May 15, 1905


House in committee on Bill (No. 134) to incorporate the Providence Savings Association (Limited). 'Section 3-capital stock.


CON

George Eulas Foster

Conservative (1867-1942)

Mr. FOSTER.

What is the reason the ' capital stock is so very small as $25,000 ?

Topic:   PROVIDENCE SAVINGS ASSOCIATION (LIMITED).
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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

It is certainly small capital, and the first impression of the committee was against the charter. On examination it will be found that the Bill has been changed very materially. We objected to the title as calculated to associate the company in some way with a savings bank, and we had the name changed. It is merely an investment company for the doing of ordinary financial business ; and it was represented that if we insisted on a larger capital, we would be shutting out smaller people from doing business which is very legitimate.

Mr. TI'SDALE. Are they allowed to take deposits ?

Topic:   PROVIDENCE SAVINGS ASSOCIATION (LIMITED).
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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

No.

Section as amended, agreed to.

On section G

the number of directors.

Topic:   PROVIDENCE SAVINGS ASSOCIATION (LIMITED).
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LIB

Charles Marcil (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. DEPUTY SPEAKER.

The new subsection has been added to section 0 by the Banking and Commerce Committee ; a director must be a holder of at least ten shares capital stock and have paid up Ins shares and all the liabilities incurred by him to the company.

Section and subsection agreed to.

On section 7-power of company,

(a) Underwrite, buy, pledge and otherwise deal in, lor cash or on the instalment plan, stocks, bonds, debentures or obligations ot corporations, whether secured by mortgage or otherwise, and Dominion, provincial, British, foreign or other public securities, with the privileges and rights thereto attached ,

Mr. DEPUTY 'SPEAKER. The words ' for cash or on the instalment plan ' were struck cut by the Banking and Commerce Committee.

Mr. FOSTER, AVhat powers does this give them with regard to stocks ?

Topic:   PROVIDENCE SAVINGS ASSOCIATION (LIMITED).
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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

The right to buy. and sell these securities which an individual could exercise for himself without a charter.

Topic:   PROVIDENCE SAVINGS ASSOCIATION (LIMITED).
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CON

George Eulas Foster

Conservative (1867-1942)

Mr. FOSTER.

If you give them power to underwrite and buy and sell and pledge, you give them all they sought to have. Otherwise they could deal in stocks on margin.

Topic:   PROVIDENCE SAVINGS ASSOCIATION (LIMITED).
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LIB

Charles Smith Hyman (Minister Without Portfolio)

Liberal

Mr. HYMAN.

There is no doubt they could, under subsection (h).

Topic:   PROVIDENCE SAVINGS ASSOCIATION (LIMITED).
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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

Why should they not be allowed to deal in margin, if they wish

to ? It may be inadvisable, but it is no crime. Any individual can do it. If it were a trust company or insurance company, it might be different, but I do not see any objection to this company being allowed to deal in margins with their own funds.

Mr. FOSTER, it is not simply that they buy themselves on margin, but they buy for other people.

Topic:   PROVIDENCE SAVINGS ASSOCIATION (LIMITED).
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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

Even so, that is an ordinary broker's business, and any individual would have a right to carry it on.

Topic:   PROVIDENCE SAVINGS ASSOCIATION (LIMITED).
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CON

David Henderson

Conservative (1867-1942)

Mr. HENDERSON.

The object of the Banking and Commerce Committe in striking out the words ' or on the instalment plan ' was to prevent dealing in margins. But 1 think the committee went too far when they struck out the word 1 cash.' Had that been left in, the clause would have had much stronger effect in preventing the corporation from being used as a means of buying and selling on margin-it would limit them to the cash plan. I would favour having the word ' cash,' reinserted, to accomplish the purpose the Banking and Commerce Committee had in view.

Topic:   PROVIDENCE SAVINGS ASSOCIATION (LIMITED).
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CON

David Tisdale

Conservative (1867-1942)

Mr. TISDALE.

Why should not this company have, to the extent of their capital, the right that any individuals would have? This is simply a combination of capitalists instead of any of them acting separately.

Topic:   PROVIDENCE SAVINGS ASSOCIATION (LIMITED).
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LIB

Rodolphe Lemieux (Solicitor General of Canada)

Liberal

Mr. LEMIEUX.

I understand that th'e promoter of the Bill has accepted the amendments as they are.

Topic:   PROVIDENCE SAVINGS ASSOCIATION (LIMITED).
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CON

Thomas Simpson Sproule

Conservative (1867-1942)

Mr. SPROULE.

Suppose that a large estate is left in the hands of this company and they use it to deal on margin ?

Topic:   PROVIDENCE SAVINGS ASSOCIATION (LIMITED).
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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

That would be a breach of trust. Any individual might be made trustee of an estate, and if he used it on, margin, he would be guilty of a breach of trust. As I understand it, there is nothing here except an ordinary Act of incorporation allowing these people as a company to do what any of them can do individually if he has the money.

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CON

John Waterhouse Daniel

Conservative (1867-1942)

Mr. DANIEL.

I was under the impression, though I may be wrong, that bucket shops were illegal and that those who frequent them were breaking the law and were liable to being arrested. I know that in my own city such people have been arrested.

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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

This does not affect the criminal law. Whatever is illegal remains illegal. We give no power to the company that they would not have as individuals.

Topic:   PROVIDENCE SAVINGS ASSOCIATION (LIMITED).
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CON

George Eulas Foster

Conservative (1867-1942)

Mr. IOSTER.

There are many things which an individual can do alone which you do not authorize a company to do.

Topic:   PROVIDENCE SAVINGS ASSOCIATION (LIMITED).
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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

Not many, I think. The

object of incorporation is to enable indi-

Topic:   PROVIDENCE SAVINGS ASSOCIATION (LIMITED).
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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

viduals to unite their capital and so put themselves In a position to do what they would not have the financial strength to do as individuals. Though there may be exceptions I think, that, as a rule, whatever a man has a right to do alone we authorize the formation of a company to do.

Topic:   PROVIDENCE SAVINGS ASSOCIATION (LIMITED).
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May 15, 1905