Volume 2 - ElectricCanadian.com

1867 TO 1901 79fund, from which the sum of $500,000 has therefore been withdrawnand applied as follows:Appropriated for bad and doubtful debts. . . . $350,000Placed at credit of Contingent Fund Account 150,000$500,000"The policy of contraction observed by all prudent businessmen has largely diminished the volume of commercialtransactions,while excessive competition in banking and thenecessity for extremely cautious management have materiallyaffected the earnings. There are, however, indications ofimprovement, and the position of the bank fully warrantsthe directors in stating that when business becomes sufficientlyhealthy and active to afford safe and profitable employmentfor money, every reasonable expectation of the shareholders willbe realized."Account on thisThe whole of the sum transferred to Contingentoccasion was required during the next twoyears, and an additional amount of $175,000 had to be appropriatedin 1881 for the same purpose.At this period it was the practice of the Canadian banksto allow important customers to print on their cheque formsthe words "payable at par at any branch," and early in the"seventies" a firm of private bankers who kept their accountwith the Molsons Bank had been given the privilege of printingacross their cheques, "Payable at par at any branch of TheCanadian Bank of Commerce in Canada." The privatebankers subsequently failed just about the time that a largecheque of theirs on the Molsons Bank was cashed by theHamilton branch of The Canadian Bank of Commerce. Thisbank then realized that its action in cashing a cheque thuscrossed might, in the event of the failure of the drawer,be held to constitute legal payment, and that the bank mightthus lose its recourse against the endorser. Fortunately in thisparticular case the question did not arise, but ever since thebank has taken pains to see that such cheques are crossed"negotiable without charge" instead of "payable at par."