The Newfoundland Savings Bank, June 12, 1834-March 31, 1962

The Newfoundland Savings Bank, June 12, 1834-March 31, 1962

Basic facts

• The Newfoundland Savings Bank was established by statute: “An Act for the Establishment of a Savings’ Bank in Newfoundland.” which received Royal Assent on June 12 1834. 

• It appears to have operated until March 31, 1962. For example, in a journal article it is described as “open June 12th, 1834” and “closed March Thirty-First” in 1962. 

• Early policy: the notice of July 25 1834 states that deposits as little as one shilling sterling could be received; the interest rate was 3 % and money was repayable on demand upon production of the duplicate account; sums under one pound or deposits less than six months would not earn interest; the Government guaranteed safe keeping of deposits under £50. 

Purpose, functions & institutional character

• The bank was set up by the colonial legislature primarily as a savings institution for the general public (“a provident institution for the savings of the poor” in one description). 

• Because it was government-established (under the act) it did not operate like a full commercial bank: it did not (at least originally) make loans or carry on broad banking business. One account describes it as “purely a savings bank and nothing else – a sort of super ‘thrift club’” in the words of a 1962 article. 

• Its management: according to one source the board of Governors was appointed by the Governor and consisted of members of the Executive Council and House of Assembly. 

• Its role in the economy: Because it accepted deposits and then invested in secure government or “gilt-edged” securities, it served as a mechanism for the colonial / provincial government to mobilize savings. An article suggests that the balance remaining at closure was earmarked by the government for special endowment and into the Consolidated Revenue Fund. 

Significance and historical context

• The creation of the Savings Bank in 1834 fits into a broader trend of 19th-century savings banks established to encourage thrift among labouring and poorer classes, as opposed to commercial banks which served merchants and large borrowers.

• In the context of Newfoundland’s economy (which relied heavily on the cod fishery, seasonal labour, merchants, and did not have a large industrial base), the institution provided a safe place for modest savings and thus a kind of financial infrastructure for ordinary people.

• The bank survived major crises that affected other banks in Newfoundland: for example the 1894 bank crash, when two private banks collapsed. The Savings Bank is noted to have remained solvent because it did not engage in the same risky lending practices.

• Its closure / absorption in 1962 marks a shift: by then the banking environment had changed (with larger commercial banks, entry of Canadian banks into Newfoundland, etc.) and a small government-savings institution may have been seen as outdated. The 1962 article notes the “passing of the Newfoundland Savings Bank … part of a long-established and accepted pattern” of consolidation. 

Key dates & milestones

• 12 June 1834: Act for establishment passed. 

• July 1834: Notice of deposits published. 

• 1894: In the bank crash, the Savings Bank remains solvent. 

• March 31, 1962: Bank closes / is merged / its operations cease as the Newfoundland Savings Bank. 

Things to watch / caveats

• While nominally a “bank”, its functions were limited compared to full commercial banks (e.g., no broad lending, no issuing of notes like commercial banks). Its primary role was deposit taking and investing those savings.

• The perspective of sources may treat the institution favourably (as a safe and steady institution) — but for full analysis one should check whether and how it served the lower-income population, whether there were barriers to depositors, etc.

• The context of Newfoundland prior to Confederation (with its own currency, banking arrangements, colonial status) matters. The bank’s role may differ before and after Newfoundland joined Canada (1949) and liberalization of banking practices.

• For archival research: the booklet titled “The Newfoundland Savings Bank June 12, 1834 - March 31, 1962” compiled under direction of R.F. Sparkes is cited in a periodical as “very informative”.