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 Former Bank of Prince Edward Island - Charlottetown, PEI Posted by:  T0SHEA
N 46° 13.913 W 063° 07.493
20T E 490370 N 5119819
This building, known locally as the Peake-Carvell Building, appears to have been the first home of the first bank on Prince Edward Island.
Waymark Code: WMQTCQ
Location: Prince Edward Island, Canada
Date Posted: 03/27/2016
Views: 8
The Bank of Prince Edward Island was incorporated on April 14, 1856, opening its doors four months later. This building was built in 1856-1857 and documents concerning the history of the bank mention no other locations for the bank before this one. The building itself was divided into three apartments, with two being occupied by retail businesses and the third set up for the Bank of Prince Edward Island.
It was not two years later, in December of 1857, that the bank was forced to close its doors by the recession of 1857-58. Recapitalized and restructured, the bank reopened in March of 1858, primarily because it was the only bank on the Island and was vital to the Island's economy. The bank remained in this building until it built its own, much larger, premises in 1866.
Things went smoothly for the bank, or so it appeared, until 1881, at which time things came to a screeching and crashing halt for the Bank of Prince Edward Island. By that time, though, there were a small handful of other banks on the Island which were in position to take over the business that the Bank of Prince Edward Island had been doing.
Known as the "Old Bank" the Bank of Prince Edward Island was the first to be chartered on the Island and was considered by many to be the safest and most stable of the handful of banks operating on PEI by the 1880s. Ultimately, though, the story of its demise becomes a classic example of how NOT to run a bank. A precis of the account of the bank's failure can be read below.
The first hint of trouble appeared when the cashier, Joseph Brecken, departed for Saint John, New Brunswick, on 21 November [1881] and failed to return to work the following Monday. As Brecken explained to his wife:
I know what people will say about me. I deserve it all and plead guilty. Where customers got the thin of the wedge in, I had to go on advancing in order...to get the whole monies due the bank back without loss. This every person promised to do. I had to keep these facts from the directors or I would have been dismissed from the bank. I therefore commenced my downward course by telling lies and ended by making false accounts.
A subsequent audit discovered that the bank had lost almost $300,000, with one outstanding account still to be calculated. For more than a year the cashier had deliberately deceived the directors. He had granted loans to customers whom the directors considered untrustworthy, recording these transactions in a secret bill book while continuing to take the regular bill book to the monthly meetings.
After the board of directors had refused a $1,000 loan to Shedd and Moore Lobster Shippers, for example, Brecken granted them $42,000 the very next day. Although the directors had also ordered that John Hughes' liability to the bank should not exceed £4,000, the cashier's secret bill book for 1881 detailed ten entries over three months allocating more than £31,000 to Hughes. At other times, Brecken deceived the directors about a potential borrower's credit to provide him with additional discounting privileges. Each month the cashier presented the bank's overdrafts to the board for inspection, but here again Brecken omitted some names and reduced the apparent debts of others. When Brecken absconded, the bank held approximately $250,000 in 100 overdrafts, of 64 of which the directors knew nothing. The president's announcement that he would soon be checking the books in preparation for a semi-annual dividend distribution sparked the cashier's sudden departure.
Although Brecken had deliberately deceived the board, several out-of-province newspapers placed the bank's failure squarely on the directors' shoulders. As with recent banking scandals in Newark, Boston, Kansas, Toronto, Saint John, and Glasgow, Scotland, the losses were blamed on the directors' "culpable negligence", poor business practices, and the tendency to place too much trust in one person.
H.J. Cundall, whose father had been the bank's cashier for 20
years before he died in 1877, wrote to a colleague in Montreal that the bank's failure spoke "little for the intelligence or business capacity of the directors. I had no faith in them myself but the collapse came sooner & was more complete than I anticipated". The board of directors, in general, was not a particularly competent body in financial matters. Only one director knew much about accounting, and Joseph Hensley admitted he did not understand double entry bookkeeping. In addition, despite the worsening recession, the bank had continued distributing its profits in dividends, while allowing its reserves to decline.
From the University of New Brunswick
Peake-Carvell Building
Apart from the Peake House (50 Water Street) and store, now known as the Carvell Building, (23-25 Queen Street) there is little left on this block to remind the viewer of its early commercial character. At one time the block boasted a number of major wharves including the Pownal Wharf built in 1843-45, the Lord's Wharf, and closer to Queen Street, the Peake No. 1 Wharf, later owned by the Pickard Coal Company. It was from one of these that the Fanny sailed for the California gold fields in 1849. It was here also that the hull of the Castalia was hauled up, roofed over and used as a venue for social events such as Lady Mary Fitzroy's bazaars of the early 1840s.
James Peake, merchant, shipbuilder, politician and banker, built this substantial structure in 1856-57. It replaced an earlier wooden building built by Peake in 1828. Based on its style one would imagine this to be a much older building than it is. Luckily for the researcher its construction is referenced in both city council minutes and insurance records.
The building was initially divided into three units. In 1858 two of these housed stores, the third was set up for the Bank of Prince Edward Island. The store spaces were originally occupied by businesses run by Samuel A. Fowle and George F.C. Lowden. By 1862 Carvell Brothers had moved into the store spaces, eventually expanding into the space occupied by the bank.
The September 14, 1912 issue of the Examiner reported that Carvell Bros. had purchased the building from the Peake estate. Carvell Bros. continued to operate from this site until 1976 when the property was bought by the Charlottetown Area Development Corporation. The Corporation sympathetically renovated the building and repaired its slate roof. Shortly before the sale of the building, Carvell Bros. donated a number of business records found in the attic to the Public Archives and Records Office. These records were associated with businesses operated by the Peake and Brecken families.
From the City of Charlottetown
Address:
25 Queen Street
Charlottetown, Prince Edward Island
C1A 4A2
Year: 1856
Website: [Web Link]
Current Use of Building: Restaurant, offices and residential
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Visit Instructions:
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