As the book opened with a description of the proceedings necessary in the organization of a new bank and its commencement in business, it will be concluded with a description of the process prescribed for winding up or liquidating a bank that confesses incompetency or insolvency.

Section 117 of the Bank Act says: "The (Canadian " Bankers') Association shall, if a bank suspends pay-" ment in specie or Dominion notes of any of its liabilities " as they accrue, forthwith appoint a curator to super-" vise the affairs of such bank."

Subsection 2 empowers the Association to at any time remove the curator and appoint another person to act in his stead.

Functions Of The Curator

The curator's powers and duties are thus denned: " The curator shall assume supervision of the affairs of " the bank, and of all necessary arrangements for the " payment of the notes of the bank issued for circulation, " and at the time of his appointment, outstanding and " in circulation. The curator shall generally have all " powers and shall take all steps and do all things neces-" sary or expedient to protect the rights and interests " of the creditors and shareholders of the bank, and to " conserve and ensure the proper disposition, according " to law, of the assets of the bank; and for the purposes " of this section he shall have full and free access to "all books, accounts, documents and papers of the bank."

To keep a bank going the owners must do two things: observe the law of the land and meet all the bank's liabilities "as they accrue" in specie or Dominion notes. If the law of the land, as regards banking, is violated, the bank will be liable to have its charter revoked; and if it fails to meet its liabilities as they accrue, that is "suspension."

It should be observed here that suspension and winding-up are two different things. A bank may suspend payment, but if the suspension does not amount to "ninety days consecutively, or at intervals within twelve "consecutive months," it may resume business and retain its charter. In actual practice it is a very difficult thing, indeed, to keep a bank from being wound up once it has suspended payment. The damage to its credit is all but irreparable. If the suspension continues for more than three months in any year, that constitutes cause for winding up. The course of events may be thus explained:At suspension the supervision of affairs is vested in the curator as appointed by the Canadian Bankers' Association. The board and general management having confessed incompetency by acknowledging their inability to meet the bank's obligations, the bank's affairs are put under the control of the curator, who acts on behalf of the creditors and stockholders.

How Winding Up Can Be Avoided

Then the stockholders have three months in which to save the bank. If they can in that time perfect arrangements whereby the bank can resume business and meet all obligations as they accrue, or if they can arrange for a sale of the bank "en bloc" to another bank, fully protecting the creditors, a winding up order is avoided. In the first case, the owners resume full possession of the business, and in the second the estate, if any, is divided among the stockholders.

But when suspension runs beyond the prescribed limit the creditors take full possession and the curator gives place to the liquidator. It may be that the same man will act as curator and afterwards as liquidator. The point is that during suspension creditors and stockholders have a joint control; but afterwards creditors are in full control.