The legal position of the depositor is about the same in both countries. The note-holder's claim is preferred to his. We must not, however, expect that any government will relieve a depositor from the necessity of using discretion as to where he places his money. Governments never have done and never can do that. Men must look around, and after measuring the security offered, judge where they should entrust their money. It is perhaps easier for a man with limited intelligence to make a selection if the banks have large capital and are of a semi-national importance, provided, of course, the basis of the system is not unsound, as in Italy and Austria. In Canada, we do not borrow from abroad, although we would not object to do so if money could be obtained at low enough rates of interest; our banks have large capital and small deposits relatively, and we do not lend on real estate. The Government statement at 31st December, 1892, shows that before depositors having claims amounting to $180,000,000 can suffer, shareholders must lose in paid-up stock and double liability as much as $126,000,000 and $25,000,000 of surplus funds, in all $151,00,000. There is probably no country in the world where greater security is offered to depositors.

When our charters were under discussion two or three years ago, I had occasion to defend our system, and I have copied freely from a pamphlet I wrote at that time. I must not, therefore, omit to repeat a statement made then, which might excite criticism more readily, now that the banking system of Australia has collapsed. In making a comparison between individual banks with small capital, and banks with branches and large capital, I urged that:"The probability of loss to the depositor in one bank "with several millions of capital, is less than the probability of loss to some of the depositors in ten or twenty "small banks, having in the aggregate the same capital "and deposits as the large bank."

The retort will be quickly made:-"But if the large "bank fails, the ruin will be just so much the more widespread."

This is quite true, but while it appears to be an answer to the point, it is not. If the conditions of two countries are about the same and the ability of the bankers and the principles of the banking system are in other respects-equally excellent, it must still remain true that the probability of loss to the depositors in one or more of the ten or twenty small banks is greater than the probability of loss to any of the depositors in the one large bank.