This section of the book is from the "Canadian Banking Practice" book, by John T. P. Knight.
Question 40.— Canadian bank notes are only payable in gold or legal tender at the place of issue (usually the head office of the bank), whereas, by section 55 of the Bank Act, is it not intended that these shall be so payable at the several points therein?
Answer.—It is the duty of the bank to pay its notes in gold or legal tenders at the place of issue.
As far as section 55 is concerned, it is, of course, clear that a bank must redeem or pay its bills in gold or legal tender notes at its various redemption agencies. There is this distinction, however, to be observed, that if a bank should not have established such agencies, while it would have contravened the, law and become liable to the penalties imposed under the Act, the absence of an agent to whom its notes could be presented for payment, would scarcely constitute dishonour of the notes.
The full answer to another question: What obligation is a bank under with regard to the payment or redemption of its note issues would be as follows:—A bank is bound to take such notes in payment of debts at any of its offices; it is bound, under penalties, to provide redemption agencies at certain points named in the Act, and at such agencies to pay any notes presented in gold or legal tender; and it is bound to pay in gold or legal tenders all notes presented at the place at which they are by their terms made payable. There are other obligations following on failure, etc., which need not be discussed.