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York University
Administrative Studies
ADMS 1010
James Love

Class 1 Relentless change pp 114Laying the foundations 18051905 IntroductionthMid 19 century 1850s British north America was made up of United province of Canadamodern day Quebec and OntarioNova scotia New Brunswick PEI Newfoundland Vancouver islandThe interior contained 3 territories 1Ruperts landmuch of the north all the area around the Hudson bay 2North west territories 3 New CaledoniaThe British north America act The act also known as the BNA Act comprises a major part of the Constitution of Canada The Act entails the original creation of a federal dominion and sets the framework for much of the operation of the Government of Canada including its Federal structure the House of Commons the Senate the justice system and the taxation system Ruperts land was then added to the dominion of Canada in 1869 after it was acquired from the HBC Public policy Two major public policy statements were particularly significant in the government playing an important role in the business and economic developmentsBNA actBritish North America act 1867 Other than creating the dominion of Canada the act also allocated responsibilities between the federal and the provincial authorities The federal took responsibility of things like regulation of commerce currency and bankingNational policy 1878 The National Policy was a Canadian economic program introduced by John A Macdonalds Conservative Party in 1876 and put into action in 1879 It called for high tariffs on imported manufactured items to protect the manufacturing industry Macdonald campaigned on the policy in the 1878 election and defeated the Liberal Party which supported free trade Three main parts 1 The settlement of the west 2 The building of a transcontinental highway 3 The adoption of protective tariff This was influenced by the heavy reliance on trade Financial systems Through the BNA act the federal government was given powers over currency banking as well as life insurance This played an important role in the development of Canadas financial systemThe passage of the Bank act in 1871 ensured a sound currency and a nationally regulated banking systemOne of the requirements of the Bank Act was that it is renewed decenniallyevery 10 yrsto ensure that legislators will periodically update the Act in order to keep pace with developments in the financial systemBankingIn the early years of the confederation most major financial institutions were banks But also important life insurance companies as well thas mortgage loan and trust companies had emerged In the early 20 century there were 37 banks in Canada with HQ mainly around the Toronto and Montreal area Other financial intermediariesAlthough banks started off to be the dominant financial intermediaries mortgage loan companies life insurance companies and other financial institutions soon took overThe government responded by supporting this growth and even appointing superintendents to oversee some of those industries Entrepreneurs Among the earliest entrepreneurs were the French fur tradersThey helped out the HBC After that some traders fro Montreal started developing trade and competing with HBCThe financial systems that were in place made it simpler to obtain capital which helped increase the number of entrepreneurs Large non financial corporationsth Agriculture played a dominant role in the economy in the mid 19 century and was by far the greatest employer Railroad building was another great business as well as mining Some manufacturing companies then started to emerge RailwaysthoIn the mid 19 century the principal method of transportation where steamboats on lakes and rivers and the stagecoach on land Thing changed dramatically with the introduction of the railway construction industry At first it was composed of thhundred of small companies that eventually merged into large corporations by the end of the 19 century In time they became the largest business in Canada At that time Canada had one transcontinental railway the Canada pacific railway CPRExtractive sectorthoIn the mid 19 century the extractive sector focusing on fish fur forest and farm was made up of many small family oriented businesses Then coal was discovered and became the next big thing Major companies emerged working on extracting coal and base metal oForestry like mining was dominated by many small companies but eventually only those that merged and formed large corporations survived There was a relative decline in lumber and an increasing demand from the US and only big companies were able to manage with capital that came in from Montreal and Toronto Public utilitiesoLocal utilities were used to provide utilities to municipalities Then with technological breakthroughs enterprising business men mobilized large amounts of capital that permitted the creation of electrical public utilities in Canada and abroad oMunicipalities granted companies operating rights and attempted to regulate them oBell was established in 1880 in Montreal It was the first company in the telecommunication sector thoEarly 20 century a number of important developments affected bell and the telephone industry in general One of the changes was the government intervention The federal government put bell operations under the supervision of an independent regulator commission Manufacturing ththoManufacturing played a less significant role than agriculture in the mid 19 centuryHowever by the early 20 century manufacturing had grown equal to agriculture in terms onof GDP oThe development of electricity attributed to this happening In 1905 the 2 largest were Massey Harris and Canadian General Electric CGEoThe manufacturing industry widely supported increasing tariffs to help them grow which the government complied with and raised by 35 on manufactured importsoDuring that time the evolution from manufactures of consumer goods to producer oriented enterprises that sold through dealers or middlemen picked up Retail th century was a local affair with barter being the main means of conducting transactions Since then oRetail in the mid 19it has grown drastically In 1905 Timithy eaton established the first national department store chain in CanadaClass 2Origins of financial stability in Canada the bank act of 1871The enormous growth in global trade and investment also required the expansion of government oversight and international cooperation on financial governanceExtraordinary and unprecedented steps have been required by governments across the world to rescue their banks from defaultCanadian banks were seen as more stable than the rest of the world largely due to the way the very origins of banking law thand regulations were set in the 19 centuryThe political goal was financial stability and the managerial challenge was to create the institutions and regulatory framework to carry it out Origins of financial stability in Canada the bank act of 1871 There was deterioration in the American banking system The four provinces then agreed that they should have a national currency and a national banking systemThey also needed to establish public confidence in the financial system in order to have economic prosperity Foundations of banking and currency in Canada together with proposals for a bank act for the dominion of Canada Banking in early CanadaThere was no financial system in Canada before passing the powers from France to Brittan from 1759 to 1763 Familys kept their savings in specie which were gold and silver coins Even when the British took over from 1759 they had no interest in working out finance and money issues A reliable form of money either for means of payment or to store value or to even help governments with their own finances did not existPeople in different areas used to hold different currencies from different countries In upper Canada people used to have a York currencyThe shortage of specie led to various improvisations of paper money Merchants in Quebec issued small promissory notes British army used its own paper money Merchants had great difficulty in financing their exports of flour potash lumber and fur while also facing trouble importing clothes sugar salt and farming toolsFirst bank of the United StatesUS was facing the same problems as Canada this also was a huge problem for Canada since the states was a major trading partner In 1791 the first bank of the US open in Philadelphia Before that the US constitutions specifically assign the power to issue and regulate coinage to the federal government and defined gold and silver as the only legal tenders The bank was modelled on the bank of England which was founded in 1694Some even in congress did not support the bank The charter collapsed by congress and never again did they have a national banking systemThe earliest bank in Canada It was mainly through the example of the national bank of Scotland which started in 1824 that the transition was gradually made to the present system of a few large banks with numerous branches Bank of Montreal received provincial charter and royal assent in 1822 but was in operation since 1818The most critical regulation in the BMO articles was that the liabilities of the bank could not exceed three times its paid in capital and the paid in capital has to be in specie gold or silver The bank was also limited to ten yearsThe bank of upper CanadaBMO started opening branches all over this alarmed the merchant community in upper Canada partly because BMO was subject to the French civil code or lower Canada but more generally because it meant that it would increase their dependence on Montreal The Bank of Upper Canada obtained the first upper Canadian charter in 1822 It formed a virtual monopoly Later on more banks started to appear in the 1830s The struggle among banks for market shareAt confederation there were 38 banks while BMO had a 25 market shareAt that time the US had a free banking system The licensing of the banks became state decisions At that point virtually anyone with enough capital could open a local bank with no branchesThis was very problematic There were numerous bank failures a lot of fraudulent paper moneySome were advocating following the British system in which the bank of England is the sole issuer of paper money in small denominations The rise of the Canadian dollar For the first time there was a fixed relationship between the three currencies dominion dollar US dollar and British poundThe result was the establishment of a uniform federal act replacing all provincial charters and including the following specific featuresMinimum capital of 50000 of which 10 is to be paid upPower to issue notes in dominations of 4 or moreDouble liability on shareholders to be paid before realizing on the assets of the failed bankTotal bank liabilities not to exceed three times the capitalMandatory revision by parliament One vote per shareProhibition against extending credit on real property Maintain a 6 interest ceiling Case 3 Canadas first great manufacturing enterprise The story of Massey HarrisIn 2003 the condo market in Toronto took off Low interest rates high demand and a strong economy made it possible for many to purchase condos Masseys entrepreneurial roots180267Daniel Massey Sr immigrated into Canada from the states and went into farmingThe population at that time was growing quickly and there was an increasing demand for virgin pine and other woodsWhat he did was rent a land cleared it from trees and sold the wood made it suitable for farming and then sold it off to others This was really in demand since recent immigrants needed a place and a farm to start off he provided them with thatHe repeated the process often to his good fortune
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