There are six amendments in all, none of them being of serious consequence. The first is an amendment to subsection 2 of section 3, which doee not in any way change the meaning of the subsection but makes it more clear. The name of the Bill is changed from the 'Loan Companies Act' to the 'Loan Companies Act of 1914.' Section 16, which relates to the election of
directors, is modified so as to provide that, in the event of an election of its directors not taking place at the proper time, the company shall not be held to be thereby dissolved, but that such election may take place at any general meeting of the company duly called for that purpose, and the retiring directors shall continue in office until their successors are elected. That is not an unusual clause in company legislation. iSection 30 is changed so as to provide that, in the event of a forfeiture of shares through a failure of a shareholder to pay any call or instalment, the holder of such shares at the time of the forfeiture shall continue liable to the creditors of the company at such time for the full payment payable on the shares at the time of forfeiture, less any sums which are subsequently received by the company in respect thereof. There is also a verbal amendment to section 68, which makes the intention of the section more clear. Section 90 is also amended by changing the word 'the' to 'this.' On the whole, I see no objection to the amendments proposed by the Senate, and move that the House do concur therein.
S:r WILFRID LAURIER: -Has any
change been made with regard to the retroactivity of this Bill?
amendments in this House now, I suppose it might delay the passage of the Bill this session; otherwise, I .should have liked to draw my hon. friend's attention to some amendments that have been proposed to section 63 by the Loan Companies Association, to prevent loan companies from investing in the stock or debentures of any company whose chief business is buying and selling vacant land.
I think it inadvisable that we should consider any further changes in the Bill now. The Bill received very full con.-
sideration by the Banking and Commerce Committee, and like any otheir Ant this may be changed at any time by an amending measure if that is deemed advisable. As the Bill has received very careful consideration on the part of the Commons and apparently also on the part of the Senate, and having regard to the fact that the session is so far advanced, I should not like the passage of this Bill to be jeopardized by taking into consideration any further amendments at this stage.
Consideration of the proposed motion of Hon. W. T. White (Minister of Finance) for the second reading of Bill No. 185, for the relief of the depositors of the Farmers Bank of Canada, and the proposed amendment thereto, of Mr. A. K. Maclean, resumed from June 2.
early hours of this morning I was dealing with the endorsements on the writ sent by Mr. Leighton McCarthy to the ex-Minister of Finance. I have not exhausted this phase; but, as the endorsements already appear in the proceedings. I will content myself with saying that they embrace charges of deceit, illegality, unlawful practices, fraudulent conduct, false pretenses, and similar charges against Mr. Travers, the man who was asking the Finance Minister of the day for a certificate to allow him to commence business. There is one feature in the evidence which is worthy of comment, and that is the letter of the hon. member for London (Mr. Beattie) objecting to the unwarrantable use of his name as one of the provisional directors. The Finance Minister of the day had only to take a step across the floor to make inquiries of the hon. member for London, which would have disclosed the facts, but that was not done. I shall endeavour to abridge my remarks on account of the lateness of the session, but there are a few things which I would like, as briefly as possible, to put on the record. In the first place, the evidence states that Mr. Fielding was only suspicious of. this particular bank. He said that he did not like the name, and so forth. At page 456 of the evidence he speaks as follows:
From the beginning I disliked, I do not think the word is too strong, I disliked the movement, because I was afraid a number of farmers were going into a business they did not like and un-
dertaking responsibilities which they did not appreciate.
Again, he says:
I looked upon the application for a further extension as an evidence of weakness.
I always viewed the incorporation with anxiety, because I understood it was an effort to get farmers, as the name implied, and I thought it was the line of business that probably they were not the best capable of going into.
Again, on page 457:
My mind from the beginning was suspicious; my mind was rather unfriendly to the movement from the beginning; that kind of gossip might emphasize it a little, but from the inception of the movement I looked upon it with a little anxiety.
Again, on page 458 Mr. Fielding is asked the following question:
Q. Under the Act I think the duty is cast on the Treasury Board itself and not on the Minister of Finance individually? A. That is true, though naturally he would have chief responsibility and his colleagues would look to him largely for advice and guidance.
On page 459 he says:
I think no doubt he was to the department before that and saw some of my officials, but I am pretty clear in my recollection that I saw Mr. Travers only once and that was the 30th November, and that was the date the certificate was issued.
After all the warnings and charges of fraud, deceit, false pretenses, and illegal practices that Mr. Fielding had received, it might appear to the casual observer that he should have seen Mr. Travers more than once, and that after the information he got from Sir Edmund Osier, Mr. Henderson and Mr. Leighton McCarthy, it was incumbent on a man in Mr. Fielding's position to see the person charged with these malpractices. According to both Mr. Fielding and Mr. Travers, their interview lasted only twenty minutes, and it is very peculiar that in that interview Mr. Fielding did not tell Travers that he had received this writ from Leighton McCarthy, and the warnings from Mr. Henderson and Sir Edmund Osier. There is no evidence that he mentioned these things, but merely the statement that he told Travers what people were saying about him, and Travers denied it. Then Mr. Fielding said: 'Write me a letter to that effect.' The junior member for Halifax (Mr. A. K. Maclean) has argued that these charges did not sink into the mind of Mr. Fielding. If that is so, how is it he told Travers what the people were saying about him. It is obvious from that, that the charges from Mr. Henderson and Sir Ed-
round Osier and Mr. Leighton McCarthy had sunk into the mind of the Finance Minister, and that he was conscious that they were serious charges which called for inquiry. Mr. E. S. Clouston, then president of the Canadian Bankers' Association, used the following language in a letter to the deputy Minister of Finance, dated November 30, 1906:
Permit me to request that, if only for the protection of the public, the Treasury Board will exercise its right to refuse to issue a certificate if it thinks best so to do, until a thorough investigation has been made into the circumstances stated herein.
That was the language of a man whose word stands as high as that of any man in banking circles in this country, a man well and favourably known to the Finance Minister of that day. The letter was warning the minister against an abuse that might be perpetrated on the public, and asking for the stay of his hand. Mr. Fielding's answer was, ' I gave the certificate yesterday.' He sat back in his chair, folded his arms, and allowed Travers who had been charged with every species of fraud in the calendar to get a certificate and go out like a firebrand into the country armed with the seal of this Dominion. Mr. Fielding took not one step to put himself into possession of the facts supporting the warnings against Travers. Some have said that Mr. Fielding was guilty of an error of judgment, but I say that it was a case of not doing his duty because he did not ascertain the facts which would have enabled him to form judgment upon the charges made. He was Minister of Finance, the master of the Treasury Board, he had had notice of fraud, he had had plenty of warning, and he had had verba1 charges of improper practices against the very man to whom he gave the certificate after an interview of only twenty minutes.
The hon. gentleman will understand me. I am referring to the endorsements on the writ sent by McCarthy. Every kind of fraud in the calendar was charged against this man Travers. Mr. Fielding had evidence from Mr. Henderson that the bank under this man's administration was doing improper business. Mr. Fielding had information from Sir Edmund Osier that the money
was improperly and illegally borrowed. Mr. Fielding knew all this, and if he had made the inquiry that was incumbent upon him to make he would have discovered what kind of a man Travers was and turned out to be. A minister is human like any other man, but he owes a duty to himself and to his country, and we have evidence that Mr. Fielding failed to do his duty. He was guilty of negligence. To make myself clear I would just like to give two short definitionsofnegligencefrom the legal point of view, though I maintain that this question should not be discussed from the legal point of view but from the point of view of what is right and just. It should be discussed on the higher ground that the State owes a duty to the public, and should be discussed without any legal hairsplitting. A minister is chargeable with knowledge of what a reasonable inspection would disclose, and in this case Travers's perjury and the improper discounting of the notes to raise the money for the deposit would have been fully disclosed if Mr. Fielding had made further inquiries. His failure to act was a breach of duty or worse
gross negligence. Negligence has been well defined as:
The want or absence of ordinary care; that is, just such care as a reasonably prudent and cautious man would exercise under similar circumstances.
Another definition is:
A failure to do what a reasonable and prudent person would ordinarily have done under the circumstances, and the honest endeavour to use the means reasonably necessary to avoid injury to others.
After all the warnings and notices of fraudulent transactions I say that no more fitting and pregnant language could be used in describing this case, than is found in the two terse definitions I have just quoted. Mr. Fielding was a man of splendid attainments. He had had his warnings and there is no excuse for his lack of knowledge. He knew his duty but he failed to do it. He said that when he got Mr. Clouston's letter it was too late because the certificate had already been issued. I dispute that. It is true there was no legal machinery at his hand to recall the certificate, but there is an old adage that there are a good many ways of killing a cat besides drowning, and information could easily have found its way to the public after Mr. Fielding had discovered that he had made a mistake. But no, he sat still. And why? Nobody knows why, but we do know that Travers was introduced by Mr. Calvert and the
mystery of that certificate being issued lies there. It does not do to impute motives, but the attitude of the Finance Minister on that occasion -was absolutely out of keeping with his well-known ability, assiduity, and industry. In this case he did what he was never known to have done before. He had himself admitted that he was suspicious of the institution and that he would like to stop it, but he did not stop it. And why did he not? There is not a sufficient reason, and the disaster came through his lack of action.
Sir William Meredith has dealt with this question at very great length. I need not repeat much of it, but I would just like to quote a sentence or two. On page 8 of Sessional Paper 153a the commissioner says:
My conclusion on this branch of the inquiry is that the Treasury Board was induced to give its certificate by false and fraudulent representations on the part of Travers, and that if the facts I have mentioned as to the way in which the $250,000 was made up had been disclosed, the certificate of the Treasury Board would not have been given.
Mr. Fielding had express notice of fraud, because the facts were disclosed. If he had gone further, he would have had absolute proof. He failed to do that. If he had acted, there would have been no certificate, no bank deposits and no loss. The commissioner speaks about the efficient cause. I have already said in regard to that, and I say it again, that the word * efficient ' is not appropriate; I would call it the 'deficient * cause-the failure to act on the part of the Minister of Finance that brought about the loss in this case.
I pass over the findings at large of the commissioner, because they are all set out in the report, but I wish to make this point very clear. The commissioner says:
I do not suggest that the minister would have been justified because of the information conveyed to him in recommending that the certificate should not be granted, or that the Treasury Board because of it would not have been justified in refusing to grant it.
He is non-committal there.
But having received the information, it was in my opinion incumbent on the Treasury Board to have investigated the charges that had been made before coming to a conclusion as to whether or not the certificate should be given.
That language is express and clear. It carries its own condemnation of the inaction, the negligence, of which supporters of this Bill complain. The next paragraph in the report contains these words in regard to Mr. McCarthy's letter:
, Mr. McCarthy did not in any way intimate that the information he conveyed to the minister as to the way in which the $250,000 had been made up had been found to be incorrect.
- Therefore, it will not do to say that Mr. McCarthy withdrew his writ. The charges were there. They were never investigated, never proved untrue. The charges were never withdrawn, although the writ was. The commissioner further says:
It is true that, as Mr. Fielding stated in evidence, Travers, so far as he knew, was a reputable banker; but that was not, in my opinion, a sufficient reason for not having instituted an inquiry as to the matters which had been called to his attention.
Therefore my argument is in line with what the commissioner found:
Such an inquiry could easily have been made, and the delay occasioned by it would have been inconsiderable, and such an inquiry would, undoubtedly, have resulted in the discovery of the manner in which the $100,000 had been raised and in the refusal of the Treasury Board to give the certificate.
I do not wish to detain the House at any great length with regard to that kind of evidence. The case has been proved abundantly. In fact, it was easily seen by the attempt of the hon. junior member for Halifax (Mr. Maclean) last night how desperate a cause he had, and how utterly unable he was to withstand the salient points brought out by the hon. Minister of Finance.
I wish now to turn to another phase of the question for a moment. The right hon. the leader of the Opposition in the late Parliament, in answer to Mr. Henderson- I do not quote his exact words, as I am speaking from memory- said that this country in a case of this kind ought to be big enough to do justice to these unfortunate people, some of whom had their homes severed by death or by lunacy, and some of whom were reduced to poverty and despair. I know of men in my own constituency, old and gray, who had retired from a hard and arduous life, who had deposited their savings in this chartered bank, not for purposes of speculation, but for safe-keeping, and who were left penniless owing to these savings having been completely wiped out.
This country has in the past treated outsiders generously, as it has the power to do. I might mention the volcanic disaster in the West Indies in 1902; the sufferers in Japan in 1906, when this Government poured out its money; the San Francisco earthquake in 1906, when the Government and this country paid willingly; the Jamaica earthquake in 1907; the earthquake
in Italy in 1909; the floods in France; the Ottawa and Hull fire sufferers; the distress on the Liard and Dease rivers; the Vancouver riots; the Campbellton fire sufferers. There is a list four times as long as the one I have given, and I need not dwell further on the subject. Yet it is said, forsooth, that we should not compensate the sufferers in this disaster so widespread, affecting thousands, of whom some can bear the loss, some are suffering a great deal, and others are absolutely ruined-a disaster in which poverty and distress has fallen upon men and women, Liberals and Conservatives alike. Yet, for some unaccountable reason, where no member of this House would state, although it has been charged, that any attempt has been made to make party capital out of this matter, where nothing exists in the whole situation to warrant party feeling, the hon. junior member fcr Halifax (Mr. Maclean), last night, after condemning the Government for not acting sooner, said that they were now acting too late, and moved the six months' hoist.
meaning that the hon. member conveyed to the House at about half-past twelve this morning. Under these cireum-
12 noon, stances, can any hon. gentleman tell this House and this country that there is in this whole affair anything but a pitiable tale of woe and distress that should be dealt with and relieved? I have letters in my possession from hon. gentlemen opposite. I have . one from the right hon, the leader of the Opposition, but I do not wish to put it on record. I have copies of letters from the hon. member for South Renfrew (Mr. Graham), the hon. member for Russell (Mr. Murphy) and other hon. members opposite, expressing their deep sorrow and regret at this great loss, and promising to do their best, and wanting to see this Government do its best, in the matter. There is nothing in the opposition to this Bill except perversity. There are hon. gentlemen opposite who are anxious to vote for this Bill. It is not a political question; it is a great financial disaster to a great many worthy and deserving people, of all political stripes, who come to this Parliament, not as a matter of right, not as a matter of law, but as a matter of grace, supplicating this Parliament to relieve them, many of them in their declining
years, from the poverty and despair which have visited their homes. We have always been generous in giving in case of need to people in foreign countries where we have neither kith nor kin; and it would be a fitting tribute to the generosity of this House and of the Upper Chamber to say that, under all these circumstances, especially owing to the fact that there was negligence on the part of the late Government, we should come to the aid of these people. No hon. member on this side desires to attack the personality of any one who was on the Treasury Board at that time. We put this question upon the high plane that all men are human, that a mistake was made, -and that people suffered by that mistake. If men suffer for their own negligence, their own lack of care, so must governments. Let us put the matter on an equitable basis, without any legal hairsplitting. Let us come together, and not have any talk about Conservatives in the Senate lobbying to kill this Bill. I repudiate that; I throw it back with scorn to the hon. gentleman that there ever was a lobby in the Senate bj Conservatives. 'There are gentlemen in the Senate who have their individual feelings, and it is their right to act as they like. It was reported in the Liberal press that there was such a lobby, and I investigated the matter, and found that there is not one jot or tittle of truth in it. As far as I know, speaking generally for this side of the House, we are practically unanimous upon this measure. There may be some opposed to it; if so, that is a tribute to the freedom of opinion in this House. And I would ask hon. gentlemen opposite to side with their colleagues from Middlesex (Mr. Ross) and North Oxford (Mr. Nesbitt) and rise above partisan feelings, which too often actuate parties in this House, and let us get together and put it through unanimously.
As to precedents, let them take care of themselves. Somebody says that similar failures have happened heretofore. If so, I would be magnanimous enough to say that those losses should be paid too. But I do not think that anything that has happened in this country has been quite of the same kind. There may have been other cases. If there have been, the country ought to be big enough to right the wrong done by its own officers for lack of care. We can pour out millions for the Canadian Northern; we can lose $7,000,000 in the Quebec bridge; we can waste millions on the transcontinental. But, with our growing and expanding rev-
enues, let us do something for the farmers and other people of this country; let them have a little show on this particular Bill, to which I have great pleasure indeed in giving my warmest and most conscientious support.
The question which is before the House for consideration is, perhaps, one of the most important questions that we have had to discuss in recent years, not on account of the amount involved, $1,200,000, but because of the principle involved in this Bill, and because of the effect which its passing will have upon future legislation. If it could be shown me, assuming the facts which have been stated by hon. gentlemen opposite, notably by the Minister of Finance, that any negligence upon the part of the Treasury Board was a contributing cause to the failure of the bank, entailing upon the depositors a loss, I would then feel in conscience bound to vote in favour of the Bill. For that purpose I have listened very carefully to the speeches delivered so far by the Finance Minister (Mr. W. T. White) and the hon. member for North Perth (Mr. Morphy). The hon. member for Perth wound up his remarks by saying that the depositors ought to be recouped, not as a matter of right, not as a matter of law, but as a matter of grace.