6. Application Of The Bank Act (Sections 3-7)

The provisions of the Act apply to the following banks:

Name of Bank

The Bank of Montreal ................

The Bank of Nova Scotia .............

The Bank of Toronto..................

The Molsons Bank.....................

La Banque Nationale...................

The Merchants Bank of Canada..........

La Banque Provinciale du Canada.........

The Union Bank of Canada..............

The Canadian Bank of Commerce.........

The Royal Bank of Canada..............

The Dominion Bank....................

The Bank of Hamilton..................

The Standard Bank of Canada...........

La Banque d'Hochelaga.................

The Bank of Ottawa....................

The Imperial Bank of Canada............

The Home Bank of Canada..............

The Northern Crown Bank..............

The Sterling Bank of Canada............

The Weyburn Security Bank.............

The Bank of British North America.......

Chief Office of Bank

Montreal

Halifax

Toronto

Montreal

Quebec

Montreal

Montreal

Winnipeg

Toronto

Montreal

Toronto

Hamilton

Toronto

Montreal

Ottawa

Toronto

Toronto

Winnipeg

Toronto

Weyburn

London, Eng.

The Act extends these charters from July 1, 1913, to July 1, 1923, and makes special provision for the Bank of British North America, which still operates under its original royal charter.

7. Incorporation Of Banks (Sections 8-12)

The conditions under which a new bank may be organized and the procedure necessary are clearly set forth. The first step is to obtain an Act of Incorporation by means of an application signed by at least five responsible men, known as provisional directors, who are able to satisfy the Parliamentary Committee on Banking and Commerce that their project is a genuine one, that they are fully aware of the responsibility of their undertaking, and that they have the ability and backing necessary to carry out the organi-zation of a bank successfully. If the committee reports favorably, letters of incorporation are granted, and, after ten days' public notice, the provisional directors may advertise for public subscriptions and cause stock books to be opened. No bank, however, can be incorporated with a capital of less than $500,-000, divided into shares of the par value of $100 each.

8. Organization Of Banks (Sections 13-17)

If within a year the sum of not less than $500,000 of the capital stock of the bank has been bona fide subscribed, and not less than $250,000 paid in and deposited with the Minister of Finance, the provisional directors may, by public notice published for at least four weeks, call a meeting of the subscribers for the purpose of organizing the bank. At this meeting the subscribers shall elect five or more qualified directors to replace the provisional directors, determine the date of the annual meeting, etc. A certificate of the

Treasury Board 1 permitting the bank to commence business may now be applied for, but, before issuing such a certificate, the Treasury Board must be satisfied :

1. That the payments and subscriptions are all genuine and in form;

2. That the deposit of $250,000 with the Minister of Finance has been made and is still in his hands;

3. That the directors are qualified and have been regularly elected;

4. That the expenses of incorporation and organization are reasonable;

5. That all other requirements have been complied with.

If everything is found satisfactory a certificate will then be granted and the deposit of $250,000 returned, less a reduction of $5,000 as the initial payment on account of the Bank Circulation Redemption Fund (see Section 64). Then, and not until then, is the new bank able to issue notes, open branches and begin the general business of banking.

9. Refusal Of Certificate

If, however, the certificate of the Treasury Board is not obtained within one year from the date of the passing of the Act of In1 The Treasury Board exercises important functions under the act, and is frequently referred to. The Minister of Finance and Receiver-General is the chairman of the board, which consists of four other ministers belonging to the King's Privy Council for Canada, nominated from time to time by the Governor-in-Council. The Treasury Board acts as a committee of the Privy Council on all matters referring to finance and public accounts, and has power to call for any information it may require from corporations and persons, etc., who are bound by law to furnish the same to the government.

corporation, all the rights and privileges granted thereunder cease, and provision is made for the equitable liquidation of any bank so unsuccessful. The severe penalties attached to any infraction of the regulations covering the incorporation and organization of banks are set out in Sections 131 and 132.

10. By-Laws (Section 18)

The shareholders may pass by-laws regarding the following matters: the date of the annual general meeting at which shareholders elect directors; regulations (subject to limitations mentioned in Act) as to proxies; the number, quorum, qualifications, remuneration, etc., of directors ; limits of loans or discounts to directors or to any one person, firm or corporation; authority to contribute to guarantee and pension funds, etc. A copy of all the by-laws of a bank must be sent to each shareholder at the end of each fifth year, beginning December 31, 1913.

11. Board Of Directors (Sections 19-28)

The stock, property, affairs and concerns of the bank are managed by a board of directors who are to be elected annually and shall be eligible for re-election, subject, however, to the following provisions:

Each director shall hold stock of the bank as absolute and sole owner in his individual right, on which not less than from $3,000 to $5,000 has been paid up, the amount varying according to the paid-up capital of the bank. This amount, however, may be increased by by-law.

The majority of the directors must be British subjects living in Canada.

The method by which directors shall be elected is provided for, also the manner in which directors shall elect the president, vice-president and fill vacancies on the board.