May 22, 1941 (19th Parliament, 2nd Session)


Joseph Thorarinn Thorson



The best explanation I could give would be by reading the general explanatory note as it appears in the bill:
The main purpose of the bill is to permit the equitable operation of the principle which has governed the company since its inception, namely, the principle that its business should be controlled by farmers actually engaged in farming. By 1911, chapter 80, by which the company was incorporated, only "farmers or owners or lessees of farms and the wives of such persons" were eligible to hold shares in the company otherwise than in cases authorized by a two-thirds vote at a shareholders' meeting (section 6); no shareholder was entitled to hold more than forty shares (section 5); and each shareholder had only one vote no matter how many shares stood in his name (section 8). The limitation on the number of shares a shareholder might hold was increased to one hundred by 1917, chapter 79, section 4, and by the same statute power was given to the company to substitute for a general shareholders' meeting a meeting of delegates chosen by local groups of shareholders, each delegate being entitled to one vote (section 6). Apart, however, from the exceptional cases provided for in section 6 of 1911, chapter 80, no transfer of shares held by farmers and their wives can be made to non-farmers. This restriction on transfers has seriously affected the value of shares belonging to farmers who have died or have ceased during their lives to be actually engaged in farming. The result has been an increasing proportion of the total capital of the company in fact the property of non-farmers whether registered as owners of the shares or not and consequently of persons who are not entitled to take part in the direction of the business of the company.
The provisions of the bill are chiefly directed to the correction of the situation thus created by permitting the creation of two classes of shares, one in the nature of preference shares on the ownership of which there is no occupational limitation but which do not entitle the holders to take part in the management of the company, and the other in the nature of common shares capable of being held only by farmers and carrying the right to take part in the election of delegates and to act as delegates.
Motion agreed to and bill read the first time.

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