Volume 2 - ElectricCanadian.com

DEVELOPMENT OF CANADIAN BANKING 453restricted to multiples of $5, in order to prevent the use ofnotes for such sums as $6 and $7, which had been issued bycertain banks in order to overcome any disadvantage arisingfrom the monopoly of issuing notes for sums smaller than$4 given to the Government in 1870. The duration of a proxyto vote at meetings of shareholders was fixed at three years.The old free banking Act of 1850, as it survived in the Con-1solidated Statutes, was formally repealed; its practical effecthad ceased long before. Any person receiving a paymentfrom a bank might on request obtain up to fifty dollars inDominion notes of $1 or $2.During the decade preceding 1880 the limit placed uponthe issue of Dominion notes, covered only partly by a speciereserve, had been increased from nine to twelve million dollars*with the proviso that a specie reserve of not less than fiftyper cent, should be held against issues over nine milliondollars. 2 In 1880 the Minister of Finance proposed a furtherextension to twenty millions with a reserve of at least fifteenper cent, in gold, ten per cent, in gold and securities of theDominion of Canada guaranteed by the British Government,3and seventy -five per cent, in Dominion of Canada debentures.This measure became law.By an Act passed in 1883 4 heavy penalties were imposedfor an over-issue of note circulation. The amount of smallDominion notes which might be legally demanded by anyperson receiving a payment was increased from fifty to sixtydollars, and notes of the denomination of $4 were includedin the provision. The banks were called on to supply in theirmonthly returns information as to the amount of their Rest or1 It had already been partially repealed by the Provincial Note Act of 1866(29-30 Viet. c. x).JBy 38 Viet., 1875, c. v.*4S Viet., 1880, c. xiii. The reserve requirements previously in force were onehundred per cent, in specie against issues over twelve millions; fifty per cent, in specieagainst issues over nine and up to twelve millions; and twenty per cent, in specieagainst issues below nine millions, the balance of the total issue to be covered bydebentures of the Dominion of Canada.446 Viet., 1883, c. xx.