Mr. FIELDING.

I do not think I had any such interview. I do not recollect any at all events. I do not think Mr. McCarthy came to me on the subject.

Mr. BLAIN.

That is one of the difficulties. We have a letter from Mr. McCarthy stating that he would come to Ottawa.

Mr. FIELDING.

Later on it appears that he did not come. I am pretty sure I am correct in saying that Mr. McCarthy did not see me about it.

Mr. BLAIN.

I accept that statement. My hon. friend had notice from Mr. McCarthy that there was something wrong. My hon. friend knew at that time that a large number of people in almost every part of the province of Ontario had subscribed for stock, had paid a portion of their money and given notes for some of the balance. Not only was my hon. friend aware of that, but he said in the House that when this matter was up for an extension in the Banking and Commerce Committee he was a little suspicious of the affair himself. Suspicious of what? Suspicious that these men who were associated in the early history of this bank were not the men to whom to entrust the people's money and public honour of this country?

Mr. FIELDING.

No, that was not it.

Mr. BLAIN.

My hon. friend denies that, but he goes on in his speech and is very careful to give a character to Mr. Travers. May I say to my hon. friend, with all deference to the high position he occupies, that the public have dealt to some extent with Mr. Travers, and they want to deal with my hon. friend the Finance Minister now, because my hon. friend the Finance Minister had more to do with the granting of this certificate than any other man in Canada. One word from the Finance Minister at a critical stage in the history of this bank, not after the bank had been

organized and the people had p.ut their money into it, but when he either took this letter of Mr. McCarthy's before the Treasury Board or did not, would have settled this question and. not a man in Canada would have lost a dollar through this bank. May I ask the Finance Minister and the Prime Minister whether or not, when this matter was discussed in the Treasury Board, Mr. McCarthy's letter was read to the board?

Mr, FIELDING. I could not tell my hon. friend. Mr. McCarthy's letter having been withdrawn, was no longer an issue. The Treasury Board record must speak for itself, but as to what actually occurred between the members of the Treasury Board at that time I would not from memory attempt to speak.

Mr. BLAIN.

My hon. friend in answering Mr. McCarthy said:

I wired you to-day that no application had been made by the promoters for the Treasury Board certificate, and suggested that you send forward at once any representations which you may wish to make, to which we shall give all due consideration.

Mr. FIELDING.

Then they were withdrawn?

Mr. BLAIN.

May I say that my hon. friend the Finance Minister was not speaking in that letter particularly as Finance Minister; he was writing over his signature representing the Treasury Board, and he told Mr. McCarthy over his own signature that whatever representations he had to make would be placed before the Treasury Board when they met to deal with this certificate. My hon. friend's memory is a little short now.

Mr. FIELDING.

No.

Mr. BLAIN.

Well, my hon. friend is not able to state whether or not that letter was read to the board.

Mr. FIELDING.

The letter having been withdrawn, Mr. McCarthy having withdrawn his objections, I think it is quite possible the letter was not read, but I cannot speak from memory on a matter of several years ago.

Mr. BLAIN.

If it was not read the greater the responsibility on the head of the Finance Minister because he took upon himself to receive communications from a gentleman who was objecting to the granting of the certificate, he corresponded not as Mr. Fielding, but as Finance Minister of this country, and a member of the Treasury Board, took upon himself to accept communications, to answer communications, to receive further communications and telegrams, and then because some of these had been withdrawn, he took upon Mr. BLAIN i

himself to not submit any of them to the Treasury Board.

My hon. friend's record in connection with the establishment of banks is not so good, as was pointed out by my hon. friend from Frontenac (Mr. Edwards) in his speech during this afternoon.

The responsibility, therefore, must rest with the Minister of Finance. Whatever the policy of the government may have been in the past in respect to granting these certificates to banks; whether they did it at the close of a council meeting or not, whether they did it in a formal or informal way, whatever the past history of my hon. friend as a member of the Treasury Board, he had sufficient warning in this case; he had suspicions of his own when the bank was asking extension of time, he had suspicions when Mr. McCarthy, a member of this House and a political supporter of his own party wrote him a warning letter; he had sufficient information in his possession, as a trustee of the public interest, to call the board formally together and go into the whole matter in detail. There is no question about that. The Finance Minister had been warned time and again. My hon. friend from Hal-ton (Mr. Henderson) prior to the granting of the certificate had more than one conversation with him as the Minister of Finance admits. What were these conversations about? Would there be any necessity for them if everything was all right. And yet, we had the Minister of Finance saying yesterday to my hon. friend (Mr. Henderson): You need not be alarmed, Mr. Henderson, you have notified the government, your responsibility ceases. And the member for North Oxford (Mr. Nesbitt) struggled to point out that the same responsibility rests with the member for Halton in the premises as rests with the Minister of Finance. Surely when he reads his remarks in ' Hansard ' to-morrow he will not subscribe to such a doctrine. What is the Finance Minister for, anyway, and why is he selected for the second position in the cabinet if it is not that he should specially protect the interests of the public in such a matter. What nonsense it is to argue that he has no greater responsibility in such a proceeding than has an ordinary member of the House. And, when thd Prime Minister spoke he was caTeful to discuss everything but the request of those who are suffering, that a Eoyal Commission should be appointed, and that, Sir, is the crpx of the whole question that is before the House, before the courts, and before the people of Canada. I am not going to discuss just now the question of recouping out of the public treasurv these sufferers, but I will read the resolution of my hon. friend, (Mr. Henderson):

This House is of the opinion that a Royal Commission should forthwith issue to inquire into and investigate the incorporation and organization of the Farmers' Bank of Canada, and the granting of a certificate by the Treasury Board permitting the said bank to issue notes and commence business, and all circumstances connected therewith, and generally to inquire into and investigate the operation and efficiency of the Bank Act in relation to the affairs and transactions of the said bank.

I think I would be safe in saying that my hon. friend (Mr. Henderson? would not have gone too far if he had moved a resolution condemning the government, the Minister of Finance, and the Treasury Board for failing to discharge their whole duty in respect to the granting of the certificate to the Farmers' Bank. But, the resolution is so mild in form, that in view of the statement of the Prime Minister, and of the Minister of Finance that there has been no wrongdoing on the part of the government I should have thought that they would cheerfully accept such a resolution asking for a Royal Commission. If the Minister of Finance is not guilty as he declares, who can suffer. Certainly the government will not suffer from an elucidation of the facts if they have done nothing wrong. Surrounded as this whole question is with suspicion, why is it that the Prime Minister and particularly the Finance Minister do not hail this resolution with sighs of relief and declare that they will reveal everything in connection with the transaction. But, the Minister of Finance stands up and declares to his followers that there shall be no Royal Commission and asks support. In the different sections of the province of Ontario there are homesteads disappearing from the possession of their original owners and there are men who hitherto have lived in comfort forced to take up the pick and shovel to earn a livelihood for the remainder of their years, and all on account of the ruin brought on them by this unfortunate collapse of the Farmers' Bank. And yet the Prime Minister and the Minister .of Finance tell these unfortunate people that they are to have no recourse, that justice is not to be rendered them, that there is not to be an inquiry into how this bank came into being and as to the fraud it perpetrated; and they call on their majority in this House to vote down a resolution which might give these poor people some relief. Yesterday we had the hon. member for North Toronto (Mr. Foster), the responsible representative of a great city in this Dominion, stating in his place in the House that if a commission is granted he would bring forward other evidence that cannot be presented without the appointment of such a commission. The Minister of Finance knows full well that there is evidence to be found that will not come

out in the investigation which is taking place in the city of Toronto, and which only can be made public through a Royal Commission. I do not wish to detain the House longer, and in conclusion I will say to the Prime Minister and to his Finance Minister that there is no class of the community, whether they be losers by the Farmer's Bank or not who will feel that the government has done its duty if they refuse to accept 'this moderate resolution proposed by my hon. friend (Mr. Henderson). It is not a resolution condemning the government before they are tried; it merely asks for a full and complete investigation by an impartial tribunal so that the people will know where the money came from, and where the money has gone.

Mr. M. Y. McLEAN (South Huron).

Mr. Speaker, I desire to say only a very few words on this subject, and I do not intend to waste the time of the House discussing the sophistries, insinuations and suspicions indulged in by my hon. friend (Mr. Blain) who has just preceded me. in listening to the remarks of hon. gentlemen opposite, as well as to those of my hon. friend who has just taken his seat, the thought has occurred to me that if the foresight of these gentlemen were only half as good as their hindsight they would be very wise indeed, but unfortunately for us all, that is not our condition. If it were we would be saved from many difficulties, many disasters and many pitfalls. I do very sincerely and truly sympathize with my hon. friend (Mr. Henderson) who has moved this resolution. There are stockholders and depositors in this bank in my own constituency. The bank had, I think, three agencies in the constituency and there are deposits to the amount of about $100,000 or over. But, I am sorry I cannot congratulate my hon. friend on the manner in which he has introduced this resolution or the time that he has chosen to do it. Neither, Mr. Speaker, can I congratulate hon. gentlemen opposite on their attempt to make political capital out of this unfortunate affair. I have very carefully and attentively listened to the discussion of this subject, I have very carefully perused all the evidence that has been submitted to this House, I think that possibly I am, in a measure, as capable of judging the evidence as some of my hon. friends who have spoken on the opposite side, and I am free to say that for the life of me I cannot discover that my hon. friend the Finance Minister (Mr. Fielding) or the Finance Department have been blamable in any sense whatever. In so far as my judgment enables me to interpret these documents they have only done what they should have done in connection with the matter. It is quite true, Sir, that the department was deceived by Mr. Travers, but they are not the only parties-

who have been deceived by Mr. Travers. Mr. Travers deceived his shareholders, he deceived his provisional directors, he deceived his permanent board of directors, and he deceived the late president of that board. I am also free to say that, from my examination of the evidence which has been taken before the courts in Toronto, I am firmly of the belief that, bad as Mr. Travers is, he has simply been the tool of another archconspirator and rogue, who, I am sorry to say, has not been captured, and I am led to believe that the authorities possibly have not made as great exertions to capture him as they might have made.

If, under these exceptional circumstances, the government can see fit, or think it advisable, to recommend that the depositors in this bank should in some measure be reimbursed, and if this can be done without setting a dangerous precedent, I would be very glad. I have not so much sympathy with the stockholders of the bank. The stockholders went into it knowing what they were doing, at least they should have known what they were doing. They went into it as a business enterprise, and if it had succeeded as a business enterprise they would have profited. But, as it has not succeeded as a business enterprise, of course, like investors in any other similar business, they have lost. But, it is very different with the depositors. The depositors placed their money in this institution for safe-keeping, believing ai the time that they were protected in so doing by the laws of the land, and, under the circumstances, as I said before, if the government should see fit, or if they should consider themselves in a position to grant some measure of aid to these unfortunate people without setting a precedent which might be considered dangerous, then I think that the country will certainly support them in so doing.

Let us come down to the real issue that is before the House and to the substance *of the motion moved by the hon. member for Hal ton. That motion has been read two or three times already this afternoon, but for the sake of my argument, I want to read a portion of it again. The resolution says :

That this House is of opinion that a Royal Commission should forthwith issue to inquire into and investigate the incorporation and organization of the Farmers' Bank of Canada, and the granting of a certificate by the Treasury Board permitting said bank to issue notes and transact business, and all circumstances connected therewith

I

I maintain that there is no necessity for a commission for any such purpose. I maintain that all the evidence which any commission could possibly secure has already been obtained and has already been placed before this House by the Department of Finance. Not only that, but the Mr. M. Y. McLEAN (South Huron).

resolution casts a doubt upon the honesty and fidelity of the Minister of Finance and the Department of Finance, and I certainly cannot vote for such a motion as that, because I have full confidence that the minister, the department and the Treasury Board would not do a dishonest or dishonourable act to favour any person. The second part of the resolution is:

-and generally to inquire into and investigate the operation and efficiency of the Bank Act in relation to the affairs and transactions of the said bank.

Why should we carry a resolution of that kind at the present time? That question is not before the House. That question will be presented to the House before very long, and when it does come before the House is the proper time to decide as to whether or not such a commission is required. But, Sir, I contend that the affairs of this banking institution are at the present time being investigated by the courts of this province. If that investigation is thorough and complete and if it answers all the purposes, then certainly there is no necessity for a Boyal Commission such as is being proposed. It has been said that under a commission the Minister of Finance, and several other gentlemen who were named could be brought up and put into the box; but under the investigation now being prosecuted, the Finance Minister and every other man can be brought forward and made to give his evidence. This again shows the futility of the proposition before the House. I have no hesitation in saying that in the event of its being ascertained that the present investigation is not full, that justice is not being done, that those supposed to be criminals are being shielded and that an additional investigation is necessary, the government would be lacking in their duty to the people and themselves if they did not grant such an investigation. But the time for deciding that has not yet come, When it does, if it should come, the government can take action. For these reasons I have no hesitation in saying that I shall give my vote against the motion of the hon. member for Halton (Mr. Henderson).

Mr. C. J. THORNTON (Durham).

concerned. Biuit there is another matter to which I would direct the attention of the Minister of Finance and the House. The Bank Act provides that a bank shall not do business until the certificate of the Treasury Board is issued. We are told that, after this protest, had been entered by Mr. Leighton McCarthy against the issue of this certificate, an interview took place between the Finance Minister and Mr. Travers and that Mr. Travers gave the minister assurance that everything was straight in connection with the raising of the money for the deposit that was necessary before the certificate could issue. In his reply to the Finance Minister, Mr. Travers said:

In reply to your letter of the 30th of November, I have to say that in the case of the Farmers' Bank of Canada, the provisional directors did not raise the money in the way mentioned by you. You will find the statement put in by me absolutely correct as to the amount of stock subscribed and the amount paid up.

This was in direct contradiction of the allegation made by Mr. Leighton McCarthy. At pages 6 and 7 of this return we find the application which was made for this certificate of the Treasury Board. We have been told that the application was made by the Farmers' Bank of Canada. But I think there was an evasion of the law and something misleading in the application made by Mr. Travers. As a layman, I may not understand these matters, but I think that the very fact that the application for the certificate was put in by Mr. Travers in the way it was should have made the Treasury Board suspicious that things were not Tight. As I read the Bank Act, it does not say that the manager of a bank can get the certificate and start the bank. It does provide, as I understand it, that the president and directors of the bank can get the certificate and start 'the bank-assuming, of course, that they have complied with the conditions under the law. In this case, was an application made by the president? No. Nor was it made by the directors. This application reads as follows:

Toronto, Nov. 27, 1906. Deputy Minister of Finance,

Parliament Buildings,

Ottawa, Ont.

Dear Sir,-I have the honour herewith to forward declaration of the general manager of the Farmers' Bank of Canada setting forth facts relating to the incorporation and organization of the said bank, and also giving the names of the directors

And so on. And he goes on to say, at the end of this letter:

I apply for the certificate of the Treasury Board permitting the Said bank to commence the business of hanking.

W. R, TRAVERS, General Manager.

Mr. Travers himself applied for the certificate and was given that certificate. Now,

I do not read the Bank Act as saying that the certificate is to be granted to the manager himself on his personal application. As I read the law, there should be an application on the part of the bank, signed at least by some of the bank officials who have authority. But in this case the application was made by a person said to be the general manager, hut who, even as such, had no authority to ask for nor receive the certificate.

Another point that seems to me of great importance is the correspondence that took place between the Deputy Minister of Finance and the Deputy Minister of Justice with respect to Mr. Travers' application. I read at page 25 of this return the letter of the deputy Minister of Finance in which he says:

Dear Sir,-I beg to inclose herewith a file of papers being an application from the Farmers' Bank of Canada for a certificate to commence business under sections 13-17 of the Bank Act.

Kindly advise me if, on the papers submitted, such a certificate may legally issue.

Now there is something in this reply of the deputy minister that should have caused the Treasury Board suspicion. Now I will the Deputy Minister of Finance in which Deputy Minister of Justice.

In reply, I beg to state that the statements in the statutory declaration of Mr. Walter R. Travers are sufficient, if they are accepted

Now he does not say they are sufficient, he does not say that they should be accepted, he does not pass any judgment upon their sufficiency, but he says ' if they are accepted,' that is, by the Treasury Board. Surely there is here an implication that they should not be accepted. There is in these few words of that letter, matter which should have caused the Treasury Board to pause, there was something which should have raised a suspicion in their minds that all was not right. Now there is another point I wish to bring out, and that is the fact that no certificate could issue without a meeting of the Treasury Board, and without the consent, of the majority of the Treasury Board. Not only that, but there is the promise of the Finance Minister to Mr. Leighton McCarthy that his objection to the granting of a certificate would be laid before the Treasury Board when they considered the application for a certificate. That was of all things the most important to lay before the Treasury Board, that objection of Mr. Leighton McCarthy was the most important thing of all. Now will the Finance Minister say that that objection was laid before the Treasury Board? Did the Treasury Board consider that charge against these men who were trying to get

Mr. THORNTON.

this certificate? Did they ask if those things were true? Were they- laid before the Treasury Board? Why, Mr. Speaker, we have the fact that the Treasury Board met on the 30th November, but the papers, all the documents which had been submitted to the board in connection with Mr. McCarthy's protest, were returned to Mr. McCarthy on the 7th of November, and the board did not meet until the 30th of November. Then when the papers had been returned to Mr. McCarthy, how could these matters have been laid before the board? It looks very suspicious to say the least of it.

At six o'clock, House took recess.

After Recess.

House resumed at eight o'clock.

Mr. THORNTON.

Mr. Speaker, at six o'clock, I was directing attention to the conduct of the Treasury Board at the time the certificate was granted. We have Mr. McCarthy's letter and the minister's answer requesting particulars of the charges against these men who were asking a certificate for the Farmers' Bank, and the minister promised that the matter would be considered by the Treasury Board. All particulars were furnished, the charges were made against the promoters of the bank and yet the Treasury Board met on November 30, but the papers and particulars which had been furnished at the request of the minister had been returned to Mr. McCarthy on November 7. Evidently these men got the certificate without the objections having been considered by the Treasury Board. It is peculiar that the Treasury Board met on November 30 and that on that day there was correspondence between the Minister of Finance and Mr. Travers, and that on that day Mr. Travers received his certificate for the bank to start business. It looks as if everything had been hurried on that day. There was no occasion for hurry, an extension had been granted, good until January 18, so there were still about six weeks before the charter would expire. Who was nurrying the Treasury Board and the Finance Minister? The question arises, was Mr. Calvert or the president of the Trust and Guarantee Company hurrying matters on, and if so for what reason? Was there something in it for these men? These questions naturally arise, and the people out in the couofry are asking them.

There is something very distressing in the failure of the Farmers' Bank. Members from constituencies which were very much affected, receive many letters about it. I receive letters every few days appealing to me and asking if the government and the right hon. First Minister will not do something to relieve those who have

been robbed of their all, for there are many whose whole substance has been taken from them by this, and wanting to know if there is not some relief to be granted by the government. If the government had been as careful of the people's interest as they should be, then immediately this failure occurred, they would have done something to relieve the situation and Ito show the people that they wanted to get after these designing men who robbed the shareholders and depositors. I know the plea is put up that there is no law to touch these men, that the government had no power to interfere. Is that so? Has it come to this? I am perfectly well aware they say there was a law and that the law was being enforced in Toronto, but we know how comparatively helpless that is; we know how the majority of these men have escaped the hands of justice and how the great offender in the case received what everybody says is too light a sentence, only six years for the crime he had perpetrated. The impression is abroad that he should have had 26 years. It looks as if there was something lax in the law when a man guilty of such a crime should receive a sentence of only six years, and is to-day living comparatively a gentleman giving evidence in Toronto. It looks as. if the government ought to have done something more to get after those fellows. If there is no law to get after them should there not be? Are designing men to be allowed to rob innocent men, women and children of their hard-earned savings? If so, God help Canada and help her legislators, her lawmakers to make laws that will get after such men quickly.

There were warnings without number in connection with this bank failure. We had first of all numerous personal appeals made not only to the Finance Minister, but to other members of the government. These were more than gossip, they were practically definite -charges made- against the promoters of this bank, for the way in which they were trying to get the bank started. Then there was the direct charge made by Mr. Leighton McCarthy, coming from shareholders who had been, to say the least, fooled, who were being robbed and misrepresented in connection with the floating of this bank, and on the very day that the Treasury Board issued that certificate we have Mr. Clouston, in the name of the Canadian Bankers' Association, protesting strongly -against that certificate being issued. Then within four months of the bank starting business we have this protest from the manager of the Milton branch of the bank, saying there was crookedness in connection with the management at head office, and we had later on another appeal from the Canadian Bankers' Association, through its secretary, saying there was something crooked in connection with the doings of

this bank. All these warnings about the misdoings of the management should have shown it was time to do something. Had steps been taken by the department in some way to arrest these men in their work of robbing these innocent people, something could have been done. I do not wish te take time to recite the particulars of that insurance matter in New York state. You will remember that when the Minister of Finance was appealed to, his one answer was that contained in a letter dated January 12, 1910, to Wm. H. Hotchkiss, Superintendent of Insurance, Albany, New York:

There bang no government bank inspection in Canada' I do not see bow we can at present take the action that you desire. Probably the bank on application from you would explain the whole matter.

(Signed) W. S. FIELDING.

Now, if there is not government bank inspection in Canada which would prevent these abuses, whose fault is it? Ought there not to be some way by which banks can be controlled, and some way in which bank managers can be prevented from fleecing the people. Let me refer briefly to the question of bank inspection. At different times the subject has been discussed in this House, but no action has up to the present time been taken. It is said, that in the last thirty years the people of Canada have lost no less than $45,000,000 in connection with bank failures, and I am inclined to think that is irather an underestimate. In thirty years there have beep 29 bank failures in Canada, and in view of such deplorable figures it seems to be extraordinary that a system of government bank inspection has not been inaugurated before this. Three years ago this question was brought forcibly to the attention of the House by Mr. Pringle, then member for Stormont, and in the course of his remarks he laid great stress on government inspection of banks. Mr. Pringle stated that at the date on which he was speaking there were $600,000,000 deposited in Canadian banks, and to-day the deposits amount to over $800,000,000. I am well aware that there is a difference of opinion as to government bank inspection, and I can readily see how that may be the case. But some of the best bank managers that Canada has ever had are very strongly in favour of government bank inspection. Mir. H. S. McLeod, late manager of the Bank of Nova Scotia is strongly in favour of government inspection or of an independent audit or both, and he urged this matter on the government as far back as the year 1900, and at different times since then. In a letter to the Toronto ' Globe ' on the 26th November, 1906, Mr. McLeod wrote:

In Canada there were in existence in 1880, forty-one banks. Since then seven have been Mr. THORNTON.

incorporated and have commenced business, making a total of forty-eight banks. Of this total, twelve' have failed and some others have saved themselves by amalgamation. The failures are, therefore, 25 per cent in twenty-six years, the last ten of which were years of unexampled prosperity with steadily rising deposits-conditions under which even insolvent banks seldom close their doors.

Now, here is a very important part of Mr. McLeod's statement:

Most if not all of the above mentioned failures were fraudulent, and it is now plainly evident that a few hours examination by a skilled banker would have disclosed an insolvent condition in any one of the banks years before it collapsed.

There cannot be any doubt as Mr. McLeod says that had there been efficient government bank inspection in Canada during the last 3 or 4 years this disastrous failure of the Farmers' Bank and the dreadful consequences that ensued could not have happened, because, as Mr. McLeod says, a few hours' examination by a skilled banker would have disclosed the insolvent condition of that bank Mr. McLeod says further:

In each of the two most recent disasters a correct diagnosis could have been made ten or more years ago.

Had there been efficient bank inspection the Farmers' Bank could not have run six months without its insolvency being detected, and over one million dollars would have been saved to the innocent shareholders and depositors. Three years ago when Mr. Pringle brought this matter to the attention of the House, one of the most surprising things in that debate was the answeir which the Minister of Finance then gave on the floor of the House. Speaking on the 2nd of March, 1908, he said (volume 3, 'Hansard' 1908, page 1499):

Perhaps the most important question he (Mr. Pringle) discussed was that of government inspection. I confess without pretending to give a final judgment that my inclination is strongly against the views he has presented on that subject.

I am disinclined to favour government inspection for several reasons:

J. In the first place I think it is unnecessary. There is no condition of affairs in Canada that calls for it.

Now, if there is no condition of affair's in Canada that calls for bank inspection I would be curious to know how rotten the condition of things must be to satisfy the Minister of Finance that government bank inspection is necessary. It is most distressing to contemplate that the state of affairs existing in this country in respect to banking must be worse than it is today before they call for efficient government inspection in the eyes of the Minister of Finance. It seems to me that the

want of proper government inspection is where the Bank Act is weak, and where the Minister of Finance is at fault in not providing it. I believe there should have been efficient government bank inspection in Canada years ago. In the United States where there is a system of government inspection of national banks, a system which is not nearly as perfect as it should be, and which, indeed, is very imperfect, there has only been in the last 25 years 5 per cent of failures as against 25 per cent in Canada. It would seem to me, the Minister of Finance notwithstanding, that these figures show that government inspection is a good thing. I believe, Sir, that the time has come when something should be done by the government in the line indicated in the motion of my hon. friend from Halton (Mr. Henderson), I believe that the only way to get at the facts in connection with this deplorable business is to appoint a Royal Commission to make full and independent inquiry.

It has been acknowledged on all hands, and acknowledged by some hon. gentlemen on the government side of the House, that there is no other way to get at the facts except by a commission. I thought the duty of the government, and indeed most people in this country thought the duty of the government was. just as soon as this failure occurred, to have issued a Royal Commission to investigate the whole matter. They should have done it immediately after the failure. They could and should have done so. Three months or thereabouts have elapsed since the failure and nothing whatever has been done. We have been waiting for the powers that be in Toronto to move in this matter. It is a well known fact that in information they have gained there is of such a limited character that it does not throw a great deal of light on it. A Royal Commission is the only means by which the information can he obtained. The matter is of so much importance and the consequences of this failure are felt so widely throughout Canada that I cannot see why or how the government can refuse to grant this request of my hon. friend from Halton (Mr. Henderson). Those who have lost their all do not hesitate to blame the right hon. the Prime Minister (Sir Wilfrid Laurier) and the hon. the Finance Minister (Mr. Fielding). I know the feeling of the country, and it is that if the government and the members of the government, if the right hon. Prime Minister and the hon. Minister of Finance want to square themselves with the people they will not hesitate for one moment to grant this request of my hon. friend from Halton. There is no doubt that had ordinary care been exercised when this certificate was granted, these so-called bankers would never have been authorized to do business. It is regrettable from every view point that this failure

should have taken place and I trust that the proposal of my hon. friend will be acceded to. Not only that, but I hope that there will be in the new Bank Act provision for an efficient and thorough system of government inspection. I think that the government should show its willingness to try to do something at least to save as much as it [DOT] can to the innocent sufferers from this miserable wreck.

Mr. GEORGE TAYLOR (Leeds).

Mr. Speaker, I represent a constituency in which there were practically two branches of this institution which was licensed by this government and allowed, with the full knowledge and consent of the government, to perpetrate frauds upon the people of the country. Many of my constituents have lost their all. At the village of Phil-lipsville there was one branch of this bank established. Across the line dividing the constituency of my hon. friend the Minister of Railways and Canals (Mr. Graham) and my own constituency there was a branch located, but a great share of the business was done with the farmers in my own constituency. Many of them are stockholders and depositors, I had hoped to see the Minister of Railways and Canals in his place joining with me in advocating that the government should approve of the motion of my hon. friend from Halton (Mr. Henderson) and I hope that when the division comes he will vote with me in the interest of many of his constituents who have suffered, as mine have, from the fact that this rotten institution was granted a certificate by the hon. Minister of Finance (Mr. Fielding). With the full knowledge that a fraud was being perpetrated upon him and upon the government, they granted this certificate, the minister having at the time the proof of this fraud in his hands. If he did not have it in his hands he got the information the next day. The certificate was issued on the 30th November, and next day he received a letter from the Bankers' Association telling him that the thing was not right. Why did he not obtain a warrant for the arrest of Travers for perjury? He had the declaration sworn to by Travers in which Travers had given false information, he had the proof in his own hands that it was false-why did he not act and save the people of this country from the loss of thousands and thousands of dollars? A branch of this bank was opened in Athens, adjoining my constituency. Travers came there, selected one' of the most respectable farmer's sons in the constituency as manager because he knew that he had influence in that section of the country with the surrounding farmers. Travers said to him: I want you to go

among the farmers and offer them 4 per cent on their deposits. The rule of the Bankers' Association only permits 3 per

cent, but you will have to cover the matter up in your books so that it will not show. Early last fall, after this branch had been doing business for some time, the accountant was short in his cash, and he and the manager were'both arrested. The manager was sentenced to three years in the penitentiary for falsifying his books. He is in the penitentiary now and Travers, who got him into this trouble, will be down with him, I presume, in a few days. There is a petition being circulated and signed in the constituency of the Minister of Railways and Canals and in the town in which the young man i3 well known asking the Minister of Justice to liberate him from the penitentiary. I hope the Minister of Railways and Canals will see that his colleague the Minister of Justice does justice to this young man and has him released, because what he did he did at the request-of the manager, Mr. Travers, in order that the bank might pay one per cent more than the other banks are paying.

The Minister of Finance issued that certificate contrary to law. The hon. member for North Oxford (Mr. Nesbitt) said that we have a Bank Act. What is the good of having a Bank Act or of making a Bank Act if the government will not enforce it? We have a Bank Act now and if the Minister of Finance had done his duty and enforced the Bank Act this certificate never would have been granted. What is the nse of talking-are not the government morally if not legally responsible for every dollar that has been allowed to be taken from the people of this country by this rotten institution which they brought into existence? Now, they refuse to give a Royal Commission to investigate the facts. Why do they refuse a Royal Commission? Is it not patent on the face of it that some of their friends would be exposed if a Royal Commission were granted? The only excuse they can have for not granting the request of my hon. friend from Halton is that some of their friends will be exposed and they would rather that the whole country should suffer than that some of their friends should be exposed in the matter.

I will support the motion of my hon. friend from Halton, in the first place, for the reason that I think we should have a Royal Commission. That commission should investigate all the circumstances and facts surrounding this bank, and the fact that it was allowed to do business by this government. The Prime Minister, the Finance Minister, the Minister of Customs, have often repeated in my hearing in this House that they belonged to a business government. The Prime Minister brags that his is a business government. The people of Canada have elected this parliament, the members of the government are the trustees of the people, they are in the same position towards the people as is a board of direot-Mr. TAYLOR (Leeds).

ors towards any incorporated company. If any board of directors had acted for their company as the members of this government have acted for the people, the stockholders would soon turn them out, and I think that the people of this country, if for no other reason than the incapacity and laxity of the government in allowing this fraudulent institution to be foisted on them, will say to these ministers-: You have not discharged your duty faithfully, and we are now going to elect a new board of directors at the first opportunity. I, therefore, support the motion of my hon. friend from Halton (Mr. Henderson) calling for an investigation. If we should have that investigation and find that the government made a mistake, that they were careless in their administration, that they were regardless of the interests they were bound to protect, then they are morally responsible for the losses sustained by the depositors in this bank. It will then be the duty of the people of this country, through their representatives in this parliament, to declare that this country is big enough and able enough to stand the losses which the people's trustees have brought upon so many innocent people. The facts stated by my hon. friend from North Toronto (Mr. Foster) cannot be disputed; and on those facts being proved, as they cannot fail to be, by a Royal Commission, it will be the duty of this parliament to pass legislation liberating the stockholders from their double liability. They will suffer enough by losing what they have paid in already and should not, under the circumstances, _ be compelled to pay this double liability. These are my views. It is the duty of the Finance Minister to withdraw his opposition to this motion and allow a Royal Commission to be appointed so that we may find out who are the guilty parties. The hon. minister says that he was not to blame, that he had nothing against the promoters of this bank after Mr. Leighton McCarthy had withdrawn his charges. But he had in his- hand a letter from the Bankers' Association telling him that there were irregularities, that things were not correct, and he should immediately have had Travers arrested, and that would have put a stop to the bank doing any further business. But when he did not have Travers arrested then, he should, four months later, when he was informed by one of the banks that this thing was not right, that these notes were being discounted, have had Travers arrested then for making false returns. He did not, however, do this because no doubt he was' afraid of exposing some of his friends. Should the commission be granted which my hon. friend calls for, we shall have all these transactions, which are now hidden, brought to light, and the parties re-

sponsible brought to punishment, but other, wise we shall be helpless.