OTD: Bank of New Brunswick first Canadian bank to operate under charter

On today’s date in 1820, the Bank of New Brunswick was incorporated in Saint John, where it became the first Canadian bank to operate under a charter.

Located in a new building on Prince William Street in Saint John – the capital of what was then the British colony of New Brunswick – the bank was founded by prominent businessmen from the area. With its new charter, the bank soon began issuing banknotes, which it would continue to produce until 1906. Denominations included $1, $2, $3, $4, $5, $8, $10, $20, $50 and $100.

In the 1820s, Saint John was the Maritime’s largest city, exceeding both Halifax and Toronto in population for some time during the 19th century.

By the 20th century, the bank lacked the capital necessary to remain competitive and its shareholders accepted an offer to merge with the Bank of Nova Scotia in February 1913. The large city of Saint John simply wasn’t attracting overseas investment despite higher returns when compared to Upper Canada.

A black-and-white proof (face shown) of the Bank of New Brunswick’s £2 issue of 1838-59 (CH-515-12-32P) was offered in the Canadian Legacy Sale II. (Photo by Moore Auctions)

MOVING WEST

Generally, investors chose Central Canada.

The bank’s headquarters moved west to Montréal – along with investors – as the newly formed Dominion of Canada opened up.

The Saint John Board of Trade wished for a “commercial union” with the U.S.; however, the Toronto Board of Trade opposed the union. At the time, the House of Commons was controlled by Ontario’s 100 seats – 59 of which were Conservative, including Toronto – while New Brunswick had 19 seats with three Liberals from Saint John.

The former Macdonald government voted against the commercial union bill of 1888, which would have granted Saint John access to a much larger U.S. market, continuing its economic power. Instead, the city was cut off from much of Central Canada and experienced a quick decline over the following century.

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