Hugh Boulton Morphy
Conservative (1867-1942)
Mr. MORPHY:
I have read how this remark was made, and Sir Edmund Osier denies that it was made in a casual way. He says that it was 'in a sense particular, because I made that statement,' the statement being that the method of obtaining money by stock subscription was not straight, and that it was being obtained by false pretenses. Mr. Fielding admits both of these conversations, but he does not remember what took place at them. He admits the conversations with the hon. member for Halton and the hon. member for West Toronto, but his mind is vague, hazy, and in no way too clear as to what took place. He admits that the conversations were about the bank. Whom are you to believe, leaving aside any bias, any 297
self-interest-the men who say that they do know what was said, or the man who says that he does not remember? The question of weighing evidence will appeal to the hon. member for North Cape Breton (Mr. McKenzie), being a judge of distinction and long experience, and I would like him to answer that after reading the evidence. Turning to the exhibits that have been filed with the evidence, I might mention that there are several letters which have been put in by my hon. friend the Minister of Finance (Mr. White). I am not going to encumber my remarks with these letters; they are already in, and can be found in the exhibits. But there is one letter from Mr. Leighton McCarthy that .1 desire to read and to comment briefly upon. It is as follows:
Home Life Building, Victoria, Street,
Toronto, October 8, 1906. Honourable W. S. Fielding,
Minister of Finance,
Ottawa.
My Dear Mr. Fielding,-I have been consulted on behalf of a number of subscribers to the shares of the Farmers Bank, and from the instructions I have received a number of the subscribers will dispute the bona fide character of the subscriptions. I have no time to-night to give a full statement of the grouhds of this request to you, but I beg to assure you that grave conditions have arisen which will require careful consideration before the Treasury Board would grant any certificate for the organization of this bank.
I therefore ask you to be good enough to stay any action which might be taken until I have had an opportunity of discussing this with you. If it is not asking you to hold it too long, I would prefer not having to go to Ottawa this week, but will go any day next week which would suit your convenience. Of course if there is no immediate prospect of your granting such a certificate my seeing you at an early date will not be necessary.
Leighton McCarthy.
Subsequently this wire was sent on the 11th October:
Toronto, Ont., Oct. 11, 1906. Hon. W. S. Fielding,
Minister of Finance,
Ottawa.
Please wire me assurance in reference to stay of certificate of Treasury Board mentioned in my letter of Monday night.
Leighton McCarthy.
Mr. Fielding wired back:
Ottawa, October 11, 1906. Leighton McCarthy, M.P.,
Toronto.
No application yet received for the certificate referred to. Please forward your representations immediately and they will be considered when application comes.
W. S. Fielding, Minister of Finance.
Hon. gentlemen will notice that is a promise on the part of the man whose duty it was to do so to consider the charges that Mr. McCarthy had made in his letter. On October XI, Mr. Fielding sent the following telegram to Mr. Leighton McCarthy :
Ottawa, Oct., 11, 1906. Leighton McCarthy, M.P.
Toronto, Ont.
No application yet received for the certificate referred to. Please forward your represent -tations immediately and they will be considered when application comes.
W. S. Fielding.
Ottawa, Oct., 11, 1906.
And on the same date, October 11, Mr. Fielding wrote to Mr. McCarthy:
My Dear Mr. McCarthy-
I have your letter of the 8th inst. and your telegram to-day on the subject of the Farmers Bank.
I wired you today that no application had been made by the promoters for the Treasury Board certificate, and suggested that you send at once any representations that you may wish to make, to which we shall give all due consideration.
W. S. Fielding,
Minister of Finance.
On the 12th of October, Mr. McCarthy wrote to Mr. Fielding as follows:
Toronto, Oct., 12, 1906. My Dear Mr. Fielding-
Many thanks for your telegram received last night advising me that no application had yet been received for certificate of the Farmers Bank and asking me to forward representations immediately when they will be considered. This will receive my attention.
I am obliged to you for the telegram.
Leighton McCarthy.
Then on October 19, 1906, there is a long letter from Mr. McCarthy to Mr. Fielding, which is as follows:
Toronto, Oct. 19, 1906.
Re the Farmers Bank of Canada.
My Dear Mr. Fielding-
I beg to enclose the special endorsement upon a writ of summons in the High Court of Justice for Ontario, which will he issued by: William A. Saxon, John Sproat, George Castle, Wm. McLean, Finlay McCallum, Robert Hume, Jas. Murray, Geo. Denoon, John McLeod, Jane Shuert, Wm. Harris, on behalf of themselves and all other persons alleged to be subscribers for shares of the capital stock of the Farmers Bank of Canada who may desire to come in and be parties to this action, against the Farmers Bank of Canada, Jas Gallagher, John Watson, John Ferguson, Alexander Fraser, Alexander Shepherd, Lown, W. R. Travers, C. H. Smith, A. G. H. Luxton and the Traders Bank of Canada, and W. J. Lindsay, and I respectfully request that the Treasury Board will stay any action upon the application of persons professing to act in the name of the Farmers Bank of Canada or in the name of the provisional direc-
tors of the Farmers Bank of Canada, for a certificate under section 15 of the Bank Act on the grounds alleged in the enclosed special endorsement and other grounds which may he disclosed upon the examination of the alleged subscribers for shares.
X have received information that the alleged subscribers for shares paid a large sum of money in cash and have signed notes for other large sums of money, and that the persons professing to act in the name of the bank have transferred notes and received the proceeds and that a deposit either has been made or will he made of the cash received and the proceeds of those notes or sufficient amount to make up $250,000.
I wish you to have the kindness to acknowledge the receipt of this protest against the granting of a certificate, so that I may advise the shareholders who are disputing their liability and I would he pleased to go to Ottawa upon any appointment you may make for the further consideration of this matter.
Leighton McCarthy.
The letter enclosed a writ against a number of individuals as well as against' the Traders Bank, issued by a gentleman in one of the most reputable law firms in the Dominion of Canada, a former member of this House, a gentleman well known to members opposite and with whom he had political affiliations, a man who would not make a statement lightly without just reason to believe it could be proven to the hilt. This gentleman sent forward the
writ as a warning to the Minister of Finance, and that writ contained an endorsement which is to be found at page 1006 of the Exhibits, and which is as follows :
This action is brought by the plaintiffs on their own behalf and on behalf of all other alleged shareholders of the Farmers Bank of Canada, who dispute the validity of alleged contracts to take shares of the capital stock of the Bank, and who allege that they were induced to subscribe for shares through fraud and misrepresentation, and who may request to be joined as plaintiffs.
And the plaintiffs' claim is, (1) For a declaration that the alleged contracts are void; (2) For the rescission of alleged contracts to take shares of the capital stock of the Farmers Bank of Canada; (3) For an accounting for the money and promissory notes received or alleged to have been received in the name and on behalf of the provisional directors of the bank; (4) for an injunction; (5) for a
receiver: and (6) for administration.
And the following are particulars of the Plaintiffs' Claim:
1. The Farmers Bank of Canada was incorporated by a Special Act of Parliament of Canada on the 18th day of July, 1904.
2. The defendants Jas. Gallagher, John Watson, John Ferguson, Alexander Fraser and Alexander Shepherd Lown, were appointed by the said Act to he provisional directors of the bank.
3. Amendments of the Act of Incorporation
were passed on the 20th day of July, 1905, and on the 26th day of June, 1906.
4. The amendment passed on the 20th day of July, 1905, is alleged to have been passed on the petition of the Farmers Bank of Canada; and the amendment passed on the 26th day of June, 1906, is alleged to have been passed on the petition of three of the provisional directors of the bank.
6. Stock books were opened in pursuance of the prospectus for the purpose of entering subscriptions of persons who might be induced to subscribe for shares of the capital stock of the bank.
7. The applications for subscriptions for shares and proxies appointing the secretary of the provisional board, and forms for receiving subscriptions for shares were printed and put in circulation.
8. Forms of bank notes in the name of the Farmers Bank of Canada were also either printed, lithographed or engraved for the purpose of inducing persons to subscribe for shares.
9. The printed prospectus, the application for stock, the forms for subscriptions, and the said forms of bank notes in the name of the Farmers Bank of Canada, were delivered to agents and solicitors to procure subscriptions for shares.
10. The agents and solicitors produced and used the prospectus, the applications and the forms, in their canvass for subscriptions for shares.
11. The plaintiffs and others subscribed for shares, and the plaintiffs allege:-
(1) That the provisional directors who professed to act- for and in the name of the bank, had no lawful power or authority to receive subscriptions for shares or to accept them; and
(2) That the subscriptions for shares which were procured from the plaintiffs and others were procured through fraud and misrepresentation, and the plaintiffs allege amongst others, the following particulars of fraud, namely :-
(1) That the agents in procuring the subscriptions for shares falsely represented that persons had subscribed for a larger number of shares than they had in fact subscribed for, and the following are examples of such false representations, namely-
(a) That Robert Noble whose name i.s. entered in the prospectus as one of those who had consented to be a director, had subscribed for shares to the amount of $10,000, whereas he had in fact only subscribed for shares to the amount of $3,000;
(b) That John Sproat had subscribed for shares to the amount of $10,000, whereas he had in fact only intended to subscribe for shares to the amount of $1,000, and that he was induced to sign an application in the belief that it was tilled up for $1,000, and that the general manager afterwards claimed that it was a subscription for $10,000, and the said John Sproat then repudiated the entire subscription ;
(d) That James Murray had subscribed for shares to the amount of $10,000, whereas he had in fact only subscribed for shares to the amount of $1,000:
(e) That Dr. Stewart was subscribing for shares to the amount of $10,000, whereas he was not in fact subscribing for any shares; and other false representations of a similar character were made by the solicitors and agents in reference to alleged subscriptions of other persons.
297i
Mr. Fielding and the Treasury Board had that document in their hands when Travers came down to get this certificate; they had read it and all these charges were before them, and yet there is not a line in Mr. Fielding's evidence, from one end of it to the other, in which he swears that he ever asked whether these charges were true or not. There is a statement in Mr. Fielding's evidence to the effect that he asked Travers to give him a letter that these things that were said about him were not true, but there is no evidence that Mr. Fielding ever held this document up before Travers and said: Travers, you have
to wipe these charges out before you can get a certificate from me.
On the motion of Mr. Morphy, the debate was adjourned.