Volume 2 - ElectricCanadian.com

1867 TO 1901 131paid, would be undesirable if notes could not be circulated inproportion to it, and it is also clear that the larger the depositsare in proportion to capital, the greater will be the profits.As soon as it was realized that conditions had changed, theunwisely ambitious efforts of the three largest banks werefollowed by the creation of smaller banks, the founders ofwhich proposed to profit by what was occurring. Severaldirectors thus left the Board of The Canadian Bank of Commerceto become the founders, or important directors, of otherbanks with small capitals.The table on page 132 tells the tale. In 1890 the Bank ofMontreal was able to circulate its notes to the extent of only44.4 per cent, of its capital, the Merchants Bank to the extentof 53.6 per cent., and The Canadian Bank of Commerce to 49per cent.; while the Dominion Bank circulated 86.2 per cent,and the Imperial 94.4 per cent, of their respective capitals.The comparison of total assets with capital is even moreilluminating. The assets of the Bank of Montreal wereonly 399.8 per cent, of its capital, of the Merchants Bank373.6 per cent, and of The Canadian Bank of Commerce384.3 per cent., while those of the Dominion Bank were827.2 per cent, and those of the Imperial Bank 670.3 per cent,of capital. In time the growth of the country overtook thecapitalization, and by 1900 The Canadian Bank of Commercewas able to put into circulation a larger proportion of itsauthorized note issue than any of the other five banks mentioned,while the percentage of its assets to its capital waslarger than in the case of any of the others except the DominionBank. From this time forward The Canadian Bank of Commercefound no difficulty in earning as much as any otherCanadian bank.