The Canadian banking system consists of twenty-three "chartered" banks with some 2,200 branches scattered throughout the Dominion. These banks are privately owned and managed, but they operate under a uniform law and are subject to the general supervision of the Government. The bank act creating the present system was passed in 1870 and every ten years it is revised. No bank.can be chartered with less than $500,-000 of capital. This large capital requirement discourages the establishment of new banks, and banking facilities are extended by increasing the branches and the capital of the existing institutions. Canadian banks are allowed to establish branches in foreign countries.
Canada's monetary system is substantially the same as ours, though the bank note currency is much more elastic. The gold coins of the United States and the sovereign of England are legal tender. Until 1908 all Canadian coins were minted either in England or in the United States, but in that year a branch of the British mint was established in Ottawa. The paper currency consists of Dominion notes and bank notes. The former are legal tender and may be issued to any amount. The law requires, however, that for $30,000,000 of these notes the finance department shall hold a 25 per cent reserve in gold and government securities, and that all issues above $30,000,000 shall be protected by an equal amount of gold. They are, therefore, gold certificates rather than credit notes. They may be issued in any denomination, but experience shows that they are most needed in large bills for use in bank reserves and in $1 and $2 bills for pocket and till money, the banks not being permitted to issue notes under $5.