The “Pretended” Bank of Upper Canada

Murney Tower’s digitization project has led to some interesting discoveries about artifacts in our collection. One example is this 1820 bank note from the Bank of Upper Canada. There were actually two institutions called the Bank of Upper Canada in the nineteenth century. One was established by government charter at York in 1821. The other was established in Kingston in 1819 and was unchartered -- in other words, it operated illegally.

Dated January 1, 1820, this banknote would have been produced by the latter institution, and it tells an interesting story about Canadian economic history. In the early 19th century, there were calls for the establishment of a bank in Upper Canada. In 1817, the Legislative Assembly approved a bill that would allow for the establishment of a bank in Kingston, which was the largest economic centre in Upper Canada at the time, on the condition that the motion was approved by the Colonial Office and commenced its operations by January 1, 1819. However, the Colonial Office did not give its approval until May, 1819, five months after the prescribed deadline had passed. Frustrated with this delay, an independent group of merchants decided to establish its own bank, which issued banknotes like the one shown here. While the institution appears to have been initially successful, issuing approximately £19,000 worth of notes in its short tenure, internal corruption led to the bank’s failure after only three years, and notes like this one became worthless. It was the failure of this bank, combined with the failure of another attempt at establishing a chartered bank in Kingston, that eventually led to the approval of the chartered Bank of Upper Canada at York, which facilitated York’s rise as an important economic centre. One might argue that had the “pretended” Bank of Upper Canada succeeded, Kingston might have remained the economic powerhouse of the province, and Ontario as we know it today might be very different.