Evening star. [volume] (Washington, D.C.) 1854-1972, 1910-01-28

subsequent revisions now constitutes the
fundamental law of all banks doing bust
ness in Canada. In few cases special
provisions were made for banks doing
business under royal charters and for
few others where particular conditions
made the general act inapplicable.
Similar to Scotch Plan.
Mr.. Breckenridge shows that the Cana
dian system is in many respects similar
to the Scotch banking system; it Is pri-
marily and fundamentally branch bank
ing system. There are today, 1T appears,
only twenty-nine banks in Canada, ana
nineteen of that number have their head
offices in Toronto and Montreal, their
branches, numbering more than 2.Uto.
being distributed from the Atlantic to the
Pacific. into the Yukon country. and even
into foreign countries. O the parent
banks, however, there are not more than
three with head offices west of Ontario.
The authorized capital Of any bank or
ganized since 1890 is required to be at
least 100000, of which at least $2jO,OOO
must be paid in cash before the bank is
authorized to commence business. Each
bank may issue its notes. payable to
bearer on demand and intended for cir
culation as money. but the total amount
of notes of any bank in circulation could
not. prior to the amendment of 1905. eX-
coed the unimpaired paid-up capital of
the bank. By the amendment of 1905.
which grew out of the emergency issues
of Dominion Tor government notes dur
ing the American panic of 1907, a bank,
In addition to it's regular circulation.
may, during the usual season of moving
the crops-that is, from the LIST day of
October in each year to the 31st day Of
January next ensuing-issue its notes to
an amount not exceeding ID per cent of
its combined paid-up capital and reserve.
These additional notes are subject to a
special tax at rate not exceeding > per
cent per annuIn. fixed by the governor
in council.
Payment of Notes Secured.
The payment of the notes i'm case of
failure of the issuing bank is secured in
several ways The notes are first lien
upon the assets of the bank; each stock
holder is liable for any deficiency in the
assets to an amount equal to the par
value OF the shares held by him, in adj
dition TO any amount not paid -up there
on, and there is ''bsnk circulation
demption fund" in charge of the gov
eminent, which is contributed by the
banks
Each bank is required to keep to its
credit in this fund 5 per cent in cash
upon the average amount of its notes in
circulation from year to year. In case
Of suspension of payment the notes of a
bank draw interest at the rate of , per
cent per annum from the day of sus-
pension until the date named by notice
when they will be redeemed. When the
circulation fund is depleted from any
cause a call is made upon the banks to
repenish it at a rate not exceeding l per
cent per annum Of the banks circulation
In addition to these provisions for MAIN
tanning the soundnesS of the notes, there
are several requirements Of law for the
purpose of insuring their current redemp-
ton at par I'm all parts of the Dominion.
The notes must be redeemed at the parent
or head office of the banks, and at agen-
cies at commercial centers in each prov
ince. which are fixed by law, and at such
other places as the Treasury board of
the Dominion may designate.
No Fixed Reserve.
The Canadian system differs from that