The Farmers' Bank of Rustico
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Farmers' Bank of Rustico

 

Farmers' Bank

The Farmers' Bank of Rustico receives Royal Assent

The bill was sent to England in order to receive the signature of Queen Victoria.

It took over a year to secure the Royal Assent and to commence business. Lord Newcastle, the Secretary of State for the colonies, was astounded at the miniature size of the bank. The initial capital had been set at 1,200 English pounds. At the official rate of exchange 1000 Island pounds was equivalent to 800 Sterling, or slightly less than 3,900 American gold dollars. Another provision in the Act permitted a gradual increase in the capital to 21,000 English pounds. Lord Newcastle wrote to the Governor:

"Their Lordships observe that these singular provisions do not afford a substantial guarantee for the responsibility of the Promoters of the scheme, and before the Act is submitted for her Majesty's confirmation they wish to be furnished with a report on the subject."

The Governor's reply in January, 1864, ignored the substance of Newcastle's query and merely reported the representations of the Rustico people:

"They respectfully conceive that the guarantee for the responsibility of the promoters of the scheme should not be tested either by the original smallness of the proposed Capital or the amount of the license to increase it,- but, as in other Banking Acts, by the requirements of the Act itself.. "

Other arguments stated that the shareholders' liabilities in the Farmers' Bank were as or even more stringent than those of the two banks already chartered. Father Belcourt noted that, "The strength of the bank should not be gauged by the smallness of the proposed capital, but as in other Banking Acts, by the requirements of the Act itself" He maintained that they were as stringent in regards to the shareholders' liability as in other banks incorporated by the Island legislature." The arguments prevailed and the Lieutenant-Governor was notified of her Majesty's assent on April 7, 1864.

The Smallest Bank Ever Chartered in Canada

Measured by capital, the Farmers' Bank was the smallest bank ever chartered in Canada, possibly in the whole British Empire. Finally, in May of 1864, the Bank began to operate.

Father Belcourt had prepared a suitable home for the bank. It was initially housed in the Parish House since the Parish Hall which was to be its home was unfinished. The Parish Hall which was to be an imposing building was started in 1861. The building was constructed of red Island sandstone, a building material seldom used on the Island. ...the walls were 14 inches thick and the beams, hand hewn, were 12 inches square. His time among the natives had taught him the importance of symbolism. The symbolism of a bank building made of stone was evident. In 1867, the Parish Hall was finished and the bank took up residence in one of the rooms on the main floor. The bank paid the parish a small rent for the space.

The initial capital of the bank was set at 1,200 pounds sterling; the equivalent of less than $3,900. Shares were set at one pound sterling or approximately $4.00.

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Portrait of Queen Victoria, 1887

Farmers' Bank received Royal Assent on April 7, 1864. Queen Victoria 1887, Wikipedia Image Archives.

Original Farmers' Bank share

Farmers' Bank Share costing one pound dated July 11, 1866. Farmers' Bank Collection

Farmers' Bank of Rustico advertisement of opening

February 8, 1865, Farmers' Bank of Rustico advertisement in Royal Gazette. Royal Gazette, 1865, Public Archives of Prince Edward Island.

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