63.-Bank absorptions (mergers) in Canada since 1867.-Concluded
Purchasing Bank. Bank Absorbed. Date.
June 21, 1875 Feb. 13, 1909 Dec. 31, 1924 April 30, 1924 Sept. 12, 1901 Feb. 22, 1868 June 1, 1868 Oct. 31, 1902 July 2, 1908 July 2, 1908 Mar. 31, 1911 April 15, 1913
Sterling Bank of Canada
Commercial Bank of Canada
Crown Bank of Canada
Home Bank of Canada La Banque Internationale du Canada
3The Banque d'Hochelaga after absorbing the Banque Nationale adopted the name Banque Canadienne Nationale. .
Section 1 of this bill provides that no agreement by a bank to sell the whole or any portion of its assets to another bank shall be of any force or effect until parliament approves and confirms the agreement.
Section 102 of the present act provides that if the agreement is approved by the shareholders, the agreement may be executed under the seals of the banks, parties thereto, " and application may be made to the governor in council, through the minister, for approval thereof." This bill provides that these last words be stricken from the section.
The proposal is to substitute these words:
No agreement by a bank to sell the whole or any portion of its assets to another bank shall be of any force or effect until parliament approves and confirms the agreement.
Last session this particular matter came up and I asked for a return bringing down any correspondence as to proposed mergers. The report was placed on the table within the last two or three days of the session stating that the department had no information; but within six weeks after parliament closed we read in the daily papers that an agreement had been entered into and approved by both banks for the merger of the Standard bank and the Canadian Bank of Commerce. That was done over the head of parliament. What is parliament for? Are we to sit here like a lot of dummies and have nothing to say about such things? Are we back to the days of the family compact? What have the farmers to say about this? I understand there is a feeling in the west against any more mergers. Just the day before yesterday Sir James Aikins, the president of the Canadian Bar Association, an Imperial bank director and former Lieutenant-governor of Manitoba, came out strongly in this regard and gave an interview in opposition to these mergers. He said:
The people are fearful that the banks of the country, if further amalgamation is permitted,
may have too great control over the distribution of the country's money and thus hamper the merchants and the general public in their financial organization.
He favours a decentralized Canadian banking system with large head offices and multitudinous small branches scattered all over the country, thus facilitating depositing and distribution of money. It has many advantages over the banking system in the United States with large head offices and very few branch offices for the collection and distribution of the people's money, he said.
He spoke very strongly against mergers, saying further:
"The judgment of the people is pretty sound. The people constitute a fair jury, I think, and it is clearly to be seen that the public is fearful of too great centralization in the Dominion's banking world," said he.
"The people are afraid that the banks of the country, if further amalgamations should come to pass, may have too great control over the distribution of the country's money and thus hamper the merchants, dealers and the general public in their financial organization.
"It would not be wise to flout the opinion of the people, and the people are afraid of further amalgamations."
Outlining in detail the advantages of the Canadian banking system, with its large head offices and multitudinous small branches scattered all over the country, thus facilitating more decentralized depositing and distribution of money, as compared with the United States banking system, with large head offices and no or very few branch offices for the collection and disbursement of the people's money, Sir James stressed the importance of the public sentiment "that further amalgamation might not be fair, as it would endanger a fair collection of surplus money as well as a fair distribution."
I believe those remarks represent the views of the mass of the people of Canada.
This matter was discussed a few years ago in this house. Why should parliament have no control over such large institutions as the Canadian Bank of Commerce and the Standard bank in connection with an agreement for a merger like that? The parliament of Canada is a board of directors representing the people of all the provinces and surely
Bank Act-Mr. Robb
they should have something to say as to whether such mergers are in the public interest or not. It may be that some few are in the public interest. Why did the Canadian Bankers' Association not come to the support of the Home bank and keep the doors of that bank open, thus preventing the suffering which exists to-day amongst widows and orphans in Ontario and some of the other provinces? If parliament had asserted its rights, functions and prerogatives long ago, this failure could not have taken place; but parliament did not and is content until some bank closes its doors, with the result that thousands of suffering widows and orphans are left without money and afterwards have a hard time to get a few dollars back. The time has come now for no more bank mergers in this country. There are only ten or eleven banks left now. The trusts and combines are ruling Canada to-day; they are flourishing like a green bay tree here. In the United States they have a Sherman anti-trust law and we should have one in Canada and make some effort to put on the brakes. Parliamentary institutions in this country are in danger on account of the way in which the banks, combines and trusts are t-o-day in control of affairs, and the time has come for this parliament to assert its rights, prerogatives and functions. The trouble is that there is too much rigidity of the party system in these matters in parliament and the big corporations of the country are using that rigidity to accomplish their raids and to get legislation passed which should never be passed by any free parliament. Amongst those who have suffered through the failure of the Home bank are widows and orphans by the dozen in my constituency, people who put their all into the Home bank and who got very little out except pin money by way of a contribution by this parliament.
I asked in the house about the merger of the Standard bank and the Canadian Bank of Commerce and I was told that there were no papers and that the department knew of no merger. The minister may be able to justify in some way this particular merger. This bill does not deal with mergers that are past and gone; it speaks of the future, providing that, as regards any mergers that are contemplated, parliament should reassert its rights and prerogatives and that, if it is a free parliament, it should be given control over the banking trusts of the country. The banks to-day consist of the Bank of Montreal, the Bank of Nova Scotia, the Bank of Toronto, the Provincial bank, the Canadian Bank of Commerce, the Royal bank, the Dominion bank, the Imperial bank, the Wey-bum Security bank. The financial papers now say there are going to be some more mergere between the smaller banks. We have an opportunity in that case of asserting the rights of parliament to vote for what is in the public interest, namely, that any more agreements between one bank and another shall have the approval of the high court of parliament.