When rumours sent Newfoundlanders running to the banks in 1982
No one knew how the rumours started, but that was enough for some to demand their money from the bank
The rumours greatly worried some Newfoundlanders, including those who weren't willing to wait to find out if those rumours were true.
That's why some people living on the Rock were rapidly taking their money out of their bank accounts in the summer of 1982.
At the branch in Whitbourne, N.L., many local Scotiabank customers were closing their accounts after an unfounded rumour circulated that the broader bank was going bankrupt.
'People were taking no chances'
"No one seems to know how the rumours got started," the CBC's Barbara Yaffe told viewers on The National on July 2, 1982.
"But in Newfoundland, with the highest jobless rate and the lowest incomes in Canada, people were taking no chances."
One woman told CBC News about showing up to the bank and seeing people lined up outside the door, all waiting to close their accounts.
"We had to stand outside, we couldn't get in," she said.
Not every Newfoundlander was pulled in by the panic, however.
"What money I owns is in this bank now and that's where it's going to stay, I can tell you that right now," said a man wearing a ballcap who spoke to CBC News.
'No credibility' to rumours
Yaffe said the panic behaviour was also seen in other towns in rural parts of the province.
"They tend to be small places, where people know each other and rumours spread quickly," said Yaffe.
Officials in the bank industry tried to assure Newfoundlanders they had nothing to worry about.
"The Canadian banking system is the strongest — perhaps in the world — and the rumours that have developed in Newfoundland in the last week or so have no foundation, no credibility," said Clary Bartlett, a Scotiabank executive, when speaking to CBC News.
A Canadian Press report on the bank panic noted that the Bank of Nova Scotia had $52 billion in total assets at that time and its earnings were up nine per cent in the most recent quarter.
'Only in Newfoundland'
Yaffe said that to the bankers' knowledge, "the panic withdrawals seemed to be happening only in Newfoundland."
The reporter told viewers that one theory was that underlying concerns about the financial health of the provincial business community were to blame for the belief in the rumours that emerged.
"Particularly the large fishing companies and their ability to repay their loans to the banks," said Yaffe.
