June 3, 1914

LIB

John Howard Sinclair

Liberal

Mr. SINCLAIR:

I refer to page 714,

volume I of ' Hansard,' 1911-12, where the hon. gentleman will find that the member for Russell asked a question and the Prime Minister answered it as follows:

Mr. Murphy: 1. Was any promise made by the present Minister of Labour, or other Government supporters, in the province of Ontario during the recent election campaign, to the effect that if the Conservative party were returned to power all those who lost money through failure of the Farmers Bank, would be reimbursed by the Government?

Mr. Borden: 1. No such promise was made by the Minister of Labour. The Government has no information as to promises made by other Government supporters.

Will the minister explain how it comes that the statement he has made just now differs from the statement made by "the Prime Minister?

Topic:   QUESTIONS.
Subtopic:   THE FARMERS BANK.
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CON

Thomas Wilson Crothers (Minister of Labour)

Conservative (1867-1942)

Mr. CROTHERS:

It does not differ at

all; the very answer that my hon. friend has read from the Prime Minister says that the Minister of Labour did not make any promise for the party.

Topic:   QUESTIONS.
Subtopic:   THE FARMERS BANK.
Permalink
?

An hon. MEMBER:

Read it again.

Topic:   QUESTIONS.
Subtopic:   THE FARMERS BANK.
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CON

Thomas Wilson Crothers (Minister of Labour)

Conservative (1867-1942)

Mr. CROTHERS:

The Prime Minister

siays he does not know what anybody else promised.

Topic:   QUESTIONS.
Subtopic:   THE FARMERS BANK.
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LIB
CON

Thomas Wilson Crothers (Minister of Labour)

Conservative (1867-1942)

Mr. CROTHERS:

Why, it does not require any explanation. In the answer the hon. gentleman has read the Prime Minister said nothing differently from what I have said. Why, the hon. gentleman has just read that the Prime Minister said that the Minister o.f Labour did not make any such promise for the party.

Topic:   QUESTIONS.
Subtopic:   THE FARMERS BANK.
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LIB

John Howard Sinclair

Liberal

Mr. SINCLAIR:

You said that if the

Conservative party were returned to power those who had lost money by the failure of the Farmers Bank would be reimbursed.

Topic:   QUESTIONS.
Subtopic:   THE FARMERS BANK.
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CON

Thomas Wilson Crothers (Minister of Labour)

Conservative (1867-1942)

Mr. CROTHERS:

That is not what 1

said.

Topic:   QUESTIONS.
Subtopic:   THE FARMERS BANK.
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LIB

John Howard Sinclair

Liberal

Mr. SINCLAIR:

And the answer is that you made no such promise.

Topic:   QUESTIONS.
Subtopic:   THE FARMERS BANK.
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CON

Thomas Wilson Crothers (Minister of Labour)

Conservative (1867-1942)

Mr. CROTHERS:

I made no such promise for the party.

Topic:   QUESTIONS.
Subtopic:   THE FARMERS BANK.
Permalink
LIB

John Howard Sinclair

Liberal

Mr. SINCLAIR:

Well, if you are satisfied with that it is all right.

Topic:   QUESTIONS.
Subtopic:   THE FARMERS BANK.
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CON

Thomas Wilson Crothers (Minister of Labour)

Conservative (1867-1942)

Mr. CROTHERS:

The hon. gentleman

purports to read an answer from the Prime

Minister convicting me of having made a promise, which the Prime Minister says, in so many words, I did not make.

Topic:   QUESTIONS.
Subtopic:   THE FARMERS BANK.
Permalink
LIB

John Howard Sinclair

Liberal

Mr. SINCLAIR:

The hon. gentleman

says he did make the promise.

Topic:   QUESTIONS.
Subtopic:   THE FARMERS BANK.
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CON

Thomas Wilson Crothers (Minister of Labour)

Conservative (1867-1942)

Mr. CROTHERS:

funds, and they are lost, they are stolen. I am prepared to express the opinion that in a private transaction the ex-Minister of Finance would, by a court of law be ordered to Teeoup these depositors for every dollar they lost because of his breach of trust in putting a man in control of hundreds of thousands of dollars, whom he knew, in law, to be dishonest.

Now, Mr. Speaker, what would be thought by the hon. members of this House if the ex-Minister of Finance actually knew what the facts were? Supposing the ex-Minister of Finance actually knew that Travers was guilty of fraud, and deceit, and perjury, and had, notwithstanding that actual knowledge, put him in control of hundreds of thousands of dollars belonging to these depositors, is there a man in this House who would not say: we are morally bound to recoup the depositors; we are in natural right and justice bound to recoup them every dollar they have lost? I venture to say my hon. friend from Rou-ville (Mr. Lemieux) would accept that proposition. I am assuming now that the ex-Minister of Finance actually knew the character of the man he was putting in control of this money. Would my hon. friend from South Renfrew (Mr. Graham) stand up here and say that we should not recoup these people every cent they lost if the fact was that the ex-Minister of Finance actually knew what Travers was guilty of and the character of the man? No. The hon. member for South Renfrew would not take that stand; no member of this House would take that stand. Then, if he would not take that stand, suppose the ex-Minister of Finance actually knew, he is just as liable in law because he ought to have known and he would have known if he had taken the course that an ordinary prudent man in dealing with his own affairs would have taken. So'that I reach the conclusion that the gross negligence and gross breach of trust of the ex-Minister of Finance -was the direct cause of this loss, not the remote cause but the direct cause, and the courts of law every day are administering the law in similar cases against trustees.

My hon. friend from Wright (Mr. Devlin) referred to the opinion of the Department of Justice, il really have never been able to ascertain why this matter was referred to the Department of Justice at all. It is not a case for the opinion of the Justice Department. The statute says: If the Minister of Finance is satisfied by affidavit

or otherwise that the various provisions of the Bank Act have been complied with, then he is to issue a certificate. It is not a legal question; it is one of common sense. I cannot understand why it was referred to the Department of Justice; but hon. gentlemen opposite can find no comfort from the letter written by the Deputy Minister of Justice. This is what he says:

I have the honour to acknowledge receipt of your letter of the 2Sth instant, and of the inclosed papers, being the application from the Farmers Bank of Canada for a certificate to commence business, under sections 13-17 of the Bank Act, and papers in support thereof.

Not any of the papers that were against it, but papers in support of it. The former papers were not in the possession of the Minister of Finance at the time, because he had sent them down to Toronto on the 7th day of November, and this was the 28th. Therefore these papers were never submitted to the deputy Minister of Justice. Why should they have been submitted to him at all? It was not a matter of legal opinion. There is no evidence that any papers opposing the granting of this certificate were submitted to the deputy Minister of Justice. He says further:

You ask me to advise you if on the papers submitted such certificate may legally issue.

We do not know what the papers submitted were.

In reply, I beg to state that the statements in the statutory declaration-

And that appears to be the only paper submitted to him.

In reply, I beg to state that the statements in the statutory declaration of Mr. Walter R. Travers are sufficient, if they are accepted, to show compliance with the statutory provisions and that the evidence thus afforded is such as the Treasury Board may lawfully accept under the Act, and thereupon issue to the bank a certificate under section 14 of the Act.

Papers returned herewith.

E. L,. Newcombe,

Deputy Minister of Justice.

If accepted. Therefore hon. gentlemen opposite get no comfort from the deputy Minister of Justice. He says: I know nothing about Travers; if you believe him, there is enough set forth in his declaration to warrant you in issuing a certificate. But there was no evidence submitted to Mr. Newcombe, deputy Minister of Justice; nothing that the hon. member for Halton (Mr. Henderson) had said, nor that Sir Edmund Osier had said, nor that Mr. Leighton McCarthy had written. I have

no doubt that if charges had been submitted to the deputy Minister of Justice that he -would at once have said: You had better inquire into these things. But he says: if you accept Travers' statement- and that seems to be the only statement that was before him-you may legally issue the certificate.

It is said that there are other causes. My hon. friend the member for Wright (Mr. Devlin) says-and it is a fair argument-that the learned commissioner found that it was not the issuing of the certificate that was the efficient cause of the loss, but the subsequent mismanagement of the manager. I have seen no evidence to show that the aspect of the case that I have just presented to the House was submitted to the learned commissioner at all, and I do not believe it was.

Topic:   QUESTIONS.
Subtopic:   THE FARMERS BANK.
Permalink
LIB
CON

Thomas Wilson Crothers (Minister of Labour)

Conservative (1867-1942)

Mr. CROTHERS:

The aspect of the case that the Minister of Finance knew in law that Travers was a dishonest man, and that his authorization to Travers to handle these funds was the direct cause of the loss. I do not believe that aspect of the case was submitted to the learned commissioner at all.

Topic:   QUESTIONS.
Subtopic:   THE FARMERS BANK.
Permalink
LIB

Daniel Duncan McKenzie

Liberal

Mr. McKENZIE:

If the minister will read the minutes of the evidence, he will find that every phase of the case was submitted to the commissioner.

Topic:   QUESTIONS.
Subtopic:   THE FARMERS BANK.
Permalink
CON

Thomas Wilson Crothers (Minister of Labour)

Conservative (1867-1942)

Mr. CROTHERS:

Was that particular one ?

Topic:   QUESTIONS.
Subtopic:   THE FARMERS BANK.
Permalink
LIB
CON

Thomas Wilson Crothers (Minister of Labour)

Conservative (1867-1942)

Mr. CROTHERS:

I have not seen it, although it may have been. If it were submitted to him and he found it was not the direct cause, I do not agree with him. If a trustee gives trust funds to a 4 p.m. dishonest solicitor, not knowing . that he is dishonest, although

he believes he is an honest man, he is held liable in the courts of this country. That has been held over and over again. Possibly some of the hon. members present have examined a case decided in England in 1901, namely, that of De la Bere versus Pearson, Limited. The defendants, Pearson, Limited, were newspaper proprietors in London and advertised that their city editor would answer inquiries for financial advice. The plaintiff invited a recommendation from him for a good stock broker, and the editor recommended one who transacted stock exchange business, although he was not a member of the stock

exchange. He had been advising the editor in financial affairs, and there was no evidence to indicate that the editor had any ground to suspect dishonesty. The plaintiff acted upon the recommendation of the editor and gave money to the trust broker for investment, and he appropriated the money to his own use. The man sued Pearson, the proprietor of the newspaper, and it was held by the highest court in England, except the Judicial Committee of the Privy Council, that Pearson was liable, although the financial editor believed the stock broker to be an honest man. In the case of the Farmers Bank, the Minister of Finance knew in law that Travers was a dishonest man and did not believe that he was an honest man. He should have known that he was dishonest; that he was guilty of fraud, that he was guilty of perjury. He would have known all these things if he had taken the course which it was his duty to take. Therefore, if the Minister of Finance were before a court in this country to-day, I venture the opinion that he would be ordered to refund every dollar that these depositors have lost in the Farmers Bank. We may not be in a position to enforce the law here.

Topic:   QUESTIONS.
Subtopic:   THE FARMERS BANK.
Permalink

June 3, 1914