San Antonio daily light. [volume] (San Antonio, Tex.) 1886-1907, 1897-03-19

nere are Two upward movements, one
eliminating in May and the other in
November, while in Canada the former
movement is entirely absent and the
other occurs one month earlier than in
Scotland. The explanation will without
doubt be found in the Scotch practice
of making payments on mortgages, in
terst, annuities, etc, at those dates-a
practice not followed so extensively in
Canada.
an general single annual move
ment may be said to characterize agri-
cultural communities. This occurs in
the fall, and is due to what we have
come to call moving the crops Its
explanation may be found in the fact
that farmers as class are not accus-
toned to make use of bank deposits,
and consequently when payments are
made to them for their crops largely
at single season of the year, the sur
plus over immediate payments is re-
quired by them in the form of notes-it
being unquestionably true that in any
of our agricultural communities in this
country the average farmer has in his
possession during the six weeks follow
ing the sale of his crop a much larger
amount of currency than during the
rest of the year. The result in the ag-
gregate is an extraordinary demand,
such as that which leads in Canada to
an annual expansion of 20 per cent. in
the bank circulation"
Undoubtedly the needs for currency
in the United States change about as
much as in Canada, but the cost of buy
ing bonds at a high premium on which
notes can be issued only to 90 per cent.
of their par value, the red tape neces-
sary to obtain these notes from the gov
eminent and the tax on circulation
make delay and cost in increasing the
circulation which practically prohibit
an increase until the need for such in
crease is past. Therefore interest rates
in this country run up rapidly in Au-
gust and September without appreci-
ably affecting the supply of currency.
In Scotland and Canada the machin-
cry necessary to increase the supply of
currency Is simple and is entirely in the
hands of the banks; hence the cost and
delay necessary are much less than with
US. Thus in Canada a few big banks
with numerous branch banks" supply
all parts of the country with currency.
When more money is needed in any
province - as in Manitoba when the
wheat crop is being harvested-rateso of
interest begin to rise. The profits Of sup
plying currency in this province are in
creased, and Immediately additional
supplies of currency are sent from the
big banks in Montreal, Quebec or To-
ronto to their branch banks in Mani
toba. Thus the cost of moving the crops
is much lower in Canada than in the
United States, where rates of interest
go up and down without materially
changing the supply of currency. Of
course the farmers, through increased
competition of bidders, who obtain
plenty of money at low rates of interest
and can afford to pay high prices, reap
most of the benefit.
There are other advantages con-
nected with "branch banks" which it is
unnecessary to explain here. 1t is suffi
cient to say that in Canada there is no
silver question to disturb business and
occupy the time of politicians and leg
islators. 1t is not likely that we will
have financial peace until we greatly
improve our banking and currency sys-
tens.