Volume 2 - ElectricCanadian.com

468 HISTORY OF THE BANKquarry were added to the list of those mentioned in thesesections.By an amendment to the Bank Act passed in 1905 1 thelimit of ten placed upon the number of directors of a bank wasremoved. The rapid growth of the Canadian banks had madethis change desirable.It will be recalled that at the time of therevision of 1890 the Minister of Finance had proposed to reducethe limit of authorized note issue below the amount of paid-upcapital, because of the wide margin that existed between theactual and the authorized amount of note issue. 2 Elevenyears later, conditions in this respect had greatly changed andvindicated the action of the bankers in 1890 in opposing theMinister's views. Commencing about 1901, the growth inthe volume of business in Canada caused the note circulationat certain seasons of the year to be with difficulty kept withinthe statutory limit. The expedients to which the banks, andThe Canadian Bank of Commerce in particular, were forced,in order not to violate the law in this respect, have beenreferred to on several occasions in this volume. 3The first relieffrom this difficult situation was obtained in 1908, when to meetthe need for a temporary increase of the note issue during theseason of moving the crops, each bank was authorized duringthe months of October, November, December and Januaryto issue notes in excess of paid-up capital to the extent offifteen per cent, of its combined unimpaired paid-up capital andreserve fund. 4 These excess issues are subject, while they areoutstanding, to the payment of interest to the DominionGovernment at a rate to be fixed by the Governor in Council,with a maximum of five per cent, per annum. 6The revision of 1900 had extended the charters of thevarious banks until July 1, 1911. As the Government was notprepared to take up the revision of the Bank Act during the4-5 Edward VII, 1905, c. iv.'See page 456.See chapter IV.By 7-8 Edward VII, 1908, c. vii.'The maximum rate of five per cent, has always been chargedon these note issues.