Banking en francais: The French Banks of Quebec, 1835-1925

James Pritchard is a history professor at Queen’s University and
author of Louis XV’s Navy, 1748-1762: A Study of Organization and
Administration.

This is an important contribution to current historical revisionism concerning the attitudes and practices of French-Canadian businessmen during the nineteenth and early twentieth centuries. The author examines the development of French-run chartered banks in Quebec from the establishment of the Banque du Peuple in 1835 to the emergence of corporate stability with the appearance of the Banque Canadienne Nationale in 1925. He has organized his material into five succinct, well-written chapters that recount the history of the early banks in Montreal and the small-town banks elsewhere in the province, but he focuses primarily on the half-century between 1875 and 1925, which saw the basis of Quebec’s economy transformed from rural, agricultural to urban, industrial production.

Although these were challenging times for small and middling francophone businessmen, Rudin finds little evidence for the traditional view that they were poor judges of markets or reluctant to take risks or to expand their activities beyond limits imposed by family control. Based on examination of government and corporate records, his analysis reveals the fragmentation of the Canadian capital market along linguistic lines to have been the major limitation to the growth and development of francophone banks. These banks emerged from a lack of interest in French-Canadian savings among English-speaking bankers (for what reasons Rudin does not say) and in response to recognition by French-Canadian businessmen that their enterprises needed the assistance of improved banking services to grow. Paradoxically, ethnicity rather than regionalism also appears to account for the survival of these small banks, owing to their control over the savings of francophone depositors. Unfortunately, lack of additional evidence and careful scholarship has forced the author to focus on banking operations and the changing economic environment and to limit his conclusion to one that banks, or at least these French-run banks, must be seen as mirrors rather than agents of economic change. Nevertheless, Rudin successfully analyses the role of francophones within the Canadian banking industry; he has made a significant contribution to a small but growing collection of Quebec business history of high quality. His dispassionate treatment of the problems of the Banque Nationale, with its grossly overvalued assets and incapacity to yield sufficient funds to pay its depositors in the early 1920s, ought to find a wide audience in the current changed atmosphere of collapsing regional banks. The selfless rhetoric of bankers and politicians has been heard before.