# How Did The Great Depression Affect Canadian Banks



## Plunger88 (Jan 21, 2011)

I'm curious did anyone study the activities of the great depression and what actually went down in Toronto?

I was looking at the historical photos of the bank runs on wall street (1929) - with the hoards of depositors trying to get their money out.

Did this same activity happen in Toronto back in the day? Does anyone think that in today's economy a scenario such as this is completely far fetched?

I know the Canadian banks like to pat themselves on the back because of how confident they are, but if you look at the stocks, I remembered those Canadian banks were pounded at the March lows. Nobody talked about that on TV.


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## K-133 (Apr 30, 2010)

I don't really know a whole lot, but I was talking to an elder colleague at work the other day, and this topic came up because of how his father and brothers were affected. 

What I get from it, is that it was something similar to what happened down South in 2008-2009.

Banks failed, and people lost their money. As an effect, many lost faith in the banks, and saved money through their own means. Hence, why it is no myth that your grandmother may have a mattress stuffed with cash, or coffee cans filled with coins buried in the back yard.

Other than that, I too am curious about what happened, and other parallels to the US Banks at present.


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## Square Root (Jan 30, 2010)

I don't think that any banks failed in Canada during the great '30's depression, but obviously they had to cut dividends(I think by about half). Their stock prices would clearly have been effected. Keep in mind that their scope of business activity would have been much less then than now-eg no mortgages then.


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## marina628 (Dec 14, 2010)

My grandparents were one of these that kept cash in the house ,my grandfather had a saw mill and they hung on to cash for security .I am fairly sure they did not lose any money but the fear made them hang on to cash the rest of their life.In 2003 when we had the blackout I was surprised how many people drive around on empty and had no cash .If bank machines quit today for 24 hours many would be screwed!I always keep around $3000 cash 'somewhere' so we can access it and my husband always keeps the cars full of gas ,lots of food and water etc around.
Thank god for the gas stove and BBQ that day!


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## the-royal-mail (Dec 11, 2009)

I haven't studied this in enough depth to know which stories are CDN and which are from elsewhere. Generally speaking, people made a run on the banks to get their money and there was simply no money for the banks to give. Many of the people who lived through that obviously learned that you are the one who needs to keep control of your money. And they did just that, in cigarette tins, coffee cans and the like.

I believe we should never forget what happened back then as there are many valuable lessons for the average person. Keeping control of your own money is one of those lessons.


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## Square Root (Jan 30, 2010)

the-royal-mail said:


> I haven't studied this in enough depth to know which stories are CDN and which are from elsewhere. Generally speaking, people made a run on the banks to get their money and there was simply no money for the banks to give. Many of the people who lived through that obviously learned that you are the one who needs to keep control of your money. And they did just that, in cigarette tins, coffee cans and the like.
> 
> I believe we should never forget what happened back then as there are many valuable lessons for the average person. Keeping control of your own money is one of those lessons.


There have been localized"mini" runs on certain banks over the years. CIBC in NFLD 10 years ago or so. Certainly CDIC insurance prevents true bank runs today. I think you are a little paranoid if you keep more than $1k in cash. CDIC would step in within a day to calm any fears.


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## marina628 (Dec 14, 2010)

Depends on your lifestyle


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## plen (Nov 18, 2010)

It can still happen in today's global economy, not sure if it would in Canada, but England experienced it.


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## the-royal-mail (Dec 11, 2009)

Didn't a run on the bank also happen a couple of years ago down in the US? I thought it did.

I never knew about the NFLD one - what happened?

I also did not know CDIC would step in that fast. How quick are they to jump in and ensure I get my money and can continue to meet my obligations? Of course, while the house of cards is falling, all those pre-authorized debits people have will cost us in NSF charges and sorting all of this out.

I am not at all opposed to using cigarette tins and coffee cans to store doomsday cash. Not your entire savings for sure, but some. I live through Ice Storm 98 and Blackout 03. No electricity means no gas and no money.


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## Square Root (Jan 30, 2010)

Nothing much-the CIBC denied any rumors and made sure there was enough cash on hand to pay people out. The scare died out in a few days. The Finance minister would get up in front of cameras and say the Cdn banks are sound, CDIC guarantees everything up to $100k, and credit lines would be extended to any bank that might need them. This would stop any run in its tracks.


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