PEASE, EDSON LOY, banker; b. 2 Sept. 1856 in Coteau-Landing, Lower Canada, son of Orton Pease and Mary Hare; m. 24 April 1883 Diana Ann Rea in Montreal, and they had two sons, and a daughter who died young; d. 29 Dec. 1930 in Nice, France.
Edson Pease, the 12th of 14 children, was born into the world of the “commercial empire of the St Lawrence.” His father, a native of Massachusetts, had immigrated to Lower Canada in 1823. He settled in Coteau-Landing, on the shores of the St Lawrence River, where he prospered as a shoemaker, general merchant, and real estate investor, and served as town treasurer. Pease Street and Pease’s Wharf bespoke the family’s commercial prowess in the small town. The arterial commerce of the great river shaped Edson’s world-view. Since his eldest brother, Charles, had joined his father in the general store, Edson was obliged to seek wider horizons. A boyhood friend, Charles Rudolph Hosmer, had found employment as a telegraph operator with the Grand Trunk Railway. Pease followed the example, joining a telegraph company in Ogdensburg, N.Y., in 1873 or 1874.
Commerce on the St Lawrence River and the technological reach of the telegraph drew Pease out of rural Canada and prepared him for entry into the emerging urban professional class. On 24 April 1875 he joined the Montreal branch of the Toronto-based Canadian Bank of Commerce as a clerk. In 1881 he was promoted to the inspectors’ department of the bank. Promising young bankers were made inspectors, a role that required them to police a bank’s entire branch system for conformity to the procedures of the head office. Confederation had enabled the disjointed colonial banking systems of British North America to consolidate into a federalized system based on Scottish branch banking. The process was by no means smooth; regionally tied small banks were prone to collapse, often provoked by the narrow base of their business or by the loose regulatory and procedural framework in which they worked.
Typical of this pattern was the Merchants’ Bank of Halifax. Since obtaining a federal charter in 1869, it had cautiously built up a network of 25 branches throughout Nova Scotia, New Brunswick, and Prince Edward Island. Bad loans to Nova Scotian steel producers and sugar refiners in the early 1880s and a defalcation in 1882 of its cashier (general manager) had checked the bank’s progress [see David Hunter Duncan*] and revealed its precarious regional base.
The Merchants’ president, Thomas Edward Kenny*, was inclined to aggressive expansion as an antidote to regional stagnation. Breadth of operation would induce stability. To pursue this strategy he needed new talent. Accordingly, on 18 Jan. 1883 the bank hired Pease as accountant at its main branch in Halifax at an annual salary of $3,000. Pease’s initial task was to implement consistent procedures throughout the bank, thereby preventing further defalcation and ensuring standard loan practices as well as rigorous staff training. Pease soon revealed his true genius – as a strategist of the bank’s continental and international expansion and as a progressive innovator of bank procedure.
Pease’s innovations met with some resistance from a few of the bank’s more conservative directors. In 1887 they opposed his move to open a branch in Montreal in order to place the Merchants’ on the doorstep of the westward-oriented national economy. Pease’s determination and the backing he received from Kenny helped carry the day. He became the branch’s manager, at an annual salary of $3,500. He energetically sought business clients in the city. The St Lawrence Sugar Refining Company Limited, metal fabricator Drummond, McCall and Company [see George Edward Drummond*], newspaper proprietor Hugh Graham*, and financier Louis-Joseph Forget* were typical of his early acquisitions. Pease’s friendship with Hosmer, now head of the Canadian Pacific Railway’s telegraph department, gave him an entrée to the city’s commercial elite. Pease also pushed the bank’s retail business across the island of Montreal, establishing branches on Rue Notre-Dame and in the emerging affluent suburb of Côte-Saint-Antoine, which would soon become the town of Westmount. Pease struck correspondence agreements with other Canadian and American banks so as to expand the circulation of its notes, hired new staff, including the bank’s first French Canadians, and modernized its procedures and facilities, largely along American lines (including spacious, airy bank interiors). Still small in comparison with its large competitors, such as the Bank of Montreal and the Canadian Bank of Commerce, the Merchants’ Bank was nonetheless by the late 1890s a national bank, with assets of $17,102,000, 42 branches, and by 1899 a steady seven per cent dividend on common shares.
Success in Montreal fanned Pease’s expansionistic instincts. Reluctant to compete with the more established banks in their base of central Canada, he looked to new frontiers. In 1897, egged on by Hosmer, he visited the interior of British Columbia and quickly opened branches in Rossland and Nelson to tap their thriving mining economies. Two years later a branch was established just over the border in the boom town of Republic, Wash., where Montreal firms had mining interests. By 1908 there were 21 branches in British Columbia, coordinated from a regional head office in Vancouver. The bank’s experience in financing the movement of Maritime trade in fish, timber, and sugar opened the way to international expansion. Shortly after American troops moved into Havana, Cuba, in 1898, Pease arrived to explore the city. Joined by other Canadian entrepreneurs such as Sir William Cornelius Van Horne* of Montreal and David MacKeen* and Benjamin Franklin Pearson* of Halifax, Pease saw opportunity in post-bellum Cuba. The movement of Cuban sugar to market required forward financing (loans for planting and transportation costs to be repaid on the delivery of sugar to market). In 1899 a branch was opened in New York City to handle the American end of sugar deals. That same year another was established in Havana, followed by a succession of branches in sugar-producing provinces such as Camagüey and Oriente (Santiago de Cuba), usually not far from Van Horne’s Cuba Railroad. By 1923 a peak of 65 Cuban branches would be reached. Other branches in the Caribbean and South America included Puerto Rico (1907), Jamaica (1911), Brazil (1919), and Panama (1929). To complement this expansion, Pease directed the opening of branches in the financial centres of Europe: London (1910), Barcelona (1918), and Paris (1919). By 1928 the bank was Canada’s leading overseas banker with 121 branches in 28 countries. Such was Pease’s instinct for opportunity that in 1919 a branch was even temporarily opened in Vladivostok in revolutionary Siberia, where the Canadian government had sent trade commissioners, sensing possibilities for commerce. Through all this expansion, Pease became an inveterate traveller. Tellers in the bank’s main branch at Montreal, for instance, relished the Cuban cigars which he freely distributed on his return from the south.
Pease’s orchestration of the bank’s expansion out of the Maritimes brought him corporate preferment. In 1899 he was promoted joint general manager, sharing the post with the more conservative David Hunter Duncan, who anchored the Merchants’ head office in Halifax. Duncan’s retirement at the end of 1899 left Pease in sole command and opened the way to more change. Backed by Kenny, Pease argued that the bank needed a more cosmopolitan image and in 1901 the Merchants’ Bank of Halifax became the Royal Bank of Canada (a name reminiscent of the venerable Royal Bank of Scotland). Montreal became the bank’s de facto centre of operations with Pease in charge. In 1907 the bank’s head office was officially moved to Montreal and Pease joined the board of directors. A year later the bank began adopting North American banking nomenclature to replace the British terminology it had used since its establishment and Pease became a vice-president. Following Kenny’s death in 1908, Pease recruited Herbert Samuel Holt*, a successful railway contractor and rising promoter of utilities, to the Royal’s presidency. Holt’s role was largely titular; he provided the bank with a dynamic image. Pease was by now the bank’s undisputed strategist and senior executive.
Sensing the opportunities of the economic boom during Sir Wilfrid Laurier*’s second term as prime minister, Pease determined to complement the bank’s nascent overseas expansion with vigorous national growth. Constrained by the slowness of natural growth (dictated by laborious training of new staff and the expense of head-to-head competition with other banks), Pease opted for an energetic policy of growth by merger. Mergers with smaller, regionally based banks provided two immediate advantages: enhanced regional penetration and the acquisition of reliable, trained staff. Between 1910 and 1925 he engineered five such mergers, all initiated by the Royal. Acquisition of the Union Bank of Halifax in 1910 consolidated the bank’s base in the Maritimes. The merger with the Toronto-based Traders’ Bank of Canada in 1912 brought strength in Ontario, and the addition in 1917 of the Quebec Bank solidified the Royal’s ascendance in Anglo-Quebec commerce. The merger with the Northern Crown Bank in 1918 allowed the Royal to flesh out its network on the prairies. The last and largest merger – with 217 branches of the Union Bank of Canada in 1925 – was conceived by Pease and executed by his successor, Charles Ernest Neill. When called before a committee of the House of Commons in 1913 to justify his bank’s aggressive expansion, Holt had read a statement prepared for him by Pease in which he stated that mergers removed “weak banks,” enhanced economies of scale, and stabilized national banking. “In union there is strength,” he concluded. Pease’s policy of mergers vaulted the Royal ahead of its competitors. After the merger with the Union Bank of Canada, the Royal surpassed the Bank of Montreal as Canada’s largest bank in terms of both branches (922 by the end of 1925) and assets ($788,000,000). While other banks emulated Pease’s strategy, none enjoyed such success in making their operations so solidly national.
Pease’s role as the architect of the Royal’s forceful evolution was acknowledged in several ways. In 1916 he assumed the title of managing director and chief executive officer of the bank at an annual salary of $45,000. The same year he began a three-year term as the president of the Canadian Bankers’ Association. With his usual progressive fervour, he used the office to question the underpinnings of credit creation in Canada. Before World War I, Canadian banks extended credit in the form of their banknotes and loans on the basis of the reserves they held in gold or dominion notes. This process was self-regulating, expansive in good economic times, contractive in recessionary times. The outbreak of war and the suspension of the gold standard disrupted the system. In 1914 Pease and other general managers helped finance minister William Thomas White* fashion temporary state intervention in the creation of credit. The Finance Act of 1914 allowed Ottawa to advance moneys to the commercial banks, thereby facilitating the expansion of credit in abnormal times. Pease favoured extension of the state’s ability to “rediscount” commercial bank credit, a mechanism he argued would stimulate post-war recovery. He patterned his suggestion on the newly created federal reserve banks in the United States and first presented it at the annual meeting of the Royal Bank in early 1918 before taking it to the council of the Canadian Bankers’ Association and to White later that same year. A CBA committee, advised by Toronto corporate lawyer Zebulon Aiton Lash*, studied the proposition. The idea was stiffly opposed by the Bank of Montreal, which saw in it an end to its long-standing role as the government’s banker. Other bankers argued that a government-run central bank would throw the creation of credit open to political manipulation. In 1919 the status quo prevailed and the Finance Act of 1914 was extended into peacetime. When national credit failed catastrophically in the Great Depression and thinking again turned to the need for a central bank, Pease’s initiative would be revisited in 1933 during the hearings of the royal commission on banking and currency in Canada.
Pease’s aggressive pursuit of corporate expansion and his championing of ideas viewed by most Canadian bankers as iconoclastic indelibly stamped him as an outsider intent on shifting the centre of the Canadian banking establishment. Ill at ease in the stuffy social milieu of Montreal banking, he took a leading role in creating the Mount Bruno Country Club, south of the city. In the 1890s he had joined a property association at Mont Saint-Bruno and by the 1920s had helped to turn it into an exclusive golf and country retreat for the anglophone elite of Montreal who felt unwelcome at the Royal Montreal Golf Club. Pease himself built a large home there in 1922, close to neighbours such as the Birks and Drummond families. Pease was not, in fact, an ardent golfer. He was elected honorary president of the Montreal Amateur Athletic Association in 1910, but had few leisure activities besides cigar smoking and a penchant for practical jokes. His personal and family life was always secondary to his devotion to banking. A Presbyterian by birth, he displayed little interest in religion as an adult. By the 1920s his addiction to the Royal’s affairs began to exact its toll. His constitution weakened and his hearing began to fail. The death of his wife in 1922, followed by that of his youngest son in 1923, eroded his family life. In 1922 he resigned his executive functions with the bank, retaining only his vice-presidency and directorship. Nonetheless, he remained an important figure in the bank’s affairs, one frequently consulted by Neill, his successor as chief executive officer.
A lifelong Conservative, Pease was a confidant of prominent politicians such as Sir Robert Laird Borden*, Sir William Thomas White, and Richard Bedford Bennett*. Nonetheless, like his colleagues at the head of the other Canadian banks, he downplayed any public demonstration of his sympathies for the Conservatives. His great achievement was to have been seen as a reliable oracle for banking and monetary advice by both Conservative and Liberal finance ministers. In retirement he was wooed by the Liberals. Prime Minister William Lyon Mackenzie King* considered him for a senatorship and the ambassadorship in Washington. In the fall of 1930 Pease left Montreal to winter on the French Riviera. There, the manager of the Royal’s Paris branch found him “a lonely, sick man, but lion-hearted withal.” Pease insisted that a photograph depicting him with a cigar and tennis racket in hand be dispatched to the head office. After his death in Nice in late December, his body was returned to Canada to be buried high in Mount Royal Cemetery in a plot that overlooked the St Lawrence.
The term “revolutionize” cannot usually be comfortably applied to Canadian banking’s careful evolution, but Edson Pease had forced the pace of change more than any other Canadian banker. He had built a regional institution into Canada’s leading domestic and international bank and at the same time had provoked broad and prescient discussion about the fundamental tenets of Canadian banking.
The Royal Bank of Canada Arch. (Montreal) contains extensive material on Edson Loy Pease’s association with the bank from 1875 to 1930. The following records were used in the preparation of this biography: RBC 2, 25 54 1 (corporate personnel); 30G 1-6 (chairman and president files); 43G PeaE (biog. file); 43S PeaE 1–2 (speeches); and 46B (RBC Hist. Project files). Of particular relevance for Pease’s campaign to promote a central bank in Canada are the papers of bank executive Solomon Randolph Noble (RBC 2, 29A 3 2, 29A 14, and 29A 17). Additional references to Pease, such as those found in staff reminiscence files and in the Royal Bank Magazine (Montreal), may be searched by computer. The archives also holds numerous photographs of Pease.
The papers of Sir Robert Laird Borden (NA, MG 26, H), Sir Richard Bedford Bennett (NA, MG 26, K), and Sir William Thomas White (NA, MG 27, II, D18) contain correspondence with Pease. The Canadian Bankers’ Assoc. (Toronto) has materials in its archives relating to Pease’s presidency of the association from 1916 to 1919 and on his role in representing the Royal Bank of Canada on its council. For Pease’s place in the larger context of Canadian banking, see Z. A. Lash, “The United States Federal Reserve Act and the Canadian banking system, with some contrasts,” Canadian Bankers’ Assoc., Journal (Toronto), 26 (1918–19): 224–44; Duncan McDowall, Quick to the frontier: Canada’s Royal Bank (Toronto, 1993); and R. C. McIvor, Canadian monetary, banking and fiscal development (Toronto, 1958).
ANQ-M, CE601-S115, 24 avril 1883; CE607-S44, 21 sept. 1856. Canadian men and women of the time (Morgan; 1912)