Hon. Douglas Abbott (Minister of Finance):
Yesterday the hon. member for Winnipeg North Centre (Mr. Knowles) directed a question to me concerning the activities of small loan companies. Specifically, he asked whether the government was permitting these small loan companies to expand their facilities and operations despite the government's policy of restricting credit generally.
In answer to my hon. friend I may say that the small loan companies are subject to the same restrictions as everybody else under the consumer credit regulations and the voluntary program of bank credit restraint which the chartered banks have put into effect. To the extent, however, that, in order to expand their operations, such companies have raised additional capital by means of stock issues or the sale of debentures to the general public, thus drawing on the real savings of the public, they are not subject to any restrictions any more than other individual corporation or business enterprise is. It is the inflationary expansion of credit which government policies are designed to check.
Subtopic: QUESTION AS TO COMPANIES CHARGING HIGH RATES OF INTEREST BEING PERMITTED TO EXPAND