In the spring of 1854, the people of PEI decided they needed a bank of their own. The closest bank was in Halifax! They sent the bill (a bill asks for legal action from Britain) to Britain on May 1, 1855, but the bill was rejected. The king said that it didn't have all the financial agreements it was supposed to have. PEI again sent the bill, and again it was rejected. They sent the bill yet again on April 14, 1856, and the king finally agreed. However, if the bank was unable to meet its financial agreement in sixty days, it would lose its charter. Late in 1857, there was a crop failure, so the bank had to give discount advances to their best customers. The bad weather made it hard for farmers to go to market to sell their products, so the people who had to pay the bank didn't have the money to pay them. The first bank of Prince Edward Island had to close. The people went crazy! They tried to get to the bank to exchange the PEI coins for British coins. But, in March of 1858, the Bank of Prince Edward Island opened again because of its importance to the community. In the fall of 1859, a good harvest made a big improvement in financial conditions, so the bank was happy to say there was an 8% dividend! Because of this, four more banks were built on the Island between 1862 and 1871! These banks were the Farmers' Bank of Rustico (1862), the Union Bank (1864), the Bank of Summerside (1866), and the Merchants' Bank of Prince Edward Island (1871).

Merchants' Bank, Montague, ca. 1905
PARO, Acc 2476/19-1