Volume 2 - ElectricCanadian.com

448 HISTORY OF THE BANKconcessions made in accepting the provisions for a governmentnote circulation, the banks working under the Act wereexempted not only from the tax on note circulation, as underthe Act of 1870, but also from the obligation to hold anyportion of their capital in the form of government debentures.Instead of the individual banks being left to apply to theGovernor-General for an extension of their charters, the newAct brought all the banks mentioned in a schedule attachedto it under its provisions as from the end of the session ofParliament held in 1872, that is, from June 14, 1872.Certain clauses, however, particularly those dealing withthe powers of the banks and the penalties for any breach ofthe provisions of the Act, went into force on July 1, 1871.The sections of the Act dealing with internal regulations,especially such part of them as had to do with the subscription,payment and transfer of shares, and the election and powersof directors, were such as were up to this time usually incorporatedin individual charters. The powers conferred uponthe banks by the Act of 1867 were continued and amplified.The older legislation with respect to bills of lading and warehouseand other receipts was repeated in the main, but with1some important differences. Such documents might beacquired by the bank as collateral security, not only as in thepast "for the due payment of any bill of exchange or notediscounted by such bank in the regular course of its bankingbusiness," but also "for any debt which may become dueto the bank under any credit opened or liability incurred bythe bank for or on behalf of the holder or owner of such billof lading, specification or receipt, or for any other debt tobecome due to the bank." Previously such security mightbe acquired only at the time when the debt to the bank wasnegotiated or contracted, but it now became lawful to takeit by virtue of an understanding entered into at such timethat it would be transferred, and the relative bill, note ordebt might be renewed or the time extended without affecting'See pages 420 to 423.