In that they had not only paid off the the two years closing the war of 1815, large sum of $890,000,000 of their debt, than she has ever paid since, and that was but had also released the country of a under the system of making Bank of large portion of internal taxation. The England notes legal tender, and allowing policy was not without precedent, for Mr. gold to find its value in the market like Pitt, one of England's greatest states any other product of labour. The effect men, had inaugurated one somewhat of resuming specie payments, under Sir similar in 1797 by making Bank of England Robert Peel's Act of 1819, was to increase notes a legal tender guaranteed by the the public debt and private debts incurred State, leaving gold to find its value in in paper at 13 to the sovereign-in the market like all other commodities, fact to increase all the liabilities of the which continued until 1823. The hon. country one-half for the benefit of the member would not deny that during the fund-holders and creditors at the expense period referred to, it was the trade with of the public and the debtors. With that country (U.S.) which had stimulated respect to the present Bill, it left the production in the Dominion, and thereby Dominion notes up to $9,000,000, as they kept up our Banks in a great measure, by were before, but as regards the issue supplying them with a large amount of beyond that sum there was no restriction foreign exchange Our farmers and others whatever. In his judgment, the amount were able to sell their goods to our neigh of Dominion notes ought not to exceed bors, for the very currency of which he the amount of the annual revenue spoke so disparagingly, and in that way the next place he did not think the public assist to swell the revenue to its present should endorse the amount of circulation proportions. The Bank of England was to be given to the Banks without their restricted by the Act of 1844, and beyond obtaining something for it The circula the £15,000,000 of notes secured by con tion of Dominion notes was the best kind sols, was obliged to hold five sovereigns of currency we could have, for with them for every five pound note issued by this we could travel from one end of the Act. The banking department was country to the other. They were a legal separated from the issue department. tender endorsed by the State, and the In 1847 the bank was bankrupt so far whole property of the country was liable as law was concerned and the Govern for their redemption. What he wished to ment had to come forward and relieve see was, that the circulation is as secure the bank by allowing it to issue notes as in the neighboring country. The Banks beyond the law. In 1857 it was the same were not liable to be called upon to pay thing, and in 1866, two banks had a in gold on demand. They had to deposit larger amount of deposit in the bank of actual value in debentures of the United England than all the gold that was held States-and receive only 90 per cent. of in both departments, which they threaten circulating notes for them. In this country ed to demand. Again the Government the result of the circulation of Dominion had to come forward and stop the depre- notes had been most beneficial. ciation of property, in consequence of the the total circulation had risen from $12,restriction of circulation caused by a000,000 to $34,000,000--the Bank circulaforeign demand for gold. Even now on account of the German purchases of gold in the London market, the Bank of England had again raised the rate to five per cent., and it may go far higher, restricting the home trade, and may end in a crisis and panic. He was of opinion that the gold system was based on a fallacy-it was attempting to make a certain quantity of gold not only the unit of quantity, but the unit of value, a thing impossible without causing violent fluctuations. The history of the United States for the past ten years was a proof that the theory in question was based on a fallacy. Their system had tided the country through a most critical period without a commercial crisis, when its credit was almost prostrated, and lately the discount had been only 9 as 'between paper and gold. Great Britain paid off more of her debt during Now tion having reached $23,000,000, and that of the Dominion notes $11,114,000. He wished to see our banking system made still more liberal, so that any number of individuals, on furnishing proper security, and registering the name of their locality and amount of capital, should have the right to establish a Bank; and he was sure that the intelligence of the country would support such a system, for it would place banking in the same position as all other business dealers in money. Hon Mr. BUREAU said that he considered the issue of Dominion Notes when prudently managed, could promote the public interests. the money now circulating might be doubly advantageous to the country. In the first place, it was a benefit inasmuch as we had not to pay interest on the Dominion notes. Again, the money we have to borrow in England for the construction of our public works, | no give it. Necessarily the Banks were obliged to ask more for discount so as to pay for the gold they were obliged to get from the United States. The consequence was the Banks did not respect their charters, but obliged persons applying to them for accommodation to pay 9 per cent. In September the Bank in question had in specie-in other countries, $9 258.557, here $1,577,093 or $10,835,644, whilst all the other Banks in Ontario and Quebec had altogether only $4,317,25; and hence it would be seen what power it held in its hands If the patronage of the Government is only to benefit one institution, if the deposits were not made of such a proportion as to prevent any run on the Bank, there would be greater danger to be apprehend ed than now exists, of commercial embar rassment and bankruptcy. In the United States, the Government could always hold the keys of the position, inasmuch as the importations are paid in gold, and they have always in the treasury a quantity of specie to protect every note circulated by the different Banks as at par, for it was considered as gold. If any persons combined to create a crisis with a view to speculation the Government were in a position to step in and prevent it. In this country, on the other hand, it was not possible to find gold in a moment If the Government received the money for the Pacific Railway and placed it at deposit in a particular Bank they could not ask for it at a day's notice. Since the British Government had found it expedient to withdraw the troops from the country, we were annually loosing a great amount of gold-some million of dollars; and consequently we had to meet the expense of the defence of the country ourselves. Under these circumstances the country was a loser to the extent of perhaps two millions of dollars. On the 30th April last circulation of the Banks was $23,307.658; of Dominion Notes $10,129.575; fractional currency $396,967; making a total issue of $33,834,198. In specie the Banks held $9,002,522, and the Government $3,028,368 for the redemption of Dominion Notes; making a total of $10,060,090. From the foregoing figures it would be seen that the circulation of notes was about the same in proportion to population as that of the United States. He did not know what the Government intended to do, but he thought it would be wise policy to fix the amount they proposed to raise under the present measure They had already done a great deal to promote the monetary circulation of the country; for it was not long since very many complaints were coming in of the inconvenience and loss arising from the existence of a depreciated currency; and no one undertook to remedy the difficulty until the present Finance Minister came into office, The persons who suffered principally by this depreciated currency were the small dealers and merchants throughout the country, and many of them had to pay as a daily operation at the rate of 5 per cent. on the $100 to get rid of the coin, and the consequence was financial embarrassment time and again. He did not understand why the Finance Minister should not state the amount he intended to raise. Per haps he proposed making a great finan cial stroke, place the money he would borrow for public works in the different banks and receive interest on it, while he circulated as many notes as he wished. | Dominion notes, then there was $7,000,000 He regretted that we had not now in this in gold, and if the Government held $3,country a banking system like that in the 000,000 more, that made $10,000,000 United States, which would enable per- to represent the whole gold of the sons with a much smaller capital than country. Indeed, it was a very rare thing $200,000 to establish banks. He would to see gold passing in ordinary business like such institutions in towns and vil- transactions. Since the Union of the Prolages, with a capital of $50,000. At pre vinces the country had been generally sent, the system was calculated to benefit prosperous-no financial crisis had occur. only the wholesale merchants, but he red, no difficulty had arisen to prevent wished to assist the farmers and small the circulation being kept afloat; but in dealers in addition throughout the rural case of a monetary crisis, embarrassment districts, but he had every confidence that might arise, and it was against such a conthe time would soon come when we would tingency that Parliament should guard. have a more liberal banking law. He Under all the circumstances he recom. could see evidence pointing to the estab-mended caution, and a limitation to the lishment ere long of a Bank of Issue by the Government. In the meantime, how ever. for the reasons he had stated he must give his support to the measure be fore the House. Hon. Mr. WARK believed the present Bill was a departure from the system heretofore established in this country. The first $5,000,000 issued required four millions of debentures and one of gold. The second four millions required one of gold also. Accordingly, the issue of nine millions required seven of debentures, and two of gold. Then we had to follow the practice of the Bank of England and issue every additional dollar on condition that it be redeemed in gold. He believed that the system so far had been profitable to the country, but it was an experiment the result of which had hardly yet been shown. It might be compared to the experience of a new Insurance Company; premiums came in very rapidly whilst the losses were small; but the time might arrive when embarrassment and complications would ensue. He was of opinion that we should proceed with caution and not pusa tne system to extremes. The effect of the proposed change, he believed, was to withdraw gold from the country. He knew that the Finance Minister expected that the additional issue would be in smaller notes; but it did not follow that the banks would put one dollar more of the money into circulation than was actually necessary to meet the demand of their customers. If anything beyond thatwas actually needed for the necessities of the country was issued, it would go into the vaults of the Bank and form part of their cash reserve, and gold would go gradually out of the country. In England the business was done with sovereigns. The Banks did not issue any notes under five pounds; but here there was paper as low as one and two dollars. The amount of cash reserves held in this country was some $14,000,000, and assuming $7,000,000 of that was in accommodation which the Banks should receive. He did not believe there was any security in a paper currency—it was like a lottery. Hon. Mr. SIMPSON said if we had the power to legislate so that other countries would take our notes as gold, hon. gentlemen might be right in the conclusions they come to; but the Chinese would not sell us their silks or teas without receiving what they considered the true equivalent. He did not think that the experience of the world had found out any currency He held that there was no equal to gold. safe banking unless there was a proper equivalent at the basis of the circulation. If a bank issued $10 or 12,000,000 they had an equivalent in the shape of merchandize True the Government had the whole country-they could impose additional taxes; but, nevertheless, they had no true commercial equivalent to fall back He contended that the Bill was a upon. breach of faith with the Banks, who agreed to surrender their rights on certain conditions, which they had fulfilled on their part. He remenbered the time when he could buy Government notes for 20 per cent discount-when the notes of a people of 40,000,000 were only worth 40 cents on the dollar. He was afraid that the prin ciple on which we were acting would lead to a far worse state of things; for the Bill was entirely a step in the wrong direction. In 1879 and 1870, the whole of the discounts of the Banks of Ontario and Quebec were about $56,000,000, while they had reached some $94,000,000 at the present him; but he was unable to account in a legitimate way for so large an increase. He believed the present measure would lead to undue expansion and speculation, and sooner or later disturb business and bring about a financial crisis. doing a correct business would advance money except for a sufficient equivalent, but here the Government proposed to issue without giving the country good No bank security. He did not see anything in the measure with respect to the disposing of the notes-they might favor one institution to the injury of the others. Under any circumstances the amount of reserve should be much larger-at least 40 per cent. Hon. Mr. BENSON was of the same opinion with those who urged that the principle of the Bill was not safe. He must express his strong objection to a system which made no restriction as to the amount of issue. He had every confidence in the finances of Canada, but at the same time he must urge that the amount of reserve be raised to 40 per cent, at least, and the amount of issue be limited. Hon. Mr. CAMPBELL denied that there had been any breach of faith whatever with the banks. Parliament placed on the Statute Book a law reserving to the Government the right to issue notes within a certain denomination, and giving the banks privilege of issuing notes of a different denomination, besides relieving them of their taxes. The necessities of the country demanded that there should be an addi tional issue of one dollar notes. It was idle to say that a rule laid down at a certain period was to last for all time to come. If there was really a necessity for the augumentation of one dollar notes, then it was absurd to say we should be tied down by a cast iron rule applicable to different circumstances. His hon. friends thought there should be an increase of the specie reserve; but it should be remembered that the banks were not obliged to hold a single dollar in specie; and if that was considered safe in the case of those insti. tutions, it ought to be so certainly in the case of the Dominion which was liable for, and able to meet all its own liabilities. The Government could have no object in view in proposing such a measure except to meet the requirements of the country. No Ministry would dare to favor one bank by giving it the control of the greater part of the issue; the Bank returns were published from week to week, and the amount of their deposits could be easily seen. He admitted that there must be a a basis in gold, but he did not understand that the Finance Minister was particularly wedded to the amount of reserve. Не had great respect for the opinions of hon. gentlemen who had spoken on the ques tior, and would take the earliest opportunity of consulting the Finance Minister on the subject. Hon. Mr. SIMPSON said that five gentlemen, depated by Banking institutions had waited on a member of the Cabinet who took the leading part on this question, and had come to an understanding with him. Hon. Mr. BOTSFORD said that a limit of some kind should be fixed to the issue of notes. Hon. Mr. NORTHUP was inclined to the opinion that the measure, on the whole, would be acceptable to Nova Scotia. Some 80 per cent. of the Dominion notes would get into circulation, and the currency of the whole country in that way benefited. The best security which the Dominion had lay in the prudence of the Finance Minister and in the standing of the Banks. The Finance Minister would not issue money except to meet the public necessities, and certainly he would not advance it to any Bank unless he had confidence in its management and discretion, and that he could ascertain from the returns and other means open to him. felt that the Nova Scotia Banks, managed as they were by discreet Directors, might be safely entrusted with the circulation. Under all the circumstances, having given the measure his careful consideration he was quite prepared to accept it as devised in the interests of the country. The Bill was read a second time. HOUSE OF COMMONS. He OTTAWA, Monday, May 20, 1872. The SPEAKER took the chair at 3:15 p.m. PETITIONS. A number of petitions were presented. PRINTING AND BINDING. the address giving a statement of the Hon Mr. MORRIS presented a return to amounts paid for confidential printing and binding. BANKING PRIVILEGES. when he might expect the return relating Mr. THOMPSON (Haldimand) asked to Banking Privileges. Hon. Dr. TUPPER replied that he would answer to morrow. IMMIGRANT RETURNS. In reply to Mr. Stirton, Hon. Mr. LANGEVIN stated that the re turn of the number of emigrants conveyed over the Dawson route was being prepared and would be brought down at an early day. CHATHAM BOARD OF TRADE. Mr. STEPHENSON moved for leave to introduce a bill to incorporate the Board of Trade of Chatham. NATURALIZATION. Mr. MORRISON (Niagara) moved the House into committee to consider the bill to naturalize Mr. A. G. P. Dodge. The committee rose and reported without amendment and the bill was read a third time and passed. DOMINION WATER WORKS COMPANY. Mr. WOOD moved the House into com Mr. MAGILL moved the second reading of the bill to amend the act incorpo rating the Mutual Life Association of Canada. Carried. The House then went into committee, and reported the bill, which was then read a third time and passed. The following questions were then asked: WEST INDIES STEAMSHIP LINE. Hon. Mr. GRY -Whether it was the intention of the Governmen' to include in the estimates for the ensuing year any provision for subsidizing a line of steamers to the British West Indies, as recommend. mittee on the bill to incorporate the Do-ed by the Commission to the British and minion Water Works Company. Hon. Mr. BLAKE thought the bill required amendment, inasmuch as it might be taken to sanction the validity of the ра. tent mentioned in the preamble, and he thought that a clause should be inserted showing that it in no way sanctioned the validity of the patent. After a short discussion it was agreed to insert a clause to that effect, and the com. mittee reported progress and asked leave to sit again. Mr. STREET moved the second reading of the Act to amend the Act incorporating the British America Assurance Company, and the subsequent Act affecting the said Company, as amended by the Standing Committee on Banking and Commerce, which was carried. The House then went into committee on the bill, rose, reported, and the bill was read a third time and passed. Mr. GIBBS moved the second reading of the Act to amend the Act 27 Vic., cap. 50, intituled An Act to incorporate the London and Canadian Loan and Agency Company (limited), as amended by the Standing Committee on Banking and Commerce. Carried. The House then went into committee on the bill, rose, reported, and the bill was read a third time and passed. Hon. Sir FRANCIS HINCKS moved the second reading of the Act respecting the Toronto Savings Bank as amended by the Standing Committee on Banking and Com merce. Carried. The House then went into committee, and the bill was reported, read a third time and passed. Foreign West Indies Association in the report to the Government in 1866. Hon. Mr. LANGEVIN said that the Government appreciated the importance of subsidizing a line for this purpose. During the recess they purpose to take steps to ascertain whether the Government of the British and Spanish West Indies will be disposed to contribute to a line or lines of steamers between Canada and the West Indies, and if so the Government of Canada will ask Parliament to do its share in the matter. It was understood that Sir Hugh Allan had offered to put on two steamers a month at £1,000 a trip. CANADIAN ARCHIVES. Hon. Mr BLANCHET- Whether any measures had been taken towards the construction of a Canadian Archives' office as recommended last session by the Joint Library Committee. Hon. Mr. POPE answered that no steps had been taken, but a sum will be placed in the estimates for the purpose. MISCELLANEOUS QUESTIONS. Mr. RENAUD-Whether it was the intention of the Government to place in the supplementary estimates any appropria tion for the construction of a break-water at the entrance of the harbour of Richi. bucto, in the county of Kent, N. B. Hon. Mr. LANGEVIN replied in the af firmative. Mr. GAUDET-Whether it was the in tention of the Government to issue permits for the placing of booms to detain lumber upon the navigable rivers on condition of the parties interested always providing easy passage for navigation. Hon. Sir JOHN A. MACDONALD an Mr. MERRITT moved the second read-swered that the Government had no power ing of the Act to incorporate the St. to issue permits for this purpose. Catharine's Board of Trade. Carried. The House then went into committee, and the bill was reported a third time and passed. NATURALIZED FOREIGNERS. Mr. YOUNG moved an Address for any correspondence which may have taken |