MGMT 1030 Lecture Notes - Lecture 21: World War I, Federal Reserve Act, Money Supply
8 May 2018
School
Department
Course
Professor
MGMT 1030
Lecture 21
Chartered Banks in Post-Confederation Canada
- Dominion Notes Act of 1870
o Banks required to hold ½ of cash reserves in Dominion notes
o Bank Act of 1871
o Double liability provisions legislated (important to have a very
financially stable system)
▪ Not only did you lose your investment, but you also had to
pay its current stock value
o Increased reporting requirements
o Currency in circulation backed by acceptable gold reserves
- # of chartered banks declined from 1880 to 1930; but # of branches
increased (increased population)
- Pushed by up and coming entrepreneurs that wanted to encourage
and support industrialization
- BNA laid out provincial and federal obligations
- Financial responsibilities were allocated to federal government
o Stronger system to support industrialization; currency, coinage,
banking incorporation of banks, issuing of paper money
Bank of Canada
- International Bank Panic 1907
o Chartered banks reached limits to pay out bank deposits
(people wanted to take $ out, but there wasn’t enough to pay
out)
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
# of chartered banks declined from 1880 to 1930; but # of branches increased (increased population) Pushed by up and coming entrepreneurs that wanted to encourage and support industrialization. Bna laid out provincial and federal obligations. Financial responsibilities were allocated to federal government: stronger system to support industrialization; currency, coinage, banking incorporation of banks, issuing of paper money. International bank panic 1907: chartered banks reached limits to pay out bank deposits (people wanted to take $ out, but there wasn"t enough to pay out) Bank of canada established in 1935 central control of canada"s money supply: initially controlled by private interests but transferred to federal government control in 1938, after wwii, b of c helped control interest rates. 2nd ir larger corporations require larger amounts of capital financing. Us banking system allowed banks to entirely own other financial companies (i. e. investment companies) Us glass-steagall act 1933 to regulate and prevent conflicts of interest.
