March 27, 1924

CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

The Minister of National Defence said, and very emphatically, that the hon. member for West York (Sir Henry

Drayton) had made a statement which, at the time he made it, he knew had no warrant in fact. That is a distinct violation of the rules, even though supported by the laughter of hon. gentlemen behind.

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LIB

Edward Mortimer Macdonald (Minister of National Defence)

Liberal

Mr. MACDONALD (Pictou):

Do I understand that my hon. friend says that he did not know that there was no warrant in fact for his statement?

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CON
LIB

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

No hon. gentleman can

impute motives, and if the Minister of National Defence said that the hon. gentleman knew that the statement was not warrant in fact, that is not parliamentary.

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LIB

Edward Mortimer Macdonald (Minister of National Defence)

Liberal

Mr. MACDONALD (Pictou):

I will say

this, that if my hon. friend did not know it, he ought to have known it, because if my hon. friend had taken the slightest trouble-

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CON

Henry Lumley Drayton

Conservative (1867-1942)

Sir HENRY DRAYTON:

I would ask the Chair to request the hon. member to withdraw his statement.

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LIB

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER :

I will ask the hon. gentleman if he will withdraw that statement.

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LIB

Edward Mortimer Macdonald (Minister of National Defence)

Liberal

Mr. MACDONALD (Pictou):

Certainly. And I will show this House before I finish the few remarks I have to make that my hon. friend ought to have known there was no warrant for that statement. He knew there was presented to the government a petition from-

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CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

Mr. Speaker, I rise to a point of order. The rule is of no avail whatever if that is to be considered a withdrawal. I ask again for a ruling as to whether anything the minister has said is a withdrawal in any sense whatever.

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LIB
CON
LIB
LIB
CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

If the minister says he has withdrawn, I am satisfied.

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LIB

Edward Mortimer Macdonald (Minister of National Defence)

Liberal

Mr. MACDONALD (Pictou):

Certainly. My hon. friend from West York (Sir Henry Drayton) knew that there had been a petition presented to the government on behalf of sixty thousand depositors who had lost their money in the Home Bank. That petition was

Home Bank Investigation

presented by a representative delegation of men from all parts of the country, from British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Quebec. It was in the following terms:

To His Excellency General the Right Honourable Lord Byng of Vimy, G.C.B., G.C.M.G., M.V.O., Governor General of the Dominion of Canada, in Council.

The petition of the undersigned members of the Executive Committee of the depositors in the Home Bank of Canada, humbly sheweth:- .

(1) Your Petitioners are residents of various parts of the Dominion of Canada and are the duly appointed executive committee representing about sixty thousand depositors in the Home Bank of Canada.

(2) The said Bank was a Chartered Bank doing business under the provision of the Bank Act. Your petitioners are informed and believe that in the years 1915 and again in 1916 and in 1918 representations were made to the Department of Finance of the Dominion of Canada respecting the condition of the Home Bank of Canada and revealing a state of affairs that would have justified an investigation by the Department of Finance under the powers conferred upon the Minister of Finance under Section 56A of the Bank Act, whereby he was authorized to examine and enquire specially into any of the affairs or business of the Bank.

(3) Your Petitioners realize the seriousness of such action on the part of the Minister of Finance, and that the mere fact of causing an audit to be made might in itself bring about the failure of the said bank.

(4) Your Petitioners are also aware that at the time such representations and disclosures were made, the Country was at War and that the Minister of Finance, having regard to the public interest, was unwilling to precipitate a bank failure or crisis, or in any way disturb the financial condition of the Country, and that for such reason and on other good and sufficient public grounds, may not have deemed it advisable to exercise the power above referred to.

(5) If such audit had been made your Petitioners believe that the condition of the Bank would have been shewn to be such that its continuance in business could not have been further permitted.

(6) Your Petitioners believe that if the said Bank had ceased doing business at the time the said disclosures were made the then existing assets would have been almost, if not quite sufficient to meet all claims of creditors, whereas, by reason of the Bank continuing in business until the 17th day of August, 1923, and greatly increasing the amount of money belonging to the public on deposit, and at the same time permitting the assets of the said Bank to be greatly diminished in proportion to the amount of the deposits, the present depositors have suffered and will unless relief is granted, suffer a very severe loss.

(7) Your petitioners submit that the reasons an audit was not made of the said Bank, in accordance with the powers vested in the Minister of Finance, were reasons of a public and national character, and intended for the benefit of the public at large, and that therefore the loss to the present depositors occasioned by the Bank being permitted to continue to do business should be borne by the public at large and not by the present depositors.

(8) The said Bank and its predecessors. The Toronto Savings Bank and the Home Savings and Loan Company had for over fifty years been regarded as a safe depository for the savings of the public and the class of people who deposited their money in the said Bank was largely composed of wage earners with small earnings and their deposits consisted in many cases of the whole savings of a life-time.

(9) Your Petitioners submit that the confidence of the simple people throughout Canada in the banking

institutions of the country is of the very greatest importance to the industrial and commercial interests of the country and that the lack of such confidence would have a serious and detrimental effect on the whole industrial and commercial prosperity of the country.

(10) Your Petitioners therefore submit that whether rightly or wrongly the depositors of the Home Bank of Canada were largely of the opinion that the Finance Department of the Govermnent of Canada exercised such supervision over chartered Banks that it was impossible for depositors to lose their savings entrusted to such a bank the charter of which had been renewed from time to time by parliament and it is further submitted that the confidence of the people as a whole would be greatly restored if adequate relief were granted to these depositors.

Wherefore your petitioners pray that your Excellency be pleased to submit to Parliament an Act for the full indemnity of the depositors of the Home Bank of Canada against any loss suffered by reason of the failure of the said bank.

And your petitioners as in duty bound will ever pray. Dated this 23rd day of January, 1924.

W. T. J. Lee.

Edgar C. Sanders,

R. M. G. Anglin, E. H. Cleary,

W. A. Dover,

J. A. Sinclair, Henry Winfield, Arthur English,

S. S. Henderson,

H. H. Higginbotham, A. B. Campbell,

Paul Poisson,

A. G. Browning, W. T. Kernahan. J. H. Mitchell. J. C. Brudy,

J. O. Reilly,

J. F. Edgar,

J. P. Greacy,

W. A. Buchner, J. I. Weedon.

The delegation which presented that petition, made up, as I have said, of representative men from all parts of the country, alleged that in the years mentioned in the petition the attention of the then Minister of Finance, Sir Thomas White, had been called to the condition of the bank, and they asserted that instead of performing his duty under the provisions of section 56a of the then Bank Act, he made no audit such as was contemplated, and that had he taken this course a situation would have been disclosed which although it would probably have caused the failure of the bank, would have enabled the depositors to be reimbursed. That was their case. Therefore they claimed that on principles of justice and fair play they should be paid their deposits. They presented for the consideration of the government an interview which was given by Sir Thomas White to the Canadian Press, in which he admitted that he had received representations in regard to the bank, but gave the war and other reasons-I need not quote the interview in detail; most of it is unquestionably known to hon. gentlemen-as his justification for not having an audit made.

Now, I leave it to the judgment of every hon. member as to what was the duty of this government under the circumstances. Would the government have been justified, without any investigation, in asking parliament to vote the money necessary to compensate the

Home Dank Investigation

depositors for their losses? If, without a full and complete investigation, they had done so, then they would have been making (he Treasury liable not merely to those who lost money in the Home Bank, but to those who had lost money in the Farmers' Bank and in all other bank failures which had occurred in the history of the Dominion. Well, what was to be done? Was not the most natural and ordinary thing to do to make an investigation into the truth of the allegations set out in the petition? It was when we decided to make that investigation, in making which my hon. friend says, we were taking a political course entirely in order to get after Sir Thomas White.

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CON
LIB

Edward Mortimer Macdonald (Minister of National Defence)

Liberal

Mr. MACDONALD (Pictou):

In the face

of the petition presented to us, does my hon. friend mean to say there was any other course open to the government than the course we adopted of ordering a judicial investigation?

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CON
LIB

Edward Mortimer Macdonald (Minister of National Defence)

Liberal

Mr. MACDONALD (Pictou):

Mr. Speaker, what was the course adopted by the government of Sir Robert Borden in 1912, when allegations were made by the depositors of the Farmers' Bank which had recently failed with regard to the circumstances under which its charter was granted? Sir Thomas White himself was the finance minister at the time, and he and his friends cannot now complain if we have followed what he then recommended-Sir Thomas White recommended to Council the appointment of the late Sir William Meredith, then Chief Justice of Ontario, to examine into the truth of the statements contained in the petition. We have taken the same course to-day.

Then when parliament meets my hon. friends opposite say: "Oh, you are not investigating this thing completely enough." Well, we started out to do what the depositors wanted us to do. We took the position that if the statements contained in their petition were proved to be correct by the Chief Justice of New Brunswick, a jurist of high repute, then the government would be bound to take some action in regard to the matter. But my hon. friends come along and say: "We don't want to find out what

these depositors want to find out; we want everything investigated from the beginning to the end."

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CON

Henry Lumley Drayton

Conservative (1867-1942)

Sir HENRY DRAYTON:

If the government was so anxious to do just what the depositors asked, may I ask whether this sentence was put in at the request of the depositors:

-without in an way accepting the view that in the circumstances mentioned it is proper for the government to expend public moneys in the relief of the depositors of the said bank.

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March 27, 1924