Volume 2 - ElectricCanadian.com

460 HISTORY OF THE BANKof the Bank Act was made by Mr. Z. A. Lash on behalf of theBankers' Section of the Toronto Board of Trade. He reviewedthe manner in which the Act had from time to time enlarged thelist of agricultural and other products, on the security of which,either as raw materials or as finished goods, the banks wereallowed to make advances in order to facilitate their production,manufacturing or marketing. Much of this financing, however,was made possible only by a clumsy, indirect, and largelyfictitious extension of the meaning of the term, "warehousereceipt." He advocated therefore that the banks should begiven a general authorization to assist in financing the productionand manufacturing of natural products, withoutindividual articles being specified, and that if it was necessaryfor any good reasons to except a particular article it should bespecially mentioned. These suggestions were largely embodiedin the revised Act.There was general and in the end successful objection tothe reduction of the existing limit of the authorized note issuebelow the amount of the paid-up capital.At a subsequent conference between the Minister ofFinance and the representatives of the banks held on February11 and 12, the Minister expressed his own views more freely.Dealing with the more important matters referred to above,he stated that he concurred with the bankers in their suggestionfor securing the circulation at par throughout the Dominionof the notes of the various banks, and he indicated that eachbank would be required to make provision to this end. As tothe question of the general security for note circulation, hewas prepared to accept in principle the proposal of the bankersfor the establishment of a redemption fund. He outlinedcertain amendments which he considered necessary in thedetails of the scheme, and in all but one of these the bankr>signified their willingness to concur. Exception was takento his refusal to allow the notes of a suspended bank to bearinterest at six per cent., and the bankers again strongly urgedthat this was necessary to speed up the process of liquidation