Volume 2 - ElectricCanadian.com

470 HISTORY OF THE BANKof the Minister of Finance, is called upon to prepare an annuallist of not fewer than forty persons competent to act as auditors.From this list the shareholders have to select one or moreauditors to inspect the books of the bank. The Act confersadequate authority on the auditors to make the necesssaryinspection, and prescribes the nature of the information to begiven in their report, which is to be submitted at the annualmeeting of the shareholders. The Minister of Finance mayappoint auditors when the shareholders of a bank omit to do so,and may also call for special reports. In response to theprolonged demand for direct assistance to farmers, as distinguishedfrom dealers in farm products, the banks wereauthorized to lend money to a farmer upon the security ofthe threshed grain grown upon his farm. 1An interesting provision of the Act, dating back to 1899,and enlarged in 1904, 2 allows a Canadian bank to issue notes forcirculation in any British possession other than Canada, unlessprohibited by local law. These notes may be issued in poundsor dollars, but they may not be re-issued in Canada. Animportant new provision was the establishment of the "centralgold reserves" to enable the banks at any period of the year toincrease their note issues beyond the statutory limit of unimpairedpaid-up capital. The fund is in charge of four trustees,three appointed by the Canadian Bankers' Association andthe fourth by the Minister of Finance, and the Association isempowered to make regulations and by-laws for its custody andmanagement. Deposits in the reserves consist of current goldcoin or Dominion notes, and may be made or withdrawn atany time, provided in the case of withdrawals that the balanceat the credit of the withdrawing bank is not reduced below theamount of its excess note issues then outstanding.*A further step in the same direction was taken in 1916, when an amending Act(6-7 Geo. V, c. x.) was passed, authorizing a bank to lend money to a fanner or to anyperson engaged in the raising of live stock upon the security of his stock, and prescribingthe form of the security and the powers given over it hi the event of non-payment ofthe loan.See 62-03 Viet., 1899, c. xiv., and 4 Edward VH, 1904, c.iii.