February 18, 1938

LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

Oh, yes.

Topic:   FARMERS' CREDITORS ARRANGEMENT ACT
Subtopic:   BOARDS OF REVIEW, TIME LIMIT FOR FILING PROPOSALS, ETC.
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UFOL

Agnes Campbell Macphail

United Farmers of Ontario-Labour

Miss MACPHAIL:

Well, it must be to

very special people.

Topic:   FARMERS' CREDITORS ARRANGEMENT ACT
Subtopic:   BOARDS OF REVIEW, TIME LIMIT FOR FILING PROPOSALS, ETC.
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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

No, no.

Topic:   FARMERS' CREDITORS ARRANGEMENT ACT
Subtopic:   BOARDS OF REVIEW, TIME LIMIT FOR FILING PROPOSALS, ETC.
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UFOL

Agnes Campbell Macphail

United Farmers of Ontario-Labour

Miss MACPHAIL:

It is very difficult to get a farm loan.

Topic:   FARMERS' CREDITORS ARRANGEMENT ACT
Subtopic:   BOARDS OF REVIEW, TIME LIMIT FOR FILING PROPOSALS, ETC.
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CON

Hugh Alexander Stewart

Conservative (1867-1942)

Mr. STEWART:

The ones who need them most cannot get them.

Topic:   FARMERS' CREDITORS ARRANGEMENT ACT
Subtopic:   BOARDS OF REVIEW, TIME LIMIT FOR FILING PROPOSALS, ETC.
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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

No.

Topic:   FARMERS' CREDITORS ARRANGEMENT ACT
Subtopic:   BOARDS OF REVIEW, TIME LIMIT FOR FILING PROPOSALS, ETC.
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UFOL

Agnes Campbell Macphail

United Farmers of Ontario-Labour

Miss MACPHAIL:

Anyway I cannot get loans made; there is something wrong with my politics, or something.

Topic:   FARMERS' CREDITORS ARRANGEMENT ACT
Subtopic:   BOARDS OF REVIEW, TIME LIMIT FOR FILING PROPOSALS, ETC.
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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

No, there is no politics about it.

Topic:   FARMERS' CREDITORS ARRANGEMENT ACT
Subtopic:   BOARDS OF REVIEW, TIME LIMIT FOR FILING PROPOSALS, ETC.
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UFOL

Agnes Campbell Macphail

United Farmers of Ontario-Labour

Miss MACPHAIL:

There may not be, but you cannot get loans. You might get one out of a hundred applications, but what are you going to do about the other ninety-nine?

Topic:   FARMERS' CREDITORS ARRANGEMENT ACT
Subtopic:   BOARDS OF REVIEW, TIME LIMIT FOR FILING PROPOSALS, ETC.
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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

I will give information at another time when it is in order to do so with regard to the farm loan board and loans in the province of Ontario.

Topic:   FARMERS' CREDITORS ARRANGEMENT ACT
Subtopic:   BOARDS OF REVIEW, TIME LIMIT FOR FILING PROPOSALS, ETC.
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UFOL

Agnes Campbell Macphail

United Farmers of Ontario-Labour

Miss MACPHAIL:

No "information" will settle the cases I have in mind. We have made applications and have not got loans.

The other thing that the Farmers'Creditors Arrangement Act has done is to lower land values. Farm values have fallen through that and the liquidating of loans by the Ontario government, because undoubtedly they are glad to get rid of the land and are selling it at very low prices, and in cases where farmers have to retire through ill health or other compelling circumstances they must get rid of their farms. I find in my own immediate neighbourhood that a good many farmers have gotten old age pensions and turned their property over to the government as a last resort. They had to do something and that

was the thing they finally did; they signed their property over to the provincial government and took twenty dollars a month. In many cases-I can think of three at the moment-the man being the older got the old age pension, but he has since died, and I do not know what is going to result from a condition of that kind, w'here the woman on the farm cannot get a pension and does not own the farm. All of this is indirectly linked with the lowering of farm' values through our very peculiar handling of the matter. I urge in the wrong place, and will in the right one when I get another opportunity, that instead of a "back to the land" we evolve a "stay on the land" policy so that young men will be encouraged to remain on the farms when they want to stay, as many of them do, rather than shove them off and spend great sums of money to get unsuitable people on unsuitable farms.

Topic:   FARMERS' CREDITORS ARRANGEMENT ACT
Subtopic:   BOARDS OF REVIEW, TIME LIMIT FOR FILING PROPOSALS, ETC.
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LIB

Charles Edward Bothwell

Liberal

Mr. BOTHWELL:

I have just one short suggestion to make to the minister, in connection with amendments co this act. It is contended that section 142, subsection 2, along with section 143, subsection (j) must be interpreted in such a way that a farmer who once has had a proposal approved is not able to make an assignment under the Bankruptcy Act. The contention is made in that regard that, in all these cases where a farmer has not been able to live up to the proposal-and in many cases that is so, particularly in the drought area of the west-he is refused a discharge under the provision? of bankruptcy proceedings because he has committed an offence under the Bankruptcy Act. The courts have no jurisdiction to grant a discharge, whatever may be the cause, if the farmer has ever made a proposal for a composition which has been acted on. I merely wish to direct these particular sections to the minister's attention so that when the bill is before the house he may have had an opportunity to consider the contention that is made.

Topic:   FARMERS' CREDITORS ARRANGEMENT ACT
Subtopic:   BOARDS OF REVIEW, TIME LIMIT FOR FILING PROPOSALS, ETC.
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LIB

Walter Adam Tucker

Liberal

Mr. TUCKER:

I gathered from an

interjection which the Minister of Finance made when the hon. member for Weybum was speaking that he was under the impression that the board of review had adjusted debts in some cases-I understood him to say, in thousands of cases-where there was no privity of contract. The boards of review in Saskatchewan have never undertaken to adjust debts in those cases; for example, where somebody bought a piece of land subject to a mortgage to which he was not a party and later applied for the adjustment of that debt the boards of review in Saskatchewan-both the old board

Farmers' Creditors Act

and the new one-have refused to interfere because, they said, there was no privity of contract. I suggest that the minister give consideration to a provision making available the benefit of this amendment to the act to those who in the past have appeared before those boards and received no consideration. I know of several cases where, because of the fact that the only debt was the debt owing on the farm and the person who was on the farm had not made the original mortgage and was not a party to it, the board refused to formulate any proposal. Under the law as it stands a man cannot, as I understand, make a second application, so that those people who have in this regard been refused any help under the act will not get any unless there is provision for the making of a second application.

There are other cases where the board would have made a proposal dealing with the debts where there was privity of contract, but the main debt was of this nature and so they said they could not make an effective proposal at all. Now we are making this change, I submit everybody should be permitted to have the benefit of it. That is just as important, I think, as giving the right .to people whose cases were dealt with in the past by the first board of review to have their proposals reviewed, which I think should also be done. For example, when an order is made by the present board of review, there is a crop failure clause under which, upon the production of a certificate from the sheriff of the district that there has been a crop failure in the area where the farmer's land lies, all payments are postponed automatically for one year. That may not be the exact wording of the clause, but that is, I believe, its effect.

Again, there are cases where there has been a great change in the farmer's circumstances from the time the first order was made. I do not suggest that there should be provision for a second application as of right, but I do suggest that there should be some machinery whereby, if just cause can be shown, an order can be made by some competent judicial official that the applicant may apply for further consideration of his case, by the board of review, so that he may get the benefit of these amendments and also in proper cases a review of a proposal made by the first board of review.

Before I sit down I should like very much to congratulate the minister and the government upon bringing down these amendments, and particularly the one providing for discontinuance of the provisions of this act in certain provinces. Since the beginning of this parliament I had heard a great amount of dissatisfaction expressed from other provinces in regard to this act and I was afraid that so much pressure would be brought to bear that the government might consider repealing the whole act. I think everyone from Saskatchewan will agree with me that the act has been and still is fulfilling a need in that province that simply had to be and still has to be met, and so I think everybody is satisfied that the act should continue to be in force in Saskatchewan for some time to come. I believe even the creditors are satisfied with the administration of the act in Saskatchewan because the apparent large reduction of debt is a reduction more or less only in form. The board of review has cut the debts down only to the amount that they figured the farmer was able to pay, and they certainly have left it at that amount. Every fair-minded creditor, after he has come out from a hearing by the board of review, realizes that the board has left him all that he could hope to collect anyway. The fair-minded creditor realizes that there has been a fair writing down of the debts of the farmer to an amount that he can handle, and that there has been no real hardship to anybody. So I say that there has been a great deal of satisfaction, especially in connection with the administration of the act in Saskatchewan under the present board of review, and when the time comes to appoint further boards, as I suppose will be done in order to cope with the work, I hope the new board will be at any rate under the general supervision of the present chairman of the present board of review.

Topic:   FARMERS' CREDITORS ARRANGEMENT ACT
Subtopic:   BOARDS OF REVIEW, TIME LIMIT FOR FILING PROPOSALS, ETC.
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LIB-PRO

George William McDonald

Liberal Progressive

Mr. McDONALD (Souris):

Mr. Chairman, possibly I am looking through the glasses of a retail distributor when I make some criticism of the administration of the Farmers' Creditors Arrangement Act in the province of Manitoba. I have always thought the act was very unfair. I have regarded it as cheap legislation, although I have always felt that the good farmers of this country have every right to protection at a time when they find it very difficult, from causes for which they are not to blame, to pay their debts. I call it cheap legislation for this reason, that if the government wants to do something for the farmer, why not do it at the expense of the country as a whole? Why put the entire load on the unsecured creditor, and particularly on the retail merchants? The farmers of this country were entitled to protection; there is no doubt about that, and I agree with what the hon. member for Grey-Bruce (Miss Macphail) said in her discussion of the act. But this is no time to make valuations of a farmer's assets upon which to base the debt which it is calculated he will have to

Farmers' Creditors Act

pay in the future. Land has no value to-day compared with what it had in the days when the debt was incurred. In 1929, when the depression set in, nobody knew how long it was going to last. Many farmers found that they needed credit, and they could not get it from the banks or the loan companies. Right here I want to make this statement, that I believe the banks and the loan companies have forfeited every right they ever had to do business in this country at any time, now or in the future.

Topic:   FARMERS' CREDITORS ARRANGEMENT ACT
Subtopic:   BOARDS OF REVIEW, TIME LIMIT FOR FILING PROPOSALS, ETC.
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CON

James J. Donnelly

Conservative (1867-1942)

Mr. DONNELLY:

Close them all out.

Topic:   FARMERS' CREDITORS ARRANGEMENT ACT
Subtopic:   BOARDS OF REVIEW, TIME LIMIT FOR FILING PROPOSALS, ETC.
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LIB-PRO

George William McDonald

Liberal Progressive

Mr. McDONALD (Souris):

Certainly.

Why did they lose faith in this country? I venture to say that when times are good again and land values high, they will want to be doing business again. I have been in the loan business for a long time, and I have known these loan companies to refuse to accept payment of loans without a three months' bonus, but they would gladly do it to-day. They missed their chance, and because they missed their chance, has the government the right to say that they shall get their money, or that the unsecured creditors of this country are the men who will take the loss?

I know as many farmers who are suffering from the injustice of this act as I do retail merchants, and I should like to cite a case or two.

A man sold his farm-at a high price, I admit. The farmer had been farming for many years, but he sold the farm and moved into town. A number of years went by, from 1929 to 1933. but he got no revenue from his farm. He was lucky to have a bank account to support him. After some years he wanted the farm back, and in the meantime the man who had bought it had never paid a dollar of principal on the mortgage on the farm. All the farmer wanted to do was to get his farm back, but he could not do so.

Another man sold his farm for $10,000 cash, and immediately bought another from his neighbour at half the price, paying no cash but taking over a mortgage of $5,000. He then proceeded to gamble away every cent of the $10,000. Five years went by and the mortgagee never got a cent from that farm. Finally, it was to be sold for taxes. The original owner at a hearing of a board of review offered the man $2,000 to get off the farm, but the board would not agree to it.

What time is this to make valuations and say that a man's debts shall be adjusted

according to the value of his land and other assets? I say it is not the proper time.

I can cite another case where the board made an adjustment by which the debtor was not to pay one single cent during 1937 except the share of crop to the landlord, and for seed from the municipality. Unsecured creditors were not to get any money until 1938. This man sold three carloads of grain and bought practically a new car for which he paid about $600 in cash. The unsecured creditors got nothing, and their accounts were reduced ninety per cent in some cases.

Many an honest farmer has loaned a farmer across the road $500 or more and given him seed wheat, and now he finds that these debts have been cancelled. The banks and the loan companies, as soon as they saw a depression was on, took chattel mortgages and every other form of security it was possible to get from the farmer. No wonder the young farmers are finding it difficult to-day to get credit. In view of the way this act has been administered, I can see no reason why anybody should extend credit.

Again I say that the loan companies and the banks, in our province at least, have lost the right, if they ever had any, to do business, and I hope they will not get the opportunity again. I say this as representing a farming constituency. I have every sympathy with the man who wants to pay his debts. There should have been a debt adjustment; there is no doubt about that, but like the hon. member for Grey-Bruce, I say the best men, the honest ones, are not the ones who are taking advantage of the act. I think the act will have to be continued, but let us have some justice in its administration. Why should the retail merchants and the unsecured creditors be the ones to help keep the farmer on the land? Let the whole nation do it; because when prosperity returns to the farmer the whole nation will benefit. The unsecured creditors will have to take a loss, and it will just be a memory. I figure that the act was a vote-catcher right from the start, and was not properly administered. I am sorry some criticism is due the government, as this is the third session of this parliament and it is the first time the act has been amended. I hope it will be made more workable, particularly in Manitoba.

Topic:   FARMERS' CREDITORS ARRANGEMENT ACT
Subtopic:   BOARDS OF REVIEW, TIME LIMIT FOR FILING PROPOSALS, ETC.
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CON

Alonzo Bowen Hyndman

Conservative (1867-1942)

Mr. HYNDMAN:

As I represent an agricultural constituency, and also the home of the Minister of Finance (Mr. Dunning)-

Topic:   FARMERS' CREDITORS ARRANGEMENT ACT
Subtopic:   BOARDS OF REVIEW, TIME LIMIT FOR FILING PROPOSALS, ETC.
Permalink
LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

Yes, you are my member t

Topic:   FARMERS' CREDITORS ARRANGEMENT ACT
Subtopic:   BOARDS OF REVIEW, TIME LIMIT FOR FILING PROPOSALS, ETC.
Permalink
CON

Alonzo Bowen Hyndman

Conservative (1867-1942)

Mr. HYNDMAN:

I should like to say a few words on this act. I agree wholeheartedly

Topic:   FARMERS' CREDITORS ARRANGEMENT ACT
Subtopic:   BOARDS OF REVIEW, TIME LIMIT FOR FILING PROPOSALS, ETC.
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193S

February 18, 1938