STATE MOTE ISSUE.

Auckland Star, Volume XLII, Issue 216, 11 September 1911, Page 7

STATE MOTE 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 this morning upon Mr. W. A. Beddoe (Canadian Trade Commissioner) to ascertain something regarding the system adopted by the Dominion across the seas. Mr. Buddoe said: "Our Government lias 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 bank 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. 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 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 thereof 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 issued. As far as the banks are concerned very heavy penalties are provided against excessive circulation of notes, and every bank is pledged by law to have a redemption agent at the capital of the. different provinces, and the notes are ilie 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, of the reserve in Dominion Government notes. Thus you will sec that the gold is held in reserve and the notes issued for circulation."