Volume 2 - ElectricCanadian.com

etween conditionalOFFICERS' GUARANTEE FUND 511and unconditional bonds," should thereafterbe paid by the bank.By 1875 the pendulum had swung so far in favour ofcorporate bonds as opposed to personal sureties, that theBoard on May 19 in that year accepted a proposal from theCanada Guarantee Company to the effect that, "providedthe company obtains the whole guarantee business of thebank, they will in future transact it at the under-mentionedrates :For the first three years 1%For the fourth and fifth years%otl%and thereafter Mof 1%these rates to be retroactive in regard to officers whose fidelityhas heretofore been guaranteed by the company. In theevent, however, of the company being at any time called uponto pay to the bank losses to the extent of eighty per cent, of thetotal premiums received from its officers, the charge for guaranteewill then recommence at one per cent., with the slidingscale just quoted." After this arrangement was made, theBoard began to look with disfavour on personal surety bonds,and in several instances refused to allow them to be substitutedfor the guarantee of the Canada Guarantee Company.It would seem, however, that the arrangement only appliedto future business, for in June, 1877, the fidelity bonds held bythe bank on behalf of its staff amounted to $886,000, distributedas follows :Canada Guarantee Company $527,500Citizens' Guarantee Company 128,000Private bonds 230,500$886,000About this time (1877) a number of the senior membersof the staff had become imbued with the idea that the bankhad reached the stage when a system of internal mutualguarantees was both feasible and desirable. The by-lawsof the bank had from the beginning provided for the establishmentof such a fund, the numbers of the staff had increased