When the house rose, I was discussing a recommendation with respect to the prevention of stock watering. This is carried out in section 15 of the bill which contains a proposed amendment to the act by inserting a new section 96B. As I stated, section 96B in terms applies to private as well as public companies. When the bill comes before a committee of the whole house, I will suggest to the committee that this section might be amended by inserting the word "public" before company, 'because I do not conceive that the 'Commission intended that this should apply to small and insignificant private companies.
There is also in section 96B, subsection 4, a provision to carry out the recommendation of the commission that this section shall not apply to any .mining company. I thought it necessary however to attempt a definition of "mining company" in order that there might be no misapprehension as to the application and meaning of those words. Therefore in subsection 4 I have defined "mining company" .as:
Any company whose principal objects are the exploration, development or operation of mining properties and' which, if it has commenced actual operations, is carrying out such objects as its principal business.
I have defined " mining properties " as follows:
"Mining properties" includes mines, minin" deposits, mining rights, metalliferous lands, mining claims or any interest therein including any option or licence in connection therewith.
I have attempted to give as precise a definition of "mining companies" and "mining properties" as I could under the circumstances, and I think the definition is quite clear. Personally I have sometimes found it difficult to understand the qualification in the report which states that mining companies are
Companies Act-Mr. Cahan
highly speculative. My experience is that most commercial and industrial companies are equally as speculative as are mining companies. If one could at the outset foresee the success of one of those other companies, it would be quite possible to accumulate a fortune in a short time. My own ventures have not been so successful, and I have often found that those companies, which I have regarded as most reliable and as having sure prospects of success, have been those which under adverse circumstances such as have existed during the past four or five years, have proved in fact highly speculative. There is no sure venture in either finance, industry, commerce or trade.
The final recommendation is this, that the whole trend of law should be toward putting the managers and directors in a trustee capacity with respect to all of the security holders. I think the English law which prevails in this country places the directors in the position of trustees, and I have not sought to give in this bill expression to that recommendation.
Certain suggestions have come to me since this bill was published. A number of the larger companies have already arranged to hold their annual meetings and have prepared at great expense, on the basis of the accounting provisions of the existing act, their accounts for the present year, ending many of them on July 1. Therefore they feel somewhat apprehensive that this bill may be brought into force immediately they think there should be a lapse of time of thirty days; indeed some of them would like a lapse of sixty days after the bill is enacted before it comes into force, and I shall ask the house in committee to consider whether such a section should not be added bringing the whole or parts of this bill into effect by proclamation.
All I can add is that we have endeavoured as best we can to bring before the house the recommendations of this commission in such form as may be easily understandable, with such correct definitions as we were able to devise. Therefore we leave it entirely to the judgment of the house on second reading and in committee, when the several sections of the bill may be more carefully considered.