May 8, 1919 (13th Parliament, 2nd Session)

Sir THOMAS WHITE:

That is a frequent clause in company legislation and arises out of a decision-some of the lawyers in the House will recall it-under which it was held that if securities had been pledged*, and the amount of the loan paid off and the securities got back again, they could not then be sold, that they became extinguished by virtue of their redemption; hence this clause, which, I believe, is usually inserted. Supposing the Dominion had issued bonds with the intention of selling them outright but in the meantime had borrowed against them from the bank-which the Dominion now seldom does-and paid off the loan to the bank, and then desired to sell the securities, it is advisable that they should be able to sell them without getting fresh borrowing powers; in other words, that they should not be deemed to be extinguished. Frequently loans are effected for the purpose of carrying securities which it is intended to sell and repay the loan from the proceeds so obtained.