As a result of public feeling, and of a persistent anti-bank agitation which had been going on in some of the newspapers, the whole banking system was subjected to very close and searching criticism. Many radical changes were proposed, some of them meeting with strong support both in Parliament and in the country. But while some important alterations were embodied in the new act, there was no real departure from the principles of the es tablished system, which may be said to have encountered successfully the hostile criticism to which it was exposed. The new act (3-4 George V, Chap. 9) came into force on 1 July 1913 and will expire on 1 July 1923. Until that date it is the charter of every Canadian bank (except a couple of savings banks in the prov ince of Quebec), and under it every bank has exactly similar rights, privileges and limita tions*: the Bank of Montreal, with paid-up capital and reserve fund of $32,000,000, and the Weyburn Security Bank, which has a paid-up capital and reserve fund of $535,320, standing on precisely the same legal footing. The mini mum subscribed capital necessary before a new bank can begin business is $500,000, of which at least $250,000 must be actually paid up in cash and deposited with the Minister of Fi nance_ After the bank is in operation the shareholders may, by passing a by-law at a general meeting, and afterward obtaining the approval of the Treasury Board, increase or reduce the capital stock, but it must not be any part of it without being authorized to do so by the Bank Act or by some other act, nor may he use foreign words equivalent to ((banker° or ((private banker.° There are now very few private hankers in Canada, and their operations are on quite a small scale. The fol lowing tables give the principal items in the combined balance sheets of the banks at dif ferent dates since Confederation.
reduced below $250,000. Before a bank may begin business it must obtain from the Treas ury Board a certificate that it has complied with all the requirements of the law, this cer tificate to be obtained within one year of the date of the act of incorporation. The Treasury Board is the financial committee of the Privy Council for Canada, composed of five Cabinet ministers, with the Minister of Finance as chairman. No person or corporation may use the word or the words ((savings hank," 'banking company,"banking house," banIcing association° or Thanking institute," or any word or words of import equivalent thereto in any foreign language, to describe his business or The chief place of business of most of the banks is at either Montreal or Toronto, only three having their head offices west of Ontario. The right to establish branches is specifically granted, and most of them have numerous branches, several being represented in nearly every Canadian town of any importance. The Bank of Montreal, for instance, has about 174 branches in Canada and 10 elsewhere, the Canadian Bank of Commerce about 374 in Canada and 7 elsewhere, and the Royal Bank of Canada about 366 in Canada and 65 else where. Several have branches or agencies in London and some of the more important cities in the United States, those represented in New York being among the largest dealers in for eign exchange. Newfoundland is entirely de
pendent for its banking facilities upon the Canadian banks, which have some 28 branches there, while a large proportion of the whole banking business of the West Indies, including Cuba, Porto Rico, British Guiana, etc., is done by two Canadian banks— the Royal Bank of Canada and the Bank of Nova Scotia,— which have between them about 70 branches in the West Indies and adjoining districts. The fore going tables show that the 21 banks in existence at the end of 1917 had 3,100 branches, an average of 148 branches per bank. Each bank is administered by directors, not less than five in number, who are elected annually by the shareholders, each share carrying one vote. Directors must each hold paid up stock of from three to five thousand dollars, according to the total amount of the capital stock; the majority of them must be British subjects domiciled in Canada. A general meeting of shareholders must be held annually at which directors must submit a clear and full state ment of the affairs of the bank. Statements of assets and liabilities (in a prescribed form) must be sent monthly to the Minister of Fi nance, by whom they are published in the Canada Gazette. Two or three other returns are also required, and the Minister of Finance has power to call for special information from any bank. The banks have long made a prac tice of having all their branches and depart ments inspected at least once a year by their own inspectors, but until 1913 no system pre vailed either of audit by the shareholders or of examination by the government. In that year, in deference to popular sentiment, provision was made for an audit by a person or persons appointed by the shareholders of each bank in general meeting, such persons being selected each year from a fist persons (not less than 40 in number) chosen by ballot by the general managers of all the banks at a meeting called annually for that purpose, and approved by the Minister of Finance. Every such auditor has a right of access to the books and accounts, cash, securities and documents of the bank, and is entitled to require from the directors and officers such information and explanations as may be necessary for the performance of his duties. The auditor must certify to the correctness of the statement presented to the annual general meeting of shareholders, and of any other statement which the shareholders may by by-law require. Provision is made for special audits at the direction of the Min ister of Finance. The practical working out of this audit system is still on trial, but it may be anticipated that at the next revision of the Bank Act the selection of the panel of auditors will be removed from the general managers, the persons against whom the audit is more particularly directed, that more practical op portunity for independent selection will be given to the shareholders, and that a restriction will be placed on the number of banks for which any one person (or members of the same firm) may act as auditor.