July 2, 1924

HOME BANK INVESTIGATION

REPORT OF COMMITTEE ON BANKING AND COMMERCE

LIB

Herbert Meredith Marler

Liberal

Mr. HERBERT MARLER (St. Lawrence-St. George):

In the absence of the hon. member for Lotbiniere (Mr. Vien) I beg to present the eleventh report of the select standing committee on Banking and Commerce as follows:

Your committee have had under consideration the order of reference from this honourable House, dated 31st March, 1924 which reads as follows:-

That, in the opinion of this House, in view of the failure of the Home Bank, and of the fact that official prosecutions and inquiries have been instituted, including the Royal Commission which has been appointed to investigate the facts alleged in the petition represented by the depositors of the bank and the affairs of the bank generally; and considering that the evidence received and to be taken before the several tribunals will be available for consideration, the Select Standing Committee on Banking and Commerce should be instructed to consider the provisions of the Bank Act with a view to recommending such amendments to the act as will better protect the interests of depositors generally and will prevent similar occurrences in the future; and also to consider the report of the Royal Commission in its bearing upon these matters and with respect to the possiblity of saving the Home Bank depositors from loss," be referred to the Select Standing Committee on Banking and Commerce for such action as the committee may deem advisable.

And also the order of reference dated 11th June, 1924, reading as follows:-

"That the Interim Report of the Royal Commission respecting the Home Bank be referred to the Select Standing Committee on Banking and Commerce."

Your committee have sat from time to time, and

244i

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 the land for compensation by the country on account of any loss they may suffeT 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 Departmenl of Finance in the years 1916 and 1918, the government of the time could have made in 1916 and in 191 an effective audit under Section 56-A of the Bank Act and if such an effective audit or thorough investiga* tion into the bank's affairs had been made it would have resulted:-

1. In the immediate liquidation of the bank, or

2. Its amalgamation with another bank, and that the effect yould have been, no loss to the depositors in 1916 or 1918.

Your committee have studied the evidence given before the Royal 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 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." (page 743).

Your committee is not called upon to question the manner in which Sir Thomas White made use of the powers given to him, or whether 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.

Thomas Vien,

Chairman.

Topic:   HOME BANK INVESTIGATION
Subtopic:   REPORT OF COMMITTEE ON BANKING AND COMMERCE
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CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

Is the report concurred

in 'by all the members of the committee?

Topic:   HOME BANK INVESTIGATION
Subtopic:   REPORT OF COMMITTEE ON BANKING AND COMMERCE
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LIB

Herbert Meredith Marler

Liberal

Mr. MARLER:

It is a majority report of

the committee.

Topic:   HOME BANK INVESTIGATION
Subtopic:   REPORT OF COMMITTEE ON BANKING AND COMMERCE
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OLD AGE PENSIONS


Mr. W. G. RAYMOND (Brantford) presented the second and final report of the special committee appointed to make inquiry into an old age pension system for Canada, as follows: Old Age Pensions



The Special Committee appointed to inquire into an old age pension system for Canada has the honour to present the following as its second and final report: Your committee has inquired into the systems which are in operation in England, Australia, New Zealand and certain other countries, examined witnesses, carefully considered their suggestions, and compared the information obtained from thirty-one municipalities throughout Canada, in reply to a questionnaire sent to one hundred and thirty-five mayors of cities and towns in every province. This question has been before this House at different times since 1907, but no definite recommendation was made by any of the committees to which it was referred. After careful consideration of the information obtained from the sources enumerated, your committee respectfully recommends: 1. That an old age pension system be established at the earliest possible date for deserving indigent persons to seventy (70) years of age and upwards. 2. That applicants for pension must be British subjects of at least twenty (20) years' residence in Canada, or naturalized subjects of at least fifteen (15) years' naturalization and twenty-five (25) years' residence. 3. (a) That the maximum rate of pension be twenty ($20) dollars per month which will be lessened by private income or partial ability to earn: (b) That one-half the amount of pension payable be borne by the federal government; the other half, by the provincial governments of such provinces as express by legislation their desire to adopt the system -the cost of administration to be borne by the provincial governments. Your committee has estimated that under such a system there would be approximately 98,841 eligible pensioners, and that if all of these were to receive the maximum rate of pension, namely, twenty ($20) dollars per month, the federal government's portion of the total yearly expenditure would amount to $11,860,920. This amount, however, would be reduced by any private income or partial earnings. Your committee further recommends that the government communicate with the various provincial governments to ascertain if they are disposed to adopt the above system and enact the necessary legislation. Your committee also begs to recommend that its proceedings together with the evidence taken, be printed as an appendix to the journals of this House. For the information of the House, a copy of the proceedings and evidence, a synopsis of the communications received from the municipalities, and a statement of the expectation of life prepared by the Department of Insurance, are appended to this report. All of which is respectfully submitted. W. G. Raymond, Chairman.


PRO
LIB

William Gawtress Raymond

Liberal

Mr. RAYMOND:

It is a unanimous report of the members present at the final meeting; all the members of the committee were not in attendance.

Topic:   OLD AGE PENSIONS
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GROWSNEST PASS AGREEMENT

PRO

Thomas Alexander Crerar

Progressive

Hon. T. A. CRERAR (Marquette):

Mr. Speaker, I desire to present a petition from George Pateman and sixty-six others praying that the Crowsnest pass rates be not further

[Mr. Raymond.l

suspended or abrogated. This petition comes from Marquette constituency.

Topic:   GROWSNEST PASS AGREEMENT
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BUSINESS PROFITS WAR TAX ACT, 1916, AMENDMENT


Hon. J. A. ROBB (Acting Minister of Finance) moved that the House go into committee at the next sitting to consider the following proposed resolution: Resolved, That it is expedient to provide, that The Business Profits War Tax Act, 1916, and amendments, shall be construed and have effect and be deemed to have had effect since its enactment without lapse or interruption as if section twenty-six thereof when first enacted had provided as follows:- "The provisions of section three of this act shall not continue in force after the thirty-first day of December, one thousand nine hundred and twenty;" and anything enacted inconsistent therewith shall be deemed to have been superseded amended or repealed, as the circumstances may require, and all taxes, interest and penalties payable under the said act and amendments shall remain a tax owing to His Majesty until fully paid and satisfied. He said: His Excellency the Governor General having been made acquainted with the subject matter of this resolution, recommends it to the favourable consideration of the House. Motion agreed to.


LIB

James Alexander Robb (Minister of Immigration and Colonization)

Liberal

Mr. ROBB:

If there is unanimous consent, Mr. Speaker, I am ready to proceed with the resolution now.

Topic:   BUSINESS PROFITS WAR TAX ACT, 1916, AMENDMENT
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CON

Henry Lumley Drayton

Conservative (1867-1942)

Sir HENRY DRAYTON:

I consent, Mr. Speaker.

Topic:   BUSINESS PROFITS WAR TAX ACT, 1916, AMENDMENT
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LAB

William Irvine

Labour

Mr. IRVINE:

I would rather that this

resolution be discussed at some other time.

Topic:   BUSINESS PROFITS WAR TAX ACT, 1916, AMENDMENT
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LIB

James Alexander Robb (Minister of Immigration and Colonization)

Liberal

Mr. ROBB:

All right.

Topic:   BUSINESS PROFITS WAR TAX ACT, 1916, AMENDMENT
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LIB

PUBLIC SERVICE RETIREMENT ACT EXTENSION

July 2, 1924