Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1910-01-31
Issued Under Auspices Of
The Monetary Commission.
Work Is Entitled "A History Of
Banking in Canada"
Written by RoeIiff N. Brock.
enridge...0ne Of a Series.

Washington, Jan. 30.-The first OF
the iinportant series Of financial mono
grains resulting from the exhaustive
INVESTIGATIONS pursued in this country
and. abroad under the auspices OF the
National Monetary COMMISSIONER
History of I3dnking in Canada" by
Rocliff VI. breckenridge whose work on
that siubiccI, published some 20 years
ago. has long been recognized as au-
thoritalive. Was issued To-Day. This
monograph. gain" Importance from the
fact that the Canadian banking system
with its highly developed organization
of branch banking, its large freedom
of note issue and its circulation-re-
demntion fund has for many years at
tracted attention III this country. Some
students of our banking problems have
advocated the adoption of similar ar
rarrements III the United States, &nd
the National Monetary Commission
has consequently made a cCmprehen-
sive investigation OF the history and
actual operations Of banking in Cana
da.
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 show
ing the growth and present condition
of the Canadian banks.
The banking system of Canada, like
that of other countries, has been the
result of a process of evolution and eX-
periment in the effort to establish
system that would meet local condi-
tions and requirements. Mr.. Brecken-
ridge traces this development from the
earliest efforts to introduce the prac-
tice 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 various
Provinces, and exclusive legislative au-
thority over all matters pertaining to
banking, currency, coinage, and cog
nate subjects was, by the act creating
the Dominion, conferred upon the Par
lament of Canada. The separate Pro-
vinces have no jurisdiction over these
subjects. and there is, therefore, only
one Legislative body in the Dominion
author lied to deal with banking queS-
tons, ard there is only one type of
commercial bank. The problems of
banking there are not complicated as
they are with us, where alongside OF
1000 banks organized under national
laws there are some $4,000 other insti-
buttons organized under the varying
laws of the 4e States of the Union.
After the enactment of certain pre-
liminary legislation the Dominion Par
lament passed the bank act of 1871,
which. with subsequent revisions. now
constitutes the fundamental law of all
banks doing business in Canada. In
few cases special provisions We're made
for banks doing business under royal
charters and for few others where
particular conditions made the gener-
al act inapplicable.
Mr.. Breckenridge shows that the Ca
madam system is in many respects
similar to the Scotch banking system;
it is primarily and fundamentally
branch banking system. There are to-
day. it appears. only % banks in Cana
da. and 10 of that number have their
head offices in Toronto and Montreal,
their branches, numbering more than
2OOO being distributed from the Allan
tic to the Pacific, into the Yukon coun-
trv. and even into foreign countries.
OF the parent banks, however, there
are not more than three with head Of
fees west of Ontario.
The authorized capital of any bank
organized since 1890 is required to be
at least 100000. of which at least $780,
900 must be paid in cash before the
bank is authorized to commence BUSH
ness. Each bank may issue it's notes,
payable to bearer on demand and in
tended for circulation as money, but
the total amount of notes of any bank
in circulation could not. prior to the
amendment of 1908, exceed the unim-
paired paid-up capital of the bank. BY
the amendment of 1908, which grew out
of the emergency issues of Dominion
Tor government notes during the AM
erican ranic of 1907 q 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 21st day of January
next ensuing-isSue its notes to an
amount not exceeding Is per cent. Of
its combined paid-up capital and re-
serve. These additional notes are sub
iect to special tax at a rate not eX-
ceeding per cent. per annum, fixed by
the governor IN council.
The payment of the notes in case of
failure of the issuing pank Is secured
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 amount equal to the
par value cf the shares held by him, in
addition to any amount not paid up
thereon and there is a bank circula-
ton redemption fund.-" in charge of the
Government, which is contributed by
the banks Each bank is required to
keep to it's credit in this fund per
cent. in cash upon the average amount
Of its notes in circulation from year to
year. In case of suspension of pay
ment the notes of a bank draw inter-
est at the rate of per cent. per annum
from the day of suspension until the
date named by notice when they will
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