War and its influence on the people.

HOW THE PEOPLE LOST CONTROL

Instead of the Constitutional method of creating our money and putting it into circulation, we now have an entirely unconstitutional system. This has resulted in almost disastrous conditions, as we shall see.

A historical sketch of currency and banking in Canada, tracing certain features of the central banking system that have finally led up to the establishment of the Bank of Canada appears on pages 900-905 of the 1938 Canada Year Book. In chronological order these are:

  1. Central Note Issue, permanently established with the issue of Dominion Notes under legislation of 1868.
  2. The Canadian Bankers' Association, established in 1900 and designed to effect greater co-operation amongst the banks in the issue of notes, in credit control and in various aspects of bank activities.
  3. The Central Gold Reserves, established by the Bank Act of 1913.
  4. Rediscount Facilities, originated as a war measure by the Finance Act of 1914, and made a permanent feature of this system by the Finance Act of 1923. This Act empowers the Minister of Finance to issue Dominion Notes to the banks on the deposit by them of approved securities, thus providing the banks with a means of increasing their legal tender cash reserve at will.

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