In January 1869, the manager of the Hastings Mill, J.A. Raymur, started the New London Mechanics Institute, a meeting room and library for mill employees. In March 1869, it was renamed the Hastings Literary Institute, in honour of Rear Admiral the Honourable George Fowler Hastings. No official records of the Hastings Literary Institute have survived, but it is known that membership was by subscription. The Hastings Literary Institute continued to exist until the Granville area was incorporated as part of the new City of Vancouver on April 6, 1886.

Following the Great Fire of Vancouver on June 13, 1886, 400 books from the now-defunct Hastings Literary Institute were donated to the newly established Vancouver Reading Room. In December 1887, the Reading Room opened at 144 West Cordova Street, above the Thomas Dunn and Company hardware store. It was also known as the Vancouver Free Library and the Vancouver Free Reading Room and Library.

By the late 1890s, the Free Reading Room and Library in the YMCA Building on West Hastings had become overcrowded. During this period, the American industrialist and philanthropist Andrew Carnegie was giving money to cities and towns to build libraries. In 1901, the City of Vancouver approached Carnegie about donating money for a new library to replace the space in the YMCA Building.