CANADIAN BANKING

Rotorua Morning Post, Volume 3, Issue 688, 14 November 1933, Page 5

CANADIAN BANKING

(Press Assn.-

royal commission PROPOSAL FOR " CENTRAL BANK ENDORSED BY EXPERTS A COMPREHENSIVE SCHEME

-By Telegraph — Copyrlght).

(Rec. Nov. 13, 8 p.m.) "Ottawa, Novemher 13. The majority of *the Royal Commission, which has been investigating the hanking system of Ganada, recommended the establishment of a central bank. Lord Macmillan, Sir Charles Addis and Hon. J. E. Brownl'ee were in favour of the recommendation and Sir Thomas (Wlhite iand Mr. Daudry Leman dissented. The" commission unaraimously suggested a Dominion and provincial investigation to. devise some organisation for the extension of intermediate ;and short term agricultural credits. The report gives high praise to the Canadian hanMng system and observes that the world will never return to the conditioms which prevailed before the depfession. The- Centi-al Bank as proposed hy 1 the commission wbuld have a capital of five million dollars open to suhscription hy all British subjects resident in the country and with its dividend limited to five per cen.t 01* six per cent cumulative. It would have the sole right of note issue. The commercial hanks' issues should he redeemed over a period of years. The central bank would be the banker of the Dominion Government and might, hy agreement, also act as the banker of the provincial governments. It should talce over the issue and management of the public debt of Canada and possibly also of the provincial governments. Its principal operations Would inelude the buying and selling of gold and silver, foreign exchanges and Dominion and provincial securities, also the- seeurities of the United Kingdom, United States, and British Dominions together with the granting of advances upon such seeurities. The bank would he prohibited from advancing to the Dominion in excess of 33 1-3 per cent of the income expended during any one year or to the provincial governments in excess of 25 per cent. Repayment in both cases, would be- completed by the end of the first quarter after the close of the fiscal year.