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Volume 2 - ElectricCanadian.com

Volume 2 - ElectricCanadian.com

Volume 2 - ElectricCanadian.com

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DEVELOPMENT OF CANADIAN BANKING 427provision, which now appeared for the first time, restrictedthe debts due to the bank to three times the paid-up capitalstock. The capital had to be employed in discounting inaccordance with recognized banking principles, and in buyingand selling bills of exchange and other negotiable securitiesand bullion.The bank might sell personal pledges lodged with it assecurity for loans. Another new provision was that so muchof the capital stock as was not immediately required forbanking purposes might be invested in reliable public securitiesor exchanged for provincial notes. 1The minimum denominationof the bank-notes to be put into circulation was fixed atfive shillings. The bill also granted a monopoly of bankingprivileges in the province for ten years, except in the event ofa provincial bank being established. The bank was to besubject to inspection by persons appointed by the Government,and failure to conform to the conditions of the charter wouldinvolve its forfeiture. Such clauses as those relating to thevotes of shareholders, the bonds to be furnished by the cashier,and the adoption of by-laws by the shareholders were virtuallythe same as in the charter of the Bank of New Brunswick.Under normal conditions the shareholders were subject tosingle liability, but it was provided that in case of the windingup of the bank, either at the end of the charter or in consequenceof its forfeiture, the shareholders at the time would beliable for all the debts of the bank in proportion to the sharesheld by them. The Lieutenant-Governor in Council mightincrease the capital stock of the bank, by additional sums of25,000, up to a limit of 100,000. The shares were transferableonly on the books of the bank, and after the dischargeby the shareholder of all debts due to the bank. The statementsto be submitted to the shareholders at the annualmeeting, and the copies furnished to the Lieutenant-Governor,were the same as those prescribed for the Bank of New Brunswick.Should the bank not redeem its notes or other obligations1See Vol. I, p. 30, and Appendix I to that volume.

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