Volume 2 - ElectricCanadian.com

THE CHARTER 371. The double liability to be enforced twelve monthsafter suspension of payment.2. A call to be made on the shareholders whenever thecapital of a bank is impaired to the extent of twentyper cent.3. The qualification of directors to be increased, and tobear some proportion to the amount of the capital.4. Returns to be made in greater detail.5. The note circulation to be kept within reasonablebounds.6. The minimum for specie reserves to be set at twentyfivepercent, of demand liabilities.7. The maximum division of profits to be set at eight percent, until a Rest of twenty per cent, is accumulated.These resolutions were laid before Sir Francis Hincks assoon as he assumed office, and when Parliament met in February,1870, he had already prepared two bills which in themain met with the approval of the banking community. Oneprovided for a general banking Act, and the other placed thegovernment note issue on substantially the basis that it nowoccupies. Those sections of Gait's Provincial Note Act of1866, providing for the surrender by the banks of their noteissuingpowers in favour of the government issue, were repealed,and henceforth the government notes and the bank-notes wereto occupy their respective fields side by side. The increase inthe amount of the government issue, and the weakening ofthe specie reserve behind it,did not escape the vigilance ofthe financial critics of the day, for it is precisely in these respectsthat the weakness of a government note issue lies. The mostgratifying feature of the proposed changes was the decision ofSir Francis to place all banks on the same footing. In pursuanceof this policy he notified the Bank of Montreal onFebruary 14, 1870, of the Government's desire to terminate,at the end of six months, the arrangement made with it bythe Hon. Alexander T. Gait for the issue and redemption ofthe provincial notes. He also cancelled an agreement entered