April 17, 1905 (10th Parliament, 1st Session)


George Eulas Foster

Conservative (1867-1942)


That does not meet the strongest objections. Read section 16, and you will see how almost unlimited is the scope of investment.
The company may invest any money forming part of its own capital or reserve or accumulate the profit thereon in any of the securities mentioned in section 11 of this Act

That is all right. Those are really trust securities.

ror in the bonds or debentures of any incorporated building society or loan company-
Then the hon. gentleman's amendment provides for the sanction of the Treasury Board. That puts an additional guard on that part of it, so far as incorporated building societies or loan companies are concerned, but if you go a little further you will find it broader still :

or on the security of real estate in Canada
or iof any interest in such real estate-
That is an odd clause. There are interests and interests. Some interests would be a first mortgage which would affect the whole of the real estate, but if you are allowed to invest in even a thousandth part of any interest, that would be very dangerous. It will be very dangerous to point out to a board of directors that they can invest in such a security as that because it will tend to do away with their responsibility. They may say parliament has declared that this is a security in which you may invest, and therefore, we shall invest in it.

or on the security of the debentures, bonds,
stock and other securities of any chartered bank

They may be first, second or third class bonds, And here is the widest discretion of all :

or company incorporated by or under the
authority of the parliament of Canada

That is pretty stiff, because there can be almost anything incorporated in the parliament of Canada if it is properly taken hold of and insistently managed : "

or of the legislature of any former, present
or future province of Canada, as the directors deem expedient.
There are, we all know, all kinds of incorporations even in the most deliberate of deliberative assemblies. You will find companies incorporated which are certainly not very staunch or strong, and there will be no board of directors of any company incorporated in this country who will not be told that if they wish they can invest in such securities such as mining stocks or the stock of a company incorporated for the purpose of extracting gold from the sea or the air. All these would be perfectly safe investments, in the opinion of this parliament, for the capital funds of this company. The directors might invest in a dying machine company or a company which has patents under claims which may be found perfectly untenable.

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