REPORTS AND PAPERS

[Stage Direction]
Correspondence between the Department of Railways and Messrs. G. J. Davie and Sons in connection with the Intercolonial Railway.-Hon. Mr. Reid.
Order in Council relating to the retirement of James W. Watson from the Naval Service.-Hon. Mr. Ballantyne.
Correspondence in regard to the vacancy in the District Court judgeship, Alberta, occasioned by the transfer of Judge McNeil to the Judicial District of Calgary.-Hon. Mr. Doherty.
Return showing total number of enlistments in the Canadian Expeditionary Force. -Hon. Mr. Guthrie.

[Stage Direction]
On the motion of Mr. J. A. Currie (North Simcoe) the first report of the Joint Committee of both Houses on the Printing of Parliament was adopted.

[Stage Direction]
On the Orders of the Day:
Hon. H. S. BELAND (Beauce) :: Before the Orders of the Day are proceeded with, which means the taking up of Government Orders, I would ask the unanimous consent of the House to pass to Public Bills and Orders for the purpose of securing the second reading of a Bill founded upon a resolution passed by the House some days ago. The Bill in question is Bill No. 117, to amend the Maple Products Act, and in connection therewith I would quote the observations I made on April 25 last to the following effect:

May X suggest that the resolution be reported, and that after the Bill has received Its first and second readings, It toe referred to the Committee on Agriculture, who may call whatever experts they desire. I will be quite willing to abide by the decision of that committee.
If the House is agreeable we could pass to Public Bills and Orders, read this Bill a second time without discussion, and then refer it to the Committee on Agriculture and Colonization.


Right Hon. ARTHUR MEIGHEN (Prime Minister) :: With regard to this proposal, the only question in my mind is on the point of treating all Bills and Orders alike. I do not think we would be justified in selecting one Bill in particular and putting it in a favoured position. I would he agreeable to the motion on this understanding: the second reading of the hon. gentleman's (Mr. Beland's) Bill to be immediately moved and the decision of the House taken upon that motion, and if it carries the Bill go to the Agricultural Committee. I would suggest also that other Bills appearing under Public Bills and Orders be called and dealt with in the very same way. That is, if the hon. member whose name appears as sponsor for any of these Bills is ready, his Bill may he read a second time and referred to committee. That may be done either to-day or on another day.


Henri Sévérin Béland: That is perfectly agreeable to me.


[Stage Direction]
Motion agreed to.

[Stage Direction]
Mr. BELAND moved that Bill No. 117, to amend the Maplei Products Act), be read a second time.
Mr. CURRIE:: I do not think it worth while to waste the time of the Agricultural Committee on this Bill. This is a measure to enable somebody to adulterate maple sugar, and the whole tendency of legislation in this House for years past has been to stop that.


Mr. SPEAKER:: I must submit to the hon. gentleman that, in view of the statement of the Prime Minister, the understanding was that these Orders would be called and passed, or not passed, as the case may be, without discussion.


John Allister Currie: I understand that before the Bill went to the committee there should be a division of the House on it.


Edgar Nelson Rhodes: The understanding was that these Bills were to he taken up only on condition that they be dealt with without discussion.
	*


Arthur Meighen: To be decided without discussion.


Edgar Nelson Rhodes: Yes.
Motion agreed to and Bill read the second time.
On motion of Right Hon. Mr. Meighen the House returned to Orders of the Day.



THE BUDGET

[Stage Direction]
On the Orders of the Day:
Hon. W. S. FIELDING (Shelburne and Queen's) :: Mr. Speaker, the right hon.
Prime Minister intimated yesterday that the Budget would be brought down the end of this week or early next week. That intimation of course was helpful, but although the Minister of Finance (Sir Henry ,Drayton) is not in his place, I would suggest to the right hon. gentleman (Mr. Meighen) that as early as possible a definite date be fixed and timely notice given to the House.


Arthur Meighen: I think probably a
definite day can be fixed to-morrow.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the Orders of the Day:
Hon. CHARLES MURPHY (Russell):: Mr. Speaker, may I ask the right hon. Prime Minister if any communication has been sent by him, or by the Government, in reply to the memorandum submitted by Lord Shaughnessy with reference to the railway situation; and, if so, whether the papers will be referred to the special committee now dealing with Government railways and shipping?


Arthur Meighen: There was a reply by me to the letter from Lord Shaughnessy embodying the memorandum, which reply was little more than an acknowledgement, -I think it contained an offer to discuss the memorandum with him. If the special committee dealing with Canadian National Railways and Shipping desires to have the memorandum, I shall be only too willing to have it submitted.



PATENTS OF INVENTION

[Stage Direction]
On the Order: Second reading of Bill No. 11 to amend and consolidate the Acts relating to Patents of Invention:
Right Hon.   S@: Mr. Speaker, I beg to move, that the Order be discharged, for this reason. As introduced the Bill is a consolidation as well as an amendment, and brings up the whole mat-

ter of the Patents Act. But certain bodies and individuals have asked that unless absolutely necessary the Bill shall not be gone on with this year as they wish to have more time for consideration and discussion of some points in the Act. After this Order is discharged I purpose to introduce a short Bill amending, but not consolidating, the Patents Act. It will contain, I think, about four amendments which seem to be necessary under certain circumstances, and which will be explained to the House when the Bill is introduced.
Motion agreed to and Order discharged.



TRADE MARKS AND DESIGNS

[Stage Direction]
On the Order: Second reading of Bill No. 9, to amend the Trade Mark and Design Act:
Sir GEORGE FOSTER:: Mr. Speaker, I move that this Order be discharged. This Bill would have been gone on with if the consolidation of the Patents Act had taken place, but it is only subsidiary to that.
Motion agreed to and Order discharged.



THE MIGRATORY BIRDS CONVENTION ACT AMENDMENT

[Stage Direction]
Hon. S. F. TOLMIE (Minister of Agriculture) moved the second reading of Bill No. 84 (from the Senate) to amend the Migratory Birds Convention Act.
Mr. CRERAR:: What is the purpose of this Bill, Mr. Speaker?


Mr. TOLMIE:: This amendment is for the purpose of increasing the maximum fine from $100 to $300.


Thomas Alexander Crerar: Why?


Simon Fraser Tolmie: At the request of the
province of British Columbia, where the maximum fine is $300.


Thomas Alexander Crerar: Fine for what?


Simon Fraser Tolmie: For destroying migi'atory birds out of season. Single specimens of some of these birds, such as the trumpeter swan, are worth more than $100, and the idea of increasing the maximum fine to $300 is to strengthen the deterrent effect of this legislation and so prevent the killing of these migratory birds out of season. That is the only change in the Act.


William Stevens Fielding: I have no doubt the object is commendable, but, I think, Mr. Speaker, a good deal of discontent will be found in certain portions of the Dominion, particularly on the sea coast, regarding the seasons fixed for prohibiting the shooting of birds. Along the coast our seamen find the privilege of shooting birds is of some value to them, and I am aware of very considerable complaint that the close seasons chosen by the Government in making their regulations have not been wisely chosen. I think that may be dealt with by regulation and does not require any change in the Act, but I bring the matter to the notice of the minister so that if he finds the close seasons have not been well chosen he will have the necessary amendment made.


Simon Fraser Tolmie: I understand the season is governed by regulation, but I will be very glad to look into the matter.
Motion agreed to and Bill read the second time and the House went into committee thereon, Mr. Boivin in the Chair.
On section 1

penalty for violation of Act increased from $100 to $300:


Mr. GRIESBACH:: Is this legislation reciprocal, or are we protecting these migratory birds in order that people in some other country may kill them?


Simon Fraser Tolmie: I understand that they
are protected under the Migratory Birds Convention Act passed in connection with the treaty between the United States and this country, and that the legislation is reciprocal.


Mr. McKENZIE:: At the time this Migratory Birds Act was passed there was a great deal of trouble about the provincial and the Dominion jurisdiction over birds, and I have never been able to find out exactly how the question was settled. Can the minister inform us if we now have jurisdiction to deal with migratory birds?


Simon Fraser Tolmie: I understand that this
is the treaty between Canada and the United States dealing with this matter:
The ratifications shall he exchanged at Washington as soon as possible, and the convention shall take effect on the date of the exchange of the ratifications. It shall remain in force for fifteen years, and in the event of neither of the high contracting powers having given notification, twelve months before the expiration of said period of fifteen years, of its intention of terminating its operation, the convention shall continue to remain in force for one year and so on from year to year.
In faith whereof, the respective plenipotentiaries have signed the present convention in duplicate and have hereunto affixed their seals.


Daniel Duncan McKenzie: That is not my difficulty at all. The shooting of wild geese in my province, for instance-would that be



REVISED EDITION. COMMONS

[Stage Direction]
a matter to be dealt with by provincial law?
Mr. DOHERTY:: This legislation is
necessary to implement the Migratory Birds Treaty. There is a special provision in the British North America Act conferring upon Parliament a legislative jurisdiction for the purposes of any law enacted for the purpose of implimenting treaty obligations, whatever may be the subject matter. I think there can be no serious question about the jurisdiction of this Parliament in the matter.


Daniel Duncan McKenzie: I simply wanted to
have my mind settled on the point.


Thomas Alexander Crerar: I rise for two purposes: first, to express a protest against the low tone of voice in which the conversation relating to this Bill is carried on at the far end of the Chamber-in that respect my hon. friend the Minister of Justice, (Mr. Doherty) I must say, is an inveterate sinner

and second, to ask the minister in charge of this Bill if fines are being imposed in the United States similar to those imposed by this Bill?


Simon Fraser Tolmie: I understand they are,
Mr. Chairman.


Daniel Duncan McKenzie: That would seem to
be "sound" law.


Thomas Alexander Crerar: I am delighted to hear
it. I do wish that some of my other friends on the ministerial benches had the lung power that the Minister if Agriculture has.


[Stage Direction]
Section agreed to.
Bill reported, read the third time and passed.

[Stage Direction]
The House again in committee on Bill No. 116, to amend the Research Council Act and to establish a National Research Institute-Sir George Foster. Mr. Boivin in the Chair.
The CHAIRMAN:: When this Bill was
last before the committee clause 1 had been adopted with amendments and now appears in the reprinted copy of the Bill. Clause 2 becomes clause 13 of the new Bill.
On section 13-Institute created:
Sir GEORGE FOSTER. I would like to move that section 13, subsection 1, be amended, by inserting after the word "Minister" in the seventh line thereof the words "Governor in Council," and by add-

ing after the word "which" in line 16 the words "subject to the same approval."


[Stage Direction]
Amendment agreed to, and section as amended agreed to.
On section 14-duties of Institute:
George Green Foster: I move that the following be added as a new section to follow section 14; its number will be 15:
When for the sake of efficiency or economy, or for the purpose of preventing duplication of effort jn the scientific work of the various departments of the Government, or in the scientific work of the various commissions and hoards constituted by the Government, it may be found desirable that such scientific work shall be, either co-ordinated and supervised by, or shall be carried on in whole or in part in the institute under conditions to be approved by the Research Council, appropriate action thereto in each case may be taken by the Research Council when and as directed and empowered by the Governor in Council.
That is to make provision for the purpose, in the first place, of rendering it impossible to have duplication as regards the work of the institute and as regards the work of laboratories which may have been established, and in operation in any of the departments, chiefly with regard to their administrative work; in the second place, of co-ordinating and supervising those existing laboratories and research agencies, so that we may avoid, first, duplication as between themselves and, second, duplication by way of extension of work, heretofore mainly confined to a department, into fields which would take it beyond that administrative work and so encroach upon the work of the institute proper. To summarize: what it aims to do is to prevent the expenditure of money in the duplication of effort, and, in the second place to co-ordinate and supervise all of those agencies so as to bring them into a connected whole. I think it is perfectly fair to do that, because those departments have laboratories more or less extensive, more or less elaborately fitted up, which were designed as subsidiaries and necessary agencies in carrying out their departmental work. For instance, the Health Department has a laboratory system; it makes its own analyses, and ascertains facts and principles, the knowledge of which is needed in the administration of the department itself. But it is quite possible that this might be pushed further than is necessary for that purpose, and it is to bring the supervision of council, the Government itself, into play, so that there shall be co-ordination of effort, not duplication which is costly and uneconomical.


William Stevens Fielding: Might I ask the right hon. gentleman to give attention to subclause (f), which reads:
The investigation ana standardization at the request of any of the industries of Canada of the materials which are or may be used in, or of the products of, the industries making such a request.
I am not quite clear as to the purpose and effect of that. Will my right hon. friend give the committee some information as to what will be done under that subclause?


George Green Foster: That means
that the Research Institute itself may undertake the investigation and the standardization of materials which go into the processes of the industry, and it may equally investigate and standardize the products of that industry. All that work is done in the interest of economy in the productive process. I do not know whether my hon. friend gets the idea imperfectly, as I have expressed it, hut this is a very important part of the work that is carried on at this institute. Take, for instance, the Mellon Institute in Philadelphia. That institute devotes a very large proportion of attention to this work of investigation and standardization with a vew to economy in production. The United States Laboratory of Standardization and Research, established a little out from the city of Washington, carries on that same form of effort. The same thing is done in researches which have been set on foot in the Old Country.


William Stevens Fielding: I am quite sure that the object of the clause and of the Bill generally is an excellent one, and I am not approaching it in any critical spirit. What is the meaning of the word "industry"? Does it mean any particular man doing business? Is he the "industry"? Or has there to be a combination of people in an industry?


George Green Foster: This means all the industries of the country, for instance the textile industry or the pulpwood industry.


William Stevens Fielding: A textile industry may engage, perhaps, fifty people. Does the expression used in the Bill mean an indi-. vidual? Or does it mean a combination of individuals in one industry?


George Green Foster: My hon. friend will see, in a subsequent clause, a reference to trade guilds for research. I think my hon. friend was here the other day
183J
when I read a list of some twenty-four or twenty-six of these trade guilds, which had been formed in Great Britain and which were working in connection with and aided by the British Government in carrying on its central research branch. The same effort will be made here, and I have no doubt that the same method will be followed. For instance, the different lines of industry will be encouraged to form themselves into guilds or associations, such as the textile industry, the leather industry, the boot and shoe industry. Some of them now have associations or guilds with regular membership. The guild itself, or any member through the guild may make application for research work or investigation along any of the lines undertaken by the Research Institute. But that is not meant to shut off any industry which is established and which does not belong to a guild. It will yet have an opportunity of asking for that service from the council, that is the Research Institute; but it will be for the Research Institute, the council, to decide whether it can take up all of those or which of them it should take up-undoubtedly a great many requests will be preferred and it will be impossible to take them all, so that there must be some line of choice as to which would be worth while.


William Stevens Fielding: Where there are
guilds, or associations, as suggested by the right hon. gentleman, I can quite understand that the clause might be intelligible. He states that if there is an individual or a firm not in a guild or association, this service would still be open to him or it.


George Green Foster: Yes.


William Stevens Fielding: I hope so. What is the meaning and effect of "standardization" in this clause? If a particular individual or firm-we will not take the case of a guild-desires to have standardization, and the Research Council is willing to carry it out, what is the effect of that standardization ?


George Green Foster: We have now, and have had for two years, an association of engineers who have given their services toward this end, and who are engaged in what they call standardizing the materials and products. What this means, so far as I understand it, is this, that, in reference to materials used in manufactures and the products of manu-

faeturing processes, you may have a hundred different patterns or of different qualities of materials. It may be that a proper process of standardization will eliminate a large number of these and will indicate the kind of material that is best adapted for use in the processes, and may also standardize the patterns and arrange them so as to avoid unnecessary multiplicity of products. The public is just as well served, and the costs of manufactures reduced, because there are fewer patterns and less diffuse material to be used. That committee has been at work for three years. It has no compulsory powers. In the case of any given industry, it makes its investigation, and confers with those in the industry. Already its work has resulted in the adoption by these industries of standard forms. That is a layman's explanation of the matter. I must confess that the subject is a little abstruse for a layman.


William Stevens Fielding: We can all understand that standardization, generally speaking, helps in economy, and where all the parties concerned agree on standardization, it is all plain sailing. I suppose this standardization has regard to quality and ingredients as well as to patterns? Let me give an illustration. A manufacturer of cement desires to standardize cement, and submits a formula which is acceptable to the engineers and to the Research Council. It may be very desirable that that should be adopted generally. But other manufacturers of cement may have a different view. What I want to find out is whether this standardization will have any legal effect; will it prevent somebody else from adopting a different method? Has a manufacturer the right to disagree with the council?


George Green Foster: The standardization has no compulsory effect. It is there as a sample of what may be worked up to, or what may be worked with, and they adopt it by agreement.


William Stevens Fielding: When it suits them.


George Green Foster: We have at the present time in the Public Works Department a small laboratory which standardizes cement. They have so standardized it now that men who are contracting with that department for construction work must use that standardized cement.


Mr. JACOBS:: Was that cement used in the formation of the Union Government?


George Green Foster: No, we had a still better cement than that. Competent engineers had previously wrought it out and it has worked splendidly.


Mr. RINFRET:: I do not wish to oppose this clause, or the Bill, but only to ask the minister a question. I quite understand that the Government wishes to centralize its activities in the scientific domain through an institute of this sort. At present, I understand, individual scientists in the different provinces are able to obtain grants to follow certain lines of research work. Am I right in supposing that they will be deprived of any such help from the Government after this institute is formed? I suppose the minister is ready to give the committee his verbal assurance that when the personnel of this institute is appointed, due recognition will be given to scientists in all lines and from all provinces?


George Green Foster: I think my hon. friend is under a misapprehension. We are not giving any donations in any way, shape or form, to the different provinces for research work.


Louis Édouard Fernand Rinfret: I mean to individuals.


George Green Foster: No. I will explain. The Advisory Council so far has not had any laboratory: it has had no research equipment of its own. But there is a system of bursaries and studentships and fellowships up to a certain amount. If in the course of his university work a young man has shown an aptitude for a certain line of research work, the Advisory Council, after looking into the matter, may recommend that he be granted a studentship while he is at the university, or a fellowship after he has graduated, to enable him to carry on his particular line of research. That system will not be interfered with in any way.


Mr. MACKENZIE KING:: Are there any trade guilds for research in any of the industries in Canada at the present time?


George Green Foster: They will form as soon as the Research Council is ready for its work.


William Lyon Mackenzie King: They are not existing as yet?


George Green Foster: They do not call themselves guilds so far as I know, but all the large industries have their own associations; for instance, the Textile Association, the Boot and Shoe Trade As-

sociation. "Guild " is only another name for association.


[Stage Direction]
Section agreed to.
On section 15 (inserted as amendment).
Mr. McGIBBON (Muskoka) :: The Government is going to be the arbiter, I understand, between the Research Council and the scientific men at present in the service of the Government. Does that mean that the Government will decide as to which scientific men are best qualified to do the work?


George Green Foster: In the end it has to come down to a judgment by the Government in all these specific cases. That is true as to the membership of the council itself. By this legislation we are saying that the council -shall consist of so many members, but it must be determined by the Government itself who shall be the members. The Government must take the best means at its disposal to make sure that these fifteen men shall be the very best fifteen men that we can get for the purposes of this Research Council, and that they shall at the same time represent the fundamental interests involved in the work of the Research Institute. There is no other way by which you can get a deciding body. In this case the deciding body is the Government, and the Government must exercise it's best judgment, after such advice as it can get, as to the composition of the council. With reference to the co-ordination of the work of the different laboratories at present in operation, these are all now under the guidance and direction of the Government. There is the minister of the department; he has a staff, and the work comes for ultimate decision to the Government itself. The Government works in that way through its minister. There are three or four departments at least which now have these laboratories, and the Government as a whole, including the ministers of the departments in which the laboratories are situated, must confer as to how they shall carry on, what shall be the supervision, and must take care that there shall be no duplication.


Peter McGibbon: I think
this is a serious mistake. Every organization must have some head, and I certainly do not think that a layman is capable of directing scientific research. I do not believe that the Government should step in and say what researches are to be carried on, and by whom. It seems to me that the final authority in this respect should be
the Research Council. Of course, the selection of the council is quite another thing, and the Government, having got information as regards the qualifications and achievements of certain men, can decide on the personnel. But when it comes to a question of directing a scientific institute, the final authority should not rest with laymen.


George Green Foster: The hon. member is quite wrong in assuming that this is going to be done. First we shall have to have the council, and, after that, directors and a staff will be appointed. The Government will not decide, without the advice and recommendation of the council, after a proper investigation, who shall be the directors or who shall carry on different kinds of research. The Government is quite sensible, in the first place, of the importance of having a proper council, but there will be questions arising in which it must assume its responsibility. The Government supplies the money through the regular channels and must therefore have a deciding voice 'in the end. It could not allow the council to say, "We will spend half a million dollars this year on this, that or the other." As we give the money, we must have a voice in its disposition ; but the Government will take scientific advice on scientific matters.


Peter McGibbon: Suppose a conflict
should arise between, say, the Mines Department, and the Research Council, in regard to some scientific research which they both desired to conduct. Who will decide which is to be the final authority?


George Green Foster: The Governor in Council; there is no other authority in Canada to decide that.


Mr. PARENT:: If a discovery is made by one of the members of the board, how will his personal rights be affected?


George Green Foster: We are coming to that later on.


[Stage Direction]
Section agreed to.
On section 15 (new section 16)-Discoveries and inventions, control of.
George Green Foster: I move that
the section be amended by substituting, for the word "Minister" in lines 28 and 29, the words "Governor in Council."


[Stage Direction]
Amendment agreed to.
George Green Foster: I move to
further amend the section by adding, after

the word "bonuses" in line 33, the words "or royalties."


William Stevens Fielding: Where will you get
the money from?


George Green Foster: A section that has already been passed constitutes the council a body corporate to receive bequests and donations. This section is subsidiary to that in one respect, and provides a sort of incentive to keep the researchers loyal and attached to the institute, by giving them an interest in any new 4 p.m. process or invention which in the course of their researches, they may discover, either as the final conclusion of a line of inquiry or as incidental to the research. The invention itself becomes the property of the institute, and in proportion to its value, it will be called for and used by industries outside. The industries will then arrange with the institute just the same as they now arrange wiilth any inventor, and upon certain conditions the invention will be made available to those who may wish to use it, on payment of a royalty. To make it worth while for an investigator, who is a paid member of the staff, to follow out to a successful conclusion every lead he hits upon, and to give him in part the benefit of such discovery, the institute will provide a reward in the shape of a royalty on any invention which is made. This it is supposed, will have two good results: there may accrue to the institute itself very considerable sums of money, and there will be collected and kept together a family of researchers in the institute whose interest will be linked with that institute. In this way there will be a better staff and less chance of change.


Mr. MACLEAN (Halifax):: In other
words, the discoveries will yield sufficient revenues to pay the bonuses; the institute will be ,self-sustaining?


George Green Foster: Yes. The
bonuses or royalties can be piatid only out of the fund which is created in the way I have stated.


William Stevens Fielding: That is no doubt the
intention, but it might be helpful to suggest in the Bill that the council may pay these bonuses "out of the funds" referred to, or words to that effect. However, if the hon. gentleman thinks it is not necessary, I shall not press the point.


Alexander Kenneth Maclean: Section 16, -section 17 as it now is-should be amended, when we come to it, by inserting
ff?!r George Foster.]
after the word "donation," at the end of the third line, the words "royalty fees."


Georges Parent: What I have in mind, and I presume the minister can clear up any doubts on the point, is this. The proprietor of a certain mine sends a specimen of the ore to this Research Council and they discover a method by which it can be handled at a profit' by that mine owner. Do I understand the minister to say that in a case of that kind the council will fix the royalty to be paid by the person who owns the mine because they have discovered a method of treating the ore which gives the mine its value? .


George Green Foster: I do not think such a case comes under "research" such as contemplated here. An industry is carrying on its work-say it is the pulp and paper industry. It meets a certain problem and finds it impossible, with the means at its disposal, to solve that problem. The industry would be greatly benefited and the costs of manufacture largely reduced-if a solution could be found-I have not explained this so far, but I will do so now. The pulp and paper industry-we will say as an instance for the time being-says to the Research Institute, "We want to have a room allocated in the institute with the use of your equipment and with your supervision. We have a man ourselves, we will send him there, and he will apply himself to research work to solve that problem. We will pay all the expenses incurred in helping our research man." If the research man comes upon a valuable discovery, no proceeds of that discovery need be given to the funds of the Research Institute. The discoverer is the pulp and paper industry's own man and they get the benefit of all that their man accomplishes.


Alexander Kenneth Maclean: The benefit of all discoveries?


George Green Foster: Of all discoveries, and they will reward him as they see fit. But in the case of researches carried out by the researchers of the institute themselves, should they happen upon a valuable invention the Research Institute will own the invention and it is to those researchers that the royalty or bonus will be paid. Respecting ore discoveries and other things of the kind, those are more of the nature of analyses-that is not really research work, and is not, I think, germane to this clause.


[Stage Direction]
Amendment agreed to.
Alexander Kenneth Maclean: I suggest
to the minister that there be inserted, after the word "donation" at the end of the third line, the words "royalty, fee".
Amendment agreed to and section as amended agreed to.


Mr. FORTIER:: What will be the annual appropriation for the carrying on of the work of the institute?


George Green Foster: That will
depend upon the extent of the equipment and facilities with which we decide to commence. I do not think it is wise for us to start on too expensive a basis, but at the same time we must begin sufficiently well equipped to make the institute really helpful to the industries of the country.


William Stevens Fielding: Will the amount appear in the Estimates for this year?


George Green Foster: We will bring down the amount-it is under consideration now-in the Estimates, and when it coimes before the House we will be able to give complete explanations as to what we propose to proceed with at first.
On section 17-annual report.


Georges Parent: The clause provides that this report shall contain such information and details as "the council and the minister may require." Would it not be better to say "the council or the minister" because if the minister should refuse his assent, the report may not be available to the public? If you accept my suggestion there are two chances to one in favour of the report being published.


George Green Foster: I cannot see that there will be any such difficulty as my, hon. friend seems to apprehend. Parliament will get the report fast enough; we will be only too glad to bring it down.
Bill as amended reported, and read the third time and passed.



OPIUM AND NARCOTIC DRUGS

[Stage Direction]
On motion of Hon. J. A. Calder (Minister of Health) the House went into committee on Bill No. 81 to amend the Opium and Narcotic Drug Act (as amended), Mr. Boivin in the Chair.
On section 1-prescriptions not to be filled more than once, etc.:
Georges Henri Boivin: This is the Bill as
reported on April 27 last by the special committee to which it was referred for consideration. The only change has been
the addition of subsection (a) of section 1 of the following words:
And by inserting after the word "occasion" in the eleventh line thereof the following words: "except where the preparation covered by the prescription might have lawfully been sold in the first instance without a written order or prescription."
There is no other change in the Bill.


Mr. STEVENS:: I wish to offer an additional clause to the Bill. The reason I am doing it in this way is that it was thought that this amendment would have to be incorporated in the criminal code, but after consultation with the parliamentary counsel and the minister it was considered wise to insert it in this Bill. It has been found in administering the original Act that light penalties and comparatively small fines had really very little deterrent effect. Therefore I move to amend clause 1 by inserting after paragraph (d) on page 1 of the Bill, the following words:
(d) Subsection 2 of section 5a is amended by striking out the last five lines thereof and substituting therefor the following:
'^Shall be guilty of a criminal offence, and shall be liable upon indictment to imprisonment for any term not exceeding seven years, or upon summary conviction to a fine not exceeding one thousand dollars in costs and not less than two hundred dollars in costs, or to imprisonment for any term not exceeding eighteen months, or.to both fine and imprisonment ; provided that any person who unlawfully sells, gives away or distributes any drug to any minor shall be proceeded against by indictment and not summarily, and, in addition to being liable to the penalty of seven years' imprisonment aforesaid, shall also be liable to be whipped."
That applies only to sale or gift of drugs to minors. I want the committee to realize the seriousness of such an offence. While I have not the definite evidence before me at the present time, I believe my information is accurate, that in many of the large cities drug traffickers actually distribute drugs to high school children or children in the higher grades of the elementary schools for the purpose of stimulating the drug habit among them. A more diabolical and pernicious practice I cannot conceive of. I suggest that in such cases it shall be made possible to apply this severe punishment. I speak from considerable knowledge of conditions in my own city, and I think they are common to other cities as well, that these drug traffickers deliberately traffic in drugs with young girls of sixteen years of age or thereabouts and also with young boys, especially of the clerical and student class, and many

most tragic cases have been brought to light where these young people, especially girls, have been utterly ruined. So I submit to the committee that we cannot make the penalty too severe. I move, therefore, that this amendment be incorporated in the Bill.


William Lyon Mackenzie King: Mr. Chairman, in 1910, I had the privilege of introducing in this House a Bill for the suppression of the use of habit forming drugs, and I recall receiving representations as to the extent of the traffic. I rise simply to say that what the hon. member for Centre Vancouver (Mr. Stevens) has stated is entirely in accord with the information I received at the time. I believe that in the city of Montreal, for example, the nefarious traffic was more or less prevalent at that time, and the legislation then introduced was for the purpose of trying to put an end to it. Apparently it has not been drastic enough, and anything that will help to make it such I should most heartily support.


Samuel William Jacobs: I am against the idea of
placing on our statute book any provision for the further introduction of whipping. We do not whip people in these days. I admit that there is provision for whipping in the case of certain offences, but this is provided only for cowardly attacks upon weak people. For instance, the penalty of whipping is provided in cases where garrot-ing is resorted to, that is, seizing people on the streets and committing violence upon them. In the case of rape and other offences of violence against women a similar penalty is provided. But the cases to which it is applicable are very few, and, as I say, they are cases of cowardly attacks by the strong upon the weak. In former days people were whipped for almost anything, but the tendency has been to do away with that as far as possible. I would be against the principle of inserting in our laws in this twentieth century penalties of that kind, which have now been almost wiped off our statute book. Then, I think it is a mistake to provide that these offences shall be made indictable offences, the accused not being given an opportunity to elect whether he shall be tried by a magistrate-or in what we call a speedy trial court-rather than by a jury.


Henry Herbert Stevens: My hon. friend is aware that in the case of summary trial the jurisdiction of the magistrate is so limited that in the graver cases of offences it is ineffectual. The idea of the summary trial

was that it should deal with what might be called technical evasions or breaches of the Act, not with the illegal and terrible practice of distributing or using these drugs as has been known to be the case-my hon. friend knows to what I refer. The summary trial was designed to deal with the case of possible oversight on the part of some one dealing in the drug, and the punishment was very mild and very moderate. The only way you can provide for a more severe punishment is by making the offence an indictable one.


Samuel William Jacobs: An indictable offence is
one in which the accused is indicted and tried before a jury. But if the prisoner wishes to waive his right to trial, by jury, surely the hon. member would not insist that he be tried by a jury willy-nilly. He could be tried before a speedy trial court and get everything that is coming to him there. But if you insist that he shall be tried by a jury you are putting his offence in the same class as treason, murder, and one or two other grave offences. I am not advocating the case of offenders who traffic in these drugs, but I wish to see the symmetry of our law maintained. For that reason I think it would be a mistake on our part to rush into changes of this kind without fairly considering each one of them. I would be positively against that part of my hon. friend's amendment which declares that the offender shall be whipped. That is a relic of past ages which should not be reintroduced into our laws.


Alexander Kenneth Maclean: I quite
agree with the observation made by the hon. member; I think that the penalty provided is so severe that it will never be enforced, even if sentence under it is made by the court. I think it would be unwise, therefore, to place such a penalty in the law. I would like to ask my hon. friend also whether the age limit 'in this (case is twenty-one years?


Henry Herbert Stevens: Yes.


Alexander Kenneth Maclean: Well, there are many people around twenty and nineteen years of age who are very wise in the matter of narooties. If the Bill is for the purpose of protecting young and inexperienced persons, I think that the age should be reduced.


William Stevens Fielding: Has the hon. gentleman submitted his amendment to the Department of Justice for its opinion?
'Mr. STEVENS:	Yes.


William Stevens Fielding: And do they concur
in it?


Henry Herbert Stevens: Yes. I consulted with
the Minister of Justice. The amendment was drafted by Mr. Gisborne, Parliamentary Counsel.


John Allister Currie: I quite agree with the
view which has been expressed against that feature of the Bill which provides for whipping. I have seen several men whipped, and I think it is an absolutely inhuman practice; we might as well hang the man and be done with it. Possibly the penalty should be increased, but why place such a weapon in the hands of unprincipled people?	Minors-girls, for instance, of
unprincipled character-can make a charge against anybody, with very unpleasant results. There are two sides to these questions. To my mind, when we insert a penalty of this character-
. THE ROYAL ASSENT
Sitting suspended for Royal Assent to Bills.
A message was delivered by [Colonel Ernest J. Chambers, Gentleman Usher of the Black Rod, as follows:
Mr. Speaker, His Honour the Deputy of His Excellency the Governor General desires the immediate attendance of this honourable House in the Chamber of the honorable the Senate.
Accordingly, the House went up to the Senate.
And having returned,
The Speaker informed the House that the Deputy of His Excellency the Governor General had been pleased to give in His Majesty's name the Royal Assent to the following Bills:
An Act to incorporate The General Synod of the Church of England in Canada.
An Act respecting The Dominion Life Assurance Company.
An Act to incorporate The Mayo Valley Railway, Limited.
An Act respecting the Canadian Pacific Railway Company.
An Act to incorporate The Canadian Transit Company.
An Act respecting The Lake of the Woods Control Board.
An Aot for the relief of Hazel Galbraith.
An Act for the relief of William John Bell.
An Act for the relief of Frederick Harold Walton.
An Act for the relief of Mary Elizabeth Leonard.
An Act for the relief of Alexander LaRue.
An Act for the relief of Maria Martin Morel.
An Act for the relief of George Gourley.
An Act for the relief of Thomas Edwin William Flower.
An Aot for the relief of Royland Stanley Morrison.
An Act for the relief of Arthur Ebenezer Sims.
An Act to define Canadian Nationals and to provide for the Renunciation of Canadian Nationality.
An Act. to amend the Statutes relating to Corrupt Practices at Elections.
An Act to authorize an extension of time for the completion of the St. John and Quebec Railway between Centreville, in the county of Carleton, and Andover, in the county of Victoria, New Brunswick.
An Act concerning the Canadian Wheat Board.
An Act to amend the Winding-up Act.
An Act to extend the time for the payment of certain debentures issued by the Harbour Commissioners of Montreal.
An Act to amend The Currency Act, 1910.
An Act respecting the Grand Trunk Arbitration.
An Act respecting The London and Lake Erie Railway and Transportation Company.
An Act respecting a certain Trade Agreement between His Majesty and the President of the French Republic.
An Act respecting a certain Agreement between Canada' and certain of His Majesty's colonies in the West Indies.
An Act for the relief of Duncan MacDonald Oxley.
An Act for the relief of Rose Winifred Smith.
An Act for the relief of Evelyn Campbell.
An Act for the relief of Margaret Thorne Acton.
An Act for the relief of Lillian Florence Ansell.
An Act for the relief of Ellen Greenwood.
An Act for the relief of Edna Garnet Rabb.
An Act for the relief of Gertrude Gladys Vernon.
An Act for the relief of Stella Anna Jackson.
An Act for the relief of Mabel Marshall.
An Act for the relief of Margaret Marie Cook.
An Act for the relief of Jean Grey Holt.
An Act for the relief of Harry Tolhurst.
An Act for the relief of Rosetta Hood.
An Act for the relief of Albert Edwin Gordon.
An Act for the relief of Willie Hopkinson.
An Act for the relief of Mamie McKillop.
An act for the relief of Frederick Robert Studholme.
An Act for the relief of Beatrice Osborne.
An Act for the relief of John Verner McAree.
An Act for the relief of Fergus McKee.
An Act respecting The Quebec, Montreal and Southern Railway Company.
An Act to amend an Act to incorporate Gil-mour and Hughson, Limited.



[Stage Direction]
House again in committee on Bill No. 81, to amend the Opium and Narcotic Drug Act, Mr. Boivin in the Chair.
Georges Henri Boivin: Mr. Stevens has moved an amendment to clause 1, which was under discussion.


Mr. CALDER:: Personally I am inclined to the view expressed by the hon. member for George Etienne Cartier (Mr. Jacobs) with reference to the penalty proposed. I doubt very much the advisability of including whipping as a penalty for the offence under discussion. It is quite true

that the hon. member for Centre Vancouver (Mr. Stevens) referred this proposed amendment to the Minister of Justice, but I would judge that the minister approved of it only in form. I have not had the opportunity of discussing the matter with the Minister of Justice, but personally, I would like to see that feature of the amendment struck out. I thoroughly agree with the other provision. Under the law as it now stands, the maximum penalty for the offence referred to is $200. I think that might very well be increased to a maximum of $1,000, leaving it to the magistrate or judge to decide as to what amount up to $1,000 should be imposed in each case.


Henry Herbert Stevens: I do not wish to prolong the discussion. I wish to point out to the committee a few facts. It is quite clear to me that the committee does not appreciate the seriousness of this crime or the prevalence of this pernicious practice of illegally distributing drugs. I do not wish, as it were, to foul my own nest by referring to the Pacific Coast cities, but I am more familiar with the conditions there, and I may add this. I have been giving this question study for a great many years. The hon. leader of the Opposition (Mr. Mackenzie King) mentioned a little while ago that he had brought in a Bill in 1909. I was responsible for the matter being brought to the attention of the then Government. I remember taking some very prominent eastern gentlemen around Pacific Coast cities and showing them the effects of the use of these drugs. They returned to Ottawa and put it up to Sir Wilfrid Laurier, and the result was the Bill that was introduced by the present leader of the Opposition in 1909.
My hon. friend from North Simcoe (Mr. Currie) a moment ago said that whipping was inhuman. But does not the committee realize that this deliberately conceived illegal distribution of drugs results in the ruination-I am not dealing with imaginary things now, but with cold facts-of scores of young lives, of young girls and young men from the best families, and by "best" I mean morally good. There exists on the Pacific coast-I do not know whether it exists here in the East or not -a highly organized ring of criminals, for the illegal distribution of these drugs. So effective is their organization that the police have been baffled to deal with them in the last few years. I read a brief extract from a report of a meeting held in Vancouver the other day at which Chief of Police Anderson, who has been on the

Vancouver police force for twenty-three or twenty-four years, said that the police were helpless because of the difficulty in getting any penalty commensurate with the crime. Let me give an illustration, a case that occurred within the last month, or witjhin the last two months at all events. A returned soldier named Kehoe, who had rendered excellent service at the front, been wounded and decorated, contracted the drug habit-I do not know how-and he committed a very vicious crime in Vancouver a few weeks ago. The crime was robbery with violence, which my hon. friend (Mr. Jacobs) mentioned a moment ago. For that offence he got five years and the lash, under the criminal code. My hon. friend said that he does not necessarily approve of that, but that it is perhaps a justifiable course to pursue in some cases. About the same time that this ex-soldier got five years and the lash, there was brought before the magistrate a notorious trafficker in drugs, and under the existing law the magistrate was restricted to imposing a fine and a very, very mild sentence. Now this notorious trafficker in drugs was, I contend, as much responsible for that crime as the ex-soldier himself. This ex-soldier, with an honourable past, had been made a degenerate through the use of drugs. And that is only one case out of hundreds I could mention.


John Allister Currie: No, no.


Henry Herbert Stevens: My hon. friend (Mr. Currie), with that broad wisdom of his which over-rides the knowledge of everybody else, says "No, no". But I know what I am talking about.


John Allister Currie: The whole people of
Canada are not "dopes".


Henry Herbert Stevens: I am not suggesting that, and if my hon. friend would suppress his Irish whispers till I finish he could have the floor. I say that the trafficker in the drug was more responsible for the crime than the man who actually committed it, and yet under the law as it now stands it is impossible to give him a sentence anything like commensurate with the crime. The trafficker makes a huge profit,- thousands and thousands of dollars out of a very small quantity of the drug. The difficulty of detecting the smuggling in of these drugs is extreme. They have actually smuggled in the drug from incoming steamers by aeroplane. Traffickers would dump the material overboard with a float, and boats would pick it up. It is exceedingly difficult to detect, although the police are

doing their utmost in every way. But even when the traffickers are caught, they get very light sentences. What I am asking is that as far as ordinary offences are concerned the summary trial should stand, but that in the case of traffickers, these vicious creatures I have been referring to, it should be possible for the#police to indict them, and for the more severe sentence which goes with that method of trial to be imposed. I do not say there should be a fixed term of seven years, but that the maximum should be seven years. Then I go further, and I appeal now to my hon. friend (Mr. Jacobs) who spoke so eloquently a few moments ago in this regard. He spoke about protecting the weak against the strong. I am appealing to him to support that very principle in the latter part of my amendment. I appeal on behalf of all children and minors, youngsters of the ages of fifteen, sixteen, seventeen and eighteen, scores of whom are annually ruined by this thing. I can tell my hon. friends of actual incidents where young men and young women, with whose families I am personally acquainted, have been utterly ruined by the use of drugs, having acquired the habit through the agency of these particular parasites I have mentioned. Against that crime of giving drugs to children and minors I say that not only is imprisonment necessary, but it should be made possible for a judge and jury in their discretion to add the lash. This amendment does not make it compulsory, but it provides that in severe cases there shall at least be some method of dealing with this heinous offence. My closing word to the committee is this: If it so happens that hon. gentlemen have not had personal experience with this class of crime, I suggest that they pause before treating the matter lightly, and bear in mind these statements which I have made, and which may be substantiated fully both by officials in the administration of the law and by other authorities as well. It is proposed to call, for May 12, a conference of representatives of all the coast cities to secure amendments to the criminal code just along the lines I am mentioning; but any action taken will be too late for this year, and another year will go by before any relief can be secured. I therefore ask the committee to give this matter very serious consideration. As my hon. friend said a moment ago, the principal idea is to protect the weak and innocent, and it is also important that we should make adequate provision against the heinous crime of trafficking in drugs.


William Lyon Mackenzie King: When I spoke a moment ago I was speaking entirely from memory, but since then I have had an opportunity of referring to Hansard of the time at which this subject was debated. It was in January, 1911, during the session of 1910-11, that the legislation was passed. What I had particularly in mind, in referring to the city of Montreal, were the representations made at the time by some of the officers in charge of the Children's Aid work in that city. I find I said to the House that the Probation Officer of the Children's Aid Society had given this subject very careful study, and had reported that of her own observation she had met as many as fifty or sixty little girls and boys within the same day, in the city of Montreal, all of whom had acquired the cocaine habit to some degree. I remember having had an interview with this officer before introducing the legislation, and I was so astonished at the representations made that I took occasion to communicate with a large number of responsible citizens in Montreal, including the heads of a number of different religious denominations, settlement workers, and others. The communications received from them will be found in Hansard of January 26, 1911, at page 2525, and three or four pages following. If hon. members have any doubt about the representations made by
5 p.m. the member for Vancouver (Mr. Stevens), they will, on perusal of these statements, discover that he is entirely correct. I do not think there is a class of evil that is more vicious in its possibilities than the attempt to have young children acquire the drug habit, and if there are any fiends of this kind abroad in the community, it seems to me that, if the money penalty or imprisonment is insufficient to restrain them, Parliament should provide more drastic measures.


Peter McGibbon: I think
the House will agree that in regard to the cases referred to by the member for Vancouver there can be no great difference of opinion. Personally, I would advocate penalties going almost to any limit to restrain people who force others into the drug habit. But I do not think that there is much to be gained by flogging; apart from this, I would support any penalty at all in cases of this kind. However, I must, as I did the other day, object to this clause in the Bill. I sometimes think that we have acquired a sort

of mania for restricting and restraining people. I have said that before, and I say it now. In very many ways now, a man does not know whether, according to law, he is a law-abiding citizen or a criminal. We are passing laws one year and repealing them the next. Now, I objected the other day on behalf of the ordinary man or woman who is forced back to the mediical man to get ordinary household prescriptions refilled. I do not object to punishing the drug fiend, and f;he penalties in this respect may be made as extreme as is desirable.. But I am absolutely opposed to this eternal attempt to restrict the liberties of the ordinary man. I do not think that this provision is required; it is not wanted by medical men, I am quite sure of that; and it is also an insult to druggists. Furthermore, it is a restriction of the liberties of the great mass of the people. I should like to see some means adopted whereby the case of these drug fiends can be differentiated from the case of ordinary law-abiding people who should have some freedom in the matter of having prescriptions refilled. Many people have household remedies which they have been getting refilled year after year for years, and this liberty will be absolutely restrained if this Bill is passed as it is. It is not fair that nine hundred and ninety-nine inen should be penalized on account of the thousandth. I am of the opinion that outside of the great cities of Canada there are practically no drug fiends in the country. I do not hesitate for a moment to accept the statement of the hon. member for Centre Vancouver that the drug habit is a grave problem in his part of the country. It is also, no doubt, a serious problem in Montreal, and perhaps in other large cities. But out in the rural parts of the country, which, after all, constitute the greater portion of Canada, the drug habit is practically unknown. I again register my protest against this legislation, and while I absolve the minister-because I know that a great deal of it is put into his hands by the departmental officials-I think that this House should seriously take into consideration whether the Civil Service of the country should prepare and mould all legislation of this kind, or whether Parliament should have a greater share in the shaping of it. At any rate, I think the application of this law should be such as not to interfere with the rights and liberties of the people in the rural and smaller urban centres. I agree with 
the member for Centre Vancouver that everything should be done to curb the drug habit, and no penalty is too great for men who will commit crimes such as he has recited this afternoon. But, after all, there are others to be considered too; and while any further protest on my part may do no gogd, I am going to voice my objection once more to all restrictive measures of this kind. I have objected in the past, and will continue to do so as long as I am a member of the House.


Mr. CLARK (Red Deer) :: I regret to hear of the prevalence of the drug habit in portions of British Columbia. I had observed previous to the war that there was a little weakness in the political mentality of that province. I did not think, however, that the drug habit there had gone so far as to be responsible in any degree for that political mentality.


Samuel William Jacobs: They were chloroformed.


Michael Clark: That point on one side, I am disposed, in the matter of the lash, for this offence, to agree for once, in a way, with my hon. friend from North Simcoe (Mr. Currie). I remember that a crime known as garroting becoming very prevalent in the neighbourhood of London. It was a peculiar form of the crime of robbery with violence, and the favorite victims of garroters were found, for a period, to be old people. In that case the cat-o'-nine-tails was applied with very great benefit to the community, and the practice of garroting disappeared with very great rapidity. But I distinguish between that crime and even so reprehensible an action as the sale of drugs. In the case of garroting there was crime with violence which absolutely took away the liberty of the victim. In the case of the sale of drugs there is, to some extent, the agreement of the victim who buys the drugs. Now while the cat-o'-nine-tails is a good implement for crimes of the gravity of garroting, I agree with my hon. friend from North Simcoe that it is doubtful whether the community will not in the long run be affected in a worse degree by the example of the Government along the line of what, after all, is a brutal proceeding, than by the prevalence for some period of this drug habit and of the conduct of the people who minister to it in commerce. Having made that exception, I agree with all who have spoken that the punishment, along the line of imprisonment, should be as severe as ordinary humanity would permit

ns to inflict; but I doubt very much whether we should/ allow the whip, or physical punishment, in even so serious a case as this.


Mr. MANION:: I wish to say a word or two along the lines expressed by my hon. friend from Red Deer and other hon. gentlemen who have spoken, that the lash should generally be kept for crimes which are in the nature of the crimes of a bully- that is the crime of wife-beating, the crime of cruelty to children; I mean physical cruelty to children. While I agree absolutely with my hon. friend from Centre Vancouver in regard to the great criminality of the people who administer and sell these drugs, at the same time I think, and doubtless he will agree with me, that if you make the imprisonment penalty and the fine penalty, particularly the former, severe enough you will probably accomplish what he seeks to accomplish by the use of the lash. I understand that the punishment now for this crime is something like imprisonment for one year, and I think his amendment will probably be a perfectly wise amendment if he leaves out the lash. If I happen by any chance to be a member of this House one, two, or three years from now, after the more severe imprisonment penalty has been tried, and if at that time it is found that the imprisonment penalty has not brought about the cessation of this traffic in drugs, at which he aims, then I think his suggestion might be considered. In the meantime I believe it would be wise to leave the lash for the punishment of a few other crimes which it is used for, or proposed to be used for, at the present time. '
Mr. DuTREMBLAY: According to this proposition the burden of proof is thrown on the accused in the event of a drug being found in his place or on his person; he has to prove that the drug has been put there without his authority or consent. Now, such a drug might be found in the house of a man who was acting in perfectly good faith and who was ignorant of its presence. It is very difficult sometimes for a person to prove his innocence, and it is contrary to English law to regard a man as guilty unless his guilt is proved,- the accused does not have to prove his innocence. I think such a provision should be omitted from the clause.


Samuel William Jacobs: If I am in order I would like to move an amendment to the amendment presented by my hon. friend from Centre Vancouver, and it is to this effect:
To strike out the words "and in addition to being liable to the penalty of seven years imprisonment aforesaid shall also be liable to be whipped."
That is to say I would be prepared to accept the amendment with the words I have just mentioned struck out. By the amendment, it will be noted, the term of imprisonment is increased to seven years, the fine is raised to $1,000 maximum and the minimum is $200. I think that ought to satisfy even my hon. friend from Vancouver for the present.


Georges Henri Boivin: As now proposed to be amended the amendment will read:
"shall be guilty of a criminal offence, and shall be liable upon indictment to imprisonment for any term not exceeding seven years, or upon summary conviction to a fine not exceeding one thousand dollars and costs and not less than two hundred dollars and costs, or to imprisonment for any term not exceeding eighteen months, or to both fine and imprisonment; provided, that any person who unlawfully sells, gives away or distributes any drug to any minor shall be proceeded against by indictment and not summarily."
The question is on the sub-amendment.


William Stevens Fielding: There are some persons-happily for the world not many, but I suppose in all communities there is the possibility that there are a few-of such a brutal nature that they are not to be brought to justice by any of the ordinary means of law. In these few cases there is abundant reason for using the lash, but such cases ought to be very few, and I am not clear that the case made out by the hon. member for Vancouver is a proper one. Even if the evil which he describes is less than he pictures, it is still a very great evil and should be dealt with by the House in all gravity and seriousness. But I have difficulty, I confess, in quite understanding how this evil of trafficking in drugs with children can be as broad as is alleged, These drugs are expensive, nobody can afford to give them away to school children; and the opportunities of detection would become very large indeed if you dealt with school children-grown persons can be parties to concealment but children cannot very well be so. It seems to me that if the evil is as broad as my hon. friend describes it, it would be much more easily detected than, from his observations, we might judge. Then as to the question of cost, I cannot see where any drug fiend can have any object in spending his money in giving these drugs away to children. I am afraid that aspect of the question is somewhat magnified. But even if it existed in a lesser degree it would merit severe punishment.

Then there is another thought. My hon. friend's amendment deals with a minor. Now a child and a minor are not really quite the same. A young man of twenty years and eleven months is a minor, and a young woman of the same age is a minor; but we know they are both capable of understanding things, and I do not think it is right, in such a matter as this, to treat all persons below twenty-one years of age as being children. Young men of nineteen or twenty, and young women of the same age, have arrived at years, if not of discretion, of understanding, and I do not think we should treat them as children. For all these reasons, while' I will support my hon. friend very heartily as to the general character of his amendment, I think the whipping provision had better be omitted.


Mr. EDWARDS:: A good many laws
have been placed on the statute books which, to my mind, in the punishment prescribed, have been unjust, illogical and unreasonable. There is no getting away from the fact that a discrimination has been made in favour of those who possess wealth, and that these might commit a crime and receive practically no punishment while a poor person who committed the same crime might be very severely dealt with. To illustrate what I mean I may take the case of two men who have violated the law by getting drunk.
Same hon. MEMBERS : Oh, oh.


William Cameron Edwards: I see, hon. gentlemen laugh at the idea of any person getting drunk in these dry times. The two men come before the magistrate, who convicts them and prescribes so many days or so many dollars as punishment. The man who has plenty of wealth simply hands out his dollars and walks home; the other poor fellow, having probably spent all his money in liquor, goes to jail. That seems to me to be unreasonable and illogical. But coming to the punishment of drug traffickers, my hon. friend from Montreal (Mr. Jacobs) thinks we should be satisfied if we impose the maximum penalty of seven years' imprisonment and $1,000 fine. Well, if the culprit has lots of money the mere payment of $1,000 will not amount ,to very much in the way of punishment. But the seven years' imprisonment is supposed to have a certain deterrent effect upon that man and others like him. So far so good. If, in addition to imposing the penalty of imprisonment, you can reach some of those creatures by applying the lash, then apply

it by all means. On general principles I would apply the lash to all of them. It might not have any effect on some of them, but even if it deterred only a few from repeating the crime the lash would be justified. I have not the slightest sympathy for the person who traffics in these drugs. We think it quite right to apply the lash to a brute who beats his wife, but I can imagine no more brutal character than he who coolly and deliberately plans, for his own financial gain, to absolutely ruin the lives of his fellow-citizens. Does that individual deserve one particle of sympathy or consideration? There is only one feature to look at in applying the lash, and that is, will it have a brutalizing effect on the man who applies it? If you say it will, some consideration might be given to the objection to this form of punishment, but none so far as its effect on the creature who traffics in drugs is concerned; the law cannot be too severe upon him. Why restrict imprisonment to seven years? What is the use of letting a creature of that kind out after seven years? He is better behind the bars for his natural life. If in the course of time he reforms, then you might give him another chance, but on general principles I think it would be safer to keep the brute in prison. The lash will have a deterrent effect, I believe, upon these criminals who are cowards in their nature, and for that reason the punishment should be made applicable to them, because any person who for the sake of his own gain will plot to destroy his fellow-human beings is the most cowardly creature I can imagine.


Mr. TWEEDIE:: When we had this matter up in the House at the time of the original enactment, the question arose as to making this trafficking in drugs an indictable offence, but the hon. member for Durham (Mr. RoWell) thought it was absolutely necessary that the magistrates be given summary powers in order that they might deal quickly with these cases. Now, the amendment as proposed makes the trafficking an indictable offence, and the penalties both as to fine and imprisonment are more severe than if the case is dealt with under the sections relating to summary procedure, and there is no doubt that a guilty man will elect to proceed under the latter and thus defeat the purpose we have in view. I would like the Minister of Justice (Mr. Doherty) to express his opinion in regard to the right of election. I think that under the amendment as it stands now the accused would have the

right to elect whether or not he would be tried summarily or by a court of competent jurisdiction-I cannot give, offhand, the wording of the section.


Samuel William Jacobs: The amendment, as I
understand, declares that hereafter this trafficking is to be an indictable offence.


Thomas Mitchell March Tweedie: That is just the point -whether he will be tried by a magistrate under the summary conviction section or will elect to be tried by a court of competent jurisdiction.


Charles Joseph Doherty: In the first place, it may be pointed out that so far as this special provision in regard to minors is concerned, the summary method of procedure is absolutely excluded. While I am not prepared to answer offhand, being like my learned and hon. friend without the text of the law before me, I must confess that my impression would be that the choice would not necessarily rest with the accused. It would strike me that if you give him in a case of this kind absolute choice you enable him to make inapplicable the higher penalties that are imposable where the proceedings are upon indictment. I do not wish to speak too positively, but my present impression is that it would be open to the prosecuting authority to proceed by indictment. It is not a question, I think, of particular application in this particular case; it is a question of the application of the general principles of the Criminal Code that have to do with proceeding by indictment or upon summary conviction. Speaking from recollection, I think there are certain classes of cases where the election is given to the accused, and that, say, in the cases where the election is so given to the accused, with a formula just as this formula is, it would be open to the prosecution, if they thought the gravity of the case was such that it ought to be possible to impose the greater punishment that might follow on the trial by indictment, to proceed in such manner that the case would be tried upon indictment.


Thomas Mitchell March Tweedie: My recollection is that
there is not much doubt that the accused has the election in this case. There are certain cases in which the jurisdiction is absolute. There are certain provinces in which the jurisdiction is absolute so far as the magistrate is concerned. We have cases now before us in which there is a dispute between different provinces as to whether the magistrate has jurisdiction or not, and I think that is one point that ought to be
put beyond all question of doubt. But as as it is, the magistrate must ask the accused in the box whether he is ready to be tried by him summarily or to be tried before a court of competent jurisdiction, and if that is the case the effect of the Act would be defeated.


John Allister Currie: It seems to me that in
applying penalties of this kind some progressive system should be adopted. For instance, suppose a man is charged with breach of the law, he is tried and convicted and a minor penalty imposed. If he appears before the court a second and a third time, then the penalty which the hon. gentleman has in mind should apply. Otherwise, I question whether it is fair to leave the door open to blackmail as miight be the case under such a clause as this. Now, I have had some experience in matters of police work; in my younger days I was a reporter for the Mail and Empire for something like ten years, and I have a pretty fair idea of the number of cases of this kind that might occur. It seems to me that we are wasting too much time over trifles. From the time that we are taking over this thing and the speeches we are making and the efforts we are putting forth, the public might naturally come to the conclusion that the whole country is seething with this drug evil. As a matter of fact, such is not the case. No country in the world is freer from drug fiends than Canada is, and we are legislating for perhaps one case in fifty thousand. In doing this, we are, to my mind, blackening the character of the great majority of the people of this country, and I do not see that there is any necessity for it. In the first place, a man does not become a trafficker in the eyes of the law until he has had a conviction or two registered against him and penalties imposed of a minor character. If he becomes a trafficker, having been convicted once or twice, then let the major penalty apply. I have seen many cases where innocent men have been badgered by legislation of this kind. If you pass such drastic legislation as this, you are putting a weapon into the hands of irresponsible and wicked people to blackmail honest people. I have watched with a great deal of interest the trend of legislation in this House so far as drugs are concerned. A druggist to whom I was talking recently protested against this repeated legislation. He is an honourable man, who does not traffic in drugs or anything of the kind, and he said that if we kept on passing laws in the House of Commons with reference to

drugs, the stage would very soon be reached where if a mother looked at her son's tongue in the morning, found that he was not feeling very well, and said to him: "Johnny, you ought to go and take a dose of salts," she would be liable to ten years' imprisonment and the whip. We are going to absurd lengths in this matter. Why should we waste time legislating for one case in fifty thousand, as we are doing this afternoon? There are so-called social service workers who are magnifying the effects of these drugs in order that they may draw good salaries; that is about the size of it. When I was a reporter I reported all the criminal cases, and I must confess that nine hundred and ninety-nine people in a thousand are free from any crime, and that no country is as free from it as Canada is. I object to any legislation which would make one think that Canada is populated by drug fiends. For that reason I think that this clause should be modified to provide that a man may not be indicted for the first offence. If we leave it as it is, the result may be the indictment of a man who never saw a drug as contemplated in this Act. A dissolute woman, regardless of justice or fair play, might impugn the character of an honest man, a clergyman or some one who had called upon her; she might lay a charge against him, and if he had lots of money he would have to pay. Let us apply some common sense to our legislation. Let us not be a nation of uplifters; there is far too much hypocrisy in all this legislation. I think, therefore, that this clause should be allowed to stand for another day in order that the Minister of Justice may give it further consideration with a view to the drafting of a sane provision which we can adopt here without feeling ashamed of it after we leave the House.


Mr. LEMIEUX:: Some months ago three or four trunks of cocaine were seized by officers of the Crown in Montreal and put in the Court House. A few days afterwards, when the case was about to be proceeded with before the criminal Court, the Court House was broken into during the night and the cocaine disappeared. I am informed that the Government are aware of the location of the cocaine. Have any proceedings been taken in the matter?


Charles Joseph Doherty: I am not personally
cognizant of the matter. Such proceedings as are referred to would be taken under the direction of the officers of the Department of Health. Of course, they might appeal

to us to provide professional assistance. I only mention this to explain why the matter has not come to my knowledge in any way. I shall, however, make inquiries either through the officers of the Department of Health or through my own officers so far as they may have been in connection with the matter, and give the hon. gentleman the information.


James Alexander Calder: The matter was brought to my attention for the first time last night when I got simply a hint that something of that kind had occurred. I did not get the details the hon. member for Maison-neuve (Mr. Lemieux) has just given to the committee. However, I gave instructions to have a statement of the facts in connection with that case prepared for me, and I expect to have the information at any time.


Rodolphe Lemieux: Surely if the cocaine is located, it will remain in the hands of the officers of the Crown.


James Alexander Calder: Yes.
Amendment to the amendment (Mr. Jacobs) agreed to.
Amendment (Mr. Stevens), as amended, agreed to.


James Alexander Calder: The hon. member for Laurier and Outremont (Mr. Du Tremblay) referred to paragraph (d) of the Bill which deals with the question of possession of these drugs, and he thought it very unreasonable that the party in whose premises these drugs might be found should be called upon to prove that they were there lawfully. I might just read to the committee a memorandum that was placed in my hands by the department regarding the difficulties which they have had in connection with that portion of the law:
The reason for this amendment is due to the fact that in the enforcement of the Act it has been found that the magistrate in the courts of various provinces have interpreted the word "possession" as mentioned in this section to have very many different meanings or intentions, for instance one magistrate in the province of British Columbia gave as his opinion that the word "possession" meant that a person to be in possession must be the absolute owner, and be able to dispose of the property to the exclusion of all other persons, while as a matter of fact, in most cases, persons found in possession of these drugs are only the agents (or intermediates) for the real owner. These persons, however, found in actual possession of these drugs are the ones who are of course responsible for the illegal carrying and distribution of the same. It might be further explained that in many cases where the police search the premises and find in a room occupied by a Chinaman or other person, quantities of opium, etc., and where the accused is charged

with having the drug in his possession, the defence is offered that the drug is not the property of the accused, having been left there by some unknown person. It will therefore be observed that it is very important that the meaning of the word "possession" in so far as it pertains to this section should be defined as clearly as possible for the guidance of the magistrates who have to deal with these cases.
In other words, in carrying out the administration of the law, the department,
1	am advised, in case after case, fell down in their prosecutions simply because they were not able to prove that the person who was in possession of the drug actually owned the drug. For that reason, this amendment was suggested, and I have no doubt at all, that if approved by the committee and carried by the House, it will aid very materially in the administration of the law.


James Alexander Calder: I beg to move to amend sub-clause (e) of clause 1 by substituting for the word "the" in the sixth line on page
2	of the Bill the word "a". The clause will thus read:
the certificate of a Dominion analyst as to the result of analysis.


[Stage Direction]
Amendment agreed to.
William Lyon Mackenzie King: In clause 7, line 19, there is a phrase, the meaning of which is not quite clear. The clause reads:
And if such drug is there found bring it before a magistrate having jusrisdiction in the matter.
Does that mean to bring the drug or the possessor of the drug before a magistrate? If the drug is to be delivered to a magistrate, should the clause not read:
If such drug is there found deliver it to a magistrate having jurisdiction in the matter.
Either it is the possessor of the drug who is to be brought before a magistrate, or it is the drug which is to be delivered to a magistrate.


Charles Joseph Doherty: The explanation of the form of words which, at first glance, might appear to be more applicable to a person than to a thing, is not improbably this, that if you say that he is to deliver the drug to a magistrate, you put upon the magistrate the obligation, under all circumstances and under any conditions, to take possession of the drug and hold it, whereas the drug so found being brought before a magistrate, the circumstances may, in the judgment of the magistrate, he such that he may make some other order
in regard to the drug. While the expression may not be a very elegant one, it produces the same result in that it brings the drug to the magistrate.


William Lyon Mackenzie King: Is that the intention?


Charles Joseph Doherty: Yes. There are other provisions with reference to persons being brought before a magistrate.


William Stevens Fielding: What will the magistrate do with the drug?


James Alexander Calder: Under the old law these drugs which were taken to and left with a magistrate were formerly disposed of by him. We propose now that, all these drugs, when seized, shall be taken to a magistrate, and when the cases are disposed of, the drug, instead of being disposed of by the magistrate, shall be forwarded to the minister at Ottawa to be disposed of by him. That provision appears in clauses 8 and 9 of the Bill, the two new clauses which were inserted in the Bill for the purpose of correcting that difficulty in the old law.


William Lyon Mackenzie King: The words which the minister has just used "take it to the magistrate," would be better than the words "bring it before the magistrate."


James Alexander Calder: Probably.


Alexander Kenneth Maclean: Does the
minister purpose taking power to remit penalties if, upon investigation, it is thought desirable to do so? If, for instance, a magistrate imposed a penalty against a party and it afterwards transpired that the conviction was made upon improper evidence, would the minister have power under any of these amending clauses to make a remission? I have a case particularly in mind. I am sorry to occupy the time of the committee by referring to it here, but it might save a visit to the minister. In a certain town in the province of Nova Scotia-


James Alexander Calder: It might save time if I simply stated that there is, as I understand it, under some general statute, power given to the Governor in Council to remit fines or penalties. There is no such power in this Act. As to the particular case the hon. member has in mind, that matter was dealt with under the general statute the other day, and I understand that provision has been made for a remission of the penalty.



REVISED EDITION. COMMONS

Alexander Kenneth Maclean: Application was refused.


James Alexander Calder: It was under consideration. As a matter of fact, action has been taken in that case, and there has been a remission, I think, of the greater portion of the penalty.


Alexander Kenneth Maclean: Then I was misinformed. I had a letter from one of the departments advising that the application was refused, and I could not understand it, because it did seem a case where it was unfair to insist on the full penalty.


Daniel Duncan McKenzie: I would point out to the Minister of Justice that there is something lacking, in the amendment of my hon. friend from Centre Vancouver (Mr. Stevens). I see no provision made in case the man fails to pay the fine. There is a general provision on the statute book that in case of default in payment of a fine, there shall be a term of imprisonment not exceeding three months, but I do not suppose that that would be regarded as sufficient if a man failed to pay a fine of $1,000.


Charles Joseph Doherty: As it reads, he may be sentenced to a fine of not less than $200 and costs, or to imprisonment to a term not exceeding eighteen months, or to both fine and imprisonment. It seems to me


Daniel Duncan McKenzie: Those are substantive punishments. They do not cover the case where the man fails to pay the fine.


Charles Joseph Doherty: There would be no
harm perhaps in adding some words to make that clear, although my impression would be-


Daniel Duncan McKenzie: It is not a question of " no harm." These are separate punishments, each of them; they are not alternative. There is no punishment for not paying the fine. We have a statute that provides in case of default, in the payment of a fine a man may he sentenced to imprisonment for a term not exceeding three months, but I suppose that would not be considered sufficient in this case. I only bring that to the attention of the minister.


Charles Joseph Doherty: The hon. member for Centre Vancouver (Mr. Stevens) informs me that this section was drafted by the Parliamentary Counsel, and that the very question which the hon. member now raises was considered, and that he was advised by the Parliamentary Counsel that the general provisions of the Criminal Code providing for imprisonment in default of
[Mr. Calder.j
a method of enforcing payment of a fine would, without special reference to them here, find their application in this particular instance. The hon. gentleman is quite clear in his impression that imprisonment is limited to three months?


Daniel Duncan McKenzie: " Not exceeding three months " is the exact language.


Charles Joseph Doherty: Of a general provision. It would seem that there ought to be a provision for a longer imprisonment than that, if that be quite correct. Perhaps I might suggest this: if the Bill be allowed to go through committee now, I will have the precise situation verified, and if there be need to add something to this, as the hon. member suggests, and as I confess looks to me probable at the moment, the hon. minister will see that the Bill be recommitted for the purpose of making the addition.


Daniel Duncan McKenzie: I did not want the promoter of this amendment to be taken by surprise later ton, and to find that in cases where the fine was not paid the alternative was only three months' imprisonment.


Charles Joseph Doherty: I fully appreciate the value of the suggestion, but I think we might see it adequately met in the manner I have just mentioned.
Bill as amended reported.



COPYRIGHT

[Stage Direction]
On the motion of Right Hon. Mr. Doherty (Minister of Justice) Bill No. 12, to amend and consolidate the law relating to copyright, was read the second time.
Charles Joseph Doherty: A number of hon. members are interested in this Bill, the second reading of which has just been carried. It is a Bill which I think it would be most desirable should be referred to a special committee, to be there studied and reported back to this House. Many of the provisions of the Bill are of a highly technical nature, and I therefore think we are making no mistake in adopting that course. I therefore had the intention to move that it should be referred to a special committee, and I shall make that motion as soon as we have agreed upon the names of the hon. members who shall compose that committee.


William Lyon Mackenzie King: The reason I did not speak on the second reading was that it was my understanding that it was the intention of the minister to have this

Bill referred to a special committee. It is partly in the nature of a consolidation, and partly in the nature of amendments. I think it is important that the committee should clearly distinguish between the two, and that the House should be fully informed, when the Bill comes before it again, what are the amendments that are proposed as distinguished from the consolidation. I think the Bill also involves conflicting interests to a certain extent, as between publishers and authors, and I should hope that the committee might find it possible to reconcile those differences as far as may be.
There is one further feature that I think should be mentioned, and that is that the Bill has an international significance, and that as it stands it is open to the possibility of occasioning retaliatory legislation. I hope the committee will carefully consider that feature also when the Bill is referred to it.


Charles Joseph Doherty: I think the hon. gentleman has very clearly indicated the reasons which justify our referring the Bill to a Special Committee.


Edgar Nelson Rhodes: Does the right hon.
minister now move that the Bill be referred to a Special Committee to be subsequently named?


Charles Joseph Doherty: Yes, Mr. Speaker.


Edgar Nelson Rhodes: Is it the pleasure of the House to adopt the motion?


[Stage Direction]
Motion agreed to.
At Six o'clock the House took recess.
After Recess
The House resumed at Eight o'clock.


[Stage Direction]
Bill No. 131, for the relief of Alfred William Wells.-Mr. Boys.

[Stage Direction]
Hon. HUGH GUTHRIE (Acting Solicitor General) moved the second reading of Bill No. 118, to amend the Bankruptcy Act.
William Lyon Mackenzie King: Would the minister state
briefly what is the principle involved in this Bill?


Mr. GUTHRIE:: I do not think that I could describe these amendments as involving any particular principle. They are
184J
drawn with the view of clarifying some of the sections which are considered more or less doubtful in their present form. There are no radical changes in the Bill as originally presented, and all the amendments, I think, have been suggested by financial associations, such as the bankers, trust companies, who are for the most part trustees in bankruptcy, the Association of Chartered Accountants, and the retail and wholesale mercantile associations. There are a great many amendments and many of them are rather elaborately drawn. Many of the sections in the present Bill are to repeal existing clauses, although there has been very little change in language in the repealing clauses. It has been felt that it is better to have a new clause rather than change a few words here and there in the old clause, because it would be easier of interpretation in the courts, or in offices, in its amended form than it would be if we merely insert a few words here and there. I think the best way is to explain the Bill clause by clause as we progress in committee.
_ Motion agreed to and the House went into committee, Mr. Boivin in the Chair.
On clause 3-"Available Act of Bankruptcy".


William Lyon Mackenzie King: Would the minister explain what is involved in that substitution?


Hugh Guthrie: The paragraph of the former Act which we propose to repeal reads as follows:
"available Act of Bankruptcy" means an act of bankruptcy available for a bankruptcy petition at the date of the presentation of a petition on which a receiving order is made.
The new proposed paragraph enlarges that definition by providing three subsections :
(a) "available act of bankruptcy" means an act of bankruptcy committed within six months before the date of (1) the presentation of a bankruptcy petition, or (2) the making of an authorized assignment, or (3) the payment, delivery, conveyance, assignment, transfer, contract, dealing or transaction mentioned in section thirty-two of this Act."
Mr. du TREMBLAY: Why do you give six months?


Hugh Guthrie: Well, six months was considered a reasonable time, to establish the fact that an Act done within six months of the presentation of a petition was done in contemplation of bankruptcy difficulty.


[Stage Direction]
Section agreed to.
On section 4-"Local newspaper".
William Lyon Mackenzie King: What is the change there?


Hugh Guthrie: The old section read as follows:
"Local newspaper'' means a newspaper published in and having a circulation throughout the bankruptcy district or division wherein the debtor has resided or carried on business for the longest period during the six months immediately preceding the date of the presentation against him of a bankruptcy petition or the making by him of an authorized assignment.
Now the words that are left out are:
"wherein the debtor has resided or carried on business for the longest period during the six months immediately preceding the act of bankruptcy."


[Stage Direction]
Section agreed to.
On section 5-"person".
Hugh Guthrie: The object of this
amendment is that it has been doubted whether, under the wording of the present Act, the definition of "person" was broad enough to include an incorporated bank for certain purposes under the Act, particularly in regard to proving claims as a secured creditor; and secondly, whether it was broad enough to include a trust company for the purpose of having such company appointed a trustee in bankruptcy. The new clause has been broadened for the purpose of including both an incorporated bank and a trust company for these purposes.


[Stage Direction]
Section agreed to.
On section 6-dismissal of petition.
William Lyon Mackenzie King: Perhaps the minister would explain each of these substitutions as we go along.


Hugh Guthrie: The reason for this is to use the more imperative form. The present section reads as follows:
If the court is not satisfied with the -proof of the petitioning creditor's debt, or of the act of bankruptcy, or of the service of the petition, or is satisfied by the debtor that he is aible to pay his debts, or, in ease an authorized assignment has been made, that the estate can be best administered under the assignment, or that for other sufficient cause no order ought to be made, it may dismiss the petition.
The desire is to make that read "it must dismiss the petition" as being rather more imperative than the word "may."


Mr. FOURNIER:: That leaves no discretion at all?


Hugh Guthrie: No discretion under the circumstances which are enumerated in section 6. It is to avoid the possibility of filing a petition in court for the purpose of annoying the trader.


Samuel William Jacobs: Have there been any
cases of that kind before the courts?
IMr. Mackenzie King.]


Hugh Guthrie: I do not know that
there has been a decision on the point but it has been suggested that we should give authority to the court whereby the petition under these circumstances could be dismissed.


Samuel William Jacobs: It seems we ought to give the Act a chance to function and if we find that any abuses arise it will then be time to make a change. But merely changing the Act for the sake of change does not appeal to me as being the proper thing to do.


[Stage Direction]
Section agreed to.
On section 7-commencement of bankruptcy.
Hugh Guthrie: Under the old section the time dated from the service of the petition. In a great many cases you cannot effect service. It is a very slow process, as a debtor may leave his ordinary place of business or ordinary residence. The time, under the amendment, will count from the date of the presentation to court of the petition.


[Stage Direction]
Section agreed to.
On section 8-receiving order or assignment to be filed.
Samuel William Jacobs: Would the minister please explain the original section?


Hugh Guthrie: There was no provision in the original section as to where these documents should properly be filed, and it is with the idea of fixing a definite place for the filing of the petition that this amendment is introduced.


[Stage Direction]
Section agreed to.
On section 9-affidavit upon registration where- title to real estate or lien affected.
Samuel William Jacobs: Will you explain that also?


Hugh Guthrie: In Alberta, in Saskatchewan, and in the portion of the province of Ontario which is under the Land Titles system difficulty has arisen in registering bankruptcy proceedings against the particular lands which are affected. The officials of the courts in these provinces have therefore requested that provision be made whereby the bankruptcy proceedings may be registered as notice against the particular real estate which is to be affected. With that end in view this amendment has been made.


[Stage Direction]
Section agreed to.

On section 10-trustee to convene meeting of creditors on proposal for composition, extension or scheme of arrangement:
Hugh Guthrie: The new section proposes to extend and to more definitely fix the duties of trustees and others in regard to meetings of creditors. The essence of the changes made to this section is the grant of power to creditors, in case a proposal for a composition, extension or scheme of arrangement is made before the making of a receiving order or an authorized assignment, to carry on the business of the debtor under a committee, with grant of power to the court to hold off all creditors who are attempting to realize independently until it is discovered whether the proposal will or will not be accepted. This applies to sections 10, 11 and 12 of the present Bill which are drawn for that general purpose land to take the place of similar provisions not so fully elaborated in the Act as it stands to-day.


[Stage Direction]
Section agreed to.
On section 11-proposal of composition or arrangement before receiving order or assignment has been made, etc.
Hugh Guthrie: This is an attempt
to supply what was a real defect in the Bankruptcy Act passed two sessions ago. It provides entirely for proceedings which in Great Britain would take place under the Deeds of Arrangement Act. It is in order to avoid bankruptcy and enable the creditors and the debtor to get together to make a composition, to grant an extension of credit, or to make an arrangement of the debtor's affairs. If at such meeting an arrangement to avoid bankruptcy is come to, all the proceedings to carry that arrangement into effect are set out dn the amendment proposed by section 11. That was an omission in the former Act.


Samuel William Jacobs: I notice that provision is made for the payment of reasonable costs to the trustee for his services. While I have no objection to the trustee receiving reasonable costs, I would point out that in the present Act the costs are fixed at a certain figure, five per cent.


Hugh Guthrie: This is more in the nature of a private arrangement before any act of bankruptcy; in the other case we fixed the costs where there was an act of bankruptcy. It is hardly the same.


Samuel William Jacobs: In subsection 3d I notice that sufficient proof of a debt due to the creditor can be made by cable or telegraphic communication. It seems to me that opens
the door to some considerable abuse. Is the proof thus submitted to be supplemented by formal proof later?


Hugh Guthrie: We could put in the words "shall for the purposes of the said meeting". I do not want to make it too difficult before acts of bankruptcy. The creditor has to prove claims to enter into this arrangement. The desire was to simplify it as much as possible.


Samuel William Jacobs: 
Hugh Guthrie: I would move to add after the word "Act" on the last line of the page the words "for the purposes of such meeting".


Samuel William Jacobs: But suppose there is no further meeting? Suppose the creditors agree to accept the offer made and the only proof of a heavy debt is a mere cable communication. It seems to me that the trustee or person in charge ought to have some supplementary proof that this debt actually exists.


Hugh Guthrie: I think the ordinary provisions of the Act in regard to proof would apply. The cable communication would be strictly limited to the purposes of the meeting; it would not be proof of claim.


Mr. ARCHAMBAULT:: It would be
proof of claim for the purposes of the meeting, and if a cable communication is received from a party stating that he has a very large claim, that very large claim may override the other claims. If it is proved afterwards that the claim does not exist, the whole position will be changed.


Hugh Guthrie: Under the Bankruptcy Act as it now stands, I think such claims are allowed for the purposes of the meeting. The matter has all to go before the court for confirmation; there is nothing final about the meeting.


Samuel William Jacobs: But what is there in the Act which makes it incumbent upon the man who sends a cablegram to follow it up with a sworn claim?


Hugh Guthrie: Under the general provisions of the Act in regard to every claim, proof must be submitted by affidavit and be open to the contestation of the trustee.


Joseph Archambault: But this is an exception to the general rule.


Hugh Guthrie: No, we make the exception only so far as the purposes of the meeting are concerned.


Joseph Archambault: But after the vote has been taken it may be too late for redress.


Hugh Guthrie: That practice applies to all meetings of creditors in Ontario. The experience has not been that irregular or fraudulent claims are put in for the purposes of voting. I have attended many such meetings and have seen many telegraphic claims submitted. In this case everything is subject to inquiry and confirmation by the court.


Joseph Archambault: Does my hon.
friend mean to say that in Ontario claims can be put in without being supported by affidavit, even for the purposes of such meeting?


Hugh Guthrie: That has been the practice for the last thirty or forty years. I fancy that the majority of proved claims at a meeting' under the Assignments and Preferences Act in Ontario are supported by nothing but letter, telegram, or individual representation. -


Samuel William Jacobs: All I can say is that the people in Ontario are more honest than those in the other parts of the country.


Hugh Guthrie: But that is only for the purposes of the meeting; the claims have to be verified and proved as required by the Act.


Samuel William Jacobs: But it is not so stated, and it ought to be made perfectly clear. This cable or telegraphic communication is merely a temporary affair, and if when the claim is properly filed and sworn to it is found that it is wrong, there ought to be some proceedings to set aside what took place at that meeting or the decision there arrived at. I would ask the minister to allow this section to stand.


Hugh Guthrie: I have no objection.
Amendment stands.
Section stands.
On section 12-stay of proceedings pending consideration of proposal of composition, extension or scheme of arrangement.


Samuel William Jacobs: As regards sub-clause 2 of this clause, I cannot see why the secured creditor's rights should be stayed by order of the court. If his right is secured by

law, why should he not proceed to collect his debt forthwith, because the trustee can do no more than the secured creditor himself, that is, sell the property that belongs to the estate and upon which security has been given, and turn the proceeds over to the secured creditor? It is only incurring further costs to have the proceedings stayed and to proceed afterwards along the same line.


Hugh Guthrie: I do not think the
rights of secured creditors are prejudiced by this. The sub-clause reads:
Proceedings under this Act shall, subject to the rights of secured creditors to realize or otherwise deal with their securities stand stayed unless and until the court shall, on such terms as it may think just, otherwise order.
I think the court would take care of all rights under those circumstances.


Hyacinthe-Adélard Fortier: What becomes of the claim of a creditor if a composition is made between the creditors and the debtor? Is the debtor relieved of any further liability? If a composition is executed, has a creditor any further claim for the balance of what is due to him, or is his claim discharged on account of the acceptance of a composition?


Hugh Guthrie: If a composition or
agreement is made between debtor and creditors and confirmed by the court, such a composition would be upheld and the debtor released. But that is a matter of-agreement, and unless the proceeding laid down in the Act is complied with, no agreement would be made on the subject. In the main Act there is this further provision, section 13, sub-section 19:
Notwithstanding the acceptance and approval of a composition, extension or scheme, it shall not be binding on any creditor so far as regards a debt or liability from which, under the provisions of this Act, the debtor would not be discharged by an order of discharge in bankruptcy, unless the creditor assents,-
The creditor must agree.
-as, for the purposes solely of proceedings relating to a composition, extension or scheme he may, notwithstanding anything in this Act, so assent to such composition, extension or scheme.


Hyacinthe-Adélard Fortier: As I understand the
matter, a debtor is in the hands of a majority of creditors at the meeting. If a majority of creditors want to accept an offer made by the debtor of a composition at so much on the dollar, and if that proposition is accepted, there is only the proceeding by which they go before the court and have the composition sanctioned by

the court. As I understand the matter, a majority of the creditors at the meeting can decide whether a debtor can be relieved of any other responsibility by paying five or ten or twenty cents on the dollar. If that is the way in which the law operates, I do not approve it; I think that is a bad principle; the claims of creditors who are in the minority are sacred and they should not be barred by a majority of the creditors at the meeting.


Hugh Guthrie: That was the law
which we adopted after a great deal of consideration and discussion in this House when we passed the Bankruptcy Act. I am not sure whether the provision says a majority or a two-thirds majority of the creditors-I am having that point looked up-but the principle is that where a man has been ordinarily honest and made full disclosure and handed over his assets, a majority or a two-thirds majority, I am not sure which, of the creditors may release him and bind the other creditors, provided that this is done in such a way as to receive the approval of the court.


Hyacinthe-Adélard Fortier: If the creditors at the
meeting do not agree together, I understand that, under another of these amendments, a majority of the creditors have a right to override those who do not agree with them in order to secure, by a majority of the remaining creditors at a meeting held for the purpose, the acceptance of a proposition made by the debtor. There is danger in that.


Hugh Guthrie: I am not proposing to
amend the Act as it now stands in that regard. Those clauses of the Act which were passed by Parliament as regards the discharge of debtors in bankruptcy proceedings, are still in the Act; and we do not propose to change them by the present Bill.


Samuel William Jacobs: As the minister is aware, I have several amendments to the Act, and one of them deals with the question now before the committee. Might I ask the minister to allow this clause to stand?


Hugh Guthrie: I would be prepared
too discuss my hon. friend's amendments now.


Samuel William Jacobs: I should like to discuss
them with the minister before they come before the committee. That would be much better for everyone concerned. I think my amendment is a little clearer than the one now before the committee.


Hugh Guthrie: I should prefer not to
let any clauses stand if I can avoid that.


Samuel William Jacobs: I have not this amendment with me just now.
Section stands.
On section 13-additional security to be given by trustee.


Hugh Guthrie: The present section
provides that the registrar shall fix this security, and, of course, the registrar as a rule knows nothing about the estate. The proposed change, is to allow the creditors to fix the security, as set out in the proposed clause.


Samuel William Jacobs: As the minister knows,
the security to be given by the' trustee consists of a general security in the form of a bond for $15,000 to be given to the state. When a trustee takes possession of an individual's estate, he has to give further security to the registrar. The proposed amendment reads:
If the creditors require the trustee to provide further security the trustee shall, within thirty days after the making of the receiving order or authorized assignment.

be obliged to give further security. Who are the creditors? Creditors at a meeting called for that purpose? A majority of the creditors or individual creditors? I think it would be clearer if we said: "If the creditors at a meeting called for that purpose," or "if a majority of the creditors at a meeting called for that purpose."


Hugh Guthrie: To make that clear we could say "If the creditors present at any meeting."


Samuel William Jacobs: Or "a majority of the creditors present."


Hugh Guthrie: That would mean a majority. The creditors could only act by a majority.


Samuel William Jacobs: Would you not say "at a meeting called for that purpose?"


Hugh Guthrie: I would not call a special meeting for that purpose. The more meetings of creditors, the more expense to the estate. They could discuss that at any meeting, I think, that was called. I do not want to encumber the Bill any more than is necessary with provisions as to meetings or applications to court or anything of that kind.


Samuel William Jacobs: But there might be a hole-in-the-corner meeting.


Hugh Guthrie: There is only one way of calling a meeting under the Act. I think if we said "If a majority of the creditors present at any meeting" it would be clear enough.


Samuel William Jacobs: Duly called.


Hugh Guthrie: Yes, duly called. I move that clause 13 be amended by striking out the words "the creditor" in line 17 of page 6 of the Bill and substituting therefor the following words "a majority of the creditors present at any meeting duly called." Amendment agreed to.


Samuel William Jacobs: The last sentence in clause 13 does not seem to be quite what was intended. It says "the expense incident to the furnishing of such security may be charged by the trustee to the estate of the debtor." Why should the estate be ordered to pay that?


Hugh Guthrie: We threshed that out when the Bill was before the House. The theory was this: The trustee has to pay for $15,000 of security out of his own pocket, which in the case of the ordinary estate ought to be sufficient. The creditors have the power to increase that amount, and if they do increase it, it is supposed to be for the general benefit of those who are participating in the estate, and the estate might therefore well bear the cost. We have left that clause exactly as it was in the Bill.


Hyacinthe-Adélard Fortier: One difficulty is that the bankruptcy districts do not correspond with our judicial districts. In the province of Quebec, I understand there are only a few bankruptcy districts.


Mr. STEIN:: Only one.


Samuel William Jacobs: Only one bankruptcy
judge.


Charles Adolphe Stein: That is what the Minister of Justice stated at the beginning of the session.


Hyacinthe-Adélard Fortier: It would be more in accord with the principle of the Bill, I think, if there was an amendment providing for the creation of these districts.


Charles Adolphe Stein: This question of the districts came up at the beginning of the session, when the right hon. Minister of Justice (Mr. Doherty), the hon. member for George Etienne Cartier (Mr. Jacobs) and the hon. member for Dorchester (Mr. Cannon) made some remarks upon it. I think it was well understood after the statement of the Minister of Justice that

there are nine bankruptcy districts in the Dominion of Canada, each province forming a district. I would suggest that each judge who has charge of a judicial district in the province of Quebec, composed of two or three counties, should have full authority under this law, as well as Mr. Justice Panneton residing in Montreal. I think that would be of advantage to all parties concerned.


Charles Joseph Doherty: Would not the hon. gentleman think that in view of the comparatively recent legislation which has divided the province of Quebec into four judicial districts, wherein there are resident judges, the case would be met by the province being so subdivided? Then you would have all the judges who are competent to sit in the different divisions resident in the respective divisions for the purposes of this Act. I understand that the Act provides that each province is a division, but that the Secretary of State may subdivide that division. If that were to be carried out, the question then would be, what would be the best subdivision to make in the province of Quebec, taking that province for example, and it occurred to me that perhaps a suitable subdivision would be to follow the subdivision which has created four districts wherein there are resident judges.


Charles Adolphe Stein: That would confine the subdivisions to the districts of Montreal, Quebec, Sherbrooke and Three Rivers. Under the new law the judges are supposed to reside in the district, and I respectfully submit that it would be a great deal more convenient to have the local judges, although they reside in Quebec, Montreal, Sherbrooke or Three Rivers, take charge of the administration of this law. Mr. Justice Panneton might administer the law in the district of Montreal, and the other judges in the districts outside the four principal districts under the new law. We have regular terms in our judicial district, and I believe the plan I have suggested would be more convenient to all parties concerned.


Charles Joseph Doherty: The suggestion I make would only assimilate the insolvency business to all the other business. When the law, as I understand it, gets fully into operation, you will have no judges resident anywhere except in these four districts, and when it is completely carried out by the disappearance of judges who are attached to particular districts, there will be no judges attached to any particular

district. Therefore all the districts except the four mentioned will depend for their judicial service on judges coming from these four places. Why should it be more objectionable that judges coming from those four different places should deal with insolvency matters in those four different subdivisions of the province than that they should deal with all the business that has to be dealt with in the respective districts?


Charles Adolphe Stein: My objection is this. Take, for instance, the district of Kamouraska, the chief place in which is Riviere du Loup, in the county of Temiscouata. When the law is completely in force in the province of Quebec, when a judge comes to hear the civil cases, if he is not a judge appointed to hear- cases under the Bankruptcy Act, any bankruptcy cases there may be will have to be postponed till another term. This would delay matters unnecessarily, and I would suggest therefore that you give to all judges of the province of Quebec jurisdiction to hear cases under this law.


Charles Joseph Doherty: No doubt the suggestion is worthy of consideration, but it seems to me that if it were adopted the whole principle ought to be changed and all judges of all the provinces ought to be given the same power: There is no special importance, in the case of Quebec, that I can see, to be attached to the suggestion, although it might possibly have been wiser to make it a function of any judge to hear these cases.


Mr. GORDON:: Why should it not be passible to vest in Ontario County Court judges, who sit in cities, the power to deal with these matters, instead of having it centralized in Toronto, where there has always been extreme congestion of litigation? It would mean a reduction in costs with a consequent saving to the estate. These judges are well qualified to deal with all these matters. County Court jurisdiction has now been extended in Ontario, so that these courts may deal with matters that formerly came within the jurisdiction of the High Court. It seems to me that this is a suggestion that might well be considered with a view to economy to all concerned.


Mr. CANNON:: The right hon. gentleman who is at the head of the Department of Justice (Mr. Doherty), has stated that in the province of Quebec there are four divisions wherein judges reside. This is
true. Recently two judicial appointments were made, one judge having been appointed for the district of Chicoutimi and another judge for the district of Beauce. Why should not these judges, who have special districts assigned to them, be given, besides the civil jurisdiction which they have, further jurisdiction under the Bankruptcy Act?


Charles Joseph Doherty: I intervened in this
matter only in so far as this particular question affecting Quebec is concerned. The Bill is in the hands of my colleague, the acting Solicitor General (Mr. Guthrie).
I understand the situation in Quebec to be that, at the time the appointments to which the hon. gentleman refers were made, there was statutory provision that there must be a judge attached to each one of those districts and those judges were appointed and so attached. While I cannot now recall the details, I do understand that there has been passed, or, at all events, is in contemplation, according as vacancies occur in the judicial districts to which judges are specifically attached, provision that thereafter, in filling all places, judges shall be appointed simply as judges at large.


Lucien Cannon: For the whole province, or for the four divisions?


Charles Joseph Doherty: Yes, for the four sections. If I am correct in that regard, then the attaching of a judge for general purposes to a specific district is a purely transitory matter. I may say that in the appointments referred to these judges are attached to these particular districts for so long as the provincial law shall require that they be so attached; so that, if the provincial law should now be altered, they would cease to be attached to the particular districts and would become judges at large. That, of course, modifies the situation with regard to the administration of justice generally, and under those conditions it might be very inconvenient that a judge not particularly attached to a district should be charged with administering the Bankruptcy Act in that district. It was from that point of view that I thought that all purposes might be met if the judge from one of these four centres were appointed. It would be as easy for that particular one to go to outlying districts where there were bankruptcy matters to be considered as for some other judge to go to those districts.


Lucien Cannon: I understand that Judge Panneton has been appointed for the whole

province of Quebec. Why should we not have a clause providing that a judge of the Superior Court may administer this law, so that whoever happens to be in the district at the time will have jurisdiction to do so?


Rodolphe Lemieux: What is the objection to haying judges of the various districts administer the law? What is the purpose in having only one judge?


Hugh Guthrie: I do not know why the Act was so drawn, but I remember that the committee that dealt with the Bill was strongly of the opinion that we should concentrate as far as possible and centralize for the purpose of uniformity, at all events, in the early stages of the administration of the Act. While this discussion may be useful, may I point out that we are dealing with the section in regard to security of trustees. Now, I am not familiar with the situation in the province of Quebec, but I know that the clause with reference to the jurisdiction of judges was under special consideration, and not only the committee, but the House was unanimous in the adoption of the section as it is drawn. The Act has been in force only eight months, and from the reports I have received, it is operating fairly well. If it were given another year or two we might be better able to judge then as to what amendments were necessary. In regard to judicial districts, there is power in the Act now to fix as many judicial districts as the Government may see fit to fix. The Governor in Council fixes the judicial districts, and if some bankruptcy districts should be set aside in the province of Quebec, the necessary legislative machinery is contained in the Act now to deal with the matter.


Rodolphe Lemieux: As a matter of fact, does this work take up the whole of the time of Mr. Justice Panneton? I have no objection to Mr. Justice Panneton, who is an eminent jurist and an able judge, but I thought it was hardly right to cast on his shoulders the whole administration of the Act for the province of Quebec. However, if it suits the litigants in my province, I have nothing more to say, but I cannot understand why the judge in each district is not vested with jurisdiction under this Act.


Samuel William Jacobs: I may say, in answer to my hon. friend (Mr. Lemieux),-that Mr. Justice Panneton is not only able to attend to all bankruptcy business in Quebec but is also able to give time to the regular duties of the Superior Bench. The House will remember that the object of having one 
judge deal with bankruptcy matters to the exclusion of all others in each province was to give that judge an opportunity of familiarizing himself with the entire field of the law of bankruptcy. We thought that if one judge alone were to give his attention to this sole matter, in time he would become fairly familiar with the Act and in that way we thought the Act would work very much better than if we had seventeen or eighteen judges tinkering at it from time to time. At present there are nine judges, one for each province, who deal with the bankruptcy law of Canada, and if they keep on in that way, without molestation or interference by the Government, and without any tinkering with the Act, in time we shall have a fairly respectable body of jurisprudence which will be of some utility to people who are interested in bankruptcy matters. I for one would strongly oppose giving each judge of the High Court in the different provinces of Canada power to deal with bankruptcy questions. If we are to do that it is going to make this Act entirely nugatory and of no effect, and it will be only a question of a very short time when this Act will have to be repealed as the Acts of 1865 and 1874 were.


Charles Adolphe Stein: If such a contention should prevail, the Government would be bound to appoint a judge for the interpretation and enforcement of each law that is enacted by this Parliament, in order to get uniformity.


Georges Henri Boivin: This discussion on the division of districts is absolutely out of order on this clause. We have wandered away from the subject matter of the clause and I must ask the committee to return to it.


[Stage Direction]
Section agreed to.
On section 14-new trustee may be substituted.
Samuel William Jacobs: What change has been made here?


Hugh Guthrie: The object of changing this is purely to clarify it. There has been some objection to the present clause which reads as follows:
A majority in number of the creditors who hold half or more in amount of the proved debts of twenty-five dollars or upwards may, at their discretion, at any meeting of creditors, substitute any other authorized trustee acting for or within the same bankruptcy district for the trustee named in the receiving order or to whom an authorized assignment has been made.
The new section is to qualify the meaning of that, and I think it is much clearer,

Creditors constituting a majority in number of those who have proved debts of twenty-five dollars or upwards and holding half or more in amount of the proved debts of twenty-five dollars or upwards may, at their discretion, etc.


Hyacinthe-Adélard Fortier: In my opinion the
trustee, unless he is sick, or becomes dishonest or incapable of acting, should remain in that position until the matter is wound up.


Hugh Guthrie: No, I do not agree with that.
. Mr. FORTIER: I do not see that this change is justified in any way. I do not think it is wise to change the trustee even if the majority of the creditors wish to do so. I see great objection to it.


Hugh Guthrie: My answer to that
would be that the creditors are the ones chiefly interested in the estate. Their interest is to get every dollar out of it if they can, and if, unfortunately, they have a trustee who is dilatory or careless, or is not an up-to-date business man, in the handling of the assets they may be very seriously prejudiced. The creditors are the ones who have the right to say as it is their interests he is looking after. Now it is provided that a majority of creditors representing a majority of the debts may change the trustee at their pleasure.


Hyacinthe-Adélard Fortier: Without the intervention of the court?


Hugh Guthrie: Yes, it says at any time. Mr. FORTIER: The matter is entirely disposed of by a majority of the creditors.


Hugh Guthrie: The creditors are
supreme in the matter.


Samuel William Jacobs: Surely the court ought to have something to say in the matter of the change of a trustee? Supposing some of the creditors find after a trustee has been appointed that he has red hair and they do not like a man with red hair, can they out of pure caprice change this red-headed trustee for a man with black hair or no hair at all? Costs would be incurred by this change and the poor estate would have to bear them all in the end. It seems to me the judicial authority ought to interfere, and. some reason ought to be assigned why the change should be made. I would be perfectly ready to allow this to go through if some change were made whereby the court would have to become a party to it and authorize the change.


Hugh Guthrie: Oh, no. I think my hon. friend is contending for a principle that is absolutely wrong. The creditors
are to control and the trustee is trustee for the creditors.


Samuel William Jacobs: Also for the debtor.


Hugh Guthrie: More so for the
creditors. If the debtor is bankrupt or insolvent the trustee is trustee for the creditors. I think in the history of all bankruptcy legislation-in England, in the provinces undeT the provincial acts, and in the United States-the idea is to give the creditor absolute control and safeguard, so far as is possible, the rights of the debtor. Now all the trustees must be trustees who have been duly appointed and who have give given security. They are men of some standing in the first instance-they must be that before they are appointed. If the creditors say "We do not like our trustee A," why should they not have the right at any moment to put in B?


Samuel William Jacobs: They are appointed by
court.


Hugh Guthrie: None of them are.


Samuel William Jacobs: They were originally.


Hugh Guthrie: No, they are appointed by the Governor General in Council.


Samuel William Jacobs: I mean for the estate.


Hugh Guthrie: No, very often they
are appointed in the first instance by the debtor himself. He will pick a friend of his and make an assignment to his friend and the creditors may say "We don't want that man; we want another man." That has been the practice in all bankruptcy proceedings. Speaking of the province of Ontario, it has always been in our Assignment Act that the creditors shall have the selection or the removal of the trustee.


George Gordon: In cases where there is
only one trustee appointed in a particular district, is it possible to have another man appointed there who will be, you might say, competing with him?
Mr. GUTHRIE. There is no limitation at all to the number.


George Gordon: And any man who has
the qualifications and standing may get the position?


Hugh Guthrie: No. The manner in
which the Act has been applied, so far as regards the appointment of trustees is this. The administration of the Act is in the Department of the Secretary of State and I am not familiar with all the details of it-I have had nothing to do with it since the Act passed this House-but I believe

the requirement there is, first, that the man shall have some standing or qualifications for the position. The list has been confined, if not exclusively almost exclusively, to men who are chartered accountants, trust companies, or business men of large experience whose work has been in the nature of accounting or something of that kind. I do not think lawyers have been appointed in any instance.


Samuel William Jacobs: No, it is against the law to have them.


Hugh Guthrie: But there is no limitation as to number at all.


Mr. POWER:: Why does not the Civil Service Commission appoint them?


Hugh Guthrie: The Act provided they should be appointed by the Governor in Council.


Lawrence Geoffrey Power: More patronage.


Samuel William Jacobs: I have not the section of the Act just before me, but as I remember it the creditors appoint the trustee, but with the authority or consent of the court 7 that is to say, the court takes some part in the appointment of this trustee. I may be wrong and I would like to he corrected if I am.


Hugh Guthrie: If there is an application to the court on a receiving order, the court, of course, does issue the Order and the name of the trustee is in the order. But the experience of the Act jin the various provinces has been that only in one per cent of the cases has there been a receiving order; the rest have been the ordinary voluntary assignments and are ninety-nine cases out of a hundred. But if there is a receiving order, the court making the order nominates the trustee.


Samuel William Jacobs: If the court does name the trustee under the receiving order-


Hugh Guthrie: The statute says that the court shall have regard to the wishes of the creditors in the selection of the trustee.


Samuel William Jacobs: - If the court is a party to the appointment of the trustee, does not the minister think it is rather an anomaly that the trustee appointed by the court can be removed without the court being a party to his removal or the appointment of his successor?


Hugh Guthrie: No, because I think
there will have to be another 9 p.m. receiving order, and in that case the court would again have to 
name the trustee. But the Act says that the court shall pay heed to the wishes of the creditors. I think it would be a fatal mistake to give any one except the creditors, who are chiefly interested, the right to say who shall or shall not be the trustee.


Samuel William Jacobs: Under the present amendment the creditors, without giving any reason whatsoever, can remove the trustee and appoint another in his place.


Hugh Guthrie: They can appoint
another authorized trustee.


Samuel William Jacobs: I think we are making a mistake.


Hugh Guthrie: We made it a year ago after the gravest consideration.


[Stage Direction]
Section agreed to.
On section 16-trustee may apply to court for directions:
Hugh Guthrie: A mistake has been
made by the printer. In the last line but one there should be a comma after the word "of" and none after the word "justify."


Samuel William Jacobs: Is this not rather an extraordinary provision? By this, whenever the trustee wishes to have any advice relating to any matter affecting the administration of the estate of the bankrupt, instead of applying to the attorney of the estate he must apply to the court. It is not in accordance with the usual practice.


Hugh Guthrie: It was not in the original Act. The reason for it is this: Trustees, particularly of large estates, are often met with a very difficult situation upon which there is a difference of opinion between the creditors


Samuel William Jacobs: Let them go to their
attorneys.


Hugh Guthrie: And this is giving the ordinary right to the trustee to go to the court for directions and protect himself. This is put in expressly at the request of the Association of Chartered Accountants. They say occasions have arisen when there is practically a dilemma, and their only safe course where they are under heavy bond is to ask for the instructions of the court.


Samuel William Jacobs: But the duty of the court is to decide questions brought before it on motions or petitions. The proper parties who should be visited by the trustees are the attorneys of the estate; that is what they are there for. It seems to me we are cutting into the rights and prerog-

atives of the members of the bar by declaring that when trustees wish advice they shall go to the court.


Hugh Guthrie: No, they may go. In the province of Ontario we have statutory provisions which enable trustees to go to the court to seek direction in difficult situations. They can go to their lawyers too, and they do. Very often exceedingly difficult problems arise in regard to the interpretation of wills and trust deeds, and the lawyers immediately ask the court for advice. That is the power that trustees ask for in bankruptcy proceedings.


Samuel William Jacobs: Suppose the trustee goes to the lawyer and gets advice, and then goes to the court and gets different advice, what is he to do?


Hugh Guthrie: Go to another lawyer.


Samuel William Jacobs: It seems to me rather
extraordinary that a private individual should go to the court to give him advice. The court is not there for that purpose.


William Stevens Fielding: He cannot get there without a lawyer, can he?


Samuel William Jacobs: No.


Hugh Guthrie: They have this provision in all the English speaking provinces. Have they not got it in the province of Quebec?


George Gordon: It strikes me that to safeguard the estate and prevent numerous applications for advice on the part of some timid trustee, it might be well to add that a trustee may at any time apply to the court for instructions when authorized by resolution of, say, a majority in amount of the creditors who have proven their debts against the estate. I would suggest that for the minister's consideration. In the event of an interminable number of applications the proceedings would be fairly expensive, and I think the trustee should not be given a free hand as in some cases he may abuse his trust.


Hugh Guthrie: I am informed that the object of the section is to get around that difficulty of a majority of the creditors. Such a majority sometimes asks trustees to do what they should not do, and this section is to guard the trustees against that contingency.


George Gordon: They would suffer the loss themselves.


Hugh Guthrie: There would be no loss because the costs come out of the five per cent allowance.


George Gordon: But suppose a case
where creditors authorized the trustee to take a certain course of action in a sale of property, which results in a less amount than might have been received, then the creditors would suffer the loss and the trustee would not be responsible for the mistaken action he had taken. But if they have authority to authorize him to go to the court for certain purposes, then my suggestion would prevent numerous applications that might be made by some timid trustee who perhaps was friendly to the solicitor of the estate and was desirous of giving him a fairly large bill of costs.


Hugh Guthrie: It would not affect the solicitors because their costs are limited to a certain amount.


George Gordon: Yes.


Hugh Guthrie: I think this is in cases of difficulty where the creditors by a majority direct the trustee to take a certain line of action and he is doubtful as to its legality.


Samuel William Jacobs: What are lawyers for?


Hugh Guthrie: Lawyers are sometimes doubtful themselves. That is the purpose of the Trustees' Relief Act, which enables an honest trustee to go to the court for advice and protection.


Samuel William Jacobs: Let us take a concrete case. Suppose the trustee wishes to prosecute the bankrupt for some fraud, the only court before which the case can come is the court over which this judge in bankruptcy is presiding, and before these proceedings are taken we will say that the trustee has received advice from the judge of what he should do. The judge would therefore be acting as an adviser in the first place, and then he would be sitting as a judge to decide that his own advice Was good. That must appeal to the minister as being somewhat anomalous.


Hugh Guthrie: A prosecution for fraud is not under this Act, it is under the Criminal Code.


Samuel William Jacobs: But in our province the judge inquires into all these matters as an examining magistrate and he sends the bankrupt up for trial. When the acting Solicitor General drafted this section he must have been doing it in his quality as Minister of Militia, because he rode roughshod over our laws. Certainly it is something that I strongly object to, and I would move that the clause be struck out.


Hugh Guthrie: What clause?


Samuel William Jacobs: The clause now under discussion, 16, adding subsection (d) to section 18 of the Bankruptcy Act.


Georges Henri Boivin: The motion that a clause be struck out of a Bill is not in order, because it is an absolutely negative motion. There is a motion now before the committee that the clause do carry. The hon. member will, of course, have the right to vote against that motion.


Samuel William Jacobs: We have done it with great success during the last three or four years. The rule must be one which has been more honoured in the breach than in the observance.


Georges Henri Boivin: A motion that a clause be struck from a Bill has never been put to the committee since I have occupied the chair. Motions have been made to amend clauses by striking out subclauses from clauses but no motions have been made to strike out entire clauses from Bills.


Samuel William Jacobs: That is a distinction without a difference, in my mind.
Motion (Mr. Guthrie) carried on division: yeas, 33; nays, 22.
On section 18-permission limited to particular thing or class:


Hugh Guthrie: Section 20 deals with the powers exercisable by a trustee with permission of inspectors. The trustees themselves, or representatives of the trustee body, represented that there was sometimes a good deal of difficulty and inconvenience in obtaining the consent of inspectors to the particular acts enumerated in section 20. The section now provides that they may do certain things with the permission in writing of the inspectors, and it was represented that it would be much more convenient and more to the benefit of the estate if the provision for permission in writing was struck out. The English law from which this section was originally taken provides for the consent in writing. We refused to grant that amendment, but we thought it (would clarify subsection 2 if we repealed it and re-enacted it in the manner in which it appears in the Bill. The clause in the Act reads:
The permission given for the purposes of this section shall not he a general permission to do all or any of the above mentioned things but shall only be a permission to do any particular thing or things for which permission is sought in the specified case or cases.

The new section will be:
The permission given for the purposes of this section shall not be a general permission to do all or any of the above mentioned things but shall only be a permission to do the particular thing or things or olass of thing or things which the written permission specifies.
Under the original Act a separate permission had to be given for each of the particular acts enumerated in the paragraphs (a), (b), (c), (d), (e), (f), (g), (h), (i), and (j). That was said to be very inconvenient. The proposal is that one single consent enumerating these will suffice for the various things desired, that is, that one consent or one permission may be given to do the particular thing or things or class of thing or things.


[Stage Direction]
Section agreed to.
On section 21-removal of goods; bank deposits:
Hugh Guthrie: I am told that the word "permission" is the one that should have been used in the first instance; there is "some technical distinction between "permission" and "consent." The latter, I believe has some ex post facto operation that the word "permission" does not have. The word in the English Act is "permission."


Samuel William Jacobs: What is the original section?


Hugh Guthrie: It reads:
No property of an estate of a bankrupt or of an authorized assignor shall be removed out of the province where such property was at the date when any receiving order or authorized assignment was made, without the consent in writing of the inspectors-
It will now read "permission in writing."


[Stage Direction]
Section agreed to.
On section 22-trustee	carrying on
business of debtor may apply to court for sale of property by tender if creditors refuse or neglect to repay advances.
Lucien Cannon: Who controls this expenditure by the trustees?


Hugh Guthrie: The creditors do, and the creditors must authorize the trustee to do any acts contemplated in section 27 of the present Act or in the proposed amendment. The trouble occurs, particularly in large estates where heavy expenditures are required, and where the trustee is directed, we will say, to continue the business of a creditor under section 27. In doing so, he incurs obligations, and in many cases trustees have themselves made considerable advances. The difficulty then

is to get the money back. This section is not new to our law; these provisions are taken from the clauses in our Winding-up Act which makes similar provisions; but for some reason or another they were omitted when the Bankruptcy Act was first passed. This is to indemnify the trustee in respect of money advanced by him or for obligations which he has assumed for the benefit of the estate.
Mr. DuTREMBLAY:	For money advanced under instructions of the creditors only?


Hugh Guthrie: That is all,
Mr. DuTREMBLAY: Does the minister not think that it would be advisable to have a certain delay of, say three or four months, before a trustee could sell a property, so as to give the creditors time to reimburse the trustee for certain expenses such as city taxes and so on? In certain cases, valuable property could pass into the hands of a trustee and a creditor would lose all recourse as the property would be sold to reimburse the trustee. A business might be so conducted by the trustee that a creditor might not see what was going on, and the creditor might be brought slowly to bankruptcy in his own business. The minister should see that all the rights of creditors are very carefully safeguarded in this matter.


Hugh Guthrie: So far as my knowledge goes, this is a clause that has never opened the door to any abuse under the Winding-Up Act, but it takes a considerable time before a trustee can realize under the provisions of this clause. In the first place, if he wants his money back, he has to make a ten days' demand; in the second place, he has to make an application to the court; and in the third place, the estate will have to be advertised for thirty days. Then tenders are opened and a decision is come to. There would be two or three months' delay in any event, and I do not think there could be any hardship on the part of creditors.


Samuel William Jacobs: I notice that we are
taking precautions to safeguard the rights of trustees. Take the case where a bank has made advances to a trustee, that is, in his quality of trustee. Does the minister not think that the bank or any person who makes such advance or advances, should be put in the same position as the trustee?


Hugh Guthrie: I think the bank will
take care of itself.


George Gordon: In paragraph (d), there is this provision:
After such notice to the debtor and the creditors as to it may seem proper, permit the trustee

, And so forth. Many of those creditors may be out of the jurisdiction of the court. There should be some definite statutory provision that, in a clause as drastic as this, notice should be given which might reach such creditors through the mail or ultimately reach them by personal service, preferably through the mails, because that would be cheaper. Advertising in the Gazette does not reach the ordinary creditor. Many creditors may be in different parts of the province, and an advertisement in a Toronto paper might not reach creditors in other parts of Ontario. The provision might be extended a little in order to protect the creditors.


Hugh Guthrie: That difficulty must
have been present in the minds of the draftsmen of the section in the Winding-up Act, because it * leaves the matter entirely to the judgment and discretion of the court-such as to the court may seem proper-and I think the court would be careful to protect the rights- of creditors in the way of notice.


George Gordon: I do not think it would.


Lucien Cannon: I do not know how
these laws concerning liquidation work in the other provinces, but I know how they work in my province. The net result of most liquidations is that the liquidator has a certain amount of costs, very high as a rule; the two lawyers have also costs, and the creditors, when they look at the dividends, have nothing at all. That is the common experience throughout my province. This clause simply says that if the costs or expenses incurred by the liquidator during the liquidation are so high that nobody wishes to pay them, the liquidator can take over the property and pay himself. It is a very dangerous law. These liquidators are practically under no observation. Who watches them? The creditors, as a rule, especially When the company in liquidation is a company of importance, are business men who have to attend to their businesses, and the liquidators are left to attend to the winding-up of the business. If the liquidators pile on the costs and expenditures, they can take advantage of this clause and take over the property. I do not know how the law works in the other provinces; but in my province it does not work in a very

satisfactory manner, and by this clause we are giving to the liquidators more power than they have already and most business people think that they have too much already.


George Gordon: The situation in Ontario is worse.


[Stage Direction]
Section agreed to.
Hugh Guthrie: There is no change in
this section except that we have struck out the words "to any other person" in the second line of the old section. The old section read, "Where a person engaged in any trade or business makes an assignment to any other person." These words were not necessary, and it was said by one judge that they might exclude a trust company, that the definition of the word "person" as it was in the original Act would not be broad enough to include a trust company, and he suggested that the words "to any other person" be struck out. They are not necessary, and I agree that they should come out. It has been deemed proper to reprint the whole section so that a person reading the new section would not have to have two statutes before him to see what was meant.


Mr. CRONYN:: Notwithstanding the
small change that has been made, I would like to call attention to the effect of this section, and no doubt the effect of the section as it was originally passed. Starting at line 21 the section reads "the assignment of book debts shall be void"-meaning a general assignment, as is plain from the closing paragraph of the section; then going down to line 25 "unless there has been compliance with the provisions of any statute which now is or hereafter may be in force in the province wherein such person resides or is engaged in said trade or business as to registration, notice and publication of such assignments."
I understand that in the province of Quebec, and perhaps in the majority of the provinces of Canada, there are statutory provisions which can be followed as to registration, notice and publication, and that therefore the lender, be he banker or any other man with capital, can protect himself under the provisions of these statutes; but in the province of Ontario, if I am right, there is no provision of that kind, and a general assignment of book debts cannot be registered under any provincial statute; so that the effect of this clause in that province is that a general assignment of book debts is void. That perhaps is a

good condition, or it may perhaps be a poor one. The effect, I think, will be that banking credits will be restricted to borrowers because of the insecurity offered to the bank in the case of an assignment. I ask leave to read a portion of a letter I have received from a well-known chartered accountant in Toronto, whose experience in these matters is perhaps as wide as that of anybody else in the Dominion. After discussing the clause, he says:
To my mind it will be exceedingly unfortunate if the section should be continued in this form, particularly in the present uncertain times when credit is difficult enough to obtain under any circumstances and many businesses are embarrassed with deflation. If the section be so continued it will simply mean that credit to wholesale grocers, boot and shoe men, dry goods and other jobbers and distributors will be limited to greater or lesser extent. The idea has seemed to prevail that it is the banks who are moving to have the section deleted, but I do not understand that that is the case, for the attitude which the banks take is that they are quite prepared to lend money when it is safe to do so and they can get proper security. If they cannot get security, then they cannot make the loans. It will, therefore, mean that the responsibility will rest upon the Government, of passing legislation which has the effect of impairing the liability of such concerns to get necessary credit. In this view it does seem to me that the condition of affairs should not be looked at from a narrow standpoint, but I feel that in the general interests of the community the section should either be deleted or amended so that assignments of accounts can be given as the basis -of banking accommodation.
I am not here to speak on behalf of the banks. I am not interested in any bank to the extent of a single halfpenny. I run a rival institution to a bank, an institution that does not deal in this class of thing at all, but I have some knowledge of this gentleman, I know his experience, and I thought the least I could do was to let his views be known to the committee.


Hugh Guthrie: When this clause as framed in the original Act was before'the Special Committee, I doubt if any other clause received the same amount of attention and discussion. The question was as to the right of banks to take secret liens unknown to other creditors. It was contended before that committee, in the first place, that section 88 of the Bank Act should not be allowed to prevail in the case of bankruptcy. Section 88 of the Bank Act is the section which permits banks to take warehouse receipts, which are a form of secret security unknown to the general trading public. In the event of subsequent assignment or bankruptcy it very often happens that under section 88,

the bank under its warehouse or secret lien gets practically the whole estate.
The next question argued at length before the committee was the question of general assignment of book debts, that is, an assignment of all present and future book debts. It became an established practice in commercial life to recognize the validity of such commercial assignments. Time after time in my own experience in the province of Ontario, where insolvency proceedings took place, it would be found that some selected creditor had secretly obtained an assignment of book debts, and it was held under the Ontario law as it then existed that book debts did not pass to the assignee under the general assignment. This one creditor was preferred to all the others, and it very often happened that the book debts were the most valuable part of the estate.
The committee heard representatives of the Bankers' Association on this clause, of the Wholesale and Retail Merchants' Associations, and of other associations. Upon this particular clause the committee was unanimous, and I think the House of Commons was also unanimous when the question came before it. We were supposed to draft and enact a clause which would prevent persons, including banks, from taking a secret assignment of book debts present and future, but it was argued that in one or two provinces of Canada such assignments had been recognized by the statutes of the province, which provided that such assignments were valid if they were registered, if notice thereof was given to the public. The committee thought that that was a reasonable provision. Consequently, in the section we drew in the Bankruptcy Act we provided that if the person seeking to have an assignment of present and future book debts complied with the provincial requirements as to registration and notice, that would be sufficient in that province to protect the public and the transaction should be held to be valid, but throughout the rest of Canada where there was no such provision for registration and notice, such general assignment of book debts should not be permitted to prevail against the trustee in bankruptcy. That was the unanimous view of the committee at that time. 1 That is what we thought we had done when we enacted the section under consideration now. Several representatives of the Bankers' Association have interviewed me recently in regard to this clause. They complain that the clause is somewhat doubtful, and several very elaborate legal
opinions have been submitted to me by very eminent counsel, but the most that 1 could gather from the various opinions was that there might be an element of doubt as to the bank's right to take a general assignment of book debts. I said that if there was doubt about the matter, the section should clear it up, and that plain and definite language should be employed if the language at present were at all doubtful. I think that the opinion of the House to-day would be as it was two years ago, that such assignments should not be permitted. However, as the Act has only had eight months of operation, and as there has yet been no judicial decision upon the section as it stands, a case not yet having arisen before the courts, I thought it would be just as well to allow the section to stand in order to see what could and could not be done under it. I am satisfied that our intention, by the language we used, was to prevent banks or other persons from taking general assignments of book debts which were in the nature of secret securities.
Mr. DuTREMBLAY: Is an assignment of a debt or claim on a mortgage to a third party, good if made thirty days before a man becomes insolvent, or does the debt or claim pass to the assignee? In the province of Quebec there is a law which provides that a transfer is good if made in good faith thirty days before a man becomes insolvent. As I understand this section that provincial law will be overridden. What I want to know is whether a transfer of a claim or mortgage made thirty days previous to bankruptcy in the province of Quebec will be good?


Hugh Guthrie: I do not know that I was able closely to follow my hon. friend, but I think he has asked a question which involves very difficult sections of our Bankruptcy Act, sections 29, 30, 31 and 32, in regard to preference and preferential payments. The section under consideration now involves only the single question of assignments of book debts, and there is no limitation of thirty days under that section. The question which my hon. friend asked, if I understood him rightly, does not arise under this section. I think section 29 of the Bankruptcy Act would apply to his question. However, the question is one that requires a good deal of legal consideration, and if the hon. gentleman would ask my hon. friend from George Etienne Cartier (Mr. Jacobs), that hon.



REVISED EDITION. COMMONS

[Stage Direction]
member could tell him, as readily as I could, the law on the point.
Mr. DuTREMBLAY: I think the minister should attempt to answer the question now. According to this section, a transfer of book debts in Quebec, notwithstanding the provincial law, will not be good, even though it is made thirty days before bankruptcy.
Hugh Guthrie: I thought you said mortgage.
Mr. DuTREMBLAY:	Well, the law
would apply to that too. Under the law of Quebec any transfer of goods, money, etc., made thirty days before bankruptcy, holds good. Will that law be respected under this paragraph?


Hugh Guthrie: This paragraph will
have no application whatever to that; it deals only with general assignment of book debts. This section does not affect the assignment of specific debts. In Quebec or Ontario you can still make an assignment to a bank or any other person of a specific book debt, which is perfectly good; this refers only to general assignments of present and future book debts.


Lucien Cannon: In Quebec we have certain provisions in the code of civil procedure regulating what we call the abandonment of property; that is, a debtor abandons the whole of his property to his creditors. Suppose such an abandonment takes place under the provisions of the provincial code of civil procedure, and another creditor takes proceedings under this law; in what position would the debtor be? Does this federal law give to the liquidator who might be appointed under it the right to put aside altogether the provincial law and disregard the code of civil procedure of the province? I know my hon. friend the Solicitor General is not as familiar with our civil law as his neighbour the right hon. Minister of Justice (Mr. Doherty), and if he cannot answer this question perhaps the right hon. gentleman will do so. We shall be very grateful to him if he does. This clause involves an important question. This new bankruptcy law contains many sections that are in absolute opposition to our civil laws of Quebec. There has been a principle of constitutional procedure in Canada which has always been respect-
10 p.m. ed, and that is that, as regards civil rights, the provinces are the paramount authority. We have special provisions concerning civil rights, and

if I understand this clause rightly provincial legislation will be set aside. Have we, as a Federal Parliament, without changing our constitution, the right to pass such a law? I believe we have not.


Hugh Guthrie: There may be some
doulbt upon the question, but I thought that we cleared up all doubts when the Act was originally before the House. My hon. friend knows that among the subjects that come within the special jurisdiction of this Parliament un ler the British North America Act are the subjects of bankruptcy and insolvency, and I think in the year 1874, we passed an Insolvency Act applicable to the whole Dominion. The constitutionality of that Act was challenged in the courts and cases went to the Privy Council, where it was held that the Act was unconstitutional. That Act was repealed and for many years in Canada we had not any act passed by this Parliament in respect of bankruptcy and insolvency. During the interval many of the provinces passed Acts which were tantamount to insolvent legislation. We in the province of Ontario had an Act respecting assignments and preferences by insolvent persons. There were other Acts in other provinces to the same effect, and the Privy Council held, in respect of these Acts-because there were appeal? in respect of them -that whereas the Dominion Government had not occupied the field of legislation pertaining to bankruptcy and insolvency, the provincial legislation was good in the absence of Dominion legislation upon the same subject; but at the moment the Dom inion Parliament should occupy that field, and should pass an Act in respect of bankruptcy and insolvency, provincial legislation to that effect would be set aside. Now my contention, and I believe it is properly founded, is that we have in the present bankruptcy law occupied that particular field of legislation, and that all provincial legislation which seeks to contravene or oppose the Dominion legislation would be ultra vires of the province that passed it. I do not know of the Act referred to by my hon. friend whereby a debtor may abandon all his property to his creditors. I would only say, on general principles, that if the debtor so doing were, as a matter of fact, in insolvent circumstances at the time, that Act would be an Act of bankruptcy under our present law. If the debtor at the time of the abandonment, were a solvent person I do not think it would be considered an Act of bankruptcy. Generally speaking, I sup-

pose that abandonment, if it were an abandonment of all his property, would be equivalent to the old form of general abandonment under the Ontario Act, and that always was looked upon as an Act of insolvency in that province.


Lucien Cannon: The Acting Solicitor
General is perfectly right when he states that the British North America Act gives to the Federal Government jurisdiction concerning bankruptcy and insolvency, hut does not my hon. friend believe that this competency of the Federal Government extends to the procedure, or to the forms of law to be followed, whenever a person is insolvent or bankrupt, and does not go so far as to give to Parliament the authority to put aside the rights-the civil rights or the rights of ownership-which are altogether under provincial jurisdiction? For instance, in the province of Quebec we have certain provisions of our civil law concerning mortgages. Does my hon. friend contend that this clause of the British North America Act concerning bankruptcy and insolvency would give to this Parliament jurisdiction to set aside the special provisions of our legislature concerning mortgages or rights of property within our province? This Parliament, I think, has a perfect right to pass whatever law it deems fit to provide the means, or the method, or the mode, by which a person may be declared insolvent or bankrupt and by which that person's property may be distributed among his creditors, but I do not think that this Parliament could go beyond that and put aside the rights of property, or the civil rights, which are altogether invested in the provincial legislatures. I claim that in this Act there are several clauses which do so. As far as those clauses are concerned, is this law constitutional? I have great respect for my hon. friend's legal talent and knowledge, but I doubt very much whether his interpretation of the British North America Act is right when he extends it to such a point that the Federal Parliament would have a right to attack civil rights which are altogether left to the provincial legislature.


Mr. KEEFER:: Regarding what the
minister in charge of the Bill said respecting section 23, any one in practice knows that we frequently are confronted with an assignment of these unregistered book debts. The principle of it is just as the minister has said-vicious. They may be the chief asset of the estate. If it were
an assignment of chattel property that requires, under the law of Ontario, to be registered. I cannot speak for any other province than the province of Ontario, and I do know that it is working a hardship there that we have no such requirement as the registration of these assignments. I think it would be a very good thing if, in this Act, we made it the law that such assignments are void unless they comply with the Act, if there be such an Act, but if there be no Act that they are absolutely void. That will compel our province to pass an Act stating what should be the requirement. I would like to move an amendment to that effect that in line 30, after the word " assignment " the following words be added:

and if there be no such statute as to registration, notice and publication of such assignment, then such assignment shall be void.
That will make it perfectly clear. To-day, under that section, you could have a very nice lawsuit in the province of Ontario as to whether or not an assignment of book debts-where there is no requirement as to notice and registration-is, after the passing of this Act good or bad. Why put out legislation like that? We ought to make it specific one way or the other, and clearly it is to the interest of the public to have no more secret assignments; let them all be public.


John Allister Currie: Would the hon. gentleman include assignments to banks? I do not think it is fair to bring up in connection with this legislation what is in reality an amendment to the Bank Act.


Francis Henry Keefer: I am not talking about the Bank Act.


John Allister Currie: Well in the case of manufacturing concerns everybody knows very well there is a blanket assignment to the banks when they are borrowing thousands of dollars.


Francis Henry Keefer: This deals with book debts.


John Allister Currie: Well book debts are also included in an assignment to a bank.


Francis Henry Keefer: An assignment of book debts will not put them under this legislation. [DOT]


John Allister Currie: I think an assignment covers books debts.


Daniel Duncan McKenzie: Is it not rather dangerous to enter upon legislation of this kind offhand without giving the matter suffi-

cient consideration? The assignment of a book debt is recognized in common law. It is property and if it is absolutely assigned in writing and notice given to the man from whom the debt is due that completes the transfer of property to the assignee That is, if a man owes me a debt and I assign it to another man he notifies the debtor that the debt is due to him instead of to me. We put that assignment on record under our General Registration Act.


Francis Henry Keefer: Where?


Daniel Duncan McKenzie: In our province we would put it in the registry of deeds the same as a bill of sale.


Francis Henry Keefer: I 'know of no such provision in Ontario and that is the difficulty we are up against. I am only now speaking on behalf of Ontario, and we have no such provision as that. We have a provision in the Bill of Sales Act and the Chattel Mortgages Act requiring within ten days that the transaction be registered; also in the case of liens, sales of wagons and things like that where there is a lien held upon the property; but the public to-day may be entirely misled by a man's status and the fact be that everything in the way of book debts has been already assigned to some creditor, a bank or somebody else. I have often acted in a case where such an assignment has been made to one creditor making him, as the minister said, preferred to everybody. If that be the case make it public. Of course I am speaking only of Ontario. We are deficient in that respect, and this would force the province, at the request of the financial institutions, to pass an Act that would enable those transactions to be perfectly good upon complying with its terms.


Daniel Duncan McKenzie: I have not given any definite opinion about it at all. Under the old common law a debt or chose in action was not assignable, but an English statute -which is as old as the hills and is now regarded practically as common law- altered that condition of affairs. That law is in force in Canada to-day. But it strikes me that if the assignment is properly made and is put on record it is perfectly valid.


Francis Henry Keefer: That is the point. We have no place for registration.


Daniel Duncan McKenzie: If that is not the law, 1 would like to know what the law is.


Hugh Guthrie: That is not the question raised in this section.


Francis Henry Keefer: In Ontario an assignment, coupled with notice, completes the transfer of the debt. There is no requisite of registration. Indeed, there is no place I know of where it can be recorded.


Hugh Guthrie: A specific book debt can be assigned now to a bank or anybody else. This section does not interfere with but protects that. But let me make this suggestion. I understand there is some litigation on this section now. A representative of the Bankers' Association asked me if we would let the question stand and take what action might be deemed advisable next session in the light of the judicial decision on that litigation. Therefore I think it will be better to leave the section as it it, striking out the words "any person" as I moved in the first instance.


John Allister Currie: I do not know how we can legislate along the lines suggested by the hon. member for Port Arthur because I do not think we have any jurisdiction unless the person becomes insolvent.


Francis Henry Keefer: I am only speaking of general, not special debts.


Mr. MOW  AT@: It seems to me rather important that the point raised by the hon. member for Dorchester (Mr. Cannon) should not pass without some comment in that it creates a doubt as to the authority of Parliament to legislate in this regard. The cases referred to by the Solicitor General which went to the Privy Council turned beyond a shadow of doubt on the question whether the power of the Dominion was paramount over that of the provinces, and it was clearly determined that the Dominion law when once enacted took the place of any provincial law. In those very cases the point was brought up that such legislation by the Dominion would constitute interference with property and civil rights which the British North America Act places under the jurisdiction of the provinces, but it was held by the Privy Council that in view of the wording of the other subsection bankruptcy and insolvency came under the jurisdiction of the Dominion, which dispossessed the power of the provinces in so far as the Dominion might go. I am sorry that I cannot recall the names of those cases. It is natural that the provinces should be jealous of any interference with their laws, but the demand for this bankruptcy legislation has come from the provinces themselves, in order that it may be uniform, as on account of the great increase in commercial transactions

between the provinces it was thought unfair to the commercial community that they should be left in doubt as to the law. By having a uniform bankruptcy law throughout the Dominion a merchant in Winnipeg, for instance, selling to another merchant in Quebec would know what his rights were against his debtor without having to inquire how the provincial law affected him. It seems to me all-important that we should not throw any doubt upon a law demanded for the whole Dominion which will make transactions of sale and barter between the provinces much more easy and convenient, especially as we have a declaration by the highest court in the Empire that the Dominion law is paramount in this respect.


Lucien Cannon: As my hon. friend from Parkdale has just said, there are two classes of people in Canada who represent two opinions; the first class think that our Federal Parliament has an authority superior in all domains to the provincial legislatures, and the second class think that the provincial legislatures are just as powerful and have exactly the same potency of jurisdiction within their own limits as the Federal Parliament itself. There is another class of opinion among the legal men of this country; they wish to have uniformity in all legislation. The hon. member for Park-dale said that it would be a very good thing if a merchant in Manitoba when dealing with another merchant in Quebec knew that the law in the latter province was the same as that which existed in his own province. I do not wish to discuss whether this doctrine is good or bad, but I desire to say that in the province of Quebec the vast majority of the people and also the vast majority of members of the legal profession, although they wish to have as complete and perfect a set of Canadian laws as possible, also wish to see respected to the fullest extent the rights of the provincial legislatures under the British North America Act. And if there is one thing which not only the legal men of the province of Quebec but also the population of that province desire it is that the beautiful set of civil laws which have come to us from France, laws which were borrowed by France from Rome -and as we all know Mr. Chairman, the Romans were the greatest legislators in the world's history; they seem to have been natural lawyers-laws which were brought over by the first French pioneers, should remain to them unimpaired. As everybody knows those laws were codified later by Napoleon the First and are now
embodied in our civil code. The province of Quebec is just as proud of her civil code as of any other monument in her possession, and I think the provincial government will always do its very best to preserve intact those civil laws. As one of the representatives of the province of Quebec, and also as a lawyer from that province having some knowledge of her civil laws, I say it would be a great danger to our province if this Parliament was allowed to put aside the provisions of the British North America Act and to override our provincial laws concerning property rights. The member for Parkdale has quoted a decision of the Privy Council, the highest judicial authority in the Empire. But in many of the decisions of that body there is indicated a very strong tendency to strengthen the hands of the federal authority and to weaken those of the provincial authority. As has been stated by the member for Parkdale as well as by the Acting Solicitor General, it is true that bankruptcy and insolvency are subjects within the jurisdiction of the federal authority, but under no pretext or excuse whatsoever can the Federal Parliament put aside the rights of the Provincial Legislature with regard to civil rights and property. This law of bankruptcy is a great danger to the province of Quebec because it contains several clauses setting aside our civil law. The Minister of Justice is a learned jurist. He has been an ornament to the Quebec Bench; he upheld while on the bench those old civil laws of Quebec which he admires and loves, I am sure, as much as every other Quebec man does. The right hon. gentleman should use his influence with his colleague the Acting Solicitor General to see that none of the laws passed by this Parliament shall put aside the civil law of Quebec or of any other province and that due respect shall be given to the old principles guiding legislation by the Federal Parliament and the Provincial Legislature.


Hugh Guthrie: I cannot very well
agree to the amendment, for the reasons which I have stated. There are some cases now pending in the courts with regard to this section, and unless it is the very strong desire of the mover of the amendment and of the committee that it be changed, I should like the section to have operation until next session so that we may see what the courts have to say about it.
Mr. DuTREMBLAY:	Before passing
such an amendment a notification should be sent to the provinces, because in some of

the provinces there is no office where such registration could he made.


Hugh Guthrie: That has been done.
Amendment (Mr. Keefer) negatived, and section agreed to.
On section 25-when misrepresentation or fraud a defence for contributory to insolvent incorporation:


Hugh Guthrie: That omission was
purely accidental. It is in the Winding-up Act and it should have been in the Bankruptcy Act.


Daniel Duncan McKenzie: I do not quite see the force of this amendment. I think the rule is that any defence which is good against the assignor should be good against the assignee. If the man who made the assignment could not by reason of fraud succeed in getting this amount from the contributory, why is the right to that defence to disappear simply because there is an assignment? I would like to know upon what principle this right is being taken away?


Hugh Guthrie: Well, the provision was designed in order to do away with what would be the ordinary rule to which my hon. friend has referred. It has been on our statute book for a long time. It applies only, of course, to the case of corporations. The experience was that when a corporation got into financial difficulties, made an assignment or got into bankruptcy, it was very difficult to get in the unpaid calls on stock and the defence of fraud became very common. The defence of fraud is still permitted, provided that action to set aside the subscription is instituted before the assignment.


Samuel William Jacobs: But suppose the fraud
does not come to the attention of the plaintiff until after the assignment, is the defence taken away by this amendment?


Hugh Guthrie: Yes.


Samuel William Jacobs: Certainly that is most
unjust.


Hugh Guthrie: It has been a long time our law.


Samuel William Jacobs: Then it has been unjust a long time.


Hugh Guthrie: It remedied a very
great wrong, a gross abuse which had grown up. The experience was that in every case where a corporation went into insolvency, people who had not paid up their stock wanted to escape payment or to delay it. The defence of fraud and mis-

representation became common. To remedy that state of things, not only here, but in Great Britain, this clause was framed, and it has been for many years in our Winding-Up Act. I have never heard of any exception being taken to it.


Lucien Cannon: Supposing we say in
this case that this defence could not be set up if the debtor or the stock subscriber should set up that plea, say over six months after the fraud had been committed or the knowledge of such fraud had come to him. Supposing he had never heard about that fraud before, would he be denied altogether the right of setting up fraud or misrepresentation in the case?


Hugh Guthrie: The same provision
exists in the Winding-up Act.


Lucien Cannon: Even if it exists in one law, if the principle is unfair, why should we extend it throughout our legislation? After all, what do the liquidators represent? The liquidators in a way represent all the rights that a corporation may have. In one way, a liquidator might be what we might call the collector or representative of all the creditors, and he is nothing more. In the case of a corporation he represents simply the corporation itself. If I had a good defence to set up against a corporation, why should I not be permitted to set up that defence against the liquidator who represents nothing but the corporation?


Samuel William Jacobs: The minister ought to
consider very carefully the objections to this clause. Supposing, after all the books, papers and documents of a company come into the hands of a liquidator, the subscriber finds the grossest kind of fraud; surely he ought to be able to set that up when he is sued for the balance due on his stock.


Hugh Guthrie: This provision should certainly come out of the Winding-up Act, if my hon. friend's contention is good.


Samuel William Jacobs: Sufficient for the day is the evil thereof. Two wrongs do not make a right, and they never did.


Hugh Guthrie: It is quite immaterial to me what the committee does with this clause, but it has stood the test of time in the Winding-up Act without objection. So far as I am aware, no objection has been raised to it in this House for twenty years. Now we are trying to make the law uniform, so that it will apply under the

Bankruptcy Act just as it does under the Winding-up Act.


Daniel Duncan McKenzie: The minister must
remember that we are going to have thousands and thousands of cases under this legislation which is of general application throughout Canada from coast to coast, whereas, it is only here and there and on rare occasions that any proceedings are taken under the Winding-up Act. Even if this provision were in the Winding-up Act, we would come up against it only once in a while; whereas now, under this general law, we will come up against this provision ten times every day. If promoters of some kind of a company go around the country gathering up subscriptions and getting people to subscribe to the stock under fraudulent circumstances, and they deceive a man into signing his name to a subscription list or giving a note for a share or something like that, and they immediately make an assignment just for the purpose of getting clear under this provision, is it not too bad that they should be able to succeed by simply putting the whole thing under the Insolvency Act and thus shutting the man's mouth? He cannot say a word; he has to pay out his hard cash absolutely for nothing, and he is robbed. We are passing legislation which will help those who are unfair to him. If a transaction is right, above board proper and honest, the man who starts to collect a debt has nothing to fear if the debtor is worth it; but it is too bad that the debtor should be deprived of a good and sound defence if the transaction is not a proper one, simply because there is a transmission or passing over of a claim from one concern to another. We should be very careful abbut a provision of this kind.


Hugh Guthrie: We are taking great care in the matter by making the two Acts uniform. At the present time the Winding-up Act is in force, and corporations may be wound up under that Act in which this same provision appears. Corporations may be wound up under the Bankruptcy Act, but only by leave of the court. If the court gives leave to have them wound up under the Bankruptcy Act, surely the same general provision as regards unpaid stocks should prevail in both Acts. I am told that the experience under the old system was very bad. The rights of creditors were greatly prejudiced by fictitious defences, defences put in to gain time; delays were occasioned, and in order to remedy that improper and unfair condition to creditors,
to get rid of those delays, this provision was inserted in the Winding-up Act.


Samuel William Jacobs: The minister can see
how unjust this provision would be in certain cases. The courts are organized for the purpose of deciding these questions as between the parties.


Hugh Guthrie: I think it would be open to my hon. friend to say if application is made to the court to wind up a corporation under the Bankruptcy Act: "There is a more favourable provision under the Winding-up Act. Therefore, I want to get under the Winding-up Act, because under the Bankruptcy Act there is not this provision." Or, if he were acting for some holder of unpaid stock, he might take the reverse position and say:	"We want to
come under the Bankruptcy Act, because it allows defences which are not allowed under the Winding-up Act," and the court would decide.


Samuel William Jacobs: Assuming, for the sake of argument, that the same provision appears in the Winding-up Act, that is no reason why we should perpetuate it in this new Act which we are bringing into life. We will deal with the provision in the other Act in due course now that we know of it; but at present, while we have this provision formally before us, we ought not to enact it into legislation.


Hugh Guthrie: I do not want to strike it out. I am not the one who made the suggestion.


Samuel William Jacobs: Let the clause stand.


Hugh Guthrie: We will have to have a vote on it. I do not know that I can elaborate the matter any further; but as my hon. friend apparently wants to divide the committee on this clause, we had better have a little larger committee than we have at the present moment.


Samuel William Jacobs: I know my hon. friend has more members behind him than I have, and so he will be able to carry the clause.	r


Hugh Guthrie: Carried on division?


Samuel William Jacobs: Yes.


[Stage Direction]
Section agreed to, on division.
On section 26-adjustment of rights of contributories.
Hugh Guthrie: This is the adjustment of the rights of contributories. The old section provides:
The court shall, on the application of any contributary, adjust the rights of the contribu-

tories among themselves without the intervention of the trustee and without expense to the estate.
The section in this Bill provides:
The court may, on the application of any contributory, adjust the rights of the contributories among themselves, and,-
What follows is new-
-for the purpose of facilitating such adjustment may direct the trustee to interevene-
The other section was "without the intervention of the trustee."
-carry the proceedings, employ legal or other assistance and make such investigations, do such acts, and furnish such information as to the court may seem necessary or advisable.
The proposed amendment is consequential upon this one, and provides that the court may allow remuneration and expenses to the trustee from the contributories who are contestants, but not from the estate. The obj'ect of the two sections is that where disputes arise as between contributories the trustee may intervene, seek the judgment of the court, and have the rights of the contributories as between themselves settled, but without expense to the estate.


Samuel William Jacobs: It seems to be a sort of jug-handled arrangement. Why is it that the Acting Solicitor General is so anxious about the rights of the estate and trustee, and seems to ignore altogether the rights of others? If it is necessary to have litigation between the contributories and the estate through the trustee, why should the costs not be ordered to be paid to the contributories?


Hugh Guthrie: My hon. friend speaks about my being anxious about the rights of the estate and the trustee, and not about the rights of others. Now the courts cannot act in this case unless the contributories themselves call upon them to do so, and the trustee cannot go to the court until the contributory has applied. This is to settle disputes as between themselves without expense to the estate.


[Stage Direction]
Section agreed to.
On section 27-court may allow remuneration, expenses and costs as between contributories:
Lucien Cannon: Suppose the court refuses in this case to intervene. How will things be adjusted?


Hugh Guthrie: They will have to have recourse to the ordinary remedies according to the law of the land, and expensive litigation will ensue.


Lucien Cannon: If that is the case, why have these other sections at all? Why bother with them?


Hugh Guthrie: This is designed for a speedy and inexpensive settlement of disputes.	*


Samuel William Jacobs: Security is usually provided by some person not a resident within the province or country. I do not see why the court should insist upon the contributories giving security if they are resident in the province.


Hugh Guthrie: The contributories cannot be forced to come to court under this. They must be the parties themselves to go to court, and if they do, they come under the provisions of this section. If they do not desire to go to court, they need not. They can have recourse to the ordinary remedies and fight it out. There is nothing compulsory about this. It is only a method to afford quick and cheap relief.


[Stage Direction]
Section agreed to.
On section; 28-right of creditor to dividend:
Hugh Guthrie: Subsection 3 of section 37 reads:
Any creditor who has not proved his debt' before the declaration of any dividend or dividends shall be entitled-
We propose to add there the words "upon proof of such debt."


[Stage Direction]
Section agreed to.
On section 29-notice that if claim not proved within 30 days dividend or final dividend will be made:
Lucien Cannon: How can this section be
reconciled with the preceding one? The preceding one says they can always obtain payment providing they prove their claim, whereas this section provides that unless the creditor's claim is proved within a certain time, the trustee may proceed to make a dividend without regard to his claim.


Hugh Guthrie: With regard to dividends and the distribution of dividends, there are no less than nine sections, and the one I just read is only one showing what rights the creditor has in respect to making proof of bis claim. This is to hurry up distribution. In practice it has been found that creditors withheld proof of their claim until after notice of the final dividend, and this delayed the winding up of the estate to the great prejudice of every one concerned. This changes the present law to this effect, that the trustee

may at any time after the first meeting of creditors-he does not have to wait until after the final notice-give notice hy registered mail to every person of whose claim to be a creditor with a provable debt he has notice or knowledge.


Lucien Cannon: Under the first clause,
if there is no such notice sent, the creditor may be paid even after the dividend list has been prepared, hut under this clause the creditor has to prove his debt within thirty days after the mailing of the notice, or he will have no further claim.


Mr. MORPHY:: I do not think the section is very clear about thirty days being allowed. It might be only one day and the provision might be abused. At line 45 it is provided that:
If such person does not prove his debt within a time limited by the notice (which shall be within 30 days after the mailing' of the notice) the trustee will proceed to make a dividend or final dividend without regard to such person's claim.
I - do not think sudh powers should be given to any one; they might be abused.


Hugh Guthrie: The creditor has the
whole thirty days in which to -do it.


Hugh Boulton Morphy: I do not think that is so, from a reading of the section. The notice shall be "within thirty days"; it does not say at least thirty days. It might be fifteen days after the notice, or two days after, and yet it would he within the thirty. As it is, the section is open to abuse.


Hugh Guthrie: Under the circumstances I move that the section be amended by striking out, in the second last line, the words "a time limited by the notice which shall be within," also striking out the bracket after the word "notice" on page 11.


Hugh Boulton Morphy: What is meant by the words "prove his debt?"


Hugh Guthrie: Those words are in the Act.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 30-final dividend and division of estate.
Hugh Guthrie: This is just an elaboration of a former section as to what the trustee has to do.


Hugh Boulton Morphy: What is the meaning of "joint opinion?" Why not a majority?


Hugh Guthrie: This means that the trustee, on one hand, and the inspectors on the other, must agree.


Hugh Boulton Morphy: Must it be unanimous on the part of the inspectors?


Hugh Guthrie: This simply means
that the majority of the inspectors must agree with the trustee; it must be a joint opinion.


Hugh Boulton Morphy: It does not say that.


Hugh Guthrie: That is the meaning of the word "joint." I would as soon have the word "majority."


Mr. NESBITT:: A joint opinion would mean an agreement between a majority of the trustees and the receiver.


Hugh Guthrie: There is only one
trustee. The idea that was intended hy the language employed was that the trustee, acting as one party, and the inspectors, who act by a majority, must agree.


[Stage Direction]
Section agreed to.
On section 31-unpaid dividends paid to Receiver General.
Hugh Guthrie: Everything this section strikes out in the first fifteen lines of subsection 8 of section 37 of the Act is contained in section 30 which has been passed. There is no use of re-enacting it in subsection 8.


[Stage Direction]
Section agreed to.
On section 32-no action for dividend unless improperly refused.
Hugh Guthrie: The only change which is made is the insertion of the
11 p.m. word " improperly " " If the trustee improperly refuses to pay" the court .may order him to pay, etc.


Samuel William Jacobs: Take a case where a trustee, having received advice from a judge, refuses to pay. How can the judge afterwards order him to pay? Take the case we were discussing some time ago, where trustees received advice from the judge in relation to matters affecting the estate.


Hugh Guthrie: It would not be hbld then that the trustee had improperly refused to pay.


Samuel William Jacobs: Assuming that the word " improperly " is added, and the trustee refuses to pay, acting on the advice of the judge.


Hugh Guthrie: I do not think he would then be improperly refusing to pay.


Samuel William Jacobs: If the trustee, after being advised by the judge, is ordered by the

judge to pay, it would be a case of Caesar appealing to Caesar.


Hugh Guthrie: If the trustee gets the direction of the court, he must comply with it.


Lucien Cannon: The clause says that no action for dividends lies against the trustee. How will a man who has a claim for dividend enforce his claim if he has no action? How will he take his action?


Hugh Guthrie: The section provides
that if the trustee improperly refuses to pay any dividend the court may order him to pay it and also to pay out of his own money legal interest on the dividend for the time that it is withheld, and the costs of the application.


Lucien Cannon: I know, but if he has no action.


Hugh Guthrie: He would not need to bring an action.


Lucien Cannon: What is the meaning of the word "action"? The meaning of the word is "any legal process to enforce a claim."


Hugh Guthrie: No, I would not say
that is the meaning of the word "action" in my province.


Lucien Cannon: What is it?


Hugh Guthrie: A motion to the court to compel a trustee to do an act would not be called an action. In the province of Ontario all actions are commenced by writ of summons, but this is a summary application to the court.


Lucien Cannon: Would this clause mean that the man would not 'have an action against the trustee, but he might make a motion or petition before the court and ask to be paid?


Hugh Guthrie: He would just go to
the bankruptcy judge, that is all, and get an order from the judge.


Lucien Cannon: And make a motion
with respect to an application or petition. I think the word "action" in our courts means "any legal process adopted to enforce a claim whether by way of a summons or otherwise." Under this wording he would be debarred altogether.


Hugh Guthrie: I cannot understand
that. I think the clause is very clear. "No action shall be brought." That has quite a distinctive meaning in my mind, but it may not be so in my hon. friend's province. No action shall be brought but if the trustee

improperly refuses, the bankruptcy court may order him to pay.


Samuel William Jacobs: Certainly, you can not
get into any other court.


Hugh Guthrie: You cannot bring an
action before the court.


Samuel William Jacobs: I do not think the minister has quite answered my objection. Under the section 18 as amended, the authorized trustee may at any time apply to the courts for direction in any matter affecting the administration of the estate. If on the advice of the judge he improperly refuses to pay the dividend how is the bankruptcy judge afterwards to compel payment?


Georges Henri Boivin: Shall the clause
carry?


Samuel William Jacobs: No, we have had no
answer from the minister.


Hugh Guthrie: I did not hear the question, I was discussing another matter. Please repeat your question?


Samuel William Jacobs: Under section 18, as
amended by us to-night, the trustee may apply to the courts for direction in relation in all matters concerning the estate. We will suppose he has received instruction and advice from the bankruptcy judge with regard to the payment of a dividend or refusal to pay. If he improperly refuses to pay, how can the petitioner, or the creditor, apply to the judge who has already given advice, to the trustee not to pay?


Hugh Guthrie: Well it cannot be "improper" because whatever the trustee does, under the advice of the court, shall be his justification for so doing under the last two lines of section 16.


Samuel William Jacobs: When a judge advises it, it is not improper.


Hugh Guthrie: I think that is self-evident. But apart from that whatever directions the judge gives "shall bind, as well as justify, the subsequent consonant action of the trustee." That is pretty clear I think.


Samuel William Jacobs: The point I am trying to make is that the judge has to advise and at the same time has to decide the very same question. He is advising the trustee and then has to decide the question as between the trustee and the creditor.


Lucien Cannon: If I understand aright, the
wording of the clause is to avoid this situa-

tion: the Acting Solicitor General is adding the word "improperly" to the clause so that in case of prosecution the trustee would only have to say that he has not refused improperly because he was authorized to do so.


Hugh Guthrie: I think that is the reason for adding it.


Lucien Cannon: Is it fair?


Hugh Guthrie: I think it is eminently fair.


Edward Walter Nesbitt: I can easily appreciate that the trustee should be protected against actions which he is not liable for; but if he improperly refuses to pay a dividend, I think my hon. friend who has just spoken is correct when he asks what action could the creditor take if he refuses to carry out the judge's order.


Hugh Guthrie: Just apply to the court for an order to compel him.


Samuel William Jacobs: I suppose there is an
appeal? That is the only way out of the impasse.


Edward Walter Nesbitt: If he improperly refuses to carry out the judges order and no action lies, what other course is there to take?


Hugh Guthrie: The object of the section is to get away from actions, to stop them-


Edward Walter Nesbitt: Surely.


Hugh Guthrie: -and if the trustee improperly refuses the judge will order him to pay costs and damages. It is to expedite the thing and save expense.


Hugh Boulton Morphy: Here is an ex-parte
judgment without the person knowing anything about it. It seems to me the word "improperly" is put in the wrong place in the section-that is a thing that ought to be tried. This is a section that provides absolute jurisdiction in some judge without the other man being heard at all. It seems to me there ought to be some notice given before an exemplary remedy of that kind should be applied.


Hugh Guthrie: All applications and
motions under this Act are made in conformity with the provisions of the general rules which form a part of the Act. The general rules of practice provide for notice in every case.


Hugh Boulton Morphy: Should we not insert
after the word "may" the words "on motion after notice."


Hugh Guthrie: Those words are not necessary, the general rules provide for it.


Hugh Boulton Morphy: That may be the ease in some provinces but I do not know that it is the case in all of them.


[Stage Direction]
Section agreed to.
On section 33-remuneration of trustee.
Samuel William Jacobs: I understand that this
amends and repeals the section which declares the trustee is only to receive five per cent?


Hugh Guthrie: No that is not repealed.


Samuel William Jacobs: Well then we are providing for further remuneration to the trustee.


Hugh Guthrie: With respect to contests as between contributories, my hon. friend will remember that we provide in a previous section that the courts shall award costs to the trustee from the contributories but not from the estate. In the other case, it is in connection with the application of a bankrupt or authorized assignor for a discharge and the Act provides he must pay his own costs.


Samuel William Jacobs: Section 40 refers to remuneration to the trustee. '


Hugh Guthrie: Yes, but we are not interfering with that.


Lucien Cannon: The cases mentioned by the Acting Solicitor General are exceptional. The last sentence of the section says:
In the excepted cases the trustee's remuneration shall be fixed by the court.
In the two cases mentioned by the Acting Solicitor General the remuneration is fixed by the court and the general remuneration to the trustee will be fixed by the creditors.


Hugh Guthrie: That is right.


Lucien Cannon: So it leaves five per
cent.


Hugh Guthrie: No, five per cent is all that comes out of the estate under paragraph (a) and paragraph (b). The first is where there is a contest between the contributories and they pay the cost. The second is where there is an application by a bankrupt for a discharge from the court and the estate does not pay the cost.


William Stevens Fielding: If there were a probability of this Bill being disposed of in a few minutes I would not make the suggestion I am about to make. But it is now a quarter past eleven o'clock and I think we are

all anxious to get into better habits of sitting. I would therefore suggest to my hon. friend that he should let the committee rise and report progress. I am not desiring to delay his Bill, hut I am told it will occupy some considerable time.


Hugh Guthrie: If that is the general
desire of the committee well and good, but I thought probably it would be the desire of the committee to go ahead with the Bill and get rid of it.


Samuel William Jacobs: It is not the general
desire.


Hugh Guthrie: If the committee is
anxious to stop now I have no objection. My own wish, if it meets with the approval of the committee, would be to go ahead with the Bill. I do not think there is much contention about the rest of the measure.


William Stevens Fielding: Man proposes but-


Mr. MIDDLEBRO:: The section provides in effect that the remuneration shall be decided by "a majority of the creditors present". Should it not read "a majority of those creditors present"?


Hugh Guthrie: I do not quite catch the distinction.	[DOT]


William Sora Middlebro: As the section is drafted it might require a majority of all persons who have claims against the estate to be present, whereas what you mean is a majority of those creditors present.


Lucien Cannon: I think instead of using this form it would be far better English if it read "a majority of the creditors who are present".


Hugh Guthrie: I was going to move to amend it to read "a majority of the creditors who are present", but my adviser says that it is bad English.


Mr. McMASTER:: Surely it is not
suggested that the phrase "who are. present" is bad English?


Hugh Guthrie: I am told that the word "majority" is a collective noun, and therefore the expression "who are" is bad English.


William Sora Middlebro: Mr. Chairman, I
move that the word "the" in line 44 be struck out and the word "those" be inserted in lieu thereof.


Hugh Guthrie: The clause has been revised by very eminent counsel and I should not like to change the language employed unless I was very sure there was something wrong with it.


Lucien Cannon: If I understand my hon. friend correctly, his contention is that as the clause reads now all the creditors would have to be present?


William Sora Middlebro: A majority of all the creditors.


Lucien Cannon: If the majority of the creditors were not present this clause would not have application.


William Sora Middlebro: That is exactly the point. "The" creditors means all the creditors of the estate. It should read "a majority of those creditors present".


Andrew Ross McMaster: If you strike out the word "the" you make it quite plain.


William Sora Middlebro: Substitute "those".


Samuel William Jacobs: Strike out the word "the".


Hugh Guthrie: I move to amend clause 33 by striking out the word "the" before the word "creditors" in the 44th line.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 34-discharge of trustee, etc.:
Hugh Guthrie: This is an elaboration of the present section with very slight additions. There is no provision in the old section for a discharge where another trustee has been appointed and the account is satisfactory. There are provisions here for discharge when accounts are approved and two years have elapsed after the final dividend.
I move to amend subsection 5 by adding after the word "in" in line 33 the following words: "or done under authority of".


Samuel William Jacobs: The section says that it shall not be deemed to be a legal discharge of the trustee from the results of fraud or any fraudulent breach of trust. I suppose that is by the trustee, but it does not say so.


Hugh Guthrie: That is the only thing he would be liable for, is it not?


Samuel William Jacobs: It does not say so.


Hugh Guthrie: But that is the law.


[Stage Direction]
Amendment agreed to.
Hyacinthe-Adélard Fortier: In the case of a trustee replaced by a majority of the creditors how do you provide for payment of his fee? I understand that in a general way a trustee is paid certain fees in the discretion of the creditors, although sometimes the fees are fixed by the court. I do not think that in the case of a trustee being replaced by another trustee he should have to depend

for payment of his fees on the same creditors who have dismissed him without cause.


Hugh Guthrie: When a trustee is removed, if he does not desire to accept the remuneration which the creditors vote, he may apply to the court to have his remuneration fixed.


[Stage Direction]
Amendment agreed to.
Andrew Ross McMaster: I note what seems
to be an anomaly in line 10; " and of the claimed sufficient cause." The French version has it: " et de la cause suffisante alleguee," .which seems to me to convey more fully the meaning intended.


Hugh Guthrie: I think that "alleged" would he better. I move that the word " alleged " be substituted for the word " claimed " in line 10 of section 34.


[Stage Direction]
Amendment agreed to, and section as amended agreed to.
On section 35-power of chairman of creditors' meeting to admit or reject proof.
Andrew Ross McMaster: There seems to be an anomaly in this clause. It is provided that the chairman of the meeting may accept a telegram coming from Richford, Vermont, 60 miles from Montreal, whereas if it came from Victoria he would not have the right to act upon it. If you are going to have the provision at all you should make it logical by establishing it on the basis of distance from the place where the meeting is being held.


Hugh Guthrie: This provision is for the convenience of foreign creditors doing business in Canada, particularly those of Great Britain who requested it.


[Stage Direction]
Section agreed to.
On section 38-secured creditor to value securities.
Hugh Guthrie: The only change in this section is in regard to the identification of property by a creditor who claims security on individual property. In the case, for instance, of a cafe where there are fifty tables on twenty of which security is claimed, the difficulty has been to require the identification of the particular tables. This provision has been inserted to facilitate matters in that respect.


Samuel William Jacobs: Does this section apply to the banks as well as to individuals?


Hugh Guthrie: To all creditors who claim to be secured.


Andrew Ross McMaster: Under' the Windingup Act, it has been held that a creditor who is secured on a property may elect to take that property and abandon his claim upon the estate. Is this amendment intended to vary the law in that regard?


Hugh Guthrie: No.


[Stage Direction]
Section agreed to.
On section 39-priority of claims.
Lucien Cannon: Will this apply to the province of Quebec? In that province there is a Workmen's Compensation Act, but no board.


Hugh Guthrie: Well, we ought to make that sufficiently broad. I move that the words " or under any Workmen's Compensation Act " be added after the word " board " on line 41.


Andrew Ross McMaster: As I understand the
law of Ontario, an employer who is found liable to a workman, pays that money, not to the workmen, pays the Compensation Board which, in turn, hands it over to the workman. I think I am right in that. Under our law in Quebec, the debt is a debt which is paid directly to the workman or, in case of death, to the workman's representatives.


Hugh Guthrie: Under this clause,
claims would be paid in the following order of priority:	First would come fees of the
trustees; second, the costs of the first executive creditor, third, wages, salaries, commissions and any damages awarded by any Workmen's Compensation Board or Workmen's Compensation Act.
Amendment (Mr. Guthrie) agreed to.
Section as amended agreed to.
On section 40-continued occupation of leased premises by trustee.


Lucien Cannon: Does the Solicitor Gentral not think that this notice is very short? Supposing this should occur in winter, and in January the trustee gives a month's notice that he is going to vacate the premises in February, when premises are rented from the first of May. That is not fair. In Quebec-and I suppose the same is true throughout the re'st of Canada-our leases are generally yearly from the first of May in one year to the first of May in the following year. Supposing a trustee takes possession of premises under the law, and when he is through with his work, say in January, he gives one month's notice that he is going to vacate the premises-is that the meaning of the clause?


Hugh Guthrie: We went into these
clauses very carefully when the Act was being passed, and the disposition of both the committee and the House was to treat, as some thought, hardly the rights of landlords as compared with the rights of creditors. I cannot say for myself that I think there is any harshness in this clause. The trustee has a right to continue in possession of leased premises for so long as he shall require the premises for the trust estate. The clause states further:
The trustee may surrender possession at any time tout if he shall occupy for three months or more beyond the date of the making of the receiving order or authorized assignment the landlord shall be entitled to receive one month's notice in writing of the trustee's intention to surrender possession or one month's rent in lieu thereof.
That, in Ontario, would be considered a fair and reasonable notice.


Andrew Ross McMaster: Not with us in Quebec.


Hugh Guthrie: I understand that in
Quebec leases are for longer terms than in Ontario.


Lucien Cannon: Leases in Quebec are usually for one year.


Hugh Guthrie: The clause continues:
After the trustee surrenders possession such of the landlord's rights as are based upon actual occupation by the trustee shall cease.
I do not think that is unreasonable, having application at least to eight of the provinces of Canada.


Andrew Ross McMaster: This would constitute a rather unfair hardship to landlords in Quebec, where leases are made for a term which is usually at least a year. Where tenants can be found, as a rule, only between February 1 and May 1, which is the leasing period in Quebec, it is a hardship to order a landlord to allow a trustee to stay on the premises, say until August 1, then to give one month's notice and to be able to get out of the premises, say September 1. Under the law of Quebec, if there is no writing and the rent is so much a year, a yearly lease is presumed, and unless one party gives to the other party notice of intention to terminate, the lease runs on from year to year, terminable only on three months' notice. That is the usual custom with us. You are departing from that reasonable custom here; you are giving the trustee the right to stay in the premises as long as he needs them and then to clear out on one month's notice or one month's rent in lieu of notice. According

to our custom, which may be right or wrong, that causes a hardship to a landlord by having, in the autumn months, his premises thrown on his hands on one month's notice when he may not be able to rent those premises until next May, although the insolvency may have occurred in April and the trustee continued in possession of the premises during April, May, June and July.


Hugh Guthrie: We will let clauses 40, 41, 42 and 43 stand.


Lucien Cannon: I would ask the minister to consider these clauses again before coming back to the committee. The question arises whether these clauses are legal or not, because there is no doubt that under them we are doing away with civil and property rights of the provinces. In our province we have specific laws concerning these matters. Has this Parliament the right to do away with them? I should like the Solicitor General, in consultation with the Minister of Justice (Mr. Doherty), to consider this question and to tell us about it when this Bill comes again before the committee.


Hugh Guthrie: We have had many consultations with many eminent members of the bar in Quebec and Ontario. These and similar clauses were inserted and we were assured that they were quite within our powers.


Edward Walter Nesbitt: I think the one month's notice is too short. The notice ought to be three months. That is what we used to have in the Assignment Act in Ontario and in the Winding-up Act.
Section stands.
On section 47-search warrants:


Samuel William Jacobs: This section provides that the court may by warrant order the breaking open of any place where the debtor is believed to be. Suppose he happens to be in a hotel. What is the good of breaking open the door? We do not want him.


Hugh Guthrie: They might want to
examine him or to serve him with process.


Samuel William Jacobs: They do not serve a man with process by breaking down the door and handing him a document. That is an entirely new way.


Hugh Guthrie: This is simply to give full power.


Samuel William Jacobs: Why not say "the breaking open of any building or place where

any part of the property of the debtor is believed to be?"


Hugh Guthrie: This is from the English Act. It has been found to be necessary because some debtors evade service and hide and lock themselves in.


Samuel William Jacobs: We have proceedings to reach him.


Hugh Guthrie: I suppose they have in England.


Andrew Ross McMaster: In our province the judge will provide a method for service in the case of a man who is constantly evading it. He can give the bailiff instructions to tack the notice on the door or proceed in some such fashion. We avoid this breaking in.


Hugh Guthrie: It cannot be done without the sanction of the court.


Samuel William Jacobs: It is not considered polite to break open a door and hand a man a visiting card.


Lucien Cannon: There is another point. This clause provides that certain things shall be done as is provided by the Criminal Code. By what officials will these things be done? Not by civil bailiff. By constables, I suppose?


Hugh Guthrie: The general rules attached to the Act prescribe that a process of this kind shall be executed by the sheriff.


Andrew Ross McMaster: Would that cover the sheriff's deputy?


Hugh Guthrie: The sheriff's officers.


[Stage Direction]
Section agreed to.
On section 48-who may act for corporations, firms and lunatics:
Andrew Ross McMaster: In our province the lunatic has a curator not only for his property but for his person.


Hugh Guthrie: The section says "or by the guardian or curator of his property."


Andrew Ross McMaster: You say "a lunatic may act by his committee or by the guardian or curator of his property." It does seem to me that the inference to be drawn from the law is that the committee is a person in charge of the lunatic and that the curator or guardian is in possession of the property of the lunatic, but not responsible for the lunatic himself, at least, not his legal representative. In our province "curator" is the title of the person who acts for a lunatic. He is the guardian
so to speak, not only of the property of the lunatic, but also of his person. I think it would be better to say "act by his committee or curator."


Hugh Guthrie: I move to insert after the word "committee" at the end of the 37th line on page 16 of the Bill the words "or curator."


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 49-where a body of persons and court given alternative powers, court to await prior action:
Samuel William Jacobs: What does that mean?


Andrew Ross McMaster: Talleyrand once said that the object of language was to conceal thought, the terms in which this Bill is couched make one think, not exactly like Talleyrand that the object has been to conceal thought, but to surround it with as many words as possible in order that one should have to exercise one's mind in order to find out exactly what the clauses mean.


Hugh Guthrie: Power is given here to a body of persons to take certain action or to decide a certain action. The power to apply to the court is a subsequent proceeding. The court will not act until it has satisfactory proof of prior application to such body of persons and of that body's refusal of the application. To my mind the language is fairly clear, though it is a bit involved, because it has to cover a great deal. There must be proof to the satisfaction of the court that application was first made to the creditors, and that they have refused or omitted to act, before the court will entertain the application.


Andrew Ross McMaster: I would direct attention to the word "alternatively" in line 43. It would almost seem to me that that clause meant that there was a sort of dual control-this body of persons being given power or authority, and the court being given like power or authority alternatively-or that power was in both the body of persons and in the court.


Hugh Guthrie: Oh, no.


Andrew Ross McMaster: Then I think my opening remarks on this section were very much in point.


Samuel William Jacobs: Is this section taken from the English Act?


Hugh Guthrie: The object is to save
costs, and my right hon. friend the Minister of Justice thinks the section is well worded-


Lucien Cannon: I have no doubt he
thinks so.


Samuel William Jacobs: I am sure the section
must appeal to the Minister of Justice.


[Stage Direction]
Section agreed to.
Section 50-Penalty for removing, attempting or counselling removal of debtor's goods without notice.
Lucien Cannon: Does the minister think this is a good clause? I do not think we should change our Criminal Code in any way. The Criminal Code is hard enough to understand as it is, without having special clauses interfering with its general principles. Why should colour of right, in respect of a case, not be a defence? That is essential.


Samuel William Jacobs: This section undermines
our criminal law.


Lucien Cannon: I said earlier in the
evening that this Bill would override our provincial civil laws, and now I find it is doing away with our criminal laws.


Samuel William Jacobs: We had section 97 when the Act first became law two years ago, and it was such a fool section that we afterwards repealed it. The minister will remember how we on this side of the House objected to it at the time. We had section 96 and section 98, but no section 97; and it appears to me that those in authority simply want to insert something now to fill in the hiatus, and they are enacting something which is to my mind as much a fool section as the old section 97.


Hugh Guthrie: We have already passed to-night a section that provides that where any one claims a lien on goods, he shall not remove the goods for a period of fifteen days. This merely provides that if he does so in contravention of that section, 22, he shall be liable to a penalty and shall not be allowed to set up any defence of colour of right.


Samuel William Jacobs: Why not?


Hugh Guthrie: Because he is transgressing the strict letter of the law. The law must be obeyed,- and it says that he shall not remove the goods for fifteen days. If he deliberately breaks the law-


Samuel William Jacobs: It is for the court to say whether he deliberately breaks it or not.


Hugh Guthrie: -then he shall not be allowed to plead colour of right.


Lucien Cannon: Suppose I am prosecuted under this section, and I wish to plead

colour of right as a defence, and the Crown objects. Does not the Minister of Justice think that it would be a perfectly good answer to say that we have criminal laws and that outside of the Criminal Code there cannot be any special law taking away the rights of citizens as protected by the criminal laws of the country?


Hugh Guthrie: Yes, we can override
the Criminal Code.


Lucien Cannon: I have some experience in the criminal courts, and while
12 m. I do not know what the Solicitor General would decide if he were a presiding judge, I know that most judges would say, the Criminal Code covers all these offences.


Hugh Guthrie: We depart from the
Criminal Code in almost every Act we pass. In the Opium and Drug Act and the Migratory Birds Act which we had under discussion to-day we depart from it, and this is the case in almost every Act which imposes penalties.


Samuel William Jacobs: This is a question of
theft. This is a ease where we can proceed against a party under the old larceny law.


Hugh Guthrie: Not if he is the owner
of the goods.


Samuel William Jacobs: He is not the owner when the receiver takes possession.


Hugh Guthrie: He is the owner and he is compelled to leave them there, under the law we have enacted to-night, for fifteen days, to give the trustee a chance to see -whether he has title. If you do not obey the plain letter of the law, and you deliberately take the goods away, there is a penalty. People must obey the law. My hon. friend refers to larceny. Suppose you were the owner of the goods; where would there be any larceny?


Samuel William Jacobs: My hon. friend knows
that there are sections in the Criminal Code dealing with, cases of that kind, where a man can steal from himself.


Hugh Guthrie: Where I sell a table
and take a lien note, complying with some provincial law, if the condition on which the table was sold becomes forfeited and I want to take possession of the table-


Samuel William Jacobs: You replevy it.


Hugh Guthrie: I make an assignment,
and I have to wait fifteen days before I can get the table. If I did take the table

away before fifteen days I could not be prosecuted for larceny if I were the owner.


Andrew Ross McMaster: If I recollect my
. criminal law, I think that if a thing is in the hands of the court, in the hands of the bailiff or of the trustee, any man, even if he were the owner, who took possession of it would be guilty of a criminal offence. I should like to hear the Minister of Justice on that point.


Lucien Cannon: The minister is horror-stricken. He has not spoken this evening.


Samuel William Jacobs: What would happen if
the party claiming the property went to the civil court and got an order to replevy?


Hugh Guthrie: It would not be good
against the Bankruptcy Act. Civil provisions in the provincial law have been overridden by provisions in the Bankruptcy Act, and cases from Quebec on that question were decided by the Privy Council, where it was held that because the procedure of the province of Quebec required certain things, and the old Insolvency Act overrode those provisions, the Insolvency Act was ultra vires and unconstitutional. It was held, however, that this Parliament had a perfect right to override the civil procedure of Quebec in regard to anything necessary or incidental to the law of bankruptcy or insolvency.


Lucien Cannon: But has this Parliament the special right to create offences in contradiction to the provisions of the Criminal Code?


Hugh Guthrie: Yes.


Lucien Cannon: Without amending the
Criminal Code?


Hugh Guthrie: Yes, we could say
"notwithstanding anything in the Criminal Code."


Samuel William Jacobs: The section declares that the party who contravenes it is liable to a fine of $5,000 or to two years' imprisonment. Would the minister be good enough to tell me why $5,000 is provided as a penalty?


Hugh Guthrie: Suppose we strike out this "colour of right" to satisfy my hon. friend?


Andrew Ross McMaster: To satisfy justice.


Hugh Guthrie: Strike out "colour of right shall not be a defence and." The clause will then read:
In proceedings under this section any person counselling or directing the offence involved-
And so forth.


Samuel William Jacobs: I think the $5,000 penalty is excessive and that the penalty should be "not exceeding one thousand dollars."


Andrew Ross McMaster: Might I suggest to the Acting Solicitor General that he might just as well strike out that last sentence because is not an accessory before the fact a person who does exactly what is set out in terms in the last sentence of this section? An accessory before the fact is, if I remember correctly, liable to the penalty and is held guilty of the offence, and a person who counsels or abets before the commission of an offence, even though he does not participate in' the offence itself, is an accessory before the fact.


Hugh Guthrie: He is a principal.


Charles Joseph Doherty: I quite agree, after consultation with the Solitictor General, that it should come out because the man that counsels or abets, and all the rest of it, is not merely an accessory before the fact but is a principal.


Samuel William Jacobs: Is a party to it.


Charles Joseph Doherty: Yes, a party.


Samuel William Jacobs: The penalty of $5,000 is
excessive.


Hugh Guthrie: We will have to stick to it.


Samuel William Jacobs: I may say that throughout the Act wherever a fine is imposed it is in every case $1,000 or two years' imprisonment or both. I think that is the wording in different sections of the Bill.


Hugh Guthrie: Well, cases have arisen where goods to the extent of $25,000 have been removed. In one case, I think, it was shoe machinery that was taken out; in another case very expensive printing presses were removed. The judge would apportion that.


Samuel William Jacobs: But we should make the change in order to maintain the symmetry of the penalties, if I may so describe it. We find in other sections that bankrupts who contravene the law are liable to a fine of $1,000 or two years' imprisonment, or both. Why not fix the penalty in this case at $1,000?


Hugh Guthrie: It is too little for a big affair. I move that the words from "in proceedings", line 19, to the end of the section be struck out.



Georges Henri Boivin: Mr. Guthrie moves to further amend clause 50 by striking out from the end thereof the following words:
In proceedings under this section colour of right shall not he a defence and any person counselling or directing the offence involved shall, in the event of its commission by the person counselled or directed, he liable to conviction of the offence cumulatively with the actual offender, even though such person counselling or directing was not an actual participant in the offence."
Amendment agreed to and section as amended agreed to.
On section 51-liability of officer, director or agent of company.


Lucien Cannon: Is that participation to be real or just statutory or technical? For instance, a director or official of the company may technically participate in an act but in reality he does not. Would he be criminally responsible under this clause, for technical participation in an act?


Hugh Guthrie: I think the participation would have to be actual participation.


Lucien Cannon: Why not put in the
word "actual?"


Hugh Guthrie: I think it means actual.


[Stage Direction]
Section agreed to.
Progress reported.
[Stage Direction]
House again in Committee of Supply, Mr. Boivin in the Chair.
Department of .health-salaries, $155,612.50.
Peter McGibbon: May I ask when we will get a review of the work of this department? It spends about a million dollars a year, it has been in existence two years or nearly that, and we know practically nothing about it at the present time.


Andrew Ross McMaster: Perhaps the minister will give a comprehensive review such as he gave on immigration the other day when the House was enlightened for some little time.


Samuel William Jacobs: We will find that our
health is not improved.


James Alexander Calder: I may state in reply to the hon.- member for Muskoka that if there is an opportunity, when we are dealing with the Health Estimates, I will make a statement regarding some of the activities of the department. In the meantime, as it is pretty late, I would move that the committee rise and report progress and ask leave to sit again.
On the motion of the Right Hon. Mr. Doherty the House adjourned at 12.15 a.m.

Wednesday, May 4, 1921.