Reporter and farmer. [volume] (Webster, Day County, Dakota [S.D.]) 188?-1946, 1897-10-07
thus explains the changes in Cam

rSoor mus explains the changes in Can
ada and Scotland:
"For instance, ON comparing tie cir
.culation of Canada and Scotland, the
first thing noticed is that in Scotland
there are two upward movements, n
eliminating in May and the other in
November, while in Canada the former
movement is entirely absent and the
other occurs me month earlier than in
Scotland. IKE explanation will without
doubt be found in the Scotch practice Of
making payments on mortgages, inter
est, annuities, etc, at those dates--a
practice not followed SO extensively In
Canada.
I'm 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 a class, are not accus-
toned to make use of bank deposits, and
consequently when payments are made
" ~ AN o4OP0t ldA SGAy az q Ball
gle season of the year, the surplus over
immediate payments is required by them
in the form of notes--it being unques-
tionably true that in any of our agricul-
tural communities in this country the
average farmer has in his possession
during the six weeks following the sale
of his crop q much larger amount of
currency than during the rest of the
year. The result in the aggregate is an
extraordinary demand, such as that
which leads in Canada to an annual ex.
pansion of 90 per cent in the bank cir
culation."
Undoubtedly the needs for currency
in the United States change about as
much as III 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 10 obtain these notes from the gov
eminent and the tax on circulation
make a 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 An
gust and September without appreciably
affecting the supply of currency.
In Scotland and Canada the machinery
necessary to increase the supply Of cur
rency 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-rates Of
interest begin to rise. The profits Of sup
plying currency in this province are in
creased, and Immediately additional sup
plies OF currency are sent from the big
banks in Montreal, Quebec OF Toronto
10 their branch banks in Manitoba. Thus
the cost of moving the crops is much
lower in Canada than in the United
States, where rates Of interest 60 up and
down without materially changing the
supply Of currency. OF course the farm
ers, 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 connected
with branch banks which it is u
necessary to explain here. 1t is sufficient
to say that in Canada there IS no silver
question to disturb business and occupy
the time of politicians and Legislators.
1t is not likely that we will have finan-
cial peace until we greatly improve our
banking and currency systems