June 2, 1939

CON

Charles Hazlitt Cahan

Conservative (1867-1942)

Mr. CAHAN:

-and not to enter into any sort of arrangement or not to use political pressure in order to have the public treasury assume a part of their obligations which they are able to pay. And when the treasury assumes such obligations it necessarily assumes them on behalf of every taxpayer within dominion jurisdiction. That is the main objection I have to the bill.

The other objection I have pointed out in committee, and the records of the committee will stand as a statement of my position. I do not wish to enter into details before the house, nor is it necessary to do so. If the bill is intended as a means of political propaganda in the approaching election, although I cannot speak for the west, I am confident that in the east it will not be a vote getter to any considerable extent. Some of the leading members in the committee, representing eastern constituencies, were as strong as I am in opposition to certain phases of the bill which I have mentioned. I regret they are not in their seats to-day to re-express before the house the objections they made at that time.

Central Mortgage Bank

Apart from this, my main objection, I regret very much that the minister, as the representative of the government, has decided to make the central mortgage bank a branch of the Bank of Canada, and to function under the officers of the Bank of Canada. That, I assure the minister from personal knowledge, goes beyond the intention of those who framed the original Bank of Canada Act, and it was not then contemplated that its function would be so extended. If it is so extended as to mean that a branch of the bank, or practically the Bank of Canada, may undertake the liabilities which mortgagees throughout Canada, from the Atlantic to the Pacific, are able to assume and pay, then there will be political pressure-and political pressure that a weak government never can withstand-to make the Bank of Canada assume and pay other liabilities of other citizens of Canada, and other liabilities of other companies which are engaged in the multifarious classes of business throughout Canada. If political pressure is so great as to compel the government to assume the mortgage indebtedness of those who are able to pay, then we are fast approaching that political state in which pressure will compel the government to take over the liabilities of other large classes of our people who are able to pay.

I still contend that a debtor should pay his honest debts to the extent of his ability to pay, and the assumption of any part of a debtor's debts by the dominion treasury, when he is able to pay, is a gross injustice to other honest debtors who are paying their way. I suppose one might go on and speak for the half hour with regard to this bill, but I have stated the special objections which I have to this legislation. These objections will be found in the statement which I made on the second reading and in the various statements I have made at the hearings before the committee on banking and commerce, of which I was a member.

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
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LIB

Daniel (Dan) McIvor

Liberal

Mr. DANIEL McIVOR (Fort William):

Mr. Speaker, it is rather reluctantly that I follow the hon. member who has just spoken (Mr. Cahan). I admire him for his wisdom and courage and the beautiful language which he uses, but I disagree with him in this matter. I represent a constituency in which there are a number of farmers who have had to assume mortgages, and I have been instructed to commend the government for this legislation. My experience has been that eight and nine per cent is more than any farmer should have to pay, and again I commend the government for bringing down this legislation, which is long overdue. The bankers cannot collect

eight per cent, and these interest rates should have been reduced long ago. I congratulate the minister upon this progressive legislation.

At one o'clock the house took recess.

The house resumed at three o'clock.

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
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CON

Henry Herbert Stevens

Conservative (1867-1942)

Hon. H. H. STEVENS (Kootenay East):

Mr. Speaker, we are considering the third reading of an act to incorporate the central mortgage bank. Let me at the outset lay down one or two general principles. It is common knowledge, of course, that there are periods when conditions favour the debtor class; again, there are other periods which are considered favourable to the creditor class and detrimental to the debtor class. Broadly speaking, one might say that the period from the opening of the century down to 1929 in the main benefited the debtor class. Then followed the decade down to the present time, when economic conditions, not only in Canada but generally at least throughout western civilization, have seemed unduly to favour the creditor class.

To the extent that the alleged object of this bill is to bring some measure of justifiable relief to the debtor class, there is and can be but little room for difference of opinion. But let me say to the minister at this point that the ideas incorporated in this bill are not original, nor is it the first time that they have been submitted or suggested to parliament. In passing I would refer to some suggestions which were made to a special committee of the house, of which Mr. Ganong was chairman, in 1935.

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
Permalink
LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

Was that the housing

committee?

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
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CON

Henry Herbert Stevens

Conservative (1867-1942)

Mr. STEVENS:

The housing committee. At that time certain suggestions were made which were not adopted, but I wish to refer to them. There was a suggestion for the establishment of a mortgage bank along lines which in general were quite different from the principle of this bill. It was associated with a general housing program. I shall not go into the details, because perhaps this is not the place to do so; but that proposal, together with the measures which were before that committee, has been in the Department of Finance since that time. I am of the opinion that had the proposal of that day been given consideration much earlier in the period of this parliament, say three or four sessions ago, valuable results might have been secured. Unfortunately, this bill comes before us at the end of the fourth session of this parliament; and members of the banking and

Central Mortgage Bank

commerce committee will recall that when we were going through the bill many things cropped up which indicated clearly that if we had been considering the matter in the session of 1936 we could have handled it with distinct advantage to the country as a whole. I suggest, therefore, that we as a parliament missed an opportunity in that respect.

As to the matter of affording relief to deserving and distressed debtors, there is probably no difference of opinion among hon. members; it is generally conceded that this is desirable, and in respect of the portion of the bill which refers to the farm mortgage there has been pretty general agreement that, while there was not need for the same measure of relief throughout the whole of Canada, there was such a widespread area of distinct distress that it constituted a national problem and warranted unusual and even drastic action. Therefore I say that, in so far as bringing relief to deserving and distressed debtors is concerned, there is not very much difference of opinion.

But I submit that this bill, when it becomes law. will not inspire thrift, will not be conducive to the continuance of that degree of respect for law and order which is characteristic of Canadian people; nor will it preserve the sanctity of contract. In its results and effects it will tend in my opinion to lessen these qualities and rather to promote dependence than inspire independence. We as Canadians are rather proud of our individual independence. In that more than in any other characteristic lies the strength of our national character. Anything which tends to lessen the desire for independence should receive careful scrutiny.

Turning more directly to the bill, I would ask, is this bank-and incidentally at this point I question, as we did in the committee, the wisdom of using the word "bank"-to be a stimulating factor in the solution of our financial difficulties, or is it not to become really a glorified receiver? There are in this measure two distinct functions which in my opinion should have been kept separate. One is the liquidation of debts which are owed by those whose degree or condition of distress is such that there is little or no hope of their salvaging their position without definite assistance. That is a condition of liquidation; it is the business of a receivership, and to the extent that the proposed legislation may be applied to that sort of thing it. should have been kept distinct and separate from its other functions.

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
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CCF

James Shaver Woodsworth

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

Mr. WOODSWORTH:

May I ask the hon. member if there is any practicable way by which those two purposes could have been kept distinct?

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
Permalink
CON

Henry Herbert Stevens

Conservative (1867-1942)

Mr. STEVENS:

Personally I think so. It was a suggestion which I and others made to the banking and commerce committee. Had this bill come before the committee earlier in the session, as it should have, we would have had time to explore these things and probably reconstruct the bill much more effectively than was possible in the limited time at our disposal. The other function, that of inspiring the extension of credit facilities for new lending is, I submit, an entirely different matter. The two are not compatible; on the contrary they are conflicting.

The next point to which I wish to refer is that the governor and the deputy governor of the Bank of Canada are made the governor and the deputy governor of the central mortgage bank. Not only that, but the governor of the Bank of Canada is made its chief executive. As I stated in the banking and commerce committee, I have nothing but admiration and respect for the governor of the Bank of Canada as a great banker. Indeed I go much further and say that I have met or listened to few men who had a deeper and more profound grasp of politic-economic problems than has the governor of the Bank of Canada. I have no hesitancy in paying the highest tribute to him in his capacity as governor and in a broader and more general capacity. But the function of a banker is distinct and separate from the function of the manager of a mortage corporation or the chief executive of an insurance corporation. There is a marked distinction between the functions of the two; there is indeed an absolute difference in the psychology which they involve.

I am indeed pleased, Mr. Speaker, to pause and to give vocal expression to the applause that has just greeted the hon. member for Prince (Mr. MacLean), who has just come in.

I am sure we are all glad that he has recovered from illness and is able to be in the house . again.

I was about to say that it does not follow that because a man may be an exceptionally capable banker he will necessarily be the best type of person to fill the chief executive position in a mortgage bank. In fact, I do not care to limit myself to that term; I would say an institution, a large part of the duty of which will be to liquidate existing mortgages and to put into operation a new and extended scheme. I submit, therefore, that the measure is weak in that respect as well.

There are two main desiderata which the bill is supposed to satisfy. In the first place there is the need for debt adjustment, and that again is divided into sections, as the hon. member for St. Lawrence-St. George (Mr. Central Mortgage Bank

Cahan) has already so ably pointed out. A large number of members of the committee on banking and commerce and other hon. members share this view. On the one hand there is the class who might be described, in my opening words, as deserving and distressed debtors. There is no question about the desirability of assisting these. On the other hand, among the beneficiaries under this bill, there will be a very large number of debtors who are quite competent to carry out the contracts entered into by them under various mortgages; and not only, perhaps, are the majority of those in the urban class capable of carrying out their contracts, but those contracts are not unreasonable at rates varying from five and a half to six and a half per cent, or, if we take the average given by a witness we had before us, from 5-9 to 6-2 per cent. There is no need, therefore, to make provision out of the funds of the taxpayers of Canada to benefit that large class. There again, in my opinion and in the opinion of many other members of the committee, there is a definite weakness in the bill.

The hon. member for Fort William (Mr. Mclvor) in his characteristic manner, before the noon recess, congratulated the minister. My hon. friend has a habit, during the passage of various measures, of rising in his place in the house and congratulating the minister. I also congratulate the minister upon having such a devoted and abject supporter as he has in the hon. member for Fort William.

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
Permalink
LIB

Daniel (Dan) McIvor

Liberal

Mr. McIVOR:

If the hon. gentleman would allow me to make a suggestion, I would say " intelligent."

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
Permalink
CON

Henry Herbert Stevens

Conservative (1867-1942)

Mr. STEVENS:

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
Permalink
LIB

Jean-François Pouliot

Liberal

Mr. POULIOT:

On a question of privilege, the Minister of Finance is quoted as having said this morning that the member for Temis-couata had vilely slandered one of his officials. According to Funk & Wagnall's dictionary "vilely" is the adverb for "vile," which means "morally base, or abominable, bad, base, brutish, common, criminal, foul, immoral, infamous, sinful."

In the first place, Mr. Speaker, I have slandered nobody. In the second place, far

be it from me ever "vilely" to slander anybody. And it is superfluous to refer you to Bourinot, Beauchesne or any other parliamentary authority to find that such language is highly unparliamentary. Therefore, sir, I ask you kindly to notify the Minister of Finance to withdraw at once what he said about me.

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
Permalink
SC

Percy John Rowe

Social Credit

Mr. ROWE (Athabaska):

Mr. Speaker-

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
Permalink
LIB

Jean-François Pouliot

Liberal

Mr. POULIOT:

If he does not withdraw I apply to him all that is in the dictionary, and to his deputy minister. He is just a coward.

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
Permalink
LIB

Walter Edward Foster (Speaker of the Senate)

Liberal

Mr. SPEAKER:

Order.

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
Permalink
LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

There is no doubt about the word "coward" being unparliamentary.

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
Permalink
LIB

Walter Edward Foster (Speaker of the Senate)

Liberal

Mr. SPEAKER:

It is not parliamentary. The hon. member will withdraw that.

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
Permalink
LIB

Jean-François Pouliot

Liberal

Mr. POULIOT:

Well, we should both withdraw, because the language the minister used is highly insolent to any member of the house. I am ready to withdraw if he will, and he should set a good example if he wants the rules of the house to be observed.

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
Permalink
LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

I do not know what

your ruling will be, Mr. Speaker. I have not my words before me. I do not desire to cause any embarrassment to the chair. I am not expert in conveying my thoughts, which may be unparliamentary in themselves, in language which is parliamentary. My hon. friend is capable of doing that. What I said this morning I really meant, honestly meant. I believe the hon. member was this morning slandering a civil servant who by virtue of his position is unable to reply, and I stated I knew of my own knowledge that the slander had no foundation. That I cannot qualify.

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
Permalink
SC

Percy John Rowe

Social Credit

Mr. ROWE (Athabaska):

Mr. Speaker-

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
Permalink
?

Some hon. MEMBERS:

Withdraw.

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
Permalink
?

Some hon. MEMBERS:

Question.

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
Permalink

June 2, 1939