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mendation that any necessary special legislation be obtained at the next session of Parliament.

  1. "Having regard to the world-wide financial crisis that has developed upon the outbreak of hostilities in Europe and in view of the action taken by the Imperial Government, to conserve the commercial and financial interests of the United Kingdom, that in case such course should in his opinion be required, he [the Minister of Finance] be authorized to issue Dominion notes to such an amount as may be necessary against such securities as may be deposited by the banks and approved by the Minister of Finance.

  2. "That the Government authorize the chartered banks of Canada to make payment in bank-notes instead of in gold or Dominion notes until further official announcement in that behalf.

  3. "That the Government authorize the several chartered banks of Canada to issue from this date and until further announcement excess circulation to amounts not exceeding fifteen per cent of the combined unimpaired capital and rest or reserve fund of the respective banks as stated in their respective statutory monthly returns."1

Prior to this action, the bills of the Canadian chartered banks were simply notes, redeemable on demand in specie or Dominion notes, very widely used for the purpose of convenience by the Canadian public, and enjoying for many years the unbroken confidence of all users. They were not legal tender, and no person could be compelled to accept them in settlement of a debt or in payment for a purchase. The regulations and legislation of 1914 did not make them legal tender as between individuals; the banks were merely empowered to use them in payment of their own obligations, and thus were in fact relieved from the obligation to redeem them. Had the banks enjoyed a smaller measure of

'It should be noted that this third provision merely extended to the whole of the year a right of issue which the banks already enjoyed between 1st September and the end of February.

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