The Roswell daily record. [volume] (Roswell, N.M.) 1903-current, 1910-01-29
BANKING
REPORT
CONTINUED from First Page.)

notes, payable to bearer on demand
and intended for circulation as money
out the total AMOUNT of notes-of any
bank in circulation could not, prior to
the amendment of 1908, exceed the un-
impaired paid-up capital of the bank.
BY the amendment of 1905, waica
grew out of the emergency issues of
Dominion tor -governnent) notes dur
ing the American panic of 1907, a bask
N addition 10 its regular circulation,
may, during the usual season of NOV
ing the crops-that is, from the 1st
day of October in each year to the
a1st day of January next ensuing
issue its notes to an mount not ex-
ceeding Is per cen of its combined
paid-up capital and reserve. These ad-
ditional notes are subject TO a special
tax not exceeding 5 per Gent per an
nun, fixed by the governor in council.
The payment of the notes in ase
of failure of the issuing bank is Sc
cured in several ways. The notes are
a first lien upon the assets of the
bank: each stakeholder is liable for
any deficiency in the assets to an a.
mount equal to the par value of the
shares held by him, in addition to any
amount not paid up thereon, n there
is a "bank circulation redemption
fund.- in charge of the Government,
which is contributed by the banks.
Each bank is required to keep to its
credit in his fund ) per cent in cash
upon the average amoun of its notes
IN circulation from year to year. In
cases OF suspension of payment, the
notes of a bank draw interest al the
rate of ; per cent per annum from the
day OF suspension until the date mani
cd by notice when they will be re
deened When the circulation fund is
depleted from any cause, a call is
made upon the banks to replenish it
ut a rate not exceeding / per cent per
annun O. the banks circulation.
In addition to these provisions for
maintaining the soundness of the
notes, there are several requirements
of law for the purpose of ~insuring
their current redemption at par in all
parts of the Dominion. The notes
must be redeemed at the parent or
head office of tae banks and at agen-
cies at commercial centers in each
| Province which are fixed by law and
ut such other places as the treasury
4 t2il vi. Nv may
The Canadian system differs from
hat of the United States in the alb
| sence of any requirement for the
maintenance of a fixed reserve a
sainst liabilities of the banks, either
notes or deposits. and in the absence
| If am system of governmental Ia
pection Of the banks. The policy has
gradually crow up, however, of con
| siderine a reserve of Is per cent de-
| sirable against demand liabilities and
banks falling below this are likely to
be admonished by the bankers asSo-
citation.
The chartered banks are members
of the Canadian Bankers Association,
founded in 1892, but which was given
the status of a public corporation un-
der the amendment of 1900, and was
authorized to establish clearing houses
tor banks in any place in the Domin-
ion and to make rules for their gov
eminent, subject, however. To the APP
prevail of the treasurery board. To 1t
was also given supervisory control OF
the note issues of the bank in order
to promote uniformity and to prevent
| fraudulent overissues and the power
to take charge of the affairs of a fail
ed bank through a curator. BY these
and other powers it exercises a large
measure of influence over the poll
cies and practices of the banks in gen
eraI.
A subcommittee of the National
Monetary Commission personally Wis
ted Canada early last fall and had in
terviews with leading bankers in To
ronto and Montreal, the substance OF
which will later be published by tae
commission, and, in addition, DIR. JOS
| oph French Johnson, of New York
University, was sent to Canada to
prepare a technical report upon he
methods and practices of the Canad-
ian banks, which also will be pub
iished shortly.