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Volume 2 - ElectricCanadian.com

Volume 2 - ElectricCanadian.com

Volume 2 - ElectricCanadian.com

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THE BANK PREMISES DEPARTMENT 485which it might make at its own expense benefited the ownermore than itself.The need for a change in policy was pressed very forciblyon the management when the opening of branches in the Westcame to be considered. In that new country premises of anykind were not to be rented; the demand for ac<strong>com</strong>modationfar exceeded the supply, and in addition to an office for thebank, provision must be made for housing the staff. Townswere springing up in a night, and if the bank was to live upto its ideals of national service it must not refuse to providethe banking facilities so strongly in demand. When thedecision was reached to open a branch in what is now thecapital of one of the western provinces, a wealthy local firmundertook to erect a building and to lease it to the bank.In answer to the bank's enquiry how much money they wereprepared to spend upon the building, the firm replied thatit was a matter of indifference to them, but that they wouldexpect a return of eight per cent, per annum on the capitalinvested. The bank had at that time a very vague idea asto the number of branches that it would be necessary to open,but it was apparent that such a rental charge would prove animpossible handicap to its operations at the outset, and wouldbe certain to increase as leases fell in. The probability wasthat the bank's success, if success could be achieved undersuch conditions, would redound almost entirely to the profitof its landlords in the form of higher rentals as valuesincreased.At first glance the only alternative policy seemed to be aninvestment in premises to an extent which would have beenunwise for an institution anxious to keep its funds available forthe development of Canada. On enquiry, however, it wasfound that bonds issued against property from which a steadyin<strong>com</strong>e was derived by way of rentals would find a readymarket. At this period such bonds, maturing in fifteen ortwenty years, could be sold on about a 4^ per cent, interestbasis, so that rents fixed at from five to seven per cent, of the

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