STATE NOTE ISSUE.

Manawatu Herald, Volume XXXIII, Issue 1046, 21 September 1911, Page 4

STATE NOTE ISSUE.

CANADIAN SYSTEM EXPLAINED.

As a good deal of interest is felt amongst financial and commercial circles in the proposal in the Budget to introduce a State note issue, a representative of the Auckland Star waited upon Mr W. A. Beddoe (Canadian Trade Commissioner) to ascertain something regarding the system adopted by the Dominion across the seas.

Mr Beddoe said: “Our Government has the monopoly to issue notes of certain size, that is, one and two dollar bills, and these are assumed to be protected by an equivalent in the shape of gold in the treasury. In Canada the banks also issue bills, and for that right have to deposit with the Government the equivalent in value, but the notes thus issued are of a different denomination to those of the Government. In Canada we have established a branch of the Royal Mint. i do not know whether you are aware that some thirty years ago they started a mint of their own in British Columbia, not being aware that there was no power for any colony to do so. Borne tweutydollar pieces were issued before the mint was shut, and these command a good figure now as curiosities. I may say that there has never been any complaint about the Government having the control of the note issue in Canada. The banks are permitted to issue notes in Canada of five dollars and multiples thereol nearly to the extent of the paid up capital. Practically the whole of the gold

is held in reserve as a guarantee to the notes, and every bank is pledged by law to have a redemption agent at the capital of the different provinces, and the notes are the first charge against the assets in the event of a bank getting into difficulties. Monthly statements are supplied by each bank to the Financial Minister, among details, and these are published in the Gazette. It is also provided that the banks must hold 40 per cent, ot the reserve in Dominion Government notes. Thus you will see that the gold is held in reserve and the notes issued for circulation.”