Question 37.— Is the custom of agencies of Canadian banks in the United States of discounting the notes of their own banks, in contravention of section 56 of the Bank Act?

Answer.—We do not think that for a foreign office of a Canadian bank to redeem its own notes at a discount is a contravention of section 56. We think it improbable that the section would be held to apply outside of Canada. There are difficulties in its application there respecting questions of legal tender, exchange, etc., that would lead to this conclusion.