May 26, 1939

CON

Robert James Manion (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MANION:

But it should have been brought in a month and a half ago.

Topic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, ETC.-CONTINUATION OF DEBATE ON MOTION FOR SECOND READING
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LIB

Malcolm McLean

Liberal

Mr. McLEAN (Melfort):

It was, as a

matter of fact. The Prime Minister gave notice of it two months ago. The Minister of Finance introduced the resolution about a month ago, and it is no fault of the government or, indeed, of any individual member, that it has not been proceeded with earlier. But my hon. friend knows as well as I do that much time has been spent in the house at this session in unnecessary talk about theories which have never received much favour anywhere in the country.

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CON

Robert James Manion (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MANION:

The measure could have been brought in any time; the government had complete control.

Topic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, ETC.-CONTINUATION OF DEBATE ON MOTION FOR SECOND READING
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LIB

Malcolm McLean

Liberal

Mr. McLEAN (Melfort):

But they could not ensure its passage through the house.

Some hon. M EMBERS: Surely.

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LIB

Malcolm McLean

Liberal

Mr. McLEAN (Melfort):

Oh, no. Just

look at the other measures that have been before the house. Surely my hon. friends are not going to say to me that the government should have railroaded or forced it through, or exercised rigid control over the house. I am sure my hon. friends will agree with me when I say that the democratic form of government is dependent on responsible representatives' who are members of chambers of this kind, and, unless we discipline ourselves, democracy cannot function and it cannot endure.

For a moment I am going to deal with some of the objections taken to the bill by the hon. member for Peace River (Mr. Pelletier). He said deliberately that this bill should not now be proceeded with. Why? Because we have not accurate information. Can anyone imagine a more foolish reason, given by a member representing a rural constituency in western Canada who came down here to solve the monetary problems of the nation? He has said that we have no accurate information about the problems involved in this bill, that the ability of the debtor to pay has not been considered, and that the measure should not be proceeded with. The bill contains a section providing for crop share payments, and the payments that will be asked from a debtor are to be reduced. But his ability to pay is not to be reduced.

Then the hon. member was afraid that this legislation would cancel provincial legislation. We have no responsibility in that

Central Mortgage Bank

regard as long as we keep within the realm of dominion authority. He said also it would be an invasion of provincial jurisdiction. It ill lies in the mouth of an hon. member supporting a provincial administration which has sought to invade federal jurisdiction so often, but fortunately so unsuccessfully, to say anything like that. The last complaint he had to this bill was that in the final analysis the companies would suffer no loss. Apparently this is a wrong principle to adopt in this house. It is harmful in the eyes of some members, fortunately few in number, if in the final analysis the companies are to suffer little or no loss.

I want to deal with two or three objections which were raised by the hon. member for St. Lawrence-St. George, including one or two apparent slips on his part. He is reported on page 4398 of Hansard as follows:

The policy in the past has been to allow individual creditors or companies to deal by compromise with individual debtors, and that policy has prevailed in this country thus far.

There was a time when that was correct, but on reflection I think my hon. friend will agree that during the past few years, under the legislation enacted by the dominion in connection with bankruptcy proceedings, this has not been so. Individual creditors and others have not been allowed to deal simply by compromise with their debtors. A compulsory method has been used rather than cooperation.

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CON

Charles Hazlitt Cahan

Conservative (1867-1942)

Mr. CAHAN:

Only in the case of insolvency or bankruptcy.

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LIB

Malcolm McLean

Liberal

Mr. McLEAN (Melfort):

Under the

Farmers' Creditors Arrangement Act.

Topic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, ETC.-CONTINUATION OF DEBATE ON MOTION FOR SECOND READING
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CON

Charles Hazlitt Cahan

Conservative (1867-1942)

Mr. CAHAN:

In the case of insolvency; on any other basis its application would be invalid.

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LIB

Malcolm McLean

Liberal

Mr. McLEAN (Melfort):

Legally, perhaps, but in practice it was not.

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CON

Charles Hazlitt Cahan

Conservative (1867-1942)

Mr. CAHAN:

Practice should conform to legality.

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LIB

Malcolm McLean

Liberal

Mr. McLEAN (Melfort):

I think my hon. friend will admit that there are people whose affairs were reviewed under that act and who are going on as they were previously. They have never been declared bankrupt and they are not going to be declared bankrupt unless some change is made in the law. That affected many more than those who passed through farmers' creditors arrangement proceedings. We were told by my hon. friend that the farmers in the west are likely to be deprived in the future of any hope of obtaining money on mortgages under such a universal lending system. Unfortunately that

*Air. M. McLean.]

is the position in which they now find themselves. Compulsory restrictive measures have been in effect. I am not saying that they were not necessary at one time; I am not criticizing an}' government or administration for passing such legislation, but the effect is that many farmers are not now able to get any new money. In order that the farmers may adequately finance their operations, in order that young men may be able to start out for themselves and improve their positions, it is important that new money should be available.

There was one other objection raised by my hon. friend to which I should like to refer. He said that the farmer or home owner who has not been able to pay six to eight per cent interest:

-could not hope to meet the interest and principal payments of his newly adjusted loan at the rate of ten per cent per annum, which rate, or something near it, would necessarily apply during the earlier years. That would be five per cent for interest and five per cent for amortization of principal.

I would point out to my hon. friend that

the amortization rate on a twenty year mortgage at five per cent in equal annual payments would amount to 8'03 per cent. The man who is paying from six to eight per cent-we will take the larger rate because that has been the one most generally charged -on a mortgage running twenty years, with the principle due at the end of the term, would still have all of the principal outstanding against him; he would have paid only the interest. If that mortgage were revalued down to eighty per cent and the interest reduced to five per cent, with 3-03 per cent for principal, a total rate of 8-03 per cent on eighty per cent of the value would bring the interest and principal payments down to 6-64 per cent. At the end of twenty years not only would he have paid a lower total rate annually, but the principal would have evaporated along with the interest.

I am not criticizing my hon. friend; I am glad that he brought up this point so that it can be dealt with. The annual payments of interest and principal to be made under a mortgage covered by this legislation will be less than the previous interest payments used to be. We have been striving for a great many years for the adoption of this principle. We believe that in the past many mortgages might have been paid off several times over if the amortization principle had been adopted. But only interest payments, and high ones, were required, and at the end of the term the principal still remained.

For these reasons, and many others I have not mentioned, I hope that this measure passes

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second reading and is sent to the committee to which it is to be referred. Its principles have been understood for a long time; they are quite simple and few in number.

Topic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, ETC.-CONTINUATION OF DEBATE ON MOTION FOR SECOND READING
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CCF

Thomas Clement (Tommy) Douglas

Co-operative Commonwealth Federation (C.C.F.)

Mr. DOUGLAS (Weyiburn):

In view of the provision in section 16, paragraph (k), does the hon. member think that this bill will operate in the province of Saskatchewan?

Topic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, ETC.-CONTINUATION OF DEBATE ON MOTION FOR SECOND READING
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LIB

Malcolm McLean

Liberal

Mr. McLEAN (Melfort):

I have the bill here, but I do not recall exactly the provisions of that section.

Topic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, ETC.-CONTINUATION OF DEBATE ON MOTION FOR SECOND READING
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CCF

Thomas Clement (Tommy) Douglas

Co-operative Commonwealth Federation (C.C.F.)

Mr. DOUGLAS (Weyburn):

I have reference to the provincial legislation which prevents foreclosures.

Topic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, ETC.-CONTINUATION OF DEBATE ON MOTION FOR SECOND READING
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LIB

Malcolm McLean

Liberal

Mr. McLEAN (Melfort):

If there is any province in Canada that will be willing to cooperate with this government, it is Saskatchewan. I am sure that province will be ready to cooperate to the utmost in order that the benefits of this legislation may accrue to its people.

Mr. JEAN-FRANCOIS POULIOT (Temiscouata): Mr. Speaker, I have suffered in

patience for four years when reading the financial legislation that has been introduced here, and I regret to have to say that for many reasons I cannot swallow this bill. Ever since I was a lad I have always been fighting for liberalism.

Topic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, ETC.-CONTINUATION OF DEBATE ON MOTION FOR SECOND READING
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CON

Robert James Manion (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MANION:

Why does not the hon.

member come over here?

Topic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, ETC.-CONTINUATION OF DEBATE ON MOTION FOR SECOND READING
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LIB

Jean-François Pouliot

Liberal

Mr. POULIOT:

Not unless my hon. friend again becomes a Liberal. I have been fighting for Liberal ideas ever since I was a lad.

I was taught liberalism in my own family as soon as I could start to learn things. I regret to have to speak on personal matters, but my great grandfather, a very humble merchant of Isle Yerte, Temiscouata, was member for Rimouski county at a time when it included Temiscouata. He was a member of the legislative assembly at the time the ninety-two resolutions were passed, and he voted for them. When Baldwin was defeated in the city of Toronto it was my great grandfather who gave him his seat, and if any doubt it I would refer them to the Parliamentary Companion of 1874. where they will see that Jean-Baptiste Pouliot. who voted against confederation with the Liberals of the time because he saw in it a disguised legislative union, arranged it with my maternal great grandfather so that Baldwin was elected in a con-, stituency of which mine is now part.

What are the ninety-two resolutions? The chart of our liberties, our bill of rights, cannot be found in any treaty between England and France. It must be looked for elsewhere. It 71492-289J

cannot be found in any act of the British parliament. It was precisely those ninety-two resolutions which gave us responsible parliamentary government. I hold in my hand the reports of the legislative assembly which contain those resolutions. They are too long for me to read now, but I have made excerpts which I shall give to the house.

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CON

Charles Hazlitt Cahan

Conservative (1867-1942)

Mr. CAHAN:

May I ask if that volume is in the parliamentary library?

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LIB

Jean-François Pouliot

Liberal

Mr. POULIOT:

Yes, sir.

Topic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, ETC.-CONTINUATION OF DEBATE ON MOTION FOR SECOND READING
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CON

Charles Hazlitt Cahan

Conservative (1867-1942)

Mr. CAHAN:

I have often wondered where I could find those resolutions.

Topic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, ETC.-CONTINUATION OF DEBATE ON MOTION FOR SECOND READING
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May 26, 1939