a little history of shock testing in Canada
Please get a look where some of my unique conclusions started, in this treatise on Gold Redemption in Canada. It's there in Footnote 4:
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Rose proposed to remodel the Canadian financial institutions after the us National Banking System. Under this scheme the banks would have been required to hold Dominion government securities to the extent of 100 per cent of their note circulation.
Now jump up to the text:
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The struggle between the supporters and opponents of government money came to a head in 1869 when the Conservative finance minister, Sir John Rose, submitted to Parliament a proposal which, for all practical purposes, would have entailed a government takeover of the bank-note circulation.4
After reciting two paragraphs of back-and-forth about reserve banking:
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A gold reserve of 20 per cent must be held against note issues up to $5 million.
What we witness is that while the US went on fiat currency due to the extraordinary occasion (Emergency) of the Civil War, it maintained and always has maintained that US notes will be 100% backed by gold reserves. [This brings up some interesting contradictions with Title 31 U.S.C. §5115 but that addition of the word currency (In the section, the words “United States currency notes” are substituted for “United States notes” for clarity and consistency in the revised title.) is for another post.] My point here is that at the same time Canada chose to go into the dishonesty of reserve banking (fractional lending) way back when, apparently based on the US going into fiat currency. Hopefully you have already noticed the title:
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The Gold-Reserve Requirement under the Dominion Notes Act of 1870: How to Deceive Parliament
The shock testing was basically to allow Canada to test the effects of fractional lending under Crown authority for some fifty years before the international bankers could consider it formally in the US with the Federal Reserve.
The more interesting point though is that the Bank of Canada Act has the same remedy as Title 12 U.S.C. §411.
Regards,
David Merrill.
