Black Monday (1894)
Encyclopedia
The Bank Crash of 1894 called Black Monday was one of the turning points in Newfoundland's early history.
The financial woes of the former British colony were worsened when two of the commercial banks of Newfoundland, the Union Bank of Newfoundland (established in 1854) and the Commercial Bank of Newfoundland (established in 1858), both located in St. John's
, Newfoundland
, Canada
, closed their doors to the public on December 10, 1894. Neither bank opened again, with disastrous effects on both trade
and commerce
in the colony. Trade come to an abrupt halt and unemployment and destitution became widespread.
The closure of the banks brought Newfoundland to the brink of bankruptcy
and resulted in the Canada Newfoundland Confederation
talks. It also highlighted the weakness of its economy and the truck credit system
on which it depended.
The financial woes of the former British colony were worsened when two of the commercial banks of Newfoundland, the Union Bank of Newfoundland (established in 1854) and the Commercial Bank of Newfoundland (established in 1858), both located in St. John's
St. John's, Newfoundland and Labrador
St. John's is the capital and largest city in Newfoundland and Labrador, and is the oldest English-founded city in North America. It is located on the eastern tip of the Avalon Peninsula on the island of Newfoundland. With a population of 192,326 as of July 1, 2010, the St...
, Newfoundland
Newfoundland and Labrador
Newfoundland and Labrador is the easternmost province of Canada. Situated in the country's Atlantic region, it incorporates the island of Newfoundland and mainland Labrador with a combined area of . As of April 2011, the province's estimated population is 508,400...
, Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
, closed their doors to the public on December 10, 1894. Neither bank opened again, with disastrous effects on both trade
Trade
Trade is the transfer of ownership of goods and services from one person or entity to another. Trade is sometimes loosely called commerce or financial transaction or barter. A network that allows trade is called a market. The original form of trade was barter, the direct exchange of goods and...
and commerce
Commerce
While business refers to the value-creating activities of an organization for profit, commerce means the whole system of an economy that constitutes an environment for business. The system includes legal, economic, political, social, cultural, and technological systems that are in operation in any...
in the colony. Trade come to an abrupt halt and unemployment and destitution became widespread.
The closure of the banks brought Newfoundland to the brink of bankruptcy
Bankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
and resulted in the Canada Newfoundland Confederation
Confederation
A confederation in modern political terms is a permanent union of political units for common action in relation to other units. Usually created by treaty but often later adopting a common constitution, confederations tend to be established for dealing with critical issues such as defense, foreign...
talks. It also highlighted the weakness of its economy and the truck credit system
Truck system
A truck system is an arrangement in which employees are paid in commodities or some currency substitute , rather than with standard money. This limits employees' ability to choose how to spend their earnings—generally to the benefit of the employer...
on which it depended.