HERITAGE FEATURE
The Home Bank Crash
The Home Bank as it was intended to look in 1909 , modelled after the flagship Vancouver location . Due to budget constraints the stately second floor was eliminated , resulting in the building that we know today as the Fernie Museum .
The Home Bank of Canada was incorporated July 10 , 1903 , in Toronto under a federal charter with the power to issue bank notes , extend loans , and invest in businesses . The Home Bank succeeded the Toronto Savings Bank , which had been set up by the Roman Catholic Diocese to provide financial services to Irish immigrants , and the Home Savings and Loans Bank , which succeeded the TSB in 1871 , following the introduction of the Federal Banking Act .
James Mason , a Military Officer and then manager and president of the TSB , and directors of the United Grain Growers based in Winnipeg , supported the founding of the bank and were among the first members of the board of directors . The bank had its eyes pointed towards the burgeoning farming and mining towns throughout Western Canada . With over 70 branches , the bank appeared strong and prosperous but was taking advantage of the government ’ s ‘ hands-off ’ approach . James Mason , who had started out at the bank as a clerk and risen to its highest position , was making questionable investments including loans to his close family friend , Sir Henry Pellatt , a board member with the Crow ’ s Nest Pass Coal Company . Pellatt Avenue in Fernie was renamed 3rd Avenue in 1967 , and Mason Avenue became 8th Avenue .
William Machaffie , head of the Winnipeg branch , along with the United Grain Growers directors , began raising
20
concerns about the bank ’ s practices in 1914 . They appealed directly to the Minister of Finance , Sir Thomas White , when attempts to report troubling behaviour to the Toronto-based board of directors were ignored . With World War I looming , White ignored the reports based largely on internal audits . After Mason became a senator , a series of new general managers were succeeded by Mason ’ s son , James Cooper Mason , in 1916 . After repeatedly causing trouble , Machaffie was fired in 1917 and White continued to disregard reports of financial misdealing .
In the post-war financial slump , the bank continued to founder . The Home Bank ’ s stock plummeted , secretive loans were secured to keep the accounts solvent , and creative bookkeeping was employed to manage the reports . In 1920 , interest rates were raised causing assets to be worth less than the outstanding loans . In 1922 , the United Grain Growers sold all their shares and the Western Pulp and Paper Company defaulted . In 1923 ,