Sec. 4.

4. Upon an associate ceasing to be an officer of a bank carrying on business in Canada, he shall, at the end of the then cur- When associrent calendar year, cease to be an associate.

ate ceases to be such.

5. The objects and powers of the Association shall be, to Objects of Association. promote generally the interests and efficiency of banks and bank officers and the education and training of those contemplating employment in banks, and for such purposes, among other means, to arrange for lectures, discussions, competitive papers and examinations on commercial law and banking, and to acquire, publish and carry on the "Journal of The Canadian Bankers' Association."

In addition to the powers conferred upon the Association by its Act of incorporation, the Association enjoys important powers under secs. 117 to 124 of the Bank Act: see Chapters XXII. and XXIII., suprq.

The objects and powers of the Association are to be carried out by the executive council: see sec. 16, infra.

6. The Association may from time to time establish in any Sub-sections of Associaplace in Canada a sub-section of the Association under such con- tion. stitution and with such powers (not exceeding the powers of the Association) as may be thought best.

houses.

7. The Association may from time to time establish in any Clearing place in Canada a clearing house for banks, and make rules and regulations for the operations of such clearing house: Provided always, that no bank shall be or become a member of such clearing house except with its own consent, and a bank may after becoming such member at any time withdraw therefrom.

2. All banks, whether members of the Association or not, Regulations. shall have an equal voice in making from time to time the rules and regulations for the clearing house; but no such rule or regulation shall have any force or effect until approved of by the Treasury Board.

19-BANK ACT.

Sec. 7.

Voting powers.

Officers.

Officers

of existing continued.

association

General meetings.

The rules and regulations made by virtue of this Act in respect to clearing houses are set out in Chapter XXVIII., infra. See also sec. 16 of the Act.

8. Members of the Association shall vote and act in all matters relating to the Association through their chief executive officers. For the purpose of this Act the chief executive officer of a member shall be its general manager or cashier, or in his absence the officer designated for the purpose by him, or in default of such designation the officer next in authority. Where the president or vice-president of a member performs the duties of a general manager or cashier he shall be the chief executive officer, and in his absence the officer designated for the purpose by him, and in default of such designation the officer next in authority to him. At all meetings of the Association each member shall have one vote upon each matter submitted for vote. The chairman shall, in addition to any vote he may have as chief executive officer or proxy, have a casting vote in case of a tie. Associates shall have only such powers of voting and otherwise taking part at meetings as may be provided by by-law.

9. There shall be a president and one or more vice-presidents and an executive council of the Association, of which council five shall form a quorum unless the by-laws otherwise provide.

10. The persons who are the president, vice-presidents and executive council of the voluntary association mentioned in the preamble at the time this Act is passed shall be the president, vice-presidents and executive council respectively of the Association until the first general meeting of the Association or until their successors are appointed.

11. The first general meeting of the Association shall be held during the present calendar year at such time and place and upon such notice as the executive council may decide. Subsequent

general meetings shall be held as the by-laws of the Association Sec. 11. may provide at least once in each calendar year.

12. At the first general meeting and at such annual meeting Election of officers. thereafter the members of the Association shall elect a president, one or more vice-presidents, and an executive council, all of whom shall hold office until the next general meeting or until their successors are appointed.

officers.

13. The president, vice-president and executive council shall Executive be chosen from among the chief executive officers of members of the Association.

council.

14. Unless the by-laws otherwise provide, the executive coun- Executive cil shall consist of the president and vice-president of the Association and fourteen chief executive officers, and five shall form a quorum for the transaction of business.

15. Each member and associate shall from time to time pay Dues. to the Association for the purpose thereof such dues and assessments as shall from time to time be fixed in that behalf by the Association at any annual meeting, or at any special meeting called for the purpose, by a vote of not less than two-thirds of those present or represented by proxy.

Association.

16. The objects and powers of the Association shall be carried By-laws out and exercised by the executive council, or under by-laws, governing resolutions, rules and regulations passed by it, but every such by-law, rule and regulation, unless in the meantime confirmed at a general meeting of the Association called for the purpose of considering the same, shall only have force until the next annual meeting, and in default of confirmation thereat shall cease to have force. Provided always, that any by-law, rule or regulation passed by the executive council may be repealed, amended,

Sec. 16.

Power of

executive to

varied or otherwise dealt with by the Association at any annual general meeting or at a special general meeting called for the purpose.

2. For greater certainty, but not so as to restrict the generality pass by-laws. of the foregoing, it is declared that the executive council shall have power to pass by-laws, resolutions, rules and regulations, not contrary to law or to the provisions of this Act, respecting,— (a) lectures, discussions, competitive papers, examinations; (b) the journal of the Association;

Approva o

Treasury
Board.

R.S.C. c. 118

(c) the sub-sections of the Association;

(d) clearing houses for banks;

(e) general meetings, special and annual, of the Association and of the executive council, and the procedure and quorum thereat, including the part to be taken by associates and their powers of voting;

(f) voting by proxy at meetings of the Association and of the executive council;

(g) the appointment, functions, duties, remuneration and

removal of officers, agents and servants of the Association. 3. No by-law, resolution, rule or regulation respecting clearing houses, and no repeal, amendment or variation of or other dealing with any such by-law, resolution, rule or regulation shall have any force or effect until approved of by the Treasury Board.

As to the objects and powers of the Association, cf. secs. 5, 6 and 7 of the Act.

17. The provisions of The Companies Clauses Act, being chapter 118 of the Revised Statutes [1886], shall not apply to the Association.

The Companies Clauses Act is now Part II. of the Companies Act, R.S.C., 1906, c. 79.

CHAPTER XXVIII.

THE CLEARING HOUSE.

The following authorities may be usefully consulted as to the history and operation of clearing houses: Jevons, Money and the Mechanism of Exchange, Cannon's History of Clearing Houses (reviewed by J. T. P. Knight in an article in 10 Journal C.B.A. 40 on the history and operation of the Montreal Clearing House), Watson's Law of the Clearing House (where the American cases are exhaustively collected). See also Boddington v. Schlencker, 1833, 4 B. & Ad. 752, and the special verdict in Warwick v. Rogers, 1843, 5 M. & G. at p. 348, as to the early practice in the London clearing house, and cf. Hart, pp. 324, 327, where the rules of the London clearing house are set out. In Banque Nationale v. Merchants Bank, 1891, M.L.R. 7 S.C. 336, the beginning of the Montreal Clearing House is described.

houses.

In Canada clearing houses for banks are governed by the Power to Act of incorporation of the Canadian Bankers' Association (see establish Chapter XXVII., supra). By that Act the Association may clearing from time to time establish in any place in Canada a clearing house for banks, and make rules and regulations for its operations: provided always, that no bank shall be or become a member of such clearing house except with its own consent, and a bank may after becoming such member at any time withdraw therefrom, (sec. 7). It is further provided that all banks whether members of the Association or not, shall have an equal voice in making from time to time the rules and regulations for the clearing house, but no such rule or regulation shall have any force or effect until approved by the Treasury Board (sec. 7). The powers of the Association are to be exercised by its executive council, which is specifically authorized to pass by-laws, resolutions, rules and regulations not contrary to law, or to the provisions of the Act, respecting clearing houses for banks, but no such by-law, etc., and no repeal, amendment, or variation of or other dealing with, any such by-law, etc., is to have any force or effect until approved of by the Treasury Board (sec.