March 27, 1924

LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Liberal

Mr. MACKENZIE KING:

I know.

Topic:   EDITION
Permalink
CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

Then what statement

of mine are you answering?

Topic:   EDITION
Permalink
LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Liberal

Mr. MACKENZIE KING:

My right hon. friend admits we have taken the right course-

Topic:   EDITION
Permalink
CON
LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Liberal

Mr. MACKENZIE KING:

-in having a judicial inquiry instead of a parliamentary inquiry. When it came to the matter of a judicial inquiry the government was anxious that whoever was chosen should be chosen from another part of the Dominion. I mean from a part of Canada that was not immediately interested in this matter. Many names naturally presented themselves to the government when we were selecting a commissioner. We might have taken a commissioner from Montreal, Toronto, or from Winnipeg or elsewhere. As my hon. friend from East Calgary (Mr. Irvine) mentioned this afternoon, this failure affected people from the province of Quebec out to the Rocky mountains but it did not affect, I think, any persons from the Maritime provinces. It was for that reason the government went to the Maritime provinces and chose as commissioner to investigate this matter, the chief justice of one of the courts, who as commissioner receives no salary for the services he is rendering. The government's whole course was taken with a view of inspiring confidence on the part of the members of this House, on the part of the public, and particularly on the part of the depositors who are most affected. .

Now, as to the matter of the correspondence, to which my right hon. friend has referred, let me repeat that the communication spoken of that was in the possession of Sir Thomas White and was passed on by him to

Sir Henry Drayton was, so far as the government has any knowledge of it at all, a private document in the possession of these ministers or their private secretaries. Let me direct the attention of the House to this circumstance: The gentleman who was secretary to Sir Thomas White was also the private secretary to his successor, Sir Henry Drayton, when the latter became Minister of Finance. The same gentleman was secretary to both. Sir Thomas White when he left the Finance department gave certain instructions to his secretary, left certain papers with him, told him that some of these papers were to be given to Sir Henry Drayton.

Topic:   EDITION
Permalink
CON
LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Liberal

Mr. MACKENZIE KING:

My right hon. friend says all of them were to be given. Very well, "all of them." Then if they were to be given as public documents to Sir Henry Drayton I submit, Mr. Speaker, that it was equally the duty of Sir Henry Drayton to give instruction that these papers be put in the possession of the Minister of Finance who succeeded him. My right hon. friend will recall that when he left office he had a private secretary or a couple of private secretaries; that when he left the position which he formerly held he took with him a large part of the correspondence of the office of Prime Minister, and it was quite right that he should. Some of it he subsequently returned, some of it could not be found anywhere and on this account I asked if I could not obtain it and he had it sent over to me a week or two later iby the private secretary who had it. That' was perfectly proper and perfectly right, but would I have thought of going to the secretary of my right hon. friend and saying to him "I want you to tell me about all the papers that were in Mr. Meighen's possession. I want you to give me his private papers, the documents that he has left with you." Had I done that I should have felt that I was taking an extraordinary course, and I should think no person who had been secretary to a minister who would be prepared to hand over documents to his successor without instructions, would be worthy of a position of confidence in the government service.

Topic:   EDITION
Permalink
CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

The Prime Minister forgets that the secretary was instructed to hand them to the minister's successor.

Topic:   EDITION
Permalink
LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Liberal

Mr. MACKENZIE KING:

He has not

forgotten anything. My right hon. friend

Home Bank Investigation

says he was instructed to hand them to the minister to whom he was going to be private secretary?

Topic:   EDITION
Permalink
CON
LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Liberal

Mr. MACKENZIE KING:

Who was Sir

Henry Drayton, a political and personal friend of Sir Thomas White. If that was the right course of procedure, if that was a duty performed at the time, then I say the duty equally devolved on Sir Henry Drayton to see that these documents were put in the possession of Mr. Fielding which they were not.

Topic:   EDITION
Permalink
CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

If Sir Henry Drayton

got them. I do not know that he did get them.

Topic:   EDITION
Permalink
LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Liberal

Mr. MACKENZIE KING:

My right hon. friend says he does not know whether he got them. Then how could he expect that the subsequent Minister of Finance (Mr. Fielding), would ever get them? The whole object my hon. friend has in mind is perfectly apparent. However, the point is a small one, I do not think it need be stressed. There is one circumstance, however, I would like to bring to the attention of the House: The administration is convinced of the necessity of having an investigation into this matter. We want the public to know the truth about these papers. Unfortunately the Minister of Finance, through illness, is unable to be in his seat. He told me in his own room, and I talked with him at his bedside, that he had no knowledge whatever that any of these papers were in existence until after he read about them in .the press and discovered that there were some documents which he had not seen and has not seen yet.

Topic:   EDITION
Permalink
CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

Was that not long before the investigation was ordered. Why were not the documents requested if the government had not copies, and the facts gone into by the government?

Topic:   EDITION
Permalink
LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Liberal

Mr. MACKENZIE KING:

I have already answered my right hon. friend as to why the government did not go into the facts. Supposing the government had started to investigate Sir Thomas White's doings and the doings of the hon. member for West York (Sir Henry Drayton) what would have been said of its method of procedure? We have taken the proper course. We have appointed a commissioner before whom all parties can appear, and before whom all parties will be made to appear and give evidence in this matter.

LMr. Mackenzie King.]

Now, Mr. Speaker, so as not to take up too much time of the House let me conclude briefly with a statement of the further action of the government. When the petition was presented in the form in which it was presented, by all the persons whose names I have mentioned, drawn up with the great care and great skill with which it was drawn up, the government assumed that it would be impossible to present a case to any tribunal for the depositors in a stronger or more effective form than that in which the depositors themselves thought best to present it to the government. And so we decided to use the language of the petition, not with a view to directing any investigation against Sir Thomas White, not with a view to inquiring into the acts of our predecessors, but that by taking only what was put before us by the depositors we might be removed from any criticism of any kind. We took their language, their words and their documents, and made them the basis of the investigation. The period mentioned in the document that was presented to us included certain years, and those years were mentioned in the order in council just as they were presented in the document; but when it was suggested to us the period should be extended, as soon as representations were made on that score, we immediately amended the _ order in council and had the inquiry carried on to the time the bank closed its doors. I submit it would be impossible to have a representation presented in a fuller, clearer, more unbiased, and unprejudiced manner than that. Let me recall a remark of the ex-Minister of Finance (Sir Henry Drayton) . He asked, why did the government not refer the representations that were made to it before the bank closed? For the life of me I could not make out what representations he had reference to. I do not know what representations were made, unless it was possibly one or two gentlemen coming and asking the government if they would not help to save the situation the day before the closing of the bank.

Topic:   EDITION
Permalink
CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

Did the hon. minister say these gentlemen came just before the bank closed?

Topic:   EDITION
Permalink
LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Liberal

Mr. MACKENZIE KING:

My impression is yes. The only recollecion I have of any deputation is a deputation that came late one evening to ask if the government would make some huge deposit, in order to meet the situation for the next day, and I myself declined to entertain a thought of the kind. My recollection is that we vere told the bank

Home Bank Investigation

would fail if that were not done, and I think it was the day following, or two days after, that the bank closed its doors.

Topic:   EDITION
Permalink
CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

Would the hon. Prime Minister tell us who the gentlemen were?

Topic:   EDITION
Permalink
LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Liberal

Mr. MACKENZIE KING:

I will be prepared to make a statement as to who they were, every one of them, but I think the proper place is before the royal commission appointed to look iBto the matter. They were representatives of the bank. I will give the names to the commission when it is taking evidence on the matter. The point I want to direct attention to is that the order which the government drafted covers this very point. Let me read one clause of it-

The Committee of the Privy Council therefore advise that the powers of the commissioner under the said order in council be not limited to the specific years 1015, 1916 and 1918 referred to in the petition of the depositors, but should extend to an investigation of the affairs of the said bank during the whole interval between the issue of the bank's charter and the failure of the said bank.

Then listen to this-

Including any representations made to the government of the day.

Does that not include everything? Does that not include the representations of anyone who ever spoke to the government or made any reports to them from the day the bank opened its doors to the day they were closed. The government's order in council says:

Any representations made to the government of the day as to its conditons, any action taken by any of the ministers of finance upon such representations as may have been made, and the effect on the position of the depositors of any audit under Section 56a of the Bank Act if made at any time in consequence of such representations.

I say it is not possible to put into the English language words more comprehensive and words more inclusive than the words used there, but I say if it is possible, if any hon. member will point them out to the government, I will try to have them inserted in another order in council, if that is necessary for the purpose. I cannot make it too plain that the government wants this matter investigated from beginning to end, and every feature and aspect of it investigated, and if there is anything that is material which is not covered by the order in council, we are prepared to see that those matters are inquired into. If the government has not sought to go back to the days when banking began in Canada, it is because the government has been seeking to confine its inquiry within limits that will make it possible for this parliament to deal with this matter at this session. It is 50

not the government that has been delaying the inquiry or causing it to be prolonged. We brought down the - order in council couched in the words of the depositors, who are the people most interested. We took it in their own language and did not deduct from it or add to it, for the reason that we were anxious to see that their wishes in the matter were met. But hon. members of the House were the ones who raised the point that we had not carried the investigation down far enough. They and others asked that we should supplement it, and we added to it, and now the exMinister of Finance (Sir Henry Drayton) says we should go further and that we should not be content to have the inquiry from the day the bank started business to the day it closed. He blames us because we have not given authority to examine conditions which in the first instance led to the establishment of the bank. I think, after all we have heard to-day, that as a government we would perhaps be wise if we confined this investigation to what we have already set out in the orders here. But let me say this: That rather than be under a suspicion that there is anything in the matter that we are seeking to conceal, I am agreeable that the commission shall inquire into what took place before the bank was instituted, when the bank was instituted, and after it was instituted, and any period that any hon. member of the House can suggest to the commission. I do not think it can be made broader or more comprehensive than that.

Let me come to the amendment of my hon. friend from Pontiac (Mr. Cahill). As I read this amendment, it clearly has one object above every other object in view. My hon. friend wants immediate action, just as the hon. member (Mr. Irvine) who moved the resolution wants immediate action. They do not want to wait until the commission has completed its inquiry to have the matter looked into. They want to go to work at once with a parliamentary committee. We are prepared to say that that part of the matter which it seems wise and expedient should go in the first instance to such a committee, shall go to a parliamentary committee. We do not think it is wise or right or proper to put those who are our political opponents in judgment before a parliamentary committee. We do not think that is a proper way of proceeding. But with respect to such matters as those which affect the Bank Act, the possibility of amending it, or as to anything growing out of investigation which will help to show wherein the Bank Act can be amended to the benefit of depositors, and to the saving

Home Bank Investigation

of similar situations in the future, we not only agree but will welcome any suggestion that may be made in that connection; and for that reason we are only too glad to accept the amendment which has been moved-and which I think my hon. friend from East Calgary (Mr. Irvine) will feel is very much akin to his own motion, if not largely in the identical words of it-to refer such matters to the committee on Banking. The right committee to which to refer these matters is the Banking committee. Now what does the amendment say? It does not say we are to leave these matters until the commission has made its report. The amendment says:

In the opinion of this House, in view of the failure of the Home Bank and of the fact that official prosecutions and inquiries have been instituted, including a royal commission which has been appointed to investigate the facts alleged in the petition representing all the shareholders of the bank-

I would like to direct the attention of my hon. friend to the fact that I think he meant "depositors" when he used the word "shareholders".

-and the affairs of the bank generally, and considering that the evidence received and to be taken before the several tribunals will be available for consideration, the Select Standing Committee on Banking and Commerce should be instructed to consider the provisions of the Bank Act with a view to recommending such amendments to the Bank Act as will better protect the interests of depositors generally and will prevent similar occurrences in the future, and also to consider the report of the Royal Commission in its bearing upon these matters and with respect to the possibility of saving the Home Bank depositors from loss.

In other words, there are, in connection with this matter of the failure of the Home Bank four or five public investigations proceeding at the present time and every one of these investigations will throw some light on this bank failure and its causes as well as consequences and will reveal some aspect, some important question in connection with it. There are the prosecutions against all the directors and certain officers of the Home Bank, conducted by the Attorney General of Ontario under the Bank Act and the Criminal Code. As soon as those prosecutions are gone on with, that matter will be available. If they are delayed, that need not delay this committee; there will be other matters to consider. There is an investigation by a special auditor appointed by the Minister of Finance (Mr. Fielding), to report to the Minister as to the condition under which the business of the bank has been carried on since opening its doors as a chartered bank. This is being done under existing legislation. This report, as soon as it is made to the Acting Minister of Finance, will be available, and

I imagine that it will not be very long in being made. Then the liquidators appointed by the courts to take charge of the affairs of the bank are going into these matters and making reports. The evidence and material coming before them will all be available for the Banking committee in considering this matter.

Finally, the government has appointed this royal commission which will begin its sittings immediately; some of these sittings will be held at Ottawa, some at Toronto and elsewhere. The proceedings of this commission will be reported from day to day, and they can be taken to the committee from day to day. The committee need not wait until the commission has made its final report to have matters brought out. If hon. members are interested in some particular phase of the question, they can appear before the commissioner at Ottawa, while he is here, and have such matters brought out. With all these investigations proceeding, I submit that it is not possible to conceive of any manner in which a committee could be supplied more effectively with all relevant and pertinent facts.

Topic:   EDITION
Permalink
IND

William Charles Good

Independent Progressive

Mr. GOOD:

How far will the committee

be restricted in the matter of calling and hearing witnesses?

Topic:   EDITION
Permalink

March 27, 1924