THE MONETARY PROBLEM. 211 



ter of Finance. Notes are a first charge against all the assets of 

 the issuing bank, and there is a penalty for excessive issue. The 

 shareholders are liable for double the amount of their stock. There 

 must be monthly returns to the Minister of Finance, and there is a 

 rigid system of inspection. To insure the stability of the entire 

 bank-note issue, each bank is required to keep on deposit with the 

 Minister of Finance a sum equal to five per cent of its circulation, 

 as a contribution to the Bank Circulation Redemption Fund, held 

 by the Government to make good the notes of suspended banks. 

 A most noteworthy and beneficent feature of the system is the 

 practice of branch banking, the thirty-eight Canadian banks hav- 

 ing four hundred and sixty offices. By their means the banking 

 facilities of circulation, deposit, and discount are given not only 

 to communities of considerable population, as in the United States, 

 but even to hamlets remote from commercial centers. The com- 

 petition of the different banks throughout their various branches, 

 each striving for as large a proportion of the note circulation as 

 possible, together with the governmental restrictions upon over- 

 issue, insure to the millions of people inhabiting the Dominion a 

 supply of currency, that at all times sufficient for their needs, ex- 

 pands and contracts as the demand for it rises and falls. The 

 principle of branch banking places the available funds of the 

 entire Dominion at the disposal of the communities needing them 

 at the times of need, whereas in the United States, because of the 

 narrow sphere of operation of each bank, there is frequently an 

 overabundance of currency at one point, while the healthy ex- 

 change of effort is retarded at other points because of a deficiency. 

 The "Baltimore plan" proposed in 1894 by the American 

 Bankers' Association, and the bill introduced by the present na- 

 tional administration in Congress in December, 1894, were in their 

 essential characteristics substantially similar to the Canadian 

 banking law, and it was the opinion then expressed of most 

 competent financiers, that the adoption of such an act would have 

 relieved the country of the most crying evils of the present sys- 

 tem, and have provided the foundation for a most wholesome cur- 

 rency hereafter. It is noteworthy that the provisions of the Cana- 

 dian act were largely the outcome of the recommendation of the 

 leading bankers of Canada called in conference by the Canadian 

 Government, while financial authorities, among the highest in the 

 United States, found members of both Houses of Congress deaf 

 to their recommendations during the discussion of the adminis- 

 tration measure, which was finally defeated by the votes of dema- 

 gogues subserving selfish interests. It, however, goes without 

 saying, that the province of true statesmanship is often not to per- 

 sist in seeking the immediate attainment of an ideal when it is 

 unquestionable that opposition makes that immediate attainment 



