July 2, 1940

NAT

John Ritchie MacNicol

National Government

Mr. MacNICOL:

Did the hon. member

spit it out?

Topic:   THE BUDGET
Subtopic:   DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISITER OF FINANCE
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LIB

Daniel (Dan) McIvor

Liberal

Mr. McIVOR:

The doctor said, "You

allowed a little drop of it to trickle down, and that did the trick." In that traffic we spend $180,000,000 a year. Why do hon. members not dare to protest against the drink traffic? I can tell you, Mr. Speaker. We are scared of losing the votes of the supporters of beer parlours. I am scared too, but not into silence.

Let me close upon a more hopeful note, a note of confidence in the morale of our country and the courage of our soldiers. I may be pardoned for reading an extract from a letter which I received from a young lad, an acquaintance of mine who is now in the air force. The men of that force may or may not be better than others, but I know them to be great lads. This is the extract:

The war news looks bad, but it looks as if it is up to the air force and the navy now, and that is where we shine. As long as our leaders stand up and show real common sense I am not a bit afraid of what the air force will do. There is nothing here but the will to fight, and I know that the boys will do their part.

That indicates the character and calibre of our air force; they will give a good account of themselves and chase the Hun and his leader back again ere long into that railway coach.

As I think of these youths, of Canada and its educational institutions, of our citizens who strive for the benefit of mankind, of the welcome extended by the press to news of the churches and reports of all good movements; as I see the Christian home and the old Bible restored to their honoured place, with the Bible used as a guide to life, not for superstitious reading; as I think of our Christian manhood and womanhood more steadfast than before in its trust in God, I cherish the hope of a glorious commonwealth greater than anything this world has ever known, in which God will be first and every good thing will have its rightful place.

At six o'clock the house took recess.

After Recess

The house resumed at eight o'clock.

Topic:   THE BUDGET
Subtopic:   DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISITER OF FINANCE
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PRIVATE BILLS

ALBERTA PROVINCIAL BANK


Mr. J. H. BLACKMORE (Lethbridge) moved the second reading of Bill No. 26, to incorporate the Alberta Provincial Bank. He said: There are several reasons why this house should proceed forthwith to give this bill second reading and refer it to the banking and commerce committee. Among the reasons which might be mentioned are, first, that the premier and cabinet of one of the provinces of this dominion have petitioned that this bill be enacted. This is a most unusual event in the history of Canada. Again, the government at present in power in Alberta is there definitely for the welfare of the common man. It set out with a proposal to give a dividend of $25 a month, however absurd that might seem. It set out also to give a fair price for primary and secondary products. Obviously both these proposals are in the interest of the common man. I feel, then, that I am justified in saying that the government is there primarily in the interest of the common people of the province. Again, that government has managed the affairs of Alberta unusually well. There has been no increase in the provincial debt since the Social Credit government took office. According to the best information I am able to obtain, Alberta is the only province in the dominion in which that is true. There has been a constant effort on the part of the present Alberta government to be realistic. It has endeavoured first of all to adjust debts so that they might eventually be paid. The principle which it has espoused and so energetically followed has come to be recognized pretty well all over the dominion to-day, namely, that debt should be adjusted to the ability of debtors to pay. The same is accepted as being true of interest. Everyone realizes to-day that it is utterly absurd to hold men to an interest rate of seven or eight per cent when money is being obtained at a rate of three-quarters of one per cent. The Alberta government has consistently striven to reduce the interest rate to a point at which it is possible to pay it, and then it has endeavoured to pay that rate honestly and without fail. It has been unable to meet all its obligations when they came due, with the result that there has been default, but there was no blame to be attached to the Social Credit government for that default. A Alberta Provincial Bank situation, had been built up for years which was completely impossible for them and which would have been impossible for any government of any name that could have been elected in Alberta. The government since it was elected has given the province sound management. It has saved a good deal of money for the people of Alberta. It has collected taxes well. It has increased the revenue of the province. For example, the oil returns of the province have increased $732,000 a year. The revenue from automobile licences has increased $760,000. The income from petroleum and natural gas rentals and royalties has increased $786,000. Liquor sales have yielded $930,000 more. There have been great savings to taxpayers on the insurance of government cars and government buildings, the total savings in three years being $111,104.74. They have organized a central purchasing board through which all the purchases of the government are made. Through that central purchasing board they hope to be able to save $400,000 a year. Between July 1, 1939, and February, 1940, they saved $260,000. In addition to these considerations, they have paid their interest promptly; they have paid off millions of dollars of the savings certificates which were hanging about their necks like a millstone when the government took office; in a general way they have done a good job of housekeeping in the province, building fine roads, improving the health of the people greatly, encouraging industry, endeavouring to refund the debt of the province, and in every other way that they found available they have managed the province well. I should like to read a quotation from a letter which I believe will be of interest. The Alberta government from the time they took office tried to refund the debt by every means which was possible to them, but they were unable to have a refund of that debt. One of the firms with which they were working was the Municipal Bond Company of Los Angeles. Mr. Harold B. Reed, representative of that organization, wrote to Mr. Low, the provincial treasurer, on March 4, 1940, a letter in which appeared these words: I presume that by this time you and your colleagues are in full swing of the fight to return your government to power and I am convinced that you will make a good account of yourselves. From the situation as I know it, you can be proud of the accomplishments which you have made in the matter of the finances of the province- I break off there to ask if hon. members suppose this man knew what he was talking about. He had access to all the provincial records; he examined with great care the 95826-804 financial position of the province, because he was counting on undertaking, with his associates, the refunding of the Alberta debt of over $160,000,000. It was very likely that he knew what he was talking about; his words, therefore, should carry more than ordinary weight: -and despite criticisms to the contrary, you have the strength which comes from the knowledge of having done well a difficult job. Even though the debt readjustment may still be a matter of uncompleted business, nevertheless I think it has been conducted in such a manner that it should be relatively easy of final accomplishment once the elections are over and the Rowell report is issued. Those words carry tremendous weight; they indicate that this man was completely satisfied after his investigation. It may be asked what bearing this has on the passage of this bill. I say it has important bearing, because it indicates the sort of men who are in charge of the affairs of Alberta, who have asked this government to give them a bank with which they can proceed with the rehabilitation of the province according to the principles in which they believe. Alberta is in a very difficult position; another reason why this matter should be given consideration. It has a heavy debt. It is a province of primary producers, in the main, and therefore subject to serious fluctuations in the prices of primary products. The tariff incidence is particularly heavy on the three central western provinces, and the freight rate is especially onerous to the people of Alberta. As they say, the freight rates "get them going and coming." Their land settlement problem is grave, because land settlement was carried on under the direction of the dominion government. As a result, large numbers of people were allowed to settle in areas that were too dry for settlement, that part of the province which falls within the Palliser triangle. There was a great deal of scattering out of the people, giving the province a heavy administrative task with respect to roads and other social services; Alberta has, for example, to care for ninety thousand miles of road. An extremely difficult situation awaits any government in that province. All the provinces are in trouble now; everyone realizes that. The Rowell commission was appointed to investigate conditions as between the provinces and the dominion, manifestly because the dominion realized that there existed a grievous problem and a grave situation. The dominion itself is in serious trouble. How we are all going to get out of the trouble no one would even dare forecast at the present time. It behooves us, therefore, to give earnest attention to the Alberta Provincial Bank



proposals of any group of thoughtful, careful people in this dominion. Fdr a good many years Alberta has been eager to be selfsupporting, to relieve the dominion of the burden and to stand on its own feet. Surely any group of people having that attitude ought to be given all the assistance they can safely be given. The people of Alberta ask for this bank. Can we in reason deny their request? I believe every one in this house at the present time realizes that there must be a change in our economic system. I believe I have heard more men express that idea in this house in the last week or so than in any previous two years since I have been here. What form is this change to take? We cannot agree on it. Many hon. members do not agree with the people of Alberta; yet I do not think any hon. member would be so reckless as to say that he positively knew the people of Alberta to be wrong. They may be right. If they are right, if they have the right solution, then surely hon. members want to know it. If they have not the solution, then I am sure all hon. members wish to give them every opportunity to go forward and prove to themselves that they have not. Then they will be satisfied, and so will the rest of the people of Canada. The proposed bank is safe. All the rules and restrictions which apply to the conduct of the ordinary bank will apply to the proposed bank for Alberta. Thus all the guarantees will be there to safeguard the deposits of the people; all the guarantees will be there to safeguard the people of the dominion against inflation and other abuses to which banks might be addicted. The bank is to be publicly owned. The shareholders are to be the people of Alberta, through their government; the directors are the members of the cabinet of that province as it may be constituted at any given moment. Therefore it is an ideal publicly owned bank. It is not to go beyond Alberta in its operations; therefore it is strictly an Alberta bank. Anything that happens to it or because of it will affect the people of Alberta and nobody else, at least directly.


LIB

Paul Joseph James Martin

Liberal

Mr. MARTIN:

How will it compare with the Ontario savings scheme?

Topic:   PRIVATE BILLS
Subtopic:   ALBERTA PROVINCIAL BANK
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SC

John Horne Blackmore

Social Credit

Mr. BLACKMORE:

I think it would be better to have that discussion in the committee, where we shall be prepared to answer all questions. I am afraid we would take up too much time if we carried on that discussion here.

Inflation will be rendered impossible because of the fact that there are abundant goods in Alberta, it being one of the richest provinces

in the dominion. The currency issue possible is strictly limited by the banking laws of Canada, which also strictly limit the credit issue. Some may be afraid that Alberta will borrow from the bank. The province is going without borrowing and is committed to the policy of refraining from increasing the provincial debt. Therefore I think I can safely say that the government of Alberta will not try to borrow from this bank. I repeat that the credit issue is limited, so there can be no possibility of inflation.

Finally, the bank is to exist only until 1944. Surely no serious damage can be done, either to the people of Alberta or to the people of the dominion, in such a short time. Some may feel that probably serious damage could be done; but let us bear in mind that the people of Alberta are alive and alert. They exercise influence on their government, just as do the people in any other province of this dominion. It is a foregone conclusion that they are not going to tolerate any foolish behaviour on the part of their government, no matter what that government may be. Anyone who has been in Alberta will know that, and of course anyone who has not been there will not know it.

Some may object to public funds being used for the $500,000. But let me recall the fact that the present provincial administration in Alberta has saved the province $500,000 over and over and over again. Therefore there need be no anxiety on the part of anybody in Alberta because of the fact that his money is going to be used for that $500,000.

In Alberta there is a central purchasing agency which, as I said a few moments ago, is saving $400,000 a year. At the rate it was going in February it undoubtedly will do that. That alone will supply the money which is to be used from the public fund. A moment ago I mentioned the great savings effected from liquor management.

Another aspect of the matter worthy of our attention is that the people of Alberta need banicing facilities. The number of banks in the western provinces which have closed in the last few years would, I believe, surprise hon. members. Between December 31, 1929, and July 31, 1935, there were ninety-two bank branches closed in Alberta.

Topic:   PRIVATE BILLS
Subtopic:   ALBERTA PROVINCIAL BANK
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NAT

Douglas Gooderham Ross

National Government

Mr. ROSS (St. Paul's):

Banks or branches?

Topic:   PRIVATE BILLS
Subtopic:   ALBERTA PROVINCIAL BANK
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SC

John Horne Blackmore

Social Credit

Mr. BLACKMORE:

Bank branches. In Manitoba forty-nine were closed, and in Saskatchewan, 160. Between December 31, 1929, and December 31, 1939, there were closed in Alberta 130 branch banks; in Manitoba, seventy-five, and in Saskatchewan 222.

Alberta Provincial Bank

Let us remember that people need banking facilities. If our present chartered banks are unable to give the facilities so vital to the economic welfare of our people, surely some government agency, somewhere, must take steps to deal with that situation. Alberta has taken such steps. In order to provide banking facilities, the Alberta government has established treasury branches which, to a surprising degree, have been successful. They have decreased unemployment and increased business. The Alberta government bank is designed to aid the treasury branches in accomplishing their good work.

There is a further matter bearing on an Alberta bank which I suggest is worthy of the attention of the house. In 1938 the Hon. Charles A. Dunning rose in his place in the house and in the hearing of many hon. members now present offered to give Alberta a bank. Hon. members will find his offer at page 1861 of Hansard for March 30, 1938.

Topic:   PRIVATE BILLS
Subtopic:   ALBERTA PROVINCIAL BANK
Permalink
?

An hon. MEMBER:

Read it.

Topic:   PRIVATE BILLS
Subtopic:   ALBERTA PROVINCIAL BANK
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SC

John Horne Blackmore

Social Credit

Mr. BLACKMORE:

I do not think it would be well for me to take the time of the house to read it; but it is there for anyone to read. In effect he said that if we would follow the rules contained in the banking laws of Canada, we could establish a bank in Alberta, and that he would gladly help to give us a charter. The proposed bank does follow the rules-every one of them.

Another matter of importance is this: The Prime Minister of Canada (Mr. Mackenzie King) promised he would keep his hands off Alberta. I believe when he made the promise he intended to keep it. This is one instance in which he can give Alberta somewhat of a free rein. The Conservative party, under the Right Hon. R. B. Bennett, were favourably disposed towards Alberta. On several occasions that great statesman signified his sympathy for Alberta, and did what he could to assist her. For a long time in Canada the Cooperative Commonwealth Federation have advocated a publicly owned bank. Under those circumstances I would expect this bank to commend itself to them.

So that in the discussion of this bill we shall not have to use all the time allotted to the discussion of private bills, may I say in closing that all the details any member may wish to have can be obtained before the banking and commerce committee, to which this bill should be referred. Before that committee we shall have responsible ministers of the crown from Alberta who will be ready to answer any questions any hon. member may wish to ask, and who will be prepared completely to satisfy whosoever may desire to go into that committee. That is the type of committee to which this house sends difficult tasks for careful consideration.

Inasmuch as there are on the order paper other bills awaiting discussion, and as there is not a great deal of time for the consideration of private bills, I shall close my observations by asking that hon. members permit this bill to be turned over to the banking and commerce committee for careful examination and consideration.

Topic:   PRIVATE BILLS
Subtopic:   ALBERTA PROVINCIAL BANK
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LIB

James Layton Ralston (Minister of Finance and Receiver General)

Liberal

Hon. J. L. RALSTON (Minister of Finance):

Mr. Speaker, I have listened with interest to the observations of my hon. friend, and I should like immediately to deal with what he has mentioned last, namely, his reference to what was said by my predecessor in office, the Hon. Mr. Dunning. From what Mr. Dunning said on that occasion I shall read two extracts, the first of which is as follows:

I suggest that in all seriousness, and I shall do the best I can to facilitate the formation of such an institution, within the four corners of this Canadian bank act.

The second extract is as follows:

True, they will have to come to this parliament for a charter, and I shall tell them here and now that if the social erediters of Alberta comply with that statute with which all other Canadian chartered banks have had to comply, and with which they must comply to-day, I for one shall be pleased to do all I can to facilitate the passage through this house of a bill granting a charter to a social credit chartered bank.

I am afraid that in the measure before the house the hon. member has not brought himself within the terms of the assurance given at that time by the Hon. Mr. Dunning. It does not come "within the four corners" of the Bank Act, nor does it "comply with that statute." I do not wish to take the time of the house at any length, because I propose to indicate that the government feels that at this time this bill should not have second reading, but it would be prepared to propose, in amendment, that the bill be not now read a second time, but that the subject matter thereof be referred to the select standing committee on banking and commerce, for consideration and report.

The outstanding feature of the bill-and I may say there are several unusual features in it-is that, entirely at variance with the provisions of the Bank Act, which provides for the election of directors by the shareholders, and the consequent election of a president, it purports in effect to make this parliament the rubber stamp of the premier for the time being of Alberta, in this way, that parliament shall now state, if the measure receives support in the other place, that, "The

Alberta Provincial Bank

members of the executive council referred to in section 1 of this act, shall be the directors of the bank." The members of the executive 'Council are of course chosen by the lieutenant-governor on the advice of the premier.

Section 1 reads:

Those persons who are for the time being members of the executive council of the province of Alberta are incorporated under the name of "The Alberta Provincial Bank" hereinafter called "the bank".

May I point out that this section does not come within the terms of the Bank Act. The Bank Act provides for individuals, whose names are placed before parliament as incorporators and whose responsibilities and banking experience can be ascertained, being incorporated after due examination by the house and by the committee. This bill provides, in effect, that at the will of the premier of Alberta, no matter who that may be, those whom he recommends to the lieutenant-governor as members of his executive council, automatically are to be the incorporators and shareholders of this bank. This is a considerable departure from the provisions of the Bank Act. Without being facetious at all, one might just as well consider the incorporation here and now of the board of trustees of any church or the committee of any club or the officers of any society, who may for the time being happen to be in office, as the incorporators and directors of a bank, and these directors would change automatically whenever the trustees, or committee men or officers change. I am quite satisfied that the house will realize that there is at least grave doubt as to whether that procedure is the procedure called for and contemplated by the provisions of the Bank Act.

It seems to me that that is the outstanding feature of this bill and the one which ought to be considered carefully before the bill is given second reading. It is an anomaly, it is unusual, it is unique in the history of banking legislation to have parliament place its seal of approval upon a body of men as organizers, incorporators and operators of a bank, simply because they happen for the time being to be holding a particular office, no matter how high that office may be. It seems to me that that feature should be enough to indicate to the house why this bill should not be given second reading at this time, but that the subject matter should be carefully examined by the banking and commerce committee.

As hon. members will have noticed, section 7 of the bill indicates quite clearly that this bank is not to be a bank "within the

four corners" of the Bank Act, to use Mr. Dunning's words, but is to be a bank in respect of which a great many of the sections of the Bank Act are not to apply. Without dealing at any length with these exceptions, may I just mention one or two. Section 14, from which this bank is to be excepted, prohibits the issue of bank notes until the approval of the treasury board has been obtained. That section is out. Section 15 requires that a certificate shall be procured from the treasury board with regard to the amounts to be paid in with regard to the incorporation and organization of the bank and the list of unpaid liabilities. This section also provides that the treasury board certificate is not to be granted unless the treasury board is satisfied that the requirements of the Bank Act and of the special act of incorporation with regard to the organization and incorporation have .been complied with, and that the expenses of incorporation and organization are reasonable. This section also is not to apply.

Section 16 provides that if the treasury board certificate is not granted within one year, all the powers of the bank shall cease. It is provided by this bill that these sections are not to apply to the bank which it is proposed to incorporate. Section 20 of the Bank Act sets out the minimum qualifications of a director. A director must be the sole owner in his own right of shares of the bank on which $3,000 has been paid up, when the paid-up capital of the bank is one million dollars or less. He must be the sole owner of shares of the bank on which $4,000 has been paid, when the paid-up capital of the bank is over one million and does not exceed three million dollars. A director must have stock to the value of $5,000, when the paid-up capital stock of the bank exceeds three million dollars. That section is not to apply to the proposed bank. Section 23 of the Bank Act reads:

The directors, as soon'as may he after their election, shall proceed to elect, by ballot, from their number a president and one or more vicepresidents.

The directors may also elect by ballot one of their number to be chairman of the board and one to be honorary president.

But that section is not to apply to this bank. Instead of that this bill provides that the lieutenant-governor in council may appoint one of the directors the president and another the vice-president of the board of directors of the bank. He may also fix the quorum of directors for the purpose of a directors' meeting. I do not think I need trouble the house at greater length with regard to the other provisions of the Bank Act which are

IMr. Ralston]

Alberta Provincial Bank

excluded in their application to this particular bill. I know my hon. friend will not regard me as treating this matter lightly if I do not go exhaustively into the details of the bill now, but I do submit that because of the first feature I have mentioned, namely, the proposal that we shall here and now incorporate whoever happens to be selected from time to time by the premier of Alberta for the lieutenant-governor as his executive council to be the directors of this bank, and that the lieutenant-governor in council is to be given the power to elect the president and other officers of the bank, this matter is one which ought to be considered seriously by the banking and commerce committee.

We are not asking the house at this stage to refuse further consideration in connection with the bill, but rather asking to have the subject matter of the bill discussed before the appropriate committee. May I point out that several rather grave constitutional questions are involved. There is the question whether the dominion parliament can make a banker out of the lieutenant-governor in council of the province. That I submit is a serious question. There is also the question whether parliament can compel the lieutenant-governor in council to undertake the business of banking, which is what is proposed to be done here. For these and other reasons which I could give, I trust that the hon. member will accept the amendment which I propose to move. I move:

That the bill be not now read a second time, but that the subject matter thereof be referred to the select standing committee on banking and commerce for consideration and report.

Topic:   PRIVATE BILLS
Subtopic:   ALBERTA PROVINCIAL BANK
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NAT

Richard Burpee Hanson (Leader of the Official Opposition)

National Government

Hon. R. B. HANSON (Leader of the Opposition) :

Mr. Speaker, I have only a few words to say about the amendment and the motion now before the house. I am not going to oppose the amendment, but I suggest to the minister that his course is not a courageous one. Either there is a need for this bank, or there is no need. There is a principle involved that should receive the consideration of the government and this bill should go through the house or it should not go through. I shall not make any observations at this time as to the contents of the measure beyond saying that if you eliminate the provisions of twenty or twenty-five sections of the Bank Act from this charter, you are not going to have a bank, you are simply going to have a department of the provincial government of Alberta. I think the minister should have discussed the principle involved in this measure rather than have it go to the banking and commerce committee where it may be buried in oblivion and never return to this house. That is likely to be the fate of this bill.

The government, through the minister, should have a policy with respect to applications for bank charters, whether made by the province of Alberta or by any other group of individuals. I well remember when my friend, the late Hon. J. A. Robb, was Minister of Finance and an application was made by a group of gentlemen from my own province for a charter for a bank to be called the Eastern Bank of Canada. The very first consideration which, if I remember correctly, Mr. Robb took into account in connection with that application was the question of the necessity for a new bank in eastern Canada. He questioned very closely, not the bona fides of the applicants, but the necessity for establishing a new banking institution down there having regard to the services that were being performed by the old-established chartered banks in that part of the country. I think he would have refused the application if I had not made a personal appeal to him myself on behalf of the incorporators, who were not particularly friendly to me, by the way, on the ground, first, that they believed there was the necessity for a new chartered bank and, second, that they were quite capable of underwriting the whole initial $500,000, or whatever the initial paid-up capital was to be. On that basis the charter was granted, but it never became effective because unfortunately the chief promoter died quite suddenly and that ended the scheme.

With regard to this bill I have no objection, as I said at the opening of my remarks, to having it referred to the banking and commerce committee, but I warn my hon. friends to the left that it will be the burying place for this bill. We can see requiescat in *pace written on it right now-R.I.P.-it will never emerge from that committee, and certainly it never should in its present form. I will say that, and I will content myself with that.

Topic:   PRIVATE BILLS
Subtopic:   ALBERTA PROVINCIAL BANK
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LIB

George Henry Ross

Liberal

Mr. G. H. ROSS (Calgary East):

Mr. Speaker, since I represent an Alberta constituency and feel strongly that it would not be in the interest of Alberta to pass this bill, I think I should set forth some of my reasons for opposing it.

In the first place I challenge the statement of the hon. member for Lethbridge (Mr. Blackmore), the leader of the Social Credit group, that such a bill as this had the approval of the former Minister of Finance, Mr. Dunning.

The object of this bill is to create a bank. The capital stock of the projected bank is to be issued to and vested in the provincial treasurer of Alberta in his official capacity, and shall be held by him and his successors in office on behalf and for the use of the

Alberta Provincial Bank

province. The directors are to be those persons who are, for the time being, members of the executive council of Alberta. Therefore the charter is being applied for by the corporate body known as the province of Alberta. It is to be a provincial bank pure and simple. The stock is to be owned by the bank and the directors are to be members of the executive council of the province. Mr. Dunning never offered in this house to assist in the creation of a bank owned and operated by a corporate body known as the province of Alberta. What he did was to offer to assist a group of Social Creditors should they wish to incorporate a bank and comply with the provisions of the Bank Act. Let me read his words, from Hansard of 1938, page 1861:

My suggestion is that inasmuch as the Social Credit movement boasts considerable strength in one province of the dominion, and from that point of view at least, the provincial point of view, is a movement of major dimensions, those who believe-

Mark these words:

-that the banking system can be employed to put into effect the Social Credit theory and that the banking system has unlimited privileges such as have been outlined by my hon. friends, have within the four corners of the Canadian Bank Act the opportunity of their lives. All they have to do is, of themselves-

Not the province, but the Social Crediters who wish to put their theories into effect.

-to form one of these institutions which we call a Canadian chartered bank. The procedure is all set out in the law. True, they will have to come to this parliament for a charter, and I shall tell them here and now that if the Social Crediters of Alberta-

Not the corporate province of Alberta, but the Social Crediters.

comply with that statute with which all other Canadian banks have to comply and with which they must comply to-day, I for one shall be pleased to do all I can to facilitate the passage through this house of a bill granting a charter to a Social Credit chartered bank. In that way my hon. friends would have, under their own control, all of the privileges, and it is my duty to point out also that they would have all the responsibilities of a Canadian chartered bank.

Later on be says, at page 1862:

Any group of citizens in Canada may come together for the purposes outlined in the Bank Act of Canada.

Any group of citizens, not a corporation.

I am suggesting to my hon. friends that they are a group of citizens in Canada; that those in Alberta who adhere to their theories are citizens of Canada, and that as citizens of Canada believing in the Social Credit doctrine they can see to it that only those who believe in that doctrine may have any control or say in the chartered bank they may form.

So that it was an offer made not to a corporate body, the province, but to a group of Social Crediters of the province; and I have no doubt that if a group of Social Crediters applied to-day for a bank charter, complied with the provisions of the Bank Act and put up their own money, the application would receive the sympathetic consideration of the house. But to-day these men want to put their hands into the treasury of Alberta and use the money of the province to finance and carry on this institution. Mr. Dunning never offered to assist any such proposition.

Banking differs from other businesses in that bankers handle money for other people on a very large scale. As the money is being handled for others on a very large scale, an additional duty is imposed upon this house when an application comes before it, to see to it that the persons who are to be entrusted with the handling of the money are persons who are qualified and who will probably make a success of banking. In the past successful public enterprises of this type have been organized quite differently. A separate corporation would be set up with a board of directors who were familiar with the business to be transacted by the corporation. The directors would be selected because of their sound business judgment and because they would be likely to make a success of the business to be undertaken. They were usually appointed for fixed periods and were subject to supervision by the government that granted them incorporation. The Hydro-Electric Power Commission of Ontario and other successful corporations were organized in that way.

But in the proposal before us the experience of ages is cast to the winds. The directors of the proposed bank are to be those persons who are for the time being members of the executive council of Alberta. Even the president is to be chosen from among them. None of them is a banker, and none has had any experience or training in business that would qualify him to be a director or manager of such an institution. There is no provision for continuity of policy or management. The government may change two or three times in the course of a year. If it does, the board of directors of this bank changes two or three times in the course of a year. Each board will have its own ideas as to how a bank should be run. Much experimenting will be done with the depositors' money. Hard-earned savings will be frittered away in carrying out foolish experiments. Are we going to be parties to such recklessness? Furthermore, they do not want to apply to this bank

Alberta Provincial Bank

section 30 of the Bank Act which provides for the removal of directors for maladministration or other just cause.

Let us examine a little more closely the record of the first directors of this projected bank. Their past record should be of assistance in determining whether they are fit and proper persons to manage such an institution.

To secure election in 1935, Mr. Aberhart, the present premier of the province, promised a dividend of $25 a month to each and every adult in Alberta. He also promised interest-free production loans of $1,500 to each producer. Some of the people were bold enough to inquire of him where he was going to get the money to operate this bank and where he proposed to get the money to make these loans. He told them in all sincerity that he was going to do it with a fountain pen and entries in books which he would keep for this purpose. All he asked was eighteen months time within which, presumably, to train the fountain pen.

After their election the first step towards reaching their goal was to indulge in a covenant-signing crusade. The covenant signers were asked to turn over each year one-half of their crops to the government to help pay for this $25 a month dividend.

Topic:   PRIVATE BILLS
Subtopic:   ALBERTA PROVINCIAL BANK
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SC

Charles Edward Johnston

Social Credit

Mr. JOHNSTON (Bow River):

Where does the hon. gentleman expect to go when he dies?

Topic:   PRIVATE BILLS
Subtopic:   ALBERTA PROVINCIAL BANK
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?

An hon. MEMBER:

Alberta.

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Subtopic:   ALBERTA PROVINCIAL BANK
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LIB

George Henry Ross

Liberal

Mr. ROSS (Calgary East):

Several signed

the covenant, but rumour has it that they first transferred their property to their wives. Then they took good care to see that their wives did not sign. The covenant-signing campaign collapsed after costing the province $10,000. By this time the farmers of Alberta had begun to realize that dividends did not depend on fountain pens and book entries but that they had something to do with the farmers' crops.

Then came a prosperity certificate proposal, a certificate intended to take the place of money, a scheme devised to get credit into the hands of the consumers. They managed to get rid of much of this spurious money among the public. It is to be noted, however, that none of the members of the government had sufficient faith in the scheme to accept any part of their pay in this spurious money; they required when they were paid to be paid in the coin of the realm. After thousands of dollars were spent on prosperity certificates, the scheme was dropped.

The Aberhart government then imported two experts from England: Powell at $12

a day and a bonus of $4,000; the other expert, Byrne, was given a ten-year contract at $6,000 a year. These men conceived it to be their duty to make a frontal attack on the banks. The idea was to control the banks by placing them under the domination of a social credit board, the members of whom knew nothing whatever about banking. They ignored the fact that banks come under federal jurisdiction. The necessary legislation was enacted by the province of Alberta, but it was duly vetoed by the dominion government.

Having failed in their attack on the banks, they opened up a number of treasury branches throughout the province. At last they visioned their utopia where the fountain pen would play its full part. These treasury houses are still being extended from time to time. The more houses they open, the more money they lose. Already they have cost the province more than a million dollars.

Mr. Aberhart and the other members of the executive council have for years been proclaiming that banking is a racket, that credit can be extended indefinitely by making bookkeeping entries with a fountain pen, and that the issue of unlimited credit is the key to prosperity. His government have defaulted in $12,000,000 of Alberta bonds and $6,000,000 of provincial savings certificates. They have arbitrarily repudiated one-half of the interest rate payable on Alberta's debts. And these defaults and repudiations were not dictated by necessity; they were done deliberately and gloried in as representing real statesmanship.

The hon. member for Lethbridge (Mr. Blackmore} in the course of his remarks complained that many branches of banks throughout Alberta were being closed. Can any one wonder at the banks closing their branches under such circumstances?

Topic:   PRIVATE BILLS
Subtopic:   ALBERTA PROVINCIAL BANK
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SC

John Horne Blackmore

Social Credit

Mr. BLACKMORE:

Mr. Speaker, would [DOT]the hon. member permit a question? Did he notice that far more banks closed in Alberta before the Social Credit government went into power than closed afterwards?

Topic:   PRIVATE BILLS
Subtopic:   ALBERTA PROVINCIAL BANK
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SC

July 2, 1940