Today’s date marks the 97th anniversary of the failure of the Home Bank of Canada, which had 71 branches and more than 60,000 depositors across the country before it lost it all in a tale of controversy and corruption.
It was Aug. 17, 1923, when the bank’s head office and main branch – located in downtown Toronto – didn’t open for business. Instead, someone placed a sign in the window reading, “Bank Closed. Payment Suspended.”
A day prior, things were seemingly normal at the bank, which began as the Toronto Savings Bank in 1854; nearly two decades later, in 1871, legislation in the federal Bank Act then saw the institution become the Home Savings and Loan Co.
Business flourished, and in 1903, the bank applied for and received a federal charter to become the Home Bank of Canada, which was then empowered to issue banknotes and extend loans.
Unfortunately for everyone involved, these new-found powers proved disastrous for the bank, which eventually saw 10 of its officials arrested on charges ranging from concurring with false returns to fraud.
More than 60,000 Canadian farmers and most of Toronto’s Catholic community were reported to lose their savings, and former bank president Herbert Daly, who was at one time Canada’s youngest bank president, was unable to testify after a nervous breakdown.
Daly died a few months later on Oct. 22, 1923.
FIRST FAILURE SINCE 1911
The failure of the Home Bank of Canada marked the first time one of the country’s chartered banks went under since the Farmer’s Bank failed in 1911.
Because of the Home Bank’s relatively short lifespan, many of the remaining banknotes are considered rare. All of its notes were printed by the American Bank Note Company in Ottawa.