Mr. SPEAKER:: I have the honour to
inform the house that a message has been received from the senate informing this house: That the honourable the Speaker, the honourable Messieurs Aylesworth, Sir Allen, Beaubien, Chapais. Gillis, Gordon, Griesbach, Hatheld, Laird, Lewis, Logan, McDougald. McLennan, Poirier, Spence, Taylor and Turriff, have been appointed a committee to assist the honourable the Speaker in the direction of the library ot parliament, so far as the interests of the senate are concerned, and to act on behalf of the senate as members of a joint committee ot both houses on the said library.



PRINTING OF PARLIAMENT

Hewitt Bostock: I have the honour to
inform the house that a message has been received from the senate informing this house: That the honourable Messieurs Aylesworth, Sir Allen. Buchanan, Chapais, Donnelly, Farrell, Green, Hatfield, Horsey, Legris, Lewis, McDonald, McLean, McLennan, Pope, Raymond, Robertson, Sharpe, Taylor, Todd, White (In-kerman). and White (Pembroke), have been appointed a committee to superintend the printing of the senate during the present session, and to act on behalf of the senate as members of a joint committee of both houses on the subject of printing of parliament.



PRIVATE BILLS


[Stage Direction]
Bill No. 16, respecting the Sun Life Assurance Company of Canada.-Sir Eugene Fiset.
Private Bills
[Stage Direction]
Bill No. 17, respecting The Quebec Railway Light and Power Company.-Mr. Parent.
Bill No. IS, to incorporate Canadian Reinsurance Corporation.-Mr. Mercier (St. Henri).
Bill No. 19, to incorporate The Railway Brotherhood Casualty Insurance Company.- Mr. Mercier (St. Henri).
Bill No. 20, respecting The Bell Telephone Company of Canada.-Mr. Edwards (Ottawa).
Bill No. 21, to incorporate The National-Liverpool Insurance Company.-Mr. Guerin.
Bill No. 22, to incorporate Niagara Falls Memorial Bridge Company.-Mr. Pettit.
Bill No. 23, respecting certain patent application of Stanley W. Hayes.-Mr. Jacobs. CIVIL SERVICE SUPERANNUATION

Mr. A. W. NEILL (Comox-Alberni):: I
have the honour to present a petition signed by J. Smith, and about one hundred others, being employees of the telegraph department of the government service, and praying that they be allowed to subscribe to the superannuation fund of the civil service-and in my opinion, Sir, a much delayed" piece of justice. PRECIOUS METALS MARKING ACT Mr. J. E. LETELLIER DE ST. JUST (Compton) moved for leave to introduce Bill No. 24 to amend the Precious Metals Marking Act, 1928.
He said: The only change is the addition of the words "or importer of, or dealer in".
Motion agreed to and bill read the first time.
FISH INSPECTION ACT AMENDMENT Hon. P. J. A. CARDIN (Minister of Marine and Fisheries) moved for leave to introduce Bill No. 25, to amend the Fish Inspection
Act.


An hon. MEMBER:: Explain.


Mr. CARDIN:: This bill is the result of
recommendations made by the Atlantic fisheries commission, and provides for the inspection of fish and curing establishments which were not covered by the Inspection Act.
Motion agreed to and bill read the first time.
FISHERIES ACT AMENDMENT Hon. P. J. A. CARDIN (Minister of Marine and Fisheries) moved for leave to introduce Bill No. 26, to amend the Fisheries Act.


An hon. MEMBER:: Explain.


Pierre-Joseph-Arthur Cardin: This bill provides for the putting into practice of the recommendations of the Atlantic fisheries commission. Its main

object is to make the season for lobster and smelt fishing statutory.
Motion agreed to and bill read the first time.



QUESTION PASSED AS ORDER FOR RETURN


Mr. EDWARDS (Frontenac-Addington):: 1.	What was the rate imposed and the amount of domestic sales tax collected on sales by: (a) manufacturers or producers to retailers or consumers; (b) manufacturer to wholesaler or jobber and by wholesaler or jobber to all others; (c) lumber, for each of the following periods: (a) May 19, 1920, to June 16, 1920; (b) June 17, 1920, to May 9. 1921; (c) May 10, 1921, to May 23, 1922; (d) May 24, 1922, to December 31, 1923; (e) January 1, 1924, to April 10, 1924; (f) April 11, 1924, to February 17, 1927; (g) February 18, 1927, to February 16, 1928; (li) February 17, 1928, to present date?
2.	What was the rate imposed and the amount of sales tax collected for each of the periods mentioned above on importations by: (a) manufacturers, producers, wholesalers, jobbers; (b) retailers and consumers; (e) lumber?



CANADIAN COPYRIGHT

[Stage Direction]
On the orders of the day:
Mr. L. J. LADNER (Vancouver South):: I would like to ask the Prime Minister a question which is both urgent and of international importance. Is it the intention of the government to correct by legislation the anomalous situation in which Canada, a party to the Berne convention, finds herself, having pledged herself to guard the Canadian copyright of foreign authors as the Canadian rights are guarded in foreign countries?


Hewitt Bostock: I would ask the hon. member to give notice of this question. It might stand as a notice.
AIR MAIL SERVICE On the orders of the day:


Mr. L. W. JOHNSTONE (Cape Breton North-Victoria):: I should like to ask the Postmaster General if any provision has been made for carrying mails by the air service to Cape Breton?


Hon. P. J. VENIOT (Postmaster General):: Not up to the present time. The question of the air mail service to the maritime provinces is now being considered by the department. We have inaugurated a tentative service between St. John and Halifax. The matter of extending it further will receive consideration later on.



TITLES OF HONOUR

[Stage Direction]
FROPOSED APPOINTMENT OF SPECLAL COMMITTEE The house resumed from Wednesday, February 13, consideration of the motion of Mr. Cahan:

Titles oj Honour-Mr. Heaps
That a special committee of the house consisting of eleven members be appointed forthwith to investigate and report upon the advisability of qualifying, amending or rescinding the address to His Majesty the King, which was adopted by the house in May, 1919, dealing with the conferring by His Majesty of titles of honour or titular distinctions upon His Majesty's subjects domiciled . or ordinarily resident in Canada; and also to consider and report upon the appropriate action, if any, which the parliament of Canada should take with respect to the acceptance, enjoyment or use by persons domiciled or ordinarily resident in Canada of titles of honour or titular distinctions or decorations conferred by any foreign government, governmental authority, potentate or power; and also to consider and report upon the advisability of instituting orders of merit, distinctions or decorations, which may be conferred by His Majesty upon persons domiciled or ordinarily resident in Canada, on the advice of the government ot Canada, in recognition of distinguished public services; and that such committee have power to send for persons, papers and records, and to report from time to time to this house.
,Mr. SPEAKER: If any other hon. member wishes to speak on this motion, the time is now, because the hon. member for St. Lawrence-St. George (Mr. Cahan) will close the debate.
Mr. A. A. HEAPS (North Winnipeg):: Mr. Speaker, the hon. member for St. Lawrence-St. George (Mr. Cahan) is indeed very fortunate, because this is the third day on which a private member's resolution has had the opportunity of being discussed in this house. He is fortunate also in another respect because I believe there are very few people in Canada who are interested in the question whether titles are conferred in this country or not. Yesterday I had a question on the order paper and I think it is quite pertinent at this particular juncture to make reference to it. It related to a matter considerably more important than that of titles in Canada. It had to do with the development of the St. Lawrence river and when I asked the Prime Minister (Mr. Mackenzie King) whether the house would have an opportunity of discussing that question, the reply I received indicated that the house would have no opportunity whatsoever of dealing with it. As a result of the reply which I received yesterday from the Prime Minister and the hours and days that we may be discussing a question of titles, there will go abroad throughout the Dominion the impression that a good deal of the discussion in this house is unreal. Imagine, when corporations are asking the privilege of developing the St. Lawrence waterways, when this matter which is of such vital importance to Quebec, Ontario and in fact, to the people of western Canada, is placed before the cabinet, the house is informed that it is to be denied the right of
discussion in regard to itl An impression of that kind is not good for the prestige of the House of Commons.


Mr. MACKENZIE KING:: I should like
to know if we are discussing the question of titles or if we are considering some other subject.
Mr. HEAPS; I realize that the question may not be altogether to the liking of the Prime Minister at this particular time.
Mr. MACKENZIE KING; Oh, not at all.
I thought possibly I was mistaken as to my hon. friend's intention. I really do not know whether he is debating the motion of the hon. member for St. Lawrence-St. George or taking up a different subject.
Mr. HEAPS; I am just comparing the actions of this house and I am sure the Prime Minister cannot object. I am comparing the time given by the house to the discussion of a question in which very few people are interested and the fact that the Prime Minister denies to us the right of discussing a much more vital question.


William Lyon Mackenzie King: I do not wish to interrupt my hon. friend, but may I say that the Prime Minister does not and cannot control the procedure of the house. The procedure is regulated by the rules, and the hon. member has rights under the rules to discuss any question, including the question my hon. friend has raised, but he must do so according to the rules as they have been determined by the house itself.


Abraham Albert Heaps: The rules of the house will permit the government if they so desire to submit the question of the development of the St. Lawrence waterways to the house, but if they do not submit it, we have scarcely an opportunity of discussing it. Therefore I made that comparison and I do not intend to dwell on it, because now is not the time to do so; but I hope within the very limited scope that private members have in the house, some means will be found of discussing more vital questions than that with which the time of the house is being taken up at the present time.
To come back directly to the question raised by the hon. member for St. Lawrence-St. George, I endeavoured to understand the motive of the hon. member in bringing his resolution before the house. I do not think I do him an injustice when I say his motive is to secure for the people of this country the privilege of having titles conferred upon themselves under conditions similar to those obtaining in other countries. Another motive for bringing forward this particular resolution may be attributable to the fact that on a recent occasion the hon. gentleman received from his

Titles of Honour-Mr. Heaps
alma mater certain honours which, I think, were given quite rightly and which, I am sure, all hon. members are happy to find the hon. gentleman a recipient of. No member in this corner of the house objects to titles of that kind being conferred upon people in this Dominion. In fact, the resolution that was passed by the house in 1919 has not prevented those distinctions from being given to those people who deserve them; but if I had to look for an answer to the mover of this particular resolution, I would refer him to the speech delivered by the hon. member for St. Lawrence-St. George (Mr. Cahan) on Tuesday. In his speech he said:
There is something in human nature that is urged to the utmost endeavour and to the extreme of self-sacrifice by incentives such as these. I will give you an instance, a matter of personal interest to me. I believe my name was submitted once for distinction which I felt that I could not accept-perhaps that is the way I should put it.
I claim that action of the hon. member for St. Lawrence-St. George is a sufficient reason why the house should not adopt his resolution this afternoon. I do not think that because the hon. gentleman did not see fit to accept the honours that were proposed to be given to him, he is to-day any worse a citizen than he was ten years ago. I believe, an spite of the fact that he could not accept a title of distinction, he is to-day rendering to the people of Canada just as good service, in the way he sees it, as he did ten years ago, and I do not think his incentive is one whit less because he declined the honour. Therefore I claim that the answer to the hon. gentleman's motion is given in his own speech of the other day.
IV e find that distinctions are being given to worthy people in this country. They may not be knighthoods or peerages, but nevertheless they are distinctions which, I think, are more highly prized than anything we' might confer upon them by way of a title.
A few years ago the house honoured a man who, I think, is deserving of great honour.
I refer to Doctor Banting, the man who discovered insulin. The name of Doctor Banting to-day is honoured not merely in Canada, but, I believe, throughout the whole world. How much (better would Doctor Banting be to-day if he had a title before his name or a few letters after it? He would not be one whit better than he is to-day, and I am sure he would not be giving any better service to the community than he is giving at the present time.

V\ e who belong to the Labour party in this country object to the granting of titles, because we believe that the conferring of such titles creates classes in the community. We as a party have often been accused of creating class difficulties in the community, but let me assure the house that if there is one thing we wish to abolish, it is class distinctions. Titles create an aristocracy. There are different forms of aristrocracies. You may have a titled aristocracy and a moneyed aristocracy, but there is only one true aristocracy in any community, in my opinion, and that is the aristocracy of labour. The people who are performing useful service in the community form the real aristocracy of a nation, and that useful service is nett necessarily performed by the man who works in the workshop or in the factory. Looking back to the distinctions that have been conferred upon people in the different countries; I would like to know what distinction either in Great Britain or Canada has ever been conferred upon a man who has given distinguished service to the labour movement, and yet the labour movement forms a very large part of the life of any community. When it comes to conferring distinctions, it is not the labour man who gets them. For everything that labour has to-day it has had to fight those who, as a rule, have been of the titled classes, and there has nothing come to labour without a very stern struggle. If you want to see what the results of granting titles have been, look at the British House of Lords, which to-day hardly commands the respect of the people of Great Britain. In 1911, the veto power which the House of Lords possessed was taken away because it had abused its privileges. How many labourers, I might ask, do you find in the House of Lords? All you find there is rank and wealth, with labour not having any show there at all, and that, by the way, is the result of the honours system as they have it in Great Britain. We have another form of second chamber in Canada. We have a Senate where people of distinction, I presume, are supposed to go when they have given sen-ice to the country. But what do we find in the Canadian Senate? I do not think anybody would care to claim that if the question of the abolition of the Canadian Senate were put to a vote of the Canadian people, the Senate would be retained. I feel satisfied that the people of Canada would vote for its total abolition. That is another result of the honours system as we have it in this Dominion.
I believe that one of the reasons the house adopted in 1919 the resolution which we are now asked to reverse was because

Titles oj Honour-Mr. Heaps
the people of Canada were sick and tired of the way (people in this Dominion were receiving honours. Have things here in this regard changed very much in the past ten years? Are governments now so different from what they were ten years ago that we are likely to have any change in the conferring of these honours?


Mr. JACOBS:: The hon. gentleman surely cannot compare this government with the government of 1919.


Abraham Albert Heaps: I notice both in this session and in the last session of the house a remarkable unanimity between the front benches on the two sides of the house, and on this particular question I find them both unanimous.


Miss MACPHAIL:: We are due for another Union government.


Abraham Albert Heaps: peerage and every other distinction had been degraded by the profuse and incautious use which had been made of it. He went out of his way, however, to approve of Pitt's dictum and clearly stated that honours were properly used "in strengthening the administration."
There can, indeed, be little doubt that every prime minister since Walpole made definite use of this prerogative for the purpose of "strengthening the administration," though few, if any, of them were so incautious as to acknowledge that definite gifts to party funds constituted the practicable means of attaining this end.
That, Mr. Speaker, refers to conditions in Great Britain about seventy years ago.


Mr. CAHAN:: Who is the author of that?


Abraham Albert Heaps: I believe the editor of this
magazine.


Charles Hazlitt Cahan: The editor of the Nineteenth Century, Mr. Knowles?


Abraham Albert Heaps: Yes. What I have quoted
will be found in the Nineteenth Century of September, 1922. In another part of the same article we find the following:
Many men in recent years have been given honours because they have fairly earned them; many on the other hand have not only not earned them, but are completely disreputable, some contemptible.
It is not alleged that those responsible for recommending them knew of their disreput-ability, past or present, but that the question of reputability or disreputability was not greatly agitated; it is alleged that those that received them did so either on account of payment into party funds or that the consideration was a promise express or implied to do so.
Now I quote from another article which appeared in the same magazine in February, 1923:
No system on earth can make the national honours list a perfect document, or anything like it. For one thing, the great men need no official titles. Would Shakespeare have created a greater Hamlet if Cecil had made him a knight? Would Chaucer have made better verse had he been an earl? Could Meredith have built more perfect prose if Lord Salisbury had made him a duke? Or again, was it likely that Lord Palmerston would have had the wit to see that Darwin should have been made a peer when he published the origin of species?
We have now, of course, got to the days when the honours list recognizes artistic and scientific merit. But unfortunately we have also reached the time when merit hesitates to recognize the honours list. Men now refuse titles as well as ask for them.
As my hon. friend from St. Lawrence-St. George does.
Within the last few years a novelist and dramatist of distinction awoke one New Year's morn to find himself by mistake a knight. He regarded it in a different light from the one in which it was offered-and hastened to wipe the stain from his honourable name.
[Mr. Heaps.}
Now, Mr. Speaker, I could go on quoting from articles which have appeared in the Daily Mail and other Conservative papers of Great Britain in regard to the Lloyd George election fund. But that is too recent history and, I believe, is well known to most hon. members; at least it is common knowledge how the funds were obtained. In fact some men to whom honours were given in return for large contributions to the campaign funds were accused of the utmost disloyalty to the British crown. One name in particular comes to my mind, a name that was freely discussed at the time he was made a peer. I refer to Lord Vestey. He made millions and millions out of the war, but to escape taxation he removed his headquarters to South America. Such is the type of men who have been honoured by titles in Great Britain. Possibly the same condition has not obtained in this country, and consequently I do not wish to say anything about our titled people; but at the same time I think it will be far better not to follow the practice.
Now, the hon. member who moved this resolution said he wanted equality. I am quite prepared to agree with him in that regard, I wish to see everybody put on an equal basis, but possibly our two methods are of an entirely opposite character. If we are to have equality-and it is complained now that foreign rulers are at liberty to confer distinctions upon Canadians while His Majesty is preclued from doing so-the way to bring about that equality is to see to it that no Canadian shall be allowed to accept foreign titles or wear foreign decorations. This will be a very simple method of insuring equality in this respect.
I do not believe, Mr. Speaker, that the recipient of a title, whether it be sir or lord or some other high-sounding distinction, is one bit better off, nor do I think is it to the country's advantage. I believe the greatest honour that any citizen of Canada can have is the confidence and the respect of those with whom he comes in contact. And surely that is all the honour any man could wish for. If any member of this house gives honourable and conscientious service to his constituents, he is bound to be honoured by the community in which he resides, and I do not think it is necessary to honour such a man with a peerage, a baronetcy or any similar title. The man or woman who enters public life with the hope of securing a title of honour is the least deserving of reward.
Therefore, Mr. Speaker, this House of Commons having in the year 1919 passed a resolution renouncing titles, and there being no

Titles of Honour-Mr. Adshead
particular agitation to have that resolution rescinded, I think that this motion should not be entertained. The government, if it sees fit, can use the discretion conferred upon it by the resolution of 1919 and abolish all titular distinctions. I do not mean that distinctions earned by those who have distinguished themselves in science or art or literature should be interfered with; they are entitled to whatever honours our universities may confer on them. Far be it from me to stop those institutions from honouring their sons and daughters who have given their best to their country; but I hope that those titles which confer a certain class distinction will never be revived in this Dominion.


Mr. H. B. ADSHEAD (East Calgary):: It is not my intention to be censured by the hon. member who has just spoken (Mr. Heaps) for taking up the time of the house when it might 'be more properly occupied in the consideration of matters of greater importance. We both, perhaps, may err in that respect. However, I have a brief contribution of about ten minutes to make to the question at issue.
I was lead to believe, from the resolution of my hon. friend from St. Lawrence-St. George (Mr. Cahan), that it applied simply to the question of foreign decorations and distinctions; but upon reading the hon. gentleman's speech I find that there is implied, not only the question of decorations and distinctions from foreign lands, but also the reintroduction of titles to be granted in Canada by His Majesty the King. The hon. member labours very much the king's prerogative; he mentions the king's prerogative a number of times. In one passage he asks:
Why. . . should His Majesty be denied the exercise of his prerogative. . . to confer titular distinctions or decorations upon persons who have rendered such distinguished services?
We see, therefore, that the hon. gentleman had in mind not merely the regulation of foreign distinctions and decorations but the re-introduction into Canada of titles from His Majesty the King. Further on in his speech my hon. friend says that action must be taken in the ordinary constitutional way, by the advice of His Majesty's ministers in Canada of the government in power. If that be the case, it simply means, as has been pointed out, a return to the old system of patronage; and the government, having it in their hands to confer titles upon whom they will, will confer them .most likely, as was done before, on persons particularly favoured.
This aspect of the question has been traversed both by my hon. friend from Labelle (Mr. Bourassa) and by the hon. member for Toronto Northwest (Mr. Church), and I do not propose to discuss it in that direction. The suggestion is made that titles should be given "for services rendered." When this matter was under consideration in 1919, this phase of it, with reference to services rendered, was dealt with at very great length in the house, and I propose for a few minutes now to give you some of the ideas of the gentlemen who took part in that debate- gentlemen on both sides of the house, including Liberals who were in the Union government. There are now one or two hon. gentlemen sitting to the left of the Speaker who were members of the government at that time. Speaking about service, Mr. Nickle gave expression to the true idea when he made this statement:
I said that you cannot measure sacrifice and you cannot measure service. As I stand here this afternoon speaking to this house I see a woman in dull black who came into my office some five or six months ago and told me that she was a widow; that her only son, who had gone to the front, had been killed. She said: "All I ask is that you get me a picture of the cross that marks his grave in Flanders' fields; I shall be content to have that as a memento that he did his duty in a time of national peril and in a time of world crisis." Could you measure that woman's sacrifice and service as against the sacrifice, if needs be, and probably the service, of hundreds of men who stayed at home and did their best, but whose best was incomparably less in sacrifice than the sacrifice that this widow made in giving her only son to a great cause?
That was the idea of Mr. Nickle and of the house at that time: after such a catastrophe as the Great war it was impossible to measure the service and the sacrifice of those who had participated, and to confer distinctions on all those who had come to the country's aid. Let me now quote five lines from the speech of another hon. gentleman in the house at that time-the gentleman who now occupies the distinguished position of Speaker. Mr. Speaker said:
Sir, in this wrar the private was a knight, in my judgment, as much as a colonel, the major or the general. They were all knights and if you make a distinction,-
You will see that the hon. gentleman was opposed to the conferring of distinctions and decorations.
-I say that the greatest knights of all are the dead. Where are the decorations for the dead?
This is the question he asks; and he answers the question himself. Their decorations are crosses, white crosses in Flanders' fields. A

Titles of Honour-Mr. Brown
little after that, by way of change from the more serious side of the matter, an hon. member quoted in the house on that occasion a poem or ode which might very well be repeated in this house to-day. There were a number of orders then, as there are now, such as the G.B.E.; K.B.E.; D.B.E.; C.B.E.; M.B.E. and finally O.B.E., which so many people have after their names to-day. This is the ode:
I knew a man of industry
Who made big bombs for the R.F.C.
And pocketed lots of L.8.D.
And he (thank God!) is an O.B.E.
I knew a woman of pedigree
Who asked some soldiers out to tea
And said, "Dear me!" and "Yes, I see",
And she (thank God!) is an O.B.E.
I knew a fellow of twenty-three Who got a job with a fat M.P.,
Not caring much for the infantry.
And he (thank God!) is an O.B.E.
X had a friend, a friend-and he Just held the line for you and me,
And kept the Germans from the sea,
And died without the O.B.E.
Thank God!
He died without the O.B.E.
I have one more reference to make and I am through with what little I have to say. I trust that the right hon. gentleman who occupies the position of Prime Minister (Mr. Mackenzie King) will follow this carefully, inasmuch as it has particular reference to some of his forbears. Speaking in the house, Mr. Richardson, the member for Springfield at that time, gave utterance to these remarks, of which all Liberals might very well take cognizance. He said:
Yes, and you might add to theirs the name of that other great Canadian, William Lyon Mackenzie, to whom this country owes far more than the average citizen dreams of to-day. Because the people have short memories and I find that we Canadians make a great mistake when we fail to study the lives of the men that served us. Think of William Lyon Mackenzie, who fought for representative and responsible government, who fought against the old Family Compact, a man with Scotch blood in his veins who refused to be domineered, who stood nobly for right and principle, and was willing even to .place his life and liberty in jeopardy by entering upon rebellion against what he considered the wrongs of the day. Perhaps he was mistaken-I would certainly in the light of history and of developments not like to venture the idea that he was mistaken

but he took the consequences of his act, and it is to William Lyon Mackenzie that this Dominion owes so much at the present day. Driven from his own country he became an exile in a foreign land for years, often going for days if not weeks without food. He was without friends, without a man to say a kind word to him. Then an amnesty was declared, and he returned to Canada and died a broken old man. 
Would it endear the name of William Lyon Mackenzie to the people of Canada if a knighthood or any other honour that a human potentate might control had been conferred upon him? Not at all. The memory and name of William Lyon Mackenzie to those who have studied and appreciated his life and work wik live as long as Canadian history lives. These are the men who are entitled to honour, the men' who spurned anything that kings could do for them, the men who fought for principle and placed their lives in jeopardy. This nation little dreams how much it owes to men like William Lyon Mackenzie and as a Canadian I would deeply deplore the conferment of any title that a human potentate could confer.
I hope my right hon. friend the Prime Minister will take note of the aotions of his forebears. To attempt to confer a title upon men who have rendered a real service is like painting the lily or trying to gild refined gold.


Mir. J. L. BROWN (Lisgar):: At one time I felt somewhat disposed to vote for the resolution now before the house, but the trouble is that the resolution contains too much. If it were limited to the subject mentioned by the leader of the opposition (Mr. Bennett),, decorations for services Tendered, I could heartily subscribe to it, but I am entirely opposed to anything in the way of titular distinctions; I am opposed to them because they have a tendency to create class distinctions. We may not think that danger very serious, but it is a .problem we must face,, and perhaps I can give an illustration which came to my knowledge. On one occasion a certain titled lady in a certain town, speaking to another lady whose husband recently had been created a knight, said, " Oh, I aim so glad that now you have become one of us." It is that "one of us" spirit which we do not want to encourage. Perhaps I might be permitted to place the situation before the house in the words of one whose birthday we celebrated only last month. The leader of the opposition made a very apt quotation a few days ago from a famous Scotch author in eulogy of the old country doctor, and when you want to express yourself in terse and emphatic language you cannot do better than go to the good, broad Scotch. I would like to recall to your minds the words of that great Scotch poet, Robert Bums, who wrote:
Ye see yon birkie ca'd a lord,
Wha struts, an' stares, an' a' that;
Tho' hundreds worship at bis word,
He's but a coof for a' that:
For a' that, an' a' that,
His ribband, star, an' a' that:
The man o' independent mind He looks an' laughs at a' that.
A prince can mak a belted knight,	.
A marquis, duke, an' a' that;

Titles oj Honour-Mr. Spotton
But an honest man's aboon his might,
Gude faith, he maunna fa' that!
For a' that, an' a' that,
Their dignities an' a' that;
The pith o' sense, an' pride o' worth,
Are higher rank than a' that.


Mr. GEORGE SPOTTON (North Huron):: Mr. Speaker, if I could be sure that there would be a vote on this resolution I would not even take ten minutes of the time of the house, as I propose to do. However, I just wish it to be known to this house and to the constituency which I represent that I am not in a position even to flirt with this matter.
This question was settled by my party in 1919, and I have heard no person in my county or in the province of Ontario express any desire to return to medieval times. This seems to be an innocent matter when we are asked simply to refer the question to a committee for consideration, but there may be leaders of parties who perhaps discern the psychology of the situation. In an old school book there was a verse which read like this:
Vice is a monster of so frightful mien,
As, to be hated, needs but to be seen;
Yet seen too oft, familiar with her face,
We first endure, then pity, then embrace.
These advocates may think that this session we will endure, next session pity and the third session embrace.
If in my remarks I leave the track, Your Honour will call me to order, but I remember a- New York paper which, before the United States went into the war, was neutral -so neutral-that it did not care who licked Germany. If there are men taking part in this discussion who are so neutral that they do not care who restores these titles, I must say once and for all that I am opposed to any such restoration. I have been in this house only a short time, but I have never seen the leader of the administration seize with such avidity upon any suggestion coming from this side of the house. I have seen the Prime Minister, in my own constituency, smile blandly and serenely on two men speaking from the same platform at the same meeting, one making a free trade speech and the other pleading for protection. As far as I am concerned I propose that my people shall know where I stand, and I will not be a party to pulling the chestnuts out of the fire for this administration.
In 1919, when men were rendering the greatest service men could render their country and their empire, this house did away with titular distinctions, presumably almost unanimously. In my constituency, Mr. Speaker, I have mothers who have given one, two, three, four and five sons for the
empire, and I will never vote that they shall bow the knee and call some other woman lady. The mothers, the wives and the daughters in my constituency are all ladies, and they never shall be placed in a class lower than that of some other lady who happens to be married to a man who, for reasons best known to himself and to those who confer these titles, has received such a distinction. My mother, my wife, my daughter; the mothers, the wives, the sisters and the daughters of my constituency never shall say that I cast my vote to place them in a lower class than any other woman in this fair Dominion. It may seem to be an innocent matter to refer this question to a committee, but we have a member of this house bringing forward another innocent resolution to change the old Union Jack. Do you think, Mr. Speaker, I could vote for any such recommendation and still play fair and be honest with the people who elected me? In my constituency they do not take stage fright even when three, four, or five cabinet ministers attend a meeting; in such cases less than fifty people will turn out, but when a commoner comes along a few nights later he is greeted by 300, 400 or 500 people.
There has been some laboured argument about foreign kings and potentates granting titles to Canadians. I think that matter was fairly dealt with in 1919, and if the Sultan of Turkey wishes to bestow any little decoration on any member of this house he can have his sounding brass and his tinkling cymbal, pleased with the rattle and tickled with the straw. If they wish to wear their little past master's jewels about their necks I have no objection, but in my constituency "Jack is as good as his master."
I shall not take up more of the time of this house. This is a question on which a student of history might speak for some time, but in Canada we have the titles of "Honourable," and " Right Honourable," " Mister " and " Esquire," and if the title " Mister " is not good enough for any man he can tack " Esquire " after his name. In the name of the noble band of men and women in my constituency, the descendants of the real makers of Canada, the descendants of those early pioneers who fought the great battle of the forest-
Those worthy sires who bore
The day's first heat, their toils are o'er.
Rude fathers of a rising land.
Theirs was a mission truly grand.
Brave peasants, by the Father God Sent to reclaim the stubborn sod,
Well they performed their work and won Altar and hearth for the woodman's son-

Titles of Honour-Mr. Bird
I can only say that until the government of Canada raises memorials to those pioneers and to the men who fought and bled in Flanders, and to the mothers who spent the sleepless vigils at home, I shall not be a party to granting any titular distinctions or creating any caste system in this fair Dominion of Canada.
T. W. BIRD (Nelson):	Mr. Speaker, I
would like to point out that not only in 1919, but as recently as 1923 this house decisively set its face against the bringing back of titular distinctions into Canada. In the session of 1923 this house was almost unanimous on that question. I think it is a very significant thing that this question should have been raised on three previous occasions only. These occasions are very significant.
In February of 1914, this question was raised in this house, and the motion to banish titles from Canada was not even seriously debated. The representatives of the people of Canada were almost unanimously in favour of titles just a few months before the Great War. In 1919, only a few months after the armistice, the representatives of the people of Canada were almost unanimously against titles. What had happened in the meantime? We all know what had happened; we know that Europe and the world had been turned upside down and that many ancient ideas of medieval origin were put into the discard during those years. Our eyes had been opened in 1919 and Canada, England and the civilized world realized for the first time what were really the sound values in life. They also perceived that the tragedy of the Great War was due in no small way to the medieval conceptions and ideas which had cluttered up our civilization before the Great War.
It might seem to us that we should not be engaging the time of the house regarding titles, but I do not think it is a small thing. I cannot but look upon an attempt of this kind, however sincere its immediate motive may be, but as an attempt to bring back again some of those medieval ideas which were banished from the world by the Great War.
We all know the mood we were in, in 1919. Parliaments were meeting to consider the work of reconstruction; they said to themselves, "This is the only way we can honour the men who laid down their lives, begin to reconstruct upon the foundations they have cleared for us. They have cleared away the debris and the effete notions of centuries and have left the way clear for us to reconstruct." Some of the debris still existed, and one of

the first things the Canadian parliament did in the way of reconstruction was to banish titles. I am sorry to say it was about the only thing they did in the way of reconstruction. It was the one result of their efforts at reconstruction and now the wolves of reaction are after it. They want to bring back that effete, medieval idea into this enlightened, democratic country.
It is claimed that merit should be recognized. I take exception to that statement; true merit does not require distinction. When Doctor Banting discovered insulin there was no artificial label that we could tack on his coat that would have heightened the sense of merit. I would like to leave this question of recognizing merit to our scientists themselves. Call the scientists of Canada together and ask them if they want this tinsel. It is contrary to the scientific spirit. Ask Doctor Banting himself if he wants his good name cluttered up with these effete signs. No scientist wants to be raised to a pinnacle above his fellows. Doctor Banting's discovery was but the last link in a long chain of discoveries. He and his colleagues were working on the results of discoveries of scientists who had worked before them, or who were working simultaneously with them. There is not a living scientist of any merit who wants to decorate himself with these peacock feathers which can be granted by parliamentary or governmental sanction. Not only does merit not require distinction after it has made its achievement, it does not require it before. By calling Doctor Banting "Sir" you might be adding a colour to the rainbow or painting the lily, but I rather think you would be besmirching it. You would not be adding one incentive to Doctor Banting for further discovery, because all the incentive he needed he already possessed. He was endowed with the scientific spirit which pushed him on regardless of all artificial tags we might pin on him.	_	_
The only way to encourage science is to give it bread, or the equivalent of it; give it leisure, or the equivalent of it. If this parliament wants to help science, let it free science from its bonds. There is no parliament in the world meaner to its scientific men than this one. H this parliament is sincere in its desire to further scientific discovery, let it begin at home and treat the scientific men in such a way that they can be free of all responsibility.


Samuel William Jacobs: Will the hon. gentleman
permit me to say that this parliament is contributing $7,000 per year to Doctor Banting.


Titles oj Honour-Mr. Bird


Mr. IRVINE:: That is better than a title.


Samuel William Jacobs: Certainly.


Mr. BIRD:: With respect to Doctor Banting this house has acted with praiseworthy generosity. Let me proceed to stigmatize this motion once more. This idea of bringing titular distinctions back to Canada-and I do not care whether the title is before the name or after it-is just a revival of ideas that ought to have been banished from this world hundreds of years ago. They have existed only by their appeal to human vanity or else they would have vanished. Human vanity is the enduring thing and anything that appeals to it unfortunately endures with it. That is why these things have endured.
I sometimes think prefixes and suffixes are just like an appendix: they are the survivals of conditions that have long ago vanished. When we were climbing trees and eating the fruit from the top branches, an appendix had a function to perform, but in these civilized times an appendix is a liability and not an asset to any human being. It is liable, by its very existence, to upset the order of the body. It gives the doctors their chance. These prefixes and suffixes, these sirs and dukes and lords and LL.D's and D.D's all belong to the same order of things: they originated in medieval times and were meant to indicate class distinctions, those good old times when they prayed Heaven that they might be made content to stay in the position in which it had pleased Providence to call them. Those were the cast-iron, water-tight distinctions of medieval times. They had some excuse then. Probably civilization might not have escaped the chaos that followed the downfall of the Roman Empire if society had not been crystallized into these hard' and fast distinctions. But what reason have we to perpetuate these class distinctions now?
I should like to compare the obligations which attached to those distinctions in their origin with those that are associated with them norv. In the good old days of knighthood, which Tennyson so picturesquely tells us about, to be a knight meant to right wrongs, to defend the weak, to serve God and to honour the king. Whoever heard of a knight, or one of those vain Canadians that are lusting for knighthood, righting wrongs, or defending the weak, or fearing God, or honouring the king? Why, they dishonour the king. The hon. member for St. Lawrence-St. George has just revealed to us that these knights or these distinguished Canadians are so vain that they defy King George. King George has graciously conceded to Canada
that no more titles shall be worn by Canadians and yet they have smuggled them in. Some third-rate power, somewhere in the world, has endowed some more or less worthy Canadian with a star or a ribbon and that Canadian, in his swollen vanity, has defied King George, has defied the Canadian government. Loyalty versus vanity! Yes, they do not honour the king; they dishonour him.
In conclusion let me repeat that these relics of times gone by are a menace to the body politic. I do not think this is an unimportant question. In that regard I disagree with the hon. member for North Winnipeg (Mr. Heaps). I sometimes think we have a lack of sense of proportion in regard to. matters which come before the house. This is an important question; it strikes at the very root of progress. If you are going to allow this reactionary spirit to creep back into Canada; if this house is going to open the gate ever so little, you are going to enervate the arm of progress; you are going to clutter up the ideals that we have been entertaining for a few years. It is a very important matter and what the hon. member for Labelle (Mr. Bourassa) told us the other day out of his personal reminiscences, struck one as being almost terrible in its significance-to think that in times gone by Canadian governments, under the leadership of men who were truly great, have been so venal that they would sell positions in the Canadian Senate to those who were capable of paying the price. It does not matter what more is said or revealed in the course of this session; that one revelation stands out as the most significant-to think that the greatest men of our past history should have such an imperfect ethical conception that they would use democratic institutions as matters to be bought and sold, thereby endangering the welfare of the people of Canada. If you are going to put into the hands of the government of Canada-I do not care who is at the head if it; I do not care if the Archangel Gabriel is taken in as private secretary-something to give away that is of value to the rich men of the country, you are going to open the way to the defeat of the will of the people. There is no other way of looking at the question. Moreover, you are going to encourage the development of an atmosphere in which it will be very difficult to conceive, let alone carry into effect, anything of a democratic character, an atmosphere creating a class distinguished by great names who will form a society within which there will be mutual recognition. This more than anything else will enervate the spirit which has been manifest in Canada for
Titles of Honour-Mr. Dunning

the past number of years, a spirit which has been determined to make the will of the people effective in this house. Therefore, Mr. Speaker, I am opposed to the resolution going to the committee.
The house has not yet heard in a frank way what is the principle of the motion. Is it that the .committee should' honestly set to work to tighten up the conditions so that nobody anywhere in Canada can any longer wear these titles? Is that the idea? I do not think anyone of us can so interpret it. The idea of this motion, as interpreted by the speech of the mover, is that this committee should so canvass the situation that somehow or other, without unduly shocking the public opinion of Canada, there should be a return to the idea of merit and titular distinctions. If that is so, and I cannot see how it can be otherwise, surely we are not going into a committee to try and prevent these people from wearing these badges-these vain empty-headed Canadians who will wear these peacock feathers. Surely this parliament is not going to lower its dignity by setting a committee in motion with the idea of counteracting the vanity of certain Canadians, of whom there may be only half-a-dozen after all, whose honours may not be worth considering. I know that when the hon. member for Vancouver South (Mr. Ladner) brought in his motion in 1923 in regard to Dr. Ashton, it was the order of the Legion of Honour that was in question. There was a great power, France, which, when it discovered there was a ban on titles in Canada, acted . as a great nation should, and as a great nation only can, and in a spirit of international courtesy, France said1: We cannot deliver the Legion of Honour to a Canadian citizen. So I am sure that it is only some little back-woods nation in, perhaps central Africa, that is bestowing these orders, and why should we worry one moment because some Canadians we have never heard of are determined to wear these orders in spite of anything this .parliament or King George has said?
Hon. CHARLES A. DUNNING (Minister of Railways and Canals):	From some of
the speeches which have been delivered in the course of this debate, one would almost think that there was somewhere a proposal to restore titles in Canada. Looking over Hansard, in order to ascertain the true situation, I find that only one member who has addressed the house thus far has indicated even a qualified support of the idea of reintroducing titles into this country, and that was the hon. member who moved the resolu-

tion (Mr. Cahan), and he spoke in moderate terms. But all who have followed him from either side of the house have I think expressed very clearly what I am sure all of us believe to be the will of the people of Canada, which is that titles should not be restored in this country. When that is the case, why should we, in addressing the house attempt in any way to misrepresent the situation? I would not have spoken at this time were it not for the remarks of the hon. member for North Huron (Mr. Spotton), who endeavoured to put into the mouth of the Prime Minister words which he did not utter, and endeavoured to attribute to the Prime Minister a desire to see titles restored in this country. Not only do the Prime Minister's own words not permit of that construction, but I am in a position to say, knowing every member of the government, that not one member of the government is in favour of restoring titles in Canada, and the Prime Minister least of all.


William Lyon Mackenzie King: Hear, hear.
Mr. DUNN'ING: The remarks of the Prime Minister on the subject and the remarks of the hon. leader of .the opposition were perfectly proper; they deallt with the subject matter of the resolution, which asked for a committee to consider and report upon the advisability "of qualifying, amending or rescinding the address to His Majesty." All of the speeches to which we have been listening for the past few days bear upon the possibility of that one word "rescinding" being uppermost in the mind of the committee, if and when it is appointed, when, as a matter of fact, every member of this house knows that if such a committee were appointed, the last thing it would consider recommending to this house would foe the restoration of titles. Whatever qualification it might introduce by way of getting rid of some of the anomalies referred to by the mover, or the Prime Minister or the leader of the opposition, anomalies which are well known to all of us, it is unthinkable that a committee of this house in this day and generation should bring in a report which would indicate a desire on the part of this House of Commons that titles should be restored in Canada. That is not debatable, indeed, because as I said at the outset, the cnlv member thus far speaking who had supported that idea is the mover of the resolution himself.


Charles Hazlitt Cahan: Where do you find that in my speech? I cannot find it.

Titles oj Honour-Mr. McGibbon


Mr. DUNNING:: My hon. friend denies it himself, and I accept his denial. I have the words here that he used; they are very moderate, and if he will permit me, I will read them. He said:
For myself I am of the view, having regard to His Majesty's position in the government ot this Dominion as well as of the empire, that this House of Commons should not restrict and in fact prohibit His Majesty, in the exercise of his prerogative, from conferring distinctions and decorations upon his subjects in Canada who have given distinguished services to the state or to society.


Charles Hazlitt Cahan: I said nothing there about
titles.


Charles Avery Dunning: My ho-a. friend was not referring there to titles?


Charles Hazlitt Cahan: I said nothing about titles at all.


Charles Avery Dunning: If my hon. friend was referring only to distinctions, I beg his pardon.


Charles Hazlitt Cahan: The hon. leader of the opposition made that so distinctly clear that there dhould be no doubt about it.


Charles Avery Dunning: I have not been accustomed to regard the hon. leader of the opposition as always speaking for my hon. friend from St. Lawrence-St. George.


Charles Hazlitt Cahan: I am glad to say that he did
on this occasion.


Charles Avery Dunning: I was only taking my
hon. friend's own words, and I am sorry if I did him an injustice. Perhaps he will forgive now that I have given him an opportunity to correct me. There is of course a difference between a title such as Sir or Lord, and a distinction which appears only in the form of letters after a person's name, such as many hon. members are now in a position to write after their names. ^ It does seem rather anomalous that while universities have the right to confer the kind of distinction involving letters after one's name, His Majesty the King apparently is not desired to grant distinctions involving the same thing. That is one of the anomalies which might justify consideration by a committee. On the other hand, might I with all respect point out that this House of Commons can scarcely with propriety say to His Majesty that we desire him not to grant one kind of distinction, but that we shall be very happy if he will grant some other kind of distinction which lies within his power. I doubt very much if it would be courteous on our part, to say the least, to indicate to His Majesty the kind of distinctions that we would be willing to 78594-8
accept, as well as those distinctions that we do not desire should be conferred on British subjects resident in Canada.
My own view is that this committee should not be appointed. It is very evident-I am not impugning in any way the motives of my hon. friend for St. Lawrence-St. George-that an effort will be made to convey the impression in the committee, if it is appointed, just as my hon. friend from North Huron did in his address a few moments ago, that the government of Canada is desirous of bringing back the bestowal of titles, when, as a matter of fact, nothing is further from the truth Personally I intend to vote even against the setting up of a committee.


Mr. PETER McGIBBON (Muskoka-On-tario):: It is not my intention to occupy the time of the house very long; in fact, it seems to me, after the speech of the Minister of Railways (Mr. Dunning), that the government and its followers are wandering into the bush so far as this resolution is concerned.
As one who supported the abolition of titles in 1919, it does seem to me that the present resolution of the hon. member for St. Law-rence-St. George (Mr. Cahan) is quite in order. I think that in 1919 we were affected more or less with a kind of war hysteria, and we were led to do some things that possibly might better have been left undone. I do not wish to be understood for a moment as supporting titles as we ordinarily understand them in this country, but I do think that this parliament went too far when we deprived ourselves of all our power to do honour to any of our own citizens. It seems to me to imply a lack of courage and a lack of confidence in ourselves when we are constantly surrounding ourselves with a hedge of prohibitions so that we may do no wrong. The name of Doctor Banting has been mentioned frequently in this debate. I do not know what right these hon. gentlemen have to speak for Doctor Banting, but when hon. gentlemen get up here in parliament and make rash statements such as have been made here today regarding Doctor Banting, statements such as the hon. member for Southeast Grey (Miss Macphail) made regarding the men who won decorations during the war, they should back up their statements with proof. The mere statement of an alleged fact in this house does not make it a fact. I have never discussed the matter with Dr. Banting. I know he has been honoured by various universities, and he has graciously accepted those honours. But when a man has made one of the greatest discoveries in the history of the world, something that men



Titles of Honour-Mr. Edwards (Frontenac)
were seeking even when Christ was on earth, it seems to me regrettable that as a nation we are absolutely powerless to recognize his worth. It is true we granted him a few paltry thousand dollars. If he had commercialized his discovery he could have been a multimillionaire overnight. So we have done little or nothing in recognition of his great discovery.
I grant you that in the past the conferring of titles has been abused, but I firmly believe that the people of Canada are quite capable of exercising wise, sane and judicial discretion in honouring those citizens who have so signally benefited their native land. We passed the resolution of 1919 because in the background we were led to believe there were thousands and thousands of people waiting for war decorations, people who had never been at the front but had been occupied in war work here or in England. That was largely the argument used when we passed that sweeping resolution. To-day we find it is full of anomalies. As one who supported that resolution, I think those anomalies should be removed, and for that, if for no other reason, this motion should go to a committee. It is ridiculous to my mind that foreign decorations should be worn by Canadians and yet His Majesty King George be precluded from conferring similar decorations on our citizens. The situation is so absurd that it should be remedied without delay. Little as I think of this government, and anxious as I would be to see it put out of office, I would not be afraid to trust it to recommend to His Majesty the bestowal of honours, subject to certain safeguards that might be set up by parliament. I think that right should be inherent in the administration of the day. To my mind it belittles the dignity of this country that we should be so helpless that we cannot recommend the sovereign to honour those Canadians who have achieved so much for humanity.
As one without any ambition and without any hope in this regard, I sometimes wonder what is in the back of people's minds when they are so opposed to the merit of others being recognized. Is it a spirit of jealousy because they have fallen behind in the race of life that they are so anxious to withhold all reward to others? Or are we so democratic that we want to make everybody conform to the same standard as though turned out from one mould. Everybody knows that that cannot be done. We are born unequal. If the human race would grasp that fact, that at birth we are limited intellectually and cannot overcome the handicap, I think it CMr. McGibbon.]
would add much to our contentment and happiness.
Consequently we should not become afraid of this question as the hlinister of Railways (Mr. Dunning) perhaps is. We should not be afraid to send this resolution to a committee to discuss. And we should not be afraid to discuss it in this house. I think this parliament should have power to recognize the meritorious deeds of its own people. I am utterly opposed to creating knights, to making class distinctions; but to say, no matter what a Canadian may achieve in the field of science, medicine, art, literature, that parliament can do nothing to show their recognition of such achievement, is putting a limitation upon its powers that we should not allow. Therefore, sir, I shall vote in favour of this resolution, so that the committee to be appointed may see if out of the resolution of 1919 something cannot be gathered that is sane, workable and fair.


Hon. J. W. EDWARDS (Frontenac-Ad-dington):: I shall take but a few minutes,
Mr. Speaker, to touch on one phase of the discussion. I do not care whether people have titles or not; they are the same people. I want to express my disagreement with those who have gone into hysterics this afternoon in regard to class distinctions. I remember an expression 'of the late Sir Wilfrid Laurier, that he was democratic to the hilt, but when Her Gracious Majesty Queen Victoria saw fit in recognition of his great services to confer upon him a knighthood, he did not become less of a democrat. No person will say that Sir John A. Macdonald was less "John A." after he got his title of " Sir.'' So far as my limited experience and observation go I have been unable to see that the conferring of titles has made any particle of difference in those so honoured. To me they appear just the same ordinary individuals as they were before.
I intended to support this resolution for the reason that there are certain anomalies, which have been touched upon by the hon. member for Muskoka (Mr. McGibbon,) and which I think possibly a committee might be able to remove. But I do not know-I think perhaps there is a danger. Listening to the hon. member for Nelson (Mr. Bird) and some others who have expressed themselves in rather vigorous, if not violent, terms this afternoon, I think perhaps we should safeguard the country against the possibility of any titles being conferred upon such gentlemen. I do not think they would survive the honour.

Titles of Honour-Mr. Irvine


Mr. STEVENS:: You think it might be
done inadvertently?


John Wesley Edwards: Yes. Now, at times in the course of my somewhat extended political career I have felt, although I never had any desire for any person to call me Sir John, that if I had had conferred upon me some easily pronounced appellation, it might have relieved me from some other names that were not very pleasant. Perhaps that is one reason why some hon. members would like to have titles restored, so that when their friends or enemies could refer to them as Sir Charles, or by some other similar title, they might escape being called something worse. But in view of the statement made by the hon. Minister of Railways, Sir Charles Dunning-


Some hon. MEMBERS:: Oh, oh.


John Wesley Edwards: -that the government has no intention of doing anything along this line, that they axe absolutely opposed to it, and all that, I do not see it is any use proceeding further with this resolution. I would suggest that the- hon. member for St. Lawrence-St. George (Mr. Cahan) make a graceful retreat and- simply hand this over to the Prime Minister and say, "Go ahead now with your own game and let us see for once whether you can evolve something of a definite character out of this question, seeing that yo-u have never do-ne so in any other matter."


William Irvine: I will not make the speech I had prepared, because the remarks of th-e Minister of Railways (Mr. Dunning) render it more or less unnecessary. It is unfortunate that the minister did not take the opportunity at an earlier stage of the debate to indicate, as emphatically as he has just indicated to the house, how he regarded the resolution, and how members of the cabinet stood on the question at issue. I am quite sure that if this had been done there would not have been any of the hysteria to which reference has been made by a previous speaker. However, I wish to comment on this feature of the discussion. It is a simple matter for any member of parliament to speak upon an issue so guardedly that he may be placed on that side of the fence which discretion may subsequently render advisable, or, in other words, he may so protect himself by language that when he discovers how public opinion is going he can run for cover in either direction.
We owe a great deal to those hon. members who have -been characterized as hysterical for 78594-8i
having brought so clearly and plainly to the parliament of Canada and to the people of the country the absolute absurdity of this whole business. I am glad that the Minister of Railways has -been so emphatic, and I am glad, if for no other reason than for the sake of those very hon. gentlemen-no doubt they are rare-who hold this medieval appellation regarding which so much discussion has been taking place. These men are almost the laughin-g stock of the general public, because the whole titular performance in Canada is looked upon as absurd. Indeed, I have known some good men who were lowered in the opinion of the general public because they had accepted the appellation. If they are big enough they do not need any distinction of that kind; and if they are not big enough then the stamp does not lend dignity to them. The title is only the guinea stamp:	"The Man's
the gowd for a' that." To those who wish to have honours conferred, let me say that the men and women of our time, as of other times, who are great enough to receive honours, are so great that we are unable to recognize them, and they will be long dead before we can tack letters on to their names, and as for the men who are so small as to require the stamp in order to appear honourable-well, they are far better off without them. As I say, I am glad that it is not necessary for me to make the speech I had intended making seeing that the matter has been buried by the emphatic statement of the Minister of Railways. I trust that for the last time we are burying this question m Canada, and I think we should bury it in the way the old lady buried th-e cat-face and nose downwards so that, if it ever comes to life again and starts to scratch, the more it scratches the deeper it will go.


Charles Hazlitt Cahan: As to my motives in drawing this
resolution, may I say. that I drew it in the broadest possible terms and in such a form that every phase of the matter might be discussed. But there is not one line in the resolution by which the house, in voting the resolution, would favour the conferring in the future, by His Majesty, of any titular distinction upon his Canadian subjects.
This matter was brought to my attention about two years ago when there were some instances in Canada of signal social service in connection with the St. John's Ambulance. I still have the correspondence in my room, and it shows that some simple decoration or distinction or medal which formerly had been granted in Canada for life-saving or for nurs-

Titles of Honour-Mr. Cahan
ing service could not be awarded at present by the granting of any distinction or decoration or medal, even in Canada, by reason of the interpretation put upon the very broad resolution which was passed by this house and which included, in part, the address bo His Majesty.
Personally I am not advocating that titular distinctions ibe revived in Canada; I am advocating that the humiliation and embarrassment whioh this house placed upon His Majesty in passing that address should be removed, especially as we know now, under the constitution as at present recognized, that His Majesty would confer no distinction, decoration or even medal upon his Canadian subjects except upon the recommendation and advice of the government of Canada which is responsible to this parliament and to the people of the country.
We are singular in Canada in this respect, that this is the only country in the civilized world-I believe it is the only country which for a century or more has pretended to civilization-which has no way at present by which the sovereign head of the state, on the advice of the government, can confer any distinction or recognition for public services of any character whatsoever.
I am not going to enter into a discussion of personalities which have been bandied across the floor of the house. The hon. member for Toronto Northwest (Mr. Church) suggested that I had better be devoting myself to the service of the working people of my constituency. Well, I have no desire to enter into a personal controversy, but I will take the hon. gentleman or any other hon. member of this house into my constituency and show him that I have been as assiduous in my duties, to serve that constituency in a social way, without reward or favour, as any member of this house. I have no desire to reply in kind to the hon. member for Southeast Grey (Miss Macphail). I have never in my life spoken one disrespectful word of any woman; therefore I cannot give a reply such as I would give to a male member of the house. Let me say, however, that Lord Beaverbrook, with all his great qualities and all his great frailties, has no more to do, and has had no more to do, with the price of cement in the northwest than the lady member for Southeast Grey has to do with the sale of women in the slave markets of Abyssinia. I dislike having these personal questions brought into these discussions.
In August last this same question was before the House of Representatives of Australia, and by a vote of 84 to 24 that house upheld the prerogative right of His Majesty to grant
[Mr. Cahan. 1
distinctions, titular or otherwise, upon his Australian subjects under the advice of the government of. the day. Personally I have such confidence in any government of this country as to believe that no grave abuses would prevail if some recognition or decoration were awarded for public service in Canada, especially as that prerogative right of His Majesty will be exercised in respect of his Canadian subjects on the advice of his Canadian ministers, and not upon the advice of the cabinet at Westminster. There was a time when I heard abjections to the granting of such distinctions in this country on the ground that it was a means by which the imperial government of that day sought to secure political support in the colonies, but that day has gone by long since, and the government of this country, in all matters pertaining to the legislative jurisdiction and the administration of public affairs in this Dominion, hereafter will have the duty and responsibility of advising the king in the exercise of his prerogative right in respect of his subjects in Canada.
I sincerely deprecate, from the bottom of my heart, the manifest tendency we sometimes see on public platforms and which has made its appearance in this house in the last two days, to debase and degrade the public life of this country by making covert insinuations against men long since dead, insinuations which would not be made were these men living and able to defend their reputations and their characters against all assailants. I have had a fairly wide acquaintance with members of this house on both sides, for a member who lives rather to himself and is of a more or less retiring disposition outside this chamber; I sat in the press gallery over forty years ago and listened to the leaders of that day, and I am making no attempt to throw bouquets to the members of this parliament on either side when I say it is my firm conviction that the men and the lady sitting in this house, the members of this house, are as sincere in their devotion to their public duties and as honest and conscientious in the performance of those duties, as the members of any preceding parliament that ever sat in Canada. While we may differ profoundly upon questions of public policy, I firmly believe that we are as sincere and devoted to the best interests of our country as may have been the case with any of our predecessors.
I never had the advantage of an intimate personal acqaintance with Sir Wilfrid Laurier.
I have known the distinguished men on the
Conservative side since confederation, but

Titles oj Honour-Mr. Cahan
I simply knew Sir Wilfrid Laurier by his charming courtesy, his artistic temperament and his intellectual vigour. I heard him in this house and on the public platform, and I knew of his sincere devotion to the performance of his public duty, of his simple life as a citizen of Canada and his great political and party achievements. Above all,
I knew him as a Canadian statesman whose life now is and ever may be an inspiration to the youth of his province and of the whole Dominion to do their best to participate to the fullest extent in the public life of this country. Therefore I am not prepared to believe that this great man, whom I saw in the public eye, whom I heard on the public platform and with whom I had the pleasure of coming into contact a few times, although not intimately, prostituted and debauched the political life of this country in order to obtain a few dollars through subscriptions from possible appointees to senate seats. " After life's fitful fever he sleeps well," secure, I think, in the affection and esteem of the whole people of Canada. And as I am standing here I am sure that one of these days, when the present leader of this house will have passed away and when perhaps his successor, whom I am glad to see sitting in this house as the present leader of the opposition, will have passed away, the public recognition of their statesman-like qualities will be as profound as that recognition which has dotted the market places of our country as well as the grounds upon which this building is located with the statues of those who have devoted all that they had of time, of effort and of attainment for what they believed to be to the greatest advantage of Canada.
Therefore I say to the Minister of Railways (Mr. Dunning) that I cannot think he has deliberately reviewed and considered this question in all its aspects. Why should he be affronted simply because the hon. member for North Huron (Mr. Spotton) has made a strong speech against the revival of titular distinctions in Canada? I would go on the platform of the hon. member for North Huron and would point out to his constituents, who no doubt have a high intellectual capacity, that the nurse who attends her diphtheria patients, the policeman who risks his life to protect the lives of others, and the boy who jumps from the wharf to save the child who has fallen into the water and is drowning, cannot in Canada receive the recognition and approval of His Majesty for the valiant deed done for the good of humanity.


George Spotton: May I ask one question? Did any of these people ever receive anything in the way of recognition from the home government?


Charles Hazlitt Cahan: Certainly they did, until this address was passed by this house, and I can give the hon. member the correspondence which shows that it has not been done since.
In this resolution I am not asking for the revival of titular distinctions or hereditary titles; I am asking that we consider whether the address which has been forwarded to His Majesty might not be reconsidered, so that, within the well-defined desires of this house and of the people of this country, certain decorations and distinctions might continue to be given by His Majesty the King to worthy recipients, or in the alternative, if that is not deemed advisable, whether we might not provide in this country some order of merit, of which they have two or three in our neighbouring republic, which might be bestowed on worthy citizens who have rendered great service, patriotic service if you will, to the social or political life of this country. That is all I am asking. Simply because one might make some objection to titular distinctions is no reason why this parliament should be afraid to consider this question in all its aspects and deal with it as intelligent men should. All the facts would be placed before the committee and subsequently come before this house.
Whether the present government remain in power or whether they are succeeded, as I hope some day they will be, by the Conservative opposition, I do not believe that in this day and generation it will be found that any prime minister of Canada will attempt to debauch the public life of this country by recommending for public distinction those who are expected on that account to give monetary contributions to political campaign funds.



RAILWAY ACT AMENDMENT


[Stage Direction]
Mr. G. R. GEARY (South Toronto) moved the second reading of Bill No. 6, to amend the Railway Act (investigation of subsidiary of telephone or telegraph companies).
He said: Mr. Speaker, except in its form this bill is similar to one which was introduced last year and which stood on the order paper without advancing beyond, I think, the first reading. It is designed to give to the Board of Railway Commissioners jurisdiction when dealing with an application for an increase of telegraph or telephone tolls to inquire into and investigate the affairs, including, but not so as to limit the generality of the term, the costs, prices, sales, profits and financing of any company, corporation or firm in which any telegraph or telephone company subject to the jurisdiction of the Board has in the opinion of the board a controlling interest as shareholder or partner, or otherwise, or of which such company, corporation or firm in the opinion of the board is a subsidiary, and to examine the books, accounts, vouchers and papers of the said company, corporation or firm.
The Board of Railway Commissioners has, it is granted, complete jurisdiction to inquire into all the affairs of a telephone company which is before that board on an application to revise the rates charged by the company in question to the public. But although the telephone company may be shown to have many millions of dollars of its profits or its moneys invested in another concern, of which concern it has absolute control, the railway board is estopped at that point from investigating as to the reward those moneys invested in the subsidiary company are obtaining, which reward will go to the betterment of the finances of the company under discussion.
I have in mind one case, that of the Bell Telephone Company of Canada, doing business in the provinces of Ontario and Quebec, whose rates were before the railway board for consideration. It transpired during the investigation of the affairs of that company that it controlled, by holding a majority of shares of stock, the Northern Electric Company; that it had invested in that company

Railway Act-Mr. Geary
a great deal of money which came from the coffers of the parent company, and that that company had made enormous amounts of money out of the sale of apparatus, to the extent of fifty per cent of its whole business, to the Bell Telephone Company, its parent. The question was raised whether the prices charged by the subsidiary company to the parent company were fair. The railway board was desirous of ascertaining whether those prices were fair or not, but the board found itself confronted with lack of jurisdiction to make any inquiry at all into the affairs of this subsidiary company. It took list prices, and as far as one can see from a list price, those prices compared favourably with what some other companies might have charged to the Bell Telephone Company. No objection could be made to list prices as such, because they were listed and one could not go beyond that, but it transpired that many elements entered into the business conducted between these two companies. Every hon. member knows well that the elimination of the cost of selling, advertising, sending out travellers, keeping uncertain quantities of stock on hand, and so on, goes to reduce very much the expenses of a company which is 'handling any goods. The board were not allowed to investigate this phase of the matter. Some members of the board said that they were anxious to get further information as to the affairs of the Northern Electric Company, but they found themselves estopped absolutely by the ruling of the chief commissioner that in point of law the board had no right to ask any questions as to the financial operations of that subsidiary or controlled company. I can quote from the record in that particular case what the assistant chief commissioner said when he ruled iagainst the admission of evidence in regard to the affairs of the Northern Electric Company. He said:
I expressed and I think a few members of the board also expressed regret not to_ have that information, but it was clearly left in the discretion of the Bell Telephone Company either to offer information on that point or not to offer it.
As a matter of fact, when that intimation had been made, the Bell Telephone Company in this particular case decided that it would be wise to give information to the board because it had been intimated quite clearly by at least one member of the board that they must bear the onus of not having disclosed information which, in the opinion of that member and other members of the board, it would be most desirable to have in the conduct of the inquiry. But the chairman ruled that under the Railway Act he
could not go into these questions, on which as indicated in that passage, a member or members of the board desired to have information. All that is asked now is that the board be authorized to get that information from a company which is owned by a company at present under the jurisdiction of the board.
I am going into this matter somewhat more fully than I had expected I should be obliged to, because as a rule on the second reading it is either a question of the principle of the bill or nothing,, and it is not quite in order to discuss clauses of the bill. If no objection is raised to the principle of the bill, I understand that as a rule the second reading is given. There can be no question of the government objecting to the principle of the bill, because in the speech from the throne there are put into the mouth of His Excellency words indicating that the government proposes during the present session to bring down legislation authorizing an investigation into the affairs of subsidiary companies. That is a wider provision than this, and if the government has it in mind to put ou the statute book such legislation as is indicated in the speech from the throne, the greater will include the less, the less being the bill now before the house.
It may be urged that the 'bill is discriminatory in this respect, that it lays open to investigation by the board the affairs only of a company which is a subsidiary of a telephone or telegraph company, and not the affairs of a company which may be the subsidiary of any other company, such as a railway company., which is under the jurisdiction of the board. But the government, I believe, proposes to sweep that aside and make its legislation applicable to all companies under the Railway Act, so there can be no question involved as to the intention of this bill and the intentions of the government.
It does seem to me, if I may say so, anomalous that you may investigate the whole, that is, the affairs of say the Bell Telephone company, and you may not investigate the part, that is, the affairs of the Northern Electric Company, owned by the Bell Telephone Company.
The Board of Railway Commissioners found that the prices charged by the one company to the other were fair. I am not for one moment quarrelling with that statement so far as the information which was before the railway board goes, but the difficulty is that the railway board was obliged to consider the question and make a finding without having before it the necessary information
Railway Act-Mr. Geary
[Stage Direction]
upon which a finding could properly be made. It is to remove that disability that this bill is proposed to the house.
I understand that objection has been made by the Northern Electric Company that it has been singled out to have an examination made of its affairs, and its costs-manufacturing costs and that sort of thing-exposed to the public. Under the proposed legislation of the government, whatever it may be, there will be no such invidious distinction as that, if indeed there be any invidious distinction at all. In these days of open and full 'inquiry before the tariff board, one finds no objection on the part of any company seeking the favour of that board to disclosing all its affairs for the information of the board. The day is long past when companies having to depend on the government for protection in the way of duty or remission of duty, or fixation of rates, object to giving full information on matters they would prefer to remain undisclosed.
The Bell Telephone Company has undertaken to expound its objection to this proposed bill in a series of advertisements, and that, of course, it has a perfect right to do. 1 shall not go through the whole advertisement except to say first, that the Bell Telephone Company says expressly that the Bell Telephone Company controls the Northern Electric Company by owning 51 per cent of the Northern Electric Company's shares, and that the company has a contract with the Northern Electric Company by whioh the latter sells equipment to the Bell Telephone Company at favourable prices. This is not the place to discuss that question, although one could, with some knowledge of the circumstances, perhaps hope to controvert the tr-uth of that statement. At all events, it begs the question. The purpose of this bill is largely to find out whether that equipment is being sold at favourable prices, and to find that out by a thorough knowledge of what goes to make up favourable prices.
The Bell Telephone Company goes on to say that holding 51 per cent of the shares of the Northern Electric Company, it receives 51 per cent of the dividends paid. The information submitted to the railway board, and on the files of the railway board, and to which reference can be made if one desires to have the exact figures, is that some $600,-000-I shall not go into that in particular- is paid by the Northern Electric Company as dividends. The railway board had this information, but in the words of the chairman said: Although we have the information before us, although witnesses here have testi-

fied to its truth, although the Bell Telephone Company have submitted a statutory declaration with the information given, we have to wipe that out of our minds; we cannot consider that in any way in arriving at a conclusion.
It was brought out in the evidence submitted in that particular case that the Northern Electric Company had made vast sums of money. It has a depreciation fund which I am quite certain extends towards almost wiping out its capital investment. It has a surplus of some millions of dollars. It has set up different funds to a large amount. It has so much money at the present time that it hardly knows what to db with it, and still it persists in paying to the Bell Telephone Company at the moment only the small amount of about $300,000, or half of the $600,000 it pays in dividends. In some way, although the Bell Telephone Company organized the Northern Electric Company, and at one time owned and controlled it absolutely 100 per cent, 40 odd per cent of the shares of the Northern Electric Company have got into the hands of the Western Electric Company, which is owned root and branch by the American Telephone and Telegraph Company, which in turn controls or can control the operations of the Bell Telephone Company itself. So that whatever dividends are paid, 43 per cent of them now find their way, not into the coffers of the Bell Telephone Company, but into the coffers of one or the other of the four members of the ring which controls telephone operations on this continent, the head of which is the American Telephone and Telegraph Company of New York. That may be a good or a bad business policy. One may say that if you cut the prices which the Bell Telephone Company pays to the Northern Electric Company, as one submission has been, there will be less dividends. Very well. The large public which contributes to the resources of the Bell Telephone Company by becoming customers will get the articles required to make up the equipment at a lower cost, and this will be reflected in the rates charged to the public. If, on the other hand, the Northern Electric Company is piling up huge reserves which it should not conceal in that way, then we say that those reserves should be diverted so that the Bell Telephone Company, being in control of this stock, might declare a greater dividend, because every additional cent of dividend received by the Bell Company from the Northern Electric Company operates in mitigation of the rates which are being charged by the former company to its subscribers.

Railway Act-Mr. Dunning
I would think, Mr. Speaker, that the fair thing to do would be to get into committee with this bill and there discuss it. If any reference is required to the information which has been submitted to the railway board and is available on its files and in the records of its proceedings, we can find in committee better than in the house exactly what the situation is, and how it would appeal to members of that committee. I do not want in the least to interfere with the government's bill. It may provide exactly what this bill provides for, it may solve the difficulty in that way. One does not want to be stubborn, one wants only to get some relief, through a government bill or through a public bill such as this, from what surely is an intolerable state of affairs, that a large company, drawing all its profits from the public, depending on the public for its very life, should be able to put away a tremendous asset, which cannot under the present state of the law be valued or looked into by the Board of Railway Commissioners, under whose jurisdiction the Bell Telephone Company is and whose wards the public are.
I think I should be occupying the time of the house perhaps not usefully if I were to labour this question any further at this stage, but I do trust that we shall get as far as the railway committee with this bill. There we can discuss it from A to Z, and find exactly the information which any member of that committee may desire. Therefore I beg to move, Mr. Speaker, that the bill be now read a second- time.
Hon. CHARLES A. DUNNING (Minister of Railways and Canals): Mr. Speaker, the objection which I take to this bill is entirely due to the fact that it singles out practically one corporation from all corporations now operating under the Railway Act of Canada for special treatment by way of investigation of subsidiaries by the Board of Railway Commissioners. As my hon. friend himself stated, the legislation indicated by the government in the speech from the throne will be general in its character as applying to all companies operating under the Railway Act. Due doubtless to his association as counsel with a specific case, my hon. friend has very much information bearing upon one particular institution, and for that reason is very desirous to correct what he deems to be a bad situation with regard to that institution. The government of Canada and the parliament of Canada, I submit, cannot take that view.
Parliament must look at general legislation, such as the Railway Act, from the point of view of its application to all the institutions which fall within its purview. A study of the situation in that regard has been made and as a result the legislation mentioned in the speech from the throne will be introduced amending the Railway Act.
Mr. BENNETT:: Might I ask when?


Charles Avery Dunning: If the debate on the address had not ended so soon, thanks to my hon. friend, I had intended to have the bill ready as practically the first legislation to be dealt with. There will be a little delay, but I can assure my hon. friend that the bill will be down very speedily indeed; I think I can promise it by early next week at the latest. On behalf of the government I shall not object to this bill going to the railway committee, but I may frankly say that I shall oppose its passage, restricting as it does the application of the principle to which its sponsor refers to one institution only, when, if there is anything in the principle, surely it should be applied generally. Of course I cannot discuss in advance the legislation which the government intends to bring down, but I can assure the house that it will be of a general character, and will not single out any particular institution or class of institutions.


Mr. T. L. CHURCH (Toronto Northwest):: Mr. Speaker, all I have to say is that when the private bill of the Bell Telephone Company was before this house for three months last session the government could have stopped the discussion in five minutes if they had declared their policy in regard to telephone and telegraph company rate applications. Some ten or twelve years ago this parliament saw fit to add telephone and telegraph companies to the jurisdiction of the Board of Railway Commissioners for Canada. But the board at the time the Bell company applied for an increase of rates could not give a decision on the merits of the application because their hands were tied. We could not criticize the board, because they have not the proper power to investigate subsidiary companies. This bill covers all telegraph and telephone companies under the control of parliament, whether in Alberta or Saskatchewan or Manitoba, or whether in Ontario or Quebec, and it is no use for the Minister of Railways (Mr. Dunning) to becloud the issue. The issue is perfectly clear. The purpose of the bill is to give the rail-
Railway Act-Mr. Church

way commission long-needed powers to regulate telegraph and telephone companies, as was always intended. It is no use for the government to promise something in the speech from the throne; this means nothing. The public, the telephone users, want protection from this parliament. Nobody knows who owns this company. The issue is as clear as daylight, and I am surprised at the Minister of Railways' statement that this bill discriminates against one company. He was asked to declare the policy of the government last year, but he did not do so.
Motion agreed to and bill read the second time.


Hewitt Bostock: Mr. Geary moves,
seconded by Mr. Stewart (Leeds), that the bill be referred to the select standing committee on railways, canals and telegraph lines.


Charles Avery Dunning: Mr. Speaker, we are in
the unfortunate position of not yet having our standing committee set up.


Hewitt Bostock: I might suggest to the
house-it was done once last session-that in view of the striking of the committees at an early date, we might say, technically, that the bill is referred to the standing committee on railways, canals and telegraph lines.
Motion agreed to and bill referred to the select standing committee on railways, canals and telegraph lines.



PRESERVATION OF NIAGARA FALLS


Hewitt Bostock: I have the honour to inform the house that a message has been received' from tlhe senate acquainting this house that the senate has adopted the following resolution:
That it is expedient that parliament do approve of the convention and protocol for the preservation of Niagara falls by the construe-tion of remedial works and for the experimental withdrawal of additional wafer from the Niagara river, which was signed at Ottawa, on the second day of January, nineteen hundred and twenty-nine, on behalf of His Majesty for the Dominion of Canada by the plenipotentiary named therein, and that this house do approve of the same.
and requesting the commons to unite with this house in the approval to the above mentioned convention and protocol.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.



PENITENTIARY ACT AMENDMENT

[Stage Direction]
Mr. T. L. CHURCH (Toronto Northwest) moved the second reading of Bill No. 8. to amend the Penitentiary Act (view by grand jury).
He said:	The Minister of Justice (Mr. Lapointe) is not here, but I will briefly indicate the nature of the bill. The object is to give jurisdiction to the provincial grand jury to visit these institutions, in respect to which there have been a good many complaints in the province of Ontario. It is represented that there are, in these federal prisons 64 youths of sixteen and seventeen years, and I have received from some of the judges strong letters in support of the amendment. I will not read these letters at this stage seeing that the minister is not present. The bill seeks to empower grand juries to make visits and inspections twice a year and make presentments without expense to the country. It is in accordance with the best principles of the administration of justice, and conforms to cardinal principles laid down in Magna Charta, namely, that the people shall have a share in the administering of justice and of the criminal law. These institutions are managed by the crown, and in so important a matter it is only right that the people should have some means of learning for themselves just what the crown officers are doing. Grand juries representing the people in various judicial districts can conveniently, and at very little cost, discharge these important and patriotic duties herein contemplated. In one asylum there was found a man who had been sane for several years, and he could not get out of the asylum, while in the Toronto gaol there were several girls of about the age of seventeen who were in a dungeon practically without food except bread and water for days. The grand jury made representations, upon which the city council requested the attorney general of the province to institute an investigation.
It may be said that this is not a matter that comes entirely within the purview of the department and the complete inspection of officials. Now I sympathise with the department, the extent of whose work I perfectly realize. They are not to be critized nor are those in charge of the institution. At the same time, however, I attack the ancient system. I think it is in the public interest that the facts should be made known, and such a practice as is here recommended would
[Stage Direction]
Penitentiary Act Amendment
serve a very useful purpose and lead to prison reform which is badly needed, and to help restore many persons as useful citizens. The grand jury system in England works well, and something of the same nature in the way of jury inspection should be put into practice here. Grand juries should have the power to go to these institutions and report upon conditions. In the absence of the Minister of Justice I would ask that the bill be allowed to stand.
William Lyon Mackenzie King: My hon. friend intimates
that he does not expect the house to proceed with the second reading of the bill until the Minister of Justice returns to his place in the house. He has made his speech on the motion; I would therefore move the adjournment of the debate.
Motion agreed to and debate adjourned.



POST OFFICE ACT AMENDMENT

[Stage Direction]
Mr. T. L. CHURCH (Toronto Northwest) moved the second reading of Bill No. 9, to amend the Post Office Act (newspaper ownership).
He said: This particular bill was before the house last session. There is an amendment which I wish to move. The argument in favour of the bill is familiar to hon. members from the discussions of the past two sessions.
Mr. DEPUTY SPEAKER:: Mr. Church
moves, seconded by Mr. Grimmer, that Bill No. 9 be read the second time.


Thomas Langton Church: I wish to move an amendment owing to an error in drafting.


John Frederick Johnston: Under the
rules it is not permissible for the hon. member to move the amendment at this stage.


Thomas Langton Church: Then I will move the
amendment in committee. This bill is based on the principle of responsible government, and the principle of it has been a matter of law in England for many years; it is also the law in Australia and the United States. That principle is that the people should know who own newspapers. Some of these newspapers the ownership of which is unknown are continually publishing articles in support of certain movements not in the public welfare, and it is in the interest of the public as well as of the freedom of the press that the people should know the ownership of all such publications. I move the second reading of the bill.


[Stage Direction]
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Johnston in the chair.
On section 1-Sworn statement of names and addresses of editors, owners, stockholders, etc, to be made semi-annually.
Peter John Veniot: I move in amendment, as
was done last year when a similar bill was adopted by the house, that after the words "six months" in the twenty-third line the following words be omitted:
Provided, that the provisions of this subsection shall not apply to religious, fraternal, temperance, and scientific or other similar publications.
And that after the word "provided" in the twenty-sixth line the word "further" be omitted.


Thomas Langton Church: I accept that amendment


Mr. GUTHRIE:: May I ask if this bill is now identical with the bill passed last year?


Peter John Veniot: That amendment makes it identical.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Bill reported.

[Stage Direction]
Mr. T. L. CHURCH (Toronto Northwest) moved the second reading of Bill No. 10, to amend the Insurance Act (lapsed policies).
He said: This bill was before the house last year, and the recent report of the Superintendent of Insurance is very much in favour of it. In the United States the amount of money confiscated by insurance companies through lapsed policies amounts to millions of dollars each year, and I have a number of letters from poor policy-holders, of whom a great many are returned men out of work, asking that something be done. The object of this amendment is to give the Superintendent of Insurance more power to go into the affairs of these companies, thus protecting not only the government in the matter of revenue, where there is no protection at present, but also the poor policyholder who has lost what he has paid in on a lapsed policy. Through this method millions of dollars have lapsed and are being taken out of Canada and invested in every country in the world, and this is done at the expense of poor Canadians. In some years half the new business written has lapsed before the end of the year; the figures for 1926-27 show that over 30 per cent of the total insurance written in that year was allowed to lapse, and the money went into the pockets of the insurance companies. In that year over 40 per cent of the gross new business was surrendered, and some adequate system of inspection should be inaugurated in the interests of the policyholders. That inspection system should include a government actuary and frequent reports to the department of the amount of business lost through the lapsing of these policies.
Insurance Act Amendment
[Stage Direction]
I have here a letter which illustrates the principle. This letter is from a gentleman living in the constituency represented by the hon. member for Lincoln at St. Catharines. He is a returned soldier; he was a major in the army, and writes to support my action in this connection. He says that in 1895 he took out insurance in the Maccabees, a fraternal order, at the low rate of fifty cents per month. That rate was increased to sixty cents, later to $1.50, later to $4.50 and then to $6. This gentleman paid this society over $1,000 in rates before he thought it time to quit, and now he has lost everything he paid in. He considers this most unfair and believes this society should be kicked out of Canada, and he says:
I stuck to them during the war; now they have my $1,000 to pay their heavy mortality in the United States. I could keep paying in another $1,000, which would be $2,000, and then die and my heir only get $1,000.
Something should be done to protect such policyholders. If we look at the prices of the stock of these insurance companies we find that they have increased tremendously in the last four years. I have in my hand a pamphlet issued by an investment concern in Toronto, in which they include a table showing the growth in value of the shares of the Canada Life, Crown Life, Great West Life, Imperial Life, Manufacturers Life, National Life, Sovereign Life and Sun Life insurance companies. This table is as follows:
1925	1926	1927	1928Canada Life.. ..	$700	$800	$1,000	$1,000Crown Life	115	135	330	425Great Western Life.	335	460	550	600Imperial Life.. ..	250	350	400	465Manufacturers Life.	65	190	400	450.National Life.. ..	32	42	65	100Sovereign Life.. .	25	37	55	75Sun Life	300	800	1,825	2,400
I protest against such a policy in this country; we find many millions of dollars put up by the policyholders of Canada being invested in Japan, Bolivia and almost every other country in the world, and a large proportion of this money came from lapsed policies. We have a very sympathetic minister in charge of this department; he is the backbone of the government in so far as the voting power of the country goes for his party, and I hope he will support this bill. I protest against our present policy with regard to lapsed insurance; there should be a special committee appointed to go into the affairs of these companies, because the poor policyholder is not adequately protected at all. This bill will protect the policyholder and prevent many of these companies crossing the border into Canada and finding this country
[Mr. Church.1
such a happy hunting ground. They get a lot of money in their exchequers and then go and invest it all around the world.
About fifteen or twenty per cent of these companies are provincial in character but the majority are federal and, in my opinion, the superintendent has not the power he should have. Are we going to wait until we have a Home bank among the insurance companies before the act is amended? The insurance law to-day is twenty-five years behind the times. They have been brought up to date in England, Australia and the United States. The legislatures there have been doing something.
These companies are not paying the taxes they should pay, but the working classes have been paying the peak of taxation in Canada through their breakfast tables, the clothing they wear, and everything else. All of this is due to the fact that our insurance law has been falling by the wayside for many years, and that the Insurance Act is out of date; parliament seemed too busy to take it up.
A statement I have from Washington shows that the lapsed policies in the United States amount to several hundred millions, and that amount of money belonging to the people has been confiscated by these American companies. They are taking action down in Washington as there was a bill before congress during the session before last. They are trying to do something down there to regulate the whole situation.
This bill should go to the banking and commerce committee where an opportunity would be given to hear the Superintendent of Insurance. This committee could look into the question of lapse of policies and find out what is being done with the money and also the terms and conditions under which a policyholder may have his policy revived. We are surely here to protect the public, and it is nearly time the policyholders and the government had something to say about this.
Hon. J. A. BOBB (Minister of Finance):: The hon. member for Toronto Northwest (Mr. Church), who is always interesting, has made a somewhat rambling review of insurance legislation generally, but he has made very little reference to his own bill. With the concluding remarks of my hon. friend I am quite in sympathy. The government have no objection, indeed they welcome the opportunity this bill affords the banking and commerce committee to go carefully into the question of insurance policies, particularly as applied to lapsed policies.

Bank Act-Mr. Church


Richard Bedford Bennett: Is the minister certain
he is speaking for the government? He may be repudiated a few minutes hence by the gentleman sitting beside him.


James Alexander Robb: My hon. friend must not judge this side of the house.


Richard Bedford Bennett: He did it this afternoon.


James Alexander Robb: The bill, as presented to the house by my hon. friend provides, first, for an amendment to give publicity to lapsed policies. This is already provided for in the act, and I venture to say that my hon. friend gathered the information that he has presented to this house from the published returns of the insurance department. These returns give these lapses for a number of yeans.
The bill also provides certain conditions regarding the reinstatement of policies. There is provision now in the act covering this, and the only material difference between my hon. friend's bill and the act as it now exists is that the act provides that six per cent shall be paid and my hon. friend has reduced it to five.


Richard Bedford Bennett: Is there not a limitation as to time? Is it not after three years?


James Alexander Robb: I think it is two years.


Richard Bedford Bennett: It used to be three. Is it two years now?


James Alexander Robb: Two.


Richard Bedford Bennett: This bill places no limitation as to the time.


James Alexander Robb: That is the only material difference. I repeat we are quite willing that the bill should go to the banking and commerce committee and that there be the fullest inquiry into these life insurance policies.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the select standing committee on banking and commerce.


[Stage Direction]
Mr. T. L. CHURCH (Toronto Northwest) moved the second reading of Bill No. 11, to amend the Bank Act.
He said: This bill provides that the consent of parliament shall be obtained before any agreements for bank mergers shall take place. Under the present law all that is necessary is that the governor in council, through the Minister of Finance, give consent. That law is not in the interests of the banking system of this country.
I have here a statement showing the mergers which have taken place since confederation, as follows:
63.-Bank absorptions (mergers) in Canada since 1867.1
Purchasing Bank.	Bank Absorbed.	Date.2
		Aug. 13, 1903
	People's Bank of Halifax, N.S		June 27, 1905
	Ontario bank		Oct. 13, 1906
	People's Bank of New Brunswick		April 15, 1907
	Bank of British North America		Oct. 12, 1918
	Merchants bank		Mar. 20, 1922
	Molsons bank		Jan. 20, 1925
		May 19, 1870
	Bank of British Columbia		Dec. 31, 1900
	Halifax Banking Co		May 30, 1903
	Merchants Bank of P.E.I		May 31, 1906
	Eastern Townships bank		Feb. 29, 1912
	Bank of Hamilton		Dec. 31, 1923
		Oct. 1, 1883
	Bank of New Brunswick		Feb. 15; 1913
	The Metropolitan bank		Nov. 14, 1914
	The Bank of Ottawa		April 30, 1919
		Nov. 1, 1910
	Traders Bank of Canada		Sept. 3, 1912
	Quebec bank		Jan. 2, 1917
	Northern Crown bank		July 2, 1918
	Union Bank of Canada		Aug. 31, 1925
*The purchasing banks named in the latter part of the table are no longer in business. !Dates given since 1900 are of the Orders in Council authorizing the absorption.
Bank Act-Mr. Church
[Stage Direction]
63.-Bank absorptions (mergers) in Canada since 1867.-Concluded
Purchasing Bank.	Bank Absorbed.	Date.
		June 21, 1875 Feb. 13, 1909 Dec. 31, 1924 April 30, 1924 Sept. 12, 1901 Feb. 22, 1868 June 1, 1868 Oct. 31, 1902 July 2, 1908 July 2, 1908 Mar. 31, 1911 April 15, 1913
		
	Sterling Bank of Canada		
		
		
	Commercial Bank of Canada		
		
	Crown Bank of Canada		
Home Bank of Canada		La Banque Internationale du Canada		
3The Banque d'Hochelaga after absorbing the Banque Nationale adopted the name Banque Canadienne Nationale.	.
Section 1 of this bill provides that no agreement by a bank to sell the whole or any portion of its assets to another bank shall be of any force or effect until parliament approves and confirms the agreement.
Section 102 of the present act provides that if the agreement is approved by the shareholders, the agreement may be executed under the seals of the banks, parties thereto, " and application may be made to the governor in council, through the minister, for approval thereof." This bill provides that these last words be stricken from the section.
The proposal is to substitute these words:
No agreement by a bank to sell the whole or any portion of its assets to another bank shall be of any force or effect until parliament approves and confirms the agreement.
Last session this particular matter came up and I asked for a return bringing down any correspondence as to proposed mergers. The report was placed on the table within the last two or three days of the session stating that the department had no information; but within six weeks after parliament closed we read in the daily papers that an agreement had been entered into and approved by both banks for the merger of the Standard bank and the Canadian Bank of Commerce. That was done over the head of parliament. What is parliament for? Are we to sit here like a lot of dummies and have nothing to say about such things? Are we back to the days of the family compact? What have the farmers to say about this? I understand there is a feeling in the west against any more mergers. Just the day before yesterday Sir James Aikins, the president of the Canadian Bar Association, an Imperial bank director and former Lieutenant-governor of Manitoba, came out strongly in this regard and gave an interview in opposition to these mergers. He said:
The people are fearful that the banks of the country, if further amalgamation is permitted,
[Mr. Church.3
may have too great control over the distribution of the country's money and thus hamper the merchants and the general public in their financial organization.
He favours a decentralized Canadian banking system with large head offices and multitudinous small branches scattered all over the country, thus facilitating depositing and distribution of money. It has many advantages over the banking system in the United States with large head offices and very few branch offices for the collection and distribution of the people's money, he said.
He spoke very strongly against mergers, saying further:
"The judgment of the people is pretty sound. The people constitute a fair jury, I think, and it is clearly to be seen that the public is fearful of too great centralization in the Dominion's banking world," said he.
"The people are afraid that the banks of the country, if further amalgamations should come to pass, may have too great control over the distribution of the country's money and thus hamper the merchants, dealers and the general public in their financial organization.
"It would not be wise to flout the opinion of the people, and the people are afraid of further amalgamations."
Outlining in detail the advantages of the Canadian banking system, with its large head offices and multitudinous small branches scattered all over the country, thus facilitating more decentralized depositing and distribution of money, as compared with the United States banking system, with large head offices and no or very few branch offices for the collection and disbursement of the people's money, Sir James stressed the importance of the public sentiment "that further amalgamation might not be fair, as it would endanger a fair collection of surplus money as well as a fair distribution."
I believe those remarks represent the views of the mass of the people of Canada.
This matter was discussed a few years ago in this house. Why should parliament have no control over such large institutions as the Canadian Bank of Commerce and the Standard bank in connection with an agreement for a merger like that? The parliament of Canada is a board of directors representing the people of all the provinces and surely

Bank Act-Mr. Robb
they should have something to say as to whether such mergers are in the public interest or not. It may be that some few are in the public interest. Why did the Canadian Bankers' Association not come to the support of the Home bank and keep the doors of that bank open, thus preventing the suffering which exists to-day amongst widows and orphans in Ontario and some of the other provinces? If parliament had asserted its rights, functions and prerogatives long ago, this failure could not have taken place; but parliament did not and is content until some bank closes its doors, with the result that thousands of suffering widows and orphans are left without money and afterwards have a hard time to get a few dollars back. The time has come now for no more bank mergers in this country. There are only ten or eleven banks left now. The trusts and combines are ruling Canada to-day; they are flourishing like a green bay tree here. In the United States they have a Sherman anti-trust law and we should have one in Canada and make some effort to put on the brakes. Parliamentary institutions in this country are in danger on account of the way in which the banks, combines and trusts are t-o-day in control of affairs, and the time has come for this parliament to assert its rights, prerogatives and functions. The trouble is that there is too much rigidity of the party system in these matters in parliament and the big corporations of the country are using that rigidity to accomplish their raids and to get legislation passed which should never be passed by any free parliament. Amongst those who have suffered through the failure of the Home bank are widows and orphans by the dozen in my constituency, people who put their all into the Home bank and who got very little out except pin money by way of a contribution by this parliament.
I asked in the house about the merger of the Standard bank and the Canadian Bank of Commerce and I was told that there were no papers and that the department knew of no merger. The minister may be able to justify in some way this particular merger. This bill does not deal with mergers that are past and gone; it speaks of the future, providing that, as regards any mergers that are contemplated, parliament should reassert its rights and prerogatives and that, if it is a free parliament, it should be given control over the banking trusts of the country. The banks to-day consist of the Bank of Montreal, the Bank of Nova Scotia, the Bank of Toronto, the Provincial bank, the Canadian Bank of Commerce, the Royal bank, the Dominion bank, the Imperial bank, the Wey-bum Security bank. The financial papers now say there are going to be some more mergere between the smaller banks. We have an opportunity in that case of asserting the rights of parliament to vote for what is in the public interest, namely, that any more agreements between one bank and another shall have the approval of the high court of parliament.
James Alexander Robb: Mr. Speaker, lif bank mergers were brought about for the sole benefit of the shareholders, there would not be much objection to the procedure suggested by the bill which my hon. friend has introduced, but in bank failures it is the depositors who suffer. That is the long and rather painful experience that we have had in this country. It may be observed that the government of the day and parliament have some responsibilities towards the depositors who place their deposits in the various chartered banks of Canada. My hon. friend would take away from the Minister of Finance and the treasury board the right which they now have to supervise these banks carefully and to look after the interests of the depositors as well as of the shareholders, and he would give that to parliament. My hon. friend has not cited any country that follows that procedure. In the mother country the consent of the treasury department must be obtained, and in the United States the consent of the comptroller of the currency is required.
My hon. friend has referred at considerable length to the case of the Home bank. Looking back over the bank mergers that we have had in Canada during the last eight or ten years, we find that some of them have been necessitated by reason of conditions arising out of the Home bank failure. Depositors became alarmed; they withdrew their deposits with certain banks and placed them in other banks which they thought were stronger, and the banks from which the deposits were withdrawn either had to wind up altogether or do the best they could for their depositors and shareholders by merging with some other bank. Just imagine what might have happened if in the case of these mergers we had followed the procedure suggested by my hon. friend! Take the case of La Banque Nationale, for instance, a splendid old bank in the province of Quebec. Suppose that when it went wrong and they were not able to meet their payments, it had been advertised for some months in advance that this bank was in bad shape and had to merge with
Bank Act-Mr. Robb

some other bank, and that it was coming to parliament for permission to do so, there would have been such a run on that bank that it would have become bankrupt before it ever got to parliament.


Richard Bedford Bennett: And the shareholders
would have paid double liability.


James Alexander Robb: Yes, if they were able to,
but if they had not been able to, there would have been a demand made on the national treasury to meet the losses on the ground that parliament had delayed a merger that might have saved the depositors.
Take the case of Molson's bank, a splendid old bank. I have had a few rather sad experiences with splendid men who were interested in some of these banks. I referred a day or two ago to a friend, a gentleman who was recently laid to rest in the Mount Royal cemetery, a splendid man, a strong man, who came to me with tears in his eyes, and told me the real position of his bank, one of the great banks of the country. Because of the position into which his bank had got, in order to save his depositors-he was not much interested in the shareholders; it was the depositors he was thinking of-his bank had to merge with another.
I recall another instance, that of the Union bank. An attempt was made to have the head office of the bank moved to western Canada, and the headquarters of the bank were moved from the city of Quebec to Winnipeg. The Union bank was a great bank, and a useful bank to western Canada during the time the management stood by their legitimate business, but there came a time in its history when it got into a position where it could not carry on. I recall the gentleman who was then at the head of that bank, a dear old man, who had lost his wife a few months before, coming to see me, with tears in his eyes. He knew his bank was in bad shape. He had close associations with some other banks, but his bank was in such bad shape that some of his old friends would not take it over, and I had to go down to the different banks in Montreal. I represented to Mr. Neill, of the Royal bank, "This is an opportunity for you to get a connection in western Canada." He said, "Robb, they have nothing to sell that is worth anything to us except their branches and connections. I will let you know in the afternoon." They decided to take the risk, not because of anything that was left in the Union bank, but because of the connection that it gave them.


William Irvine: Have all mergers come
about through the weakness of one of the banks concerned?


James Alexander Robb: Most of the mergers that I
have had any experience with have been brought about because the bank got into a position where, in order to take care of its depositors, it had to merge with some other bank, and that is the position with which the government were confronted.
I did not intend in the discussion on this bill to refer to the Canadian Bank of Commerce and the Standard bank, but my hon. friend has brought that question up, and I would just as soon discuss it now as at any other time. Having been through this experience with the Banque Nationale, the Home bank, Molson's bank, the Union bank, and the Bank of Hamilton, and having in mind the run that was brought about on one of the big banks in this country through a foolish rumour spread in the city of Toronto, which nearly created a panic-yes, did create a panic, but the two governments, provincial and Dominion, stepped in and steadied that bank up, or I do not know what would have happened; because the people of Canada were nervous over conditions following the failure of the Home bank-having had that experience, when the question of the Standard bank and the Bank of Commerce merger arose, we looked carefully into it. The Standard bank, so far as its shareholders were concerned, and so far as its depositors were concerned, was perfectly solvent, but it was dead so far as doing added business was concerned; it was not getting new business. It must be remembered that two or three years before that time, a big institution had to lend a man to go into that bank to take care of it and steady it up. A run might have been started on that bank at any time, and we had the choice of taking that risk or consenting to a merger which we were satisfied was very much more in the interests of the depositors. You can trust the shareholders to look after themselves; they are quite able to do it, but the government has some responsibility towards the depositors.
My hon. friend has referred to the poor widows and orphans. What would have happened to the widows and orphans who had their money in these different banks, if we had had to wait for parliament to approve of the different mergers to which we consented? The government of the day is of the opinion, rightly or wrongly, that it is in the interest of the depositors that the

Bank Act-Mr. Coote
government should have the right to determine, after careful examination, whether or not there should be a merger. It is not the policy of this government to encourage bank mergers; it is the policy of this government to discourage mergers, but it is not the policy of this government to stand idly by and allow conditions to grow up such as I have indicated in connection with these other banks.
I submit, in conclusion, that Canada cannot make very much of a mistake in following the procedure that has worked so well for so many years in Great Britain, as well as the procedure that has been followed in the United States. It is the procedure we have followed in this country, and for these reasons I must say to my hon. friend that much as I welcome anything that will improve our banking system in Canada, I cannot consent to the principle of this bill, and I shall have to vote against the motion.


Mr. G. G. COOTE (Macleod):: I regret
very much that the Finance Minister (Mr. Robb) has said that he will vote against the second reading of the bill. I had hoped that the bill would be given a second reading and be allowed to go to committee, because 1 think the question of bank mergers is one of the most important questions facing this country to-day.
In the short time that I have had at my disposal to look into the question, I find that previous to 1900 there was no provision in the Bank Act for the purchase of the assets of any bank by another bank. That is, no provision was made for mergers oi banks, and prior to that time very few mergers took place.
In 1900 the Canadian Bankers' Association was incorporated by special act of parliament. The Bank Act was revised the same year, and 'by sections 24 to 29 it was provided that the Canadian Bankers' Association should appoint a curator to take charge of any bank that suspended payment. At the same time provision was made for the validation of certain by-laws of the association, so far as the winding-up of any bank which suspended payment was concerned.
Immediately following this legislative action the merger of banks commenced in dead earnest. I have before me a list of the bank mergers which have taken place since that time. In 1900 there were thirty-six banks. In that same year, immediately after this new provision was inserted in the Bank Act, the Bank of British Columbia was taken over by the Bank of Commerce. Then we have bank 78594-9
mergers averaging one per annum up to last year. In 1901 there was another bank merge*, another in 1902, two in 1903, one in 1905, one in 1906, one in 1907, one in 1908, one in 1909, one in 1910, one in 1911, two in 1912, two in 1913, one in 1914, one in 1917, one in 1918. two in 1919, one in 1922, one in 1923, two in 1924, two in 1925, and last year we had the merger of the Standard and the Commerce, leaving us now with ten banks. Of these amalgamations or mergers, it appears that the Royal bank has swallowed eight other banks, the Bank of Montreal six, the Bank of Commerce six, the Bank of Nova Scotia four, and La Banque Nationale one. I suppose it might be said that Canada is now in the hands of a financial octopus having ten heads- some of these soon to disappear if the policy of the government as carried out in the past is continued.
I have here a copy of the Financial1 Post of July 20, 1928. This was issued soon after the intention of the Standard to merge with the Commerce was made public. Dealing with the proposed merger the Financial Post says:
It was inevitable that the Commerce-Standard merger should revive discussion of other mergers. The definite statements by the executives of both banks that the merger was in line with the tendency towards fewer and larger banks in Canada was in itself enough to start tongues wagging. Even though there are signs apparent that the public wants no more of bank mergers, that does not stop the gossips from projecting other banking combinations.
I pause, Mr. Speaker, to appeal to you for better order in the house.


Hewitt Bostock: Order.


George Gibson Coote: The article continues:
Two "logical combinations at once suggest themselves. A "logical" combination is apparently one that will get by the Minister of Finance, who has declared himself as opposed to shifting the balance in banking as between Montreal and Toronto. Thus. Toronto banks may merge only with Toronto banks and Montreal banks with Montreal banks.
In Toronto the four banks that are left out of the seven after the Big Three-Montreal, Royal and Commerce-have been eliminated from discussion are the Nova Scotia, Dominion, Imperial and Toronto. A few years ago there was talk of a merger between the latter three. This has been revived, though probably to the embarrassment of the officers of these banks who declare that such a merger is purely hypothetical.
Such a merger would provide a bank with total assets of $400,000,000 as follows: Dominion, $151,000,000; Imperial, $147,000,000; Toronto, $142,000,000.
In Montreal there are only two banks outside of the Big Three, the Banque Canadienne Nationale and the Banque Provinciale du

Bank Act-Mr. Coote

Canada. A merger of these two has been, from time to time, discussed but again quite unofficially. It is not certain that either side wants it. But both banks are French Canadian in aspect. Their combined assets would total over $200,000,000. The figures follow: Canadienne Rationale. $119,000,000; Provineiale, $55,000,000: Total, $201,000,00.
Neither of these combinations would provide a bank to rank in size with the Big Three, although they would be substantial institutions for all that.
About the only way that a fourth large bank in the three-quarter billion dollar class could be set up by a merger of the present banks would be in the union of the Nova Scotia, Toronto, Dominion and Imperial. The combined assets of these four would be as follows: Nova Scotia, $260,000,000; Dominion, $151,000,000; Imperial, $147,000,000; Toronto, $142,000,000: Total, $700,000,000.
This would create a bank that would be practically neck and neck with the Commerce.
All four of the banks mentioned have their administrative head offices in Toronto.
If, as leading bankers say, Canada is to get down to a few large banks, it must be by merger of the existing banks and the mergers above discussed are the "logical" ones.
But several things stand in the way of their consumrhation. The shareholders and directors of the banks referred to may prefer to let each bank go its own gait, as they are doing very successfully right now. Or the government might not permit further mergers, although its policy in that regard seems to exist only for the breaking thereof. But what is more important, and probable, the public may have had its fill of mergers and refuse to accept any more such combinations without expressing its disapproval.
But as the Bank Act now stands how can the public prevent any further mergers? The matter is absolutely in the hands of the Minister of Finance once banks make up their minds to merge, and it does seem to me, sir, that the policy of the present minister is to approve all the mergers that are asked of him. He seems to be, as the good book says-


James Alexander Robb: Will my hon. friend allow me to interrupt him right there? No, that is not my policy. My policy is to ensure such conditions that the treasury of Canada will not. again be called on to look after depositors as it was in the case of the Home bank.


George Gibson Coote: On one occasion the Minister of Finance, Mr. Speaker, stated that the control of banking in this country rested in parliament. And yet we allowed the Home bank to get into a position where no other bank in Canada would take it over, even though considerable value might be placed on connections of the insolvent institution. It seems to me very strange if our policy of protecting our bank depositors relies on the absorption of the weak banks by the strong, because there fs only one end to that policy-elimination. Finally we shall come down to the point 
where there are only two banks left. Should one of them get into difficulties, our only recourse will be to allow it to merge with the remaining bank. Then when that sole bank through bad management gets into difficulties, I should1 like to know who is going to take it over.


Mr. GARDINER:: The government.


George Gibson Coote: I listened carefully to the Minister of Finance to-night and his sole objection to the bill which is proposed is that it removes from his hand the method which he uses, or which he used in the past, to protect depositors. The best safeguard for depositors is sane management of the banks, and the best way to secure sane management is to have some thorough outside inspection of the banks.
Outside or government inspection was urged by one of the most prominent bankers in Canada before the banking committee in 1913, but he was opposed by the majority of the members of the Canadian Bankers' Association. It was urged strongly in the year 1923 but was refused by the department and opposed by the bankers. It came in the year 1924 or 1925 as a result of the failure of the Home bank. I presume the bankers felt . that something was needed to allay the fears of the public, and to meet their demands government inspection of banks was granted. Now we have an inspector general of banks. Surely a gentleman with such a high sounding title, and with all the money with which the government in these prosperous times could furnish him to secure a good staff, could under the Minister of Finance, create a situation under which depositors would not all the time be facing this risk of loss about which the minister speaks when w'e suggest any amendment to the Bank Act. On almost every occasion the minister brings up that question. Why could we not have some security for deposit holders without losing the great majority of our banks? Now we are reduced to ten. This article in the Financial Post suggests the next logical merger, and if that takes place we shall lose three more banks and the total be reduced to seven. One of these banks is a small one in Saskatchewan, and two of them are also what the Minister of Finance would call small banks, located in the province of Quebec. Excepting these, we then have the big four. The big three at the present time control some 73 per cent of the assets of the banks of Canada. If we keep on with this process for another ten years we shall be reduced to

Bank Act-Mr. Coote
perhaps four banks, while it is quite possible that we may find ourselves down to three or even two.
We know that as a general rule there is one dominating personality in each bank; he dictates the policy of the bank; and if you have four big banks in Canada controlling over 90 per cent of the assets of the country- they do not own them, but simply control them-then these banks will have more control over the country than all the governments in Canada put together. They can absolutely dictate to the government. Finance is the life blood of a nation, and the control of finance is like the control of the heartbeat of the human body. There is absolutely no question about it. Business to-day is dependent upon credit. Any five men who control the finances of the country have complete control not only of the financial but of the industrial life of Canada.
I find, according to Hansard of last year, in a speech made by the horn. membeT for Winnipeg North Centre (Mr. Woodsworth), that at that time the president of one of our large banks was on the directorate of, I believe, 135 companies. There is no telling how many companies he is directing to-day; I am told it is over 200. That is just a slight indication of the situation which it seems to me is facing Canada.
The time-so far as we can see-is not very far distant when quite probably five men will be able to sit- down together and determine what the policy of Canada shall be. It is not improbable that five men will say, "There are certain industries which we will finance and others which we will not finance"; and what government then will be powerful enough to free us from such a combination?
I wish to give the Minister of Finance credit for the very best intentions, but it does seem to me that his policy in regard to bank mergers is no policy at all; it is just a matter of drifting along, and when some banker tells him that it is necessary in the interests of Iris bank that it be allowed to merge with some other bank he says, "All right; I must protect the interests of the depositor". But surely there must be an end to a policy of that kind. Are we going to allow the country to be governed by four banks? I presume someone will rise and say that this is what they have in Britain-that they have the big five there. Well, the big five may suit Britain, although I doubt it very much; I believe they would be much happier, they would be better off, with fifty. But Canada is distinctly a different sort of country from 78594-9J
Britain. We have a country four thousand miles across. The credit of almost every man, every corporation, every institution in Canada is really controlled, and their finances directed, from Montreal or Toronto. It is bad enough while we have ten banks, but it will be infinitely worse when we get down to three or four.
Canada, if we had had a natural growth in our banking system, would to-day have at least one hundred banks. We ought to have grown from thirty to a hundred; we have grown the wrong way, from thirty to ten. I should not feel quite so much concerned about this, if I could see that the government had any policy to prevent us from drifting 1o the point where we shall be reduced to two or three. Some people may say, "That is all right; we shall get to nationalization of the banking system all the sooner". It seems to me that this belief is almost like that of a miner whom I came across in the election of 1921. In one of the coal mining camps this man was electioneering in a hotel and he said, "Vote Conservative; that's the rottenest party there is, and if you put them into power there will be a revolution all the sooner". I do not believe in that sort of policy; I believe in tackling problems before they reach that stage.	_
I do not wish to labour the point, but I would ask the Minister of Finance to consider seriously allowing the bill to go to the committee, and if the committee does not see fit to adopt it as it stands it might amend the bill in some way with a view to preventing further mergers and maintaining in Canada such splendid banks as for instance, the Bank 'of Toronto. I do not think the Bank of Toronto has ever swallowed another bank in its life. It is a fine bank; it has had a steady growth. None of the so-called big three has had a natural growth at all. These banks are like the big fish that swallowed the little fish; and sometimes the big fish had to strain very hard to swallow another almost as large as itself.
The Minister of Finance talks about the big bank being stronger. If he will look into the records, of the banking committee in 1923 he will find that Sir John Aird .made the statement that 'the big bank was not necessarily a bit safer than the small blank; it all depended on the management. I believe that a bank can become so big that there is danger for the depositors. We are creating a lot of super banks and I doubt whether we can find supermen to run them. It is much easier to create the super bank than to find the superman.
Bank Act-Mr. Irvine

I am going to appeal to the Minister of Finance to allow the bill to go to the committee. He need not necessarily approve the principle of the bill, but certainly he must feel in his heart that the policy which he has been pursuing will lead us into a situation which, I am sure, he realizes will not be a happy one for the country. There was an pld bard in Scotland who said that if he could write the songs of a nation he did not care who made the laws, but that was a long time ago. Many years afterwards the late
J.	P. Morgan is said to have remarked that if he could control the finances of the nation he did not care who made the laws; he was of a much more practical turn of mind. We are rapidly approaching that position where a few men are going to control the finances of this country; it may be that one personality will dominate them all and become in effect a sort of financial Mussolini. This situation, I am satisfied, is utterly distasteful to a democratic people such as we have in Canada, and I am sure our people will not stand for it very much longer. Again I appeal to the Minister of Finance to allow this bill to be sent to committee.


William Irvine: I am sure the house listened with great interest to the very broad and important question opened up by the hon. member for Macleod (Mr. Coo'te), and I think I agree with the general principles held by the hon. member in regard to finance. At the same time I am not clear as to what real value would be gained by letting this bill go to committee unless the house authorized that committee to do very much more than is suggested in the present bill. If someone were to move an amendment, to the effect that the committee be instructed to investigate the whole question of bank mergers and make a recommendation to the house as to what might be done, then the committee woidd have a reference wide enough to permit it 'to go to work, but with the three clauses in the form in which they appear in the present bill I am not clear whether we would be any further ahead by sending the bill to committee.
In my opinion the Minister of Finance (Mr. Robb) probably has done all that could be done under the circumstances in respect to bank .mergers. He might have a much better policy in his head than the one he has been practising in respect to bank mergers, but circumstances would not permit him to follow it, and he has been practising the only one possible, in my opinion. It is not the policy of the Minister of Finance we must look at but the policy of the bankers, and IMr. Coote.l
their policy in turn is being determined by great forces which the bankers themselves are unable to control. The bankers are in the midst of a great, sweeping, evolving system which they must obey, and I do not believe that any legislation whatever can Stem the inevitable tendency towards mergers. I do not know that it would be safe to try it; I know that to-night I would not vote to ask the Minister of Finance to stop all mergers. I think it would have been much better if, for instance, a merger of the Home bank had taken place about five years before the smash came; that would have suited me a great deal better than what actually happened.
In making these remarks I am not taking issue with my hon. friend who has just taken his seat. I know he is trying to find -a solution for a great problem, but I merely observe that I do not believe that solution can be found in an attempt artifically to stem the tendencjr to mergers. I believe that tendency will grow; it is the spirit of the times; it is cooperation, if you like. These bankers are simply cooperating as such. Unfortunately when bankers cooperate we call it a merger, and when, we merge as farmers we call it cooperation. I believe the bankers are cooperating and I do not think we can stop them; I would not do so if I could. But I want to make a suggestion here which might go a long way towards doing something like wlhat the hon. member for Macleod has in mind, although I am not speaking for him because he has spoken well for himself. I believe that if we had a greater socialization of credit we would overcome much of the difficulty with which we are confronted at present.
You may ask what I mean by the socialization of credit; let me given an illustration. There are great industries in Canada to-day which, of course, find it necessary to use their credit to finance themselves, and they must go to banks to secure that credit. If the banks have not sufficient financial credit at hand they must repair to the Treasury board for support and the Finance Act will in that case be utilized to enable the banks to carry on and meet the obligations of the different financial institutions to serve industrial and commercial requirements. Then we have great organizations like the wheat pools of the west. The wheat of the west is credit, and the only way the wheat pools can finance at present is through the banks, which take the credit of the wheat pool to the Treasury board to secure the necessary finances to meet requirements. So I suggest to the Minister of Finance chat it might be possible for the wheat pool or any other organization or cprporation having

Bank Act-Mr. Bennett
sufficient credit to go direct to the Treasury board and secure for themselves the same credit under the Finance Act which the banks secure aid which the banks re-loan to these companies.


James Alexander Robb: Does my hon. friend wish an answer now? If large organizations such as the wheat pool would encourage small banks such as the Standard bank perhaps we would not have the necessity for mergers.


William Irvine: I will admit that that is nice advice, but it does not answer my question.
I still hope that the Minister of Finance will give consideration to that suggestion. Certainly it is not revolutionary; it is being done now, only it is being done through a second or third party. I cannot see why the wheat pool, having the greatest credit existing in Canada, cannot go direct to the Treasury board and use the very same act used by the bank from which they borrow, together with the same security used by the bankers, in order to get the necessary credit desired by the Bool. That could be done not only by the wheat pool but by other organizations or corporations having sufficient credit, and I think it would stem to some extent the tendency toward financial monopoly, which must result from continued mergers if nothing constructive is done. In this w'ay credit would be socialized to a very large degree, and while that would not prevent bank mergers it would prevent the centralization of financial control which :s feared by those who oppose the present tendency to bank mergers, and which is the sole danger of the present process.


Samuel William Jacobs: Does not the hon. gentleman agree with me that the business of a government is to govern, although sometimes they do not do it very well, and not to go into the banking business?


William Irvine: That is a very glib phrase with which I have no hesitation in agreeing, but the problem arises of what we mean by governing. At present the financiers are doing the governing; they govern the government. If I were the Prime Minister they would be governing me and they would be governing my hon. friend too if he were in that position. It is not a matter of which party is in power or who is Minister of Finance; it is a maft.er of recognizing facts and facing them squarely. I do not blame the financiers for the present situation; I do not blame anyone any more than I blame myself and fellow citizens. It is our responsibility. Bankers were born under this system; they have lived under it and [DOT]have been a little more successful than I have been, perhaps because they were better
fitted to survive under the system. I am not disputing that, but I am disputing the system itself and suggesting what I believe to be a better one, and still I adhere to the principle referred to by my hon. friend opposite, namely, that it is the business of a government to govern. It would be governing to socialize credit and prevent monopoly of credit instruments, and it would be the business of the government so to do. At present it is the necessity of the government to do what the *real, invisible government tells them to do.


Richard Bedford Bennett: The last observations of my
hon. friend from Wetaskiwin (Mr. Irvine) indicate how difficult it is for the best informed minds to accommodate themselves to the facts. To assert that there is an invisible government in Canada is to assert that the people themselves are invisible, which is not the fact. During my practice in western Canada for many years, nothing impressed me more than the willingness of the people, once they understood the situation, to realize the soundness of the Canadian banking system. When the hon. gentleman from Macleod (Mr. Coote) made the observation he did, I could not help but think that he knew better. I recall a constituent of his coming to my office on one occasion and complaining of the action of the banks. He said he could not get any money from the banks and he thought they should lend him some. I said to him, "Let us see what you mean. Where does the money come from?" He said, "They make it down east." I said, "Is that your view of it?", and he replied, "It is those rich men in Montreal and Toronto, and they will not lend it out here." I then said to him, "Let us investigate this. Do you realize that the capital of the bank, or the stock of the bank, is the money that certain people called shareholders have put into that bank? That money is never available for loaning purposes, it is all tied up in cash which must be available at any moment, or in bank premises and legal tender, which is the same as cash. The money they lend is the money their depositors lend to them. Now tell me what you offered as security." He told me he did not have anything, and I said to him, "Would you lend your money to any person who was situated as you are?" and he told me that he would not, and that he had never thought of the matter in that way.
Although it may seem a little tedious and unnecessary, and it would be under ordinary circumstances, I am going to point out to this house that the capital of a bank belongs to the shareholders. That capital is subscribed
Bank Act-Mr. Bennett

and paid under the provisions of a statute of this country called the Bank Act. I have in my hand a return for the month ending December, 1928, which gives full information as to the chartered banks. It will be observed from this return that, with the possible excerption of the Weyburn Security bank, in no instance is the cash on hand, legal tender and bank premises less than the paid up capital and reserve of the bank. For instance, the Bank of Montreal had on hand at that time $31,000,000 odd of current gold and subsidiary coin. It had on hand $54,700,000 of legal tender which it had bought and paid for, which, added to the previous amount, makes a total of $85,000,000. The paid up capital and rest of the bank were a little less than $60,000,000, and the bank premises were valued at $11,000,000. The total of the cash and bank premises is $96,000,000, which is more than shareholders' capital and reserves. If you will run through this return you will see the other banks are in the same position.
The banks have no shareholders' money to lend, and let us have no misunderstanding about that.^ It is wrong to attempt to inflame, by gibes and cheap sneers, the opinion of those who do not understand the fact, the class of people who say that they cannot get money and allege that certain rich men are doing so and so, because the truth is that the banks of Canada have in their treasuries, m current gold and silver coin and Dominion of Canada bank notes, and in their bank premises, more money than the paid up share capital and the reserve, which is mostly accumulated profits.
If that be so, on what does a bank live? It lives on one thing only, and that is its deposits, and not the shareholders' capital. Any man who has stood as I have, on a pay-day of the Canadian Pacific Railway Company, and watched the long file of men making small deposits of money, must realize the collective power of these savings. On these savings and on the free balances which they may have depend the ability of the bank to carry on its business.


Mr. WOODSWORTH:: Do I understand the hon. member for Calgary (Mr. Bennett) to say that all the money the banks lend is drawn from the deposits placed by the depositors in the savings department?


Richard Bedford Bennett: I included the free
balances of those who utilize the banks for the purposes we all do. Then there are the deposits known as "notice deposits" which are not of quite the same character as savings.

The banks of 'this country are carrying on business with the deposits of the people of Canada, the money in the savings accounts, the open accounts and money held on deposit receipts.
What is the relation between the bank and its customer? The bank borrows money from the customer,, and every time I write a check I am giving effect to a contract between the bank and myself that whenever I make a demand upon my account the bank will honour that claim thus made upon it.
What is the business of a bank? The business of a bank is to maintain the proper equilibrium 'between what the bank borrows from the people and the'lendings of the bank to its customers. The science of banking is the maintenance of an equilibrium between time loans and time deposits, on the one hand, and demand loans and demand deposits on the other. That is the whole science of banking.
That being so, let us go a step farther and ask ourselves just what transpires in connection with matters of credit, to which attention has been drawn. A customer comes to the bank and asks for a loan. The bank asks him what security he can give for the loan, and his answer may or not be adequate. The banks are very particular because they are not lending their own money. These gentlemen suggest that the banks are lending the shareholders1 money down in Montreal or Toronto.
'Some hon. MEMBERS: No, no.


Richard Bedford Bennett: That may not be the case here, but they do in other places. Whose money are they lending? They are lending the collective savings of the Canadian people and no banker has a right to lend money without taking adequate and proper steps to see that it is safeguarded and can be returned. If a banker is to carry out this obligation to his depositors, he must maintain a proper relation between time loans and time deposits and demand loans and demand deposits, otherwise the bank will be insolvent. That is the case, not because the bank is bankrupt, but because when my demand is made upon the bank in the form of a cheque, the bank cannot supply the money. Why? Because the improvident manager has lent it on a three or four months' note which has not been paid. When the Minister of Finance referred to some of the difficulties he experienced with the banks it was not that if time could have been given to those banks, the difficulty could not have been worked out, but because what happened in one case of

Bank Act-Mr. Bennett
which I have occasion to know-and I suppose I could mention it with great frankness as the minister has done to-night-was that one of the large banks in Montreal was due to close its doors on Monday morning and it was taken over by another bank because the department agreed. Why? Because on Monday there were outstanding cheques held by other banks amounting to several million dollars that would be presented to that bank at ten o'clock on Monday morning and the treasury of the bank was without money because the bank had lent its money to customers who could not repay in accordance with their promises and so there was no money to pay the cheques. In other words, to use a banking term, the bank's assets were frozen; they were tied up in notes that could not be paid, in demand loans that could not be met. The result was that the bank either had to close its doors on Monday morning or to be taken over by another bank. What did the government choose to do? Just what the Minister of Finance did, and I ask my hon. friends to the left: Is there anyone who would have 'done otherwise? Would anyone of the hon. gentlemen opposite; 'would the hon. member for Northwest Toronto (Mr. Church) for a single moment say he would have let a crisis be precipitated in this country by allowing one of the large banks which was unable to meet its obligations, close its doors, a crisis such as we have never before seen in this country, or say: Let the Bank of Montreal take over that bank?


George Gibson Coote: Does my hon. friend know that since that time we have established in the government offices here an inspector general of banks to see that these banks do not get into such an improper position?


Richard Bedford Bennett: That is not the fact. The fact is that when he finds such a situation exists, he makes his report to the minister, and it is because he did find that with respect to the Union bank that the minister went to Montreal. For what purpose? To save the depositors of the Union Bank of Canada.


George Gibson Coote: He did not have any inspector at that time.


Richard Bedford Bennett: Yes, he did. That was one of the first jobs the inspector did. He went out and found that bank in the position in which it was. If my memory serves me aright, I think this was just after his appointment.


James Alexander Robb: I think my hon. friend is right, but I am not sure about the inspector. I know that we sent a man out there.


George Gibson Coote: The condition which existed in the bank certainly occurred before we appointed the inspector. It may be that the inspector found it out.


James Alexander Robb: My hon. friend must not run away with the idea that we did not have inspectors and confidential men to look over these banks long before Mr. Tompkins was appointed.


Richard Bedford Bennett: That has been done for many years. The hon. member for Macleod seems to forget that within the last twenty-five years there has not been a time when the Department of Finance has not, through its agents, been inspecting the condition of the banks, not because it had any interest in the shareholders of the banks but because it was fearful that a crisis might be precipitated in connection with our financial situation owing to their not being able to meet the cheques the depositors would draw on their own money.


Charles Avery Dunning: Before my hon. friend
leaves that, there is a point that I would like him to elucidate in his very capable address. There apparently exists the idea that a system of inspection can prevent such a situation from occurring.


Richard Bedford Bennett: The hon. member for
Macleod, who is an old banker, apparently suggests that the appointment of an inspector general might be able to obviate the difficulties to which allusion has been made. That is like locking the door after the horse has been stolen. The loan is made and it is when the inspector general discovers a situation that will precipitate a crisis that action is taken. That is his business. He cannot be in every place in Canada at once and watch every loan that is to be made for the purpose of examining whether it is a good loan or not. He cannot substitute his knowledge for that of the local man with relation to it. The inspector of the bank does one thing; he determines from a study of the securities of the bank and the deposits whether or not that equilibrium is maintained between time deposits and time loans and demand loans and demand deposits that is essential to maintaining the solvency of the bank. That is all he does, as I understand the matter at the present moment. A very undisceming electorate did not afford me that opportunity to continue to follow the matter up as I should have liked in 1926, and my hon. friend succeeded me without my having that personal knowledge of the transactions that I would have gained had I remained in that position a little longer.

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Mr. Bennett
At any rate I desire to point out that you will have to concede the first two of those premises:	first, that the bank's capital, the
shareholders' capital, is not available for loans to its customers; and, second, that loans to customers depend entirely upon deposits
hat do deposits in a bank depend upon? They depend upon three things: first, competition. That is, if it is the only bank in the community, it receives all the deposits.
Mr. COOTE Hear, hear.


Richard Bedford Bennett: I am glad to see my hon. friend is a monopolist in that particular. I assume he approved of that general doctrine in the community in which he directed a bank so successfully for a time, and we will pass to the next, point.
The first point is that of competition, location and matters of that kind. Then comes what is almost as vital a point, the question of management. Why is it that some managers draw large deposits and some less? That is where the personal factor enters into the business. There is always in business the personal factor that cannot be eliminated. The third point is what I am pleased to call the prestige of the bank. Given competition, given management, there are some banks that draw deposits more readily than others because of their prestige, because of their long known solvency, because of the confidence the people have in them for reasons that cannot be exactly described, but which may be called the franchise value of the bank. There are those three factors. Let me give this illustration to the house. A small bank comes into Alberta for the first time as one of the banks did a few years ago. It made loans to three of its customers in that province in Edmonton and Calgary and the sum total of the loans amounted to more than its rest or reserve. They were real estate loans. They wanted business. The result was that bank either had to go into the hands of a liquidator or the depositors had to be saved by that bank being taken over by another bank, and it was. The Minister of Finance knows the bank to which I refer.
What has happened with respect to every bank that has been merged or amalgamated with another ? What has happened has been that on analysis you found that bank either stagnant and not increasing its deposits or unable to meet the demands made upon it by its customers because of frozen assets or matters of that kind. Therefore it had to choose one of two things. The management had to decide whether or not they would be untrue to the confidence reposed in them by the public who put their money into the bank 
and betray the depositors, or amalgamate that bank with some other bank. There was nothing else left for them to do. I put this to my hon. friends to the left who have talked so glibly about this question: Would you have the manager of the bank continue to keep the sign on the door until such time as it would be compelled to close by reason of its being unable to meet the cheques diawn upon it, or would you have them save the depositors through the joint action of the bank and the government, by amalgamation with another bank?


George Gibson Coote: Does my hon. friend mean to say to the house that in his opinion the great majority of the banks that have been merged since 1900 would have been forced to close their doors if they had not been merged?


Richard Bedford Bennett: I would put it this way: To the extent of my knowledge and from what I have been able to learn from the Finance department in this country, I have no hesitation in saying that that would have been the result, perhaps soon, perhaps a little later, but ultimately the result. When a bank reaches the point where it can no longer attract deposits, that very moment that bank's life is through.


Charles Avery Dunning: It must contract its loans.


Richard Bedford Bennett: I was just coming to
that. One of two things must happen: It must either get money from some other source, or it must call in its loans so that it will be in a position to meet the demands made upon it, and the worst feature of it all is this, which every thoughtful man must realize, that at the very moment when the bank most needs its money to meet the demands made upon it by its customers who have become apprehensive or suspicious because of the character of its loans, it cannot get its money, because its loans cannot be paid. That is the real reason we have bank mergers in this country.	Mr. Reginald
McKenna came out to New York some years ago and made a speech, in the first paragraph of which he said, as I recall it: "The difference between us in Great Britain and you in the United States with respect to banks is that our banks are joint stock companies and are conducted as such, while yours are in an entirely different position." We in Canada do not run our banks as joint stock companies only because we have provided that the banks have power to issue paper money, and to that extent, because they have a franchise, we have exercised control and super-

Bank Act-Mr. Bennett
vision and regulation over their business. Now if you have followed me up to that point, you have your bank dependent for its very life upon the deposits which can be attracted to it. Its ability to attract deposits depends upon three factors: (a) competition; (b) management; and Oc) the prestige of the bank.
Now assume that you have increased competition. To that extent you have a diminution of the deposits of the bank at that point. If you have indifferent management, succeeding vigorous and excellent management, you have the same conditions, and if something happens, as the Finance Minister said a few moments ago, to touch the prestige of an old and established bank as it did in Toronto, you have the same result. You have the drying up of deposits by their withdrawal, and you have not that flow of new deposits that enables you to keep pace with the demands made upon you, because you have frozen credits in the way of loans that are not being paid, and which you cannot call in. Under those circumstances, what is a Finance minister to do? I read the newspapers, and I see that it has been suggested that the minister acted improperly. I have listened carefully to what the minister has said tonight. and he discharged his duty-he had nothing to do with the shareholders at all, not a thing in the world; this government has no interest in the shareholders of a bank -he discharged his duty to the depositors and to the treasury of this country, and if he had failed in either, he would have been derelict in his duty.
This bill of my hon. friend for Toronto Northwest (Mr. Church) would substitute parliament for the minister. Now I ask the house this one question: What would have happened had parliament been substituted for the minister when the Merchants' bank was in difficulties?


Herbert Bealey Adshead: May I ask, for information only, if it is not the case that when a bank takes over a smaller bank, it must use the money of its own depositors to meet the cheques of the bank that has closed its doors, and therefore it must consider that the assets of the bank that has closed its doors are greater than its liabilities? Is not that the case?


Richard Bedford Bennett: I am glad that my hon.
friend mentioned that. For some years I was a director of a bank, and I am a very substantial shareholder in some of the banks yet. Do not have any misunderstanding about that. I say that perfectly frankly to this house,
because legislation that affects banks touches them all, and as I am not a shareholder in them all, I thought that I might retain my interest as a shareholder, occupying the position I did; but I terminated my directorship. I can answer the question of my hon. friend quite readily with reference to two, if not three, transactions. On investigation, the assets of at least two of the banks absorbed by larger institutions were believed to be less than their liabilities; that is, if the assets had to be realized on within one or two years, or perhaps three; but the banks believed that if they were given time they could work the situation out and make the assets meet the liabilities. I can give my hon. friend particulars of those transactions if he desires, because there are two or three instances of which I have particular knowledge.
That being the case, what must the minister do under those circumstances? I notice a lot of discussion in the newspapers about bank mergers, and I am going to discuss the question of credit in a moment. But- if I am right in my premises, the people of this country who deposit their money in the banks, control the banks, and if in community A, B or C, or in any province in this country, there is the fear that this or that bank is doing other than it should, the depositors withdraw their deposits and put their money in some other place.


Herbert Bealey Adshead: In the case mentioned
by my hon. friend the assets of the bank were equal to its liabilities, or would be in a year or twro; but would a bank be taken over if its assets could not eventually meet its liabilities?


Richard Bedford Bennett: In two cases they were
because, as the Minister of Finance has himself said, he regarded it as the duty of the larger bank to take over the weaker one, believing that with its large resources it would be able to work out the situation in two or three years. They had a duty to Canada to prevent a disaster happening, and they acted accordingly.
Some of you may be greatly interested in reading the judgment of the Privy Council in connection with the old Ontario bank. The judgment was rendered by Lord Mac-Naughton, and the question was whether the Bank of Montreal had taken over a bank, or had merely put itself in a position where it became liable for certain obligations of that bank. Lord MacNaughton, in delivering judgment, eulogised the public spirit of that bank in taking hold of a situation that otherwise would have brought ruin on the community.
Bank Act-Mr. Bennett

In one village the bank put up a painted sign. "This bank has been taken over by the Bank of Montreal," and the run on the bank stopped and the depositors were saved from what might have been almost irretrievable ruin. Hon. gentlemen will find that judgment in the law reports. I shall be glad to give them the citation; I do not carry it in my head at the moment.
Some of the newspapers in this country have suggested tha large interests, whether on the government side or on the opposition side, see to it that opinions shall be expressed favourable to what the government and the minister have done with respect to bank mergers. Mr. Speaker, once more I assert, for the reasons I have indicated, that the minister has no concern about the shareholders whatever, except in so far as they have to vote to carry into effect the agreement between the two banks. His duty is to protect the depositors of the bank from what might be disaster. It may be that the disaster would not come this year or next year, and in one instance it might fairly be said that it would not have come for two or three years, but the second factor I mentioned with respect to deposits prevailed, the question of management. Men had said: "We feel we cannot longer carry on; we feel we have reached the point where we desire to surrender these duties and obligations. It is too great a burden for us," perhaps by reason of age or illness or matters of that kind. When you have that situation, you have a drying up of deposits. The situation is put frankly to the minister. I have seen the letters written in days gone by, and the minister has to do one of two things. He asks himself:	Shall I permit these people to go
on or not? I know this. Differing with the Finance Minister as I do in his attitude toward most questions, I think every member of the house will agree with me that the Minister of Finance has approached and will continue to approach that problem with only one thought, and that is: What is necessary for me to do to save depositors from loss and the treasury of this country from being raided?
Now. sir, I .put this to you. If, having appointed an inspector general, and a bank met with disaster, would you not get exactly the statement made by the member for Macleod (Mr. Coote) to-night. He would say: Of course the country is responsible for this: they have to pay the depositors, because if you had an inspector general who was on his job this would not have happened. I say

to you to-night, if by a change of the wheel of fortune hon. gentlemen to my left should be in power, and one of them from Battle River (Mr. Spencer) were minister of finance, could he sleep at night if he refused to permit the fusion of two banks if he knew the depositors would meet with disaster as a result of his refusal. It is all right, Mr. Speaker, for my friends to go from one end of the country to the other and in jibing tones say:	Of course the leader of the opposition
agrees with the Minister of Finance; he is a big interest man. But, sir, I feel that when the people intelligently grasp this problem their judgment will be sound, and therefore I support the Minister of Finance in the attitude he has taken with respect to this question.
The other day from inquiries I had made I learned that even where mergers had taken place, one of the big three or the big four that the member for Macleod referred to immediately opened in the towns where, before the merger, there was more than one bank.
Credit, about which we hear so much, depends upon many things. The Hate J. P. Morgan is supposed to have said that he regarded character as a more important factor in determining the credit to which a man was entitled than his assets. This is partly true. But wherever in remote western communities there is a bank, in not one instance-and I have acted for Canadian banks during part of my life in one capacity or another and have been .closely associated with them-I say there is not one of those banks that to my knowledge has not been ready and willing to give credit to any settler in the community, provided always, on an analysis of conditions, he possessed high .character. Sometimes a little security was desirable, but if a settler possessed high character the bank managers in their judgment believed they could safely lend him somebody else's money. Ah, Mr. Speaker, somebody else's money I Will the house please keep that in mind? Somebody else's money. And how often we are willing to be generous with other people's money! That is the basis of the whole problem. Credit, so far as the banks are concerned, consists of the determination of this single question of the management: Are we warranted in lending the savings of widows and orphans, mechanics, machinists and other workmen to the man who applies for a loan? That is the whole question in relation to the chartered banks of this country, and when

Bank Act-Mr. Bennett
the answer can be "yes" to that question, credit is as free as air. Always men build up their reputation for credit to enable them to get money. They 'build up their credit over a long series of years by the promptness with which they pay their debts, by their known habits of integrity and honour, and their general reputation in the community in which they live. Sometimes I have said to banks with which I was associated: You are warranted in lending this man any sum he wants to borrow, because he would not take other people's money if he felt he would not be able to repay it.
We have hedged our Bank Act around with many restrictions. We have limited the rate of interest, which is not always observed; we have limited the amount of loans that may be made to one class of customer to a certain percentage of the bank's capital; we have determined that banks may not lend money on real estate; that they may not make advances on the security of grain and other commodities except as specified. In the restrictions we have imposed with respect to the loans which may be made by banks we have to some extent actually invited mergers. Why? Because in these days of large accounts and great enterprises, if you go to one of the smaller banks and want to borrow a considerable sum of money, the management will say: We cannot do it; but if we are joined to another bank with its larger resources, then we shall be able to transact such business.
While I am on my feet there is just one other thing that I may deal with to-night, although I had not intended to, but it is somewhat related to- this matter. I have read that our banks aTe lending their money with great willingness in New York, and that it is hard to get loans in Canada. My friend from Wetaskiwin (Mr. Irvine) smiles; he has heard it so often, as have my friends to my left. Let us look at that for a moment. If the house has been good enough to follow me in my rambling observations, they will recall that the solvency of a bank depends on its ability to meet the cheques drawn upon their accounts by the people who deposit their money with it. This means that the bank must always keep in liquid form increasing sums of money, depending on the conditions of the times. If money lies idle in the bank it earns nothing, and of course you will get no interest then on your deposits. Banks must either employ their money or pay no interest on it. There is no large call loan market in Canada. So they loan this money on call in the city
where there is a large call loan market-the greatest in the world-where the loans by banks to brokers to-day are nearly six billion dollars. They lend this money because i.t is always available to meet the cheques drawn by depositors on their funds, and if they tied it up in long loans for three or four- months they would not be able to meet the demands made upon them by any depositor who drew his cheque against his account. That is the reason.


George Gibson Coote: May I ask my hon. friend
a question before he sits down? I wonder if he would care to express an opinion as to how many bank mergers we should permit in Canada from now on.


Richard Bedford Bennett: Now my friend from
Macleod has once more given evidence of his willingness to make that appeal to passion and to prejudice which is so essential for the carrying out of the propaganda in which he and others are engaged.


George Gibson Coote: Not at all.


Richard Bedford Bennett: When my friend talks
of how many bank mergers you will permit, he knows that first of all the shareholders themselves are the people who determine whether or not they want a merger, and that the Minister of Finance determines whether or not in the public interest and for the safety of the depositors permission for the merger should be granted. Those are the two things. First of all the body of shareholders, being the proprietors, must agree. The minister is not concerned with them. He is concerned about the depositors and the treasury. I am satisfied that I might ask my friend with equal force: How many people would you permit to grow wheat outside the pool? It is the same question. When you ask how many, you must always have regard to the responsibility that rests with governments and ministers. When I heard my hon. friend from St. Lawrence-St. George (Mr. Cahan) speak to-day as he did 1 realized that he was voicing a great truth. You can h-ave no progress if at every step and at every stage you are to say, "Men are actuated by wrong motives and by a desire to do the wrong thing for personal aggrandizement as against the public interest". When my hon. friend suggests that the time may come when the banks will have been reduced in number to one, I say that he shows little confidence, little faith in the integrity of the public men of this country in believing that
Bank Act-Mr. Spencer

there could ever sit in the great office of Minister of Finance any man who would countenance an amalgamation or a merger unless it were in the interests of the depositors and to prevent raids upon the public treasury.


Mr. H. E. SPENCER (Battle River):: The hon. member for West Calgary (Mr. Bennett) is not the only one who has come to the support of the Minister of Finance (Mr. Robb) in his decision to allow the last merger to take place. Although I am not in favour of mergers, at the same time I fully realize that they are in many instances, things which we cannot stop. We are passing through an age of mergers: we have the cement merger, which has gobbled up many small cement plants; we have the canners' merger, which put an end to the life of many a small canning factory; we have mergers all along the line. I cannot see that it is anything but a purely natural, evolutionary process, and it applies to bank mergers as well. I do not like to see them but I do not see how we can stop the process. I say candidly, in support of the action of the Minister of Finance, that I am quite sure he would not have stood for the merger had he not thought that it was in the very best interests of savings depositors. No doubt he supported it because he knows fully as well as I do the position of savings depositors in the case of the failure of a bank. I will not go into details; everyone can turn to the evidence which was given before the banking and commerce committee a year ago. The minister knows quite well that the savings depositor, in the case of a bank failure, stands a very small chance-and not the first chance by any means-of recouping himself 100 per cent. It did not surprise me to see the hon. member for West Calgary coming to the support of the Minister of Finance, and I congratulate the minister upon having obtained such support.
In what I am going to say on this subject, I intend to follow a very different line from that taken by the hon. member for West Calgary. A good many statements have been made with regard to depositors' money, and particularly the savings deposits of widows and orphans; and to my utter surprise the hon. member for West Calgary gave the house to understand that he believed that all loans were made from borrowed deposits. Furthermore, he rather intimated that most of these borrowed deposits were widows' and orphans' savings. It reminded me of a statement made in the banking and commerce committee by an hon. member of the house in 1923. Becoming rather tired of the tech-

nical discussion that had been going on, he said, " What is the good of our debating this question any longer? The fact of the matter is this: the banks have quantities of money in their safes. A man wants money and he goes and puts up some security; the banker then goes to the safe, gets an armful of money, brings it up and gives it to the customer." That gentleman spoke as though he belonged to the stone age.
I cannot appreciate the remarks of the hon. member for West Calgary to-night after the very able speech he made two years ago with regard to certain reforms which he recommended in connection with finance. Anyone who has given any study to this subject knows that we do not necessarily lend' deposits to those who want to have loans. I agree with a very able man who gave evidence before the banking and commerce committee in 1923, Major C. H. Douglas of London, England, who is recognized as one of the financial critics of to-day. He made the statement that it was not necessary for a banker to take deposits; he pointed out that deposits were taken as a smoke screen to cover up greater activities. I make this further statement, that a banker can take too many deposits. I will quote two other men to support my view that there is no necessity to take enough deposits to make all loans. You have only to refer to the statement made by Professor Adam Shortt to the Manitoba Agricultural College in 1919 with reference to the method by which loans were created. He told the students there that it was purely a matter of collateral being lodged with the banker. To-day we are in the checking period; cheques comprise 96 per cent of the medium of exchange. Professor Adam Shortt made the statement at that time that in the case of a government making a $15,000,000 loan through the bank, the promise of the government being a gilt-edged security, there was no draw on the deposits in the banks with which they dealt. You have only to turn to the other side of the Atlantic, to the Right Hon. Reginald McKenna, of the Midland bank, whom I was glad to hear the hon. member for West Calgary mention. That gentleman was quite open in the statement that the amount of money in circulation- and he referred to all mediums of exchange, including cheque money-was limited only by the wishes of the banks.
I should like to give an instance to show how money is created. A friend of mine wanted to buy some victory loan bonds in 1917. He had no cash but lots of security, and he put up twice as much security with the

Bank Act

Mr. Spencer
banker as he needed by way of loan. He was credited with the amount of the loan; and with its proceeds he bought a victory bond, and turned it in as extra collateral. His crops did not prove successful in the next year, and as he did not want to keep on paying interest on the loan, he sold the victory bonds, paid off his loan, and got his other security back. What was it that enabled him to buy the bonds? Nothing more or less than the security he had. Take another instance. One of our ex-ministers of finance, Sir Thomas White, once made the statement that one year during the war Canada not only surprised herself but surprised the world when she spent twice as much in victory bonds as all the money in Canada-and then, he might have added, we kept enough money to carry on all of our business, which was growing at that time.
It seems to me absurd to say that all the money we loan comprises savings deposits. When we give a bank a charter they have to have a capital of $500,000, of which $250,000 must be subscribed. As soon as the charter is given they are allowed to issue notes dollar for dollar, the only charge being the one per cent tax. Is it to be considered that until they begin to get savings deposits that is all the money they can loan? To me it seems absurd.
Mention was made of the Merchants' bank, that it was absolutely necessary to take over that bank. I well remember the matter coming up before the banking and commerce committee in 1923, and at that time bankers told us from the platform that there were enough assets to pay off all the debts of the bank with $1,500,000 to spare; I remember Sir John Aird and Sir Edmund Walker saying there had been too much hurry in taking over the Merchants' bank. I admit that banks have great privileges, and for that reason they should be responsible to the government. I do not know that the Minister of Finance can do anything else, or, that we could have these things settled in any better way between sessions, under present conditions, but the minister must be responsible to parliament for all details.
The banks have what is called a note privilege. A year ago the amount of government notes in the pockets of the people was about $41,000,000, while the bank notes in circulation amounted to about $184,000,000. I mention this fact because in case of a bank failure the notes outstanding of that bank are a first charge on its assets. Some hon. gentleman might say, "Oh well, that is taken care of by the double liability of the shareholders,"
but I want to say that that is not the case, because the shareholders do not always pay up. I found last year that the shareholders of the Home bank had not met more than fifty per cent of their liabilities. If we had, as I think we should have, a government monopoly of note issue, then we could dispense with the double liability, and the de1-positors would be in a much safer position. Of course we have a note circulation redemption fund, but this is more or less of a joke, because the amount obtainable from that fund if a bank fails is limited to the amount put in it by that particular bank. I have often thought, Mr. Speaker, that in our banking system there is room for something else, or someone else, in addition to the Minister of Finance and the work he does, and the inspector general of banks, and the work he does; we might have some sort of banking commission similar to the railway commission or the grain commission, to look after the peoples' interests.
I would like to draw attention to a matter which I had to take up with the Minister of Finance when Right Hon. W. S. Fielding occupied that position. I went to him because of the distress of a certain municipality in my constituency, at the request of the reeve, who wanted some money with which to operate their schools. They could not get credit from the banks; they had a large amount of money owing them from taxes, some $20,000, and they owed the banks some money, but not a great deal. They wanted to borrow enough to run their schools for that year and if they could not get it they would have to close their schools. They were refused credit; the schools remained closed and the reeve of the municipality wrote me. I took the matter up with the Minister of Finance, and he said to me, "Well, is that not purely a matter between the banks and their customers?" I consider that where municipalities or even individuals consider themselves ill treated by the banks they should have some body to which they can carry their grievances. Another case which comes to my mind happened in 1921, when orders came through from the east to shut down on all loans and to cut credit in half. I will admit that perhaps fifty per cent of the people in my district should not expect any more credit, but a large number of them had quantities of collateral and had an absolute right to credit. Because of the arbitrary rule made at that time by a far-off head office they had to cut down their business and make great sacrifices, all because there was not enough elasticity in our banking system.
Bank Act-Mr. Ladner

The hon. member for Macleod cited the very numerous mergers which have taken place, and the Minister of Finance claims it was necessary for these mergers to be permitted. I am not saying it was not necessary, but if it were, the system is not half so perfect as it is claimed to be by those who run it. I was sorry to hear the minister say that he would vote against this resolution; I would much prefer to see it go to the banking and commerce committee for discussion, because a valuable study might be made there. I only want to say again that I have every confidence in the action of the minister, and in the stand he has taken; I have not the slightest doubt but what he did the very best thing for the country under the circumstances, and, as he says, for the depositors, but the very fact that these institutions are continually asking for permission to merge seems to show me and should show this house and the people of Canada that something is wrong.


Leon Johnson Ladner: I have only a few words to say on this question. in which I have taken a very keen interest for some years. In the first place I want to concur in the stand taken by the Minister of Finance (Mr. Robb) in refusing to adopt the suggestion that all mergers should receive the approval of parliament. The exigencies of the situation at a particular time may well demand immediate action on the part of the Minister of Finance, and to delay the matter for the consideration of parliament might bring ruin and destruction not only to the bank itself but to a great many people. I was very much interested in the frank statement by the minister as to the reasons why banks are forced to merge, and I was interested also in the fund of information brought to our attention in the very able speech of my leader (Mr. Bennett). There was one observation in particular in the remarks of my leader which caught my attention, that in many cases mergers are brought about owing to the fact that an improvident manager lends to his customers in a manner and for a length of time which makes it impossible for him to meet the demands of the people who are entitled to their money, when they make that demand upon the bank.
It occurred to me that some of the consideration we gave to this question in 1923 might be of value now, and one of the remedies that could be used in meeting this situation would be the establishment in this country of a central reserve bank of rediscount. This institution could take the prime paper of a bank which, in the aggregate of

its liabilities, was in difficulties but which had sufficient assets whereby, with the cooperation of a central reserve bank of rediscount or a federal bank, it could be saved.
The deposits of our banking institutions are the life-blood of the organization, and likewise the life-blood of the economic activities of the nation. I would like to place before the house some data I have gathered during the past few years, indicating a situation which will ultimately force consideration by both the government and the public of some remedy.
Out of 82,558,000,000 of deposits in the banks of this country, no less than $2,084,000.000 are in the hands of what is known as the big four. I am not saying there is anything particularly wrong about that at the present time. As my leader said, I believe the banks of this country are in a secure and sound condition, but when you look back upon the course of events during a period of thirty or forty years you will see a line of action which is bound to lead to the situation where there will only be two or three banks left. The public through their representatives will have to find some way to avoid that course.
In the year 1890, thirty per cent of the deposits of the people's money in this country was in the hands of the four large banks, and 70 per cent in the remaining banks. At that time we had forty banks in this country. In 1900, forty per cent of the total deposits were in the hands of the big four, and sixty per cent in the hands of the rest of the banks. In 1923-and I ask the Finance minister to pay attention to this- seventy per cent was in the possession of the big four and 30 per cent in the other banks. In 1928, as of the 30th of June, not 70 per cent but 81 i per cent of all deposits was in the hands of the big four and 18J per cent in the hands of the smaller banks.
Let me remark here that this does not mean that the smaller banks are becoming weaker or insecure. The security and soundness of a bank is the relationship between its liabalities to the public and its assets and the competent and provident manner in which the bank is managed. A small bank can be just as sound and safe as a larger bank. The point I wfish to draw to the attention of the house is the constant deflection of a great quantity of the deposits of the people's money into the hands of the four large institutions.
Let us test this course of events from another point of view. The number of banks in 1890 was forty, and the total capital of all the banks at that time was $60,000,000.

Bank Act-Mr. Evans
To-day we have ten banks and the total capital is $123,000,000. While the capital has increased twice in thirty years, the business done by our banks has increased nearly ten times.
There is something very significant in the manner in which the capital has been placed. Out of $123,000,000 of capital invested in all our banks, leaving aside the reserve which is used for certain contingencies, no less than $79,000,000 is locked up in 'frozen assets, mainly bank buildings, leaving a net liquid capital of $44,000,000. To get a proper perspective on this matter, which I think is rather important, you must visualize as an inverse pyramid the liabilities of the banks. The liabilities, including the liabilities to the public, amounted to $3,300,000,000 as of the 30th June, 1928. As of December 31 of last year, they amounted to $3,455,000,000. That inverse pyramid of liabilities amounting to $3,300,000,000 is resting upon a net liquid capital of $44,000,000.
Applying this analysis to the relationship of net liquid capital to all liabilities including liabilities to the public, we find that in 1900 for every dollar of net liquid capital there were liabilities, including liabilities to the public, of 6ix dollars. In 1910 the proportion was one to fourteen; in 1923, it was one to fifity-five and in 1928, the relationship was one to seventy-five.
The point I wish to make in this regard is that over a period of forty years there has been a clear, inevitable course of the centralization of our banking institutions. I believe that a country as vast as Canada, with such scattered settlement and such diversified interests in industry, should have the maximum freedom in banking. Our banking institutions are granted a monopoly of certain rights in the banking business, and properly so. In my judgment, parliament and the government, the media through which these privileges and rights have been granted, have a responsibility to the public. In the face of that certain course of events it is the duty of the Minister of Finance and the duty of the government to give consideration to these facts and to forestall a situation a few years hence when there will be only two or three banks left.
How is that to be done? In 1923 I suggested to the Minister of Finance and to this house, and I am here to suggest it again, that the government should appoint some commission which, along with the bankers' association, could study this question so that some solution might be found whereby this country could adopt some of the principles of the federal reserve bank of the United States, Which might be applicable to our system and some of the rediscount principles of the Bank of England and make them applicable tin a practical way to this country through a central reserve bank of rediscount. This method could be used as a means of stabilizing or maintaining the existence of the smaller institutions instead of allowing them to be merged and to dwindle out of existence, and thus eliminate the field of competition.
I do noit think the bill of my hon. friend from Toronto Northwest (Mr. Church), covering this question of mergers, is sound from a banking point of view, and in that respect I agree with the Minister of Finance. My purpose in rising was to point out, and I wish to repeat, that staring the public men of this country in the face is a course of events over a period of forty years as clear as day. The question is whether they will realize their present responsibilities and duties by endeavouring to avoid in the future complications which will not be in the best interests of the development of Canada.


Mr. JOHN EVANS (Rosetown):: Mr. Speaker, I think the demand contained in this bill is a reasonable one and I wish the Minister of Finance (Mr. Robb) would let the bill go to the committee. I have had some experience with banks and to-night I am not at all in agreement with the description of banking that the Minister of Finance or the leader of the opposition (Mr. Bennett) has given us. The banks are a public institution; banking is a public utility, and I have pretty nearly come to the point -where I believe very soon this country will have to consider public or government ownership or control of all public utilities. I do not believe we can go on very long with a tyrannical institution such as the banks have become in this country during the last few years. There is a tendency at present, not only in the banking business but in other things, to ignore the decisions and the power of parliament. I hate the concentration of power in any form and I think this bill should go to the committee. But whether mergers are to 'be stopped, whether they can be stopped by the government, some way will soon have to be found whereby control of credit and direction of industry will not be in the hands of a handful of men as is the case now. The greatest evil which I see in the concentration of wealth and industry in Canada to-day is the power of directing credit, capital and industry.
Indeed, to relate some of my own experiences, a few years ago I visited five banks in my city with a bill of lading in my hand for a car of wheat worth at least $800 or $900, and I asked for an advance of only
Bank Act-Mr. Evans

S300. No bank would give me that amount. I needed the money to meet an instalment of a mortgage on my homestead. I am one of those who have gone through pioneering days and I have found it my experience in banking that if I wanted money very badly I could not get it, but since I do not want it I can get all I like. This is not as it should be. Why could I not draw $300 by handing over those securities worth at least three times that amount? At the time there were two renegades, one in the banking business and one in the grain trade that had established themselves here in Canada. I refer to the Home bank and the Grain Growers' Grain Company, who were going hand in hand for credit and business. If it had been the will of the bankers' association, they could have taken over the Home bank when it was in difficulties and they could have saved the depositors, but they did not choose to do that. The fact of the matter is that the Home bank would have been out of business in the year 1906 had it not been for a concern in Britain, ;he Scottish Cooperative Wholesale Company, which was at that time seeking to establish j, line of elevators to gather its own wheat in western Canada. The Home bank had become .nvolved a little and the United Grain Growers, which was the Grain Growers' Grain Company then, because of advances that had been received by farmers from other banks, considered their money unsafe when a cargo of wheat loaded at Port Arthur was already coming this way. They put a sheriff on that wheat, to hold it in the hope, I believe, that the ice would simply gather around the vessel fast enough to hold it there until the following' spring when they expected to put those two renegades out of business.
In that year too, throughout western Canada, a farmer could not borrow any money; he could not secure an advance on his car of wheat, and at that time the banks, railways, and all the speculating fraternity in the grain trade at Winnipeg had combined in a united effort to compel the farmer to use the country elevator and not the loading platform. Had it not been for the banks the efforts of the other concerns would have been useless, but the fact of the matter is-and the situation is to-day as it was then-our bankers are our grain traders, our railway directors and our directors of industry in other lines as well. It is this concentration of power that I hate.
Again I want to ask the Minister of Finance since he is now so concerned about protecting the depositors of the banks-and this was his excuse for not preventing a merger from taking place just lately: why was it that the

government did not protect the depositors of the Home bank? It -was known in 1916 that that institution was tottering to its fall and the then Minister of Finance had no other excuse for letting it continue than that it would not. do to bring on a bank failure during war time because it would create a panic in Canada. But every one of his friends knew that the Home bank was tottering to its fall and they got out from under the load, while the poor depositors and some of the shareholders as well had to suffer.
Government control of banks in Canada has been a farce, just a false hope of the depositor. It has been no security to those who put their money into those institutions. The responsibility for the trail of tragedies across this Dominion can be traced to the action of the Department of Finance regarding the Home bank. Let me ask: Why, only a few years before that, were the depositors of the Farmers' bank not protected? If the government has control, why does it not exercise it? The leader of the opposition says: "What can the minister do? He cannot wait for parliament." I am inclined to make the remark that what he must do is only what he is allowed to do. It comes down to this, that power is being concentrated in the matter of credit and capital. I think this question should go to the committee and be threshed out there, with a view to finding some means for the decentralization of control.
Motion negatived.



UNOPPOSED MOTIONS FOR PAPERS


Mr. ROSS (Kingston):: For a copy of all correspondence, letters, telegrams, orders in council, reports, and all other documents, between the government of Canada or any representative of the government and any other persons or persons, having reference to the lower lakes transhipping terminal.



BOARD OF GRAIN COMMISSIONERS

Mr. KENNEDY (for Mr. Garland, Bow River):: For a copy of all correspondence, letters, telegrams, and other documents, during the years 1928 and 1929, between the Board of Grain Commissioners and the Department of J ustice.



BAY OF FUNDY-GULF OF ST. LAWRENCE SHIP CANAL

[Stage Direction]
On the motion:
Mr. SMITH (Cumberland):: Whereas in the year 1870 the federal government appointed a canal commission to report on proposed canal works in Canada;

War Reparations
And whereas said commission reported in 1871 dividing the proposed works into four classes and set forth "that all the works under the head of first class are really of so great importance and so essential to the welfare and prosperity of the whole country that ^they should be undertaken and proceeded with";
And whereas the proposed canal across the isthmus of Chigneeto was placed in category of one of the first class projects;
And whereas the said proposed canal across the isthmus of Chigneeto is the only proposed canal undertaking of the first class that has not been proceeded with;
And whereas said undertaking is of great importance and essential to the welfare and prosperity of the whole of Canada;
Resolved, that in the opinion of this house, it is advisable that the government of Canada take immediate steps to further investigate said project as to feasibility, cost of construction, economic and national advantages to be gained by the construction of a ship canal across the isthmus of Chigneeto to connect the waters of the bay of Fundy with the waters of the gulf of St. Lawrence and further that the government be urged to make these surveys and investigations with the least possible delay.
And that when the surveys, estimates as to cost of construction and economic and national advantages are satisfactorily established the government take the necessary steps to proceed with the construction of said canal at the earliest possible date.
Mr. SPEAKER; I should like to have a word with the mover of this resolution, with a view to the alteration of its phraseology to bring it into conformity with the rules of the house.
Motion stands.



UNEMPLOYMENT, SICKNESS AND INVALIDITY INSURANCE

[Stage Direction]
Mr. A. A. HEAPS (North Winnipeg) moved;
That, in the opinion of this house, the committee on industrial and international relations be authorized to investigate and report on insurance against unemployment, sickness and invalidity.
He said:	There is hardly any need for
me to speak to this motion, Mr. Speaker. Last year the committee on industrial and international relations reported to the house and asked that this same question be referred to the committee at this session for further consideration. I would like the house to adopt the motion so that the question can go before the committee. I understand that the Minister of Labour (Mr. Heenan) is quite agreeable to that being done.
Right Hon. W. L. MACKENZIE KING (Prime Minister); In the absence of the Minister of Labour I may say that my hon.
friend is correct in his understanding. The government is quite willing to have this motion passed.
Motion agreed to.


[Stage Direction]
Hon. C. A. DUNNING (Minister of Railways and Canals) moved the third reading of Bill No. 3, to further amend the Intercolonial and Prince Edward Island Railways Employees' Provident Fund Act.
Motion agreed to, and bill read the third time and passed.


[Stage Direction]
Hon. FERNAND RINFRET (Secretary of State) moved that the house go into committee to consider the following proposed resolution:
That the Minister of Finance be authorized to place to the credit of the custodian, out of the reparation, money paid into the treasury for losses sustained during the late war, a sum not exceeding $2,500,000 and that provision be made as to the method and scale ol payments.
Henry Herbert Stevens: May I ask for your ruling, Mr. Speaker, whether this resolution is. debatable with the Speaker in the chair?	.
Mr SPKAKFjR: Certainly.


Henry Herbert Stevens: If the minister is going to make an explanation, all right, but I wish to say something on this question.


Mr. RINFRET:: My only purpose in
moving the resolution at this time was that I thought hon. members might not have any objection to adopting the resolution without committing themselves to the principle or to the method of payment. My intention is to introduce the bill to-morrow, which will explain fully what the government has in mind. In its present form the resolution is not very explicit, but of course I shall not press the motion if there is the least objection.


Henry Herbert Stevens: I am not in a position to discuss the full subject matter of the resolution to-night because I have not any material with me, but I can say in a very few words most of what I desire to say.
The resolution merely provides for a sum not exceeding $2,500,000 to be paid to reparation claimants. This question has been before the house now for two sessions, indeed for longer than that, but specifically in the last two sessions. I think it was two years ago

War Reparations

that the minister assured us at the opening of the session that steps would be taken during that session to provide for the payment of such claims as had been passed by the commission, and they had all been passed at that time except a mere half a dozen or so, which were held over and which have subsequently been dealt with. Here are hundreds and hundreds of deserving people-I cannot say at the moment just how many-whose claims were adjudicated two or three years ago. I will mention one case I know of, that of a woman with a family, whose award amounts to $5,000. She is in an absolutely destitute condition, and has been kept during this winter by her church friends, yet there has been in the hands of the government fen years this award of $5,000, which the commission approved. Upwards of eleven million dollars is in the 'hands of the government now. I ask that this resolution shall not pass to-night, and that before it is brought to the attention of the house the government should consider amending it to provide for the complete disposal of all these claims, with the exception perhaps of some group or class upon which they may desire more time for consideration.


Louis Édouard Fernand Rinfret: I may tell my hon. friend that the bill which I desire to bring before the house will very likely meet the very class of cases that he has just referred to. My motive to-night was merely to be allowed to put through the resolution without any commitment, which would permit me to present my bill to-morrow for first reading, when every hon. member would know exactly the intention of the government. I do not see that there could be much objection to that, but I will not press the point unless there is unanimous consent.


Henry Herbert Stevens: If the minister will permit me; he may say that we should not take too seriously statements that appear in the press.


Louis Édouard Fernand Rinfret: I may say at once that none of the statements made in the press were accurate.


Henry Herbert Stevens: Very good. But all the information we have is contained in the statements which have appeared in the press, plus this resolution.


Louis Édouard Fernand Rinfret: That is the very point. I want to give my hon. friend full information by bringing down the bill.


Henry Herbert Stevens: Why when the Speaker read the motion did not my hon. friend give the house the information which he is now [DOT]aying he has up his sleeve? Let me tell the
'-A'r. Stevens.]
minister that from the information I have in my possession I am opposed to the resolution as it now stands. This information may be wrong, but it is the best that I can get.


James Alexander Robb: Is my hon. friend opposed to this widow he has mentioned?


Henry Herbert Stevens: No. The Minister of
Finance knows perfectly well that I am not. What I am opposed to is partial payment of these claims; this $2,500,000 is an altogether inadequate sum. My submission is that the full amount of the awards, with the possible exception of some reserved claims that the government may have good reason to reserve, should be included in this resolution. Because this money in the government's hands is not money that should be in the consolidated fund at all; it is money paid over out of reparations. I think this very year the minister received two or three million dollars. I have the public accounts here. He will pardon me if I cannot place my finger right on the item, but I remember seeing it the other day. He will correct me if I am wrong, but I would say that approximately two million dollars was received this year in regard to this fund, and altogether-the Minister of Railways (Mr. Dunning) shakes his head. I say now the government have in their possession upwards of eleven million dollars.


Louis Édouard Fernand Rinfret: That is true.


Henry Herbert Stevens: I ask the Minister of Railways to take the word of the Secretary of State.


Charles Avery Dunning: You know better than that.	'


Henry Herbert Stevens: I say the government has in its possession to-day some eleven or twelve or thirteen million dollars of reparations money, and that out of that sum every dollar of reparations claims can and ought to be paid. Furthermore, I say that they should have been paid a year or two years ago- many of them. I cannot understand why the government comes before the house with this proposal of only two and a half million dollars. It may be said that certain classes of claims will be paid in full. As I recall the statements made, the classes of claims that are to be paid in full are very small. Many of these claims are by business concerns, and they have been kept out of their money wrongfully for years. They should have been paid long ago. A certain class of claims was paid totalling a million and a half or two million dollars; but those I have referred to and others I think have been wrongfully kept out of their money. I suggest to the minister

Rules of the House
that before this resolution is proceeded with further he give to the house, with the Speaker in the chair, and before the principle of this resolution is adopted at all, a very full statement and a very full explanation. I appeal to the Prime Minister and to the Minister of Finance to amend this resolution so as to include the total amount of the awards made by the reparations commission appointed by this government, which commission adjudicated these claims and reported some two years ago.


James Alexander Robb: Is my hon. friend taking the position that unless we pay all the large claims this poor widow will not be paid?


Henry Herbert Stevens: No. I am taking the position that two years ago all these claims ought to have been paid.


James Alexander Robb: All of them?


Henry Herbert Stevens: All of them, with the
exception perhaps of a certain small group. _


James Alexander Robb: What group?


Henry Herbert Stevens: I might-


Louis Édouard Fernand Rinfret: Does my hon. friend
realize that I received the report from Commissioner Friel only last year? Therefore how could the claims he dealt with have been paid two years ago?


Henry Herbert Stevens: The Secretary of State received the report of Commissioner Friel that he had adjudicated hundreds and thousands of claims. Not only had the minister that report in his hand two years ago, but he came to parliament and stated at that session that he would bring in legislation to provide for the payment of those claims already adjudicated upon, and in fact he had a resolution on the order paper. Now then, I contend that this major group of claims, long since adjudicated upon-not a change in them in any way, shape or form during the last two years -should be paid in full. If there are any claims which are still held in abeyance, all right; but let the others be paid. The money is in the hands of the government, and these claims ought to be paid in full. I appeal to the Minister of Finance particularly because the question of money comes more directly under his care, and I ask him to agree to increase this to the full amount of the reparations.
Motion stands.
On motion of Mr. Mackenzie King the house adjourned at 11 p.m.
Friday, February 15, 1929