I am currently reading the Amulree Report regarding the Domion of Newfoundland in 1933. While reading the report it talks of the Bank of Nova Scotia, which I of course knew of, but it also talks about the Merchants bank of Halifax which became the Royal Bank of Canada. I know that both banks were eventually bought out but how did banks from the smaller city of Halifax become the major banks in Canada instead of ones from the larger centres of Montreal or Toronto?
Or am I just wrong in general and in fact other banks in the larger centres were in fact the main banks?
Great question - we almost never get anything on Maritimes history!
You'd probably be very interested in James' D. Frost's article in the 1982 edition of Acadiensis - the regional history journal for Atlantic Canada. In this article, Frost describes how the Bank of Nova Scotia grew to be the largest and most influential bank in the region between 1880 and 1920. Essentially, the bank earned its early capital through lending to nascent regional industries - then, by the early 1900s, began opening branches elsewhere in Canada and the United States. Frost goes on to describe how the bank did eventually consolidate operations in Montreal - and drove a large-scale exodus of funds from the Maritimes towards other areas of the country.
While I don't have time ATM for a more substantial answer, this issue related directly to my own research and so I'd be more than happy to discuss it further if you require any clarifications or have further questions!