Volume 2 - ElectricCanadian.com

514 HISTORY OF THE BANKlosses would be minimized "under a system whereby a fraudcommitted by an officer is virtually a fraud against his fellowofficers, and whereby every officer becomes bound in honourto stop, or make known, any irregularities likely to result inloss."The original proposal made by the officersof the bankhad been that the payments should be one-eighth per cent,per annum permanently in place of the one-half per cent,which they had been accustomed to pay, but the Board ofDirectors thought that the accumulation would be too slow onthis basis. In the scheme which was finally adopted thepayments were placed at one-half per cent., but it was anticipatedthat they would be called for during five years only.On September 26, 1877, the committee appointed toconsider the scheme reported to the Board that they approvedof it, but on further discussion it was referred back to themwith instructions to report again without unnecessary delay.Another director, Mr. William Elliot, was added to the personnelof the committee. This committee made its reporton August 21, 1878, and the draft it submitted was approvedby the Board, which ordered the general manager to have thematter put in regular legal shape forthwith. The printeddraft of the proposed regulations was submitted at the meetingheld the following week, and the Board ordered that it shouldgo into effect on October 1, then approaching.The scheme thus finally adopted provided that everyofficer should give security for an amount to be fixed from timeto time by the directors, the minimum being placed at $1,500,and that the salary of each officer guaranteed by the fundshould on October 1, 1878, and on each succeeding October 1,be reduced by one-half per cent, on the amount for which hewas for the time being guaranteed. Provision was made forthe collection of assessments on increased guarantees, and theextent of the liability of the fund was limited to the amountfor which the defaulting officer was for the time being requiredto find security. The bank undertook to contribute $2,500