Volume 2 - ElectricCanadian.com

420 HISTORY OF THE BANKIn 1859 an Act was passed, entitled "An Act GrantingAdditional Facilities in Commercial Transactions." 1This hada very important bearing on the future development of bankingin the Dominion of Canada, as it marked the first step towardsthe enactment of what are known as the "pledgesections" ofthe present Bank Act. Under the provisions of these sectionsa large part of the grain, lumbering and manufacturing businessof the country is now carried on, to an extent which constitutesone of the outstanding characteristic features ofCanadian banking practice at the present day. Yet, as willbe gathered from the title of the Act referred to above, theprimary aim of the legislation was not to facilitate banking,but to provide for a need felt by the business community.Only incidentally was banking affected, as the powers conferredby the Act applied alike to individuals and to banks. It isimportant that this aspect of the subject should be borne inmind, as it is often taken for granted that the legislation wasenacted at the instance and for the benefit of the banks.Perhaps no class in the community derives more benefit fromthese provisions than does the farmer, as through them he isenabled to sell his grain, and often his cattle, for cash insteadof on credit.While a bill of lading and a warehouse receipt are in somerespects similar documents, the legal effect of the two underthe common law, prior to the enactment of the statute of 1859,was very different. By the custom of merchants the transferof a bill of lading to another person transferred also theownership of the property mentioned in it, but this was notthe case with a warehouse receipt. To quote the late Z. A.Lash, K.C.: 2"The Act of 1859 referred to provided that, notwithstandinganything to the contrary in the charter or Act of incorporationof any bank in the province, any bill of lading, or any>Viet.. 1859, c. xx.*"Warehoute Receipt*, Billt of Lading and Securities under Sec. 74 of the Bank Adof 1890." by Z. A. Lah, K.C., LL.D., in Journal of the Canadian Banker*' A9ociation(Sept., 1894), II, 54.