In 1932, the Bank's problems peaked. Falling Cuban sugar prices and loans for pulp and paper expansion in the '20s, some to companies controlled by Holt, were largely responsible for $60 million in non-performing debts.

Few beyond head office ever knew just how precarious the situation was. It was clearly time for Herbert Holt to step aside and in 1934 the Bank got its first professional banker as president. Morris Wilson, who had been trained by Martin Dickie in Truro, took over at the depth of the Depression.

President Morris Wilson
c. 1934

Morris Wilson: Gentlemen of the Committee, our western loans outweigh our deposits by $106 million. We cannot afford a liquidity crisis. It costs 2% more to carry on banking in the west than in the east, and…

The Royal Bank closed a number of its branches during the Depression, and though it had kept all its staff, much pain remained for banking customers.

1934 saw key changes in the Bank Act, which began to stabilize the credit crisis. Most important was the formation of a Central Bank. The new Bank of Canada, long a dream of Edson Pease, was headed by former Royal banker Graham Towers. From now on, Ottawa would prescribe the country's credit.