CASSELS, ROBERT, banker and businessman; b. 21 Feb. 1815 at Leith, Scotland, son of Walter Gibson Cassels and Janet Scougall; d. 18 Feb. 1882 at Montreal, Que.

Robert Cassels began his banking career in 1831 when he joined the National Bank of Scotland at Leith. He then worked in England until 1837 when he immigrated to Nova Scotia and opened a branch of the Bank of British North America at Halifax. During the next 24 years he managed branches at Chatham, N.B. (1838–41), Quebec City (1841–55), and Montreal (1855–61). By 1861 he was one of the more respected and experienced bankers in British North America. Wooed to Toronto in March of that year by Alexander Tilloch Galt*, Cassels became chief cashier (general manager) of the faltering Bank of Upper Canada, succeeding Thomas Gibbs Ridout*. Cassels’ decision to accept the post was a fateful one. The bank, which had enjoyed a long, if overly respected, career since 1822, was virtually insolvent. In the words of a perceptive contemporary, David Lewis Macpherson*, it was managed by two “old men” (Ridout and William Proudfoot*) and assorted “cantankerous noodles.” The bank had failed to master a series of problems in the late 1850s and was forced by the recession of 1857 to reap the harvest of careless credit policies; it had to accept useless securities and unsaleable real estate from debtors, thus severely restricting its cash flow.

Into this financial morass stepped Cassels, attracted in part by the board’s guarantee of $10,000 annually for eight years and the promise of absolute control as manager. Before all else, he had to increase the bank’s working capital and convince the public that the institution had a future. Since it was the government bank, Cassels looked to Galt, the Canadian minister of finance, for aid. Conditional on an optimistic report from Cassels concerning the bank’s position, Galt privately promised both an increase in the government’s deposit, which had already reached $1,200,000, and a guarantee to Glyn, Mills and Company, the bank’s London agents, for future debts. In April 1861 Cassels supplied the requisite report to Galt. The public, however, did not learn about the government support, and the large amount owed Glyn, Mills and Company was included in the bank’s annual statement for 1861 under the entry “cash deposits bearing interest.” Believing on the basis of Cassels’ report that the bank was worth saving, the stockholders accepted a reduction in capital from $50 to $30 per share, thus freeing some $1,200,000 to cover outstanding bad debts.

Cassels also initiated an overhaul of the decrepit managerial structure: head office activities were separated from branch business, loans and discounts were severely curtailed, and a land department was created to collect outstanding mortgages, terminate hopeless debts, and sell all land belonging to the bank. Cassels took a number of small creditors to court, and he forced large debtors such as the Kingston Brewery and Distillery (owing $210,000) [see James Morton*], the Lyn Tannery near Brockville ($124,000), and the Chippewa Distillery and Tannery at St Catharines ($128,000) into trusteeship to be managed on behalf of the bank. He himself acted as trustee or co-trustee of the three firms. The bank received little from these arrangements but Cassels, as trustee, did, in the form of commissions and inside information. His brother, Richard Scougall, a branch manager for the bank at Ottawa, purchased the Lyn Tannery in the late 1860s, and with Robert, who also owned flour and woollen mills, operated it until 1879.

Cassels had particularly to maintain good relations with several associates: with the Canadian government because its account enabled the bank to remain solvent; with the Grand Trunk Railway which had a debt of about $200,000 and was reluctant to pay it off; and especially with the Bank of Montreal which could at any time demand that its transactions with the bank be made in specie rather than notes – such a demand, attempted in the early 1860s, would have drained the bank of its holdings and precipitated collapse. In May 1862 a reform-oriented government, headed by John Sandfield Macdonald* and Louis-Victor Sicotte, replaced the Conservative ministry of John A. Macdonald* and George-Étienne Cartier* of which Galt had been a member. Cassels’ government connections crumbled. Luther Hamilton Holton* from Montreal, who became minister of finance in 1863, had long despised the Bank of Upper Canada which he considered a Conservative tool. Ignoring what he thought was Cassels’ “bullying, coaxing and whining,” Holton transferred the government account to the Bank of Montreal, effective January 1864. Despite considerable parliamentary lobbying Cassels failed to get the Grand Trunk to grant the bank preferential status for repayment of its large loans. Finally, late in 1866, the Bank of Montreal, managed by Edwin Henry King*, Cassels’ former employee at the Montreal branch of the Bank of British North America, demanded redemption of the bank’s notes in gold. The Bank of Upper Canada suspended payment on 18 Sept. 1866 and was placed under trusteeship on 12 Nov. 1866. Cassels was one of the trustees.

Perhaps Cassels had been, as Bank of Montreal director John Rose claimed in 1866, excessively “sanguine.” But he himself stood to gain much in salary and commissions by the bank’s continuance; after the collapse and a legal battle with the rest of the bank’s trustees (he resigned from the posts of trustee and manager on 10 July 1867) he lost the remaining years of his guaranteed salary and in 1868 he had also to arrange a payment of $20,000 to the bank to clear off claims made by the trustees about his use of its funds.

By 1867 Cassels had been, in addition to a banker, a successful negotiator for the city of Hamilton with London bondholders in 1863, a director of the Grand Trunk Railway from 1858 to 1866, the Canada Landed Credit Company of Toronto in 1866, and the Northern Railway Company of Canada during the 1860s, president of the St Andrew’s societies of Quebec City, 1854, and Toronto, 1865, and the St James Club of Montreal, a Queen’s College of Kingston trustee in 1866, and a militia officer, retiring in 1862 as the senior major in the Montreal Garrison Artillery Brigade. Despite this background and his requests for assistance from Sir John A. Macdonald, Cassels could not overcome his association with the Bank of Upper Canada and never again worked for a publicly owned bank. He left the Lyn Tannery around 1879, relocating in Montreal where he operated as a private banker until his death three years later, virtually unnoticed.

On 7 Aug. 1838 Cassels married Mary Gibbens, daughter of James MacNab, receiver general of Nova Scotia. They had five daughters and nine sons including Hamilton and Robert, prominent Toronto lawyers, and Walter Gibson Pringle who became a judge of the Exchequer Court of Canada.

Peter Baskerville