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History of the Bank of Nova Scotia 1832-1900
Progress and Expansion

ON 24th March, 1882, Mr. J. B. Forgan, now President of the First National Bank, Chicago, was by special circular appointed Inspector of the Bank, the post being then definitely created; though examinations — virtually inspections — had previously been made at various times by the Cashier.

In June of that year the Bank opened at Charlottetown, bought the Bank of Prince Edward Island Building, and became, through its Agent, Mr. D. C. Chalmers, one of the three liquidators of that Bank.

The proceedings of the fiftieth annual meeting show that amalgamation schemes were in favor. The Directors passed a resolution on 12th September approving of the absorption of the Union Bank of Prince Edward Island, and a special meeting of Shareholders was called for 20th November, 1882. The basis on which the agreement was to be effected was as follows:

First.—That the intrinsic value of each stock should be arrived at.

Second.—That the intrinsic value of one stock should be increased or diminished relatively to the other by differences in earning power, present or prospective. The present and prospective earning power of each stock should therefore be taken into consideration and the intrinsic value altered accordingly. In calculating the present and prospective earning power of each stock, regard should be had to its past earnings only after deduction of losses.

Third.—When the real value of each stock has thus been ascertained they can be equalized by raising or reducing the capital of the one till the value of each hundred dollars of stock in the two banks shall be equal, dollar for dollar. New capital stock of the Bank of Nova Scotia can then be issued for the capital of the Union Bank thus fixed.

At the annual meeting on 21st February, 1883, a resolution was passed to the effect “that the Dominion Legislature be applied to for authority to reduce the nominal value of this Bank’s shares from two hundred dollars to one hundred dollars, and to double the number of shares, so that the present share will represent two shares.” This was to facilitate the exchanging of the Bank’s stock for that of the Union Bank of Prince Edward Island—the fact that this permission had been given by Parliament on 26th May, 1874, had apparently been forgotten; and the Act providing for the amalgamation contained a clause thereby reducing the shares of the Bank of Nova Scotia from two hundred dollars to one hundred dollars each. This Act, assented to 25th May, 1883, provided that the agreement should be confirmed by a majority of two thirds of the Stockholders of each bank at special meetings to be called for that purpose; that a deed of union be signed and filed with the Secretary of State of Canada; that upon the union taking place the holders of Union Bank stock should become ipso facto shareholders in the Bank of Nova Scotia—the latter having to pay fractional parts of shares in cash, if necessary; and that the Bank of Nova Scotia might issue notes in excess of the amount of its paid-up capital to the extent of twice the paid-up capital of the Union Bank as at 31st March, 1883, the Act to continue in force till 1st July, 1891. This exceptional privilege in the matter of Circulation was granted in lieu of similar rights enjoyed by the Union Bank of Prince Edward Island under its Provincial Charter, to expire 1st July, 1891. A meeting of Shareholders was held on 8th August, 1883, for the purpose of confirming the amalgamation agreement, but was adjourned until the nth of the next month as the Directors of the Union Bank had not finished their examination into the affairs of the Bank of Nova Scotia. On the latter date the amalgamation was completed, the Bank of Nova Scotia issuing $114,241 of stock to the Union Bank Shareholders—or the equivalent of $162,222.22 in cash. The formal indenture of union was signed on 26th September, 1883, and went into effect on the first of the next month, the Bank thus acquiring established Agencies at Summerside and Montague, in addition to increasing its business at Charlottetown. The Agency at Montague was continued until April, 1885, and then closed.

Agencies opened since 1880 are as follows:

On October ist, 1883, on the occasion of the President’s departure for a European tour, Mr. Adam Burns was elected a Director, the number being thus increased to six. The next August Mr. Jairus Hart was chosen to fill Mr. J. J. Bremner’s place, the latter ceasing to be a shareholder. At the annual meeting in 1886 Mr. S. A. White’s name was dropped from the list, he having taken up residence abroad; and the number again limited to five.

At the close of 1884 it was found necessary to write off $130,000 from the Reserve Fund to meet large losses developed during the year.

In April, 1886, the Bank took over the affairs of the Pictou Bank and proceeded to liquidate them.

The Officers’ Mutual Guarantee and Savings Fund of the Bank of Nova Scotia was established in September, 1886; and the Officers’ Pension Fund in January, 1888.

On 29th April, 1889, Mr. John S. Maclean, President of the Bank from 1874, passed away. Mr. John Y. Payzant was elected to fill the vacancy 'in the Board; Mr. John Doull became President, and Mr. Adam Burns, Vice-President. Mr. Daniel Cronan, a member of the Board for twenty-seven years, died on 22nd September, 1892, his place being filled by Mr. R. B. Seeton.

At the time of the financial collapse in Newfoundland (December, 1894), the Banks there having failed, this Bank sent assistance at the earliest possible opportunity, as did also the Bank of Montreal and Merchants Bank of Halifax.

Mr. Adam Burns died in February, 1897. Mr. Payzant was on 15th June chosen Vice-President, and Mr. Charles Archibald elected to fill the vacancy in the Board.

On June 18th, Mr. Fyshe resigned, to accept the position of Joint General Manager of the Merchants Bank of Canada, and Mr. Henry C. McLeod, who had for ten years represented the Bank in Minneapolis and Chicago, was appointed Cashier.

The titles of “General Manager” and “Manager” were substituted for those of “Cashier” and “Agent” respectively, throughout the Bank in 1898.

On 20th June, 1899, the number of Directors was increased to seven, the new members being Mr. R. L. Borden and Mr. G. S. Campbell. In the following September Mr. Doull died, Mr. Jairus Hart succeeding him, and Mr. J. Walter Allison being added to the Directory. Mr. Hart resigned in December, on account of advancing age; Mr. Payzant becoming President, and Mr. Archibald, Vice-President: the Board

remaining at six in number. The last change in the. Board to be recorded is the death of Mr. Seeton, in March, 1900, and the election of Mr. Hector Mclnnes on 24th April.

In July, 1899, the Bank of Nova Scotia, which had joined the Canadian Bankers’ Association at its inception, withdrew therefrom, for reasons which have been made public.

The General Manager’s Office was removed to Toronto in March, 1900.

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