That is not my conception of the law; and my hon. friend will be good enough to remember that this is only one incident, and that the commissioner, after describing how the cash was raised by the pledging of notes, says:
A certain form was gone through of crediting the proceeds of the loans raised upon the notes.
And he says:
That the balance of the loans were used to cover in part the expenses of organization which were not carried into the books of the bank until some months after it began business. $17,595 was placed to the credit of the subscribers other than those whose promissory notes had been used for the purpose of obtaining the loans, and who had actually paid nothing on account of their shares, and in many cases subscribers' notes for much larger sums than were placed to their credit were pledged for the loans.
If my hon. friend thinks that all these incidents connected with the taking of the notes were regular, then I desire to express my most absolute dissent with him. These were simply fraudulent incidents in a huge conspiracy to evade and misapply the banking law for a fraudulent purpose; and the inquiry, which the commissioner declares was incumbent upon the late Minister of Finance and the members of the Treasury Board, would have revealed the existence of that conspiracy, and would have prevented all that loss, waste and desolation which eventually did result from the granting of this certificate. That is my conception of it.
I was going on to allude to certain things which would have been dis-3 a.m. covered. It would have been discovered that Traver.s had made a false declaration for the purpose of misleading the Government and the Treasury Board and had attempted thereby to deceive the minister and the board. Is it conceivable that the certificate would have issued if that had been discovered? My hon. friend from North Cape Breton declared that all the Minister of Finance had to do was simply to look at the form of the papers. The statute does not say that. It says that 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 the Bank 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, and the payment required to be made to the Minister of Finance and Receiver General and various other particulars, have been complied with. The action of the Treasury Board was. as the hon. member said, administrative, to a certain extent, but they were also the guardians and fiduciary protectors of the interests of the country according to the procedure and the principles established by the Bank Act. And it is the neglect of that duty, the unintentional neglect, I will concede, which brought about the unfortunate results in this case.
In the third place, they would have found that Travers had been guilty of a breach of trust in connection with his dealings with the promissory notes; they would have discovered that the meeting of subscribers had been irregularly called; they would have discovered an unlawful and invalid arrangement by which Travers 303
was to be general manager of the bank for a certain number of years. They would have discovered an arrangement which, according to the finding of the commissioner, practically meant that the provisional directors entirely abdicated their functions and were acting in accordance with Travers' directions, simply as - his tools. Does any one pretend that, under these circumstances, if the Treasury Board had discovered these facts, as it was bound to do according to the judgment of the commissioner, the certificate would have been granted? I venture to think not.
Under these circumstances the Government consider, having regard to all the conditions that have been discovered, having regard to the facts, which are not only exceptional but unique, that it is no more than just to bring relief to the depositors; and therefore we have introduced this Bill.
It has been alleged in this House that this Bill means a certain discrimination in favour of the province of Ontario and against other parts of the country. There have been a good many banks whose failure has resulted in loss to the depositors. There were the Merchants Bank of Montreal, the Liverpool Bank, the Bank of Prince Edward Island, the Exchange Bank of Canada, the Maritime Bank, whose head office was at St. John, the Central Bank with head office at Toronto; La Banque du Peuple, La Banque Ville Marie, La Banque St. Jean, and, last, the Farmers Bank. In no one of these other cases, so far as I am aware, was there any neglect or disregard of the precautions provided and imposed by the Bank Act on the part of the Government or any official of the Government. If, however, in any one of those cases it can be demonstrated to the satisfaction of the Government that it comes within the principle under which we are now acting, such a case shall receive precisely the same consideratin .as the depositors of the Farmers Bank are receiving in this case.
In view of all the circumstances we regard this case as unique and exceptional. We regard it as one which imposes a certain obligation upon Parliament and the people of Canada to right a definite wrong. In dealing with it in that way I think we disregard no known principle of good constitutional government, and I absolutely repudiate any statement from either one side of the House or the other that in making
this proposal the Government intends or desires to discriminate in favour of or against any province or community in this Dominion.
That the House do disagree to the amendment made by the Senate to Bill 177, intituled an Act to amend the Company's Act, for the following reasons:
Because the said amendment nullifies the proper effect of the preceding clauses of the Bill and that the general policy of the measure requires the enactment of the clause cut out by the said amendment.
Subtopic: THE COMPANIES ACT AMENDMENT.
There was a clause in the Bill, No. 3, that debenture stock which had been issued and hypothecated for the purposes of the company, and afterwards redeemed1 by the company, might be
re-issued to the public; that by paying the amount for which the debentures had been pledged, they would have a right to reissue these debentures to the public. This clause has been struck out by the Senate. I would like the Bill to be sent back to the Senate to have that clause re-inserted if possible.
Subtopic: THE COMPANIES ACT AMENDMENT.