auditing function kept pace with transformations in the field, for example, moving to risk-based approaches in the 1980s. Defalcation, fraud, and embezzlement were rare but only part of the overall picture for the Bank of Montreal inspectorate. To be honest, the auditors of the Bank were not exactly popular. The audit team would show up at a branch – unannounced – lock it down, demand the

surrender of keys and instruments of authority, and begin the process of ensuring that all the books were in order, ledgers balanced, securities counted, and liability list prepared. At the departmental level, more notice was usually given, but the methods used were not only pragmatic and useful but also designed to strike the fear of the Almighty into the operations of the Bank! Auditors were exclusively equipped with the “auditor’s purple pencil” (pictured here). Nobody in the Bank was allowed to possess or use this colour pencil except the auditors. Therefore, any writing or notation in that colour (in reality, magenta) bore the authority of the Bank’s audit team. It is likely safe to suggest that magenta was the least popular colour among generations of Bank of Montreal employees! Popularity and efficiency, however, do not always go together. The inspectorate of the Bank was commissioned to submit factual, unbiased reports at all times and to encourage managers and accountants in maintaining proper training sessions for their staff. Some auditors, such as David J. Montgomery, a senior auditor in International Operations, got to travel the world to ensure that the same level of oversight was applied to the Bank’s international operations from the Bahamas to Seoul to London. The reality is that the inspector and corporate audit function provided a comprehensive picture of the Bank’s performance in the multi-faceted and increasingly complex world of banking. R.D. Mulholland, general manager of the Bank in the 1960s, noted “the dependence of the Executive on the independent factual reporting of each Inspector as the Chief General Manager’s personal respresentative.” They were the “eyes and ears of the Bank” inside the organization. The reports were frank and fearless – exactly the kind of report a serious executive would earnestly desire. The result has made and continues to make Corporate Audit a vital and sophisticated element of the Bank’s responsibility to its customers and its own future.

Reward Posters

T

he circulation of reward or wanted posters in nineteenth- and twentieth-century Canada were, quite simply, the most effective communication means that banks and the forces of order had to counteract crime. The poster would be disseminated in the community where the forgeries, counterfeit, or robberies took place. In retrospect, these posters have become not merely conveyers of information but also offer glimpses into the social and environmental landscape of the time. As one can well imagine, crimes against Canadian banks generated a great number of posters. Some of them were quite detailed in their descriptions, as the following reward poster for the arrest of Alexander Allan, forger , attests: Left Montreal on the night of 28th December. He is 40 years of age; about 5 feet 7 inches high; weight 165 pounds, medium stout, good build; sallow complexion, has the appearance of a hard drinker. Medium size moustaches and dark brown whiskers; hair on head in clind [sic] to be turning grey; full blue eyes; regular features; short chubby hands, and wears a plain gold ring on third finger of left hand; quick walker, nervous temperament; usually dresses plainly in dark coat and vest, small stripe pants and derby hat; wore a curb chain and locket suspended from the center of chain; is a pleasant conversationalist; has a slight Scotch accent. If arrested, charge with Forgery, and communicate with JOS. KELLERT Gen’l Supt. Metropolitan Detective Bureau 237 St James Street, Montreal Canada. 31 December, 1888. Some of the posters were issued by the police, while others were issued by Pinkerton’s National Detective

134

Th e BM O Un iv er se

Agency across their agencies. The Canadian Bankers Association (cba ) played a preponderant role in offering rewards leading to the capture of bank robbers. Between 1924 and 1950, the cba had paid rewards aggregating $253,203. Smaller towns were particularly

vulnerable because of the absence of police and the existence of good highways providing means of escape. The reward poster was one of the many instruments in attempting to bring criminals to justice.

GENUINE FR AUDS

Forgeries and Counterfeits

O

f banking’s deadly sins, counterfeiting surely must rank amongst the most pernicious and pervasive. Forgeries and counterfeiting have been around virtually as long as paper money itself. The problem has spanned the entire history of the banking system in Canada, and has cost untold hundreds of millions of dollars. The attempts of banks and the banking system to stay one step ahead of the counterfeiters have never fully succeeded. It has been called a ‘crime of creativity,’ where “the day you think you have the problem solved is the day you have a problem.” Its contemporary equivalent is bogus credit cards and debit cards. Indeed, the problem of counterfeit bills in the 1820s was so great that it commanded the attention of the Lower Canada legislature. The Bank of Montreal reported that its notes were frequently counterfeited, and thence withdrawn from circulation, and that it had “expended large sums in its endeavoures [sic] to suppress and break up gangs of Counterfeiters, and has withdrawn from circulation various issues that have been altered or counterfeited.” The production of counterfeit notes required a high degree of technical skill, an offset prress, and engraved plates. In the later twentieth century, technological advances from photocopiers to scanners and computers made the job much easier. By the early to mid-nineteenth century, the trade newspapers of the day routinely published discoveries of bad or counterfeit bills and their provenance – and the Bank of Montreal was, as a prominent Canadian bank, never immune to the attempt. The monthly journal The National Counterfeit Detector was published in New York for bankers and merchants in the United States and Canada. Banking’s information network had become elaborate, complex, and effective to counter the

counterfeiting menace. The network extended between banks and through organizations right to the teller’s position. The counterfeiting was only the beginning: forgeries, false or bad cheques, and bogus signatures were all part of the cat-and-mouse game with the criminal element determined to separate the bank and its customers from their money. “In recent years,” one Bank of Montreal teller manual suggested in 1965, “losses to the Bank through successful frauds and forgeries have been substantial. These attempts are often very skilful and their defeat calls for the constant vigilance of every teller.”

The art of the bank note got progressively more and more complex, with micro lettering, radial lines, planchettes, and a number of other special features designed to make it as difficult as possible to copy the real notes. But as long as counterfeiting is profitable – and it can be immensely profitable for organized crime – passing off what is false and worthless for what is true and valuable will continue.

b m o’s M ost Wa nted

135

PROVING WHO YOU REALLY ARE

Pinpads and Internet Security

I

n the late twentieth century, the advent of electronic banking initiated a revolution in customer convenience. In 1984, the Bank unveiled the Multi-Branch Banking card and a Personal Identification Number (pin ) for customers to access their accounts across the automatic teller machines. This was based on the magnetic stripe technology originally developed by ibm in the 1960s, which unleashed a world of new possibilities for a number of industries where identification and authentication was important. By the 1980s, the cards and their use had been standardized internationally and regulated by the International Organization for Standardization. Banking technologies were making banking simpler for customers, allowing instant access to multiple accounts – two features that distinguished the Bank of Montreal’s Instabank machine features from that of the competition in the mid-1980s. Protecting customer money had always been coupled with exploiting the possibilities that technologies could provide in the realm of convenience. Customers could now conduct most banking transactions on their own, such as cash withdrawals, making deposits, checking account balances, paying utility bills, tranferring funds, and getting cash advances. The emergence of the Internet and, in particular, Internet banking has added innumerable layers of complexity in order to unlock convenience for the customer. Here again, the security dimensions have rested upon elaborate information technology systems and, it would seem, more than a passing knowledge of one’s mother’s maiden name, favourite pet, and first school attended. The sheer range of transactions now possible from the Internet is impressive and growing every day, at a fraction of the cost these transactions once demanded. Putting that range of instruments into the hands of the customer – individual, small business, large enterprise – has facilitated a wealth of new cost savings and possibilities. Revolutions in convenience have typically meant parallel revolutions in protecting the wealth entrusted in the bank.

In Hoc Signo

200 Years of Royal Arms, Logotypes, and Trademarks

T

he Latin In Hoc Signo means “In this sign,” part of the phrase “In this sign you shall conquer,” which tradition traces back to Constantine the Great. The symbols and icons of the Bank of Montreal are among the most recognizable and most important design elements in Canadian history. The symbols – the seals, arms, and logos – tell a sometimes-complex story. Used as a significant system of communication, they embraced many different kinds of media – seals, letters, pins, coins, paper currency, and architecture, to name a few. The iconography of the Bank was its signature. Its symbols came to project authority, confidence, trust, and permanence. In the nineteenth to mid-twentieth centuries, when people regarded the coat of arms of the Bank of Montreal, they were looking at a history, a connection with city, region, and nation. Governments, garrisons, brokers, agents, businesses, agencies,

institutions, families, and individuals who did business with the Bank of Montreal all had an ongoing relationship with the institution linked in the most concrete way imaginable: through their own wealth and capital. The symbols of the Bank, the meaning the Bank’s people invested in those symbols, and the way people interpreted them over time were, of course, all influenced by the nature of the business and the relationships that defined the Bank. Above all, these symbols transmitted – and continue to represent – the earned reputation of Canada’s oldest financial institution. They also in some ways carry with them the values to which the institution aspires. These symbols over time are responses to questions that generations of Bank of Montreal people ask themselves: Who do we want to be? What values do we want to project? That ‘visual conversation,’ however, is not

one-way. Audiences and publics also have a say in how these images are received and interpreted, understood and acted upon. The symbols of bmo Bank of Montreal will have different receptions in Montreal, Toronto, Chicago, Milwaukee, and London according to reputation and experience. Today, the ‘brand’ has become one of the most valuable assets an institution can possess. As a result, the symbols of that brand have become some of the most precious and protected symbols in the corporate world. As we move into modern times, the changing symbols of the Bank point to how identity changes over time, and with the times. The nobility of the coat of arms gives way to more contemporary symbols – more abstract ones, such as the highly recognizable M-Bar – that capture the evolving nature of the Bank’s activities. The contemporary symbols strive to capture a more complex

corporate enterprise that makes up a diverse range of people and activities. The proud connection to place – Montreal, Canada, the North Atlantic world – gives way to more abstract representations that embrace a larger idea of time and space: colony to nation, nation to continent, continent to global reach. The vast expansion in the Bank’s activities, products, and services over the past 200 years is mirrored in the evolution of the symbols of the Bank. From the earliest manifestations of the Bank of Montreal’s symbols we see stability and change

138

Th e BM O Un iv er se

in identities, shifting values, and evolving meaning. We also see an evolution in aspiration and a transformation in what people respond to and what they belong to. The symbols and signs tell of a cultural fluidity across time. They tell a story. They really do stand out amid the constant flow of visual material we see, hear, and experience every day. For generations of Bank of Montreal people, these symbols and signs spoke and continue to speak of an important history, an engaged present, and a strong future.

T

AN EM ERGING IDENTIT Y

The Coat of Arms, 1837

he Bank’s remarkable original coat of arms has its beginnings and development in the fervid political and economic environment of Montreal in the 1830s. It was not only inspired by but also closely resembled the City of Montreal’s first coat of arms proposed by Jacques Viger in 1833. All the elements you’d expect to find are there in the city’s coat of arms: the fleur-de-lys of France, the rose of England, the thistle of Scotland, and the shamrock of Ireland. The beaver is a highly recognizable symbol of Canada, and also recalls the fur trade. At the base, a cornucopia represents the fruits of industrious labours, while two First Nations supporters, one in ceremonial dress and the other in hunting dress, grace either side of the coat of arms, acting as guardians. The Bank’s coat of arms preserves most of these elements, except the fleur-de-lys. The absence of the French could be justified somewhat on the grounds that the Bank was predominantly an Anglo-Scots institution. The political turmoil of the decade may offer another possible clue, as ethnic rivalries and republican sympathies would reach their culmination with the rebellions of 1837–38. The leaders of the Bank in the 1830s wanted the coat of arms to serve as a symbol of stability in troubled times, to recall the source and summit of their prosperity, to underline Viger’s motto – that prosperity flowed through harmony – and to pay homage to kith and kin through the bonds that united the British peoples. The success of the Bank in the North Atlantic world allowed its coat of arms to become a symbol for Canadian banking in that world. It also reinforced the Bank of Montreal’s connection to Canada, and vice versa.

In Hoc Signo

139

PROSPERIT Y THROUGH HAR MONY

The Coat of Arms, 1934

T

his logo is perhaps the most recognizable as symbolic of the historical Bank of Montreal. It is the armorial bearings of the Bank, or coat of arms. The bearing was granted by the College of Arms on 21 April 1934. The original coat of arms was an adaptation of the arms of the City of Montreal. The London, England, office of the Bank advised the Bank management in Montreal in the early 1930s that in London at least, armorial bearings not registered with the College of Arms had no official recognition. In addition, the design was all wrong. The First Nations supporters were reclining, something no supporter did in heraldry: supporters always stood. The beaver had to rest on something firm and not directly on the coat of arms. The oval shape of the original coat of arms was intended for “Dames, Misses and Eccelesiastics” – and not many of those were to be found within the Bank of Montreal upper management. There is a lot that meets the eye in this splendid coat of arms. The Bank’s origins, the provenance of its leaders, the sources of its wealth, and the perspectives of its management are all captured. The registered coat of arms features red bands crossing diagonally on a silver shield between the Rose (England), the Thistle (Scotland), and the Shamrock (Ireland). On the crest there is a Beaver (Canada) in natural colouring upon a maple log resting on a wreath or garland of silver and black. The supporters on either side of the escutcheon, or shield, are First Nations men.. The first is holding, in his outside hand, the “Calumet” or ceremonial pipe, and raising his other hand to his forehead to gaze into the distance. The second is in hunting dress, holding a bow

140

Th e BM O Un iv er se

in his outside hand. The motto, Concordia Salus, can be transliterated to mean, “In harmony there is safety or wholeness (or perhaps even prosperity).” The push to legalize the coat of arms of the Bank in the 1930s had less to do with the normal marketing preoccupations and more with the cultural preoccupations of the Bank’s management, its links to Empire, and its responsibilities and image as one of the primordial Canadian institutions. In other words, it mattered to the leaders and the people of this colonial Canadian bank

in the 1930s to ‘get it right’ for itself and the circles in which the Bank’s executive management circulated. This historical coat of arms is a product of a bygone era and a bygone culture. The absence of the fleur-delys, for example, would never pass today. To have any person – let alone First Nations representatives – “support” the shield on the coat of arms is inconceivable. Yet, the Bank’s coat of arms remains a remarkable historical artefact, statement, and symbol of a complex and original Canadian institution.

M ASS APPEAL

“My Bank,” 1946

I

n Canada, the end of the Second World War was met not only with relief at the cessation of hostilities but also with a fresh, new perspective on everything from markets to the role of the state to what Canadians had a right to expect as individuals and as a country. Postwar reconstruction also prominently featured a release of massive pent-up consumer demand, a new energy, and a renewed confidence in Canada’s future. The war, in other words, was a watershed for the country in so many ways. The “My Bank” logotype pictured here captures some of that new spirit. Its focus is at once individual and collective (it’s “My Bank” but it is that to a million, then 2 million, then 3 million Canadians as the bank tripled its customer base). In fact, one of the early prominent post-war campaigns was being a “No. 1 Citizen,” looking after No. 1. That did not mean ‘selfishness,’ but rather sticking to a five-point program of personal finances: (1) holding onto Victory Bonds; (2) buying only goods in fair supply and saving money; (3) avoiding black market purchases; (4) keeping up insurance; and (5) building up a savings account. The informality of the name “B of M” nicely contrasted with the more formal ways of Canadian banking up to the 1930s. An elite institution such as Canada’s first bank had to move with the times, to capture the zeitgeist emerging in post-war Canada. As banking focused on broadening its appeal to larger and larger publics, such a transformation was a necessity. “The Bank does not deal in money alone,” one 1946 advertisement reminded Canadians. The new logo also coincided with a transformation in the Bank’s public relations strategy to focus on a

broad appeal to Canadians. “In our day-to-day dealings, our managers and staff are [dealing] with the many human relationships arising out of the financial problems of our customers, both of large and small means, but particularly the latter, who seek assistance from a reliable and trustworthy source.” The new logo in many ways captured that new departure in postwar consumer outreach at the Bank of Montreal. The strategy attracted the public relations community’s commendation: the “Socrates High Award of the Year” for the best bank public relations. “It appears,” the award committee concluded, “that the Bank of Montreal has achieved a lasting scheme of forceful advertising … The Bank of Montreal has pointed the way. Its accomplishments deserve, at the very least, the careful study and consideration of similar institutions.” Its focus on demobilized veterans, for example, was seen not as a “gesture of heartiness which meant nothing to either bank or veteran. It was, on the contrary, a definite bid for the friendship of the generation who will be the leaders of Canadian thought and accomplishment in the near future.” The new post-war logo captured the Bank’s new post-war spirit: its strategy and its vision for a bank ready to extend itself to serve the needs of the post-war Canadian public.

DIAL M FOR MODERNIT Y

The M-Bar, 1967

T

he M-Bar logo was the brainchild of Hans Kleefeld of Stewart & Morrison Ltd, Toronto. Kleefeld was one of Canada’s greatest graphic designers of his day, giving logographic identities to key Canadian

142

Th e BM O Un iv er se

institutions, including Air Canada, Molson, Seagram, and Johnson & Johnson, not to mention the TorontoDominion Bank. The new logo was unveiled with great éclat by Chairman and ceo Arnold Hart in 1967 as “another major development being taken by the ‘new’ Bank of Montreal to advance our image of vitality and service.” The new look was to match the new outlook at the Bank, rendered in “First Bank Blue,” a strong light shade that became the official colour.

The introduction of the M-Bar was accompanied inside the bank with a certain impatience to reposition the Bank to a new, more aggressive, and contemporary posture. The revisions of the Bank Act in 1967 allowed the Bank to enter into the mortgage business. It launched into radio and television advertisements. Hart and his team reorganized management and began a series of transformations inspired by a key report on the Bank’s identity, strategy, and performance by McKinsey, which found the Bank too “stuffy.” Salaries were boosted. Incentive pay was rolled out. New business was actively and aggressively sought. Hart’s push to renew was more than welcomed by the Bank’s staff from coast to coast: Hart quipped that “our people seemed to be just waiting for some new policies” to rekindle the Bank’s innovative spirit of ‘first.’ This bracing spirit of renewal, of a rededication to excellence and innovation was symbolized by announcement of the M-Bar on the Canadian stage. It coincided with the Bank’s 150th anniversary, tying the acknowledgment of the past with the vision of the future. “Within the Bank, as well as to the public eye,” one internal Bank document suggested, “here is the symbol of an organization in which originality is welcome, staffed by people eager to provide the best and broadest service to individuals and to all enterprises regardless of size and degree.” Designer Clair Stewart once said that there were two things that made a corporate logo last: “it has to be designed well, and the company must be absolutely convinced that the design that’s being presented to them is just the right one for them.” In the case of the M-Bar, half a century of continuous and proud use has made it one of the most evocative and well-recognized symbols in Canadian enterprise.

FROM M ANY, ONE

bmo Financial Group’s Unified Brand

I

n June 2002, the Bank of Montreal and its group of companies came under a single, unified brand: bmo Financial Group. The new identifier incorporated several classic and contemporary elements, and the stock ticker symbol of the Bank, “bmo ,” was given prominence. The M-Bar logo was updated with a red roundel background.

This decision was in many ways a practical move by the Bank. The proliferation of companies and activities, products and services across North America required a graphic response that, on the one hand, recognized the diversity and, on the other, emphasized the unity under the aegis of the Bank. At the time, bmo Financial Group was operating more than thirty lines of business, including Harris Bank and bmo Nesbitt Burns, the Bank’s investment arm. As Chairman and Chief Executive Officer F. Anthony Comper remarked at the time, “The new bmo Financial Group identifier tells a unifying story for the bank and all its member companies.” The prefix – bmo – signalled that all the businesses operating under the

Bank’s seal would have the strength, resources, and values of the Bank of Montreal. The new name was the culmination of bmo ’s investments in integrating its many businesses and groups to provide more comprehensive customer service as well as to increase market share. The new logo/identifier was also coupled with an extensive dialogue within the organization to identify its key attributes and to rally around them, linking the new brand with the Bank’s efforts at renewal and transformation to meet both a changing marketplace and evolving customer needs and expectations.

In Hoc Signo

143

bm o Ba nker s a nd the Dre a m of N ation

T

he role of banks and banking in promoting national economic development is not always as straightforward as it might at first seem. The people who have studied such subjects in the North Atlantic world come up with different questions and different answers at different stages of development. For example, some ask whether the growth of commercial banking at the beginnings of the banking system is a result of the process of economic development, or was it a necessary element in the financial infrastructure? In other words, do banks lead or do they follow? This chapter points strongly to the “lead” hypothesis in the case of the Bank of Montreal and, later, the Canadian banking system. As Canada’s first bank, it was able to begin the process of increasing the pool of capital available to prospective borrowers. That capital could then be allocated to prospective borrowers professionally and efficiently. In the lending process, search, information, and transaction costs are all part and

parcel of the symmetry of saving and investing. The information networks and commercial relationships that the Bank established over long distances enabled Canadian capitalists to mobilize capital resources to finance a remarkable range of projects. The scarcity of locally available capital for most of the nineteenth century put an even greater emphasis on representation in the capital markets of the North Atlantic world. The importance of banking institutions such as the Bank of Montreal to the economic development of the country is significant not only for the capital flows it generated but also for the vital networks and relationships it was able to build both in Canada and in the AngloAmerican world in which it sought to develop and prosper. The building of a world-class financial and banking system for Canada is perhaps the greatest contribution to nation building. The nation-building projects highlighted here are representative of the many specific ways that the Bank has been a partner in facilitating and

promoting trade and economic development in Canada. The projects span the nineteenth and twentieth centuries. As one might expect of nation-building projects in a country with vast territories and a massive natural resource endowment, the projects are predominantly in the transportation sector – in the railways and canals that facilitate flows of people and goods, with the greatest coming in the 1880s with the completion of the transcontinental railway. Three are in the utilities sector – three of the greatest projects in the twentieth-century history of Canada: Churchill Falls, James Bay, and development of Alberta’s oil production capacity. Many of these undertakings were the product of the Bank, governments, businesses, and the community working together to realize a vision of an accelerated flow of trade and goods, a vision that could unlock the natural potential of the vast country. To varying degrees, the Bank was a vital player in allowing those visions to be realized.

Its contributions have been made not solely in the realms of capital but also in providing the vision, managerial capacity, financial expertise, and the talents and abilities for which the Bank of Montreal and its managers have become justly famous down the years. Because of the times and the circumstances, of borders and varying possibilities, the “nation”

146

Th e BM O Un iv er se

in nation building for the Bank has generally been north of the 49th parallel: Canada and its regions, its cities and towns, its people. As the Bank’s vision has come to embrace the American Midwest, there too it is pursuing an even greater and deeper presence.

HUM BLE BEGINNINGS

The Lachine Canal, 1821–24

C

anal building in the early nineteenth century was the key public infrastructure project of its day. The liberation of inland navigation was a top economic and trade priority in North America. In the United States, the building of the Erie Canal from Albany to Lake Erie would create a navigable waterway 4 feet deep between the Great Lakes and the Atlantic Ocean via the Hudson River. Canals meant trade and competitive advantage. They did much more than connect up trade flows: they were highways to prosperity and national supremacy. Visions of a canal at Lachine Rapids, just upstream from Montreal, had inspired navigators and traders from the days of the French ancien régime. The dream was to open up trade and exchange with the upper province. It was to remain a dream for decades – well past the British conquest of New France. From the 1790s, Lower Canadian merchants urged its construction. For imperial authorities, the War of 1812 had made the eventual construction of such a canal – and with it, seamless communication with the Upper Canadian frontier – a military priority. However, it was not until 1819 that the colony’s merchant class successfully petitioned the government to allow the formation of “The Company of the Proprietors of the Lachine Canal” with a capitalization of £150,000 divided into £50 shares. The imperial government held shares, as did the colonial government. The project was troubled from the beginning, and the government dissolved the corporation and took over the construction of the entire canal, with a key Bank of Montreal founder, John Richardson, as chairman. The canal was, in his words, “a work of great public importance and expectancy” – and, indeed, had been for decades.

The newly formed Bank of Montreal loans and advances were important to actually getting the longhoped-for project started. The involvement of this four-year-old bank was significant to the project and a considerable undertaking for the Montreal Bank itself. Work began under Richardson’s supervision in July 1821. The canal as originally built was 8.5 miles long, 28 feet in breadth at the bottom and 48 feet at the surface. It had seven locks of cut stone, each 100 feet long, 20 feet wide, and with a 5-foot depth of water. The Lachine Canal was opened in August 1824 and received its first vessels in 1825. The total construction cost of

£109,601, or $440,000, was borne by the government of Lower Canada (with a £10,000 grant from the British government). It was renovated, improved, and expanded in subsequent decades. The Lachine Canal project showed just how much of a struggle a public project could be in a country with few resources, scarce capital, and generally in competition against well-financed and prosperous competitors. It also showed how vital co-operation and collaboration was to attaining any measure of success. This project, like so many of its successors in Canada’s transportation and communications fields, demanded public and private partnership.

b m o B a nker s a nd the D r e a m of N ation

147

A NEW YORK STATE OF M IND

The Champlain and St Lawrence Railway

T

he Champlain and St Lawrence Railroad (c&sl ), commissioned in 1832 and completed in 1836, was Canada’s first railway. And Canada’s first railway, not surprisingly, pointed directly to New York City, underlining the enduring importance for Montreal merchants of continental connections and trade, especially with that rapidly growing metropolis. The new route would cut hours off the journey that they were compelled to travel. This railway project of the 1830s was largely financed by Bank of Montreal director and Montreal merchant John Molson. It is a perfect exemplar of the Bank’s early pragmatic and clear-eyed approach to large projects. The scope of the project was manageable: laying 16 miles of track that would then connect Montreal and New York City via the steamers on Lake Champlain. And it was manageable from a finance perspective. When it came to railway financing, the Bank’s leaders throughout the nineteenth century were tough, knowledgeable skeptics – in retrospect, a far-sighted position to take, since over-enthusiasm for railways, or real estate, or both at the same time, caused the ruin of many a bank. The railway was chartered in 1832 to run from La Prairie to St Johns, Quebec. It opened for traffic with horses in 1836 and with locomotives in 1837. The c&sl also featured British North America’s first locomotive, the Dorchester, built by Robert Stephenson in Newcastle upon Tyne and delivered to Molson’s wharf

148

Th e BM O Un iv er se

in June 1836. The top speed of the locomotive was about 30 miles per hour. The opening festivities of 21 July 1836 were reported in the Montreal Gazette: “The public opening of this important route took place on Thursday last under circumstances of peculiar interest … Among the guests who assembled on board the ‘Princess Victoria’ at about ten thirty a.m. were the Earl of Gosford, Sir Charles Gray, Sir George and Lady Gipp, Mr Elliott secretary of the Commissioners, and several of the Legislature Council and House of Assembly, also, a number of the mercantile body and garrison and many respectable strangers to the number of about three hundred.” The c&sl was in many ways a sensible Canadian project ahead of its time: modest in its reach but serving a distinct and productive purpose.

MONTREAL’S “ VICTORIAN INTERNET ”

The Telegraph

T

he telegraph was the first of the electrical communications technologies that would slowly transform the world’s telecommunications landscape. If it wasn’t quite the “Victorian Internet” envisioned by contemporary author Tom Standage, the telegraph heralded a remarkable transformation for the coordination and organization of business and government. The technology was in development for decades in the North Atlantic world. In 1844, Samuel Morse organized a company to erect a telegraph line linking New York City, Baltimore, and Washington. The information and

control processing revolution ushered in by the electric telegraph would initiate a long-wave transformation in the way people interacted with each other. In the first generation, however, it is most useful to think of the telegraph as a tool of business communication. The transformational possibilities for banking – and Canadian colonial banking in particular – were evident from the outset. Until the 1840s, top-speed communications across the imposing geography – even of southern Ontario and Quebec – were limited first to the fastest horse, then increasingly to primitive locomotives on developing networks of railways. The telegraph would usher in a new, more connected era. The Bank’s leaders in the 1840s certainly believed that, granting a £2,000 loan to the Montreal [Magnetic] Telegraph Company. In fact, without private capital, the project would not have seen the light of day. The Montreal Telegraph Company was formed December 1846, with a capitalization of £12,500, for

the purpose of connecting Toronto to Montreal by electro-magnetic telegraph. Its first superintendent was O.S. Wood, the first pupil of inventor Samuel Morse. By mid-October 1847, the telegraph would cover Quebec City to London, Canada West. By the end of 1847, the company had completed 540 miles of lines, established nine offices, and transmitted 33,000 messages. The following year, a line was completed to the United States. Business was prosperous enough for the Montreal company that in 1852 it bought out the Toronto, Hamilton, Niagara and St Catharines Electro-Magnetic Telegraph Company, Canada’s first telegraph company. For the first time, communication and transportation could be separated. Breakdowns and interruptions were frequent; the ungalvanized iron wires sometimes broke from the weight of flocks of wild pigeons roosting on them. Moreover, short-circuits were common in wet weather. As the network grew and the technology improved, the full power and potential of the telegraph began to show itself. It changed, forever, social and commercial relationships. In the memorable words of James Carey, it “allowed symbols to move independently and faster than transportation.” Merchant-to-merchant relationships became buyer- and-seller relationships. The vastness of geography was reduced. Communities began to be tied to regions and nations in terms of ideas, language, and style. Communication with distant places, ideologies, and ideas became not only possible but also accessible. In a metaphoric sense, the telegraph allowed many Canadian communities to join the nineteenth century. The telegraph also revolutionized business, spawning the first great industrial monopoly – Western Union – and founding the electrical goods industry. The challenging complexity of the telegraph as a network, a system, together with the railroad, led to modern management techniques. Steamboat, railroad, telegraph: three nineteenthcentury revolutions in transportation and communication. In different ways, the Bank of Montreal both shaped and was shaped by all three.

b m o B a nker s a nd the D r e a m of N ation

149

A M ARE USQUE AD M ARE

The Canadian Pacific Railway

T

he national project of binding together the vast transcontinental expanse of the new Dominion of Canada from sea to sea by rail was one of the most ambitious and risky in the history of the country. On 21 October 1880, the Canadian Pacific Railway Company (cpr ) signed a contract with the federal government to build a railway across the Canadian prairies and to the Pacific Coast. It was to be completed by 1890 to fulfill a condition of British Columbia

150

Th e BM O Un iv er se

entering Confederation: connect us to the rest of the country by rail. This archetypal nation-building project was highly controversial and derided in the press as a useless enterprise, an “out-and-out impossibility” from an engineering perspective, and sure to be one of the great blunders of all time. In payment, the cpr was to receive $25 million in cash, 25 million acres of right-ofway, $37 million for surveying costs, and a twenty-year monopoly over transportation to the United States. From every angle – political, economic, financing, capital, engineering – the project of Prime Minister Sir John A. Macdonald, J.J. Hill, George Stephen (president of the Bank of Montreal), Donald Smith (a later Bank president), and other key players would be visionary at best, delusional at worst. One London observer warned

in 1881 that “Canada is one of the most over-rated Colonies we have, but it is heartily loyal and makes its loyalty pay … as for the country as a whole it is poor and crushed with debt. The Supreme Government owes about thirty-five million pounds altogether, and every province has its separate debt, as also almost every collection of shanties calling itself a ‘city.’ The Canadians spend money and we provide it. That has been the arrangement hitherto, and it has worked out splendidly – for the Canadians – too well for them to try another scheme with the Canadian Pacific, which they must know is never likely to pay a single red cent of interest on the money that may be sunk in it.” In spite of the naysayers, in November 1885, the cpr succeeded in linking tidewater to tidewater across the Dominion of Canada. The unprecedented complexity of the project – and its controversial nature – called for the full capabilities of a young country, its institutions, and its sharpest managers. The project was managed by W.C. Van Horne, whose workers sought to overcome some of the greatest engineering challenges of the day through the Canadian Shield and the Rocky Mountains. The project was driven by business-politicians, railway promoters, and Montreal capitalists. The Bank of Montreal not only provided Canadian financing for the construction of the railway but was also deeply involved in the broader complexities of raising capital both in the United States and in the United Kingdom, from where most of the capital would, by necessity, flow. In addition to capital resources, George Stephen left his duties as president of the Bank of Montreal in 1880 to take on the presidency of the Canadian Pacific Railway. The last spike of the railway was driven in on 7 November 1885 at Craighellachie, in Eagle Pass, British Columbia, by Lord Strathcona, producing perhaps the most iconic photograph in the history of Canadian enterprise. The completion of Canada’s transcontinental railroad ushered in a wealth of new possibilities in trade, tourism, immigration, and economic development that were simply impossible without that vital nineteenth-century connection from sea to sea.

Ward M , Montreal General Hospital, Montreal, Quebec, 1910. Photograph by Wm. Notman & Son

Montreal General Hospital and the Development of Civil Society

T

he destinies of the Bank of Montreal and the Montreal General Hospital were intertwined from the beginning of the hospital in 1821. Most of the hospital’s founding managers and governors – Armour, Garden, Gates, Gerrard, Leslie, Moffat, Molson, Richardson, Turner, and others – were intimately involved in the Bank’s activities. John Richardson, however, stands out as ‘father of the institution.’ He was

its first president; he played a leading role in supplying the necessary land as well as taking on financial debt on behalf of the struggling hospital. The establishment of the hospital took place in the context of a growing health care crisis in Montreal. The Hôtel-Dieu de Montréal was established in the mid-seventeenth century, but by the 1820s, it could not hope to accommodate the growing population with thirty beds. The city divided between those who wished to have a new hospital and those who wanted to enlarge the old one. The battle became quite personal, and a duel ensued between Dr Caldwell (pro Montreal General) and Mr O’Sullivan (a proponent of the Hôtel-Dieu). Both men were injured but survived. The contentious nature of the plan meant that official support would not be forthcoming. Therefore, money was raised by public subscription. In a full Masonic ceremony, the cornerstone of the new hospital was laid on 5 June 1821 by the officials of the three Masonic Lodges of the city – St Paul’s, Union, and Wellington Persevering – and the Building Committee. The permanent Montreal General Hospital opened its doors in May 1822. In 1823, Dr Caldwell and his colleagues established the Montreal Medical Institution – the forerunner of the Faculty of Medicine at McGill University. The Montreal General Hospital has the distinction of receiving the first corporate donation offered by the Bank – £100 – thus beginning a long and close association with this venerable Montreal institution. This early ‘nation-building project’ was modest by contemporary standards, but the contribution of the citizen-bankers of the Bank of Montreal – with time, talent, organizational capabilities, and both personal and corporate money – was consistent with the desire to build and develop civil society and its institutions. Health care and hospitals in the nineteenth century were only starting to take their rightful place in the urban life of the country, and the Bank and its people were full participants from the outset.

b m o B a nker s a nd the D r e a m of N ation

151

OVERCOM ING THE NIAGAR A BARRIER

The Second Welland Canal, 1850

T

he Welland Canal was first opened in 1829 after five years of work cutting through the Niagara Escarpment. The objective was simple: connect Lake Erie and Lake Ontario and offer some competition to the Erie Canal. Looking at a map, it is clear why nineteenth-century Canadians were particularly

152

Th e BM O Un iv er se

interested in Welland: it provided one of the main links in the chain of water transportation extending from Thunder Bay (then Fort William and Port Arthur) to the Atlantic Ocean – 2,200 miles – later nicknamed the “Grain Lane to Europe.” Canal construction was shorthand for expanding markets and increased trade, not to mention naval security. For Ontario, canals also meant reducing its dependence on American transport routes and tariffs to get produce and goods to Montreal. One enthusiastic observer suggested that the Welland Canal was “the lung of Canada, carrying commerce into our arteries and remote veins, expelling our goods, our wheat, our minerals.” Another observer suggested that Lake Ontario, locked in with rapids at either end, “has been unlocked by triumphs of engineering.” In 1841, the newly minted United Province of Canada took over the ownership and management of the canal as part of a broader strategy to renovate the Great Lakes and St Lawrence system of navigable waterways. Financing construction was the major problem, given that the colonial governments were practically bankrupt or unable to mount the project. But the Second Welland Canal project was initiated, backed by a London-based loan of £1.5 million and guaranteed by the imperial government. The Bank of Montreal’s role was in the active provision of advances to contractors pending the collection of claims, thus ensuring the project’s completion. The enlarged, deepened, and updated Second Welland Canal was opened for traffic in 1845. It enabled sailing vessels of 750-ton cargo capacity to pass from lake to lake. Subsequent improvements were made in 1887 and in 1933, each time to facilitate larger vessels. The Welland Canal was part of a chain of first-class canals that provided a complete system of St Lawrence waterways linking Lake Erie to the Atlantic Ocean. The mobilization of the massive public and private resources required to complete this task was, in many ways, a clear, unambiguous vote of confidence in the future of the region and in Canada as an emerging nation.

HARNESSING THE R AW POWER OF NATURE

brinco and the Churchill Falls Hydroelectric Project

O

n 17 July 1967, the massive $800 million British Newfoundland Corporation (brinco ) hydroelectric project was inaugurated in Churchill Falls, Labrador. It was the largest hydroelectric power development of its kind on the continent, set to produce 34 billion kilowatt hours of energy annually – enough, it was said at the time, to supply 10 million households. Once again, the Bank of Montreal was the chief project

financier to brinco , heading up a consortium of Canadian banks. The funding for Churchill Falls was $150 million. Like many previous Bank of Montreal projects in this chapter, the cash was guaranteed for construction and development until the project started earning enough to pay its way. It was cited as the “biggest bank financing venture in Canadian history” to that point. The Churchill Falls development was a highly complex project with more than its fair share of challenges. Commercial and political arrangements delayed it by two years, until May 1969. The ceo ’s sudden death in the middle of this turbulent time and a railway strike had a dramatic impact on timetables and costs. In November 1969, the president of the company and five others key to the management of the project died in a plane crash in Labrador. That same year, new taxation regimes and a floating Canadian dollar added multiple millions to the project costs. The management overcame the difficulties, and by December 1971, the first two units in the generating facility were spinning. On 1 May 1972, commercial service began as scheduled. One of the great achievements of this megaproject was the taking on of large financial commitments spanning a long period of time. As W.D. Mulholland suggested in the 1970s, this can be a “risky business and there are a number of chilling examples of this.” He spoke from rather personal experience, since he was compelled to take over the leadership of brinco after the Labrador plane crash. At the same time, he saw – as did the Bank – that it was important that financial institutions develop the techniques for carrying out these kinds of projects successfully. Churchill Falls was a great example of the Bank’s leadership in responding and adapting to the banking opportunities in the era of the financing of Canada’s great natural-resource megaprojects.

b m o B a nker s a nd the D r e a m of N ation

153

Hydro-Québec James Bay Development

I

n the late 1970s, the Bank once again put together a landmark financing deal as the head of a seven-bank consortium to underwrite the biggest corporate loan in Canadian history: $1.25 billion credit with HydroQuébec for the development of James Bay (Phase i ). Phase ii would come a decade later. The James Bay hydroelectric project was a monumental undertaking. Phase i cost $13.7 billion and diverted the course of three rivers to reservoirs on La Grande Rivière, increasing the flow from 449,000 to 872,000 gallons per second. The spillway was three times the height of Niagara Falls. The development boasts North America’s largest power-generating site: it can crank out 7,722 megawatts of electric power annually! In all, four power-generating sites were established between 1978 and 1984. The collaboration of six other Canadian banks as well as twenty-two foreign banks was coordinated by the Bank of Montreal as lead manager. Here again, it was W.D. Mulholland who would lead the charge, noting at the time that the Bank’s role “demonstrate[s] our ability to compete and succeed in major financings against the toughest competition.” The James Bay development, according to press accounts, was “the biggest credit facility ever afforded a private, public or para-public company” and “undoubtedly one of the great success stories of 1977–78,” not to mention “a good deal for both the borrower and lenders.” The financial specialization in energy projects grew in tandem with Canada’s increasing international specialization in the sector.

154

Th e BM O Un iv er se

A Leading Continental Banker to the Oil and Gas Industry

T

he Bank has been a partner in the development of the Canadian oil and gas industry through its genesis and development. In the process, it has become one of the leading banks in the sector in both Canada and the United States. The importance of the oil and gas sector to Canada’s twentieth-century economic history and prosperity, especially that of Western Canada, cannot be overstated. But it is also complicated. The industry is characterized by high capital investment, cyclical growth, and price volatility. Financial institutions in the field need to have specialist knowledge and capabilities to manage the risks associated with oil and gas development and to exploit the most attractive financial opportunities. The Bank’s Oil and Gas Department was established in 1962 and quickly established a strong record in translating expertise in the industry and banking to advantage. Project financing for the sector has included some of the major deals of the 1970s. By the 1980s, the Bank ranked in the global top ten for syndicated loans to the oil industry – the only Canadian bank in that select group. Some of the Bank’s key future executives would pass through this department on their way to leadership positions in the Bank. One of the largest projects the Bank has been associated with is the Alberta oil sands – the world’s third-largest proven oil reserves after the Kingdom of Saudi Arabia and Venezuela – with an estimated 1.84 trillion barrels of crude bitumen, which translates into 168.7 billion barrels of oil. The Athabasca, Cold Lake, and Peace River areas of northern Alberta set the stage for this massive group of reserves. The development of what has been called the world’s “first oil mine” was first opened in 1967 by Sun Oil (Suncor), followed by Syncrude in 1978.

M a rkets of the M ind

bmo Advertising and the Art of Persuasion

T

he emergence and development of advertising in the industrialized world is a fascinating and complex story. As we see with the Bank of Montreal, the field has grown and developed with the rise of consumer culture. These developments have been shaped by needs and necessity: new and expanding markets need to be reached and persuaded. Where there are markets, there is also competition: advertising and promotion thus becomes a vital element in ensuring that an institution’s efforts are highlighted, recognized, and appreciated. Advertising also seeks to connect, persuade, and motivate. It is, in fascinating ways, a type of public discussion. It speaks, of course, to corporate strategy, performance, and positioning as you would expect it to. It also speaks to our contemporary aspirations, what we value, how a generation of advertising people believe is the best way of connecting with their customers and the

broader market – and in that regard, our assumptions about the way the world works, and how to create and perpetuate that bond. At one time confined to print, the emergence of first radio then television broadcasting, and then of course online marketing, exponentially raised the reach and elevated the importance of advertising. The Bank, of course, has advertised since the beginning. For most of the nineteenth century, that consisted of newspaper advertisements showing annual report statistics and hours of operation – and frequent references to the Bank of Montreal being Canada’s first bank. In the 1920s, the Bank established an advertising department that prepared advertisements for newspapers, magazines, and the like, “but is concerned with many forms of publicity in connection with the relations between the Bank and the community.” The publicity focused on a wide range of subjects – business

summaries, appointments, crop situations. Publications in the 1930s like “Canada To-Day” and “Your Bank and How You May Use It” were meant to promote knowledge of the Bank and to establish “friendly relations with possible customers, a new generation of which is constantly arising,” in the words of F.W. Munro Brown, head of the Bank’s advertising in the 1930s. In that decade, for example, strength, stability, and “prestige copy” dominated, to ensure that people remained confident in the Bank during the Depression. The “services” copy focused on the products, services, and methods of doing business. “Advertisements must have about them,” one official suggested in 1931, “a certain distinctive atmosphere, and this is accomplished not only in the formulation of the general advertising plan and tenor of the text, but in the physical appearance of each advertisement.”

By the end of the Second World War, the Bank won the “Socrates High Award of the Year” for their advertising related to the battle against inflation and “the Bank’s role in building the postwar world.” The Bank was hailed as “the leader in bank advertising – and the executive responsible, the most valuable member to his field.” The award citation suggested that “Banking is, after all, dependent on the good will and respect of intelligent people. Bank of Montreal copy could never be called ‘cute.’ Nor, on the other hand, is it ever ‘stuffy.’” In the last half-century or more, the advertising world has become a terrain of institutional mammoths, large agencies, and boutique shops. But a perspective from the 1930s still holds: “Try to look at the Bank’s advertising, in whatever form it may appear, as designed to help you in promoting the business of your branch … to show him the advantages of banking with our Institution and, if he is

158

Th e BM O Un iv er se

not already a customer, to put him in a receptive mood so that when he comes in contact with the staff the work of securing him as a customer is half done … [making advertising] live up to the Bank’s service and to present that service in its true form to the public.” One advertising award citation back in the 1940s suggested that “the effective balance of dignity and alertness … typify Bank of Montreal advertising” and that the Bank “has pointed the way.” This chapter highlights some of the more interesting or memorable advertising campaigns in the Bank’s history. Its gaze is mainly directed to the last couple of generations of the Bank of Montreal campaigns – the slogans and approaches that deserve particular mention. Undoubtedly, this short list does not quite do justice to the advertising history of the Bank. Rather, it will provide an enjoyable tour through the past to whet the appetite.

M AKING IT PERSONAL

My Bank Emerges, 1940s

T

he simple yet enduringly effective “My Bank” formulation was introduced after the Second World War. The tagline then became over the following several years: “My Bank to One Million Canadians” – then two million, then in short order, three million Canadians. The thrust of advertising to embrace the mass market had been coming for some time, but changes in Canadian banking in the 1930s and 1940s pointed banks firmly in the direction of broadening their appeal to a much broader market of depositors. After 1945, Canadian banking crossed a clear line and began, step by step, to throw off the vestiges of its nineteenth-century past – in its messaging, architectural and interior design, advertising, publicity, and publications, not to mention its approach to markets. Strong economic growth and the steadily growing incomes and purchasing power of the parents of the baby boom generation began to change many things, and not just banking and advertising. The My Bank taglines were used for two decades and considered “landmarks in the personalization of banking institutions’ services presented meaningfully to the public.”

Some quick statistics will offer an idea of the change. In 1947, the Bank operated 521 branches; by 1957: 725; and by 1967: 1,033. Deposits in 1947: $1.7 billion; 1957: $2.6 billion; and 1967: $5.6 billion. A similar story can be told with loans. The basis for banking was broadening out. A labour, societal, and consumer revolution is hidden in those simple post-war numbers. My Bank emerged from that post-war sense of the great possibilities that Canada had in store. Fast-forward to 1999: newly appointed ceo Tony Comper wrote in the annual report that “those bus ads [with the My Bank slogan] from the sixties kept pushing back into my consciousness, reminding me of what really counts in building a bank for our time.” Accordingly, Comper briefly resurrected the tagline for a couple of campaigns of the era. The afterlife of My Bank and its enduring appeal to successive generations is a testament to the powerful, compelling simplicity of the message.

M a r ke ts of the M ind

159

FIRST MOVER ADVANTAGE

Canada’s First Bank, 1950

“I

n order to form a link between the Bank’s premises and its advertising,” a Bank of Montreal memorandum suggested in September 1950, “it has been decided to introduce the slogan ‘Canada’s First Bank’ in our window and hanging glass signs.” So began the official introduction of an important and enduring advertising slogan. The phrase recalled the Bank’s lasting historical importance to young Canada, before it was even a country. Moreover, it had all the right attributes, projecting as it did the strength, stability, and solidity of an institution that in many ways defined Canadian banking. Some runners-up that were road-tested but never used for long included “Canada’s First-Established Bank” and “Canada’s Oldest Bank.” One can see why these were not used for long! The tagline was accompanied by another historical reminder: “Founded in 1817,” a subtle change from “Established in 1817.” It was made to conform with the

160

Th e BM O Un iv er se

Bank’s post-war advertising and was seen to be a gentler and more sophisticated rendering of the idea. The slogan proved popular and durable – so much so that, when the Bank’s famous new symbol – the M-Bar – was introduced in 1967 and the entire range of identification of the Bank was standardized, the slogan was prominently incorporated in the new arrangements. As Elliot J. Morrison suggested in a memorandum on the subject of corporate image in 1966, the Canada’s First Bank slogan carried with it an important message about the identity of the Bank itself. It was part and parcel of the Bank’s abandonment of the colour green as its principal house colour, substituting a lively, vibrant blue, which was immediately referred to as “First Bank Blue.” (For more information on the Bank’s logos, see In Hoc Signo, pages 137–43.) While other slogans and taglines waxed and waned with time, Canada’s First Bank persisted. One executive suggested that since it was the Bank’s first claim to fame, it would also serve as its “most effective tool in reinforcing its unique position in the country … a statement of fact and pride! First historically and first in aspiration to serve Canadians everywhere with the most efficient banking services.”

First Canadian Bank, 1969

B

y the end of the 1960s, Canada’s First Bank was morphing slightly into “First Canadian Bank” or simply First Bank – the same idea, but offering wider possibilities for the Bank if it wanted to change its proper name. As early as 1969, Bank executives were contemplating a possible name change, particularly in markets in the United States and areas of anglophone Canada. This was part of a larger trend in advertising to de-emphasize territoriality and underline other features. This industry-wide trend also saw the shortening of “Bank of Montreal” to “B of M” or “BM,” and then eventually, of course, to bmo . The name of the Bank was never changed, but the tagline stuck around in the 1970s, memorialized by the fact that the Bank’s Toronto headquarters are in First Canadian Place. Throughout the 1970s, the appellation First Canadian Bank was used in some places but not consistently, it would appear. It surfaced, for example, on the covers of the Bank’s annual reports from 1971 to 1977. In 1978, a return to the Bank’s coat of arms put an end to appearance of the phrase on annual reports. Generally speaking, First Canadian Bank appeared to be popular until the early 1980s. The linkages to both time (the first) and territory (Canadian) were gradually being replaced by the memorable symbol and acronym that is universally recognizable today.

M a r ke ts of the M ind

161

Let’s Talk, 1971

“L

et’s Talk” was introduced in the early 1970s as an invitation to discuss the Bank’s products and services – mortgages, loans, travel services, and the like. It was used alongside the M-Bar and the First Canadian Bank identifications. The executive responsible suggested that this advertising campaign was “a statement of our feeling as well as a reflection of the Bank’s customer philosophy. The old adage that Talk Is Cheap is one of the great fallacies of all times. It may be the most valuable commodity we have in our possession.” The intention of the campaign was to find new ways to open up to the needs, wants, and aspirations of the Bank of Montreal customer. In this era, the Bank’s branches were given a certain level of autonomy over the choice of message, displays, and decorations in-branch. However, standardization and control over advertising efforts began to become more systematic in this period. The radio advertising campaign featured Leslie Nielsen, a popular actor and comedian of the day, doing the voiceovers. By 1980, the Let’s Talk tagline quietly faded from prominence, having served its purpose and having emphasized the importance of listening to the customer.

SETTING BMO APART

Doing More for You, 1985

I

n April 1985, the Bank launched a nationwide “unique customer service advertising campaign” to unveil a new slogan and a new emphasis: “Doing More for You.” Developed by Carder Gray Advertising of Toronto and, in French, by Publicité Martin Inc. of Montreal, the slogan’s introduction was the product of two years of research involving surveys of customers and Bank staff to identify how the Bank could evolve with the people it served. What did “doing more” mean? To the Bank of the 1980s, it meant more and more of a focus on five customer service needs: (1) to be treated with courtesy and understanding; (2) to be served promptly and efficiently; 3) to get reliable information on personal finances; (4) to feel confident in the Bank’s professionalism – the way it looks and the way it works; and finally, (5) to know the manager is accessible and willing to help. The new slogan was accompanied by a massive training program, guidebooks, and training modules and workbooks. Videocassette players were delivered to branches to permit staff to use the materials. The training also came with an accreditation: the Customer Service Certificate of Achievement. The slogan was emblematic of a major transformation in the way the Bank wished to serve its customers, and in the words of the executive responsible, Matthew W. Barrett, it represented the “beginning of a long-term effort to emphasize a strength we take pride in.” The April 1985 launch involved two 30-second television commercials aired in markets across the country, followed up by magazine advertisements and other print media.

M a r ke ts of the M ind

163

We’re Paying Attention, 1991

I

n May 1991, the Bank launched a new image campaign – one that had emerged from the landmark Corporate Strategic Plan (see The Written World of bmo, page 37). Therefore, the slogan “We’re Paying Attention” represented an important public declaration of the direction of the Bank under Matthew W. Barrett and F. Anthony Comper. In some ways it sought to break away from the past, signalling that “Canada’s oldest financial institution” would take “a radical departure from conventional bank advertising. The theme of paying attention (and for the Francophone market “Au delà de l’argent, il y des gens”) was developed after a year of intensive research that polled Bank employees, customers, and the public. The “customer of the 1990s” demanded more of everything, especially superior customer service. The focus on customer service was in a sense carried over from the 1980s, but there was an urgency and a fresh emphasis on broadening and deepening that commitment in light of the major new strategic direction the Bank was taking in the early 1990s. “Excellence in customer service is not something new at Bank of Montreal,” Tony Comper wrote in April 1991. “But for the first time we are going to talk openly about it to Canadians. Our new image campaign will stand out from any other bank advertising in the country, and will place us first in our customers’ minds.” The creative element of the new campaign and slogan was executed by the Bank’s two advertising agencies, Vickers & Benson and Publicité Martin. Three initial English advertisements focused on three themes. The first was “Vision” – to introduce the world to the Bank’s commitment to change for the better and its promise of bringing service back to banking. The second element was “Employees,” featuring Bank of Montreal employees discussing their increased participation within the new strategy, as well as their

164

Th e BM O Un iv er se

individual approaches to superior customer service. The third element, “Customers,” focused on customers sharing their views on what set Bank of Montreal apart from and above other financial institutions. The bracing freshness of the approach struck a chord with both customers and employees alike: “Banking is perceived as a very large and sometimes faceless

operation,” one voiceover in a commercial suggested, “That’s what we’ve got to change … I think banking’s a customer business, a people business.” And another: “We want to walk around with pride, and we’re starting to do that.” That, in essence, is what the Bank was paying attention to: their customers, their employers, and the increasingly personalized nature of banking.

It Is Possible, 1994

T

hree years after We’re Paying Attention came the related theme of possibility. “It Is Possible” was launched in May 1994 in twenty-eight regional centres across Canada, to ensure that the national campaign was also a local community campaign. It was accompanied with a public launch of The Possibility Network, which aspired to being more than a marketing initiative: to telegraph clear messages of hope and

confidence in the sometimes-challenging economic climate of the early 1990s. The new slogan was accompanied by a “no-charge planning” service for customers. “The new program will involve a free consulting service for customers and non-customers alike, provided by panels of people across the country.” The Bank would then formulate a personalized package of information about how a panel worked through similar challenges

to the ones presented by the client. The extraordinary initiative underlined the theme of how the Bank could unlock both individual and community possibility. The campaign featured stark, surrealistic settings – a dystopian picture if ever there was one – with a prosecutor taunting and cross-examining a caged man on trial about his faith in the future. The “defendant” testifies that he can indeed pay off his mortgage, cover the cost of his children’s education, and have a winter vacation in the sun. That, in essence, is what is possible: financial freedom, and especially faith in the future. The campaign was an instant hit for its boldness and willingness to break the banking mould. To an unusual degree, the slogan seemed to capture the élan of the Bank of the 1990s, and its willingness to strike out in new directions. The massive press coverage was a testament to its success: inside and outside the Bank, people hailed the campaign as a “marked new way for doing business.” The It Is Possible campaign won Matthew Barrett, chairman and ceo , the “Sales and Marketing Executive of the Year” award for 1995. In typical Barrett style, he began his acceptance speech by noting that it took an “unusual amount of courage, if not foolhardiness, for a selection committee to pick a banker for any marketing award, let alone such a prestigious one. Talk about flying in the face of conventional wisdom!” Barrett explained that this effective marketing was successful because it was “consonant with the prevailing competitive structure and environment.” His predecessors, he argued, were also effective marketers with approaches appropriate for their era that, “if followed today, would bankrupt the contemporary bank in no time at all. So, as we applaud past laurels, let us not rest on them. These days in the banking business if you snooze, you lose.” For Barrett and the Bank of that era, marketing was not just part of the corporate strategic plan: it was the strategic plan. This campaign and the previous one were part of a thorough transformation of the Bank’s marketing philosophy to one deeply attuned to the pulse of the customer.

M a r ke ts of the M ind

165

Making Money Make Sense, 2008

166

Th e BM O Un iv er se

T

he “Making Money Make Sense” campaign was produced in 2008, when the Bank, under the leadership of William A. Downe, was engaged in effecting a radical transformation in the minds of customers. As Downe explained, “it led us to a series of insights that we ultimately were able to capture in a single line: Making money make sense.” The campaign was at least in part inspired by the Bank’s Quebec market brand promise: “Ça a du sens. Profitez.” The thrust into new markets, and the insights so generated, gave a deeper meaning and expression to that basic message of giving customers confidence to make the kinds of decisions they needed to make for their futures. The campaign was “partly about the words, but more importantly it was about the feelings of affection and loyalty that we were trying to evoke by tapping into everyday life,” Downe suggested in 2013. The search for a crystallizing, unifying phrase – one that captures strategic vision of the Bank, inspires employees, and connects to the needs and aspirations of existing and prospective customers – is never easy. In many ways, the 2008 slogan, like the taglines before it, captured the zeitgeist of the millennium’s first decade – at a time when money, as well as capital, and its system manifestly made less sense than it had for a long time. The global financial crisis was the worst since the Great Depression. Canada may have felt it markedly less because of the stability of its banks, but clearly it was a time when clarity, sense, and insight of the kind offered by seasoned bankers was in great need. For many, banking and investing are of such intimidating complexity that clear sightlines and greater understanding become priorities. The aspiration was to have bmo “offer simple answers to the financial challenges and decisions faced by individuals and businesses … by removing confusion and complexity from the world of money.”

We’re Here to Help, 2014

T

here is a narrative or thematic arc that unites all of the taglines of the last three decades: the emerging supremacy of the customer and the customer experience. Each era has defined it somewhat differently, but there is a clear, bright line that brings together the four campaigns. The spirits of those different ages demanded different areas of focus touching on the progressive stages of a relationship – understanding, thinking about possibilities, making things clear and simple. The current tagline – “We’re Here to Help” – therefore, has a long pedigree. This current simple but powerful tagline can claim a dual heredity: for years, Harris Bank in Chicago used it as an expression of its regional brand; at the same time, it was seen as a natural development of the Canadian bmo brand. The alignment was natural – and timely – as Canadian and US brands started to move closer to the expression of a single bank under the bmo banner. The new tagline put bmo ’s people at the centre of the bank. In the words of ceo Bill Downe: “It implicitly acknowledges that people’s financial lives may be imperfect and sometimes challenging, and in the same moment it reassures them that we’re uniquely qualified to provide the solutions they’re looking for.” The focus now was on the personal – and bringing the human touch to the business of banking. “Human, Intuitive, One Bank – these aren’t words that will ever appear in an ad,” Downe announced in October 2014. “But they’ll guide us as we build our brand from this point forward.” The campaign was a creation of y&r , the Bank’s creative agency of record. Here again, there are continuities with the heavy focus on financial guidance and

customer service. For the first time, however, the “focus and brand promise” was meant to appeal to consumers across North America – including bmo ’s 2 million US customers with 600 branches across eight states. The strategy remained the same, but the expression was different. The evolution of taglines and campaigns represent a relentless quest to maintain that precious alignment

between what the Bank aspires to do and what customers perceive it stands for. In the words of Joanna Rotenberg, bmo ’s then-chief marketing officer, “At the end of the day, we know if we are successful if we bring what customers love about us to the rest of the market in a way that’s relatable, understandable and gets at the heart of financial decisions people are making, but also has a little bit of fun with it.”

M a r ke ts of the M ind

167

On the Pl aying Fields of North A m eric a

Sponsorships

F

rom the days of the first Olympics in classical Greece, patronage of the games and community activities has been an important element in the success and popularity of the form. Sponsorship could take many forms, from the support of an individual athlete to groups and teams. Fast-forward to more modern times and one sees how essential sponsorship was for the revival of contemporary games. For financial institutions, sponsorship decisions can be complex – decisions often overshadowed by the glamour and excitement of the sport. The questions focus not only on marketing and considerations of brand but also the proper role of the institution as a supporter of city and region. Not all customers are fans, and not all fans are customers. But sponsorship can also be an effective way of getting noticed in a high visibility environment. It is also where a lot of current and future customers gather, so it’s also a way to reach

those customers. The encouragement of individual athletes, teams, and communities in their aspirations are also important considerations. The support institutions like Bank of Montreal offer are also acknowledgments of the importance of the play element in culture. And a sporting spirit. For bmo , the sponsorship of sport is, of course, all of those things and more. The Bank’s support of major league teams extends across the playing fields of North America. Its supporting role has evolved over time, as new sports and new forms of organization have sprung up. In the advent of television broadcasting of sport in the last generation, sport has become a massive outlet for markets and marketing, for entertainment and reputation-making, for recognition and brand association. It is exactly the kind of place you would expect a leading bank to be represented in the contemporary era. The support of a wide variety

of sporting activities is a way to reach the Bank’s customers where they live and play, to strengthen the bond of identification and affiliation. The inspiration is not just for customers: the people of the Bank are also inspired by their connections to the teams they support and the individuals they admire. Like everything the Bank does, the decisions it takes on sponsorships must meet the many high standards that it sets for itself in how, where, and why it spends the institution’s money on activities in the community. For any fan inside or outside the Bank, the foregoing explanations about sponsorship of sports clearly lack something. They lack something because the sporting event is simply not experienced as other forms of entertainment. It is much more visceral and connected to the competitive and communal instinct of the individual. To varying degrees, sport is a national language. It remains

an arena, for example, where excellence is clearly and unambiguously celebrated. For all its commercialism, it is also where the play instinct is front and centre. The artistry, the drama, the excitement of competitive sport, the respect for limits, the longing for perfection, the impulse of freedom: this is what author Michael Novak once credited with the joy of sport. In few other activities does one find such a powerful communal feeling as at “the game.” It can, therefore, be no surprise that a bank so involved in its community will be found sponsoring, participating, and wholeheartedly engaging in the games of our contemporary world.

170

Th e BM O Un iv er se

TOP SHELF

The Chicago Blackhawks

T

he Chicago Blackhawks hockey team was founded by Major Frederic McLaughlin, who paid the $12,000 entry fee to become part of the National Hockey League on 25 September 1926. In their first game, played on 17 November 1926, they beat the Toronto St Pats 4–1. And thus began the history of one of the legendary teams of hockey. The connection to, and the rivalry with, the Toronto and Montreal teams born in that first season continues to burn brightly into the twenty-first century. bmo’s sponsorship of the Chicago Blackhawks of the National Hockey League began in 2007. The Bank’s partnership with the Blackhawks has seen the team win the Stanley Cup three times – in 2010, 2013, and 2015. While there is not a cause-and-effect relationship between partnership and victory, the benefits that accrue to each are significant, on and off the ice. The bmo -Blackhawks sponsorship has been considered a key part of the Bank’s overall efforts to support Chicago’s leading organizations. The fact that the Blackhawks win frequently and at the right time has been a stroke of good fortune. bmo ’s relationship with the Blackhawks began as the team sought to revitalize both its brand and its image, thus providing an ideal fit for both Bank and hockey team.

On the Pl aying Fields of North A m er ic a

171

NOTHING BUT NET

The Chicago Bulls

T

he Chicago Bulls of the National Basketball Association (nba ) were established on 16 January 1966. Their rise to prominence in the game, especially in the 1980s and 1990s, transformed the team into one of the most powerful sports dynasties in America. Players such as Joakim Noah, Michael Jordan, Scottie Pippen, and Dennis Rodman have not only been stars of the game but they also transcended their sport to become household names. Their on-court performance, popularity, and deep roots in Chicago have made the Bulls organization one of the most valuable and powerful franchises in the nba , estimated at $2.3 billion in 2015. This is not only a Chicago brand: it is a brand with a global reach. bmo Harris’s sponsorship of the Bulls began in 2007 when it became the Bulls’ “Official Bank.” The relationship represented the largest banking partnership in franchise history. Since then, it has become one of the best-known and recognized relationships in Illinois. The Bank’s close engagement with the Bulls’ organization has created a partnership that many say extends far beyond contractual elements. The chemistry between the two organizations, the alignment of goals and objectives, and their mutual embrace of community has made the bmo Harris–Chicago Bulls sponsorship one of the most effective relationships in the Bank’s portfolio. In 2015, Bank of Montreal became the official bank of the National Basketball Association in Canada.

172

Th e BM O Un iv er se

#WETHENORTH

The Toronto Raptors

O

n 3 November 1995, the Toronto Raptors played their first home-opener in the National Basketball Association. Toronto had not had a major-league basketball franchise since the short-lived Toronto Huskies in 1946. A half-century later, Raptors founder John Bitove and partners succeeded in having the game return to Toronto. The Toronto franchise was the first granted outside the borders of the United States. The team’s name was chosen from among 2,000 entries in a competition that included names such as Dragons, Grizzlies, Hogs, Tarantulas, and Terriers before Raptors was chosen as the final and most appropriate name. On 30 October 2013, bmo announced its multi-year sponsorship of the Toronto Raptors nba franchise. The agreement reinforced the Bank’s strong relationship with Maple Leaf Sports & Entertainment in the city. Most of all for the Bank, it marked what newspapers of the day considered a “forceful return to Canadian basketball,” establishing the sport as a premier marketing vehicle in Canada. Basketball’s popularity as a sport, especially among young urban dwellers, has made the relationship with the Raptors a powerful and productive one.

On the Pl aying Fields of North A m er ic a

173

THE BANK’S CLEAR ROUND

Spruce Meadows

S

how jumping is an elegant sport developed in the eighteenth century in England and revolutionized by Italian Federico Caprilli, hailed as the father of

174

Th e BM O Un iv er se

modern riding. The sport highlights the remarkable physical power and agility of the horse and the superb, supreme control of the rider. The harmony of human and horse in overcoming obstacles, avoiding faults, and completing the course can be considered fluid poetry in motion. The Bank of Montreal is proud to be a founding sponsor of Spruce Meadows, Canada’s premier equestrian show jumping facility near Calgary, Alberta, since its inception in 1975. In fact, the Bank has supported equestrian sport in Canada for four decades in a variety

of ways, both individually and in the development of this international team competition. It has supported Canadian Equestrian Team member and Olympic record holder Ian Millar for more than a quarter century. The bmo Nations’ Cup has been an exciting opportunity to showcase talented athletes from around the world, and bring international recognition to the Calgary’s Spruce Meadows “Masters” tournament. The Nations’ Cup has become a leading global competition in the sport, drawing the world’s best riders.

WILD ROSE VISIONS

The Calgary Stampede

S

ome annual events in the life of a city begin modestly and then eventually grow to symbolize the spirit of an age, a place, and a people. The Calgary Stampede has become such an event and institution in the life of Calgary, Alberta. The first Stampede event

was held in September 1912, supported by four prosperous southern Alberta ranchers who got behind the idea of a world-class rodeo competition to exalt the culture of the Old West. The Bank of Montreal was there from the very beginning in 1912 as the “Official Bank of the Calgary Stampede.” For the last three-plus decades, the Bank has been a sponsor of this remarkable annual event. Sponsorship provides the institution an opportunity to connect and collaborate with the community, to celebrate Western heritage, and to showcase the importance

of agriculture not only to the West but also to Canada as a whole. There are not many relationships between institutions that surpass a century.. That of the bmo -Stampede therefore stands out as a fine example of a productive, prosperous, and successful relationship that has helped to build the bonds of community in southern Alberta. When you add the immense entertainment value of the Stampede to the equation, you get a remarkably happy picture of what the Stampede brings to its people and community.

THE ENDURING NATIONAL PASTIM E

Skate Canada

A

s in so many areas of both amateur and professional sport, bmo has had transformative long-standing partnerships. For two decades, the Bank was the “official bank” of Canadian skating. bmo first entered into an agreement with Skate Canada in 1996 to become the title sponsor of the Canadian Figure Skating Championships and a sponsor of the National Team. This partnership grew to include the bmo Skate Canada Junior Nationals, bmo Skate Canada Challenge Events, bmo Skate Canada Sectionals, and bmo Skate Canada Synchronized Championships, which have provided the opportunity for nearly one million spectators to enjoy the country’s top figure skaters live. bmo has been particularly proud to be the presenting sponsor of the CanSkate learn-to-skate program, delivered through 1,475 clubs across Canada and taught by professional coaches. This program enables skaters of all ages to participate in recreational skating and provides them with the skills to enter into the competitive skating stream. The Bank’s sponsorship of title events was one piece of a larger and intensive commitment to the sport. Another is helping young skaters who are first starting out. And at the opposite end of the spectrum, helping elite skaters to compete effectively and successfully at the international level. The Bank’s commitment reaches from the support of recreational skaters to competing athletes. The long-term commitment to Skate Canada was considered transformative in the sense that the organization was able to focus on creating the best environment for its members to thrive and succeed. bmo Financial Group’s partnership with Skate Canada has developed into what was considered a leading and award-winning example of corporate sponsorships.

176

Th e BM O Un iv er se

T GOING THE DISTANCE

The bmo Vancouver Marathon

he Bank’s sponsorships in the support of healthy lifestyles embrace a wide spectrum. The marathon, for example, in both ancient and contemporary times, has captured the imagination as a popular test of physical prowess and endurance. For almost a decade, bmo Bank of Montreal has been the title sponsor of the bmo Vancouver Marathon. bmo supports the running community through sponsorship of marathon events throughout North America – in Vancouver, Kelowna, and Charlottetown in Canada; Phoenix, Arizona; and Milwaukee and Madison, Wisconsin. In recent years, the Vancouver event has completely sold out, reaching the 5,000-runner limit. Over years, the Vancouver Marathon has become one of the world’s most significant races. Between 2012 and 2015, for example, the marathon had over sixty-three nationalities represented and an impressive contingent of international marathon runners registered and running. In 2014, Forbes magazine ranked the bmo Vancouver Marathon as one of the world’s best marathon locations. The course leads runners through twelve unique neighbourhoods, showcasing panoramic views of snow-capped mountains, cherry trees in blossom, shoreline for 70 per cent of the course, and the famous Stanley Park. Thirty bands along the course motivate runners to a downtown finish in the heart of the city, where participants are able to reconnect with friends and family at the Street Festival located on West Hastings. The organization puts on a marathon, a half-marathon, and various other races to encourage participation at all levels. In 2015, the bmo Vancouver Marathon hosted about 14,000 registered runners and many more spectators during the race weekend. The event has also raised more than $12 million for thirty charities since its launch in 1971.

On the Pl aying Fields of North A m er ic a

177

THE BEAUTIFUL GA M E

Canadian Soccer

B

mo’s support of soccer was not only inspired by

the beautiful game itself but also by the fact that the sport has the highest participation in the country. In 2007, the Bank entered the soccer sponsorship realm with its support of Toronto fc and bmo Field. The approach to the investment, however, targeted both elite and grassroots levels of play. The Bank promoted professional teams and Canada’s national teams through Major League Soccer and the Canadian Soccer Association. Remarkably, the Bank supported each of the Major League Soccer teams in Vancouver (Vancouver Whitecaps fc ), Toronto (Toronto fc ), and Montreal (Montreal Impact). bmo also supported youth soccer teams and sough to celebrate and engage young Canadians with the bmo Team of the Week, a national youth soccer contest launched in 2011 and run by the Bank. The Local Soccer Clubs program supported grassroots soccer teams at the branch level, enabling bmo branches and employees to engage directly in community activities. This was how bmo in Canada became the “Bank of Soccer” – by promoting outreach programs that grew quickly year by year. The Bank’s hard work and promotion of the sport resulted in the support of more than 20,000 youth league soccer players across the country. bmo’s extraordinary commitment to soccer focused its investments on a comprehensive, across-the-board approach to the sport, from the kids starting out in the game at the community level, through the young adults in associations, through the truly gifted international-class players – men and women that Canada needs in order to compete and win on the world stage.

INVESTING IN THE FUTURE

Bradley Center and the Milwaukee Bucks

I

n 2012, the Bank acquired the naming rights for the bmo Harris Bradley Center in Milwaukee, Wisconsin, the home of the Milwaukee Bucks basketball team. The Bank was seen as something of a white knight in the affair, since the Bucks would have in all likelihood been forced to find a new home. As a relative newcomer to the Wisconsin market after its merger with m&i , bmo was searching for ways of engaging meaningfully with important community initiatives and institutions. In concert with a host of other Wisconsin-based companies, bmo stepped up to the challenge. As in any great relationship, the benefits have been mutual. The preservation of the Bradley Center until a new structure could be built was an important community objective, not least since the Center had an annual economic impact of more than us $80 million in metro Milwaukee alone. Communities find out who their friends are when the need is greatest. By that measure, bmo Harris came through with flying colours. For its part, bmo Harris was able not only to introduce itself to the community in a big way but also to promote its name, its products and services, and the ways it wanted to continue to be a community player in the Milwaukee area. The announcement was coupled with the signing of a six-year sponsorship of the Milwaukee Bucks, as well as a new initiative to establish a bmo Harris Boys and Girls Club section of the center to support the community and broaden the fan base.

Minnesota Wild, 2015

T

he Minnesota Wild of the National Hockey League and bmo Harris Bank have had a relationship that extends back to the very beginnings of the franchise in the mid-1990s. The Wild took to the ice for the first time in the 2000 season in the nhl ’s Central Division, Western Conference. Franchise founder Robert Naegele Jr considered the Bank’s support crucial in helping him and his partners realize the goal of bringing a major-league franchise back to Minnesota. “They shared our vision for the entire community to become the State of Hockey that exists today.” The Bank had a long history with Naegele in his role as the owner of Rollerblade, Inc, aiding the entrepreneur in financing that venture as well. bmo Harris Bank was also vital in securing the final funding to build the Xcel Energy Center in 1998 so that when the players took to the ice in St Paul, they would do so in a brand new arena. In September 2015, bmo Harris Bank announced a multi-year partnership with the Wild. As in other key markets and communities where the Bank operates, the sponsorship recognizes just how much of an asset the Wild is to the community – this time in the Minneapolis–St Paul region. As a bank founded in Montreal, the growing collaboration with nhl teams – Chicago, St Louis, and Minnesota – seems a natural fit: a beloved sport, cherished on both sides of the border, helping to break down borders.

180

Th e BM O Un iv er se

Fro m Ch a rit y to Phil a nthropy

I

n the two centuries of the Bank’s operations, both the concept and the practice of philanthropy and charitable giving have undergone a thorough and complete transformation. The Bank’s earliest donations were focused first on local Montreal institutions, and then extended outward to its territory of operations through branches. The earliest donations were concerned with institution-building in health care (hospital construction) and education (universities), disaster relief, or the raising of funds for soldiers and veterans. Donations also went to the support and management of other young institutions in theatre and the arts. In national emergencies, the Bank’s leadership were attentive to wartime relief, supporting a national war effort, the Red Cross or the United Way, or health-based campaigns. In Chicago, for example, Harris Bank was the founding funder of the Chicago Community Trust (cct ) in 1915 with a donation of $600,000, and the bank was the original sole trustee. (The cct now has consolidated

assets of $2.1 billion and provides $161 million in annual grants.) In addition, both the leaders of the Bank and its employees, inspired by deep religious conviction and community spirit, developed a long-standing tradition of both personal and corporate generosity. The transfer of wealth from private to public and community has undergone a continuous evolution since the very first Bank of Montreal corporate donation in 1835. In 2015, the Bank contributed more than $56.9 million in community donations. Over time, the Bank’s donations have increasingly sought to connect the Bank’s existence as an important North American financial institution to the material support of community-building projects on a local, national, and international scale. As a bank, it does so in the name of the shareholders and the customers of the institution. Over time, donations and philanthropy have focused on making a difference in building the communities the Bank serves – through transformational

gifts, the funding of post-secondary educational initiatives, and in the realms of health care, arts and letters, and a variety of other causes important to its customers. These donations and investments reflect not only the sense of community of the Bank and its people but also the duty and responsibility it feels to civil society and a broader set of publics beyond its immediate circle of shareholders, managers, employees, and customers. In this way, the noble pursuit of giving has also spawned at the Bank and other institutions an increasingly sophisticated and developed sense of corporate social responsibility, where the Bank seeks to take on its social obligations through short-term, targeted projects as well as longer-term sustained or ‘transformational’ ones at city, regional, or national levels. These exciting developments in the Bank’s relationship with the wider world have emerged alongside a growing complexity and discernment in its approach. For the Bank of Montreal, this has

been a natural evolution: in its corporate culture, it has sought to give expression to its purpose beyond its operations. The Bank, in other words, has sought through this avenue to focus on its values, on human dignity, on solidarity, and on the kinds of initiatives that will strengthen individuals and communities. Throughout its history, the Bank has instinctively understood the importance of community goodwill and what experts call ‘reputational capital.’ That explains not only the Bank’s adherence to the highest and most exacting standards in banking but also how it has moved toward a deeper and broader understanding of its social purpose, beyond its core function. Some of the donations featured here exemplify the Bank’s philanthropic path over time. The story tracks how generations of Bank of Montreal bankers evolved their understanding of the proper role of the Bank beyond banking. Included also are special examples from both the Bank of Montreal and its other founding institutions, Harris Bank and m&i , thereby embracing both Canada and the United States. There are literally thousands of examples of donations, large and small, that could be cited. Instead, this chapter showcases five entries that cover the categories of charitable giving over the years: health care, education, research, the arts, and community. The story begins informally right from the beginning through the philanthropy of the Bank’s founders. For the Bank as an institution, the story begins in the 1830s, with the first official donation to the Montreal General Hospital.

182

Th e BM O Un iv er se

HEALTH C ARE AND THE HEALING ARTS

H

ealth care has pride of place in this list as it was the Montreal General Hospital that became the recipient of the Bank’s very first corporate donation. (See also bmo Bankers and the Dream of Nation, page 151.) On 10 February 1835, the board of directors agreed to donate £100, thus beginning a long and close association with this venerable Montreal institution. The leaders of the Bank, however, gave far more of their personal wealth – in time and treasure – to this worthy cause. This great impulse of charity is deeply rooted in tradition and seeks to relieve the physical and mental suffering of humanity. Throughout the late nineteenth century and into the twentieth, the need to fund and build hospitals grew in tandem with the urbanization of the country and the professionalization of medicine. In the twentieth and twenty-first centuries, the Bank has been active in helping hospitals focus on vulnerable groups and contribute to the eradication of disease in its key centres of operation. In Montreal, the Bank has supported the Hopital Sainte-Justine since 1930, making major donations throughout the decades. In 2003, the Bank offered $2.5 million to the hospital and, in 2016, $2 million for a Chair in Autoimmune Diseases. One shining example is St Michael’s Hospital in Toronto, a Catholic teaching and research hospital founded by the Sisters of St Joseph in 1892 to look after the sick and poor of the inner city. The hospital today is an outstanding medical centre of education and treatment. bmo has been its banker for over one hundred years and a key supporter of its campaigns through the 1980s and the 1990s. In 2001, the Bank pledged $730,000 over four years as the first major funder of the Centre for Research on Inner City Health (now the Centre for Urban Health Solutions). In 2006, bmo Financial Group gave $2 million for the extension of

this initiative centred on helping Toronto’s vulnerable and inner city populations – mothers at risk, new immigrants, and people living rough on the streets. Again in 2012, bmo contributed $3 million over a decade to support the expansion of facilities at the hospital. Among the other hospitals in Toronto receiving support over several decades, the Princess Margaret Hospital has been a consistent recipient, culminating in a 2013 pledge of $3 million over a decade to fund a Chair in Precision Genomics. The relationship with the Hospital for Sick Children extends back to 1967 and includes a total of $5 million in funding since 2006 for research and related activities. In Chicago, bmo has a distinguished tradition of supporting Chicago’s Rush University Medical Center in a variety of programs. Rush was the first medical school in Chicago. Its commitment to the low-income neighbourhoods on Chicago’s West and South sides is

focused on addressing and eliminating health disparities – in other words, getting high-quality health care to people who need it most. bmo Harris is Rush’s major collaborator in the Building Healthy Urban Communities project, which includes Malcolm X College, a City College of Chicago, and the Medical Home Network. As part of that project, the Bank funds five bmo Harris Bank Health Disparities Fellowships in aid of providing diversity in health care delivery. The frequency and the dollar amounts can make the head spin, but there is a strategy behind the giving. Many of the most recent contributions have sought to target specific programs and to offer the possibility of a transformation in the various fields of health care provision. The Bank has stepped up to the mark in ensuring that its giving reflects its values and its mission, and attempts to make a tangible difference in the communities it serves.

AN ENDURING COM M ITM ENT TO HIGHER LEARNING

T

he nexus between the Bank of Montreal and the development of Canada’s university network extends deep into the nineteenth century past. The Bank’s donations have benefitted a number of Canada’s leading universities in larger and larger amounts. In the early part of the twentieth century, McGill University

184

Th e BM O Un iv er se

received substantial amounts ranging from $10,000 in 1911 to $250,000 in both 1920 and 1943 with various amounts in between, in the years between. The University of New Brunswick (unb ) was also one of the earliest supported universities, with a banking relationship extending back decades. The Bank has made contributions to McMaster, Queen’s, Western, Laval, and Acadia universities, to name a few. The contributions and donations have been underpinned by a growing awareness of the role of universities in creating strong foundations for civil society, tackling the great challenges of our world, and creating the conditions for

the kind of country and the kind of people we aspire to become. In contemporary times, the donations have flowed to universities with ambitious agendas. The Bank’s historic $3 million donation to the University of Toronto’s capital campaign in 1996–97 was a turning point for the way the Bank viewed its corporate giving, preferring to make a stronger impact in strategic areas of need. A few examples will suffice. In 2005, $750,000 went to the unb ’s International and Business Entrepreneurship Centre in the Faculty of Business. In 2011, the Bank returned to unb to announce a $1.75 million gift to support student projects – the single largest donation ever received by the university and the largest the Bank had given in the region. In 2013, the Bank offered $1.75 million for a fresh renovation of the Finance Research and Trading Lab at the Rotman School of Management at the University of Toronto. The lab offers real-time financial resources and the opportunity to gain hands-on training in a range of disciplines. bmo Harris’s philanthropic focus in education responds directly to the most urgent challenges of the community it serves. Its $900,000 support to Marquette University and the Boys & Girls Clubs of Greater Milwaukee is an extraordinary case in point. The funds are used to support college preparation and career readiness programs at the Boys & Girls Clubs and provide scholarships for club members to attend Marquette University. Currently, thirty members attend Marquette as bmo Harris Scholars. That program provides a range of support for first-generation college students from preparation to mentoring programs. In Chicago, the Bank has been the co-lead sponsor of One Book, One Chicago since 2013 – an initiative aimed at creating a community of readers. Every September, about 25,000 Chicagoans read the same book at the same time. Then, a variety of free programming prepared by Chicago’s cultural, educational, and civic institutions – discussions, author series, performances, art exhibits, and films – is held in connection with the book.

T PURE RESEARCH

At the Perimeter of Expectation

hrough its support for universities and endowed chairs in health and other fields in the last generation, bmo has kept its finger on the pulse of the evolving financial needs of advanced research. One contemporary gift stands out, however. On 29 November 2010, bmo announced its largest single donation to date, a landmark $4-million investment in the Perimeter Institute for Theoretical Physics (pi ), in Waterloo, Ontario. The gift established the bmo Financial Group Isaac Newton Chair in Theoretical Physics at the Perimeter Institute. In one stroke, it represented the largest single donation ever made by bmo to support scientific research. It was also the largest single contribution in the history of the Perimeter Institute. The $4-million donation came with an additional $4 million in private funding.

The Chair selected was Xiao-Gang Wen, one of the pre-eminent physicists of our generation. Wen received his PhD from Princeton University in 1987. He is a Cecil and Ida Green Professor of Physics at mit , and a Moore Distinguished Scholar at Caltech. Wen’s expertise is in condensed matter theory of strongly correlated electronic systems. Among many other outstanding achievements, he introduced the notion of topological order (1989) and quantum order (2002) to describe a new class of matter states. This opened up a new research direction in condensed matter physics. bmo ceo Bill Downe has been one of the Perimeter Institute’s most convinced supporters. As he wrote in an op-ed in 2015, transformational change begins to happen “when exceptional people ask fundamental questions about the deepest problems and make extraordinary discoveries that benefit us all.” The far-sighted decision to support that branch of knowledge stemmed from an understanding that quantum physics is at the foundation of the world’s advanced economies. Downe wrote: “The commercial applications are rarely obvious at first – it is one hundred years later, yet we are only now reaping some of the benefits of Albert Einstein’s profound insights. The ideas of Max Planck, Niels Bohr and other thinkers of Einstein’s generation advanced human knowledge, science and technology, altering our lives forever.” “Transformational giving” is already looking like a shopworn phrase in the contemporary world of philanthropy. But there’s still the hope – that if you push hard enough and deep enough, you have a shot at breaking through, or solving twenty-first-century challenges. The transformation sought is the discovery of a solution to an intractable challenge. It is what contemporary leaders both see and aspire to in their own organizations, and in the vision and resources they offer to the wider world. 185

THE ARTS

T

he Bank has long been a major patron of the arts. In Canada, the patronage of the Bank of Montreal and others has been essential to the flowering of cultural forms across the country. Promoting those splendid manifestations of human creativity in dance, theatre, art, and music demands a cultural understanding. It also requires support of cultural communities and the fostering of both individual and collective genius. Supporting extraordinary creative excellence in the nation’s artistic realms has been done for complex reasons deeply rooted in the convictions and aspirations of generations of Bank of Montreal leaders and people. Each generation has had to ask itself: What kind of society do we want to live in? How can we do our part to make it more culturally enriching, uplifting, or worthwhile? The Bank’s answers have come down through its long-standing support of some of Canada’s founding regional and national cultural institutions. In ballet, the Bank was the original sponsor of the Winnipeg Ballet Club in 1939. In 1953, the club would become the Royal Winnipeg Ballet after HM Queen Elizabeth II granted the group the first royal charter to be conferred in the Commonwealth. Also in the 1950s, Celia Franca founded the National Ballet of Canada (1951) in Toronto, and the Bank was also there to lend its support. The National Ballet has become Canada’s premier dance company, performing for over 10 million people since Celia Franca’s day. It has earned an admirable reputation across the globe for its range of traditional full-length classics. The Bank of Montreal has been the banker to the Stratford Festival virtually since its establishment in 1952. The founding of the festival was a stroke

186

Th e BM O Un iv er se

of vaulting ambition for a small southern Ontario town, but under the leadership of Tyrone Guthrie, the festival’s first artistic director, and intrepid actors who were attracted to the new stage, the venture was launched. Unusually, the original Bank gift came from the branch manager at Stratford, underlining the Bank’s and the community’s commitment to the success of what has become a Canadian theatrical institution. The Bank’s support for the fine arts extends right across the country in communities where it has conducted business: through the support of individual artists and young artist competitions (1st Art!) as well as educational institutions, such as the Ontario College of Art and Design (now ocad University) – Canada’s largest art, design, and new media post-secondary institution. Support for community galleries is a hallmark of the Bank’s giving in this area. The Winnipeg Art Gallery stands out, as the Bank has been both banker and supporter for over a century. The Bank’s Chicago experience with fine art has a long pedigree. The Norman Wait Harris Prize medals in American painting, endowed by the Art Institute of Chicago, were awarded to some of the most renowned artists of the twentieth century. Grant Wood’s iconic American Gothic won the $300 Harris Prize bronze medal in 1930. The Bank supports the Toronto Symphony Orchestra and the Ravinia Festival in Chicago, among other groups and events. But the Montreal Symphony Orchestra (mso ) has a special place in the history of the Bank’s giving. In 1981, the Bank began its sponsorships of mso international tours. In 1984, the Bank sponsored the mso ’s 1984 spring tour of Europe. It was the largest single cultural sponsorship up to that time for the Bank ($200,000). The smash success of that tour prompted another tour – this time of the United States – in 1985. In 1989, the Bank again sponsored a North American tour for this much-acclaimed orchestra. In Chicago, bmo Harris is the season sponsor of the Shakespeare in the Parks tour, and has been since 2012. The production tours city parks, especially in underserved neighbourhoods. The plays attract 25,000

families, and audience members of all ages. For ten weeks, the Grant Park Music Festival brings free, outdoor, classical music to the Jay Pritzker Pavilion in Millennium Park. The Festival is America’s only free concert series of its kind, and bmo Harris is a season sponsor. Throughout the years, as the Bank has become an integral part of the cities and towns it serves, it has striven to promote the well-being of the whole community. In so doing, it has enriched the North American cultural landscape.

Two men defiantly pose in front of the Bank’s office amidst the ruins of post–Great Fire Chicago, 1871. Three days after the fire, the directors authorized a $5,000 donation in aid of the stricken city.

COM MUNIT Y OF COM MUNITIES

A

sk any Bank employee in any branch or office about the importance of community support and they will tell you that their Bank’s support, encouragement, and passionate commitment for strong communities everywhere is a defining feature of its engagement with the world. Military conflict and natural catastrophe have always called forth a response: the Bank of Montreal donated $5,000 for the relief of Chicago after the Great Fire of 8–10 October 1871 “in view of the unparalleled calamity which had befallen Chicago” as the directors noted on 13 October 1871. Marshall & Ilsley established a fund to support orphans in the wake of the US Civil War. One of the

The Soldiers’ Orphans Home in Madison, Wisconsin, opened its doors on 1 January 1866 for the care and tutelage of children left without parents after the Civil War. Marshall & Ilsley established a fund to support these poor orphans.

earliest donations of the Bank was for the relief of cholera and pestilence in its hometown – an all-toocommon occurrence in the age before sanitation and before the rise of health care. More recently, the Employee Giving Campaign has raised over $22 million (2013) and $26 million (2014) – remarkably generous sums that come from the people of the Bank themselves. One of the keystone charities the Bank has supported over the years has been the Community Chest, United Appeal, and Red Feather – better known today as the United Way Centraide. bmo has become one of the most generous corporate supporters of the United Way. Many of the Bank’s senior executives and branch managers in the communities they serve have chaired the annual appeals. In recent years, the Bank’s strategic shift to larger gifts that carry more impact inspired it to provide funding for United Way’s “Building Strong 188

Th e BM O Un iv er se

Neighbourhoods Strategy” (bsns ) to confront the threat of growing urban poverty. By focusing efforts where they are needed most, supporting neighbourhood change from within, and improving access to community supports, the United Way in cities such as Toronto and Chicago can give people the necessary tools to improve individual lives and the life of the community. bmo Harris in Chicago has been especially active in funding projects that respond directly to the needs of underserved populations. The Bank provided a $1 million multi-year pledge to the ymca of Metropolitan Chicago toward the ymca 1030 Building Campaign to construct the Learning Institute. The institute will be a state-of-the-art space for collaborative learning across the spectrum of childhood development into adulthood. It will also be a destination for best-practice dialogue among city, state, and national institutions and non-profit organizations. Over half a million Chicagoans rely on the ymca for support, making this project one that will touch many lives. The Bank’s support, and that of its employees, for community causes is strong and has a long tradition.

The Kids Help Phone is a sterling example. From its beginnings in 1989, this charity has become one of Canada’s largest and most respected services for children and teens. It is national, bilingual, free, and available 24 hours a day for children and youth in Canada. The bmo loyalty to Kids Help Phone has seen millions of dollars raised from its employees and their families over the decades. In Chicago and area, bmo Harris has supported such diverse projects as Openlands’ Building School Gardens program, creating and installing outdoor teaching spaces at disadvantaged Chicago public schools, and benefitting students, teachers, and the wider community. In the civic realm, the Bank provided $1 million in “founder” funding in 2001 to build the now-famous Millennium Park. This depth of commitment demonstrates just how seriously the Bank and the people of bmo take to heart the welfare of their community.

Cultur a l C a pita l

Bankers and Art

C

ompanies maintain an interest in acquiring an art collection for a variety of reasons. Art collections can give a sophisticated expression to an institution’s support for the community beyond the strict confines of its business. The best collections not only reflect a corporate social responsibility – in the assistance to up-andcoming artists, for example – but also serve to enhance the cultural richness of the community and the workplace itself. Art in the corporate setting has been seen as a “‘catalyst for change because it changes people’s perceptions.” It can motivate employees and broaden their horizons. Above all, perhaps, corporate collections at their best view art as a manifestation of the creative spirit that should not be confined to a gallery or museum, but should help to elevate our physical environment and inspire people. Collections can

reflect the creativity, energy, and modernity of the institution. The Bank of Montreal has played an important role in Canada’s cultural evolution, and the art world is no exception. Its head offices in Montreal and architecturally memorable branches across Canada set a standard of refinement for new buildings that was emulated for decades in every part of the country. Early bank presidents like Donald A. Smith (1820–1914) and Sir George Alexander Drummond (1829–1910) were actively involved in the arts, both as notable collectors and, in Drummond’s case, as chairman of the fledgling National Gallery of Canada. The bmo Financial Group art collection has amassed more than 7,500 works, displayed in bank offices in five countries and dozens of cities. The collection has become an integral part of

the working environment of the bank itself. In recent years, the collection has been expanded with works from artists active in every region of the territories in which the Bank operates. Artistic and technical excellence is the standard in this collection. The bmo collection has a remarkable range of historically significant art, including Marc-Aurèle Fortin, Emily Carr, Maurice Cullen, Group of Seven members J.E.H. MacDonald and Lawren Harris, and modernist masters like Yves Gaucher, Willem de Kooning, Robert Motherwell, and Alfred Pellan. The collection also contains many works by notable contemporary artists, including Lois Andison, Shuvinai Ashoona, John Brown, Edward Burtynsky, Pascal Grandmaison, Angela Grauerholz, Micah Lexier, Evan Penny, Sarah Anne Johnson, Julian Schnabel, and Gregory Scott.

The Bank’s collection also features works by the best of the newest generation of Canadian artists. That generation is actively encouraged by the bmo Financial Group 1st Art! Invitational Student Art Competition, which has run since 2003. The works presented here represent a fascinating cross-section of the collection in North America.

190

Th e BM O Un iv er se

JOSEPH PANZETTA and THOM AS DUBBIN

Agriculture, Arts and Crafts, Commerce, Navigation, 1818–19

F

ashioned in the neo-classical style then popular in Europe, these four panels are the oldest works in the bmo collection, which gives them a special place of honour. They also represent the first decorative or ‘artistic’ pieces to adorn a financial institution in Canada. At the time, Coade stone was a new, ‘high tech’ form of artificial stone developed to be more durable than the stone or terracotta materials then used on the exterior of buildings. The decorative scheme for the country’s first bank building was intended to set a culturo-artistic imprimatur on a long-awaited moment for the aspiring merchant-bankers of Montreal. The

four plaques feature allegorical figures in bas-relief symbolizing the ambitions and wide-ranging interests of the bank, together with those of the bank’s clientele: Commerce, Agriculture, Arts et Métiers (Arts and Crafts), and Navigation. Joseph Panzetta (active 1789–1830) and Thomas Dubbin (no dates known), Agriculture, Arts and Crafts, Commerce, Navigation, 1818–19. Coade stone, each panel 30 × 46 inches (inv # 389, 390, 391, 392). Set of four architectural relief panels or “plaques” commissioned in London, England, in 1818 to adorn the exterior of the first Bank of Montreal building in Montreal. Currently on display at the Montreal head office.

Cultur a l C a pita l

191

ROBERT HARRIS

Lord Strathcona and Mount Royal, 1905

T

he practice of immortalizing the Bank’s presidents in oil on canvas has become an unbroken tradition. Upon retirement, a portrait is commissioned – though in some cases the work was done posthumously. This portrait is one of the most distinguished and celebrated of the entire collection. It features Donald A. Smith, Lord Strathcona and Mount Royal, whose influence on the Bank and the nineteenth-century economic development of young Canada was powerful and incontestable. (See also Determining Destinies, page 17.) Lord Strathcona was extremely knowledgeable about the art of his day, and his personal art collection was held in high esteem. It is, therefore, not surprising that Robert Harris, one of the most eminent and accomplished portraitists of the day, and best known for his portrait of the Fathers of Confederation, was commissioned to create Smith’s portrait.

Robert Harris (1849–1919), Lord Strathcona and Mount Royal, 1905. Oil on canvas, 46 × 30 inches, unframed.

192

Th e BM O Un iv er se

NICHOL AS DE GR ANDM AISON

The Walker (Pemota), 1930

N

icholas de Grandmaison devoted four decades of his life to documenting and creating portraits of First Nations people in Canada, particularly in Manitoba, Alberta, and British Columbia. After his death, the Bank acquired from his family a portfolio of one hundred oil pastels on paper dating from the 1930s to 1960s. The Bank’s purchase was thought to have saved the collection from being broken up or sold outside the country. This acquisition made the bmo collection one of the largest holders of the artists’ work. After donating sixty-seven pieces to the University of Lethbridge in 2013, bmo retains thirty-three portraits, the greatest number of works by a single artist in the collection. De Grandmaison’s portrait The Walker (Pemota) is one of his earliest and most accomplished portrayals.

Nicholas de Grandmaison (1892–1978), The Walker (Pemota), 1930. Oil pastel on paper, 29.5 × 23.38 inches, unframed.

Cultur a l C a pita l

193

M ARC-AURÈLE FORTIN

Paysage à Grande Vallée, ca. 1942–48

194

Th e BM O Un iv er se

M

arc-Aurèle Fortin was born in Sainte-Rose, Quebec. He established a successful early career as a painter, watercolourist, printmaker, and draftsman. He also became one of Quebec’s most beloved twentieth-century landscape artists. Fortin studied in Montreal under Ludger Larose and Edmond Dyonnet. He also studied at the Art Institute of Chicago under the direction of Edward J. Timmons. He returned to Montreal in 1914, but really began his painting career after a formative trip to England and France in 1920. One contemporary critic likened him to a “magician

conjuring up, out of the earth, out of his palette, giant trees, extravagant skies, a whole enchanted nature.” Over his long career, his love of the countryside around the St Lawrence Valley inspired many of his paintings. Paysage à Grande Vallée is an exceptional example of his best work, being one of two pieces by Fortin in the collection.

Marc-Aurèle Fortin (1888–1970), Paysage à Grande Vallée, ca. 1942–48 (inv # 8011). Casein on board, 35 × 47.5 inches, unframed.

EM ILY C ARR

Young Trees, Mount Douglas, 1942

B

ritish Columbia artist Emily Carr is a seminal figure in Canadian art history and one of the most important female artists of the early twentieth century in North America. Her passion and inspiration throughout her life remained the British Columbia coast. As she wrote in 1912, “Art is art, nature is nature, you cannot improve upon it … Pictures should be inspired by nature, but made in the soul of the artist; it is the soul of the individual that counts.” Carr’s formation was as expansive as her art. She studied at the California School of Design in San Francisco in the early 1890s and travelled to England in 1899, where she stayed for five years. She returned to British Columbia and the Northwest Coast before travelling to Europe once again – this time to France – in 1910. She settled in Victoria, British Columbia. By the late 1920s, she became increasingly known and appreciated, especially for her paintings of Aboriginal subjects and the trees, forests, and coastal skies of her native province. bmo has three pieces by Carr in the collection, this work being most representative of her mature style.

Emily Carr (1871–1945), Young Trees, Mount Douglas, 1942. Oil on paper mounted on wood board, 35 × 24 inches.

THOM AS UGJUK

Community, 1973

T

he bmo collection includes a rich selection of 265 works by Inuit artists dating from the second century to the present day; pieces are on paper, textile, stone, and bone and in mixed media, with the bulk being limited-edition prints on paper. This impressive sculpture, one of sixty-nine Inuit sculptures in the collection, is by master carver Thomas Udjuk from Kangiqtiniq (Rankin Inlet), located on the west coast of Hudson Bay. The subject of family and community activity rendered in expressive, simplified forms is characteristic of much sculpture from this region, as is the hard, grey stone used.

Thomas Ugjuk (1921–2014), Community, 1973. Stone, 14 × 32 × 10 inches.

196

Th e BM O Un iv er se

YA ACOV AGA M

Remembrance and Growth, 1972–75

Y

aacov Agam, an Israeli sculptor, was born in Palestine. He studied art in Jerusalem and settled in Paris in the 1950s, where he eventually became interested in perceptual or Op art, an art that causes illusionary or perceptual effects in the viewer’s eye. Critics have claimed that Agam and other artists involved with the group called Nouvelle Tendance (New Tendency) sought a parascientific role for art. However, Agam’s foremost emphasis in his work has been spiritual. As one source reveals: “The driving force and the source from which I draw my inspiration stem from my desire to give plastic and artistic expression to the ancient Hebrew concept of reality, which differs in its essence from that of all other civilizations, and which, to my mind, has never found its true artistic expression.” In the 1960s and 1970s, the Harris family commissioned several works by internationally known artists for the Harris Bank in Chicago, and these pieces are now part of the bmo Financial Group corporate art collection. The large, colourful metal wall sculpture Remembrance and Growth has been hanging on the main floor of the Harris Bank’s 111 West Monroe building since 1975. In 2007, the artist mentioned in a personal correspondence that Harris suggested the title for this work, feeling that the piece expressed the purpose, history, and future of the Bank.

Yaacov Agam (b. 1928), Remembrance and Growth, 1972–75. Acrylic lacquer on aluminum, 132 × 252 × 6 inches.

Cultur a l C a pita l

197

GREGORY SCOTT

Color Grid, 2009

that do magical and unexpected things. Composed like a modernist colour-field painting, in the centre of this composition the artist has organized nine squares in three rows of three, each delineated by white paint on the canvas. Traditional references to static painting end there. Instead of painted colours, the checkerboard of squares contains a series of moving images – chromatic and representational – that, over the course of almost nine minutes, shift and flow through a kind of fractured narrative that is evocative, witty, and thoroughly fascinating.

Gregory Scott (b. 1957), Color Grid, 2009. Mixed media, archival digital print, oil on panel, hd video, 45 × 46.5 inches.

O

ver the years, the art that bmo has acquired to enhance its office spaces has reflected changing modes of expression and materials in contemporary artmaking by artists living and working in the countries the bank serves. Gregory Scott is one of a growing number of artists interested in exploring and expanding the demarcations between traditional and newer media. With Color Grid and related works, he challenges the definitions placed on photography, painting, and video by combining all three media in the creation of narrative works

198

Th e BM O Un iv er se

LOIS ANDISON

Heartbreaking 91, 2009

A

significant strand of contemporary art internationally is based on words or text. The bmo collection includes several such pieces in a variety of media including painting, printmaking, watercolour, neon, and electronic and mechanical works – Heartbreaking 91 being the most exceptional. Considerations of language as a medium and kinetic type as movement prompted Canadian artist Lois Andison to incorporate text in sculptures like Heartbreaking 91. She started with pencil and paper, not a computer, to work out the various words that could be formed from “heartbreaking,” organizing them in a meaningful sequence. Her finished sculpture was inspired in form by the game Scrabble, but reconceived as a mechanical piece using acrylic letter squares set on rods, programmed electronics, and motors that allow each piece to rotate from the letter to the blank side. Over the course of several minutes, the word “heartbreaking” kinetically deconstructs and reassembles to form ninety other words found through combinations of the thirteen letters and their reverse blank sides, before returning to the original source, “heartbreaking,” the ninety-first word. The experience is witty, poetic, and affecting, and, as the artist says, “self-reflexive as the performance is a self-fulfilling prophecy.”

Lois Andison (n.d.), Heartbreaking 91, 2009. Edition 3 of 3. Acrylic, metal, custom mechanics and electronics, powder-coated shelf, 5.625 × 40 × 4 inches.

Cultur a l C a pita l

199

ENRIQUE SANTANA

Lake Michigan, 2010 Enrique Santana (b. 1947), Lake Michigan, 2010. Oil on linen, 60 × 90 inches, unframed.

E

nrique Santana was born in Spain, where he received his training. The artist has been living and pursuing his career in Chicago since 1991. Santana is the recipient of the Government of Andalusia Gold Medal of Honor for his contribution to the arts. In 2010, Sanatana was commissioned by bmo Financial Group to create this extraordinary work, Lake Michigan, for the bmo Harris offices in Chicago. From the earliest times, nature has been a strong source of inspiration for artists. Indeed, it remains a subject of enduring interest and pleasure for artist and viewer alike. The natural environment dominates

200

Th e BM O Un iv er se

as an artistic subject in the Bank’s collection – in any medium or idiom. It is, therefore, not surprising that an artist such as Santana, celebrated for his keen powers of observation and interpretation, was commissioned to capture the great primal force that is Lake Michigan. One gallery description of him recently suggested that Santana rendered Chicago with an “all-knowing hand.” In the global urban experience, lakes and rivers are shapers, protagonists, connectors. Chicago is also intimately connected with waterways: they shape and are shaped by the city; they are the source of power,

commerce, and communication; they help to provide sanitation, give pleasure, and, as Santana shows us, beauty. They inspire poetry, art, and metaphor. Lake Michigan in particular holds a special fascination for Santana as a realist painter, who has rendered it in small- and large-scale works during various seasons and times of the day. His approach to the subject is decidedly poetic, yet few artists working in any medium have captured its dynamic, elemental beauty with such acuity. For Santana, no two ‘portraits’ of the lake are identical: each reveals yet another side to its changeable character.

JA M ES EARLE FR ASER

Victory, 1923

V

ictory by American sculptor James Earl Fraser was commissioned by the Bank to honour the “many members of the staff who made the last great sacrifice in the cause of liberty and civilization” in the Great War. The Bank ran an international competition and selected Fraser, a talented exponent of the Beaux-Arts tendency in sculpture. Beaux-Arts was inspired by Classical, Renaissance, and Baroque models in combination with a “virtuoso technical facility at modeling the human form,” in the words of one observer. Originally, the bankers desired a figure of a soldier in bronze. Fraser came back with a concept of a figure “emblematic not of death, but of victory.” Victory stands in the atrium of Montreal Main Branch, 9 feet high in Seravezza marble. She stands on an 8-foot-high pedestal of Botticino marble. The inscription “Patria” (Homeland) is on the side facing the Bank entrance, followed by the words “To the Memory of our men who fell in the Great War.” Fraser was a rising star in the American artistic community when he executed this sculpture. His works are particularly prominent across the major monuments and institutions of Washington, dc , and include Contemplation of Justice and Authority of Law at the Supreme Court of the United States. Fraser also executed medals and special coins, including the Indian Head (or Buffalo) US nickel. His most famous sculpture is End of the Trail (1915), depicting an American Aboriginal warrior slumped over on his horse.

James Earle Fraser (1876–1953), Victory, 1923. Serezza and Botticino marble, 165 × 64 × 64 inches (sculpture and base).

ASSETS Total bmo assets in 1817, 1917, and 2016.

$

681,458,000,000 Assets in 2016*

150,000

$

Assets in 1817

$

403,980,000 Assets in 1917

* Second quarter

T w o Centur ies of B a nking by the Num ber s

205

DEPOSITS Growth in bmo deposits, 1827–2016.

$

496,000 in 1827

$

11,199,000 in 1867

335,439,000

$

in 1917

5,608,490,000

$

in 1967

444,793,000,000

$

in 2016*

* Second quarter

206

T w o C enturies o f Ba n king by the Num ber s

THE TR AJECTORY OF WEALTH GENER ATION: 1917–2016 How much would a single Bank of Montreal share purchased in 1917 be worth down the years? This chart answers that intriguing question by examining the growth in value of the stock at ten-year intervals, factoring in stock splits that occurred four times during this period. It also assumes that the investor used the dividends to buy more stock every year (at the average stock price for that year).

Through war, depression, national emergency and the many cycles of the North Atlantic economy, the Bank has a perfect record of delivering dividends and the share price has risen steadily. If you bought one share in 1917 for $222 ($3,600 in 2016 dollars) and reinvested every penny of your dividends, we estimate you would have at least 52,000 shares today worth more than $4.4 million at current prices.

$

No of shares

4.4 million

more than 52,000 shares in 2016

60,000

$ Value (2016 $) 5,000,000 4,500,000

50,000

4,000,000 3,500,000

40,000

3,000,000 30,000

2,500,000 2,000,000

20,000

222 3,600

$ 10,000

=$

1,500,000

in 2016 dollars

1,000,000

1 share in 1917

500,000 0

0 1917

1927

1937

1944

1947

1957

1967

1977

1987

1993

1997

2001

2007

2016

1944: 10-for-1 stock split 1967: 5-for-1 stock split 1993: 2-for-1 stock split 2001: 2-for-1 stock split

T w o Centur ies of B a nking by the Num ber s

207

LOANS bmo Loans, 1817–2016. $million

Loans

350,000

Panics of 1825 London stock market (often called “first modern financial crisis”)

300,000

1837 United States financial crisis

250,000

1817–1917

1857 International – famously called “first worldwide economic crisis”

200,000 $millions

1873 United States financial crisis – triggers two decades of economic depression

400

150,000

300

1901 New York Stock Exchange (nyse) crash

200

100,000

1907 New York bankers – nyse falls 50% from peak of 1906

100 50,000

0

1929 Great Crash triggers Great Depression

0

1800

1850 War of 1812

Reign of Queen Victoria 1838–1901 Rebellion of 1837

1900

1950 First World War

Second World War

Last Spike in the Canadian Pacific Railway Telephone patented Great Fire of Chicago

2000

2008 Financial Crisis

September 11 terrorist attacks on the United States Sir Tim Berners-Lee invents the World Wide Web Margaret Thatcher elected first female prime minister of the uk

Canadian Confederation US Civil War

Morse develops electric telegraph

208

T w o C enturies o f Ba n king by the Num ber s

Notes: (1) Since 1 November 2002, customers’ liability under acceptances have been included in Loans (previously included in Other Assets). Prior periods have not been restated. (2) Since 1 November 2011, bmo ’s financial statements

have been prepared in accordance with International Financial Reporting Standards. Results for years prior to 2011 have not been restated and are presented in accordance with Canadian gaap .

CUSTOM ER BASE Post–Second World War growth in bmo customer base, 1947–2015. North America’s rapidly expanding post-war economy fuelled unprecedented increases in household income and wealth. Banks and financial institutions also experienced something of a consumer-finance

Year Number of customers

revolution after 1945. People had more and more ability to spend, borrow, deposit, and invest. They also began to demand access to an expanding range of financial products and services. This is the story that underlies these statistics on bmo customers.

1947

1957

1967

1987

1997

2015

more than

more than

more than

more than

more than

more than

1,000,000

2,000,000

3,000,000

4,000,000

11,000,000

12,000,000*

in North Amercia

Source: Archival material, annual reports, and internal measures.

* As at 31 October 2015

T w o Centur ies of B a nking by the Num ber s

209

EM PLOYEES Number of bmo employees in 1817, 1913, and 2016.

7

1,883

46,166

1817

1913

2016*

Canada

30,330 * Second quarter

210

T w o C enturies o f Ba n king by the Num ber s

United States Other international

14,443

1,393

BR ANCHES AND ACCESS Number of bmo branches, atm s, and app downloads, 1817–2016.

Year

Branches

atm

App downloads**

1817

2

-

-

1917

172

-

-

1967

1,033

-

-

1977

1,234

78

-

1987

1,220

689

-

1997

1,246

2,035

-

2007

1,224

2,561

-

2016*

1,538

4,746

2,125,960

* Second quarter ** Includes bmo ® Mobile Banking App, bmo InvestorLine App, and bmo Harris Mobile Banking® App downloads (as of May 2016).

T w o Centur ies of B a nking by the Num ber s

211

M APPING GLOBAL OPER ATIONS bmo growth from one city in one country to an international presence.

1817 Montreal, Canada

2016* 22 Countries 5 Continents * Second quarter

212

T w o C enturies o f Ba n king by the Num ber s

BR ANCH NET WORK Expansion of bmo branch network, 1817–2016.

61.1

%

Canada

%

38.6% United States

of branches by country

2016*

0.3% Other International

2016

Number of branches

1967

1,800 1,600 1,400 1,200 1,000 800 600 400 200

1917

1817

1867

172

1867

1917

26

1,538

1,033

2

1817

1967

2016

Year

* Second quarter

T w o Centur ies of B a nking by the Num ber s

213

COM MUNIT Y GIVING Some examples from a long history of support to address a wide range of community needs, 1835–2015.

2015

$

2001

56.9

$1 million Millennium Park, Chicago (Founder grant)

million

2010–2014

$2.5 million United Way Neighbourhood Strategies, Toronto and Chicago

1800

1835

1900

1948

2015

£100 Montreal General Hospital

$10,000 relief fund for Ottawa-Hull fire

$100,000 University of Toronto

$650,000 Remai Modern Art Gallery of Saskatchewan

1850

1900

1950

2000

1871

1920

2013

$5,000 relief fund for

$250,000 McGill University

$5 million Rush University Medical Center, Chicago

Great Chicago Fire

1915

1996

$600,000 Chicago Community Trust (founding member)

$150,000 Royal Winnipeg Ballet

1912

1979

$2,000 disaster relief for rms Titanic tragedy

$50,000 Vancouver Art Gallery

1967 $200,000 Bank of Montreal Canada Centennial Scholarships 214

T w o C enturies o f Ba n king by the Num ber s

WOM EN IN LEADERSHIP The first women to hold senior positions at bmo . They were the first to break the glass ceiling at the Bank by assuming leadership positions across its operations.

1926

1939

1963

1967

1982

m&i Officer

Harris Personnel Officer

bmo Branch Manager

bmo Board Member

bmo Vice-Presidents

Gertrude M. Jacobs

Mary Kennedy

Rebecca Watson

Pauline Vanier

Deanna Rosenswig Dorothy Ottersen Catherine Irwin

2015 percentage of senior leaders who are women compared to 6% in 1991

37.5%

T w o Centur ies of B a nking by the Num ber s

215

bmo Today The final four charts offer four different perspectives on the present and future Bank. They are not meant to offer a comprehensive picture – just glimpses of the kinds of categories that will determine the success of bmo and Canadian banking in the future. Mastering these elemental categories – technology, employee engagement, training, and the system-wide stability of the Canadian banking system compared to the rest of the world – will be the primary responsibility of the current and future generation of leaders at bmo .

INVESTM ENT IN TECHNOLOGY Canadian banking investment in technology, 2005–14. Extraordinary investments in technology allow the people of bmo to confront and master the ‘creative gales’ of transformation coursing through the

industry. The application of these transformational technologies is very much an industry-wide phenomenon; hence, the view offered here of Canadian banking investment in technology, 2005–14.

Year 9.0

2014

8.2

2013

7.7

2012

7.0

2011

6.1

2010

5.8

2009

6.0

2008

5.3

2007

4.8 5.0

2006 2005 0.0

1.0

2.0

3.0

4.0

Source: Data courtesy of Canadian Bankers Association. Latest available data was for 2014.

216

T w o C enturies o f Ba n king by the Num ber s

5.0

6.0

7.0

8.0

9.0

10.0 $billion

EM PLOYEE GIVING The generosity of bmo employees – with time, effort, and donations – has become one of the defining features of the bank’s culture down

the years. The numbers are quite extraordinary, and reflect both an individual and collective ethos of community service.

Over

$82 million

donated and raised by bmo employees

More than

88,000

2011–15

91%

volunteer hours

Employee participation rate in United Way Campaign

2012–15 % Employee Participation Rate

2015

100 90 80 70 60 50 40 30 20 10 0

2011

2012

2013

2014

2015

T w o C entur ies of B a n ki ng by the N um ber s

217

INVESTM ENT IN HUM AN C APITAL Extensive training efforts for over two decades. bmo has been a recognized global leader in the training and development of its greatest asset: its people. Through the Institute for Learning (ifl ) [see page 39],

bmo has placed a top priority on investment in its own human capital. The result has been a superbly trained workforce ready to step up to the mark that a changing world is creating for them every day.

1994

Today*

1994

500

The ifl opened its doors

First bmo eLearning program developed

Leaders trained each year through custom internal and university programs

1.5 million Hours of learning per year

$

93.2 million

Spent on learning per year

* As at 31 October 2015

218

T w o C enturies o f Ba n king by the Num ber s

BANKING SYSTE M STABILIT Y AND SOUNDNESS A comparison of national banking systems, 2006–15, shows the stability of Canada’s banking system in international context. In contemporary times, Canada has had the soundest banking system in the world for several years running. Canada’s consistent top ranking is the product

of a blend of long-term stability in government policy, prudential regulation, and sensible and results-focused leadership from both the central bank and the chartered banks.

Soundness of banks (on a scale of 1 to 7)

7

Canada Australia Hong Kong sar Singapore

6

Luxemburg Switzerland G7 Countries – less Canada

5

4

0 2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Years

Source: Global Competitiveness Report, World Economic Forum, Switzerland, 2006–07 to 2015–16.

T w o Centur ies of B a nking by the Num ber s

219

THE “M ILLER” CHEST

T

he “Miller” Chest has occupied an unassuming corner of the Bank’s museum in Montreal Main Branch for decades. This first seemingly innocuous artefact was named for the man who built it sometime in the latter half of the eighteenth century. It predates by at least two decades the establishment of the Bank itself. The chest is the nineteenth century’s answer to the challenge of protection of valuables in transportation. By contemporary standards it is, of course, rudimentary. But this chest and a few others like it that have not survived have been in dangerous and forlorn places: in the back of a stagecoach, dragged through the snow, hauled through brush and forest, and through the worst that a northeastern North American climate could throw at it. It would have crossed rough terrain, rivers, lakes, and international borders. Because of its contents – the wealth, treasure, and vital information of the Bank and the merchants and customers it served – the chest was one of the most anticipated objects to arrive in settlements and military outposts with precious currency and specie, not only for bankers but also for their expectant customers. It is an artefact clearly intended for utilitarian purposes only: anodyne, anonymous, just a black box, nothing to attract attention. These treasure chests of yore were, of course, also great objects of desire and perpetually in the crosshairs of highwaymen and criminals. Often, a decent portion of the wealth of the community would end up in these chests, destined for more secure places or for investment. The chest is very much a physical reminder of the hardships endured in early Canadian banking. The Bank received the chest as a gift in October 1943 from Katie Drummond of Kingston, Ontario. Her father was Andrew Drummond, a lifelong Bank of Montreal employee who joined the bank in 1847. Her more famous uncle was Sir George Drummond, a general manager and later president of the Bank. The M ater i a l Cultur e of b m o B a nking

223

DEPOSIT LEDGER NO. 1

The First Database

T

he deposit ledger was not only vital to the business of the Bank – in many ways it was the business of the Bank, encapsulated in the oversized book form. More than any other artefact, these ledgers symbolize the early business of banking. They were, in a sense, the earliest principal database of the Bank of Montreal. Shown here is “Ledger A, 1817,” a general account ledger for the Bank spanning the years 1817 to 1820. The ledger covers an impressive range of the Bank’s business. The names of personal and corporate accounts fill the pages. In this particular ledger, the head office accounts for instalment payments for the original

shares in the Bank are recorded as well as exchange bills drawn and purchased, notes sent to Quebec for collection, interest accounts, and dividend payments. It also covered bills payable and receivable, cash on hand, and real estate and expenses. Banking, like life insurance, for example, was an information-intensive business from the outset. Accounts and ledgers were only the beginning: the entire structure of credit reporting and credit worthiness would become an important part of the business of banking as well. Later, adding more sophisticated tools such as economic reports, summaries, economic forecasts, and similar ‘networked’ statistics brought both depth and intensity to the Bank’s emerging world of information. So, at the very deepest layer of the history of the Bank, at its foundations, you will find the ledger – the ‘accounting’ soul of the Bank. This ledger appears

at least a generation or two before the emergence of accounting as a professional activity in both Britain and the United States – in the mid-nineteenth century, when it was defined by a prominent American author of the period as “the art of keeping Accounts in such a systematic mode, that we may be enabled to know the real state of each branch of our mercantile transaction with ease and promptitude.” By the later 1800s, ledger-based bookkeeping began to take on a more scientific aspect, with new ways of organizing account classifications and spawning the creation of the accounting profession. As the Bank grew and the banking system developed, the need for a more systematic approach to the procurement and recording of accurate information was required, revealing something approximating ‘objective truth’ in flows of capital and information into and out of the Bank.

THE CERTIFIC ATE OF STOCK

T

o the contemporary eye, this stock certificate looks standard enough, especially since stocks – in banks and virtually every other area of economic activity – constitute the universal language of capitalism, investment, and ownership. The original organization of the Bank under a joint-stock form allowed a group of Montreal businessmen and merchants to get together to establish and manage their new venture. Other banks, by contrast, could often be privately owned or run as family concerns, private banks, or limited partnerships. The Bank’s relationship to the stock certificate is a deep one. The shares in the “Montreal Bank,” were among the first shares to be issued in Canada. In the late 1810s, banking forms and institutions were only just taking shape across the North Atlantic world. Questions about private versus joint-stock forms of banking ownership and governance were being discussed and debated. How liable were the stockholders to be? The idea of “limited liability” for bank stock did not develop until much later. A detailed prescription for stocks, dividends, and the responsibilities of stockholders was carefully laid out in the Bank’s Articles of Association. The capital stock of the Bank was initially £250,000 divided into shares of £50 each.

Bank of Montreal stock certificates like the one featured here became a consequential type of document in the emerging economic and financial life of Canada. With other bank and financial stocks, it helped to create an early securities market in the country and a more sophisticated financial system of trade and exchange along with it. The development of the Montreal and Toronto stock exchanges were the result. Remarkably, a Bank of Montreal share dividend has been declared in every single year of its 200-year existence with two exceptions: in 1827 and 1828. This stock certificate is dated 16 March 1839 and certifies that two shares are held by Duncan McFarlane of Quebec. The certificate is signed by Peter McGill, president of the Bank, and countersigned by Benjamin Holmes, the Bank’s cashier. It comes with a curious instruction: to transfer the shares of “Montreal Bank Stock to William Bailey, Assistant Commissary General, reserving to myself any dividend or bonus that may be declared and payable in 1839.” This was likely done for the most classic of reasons: McFarlane owed money.

The M ater i a l Cultur e of b m o B a nking

225

THE BANK’S CORPOR ATE SEAL

T

his impressive artefact is the official seal of the Bank of Montreal. Its origins have been lost in the mists of time, but the impression it makes is of the Bank’s historic coat of arms used after 1837. Corporate seals were, and in many cases still are, used to certify official documents, deeds, or acts. This particular seal indicated the formal sanction of the Bank, its signature through an embossed imprint into wax of an official act. Artefacts, however, are rarely that straightforward. The seal is also a symbol of the growing power and authority of the Bank in both colonial Canada and in the North Atlantic world. It stood for the legitimacy of the Bank, underwritten by the reputation of the institution and the personal probity of its leaders. It represented a promise and a guarantee. In a world where it was difficult to procure information and verify reputation easily, symbols and seals were tangible manifestations of security, legitimacy, and trust. They were also extremely difficult to replicate, unique in their rendering, and so carried with them an element of security. When business people or customers saw the Bank of Montreal corporate seal on a document, they knew immediately what it meant and who stood behind it.

226

Th e M ateri a l C ulture o f b m o B a nki ng

THE WILLIA M NOTM AN ALBUMS, 1884

I

n 1884, one of Canada’s most famous and most prolific nineteenth-century photographers, William Notman, was commissioned by the Bank of Montreal to take photographs of the members of staff. Notman accordingly agreed to send “first class artists” to all the branches and have photographs taken. Notman’s studio in Montreal grew rapidly in the late 1850s and 1860s, especially after his photos found royal favour with Queen Victoria. His influence was cross-border, moreover: nineteen of the twenty-six branches of his firm were in the United States. The idea of Montreal’s most prestigious photographer photographing staff members was, according to the internal correspondence of the era, “received with good favour” – as well it might be. Photographs, as Notman’s biographers perceptively note, were not only the most common icons of the age but they also “represented more than a mere chronicling of events, more than the creation of ‘likenesses,’ more than a new voguish aesthetic. Rather, they exhibited and conveyed to others a sense of the century’s dramatic dynamism.” Of course, there were practical reasons – there always are – for the Bank to commission photographs of its staff. But one suspects that during the 1880s, the growing pride in the Bank of Montreal as an institution, the confidence of its people, and their place in the past and future of the country all warranted capturing the images of those who were making it happen. Notman’s massive and historically precious photography collection is at Montreal’s McCord Museum. The Bank of Montreal Archives has eleven albums of photos from the studio of Wm Notman & Son.

THE DICTOGR APH, 1970s

T

his extraordinary telecommunications relic was used in the executive suite of the Bank’s Montreal head office. It functioned as a supplementary intercom system to provide direct connection among a relatively small number of executives: the call buttons labels indicate this machine served the top decision-makers of the Bank in the late 1970s. The names on the switchboard are: G.L. Reuber (former president), W.D. Mulholland (president, 1975–81; ceo , 1979–89; chairman, 1981–90), J.A. Whitney (former executive vice-president and chairman, Credit and Policy Committee), H. MacDougall (vice-chairman), W.E. Bradford (former deputy chairman), J.H. Warren (former vice-chairman), W.E. Bateman (former executive vice-president and head of Corporate and Government Banking), R.H. Call (former senior vice-president, Corporate Planning), G.E. Neal (former executive vice-president and treasurer), Robert Muir (former vice-president and secretary), and four others, including Richard O’Hagan, the Bank’s communications mastermind of the 1980s. Judging from the cast of characters immortalized on the call buttons, the conversations connecting through this device must have been, at the very least, interesting, frequently important, and often taking place on the verge of momentous decisions for the destiny of the Bank. As several chapters in this book attest, in almost every sense, the late 1970s and early 1980s was a time of technological change, reorganization, and transformation of the global financial services sector. In other words, there would have been no shortage of subjects to talk about.

228

Th e M ateri a l C ulture o f b m o B a nki ng

M EMORIALS TO THE WORLD WARS

the individual names of those killed in action. Gardner spoke briefly: “Here are inscribed the names of those whom we shall see no more. They were our comrades. We mourn their loss, mindful too of those who were

near and dear to them. While we are gathered here in this busy financial centre it is well to remind ourselves that there are values in life more precious than those dealt with in the market place.”

Montreal Head Office, 1923 and 1951

“T

wice in a quarter century, the call to arms was heard … and our young men were not found wanting.” So begins the memorial edition of the Staff Magazine of 1951. These ‘artefacts’ are not so much objects as memorials to those who gave their lives to King, Commonwealth, and Canada. Of the 1,414 Bank employees who enlisted for the Great War, 230 of the men were killed. In the Second World War, 1,450 employees enlisted, with 84 of the men killed. For the fallen of the Great War, the figure of Victory is their memorial. She measures 9 feet in height, sculpted in white Seravezza marble, and stands upon a pedestal of Botticino marble, 8 feet high, giving a total height of 17 feet. At the unveiling in 1923, Bank President Sir Vincent Meredith’s remarks were brief but poignant: “We have met here to-day with mingled feelings of sadness and of pride, of sadness because two hundred and thirty of the bravest and best of our staff, those to whom we looked to fill the highest positions in the service, will not return to us. Of pride, because they went forward at the call of their King and Country to save the British Empire from the ruthless domination of a foreign foe. This beautiful monument will for all time remain a memorial for their valour, and their self-sacrifice will be to all of us an inspiring and enduring memory.” The memorial wall was unveiled on 24 April 1951 by Bank President B.C. Gardner in front of a crowd of Bank employees and relatives of the honoured dead. Together with Gordon Ball, general manager, he read

The M ater i a l Cultur e of b m o B a nking

229

THE CIRCUL AR

T

he circular memorandum began in 1855 and rapidly became the key channel for command, control, and coordination of an expanding information network and branch system. It was issued from the head office, typically from the general manager. As the Bank grew and extended its operations across the country and deepened its involvement in the New York and London markets, the circular dealt with an expanding range of subjects. Between 1855 and 1922, the Bank generated fifteen bound volumes of circulars issued from the head

office to branches and agencies in the network. The early circulars were handwritten, then duplicated by letterpress. The advent of the typewriter facilitated the production and distribution of these administrative orders and guidance. The subject matter of these circulars, taken together, offers a detailed picture of the growing importance of the head office in chartered banking in Canada. The highly detailed and prescriptive nature also suggests that new methods of scientific management were being brought to bear on the banking system. The great challenge in a transcontinental network of branches is the risks associated with too much local autonomy; these circulars are an attempt to anticipate those challenges. The circulars also offer a mosaic of branch and agency openings, staff changes, and performance

bonuses for staff (which were publicly circulated!), statistical reporting, new policies, alerts, and the like. It is through the circulars that we see the pulse of the expanding operations of the Bank of Montreal – its challenges and the opportunities it was able to seize. The circulars reflect a great push to standardize procedures and reporting, especially as the Bank grew in the late nineteenth and early twentieth century. They were also concerned with the establishment of an economic intelligence network, often asking branch managers to report on competitive and economic conditions in their area. In many ways, these circulars laid a solid administrative foundation for the Bank to grow consistently and with the integrity that so distinctively marked its operations in this period.

THE PASSBOOK

T

he passbook was a booklet issued by the Bank to an account-holding customer for recording sums deposited and withdrawn. From the Bank’s earliest beginnings to very recent times, this document was one of the most highly identifiable physical connections between the Bank, the branch, the customer, and his or her money. It was a personal document and an official record. This small document passed routinely between customer and teller after each transaction, thereby earning its name. Passbooks were a small but customer-focused innovation in how banks dealt with the personal and collective information flows about accounts. It certainly beat having customers occasionally check the large, unwieldy ledger account books. The Bank of Montreal Corporate Archives has passbooks that date as far back as 1820 – three years after the establishment of the institution. The cultural significance of the passbook should not be overlooked. In 1952, the Bank of Montreal was the first bank to have a children’s wicket where youngsters could make transactions (usually deposits, and usually held in trust). In this instance, the passbook’s relationship with the younger generation attempted to instill a sense of the value of money, savings, and thrift – in the contemporary parlance, ‘financial literacy.’ There is no question that most passbooks told a highly personal tale – individual stories of earnings, savings, interest, and withdrawals; stories of big circumstance, lucky and otherwise; stories of triumph and loss, hope and aspiration; stories of endurance and perseverance. The rise and decline of the passbook chronicles how information and its associated technologies change the way accounts are managed and experienced. Advances in mechanization and information storage facilitate continuously less expensive, more comprehensive, and certainly more convenient ways to deliver personal information – from passbook, printed statements, and instant online access to up-to-date statements any time of day or night.

THE JOHN WOOD CLOCK

Time Lords

T

his impressive clock presided over the main banking hall of the Molson’s Bank building on St James Street. It was ordered for the Bank in 1866 from John Wood, a noted Montreal clockmaker whose clocks also kept the measure of the racing hour at the Grand Trunk Railway Depot. This artefact was chosen because of the importance of the measurement and passage of time to banking. It governs so many aspects of the business of banking – the precision of the work schedule, the timing of opening and closing (the famous banker’s hours), the time-release locks on bank vaults, the timed deposits and interest, and so forth. Time is no longer connected to eternity, but rather with measurement. We need to understand not only what an object is and how it looks but also what it means to the people related to it. This clock had a commanding presence in the banking hall – everyone at all times was not only aware of the time but could also read it. Its classic Roman numerals and ornate wood casing hearkened back to the past, yet hid something transformational about the prominence of time. The clock’s installation in the 1860s came in a milieu where time, like many other elements of contemporary life, were being more regimented and standardized. It was in this era, after all, that standard time zones were introduced. The industrialization of the North Atlantic world depended on greater precision and a loyalty to exactitude and the schedule. Telegraphs and communications hastened the pace. Complex transportation systems increasingly relied on standard time to avoid calamity. Time becomes a commodity. When time is money, we value every second differently. Now, sometimes a clock is just a clock. But for Canadian bankers of the Victorian era, as for their broader society, we can sensibly suggest that their era was one in which the concept of time was shifting, morphing, adapting into something experienced differently than that of their predecessors in the profession.

THE BANK OF MONTREAL CENTENARY M EDAL

A

Centenary Medal was struck in 1917 to commemorate the Bank’s 100th anniversary. The Bank’s leadership began preparations to celebrate the landmark event the year before, just as the First World War was reaching an awful intensity in Europe and ever greater numbers of Canadian troops were joining the conflict. The Bank had two of its favourite firms of architects advise on the medal: Barott & Blackader in Montreal and McKim, Meade & White in New York. The latter had been responsible for some of the Bank’s most famous and enduring architectural symbols. The medals were conceived and executed by American sculptor Ulysses Ricci, whose artistry can be seen in a range of architectural sculptures in banks and large enterprises across the United States. The obverse features the most recognizable architectural landmark of the Bank of Montreal: the domed headquarters at Place d’Armes – complete with rinascimento facade, six Corinthian pillars, and a pediment holding one of the largest sculpture groups in the country executed by Scot Sir John Steell. The reverse displays the Bank’s coat of arms, wreathed on the periphery with the names of the presidents and general managers in 1817 (John Gray and Robert Griffin) and 1917 (Sir Vincent Meredith and Sir Frederick Williams-Taylor). The gold medals were struck in New York and awarded to Meredith and Williams-Taylor. The silver medals were struck by Henry Birks & Sons and awarded to the board of directors and the executive, the managers, and others with a quarter-century or more of service. The bronze medals were given to executives and managers with less than twenty-five years of service. This medal and its history reveals a great deal more than what is on the medal itself. It also shows how the generation in command one hundred years ago

decided to commemorate their history, who was to participate, what exactly was to be celebrated, and why. The medals, and their strict distribution protocol, showed how the values of service and loyalty were cherished by the leaders of the Bank. General manager Sir Frederick Williams-Taylor paid very close attention to the execution, the images, the font, and the rendering of the medal: nothing was to be left to chance, because the medal would be left to posterity – and they were to be ready, at all costs, by 3 November 1917. The small

number of medals struck is a further indication of the particular nature of the celebration. Commemoration of the centenary of the Bank also occasioned a brief but informative pamphlet history of the Bank, the mounting of the names, in bronze letters, of the 1817 and 1917 board and senior executive on a wall in the Montreal Main Branch, as well as some other festivities.

The M ater i a l Cultur e of b m o B a nking

233

RULES AND REGUL ATIONS FOR THE BR ANCHES

B

ecoming a great Bank in the nineteenth and twentieth centuries meant a lot of things. One of elements successful institutions had to get right was how to effectively reign over an increasingly complex and often geographically distant bureaucracy whose main purpose was to handle money. The answer for the banks of the late nineteenth century was strict adherence to rules and regulations. The rule book offers a glimpse into the regimented world of turn-of-the-century banking. The rule book featured here was published in 1901 under the authority of Sir Edward S. Clouston, the

234

Th e M ateri a l C ulture o f b m o B a nki ng

general manager, and was the possession of Bank Officer Campbell Sweeny. It was prescriptive, precise, and pointed. It covered an extraordinary range of responsibilities and duties about the business of banking, his staff, and the wider world. Article 7 requires the manager to “keep himself informed of the general news of the neighbourhood”; Article 21 required that the manager would “ascertain the general habits of his staff, and, if they are such as may affect the Bank’s interests injuriously … the circumstances shall be reported to Head Office.” Other instructions covered everything from the nature and use of telegraphic communications to the handling of nitroglycerine for oiling locks. There were 371 rules in the rule book. This document is very much a product of its times: demanding and didactic in laying down the law.

Of course, officers of the bank would have entirely expected such a document to do so in order to “secure a regular and faithful administration” in the affairs of the Bank. The preface admonished every officer to “make the book a study so that there shall be no excuse for departure from its instructions.” But rules and regulations, in whatever way they were called, updated, or communicated thereafter, constituted a vital part of making the system safe, minimizing risk, and ensuring the smooth functioning of Bank of Montreal banking. Many of the non-managerial functions listed in this 1901 rule book are now carried out or assisted by information technology.

THE GOLD SC ALE

T

his artefact is a gold scale from the Bank of British North America (bbna )’s Dawson City branch. The bank followed the Yukon gold rush of the 1890s, establishing a branch in Dawson Creek on 19 May 1898 to serve the active and sometimes chaotic gold mining industry there. “Our instructions were to spare no expense in reaching our destination as soon as possible,” wrote the branch’s first manager, David Doig. The bbna was acquired by the Bank of Montreal in 1918, and maintained a vibrant branch network in the country. The scale could be found on a desk in a frame-andcanvas tent on Queen Street in Dawson Creek. The scale had travelled with Doig and two bank clerks,

E.O. Finlayson and J.F. Stow, for forty-seven days – by steamer, dogsled, pack pony, and canoe over 1,500 miles from Vancouver to Dawson City. The trek itself has become the stuff of legend. The intrepid bankers had also brought $202,000 in cash to open the bank. The scale was an essential tool not only for the nuggets that would come in for sale but also for the gold dust that was used as currency ($17.50 to the ounce in 1898). The branch eventually found more secure premises: a twostorey wood building, 970 square feet in area, complete with a steel-lined brick vault. The town itself was essentially one unpaved street along the riverfront with log and frame buildings occupied by trading companies, saloons, dance halls, and brokers’ offices. “Gambling seems to be the staple industry, and the fleecing of ingoing Klondikers was

carried on merrily with great success in the most open and barefaced manner possible,” reported Doig. The population of 4,000 would swell to 25,000 in the summer months at the height of the gold rush. The Klondike camp was estimated to have produced $200 million in gold in the several years following its discovery in August 1896. The scale pictured here is symbolic of the readiness of the Canadian banks to adapt to changing economic conditions and opportunities, and especially to serve the unique nature of Canadian economic development – much of which has involved resource extraction or mining.

The M ater i a l Cultur e of b m o B a nking

235

THE PROTECTOGR APH

T

his machine was invented in 1870 as a means of protection against cheque forgers. The machine pictured here is the Todd Check Writer manufactured by G.W. Todd & Co. of New York. The machine quickly gained widespread acceptance among banks and large enterprises, with the company claiming 85,000 in use across North America. Check Writers were used to print the face value on negotiable securities in relief so that the value could be both seen and felt. The fraudulent alteration of cheques, securities, cash certificates, bills, receipts, and other forms of exchange instrument was a continual challenge for financial institutions. This machine printed a mark before the digits in the face value, which made it impossible to change the amount after the cheque had been printed. The corrugated surface of the digit stamps was pressed into the paper fibres, which absorbed the special ink. This technique made it virtually impossible to erase or even chemically remove the printed money value. This machine is a testament to the power of the darker side of banking – the eternal struggle to keep money in the hands of those whose money it is, and out of the hands of those whose money it is not. The Protectograph was part of a long line of technologies aimed directly at keeping the bank and its customers safe from fraud.

236

Th e M ateri a l C ulture o f b m o B a nki ng

THE BLICKENSDERFER T YPEWRITER

T

he typewriter appeared at a time when the Bank and other information-intensive industries were beginning to collapse underneath the weight of the data and information they had to process. Information control and processing became not just a challenge but also an imperative. The typewriter was invented in 1873 by C.L. Sholes, a Milwaukee journalist, and marketed by the Remington Arms Co. in the United States. The technology went through various iterations and improvements, including the introduction of “ten-finger typing.” The diffusion of the typewriter would, in time, become an important influence in the unfolding information revolution of the late 1800s by allowing faster processing of data and a reduced dependence on often hard-to-read handwriting. The typewriter was also a key agent in the transformation of nineteenth-century management, putting it on a more solid systematic and ‘scientific’ basis. The typewriter also began to change the organization of work and the composition of the workplace. The skills demanded by the typewriter, as well as the growth in office jobs generally, opened doors for women to enter the workplace. By the end of the century, the majority of stenographers and typists were women. The Bank’s adoption of new information processing technologies such as the typewriter allowed it to manage its growing business both at the local point of contact in the branches and in the regional and head offices. As we have seen with other artefacts, banking was becoming a highly regulated and regimented business. In fact, it had to be in order to stay on top of its growth and the increasing complexity of managing a large enterprise. The typewriter can be considered the workhorse of the information age at the turn of the twentieth century. The typewriter pictured here was invented by George C. Blickensderfer. It was a small, portable

writing machine that had the advantage of changeable type styles – a unique design feature. And the Blick typewriter was priced lower than the more expensive models. It had yet another advantage: it was one of the first truly portable typewriters with a full

keyboard – not the qwerty keyboard most of us are used to, but the dhiatensor keyboard. The Blickensderfer Model 7 seen here, offered in 1897, was the deluxe version of the basic design.

LEDGER FOR FOREIGN AGENTS, 1885

“F

oreign Agents Ledger 14th July 1885 to 30th April 1901 Bank of Montreal Head Office, No. 10” is a record of the Bank’s transactions between itself and its international agencies and foreign banks. The entries span the North Atlantic world, detailing the Bank of Montreal’s connections with its Chicago and New York agencies, the Bank of New York, the National City Bank of New York, and several other New York banks. The ledgers also detail the relationships between the head office and the branch at St John’s, Newfoundland. The London sections are particularly noteworthy, as the Bank was active in the City through its own agencies and operations there, as well as with the Bank of Liverpool. Their handling of the Dominion of Canada accounts in both London and New York were especially relevant. The connections into the North Atlantic world of finance exemplified here extend back to the very beginning of the Bank’s operations. Three months after the Bank opened for business in November 1817, Prime, Ward, and Sands were appointed agents of the Bank in New York. For the main Canadian colonial bank, such links were vital to the success of the Bank as the capital markets in Canada were slow to develop. The networks of finance and capital that were so created – and that are in a sense captured in this foreign agents’ ledger – reveal a kind of first wave of globalization that was binding together the North Atlantic world in the nineteenth century. As a country that depended so heavily on international connections and terms of trade, the Bank of Montreal’s connections and correspondences helped to generate, foster, and strengthen Canada’s bonds of commerce and exchange with the rest of the world.

VICTORIAN CRYPTOGR APHY

s described in Speed, Distance, Access, page 89, and bmo Bankers and the Dream of Nation, page 149, the telegraph was a vital part of the transportation and communication revolution of the nineteenth century. It heralded the death of distance and the acceleration of decision-making. It was vital to the information and control-processing revolution. For financial institutions, technological transformation, then as now, can lead to complete financial transformation. Transmitting intelligence and sensitive financial data through public telegraph lines demanded a code language. The one developed by the Bank was

continuously updated down the years. As the introduction to one such codebook (in 1960!) suggested: the codebook’s purpose was “to conceal the meaning of messages and to minimize telegraphic charges. Important or confidential messages should be closely coded in order to disguise the meaning as far as possible; where there is not the same need for secrecy, economy of words is the primary objective.” The codebooks were high-value intelligence documents and so were kept in a safe or a locked compartment in the custody of the manager or accountant. The chain of custody during office hours was carefully set out, and only authorized personnel would be able to see or use the codebook. Here are some examples from the 1887 codebook of the kind of cyphers used – randomly selected and perhaps unintentionally amusing!

Information

Information in Cypher

The Number “2”

Above; in Pounds Sterling: “Abreast”; in Dollars: “Abridge”; in Cents, “Abridgement” “Extort” in Pounds Sterling “Extorted”; in Dollars “Extols” “Furnishes”

Telegraph Codebooks

A

The number “10 Million” “Cannot Open Vault; lock out of order; have sent for locksmiths to ____: Panic in Montreal Panic in New York You have made a mistake – Bank of Nova Scotia Bank of Toronto Baring Bros. & Co. Bank of Montreal Head Office Canadian Bank of Commerce Bank of England

The Bank of Montreal Corporate Archives has a collection of telegraph codebooks from 1878 to 1965,

“Jerking” “Jerks” “Notoriety” “Raging” “Ransack” “Rational” “Plutonic” “Remember” “Plodding”

including those from the Merchants Bank of Canada, the Molsons Bank, and the Harris Bank in Chicago.

The M ater i a l Cultur e of b m o B a nking

239

M INUTE BOOK H, 1905–09

T

he Bank’s Minute Books began the official record of the meetings of the board of directors on 9 August 1817 and have continued since. The books form a virtually complete factual record of the decisions taken by the board, including the opening and closing of branches, the hiring of personnel, loans, advances to companies, note circulation, new currency issue, and the like. The Minute Book is, therefore, one of the classic documents of Bank of Montreal history. This particular Minute Book records the decisions and actions of the board between 26 December 1905 and 26 August 1909. More than a few entries deal with counting and burning notes in circulation (an important board responsibility at the time). Approvals for loans made, bills discounted, and exchanges purchased also figure prominently. This period was also witness to a number of acquisitions that required board approval, in particular, the purchase of the Ontario Bank in 1906 and the People’s Bank of New Brunswick in 1907. What you typically won’t find in these Minute Books are debates and proceedings. Who said what, who agreed and disagreed, who objected, who promoted a cause – all of those elements need to be sought elsewhere in the historical record. What the books do contain, however, is a precious weekly account of the emergence of Canada’s senior bank. In contemporary times, boards naturally do not meet as frequently – typically on a monthly basis. The Minute Books contain the tangible results of the strategies deployed, the decisions and risks taken, successes celebrated, and dangers confronted or averted. Reading them from week to week, cover to cover, volume to volume offers a glimpse at the structure and construction of Canada’s first bank.

240

MONEY BOXES

M

oney boxes, penny banks, piggy banks: whatever the name, the desire to secret away hard-earned coins is as old as the notion of saving itself. The origins of the folk practice of using piggy banks is said to come from the habit of using clay jars (‘pygg pots,’ named after the rudimentary type of clay used to make pottery). By the nineteenth century, these piggy banks became objects of pleasure meant to inspire children to the virtue of thrift while having a bit of fun in the process. It was a practical but subtle way to induce financial literacy in the young! The choice of theme underscored moral principles or lessons: a mother eagle feeding its young, or the recalling of a familiar and popular story. The two mechanical money boxes pictured here from the Bank’s heritage collection do both. The first is the “Eagle and Eaglets” – a cast-iron bank with a large eagle standing on one side facing two of its young in the nest. When you place a coin in the eagle’s beak and press a lever, the eaglets rise from the nest looking for food. As the eagle bends forward to feed them, the coin falls in the nest and disappears. The device was patented by Charles M. Heen of Chicago in 1883 and made by J. & E. Stevens Co. The second bank is called “Jonah and the Whale” – a rectangular cast-iron coin box with the biblical personage Jonah in a small boat on top at one end and a whale at the other. A coin is placed on Jonah’s back, a lever is pressed on the left side of the base, and Jonah is ‘swallowed’ by the whale (as in the Old Testament story from the Book of Jonah) – and the penny, of course, follows. The bank was patented by Peter Adams in 1890 and manufactured by the Shepard Hardware Company.

CHA M PIONSHIP TROPHY, MONTREAL BANKERS HOCKEY LEAGUE

T

242

he artefact pictured is a sterling silver trophy on a wooden base, presented by the American Bank

Th e M ateri a l C ulture o f b m o B a nki ng

Note Company to the Montreal Bankers Hockey League in 1911. Growth of the Bank across the country as a financial institution also meant growth as a social and cultural institution. The corporate culture of the Bank is expressed not only in its values, principles, what it does, the tools it uses, and how it works but also in the way it plays. For the people of the Bank in the head office and the branches, being a Bank of Montreal employee

involved a tangible sense of belonging, an esprit de corps that has manifested itself in vastly different ways across time and space. In the first part of the twentieth century, Canadian business institutions from finance to manufacturing were spawning large corporate organizations burgeoning with young clerks and aspiring professionals looking for something more than work. Naturally, many of them turned to hockey. The Montreal Bankers Hockey League was established in 1903 when Bank of Montreal President Lord Strathcona offered a cup to the best bank-clerk hockey team. Many major branches across the country fielded teams, and the leagues were in hot competition. As this artefact shows, the major struggle between 1911 and 1922 for the championship of the league was between the Bank of Montreal and the Royal Bank of Canada, with the Bank of Commerce firmly in third position. During those years (with a break during the war years), the Bank of Montreal won the trophy three times, the Royal Bank twice, and the Commerce once. Branches from other cities such as Toronto, Hamilton, Winnipeg, Saskatoon, Edmonton, and, in fact, most every other major city in Canada also fielded competitive teams in their district and in a number of leagues (Commercial League, the Bankers Hockey League, the Financial Hockey League, and a host of others across the Dominion). Some of the players would go on to play nationally in professional leagues. Bank hockey matches routinely attracted impressive numbers: in Montreal, between 4,000 and 5,000 fans would come to every game and cheer on their team. Hockey was not the only sport in which Montreal bankers competed, and the sports were not restricted to men. Tennis was popular beginning in the 1930s (especially women’s singles). Skiing became particularly popular in the 1970s and 1980s. Each generation seeks recreation and pursues leisure in different ways. Generations of Montreal bankers turned to sports in large numbers, as individuals and as members of teams, playing on fields and in arenas across the country.

THE PENSION FUND SOCIET Y SEAL, 1884

T

he Pension Fund Society of the Bank of Montreal was established on 1 July 1884 with assets of $263,677. It was organized to provide for retired Bank officers and employees “incapacitated through age or infirmity,” with a provision for annuities to widows and minor children upon untimely death. An Act of Parliament was passed officially setting the Society into legislation on 1 May 1885. Bank employees initially established an organization for this purpose in 1860; at that time, it involved up to two-thirds of the officers of the Bank. The original provision was to pay a pension to any employee of the Bank with ten or more years of service, who was over sixty years of age, and declared to be incapacitated or infirm from properly performing his duties. The pension was to be 1/50th of his or her salary at the date of superannuation for every year of such service in the Bank up to 35/50ths of the salary. It was also not to exceed $5,000 per year. The terms and rules changed substantially over time of course, and as the Bank grew. The pension fund was among the early examples of its kind in Canada. Its private nature meant that provision for long-serving employees could be made while creating a pool of capital that could be invested for future provision. The bylaws and structure of the Society have changed significantly down the years, but the Society itself is one of the longest-running pension funds in the country. In June 2015, members approved the Society’s dissolution, and in February 2016, the pension plan transitioned to a modernized trust structure. This artefact’s date of origin is unknown, but it is likely that the 22-pound seal was struck not long after the incorporation of the Society.

The M ater i a l Cultur e of b m o B a nking

243

M ANUAL FOR TELLERS, 1965

244

Th e M ateri a l C ulture o f b m o B a nki ng

F

or most of its history in the last three generations, the Bank of Montreal has been one of the country’s largest training organizations – by virtue of its size and the necessity to confer constantly evolving personal, business, and technological skills across a widely distributed workforce.

This artefact comes to us from the 1960s and was required reading for every teller in the system. The booklet outlined the basic tasks and responsibilities of a teller, including sensible advice about handling cash books, cheques, frauds and forgeries, utility payments, payrolls, and such like. The language, tone, and attitude of this document represented a significant departure from its more, shall we say, didactic instruction manuals of the previous generation. The foreword begins: “As bankers, we are engaged in a service industry. Service means helping people .” There is an explicit recognition of the primacy of the customer and the importance of customer service. “The Bank of Montreal has nothing to sell except banking services,” the foreword continued. “Our competitors have the same services for sale. The only difference there can be is the more friendly and efficient manner in which the staff of the B of M render these banking services to customers and to the public.” The manual underlined the need for accuracy and precision in the teller’s work, but by far the greatest emphasis was on attitude toward the customer. “They are not an interruption to our work – they are the reason for it … We’re not doing the customer a favour by serving him; he is doing us a favour by maintaining his bank account with us. He is not an outsider to ‘my bank’; he is the most important part of it.” The emphasis on the role of the teller in the Bank was properly placed – they were, indeed, most often the first point of contact with the wider public. The teller position was also the employment entry point for women joining the Bank. In fact, in the Canadian banking industry of the 1960s, women comprised the majority of the workforce – in 1960, 55.6 per cent and by 1970, 67.1 per cent. In the coming years, that female workforce would begin to push beyond the confines of the counter wicket to the executive office to help guide the destiny of the Bank.

“… that thou mayest prosper …” THE BANK OF MONTREAL/ WASK AGANISH BELT, 1994

T

he Bank received this leather belt as a gesture of friendship from the Cree community of Waskaganish on the occasion of the opening of the Bank’s branch in the town, located at the southern tip of James Bay at the mouth of the Rupert River. In exchange, the Bank presented Billy Diamond, chief of the Waskaganish First Nation, a scholarship to be awarded to a top-performing student aspiring to a career in business.

This was the Bank’s first Aboriginal branch in Quebec. In order to serve the Cree community there, the Bank translated key banking forms and product brochures into Cree and recruited its personnel from the community. Information sessions on the banking system for elders, youth, and the broader community were also part of the integration of the Bank into Waskaganish. The Bank also became the official sponsor of the 1994 Inter-Band Aboriginal Games, in keeping with its commitment to the Aboriginal community. The Bank moved into Aboriginal banking in 1992, with Senior Vice-President Ron Jamieson as the Bank’s first executive in charge of the Aboriginal Banking portfolio. The objective: to contribute to the economic self-sufficiency of Aboriginal communities,

businesses, and individuals across Canada. This was the fifth branch of its kind on First Nations territory, with branches already on reserves in British Columbia, Northwest Territories, and Ontario. The Bank had also collaborated with the federal government to ensure that individuals and enterprises on reserves were eligible for small business loans and other forms of government incentives to promote business. In contemporary times, the Canadian Council for Aboriginal Business has recognized the Bank’s commitment to Aboriginal peoples with multiple Gold-level Progressive Aboriginal Relations (par ) certifications. Certification signals First Nations communities that these companies are good business partners, great places to work, and committed to prosperity in Aboriginal communities.

M-Bar Chic? THE PROMOTIONAL BOW TIE, 1977

T

his artefact comes directly from the Bank of Montreal promotional catalogue of March 1977. It featured a whole range of sales promotion aids to “familiarize you with various materials and concepts created to help your branch increase business.” The catalogue suggested that each aid could be considered a “specialized tool” to sell activities. The bow tie ($5.95 for the regular, $2.95 for the clip-on) was just one of a number of personal items for sale that included earrings, bracelets, cufflinks, tie bars, lighters, pencils, charms, and the like. The tie came in blue, brown, or burgundy. Branded clothing would likely not have suited every taste, but this comes down to us as an artefact of a particular age that began to test the limits of promotion. In its enthusiasm to promote the Bank’s services, the catalogue offered unorthodox, sometimes cool, sometimes lighthearted ways to get the message across. This branding also remains a way to telegraph the firm’s image in unexpected ways, while having the employee feel an additional connection to the institution. An M-Bar on a bow tie is fun and outlandish, and like the branded cigarette lighter, can fall in and out of fashion according to contemporary mores and tastes. What is elegant and chic in one decade may look dated in the next. Tastes and usages have evolved somewhat since 1977. Yet, the desire to promote your brand and perhaps have some fun in doing so seems to be a constant!

246

Th e M ateri a l C ulture o f b m o B a nki ng

bmo Harris’s Lionheart HUBERT T. LION

H

ubert is a cartoon lion who helped the Harris Bank introduce itself to the world of retail banking in the late 1950s. When the Harris bought the Chicago National Bank in 1960, Hubert’s image helped to establish a warm, friendly image for the Bank. By any measure, Hubert has been a remarkably durable and successful ‘spokeslion’ for the Bank and the most recognizable symbol in Chicago banking, for years vaulting Harris into the leading-bank position in terms of advertising. Hubert the Lion has a long pedigree. The Harris Trust and Savings Bank began using the lion as its symbol in 1911, but the Harris family association goes back to the bank’s founding in 1882. The cartoon character had several parents. Dr Agha, a New York art consultant, did some layouts that would prove to be the forerunner to Hubert. From this idea, Ben Laitin, Norm Houk, and Dick Weiner of Leo Burnett Company, an advertising agency, developed the cartoon character “Hubert the Harris Lion” in the fall of 1957 for the 1958 advertising campaign. Hubert first appeared in the Chicago Tribune on 26 March 1957. The bankers of the Harris agreed to the name – after some suggestions were considered and discarded (Harris, Leo) – and used the spokeslion for a savings advertising campaign. Later consideration of a possible name change elicited a memorandum from Hubert himself on 6 February 1958 (on Leo Burnett Company letterhead, however) agreeing to a “face-lift” but resisting any name change. “Hubert is just right for my new role. Aristocratic but not snobbish. Unusual but not bizarre. Faintly amusing but not snicker-making. Dignified but not stuffy. So why can’t I be Hubert, like I was christened … Shucks fellers. Why not just let me be? Hubert that is.” Hubert was a sensation, commanding widespread attention not only from the public but also from public relations professionals across the United States. He

was used in print from 1958 on. He debuted on tv in 1962 with a series of animated twenty-second spots and eventually became one of the most recognizable fictional animals in the United States, alongside Smokey Bear and Tony the Tiger. Hubert also knew how to draw new customers with Hubert-inspired promotions that set records. His popularity continued on television. He was reproduced in ceramic cookie jars, clocks, and the original Hubert doll. If Leo Burnett created Hubert, it was Chicago-area artist Sam Koukios (1929–2009) who standardized Hubert’s look. Koukios was the official Hubert artist for over three decades, called upon for virtually every advertising campaign when Hubert was needed. On Koukios’s death in 2009, Senior Marketing Executive Justine Fedak eulogized him as the artist who “brought so much character” to the lion, ensuring Hubert kept with the times. Hubert has become one of Chicago’s most recognized and beloved icons. He has also been one of the most successful advertising phenomena in the history of Chicago banking. Hubert has transcended his category to symbolize trust, comfort, and credibility in the Bank’s offerings and expertise. He has also become a cultural phenomenon with whom bmo Harris bankers are proud to be associated.

The M ater i a l Cultur e of b m o B a nking

247

EPI LO GU E

T

his book has presented a complex and comprehensive cross-section of two centuries of the history of the Bank of Montreal. I have tried to offer a fresh perspective about what we believe we know about the Bank’s history by momentarily taking 200 subjects out of their time-bound context. It gives us a chance to look at them in a new way, as if for the first time. It allows us to re-present them through a multi-dimensional yet integrated approach.

Subjects vs. Objects This book has dealt with subjects rather than objects – a subtle but important difference. A subject can simply be something that is a theme or an issue. It can also be a branch of knowledge. As an adjective, a subject becomes something affected by an occurrence or environment, subordinate to the power of another. As a verb, subject becomes something that causes or forces something to happen. By contrast, an object is acted upon, presented or placed before – as a material thing.

The people, the events, the symbols, the projects, the technologies, the environments, the buildings, and the elements that make up the Bank’s story were in varied ways, subjects. In vastly diverse arenas and time periods, they exerted influence and, at the same time, were shaped by their environment. Individually, each entry – from the founders, to the documents, to the days of decision, to the performance charts, to the special artefacts chosen to represent the material culture – forms a piece of the Bank’s history, contributing in its own way to the larger story, sometimes in epic ways, sometimes in infinitesimal. Without exception, each piece of the bmo mosaic contributes to a complex contemporary portrait of Canada’s first bank, and one of Canada’s founding institutions.

Revel ations This book allows the Bank to be seen through 200 different subjects over time. It has attempted to capture the richness and the complexity of the historical and contemporary record. However,

mere objects could not hope to portray that rich experience on their own. That much, I hope, is obvious. Thus, from researching and writing this book, there are some subtler elements about the making of the Bank of Montreal that I would like to share as a final reflection. They relate not to the many parts, but to the whole. In physics, unified field theory suggests fundamental forces and elementary particles, once thought distinct, diverse, or separate, can be considered a single field. This is an elegant metaphor for thinking about how things cohere together and what they tell us. So in this case, what does the Bank of Montreal’s ‘single field’ – its universe – tell us? What is first striking about the bmo experience through these two centuries is the dialectic relationship between dynamism and form, between the energetic ability to adapt and the structures that endure. (This relationship has been written about in other contexts, most brilliantly by twentieth-century scholar Paul Tillich.) Whether it was building a financial system, promoting

economic development, or competing in regional, national, and global markets, it was the people who made a positive impact at the Bank. The leaders mentioned here, and those countless Bank employees who made the Bank better and reside in posterity, were able to build a successful formula by striking the right relationship between the strategic response of the moment while envisioning and carefully building forms built to last, structures and reputations. Also striking are the subtle continuities that persist in the history of the institution. The differences are easily enough spotted. The contrasts between Edwin King’s Bank of Montreal (1860) and Bill Downe’s bmo (2017) create a high-definition portrait of discontinuities in strategy, style, attitude, vision, and mission. The continuities show how through ten generations, the people of this organization spent their best powers in building a Bank that aspired to build; a Bank that was deeply committed not only to its own people (leaders, investors, shareholders, employees), naturally, but also to a larger set of causes over time – nation building, community engagement, the development of specific economic sectors, securing the place of Canada in the financial world, and the list goes on. Not least, the foundation of the Bank’s business – the customer – has undergone a constant transformation across the centuries. So, a paradox: the ‘history’ shows that the Bank has been deeply engaged in something very much focused on the ‘present’ and the ‘future’: adaptation and transformation. Adaptation: to constantly changing environments – government, regulatory, market, customer-focused. Transformation: technological, strategic, administrative, social, cultural,

250

EP ILO GUE

national, regional, global. Those changes did not happen always at the same speed, nor with the same tools or strategies, but they happened consistently and, over time, responded to the unique circumstances that presented themselves. Each chapter shows that unbroken arc of history in one form or another: people, buildings, tools, advertisements – all of it. To borrow a popular contemporary phrase, all of it makes up the dna of the Bank of Montreal – the “instruction manual” for building life forms. For those who think, okay, most big Canadian banks share a large part of their dna , they would be right. Similarly, humans and chimpanzees share 98.8 per cent of their dna , yet the differences are obvious! That 1.2 per cent is crucial. The point is that institutions can be similar, and yet very different. So it is with each of Canada’s great chartered banks. So it is, in particular, with Canada’s first bank. It’s the combination, the sequence, the dna ‘pairings’ that make the difference and allow similar national and enterprise cultures to share much yet assert their uniqueness. I leave you with a final thought, one that dwells on both transformation and vision. The Canadian Museum of History in Gatineau features a remarkable work by Kwakwaka’wakw artist Beau Dick – a transformation mask. When the mask is closed, we see Raven. When it opens, we see the first human being between the split image of a bird flanked by two supernatural Wolves. At the Brooklyn Museum in New York, a mask shows Thunderbird; opened, it reveals a human face flanked by two lightning snakes. At the Field Museum in Chicago, a transformation mask created by Xániyus (Bob Harris) before 1893 (Kwakiutl, Vancouver Island) shows a shamanic figure when opened. These masks of the

Northwest Coast First Nations tell of change and transformation. The structure of these double masks allows them to show an outer mask and an inner mask, past and present, before and after, but all in a close relationship, both part of the same mask. The history of an institution as complex and deep as that of Canada’s first bank has striking parallels to these extraordinary cultural tools. Over time, a transformation takes place. What you see changes into something that is related, but distinct; unified, but somehow new and separate. Over time and space, over the course of this book, what one sees at the beginning changes into something else, but a shared connection always remains. In my introduction, I suggested that the vision to which people in the Bank across the generations aspired has been plural and multiple. It changed in substance over time. In the end, that vision ‘greater than themselves’ was ultimately about the future – how to succeed in it, how to secure it, and how to make it happen in a complex, uncertain, and competitive world. That’s the spirit that the Bank of Montreal carries with it into the next century of its experience.

ACKNOWLEDGMENTS

A Vision Greater than Themselves has been an ambitious project. It began life as a challenge: Chief Executive William A. Downe’s challenge to me to produce a history that was conceptually innovative, relevant, and broadly accessible, and that captured the spirit of the Bank of Montreal as a dynamic organization in time. Historians are at their best when they can meet the challenges that their audiences set for them. In large part that is what has animated the conceptualization, research, and writing of this book. My greatest debt, therefore, is to William A. Downe. From the commanding heights, some leaders can see how everything is connected in time and space – past, present, and future: a vision beyond. Bill is just such a leader. He is also someone who creates the conditions for great things to happen. I also take pleasure in thanking Mr Downe’s predecessor, F. Anthony Comper. Mr Comper’s support of forerunner historical projects helped to lay a foundation for both this project and for the definitive history that is to come. There are few who possess a greater or finer sense of the historical spirit than Tony Comper. My thanks, therefore, is not merely formal, but heartfelt.

Acknowledgments in books such as these have a danger of becoming name-checking exercises. I will try, instead, to give you a sense of my debt to people. The procession begins with the Bank’s Book Committee under the chairship of Brian J. Smith, who has watched the bmo universe unfold as it should for many years. Thanks are extended to him and to the committee. The fact that their work is not yet done (there is a definitive history on its way) is even more of a reason to thank them for their service thus far. David J. Montgomery has earned a special place as one of the project’s earliest and most convinced supporters. I thank Maurice Hudon, Paul Deegan, and Peter E. Scott for their counsel and commitment to this project. To this list, I add all those who helped us along the way with the procurement of hard-to-get images, dossiers, and statistics. There are so many who have also helped me personally on countless occasions. Thank you, John D. Stoneman, Charis Willats, Carole Lam, Nina Adloo, and Emily Rugole. My heartfelt thanks to the Bank’s Bicentennial Committee under the executive sponsorship of L. Jacques Ménard, cc , oq , whose personal support and friendship have been one of the most satisfying

aspects of my work. I also thank Claude Gagnon for his encouragement and generosity. This book would simply not have been possible without the assistance and enthusiastic support of the Bank of Montreal Corporate Archives – Yolaine Toussaint, archivist; Shawna Satz, associate archivist; and Erin Bienert, associate archivist. They have spent countless hours on thousands of requests and made the impossible possible. Thank you. Intense projects forge intense collaborations. Sometimes they create new friendships and connections. Ron Taylor of bmo has contributed a great deal to this project and has done so with an eye for the right image and angle, a superb work ethic, and a humanity that tamed passions and got things done. Thank you, Ron. Exceptionally, fortune or circumstance allows a figure to rise: the right person at the right time. Fiona M. Skelding is such a person. Fiona’s passionate intelligence, her spirit and insight, her unstinting support of bmo and its history, and her friendship have been an unfailing inspiration. Fiona, you have my sincere gratitude. Historian Tim Müller has been my assistant on this book since its beginning. His superior organizational

skills, research capacities, and high sense of professionalism allowed this project to proceed as smoothly as it did. Combine an extraordinary capacity for work, a commitment to operational excellence, and an extraordinary expertise in Bavarian beer – all of which were important in the making of this book – and you have a sense of the debt I owe to Tim. Thank you also for your loyalty and friendship. I reserve a special place of honour for Miada Neklawi, a vice-president of communications for the Bank. She has been the project’s guardian angel, guiding it from the very beginning. All institutions have their pathfinders, those who find a way. Miada has acted as both advocate and champion at key times. Thank you. The McGill-Queen’s University Press has been my home for two decades. Executive Director Philip J. Cercone has built an institution to the greater glory of Canadian publishing. To you, maestro, and to your team, my heartfelt thanks for your uncompromising commitment to producing books of the highest distinction.

252

AC KN O W LEDG M ENTS

Finally, I offer thanks to my wife, Flavia, my greatest supporter whose self-sacrifice has contributed in hidden but important ways to the success of this book. From different disciplines and perspectives these people have rallied together around the idea that their history matters, that it is worth doing right, and that it should be understood, celebrated, and shared. That many have done so with such professionalism, generosity, and warmth is something I shall always cherish. Their commitment pays eloquent tribute to the spirit of the contemporary Bank of Montreal.

Dr Laurence B. Mussio Montreal, Quebec June 2016

A N OTE O N SO U RCES

A Vision Greater than Themselves: The Making of the Bank of Montreal, 1817–2017 has relied on intensive and extensive research. A total of 30,000 pages of original research informed the direction and contents of this book. The author and his team compiled over 1,000 image options for the book, and reduced the 1,200 artefacts available at the Bank of Montreal Corporate Archives to a final twenty-five. After the chapters were outlined and related subjects were chosen, a research dossier that could run as many as 200 pages was prepared. It contained relevant sources from the Bank of Montreal Corporate Archives both in Montreal and Chicago as well as from several other public and private repositories in the North Atlantic world, including Library and Archives Canada and the National Archives of the United Kingdom. The dossiers included a variety of secondary sources drawn from the literature relevant to the subject matter at hand – biographies, articles, books, and monographs. In some cases, the records of the contemporary Bank of historical value but not yet in the archives were consulted. A few of bmo ’s divisions were also conscripted to offer assistance with specific entries, and especially with image procurement. In 2017, Whom Fortune Favours: The Bank of Montreal and the Rise of Canadian Banking, 1817–2017 will be published by McGill-Queen’s University Press, the

publisher of this book. The forthcoming book is a very different undertaking from the one you are reading now: it will draw on massive archival documentation to produce the first definitive, professional history of the Bank of Montreal over two centuries. As a substantial contribution to Canadian business history, that volume will include an extensive bibliography that will cover all the sources also used in this book. In the meantime, following is a reference list of direct quotations appearing in the text that come from an external source. Direct quotations that come from internal Bank documents or sources, or primary evidence from other archives and repositories, are not referenced here, but will be included in the scholarly work.

The Founders through Time page 6: “He believed that the existence and value of good [securities] should be made known to all potential buyers”: Jay Pridmore, Harris: A History of the Bank. page 10: “The object of this Trust is to give the investor of moderate means the same advantages as the large Capitalists, in diminishing the risk in investing in Foreign and Colonial Stocks, by spreading the

investment over a number of stocks, and reserving a portion of the extra interest as a Sinking Fund to pay off the original capital”: Neil McKendrick and John Newlands, f&c : A History of Foreign and Colonial Investment Trust. page 10: “it was the precocious talents of City lawyer Philip Rose”: Neil McKendrick and John Newlands, f&c: A History of Foreign and Colonial Investment Trust. page 10: “trustworthiness, security, prudence and reliability”: Neil McKendrick and John Newlands, f&c: A History of Foreign and Colonial Investment Trust. page 10: “be remembered as a zealous and wise reformer, and as the boldest judge who ever sat on the English bench”: Neil McKendrick and John Newlands, f&c : A History of Foreign and Colonial Investment Trust.

Determining Destinies: Leaders and Leadership page 14: “Commencement on the Grand Stage of the World”: Alfred Dubuc, “Molson, John (1763–1836),” in Dictionary of Canadian Biography, vol. 7,

University of Toronto/Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/ molson_john_1763_1836_7E.html. page 14: “reject all national distinctions”: Alfred Dubuc, “Molson, John (1763–1836),” in Dictionary of Canadian Biography, vol. 7, University of Toronto/Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/molson_ john_1763_1836_7E.html. page 15: “most striking figure in Canadian banking history”: R.E. Rudin, “King, Edwin Henry,” in Dictionary of Canadian Biography, vol. 12, University of Toronto/Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/king_edwin_ henry_12E.html. page 15: “Napoleon of Canadian Finance”: R.E. Rudin, “King, Edwin Henry,” in Dictionary of Canadian Biography, vol. 12, University of Toronto/Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/king_edwin_henry_ 12E.html. page 15: “King of Canada”; “a little God who dares to treat the representatives of all other banks”: R.E. Rudin, “King, Edwin Henry,” in Dictionary of Canadian Biography, vol. 12, University of Toronto/ Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/king_edwin_henry_ 12E.html. page 15: “truculent and uncompromising”: R.E. Rudin, “King, Edwin Henry,” in Dictionary of Canadian Biography, vol. 12, University of Toronto/Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/king_edwin_henry_ 12E.html. page 15: “very peculiar”: R.E. Rudin, “King, Edwin Henry,” in Dictionary of Canadian Biography, vol. 12, University of Toronto/Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/ king_edwin_henry_12E.html. page 16: “Greatest Creative Genius”: Alexander Reford, “Stephen, George, 1st Baron Mount Stephen,” in

254

A N OTE O N SO URC ES

Dictionary of Canadian Biography, vol. 15, University of Toronto/Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/stephen_ george_15E.html. page 16: “the greatest creative genius in the whole history of Canadian finance”: Alexander Reford, “Stephen, George, 1st Baron Mount Stephen,” in Dictionary of Canadian Biography, vol. 15, University of Toronto/Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/stephen_ george_15E.html. page 16: “doubt and difficulties vanished and hope and confidence revived”: Alexander Reford, “Stephen, George, 1st Baron Mount Stephen,” in Dictionary of Canadian Biography, vol. 15, University of Toronto/ Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/stephen_george_ 15E.html. page 16: “a masterpiece of the Italianate style in Canada”: Alexander Reford, “Stephen, George, 1st Baron Mount Stephen,” in Dictionary of Canadian Biography, vol. 15, University of Toronto/Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/stephen_george_15E.html. page 20: “There were men like him in London … but few in Canada.”: “Sir Vincent Meredith,” Journal of the Canadian Bankers Association, Spring 1929. page 20: “during the last 25 years there was hardly a … campaign launched for betterment of conditions of the relief of suffering, or the advancement of the city but had the encouragement and sympathy … as well as the practical support of this banker”: “Sir Vincent Meredith,” Montreal Daily Star, 24 February 1929. page 20: “it is not only the brilliance of his genius”: “Sir Vincent Meredith,” Montreal Daily Star, 24 February 1929. page 21: “Perhaps there is no other man in Canadian business life”; “whose career so aptly illustrates the reward of conscientious business energy as that of Chas. B. Gordon.”: “King Honors a Montreal Man,” Montreal Gazette, 25 August 1917.

page 21: “kindly demeanour and disarming modesty”: “Sir Charles Blair Gordon – Appreciations,” Times of London, 3 August 1939.

The Written World of bmo: Defining Documents and Directions page 33: “in firm support of Canada’s fighting men in the campaigns which must be undertaken before victory can be achieved”: Canada, Parliament, House of Commons, Debates, 17 May 1943.

A Grow th Business: bmo and Its Canadian Acquisitions page 48: “The immediate absorption of the Ontario Bank by the Bank of Montreal” … “is a most gratifying proof that our banking system and banking institutions are too strong to be shaken by even the worst effects of personal or corporate delinquencies. Instead of alarmed depositors and panicky noteholders who crowd to the closed doors of embarrassed banking institutions under less stable conditions, we witness the simple transfer of the accounts to the largest and strongest of our chartered banks. The injurious disturbance of commerce and finance which elsewhere attends and follows the forced closing of a banking institution is thus entirely averted, and the business goes smoothly on without a loss or inconvenience to the general public”: “Strength of Our Banking System,” The Globe, 12 October 1906. page 48: “the highest praise should also be accorded to the president and directors of the Bank of Montreal for their prompt action and assuming all the Ontario Bank’s liabilities to depositors and noteholders” … “all chartered banking corporations also feel a responsibility to the business community for the general stability of the fiscal system under which they operate, and are directly interested in maintaining that stability and sustaining unshaken the confidence of the public. The Bank

of Montreal has risen to all the demands of this broader responsibility and promptly assuming the liabilities of the Ontario Bank before the nature of its impairment could be known to the general public, and even before the story of its difficulties could obtain general circulation. Simultaneous with the story of personal mismanagement and recklessness has come the announcement that all the liabilities of been assumed, that accounts will be transferred to the Bank of Montreal, and that all obligations will be liquidated with open doors”: “Strength of Our Banking System,” The Globe, 12 October 1906. page 51: “wild days of rumours, much excitement on the stock market, and some concern among financial men generally”: “Merchants Bank to be taken over by Bank of Montreal,” Montreal Star – Late Ed., 16 December 1921. page 51: “adventurous banking carried on by the General Manager” … “transacted without the knowledge of the Directors”: “Editorial,” Globe 9 February 1922.

Days of Decision: Pivot Points page 55: “without fanfare”: Merrill Denison, Canada’s First Bank, vol. 1. page 55: “23d October 1817. the bank will begin its operations on monday the 3d of November next. Bank Hours from 10 o’clock a m to 3 o’clock p m . Discount days, Tuesdays and Fridays. Bills and Notes for Discount to be sent under cover to the Cashier on the days preceeding”: Quoted in Merrill Denison, Canada’s First Bank, vol. 1. page 58: “The Monetary King of Canada”; “the Napoleon of Canadian Finance”: R.E. Rudin, “King, Edwin Henry,” in Dictionary of Canadian Biography, vol. 12, University of Toronto/Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/ king_edwin_henry_12E.html. page 61: “The corporate historian delving in to the archives of the Bank of Montreal a few decades

from now” … “probably will find that 1984 was a watershed in the institution’s evolution”: Tracy LeMay, “Domestic Shift, Takeover Reshaping Bank of Montreal,” The Globe and Mail, 6 April 1984. page 61: “Let me suggest to you a great pipe running from north to south through which flows $106 billion in trade a year, total volume and an undetermined amount of transactional items. We have a large apparatus at one end of the pipe … The economic activity between the two countries is so enormous that it is obvious logic to get yourself on both ends of the pipe”: Quoted in “$546m gets B of M U.S. Bank,” Toronto Sun, 5 September 1984. page 64: “marked by the emergence of new business models [and] the disruption of incumbents and the reshaping of production, consumption, transportation and delivery systems”: Klaus Schwab, The Fourth Industrial Revolution.

Currency, Cash, and Legal Tender: bmo’s Richly Denominated Legacy page 75: “Individually, many Newfoundlanders were skilled and seasoned survivors, but as a people they depended on a precarious export trade, with a narrow range of goods produced in the country’s basic and interconnected industries of fishing, forestry, and mining”: Peter F. Neary, White Tie and Decorations: Sir John and Lady Hope Simpson in Newfoundland, 1934–1936.

Speed, Distance, Access: bmo’s First-to-Market Technologies page 91: “It is not surprising”: “Bank of Montreal Introduces Fully Integrated Automatic Banking in Canada,” Toronto Stock Exchange Review, September 1963. page 91: “that the Bank of Montreal has taken the initiative to become the first Canadian bank to provide a fully integrated data processing operation”: Toronto Stock Exchange Review, September 1963.

A Sense of Pl ace: A National Architectur al Legacy page 97: “Certainly no other bank is in possession of such a room”; “and it is indeed very doubtful if the large American or even English cities can produce its equal either in size, decoration or appointment”: “Palace of Marble: Bank of Montreal Moves into New Premises Today,” Montreal Gazette, 15 June 1903. page 97: “probably the largest, and architecturally the most monumental, bank building in the world”: “Palace of Marble: Bank of Montreal Moves into New Premises Today,” Montreal Gazette, 15 June 1903. page 100: “the Wellington and Sparks Streets facades are heroic size relief panels depicting the future and past of Canada allegorically. Bronze and iron grilles have been used for the large windows at the ends of the building”: “The New Bank of Montreal Building,” The Journal of the Royal Architectural Institute of Canada 9 (September 1932). page 100: “a traditional temple bank in Modernistic guise”: “The New Bank of Montreal Building,” The Journal of the Royal Architectural Institute of Canada 9 (September 1932). page 100: “most noteworthy building project since the … head office enlargement of the turn of the century”: “The New Bank of Montreal Building,” The Journal of the Royal Architectural Institute of Canada 9 (September 1932). page 100: “severe, contained, classical composition”: “The New Bank of Montreal Building,” The Journal of the Royal Architectural Institute of Canada 9 (September 1932). page 113: “april 9 – a bank !”: Doug Bell, ‘Bank of Montreal Opens at Watson,” Whitehorse Star, Yukon, 28 April 1960. page 113: “The bank will be located next to the Watson Lake Trading Post … this year has begun with an important and necessary addition to the community”: Doug Bell, “Bank of Montreal Opens at Watson,” Whitehorse Star, Yukon 28 April 1960.

A NOTE ON SO URCES

255

page 116: “complete and final proof that banks have gone modern”; “freeform Danish teakwood furniture”: “Snorkles and Overdrafts,” The Vancouver Province, 22 October 1955. page 116: “Just think. You can drive from the office on pay day; cash your cheque; go to a drive-in restaurant for dinner and then on to a drive-in movie; go home without getting out of your car”: “Branch Bank Has Curb-Side Teller,” The Vancouver Province 21 October 1955. page 116: “one of the few managers in the country to own but one initial”: “Snorkels and Overdraughts,” The Vancouver Province, 22 October 1955. page 116: “You might think a bank is a bank, but when you find one that has dumb-waiters, and loungers for employees, and comfortable chairs for customers, and manager’s office that permits the public actually to see the boss sitting there keeping track of the income and the outgo, and handsome Danish furniture, and all and all, it is worth writing home about methinks”: The Vancouver Sun, 29 October 1955. page 117: “the last type of building one might have examined for symptoms of translucence would have been a bank. It says something for modern architecture that it has been able to overcome the reluctance of bankers and the banking public, and their need for an unsubtle symbol of reliability and security, to the point where [the Don Mills branch] could be designed”: “Two Branch Banks, Don Mills, Ont.,” in The Canadian Architect, October 1957.

“In the Cause of Architecture,” in The Architectural Record, March 1908. page 123: “designed to serve people rather than overwhelm them … There is no longer room for rampant growth. In this age, planners and builders more and more must look to creating functional, people-oriented structures rather than edifices for personal glamour or glory”: “Lady with a Hard Hat,” Daily Commercial News, 8 October 1975.

bmo’s Most Wanted: Protecting Your Money page 132: “The accommodation provided is unlimited and local business people and any who care to use it will find this security they can enjoy any time outside of banking hours much to be grateful for”: “Depository Installed,” Elora Express, 12 June 1958.

bmo Bankers and the Drea m of Nation

page 117: “so that costs would not get out of hand”: “Two Branch Banks, Don Mills, Ont.,” in The Canadian Architect, October 1957.

page 148: “The public opening of this important route took place on Thursday last under circumstances of peculiar interest … Among the guests who assembled on board the ‘Princess Victoria’ at about ten thirty a.m. were the Earl of Gosford, Sir Charles Gray, Sir George and Lady Gipp, Mr Elliott secretary of the Commissioners, and several of the Legislature Council and House of Assembly, also, a number of the mercantile body and garrison and many respectable strangers to the number of about three hundred”: “The public opening …,” Montreal Gazette, 23 July 1836.

page 117: “in the vanguard of a clarified understanding of the function of bank architecture”: “Two Branch Banks, Don Mills, Ont.,” in The Canadian Architect, October 1957.

page 149: “Victorian Internet”: Tom Standage, The Victorian Internet: The Remarkable Story of the Telegraph and the Nineteenth Century’s Online Pioneers.

page 119: “Architecture is life, or at least it is life itself taking form, and therefore it is the truest record of life as it was lived in the world yesterday, as it is lived today or ever will be lived”: Frank Lloyd Wright,

page 149: “allowed symbols to move independently and faster than transportation”: James W. Carey, Communication as Culture: Essays on Media and Society.

256

A N OTE O N SO URC ES

page 150: “Canada is one of the most over-rated Colonies we have, but it is heartily loyal and makes its loyalty pay … as for the country as a whole it is poor and crushed with debt. The Supreme Government owes about thirty-five million pounds altogether, and every province has its separate debt, as also almost every collection of shanties calling itself a ‘city.’ The Canadian spend money and we provide it. That has been the arrangement hitherto, and it has worked out splendidly – for the Canadians – too well for them to try another scheme with the Canadian Pacific, which they must know is never likely to pay a single red cent of interest on the money that may be sunk in it”: Quoted in John Murray Gibbon, Steel of Empire: History of the Canadian Pacific. page 152: “the lung of Canada, carrying commerce into our arteries and remote veins, expelling our goods, our wheat, our minerals”: Canada, Department of Railways and Canals, Welland Ship Canal. page 152: “has been unlocked by triumphs of engineering”: Canada, Department of Railways and Canals, Welland Ship Canal. page 153: “biggest bank financing venture in Canadian history”: Clair Balfour, “Churchill Falls Provided Credit of $150 Million,” Globe and Mail, 21 December 1968. page 154: “the biggest credit facility ever afforded a private, public or para-public company” … “undoubtedly one of the great success stories of 1977–78”: “Canadian Banks Form Group for $1.25 Billion Loan,” First Bank News, February 1976. page 154: “a good deal for both the borrower and lenders”: “Canadian Banks Form Group For $1.25 Billion Loan,” First Bank News, February 1976.

On the Pl aying Fields of North A merica : Sponsorships page 173: “forceful return to Canadian basketball”: Morgan Campbell, “Toronto Raptors, bmo

Team Up in Sponsorship Deal,” The Toronto Star, 28 October 2013. page 180: “They shared our vision for the entire community to become the State of Hockey that exists today”: “Minnesota Wild Announces Multi-Year Partnership With bmo Harris Bank,” 15 September 2015, accessed 11 January 2016, www.wild.nhl.com.

Cultur al Capital: Bankers and Art page 194: “magician conjuring up, out of the earth, out of his palette, giant trees, extravagant skies, a whole enchanted nature”: Jean Chauvin, Ateliers – Etude Sur Vingt-deux Peintres et Sculpteurs Canadiens.

Deposit Ledger No. 1: The First Database page 224: “the art of keeping Accounts in such a systematic mode, that we may be enabled to know the real state of each branch of our mercantile transaction with ease and promptitude”: T. Jones, Bookkeeping and Accountantship, Elementary and Practical. page 227: “represented more than a mere chronicling of events, more than the creation of ‘likenesses,’ more than a new voguish aesthetic. Rather, they exhibited and conveyed to others a sense of the century’s dramatic dynamism”: Gordon Dodds, Roger Hall, and Stanley Triggs, The World of William Notman: The Nineteenth Century through a Master Lens.

page 195: “Art is art, nature is nature, you cannot improve upon it … Pictures should be inspired by nature, but made in the soul of the artist; it is the soul of the individual that counts”: “Emily Carr, 1871–1945, National Gallery of Canada, accessed 11 January 2016, www.gallery.ca/en/see/collections/ artist.php?iartistid=915. page 197: “The driving force and the source from which I draw my inspiration stem from my desire to give plastic and artistic expression to the ancient Hebrew concept of reality, which differs in its essence from that of all other civilizations, and which, to my mind, has never found its true artistic expression”: “Israeli Consul Guest of Museum,” in Desert Sun, 28 January 1976. page 200: “all-knowing hand”: “Santana,” Maya Polsky Gallery, accessed 11 January 2016, www.mayapolskygallery.com.

Part Three: The Material Culture of bmo Banking page 221: “it focuses on objects as sources of human action and ideas”: Maureen C. Miller, “Introduction: Material Culture and Catholic History,” The Catholic Historical Review vol. 101, Centennial Issue 2015, No 1.

A NOTE ON SO URCES

257

IM AGE CREDITS

Images reproduced in this book but not listed below are used with permission from or courtesy of bmo Financial Group and/or Harris Bank, or are in the public domain.

Page 36: Photographer: Frank Grant.

Page 185: Photographer: Jim Ryce.

Page 56: Courtesy of McCord Museum, Montreal.

Pages i, 2, 33, 35, 45, 49, 62, 64, 82, 83, 85, 86, 89, 123, 127, 128, 133, 139, 141, 162, 201, 221, 223, 227–46: Photographer: Christian Fleury.

Page 81: By permission. Bank of Canada/Avec la permission. Banque du Canada.

Page 186 (top): Ginette Letondal as Katherine and Christopher Plummer as Henry V, Henry V, 1956. Photographer: Peter Smith. Courtesy of the Stratford Festival.

Page ii: Photographer: Jim Ryce. Page 7: Arthur James Nesbitt and Peter Alfred Thomson: Nesbitt photo courtesy of A.R. Deane Nesbitt, Dry Goods & Pickles: The Story of Nesbitt, Thomson (n.p.: A.R. Deane Nesbitt, 1989); Thomson photo courtesy of Thomson family. Page 10 (both): Philip Rose and the Rt Hon. Richard Bethell, 1st Baron Westbury, Foreign and Colonial Investment Trust plc . By permission. © National Portrait Gallery, London. Page 15: Edwin Henry King. By permission. Canadian Illustrated News, 14 June 1873, 373.

Pages 59, 130, 136, 226, 246: Photographer: Matthew Liteplo.

Page 186 (bottom): Photographer: Ernest Mayer.

Page 100: Courtesy of Bill Olson, Dominion-Wide Photographs Limited.

Page 188 (bottom): Courtesy of United Way Toronto & York Region. Photographer: McPherson Photography.

Page 115: Courtesy of Libertyville-Mundelein Historical Society, Libertyville, Illinois.

Page 188 (top): By permission. Wisconsin Historical Society, whs -2690.

Page 118: Photographer: Jacob Hand.

Page 191: Photographer: Guy L’Heureux.

Page 119: Courtesy of Rachel Bankowitz, Wisconsin Historical Society – Public History.

Pages 192, 193, 195, 196, 199 (all): Photographer: Toni Hafkenscheid.

Page 143: Photographer: Matthew Gilson.

Page 194: © Fondation Marc-Aurèle Fortin/sodrac (2016). Photographer: Toni Hafkenscheid.

Page 149: Courtesy of Bell Canada Historical Collection. Page 150: Courtesy of Exporail, le Musée ferroviaire canadien / fonds Canadian Pacific Railway Company. Page 151: Courtesy of McCord Museum, Montreal.

Page 25: W.D. Mulholland. © V. Tony Hauser.

Page 171: Photographer: Bill Smith.

Pages 29, 31, 32, 202, 224: By permission. Restoration carried out by the Centre de conservation du Québec. Photographer: Christian Fleury.

Page 182: © 1995 Matthew Gilson. Page 183: Courtesy of St Michael’s Hospital, Toronto. Page 184: Courtesy of Rotman School of Management, University of Toronto.

Page 197: © 2016 Artists Rights Society (ars ), New York/adagp , Paris. Photographer: Alan Klehr. Pages 198, 200: Photographer: Alan Klehr. Page 215: Photo of Pauline Vanier courtesy of Concordia University Records Management and Archives. Photo of Deanna Rosenwig by Jean Desjardins.

A V I S I O N G R E AT E R T H A N T H E M S E LV E S

Main Branch, Montreal

bmo Institute for Learning, Toronto

A Vision Greater than Themselves THE MAKING OF THE BANK OF MONTREAL, 1817–2017 Laurence B. Mussio

Published for the Bank of Montreal by McGill-Queen’s University Press | Montreal & Kingston | London | Chicago

© bmo Financial Group 2016

isbn 978-0-7735-4829-9 (cloth) isbn 978-0-7735-9994-9 (epdf) Legal deposit fourth quarter 2016 Bibliothèque nationale du Québec

Printed in Canada on acid-free paper

C016245

McGill-Queen’s University Press acknowledges the support of the Canada Council for the Arts for our publishing program. We also acknowledge the financial support of the Government of Canada through the Canada Book Fund for our publishing activities.

Library and Archives Canada Cataloguing in Publication

Mussio, Laurence B., author A vision greater than themselves : the making of the Bank of Montreal, 1817–2017 / Laurence B. Mussio. Issued also in French under title: Un destin plus grand que soi. Issued in print and electronic formats. isbn 978-0-7735-4829-9 (hardback). – isbn 978-0-7735-9994-9 (epdf) 1. Bank of Montreal – History – Pictorial works. 2. Banks and banking – Canada – History – Pictorial works. i. Title.

hg2708.m63m 87 2016

332.1’20971

c2016-903868-8 c2016-903869-6

Set in Sina Nova and Hypatia Sans Pro Book design & typesetting by Garet Markvoort, zijn digital

CONTENTS

Foreword by William A. Downe

ix

Introduction: A Vision Greater

xi

Part One | The BMO Universe The Founders Through Time

A Sense of Place: A National Architectural Legacy 95

Assets

In Hoc Signo: 200 Years of Royal Arms, Logotypes, and Trademarks 137

Determining Destinies: Leaders and Leadership 11 The Written World of bmo : Defining Documents and Directions 27 A Growth Business: bmo and Its Canadian Acquisitions 41 53

Currency, Cash, and Legal Tender: bmo ’s Richly Denominated Legacy 65 Financial Innovations and Firsts

Part T wo | t wo centuries of Banking by the Numbers 203

bmo’s Most Wanted: Protecting Your Money 125

3

Ten Days of Decision: Pivot Points

1

Speed, Distance, Access: bmo ’s First-to-Market Technologies 87

77

bmo Bankers and the Dream of Nation 145 Markets of the Mind: bmo Advertising and the Art of Persuasion 157 On the Playing Fields of North America: Sponsorships 169 From Charity to Philanthropy

181

Cultural Capital: Bankers and Art

205

Deposits

206

The Trajectory of Wealth Generation: 1917–2016 207 Loans

208

Customer Base Employees

210

Branches and Access

211

Mapping Global Operations Branch Network

189

209

213

Community Giving

214

Women in Leadership

215

212

Investment in Technology Employee Giving

216

Memorials to the World Wars: Montreal Head Office, 1923 and 1951 229

217

Investment in Human Capital

The Circular

218

Banking System Stability and Soundness

219

The Passbook

230 231

The “Miller” Chest

223

Deposit Ledger No. 1: The First Database The Certificate of Stock

225

The Bank’s Corporate Seal

The Dictograph, 1970s

Rules and Regulations for the Branches

234

228

vi

C O NTENTS

237 238

Victorian Cryptography: Telegraph Codebooks 239 Minute Book H, 1905–09

244

“… that thou mayest prosper”: The Bank of Montreal/Waskaganish Belt, 1994 245

bmo Harris’s Lionheart: Hubert T. Lion 247

236

Ledger for Foreign Agents, 1885 227

243

M-Bar Chic? The Promotional Bow Tie, 1977

235

The Protectograph

Championship Trophy, Montreal Bankers Hockey League 242

Manual for Tellers, 1965 233

The Blickensderfer Typewriter

226

The William Notman Albums, 1884

224

232

The Bank of Montreal Centenary Medal

The Gold Scale

241

The Pension Fund Society Seal, 1884

Time Lords: The John Wood Clock

Part Three | The Material Culture of BMO Banking 221

Money Boxes

240

Epilogue

249

Acknowledgments

251

A Note on Sources

253

Image Credits

258

246

To the ten generations of the people of the Bank of Montreal who for two centuries have pursued a vision greater than themselves and have created one of the great banking institutions of the world

Bank of Montreal Completes Century This article marking the Bank’s centenary describes economic conditions the Bank’s founders faced that few today could imagine. Their venture flourished because it filled an important need.

Article re-created based upon original. Published 4 November 1917. Copyright The New York Times.

FOREWORD William A. Downe

S

ome would say there’s little place for history in the world of business. It’s true, in banking we typically measure history in second-by-second quotes and quarterly investor calls. The perspective we have about important periods of history while we are living through them generally reflects the concerns of the day. This book started eight years ago when Dr. Laurence Mussio was working on an oral history project for the Bank. He was interviewing bmo employees and retirees whose long experience gave them a unique perspective on our company. In the context of our upcoming bicentennial, he and I spoke about the project being much more than a record of events in the life of a very old company. We both saw the opportunity to draw real meaning from key moments over those years that would allow us to better understand ourselves, both the Bank and the country in which we were founded. I believe you will agree it is exactly what Laurence has accomplished: the telling of a

200-year story that is highly informative, keenly insightful and, while exhaustively researched, tremendously accessible and a delight to read. Identifying this handful of items from the many thousands of possible candidates was itself a massive task and, of course, many interesting items were left on the cutting-room floor. Still, Laurence managed this process with a deft hand and great sensitivity, and I think you will enjoy what you find among the 200 milestone items that together tell our story. They have special relevance to the many people across Canada, the United States, and in major financial markets overseas who have worked for bmo over the years. As this book reminds us, bmo ’s M-Bar carries with it proud traditions of pioneering financial services companies: the Bank of Montreal, Chicago’s N.W. Harris Trust Co., Milwaukee’s Marshall & Ilsley, Canadian investment firms Nesbitt Thomson and Burns Fry – to name just a few. It is our hope that today’s generation of bmo bankers will

learn from and be inspired by the work of their predecessors. In the spirit of this book I would like to add one more exhibit – the 201st. It is a news item from The New York Times in 1917 written to report on the Bank’s 100th anniversary. The article describes how the founders of this company used their vision and daring to establish the first banking business in colonial Canada. Their venture flourished because it filled an important need by facilitating trade and commerce. In the years that followed, as the scope and scale of colonial and then national aspirations grew, the Bank paced that growth by providing the capital and expertise to underwrite the transformational mega-projects of the day. A case in point was the financing of the Canadian Pacific Railway – the transportation system that opened the West to settlement and linked Canada from coast to coast, realizing our national dream. Donald Smith, a vice-president and future long-serving president of the Bank,

“History shows us not only how things get done but also the value of realizing the vision of great nations.”

drove the last spike on 7 November 1885. The Times article also reminds us that decades earlier, during the American Civil War, the Bank of Montreal was a critical source of finance to the US government in an equally critical period. History shows us not only how things get done but also the value of realizing the vision of great nations. I hope that you will enjoy touring the past in these pages. It is our hope that this book and its companion volume, Whom Fortune Favours: The Bank of Montreal and the Rise of Canadian Banking, 1817–2017, will make important contributions to the scholarship on Canada’s business history. This is also an appropriate moment to send birthday greetings to Canada on its 150th

x

FO RE W O RD

anniversary. The Bank of Montreal was already 50 years old when Canada was formed in 1867 – our histories are inextricably intertwined. I would like to thank our author and historian, Dr. Mussio, for the great care he took looking back. I would also like to thank Yolaine Toussaint, bmo archivist, and her team for their many contributions to this work. And I want to thank David Galloway and Robert Prichard – the chairmen of our Board of Directors during my tenure as bmo ’s chief executive officer – for their ongoing support of the Bank’s bicentennial celebration. To our customers – from the most recent, to those whose families have banked with us for generations – thank you on behalf of all of us at bmo . It is our promise that we will continue to strive, to

serve, and to innovate for you and to contribute new great moments in the story of this company.

William A. Downe Chief Executive Officer bmo Financial Group 2016

INTRODUCTION

A Vision Greater

Time and Memory People and institutions exist in time. Those institutions that manage to measure their pedigree in centuries are few. In the North Atlantic world, the small number of corporate and private institutions that have persisted over two centuries form an elite circle. Among those, the ones that have remained relevant through continuous adaptation are rarer still. In banking and finance, things become even more complicated: the landscape of the last two centuries is littered with discredited gothic ruins and abandoned capital fortresses. In Canada, fortune has favoured one singular institution in this category: the Bank of Montreal, Canada’s first bank, established in 1817. Two hundred years of banking represents an extraordinary moment and a remarkable achievement. The Bank began life in Montreal. It carries the city’s name, a distinctive style, and its ancient

spirit of enterprise. As colony grew to nation, as capital flowed continentally, as trade and opportunity first crossed oceans and then encircled the globe, the Bank and its people have been able to call the many cities and regions their own: Halifax, Toronto, Chicago, Milwaukee, Calgary, Vancouver, London, Seoul, Tokyo. The Bank’s home since 1817, in other words, is where the action is. Over 200 years, the Bank of Montreal has come to embrace a hundred different cities, regions, and territories across borders and frontiers. Those borders transcend geography, embracing new realms: service, innovation, and leadership. The Bank’s ten generations of leadership and people have crossed these many borders to create new opportunities. The Bank’s roots are two centuries deep and a continent wide. The history of the Bank of Montreal is the history of not only the first Canadian bank but also one of Canada’s founding

institutions. The bank is half a century older than Canada itself, or for that matter, older than many of the principal contemporary nation-states of Europe. The leaders and the people of the Bank have engaged in a cycle of generation, regeneration, and renewal for ten generations – from shortly after the end of the Napoleonic era in the nineteenth century to the global technologydriven era of the twenty-first century. In 200 years, our world has gone through the rise and fall of empires; the emergence of nation-states; multiple cycles of panics, depressions, and catastrophes; world wars; internationalization; globalization; new technologies; and accelerating information flows. Our world has seen powerful new social and geopolitical forces, revolutions in science, education, culture, style, fashion, faith, and thought. Contemporary observers often feel that in our own day, someone has hit fast-forward on these changes. Past generations often felt the same way.

In all generations of the Bank, change has demanded a confrontation with a continuous series of opportunities, challenges, and risks in protecting and generating wealth.

What We Are Celebr ating This book marks 200 years of the Bank of Montreal. But what, exactly, does it celebrate? Ageing gracefully for one thing. Mere longevity is not really the point of the Bank’s historical experience. This bicentennial is, instead, a point of reference, a setting in time and memory that urges us on toward appreciating the more substantial, multi-faceted, and often-amazing story of the last two centuries. We mark it in the present, but it allows us to imagine what comes next. The rise of the network society in this last generation has changed the way we look at time. In the twenty-first century, we live in the eternal present. Our contemporary temptation is to see history as something to visit. The past can be a stage-set in the background, or a beautiful cold gem set in the institutional, corporate, and individual memory. It is something to visit on your day off, to admire, to marvel at, sometimes to regret, occasionally to exploit for contemporary ends. Static. But take a closer look. When you do, you see in the case of Canada’s first bank an intense, dynamic engagement of people with the wider world. It’s there, underneath the surface. It’s the story of a people forcing forward frontiers for a bank, a city, a nation, and countless customers. It’s the story of the moments they triumphed, and the hard punches they suffered; the tools they used, the

xii

INTRO D U C TIO N

buildings they built, the technologies they used, the innovations they developed, the businesses and governments they helped, the markets they created. It’s also a story of how the leadership and the people of the Bank of Montreal lived the present with passion and commitment and embraced the future with hope and confidence. The Bank of Montreal’s history shows us what happens when ten generations of individual and collective energy, strategy, performance, and vision are released, channelled, and put to work for people and communities. Our eternal focus on the present and the future distances us from that history. This book aims to restore our relationship to that history, to understand through word and image how the Bank of Montreal became what it is today. Read this as a bmo employee or executive and you might say, “this is the way we were, how we became who we are today, and what we carry into the next generation.” Read it as a customer and you might say, “this is how my Bank became an important part of the financial lives of millions of people.” And anybody reading it will say, “this is why Canada’s first bank became a national institution over two centuries, and how it contributed to the multiple destinies of people, communities, regions, and nations.” That, in essence, is what this book celebrates. The subjects explored in this book – through entries about the people, the documents, technologies, events, and achievements – represent an iconography of the Bank’s story, expressing in images what otherwise is described in words. Individually, each entry is intended to put us in touch with an aspect of the Bank’s past:

a personality, a fragment, an innovation, a record, a forgotten advertisement. Each of the entries calls us to an understanding of the Bank of Montreal’s experience through a carefully chosen and unique prism. Individually, they tell a self-contained story, sometimes entertaining, sometimes extraordinary, always informative. (In some ways, that was the point of putting together a book that people could read piecemeal.) Put them together and they tell a much larger story: across the pages of this book, a high-definition portrayal emerges of the experience of the Bank.

An Emerging Picture The picture that emerges from these pages is an extraordinary one. These 200 subjects constitute a vast field of action over time and space where the Bank led, determined, shaped, participated, assisted, or otherwise ushered in the key financial events in Canada and in its field of operation. The Bank was at the epicentre of building, first, the Canadian nation and, then, a host of other regions and territories. It financed governments, public projects, economic development, and trade. You can say that it financed not one but two projects of nation: when Canada became Canada at Confederation in 1867, and when the Canadian Pacific Railway got underway in 1881. No bank or institution ever did it alone, of course. But the Bank is central to the relationships, flows and circulation of currency, assets, and wealth in its home territory. It shaped the Canadian banking system – first, as the first bank, then the dominant bank, then the senior bank, then in concert with other institutions both private and public.

It is an important chapter in the history of North American capitalism. The Bank’s contributions to other kinds of capital – human, leadership, and reputational – are also important. The Bank has provided some of the country’s key financial leaders down the centuries. Its executives, managers, and workers have contributed leadership and service at every conceivable level of public and community life – virtually wherever it has operated. Its thriving subcultures embrace not just banking but also investment, risk management, accounting, security, information technology, and more. The Bank of Montreal has contributed and helped to sustain a remarkable reputation for leadership in banking for Canada in the world. The Bank’s contributions to both the built environment and the material culture of our world are also an important element of its legacy. The buildings, the offices, and the branches mark and shape the urban landscape. The symbols of the Bank through time – the coat of arms and the M-Bar Roundel – are some of the most iconic symbols of their kind. These are the places where Bank culture took root and grew. But it is also the artefacts of the management of banking – the currency, the legal tender, the shares, the ledgers, account books, the instruments, the rulebooks, the regulations, the drafts and overdrafts, the machines and technologies – that symbolize important aspects of the experience of the Bank. Those contributions usually take centre stage. The more dimly lit backstage also produces important, though less common, touchstones you wouldn’t immediately associate with Bank of Montreal banking – support of the arts through a league-leading art collection, and the vital

contributions of the Bank to the full range of local, national, and international initiatives in arts and letters; to higher learning; to medical research; and to a stunning array of worthy causes that bind the Bank to the communities it serves.

to the present and to the challenges of the next generation: cyclical instability, complex operating environments, technological disruption, market volatility, and a changing international political economy will require nimble leadership.

From Many, One

Message from the Past

If we stand back and consider these 200 subjects as a whole, a single message emerges that gives the title to this book. From its earliest days, the Bank of Montreal has pursued a vision beyond itself. That vision has, always and everywhere in the last two centuries, inspired the leadership and people of the Bank to pursue projects and initiatives that transcended the business of banking. The vision is plural and multiple. It takes in projects of a national and global scale, as well as those in a local context. It helps to build nations, cities, and industries, as well as families and communities. It also extends powerfully into those realms of human endeavour that enrich communities: sponsorships in sports, patronage of the arts, initiatives that focus on improvement and sustainability of human capital where it can be found. To confine the history to financial transaction is to miss a fundamental truth of the history of the Bank of Montreal and lose the key reason it has succeeded. The 200 subjects in this book tell a much different, a deeper, more complex, and much more extraordinary story. To the greatest extent possible, individually and together, they tell the sweeping story of Canada’s first bank, one of North America’s oldest banks, and a bank that has made a deep imprint on the financial, economic, and professional landscape of the North Atlantic world. The arc of the Bank’s history brings us

The subjects presented here from over two centuries of the Bank of Montreal’s history deliver a message to the contemporary Bank: that time and again, the leadership and people of the Bank rose to meet an astonishing variety of economic, financial, social, political, and technological challenges and opportunities. Time and again, bmo bankers have confronted and tamed those challenges and exploited those opportunities for two centuries. The past tells the present that they walk with the power of ten generations of bankers – bankers who in their time have faced similar circumstances as important participants, players, and protagonists in Canadian and North American finance – and prospered. Their gaze was firmly fixed on the future, but they never forgot the history and the achievements that bound them to the tradition of their forebears. To borrow an aphorism from banking, while past performance is never a guarantee of future results, the history of the Bank of Montreal shows that hard work, the right leadership and vision, and the best team can make all the difference.

The L ayout of this Book I am going to make an astonishing claim: this book is not designed to be read sequentially cover to cover. Of course, it can be, but it is hoped

INTROD UC TION

xiii

that readers will delve into chapters and subjects according to interest. The book is divided into three parts. Part One, The bmo Universe, includes sixteen chapters that range from the founders to bank leaders, defining documents, currency, innovation, technology, architecture, and the like. Each chapter and entry comes with a short description and explanation. Part Two, Two Centuries of Banking by the Numbers, provides a series of statistical snapshots. Part Three, The Material Culture of

xiv

INTRO D U C TIO N

bmo Banking, showcases the objects that together tell the story of Canada’s first bank. The entries – the people, events, facts and figures, locations, icons, artefacts … – number 200, to give this celebration a certain symmetry with the bicentennial year. Each represents a tile in a complex, important, and historically momentous mosaic, important in its own right, but all the same an integral part of a larger picture. Happy reading.

PA R T O N E The bmo Universe What is the Bank of Montreal and why does it matter? Part One seeks to answer that question by exploring the Bank’s universe as it developed, grew, and extended outwards from a small North American city to the world. The chapters cover people, places, subjects, and events across two centuries of time and space. The mission of this section is to help the reader explore the Bank’s ‘solar system’ by providing a trajectory across 200 years of time, space, experience, and activity. Through word and image, Part One explores Bank of Montreal leaders, people and culture, places, architecture, documents, and key tools and technologies. It also offers a look at how the Bank’s activities helped to build one of the world’s most prosperous and advanced economies and reliable banking systems. The section also examines how, over two centuries, the Bank both served and empowered customers and communities across its territory.

the fo under s thro ugh ti m e

T

he Bank of Montreal is a complex organization that has evolved through two centuries. That complexity extends to its foundation. Its deepest origins are reflected in its name. That name also camouflages the different cultures and distinct organizations that integrated and assimilated into the Bank but yet continue to leave their mark on its nature. Of course, the main foundations are to be found where and when you would expect them – in Montreal in 1817. But the twenty-first century Bank can trace its foundations – its founders and founding cultures – to several places and organizations in time, across Canada and the United States and through once-separate, distinct disciplines: banking, investment, and securities dealing. This chapter focuses on the founders of those key institutions within the Bank of Montreal. It is distinct from the chapter on mergers and acquisitions, which also have a special place in this volume. Here, we shine a light on the founders of those organizations whose cultures have marked

the overall culture of the Bank. If we are to understand the evolving nature of today’s Bank toward a single, integrated culture, we also need to trace the roots of the diversity of cultures and subcultures that contributed to the making of the Bank of Montreal. These individual cultures, moreover, are of varying weights and impacts within the larger Bank of Montreal culture. Cultures and leaders leave behind legacies, inheritances, assumptions, aims, beliefs, and values that can persist in institutional memory and over time. In many cases, the organizational cultures that are so created can generate subconscious ways of thinking and behaving, even as they merge and become a single institution under a single banner. Contemporary culture gives pride of place to founders – founding fathers, mothers, leaders, visionaries, businessmen, statesmen. We recall and celebrate what they said, what they wrote, what they thought, what they were establishing, whether it was a republic, a confederation, a community organization, a club, an order, a business.

The focus on individuals, leaders, founders rather than just the institutions provides an opportunity to rewind the history of a particular culture to its unique beginnings. These institutions were not spontaneously formed – they were born of conscious, often bold or visionary, acts of entrepreneurial leadership. Those leaders had a particular idea or vision of how they could make a living, exploit a new opportunity, and serve a community. They brought people together. They had particular assumptions about how to proceed and what kind of institution they wanted to develop. They set the tone, selected the people, adapted to circumstances, set in place systems and procedures, and determined the composition, scope, and nature of the team. It was at that point that they gave birth to a specific culture, shaped by its context and its environment. Here, we go right back to the first generation, to the first organizers, and offer a glimpse of the distinctive character of the enterprise through a brief look at the people who started it all.

For all the time travel involved in tracing the founders of the Bank’s culture to the nineteenth and early twentieth centuries, with the exception of the Montreal Nine, this is very much a story about the last thirty years, beginning with the arrival of Harris Bank in 1984, Nesbitt Thomson in 1987, and extending to the addition of m&i in 2001 and Foreign & Colonial Investment plc of London in 2014. Along the way, the Bank entered new markets, crossing over into insurance. This speaks clearly to how in this contemporary generation, banking has transformed itself to embrace larger markets, sectors, and territories.

4

Th e BM O Un iv er se

PR AGM ATIC VISIONS

The Montreal Nine

N

ine men signed the original Articles of Association establishing the Bank of Montreal. They represented not only Montreal’s elite but also young Canada’s most enterprising merchants and aspiring financiers. The project of a banking institution had been, in one way or another, a vision that extended back to the 1790s.

Of the nine who signed the Articles of Association, John Richardson was the obvious leader, deserving his title of “Father of Canadian Banking.” He came to America from Scotland in 1773 at age eighteen and worked for Phyn & Ellice at Schenectady, ny , before coming to Canada in 1787. He became a partner in both Forsyth, Richardson & Co., leading merchants, and the North West Co., rivals of the long-established Hudson’s Bay Company. He served two active terms representing Montreal in the legislature of Lower Canada and was appointed to the Executive Council and the Legislative Council. Horatio Gates, born in Massachusetts in 1777, came to Canada in 1804, opened up the immense flour trade with the West, and was described as one of the most enterprising men of his time. No doubt he influenced a large number of his American friends and associates to purchase shares in this new financial institution. He served twice as president of the new Bank. A key figure in the group was George Moffatt. After he arrived at age fourteen in Canada from England in 1801, he earned partnership in the noted firm of Gerard, Gillespie, Moffatt & Co., and eventually acquired controlling interest, becoming deeply involved in the fur trade. He served as an officer in the War of 1812, and in 1826, with his usual far-sightedness, Moffatt established a branch of his firm at York (now Toronto). He was also appointed Commissioner of the British American Land Company, developers in the Eastern Townships with headquarters in Sherbrooke. He served in both the Legislative Council and the Executive Council and represented Montreal in the Canadian Legislature. Moffatt was key in shaping the early character of the Bank in its first decade. Robert Armour emigrated to Canada from Scotland around 1800. Owner of the premises occupied by the new Bank, he was also publisher of the Montreal Almanac and one of the proprietors of the Montreal Gazette. For a time he was cashier of the relatively short-lived Bank of Canada, taken over by Bank of Montreal in 1831. George Garden was a prominent member of the leading merchants Auldjo, Maitland and Company. Active

in St Gabriel’s Church, he was also a charter governor of the new Montreal General Hospital, opened in 1822 on Dorchester Street (now René Lévesque Boulevard) near Montreal’s business centre. This Scot filled the position of the vice-president of the Bank on two occasions. Thomas A. Turner, of the wholesale firm Allison, Turner and Company, was the first vice-president of the Bank. He was born in Aberdeenshire in 1775. He played a role in the Bank’s first foreign exchange transaction, in early 1818, when some 130,000 Spanish silver dollars, in sixty-five kegs weighing one hundred pounds each, were carried by stagecoach along primitive roads through New England’s mountains to reach Boston. Americans in the New England states needed the Spanish silver for their trade with China and the East Indies. Lt. Col. James Leslie, another founder, was a merchant, retired army officer, and son of General James Wolfe’s assistant quarter-master-general at Quebec. Born at Kair, Kincardine, Scotland, in 1786, to minor nobility, he came to Montreal in 1808. He held a variety of legislative and executive positions in Canada for decades. John Churchill Bush, a Montreal merchant born in the United States, also appears on the Bank’s Articles of Association, but he had little to do thereafter with the Bank’s activities. Augustin Cuvillier played a key strategic role in the Bank’s founding. He was a member of the Legislative Assembly, a well-to-do importer, and the only nativeborn Canadian amongst the distinguished group. One of the leading political and economic figures of his time, he provided vital legislative support for the Bank’s incorporation and charter. After the Union of the Canadas in 1841, Augustin Cuvillier became the first Speaker of the Assembly. These nine early bankers were the founders of the Bank of Montreal.

the fo und er s thro ugh ti m e

5

YANKEE VISIONARY

Norman Wait Harris

A

lthough the Bank of Montreal had been active in the United States since the nineteenth century, the 1984 acquisition of Harris Bankcorp, Inc. created a significant American footprint. This was the first time a Canadian bank had a major US subsidiary, and created the first North American bank to provide full service in both Canada and the United States. The founder of the Harris Bank, Norman Wait Harris, was born in Berkshire, Massachusetts, in 1846. He made his way in life as a life insurance salesman in upper New York State before heading west to Cincinnati in 1866. His life insurance connection continued there as he assumed managerial responsibilities of the successful Union Central Life Insurance Company. At age thirty-five, he moved his family west to Chicago in 1881, perceiving new opportunities dealing in municipal and other public franchise bonds. Norman W. Harris & Company opened for business as a securities firm on 1 May 1882, based in Chicago, specializing in municipal bonds. The firm started with $30,000 in capital. The business flourished, as did deposits. After a quarter century of those humble beginnings, the company applied for a banking charter in Chicago. In 1907, it was incorporated as a bank, and become Harris Trust and Savings Bank. Harris served as president from its inception in 1882 until 1913. Harris’s success lay in striking into the retail securities market, particularly with new methods of promotion and advertising. As the Harris’s historian remarks, Norman Harris put securities on a new, more

6

Th e BM O Un iv er se

public foundation. “He believed that the existence and value of good [securities] should be made known to all potential buyers,” in a time when public notices for such investments were rare or even considered unsavoury. The Harris Bank’s success in subsequent decades was in part a testament to the strong philosophical and managerial foundations set by its founder.

POWER COUPLE

Arthur James Nesbitt and Peter Alfred Thomson

T

he acquisition of the investment firm Nesbitt Thomson in 1987 by the Bank of Montreal was the first of its kind between a Canadian chartered bank and a Canadian investment firm. The firm’s founders, Arthur James Nesbitt (photo on left) and Peter Alfred Thomson (photo on right), formed their eponymous investment firm in 1912 after years of partnership in sales in the Maritimes. They understood in particular the importance of hydroelectric development to Canada’s increasingly industrial economy and became prominent hydroelectric utility underwriters. Under the strategic vision of both partners, the firm expanded its utilities. In 1925, it formed Power Corporation of Canada, one of Canada’s most important and successful enterprises, and owned and operated it until 1968. With an investment company and a merchant banking organization in hand, the firm’s success grew exponentially. Eventually Nesbitt’s son Deane assumed control of Nesbitt Thomson, while Peter Thomson, son of the other founder, took Power Corporation. The firm’s expertise in all aspects of the energy sector was remarkable – from uranium debt financing to TransCanada PipeLines. In 1968, it bought a seat on the New York Stock Exchange – the first non-US firm to do so in over thirty years. From the beginning, Nesbitt Thomson shared common interests, common philosophies, and common endeavours with the Bank of Montreal. In fact, this Montreal-based investment brokerage had its offices just down the street from the Bank of Montreal on St Jacques Street, sharing a common alleyway, Fortification Lane. The firm prided itself on being built by risk takers, and by “making things happen.” This premier investment firm had also been known for making its decisions based on serious research – on information, analysis, and network intelligence.

The affinity in operations, territory, and operation between the Bank and the investment firm drew them closer to union. In 1986, the firm went public; in 1987, regulatory changes permitted banks to purchase investment firms, and in short order secret high-level talks were launched that led to Canada’s first integration of a chartered bank and an investment firm through a 75 per cent equity interest. This was a major strategic move into the Canadian and international securities markets, bringing into the Bank of Montreal 650 account executives in fifty-five offices – and a diverse and dynamic corporate culture.

the fo und er s thro ugh ti m e

7

INVESTOR PIONEER

Charles F.W. Burns

T

he prominent Canadian brokerage Burns Fry Limited merged with bmo ’s Nesbitt Thomson in 1994, placing it firmly within the Bank of Montreal orbit. Charles F.W. Burns (1907–1982) was born in Vancouver, British Columbia, son of a Bank of Nova Scotia banker who later moved to Toronto. He began his professional life as a business banker in the 1920s. In 1928, he moved into the brokerage business at the height of the boom of the 1920s. His experience included trading on the floor of the stock exchange and, later, travelling as a securities salesman throughout Ontario. Borrowing $500 from his father, he began his own company, Charles Burns & Company, with a rented desk, a telephone, and a part-time bookkeeper in the offices of another firm. In 1935, Charles was joined by his brother Latham, and they purchased a seat on the Toronto Stock Exchange with a $50,000 loan from Charles’s mother-in-law. Latham died suddenly in 1936. In 1939, Wilfred Denton came aboard and Charles and Wilfred formed Burns Brothers & Denton Limited.

8

Th e BM O Un iv er se

The Toronto firm braved Depression-era conditions to prosper in Canadian finance. The company continued to grow in the post-war period, establish new offices, and penetrate into areas of financing as diverse as uranium mining, oil development, and jockey clubs. Within years of the establishment of the firm, Charles had developed an organization capable of dealing in most facets of the investment industry of the day – transactions through the stock exchange and dealings in government, municipal, and corporation bonds. By the 1970s, it had become one of Canada’s leading investment firms, merging with other companies such as J.R. Timmins & Co. and Fry Mills Spence Limited. By the 1980s, it was widely recognized as one of the most professional of Canada’s fully integrated investment firms. In July 1994, this venerable Canadian investment institution merged with Nesbitt Thomson to create the largest network of investment advisers in the country at that time. The investment capabilities in Canada and the potential that the merger offered toward realizing the North American vision of the bank was uppermost in the minds of contemporary management.

BANKING IN THE FEDER AL TERRITORY

Samuel Marshall and Charles F. Ilsley

T

he Bank of Montreal acquired the Milwaukeebased Marshall & Ilsley Corporation (m&i ) in July 2011. The deal added a substantial US private banking presence, asset management, and institutional trust businesses as well as bolstering global investment capabilities. bmo also acquired two new founders: Samuel Marshall and Charles F. Ilsley. Samuel Marshall (photo on left) was born on 24 November 1820 in the Quaker community of Concordville, Pennsylvania. Educated for a career in business, he entered an apprenticeship with Edward Grubb and family in Wilmington, Delaware, for five years. He then found himself moving west in search of business opportunities, eventually landing a stint in a dry goods business, and learning a great deal about the exchange business and especially about bank notes – the valuable ones and the worthless ones in a territory with dozens of banks, not all of them trustworthy! (See Currency, Cash, and Legal Tender, pages 65–76, for a discussion about the evolution of bank notes and currency.) Exchange brokerages were important in exchanging out-of-town money for local currency. On 21 April 1847, Marshall established the Samuel Marshall & Co., Exchange Brokers banking institution in Milwaukee, Wisconsin. In his first year, he cleared an $800 profit, had taken more than $2,000 in deposits, and began an active investment portfolio in the territory. Thus began a prosperous, private, non-chartered banking institution that under Marshall’s careful tutelage would help to define banking in the city, region, and state itself, which entered the Union in 1848. Marshall’s partner, Charles Ferdinand Ilsley (photo on right), was born in Eastport, Maine – near the

Canadian border – in October 1827. After some experiences and travel in the Boston states and the Midwest, he obtained a job clerking in Milwaukee with Alexander Mitchell and “Mitchell’s Bank,” part of the Wisconsin Marine and Fire Insurance Company. In the summer of 1849, Samuel Marshall and Charles Ilsley began to discuss a prospective partnership in banking. On 1 October 1849, they officially announced the creation of their new private banking partnership. On 29 March 1850, the first advertisement under the Marshall

& Ilsley banner was published, and the beginnings of a great banking institution were launched. After a state plebiscite legalized the existence of banks, in 1853, the partners became Wisconsin’s first chartered bank, incorporating the State Bank of Madison.

the fo und er s thro ugh ti m e

9

F

THE PATHBREAKERS

Philip Rose and the Rt Hon. Richard Bethell, 1st Baron Westbury, Foreign & Colonial Investment Trust plc

10

Th e BM O Un iv er se

oreign & Colonial Investment Trust (f&c ) has the distinction of being the world’s first investment trust. Its founding in London in 1868 is a landmark event in the history of finance. f&c helped to popularize, for the first time, share ownership for the ‘investor of moderate means.’ The stock market of the nineteenth century had been largely limited to wealthy individuals and institutions. As f&c ’s first prospectus declared, “The object of this Trust is to give the investor of moderate means the same advantages as the large Capitalists, in diminishing the risk in investing in Foreign and Colonial Stocks, by spreading the investment over a number of stocks, and reserving a portion of the extra interest as a Sinking Fund to pay off the original capital.” That prospectus launched one of the great financial innovations of its time. As the historians of f&c note in their fine history of the Trust, “it was the precocious talents of City lawyer Philip Rose” that gave life to the company. Rose (photo on right) was born in High Wycombe in 1816, son of the physician who would later become the Disraelis’ family doctor. Young Rose met and befriended the great statesman and future prime minister Benjamin Disraeli, creating a lifelong and mutually beneficial friendship. Rose became a partner in Barker & Rose, solicitors, a forerunner of the present-day London law firm Norton Rose Fullbright. Rose, who had risen to prominence during the railway boom of the 1840s, involved himself in philanthropic pursuits (he founded the Royal Brompton Hospital) before turning his mind to the creation of this new form of investment. Rose approached the Rt Hon. Richard Bethell, 1st Baron Westbury, a Liberal politician, lawyer, and judge (born in Bradford on Avon on 30 June 1800), to discuss the new venture. Lord Westbury (photo on left) was said to epitomize “trustworthiness, security, prudence and reliability.” He served as Lord Chancellor of Great Britain between 1861 and 1865. It was also said that Westbury should “be remembered as a zealous and wise reformer, and as the boldest judge who ever sat on the English bench.” With those credentials, f&c could differentiate itself from the indifferent reputation of the financial sector in

London. The Trust went on to become one of the most successful institutions of its kind in the City. The Bank of Montreal acquired f&c in 2014 as part of a strategy to expand bmo Global Asset Management’s European operations. In the process, it made these two gentlemen co-founders of the Bank of Montreal – an outcome that they assuredly would never have expected in their most fevered imaginings.

Deter m ining Destinies

Leaders and Leadership

T

his chapter centres on two centuries of Bank leaders and leadership. The presidents and chief executives featured here have been selected for their exemplary contribution to shaping the destiny of the Bank of Montreal since its earliest days. The Bank has been favoured with some of the highest calibre of leadership in Canadian banking. Each of the leaders in this gallery was called in his time to respond to a unique set of challenges, a series of complex competitive environments, and tricky opportunities. Collectively, they faced virtually every conceivable challenge that could be posed in the environment of colony, nation, continent, and North Atlantic world. Panics, short depressions, long depressions, rebellions, imperial wars, colonial wars, and world wars top the list of challenges. Less spectacular but no less consequential were the challenges of

competition, technological transformation and disruption, regulatory regime change, globalization, market fluctuation, and social upheaval. But let’s not forget the good times – the bull markets, the postwar booms, the vast stretches of expansion and growth. From the beginning, leaders predicated their success on the ability to gather the right people, deliver the right strategic vision, and build or shape the organization of the Bank to provide the right response to the times. The leadership and people of the Bank were able, to varying degrees, to respond to the demands of their time in different ways and different styles with a range of successful outcomes. Naturally, not every strategy succeeded and not every decision was applauded by posterity; sometimes reversal was inevitable. What is remarkable, however, is the

consistent record of performance over two centuries. Together, these Bank of Montreal leaders have provided a legacy of leadership in Canadian and North American finance that has deeply shaped the course of banking. Choosing the Bank’s greatest leaders is not an easy task – there are always a few who deserve the podium, but for reasons of space or circumstance are runners-up. Here, consulting the traditional minimum qualifications for sainthood has been useful: to qualify, you must be dead and have two confirmed miracles. I have strictly applied only the first condition to our Bank leaders, in spite of the manifest merits of living leadership. I encourage the reader to decide whether the second condition applies.

THE CHIEFTAIN BORN | August 1789 in Creebridge,

Peter McGill

Scotland

MOVED TO CANADA | June 1809 Peter McGill was president of the Bank of Montreal between 1834 and 1860, but involved in the bank’s activities from just after its founding in 1819. The position of president in the Bank was a variable one: the general manager held more operational control and responsibility, while the president’s role could be symbolic, ceremonial, strategic, reputational, or somewhere in between. During his long tenure, McGill’s involvement in the destiny of the Bank tended to be varied according to the period. What is incontestable, however, is the sheer extent and range of McGill’s activities in the life of Montreal. McGill’s business career began and thrived as a mercantile capitalist and importer in Montreal through Peter McGill & Company. Through an increasingly elaborate network of imports and cross-ownerships, McGill rose to prominence in the Montreal business community, becoming its de facto leader by the 1840s. McGill’s interests also extended to the chairmanship of the first board of directors of the Champlain and St Lawrence Railroad, British North America’s first railway, in 1831. By the 1840s, President McGill was one of the most connected and most influential businessmen in the city. The spinning of fortune’s wheel, however, ensured that McGill would become well familiar with both profit and loss in his personal affairs. McGill’s prolific career extended also to prominence in public, social, and religious life. He sat on the Executive and Legislative councils before and after the 1841 Union of the Canadas. He was appointed Montreal’s second mayor after Jacques Viger, but became the city’s first mayor under the new Constitution. He was also Montreal’s first Englishspeaking mayor. McGill was also a devout member of the Church of Scotland, owning St Paul’s Church in

JOINED BANK OF MONTREAL | 1819

PRESIDENT | 1834–60 RETIRED | 1860 DIED | 28 September 1860 in Montreal, qc

TRIVIA | Peter McGill’s original name was Peter McCutcheon. On 29 March 1821, he agreed to become Peter McGill by royal licence, a condition of inheriting his Uncle John McGill’s fortune. He was appointed Montreal’s first mayor under the new Constitution (British North America Act) in 1840.

Montreal along with another prominent Montrealer, John Redpath. Under his presidency and largely under the management of Benjamin Holmes, the Bank of Montreal pursued a ‘stability strategy’ that saw its operations carefully extended across colonial territory. This early period in the Bank’s history and in the Canadian

banking system required strong networks, shrewd negotiations with merchants, local governments, and imperial authorities. By this measure, and despite areas of weakness, the McGill presidency established the foundation, the essential conditions, for the Bank of Montreal to consolidate its leadership in Canadian banking. D e ter m ining D estinies

13

THE CHA M PION

John Molson

J

ohn Molson was president of the Bank of Montreal in four critical years of the bank’s existence – 1826 to 1830 – when its reputation was in play, its present was in turmoil, and its future was anything but clear. Molson’s involvement with the Bank of Montreal grew naturally out of his three decades of success as a businessman, landowner, and politician. Molson’s was the greatest entrepreneurial spirit of his age. His launch of one of Canada’s other enduring institutions – Molson Brewery – was a visionary move into a sector in the vanguard of technological innovation. He considered it his “Commencement on the Grand Stage of the World.” Molson also launched another such sector: steam-powered shipping. As a colonial politician, an investor in key infrastructure and in enterprises including Montreal’s first luxury hotel, a major landowner and philanthropist, John Molson’s interests focused both on the growth of his widening business interests and the expansion of Montreal. Molson’s presidency was inaugurated by a board governance crisis that his election sought to end. With the Bank’s capital – real and reputational – at stake with roiling markets and the liquidation of the principal fur trading houses in Montreal, Molson’s responsibilities were more than merely ceremonial. Molson’s reputation for probity and conservatism in banking was of essential importance in navigating the turbulence of those times. In fact, there were few Montreal bankers who could command the contacts, the networks, and the insight into the colonial economy than John Sr could. Molson championed the Bank’s transition to a wider vision of banking. Molson worked in close concert with Peter McGill and George Moffatt not only

14

Th e BM O Un iv er se

in Bank of Montreal matters in the 1820s and 1830s but also in virtually all investment, monetary, banking, and financial questions facing the colony in their capacity as politicians and public officials. John Molson’s connection with the Bank ended with his death in 1836. His central role in the entrepreneurial life of Montreal and his ability to “reject all national distinctions” in a time when those distinctions were vividly drawn between French and English was of inestimable value to the consolidation of the Bank of Montreal and its future success. Molson’s involvement in the Bank of Montreal began a long, intimate association that saw representatives of multiple successive generations of prominent Molsons represented on the board of directors.

BORN | 28 December 1763 in Lincolnshire, England MOVED TO CANADA | July 1782 JOINED BANK OF MONTREAL | 1817 PRESIDENT | 1826–30 RETIRED | 1836 DIED | 11 January 1836 in Boucherville, Lower Canada TRIVIA | There has been a Molson on the bmo board of directors for 108 of the Bank’s 200 years.

“ THE MONETARY KING OF C ANADA”

Edwin Henry King

E

dwin Henry King joined the Bank of Montreal in 1857. At age thirty-five, on 23 March 1863, he became general manager. Six years later – at forty-one – he became president, the youngest ever elected. By 1873, he resigned and moved to London, England. His tenure may have been relatively short, but it was also perhaps the most intense, maybe the most consequential, and almost definitely the most controversial. King has been called the “most striking figure in Canadian banking history” and the “Napoleon of Canadian Finance” by various historians down the years. He has also been called – derisively – the “King of Canada,” “a little God who dares to treat the representatives of all other banks” in an insulting manner, a “truculent and uncompromising” fellow, and even by his allies as “very peculiar.” King promoted the interests of the Bank of Montreal often brilliantly, frequently ruthlessly, and always with an eye for exploiting emerging opportunities. He was also a polarizing figure who did not suffer fools gladly, to put it mildly. By personality, strategy, and result, King was the great disruptor. Whatever King was, he was arguably the most brilliant strategist and visionary in the history of the Bank. In a key period of the Bank’s history, he professionalized the business of banking, putting commercial credit on an entirely new basis in the 1860s. King took full strategic advantage of the Bank’s leading position in Canadian banking. At home, he re-established the Bank’s faltering position in the Canadian market, showing little mercy to banks in trouble. King especially incurred the wrath of Toronto capitalists for both style and strategy – one of whom, Bank of Montreal

director Senator William McMaster, was so incensed he founded the Canadian Bank of Commerce. During the US Civil War, King vaulted the Bank to prominence as the go-to bank in the New York gold market. He extended Bank operations to London. King also established close ties to the new Government of Canada – both as government banker and as advocate of an ill-starred new banking system whose rules of the game would benefit larger, more stable banks like his own. The resulting political firestorm forced compromise on the new system that led to Canada’s first Bank Act in 1871. King’s exit mirrored his meteoric rise. He departed the field after only four years as president, retiring to London. His spectacular achievements positioned the Bank of Montreal as the incontestable leader in Canadian banking, to the delight of the shareholders and the consternation of his enemies. Meteors burn brightly, make their mark, and burn out. King did all three.

BORN | December 1828 in Ireland MOVED TO CANADA | 1850 JOINED BANK OF MONTREAL | 1857 GENERAL MANAGER | 1863–69 PRESIDENT | 1868–73 RETIRED | 1873 DIED | 14 April 1896 in Monte Carlo, Monaco TRIVIA | King’s parting gift when he left the Bank in 1873 was a full and magnificent service set of solid silver imported from the well-known establishment of Messrs Garrard & Co., London, England. It was valued at $10,000 and was on display for a few days at the Bank office for the inspection of shareholders.

D e ter m ining D estinies

15

THE “GREATEST CREATIVE GENIUS”

George Stephen, 1st Baron Mount Stephen

16

Th e BM O Un iv er se

G

eorge Stephen’s official connection to the Bank of Montreal lasted less than decade: first as director (1873–76) and then as president (1876–81). However, it is hard to overestimate the impact of Stephen’s leadership on the Bank’s destinies in the 1870s and 1880s. During a spectacular rise to prominence as a businessman and financier in Montreal in the 1850s and 1860s, Stephen’s interests spanned virtually every investment and finance activity in the city. His close association with the leading financiers and entrepreneurs of the day – E.H. King, Hugh Allan, Matthew Gault, and especially his cousin Donald Smith – formed a formidable Montreal investment ‘brain trust’ that acted as an important engine for Canadian economic activity. Stephen’s challenge as president of the Bank was to weather a sharp contraction in the Canadian economy. Here, Stephen’s networks and his financial and political acuity assured the Bank’s supremacy in Canadian finance. If he was “the greatest creative genius in the whole history of Canadian finance,” as the historian D.G. Creighton suggested, then he was also the Great Persuader. As his obituary in the Times of London suggested, Stephen had a great gift – a leader in whose presence “doubt and difficulties vanished and hope and confidence revived.” Stephen made his greatest mark in railways. From 1870, he had begun to become convinced of the possibilities of the promise of the Canadian northwest. In the late 1870s, a series of complex and sometimes controversial financial deals – with the Bank in firm alliance – put Stephen in a position to secure the contract to build the Canadian Pacific Railway (cpr ) from the Government of Canada – including $25 million in cash and 25 million acres. He assumed the presidency of the cpr and immediately resigned from the board of the Bank to devote his prodigious energies and intellect to the building and financing of Canada’s transcontinental railway. Failure would mean endangering not only the project but likely the entire banking system of the country, given the Bank of Montreal’s exposure. With essential support from the government of Sir John A. Macdonald – Stephen’s indispensable ally – Stephen,

Donald Smith, and R.B. Angus saw the project to the end. There were no doubts about the importance of the cpr to creating a transcontinental nation. Was it a good investment? Even Stephen sometimes had his doubts. Stephen left a deep imprint on his times and the city that made him famous. He was a key benefactor of the Royal Victoria Hospital ($1 million and real estate) and donated an entire wing of the Montreal General Hospital. His greatest philanthropic passion was the Prince of Wales Hospital Fund for London where his contributions of time, expertise, and funds (£1.3 million) were vital to its success. He built a stately mansion in Montreal that was later called “a masterpiece of the Italianate style in Canada.” By the late 1880s, Stephen moved to Brocket Hall in Hertfordshire, England, a wealthy and honoured man. His last trip to Canada was in 1894. He died on 29 November 1921.

BORN | 5 June 1829 in Dufftown, Banffshire, Scotland MOVED TO CANADA | 1850 JOINED BANK OF MONTREAL | 1873 DIRECTOR | 1871–81 PRESIDENT | 1876–81 RETIRED | 1873 ELEVATED TO THE BARONETCY | 3 March 1886 ELEVATED TO THE PEERAGE | 1891 as Baron Mount Stephen (taking the title from a Rocky Mountain peak near the cpr Line in British Columbia)

DIED | 29 November 1921 in Hatfield, Hertfordshire, England

TRIVIA | Lord Mount Stephen never missed a day of work in fifty-three years.

I M PERIAL COLOSSUS

Donald Smith, 1st Baron Strathcona

D

onald Smith’s connection with the Bank of Montreal spanned four decades as director, vice-president, and eventually president from 1887 to 1905. He began his professional career as an officer of the Hudson’s Bay Company (hbc ) in the 1840s, rising through the ranks by expanding the company’s field of action beyond the fur trade, and modernizing its

operations. Smith was the last hbc imperial governor and was associated with the company for an astonishing seventy-five years. By the 1860s, his ever-closer connection with Montreal brought him into the orbit of financiers, including his cousin George Stephen, R.B. Angus, and E.H. King (all of whom are featured in this chapter). Smith frequently found himself at the centre of the action in the 1860s and 1870s as Canada pushed into the North-Western Territory – as an experienced observer, protagonist, and universally respected diplomat. By intelligence, temperament, and intuition, he was extremely useful in finding solutions to some of young Canada’s most complex and potentially explosive problems. Smith’s involvement and investment in railways in the 1870s, however, was the foundation of his wealth and his success. His key participation in the Canadian Pacific Railway, his loyalty to the project, and his moral support when times got tough were all vital to seeing the project through. Therefore, for more than one reason, it is merited and fitting that Smith drove in the last spike of the railroad – a moment captured in what has since become an iconic photograph. His entrepreneurial talents allowed him to identify opportunities in new fields: in 1888, for example, he was a founding partner of the Federal Telephone Company, which later merged with Bell Telephone. His ventures went beyond the financial: he was elected several times to represent Montreal in the Canadian House of Commons – in 1891, with the largest majority in Canada. In 1896, he was offered the prime ministership by the outgoing incumbent, Sir Mackenzie Bowell, but declined. His public appointments and successes included a long tenure as High Commissioner to the UK. Smith also spent $1 million raising and equipping an entire regiment known as Lord Strathcona’s Horse – 28 officers and 272 non-commissioned officers – to fight in the Boer War (1899–1902). Smith was an extraordinary philanthropist – one of the most generous of his age – giving in excess of $7.5 million in donations and bequests, the greatest of which he reserved for McGill University and the education of women. He earned a well-deserved

BORN | 6 August 1820 in Forres, Scotland MOVED TO CANADA | 1838 JOINED BANK OF MONTREAL | 1872 PRESIDENT | 1887–1905; HON . PRESIDENT | 1905–14 RETIRED | 1905 ELEVATED TO THE BARONETCY | 3 March 1886; gcmg 1897

ELEVATED TO THE PEERAGE | 1897 as Baron Strathcona

OTHER HONOURS | Royal Society of London, 1904; Albert Medal, 1904; gcvo, 1908; Knight of the Order of St John of Jerusalem, 1910

DIED | 21 January 1914 in London, England TRIVIA | Lord Strathcona was a champion of women’s education at McGill University. His financial support inspired the first women students of McGill to be called the “Donaldas,” after him.

reputation not only for his supreme generosity but also his lavish hospitality, his patronage of the arts, and as a prodigiously tireless worker who could outpace men half his age. Smith’s involvement in the Bank of Montreal was extensive, but perhaps not intensive. He was, after all, involved with multiple corporations. The record of his success, his outstanding achievements, and his reputational capital were key elements in the longevity of his tenure with the Bank. In an age where that reputational capital was an essential element of success in the North Atlantic world, Smith was the greatest possible symbol for the Bank. He was at the centre of the action of most successful business ventures in the 1880s and 1890s in Canada. His role in young Canada’s parliamentary life also put him in the centre of Canadian public life, while his passionate belief in Empire and his ability to achieve remarkable successes in the promotion of an imperial vision put Lord Strathcona in a singular category. D e ter m ining D estinies

17

THE M ASTER BUILDER

Sir George Alexander Drummond, kcmg

G

eorge Drummond’s introduction to Montreal business life was intimately linked to his work at John Redpath’s sugar refinery, with which he was associated in the 1850s and 1860s. It was in fact a family business, since George married into the Redpath clan and soon was made partner in John Redpath & Son for a time. Drummond’s involvement in Montreal sugar refining led into politics, especially in the realm of tariff protection and his being in favour of Sir John A. Macdonald’s National Policy. By the 1880s, Drummond became the effective leader of the powerful Montreal business community. He was named to the Senate in 1888, and his ability to speak authoritatively on commercial and financial matters concerning the nation was widely respected and valued. It is during this period that Drummond begins to become involved in the Bank of Montreal. He was a tireless advocate for Canadian banking, and for liberalized regulations on loans to promote industrial development. Drummond’s activity in the Bank of Montreal as vice-president, then as a de facto president during the tenure of Donald Smith, and finally as the official president focused on aligning the services and policies of the Bank of Montreal to the emerging opportunities in Canadian manufacturing and industry. The Bank also embarked on a major expansion of its branch network and field of operation, opening 110 branches and better than tripling its employee base from 300 to 1,000. Drummond’s leadership pushed and pulled the Bank to fully serve and exploit the emerging economy of the early twentieth century. He also provided support for Montreal capitalists to strike into the West Indies

18

Th e BM O Un iv er se

and Mexico in search of new fields of investments. This is how George Drummond ensured the central place of the Bank to the financial salience of the Dominion of Canada. Like a few of his contemporaries in the Bank’s upper echelons, Drummond was made a Knight Commander of the Most Distinguished Order of Saint Michael and Saint George (kcmg ) in 1904 and commander of the Royal Victorian Order in 1908. He and his wife pursued an amazing variety of philanthropic, artistic, and sporting interests to the greater glory of making Montreal Canada’s metropolis. Drummond’s contributions to the Bank, to the city, and to the civic and social life of his city and country seem remote and locked in time – sugar refineries, the red chamber of the Senate, tariff policy, knighthoods. For us, from this distance, the main point is how Drummond and his contemporaries built a banking system, and ceaselessly sought out investment, development, and opportunity not only to build their own fortunes but also for the prosperity of their customers and the wealth of nations. The fortunes they amassed doing so, they typically distributed, inspired by their Christian faith, conviction, and in the very finest philanthropic and civic traditions. So it was with Sir George Drummond.

BORN | 11 October 1829 in Edinburgh, Scotland MOVED TO CANADA | 1854 JOINED BANK OF MONTREAL | 1882 VICE -PRESIDENT | 1887–1905 PRESIDENT | 1897–1904 (de facto); 1905–10 RETIRED | Died in office DIED | 2 February 1910 in Montreal, qc TRIVIA | In 1895, George Drummond became the Royal Canadian Golf Association’s first president.

LEADER AND SERVANT

Richard Bladworth Angus

R

ichard Bladworth Angus stands out in the Bank of Montreal pantheon for several reasons. He was among the first to rise to the executive ranks in the nineteenth century as a career banker. Angus began his Bank of Montreal life as a bookkeeper/clerk. The leadership quickly understood his extraordinary talent and acuity. In 1861, he was sent to lead the Chicago agency. In 1863, he was reassigned to the much more consequential New York office as agent before coming back to Montreal in 1864 to occupy a series of progressively more responsible roles. In November 1869, he became general manager of the Bank. His first-hand knowledge of bank operations throughout the Bank’s field of action was unique and priceless. During the 1870s, his superb leadership is in large part responsible for the success of the Bank’s fortunes in the face of a stubborn economic depression. He was tempted away from the Bank by the siren call of railway development, resigning his position to manage the St Paul, Minneapolis and Manitoba Railroad (a Stephen-Smith syndicate interest). The Bank leadership was not a little unhappy to lose such a brilliant general manager. But Angus’s future and fortune lay down the track, in railways, with his involvement with the Canadian Pacific Railway. He worked hard, however, to maintain close ties between the cpr and the Bank of Montreal. In May 1891, Angus returned as a director of the Bank, taking a back seat in the affairs of the Bank until two decades later, when he was called to the presidency in 1910. Two years after that, he became the Bank’s largest shareholder.

R.B. Angus in many ways represented the last of that heroic generation of polymath businessmeninvestors-entrepreneurs of later nineteenth-century Montreal. He symbolized how Bank of Montreal banking expertise was harnessed to the cause of the great projects of the century, especially the railway. The Bank conferred not just capital but also first-class managerial and administrative expertise to Canadian economic development. Angus used his considerable wealth to invest in a wide variety of firms, and to create massive estates in Montreal and in the countryside. His accumulation of a considerable art collection, valued at $50 million in 1889, is still considered one of the most extensive and significant in Canada.

BORN | 28 May 1831 in Bathgate, Scotland MOVED TO CANADA | 1857 JOINED BANK OF MONTREAL | 1857 GENERAL MANAGER | 1869–79 PRESIDENT | 1910–13 RETIRED | 1922 (died in office as a director) DIED | 17 September 1922 in Senneville, qc TRIVIA | Unlike his contemporaries, R.B. Angus refused a knighthood in 1910. On the day of his funeral, 19 September 1922, the cpr stopped all trains for two minutes in homage to the contributions of one of the railway’s founders.

D e ter m ining D estinies

19

V

THE ESTABLISH M ENT BANKER

Sir Henry Vincent Meredith

20

Th e BM O Un iv er se

incent Meredith’s life and career neatly reflects the rise of Canada as a nation and the development of a homegrown Canadian financial leadership cadre. Meredith was the first Canadian-born leader of the Bank. His career as a professional banker began in Hamilton, Ontario, in Canada’s Confederation year, 1867. His success both shaped and was shaped by the rising fortunes of the Bank of Montreal in this era. Meredith knew the banking business from the ground up. As the radius of his responsibilities grew, Meredith’s managerial achievements reinforced and deepened the Bank’s imprint on the economic and financial life of young Canada. Meredith was described as “alert, keen, and absolutely exacting as to the details of the bank.” Meredith symbolized the quintessential Canadian establishment banker of his day – the epitome of integrity, conservatism, and professionalism. As one biographer noted, “There were men like him in London … but few in Canada.” Meredith’s regal, upright bearing and personality nicely complemented that of his outgoing and extroverted general manager, Sir Frederick Williams-Taylor. Cometh the hour, cometh the man: Meredith assumed the helm at the Bank of Montreal on the eve of First World War. As the head of the leading Canadian bank, Meredith’s advice and counsel were vital in supporting the Canadian war effort. The Bank was also called on to represent Canadian financial interests abroad and safeguard the credit of the nation in a turbulent time. Keeping the Canadian financial system from peril was the number-one priority. In the 1920s, Meredith’s Bank piloted a wave of mergers and acquisitions that included the Bank of British North America (1918), the Colonial Bank (1920), the Merchants Bank of Canada (1922), and Molsons Bank (1925). Together, they tripled the Bank’s asset base from $244.8 million to $831.5 million between 1913 and 1927.

Like a few great men of his day, Meredith’s philanthropic impulse was an essential part of his impact in the community. He established a trust fund to help Bank employees in straitened circumstances due to illness or crisis and a second fund to assist women employees. His involvement with the Royal Victoria Hospital was a particular passion. One observer commented in the late 1920s that “during the last 25 years there was hardly a … campaign launched for betterment of conditions of the relief of suffering, or the advancement of the city but had the encouragement and sympathy … as well as the practical support of this banker.” One obituary in 1929 remarked that “it is not only the brilliance of his genius” that evoked the outpouring of sympathy at his death but also his humanity: a fitting epitaph for Meredith’s contributions to the Bank and to the country.

BORN | 27 February 1850 in London, United Province of Canada

JOINED BANK OF MONTREAL | 1867 GENERAL MANAGER | 1911; Vice -PRESIDENT | 1912 PRESIDENT | 1913–27; CHAIRMAN OF THE BOARD | 1927–29

RETIRED | Died in office ELEVATED TO THE BARONETCY : 15 September 1916 DIED | 24 February 1929 in Montreal, qc TRIVIA | Meredith’s annual salary as president began at $40,000. He was an accomplished boxer.

THE NAVIGATOR

Sir Charles Blair Gordon

T

he presidency of Charles Blair Gordon coincided with one of the most tumultuous periods in the history of the twentieth-century Bank. It began during the two last good years of the 1920s – 1927 and 1928 – and ended just shy of Canada’s entry into the Second World War in 1939. Economic, social, and political forces dramatically altered the Canadian and continental landscape. The boom of the 1920s gave way to the great stock market crash of October 1929 and contributed in

BORN | 22 November 1867 in Montreal, qc JOINED BANK OF MONTREAL | 1912 (as director) PRESIDENT | 1927–39 RETIRED | Died in office HONOURS | obe, 1917; gbe, 1918 DIED | 30 July 1939 in Montreal, qc TRIVIA | Gordon’s wartime service included vice-chairmanship of the Imperial Munitions Board in Canada (1915–17) and Director General for War Supplies for Great Britain in Washington, dc (1917–18).

its wake to the Great Depression of the 1930s. Canadian banking came under intense scrutiny. The transformations in the financial system included the creation of a central bank – the Bank of Canada – and the establishment of a single Canadian government-issued currency. The careful and complex navigation through these turbulent waters summoned the full capacities of the Bank’s management of the day. Gordon and his General Manager Jackson Dodds were major protagonists in these changes as defenders of the Bank’s interests and advocates for Canadian banking. They were also facilitators of the new world of banking that was emerging. Gordon’s experience in industry (at Dominion Textile) and within the most influential financial and political circles was essential for the Bank and the country in these troubled times. Gordon had an earned reputation as a shrewd negotiator and businessman. For his contributions to the war effort in Ottawa and Washington, first on behalf of Canada and then the Empire, he was made a knight commander of the newly formed Order of the British Empire. “Perhaps there is no other man in Canadian business life,” one newspaper enthused in 1917, “whose career so aptly illustrates the reward of conscientious business energy as that of Chas. B. Gordon.” Gordon the man was said to be quiet in manner and simple in mode of life. He would be one of the first to arrive at Place d’Armes for work, and by many accounts exercised his authority with a “kindly demeanour and disarming modesty.” He was also a devoted Montrealer – the “chief of the successors” of those Scots who contributed so much to the life, commerce, and culture of Montreal in the heroic age of the nineteenth century. Yet he was also a businessman who circulated in the North Atlantic world of his time, putting Montreal in play with London and New York.

D e ter m ining D estinies

21

THE QUIET M AN

George W. Spinney

G

eorge Wilbur Spinney’s leadership of the Bank effectively began with his appointment as general manager in 1936, but his influence was felt much earlier. A major reorganization of the Bank in the early 1920s under Spinney’s supervision launched it into securities with the establishment of the Securities Department, giving the Bank the administrative capacity to underwrite and distribute investment securities. This transformation ensured the Bank could meet its expanding responsibilities in the financial system. In 1942, Spinney (standing centre in photo) became the Bank’s wartime leader virtually ‘in absentia’ as he was serving in Ottawa as chairman of the National War Finance Committee. He was effectively the first professional career banker to lead the bank. By the time he reached the position of general manager, he had thirty years of expertise in all aspects of the banking business. Spinney’s brilliance, however, resided in the knowledge and understanding of the emerging field of securities, particularly government securities. This expertise was put to national service with his leadership of nine successful Victory Loan drives to finance the Canadian war effort. The Bank of Montreal in George Spinney’s time had to deal with a series of formidable challenges, including the persistence of the Depression beyond the 1930s and Canada’s entry into the Second World War.

22

Th e BM O Un iv er se

In the post-war years, pent-up consumer demand and reconstruction would pose a different set of challenges: growth, opportunity, competition. Spinney’s career was marked with tough cases – with economic adversity, with special accommodation for cities and towns in the depths of depression, with extraordinary loans for public works, and with the supreme challenge of wartime. If the Bank of Montreal stepped up to the mark in meeting these challenges, it has bankers like George W. Spinney, the ‘Quiet Man,’ to thank for it.

BORN | 3 April 1889 in Yarmouth, ns JOINED BANK OF MONTREAL | 1906 (Bank of Yarmouth)

GENERAL MANAGER | 1936–42 PRESIDENT | 1942–48 RETIRED | 1948 HONOURS | cmdg, 1941 DIED | February 1948 (n.d.), Westmount, qc TRIVIA | He was the first leader of the Bank to be called “chief executive officer.”

W THE BANKER’S BANKER

Gordon R. Ball

ith the accession of Gordon R. Ball to the presidency from 1952 to 1959, the contemporary Bank begins to come into view. Ball was the epitome of a twentieth-century Canadian banker, working his way up the ranks and through the branches, including spending his formative years as a manager in New York during some of the most interesting times faced by the financial system – boom, crash, panic, depression, and war (1924–45). At the time of his appointment to the Bank’s presidency in 1952, he was the youngest president of Canada’s oldest chartered bank. He oversaw the Bank’s expansion in the post-war period. Ball’s early life shaped his approach to leadership. Born in Toronto in 1897, his youth was one of great economic hardship. He and his brothers supported the family from a very early age after the death of his father. He was a decorated member of the Canadian Field Artillery in the Great War, earning the nickname “Gunner Ball G.R.,” partly because of his stature (he was 5 feet tall) and partly because of his courage in the face of the enemy at the Ypres Salient and at Cambrai – both scenes of bloody conflict for the Canadian Expeditionary Force. He emerged from that conflict with a lifelong limp. In his banking career, he also took on the tough tasks. He managed the Bank’s New York agency Securities Department during the depths of the Depression. During the Second World War, Ball organized the British Treasury’s liquidation of American securities owned by British interests to finance the imperial war effort against the Axis powers. Ball’s New York time marked him and his approach to banking. Returning to Montreal in 1947 to become general manager, he became head of the bank in 1951–52, where he oversaw the Bank’s expansion in the heady post-war boom of the 1950s. In 1958, he established a joint Caribbean venture with the Bank of London and South America Limited called the Bank of London and Montreal. He was also responsible for the purchase of the 2 Wall Street building and oversaw the planning of a major new office tower in Place d’Armes. Gordon Ball was an intensely hard-working executive and inveterate traveller. He also was among the most social leaders in the Bank’s history, attending as many

BORN | 17 August 1897 in Toronto, on JOINED BANK OF MONTREAL | 1914 GENERAL MANAGER | 1947–52 PRESIDENT | 1947–52 RETIRED | 1959 HONOURS | Military Medal, 1919 (3d Batt, 1st Brig., Cdn Field Artillery)

DIED | 28 February 1959 in Montreal, qc TRIVIA | In 1939, Ball acted as the “Keeper of the Purse” for the Visit of HM King George VI and Queen Elizabeth to the United States. Ball found himself dressed in tails in front of a massive crowd who mistook him for King George VI. Ball had no choice but to walk the red carpet to great cheers – until the throng realized he was not the King, at which point the enthusiasm transformed into something rather different. He remarked that he knew what it was like to be king.

as 500 luncheons, cocktail parties, and events in a year. He was a tireless supporter of his community, judging from his devotion to everything from the Royal Victoria Hospital to the many associations in Montreal to the Canadian Mental Health Association. His contemporaries most remembered Ball the man as warm, unpretentious, and humorous. Until the day he died in office of a cerebral haemorrhage in February 1959, he kept a motto at his desk that read, “One of the surest signs of increasing growth in wisdom is a disinclination to take oneself seriously.”

D e ter m ining D estinies

23

THE MODERNIZER

George Arnold Reeve Hart

T

he leadership of George Arnold Reeve Hart coincided with the economic, social, and technological transformations of advanced industrial economies in the 1960s and 1970s. The banking sector itself was beginning to realize, perhaps late, that these changes would transform banking itself. Hart was well qualified to lead the Bank into the contemporary era. He joined the Bank in the depths of the Depression and served five years in the Canadian Army (1941–46). In the post-war period, Hart held a succession of posts from Montreal to Edmonton to New York City (where the Bank was the oldest foreign agency). In the Big Apple, Hart once quipped that he learned “to deal in millions and tens of millions.” Hart envisioned the Bank playing on a national and international scale. He himself travelled to the Asia Pacific and the subcontinent as early as 1953 and clocked 35,000 miles by air – an astonishing statistic considering that air travel was in its infancy. Hart was proud to claim years later that his was the first such trip of any Canadian bank executive. Hart recognized the urgency of change in the Bank in the 1960s, and moved accordingly, famously hiring Fred McNeil and a few executives from Ford Motor Co. to move to a new style of banking. Hart’s motives were intended to push and pull the Bank’s organization into the twentieth century through information technology and new information and control processing systems. The oil shocks and inflation of the 1970s also posed a series of challenges to the Bank. This last challenge, inflation, occupied many of Hart’s public interventions in the early to mid-1970s, as well as the troubling state of the national public debt. Hart led the Bank in a changing social and commercial landscape in Canada, recognizing that

24

Th e BM O Un iv er se

transformations were necessary not only at the Bank but also in the country. He was an energetic contributor to the economic, financial, and business debates of his day. He offered clear, insightful, and authoritative views on the present and future of Canada. “I feel strongly,” he told an audience in Toronto in 1958, “that this country’s growth will be assured, and the purchasing power of its currency preserved, only if Canadians are prepared to work for those rewards … this country was not built by people whose chief concern was how little they should work.” Hart was a Bank of Montreal banker through and through, believing that “you have to treat your people fairly if you want them to pull their share in promoting the business of the bank for the benefit of everyone working in it.” To the contemporary executive his words of 1975 may resonate: “All banking is a judgement exercise. You can’t always be right … You have to take some risks.” And on the Bank’s future: “I want to see the Bank move ahead with the times.” Hart reflected that his greatest satisfaction was “getting to know people … and trying to assist them with their various problems as they relate to banking” – truly the mark of a great servant-leader.

BORN | 2 April 1913 in Toronto, on JOINED BANK OF MONTREAL | 11 September 1931 PRESIDENT AND CHIEF EXECUTIVE OFFICER | 1959–74

RETIRED | 1984 HONOURS | mbe, 1946; cm, 1981 DIED | 5 October 2001 TRIVIA | The Bank’s early judgments of Arnold Hart were on the mark: “A good type of lad who has more than ordinary ability … is keenly interested in and is progressing favourably … Outstanding in every respect and should go far if given the opportunity.” His first job: control the postage at Mount Pleasant Road branch.

COM ES A HORSEM AN

W.D. Mulholland

W

.D. (Bill) Mulholland’s accession to the leadership first as president (1975–79) then as chief executive officer (1979–89) and also chairman of the board (1981–90) caused an earthquake within the Bank – a disruption whose tremors and aftershocks were felt for decades. Mulholland’s career had prepared him for the transformational role he was to play in putting the Bank of Montreal on a bold new strategic course. In 1944, he was commissioned in the US Army in the Philippines. His education included a ba from Harvard College (1951) and an mba from Harvard Business School (1952). His early career was with Morgan Stanley (1952) where, as partner, he led the financing of the massive Churchill Falls Hydroelectric Project in 1962, taking over the entire leadership of that project by becoming president and ceo of Brinco. In 1975, he was appointed president of the Bank of Montreal. The Mulholland era is the stuff of legend among a certain generation of bmo bankers. His style betrayed a single-minded focus on his number-one task: the transformation of the Bank of Montreal. His exacting personality, unimpeachable ethical code, and insistence on operational and strategic excellence would have made him feel at home as a Roman proconsul or a field marshal. The truth of the matter is, in retrospect, the Bank needed to be pushed and pulled into the contemporary era of financial services, to re-create the thrust, capacity, and strategic drive that had propelled it to the top of the Canadian banking system in the past. In carrying out that task, Mulholland was viewed by some as a horseman of the Apocalypse, while others saw a transformational leader – Napoleon crossing the Alps: the conqueror with his steed Marengo. However one viewed him, there was no questioning his commitment to ensuring the institution under his leadership would change to be ready for the future.

Mulholland’s singular vision was to transform the entire Bank – to elevate it to a premier international rank, to restore its operational and competitive edge. Under his leadership, the Bank of Montreal embarked on an epochal internal transformation. The Bank modernized its international and financial markets operations. It moved aggressively into large corporate finance. It streamlined its leadership structure. It established new groups and working groups to respond to the emerging needs of customers and markets. For the first time, women were being more aggressively promoted into the executive ranks. Technology transformation continued and accelerated. In 1984, Mulholland led the Bank to purchase Harris Bankcorp Inc. of Chicago, perhaps the most far-sighted of his actions. In one stroke, he had given the future Bank the strongest position of any Canadian bank in the US market and permanently established the character and remit of the Bank as firmly North American. In 1987, he led the Bank into investment with the purchase of Nesbitt Thomson. The Bank was challenged by global headwinds in the early 1980s, as third-world countries defaulted on loans. Mulholland took a risk and, rarely for him, found himself playing defence. Mulholland’s fame and his transformation of the Bank also came with a shadow side that provided grist for the mill of the popular press. He kept people waiting, sometimes for hours. He kept people guessing as to what his next move would be. The quest for excellence sometimes veered into perfectionism. His streamlining eliminated an entire generation of management. He stuck by unpopular decisions such as the separation of personal and commercial banking. As he himself realized, his single-combat-warrior style of leadership was, by 1990, passing from the scene. But there is a difference between style and substance: in substance – what remains of what was built – his legacy is complex, far-reaching, and created to last. His larger-than-life personality dominated the era at the Bank. But if it hadn’t been for Bill Mulholland, the avatar of transformation in an era of change, the destiny of the Bank would have been very different.

BORN | 13 June 1926 in Albany, ny, usa JOINED BANK OF MONTREAL | 1975 PRESIDENT | 1975–79; CHIEF EXECUTIVE OFFICER | 1979–89; CHAIRMAN OF THE BOARD | 1981–90

RETIRED | 1990 HONOURS | Prime Minister’s Medal (Israel); Knight Commander’s Cross (Badge and Star) (Bundesrepublik Deutschland)

DIED | 8 September 2007 at Windswept Farm, Georgetown, on

TRIVIA | Bill Mulholland’s lifelong passion was horses. He and his family built one of the premier Hanoverian stud farms in the world, Windswept Farm.

D e ter m ining D estinies

25

The W rit ten W orld of bm o

Defining Documents and Directions

A

nyone who visits the Bank of Montreal Corporate Archives will leave with no doubt that the banking business is a supremely information-intensive and document-rich enterprise. As the Bank grew and prospered over time, the challenges of information processing and control grew exponentially. Record-keeping and accounting, tracking and coordination, and correspondence all provided the pulse and the content of the Bank of Montreal information network.

Rules, regulations, strategic decisions, special projects, deals, contracts: the banking world is a written world. In the multi-million-document flow of the Bank’s history, some documents stand out because of their sheer volume and weight: think of the regulations and rules that govern banking. Others, however, stand out because they crystallize a turning point or a particular road taken. These documents define or direct. They each tell a story

about a dimension of the Bank’s experience – from a real estate deed, to a royal charter, to the first annual report published in French, to a key strategic document that launched the Bank into the 1990s. The documents presented here are in no way definitive – an entire book of documents would have to be dedicated to such an endeavour. These, by contrast, are meant to be representative exemplars – and a thematic cross-section – through two centuries.

The Articles of Association

T

he Bank’s Articles of Association are, in many ways, its Magna Carta. The document was the product of a protracted legislative and administrative struggle to establish Canada’s first bank. For many complex reasons, not the least of which was the concern for the financial well-being of the British North American colonies, the imperial Lords of the Treasury were reluctant to offer their full support to colonial banking, except under very specific circumstances and conditions. The first charter would not come until July 1822. Therefore, these Articles of Association represent the foundational document of the Bank of Montreal. The Subscribers, or signatories, had entered into an “Association or limited Co-Partnership” and agreed to “conduct banking Business in the manner hereinafter specified and described, by and under the name or style of the montreal bank .” The private company would conduct its banking business under the ‘superintendence’ of John Richardson, George Garden, George Moffatt, Thomas Andrew Turner, Robert Armour, James Leslie, Horatio Gates, John C. Bush, and Augustin Cuvillier. There were twenty-five articles in all setting out the rules, regulations, and conditions of the banking business, the capital stock of the bank (£250,000 “current money of this province”), the number of directors (thirteen), director eligibility, and other conditions “for the good management of the affairs of the said Association or Company.” The signatories to these original Articles of Association could scarcely have imagined how their actions in the summer and autumn of 1817 would influence the entire course of the Canadian financial system and set the foundations for one of Canada’s key institutions.

The W r it ten W or ld of b m o

29

O Land Purchase Contract for the First Bank of Montreal Building, 1818

30

Th e BM O Un iv er se

n 6 February 1818, James McDowall, a merchant of the city of Montreal sold a lot of land to John Gray, Horatio Gates, and George Platt, representing the newly formed Bank of Montreal, for the sum of £1,872. The first real estate purchased for a Canadian bank was Lot Number 11, “bounded in the front by the Line of continuation of St James Street, on one side by the Line of continuation of St François Xavier Street, on the other side by Lot Number twelve, herein after mentioned, and in the rear by Fortification Lane.” The original land belonged to Paul de Chomedey, Sieur de Maisonneuve, who is immortalized in bronze in Place d’Armes. Maisonneuve sold the land to Jean DesRoches on 10 January 1648. This was only

the second grant of land made by Maisonneuve. The ground on which the Bank’s head office stands, therefore, is rich in historical significance. The Bank purchased that original deed for $1,000 in 1948 after encouragement by former Dominion Archivist of Canada Gustave Lanctôt, who felt strongly that this document should remain in Canadian hands. Construction was completed in less than a year and a half. The first Annual Meeting of Shareholders convened in the new building on 7 June 1819. The classic portico with its Doric columns heralded an architectural style that would be adopted by many other banks and public buildings across Canada during the nineteenth century.

The Royal Charter

T

he Royal Charter of the Bank of Montreal came only after a long struggle, an interminable wait, and an eventual acquiescence on the part of the British imperial authorities. The Bank’s organizers had to wait until the summer of 1822 – almost five years after the institution had begun transacting business. The Lords of the Treasury in Whitehall as well as Colonial Office officials were very careful about issuing banking charters. Joint-stock banking was a relatively fresh innovation: imperial decision-makers had to be sure that royal approval would be merited and that the activity they were sanctioning was worthwhile and beneficial. As a result, royal charters were not easy to obtain and detailed in their restrictions. The articles of the first charter essentially set out the rules of the banking game, who paid and who played. Of the twenty clauses, four are devoted to banking crimes: embezzlement, theft, counterfeiting, and forgery. The first three were punishable by death “without benefit of clergy.”

The W r it ten W or ld of b m o

31

The Resolution to Print the First Bank Notes

T

he resolution to print the very first Bank of Montreal bank notes was passed by the directors on 13 September 1817, weeks before the Bank opened its doors on 3 November 1817. The order to print the first notes was given to Mr Reid, an engraver in Hartford, Connecticut. That same day, the directors of the Bank agreed that one of the partners, John Richardson, be instructed to procure for the Bank a set of plates in London – have

a certain number struck off on the “best Bank paper.” The watermark would have the name of the Montreal Bank as closely as possible imitate the watermark of the Bank of England notes. These materials would then be shipped to Montreal by the first vessel in the spring of 1818, together with a rolling press of the “best construction.” This is how the story of bank paper currency began in Canada.

Letter to George Spinney from Prime Minister Mackenzie King

T

he Bank of Montreal’s involvement in wartime finance for both the first and second world wars was extensive and often intense. The Bank mobilized its head office administration and branch network to promote the savings campaigns in order to raise the funds required for the national war efforts in both conflicts. On a separate track, fundraising was also supported on behalf of Canadian auxiliary war services such as the Royal Canadian Legion, Salvation Army, Knights of Columbus, and ymca /ywca . The Bank’s role in wartime finance was not limited to these extensive activities. The Bank’s senior

managerial capabilities were also conscripted to the war effort. The managerial capabilities that were required in mobilizing the administrative capacities of wartime finance were considerable – so considerable, in fact, that the capacities of the Government of Canada expanded virtually exponentially during this period. The document provided here is a letter from Prime Minister William Lyon Mackenzie King to the Bank of Montreal’s G.W. Spinney. Spinney was on loan to the Dominion war effort as the chairman of the National War Finance Committee. The letter congratulates Spinney on the overwhelming success of the Fourth

Victory Loan in May 1943. The success of the loan came at a crucial time in the war, as King mentions in the letter, coinciding with the need to “demonstrate unity of purpose” in the ongoing war effort. King expressed his appreciation in the House of Commons on 17 May 1943 for the record $1.1 billion raised “in firm support of Canada’s fighting men in the campaigns which must be undertaken before victory can be achieved.” There were a total of nine victory loans in the Second World War, raising approximately $12 billion.

The W r it ten W or ld of b m o

33

The First Annual Report in the French Language

T

he first annual report of the Bank of Montreal to be published in French came in 1962, in the 145th year of the institution’s existence. What today is taken for granted – the publication of key bank documents in both official languages – was only beginning to become de rigueur. The fact is that the Bank’s roots – its culture, character, and activities – for over a century were deeply anchored in the English-speaking Protestant community of Montreal. The cultural and operational parameters of its management found its expression predominantly in English, the language of business. The cultural, political, and linguistic ferment of the 1960s in Quebec gave rise to what historians call La révolution tranquille or the Quiet Revolution. This movement transformed almost every aspect of Quebec society – social, cultural, political, and economic. Under the banner of maîtres chez nous – masters in our own house – the people of Quebec began to assert their collective rights as a people, not least in the area of language and linguistic rights. Therefore, the appearance of the Bank’s first annual report in French is the modest beginning of part of a much larger and complex story of adaptation to new conditions and realities, new dynamics and new opportunities in the province. As General Manager R.D. Mulholland instructed in a circular on the subject, the Bank had in mind “important French-speaking customers to whom the new [French] edition of the report may be of interest, and also prominent citizens, officials of community organizations and municipal officers, including mayors of municipalities who are customers of the Bank.” As the province’s economic power began to grow, so did the possibilities of finding new ways to reach customers – beginning with speaking their language.

34

Th e BM O Un iv er se

Canada’s First Bank, Volumes i and ii

T

he celebration and commemoration of history and historical milestones has long been a subject for historians to ponder. What, exactly, are people celebrating? What was important to them? What did they emphasize, and what did they leave out? Were any controversies buried? Were people looking back or looking forward? These are questions that future generations will ask of our generation. Our generation gets to ask them of the last one. The Bank’s 150th anniversary celebration in 1967 was celebrated on a substantial scale. The Bank participated actively in Expo 67 and in the Centennial of Canadian Confederation in 1967. The Bank’s 1967 Committee was formed in January 1963, four years before the event. The Bank’s celebrations included scholarships, art exhibits, and a host of civic awards. The Bank also commissioned drawings of every corner of Canada by artist R.D. Wilson. Other plans included postage stamps, silver dollars, pins, new scholarships, a film, and the funding of a Montreal Observation Tower, anniversary dinners and receptions, and special donations. The 150th anniversary was also the year of a new beginning, a new reorganization, and a stunning corporate symbol: the M-Mark (more commonly known as the M-Bar), marking the “spirit of vitality and progressiveness with which the Bank faces the future,” in the words of one memorandum of the era. Publication of the two-volume Canada’s First Bank is the lasting legacy of the 150th anniversary celebration. The author, amateur historian and journalist Merrill Denison, was commissioned in 1955 to write the volumes, which took twelve years to complete (a luxurious time frame considering contemporary timelines!). The volumes showed the generation of 1967 how much the Bank had accomplished in 150 years. While the volumes are very much a tribute to the historical biographical style of yesteryear – even at the time of their

publication – the sheer work involved and the attention to detail are also legacies of the 150th anniversary. Past commemorations remind us of how different, and yet how very much similar, we are to the generations that preceded us. Generation 1967 and Generation 2017 are not so far apart. We are, as a people, an

historical people. We understand its importance. We celebrate our achievements. We use anniversaries not only to mark the past but also to express our enthusiasm for the present and future. We try to learn from that past by embracing what is worthwhile and leaving behind the rest.

The W r it ten W or ld of b m o

35

I

The Task Force Report on the Advancement of Women in the Bank

36

Th e BM O Un iv er se

n the early 1990s, the Bank struck three important internal task forces on the advancement of women and other groups. Under the leadership of President and Chief Operating Officer F. Anthony Comper, the Bank moved to understand and act upon the question of how best to unleash the capacities of people and groups whose talents and potential had not been sufficiently recognized or taken care of in the world of work. The Task Force on the Advancement of Women in the Bank, led by bmo Senior Executive Marnie J. Kinsley, reported in November 1991. Its findings included, for example, that three-quarters of the then-28,000 permanent employees were women, yet they constituted only 9 per cent of executive positions and 13 per cent of senior management. That “dismal” performance, as Tony Comper explained in the preface to the report, was among the best in the banking industry, thus underlining the seriousness of the issue. The landmark report was an unusually candid examination of the perceptions and the realities of contemporary women bankers struggling to move forward in financial institutions. It also served as an important reality check to the Bank’s leadership. The report also began to shape future strategy and the four key recommendations – get the facts out; help employees get ahead; reduce the stress (on women and families); and make it official (and accountable) – was the beginning of a long process toward gender balance in the Bank. The task force also came up with twenty-six action plans that would be implemented in the wake of the report. The report began to change the culture at the Bank over time through initiatives that have sustained the momentum of the initial work in the early 1990s. The Bank’s efforts were recognized by the 1994 Catalyst Award for promoting the advancement of women. Similar task forces followed in the 1990s on Aboriginal advancement, visible minorities, and the employment of people with disabilities. Both of these important reports were inspired by the success and effectiveness of the advancement of women task force.

The 1990 Corporate Strategic Plan

The Plan unleashed an energy and enthusiasm within the Bank that not even the senior leadership was completely prepared for. The framework it laid out very much set the stage for the Bank’s renewal and its achievements during the critical decade of the 1990s.

T

he 1990 Corporate Strategic Plan was perhaps the most important strategic document of its generation. It signalled a major shift in the operational philosophy of the Bank under the new leadership of Matthew W. Barrett (pictured here), successor to W.D. Mulholland. The shift focused on reorienting the leadership, the organization, the operations, and the outlook of the entire Bank organization toward customer service. But this document was rather more than just a reorientation toward customer service. The times demanded that the Bank step up to a transforming operational landscape. The Strategic Plan did just that. It set out a specific vision that focused on renewing the Bank’s commitment to operational excellence and to providing customers with value, service, and high ethical standards. It refreshed commitments to shareholders, employees, and communities in a way that encouraged a sustained engagement with the wider world. The document also set out priority markets in Canada and the United States that ranged from individuals and small- and medium-sized businesses to larger enterprises to corporate and institutional investors. The Strategic Plan was itself a well-planned exercise that involved a wide canvas of executives over every aspect of the business. The process identified what was working and what was not working. The exploration phase examined morale, chain of command, business planning, and even the Bank’s image. The plan that emerged from the research phase then encompassed every aspect of the business and presented “success strategies” for each. Crucially, it also did a few things that were deeply desired and popular within the Bank, such as reintegrating personal and commercial banking.

The W r it ten W or ld of b m o

37

Authorization for Banking in China

T

he authorization to begin branch operations in China was officially announced on 21 December 1994, after months of negotiation. The Bank received approval to open a branch in Guangzhou, capital of Guangdong province. The branch was a Bank first in the People’s Republic of China, although a representative office had been operating since October 1993. The Bank was one of only ten international banks granted permission to open a branch in Guangzhou. The branch was opened on 20 November 1995. Entry into China was a key element in the Bank’s targeted global expansion strategy. bmo ’s presence in Guangzhou, a manufacturing city of 8 million northwest of Hong Kong on the Pearl River, was essentially to help Canadian businesses, especially small- and medium-sized enterprises who were looking to finance trade and investment opportunities in China. “There is an insatiable demand for financing in this region,” explained one bmo official on the ground in China, especially from joint-venture companies and Canadian enterprises wanting to do business in China. The Bank’s move into China in the 1990s and its sustained interest made excellent economic sense. From a trade perspective, China had already become one of Canada’s most promising partners by the mid-1990s. In the five years between the opening of the bmo branch in Guangzhou and 2000, China-Canada trade flows vaulted from $8 billion to almost $15 billion. The Bank’s sustained interest in, and commitment to, the Asia Pacific over the subsequent two decades has been an important hallmark of the Bank’s recent history.

38

Th e BM O Un iv er se

Announcement of the Institute for Learning (ifl )

O

n 1 October 1991, the Bank announced plans to build a $40-million complex in Toronto, Ontario, destined to become the Institute for Learning. The new centre was the only facility in the industry dedicated exclusively to the development of employees, and one of only a few such facilities in the corporate world in North America. Launched by Matthew W. Barrett, the Bank’s ceo and chairman saw this landmark initiative as bmo ’s

reaffirmation “that to be among the best banks in North America, Bank of Montreal must have the best employees in the business.” The new complex would be the physical manifestation of those aspirations – “our strategic plan cast in brick and glass and concrete.” Under the superb guidance of principal architect Raymond Moriyama, the ifl was to have a teaching college of thirteen classrooms, four student lounges, a resource library, a corporate training department, and a presentation hall that could accommodate up to 250 people for all kinds of meetings. The ifl was also to have 150 single sleeping rooms, a dining room, bar, reading room, and fitness facilities. It was estimated

that more than 13,000 employees would visit the centre each year to meet the Bank’s goal of providing five training days for 34,000 employees each year – “a level matched by only a handful of corporations in North America.” The decision to build the centre was a strategic investment decision, according to Barrett. “There are many competing claims on our funds,” he concluded, “but we believe that none is as important as the development of our own people, and none has greater potential to provide a significant return to the Bank in the future.”

The W r it ten W or ld of b m o

39

A Gro w th Business

bmo and Its Canadian Acquisitions

S

uccessful, well-managed banks will typically be confronted by the challenge of the nature, extent, and speed of expansion. Should they grow organically, branch by branch? Should they purchase other, smaller, or less efficient financial institutions in order to achieve immediate results and a ready-made set of branches and assets? There are further considerations that transcend any individual bank. For example, do changing economic conditions in technology, management, or market conditions suggest to bank managers that economies of scale are needed to pursue their business more effectively? Can smaller companies and institutions compete as economies and markets develop? Sometimes, it is not even a question of size or scale, but the ability to innovate and embrace new, lucrative markets.

For the Bank of Montreal, all these questions have come into play in the question of acquiring competitors or other banks. In the real world of Canadian banking, moreover, the decisions to acquire have been more complex than the considerations that economic theory would set out. Sometimes, the motivation was to gain entry into a market. At other times, the reputation of the Canadian banking system might have been at stake in the case of a struggling or failing bank. In that case, the Bank of Montreal as the senior Canadian bank, along with a few of the other established banks, felt a responsibility to ensure the smooth operation and the high reputation of the system itself. Sometimes, the story is straightforward; occasionally, the story of an acquisition is more curious or exciting as Bank of Montreal

managers move to acquire banks as part of a competitive impulse, or to forestall the arrival of unwanted or undesirable players in the market. The mergers featured here take place in two eras: the first is the 1820s and 1830s; the second is between 1900 and 1925. In fact, the last bank to be acquired before the contemporary era was the Molsons Bank in 1925. The Bank’s next major Canadian acquisition would come over sixty years later, with the acquisition of Nesbitt Thomson in 1987. To a greater or lesser extent, the banks featured here have their own histories and trajectories. They have also been part of the Bank of Montreal’s trajectory, making them a notable part of the history of the Bank.

The Bank of Canada, 1818–31

T

he Montreal-based Bank of Canada has the distinction of being the first bank to be taken over by the Bank of Montreal, in 1831. This Bank began life in 1818 as a private enterprise. In 1820, the organizers of the bank petitioned for incorporation. In 1822, the

administration of the colony granted it a charter to conduct business. Canadian banking had only just taken root in the British North American colonies, and so banking establishments were somewhat experimental enterprises, especially in the colonial context. Add to this the untamed and sometimes wildly swinging nature of the colonial economy and you have a recipe for a potentially unstable banking and financial environment. The short lifespan of the Bank of Canada underlines the bad chemistry that can occur between untrained

management, bad markets, and bad luck. The sharp economic contraction of 1825 in the colony and the following depression in 1826 sealed the fate of the first Bank of Canada. The bank was not alone in suffering the consequences of the downturn. It was a blow from which the management could not recover. By 1831, the Bank of Canada discontinued business, with its business taken over the Bank of Montreal, which had been able to weather the storms of the late 1820s more effectively.

A Gro w th Business

43

The Bank of the People, 1835–42

T

he Bank of the People was established in Upper Canada in 1835 and conducted a respectable business in the colony – which is saying something in the tumultuous 1830s. That decade featured a boomand-bust economic cycle and rising political tensions in both Upper and Lower Canada, culminating in the

44

Th e BM O Un iv er se

outbreak of rebellion in 1837–38. In 1838, the Bank of Montreal bought the bank. In 1841, it purchased the bank’s entire capital stock of £50,000 for one main reason: to gain access to the potentially lucrative markets of Upper Canada. After 1823, the Montreal Bank had been prohibited by law from conducting a banking business in the neighbouring colony. Upper Canadians argued successfully that they wanted to favour the development of banking on their own soil, in their own colony. As a growing and successful bank, the management of the Bank of Montreal understood the importance of expansion into the economically promising communities west of the colonial border. Control of the Bank of the People was the way for Montreal capital to be deployed into the communities of Upper Canada. Where politics failed, business succeeded in finding a way through. The union of the Canadas in 1841 brought together what is now southern Ontario and southern Quebec under one administrative and legislative unit. New political arrangements meant that the prohibition against Montreal-based banks conducting business in Toronto, and vice versa, was solved. The Bank of the People had served its purpose and retired as the Bank of Montreal established its first branch in the city of Toronto under cashier and agent William Allan. It was, therefore, from modest, almost borrowed beginnings that the Bank of Montreal’s presence grew in Toronto. In fact, the Bank of the People branch was located at the intersection of King Street and Bay Street – the place where First Canadian Place would rise a century and a half later. (For the Bank’s contribution to the architecture and built environment of Toronto, see A Sense of Place, page 98.)

The Exchange Bank of Yarmouth, 1869–1903

T

he Exchange Bank of Yarmouth was established in 1869 in Yarmouth, Nova Scotia, a seaport town in the southwestern part of the province on the Bay of Fundy founded in 1759 by New England Planters from Yarmouth, Massachusetts. Its claim to fame has been

its location in the heart of some of the world’s largest lobster fishing grounds. In the nineteenth century, however, the lifeblood of the town was its shipbuilding industry. The Exchange Bank of Yarmouth prospered in the ensuing three decades. By the dawn of the twentieth century, however, the problem was how to compete with larger, better-managed banks with superior technology and access to resources. The Yarmouth bankers found a willing purchaser in the Bank of Montreal, which was looking to expand its presence in Atlantic Canada.

By the end of the Yarmouth bank’s tenure, its circulation of notes was approximately $200,000. The Bank of Montreal paid $321,190 for the bank upon the transfer of the assets of the purchased bank on 15 May 1903. The Yarmouth bank had assets of $680,303. The purchse of the Exchange Bank of Yarmouth in 1903 was the Bank of Montreal’s first acquisition in six decades, beginning a wave of mergers and consolidations in the Canadian banking system that would transform the face of the system for decades to come. A Gro w th Business

45

The People’s Bank of New Brunswick, 1864–1907

T

he People’s Bank of New Brunswick, like so many regional banks in Canada, provides us with a good example of the rise of the civic and entrepreneurial spirit in the nineteenth cenutry. The founder of the bank, Archibald Drummond Fitz Randolph, was a Fredericton wholesaler/entrepreneur who established

46

Th e BM O Un iv er se

the bank with $60,000 in start-up capital. “Archie” Randolph’s career was that of railway promoter, serving as treasurer of the Fredericton Railway Company, which succeeded in building a line to connect to the Western Extension railway from Saint John to Maine in 1869. His enterpreneurial drive also propelled him into the insurance business and into gas lighting and lumber concerns. This was in many ways a family bank, since the founder managed the bank until his death in 1902, and his family as principal shareholders sold it to the Bank of Montreal in 1906.

In the early 1900s, the Bank of Montreal management had decided to expand its territory through acquisition of smaller regional banks, which included the Exchange Bank of Yarmouth (1903) and the People’s Bank of Halifax (1905). In 1907, the Bank purchased all the shares of the New Brunswick bank for $350 per share.

The People’s Bank of Halifax, 1864–1905

W

hen banks are prosperous and want to expand, they go shopping. Such was the case with the People’s Bank of Halifax, founded in 1864. The acquisition of the Halifax bank, with its paid-up capital of $1 million and a reserve fund of $440,000, allowed the Bank of Montreal to expand significantly, largely but not exclusively in the Maritimes and in Quebec. For the managers of the People’s Bank, sale was inevitable. In a note to the shareholders on 25 March 1905, the directors wrote that they were “led to take this course in consequence of impending losses, keen competition and the strained resources of the Bank which seem to make it advisable in the interests of the shareholders. Your Directors have found great difficulty in providing for the wants of their customers and keeping the business of the Bank in a healthy condition with the limited resources at their command, while the keen competition of the larger institutions render it year by year more difficult to make profits for the shareholders.” At the time of purchase, the People’s Bank of Halifax operated twenty-four branches, fifteen of them in the Maritime provinces, and a number of branches in southern Quebec. One Bank of Montreal memo suggested that with judicious management, the People’s Bank would become “a source of profit to the Bank of Montreal, while affording increased banking facilities to the mercantile community in Quebec, New Brunswick and Nova Scotia.” The Bank’s acquisition of the Halifax bank allowed the Bank of Montreal in one stroke to become as strong as other major banks in Nova Scotia and New

Brunswick. The price tag was $1.15 million – $138,000 in cash and the rest in Montreal stock (valued at $253 per share). This was considered below market price. In the last year of its pre-takeover operations, the People’s Bank was able to register a profit of $35,655.57.

A Gro w th Business

47

The Ontario Bank, 1857–1906

T

he Ontario Bank was established in 1857. By 1906, it had twenty-two branches in Ontario and Quebec. That year, the Bank of Montreal took over the assets of the Ontario Bank after a general manager, Charles McGill, had invested badly in the stock market and lost $1 million, but not before falsifying the books to cover the mistakes. “The immediate absorption of the Ontario

48

Th e BM O Un iv er se

Bank by the Bank of Montreal,” the Globe suggested, “is a most gratifying proof that our banking system and banking institutions are too strong to be shaken by even the worst effects of personal or corporate delinquencies. Instead of alarmed depositors and panicky noteholders who crowd to the closed doors of embarrassed banking institutions under less stable conditions, we witness the simple transfer of the accounts to the largest and strongest of our chartered banks. The injurious disturbance of commerce and finance which elsewhere attends and follows the forced closing of a banking institution is thus entirely averted, and the business goes smoothly on without a loss or inconvenience to the general public.” The paper went on to suggest that “the highest praise should also be accorded to the president and directors of the Bank of Montreal for their prompt action and assuming all the Ontario Bank’s liabilities to depositors and noteholders.” While the banks had no legal obligation to act, “all chartered banking corporations also feel a responsibility to the business community for the general stability of the fiscal system under which they operate, and are directly interested in maintaining that stability and sustaining unshaken the confidence of the public. The Bank of Montreal has risen to all the demands of this broader responsibility and promptly assuming the liabilities of the Ontario Bank before the nature of its impairment could be known to the general public, and even before the story of its difficulties could obtain general circulation. Simultaneous with the story of personal mismanagement and recklessness has come the announcement that all the liabilities of been assumed, that accounts will be transferred to the Bank of Montreal, and that all obligations will be liquidated with open doors.”

The Newfoundland Savings Bank, 1834–1962

T

he Newfoundland Savings Bank was founded in 1834 and operated a colony-wide savings business from a single branch in St John’s, on Duckworth Street. The savings bank was run as a department of the provincial government until then. Much of the old bank’s business with depositors in the outlying areas of the province was conducted by mail. The Bank of Montreal has had a long and complex relatonship with the Dominion of Newfoundland. In the 1890s, a bank crisis precipitated by a financial downturn compelled the Newfoundland government to invite the Canadian banks into the banking market, chief among them the Bank of Montreal. The Bank thereafter established a close working relationship with the government, becoming government banker in the early part of the twentieth cenutry, opening for business in the same premises occupied by the Newfoundland Savings Bank. It is difficult to overestimate the Bank of Montreal’s persistent influence in the history of twentieth-century Newfoundland in banking and in the government of the Dominion. It is, therefore, not surprising that the Newfoundland Savings Bank was sold to the Bank of Montreal in 1962, adding its $27.8 million deposits and its office to the Bank’s then $3.653 billion on deposit bank-wide. The bank was sold to the highest bidder – the Bank of Montreal paid a shade less than $3 million – after the provincial government of Premier J.R. Smallwood decided that the offers they were receiving were insufficient.

A Gro w th Business

49

T The Bank of British North America, 1836–1918

50

Th e BM O Un iv er se

he Bank of British North America (bbna ) was founded in 1836 under royal charter and had the distinction – and one-time advantage – of being organized and run from London. The bank had a branch network that extended from St John’s in the Dominion of Newfoundland to the principal cities of Atlantic and Central Canada. It was also the first bank to operate in British Columbia. The Bank of Montreal’s takeover of the bbna is a particular case in point on the importance of reputation to Bank of Montreal bankers. By the 1910s, the UKbased board of the bbna found it increasingly difficult

to manage the intricacies of Canadian banking from across the ocean, which can perhaps be considered an operational or practical matter. As early as 1915, in fact, the Bank of Montreal had been receiving representations from the bbna about a possible merger. But Canadian Finance Minister Sir Thomas White poured cold water on the suggestion, informing the Bank that the country would not be friendly to further bank amalgamations. However, the threat of a bbna takeover by Lord Beaverbrook, the Canadian financier Max Aitken, was much more in the realm of reputational risk for Canadian banking, and therefore, acquisition by the Bank of Montreal was approved. From the Bank’s perspective, it would be a shock if Beaverbrook’s plans were carried through to completion. The Beaverbrook strategy seemed to focus on the Colonial Bank, which he controlled, taking over the bbna in anticipation of a merger of Canada and the West Indies. The negotiations for the bbna were long, drawn out, and extensive. The magnitude of the acquisition was significant, and involved a mobilization of administration and a great deal of preparation. It also involved the Canadian government. Finance Minister White was increasingly reluctant to grant any further mergers or acquisitions among Canadian banks or financial institutions as public sentiment had become decidedly uneasy about a perceived lack of competition among banks. By the spring of 1917, the situation had deteriorated so much – from the Bank of Montreal’s point of view, at least – that bmo President Sir Vincent Meredith wrote to White recalling that while in 1915 the “feeling of the country was strongly opposed to such Bank amalgamation unless the Bank to be purchased was nearing financial straits,” he yet felt that the time had come for action. As Meredith explained to the finance minister, more than one reputation was at stake in the deal: those of the bank, the Canadian banking system, and the country. The deal was sealed on 20 March 1918.

The Merchants Bank of Canada, 1861–1922

T

he Merchants Bank got its charter on 18 May 1861, and began business three years later, in 1864, with an authorized capital of $2 million. The bank’s Montreal founders included Hugh Allan, the Hon. Louis Renaud, Harrison Stephens, Edwin Atwater, and other prominent citizens of Montreal. The bank was chartered in 1868 as the Merchants Bank of Canada, absorbing in the process the Commercial Bank of Canada. This Montreal-based bank prospered until after the First World War. The Merchants was credited with being the first Canadian bank ‘to follow the star of empire westward’ and the first to open a branch west of Ontario – in Winnipeg. In the early 1920s, its management got into trouble with investments – a typical story – and in the 1922 annual meeting, the $12.298 million loss was revealed. The cause of the collapse was a large loan to Thornton Davidson, an investment house that failed. In the autumn of 1921, the Bank of Montreal stepped in with an offer to purchase the struggling bank following “wild days of rumours, much excitement on the stock market, and some concern among financial men generally,” according to press reports. The failure of that bank under the presidency of Sir Montagu Allan was ascribed to “adventurous banking carried on by the General Manager” and “transacted without the knowledge of the Directors.” Allan himself was charged with fraud and malfeasance offences but was not committed to trial and escaped any prison sentence. The Bank of Montreal purchased the Merchants Bank of Canada for $1.05 million, equal to $10 per share. The Bank was also granted an increase in its capital stock

to meet the increased circulation requirements of the Bank post-acquisition. The Government of Canada was reluctant to approve the deal on general principles, especially since the wave of mergers in the previous decades had created an impression in the public mind that competition would be unduly restricted. But it was the specifics of the case, and the danger of the collapse of the Merchants itself, that persuaded the Dominion government to acquiesce in the purchase for the safety of the system and to avoid “a condition of alarm concerning our banks generally, which would be prejudicial to the public interests.”

A Gro w th Business

51

T Molsons Bank, 1853–1925

52

Th e BM O Un iv er se

he Molsons Bank was established in 1855 under the provisions of the Free Banking legislation passed in Canada in the early 1850s. The bank’s establishment realized the dream of John Molson Sr that banking should be owned by a family or tight partnership to ensure sound management. The new family bank provided greater financial flexibility to the expanding busines of the Molson enterprises and, in particular, became an important resource to the agricultural community of its day. Its growth throughout the nineteenth century and early twentieth century is testament to this fact. The connection between the Molsons and the Bank of Montreal extends virtually to the latter’s origins, with John Molson’s participation in the management of the young Montreal bank – and eventually its presidency. Thereafter, the family provided business and enterprise expertise on the board fairly consistently for decades. By the mid-1920s, the Molsons Bank had 125 branches in its network, mainly but not exclusively in Ontario and Quebec. The bank’s president, Fred Molson, began discussions with Bank of Montreal director Col. Herbert Molson (who was also his cousin) on the possibility of the larger bank taking over the smaller one. Banking in the 1920s, especially for smaller banks, had become more difficult in the wake of some spectacular failures, including the Merchants Bank and, notably, the Home Bank in Ontario. Bank depositors had every right to be vigilant, since there was no deposit insurance. Bank customers had to assess the risk of investing and depositing in smaller banks in particular, since they could lose their money. The merging of the two banks was made easier by the close ties – social, banking, financial, and otherwise – between the respective managements, and especially between the Molson family and the Bank of Montreal as an institution. The merger was completed in early 1925.

ten Days of Decision

Pivot Points

D

evoting a chapter to particular days that changed the Bank can be a dangerous undertaking, not least because it can raise more questions than it resolves. First of all, why ten? Why days and not months or years? Doesn’t the choice of days themselves suggest something about the way history itself is being viewed? What difference can a day – a mere twenty-four hours, if you’ll forgive the phrase – really make? Why those days and not these much more interesting/ important/consequential days? Some might suggest that we are making some assumptions about organizations in time, that the longue durée is far more consequential than the individual, formal day when something happens. That day can represent merely the culmination of a process, a decision, an event that in itself took months or years to come to fruition. History and

historians constantly are reminding us of the deeper, subterranean processes at work in the making of our history, the tidal forces of global capitalism, nationalism, world wars, and the like. These perspectives allow us to understand that the people of each generation of the Bank of Montreal were not just directing their steps and taking their decisions toward a horizon without a future. Yet there is something intuitive and compelling about focusing on the day. It is a unit of time that is human and easily understandable. Some days stand out – birthdays, anniversaries, deaths, the birth of nations – and for all that, can be no less complex than a longer duration. There is a ‘before’ and an ‘after.’ There is something that binds us to the day, as we live most dramatically in the day. We know that there are good days and bad days, important days, days that flow quickly, and

days that drip slowly on the page. This chapter, therefore, uses these days as points of reference, days that meant something to the past, present, or future of the Bank of Montreal – and sometimes all three. Each day represents a particular moment in time that symbolizes, projects, starts, or ends something. The days chosen here offer us different pieces that form a mosaic of the experience of the Bank. It is by no means comprehensive – only suggestive of some of the major turning points in the life of the Bank. Each Bank of Montreal employee, past and present, will have his or her own perspective on the specific days that changed their institution. In truth, there are likely hundreds of such days that cut across the surface of two centuries. While these chosen barely scratch that surface, they all point to an important aspect of the Bank’s story.

3 NOVE M BER 1817

Open for Business

W

taken up with preparing for the opening, hiring personnel, raising capital, preparing the currency, holding the requisite meetings, and giving the final approvals. The announcement in the Montreal Herald and the Canadian Courant was plain and simple – “without fanfare” as it was once described: “23d October 1817. the bank will begin its operations on monday the 3d of November next. Bank Hours from 10 o’clock a m to 3 o’clock p m . Discount days, Tuesdays and Fridays. Bills and Notes for Discount to be sent under cover to the Cashier on the days preceeding.” It is from these humble beginnings that what seem like ordinary days turn out to be significant in the retrospective gaze of posterity. At the time, however, some humility was perhaps in order: the Montreal Bank was not chartered and, in fact, would have to wait five years for its first official charter. The opening was also something of an exhausted ending as well as a beginning: an ending to the struggle for colonial banking that had taken up the greater part of a quarter century. The Bank’s first offices were on St Paul Street – the main commercial artery of this city of 16,000 inhabitants that dissected the centre from east to west. This was the epicentre of Montreal’s – and Canada’s – commercial awakening in the nineteenth century. The Bank’s premises were very likely comprised of a small door through which one would find a small vestibule leading to a small banking chamber, a fireplace, some high bookkeeping desks, and the then-current equipment of Canada’s first banking venture. Thus began what would become the extraordinary adventure of Canada’s first bank.

e are compelled to go back to the very beginning – to the first day of business – to find the first truly remarkable day in the Bank of Montreal experience. Of course, the Bank was not built in a day. In fact, this day, 3 November 1817, was the culmination of days, weeks, months, and years of struggle by Montreal merchants to establish such an operation in the face of imperial ambivalence about the wisdom of such a project. Much of August and September of that year was

ten Days of D ecision

55

Parliament buildings under construction, Ottawa, Ontario, 1865. Photograph by William Notman

19 NOVEM BER 1863

Canada’s Banker

B

y an Order-in-Council, dated 19 November 1863, the account of the Government of the Province of Canada was transferred to the Bank of Montreal on 1 January 1864. From that date, the Bank acted as the financial agent of the United Province of Canada.

56

Th e BM O Un iv er se

In the past, the Bank of Montreal had acted as a financial agent of the United Province, but the 1863 appointment was in some respects different. The Bank by the 1860s had managed to emerge as the dominant player in Canadian banking, especially after the difficulties and eventual demise of its archrival, the Bank of Upper Canada. This was a critical decade for Canada, with political and economic momentum growing to join the British North American colonies into one political and administrative unit. The Bank’s capital and resources were critical to the operations of the

colonial government in the run-up to Confederation in 1867, and thereafter. The Bank’s leaders, moreover, were deeply involved in the financing of the projects of the new Dominion, not to mention attempts to develop a new banking system for the country. Relations between Bank of Montreal executives and key members of the newly minted Canadian Cabinet, especially Prime Minister Sir John A. Macdonald, were especially close. The Bank also acted as the key Canadian bank in the financing of the Canadian Pacific Railway (1880–85), a project closely allied not only to the Bank but also some of its brightest individual lights – Lord Mount Stephen and Lord Strathcona. The Bank’s capabilities and capital and its establishment in the two great capital markets of the North Atlantic world – London and New York – also led the Bank to later represent the Dominion of Canada’s financial affairs in those capital markets. The Bank acted as financial agent of the Dominion in London well into the 1930s, until the newly established Bank of Canada took over those responsibilities. It was financial agent not only to the Government of Canada but also to myriad provinces, cities, and towns across the vast transcontinental expanse that required financing and representation for their needs in the capital markets of the North Atlantic world. At home, as the senior bank, it acted as the ‘coordinator-in-chief ’ of the Canadian banking system as that system grew and matured across the country. In many ways, then, the Bank of Montreal was ‘Canada’s Banker’ for a vital period in the country’s development, providing capital, resources, expertise, financial talent, and personnel for the great Canadian project. Times change; new players like the Bank of Canada emerge; new challenges and opportunities present themselves. At every stage of Canada’s development, past and present, the Bank has answered the call to serve the country, its communities, enterprises, and individuals with probity and distinction.

15 M ARCH 1870

The Bank at the Centre of Empire – London

T

he establishment of a permanent office in the City of London was a signal achievement for the Bank of Montreal. It was also an important moment in the history of Canadian colonial capital. Of course, the Bank was not only familiar with its principal capital market for decades but also had established a web of close relationships within government and financial circles in the City. Such networks were essential for the Bank’s business and for the financing of Canadian development. Later, the Government of Canada would depend on the Bank’s operations to represent its capital requirements and financial interests in the imperial capital. The day in question, 15 March 1870, was the day that the Bank board granted authority to open an office in London. Premises were leased at 27 Lombard Street, mere yards from the Bank of England, the Royal Exchange, and the Mansion House. The branch later moved to Abchurch Lane, and thence to Threadneedle Street in 1907. The Bank’s operations there were supervised by an “influential local board,” with the “object of developing and extending the British and Foreign trade of the Dominion through the agency of the Bank of Montreal,” commented E.H. King, president of the Bank, at the annual meeting in June 1870. Robert Gillespie Esq., Sir John Lubbock, Bart., Sir John Rose, kcmg, and Brice Hugh Pearse, Esq. were appointed to form a committee to represent and superintend the business of the Bank in London for a remuneration of 300 sterling each per annum. Mr Fred Gundry, formerly second agent in New York was secretary of the committee. The formal establishment of a permanent London presence of the Bank of Montreal was not only a Bank achievement but also a significant achievement for the young Canadian nation as it sought to promote trade, finance its requirements, and embark upon a period of nation-building infrastructure projects. The London office put the Bank of Montreal in the 1870s exactly where it wanted to be: in the centre of the action, acting as an emerging player in the finance of the North Atlantic world.

ten Days of D ecision

57

23 M ARCH 1863

“The Monetary King of Canada” Takes the Reins of the Bank

T

he appointment of Edwin Henry King to the general manager’s position of the Bank of Montreal was perhaps the most significant appointment to leadership in the history of the institution. King’s biographical details are recounted in Determining Destinies, page 15: born in 1828, arrived in Canada in 1850, employed in banking for seven years before arriving at the Bank of Montreal. He quickly ascended the ranks, succeeding David Davidson as general manager on 23 March 1863. He became president on 5 November 1869 and retired in 1873. It is hard to overestimate King’s influence both on the Bank of Montreal and on the Canadian banking system in the key decade of the 1860s. He inherited the leadership of the Bank at a time when its performance and its destiny were anything but clear. He put the Bank’s operations on a much more solid footing, gave it a thrust and a strategic vision that fully exploited the

58

Th e BM O Un iv er se

Bank’s capacities in the financial markets of colonial Canada. He extended and developed the Bank’s links with the New York and London capital markets. Under his leadership, the Bank was able not only to navigate some of the most dangerous challenges it had yet faced, including the US Civil War (1861–65), but also to consolidate its leadership in Canadian banking and exert every possible influence on the formation of the Canadian banking system in the advent of Confederation. While King’s plan for a new architecture of Canadian banking did not see the light of day, his influence on the destiny of the Bank and the Canadian banking system in the dangerous decade of the 1860s is undeniable. As a leader in Canadian banking, King was destined to last but a few short, intense years. His nicknames “The Monetary King of Canada” and “the Napoleon of Canadian Finance” offer clear hints as to how he approached the Canadian banking fraternity of the 1860s. He was aggressive, high-handed, harsh, and arrogant. These qualities also ensured that his career, however brilliant, would be short. But King’s influence, his vision, his performance, and his achievements re-established the supremacy of the Bank of Montreal as a financial institution in the lead-up to, and advent of, the creation of Canada.

11 M ARCH 1935

The Bank of Canada Opens for Business

T

he emergence of the Bank of Canada as the country’s central bank was a key moment in twentieth-century banking history. Canada was one of the last major North Atlantic countries to establish a central bank, since the need for one was hotly contested up until the mid-1930s. In other words: the banking system worked, so what was there to fix? As Canada’s first bank and senior bank, the Bank of Montreal had acted as government banker for decades while the Canadian Bankers Association acted as a coordinating body for the banks alongside the Canadian Department of Finance. Therefore, Bank of Montreal bankers were key protagonists in the debate leading up to the establishment of Canada’s central bank, ensuring that existing institutions and systems that had served Canada well continued to do so. The Depression changed everything: pressure from both domestic and international banking circles, not a little political intrigue, outright imperialist meddling from the Bank of England, and a Royal Commission on Banking and Currency (1933) all led to the establishment of the central bank. The Bank of Canada began life as a shareholder-controlled private institution in 1935, but then in a second phase of developments, new legislation in 1936 put the Bank exclusively in the control of the Canadian government, with the Department of Finance as the sole shareholder. Bank of Montreal President Sir Charles Gordon remarked in the 1934 annual meeting, “Your bank, in common with other banks, has pledged cooperation with the Central Bank, and I think it not unreasonable to expect equal cooperation from that institution.” The appearance of the Bank of Canada represented the definitive end of an era for Canadian banking.

The notes of the Bank of Montreal and others were to be retired ten years hence, and gold holdings were similarly to be transferred to the custody of the Bank of Canada. The net effect was to lessen the earning power of the banks through circulation and the operation of interest-limitation features. The era of Bank of Montreal presidents and general managers appearing on the currency was drawing to a close. As the first deputy governor of the new bank, J.A.C. Osborne, remarked in the late 1930s, “it would only have been human … if the commercial banks did not

exactly welcome the advent of the Bank of Canada.” The Bank of Montreal had served the country as the ‘coordinator in chief ’ of the banking system – successfully – until then. Bankers in the Bank of Montreal, and in the other chartered banks, quickly adapted and, indeed, later welcomed the central bank, and worked closely during wartime and postwar reconstruction to continue to lay the proper foundations of the Canadian banking system as it grew and evolved – a typically Canadian hybrid of public policy, regulation, and private initiative.

ten Days of D ecision

59

13 NOVE M BER 1969

Mechanization in Telecom Nation

B

anking and information control-processing systems have been at the forefront of banking – from the early adoption of methods of information control into the mid-twentieth century to the emergence and diffusion of new technologies in the 1960s and subsequent decades. The relationship of contemporary banking to technological systems are so close, they are virtually indistinguishable. Technologically mediated systems have utterly transformed banking in the last generation, and are set to do so once again in the early twentyfirst century. It all seems so inevitable, does it not? Yet, in each generation, in each era, there are people with choices to make about when to change, what to transform, and how much capital to commit. Timing is an issue and failure is a possibility, especially when you are dealing with a young technology. So it was that in November 1969, the Bank of Montreal made public a massive five-year program to create a continent-wide first in a “computer-based, fingertip banking system.” The system was hailed as the “most revolutionary development in the history of Canadian banking and a world first in terms of its scope.” The object of the initiative was to covert “just about everything we do” to computer operation. The “on-line banking” – a new phrase in the parlance of the day – would be set to free branch personnel to concentrate on customer service and give the bank a capability to offer a whole new range of banking services. The plan had been in the works for at least a couple of years prior to the landmark announcement, and

60

Th e BM O Un iv er se

involved not only the Bank itself but also ibm Canada, Ltd and agt Data Systems Ltd, the country’s largest computer consulting firm, in which the Bank had owned a substantial interest. The new system would connect 1,100 branches via communications terminals linked to a large central computer – the ibm System/360 Model 65 to be located in Toronto. “mech ” as it was known would give the Bank of Montreal the largest banking terminal network in the world. The technological leap forward envisaged by the promoters of mech also looked forward to the day when it would be possible to have a “single bank concept.” As one document from the era suggested, “it will not matter whether a customer uses his home branch or one a thousand miles away. Any teller in the system would be able to cash his cheque.” As R.A. MacDougall, the leader of the project, suggested, “such a system could offer fantastic possibilities for all levels of Management throughout the Bank: by and large, this tremendous fund of information could be regarded as available simultaneously and instantaneously to all of our people.” The possibilities were, quite literally, revolutionary. The complexity and sheer magnitude of the project also stretched the capabilities of the Bank. The success of the project as it rolled out in subsequent years also ushered in a young, new cadre of Bank leaders and executives who were destined to lead the Bank to the threshold of the twenty-first century. Most of all, however, this epoch-making project allowed the Bank of Montreal to effect a technological leap forward in tackling the emerging challenges of contemporary banking. Simplicity in banking in the late twentieth century meant increased dependence on an ever-more complexity of systems to serve the customer.

4 SEPTEM BER 1984

bmo Acquires

Harris Bank, Chicago

“T

he corporate historian delving in to the archives of the Bank of Montreal a few decades from now,” suggested a particularly prescient article in the Toronto Globe and Mail in April 1984, “probably will find that 1984 was a watershed in the institution’s evolution.” The first change was the completion of the Domestic Development Program, which dramatically reorganized personal, retail, and commercial banking in the 1980s. The second epochal change came with the move to acquire Harris Bankcorp, Inc. of Chicago.

On a late summer day in 1984, the day after Labour Day, the Bank of Montreal officially acquired Harris Bankcorp, one of the great Chicago banks – established in 1907 as a bank, but with roots extending as far back as 1882. The Chicago bank became a wholly owned subsidiary of the Bank. Harris ceo Ken West (right, in photo) was a vital partner in the success of the acquisition. With the stroke of the pen of bmo chairman and chief executive officer William D. Mulholland (left, in photo), what emerged was his generation’s greatest strategic achievement. “This transaction gives Bank of Montreal a full operating capability both in Canada and the United States, a status which is probably unequalled by any other bank,” Mulholland remarked at the time. Upon his return, when Canada Customs asked him whether he had acquired anything on his trip to United States, Mulholland replied that he had indeed – a bank!

It was agreed that the Harris organization would continue to operate under its own distinguished name and solid reputations: it had assets of us $7.8 billion and was the thirty-fourth largest bank in the United States. The subsidiary Harris Trust and Savings Bank managed trust assets of us $13.9 billion, ranking seventh in the United States. The September signing had come in the wake of the approval of both boards of directors in October 1983, the approval of the shareholders in January 1984, and the approval of the United States Federal Reserve on 25 July 1984. The price tag for the Harris was us$546.7 million (though news reports suggest us$672.3 million) for 6.66 million shares. The landmark decision was destined to put the Bank on a specific historical path – into becoming a more fully North American bank. The move was also historically fitting: the Bank of Montreal was the first Canadian bank to establish operations in Chicago, opening an agency in 1861. A founding member of the Chicago Clearing House Association in 1865, the Bank was closely associated with the development of the fur and grain trades across the Great Lakes. The banking markets of the Midwestern United States would increase the scope and reach of the Bank’s operations dramatically. As Bill Mulholland told US Banker in June of that year, “Let me suggest to you a great pipe running from north to south through which flows $106 billion in trade a year, total volume and an undetermined amount of transactional items. We have a large apparatus at one end of the pipe … The economic activity between the two countries is so enormous that it is obvious logic to get yourself on both ends of the pipe.” One of the more remarkable elements of the first chapters of the bmo -Harris story was the fact that for a number of years, the Harris continued to have its own board and was managed as a self-sufficient organization. “We do not contemplate any significant changes in the Harris management structure or personnel,” Mulholland reassured at the signing. By the 1990s and 2000s, the process of becoming one bank had begun, and the emergence of a single strategy had emerged.

ten Days of D ecision

61

T 13 AUGUST 1987

The Acquisition of Nesbitt Thomson

62

Th e BM O Un iv er se

he purchase of one of Canada’s most respected investment firms in 1987 was made possible by Canadian government regulatory reforms of the same year that allowed banks to purchase investment houses. This was Canada’s response to “The Big Bang” of global financial deregulation coursing through markets and institutions in the 1980s. The purchase allowed the Bank to deliver a broad range of investment services for the first time across the massive transcontinental branch network. The deal was announced on 13 August 1987 and was to cost $290.9 million for a 75 per cent equity interest in this largest and best-performing investment firm.

Nesbitt Thomson was the product of a partnership between Arthur James Nesbitt and Peter Alfred Thomson, who launched the investment firm in Canada in 1912. The affinity with the Bank of Montreal was more than passing: each had its head offices on St James Street in Montreal. Each institution was a part of that Montreal financial capitalist class that invested in the nation-building projects of the nineteenth and twentieth centuries. The financing of hydroelectric development in particular was a dual strength and commonality. In the 1970s and 1980s, Nesbitt Thomson grew ever closer to bmo management by becoming a principal investment firm in the Bank’s affairs. As W.D. Mulholland remarked at a ceremony announcing the acquisition, “I think all of us were quite impressed with their professionalism and the quality of the advice as well as their performance. I think that was certainly a favour in our judgement that they were the firm we wanted to be associated with, if the world was going to change, so that we would be all in the same business.” The bmo –Nesbitt Thomson deal was an historic one in that it was the first of its kind between a Canadian chartered bank and a Canadian investment firm. Other mergers and acquisitions followed in the industry, but this was the first. The Bank’s large size, capital base, retail distribution network, computer systems, and global operations were nicely aligned with the brokerage’s experience and entrepreneurial skills in the securities industry. The Bank envisioned new markets, especially the personal market where investment and savings products needed a reimagining. The investment people – led by the powerful figures of Brian Steck and Brian Aune – also brought a new culture and a new way of doing things into the Bank that persists to the present day. New people, new capabilities, new markets equalled an important new day for the Bank of Montreal in August 1987. The integration of this Canadian investment institution into the Bank’s growing capabilities, strategic interests, and performance proved to be one of the key days that changed the Bank.

20 NOVEM BER 1996

Commercial Branch Licence Granted in Beijing

F

or at least a century or more, Asia has held a special place in the imagination of Canadian bankers. For Bank of Montreal bankers down the generations, the same could also be said. Beginning in 1962, the Bank had opened operations throughout the region, specifically in Japan, South Korea, Singapore, Taiwan, and Hong Kong. The great desire, and the great market, was China. The Bank’s connections with the Celestial Empire in the nineteenth century grew in tandem with the first great wave of globalization in the 1860s. An incipient global network of banking arrangements and institutions began to draw in distant parts of the globe. By the 1860s, Bank of Montreal drafts were to be honoured in India and China. The development of Vancouver as Canada’s Pacific port, with its connections to the trading empires of the Asia Pacific, provided more and more connections as the times and circumstance allowed. Relations between the contemporary Bank and the People’s Republic of China extended back to December 1960 through the financing of loans for wheat sales – a commodity that accounted for almost all of the ChinaCanada trade in the 1960s. The Bank of Montreal established a full correspondent banking relationship with the head office of the Bank of China in 1963, seven years before diplomatic relations were formally established between the two countries. The pedigree extends back yet further: an emissary of the Bank travelling in 1929 in the “Far East,” as it was then known in Western circles, first recommended that the Bank of Montreal establish itself in Shanghai. The onset of the Great Crash and Great Depression put a temporary end to those fleeting dreams.

Top Bank officials visited China in 1971 and 1975. There followed the establishment of a direct correspondent banking network with the Bank of China in most Chinese cities. In 1983, the Bank opened a representative office in Beijing – a clear runner-up to the day chosen here in terms of its significance to the contemporary and historical presence of the Bank of Montreal in China. A decade later, the Bank opened another office in Guangzhou. The Bank’s China relationships and collaboration in utilities, mining, and other sectors deepened its connection to this rising economic superpower. In 2008, bmo gained yet another licence to operate: this time in Shanghai. On 20 November 1996, the Bank announced that it received approval to open a full-service commercial branch – the first Canadian bank to be granted a full-service licence in Beijing, the first to have two branches in mainland China, and the third North American bank that was granted permission to open a branch in the capital city of China. The announcement was an important step in this long, growing, and mutually beneficial relationship. It was not the only one, before or since. In the two decades since the opening of the Beijing branch, bmo has dramatically expanded its presence in China in multi-faceted ways: through funds management, the selling of derivative instruments, foreign exchange trading through China Foreign Exchange Trade System, and the ability to offer a full range of banking services in local currency. It was the first Canadian bank to establish an investment bank representative office in China. In many cases and initiatives, bmo was either the first Canadian bank to be offered licences into new markets or the sole Canadian financial institution in those markets. In 2010, bmo ChinaCo. was established and approved to transact business in China – a major development. This gave bmo the legal capacity to operate in all the same spaces as local banks. In 2014–15, bmo also played an important role in the establishment of the renminbi (rmb ) hub in Canada.

This development would have major positive and longterm implications for trade. The success of the Bank of Montreal in China has been the work of at least three generations of leaders on both sides of the equation. Since 1960, the senior leadership of the Bank have recognized the key importance of the need for the Bank to work with China. They have made it into a multi-generational long-term commitment. For Chinese bankers, that commitment – and the deep expertise and capabilities of the Bank – have allowed the Chinese banking system to acquire capabilities and expertise while extending their global network of interests.

Matthew Barrett and former prime minister Pierre E. Trudeau at the bmo board meeting in Beijing.

ten Days of D ecision

63

3 NOVEM BER 2017

Crossing the Threshold of Centuries

T

here are obvious difficulties in writing for a day that is yet to come. On 3 November 2017, the Bank of Montreal will cross the threshold of two centuries – it is the reason for this book, the reason for the celebrations inside the Bank, and the motivation to launch a score of initiatives to mark this unique milestone in the life of an important Canadian financial institution. The day will be a day not only to look back but also to look forward to what the future holds. The

contemporary generation of bmo bankers is intensely engaged in navigating a key Canadian and global institution through what appear to be a series of fundamental technological and market transformations affecting both the wider world and specifically the financial system. Business leaders from every walk of life look to the future and see a fourth industrial revolution emerging, in the words of Klaus Schwab. That revolution promises shifts and disruptions, promise and peril. How do organizations adapt? Banking and the architecture of finance have already undergone a serious transformation in the last generation. This new wave of change brings with it a group of innovations that cross physical, digital, and biological worlds. If that future is “marked by the emergence of new business models [and] the disruption of incumbents and the reshaping of production, consumption, transportation

and delivery systems,” banking and finance are central to all these fundamental economic forces. The leaders and the people of the Bank will be looking back and looking ahead on that day. When their future selves look back on 3 November 2017, they will see what you see in this book – generations of bankers who have had to grapple with all kinds of transformations and step up to the mark that the world has created for them. In every great institution, every generation looks ahead and tries to answer the challenge of how to serve their people and their communities in light of new assumptions, new paradigms, and new tools. In this case, the Bank of Montreal has an established track record through 200 years – not a guarantee, not a roadmap, not an excuse to rest, but an inspiration.

Currenc y, C a sh, a nd Leg a l Tender

bmo ’s Richly Denominated Legacy

T

his chapter offers a fascinating look into the history of currency. The Bank of Montreal was the first Canadian bank to issue paper notes. Throughout the nineteenth century and until the end of chartered bank note currency in the early 1940s, the Bank was also the country’s most prominent issuer of notes. Featured here are, quite literally, some of the most consequential and valuable documents ever to have circulated in Canada. They would have also been the most popular, for obvious reasons! Of course, these documents had a specific job to do: currency is a medium of exchange and a store of value. That, however, is only the beginning. The rise of paper currency can tell us a lot about the history of the Bank and the financial system. The bills described here were part of the fabric of everyday life in Canada. Their images depicted personalities, landmarks, allegories, and events.

They were an artefact that was used everywhere, in the city and the countryside, by rich and poor. The bank’s notes represented a fiduciary trust and a promise to pay. The confidence on which it rested depended upon the reputational capital of the Bank and its leaders. In that way, the Bank’s performance and economic prosperity became interdependent. Think also of the Bank’s currency as a system of accountancy bound together by a huge information network that tied the Bank, its reputation, its performance, and, most importantly, its wealth to the community. The currencies you see showcased here encouraged trade and investment; they also calibrated value. Paper notes created an efficient, ordered, and understood way of exchanging. The notes were part of a larger framework of measurement, accuracy, and judgment. The

story of currency, therefore, is how trust draws together people and institutions across time and place. Currency is also an agent of change: the circulation of paper money heralded the arrival of a firmly capitalist society based on trade and exchange. What really attracts the casual observer to these currencies, however, is not what they did, but what they look like. The iconography – the visual images on the bank notes – tell historians a great deal about how previous generations saw themselves. The imagery, the personalities, the icons, the scenes – all telegraph stories about culture, identity, and aspiration. The notes themselves required not only reserves and reputation to be issued but also art, skill, and design to be produced. In addition, the images had to function as a security device in a land where one out of every two bills could be counterfeit. Technical

knowledge, security, complexity, and beauty: the imagery of the Bank’s notes had them all. Surveying this theme highlights examples not only from the Bank of Montreal’s currency but also from those banks folded into the Bank of Montreal over time.

66

Th e BM O Un iv er se

T

his extraordinary note was printed before the Bank began business on 3 November 1817. The first notes were printed in Hartford, Connecticut, where the Bank then obtained the plates, the special bank note paper, and the press required for reproducing the notes in Montreal. With this note issued in autumn of 1817, we are witness to the effective introduction of a Canadian currency and a Canadian system of banking. In this case, the $20 bill was a promise to pay the bearer, on demand, the face value of the note in gold and silver

coins. Here, the reputation of the bank as establishment and of the directors was absolutely paramount. The entire system being tested for the first time rested on a foundation of trust. This note is signed by John Gray, first president of the Bank, and R. Griffin, cashier of the Bank. The centrepiece features a scene of Montreal and its port. The circle in the lower centre features Britannia, trident in hand, the lion at her feet, and a ship on the distant sea over which she rules.

THE PROM ISE TO PAY

The $20 Bank of Montreal Note, October 1817

Cur r enc y, C a sh, a nd Leg a l Tend er

67

CURRENCY IN TURBULENT TIM ES

The $1 Bank of Montreal Note, 1835

68

Th e BM O Un iv er se

T

his note was issued on 1 January 1835 amidst slowly rising tensions in the ethnically riven, politically divided, and economically fragile colony of Lower Canada. Unusually – because of the English basis of the Bank and its directors – a French translation of the promise to pay appears here. Beyond the actual denomination, three images dominate the note. First, on the left, there is a pastoral scene entitled Lower Canada and picturing healthy cattle. At the centre, the

monarch William IV’s portrait lends royal authority to the note. Finally, on the right, a very intent St George, patron of England, slays the dragon, of which (metaphorically speaking) there were many in the colonies of British North America as reform turned into rebellion in 1837–38. The note is signed by Benjamin Holmes, cashier, and Peter McGill, president of the Bank.

T

he Bank of the People had a short but eventful life. Established in Toronto by proponents of the Reform Movement in 1835, it was purchased by the Bank of Montreal in 1840. The reason for the purchase: the Bank wanted to, but could not, expand into what is now southern Ontario because of charter restrictions. This multilingual Eight dollar/Huit Piastre bill also showed its value in pounds sterling, as imperial

currency still dominated much exchange. The amount is also expressed in German (Acht Dollar). The design is rather rudimentary, but some distinctive features emerge: the “8” embedded in an octagonal shape, as well as the Royal Crest prominently displayed in the centrepiece of the note.

TICKET TO UPPER C ANADA

The $8 Bank of the People Note, 1840

Cur r enc y, C a sh, a nd Leg a l Tend er

69

COLONIAL PROGRESS

The $3 Bank of Montreal Note, May 1844

T

his $3/15 shillings bill was issued in May 1844, a testament to the enduring nature of the dualcurrency system of British North America in the pre-Confederation period. You can begin to see the evolution of the notes, with inclusion of information about the Bank: its holdings, capitalization, and reserve, for example. The notes of the 1840s also begin to be more sophisticated, with

70

Th e BM O Un iv er se

idealized female allegorical figures gracing the numerals on the side. In the centre is a woman holding a laurel wreath representing prosperity and probity in business affairs. The images by the 1840s are becoming more intricate, and also more difficult to reproduce. The note is signed by Alexander Simpson, a popular and successful cashier of the Bank (equivalent of chief operating officer) from 1846 to 1855.

T

he Merchants Bank of Canada was established in 1864. This $10 note is from the bank’s first issue (1868–71). It was founded by the Allan family, whose most famous son was Sir Hugh Allan, the ship and railway builder. Years later (in 1922), it was acquired by the Bank of Montreal, whose interests were closely tied to the Merchants’ activities. The straightforward imagery nicely captures the Allan spirit. On the left appears the image of the captain

of a river vessel firmly in command of the destiny of the ship (Lachine Pilot). Pictured in the centre is the 355 St Jacques Street head office, built on the remains of a gunpowder depot and on part of the old wall surrounding the city of Montreal. It later became the headquarters for Nesbitt Thomson, providing another unexpected and later connection to the Bank. On the right is pictured Andrew Allan.

PILOT OF THE WAVES

The $10 Merchants Bank of Canada Note, 1871

Cur r enc y, C a sh, a nd Leg a l Tend er

71

A WESTERN HORIZONS

The $5 Bank of Montreal Note, 1895

72

Th e BM O Un iv er se

s the century drew to a close, currency notes became more sophisticated, more complex in their weave and design, and thus more secure. By this time, the Bank of Montreal had long established its leadership in Canadian banking, with a paid-up capital of $12 million. The figures in the forefront of this 1895 bill are Sir Edward Clouston, general manager, and Donald Smith, later Lord Strathcona. Pictured in the middle of the bill is the coat of arms of the Bank with two First Nations warriors supporting the shield. The beaver on the top of the coat of arms (in the parlance of heraldry, “ensigned upon a log proper”) recalls the past: the fur

trade and the industriousness and thrift of the previous generations. The reverse of the note depicts the Bank’s majestic new office in Toronto, Toronto Main Branch, located at the corner of Front and Yonge streets (1885). The expansion of Toronto, its remarkable economic growth and its rise to prominence, is nicely captured in the decision to feature the Bank’s Toronto branch on the Bank of Montreal $5 note. Today, the building is, famously, Canada’s Hockey Hall of Fame. The building itself is a Toronto rococo-inspired masterpiece envisioned by the Toronto architects Darling and Curry and executed in part by sculptors Holbrook and Mollington. The Bank’s projection of its power and influence in Toronto was unmistakeable: Ohio stone; Corinthian design, with the pilasters inside mythical figures decorating representing Commerce, Music, Architecture, Agriculture, Industry, Science, Literature and the Arts. This was no ordinary five-dollar note!

BANKING ASCENDANCY

The $50 Bank of Montreal Note, 1903

T

his marvelous outsized $50 bill is a beautiful example of the currency engraver’s craft, with Lord Strathcona (Donald Smith) and Sir George Drummond guaranteeing the value of this large-denomination note. The front is black with tints of blue, rose, and gold, while the reverse is black with brown tint. This particular bill was countersigned by James Aird, a career Bank of Montreal manager and, from 1896, the secretary of the Bank. All bills over $50 had to be countersigned by a competent authority. The reverse features images of both the Montreal and Toronto main branches of the Bank. The bill was designed and executed by Waterlow & Sons Limited, London Wall, London, one of the great engravers of currency, stamps, and monetary instruments in the world. Here again, the prestige of the Bank is on full display as its reach spans the principal Canadian centres of commerce. Its imagery also recalls the imperial connection through both Strathcona (who was living in London at that time as Canadian High Commissioner) and the bank note pedigree.

Cur r enc y, C a sh, a nd Leg a l Tend er

73

BARLEY AND BANKING

The $6 and $7 Molsons Bank Notes, 1871

T

he Molsons Bank came into the Bank of Montreal orbit in 1925. The Molson family, however, had a long and illustrious connection to the Bank. When the family decided to strike out into the banking field on their own in 1853, it prospered, focusing mainly on the agricultural community and especially on grain. The Molson brewery, of course, had a more than passing interest in the grain harvest as a key ingredient of its success. The $6 and $7 bank notes are strange artefacts in Canadian banking history. Only one other bank ever

74

Th e BM O Un iv er se

issued $6 bills (La Banque Nationale). Molsons had the distinction of being the only one to issue the $7 bank note; the first were issued in 1871. The question is why those specific denominations? Bearing in mind that, after Confederation, banks were only allowed to issue notes above $4 in value, one explanation offered in the literature is that these allowed the Molsons Bank to increase the circulation of its notes. The more circulation: the more “interest-free deposits” a bank could enjoy. Molsons Bank did not have the size or capacity to use other methods to boost circulation

The notes feature Thomas Molson, cashier, on the left and William Molson, president, on the right. The $6 bill features two beavers building a dam, while the $7 note renders the same idea of the nobility of labour, only with farmers. The reverse features latheworks, counters, and the bank name.

T

he story of banking in the Dominion of Newfoundland in the late nineteenth century and early twentieth is a troubled one. The precarious nature of the staples-led export economy made for a boom-and-bust cycle on the island. As historian of Newfoundland Peter F. Neary memorably put it, “Individually, many Newfoundlanders were skilled and seasoned survivors, but as a people they depended on a precarious export trade, with a narrow range of goods produced in the country’s basic and interconnected industries of fishing, forestry, and mining.” Little cash

changed hands, individual and government debt was high, and the Newfoundland and Labrador economy depended heavily on international markets. The Bank of Montreal became the Newfoundland government`s banker in 1898, four years after a banking collapse. For the first time, Canadian notes could be used in the country. The note featured here is a government-issue 80-cent note, but pay attention to where it is paid: at the Bank of Montreal in St John’s. The Bank`s close involvement with Newfoundland continued and intensified in the decades following.

HARD SCR ABBLE

Dominion of Newfoundland Cash Note, 1902

Cur r enc y, C a sh, a nd Leg a l Tend er

75

ONE L AST NOTE

The $5 Bank of Montreal Note, 1942

O

n 7 December 1942, the last Bank of Montreal note went into circulation, with General Manager B.C. Gardner and President George W. Spinney at their posts on either side of the money. They seem to summon all the gravitas they could command for the moment.

76

Th e BM O Un iv er se

The establishment of the Bank of Canada in 1935 as the country’s central bank had set in motion a series of major changes to the Canadian banking system. A new central reserve bank came with the exclusive right to issue currency against the credit of the Dominion of Canada. The banks did not relent without a fight. But once the decision was made, the Bank of Montreal and its fellow chartered banks made the new system work to face the challenges of wartime emergency and postwar reconstruction. The chartered banks were given ten years to retire their circulation to 25 per cent of their paid-up capital.

New Bank of Canada notes would slowly but surely replace the various bank notes and the old Dominion notes. Further changes to banking legislation ensured that what the professionals call ‘an irredeemable government paper currency’ was complete. Canadians would become accustomed to the image of Queen Elizabeth II ($1 and $20 notes), Sir Wilfrid Laurier ($5), Sir John A. Macdonald ($10), William Lyon Mackenzie King ($50), and, if they were lucky, Sir Robert L. Borden ($100).

Fin a nci a l Innovations a nd Fir sts

T

here are key moments, key innovations in the history of Canadian banking where an innovation has led to a game change. This chapter examines eight such innovations that have changed the face of Canadian banking. Financial innovation can embrace a number of fields. It can focus on banking practices or on credit and lending. It can also embrace concepts such as the arrival of ‘scientific management’ and systematic analysis of financial data in the 1920s, risk analysis and management, and so forth. In

fact, the Bank of Montreal, like most of the major banks of the world, was continuously innovating in one form or another throughout its lifetime in these areas. Here, we take a slightly different approach by examining the much broader trends and innovations that have influenced the business of banking at the Bank of Montreal. The areas of governance, currency, consumer credit, and large technological innovations are featured. Naturally, these eight entries just scratch the surface, but they do

shine a light on the diversity of the sources of innovation in banking and financial institutions. We normally think of innovation as principally technological, yet some of the changes come in structures, or ideas, or new ways of thinking. These innovations have been chosen because of their effects on the way Bank of Montreal bankers and their colleagues in other institutions went about the business of banking, how they adapted to change, and how they evolved to serve nations, markets, and customers.

INNOVATION IN LEGISL ATION

The Bank Act, 1871

T

he Bank Act of 1871 was the first comprehensive legislation passed by the new Dominion of Canada. It set out the organization of the Canadian banking system. The struggle over that legislation – over the questions of currency, gold reserves, and note issue – resulted in a protracted, acrimonious, and at times vicious struggle for advantage in parliamentary

committees between rival banking interests. Original proposals for Canadian banking had, among other things, suggested the establishment of a system of twotiered banks: local banks that would not be allowed to have branches and that would service the immediate community; and the big banks (such as the Bank of Montreal) that would take care of foreign trade and mercantile interests. The struggle over the elasticity and adequacy of the money supply was a particularly sensitive issue in Ontario, and especially among farmers who needed cyclical access to cash around harvest time. When the dust settled, the rules of the game for Canadian banking were set, to be revised every decade according to emerging financial and monetary conditions. The legislation covered the ability for the chartered banks to have a widespread system of branches, to double liability of shareholders, and to issue notes. The need to keep a certain amount in reserves, the lack of a central reserve bank, a prohibition against owning real estate as an investment, the monopoly of government currency for values under $4, and a whole host of other rules and regulations would fence-and-post Canadian banking, giving it its unique character and configuration in banking in the North Atlantic World. The leaders of the Bank of Montreal in the 1860s, like those in every other banking interest in the country, fought hard to shape the system to their bank’s advantage and vision. The Bank Act of 1871, however, was a compromise that set the stage for the successful development of Canadian banking and currency, and gave the public an instrument – Parliament – through which to express the public interest in banking. In many ways, it allowed Canadian banking to adapt itself to the widespread enterprises that banks were organized to serve. Adaptation of banking practice “to the special requirements of Canada” was the Bank Act’s greatest service.

Fin a nci a l Innovations a nd Fir sts

79

INNOVATION IN CURRENCY

The Evolution of the Dollar, 1817–1934

T

he Canadian currency passed through a steady evolution since the establishment of the Bank of Montreal in 1817. The Bank itself, of course, had its own currency, as did other banks, alongside the British

pound sterling and a bewildering array of monetary instruments across North America. Governments also had the right to issue currency in certain lower-value denominations. The question of currency in Canada occupied bankers and legislators consistently from the 1820s to the 1860s. Colonial Canadians periodically debated the most effective way to handle concerns about banking and currency. Questions of money supply and the expansion and contraction of credit, circulation of note issues, and, in general, the control of credit were uppermost in the minds of the currency debaters. For Bank of Montreal bankers, the services that they rendered to the community were dependent on the

stability of the institution, and so a careful approach to monetary and currency policy was typically taken. In 1857, Canada passed legislation requiring that accounts to the provincial government be rendered in dollars and cents – much to the disappointment of imperial authorities, who believed that the Canadians ought to have adopted the pound sterling. With Canada’s first Bank Act in 1871, the new Dominion of Canada moved to a more systematic approach to currency questions, leaving the Canadian chartered banks to issue note circulation above $4, while the Dominion of Canada would circulate the more popular smaller denominations.

INNOVATION IN SYSTE M ARCHITECTURE

The Creation of Canada’s Central Bank, 1935

T

he establishment of the Bank of Canada as the country’s central bank in 1935 was the most important development in Canadian banking in the twentieth century. The establishment of the Bank of Canada came decades, and in some cases centuries, after every major nation in the North Atlantic world had established theirs. However, the absence of a central bank did not prevent Canada from establishing a strong, stable, and successful banking system of chartered banks, maintaining price stability, and avoiding systemic failures. Canada’s senior bank, the Bank of Montreal, acted as government banker and the Canadian Treasury acted as lender of last resort, while the Canadian Bankers

Association (cba ) acted as a coordinating body for the banks alongside the Canadian Department of Finance. The Depression changed everything. Between 1932 and 1936, the idea of establishing a central bank gathered momentum both domestically in political circles and internationally through such gatherings as the International Financial Conference (Brussels, 1932) and the World Monetary and Economic Conference (London, 1933). Canada’s effective decision to move off the gold standard in 1928 was another mitigating factor. In 1933, the Royal Commission on Banking and Currency formally recommended the establishment of a central bank. From there, the Government of Canada drafted legislation, and a central bank was established in 1935 as a shareholder-controlled privately owned institution. In 1936, a second phase of legislation put the Bank of Canada exclusively in the control of the

Canadian government, with the Finance Department as the sole shareholder. Those tumultuous events ended a major era for Canadian banks, and especially the Bank of Montreal, since it was such a prominent part of Canadian government banking. It also began a new era for the chartered banks. The right of chartered banks to issue or reissue their own notes expired on 1 January 1945, leaving the Bank of Canada with sole authority to issue notes. These developments were, in the long run, extremely positive both for the financial system of the country and for the banks themselves, who could then turn to new pursuits and markets. The Bank of Montreal and its counterparts had built a strong Canadian banking system that would be able to make room for public participation through the instrument of the Bank of Canada.

Fin a nci a l Innovations a nd Fir sts

81

INNOVATION IN CREDIT

MasterCard

I

n the late 1960s and early 1970s, Canada was one of the key world markets for the “Interbank Card System” or the charge card system. The only major international bank card system in Canada by the early 1970s was Bankamericard, which was known as “Chargex” to Canadians. It was established in August 1968 and

had 3.2 million cardholders and 50,000 participating merchants in the country. The Bank of Montreal joined the Interbank Card under the name of Master Charge. Together with the Provincial Bank (later National Bank), it entered the credit card market, frankly, belatedly, since the 240,000 Bank of Montreal customers in 1970 who held Chargex cards were clearly telling the Bank their intentions to move into this channel of consumer credit. Once the decision was taken to proceed, the Bank mobilized its considerable technological resources to pilot, test, and introduce Master Charge to Bank of Montreal customers.

In March 1973, Chairman Fred McNeil announced that the Bank of Montreal and the Provincial Bank had chosen Master Charge as their preferred credit card. The Bank opted for Master Charge not least because it was the world’s best-known and accepted all-purpose bank charge card at the time. The revolution in credit was joined in earnest. In 1977, Canadians held 8.2 million credit cards that were used at 27,150 different merchant terminals across the country. They spent $3.1 billion on credit annually. By 2014, Canadians possessed 72 million cards used at 1.4 million merchant terminals for a total of $369 billion spent annually on credit.

INNOVATION IN MOBILIT Y

Instabank/Multi-Branch Banking, 1979

P

resident W.D. Mulholland, addressing the Bank’s annual meeting in 1979, called Multi-Branch Banking “one of the most exciting developments” of the year. “For the first time, any customer of the Bank of Montreal will be able to go into any on-line branch in Canada, make deposits and withdrawals and obtain the balance in his account just as if he were in his own branch.” He added later, “Need I add that this service is not available at other chartered banks.” The introduction of Multi-Branch Banking (mbb ) in 1979 was a major advancement in customer service and convenience. The system used the network that linked on-line branches. It made it possible for customers to conduct personal banking transactions at any of the mechanized branches as if they were dealing with their home branch. Here again, the Bank of Montreal was first to the frontier, leveraging its technological investments to usher in new possibilities for the customer. mbb was also a precursor to the vast expansion in access and convenience to come in the 1980s. Personal account customers at mbb branches have access to their accounts at any other mbb branch. The concept is routine today, but the ability of customers to perform deposits, withdrawals, fund transfers, and passbook updates and procure account information outside of their home branch represented a significant advancement in customer convenience.

Fin a nci a l Innovations a nd Fir sts

83

NET WORK INNOVATION

National Computer Network, 1980

B

y the mid-1970s, some basic decisions had to be taken about the future of the increasingly complex technological data processing systems in the Bank. At the same time, the Bank was taking its first major steps toward the basic realignment of its banking functions. The objectives were clear: the adoption of a structure that would mirror the market and create an organizational environment conducive to the professional development of banking officers. Accordingly, the Corporate Banking Group was established, complete with specialized financing capabilities, especially in world-scale project loans and large internationally syndicated loans. The Domestic Banking Group also reordered its resources. Treasury-related activities were also put on a new foundation. The most urgent question in the technological realm was: convergence or divergence – in other words, whether to move toward integrated worldwide systems or distributed systems. The Bank chose the former path. Years of intensive research and development had given the Bank a unique data processing plant “of a sophistication and size unsurpassed in the North American financial service industry,” remarked W.D. Mulholland in 1981. The centralized database located at the Scarborough and Willowdale computer centres in Toronto were equipped with the fastest commercial computers available at that time. They stored 6 million accounts and had a storage capacity of 280 billion characters. The Bank of Montreal databases were linked by 150,000 miles of telecom lines connecting eight regional data centres and 5,000 branch terminals, automated teller machines, and customer terminals.

84

Th e BM O Un iv er se

In 1981, for example, the data centres were processing over 3 million transactions annually – and, crucially, the entire Bank network was ‘on line’ and operated in real time. Any kind of transaction could be processed instantaneously anywhere a terminal was located. Acquiring this capability was a major milestone in the technological history of the Bank for a few reasons. It empowered the Bank to take full advantage of available technological transformation. It positioned, and kept, the Bank well ahead of the demands upon it from the expanding array of computerized, connected financial services. In other words, the basic system put in place in the early 1980s prepared the Bank for what was coming next. In Mulholland’s prophetic words of 1981, the technological systems of the Bank provided it “with the means to provide service in real time not only beyond the confines of conventional ‘bricks and mortar’ branches, but also beyond the constraints of time, of geography and of currency.” The Bank’s leaders were among the first to see the implications of the borderless nature of the movement of technology, information, and capital.

INNOVATION IN C APITAL AND CONVENIENCE, 1985

I

n the mid-1980s, advances in information technology were enabling exponential growth in the network. In the process, a whole new world of customer convenience and access was unleashed. Instabank was the Bank’s own network. circuit was a Canadian network set up by the Bank and had the distinction of being the first nationwide shared network in the country. The Bank of Montreal was the first Canadian bank to link its abm s to it, and become part-owner of the largest US abm network, cirrus . That network linked automated banking machines in North America, and increasingly around the world – in the mid-1980s, over 11,000 machines. In 1985, the Bank of Montreal became a founding member of Interac, Canada’s shared network linking banking machines across institutions and platforms. The new network suddenly had 3,000 abm s coast-to-coast to allow customers convenient access to their funds. For the first time, customers would be able to access their cash from bank machines around the globe. The electronic payments system that underpinned this emerging network architecture in Canada was the subject of lengthy discussions and negotiations to ensure the orderly development of the system in the country. These networks eventually expanded to include electronic funds transfer at the point of sale – a concept piloted by the Bank in Calgary in October 1989 that allowed Bank of Montreal customers with a “FirstBank” card to purchase goods and services at Calgary-area retail outlets. The instantaneous access to funds and the revolution in convenience offered by cashless transactions depended on the vast, complex networked technological systems that were built in the 1980s. Technological systems, however, are only one part of the equation. Every step of the way, executives had to make choices about how to deploy the technology, its best uses, and how it could allow the Bank to serve the customer.

DAWN OF THE NET

Online Everything, 1995

T

he invention of the World Wide Web by Sir Tim Berners-Lee in the early 1990s and the subsequent development of technologies based on Internet protocol platforms constituted a deep, lasting, and long-wave revolution in information and communication technologies. The advent of the Internet, of course, rested on the technological systems of a generation. In the two decades since its introduction, it has led to a fundamental transformation in how we handle information, buy and sell goods, and interact as individuals, communities, and institutions. The Bank of Montreal was quick to seize the opportunities offered by the dawn of the Net. The year 1995 was the inflection point. The Bank’s first website was launched in January 1995, offering basic information on the Bank and its rates. By 1996, President and coo Tony Comper was talking about 1996 being the “Digital Autumn” – “a time in our history when we are taking one of those critical quantum leaps.” Comper talked about setting the course for the digital future – which included branchless banking, banking by personal computer, and online banking. Here again, the Bank was first to the frontier with the introduction of a virtual banking service, and looking forward to “entering the age of digital banking – of utterly customer-driven, anywhere-anyhow-anytime banking.” The key pillars would include the overall customer experience, satisfaction, ease of use, and privacy and security. The Bank’s most spectacular technological move of the 1990s was to offer full-service banking on the Internet – mbanx – in October 1996. “mbanx is neither a new product nor a new add-on deliver channel,” the Bank announced on 16 October, “but an entirely new virtual banking enterprise designed to meet the needs and realities of time-pressed, financially

86

Th e BM O Un iv er se

active consumers.” It was a bold move, and a visionary one – an Internet-only bank to be headed by Jeffrey S. Chisholm, a bmo senior executive. The concept was a first for North America, let alone Canada. In one stroke it eliminated considerations of geography, time, and territory in banking. The concept was probably before its time, and so suffered the fate of such enterprises. However, mbanx showed that the Bank of Montreal understood the potential of the Internet, and sought to transform the technology to serve the customer. It also showed that the Bank was not afraid to take a risk in pushing the boundaries of the possible in banking. As Canadians and the millions of bmo customers gained access to the Internet, the Bank broadened its offerings, including expansion of online access to applications, accounts, and the whole range of banking

activities. The story ever since has been to continuously upgrade technologies across all banking platforms to offer superior levels of customer experience with access to transactions, financial planning, and expertise. Today, technological transformation in financial services has reached another inflection point as the Bank continues its tradition of building a technological architecture that is competitive and constantly strives to reimagine the customer experience. The dramatic extension of bmo ’s technology capabilities opens up new possibilities for greater speed, lower cost, enhanced risk management, and greater productivity – just as past transformations have done. In other words, by seizing the technological possibilities of a digital future, the contemporary Bank is continuing its legacy of adaptation and leadership.

Speed, Dista nce, Access

bmo ’s First-to-Market Technologies

T

his chapter examines bank technologies from a different perspective. Instead of a look at the range of technologies involved in banking over 200 years, I have selected a few of the technologies that the Bank of Montreal implemented first. For the Bank, being ‘first’ to do something, try something, offer something, or implement something has acquired a special importance down the years. So, too, with technology. Perhaps it is due to the Bank’s permanent status as the first Canadian bank. There is a certain pride for Bank of Montreal bankers to be first. Just in the period since the Second World War, the Bank has been first in a number of innovations in customer service and technology: first drive-in bank (1950), first after-hours depository (1954), first Bancardchek (1967), first to offer equipment leasing applications in its branches (1973), multi-branch banking

(1979), first to offer farm creditor insurance (1980), first to offer telephone banking (1982), first to offer automatic overdraft protection (1983), first premium credit card (Gold MasterCard, 1984), first transborder electronic funds transfer (1985), Electronic Data Interchange (1991), first bank to establish a web presence (1995), first full-service Internet banking with mbanx (1996), first to offer online mortgage adjudication (1997), first in North American wireless banking (1999), first to offer full-service online brokerage (2000), first to offer online fixed-income trading (2001), first Canadian bank to provide banking services in renminbi in Beijing (2006), first bank to offer a registered disability savings plan (2008), first bank to offer a World Elite MasterCard (2010). Twenty-first-century banking is a highly technologized business. Automated teller machines, Internet, and mobile banking are only the

beginning. The office environment is also highly technologized and interconnected. The ability to process and coordinate millions of financial transactions per second across vast territories, markets, and populations has become routine. Both information flows and capital flows have reached dizzying velocities in the contemporary world. Customers banking today have an astounding array of technologies available to them to access and manage their funds. Bank of Montreal has unprecedented technological power at its fingertips to serve the increasingly complex demands of those customers. In the trading world, the astonishing intricacy of that field stems partially at least from the magnitude of the information and communications technology and algorithms that support the business today. One glance at the long line of obsolete (but still remarkably functional) machines in a special

section of the Bank of Montreal Corporate Archives gives testament to the vital role that technology has played in the emergence of banking – and its extension and diffusion. Some are tabulation machines, others count bills, while yet others store or begin to process information. From the earliest days, technology has been entrenched in the activities of Bank of Montreal bankers. Banking is an information-intensive industry – it collects, stores, and processes massive amounts of data. By the dawn of the twentieth century, the Bank of Montreal and other banks began to turn toward the deployment and mechanization of their operations, especially if they were expanding. In fact, banks have been places where significant technological change has taken place. Wave after wave of new technology has allowed the Bank to adapt to change, to expand what it does, and to find ways of doing its work faster, more securely, and more efficiently. For much of the nineteenth century, the ‘technology’ that underpinned all banks was a system of control and coordination that reigned over the organization from the head office through to the retail branches and agencies. An elaborate system of clear, detailed, and highly specified routines, rules, regulations, inspection and audit policies and procedures, as well as the assignment of leadership responsibilities across the network. Rapid access to accurate, up-to-date data was and continues to be essential to the management of the bank. The ledgers acted as the great Victorian databases of banking. By the twentieth century, new technologies changed the face of banking – telephones, typewriters, and a range of information and control

88

Th e BM O Un iv er se

processing technologies from counting to mail handling. The adding machine (1901) was a prominent addition to the world of banking. Accounting machines followed, including ledger posting machines. Later in the century, electromechanical machine technology allowed more centralized ledgers and registers to be kept. The emergence and popularity of cheques promoted further technological changes in banking with the cheque-reading machines. By the 1950s and 1960s, electronic recording machine accounting was being rolled out to record bookkeeping functions. Similar waves of transformation in the 1970s and 1980s began to integrate automatic teller machines and a variety of other expanded services based on information and communication technology, and computer technology began to take centre stage with the advent of Internet-platform-based technologies. The Bank of Montreal has engaged with innovation in every major technological wave in banking. The speed of implementation always depended on many factors – resources, availability, policy, strategy. But constant throughout each era of the Bank’s operation is its understanding that, most importantly, information systems and technological innovations had to be focused on providing operational excellence, administrative precision, and, most of all, a superior customer experience. The half-dozen technological innovations highlighted here are in no way a comprehensive list of technologies. Rather, they represent technologies and innovations introduced first by the Bank – some are famous; some are lesser known outside the Bank. They all, however, made their mark one way or another in the technological transformation

of the Bank. The importance of technology in finance is tellingly evident in this book: you will find technological advancements showing up in other chapters as well.

The Telegraph, 1847

T

he telegraph was the first of the electrical technologies destined to have a significant and complex impact on the business of banking. The Bank’s early investment in the Magnetic Telegraph Company – engaged in building the first telegraph line in the summer of 1847 – consisted of a £2,000 loan secured by the notes of individual directors. As businessmen who understood the implications of the telegraph for control and coordination in banking, branches, and administration, the promotion of the telegraph was understandable. The direct impact of the telegraph on the operations of the Bank of Montreal was dramatic over time. As the

reach of the telegraph expanded, so did the reach of the Bank’s head office. This effectively meant the extension of progressively greater control over branches and the network flows of capital. Importantly, it also facilitated the more direct sharing of banking expertise and the proper execution of strategy. In practical terms, the reduction, or in some cases elimination, of the time lag allowed a more nimble approach to executing buying and selling. There were a few elements at play in the introduction of the telegraph. With Montreal being the de facto Canadian financial capital, its businessmen would naturally want to promote the new technology and make the city a central hub in the incipient network. The unmistakable leader in this enterprise was Hugh Allan, whose telegraph business was part of a developing commercial and industrial empire that embraced steamship, rail, and now telegraphic communication.

(Telephone communication would come later.) By 1850, Montreal Telegraph laid down and operated 500 miles of line throughout the United Province of Canada. By 1860, and under the presidency of Sir Hugh Allan, Montreal Telegraph managed to build a 1,865-mile network of telegraph lines across the southern portions of Canada and some lines connecting into the United States. By 1870, Montreal Telegraph was able to operate almost 12,450 miles of line. Montreal’s supremacy in the telegraph business was assured through the Montreal Telegraph Company’s acquisitions of smaller networks – Toronto, Hamilton & Niagara ElectroMagnetic Telegraph; Montreal and Troy, Vermont, and Boston; and Prescott-Bytown. In 1855, the company also ran the telegraph facilities of the Grand Trunk. The telegraph, therefore, was not just a communications tool but also a key strategic resource in the battle for position between cities and rival interests.

T THE BANK’S ELECTRONIC BR AIN

Semi-Electronic Bookkeeping, 1958

90

Th e BM O Un iv er se

echnological advancements come in various guises and speeds. We focus on the revolutions, but it’s the less-talked-about, incremental shifts – hidden in the back office – that often deserve more attention. In 1958–59, the Bank introduced National Cash Register’s “Post-Tronic” posting machines, putting it in the lead among Canadian banks in the field. It was the first bank in Canada to introduce the technology, and first in the various cities where it deployed the technology in 1959 – Montreal, Toronto, and Calgary. The Montreal installation was not only the first but also the largest such installation in the field of Canadian banking at the time. The machines enabled the Bank to provide faster and more efficient service in posting current-account cheques and deposits. It allowed a “neat and uniform statement” for the customer. The key benefit was the savings in time – posting and checking operations would take less than half the time needed under former methods. The new technology greatly reduced the possibility of human error because of built-in redundancies and fail-safes in the design of the technology. The account numbers and balances were stored electronically on magnetized “memory strips” on the back of the ledger-statement sheets. The contemporary reader may look at this relatively modest advance in bookkeeping and, with the condescension of posterity, gloss over this all-but-forgotten advance. But this innovation, like a few others in this chapter, was part of a process of continuous search, adaptation, and improvement of the key technological systems of the Bank. Technology and operations people in today’s Bank would understand acutely the step-bystep process – the small victories – that allow the Bank to maximize its technological systems to facilitate the work of Bank employees and allow them to focus on the customer.

genie Unleashed, 1963

O

n Canada Day 1963, the Bank breathlessly announced its first fully integrated automatic banking system – and the first one of its kind in Canada. Making “full use of electronic speeds,” the country’s first data processing banking operation combined cheque clearing and ledger posting for many of the Bank’s Montreal-area branches. The heart of genie was the ibm 1419 magnetic character sorter, which was capable of sorting more than 1,600 cheques a minute – an astounding increase from manual methods. The utilization of Magnetic Ink Character Recognition (micr ) numerals (the numbers at the bottom of cheques) was the heart of the system’s machine-reading capabilities. The control panel of the central processing unit of the computer at the genie centre contained electronic circuitry capable of posting 3,000 banking transactions per minute. For the first time, the records of 25,000 individual bank accounts could be kept on a single reel of magnetic tape. The genie centre itself recorded the details of 1.5 million separate accounts by that method. In announcing the “revolutionary system,” VicePresident and General Manager R.D. Mulholland (no relation to W.D. Mulholland) said that the centre was named for the “magical hero of the Arabian nights story of Aladdin and his lamp.” genie stood for GENerating Information Electronically. More to the point, the system would provide faster and more efficient service, enabling the bank to keep current with greater demands for service. “It is not surprising,” one newspaper review suggested, “that the Bank of Montreal has taken the initiative to become the first Canadian bank to provide a fully integrated data processing operation:” the Bank, by 1963, had over 900 branches, 16,000 employees, and 3 million customers. The Bank also had offices in the United States, Great Britain, continental Europe,

and Japan. To keep track of its expansion and serve customers would require close attention to technological innovation. A team of programmers, recruited from within the Bank and trained by the equipment manufacturers, spent eight months writing programs for the launch. Management consultants Booz Allen & Hamilton also assisted the Bank in coaxing genie out of its technological bottle. The Bank was confident, in the words of one report, “that ‘Genie,’ the genial wonder-working giant, will help

to lighten the burden of paperwork that was threatening to engulf it … assuring its customers of faster and more efficient service than ever before.” With genie , the Bank had firmly crossed the threshold into the electronic age, helping to provide Canadians with some of the best systems in the world for handling payments.

Speed, D ista nce, Access

91

Electronic Data Interchange, 1989

I

n September 1989, the Bank of Montreal was the first bank to install the first automated ordering process, along with Telecom Canada. Electronic Data Interchange (edi ) involved computer-to-computer electronic exchange of business documents such as purchase orders, invoices, and payments between two businesses in a public standard or Open Systems Interconnect format. edi targeted the accuracy, efficiency, and timeliness of the 25,000 purchase orders that the Bank issued every year – kind of like a backbone to the delivery of electronic banking services to retail and corporate customers. edi was a response to a range of information management challenges. In other words, here again, technological change was resulting in the elimination of a ton of paperwork. By the 1990s, the Bank of Montreal had become a recognized leader in electronic banking, including edi in the financial community in Canada. It had taken a proactive role in the development, implementation, and evolution of Canada’s financial edi within the Canadian payments system. That leadership extended to cross-border trades. Indeed, Harris Bank in the 1990s was also ranked among the top 10 Financial edi banks in the United States. The fact is that each of these step changes in the evolution of technology in banking took major financial investments in order to make the Bank of Montreal first in the field, and to help sustain its competitive advantage. Like most of its predecessors in this chapter, edi as a technological tool offered a greater strategic control over the vast pipeline of information coursing through the Bank. As one executive put it in relation to edi, it was not so much the technology deployed as the

92

Th e BM O Un iv er se

strategic direction of the corporation. “Decision-makers must look beyond the focus on systems applications and integrations to keep the key strategy and business process in the forefront.” The Bank’s investment in electronic commerce came at a time when corporate managers across the economic landscape saw electronic commerce as a short-term technological fix and not a long-term strategic tool. As the technology became more and more used – and in many quarters, a requirement for doing business with the larger enterprises in the 1990s – the Bank’s first-mover advantage, with its strong grasp and deep experience with edi , conferred a major competitive advantage in the field. As one executive suggested in the mid-1990s, “We’ve probably been one of the leading banks in setting the rules for edi … and if you’re driving, you get the route you want.” Consistently striving to match new technologies with its own and its customers’ evolving and anticipated needs put the Bank in the driver’s seat.

Magnetic Ink Character Recognition and Automated Banking, 1963

M

agnetic Ink Character Recognition (micr ) was a close relative of the genie innovation of the 1960s. “In selecting micr ,” one customer pamphlet suggested, “Canadian, British and United States banks considered many different systems. Major factors in the decision were that micr figures are not only “machine

language.” They’re “people language, too.” micr focused on automated banking of cheques. Encoded cheques would prepare them for fully automated processing, “forerunners of a new era of ‘increased service’ banking for customers of Canada’s First Bank.” With manual methods, cheques needed to pass through twelve to fifteen different pairs of hands, introducing the possibility of error at each stage. This innovation promised a “new high standard of neatness and accuracy in your statements from now on … and furthermore, introduction of these new methods will enable us to keep service charges at minimum levels.” The use of electronic data processing wasn’t just about the efficiency of handling an increasing number

of vouchers; it was also “most advantageous in promoting a firm’s Corporate Image,” suggested one report in 1964. “To date we have obtained excellent publicity … and our competitors are endeavouring to overcome our initial advantage in this field.” The Bank of Montreal still held the advantage, however, since the bank had the most completely integrated system in the electronic data processing field at the present time.” The arrival of several technologies related to automation in banking seemed to have launched a new front in the competition between Canadian banks. The central role of new technologies would ensure that the rivalry would continue into the next generation.

Speed, D ista nce, Access

93

Mobile Banking, 1999

T

he Bank introduced mobile banking in the spring of 1999. bmo customers would be able to move money, check credit card balances, trade stocks, and more through mobile banking. The Bank’s Emfisys Group and 724 Solutions Inc., a software firm, combined forces to offer mobile banking and brokerage to the Bank’s customers. Mobile banking came on the heels of the Internet, which in itself had profoundly affected the way banks reached their customers. The

94

Th e BM O Un iv er se

innovation here was to perceive the combination of wireless and Internet for banking. Work on the concept began in the summer of 1997 and rolled out eighteen months later. Veev was launched in May 1999 and became the first wireless financial services package in North America. The nature, complexity, and pace of technological change by the 1990s had changed significantly. Some of the entries in this chapter were implemented in a more stable, symmetrical environment. By contrast, mobile banking was introduced amidst a classic “gale of creative destruction” represented by the arrival

of the technologies based on Internet protocol. The implementation had to be much more nimble. The rationale was also partly defensive. “Even if it doesn’t generate revenues in the near term, there’s no question that someone else will get into the mobile e-banking and e-brokerage business if we don’t,” suggested Frank Techar, a senior vice-president who was coordinating the project’s business implementation strategy for mobile banking. Techar perceived correctly the overwhelming challenge of technological disruption in financial services: that in the long run, these technologies had the potential to completely transform the entire banking sector and upend established players. Being first to market with an important new technology was a way to combine the transformative power of a new technology with the depth of experience, insight, and professionalism of an adaptive, established player in the field. As senior technology executive Lloyd Darlington suggested to a British audience in 2000, “we have learned the critical importance of moving early and moving fast … We believe … that we were justified in assuming the risks and the aggravation that inevitably come with being first in any market. We have gained a leadership position, experience in a field where experience is scarce, a much deeper understanding of the technology and the market, and growing recognition.” The Bank of Montreal, therefore, could lay claim to at least two North American firsts: the first commercial launch of financial services over a browser-enabled mobile device; and the first multi-device, multi-line of business mobile channel. It later added real-time trading through InvestorLine and the rollout of Harris Bank’s own mobile banking offering in 1999. Those remarks could very well capture the Bank’s entire experience with its leadership in technological innovation: move early, move fast, assume the risk, establish leadership. Of course, no institution can do it every time, but the Bank of Montreal has had a firstclass track record in the field.

A Sense of Pl ace

A National Architectural Legacy

T

he relationship between banking and the evolution of the country’s architecture is a strong and enduring one. Banking halls and branches represent an important element in the contemporary history of architecture. In its main territories – Canada and the US Midwest – the buildings, branches, and agencies connected to the Bank of Montreal have made a continuous, sometimes transformational, and always evolving imprint on the urban landscape. The reasons are not hard to discern, with the Bank’s importance to the economic activity of cities, regions, and nations being perhaps the most important. In the metropolitan landscape, financial districts teem with glassand-steel manifestations of capital. The noble structures of nineteenth- and twentieth-century banking have anchored numerous city centres across the country. Banks also act as important providers of jobs. As people moved to suburbs and

urban areas expanded outward, Bank of Montreal branches followed their customers by establishing their presence in shopping centre malls and along new thoroughfares. In the twenty-first century, new waves of transformation are taking place, driven by technology and inspired by the constantly evolving understanding of the needs of the client. Bank architecture has also made its mark on smaller towns and outposts across the country, driven by demand for banking services from enterprises and the people who work for them. The impact of the Bank’s architectural legacy in its territories has been significant. Banking halls, headquarters, and regional centres as much as individual branches have made their mark on the larger urban fabric through their facades, on the major street corners and in the plazas where the Bank has operated. In concert with the institutions that came after the Bank of Montreal, the impact

on urban architecture has been deep and lasting, from neo-classical architecture to the contemporary skyscraper to the highly technologized branch offices of modern times.

An Evolving Architecture of Service As the following pages show, the architecture of banking has evolved over time, sometimes dramatically. It is an art form constantly in flux. The nineteenth-century temples of finance, such as the Bank’s headquarters at Place d’Armes in Montreal, are wondrous and elegant examples of the period, but they would be inconceivable today. In each generation, several powerful forces are at work in creating the built environment of the Bank. The first consideration is the utility and function of the building for banking. A second consideration is

the needs of the customer and client. A third consideration: the changing nature of the business. A fourth and critical consideration is architectural expression: what message does the Bank want to convey? These considerations are always in a dynamic relationship with each other, to be resolved and expressed by bankers, architects, and builders. Finally, bank buildings have to respond to their broader cultural, social, and economic environment, whether in Montreal, Toronto, or Chicago, or Sarnia, Winnipeg, or Milwaukee. There have been monumental changes in the way the Bank has expressed itself across the generations according to the needs of the era: classic or contemporary, safe or avant-garde, established or upstart. The architecture followed suit and both accompanied and reinforced these changes. For much of its first century, the Bank of Montreal resided in buildings that projected safety, solidity, and security. They were formidable, conventional, conservative. The buildings invited customers into an institution that was not only secure; it was wealthy and connected. By the 1960s and 1970s, security as the prime consideration began to give way to another priority: service. This was in tandem with major changes in the way people perceived money. In the early days of banking, people saw money as a passive physical property. It needed to be protected and slowly accumulated. By the postwar period, more and more people came to see money as something that was in rapid motion. As one historian describes it, the transformation is from money storage to money stores. Customers became less interested in passive saving and more interested in active investing.

96

Th e BM O Un iv er se

The impact of these changes in consumer culture and banking had a major impact on the architecture of banking. The bank was not just a place where you locked away your treasure and visited infrequently. It was becoming a place where your money actively worked for you; where you struck relationships; where connection, transparency, and openness became priorities. The transformation of the office environment over time is striking. Where rank, hierarchy, and function were once prominent, a flatter, more collaborative impulse began to transform the working spaces of Bank of Montreal employees. As the Bank crosses the threshold of 200 years, its relationship with architecture remains in flux as it responds to the changing demands of customers and employees, the transformations of technology, and the shifting ideas of how we think of personal, private, and public capital. The entries in this chapter roughly conform to the three architectural ages of the Bank: classic, frontier, and contemporary.

Classic Age

C ANADA’S C APITAL OF C APITAL

Montreal Main Branch

T

he Bank’s main branch at Place d’Armes is a transformational Canadian landmark. This was the first building in Canada specifically designed for banking purposes. It was completed in 1819 at a cost of £8,750. For three decades, it served as the principal branch and the head office for the Bank. In 1848, it was enlarged

to accommodate the expansion of the Bank’s business. The prominent dome was added in 1904, but the facade has remained the same since the expansion of 1848. The building complex was remodelled and extended in 1905 by the American architectural firm of McKim, Mead & White, which pushed the original building and its extension onto Craig Street (now known as St Antoine Street). In the 1950s, the Bank acquired land immediately to the west to complete the current seventeen-storey structure (with four additional floors below ground). The square in front of the Bank’s main branch is a vital point of reference for the history of the region. Maisonneuve,

who founded Montreal in 1642, fought a decisive battle on that ground. Nearby lived the founder of Detroit, Lamothe Cadillac, and Sieur Dulhut, explorer of the Mississippi River and founder of Duluth, Minnesota. It is here, too, that the Canadian financial system took flight – first in the city, then expanding into region, colony, country, and continent. Directly opposite the Bank is Notre-Dame Basilica, built in 1829. Montreal Main Branch represents a unique architectural contribution to the city and the country on both the inside and outside. Such architecture was clearly meant to evoke the monumental style and solidity of the Bank itself. The main banking room was constructed in the form of a Roman basilica, inspired by Santa Maria Maggiore and San Paolo fuori le Mura in Rome, though with a decidedly different business transacting within! The ceiling is gilded with 350,000 23.5-karat gold leaf sheets. “Certainly no other bank is in possession of such a room,” reported one paper in 1903, “and it is indeed very doubtful if the large American or even English cities can produce its equal either in size, decoration or appointment.” For example, the floor-to-ceiling height in the banking hall was approximately 80 feet, with the Corinthian columns of Windsor green granite resting upon black Belgian marble. A major renovation completed in 1905 made Montreal Main Branch “probably the largest, and architecturally the most monumental, bank building in the world.” Montreal Main Branch has also served as the inspiration for the architecture of many of the Bank’s branches across Canada. The buildings were said to reflect and express the purpose of the occupants. The exterior structures were dignified, majestic, and monumental; the interior impressive, grand, and rich – all hallmarks of the classic banking hall of the previous century. A Sense of Pl ace

97

DOM INION RISING

Toronto Main Branch

T

he Bank’s operations in Toronto began a year after its establishment in 1818 with an agency on Frederick Street. Anxious to conduct business in Toronto but prohibited by then-current banking laws, the Bank of Montreal bought the Bank of the People and ran a banking operation on the corner of King and Bay streets – a corner to which it would return in the twentieth century. That first Toronto office was opened in 1842. In 1845, under the supervision of IrishCanadian architect Kivas Tully, the Bank had a stone building erected on the northeastern corner of Front and Yonge streets. The building served its purpose, but by the 1880s was looking rather ‘retro’ in a neighbourhood where more elaborate, Beaux-Arts-inspired buildings were being built around it. But it was in 1885, at that same corner, that the Bank of Montreal would offer its most impressive contribution to Toronto architecture (until the arrival of First Canadian Place). First, it demolished the old branch. Second, the Bank engaged noted architect Frank Darling to build an impressive new building. Darling and partners were the same architects who designed Convocation Hall at the University of Toronto, the Royal Ontario Museum, and the Art Gallery of Toronto (later Ontario), and a host of other famous buildings. But it was with the Bank of Montreal building – the building pictured here – that his place in the pantheon of Canadian architecture would be secured. The branch at 30 Yonge Street signalled a new perspective in the bank – one that was more self-confident and secure in its prosperity. In Montreal, the Place d’Armes building was undergoing extensive updates and a major facelift; Toronto would get a new building altogether. The

98

Th e BM O Un iv er se

Toronto Historical Board note on the Front and Yonge property calls it “one of the most joyously self-confident buildings ever erected in Canada, perhaps the only building in the Dominion that really exemplifies those feelings … described as ‘The National Dream.’” This building can be interpreted as a new generation of bankers asserting itself. The exterior is scaled for maximum effect. The vast banking hall contained inside completes the effect and was called the “finest

interior of any banking institution in the Dominion” by one contemporary observer. Certain elements recall the Montreal office, while retaining a clear Beaux-Arts look and feel. The Pantheon-inspired dome with vibrant stained glass covers virtually the entire interior space. The building has long since ceased to be a Bank of Montreal branch, but with some major renovations and upgrades it has become the worthy home today of the Hockey Hall of Fame.

THE CIT Y AS FRONTIER

Montreal West End Branch

T

he Bank of Montreal’s West End branch was opened on 10 June 1889 at 950 St Catherine Street West, the first of its kind beyond the majestic Main Branch of the Bank. The building is the work of Sir Andrew Taylor, one of Canada’s founding architects and the intellect behind a number of Montreal buildings, including McGill’s Redpath Library. It was built with sandstone from Scotland, and involved a good number of Scottish settlers, who worked on cutting the stone for this handsome building. Its first manager, D.N. Macpherson, led the branch until his retirement in 1920. He was said to be the most popular bank official in the city. Good leadership and popularity were strong competitive advantages as the Bank began to move beyond its traditional precincts in the old financial district of St James Street. The West End branch is a fine indication of the Bank’s expanding presence and prosperity in the late nineteenth century beyond the core of Montreal’s financial district. In fact, the Bank’s move to the west end was considered a bold ‘pioneer’ move to developing (but not developed) Upper Town Montreal. This was the first office opened by any bank, apart from the Main Branch, in the city of Montreal – the first step in the network of branches covering the city. By the mid-1920s, this was the busiest retail district in Canada. Many of Montreal’s most prominent merchants – many of whom lived and worked in the west end of the city – became lifelong customers of the branch. This included jeweller Henry Birks & Sons and E.M. Renouf of the Renouf Publishing Company, two prominent local merchants. One early patron of the branch noted that the West End branch obtained “most of the Savings Accounts in those days. The Bank of Montreal was the only place where a cautious man felt his money would be safe.”

A Sense of Pl ace

99

DOM INION BANKER

Ottawa Main Branch

T

he Bank’s close relationship with governments began virtually from the establishment of the institution in 1817. The Bank’s presence in Ottawa after Confederation in 1867 took on a particular prominence in its role as government banker, first Canadian bank, senior Canadian bank, and ambassador of Canadian capital in New York and London.

100

Th e BM O Un iv er se

The Bank established a branch in Ottawa – the city’s first bank – in 1842 to serve a local economy dominated by the wood and lumber trades. Ottawa’s designation as the new Canadian capital in the 1860s of course transformed the region. The importance of the city and the close nature of the relationship between the bank and the new government of Canada demanded that its premises be equal to the task. In 1867, the Bank purchased a lot at the corner of Wellington and O’Connor streets, opposite the parliamentary West Block. The building itself was constructed in 1873–74. Later, a small limestone house was built against the southern wall on O’Connor Street to accommodate Bank of

Montreal senior executives and directors visiting the national capital. The building underwent several expansions and renovations over time to accommodate the influx of work and business at the Bank. This was especially true during the First World War when the Bank in one year alone (1917) handled between 5 million and 6 million government cheques. In May 1929, the Bank announced that it would build a major new building in Ottawa to be designed by the architects Barott & Blackader of Montreal. The new building was inspired by a modern interpretation of Greek design in Queenston limestone and Stanstead granite. As the Royal Architectural Institute of Canada Journal reported in 1932, “the Wellington and Sparks Streets facades are heroic size relief panels depicting the future and past of Canada allegorically. Bronze and iron grilles have been used for the large windows at the ends of the building.” The impressive interior featuring a large banking hall – “a traditional temple bank in Modernistic guise” – imparted a more contemporary look to the Bank while at the same time recalling its past. This new building has been called the Bank’s “most noteworthy building project since the … head office enlargement of the turn of the century.” Here again, the Beaux-Arts design inspired Ernest I. Barott, the main architect, to propose a building of “severe, contained, classical composition.” As one observer remarked, “no bank at the time could have asked for a more perfect balance between modernity and tradition than Barott provided with his elegant sophisticated design.” Indeed, the work won the Gold Medal for 1932 from the Royal Architectural Institute of Canada. Today, the building has passed into the hands of the Government of Canada, which, after a $99-million investment, has restored it beautifully to its former glory, expanded it, and renamed it the Sir John A. Macdonald Building. Unveiled in June 2015, the building is now the home for large parliamentary meetings and functions.

WESTERN C APITAL

Winnipeg Main Branch

T

he Bank of Montreal opened its first branch in Winnipeg on 19 November 1877 under the leadership of Campbell Sweeny, the man who opened up the West for the Bank. The city in the 1870s was essentially a long street running from Fort Garry at the mouth of the Assiniboine River to a little north of the market square with a few parallel streets. The main national enterprises represented were, of course, the Hudson’s Bay Company, the Canadian Pacific Railway, and the Bank of Montreal. The first railroad to enter Winnipeg arrived on Dominion Day 1886. From the 1880s, Winnipeg was about to explode with flows of immigration, the seeding of the prairie wheat fields, and the development of the grain trade. Winnipeg presided over and participated in the strong growth of the West – as an entrepôt, distributing centre, and inspection point. The city became the fourth largest manufacturing centre in the country after Montreal, Toronto, and Hamilton. The city surpassed the billion-dollar clearing mark in 1911, a flow that undeniably conferred it the title of financial capital of the Canadian West. The rise of Winnipeg is admirably captured by the monumental Bank of Montreal Main Branch. The building, another in the banking temple style recalling the Roman Parthenon, is situated on the corner of Portage Avenue and Main Street in the heart of the business district. The Bank’s favoured architects, McKim, Mead & White, oversaw the construction of this neo-classicalstyle building. It was built as a three-storey frame structure with granite walls. The exterior is modelled on a Greek temple with Corinthian columns, while the interior recalls a Roman basilica with Ionic columns. The interior is rich in detail, with an impressive 50-foot height to the main banking hall. The ceiling is decorated in gold leaf.

The building’s monumental status in the city reflected Winnipeg’s rapid advance to metropolitan status as much as the Bank’s key involvement in the rising fortunes of the city. Winnipeg’s economic fortunes were also transformed specifically by the proliferation of banking, insurance, and investment institutions that took root in the prosperous soil of this remarkable

city. The building is also a statement of the Bank of Montreal’s engagement with the Prairie West as economic development flourished. The building served both as a main branch and western divisional headquarters until 1971 and has since been used for various functions.

A Sense of Pl ace

101

PACIFIC VISION

Victoria, British Columbia

V

ictoria is not only the provincial capital of British Columbia but was also an important centre for the movement of commercial timber in North America. For most of the twentieth century, lumbering was the predominant industry on Vancouver Island. The city has also had a long-standing tourist trade. The building pictured here is an enlargement of the 1907 Merchants Bank of Canada building in Victoria designed by architect Francis M. Rattenbury (at a total cost of $72,000, or thirty-two cents per square foot!). A major renovation was completed in 1924. The branch is located on the corner of Douglas and Yates streets, with a frontage of 120 feet on Douglas and 49 feet on Yates. The branch has undergone major expansion and renovation on a number of occasions as its connection to the community has grown and evolved and as the business of banking has transformed over the years. The history of the Bank in Victoria begins on not one but two dates: 20 May 1859, with the establishment of the British Bank of North America’s branch (a bank that merged with the Bank of Montreal in 1918), and 1 April 1891, the date of the Bank of Montreal’s opening at 1200 Government Street. In 1859, the city was not yet incorporated. In 1891, it was little more than a small but busy seaport of 17,000 people slowly making its way to its elevated status as one of the most attractive cities in North America. The leader behind the expansion of the Bank into the city was Campbell Sweeny, Victoria branch’s first manager from 1891. Indeed, Sweeny was responsible for establishing agencies in Winnipeg and Vancouver. In his career in Victoria alone, he laid the foundation of eight Bank of Montreal offices in various parts of the city.

102

Th e BM O Un iv er se

MODEL BR ANCH, MODEL CIT Y

Montreal Mont Royal, Quebec

T

he Bank’s Mont Royal office opened at 1625 Graham Boulevard on 1 November 1946, part of the great branch expansion following the Second World War. The branch itself, particularly its position and premises, signals an important change to the way branches were established across Bank of Montreal territory. The building, for example, was a converted restaurant with a residential apartment on the second floor. During the war, it functioned as a local office of the Canadian Red Cross. The Bank’s move into Mont Royal was part of a larger strategy of expansion. The city itself was founded in 1912 as a ‘model city’ inspired by several urban movements – notably City Beautiful, Garden City, and Garden Suburb – of the turn of the century. Originally a compact residential area, the city evolved into an affluent residential district and attracted some major industrial players like the radio electronics manufacturer Canadian Marconi and Canada Flooring Co. – both customers of this branch. The branch grew exponentially in the 1950s and 1960s, prompting renovation and additions to the building. Pictured here is the front of the branch, constructed in Vitrolite, vitreous marble used for the facades of buildings, especially in the Art Deco and Art Modern architecture of interwar America. This unusual building material was extraordinarily versatile. In the United States, it was extensively used to retrofit existing buildings in an effort to modernize the look and feel of Main Street America. In this case, the Bank used the material to put a new face on an old building and to start a new chapter of banking in a rapidly growing, affluent community.

A Sense of Pl ace

103

Frontier Times

T

SPECIAL BR ANCH

Isle Maligne, Quebec

104

Th e BM O Un iv er se

his Bank of Montreal branch was established in December 1952 on Isle Maligne as a sub-agency of the Saint Joseph d’Alma, Quebec, branch, in the heart of the Saguenay district. The Isle Maligne was the site of a massive hydroelectric generating station developed by the Saguenay Power Company, Ltd in the 1920s. The station was a wonder of its day, producing 540,000 horsepower, or 10 per cent of the total electrical energy output of all central stations in Canada. The Isle Maligne was considered to be the gateway to the ‘Northern Empire’ that beckoned north of Lac Saint-Jean. The branch opened at the special request of the Aluminum Company of Canada to accommodate its employees, which totalled around 800. Initially, the branch was open on every second Friday – payday – from 10 a.m. to 3 p.m. for deposit-taking. The publicity for the opening of the branch underlined the attractiveness of the interior of the building and the fact that a staff of three would be on hand to serve customers. This sub-branch was made a full branch of the bmo network in January 1957. Thereafter followed the construction of a more permanent structure that was “the most modern available.” The establishment of the branch was a fairly typical indication of how the postwar Bank was willing to meet the needs of both its enterprise and individual customers in the communities of the Bank’s territory. “Our ambition,” read one newspaper advertisement, “is to furnish the same level of efficient and practical service that Canadians in all walks of life have come to expect from the B of M for the last 139 years.” The fortunes of the district closely matched those of the broader district and its main employer. Although the branch was closed in August 1981, it serves as an important reminder of how the Bank sought to serve new districts, new customers, and new territories.

THE HEART OF THE EASTERN TOWNSHIPS

Knowlton, Quebec

T

his branch was opened on 19 April 1899 as a branch of the Molsons Bank. The original twostorey building also housed the manager’s residence, a fairly typical arrangement of the late nineteenth- and early twentieth-century bank halls in smaller communities. The branch is in the heart of Knowlton, about 60 miles southeast of Montreal on Brome Lake. The village of Knowlton was established in 1821 and thrived as a regional centre for flour processing. The city and county’s beautiful surroundings gradually attracted a wealthy clientele of Montreal businesspeople who built summer homes on Brome Lake. The region is famous for its winter skiing and its bucolic surroundings. Pictured here is an early photo of this modest but attractive branch, with ample parking for customer horse and carriage.

A Sense of Pl ace

105

M ARITIM E ELEGANCE

Mahone Bay, Nova Scotia

T

his bank hall began life as a sub-branch of the People’s Bank of Halifax in April 1900 in Mahone Bay, about 55 miles southwest of Halifax, Nova Scotia. The town was founded in 1754 by Captain Ephraim Cook, who brought the original German settlers to the area. The town is said to have derived its name from pirates infesting the bay and using low-lying craft with both sails and oars sloped slightly back, known in French as Mahonne. The first office on this land was a small storey-and-ahalf wooden building on one side of a dry goods store. In 1905, the Bank of Montreal acquired the People’s Bank and built a new structure in 1911. The arrival of the railway in 1905 connected the region to Halifax and Yarmouth, which had only been reachable by water in the summer and by stagecoach in the winter. The bank served customers principally in the fishing and shipbuilding industries. In fact, there were at least six shipyards operating when the branch opened in 1900. Fishing schooners were plentiful and the West India trade was thriving. Both activities, however, gradually faded into history as shipping gained the upper hand in the regional economy. The branch pictured here was originally built in 1911 on Main Street in the town. Its semi-colonial design and Corinthian pillars project the kind of classic style typically preferred by the Bank in smaller towns. The architectural image is strong, solid, elegant, timeless, and classic, and fits in with the architecture so characteristic of the Maritime region. As one Bank memorandum suggested, “the value of the Bank to the country is not to be measured so much by the amount of capital … as by the security it has given to those who have trusted it, the facilities it has furnished for the exchange and increase of commodities and the assistance it has contributed to the development of the country … everywhere in Canada it is a factor in the life of the community.” The Mahone Bay branch had the distinction of being featured on the cover of the Bank’s 1984 annual report: a tribute to its architectural elegance and symbolic power.

THE QUEEN CIT Y AND HER BANKER

Nelson, British Columbia

B

y the late nineteenth century, the Bank’s network of branches was reaching newly formed cities, towns, and districts across Canada. The Bank arrived in Nelson, “the Queen City of the Kootenays,” in the southern interior of British Columbia in February 1892, five years before the town itself was incorporated. The first manager, A.H. Buchanan, was reputed to have walked 50 miles from Northport, Washington, across the Canada-US border in snowshoes. In his pockets was the necessary capital to start the branch: $11.50. The Bank responded to the urgent call for banking facilities during the early days of the gold rush in Nelson in the 1890s, and was the first to arrive, if only by a few months. Nelson’s main industries in the late nineteenth and early twentieth centuries were mining and forestry, followed later by fruit growing. It also grew as a transportation entrepôt and administrative centre. The city grew to become the most vital distribution point between Calgary and Vancouver. The Canadian Pacific Railway reached Nelson in 1891, and the famous Crowsnest Pass branch of the cpr was completed in 1896, linking the town to markets both east and west. The Bank’s increasing specialization in understanding and serving these sectors in developing communities across the West allowed it to flourish in many such towns. The Bank in this instance very much grew in tandem with the city. The Bank of Montreal branch pictured here was completed in 1900 on the corner of Baker and Kootenay streets and was considered thereafter one of the finest banking buildings in the province. The black-and-white photo does not show it so much, but the construction is of a cream-coloured Washington pressed brick. The

architect combined the Beaux-Arts classicism of the era with a number of engineering innovations such as the use of steel T-beams in place of traditional wooden joists. The stylistic details – decorative scrolls, basreliefs, balustrades, and finials – connected the Bank and the town to a larger movement and context. The importance of the banking hall to the developing towns of the interior – location, position, and the projection of confident permanence – is nicely captured in the construction as much as the details.

The building was designed by Victoria architect Francis Rattenbury, the young designer of the British Columbia legislative buildings. He was the architect of choice in that era for three key Canadian institutions in British Columbia: the government, the Canadian Pacific Railway (for an office building), and the Bank of Montreal.

A Sense of Pl ace

107

BANKING IN NEX T-YEAR COUNTRY

Rimbey, Alberta

108

Th e BM O Un iv er se

T

he Bank’s presence in Rimbey, Alberta, on 17 November 1913 came as a result of the acquisition of the Merchants Bank of Canada, which had established the first banking branch in the town. The town, founded northwest of Red Deer and south of Edmonton in the Blindman River valley, was named after the Rimbey brothers who came from Kansas to Alberta in 1899. The town boasted one store, one post office, a creamery, two livery stables, and two hotels. The beginnings of the branch were as modest as one could imagine, being housed in a portion of a private residence. The town itself only had forty to fifty people, but its economic prospects were sound. The first manager, J.O. Lethbridge, and his assistant lived in a tent for two years – summer and winter – to provide banking services to the community. Lethbridge did, however, have the first motor car in the district (but no garage). By the 1920s, the branch moved into larger premises originally intended to serve as a billiards hall. The building you see here was built in 1928. Rimbey’s development after 1913 was uneven and halting, and oil and gas discoveries were decades away. The early days witnessed development in diversified farming and hog raising. Wheat growing was also important. The Bank’s presence in the region was considered to be an “important contributing factor” to the growth and development of the town and the district. In 1963, the Bank built “new air-conditioned premises” for the branch on the corner of Jasper Avenue and Main Street, just in time for the fiftieth anniversary of the branch. The Rimbey branch experience – the humble beginnings, the struggle, and the architecture – produce a fascinating snapshot of the Bank along roads less travelled, and its engagement with the struggles and successes of a diversity of regions and realities and peoples, yet at once connected to a common enterprise and purpose.

THE FRONTIER

Mayo, Yukon Territory

I

n 1928, the Bank of Montreal opened a branch in Mayo, Yukon Territory – an inland mining town 250 miles from Whitehorse at the confluence of the Mayo and Stewart rivers. This outpost of banking is about as far away architecturally from the bank halls of central Canada as one can possibly get. The notation on the back of the original photograph says that the building is “rather crude looking, but warm and cosy inside.” The Bank’s activities in the heartland of the Yukon Territory were stimulated principally by the mining sector. By the 1920s, the Bank’s specialization in the mining sector had already been established. Silver, zinc, and lead ores have drawn economic development activity to the area for a century. This log cabin branch was closed in 1942, although the Bank has maintained a presence in the Territory matching the evolving needs of the community.

A Sense of Pl ace

109

BANKING ON THE BAY OF HA! HA!

Port-Alfred, Quebec

110

Th e BM O Un iv er se

T

he Bank’s commitment to pushing the frontiers of branch banking in Canada in the 1920s is manifested here in Port-Alfred, Quebec, on the Bay of Ha! Ha! (now called Ville de La Baie). The Bay’s name is said to derive from the francization of the Huron word, “ahaha,” meaning ordinary trail. The Bank established its presence in Port-Alfred in December 1925 in order to provide banking services to this growing community between Chicoutimi and Bagotville. Like so many other Canadian cities and towns of the hinterland, Port-Alfred’s economy depended upon resource extraction. The Sulphite Pulp and Paper Corporation, the Consolidated Paper Co., and a subsidiary of the Aluminum Company of Canada, which owned and operated the deep-water facilities of the harbour, formed the heart of the economy. The history of the branch itself followed the fortunes of the town and its industries. Five years after its opening, in 1930, it was closed. In 1952, the branch was reopened for business, sharing the rented premises with a furniture store, a dentist, and the landlord. In 1962, the Bank entered its own premises as business grew, and to meet the demand for more banking services. The story of the Bank in Port-Alfred demonstrates the sheer range and reach of the Bank’s branch activities across geography and industrial sectors. In its multiple manifestations, the Bank’s presence in small communities, rural regions, and far-flung cities and towns was a response to both need and opportunity. The people who managed and staffed those branches were important pillars of the community, who functioned as local leaders, advocates of the region, and connections to the larger metropolitan centres. In the case of Port-Alfred, Manager Conrad Vanasse was the Bank of Montreal banker with those specific responsibilities in this region. Vanasse was a career banker with extensive experience in the Bank’s Eastern Canadian operations. The modesty of the architecture, therefore, belies a greater story contained therein.

BANKERS ON THE C ARIBOO TR AIL

Williams Lake, British Columbia

T

his branch was opened as a sub-office to 150 Mile House branch on 16 September 1919, and was promoted to a branch in June 1920. The arrival of the railroad – the Pacific Great Eastern – opened up this district to settlement and systematic economic activity. The business of the Bank was transacted in a 10-foot by 10-foot roughboard shack until February 1921. The new office was a one-storey frame building constructed mainly of fir and cedar, joining the provincial government offices and the hospital as the main institutions in the town. Banking on the British Columbia frontier was not a matter for the faint-hearted. In the railway construction

days, once a week a bank clerk took the payroll into town on horseback. On one occasion, the bank clerk readied himself for the long journey with his bag of cash containing $5,000 and several bottles of ‘liquid refreshment.’ By the time he reached Williams Lake, the clerk was the worse for wear, crawling under the counter at the general store to recuperate. When he woke the next morning, he found his money satchel underneath his head, where the townspeople had carefully placed it. The Williams Lake branch underwent renovations and expansion in the coming decades, with a new building being constructed in 1958.

A Sense of Pl ace

111

SERVING THE SUNSHINE COAST

Sechelt, British Columbia

T

he Bank of Montreal established itself in Sechelt, British Columbia, along the province’s Sunshine Coast, in July 1948 with a sub-branch to the Vancouver Branch. The branch conducted business out of this modest small frame building previously run as the telegraph office. Sechelt in the 1940s was primarily a summer resort, with logging and fishing as the principal activities. At the time this picture was taken, Sechelt had about twenty businesses. The Bank considered the area a “progressive community” and, with staff from Vancouver, also established a sub-branch two days a week out of Gibsons Landing. If weather prevented the Bank employees from returning home, local residents readily provided billeting. The Bank upgraded Sechelt to a full branch in 1955, moving to a larger location. In 1965, the Bank completed another round of modernization to accommodate the growth in its business. In 1973, the Bank moved into new quarters at the corner of Cowrie and Wharf streets. The branch stories of the Bank in Sechelt and in communities across its territory is one of nimbly meeting the rising demands for banking services as economies develop and mature. The growth of the Sechelt branch is a case in point: from the simplicity of a small rented premises to a more permanent structure, the constant element is the service.

112

Th e BM O Un iv er se

“A

pril 9 – a bank!” That’s how the Whitehorse Star

reported the arrival of the Bank of Montreal in this small community in southeastern Yukon Territory named for Frank Watson, an American trapper and prospector. “The bank will be located next to the Watson Lake Trading Post … this year has begun with an important and necessary addition to the community.” Until the building was completed, Bank business was conducted from Room 13 in the Watson Lake Hotel. The new 12-foot by 25-foot frame cabin would feature a small counter borrowed from one of the local stores and a portable typewriter obtained from the hotel. As the image suggests, this is very likely the smallest, most northerly, and coldest branch in the network. It

also shows the extent to which the Bank has widened its branch network to embrace the needs of customers and businesses. Watson Lake is just inside the Yukon Territory border on the Alaska Highway. The settlement has been a service centre serving primarily tourists and construction and highway crews, as well as exploratory mining crews operating in the area. It is also the centre of forestry in the area. In 1960, the discovery of large tungsten ore deposits attracted significant interest. The branch was closed in 1978, with the Whitehorse branch of the Bank taking over its activities.

BANKING AT M ILE 635

Watson Lake, Yukon Territory

O

n 12 April 1955, the Bank established a branch from a trailer set up on cement blocks in the Elliot Lake area (in Spragge, to be precise), 20 miles north of the Trans-Canada Highway between Sudbury and Sault Ste Marie, Ontario. In the 1950s, uranium mining drove economic development in the Blind River region and attracted a significant population. The trailer was hauled 500 miles, from London, Ontario, to serve the people of this post-war boom town. The journey took the two-person crew up from Highway 17 to non-existent roads to reach a temporary site on Highway 108 at the base of the Algom uranium mine. Six months later, the mobile bank was transported over a partly constructed road to Elliot Lake. The manager of the day, James B. Emsley, had doubts that the trailer would ever make it, but it did. A lean-to wooden structure was added to the trailer to deal with the flood of new customers – mainly construction workers who flocked to the area. In 1956, the Bank added another wooden shack to cope with the overflow of workers, cheques, and money orders. The Bank became the first commercial institution to establish itself in the community. Shortly after the opening, a payroll destined for the bank was stolen in a holdup while in transit, accelerating plans for a more secure commercial building in the city. In August 1958, the Bank established a “fine modern building” in the downtown commercial area of the city – to the relief of staff and customers! The history of the trailer and its subsequent evolution is a symbolic part of the post-war story of the Bank of Montreal. Its management was ready to strike out in bold new directions in certain fields as the times demanded. Elliot Lake represented a significant opportunity surrounded by practical challenges. The trailer captures a certain attitude and spirit of the Bank in the 1950s.

114

Th e BM O Un iv er se

FUTURE GREATNESS

Elliot Lake, Ontario

GOTHIC TUDOR REVIVAL

Libertyville, Illinois

T

he bmo Harris Bank branch in Libertyville, Illinois, is housed in the Public Service Building at 354–356 Milwaukee Avenue. The building is a Gothic Tudor Revival/ Neo-Plateresque structure officially inaugurated on 17 November 1928. The building was imagined to be an important anchor in a “dream-concept” community of the Bank owner. The exterior is an extraordinary synthesis of English, Moorish, and Asian styles. Moreover, the building was meant to house a number of businesses and establishments. The architecture of the bank is interesting, of course, but the historical interest in the building only begins there. This bank was originally the Libertyville Bank, established by British-American investor and business magnate Samuel Insull. He was also president of Commonwealth Edison Co. and presided over a massive holding company that financed electricity and public utilities. The entire Insull empire collapsed in the 1930s. In the late 1920s, at the height of his power and wealth, Insull commissioned architect Hermann V. von Holst with designing a building to both house Libertyville Bank and function as a promotion for the electric-powered world, Insull’s principal source of power and wealth. Harris Bank acquired the Libertyville Bank well before bmo emerged on the scene in the 1980s. The unique features of the building as well as its origins propelled it into the United States National Register of Historic Places in 1982.

A Sense of Pl ace

115

Contemporary Era

BANKING IN C ARS

Vancouver, British Columbia

I

n September 1949, the Bank received unprecedented national media coverage for the introduction of “Drive-in Banking” at the 10th and Granville (North Side) branch in Vancouver. It was the first drive-in bank in Canada, part of the Bank of Montreal spirit for being ‘first.’

116

Th e BM O Un iv er se

In 1955, the Branch went one further and introduced a “curb-side” teller’s unit to respond to the challenges of parking in the city by “allowing bank customers to carry out simple transactions without leaving their cars.” The “Snorkel Teller” – actually a mechanical arm – would reach out to you in your car. The device was an endless belt that extended from a special control area inside the bank, under the sidewalk, and up into a box a few inches from the car window. The customer could complete a transaction in as little as fifteen seconds. Bank officials also reckoned that the innovation would save about 150 parking spaces in the overall traffic picture. At the time, only the London, Ontario, Bank of Montreal branch could claim such an innovation. The Vancouver Province saw these innovations as “complete and final proof that banks have gone modern.” The article also marvelled at the fact that Manager Harold Whitmore’s desk was made of “freeform Danish teakwood furniture,” a sure sign of post-war modernity. “Just think. You can drive from the office on pay day; cash your cheque; go to a drive-in restaurant for dinner and then on to a drive-in movie; go home without getting out of your car.” The technology was not the only thing keeping up with the times. The manager insisted on being called by his first name, making him “one of the few managers in the country to own but one initial,” a local newspaper reported. The Sun quipped that “You might think a bank is a bank, but when you find one that has dumb-waiters, and loungers for employees, and comfortable chairs for customers, and a manager’s office that permits the public actually to see the boss sitting there keeping track of the income and the outgo, and handsome Danish furniture, and all and all, it is worth writing home about methinks.” The drive-in and curb-side innovations, the Danish furniture, the first-name basis with the manager – these are emblematic of a clean break with the pre-war style of Canadian banking that emerged after 1945. A new generation, impatient with formality and eager to embrace novelty, burst onto the scene.

SHOWC ASE BANKING

Don Mills, Ontario

T

he Bank of Montreal’s Don Mills branch opened in 1955 at 877 Lawrence Avenue East, Toronto, and signalled a deliberate break from the past. With its glass exterior, the bank’s architecture not only fit in with the new Don Mills Development north and east of the Toronto core but was also a sign of changing times in banking. “Showcase Banking is literally what residents of the Don Mills Development in Toronto will boast of once the Bank of Montreal’s eye-catching glass branch there is completed,” one press release gushed. Transparency and customer convenience replaces the

focus on building monuments and emphasizing security over all other priorities. John B. Parkin Associates designed and built the structure for about $100,000. The Canadian Architect in October 1957 asserted that just twenty years previous “the last type of building one might have examined for symptoms of translucence would have been a bank. It says something for modern architecture that it has been able to overcome the reluctance of bankers and the banking public, and their need for an unsubtle symbol of reliability and security, to the point where [the Don Mills branch] could be designed.” The building had a twin in Don Mills, authored by the same architect and commissioned by the Bank of Nova Scotia. In fact, the banks had gotten together to commission a building with similar features “so that costs would not get out of hand.” The enthusiasm of the architects perhaps led them to the conclusion that they were the only driving force behind the major changes in the way banks were

built. Bankers themselves were responding to changes in the way people wanted to interact with their bank. To the architects, this branch and similar others were “in the vanguard of a clarified understanding of the function of bank architecture.” To Bank of Montreal bankers, delighted to be in a new environment in almost every sense, it signalled a bank moving with the times. For customers, the overpowering architecture of the nineteenth century – appropriate for its time and place – would give way to a more friendly and approachable environment that encouraged interaction and relationship. The scale of this change in banking from the early part of the century to the post-war period is hard to exaggerate. When you compare, for example, the Front and Yonge branch (1885) and the Don Mills branch (1955), the radically different architecture speaks volumes of the revolution within banking at the Bank of Montreal and in the entire Canadian banking system.

MODERNIST AND M INI M ALIST

Villa Park, Illinois

T

he bmo Harris Bank branch at 10 South Villa in Villa Park is an astonishing and unusual example of suburban bank architecture. The branch was designed in 1964 for Villa Park Bank by the architectural firm of Hammond & Roesch. Peter Roesch was a student of the modernist visionary Ludwig Mies van der Rohe, the architect who would later design the TorontoDominion Centre in Toronto. As Lee Bey notes in an article on the subject, the vision for this branch was inspired by a Mies design for an Indianapolis drive-in restaurant that was supposed to be built in the late 1940s, but was never realized. The

concept of the restaurant, complete with the steel girders, exterior columns, and open ‘universal space’ was realized by Roesch’s execution of the branch design. The idea of an all-glass bank was increasingly popular in the post-war period as a way of focusing on transparency, openness, and customer confidence. Even in that trend, however, the Villa Park branch stands as a particularly stunning example of architectural vision and expression. The branch has become a major landmark as an important contribution to the built environment of this fine city.

T

his bmo Harris Bank branch in Spring Green began serving customers as the Bank of Spring Green. It was later acquired by Marshall & Ilsley Bank – and thus came into the Bank of Montreal stable. Spring Green was home to one of the greatest American architects, Frank Lloyd Wright. It was here that he had his studio and Taliesin, his estate. This branch at 209 E. Jefferson Street was designed by Wright’s protégé, William Wesley Peters, who kept faith with the Wright style, designing the curvilinear, limestone structure in 1972 and later adding the drive-up annex in 1975. As Wright once said of his métier, “Architecture is life, or at least it is life itself taking form, and therefore it is the truest record of life as it was lived

in the world yesterday, as it is lived today or ever will be lived.” If we apply that insight to this bank’s architecture, we can learn how the original bank desired to shape and be shaped by its wider surroundings and culture in Wisconsin. Peters’s oeuvre included an eclectic range of buildings: Fallingwater, the structure of the Guggenheim Museum, the laboratory tower at Johnson Wax, and the San Jose Center for the Performing Arts in California. Perhaps his most astonishing work was the Pearl Palace, or Kakh-e-Shams, built near Karaj, Iran, for the sister of the last Shah of Iran. Peters is also known for briefly being married to Svetlana Alliluyeva, the only daughter of Joseph Stalin.

ARCHITECTURE IS LIFE

Spring Green, Wisconsin

A Sense of Pl ace

119

CONTINENTAL DESTINY

New York City, New York

T

he Bank of Montreal established its first office in New York in 1859. The agency there has been a vital strategic link for the entire bank, acting as a clearing agent for all the branches in Canada and for London, Mexico, and Paris. It also negotiated loans to brokers against stock exchange collateral securities, purchased and sold foreign exchange and securities for customers, and performed a range of services. It also has been at once a command post and an information-gathering hub for the Bank at the centre of global capitalism. The Bank’s presence in New York from 1859 witnessed a number of moves as business grew and operations expanded. A hundred years later, in 1959, it began its second century in New York City at No. 2 Wall Street. The Bank acquired the building following the merger of the First National Bank with the National City Bank, and occupied the first four storeys and four basements of the structure. The building itself boasted 3.1 million square feet with a facade of polished granite. The building, extending 114 feet along Wall Street and 72 feet along Broadway, was built in 1932. The Bank’s standing among the banks of the world was very much on the minds of the management. The acquisition of the building was accompanied by an extensive and well-considered publicity campaign to promote the Bank’s expansion in New York, linked to the 100th anniversary of its arrival. In addition to the new building, the Bank could also point to other accomplishments. Measured by deposits, in 1958, the Bank of Montreal was the ninth largest in the world. And that year, it was run by the youngest president of those

120

Th e BM O Un iv er se

nine banks: Arnold Hart, age forty-six. In the 1980s, the building was sold after the purchase of the Harris Bank. The Bank then moved to 430 Park Avenue. The site of No. 2 Wall Street is connected to US banking history in a peculiar way: US Vice-President Aaron Burr (1801–05) had a part interest in the property. The connection to Burr is a curious one. He was a sworn enemy of Alexander Hamilton, first secretary of the treasury in the first American administration of George Washington and, more importantly, founder of the First Bank of the United States. The two famously fought a duel on 12 July 1804 wherein Burr killed Hamilton. The famous federalist is buried across the street from No. 2 Wall Street in Trinity Church cemetery.

IN THE LOOP

Chicago, Illinois

T

he headquarters of bmo Harris in Chicago is actually three buildings – built in 1911, 1960, and 1975 – that are connected internally. Each is architecturally significant in its own right. Together, the complex on the corner of Monroe and LaSalle streets constitutes an important address in the Chicago Loop neighbourhood, the city’s financial district as well as the seat of city and county government. The first building, the centre one, was designed by architects Shepley, Rutan and Coolidge and opened on 1 May 1911 as the first permanent home for the Harris Bank organization. These distinguished architects were also responsible for the Art Institute of Chicago (1893) and the Harvard Medical School (1906). One of the distinguishing features of this first major Harris building was the bas-relief lion sculptures on the facade, which established the lion as the symbol of the bank. The central building is flanked by the glass-and-steel towers built in 1960 and in 1975. The architects for both buildings were Skidmore, Owings & Merrill (som ), one of America’s most celebrated architectural firms. The East Building has twenty-three storeys and opened in the same year as Harris acquired the Chicago National Bank. This particular edifice is an early example of the International Style skyscraper that the firm would return to in the construction of the Sears Tower (1973) and, four decades later, 7 World Trade Centre (2008). The West Building was also an som -conceived project that opened in 1975, with thirty-eight floors. One of its distinguishing characteristics is incorporation of a public plaza. This building project was the first in the United States to include a program of commissioned art, including large works by Yaacov Agam and Evelyn Anselevicius, as well as a plaza fountain sculpture by Russell Secrest. It was also the first Harris Bank building to house an automatic teller machine.

A Sense of Pl ace

121

MODERN OUTLOOK

Milwaukee, Wisconsin

T

he building at 770 North Water Street acts as bmo Harris’s Milwaukee headquarters. Marshall & Ilsley (m&i ) Bank was expanding its operations and activities in the late 1960s and opened this building in 1968.

Architects Grassold, Johnson Wagner & Ilsley designed this contemporary twentieth-century concrete tower. Press releases of the day heralded the building as the avatar of a coming “modern Wisconsin,” both for its exterior and interior, which featured “colours common to Wisconsin’s outdoors.” This building’s construction was a symbol of m&i ’s rise to regional banking powerhouse in the 1960s and 1970s, the pride of Wisconsin banking. By 1972, the year of the bank’s 125th anniversary, m&i was second only to First Wisconsin. By the 1990s, it was

number one in the state. Its executives in 770 North Water were looking out toward the national horizon for new markets. The history of the Marshall & Ilsley Bank in the last few years has merged into that of the Bank of Montreal. The current Milwaukee headquarters has become an important nerve centre for the Bank’s expanding Midwestern United States operations. The m&i building is an architectural reminder of the m&i ’s importance to the development of banking in Wisconsin.

THE KING OF BAY

Toronto, Ontario

F

irst Canadian Place, or fcp as it is known to its inhabitants, was built in 1975–76 at the northwest corner of King Street West and Bay Street. The tower was co-developed by Olympia & York Developments Limited, the Bank of Montreal and the North American Life Assurance Company under the supervision of Bregman and Hamann, Architects. At seventy-two storeys, it was Canada’s tallest office tower and the tallest tower in the Commonwealth. In addition, this Ontario headquarters for the Bank was, at the moment of its unveiling, the eighth tallest and the world’s largest (117,000 square feet) bank building in the world. The plans included ample space for shopping and green space in addition to offices. Only two acres of the seven-acre development were to be used for the highrise buildings. The top of the podium was to become a park devoted to public use “with flower beds, pools, fountains, benches and plantings, where the public can escape from the claustrophobia and pressure of the downtown environment.” The marble on the tower was imported from Carrara, Italy, and filled 400 containers, each weighing twenty tons, for the sea voyage to its final destination. The entire cost of the tower was reputed to be in the neighbourhood of $160 million. It was the largest and tallest building incorporating a framed steel tube structural design concept. Plans for fcp in the mid-1970s came with their share of controversy. Some city residents and councillors wanted the old Globe building on the site preserved; others believed that the era of the highrise was over. The developers, however, made the required concessions and negotiations to proceed were concluded. When Pauline McGibbon, Ontario’s

lieutenant-governor, unveiled the cornerstone, she called the project one “designed to serve people rather than overwhelm them … There is no longer room for rampant growth. In this age, planners and builders more and more must look to creating functional, people-oriented structures rather than edifices for personal glamour or glory.” A Sense of Pl ace

123

bm o’s M ost Wa nted

Protecting Your Money

T

he physical security and protection of the wealth of the community has been one of banking’s most vital – and most fundamental – functions. From the very beginning, the physical protection of the gold, specie, notes, legal tender, and more recently, the electronic assets of Canada’s first bank and its customers has been a key preoccupation in all of the Bank of Montreal’s banking activities. People need to feel confident that their money is literally safe before they can think of more productive uses of their capital. Security and stability are the foundation of a successful financial system. This chapter is in some ways a testament to two universal impulses. The first is the persistent desire to get rich quick, and the many ingenious ways criminals have found over time to try to make that happen – sometimes through brute force and violence, sometimes through intricate

plots and conspiracies, and sometimes through attempting to outfox or outsmart humans or technological systems. The impulse to steal is an ancient one; it is also one that constantly finds new and sometimes inventive expressions over time and space. Physical force and violence is the most basic and the most brutal, but it is only one. Counterfeiting bills and notes, kiting cheques, defalcation, and fraud also take their place in the rogue’s gallery. When value and wealth begin to flow more freely, the criminal mind perceives an opportunity. In the highly technologized contemporary era, debit and credit card fraud, skimming, and all sorts of Internetinspired fraud and theft take billions upon billions of dollars from the world’s financial systems. The second impulse is the powerful determination of financial institutions to fulfill a prime directive: to keep your money safe – literally. This

applies equally across all banking institutions, of course, but when you are Canada’s first bank, and you are a leading bank, you take very seriously the responsibility to maintain the highest possible standards of security and protection available. Throughout the Bank’s history, security and protection of money have been fundamental considerations across the Bank’s territory and operations. At the branch level, the response was often physical and visceral: the Bank managers and employees were issued firearms and used them when absolutely unavoidable. Until about a generation ago, banks were central institutions in most communities, repositories of hard-earned and slowly accumulated wealth. Bank robbers were not often shown any mercy by townsfolk. In other cases, branches and head offices had to deal with system-wide issues such as counterfeit notes and corporate-wide security concerns such

as technology-based fraud. Internal audit systems, moreover, kept a close watch on the day-to-day operations of the bank. Organizations in contemporary banking also use their sophisticated systems to mitigate risk through insurance and an elaborate web of protective systems. Coordination and collaboration amongst institutions are also the order of the day in the fight against an increasingly sophisticated enemy. Complete protection everywhere and at all times is an impossible dream, but banks can ensure not only that money and wealth are protected as much as possible but also that the victims of such crimes are taken care of.

126

Th e BM O Un iv er se

The ancient philosophers had it right: the beginning of freedom is to be free from crimes. In the case of the defence of the community wealth vested in the Bank of Montreal, that freedom flowed from the confidence and trust people put in the Bank itself and as part of a Canadian-wide banking system that would protect their money from evolving and multi-faceted threats. The objects featured in this chapter represent an arc of the story of protection over time – designed to keep wealth safe, free flowing in the world, and away from the underworld.

MONEY BEHIND BARS

Teller Cages

T

he evolution of teller’s cages were yet another way bank branches on the front lines attempted to protect their money and their personnel. The twentiethcentury teller cages were typically equipped with a variety of electrical devices, hidden from view and known only to the teller. The cage was part of an overall architecture of security progressively being built into the design of nineteenth- and twentieth-century banks. Such security measures were part and parcel of the idea of reinforcing the security and stability aspect of banking. This approach was, on the one hand, pragmatic because of the security it afforded and, on the other hand, symbolic because such improvements aligned to the generalized approach of banking in this era. Contrast this with contemporary banking, where the emphasis has long been on openness, relationship, and transparency in banking transactions.

b m o’s M ost Wa nted

127

The Safety of Vaults

T

he desire to keep valuables and wealth hidden away and protected has an ancient lineage. The Emperor of Annan was said to keep gold in a large water tank guarded by crocodiles. When he wanted to withdraw gold, the crocodiles were killed, the gold was retrieved, and a new supply of crocodiles was put into the tank. Effective but at the very least impractical! By the eighteenth century in England, treasure chests were initially built of heavy substantial wood, reinforced with iron, and then made entirely of iron. By the nineteenth century, in the United States, modern safes began to be developed, and the idea developed rapidly. The protection of Canadian colonial wealth in the Bank of Montreal began with those eighteenth-century English-style chests. By the mid-nineteenth century, much more substantial wealth and progress in the art of vault building began to change the significance of the vault, making it in effect a building within a building. The Winnipeg Main Branch’s vault in 1912 was the heaviest and most protected vault ever built to that date. It was constructed in three sections, with foundations poured down to the bedrock, and it was isolated from any outside walls. The first section of the vault was a book vault; the second, on the basement floor, was a safety deposit vault; and the third, on the main floor, was used as the Bank’s cash vault. The safety deposit vault was 32 feet long, 9 feet 2 inches wide, and 8 feet high, with the steel in the doors and lining of the vault weighing 250 tons. The outer door of the safety deposit vault was 18.5 inches thick and weighed 18 tons, while the inner door weighed 10 tons. The doors were reinforced with thick layers of carborundum to prevent burning through the door. There were twenty-four solid-steel, 4-inch-diameter, locking bolts on the outer door, and two combination locks on each door. The codes were known only to two officers of the

128

Th e BM O Un iv er se

Bank. Quadruple time locks ensured extra security. Of course, security patrols and “electric protection” were also an indispensable feature of the vault system. An elaborate daily ritual accompanied the opening and closing of the vaults in almost every branch across the Bank of Montreal territory. The construction of new branches or the leasing of new premises – especially after the Second World War – spawned an impressive

documentary record of the specifications for and uses of vaults. The bank vault is the symbol par excellence of the protection that financial institutions afford their customers, keeping wealth in the hands of those who owned it and earned it. Winnipeg was but one example of the fortresses built inside the Bank of Montreal branches.

BULLETPROOF AND ROLLING

Armoured Cars

A

rmoured cars emerged as a natural response to the growing risk of transporting large volumes of wealth from branch to branch. This, of course, has always been a risk since the beginning of banking itself: protecting what is inside from malevolent forces on the outside. Bank robbery is always hell, but this was hell on wheels, adding speed, and an additional layer of risk to transportation. The evolution of the armoured car stretches back to the Wells Fargo stagecoaches of the nineteenth century and railroad ‘treasure cars,’ as well as the armoured vehicles used during the Great War. The mobile fortress began to be deployed in number by the 1920s and followed strict rules regarding construction. Smith Brothers of Toronto was one company that began to specialize in the construction of these special vehicles, customized for clients. One such car in 1924 was described as “made entirely of Special Armoured Steel, walls to be 3/16 gauge, roof and floor to be 12 gauge … Frame-work of body to be constructed of angle iron and all parts well fitted and securely riveted. The body to have such portholes for shooting purpose and in position as requested by customer.” The armoured car has, of course, become an essential feature of transportation in financial services today. The cars themselves have come a long way from their primitive beginnings at the dawn of the twentieth century, with innumerable improvements to the security features as the means to assail them have also grown. It is also frequently an object of fascination among movie producers, an object of desire among criminals, and a key source of protection of your valuables. In fact, armoured cars are much less likely to be the object of theft than bank branches.

b m o’s M ost Wa nted

129

BULLETS, BR ANCHES, AND BANKING

Guns

130

Th e BM O Un iv er se

F

irearms and banks have had a close and sometimes uneasy relationship. Of all the ways of protecting the bank’s money, this was the most potentially volatile. Up until the last generation, bank managers’ standard issue in branches included a revolver or pistol in case the unthinkable happened. In fact, it was less a matter of ‘a’ revolver, but revolvers in quantity. One Bank of Montreal Circular in 1964 suggested that a miminum of two revolvers be on hand for a staff of six persons or

fewer. If the branch was considerably bigger, say, forty staff, then five revolvers were suggested. For the really big branches, it was suggested to keep twenty or more revolvers on hand. The guns were used as protection when money needed to be moved around the city. The rules surrounding the care, maintainence, and use of the revolvers were carefully laid down: always “fully loaded and readily accessible … properly oiled and otherwise kept in order … and out of sight of the general public.” Handling guns in branches was as routine as counting money. Pistol practice was also a routine part of the life of the branch in the twentieth century, with the local police often providing instruction to bank employees. It was “not the wish of the Head Office that women members of the staff hold revolvers” until much later in the century. All guns were recalled by the head office in 1978. One of the many stories about bullets and banking comes from the old Bloor and Bay branch in Toronto, which had a storefront on both streets. Frank Pugh, the manager, saw a car quickly pull up in front of the branch. As he tells it, “While one man waited in the car, three young men climbed out and made a beeline for the branch door. I reached into my drawer, pulled out the gun … and waved it at one of the guys before slamming it onto the desk and glaring at him. I then ran into the line of Tellers, telling them there was a potential hold-up, to slam all their big bills into the waste baskets and then do whatever the robbers demanded.” Fortunately, the robbery never materialized – Pugh’s gun waves made the robbers think twice. The police were called, but apparently made no note of the call. Fifteen minutes later, a branch of the TorontoDominion Bank was robbed. In November 2001, due to federal legislation on firearms, the Bank donated its collection of firearms and shotguns to the Stewart Museum in Montreal (the second largest military museum in Canada). To preserve physical evidence of a striking and little-known aspect of the Bank’s history, two permanently disabled weapons – a revolver and a shotgun – remained with the Bank’s Archives.

PRIVACY, SECURIT Y, CERTAINT Y

The Safety Deposit Box

S

afety deposit boxes within the environment of the vault have provided customers a space of exceptional security and privacy for the most treasured of their belongings: insurance papers, personal effects, wills, share certificates, personal mementos, jewels, and much more. The service, of course, is as old as the Bank itself: the original Articles made clear that the institution could “receive deposits of Ingots of Gold, Bars of Silver, wrought plate, or other valuable articles of small bulk, for safe keeping at the risk of the depositor.” In the Montreal safety deposit vault, a client would be brought down via elevator to the basement floor and proceed to a locked steel grill door where the “keeper of the keys” would allow entry if the client was known. If not known, the client would have to explain his or her business and give proof of identity. The client would then sign in at the manager’s desk, showing the date and hour of the visit. “Saftey Deposit Boxes should not be rented to strangers,” one circular in 1918 suggested, “unless they give the best of references, which can easily be referred to for confirmation, and no one other than those authorized should be given access to the boxes.” After signing in, the client would be ushered into the vault where a “Guard Key” would be inserted into the lock of the respective box and the guard mechanism thrown off. The client’s key would then be inserted, thus completing the dual control system. After taking out the inner tin box containing the stored valuables, the client would retire to one of the “Coupon” rooms to conduct his or her business.

These deposit boxes were not just a matter for the wealthy and their share or bond coupons. Many people of more modest means, but with valuables, used the facilities of the Bank. One keeper of the keys reported that a returned soldier who left Winnipeg in August 1914 with the “Little Black Devils” (Royal Winnipeg Rifles) came in with both keys to his box, which he had rented upon his return from overseas in 1919. In fact, he was like many small investors who, in the wake of Victory Bond campaigns, now had papers and certificates they wished to protect. The soldier’s story is not much different. He worked for the railway in the post-war period. The veteran revealed to the manager the contents of the box: a Military Medal for bravery on the field, a Mons Star, a Victory Medal and Service Medal, and a German Iron Cross that he picked up on the battlefield. But by 1932, he could no longer afford to pay the rent on the deposit box and would have to “give up his box for the sake of a $5.00 annual fee.” The Depression vacated a great many boxes, but the postwar period saw a dramatic resumption of safety deposit box use to protect valuables, especially irreplaceable items and original copies of documentation.

b m o’s M ost Wa nted

131

24-HOUR STRONG BOX

Around-the-Clock Depositories

T

he installation of Around-the-Clock (atc ) Depositories in the 1950s provided an additional measure of security and convenience to the banking public. It increased security by eliminating the risk of loss or theft of cash held overnight on client premises. This small but useful innovation also served to reduce costs by lowering insurance premiums for companies and businesses that up to then had, indeed, kept cash on the premises. Retail outlets such as stores, restaurants, and gas stations – all businesses that had to remove cash from their premises after banking hours – found atc Depositories a marked improvement over previous practices. As the Elora Express reported in June 1958, “The accommodation provided is unlimited and local business people and any who care to use it will find this security they can enjoy any time outside of banking hours much to be grateful for.” The atc Depositories can be seen as part of a larger movement in the post-war period to constantly improve business services to customers. This included expanding payroll handling, investment, safekeeping of securities, bank-by-mail, and traveller services. As one brochure in 1954 enthused, “First Canadian chartered bank to adopt widespread use of after-hours depository, the B of M continues in the pioneering pattern it has followed since it founded the nation’s banking system 137 years ago.”

132

Th e BM O Un iv er se

ENSURING THINGS ADD UP

Inspectors and Auditors

T

he inspection and auditing function within the Bank has been an essential feature of the protection of the Bank’s administration and handling of its operations. Since the first formal inspectors were appointed in the 1850s, this function has ensured that the most stringent possible procedures, and the most efficient ones, have been brought to bear on the branch and head office operations. This perhaps explains why Corporate Audit has acquired a reputation for ensuring that the Bank adheres to the highest standards of administration and operation. One of the most exacting auditors of his generation suggested that the auditor worked with staff but had to be discerning enough to form independent evaluations. “You have to know when to pursue a problem in more depth, and when to drop it. You can never lose your independence or be talked out of things. Co-operation without compromise is the expression I use to describe this fine balance … [and] this is one of the things that makes a good auditor.” Auditors were tasked with examining the bank operations and the efficiency of administration and with reporting the situation to the executive. They were also required to assist managers and officers, especially the younger ones, in the execution of their duties. Every aspect of the banking business came under scrutiny. The auditing function kept pace with transformations in the field, for example, moving to risk-based approaches in the 1980s. Defalcation, fraud, and embezzlement were rare but only part of the overall picture for the Bank of Montreal inspectorate. To be honest, the auditors of the Bank were not exactly popular. The audit team would show up at a branch – unannounced – lock it down, demand the

surrender of keys and instruments of authority, and begin the process of ensuring that all the books were in order, ledgers balanced, securities counted, and liability list prepared. At the departmental level, more notice was usually given, but the methods used were not only pragmatic and useful but also designed to strike the fear of the Almighty into the operations of the Bank! Auditors were exclusively equipped with the “auditor’s purple pencil” (pictured here). Nobody in the Bank was allowed to possess or use this colour pencil except the auditors. Therefore, any writing or notation in that colour (in reality, magenta) bore the authority of the Bank’s audit team. It is likely safe to suggest that magenta was the least popular colour among generations of Bank of Montreal employees! Popularity and efficiency, however, do not always go together. The inspectorate of the Bank was commissioned to submit factual, unbiased reports at all times and to encourage managers and accountants in maintaining proper training sessions for their staff. Some auditors, such as David J. Montgomery, a senior auditor in International Operations, got to travel the world to ensure that the same level of oversight was applied to the Bank’s international operations from the Bahamas to Seoul to London. The reality is that the inspector and corporate audit function provided a comprehensive picture of the Bank’s performance in the multi-faceted and increasingly complex world of banking. R.D. Mulholland, general manager of the Bank in the 1960s, noted “the dependence of the Executive on the independent factual reporting of each Inspector as the Chief General Manager’s personal respresentative.” They were the “eyes and ears of the Bank” inside the organization. The reports were frank and fearless – exactly the kind of report a serious executive would earnestly desire. The result has made and continues to make Corporate Audit a vital and sophisticated element of the Bank’s responsibility to its customers and its own future.

Reward Posters

T

he circulation of reward or wanted posters in nineteenth- and twentieth-century Canada were, quite simply, the most effective communication means that banks and the forces of order had to counteract crime. The poster would be disseminated in the community where the forgeries, counterfeit, or robberies took place. In retrospect, these posters have become not merely conveyers of information but also offer glimpses into the social and environmental landscape of the time. As one can well imagine, crimes against Canadian banks generated a great number of posters. Some of them were quite detailed in their descriptions, as the following reward poster for the arrest of Alexander Allan, forger , attests: Left Montreal on the night of 28th December. He is 40 years of age; about 5 feet 7 inches high; weight 165 pounds, medium stout, good build; sallow complexion, has the appearance of a hard drinker. Medium size moustaches and dark brown whiskers; hair on head in clind [sic] to be turning grey; full blue eyes; regular features; short chubby hands, and wears a plain gold ring on third finger of left hand; quick walker, nervous temperament; usually dresses plainly in dark coat and vest, small stripe pants and derby hat; wore a curb chain and locket suspended from the center of chain; is a pleasant conversationalist; has a slight Scotch accent. If arrested, charge with Forgery, and communicate with JOS. KELLERT Gen’l Supt. Metropolitan Detective Bureau 237 St James Street, Montreal Canada. 31 December, 1888. Some of the posters were issued by the police, while others were issued by Pinkerton’s National Detective

134

Th e BM O Un iv er se

Agency across their agencies. The Canadian Bankers Association (cba ) played a preponderant role in offering rewards leading to the capture of bank robbers. Between 1924 and 1950, the cba had paid rewards aggregating $253,203. Smaller towns were particularly

vulnerable because of the absence of police and the existence of good highways providing means of escape. The reward poster was one of the many instruments in attempting to bring criminals to justice.

GENUINE FR AUDS

Forgeries and Counterfeits

O

f banking’s deadly sins, counterfeiting surely must rank amongst the most pernicious and pervasive. Forgeries and counterfeiting have been around virtually as long as paper money itself. The problem has spanned the entire history of the banking system in Canada, and has cost untold hundreds of millions of dollars. The attempts of banks and the banking system to stay one step ahead of the counterfeiters have never fully succeeded. It has been called a ‘crime of creativity,’ where “the day you think you have the problem solved is the day you have a problem.” Its contemporary equivalent is bogus credit cards and debit cards. Indeed, the problem of counterfeit bills in the 1820s was so great that it commanded the attention of the Lower Canada legislature. The Bank of Montreal reported that its notes were frequently counterfeited, and thence withdrawn from circulation, and that it had “expended large sums in its endeavoures [sic] to suppress and break up gangs of Counterfeiters, and has withdrawn from circulation various issues that have been altered or counterfeited.” The production of counterfeit notes required a high degree of technical skill, an offset prress, and engraved plates. In the later twentieth century, technological advances from photocopiers to scanners and computers made the job much easier. By the early to mid-nineteenth century, the trade newspapers of the day routinely published discoveries of bad or counterfeit bills and their provenance – and the Bank of Montreal was, as a prominent Canadian bank, never immune to the attempt. The monthly journal The National Counterfeit Detector was published in New York for bankers and merchants in the United States and Canada. Banking’s information network had become elaborate, complex, and effective to counter the

counterfeiting menace. The network extended between banks and through organizations right to the teller’s position. The counterfeiting was only the beginning: forgeries, false or bad cheques, and bogus signatures were all part of the cat-and-mouse game with the criminal element determined to separate the bank and its customers from their money. “In recent years,” one Bank of Montreal teller manual suggested in 1965, “losses to the Bank through successful frauds and forgeries have been substantial. These attempts are often very skilful and their defeat calls for the constant vigilance of every teller.”

The art of the bank note got progressively more and more complex, with micro lettering, radial lines, planchettes, and a number of other special features designed to make it as difficult as possible to copy the real notes. But as long as counterfeiting is profitable – and it can be immensely profitable for organized crime – passing off what is false and worthless for what is true and valuable will continue.

b m o’s M ost Wa nted

135

PROVING WHO YOU REALLY ARE

Pinpads and Internet Security

I

n the late twentieth century, the advent of electronic banking initiated a revolution in customer convenience. In 1984, the Bank unveiled the Multi-Branch Banking card and a Personal Identification Number (pin ) for customers to access their accounts across the automatic teller machines. This was based on the magnetic stripe technology originally developed by ibm in the 1960s, which unleashed a world of new possibilities for a number of industries where identification and authentication was important. By the 1980s, the cards and their use had been standardized internationally and regulated by the International Organization for Standardization. Banking technologies were making banking simpler for customers, allowing instant access to multiple accounts – two features that distinguished the Bank of Montreal’s Instabank machine features from that of the competition in the mid-1980s. Protecting customer money had always been coupled with exploiting the possibilities that technologies could provide in the realm of convenience. Customers could now conduct most banking transactions on their own, such as cash withdrawals, making deposits, checking account balances, paying utility bills, tranferring funds, and getting cash advances. The emergence of the Internet and, in particular, Internet banking has added innumerable layers of complexity in order to unlock convenience for the customer. Here again, the security dimensions have rested upon elaborate information technology systems and, it would seem, more than a passing knowledge of one’s mother’s maiden name, favourite pet, and first school attended. The sheer range of transactions now possible from the Internet is impressive and growing every day, at a fraction of the cost these transactions once demanded. Putting that range of instruments into the hands of the customer – individual, small business, large enterprise – has facilitated a wealth of new cost savings and possibilities. Revolutions in convenience have typically meant parallel revolutions in protecting the wealth entrusted in the bank.

In Hoc Signo

200 Years of Royal Arms, Logotypes, and Trademarks

T

he Latin In Hoc Signo means “In this sign,” part of the phrase “In this sign you shall conquer,” which tradition traces back to Constantine the Great. The symbols and icons of the Bank of Montreal are among the most recognizable and most important design elements in Canadian history. The symbols – the seals, arms, and logos – tell a sometimes-complex story. Used as a significant system of communication, they embraced many different kinds of media – seals, letters, pins, coins, paper currency, and architecture, to name a few. The iconography of the Bank was its signature. Its symbols came to project authority, confidence, trust, and permanence. In the nineteenth to mid-twentieth centuries, when people regarded the coat of arms of the Bank of Montreal, they were looking at a history, a connection with city, region, and nation. Governments, garrisons, brokers, agents, businesses, agencies,

institutions, families, and individuals who did business with the Bank of Montreal all had an ongoing relationship with the institution linked in the most concrete way imaginable: through their own wealth and capital. The symbols of the Bank, the meaning the Bank’s people invested in those symbols, and the way people interpreted them over time were, of course, all influenced by the nature of the business and the relationships that defined the Bank. Above all, these symbols transmitted – and continue to represent – the earned reputation of Canada’s oldest financial institution. They also in some ways carry with them the values to which the institution aspires. These symbols over time are responses to questions that generations of Bank of Montreal people ask themselves: Who do we want to be? What values do we want to project? That ‘visual conversation,’ however, is not

one-way. Audiences and publics also have a say in how these images are received and interpreted, understood and acted upon. The symbols of bmo Bank of Montreal will have different receptions in Montreal, Toronto, Chicago, Milwaukee, and London according to reputation and experience. Today, the ‘brand’ has become one of the most valuable assets an institution can possess. As a result, the symbols of that brand have become some of the most precious and protected symbols in the corporate world. As we move into modern times, the changing symbols of the Bank point to how identity changes over time, and with the times. The nobility of the coat of arms gives way to more contemporary symbols – more abstract ones, such as the highly recognizable M-Bar – that capture the evolving nature of the Bank’s activities. The contemporary symbols strive to capture a more complex

corporate enterprise that makes up a diverse range of people and activities. The proud connection to place – Montreal, Canada, the North Atlantic world – gives way to more abstract representations that embrace a larger idea of time and space: colony to nation, nation to continent, continent to global reach. The vast expansion in the Bank’s activities, products, and services over the past 200 years is mirrored in the evolution of the symbols of the Bank. From the earliest manifestations of the Bank of Montreal’s symbols we see stability and change

138

Th e BM O Un iv er se

in identities, shifting values, and evolving meaning. We also see an evolution in aspiration and a transformation in what people respond to and what they belong to. The symbols and signs tell of a cultural fluidity across time. They tell a story. They really do stand out amid the constant flow of visual material we see, hear, and experience every day. For generations of Bank of Montreal people, these symbols and signs spoke and continue to speak of an important history, an engaged present, and a strong future.

T

AN EM ERGING IDENTIT Y

The Coat of Arms, 1837

he Bank’s remarkable original coat of arms has its beginnings and development in the fervid political and economic environment of Montreal in the 1830s. It was not only inspired by but also closely resembled the City of Montreal’s first coat of arms proposed by Jacques Viger in 1833. All the elements you’d expect to find are there in the city’s coat of arms: the fleur-de-lys of France, the rose of England, the thistle of Scotland, and the shamrock of Ireland. The beaver is a highly recognizable symbol of Canada, and also recalls the fur trade. At the base, a cornucopia represents the fruits of industrious labours, while two First Nations supporters, one in ceremonial dress and the other in hunting dress, grace either side of the coat of arms, acting as guardians. The Bank’s coat of arms preserves most of these elements, except the fleur-de-lys. The absence of the French could be justified somewhat on the grounds that the Bank was predominantly an Anglo-Scots institution. The political turmoil of the decade may offer another possible clue, as ethnic rivalries and republican sympathies would reach their culmination with the rebellions of 1837–38. The leaders of the Bank in the 1830s wanted the coat of arms to serve as a symbol of stability in troubled times, to recall the source and summit of their prosperity, to underline Viger’s motto – that prosperity flowed through harmony – and to pay homage to kith and kin through the bonds that united the British peoples. The success of the Bank in the North Atlantic world allowed its coat of arms to become a symbol for Canadian banking in that world. It also reinforced the Bank of Montreal’s connection to Canada, and vice versa.

In Hoc Signo

139

PROSPERIT Y THROUGH HAR MONY

The Coat of Arms, 1934

T

his logo is perhaps the most recognizable as symbolic of the historical Bank of Montreal. It is the armorial bearings of the Bank, or coat of arms. The bearing was granted by the College of Arms on 21 April 1934. The original coat of arms was an adaptation of the arms of the City of Montreal. The London, England, office of the Bank advised the Bank management in Montreal in the early 1930s that in London at least, armorial bearings not registered with the College of Arms had no official recognition. In addition, the design was all wrong. The First Nations supporters were reclining, something no supporter did in heraldry: supporters always stood. The beaver had to rest on something firm and not directly on the coat of arms. The oval shape of the original coat of arms was intended for “Dames, Misses and Eccelesiastics” – and not many of those were to be found within the Bank of Montreal upper management. There is a lot that meets the eye in this splendid coat of arms. The Bank’s origins, the provenance of its leaders, the sources of its wealth, and the perspectives of its management are all captured. The registered coat of arms features red bands crossing diagonally on a silver shield between the Rose (England), the Thistle (Scotland), and the Shamrock (Ireland). On the crest there is a Beaver (Canada) in natural colouring upon a maple log resting on a wreath or garland of silver and black. The supporters on either side of the escutcheon, or shield, are First Nations men.. The first is holding, in his outside hand, the “Calumet” or ceremonial pipe, and raising his other hand to his forehead to gaze into the distance. The second is in hunting dress, holding a bow

140

Th e BM O Un iv er se

in his outside hand. The motto, Concordia Salus, can be transliterated to mean, “In harmony there is safety or wholeness (or perhaps even prosperity).” The push to legalize the coat of arms of the Bank in the 1930s had less to do with the normal marketing preoccupations and more with the cultural preoccupations of the Bank’s management, its links to Empire, and its responsibilities and image as one of the primordial Canadian institutions. In other words, it mattered to the leaders and the people of this colonial Canadian bank

in the 1930s to ‘get it right’ for itself and the circles in which the Bank’s executive management circulated. This historical coat of arms is a product of a bygone era and a bygone culture. The absence of the fleur-delys, for example, would never pass today. To have any person – let alone First Nations representatives – “support” the shield on the coat of arms is inconceivable. Yet, the Bank’s coat of arms remains a remarkable historical artefact, statement, and symbol of a complex and original Canadian institution.

M ASS APPEAL

“My Bank,” 1946

I

n Canada, the end of the Second World War was met not only with relief at the cessation of hostilities but also with a fresh, new perspective on everything from markets to the role of the state to what Canadians had a right to expect as individuals and as a country. Postwar reconstruction also prominently featured a release of massive pent-up consumer demand, a new energy, and a renewed confidence in Canada’s future. The war, in other words, was a watershed for the country in so many ways. The “My Bank” logotype pictured here captures some of that new spirit. Its focus is at once individual and collective (it’s “My Bank” but it is that to a million, then 2 million, then 3 million Canadians as the bank tripled its customer base). In fact, one of the early prominent post-war campaigns was being a “No. 1 Citizen,” looking after No. 1. That did not mean ‘selfishness,’ but rather sticking to a five-point program of personal finances: (1) holding onto Victory Bonds; (2) buying only goods in fair supply and saving money; (3) avoiding black market purchases; (4) keeping up insurance; and (5) building up a savings account. The informality of the name “B of M” nicely contrasted with the more formal ways of Canadian banking up to the 1930s. An elite institution such as Canada’s first bank had to move with the times, to capture the zeitgeist emerging in post-war Canada. As banking focused on broadening its appeal to larger and larger publics, such a transformation was a necessity. “The Bank does not deal in money alone,” one 1946 advertisement reminded Canadians. The new logo also coincided with a transformation in the Bank’s public relations strategy to focus on a

broad appeal to Canadians. “In our day-to-day dealings, our managers and staff are [dealing] with the many human relationships arising out of the financial problems of our customers, both of large and small means, but particularly the latter, who seek assistance from a reliable and trustworthy source.” The new logo in many ways captured that new departure in postwar consumer outreach at the Bank of Montreal. The strategy attracted the public relations community’s commendation: the “Socrates High Award of the Year” for the best bank public relations. “It appears,” the award committee concluded, “that the Bank of Montreal has achieved a lasting scheme of forceful advertising … The Bank of Montreal has pointed the way. Its accomplishments deserve, at the very least, the careful study and consideration of similar institutions.” Its focus on demobilized veterans, for example, was seen not as a “gesture of heartiness which meant nothing to either bank or veteran. It was, on the contrary, a definite bid for the friendship of the generation who will be the leaders of Canadian thought and accomplishment in the near future.” The new post-war logo captured the Bank’s new post-war spirit: its strategy and its vision for a bank ready to extend itself to serve the needs of the post-war Canadian public.

DIAL M FOR MODERNIT Y

The M-Bar, 1967

T

he M-Bar logo was the brainchild of Hans Kleefeld of Stewart & Morrison Ltd, Toronto. Kleefeld was one of Canada’s greatest graphic designers of his day, giving logographic identities to key Canadian

142

Th e BM O Un iv er se

institutions, including Air Canada, Molson, Seagram, and Johnson & Johnson, not to mention the TorontoDominion Bank. The new logo was unveiled with great éclat by Chairman and ceo Arnold Hart in 1967 as “another major development being taken by the ‘new’ Bank of Montreal to advance our image of vitality and service.” The new look was to match the new outlook at the Bank, rendered in “First Bank Blue,” a strong light shade that became the official colour.

The introduction of the M-Bar was accompanied inside the bank with a certain impatience to reposition the Bank to a new, more aggressive, and contemporary posture. The revisions of the Bank Act in 1967 allowed the Bank to enter into the mortgage business. It launched into radio and television advertisements. Hart and his team reorganized management and began a series of transformations inspired by a key report on the Bank’s identity, strategy, and performance by McKinsey, which found the Bank too “stuffy.” Salaries were boosted. Incentive pay was rolled out. New business was actively and aggressively sought. Hart’s push to renew was more than welcomed by the Bank’s staff from coast to coast: Hart quipped that “our people seemed to be just waiting for some new policies” to rekindle the Bank’s innovative spirit of ‘first.’ This bracing spirit of renewal, of a rededication to excellence and innovation was symbolized by announcement of the M-Bar on the Canadian stage. It coincided with the Bank’s 150th anniversary, tying the acknowledgment of the past with the vision of the future. “Within the Bank, as well as to the public eye,” one internal Bank document suggested, “here is the symbol of an organization in which originality is welcome, staffed by people eager to provide the best and broadest service to individuals and to all enterprises regardless of size and degree.” Designer Clair Stewart once said that there were two things that made a corporate logo last: “it has to be designed well, and the company must be absolutely convinced that the design that’s being presented to them is just the right one for them.” In the case of the M-Bar, half a century of continuous and proud use has made it one of the most evocative and well-recognized symbols in Canadian enterprise.

FROM M ANY, ONE

bmo Financial Group’s Unified Brand

I

n June 2002, the Bank of Montreal and its group of companies came under a single, unified brand: bmo Financial Group. The new identifier incorporated several classic and contemporary elements, and the stock ticker symbol of the Bank, “bmo ,” was given prominence. The M-Bar logo was updated with a red roundel background.

This decision was in many ways a practical move by the Bank. The proliferation of companies and activities, products and services across North America required a graphic response that, on the one hand, recognized the diversity and, on the other, emphasized the unity under the aegis of the Bank. At the time, bmo Financial Group was operating more than thirty lines of business, including Harris Bank and bmo Nesbitt Burns, the Bank’s investment arm. As Chairman and Chief Executive Officer F. Anthony Comper remarked at the time, “The new bmo Financial Group identifier tells a unifying story for the bank and all its member companies.” The prefix – bmo – signalled that all the businesses operating under the

Bank’s seal would have the strength, resources, and values of the Bank of Montreal. The new name was the culmination of bmo ’s investments in integrating its many businesses and groups to provide more comprehensive customer service as well as to increase market share. The new logo/identifier was also coupled with an extensive dialogue within the organization to identify its key attributes and to rally around them, linking the new brand with the Bank’s efforts at renewal and transformation to meet both a changing marketplace and evolving customer needs and expectations.

In Hoc Signo

143

bm o Ba nker s a nd the Dre a m of N ation

T

he role of banks and banking in promoting national economic development is not always as straightforward as it might at first seem. The people who have studied such subjects in the North Atlantic world come up with different questions and different answers at different stages of development. For example, some ask whether the growth of commercial banking at the beginnings of the banking system is a result of the process of economic development, or was it a necessary element in the financial infrastructure? In other words, do banks lead or do they follow? This chapter points strongly to the “lead” hypothesis in the case of the Bank of Montreal and, later, the Canadian banking system. As Canada’s first bank, it was able to begin the process of increasing the pool of capital available to prospective borrowers. That capital could then be allocated to prospective borrowers professionally and efficiently. In the lending process, search, information, and transaction costs are all part and

parcel of the symmetry of saving and investing. The information networks and commercial relationships that the Bank established over long distances enabled Canadian capitalists to mobilize capital resources to finance a remarkable range of projects. The scarcity of locally available capital for most of the nineteenth century put an even greater emphasis on representation in the capital markets of the North Atlantic world. The importance of banking institutions such as the Bank of Montreal to the economic development of the country is significant not only for the capital flows it generated but also for the vital networks and relationships it was able to build both in Canada and in the AngloAmerican world in which it sought to develop and prosper. The building of a world-class financial and banking system for Canada is perhaps the greatest contribution to nation building. The nation-building projects highlighted here are representative of the many specific ways that the Bank has been a partner in facilitating and

promoting trade and economic development in Canada. The projects span the nineteenth and twentieth centuries. As one might expect of nation-building projects in a country with vast territories and a massive natural resource endowment, the projects are predominantly in the transportation sector – in the railways and canals that facilitate flows of people and goods, with the greatest coming in the 1880s with the completion of the transcontinental railway. Three are in the utilities sector – three of the greatest projects in the twentieth-century history of Canada: Churchill Falls, James Bay, and development of Alberta’s oil production capacity. Many of these undertakings were the product of the Bank, governments, businesses, and the community working together to realize a vision of an accelerated flow of trade and goods, a vision that could unlock the natural potential of the vast country. To varying degrees, the Bank was a vital player in allowing those visions to be realized.

Its contributions have been made not solely in the realms of capital but also in providing the vision, managerial capacity, financial expertise, and the talents and abilities for which the Bank of Montreal and its managers have become justly famous down the years. Because of the times and the circumstances, of borders and varying possibilities, the “nation”

146

Th e BM O Un iv er se

in nation building for the Bank has generally been north of the 49th parallel: Canada and its regions, its cities and towns, its people. As the Bank’s vision has come to embrace the American Midwest, there too it is pursuing an even greater and deeper presence.

HUM BLE BEGINNINGS

The Lachine Canal, 1821–24

C

anal building in the early nineteenth century was the key public infrastructure project of its day. The liberation of inland navigation was a top economic and trade priority in North America. In the United States, the building of the Erie Canal from Albany to Lake Erie would create a navigable waterway 4 feet deep between the Great Lakes and the Atlantic Ocean via the Hudson River. Canals meant trade and competitive advantage. They did much more than connect up trade flows: they were highways to prosperity and national supremacy. Visions of a canal at Lachine Rapids, just upstream from Montreal, had inspired navigators and traders from the days of the French ancien régime. The dream was to open up trade and exchange with the upper province. It was to remain a dream for decades – well past the British conquest of New France. From the 1790s, Lower Canadian merchants urged its construction. For imperial authorities, the War of 1812 had made the eventual construction of such a canal – and with it, seamless communication with the Upper Canadian frontier – a military priority. However, it was not until 1819 that the colony’s merchant class successfully petitioned the government to allow the formation of “The Company of the Proprietors of the Lachine Canal” with a capitalization of £150,000 divided into £50 shares. The imperial government held shares, as did the colonial government. The project was troubled from the beginning, and the government dissolved the corporation and took over the construction of the entire canal, with a key Bank of Montreal founder, John Richardson, as chairman. The canal was, in his words, “a work of great public importance and expectancy” – and, indeed, had been for decades.

The newly formed Bank of Montreal loans and advances were important to actually getting the longhoped-for project started. The involvement of this four-year-old bank was significant to the project and a considerable undertaking for the Montreal Bank itself. Work began under Richardson’s supervision in July 1821. The canal as originally built was 8.5 miles long, 28 feet in breadth at the bottom and 48 feet at the surface. It had seven locks of cut stone, each 100 feet long, 20 feet wide, and with a 5-foot depth of water. The Lachine Canal was opened in August 1824 and received its first vessels in 1825. The total construction cost of

£109,601, or $440,000, was borne by the government of Lower Canada (with a £10,000 grant from the British government). It was renovated, improved, and expanded in subsequent decades. The Lachine Canal project showed just how much of a struggle a public project could be in a country with few resources, scarce capital, and generally in competition against well-financed and prosperous competitors. It also showed how vital co-operation and collaboration was to attaining any measure of success. This project, like so many of its successors in Canada’s transportation and communications fields, demanded public and private partnership.

b m o B a nker s a nd the D r e a m of N ation

147

A NEW YORK STATE OF M IND

The Champlain and St Lawrence Railway

T

he Champlain and St Lawrence Railroad (c&sl ), commissioned in 1832 and completed in 1836, was Canada’s first railway. And Canada’s first railway, not surprisingly, pointed directly to New York City, underlining the enduring importance for Montreal merchants of continental connections and trade, especially with that rapidly growing metropolis. The new route would cut hours off the journey that they were compelled to travel. This railway project of the 1830s was largely financed by Bank of Montreal director and Montreal merchant John Molson. It is a perfect exemplar of the Bank’s early pragmatic and clear-eyed approach to large projects. The scope of the project was manageable: laying 16 miles of track that would then connect Montreal and New York City via the steamers on Lake Champlain. And it was manageable from a finance perspective. When it came to railway financing, the Bank’s leaders throughout the nineteenth century were tough, knowledgeable skeptics – in retrospect, a far-sighted position to take, since over-enthusiasm for railways, or real estate, or both at the same time, caused the ruin of many a bank. The railway was chartered in 1832 to run from La Prairie to St Johns, Quebec. It opened for traffic with horses in 1836 and with locomotives in 1837. The c&sl also featured British North America’s first locomotive, the Dorchester, built by Robert Stephenson in Newcastle upon Tyne and delivered to Molson’s wharf

148

Th e BM O Un iv er se

in June 1836. The top speed of the locomotive was about 30 miles per hour. The opening festivities of 21 July 1836 were reported in the Montreal Gazette: “The public opening of this important route took place on Thursday last under circumstances of peculiar interest … Among the guests who assembled on board the ‘Princess Victoria’ at about ten thirty a.m. were the Earl of Gosford, Sir Charles Gray, Sir George and Lady Gipp, Mr Elliott secretary of the Commissioners, and several of the Legislature Council and House of Assembly, also, a number of the mercantile body and garrison and many respectable strangers to the number of about three hundred.” The c&sl was in many ways a sensible Canadian project ahead of its time: modest in its reach but serving a distinct and productive purpose.

MONTREAL’S “ VICTORIAN INTERNET ”

The Telegraph

T

he telegraph was the first of the electrical communications technologies that would slowly transform the world’s telecommunications landscape. If it wasn’t quite the “Victorian Internet” envisioned by contemporary author Tom Standage, the telegraph heralded a remarkable transformation for the coordination and organization of business and government. The technology was in development for decades in the North Atlantic world. In 1844, Samuel Morse organized a company to erect a telegraph line linking New York City, Baltimore, and Washington. The information and

control processing revolution ushered in by the electric telegraph would initiate a long-wave transformation in the way people interacted with each other. In the first generation, however, it is most useful to think of the telegraph as a tool of business communication. The transformational possibilities for banking – and Canadian colonial banking in particular – were evident from the outset. Until the 1840s, top-speed communications across the imposing geography – even of southern Ontario and Quebec – were limited first to the fastest horse, then increasingly to primitive locomotives on developing networks of railways. The telegraph would usher in a new, more connected era. The Bank’s leaders in the 1840s certainly believed that, granting a £2,000 loan to the Montreal [Magnetic] Telegraph Company. In fact, without private capital, the project would not have seen the light of day. The Montreal Telegraph Company was formed December 1846, with a capitalization of £12,500, for

the purpose of connecting Toronto to Montreal by electro-magnetic telegraph. Its first superintendent was O.S. Wood, the first pupil of inventor Samuel Morse. By mid-October 1847, the telegraph would cover Quebec City to London, Canada West. By the end of 1847, the company had completed 540 miles of lines, established nine offices, and transmitted 33,000 messages. The following year, a line was completed to the United States. Business was prosperous enough for the Montreal company that in 1852 it bought out the Toronto, Hamilton, Niagara and St Catharines Electro-Magnetic Telegraph Company, Canada’s first telegraph company. For the first time, communication and transportation could be separated. Breakdowns and interruptions were frequent; the ungalvanized iron wires sometimes broke from the weight of flocks of wild pigeons roosting on them. Moreover, short-circuits were common in wet weather. As the network grew and the technology improved, the full power and potential of the telegraph began to show itself. It changed, forever, social and commercial relationships. In the memorable words of James Carey, it “allowed symbols to move independently and faster than transportation.” Merchant-to-merchant relationships became buyer- and-seller relationships. The vastness of geography was reduced. Communities began to be tied to regions and nations in terms of ideas, language, and style. Communication with distant places, ideologies, and ideas became not only possible but also accessible. In a metaphoric sense, the telegraph allowed many Canadian communities to join the nineteenth century. The telegraph also revolutionized business, spawning the first great industrial monopoly – Western Union – and founding the electrical goods industry. The challenging complexity of the telegraph as a network, a system, together with the railroad, led to modern management techniques. Steamboat, railroad, telegraph: three nineteenthcentury revolutions in transportation and communication. In different ways, the Bank of Montreal both shaped and was shaped by all three.

b m o B a nker s a nd the D r e a m of N ation

149

A M ARE USQUE AD M ARE

The Canadian Pacific Railway

T

he national project of binding together the vast transcontinental expanse of the new Dominion of Canada from sea to sea by rail was one of the most ambitious and risky in the history of the country. On 21 October 1880, the Canadian Pacific Railway Company (cpr ) signed a contract with the federal government to build a railway across the Canadian prairies and to the Pacific Coast. It was to be completed by 1890 to fulfill a condition of British Columbia

150

Th e BM O Un iv er se

entering Confederation: connect us to the rest of the country by rail. This archetypal nation-building project was highly controversial and derided in the press as a useless enterprise, an “out-and-out impossibility” from an engineering perspective, and sure to be one of the great blunders of all time. In payment, the cpr was to receive $25 million in cash, 25 million acres of right-ofway, $37 million for surveying costs, and a twenty-year monopoly over transportation to the United States. From every angle – political, economic, financing, capital, engineering – the project of Prime Minister Sir John A. Macdonald, J.J. Hill, George Stephen (president of the Bank of Montreal), Donald Smith (a later Bank president), and other key players would be visionary at best, delusional at worst. One London observer warned

in 1881 that “Canada is one of the most over-rated Colonies we have, but it is heartily loyal and makes its loyalty pay … as for the country as a whole it is poor and crushed with debt. The Supreme Government owes about thirty-five million pounds altogether, and every province has its separate debt, as also almost every collection of shanties calling itself a ‘city.’ The Canadians spend money and we provide it. That has been the arrangement hitherto, and it has worked out splendidly – for the Canadians – too well for them to try another scheme with the Canadian Pacific, which they must know is never likely to pay a single red cent of interest on the money that may be sunk in it.” In spite of the naysayers, in November 1885, the cpr succeeded in linking tidewater to tidewater across the Dominion of Canada. The unprecedented complexity of the project – and its controversial nature – called for the full capabilities of a young country, its institutions, and its sharpest managers. The project was managed by W.C. Van Horne, whose workers sought to overcome some of the greatest engineering challenges of the day through the Canadian Shield and the Rocky Mountains. The project was driven by business-politicians, railway promoters, and Montreal capitalists. The Bank of Montreal not only provided Canadian financing for the construction of the railway but was also deeply involved in the broader complexities of raising capital both in the United States and in the United Kingdom, from where most of the capital would, by necessity, flow. In addition to capital resources, George Stephen left his duties as president of the Bank of Montreal in 1880 to take on the presidency of the Canadian Pacific Railway. The last spike of the railway was driven in on 7 November 1885 at Craighellachie, in Eagle Pass, British Columbia, by Lord Strathcona, producing perhaps the most iconic photograph in the history of Canadian enterprise. The completion of Canada’s transcontinental railroad ushered in a wealth of new possibilities in trade, tourism, immigration, and economic development that were simply impossible without that vital nineteenth-century connection from sea to sea.

Ward M , Montreal General Hospital, Montreal, Quebec, 1910. Photograph by Wm. Notman & Son

Montreal General Hospital and the Development of Civil Society

T

he destinies of the Bank of Montreal and the Montreal General Hospital were intertwined from the beginning of the hospital in 1821. Most of the hospital’s founding managers and governors – Armour, Garden, Gates, Gerrard, Leslie, Moffat, Molson, Richardson, Turner, and others – were intimately involved in the Bank’s activities. John Richardson, however, stands out as ‘father of the institution.’ He was

its first president; he played a leading role in supplying the necessary land as well as taking on financial debt on behalf of the struggling hospital. The establishment of the hospital took place in the context of a growing health care crisis in Montreal. The Hôtel-Dieu de Montréal was established in the mid-seventeenth century, but by the 1820s, it could not hope to accommodate the growing population with thirty beds. The city divided between those who wished to have a new hospital and those who wanted to enlarge the old one. The battle became quite personal, and a duel ensued between Dr Caldwell (pro Montreal General) and Mr O’Sullivan (a proponent of the Hôtel-Dieu). Both men were injured but survived. The contentious nature of the plan meant that official support would not be forthcoming. Therefore, money was raised by public subscription. In a full Masonic ceremony, the cornerstone of the new hospital was laid on 5 June 1821 by the officials of the three Masonic Lodges of the city – St Paul’s, Union, and Wellington Persevering – and the Building Committee. The permanent Montreal General Hospital opened its doors in May 1822. In 1823, Dr Caldwell and his colleagues established the Montreal Medical Institution – the forerunner of the Faculty of Medicine at McGill University. The Montreal General Hospital has the distinction of receiving the first corporate donation offered by the Bank – £100 – thus beginning a long and close association with this venerable Montreal institution. This early ‘nation-building project’ was modest by contemporary standards, but the contribution of the citizen-bankers of the Bank of Montreal – with time, talent, organizational capabilities, and both personal and corporate money – was consistent with the desire to build and develop civil society and its institutions. Health care and hospitals in the nineteenth century were only starting to take their rightful place in the urban life of the country, and the Bank and its people were full participants from the outset.

b m o B a nker s a nd the D r e a m of N ation

151

OVERCOM ING THE NIAGAR A BARRIER

The Second Welland Canal, 1850

T

he Welland Canal was first opened in 1829 after five years of work cutting through the Niagara Escarpment. The objective was simple: connect Lake Erie and Lake Ontario and offer some competition to the Erie Canal. Looking at a map, it is clear why nineteenth-century Canadians were particularly

152

Th e BM O Un iv er se

interested in Welland: it provided one of the main links in the chain of water transportation extending from Thunder Bay (then Fort William and Port Arthur) to the Atlantic Ocean – 2,200 miles – later nicknamed the “Grain Lane to Europe.” Canal construction was shorthand for expanding markets and increased trade, not to mention naval security. For Ontario, canals also meant reducing its dependence on American transport routes and tariffs to get produce and goods to Montreal. One enthusiastic observer suggested that the Welland Canal was “the lung of Canada, carrying commerce into our arteries and remote veins, expelling our goods, our wheat, our minerals.” Another observer suggested that Lake Ontario, locked in with rapids at either end, “has been unlocked by triumphs of engineering.” In 1841, the newly minted United Province of Canada took over the ownership and management of the canal as part of a broader strategy to renovate the Great Lakes and St Lawrence system of navigable waterways. Financing construction was the major problem, given that the colonial governments were practically bankrupt or unable to mount the project. But the Second Welland Canal project was initiated, backed by a London-based loan of £1.5 million and guaranteed by the imperial government. The Bank of Montreal’s role was in the active provision of advances to contractors pending the collection of claims, thus ensuring the project’s completion. The enlarged, deepened, and updated Second Welland Canal was opened for traffic in 1845. It enabled sailing vessels of 750-ton cargo capacity to pass from lake to lake. Subsequent improvements were made in 1887 and in 1933, each time to facilitate larger vessels. The Welland Canal was part of a chain of first-class canals that provided a complete system of St Lawrence waterways linking Lake Erie to the Atlantic Ocean. The mobilization of the massive public and private resources required to complete this task was, in many ways, a clear, unambiguous vote of confidence in the future of the region and in Canada as an emerging nation.

HARNESSING THE R AW POWER OF NATURE

brinco and the Churchill Falls Hydroelectric Project

O

n 17 July 1967, the massive $800 million British Newfoundland Corporation (brinco ) hydroelectric project was inaugurated in Churchill Falls, Labrador. It was the largest hydroelectric power development of its kind on the continent, set to produce 34 billion kilowatt hours of energy annually – enough, it was said at the time, to supply 10 million households. Once again, the Bank of Montreal was the chief project

financier to brinco , heading up a consortium of Canadian banks. The funding for Churchill Falls was $150 million. Like many previous Bank of Montreal projects in this chapter, the cash was guaranteed for construction and development until the project started earning enough to pay its way. It was cited as the “biggest bank financing venture in Canadian history” to that point. The Churchill Falls development was a highly complex project with more than its fair share of challenges. Commercial and political arrangements delayed it by two years, until May 1969. The ceo ’s sudden death in the middle of this turbulent time and a railway strike had a dramatic impact on timetables and costs. In November 1969, the president of the company and five others key to the management of the project died in a plane crash in Labrador. That same year, new taxation regimes and a floating Canadian dollar added multiple millions to the project costs. The management overcame the difficulties, and by December 1971, the first two units in the generating facility were spinning. On 1 May 1972, commercial service began as scheduled. One of the great achievements of this megaproject was the taking on of large financial commitments spanning a long period of time. As W.D. Mulholland suggested in the 1970s, this can be a “risky business and there are a number of chilling examples of this.” He spoke from rather personal experience, since he was compelled to take over the leadership of brinco after the Labrador plane crash. At the same time, he saw – as did the Bank – that it was important that financial institutions develop the techniques for carrying out these kinds of projects successfully. Churchill Falls was a great example of the Bank’s leadership in responding and adapting to the banking opportunities in the era of the financing of Canada’s great natural-resource megaprojects.

b m o B a nker s a nd the D r e a m of N ation

153

Hydro-Québec James Bay Development

I

n the late 1970s, the Bank once again put together a landmark financing deal as the head of a seven-bank consortium to underwrite the biggest corporate loan in Canadian history: $1.25 billion credit with HydroQuébec for the development of James Bay (Phase i ). Phase ii would come a decade later. The James Bay hydroelectric project was a monumental undertaking. Phase i cost $13.7 billion and diverted the course of three rivers to reservoirs on La Grande Rivière, increasing the flow from 449,000 to 872,000 gallons per second. The spillway was three times the height of Niagara Falls. The development boasts North America’s largest power-generating site: it can crank out 7,722 megawatts of electric power annually! In all, four power-generating sites were established between 1978 and 1984. The collaboration of six other Canadian banks as well as twenty-two foreign banks was coordinated by the Bank of Montreal as lead manager. Here again, it was W.D. Mulholland who would lead the charge, noting at the time that the Bank’s role “demonstrate[s] our ability to compete and succeed in major financings against the toughest competition.” The James Bay development, according to press accounts, was “the biggest credit facility ever afforded a private, public or para-public company” and “undoubtedly one of the great success stories of 1977–78,” not to mention “a good deal for both the borrower and lenders.” The financial specialization in energy projects grew in tandem with Canada’s increasing international specialization in the sector.

154

Th e BM O Un iv er se

A Leading Continental Banker to the Oil and Gas Industry

T

he Bank has been a partner in the development of the Canadian oil and gas industry through its genesis and development. In the process, it has become one of the leading banks in the sector in both Canada and the United States. The importance of the oil and gas sector to Canada’s twentieth-century economic history and prosperity, especially that of Western Canada, cannot be overstated. But it is also complicated. The industry is characterized by high capital investment, cyclical growth, and price volatility. Financial institutions in the field need to have specialist knowledge and capabilities to manage the risks associated with oil and gas development and to exploit the most attractive financial opportunities. The Bank’s Oil and Gas Department was established in 1962 and quickly established a strong record in translating expertise in the industry and banking to advantage. Project financing for the sector has included some of the major deals of the 1970s. By the 1980s, the Bank ranked in the global top ten for syndicated loans to the oil industry – the only Canadian bank in that select group. Some of the Bank’s key future executives would pass through this department on their way to leadership positions in the Bank. One of the largest projects the Bank has been associated with is the Alberta oil sands – the world’s third-largest proven oil reserves after the Kingdom of Saudi Arabia and Venezuela – with an estimated 1.84 trillion barrels of crude bitumen, which translates into 168.7 billion barrels of oil. The Athabasca, Cold Lake, and Peace River areas of northern Alberta set the stage for this massive group of reserves. The development of what has been called the world’s “first oil mine” was first opened in 1967 by Sun Oil (Suncor), followed by Syncrude in 1978.

M a rkets of the M ind

bmo Advertising and the Art of Persuasion

T

he emergence and development of advertising in the industrialized world is a fascinating and complex story. As we see with the Bank of Montreal, the field has grown and developed with the rise of consumer culture. These developments have been shaped by needs and necessity: new and expanding markets need to be reached and persuaded. Where there are markets, there is also competition: advertising and promotion thus becomes a vital element in ensuring that an institution’s efforts are highlighted, recognized, and appreciated. Advertising also seeks to connect, persuade, and motivate. It is, in fascinating ways, a type of public discussion. It speaks, of course, to corporate strategy, performance, and positioning as you would expect it to. It also speaks to our contemporary aspirations, what we value, how a generation of advertising people believe is the best way of connecting with their customers and the

broader market – and in that regard, our assumptions about the way the world works, and how to create and perpetuate that bond. At one time confined to print, the emergence of first radio then television broadcasting, and then of course online marketing, exponentially raised the reach and elevated the importance of advertising. The Bank, of course, has advertised since the beginning. For most of the nineteenth century, that consisted of newspaper advertisements showing annual report statistics and hours of operation – and frequent references to the Bank of Montreal being Canada’s first bank. In the 1920s, the Bank established an advertising department that prepared advertisements for newspapers, magazines, and the like, “but is concerned with many forms of publicity in connection with the relations between the Bank and the community.” The publicity focused on a wide range of subjects – business

summaries, appointments, crop situations. Publications in the 1930s like “Canada To-Day” and “Your Bank and How You May Use It” were meant to promote knowledge of the Bank and to establish “friendly relations with possible customers, a new generation of which is constantly arising,” in the words of F.W. Munro Brown, head of the Bank’s advertising in the 1930s. In that decade, for example, strength, stability, and “prestige copy” dominated, to ensure that people remained confident in the Bank during the Depression. The “services” copy focused on the products, services, and methods of doing business. “Advertisements must have about them,” one official suggested in 1931, “a certain distinctive atmosphere, and this is accomplished not only in the formulation of the general advertising plan and tenor of the text, but in the physical appearance of each advertisement.”

By the end of the Second World War, the Bank won the “Socrates High Award of the Year” for their advertising related to the battle against inflation and “the Bank’s role in building the postwar world.” The Bank was hailed as “the leader in bank advertising – and the executive responsible, the most valuable member to his field.” The award citation suggested that “Banking is, after all, dependent on the good will and respect of intelligent people. Bank of Montreal copy could never be called ‘cute.’ Nor, on the other hand, is it ever ‘stuffy.’” In the last half-century or more, the advertising world has become a terrain of institutional mammoths, large agencies, and boutique shops. But a perspective from the 1930s still holds: “Try to look at the Bank’s advertising, in whatever form it may appear, as designed to help you in promoting the business of your branch … to show him the advantages of banking with our Institution and, if he is

158

Th e BM O Un iv er se

not already a customer, to put him in a receptive mood so that when he comes in contact with the staff the work of securing him as a customer is half done … [making advertising] live up to the Bank’s service and to present that service in its true form to the public.” One advertising award citation back in the 1940s suggested that “the effective balance of dignity and alertness … typify Bank of Montreal advertising” and that the Bank “has pointed the way.” This chapter highlights some of the more interesting or memorable advertising campaigns in the Bank’s history. Its gaze is mainly directed to the last couple of generations of the Bank of Montreal campaigns – the slogans and approaches that deserve particular mention. Undoubtedly, this short list does not quite do justice to the advertising history of the Bank. Rather, it will provide an enjoyable tour through the past to whet the appetite.

M AKING IT PERSONAL

My Bank Emerges, 1940s

T

he simple yet enduringly effective “My Bank” formulation was introduced after the Second World War. The tagline then became over the following several years: “My Bank to One Million Canadians” – then two million, then in short order, three million Canadians. The thrust of advertising to embrace the mass market had been coming for some time, but changes in Canadian banking in the 1930s and 1940s pointed banks firmly in the direction of broadening their appeal to a much broader market of depositors. After 1945, Canadian banking crossed a clear line and began, step by step, to throw off the vestiges of its nineteenth-century past – in its messaging, architectural and interior design, advertising, publicity, and publications, not to mention its approach to markets. Strong economic growth and the steadily growing incomes and purchasing power of the parents of the baby boom generation began to change many things, and not just banking and advertising. The My Bank taglines were used for two decades and considered “landmarks in the personalization of banking institutions’ services presented meaningfully to the public.”

Some quick statistics will offer an idea of the change. In 1947, the Bank operated 521 branches; by 1957: 725; and by 1967: 1,033. Deposits in 1947: $1.7 billion; 1957: $2.6 billion; and 1967: $5.6 billion. A similar story can be told with loans. The basis for banking was broadening out. A labour, societal, and consumer revolution is hidden in those simple post-war numbers. My Bank emerged from that post-war sense of the great possibilities that Canada had in store. Fast-forward to 1999: newly appointed ceo Tony Comper wrote in the annual report that “those bus ads [with the My Bank slogan] from the sixties kept pushing back into my consciousness, reminding me of what really counts in building a bank for our time.” Accordingly, Comper briefly resurrected the tagline for a couple of campaigns of the era. The afterlife of My Bank and its enduring appeal to successive generations is a testament to the powerful, compelling simplicity of the message.

M a r ke ts of the M ind

159

FIRST MOVER ADVANTAGE

Canada’s First Bank, 1950

“I

n order to form a link between the Bank’s premises and its advertising,” a Bank of Montreal memorandum suggested in September 1950, “it has been decided to introduce the slogan ‘Canada’s First Bank’ in our window and hanging glass signs.” So began the official introduction of an important and enduring advertising slogan. The phrase recalled the Bank’s lasting historical importance to young Canada, before it was even a country. Moreover, it had all the right attributes, projecting as it did the strength, stability, and solidity of an institution that in many ways defined Canadian banking. Some runners-up that were road-tested but never used for long included “Canada’s First-Established Bank” and “Canada’s Oldest Bank.” One can see why these were not used for long! The tagline was accompanied by another historical reminder: “Founded in 1817,” a subtle change from “Established in 1817.” It was made to conform with the

160

Th e BM O Un iv er se

Bank’s post-war advertising and was seen to be a gentler and more sophisticated rendering of the idea. The slogan proved popular and durable – so much so that, when the Bank’s famous new symbol – the M-Bar – was introduced in 1967 and the entire range of identification of the Bank was standardized, the slogan was prominently incorporated in the new arrangements. As Elliot J. Morrison suggested in a memorandum on the subject of corporate image in 1966, the Canada’s First Bank slogan carried with it an important message about the identity of the Bank itself. It was part and parcel of the Bank’s abandonment of the colour green as its principal house colour, substituting a lively, vibrant blue, which was immediately referred to as “First Bank Blue.” (For more information on the Bank’s logos, see In Hoc Signo, pages 137–43.) While other slogans and taglines waxed and waned with time, Canada’s First Bank persisted. One executive suggested that since it was the Bank’s first claim to fame, it would also serve as its “most effective tool in reinforcing its unique position in the country … a statement of fact and pride! First historically and first in aspiration to serve Canadians everywhere with the most efficient banking services.”

First Canadian Bank, 1969

B

y the end of the 1960s, Canada’s First Bank was morphing slightly into “First Canadian Bank” or simply First Bank – the same idea, but offering wider possibilities for the Bank if it wanted to change its proper name. As early as 1969, Bank executives were contemplating a possible name change, particularly in markets in the United States and areas of anglophone Canada. This was part of a larger trend in advertising to de-emphasize territoriality and underline other features. This industry-wide trend also saw the shortening of “Bank of Montreal” to “B of M” or “BM,” and then eventually, of course, to bmo . The name of the Bank was never changed, but the tagline stuck around in the 1970s, memorialized by the fact that the Bank’s Toronto headquarters are in First Canadian Place. Throughout the 1970s, the appellation First Canadian Bank was used in some places but not consistently, it would appear. It surfaced, for example, on the covers of the Bank’s annual reports from 1971 to 1977. In 1978, a return to the Bank’s coat of arms put an end to appearance of the phrase on annual reports. Generally speaking, First Canadian Bank appeared to be popular until the early 1980s. The linkages to both time (the first) and territory (Canadian) were gradually being replaced by the memorable symbol and acronym that is universally recognizable today.

M a r ke ts of the M ind

161

Let’s Talk, 1971

“L

et’s Talk” was introduced in the early 1970s as an invitation to discuss the Bank’s products and services – mortgages, loans, travel services, and the like. It was used alongside the M-Bar and the First Canadian Bank identifications. The executive responsible suggested that this advertising campaign was “a statement of our feeling as well as a reflection of the Bank’s customer philosophy. The old adage that Talk Is Cheap is one of the great fallacies of all times. It may be the most valuable commodity we have in our possession.” The intention of the campaign was to find new ways to open up to the needs, wants, and aspirations of the Bank of Montreal customer. In this era, the Bank’s branches were given a certain level of autonomy over the choice of message, displays, and decorations in-branch. However, standardization and control over advertising efforts began to become more systematic in this period. The radio advertising campaign featured Leslie Nielsen, a popular actor and comedian of the day, doing the voiceovers. By 1980, the Let’s Talk tagline quietly faded from prominence, having served its purpose and having emphasized the importance of listening to the customer.

SETTING BMO APART

Doing More for You, 1985

I

n April 1985, the Bank launched a nationwide “unique customer service advertising campaign” to unveil a new slogan and a new emphasis: “Doing More for You.” Developed by Carder Gray Advertising of Toronto and, in French, by Publicité Martin Inc. of Montreal, the slogan’s introduction was the product of two years of research involving surveys of customers and Bank staff to identify how the Bank could evolve with the people it served. What did “doing more” mean? To the Bank of the 1980s, it meant more and more of a focus on five customer service needs: (1) to be treated with courtesy and understanding; (2) to be served promptly and efficiently; 3) to get reliable information on personal finances; (4) to feel confident in the Bank’s professionalism – the way it looks and the way it works; and finally, (5) to know the manager is accessible and willing to help. The new slogan was accompanied by a massive training program, guidebooks, and training modules and workbooks. Videocassette players were delivered to branches to permit staff to use the materials. The training also came with an accreditation: the Customer Service Certificate of Achievement. The slogan was emblematic of a major transformation in the way the Bank wished to serve its customers, and in the words of the executive responsible, Matthew W. Barrett, it represented the “beginning of a long-term effort to emphasize a strength we take pride in.” The April 1985 launch involved two 30-second television commercials aired in markets across the country, followed up by magazine advertisements and other print media.

M a r ke ts of the M ind

163

We’re Paying Attention, 1991

I

n May 1991, the Bank launched a new image campaign – one that had emerged from the landmark Corporate Strategic Plan (see The Written World of bmo, page 37). Therefore, the slogan “We’re Paying Attention” represented an important public declaration of the direction of the Bank under Matthew W. Barrett and F. Anthony Comper. In some ways it sought to break away from the past, signalling that “Canada’s oldest financial institution” would take “a radical departure from conventional bank advertising. The theme of paying attention (and for the Francophone market “Au delà de l’argent, il y des gens”) was developed after a year of intensive research that polled Bank employees, customers, and the public. The “customer of the 1990s” demanded more of everything, especially superior customer service. The focus on customer service was in a sense carried over from the 1980s, but there was an urgency and a fresh emphasis on broadening and deepening that commitment in light of the major new strategic direction the Bank was taking in the early 1990s. “Excellence in customer service is not something new at Bank of Montreal,” Tony Comper wrote in April 1991. “But for the first time we are going to talk openly about it to Canadians. Our new image campaign will stand out from any other bank advertising in the country, and will place us first in our customers’ minds.” The creative element of the new campaign and slogan was executed by the Bank’s two advertising agencies, Vickers & Benson and Publicité Martin. Three initial English advertisements focused on three themes. The first was “Vision” – to introduce the world to the Bank’s commitment to change for the better and its promise of bringing service back to banking. The second element was “Employees,” featuring Bank of Montreal employees discussing their increased participation within the new strategy, as well as their

164

Th e BM O Un iv er se

individual approaches to superior customer service. The third element, “Customers,” focused on customers sharing their views on what set Bank of Montreal apart from and above other financial institutions. The bracing freshness of the approach struck a chord with both customers and employees alike: “Banking is perceived as a very large and sometimes faceless

operation,” one voiceover in a commercial suggested, “That’s what we’ve got to change … I think banking’s a customer business, a people business.” And another: “We want to walk around with pride, and we’re starting to do that.” That, in essence, is what the Bank was paying attention to: their customers, their employers, and the increasingly personalized nature of banking.

It Is Possible, 1994

T

hree years after We’re Paying Attention came the related theme of possibility. “It Is Possible” was launched in May 1994 in twenty-eight regional centres across Canada, to ensure that the national campaign was also a local community campaign. It was accompanied with a public launch of The Possibility Network, which aspired to being more than a marketing initiative: to telegraph clear messages of hope and

confidence in the sometimes-challenging economic climate of the early 1990s. The new slogan was accompanied by a “no-charge planning” service for customers. “The new program will involve a free consulting service for customers and non-customers alike, provided by panels of people across the country.” The Bank would then formulate a personalized package of information about how a panel worked through similar challenges

to the ones presented by the client. The extraordinary initiative underlined the theme of how the Bank could unlock both individual and community possibility. The campaign featured stark, surrealistic settings – a dystopian picture if ever there was one – with a prosecutor taunting and cross-examining a caged man on trial about his faith in the future. The “defendant” testifies that he can indeed pay off his mortgage, cover the cost of his children’s education, and have a winter vacation in the sun. That, in essence, is what is possible: financial freedom, and especially faith in the future. The campaign was an instant hit for its boldness and willingness to break the banking mould. To an unusual degree, the slogan seemed to capture the élan of the Bank of the 1990s, and its willingness to strike out in new directions. The massive press coverage was a testament to its success: inside and outside the Bank, people hailed the campaign as a “marked new way for doing business.” The It Is Possible campaign won Matthew Barrett, chairman and ceo , the “Sales and Marketing Executive of the Year” award for 1995. In typical Barrett style, he began his acceptance speech by noting that it took an “unusual amount of courage, if not foolhardiness, for a selection committee to pick a banker for any marketing award, let alone such a prestigious one. Talk about flying in the face of conventional wisdom!” Barrett explained that this effective marketing was successful because it was “consonant with the prevailing competitive structure and environment.” His predecessors, he argued, were also effective marketers with approaches appropriate for their era that, “if followed today, would bankrupt the contemporary bank in no time at all. So, as we applaud past laurels, let us not rest on them. These days in the banking business if you snooze, you lose.” For Barrett and the Bank of that era, marketing was not just part of the corporate strategic plan: it was the strategic plan. This campaign and the previous one were part of a thorough transformation of the Bank’s marketing philosophy to one deeply attuned to the pulse of the customer.

M a r ke ts of the M ind

165

Making Money Make Sense, 2008

166

Th e BM O Un iv er se

T

he “Making Money Make Sense” campaign was produced in 2008, when the Bank, under the leadership of William A. Downe, was engaged in effecting a radical transformation in the minds of customers. As Downe explained, “it led us to a series of insights that we ultimately were able to capture in a single line: Making money make sense.” The campaign was at least in part inspired by the Bank’s Quebec market brand promise: “Ça a du sens. Profitez.” The thrust into new markets, and the insights so generated, gave a deeper meaning and expression to that basic message of giving customers confidence to make the kinds of decisions they needed to make for their futures. The campaign was “partly about the words, but more importantly it was about the feelings of affection and loyalty that we were trying to evoke by tapping into everyday life,” Downe suggested in 2013. The search for a crystallizing, unifying phrase – one that captures strategic vision of the Bank, inspires employees, and connects to the needs and aspirations of existing and prospective customers – is never easy. In many ways, the 2008 slogan, like the taglines before it, captured the zeitgeist of the millennium’s first decade – at a time when money, as well as capital, and its system manifestly made less sense than it had for a long time. The global financial crisis was the worst since the Great Depression. Canada may have felt it markedly less because of the stability of its banks, but clearly it was a time when clarity, sense, and insight of the kind offered by seasoned bankers was in great need. For many, banking and investing are of such intimidating complexity that clear sightlines and greater understanding become priorities. The aspiration was to have bmo “offer simple answers to the financial challenges and decisions faced by individuals and businesses … by removing confusion and complexity from the world of money.”

We’re Here to Help, 2014

T

here is a narrative or thematic arc that unites all of the taglines of the last three decades: the emerging supremacy of the customer and the customer experience. Each era has defined it somewhat differently, but there is a clear, bright line that brings together the four campaigns. The spirits of those different ages demanded different areas of focus touching on the progressive stages of a relationship – understanding, thinking about possibilities, making things clear and simple. The current tagline – “We’re Here to Help” – therefore, has a long pedigree. This current simple but powerful tagline can claim a dual heredity: for years, Harris Bank in Chicago used it as an expression of its regional brand; at the same time, it was seen as a natural development of the Canadian bmo brand. The alignment was natural – and timely – as Canadian and US brands started to move closer to the expression of a single bank under the bmo banner. The new tagline put bmo ’s people at the centre of the bank. In the words of ceo Bill Downe: “It implicitly acknowledges that people’s financial lives may be imperfect and sometimes challenging, and in the same moment it reassures them that we’re uniquely qualified to provide the solutions they’re looking for.” The focus now was on the personal – and bringing the human touch to the business of banking. “Human, Intuitive, One Bank – these aren’t words that will ever appear in an ad,” Downe announced in October 2014. “But they’ll guide us as we build our brand from this point forward.” The campaign was a creation of y&r , the Bank’s creative agency of record. Here again, there are continuities with the heavy focus on financial guidance and

customer service. For the first time, however, the “focus and brand promise” was meant to appeal to consumers across North America – including bmo ’s 2 million US customers with 600 branches across eight states. The strategy remained the same, but the expression was different. The evolution of taglines and campaigns represent a relentless quest to maintain that precious alignment

between what the Bank aspires to do and what customers perceive it stands for. In the words of Joanna Rotenberg, bmo ’s then-chief marketing officer, “At the end of the day, we know if we are successful if we bring what customers love about us to the rest of the market in a way that’s relatable, understandable and gets at the heart of financial decisions people are making, but also has a little bit of fun with it.”

M a r ke ts of the M ind

167

On the Pl aying Fields of North A m eric a

Sponsorships

F

rom the days of the first Olympics in classical Greece, patronage of the games and community activities has been an important element in the success and popularity of the form. Sponsorship could take many forms, from the support of an individual athlete to groups and teams. Fast-forward to more modern times and one sees how essential sponsorship was for the revival of contemporary games. For financial institutions, sponsorship decisions can be complex – decisions often overshadowed by the glamour and excitement of the sport. The questions focus not only on marketing and considerations of brand but also the proper role of the institution as a supporter of city and region. Not all customers are fans, and not all fans are customers. But sponsorship can also be an effective way of getting noticed in a high visibility environment. It is also where a lot of current and future customers gather, so it’s also a way to reach

those customers. The encouragement of individual athletes, teams, and communities in their aspirations are also important considerations. The support institutions like Bank of Montreal offer are also acknowledgments of the importance of the play element in culture. And a sporting spirit. For bmo , the sponsorship of sport is, of course, all of those things and more. The Bank’s support of major league teams extends across the playing fields of North America. Its supporting role has evolved over time, as new sports and new forms of organization have sprung up. In the advent of television broadcasting of sport in the last generation, sport has become a massive outlet for markets and marketing, for entertainment and reputation-making, for recognition and brand association. It is exactly the kind of place you would expect a leading bank to be represented in the contemporary era. The support of a wide variety

of sporting activities is a way to reach the Bank’s customers where they live and play, to strengthen the bond of identification and affiliation. The inspiration is not just for customers: the people of the Bank are also inspired by their connections to the teams they support and the individuals they admire. Like everything the Bank does, the decisions it takes on sponsorships must meet the many high standards that it sets for itself in how, where, and why it spends the institution’s money on activities in the community. For any fan inside or outside the Bank, the foregoing explanations about sponsorship of sports clearly lack something. They lack something because the sporting event is simply not experienced as other forms of entertainment. It is much more visceral and connected to the competitive and communal instinct of the individual. To varying degrees, sport is a national language. It remains

an arena, for example, where excellence is clearly and unambiguously celebrated. For all its commercialism, it is also where the play instinct is front and centre. The artistry, the drama, the excitement of competitive sport, the respect for limits, the longing for perfection, the impulse of freedom: this is what author Michael Novak once credited with the joy of sport. In few other activities does one find such a powerful communal feeling as at “the game.” It can, therefore, be no surprise that a bank so involved in its community will be found sponsoring, participating, and wholeheartedly engaging in the games of our contemporary world.

170

Th e BM O Un iv er se

TOP SHELF

The Chicago Blackhawks

T

he Chicago Blackhawks hockey team was founded by Major Frederic McLaughlin, who paid the $12,000 entry fee to become part of the National Hockey League on 25 September 1926. In their first game, played on 17 November 1926, they beat the Toronto St Pats 4–1. And thus began the history of one of the legendary teams of hockey. The connection to, and the rivalry with, the Toronto and Montreal teams born in that first season continues to burn brightly into the twenty-first century. bmo’s sponsorship of the Chicago Blackhawks of the National Hockey League began in 2007. The Bank’s partnership with the Blackhawks has seen the team win the Stanley Cup three times – in 2010, 2013, and 2015. While there is not a cause-and-effect relationship between partnership and victory, the benefits that accrue to each are significant, on and off the ice. The bmo -Blackhawks sponsorship has been considered a key part of the Bank’s overall efforts to support Chicago’s leading organizations. The fact that the Blackhawks win frequently and at the right time has been a stroke of good fortune. bmo ’s relationship with the Blackhawks began as the team sought to revitalize both its brand and its image, thus providing an ideal fit for both Bank and hockey team.

On the Pl aying Fields of North A m er ic a

171

NOTHING BUT NET

The Chicago Bulls

T

he Chicago Bulls of the National Basketball Association (nba ) were established on 16 January 1966. Their rise to prominence in the game, especially in the 1980s and 1990s, transformed the team into one of the most powerful sports dynasties in America. Players such as Joakim Noah, Michael Jordan, Scottie Pippen, and Dennis Rodman have not only been stars of the game but they also transcended their sport to become household names. Their on-court performance, popularity, and deep roots in Chicago have made the Bulls organization one of the most valuable and powerful franchises in the nba , estimated at $2.3 billion in 2015. This is not only a Chicago brand: it is a brand with a global reach. bmo Harris’s sponsorship of the Bulls began in 2007 when it became the Bulls’ “Official Bank.” The relationship represented the largest banking partnership in franchise history. Since then, it has become one of the best-known and recognized relationships in Illinois. The Bank’s close engagement with the Bulls’ organization has created a partnership that many say extends far beyond contractual elements. The chemistry between the two organizations, the alignment of goals and objectives, and their mutual embrace of community has made the bmo Harris–Chicago Bulls sponsorship one of the most effective relationships in the Bank’s portfolio. In 2015, Bank of Montreal became the official bank of the National Basketball Association in Canada.

172

Th e BM O Un iv er se

#WETHENORTH

The Toronto Raptors

O

n 3 November 1995, the Toronto Raptors played their first home-opener in the National Basketball Association. Toronto had not had a major-league basketball franchise since the short-lived Toronto Huskies in 1946. A half-century later, Raptors founder John Bitove and partners succeeded in having the game return to Toronto. The Toronto franchise was the first granted outside the borders of the United States. The team’s name was chosen from among 2,000 entries in a competition that included names such as Dragons, Grizzlies, Hogs, Tarantulas, and Terriers before Raptors was chosen as the final and most appropriate name. On 30 October 2013, bmo announced its multi-year sponsorship of the Toronto Raptors nba franchise. The agreement reinforced the Bank’s strong relationship with Maple Leaf Sports & Entertainment in the city. Most of all for the Bank, it marked what newspapers of the day considered a “forceful return to Canadian basketball,” establishing the sport as a premier marketing vehicle in Canada. Basketball’s popularity as a sport, especially among young urban dwellers, has made the relationship with the Raptors a powerful and productive one.

On the Pl aying Fields of North A m er ic a

173

THE BANK’S CLEAR ROUND

Spruce Meadows

S

how jumping is an elegant sport developed in the eighteenth century in England and revolutionized by Italian Federico Caprilli, hailed as the father of

174

Th e BM O Un iv er se

modern riding. The sport highlights the remarkable physical power and agility of the horse and the superb, supreme control of the rider. The harmony of human and horse in overcoming obstacles, avoiding faults, and completing the course can be considered fluid poetry in motion. The Bank of Montreal is proud to be a founding sponsor of Spruce Meadows, Canada’s premier equestrian show jumping facility near Calgary, Alberta, since its inception in 1975. In fact, the Bank has supported equestrian sport in Canada for four decades in a variety

of ways, both individually and in the development of this international team competition. It has supported Canadian Equestrian Team member and Olympic record holder Ian Millar for more than a quarter century. The bmo Nations’ Cup has been an exciting opportunity to showcase talented athletes from around the world, and bring international recognition to the Calgary’s Spruce Meadows “Masters” tournament. The Nations’ Cup has become a leading global competition in the sport, drawing the world’s best riders.

WILD ROSE VISIONS

The Calgary Stampede

S

ome annual events in the life of a city begin modestly and then eventually grow to symbolize the spirit of an age, a place, and a people. The Calgary Stampede has become such an event and institution in the life of Calgary, Alberta. The first Stampede event

was held in September 1912, supported by four prosperous southern Alberta ranchers who got behind the idea of a world-class rodeo competition to exalt the culture of the Old West. The Bank of Montreal was there from the very beginning in 1912 as the “Official Bank of the Calgary Stampede.” For the last three-plus decades, the Bank has been a sponsor of this remarkable annual event. Sponsorship provides the institution an opportunity to connect and collaborate with the community, to celebrate Western heritage, and to showcase the importance

of agriculture not only to the West but also to Canada as a whole. There are not many relationships between institutions that surpass a century.. That of the bmo -Stampede therefore stands out as a fine example of a productive, prosperous, and successful relationship that has helped to build the bonds of community in southern Alberta. When you add the immense entertainment value of the Stampede to the equation, you get a remarkably happy picture of what the Stampede brings to its people and community.

THE ENDURING NATIONAL PASTIM E

Skate Canada

A

s in so many areas of both amateur and professional sport, bmo has had transformative long-standing partnerships. For two decades, the Bank was the “official bank” of Canadian skating. bmo first entered into an agreement with Skate Canada in 1996 to become the title sponsor of the Canadian Figure Skating Championships and a sponsor of the National Team. This partnership grew to include the bmo Skate Canada Junior Nationals, bmo Skate Canada Challenge Events, bmo Skate Canada Sectionals, and bmo Skate Canada Synchronized Championships, which have provided the opportunity for nearly one million spectators to enjoy the country’s top figure skaters live. bmo has been particularly proud to be the presenting sponsor of the CanSkate learn-to-skate program, delivered through 1,475 clubs across Canada and taught by professional coaches. This program enables skaters of all ages to participate in recreational skating and provides them with the skills to enter into the competitive skating stream. The Bank’s sponsorship of title events was one piece of a larger and intensive commitment to the sport. Another is helping young skaters who are first starting out. And at the opposite end of the spectrum, helping elite skaters to compete effectively and successfully at the international level. The Bank’s commitment reaches from the support of recreational skaters to competing athletes. The long-term commitment to Skate Canada was considered transformative in the sense that the organization was able to focus on creating the best environment for its members to thrive and succeed. bmo Financial Group’s partnership with Skate Canada has developed into what was considered a leading and award-winning example of corporate sponsorships.

176

Th e BM O Un iv er se

T GOING THE DISTANCE

The bmo Vancouver Marathon

he Bank’s sponsorships in the support of healthy lifestyles embrace a wide spectrum. The marathon, for example, in both ancient and contemporary times, has captured the imagination as a popular test of physical prowess and endurance. For almost a decade, bmo Bank of Montreal has been the title sponsor of the bmo Vancouver Marathon. bmo supports the running community through sponsorship of marathon events throughout North America – in Vancouver, Kelowna, and Charlottetown in Canada; Phoenix, Arizona; and Milwaukee and Madison, Wisconsin. In recent years, the Vancouver event has completely sold out, reaching the 5,000-runner limit. Over years, the Vancouver Marathon has become one of the world’s most significant races. Between 2012 and 2015, for example, the marathon had over sixty-three nationalities represented and an impressive contingent of international marathon runners registered and running. In 2014, Forbes magazine ranked the bmo Vancouver Marathon as one of the world’s best marathon locations. The course leads runners through twelve unique neighbourhoods, showcasing panoramic views of snow-capped mountains, cherry trees in blossom, shoreline for 70 per cent of the course, and the famous Stanley Park. Thirty bands along the course motivate runners to a downtown finish in the heart of the city, where participants are able to reconnect with friends and family at the Street Festival located on West Hastings. The organization puts on a marathon, a half-marathon, and various other races to encourage participation at all levels. In 2015, the bmo Vancouver Marathon hosted about 14,000 registered runners and many more spectators during the race weekend. The event has also raised more than $12 million for thirty charities since its launch in 1971.

On the Pl aying Fields of North A m er ic a

177

THE BEAUTIFUL GA M E

Canadian Soccer

B

mo’s support of soccer was not only inspired by

the beautiful game itself but also by the fact that the sport has the highest participation in the country. In 2007, the Bank entered the soccer sponsorship realm with its support of Toronto fc and bmo Field. The approach to the investment, however, targeted both elite and grassroots levels of play. The Bank promoted professional teams and Canada’s national teams through Major League Soccer and the Canadian Soccer Association. Remarkably, the Bank supported each of the Major League Soccer teams in Vancouver (Vancouver Whitecaps fc ), Toronto (Toronto fc ), and Montreal (Montreal Impact). bmo also supported youth soccer teams and sough to celebrate and engage young Canadians with the bmo Team of the Week, a national youth soccer contest launched in 2011 and run by the Bank. The Local Soccer Clubs program supported grassroots soccer teams at the branch level, enabling bmo branches and employees to engage directly in community activities. This was how bmo in Canada became the “Bank of Soccer” – by promoting outreach programs that grew quickly year by year. The Bank’s hard work and promotion of the sport resulted in the support of more than 20,000 youth league soccer players across the country. bmo’s extraordinary commitment to soccer focused its investments on a comprehensive, across-the-board approach to the sport, from the kids starting out in the game at the community level, through the young adults in associations, through the truly gifted international-class players – men and women that Canada needs in order to compete and win on the world stage.

INVESTING IN THE FUTURE

Bradley Center and the Milwaukee Bucks

I

n 2012, the Bank acquired the naming rights for the bmo Harris Bradley Center in Milwaukee, Wisconsin, the home of the Milwaukee Bucks basketball team. The Bank was seen as something of a white knight in the affair, since the Bucks would have in all likelihood been forced to find a new home. As a relative newcomer to the Wisconsin market after its merger with m&i , bmo was searching for ways of engaging meaningfully with important community initiatives and institutions. In concert with a host of other Wisconsin-based companies, bmo stepped up to the challenge. As in any great relationship, the benefits have been mutual. The preservation of the Bradley Center until a new structure could be built was an important community objective, not least since the Center had an annual economic impact of more than us $80 million in metro Milwaukee alone. Communities find out who their friends are when the need is greatest. By that measure, bmo Harris came through with flying colours. For its part, bmo Harris was able not only to introduce itself to the community in a big way but also to promote its name, its products and services, and the ways it wanted to continue to be a community player in the Milwaukee area. The announcement was coupled with the signing of a six-year sponsorship of the Milwaukee Bucks, as well as a new initiative to establish a bmo Harris Boys and Girls Club section of the center to support the community and broaden the fan base.

Minnesota Wild, 2015

T

he Minnesota Wild of the National Hockey League and bmo Harris Bank have had a relationship that extends back to the very beginnings of the franchise in the mid-1990s. The Wild took to the ice for the first time in the 2000 season in the nhl ’s Central Division, Western Conference. Franchise founder Robert Naegele Jr considered the Bank’s support crucial in helping him and his partners realize the goal of bringing a major-league franchise back to Minnesota. “They shared our vision for the entire community to become the State of Hockey that exists today.” The Bank had a long history with Naegele in his role as the owner of Rollerblade, Inc, aiding the entrepreneur in financing that venture as well. bmo Harris Bank was also vital in securing the final funding to build the Xcel Energy Center in 1998 so that when the players took to the ice in St Paul, they would do so in a brand new arena. In September 2015, bmo Harris Bank announced a multi-year partnership with the Wild. As in other key markets and communities where the Bank operates, the sponsorship recognizes just how much of an asset the Wild is to the community – this time in the Minneapolis–St Paul region. As a bank founded in Montreal, the growing collaboration with nhl teams – Chicago, St Louis, and Minnesota – seems a natural fit: a beloved sport, cherished on both sides of the border, helping to break down borders.

180

Th e BM O Un iv er se

Fro m Ch a rit y to Phil a nthropy

I

n the two centuries of the Bank’s operations, both the concept and the practice of philanthropy and charitable giving have undergone a thorough and complete transformation. The Bank’s earliest donations were focused first on local Montreal institutions, and then extended outward to its territory of operations through branches. The earliest donations were concerned with institution-building in health care (hospital construction) and education (universities), disaster relief, or the raising of funds for soldiers and veterans. Donations also went to the support and management of other young institutions in theatre and the arts. In national emergencies, the Bank’s leadership were attentive to wartime relief, supporting a national war effort, the Red Cross or the United Way, or health-based campaigns. In Chicago, for example, Harris Bank was the founding funder of the Chicago Community Trust (cct ) in 1915 with a donation of $600,000, and the bank was the original sole trustee. (The cct now has consolidated

assets of $2.1 billion and provides $161 million in annual grants.) In addition, both the leaders of the Bank and its employees, inspired by deep religious conviction and community spirit, developed a long-standing tradition of both personal and corporate generosity. The transfer of wealth from private to public and community has undergone a continuous evolution since the very first Bank of Montreal corporate donation in 1835. In 2015, the Bank contributed more than $56.9 million in community donations. Over time, the Bank’s donations have increasingly sought to connect the Bank’s existence as an important North American financial institution to the material support of community-building projects on a local, national, and international scale. As a bank, it does so in the name of the shareholders and the customers of the institution. Over time, donations and philanthropy have focused on making a difference in building the communities the Bank serves – through transformational

gifts, the funding of post-secondary educational initiatives, and in the realms of health care, arts and letters, and a variety of other causes important to its customers. These donations and investments reflect not only the sense of community of the Bank and its people but also the duty and responsibility it feels to civil society and a broader set of publics beyond its immediate circle of shareholders, managers, employees, and customers. In this way, the noble pursuit of giving has also spawned at the Bank and other institutions an increasingly sophisticated and developed sense of corporate social responsibility, where the Bank seeks to take on its social obligations through short-term, targeted projects as well as longer-term sustained or ‘transformational’ ones at city, regional, or national levels. These exciting developments in the Bank’s relationship with the wider world have emerged alongside a growing complexity and discernment in its approach. For the Bank of Montreal, this has

been a natural evolution: in its corporate culture, it has sought to give expression to its purpose beyond its operations. The Bank, in other words, has sought through this avenue to focus on its values, on human dignity, on solidarity, and on the kinds of initiatives that will strengthen individuals and communities. Throughout its history, the Bank has instinctively understood the importance of community goodwill and what experts call ‘reputational capital.’ That explains not only the Bank’s adherence to the highest and most exacting standards in banking but also how it has moved toward a deeper and broader understanding of its social purpose, beyond its core function. Some of the donations featured here exemplify the Bank’s philanthropic path over time. The story tracks how generations of Bank of Montreal bankers evolved their understanding of the proper role of the Bank beyond banking. Included also are special examples from both the Bank of Montreal and its other founding institutions, Harris Bank and m&i , thereby embracing both Canada and the United States. There are literally thousands of examples of donations, large and small, that could be cited. Instead, this chapter showcases five entries that cover the categories of charitable giving over the years: health care, education, research, the arts, and community. The story begins informally right from the beginning through the philanthropy of the Bank’s founders. For the Bank as an institution, the story begins in the 1830s, with the first official donation to the Montreal General Hospital.

182

Th e BM O Un iv er se

HEALTH C ARE AND THE HEALING ARTS

H

ealth care has pride of place in this list as it was the Montreal General Hospital that became the recipient of the Bank’s very first corporate donation. (See also bmo Bankers and the Dream of Nation, page 151.) On 10 February 1835, the board of directors agreed to donate £100, thus beginning a long and close association with this venerable Montreal institution. The leaders of the Bank, however, gave far more of their personal wealth – in time and treasure – to this worthy cause. This great impulse of charity is deeply rooted in tradition and seeks to relieve the physical and mental suffering of humanity. Throughout the late nineteenth century and into the twentieth, the need to fund and build hospitals grew in tandem with the urbanization of the country and the professionalization of medicine. In the twentieth and twenty-first centuries, the Bank has been active in helping hospitals focus on vulnerable groups and contribute to the eradication of disease in its key centres of operation. In Montreal, the Bank has supported the Hopital Sainte-Justine since 1930, making major donations throughout the decades. In 2003, the Bank offered $2.5 million to the hospital and, in 2016, $2 million for a Chair in Autoimmune Diseases. One shining example is St Michael’s Hospital in Toronto, a Catholic teaching and research hospital founded by the Sisters of St Joseph in 1892 to look after the sick and poor of the inner city. The hospital today is an outstanding medical centre of education and treatment. bmo has been its banker for over one hundred years and a key supporter of its campaigns through the 1980s and the 1990s. In 2001, the Bank pledged $730,000 over four years as the first major funder of the Centre for Research on Inner City Health (now the Centre for Urban Health Solutions). In 2006, bmo Financial Group gave $2 million for the extension of

this initiative centred on helping Toronto’s vulnerable and inner city populations – mothers at risk, new immigrants, and people living rough on the streets. Again in 2012, bmo contributed $3 million over a decade to support the expansion of facilities at the hospital. Among the other hospitals in Toronto receiving support over several decades, the Princess Margaret Hospital has been a consistent recipient, culminating in a 2013 pledge of $3 million over a decade to fund a Chair in Precision Genomics. The relationship with the Hospital for Sick Children extends back to 1967 and includes a total of $5 million in funding since 2006 for research and related activities. In Chicago, bmo has a distinguished tradition of supporting Chicago’s Rush University Medical Center in a variety of programs. Rush was the first medical school in Chicago. Its commitment to the low-income neighbourhoods on Chicago’s West and South sides is

focused on addressing and eliminating health disparities – in other words, getting high-quality health care to people who need it most. bmo Harris is Rush’s major collaborator in the Building Healthy Urban Communities project, which includes Malcolm X College, a City College of Chicago, and the Medical Home Network. As part of that project, the Bank funds five bmo Harris Bank Health Disparities Fellowships in aid of providing diversity in health care delivery. The frequency and the dollar amounts can make the head spin, but there is a strategy behind the giving. Many of the most recent contributions have sought to target specific programs and to offer the possibility of a transformation in the various fields of health care provision. The Bank has stepped up to the mark in ensuring that its giving reflects its values and its mission, and attempts to make a tangible difference in the communities it serves.

AN ENDURING COM M ITM ENT TO HIGHER LEARNING

T

he nexus between the Bank of Montreal and the development of Canada’s university network extends deep into the nineteenth century past. The Bank’s donations have benefitted a number of Canada’s leading universities in larger and larger amounts. In the early part of the twentieth century, McGill University

184

Th e BM O Un iv er se

received substantial amounts ranging from $10,000 in 1911 to $250,000 in both 1920 and 1943 with various amounts in between, in the years between. The University of New Brunswick (unb ) was also one of the earliest supported universities, with a banking relationship extending back decades. The Bank has made contributions to McMaster, Queen’s, Western, Laval, and Acadia universities, to name a few. The contributions and donations have been underpinned by a growing awareness of the role of universities in creating strong foundations for civil society, tackling the great challenges of our world, and creating the conditions for

the kind of country and the kind of people we aspire to become. In contemporary times, the donations have flowed to universities with ambitious agendas. The Bank’s historic $3 million donation to the University of Toronto’s capital campaign in 1996–97 was a turning point for the way the Bank viewed its corporate giving, preferring to make a stronger impact in strategic areas of need. A few examples will suffice. In 2005, $750,000 went to the unb ’s International and Business Entrepreneurship Centre in the Faculty of Business. In 2011, the Bank returned to unb to announce a $1.75 million gift to support student projects – the single largest donation ever received by the university and the largest the Bank had given in the region. In 2013, the Bank offered $1.75 million for a fresh renovation of the Finance Research and Trading Lab at the Rotman School of Management at the University of Toronto. The lab offers real-time financial resources and the opportunity to gain hands-on training in a range of disciplines. bmo Harris’s philanthropic focus in education responds directly to the most urgent challenges of the community it serves. Its $900,000 support to Marquette University and the Boys & Girls Clubs of Greater Milwaukee is an extraordinary case in point. The funds are used to support college preparation and career readiness programs at the Boys & Girls Clubs and provide scholarships for club members to attend Marquette University. Currently, thirty members attend Marquette as bmo Harris Scholars. That program provides a range of support for first-generation college students from preparation to mentoring programs. In Chicago, the Bank has been the co-lead sponsor of One Book, One Chicago since 2013 – an initiative aimed at creating a community of readers. Every September, about 25,000 Chicagoans read the same book at the same time. Then, a variety of free programming prepared by Chicago’s cultural, educational, and civic institutions – discussions, author series, performances, art exhibits, and films – is held in connection with the book.

T PURE RESEARCH

At the Perimeter of Expectation

hrough its support for universities and endowed chairs in health and other fields in the last generation, bmo has kept its finger on the pulse of the evolving financial needs of advanced research. One contemporary gift stands out, however. On 29 November 2010, bmo announced its largest single donation to date, a landmark $4-million investment in the Perimeter Institute for Theoretical Physics (pi ), in Waterloo, Ontario. The gift established the bmo Financial Group Isaac Newton Chair in Theoretical Physics at the Perimeter Institute. In one stroke, it represented the largest single donation ever made by bmo to support scientific research. It was also the largest single contribution in the history of the Perimeter Institute. The $4-million donation came with an additional $4 million in private funding.

The Chair selected was Xiao-Gang Wen, one of the pre-eminent physicists of our generation. Wen received his PhD from Princeton University in 1987. He is a Cecil and Ida Green Professor of Physics at mit , and a Moore Distinguished Scholar at Caltech. Wen’s expertise is in condensed matter theory of strongly correlated electronic systems. Among many other outstanding achievements, he introduced the notion of topological order (1989) and quantum order (2002) to describe a new class of matter states. This opened up a new research direction in condensed matter physics. bmo ceo Bill Downe has been one of the Perimeter Institute’s most convinced supporters. As he wrote in an op-ed in 2015, transformational change begins to happen “when exceptional people ask fundamental questions about the deepest problems and make extraordinary discoveries that benefit us all.” The far-sighted decision to support that branch of knowledge stemmed from an understanding that quantum physics is at the foundation of the world’s advanced economies. Downe wrote: “The commercial applications are rarely obvious at first – it is one hundred years later, yet we are only now reaping some of the benefits of Albert Einstein’s profound insights. The ideas of Max Planck, Niels Bohr and other thinkers of Einstein’s generation advanced human knowledge, science and technology, altering our lives forever.” “Transformational giving” is already looking like a shopworn phrase in the contemporary world of philanthropy. But there’s still the hope – that if you push hard enough and deep enough, you have a shot at breaking through, or solving twenty-first-century challenges. The transformation sought is the discovery of a solution to an intractable challenge. It is what contemporary leaders both see and aspire to in their own organizations, and in the vision and resources they offer to the wider world. 185

THE ARTS

T

he Bank has long been a major patron of the arts. In Canada, the patronage of the Bank of Montreal and others has been essential to the flowering of cultural forms across the country. Promoting those splendid manifestations of human creativity in dance, theatre, art, and music demands a cultural understanding. It also requires support of cultural communities and the fostering of both individual and collective genius. Supporting extraordinary creative excellence in the nation’s artistic realms has been done for complex reasons deeply rooted in the convictions and aspirations of generations of Bank of Montreal leaders and people. Each generation has had to ask itself: What kind of society do we want to live in? How can we do our part to make it more culturally enriching, uplifting, or worthwhile? The Bank’s answers have come down through its long-standing support of some of Canada’s founding regional and national cultural institutions. In ballet, the Bank was the original sponsor of the Winnipeg Ballet Club in 1939. In 1953, the club would become the Royal Winnipeg Ballet after HM Queen Elizabeth II granted the group the first royal charter to be conferred in the Commonwealth. Also in the 1950s, Celia Franca founded the National Ballet of Canada (1951) in Toronto, and the Bank was also there to lend its support. The National Ballet has become Canada’s premier dance company, performing for over 10 million people since Celia Franca’s day. It has earned an admirable reputation across the globe for its range of traditional full-length classics. The Bank of Montreal has been the banker to the Stratford Festival virtually since its establishment in 1952. The founding of the festival was a stroke

186

Th e BM O Un iv er se

of vaulting ambition for a small southern Ontario town, but under the leadership of Tyrone Guthrie, the festival’s first artistic director, and intrepid actors who were attracted to the new stage, the venture was launched. Unusually, the original Bank gift came from the branch manager at Stratford, underlining the Bank’s and the community’s commitment to the success of what has become a Canadian theatrical institution. The Bank’s support for the fine arts extends right across the country in communities where it has conducted business: through the support of individual artists and young artist competitions (1st Art!) as well as educational institutions, such as the Ontario College of Art and Design (now ocad University) – Canada’s largest art, design, and new media post-secondary institution. Support for community galleries is a hallmark of the Bank’s giving in this area. The Winnipeg Art Gallery stands out, as the Bank has been both banker and supporter for over a century. The Bank’s Chicago experience with fine art has a long pedigree. The Norman Wait Harris Prize medals in American painting, endowed by the Art Institute of Chicago, were awarded to some of the most renowned artists of the twentieth century. Grant Wood’s iconic American Gothic won the $300 Harris Prize bronze medal in 1930. The Bank supports the Toronto Symphony Orchestra and the Ravinia Festival in Chicago, among other groups and events. But the Montreal Symphony Orchestra (mso ) has a special place in the history of the Bank’s giving. In 1981, the Bank began its sponsorships of mso international tours. In 1984, the Bank sponsored the mso ’s 1984 spring tour of Europe. It was the largest single cultural sponsorship up to that time for the Bank ($200,000). The smash success of that tour prompted another tour – this time of the United States – in 1985. In 1989, the Bank again sponsored a North American tour for this much-acclaimed orchestra. In Chicago, bmo Harris is the season sponsor of the Shakespeare in the Parks tour, and has been since 2012. The production tours city parks, especially in underserved neighbourhoods. The plays attract 25,000

families, and audience members of all ages. For ten weeks, the Grant Park Music Festival brings free, outdoor, classical music to the Jay Pritzker Pavilion in Millennium Park. The Festival is America’s only free concert series of its kind, and bmo Harris is a season sponsor. Throughout the years, as the Bank has become an integral part of the cities and towns it serves, it has striven to promote the well-being of the whole community. In so doing, it has enriched the North American cultural landscape.

Two men defiantly pose in front of the Bank’s office amidst the ruins of post–Great Fire Chicago, 1871. Three days after the fire, the directors authorized a $5,000 donation in aid of the stricken city.

COM MUNIT Y OF COM MUNITIES

A

sk any Bank employee in any branch or office about the importance of community support and they will tell you that their Bank’s support, encouragement, and passionate commitment for strong communities everywhere is a defining feature of its engagement with the world. Military conflict and natural catastrophe have always called forth a response: the Bank of Montreal donated $5,000 for the relief of Chicago after the Great Fire of 8–10 October 1871 “in view of the unparalleled calamity which had befallen Chicago” as the directors noted on 13 October 1871. Marshall & Ilsley established a fund to support orphans in the wake of the US Civil War. One of the

The Soldiers’ Orphans Home in Madison, Wisconsin, opened its doors on 1 January 1866 for the care and tutelage of children left without parents after the Civil War. Marshall & Ilsley established a fund to support these poor orphans.

earliest donations of the Bank was for the relief of cholera and pestilence in its hometown – an all-toocommon occurrence in the age before sanitation and before the rise of health care. More recently, the Employee Giving Campaign has raised over $22 million (2013) and $26 million (2014) – remarkably generous sums that come from the people of the Bank themselves. One of the keystone charities the Bank has supported over the years has been the Community Chest, United Appeal, and Red Feather – better known today as the United Way Centraide. bmo has become one of the most generous corporate supporters of the United Way. Many of the Bank’s senior executives and branch managers in the communities they serve have chaired the annual appeals. In recent years, the Bank’s strategic shift to larger gifts that carry more impact inspired it to provide funding for United Way’s “Building Strong 188

Th e BM O Un iv er se

Neighbourhoods Strategy” (bsns ) to confront the threat of growing urban poverty. By focusing efforts where they are needed most, supporting neighbourhood change from within, and improving access to community supports, the United Way in cities such as Toronto and Chicago can give people the necessary tools to improve individual lives and the life of the community. bmo Harris in Chicago has been especially active in funding projects that respond directly to the needs of underserved populations. The Bank provided a $1 million multi-year pledge to the ymca of Metropolitan Chicago toward the ymca 1030 Building Campaign to construct the Learning Institute. The institute will be a state-of-the-art space for collaborative learning across the spectrum of childhood development into adulthood. It will also be a destination for best-practice dialogue among city, state, and national institutions and non-profit organizations. Over half a million Chicagoans rely on the ymca for support, making this project one that will touch many lives. The Bank’s support, and that of its employees, for community causes is strong and has a long tradition.

The Kids Help Phone is a sterling example. From its beginnings in 1989, this charity has become one of Canada’s largest and most respected services for children and teens. It is national, bilingual, free, and available 24 hours a day for children and youth in Canada. The bmo loyalty to Kids Help Phone has seen millions of dollars raised from its employees and their families over the decades. In Chicago and area, bmo Harris has supported such diverse projects as Openlands’ Building School Gardens program, creating and installing outdoor teaching spaces at disadvantaged Chicago public schools, and benefitting students, teachers, and the wider community. In the civic realm, the Bank provided $1 million in “founder” funding in 2001 to build the now-famous Millennium Park. This depth of commitment demonstrates just how seriously the Bank and the people of bmo take to heart the welfare of their community.

Cultur a l C a pita l

Bankers and Art

C

ompanies maintain an interest in acquiring an art collection for a variety of reasons. Art collections can give a sophisticated expression to an institution’s support for the community beyond the strict confines of its business. The best collections not only reflect a corporate social responsibility – in the assistance to up-andcoming artists, for example – but also serve to enhance the cultural richness of the community and the workplace itself. Art in the corporate setting has been seen as a “‘catalyst for change because it changes people’s perceptions.” It can motivate employees and broaden their horizons. Above all, perhaps, corporate collections at their best view art as a manifestation of the creative spirit that should not be confined to a gallery or museum, but should help to elevate our physical environment and inspire people. Collections can

reflect the creativity, energy, and modernity of the institution. The Bank of Montreal has played an important role in Canada’s cultural evolution, and the art world is no exception. Its head offices in Montreal and architecturally memorable branches across Canada set a standard of refinement for new buildings that was emulated for decades in every part of the country. Early bank presidents like Donald A. Smith (1820–1914) and Sir George Alexander Drummond (1829–1910) were actively involved in the arts, both as notable collectors and, in Drummond’s case, as chairman of the fledgling National Gallery of Canada. The bmo Financial Group art collection has amassed more than 7,500 works, displayed in bank offices in five countries and dozens of cities. The collection has become an integral part of

the working environment of the bank itself. In recent years, the collection has been expanded with works from artists active in every region of the territories in which the Bank operates. Artistic and technical excellence is the standard in this collection. The bmo collection has a remarkable range of historically significant art, including Marc-Aurèle Fortin, Emily Carr, Maurice Cullen, Group of Seven members J.E.H. MacDonald and Lawren Harris, and modernist masters like Yves Gaucher, Willem de Kooning, Robert Motherwell, and Alfred Pellan. The collection also contains many works by notable contemporary artists, including Lois Andison, Shuvinai Ashoona, John Brown, Edward Burtynsky, Pascal Grandmaison, Angela Grauerholz, Micah Lexier, Evan Penny, Sarah Anne Johnson, Julian Schnabel, and Gregory Scott.

The Bank’s collection also features works by the best of the newest generation of Canadian artists. That generation is actively encouraged by the bmo Financial Group 1st Art! Invitational Student Art Competition, which has run since 2003. The works presented here represent a fascinating cross-section of the collection in North America.

190

Th e BM O Un iv er se

JOSEPH PANZETTA and THOM AS DUBBIN

Agriculture, Arts and Crafts, Commerce, Navigation, 1818–19

F

ashioned in the neo-classical style then popular in Europe, these four panels are the oldest works in the bmo collection, which gives them a special place of honour. They also represent the first decorative or ‘artistic’ pieces to adorn a financial institution in Canada. At the time, Coade stone was a new, ‘high tech’ form of artificial stone developed to be more durable than the stone or terracotta materials then used on the exterior of buildings. The decorative scheme for the country’s first bank building was intended to set a culturo-artistic imprimatur on a long-awaited moment for the aspiring merchant-bankers of Montreal. The

four plaques feature allegorical figures in bas-relief symbolizing the ambitions and wide-ranging interests of the bank, together with those of the bank’s clientele: Commerce, Agriculture, Arts et Métiers (Arts and Crafts), and Navigation. Joseph Panzetta (active 1789–1830) and Thomas Dubbin (no dates known), Agriculture, Arts and Crafts, Commerce, Navigation, 1818–19. Coade stone, each panel 30 × 46 inches (inv # 389, 390, 391, 392). Set of four architectural relief panels or “plaques” commissioned in London, England, in 1818 to adorn the exterior of the first Bank of Montreal building in Montreal. Currently on display at the Montreal head office.

Cultur a l C a pita l

191

ROBERT HARRIS

Lord Strathcona and Mount Royal, 1905

T

he practice of immortalizing the Bank’s presidents in oil on canvas has become an unbroken tradition. Upon retirement, a portrait is commissioned – though in some cases the work was done posthumously. This portrait is one of the most distinguished and celebrated of the entire collection. It features Donald A. Smith, Lord Strathcona and Mount Royal, whose influence on the Bank and the nineteenth-century economic development of young Canada was powerful and incontestable. (See also Determining Destinies, page 17.) Lord Strathcona was extremely knowledgeable about the art of his day, and his personal art collection was held in high esteem. It is, therefore, not surprising that Robert Harris, one of the most eminent and accomplished portraitists of the day, and best known for his portrait of the Fathers of Confederation, was commissioned to create Smith’s portrait.

Robert Harris (1849–1919), Lord Strathcona and Mount Royal, 1905. Oil on canvas, 46 × 30 inches, unframed.

192

Th e BM O Un iv er se

NICHOL AS DE GR ANDM AISON

The Walker (Pemota), 1930

N

icholas de Grandmaison devoted four decades of his life to documenting and creating portraits of First Nations people in Canada, particularly in Manitoba, Alberta, and British Columbia. After his death, the Bank acquired from his family a portfolio of one hundred oil pastels on paper dating from the 1930s to 1960s. The Bank’s purchase was thought to have saved the collection from being broken up or sold outside the country. This acquisition made the bmo collection one of the largest holders of the artists’ work. After donating sixty-seven pieces to the University of Lethbridge in 2013, bmo retains thirty-three portraits, the greatest number of works by a single artist in the collection. De Grandmaison’s portrait The Walker (Pemota) is one of his earliest and most accomplished portrayals.

Nicholas de Grandmaison (1892–1978), The Walker (Pemota), 1930. Oil pastel on paper, 29.5 × 23.38 inches, unframed.

Cultur a l C a pita l

193

M ARC-AURÈLE FORTIN

Paysage à Grande Vallée, ca. 1942–48

194

Th e BM O Un iv er se

M

arc-Aurèle Fortin was born in Sainte-Rose, Quebec. He established a successful early career as a painter, watercolourist, printmaker, and draftsman. He also became one of Quebec’s most beloved twentieth-century landscape artists. Fortin studied in Montreal under Ludger Larose and Edmond Dyonnet. He also studied at the Art Institute of Chicago under the direction of Edward J. Timmons. He returned to Montreal in 1914, but really began his painting career after a formative trip to England and France in 1920. One contemporary critic likened him to a “magician

conjuring up, out of the earth, out of his palette, giant trees, extravagant skies, a whole enchanted nature.” Over his long career, his love of the countryside around the St Lawrence Valley inspired many of his paintings. Paysage à Grande Vallée is an exceptional example of his best work, being one of two pieces by Fortin in the collection.

Marc-Aurèle Fortin (1888–1970), Paysage à Grande Vallée, ca. 1942–48 (inv # 8011). Casein on board, 35 × 47.5 inches, unframed.

EM ILY C ARR

Young Trees, Mount Douglas, 1942

B

ritish Columbia artist Emily Carr is a seminal figure in Canadian art history and one of the most important female artists of the early twentieth century in North America. Her passion and inspiration throughout her life remained the British Columbia coast. As she wrote in 1912, “Art is art, nature is nature, you cannot improve upon it … Pictures should be inspired by nature, but made in the soul of the artist; it is the soul of the individual that counts.” Carr’s formation was as expansive as her art. She studied at the California School of Design in San Francisco in the early 1890s and travelled to England in 1899, where she stayed for five years. She returned to British Columbia and the Northwest Coast before travelling to Europe once again – this time to France – in 1910. She settled in Victoria, British Columbia. By the late 1920s, she became increasingly known and appreciated, especially for her paintings of Aboriginal subjects and the trees, forests, and coastal skies of her native province. bmo has three pieces by Carr in the collection, this work being most representative of her mature style.

Emily Carr (1871–1945), Young Trees, Mount Douglas, 1942. Oil on paper mounted on wood board, 35 × 24 inches.

THOM AS UGJUK

Community, 1973

T

he bmo collection includes a rich selection of 265 works by Inuit artists dating from the second century to the present day; pieces are on paper, textile, stone, and bone and in mixed media, with the bulk being limited-edition prints on paper. This impressive sculpture, one of sixty-nine Inuit sculptures in the collection, is by master carver Thomas Udjuk from Kangiqtiniq (Rankin Inlet), located on the west coast of Hudson Bay. The subject of family and community activity rendered in expressive, simplified forms is characteristic of much sculpture from this region, as is the hard, grey stone used.

Thomas Ugjuk (1921–2014), Community, 1973. Stone, 14 × 32 × 10 inches.

196

Th e BM O Un iv er se

YA ACOV AGA M

Remembrance and Growth, 1972–75

Y

aacov Agam, an Israeli sculptor, was born in Palestine. He studied art in Jerusalem and settled in Paris in the 1950s, where he eventually became interested in perceptual or Op art, an art that causes illusionary or perceptual effects in the viewer’s eye. Critics have claimed that Agam and other artists involved with the group called Nouvelle Tendance (New Tendency) sought a parascientific role for art. However, Agam’s foremost emphasis in his work has been spiritual. As one source reveals: “The driving force and the source from which I draw my inspiration stem from my desire to give plastic and artistic expression to the ancient Hebrew concept of reality, which differs in its essence from that of all other civilizations, and which, to my mind, has never found its true artistic expression.” In the 1960s and 1970s, the Harris family commissioned several works by internationally known artists for the Harris Bank in Chicago, and these pieces are now part of the bmo Financial Group corporate art collection. The large, colourful metal wall sculpture Remembrance and Growth has been hanging on the main floor of the Harris Bank’s 111 West Monroe building since 1975. In 2007, the artist mentioned in a personal correspondence that Harris suggested the title for this work, feeling that the piece expressed the purpose, history, and future of the Bank.

Yaacov Agam (b. 1928), Remembrance and Growth, 1972–75. Acrylic lacquer on aluminum, 132 × 252 × 6 inches.

Cultur a l C a pita l

197

GREGORY SCOTT

Color Grid, 2009

that do magical and unexpected things. Composed like a modernist colour-field painting, in the centre of this composition the artist has organized nine squares in three rows of three, each delineated by white paint on the canvas. Traditional references to static painting end there. Instead of painted colours, the checkerboard of squares contains a series of moving images – chromatic and representational – that, over the course of almost nine minutes, shift and flow through a kind of fractured narrative that is evocative, witty, and thoroughly fascinating.

Gregory Scott (b. 1957), Color Grid, 2009. Mixed media, archival digital print, oil on panel, hd video, 45 × 46.5 inches.

O

ver the years, the art that bmo has acquired to enhance its office spaces has reflected changing modes of expression and materials in contemporary artmaking by artists living and working in the countries the bank serves. Gregory Scott is one of a growing number of artists interested in exploring and expanding the demarcations between traditional and newer media. With Color Grid and related works, he challenges the definitions placed on photography, painting, and video by combining all three media in the creation of narrative works

198

Th e BM O Un iv er se

LOIS ANDISON

Heartbreaking 91, 2009

A

significant strand of contemporary art internationally is based on words or text. The bmo collection includes several such pieces in a variety of media including painting, printmaking, watercolour, neon, and electronic and mechanical works – Heartbreaking 91 being the most exceptional. Considerations of language as a medium and kinetic type as movement prompted Canadian artist Lois Andison to incorporate text in sculptures like Heartbreaking 91. She started with pencil and paper, not a computer, to work out the various words that could be formed from “heartbreaking,” organizing them in a meaningful sequence. Her finished sculpture was inspired in form by the game Scrabble, but reconceived as a mechanical piece using acrylic letter squares set on rods, programmed electronics, and motors that allow each piece to rotate from the letter to the blank side. Over the course of several minutes, the word “heartbreaking” kinetically deconstructs and reassembles to form ninety other words found through combinations of the thirteen letters and their reverse blank sides, before returning to the original source, “heartbreaking,” the ninety-first word. The experience is witty, poetic, and affecting, and, as the artist says, “self-reflexive as the performance is a self-fulfilling prophecy.”

Lois Andison (n.d.), Heartbreaking 91, 2009. Edition 3 of 3. Acrylic, metal, custom mechanics and electronics, powder-coated shelf, 5.625 × 40 × 4 inches.

Cultur a l C a pita l

199

ENRIQUE SANTANA

Lake Michigan, 2010 Enrique Santana (b. 1947), Lake Michigan, 2010. Oil on linen, 60 × 90 inches, unframed.

E

nrique Santana was born in Spain, where he received his training. The artist has been living and pursuing his career in Chicago since 1991. Santana is the recipient of the Government of Andalusia Gold Medal of Honor for his contribution to the arts. In 2010, Sanatana was commissioned by bmo Financial Group to create this extraordinary work, Lake Michigan, for the bmo Harris offices in Chicago. From the earliest times, nature has been a strong source of inspiration for artists. Indeed, it remains a subject of enduring interest and pleasure for artist and viewer alike. The natural environment dominates

200

Th e BM O Un iv er se

as an artistic subject in the Bank’s collection – in any medium or idiom. It is, therefore, not surprising that an artist such as Santana, celebrated for his keen powers of observation and interpretation, was commissioned to capture the great primal force that is Lake Michigan. One gallery description of him recently suggested that Santana rendered Chicago with an “all-knowing hand.” In the global urban experience, lakes and rivers are shapers, protagonists, connectors. Chicago is also intimately connected with waterways: they shape and are shaped by the city; they are the source of power,

commerce, and communication; they help to provide sanitation, give pleasure, and, as Santana shows us, beauty. They inspire poetry, art, and metaphor. Lake Michigan in particular holds a special fascination for Santana as a realist painter, who has rendered it in small- and large-scale works during various seasons and times of the day. His approach to the subject is decidedly poetic, yet few artists working in any medium have captured its dynamic, elemental beauty with such acuity. For Santana, no two ‘portraits’ of the lake are identical: each reveals yet another side to its changeable character.

JA M ES EARLE FR ASER

Victory, 1923

V

ictory by American sculptor James Earl Fraser was commissioned by the Bank to honour the “many members of the staff who made the last great sacrifice in the cause of liberty and civilization” in the Great War. The Bank ran an international competition and selected Fraser, a talented exponent of the Beaux-Arts tendency in sculpture. Beaux-Arts was inspired by Classical, Renaissance, and Baroque models in combination with a “virtuoso technical facility at modeling the human form,” in the words of one observer. Originally, the bankers desired a figure of a soldier in bronze. Fraser came back with a concept of a figure “emblematic not of death, but of victory.” Victory stands in the atrium of Montreal Main Branch, 9 feet high in Seravezza marble. She stands on an 8-foot-high pedestal of Botticino marble. The inscription “Patria” (Homeland) is on the side facing the Bank entrance, followed by the words “To the Memory of our men who fell in the Great War.” Fraser was a rising star in the American artistic community when he executed this sculpture. His works are particularly prominent across the major monuments and institutions of Washington, dc , and include Contemplation of Justice and Authority of Law at the Supreme Court of the United States. Fraser also executed medals and special coins, including the Indian Head (or Buffalo) US nickel. His most famous sculpture is End of the Trail (1915), depicting an American Aboriginal warrior slumped over on his horse.

James Earle Fraser (1876–1953), Victory, 1923. Serezza and Botticino marble, 165 × 64 × 64 inches (sculpture and base).

Pa r t T w o Two Centuries of Banking by the Numbers This section offers a different perspective on the Bank’s first 200 years. A series of charts and graphs tell the story of the Bank of Montreal in numbers. The very essence of the Bank’s business – any bank’s business – starts with numbers and statistics. The lifeblood of the Bank’s information flow – the holdings, investments, rates, yields, dividends, capital, reserves, profits and losses, and a hundred other measures – has been measured and tested, forecasted and predicted, reported, analyzed, and discussed for two centuries. Our contemporary world both inside and outside banking is accustomed to measures and comparisons by quarter and by year. Sometimes five- and ten-year performances are considered. By contrast, these glimpses into the life of the Bank – and the development of the economic and financial life of the nation – provide the long view.

ASSETS Total bmo assets in 1817, 1917, and 2016.

$

681,458,000,000 Assets in 2016*

150,000

$

Assets in 1817

$

403,980,000 Assets in 1917

* Second quarter

T w o Centur ies of B a nking by the Num ber s

205

DEPOSITS Growth in bmo deposits, 1827–2016.

$

496,000 in 1827

$

11,199,000 in 1867

335,439,000

$

in 1917

5,608,490,000

$

in 1967

444,793,000,000

$

in 2016*

* Second quarter

206

T w o C enturies o f Ba n king by the Num ber s

THE TR AJECTORY OF WEALTH GENER ATION: 1917–2016 How much would a single Bank of Montreal share purchased in 1917 be worth down the years? This chart answers that intriguing question by examining the growth in value of the stock at ten-year intervals, factoring in stock splits that occurred four times during this period. It also assumes that the investor used the dividends to buy more stock every year (at the average stock price for that year).

Through war, depression, national emergency and the many cycles of the North Atlantic economy, the Bank has a perfect record of delivering dividends and the share price has risen steadily. If you bought one share in 1917 for $222 ($3,600 in 2016 dollars) and reinvested every penny of your dividends, we estimate you would have at least 52,000 shares today worth more than $4.4 million at current prices.

$

No of shares

4.4 million

more than 52,000 shares in 2016

60,000

$ Value (2016 $) 5,000,000 4,500,000

50,000

4,000,000 3,500,000

40,000

3,000,000 30,000

2,500,000 2,000,000

20,000

222 3,600

$ 10,000

=$

1,500,000

in 2016 dollars

1,000,000

1 share in 1917

500,000 0

0 1917

1927

1937

1944

1947

1957

1967

1977

1987

1993

1997

2001

2007

2016

1944: 10-for-1 stock split 1967: 5-for-1 stock split 1993: 2-for-1 stock split 2001: 2-for-1 stock split

T w o Centur ies of B a nking by the Num ber s

207

LOANS bmo Loans, 1817–2016. $million

Loans

350,000

Panics of 1825 London stock market (often called “first modern financial crisis”)

300,000

1837 United States financial crisis

250,000

1817–1917

1857 International – famously called “first worldwide economic crisis”

200,000 $millions

1873 United States financial crisis – triggers two decades of economic depression

400

150,000

300

1901 New York Stock Exchange (nyse) crash

200

100,000

1907 New York bankers – nyse falls 50% from peak of 1906

100 50,000

0

1929 Great Crash triggers Great Depression

0

1800

1850 War of 1812

Reign of Queen Victoria 1838–1901 Rebellion of 1837

1900

1950 First World War

Second World War

Last Spike in the Canadian Pacific Railway Telephone patented Great Fire of Chicago

2000

2008 Financial Crisis

September 11 terrorist attacks on the United States Sir Tim Berners-Lee invents the World Wide Web Margaret Thatcher elected first female prime minister of the uk

Canadian Confederation US Civil War

Morse develops electric telegraph

208

T w o C enturies o f Ba n king by the Num ber s

Notes: (1) Since 1 November 2002, customers’ liability under acceptances have been included in Loans (previously included in Other Assets). Prior periods have not been restated. (2) Since 1 November 2011, bmo ’s financial statements

have been prepared in accordance with International Financial Reporting Standards. Results for years prior to 2011 have not been restated and are presented in accordance with Canadian gaap .

CUSTOM ER BASE Post–Second World War growth in bmo customer base, 1947–2015. North America’s rapidly expanding post-war economy fuelled unprecedented increases in household income and wealth. Banks and financial institutions also experienced something of a consumer-finance

Year Number of customers

revolution after 1945. People had more and more ability to spend, borrow, deposit, and invest. They also began to demand access to an expanding range of financial products and services. This is the story that underlies these statistics on bmo customers.

1947

1957

1967

1987

1997

2015

more than

more than

more than

more than

more than

more than

1,000,000

2,000,000

3,000,000

4,000,000

11,000,000

12,000,000*

in North Amercia

Source: Archival material, annual reports, and internal measures.

* As at 31 October 2015

T w o Centur ies of B a nking by the Num ber s

209

EM PLOYEES Number of bmo employees in 1817, 1913, and 2016.

7

1,883

46,166

1817

1913

2016*

Canada

30,330 * Second quarter

210

T w o C enturies o f Ba n king by the Num ber s

United States Other international

14,443

1,393

BR ANCHES AND ACCESS Number of bmo branches, atm s, and app downloads, 1817–2016.

Year

Branches

atm

App downloads**

1817

2

-

-

1917

172

-

-

1967

1,033

-

-

1977

1,234

78

-

1987

1,220

689

-

1997

1,246

2,035

-

2007

1,224

2,561

-

2016*

1,538

4,746

2,125,960

* Second quarter ** Includes bmo ® Mobile Banking App, bmo InvestorLine App, and bmo Harris Mobile Banking® App downloads (as of May 2016).

T w o Centur ies of B a nking by the Num ber s

211

M APPING GLOBAL OPER ATIONS bmo growth from one city in one country to an international presence.

1817 Montreal, Canada

2016* 22 Countries 5 Continents * Second quarter

212

T w o C enturies o f Ba n king by the Num ber s

BR ANCH NET WORK Expansion of bmo branch network, 1817–2016.

61.1

%

Canada

%

38.6% United States

of branches by country

2016*

0.3% Other International

2016

Number of branches

1967

1,800 1,600 1,400 1,200 1,000 800 600 400 200

1917

1817

1867

172

1867

1917

26

1,538

1,033

2

1817

1967

2016

Year

* Second quarter

T w o Centur ies of B a nking by the Num ber s

213

COM MUNIT Y GIVING Some examples from a long history of support to address a wide range of community needs, 1835–2015.

2015

$

2001

56.9

$1 million Millennium Park, Chicago (Founder grant)

million

2010–2014

$2.5 million United Way Neighbourhood Strategies, Toronto and Chicago

1800

1835

1900

1948

2015

£100 Montreal General Hospital

$10,000 relief fund for Ottawa-Hull fire

$100,000 University of Toronto

$650,000 Remai Modern Art Gallery of Saskatchewan

1850

1900

1950

2000

1871

1920

2013

$5,000 relief fund for

$250,000 McGill University

$5 million Rush University Medical Center, Chicago

Great Chicago Fire

1915

1996

$600,000 Chicago Community Trust (founding member)

$150,000 Royal Winnipeg Ballet

1912

1979

$2,000 disaster relief for rms Titanic tragedy

$50,000 Vancouver Art Gallery

1967 $200,000 Bank of Montreal Canada Centennial Scholarships 214

T w o C enturies o f Ba n king by the Num ber s

WOM EN IN LEADERSHIP The first women to hold senior positions at bmo . They were the first to break the glass ceiling at the Bank by assuming leadership positions across its operations.

1926

1939

1963

1967

1982

m&i Officer

Harris Personnel Officer

bmo Branch Manager

bmo Board Member

bmo Vice-Presidents

Gertrude M. Jacobs

Mary Kennedy

Rebecca Watson

Pauline Vanier

Deanna Rosenswig Dorothy Ottersen Catherine Irwin

2015 percentage of senior leaders who are women compared to 6% in 1991

37.5%

T w o Centur ies of B a nking by the Num ber s

215

bmo Today The final four charts offer four different perspectives on the present and future Bank. They are not meant to offer a comprehensive picture – just glimpses of the kinds of categories that will determine the success of bmo and Canadian banking in the future. Mastering these elemental categories – technology, employee engagement, training, and the system-wide stability of the Canadian banking system compared to the rest of the world – will be the primary responsibility of the current and future generation of leaders at bmo .

INVESTM ENT IN TECHNOLOGY Canadian banking investment in technology, 2005–14. Extraordinary investments in technology allow the people of bmo to confront and master the ‘creative gales’ of transformation coursing through the

industry. The application of these transformational technologies is very much an industry-wide phenomenon; hence, the view offered here of Canadian banking investment in technology, 2005–14.

Year 9.0

2014

8.2

2013

7.7

2012

7.0

2011

6.1

2010

5.8

2009

6.0

2008

5.3

2007

4.8 5.0

2006 2005 0.0

1.0

2.0

3.0

4.0

Source: Data courtesy of Canadian Bankers Association. Latest available data was for 2014.

216

T w o C enturies o f Ba n king by the Num ber s

5.0

6.0

7.0

8.0

9.0

10.0 $billion

EM PLOYEE GIVING The generosity of bmo employees – with time, effort, and donations – has become one of the defining features of the bank’s culture down

the years. The numbers are quite extraordinary, and reflect both an individual and collective ethos of community service.

Over

$82 million

donated and raised by bmo employees

More than

88,000

2011–15

91%

volunteer hours

Employee participation rate in United Way Campaign

2012–15 % Employee Participation Rate

2015

100 90 80 70 60 50 40 30 20 10 0

2011

2012

2013

2014

2015

T w o C entur ies of B a n ki ng by the N um ber s

217

INVESTM ENT IN HUM AN C APITAL Extensive training efforts for over two decades. bmo has been a recognized global leader in the training and development of its greatest asset: its people. Through the Institute for Learning (ifl ) [see page 39],

bmo has placed a top priority on investment in its own human capital. The result has been a superbly trained workforce ready to step up to the mark that a changing world is creating for them every day.

1994

Today*

1994

500

The ifl opened its doors

First bmo eLearning program developed

Leaders trained each year through custom internal and university programs

1.5 million Hours of learning per year

$

93.2 million

Spent on learning per year

* As at 31 October 2015

218

T w o C enturies o f Ba n king by the Num ber s

BANKING SYSTE M STABILIT Y AND SOUNDNESS A comparison of national banking systems, 2006–15, shows the stability of Canada’s banking system in international context. In contemporary times, Canada has had the soundest banking system in the world for several years running. Canada’s consistent top ranking is the product

of a blend of long-term stability in government policy, prudential regulation, and sensible and results-focused leadership from both the central bank and the chartered banks.

Soundness of banks (on a scale of 1 to 7)

7

Canada Australia Hong Kong sar Singapore

6

Luxemburg Switzerland G7 Countries – less Canada

5

4

0 2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Years

Source: Global Competitiveness Report, World Economic Forum, Switzerland, 2006–07 to 2015–16.

T w o Centur ies of B a nking by the Num ber s

219

Pa r t T h r e e The Material Culture of bmo Banking Can objects have biographies? They undoubtedly have a story to tell. Some objects are common, with long lives of service. Others have highly specialized functions and are used by a select few. Yet others function as symbols – of power, authority, legitimacy, victory, service, community, connection, and relationship. The third and final part of this celebratory retrospective focuses on a range of artefacts drawn from the history of the Bank. The people of the Bank of Montreal have engaged with all sorts of material objects just by the nature of the business. The material world – the material culture – featured here is that of the common objects and the tools of the trade, as well as the symbols, of Bank life and experience. They are united by their power to tell an aspect of the Bank of Montreal story. Naturally, their number multiplied over two centuries, embracing an ever-widening circle of objects from head offices and branches throughout the land. A great many of them were prominent for well over a century, changing only slightly over time: deposit slips, passbooks,

ledgers, calendars, and so forth. Many have disappeared with innovation, new ways of doing things, and technological transformations. What, exactly, is material culture? Well, we know one thing it’s not: it is not cataloguing and describing objects. The key element in material culture, as my historian colleague Maureen C. Miller writes, is that “it focuses on objects as sources of human action and ideas.” There are no people in this section, but people are absolutely integral. They used these objects; they worked with them; they imbued them with a particular meaning in time and space. The study of material culture is not just about the beautiful or valuable but also the useful and the everyday. It has been used by people in disciplines such as anthropology, archaeology, art history, and history itself. The first two parts of this book have shown how the history of the Bank of Montreal can be uncovered, discovered, and reconstructed from the historical record. The chapters and their entries are based on archival sources. This section, however, makes the history more inclusive

and multi-faceted. By broadening our source base, and by embracing the interesting and diverse material culture that the Bank has produced over two centuries, we get a fresh perspective on the meaning of the historical experience not only of the Bank of Montreal but also, in a wider frame, of Canadian banking. The material objects depicted here represent a virtual tour of the human and material experience within the Bank. Twenty-five have been chosen for both their symbolic value and their relevance to the lived experience of the Bank, its employees, and its customers – but even multiples of that number would still not have covered the entire experience of the material culture of the Bank. However, each artefact tells a relevant story and exemplifies an aspect of the Canadian banking experience. Documentation of all sorts – from ledgers to stock certificates and passbooks – are prominently represented and allow us to pull back the veil on practices, operations, and actions of bygone eras. Some artefacts tell the story of money: how it was handled and how the ‘grammar of money’ – its role, its function, and its cultural meaning – was transmitted. Other elements represent the engagement of the people of the Bank in a larger corporate or banking culture. Some reveal new relationships with groups, nations, and communities. More than a few are technologically based. There is even a lion and his cubs, who were born and currently live in Chicago. The direct encounter with material culture – with a single material object, sometimes only vaguely familiar, perhaps a relic of the past – can be both revealing and stimulating. It forces the contemporary viewer to confront an often-unfamiliar aspect of history – or to put it more bluntly: to confront how much we don’t know about the past and the lived experience of people. At its best, a focus on the material culture can lead us to ask new kinds of questions. It can also serve as a tangible point of entry to learn about an aspect of banking that has long faded from memory, replaced by new and more direct methods and objects.

222

Th e M ateri a l C ulture o f b m o B a nki ng

THE “M ILLER” CHEST

T

he “Miller” Chest has occupied an unassuming corner of the Bank’s museum in Montreal Main Branch for decades. This first seemingly innocuous artefact was named for the man who built it sometime in the latter half of the eighteenth century. It predates by at least two decades the establishment of the Bank itself. The chest is the nineteenth century’s answer to the challenge of protection of valuables in transportation. By contemporary standards it is, of course, rudimentary. But this chest and a few others like it that have not survived have been in dangerous and forlorn places: in the back of a stagecoach, dragged through the snow, hauled through brush and forest, and through the worst that a northeastern North American climate could throw at it. It would have crossed rough terrain, rivers, lakes, and international borders. Because of its contents – the wealth, treasure, and vital information of the Bank and the merchants and customers it served – the chest was one of the most anticipated objects to arrive in settlements and military outposts with precious currency and specie, not only for bankers but also for their expectant customers. It is an artefact clearly intended for utilitarian purposes only: anodyne, anonymous, just a black box, nothing to attract attention. These treasure chests of yore were, of course, also great objects of desire and perpetually in the crosshairs of highwaymen and criminals. Often, a decent portion of the wealth of the community would end up in these chests, destined for more secure places or for investment. The chest is very much a physical reminder of the hardships endured in early Canadian banking. The Bank received the chest as a gift in October 1943 from Katie Drummond of Kingston, Ontario. Her father was Andrew Drummond, a lifelong Bank of Montreal employee who joined the bank in 1847. Her more famous uncle was Sir George Drummond, a general manager and later president of the Bank. The M ater i a l Cultur e of b m o B a nking

223

DEPOSIT LEDGER NO. 1

The First Database

T

he deposit ledger was not only vital to the business of the Bank – in many ways it was the business of the Bank, encapsulated in the oversized book form. More than any other artefact, these ledgers symbolize the early business of banking. They were, in a sense, the earliest principal database of the Bank of Montreal. Shown here is “Ledger A, 1817,” a general account ledger for the Bank spanning the years 1817 to 1820. The ledger covers an impressive range of the Bank’s business. The names of personal and corporate accounts fill the pages. In this particular ledger, the head office accounts for instalment payments for the original

shares in the Bank are recorded as well as exchange bills drawn and purchased, notes sent to Quebec for collection, interest accounts, and dividend payments. It also covered bills payable and receivable, cash on hand, and real estate and expenses. Banking, like life insurance, for example, was an information-intensive business from the outset. Accounts and ledgers were only the beginning: the entire structure of credit reporting and credit worthiness would become an important part of the business of banking as well. Later, adding more sophisticated tools such as economic reports, summaries, economic forecasts, and similar ‘networked’ statistics brought both depth and intensity to the Bank’s emerging world of information. So, at the very deepest layer of the history of the Bank, at its foundations, you will find the ledger – the ‘accounting’ soul of the Bank. This ledger appears

at least a generation or two before the emergence of accounting as a professional activity in both Britain and the United States – in the mid-nineteenth century, when it was defined by a prominent American author of the period as “the art of keeping Accounts in such a systematic mode, that we may be enabled to know the real state of each branch of our mercantile transaction with ease and promptitude.” By the later 1800s, ledger-based bookkeeping began to take on a more scientific aspect, with new ways of organizing account classifications and spawning the creation of the accounting profession. As the Bank grew and the banking system developed, the need for a more systematic approach to the procurement and recording of accurate information was required, revealing something approximating ‘objective truth’ in flows of capital and information into and out of the Bank.

THE CERTIFIC ATE OF STOCK

T

o the contemporary eye, this stock certificate looks standard enough, especially since stocks – in banks and virtually every other area of economic activity – constitute the universal language of capitalism, investment, and ownership. The original organization of the Bank under a joint-stock form allowed a group of Montreal businessmen and merchants to get together to establish and manage their new venture. Other banks, by contrast, could often be privately owned or run as family concerns, private banks, or limited partnerships. The Bank’s relationship to the stock certificate is a deep one. The shares in the “Montreal Bank,” were among the first shares to be issued in Canada. In the late 1810s, banking forms and institutions were only just taking shape across the North Atlantic world. Questions about private versus joint-stock forms of banking ownership and governance were being discussed and debated. How liable were the stockholders to be? The idea of “limited liability” for bank stock did not develop until much later. A detailed prescription for stocks, dividends, and the responsibilities of stockholders was carefully laid out in the Bank’s Articles of Association. The capital stock of the Bank was initially £250,000 divided into shares of £50 each.

Bank of Montreal stock certificates like the one featured here became a consequential type of document in the emerging economic and financial life of Canada. With other bank and financial stocks, it helped to create an early securities market in the country and a more sophisticated financial system of trade and exchange along with it. The development of the Montreal and Toronto stock exchanges were the result. Remarkably, a Bank of Montreal share dividend has been declared in every single year of its 200-year existence with two exceptions: in 1827 and 1828. This stock certificate is dated 16 March 1839 and certifies that two shares are held by Duncan McFarlane of Quebec. The certificate is signed by Peter McGill, president of the Bank, and countersigned by Benjamin Holmes, the Bank’s cashier. It comes with a curious instruction: to transfer the shares of “Montreal Bank Stock to William Bailey, Assistant Commissary General, reserving to myself any dividend or bonus that may be declared and payable in 1839.” This was likely done for the most classic of reasons: McFarlane owed money.

The M ater i a l Cultur e of b m o B a nking

225

THE BANK’S CORPOR ATE SEAL

T

his impressive artefact is the official seal of the Bank of Montreal. Its origins have been lost in the mists of time, but the impression it makes is of the Bank’s historic coat of arms used after 1837. Corporate seals were, and in many cases still are, used to certify official documents, deeds, or acts. This particular seal indicated the formal sanction of the Bank, its signature through an embossed imprint into wax of an official act. Artefacts, however, are rarely that straightforward. The seal is also a symbol of the growing power and authority of the Bank in both colonial Canada and in the North Atlantic world. It stood for the legitimacy of the Bank, underwritten by the reputation of the institution and the personal probity of its leaders. It represented a promise and a guarantee. In a world where it was difficult to procure information and verify reputation easily, symbols and seals were tangible manifestations of security, legitimacy, and trust. They were also extremely difficult to replicate, unique in their rendering, and so carried with them an element of security. When business people or customers saw the Bank of Montreal corporate seal on a document, they knew immediately what it meant and who stood behind it.

226

Th e M ateri a l C ulture o f b m o B a nki ng

THE WILLIA M NOTM AN ALBUMS, 1884

I

n 1884, one of Canada’s most famous and most prolific nineteenth-century photographers, William Notman, was commissioned by the Bank of Montreal to take photographs of the members of staff. Notman accordingly agreed to send “first class artists” to all the branches and have photographs taken. Notman’s studio in Montreal grew rapidly in the late 1850s and 1860s, especially after his photos found royal favour with Queen Victoria. His influence was cross-border, moreover: nineteen of the twenty-six branches of his firm were in the United States. The idea of Montreal’s most prestigious photographer photographing staff members was, according to the internal correspondence of the era, “received with good favour” – as well it might be. Photographs, as Notman’s biographers perceptively note, were not only the most common icons of the age but they also “represented more than a mere chronicling of events, more than the creation of ‘likenesses,’ more than a new voguish aesthetic. Rather, they exhibited and conveyed to others a sense of the century’s dramatic dynamism.” Of course, there were practical reasons – there always are – for the Bank to commission photographs of its staff. But one suspects that during the 1880s, the growing pride in the Bank of Montreal as an institution, the confidence of its people, and their place in the past and future of the country all warranted capturing the images of those who were making it happen. Notman’s massive and historically precious photography collection is at Montreal’s McCord Museum. The Bank of Montreal Archives has eleven albums of photos from the studio of Wm Notman & Son.

THE DICTOGR APH, 1970s

T

his extraordinary telecommunications relic was used in the executive suite of the Bank’s Montreal head office. It functioned as a supplementary intercom system to provide direct connection among a relatively small number of executives: the call buttons labels indicate this machine served the top decision-makers of the Bank in the late 1970s. The names on the switchboard are: G.L. Reuber (former president), W.D. Mulholland (president, 1975–81; ceo , 1979–89; chairman, 1981–90), J.A. Whitney (former executive vice-president and chairman, Credit and Policy Committee), H. MacDougall (vice-chairman), W.E. Bradford (former deputy chairman), J.H. Warren (former vice-chairman), W.E. Bateman (former executive vice-president and head of Corporate and Government Banking), R.H. Call (former senior vice-president, Corporate Planning), G.E. Neal (former executive vice-president and treasurer), Robert Muir (former vice-president and secretary), and four others, including Richard O’Hagan, the Bank’s communications mastermind of the 1980s. Judging from the cast of characters immortalized on the call buttons, the conversations connecting through this device must have been, at the very least, interesting, frequently important, and often taking place on the verge of momentous decisions for the destiny of the Bank. As several chapters in this book attest, in almost every sense, the late 1970s and early 1980s was a time of technological change, reorganization, and transformation of the global financial services sector. In other words, there would have been no shortage of subjects to talk about.

228

Th e M ateri a l C ulture o f b m o B a nki ng

M EMORIALS TO THE WORLD WARS

the individual names of those killed in action. Gardner spoke briefly: “Here are inscribed the names of those whom we shall see no more. They were our comrades. We mourn their loss, mindful too of those who were

near and dear to them. While we are gathered here in this busy financial centre it is well to remind ourselves that there are values in life more precious than those dealt with in the market place.”

Montreal Head Office, 1923 and 1951

“T

wice in a quarter century, the call to arms was heard … and our young men were not found wanting.” So begins the memorial edition of the Staff Magazine of 1951. These ‘artefacts’ are not so much objects as memorials to those who gave their lives to King, Commonwealth, and Canada. Of the 1,414 Bank employees who enlisted for the Great War, 230 of the men were killed. In the Second World War, 1,450 employees enlisted, with 84 of the men killed. For the fallen of the Great War, the figure of Victory is their memorial. She measures 9 feet in height, sculpted in white Seravezza marble, and stands upon a pedestal of Botticino marble, 8 feet high, giving a total height of 17 feet. At the unveiling in 1923, Bank President Sir Vincent Meredith’s remarks were brief but poignant: “We have met here to-day with mingled feelings of sadness and of pride, of sadness because two hundred and thirty of the bravest and best of our staff, those to whom we looked to fill the highest positions in the service, will not return to us. Of pride, because they went forward at the call of their King and Country to save the British Empire from the ruthless domination of a foreign foe. This beautiful monument will for all time remain a memorial for their valour, and their self-sacrifice will be to all of us an inspiring and enduring memory.” The memorial wall was unveiled on 24 April 1951 by Bank President B.C. Gardner in front of a crowd of Bank employees and relatives of the honoured dead. Together with Gordon Ball, general manager, he read

The M ater i a l Cultur e of b m o B a nking

229

THE CIRCUL AR

T

he circular memorandum began in 1855 and rapidly became the key channel for command, control, and coordination of an expanding information network and branch system. It was issued from the head office, typically from the general manager. As the Bank grew and extended its operations across the country and deepened its involvement in the New York and London markets, the circular dealt with an expanding range of subjects. Between 1855 and 1922, the Bank generated fifteen bound volumes of circulars issued from the head

office to branches and agencies in the network. The early circulars were handwritten, then duplicated by letterpress. The advent of the typewriter facilitated the production and distribution of these administrative orders and guidance. The subject matter of these circulars, taken together, offers a detailed picture of the growing importance of the head office in chartered banking in Canada. The highly detailed and prescriptive nature also suggests that new methods of scientific management were being brought to bear on the banking system. The great challenge in a transcontinental network of branches is the risks associated with too much local autonomy; these circulars are an attempt to anticipate those challenges. The circulars also offer a mosaic of branch and agency openings, staff changes, and performance

bonuses for staff (which were publicly circulated!), statistical reporting, new policies, alerts, and the like. It is through the circulars that we see the pulse of the expanding operations of the Bank of Montreal – its challenges and the opportunities it was able to seize. The circulars reflect a great push to standardize procedures and reporting, especially as the Bank grew in the late nineteenth and early twentieth century. They were also concerned with the establishment of an economic intelligence network, often asking branch managers to report on competitive and economic conditions in their area. In many ways, these circulars laid a solid administrative foundation for the Bank to grow consistently and with the integrity that so distinctively marked its operations in this period.

THE PASSBOOK

T

he passbook was a booklet issued by the Bank to an account-holding customer for recording sums deposited and withdrawn. From the Bank’s earliest beginnings to very recent times, this document was one of the most highly identifiable physical connections between the Bank, the branch, the customer, and his or her money. It was a personal document and an official record. This small document passed routinely between customer and teller after each transaction, thereby earning its name. Passbooks were a small but customer-focused innovation in how banks dealt with the personal and collective information flows about accounts. It certainly beat having customers occasionally check the large, unwieldy ledger account books. The Bank of Montreal Corporate Archives has passbooks that date as far back as 1820 – three years after the establishment of the institution. The cultural significance of the passbook should not be overlooked. In 1952, the Bank of Montreal was the first bank to have a children’s wicket where youngsters could make transactions (usually deposits, and usually held in trust). In this instance, the passbook’s relationship with the younger generation attempted to instill a sense of the value of money, savings, and thrift – in the contemporary parlance, ‘financial literacy.’ There is no question that most passbooks told a highly personal tale – individual stories of earnings, savings, interest, and withdrawals; stories of big circumstance, lucky and otherwise; stories of triumph and loss, hope and aspiration; stories of endurance and perseverance. The rise and decline of the passbook chronicles how information and its associated technologies change the way accounts are managed and experienced. Advances in mechanization and information storage facilitate continuously less expensive, more comprehensive, and certainly more convenient ways to deliver personal information – from passbook, printed statements, and instant online access to up-to-date statements any time of day or night.

THE JOHN WOOD CLOCK

Time Lords

T

his impressive clock presided over the main banking hall of the Molson’s Bank building on St James Street. It was ordered for the Bank in 1866 from John Wood, a noted Montreal clockmaker whose clocks also kept the measure of the racing hour at the Grand Trunk Railway Depot. This artefact was chosen because of the importance of the measurement and passage of time to banking. It governs so many aspects of the business of banking – the precision of the work schedule, the timing of opening and closing (the famous banker’s hours), the time-release locks on bank vaults, the timed deposits and interest, and so forth. Time is no longer connected to eternity, but rather with measurement. We need to understand not only what an object is and how it looks but also what it means to the people related to it. This clock had a commanding presence in the banking hall – everyone at all times was not only aware of the time but could also read it. Its classic Roman numerals and ornate wood casing hearkened back to the past, yet hid something transformational about the prominence of time. The clock’s installation in the 1860s came in a milieu where time, like many other elements of contemporary life, were being more regimented and standardized. It was in this era, after all, that standard time zones were introduced. The industrialization of the North Atlantic world depended on greater precision and a loyalty to exactitude and the schedule. Telegraphs and communications hastened the pace. Complex transportation systems increasingly relied on standard time to avoid calamity. Time becomes a commodity. When time is money, we value every second differently. Now, sometimes a clock is just a clock. But for Canadian bankers of the Victorian era, as for their broader society, we can sensibly suggest that their era was one in which the concept of time was shifting, morphing, adapting into something experienced differently than that of their predecessors in the profession.

THE BANK OF MONTREAL CENTENARY M EDAL

A

Centenary Medal was struck in 1917 to commemorate the Bank’s 100th anniversary. The Bank’s leadership began preparations to celebrate the landmark event the year before, just as the First World War was reaching an awful intensity in Europe and ever greater numbers of Canadian troops were joining the conflict. The Bank had two of its favourite firms of architects advise on the medal: Barott & Blackader in Montreal and McKim, Meade & White in New York. The latter had been responsible for some of the Bank’s most famous and enduring architectural symbols. The medals were conceived and executed by American sculptor Ulysses Ricci, whose artistry can be seen in a range of architectural sculptures in banks and large enterprises across the United States. The obverse features the most recognizable architectural landmark of the Bank of Montreal: the domed headquarters at Place d’Armes – complete with rinascimento facade, six Corinthian pillars, and a pediment holding one of the largest sculpture groups in the country executed by Scot Sir John Steell. The reverse displays the Bank’s coat of arms, wreathed on the periphery with the names of the presidents and general managers in 1817 (John Gray and Robert Griffin) and 1917 (Sir Vincent Meredith and Sir Frederick Williams-Taylor). The gold medals were struck in New York and awarded to Meredith and Williams-Taylor. The silver medals were struck by Henry Birks & Sons and awarded to the board of directors and the executive, the managers, and others with a quarter-century or more of service. The bronze medals were given to executives and managers with less than twenty-five years of service. This medal and its history reveals a great deal more than what is on the medal itself. It also shows how the generation in command one hundred years ago

decided to commemorate their history, who was to participate, what exactly was to be celebrated, and why. The medals, and their strict distribution protocol, showed how the values of service and loyalty were cherished by the leaders of the Bank. General manager Sir Frederick Williams-Taylor paid very close attention to the execution, the images, the font, and the rendering of the medal: nothing was to be left to chance, because the medal would be left to posterity – and they were to be ready, at all costs, by 3 November 1917. The small

number of medals struck is a further indication of the particular nature of the celebration. Commemoration of the centenary of the Bank also occasioned a brief but informative pamphlet history of the Bank, the mounting of the names, in bronze letters, of the 1817 and 1917 board and senior executive on a wall in the Montreal Main Branch, as well as some other festivities.

The M ater i a l Cultur e of b m o B a nking

233

RULES AND REGUL ATIONS FOR THE BR ANCHES

B

ecoming a great Bank in the nineteenth and twentieth centuries meant a lot of things. One of elements successful institutions had to get right was how to effectively reign over an increasingly complex and often geographically distant bureaucracy whose main purpose was to handle money. The answer for the banks of the late nineteenth century was strict adherence to rules and regulations. The rule book offers a glimpse into the regimented world of turn-of-the-century banking. The rule book featured here was published in 1901 under the authority of Sir Edward S. Clouston, the

234

Th e M ateri a l C ulture o f b m o B a nki ng

general manager, and was the possession of Bank Officer Campbell Sweeny. It was prescriptive, precise, and pointed. It covered an extraordinary range of responsibilities and duties about the business of banking, his staff, and the wider world. Article 7 requires the manager to “keep himself informed of the general news of the neighbourhood”; Article 21 required that the manager would “ascertain the general habits of his staff, and, if they are such as may affect the Bank’s interests injuriously … the circumstances shall be reported to Head Office.” Other instructions covered everything from the nature and use of telegraphic communications to the handling of nitroglycerine for oiling locks. There were 371 rules in the rule book. This document is very much a product of its times: demanding and didactic in laying down the law.

Of course, officers of the bank would have entirely expected such a document to do so in order to “secure a regular and faithful administration” in the affairs of the Bank. The preface admonished every officer to “make the book a study so that there shall be no excuse for departure from its instructions.” But rules and regulations, in whatever way they were called, updated, or communicated thereafter, constituted a vital part of making the system safe, minimizing risk, and ensuring the smooth functioning of Bank of Montreal banking. Many of the non-managerial functions listed in this 1901 rule book are now carried out or assisted by information technology.

THE GOLD SC ALE

T

his artefact is a gold scale from the Bank of British North America (bbna )’s Dawson City branch. The bank followed the Yukon gold rush of the 1890s, establishing a branch in Dawson Creek on 19 May 1898 to serve the active and sometimes chaotic gold mining industry there. “Our instructions were to spare no expense in reaching our destination as soon as possible,” wrote the branch’s first manager, David Doig. The bbna was acquired by the Bank of Montreal in 1918, and maintained a vibrant branch network in the country. The scale could be found on a desk in a frame-andcanvas tent on Queen Street in Dawson Creek. The scale had travelled with Doig and two bank clerks,

E.O. Finlayson and J.F. Stow, for forty-seven days – by steamer, dogsled, pack pony, and canoe over 1,500 miles from Vancouver to Dawson City. The trek itself has become the stuff of legend. The intrepid bankers had also brought $202,000 in cash to open the bank. The scale was an essential tool not only for the nuggets that would come in for sale but also for the gold dust that was used as currency ($17.50 to the ounce in 1898). The branch eventually found more secure premises: a twostorey wood building, 970 square feet in area, complete with a steel-lined brick vault. The town itself was essentially one unpaved street along the riverfront with log and frame buildings occupied by trading companies, saloons, dance halls, and brokers’ offices. “Gambling seems to be the staple industry, and the fleecing of ingoing Klondikers was

carried on merrily with great success in the most open and barefaced manner possible,” reported Doig. The population of 4,000 would swell to 25,000 in the summer months at the height of the gold rush. The Klondike camp was estimated to have produced $200 million in gold in the several years following its discovery in August 1896. The scale pictured here is symbolic of the readiness of the Canadian banks to adapt to changing economic conditions and opportunities, and especially to serve the unique nature of Canadian economic development – much of which has involved resource extraction or mining.

The M ater i a l Cultur e of b m o B a nking

235

THE PROTECTOGR APH

T

his machine was invented in 1870 as a means of protection against cheque forgers. The machine pictured here is the Todd Check Writer manufactured by G.W. Todd & Co. of New York. The machine quickly gained widespread acceptance among banks and large enterprises, with the company claiming 85,000 in use across North America. Check Writers were used to print the face value on negotiable securities in relief so that the value could be both seen and felt. The fraudulent alteration of cheques, securities, cash certificates, bills, receipts, and other forms of exchange instrument was a continual challenge for financial institutions. This machine printed a mark before the digits in the face value, which made it impossible to change the amount after the cheque had been printed. The corrugated surface of the digit stamps was pressed into the paper fibres, which absorbed the special ink. This technique made it virtually impossible to erase or even chemically remove the printed money value. This machine is a testament to the power of the darker side of banking – the eternal struggle to keep money in the hands of those whose money it is, and out of the hands of those whose money it is not. The Protectograph was part of a long line of technologies aimed directly at keeping the bank and its customers safe from fraud.

236

Th e M ateri a l C ulture o f b m o B a nki ng

THE BLICKENSDERFER T YPEWRITER

T

he typewriter appeared at a time when the Bank and other information-intensive industries were beginning to collapse underneath the weight of the data and information they had to process. Information control and processing became not just a challenge but also an imperative. The typewriter was invented in 1873 by C.L. Sholes, a Milwaukee journalist, and marketed by the Remington Arms Co. in the United States. The technology went through various iterations and improvements, including the introduction of “ten-finger typing.” The diffusion of the typewriter would, in time, become an important influence in the unfolding information revolution of the late 1800s by allowing faster processing of data and a reduced dependence on often hard-to-read handwriting. The typewriter was also a key agent in the transformation of nineteenth-century management, putting it on a more solid systematic and ‘scientific’ basis. The typewriter also began to change the organization of work and the composition of the workplace. The skills demanded by the typewriter, as well as the growth in office jobs generally, opened doors for women to enter the workplace. By the end of the century, the majority of stenographers and typists were women. The Bank’s adoption of new information processing technologies such as the typewriter allowed it to manage its growing business both at the local point of contact in the branches and in the regional and head offices. As we have seen with other artefacts, banking was becoming a highly regulated and regimented business. In fact, it had to be in order to stay on top of its growth and the increasing complexity of managing a large enterprise. The typewriter can be considered the workhorse of the information age at the turn of the twentieth century. The typewriter pictured here was invented by George C. Blickensderfer. It was a small, portable

writing machine that had the advantage of changeable type styles – a unique design feature. And the Blick typewriter was priced lower than the more expensive models. It had yet another advantage: it was one of the first truly portable typewriters with a full

keyboard – not the qwerty keyboard most of us are used to, but the dhiatensor keyboard. The Blickensderfer Model 7 seen here, offered in 1897, was the deluxe version of the basic design.

LEDGER FOR FOREIGN AGENTS, 1885

“F

oreign Agents Ledger 14th July 1885 to 30th April 1901 Bank of Montreal Head Office, No. 10” is a record of the Bank’s transactions between itself and its international agencies and foreign banks. The entries span the North Atlantic world, detailing the Bank of Montreal’s connections with its Chicago and New York agencies, the Bank of New York, the National City Bank of New York, and several other New York banks. The ledgers also detail the relationships between the head office and the branch at St John’s, Newfoundland. The London sections are particularly noteworthy, as the Bank was active in the City through its own agencies and operations there, as well as with the Bank of Liverpool. Their handling of the Dominion of Canada accounts in both London and New York were especially relevant. The connections into the North Atlantic world of finance exemplified here extend back to the very beginning of the Bank’s operations. Three months after the Bank opened for business in November 1817, Prime, Ward, and Sands were appointed agents of the Bank in New York. For the main Canadian colonial bank, such links were vital to the success of the Bank as the capital markets in Canada were slow to develop. The networks of finance and capital that were so created – and that are in a sense captured in this foreign agents’ ledger – reveal a kind of first wave of globalization that was binding together the North Atlantic world in the nineteenth century. As a country that depended so heavily on international connections and terms of trade, the Bank of Montreal’s connections and correspondences helped to generate, foster, and strengthen Canada’s bonds of commerce and exchange with the rest of the world.

VICTORIAN CRYPTOGR APHY

s described in Speed, Distance, Access, page 89, and bmo Bankers and the Dream of Nation, page 149, the telegraph was a vital part of the transportation and communication revolution of the nineteenth century. It heralded the death of distance and the acceleration of decision-making. It was vital to the information and control-processing revolution. For financial institutions, technological transformation, then as now, can lead to complete financial transformation. Transmitting intelligence and sensitive financial data through public telegraph lines demanded a code language. The one developed by the Bank was

continuously updated down the years. As the introduction to one such codebook (in 1960!) suggested: the codebook’s purpose was “to conceal the meaning of messages and to minimize telegraphic charges. Important or confidential messages should be closely coded in order to disguise the meaning as far as possible; where there is not the same need for secrecy, economy of words is the primary objective.” The codebooks were high-value intelligence documents and so were kept in a safe or a locked compartment in the custody of the manager or accountant. The chain of custody during office hours was carefully set out, and only authorized personnel would be able to see or use the codebook. Here are some examples from the 1887 codebook of the kind of cyphers used – randomly selected and perhaps unintentionally amusing!

Information

Information in Cypher

The Number “2”

Above; in Pounds Sterling: “Abreast”; in Dollars: “Abridge”; in Cents, “Abridgement” “Extort” in Pounds Sterling “Extorted”; in Dollars “Extols” “Furnishes”

Telegraph Codebooks

A

The number “10 Million” “Cannot Open Vault; lock out of order; have sent for locksmiths to ____: Panic in Montreal Panic in New York You have made a mistake – Bank of Nova Scotia Bank of Toronto Baring Bros. & Co. Bank of Montreal Head Office Canadian Bank of Commerce Bank of England

The Bank of Montreal Corporate Archives has a collection of telegraph codebooks from 1878 to 1965,

“Jerking” “Jerks” “Notoriety” “Raging” “Ransack” “Rational” “Plutonic” “Remember” “Plodding”

including those from the Merchants Bank of Canada, the Molsons Bank, and the Harris Bank in Chicago.

The M ater i a l Cultur e of b m o B a nking

239

M INUTE BOOK H, 1905–09

T

he Bank’s Minute Books began the official record of the meetings of the board of directors on 9 August 1817 and have continued since. The books form a virtually complete factual record of the decisions taken by the board, including the opening and closing of branches, the hiring of personnel, loans, advances to companies, note circulation, new currency issue, and the like. The Minute Book is, therefore, one of the classic documents of Bank of Montreal history. This particular Minute Book records the decisions and actions of the board between 26 December 1905 and 26 August 1909. More than a few entries deal with counting and burning notes in circulation (an important board responsibility at the time). Approvals for loans made, bills discounted, and exchanges purchased also figure prominently. This period was also witness to a number of acquisitions that required board approval, in particular, the purchase of the Ontario Bank in 1906 and the People’s Bank of New Brunswick in 1907. What you typically won’t find in these Minute Books are debates and proceedings. Who said what, who agreed and disagreed, who objected, who promoted a cause – all of those elements need to be sought elsewhere in the historical record. What the books do contain, however, is a precious weekly account of the emergence of Canada’s senior bank. In contemporary times, boards naturally do not meet as frequently – typically on a monthly basis. The Minute Books contain the tangible results of the strategies deployed, the decisions and risks taken, successes celebrated, and dangers confronted or averted. Reading them from week to week, cover to cover, volume to volume offers a glimpse at the structure and construction of Canada’s first bank.

240

MONEY BOXES

M

oney boxes, penny banks, piggy banks: whatever the name, the desire to secret away hard-earned coins is as old as the notion of saving itself. The origins of the folk practice of using piggy banks is said to come from the habit of using clay jars (‘pygg pots,’ named after the rudimentary type of clay used to make pottery). By the nineteenth century, these piggy banks became objects of pleasure meant to inspire children to the virtue of thrift while having a bit of fun in the process. It was a practical but subtle way to induce financial literacy in the young! The choice of theme underscored moral principles or lessons: a mother eagle feeding its young, or the recalling of a familiar and popular story. The two mechanical money boxes pictured here from the Bank’s heritage collection do both. The first is the “Eagle and Eaglets” – a cast-iron bank with a large eagle standing on one side facing two of its young in the nest. When you place a coin in the eagle’s beak and press a lever, the eaglets rise from the nest looking for food. As the eagle bends forward to feed them, the coin falls in the nest and disappears. The device was patented by Charles M. Heen of Chicago in 1883 and made by J. & E. Stevens Co. The second bank is called “Jonah and the Whale” – a rectangular cast-iron coin box with the biblical personage Jonah in a small boat on top at one end and a whale at the other. A coin is placed on Jonah’s back, a lever is pressed on the left side of the base, and Jonah is ‘swallowed’ by the whale (as in the Old Testament story from the Book of Jonah) – and the penny, of course, follows. The bank was patented by Peter Adams in 1890 and manufactured by the Shepard Hardware Company.

CHA M PIONSHIP TROPHY, MONTREAL BANKERS HOCKEY LEAGUE

T

242

he artefact pictured is a sterling silver trophy on a wooden base, presented by the American Bank

Th e M ateri a l C ulture o f b m o B a nki ng

Note Company to the Montreal Bankers Hockey League in 1911. Growth of the Bank across the country as a financial institution also meant growth as a social and cultural institution. The corporate culture of the Bank is expressed not only in its values, principles, what it does, the tools it uses, and how it works but also in the way it plays. For the people of the Bank in the head office and the branches, being a Bank of Montreal employee

involved a tangible sense of belonging, an esprit de corps that has manifested itself in vastly different ways across time and space. In the first part of the twentieth century, Canadian business institutions from finance to manufacturing were spawning large corporate organizations burgeoning with young clerks and aspiring professionals looking for something more than work. Naturally, many of them turned to hockey. The Montreal Bankers Hockey League was established in 1903 when Bank of Montreal President Lord Strathcona offered a cup to the best bank-clerk hockey team. Many major branches across the country fielded teams, and the leagues were in hot competition. As this artefact shows, the major struggle between 1911 and 1922 for the championship of the league was between the Bank of Montreal and the Royal Bank of Canada, with the Bank of Commerce firmly in third position. During those years (with a break during the war years), the Bank of Montreal won the trophy three times, the Royal Bank twice, and the Commerce once. Branches from other cities such as Toronto, Hamilton, Winnipeg, Saskatoon, Edmonton, and, in fact, most every other major city in Canada also fielded competitive teams in their district and in a number of leagues (Commercial League, the Bankers Hockey League, the Financial Hockey League, and a host of others across the Dominion). Some of the players would go on to play nationally in professional leagues. Bank hockey matches routinely attracted impressive numbers: in Montreal, between 4,000 and 5,000 fans would come to every game and cheer on their team. Hockey was not the only sport in which Montreal bankers competed, and the sports were not restricted to men. Tennis was popular beginning in the 1930s (especially women’s singles). Skiing became particularly popular in the 1970s and 1980s. Each generation seeks recreation and pursues leisure in different ways. Generations of Montreal bankers turned to sports in large numbers, as individuals and as members of teams, playing on fields and in arenas across the country.

THE PENSION FUND SOCIET Y SEAL, 1884

T

he Pension Fund Society of the Bank of Montreal was established on 1 July 1884 with assets of $263,677. It was organized to provide for retired Bank officers and employees “incapacitated through age or infirmity,” with a provision for annuities to widows and minor children upon untimely death. An Act of Parliament was passed officially setting the Society into legislation on 1 May 1885. Bank employees initially established an organization for this purpose in 1860; at that time, it involved up to two-thirds of the officers of the Bank. The original provision was to pay a pension to any employee of the Bank with ten or more years of service, who was over sixty years of age, and declared to be incapacitated or infirm from properly performing his duties. The pension was to be 1/50th of his or her salary at the date of superannuation for every year of such service in the Bank up to 35/50ths of the salary. It was also not to exceed $5,000 per year. The terms and rules changed substantially over time of course, and as the Bank grew. The pension fund was among the early examples of its kind in Canada. Its private nature meant that provision for long-serving employees could be made while creating a pool of capital that could be invested for future provision. The bylaws and structure of the Society have changed significantly down the years, but the Society itself is one of the longest-running pension funds in the country. In June 2015, members approved the Society’s dissolution, and in February 2016, the pension plan transitioned to a modernized trust structure. This artefact’s date of origin is unknown, but it is likely that the 22-pound seal was struck not long after the incorporation of the Society.

The M ater i a l Cultur e of b m o B a nking

243

M ANUAL FOR TELLERS, 1965

244

Th e M ateri a l C ulture o f b m o B a nki ng

F

or most of its history in the last three generations, the Bank of Montreal has been one of the country’s largest training organizations – by virtue of its size and the necessity to confer constantly evolving personal, business, and technological skills across a widely distributed workforce.

This artefact comes to us from the 1960s and was required reading for every teller in the system. The booklet outlined the basic tasks and responsibilities of a teller, including sensible advice about handling cash books, cheques, frauds and forgeries, utility payments, payrolls, and such like. The language, tone, and attitude of this document represented a significant departure from its more, shall we say, didactic instruction manuals of the previous generation. The foreword begins: “As bankers, we are engaged in a service industry. Service means helping people .” There is an explicit recognition of the primacy of the customer and the importance of customer service. “The Bank of Montreal has nothing to sell except banking services,” the foreword continued. “Our competitors have the same services for sale. The only difference there can be is the more friendly and efficient manner in which the staff of the B of M render these banking services to customers and to the public.” The manual underlined the need for accuracy and precision in the teller’s work, but by far the greatest emphasis was on attitude toward the customer. “They are not an interruption to our work – they are the reason for it … We’re not doing the customer a favour by serving him; he is doing us a favour by maintaining his bank account with us. He is not an outsider to ‘my bank’; he is the most important part of it.” The emphasis on the role of the teller in the Bank was properly placed – they were, indeed, most often the first point of contact with the wider public. The teller position was also the employment entry point for women joining the Bank. In fact, in the Canadian banking industry of the 1960s, women comprised the majority of the workforce – in 1960, 55.6 per cent and by 1970, 67.1 per cent. In the coming years, that female workforce would begin to push beyond the confines of the counter wicket to the executive office to help guide the destiny of the Bank.

“… that thou mayest prosper …” THE BANK OF MONTREAL/ WASK AGANISH BELT, 1994

T

he Bank received this leather belt as a gesture of friendship from the Cree community of Waskaganish on the occasion of the opening of the Bank’s branch in the town, located at the southern tip of James Bay at the mouth of the Rupert River. In exchange, the Bank presented Billy Diamond, chief of the Waskaganish First Nation, a scholarship to be awarded to a top-performing student aspiring to a career in business.

This was the Bank’s first Aboriginal branch in Quebec. In order to serve the Cree community there, the Bank translated key banking forms and product brochures into Cree and recruited its personnel from the community. Information sessions on the banking system for elders, youth, and the broader community were also part of the integration of the Bank into Waskaganish. The Bank also became the official sponsor of the 1994 Inter-Band Aboriginal Games, in keeping with its commitment to the Aboriginal community. The Bank moved into Aboriginal banking in 1992, with Senior Vice-President Ron Jamieson as the Bank’s first executive in charge of the Aboriginal Banking portfolio. The objective: to contribute to the economic self-sufficiency of Aboriginal communities,

businesses, and individuals across Canada. This was the fifth branch of its kind on First Nations territory, with branches already on reserves in British Columbia, Northwest Territories, and Ontario. The Bank had also collaborated with the federal government to ensure that individuals and enterprises on reserves were eligible for small business loans and other forms of government incentives to promote business. In contemporary times, the Canadian Council for Aboriginal Business has recognized the Bank’s commitment to Aboriginal peoples with multiple Gold-level Progressive Aboriginal Relations (par ) certifications. Certification signals First Nations communities that these companies are good business partners, great places to work, and committed to prosperity in Aboriginal communities.

M-Bar Chic? THE PROMOTIONAL BOW TIE, 1977

T

his artefact comes directly from the Bank of Montreal promotional catalogue of March 1977. It featured a whole range of sales promotion aids to “familiarize you with various materials and concepts created to help your branch increase business.” The catalogue suggested that each aid could be considered a “specialized tool” to sell activities. The bow tie ($5.95 for the regular, $2.95 for the clip-on) was just one of a number of personal items for sale that included earrings, bracelets, cufflinks, tie bars, lighters, pencils, charms, and the like. The tie came in blue, brown, or burgundy. Branded clothing would likely not have suited every taste, but this comes down to us as an artefact of a particular age that began to test the limits of promotion. In its enthusiasm to promote the Bank’s services, the catalogue offered unorthodox, sometimes cool, sometimes lighthearted ways to get the message across. This branding also remains a way to telegraph the firm’s image in unexpected ways, while having the employee feel an additional connection to the institution. An M-Bar on a bow tie is fun and outlandish, and like the branded cigarette lighter, can fall in and out of fashion according to contemporary mores and tastes. What is elegant and chic in one decade may look dated in the next. Tastes and usages have evolved somewhat since 1977. Yet, the desire to promote your brand and perhaps have some fun in doing so seems to be a constant!

246

Th e M ateri a l C ulture o f b m o B a nki ng

bmo Harris’s Lionheart HUBERT T. LION

H

ubert is a cartoon lion who helped the Harris Bank introduce itself to the world of retail banking in the late 1950s. When the Harris bought the Chicago National Bank in 1960, Hubert’s image helped to establish a warm, friendly image for the Bank. By any measure, Hubert has been a remarkably durable and successful ‘spokeslion’ for the Bank and the most recognizable symbol in Chicago banking, for years vaulting Harris into the leading-bank position in terms of advertising. Hubert the Lion has a long pedigree. The Harris Trust and Savings Bank began using the lion as its symbol in 1911, but the Harris family association goes back to the bank’s founding in 1882. The cartoon character had several parents. Dr Agha, a New York art consultant, did some layouts that would prove to be the forerunner to Hubert. From this idea, Ben Laitin, Norm Houk, and Dick Weiner of Leo Burnett Company, an advertising agency, developed the cartoon character “Hubert the Harris Lion” in the fall of 1957 for the 1958 advertising campaign. Hubert first appeared in the Chicago Tribune on 26 March 1957. The bankers of the Harris agreed to the name – after some suggestions were considered and discarded (Harris, Leo) – and used the spokeslion for a savings advertising campaign. Later consideration of a possible name change elicited a memorandum from Hubert himself on 6 February 1958 (on Leo Burnett Company letterhead, however) agreeing to a “face-lift” but resisting any name change. “Hubert is just right for my new role. Aristocratic but not snobbish. Unusual but not bizarre. Faintly amusing but not snicker-making. Dignified but not stuffy. So why can’t I be Hubert, like I was christened … Shucks fellers. Why not just let me be? Hubert that is.” Hubert was a sensation, commanding widespread attention not only from the public but also from public relations professionals across the United States. He

was used in print from 1958 on. He debuted on tv in 1962 with a series of animated twenty-second spots and eventually became one of the most recognizable fictional animals in the United States, alongside Smokey Bear and Tony the Tiger. Hubert also knew how to draw new customers with Hubert-inspired promotions that set records. His popularity continued on television. He was reproduced in ceramic cookie jars, clocks, and the original Hubert doll. If Leo Burnett created Hubert, it was Chicago-area artist Sam Koukios (1929–2009) who standardized Hubert’s look. Koukios was the official Hubert artist for over three decades, called upon for virtually every advertising campaign when Hubert was needed. On Koukios’s death in 2009, Senior Marketing Executive Justine Fedak eulogized him as the artist who “brought so much character” to the lion, ensuring Hubert kept with the times. Hubert has become one of Chicago’s most recognized and beloved icons. He has also been one of the most successful advertising phenomena in the history of Chicago banking. Hubert has transcended his category to symbolize trust, comfort, and credibility in the Bank’s offerings and expertise. He has also become a cultural phenomenon with whom bmo Harris bankers are proud to be associated.

The M ater i a l Cultur e of b m o B a nking

247

EPI LO GU E

T

his book has presented a complex and comprehensive cross-section of two centuries of the history of the Bank of Montreal. I have tried to offer a fresh perspective about what we believe we know about the Bank’s history by momentarily taking 200 subjects out of their time-bound context. It gives us a chance to look at them in a new way, as if for the first time. It allows us to re-present them through a multi-dimensional yet integrated approach.

Subjects vs. Objects This book has dealt with subjects rather than objects – a subtle but important difference. A subject can simply be something that is a theme or an issue. It can also be a branch of knowledge. As an adjective, a subject becomes something affected by an occurrence or environment, subordinate to the power of another. As a verb, subject becomes something that causes or forces something to happen. By contrast, an object is acted upon, presented or placed before – as a material thing.

The people, the events, the symbols, the projects, the technologies, the environments, the buildings, and the elements that make up the Bank’s story were in varied ways, subjects. In vastly diverse arenas and time periods, they exerted influence and, at the same time, were shaped by their environment. Individually, each entry – from the founders, to the documents, to the days of decision, to the performance charts, to the special artefacts chosen to represent the material culture – forms a piece of the Bank’s history, contributing in its own way to the larger story, sometimes in epic ways, sometimes in infinitesimal. Without exception, each piece of the bmo mosaic contributes to a complex contemporary portrait of Canada’s first bank, and one of Canada’s founding institutions.

Revel ations This book allows the Bank to be seen through 200 different subjects over time. It has attempted to capture the richness and the complexity of the historical and contemporary record. However,

mere objects could not hope to portray that rich experience on their own. That much, I hope, is obvious. Thus, from researching and writing this book, there are some subtler elements about the making of the Bank of Montreal that I would like to share as a final reflection. They relate not to the many parts, but to the whole. In physics, unified field theory suggests fundamental forces and elementary particles, once thought distinct, diverse, or separate, can be considered a single field. This is an elegant metaphor for thinking about how things cohere together and what they tell us. So in this case, what does the Bank of Montreal’s ‘single field’ – its universe – tell us? What is first striking about the bmo experience through these two centuries is the dialectic relationship between dynamism and form, between the energetic ability to adapt and the structures that endure. (This relationship has been written about in other contexts, most brilliantly by twentieth-century scholar Paul Tillich.) Whether it was building a financial system, promoting

economic development, or competing in regional, national, and global markets, it was the people who made a positive impact at the Bank. The leaders mentioned here, and those countless Bank employees who made the Bank better and reside in posterity, were able to build a successful formula by striking the right relationship between the strategic response of the moment while envisioning and carefully building forms built to last, structures and reputations. Also striking are the subtle continuities that persist in the history of the institution. The differences are easily enough spotted. The contrasts between Edwin King’s Bank of Montreal (1860) and Bill Downe’s bmo (2017) create a high-definition portrait of discontinuities in strategy, style, attitude, vision, and mission. The continuities show how through ten generations, the people of this organization spent their best powers in building a Bank that aspired to build; a Bank that was deeply committed not only to its own people (leaders, investors, shareholders, employees), naturally, but also to a larger set of causes over time – nation building, community engagement, the development of specific economic sectors, securing the place of Canada in the financial world, and the list goes on. Not least, the foundation of the Bank’s business – the customer – has undergone a constant transformation across the centuries. So, a paradox: the ‘history’ shows that the Bank has been deeply engaged in something very much focused on the ‘present’ and the ‘future’: adaptation and transformation. Adaptation: to constantly changing environments – government, regulatory, market, customer-focused. Transformation: technological, strategic, administrative, social, cultural,

250

EP ILO GUE

national, regional, global. Those changes did not happen always at the same speed, nor with the same tools or strategies, but they happened consistently and, over time, responded to the unique circumstances that presented themselves. Each chapter shows that unbroken arc of history in one form or another: people, buildings, tools, advertisements – all of it. To borrow a popular contemporary phrase, all of it makes up the dna of the Bank of Montreal – the “instruction manual” for building life forms. For those who think, okay, most big Canadian banks share a large part of their dna , they would be right. Similarly, humans and chimpanzees share 98.8 per cent of their dna , yet the differences are obvious! That 1.2 per cent is crucial. The point is that institutions can be similar, and yet very different. So it is with each of Canada’s great chartered banks. So it is, in particular, with Canada’s first bank. It’s the combination, the sequence, the dna ‘pairings’ that make the difference and allow similar national and enterprise cultures to share much yet assert their uniqueness. I leave you with a final thought, one that dwells on both transformation and vision. The Canadian Museum of History in Gatineau features a remarkable work by Kwakwaka’wakw artist Beau Dick – a transformation mask. When the mask is closed, we see Raven. When it opens, we see the first human being between the split image of a bird flanked by two supernatural Wolves. At the Brooklyn Museum in New York, a mask shows Thunderbird; opened, it reveals a human face flanked by two lightning snakes. At the Field Museum in Chicago, a transformation mask created by Xániyus (Bob Harris) before 1893 (Kwakiutl, Vancouver Island) shows a shamanic figure when opened. These masks of the

Northwest Coast First Nations tell of change and transformation. The structure of these double masks allows them to show an outer mask and an inner mask, past and present, before and after, but all in a close relationship, both part of the same mask. The history of an institution as complex and deep as that of Canada’s first bank has striking parallels to these extraordinary cultural tools. Over time, a transformation takes place. What you see changes into something that is related, but distinct; unified, but somehow new and separate. Over time and space, over the course of this book, what one sees at the beginning changes into something else, but a shared connection always remains. In my introduction, I suggested that the vision to which people in the Bank across the generations aspired has been plural and multiple. It changed in substance over time. In the end, that vision ‘greater than themselves’ was ultimately about the future – how to succeed in it, how to secure it, and how to make it happen in a complex, uncertain, and competitive world. That’s the spirit that the Bank of Montreal carries with it into the next century of its experience.

ACKNOWLEDGMENTS

A Vision Greater than Themselves has been an ambitious project. It began life as a challenge: Chief Executive William A. Downe’s challenge to me to produce a history that was conceptually innovative, relevant, and broadly accessible, and that captured the spirit of the Bank of Montreal as a dynamic organization in time. Historians are at their best when they can meet the challenges that their audiences set for them. In large part that is what has animated the conceptualization, research, and writing of this book. My greatest debt, therefore, is to William A. Downe. From the commanding heights, some leaders can see how everything is connected in time and space – past, present, and future: a vision beyond. Bill is just such a leader. He is also someone who creates the conditions for great things to happen. I also take pleasure in thanking Mr Downe’s predecessor, F. Anthony Comper. Mr Comper’s support of forerunner historical projects helped to lay a foundation for both this project and for the definitive history that is to come. There are few who possess a greater or finer sense of the historical spirit than Tony Comper. My thanks, therefore, is not merely formal, but heartfelt.

Acknowledgments in books such as these have a danger of becoming name-checking exercises. I will try, instead, to give you a sense of my debt to people. The procession begins with the Bank’s Book Committee under the chairship of Brian J. Smith, who has watched the bmo universe unfold as it should for many years. Thanks are extended to him and to the committee. The fact that their work is not yet done (there is a definitive history on its way) is even more of a reason to thank them for their service thus far. David J. Montgomery has earned a special place as one of the project’s earliest and most convinced supporters. I thank Maurice Hudon, Paul Deegan, and Peter E. Scott for their counsel and commitment to this project. To this list, I add all those who helped us along the way with the procurement of hard-to-get images, dossiers, and statistics. There are so many who have also helped me personally on countless occasions. Thank you, John D. Stoneman, Charis Willats, Carole Lam, Nina Adloo, and Emily Rugole. My heartfelt thanks to the Bank’s Bicentennial Committee under the executive sponsorship of L. Jacques Ménard, cc , oq , whose personal support and friendship have been one of the most satisfying

aspects of my work. I also thank Claude Gagnon for his encouragement and generosity. This book would simply not have been possible without the assistance and enthusiastic support of the Bank of Montreal Corporate Archives – Yolaine Toussaint, archivist; Shawna Satz, associate archivist; and Erin Bienert, associate archivist. They have spent countless hours on thousands of requests and made the impossible possible. Thank you. Intense projects forge intense collaborations. Sometimes they create new friendships and connections. Ron Taylor of bmo has contributed a great deal to this project and has done so with an eye for the right image and angle, a superb work ethic, and a humanity that tamed passions and got things done. Thank you, Ron. Exceptionally, fortune or circumstance allows a figure to rise: the right person at the right time. Fiona M. Skelding is such a person. Fiona’s passionate intelligence, her spirit and insight, her unstinting support of bmo and its history, and her friendship have been an unfailing inspiration. Fiona, you have my sincere gratitude. Historian Tim Müller has been my assistant on this book since its beginning. His superior organizational

skills, research capacities, and high sense of professionalism allowed this project to proceed as smoothly as it did. Combine an extraordinary capacity for work, a commitment to operational excellence, and an extraordinary expertise in Bavarian beer – all of which were important in the making of this book – and you have a sense of the debt I owe to Tim. Thank you also for your loyalty and friendship. I reserve a special place of honour for Miada Neklawi, a vice-president of communications for the Bank. She has been the project’s guardian angel, guiding it from the very beginning. All institutions have their pathfinders, those who find a way. Miada has acted as both advocate and champion at key times. Thank you. The McGill-Queen’s University Press has been my home for two decades. Executive Director Philip J. Cercone has built an institution to the greater glory of Canadian publishing. To you, maestro, and to your team, my heartfelt thanks for your uncompromising commitment to producing books of the highest distinction.

252

AC KN O W LEDG M ENTS

Finally, I offer thanks to my wife, Flavia, my greatest supporter whose self-sacrifice has contributed in hidden but important ways to the success of this book. From different disciplines and perspectives these people have rallied together around the idea that their history matters, that it is worth doing right, and that it should be understood, celebrated, and shared. That many have done so with such professionalism, generosity, and warmth is something I shall always cherish. Their commitment pays eloquent tribute to the spirit of the contemporary Bank of Montreal.

Dr Laurence B. Mussio Montreal, Quebec June 2016

A N OTE O N SO U RCES

A Vision Greater than Themselves: The Making of the Bank of Montreal, 1817–2017 has relied on intensive and extensive research. A total of 30,000 pages of original research informed the direction and contents of this book. The author and his team compiled over 1,000 image options for the book, and reduced the 1,200 artefacts available at the Bank of Montreal Corporate Archives to a final twenty-five. After the chapters were outlined and related subjects were chosen, a research dossier that could run as many as 200 pages was prepared. It contained relevant sources from the Bank of Montreal Corporate Archives both in Montreal and Chicago as well as from several other public and private repositories in the North Atlantic world, including Library and Archives Canada and the National Archives of the United Kingdom. The dossiers included a variety of secondary sources drawn from the literature relevant to the subject matter at hand – biographies, articles, books, and monographs. In some cases, the records of the contemporary Bank of historical value but not yet in the archives were consulted. A few of bmo ’s divisions were also conscripted to offer assistance with specific entries, and especially with image procurement. In 2017, Whom Fortune Favours: The Bank of Montreal and the Rise of Canadian Banking, 1817–2017 will be published by McGill-Queen’s University Press, the

publisher of this book. The forthcoming book is a very different undertaking from the one you are reading now: it will draw on massive archival documentation to produce the first definitive, professional history of the Bank of Montreal over two centuries. As a substantial contribution to Canadian business history, that volume will include an extensive bibliography that will cover all the sources also used in this book. In the meantime, following is a reference list of direct quotations appearing in the text that come from an external source. Direct quotations that come from internal Bank documents or sources, or primary evidence from other archives and repositories, are not referenced here, but will be included in the scholarly work.

The Founders through Time page 6: “He believed that the existence and value of good [securities] should be made known to all potential buyers”: Jay Pridmore, Harris: A History of the Bank. page 10: “The object of this Trust is to give the investor of moderate means the same advantages as the large Capitalists, in diminishing the risk in investing in Foreign and Colonial Stocks, by spreading the

investment over a number of stocks, and reserving a portion of the extra interest as a Sinking Fund to pay off the original capital”: Neil McKendrick and John Newlands, f&c : A History of Foreign and Colonial Investment Trust. page 10: “it was the precocious talents of City lawyer Philip Rose”: Neil McKendrick and John Newlands, f&c: A History of Foreign and Colonial Investment Trust. page 10: “trustworthiness, security, prudence and reliability”: Neil McKendrick and John Newlands, f&c: A History of Foreign and Colonial Investment Trust. page 10: “be remembered as a zealous and wise reformer, and as the boldest judge who ever sat on the English bench”: Neil McKendrick and John Newlands, f&c : A History of Foreign and Colonial Investment Trust.

Determining Destinies: Leaders and Leadership page 14: “Commencement on the Grand Stage of the World”: Alfred Dubuc, “Molson, John (1763–1836),” in Dictionary of Canadian Biography, vol. 7,

University of Toronto/Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/ molson_john_1763_1836_7E.html. page 14: “reject all national distinctions”: Alfred Dubuc, “Molson, John (1763–1836),” in Dictionary of Canadian Biography, vol. 7, University of Toronto/Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/molson_ john_1763_1836_7E.html. page 15: “most striking figure in Canadian banking history”: R.E. Rudin, “King, Edwin Henry,” in Dictionary of Canadian Biography, vol. 12, University of Toronto/Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/king_edwin_ henry_12E.html. page 15: “Napoleon of Canadian Finance”: R.E. Rudin, “King, Edwin Henry,” in Dictionary of Canadian Biography, vol. 12, University of Toronto/Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/king_edwin_henry_ 12E.html. page 15: “King of Canada”; “a little God who dares to treat the representatives of all other banks”: R.E. Rudin, “King, Edwin Henry,” in Dictionary of Canadian Biography, vol. 12, University of Toronto/ Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/king_edwin_henry_ 12E.html. page 15: “truculent and uncompromising”: R.E. Rudin, “King, Edwin Henry,” in Dictionary of Canadian Biography, vol. 12, University of Toronto/Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/king_edwin_henry_ 12E.html. page 15: “very peculiar”: R.E. Rudin, “King, Edwin Henry,” in Dictionary of Canadian Biography, vol. 12, University of Toronto/Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/ king_edwin_henry_12E.html. page 16: “Greatest Creative Genius”: Alexander Reford, “Stephen, George, 1st Baron Mount Stephen,” in

254

A N OTE O N SO URC ES

Dictionary of Canadian Biography, vol. 15, University of Toronto/Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/stephen_ george_15E.html. page 16: “the greatest creative genius in the whole history of Canadian finance”: Alexander Reford, “Stephen, George, 1st Baron Mount Stephen,” in Dictionary of Canadian Biography, vol. 15, University of Toronto/Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/stephen_ george_15E.html. page 16: “doubt and difficulties vanished and hope and confidence revived”: Alexander Reford, “Stephen, George, 1st Baron Mount Stephen,” in Dictionary of Canadian Biography, vol. 15, University of Toronto/ Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/stephen_george_ 15E.html. page 16: “a masterpiece of the Italianate style in Canada”: Alexander Reford, “Stephen, George, 1st Baron Mount Stephen,” in Dictionary of Canadian Biography, vol. 15, University of Toronto/Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/stephen_george_15E.html. page 20: “There were men like him in London … but few in Canada.”: “Sir Vincent Meredith,” Journal of the Canadian Bankers Association, Spring 1929. page 20: “during the last 25 years there was hardly a … campaign launched for betterment of conditions of the relief of suffering, or the advancement of the city but had the encouragement and sympathy … as well as the practical support of this banker”: “Sir Vincent Meredith,” Montreal Daily Star, 24 February 1929. page 20: “it is not only the brilliance of his genius”: “Sir Vincent Meredith,” Montreal Daily Star, 24 February 1929. page 21: “Perhaps there is no other man in Canadian business life”; “whose career so aptly illustrates the reward of conscientious business energy as that of Chas. B. Gordon.”: “King Honors a Montreal Man,” Montreal Gazette, 25 August 1917.

page 21: “kindly demeanour and disarming modesty”: “Sir Charles Blair Gordon – Appreciations,” Times of London, 3 August 1939.

The Written World of bmo: Defining Documents and Directions page 33: “in firm support of Canada’s fighting men in the campaigns which must be undertaken before victory can be achieved”: Canada, Parliament, House of Commons, Debates, 17 May 1943.

A Grow th Business: bmo and Its Canadian Acquisitions page 48: “The immediate absorption of the Ontario Bank by the Bank of Montreal” … “is a most gratifying proof that our banking system and banking institutions are too strong to be shaken by even the worst effects of personal or corporate delinquencies. Instead of alarmed depositors and panicky noteholders who crowd to the closed doors of embarrassed banking institutions under less stable conditions, we witness the simple transfer of the accounts to the largest and strongest of our chartered banks. The injurious disturbance of commerce and finance which elsewhere attends and follows the forced closing of a banking institution is thus entirely averted, and the business goes smoothly on without a loss or inconvenience to the general public”: “Strength of Our Banking System,” The Globe, 12 October 1906. page 48: “the highest praise should also be accorded to the president and directors of the Bank of Montreal for their prompt action and assuming all the Ontario Bank’s liabilities to depositors and noteholders” … “all chartered banking corporations also feel a responsibility to the business community for the general stability of the fiscal system under which they operate, and are directly interested in maintaining that stability and sustaining unshaken the confidence of the public. The Bank

of Montreal has risen to all the demands of this broader responsibility and promptly assuming the liabilities of the Ontario Bank before the nature of its impairment could be known to the general public, and even before the story of its difficulties could obtain general circulation. Simultaneous with the story of personal mismanagement and recklessness has come the announcement that all the liabilities of been assumed, that accounts will be transferred to the Bank of Montreal, and that all obligations will be liquidated with open doors”: “Strength of Our Banking System,” The Globe, 12 October 1906. page 51: “wild days of rumours, much excitement on the stock market, and some concern among financial men generally”: “Merchants Bank to be taken over by Bank of Montreal,” Montreal Star – Late Ed., 16 December 1921. page 51: “adventurous banking carried on by the General Manager” … “transacted without the knowledge of the Directors”: “Editorial,” Globe 9 February 1922.

Days of Decision: Pivot Points page 55: “without fanfare”: Merrill Denison, Canada’s First Bank, vol. 1. page 55: “23d October 1817. the bank will begin its operations on monday the 3d of November next. Bank Hours from 10 o’clock a m to 3 o’clock p m . Discount days, Tuesdays and Fridays. Bills and Notes for Discount to be sent under cover to the Cashier on the days preceeding”: Quoted in Merrill Denison, Canada’s First Bank, vol. 1. page 58: “The Monetary King of Canada”; “the Napoleon of Canadian Finance”: R.E. Rudin, “King, Edwin Henry,” in Dictionary of Canadian Biography, vol. 12, University of Toronto/Université Laval, 2003–, accessed 11 January 2016, www.biographi.ca/en/bio/ king_edwin_henry_12E.html. page 61: “The corporate historian delving in to the archives of the Bank of Montreal a few decades

from now” … “probably will find that 1984 was a watershed in the institution’s evolution”: Tracy LeMay, “Domestic Shift, Takeover Reshaping Bank of Montreal,” The Globe and Mail, 6 April 1984. page 61: “Let me suggest to you a great pipe running from north to south through which flows $106 billion in trade a year, total volume and an undetermined amount of transactional items. We have a large apparatus at one end of the pipe … The economic activity between the two countries is so enormous that it is obvious logic to get yourself on both ends of the pipe”: Quoted in “$546m gets B of M U.S. Bank,” Toronto Sun, 5 September 1984. page 64: “marked by the emergence of new business models [and] the disruption of incumbents and the reshaping of production, consumption, transportation and delivery systems”: Klaus Schwab, The Fourth Industrial Revolution.

Currency, Cash, and Legal Tender: bmo’s Richly Denominated Legacy page 75: “Individually, many Newfoundlanders were skilled and seasoned survivors, but as a people they depended on a precarious export trade, with a narrow range of goods produced in the country’s basic and interconnected industries of fishing, forestry, and mining”: Peter F. Neary, White Tie and Decorations: Sir John and Lady Hope Simpson in Newfoundland, 1934–1936.

Speed, Distance, Access: bmo’s First-to-Market Technologies page 91: “It is not surprising”: “Bank of Montreal Introduces Fully Integrated Automatic Banking in Canada,” Toronto Stock Exchange Review, September 1963. page 91: “that the Bank of Montreal has taken the initiative to become the first Canadian bank to provide a fully integrated data processing operation”: Toronto Stock Exchange Review, September 1963.

A Sense of Pl ace: A National Architectur al Legacy page 97: “Certainly no other bank is in possession of such a room”; “and it is indeed very doubtful if the large American or even English cities can produce its equal either in size, decoration or appointment”: “Palace of Marble: Bank of Montreal Moves into New Premises Today,” Montreal Gazette, 15 June 1903. page 97: “probably the largest, and architecturally the most monumental, bank building in the world”: “Palace of Marble: Bank of Montreal Moves into New Premises Today,” Montreal Gazette, 15 June 1903. page 100: “the Wellington and Sparks Streets facades are heroic size relief panels depicting the future and past of Canada allegorically. Bronze and iron grilles have been used for the large windows at the ends of the building”: “The New Bank of Montreal Building,” The Journal of the Royal Architectural Institute of Canada 9 (September 1932). page 100: “a traditional temple bank in Modernistic guise”: “The New Bank of Montreal Building,” The Journal of the Royal Architectural Institute of Canada 9 (September 1932). page 100: “most noteworthy building project since the … head office enlargement of the turn of the century”: “The New Bank of Montreal Building,” The Journal of the Royal Architectural Institute of Canada 9 (September 1932). page 100: “severe, contained, classical composition”: “The New Bank of Montreal Building,” The Journal of the Royal Architectural Institute of Canada 9 (September 1932). page 113: “april 9 – a bank !”: Doug Bell, ‘Bank of Montreal Opens at Watson,” Whitehorse Star, Yukon, 28 April 1960. page 113: “The bank will be located next to the Watson Lake Trading Post … this year has begun with an important and necessary addition to the community”: Doug Bell, “Bank of Montreal Opens at Watson,” Whitehorse Star, Yukon 28 April 1960.

A NOTE ON SO URCES

255

page 116: “complete and final proof that banks have gone modern”; “freeform Danish teakwood furniture”: “Snorkles and Overdrafts,” The Vancouver Province, 22 October 1955. page 116: “Just think. You can drive from the office on pay day; cash your cheque; go to a drive-in restaurant for dinner and then on to a drive-in movie; go home without getting out of your car”: “Branch Bank Has Curb-Side Teller,” The Vancouver Province 21 October 1955. page 116: “one of the few managers in the country to own but one initial”: “Snorkels and Overdraughts,” The Vancouver Province, 22 October 1955. page 116: “You might think a bank is a bank, but when you find one that has dumb-waiters, and loungers for employees, and comfortable chairs for customers, and manager’s office that permits the public actually to see the boss sitting there keeping track of the income and the outgo, and handsome Danish furniture, and all and all, it is worth writing home about methinks”: The Vancouver Sun, 29 October 1955. page 117: “the last type of building one might have examined for symptoms of translucence would have been a bank. It says something for modern architecture that it has been able to overcome the reluctance of bankers and the banking public, and their need for an unsubtle symbol of reliability and security, to the point where [the Don Mills branch] could be designed”: “Two Branch Banks, Don Mills, Ont.,” in The Canadian Architect, October 1957.

“In the Cause of Architecture,” in The Architectural Record, March 1908. page 123: “designed to serve people rather than overwhelm them … There is no longer room for rampant growth. In this age, planners and builders more and more must look to creating functional, people-oriented structures rather than edifices for personal glamour or glory”: “Lady with a Hard Hat,” Daily Commercial News, 8 October 1975.

bmo’s Most Wanted: Protecting Your Money page 132: “The accommodation provided is unlimited and local business people and any who care to use it will find this security they can enjoy any time outside of banking hours much to be grateful for”: “Depository Installed,” Elora Express, 12 June 1958.

bmo Bankers and the Drea m of Nation

page 117: “so that costs would not get out of hand”: “Two Branch Banks, Don Mills, Ont.,” in The Canadian Architect, October 1957.

page 148: “The public opening of this important route took place on Thursday last under circumstances of peculiar interest … Among the guests who assembled on board the ‘Princess Victoria’ at about ten thirty a.m. were the Earl of Gosford, Sir Charles Gray, Sir George and Lady Gipp, Mr Elliott secretary of the Commissioners, and several of the Legislature Council and House of Assembly, also, a number of the mercantile body and garrison and many respectable strangers to the number of about three hundred”: “The public opening …,” Montreal Gazette, 23 July 1836.

page 117: “in the vanguard of a clarified understanding of the function of bank architecture”: “Two Branch Banks, Don Mills, Ont.,” in The Canadian Architect, October 1957.

page 149: “Victorian Internet”: Tom Standage, The Victorian Internet: The Remarkable Story of the Telegraph and the Nineteenth Century’s Online Pioneers.

page 119: “Architecture is life, or at least it is life itself taking form, and therefore it is the truest record of life as it was lived in the world yesterday, as it is lived today or ever will be lived”: Frank Lloyd Wright,

page 149: “allowed symbols to move independently and faster than transportation”: James W. Carey, Communication as Culture: Essays on Media and Society.

256

A N OTE O N SO URC ES

page 150: “Canada is one of the most over-rated Colonies we have, but it is heartily loyal and makes its loyalty pay … as for the country as a whole it is poor and crushed with debt. The Supreme Government owes about thirty-five million pounds altogether, and every province has its separate debt, as also almost every collection of shanties calling itself a ‘city.’ The Canadian spend money and we provide it. That has been the arrangement hitherto, and it has worked out splendidly – for the Canadians – too well for them to try another scheme with the Canadian Pacific, which they must know is never likely to pay a single red cent of interest on the money that may be sunk in it”: Quoted in John Murray Gibbon, Steel of Empire: History of the Canadian Pacific. page 152: “the lung of Canada, carrying commerce into our arteries and remote veins, expelling our goods, our wheat, our minerals”: Canada, Department of Railways and Canals, Welland Ship Canal. page 152: “has been unlocked by triumphs of engineering”: Canada, Department of Railways and Canals, Welland Ship Canal. page 153: “biggest bank financing venture in Canadian history”: Clair Balfour, “Churchill Falls Provided Credit of $150 Million,” Globe and Mail, 21 December 1968. page 154: “the biggest credit facility ever afforded a private, public or para-public company” … “undoubtedly one of the great success stories of 1977–78”: “Canadian Banks Form Group for $1.25 Billion Loan,” First Bank News, February 1976. page 154: “a good deal for both the borrower and lenders”: “Canadian Banks Form Group For $1.25 Billion Loan,” First Bank News, February 1976.

On the Pl aying Fields of North A merica : Sponsorships page 173: “forceful return to Canadian basketball”: Morgan Campbell, “Toronto Raptors, bmo

Team Up in Sponsorship Deal,” The Toronto Star, 28 October 2013. page 180: “They shared our vision for the entire community to become the State of Hockey that exists today”: “Minnesota Wild Announces Multi-Year Partnership With bmo Harris Bank,” 15 September 2015, accessed 11 January 2016, www.wild.nhl.com.

Cultur al Capital: Bankers and Art page 194: “magician conjuring up, out of the earth, out of his palette, giant trees, extravagant skies, a whole enchanted nature”: Jean Chauvin, Ateliers – Etude Sur Vingt-deux Peintres et Sculpteurs Canadiens.

Deposit Ledger No. 1: The First Database page 224: “the art of keeping Accounts in such a systematic mode, that we may be enabled to know the real state of each branch of our mercantile transaction with ease and promptitude”: T. Jones, Bookkeeping and Accountantship, Elementary and Practical. page 227: “represented more than a mere chronicling of events, more than the creation of ‘likenesses,’ more than a new voguish aesthetic. Rather, they exhibited and conveyed to others a sense of the century’s dramatic dynamism”: Gordon Dodds, Roger Hall, and Stanley Triggs, The World of William Notman: The Nineteenth Century through a Master Lens.

page 195: “Art is art, nature is nature, you cannot improve upon it … Pictures should be inspired by nature, but made in the soul of the artist; it is the soul of the individual that counts”: “Emily Carr, 1871–1945, National Gallery of Canada, accessed 11 January 2016, www.gallery.ca/en/see/collections/ artist.php?iartistid=915. page 197: “The driving force and the source from which I draw my inspiration stem from my desire to give plastic and artistic expression to the ancient Hebrew concept of reality, which differs in its essence from that of all other civilizations, and which, to my mind, has never found its true artistic expression”: “Israeli Consul Guest of Museum,” in Desert Sun, 28 January 1976. page 200: “all-knowing hand”: “Santana,” Maya Polsky Gallery, accessed 11 January 2016, www.mayapolskygallery.com.

Part Three: The Material Culture of bmo Banking page 221: “it focuses on objects as sources of human action and ideas”: Maureen C. Miller, “Introduction: Material Culture and Catholic History,” The Catholic Historical Review vol. 101, Centennial Issue 2015, No 1.

A NOTE ON SO URCES

257

IM AGE CREDITS

Images reproduced in this book but not listed below are used with permission from or courtesy of bmo Financial Group and/or Harris Bank, or are in the public domain.

Page 36: Photographer: Frank Grant.

Page 185: Photographer: Jim Ryce.

Page 56: Courtesy of McCord Museum, Montreal.

Pages i, 2, 33, 35, 45, 49, 62, 64, 82, 83, 85, 86, 89, 123, 127, 128, 133, 139, 141, 162, 201, 221, 223, 227–46: Photographer: Christian Fleury.

Page 81: By permission. Bank of Canada/Avec la permission. Banque du Canada.

Page 186 (top): Ginette Letondal as Katherine and Christopher Plummer as Henry V, Henry V, 1956. Photographer: Peter Smith. Courtesy of the Stratford Festival.

Page ii: Photographer: Jim Ryce. Page 7: Arthur James Nesbitt and Peter Alfred Thomson: Nesbitt photo courtesy of A.R. Deane Nesbitt, Dry Goods & Pickles: The Story of Nesbitt, Thomson (n.p.: A.R. Deane Nesbitt, 1989); Thomson photo courtesy of Thomson family. Page 10 (both): Philip Rose and the Rt Hon. Richard Bethell, 1st Baron Westbury, Foreign and Colonial Investment Trust plc . By permission. © National Portrait Gallery, London. Page 15: Edwin Henry King. By permission. Canadian Illustrated News, 14 June 1873, 373.

Pages 59, 130, 136, 226, 246: Photographer: Matthew Liteplo.

Page 186 (bottom): Photographer: Ernest Mayer.

Page 100: Courtesy of Bill Olson, Dominion-Wide Photographs Limited.

Page 188 (bottom): Courtesy of United Way Toronto & York Region. Photographer: McPherson Photography.

Page 115: Courtesy of Libertyville-Mundelein Historical Society, Libertyville, Illinois.

Page 188 (top): By permission. Wisconsin Historical Society, whs -2690.

Page 118: Photographer: Jacob Hand.

Page 191: Photographer: Guy L’Heureux.

Page 119: Courtesy of Rachel Bankowitz, Wisconsin Historical Society – Public History.

Pages 192, 193, 195, 196, 199 (all): Photographer: Toni Hafkenscheid.

Page 143: Photographer: Matthew Gilson.

Page 194: © Fondation Marc-Aurèle Fortin/sodrac (2016). Photographer: Toni Hafkenscheid.

Page 149: Courtesy of Bell Canada Historical Collection. Page 150: Courtesy of Exporail, le Musée ferroviaire canadien / fonds Canadian Pacific Railway Company. Page 151: Courtesy of McCord Museum, Montreal.

Page 25: W.D. Mulholland. © V. Tony Hauser.

Page 171: Photographer: Bill Smith.

Pages 29, 31, 32, 202, 224: By permission. Restoration carried out by the Centre de conservation du Québec. Photographer: Christian Fleury.

Page 182: © 1995 Matthew Gilson. Page 183: Courtesy of St Michael’s Hospital, Toronto. Page 184: Courtesy of Rotman School of Management, University of Toronto.

Page 197: © 2016 Artists Rights Society (ars ), New York/adagp , Paris. Photographer: Alan Klehr. Pages 198, 200: Photographer: Alan Klehr. Page 215: Photo of Pauline Vanier courtesy of Concordia University Records Management and Archives. Photo of Deanna Rosenwig by Jean Desjardins.