PRIVILEGES AND ELECTIONS

Right Hon. W. L. MACKENZIE KING (Prime Minister) moved:: That the names of Messrs. Casgrain and Denis (Joliette) be substituted for those of Sir Lomer Gouin and Mr. Bureau on the select standing committee on Privileges and Elections.


[Stage Direction]
Motion agreed to.


[Stage Direction]
Hon. GEORGE P. GRAHAM (Minister of Railways and Canals):	I lay on the table
copy of the order in council passed on June 5, with reference to freight rates. I move:
That 750 copies in the English language and 250 copies in the French language of the order in council of June 5, 1925, respecting fredght rates, laid on the table of the House this day be printed forthwith,	that
rule 74 be suspended in relation thereto.
Motion agreed to.
{Mr. Kellner.]
Mr. GRAHAM moved for leave to introduce Bill No. 181, to amend the Railway Act, 1919.
Sir HENRY DRAYTON:: Explain.


Mr. GRAHAM:: The object of this bill is to give statutory authority to the carrying out of the policy, as announced by order in council of a recent date, with regard to freight rates. In brief, it retains in its enactment the features of the CrowsneSt pass agreement so far as the rates on grain and flour are concerned. Otherwise it removes -fill restrictions-either by law, by agreement, or by the judgment of the courts-to the Board of Railway Commissioners investigating fully the rate situation in Canada, and preparing a structure that will be just to all parts of the Dominion.


Right Hon. ARTHUR MEIGHEN (Leader of the Opposition):: Would the minister say
whether any portion of the agreement remains in existence as an agreement, after this statute passes? That is to say:	Does the agreement live any more, or does the agreement die and the House enact certain rates, which formerly were in the agreement, to take its place?


George Perry Graham: This phase of the question was the cause of a good deal of discussion and a good deal of thought by the government. It was finally decided that the Crowsnest pass agreement should remain so far as grain and flour were concerned.
Motion agreed to and bill read the first time.



PRIVATE BILLS FIRST READING

[Stage Direction]
Bill No. 175, from the Senate, for the relief of Andrew Toulouse.-Mr. Church.
Bill No. 176, from the Senate, for the relief of Albert Plue Jessop.-Mr. Duff.
Bill No. 177, from the Senate, for the relief of Cecil Hunter.-Mr. Gordon.

[Stage Direction]
(Questions answered orally are indicated by an asterisk).

Mr. McQUARRIE:: 1.	Has the government completed the protection of the Fraser river bank along Nicomen island?
2.	If so, how much money has been spent to date?
3.	How much of the total expenditure has proved a total loss on account of the delay in finishing the work?
4.	What portions of the protection work still remain in place?

Questions
5.	Has the government of British Columbia fulfilled its part of the agreement with the federal government in reference to the protection of Nicomen island?
6.	If not, what reason has been assigned for the failure of the British Columbia government in this connection?


Hon. Mr. KING (Kootenay):: 
THE MANUEL RESIDENCE, OTTAWA
Mr. CARRUTHERS:: 1.	In what year did the government acquire the Manuel residence on Vittoria street, Ottawa?
2.	What was the price paid?
3.	What was the yearly rental paid to the government for the rental of the residence up to 1918?
4.	How much money was spent by the government on said residence in the year 1918, and the first three months of 1919?
5.	To whom was the property leased in 1919?
6 When did he move into said property?
7.	From what date did he pay rental?
8.	What was the amount of the rental per year?
9.	By whom were the taxes paid?
10.	What was the amount of the taxes for the years 1919, 1920 and 1921?
11.	What amount was spent by the government in
upkeep and maintenance of the residence, during each of the years 1919, 1920 and 1921?	.
12.	How much per year was paid to the lessee during these years by the government of Canada as an allowance for a residence?


Hon. Mr. GRAHAM:: 
KINCARDINE DREDGING
Mr. HUBBS:: 1.	What was the cost of dredging Kincardine harbour during the years 1922 and 1924, respectively?
2.	To what depth was the harbour dredged in each
of these years?	*


Hon. Mr. KING (Kootenay):: 
CONVEYANCE OF MAILS, VANCOUVER, B.C.
Hon. Mr. STEVENS:: What is the total annual cost of carrying mail, (a) to and from the Vancouver post office to the Canadian. Pacific depot, and, (b) to and from the oriental andL Australian steamship service on the wharf?


Hon. Mr. MURPHY:: (a)	This work forms part of a general contract covering the conveyance of mails between Vancouver post office and the different postal stations, railway stations and wharves.. The annual expenditure under this contract amounts to approximately $24,000, but it is-not possible to state what portion of this amount is attributable to the service to and from the Canadian Pacific depot.
(b)	The conveyance of mails to and from the wharves in connection with the oriental steamship lines forms part of the general contract at $24,000 per annum. As explained in (a), it is not possible to state what portion of this amount is attributable to the service to and from the wharves in connection with the oriental steamship lines.
The service in connection with the conveyance of mails to and from the Australian steamships is provided by the Union Steamship Company of New Zealand, Limited. They carry such mails free of charge in consideration of the subsidy payment of $100,000 per annum which they receive from the Department of Trade and Commerce for the service between Canada and New Zealand.


UNOPPOSED MOTION FOR PAPERS
Henry Lumley Drayton: For a copy of all correspondence, letters, telegrams, options, agreements, and other documents, regarding the purchase of the Winch building, Vancouver, British Columbia. Also a copy of tenders or letters offering to purchase the old Post Office building and site on the corner of Pender and Granville streets, Vancouver.


ROYAL BANK AND UNION BANK
Mr. G. G. COOTE (Macleod) moved:: For a copy of all correspondence passing between the government or any member thereof, and the Royal Bank of Canada or the Union Bank of Canada, or any of the directors of the said banks, or any other parties, in any way relating to the amalgamation of the Royal Bank of Canada and the Union Bank of Canada.


Hon. J. A. ROBB (Acting Minister of Finance):: To oppose this motion might lead some person to believe there was something to hide. To consent to it would create a precedent that might in the future be embarras-

Unopposed Motions for Papers
sing to finance ministers and might not be in the public interests. The Bank Act provides-whether rightly or wrongly I am not arguing-that certain information given to the Minister of Finance is regarded as of a confidential nature. Under those circumstances perhaps my hon. friend would withdraw the resolution. If the resolution is passed I shall vote against it, and I shall reserve to myself as Acting Minister of Finance the right to determine what is confidential and what information it is best in the public interests should be withheld.
Motion negatived.


WELLAND SHIP CANAL-CONTRACTS
George Gibson Coote: For a copy of all contracts entered into by the government for work now under construction on the Welland Ship canal, including harbour works at Port Colborne and Port Weller. Also a statement showing the amount paid to said contractors and the estimated amount which will be required to be paid for the completion of the said contracts.


George Perry Graham: If my hon. friend
insists on the motion going through in this form he probably will not get the information this year. For this reason: These contracts are voluminous documents; it will cost hundreds upon hundreds of dollars to have them copied. The new Welland canal has been under contract, except for a short interim during the war, since 1913, with all the original contracts and all the later contracts. Preparing this information would mean engaging a staff to copy page after page of closely printed matter. If the hon. member wants to use the information that will be embodied in this return this year, he may come over to the department and I will give him everything he ought to have, and he will have it for use in the estimates, if that is what he wants it for; but if we start in to obey the order of the House, the hon. member will not get it this year.


George Gibson Coote: 
George Perry Graham: The department will give my hon. friend all the information.
Motion withdrawn.


COMMITTEE ON OCEAN RATES
Henry Herbert Stevens: For a return setting forth the total expenses incurred by the special committee in its investigation into Ocean Rates, showing, (a) full amount paid to Mr. Symington iti fees, (b) the amount in fees still due to Mr. Symington as counsel, (c) total amount paid and in-

curred for expenses to Mr. Symington, (d) the amount paid to each witness for fees and for expenses, (e) the amount paid or proposed to be paid to Sir William Petersen for fees, or, and, for expenses, (f) amount in full paid to W. T. R. Preston in fees or, and, for expenses since January, 1924; and all other expenses, including reporting and printing, incurred by the committee, or by the authority of the government, and that said return to this House be rpade concurrently with the presentation of the report of said committee, and shall set forth in full the total costs of said committee and the investigation.


Hon. Mr. LOW:: I have no objection to bringing down the return, but it will be utterly impossible to comply with the request that the return be brought down concurrently with the report of the Ocean Rates committee. If the hon. member presses that portion of the motion the return will be very incomplete. As a matter of fact we have none of the accounts, they are not in yet; but if the hon. member will drop the last portion of his motion the return will be brought down before the session closes.


Henry Herbert Stevens: May I point out to the minister and to the House that in matters of expenses of this character with reference to the committee, they are all supposed to be cleaned up when the committee concludes its labours. It is not a case of expenses that are incurred after the committee has finished its sittings. Furthermore, a considerable portion of this has already been brought down, but I want it brought up to date, that is all. While I do not wish to embarrass the minister, I think if he will let the resolution pass as it is and give it a little further thought, he will find that the return can be fairly complete.


Thomas Andrew Low: It is impossible to do that. If
the hon. member insists, the return will be very incomplete.


Henry Herbert Stevens: Rather than have an
emasculated return. I will gladly amend it by cutting out the last words, but the minister and, I am sure, the government will appreciate what is wanted.


Mr. SPEAKER:: The motion is amended
by striking out all the words after the word "government" in the third last line.
Motion as amended agreed to.



PRIVILEGE-HON. MR. KING EMPIRE DAY-FLAGS ON PUBLIC BUILDINGS

[Stage Direction]
On the Orders of the Day:
Hon. J. H. KING (Minister of Public Works):: I rise to a question of privilege. On May 25, Empire Day, the hon. member for Vancouver South (Mr. Ladner) intimated to the House that there had been a deplorable

Privilege-Hon. Mr. King
absence of flags on government buildings, suggesting in his remarks that the practice followed this year differed from that of previous years. I at that time promised that I would make inquiries in the department in order to see if anything had been omitted. My inquiries showed that there had been no change; that the practice followed this year was the practice that had been followed each and every preceding year. I had not intended [DOT]bringing the question up again, because it is a matter that should not be canvassed back and forth, in an endeavour to make political capital out of it. I find, however, in Saturday Night of June 6, this statement:
Mr. Ladner by his protest gained the attention of Hon. Doctor King, the Minister of Public Works, under whose charge all buildings come, and he promised to look into the omission at once.
I made no such promise. I said I would make inquiries. The inquiries have revea'ed the fact that there were no omissions; that the practice this year was the same as had been followed in previous years.


Mr. L. J. LADNER (Vancouver South):: Mr. Speaker-


Hewitt Bostock: No debate is allowed on
a question of privilege.


Arthur Meighen: The minister has been
allowed to speak.


Leon Johnson Ladner: I do not understand the
technique of procedure, but the minister in his statement now conveyed' the impression of a statement which I did not make. I made no such statement of comparison. I made the direct statement that on entering the parliament grounds, one would observe that the flags were not flying.


Mr. H. C. HOCKEN (West Toronto):: Will the minister assure the House that in future Observance will be given to that day?


Mr. KING (Kootenay):: Yes. We have
instructed the department that these flags which have never been flown before around the parliament buildings on occasions of that kind be raised and be on hand on that date.



AUSTRALIAN TREATY

[Stage Direction]
On the Orders of the Day:
Mr. J. A. CLARK (Burrard):: I should
like to ask the Acting Minister of Finance whether Mr. Ross has yet arrived in Australia and, if so, what progress is being made towards the ratification of the Australian treaty?


James Alexander Robb: I have not yet heard of his arrival.



RHINE FRONTIER

[Stage Direction]
On the Orders of the Day:
Mr. WILLIAM IRVINE (East Calgary):: I desire to ask the government a question arising out of a. despatch from Paris to tlhe Canadian Associated Press of this date:
The Havas News Agency correspondent at Geneva says he is authorised to announce that in the note which Foreign Secretary Austen Chamberlain of Great Britain to-day delivered to Foreign Minister Briand, Great Britain guarantees the security of the Rhine frontier as laid down in the Versailles Peace Treaty, and will consider as a cause for war any violation of the territorial clauses regarding the Rhineland.
Great Britain offers to place at the disposal of France and Belgium in order to guarantee the security of the Rhine frontier in case of attack, the entire British military, naval and air forces, according to this report. The guarantee does not extend to Germany's eastern frontiers between Poland and Czecho-Slovakia.
Has Canada been consulted in this matter at all, or is Canada committed in any way to this pact?


William Lyon Mackenzie King: Before answering my hon. friend's question, I should like to see for myself the particular despatch to which reference is made. I do not mean the newspaper despatch; I mean the document that is supposed to have been sent by the Secretary of State for Foreign Affairs to France. I will take steps to find out the nature of it and I will let my hon. friend have a reply later on.



PULPWOOD CONCESSIONS

[Stage Direction]
On the Orders of the Day:
Mr. J. S. WOODSWORTH (Centre Winnipeg) :: Will the Minister of the Interior explain why a pulpwood concession has recently been granted in Manitoba without any public auction being held?


Hon. CHARLES STEWART (Minister of the Interior):: No pulpwood concession has
been granted in Manitoba other than the one that was held by Mr. McArthur.


James Shaver Woodsworth: Has no recent action been taken with regard to any alteration in connection with the parties or the terms of this concession?


Charles A. Stewart: Yes,. and
when it is completed, I shall be glad to make an explanation. The matter is still under advisement.



DECORUM OF THE HOUSE

[Stage Direction]
On the Orders of the Day:
Mr. II. C. HOCKEN (West Toronto): Is it in order for members of the House to appear in deshabille?
Home Bank
Hewitt Bostock: Hon. members are required to maintain the decorum of the House according to the rules. I would be sorry that in Canada we should make our politics in shirt sleeves.



HOME BANK


[Stage Direction]
Hon. J. A, ROBB (Acting Minister of Finance) moved that the House go into committee to consider the following proposed resolution :
Resolved, that it is expedient to provide for the payment out of the consolidated revenue fund of the sum of five million four hundred and fifty thousand dollars for the purpose of paying to the several persons who were creditors of The Home Bank of Canada for money on deposit or in current account such proportionate part of the amounts for which they are determined to be creditors in the liquidation proceedings as the said sum will provide, and to authorize the Governor in Council to raise by way of loan such sum as may be required for the purpose of making the payment aforesaid.
He said: Mr. Speaker, the resolution upon, which will be founded a bill, provides for partial payment-about thirty-five per cent-to the depositors of the Home Bank of Canada. The Canadian banking system provides for the double liability of all shareholders of a bank, provides for the redemption at par of the bank notes authorized and issued by a Canadian bank, but does not provide guarantee of deposits. I emphasize this fact so that it may be clearly understood that under our system of banking, and indeed under most of the backing systems of the world, governments do not guarantee deposits. Canadian chartered banks are required to submit to the government sworn statements of their position. We have now government inspection of banks. Every care is exercised to protect the public. But the law makes it clear that deposits are not now, and never have been, guaranteed.
The resolution, and the bill to be introduced, is to implement what many people regard as a unanimous order from the members of this House, under date of the 17th of July, 1924. It is presented to parliament in this form, so that this House, which in July, 1924, unanimously approved the report of the Banking and Commerce committee, may now have an opportunity of sharing the responsibility of the measure proposed to discharge what the Banking and Commerce committee regard as a moral claim.
The Home Bank of Canada closed its doors on the 17th day of August, 1923. A petition was presented in the month of January, 1924,

to the government, praying for a grant for the relief of the depositors. An order in council was passed on the 27th February, 1924, appointing Hon. A. J. McKeown, Chief Justice of the Court of King's Bench of New Brunswick, a commissioner under the Enquiries Act to make an investigation into the affairs of the bank at and prior to the date of the failure. The report of the commissioner was duly presented to the House of Commons and referred to the Banking and Commerce committee. The report of the Banking and Commerce committee thereon was presented to the House of Commons on the 1st day of July, 1924, the concluding paragraph being as follows:
Your committee consider that the facts brought out in the interim report submitted by Mr. Justice McKeown and the evidence therein referred to establish that the depositors of the Home Bank have a moral claim in equity for compensation by the country on account of any loss they may suffer by reason of the failure of the Home Bank.
On the 17th cf July the report of the Banking and Commerce committee in this behalf was unanimously concurred in by the House. Subsequently, on the 18 h July, the Prime Minister, in the House of Commons, after quoting the concluding paragraph of the report hereinbefore set out, stated that the government would give careful consideration to the report which had been accepted unanimously by the House and at the next session of parliament would make an announcement as to the extent to which, in their opinion, parliament should be asked to recognize the moral claim which in the report it is stated the depositors of the bank have.
The amount of the claims of depositors, owing to adjustments -which are being made from time to time by the liquidator, have not yet been settled in the liquidation proceedings. The net amount that will be due to persons in the position of depositors when the list of creditors is finally se'tled by the court will be approximately $15,500,000. The government proposes that, as outlined in the resolution, a payment of $5,450,000-equal to about 35 cents on the dollar,-be placed in the hands of the liquidator for distribution among the depositors. This will enable the liquidator to make a distribution of approximately thirty-five per cent of their claims to- the deposi: ors. The depositors have already received a payment of twenty-five per cent through the liquidator. While it is not yet possible to determine what the remaining asse's of the failed bank will yield, the liquidator anticipates that there will be a further payment of at least ten per cent from the

Home Bank
asets. That means that from the assets and this payment, if authorized by parliament, the depositors of the failed bank will receive approximately seventy per cent of their claims. [DOT]
Mr. MACLEAN (York):: Does that statement take into consideration the fact that more money will come into the liquidators' hands from those shareholders who-


Hewitt Bostock: Order. I hope hon.
members will reserve their questions until we have resolved ourselves into committee of the Whole.


James Alexander Robb: 
Mr. HANSON:: I would like to ask the
Acting Minister of Finance why it is that the government has adopted this method, of
bringing in a bill to vote this money rather than by a supplementary estimate which was the method followed under the British precedent quoted by the acting minister.


James Alexander Robb: If my hon. friend has been
following me, he would have observed that I gave the reasons in my introductory remarks.


Richard Burpee Hanson: I did not observe them.


James Alexander Robb: Does my hon. friend wish
me to make that speech over again?


Henry Herbert Stevens: Just say it was more expedient. That would cover it.


William Irvine: Is it proposed to pay the
depositors who had small sums on deposit in the bank the full amount of their claims, or is this sum to be allocated among all the claimants?


James Alexander Robb: The amount is to be paid to
the liquidators, and the intention is that all shall share and share alike.


Henry Lumley Drayton: I wonder if the government make any provision for the necessitous depositors? After all, the proper way to look upon the whole of this thing, as I see it, is as a relief measure, and only as a relief measure. If we look upon it as such, it ought to give relief where relief is required.
I am told that a number of necessitous depositors have had to assign their claims for nominal sums, and it ocicuns to me that special notice should be taken of those cases and consideration given to the fact that the great delay in taking action has made their necessities all the more acute; consequently there is all the more reason why we should try to protect them. I do not say that those who have bought claims should be made to suffer, but I do say that the speculator in the misfortunes of others, perhaps a speculator with a little inside information of what the government was likely to do, ought not to get more than the return of his money with a reasonable rate of interest. As this is a grant in relief of the depositors, the relief ought to go where it really is required. What does my hon. friend say to that suggestion?


James Alexander Robb: It is a suggestion worth considering, and it will be something for the liquidators to determine. We did not wish to make any difference in treatment as be-ween the large and the small depositors. It [DOT] is news to me that there has been speculation of the character my hon. friend describes.


Henry Lumley Drayton: I have been
told so. My hon. friend is in a position to find out from the liquidator.
Home Bank


James Alexander Robb: If such is the case we will
try to see that the speculator does not profit.


Henry Lumley Drayton: I would point
out that under the resolution all the liquidator can do is to pay every depositor ratably. I wonder if it would not also be a good thing for my hon. friend to consider this?-suppose you have the wealthy man, the man of affairs, who should be 'able to look after himself just as well as anybody else, and you also have, for instance, the miner at Fernie. To the latter the Home Bank was his only possible opportunity of making deposits. He knew nothing about business or banking, but he and his fellow-miners contributed three-quarters of a million dollars of the deposits of this institution. We are here frankly discussing a relief measure. Now, as between the miner and the man of affairs, does not my hon. friend think it would be a good deal better to pay the miner in full and nothing to the other man?
Mr. ROfBB: Does my hon. friend recommend that we should pay only the small depositors, say up to $8,000? I should be glad to talk that over with him.


Henry Lumley Drayton: I would certainly look upon the relief of the necessitous as being the prime motive behind the House in making this grant.


James Alexander Robb: That is the real motive.


George Perry Graham: If we made a distinction
between the amounts of the deposits, might not a very wealthy man with only a few thousand dollars in the bank profit at the expense of a man in ordinary life who might have deposited his all? In such a case the man of wealth would get his money, while the other would get nothing.


Henry Lumley Drayton: That is not my suggestion at all.


George Perry Graham: You see the diificulty of applying the principle?


Henry Lumley Drayton: My hon. friend has not caught my suggestion. I am not saying anything about the amounts of the deposits. I am directing attention to the need of the depositor for relief. While it well may be that a man worth a great deal of money has only a couple of hundred dollars on deposit, some of the Fernie miners, for instance, might have placed the savings of their lifetime in the institution. Therefore my hon. friend is quite right, it would be absolutely wrong to approach the subject from the standpoint of the amount of the deposit
ESir Henry Drayton.]
That is not what I was thinking of at all, I was thinking of the necessitous ease.


Mr. FORKE:: Who is to be the judge?


Henry Lumley Drayton: The liquidator
should be in a position to report to the government without very much trouble. The government has opportunities of getting the necessary information; through its taxing machinery it can tell pretty well who does and who does not need relief. And the liquidator, too, could easily adopt a form which w'ould cover the question of other assets.


George Perry Graham: What would you do in
the case of a municipality?


Henry Lumley Drayton: I quite admit,
at once, that there are some cases to which you could not apply the rule. I would not apply it to a municipality, for its deposit represents the money of a whole lot of people who are more or less necessitous. I would certainly look upon a municipality or la charitable institution as a preferred creditor. I throw out the suggestion to my hon. friend. It does seem to me there is something in it if I correctly understand the basis of this grant. Personally, I should like to see this money so applied that there would be just as little suffering as possible in Canada as a result of the failure of this bank.


Mr. MCDONALD (Timiskiaming):: Will the adoption of this principle establish a precedent which would justify the depositors of the Farmers'Bank coming to parliament and asking for similar treatment?


James Alexander Robb: The depositors of the Farmers' Bank have already been before both Houses of parliament for relief. In my introductory remarks I tried to make it clear that under our banking law there is no government responsibility for deposits. In this case we admit a moral claim, on the report of the Banking and Commerce committee.


Angus McDonald: Is there not the same responsibility towards the depositors in the Fanners' Bank as there is towards the depositors in the Home Bank? Evidently it was through some mistake on the part of the Finance department, coupled with remissness of the directors of the bank, that this failure took place. The conditions were somewhat similar in the failure of the Farmers' Bank. I believe the Liberals at that time made a strenuous effort to get the government of the day to pass a resolution somewhat similar to that now before the House.


Horatio Clarence Hocken: Mr. Chairman, knowing a
good deal about the distress caused by the

Home Bank
failure of the Home Bank, I am strongly in favour of some relief being given to the depositors, and will support it. The minister tells us that the government is not responsible to depositors. In my judgment the sooner the Bank Act is amended so that savings bank depositors will have a guarantee from the government, the better it will be for our banking system generally. No doubt a good deal of distress was caused to business men, but I think we should differentiate 'between savings bank depositors and business depositors. I am not arguing for that to be done in the present instance, but I would suggest to the minister that when the Bank Act is next revised savings bank depositors in our chartered banks should be guaranteed their deposits just the same as tihe note circulation is guaranteed at the present time. There are many cases where people put their little savings away in this bank in ten dollar bills from time to time, relying upon the government to protect them. I submit that if the savings bank depositors had been guaranteed, in all probability the charter for the Home Bank never would have been granted. I think it is notorious that it never should have been issued. And if under the Bank Act the government would have had to reimburse all savings bank depositors in case of failure, perhaps the Home Bank would never have been brought into existence. We cannot make any mistake, Mr. Chairman, in placing the most direct responsibility upon the government of this country for the safety of the funds of the poor people. They deserve that protection from the country because of their thrift; they are the kind of people who above all others should have consideration from this or any other government. They are among the best people we have, men and women who put away their little sums week by week as a nest egg for a rainy day or for old age, but who, on account of the sudden collapse of the bank, find that they have lost the savings of ten or fifteen years. With what the hon. member (Sir Henry Drayton) says about this being a measure of relief I am in entire agreement. I am at a loss to see just how it can be worked out in the present instance. We are right up to the point of making the grant, and if it could be done as he suggests I would be strongly in favour of it. But I would ask that the Bank Act be amended so as to afford complete protection of savings bank depositors. In the present instance I am going to vote for the motion of the government.


James Alexander Robb: If my hon. friend and I are
both in the House when the next revision
of the Bank Act takes place, I shall be prepared to discuss the question of guaranteeing savings bank deposits. I understand that that was discussed on the last re-
4 p.m. vision that took place, and different opinions were expressed with regard to it. However, that is not before us to-day. Now, with respect to the point raised by hon. gentlemen opposite as to the difference between the large depositor and the small depositor-


Henry Lumley Drayton: No, the wealthy man and the poor man.


James Alexander Robb: The wealthy man and the
poor man-if it is a moral claim, how are we going to differentiate between those two?


Arthur Meighen: Does the minister himself think there is a moral claim against the country?


James Alexander Robb: I am dealing now with the
report of the Banking and Commerce committee, which was unanimously concurred in by this House.


Arthur Meighen: We will discuss that later. But will the minister answer me directly: does he himself consider there is a moral claim against this country?


James Alexander Robb: I am not debating that
question. I was a member of the Banking and Commerce committee. In this country majorities are supposed1 to rule. We are carrying out in this respect the views of parliament.


Arthur Meighen: It is very plain that the
minister does not believe anything of this kind; unless he answered very directly he could not more clearly intimate to the House that he does not believe it. Now, does he think there was unanimous concurrence on the part of the House in this report? He knows that protests were repeatedly entered in this House against the loose manner in which reports of committees were received-the House acting upon a report submitted by the chairman or a private member of the committee, who gets up to move the adoption of it and no one understands what is in it, and it is carried. I rose and protested repeatedly, and not only did I rise; the Minister of Justice (Mr. Lapointe) supported me. I do not know what the Acting Minister of Finance did, but if he did not by word-


James Alexander Robb: No, I was on the deep blue
sea that day.


Arthur Meighen: Yes, where the Petersen
contract is now.


George Perry Graham: I was acting minister, and I do not think I said a word.
Home Bank


Arthur Meighen: 
Mr. KENNEDY (Glengarry and Stormont):: The minister in introducing his resolution has been very careful to disclaim the establishing of any precedent in this legislation. He likewise stated that the measure would reimburse the depositors to the extent of seventy per cent of their losses, taken in conjunction with the assets of the bank. If legislation of this kind goes through and the money is voted to the liquidator and distributed among the depositors, would the government consider a measure to reimburse them to the extent of the remaining twenty or thirty per cent that may still be coming to them?


James Alexander Robb: Is my hon. friend advocating
that?


John Wilfred Kennedy: I am just asking the minister if
the country would not consider itself legally and morally liable to that extent.


James Alexander Robb: My answer is that our
measure is now before parliament.


John Wilfred Kennedy: In the form of a resolution. I would point out that legislation of this kind is likely to be followed up by a request from the depositors of the Home Bank to be reimbursed for the full amount of their losses.


James Alexander Robb: Is my hon. friend speaking
with authority?


John Wilfred Kennedy: I am not speaking with authority; I am just telling the minister what I think is likely to happen. Legislation of this kind was passed in the House about ten or eleven years ago in connection with the Farmers' Bank, I suppose for the same reason, namely, that the government of the day thought that the depositors of the Farmers' Bank had a moral claim on the country on account of the possibility of there having been some carelessness in the issuing of the treasury certificate at that time. Now, there was a great deal of hardship among the depositors of the Farmers' Bank, and the government of the day recognized that and recognized the state's responsibility. AVould the minister consider including in his resolution the depositors of the Farmers' Bank as well as of the Home Bank?


James Alexander Robb: I will answer that at once-no.


John Wilfred Kennedy: Perhaps the government is establishing a dangerous precedent; I rather think it is. I do not think the country is morally liable for the errors of any government or any finance minister. I do not think the country should be held responsible if any Treasury board or any Minister of Finance commits an error of judgment. At least I do not think the people of Canada should in every such case be held responsible; I am afraid we would have a lot of responsibility on our shoulders if we did. In view of the answer the minister has given, I am going to move an amendment to this resolution, as follows:
That the resolution be amended by inserting after the word "Canada" in the forth line thereof, the following words, "and the Farmers' Bank of Canada".


The CHAIRMAN:: I am in doubt as to this motion being in order. The question that arises in my mind is whether a resolution providing $5,450,000 for the purpose of paying creditors of the Home Bank for money on deposit such proportionate part of the amounts due them as that sum will provide, can be amended so as to include the creditors of the Farmers' Bank and thus divert a portion of the sum provided for the Home Bank to another purpose. I should like to hear the views of members of the committee on this point.


George Perry Graham: Is there such a thing as the Farmers' bank to begin with?


Arthur Meighen: Is there a Home bank?

Home Bank


George Perry Graham: It has not been quite
wound up yet.


John Wilfred Kennedy: The amendment neither increases nor decreases the amount mentioned in the resolution.


George Perry Graham: It makes a change in it.


George Newcombe Gordon: It makes a change in the destination of the money grant.


John Wilfred Kennedy: In a portion of it only.


Arthur Meighen: I think it must mean an additional charge to the treasury.


George Newcombe Gordon: Under	the rules, a
change in the destination of a grant or public charge seems to have relation only to Supply. I question whether it applies to a resolution of this kind.


Arthur Meighen: Perhaps before you decide the point, Mr. Chairman, hon. gentlemen who have another bank that failed should get their application in.


George Perry Graham: Get them all in.


George Newcombe Gordon: Do any hon. members desire to speak to this point?


William Irvine: I do not wish to appear as opposing this bill-


George Newcombe Gordon: A point of order is
under consideration, I should like to dispose of it first. I rule that this amendment, as it does not increase the public charge, is in order. The question is on the amendment.


James Alexander Robb: Before any other hon. gentleman speaks I wish to place on record an answer to a certain part of the remarks of my hon. friend from Glengarry and Stormont (Mr. Kennedy). If I understood him aright he intimated that if this measure passed we would have a demand on behalf of the depositors of the Home Bank for an additional amount to bring the grant up to one hundred per cent. Now, upon the failure of the Home Bank a liquidator was appointed by the Court, I think .on the recommendation of the depositors of the bank. Those depositors themselves appointed a committee to manage their affairs. We have had consultations with that commiitee and with the liquidator. We have not arrived hastily at the figures we presented to parliament to-day, and I wish now to place on record, so that hon. gentlemen may understand the facts, a letter received by the right hon. the Prime Minister and signed by the
members of the committee. This letter is as follows:
Ottawa, May 29, 1925.
Right Honourable
W. L. Mackenzie King, C.M.G., M.P.,
Prime Minister of Canada,
Ottawa.
Dear Mr. Premier:
After our interview with you and the Acting Minister of Finance, the Hon. Mr. Robb, this day, and the proposals made in reference to the settlement of the claims of the Home Bank depositors, and having regard to the many financial demands being made upon the government, we beg, on behalf of the National Depositors Relief Association, to assure you that the sum of five million four hundred and fifty thousand dollars, mentioned by you in our interview this day, is satisfactory to our association and we feel will be satisfactory to the depositors generally in Canada.
We deeply appreciate the broad spirit with which you have met our representations and that the measure of relief you propose is fair and reasonable, having regard to existing conditions.
We beg to again thank you and the Acting Minister of Finance, and the other members of the government, for the kind interest which you have always shown us since the matter came before you, and for the assurance that the necessary legislation will be put through immediately.
Signed on behalf of the National Committee of the Home Bank Depositors Association.
W. T. Lee,
Chairman.
W. F. Kernahan,
Treasurer.
Arthur English.
G. G. Henderson.
J. P. Treacy.
V. A. Sinclair.


Arthur Meighen: Are the names all signed on the dotted line?


James Alexander Robb: The letter is signed by the individuals whose names appear there.


Richard Burpee Hanson: There does not seem to
be anybody in the House who is very anxious to speak on behalf of the general taxpayers of Canada in regard to this measure. I want to say very briefly that I am opposed to this resolution. I was opposed to the principle of it in the banking committee, and I was opposed to it in the special committee of the banking committee which brought in the resolution alluded to by the Acting Minister of Finance in which the contention was advanced that there was a moral claim in equity on the part of this country to pay these depositors. Let me say that as a lawyer I do not know what a "moral claim in equity" is, and I do not know that any other man versed in jurisprudence knows either; and I would ask the Acting Minister of Finance if he knows what a "moral claim in equity" is. I know about legal claims, and I know about equitable claims, but this is something different. If it is meant by the expression that
Home Bank

there should be a compassionate allowance to these depositors the question ought to be treated upon its merits but treated as a "compassionate allowance," It is quite apparent, from reading the evidence taken in connection with the failure of this bank and from reading the report of Mr. Commissioner McKeown, that there is no legal or equitable responsibility upon the taxpayer of this country to pay this or any other amount; and speaking for myself, and for myself alone, I am not prepared that my constituents should be taxed, at a time when they are already over-taxed and tax-burdened, to pay such an amount to any particular class in a community no matter how deserving they may be. If this measure passes and becomes law, and this amount is paid to these depositors, the people of this country may just as well make up their minds that now and forever hereafter all bank deposits in this country are going to be guaranteed. I do not agree with my hon. friend from West Toronto (Mr. Hocken) that the government of this country should guarantee bank deposits.


Horatio Clarence Hocken: Savings bank deposits?


Richard Burpee Hanson: Any kind of bank deposits in a corporation carried on for private gain or with private individuals.


Horatio Clarence Hocken: You are wrong.


Richard Burpee Hanson: I may be wrong. However, I do not think the people of this country have been converted to that principle, and I hope it will be a long time before they are. If the government of this country is to go into the business of banking and guaranteeing deposits, then let us take our share of the responsibility of the organization and let us get some of the profits in order that a fund may be built up out of which such guarantees as I have suggested can be paid. If, however, this is being treated on the basis of a compassionate allowance I think it would receive a very fair measure of consideration at the hands of this House; but it ought to be put fairly and squarely on that basis and not on the basis of a "moral claim in equity" to use the phraseology employed by the Acting Minister of Finance. Furthermore, I object, on behalf of the ordinary taxpayer of this country, to the method1 adopted in this case, and I question very much the sincerity of the administration-I do this in all honesty-in bringing in a measure in this form. If the government of this country is sincerely desirous that these depositors should receive this sum of money then I say to it:	Bring it as a
supplementary estimate where it cannot be 
interfered with by any other chamber in this parliament. Is it-as has been rumoured-that the government will pass this measure, and get whatever credit before the country there may be for doing so, in the hope that the other chamber will do as it did1 in the case of the Farmers' Bank? I think there is more than a rumour in that suggestion. There is probably a hope behind it. Speaking for myself, if there is nobody else in this House who will oppose this resolution, I intend to do so, for the reasons I have tried to give very briefly and in a summarized form.


Mr. WOODS:: Being a member of the Banking and Commerce committee where this matter was fully discussed and a report prepared which was presented to this House, I was strongly in favour of the report which the commit; ee presented. My grounds for supporting the proposal to reimburse the Home Bank depositors to at least a great extent is this: Perusing the report of Chief Justice McKeown and the evidence which was given, it seemed clear to me, as a man with a simple mind, not a legal gentleman, that when the attention of the Minister of Finance was drawn to the fact that this 'bank was in a precarious condition some years ago, the Minister of Finance did not take action, either to have the bank taken over by some other banking institution, or to force it into liquidation, and that this course was taken in the interest of the country in time of war. I am in sympathy with the action of the finance minister at that particular time. The country was up against it hard, and the object of the people of the Dominion of Canada was to win the war. The then Minister of Finance stated that he would not have allowed any bank to go into liquidation at that particular time, because it would not be in the interest of the country. Most of the men and women who deposited their money in that bank believed that they were putting it into an institution that was safe, and that they had the government behind them; that was the general impression of depositors at that time. Now if these people believed they were safe in depositing their money in that bank, and the Minister of Finance took action to protect the bank from liquidation, in my opinion it is only justice to those depositors that the country should reimburse them, because their losses were entirely brought about in the interests of the Dominion of Canada, at a time when Canada was faced with that terrible war through which we passed. That is the sole reason why I heartily support the proposition to reimburse the Home Bank depositors

Home Bank
to the extent provided in the resolution now before the House. I am opposed to the amendment because I believe it is an interference with the resolution before us. Therefore I shall support the resolution and oppose the amendment.


Mr. MARTELL:: Is my hon. friend supporting this measure on the ground that the loss to these depositors arose as a consequence of the war and for no other reason?


Robert John Woods: Yes.


Lewis Herbert Martell: That is the ground on
which I support it.


Robert John Woods: And I support it on no other ground.


Lewis Herbert Martell: Not on the ground that
any other bank would have the right to be reimbursed; otherwise that would be giving a government guarantee to every bank. The hon. member is supporting solely on the ground that the trouble arose as a consequence of the war?


Robert John Woods: Yes.


Lewis Herbert Martell: That is my reason, toe.


Robert John Woods: The Home Bank depositors suffered in the interests of the country when we were at war, and on that account they should be reimbursed by this parliament in time of peace.


William Irvine: I am not very particular
as to whether this legislation is presented on moral grounds, compassionate grounds, or on some other grounds. I am very glad that the bill has been introduced, and even although it does not fully compensate all the depositors, still I am sure they will be very glad to be reimbursed to the extent to . which legislation provides.
I wish to make a suggestion: I do not know why the government decided to give a certain percentage and not all of the loss, but in view of the fact that the government i3 not giving sufficient to pay all depositors in full it would appear to me to be practical to decide, say upon a basis of $1,000 or $2,000, that all depositors having that amount should be paid in full, the balance to be paid to the larger depositors pro rata. I think that would be fairer and would perhaps go further in giving the relief which the government no doubt have in mind.
As to the amendment, I shall surely vote against it, not that I am opposed to the Farmers' Bank depositors being reimbursed,
but because that does not, in my opinion, properly come under this resolution. I hope the gentlemen who are interested in the Farmers' Bank will bring in another resolution dealing only with the Fanners' Bank, and we will consider it on its merits.


Mr. BLACK (Halifax):: The Home Bank
failure is one of the greatest "black marks" which banking in Canada has ever experienced. In looking at its early history, my judgment is that this bank should never have received a charter. The charter was granted to a concern that was at the time practically bankrupt. Having received the charter, the management seem to have proceeded to wreck the institution and was not unsuccessful. The principles of good banking were ignored; deception and fraud were practised; so that in the end shareholders, depositors and others suffered severe loss. There was a period when this government could have saved heavy loss to those interested parties, the depositors and shareholders, without costing the country a dollar. But they did not do so; they allowed the bank to go to the wall. Now the country is called upon to provide some five and a half millions to reimburse the depositors who unfortunately made a bad investment by placing their savings in that bank. This is a dangerous policy, forming a precedent and opening the door for further claims, past or future, of similar character. The government is not legally liable; it is not the duty of the government to pay the losses of people who have made mistaken investments. No government should be expected to guarantee any investments, and governments and parliaments have in the past repeatedly set their faces against any such guarantees. It is fundamentally unfair to take the moneys of all the people, in this case by way of taxation, for the benefit of some few people who happen to be Home Bank! depositors. Speaking as a member representing a constituency in Nova Scotia, the people of which province have not a single interest at! stakey T consider it is palpably unfair to call upon them for money for the benefit of people in Ontario and further west. They should not be asked to reimburse those who have unfortunately lost their money. Nova Scotia has experienced more than one bank failure; the Maritime provinces have experienced bank failures; but did the depositors or shareholders appeal with hat in hand for charity to ibe reimbursed for those losses? Never. Therefore, it is palpably unfair to ask that part of the country to contribute towards reimbursing those who
Home Bank

have unfortunately lost money in the Home Bank. I sympathize very sincerely with those who have made losses, with anybody who has made losses. Especially do I sympathize with the poorer people, wage earners, whose money was deposited in that bank. Yet I cannot see that the principle of reimbursing those people by this government is fair and just or a principle that should be followed. As a Nova Scotian, I protest against any such vote as is proposed which necessitates calling upon the people of my province to put their hands into their aJmost empty pockets in order to pay losses made by a few people of this country through what has turned out to be an unfortunate investment.


Mr. BROWN:: I propose to vote against
the amendment for two or three reasons. Generally speaking, we find that the introduction of amendments leads to confusion rather than otherwise, and) they are the means of turning our thoughts away from the main issue. I would oppose the amendment for the further reason that it is not a matter that has been before this parliament. While many members of this parliament may be familiar with the circumstances surrounding the failure of the Farmens' Bank, it must be remembered that this is a new parliament and while we have given some Consideration to the question of the Home Bank, we are naturally not in a position at the present moment to consider the question of the Farmers' Bank. I would oppose the amendment also, because this difference lies upon the surface, that the reason that is advanced for the introduction of the present bill-that this is the outcome of certain conditions that prevailed during the war-does not apply as regards the Farmers' Bank. That reason on the surface is sufficient to make a distinction between the two cases. Those who hold that the depositors of the Farmers' Bank have a just claim against the government should present their claim to parliament when we shall deal with it on its merits. For my part, I accept this bill in the same spirit as the hon. member for Dufferin (Mr. Woods) and the hon. member for Hants (Mr. Martell). I wish some consideration could be given to the suggestion made by the hon. member for West York (Sir Henry Drayton), who introduced a new thought into the question. He intimated that there was a possibility that speculators had already been at work. We certainly do not want to do anything to encourage the speculator. If there are those who have been taking advantage of the necessities of the depositors and advancing money to them in the hope that later on they will be reimbursed, we should take steps 
to see that those gentlemen get nothing more than the actual amount that they have advanced with such interest as may be deemed fair It would be quite possible for us at this time to make a provision that would cover that matter. I can readily see the difficulty that arises when a suggestion is made that there should be discrimination in the payment of depositors. It has been suggested that all sums under $1,000 should be paid in full. It can easily be understood that that would not conduce to equality. It might be that a very large corporation or association or some wealthy man happened to have a small deposit in the Home Bank and other persons, some of whom I know, had all their savings, perhaps some $3,000 or $4,000 or more in that bank, and to pay the one in full and the other in part would be failing absolutely to apply the principle of equity. If any means can be arrived at, any instructions given to the liquidators that would ensure that those who are most in need of relief are to be attended to first, certainly we would like to see that done. But at a glance anyone can see the difficulties that will confront them in arriving at conclusions in the matter. This will naturally necessitate an investigation of the claim of every individual depositor.


Mr. EVANS:: I am glad to see that the
government recognizes its responsibility in this matter. The failure of the Home Bank entailed great suffering. I could wish that some discrimination could be made in the matter of many of those who became really destitute through the failure of the Home Bank. There are some, I believe, who had1 their end hastened through grief on account of the loss of all of their savings. That this establishes a precedent, I have no doubt, and from this time forth, doubtless, the people will look on the government as their guardian more than they have . done in the past. That they have done so in the past goes without saying. The government has been looked upon as the guardian of the people's property and particularly their investments in institutions like banks which are so closely connected with and privileged by the government. To me the responsibility for these things must be fastened on somebody, and no valid reason was given why this bank was allowed to continue for seven years after it was known by the government that it could not live. In fact, I look upon the government which had the knowledge that this institution was about to fail in 1916, and each government since that time as being criminally neglectfu not less criminal than those directors who have been put behind the bars to serve sentences for varying periods. The responsi-

Home Bank
bility must be placed somewhere, and I have no doubt the people will place it on those who are responsible for the legislation of the day.
I am glad the government is now recognizing to some extent its responsibility towards the depositors. I propose to vote against the amendment, but at the same time, I think both the depositors in the Home Bank and the depositors in the Farmers' Bank have a moral claim on the government.


Mr. BLACK (Yukon):: Will the full amount of $5,450,000 which is to be voted reach the depositors, or are fees and percentages to be paid out of this? There is a report that persons engaged in lobbying for this relief are to get a commission of five per cent on the total amount. Is this correct, or does the relief go directly to the people needing it?


James Alexander Robb: It is the first I have heard of
it. The court has appointed a liquidator, and the government will pay the money over to him.


Henry Herbert Stevens: Will the government
direct in the bill that the full amount shall reach the depositors, to protect, for instance, what the hon. member for Lisgar (Mr. Brown) and the hon. member for West York (Sir Henry Drayton) mentioned?


James Alexander Robb: I think when the bill is presented, hon. gentlemen will be fairly well satisfied. It will make it very clear.


Henry Herbert Stevens: I think this parliament
owes it to the taxpayers of this country to see that every solitary dollar goes to the depositors.


James Alexander Robb: I agree.


Henry Herbert Stevens: There should not be one
single cent diverted in any shape or form, because this amount is entirely in addition to what the liquidator realized last year. Not even the liquidator's fees should come out of this "sum, because this is not something that the liquidator has realized as a result of his efforts. It is a free grant of this parliament, and not one cent should be diverted for any legal fees, liquidator's fees, commissions of committees, or any other purpose whatsoever.


James Alexander Robb: I am very glad my hon. friend has emphasized that, because the Prime Minister and I took very great care to emphasize that point to the liquidator and the committee with whom we had a meeting.


Mr. MILLAR:: I am willing to accept this
legislation which has been brought down, but I would have preferred if the amount had been placed in the estimates. There is one 253



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feature that has not been touched on in the discussion that has taken place to-day, and that is this. The depositors in the Home Bank are in a little different position from those of any other bank that has failed, so far as I know. I believe it was pointed out by the report of Chief Justice McKeown that if Sir Thomas White had taken action in 1916 the depositors would not have lost one cent. I may be wrong about that, but I believe I am right. And there is a difference between the failure or the poor judgment of a minister and his deliberate and1 calculated act. I will not say that Sir Thomas White was wrong in taking the course he did in the interest of Canada as a whole. I think possibly I might have taken the same course, but as a result of his not taking action at that time, the depositors were placed in a position to lose a very heavy sum of money, and as Canada as a whole gained thereby, it is right and perfectly proper, I think, that Canada as a whole should pay.
If possible I would like to see the suggestion that has been made-that the money be distributed according to the need of the depositors-acted upon, but I am afraid that if any attempt were made to do that, it would simply open the door to dissatisfaction. The question would arise, what about the need- the need at the time the bank closed, or the need now? Some depositors may be much poorer at the present time than they were when the bank closed. The more one thinks about it, the more clearly one sees that it would open the door to dissatisfaction. While the suggestion is a good one, I am afraid that it could not be carried out without causing a lot of dissatisfaction. I think it would be better to distribute the money in proportion to the amount on deposit at the time the bank closed its doors. I am afraid I must vote against the amendment because it confuses two issues. Each of these should be brought before the House separately and judged on its merits. For these reasons I must vote against the amendment, and for the bill.
Henry Lumley Drayton: I am compelled to say something on this bill owing to the remarks made by my hon. friend from Saskatoon (Mr. Evans) as to the criminality of this and other governments; I suppose he meant, in that connection, the minister. In the first instance, I would like to see if there was any criminality. We will be frank and go right back, because I know the hon. gentleman is talking about 1916, and what he thinks should have been done then and was not done, and



EDITION

[Stage Direction]
Home Bank
[Stage Direction]
then in a burst of wild imagination he said that anyone responsible for that should be treated just like some other criminals who are now behind the bars, or words to that effect. I would just like to tell the hon. gentlemen in the first place, that I think the hot weather has affected him-
John Evans: Not at all.


Henry Lumley Drayton: -because generally he is much more sensible than that. If Sir Thomas White made any mistake in 1916, I want to tell my hon. friend, there are an awful lot of people in his part of the country who made the same mistake. After all, what did Sir Thomas White do? In the year 1916 he accepted the advice and the judgment of Hon. Mr. Crerar, who, if anybody ought to know anything about it, ought to have known about this matter. That is what happened; nothing else happened. You can talk as much as you like about the war. Of course, the war made it just that much more difficult. I thought somebody might be foolish enough to bring up this question, and therefore I took one or two notes as to the proceedings, and I am going right into what really took place.
In the first instance, I point out that in 1916 the complaint was made to the hon. Minister of Finance, then Sir Thomas White. From whom does that complaint come? That complaint comes from the western directors. And who are the western directors? They are Messrs. Crerar, Persse and Kennedy. In connection with their complaint they go into the whole thing. They give a wealth of detail; they go into different accounts; they show where losses are likely, and complain of management and the like. Papers are received, and the question of going into the whole thing is considered. These people who make the complaints, these people who ought to know; get busy to find out what can be done. Why, Hon. Mr. Crerar comes down here and re-arranges the management. He brings out Mr. Haney and replaces Colonel Mason. More than that, the same hon. gentleman makes valuations of collateral; he goes out to British Columbia and makes a valuation of collateral, and reports to Sir Thomas White that in connection with those large lumber accounts, instead of there being a loss on them, there is a comfortable balance.
I am going to refer to the evidence. I am going to ask the House if any reasonable man in the possession of his senses- and here I do not accuse the hon. member for Saskatoon (Mr. Evans), because I put it down to the weather although he says it is not-would not do just as Sir Thomas White

did. I will tell the hon. gentleman again now, so that it will not be overlooked, that on the express request of Hon. Mr. Crerar, Sir Thomas White took no action. Did Sir Thomas White do anything unreasonable in complying with Mr. Crerar's request? Was there anything about Mr. Crerar that the hon. member for Saskatoon is going to suggest ought to have put Sir Thomas White on his guard? Was not Hon. Mr. Crerar a man whose word hon. gentlemen, and particularly hon. gentlemen to my left, would say ought to be taken? Let us take for granted-I think we have a right to do that -that Sir Thomas White was right in looking upon Mr. Crerar as a man of his word, a man of integrity, a man of ability. Does anyone want to challenge that?
Let us see now whether he had any speteial knowledge in connection with the Home Bank. I submit-and I think the hon. member for Centre Winnipeg (Mr. Woods-worth) will agree with me that there was nothing about Mr. Crerar to put Sir Thomas White especially on his guard against him; and if the hon. member does not agree with me, other hon. members will. They will agree that Sir Thomas White was right. If there was anyone who knew about the Home Bank it was Mr. Crerar. Why, he put the Home Bank on the map in western territory. A director of years' standing, having to do with the sale of the stock and the issue of the prospectus, why, surely to goodness, Mr. Chairman, if there was any one man in the world that Sir Thomas White had a right to think knew about this matter and whose word could be taken, it was Hon. Mr. Crerar, more particularly in view of his standing. Is Sir Thomas White to be blamed throughout the west because he believed in Hon. Thomas Crerar? That is the case put by the member for Saskatoon (Mr. Evans).
Now, as I say, Mr. Crerar, with his company, the United Grain Growers Limited, had to do with the Home Bank for many years. I am going to ask hon. gentlemen to look at page 582 of the evidence taken before Hon. Mr. Justice McKeown. They will there find that the Grain Growers' Grain Company Limited acted as selling agents for the Home Bank in disposing of the stock, and that they got a commission of five per cent. And I may tell the hon. gentleman that they proved themselves to be good people of business. Looking at the daily press, I notice that out of 1,800 shareholders, there are 1,100 located in western Canada as a result of that selling agency. So they did pretty well. They issued a prospectus, and there is no doubt again about this; the hon. gentlemen will find

Home Bank
it at page 583 of the same evidence. I am going to read a short extract from the Grain Growers' prospectus:
Take this opportunity of getting in on the ground floor, not of a visionary bank, but of one strongly established and paying good dividends. Let us have a Home Bank which would be the people's bank. Read this prospectus, and learn about it and think about it.
The Grain Growers' Grain Company believed in the bank. They were not trying to get rid of something they did not believe in; why, they owned a thousand shares of the bank stock at that time And Mr. Crerar believed1 in it too; he owned sixty-six shares. So far as I am concerned, I have no doubt about the honesty of Mr. Crerar in the representations he made to Sir Thomas White, any more than I have the slightest doubt at all as to the honesty and correctness of Sir Thomas White in believing that Mr. Crerar was telling the truth and knew something of what he was talking about. That is the whole issue; there is no other issue.
The western directors' complaint is dated January 22, 1916. Then Mr. Crerar, as I said before, takes an active part in reorganization. He goes himself and inspects and values the collateral, and after all his activities down here, on March 20, 1916, he writes Sir Thomas White as follows:
Sir Thomas White,
Minister of Finance,
Ottawa, Canada.
Home Bank of Canada
Dear Sir,-You will have learned from Mr. Lash of our visit to Ottawa to-day to discuss bank matters with you, and our faillure to see you through your absence from the city. You will also have learned of the change made at the recent meeting of the Board held in Toronto a few days ago, whereby the active management of affairs is placed in entirely new hands through Mr. Haney taking the vice-Presidency, and assuming direct executive control, with Mr. Machaffie, the Manager in Winnipeg, whom, for the time being at least, he is bringing to Toronto to assist him. By this arrangement I feel quite certain that the knowledge and information concerning the position of affairs desired by the Western Members of the Board, and also the changes they desired when they directed their request to you, and which they saw no hope of securing through the then existing management, can now be satisfactorily obtained without calling in outside assistance. In my opinion, the situation has materially improved within the past month, and, at this juncture with the changes in management recently made, it is better to have the enquiry proceed from within rather than from without.
Owing to the possibiflity of my being unable to attend a suggested conference with you next week, I am giving this letter to Mr. Lash so that he may place it before you. I may add that Mr. Kennedy, with whom I have discussed the views herein expressed, is in agreement with them. Mr. Persse, the other Western Director, is in the South, and so we have been unable to consult him. I feel however, that were he here he would be in agreement with us.
I am,
Yours truly,
T. A. Crebab,
353i
There is the letter of protest. There were also interviews, requests, demands, that this bank should not be driven to the wall and destroyed, but should be given an opportunity of carrying on without the publicity thait an outside investigation would engender. My hon. friend now wants us to believe that it was a criminal act because Sir Thomas White listened to Hon. Mr. Crerar-for that is what he did, nothing else. This attitude was persisted in by the Hon. Mr. Crerar, and right down until after the smash, according to his evidence before the investigator, that was still his attitude. He was not taking anything back; it was still his belief; and I will give hon. gentlemen some other pages of the evidence where they can find' it. Perhaps then they will say something more about Mr. Crerar. For example, referring to the May meet-ing-the May meeting subsequent to the writing of the letter of March-in his evidence at page 431 Mr. Crerar says:
At this meeting I remember, at the end of May, there was a decidedly optimistic feeling. The western directors felt satisfied with the energetic manner in which Mr. Haney was taking hold of things.
Again, according to the evidence, his opinion remained unchanged. Why, Mr. Crerar himself sold part of his stock in 1918, and he sold the balance in March, 1923. These sales were made after he resigned from the board. Hon. gentlemen will remember that he resigned on entering, the Union government. In answering a question put to him in connection with these sales, at page 487. he savs:
I had no more inside information than any of the other directors had. I had been off the board for over six months-
This is when he is asked why he sold his stock.
-and I want to say now, Mr. Reid, and I want to make it perfectly clear to you and to the court, that at that time I thought the bank was getting into a good position, and I did not sell my shares if your question implies that, because I had a doubt as to what might happen to the bank.
Again on page 488:
Q. What reason had you to think the Home Bank of Canada was all right at that time?
That is, the time when the stock was sold, as late as 1923. His answer is:
Because I had confidence in the management of the bank at that time, and I thought its position was improved.
There is Mr. Crerar's testimony. Honestly- and it is just as well to be honest with ourselves sometimes, if we cannot be with anybody else-honestly, who ought to know more about the affairs of the Home Bank in 1916, the man who gets the formal reports and the formal complaint, cr the man who makes the
Home Bank

formal complaint, the man who was looking after the sales of the stock?


Mr. MORRISON:: Why does not the hon. gentleman refer to the general manager of the Home Bank instead of to Mr. Crerar all the time? The general manager knew the whole inside story.


Henry Lumley Drayton: My hon. friend
is making an interruption. He can talk as much as he likes a little later on. But I do not mind answering questions. I am not saying that Sir Thomas White stopped this investigation because he was told anything by the manager. If I said so it would be untrue. The reason he stayed his hand was because of what he -was told by Hon. Mr. Crerar. There was no crime in Mr. Crerar's telling him that. What I am saying to-day is justified, and necessarily so, by the remarks of the hon. member for Saskatoon.


John Morrison: Who' knew better than
Hon. Mr. Crerar? The general manager knew better.


Henry Lumley Drayton: The general manager was under a cloud; Mr. Crerar had made his charges against him-that it was necessary he should be got rid of. 'He was in process of elimination, and he was eliminated.


John Evans: Did Sir Thomas White not
know at the time?


Henry Lumley Drayton: Know what?
All Sir Thomas White knew was that Hon. Mr. Crerar had made complaints to him; that Mr. Crerar had been a director for six years and was in a position to know what was going on-or should .be if he had been carrying out his duity, as I assume he was-at any rate, Sir Thomas White had a right to assume it. The general manager was the man under suspicion, and the very worst thing to do would be to go to him. Mr. Crerar says, he must be got rid of. Mr. Crerar reports he is got rid of; there is a new management; all is well; keep your hand off our institution. And because thait is done, hon. gentlemen suggest that Sir Thomas White should be behind the bars. Well, there is the action taken by Sir Thomas White on the strength of what he got from Hon. Mr. Crerar, and I submit that Sir Thomas White was perfectly justified in taking that action, just as Hon. Mr. Crerar was perfectly justified in doing what he did. Hon. Mr. Crerar was honest, I think, in every single thing he did in that connection. But because a minister of the crown believes in a man of the standing of Hon. Mr. Crerar, a man who knows the business, a man who makes a complaint and then says, "Stay your

hand, it is all right,"-anyone who makes a suggestion that that was improper on the part of the minister is not doing himself justice. What was there about Hon. Mr. Crerar that would put Sir Thomas White on his guard? What was there about his morals or his standing to make Sir Thomas White think he was not a man fit to consult with, that he was not a man whose word could be taken?


Mr. McMASTER:: Nothing.


Henry Lumley Drayton: Nothing; the
hon. gentleman is perfectly right. I think Hon. Mr. Crerar went into that thing with the best of motives; I think he sold the stock with the best of motives; I think 5 p.m. he wanted to build up the concern properly, and that his complaint was absolutely right. Moreover, I think he was right in going around and making his valuations and the like, though it turned out he was wrong-


Mr. McTAGGART:: Does the hon. member seriously contend' that the responsibility of the Minister of Finance ended with the assurance from one of the directors that the affairs of the bank were in better shape?


Henry Lumley Drayton: The situation
was this:	The position of the bank is drawn
to his attention by the three western directors. He takes the question up with them and they arrange for a change of management. They are satisfied that they can pull the bank through, and he happens to believe it-he happened to believe that they could pull it through and that they should be given a chance. What other responsibility is there except to take the reports as they are put in from time to time? Was he to believe that all these reports were false, as subsequently turned out? His whole liability was confined in the first instance to what was referred to in that complaint. The complaint being settled the way it was; and the reports being what they were, what else was there? There was at that time no inspection of banks, there was no right to go in and pull them about in all directions as there is now. There was then no highly paid official giving all his time to going about among the banks and getting the facts. What else could Sir Thomas White do? He could either put the bank out of business, or he could say, "Mr. Crerar is a pretty good chap; I am going to give him a chance to pull this institution out of the hole"-and he did it. I have given you Mr. Crerar's evidence and have quoted his letter. It is of no use to base an argument upon doubt or surmise; here are the facts. Now, the next question is, did Sir Thomas White act rightly-

Home Bank


Mr. STEWART (Humboldt):: The hon.
member has based his argument on the suggestion that action was taken wholly on the responsibility of Hon. Mr. Crerar. Does he think that Sir Thomas White, then Minister of Finance, gave no consideration to the effect the failure of the bank would have on the affairs of the country ait that critical time, and that that did not influence his judgment in the matter?


Henry Lumley Drayton: There is ample reason without it. With it, of course, the situation1 is complicated. But I ana not going to give my own opinion, nor shall I merely use newspaper reports, and that sort of thing, where many loose things are said; I will refer to the evidence itself.


Charles Wallace Stewart: I have not
the evidence before me. Is that not in the evidence?


Henry Lumley Drayton: Haney report with regard to New Orleans, in view of the opinion expressed by Mr. Crerar, and his fellow directors from the west, what would they have said in 1916 if I had closed up the Home Bank?
Yes, and' we might stop here and ask what would the hon. member for Saskatoon (Mr. Evans) have said at that time if Hon. Mr. Crerar had been turned down and a western bank put out of business? Why, the eohoes from the yell that would have gone up from those eleven hundred shareholders would be still ringing.


Andrew Ross McMaster: Down here we did not catch the sotto-voce remarks of the leader of the opposition.


Arthur Meighen: I was just emphasizing
the well spoken words of the hon. member for West York. I commend them earnestly to the hon. member for Brome.


Andrew Ross McMaster: I was listening carefully.


Henry Lumley Drayton: Sir Thomas
White goes on:
Well, I know what they would have said. They would have advocated appointing a committee for the minister, that is what they would have done. What would they have said about the value of the timber limit? What would they have said about New Orleans? What would they have said about the goodwill of that bank built up over twenty years? The goodwill of a bank is worth millions sometimes. In the case of the Merchants Bank it was said to be worth seven millions. The goodwill, the establishment, the money spent, the effort made, the advertising, the connection, all lost if you close a bank.
Now, I think that very fairly answers the question put to me by the hon. member as to what Sir Thomas White acted upon. As to the outside inquiry of 1916, he acted upon representations made by Hon. Mr. Crerar, and in the judgment of any fair-minded man in this country he had to act upon those representations, unless he was of opinion that Hon. Mr. Crerar was such a man that no reliance could be placed upon his statements. I should think hon. gentlemen would be very slow in making such a suggestion as that.


William Lyon Mackenzie King: I would not
for a moment assume that my hon. friend from Glengarry and Stormont who has moved an amendment wishes to defeat the resolution before the committee and thereby deprive the depositors of the Home Bank of any relief. I point out to him, however, that without in any way helping the depositors of the Farmers' Bank such can be only the effect of his amendment.
In the first place, as my hon. friend knows, the matter of compensating the depositors of the Farmers' Bank has been before this House and has been before the upper chamber, and

with respect to that ibank the Senate has already expressed its view and' opinion. My hon. friend, I think, may logically assume that if a bill based on this resolution goes to the Senate with his amendment to compensate the Farmers' Bank depositors as well as the Home Bank depositors the only effect will be to have the bill defeated.
Mr. KENNEDY (Glengarry and Stormont!: Would the government welcome that?


William Lyon Mackenzie King: No, the government would not welcome it. The government expects this legislation will pass the Senate and wants it to pass. The government has had no purpose in bringing this measure into the House other than to carry out what it believes to be its honourable duty in view of the finding made by the commission that investigated this matter, and in view of the unanimous report of a committee of the House. I want to make that perfectly clear because that is the ground on which the government has proceeded.
Perhaps I may be permitted to recall the circumstances under which this matter came before the government. As hon. members will recall, the depositors of the Home Bank appointed a national committee to wait upon the government and present certain grounds on which they claimed the right to have their losses made good in so far as the government could see its way to recognize their claim. They presented two grounds on which they based their claim. One was that the Minister of Finance of the day had taken a certain course for patriotic reasons, had pursued a course which was detrimental to the depositors because he believed it was in the interests of the country as a whole. The other ground was that the minister of the day had not performed his duty, that he had been neglectful, that he had not complied with the requirements of the law; and it was said by the depositors on either of these grounds we are entitled to have our losses made good. The government might have reached a decision of its own volition. To have done so would have 'been to judge a political opponent. The government would have been called upon to pronounce judgment on Sir Thomas White, minister of a former government, as to whether has action was in the nature of a patriotic act, or whether it was a neglect of public duty. The administration did not feel it would wish, in a matter of such importance, to have itself put in that position for a minute. We therefore took the one course that would remove the discussion of the Home Bank matter entirely from the realm of partisan politics by appointing a royal commission, asking the parties to

Home Bank
appear before the commission to present their statement, allowing the commission to make its findings; and when the commission had made its report, the government transferred the report to the committee of this House that has to do with Banking and Commerce. That committee had opportunity to consider the report very carefully, and it brought in a recommendation that upon the evidence taken before the commissioner it was of the opinion there was a moral claim in equity. This House passed that report unanimously, and it is on that action that the government to-day is basing its position, not upon any other ground or upon any other reason. We have not wished to go into the question of whether Sir Thomas White's action was one of patriotism or neglect of duty; we have not wished to open up any matter that could be regarded in any way as a subject of political controversy. We are prepared to accept the report of the commission, and the committee, and in good faith we have brought down this measure after carefully discussing all aspects of it with the liquidator who knows more about the affairs of the bank and its depositors than any other living person.


Arthur Meighen: Did the commissioner
find there -was any moral claim in equity or legal claim against the country?


William Lyon Mackenzie King: He found there was a moral claim.


Arthur Meighen: Where?
Mr. MACKENZIE KING; That was the nature of the finding.


Arthur Meighen: I do not know where he
found it. I would like my right hon. friend to refer to it.


William Lyon Mackenzie King: I think if my hon. friend will study the report of the committee-


Arthur Meighen: It is not there.


William Lyon Mackenzie King: -he will find
it in the report that the committee brought in to the House; the particular finding which he has just read was based on the report of the commissioner.


Arthur Meighen: There was no such finding in the commissioner's report at all.


William Lyon Mackenzie King: Well, the exact words were not there, but I am giving the inference which the committee drew from the finding of the commissioner.


John Wilfred Kennedy: Did the commissioner find that the
former Minister of Finance had not done his duty?


William Lyon Mackenzie King: I do not want at the moment to go into what the commissioner found in regard to that matter. All I wish to make clear is that the finding of the commission was placed before the committee of this House, and the committee of this House had a right to inquire into every phase of that finding.


John Wilfred Kennedy: The minister referred to two grounds on which the legislation was based, first that of the neglect of the former Minister of Finance, and secondly, patriotic reasons. Did the commissioner find in regard to those two reasons?


William Lyon Mackenzie King: I said that
these were the grounds that were urged before the government, and that the government refused to entertain either of them. The government said, "We will not pronounce judgment upon a political opponent. We are not here to say-and it is not our duty in a matter of this kind to say-whether Sir Thomas White performed his duty or did not perform it, but what we do feel is that the importance of the case, having regard to the arguments presented to us, is such that we should appoint a royal commission to investigate this matter and prepare a report for the consideration of parliament." When that report was prepared it was submitted by the government to the standing committee of this House dealing with Banking and Commerce, and when that committee had the report before it and had gone into the merits of the report, they brought to this House their finding that there was a moral claim in equity on the part of the depositors of the Home Bank against the government. We have endeavoured to implement what we believe to be the obligation of the government, in view of the report presented to us. As I was saying, the liquidator probably knows the position of the depositors better than anyone else. All the suggestions that have been raised this afternoon were raised by the Minister of Finance and myself with the liquidator when discussing this bill with him, and were very carefully considered 'by the cabinet as a whole. I think many of us felt, as the hon. member for West York (Sir Henry Drayton) has expressed himself this afternoon, that if the measure could be made
Home Bank

one of caring particularly for distressed cases, those who have suffered obviously, the less fortunate members of the community, as contrasted with those persons who may be well to do, we would for many reasons prefer to proceed in that way; but the finding of the committee was that there was a moral claim on the part of the depositors against the government. The finding dlid not say a moral claim by the man who had a small account, or by the man who had a large account or by the miner, or by the municipality. It merely said a moral claim on behalf of the depositors; the government was obliged to act with respect to a moral claim; is it possible to permit a claim of one depositor and deny it in the case of the other? Having considered that matter very carefully, and more particularly having had a knowledge of the clas3 of depositors on the whole, it seemed to us we were perhaps, in the bill to be introduced, coming nearer to doing what my hon. friend has suggested is desirable than could be done in any other way. May I illustrate? My hon. friend has spoken about the case of the miners in Fernie. He said they should obviously be a first consideration of the government in a matter of this kind. If one were drawing a contrast between an individual who should be paid, and a group who should not be as favourably treated, one would be inclined to say that a corporation was well able to take care of itself. It so happens that the municipality of Fernie is one of the corporations most involved dn loss through its deposits in the Home Bank, and as one studies the situation, one finds that in Fernie the ratepayers of the Fernie corporation are almost completely the miners themselves and the one mining corporation that employs them. To deny the corporation of Fernie any consideration in this 'matter would be to injure the very class my hon, friend says we should be careful to consider in a matter of this kind. When it comes to a case of considering the corporation of Femie, and not considering the corporation of Toronto; for example, which had a deposit in the Home Bank, would this House have looked favourably upon any action on the part of the government whicfh would have approved compensating losses in the 'case of one corporation and denying similar rights to another. I can assure hon. members that in considering this claim the government has gone carefully over the whole situation and weighed every aspect of it, with the idea of meeting the obligation of the moral claim in what seams to be the most equitable manner.

May I say a word as to the other point which has been mentioned, namely, the propriety of the government bringing in this measure in the form of a bill? Some criticism has been made to the effect that we should have placed the amount in the estimates. First of all, may I say in regard to that, so far as this .parliament is concerned, I have yet to learn of any case where moneys, other than for the public service, or based upon some ball which has passed this House, or upon some resolution of the House or one of its committees, have been appropriated in the form of estimates. Estimates are generally for the public service. However, apart from that, may I draw attention of the House to this circumstance? If we had brought dn this measure by way of an estimate, or had asked parliament for an 'appropriation through an estimate, the very first criticism of hon. gentlemen apposite would have been that we were denying to another branch of this parliament which has a right to pass on. matters of public 'policy the right to consider a great question that affects the interests of the taxpayers of Canada and the people of Canada as a whole, and that we could not be supported in so doing. We would next have been asked why we had departed from the precedent set by hon. gentlemen apposite when they undertook to compensate the Farmers' Bank depositors. They did not proceed by way of estimate, but they took parliament as a whole into their confidence and brought in a bill which passed this House and went to the other 'chamber. True that bill did not pass there. We hope this bill will meet a different fate. But the circumstance that parliament, in dealing with matters of this kind, had previously proceeded by way of a bill rather than by estimate was a strong reason why this government should not in a matter of practice depart from a precedent already set in this House.
But there is another aspeot of this situation and another reason I want to give this House very frankly which made it impossible for this government to have proceeded by way of an estimate, ilf it wished to do so, in preference to bringing in a bill, and that wais the nature of a report made to us, to members of the government, by a committee of the depositors that waited upon myself and some other ministers in presenting Claims on their behalf to the government. They intimated to us that what was equivalent to a threat had been made that if the government did not proceed by way of an estimate, it was taking a course which would sknply mean that its purpose would not foe carried out. I asked

Home Bank
what the committee meant by a repnesemta-tion of that kind. They stated that they had been told1 by an hon. member of the Senate, one who was leading his party in the Senate, that if the government were to brinig in this measure in the form of a bill, that bill would be defeated in t'he Senate.


Arthur Meighen: Does the right hon. gentleman refer to Sir James Lougheed?


William Lyon Mackenzie King: Sir James
Lougheed was away ill at the time. Senator Robertson is the gentleman to whom I refer, a member of the Senate who was leading the Conservative party in the Senate during Sir James Lougheed's absence from the other House. Senator Robertson intimated to the National Committee of Depositors that if the government proceeded by way of a bill, that bill would be defeated in the Senate-an extraordinary procedure for an hon. member of another House to undertake to speak for that other House as to what action it would take on a bill presented to parliament. What right had he to say what action the Senate was going to take on a public matter? What right has any hon. member of the Senate to deny to the Senate the fullest consideration and discussion of a matter of this kind? Having regard to a threat such as that, the government had no alternative, even had it wished to take any other course, than to proceed in the manner in which it is proceeding at the present time.


Horatio Clarence Hocken: I think the Prime Minister ought to go a little further. He ought to tell us where he got that information. If he is making a charge against Senator Robertson, he ought to be a little more explicit.


William Lyon Mackenzie King: I told my hon. friend I got it from the committee who made representations to me that they had received it from Senator Robertson.


Horatio Clarence Hocken: From every member of the committee?


William Lyon Mackenzie King: From the members of the committee who were present. I was not satisfied with that. I said to the members of the committee: I Want a little more substantial evidence. I was just like my hon. friend in that regard. They therefore gave me Senator Robertson's letter which I shall read to the House. The letter is as follows:
The Senate Canada
Ottawa, 27th February, 1925.
Dear Mr. Lee,-
May I acknowledge, with thanks, receipt of your letter of the 11th February enclosing a statement
outlining the opinion of the Home Bank Depositors' National Relief Committee, in support of government action of relief to the depositors.
I think I have in previous letters outlined to you quite clearly my present views which were and are that the Home Bank was conceived in iniquity, born in dishonesty and never was conducted as it should have been from the beginning. When it was inevitable that the bank should close its doors and the matter was brought to the attention of the federal government, no effort was made to safeguard the depositors' interest, let alone the bank's credit, by the government, notwithstanding the fact that substantial relief had been given by the government in other instances which would have been ample to have saved the situation in this case, and this unfavourable consideration by the government resulted in the crash occurring.
These are facts in addition to those brought out during the investigation which you conducted before a commission appointed for the purpose.
As previously stated to you I have always been of the opinion that a much stronger case could have been made out, had it not appeared to be that every effort was being made to avoid embarrassing the present government in any way and the interest of the Home Bank depositors suffered in consequence thereof. I therefore have no hesitation in saying to you frankly and openly that if the government is in earnest in its professed desire to provide a measure of relief for Home Bank depositors it should include in the estimates of the present session of parliament whatever amount it desires to contribute for that purpose. Estimates as you know, are wholly within the jurisdiction of the House of Commons and are not subject to revision or modification by the Senate. You also are aware that notice has already been given to the effect that if relief is granted to the Home Bank depositors, notice of the demand for similar relief for depositors in other banks which have previously failed in Canada would be made. This contention, with much supporting evidence from quarters in Canada where other banks existed and failed will undoubtedly be brought to bear in the Senate if the government propose its measure of relief through a special bill, and it naturally is uncertain what the result of the legislation might be.
However, I reiterate that if the government is sincere in its desire and intention to aid Home Bank depositors it should include whatever amount it desires to contribute in the estimates where it ought to be and not by way of a special bill.
Yours sincerely,
G. D. Robertson.
Mr. W. T. J. Lee,
Chairman Home Bank Depositors' Relief Association, 244 Bay street, Toronto.


Horatio Clarence Hocken: That letter does not support the Prime Minister.


Arthur Meighen: Not at all.


Some hon. MEMBERS:: Hear, hear.


William Lyon Mackenzie King: Hon. gentlemen opposite applaud.	I wish again to repeat what I have said. I think it is a most extraordinary thing that the leader of the Conservative party in the Senate should make a declaration to the Home Bank depositors that if any measure goes from this
Home Bank

House with respect to the Home Bank, that measure is going to be killed in the Senate.
Some bon. MEMBERS: He does not say that.


William Lyon Mackenzie King: I hope my hon. friends will read this letter over just as carefully as the country will read it. When a letter of that kind was presented to this administration, no matter what the wish of this administration might have been, no government that was worthy of the name would take a defiance of that kind from the Conservative party.


Horatio Clarence Hocken: Pretty free interpretation.


William Lyon Mackenzie King: I have often
said that I think the powers of the Senate in some, if not many particulars, should be modified. I think the furthest I have ever gone with respect to measures emanating from this House is that if bills had passed this House on three successive occasions, they should become law whether the Senate rejected them or not. But, I have never taken the position that the Senate is not a second chamber in this parliament and has not as such powers co-equal with those of this House with respect to most measures of public importance. With regard to a. measure of this kind which affects all classes in this country, it is of the utmost importance that it should be presented in the form of a bill. Indeed, if this government had denied the Senate the right of discussing this measure, what stronger weapon against any Senate reform would it have been possible to have placed in the hands of those who would like to see the Senate in its powers remain as it is? The people as a whole have certain rights which should be conserved, not only in this House but in the Senate as well. It is only when the Senate by its action repeated over and over again obviously defeats what is the will of the people's representatives in parliament, that the Senate's action in any essential particular should be controlled. '
I wish to repeat the government has brought in this measure in the form that it has so that there would be no room for criticism on the part of hon. members opposite, either as to the method of bringing about this relief, or as to the fairness of the method by which the government has proceeded, or as to the justice of the whole situation before the country. We have taken a course that cannot be criticized in any particular, in the belief that in the Senate there are a sufficient number of hon. gentlemen who will be prepared to view this matter in the light in

which we have viewed it, and who will see that the action which this House takes will also be taken by the upper chamber.


Arthur Meighen: It has always been the practice in each of the two branches of parliament to be scrupulously careful as to attacks on hon. members of the other body. This is essentially the part of fairness. It is essentially the part of dignity.


William Lyon Mackenzie King: I would point out to my right hon. friend that I have not attacked any utterance of Senator Robertson's in the other chamber. I have in my hand a letter which was written to a committee apart from anything which was said in the Senate. I have made no reference to any utterance or debate in the other chamber.


Arthur Meighen: I had not reached the point where the interruption was pertinent. Notwithstanding the fact that the utterance may not have been made in the other body, no matter where it may have been made, this has been the invariable practice of both branches of parliament. It has been so for the very obvious reason that the other party to the controversy is not here to take part in his defence.


George Perry Graham: I would just call the hon. gentteman's attention to this fact: I was attacked, I think it was a year ago, in a most vicious way by name in the upper chamber.


Arthur Meighen: I would be very sorry to see the rules violated, especially as against the Minister of Railways, and still more sorry to see a vicious precedent followed by the Prime Minister. But when the incentive to the attack is a letter read this afternoon by the Prime Minister, I wonder what hon. gentleman would feel himself competent to describe such conduct as that, a letter which was in advance proclaimed to be a declaration that if the government brought forward relief in the form of a bill it would be defeated in the Senate of Canada; and the appeal was made to this House to know what is to be thought of a senator who dares to say what is going to happen to. a measure in the upper house, to appropriate to himself the right to declare what one branch of parliament will do. The letter was read, and it was found to contain not one word, not one syllable, of any such assertion of authority on the part of 'Senator Robertson. Senator Robertson evidently felt, and I know he has always felt, that a money vote of this kind should take its place with money votes of all kinds, and that if it did so take its place

Home Bank
it was an evidence of sincerity behind that vote on the government's part. Whether he is right in that contention or not may be debatable, but that is his view. But to make a personal attack upon him because he expressed it, would seem to me to be something a private member would not be proud of, and that a Prime Minister should lament. That the view is shared by very many in this House, there is no question. That it was expressed by many hon. gentlemen opposite themselves in the debate on the Farmers' Bank there is equally no question-this view for which Senator Robertson is taken to task and denounced to-day in his absence.
There is something to be said for a bill in relation to a measure of this kind, but it cannot be said, merely because it is extraordinary, merely because it is not part of the ordinary routine service of government, year by year, that it should be in a separate bill. The war was not an ordinary part of the routine service of government year by year, but every war vote came down in the estimates, and over these war votes the Senate had no jurisdiction; but nobody in the Senate complained. Votes of money any government has a right to place in the estimates, and there can 'be no complaint from any quarter.
All that we heard from the government in support of this resolution was a speech somewhat eloquent in the matter of vituperation, but exceedingly vacant in the matter of argument for the measure. I have not heard a suggestion of argument behind the resolution from any member of the government save one.


Mr. DUFF:: Does the hon. gentleman state that the war votes all came down in the estimates?


Arthur Meighen: Yes.


William Duff: I remember distinctly the first session I was in parliament, in' 1918, Sir Robert Borden introduced a resolution dealing with an amount of $500,000,000, and that resolution went through in five minutes. That amount was not in the estimates.


Arthur Meighen: There is always a resolution preceding an estimate.


William Duff: No.


Arthur Meighen: Why, of course. The
Supply bill is anteceded by a resolution.


William Duff: This was a special amount.


Arthur Meighen: Was there a bill for it?


William Duff: I do not remember.


Arthur Meighen: Every war vote was in the estimates.


William Duff: I beg your pardon, no.


Arthur Meighen: I recommend the hon.
gentleman to look back and improve his historical knowledge, and I am sure he will not come back here and say I was wrong.
I have heard only one contention put forward; it is first of all submitted by the Acting Minister of Finance, and then by the Prime Minister. They say:	The committee
of parliament reported here, and the report was accepted unanimously, that the depositors had a moral claim in equity. Neither of them will say that he believes the depositors have a moral claim in equity. You cannot pry it out of them. I tried with the acting minister, and failed. But they hold in such a secrosanct position the report of a committee of parliament, adopted on a motion without notice, that they are bound in their duty to the country to come forward with a measure of compensation. When did this great sanctity first appertain to a report of a committee accepted by parliament? The Acting Minister of Finance not more than a week ago had to face a report of a committee accepted by parliament, and he did not bring in a measure to implement it, he brought in a measure distinctly to the contrary, and he supported it in this House. What becomes' now of the only argument he seeks to advance behind1 this resolution? In the other case, not only was there one of these acceptances which this government has loosely permitted to follow one after the other against the protests of some of their own friends, against my protest repeatedly and that of other hon. members- in that case not only was there one of these hasty, loose, and ill-considered acceptances, but a minister of the crown rose and distinctly affirmed the government's adherence to the report with one exception, and the government brought in no measure to implement that report, with that one exception- none whatever. So the government is in the position of presenting now a policy, and declining to give any reason behind the policy at all, any reason that they have ever paid a whit of attention to in other days.
Now I do not think there is any disposition on the part of any member of this House in any section to decline to deal fairly, yes more, to decline to deal generously with those who suffer in Canada from no fault of their own, with those who may be in need. These bank depositors are in that class, a great many of them; from what I can learn, the great body
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of them are, and if a measure could be brought down-I am not going to stand here just because I am in opposition and say it is a simple thing to do it; I know it is a very difficult thing to do it-but if a measure could be brought down to bring something in the way of relief to those who suffered from that scourge, I do not know that there would be anybody in the House inclined to oppose it. But the government has brought in a measure distinctly on the basis of compensation, and you cannot justify compensation in the absence of an established liability. I do not think any government ever introduced or tried to introduce a measure before in the form of a compensation measure to losers in an investment or losers by way of deposits, unless they did claim to support it, and tried to support it, and succeeded in supporting it on the basis of a liability.
The liability may be of two kinds. I am not one of those who say you cannot have a moral claim. My hon. friend from West York (Sir Henry Drayton) is strictly right in saying there is no such thing as a moral claim in equity. But there is a moral claim aside altogether from the legal rules of equity You may have a legal claim on which you can sue and recover in a court of law, but you may have a claim you could not recover at all in a court of law, but which has a moral basis, giving the right of collection. Those have occurred many a time. There may be technical obstacles in the way that would prevent recovery in law, but if the moral claim is there, the liability is there which an honourable man will always meet, and which an honourable government always ought to meet. So I say the responsibility may be one of the two kinds; it cannot be of any other kind.
Now the government say: "These people came to us. It was not relief they were asking; they wanted compensation, and they based their claim on one of two grounds, or both: they said, 'In the first place, assuming that on the complaint of 1916 Sir Thomas White did right in declining to wreck the bank, the reason he was right was because there was a war; we should not suffer from the war; therefore we should be paid. Our other contention is this: Sir Thomas White did wrong, he was guilty of negligence or gross error, error of some kind in his conduct, and if he was guilty of error, we should not suffer, we should be paid'." Now, I am free to say that if the depositors could establish either one of those positions, it matters not which, I would think they were entitled to compensation. I do not agree with the hon. member 
to my left from Glengarry and Stormont (Mr. Kennedy), who says that the taxpayers should not pay for the errors of government. I am afraid that that is the responsibility of taxpayers always. If a government errs, representing the taxpayers, the taxpayers have to suffer. They have recourse against the government, or against the individual perhaps; but I do believe it is best that in the case of an error of government-I do not mean an error in discretion, nor an error in judgment, I mean error amounting to negligence or breach of duty-if certain individuals suffer because of an error which amounts to negligence or breach of duty, then I think the treasury should pay.	[DOT]
Now then, did the depositors establish either position? I wish I could submit myself to a jury composed of the hon. Acting Minister of Finance when I put that question to him. Did they establish either position? The Prime Minister says, "We did not like to decide these two contentions. Here we were asked really to pass on the conduct or misconduct of a political opponent; we would not do it. We submitted it to Mr. Justice McKeown." Before Mr. Justice McKeown the depositors came. Did they establish, first, breach of duty on the part oif Sir Thomas Whre? There is not a member of this House who will rise in his place and say so. Mr. Justice McKeown did not find it; not a line of his report would indicate that anything of the kind was established in his mind; not a line. Did they establish that Sir Thomas White would or should have acted otherwise had there not been a war? Again I appeal to the finding of Mr. Justice McKeown. He finds no such thing. He finds, of course, as anybody would find, that what Sir Thomas White did was doubly justified. Because of the conditions that surrounded him, conditions of war, Mr. Justice McKeown finds in effect that what would have been unwise under ordinary circumstances would have been madness in time of war. But he does not find that if there had been no war at all Sir Thomas White should have dene differently from what he did. If he had so found in the face of the evidence, I would stand here and argue definitely to the contrary, for there was not a whit or ti tle of evidence to support any such finding. I am not called upon to do so; the finding is not there.
Then what happens? Still endeavouring to avoid the responsibility which was on the government from the beginning, still endeavouring to postpone, still in the old course of vacillation, they refer the matter to a committee of this House, and the committee brings in a

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report with those words, whatever they mean, "that there is a moral claim in equity." Then with no notice whatever, someone gets up and moves the adoption of the report, the Speaker says "carried," and the government, without declaring there is any moral claim at all, without setting their seal on the assertion that there is any moral claim whatever, say, "Because of the acceptance of that report we have got to bring in this measure." Is that reason, is that common sense? If the government had early in the day-because they had every reason then to know there was no breach of duty, they had every reason then to know there was no claim in equity whatever, that all that cculd be asked was a compassionate allowance-if the government had come in with a vote for a compasion-ate allowance, that vote would have carried in this parliament with very, very little objection. I should like to think there would have been no objection whatever from any quarter. It is more difficult to make a compassionate allowance now than a year or so ago. A compassionate allowance should be on a generous scale, but it ought to be on the principle of relief, just as in the case of any scourge or havoc that parliament is disposed to relieve. That is the view I take of this measure. I speak in my individual capacity. I frankly say that with these views I am sorry I cannot express the opinions of all hon. members behind me.


Lewis Herbert Martell: Before my right hon.
friend takes his seat,-probably I did not understand him, but is it not a fact that the relief for the Farmers' Bank was introduced by way of a bill?


Arthur Meighen: It was.


Lewis Herbert Martell: I find by Hansard of
June 2, 1914, that Hon. Sir Thomas White moved the second reading of Bill No. 185, for the relief of the depositors of the Farmers' Bank of 'Canada. Probably I misunderstood my right hon. friend.


Arthur Meighen: No, I have not made my criticism, on that ground at all. I say there is a very great difference of opinion on the subject. There is much to be said for a special bill in such a case. That is all. But I would refrain from making a violent personal attack upon one absent because he differs from me on the point. I hope to that extent I will be supported by the hon. member for Hants (Mr. Martell). Now, I had really closed what I had to say. I have spoken for myself. I have reasoned it out as carefully as I can. I know in this regard there are thousands-yes,
I think I may say tens of thousands-of people in this country, some of whom can afford it, some of whom have no claim on the treasury whatever, but many of whom cannot, many of whom have lost the earnings of a lifetime, in the failure of this blank. I think the depositors are in a stronger position than any other class. But I must say this, that, acting on the principle of relief, there are many besides the depositors who are entitled to something. Here is a case where the double liability works a cruel, bitter hardship. Think of eleven hundred farmers in the west-not the poorest, for these have no money to put into bank stock; nevertheless some who had money when they put it in, aside from what they have lost on account of the Home Bank, would have nothing now anyway on account of the character of the years that have intervened-think of those men not only losing all they put up, which represents a portion of their savings, but being called upon now, many of them with nothing left, to put up double liability, and then being called upon by the country to contribute to compensation for perhaps scores of men who are wealthy and do not need it at all. I would myself be very charitable to any measure that aimed at the nearest approximation to relief that you can get. I opened by admitting the difficulty of framing a measure not subject to pretty severe criticism in detail aimed at relieving these people; but I would say that if the government had perhaps associated with the liquidator certain men of proved standing in Canada, and made a grant to those men on certain basic principles, namely, defining where relief should be paid, they could have done just the same as a committee in the case of a great fire or a great deluge, they could have distributed that relief to those who needed it most. It would be more difficult than in the cases I have mentioned, but I do not think it would be impracticable, and I do not know of any other principle on which we can possibly assist these people without establishing a precedent and creating gross injustice that we never in the world afterwards can follow and never defend.	.
Now, there is an amendment before the House. I can understand the position of those hon. members who say, "We are not acquainted with the circumstances of the Farmers' Bank, we were not here when those circumstances were disclosed in parliament, we are not familiar with the claims of the Farmers' Bank depositors, and we do not like therefore to support this amendment." I am not in that position; I know the circumstances of the Farmers' Bank claims. I think, on moral grounds, they
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are in a far stronger position than the Home Bank depositors. In the case of the Farmers' Bank the dispute arose as to the propriety of the issue of the certificate. Here there is no such dispute, so far as I understand the case; there is dispute as to the wisdom of or the discretion used by the minister in issuing it. In the Farmers' Bank case it was established to the satisfaction of the government and to the satisfaction of the commissioner, Chief Justice Meredith, who investigated, that the moneys which under the law should have been deposited before the certificates issued were really not deposited and therefore that the certificate should not have been issued. He did not charge bad faith against the minister, but he did charge that there was a breach of the regulations, a breach of the law as laid down by parliament in the issue of the certificate itself. I do not think that the weakness of the minister's position in issuing the certificate was the real cause of the failure of the bank. I do not think it was the proximate cause of the loss. If it had been, there would have been a legal claim. But still it is true that if the certificate had only issued as it should have issued then those men would not have lost. On that account we thought there was a moral claim against the state and we brought in a bill accordingly. We thought it was a moral claim and that the depositors were therefore put in just the same position as if they had a legal claim', consequently we paid. In this case there is no contention-there is certainly nothing established to bring it home-that there was breach of duty, breach of regulations, breach of law -none whatever. There is nothing to establish negligence; nothing whatever. All that we can urge upon each other in frankness is that because of the disaster thousands who were not responsible were placed in a position of great distress, commanding the sympathy and deserving the relief, if possible, of the parliament of Canada.


John Morrison: The right hon. gentleman (Mr. Meighen) states that he is mot in favour of the depositors being reimbursed on a pro rata basis according to their loses; that their cases should be investigated and paid according to the need. A feiw days ago when we were discussing the problem of the revaluation of the assets of soldier settlers, my right hon. friend took the view that all the soldiers should be paid on a percentage basis.


Arthur Meighen: It was not a case of
relief at all.


John Morrison: Absolutely.


Arthur Meighen: Oh, no.


John Morrison: The right hon. gentleman was willing that even the seven hundred odd who were able to pay up their claims in full in one or two years should be given the same percentage of discount as those others whose property had not been fairly appraised.


Arthur Meighen: The hon. member fails
to see this: in the case of the soldiers there was no scourge, no disaster, no collapse.


John Morrison: There was disaster.


Arthur Meighen: No, no; it was just a
case of whether or not the whole soldier body had laboured under difficulties that were too great by reason of the contingencies of the time, that is all. Certainly all of them should be treated alike. You could not distinguish between the fellow who had worked hard and the fellow who had not.


John Morrison: The right hon. gentleman said he thought most of these valuators were honest men, and I agree with that. But there were occasional ones who were not true to their trust, and they stuck the soldiers unmercifully. These victims had a right to consideration, and my right hon. friend said that they should be treated on the same basis as those who had got a good deal from the government.


Arthur Meighen: The hon. member is on
another subject altogether. There was nothing in that case that hinged on the ill-treatment of the soldier by any settlement board. If there was, every single one should be compensated in full. But that was not the case. It was a question of giving general relief because of the fact that generally or over the whole body they had paid too much for stock or for land, owing to the high prices of the time. That is a very different thing from this.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.


Mr. SUTHERLAND:: Mr. Chairman, when the committee rose at six o'clock the resolution to provide compensation for the depositors of the Home Bank was being considered. There is also an amendment by the hon. member for Glengarry and Stormont (Mr. Kennedy) to include in that resolution compensation for the depositors of the old

Home Bank
defunct Farmers' Bank, on whose behalf a bill had been introduced in parliament in 1914 which at that time passed the House of Commons by a substantial majority but was later defeated in the Senate. Since that time many things have happened, and I think that I am safe in saying that banking in Canada is much better understood by the people to-day than it was then. I believe I am also well within the mark in saying that the functions and lack of responsibility of the Canadian Bankers' Association are also' much better understood. I might also make some further observations with regard to other changes that have taken place. One would be that the term "responsible government" in Canada is more of a misnomer to-day than it U9ed to be. Parliament is now asked to vote $5,450,000 of the people's money to certain preferred creditors of the defunct Home Bank of Canada. It is all very well for people to be generous with what belongs to themselves. It is a very laudable thing to see the spirit of generosity actuating people in their private affairs; but I do not consider that the same can be said of those who are disposing of other peoples property without their consent. And to my mind that is the case in the present instance. I do not think the government have offered sufficient justification for the voting of this money. If it was a matter of granting relief instead of compensation the case would be quite different. I was much impressed by the attitude of the Acting Minister of Finance (Mr. Robb) who refused to admit that the depositors of the Home Bank had even a moral claim, let alone a legal one, for compensation. This being the case I think we should be very careful indeed as to what we are doing under the present circumstances with the resources of this country. I have so expressed myself on several occasions during the present session, and I have urged upon the government the need for the strictest economy and retrenchment in conducting the affairs of Canada. I am sorry to say that there is not any disposition to cut down expenditures, but on the contrary there is the most lavish voting of money regardless of conditions and consequences. I noticed an editorial in the Ottawa Journal of February 19, 1905, which refers to a statement made by a supporter of the government in his own constituency some time previously. The editorial says:
When Mr. "Tim" Healy of Belle River fame told his constituents some weeks ago that Home Bank depositors would be compensated, we said that the statement was sinister. I
I am not going to read the whole of the editorial. It goes on to say:
No more brazen, no more palpable, no more iniquitous election trick has been perpetrated on this country of electioneering afflictions within our memory.
The editorial goes on to point out the injustice of voting money in this particular case, and makes a comparison between two people styled "A" and "B":
"A" and "B" are neighbours. "A" puts his money into the Home Bank. "B" puts his into a factory. A year later "A's" Home Bank collapses, and so does "B's" factory- they both lose. What moral, legal or other right has "A" to come to "B" and say: "You lost and I lost; but I am going to see that you are taxed and made to lose more so that my loss is retrieved".
I think this puts the situation very tersely and exactly as it is. I do not consider there is any more justification or anything like as much justification, for voting this money as there was in several other instances of bank failures which I might mention. I have a very vivid recollection of the debate which took place in this House when the bill to compensate the Farmers' Bank depositors was before parliament in the year 1914. At that time it was very clearly shown, in the case of the Farmers' Bank, that the license or charter was issued under circumstances for which the government were to blame; and it is a most significant thing that the charter for the Home Bank was issued in the same year in which the other was issued but not under anything like as questionable circumstances as in the case of the Farmers' Bank. And in the case of the Farmers' Bank the depositors did not recover anything; they lost the full amount which they had on deposit in that bank at that time. Indeed, many of them were absolutely ruined, and many died as a result of the hardships which had come upon them in their old age through the failure of that bank. Yet in the case of the Farmers' Bank no compensation whatever was granted. In the case of the Home Bank there has 'been quite a substantial surplus saved from the proceeds of the bank; and I think that evidence which has been adduced here this afternoon goes to show that there is some force in the contention that had proper steps been taken by the government and by the Bankers' Association it is quite possible that the Home Bank might not have been forced to go under. I think there is a heavy responsibility upon the government, and also upon the Bankers' Association, for the failure of the Home Bank.
I did not intend to discuss this matter had it not been for the amendment which has been moved by the hon. member for Glengarry and Stormont. To my mind if there is any justification at all for voting the people's money in such cases, the justification
Home Bank

is twice as strong ini connection with the amendment in the case of the [Farmers' Bank depositors as it is in connection with the original motion relating to the Home Bank depositors. I am sorry the government have not given an assurance that some compensation would be given where there were equally strong, if not stronger, grounds for compensation, as it is termed by the present government. I notice the resolution contains these words:
That it is expedient to provide for the payment out of the consolidated revenue fund of the sum of $5,450,000.
This word "expedient" is rather significant. The Prime Minister recommended that the government take action by reason of the report which had been made by the commission which had been appointed to investigate this matter. The commission, as was pointed out by the right hon. leader of the opposition (Mr. Meighen), did not say that there was a legal or a moral claim. Nothing of the kind can be adduced from the report of the commission, but it was a most remarkable statement which the Prime Minister made that if this amendment was tacked on to the resolution it would meet, in all probability the same fate, or the two of them would meet the same fate, in the upper house which the Farmers Bank bill met in 1914. The Prime Minister also made a most remarkable statement with regard to a letter which the acting leader of the Conservative party in the upper house, Senator Robertson, wrote to the chairman of the committee which had been, appointed to look after the interests of the depositors of the Home Bank, and said that he considered the statement contained in this letter to be a distinct threat that if the government undertook to introduce this question by way of a resolution or bill, instead of placing an item in the estimates, the same action would be taken in the Senate. After listening to the statement made, and after carefully following the Prime Minister while he was reading the letter, I could not see that -the letter bore out the statement made by the Prime Minister, and I think that was the opinion of everyone who listened to the reading of the letter. When this view was made evident by hon. members on this side of the House, the Prime Minister became even more emphatic in his statement that in this letter a threat had been madte by the acting leader in the Senate in connection with that matter, and he said: "I think it is a most extraordinary thing that a leader of the Conservative party in the Senate should make the statement to the Home Bank depositors that if any measure came before the Senate with respect to the Home Bank failure, it was

going to be killed in the Senate." I do not think any other hon. member of this House will draw any such deduction from the statements contained in Senator Robertson's letter. It surely shows the desperate straits the government are in when they, at this late stage, after years of pressure having been brought to bear on them to do something, as has 'been pointed out in numerous editorials in the newspapers, right on the verge of an appeal on the country, take action to meet this pressure. I think it is a most unusual course for any government- to take and one which I do not consider reflects any credit upon them. I may say that if it were a matter of relief, it ought to be based upon more substantial grounds than those so far presented as a justification for paying out this money. If this resolution passes, payment will be made to many people who are not in distressed circumstances. Many of them -would not feel their loss very much, if at all.	It is true
there are many cases where people have lost their all, many aged people, and many poor people who have suffered1 greatly in consequence of the failure of this bank. I am sure that if we had had a little more insight into the failure of the Home Bank before the last revision of the Bank Act was passed some changes would have been made to place greater responsibility upon the Bankers' Association in regard to such matters.
The only feature of the motion before the House which meets with my approval is that contained in the amendment which provides a small meed of compensation to those who lost their all through- the failure of the Farmers Bank a number of years ago, and who did not receive one dollar out of the wreck of the bank. No redress has been provided for them, and in this case those who have suffered through the Home Bank failure are to receive a considerable amount, and will in all probability lose about sixty-five cents on the dollar. It is a hardship I admit, and they are entitled to great sympathy, but we are not here to exercise sympathy, we are here to do business for the people, to -protect the resources of this country and not to use those resources for anything except legitimate purposes.
Mr. ST. PERE (Translation): Mr. Chairman, I rise for the second time in the House to plead on behalf of the depositors of the Home Bank. The latter petitioned the Government, last year, in order to obtain assistance and brought to bear the following reasons so as to well establish their request.
Protests were made to the Minister of Finance, in 1916 and 1918, in connection with the

Home Bank
critical state in which the Home Bank found itself at that time. If, as the petitioners contend, an enquiry had been instituted, as provided by section 56A of the Bank Act, the actual situation in which the Home Bank found itself at that time would have certainly been shown, and this institution would have been put in liquidation or merged with another bank. In either case, the depositors would not have lost their money. Moreover, twenty-seven or twenty-eight new branches would not subsequently have been opened, and this would have avoided losses to new depositors. In the report of the royal commission appointed by the present government, the Hon. Chief Justice McKeown states that, if the bank had closed its doors in 1916 or 1918, all of the depositors' money would have been safeguarded.
Sir Thomas White, then Minister of Finance, stated in giving evidence, that he did not dare to place the bank in liquidation, owing to the war and that such a step on his part might have prejudiced the financial stability of Canada. The following are Sir Thomas White's words:
It you make a mistake in putting in an auditor in peace time the consequences may be a run producing little effect upon the bank; if in war time, you may bring down the bank and, in addition, you may cause an unspeakable calamity to the country.
It is evidently this last consideration which prompted the Minister of Finance to act as he did.
The report of the Royal Commission was submitted to the Banking and Commerce committee, at the last session of Parliament, and the committee, in its report to the House, stated that the depositors have a moral right in equity to a compensation.
This report of the committee on Banking and Commerce was unanimously adopted by the House at its last session. Consequently, the Parliament of Canada, in plenary meeting, recognized and decreed that the depositors of the Home Bank have a moral right and claim in equity to relief. It is useless to quibble or evade the question so as to minimize the facts which are all very conclusive. The 60,000 depositors of the Home Bank, who represent about 400,000 people anxiously expect that this unanimous vote of parliament will take the more concrete form of dollars and cents, and they feel more and more confident in regard to promises made by the government.
The failure of the Home Bank is not simply a provincial or civic question which the Dominion government can set aside. It was so to speak a national disaster which affected
60,000	depositors or about 400.000 people
residing between the Atlantic and Pacific coasts, in British Columbia, Alberta, Saskatchewan, Manitoba and in the provinces of Ontario and Quebec. It has cast its shadow over a great number of families that have been ruined; a large number of people, owing to the trust they placed in the stability of the chartered banks of the Dominion, have lost all their savings by depositing them in the Home Bank and a great number of children owing to this fact have been deprived of the means which would have provided for their future. And moreover this failure has been the cause of many deaths and a number of suicides; it is with regret that such things must be referred to.
The Home Bank depositors do not appeal to sympathy or charity to support their claim, but they rely upon the justice of their cause, as it has been clearly shown in the report of the committee on Banking and Commerce presented to parliament, at the last session, and in which it is stated and asserted that they have a moral claim in equity to being reimbursed. The facts of the case speak for themselves. Could the depositors, in fact, ever bring forward a claim which would rest on more solid grounds than the moral law of equity and right? The moral law is at the very basis of all legislation of the British Empire, and is superior to all other forms of jurisprudence. It is, indeed, from the moral standpoint that all laws, provincial or federal obtain ;heir force and sanction. It is claimed that the depositors have no legal right to a reimbursement, and this, because it is a principle of the English law "that the King and his government can do no wrong." Some legislators have contended that to reimburse the depositors of the Home Bank would create a dangerous precedent which would open the door to further claims, if other financial institutions were to have the same fate as the Home Bank. This argument cannot hold, owing to the recent amendments made to the Bank Act. There, however, exists precedents, as governments have come to the assistance of unfortunate depositors, not only in England, but also in Canada. It is but necessary to recall the McGriggor Bank affair, in England, and that of the Upper Canada Bank in our own country, and more recently still, the stand taken by the legislature of the province of Quebec, in guaranteeing the emission of a large amount of debentures in favour of the Hochelaga Bank, to avoid the disaster which the failure of the Banque Nationale might have brought on, in 1924. It is but necessary to consider these recent precedents to admit the fairness of the popular legislation

Home Bank

that the present government is introducing to assist the unfortunate depositors of the Home Bank.
Objection might perhaps be raised that the attitude taken in 1916 and 1918 by the exMinister of Finance Sir Thomas White, places no responsibility on the present ministers of the Mackenzie King government, and that the Liberal government of to-day, cannot be held1 responsible for the blunders committed by the late government. We feel certain that our legislators will consider the claims of the Home Bank depositors with a more open mind and a fairer view of the matter. All governments assume the duties, responsibilities and obligations of the administrations to which they succeed. Their joint liability is in no way put in doubt on such a question.
Equity, it is stated, is law in fhe present case. This moral obligation is, so to speak, the law which must protect the injured rights of the depositors; it further places the hon. members of this House, in the most favourable situation to freely and easily carry out their duty and thus realize, to the (best of their ability, the ideal of the rights of the people. The existence itself of society is inconceivable, notwithstanding the wisdom and strength of its institutions, if it does not show a certain amount of good faith, equity and fortitude. The depositors have always acted in good faith, therefore let us have the courage, to-day, to treat them with equity. Let us not fear to create a precedent, for all legislation, which basis its principles and existence on moral law and equity, becomes, for the country which accepts it, an efficient protection and the indispensable condition of its development.
Therefore, Sir, I shall vote against the amendment and in favour of the resolution.


Mr. CRERAR:: When the resolution was
under discussion this afternoon I was not in the House, and consequently I have been informed only within the past half hour of the discussion that took place then. I do not intend to express an opinion as to the merits or demerits of the resolution which has been introduced into the House by the Acting Minister of Finance (Mr. Robb). It would, I feel, be inappropriate for me to take any part in that discussion because of the relations which, for a number of years, I had with the Home Bank in the capacity of a director. The story of the failure of the Home Bank is fully before the public in the report of the Mc-Keown commission of inquiry a year ago and in the various cases that have been before the courts. I do not know that anything can 
be added by way of information to the committee that is not already in public evidence.
The ex-Minister of Finance, the hon. member for West York, (Sir Henry Drayton), if the information I have received in respect to his remarks this afternoon is accurate, he left the impression very clearly in the minds of the committee that Sir Thomas White, who was Minister of Finance in 1916, had stayed his hand as regards an inquiry into the position of the bank on account of certain representations which I had made to him. In this the hon. member has scarcely done me justice or, perhaps, he has done me a little more than justice, because I am very certain that any statement which I may have made to Sir Thomas White was only a factor, a relatively unimportant factor for that matter, in causing him to reach any decision that he did reach as to the course which he should pursue.
It may not be out of place, since the matter has been brought up-and I think it is only just to myself and to those who have been associated with me that I should deal with it-* to say that the western directors of whom I was one, along with two others in the city of Winnipeg, were an advisory committee in western Canadla to deal with the western business of the Home Bank. Other banks have such committees, and during the whole period from the time that I became a member of the board, I think in 1910, to the end of 1914, I attended only one directors' meeting in Toronto which happened to be on a date when I was in that city. In the latter part of 1914, information reached us-and the particulars of this are set out in my evidence before the McKeown commission-thait things were not as well as they should be in the head office of the bank. We were then into the war. We had been in it for several months. My colleagues and I appreciated our responsibility as directors, and for that purpose we came to Toronto and asked for certain information. It is always a painful and a very difficult thing to speak words that, even by implication may criticize a man who has died and who is not here to defend himself, and I wish to be as careful as I can in any statement I make in that respect. But I am compelled to say that we found things were not as they should have been. We found that the board of directors had not been informed; in fact, I may go further and say that the board of directors had been misinformed by the eastern management. I think that came as a painful surprise to our fellow directors in eastern Canada, men of high business repute in the city of Toronto. What we sought to achieve then was a better management. We were unable to secure that. I do not wish

Home Bank
to criticize my fellow directors at that time in eastern Canada, but we could not get their support then to a change in management which the western directors wished to make, and it was that condition which led us, in view of the circumstance that Canada was in the war and the serious responsibility that rested upon us as directors, to come to the conclusion, under, I may say, the best legal advice we could get at that date, that our clear duty was to lay the facts before the then Minister of Finance. That we did. When that action was taken, the Minister of Finance of the day, Sir Thomas White, took the matter up at once with the officials of the bank, and then and not until then were we able to displace the management which, in our judgment, should have been displaced a year before. I quite appreciate that the representations which we made to the Minister of Finance were of a serious character. We did not take that action-and I am sure Sir Thomas White would be the last one in Canada to say that we had so done it-in any way to make difficulties for him. But when information came before the Minister of Finance, he asked for certain details of the business. On the advice of the western directors, on their suggestion and, I may say, at their urging, Mr.. Z. A. Lash, whose reputation as a business man and as a banker none in this House or outside of it will gainsay, was appointed as counsel for the bank. It was represented by Sir Thomas White that he thought he should send someone from the outside to inquire into the position of the bank. At that time the eastern directors, Mr. Lash and the management of the bank unreservedly and unquestionably took the view that any such action might precipitate a crisis in the bank's affairs. They urged that an examiner could not be sent in from outside to inquire into the business of the bank without that news getting on the street and having its reaction on depositors, and the bank perhaps being forced to close its doors. Now that opinion may have been right or it may have been wrong. I am simply giving the committee what the opinion was at that time, and on the strength of this opinion, and at the request of Mr. Lash, I wrote to Sir Thomas White a letter which I understand my hon. friend from West York quoted this afternoon. In that letter I pointed out that the old management had been displaced, that Mr. Haney in whom Mr. Lash and other eastern directors had a great deal of confidence was going to take more active charge of the 254i
bank's affairs, that Mr. MeHaffie of the Winnipeg office, a trained banker, was coming to Toronto to assist Mr. Haney, and that I felt under the circumstances the information we desired could be secured from within instead of sending in someone from without, and "that at this juncture"-I have not seen that letter for a year, but I am very sure that my hon. friend from West York will find those words in it-"that at this juncture it is better for the inquiry to proceed from within than without."


Henry Lumley Drayton: That is about
correct. The hon. member said:
In my opinion the situation has materially improved within the last month, and at this juncture, with the changes in management recently made, it is better to have the inquiry proceed from within than without.


Thomas Alexander Crerar: That was the view I took. I thought there was a distinct improvement, and I still think so, owing to the fact that we had displaced the old management. Let ine repeat again, where I think my hon. friend from West York has scarcely been just to me is that he left the impression on the minds of the committee, if the information I got is correct, that Sir Thomas White stayed bis hand only because of the representations I had made to him. Now those representations were only a part of the thing, and perhaps a minor part, in what influenced Sir Thomas White in the position he took. I feel this, and I say it now: I feel Sir Thomas White was quite warranted in relying, for instance, upon the opinion of Mr. Z. A. Lash, because Mr. Lash was not only a very able business man but also an able banker.
I understand that some criticism has been levelled against Sir Thomas White this afternoon. If there has been, I wish to dissociate myself entirely from it. I have no reason to think other than that Sir Thomas White acted in what in his judgment was the best interests of the country. It may be there was an error of judgment; I am not prepared even to say that, viewing the circumstances as they were at that time, because the course then taken has to be judged in the light of the facts then existing; it cannot be judged in the light of facts that may have been disclosed seven or eight years later. Consequently I simply wish to say that I dissociate myself entirely from any criticism of Sir Thomas White in that respect.
The whole episode of the failure of the bank was a deplorable thing, but I still think that if a vigorous management had taken hold of the bank at that time, at any rate the tremendous failure and loss that finally resulted would not have taken place. That
Home Bank

was.the judgment of Sir Thomas White then; it was my judgment then, and it is my judgment now, and I care not who in this country knows it.
I do not know that I have anything further to add. It is a regrettable thing that in our political discussions sometimes in this House and often in the country we deal more in personalities than in principles. Such a thing is not elevating to the public life of the country. I am not criticizing the government for the action it has taken. I am neither criticizing nor approving, for the reasons I gave in my opening remarks, but whatever discussion there is in the country or in the House on this matter, I trust may be kept above the level of personalities and the case dealt with entirely on its merits.


William Findlay Maclean: I do not intend to take up much of the time of the House with this discussion, but I do want to give a reason why the government should come to the relief of the depositors in this ibanik. The parliament of Canada has a Bank Act, it has one to-day, and this House and the Senate are responsible for it. We give authority to banks to issue their own notes, which are mere promises to pay-il have some of them in my hand now; I
have just been reading them over-"The..bank
will pay to the bearer on demand one or five or ten dollars," that is all there is to it. This has been going on in this country now for forty or fifty years, and it has been the cause of 70 per cent of the bank failures in Canada It has been the ambition of every small bank that has started in this country to get on its feet and get into the business because of that permission to issue their own notes given by the Bank Act to the banks. We have to stop that, or else these failures will continue They will go on as long as we keep the law where it is to-day and give this right to any private company to take out a charter, go into the banking business and issue its own notes, which are only promises to pay on demand one or five or ten dollars, the first day it opens its doors. No one here has dared to face that issue. The Minister of Finance is no more responsible for it than the previous minister, but the parties in this House are responsible for it, and the lesson to-day is not that we ought to come to the relief so much of the Home Bank in this case, as we ought to come to the relief of the public generally, and get what they have got in the United States.


George Newcombe Gordon: I think the hon.
gentleman is getting somewhat out of order. This resolution deals with the expediency of

reimbursing the depositors of the Home Bank, and there is an amendment thereto respecting the Farmers' Bank. A general discussion of the Bank Act, currency and so forth, is not in order.
Mr. MACLEAN (York) - If you will pardon me, Mr. Chairman, somebody has suggested, and I knew this argument would be made, that there is no reason why the government should come to the relief of the Home Bank depositors. I say they are bound to come to the relief of the depositors of the bank as long as they allow the law to be as it is, giving the banks in this country the right to issue their own notes; and that is the opinion of the country at large to-day, Mr. Chairman. I would like the Acting Minister of Finance to read a review in the Wall Street Journal of last week dealing with the Canadian banking situation and pointing out all these facts, pointing out this enormous right that the banks in Canada have of issuing their own notes. They have not got it in the United States. The United States today is the greatest banking country in the world, and it is great because all the notes in circulation by the banks of the United States are the notes of the United States, backed by the credit of the whole country. That is why they are the leading bankers of the world to-day, that and the national reserve banking system they have in the United States.


George Newcombe Gordon: I must draw the hon. member's attention to the fact that this is a question of the expediency of reimbursing the Home Bank depositors. Inferentially the hon. member may deal with the Bank Act, but he is not entitled to make a speech on the system of banking in different countries of the world.


Arthur Meighen: It is all right if it is a
good speech.


William Findlay Maclean: It is a good speech; and I am the best judge of a good speech. The whole condition of Canada is critical, and if there is one situation more critical than another it is the banking situation. We must cure it, and we will never do so while we hide from ourselves in this House the fact that parliament is responsible for this condition of affairs which has made it necessary for the government to come to the relief of the Home Bank depositors. Under the American system they have what they call member banks in connection with the federal bank, which checks off every bank from time

Home Bank
to time, and if we had 'had that system in effect here the condition of the Home Bank would have been discovered years before and would have been cured. If we continue to say, as we are saying here, "There is no responsibility on parliament to vote this money," I say we are mistaken, I say this parliament is responsible because we created this condition and we must cure it. Therefore I am going to vote for this relief to be granted to the depositors of the Home Bank. I have given reasons why parliament should intervene and do something, not why we should get up here and dig up the records of various parties in connection with the question. We have been side-stepping all afternoon, and the moment I get up and give reasons why parliament should come to the relief of these depositors I am "disciplined" for dealing with the only question at issue. I am leaving the question there with the people, and I am saying to the depositors of the Home Bank, "You ought to be paid because parliament created the banking system that allowed the banks to issue their own notes payable on demand to bearer, instead of creating a better system under which this failure would not have been possible." Now, another issue has come up. Perhaps, Mr. Chairman, you will call m.e to order, but we have been talking a good deal this afternoon about the second chamber. Everybody says that that chamber is the equal of this House, and that we should not speak about it. Yet the Prime Minister has been speaking about it, and he is calling an interprovincial conference to discuss the upper house. I say that so long as it has its present powers that house is our equal. When the people of Canada think-and I believe they do already- that any irresponsible chamber ought not to be continued, but that it should be made responsible by having its membership elected for a definite term, then we shall have a reform of our constitution. The great question in England to-day is the reform of the House of Lords. The great question in Canada to-day is the reform of our constitution. The people think as I do, and will not approve of our attitude that we need not discuss the banking question or the rights of the other house because "there is no reason for doing so." I have discussed these questions on previous occasions, and I think I will have an opportunity of discussing them again. I believe some measures of reform will come. The great reforms that we want are: first, the revision of the Bank Act where I say it is wrong; and, second, reform of the upper chamber so that those who sit there will be responsible to the country, and they will become so when they are elected for a fixed term of office by the people of Canada or b3T the provincial legislatures.
Mr. MoOREA:	It is unfortunate that the
depositors of the Home Bank have lost their money, but they are not the only unfortunate people in this country. Many people have invested their life savings in enterprises more for the purpose of developing the country than of making money, and they have lost their capital. The man who puts his money in a bank does so in order that he may receive a revenue from it without doing any work; but the man who invests his money in industrial and other enterprises very often does so for the purpose of developing the country rather than for the revenue he may make out of it.
This bill which is now before us is an absolutely new departure from anything we have ever attempted in this country. Men have lost their money, as I say, in various enterprises, they have lost their money in banks, they have lost it in other ways, but I have never yet seen the government come to their rescue and make good their losses. I grant everybody would be pleased if there was some way of giving the necessary relief without placing additional burdens on an already very heavily burdened people. I should like every member on both sides of the House to realize the fact that the average bill of taxes on each of our 235 constituencies represents a burden of $10,212,276. Now we are asked, absolutely without any justification as far as my judgment goes, to place a further burden on each constituency of $23,191.50. I would ask every hon. member to think of this before he casts his vote. This further burden may appear light, but nevertheless it is an added burden, and we all know that it was the last straw that broke the camel's back. While I sympathize with the depositors of the Home Bank, I see no reason why they should be entitled to any more consideration than other people who have invested their money, wisely as they thought, and lost it all.
But in my judgment the money feature is not the most serious part of this proposition. It is admitted by everybody whom I have heard express any opinion on the matter, that there is no legal dbligation on the government to reimburse the Home Bank depositors; it is simply a moral obligation. Well, as I understand, a moral obligation is never outlawed. If that be true, then every man who has lost money in bank failures of the last thirty years has just as much reason to come before parliament and ask for reimbursement as the
Home Bank

Home Bank depositors have. If this measure becomes law. I do not understand how this government in the future can refuse to make good any losses that may be sustained by other depositors should any other of our chartered banks fail. In my judgment, the money that will be required to meet this obligation is small compared with the prospective obligations which the government may have to assume at some later date, and therefore I trust and hope that every member, no matter on which side of the House he sits, will think not only of the application of this principle to the present case but also to other cases in the future to which disappointed depositors may claim that it should be made to apply.


Mr. SHAW:: Fortunately we are not called upon in the determination of this question to assess the responsibility for the collapse of the Home Bank. If the courts of the land do not assess that responsibility, then -certainly the judgment of history will duly assess it.
I want to say at the outset that the claim of the depositors of the Home Bank is not based upon negligence. The original claim which they made for reimbursement to the Governor General in Council did not suggest negligence on anybody's part, so far as I recall. It is true that one of the counsel for the Home Bank depositors-perhaps in fairness I should mention his name; Mr. Lee- did in the course of the investigation before Chief Justice McKeown suggest that Sir Thomas White had been guilty of negligence; did suggest also negligence on the part of Mr. Fielding; did suggest also, I think, negligence on the part of the hon. member for West York (Sir Henry Drayton) while he was acting as Minister of Finance. I think these statements were very il'l-advised, and I have the best of authority for suggesting that they were made completely without the authority of the Home Bank Depositors' Association. Not only that, but Chief Justice McKeown, after a very careful investigation, did not find negligence on the part of anyone. More than that, the Banking and Commerce committee's report used these words, indicating that so far as it was concerned there was no suggestion of a finding of negligence:
Your committee is not called upon to question the manner in wh/ich Sir Thomas White made use of the powers given to him, or whether he exercised his discretion correctly or otherwise.
But the claim of the Home Bank depositors has been found by the Banking and Commerce committee to be what was denominated a moral claim in equity. Frankly, an apprecia-	j
tion of the significance of those terms will necessarily present some difficulty. But. there can be no question about this: no one can have a legal claim against the government. No government can be sued without its consent, consequently it is fair to say that the Home Bank depositors would have no legal claim against the government. What claim they might have must be other than a legal claim.


Arthur Meighen: I do not understand the hon. member's reasoning there. Does he say that anybody can have a legal claim against the government?


Joseph Tweed Shaw: Well, so far as the government is concerned it certainly cannot be sued without its own consent.


Arthur Meighen: That has nothing at all
to do with the question of the legality of the claim.


Joseph Tweed Shaw: If the claim is one that cannot be realized upon, then certainly it is c-f no value to the claimant.


Arthur Meighen: If the fiat is granted,
then it is the legality which is tested; the courts decide whether or not the claimant has a legal claim. The question of granting or not granting a fiat has nothing whatever to dc- with the legality of the claim.


Joseph Tweed Shaw: I am suggesting to my right
hon. friend that I am using the term with this significance; unless one gets 9 p.m. the consent of the government to prosecute his claim he is absolutely out of court; under the law he can have no- claim. I am not seeking to justify my words simply by differences which are, perhaps, indefinite distinctions. But I do say, and it is held by the Banking and Commerce committee, that the Home Bank depositors have no legal claim against the government, for reimbursement.
Now, upon what does their claim rest? It seems to me it rests upon two or three very definite particulars. First of all, the attention of the Minister of Finance of the day was called at two different times to the condition of the Home Bank arising out of the situation which then existed. Sir Thomas White did not, feel justified in taking action which but for the war he probably would have taken. I desire to- read, Mr. Chairman, a statement given by Sir Thomas White himself in evidence in this connection. This is taken from page 345 of the evidence:	,
I would never think of putting in a special auditor in a bank and taking chances, especially at a time like that, of closing the bank.

Home Bank
And further he says, page 359:
Under no circumstances would I have allowed a bank to fail during the iperiod in question. I had many difficult and dangerous financial situations to deal with during the war. At its outbreak, in view of the panic which prevailed, the government at my instance placed itself behind the banks of Canada and gave public assurance that it would loan them such sums a3 they might require to meet the conditions of the war, and would take all further steps necessary to safeguard the financial situation during its continuance.
And further:
The action I took was in my discretion; in exercising his discretion, a minister must have regard to conditions, because conditions have a direct bearing upon the consequences attendant on his action to the bank and the general situation. If you make a mistake in putting in an auditor, in peace time the consequences may be a run producing little effect upon the bank; if in war time, you may bring down the bank and, in addition, you may cause an unspeakable calamity to the country.
That is the statement of Sir Thomas White, given in evidence before Chief Justice Mc-Keown. Exercising what seems to me to have been a sound discretion, he decided not to take any action in the premises. Now, that is the situation that existed; that is the reason given by Sir Thomas White for having failed to take action.
One of the questions to which Chief Justice McKeown was requested to answer was as follows:
What effect would an audit under section 56A of the Bank Act, if made in 1915, 1916 and 1918, have had upon the conduct of affairs of the said bank and upon the position of the present depositors?
In answer to this question, he said:
For the reasons above set out, I think an effective audit under section 56A of the Bank Act made in 1916 or 1918, would have resulted, as far as concerns the conduct of the bank's affairs, in either,
(a)	liquidation immediately following such audit, or,
(b)	amalgamation with another bank.
And the effect of such audit upon the position of the present depositors:-
If made in 1916, the present depositors would have suffered no loss.
If made in 1918, I do not think any loss would have fallen upon them.
Taking into consideration the statements of Sir Thomas WThite and the findings of Chief Justice McKeown, it is perfectly clear that but for the war, and if the ordinary action had been taken which might have been expected, the Home Bank depositors would have suffered no loss at all. Owing to the war that action was not taken, and therefore it does seem to me that the Home Bank depositors have laid a basis in equity and in fairness to be compensated to some extent at least by this government.
I notice that it is proposed to pay these depositors thirty-five per cent only of their
claim. If the claim is a proper one; if it is one which should be paid by the government at all, then it seems to me that in logic the only thing is to pay it in full. But in view of the fact that the Home Bank Depositors' Association, representing the thousands of depositors from one end of the country to the other, have indicated their approval of this adjustment, I have no comment, Sir, to make. May I say, however, that I would have preferred if a graduated scale of payments had been used instead of the present proposed method. Such a method it seems to me would not only be preferable, but it would be fairer, it would be juster, and most important of all it would do the greatest possible good to those most deserving. I presume that this matter too has been taken up by the government with the Home Bank Depositors' Association. I do not know, but if it could be worked out-and I think it can be-it would be a far more desirable basis of adjustment to adopt.
I understand that the right hon. leader of the opposition feels that in reimbursing the depositors this parliament is placing an unjust burden upon the shareholders of this defunct bank? They are called upon not only to pay a double liability, but also to pay their share of the taxes levied to make up the reimbursement of the Home Bank depositors. I have been credibly informed, however, that in practically every case the shareholders of this bank are depositors also; consequently the loss will not be as great as it might otherwise appear. More than that the shareholders were represented by counsel at the commission presided over by Mr. Justice McKeown and gave, in effect at least, their approval to reimbursement. I understand they have no objection whatsoever.
There is one other matter that was referred to to which I wish to direct a few remarks. It was suggested that the depositors should get the complete and full benefit of this appropriation. With that I am in full agreement. It was suggested, also, that an arrangement had been made that five per cent of this sum was to be used for the purpose of paying the promoters-shall I say?-of the bill, and that there were legal and other expenses-


James Alexander Robb: I may say right here that
matter was only suggested this afternoon, and if it can be proven we will withdraw the bill.


Joseph Tweed Shaw: I trust that no opportunity
will be afforded the minister to withdraw the bill. I am informed, on what I consider the best of authority-because I made inquiry into the matter myself, it is somewhat disturbing
Home Bank

-that the depositors themselves have raised every dollar that has been expended on their behalf; that they have financed the depositors' committee, that they have financed and proposed to finance in full the legal costs and charges that were incurred on their behalf. So that if the representations made to me are correct, and I have no doubt they are, the depositors will get the benefit of every dollar of the money appropriated by this parliament for the purposes of their reimbursement.


John Warwick King: The Acting
Minister of Finance (Mr. Robb) to-day, following his customary practice, presented this most important matter in a very terse and concise way to the House. He reviewed clearly and distinctly the various Steps that have led up to this resolution. He pointed out that shortly after the failure of the Home Bank, through a process of law, a liquidator was appointed and later on the depositors formed themselves into groups throughout the country

formed what was known- as depositors' committees. These committees, through representatives from individual bodies, finally met in Toronto and there drew up a manifesto which they presented to the government of the day. They claimed at that time that their position as depositors was different from that of depositors of banks that had failed previous to the failure of the Home Bank. They claimed that in the year 1916 and on to 1918, the bank was not in a condition to continue business; that the Minister of Finance of that day was advised of the seriousness of the bank's condition, and that if he had exercised his power he could have directed a special audit of the bank. They did not represent to the government that the Minister of Finance had failed in his duty in not instituting this special audit, but they did represent that in 1916, and on to 1918, the minister did not exercise his power but, in view of the existing situation, allowed the condition that prevailed to go on-that if the audit -had been made the doors of the institution would probably have -closed, and if that had happened there would have been sufficient money to have paid the depositors. That -was the statement made in the representations of the depositors to the government; I am summarizing the circumstances because I do not wish to delay the House.
The government after hearing the representations of the depositors, and they were expressed by skilled counsel, followed the course which governments had usually followed under like circumstances. The Governor in Council appointed a royal commission, and Mr. Justice McKeown was chosen to hold an inquiry and 
bring out the facts and the evidence. That inquiry took place and was carried on over a period of days if not of weeks. Witnesses were examined and Mr. Justice McKeown- I do not believe, as the right hon. leader of the opposition said to-day that the commissioner made a finding-placed the evidence before the government. Then the -government, following the customary and proper procedure, brought the report to parliament by which it was referred to the select standing committee on Banking and Commerce. That committee, in its judgment, referred the matter to a sub-committee originally composed of five members but later on enlarged to seven. That sub-committee was instructed to review the evidence brought out by Mr. Justice McKeown and report back to the general committee. That was the procedure followed up to that date.
The right hon. leader of the opposition this afternoon twitted the Acting Minister of Finance and said that he would not say there was a moral claim, neither would any of the ministers. My right hon. friend, however, forgets that one of the most important committees, of the House-the select standing committee on Banking and Commerce-through its sub-committee did find there was a moral claim in equity. More than that, the general committee adopted the findings of the subcommittee by a large majority. So I do not think we need beat around the bush on the question as to whether there is a moral claim or not. The sub-committee of the Banking and Commerce committee found there was a moral claim in equity. That finding was confirmed by the committee itself, and later by this parliament. Therefore I contend that the resolution before us to-day is founded on the fact that there is a moral claim in- equity. Following that up I will read a short extract from the committee's findings which is to be found in the report of the select standing committee on Banking and Commerce for 1924:
Your committee have sat from time to time, and have studied the interim report on the Home Bank submitted by Mr. Chief Justice McKeown and the evidence therein referred to.
Your committee consider that the facts therein brought out and the evidence therein referred to clearly establish that the depositors of the Home Bank have no claim under the law of the land for compensation by the country on account of any loss they may suffer by reason of the failure of the Home Bank.
But your committee are also of the opinion that, in view of the representations made to the Department of Finance in the years 1916 and 1918, the government of the time could have made in 1916 and in 1918 an effective audit under section 56A of the Bank Act, and if such an effective audit or thorough investigation into the bank's affairs had been made it would have resulted :-

Home Bank
1.	In the immediate liquidation of the bank, or
2. Its amalgamation with another bank, and that the effect would have been, no loss to the depositors in 1916 or 1918.
Your committee have studied the evidence given before the roj'al commission by Sir Thomas White, who was then Minister of Finance, and particularly his statements:	"I would never think of putting in a
special auditor in a bank and taking chances, especially at a time like that, of closing the bank" (page 345);
And further:
"Under no circumstances would I have allowed a bank to fail during the period in question. I had many difficult and dangerous financial situations to deal with during the war. At its outbreak, in view of the panic which prevailed, the government, at my instance, placed itself behind the banks of Canada and gave public assurance that it would loan them such sums as they might require to meet the conditions of the war, and would take all further steps necessary to safeguard the financial situation during its continuance", (page 359).
And further:
"The action I took was in my discretion: in exercising his discretion, a minister must have regards to conditions, because conditions have a direct bearing upon the consequences attendant on his action to the bank and the general situation. If you make a mistake in putting in an auditor, in peace time the consequences may be a run producing little effect upon the bank; if in war time, you may bring down the bank and, in addition, you may cause an unspeakable calamity to the country", (page 743).
Thait was the evidence of iSir Thomas White which they quoted. The report 'continues:
Your committee is not called upon to question the manner in which Sir Thomas White made use of the powers given to him, or wrhether he exercised his discretion correctly or otherwise.
Your committee consider that the facts brought out in the Interim Report submitted by Mr. Chief Justice McKeown, and the evidence therein referred to, establish that the depositors of the Home Bank have a moral claim in equity for compensation by the country on account of any loss they may suffer by reason of the failure of the Home Bank.
I W'iilll not read the concluding paragraph of the report, because it was struck out on a motion by one of the members, 'but the question being put on the main motion for the adoption of the report, it was agreed to in the affirmative, yeas 27 and nays, 11, and the chairman ordered the presentation of the report as agreed to by this committee.
Now, Mr. Chairman, I do not think if one takes into consideration the committee's report, and1 the fialct that this report was adapted by the House, that there can be any question in 'the imind of any 'hon. gentleman in this House that there is a moral claim established here. My right hon. friend the leader of the opposition said that he would agree to a compassionate 'allowance. Personally I do not think this is a case for a compassionate allowance. The claim has been established and payment should be made in a proper way.


Henry Lumley Drayton: Would the minister please give us his interpretation of a moral claim in equity?


John Warwick King: I do not require to give it.


Henry Lumley Drayton: I do not think the minister can, but I would like to hear him try.


John Warwick King: This is a claim made by the depositors, many of whom lost their all in the unfortunate occurrences that took place during the years 1916 to 1918. Without laying any blame at the door of anyone, there were conditions existing in the country that did create moral claims, and many moral claims have been assented to by this government. As far as the constituency I have the honour to represent is concerned,
I know the people resident there. Many of them come from the eastern provinces, from the Maritimes, many of them come from the Old Country, Scotland and Wales and many of them from the continent of Europe. I have had close associations with these -people over a number of years, and they are not the type of people who appeal for compassionate allowances. I have seen them under great trials and tribulations. I was in the city of Fernie following the explosion where one hundred of the husbands and sons of the mining people had been killed in one blast. I have seen them when fire destroyed their homes, practically wiping out the city completely, so that they were required to move out for a period. I have seen them also during the periods of epidemics, when there was sickness in every household and death at their doors. I refer to the epidemic of 1918. I know the fortitude of these people and I know that they accepted the situation on every occasion as something beyond their control, but they met it standing up. When I visited the city of Fernie on New Year's day in 1924 I found a body of men and women of an entirely different mind and disposition from that which they possessed under other trials and tribulations.
I think, Mr. Chairman, that this is one case probably in the history of this country when we can take a different view without establishing a precedent, because I hope in our time and generation we will never have conditions existing in Canada such as we experienced during the war period where it was necessary for ministers, on account of the war and conditions then existing, to do probably what they would not have done under normal conditions. I do not think the amendment
Home Bank


Mr. LANCTOT (Translation):: Mr. Chairman, it would have afforded me much pleasure to have been present in the House this afternoon, so as to listen to the address of the hon. Acting Minister of Finance (Mr. Robb) on the resolution which is now being discussed in committee, and to hear his views on the subject matter. Unfortunately, being absent, I could not glean any information on the subject from those who took part in this debate.
I listened, this evening, to the hon. member for Marquette (Mr. Crerar) who was one of the directors of the Home Bank. He stated, among other things, that if the directors and the Minister of Finance had been able, in 1916, to replace the president of this bank by a more energetic and firm man, perhaps- he says-'that person might have saved said bank from bankruptcy.	.
Later on, it was stated in the House that Sir Thomas White did not wish to take action owing to the war. We have committed so many blunders since 1914; under the plea of war! I did not think that this government or any of its members would dare one day make use of the war as a mantle to cover their deeds! Indeed, I thought that all this ended with the general elections of 1921.

Now, Sir, are we in a position to undertake all this expenditure, such as $5,450,000 and other five millions-it .is always a case of five million dollars? I am wondering where all this will lead us to. I somewhat share the views of my hon. friend from Sherbrooke (Mr. McCrea): Where shall we find the money? Borrow 1
In the past, we had in the county of La-prairie and Napiervdlie, three bank failures; not one, but three: the Ville-M-arte Bank, the Banque du Peuple and the Banque de Saint-Jean. There happened to be in my county, three branches of 'the Banque de Saint-Jean and we received from the liquidator of the latter bank, at the end of two years, thirty cents on the dollar, and from the liquidator of the Ville-Maiie Bank, eleven cents on the dollar. Did the government of that day think of reimbursing us? No.
When the question of the Farmers' Bank was being discussed by the House, in 1913, I had occasion of taking part in the debate, and I well remember what I suggested -then to my good friend Mr. Henderson, who was one of the oldest members of the House: If you will undertake to indemnify the depositors of the three -banks that failed in my part of -the country, I shall support your request ion behalf of the Farmers' Bank. However, let us be fair. If we indemnify the depositors of' one bank that fails, we must indemnify those of all the banks that have failed in the past. My electors who sustained considerable tosses through the failures of -these three banks which I have mentioned are not willing to reimburse the depositors of -the Home Bank. I state that i-t is very unfair and I protest in the strongest- possible way -in the interest of my electors who were the victims -of these three failures.
Is the government -going to be so unfair, Mr. Chairman, -on the eve of going before the people? 1 cannot conceive -it.
We are told that Sir Thomas White -would not take -action at the -time, because it was during the war; but the war ended in 1918, on November 11, through the -armistice. If 'he were sincere, why did he -not take action -after the war? Why did he not call a meeting of this corrupt Board of directors-for when -a bank fails, it is because the management is corrupt? They are thieves, brigands. Why should the country pay for this failure? No, this is not the way to carry on business. I aim -more -than tired of this kind of -thing. If Sir Thomas White was so much in earnest in 1916 and 1918, why was he -not so after the war? He could have Closed -the doors of that institution after November 11, 1918. I would very much like to know what was the -amount

Home Bank
[DOT]of the deposits in the Home Bank in 1918? Why did he allow this bank to carry on its business until 1923? Was it, so that it might further rob the people? Could not the ex-Miinister of Finance t the hon. member for West York (Sir Henry Drayition) have also done something when he succeeded to Sir Thomas White? Could he not 'have then inquired into the state of this institution? Could not the hon. member for Marquette, who was a director of the bank, have brought the matter to the attention of the Minister of Finance, when he himself was a minister in the Borden cabinet? No, they allowed things to run their own way until not a cent was left in the bank. And after it is all over, they come and ask us to indemnify the depositors of the Home Bank. It is Sir Thomas White, the champion of the millionaires, who exempted from taxation the income from $931,000,000 which represents a revenue of $18,400,000, when there are in this country 278,000 people Who t-urn over to the treasury $15,000,000 of income taxes per year. They are the people who .the millionaires will force to reimburse the depositors of the Home Bank. Rest assured, Sir, that it will not be the large interests that will do the reimbursing but those of moderate means.
W it.h reference to the resolution now before the House and the amendment thereto, I beg to move the following subamendment:
That after the words "the Farmers' Bank thereof", there be added the following: "La Banque du Peuple, la Banque ViHle-Marie and la Banque de Saint-Jean."


Henry Lumley Drayton: In the first instance, I wish to. congratulate the hon. member for Marquette (Mr. Crerar) on the statement he made this evening. It was a fair statement and it does not conflict with a single word that I said that I can recollect. My statement was, as I think he learned, occasioned by what I considered to be a most uncalled-for attack upon Sir Thomas White by a former follower of the hon. member for Marquette in connection with an action which Sir Thomas White took, certainly upon the advice and at the request of the hon. member for Marquette, If the hon. member for Marquette will take the trouble to look at Hansard to-morrow, I think he will find that not only did I give him credit for honesty in his representations, but I continued that credit for honesty right down to the end of this whole transaction with the bank, yes, right down to the time when 'he sold his last share. I was pleased to do that as I thought it was right, as I thought it was true. In connection with the claim, the hon. member for West Calgary (Mr. Shaw) has not helped me very much as
to what a moral claim in equity is. From his definition, I take it that it would be any claim against the government, no matter what that claim rested upon, that had not been fortified by a fiat. In other words, a moral claim becomes a legal claim against a government when a fiat has been granted.


Joseph Tweed Shaw: Will the hon. member deny
this principle which has been laid down by one of the highest judges in the Old Country, that there is substantially no difference between a moral claim and a legal claim so far as a government is concerned; that a moral claim necessarily blossoms into a legal claim?


Henry Lumley Drayton: It is a very
poor government that does not look upon any moral responsibility as a legal responsibility once it is shown. One of the things that is troubling me at present is this: Is our appreciation of moral responsibility a dividend of 35 per cent? That is one of the things that is bothering me. If we put it on the basis of moral right, I would like to think that the appreciation this parliament has of a moral obligation is at .least 100 per cent, and that is one of the troubles I have in connection with this matter. It is quite true my hon. friend can find one or two sentences to quote in connection with the war. He can find that in connection with any cross-examination. He will find things here and things there, but if he goes to the argument of Sir Thomas White, if he goes to what he really relied on, what he relied on was the Crerar letter and what was done by the western directors. He was relying upon several things there. He relied, for example, upon the valuation made by my hon. friend from Marquette (Mr. Crerar) and Mr. Haney in connection with one of the worst accounts. He was relying on what he learned from a gentleman whose word, as I said this afternoon, and still say now, he had a right to rely upon, and made no mistake in doing so. That is the real thing.
As bo the legal rights, we are agreed in one sense; there are none at all, but I do think there are special reasons why we should do something for the depositors. I am going to tetll you frankly, Mr. Chairman, I aim in favour of it. I am in favour of something being done for the depositors. I do not like the form of my hon. friends resolution. I do not like the term "current account". I do not know exactly what might not icome under "current account". I would much prefer it covered just depositors, with deposits in open accounts or deposits with notes. I would like to be dear that the only people we are helping are the depositors.
39^4
Home Bank

Something happened the other day which made me think that certainly something ought to be done. I imade the request; and not only myself but it 'came from other quarters during the session of 1924, that the terms of the submission, should be enlarged so as to enable the granting of the charter to be looked into. Of course, the original submission covered the period when Sir Thomas White was Finance Minister. Then we had an enlargement which covered any action during ithe history of the bank from the time of the granting of its charter down, but we never got an amendment which would have enabled us to have looked into the granting of the charter. That was asked for, but we were not able to get it.


William Lyon Mackenzie King: I think that was granted.


Henry Lumley Drayton: No, imy hoe.
friend has never granted it. I had a ray of hope at one time, but perhaps greater caution intervened, or something happened at all events, and we never got it. If imy hon. friend looks at the report he will see that the amendment, instead of covering what I was most anxious to get covered, merely gives the right to investigate the bank's affairs from the time it got its certificate and started to do 'business. Now the reason I was particularly anxious to get that is very plain. The original act of incorporation was in 1903. There was another act, the act of 1904, which was an act extending the time really. The usual thing is that the bank is to take advantage of the provisions of the Bank Act within a year of its incorporation. That was the limit at that time, as I understand it. Well, during the discussion, and there was very little discussion, I am free to say, in connection with the act of 1904, the Minister of Finance at that time pointed out that the request was rather out of the ordinary, and the matter would have to be discussed in 'committee. I 'have been unable to find anything in connection with the oomimittee's discussion, but the time was extended for taking out the certificate for two years, under thie act of 1904. As a matter of fact, the certificate was granted on the 29th of June, 1905. There were, as far as I have been able to find out, serious troubles in the way of the promoters. It was not so much about the matter of incorporation, as it was making an exchange of the assets of the old Home Savings and Loan Company, slow assets, assets o'f a loan company, which ought never to foe made the basis of a bank. They had to arrange to have these taken over by the bank. Hon. gentlemen fnolm the neighbourhood of Toronto will remember that in 1903 we were

recovering from a disastrous real! estate boom which subsequently collapsed, and .my own idea was that it was a very good thing that the Home Savings Company was able to get rid of a good many of their investments which were taken over by the bank. It is significant that the .accounts which have made trouble in connection with the Home Bank were to be found, two of them at least, in those original accounts. What drew imy attention to it most particularly was something I noticed in Toronto in connection with the criminal proceedings. In the Court of Appeal the other day one of the justices of the Court of Appeal asked, when did the Home Bank become insolvent? The learned chief justice of that Court, who besides being a lawyer of repute and a judge of long standing is also an excellent financier, said that it was insolvent the day it opened its doors. Now if there is one thing we ought to look after in connection with banks it is that we start them right, and if the hon. chief justice of Ontario was correctly reported, and if he was right, we certainly are liable. If .there is one time the government ought to look after a bank it is when it starts that bank out. It ought to make sure that it is solvent then at least; it ought to make sure that it commences business in such a way that it will at least have some show of success.


William Lyon Mackenzie King: I have before me a copy of the order in council of the 17th of March, 1924, which enlarges the scope of the commission, one clause of which reads:
The committee of the Privy Council therefore advise that the powers of the commissioner under the said order in council be not limited to the specific years 1915, 1916 and 1918 referred to in the petition of the depositors, but should extend to an investigation of the affairs of the said bank during the whole interval between the issue of the bank's charter and the failure of the said bank, including any representations made to the government of the day, as to its condition, any action taken by way of the Ministers of Finance upon such representations as may have been made, and the effect on tihe position of the depositors of any audit under Section 56A of the Bank Act if made at any time in consequence of such representations.
I thought that went as far as my hon. friend wanted to go.


Henry Lumley Drayton: No, and I brought that up twice in the House since, as my hon. friend will see at page 357 and page 764 of Hansard. What we wanted to find out was how its charter ever came to be granted. We have not' been able to get that, but of course in the criminal proceedings they may have been able to get some evidence in connection with it. At any rate, I observe from the report in connection with the appeals pending

Home Bank
before the Court of Appeals that that question was put by one of the judges, and answered by the chief justice in the terms which I stated-that the bank was insolvent when it opened its doors. If the report is right, and if the learned chief justice is right, then we have every reason to pay something to these depositors.
There is another reason why I think we should pay something to these depositors; I am not going to labour this, because I have already said it on more than one occasion. I admit the whole matter could not have been looked after by taking the stand that we were merely interested onlookers. But my view is that the position of , the Finance Minister was not that of merely an interested onlooker; it was his duty to see that the banks were carried on. I really think that my hon. friend the Acting Minister of Finance made a mistake.
I do not know whether he did himself justice in his evidence at page 575 when he says that while in Montreal seeing Sir Vincent Meredith he made it quite plain to Sir Vincent that he was there merely interested as an onlooker.
I think there is something which everybody affected by the bank's failure has a right to complain of. No Minister of Finance, I submit, Mr. Chairman, discharges his duty by simply being interested as an onlooker when a question so vital and so material to our whole financial policy is at stake. I think on both these grounds I can well support aid to the depositors.
I want to say one thing to my right hon. friend the Prime Minister (Mr. Mackenzie King) in connection with the little incident this afternoon as to the Senate. I have been approached twice by depositors, and I can tell him very frankly that the advice I gave them was to make sure of this relief by having it included in the estimates. My right hon. friend may think that is odd; I do not. He is going straight against what the Senate has done in the past. If he is looking for a precedent, I would remind him that the Liberal Senate said no to the proposal for relief to the Farmers' Bank depositors,-just such a similar proposition as this.


William Lyon Mackenzie King: The grounds
were entirely different in the two cases.


Henry Lumley Drayton: Yes; here you have a nebulous charge against Sir Thomas White; there you had a definite charge of breach of statutory obligations on the part of the Minister of Finance. There is a provision in the Bank Act that so much cash must be put up before a bank can function. Well, what happened in connection with the
Farmers' Bank? No cash was put up, but a note was floated and put back again. The case of the Farmers' Bank depositors was infinitely stronger. I do not want to discuss it. We can find reasons for making nice distinctions here and there in pretty nearly everything, but those are the facts. On that occasion the Senate threw the bill out. My right hon. friend says that he is anxious the Senate should not deal similarly with this measure. I tell him-he may not know it- that his government have done every single thing calculated to make the Senate throw out the bill. I am asked how. Well, it is quite plain. Here is a case of voting money under conditions where there is no room for negligence, no statutory provisions have been offended in the slightest. We have got a law under which it is our business to look after our chartered banks. It is our business to go right into the banks, to know every single thing about each bank, so that we may have knowledge long before the time of failure whether a bank should be allowed to continue business or not. No one that did not require the services of a committee to sit on his sanity would argue that there is not a far greater responsibility for default and negligence where you have the men and the machinery for making sure of these things than where you have not.


William Lyon Mackenzie King: Does my hon friend suggest any reason why the Senate should throw out this bill that would not be equally applicable to this House taking the same course? Are not his reasons for supporting the bill in this House equally as strong for its support in the Senate?
Sir .HENRY DRAYTON: What does my right non. friend think of the action of the Senate in the Farmers' Bank case? He and I do not look at this thing in the same light. I feel that the Home Bank depositors have been wronged, and I want to help them, but I do not approach the subject from the same avenue as my right hon. friend. But he is getting away from the point. I say his government have done everything they can do to get the Senate to throw this bill out. This is the law initiated by his government dealing with the machinery and the duty of those concerned in a case of this kind:
The government shall not incur any liability whatever to any depositor, creditor or shareholder of any bank, or to any other person, for any damages, payment, compensation or indemnity which he may suffer or claim by reason of this section or anything therein contained, or by reason of anything done or omitted to be done under the requirements thereof, or by reason of anything omitted to be done which is hereby required to be done, or by reason of any order or direction of the Governor in Council or of the minister
Home Bank

in the execution or administration of the powers or any of them by this section conferred, or by reason of any failure or omission on the part of the Governor in Council or of the minister or of the inspector, or of any officer or employee of the government to execute or discharge any power, authority or duty thereunder, or otherwise by reason of any default, negligence, mistake, error or omission in the administration or discharge of the powers or duties which in any circumstances are by this section intended or authorized to be executed or performed; and no such payment, damages, compensation or indemnity, nor any claim therefor, shall in any case be authorized, paid or entertained by the government.
Mr. Chairman, it is impossible to thank of a more sweeping provision to guard against every possible happening. It is subsection 16 of the new section 56A which provides for the appointment of an inspector and our extended powers of exploration of banks. In view of the action of his own government, in view of their legislative declaration, I do not think my right horn, friend can very well blame anyone who, to make sure of this aid becoming effective, thinks it should be included in the estimates. He says, "Why should it be put in the estimates?" Well, the other house may want to be consistent. They may say, not understanding the government as well as we do, "Why, only last year at your bidding we adopted a principle under which we can never pay anything to a bank depositor even where we are responsible for the failure of the bank." It does seem to me, Mr. Chairman, that a senator would be giving a depositor very good advice if he told him to make sure that this assistance. was included in the estimates.
Before the bill comes down I hope my hon. friend will give us full information so we can make some calculation- for ourselves. I think we ought to have a complete itemized statement of the winding-up proceedings down to date, giving the amounts realized, the liabilities, the costs of the solicitors, the liquidator's payments in settlement of claims, and so forth, that we tnay have a full appreciation of how the depositors stand. Then I understand that detailed Teports were made by Mr. Edwards, the auditor. I think we should have those tabled so that we may have the fullest particulars. Then I am further given to understand that reports have been made by the liquidator to the government in detail as to various 'matters in connection with the winding-up proceedings that the government is particularly interested in.
I ask my hon. friend to also table those papers, and I suppose he will.


William Duff: During the discussion this
afternoon the leader of the opposition (Mr. Meighen) criticized the government for asking parliament to vote this money in the form of a bill instead of putting the amount in the estimates. I referred the right hon. gentleman to a vote for $500,000,000 passed in this House in 1918, and I asked him if it was not a fact that this money was passed in the form of a bill instead of being placed in the estimates. He did not agree with me, but I was quite sure I was correct. I find that that was the procedure adopted1 at that time. If you will turn to the Votes and Proceedings of April 6, 1918, page 148, you will find that a resolution was introduced commencing with these words:
Resolved, that it is expedient to provide that a sum not exceeding $500,000,000 be granted to His Majesty towards defraying any expenses that may be incurred by or under the authority of the Governor in Council, during the year ending the 31st day of March, 1919.
For a number of specific purposes. That is the exact procedure the government is following in this case. The record shows that the resolution to which I have referred was reported on the same day. I quote from the Votes and Proceedings:
Ordered, that Mr. Redd (GrenvUle), for Sir Robert Borden, have leave to brine in a bill, No. 38, for granting to His Majesty aid for military and naval defence.
He accordingly presented the said bill to the House, and the same was received and read the first time; and ordered to be read a second time at the next sitting of the House.
This bill, No. 38, was the bill founded on the resolution introduced on April 6, 1918 Now, at page 571 of Hansard of 1918' April 10, I find the heading:
War Grant-$500,000,000
Prime Minister gives Details of War Expenditure and Major General Mewburn Explains Military Estimates.
Then it goes on to say:
Right Hon. Sir Robert Borden (Prime Minister) moved the second reading of Bill No. 38, for granting to His Majesty aid for military and naval defence.
He said:	Mr. Speaker, I proposed the second reading of a bill very much the same as this in February, 1917, and I had then great hope that it would never be necessary to propose in this House a vote for war purposes of so large an amount.
And so on. This shows conclusively not only that a bill was introduced for this purpose in 1918, but that Sir Robert Borden, according to his own statement,
10 p.m. had asked for a large sum of money in the form of a bill in 1917. Now, if you turn to the statutes of Canada for 1918, volumes 1 and 2, you will find chapter 45, An Act for Granting to His Majesty Aid for Military and Naval Defence.

Criminal Code
This is the act which was Bill No. 38 to which I referred a moment ago, and it is cited as The War Appropriation Act, 1918. Section 2 says:
From and out of the consolidated revenue fund there may be paid and applied beyond the ordinary grants of parliament a sum not exceeding $500,000,000 towards defraying any expenses that may be incurred by or under the authority of the Governor in Council.
And so on. This shows that I was right in my statement this afternoon and that the leader of the opposition was mistaken when he said that these amounts were usually placed in the estimates, instead of being appropriated in the form of a bill. It will be noticed also that clause 2 says:
There may be paid and applied beyond the ordinary grants of parliament-
So that it has nothing to do with the estimates, consequently this government is following the correct procedure in this case when the Acting Minister of Finance introduces a resolution on which he intends to base a bill.
Amendment (Mr. Lanctot) negatived.
Amendment (Mr. Kennedy, Glengarry and Stormont) negatived; Yeas, 15; Nays, 100.
Motion (Mr. Robb) agreed to:	Yeas,
100; Nays, 20.
Resolution reported, read the second time and concurred in. Mr. Robb thereupon moved for leave to introduce Bill No. 182, for the relief of the depositors of the Home Bank.
Motion agreed to and bill read the first time.



CRIMINAL CODE AMENDMENT

[Stage Direction]
Hon. ERNEST LAPOINTE (Minister of Justice) moved the second reading of Bill No. 147, to amend the Criminal Code.
Motion agreed to, bill read the second time, and the House went into committee thereon, Mr. Gordon in the chair.
Section 1 agreed to.
On section 2-Police magistrate.
Mr. LEADER:: Has there been any explanation of this bill? I have not heard any.


Mr. LAPOINTE:: I am quite willing to
give any explanation as the sections are called. As far as sec*, ion 2 is concerned it is submitted at the request of the Deputy Attorney General of British Columbia. A deputy police magistrate has been appointed for Vancouver,
and it is proposed to give him the same power as the police magistrate.


[Stage Direction]
Section agreed to.
On section 3-Penalty for skipping bail.
Ernest Lapointe: The purpose of the
amendment is to make it an offence for anyone to skip his bail. This has 'been urged specially by the Attorney General of the province of Quebec. It has become a common practice, especially in the city of Montreal, for certain offenders to give bail and then go away.


[Stage Direction]
Section agreed to.
On section 4-Amendment to penalty clause in respect to advertising, printing, posting or selling intelligence on horse racing.
Mr. GOOD:: I should like to ask the
minister if this is exactly the same provision that was passed by the House two years ago and subsequently amended in the Senate?


Ernest Lapointe: It is exactly the provision that was enacted by this House two years ago. It is the amendment which I promised to bring before the House.


[Stage Direction]
Section agreed to.
On section 5-Agricultural fairs granted partial exemption from penalty clauses.
Ernest Lapointe: This amendment has
been suggested by the Department of Agriculture, but I am informed by the minister that he would like some change to be made in this section as drafted. I ask to have the section stand for further consideration.
Section stands.
On section 6-Driving motor car while intoxicated.


Ernest Lapointe: This is merely a clerical correction in the subsection as appears in the code; after the word "term" we add the word "imprisonment."


[Stage Direction]
Section agreed to.
On section 7-Carnally knowing any girl between 14 and 16.
Ernest Lapointe: This section has been enacted in the House many times, but never came back from the Senate. We are trying once more to put it through. The only thing we eliminate is the words "of previously chaste character" after the word "girl."


[Stage Direction]
Section agreed to.
Criminal Code
[Stage Direction]
On section 8-Bailee not producing or delivering any article under lawful seizure by peace or public officer.
Henry Lumley Drayton: What is the
change?


Ernest Lapointe: This amendment has
been suggested by the law authorities of the western provinces. It appears there has been a doubt as to the prosecution of men, especially farmers, who have been appointed bailees of their own grain when under seizure by the sheriff, and who fail to produce the grain at the appointed time. The difficulty is that they are in lawful possession of the grain because they have been appointed by the sheriff to take care of it, but if they have disposed of the grain it is very hard to prosecute them under the law as it stands.


Henry Lumley Drayton: It seems to be as sweeping provision. The House might just as well know what it is doing. This is simply saying that what might well be a matter of accounting becomes a criminal offence and the provision affects a class of people who do not know too much about accounting or about the law,


Ernest Lapointe: I think if my hon. friend will read the section carefully he will see that it is well explained. It says:
347a. Every one who, being a bailee of anything capable of being stolen which is under lawful seizure by a peace officer or public officer in the execution of the duties of his office, and being obliged by law or agreement to produce and deliver the thing bailed to such officer or other person entitled thereto at a certain time and place, or upon demand, commits theft and steals the thing bailed if he does not so produce and deliver it; provided that a person accused under this section shall not be convicted if it be proved that the non-production and non-delivery of the thing bailed is not due to any wilful act or omission on the part of the person accused.


Henry Lumley Drayton: It is just exactly as I say. It is a matter of accounting. The man is supposed to have so many bushels of grain and is left in charge of it. If he finds he is one or two bushels short, under thi3 section he is a criminal.


Ernest Lapointe: If he is the legal custodian of a certain number of bushels of grain, and if he disposes of any of it, it is a matter of theft.


Henry Lumley Drayton: That should be a matter of proof. The responsibility of the crown to prove the conversion disappears altogether. A man is supposed to be guilty unless he can get some evidence to show he is innocent.


Ernest Lapointe: Surely if he has appropriated to his use something which is not his property, it is for him to prove that in some way, on account of something not under his control, it has disappeared. If he takes the grain he is appropriating something which belongs to the court.	.


Mr. GARLAND (Bow River):: May I suggest a difficulty here? Suppose a man has had a crop threshed by a regular thresher and the tally reads 2,000 bushels of grain threshed into the bin. Seizure is made, and the bailiff comes along and the man is left in custody of his grain. When later on the grain is hauled out it is found to be a hundred bushels short. That is the case on many farms in Canada. Are you going to hold a man responsible for short-threshing1? He cannot prove it was short-threshed. All he can prove is that he paid for 2,000 bushels.


Lewis Herbert Martell: When a levy is made
by a sheriff or baillee there is a valuation placed on the goods, and the bailiff simply levies on what he regards as sufficient to meet the amount of debt and costs. If this grain or whatever else it is has been seized, and the man is made the custodian of it, if he converts it to . his own use, or makes away with it so that the bailiff cannot realize on it, of course he is guilty of theft, because it is in the custody of the law and is not his own property. The hon. member for Bow River says. "Suppose it is. estimated at 2,000 bushels, and is found to be 1.900 bushels." Well now, when the sheriff levies he does not levy on all a man's property, but simply on sufficient property to meet the charge against it. Once the levy is made it becomes the property of the crown, and is left in the custody of the owner, to be produced when required. If a person is the custodian for the sheriff, and deals with the goods, when they are in his custody he is guilty of theft. If this were not so the sheriff would place a man in charge of seized goods and the cost of looking after them would be a charge against the defendant in costs.


John Livingstone Brown: My hon. friend has not
caught the point raised by the hon. member for Bow River (Mr. Garland).


Lewis Herbert Martell: That is what I understood him to say.


Mr. STEWART (Leeds):: There is an
answer to the hon. member for Bow River in the last three lines of the section, because he could easily prove that the non-production of the article was not due to any wilful act or omission. .

Criminal Code


Edward Joseph Garland: That is the very thing he cannot prove. He has paid for
2.000	bushels of grain to be threshed, and he believes he has 2,000 bushels, but when the grain is hauled out on order of the bailiff or sheriff and weighed, he finds there a.re only 1,900 bushels. The grain never was there. Who is going to prove it was not there


Hugh Alexander Stewart: The man will get in the box and prove that he produced all the grain that was threshed, all that was in the granary, and all that was stored, and he would immediately be acquitted.


Henry Herbert Stevens: I object to any law which makes a mian a criminal and then places on him the onus of proving his innocence. That is what is done here. I do not care whether it was grain or anything else. It might be grocery stock or anything at all that is commonly the subject of a bailiff's seizure, and under this amendment as I read it ia man is made guilty of a criminal offence until he can prove himself to be innocent of that offence.


Edward Joseph Garland: Hear, hear.


Henry Herbert Stevens: That is contrary to the
principles of British law. I understand that is the procedure followed in France-that a man is supposed to be guilty until he proves himself innocent. A further point the Minister of Justice should consider is this: Is there not too much of a tendency nowadays to change what might be a civil dispute into a criminal offence?


Ernest Lapointe: No.


Henry Herbert Stevens: Still, you are declaring
that a man is guilty unless 'he can prove his innocence. I sympathize with the viewpoint of the hon. member for Bow River (Mr. Garland). Supposing a man was put in charge on his own farm of what is presumed to be
2.000	bushels of grain, that is all under seizure, but when the grain is weighed at the elevator or where it is delivered, it is found to be 100 bushels short. Under this clause the man can be charged with the theft of 100 bushels of grain.
Mr. 'STEWART (Argenteuil):	I am not
keen about this, but it is not that case they are after at all. It is the case of the disappearance of goods while in the hands of the custodian, not the original owner at all. I say frankly that I am not particularly in favour of it.


Henry Herbert Stevens: I do not care who' the
custodian is, if he were an ordinary bailiff, he would be guilty under this.
255	f '! *


Ernest Lapointe: As I have explained,
this clause has been suggested by people who have experience in the west. I aim not tied to it at all. It has been suggested by men accustomed to deal with legal matters in the west, that the absence of such a disposition as this makes the western provinces somewhat of a dishonest debtors' paradise. I thought I was doing something rather in the interest of the west by inserting- this clause. If my hon. friends from the west are opposing it, I am quite ready to drop it.


Edward Joseph Garland: The idea
which the minister has in mind is probably a good one, but I have submitted a difficulty which must be met and which, I think, should be removed as regards this section. I have no objection to the principle which the minister seeks to establish excepting in so far as is pointed out by the hon. member for Vancouver Centre (Mr. Stevens) that it places upon the unfortunate man who may at the moment be the holder of the goods that are seized, the responsiblity of proving that he was not guilty of a disappearance in which he had no part. I object to that principle. As regards protecting the public, I am in accord with the minister.


Lewis Herbert Martell: This is like every other criminal case-the burden of proof is upon the prosecution. If the quantity is supposed to be 2,900 bushels and the attorney general finds that it is only 1,900, the man is charged with theft of or converting to his own use 100 bushels. The burden is upon the crown to show that the man actually had the extra 100 bushels in his possession, and converted them to his own use in some way. I do not see how anybody is going to Ibe hurt. You are not by this clause putting the burden of proof upon the defendant. If the bailiff seized 2,000 bushels of grain and it turns out afterwards that there were only 1,900 bushels, and if the bailiff really believes that the 100 bushels were misappropriated by the person holding them in custody, he can lay a charge and it is incumbent upon the bailiff to prove that the 100 bushels were stolen.


Henry Herbert Stevens: That is the law now,
but this clause goes further than that. This says that the man is guilty of theft and says to him: Prove your innocence.


Lewis Herbert Martell: I have not read the
clause. I have been listening to the argument only. If it is putting the burden of proof upon the defendant, I will vote against
it; but it does not put the burden on the defendant.

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Henry Herbert Stevens: The clause reads:
Everyone who. being a bailee of anything capable of being stolen. . . . commits theft and steals the thing bailee? if he does not so produce and deliver it.
That is the clause. Then there is this proviso:
Provided that a person accused under this section shall not be convicted if it be proved that the nonproduction and non-delivery of the thing bailed is not due to any wilful act or omission on the part of the Garson accused.
But he is accused of the theft and he must prove his innocence. He has the stigma of being prosecuted in the police court as a thief, and the only chance he has to get clear is to make. it evident that 'he did not do the thing wilfully. This is a very serious violation of the well known, principle of British law.


Ernest Lapointe: I would ask that the
clause stand.


Mr. ARCHAMBAULT:: Does section 347
not cover what is meant?
Section stands.
On section 9-Penalty-official destroying security.


Ernest Lapointe: This has the effect merely of striking out the word "public'' before the word "officer" and the word "company". The expression "public officer" as applied to companies is obsolete, and having in view the definition "public officer" in section 2 (29), it would seem that this expression should be modified accordingly. As regards private companies, the Companies Act defines what a private company is as distinct from a public company. It is a company of which the stock is not open to the public, but is divided, say between fifty persons. There is no prospectus and there are some other distinctions of a similar character. There is no reason why an officer of such a company who destroys, alters or falsifies his books, should not be liable to the same penalty as an officer of any other company.


[Stage Direction]
Section agreed to.
On section 10-False prospectus, statement or account by directors or officers.
Ernest Lapointe: Exactly the same amendment is made there by striking out the word "public".


[Stage Direction]
Section agreed to.
On section 11-Use of word "royal" without authority.
Joseph Tweed Shaw: Surely this is extending the law to a remarkable degree.


Andrew Ross McMaster: Is the Minister of Justice going to put in gaol the officers of that highly respectable trust company whose head office is in Montreal and which has branch offices in Toronto, Ottawa and other places because they call themselves the Royal Trust Company?


Ernest Lapointe: If they use the word
"royal" without applying in the proper form to those who will give them permission to use it. This amendment has been suggested and asked for by Rideau Hall for a number of years. My hon. friend .does not like this restriction of the use of the word "royal", but the use of the word by everybody seems objectionable. We have the "royal" this and the "royal" that. We cannot go anywhere in this country without coming across the word "royal".


Edward Joseph Garland: What will the minister do about Royal Household Flour?


Joseph Archambault: May I suggest to the hon. member for Brome (Mr. McMaster) that the company he mentioned a moment ago will not fall under this clause because the last proviso of the clause reads:
Provided that this section shall not apply to any case in which the use of the word "royal" is authorized by or under the provisions of any statute of Canada.
I surmise that the company to which he refers has been authorized to use that word.


Andrew Ross McMaster: As I understand the
matter, the Royal Trust Company got their charter in Quebec, that is under a statute of a province of Canada. I doubt whether that is a statute of Canada. Although I have no desire to see the name "royal" more widely spread than it is now, I think this proposal puts a punishment altogether unfitting for the crime upon the man who has been accustomed to use the word "royal" perhaps more promiscuously than it should be used. It is absurd that people should be branded as criminals because they use the word "royal" which is used more or less to denote excellence. For instance, a man may be looked upon as a royal sort of fellow, meaning that he is of a kingly disposition. I really think that the Minister of Justice would be well advised to-use his ordinary discretion and kindness of heart, and not to ask this House to pass such legislation as this. It seems to me it is going altogether beyond what should be done. It seems to me that if the use of the word "royal" is unpleasant to those who are kings or the representative of kings, that might be

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disseminated quietly throughout the country before it should be made a criminal offence. Why, we have incorporated companies in the different provinces of Canada with the name "royal" appertaining to their title. We have seen all sorts of ordinary articles of everyday use denominated "royal", and to ask us at this time in the world's history to say that that is a crime and that the man shall be liable to be dragged before the criminal courts and fined S200 for this proposed impropriety does seem to me to be going very far, and I trust the minister will not feel it necessary to place faithful followers and strong and affectionate admirers in the position of having to vote against him.


Ernest Lapointe: There are certain
objections to the use of the word "royal" in every way and for all sorts of purposes. I know there is a way to obtain permission to use it. The appeal of-my hon. friend however, is so strong that I would ask that this clause stand for further consideration.


Arthur Meighen: I have no particular
objection to the clause standing, although I do not want it to do so without saying a word in regard to it. I do not know that the section is perfect as it reads, but I have a lot of sympathy with the minister in the object he has in mind here, and I would be sorry to see the section deleted too carelessly by this committee. It may not be altogether popular, but I think there is a great object to be served by maintaining that respect for the Royal family that can only be maintained if the term is restricted, as it ought to be restricted, in this country as in every other part of His Majesty's dominions. I do not say that we ought to restrict the use of the term to cases only where the consent of His Majesty is obtained and the consent of the parliament of Canada obtained. The minister might possibly consider including also the legislature of any province. But surely we do owe it to the word and to the family that everybody be not permitted promiscuously to attach to every piece of soap or tube of tooth paste or any other old thing a term such as +his. We have not got to quite the stage where we must do these things in the name of democracy. I really would like to see the section changed, if it is neessary to change it, to make it appeal to this House, so that there would be no serious objection to it by anybody, and then see the section passed.


Edward Joseph Garland: Like the
right hon. gentleman who has just spoken, I have no objection to this section standing for 255J
some correction, but I disagree entirely with the greater part of his remarks. I think if there is one thing that has endeared the Royal family to the people of this country and other countries, it has been the democratic character of that family and the freedom with which they have permitted the use of the word "royal." I think it would be a serious blow if we are going to separate the family from the rest of the people by a boundary line marked "royal." I feel keenly with the hon. member for Brome (Mr. McMaster) in this matter. I would suggest to the minister, if he is going to proceed as far as the right hon. leader of the opposition would lead him to, we should see to it that the sturgeon does not use the word "royal" in front of his name. That would be just about as ridiculous as to say a company shall not use the word "royal" in their advertisements or for the names of their products. I think the minister has in mind something that possibly does need correction, and that is the use of the term "purveyors to His Majesty" or "the Royal family, by special appointment." Where that is improperly used I think the minister would be justified in providing for the correction of the offender.


Andrew Ross McMaster: Because it is deception.


Edward Joseph Garland: Yes, but in these other eases to prohibit the use of the word "royal" I think is perfectly ridiculous.


James Shaver Woodsworth: The right hon.
leader of the opposition suggests that we ought, to maintain respect for royalty. Does he' think we shall encouarge respect for royalty by fining a man $200 for using this term? It seems ridiculous to suggest that we are going to inculcate respect for royalty by means of fines and imprisonment. Further than that,, it is suggested here that there should be certain exemptions, that companies already authorized by statute to use the word should be exempted. Does that mean then that we are going to leave the Royal Bank standing with a special monopoly of this name, and make the rest of the people liable to a fine of $200 and imprisonment if they use the word? If this passes in this form, every institution ought to be placed exactly on the same basis. Let no institution, the Royal Bank or any other, be allowed any special privilege along this line.


John Livingstone Brown: Before the minister reintroduces this section I hope he will keep in mind the hon. member for Portage la Prairie (Mr. Leader). He is a raiser of live stock, and we know it is quite the custom to call live stock after members of the Royal family and
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members of the aristrocracy. Perhaps it might be well to consider whether that practice should be allowed in the future.


William Charles Good: I want to remind the minister of the difficulty into which he and we all would get if this were carried out. For instance, Royal yeast cakes have been known by that name I think as long as I can remember. The name would have to be changed, and I am afraid that in spite of the change a good many people would persist in asking for Royal yeast cakes.


Hugh Alexander Stewart: That name
would not have to be changed because it is authorized under charter.
Section stands.
On section 12-Breaking school-house, shop, warehouse, office, theatre, factory, railway station, etc., and committing indictable offence.


Mr. CAMPBELL:: Why is it necessary to have a special penalty for theft from the government? Is it a greater crime to steal from the government than from a private individual?


Ernest Lapointe: This is to put government buildings in the same class with ordinary dwelling houses.


Milton Neil Campbell: Are they not so now?


Ernest Lapointe: No. This makes it an offence to break into a school-house, shed, railway station, and so forth, and commit there an indictable offence. These conditions have all been suggested by the prosecuting authorities in the various provinces, and especially by the railway authorities. There was nothing to cover the case of the railway [DOT]shed, freight car, and so forth, and it is certainly just as much burglary to enter these buildings and commit the offence there as it is to break into a private dwelling.


Milton Neil Campbell: Is it not possible we might be carrying this a little too far? The average country school-house is often carelessly left open, and just for a prank a few boys might go in and steal some little thing.


Ernest Lapointe: They are not to commit an indictable offence after they have entered the school-house.


Joseph Tweed Shaw: Why does this include freight
car, passenger coach or other railway car? My recollection is that the Railway Act already covers that.


Ernest Lapointe: No, it does not. This is asked for by the railway authorities.


James Shaver Woodsworth: Is this to apply
simply to the Canadian National railways?


Ernest Lapointe: To all railway companies.


James Shaver Woodsworth: Why should the
railway companies be singled out? They are not public property in that sense.


Ernest Lapointe: It is not a question of public property. It is a question of a dwelling, shed, or any other public building into which a man breaks and commits there an indictable offence.


[Stage Direction]
Section agreed to.
On section 13-Counterfeit stamp.
Arthur Meighen: What is the reason for that?


Ernest Lapointe: The purpose is to make it an offence to have forged revenue stamps in one's possession, The -traffic in revenue stamps has become very extensive, and forged excise labels and so on are being printed in large quantities for use by bootleggers and moonshiners. Under the present law it is necessary to prove that -the .man sells or uses such counterfeit stamps, and in -many -cases it is very difficult to do so.
lMr. GOOD: Suppose a man secures some of these stamps without knowing they are forged?


Ernest Lapointe: Bu-t we say "knowingly".


[Stage Direction]
Section agreed to.
On section 14-Counterfeit -money -and instruments to be sent to Minister of Finance.
[Mr. 'MEIGHEN: How does this enable the Minister of Finance to exercise control? Has section 568A any relation to some other sections, which relation- we must understand to get the whole effect o-f this addition?
-Mr. STEWART (Leeds): Will the -minister read section 568?
Ernest Lapointe: [Sections 550 to 568 deal with offences -of this nature.


Hugh Alexander Stewart: What would be done now with implements of this character on -conviction of the accused?


Arthur Meighen: I think they would be forfeited now.

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'Mr. LAPOINTE: No, section 568 merely refers to punishment and [conviction.


Arthur Meighen: This section does not read to me like a criminal code section, each of which constitutes an offence. This is independent and separate from all others, 'but it does not constitute any offence at all.


Ernest Lapointe: Simply because all the preceding sections constitute the offence. After the man is convicted this section 568A disposes of his .counterfeiting instruments.
Mr. 'MEIGHEN: It does not strike me as being properly done. It frequently occurs in a criminal code section that a certain act is declared to be a crime, and that the person on iconvitotion shall suffer so and so, and it usually adds that his property shall Ibe forfeited; that is declared as a part of the punishment. Here nothing is made an offence at all, but the section goes on to declare that a certain party shall own the goods,-something which is outside our jurisdiction. It is a very peculiar section and I do not like to be too dogmatic about it, but it does not strike me as being right.


Ernest Lapointe: My right hon. friend is quite correct; ibut the preceding sections make it an offence to have such instruments, the penalties are iprovided1 therein, and this section merely provides for the disposition of the counterfeiting instruments.
Mr. -MoM ASTER: Is this not what you might call an administrative provision, just as goods taken under a search warrant are kept under the control of the high constable or some such officer? These goods when seized in the possession of those who should not have had them are sent to 'the Minister of Finance to be destroyed or disposed of. Like the leader of the opposition, I do not want to speak dogmatically about it, for dogmatism is foreign to my nature, but it seems to me there are many provisions of the criminal code dealing with counterfeiting, and this section merely provides for the disposal of the dies which have been used by the counterfeiter.
Mr. MiEIGHEN: Anything that this parliament declares of that character can be declared only by way of punishment. Consequently it must appertain to a certain offence in the code itself. This section of itself 'appertains to no special offence, and consequently I do not think it is within our jurisdiction to pass it.


George Perry Graham: Would not the punishment be in the forfeiture, not in the disposition of the counterfeiting instruments?
iMr. MEIGHEN: Punishment for what?
'Mr. LAPOINTE: Counterfeiting money.
M-r. MIEIGHEN: There is just my point. If this was a sub-section and said that in addition to the punishment hereinbefore provided the counterfeit coin and instruments shall be forfeited and transmitted to the Minister of Finance, very good, that is all right. We know then what it is a punishment for. But there is -nothing to show that it is a punishment for anything. It just stands out here by -itself, and declares that counterfeit money or coin and tokens of value, and instruments or materials of any kind used or intended to be used for the making of counterfeit money or coin or tokens of value, shall belong to His Majesty, while the fact is they belong to somebody else. There is nothing declaring them to be -forfeited. It does n-ot matter to me, but watch for some difficulty and some legal expense if this section passes in its present form-.


Ernest Lapointe: My right hon. friend might be right if there was only one section dealing with counterfeit money, but there are at least ten of them. There is section 553, dealing with buying, selling or trading in counterfeit gold or silver coin; 554, manufacturing or importing copper coin; 555, exportation of counterfeit coin; 556, making or possessing instruments for coinage; 557, conveying instruments for -coinage, and so on until we reach 568, the last section of the chapter; and 568A -applies to all of them. The amendment provides that counterfeit money and instruments used for making it shall belong to His Majesty and. shall be sent forthwith to the Minister of Finance to be disposed of as he may direct.


Andrew Ross McMaster: May I point out that under section 556 it is provided that the mere having in one's possession of any press for coinage or any -cutting machine is in itself a crime.


Arthur Meighen: Perfectly right.


Andrew Ross McMaster: That being so, is it not proper to provide that such illegal things should belong to the minister?


Arthur Meighen: I do not deny that, but the hon. member has not got my point; I think the minister has. It is quite right so to provide, and I do not object to that, but I want it fixed as a punishment to make it infra vires. I suggest that it read, "upon conviction under sections"-listing the sections the minister has named-"the counterfeit money shall" and so on. That is all I want.
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Andrew Ross McMaster: Would not the difficulty be met if some such words were inserted prior to the section?


Ernest Lapointe: I do not know that it would. Suppose a man is arrested and the machinery or instruments are seized, and there is no conviction. Is it not essential that these instruments, the purpose of which is manifestly the manufacture of false money, should be sent to the Minister of Pinance.


Arthur Meighen: That might be important, but I do not think we can take a person's property who is not convicted of any crime and declare that it belongs to us.


Ernest Lapointe: Even if it is apparent that the property can only be used for an illegal purpose, namely, the making of false money?


Arthur Meighen: Very good; if you can show that the accused is convicted.


Ernest Lapointe: Not necessarily. He may prove an alibi or be acquitted by a jury.


Arthur Meighen: We will assume that the property can only be used for an illegal purpose, and it is in my possession. I have been proved innocent; I have no illegal purpose whatever and cannot be convicted of any crime. Does the minister say that
11 p.m. this parliament has power to say that that property shall be taken from me and given to the crown?


Ernest Lapointe: You have no right to have it in your possession.


Arthur Meighen: Then if I have not the right I am convicted under the code.


Ernest Lapointe: Suppose you are not?


Arthur Meighen: In a word, our jurisdiction arises simply because we have power to punish, and it must be a part of the punishment.


John Livingstone Brown: Might it not be the case that the ownership of a property would not be clearly established and the crown would have the right to seize it under any circumstances.


Arthur Meighen: The crown has no right to seize property simply because its ownership is not established.


John Livingstone Brown: Even if it is manifestly used only for illegal purposes?


Joseph Archambault: Even if the crown proved conclusively that the accused was in 
possession of these instruments, he might be acquitted by the jury.


Arthur Meighen: Then you cannot take his property. How can we punish when there is no offence?


Ernest Lapointe: We may not punish the man, but we will take the instruments that he has in his possession for the making of counterfeit money.


Arthur Meighen: Except by way of punishment, we cannot take them.


Joseph Archambault: Does my hon.
friend not think it is in the interests of the country that these instruments should be destroyed in order that nobody else can use them?


Arthur Meighen: I certainly do.


Edward Joseph Garland: The question arises of making it an indictable offence to have in possession instruments for the raising of the value of pieces of paper by impressing upon them something which declares they have a certain purchasing power. Would the minis! er not be willing to include in this section something that would protect the general public from those ~who. to-day can raise or depress the value of the purchasing power which is in common circulation?	,


Ernest Lapointe: I am afraid it is too large a proposition.


Edward Joseph Garland: It is just
as illogical.


Mr. JACOBS:: The king can do no wrong.


Edward Joseph Garland: But these
are the banks, not the kings.


William Charles Good: The point raised by the hon. member for Bow River (Mr. Garland) is a really important one. It cannot be dealt with remedially by this clause, but it is vastly more important and does vastly more damage than even the counterfeiting we now have.
Section agreed to1.
Sections 15 and 16 agreed to.
On section 17-Weapon not a pistol, rifle or shot-gun to be impounded and destroyed.


Edward Joseph Garland: I am just
wondering what the city of Montreal is going to do with all the weapons.


Joseph Archambault: They all come
from the west.

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Joseph Tweed Shaw: Has the minister canvassed
fully the matter of protecting the public from the improper and illegitimate sale and use of fire-arms? I know there are constitutional difficulties, but I suggest that the matter should be gone into very thoroughly and if there is any way of limiting the use or pre-ven: ing the sale of fire-arms except under proper circumstances, I think action should be taken in that direction.


Ernest Lapointe: I will make it my duty to consider the remarks of my hon. friend and if there is anything that can be done I suppose we will consider it next session.


Edward Joseph Garland: The minister might well consider also the fact that wherever any attempt has been made to curtail the purchase or possession of arms by individuals it is usually the unfortunate man who- is a good citizen who is deprived of arms with which to defend himself from the criminal. The criminal rarely has any difficulty in securing them.


Ernest Lapointe: That is one of the considerations that has to be borne in mind when the matter is gone into.


Arthur Meighen: I was speaking to the
Clerk for a minute while section 15 was passed. If the minister explained it I am prepared to wait and look at Hansard. I would like to be clear why the legislation applies only to the province of Quebec.


Ernest Lapointe: Because it is the province of Quebec that has been asking for it. The explanation is set out quite fully on the opposite page of the bill, and I think my right hon. friend will find it convincing.


Arthur Meighen: This does not apply to
the other provinces?	_


Ernest Lapointe: No, it does not.


Hugh Alexander Stewart: Could it not be
enforced by provincial legislation as it is in the province of Ontario? In that province the clerk of the peace or the county attorney must send notification and the jury does not attend.


Ernest Lapointe: I do not see how that
could be because even in criminal matters the procedures are within the federal jurisdiction.


Arthur Meighen: I notice from some of
the extracts read in the House and from newspaper clippings that this army of police who are now guarding the international boundary against the importation into the United States of Canadian citizens are using
what they call sawed-off shot guns. I never heard of that before.


Ernest Lapointe: Are those the American
officers?


Arthur Meighen: Yes. They seem to have invented a new weapon. Would it come under this section?


Samuel William Jacobs: It is proposed that this
weapon shall !be confiscated or turned over to the corporation, where it is shown that the weapon in question does not belong to the criminal who uses it?


Ernest Lapointe: Yes.


Samuel William Jacobs: How can that be done
legally?


Ernest Lapointe: That is done already as
far ;as pistols are concerned. It is merely proposed to add rifles and shot guns to the provision. This change has been suggested by the Deputy Attorney General of Alberta, and perhaps I should read his letter:
Re. Criminal Code, Section 622
Sir:-Might I call your attention to the provisions of the above section, which require that the justice shall impound the weapon in respect of which the person is convicted, and if the weapon is not a pistol shall cause it to be destroyed.
In case the weapon in question is a rifle or shot gun, it seems to be rather unreasonable that the same should be destroyed, and I would suggest that the section should be amended to permit the disposal of the same for public purposes, by the corporation of the municipality, or by the government of the province, as the case may be.
I have the honour to be, Sir,
Your obedient servant,
R. Andrew Smith, Deputy Attorney General.
I really thought there was no reason to make any distinction as between pistol and rifle.


Samuel William Jacobs: Suppose the house of the
Minister of Justice is burglarized, and his pistol is carried away by the criminal and subsequently taken from him'. Surely the rightful owner can go before the court and claiming that his weapon was stolen, secure the return of it.


Andrew Ross McMaster: I would say, Mr. Chairman, that any man who is so careless as to allow his pistol to get into the hands of a person who would burglarize the house of the Minister of Justice deserves to have that pistol stolen.


Edward Joseph Garland: I do not
think the hon. member for Brome is justified in passing so lightly over the case raised by the hon. member for George Etienne Cartier (Mr. 40C6
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Jacobs). I would suggest that it is worthy of consideration at least. Suppose the house of the Minister of Justice is burglarized and the revolver stolen and used in some criminal act. Then the offender is found guilty and the revolver is given to the authorities of the city of Montreal


Ernest Lapointe: It would be destroyed
under the law as it is now.


Samuel William Jacobs: It should not be; that is
confiscation.


Edward Joseph Garland: It should
be turned over to the owner.


Ernest Lapointe: Under the law as it is
in such a case as that submitted by my hon. friend I think I could get my revolver back.
_ Mr. JACOBS:	Not under the act as it
is now.


Ernest Lapointe: This is merely to add
shot guns and rifles to the section, which applies to pistols. Under the section as it is the weapon is destroyed.


Samuel William Jacobs: Does the Minister of Justice think that is justice?


Ernest Lapointe: I would rather see my
weapon in the hands of the corporation than be destroyed.


Samuel William Jacobs: Would not the minister
prefer to have it back in his own possession?


Hugh Alexander Stewart: Would not the
minister on applying to the corporation and proving that it was his property get an order for the return of the weapon?


Samuel William Jacobs: Not at all because the property is now vested in the corporation.


Henry Herbert Stevens: That is the law at.
present.


Ernest Lapointe: Obviously this refers to
the weapon belonging to the accused.


Edward Joseph Garland: It does not say so. Just one question more. Is it not true that there is a section in the code which protects the man from whom the property is stolen? Is it not true that under another section a revolver, or other property, can be restor id o the person from whom it was stolen?


Ernest Lapointe: I think it is.


Samuel William Jacobs: Then this should be struck out.


Ernest Lapointe: This is to cover the case of a revolver belonging to the accused.


Samuel William Jacobs: Then why not say so.


Edward Joseph Garland: The section should be clearer.


[Stage Direction]
Section agreed to.
On section 18-Search in gaming houses.
Ernest Lapointe: The explanation of this change appears on the following page of the bill.


Henry Herbert Stevens: Is not this matter thoroughly covered in the Opium and Narcotic Drug Act?


Ernest Lapointe: Yes, it is covered in the Opium and Narcotic Drug Act.


Andrew Ross McMaster: May I not draw attention, because this is the proper time to do so, to the smallness of the print in which these references and memoranda are printed. I have often in this House urged that hon. gentlemen should speak louder so that they could be heard. I now urge upon the government to have these explanations of bills printed in larger type so that they can be more easily read.


George Newcombe Gordon: To do as my hon.
friend suggests would involve using more space and the columns of type would have to be narrower.


[Stage Direction]
Section agreed to.
On section 19-Proceedings upon warrant, to enforce attendance of prisoners confined in another province.
Samuel William Jacobs: Would the minister explain this change?


Ernest Lapointe: The explanation already appears in the bill. It is as follows:
There is no provision in the Criminal Code for the rial of a criminal charged in one province when the accused is imprisoned in another province. If, for example, a man serving a long sentence in one province were wanted in another for murder, there is no statutory method of enforcing his attendance for trial. The purpose of this amendment is to provide suitable machinery for dealing with such cases.


Arthur Meighen: I think this provision
should be read.


Ernest Lapointe: It reads as follows:
(5) If the person against whom such warrant is issued is then, confined for some other cause in any prison within another province then, upon application to the judge of any superior, county or district court having jurisdiction in the place where the prisoner is confined. and upon production to him of the warrant with an affidavit setting forth the facts, such judge, if satisfied that the ends of justice require it, may, by order in writing addressed to the warden or keeper of such prison, or to the sheriff or other person having the custody of the prisoner, direct him to bring up the body of such person before the justice who is holding

Criminal Code
the preliminary inquiry from day to day as may be necessary for the purposes of such inquiry, and at the place and within the province wherein the warrant was issued, and such warden, keeper, sheriff or other person upon being paid his reasonable charges in that behalf shall obey the order: provided that no such order shall be granted unless notice of the application therefor shall have been served upon the attorney general of the province in which the prisoner is confined within a reasonable time before the making of the application.
This covers certainly what is needed at the present time.


Arthur Meighen: Why would the warden have any charges to make for releasing the prisoner?


Ernest Lapointe: He would have to go himself, or send some other person, with the prisoner.


Arthur Meighen: I thought that duty
would be u,pon the authorities who were getting the prisoner. According to the minister's statement the prisoner will always remain in the custody of the authorities in the place where he is confined.


Ernest Lapointe: Yes.


Arthur Meighen: He never leaves that
custody?


Ernest Lapointe: No, but the warden or
sheriff who has the prisoner under his custody shall request to be paid his reasonable charges before he obeys the order. They will have to be paid by the province which wants the prisoner for trial.


Andrew Ross McMaster: Suppose a man is confined in St. Vincent de Paul and is wanted for an offence committed in Toronto. The Ontario justice will demand his presence. The warden of St. Vincent de Paul will send somebody with him to Toronto, and before handing him over will get his expenses for taking the man from Montreal to Toronto, and I presume get his expenses back again.


Ernest Lapointe: Yes.


Samuel William Jacobs: What becomes of the
prisoner after his trial, say, in Toronto? Will he be held in Toronto or returned to St. Vincent de Paul?


Ernest Lapointe: I presume he will be
kept there to finish his sentence and then go to the other province.


Arthur Meighen: The point raised is an
important one. It would be better for the province that wants him to go for him and get him; so that all the warden would have to do would be to deliver him, and the province would be responsible for his custody from beginning to end. That is a detail. But surely it is of importance to see what is to be done with him in the future. He is handed over to another province to stand his trial. The judge orders that the prisoner be taken to court in another province and there await the result of his trial. Suppose he is sentenced in that other province for a certain period dating from the present time. I do not suppose the judge would sentence him in that way. He would make his sentence run from the date of his release from the sentence he was serving. It seems to me there should be a provision in the code to say that any sentence must date from the time of his release.


Ernest Lapointe: I see the importance
of the point raised by the hon. member for George Etienne Cartier (Mr. Jacobs). I will ask that that section stand for further consideration.


Andrew Ross McMaster: This section seems
merely to apply to the preliminary investigations.
Section stands.
On section 20-Notice of appeal.


Ernest Lapointe: This	amendment is
merely to correct a clerical error.


Joseph Tweed Shaw: I suggest to the minister that there should be no necessity imposed upon a prisoner to apply to a district court judge within the additional twenty days. I think if he were given thirty days within which to serve the respondent and file his notice of appeal it would not be unreasonable. The situation is that the appeal being a statutory remedy, must be strictly complied with, otherwise the appellant is entirely out of court if he fails to serve the respondent as required or to file his appeal within the time limited, ten days, or within the further time the judge may allow him. Why not give him thirty days within which to serve the respondent and file notice of appeal?


Ernest Lapointe: Does	my hon. friend
suggest thirty days instead of twenty days in the third last line?


Joseph Tweed Shaw: No. My idea is simply to
make the suggestion that the service and filing shall be within thirty days of the making of the conviction or the order complained of, and leaving out entirely the application to a judge for an extension with the ten days.


Ernest Lapointe: That would be quite a
* change and I am not prepared to accept it
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without considering its effect on the succeeding and preceding sections.


Joseph Tweed Shaw: The reason for that suggestion is this:	At the present time the appellant must serve respondent and file his notice of appeal within ten days, unless he secures leave from the judge to have an extension for a further period of twenty days. The extended time will readily be granted, by the district judge; but instead of putting him to the expense of making an application to a judge why not give him thirty days within which to serve notice and file the appeal?


Joseph Archambault: The extension is
not always given by the district court judge.


Joseph Tweed Shaw: Some time is generally given.


Joseph Archambault: In order to give the additional twenty days he requires to have some good reason. It would not be proper to grant thirty days without any reason whatever.


[Stage Direction]
Section agreed to.
On section 21-Court may permit new and sufficient recognizances in place of insufficient, defective or invalid recognizances.
Ernest Lapointe: The explanation appears in the bill.


Hugh Alexander Stewart: Would the minister explain the reason for this? Have they not always had that right?


Ernest Lapointe: No. Under the section
as dt stands to-day the appellant must put in recognizances within the time respectively mentioned that he will personally appear before the appellate court on the appeal, or that he will prosecute his appeal without delay as the case may be. If after the expiration of the time limited for entering into such recognizance it be discovered to have been insufficiently entered into, or to be otherwise defective or invalid, no provision exists for the substitution of good 'and sufficient recognizances.


Joseph Archambault: I think that is
fair.


Ernest Lapointe: It is merely to right
what appears to be a wrong.


Hugh Alexander Stewart: In some cases
where an appellant has found his recognizance before trial is imperfect, and has perfected it before the hearing, the judge has held that, as long as the recognizance before him is perfect the appeal is regular and he must hear it.


Ernest Lapointe: Yes.


Hugh Alexander Stewart: If that be the
law at the present time, what is the need of this provision?


Ernest Lapointe: It is not the law at
the present time. At present, the recognizance has to be perfect within the time mentioned in the section, and the judge has no power to order that the recognizance has to be made good according to the law. We give him that power under this section.


Hugh Alexander Stewart: Is it necessary,
as long as the judge finds a valid recognizance when he comes to hear the appeal, to give any permission at all?


Ernest Lapointe: He will not find it valid under the section as it stands.


Hugh Alexander Stewart: He will find it
valid if the appellant substitutes a valid recognizance for an invalid one.


Ernest Lapointe: He has to give a valid
recognizance within a certain time, and if he has not done it the appeal must be dismissed. This is to give him a chance, if something is found to be wrong about his recognizance.


[Stage Direction]
Section agreed to.
On section 22-Trial by jury in certain cases.
Samuel William Jacobs: What is the effect of section 417 of the act?


Ernest Lapointe: This section has been
suggested by the Attorney General of Quebec. Section 417 applies to a disposal of property, and reads:
Every one is guilty of an indictable offence and liable to a fine of eight hundred dollars and to one year's imprisonment who,-
(a)	with intent to defraud his creditors, or any of them, (i) makes, or causes to be made any gift, conveyance, assignment, sale, transfer or delivery of his property; or (ii) removes, conceals or disposes of any of his property; or,
(b)	with the intent that any one shail so defraud his creditors, or any one of them, receives any such property ; or,
Cc) being a trader and indebted to an amount exceeding one thousand dollars, is unable to pay his creditors in full and has not kept books of account as, according to the usual course of trade or business in which he may have been engaged, are necessary to exhibit or explain his transactions, unless he be able to account for his losses to the satisfaction of the court or judge and to show that the absence of such books was not intended to defraud his creditors, but no person shall be prosecuted under the provisions of this paragraph by reason only of his having failed to keep such books of account at a period of more than five years before the date of such inability to pay his creditors.

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Samuel William Jacobs: Those are offences against
the Bankruptcy Act?


Ernest Lapointe: Yes.


Samuel William Jacobs: As I understand the matter, by this clause it is proposed that the attorney general may require that the case be brought before a jury, and it takes away from the accused the option he has of being tried before a judge without a jury.


Ernest Lapointe: Yes. Under the law as it stands, as regards all offences which make an accused liable to imprisonment for five years, the attorney general has that right, and the Attorney General of Quebec suggested that this penalty be increased to five years in order that he might have that authority. But I really believe that the penalty as it is in the section is sufficient, and that we shall gain the same end by making an exception for that offence, giving the attorney general the authority for which he asks.


Samuel William Jacobs: Is it not the tendency these days to have as many cases as possible tried by a judge without a jury because, as is generally known, it is a very expensive business to have trials by juries, and the accused in nine times out of ten elects to be tried by a judge without a jury? Why should he impose the extra cost upon the province?


Joseph Archambault: In the interest of justice it is as well for the accused as for the crown.


Samuel William Jacobs: But the accused ought to be able to elect. He ought to have the option.


Joseph Archambault: The accused has
not that right when the punishment is over five years.


Samuel William Jacobs: But under this new amendment it is proposed that although the punishment is only one year, the right to be tried before a judge without a jury is taken away.


Joseph Archambault: Will my hon. friend accept a change of the punishment from one year to five years?


Ernest Lapointe: That is what was suggested, but I thought the punishment would be too heavy although the offence is a very serious one and it is important to check it.


Joseph Archambault: A penalty of one year is very small.


Samuel William Jacobs: This is not a question of the penalty, but of the manner of trial. The judge who is seized of the case can impose
the same penalty as a judge who sits with a jury. It seems to me that where we can save time and cost by going before a judge without a jury, we should do so and not impose upon the province the extra cost of having a trial by jury.


Ernest Lapointe: I do not think the argument is very strong when it is the province itself that is asking for the opportunity to make the expenditure.


Samuel William Jacobs: The province is not asking for it. It is the attorney general that is asking for it, and the province is going to pay for it. In serious cases where punishment is five years or over, then the attorney general would have the right to declare that the party must come before a jury. But where the penalty is under five years, the common law, if I may so term it, declares that the accused may elect, and by this amendment the attorney general can step in and take away from the accused the option so that he has to be tried by his peers if they can be found.


Joseph Archambault: Has my hon.
friend read section 417?


Samuel William Jacobs: No.


Hugh Alexander Stewart: Does this not
look like a step towards restricting the liberty of the subject? Under the law as it is at present, he has his choice. Why should he not have his choice? Why should the attorney general in any case, even as regards offences liable to a five-year penalty, have the right to insist that the accused must be tried by a jury? If that right exists at the present time, why should it be extended to this class of cases? Who is asking for it?


Ernest Lapointe: The Attorney General of Quebec, on account of the multiplicity of those cases during recent years. It is felt that the offence is so frequent and serious that the prosecuting authorities should have the right to have the trial before the high judge. As regards the restriction of the liberty of the subject, that is what we are doing all the time under the Criminal Code. When the offence is liable to a penalty of five years' imprisonment, the attorney general has that right. He will have that right for these offences under section 417 owing to their character and seriousness. I do not think this is unduly limiting the liberty of the criminal.


Samuel William Jacobs: The accused. There is a difference.
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Hugh Alexander Stewart: I gather from what the minister says that this offence is very common and is probably growing in frequency. Does he think it is more likely that a conviction will be secured from a jury than from a judge? Cannot these cases be as well tried by a judge as by a jury?


Ernest Lapointe: Maybe, but my hon.
friend will understand that those are questions of procedure to a large extent. The experience of the prosecuting authorities in the various provinces must be heard and considered when amendments are being made to the Criminal Code. That is what I have done as regards various amendments which are included in this bill. They are based upon the practical experience of prosecutors, those who are responsible for the administration of criminal justice in the various provinces.


Hugh Alexander Stewart: I understand that this recommendation comes only from one province. How is it that the experience in that province differs from the experience in others?


Ernest Lapointe: I do not think any other province would object to it.


Henry Herbert Stevens: I want to protest not on behalf of the prosecuting attorney, but on behalf of the common people, ordinary individuals who are unfortunate enough to become bankrupt, that they should not be deprived of the right of election whether they should be tried by a jury or a judge. I apply to this the same argument as I applied to a clause earlier in the bill. It is a well known and ancient right that an individual can go before a court and elect how he shall be tried. I submit to the Minister of Justice that he should not look too much to the convenience of prosecuting attorneys. I have a great deal of sympathy for the difficulties which they must experience in conducting trials, but nevertheless the rights of individuals who are accused must be considered. I would ask the minister to drop this clause.


Joseph Archambault: The general principle was adopted in 1909 regarding the option of the attorney general to have a trial before a jury.


Henry Herbert Stevens: My hon. friend is not enlightening me one particle in that regard, but it does not apply to the bankruptcy law which is more or less a civil law.


Joseph Archambault: Not in this case.


Henry Herbert Stevens: I quite appreciate that
woven all through the Bankruptcy Act there may be criminal offences or offences that may be classified as criminal, but the bankruptcy law is, in its general operation, a civil law.


Joseph Archambault: I am glad to have this admission from my hon. friend because, when there was a question' of bringing up the bankruptcy law in this House, I objected to it because I said that it was a civil law'. My hon. friend now says that it is a civil law. At the time the Solicitor General who put the bill through said that it was not a civil law; that it was within the province of the federal authorities.


Henry Herbert Stevens: I say that in its essence
it deals with civil more than with criminal matters.


Joseph Archambault: But there may be offences of a criminal nature.


Henry Herbert Stevens: Undoubtedly.


Joseph Archambault: There are quite a number of these cases in Quebec and in other provinces and they are very serious.


Henry Herbert Stevens: Why cannot a judge take a case as well as a jury?


Joseph Archambault: In my opinion the punishment should be extended to five years.


Henry Herbert Stevens: You are not dealing with punishment. You are taking away from the man the right he has to say whether he shall be tried by judge or jury.


Arthur Meighen: Can the minister give us any explanation of why these bankruptcy cases are getting so much more frequent?


Ernest Lapointe: I do not know, but what I will do is to ask that the clause stand, and I will communicate with the provincial authorities wrho have applied for this, and ask if they have other arguments.
Section stands.	.
On section 23-Prosecuting officer prefers charge.


Samuel William Jacobs: Will the minister explain
this?


Ernest Lapointe: My hon. friend will see the explanation in the margin. It is to enable any charge founded on the facts or evidence disclosed in the depositions to be preferred when the accused is tried before a judge as well as when he is tried before a jury. Under

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the law as it is, this change can be made only on a jury trial. This has been suggested by the province of Alberta. My hon. friend from West Calgary (Mr. Shaw) has communicated to the department several letters from lawyers in his province suggesting this change..


Arthur Meighen: The minister says that heretofore the indictment could be cured in jury cases, but not in cases that did not come within the purview of a jury?


Ernest Lapointe: Exactly.


Arthur Meighen: That is since my time.


Samuel William Jacobs: Is it not a fact that when the judge sits in speedy trial courts he sits as judge and jury?


Ernest Lapointe: That is the purpose of the amendment. The present amendment will make the practice under section 827 where the prisoner is tried by a judge without a jury similar to that which is provided by section 872 in cases of trial by jury.


Arthur Meighen: That explanation is not here.


Ernest Lapointe: This is necessary, because it has been found in Alberta that it has been denied by the judge.


Joseph Tweed Shaw: The minister is right. Section 872 of the code provides that on the trial by indictment the officer prosecuting has a right to lay not only the charge upon which the accused has been committed, but also any other charges which the deposition may warrant. Now under the speedy trial section of the code he is not in a position to do that. He is not in a position to lay any charge other than that for which the accused was committed. This gives power to the prosecuting officer to lay any charges disclosed by the deposition.


[Stage Direction]
Section agreed to.
On section 24-Amendment of defective indictment.
Ernest Lapointe: This explains itself. It is a section which is in the Imperial Act, 1915. Its purpose is to prevent any miscarriage of justice which might occur owing to the defective nature of the indictment as originally presented and the failure of the prosecuting authorities to apply for the necessary amendment. This gives to the court before trial or at any stage of a trial, when it appears the indictment is defective, power to make such order for the amendment of the indictment, as the court thinks necessary to meet the circumstances of the case, unless, having regard to the merits of the case, the required amendments cannot be made without injustice, and the court may make such order as to the payment of any costs incurred owing to the necessity for amendment as the court thinks fit.


Samuel William Jacobs: I always thought that was the law.


Ernest Lapointe: No, it is not.


[Stage Direction]
Section agreed to.
On section 25-Juries in Quebec.
Samuel William Jacobs: This is somewhat important. Perhaps the minister would explain.


Ernest Lapointe: The present section 923 reads as follows:
In those districts in the province of Quebec in which the sheriff is required by law to return a panel of petit jurors composed, one-half of persons speaking the English language, and one-half of persons speaking the French language, he shall in his return specify separately those jurors whom he returns as speaking the English language, and those whom he returns as speaking the French language, respectively; and the names of the jurors so summoned shall be called alternately from such lists.
This new section provides that, in any district, the prisoner may upon arraignment move that he be tried by a jury entirely composed of persons speaking the English language, or entirely composed of jurors speaking the French language, and that upon such motion the judge may order the sheriff to summon a sufficient panel of jurors speaking the English or the French language, unless in his discretion it appears that the ends of justice are better served by impaneling a mixed jury. This is suggested and asked for by the provincial authorities at Quebec.


Samuel William Jacobs: Is not that the practice
now?


Ernest Lapointe: It is the practice, but
now we have to arrange it while the trial is going on. Now it will be the law.


[Stage Direction]
Section agreed to.
On section 26-Evidence of disorderly house.
Ernest Lapointe: The same applies here
as to the other section I mentioned. This amendment should have been passed in 1923. It is covered by the Opium and Narcotic Drug Act.


Hugh Alexander Stewart: Do I understand the minister to say that similar provisions to this are to be found in the Narcotic Drug Act?
Criminal Code


Ernest Lapointe: Yes, and all these sections in the Criminal Code were repealed except this one and the other I referred to.


[Stage Direction]
Section agreed to.
On section 27-Evidence may be taken out of Canada under commission.
Samuel William Jacobs: What is Part XVI of the
act referred to in the amendment?


Ernest Lapointe: Part XVI refers to summary conviction, and Part XVIII to speedy trials on indictable offences. This is to give to the magistrate the right to appoint a commission instead of going to the Superior Court judge to do it.


Hugh Alexander Stewart: Would the minister say whether this contemplates the appointment of a commissioner in a foreign country or a commissioner here to go and take evidence in tihe foreign country?


Ernest Lapointe: A commissioner in the
foreign country.


[Stage Direction]
Section agreed to.
On section 28-Corroboration necessary in certain cases.
Ernest Lapointe: This amendment should
have been made before when the act was amended. It is to require corroboration for offences against girls under fourteen.


Joseph Tweed Shaw: I would ask the minister if
there are any other crimes to which that corroboration section has been extended.


Ernest Lapointe: No, I think they are all mentioned in the section.


Joseph Archambault: Section 301.


Ernest Lapointe: They are treason, perjury, offences under Part V, sections 211 to 220 inclusive, offences under Part VI, sections 301 and 309, and forgery.


Hugh Alexander Stewart: Which ones of
these are new?


Ernest Lapointe: Only section 301.


Hugh Alexander Stewart: What is that?
Mr .LAPOINTE:	Section 301 is carnally
knowing a girl under sixteen-


Joseph Archambault: Under fourteen, I think.


Ernest Lapointe: One of the two sections
refers to girls under 14, and the other to girls under 16. This will require corroboration in all these offences. In other words nobody will be convicted on the uncorroborated evidence of the girls.
[Mr. H. A. Stewart.1


Hugh Alexander Stewart: And over sixteen years of age there is a special provision already that if the judge is of opinion that the accused is not altogether to blame the jury may acquit him.


Ernest Lapointe: Yes.


[Stage Direction]
Section agreed to.
On section 29-Attorney General to have right of appeal where question of law alone involved.
Ernest Lapointe: When amendments were made to the criminal code two years ago giving the right of appeal in criminal cases to the accused through a mistake that right was taken away from the crown.


Mr. SPEAKMAN:: Has the minister given further consideration to the question of procedure in the case of appeal by a convicted criminal? The question came up in connection with the Hanson case on which I had some conversation with the minister, and he assured me that it would be considered very carefully in conjunction With the general amendments to the criminal code to be brought down this session. It is still a matter of a good deal of interest in my part of the country.


Ernest Lapointe: I am aware of the case
to which my hon. friend alludes, and I remember also that the population in that district, which is in my hon. friend's constituency, was quite aroused as the result of the judgment of the appeal court.


Joseph Archambault: Why?


Ernest Lapointe: The verdict was changed by the majority of the court, and the sentence was reduced to five years in jail.


Joseph Archambault: Were they not
satisfied with that?


Ernest Lapointe: The population was not
satisfied, and my hen. friend even now is not satisfied with what happened at that time. There are many who are not favourable to the system of appeal in criminal cases. It was introduced for the first time two years ago by a bill which passed the Senate and subsequently was accepted by this House. The Senate was slrongly in favour of the new law, and whatever may be our own opinion, I think it would be difficult to repeal the amendment until experience shows that it does not work in the public interest. I admit that the case referred to was an extraordinary one, but we have no recourse whatever under the law as long as this right of appeal is permitted.



S, 1925

[Stage Direction]
Criminal Code
Alfred Speakman: The minister is hardly correct in implying that I am in favour of the repeal of that amendment.


Ernest Lapointe: No.


Alfred Speakman: I am not suggesting that the judgment of the appeal court was unsound. I was not sufficiently conversant with the circumstances to form such an opinion, although that opinion was formed in the district in which the trial took place. There was some question of the manner of taking new evidence.


Ernest Lapointe: Was new evidence
brought before the appeal court?


Alfred Speakman: No.	Objection was
taken to the acceptance of a statement by counsel for the appellant that there was new evidence without such new evidence being brought forward. The objection was rather to the procedure involved in the trial than to the amendment itself. I think the minister agreed with me at the time, although of course he could not commit himself to what would be done, that some restriction might be placed upon the appeal court in regard to the manner of accepting new evidence, or whether a new tiral of such cases should not be ordered instead of the trial judgment being reversed. I understand that the minister discussed the point with various judges as to whether some procedure might be laid down under which such appeals would be heard, and I was wondering whether he had come to any conclusion with respect to it.


Ernest Lapointe: My hon. friend may be
assured that we will further consider what he has said.


Joseph Tweed Shaw: I recall the particular case
to which the hon. member for Red Deer (Mr. Speakman) refers. Counsel for appellant, undoubtedly one of the most distinguished counsel of Alberta, made some statement before the appeal court, and quite properly the court accepted his statement. I think under the circumstances they were perfectly justified1 in doing so.


Hugh Alexander Stewart: Do I understand the Minister of Justice to say that under the amendments of two years ago the crown have no right of appeal on the facts?


Ernest Lapointe: Yes.


Hugh Alexander Stewart: I thought the
right was wide open.


[Stage Direction]
Section agreed to.
On section 30-Seduction.
Ernest Lapointe: This is merely an amendment for the purpose of bringing the language of paragraph 5 into line with section 211.


[Stage Direction]
Section agreed to.
Section 31 agreed to.
Joseph Archambault: What sections are standing?


George Newcombe Gordon: Sections 5, 8, 11, 19
22.


Ernest Lapointe: I have three amendments to offer, Mr. Chairman, the first two of which will follow section 8. The first will be as follows:
347B. Every one is guilty of an indictable offence and liable to a penalty not exceeding four thousand dollars and not less than five hundred dollars or to imprisonment for three y.ars who renders a false or deceptive return with respect to the sale or other disposition of any goods, unless it be proved that there was no intent to deceive.
2. Every one is guilty of an indictable offence and liable to a penalty not exceeding four thousand dollars and not less than five hundred dollars or to imprisonment for three years who, being a director, shareholder, manager, officer or employee of any person who renders a false or deceptive return with respect to the sale or other disposition of any goods knowingly makes, permits, concurs in or condones the rendering of the said false or deceptive return.
This amendment is suggested by the Labour department and is the result of the investigation into an alleged combine which recently took place. It appears that companies acting as brokers for certain growers of fruit or other commodities sell these commodities at a certain . price, furnish invoices for smaller amounts and pocket the difference. It is a theft, but it could not be reached under the law as it is. The Minister of Labour (Mr. Murdock) may be able to give some instances in that regard.


Mr. MURDOCH:: In the report of the investigation that was made into an alleged combine in the distribution of fruit and vegetables in British Columbia and the western provinces will be found a number of illustrations of what is in mind. The most glaring instance, probably, is mentioned on page 29. The Mayne Island Nurseries forwarded to the Mutual brokers at Vancouver 65 crates of tomatoes, classified as 51 crates No. 1, 10 crates No. 2 and 4 crates No. 3. These were sold by Mutual brokers in Vancouver for these growers over on Vancouver island. They w'ere sold at the following prices: No. 1, $4.50; No. 2, $4; No. 3, $3. When a return W'as made to the growers it was stated that the No. 1 tomatoes had been sold at $3, the No. 2 at $2.25 and the No. 3 at 75 cents.
Criminal Code

These brokers charged the usual commission on the sale, at the rate of 5 per cent, making $8.92 for the 65 crates.


Henry Herbert Stevens: Is that not covered now in the Criminal Code?


James Murdock: The Minister of Justice should answer that; I am told not. Perhaps I had better complete this statement. The commission charged was S8.92. The freight was $5.88 and the Hot House association's charge was 65 cents, a total of $15.45. In short, in addition to that $15.45 the brokers took $103 on 65 crates of tomatoes. Had that been done in the same town or within the same community it could have been regarded as theft, 'but here were these growers 12 m. of tomatoes over on Vancouver island shipping to brokers in Vancouver and expecting the broker to make a proper sale and a- proper return. We have in our possession the original invoices showing exactly what happened. In this case $103 was improperly retained by the brokers. Theft, I call it, but I am told that the Criminal Code makes no provision for such a case. Some law should.


Hugh Alexander Stewart: It 'looks like a
clear case of theft, and the Criminal Code should be wide enough to cover it.


Ernest Lapointe: The trouble is that it
is usually done by companies, not by a single individual. The code as it stands does not cover companies in such a case.


James Murdock: The young lady who
made out the return admitted that the figures were hers but did not know how she came to put them in that way. She had not benefited to the extent of one cent. The brokerage company had got the $103 in cash. That is only one striking illustration among many.


Milton Neil Campbell: But will this completely obviate the difficulty? By the amendment you provide that where a company instead of an individual commits the offence it may be dealt with. Are you not liable even under this amendment, therefore, to have the same difficulty?


Ernest Lapointe: No; this amendment will cover the companies. It is drawn specially for that purpose.	_


Milton Neil Campbell: Will that mean every
officer of the company?


Ernest Lapointe: Every officer who has
anything to do with the sending of the false return.


George Newcombe Gordon: Shall this amendment
carry? Carried.


Ernest Lapointe: I have another amendment


Arthur Meighen: I thought that section
was to stand over?


George Newcombe Gordon: The important section
is standing over.


Arthur Meighen: We should not carry the amendment; it should be recorded by way of notice. I understand the minister was only asking to give notice of the amendments. You cannot let the section stand and pass the amendment.


Ernest Lapointe: It is independent of the
section.


Arthur Meighen: If the section does not
pass everything will be wrong.


Ernest Lapointe: It is another section.


Arthur Meighen: I understood it was an
amendment to section 8.


Ernest Lapointe: No, it is a new section
that will come in between 8 and 9. Section 9 will become section 11, because I have two sections to insert there.


Arthur Meighen: Would the minister not
be better advised to file all his amendments, and then when we resume consideration of the sections that stand we can put them all through?


Ernest Lapointe: I have no special objection to that.


Arthur Meighen: There should be notice.


Ernest Lapointe: The other day the Minister of Railways and Canals had a bill making it an offence to transport liquor under false billing, and so forth. My right hon. friend suggested that this should be done by an amendment to the Criminal Code, because it would not apply to railways not under the railway commission. He was quite right in that. I am therefore moving as an amendment to this bill what was in the bill of the Minister of Railways and Canals. It is proposed to amend the bill by adding thereto the following section:
The said act is amended by adding to section 412 thereof the following subsection:
"(2) Every one who by himself, his servant, agent or employee-
(a) By means of false or misleading billing, classification or labelling, or any other false or misleading representation or statement of the contents of any car, vessel, package or consignment, or by concealment, or failure to properly bill or disclose the entire contents of any such car, vessel, package or consignment, or by giving, furnishing or using any false address or by any other means or device, whether

Yukon Quartz Mining
with or without the consent or connivance of any servant, agent or employee of any railway, steamship or other transportation company (including any railway or steamship line owned or controlled directly or indirectly by the Crown), knowingly obtains or attempts to obtain the carriage or transportation by such company of any intoxicating liquor into any country, province, district or other place, whether within or without Canada, where the importation or transportation of such liquor is in the circumstances of the case contrary to law:-
(b) Knowingly aids or assists in any manner whatsoever in the doing of any of the acts, matters or things mentioned in paragraph (a) of this section; is guilty of an offence and shall be liable on summary conviction to imprisonment without the option of fine for a term not less than thirty days nor exceeding twelve months, with or without hard labour; and all intoxicating liquor with respect to which any conviction has been had under this section and all cases, kegs, barrels, bottles, packages, or receptacles of any'' kind in which the same is or was contained shall upon conviction be forfeited and shall be disposed of for medical purposes or in such other manner as the Court may from time to time order.
I also wish to move an amendment which will come between section 13 and section 14. Of course the numbers of the sections will have to be changed accordingly. The proposed amendment is as follows:
Paragraph (a) of section 542 of the said act is repealed and the following is substituted therefor:-
(a) wantonly, cruelly or unnecessarily beats, binds, ill treats, abuses, over drives, tortures, or abandons in distress, or having ownership thereof in any way fails to provide and supply food, water and shelter for any cattle, poultry, dog, domestic animal or bird, or wild animal or bird in captivity, so that unnecessary suffering or injury is caused to the same; or-
This amendment is asked for by the Humane Society, and imy hon. friend for East Hamilton (Mr. Mewburn) has been urging upon me the advisability of enacting such an amendment to the Criminal Code.
Progress reported.
Mr. iMEJGHEN: Surely the government are not going to take up any further business to-night.


George Perry Graham: Just a couple of third
readings in order to get the bills over to the Senate.



CUSTOMS ACT AMENDMENT

[Stage Direction]
Hon. P. J. A. CARDIN (for the Minister of Customs and Excise) moved the third reading of Bill No. 145, to amend the Customs Act.
Motion agreed to and bill read the third time and passed.

[Stage Direction]
Hon. GEORGE P. GRAHAM (for the Postmaster General) moved the third reading 256	'

[Stage Direction]
of Bill No. 168, to amend the Civil Service Act, 1918, respecting certain post office employees.
Motion agreed to and bill read the third time and passed.
On motion of Mr. Graham the House adjourned at 12.10 am. (Tuesday).
Tuesday, June 9, 1925