June 2, 1914 (12th Parliament, 3rd Session)


Hugh Boulton Morphy

Conservative (1867-1942)


I have a note with regard to error of judgment and will come to it later on. I desire at present to compliment the Prime Minister and the Minister of Finance upon the manner in which they have introduced this subject. They have brought it before the House in a way with which the most captious member on the opposite side of the House could find no fault, there (being in it no (bitterness, no intention to wound, to sting, to make poli-

tical profit, but simply to do their plain duty as the members of the Government. So I hope that anything I may say by way of criticism a little later will be taken in the same spirit. Hon. gentlemen opposite need not go around with a chip on their shoulders ready to get angry if we use Mr. Fielding's name. Mr. Fielding would not feel annoyed at strong, trenchant criticism and I do not see why hon. gentlemen should be ready to fly out. The late Minister of Finance was human. We on this side admit his many great qualities; that only shows that he was human, and to err is human. With regard to the error of judgment, what I complain of is that the Finance Minister of the late Government and the Treasury-Board erred in not pursuing the question, so that they would get facts on which to base their judgment, as I will show by quoting the evidence of those who testified. On page 3 of the report of the Commission of Inquiry we find the evidence of Mr. David Henderson, the hon. member who sits in front of me, then a member, who described exactly what took place. About eight days before the issue of the certificate he had a conversation with Mr. Fielding, part of which is given in his evidence [DOT] Mr. Hodgins who had charge of the investigation asked:
David Henderson, sworn, examined by:-
Q. You are a member of Parliament?-A. Yes, sir.
Q. And you were a member of Parliament in 1906?-A. Yes.
Q. Representing the county of Halton?- A. Yes, sir.
Q. You became somewhat interested, I understand, in some matters connected with the organization of the Farmers Bank; I mean, interested to the extent of hearing and knowing about them?-A. Yes, I was present; do you mean the granting of the charter?
Q. About that time?-A. Yes, I was familiar with it from its inception.
Q. You never were financially interested one way or the other?-A. No, in no way; not personnally.
Q. Your interest was in what sense?-A. Simply that I represented a county in which a very large amount of money had been subscribed in stock, and in that way I felt interested for the people I represented.
Q. This being called the Farmers Bank?-A. Well, it was so called, though practically it was not organized farmers.
Q. Were you a member of the Banking Committee of the House of Commons?-A. Yes, sir.
Q. Do you remember the fact that an application for extension was made on two occasions, in 1905 and 1906?-A. There were two occasions at any rate, if not three; two occasions; perhaps the first one would allow a year to apply for a certificate, and there would be two applications after that.
Q. The last application that I know of is contained in the Statute, 1906, which gave six months?-A. Yes.
Q. Do you remember that coming up in the Banking Committee?-A. Yes, it was limited to six mouths.
Q. Do you remember why?-A. Why it was limited?
Q. Yes?-A. We had in the Banking Committee hesitated a good deal about extending the time; the Finance Minister objected very much, and I confess I concurred with him, usually supported him in that; and on the second occasion when they came back, we simply gave them six months, thinking as they had had two years it was not well to keep the matter dangling before the people longer, and the time was limited because we thought they should have been more active.
Q. Was anything known as to who was interested in the bank at that time?-A. Well, I knew nothing about it, I think, beyond the names of the provisional directors as published.
Q. Did any one appear beiore the committee in order to urge this extension?-A. Now, I am not sure, I do not recall.
Q. Do you know who suggested limiting the time to six months?-A. I could not speak at this date; it may have been Mr. Fielding, or perhaps myself. I had adopted a policy of that kind-we had

the Committee had-adopted a policy of that kincl J think, with some previous charter.
Q. Was any inquiry made into the particular circumstances of the difficulty these people had in organizing?-A. I am not aware that there was any particular inquiry, the simple fact they had not succeeded in getting all the money; they asked for more time.
Q' They had six months, from the 18th July, 1906 ; probably about six months from the date it came up?-A. It was six months from the expiry of the previous year.
Q. After that, did you take any steps in connection with the organization of the Farmers Bank or with reference to It?-A. No, I think I could say none whatever.
Q. That is, you had nothing to do with the matter from that time.-A. No.
Q. Did you make any communication at all at any time to the Finance Department with reference to it or to any one connected with the Finance Department?-A. I had a conversation with the Hon. Mr. Fielding with reference to their mode of raising money.
Q. Had you known about that yourself'___A
I incidentally learned it a few days before I went to him that they were discounting the notes which had been taken from shareholders.
Q. They were discounting the notes; did you know anything more than that?-A. I was shown several notes made by shareholders, farmers in my county, and I saw on the back of these notes the endorsement of the provisional directors.
Q. That would be several names, would it?_
A. Yes, there were several names.
Q. How did you see those?-A. A few days before the House met; the House met that year, I think, on the 22nd of November-a day or two days before I had occasion to go to Milton, from where I lived in the village of Acton, and on my way I met the solicitor of a number of farmers who had contested their liability to pay their stock, feeling that something was wrong.
Q. Who was the solicitor you met?-A. Mr. Laidlaw.
Q. Where were you going from when you met him?-A. I was going from home, from the

village of Acton, by way of Georgetown to Milton.
Q. By rail?-A. Yes.
Q. Did you meet him?-A. Just met him casually in the car.
Q. Had he the notes?-A. Yes, he showed them to me.
Q. That would fix the time at which you acquired your first knowledge?
Mr. Commissioner: He has not mentioned the year yet.
Mr. Hodgins: Can you fix the date at all to that?-A. I can fix it by reference to other matters, I said the House met that year on the 22nd November.
Q. What year was it?-A. 1906 ; the House met that year on the 22nd November, and it would be a short time before that, perhaps not more than a few days.
Q. What communication did you make then, and to whom, in consequence of what you saw and heard from Mr. Laldlaw?-A. I casually met Mr. Fielding and informed him that I had seen notes of shareholders in the possession of Mr. Laidlaw, endorsed by provisional directors, and presumably it was for the purpose of raising money to make the deposits, as the time had nearly expired. Our conversation lasted only for a few minutes and was along that line.
Q. Can you give us in any more detail what was said by you and by him, or is that what you have told us the general tenor of it? A. By Mr. Fielding?
Q. Yes? A. I mentioned the circumstance which I have detailed to you, and Mr. Fielding, I think, seemed somewhat surprised; at any rate, he answered me by saying that he would hold back the certificate as long as he could.
Q. You had no further conversation with Mr. Fielding at that time? A. No. I have given you just the conversation we had; I don't think it lasted more than two or three minutes at the outside.
Q. How soon after your coming down to Ottawa was that? A. I would asspme, I have no absolute data, but I would assume it would be within three or four days at the furthest, within a few days; I may mention this as fixed in my memory, I knew it was before the granting of the certificate, because Mr. Fielding told me he would hold it back as long as he could, and it was after the House met; the House met on the 22nd, the certificate was granted about the 30th, so it was between the 22nd and the 30th; I would suppose I went to Mr. Fielding possibly within a day or two at the outside after I came down.
Q. What occurred then, and what further was said? A. He stated that Mr. Travers had been down and he had brought his money; that he had asked him, that he had put it up to him- he did not say definitely what he had put up to him; he left me to assume on account of our conversation within a few days before that it was what I had told him-and that Mr. Travers had denied it, and he asked him to give him a letter to that effect and he said he did so; and he says, 'I then gave him the certificate.'
Q. You have known Mr. Fielding for a long time? A. I have known him for over 15 years.
Q. Were you and he friendly? A. Very friendly.
Q. In 1910? A. Yes. On that occasion I went to Mr. Fielding's room in the House of

Commons, to his office, to see him personally. I had information that there was something of a very peculiar character which seemed to me would materially affect the bank's interests, and its standing, and I felt, as I said before, very naturally worried and anxious about it and I called on Mr. Fielding and told him what I had learned. He was familiar with the facts himself, as much so as I was, and after chatting a few moments about it he turned to me and said, ' Well Henderson I don't know why you should worry over this; you are not responsible for it and besides you did warn the Government.'
That is very strong language. I desire to go a little farther along the
1 a.m. same line so as to be fair to those who then constituted the Treasury Board:
Mr. Commissioner: Why did not you put in
writing your warning? A. Well, we do not always put everything in writing that we say to a minister. Sometimes it is safer not to put it in writing; that is my experience. It did not occur to me at the moment to put it in writing, besides I think I simply met him casually; sometimes these things are given out to the public, but into other hands sometimes to the detriment of the member of Parliament. They saw it was undue interference on my part. However, my own impression is I met Mr. Fielding casually, this matter was in my mind, and I just simply mentioned the matter to him, told him what I knew about it. Of course being Finance Minister I did not require to put it in the shape of a warning, because he knew the effect of a thing of that kind. It did not occur to me at the moment the necessity of putting it in writing; I thought that he was the man that if he had the knowledge that that would possibly be as far as it would necessary for me to go, he having control practically of the issue of this certificate, and being the chief member of the Treasury Board.
It will be seen that the Minister of Finance and the Treasury Board had full notice of the events leading up to the issue of the certificate which would have caused prudent men to have acted differently from the way in which these gentlemen acted. On page 51 we find the evidence of Sir Edmund Osier:
Mr. Hodgins: You were a member of the
House of Commons in 1906? A. Yes.
Q. You remember the time at which the certificate was granted to the Farmers Bank? A. Yes.
Q. Had you an interview on the subject ot the Farmers Bank at all with Mr. Fielding, the Finance Minister? A. Yes.
Q. Was that before or after the certificate was granted? A Before the certificate was granted.
Q. Was It at Ottawa? A. Yes.
Q. We are told that the House set about 22nd of November in that year? A. I do not recollect.
Q. We will have to prove that in some other way; was it after the session began in 1906? A. Yes.
Q. What was your interwiew with him, what occurred during that interview? A. I told Mr. Fielding that I had knowledge that the money that was deposited there was practically ob-

tained by false pretenses, that it was not bona fide money obtained by stock subscriptions.
Q. What money did you refer to? A. The money that was deposited with the Government pending the issue of the certificate.
Q. Did you go any more into detail? A. No, I told him that I knew, as a matter of personal knowledge that it was not a straight

Q. You were speaking of the way in which the money was raised by the discount of notes? A. Yes, to my knowledge.
Q. Of what notes? A. From discounting the notes of the subscribers.
Q. Did you intimate that to Mr. Fielding? A. Yes.
Q. Or was it in a general way that you made the statement? A. Oh, it was in a general way, but in a sense particular, because I made that statement.
My hon. friend the junior member for Halifax Will have to remember that, while the hon. member for West Toronto said it in a general way, he also says that he said it in a sense particular, because he made the statement that the money was obtained by false pretenses, and that it was not just a passing and casual conversation. It will not do for my hon. friend to waive it to one side and say that he casually met Mr. Fielding and made this remark to him. What was said is a matter of evidence. You cannot actually say that a man is guilty of false pretenses. It is too serious a charge to make in a casual way about a man. Fraud, crookedness, false pretenses cannot be charged casually. I do not think any sane man would believe the hon. gentleman's statement about these matters only having been casually mentioned.

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