TRUSCOTT, GEORGE, banker; baptized 7 June 1785 in the parish of West Teignmouth, Devon, England, ninth and youngest child of Rear-Admiral William Truscott and Mary Croucher; m. first 29 Nov. 1820 Mary Stritch (d. 1837) in Exeter, England; m. secondly Ann Norman of Black Rock (Buffalo), N.Y., and they had two sons and seven daughters; d. 2 July 1851 in Buffalo.
The Truscotts were Devonshire gentry. All six of Rear-Admiral Truscott’s sons went into the services, with George entering the navy in March 1793 as a captain’s servant on his father’s ship in the West Indies. He served in the Mediterranean, the English Channel, and the West Indies, rising to the rank of commander by 21 March 1812. That year he worked at different arsenals before being placed on half pay. Returning to active duty in December 1813, he commanded the gun-brig Havock at stations in the Channel, the North Sea, and off North America. He was placed on half pay again in 1815 but remained in the navy for 30 years, being promoted captain on 1 Feb. 1845, the year he retired from the service.
Truscott lived at Exeter during the 1820s, becoming a justice of the peace and a deputy lieutenant of the county. In 1830 he was admitted to the freedom of the city. About 1831 he and John Cleveland Green, both apparently with considerable personal means and good connections, founded a private bank there. Green had had some experience of the Canadas for he had served there in the commissariat from 1811 to 1818. John Henry Dunn, the receiver general of Upper Canada and an open proponent of new banks and “abundant” supplies of money for commerce, may have suggested the transfer of their banking operation to that province. Truscott came to Upper Canada in 1833, when he applied for land, receiving 461 acres in Zorra (East and West Zorra) Township in Oxford County, where many naval officers had settled. Banking, however, was his primary interest and in March 1834 he deposited some “banknote moulds” with the London banking firm of Grote, Prescott, and Grote, which was to become his English representative. By early 1834 rumours were flying in Upper Canada that a major English banking-house would soon open a branch in Toronto. Truscott and Green arrived there in May and began operations in June just as a major economic boom was getting under way in North America. Their firm, Truscott, Green and Company, operating as the Agricultural Bank, was a private partnership: unlike a chartered bank, the partners were totally liable for losses. Such a partnership had been demanded by some reformers, particularly William Lyon Mackenzie*, but it was bound to irritate Toronto’s tory establishment and its Bank of Upper Canada, which had been operating alone since the withdrawal of the Bank of Montreal’s branch from the city in 1829. There were some reformers, however, who raised questions about the partnership’s financial base. Under these circumstances it might be expected that the partners would proceed cautiously; instead, with Dunn’s “every countenance,” Truscott, always the dominating influence, conducted operations with tremendous competitive vigour.
Immediately after the Agricultural Bank opened, a series of incidents took place. The newly incorporated city of Toronto, of which Mackenzie was mayor, required a loan of £1,000 for public works. The province’s leading financiers, including the Bank of Upper Canada and the Commercial Bank of the Midland District, refused funding but Truscott, Green and Company agreed to provide the loan. A more painful cause of friction between the banks quickly followed: although no bank in the province had ever paid interest, the Agricultural Bank gave 3 1/2 per cent on deposits, forcing the others to do the same. The real battle, however, was precipitated by Truscott’s method of obtaining specie. There being no mint, the banks customarily imported their own metallic currency at a small charge. However, each bank issued its own paper money, which it had to exchange for specie upon demand. Using this lever, Truscott avoided the cost of importing specie by obtaining Bank of Upper Canada notes in the course of business – even buying them at a discount in the United States – and presenting them for payment in hard cash. William Allan, president of the Bank of Upper Canada, claimed these withdrawals exceeded £30,000. In 1835 Allan, followed by the Commercial Bank, struck back by refusing to accept Agricultural Bank notes. Truscott, professing that he was following the usual English practice of drawing specie from the Bank of England (although he must have known that it was not the practice in Upper Canada), claimed, correctly, that Allan was trying to put him out of business.
When his tactic did not have this effect, Allan began buying up all the Agricultural Bank notes he could obtain across the province and presenting them for specie. Truscott asserted that $145,000 was demanded in less than three months in the attempt to break him; that the Agricultural Bank survived is evidence of its extensive backing. Both banks were nevertheless put to great cost. Truscott may also have attempted a take-over of the Bank of Upper Canada, or at least election to its board of directors, by purchasing stock at a premium of 16 1/2 per cent. Nothing, however, came of this manœuvre.
Truscott’s next sally was to appeal directly to Lieutenant Governor Sir John Colborne*, first in February 1835. After various exchanges with Allan, Truscott demanded an official investigation of the Agricultural Bank’s affairs. This, he believed, could counter Allan’s claim that the Bank of Upper Canada would not accept Agricultural Bank notes because its resources were not publicly known. He realized too that a House of Assembly dominated by reformers would probably produce a supportive report; that is exactly what a special committee, chaired by William Lyon Mackenzie, submitted in March 1835. The report lacked detail but it did not question the Agricultural Bank’s balance of £9,688. The whole contest probably played a role in Allan’s retirement at about this time.
In June 1835 Truscott helped to establish another partnership bank, the Farmers’ Joint Stock Banking Company, the founders of which included John Elmsley*, Francis Hincks*, and William Ketchum. Why he involved himself in founding a rival reform bank is uncertain. However, he intended renting to it the Agricultural Bank’s Front Street premises. Possibly he planned to involve wealthy reformers in his Canadian operations, and then to retire to take care of his American interests. Whatever the case, the election of the first board of directors in July led to internal dissension and by early September Truscott and the reform directors had been forced out. As well, by August Mackenzie had broken with both the Farmers’ and the Agricultural banks, perhaps because of Truscott’s resort to aggressive litigation in obtaining payments due to the former. Thenceforth Truscott found him attacking the Agricultural Bank just as he did the Bank of Upper Canada.
During the heat of the controversy with the Bank of Upper Canada, Truscott had made remarks in confidence about tory leader Allan Napier MacNab*, which Mackenzie heard and repeated in the assembly. The result, on 19 March 1835, was one of the last duels in Upper Canada, in which MacNab’s pistol misfired and Truscott shot into the air. Later that year Truscott took Thomas Gibbs Ridout*, the cashier (general manager) of the Bank of Upper Canada, to court for verbal slander, winning judgement in October. In 1837 he applied for an injunction against the city of Toronto when it decided to issue paper money during the shortage of coinage that developed as part of the financial crisis of that year [see Sir Francis Bond Head*]. Thus, in law as in business, Truscott took forceful and immediate action, a point to remember given his later allegedly passive acceptance of the mismanagement of the Agricultural Bank’s funds in the United States. Aside from his banking activities he played little role in the city, not a surprising fact in view of the number of enemies he must have made. He was, however, a member of the United Services Club, Toronto’s first gentlemen’s organization.
Although his Canadian operations may seem to have been complex enough to occupy his time, Truscott was simultaneously busy in the United States. The American operations arose through the development of the typical branch bank system of the period. In September 1834 the Agricultural Bank had opened its first branch, in St Thomas, Upper Canada; during the bank war others were added, principally at various centres in the southwest part of the province and at Montreal. These caused no problems; but in 1834 Truscott and Green had also established a branch in Buffalo, N.Y., managed by one of their Toronto employees, 19-year-old John Wellington Buckland, whose youth was balanced by his father’s alleged position in the house of Rothschild. Then in April 1835, rather mysteriously but ostensibly at Buckland’s urging, a partnership was formed in Buffalo between Truscott, Green and Company and Buckland and Russell Searle Brown of the drug firm of Starkweather and Brown. Under this agreement Buckland would receive 15 per cent of the profits and Brown 25 per cent, but it was Truscott, Green and Company which had put up the partnership’s entire capital of $30,000.
Almost immediately Brown, presumably with the connivance of Buckland, violated the agreement by drawing advances from the Agricultural Bank of more than $30,000; by autumn advances to Buckland and Brown were up to $88,000. Later, Truscott and Green claimed that they had insisted on a reduction in these advances, yet, instead of demanding a return, they formed a revised partnership with Buckland and Brown in April 1836. By then transfers had reached. $131,648. The new agreement established Brown, Buckland and Company in Buffalo, supposedly under the supervision of Truscott, and Green, Brown and Company in New York City, with Green as resident partner. Later, Truscott and Green were to claim that they had had only a very vague idea of the various transactions, stating that it had “never occurred to them . . . to enter upon any examination of the books at Buffalo for the purpose of verifying the statements of profit and loss” of the partnership.
Such assertions are hard to believe. Rather, Truscott and Green were in all likelihood hiding the fact that they had used, for American speculations, the money Upper Canadian and English investors had paid into Brown, Buckland and Company and Green, Brown and Company. Among the investors involved was Receiver General John Henry Dunn, who made special advances “for the collective benefit of the firms” totalling $74,281, much of this amount not being properly secured by the partners. It is uncertain whether this was the province’s money, his own, or a mixture of both; in any case, under the lax administrative controls of the time he was allowed to keep any profits made from personal investments using the funds of the province. It seems obvious that all those participating were looking for windfall profits in the booming American economy.
Two factors checked the plans of Truscott and Green. The boom of the mid 1830s in both the United States and Canada was rapidly drawing to a close in 1837. Even had it continued they could not have made a profit, for Brown was secretly entering into assorted devious enterprises, including the transfer of assets amounting to $74,652 from his reorganized partnership to Starkweather and Brown. When confronted by Green, he hid evidence and gained control of securities by subterfuge. That Truscott and Green did not sue him may indicate that they were both trying to hide their own involvement and prevent a run on the Agricultural Bank. In the spring of 1837 Brown was expelled from the partnership, but making him provide assets to cover his defalcations proved difficult.
Faced with a shortage of funds, the New York office was closed on 9 Oct. 1837; at the same time the Agricultural Bank began issuing notes without Green’s name on them. In November Truscott and Green were arrested in Toronto at the instigation of the City Bank of Buffalo; they put up as bail securities entrusted to them by English investors and fled to Buffalo. Simultaneously the Agricultural Bank collapsed and Mackenzie announced in the Constitution, with some glee, that “Truscott & Co. are Bankrupt in right earnest.” In February 1838 the Upper Canadian House of Assembly estimated that the unpaid notes of the Agricultural Bank totalled $20,000; its depositors had nothing. In June, Truscott and Green issued an explanation from Buffalo along with a promise to make good their arrears. They never did. Upper Canada’s most spectacular and speculative banking venture was at an end.
What part of their personal fortunes they saved, or even invested, is unknown. Truscott tried unsuccessfully to get a pension from the British government. In 1840 he appeared as an “exchange broker” in Buffalo and remained active in that occupation until his death in 1851, a development which provides some evidence that his wealth was not exhausted. Of even more significance, he owned property in Buffalo, including a residence on Delaware Avenue, long the élite residential thoroughfare of the city. In addition he still held property in England, protected by various trusts, and apparently he was able to leave a considerable competency to his family.
Exact details of what happened in Truscott’s North American banking venture may never be known. It is difficult, however, to come to any other conclusion than that Truscott and Green were misusing investors’ funds for speculation in New York State and that they were outfoxed by an unscrupulous partner, although not to the extent that they would have had others believe. That Truscott must have had an impressive appearance and used his captaincy to best advantage is obvious; that he may have found many of his chief victims among wealthy investors in Toronto, including John Henry Dunn, seems a distinct probability. Whatever else, the panic of 1837 and the default of the Agricultural Bank likely accelerated the institution of stricter banking controls in Upper Canada.
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