This section of the book is from the "Canadian Banking Practice" book, by John T. P. Knight.
Question 598.— A bank advances money to buy hides, taking security on the same under section 74; the bank and the customer agree that the latter may manufacture them into gloves without prejudice to the bank's security. Will the bank's security cover the gloves while in process of manufacture or after completion, or would it be necessary to take a chattel mortgage to protect the bank?
Answer.—We think that under section 76 of the Bank Act an assignment or security under section 74 would continue to cover the goods described in it during the process of manufacture, and would hold the manufactured goods after the completion of the same.
A chattel mortgage would not improve the matter unless there were some irregularity in the security under section 74; the assignment under section 74 could only in the case mentioned be attacked on the score of its validity under the Act, and in a simple case such as you put that risk should amount to nothing.