July 21, 1903

LIB

Joseph Henri Napoléon Bourassa

Liberal

Mr. BOURASSA.

I would not like my hon. friend to go so far as that in the interpretation of what I said. What I said was that, as the law stands now and as the practice of the brokers is, it may be that in times of a crisis they are led and almost forced to speculate against their clients. I never said that that was the object of Senator Forget or any other broker under ordinary circumstances.

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CON

Frederick Debartzch Monk

Conservative (1867-1942)

Mr. MONK.

I am very glad to hear my hon. friend say that, because the senator- whom I am not specially charged to defend, but who is an old friend of mine-is a man who occupies a very high position in the city of Montreal. 'He is a governor of our university, and a benefactor of that university, which stands in great need of assistance. He occupies a very high position in respect to all our philanthropic works in the city of Montreal, and I have no hesitation in saying that he generally enjoys the confidence of every class of the community. My hon. friend (Mr. Bourassa) is aware of that. I may say also that as one of our French Canadian fellow-citizens who have entered the world of finance and begun at the foot of the ladder, he has attained a position unattained previously by any of his compatriots, and which has reflected a great deal of credit, not only on himself, but on his fellow French Canadians.

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L-C

Samuel Hughes

Liberal-Conservative

Sir. SAM. HUGHES (Victoria).

Reference has been made by some of the speakers to speculation in respect to land in Manitoba and the North-west, and I wish to say a word as to that. I do not refer to any boom in Winnipeg or Toronto or any city, because lands rise and fall in value in these citie^ regularly. But I want to point out that the records of thirty years in the city of Winnipeg concerning the lands in Manitoba and the North-west show that there has been a steady increase in the price of these lands, and that there never has been any set back in that price. These records show on the average a steady increase of 12 per cent in the value of farm lands throughout Manitoba and the North-west.

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LIB

Robert Holmes

Liberal

Mr. ROBERT HOLMES (West Huron).

I have no desire to follow the member for Labelle (Mr. Bourassa) through his lengthy and eloquent address, but I simply rise for the purpose of endorsing generally what he

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7039 COMMONS 7040

has said. The argument has been advanced by the member for Toronto (Mr. Osier) that because some people have a tendency to do certain evil acts, there is no use in passing legislation to prevent them from committing these acts. If that argument were followed to its logical conclusion, we might as well do away with all legislation. Some people in their nature have a disposition to steal, and, per se, you should not legislate against stealing ; some people in their nature have a disposition to commit murder, and therefore, according to the logic of the hon. member (Mr. Osier), there is no use putting a law in the statute-book against murder. There are a good many people who are disposed to do immoral things, and according to the logic of the argument of the hon." member for Toronto, you should not legislate against these things. That is surely not a very logical argument, but coming from a man who is a stock broker, I am not surprised at It at all. I believe, Mr. Speaker, that the member for Labelle has performed a public service in calling the attention of parliament to this evil. If it is not an evil, then there are a great many people throughout the Dominion who are labouring under a misapprehension, because there are a great many people who are under the impression that speculation on margin, as we ordinarily understand the term, is gambling pure and simple. A great many people are also under the impression that it is contrary to good morals to tolerate this spirit of gambling under the name of speculation, and they believe that parliament should provide a remedy against it. I admit that it is exceedingly difficult to stop people from speculating, but there is a wide difference between speculating in_ real estate, for example, and dealing in stocks on margin, as the term is ordinarily used. There are a good many people who have suffered from stock speculation of one kind or another, and I do think that the people of this country would welcome any legislation that would have for its object the checking of this evil. Even if such legislation does not entirely stop the unwise and improvident spirit of gambling that is abroad in the land. I was somewhat amused at the leader of the opposition, who started out apparently with the object of getting his friend from Toronto (Mr. Osier) out of the hole in which he had landed, and who. for the time being, did not admit that there was any wrong in this system of speculation, but before the hon. gentleman (Mr. Borden, Halifax) had finished his argument, he admitted that it was an evil, and he also thought that there might be some possibility of checking it if the Minister of Justice would introduce an amendment to the Criminal Code directed against it. The hon. member for West Elgin (Mr. Robinson) and the member for Toronto (Mr. Osier) both admitted the prevalence of the evil. Now, as to whether the government is or is not responsible for the speculation that was Mr. HOLMES.

carried on by the loan companies in the city of St. Thomas, that is neither here nor there. The hon. gentlemen succeed in establishing the fact that the loan companies in the city of St. Thomas were carrying on an illegal transaction in speculating in stocks, and as a result that they brought ruin and disaster on a good many families in the vicinity. These hon. gentlemen proved the contention of the hon. member from Labelle, although they did not intend to do so. If it is possible for the Minister of Justice to devote some attention to this matter, as I presume he will, by introducing an amendment to the Criminal Code, he will be doing something that will confer a great benefit on the country at large. The gambling spirit prevails to a very large extent, and whilst I admit without hesitation the impossibility of removing it entirely by legislation, I do say that we can check it to a very considerable extent. We have spent a great deal of time in this House, not only this session, but in previous sessions, in passing legislation that was vastly of less importance than the legislation which we have been invited to enact by the hon. member for Labelle.

At six o'clock, House took recess.

After Recess.

House resumed at eight o'clock.

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CON

David Henderson

Conservative (1867-1942)

Mr. DAVID HENDERSON (Halton).

Mr. Speaker, when a few evenings ago I briefly referred to the subject which has been introduced this afternoon by the hon. member for Labelle (Mr. Bourassa), I did not think that during this session it would receive as much attention from the members of this House as it has. On another occasion I may refer to the matter again, with a view to suggesting some remedy for, or some means of minimizing, the evil complained of. For that reason my remarks on this occasion shall be extremely brief. That an evil does exist has been fully demonstrated by the hon. member who has introduced the motion now in your hands.

I believe it to be a very widespread evil. We speak of the evil of intemperance ; but to my mind stock speculation brings more sorrow, more sadness, more broken hearts, more ruined homes, more suicides, than all the ravages of intemperance. We talk of the evils of the race track. Betting on the race track is nothing as compared with this evil. I have before me a quotation from the ' Canadian Sportsman ' on the subject of the worst kind of gambling. In this brief article, that paper, referring to a recent failure in the city of Toronto, says :

The class of business done by this firm has had much to do with the wild mad speculation that has had so large a number of our citizens in its grasp -within the piast year. Talk about injury being done this community by holding a race meeting conducted by gentlemen for two

weeks in the spring and one week in the autumn. There has been more citizens of Toronto ruined within the past six months and more misery caused by this carnival of reckless speculation than the Canadian turf is responsible for in the fifty years in its history.

We say, then, that it is an admitted fact that an evil does exist, and our duty here is, if possible, to find some means of minimizing that evil. The hon. member for West Toronto (Mr. Osier) says that speculation has long existed and will continue to exist-that it is natural to speculate. I believe there is a great deal in that ; but that should not deter us from finding some means of minimizing what we consider an illegitimate practice. We must be careful at the same time, however, to distinguish between the broker who carries on a legitimate business, and the broker who carries on what may fairly be called an illegitimate or improper business. The business of a broker is just as legitimate and honourable as that of the banker, the merchant, or any other man engaged in the ordinary walks of life ; and no reflection to my mind should be east on that class of the community who engage in a business which is proper and legitimate and a requirement of the country. Even dealing on margin may be legitimate business. Where there is no intention to deliver the goods that are sold on margin or to implement the purchase, then I consider the business becomes a dangerous and illegitimate business. If a man has not the means to implement his purchase, he is sure to become the loser in the end, because when stocks decline, time after time, and he puts up his money until he puts up his last dollar, if he is unable to continue to meet the decline or to take over the stock which he has purchased, he must become the loser and his family will become the sufferers. I said, however, that there is a kind of dealing on margin which I consider perfectly legitimate. For example, a grain merchant of Liverpool may purchase a million bushels of wheat in New York. Knowing that he has a sufficient margin between the price he pays for that wheat in New York and the price he expects to obtain for it in [DOT]Liverpool, provided there is no decline in price in the meantime, it is perfectly legitimate for him to sell short the million bushels, and so protect himself against loss. That is the kind of transaction that is engaged in every day of the year. That man has the goods to deliver, because he has purchased the wheat in New York, and is able to implement the transaction.

I remember very well when the Bill referred to by the hon. member for Labelle was introduced into this House by Sir John Thompson, I believe it was first introduced in the Senate by Sir John Abbott, then Prime Minister of Canada. That Bill was aimed against the small bucket shops which at that time were all through the country 221

doing a large business. It was not intended to operate against the legitimate broker at all. However, means were very soon found of evading that law, simply by changing the base of operations. Instead of consummating the transaction say in Toronto or Montreal, the broker simply wires the deal to New York or Buffalo, so as to have it completed outside of the country, and not commit an offence against the laws of Canada.

Dealing on margin no doubt makes speculation easy, because it is done with less money than would be required if a man were buying stocks and paying the full price for them. To my mind what we must keep in view in discussing this matter is the means by which we can make it more difficult to speculate on margin. I believe that if we can limit the supply of money which the broker controls and which he obtains on the security of the stocks he holds, then we will limit the operations of the broker, and minimize to a very large extent the dealings on margin. It has been suggested that it would be a good thing to license the broker. I would not approve of that. If you license a broker to do this class of busines, you simply make the business more respectable, and create an injury rather than a benefit. To my mind the business at the present time is too respectable. It has been transferred from the small bucket shop to the large broker's office, which at the present time is practically nothing more nor less than a big respectable bucket shop.

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IND

William Findlay Maclean

Independent Conservative

Mr. W. F. MACLEAN (East York).

Mr. Speaker, unlimited stock speculation is damaging to the country in many ways. It limits the amount of money available for the legitimate business of the country. That lias been proven over and over again. The money of the country that ought to be reserved for the legitimate business of the country is often sent out of the country to be used for stock speculation. The proof of that is apparent to-day. We have the most prosperous times probably that ever existed in the history of the continent of America ; but by reason of inflated companies, by reason of millions of stock being put on the market, that stock has not been digested, as the term is, and the result is that in the midst of this great prosperity there are many people labouring under financial difficulties brought on by stock speculation. Then, stock speculation is a danger to the loan companies and the insurance companies, the reserves of which sometimes find their way into the stock market. Other great interests are involved in that way. The loan companies have had the public faith in them largely reduced, and the time has arrived when this parliament should do something to prevent their investing the money of their depositors and shareholders- in some cases to the extent of ninety per

cent-in stock speculation and only ten per cent paid in advances on real estate, which is the purpose for which they were specially created. It is said that we cannot make a cure, but I believe some kind of a cure may be effected on the lines laid clown by the hon. member for Labelle (Mr. Bourassa) this afternoon and the hon. member for Halton (Mr. Henderson) this evening. It is all right for men who have the money to go into stock speculation. People talk about betting on horse racing, but there is this to be said in its favour as against stock gambling, that when a man puts up his money on a horse, he knows how much he stands to lose, but when a man puts up his money on stocks on margin, he never knows how much more he will have to pay and what obligations are ahead of him. If some law could be passed whereby the amount of margin would be increased or which would prevent loan companies from advancing more than a certain percentage on speculative stocks, the evil would be largely reduced. A strong case has been made out, and I think it is incumbent on the government to introduce some kind of legislation in the way of curtailing the power which the loan companies have of lending money on stocks.

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LIB

Dominique Monet

Liberal

Mr. D. MONET (Laprairie and Napier-ville).

(Translation.) Mr. Speaker, I think the hon. member for Labelle (Mr. Bourassa) has rendered, and will render a valuable service to the public generally, and to several people in particular, by presenting the motion put in your hands this afternoon. The hon. member merely stated aloud what every one in this country has been whispering for several mouths past: that there exists a system of speculation on margin of a most fraudulent character ; a system of speculation which is the more dangerous because it is apparently carried on under the cover of our statutory law of 1888. The facts on which my hon. friend for Labelle has based his argument have not been contradicted by any of the members who addressed the House, either on this side or on the opposite. Indeed, they are taken from the records of two cases looked upon as very famous and which were even taken to his Majesty's Privy Council in appeal. The facts referred to by my hon. friend and which are undeniable aud uucontradicted, are recounted in those cases.

My hon. friend also referred to certain facts in connection with the famous controversy which arose in the months of September and October last between Messrs. Dan-sereau and Forget. The hon. member for Labelle in pointing out with the eloquence and ability which we all recognize, the facts connected with this controversy, showed, I think, that fraud very often enters in these speculations which lie denounced.

The hon. member for Jacques Cartier (Mr. Monk) complained that the hon. member for Labelle had repeated some statements iii which mention was made of thieves and Mr. MACLEAN.

swindlers, because these expressions seemed to apply to Mr. Forget. It appears to me we should not be afraid of calling certain things by their name, and particularly of calling a thief a thief. When certain doings are recognized by us as bad, I do not see any reason why we should object to designating as they deserve those who are guilty of them. However, according to the hon. member for Jacques Cartier, my hon. friend from Labelle had no right to qualify as he did the conduct of those who commit those acts considered as actual frauds.

I think the hon. member for Labelle might have gone a little further than he has done, in giving out certain facts in connection with this Dansereau-Forget dispute. For instance, if he had carried his inquiry a little further, he might have informed the House of the famous circumstance of the decease of the well-known broker, which Mr. Forget availed himself of to refuse paying to his client Dausereau what he owed him. I think the hon. member for Jacques Cartier would not object to our calling a robber he who actually robs his client.

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LIB

Lawrence Geoffrey Power (Speaker of the Senate)

Liberal

Mr. SPEAKER.

(Translation.) I think the hon. member is going a little too far. Rule 13 of the Rules and Regulations reads as follows :

No member shall use offensive words aga'.us: either House, or against any member thereof.

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LIB

Dominique Monet

Liberal

Mr. MONET.

(Translation.) I was going to say, Mr. Speaker, when you called my attention to the rule, that the facts elicited by my remarks had taken place before Mr. Forget was a senator. That was the explanation which I proposed giving to the House. In any case I bow humbly to your ruling.

Every one admits that the facts elicited by that famous dispute are true. It is stated that after all the evil is not so great, since two cases only have been found where fraud was apparent. As a matter of fact nobody is very willing to admit having practised that kind of speculation, whether he has succeeded or not. That reminds me of Sir Charles Tupper's answer to the inquiry as to how he had made his fortune. The ex leader of the Conservative party, instead of admitting that he had speculated, merely stated that he had practised as a physician for three, four or five years, and in that way had amassed the immense wealth he possessed at the time.

If those who profit by speculation are in no way anxious to boast of the means whereby they have succeeded, the more so are the losers in the game reticent in this connection. The evil is much more widespread than seemed to think those who spoke after the hon. member for Labelle, and who, while not controverting the argument brought forward by this gentleman, seemingly claimed that it is not expedient to introduce a law regulating speculation on stock in this country.

The contrary is to my knowledge, Mr. Speaker. I have received letters from friends urging the necessity of a law that would protect these poor victims ; and here are the very words which one of them uses :

* To protect those who are foolish enough to do as I have done.'

It is evident that those who speculate on margin (I mean those who have only a few hundred or a few thousand dollars) are induced to do so by the advice of those who, certainly, control the rise or fall of stock in most cases and thus rapidly build up a fortune for themselves at the expense of the buyers.

The evil exists, and the fact having been brought to the attention of parliament, it seems that the Minister of Justice aud the government should find a means, not of interfering with legitimate speculation, but of putting a stop to that abusive speculation which leads these poor victims to the consequences we know.

I said a moment ago that those who do not succeed are far from being boastful of a practice which has caused their ruin ; and so, we are not made aware of the extent of the evil. But we all know, it is notorious to-day, that even professional men, notaries, Jiave been sent to the penitentiary merely because they had speculated with money put in their hands by individuals, often poor widows, who had only a few hundred dollars savings. These notaries had committed these frauds in an endeavour to meet the calls made on them to cover their margin on account of a sudden rise or fall of the stock, which they had been unable to foresee. In the same way bank cashiers have been obliged to quit the country because they could not refund the money which they had embezzled for purposes of speculation.

It suffices to mention these facts without giving names or entering into particulars, to show that the evil exists. Now, that evil having been brought to the attention of the House, it is its duty, as well as that of the government to try and find a remedy.

In conclusion, I wish to thank once more my hon. friend from T.abelle for having brought up that question. I think he has thereby rendered a great service to the public. The almost unanimous expression of opinion on the part of the members, who admitted that the evil existed, should induce the government, and more especially the Minister of Justice to take proper measures for remedying it.

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LIB

Rodolphe Lemieux

Liberal

Mr. RODOLPHE LEMIEUX (Gaspe).

I concur very heartily, Mr. Speaker, in the remarks made by the hon. member for

Labelle (Mr. Bourassa) and my hon. friend from Napierville (Mr. Monet) as regards this great evil. I have listened very attentively to that strong indictment made against gambling and what I may term gambling dens, established in our large cities. In my opinion, my hon. friend from Labelle has rendered' this country 2214

a real service, and I hope his speech will be read by all the young men just about entering on their career in this country. It has been my lot to represent in the district of Montreal-the largest judicial district of the province of Quebec and perhaps the largest in the whole Dominion-the Crown in my official capacity of Crown Prosecutor. I have seen, term after term, young men belonging to the notarial profession, for instance, standing indicted for forgery and fraud-for having taken the money which had been deposited with them by clients; and the cause of their being arrested and sent to the penitentiary was this passion to gamble on the stock exchange, even if they had to do it with money which did not belong to them. That is one of the saddest chapters of criminal history in Canada. I have witnessed such cases often, and therefore I can bear testimony to the truth of the picture presented by my hon. friend from Labelle. What does the hon. gentleman propose ? The remedy seems very simple, raise the margin. Go into the city of Montreal or anywhere else, where the stock exchange reigns supreme, and you will be told by young lawyers, notaries, and clerks, that they go to the brokers offices just as they would go to a club to play a game of cards or to a lottery. We have legislated against lotteries because they are based on chance. Why should we not legislate for the same reason against the stock exchange ? The young man with a salary of $500, or even with a salary of $1,000 per year, who goes to a broker and buys shares of say Dominion Iron and Steel or any other stock on a margin of five, ten or fifteen per cent, is nothing else, to my mind, but a common gambler : and if you would raise this margin to twenty-five per cent you will do the young men of this country the best service you can render them. This debate should be a great moral lesson to our young men. I am told by the hon. member for St. Mary's (Hon. Mr. Tarte) that it is better to preach by example, which is no doubt true, but unfortunately the best educated men of this country are addicted to that gambling frenzy. When men lose at the stock exchange, they accuse the fiscal policy of the government as the cause of their losses. Lately we have heard of many thousands of the young men of this country losing money through speculating in stocks, and the government was charged with being the cause of those losses. Well, is it not a fact that the real cause was the depression brought about by the stock brokers themselves ? I believe that the depression was due to their own quarrels, as we have been told this afternoon. I would urge the adoption of this resolution; indeed, this debate will furnish a highly moral lesson, which I hope will bear fruit.

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CON

Thomas Simpson Sproule

Conservative (1867-1942)

Mr. T. S. SPROULE (East Grey).

That there is urgent need of legislation to pre-

vent stock gambling, if you can prevent by legislation, no one will deny. But tbe question is what could you do by legislation to prevent it ? I think that the most effective remedy would be to compel actual transfer and registration at the time a sale of stock is made. X have always thought that every stock broker should have the stock on hand before selling it, and when he sells it, he should immediately put the sale on record and transfer the stock. Monthly returns should be sent the government of actual transactions; and if it be found that a broker has been dealing with stocks not in his possession, he should be punished by a fine. To sell stocks short or stocks which you do not own should be made a punishable offence.

This will pretty effectually stop it, so far as I know. Now, it may be said that the variety of stocks is so great that this could not be done. When stocks are listed they become, in a measure, public property. At least, they are negotiable property and it is an easy matter to take record of them. Stock brokers do not deal in wild-cat schemes, mining speculations and stock of that kind. They handle stocks for which there is a public demand or stocks which have intrinsic value. If a stock broker takes the responsibility of handling stocks at all the first requisite should be that the stock should be registered. Then, a record should be kept of every transaction and a return made somewhat similar to the return made by the banks, so that the government could trace the stock, know whether the broker was dealing on margin or selling something that he did not own. If the transactions were confined to bona fide purchases and sales, it seems to me, not so much harm would be done. I believe that probably it would be an additional safety to compel a purchaser to put up a larger margin. Many deal in stocks on a small margin who would not touch them if the margin were greater. I am not so pronounced on that point as I am in believing that every stock transaction should be registered and that there should be a monthly return of every broker who deals in stocks, and, if it is shown that he is dealing in stocks he does not own. he should be fined.

The ? MINISTER OF JUSTICE (Hon. Charles Fitzpatrick). I believe that the question raised by the motion of my hon. friend from La belle (Mr. Bourassa) is one well worthy the consideration of this House. I have listened patiently and carefully to all that has been said in order that I might gather suggestions that would be useful in any effort I may make to remedy the grievances which exist. My hon. friend (Mr. Bourassa) must bear in mind that this question is one over which we have only a partial control. A transaction in stocks is more a matter of civil contract which is to be regulated, to a large extent, by the law of the Mr. SPROULE.

particular province in which the transaction takes place.

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CON

Thomas Simpson Sproule

Conservative (1867-1942)

Mr. SPROULE.

Who gives the stock broker authority to carry on his business ?

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The MINISTER OF JUSTICE.

That is a matter of local concern. We can only deal with that question here so far as we may make the dealing in stocks a penal offence. I agree with all that has been said about the evils that have resulted from stock gambling transactions. L have in my own experience known of cases of the greatest possible hardship. I am quite within the limits of what I know to be absolutely accurate, when I say that the Yille Marie Bank of Montreal was wrecked as the result of! stock gambling engaged in by persons connected with the bank. I have known cases of young men engaged in banks-I have one before my mind now-a young man who took $40,000 of the bank's money in one month for the purpose of stock gambling. I know a case which resulted in suicide. These are very serious and real evils, evils for which we feel there ought to be some remedy. Yet it is very easy to say that we ought to stop these things. Before we take any action it is better to carefully and accurately consider the method to be adopted to arrive at the end we all have in view. It is idle to call all stock brokers villians and scoundrels. I listened carefully to what was said by my hon. friend (Mr. Bourassa) and I am sure that he did not use a word that could be construed into a wish to apply such terms to all the members of a respectable calling in the community. All who have had experience in affairs know1 that stock brokers are as respectable as any other class and as well deserving of our consideration. All stock dealing is not criminal ; all stock dealing is not improper ; all stock dealing is not to be discouraged. A man knows of a stock he thinks is likely to rise. He goes to a broker and asks him to buy a hundred shares of that stock. The broker says : I will buy the stock, and yoxi will give me ten, fifteen or twenty per cent margin. The broker purchases the stock ; but, to do so, he must pay the then market value and must supplement the amount advanced by the client by borrowing or advancing the balance of the purchase price. If he charges a commission for this service there is nothing wrong about the transaction, nothing even to be discouraged. He makes the purchase, registers the stock in the name of the client, if the client pays in full, or, if not. he registers it in his own name and becomes responsible to the bank that makes the advance. No doubt, he transfers the shares to the bank as collateral security for the advance. In case the broker pledges his own credit, in addition to the security, to the bank for the purpose of getting that advance to accommodate his client. There is nothing wrong in all this, nothing to

cause us to condemn all stock brokers' transactions. But that which is wrong, that which is to be condemned, that for which we should endeavour to find a remedy, is the case of a man who goes to a so-called stock broker-because these people are not worthy of the name of brokers-and goes through the form of purchasing so many shares when he and the broker with whom he deals knows that there is no intention on the part of the broker to buy a share of the stock, much less to transfer it to his client. In such a case the client simply puts up a certain amount of money for margin ; if the stock rises, the difference between the then current price of the stock and the rise, in addition to the margin, goes to the credit of the client. If there is a decline in the price, then, of course, if it is sufficient, the client, loses his margin. That sort of stock brokerage illustrates the old rule, ' heads I win, tales you lose.-the broker being the man in the position of advantage. If we can reach that form of gambling-for it is nothing else- we shall go far to bring about a remedy for the evils pointed out. I have not considered the matter very carefully, but it appears to me that the statute my hon. friend (Mr. Bourassat referred to this afternoon would go far in the way of remedying the evil, if it had not been amended after it came back from the Senate. That statute to which my hon. friend referred is a part of onr Criminal Code. That article provides :

Every one is guilty of any indictable offence and liable to five years' imprisonment, and to a fine of five hundred dollars, who, with the intent to make gain or profit by the rise or fall in price of any stock of any incorporated or unincorporated company or undertaking, either in Canada or elsewhere or of any goods, wares or merchandise-

(a.) Without the bona fide intention of acquiring any such shares.

But here is the apparently harmless amendment that was made to Abbott s Bill when it came back from the Senate, and which I think makes the whole section inoperative :

But it is not an offence if the broker of t.he purchaser receives delivery, on his behalf-

-remember, it is the broker who takes delivery-

__of the article sold, notwithstanding that such

broker retains or pledges the same as security for the advance of the purchase money or any part thereof.

As was pointed out by the member for Labelie, a broker may have five different clients, each of whom purchases say 500 shares, and he, the broker, may only own 500 shares, he can use these shares so as to evade responsibility if proceeded against under the Criminal Code notwithstanding that with respect to the 2,000 shares the transaction is a mere gamble, and against such transactions we should legislate if

possible. But before applying a remedy we must find out the nature of the disease, then after a little consideration no doubt we will find some kind of a remedy for the disease.

I would like, before sitting down, to make a reference to what was said this afternoon about the case of Forget and Ostigny. I think the hon. member for La-belle went a little too far in his criticisms of their Lordships of the Privy Council. The Forget and Ostigny case was merely one of fact. The question was as to whether a particular contract they were called upon to consider was a gaming contract within the meaning of an article of the civil code of our province. Three judges of the lower court held that, as a matter of fact, it was not, while their Lordships of the Privy Council held as a matter of fact that it was, reversing the decision of the lower court and holding that it was a gambling transaction. That was a question upon which men may differ. I would like to say this, that I consider the right of appeal to the Privy Council as a great safeguard to the people of this country, and to the province of Quebec in particular. The Privy Council are far away from our little local troubles and difficulties; they are men of broad instincts, men of great learning, aud I think I may say, if the hon. member for Labelie will permit me, speaking of one who has passed away, that one of the greatest civil law lawyers I ever knew was a member of the Privy Council, Lord Watson. He had been trained in the law of Scotland, which is to a large extent based upon the same principles as our law in the province of Quebec. He knew his civil law thoroughly. I remember having myself heard him correct a quotation from Pothier that was made by a lawyer from our province, and he corrected him in such a way as to indicate not only that he knew Pothier, but what is far better, that he understood him. Now, there are other great lawyers, Lord Davy, for instance, who also knows something about our civil law, and who is certainly one of the best Roman law lawyers living at present within the limits of the British empire; and a man who knows his Roman law has a very good foundation for the civil law in our province. Let us not be too prone in criticism of the Privy Council. I have been before them, and I know that they care very little about the petty differences and difficulties that trouble us in this country. Their only desii'e is to do what is just and fair. They have got the capacity, they have got the learning, and they have got the desire to do what is fair and just. I may conclude by saying that I think the hon. member for Labelie has drawn our attention to a grievance, to a grievance that requires a remedy. I cannot say that I can do much for him at the present time, but insofar as my limited knowledge and experience go, I am entirely at his service, and I shall en-

deavour, so far as possible to find a remedy for the grievance he has suggested. But I must ask him, if he will permit me, to withdraw his motion.

Topic:   SUPPLY-STOCK EXCHANGE SPECULATION.
Subtopic:   MEMORANDUM.
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LIB

Joseph Israël Tarte

Liberal

Hon. J. I. TARTE (Montreal, St. Mary's).

Several lion, gentlemen who have addressed the House have taught a lesson to the young men of this country. They told them that they ought not to gamble. I quite agree with the advice that has been tendered to the young generation; but knowing what I know, and what is well known in this House and outside of this House, I think we should begin our education of the young generation by setting them an example. When Ministers of the Crown, both in this parliament and in local legislatures, when members of parliament, when secretaries of ministers, when men who pretend to know every thing, that is going on, gamble and buy stocks right and left, it is not surprising that young lawyers and young clerks gamble and speculate. I say it again, when members of parliament, when ministers, not one, but several of them-X do not make any personal allusion, I speak of ministers generally of the various parliaments of this country-are known to gamble and speculate, we must not be surprised if the younger generation follow that dangerous example. Let us give the example ourselves. My hon. friend from Gaspf: (Mr. Lemieux) alluded to the case of steel and coal. Well, we have heard very little else but steel and coal during last session of parliament. We could not walk through the lobbies of this House without hearing steel and coal. Everybody was buying. It was not the young men alone who were guilty of gambling, it was men in high positions who were buying stock. My hon. friend will permit me to tell him that gambling is one thing and tariff is another thing. The tariff was not sufficient in the case of steel and iron, and the best evidence that it was not sufficient is the fact that a free trader like my hon. friend the Minister of Finance has at last made up his mind to give additional bounties to that industry. Surely if the Minister of Finance was convinced that the tariff is high enough, he would not for the sake of gamblers, add probably $1,000,000 to the Budget of Canada. Let us deal with gamblers, but let us not mix up tariff matters in a question of this kind. Again I say. and I think I am expressing the sentiment of all those who know what is going on, that it will not be sufficient for us to enact laws here while men in high positions give a bad example by gambling and buying stock *with which parliament may have to deal. I think that is a very improper thing indeed. I do not wish to give lessons to anybody, that is not by any means my intention. But I think it is a very improper thing for members of parliament and ministers to gamble in stocks of corporations that sooner or later may apply to this parlia-Hon. Mr. FITZPATRICK.

rnent for favours in the shape of additional duties and bounties.

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L-C

Andrew B. Ingram

Liberal-Conservative

Mr. A. B. INGRAM (East Elgin).

In view of the fact that the city I represent is one of the greatest sufferers in the Dominion of Canada from stock speculation, I feel I would fail in my duty if I were to remain silent on this question which is now before the House. The papers of this country have been tilled for weeks with news concerning the unfortunate calamity which occurred in connection with some of the loan companies in the city of St. Thomas. I can testify that a gentleman who was looked upon as a pillar of the church has confessed that he has been not only taking the people's money, but he has committed forgery, theft and fraud. So, while there may be very little sympathy for the gentlemen whom the hon. member for St. Mary's (Hon. Mr. Tarte) referred to, ministers and members of parliament and business men who indulge in stock speculation, there can be a great deal of sympathy for the poorer classes of the people who have saved up small earnings and then, induced by a broker or a manager of a loan company, have engaged in stock speculation and lost all their money.

I trust that the hon. Minister of Justice, who has announced that he proposes to take this matter in hand, will be successful in meeting the case that I have pointed out, namely, protecting the small depositors or those who have been induced to go into speculation in stocks. But, I think he will find it is a somewhat difficult task when he undertakes to check hazardous speculation. If I desired to enter into a hazardous speculation, or if I desired to enter into what I thought was a good speculation, and which turned out to be a poor or hazardous speculation, I think I could get over the difficulty. I could buy stocks in New York or Chicago, and I do not see how we could by legislation passed in this House prevent a person from indulging in speculation in stocks in the United States. Perhaps there may be some method known to the hon. minister for overcoming that difficulty, but as far as I can see there will be a great deal of difficulty in framing legislation to entirely wipe out speculation in hazardous stocks. A year ago in my own city not only old men, but young men, married women and young women indulged in speculation in stocks. Many of them made quite large sums of money, but when the slump came they not only lost all the profits they had made, but they lost the savings of many years previous to that. Iam glad to take part in this discussion. I have been asked on many occasions since the misfortunes occurred to the loan companies in St. Thomas by people who lost their money if legislation to prevent a recurrence of such a disaster could not be passed by this House,

and I shall be glad to lend my assistance when the occasion arises.

Topic:   SUPPLY-STOCK EXCHANGE SPECULATION.
Subtopic:   MEMORANDUM.
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LIB

Joseph Henri Napoléon Bourassa

Liberal

Mr. BOURASSA.

With the indulgence of the House and in reply to the statement made by the lion. Minister of Justice, I would like to say that I did not bring this motion in with the idea that legislation ought to be enacted this session, but I brought the question up so as to cause a discussion to be had in this House, and so as to get the hon. Minister of Justice at work on the matter. The hon. Minister of Justice has expressed his willingness to do something, but I would like to get from him a clearer expression of opinion. Of course, I understand that the question has to be carefully studied, not only from a legal point of view, but from a financial point of view as well. I quite understand that my hon. friend will have to put himself into communication with bankers and financial men throughout the country, and if he is prepared to do that so as to be able next session to bring in some legislation on the matter, I am willing to accept that.

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Subtopic:   MEMORANDUM.
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?

The MINISTER OF JUSTICE.

There will be this session some amendments to the law resxiecting loan companies. I have had occasion to prepare some amendments that will probably be introduced by the hon. Minister of Finance (Hon. Mr. Fielding). In respect to the amendments which are necessary to meet the grievances pointed out by the hon. member for Labelle (Mr. Bourassa), I will endeavour as far as possible to introduce such amendments as will meet the difficulty. Of course, it will be necessary to make inquiry, because, with all due deference and respect for the hon. member for Montreal, St. Mary's (Hon. Mr. Tarte), I have not that practical experience which comes from actually dealing 'in stocks.

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LIB
?

The MINISTER OF JUSTICE.

I am absolutely guiltless in that respect, whatever my other iniquities may be. The short road to fortune has never had any attraction for me, and I think the same thing is true of my colleagues in the government. *

Amendment (Mr. Bourassa) withdrawn, motion agreed to, and House went into Committee of Supply.

Census, $35,000.

Topic:   SUPPLY-STOCK EXCHANGE SPECULATION.
Subtopic:   MEMORANDUM.
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CON

Thomas Simpson Sproule

Conservative (1867-1942)

Mr. SPRQULE.

What time do you expect to elapse before the census is completed ? I understand you have dismissed a number of employees who were engaged on the staff. How many do you still retain ?

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Subtopic:   MEMORANDUM.
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July 21, 1903