May 8, 1944

CCF

William Scottie Bryce

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

Mr. WILLIAM BRYCE (Selkirk):

I should like to ask a question of the Minister of Agriculture which affects the production of food in Canada. Our farmers are striving to produce the best select hogs, but the present congestion at the Winnipeg packing plants forces the farmers to hold back their hogs with a serious loss in grade due to overweight. What steps are being taken to overcome this difficulty?

Topic:   HO.GS CONGESTION AT WINNIPEG PACKING PLANTS
Permalink
LIB

James Garfield Gardiner (Minister of Agriculture)

Liberal

Hon. J. G. GARDINER (Minister of Agriculture) :

Mr. Speaker, the question has to do with the present heavy run of hogs and beef cattle to packing plants. The statement made by the hon. member for Selkirk would suggest that there is some difficulty in getting these hogs and cattle through our packing plants, and there is.

For the information of the house, the number on the payroll at the packing plants in Winnipeg on January 1, 1944 was 3,450, and on April 22, 1944, the number was 3,684. In other words there were over 200 more employees in the packing plants at Winnipeg on April 22 than there were on January 1 of this year. That is a very unusual condition. In the past it has been usual for hog deliveries to be low at this time of the year as compared with the earlier period. But as a result of the great production of live stock upon farms th'is year as compared with any previous year, the run through the plants both of hogs and cattle is unprecedented. There were about seventy-five per cent more hogs going through the plants weekly in February and March of this year than were going through the plants a year ago, and they are still running about forty per cent over the same period a year ago. While we were not processing any beef for export a year ago, we have up to date purchased for export what would amount to about 105,000 head of cattle, to be processed and shipped to Britain. That will give some idea of the increase in the food production and in live stock from the farms and of the greatly increased work which the processing plants have had to do in getting this meat through the plants and on its way to Britain. The Labour department was appealed to some weeks ago to assist in pro-

viding labour for these plants, and the Department of Labour and the Department of Agriculture have been in contact with the farm organizations of western Canada and the western governments and have at present the cooperation of the three western governments and the farm organizations of the west in securing all the labour possible for these plants.

It would appear that this is not a temporary condition but one which will continue to exist, owing to the very high deliveries of live stock to the plants. An attempt is therefore being made, and I think successfully, by the labour department to secure the necessary labour to keep the live stock moving through the plants just as rapidly as possible.

Topic:   HO.GS CONGESTION AT WINNIPEG PACKING PLANTS
Permalink
NAT

Ernest Edward Perley

National Government

Mr. PERLEY:

May I follow up with a question the minister's statement that there is difficulty in the marketing and processing of live stock. Is he considering setting up a board of live stock commissioners? I think there is a need for it. Would he make a statement on that?

Topic:   HO.GS CONGESTION AT WINNIPEG PACKING PLANTS
Permalink
LIB

James Garfield Gardiner (Minister of Agriculture)

Liberal

Mr. GARDINER:

The last question refers to a matter of government policy. The matter has been under consideration for some time and is still under consideration.

Topic:   HO.GS CONGESTION AT WINNIPEG PACKING PLANTS
Permalink
CCF

George Hugh Castleden

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

Mr. CASTLEDEN:

The minister admits

that there is congestion at Winnipeg. Has consideration been given to increasing temporarily the weight limits on hogs and cattle to prevent a loss to the farmer as a result of this congestion?

Topic:   HO.GS CONGESTION AT WINNIPEG PACKING PLANTS
Permalink
LIB

James Garfield Gardiner (Minister of Agriculture)

Liberal

Mr. GARDINER:

There are no weight

limits on cattle. There are, of course, weight limits on hogs that enter into the production of bacon and ham. I do not think it would be wise to change the limits. As a matter fact, we are making an effort to get the hogs through the plants at the present weight limits, and we are hopeful that we shall be able to do that in due course.

Topic:   HO.GS CONGESTION AT WINNIPEG PACKING PLANTS
Permalink
CCF

George Hugh Castleden

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

Mr. CASTLEDEN:

In the meantime the farmer is taking a loss.

Topic:   HO.GS CONGESTION AT WINNIPEG PACKING PLANTS
Permalink

CANADIAN NATIONAL RAILWAYS

LEASE OP PROPERTY TO ALPHONSE I.EDOUX- ANSWER TO QUESTION ON MAY 4


On the orders of the day:


IND

Liguori Lacombe

Independent Liberal

Mr. LIGUORI LACOMBE (Laval-Two Mountains (Translation):

Mr. Speaker, I

wish to direct a question to the Minister of Transport (Mr. Michaud). Recently I asked him the following questions as reported at 2594 of Hansard for May 4, 1944:

Bank Act-Mr. Hanson (York-Sunbury)

1. Have the Canadian National Railways leased to one Alphonse Ledoux a property in the Oka district, county of Two Mountains, province of Quebec?

2. If so, what is the amount of annual rent paid by Ledoux?

The hon. the minister answered as follows:

1. Yes.

2. This concerns a detail of railway administration which is not of public interest.

Will the minister tell me why that question is not of public interest?

Topic:   CANADIAN NATIONAL RAILWAYS
Subtopic:   LEASE OP PROPERTY TO ALPHONSE I.EDOUX- ANSWER TO QUESTION ON MAY 4
Permalink

BANK ACT AMENDMENT

CONDITIONS GOVERNING TEN-YEAR EXTENSION OF BANK CHARTERS


The house resumed from Tuesday, May 2, consideration of the motion of Mr. Ilsley for the second1 reading of bill No. 91, respecting banks and banking.


NAT

Richard Burpee Hanson

National Government

Hon. R. B. HANSON (York-Sunbury):

Air. Speaker, aside from the budget the bill now under discussion is the most important nonwar measure to come before parliament at this session. In fact I would say that any bill relating to the decennial revision of the Bank Act is an important measure and therefore demands from the members of the house and from parliament the best consideration that we can give to it.

There has been banking legislation before parliament since the early days of confederation. The first general Bank Act after confederation was passed in 1871, and thereafter at regular intervals, not always adhered to rigidly, there has been a revision of the banking laws of this country. From the very earliest times, from 1871 down, very large powers have been granted to the chartered banks, and those powers were extended from time to time until, shall I say, the revision of 1923, when a change of policy took place. Because of a series of events more or less unrelated to present-day conditions, public opinion and the wisdom that comes from experience in operation then indicated that more limitations on the powers granted to the banks were necessary in the public interest, and that has been the trend of banking legislation from that time down. The most drastic of these limitations came in the revision of 1934. In that year the principle of a central bank and of central control of credit and currency was adopted by parliament. The revision and limitations then imposed were of a nature consequential upon and in a degree co-extensive with the establishment of the Bank of Canada.

Prior to the 1934 revision and the establishment of the Bank of Canada there had been set up in Canada a royal commission on the

banking situation in this country known as the Macmillan commission. Hon. gentlemen are familiar with the findings of that commission, which were referred to briefly by the minister in his statement the other day. I commend to any intelligent student of our banking system a reading of the report of the Macmillan commission. I do not propose to repeat any of its findings now. Suffice it to say that the commission found, and I agree, that assuming that we are to continue the established capitalist system of commercial banking in Canada under private ownership, our banking system had served the country reasonably well. I concur in the minister's observation that during the rapid development of Canada the system has served Canada reasonably well. I do not imply, nor I suppose does the minister, that it is by any means perfect; nothing is perfect in this world of ours. But the system amply demonstrated its strength and stability in the hectic days of 1933. There was no bank holiday in Canada then; and there were two reasons for that. The first was the strength of our financial institutions themselves, and the second was the fact that in that time of financial stress and strain this nation had great leadership, leadership of strength and courage, the kind of courage necessary to meet emergencies. As a result the people's savings were held secure, and I may say that the achievement was a matter of pride to the people of Canada. Contrast that with the situation which was exhibited in the United States, of the actual suffering which took place as a result of the closing of so many of the smaller financial institutions. The banks themselves, I think, gave a reasonable degree of leadership at that time.

What I have to say about this bill to-day will be, I hope, of a constructive character. Whatever criticism I make, both of the subject matter and of the minister himself, is not motivated, I assure the house, by malice. I desire to approach the whole position in as judicial a spirit as I can summon. That does not mean that I shall not have some political allusions to make in the course of my remarks. I hope to be forgiven if I do that. But speaking generally, I trust the debate will be conducted in a judicial spirit, to the end that, when the bill finally passes this house, there will emerge a measure calculated to give the people of Canada a law tending to create a high standard of living, to preserve freedom of enterprise, conserve the people's savings, and redounding to the lasting benefit of the public, and especially the commercial life of the nation.

2708 COMMONS

Bank Act-Mr. Hanson (York-Sunbury)

At the same time the banks, along with individual enterprise, supported by wise government policies and active assistance on the part of the government, must see to it that there shall be no return to the conditions which prevailed in 1933, so far as that is humanly possible. We all have responsibilities in that regard. I am satisfied that there is not an hon. member in this house, of any party, who seeks to shirk these responsibilities. The banks themselves have a large measure of responsibility in that regard, because they enjoy great advantages. The very statement of that fact brings with it the corollary of the proposition: because they enjoy great advantages there is upon them a large measure of responsibility for preventing depression in the future. The control of credit and currency is in the Bank of Canada, but the control of the practical application of credit itself is in the hands of the chartered banks, and it must be used wisely and in the national interest.

Having said that, may I now direct your attention to the bill itself and to the minister's statements. It is impossible, in the short space of time which I desire to take up this afternoon, to go into any degree of detail with respect to either. The bill is voluminous; I have not yet completed the first reading of it, and I doubt if many hon. members have. Before discussing it, however, I must say to the minister that his statement of Tuesday last was exactly what I feared it would be-not a factual, objective statement, but rather a passionate piece of propaganda calculated to stir up debate and invite reprisals. Then, there is the delay in introducing the measure. We are now on the eighth day of May, well into the fourth month of this session. This bill is of major importance, and I suggest to the minister, as I did the other day, that notwithstanding difficulties which of course I appreciate must have stood in the way, this bill should have been brought down long before. It ought to have been brought down, at latest, concurrently with the introduction of the bill to incorporate the industrial development bank.

May I now for a moment refer to the minister's statement of May 1 when he was moving for leave to introduce the bill. In that statement he indicated that the bill constitutes three important things: first, the basis of the decennial revision of the Bank Act; second, the extensions of the charters of the banks for another ten years or until July 1, 1954; third, generally speaking, it provides for such changes in the present act as the administration has decided are advisable, governing the operations of the banks, their powers, and the limitations

of the controls to which they are subject. The statement of the minister and a subsequent statement indicated that the changes are numerous. That is correct. But I do not think they are very important. In principle there is nothing revolutionary about them; they do not establish any principles which are not already embodied in the legislation now on the statute book. I suggest that this is a better description-that they are an extension of existing policies and principles.

First, there is the change in the right to issue notes on the part of the chartered banks. That is not a new principle; it is a principle which was established in the act of 1934 and was consonant with the establishment of the Bank of Canada and the rights given to that central institution. Of course it is important in a limited sense, because it takes away from the banks one important function and a very valuable franchise. I may say in passing that there are not many provisions in this bill which impair the powers of the banks. I believe that hon. members, particularly a few who sit on the right of you, Mr. Speaker, will be disappointed, upon an examination of this bill, in the character of the changes. However, that is merely an expression of my personal opinion, and I have no doubt that they will be vocal enough when the proper time arrives to express their own views in that regard. The banks have been left pretty well alone so far as shearing them of important powers is concerned. The function of the note issue was given to the commercial banks of Canada a long time ago. It served a useful purpose, and since it was not transferred to the state until 1934, it was an important function in the commercial and business operations of the country. Of course I agree, as we all do, that it was a profitable function to the banks, upon which the various governments from time to time in the past have imposed taxation and received for the public revenues a substantial increment.

I know of only one argument against completely taking away from the chartered banks the right of the issuing of notes, and it is this. Because the function has been profitable in the past, it has greatly assisted, in my view at all events, for what it is worth, the establishment of a chain of branch banks which covers the country from east to west; I doubt very much if many of the branches which were established in rural communities in days gone by, and which served the public, well or ill, according to one's opinion and experience, would ever have been established had it not been for the fact that the banks enjoyed this profitable franchise. Well, it has been taken away in large measure, and while

Bank Act-Mr. Hanson (York-Sunbury)

it is not the only cause for the closing of many small branch banks, I do suggest to the minister and the house that it has been a substantial contributing factor to the closing of branches.

My understanding of the position is that in order to make a branch bank pay it is necessary that it receive substantial deposits, and on those funds, employed in the branch or elsewhere as the case may be, mostly elsewhere I think, the banks, together with the franchise of note issue, have been able to maintain these branches. But since 1934 we have seen a change, which in part at least, I suggest, has been brought about by the restriction imposed upon the banks in connection with the note issue. Take my own community, for instance. In 1934 we had four branches, one for each of the big banks, in the city of Fredericton, and we had in the rural communities eight or ten, I think ten, branch banks in the two counties of York and Sunbury. To-day there are only six.

Topic:   BANK ACT AMENDMENT
Subtopic:   CONDITIONS GOVERNING TEN-YEAR EXTENSION OF BANK CHARTERS
Permalink
NAT

John Ritchie MacNicol

National Government

Mr. MacNICOL:

Altogether?

Topic:   BANK ACT AMENDMENT
Subtopic:   CONDITIONS GOVERNING TEN-YEAR EXTENSION OF BANK CHARTERS
Permalink
NAT

Richard Burpee Hanson

National Government

Mr. HANSON (York-Sunbury):

Six branch banks outside the city of Fredericton in the two counties, and it cannot be said that the people are overserviced with banking accommodation in that community. I do not say they are underserviced, but the closing of four, perhaps only two, in that period of time has not been of advantage at least to these particular communities, but rather the reverse. And so, with that principle, there comes some reaction. I think this position could be illustrated in almost every constituency in Canada from east to west. Right in the minister's own constituency there was closed not so long ago a branch bank in the little town of Middleton, which has had a bank for some considerable time.

So that these things happen, and although I am not dogmatic about the cause, it seems to me that the taking away of the right to issue notes has had a substantial effect upon the service to the community by the banks. That may not be correct, but that is my belief at all events.

The second important principle to which the minister alluded-I may not have them in their right order-is the provision of making the Bank of Canada the exclusive agency for the redemption of notes, both of defunct banks and, by 1950, of existing banks. I suggest that is not revolutionary by any means. It is merely a change' in existing machinery to perform a function that has been performed hitherto by provisions under the Bank Act. And I do not see-any harm in it. I think it is a useful provision for centralizing

in the Bank of Canada this function, which may or may not be important. But it is a natural evolution following the establishment of the Bank of Canada by a Conservative government in 1935, and, I suggest, one of that government's greatest accomplishments was the establishment of the Bank of Canada.

Then there is a third suggestion or provision which may stir up some controversy, and that is the transfer of unclaimed balances, and liability to pay them, to the Bank of Canada after ten years. This is not a new thought by any means. Those who were present at the bank revision of 1934 will recall that Mr. Irvine, then member for Westaskiwin, had a resolution before the banking and commerce committee-an amendment, I believe it was; I have not been able to look up the citation-calling upon the powers that be to declare that seventy-five per cent of these unclaimed balances should be transferred to the crown in the right of the dominion. The Minister of Finance of that day, Mr. Rhodes, rejected the suggestion. I have here a reference to it in the Canadian Bar Review, Volume 21, No. 7, page 546, of August and September, 1943. In an article entitled "Some Legal Problems on Banking," the author of which is Mr. Arthur W. Rogers,

K.C., who is to-day the secretary of the Canadian Bankers' Association, a man very well versed, I should judge, in banking problems and the legal problems of banking, he has the following to say in reference to that suggestion:

On the occasion of the last revision o.f the Bank Act one of the members of the banking and commerce committee suggested that provision should be made to vest these unclaimed balances in the crown in the right of the dominion. The Minister of Finance, however, stated that such a step would be unconstitutional on the ground that the provinces were entitled under section 109 of the British North America Act to such of these unclaimed balances as were really ownerless and therefore bona vacantia-

That is what is known in Quebec, I believe, as vacant property; is that right?

-coming within the meaning of the term "royalties" in the above section.

I looked up section 109 of the British North America Act and I really do not think it could be justified on that ground. But I suggest to the minister that it is a violation of provincial rights, that it is a violation of the British North America Act, section 92, which provides that property and civil rights function only within the jurisdiction of the provinces; and I suggest to the house and the country that the proposal savours of confiscation on the part of the crown in the -right of

2710 COMMONS

Bank Act-Mr. Hanson (York-Sunbury)

the dominion. I believe there is good authority for that suggestion. I hold the view that this provision is unconstitutional; the matter is at present the subject of litigation. The matter is sub judice.

I want to return to that aspect of the matter in a moment, but to me this looks like the legal violation of a contract on the part of this parliament; and just why the move is made is not quite clear to me. This is either in one jurisdiction or the other. I am informed that during recent years a suit was taken by the provincial authorities of Quebec against the Bank of Montreal, I believe as a test case; the Minister of Justice (Mr. St. Laurent) will know much more about this than I do. If I am correctly informed, and I must confess that I have not been able to get hold of the report of the court of appeal, the superior court declared that these unclaimed balances were vacant property within the meaning of the laws of that province, and the court of appeal sustained that decision, which in effect, I suggest, is an affirmation of provincial rights under the constitution, in relation to property and civil rights. I believe my hon. friend the Minister of Justice has intervened in that litigation, which is on its way to the privy council, where there will be a contest over the constitutional issue raised. The matter is sub judice, and I suggest that such legislation as this should not be introduced until the matter is finally decided by the highest judicial authority. Then I believe, though I have not been able to get the report, that in a recent case in Manitoba involving somewhat the same principle, or so I am informed, the provincial courts have upheld the right of the crown in the right of the province with respect to certain matters of property and civil rights-I am not sure just what the rights were, because I have not read the report-and that the decision was appealed to the Supreme Court of Canada, which reaffirmed it. A friend of mine communicated with the clerk of the Supreme Court of Canada, but I understand the report has not yet been printed, so that I do not speak dogmatically as to what that court actually found.

I ask the minister this question. On the basis of the theory or principle of "pith and substance"-which must have a familiar ring to some hon. members of this house who have read the privy council decisions on the litigation relating to the so-called new deal-this is not banking and commerce at all; it is property and civil rights and, as such, this is an attempt "on the part of the federal authority to change something which in my

CMr. R. B. HansQn.]

view, at all events, for whatever it may be worth, should be left as it is. Those of us who are lawyers know the law of the land in connection with what they term vacant property. I believe that is dealt with in the province of Quebec under a special act, and in the other provinces under the common law. When a man dies intestate, without issue, heirs at law or next of kin, the crown in the right of the province takes the property I remember in my very young days as counsel being startled when I heard of the case of a man in my own practice who was in that position. Unfortunately he did not make a will; he had no next of kin, and the crown walked in and took over several thousand dollars in bank deposits. That was the law of New Brunswick, as I believe it is in all the common law provinces. These unclaimed balances are vacant property. They are property; they are there by virtue of a contract between the bank and an individual or corporation, as the case may be. Under what principle should the federal authority step in and claim those unpaid balances?

Topic:   BANK ACT AMENDMENT
Subtopic:   CONDITIONS GOVERNING TEN-YEAR EXTENSION OF BANK CHARTERS
Permalink
LIB

Gerald Grattan McGeer

Liberal

Mr. McGEER:

Piracy.

Topic:   BANK ACT AMENDMENT
Subtopic:   CONDITIONS GOVERNING TEN-YEAR EXTENSION OF BANK CHARTERS
Permalink
NAT

Richard Burpee Hanson

National Government

Mr. HANSON (York-Sunbury):

Well, I

call it confiscation; that is not quite so strong a term. I suggest to the minister that this legislation is premature, at all events, until the decision of the privy council has been handed down. That will decide the issue, and his legislation may be good; but he would look pretty silly if the privy council should decide against him. I think he is taking a long chance. I know the minister has an inflexible mind; he always thinks he is right and that no one else is ever right.

Topic:   BANK ACT AMENDMENT
Subtopic:   CONDITIONS GOVERNING TEN-YEAR EXTENSION OF BANK CHARTERS
Permalink
LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

No, but I have a good

answer.

Topic:   BANK ACT AMENDMENT
Subtopic:   CONDITIONS GOVERNING TEN-YEAR EXTENSION OF BANK CHARTERS
Permalink

May 8, 1944