Returning from this digression to the subject of deposits, I have to deal with the objection that we pay interest on deposits. I am aware that many eminent bankers in the United States have expressed the opinion very decidedly that it is inconsistent with sound banking to pay interest on deposits. On the other hand, bankers in Great Britain and in Canada would say that any system of banking which will not afford interest on certain classes of deposits is unsound. I must hold with the latter opinion. It is entirely a question of the character of the deposit.

Well-managed Canadian banks do not give interest on active current accounts. But all Canadian banks issue interest-bearing receipts, and, as you will have gathered, all, or almost all, have savings departments. These deposits, great or small, are in the nature of investments by the depositor, and are not like the temporary balances of a merchant. They are entitled to interest. It is of vital importance to every nation that its people should have the saving habit. It is also of vital importance that all the money disbursed for labor, or to the farmer or otherwise, should find its way back as early as possible into the channels of commerce. Will it find its way back unless interest is offered for it?

It will be said that the ordinary savings bank is the proper organization to take care of such deposits. So far as the very large cities are concerned this may be quite true. But is the ordinary savings bank an effective instrument for collecting the miscellaneous savings of the smaller communities ? I think not. Be this as it may, we by our branch system, with the savings department added, provide in small towns where the ordinary savings bank is impossible, a secure place of deposit, and the quite large deposits of our leading banks are certainly the accumulation of tens of thousands of such depositors.

Banks are required once a year to make a return to the Government, which is published as a blue-book, of all unclaimed dividends, deposits, or other balances of five years' standing.