CENTRAL BANK

Hokitika Guardian, 14 November 1933, Page 4

CENTRAL BANK

PROPOSED SCH KM E FOR CANADA. ITS OPERATION OUTLINED. (Jmtad Press JUsociation— By Electric Telegraph—Copyright) OTTAWA, Nov. 13. The Royal Commission which has investigated Canada’s banking t and mreuev system has reported. Out of the five members, throe recommend a. Central Rank for Canada', and two are against it.

The majority recommending a Central Bank are Lord MacMillan, Sir Charles Addis, and Hon E. J. Brownlee. Those dissenting are Mr Beaudry Demand and Sir Thomas White.

The Commission unanimously suggested that there should be a Dominion provincial investigation so as to device some organisation for the extension of intermediate and short term agricultural credit.

The report accords high praise to the Canadian banning system. The Commission observes that the world would never return to conditions the' same as those- plre vailing. before the depression. The Central Bank, as proposed by the majority of the Commission, would have a capital of five miilion dollars which would be open for .subscription by all British subjects residents in Canada, with its dividend limited to five per cent, or six per cent, which would bo cumulative. It would have the sole right of note issue. The commercial banks note issue should be redeemed over g specified period of years. This bank would be the banks ?r pf the Dominion Government, and might by agreement, become the banker also of the provincial governments, The Central Bank, it is recommended, should take over the issue and management of the public debt of Canada, and possibly also of the debts of the provincial governments. Its principal operations would also include the buying anti selling of gold and silver, foreign exchange, and of Dominion and provincial securities, as also the securities of the United Kingdom and of British Dominions, the United States, and France; and the granting of advances on such securities.

The bank should be prohibited from making advances to the Dominion in excess of, saj r , 33 1-3 per cent of tho income it expected during any one year, or to the-provincial governments in excess of, say; 2o per cent. The repayment or the advances should in both cases be completed by the eild of the first quarter after the close of the fiscal year.