This section of the book is from the "Canadian Banking Practice" book, by John T. P. Knight.
Question 594.— Would section 68 of the Bank Act permit the taking of a mortgage on a vessel for a loan made simultaneously ?
Answer.—The section referred to authorizes a bank to take a mortgage " as additional security for a debt contracted to the bank in the course of its business." The latter part of section 64 declares that the bank " shall not either directly or indirectly lend money on the security of any ships." It is clear that the power given in section 68 cannot be used in contravention of section 64, and if the mortgage were given simultaneously with the loan it would require very special circumstances to convince the court that sec. 64 had not been contravened.