risk because if they failed, their shareholders were responsible for the full loss. Since the banks did not require a legislated charter, many more banks could be founded, and they were more competitive, thereby endangering the solvency of the speculative chartered banks. The Bank of the People Dr. Duncombe's report opened the legal door for new banks to be founded. The Reformers' abandoned their attempt to establish a "Provincial Loan Fund" for farmers in the Legislative Assembly, and instead turned their efforts to creating a new joint-stock bank. The first bank to be proposed was the Farmer's Bank. However, in a bitter shareholder proxy battle, control of the bank was won by the Hon. John Elmsley Jr., a member of the Family Compact. He was one of the largest shareholders in the Bank of Upper Canada. William Lyon Mackenzie argued that the Bank of Upper Canada "served the double purpose of keeping the merchants in chains of debt and bonds to the bank manager, and the Farmer's acres under the harrow of the storekeeper. You will be shewn how to break this degraded yoke of mortgages, ejectments, judgments and bonds. Money bound you - money shall loose you" (Correspondent & Advocate 30-7-1835). Inspired, the Reformers, led by James Lesslie, a prominent Toronto businessman and Reform city alderman, then founded the Bank of the People on Nov. 4, 1835, seeking to limit shareholders to known Reformers. Dr John Rolph was elected president, and James Lesslie the cashier (manager). Among its stockholders were David Willson and the Children of Peace who operated the first credit union in Canada in their village of Hope. Sir Francis Hincks, head cashier at the Farmer's Bank, later became cashier at the Bank of the People and Lesslie became president. One loan from the bank stood out: they gave William Lyon Mackenzie £200 to found the Constitution newspaper on July 4, 1836 to organize the democratic reformers of Upper Canada. The new bank was soon to prove its distinctiveness. Despite offering 5% interest on deposits, it was able to deliver a 6% dividend in 1837, in spite of paying off £1,200 in start-up costs. It managed to do this despite the general economic downturn, and without resorting to widespread litigation. The Bank was located in a house on New (Jarvis) Street owned by James Beaty, a reform city councillor. During the financial panic of 1837-8, the Tory