How Home Bank's collapse 100 years ago changed Canada's banking system forever

financialpost.com:

On a warm Friday afternoon on Aug. 17, 1923, a determined mother of two boys — one five, the other four — left her home in Toronto’s Cabbagetown and headed to the bank. Mrs. Hill was fretting about the coming winter, paying for coal and winter clothes for the boys she still called her “babies.” Her husband worked “odd jobs” and had “nearly starved himself” to save the $40 Mrs. Hill had tucked away in her purse. Last winter it was her parents that came through with money for coal and clothes. This winter her family would pay their way, she thought.

Mrs. Hill pushed open the bank’s heavy wood door, deposited $40 and had now “banked” $274.19 (about $4,500 today). After dinner Cabbagetown was abuzz. Neighbours were saying a bank had failed. Mrs. Hill’s stomach dropped. It was her bank, the Home Bank of Canada, a 71-branch chartered bank headquartered in Ontario, with roughly 60,000 customers and branches from Quebec to British Columbia. It took deposits from the working-class and provided reckless loans for railways and castles. Its doors guarded secrets, rather than the savings of depositors.

Mrs. Hill would eventually recoup about half her savings, yet she spoke for many Canadians when she told her local Member of the Ontario Legislature that, “This kind of thing gives no man or woman a heart to work or save, does it?”

This kind of thing gives no man or woman a heart to work or save, does it?

The Home Bank’s demise sparked a Royal Commission that ultimately shamed Ottawa into offering 35 cents on the dollar to help some depositors, a first in Canadian history. And the last. Yet the Home Bank failure didn’t happen in isolation. It was the culmination of an escalating pattern of instability Canadians had grown tired of.