are increasing, however, at a rapid rate, and new banks will doubtless come into existence, although the old institutions, with their large capital and surplus, and with the unlimited right to establish branches, are in a position to expand their business indefinitely. Indeed, it is easier for the banks now in the field to get new capital than it is to get subscriptions to the stock of a new bank. Hence, while it is probable that new banks will be started from year to year, it is not likely that Canada, even when its population is four times the present figure, will have many more banks than it now has. The advantages of consolidation and the evils of unrestricted competition are realized in Canada as clearly as in the United States and have in the last decade caused a reduction in the number of banks from 39 to 29.

COMPETITION IS NOT LACKING.

In many respects banking competition is quite as active in Canada as it is in the United States. Apparently there are only two things which the banks do not like to do in order to attract business-lower the discount rate, or advance the rate paid on depositors' balances. There is no express agreement among the bankers on these points, but every banker knows that he would become persona non grata among his brethren if he should discount certain kinds of paper at less than 6 per cent, or pay his depositors on their monthly minimum balances more than 3 per cent per annum. In Montreal and Toronto large borrowers can get money at 5 per cent, but the average merchant and manufacturer must pay 6. In Winnipeg borrowers

can do almost as well, but farther west the usual rate is 7 per cent, and in some of the remoter districts merchants and farmers alike pay 8 per cent. Bankers do not believe in lowering the discount or interest rate unless they are compelled to do so in order to find a market for their funds.

Some of the older institutions would like to prevent competition from absorbing the minor profits which come from collections and transactions in exchange, but they are not entirely successful. The nominal or schedule charges for collections and exchange are frequently cut for the benefit of business men whose favor it is desired to propitiate.

In their efforts to get new business, to be the first to open a branch in a promising new community, or to keep their regular customers from being dissatisfied, there seems to be the keenest kind of competition. Few villages of 500 people can complain that their banking facilities are less than they deserve, and many of them, with barely enough business to pay the expenses of one branch, are supplied with two. The recent rapid increase in the number of branches has been caused by the great expansion of the West and by the competition among the more progressive and energetic general managers, each desiring that his bank shall be the first in a promising field, even though his enterprise lead him to establish branches which at first do not pay expenses. In a new mining camp the first bank, like the first saloon or the first boarding house, usually begins business in a tent. Some of the more conservative bank managers in Canada think that new branches are being started in excess of the country's

needs, but others are willing to take chances on the country's future and to charge considerable sums to the debit side of the profit and loss account in order to keep their institutions at the front in the great and developing West. That mistakes are not infrequent is proved by the fact that in 1909 the banks, while they opened 267 new branches, abandoned 40 old ones. Of the 40 closed 30

were located in the Province of Ontario. Of the new

a" When a new country opens up," said a Toronto manager, we often have to establish a branch on short notice, and we open up in any kind of quarters. At Cobalt, for instance, we cleared the snow off the ground, erected a tent, tacked up a sign, and the bank was ready for business. Supplies were rushed in and better quarters built as soon as possible. Our employees hold themselves ready to go anywhere on a moment's notice.

"Our branch bank buildings in the smaller towns are uniform in construction and equipment, and have sleeping quarters for two or three men above the banking room. The construction of these uniform buildings is so systematized that we can order a certain style building from our carpenters and they can cut and saw every piece and ship it ready to be put together. Then we have uniform equipment of bank fixtures, desks, etc., so when we order fittings for a certain style of building we know every article that is needed for its furnishings.

"In some sections of the country west of Winnipeg the branches commenced paying from the first day they were opened. At one small town the branch had $250,000 in deposits in an incredibly short time.

“We have plenty of promising locations for branches, but our greatest trouble in expanding is in finding competent managers."

"We have branches," said another manager, "in towns too small to afford a permanent office. They are kept open only two or three days a week. One manager with two junior clerks has charge of two or three such branches, dividing their time between them. We make it a point never to have a branch bank in charge of less than three men, on account of the protection they afford from without and within. Dishonesty is very We do not carry any burglar insurance, as till money is all that is kept at the smaller branches, the reserve being kept at the more important points. Money can be quickly centered at any branch where there is a call for it. At least two men are expected to sleep on the premises of the permanent branches.

rare.

"Our system allows banks to be operated with profit in all towns of 500 population. In many towns of 200 inhabitants there are branch banks."

branches 72 were opened in Ontario and 40 in Quebec, two of the older Provinces, while in the west 13 were opened in Manitoba, 57 in Saskatchewan, 49 in Alberta, and 26 in British Columbia.

CLEARING HOUSES..

The law gives to the Canadian Bankers' Association the right to establish and regulate clearing houses. In 1909 clearing houses were in operation in fourteen cities. Total clearances for the last five years and for 1900 are given in the table below:

Total 1,660, 263 3,335,595 3.997, 960 4,321, 441 4, 142, 233 5, 203, 269

All the clearing houses are operated alike, the rules being made and approved by the Bankers' Association. The methods employed are very similar to those in use

in the United States. Balances are paid with Dominion notes that are negotiable only between banks, by draft on Montreal, and sometimes by draft on New York. Since bank notes as well as checks are always sent through the clearing house, the totals given above include notes as well as checks. The amounts of each are not separately reported or even recorded at the clearing houses.

BANKING IN DIFFERENT PROVINCES.

The clearing-house statistics possess special value in Canada for the reason that they constitute the only available data with respect to the growth of banking operations in the different provinces. The monthly bank statements give totals for the Dominion. That is all the law requires, and the banks do not give the public more information than they are obliged to. One can not find out, therefore, what proportion of the deposits belong to Ontario, Quebec, Manitoba, and other provinces, in what sections loans are expanding most rapidly, or what branches make the call loans. It is generally known that the eastern branches get heavy deposits and are creditors of the head office, and that the funds they collect are forwarded to the western branches, whose loans greatly exceed deposits. Bankers will admit that this transference of funds takes place, but there is considerable grumbling about it in the old communities of the East, and the bankers fear that a monthly or even annual publication of the facts would keep them perpetually in hot water. A glance at the above clearing-house statistics leaves no doubt as to the banking importance of the western Prov