arise in the future in connexion with the administration of the Act under consideration.

It is recognised by this Government that the situation developed by the present discussion may require an examination by Great Britain into the facts above set forth as to the basis upon which the tolls fixed by the President's proclamation have been computed, and also into the regulations and restrictions circumscribing the coastwise trade of the United States, as well as into other facts bearing upon the situation, with the view of determining whether or not, as a matter of fact, under present conditions, there is any ground for claiming that the Act and proclamation actually subject British vessels to inequality of treatment or to unjust and inequitable tolls.

If it should be found as a result of such an examination on the part of Great Britain that a difference of opinion exists between the two Governments on any of the important questions of fact involved in this discussion, then a situation will have arisen which, in the opinion of this Government, could with advantage be dealt with by referring the controversy to a commission of inquiry for examination and report, in the manner provided for in the unratified Arbitration Treaty of the 3rd August, 1911, between the United

States and Great Britain.

The necessity of inquiring into questions of fact in their relation to controversies under diplomatic discussion was contemplated by both parties in negotiating that Treaty, which provides for the institution, as occasion arises, of joint high commission of inquiry, to which, upon the request of either party, might be referred for impartial and conscientious investigation any controversy between them, the commission being authorised upon such reference "to examine into and report upon the particular questions or matters referred to it, for the purpose of facilitating the solution of disputes by elucidating the facts, and to define the issues presented by such questions, and also to include in its report such recommendations and conclusions as may

be appropriate."

for adopting it, either under a special agreement, or under This proposal might be carried out, should occasion arise the unratified Arbitration Treaty above mentioned, if Great Britain is prepared to join in ratifying that Treaty, which the United States is prepared to do.

SOME FURTHER OBSERVATIONS UPON CANADIAN BANKS AND BANKING.

A COMPARISON OF THE BANKING ACTS OF CANADA AND THOSE OF OTHER COUNTRIES.

BY PETER RYAN, ESQ.

WHAT SOME FOREIGN BANKS PAY TO THEIR SEVERAL STATES FOR THEIR FRANCHISES.

The banks of the United States pay substantially for the privilege of issuing notes which are furnished by the Treasury of the Republic.

The United States Banks are not allowed to establish branches. Every Bank is a local Bank and not, as in Canada, used to bleed the rural districts white. Their directors are local men, who help build up local industries, merchants and farmers.

They are subjected to Government inspection without one moment's warning, and must shew up on demand.

The Banks of the United States have no combine rate of interest to depositors, nor do they try to control the Government. They would like to, but the people and Congress won't let them.

AMERICAN BANK INSPECTION AND CANADIAN BANK

INSPECTION COMPARED.

The Canadian bankers object to Government inspection for obvious reasons, and the directors who are in the Senate and Commons will be very busy if any attempt is made to subject their institutions to examination except by their own officials.

If their business is done on the sound principles they claim they should welcome independent Government inspection; and if on unsound or immoral methods, the sooner depositors and the public know it the better. The real obpection to Government inspection is believed to be the numerous "skeletons" in their cupboards.

WHY NOT THE STATE BE PAID FOR THE CURRENCY ISSUED?

If the Banks of the United States can pay, and do pay, for the very valuable franchise of issuing currency, why

cannot Canadian Banks do so also?

In the United States Banks pay direct tax of one-half of one per cent. on their notes, which are backed by $100 in gold for every $90 of issued notes. The gold to redeem the currency is in Uncle Sam's vault, and he is responsible

for it.

The Banks of the United States must buy their currency from the Treasury of the Republic by depositing gold at ten per cent. over par, or the gold bonds of the United States, which bear only two per cent. interest and issued especially

for banks.

Nearly all the Saving Banks of New York pay interest at four per cent. per annum to depositors, therefore the Banks pay heavily to the public for issuing notes.

Direct and indirect, they pay about $2.45 per cent. uer annum for the privilege of issuing notes. The Canadian Banks pay not one cent, except the cost of the paper and the engraving, against which they get all the benefit of lost and destroyed bills, which in the United States inures to

The Banks of the United States lend money to farmers and manufacturers cheaper on the average than do the Canadian Banks. The Canadian Banks don't often lend to farmers, however good, and never when money is tight.

THE BANK OF BELGIUM AND ITS OBLIGATIONS TO THE STATE.

The Bank of Belgium pays the State for the privilege of issuing notes, does all the Government business free, discounts small notes as low as $2, and at an average rate not higher than three and a half per cent, per annum. From its net earnings it pays the State fully fifty per cent. more than it pays its shareholders in dividends. The State appoints the President of the Bank and the Bank pays his alary. Truly the Bank of Belgium does not own the Parliament and Government of Belgium.

THE BANK OF NORWAY.

The Bank of Norway pays tax on its notes and half the Bank's profits from six to ten per cent., and all above ten per cent. is divided by the Bank getting one-fourth and the State three-fourths.

NOTE-A share of Bank profits returning to the State is equally as just as the Gas Company of Toronto being obliged

to return all profits above ten per cent. to gas consumers by a reduction in the price of gas, and all increased amount of shares issued are sold by auction in small lots. No meloncutting permitted.

THE BANK OF AUSTRIA-HUNGARY."

The Bank of Austria-Hungary pays heavy taxes on its notes in circulation, and the Empire claims all profits over seven per cent. on the actual paid capital.

NOTE. The Toronto Street Railway Company returns to the Treasurer of Toronto fully one million dollars per annum for its franchise. Why don't the Banks of Canada pay to the Dominion Government a share of their enormous earnings which their franchises enable them to make?

THE BANK OF FRANCE.

The Bank of France, notwithstanding its great service in war and peace to the Republic, pays stamp duties and interest on its currency amounting to several million dollars. per annum; loans permanently to the Government of France free of interest, nearly fifty million dollars, and does all the Government business without charge; also lends to the Government of France thousands of millions of francs at one and two per cent. interest. It returns to the State threefourths of its earnings over five per cent. and one-eighth of the entire charge on discounts.

The discount rate, unlike Canadian Banks, is alike to all. In addition to the above conditions, and others too numerous to specify, it loans many million francs every year to farmers, through their agricultural societies, for purely agricultural purposes at two per cent. per annum. Is it any wonder that the farms of France are so productive, and that France is not alone the richest nation on earth, but the controller of the money markets of the world?

The Bank of France in no sense owns or controls the Government or people of France. The interest and welldoing of the people demands and receives from this great institution the first consideration. Hence French farming and manufacturing industries are amongst the most prosperous in the world. During the past thirteen years the rate of discount has only changed ten times and has never exceeded four and a half per cent.

Yet even the above conditions have not been considered sufficiently favourable to the State, for under the new law. which came into effect on January 1st, 1912, the share of profits to the Government has been much increased and the Bank is obliged to lend to the Government, free of interest, an additional one hundred million francs, and twenty million francs also free of interest or charge, in aid of new and desirable industries, as directed by the State. Surely the Bank of France does not control the Government or the people of France.

THE BANKS OF ITALY, SICILY AND NAPLES.

The Banks of Italy, Sicily and Naples pay to the Government of Italy more than two and a half million dollars per annum as currency tax. They are compelled to lend to the Government money, as required, at one and a half per cent interest. They pay to the Government one-third of all profits from five to six per cent., and one-half of all above per cent. The Banks of Italy don't own the Government of Italy.

sir

NOTE. The Government of Ontario, with perfect justification, taxes tavern-keepers a substantial percentage on all the bar receipts over an amount which is supposed to represent the cost of doing business. This is the price of obtaining a public franchise of special value. Query: Have the Canadian Banks not a specially valuable franchise, and should they not be taxed as well as tavern-keepers? Let the Bank lobbyists explain why, and the Bank directors on the Banking Committees of the Senate and Commons stand up

and

answer.

THE BANK OF HOLLAND.

The Bank of Holland for its franchise loans to the State

fifteen millior. florins, on which no interest is charged, does all Government business free, and apportions the profits as follows: 1st, to capital, three and a half per cent. as a first charge: 2nd, twenty per cent. of remainder to the Reserve, which must not exceed twenty-five per cent. of the paid-up cash capital; 3rd, three per cent. of residue to directors' fees, commission, etc.; 4th, of the remainder, one third to the shareholders and two-thirds to the State.