OTD: Home Bank closes, depositors lose everything

Today’s date marks the 92nd 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 Home Bank, which began as the Toronto Savings Bank in 1854. Nearly two decades later, in 1871, legislation in the federal Bank Act 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 its own banknotes and extend loans.

LOOMING DISASTER

Unfortunately, this empowerment 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.

Because of the bank's relatively short lifespan, its banknotes are considered rare.

Because of the bank’s relatively short lifespan, its banknotes – like the one shown above – are considered rare.

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 banknotes were printed by the American Bank Note Company in Ottawa.

From 1904-20, about 1.1 million $5 bills were issued by The Home Bank of Canada. Each note has an orange tint, red serial numbers and a right-facing portrait of Major General Sir Issac Brock to the left of the bill.

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