740 REPORT— 1897. 



FRIDAY, AUGUST 20. 



The following Papers were read: — 



1. Some Fallacies in the Theory of the Distribution of Wealth. 

 By Professor A. T. Hadley. 



2. Canada and the Silver Question. By John DAVinsoN, D.Phil. 



The similarity of conditions existing in the United States and Canada renders 

 it remarkable that while the United States was being convulsed by the movement 

 for free silver, Canada was peacefully conducting an election on a mixed tariff and 

 educational issue. The reason is not to be found in any lack of interest in Canada, 

 but in forces partly political and agricultural, but mainly financial. 



Canada has been developed later than the Western States, and in consequence 

 neither has the burden of mortgages been so heavy nor has the fall of prices 

 affected the farmer so seriou.'sly. The development of the West has taken place 

 in Canada largely since 1880, and Canadian competition has contributed to the 

 fall in prices. 



The political causes of Canada's immunity are partly derived from the constitu- 

 tion which allows the Federal Government a larger field for its activity, because 

 provincial issues can be transferred to the Federal arena ; and are partly due to 

 the long period during which one party has held the reins of ofEce. The result of 

 this latter force has been that a not vitally important issue has been kept before 

 the public mind as the universal panacea. As a remedy for depression the 

 Government party has demanded more protection, while the opposition has de- 

 manded freer trade. 



These, however, are simply contributory causes. The real reason lies in almost 

 perfect adaptation of the banking system of Canada to the needs of a new country, 

 and in the consequent absence of any soft money tradition. The greatest banking 

 necessity in a new country is elasticity in the issues ; the greatest danger is that 

 security will be sacrificed to elasticity. The supervision of bankmg legislation in 

 the colonies by the Imperial authorities, who were devoted adherents of the 

 principles of the Bank Charter Act, prevented the sacrifice of security when the 

 character of the system was being formed, and created a tradition of sound banking 

 which has permitted financial questions to be regarded as problems for experts 

 and not for decision at the polls. Although now the Imperial authorities do and 

 could exercise no supervision, there is an efficient substitute for that supervision 

 in the wide-spread respect for English precedent and example. 



The banking system has been a gradual growth, and has by successive amend- 

 ments been moulded to suit the needs of the community. With almost perfect 

 security there is still such an elasticity in the issues that the volume of the 

 circulation fluctuates in perfect harmony with the fluctuations in the volume of 

 business, not only over long periods but from month to month. The practice of 

 branch banking, which is the most striking characteristic of the system, greatly 

 facilitates this automatic correspondence, besides favouring the development of the 

 newer parts of the country by furnishing them with banking facilities as good as 

 can be obtained in the cities, and equalising the rate of discount throughout the 

 country, and thus providing farmers with capital at practically the same rate as it 

 can be obtained even in the commercial centres, provided they have equally good 

 -security to ofTer. 



3. The Origin of the Dollar. By Professor W. G. Sumner. 



4. Silver and Co'p'per in China. By Dr. J. Edkins. 



