Mr. MACDONALD:

I observe that in the cable from the Minister of Militia with regard to the charges that have been made he suggests that they be referred to the Sir Charles Davidson Commission. I desire to ask whether this Commission is still in existence, and, if so, whether any report has been made; and, if not, when it is expected that the report will be presented. The commissioner 'has been working for a long period of time, and in the interest of the country the House ought to know the result of his deliberations.

Sir ROBERT BORDEN:

The commissioner is still engaged in the duty which was assigned to him by the Order in Council. Inquiry has been made with regard to his report-if not the final report, at least the report on matters as to which evidence may have been concluded. I understand that the commissioner is now engaged in the preparation of a report on such matters. For the purpose of making his report, he has to go over, I believe, some six thousand pages of typewritten evidence; but he is doing his best to expedite the report with respect to the matters that have been concluded.

Sir WILFRID LAURIER:

This resembles very much a forced loan. I am very sorry that at this early period the Government should feel it necessary to resort to methods of this kind. The Minister of Finance invited the insurance companies last fall to invest in the war loan. Some responded, and others did not respond. This Bill is really a way to compel them, nolens

volens, to put their funds into Government securities. It interferes with their freedom of control, and compels a diversion of their assets from channels in which they are accustomed to invest. Is the Minister of Finance forced really to take such a measure?

Sir THOMAS WHITE:

This is a war

measure, but I think a gocd deal could he said for it even in time of peace. Under the Insurance Act, insurance companies are limited in their investments. It would not appear to me that it would be a hardship on life insurance companies if, even in ordinary times, they were compelled to invest a certain proportion of their net ledger assets, available for investement, in Dominion securities. But it is not my intention that this measure should be permanent. As I stated on the occasion of the second reading, it is a war measure, and its object is to provide a market for a portion of our domestic war loans and issues. I have already stated to the House the amount which we may have to borrow during the present year in connection with the war. It is not possible for us to say how long the war may last. We have our hopes, we Have our expectations, but there is no certainty as to the period of time over which the war may continue. As I pointed out the other day, we have the American market and the Canadian market for our securities. It is hardly open for us to make a war loan in the American market, and the result is that our war loans, during the period of the war, must be, so far as I can see, in the Canadian market. There can be no reasonable grounds for objection. There is another way to look at it. In our war taxation measure we exempt the life insurance companies, and it would seem to me that this might be regarded by the companies as a fair measure, as giving them an opportunity to contribute towards the war. In a sense, I suppose, it is a forced loan, though I do not think that is a happy expression for it. Parliament has power over the investments of companies, among others the life insurance companies carrying on business in Canada under Dominion licenses, and it would appear to me that as the rate which they will obtain is attractive, and, as the securities are absolutely beyond question, there is no hardship to the insurance companies, and no detriment to the policyholders who are interested in those companies, in calling upon them to invest in our war securities a portion of their net ledger assets.

Sir WILFRID LAURIER:

I think that my hon. friend has not fully apprehended my objection to this legislation. I look upon it as most unfortunate that we should create the impression that the Government is obliged to resort to a forced loan in order to carry on its war measures. My hon. friend says that he is limited in his field of operations. That may he, but I would have hoped that he would be able to get all the cash that he needs without having recourse to such a measure as this. My hon. friend says that to submit the insurance companies to the necessity of investing in Government loans is inflicting no hardship upon them, but under the provisions of this legislation the impression will be created that this is a loan which is being forced on these companies, and to that extent I think the measure is objectionable.

Sir THOMAS WHITE:

It is quite true that the insurance companies of Canada responded well in connection with the last domestic loan; in that respect I paid them a tribute in my Budget speech.

Sir WILFRID LAURIER:

Did they respond to the extent of the demand made?

Sir THOMAS WHITE:

It was not a demand; therefore there could be no question of their responding to the extent of the demand, but they did respond, and responded well. I may tell my right hon. friend that there are some life insurance companies doing business in Canada which wpuld have responded had it not been for the fact of having German share-holders or policyholders. To me it seems expedient that all life insurance companies carrying on business in this country should be put on the same basis. If the directorates of any life insurance companies are restrained from doing what they would otherwise gladly do by reason of the influence of enemy [DOT]policyholders and shareholders, I purpose putting them on the basis where they must pay by law. .

Mr. OLIVER:

Would the minister have any objection to giving the names of the companies to which he has alluded?

Sir THOMAS WHITE:

I have objection, certainly, because it might injure the companies in question. Most of their policyholders and shareholders may have been in favour of it; a minority might have objected. It would, I think, be improper for me to make any statement with regard to

f

particular companies. So far as I can learn, the management of all the companies would have been quite willing to respond.

Mr. OLIVER:

My hon. friend has made a statement reflecting on certain insurance companies, and unless the companies against which he directs the reflection particularly are in some way distinguished then the reflection stands against all insurance- companies.

Mr. W. F. MACLEAN:

I think it is good national policy that insurance companies should invest as much of their -trust funds a-s possible in Canadian securities,- of the Government, or of provinces and municipalities, and on mortgages on property in Canada. Those of our life insurance companies which have large trust funds in their charge should put the bulk of those trust funds in securities absolutely pertaining to the country in which they do business. If this were done we should be keeping our -money at home. There has been a very considerable protest in this country against some of our insurance companies investing their trust funds in questionable, or, rather, speculative companies outside of Canada, and I should like to- see the insurance law revised with a view to compelling insurance companies to put most of their trust funds in Canadian investments. I hope there is truth in the rumour that some of our insurance companies are taking many of the securities which they have invested in outside countries, especially in the United, States, and are reinvesting them in Canadian securities. The trust funds that are held for the benefit of Canadian policyholders in American companies belong to the Canadian people, and we should see that they are largely invested in Canada. They are contributed, by the Canadian people in the first place, -and -should be used to build up our own industries, to help our own enterprises and to help the Government. The experience of countries in which they have government insurance is that while the security to the policyholder has not depreciated in the least, a large amount of trust money is available in the country. If the tendency of this measure is in any way in that direction, it commends itself to me and to many people in this country as being sound national policy.

Sir WILFRID LAURIER:

No national

policy is compulsory, all investments should

be voluntary and based upon profits. That is the only objection I have. Otherwise I feel that the measure is good, but I do not like the compulsion part of it.

Mr. McCRANEY:

Some time ago the

minister suggested that he had under consideration a scheme for making advances to the farmers of western Canada, especially on rural credits. The proposal which is now before the committee has a very close relation to rural credits. As has been stated by the member for South York, our largest insurance companies are lending their money on farm loans, on which the usual rate of interest is 8 per cent. I would expect that the withdrawal of these large funds would tighten up the money market so that the rate of interest -would rise. I would impress on the minister the desirability of arriving at some scheme whereby the credit of Canada could be used along the lines that he has suggested for meeting the deficiency in the market-which this legislation will create.

Sir THOMAS WHITE:

The matter to

which my hon. friend refers is one that I hardly think is cognate to the question under consideration. As T stated in the Budget, I purpose looking into the whole question of rural credits, and the facilitating of loans on the security of mortgages on the amortization principle. It may be interesting to my hon. friend from South York (Mr. Maclean) to know that of the $118,000,000 of securities held by the Receiver General, and by the Trustees in Canada, for the security of policy holders of nonCanadian companies doing business without license in Canada, all but $10,000,000 or $12,000,000 is in Canadian securities.

Mr. W. F. MACLEAN:

That is good. Is that compulsory?