fice
savings banks; (2) the government savings banks of the Maritime
provinces taken over at federation and being gradually merged with the
former; (3) two special savings banks in the cities of Montreal and
Quebec; (4) the savings bank departments of the chartered banks. The
rate of interest allowed by the government is now 3%, and the chartered
banks usually follow the government rate. The amount on deposit in the
first three increased from $5,057,607 in 1868 to $89,781,546 in October
1906. The returns from the chartered banks do not specify the deposits
in these special accounts.

The numerous loan and trust companies also possess certain banking
privileges.

The federal revenue is derived mainly from customs and excise duties,
with subsidiary amounts from mining licences, timber dues, post-office,
&c. Both the revenue and the expenditure have in recent years increased
greatly, the revenue rising from $46,743,103 in 1899 to $71,186,073 in
1905 and the expenditure keeping pace with it. The debt of the Dominion
in 1873 and in 1905 was:--

+------------+--------------+--------------+
| | 1873. | 1905. |
+------------+--------------+--------------+
| Gross debt | $129,743,432 | $377,678,580 |
| Assets | 30,894,970 | 111,454,413 |
| Net debt | 98,848,462 | 266,224,413 |
+------------+--------------+--------------+

While the debt had thus increased faster than the population, it weighed
less heavily on the people, not only on account of the great increase
in commercial prosperity, but of the much lower rate of interest paid,
and of the increasing revenue derived from assets. Whereas in 1867 the
rate of interest was over 4%, and interest was being paid on former
provincial loans of over 6%, Canada could in 1906 borrow at 3%.

The greater part of the debt arises from the assumption of the debts of
the provinces as they entered federation, expenditure on canals and
assistance given to railways. It does not include the debts incurred by
certain provinces since federation, a matter which concerns themselves
alone. A strong prejudice against direct taxation exists, and none is
imposed by the federal government, though it has been tentatively
introduced in the provinces, especially in Quebec, in the form of liquor
licences, succession duties, corporation taxes, &c. British Columbia has
a direct tax on property and on income. The cities, towns and
municipalities resort to