April 1, 1938

CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

But the person selected need not be a member of the shareholder company.

Topic:   THE RESTIGOUCHE LOG DRIVING AND BOOM COMPANY
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LIB

Joseph Enoil Michaud (Minister of Fisheries)

Liberal

Mr. MICHAUD:

That is correct; he need not be. It is to avoid this inconvenience that the amendment is moved.

Topic:   THE RESTIGOUCHE LOG DRIVING AND BOOM COMPANY
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

I am greatly surprised that any corporation would seek by a resolution of its directors to appoint a stranger to be a director of a company in which it was a shareholder. If they decided to appoint any member of the corporation that is a shareholder to be a director, that would be all right. That would apply to the president, vice-president and officers of the shareholding corporation. Surely you are not going to appoint as a director of the Restigouche boom company a perfect stranger who has no corporate holding in the enterprise. That is a new provision of company law; it is something that has never -been done in this country.

Topic:   THE RESTIGOUCHE LOG DRIVING AND BOOM COMPANY
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LIB

Joseph Enoil Michaud (Minister of Fisheries)

Liberal

Mr. MICHAUD:

This company is owned by two other companies, the International paper company and the Fraser company. They found it difficult to have their own

Restigouche Log Driving Company

directors to act as directors of the boom company, and they want to select certain of their employees, such as the head of the woods department. He might not happen to be a director or shareholder of the holding company, but they want to make him a director of the boom company.

Topic:   THE RESTIGOUCHE LOG DRIVING AND BOOM COMPANY
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

It is proper that a shareholder of a shareholding corporation may become a director of the boom company; but when you say that by resolution of the directors of the shareholder company they can elect a perfect stranger to be a director of the boom company, you are transgressing every rule that governs the conduct of corporations in any country. One of the qualifications has been that before a person can be elected a shareholder he shall in some way be connected with the enterprise. The usual practice has been to qualify him by transferring to him a single share. That is so in our Canadian National enterprises. This practice has been carried on in order to maintain the corporate identity of the companies. All that would be necessary to do to meet the ordinary requirements would be to change the word " person " to the words " member of a corporation." I would suggest that progress be reported and this bill considered at the next sitting of the committee. This would be a dangerous precedent for us to establish here, and I hesitate to see it done once attention has been directed to it.

Topic:   THE RESTIGOUCHE LOG DRIVING AND BOOM COMPANY
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LIB

Thomas Alexander Crerar (Minister of Mines and Resources)

Liberal

Mr. CRERAR:

If he were a shareholder in one of the two companies it would be all right.

Topic:   THE RESTIGOUCHE LOG DRIVING AND BOOM COMPANY
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

That is all you want.

Topic:   THE RESTIGOUCHE LOG DRIVING AND BOOM COMPANY
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LIB

Thomas Alexander Crerar (Minister of Mines and Resources)

Liberal

Mr. CRERAR:

I take it that this amendment would not be necessary.

Topic:   THE RESTIGOUCHE LOG DRIVING AND BOOM COMPANY
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

Let me put the situation in this way. We have a company known as Jones Limited. One of the shareholders of Jones Limited is Smith Limited, a corporation. As the act now stands, the president, vice president or manager of Smith Limited could be made a director of Jones Limited. This amendment seeks to make it possible for anyone to have a resolution passed by the directors of Smith Limited appointing a man on the street or elsewhere a director of Jones Limited. I think the minister realizes that such a thing is never done.

Topic:   THE RESTIGOUCHE LOG DRIVING AND BOOM COMPANY
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LIB

Thomas Alexander Crerar (Minister of Mines and Resources)

Liberal

Mr. CRERAR:

I admit that it is rather unusual, but I do not see where any harm would result from it here.

Topic:   THE RESTIGOUCHE LOG DRIVING AND BOOM COMPANY
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

We would be doing something that has never been done.

Topic:   THE RESTIGOUCHE LOG DRIVING AND BOOM COMPANY
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LIB

Thomas Alexander Crerar (Minister of Mines and Resources)

Liberal

Mr. CRERAR:

The leader of the opposition speaks of appointing a stranger; but what would happen in this case, according to the explanation given by the sponsor of the bill, is that they would appoint the manager or some one of their employees.

Topic:   THE RESTIGOUCHE LOG DRIVING AND BOOM COMPANY
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

The manager is a member.

Topic:   THE RESTIGOUCHE LOG DRIVING AND BOOM COMPANY
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LIB

Thomas Alexander Crerar (Minister of Mines and Resources)

Liberal

Mr. CRERAR:

He might not be a shareholder.

Topic:   THE RESTIGOUCHE LOG DRIVING AND BOOM COMPANY
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

That is what the amendment provides for, that a stranger may be made a director of the boom company.

Topic:   THE RESTIGOUCHE LOG DRIVING AND BOOM COMPANY
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LIB

Thomas Alexander Crerar (Minister of Mines and Resources)

Liberal

Mr. CRERAR:

The manager could scarcely be described as a stranger.

Topic:   THE RESTIGOUCHE LOG DRIVING AND BOOM COMPANY
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

It is in the bill now.

Topic:   THE RESTIGOUCHE LOG DRIVING AND BOOM COMPANY
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LIB

Thomas Alexander Crerar (Minister of Mines and Resources)

Liberal

Mr. CRERAR:

At the present time no person would be eligible to be elected a director unless he was a stockholder in the Restigouche Log Driving and Boom Company.

Topic:   THE RESTIGOUCHE LOG DRIVING AND BOOM COMPANY
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

This bill changes that.

Topic:   THE RESTIGOUCHE LOG DRIVING AND BOOM COMPANY
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LIB

Thomas Alexander Crerar (Minister of Mines and Resources)

Liberal

Mr. CRERAR:

That is the fact.

Topic:   THE RESTIGOUCHE LOG DRIVING AND BOOM COMPANY
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April 1, 1938