GENERAL ARTICLES

Our National Strong Box

Nearly four billion dollars worth of negotiable wealth is stored in vaults carved out of the solid rock of Ottawas Parliament Hill

GRANT DEXTER February 15 1932
GENERAL ARTICLES

Our National Strong Box

Nearly four billion dollars worth of negotiable wealth is stored in vaults carved out of the solid rock of Ottawas Parliament Hill

GRANT DEXTER February 15 1932

Our National Strong Box

GENERAL ARTICLES

GRANT DEXTER

Nearly four billion dollars worth of negotiable wealth is stored in vaults carved out of the solid rock of Ottawas Parliament Hill

RICKS of solid gold piled, tier upon tier, higher than your head.

Bags of gold coin. British sovereigns that jingle to the touch, weigh heavily in the hand.

Stacks of crisp, new Dominion notes; bills of one dollar, two dollars and higher denominations.

Government bonds, equivalent to hard cash, done up in bundles; vast numbers of gilt-edge securities.

Such are the contents of the national treasure house at Ottawa.

Parliament Hill is solid rock. Into its heart six vaults have been cut. If you were privileged to stand in the corridor giving access to these vaults, you would be within fifty feet of nearly four billions of dollars.

Whether you know it or not, these six vaults are one of the nerve centres of your life, the nerve centre of Canadian commerce. Every Dominion note, every' coin in your pocket, came from these vaults. Sooner or later even,' one will return to these vaults to be replaced. Do you need coppers, nickels, dimes, quarters, half-dollar pieces, the officials of the treasure house quickly supply you. It is their job to provide the country with currency, without which trade would be impossible. It is equally their job to meet the needs or whims of the general public. In hard times careful buying demands the lowly copper. Millions of new coppers are at once supplied. In better times prices tend to a silver basis. The public spurns the copper and demands more nickels and dimes. These wants, too, are supplied, and excess coppers

are withdrawn from circulation at intervals as deemed expedient.

Replacing Old Bills

BUT, you ask, if the Dominion has nearly four billions of money under its hand, why the Public Service loan? Why increase the public debt? The answer is that most of this treasure does not belong to the Government but to the nation, to banks, insurance companies and other corporations. The Government cannot loot the vaults, dispose of the bullion, the notes and securities. Parliament has enacted laws governing the currency of Canada. There must be a statutory reserve of gold behind Dominion notes. Certain classes of business, notably insurance companies, must deposit securities in a stipulated proportion to their public liabilities. All the Government can do is to use the safety offered by the vaults to store the securities thus deposited.

So far as current Government business is concerned, the one and only function of the treasure house is to provide, smoothly and efficiently, the coin and currency necessary to the daily life of Canadians, to prevent counterfeiting, to maintain the statutes in regard to Canadian currency.

This is no mean task. Consider that the average life of a Dominion note is nine months. At least once a year practically all the paper money, excepting bank notes, must be renewed. The old bills must be identified, destroyed; new bills must be issued in their place.

Circulation of coins must equal public need. All this must be done without error. Every night, when the vaults are dosed, the record of income and outgo must balance. If one gold coin out of millions is lost, the staff is not released until it is found. Excuses have no validity; proneness of human beings to err is ignored.

In Ottawa, the treasure house is known as the Receiver General’s branch of the Department of Finance. Its functions fall naturally into two phases. First, this branch must provide the country with sound currency. This currency must be so foolproof that, without inspection or supervision. it will maintain its value, defy counterfeit, be rugged enough to stand a reasonable amount of rough usage. Once released for circulation, the arm of tiie law is well nigh powerless to protect it. Second, the gold which guarantees the value of the currency and the securities deposited at Ottawa must be guarded.

Maintaining Intrinsic Value

WITH coins, the problem of maintaining value is relatively simple. Canadian coins are made at the Ottawa mint. Experts and specially constructed machines test each coin for weight and perfection of imprint before it is sent to the Receiver General’s office for distribution. Unlike other countries, Canada never writes down the value of her coins because of wear. But “plugged” or clipped coins are redeemable only at seventy-five cents on the dollar.

With the notes, the need of precaution is infinitely greater. A note, after all, is just a piece of printed paper, and ever since paper currency was adopted Governments have had to contend against counterfeiters. Years of study and experimentation have built up an elaborate, unbeatable defense, have entirely banished bogus money. There are in circulation in Canada today twenty million one-dollar bills, eight million two-dollar bills, more than one million twenty-five cent bills commonly known as shinplasters. The shinplaster is an example of how the Receiver General’s brandi satisfies the w'hims of the public. Canadians like these small bills because they can be easily transmitted by mail. Ottawa humors them in this regard. Most of these thirty ‘million notes will be turned back as unfit for circulation within one

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Our National Strong Box

Continued from page 17

year, will have to be renewed. Yet despite the fact that the life of a note is short, that it quickly shows signs of wrear, it may safely be said that every last one of the notes current in this country today is good.

Some notes, of course, never come back. They may be hoarded, burned, destroyed. But Ottawa never writes them off. Accurate records are kept of all the notes outstanding, regardless of the date of issue, and every outstanding note is presumed to be in active service. There are, in circulation, for instance, $27,600 of notes issued prior to Confederation by the old Province of Canada.

Precautions Against Counterfeiting

HPAKE a one-dollar bill of recent printing -*■ and the safeguards against counterfeiting are at once apparent. In each corner is the numeral “one” and the w'ord “one” is printed upon the face of it twelve times. In

the centre is a photograph of King George, and to either side the serial number. To the right is the seal of the P'inance Department. In the lower left corner is the signature of ; C. E. Campbell. Comptroller of Currency, j and opposite, that of Watson Sellar, acting j Deputy Minister of Finance, who signs on ! behalf of the Minister.

But these are only the outward evidences of the safeguards. The note is printed upon : a special paper, made according to a secret ! formula. In the process of manufacturing, j this paper is sprinkled with a rare stain. j Look closely and you will pick out several small green dots. This stain is applied in such a w:ay that it becomes part of the texture. You might wash much of the printing off a Dominion note, but the little green dots w'ould remain to guarantee its identity. The back of each bill is just as intricate in design, in the presence of the green dots, as the front. The building in the centre is the Parliamentary Library.

Precautions are taken from the moment the paper for currency is printed, but the final touches are given in the Receiver General’s office. From the manufacturer, the currency pa¡>er goes to the Canadian Bank Note Company at Ottawa, a private company. Here the major part of the printing is done. Every sheet of paper going into the Bank Note building must be accounted for. Employees are handed stacks of paper. They do not know how many sheets they have received, but their employers do, and each employee, when he has finished his particular job, must return the exact number of sheets that he received. When the notes leave the Bank Note office, they are complete except for the signatures and the Finance Department seal. These are added in the office of the Receiver General, where there are five old-fashioned flat presses. Each machine will print twelve notes at one time, and the five combined will turn out 120,000 per day. When the signatures and the seals have been printed on the notes, each one is examined carefully to make sure of perfection. The finished notes are listed, held in the vaults for several months for seasoning and then, as the need arises, are put into circulation through the chartered banks.

Destroying Old Notes

r"PHE question at once arises: Who deter-*• mines the quantity of money to be issued? The answer is that Parliament has laid down rules which work automatically. On the first $76,000,000 of notes issued, the statutes require a gold reserve of $12,500,000. This $76,000,000 is the nation’s pocket money. It has been fixed on no logical calculation, without rhyme or reason.

Thereafter, Parliament has decreed that all Dominion notes issued direct by the Government must he supported dollar for dollar by gold. Commerce, however, demands a currency capable of quick expansion and contraction. In order to take care of these fluctuations, Parliament passed a statute enabling the Government to “discount” gilt-edge securities presented by the banks. This system works automatically. When business expands and more currency is needed, the banks take securities, in themselves the result of this growth of business, and present them at Ottawa. The Government does not give dollar for dollar, but advances notes up to, say, fifty per cent of the value of the securities. The banks have to pay interest on these advances, and when the need of the additional currency disappears it is promptly returned to Ottawa and the securities released. This system makes our currency elastic, responsive to the needs of commerce and the growth of the country.

If precautions are taken to guard against theft or counterfeiting of notes while they are being made, it is equally essential to prevent them being bootlegged back into circulation after they are condemned. A note leaves the Treasury vaults crisp and new. serves a thousand and one owners, pays thousands of debts. Finally, defaced, sometimes tom, discolored, ragged, it comes back for cancellation. Each cancelled note is checked off the list of currency in circulation. Then the cancelled notes are tied in bundles, cut in half, and the halves sent to different officials. Separate audits are made of the serial numbers. Then a coring machine rips out the signatures, and the “pieces” are taken to a large cylinder. The condemned currency is now cooked, macerated. run through a roller, and emerges as a tough pulp, lit only to be made into cardboard—the ultimate fate of all Dominion notes.

Safeguards Against Theft

TDUT in addition to providing sound cur•*-' rency. the Receiver General’s office must

I guard the national treasure. Three billions I of dollars would go a considerable way to ! relieve the depression for all the thugs and ! safe-blowers on the continent.

The approaches to the Receiver General’s ; offices are through narrow, tiled corridors, ending at iron grille gates. And behind each gate, night and day, is a Royal Canadian Mountie, armed to the teeth, with telephone

and other facilities for calling a regiment of comrades to his assistance.

Yet these gates are but the outworks of the defenses. If these obstacles were surmounted, one would gain access only to the barren offices of the Department. Several windows open out from these offices, each protected by a steel grille which will open only by combination lock. The windows, naturally, are protected by every known burglar alarm device, and the outside of the building is patrolled, day and night, by armed constables.

From the offices to the treasure vaults, the path is barred by a huge safe door. This door opens into a corridor. Three vaults, in turn, open from the corridor, and going down one flight of stairs there is a second corridor and three more vaults.

This main safe door weighs two tons, and the lock bars are three-inch steel shafts of superlative strength. Surmounting the door is a large bell, operated electrically, which gives warning if the door is opened at improper hours or if it is being tampered with. A concealed time clock permits the door to be opened, without warning, only during office hours. The combination to this door is divided between two high officials, both of whom must be on hand to do their part in opening it. The rules of the Department further demand that a third party, an observer, must attend, must accompany all who enter the vaults. This observer makes out a special report of all that takes place. So do the officials whose duties take them into the vaults. The two reports are compared, and any discrepancy is at once investigated.

Once inside the main door, the vaults are reached, but each vault has a strong combination safe door. And when the inside of the vault is exposed, it resembles a tidy locker room in a club. The vault walls are lined with steel lockers, each with a combination lock. Inside these lockers is the treasure. Many of them contain stacks of gold bricks. Others are filled with bags of ' gold coin. Still others are filled with securities.

Daylight never reaches these vaults. There is no egress from them save by the main door. Fresh air is pumped down to the vaults and the corridors. In fact, throughout each working day, two girls are kept constantly at work in each vault. They live, as it were, behind locked doors, and they are witnesses, in addition to the observer and two officials, of all that takes place. The floors, the equipment, are so built that there are no open spaces or cracks into which coins might fall and be concealed.

The responsibility of looking after the treasure, of making sure that all rules are obeyed, all precautions observed, rests upon the shoulders of C. E. Campbell, Comptroller of Currency. He has been twenty years in the Government service, although but forty-five years of age. His signature appears on the notes that he guards. He has but a small staff, but they are experts, and the business of supervising Canada’s currency goes on with methodical accuracy day after day.

Money, wealth—these terms mean little to this band of trained workers. They handle millions in a matter of hours. The sight of gold, of tons of gold, to them is commonplace. Even the business of making money, of handling precious metal, ceases after a time to be romantic. But it is their pride that our currency is sound, is proof against villainy, does its work so well that people rarely wonder where the money in their pockets comes from, or doubt that anyone will accept it in payment of goods or sendees.

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