The evening times. [volume] (Grand Forks, N.D.) 1906-1914, 1910-12-22

sssssseSs 80 ESQ VAs Ss4V
depositors?
Mr.. lCoulson-That all. helps, and
We have large paid-up capital and
paad-up reserve, and upon that the
government returns are issued from
month to month and the people can
use them.
Bank Note Circulation. @
Tho Canadian system Of bank-not~
circulation works very satisfactorily,
according to opinions expressed be-
fore the committee. The issue Of notes
10 permitted with the sole restriction
that they shall not exceed the banks
paid-up capital, and that five per cent
of the outstanding circulation shall
be deposited In common redemption
Fund. Consequently the circulation
total issues Of the Canadian chartered
hanks rose from an average circula-
tion OF $685., ,255 in July to 83,036, ,763
IN October. to fall again to 1905, ,234
in December. The following story,
told by Henry Mcleod, general man.
ager Of the bank Of Nova Scotia,
shows the way In which the volume
of Canadian banknote currency ad-
justs itself to varying conditions:
In sitting here discussing this sub
ject, 1t has brought back to me one,
OF my earlier experiences In banking,
It was in an isolated community
where the operations were buying
and shipping of grain. This bank had
q capital Of 100000. Under the pro-
evincial Law It had the right to issue
three dollars to one dallar Of its: cap,
ital 1ps,circgIatton, ], i on one Saturday
evening al our circ1lH& t. was s out out
standing. Over Sunday tho winter
set In. the harbprss froze UP, the. ves-
sells had to put to sea, loaded or par
TALLY loaded. By the middle Of the
week our circulation was much re-
duced; we had received exchange for
the carsoes, and within month the
circulation was down to normal. The
notes had gone out, had paid the
farmers for the grain, they had been
paid by the farmers to the shopkeep-
er, and by the shopkeeper deposited
In the bank. The shopkeepers. had
bought out bills on London, thereby
paying their debts abroad, and the
whole operation was completed. When
an elastic currency is spoken of, I
often thing Of that example Of elas-
ITCHY"
h Canadian banking law makes no re-
quirement as to the amount OF the
reserve to be held beyond the stipula-
ton that forty per cent Of 1t shall be
in Dominion notes. A number Of the
bankers interviewed expressed the
opinion that the establishment Of any
fixed reserve such a. We have would
produce more harm than good, this
being matter which they hold
should be left to the banks. That the
national banking association, to which
the chartered banks practiclly all be-
long, does. however, endeavor to es-
tablish q minimum reserve came out In
the course Of an interview with Sir
Edward Clouston, general manager
Of the Bank Of Montreal, Canada's
most influential banking institution.
Question.-There is nothing In the
Dominion law. as understand it, re-
lating to reserves7
Answer.-Nothing.
Qucstion.-That is entirely
Answer.--Subject to the judgement
Of each general manager.
Question.-Under the law, also, does
the Banking association endeavor to
keep q minimum amount Of cash re-
serves among the banks7
Answer.-Yes; {; there is an arrange
ment among ourselves that; . bank
Will keep minimum OF eight per cent
In actual cash aud seven per cent in
readily available securities, making
fifteen per cent In all; but there ia
no law about It n
Question DO you consider that suf-
dcient, taking everything into con-
sideratlon7 e.
Answer.-Yes. s
Another interesting feature Of Can
.adian banking TO which the committee
directed its Inquiries WAS the system
Of branch banks. II The actual workins
OF the system u described In great
detail In the interviews. Canadian
towns. with . population not exceed
ing 1000. often have not only ono but
two or three branch banks. Inquiry
- to the amount Of deposits which
would justify the opening Of . branch
bank brought out the following con-
versation between Mr.. Veerland and
Sir Edward Clouston: n
Question.-N1hat amount OF deposits
would you consider q; jushtying the
opening OF 20 branch, Sir Edwardf 3
Answer.-That depends. In . coun-
try like the west whore It 10 growing
all tho time, We would have to take
= chance Of not doing any business foi
q year. si5S3 \. .5e33
Question Prospects would also en-
tier into It largelyf
\ tIoatlnusa MI q y. 4 pass 3, !.