June 4, 1917 (12th Parliament, 7th Session)

CON

William Thomas White (Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir THOMAS WHITE:

I do not think it advisable that any legislation we pass here should be limited to any particular section of the Dominion. On the last revision of the Bank Act, and I think in some preceding revisions, this question has been raised on behalf of those engaged in the livestock industry. It has been pointed out, as the hon. member for Simcoe (Mr. Currie) has stated, the manufacturer, great or small, can go to a hank and by a simple form of hypothecation of his product, 'under section 88 of the present Bank Act, obtain advances. That hypothecation constitutes a secret lien. I have myself always been of the opinion that Parliament should hesitate, unless on public grounds of the greatest importance, to extend that principle of the secret lien. But, on the other hand, we must remember that the great industry of this country to-day is agriculture, that we are asking the farmers to increase their production, and that it is our bounden duty to make such laws as will promote such production, that is to say, provided that the public interest otherwise is not seriously affected or injured. Until

last year it was impossible for the farmer engaged in the raising of live stock to hypothecate or pledge his live stock to a bank and obtain advances on it. Last year, in response to most urgent solicitation on the part of the western live stock raisers, I introduced legislation under which the farmer can give a chattel mortgage or bill of sale upon his livestock. We desire to respect the laws of the provinces, because most of the provinces have desired that, in the ease of a lien being taken upon personal property, notice *should be given to the public through registration, and there is on the statute books of imost of the provinces provision for such registration. The difficulty, therefore, with which we were confronted last year was how to permit the farmer to hypothecate or pledge his livestock and give a security and at the same time afford notice to the public that the security had been given. We thought then that the way out of the difficulty was to enable the banks to loan upon chattel mortgage just the same as an individual can loan upon chattel mortgage, and that the chattel mortgage so taken should be registered in accordance with the provincial laws. It seemed to me last year that it was the only way in which the Dominion could meet the situation, because it was not within the power of the Dominion to compel provincial officers charged under the legislation of the several provinces with the duty of registering bills of sale and chattel mortgages, to register a simple form of assignment such as we now propose in accordance with the laws of the province. Therefore, we enacted, that the bank might take a chattel mortgage upon live stock, and that the chattel mortgage should be registered in accordance with the laws of the several provinces. That is where the matter rested. But it has been pointed out to me, not by the banks but by the livestock raisers, that the farmers do not like to give chattel mortgages-the very words " chattel mortgage " seem to cast some doubt upon their credit.

Topic:   QUESTIONS.
Subtopic:   BANK ACT AMENDMENT.
Full View