The Calumet news. [volume] (Calumet, Mich.) 1907-1938, 1910-01-28
REPORT MADE
ON BANKING
National Monetary Commission
Makes Public Facts on
Canadian System.
FIRST FINANCIAL MONOGRAPH
metbods in Vogue in the Dominion
Are Of Importance Here Because
Some Students Have Advooat-
cd Adoption BY U. S.


washington, Jan. 2S.-Today was
issned the first of the important series
NJ financial monographs resulting from
tho exhaustive Investigations pursued
IN this country and abroad under the
ouspices of the National Monetary
commission-"rheH History of Banking
in Canada" by Roeliff M. Brecken-
ridge whose work on that subject,
published some twenty years ago, has
long been recognized as authoritative.
This monograph gains Importance
from the fact that the Canadian bank
ing system, with its highly developed
organization OF branch banking. its
large freedom of note issue. and its
circulation redemption fund, has for
many years attracted attention i'm this
country. Some students of our bank
ing problems have advocated the adop-
ton Of similar arrangements in the
United States. and the National None
tary Commission has consequently
made a comprehensive investigation of
the history and actual operations of
banking in Canada.
In this monograph, issued by the
commission today, Mr.. Breckenridge
has brought the history of Canadian
banking down to the present time and
has discussed fully the changes and
developments which have taken place
since the date OF publication of his
original volume. The monograph is
replete with facts and statistics
showing the growth and present con-
diton of the Canadian banks.
The banking system of Canada, like
that Of other countries, has been the
result of a process of evolution and
experiment I'm the effort to establish
a system that would meet local con-
ditons and requirements. Mr.. Breck-
enrdge traces this development from
the earliest efforts to introduce the
practice of banking into the British
North American Provinces in the
eighteenth century to the most recent
banking legislation of 1908.
The Dominion of Canada was organ
lied In 1867 by the union of the vari-
Gus Provinces, and exclusive legislative
authority over all matters pertaining
to banking currency, coinage. and
cognate subjects was, by the act crea-
ting the Dominion. conferred upon the
Parliament of Canada. The separate
Provinces have no jurisdiction over
these subjects, and there is. therefore,
only one legislative body in the Do
minion authorized to deal with bank
ing questions. and there is only one
type Of commercial bank. The prob
lens Of banking there are not COM
plicated as they are with us. where
alongside of 1000 banks organized un-
der national laws there are some 49,
200 other institutions organized under
the varying laws OF the 46 states Of
the Union
After the enactment of certain pre-
hmlnary legislation the Dominion Par
lament passed the bank act of 1871.
which with subsequent rev. ms, now
constitutes the fundamental NV of all
banks doing business in CanaGa. In a
iew cases special provisions were made
Tor banks doing business under royal
charters and for a few others where
particular conditions made the general
act inappllcable.
Mr. breckenridge shows that the
canadian system is I'm many respects
similar to the Scotch banking system;
II Is primarily and fundamentally a
branch banking system. There are to-
uay, 1t appears, only 20 banks in Cam
aua' and 10 of that number have their
mead offices in Toronto and Montreal,
tnelr branches, numbering more than
1000 being distributed from the At
"htie to the Pacific, into the Yukon
country, and even into foreign coun-
ules. OF the parent banks. however.
u'ere are not more than three with
nead offices west OF Ontario.
The authorized capital OF any bank
organized since 1890 is required to be
at least 100000, Of which at least
SSoo'OOO must be paid in cash before
ue Dank Is authorized to commence
BUSINESS. Each bank may issue its
notes. payable to bearer on demand
ana intended for circulation as money
out the total amount of notes of any
oank in circulation could not. prior
10 the amendment of 1908, exceed the
uhlmpaired paid-up capital OF the
pahk. BY the amendment of 1908
which grew out OF the emergency is
sues OF Dominion Cor government
"o'es during the American panic OF
isO'' bank. in addition to it's regular
o"'ulation' may, during the usual sea
soh OF moving the crops-that Is, from
."e Isl day Of October in each ycar
- he Slst day OF January next en-
su"s-issue Its notes to an amount
o' exceeding ~ per cent OF Its com
~, y,'o paid-up capital and reserve
-"'se additional notes are subject Il
special tax at rate not exceedlns
per cent per annum. fixed bv tn,
governor In council.
me payment OF the notes In cas-,
VI failure OF the issuing bank is Sc.
oured In several ways. The notes ar.
nrst lien upon the assets of the bank