Black Monday (1894)

This article includes a list of references, related reading, or external links, but its sources remain unclear because it lacks inline citations. Please help improve this article by introducing more precise citations. (December 2011) (Learn how and when to remove this message)

The Newfoundland Bank Crash of 1894, known as Black Monday, was one of the turning points in Newfoundland's pre-Confederation history.

The financial woes of the former British colony were worsened when two of the colony's commercial banks, 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.^[1]

Fish merchants sat on the boards of directors of both banks and had approved large and risky loans to themselves, which left the banks with dangerously-low cash reserves leading into the crash.

London banks suspended credit to the Commercial Bank of Newfoundland and requested payment on some of its loans. It was unable to meet these demands and was forced to close two days later. A bank run ensued on both the Union and the Savings Banks.^[1] The government-run Savings bank was able to weather the storm, but the Union was forced to close that day, never to reopen.