28 THE ROYAL SOCIETY OF CANADA 



and the group in Toronto known as adherents of the "Family Com- 

 pact." The latter party was able to carry its Bill by a small major- 

 ity.^'' Thus, from the beginning, the Bank of Upper Canada was a 

 political institution and as time went on it appeared to be employed 

 increasingly for political purposes. In 1829 the Finance Committee 

 of the House of Assembly denounced the Bank as a party instrument, 

 recommended that the shares held in name of the province should be 

 sold by auction and that the funds so derived should be expended 

 in improving the roads and bridges. "It cannot be concealed," the 

 Report says, "that (with whatever reason) the opinion is widely 

 diffused that it (the Bank of Upper Canada) is a political engine of 

 dangerous power, unsuitable for so young a province in which, 

 unhappily, political and party strife have, during the late administra- 

 tion, made up half the business of life." " The most acute and 

 formidable critic of the Bank of Upper Canada and of its relations 

 to the members of the "Family Compact" was William Lyon Mac- 

 kenzie, who became in 1829 a member of the Provincial House of 

 Assembly for the county of York. Mackenzie had undeniably a 

 talent for public financial legislation. His temperament might have 

 unfitted him for administration; but as financial critic, the various 

 reports of which he was the author reveal him in a highly favourable 

 light, alth(i|Ugh the asperity with which he catechized witnesses before 

 the various committees of which he was a member militated against 

 his obtaining any information or even admissions from them. 



In 1830 Mackenzie moved for a Select Committee on currency 

 and became chairman of it. The report, obviously his handiwork, 

 was presented on the 11th of February, 1831.^^ The chief points in 

 this report are of consequence, because they appear three years 

 afterwards in substantially the same form as the marrow of a Treasury 

 Memorandum.^^ In his report Mackenzie recommended that the 

 following precautions against unsound banking should be embodied 

 in a general Act: (1) That failure to redeem the paper of a bank 

 should be followed automatically by dissolution of its charter; (2) that 



3^For a brief account of the dispute see Shortt, A., The Early History of Canadian 

 Banking. The First Banks in Upper Canada, Toronto, 1897. Passim. 



^Uournals of the House of Assembly, Toronto, 1829. March 8th, 1829, Report 

 of Finance Committee XII, Bank of Upper Canada (not paged). Report of the 

 Select Committee appointed to examine and report on the expediency of establishing a 

 Provincial Bank within this province," 13th Feb., 1835. 



'^Report of Select Committee on Currency, 11th Feb., 1831 (Signed W. L. 

 Mackenzie), in Sundry Documents, Journals of the House of Assembly of U.C., Sess. 

 1831, York, 1831, p. 201. 



^^See infra. 



