Joe Martin - From Wall Street to Bay Street: The Origins and Evolution of American and Canadian Finance

FROM WALL STREET TO BAY STREET

The Origins and Evolution of American and Canadian Finance

When the 2008 financial crisis triggered a global recession, the American banking system experienced massive losses, takeovers, and taxpayer-funded bailouts. In contrast, the Canadian banking system managed to maintain its liquidity and profitability, ultimately withstanding the crisis relatively well. These divergent outcomes can be traced back to inherent differences between these two banking systems and their institutional and political histories.

From Wall Street to Bay Street is the first book written for a lay audience that tackles the similarities and differences between the financial systems of Canada and the United States. Christopher Kobrak and Joe Martin reveal the distinctive paths the two countries have taken since the early nineteenth century, despite their similar British colonial origins. The authors trace the roots of each countrys financial system back to the time of Alexander Hamilton and Andrew Jackson and insightfully argue that while Canada has preserved a Hamiltonian financial tradition, the United States has favoured a populist Jacksonian tradition since the 1830s; as such, the innovative but erratic fashion in which the American system has changed over time is at odds with the more evolutionary and stable course taken by its Canadian counterpart. From Wall Street to Bay Street offers a timely and accessible comparison of financial systems that reflects the political and cultural milieus of two of the worlds top ten economies.

The late CHRISTOPHER KOBRAK was a professor and the Wilson/Currie Chair of Canadian Business and Financial History at the Rotman School of Management and a professor of finance at ESCP Europe, Paris.

JOE MARTIN is the Director of the Canadian Business and Financial History Initiative at the Rotman School of Management as well as President Emeritus of Canadas History Society.

The Origins and Evolution of American and Canadian Finance

CHRISTOPHER KOBRAK AND JOE MARTIN

University of Toronto Press 2018
Rotman-UTP Publishing
Toronto Buffalo London
utorontopress.com
Printed in Canada

ISBN 978-1-4426-4821-0 (cloth)
ISBN 978-1-4426-1625-7 (paper)

Printed on acid-free, 100% post-consumer recycled paper with vegetable-based inks.

Library and Archives Canada Cataloguing in Publication

Kobrak, Christopher, author
From Wall Street to Bay Street : the origins and evolution of American and Canadian finance / Christopher Kobrak, Joe Martin.

Includes bibliographical references and index.
ISBN 978-1-4426-4821-0 (cloth).--ISBN 978-1-4426-1625-7 (paper)

1. Finance Canada History 2. Finance United States History
I. Martin, Joe, 1937, author II. Title.

HG185.C2K63 2018 332.10971 C2017-908064-4

University of Toronto Press acknowledges the financial assistance to its publishing program of the Canada Council for the Arts and the Ontario Arts Council, an agency of the Government of Ontario.

To our students: past, present, and future.

I first met Chris Kobrak at the 2009 annual Business History Conference in Milan. As I recorded in my diary at the time, Met Chris Kobrak very impressive. In 2012 we invited Chris to become a visiting professor at the Rotman School of Management. He accepted our invitation and made such an impression that he was offered the first chair in Canadian business and financial history the Wilson/Currie Chair, which he assumed on a part-time basis (he was still teaching at cole Commerce Superior de Paris) and then, in 2015, he assumed his Rotman duties full time.

When Chris arrived (first as a visiting professor) the associate dean asked me to organize a seminar on Canadian-American relations. When Chris became chair that seminar blossomed into a full-time course, which we originally team taught (this was in addition to his course on the history of finance). We team taught the course to MBA students three times and in 2015 we offered it to undergraduates, a big breakthrough in getting history into the commerce program. Subsequently Chris struck up an acquaintance with the head of the history department and offered the course to both liberal arts and commerce students in 2016.

At Chriss suggestion we decided to convert the course material into a book, a book that would attract general readers who ordinarily might not be reading financial history, but wanted to understand better one of the most important and controversial economic relationships of our time. We proposed the idea originally in February 2012 and the following spring signed a contract with University of Toronto Press. We were to submit the revised manuscript to the publisher and reviewers two weeks after Chris died so unexpectedly in January 2017.

In addition to a passion for business history, Chris and I had similar political views and more importantly loved the great game of baseball. And while he was a long-time Yankee fan and I have been a Blue Jays fan since they arrived on the scene in 1977, we often enjoyed going to games together.

My wife Sally made the following observations about Chris and his impact: It quickly became clear that he would become not just my husbands respected and valued professional colleague, but a new family friend. Notwithstanding his impressive intellectual achievements, family and friendships were always of central importance to Chris. His legendary generosity, genuine curiosity, and enthusiastic embrace of the peculiarities of Canadian culture (from hockey games to politics to shopping at IKEA) made an indelible and welcome imprint on our lives. Above all, Chris simply filled up the room with his warmth, expansive personality and good humour.

I would be remiss if I did not mention Chriss inspirational role in creating the Canadian Business History Association / lassociation canadienne pour lhistoire des affaires (CBHA/ACHA). The association is now over a year old and has ten charter members, including four of the big five Canadian banks, nearly 100 individual members historians, archivists, academics, and business people, and a website with over 7,000 unique visitors, an online YouTube channel, and it has provided money for young scholars specifically for business history research, a first in Canada.

We all wanted Chris to be the first CBHA chair but he refused and insisted it had to be a Canadian, though he graciously accepted the position as vice-chair. That was evidence of both his wisdom and selflessness. When the board met in February 2017 after his death, we unanimously passed a resolution naming our recently created research fellowship as the CBHA/ACHA Chris Kobrak Research Fellowship. After that we adjourned to the Duke of York, a pub much favoured by Chris when he was in Toronto, and raised a glass or two in his honour. It was a fitting tribute to a good friend, valued colleague, and greatly missed co-author.

Joe Martin

This book could not have proceeded without the help of a large number of individuals. First and foremost are the donors to business history at the Rotman School: Lynton Red Wilson, Richard Currie, James Fleck, Anthony Fell, Henry N.R. (Hal) Jackman, and John McArthur. Our schools, the Rotman School of Management and ESCP Europe, have provided many forms of support. Over the years, many colleagues have made very helpful comments. They include H.V. Nelles, the late Ed Safarian, Donald Brean, Mira Wilkins, Geoffrey Jones, Richard Sylla, the late Michael Jalland, Paul Halpern, Robert E. Wright, Mark Bonham, Dimitry Anastaskis, and the late Michael Bliss, a donor by virtue of his generous gift of his business history library to Rotman. Important contributions were also made by our research assistants, including Darren Karn, David Verbeeten, Jonathan McQuarrie, Richard Matern, and Harrison Kennedy, by students from our Rotman courses, and by the editorial and production staff at University of Toronto Press, including Jennifer DiDomenico, Anne Laughlin, Ian MacKenzie, and Ani Deyirmenjian.