MGMT 1030 Lecture Notes - Lecture 10: Financial Statement, Canadian Business, Consolidated Bank Of Canada

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20 Jul 2016
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Study Questions for Henry Klassen’s “Cowdry Brothers: Private Bankers in
Southwestern Alberta, 1886-1905”
1)What was the family background of Nathaniel and John Cowdry and, apart from the
banking business, in what other economic activities were they involved?
There father was a physician and surgeon who had his medical practice in Toronto for
more than 20 years. Nathaniel Cowdry started working at the Royal Canadian Bank and
soon became ledge keeper in the office. Before opening a bank, they spent four years in
the farming industry in Regina.
2)What were the similarities and differences between the Cowdry Brothers bank and
regular chartered banks?
Similarities:
Their bank offered usual financial services as other banks. The Bank lent money, opened
deposit accounts, and processed cheques for its customers in the same manner as
chartered banks performed these functions
Differences:
-Bank was unincorporated
-Their bank was much smaller than a regulated charter bank,
-No note issuing privileges
-Was under no obligation to provide the federal government. with financial statements
-Unaffected by legislative control of interest rates
3)What was the relationship of the Cowdry Brothers bank with other banks?
The relationship with the Cowdry Brothers bank and other banks was competitive. As a
result of the increasing competition from another bank their region the Cowdry Brothers
decided to close one of their branch banks and sell another branch bank to the Union
Bank. The Cowdry Brothers bank also borrowed money from other chartered banks
(Canadian Bank of Commerce) which allowed them to fund greater loans and enhance
the growth potential of their bank.
4)What were the loan practices of the Cowdry Brothers bank and what sectors of the
Alberta economy benefited from the bank’s credit?
The Cowdry Brothers bank had a good relationship with their customers. When
customers requested more time to pay their loans their requests were usually granted.
They would continuously renew credit to their customers (whether short or long), and if
customers were deemed credit worthy they were given more time to pay their debts. The
Cowdry Brothers provided loans to ranchers who needed funds to improve and expand
their herds. The ranching industry and farming industry benefited from the bank’s credit.
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