Mr. ROCHE (Halifax).
Mr. Speaker, I have formed an opinion of this Bill, and before voting upon it, I think I have a right to demand the fullest information which can be given in regard to a measure of this character. It is very evident that the circumstances which have occasioned it, and the scope and application of the Bill, are largely confined to one province, and are not applicable to the other provinces of the Dominion. Therefore, I, an inhabitant of another portion of the country than that which is the subject of this Bill, ask for some better reasons than those which have been given by the hon. gentleman (Mr. Madore), who has brought this Bill forward and who is appealing to the judgment of those from other provinces in order to influence their opinions, and to induce them to give their sanction to a Bill of a very severe character. If I read correctly this Bill, and I do not profess to be a lawyer, the court has to come in and nullify, if necessary, an agreement entered upon in good faith. Further on in this Bill, if I understand it, there is a very severe penalty imposed upon any one who violates its provisions, and who, by one inducement or another, is prevailed upon to lend money at a rate of interest in excess of that stipulated in the Bill. I consider, although the object of the Bill may be a good one, although the hon. gentleman may aim, in the principle of his Bill, at putting down an improper practice which may prevail in his portion of the country, especially where this Bill will have application to one of th& provinces in the country, and where the conditions complained of do not exist, that the measure is one of a very harmful character. I see in the 9th clause that every money-lender who lends money at a rate in excess of the rate set down in the Bill, is guilty of an indictable offence, and is liable to imprisonment for a term not exceeding one year, or to a penalty not exceeding $1,000. I consider that provision one which should demand the fullest attention of hon. gentlemen in this House, and also that hon. gentlemen from other provinces in the Dominion should consider whether the situation of the country demands the passage of such a severe measure as this, imposing such restrictions and penalties. I know, Sir, that a money-lender is a very odious object in this country, I know that a man who has money is sometimes an object of opprobium, and I know a great many people are willing to inveigh against people who have money, to declare that they are an injury to the community, and that as speedily as possible, either by Act of parliament, or by act of the persons themselves, this money shall be got away from-
those who have it and distributed amongst those who have none. 1 know that to stand up and defend money-lenders, or bankers, or any of that objectionable class, is sometimes a work of supererogation, and that the person who does so renders himself an object of suspicion to all sorts of people. Now, Sir, it may be that the person who lends money, under precisely the circumstances set out in this Bill, may do the individual who has accepted the loan a life-long benefit. I know that young men who, under certain distressing circumstances, would have given 100 per cent, afterwards to be paid, if they could have got a loan which would have saved them from disgrace and utter ruin when their prospects were such that a kindly loan of a little money would have relieved them perhaps from the severe strain through which they had to pass. If a person would come forward and make a loan under those circumstances, a borrower would look upon him as a life-long benefactor. There are other situations like that which I have disclosed, but there are also circumstances in which a man might become involved commercially. A man also may have a speculation in hand which may return him a large amount of profit, but, he is unable to embark upon it, simply from the fact that he has not the fulcrum upon which to place the lever. In my experience I have often helped people with small loans of money, and I will give a little suggestion to some hon. gentlemen on the other side of the House, who, on some occasions, may be disposed to be benevolent. I find that in some cases it was not safe to charge any rate of interest at all, but to place the thing simply upon the honour of the individual, because, if you charged 10 per cent, or 25 per cent, or 50 per cent, the borrower would say : That man paid himself out of the money he extorted from me out of my necessities, and I will not pay him back again. If you stand upon a man's honour and give him a timely loan, he is very far down in the scale of manhood, if he has the money, if he does not come forward and pay you for the loan. There is another case ; there are a great many gentlemen who come to you for a small loan for a very short time, and it is always safe to lend such a one a small amount, because in a great many cases he will never come back to see you, and if he does come back, perhaps he will pay that loan and want to borrow more from you. Now, this Bill is to a great extent founded in reprobation of the practices of the Jews. We know the history of the Jews. Some hon. gentlemen opposite know the history of the Jews. Some do not.
I am not going to refer to the history of Jews as set down in the sacred books, because T know every gentleman opposite is familiar with that ; but, I am going to 01
refer briefly to the history of the Jews in the Dark Ages. You will remember that from A.D. 600 to the time of the Reformation, the Jews were very prevalent in Spain and Portugal and Germany. They did not deal in real estate nor in tangible securities ; they usually looked to the good faith of the individual, and they were keen judges of character, but they had a uniform rate of 5 per cent per month interest. The interest for two years ate up the principal, and if there were any mortgage attached to the loan, the Jew got the property. That condition continued until the Jews had secured a very large portion of the real estate in those countries. It, therefore, became an object for all those who were debtors of the Jews, or those who hated the Jews, to unite in those frightful persecutions which took place in the Dark Ages so called. Now, Sir, I think there is something of the spirit of that persecution in this Bill. Perhaps the hon. gentleman himself or some of his friends have suffered from the exactions of the Jews in the province of Quebec. In that happy portion of the Dominion whence I come, and from which the hon. leader of the opposition comes, the great difficulty there is to obtain a reliable person to whom to lend any money. In fact, if one bank obtains a good loan all the directors and the manager and the clerks of the rival banks set out to say to the borrower : Oh, the bank over there has charged you 54 per cent, and we have lots of money that we lend out to railway corporations-sometimes on pretty good security and sometimes on pretty bad security-come over to our bank and we will treat you well. And if the borrower has good responsibles and security, and if it be an undertaking which, in addition to its own inherent merit, has something of popular favour to commend it, why, all the directors of that bank unite to use their personal influence, and sometimes their political influence, to induce the corporation or individual to take the loan from them, which starts the undertaking on its way and which undertaking may ultimately prove a benefit to the individual as well as to the people of the country. In my portion of the country, not only were the banks content to lend to all customers who could bring forward good security, but they came up to the city of Montreal, this pest district that has been referred to. They entered into rivalry with the Bank of Montreal and the Bank of Toronto and the bank of everywhere else, and they loaned money to all good customers who had proper securities at lower rates than the Bank of Montreal or the Bank of Toronto, or any of those protected institutions could afford to. Why, these banks were driven to the state of New York to lend their money, and the Bank of Nova Scotia, and the other banks in my province have come up to Canada to stay. They have opened up there benevolent institutions in other provinces ; they have
gone to tlie extreme verge of civilization on the Pacific coast to open branches ; they have gone to the West Indies ; they have gone to Trinidad, and they have gone to all parts of the earth from that little city of Halifax to lend money to every one who needed it, and who could bring forward good security. The good security is the thing, gentlemen. These banking institutions from Nova Scotia have gone to other nationalities ; they have gone to Brazil, and they have loaned money there to build railways, and they have loaned money to build railways in Jamaica, and if any person came forward with a good and matured scheme for completing the Panama canal or building the Nicaragua canal, there is plenty of capital in this country which enterprising men would lend to construct these great public works which carry on the commerce of the world. That brings me home to the subject of this Bill, and I say that the Bill has running through it the negative to the main essential of every Bill of a sumptuary character, which is, that the loaning of money is dependent upon good security, and that the money will follow the good security. Without asking for proof or* without any general corroboration of the statements made by hon. gentlemen, I will assume it to be a fact that there is usury in the city of Montreal. Those money-lenders always scrutinize carefully the quality of the security, and it is because there is a risk in the security, and the man is afraid that he will neither get his principal or his interest, that he charges a high rate. The moneylender ought to be paid for that .risk, and he also ought to be pai d for the opprobrium 'that a man in his business experiences. The fact that he first of all possesses the money, and secondly, that he has not yielded to the solicitation of the borrower sooner but has put him off from day to day, is also to be considered. Now, what remedy is [DOT]suggested ? The hon. gentleman (Mr. Madore) has told us that his province is suffering under the exactions of these moneylenders, and he has disclosed a situation which is alarming. But I would like to know what would be the situation if the money-lenders were not there ? Has the hon. gentleman ever contemplated the condition of people in desperate circumstances where there is no money-lender to relieve them at 10 per cent or 20 per cent or 50 per cent ? Does he not know that there are extreme cases of poverty and want occurring from day to day where a man wishes only to obtain a temporary loan, where a little ready money would be a great relief to families, and when those men who have money to lend are hailed as benefactors ?
. Now, Sir, I set out with these two essen-' tials: the security, and the money that is to be loaned upon the security. But, I would say this, that if this money-lending is so profitable in that portion of the country, under the ordinary law of supply and de-Mr. ROCHE (Halifax).
maud would not capital flow in ? Should not there be many money-lenders ? Would they not preponderate in the community until they -would outnumber the borrowers? Would not those men who are ready to embark in precarious enterprises, who are willing to risk a good deal with the object of making a good deal, go and open in Montreal their pawnbroking shops, and their money-lending shops, in order to lend money to needy people ? And would not they, among them, reduce the rate of interest to ordinary commercial limits ?
I have not at all referred to those risks which are specially precarious-those which are speculative, like the stock exchange, like lotteries, like other operations which may be termed gambling. I have not gone into anything of that kind-into cases where perhaps a young gentleman has contracted a debt of honour, or those cases where a person has assumed a personal obligation, under circumstances which demand of him the discharge of his obligation. But, I have used ordinary commercial transactions, and 1 have hinted at remedies which can be brought forward in the ordinary commercial way.
Now, if the hon. gentleman would be content to take one provision of his Bill, and make the forfeiture of the loan the penalty for charging an excessive rate of interest, perhaps there would be many in this House who would be disposed to give their support to his measure. His intentions are benevolent and right. I have no doubt he has been shocked to see how many persons in the community have perhaps been beggared, or deprived to a large extent of their means, by the excessive rates charged by these money-lenders. To me, the tiling was quite a novelty. I did not know that it existed in the community. My poor wits have been exercised for a long time in money institutions in endeavouring to find profitable modes of investment for money- to procure good customers who would take loans, and who, the security being good, would be able to pay a fair rate of interest. In other provinces of the Dominion the rate of interest is speedily diminishing, and people who have capital to embark, and who obtain their livelihood from the interest derivable from their capital, are seeking for places of investment. I think the remedy for the evil aimed at by this Bill would be to strike out the clause which calls for fine and imprisonment, and make the loan unlawful when an excessive rate of interest is charged.