I am just coming to that. The statement has been made that the Farmers Bank question exercised a great influence in electing certain members to this House at the last election. I want to point out that in the election of
1906 the hon. member for North Oxford had a majority of 124 and. in 1911 his majority wae increased to 295. You do not find that the people were swayed very much by the arguments upon that occasion. In 1908 I was defeated by 93 votes, and in 1911 I was elected by a majority of 24, not a very great change. I made no use of these arguments; I believe that there are very few members in this House, ae the hon. member for North Ontario (Mr. Sharpe) has pointed out, as a result of any influence exerted by the Farmers Bank question.. And I believe that is a fact in the county from which I come. There was an issue that overshadowed every other so far as people of that county were concerned and that was reciprocity.
I am not going to take up the time of the House any further. I wish to state, however, that I am glad to have an opportunity of placing myself on record here to-night to show where I stand with regard to the people who have suffered through the lack of attention-or if I am not permitted to use a harsher term,- through the failure of the trustee to see that the management of this bank were not permitted to defraud the people of Canada to the extent to which they were defrauded. This bank should never have been permitted to be incorporated under the name The Farmers Bank of Canada unless there was an absolute guarantee that they would carry out the business which they claimed it was their intention to carry out. They established branches in small places throughout the country where there were no banks and in this way endeavoured to lead the farmers of the various counties to believe that their institution was to be for the benefit of the farmers. It was well known in the industrial centres and I believe that it was well known by the Banker's Association before the collapse came that the Farmers .Bank was in a most deplorable. condition. It will be observed that very little or no money was lost by the depositors in the towns and cities; the greatest losses were sustained by depositors in small places who had been led to believe that this institution was for their own special benefit.
I shall have the greatest pleasure in supporting this measure. I do not know that I would have spoken at this late hour had it not 'been for the deliberate attempt on the part of the hon. member for North Oxford (Mr. Nesbitt) to misrepresent the attitude of the hon. Minister of Labour, whose
arguments in defence of this measure are, unanswerable. Hon. gentlemen opposite talk in a general way around the subject, but I have failed to observe any arguments put up by them which successfully answered those advanced by the Minister of Labour.
Permit me to conclude by saying that in the few remarks which I have made I have attempted to discharge the duty that I owe to the people of my constituency, which I feel I would owe to them in the same measure if not a dollar had been deposited in this bank by persons in my county.
The facts in connection with the very important measure that is now before the House have been dealt with at considerable length, and I would not undertake to address you, Sir, were it not 'for the fact that I hold very strong views upon this subject, and that I do not careto pass a silent vote upon a
question involving such far-reaching principles as are involved in the one now under consideration.
The hon. member who has just taken his seat (Mr. Sutherland) addressed himself to the circumstances surrounding the failure of the Farmers Bank in his own
1 a. m. riding. I have no particular objection to take to anything which the hon. gentleman said. I have the greatest sympathy with any hon. member who represents electors who were unfavourably affected by the failure of this bank. I am not going to make any assertion as to what my attitude might possibly be if some of my constituents were similarly circumstanced ; but whatever my position might be, I do not for a moment contend that any change of attitude from the one which I now propose to take would he justified by the law or by the facts here presented.
I submit that public moneys should be used in the interest of the public; I make that statement boldly and broadly. We are here as a public body, as the highest court in this land, to deal with the money of the people and to deal with it in a manner that will be for the advantage of the country at large. No matter how sympathetic we may be in respect of the peonle who met with losses by reason of this failure, I submit that the way to remedy or remove the difficulty which has arisen is by the use of our private fortunes and not by giving away moneys which do not belong to us. If any person wants to be a philanthropist, he has a perfect right to carry out his philanthropic ideas by the use of his own private means;
but the carrying out of his philanthrophy by using the money of other people when he has no warrant or authority for doing so is a different matter. There is an old story, related, I think, by Mark Twain, that an enterprising gentleman once said that he was willing on certain occasions to sacrifice all his wife s relations for certain purposes. It is, perhaps, an easy matter for one to sacrifice, without any twinge of conscience, his wife s relatione, 'and it is, perhaps, easy for some persons to be generous with other people's money. One of the chief objections I have to this legislation is that we are applying public moneys to private pur-[DOT] poses and there is no justification whatever for such application.
It has been said that because we on this side of the House venture to express our opposition to this measure, we do not sympathize with the people who lost their money. We can not always carry out our sympathies in matters of this bind. There are public duties which men have to perform and which they carry out irrespective of whether or not their private sympathies are in line with their action. Speaking for myself, if this legislation, were a mere matter of sympathy, a mere matter of helping out the people who lost money through the failure of the Farmers Bank, I should be very glad to support it; but this legislation is establishing a dangerous policy which cannot by any possibility be universally applied, and that being the case, I cannot vote for it.
Something has been igaid by the hon. member for Halton (Mr. Henderson) about an attack made upon him by the junior member for Halifax (Mr. A. K. Maclean). It is a new experience that the hon. member for Halifax should be charged with having made an attack upon anybody. The hon. gentleman has been in this House for quite a number of years, and I really thought that his weaknesses were in the other direction ; that if an attack were really necessary the hon. member for Halifax was the last man who should be chosen to make it.
I listened to his speech last night and heard all he said in reference to the hon. member for Halton (Mr. Henderson), and I am pleased to say I cannot find anything in it which would in any way constitute an attack upon the conduct or otherwise of that hon. gentleman. It is true that the junior member for Halifax said that the hon. member for Halton was the author of this trouble which this country is put to in regard to the Farmers Bank. It is 302i
perfectly true that this political agitation which was started in this House some four years ago was started by the hon. member for Halton. It is true and he has stated himself that he did not formulate the shape in which that attack was to be made that he was simply the spokesman of the party; that is what he says, and that he carried forward their views. There is no person on this side who was supporting Hon. Mr. Fielding's party at the time who has any doubt as to what was the purpose of that attack. That attack was made for political purposes; in the first instance to make a political attack on Mr. Fielding who was a strong man in his party. It was hoped that by making this attack on him, by impugning his capacity and integrity as a minister of the Crown he would be weakened in the country generally. That was one of the reasons; the other was the holding out of a bribe generally to the many people in Ontario and elsewhere who were involved and who had lost their money. Therefore there was a double purpose and thait purpose is carried on to the present day. The attack upon the late Minister of Finance is not now 'So strong before the minds of hon. gentlemen as they confess. This matter is now on a bribery basis. I submit to you that when one is running an election in a county where some of the electors have lost money in an institution such as this bank, if the person who is running the election will stand up on the platform and say: If I am returned to power and the
party to which I belong is returned, and we are in a position to form a Government and so get charge of the Treasury Benches and have charge of the consolidated revenues of this country, we will pay you men the money that is coming to you. I submit to you that, as I understand the election laws in this country, that is bribery, that is an offer held out, an inducement held out to the electors pure and simple to vote a certain way and if the voter votes that way and his vote is successful he will be paid back his money. That, as I submit to you, is a corrupt act and this Bill, which is to enable the Government to get hold of a certain amount of the consolidated revenue of this country and to dole it out to these voters, is nothing short of promising them a bribe and then implementing that promise by doling out the public money of this country. That is the view I have of the situation and I think that is the view that any court of the country would have of it if the ease was really tried upon its merits. If the
*hon. junior member for Halifax (Mr. Maclean) made any statement with reference to the hon. member for Halton that could be construed into an attack, it was the bald and bare simple statement of those circumstances of the facts
which are apparent that the failure
A great deal has been said in regard to the conduct of Mr. Fielding and the Treasury Board in granting this certificate. The hon. member for South Oxford (Mr. Sutherland), put forward the strong assertion a moment ago that none of us on this side had attempted to answer the argument of the Minister of Labour in the case that he put forward with respect to the connection of the Hon. Mr. Fielding with the transaction of issuing the certificate. It is easy to make a strong statement if one gets the premises that just suit him; and if he takes the wrong premises, that is wrong as far as the facts are concerned and lays down a foundation just to suit himself, knowing what he is going to build upon that foundation and argues on arguments that are not borne out by the facts, it is easy to make an argument that will have some shape and colour to it. The Minister of Labour argued from start to finish that Mr. Fielding was a trustee. I submit to you that there is not a scintilla of law, facts or evidence, that shows that Mr. Fielding was a trustee, and the hon. gentleman who was making his argument, if he was familiar with the fact, must have known that the evidence did not sustain the position which he took; and when he argued throughout that Mr. Fielding was a trustee he was arguing along lines that were not borne out by the facts. The Hon. Mr. Fielding or the Treasury Board were merely officials made by statute to perform statutory functions which were defined by the statute. As far as I can see they had very little judicial function to discharge, hardly any function of a judicial character. Their position was almost entirely administrative. When you go to a registrar of deeds to get a deed recorded you
go before a magistrate and the witness swears to it and you have it ready to register. In Nova Scotia you produce a deed to the registrar, it is properly signed before the magistrate showing that the witness s;gned it, and sworn to before the magistrate. That registrar of deeds is bound to accept that document and put it on the record; he has merely the mechanical functions of receiving that document and putting it on the official record. He has no judicial functions in the matter at all. If the statute is complied with, if there is a witness to the document, and if that witness is sworn before a proper officer who has authority to receive an oath or affidavit, the registrar must put that document on the record.
That is a sample of the functions of the Treasury Board. The statute prescribes certain simple regulations, and, wlien they are complied with, whether the board likes it or not, or whether they have anything to say about the personnel of the manager or officials of the bank or not, they have no discretion in the matter whatever. I submit-and this is perhaps one of the things that has not been brought out as strongly as it ought to be-that the personnel of the manager is a matter on which the Treasury Board has nothing to say. I submit that the matter of appointing the directors and secretary of a company-a bank is merely a company-is entirely for the subscribers and shareholders. It is their business, and is it to be said that the seven hundred odd of intelligent people of the province of Ontario who were subscribers to this institution, had not the capacity to appoint a manager? I have here a list of the subscribers. It would be rather criminal to inflict upon the House the reading of it, but I find that it contains 620 names, ranging all over the towns of the fair province of Ontario-two or three in some towns, as high as ten in others, and many from the larger cities. These people undertook to enter into the semi-private business of running a bank. I submit that those men are not in need of a guardian; they are not in need of some one to take off their clothes and put them to bed at night and to wash and dress them in the morning; they are not infants, but grownup people of the premier province of Canada, whose people boast of their education, of their business ability and capacity. Seven hundred of these men banded themselves together for the purpose of
carrying on a bank. Is it to be said to you, Mr. Speaker, or to the country or to the Parliament of Canada, that those 700 people, representing in the vicinity of $600,000 of the money of the people of Ontario, were absolutely unable to appoint a manager to look after their business, and that, forsooth, the Hon. Mr. Fielding had to step out .of his way to do it for them, and to find out what they were doing?-for that is what it amounts to. We are told that the responsibility of selecting this manager was entirely and altogether on the shoulders of Mr. Fielding, and that because he did not tell them how to appoint a manager he is entirely liable and responsible for whatever may have happened in connection with this business.
There seems to be an idea that this iBank Act contains a great many things which it does not contain. There is an old saying that any man who professes to be a lawyer and will give an opinion on a statute without reading it, is a fool; whereas the man who would not give an opinion on common law is not much good as a lawyer. I submit that a person, particularly a layman, who undertakes to say what the requirements of the Bank Act are without ever reading it is taking some responsibility. What powers had Mr. Fielding under this Act? They are laid down very concisely. He had to carry out the provisions as they are laid down. He could do no more; he did no less. The sections having reference to what we are discussing are four: Nos. 12, 13, 14 and 15. Section 12 says:
For the purpose of organizing the hank, the provisional directors may, after giving ten days' public notice thereof, cause stock books to be opened, in which shall be recorded the subscriptions of such persons as desire to become shareholders in the bank.
2. Such books shall be open at the place where the chief office of the bank is to be situate and elsewhere, in the discretion of the provisional directors.
3. Such stock hooks may be kept open for such time as the provisional directors deem necessary.
Section 13 says:
So soon as a sum not less than five hundred thousand dollars of the capital stock of the bank has been bona fide subscribed and a sum not less than two hundred and fifty thousand dollars thereof has been paid to the minister the provisional directors may, by public notice, published for at least four weeks, call a meeting of the subscribers to the said stock, to be held in the place named in the Act of incoration as the chief place of business of the bank, at such time and at such place therein as set forth in the said notice.
2. The subscribers shall at such meeting,-
(a) determine the day upon which the annual general meeting of the bank is to be held; and,
(b) elect such number of directors, duly qualified under this Act, not less than five, as they think necessary.
3. Such directors shall hold office until the annual general meeting in the year next succeeding their election.
4. Upon the election of directors as aforesaid the functions of the provisional directors shall cease.
Section 14 says:
The bank shall not issue notes or commence the business of banking until it has obtained from the Treasury Board a certificate permitting it to do so.
2. No application for such certificate shall be made until directors have been elected by the subscribers to the stock in the manner hereinbefore provided.
I now come to the last section I am going to quote, and I wish hon. gentlemen to note what authority the board has under this section:
No certificate shall be given by the Treasury Board until it has been shown to the satisfaction of the board, by affidavit or otherwise, that all the requirements of this Act and of the special Act of incorporation of the bank, as to the payment required to be made to the minister, the election of directors, deposit for security for note issue, or other preliminaries, have been complied with, and that the sum so paid is then held by the minister.
2. No such certificate shall be given except within one year- from the passing of the Act of incorporation of the bank applying for the said certificate.
All that Mr. Fielding could inquire into was: Did they subscribe the stock; was the money paid into his credit as the Receiver General; were the directors appointed; Those were the only three things that he could inquire into. The affidavit of Mr. Travers was filed in the office of Mr. Fielding at that time, setting forth all these facts. All the necessary papers accompanying that affidavit were there, and those papers were submitted to the experienced eye of the deputy Minister of Justice, who was asked to express his opinion as to whether the necessary papers were there, and if the necessary facts had been submitted to the department.
The Deputy Minister of Justice replied that everything was done that in his judgment was necessary, if they believed the affidavit of Travers, and be it remembered that at that time there was not one word abroad that would in the slightest degree reflect upon the character and standing of Mr. Travers. These six or seven hundred men were called together in the city of Toronto on the 26th of October, 1906, by regular notice inserted for thirty consecu-
five days in the Toronto Globe and in the Mail and Empire, and after four publications in the Royal Gazette, as the law required. This was ample notice for everybody to see that his interests in the bank were safeguarded. These notices were issued and this meeting was held after this action was instituted and discontinued or thrown out of court, and if the men who attended this general meeting of shareholders had any fears about the appointment of Travers, they had ample opportunity of finding out all about him, and that was the time and the place to dispense with his services if they so wished. However, every act of Travers was unanimously confirmed by this meeting, and his appointment as manager of the bank was also confirmed, all of which appears from the report of Sir William Meredith. At that meeting a board of directors was appointed, and the names of these directors will no doubt appeal to hon. gentlemen who come from the province of Ontario, as those of very respectable men. The first name on the list as honorary president is that of a man whom I have heard about since I was a boy, the name of a gallant gentleman, Colonel R. R. McLennan, of Cornwall, Ontario, whom we knew with a great deal of pride as one of the first Scotchmen in this Dominion. Then comes the name of Colonel James Munro, of Embro, Ontario, a gentleman of whom my hon. friend from North Oxford has spoken so highly. Then follow the names of Allan Eaton, Esq., of Mount Nemo, Ontario; Robert Noble, Esq., of Norval, Ontario; W. G. Sinclair, Esq., of Zimmerman, Ontario; A. Groves, Esq., M.D., of Fergus, Ontario, and N. M. Devean, Esq., John Gilchrist, Esq., of Toronto, Ontario, and W. Beattie Nesbitt, M.D.
Need I tell the Conservative members from Ontario anything albout Dr. Beattie Nesbitt? Need II tell the Prime Minister anything albout this man,
was complied with in the organization of the hank; and he was able to tell Mr. Fielding that this strong board of directors had appointed him general manager of the bank and commissioned him to ask for the certificate. He showed Mr. Fielding that the necessary money was paid in; he produced lists showing the neces^ry subscriptions and that everything was straight and above board and in order, so far as any human being could see, and he demanded that the Treasury Board give him what he was entitled to under the law of the country. I submit that in the circumstances neither the Minister of Finance nor the Treasury Board would be justified in refusing him that certificate. But still we are told that Mr. Fielding should go beyond the duties the Parliament otf Canada imposed on him and do something extraordinary which was never done before. I submit, Sir, that the practice which was followed in granting the certificate in this case, is the practice that has been followed ever since Confederation and ever since we had a Bank Act.
There is not the slightest scintilla of evidence-it cannot be found either in the debate or out of it-that any government, either Liberal or Conservative, has done anything except what was done in this particular case. Therefore there is not the slightest justification for putting forward the plea that Mr. Fielding and the Treasury Board should have gone outside of the well-beaten path on this occasion.
The point I want to show particularly, on which perhaps not very much has been said and not much is necessary, is that the appointment of this man, who afterwards turned out to be a disappointment and to be a bad man-to put it mildly- was not the responsibility of Mr. Fielding or of the Treasury Board: There is not one word in the Bank Act giving the Treasury Board power to inquire who the manager shall be. There is not the slightest difference between the organization of a life insurance company or a steamboat company or any other company, where a certificate is required in order to commence business, and this particular institution of a bank. You cannot carry on life insurance or fire insurance business without coming to the Department of Finance and getting a certificate; but whoever heard of the Finance minister inquiring as to who shall be the manager of a life insurance company or a fire insurance company. All that the Treasury Board has to do is to see that the requirements of the
Bank Act are complied with and then to issue the certificate.
A great deal has been said about the way in which the money was raised. It is said that the money was raised by taking notes from men and women who wanted to become subscribers for stock in this bank. In ordinary, every-day business, a man's note, if he is good and has property and is a man of his word, is perfectly good payment.
I take the responsibility of saying in the presence of eminent lawyers in this House, that a note is payment. As a matter of law, every note given to Mr. Travers, or whoever got it, in view of those stock allotments was a payment and, particularly in view of the finding of Sir William Meredith in this particular that the notes were met, an absolutely and good payment to which no exception can be taken. The idea was not new among those who had to do with this bank, that is, whether this is good payment or not or whether they had the right to accept these notes or not. The provisional directors thought proper to take legal advice on the point as to whether they had the right to take notes in payment of subscriptions. They took the advice of a firm of lawyers, reputable, so far as I know. There a-e a good many reputable lawyers in the city of Toronto whom I know; and I cannot conceive of a firm of lawyers, that is not fairly good and whose opinion is not to be treated with respect, being able to hold its shingle out in the great city of Toronto. Therefore I presume that this firm of Urquhart, Urquhart and MacGregor is a fairly good firm of lawyers, perhaps a first-class one. I am told by the hon. member for Welland (Mr. German) that they are a good reputable firm. They were asked their opinion on this very question as to whether it was lawful to take notes for this purpose, and they put their opinion in writing on the 26th of June, 1906, in a letter addressed to A. S. Lpwn, Esq., one of the provisional directors as follows:
Dear Sir,-We have considered the questions submitted by you to us regarding the power of the provisional directors of the Farmers Bank of Canada, to accept stock subscriptions where the parties have given notes in payment of the stock in place of, or in addition to giving their subscriptions in the usual manner, the notes maturing at a time different from the payments in the subscriptions. We have not gone into the question of whether there would he any liability under the subscription without reference to the notes or whether both would be read together, but we are of opinion that the provisional directors have the power to accept
stock subscriptions which are made in this way, it being a matter that would come within the reasonable discretion of the directors.
The provisional directors are, of course, simply trustees, and any money or promissory notes they may receive in connection with the organization of the bank are held by them in trust for the bank. If these subscriptions are not paid the allotment could and no doubt, under the bylaws, could be cancelled by the directors, to be elected, and the stock could then be resold. We consider the question one in which the directors should use their reasonable discretion.
It would appear to us that the promissory notes might be of advantage to the bank, in the event of any subscriber seeking to dispute his subscription but this scarcely comes within the question submitted to us.
That settled the question so far as any doubt existed as to the propriety of accepting those notes. The commissioner himself, the Hon. 'Sir William Meredith dealt with the question, and he certainly did not take any exception to the opinion expressed by this firm of lawyers. At page 5 in the report he says:
Questions having arisen as to the legality of taking promissory notes in settlement of subscriptions for shares, and as to the payment of commissions on such subscriptions, at a meeting of the provisional directors held on the 23rd June, 1906, it was decided to take the option of Messrs. Urquhart, Urquhart and McGregor, a firm of Toronto solicitors, on the questions and to instruct Travers not to accept notes in lieu of cash and that the conditions set forth in the form of application should be adhered to 'on a cash basis unless otherwise specially authorized by the board.'
Apparently only the first question was submitted to the solicitors, and their opinion as to it was that the provisional directors had power to accept subscriptions where the applicant gives his promissory note in payment for the shares in place of cash.
Sir William Meredith does not a,ay that it is right or that it is wrong. If he thought it was wrong, he would have so expressed himself. The only comment he makes on this is:
I have no doubt that one reason, at all events, and probably the main one for accepting promissory notes was that Travers might be enabled by means of them to raise money to make up the cash deposit which had to be made as one of the conditions precedent to the issue of the certificate of the Treasury Board.
Be docs not say that there is anything wrong .'about it; and that being the case and the provisional directors and the manager having acted upon the -advice of this reputable firm of lawyers, there was nothing wrong in getting the money for the starting of the bank by the use or manipu-
lation, if you choose, of those notes which were perfectly good and of which the makers were substantial men, who, when the proper time came, paid for their notes. The commissioner finds, generally speaking, that these men paid their notes, and the money found its way into the hank, and that there is no fault to be found on that ground. He bases his finding on another phase which I will briefly deal with.
I want to connect the position of the Government on this question with the report of the commissioner. The position of the Prime Minister was given yesterday by the Minister of Finance as follows:
If returned to power we will make full inquiry by Royal Commission into circumstances connected with organization of Farmers Bank an 1 granting certificate by Government. Our action with respect to depositors will be governed by result of inquiry.
What was the inquiry for? I submit that, after all, it did not discover anything new, and the basis upon which they are placing their action to-day was well known before this commission was issued. They knew everything that took place in connection with the issuance of this certificate fully and absolutely, and so far as that is concerned there wa6 no necessity for a Royal Commission and its findings. The commissioner was appointed in the hope that he would place the blame on the head of Mr. Fielding. I find on page 10 of his report an extraordinary statement-I do not know exactly what it means-as follows:
I was asked by the representatives of the shareholders and the depositors to find neglect of duty on the part of the Finance Department.
' I was asked '-I do not know what that means. Surely no member of this House, or any one else, would dare approach this distinguished judge and tell him, apart from the evidence submitted publicly, to find anything except what the facts would sustain.
Very good. I did not know that these men were represented by counsel. So far as I know, the department as such was not represented by counsel, that is, Mr. Fielding was not represented, and I understand the Government was represented by Mr. Hodgins. I do not know Mr. Hodgins, but I have followed his examination, and certainly, if it is any
consolation to him, I give him credit for having worked hard to root up everything that could be reached and place it before the commissioner. But I was not aware that there was anything in the terms of the commission to the effect that any person would be represented by counsel, particularly any person who had not been accused. However, my hon. friend explains that the parties who lost money were represented and exercised the right of impressing their views upon the commissioner. After hearing all they had to say and after touching here and there lightly upon matters that he would like to have bad done slightly different, the commissioner strikes the nail on the head and gives his answer in a way not at all in line with that urged upon him by those who lost their money in the Farmers Bank. It is true that juries sometimes take many hours to reach a verdict. During those hours in a jury room many opinions are expressed which look as if the final verdict would not be what it turns out to be; but what counts most, and is conclusive and absolute, is the verdict they finally reach. And I submit that what counts after all, and the only use we have any right to make of these findings, is the decision of the commissioner. He says:
I am unable to find that in this there was any negleot of duty on the part of the department, or to see that anything more than was done could have been done, even if Mr. Van-koughnet's letter had stated, which it did not, that the promissory notes he referred to were notes that had been given in respect of shares included In the list furnished to the department when the application for the issue of the certificate of the Treasury Board was made.
Notwithstanding the irregularities on the part of Travers and his misconduct in connection with the application for the certificate, which I have mentioned, the evidence satisfies me that if the bank had been prudently and honestly managed there is no reason why it should not have succeeded. The promissory notes that had been given by subscribers were for the most part good and were subsequently paid, and while it is true that if the certificate of the Treasury Board had not been granted, the money of the shareholders and depositors would not have been lost, the efficient cause of that loss was the recklessness and fraud of those entrusted with the management of the bank, and not the granting of the certificate.
If anything is to be gathered from the Prime Minister's statement that his conduct would be governed by the finding of the commission, his conduct in this case would have to be that there was no fault at all on the part of the Finance Department, that no trouble resulted from whatever irregularities might have occurred in that do-
partment; and therefore that the country was not dn any way liable and that those unfortunate people will have to look for a remedy somewhere else than at the hands of the Government. That is the logical conclusion from the statement of the Prime Minister: ' I will be governed by the findings of the commission,' and the commission finds that there is no liability. We find that the Prime Minister and his Government go entirely outside of the finding and try to seek refuge elsewhere; and they are just as bare of defence from this commission, and more so, than if it never existed.
In conclusion, let me point out the unfairness of the Minister of Finance in presenting the case yesterday. Such unfairness would not be tolerated in any organized court. We have the evidence sworn to; it was printed at the expense of the country and was available to every member of the House; but, instead of evidence, the Finance Minister put before us loud-mouthed speeches made by rampant partisans in the House four years ago.
We and the people of this country are asked to pass judgment upon the conduct of Mr. Fielding by reading not the sworn testimony upon which a decision was reached by an eminent jurist of the province of Ontario, but speeches made by hot-headed partisans in this House who assumed no responsibility whatever for what they were saying. The Chief Justice of Ontario reached a certain conclusion, upon certain facts, and if the Government are not going to abide by that decision, they must reach a different conclusion from the same evidence, and ought to be able to say to the country that the Chief Justice was wrong. But the Minister of Finance takes the extraordinary course of refusing to accept the finding of the Chief Justice of Ontario, to whom they submitted this case, and makes a decision of his own upon absolutely different material which is not evidence at all.
I have nothing to say against the hon. member for Halton (Mr. Henderson), or against the hon. member for West Toronto (Sir Edmund Osier), but I will say that there never were during my time in this House two such hidebound partisans as they are. They made speeches in this House four years ago in condemnation of the Hon. Mr. Fielding, and held out bribes to the electors of Ontario for partisan purposes; and that stuff is submitted to us as evidence, to the exclusion of the sworn testimony that was given before the commissioner. I submit that this presentation of the case is most
unfair, most illogical, and without precedent in the annals of the courts of Canada.
The hon. gentleman had before him the crystallized finding of the distinguished' jurist, the Chief Justice of this province, based upon sworn testimony heard before him. If the evidence was too voluminous for the hon. gentleman to submit to the House, why did he not say: upon this evidence I am satisfied to accept the finding of the Chief Justice of Ontario? Why did he not do this instead of going outside this evidence and putting upon 'Hansard' speeches which were made four years ago for the purpose of making party capital against a distinguished Minister of the Crown? I submit that that is not evidence at all, and that the hon. Minister will search in vain the records of any British parliament or of any court of responsible standing in this country for a precedent for what he has done in this instance. I am sure that eome day, when he is not carrying out the party purposes which he now has in view, it will appear to hian as a most extraordinary thing that he of all men should have taken this course. I could understand a layman doing it; I could understand a layman believing the stories told at the fireside or on the street and thinking that they were just as good as sworn testimony; but a jurist like my distinguished friend the Minister of Finance has no such excuse. The answer that he made yesterday was ample evidence of the fact that he fully understood the nature of the evidence which he was producing, because he said: ' What I am presenting to the House is not the best evidence.' The fact is that he left out the best evidence and has given us the worst evidence that he could possibly give.
A great deal has been said about the action that was brought on with which Leighton McCarthy had something to do. I want this House and the country and you, Sir, to appreciate the circumstances. There were only four or five people involved in that action. Their names 'are a matter of record; everybody knows who they were. When it came to the point of testing out their rights in court, they threw up the sponge. The records show that Mr. Travers made an affidavit before Mr. Justice
Anglin in which the whole -story is told. The evidence was put on record by Sir William Meredith; he accepted thie evidence, -and upon that evidence as submitted to Mr. Justice Angflitn the -action was dismissed as an abuse of the process of the courts, that is, issuing a writ and using the process of law for improper purposes. The judgment wherein Mr. Justice Anglin dismissed this action may be found of record in the courts in the province of Ontario. Mr. Fielding and others would cut -a sorry figure if they told the 700 business men in the province of Ontario who had worked up to the very 2 a.m. point where they were entitled to get tlhis certificate: An
action was -brought by four of you for some purpose or other; that action has been dismissed; there was not a word of truth in the -statement of claim. Without any authority for doing so, I will take the responsibility for suspending the operations of this institution for which the Parliament of Canada issued a charter. It is true that you are authorized to do business by act of Parliament; it is true that you have complied with every provision of that act of Parliament, but I take your charter -away simply because, forsooth, some persons in Ontario got a little disgruntled and brought action. Th it is not the position any sane business man would take. Any unfavourable results which there were, had followed not from the granting of this certificate, but from the fact that dishonesty prevailed in the management.
A most extraordinary position is taken by our mild-mannered and capable friend, the Minister of Finance.
He plunges into a question of what I regard as theology, and if he were a Presbyterian like myself I would ask him to discuss with me the question of predestination and the freedom of the will and the sovereignty of Providence, the omniscience and omnipresence of the Great Being who governs and rules us all. His reasoning is: If this charter had not been granted, there would have been no failure
beautiful theology ! If no bank charter, subscriptions would not have been asked for all over the country; if subscriptions had not been obtained there would never have been a meeting of shareholders, and no directors would have 'been appointed, and no general manager. No certificate, no bank, no loss; that is the extraordinary theology applied to business, that is put forward by the diis-
tinguished gentleman who is the first man in financial circles in this country. This, applied to every day life, would result in this way: John Brown is the creation of God, because we -believe that all men are so created; John Brown has committed murder; if John Brown had not been created there would have been no murder; therefore the Creator of John Brown is responsible for the sin of murder. -My hon. friend will -see where his theology will lead -him. It will lead him to a doctrine of the origin of sin which I have never upheld, but to which some people adhere. According to the theology of my hon. -friend John Brown is a murderer, the Almighty created John Brown and therefore the Almighty is guilty of the sin of murder because he created John Brown. That is the theology of my hon. friend, and if his law is no better than his theology I would be sorry to -see this country following him very far.
One word of explanation : I am one of the double victims of the unfortunate state of the Farmers Bank, -being a shareholder to a small extent. I am paired with the hon. member for Annapolis, and therefore will not be able to vote. I wish, however, to be put on record as saying that while perhaps my personal interest might be to vote for the Bill, after hearing the discussion and becoming seized of the facts, my duty as a representative of -the constituency I have the honour to sit for is to vote against this Bill and to vote against my giving away one and a quarter millions of the people's money for the purpose of redeeming pre-election promises.
been diverted from the purpose for which they had been voted.
How did the Government ascertain that fact? Merely by setting at work two or three expert accountants from the Railway and Finance Departments. Those gentlemen were able, after fifteen days' inquiry, to tell us what was the financial condition of Mackenzie and Mann, and especially of the Canadian Northern. If the same gentlemen were able, after two weeks, to make a report on accounts as intricate as those were, I think it would have been easy for the Government to appoint the same experts to investigate the business of those banks. They could have gone to the receivers of La Banque de Saint-.!earn and of La Bamque Ville Marie and, moreover, they could have taken communication of certain documents now in the possession of the Treasury Board. I think that after a couple of days' work if we compare what was to be done with what was done in a fortnight in the case of the Canadian Northern, they could have given us a detailed and complete report which would have enabled the Government to put the depositors of those banks in the province of .Quebec on an equal footing with the depositors of the Farmers Bank. It was not thought proper to do .so, and it is for those reasons that I am against this Bill and in favour of the amendment asking a six months' hoist.
I cannot see any good reason why this House should vote on this Bill even relying on the report of the commission appointed by the Government. The commissioner does not ascribe the wreck of the bank to the irregularities with regard to issuing the certificates, but to the mismanagement of the general manager.
He said that even if irregularities had preceded the issuing of the certificate he did not see why with good management the 'bank should not have been a success; and that is my own opinion. I think the Government is creating a very bad precedent in asking the House to vote this money, unless it wants to establish the policy that the Government should guarantee the deposits of all banks, and should reimburse the depositors of the banks which have already failed.
I have read an excellent opinion on this matter in a good Conservative paper. I find in the Montreal Star of this date the f blowing:
It is all very well to argue that the certificate should not have been issued to the Farmers
Bank without an inquiry, and that the failure to hold such an inquiry renders the country morally responsible for the losses which the wrecked bank inflicted upon its depositor-'; bui every man in Parliament must realize that it will be very easy to get up a fairly plausible case-probably on some other count-for any wrecked bank, and so justify the repayment of its depositors. A failure on the part of the Government to take any extraordlanry sted, which can always be suggested so easily after the disaster, would be quite sufficient to justify politicians in Implementing pre-election promises to recoup angry depositors.
Sir William Meredith, the Royal Commissioner who inquired into the case of the Farmers Bank, did not say that the certificate should not have been issued. All he said was that an inquiry should have preceded such a step-an inquiry justified by the warnings which reached the Finance Minister. This may be true; but it is a compelling ground on which to recoup depositors? The mischief will not be limited to the $1,200,000 voted. Our public men will find that this Act will have created a precedent which will end in compelling a practical Government guarantee of all hank deposits. And, if this latter is good public policy, It should be accepted openly on its face, and not as a by-product of quite another proposal.
I am entirely of this opinion. If the
Government want to guarantee bank deposits they should make it their settled policy, and not do it as the by-product of another proposal. The hon. member for North Ontario (Mr. Sam. Sharpe) said that the efficient or proximate cause of the wrecking of the bank was the issuing of the certificate due to the negligence of the late Finance Minister. I take issue with that. I rather think that the wrecking of the bank was caused by the mismanagement of Travers, and by the mining speculations of the late Dr. Beattie Nesbitt. I think the Keely Mine was the causa eausans of the wrecking of the bank rather than the negligence of Mr. Fielding. I do not want to delay the House any longer, but I intend to vote against this Bill because I think the Government is not justified in voting the money.
Representing a riding in which there are a great many depositors who lost their money in the failure of the Farmers Bank, I feel it my duty to say a few words in their behalf-not for political purposes, for I believe this question is too serious to be treated in that way. In the constituency which I represent there were two branches of the Farmers Bank with about 600 -depositors representing about $120,000 in deposits.
We are told by some hon. members that the depositors of the Farmers Bank do not deserve the sympathy of the people and
should therefore receive no consideration from this Parliament because they put their money into this bank in order to get the benefit of its higher rate of interest. I deny that. The banks that paid a low rate of interest in my riding had no other bank within six and nine miles of them, and it is only natural that the people should support their home bank. The Farmers Bank paid the same rate of interest, namely 3 per cent.
We have heard a great deal from hon. gentlemen opposite to the effect that we used this legislation as a bait in the campaign of 1911. I can certainly say that the gentleman I defeated at the last election held out this bait for political purposes. In the districts where the branches of the Farmers Bank had been doing business he pledged himself as strongly as he possibly could; he said that if returned to power he would do all he could to have the depositors reimbursed. Just to show the inconsistency of this gentleman I may point out that he voted against the resolution brought down in this House for the appointment of the Royal Commission to investigate the Farmers Bank, yet when he wants the votes of the electors he tells them that he will do everything he can to have the depositors reimbursed. He was not satisfied with going around amongst the people making these promises. A few nights before the election a special meeting was called of the depositors of the Farmers Bank. The gentleman who opposed me was there. I received no notice of the meeting or invitation, and I live only six miles from where it was held. The other gentleman's home is 20 miles away and certainly if the meeting was not called by him and he had received no invitation he must have had a very strong instinct.
Since the failure of the Farmers Bank several depositors of my riding have had to be sent to the House of Refuge, and unless some relief is quickly forthcoming a great many others will have to follow. This legislation applies only to the depositors of the Farmers Bank, and I hope the members of this House will not treat this Bill in a sectional or political way. Let us look at it from the national standpoint. The commissioner's report clearly shows, and it has been pointed out by the Finance Minister and other hon. members of this House, that the failure of this bank was due to the negligence of Mr. Fielding, the Finance Minister of that day. and I believe that is perfectly true. I believe it is the duty of the Government to
reimburse these depositors. I have a clipping here from the London Advertiser, one of the Liberal papers of western Ontario, which contains the following ridiculous statement under a scare heading:
Hopes to have the Senate kill the Farmers Bank Bill-Government urging Upper Chamber to Save it from Embarrassing Situation-Proposed Measure is merely one of Politics.
[Special to the Advertiser.]
Ottawa, May 13.-It begins to look as though the Borden Government was ' playing politics ' with its proposed measure to reimburse the defunct Farmers Bank. According to a well-defined rumour on Parliament Hill to-night, the Administration is planning to karikari its own offspring, and is seeking to ' quiet ' protest among its own ranks by assurances that the reimbursement Bill will be killed by the Senate.
There is no gainsaying the fact that the Government as a whole has no heart for the reimbursement legislation. Despite the definite preelection promises of Hon. T. W. Crothers and other Ontario Conservatives, who made reimbursement one of the definite planks in their election programme, the purpose was, up to the end of last session, to tell the depositors, in the words of one frank exponent of Government policy, to * go hang.'
It is disgraceful for any paper of any standing in the community to make such absurd and unfounded statements as I have read from this newspaper. If I thought that I was supporting a Government that was trying to hoodwink me and my people as this newspaper states, I would resign my seat. I have too much confidence in this Government to believe they would do any such thing. If there is any gentleman on the Liberal side of the House who can rise now and substantiate what this newspaper says, I would like to know it. I defy any of those hon. gentlemen to get up here and endorse the statement made by this newspaper.
This is my third session attending this Parliament, and as a business man I have been trying to figure out what the game of the Opposition in this House is. As a batter of fact I do not believe they are sincere in one-half of what they do in this House. They waste too much time altogether, and I have been unable to figure out in this particular case what the motive is that underlies their action for opposing this measure. I asked an hon. member the other day if he could tell me what the Liberals are up to, and he said: You are not enough of a politician to understand it; it's all politics, and not a matter of business.
There is one thing I have noticed since I came to this Parliament, and that is that gentlemen on the opposite side of the House do not wish the Government to bring in good legislation. It is my opinion that they would rather see the Government introduce legislation which would ruin the country, in the hope that they might have a chance of getting into power again. Now, Mr. Speaker, the hour is very late, and I shall not detain the House further than to say that I shall have great pleasure in supporting the Bill.
This legislation is doubtless of a somewhat exceptional character, and it is desirable in every interest that it should be discussed fully, and that all possible objection to it should be made apparent, if there be any legitimate criticism to which it should be subjected. T therefore find no fault whatever with the length of the discussion. I would not trouble the House at this late hour were it not that the legislation is of a somewhat exceptional character, and that it is in fulfilment, to a certain extent, of a declaration which I made to this House in the concluding days of the session of 1912-13. I shall briefly allude to some of the salient points of this measure, and I trust that my remarks will not have as many conclusions as my hon. friend from North Cape Breton (Mr. McKenzie) found necessary.
My hon. friend who has just sat down (Mr. Merner) has alluded to certain observations which have been made in this House with respect to the action of the Senate with respect to this measure. I desire to say that if any gentleman inside, or outside this House, has stated or suggested that th^ Government has endeavoured to influence the action of the Senate in any way, against this Bill, or that the Government has sought in any way not to have it supported and passed in the Senate, he states that which is absolutely without foundation. No man in this House or outside of this House has
the slightest warrant for any such statement. I am not now alluding to the statement which I understand was made by my hon. friend from Rouville (Mr. Lemieux) that his friends in the Senate had determined to defeat this Bill.
I did not hear my hon. friend say it, but I was informed that he had said it. Of course I accept his word at once. His friends are in the majority in the Senate and they can defeat the Bill if they see fit, but so far as the .Government is concerned it stands by this Bill as strongly in the Senate as it does in the House of Commons.
The Bill is in fulfilment of a declaration which I made last year and which I shall read because it will enable me to abbreviate very considerably the remarks which otherwise I would be obliged to address to the House. The statement I made on the occasion alluded to is as follows:
It appears from the report of the commissioner appointed to investigate the matter of the failure of the Farmers Bank (a) That the issue of the certificate of the Treasury Board authorizing the hank to commence business, was procured by false and fraudulent representations on the part of the promoter and subsequent general manager of the bank, W. R. Travers. (b) That in the commissioner's opinion it was incumbent upon the Treasury Board before issuing its certificate, to have investigated certain charges made to the Department of Finance that the amount required by the Bank Act to he paid in respect of subscriptions, had not in fact been so paid, and (c) That if the true facts had been disclosed, the certificate of the Treasury Board would not have been given, and thus the bank under the management of Travers would not have been authorized to commence business.
The case is of exceptional and indeed unique character, both with regard to the fraudulent means by which the certificate was procured and in respect of the results which followed, involving the ultimate loss of all moneys placed in the bank by the unfortunate depositors. The man who fraudulently procured the certificate in the name of the bank, was enabled to attract those deposits by the unwarranted assumption of powers in violation of plain statutory conditions. While the direct subsequent cause of the loss was the fraud and dishonesty of the hank manager in the administration 'of its affairs, there is nevertheless a certain connection between that loss and the power and status with which he became invested upon the granting of the certificate. Having regard to these considerations, the Government consider that the depositors are entitled to a reasonable measure of relief, which will be provided by legislation to be introduced at the next session of Parliament.
The case of the other banks mentioned, is in no wise similar, and the action which the Government proposes to take in the case of the
Farmers Bank will afford no warrant or precedent for reimbursing- their depositors.
It is perfectly clear that on ordinary principles of legal liability as accepted by the courts of the country, an action founded upon negligence must show that the loss is a direct and proximate result of the negligence upon which the action is based, and no one in this House has claimed .specifically that the action which the Government proposes on this occasion is precisely analogous to the judgment which a court pronounces in an action for negligence.
It is perfectly true that the .bad management of the bank was, in one respect at least, the direct and proximate cause of the loss; but it is equally true that, from the inception of the attempt to obtain a certificate permitting this bank to do business, a scheme was in progress which could have no result other than that which did obtain, because the whole sceme from the very first was a scheme to secure the sanction of the Government, which was necessary before the bank could receive deposits, for the purpose of enabling Travers to use and control the bank and its charter without regard to the provisions of the law, and because his attempt in that regard was based upon misstatements, upon absolutely false representations, upon deception practised upon the Government and upon the Treasury Board. It is equally true, as found by the commissioner who investigated this matter, that if the true facts had been disclosed to the Treasury Board, they never would have granted the certificate. It is equally true as well that, if the Treasury Board, acting for the Government and for the country in that regard, had performed the duty which the commissioner says it was incumbent upon them to perform, then they would have hlad notice of those facts and the certificate would never have been issued.
I am inclined to rest the action of the Government not so much upon the analogy of an act of negligence in the courts as upon the analogy of a trustee, who, acting honestly although erroneously, commits a breach of trust, and who is nevertheless liable although he acted honestly. Negligence on the part of a trustee may create a breach of trust in itself; and the ordinary, common 'law rules of contri'butary negligence and efficient cause are mot held, so far as I am aware, to affect the question of liability of the trustee in all such, cases. No one suggests that the ex-Minkter of. Finance did not act with perfect honesty;
but the claim is that he and the other members of the Treasury Board were appointed under the law to discharge a public duty, iby which it wlas necessary to maintain certain safeguards before any bank should be permitted to commence business, to issue circulation and to solicit deposits from the public; that in the discharge of this obligation, in which they had all necessary powers to perform that duty, under the law, it was brought to their notice that fraud and deception were being practised upon them and that, notwithstanding such notice, the members of the Treasury Board contented themselves with making inquiry of the very man who was accused of that fraud as to whether the statements made with regard to him were correct.
When my hon. friend the member for North Cape Breton (Mr. McKenzie) suggests to this House that the report of the commissioner does not set forth any default on the part of those appointed to safeguard the public interest in that respect, he surely forgets that there is a direct and specific statement in the report of the commissioner who finds that, having regard to the notice which had come to the members of the Treasury Board from various sources, it was incumbent upon them to make further effective inquiry, and that the result of such inquiry, if made, would have been to prevent the issuing of the certificate altogether. Under these circumstances, it seems to me that the criticism which has been put forward with respect to the action of the Government as now proposed is not well justified. It was incumbent upon those appointed by Parliament and by the people for the purpose, to take certain steps which would have prevented this bank from ever going into operation at all. Acting honestly but erroneously they failed to take these steps; and as a result of that, this man, in whose interest the whole organization of the bank was apparently undertaken, who promoted it for a particular purpose, which was not in consonance with the law of the land, was permitted to use the name of a bank and the apparent organization of a bank for the purpose of attracting deposits, when under the law of the land that bank was never properly constituted in the first instance. That seems to be the whole case; and if we take the analogy to which I have alluded, there seems to be very reasonable ground for the action of the Government as now proposed.
My hon. friend the Minister of Finance has gone in great detail and very thoroughly into the whole question, and I do not desire to take up the time of the House at this hour by repeating what he has said. My hon. friend the member for North Cape Breton and Victoria (Mr. McKenzie) accused him of unfairness in making his presentation of the case to the House. Nothing could have been fairer than the manner in which my hon. friend the Minister of Finance went into this case in detail and adduced from every source, from the report of the commission itself, all revelant considerations including those that might seem to tend against any action taken by the Government along the lines now proposed. What my hon. friend the member for North Cape Breton described as unfair was that the hon. Minister of Finance, for the sake of brevity in a speech which necessarily had to be somewhat lengthy, summarized the statements of two of the witnesses, the hon. member for Halton (Mr. Henderson), and the hon. member for West Toronto (Sir Edmund Osier) although my hon. friend knew at the same time, as every hon. member in this House knew, that the exact evidence in printed form was in the hands of every member of this House and that, if the Minister of Finance, in assuming that the accuracy of the summary which he gave to the House proved to be mistaken, he left himself open to be corrected by any hon. member. He gave his statement in that way for the sake of brevity; and he pointed out, as I now point out, that if there were any inaccuracy in the statements alluded to, it could be corrected by any hon. member. .
What could the inquiry which has been suggested have led to? It could have led to the discovery by the late Minister of Finance in the first place that the amount required by the Bank Act to be paid by the subscribers had not been paid. What would be the result of that? It wou.ld be that the Treasury Board should not isme the certificate. My hon. colleague from Halifax (Mr. A. K. Maclean), when criticising this measure, said that there was only failure in a small degree to comply with the requirements of the Bank Act.
Why, it is an essential requirement of the Bank Act that $500,000 shall be subscribed and $250,000 thereof paid up. I shall come to some other failures to comply with the requirements of the Bank Act in a moment. But my hon friend from North Cape Breton (Mr. McKenzie) argues, so far as I
could follow him, that a bank can be lawfully established in this country without the subscribers paying up a single dollar; it is enough that they give promissory notes. And if promissory notes are enough, then the agreement to subscribe is enough, because that imposes upon those signing as strict a liability as the giving of promissory notes. If that is the law of the land, I must say that I am awaking to a new conception of what the Bank Act requires.
There is a phase of this question with which the Prime Minister is dealing now that I would like to have explained by him. I understand that all those notes were endorsed to the trust company without recourse to Travers or his associates, and that having done this, in the failure of the notes being paid at maturity, they could not come back on Travers and his associates for payment. Therefore at looks to me as if it was as good as cash so far as the carrying out of the banking law is concerned.