STATE NOTE ISSUE

Taranaki Daily News, Volume LIV, Issue 72, 15 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. Ueddoc 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 <>( 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 note* 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 ibeing aware that there was no power for any; colony to do so. Some 20-dollar 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 anv 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 thereof nenrlv to the extent of the paid-up capital. Practically the whole of tho sold is held in reserve a* a cuamntee to the notes, and* every bank is pledged bv law to ha.ve a redemption agent at. the capital of the different provinces, and the notes are the first chnreo ajjnlnst the assets in the eve"t of a. bank «ettin<r into difficulties. Monthlv statements are. sunolied by oeh binjc to the Finincial Minister. Tnong details, and these are pii'>*is'i«<» in the Gazette. Tt is also provided tint- the banks must, hold 40 ner cent, of the reserve in Dominion Government notes. Thus you will see that the gold is held in reserve and the notes issued for circulation."