December 14, 1910


Mr. MONK moved the second reading of Bill (No. 11) respecting Co-operative Credit Societies.


CON

Edmund Boyd Osler

Conservative (1867-1942)

Mr. OSLER.

There are some things in this Bill to which I am opposed.

Topic:   QUESTIONS.
Subtopic:   CO-OPERATIVE CREDIT SOCIETIES.
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Motion agreed to, and Bill read the second time. Mr. MONK moved that the House go into committee on the Bill. He said: Perhaps my hon. friend the Secretary of State (Mr. Murphy) would like to look over the Bill before it takes the committee stage. The Bill was thoroughly examined by the Banking and Commerce Committee, and reported favourably. I do not see my hon. friend here now. It is in charge of the Secretary of State, and he may perhaps wish to look it over, although it has been carefully examined by Mr. Mulvey.


LIB

George Gerald King

Liberal

Mr. KING.

My hon. friend the Secretary of State (Mr. Murphy) informs me that he is quite agreeable to have the Bill go through the committee to-day.

Topic:   QUESTIONS.
Subtopic:   CO-OPERATIVE CREDIT SOCIETIES.
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Motion agreed to, and House went into committee. On section 5, Under this Act, societies may be incorporated having for their object or purpose the receiving of moneys on deposit from members and the making of loans to members with or



without security, defined by the petition signed on application for incorporation.


CON

Edmund Boyd Osler

Conservative (1867-1942)

Mr. OSLER.

This section gives unlimited power of receiving deposits, which I do not think is contained in any other Act. There is no restriction on the amount _ at all. Further on it is provided that this company may be incorporated by seven persons with one paid up, one dollar, share, apiece. Then they can lend money to themselves with or without security and the amount of money they may take on deposit is absolutely unlimited.

Topic:   QUESTIONS.
Subtopic:   CO-OPERATIVE CREDIT SOCIETIES.
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CON

Frederick Debartzch Monk

Conservative (1867-1942)

Mr. MONK.

My hon. friend is mistaken in regard to that. There is this limitation, that the only depositors in the funds of the society are the members themselves. That is the rule that obtains in co-operative societies all over the world. The Bankers' Association declared, when this proviso was inserted in the Bill, that they had no objection whatever, to the incorporation, if the taking of deposits and the making of loans were restricted to the members themselves. There was inserted last year by the Banking Committee, a special clause, saying that the minister administering the Bill, that is the Secretary of State, may limit the number and amount of deposits even by shareholders, so that the point of my hon. friend is absolutely badly taken.

Topic:   QUESTIONS.
Subtopic:   CO-OPERATIVE CREDIT SOCIETIES.
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CON

Edmund Boyd Osler

Conservative (1867-1942)

Mr. OSLER.

No, it is true that the money can be received on deposit from a member only, and loaned only to a member, but all that is required of any one in order to become a member is to pay one dollar.

Topic:   QUESTIONS.
Subtopic:   CO-OPERATIVE CREDIT SOCIETIES.
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CON

Frederick Debartzch Monk

Conservative (1867-1942)

Mr. MONK.

Where do you find that?

Topic:   QUESTIONS.
Subtopic:   CO-OPERATIVE CREDIT SOCIETIES.
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CON

Edmund Boyd Osler

Conservative (1867-1942)

Mr. OSLER.

The shares may be $1 apiece.

Topic:   QUESTIONS.
Subtopic:   CO-OPERATIVE CREDIT SOCIETIES.
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CON

Frederick Debartzch Monk

Conservative (1867-1942)

Mr. MONK.

There is no such provision in the Act, by paying a dollar.

Topic:   QUESTIONS.
Subtopic:   CO-OPERATIVE CREDIT SOCIETIES.
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CON

Edmund Boyd Osler

Conservative (1867-1942)

Mr. OSLER.

The shares may be $1 and seven may be the incorporators.

Topic:   QUESTIONS.
Subtopic:   CO-OPERATIVE CREDIT SOCIETIES.
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CON

Frederick Debartzch Monk

Conservative (1867-1942)

Mr. MONK.

In all the big banks too, they do very strange things sometimes.

Topic:   QUESTIONS.
Subtopic:   CO-OPERATIVE CREDIT SOCIETIES.
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CON

Edmund Boyd Osler

Conservative (1867-1942)

Mr. OSLER.

They do. If I wanted to borrow a large sum of money from this company, the company having been incorporated and in existence and receiving deposits of money, I could not borrow that money unless I was a shareholder; but I could become a shareholder, with the consent of the directors, by paying one dollar or taking one $1 share. I say that is no protection at all. This legislation is quite right, if it is carried out in the spirit and the meaning of this Act, but I say that this Act gives an opening for the worst kind of wild cat companies that it is possible to conceive. I understand from the promoter of the Bill that it is intended for the establishment of banks in certain Mr. KING

localities in the province of Quebec, and that it will be a most useful Bill in the districts where it is desired; what I object to, is the possibility of applying this Bill to Ontario and to mining companies and to promoters who would take advantage of such an Act. I say it opens the door to the wildest kind of companies, something which should be most carefully guarded against.

If I remember rightly, the Finance Minister last year was very much exercised about that power, and thought it might be got over by strictly limiting the capitalization in each case, to whatever might be the requirements of the locality, and then from time to time the capital might be increased with the consent of the Minister of Finance, if it was shown that it was going to meet the requirements of the localities where the organizations were brought into effect and required; but without some such restriction as that, this Bill gives the wild-catt promoters and the man who wants to swindle the public, the opportunity of doing it, as no other Bill on the statute-book of Canada does. It would enable any seven people in any locality in Ontario to devise a scheme for the defrauding of the public and to carry it out successfully.

Topic:   QUESTIONS.
Subtopic:   CO-OPERATIVE CREDIT SOCIETIES.
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CON

Frederick Debartzch Monk

Conservative (1867-1942)

Mr. MONK.

I do not see why my hon. friend insists in maintaining that by paying a dollar a man can glide into these societies and organize frauds that have never been practised anywhere and which he fears can only be practised in the province of Ontario. This is a form of law which has obtained in every country which has adopted co-operation. They have it in England, in France, in every country, and it is not right to say that by paying in one dollar you can get into such a society. You must become a shareholder. Under what conditions can you become a shareholder? Not by paying a dollar, but by applying for admission into the society and fulfilling whatever conditions may be prescribed for entrance.

Topic:   QUESTIONS.
Subtopic:   CO-OPERATIVE CREDIT SOCIETIES.
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LIB

Wilfrid Laurier (Prime Minister; President of the Privy Council)

Liberal

Sir WILFRID LAURIER.

What is the amount of the share?

Topic:   QUESTIONS.
Subtopic:   CO-OPERATIVE CREDIT SOCIETIES.
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CON

Frederick Debartzch Monk

Conservative (1867-1942)

Mr. MONK.

The shares are fixed by the statute of incorporation, but they may be $5, $10 or $100.

Topic:   QUESTIONS.
Subtopic:   CO-OPERATIVE CREDIT SOCIETIES.
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LIB

Wilfrid Laurier (Prime Minister; President of the Privy Council)

Liberal

Sir WILFRID LAURIER.

Or they might be $1.

Topic:   QUESTIONS.
Subtopic:   CO-OPERATIVE CREDIT SOCIETIES.
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CON

Frederick Debartzch Monk

Conservative (1867-1942)

Mr. MONK.

They might be $1.

Topic:   QUESTIONS.
Subtopic:   CO-OPERATIVE CREDIT SOCIETIES.
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December 14, 1910