ey are necessarily allowed a large amount of
discretionary authority in matters pertaining to the branch over which
they preside. Unless prevented by distance, they are in daily
communication with the head office or with one of its representatives.

In the operation of the Canadian system, noteworthy features are the
methods of controlling credits, of managing the issues and the
reserves, and of securing unity or at least harmony of action. It is
the usual practice in Canada for a business man to do all his banking
with one institution. This practice is rendered possible because most
of the banks are large enough to take proper care of almost any
business establishment in the Dominion, and because experience has
demonstrated its wisdom.

The banks compete vigorously for new business but do not attempt to
attract one anothers' customers. Indeed a customer who desires to
change his banking connections is looked upon with suspicion and is
subjected to a very careful examination by the bank that is asked to
take him on, including a careful discussion of all the aspects of the
matter with the bank he desires to leave. The result of this practice
is that a man's banker is thoroughly familiar with his affairs,
especially his credit relations, and at the same time feels under
obligations to render him such support and guidance as he deserves. On
account of this practice, also, commercial paper brokerage does not
flourish in Canada.

The notes of the Canadian banks constitute practically all of the
hand-to-hand money of the country in denominations above two dollars.
The one and two dollar denominations are supplied by Dominion
notes--all but $30,000,000 of which are represented by gold coin or
bullion--and the lower denominations by subsidiary silver supplied by
the government.

Each bank pays out its notes freely to supply the cash demands of its
customers, and receives from them on deposit, without hesitation or
depreciation, the notes of other banks as well as its own. The former,
however, are either sent in for redemption as soon as received or used
in making payments to the banks which issued them. Thus notes are
cleared as readily as checks and the volume in circulation expands and
contracts in automatic response to business needs. The fact that these
notes are neither legal tender nor guaranteed by the government does
not interfere with their circulation--daily clearings, the first lien
on assets, and the redemption