Under this heading are included not only the gold and large legal tender held by the bank for its cash reserve and clearing house settlements, but it includes also the till and change money at the various branches. The latter, however, forms a very small proportion of the whole.

The only reference made by the Bank Act to a cash reserve is in connection with the requirement that at least 40 per cent of the cash reserve must consist of Dominion notes. It is left entirely to the judgment of the individual banks themselves to fix their own cash reserves, and tho experience so far has fully borne out the wisdom of non-interference in this connection on the part of the government. Considering that practically all the till money is in the form of a bank's own notes, the average cash reserve maintained by the banks of about 10 per cent to 12 per cent has proved fully adequate at all times. Some banks maintain a higher and some a slightly lower rate than the above according to their circumstances or requirements, the ratio varying with the same bank at different times. The daily redemption of notes and checks thru the clearings all over Canada acts as a constant check to any tendency on the part of a bank to lower its reserve below a certain limit.