I am afraid that the committee as constituted, has not looked over the Bill carefully. It is not a Bill to organize loan societies, it is a Bill to permit poor people to help themselves locally by co-operation. The general idea seems to be in the committee, judging from what we have heard, that this is a scheme for making money. My right hon. friend knows enough about co-operation to know that it is no such thing. It is ito permit seven or more poor men in a village, in a small parish, or in any locality, on application to the minister, to put their liittJe resources together for mutual assistance, instead of having to submit to money shavers to get the accommodation they require. If you start with the idea that it is a scheme to organize a financial company, to make loans, to obtain deposits, you depart altogether from the principle of co-operation. I would suggest that the further consideration of the Bill be postponed; because, if we go on to consider other clauses, we will always be coming back to the discussion of the principle involved, which is one of mutual help amongst poor people, not a money making scheme at all. The Minister of Finance (Mr. Fielding), submitted this Bill to the Bankers' Association, with the result that he was satisfied when it came before the Banking Committee., I do not know if the Secretary of State (Mr. Murphy), was present at the last meeting. I am not aware that the Bill was passed by the committee merely for my own sake. Although I am a poor man, I am not poor enough to need the assistance of this parliament. This Bill is asked for by a large class of the population in all the provinces. It is not a Bill for the province of Quebec alone, as some hon. gentlemen seem to think, it is a Bill that has been in successful operation in England, Scotland, France, Germany, Italy, in fact in every other country except this one. It seems to be capable of working successfully everywhere, except in the province of Quebec, and probably, in the city of Toronto.
I think the hon. member for , Jacques Cartier is mistaken. Certainly for my part, I am entirely in sympathy
with the object of the Bill. I think the object of the Bill is one that ought to be provided for, either by this Bill or some other. We must consider what the effect of it might be by designing persons getting hold of the powers conferred by the Bill. In discussion before the committee the question was asked as to the probable amount of capital that would be accumulated under it, and I think the answer was that $20,000 would be a large amount, and $80,000 would be the ultimate sum that these societies have in view. I say without any hesitation, that as the Bill is drawn now, it will facilitate fraud. No doubt within three weeks after the passing of the Bill, there will be 50 societies incorporated, with officers and canvassers going round to get money.
I do not wish to discuss the merits of this Bill, but I want to utter a slight word of protest as to the method in which it has come before the House. It seems to me that the Prime Minister himself, has always taken the position that this House should accept the recommendations of the standing committees which were expressly constituted for the purpose of sifting out all the difficulties and objections, and drawbacks to the various measures that are brought before those committees, in order to facilitate the work of the House. Now the member for South Grey has laid down an entirely new doctrine, that is the reverse of flattering, either to the committee or to the hon. member for Jacques Cartier. He has stated that this Bill, after an elaborate discussion before the committee, after close scrutiny, was reported to the House out of sympathy for the member for Jacques Cartier. If it was reported for that purpose, the sympathy was withdrawn after it got into the House. But the fact remains that the Bill was reported and actually receive the sympathy* and endor-sation of ministers during its discussion in committee. Yet, after passing the committee and coming to this House, hon. gentlemen, including even the member for South Grey, who was chairman of the committee, get up and discover that it is the most dangerous measure that was ever brought before the House. I do not think with all due deference, that these hon. gentlemen have done justice to the hon. member who has introduced the Bill or to the hon. members of the House, who are satisfied to take the report of the standing committee.
I did not introduce any new principle. Last session there was a certain Bill before the House that was referred to a special committee who reported almost unanimously in favour of the Bill. I remember that the right hon.
Prime Minister (Sir Wilfrid Laurier) voted, according to the finding of that committee, for the Bill, but that the majority of the House voted against it. I do not know whether that principle was ever introduced before or not, but certainly it was introduced and acted upon last session, so that it is not a new position.
It is quite evident that in this House we are all in favour of the principle of the Bill, evert the hon. member for West Toronto (Mr., Osier). But the Bill, I understand, wast considered by the Banking Committee and reported favourably last session. That ought to be sufficient-it is for me, at all events-but when a gentleman so eminent in the world of finance suggests the reconstruction of a clause which has been adopted, even by the Banking Commit-* tee, I think, in the absence of my hon. friend the Minister of Finance (Mr. Fielding), I owe it to the House to say that the Department of Finance should be consulted as to the effect of this clause. It may be that the Finance Minister ha^ come to the conclusion that the danger that appears upon the face of it would be eliminated from the fact that this Bill is intended to apply only in one locality1 simply amongst friends, men who know each other, and it may be that thfe Department of Finance may have come to the conclusion that the Bill should be allowed to pass. I simply suggest that) this clause should be allowed to stand so1 that I may consult the Department ofi Finance and have their view upon it. If my hon. friend (Mr. Monk) prefers that the matter shall not be proceeded with until we consult with the Department of Finance, well and good. I have suggested that Tve might go on with the other clauses, but if my hon. friend prefers that no progress be made until this point is settled, I am in his hands as far as that goes.
My impression in the committee last session was that a great many clauses were passed because of the opposition of a certain individual whoi seemed to turn the proceedings into a' sort of burlesque. As soon as a clause' was read he would get up and offer objections, but the clause would be carried apparently regardless of him. He was the one who appeared to be fighting the Bill and the committee did not take much stock in what he said. But the impression left on my mind was this: Whereas the Bill is intended for a good purpose, and probably, if honestly worked
out by honest people, would effect a good purpose, dishonest people might make use of it for a very bad purpose and get capital out of people. Designing people could go to others and influence them to join a_society, pay in $1 or $5 each, and by promises of large interest on the money deposited in this society induce individuals to deposit a lot of money. They might deposit just as much as any designing person could get them to deposit. Supposing that half a dozen people wefle working together, that the limit of this society was the limit of the city of Toronto, that they got a thousand people in Toronto to join the society and put in $5 or $1 apiece, with perhaps a dozen people becoming members of the society and putting in $10,000 or $20,000, what is there in the Bill to prevent these individuals lending the money out between themselves and dividing it up? As far as I can see there is nothing at all. The provisions of the Bill would seem to be capable of allowing such fraudulent transactions to take place that afterwards the community would wonder that such a thing should be allowed in the country. I think that is the dangerous part of it. I have seen no clause in the Bill that would provide a sufficient safeguard against this danger.
I am not taking a different course with respect to this Bill from that which I pursued last year. I was opposed to it last year because I did not think the Bill was wanted in the province of Ontario where we have no necessity for suoh a Bill. I would like to ask on what security this money would be loaned. Suppose a gentleman comes and asks for a loan of $5,000 or $6,000, what security is he required to give?
There is nothing in the Bill about the security which he would give for the money that he would borrow, so that it is unguarded in that way. The members of the board might lend the money amongst themselves.
The remarks of my hon. friend from East Grey (Mr. Sproule) and the discussion that has taken place in the House, demonstrate, I think, the wisdom of acting on the suggestion made by the right hon. the Prime Minister of proceeding with the Bill clause by clause. The hon. member for East Grey has just said that he did not see sufficient safeguards in the Bill. The safeguards of one kind and another will become apparent to the committee as it proceeds. The hon. member for Argenteuil (Mr. Perley) spoke a moment ago of how the operations of these societies are restricted, first, as to area of operations. He pointed out further wherein their operations are limited as respects the number of people who can borrow or lend in connection with each society. But there are two or three other sections of the Bill to which attention has not been drawn in the committee. Section 35 says:-
Every society shall, at its first general meeting, elect from its members a board of credit of at least three members who shall not be members of the committee or board of supervision or officers of the society, and the president of the society shall be an ex officio member of such board.
2. The members of the board shall hold office for three years and until their successors are appointed. One-third of the members of th board, who, in the first two years and until the order of seniority begins, shall be chosen by lot, shall retire annually, but shall be eligible for re-election.
3. No member of the board shall borrow from or be in any way liable to the society.
Then subsection 4:-
4. It shall be the duty of the board to consider and approve of all loans and investments of funds of the society.
In other words, the only men who can borrow from the society are men who have put some of their own money into it. When a member applies to the society for a loan, the loan has to be approved of by a board chosen by all those in the first instance who put their money into me society, approved of by that supervisory board. But there is a further clause, section 36, which says that there shall also be a board of supervision, and in subsection 3 it is provided :-
The board shall, from time to time, ex amine and audit the books of the society and deposit books of the members; shall supervise the operations of the committee and board of credit; and shall check the cash investment* and securities of the society.
So that you have, first of all, the work of the society limited to men who are known to each other, who are all living in- the same locality, being able only to borrow money which they themselves put into the society, all loans supervised by a committee which they have chosen for that very purpose, and this committee in turn supervised by another committee chosen also from those members who are working altogether to watch the operations of the society. I think that as the committee proceeds with the Bill these various sections which have been inserted to meet just the situation which has been pointed out by the hon. member for West Toronto (Mr. Osier) will become apparent and possibly by the time we have reached the end of the Bill the members will have a very different view as to its purpose.
I had not looked at that section. But that is assuming that the incorporation under this is honest. The point that I take * is that it _ enables dishonest men to become the chief officers of the society and to check themselves. There is no check on that, whatever officers they have control the entire society, they have the appointing of the supervisors, and if they go in to deliberately defraud there is no check except,by the men whom they themselves appoint.