Buildings in East Gwillimbury: the Sovereign Bank Building (1902)

Banking is a relatively recent institution in Canada, even though its roots extend to the time when Canada was a British colony. Many different banking institutions were established across the country and thrived when the economy was doing well; they could also be thrown into disarray (and occasionally bankruptcy) when society at large experienced major economic depression. Considering this, today we are going to talk about the Sovereign Bank of Canada and talk about the bank building that still stands in Mount Albert today.

This bank was founded by businessman Duncan M. Stewart on August 23rd, 1902, using capital that he obtained from J.P Morgan & Company and the Dresdner Bank of Germany. Mr. Stewart was known as a risk taker in terms of his banking investments, as opposed to investing cautiously and conservatively. The head offices of the Sovereign Bank of Canada were located on 38 King Street, Manning Arcade, Toronto. They had a great amount of success in their first year, as the Newmarket Era reported that the Sovereign Bank declared “a dividend at the rate of five per cent, which will be paid to the shareholders every three months.” [1] Under his guidance, he increased the number of banks that were operating in different cities; branches were opened in many places north of Toronto, including Stouffville, Markham, Unionville, and Mount Albert. There was even a large bank branch which was established in Newmarket on the corner of Botsford Street and Main Street.

The Sovereign Bank claimed that their authorized capital (the amount that they could lend to a person or business entity) was $2,000,000, and that the rest of their bank balance amounted to $523,000. Unfortunately, their success was only a thin veneer, which did not stand up too well to scrutiny. The bank had made significant loans to a variety of companies, including to the Alaska Central Railroad and the Chicago and Milwaukee Electric Company where they were decidedly lax in establishing whether they were able to pay off their debts, as “[they] appeared to secure loans from Stewart with little or no due diligence.”[2] There was a minor depression in 1907 (known as the “Great Panic”), which marked a dramatic recession wherein the GDP of both Canada and the United States plunged dramatically.

In June of that year, the president of the Bank as well as D.M. Stewart resigned, knowing that they were running the institution into the ground; Stewart fled to Alaska to escape the consequences of his actions. Noted Toronto businessman Aemilius Jarvis stepped into the role of the General Manager of the Sovereign Bank to try to save them from going out of business, even going to far as to make an emergency trip to New York on January 8th, 1908, to meet with representatives from J.P. Morgan to request a last-minute infusion of cash to keep them afloat; his request was unfortunately denied.

The bank building in Mount Albert likely dates to 1902 when the Sovereign Bank first announced that it was open for business. It is a beautiful two-and-a-half story brick building, which has a gable roof with a street-facing parapet wall. The windows and doors are plain, but there are picturesque domed arches that are fitted over the windows, giving the front of the building a pyramidal effect.

The managers of the Mount Albert branch of the Sovereign Bank were the following people:

· 1902 – 1904: Mr. W. J. Stark

· 1905 – Mr. C. Urquhart

· 1907 – Mr. A. C. Burkholder.

After the dissolution of the Sovereign bank of Canada, the branches were divided up and taken over by other Canadian banks. Does anyone know what happened to the Mount Albert bank branch after 1908? If you do, please let us know in the comments section below!

Figure 1: Pencil engraving of the Bank building in Mount Albert. From the East Gwillimbury Historical Society's publication, Time Lines, 1994.

[1] https://news.ourontario.ca/newmarket/2425134/page/1241364?q=Sovereign+OR+Bank [2] Martin, Joe (2014). “The Forgotten Credit Crisis of 1907”. Toronto: University of Toronto. Retrieved from https://www.rotman.utoronto.ca/-/media/Files/Programs-and-Areas/CanadianBusinessHistory/Forgotten_Credit_Crisis_of_1907_10-29-14.pdf?la=en