March 15, 1909

CON

John Allister Currie

Conservative (1867-1942)

Mr. J. A. CURRIE.

I may say that a corporation has no right to divide its profits with its policy-holders or the public unless there is a special clause in its charter allowing it to do so. That is the law in England and every other country. This clause is placed in the charters of insurance companies to enable them to divide their profits and the charters of insurance companies give them the right to secure business not only in Canada, but in foreign countries. Have we the right to impose a limit in insurance contracts restricting the division of profits? Why should not the division of profits be a matter of simple contract between the company and the party insured. If you give a company the power to divide its profits with the policy-holders, why not let the percentage of profits be a matter of contract and written on the policy. Instead of doing this you frame this general clause, which is so worded that it enables an insurance company to avoid putting a clause in their contracts stating the amount of division. Thus a man may be induced to insure with the idea that he is going to receive a much larger percentage, and then, after he has paid in his premiums for many years, he finds, on looking at his policy, that there is no clause telling him what he is going to get,

and he has to refer to an Act of Parliament passed some twenty years before to find out that his profits are limited to a very small percentage. But if this question is going to receive consideration, if the Minister of Finance states that there will be a clause in the Insurance Bill which will deal generally with all companies, I am quite ready to waive my objection.

Topic:   PRIVATE BILLS.
Subtopic:   WESTERN CANADIAN LIFE ASSURANCE COMPANY.
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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

There is a clause in the Insurance Bill dealing with the method of distributing profits and raising this very question, so that my hon. friend will have an opportunity of dealing with the whole matter on that clause.

Bill reported, read the third time and passed.

Topic:   PRIVATE BILLS.
Subtopic:   WESTERN CANADIAN LIFE ASSURANCE COMPANY.
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GREAT WEST PERMANENT LOAN COMPANY.


House in committee on Bill (No. 40) to incorporate the Great West Permanent Loan Co.-Mr. Alexander Haggart. On section 9-Securities for investments.


CON

Thomas Simpson Sproule

Conservative (1867-1942)

Mr. SPROULE.

It is provided here that the company ' shall not invest in nor loan money upon the security of the stock of any other loan company Except as hereinafter authorized.' That would indicate that they aTe authorized to invest in the stock of any other company not a loan company. Is not that too wide a power?

Topic:   GREAT WEST PERMANENT LOAN COMPANY.
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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Hon. W. S. FIELDING (Minister of Finance).

This clause is the same as in the Acts of other similar companies, and is the same as in the general Loan Company's Act.

Topic:   GREAT WEST PERMANENT LOAN COMPANY.
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CON

Thomas Simpson Sproule

Conservative (1867-1942)

Mr. SPROULE.

On section 16, subsection c,

(c) Delegate any of their powers to committees consisting of such member or members of their body as they think fit, and any committee so formed shall, in the exercise of the powers so delegated, conform to any regulations that may be imposed on it by the directors.

There was a company started some years ago that adopted this plan of committees, and it seemed to me a very bad one; it proved very disastrous to those who had bought stock in the company. The plan I refer to is that of having a committee in each village or locality. The present section seems to give the company the right to delegate any of their powers to committees. The committees might be given certain limited powers, but the company should not have the right to give any committee the power to incur an obligation, borrow money or anything like that. In the York Loan Company that had such a disastrous history lately, that was one of the features; they had committees all over the country. I think these committees should only do certain routine work, become inspectors, report on property, look after collections, and such things as that. These things could well be done by a committee. But when you go beyond that you are giving them too large powers.

Topic:   GREAT WEST PERMANENT LOAN COMPANY.
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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

I think the clause is a usual one, and the superintendent informs me that no case has been brought to his notice of any abuse arising from it. Of course, it is a somewhat broad power to give the company to allow them to delegate their powers to a committee. I take it that the chief purpose of these committees is to encourage local business and create an interest in the company. I would not call them canvassers, although they do seek business for the company. It is to be presumed that the central authority would only delegate to them such powers as may be safely exercised. I am not aware of any real abuse having arisen under the clause. As respects the York Loan Company, I did not understand my hon. friend to say that the troubles arose from the operation of these committees.

Topic:   GREAT WEST PERMANENT LOAN COMPANY.
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CON

Thomas Simpson Sproule

Conservative (1867-1942)

Mr. SPROULE.

I can only say that having watched the operation of some of these companies I always regarded this as a bad feature. Here is what they usually do: An agent goes to a village, he wants to rope in certain parties and form a committee for the purpose of doing business in that locality. He makes one chairman, he makes another an inspector, he makes a third a secretary. Each one has a duty to perform, and they are paid in proportion to the amount of work done in that locality. These are all paid officials, though the remuneration they receive is small; but the higher the amount of work done and the larger the loans, the more they are paid. They are all interested parties, interested in getting business for the company, they are concerned in the amount of business they can get for the company. I have thought how easy it would be for the inspector to join with the agent, and with the secretary, and with the chairman, and recommend loans where the security was not perhaps very good, larger loans than they ought to recommend, and do it because they would get a larger commission for it. Individually I do not think they are under any bonds to make them liable for anything they might do improperly, although the general law would cover it. They represent to the public: If you will put your money into this company it will pay you back within a few months, or within a few years a certain return-and it is a return which no company could give legitimately. I know that to be a fact, because I have examined two or three of them, and I know the returns which they promise to give are such that no respectable company in the world could give if they were carrying on a legiti-

mate and honest business. This is done through these committees and the result is that after awhile the companies go down. I remember one that flourished some twenty years ago in our locality and I do not know whether there are two members of that board there to-day who were appointed about twenty years ago. What is the result? People paid in their money, and when they endeavoured afterwards to get a return for it, with the profits that they had reason to expect, according to the representations made to them, they found that they had been egregiously sold, they did not get back one-fourth of the money expected. I remember one man who, I think, paid in $62 or $64, and according to the representations made to him, he ought to have taken out, after a certain term of years, $250, but he took out about $2 less than he paid in. That is in my judgment, a fraudulent and improper transaction, but it is carried on through the exercise of the powers delegated to this special committee. One after another of the contributors, finding that was the case, dropped out of it, and practically lost all the money they had put into it.

Bill reported.

Topic:   GREAT WEST PERMANENT LOAN COMPANY.
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NIAGARA-WELLAND POWER COMPANY.


House again in Committee on Bill (No. 33) respecting the Niagara-Welland Power Company-Mr. Guthrie. On section 2,


CON

Thomas Simpson Sproule

Conservative (1867-1942)

Mr. SPROULE.

Has not this power company started its business?

Topic:   NIAGARA-WELLAND POWER COMPANY.
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LIB
CON

Thomas Simpson Sproule

Conservative (1867-1942)

Mr. SPROULE.

Has it been carrying on operations for any length of time or making any effort to complete its work?

Topic:   NIAGARA-WELLAND POWER COMPANY.
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LIB

Hugh Guthrie

Liberal

Mr. GUTHRIE.

It was shown before the Private Bills Committee that it has spent between $60,000 and $70,000, but there are now some negotiations with the Ontario government arising out of the policy of the Ontario government with regard to the Ni

raoo siifl omtprBoui oqj up -jgwod uibSt? pany does not want its charter rights to lapse.

Bill reported, read the third time and passed.

Topic:   NIAGARA-WELLAND POWER COMPANY.
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CANADA LIES ASSURANCE COMPANY.


House in Committee on Bill (No. 56) respecting the Canada Life Assurance Company-Mr. A. H. Clarke.


CON

John Allister Currie

Conservative (1867-1942)

Mr. J. A. CURRIE.

I understand that some members desire to look further into this Bill, and I would therefore like to have the consideration of it postponed until a further day. I therefore move that the committee report progress and ask leave to sit again. ' 1

Topic:   CANADA LIES ASSURANCE COMPANY.
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CON
CON

George Halsey Perley

Conservative (1867-1942)

Mr. PERLEY.

I would like to say two or three words with regard to this matter. As I stated in committee, I am not a shareholder in any way in the Canada Life Assurance Company, but I am a policy-holder and as such I am perfectly satisfied with section No. 2, which is a contentious section, as I consider that it provides what was originally intended and what has actually been done for the last thirty years. But, as a member of parliament a serious question arises as to the retroactive character of this Bill. I spoke about this phase of it the other day in the committee, and I asked Mr. Leighton McCarthy, who had the Bill in charge, regarding our power to pass such legislation and as to the wisdom of our doing it. He answered me giving his reasons for it, which did not seem to be very satisfactory as he was naturally in-teiested in the Bill as the lawyer for the Canada Life and there was no lawyer on the other side to represent the policy-holders. I have looked a little farther into the legal part of this question and I may say that I have found many lawyers opposed to our passing such legislation. Amongst others, I might refer to the argument of two celebrated and well known lawyers in this country who are members of this House, from the ridings of South Essex and North York. Both of these hon. gentlemen spoke the other day regarding the Cobalt Lake matter and presented arguments in that case which seemed to me to be decidedly against the wisdom of this House passing retroactive legislation of this kind. There are a great many policy-holders interested in this question who live not only in Canada but in almost every country in the world, and as I am not a lawyer and am unable to discuss this matter from a legal point of view it seems to me that before we pass this Bill we ought to have a definite statement from the Minister of Justice as to the wisdom of our passing legislation of this kind affecting as it does the possible civil rights of a great many people in a great many countries. I think he should assume the responsibility of advising this House regarding this matter as he is the keeper of the legal conscience of this House. Therefore, I wrote a letter to the hon. Minister of Justice, telling him that I would ask today that he give his opinion regarding the wisdom of passing this legislation, before we should go further with it. I sent the letter to him by mail and I am sorry to learn that he is indisposed. At the same time, I think the promoter of this Bill will agree with me that we should not go any further until we get an official opinion from the Minister of Justice as to whether it is wise and proper for us to pass such legislation. I therefore would be glad to second the motion of my hon. friend from North Simcoe (Mr. Currie).

Topic:   CANADA LIES ASSURANCE COMPANY.
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March 15, 1909