The Minneapolis journal., 1902-07-05
NORTHWESTERN BUSINESS GOSSIP
Canadian System of Branch Banks Not Growing Favor
ite With Northwestern Financiers- R. Flynn Of
Chicago Made Bulbs Eye in His Crookston Address
=- Who Will Get the Des Mones & Fort Dodge2 r.

S. R. Flynn Of Chicago put something
strong in the pipes OF the Minnesota
bankers when he told them why the
Canadian system Of banking with it's
big chartered banks and branches might
not be the thing for the United States
and especially not for the northwest.
AS the smoking proceeds it becomes ap-
parent that the ideas of Mr.. Flynn are
to be. of much consequence in: the shap-
ing Of financial opinion in the north
west on the needed changes in Ameri-
cas- banking system. This has been re-
inforced by opinions on the Canadian sys-
tenn from the Canadians themselves
handed out frankly during the recent So
journ of the financiers in the land across
the line. Since the discussion on banking
reform became SO general, the Canadian
system has been held up by many au-
| thorities as a model or at least vast
| Improvement over the American plan.
This theory has made good progress
| among northwestern bankers. and other
reasons why the Canadian system would
not do for the United States, why it
would be specially undesirable for a
growing country like the west, and
pointed out why America had to model a
system of her own and how it was
gradually being done. Since then Min
nesota bankers, inclined to accept the
Western on the necessity for great
central bank and the superiority of the
Canadian system, have hesitated in Civ
ing their Endorsement. Others have been
| won over by the theory advanced by Mr..
| Flynn.
While the Minnesota bankers were in
Winnipeg they heard from one of the
while the Canadian system of branch
banks is good thing for eastern Canada,
| it is very doubtful. If 1t is beneficial to-
western Canada. winnipeg is the finan-
cial center of western Canada. It's banks
are branches of big systems controlled en-
tirely in the east. TheTpolicy of its banks
| is in the hands of people living in the
east, where nearly all. Of the stock is
owned. - -; -. ~. - 49,
| This is the feature of the Canadian sys-
tenn that the average western business
man on this side of the fine would be: dis
Eposed to condemn. To the business men
Of every center of Importance in the north
| west there is nothing: in which he takes
more pride than. the fact that his COM
munity is gradually growing stronger on
it's financial legs, and less dependent on
crutches in the shape of loans furnished
| by the east. The average business man of
St. Paul and Minneapolis would not care
! to subscribe to system that would make
the policy of developing this country much
| dependent upon eastern ideas and consent.
| That appears to have been the result in
western Canada and that is why the Cana
| dian system will probably not advance
much as a model banking system with the
average northwestern business man, =
= Every new and growing country needs
money, and the supply generally must
come from the local banks. There is no
question but that in many sections of the
twest and in some parts of the northwest,
| y>Ir = SrvE ,,o4 ~f t,&~ -
ing charged now by the local banks. There
are. -fnaan In western North Dakota
where money is being loaned at rate
equal to from Is to 20 per cent. Critics
of the American system of banking have
seized upon this as+ convincing argument
that the Canadian system, with It's loans
| to farmers in western Canada at 8 and 10
per cent Is immeasurably superior. = 4
This comparison Is faulty s It is much
like others which have been made ,in4the
! interest rates of the: two countries since
| the Fowler currency and banking biz
| first came up for discussion. United
States consuls in Canada were asked tc
furnish the current interest rates at var
1 ious points in the Dominion. None were
1 higher than 8 per cent. In the compari.
son made with ratesaof interest on this
side Of the line it was pointed out that
| in the west as highs as 16 per cent was
charged. Without Saying whether the
Fowler bill is what this country wants
i or not, it is a. fair contention that II
the interest rates of the populous east
ern districts sof this country were com.
i pared with the same kind Of districts
4 in Canada, there would be no great .argu.
4 ment in it for the friends Of the Cana.
i dian system
i A well known Canadian who has done
ag much sas any Of his countrymen toward
A the elopment of western Canada main.
4 tains that the Canadian system wher
Il cofatrasted with that of the United STATES