“Canada is still a young country, not yet done with pioneering, and its banks must lend a hand in promoting its development. When a branch bank is opened in a tent or shack in a new mining camp, the people know that the manager is there to give them service, and that he represents a strong institution with millions in assets. A remote fishing village or new paper-mill town is thus provided with banking facilities quite as effective as those of Montreal or Toronto. The difference in rates of interest charged is never more than two per cent., no matter how remote from the money centre a branch bank may be. The only reason it is ever higher is that where the operations of a branch bank are small, the overhead expenses are proportionately greater, and must be compensated for by the bank’s customers. In recent years our wheat farmers of southern Saskatchewan have been getting money cheaper than have the farmers of your North Dakota, just over the border. The banks represented in our three prairie provinces frequently have more money on loan in that territory than the sum total of the deposits in all their branches in the same area.” The banks of Canada all obtain their charters from the Dominion government, and their operations are strictly defined by law. This law, known as the Canadian Banking Act, dates from 1870, and it automatically comes up in Parliament for revision every ten years. Under the act, the banks are permitted to issue paper money, which ordinarily must not exceed the amount of their capital. Shareholders are made liable for the redemption of bank notes up to the amount of twice the value of the capital stock. In addition, each bank is required to keep on deposit with the government a sum equal to five per cent. of its note circulation. This goes into what is called the redemption fund, which was created to make it absolutely certain that in case of the failure of a bank, all its notes will be redeemed at face value. During the period from September to February, when the crops are moving to market, the banks may issue notes to fifteen per cent. in excess of their capital, but must pay a tax of five per cent. on all such extra circulation. Canada’s banks are not audited by government examiners, as with us, but each bank must submit a monthly statement of its condition to the Minister of Finance. These reports are more detailed than our bank statements and are regularly published by the government. They show, among other things, the amount each bank has loaned to members of its board of directors, or to firms in which they are partners. The banks are not allowed to lend money on real estate; this service is confined to loan and mortgage companies. Nearly all the chartered banks of Canada conduct savings banks and many of them also operate trust companies. The activities of the latter are almost exclusively confined to acting as trustees and as administrators of estates.