336 POPULAR SCIENCE MONTHLY. 



tern under which such manipulation is possible is fundamentally 

 wrong. 



Under the Canadian banking system, with its large banks, 

 each having enormous capital and branches throughout the Do- 

 minion, it is practicable to enforce the rule of " one concern, one 

 bank " ; each customer must render a confidential statement to his 

 bank from time to time of the exact condition of his affairs, of 

 his assets and liabilities, and it is to the interest of his bank to 

 accord him the fullest accommodation that his business will jus- 

 tify. Its enormous resources enable it to thus accommodate 

 all its customers. It is evident that under such a system such 

 juggling as that instanced in the foregoing illustration could not 

 have been carried on. Many of the banks of the United States 

 have blank forms which they submit to offerers of paper for dis- 

 count, the filling up of which completely discloses the condition 

 of their affairs, the extent of their assets and liabilities in every 

 shape and form. Had such statements been required of the coal 

 company and the railroad company by each of the banks before 

 discounting their notes, the possibility of ruin entailed by their 

 reckless procedure would certainly have been averted ; but men, 

 shrewd, plausible, and unscrupulous, have a way of quieting the 

 fears of banks and evading inquiries that are searching. 



Under the Canadian system the few banks, each with large 

 ca^jital and many branches, find it to their interest to employ as 

 managers men of character, foresight, and ability, and they are 

 not allowed to participate in any way in the borrowing of money 

 from their banks. In the United States each city has its numer- 

 ous banks, no one of them firmly connected in management with 

 any other bank. The officials often are men of minds not of the 

 broadest and judgment not of the most accurate, who have at- 

 tained their positions, perhaps, through influence of one kind 

 or another, and sometimes they are in direct partnership with 

 the men who have offered paper to the bank for discount, 

 the recommendation of action upon which comes within their 

 province. 



Under the Canadian system there are restrictions upon the 

 amounts which directors of a bank can borrow, and their heavy 

 liability for losses incurred by their bank leads them to exercise 

 much caution in accepting paper. In the United States many 

 bank directors seek their positions almost exclusively because of 

 the facilities they thereby obtain for borrowing, and by their 

 accommodating each other the legitimate business of the bank 

 and the community is prone to suffer. 



Under the Canadian system there is an examiner for each 

 large bank, who inspects its operations from time to time to ascer- 

 tain not only that its status is sound from a bookkeeping and 



