The Richmond Virginian. (Richmond, Va.) 1910-1920, 1913-02-12
BANK CLERKS NEAR
|. INTERESTING TALKS
DIR. KENT TELLS of METHODS OF
BANKING IN NEIGHBoR TO
THE NORTH
CURRENCY ELASTIC
CHIEF FEATURE of THE CANADIAN
sYsTEM-soUTHwARD ON PAR
Gel POsT AND BRYAN.
OTHER SPEAKERS.

The annual meeting Of the Rich
mona chapter of the American 1nsti
eute OF Banking was held in the Elem
lsh room of the Jefferson hotel las
night being attended by about sew
enty-fiye members of the institute aut
friends who listened approximately I,
addresses on THE Canadian Bankfnt
system. by DR.. Charles W. Kent, o
the University of Virginia :%on 9TH,
Parcel Post" by i. Ross Southwark
table Instruments" by George Bryan
attorney for the State Bankers asso
citation
AR. southwark spoke first sketch
ing briefly the regulations governinf
the shipment or packages by parce
post, the rates and what can and what
cannot be shipped and explaining tht
zone system. Mr.. Southwark explain.
ed a number of points about the BABY
express" which the auditors had not
known and clearly pointed ont some
OF the errors into which the public
has fallen. Chief among these lat
ter is the practice many patrons still
have of placing ordinary stamps on
parcel post packages.
Predicts Changes.
Mr.. Southwark predicted that with
in twelve months time or q little
longer time most of the present regu-
lations would be obsolete as changes
IN the direction of improvements are
being made by the postotfice depart
ment rapidly and congress is likely to
make further changes in the law.
That the English and Canadian sys-
tenn of banking are superior, to those
of the United States in many particu-
lars was the sentiment of DR. Kent,
Nxfl \ ~ tN-xal oh f.Afyx d
l2ed feature of the banking systems
of these two countries, especially of
Canada.
The elasticity of the currency in
England he declared. 'is due entire
ly to the huge sum of its deposits,
which in 1910 was something over
two and a half billion dollars"
Passing to the Canadian system
DR.. Kent said in part:
I'm Canada there are first mortgage
and loan companies that lend money
both for the purchase of farms and
also urban and suburban developments .
second. portal savings banks with the
tsird provinces OF such institutions
patronized mainly by those who are
afraid of other types of banks: fourth.
trust companies with but one legal
province, namely, to act as trustee or
administrators: and, fifth, two or three
private banks doing mainly a mortgage
and loan business. Chief interest then
centers in the Canadian chartered
banks.
The Distinguishing Features.
This Canadian system he pointed
out. is marked. first; hy co., opera tive
solidarity There are % banks of 2.2ho
branches. and there Is q constant tend
ency to a reduction OF the number of
banks with an increase IN the number
of branches. AS each bank is governed
by manager, these twenty mine
thority Of Banking ir re Of the s.'As wh ai
dominion. The fact that there Is
centralized responsibility In each bank
and that these banks are compelled
by the necessity of the system to CO.
operate, gives to this group Of bankers
an authority and in Importance hardly
shared by the heads of our American
THE second mark of the Canadian
around the Incorporation of new bank
No new bank can be established with
capital less than one-half million dol
lars, of which s250.ooo must be paid in
IN cash before the bank is opened, and
this .S25o,ooe must be deposited with
one month. The incorporators must
themselves be large bona fde stock
holders. and every step OF the incor-
poration is made known to the public
and subject to the closest scrutiny and
investigation. 1t is impossible, there
fore. for banks to be established with
GltNST very small cADIiat OF with ire
sponsible directors.
The Charter Privileges.
THE third mark is the liberality OF
charter provisions which permit mum
Der of privileges not enjoyed by our
United States banks"
Among these DIR. Kent noted bust
ness partnerships and the right to
secure loans for industrial enterprises
by lien on the raw material.
banking system" contended DR.. Kent.
rs Its currency elasticity. To start
with all the currency in Canada OF the
denomination of OF SIS or more is In
plication with issues of notes from the
government These bank notes are is
sued by the twenty nine chartered
banks. and each bank is permitted to
and as an emergency fund from Octo-
Der list to January 31st. Is per cent OF
the paid-up capital and surplus. OF
course, banks issue these notes as their
business demands require, and if they
wish. to issue more, they have the
privilege OF increasing their capital
stock These notes are not guaranteed
by any deposit with the government
such as are government bonds, nor are
the banks required to maintain a fixed
reserve sum, 1t is true that prudent
banking requires cash reserve but 1t
ls not settled by any legal exaction
the security of the notes
seems TO De SuUfclent guarantee, for
that Is a first Lien on the assets. Of tho
bank. Then. they are also sacnraa, by
the stockholders liability for a sum
equal to the amount of stock he has
for, aud they are also con-
Quoted by what is known as the gov
ernment redemption fund. This Is
fund equal to per cent of the total
bank note issue, which is deposited
with the government. AS a matter of
fact, while this redemption fund gives
an added safety to the note issue, it
has not been called upon since its
creation, for the bank notes have all
been paid off by the bank assets or
money raised from the stockholders
Urges Study by Members.
In conclusion, DIR. Kent remarked
that his real purpose in presenting
this statement to the Richmond chap
ter was not to give them information,
but to induce them to become stu
dents of financial subjects and to pre-
pare for commercial leadership when
they become older. and, secondly, to
call the attention of the public in gem
eral to the desira bility OF educated
men, whatever their profession or
calling, might be, taking an intelu-
gent interest in great public aues-
tons such as those that now imme-
diately confront our government