[12][13] Meanwhile, the Panic of 1907, caused by the failure of Augustus Heinze's brother's bank in New York, exacerbated the difficult labour market and brought racial tensions to the fore.
The riots that broke out on September 7, 1907 were the accumulation of growing enmity toward the Asian immigrants that were coming to the United States and parts of Canada.
[3]: 163 As the numbers of Asian immigrants continued to grow, anti-Asian activist began to feel threatened that the Japanese could "ultimately control [Vancouver] part of Canada".
[14]: 66 The riots represented the voices and feelings of anti-Asian activists, in attempt to "convince federal authorities of the seriousness of anti-Japanese sentiment in British Columbia".
Early in 1907 the Grand Trunk Pacific Railway lobbied Ottawa to let it import 10,000 Japanese workers to build its line in Northern BC [this figure is often misquoted as 50,000].
Many Chinese victims of the Bellingham race riots fled to Canada,[15]: 174 subsequently fuelling the Asiatic Exclusion League of Vancouver to take a stance against further Asian immigration.
[17] At the third meeting, members of the Asiatic Exclusion League decided to plan a parade for Saturday, September 7, which would include a band in order to draw attention.
[15]: 176 The parade would lead to Vancouver City Hall at Hastings and Main (then named Westminster), next to Chinatown, where a rally would be held to address the issues of Asian Immigration.
[15]: 176 10,000 Canadian and American citizens marched in that anti-Asian immigration parade, which resulted in a mob rioting throughout Chinese and Japanese neighbourhoods within Vancouver.
The crowd gathered at the parade turned into a rioting mob, throwing beer bottles and rocks at windows, attempting to destroy Chinese owned stores and homes.
In spite of the defenders inflicting a number of injuries upon the attacking mob, more than 50 stores and businesses in the Japanese district on Powell Street had their windows broken, resulting in thousands of dollars of damage.