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
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.
Subtopic: REPORT OF COMMITTEE ON BANKING AND COMMERCE