Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1897-12-19
cAxADrAN BANKING SYSTEM.

| Tn tha December No. or the BUM
.r.. uooaz,ne Mr.. George Wilson dis
cusses at length "The Future OK Cahau'ah
Ranking" Incidental to the main ques-
tim treated there are In the article SUMS
| facts and suggestions bearing on the Gun
narrative merits of the Canadian pahAi"s
system and the existing United states
national banking system, which, "e
think. may prove pertinent to our pre-
sent currency reform agitation.
| Mr. wilson. in giving an account OF the
establishing OF the Canadian pahK-no'e
system. calls attention to the proJe''
brought down by the Hon. John Rose as
Minister of Finance in the first Federai
Parliament TO deprive the banks OF their
right 10 issue notes and to substitute
Therefor an exclusive government ISSUE
and then comments as follows:
"rhe debate was long and spirited put
eventually the formidable array OF arsu-
ment adduced by the banks anu the
press produced its effects upon ana
! ment, and the measure was reJo0'u
There can be no doubt that the oele"' u
| this project, seriously proposed py the
government of the day. was the hieahS
Of saving the country in after years from
600 ~ things analogous to that with
which the United States has been Tor SO
ioro chronically afflicted-viz., national
currency. inhexible and utterly mace
quate."
Referring 10 the matter OF safeguard
ing the notes and legislation 10 pre-
vent loss to holders of notes of suspend
ed banks, Mr.. Wilson says
",The defect was ameliorated by the
formation of the bank circulation re-
demption fund, which guaranteed 'he
| payment of all notes Of faled paiA
| within sixty days OF its suspension, To-
gether with interest at per cent rom
date of failure to date OF redemption
The fund is in the custody OF tne gov
eminent, and is composed or contrIpu,
lions from each bank OF an amount equai
to per cent. of its average yearly cii
culation, adjusted on July ISL Oh ed0,'
vear and bearing 3 per cent. interest
ond &c drawn against only in the event
of n failed banks assets proving lnsuli-
cient 10 meet its circulation. II the
amount so drawn exceeds the contrlDu-
tion To the fund. held on account or the
failed hank, the deficiency Is supphed py
| the other banks in proportion 10 INC
amount held on their respective accounts ls
Bank issues prior to the revision OIL lo'u
were subject to discount when crcuia'eu
IN quarters remote from their place oi
issue A provision in the new ACT re-
ouires each bank to establish an agency
Cor the redemption of its notes at the
commercial centres of each province. by
the above enactments the note lssueS
were placed upon an indisputabiy SOUND
| q M
basis, and, moreover. acquired CUM
plete national character
In touching upon the comparative Vaiue
Of the two systems-the Canadian ana
the United States national banking sys-
tems-to perform the legitimate functions
, of banking during, and Withstand the
s,roir of seasons of panic and trade de-
| preston, Mr.. Wilson makes these opSer-
vations:
"Vithout dealing with each successive
depression through which the country mas
passed since confederation, it is only ne
cessary to instance that OF 1888 as inc
best exemplification Of the qualities Oh
our banking system under trying clrculn-
: stances. During that and the TWO lol-
lowing years countless enterprises VI
every description in all parts OF the "oilu
| succumbed to the strain. NO halloh eh-
loved entire immunity from the sweep
of the great tidal wave OF depressloh'
hut a review of the effect upon Canada
&c ooronared with many other countries,
r more especially the great republic TO our
. south cannot but prove subject 1or
decentralization, and a tribute TO the
soljdity OF our conservative monetary
system. The conditions Of things were
S very similar in both countries, but Canaua
being possessed of one OF the most au'
mirable banking systems In the Worlu
, embracing a staunch and sound currency
unexcelled in its elasticity, survived the
storm in a way which ELECTED world
wide comment.
, "Tbe same degree OF success cannot DC
v said to have attended our neighbors VIM
were SO Handicapped by detective IN
flexible. and inadequate currency Du'
: ring the panic period of 1SS-4 deposits
l in the United States decreased ~ PEI
: cent. while in Canada the decrease wa
o onlv ner cent, During the same period
a hank loans in the United States de
/. creased about u per cent, and in Canada
= the decrease was slightly over per cent
5 CAN money in New York on June %, 1873
C was "a per cent, and on July !, 1888, !
y reached the extraordinary rate OF 14o Pc
n cent : In Canada the rate remained prac
c tically undisturbed The few facts quote'
- will serve 10 show the advantages of al
&c elastic currency during periods Oh dis
II tress."
e Mr.. Wilson has full faith In the tbilit!
l. of the Canadian banking system to nee
d the requirements OF Canada's business 10
70 years to come, and presents many fact
lie and figures in addition TO the above
% which throw light upon the constitution
D. and working OF the system. We have
IT however, quoted enough from his article
II we think, to sustain the contention ina
D. those engaged in formulating schemes o
IL currency and banking reform might no
er go amiss in studying the Canadian sys
/ tenn carefully.
Is THE NEW GERMAN HANsA.
p Some of our contemporaries are havin
s. considerable fun over the speeches {