1911-03-15

[Stage Direction]
Sir WILFRID LAURIER moved;
That the recommendation of the Hon. the Speaker of the House of Commons, laid on the table of the House on the 21st day of February last, with reference to the appointment of Mr. Arthur W. Glasier as assistant clerk of the Committee on Agriculture and Colonization, be concurred in.
Mr. BORDEN (Halifax).: I believe there are a number of these references. Perhaps the right hon. gentleman will let that motion stand until to-morrow.


Sir WILFRID LAURIER.: Very well.



QUESTIONS.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)

Mr. LENNOX:: 1.	Who is the Indian agent of Beausoleil reserve, Christian island?

2.	Wheu was lie appointed, on whose recommendation, is he a practical farmer, what evidence had the department of this at the time of appointment; was it made a condition of his appointment that he should reside upon the reserve and instruct the Indians in agriculture, cattle feeding and the like, and has he resided on the reserve at any time? If so, during what periods, and is he residing upon the reserve or the island now?
3.	In order to attain his object, did the government erect a residence for the agent upon the reserve, and at what cost; has the Indian agent ever resided in this house, and by whom is it occupied?
4.	Where does the Indian agent reside, and when did he last visit the reserve?
5.	Who was the immediate predecessor of the present Indian agent, and for what alleged cause was he retired?
6.	Does the government propose to insist that the agent shall reside upon the reserve?


Mr. OLIVER:: 1.	Mr. H. G. Todd,
2,	3 and 4. He was appointed on the 6th July, 1910. His name was suggested by the Indians of the band, who stated that upon the reserve and give the Indians practical advice in farming. For the first two months after his appointment he spent about half the time at the island. Early in the winter he was taken ill and spent five or six weeks at his own home unable to go out. Since then he has visited the island, spending more than half of his time there instructing the Indians, and he has made arrangements to move permanently to the island. During the time the agent was ill, he allowed a man and his wife to occupy part of the house in order to look after his
household goods while he was absent. This was for the winter months only. A residence was erected for the agent on the reserve at a cost of $3,470.
5.	Mr. Charles McGibbon. He was retired because he had no qualifications to-give the Indians practical advice on farming.	.
6.	The government proposes to insist that the agent shall reside upon the reserve.


CANADA AND SOUTH AMERICA STEAMSHIPS SERVICE.
Mr. DANIEL:: 1.	Is it the intention of the government to subsidize a line of steamers between Canada and South America, more especially to Brazil and Argentine? If so, will tenders be called for the performance of this service?
2.	Is it the intention of the government to pay subsidy on any steamer flying the Norwegian or any foreign flag, when British or Canadian steamers are available?


Sir WILFRID LAURIER:: 1.	The matter is now under consideration.
2.	No.


EXPORTS OF MICA.
Mr. BEST:: What quantity of mica was exported from the several provinces of Canada in the years 1900 to 1910 inclusive, and to what countries was it sent?


Mr. PATERSON:: The quantity of mica exported from Canada, by countries during the fiscal years from 1900 to 1910 inclusive, was as follows:
Countries to which exported.	1900.	1901.	1902.	1903.Great Britain	Lbs. 14,429	Lbs. 211,833 4,734 700	Lbs. 115,388 11,000 2,032 100 868,645	Lbs. 658,081 5,000 1,150F ranee	Germany	Mexico 	United States	1,064,924	761,991	729,489
1,079,353	979,258	897,165	1,393,720
Great Britain					
	1904. 208,889	1905. 436,333 22,317	1906. 272,454 18,615	1907 (9 mos.)' 234,434 9,050
F ranee					
Belgium. 		2G0 620			
Germany					
Holland			3,000		
Mexico				100 1,038,465	
	595,558	555,013		1,148,613
				
	865,327	1,016,063	1,329,634	1,392,097
				

Countries to which exported.
Great Britain	
Newfoundland	
France	
Germany	
Mexico	
Switzerland	
United States	
Total


MR. DUNCAN GRAHAM.
[Stage Direction]
Mr. SHARPE (Ontario;:
1.	What was the date of the appointment of Duncan Graham, of North Ontario, as Indian agent?
2.	What was the amount of his salary?
3.	Who was appointed to succeed Duncan Graham, what was the date of his appointment and the amount of this salary?
Mr. OLIVER:: 1.	He was appointed by order in council of 21st November, 1908.
2.	$400 per annum.
3.	Murdoch MacKenzie, by order in council of the 12th November, 1910; $400 per annum.


COAL MINING RIGHTS IN SCHOOL LANDS.
Mr. SHARPE (Lisgar):: 1.	To whom were the eight leases issued last year for coal mining rights in school lands?
2.	How many acres were covered by each
lease?
3.	What is the respective revenue from each lease?
4.	How is the revenue calculated, by the ton of ore mined, or is it calculated at so much per acre?
5.	How much ore has been mined under each lease to date?


Mr. OLIVER:: 1. The eight leases of school lands for coal mining purposes issued during the fiscal year ending the 31st March, 1910, were issued to the following persons:	S.W. i
11-39-22, W. 4th, coal berth 54, 160 acres, to William L. Waines; Pt. of 23-9-13, W. 4th, coal berth 55, 120 acres to Jonathan J. Mills; Pt. of 29-8-4, W. 5th, coal berth 56, 160 acres, to the McGillivray Creek Coal and Coke Company, Limited; All of 29-6-2, W. 5th, coal berth 58, 640 acres, to D. Conn and William Kerr; L.S. 4 of 29-10-16, W. 5th, coal berth 59, 40 acres, to George C. Millar; All of 11-10-22, W. 5th, coal berth 60, 636 acres, to the Chinook Coal Company, Limited; Pt. of 29-10-16, W. 5th, coal berth 61, 598 acres, to J. G. Douglas; N. W. i of 29-Mr. PATERSON.
1908.	1909.	1910.Lbs.	Lbs.	Lbs.245,779	190,430	42,201411,967 9,076 100	5,474	3,886
20
034,570	338,824	829,340901,492	534,728	875,451
16-21, W. 5th, coal berth 62, 160 acres, to J. and S. Henderson.
2.	Information included in No. 1.
3.	The revenue from each of the above leases to date is as follows: Coal berth 54 -$160; coal berth 55-$240; coal berth 56 -$320; coal berth 58-$1,280; coal berth 59 -$80; coal berth 60-$1,272; coal berth 61 -$598; coal berth 62-$160. These amounts cover the rental only, there being no royalty, as no coal has so far been mined.
4.	The revenue from coal leases of school lands consists of rental at the rate of $1 per acre, and royalty at the rate of 5 cents per ton on the coal mined.
5.	No coal has so far been mined.


FAVOURED-NATION TREATIES.
Mr. ARMSTRONG.: Before the orders of the day are called, I wish to ask the first minister a question. An article appeared in the Toronto ' Globe ' of Monday last in reference to the Colonial conference, one paragraph of which I will read:
When Sir Wilfrid Laurier goes to the Imperial Conference in May next, he will take up with the imperial government the question of the revision or abrogation in so far as Canada is concerned of the favoured-nation treaties with the Argentine Republic, Austria-Hungary, Bolivia, Colombo, Denmark, Russia, Spain, Sweden, Venezuela and Switzerland.
I would like to ask the first minister whether that statement is correct, and whether it is his intention to place before the House a list of the proposed changes that he intends to suggest on various matters, or the propositions which he intends to lay before the Colonial conference?


Wilfrid Laurier: Such a statement as that which has been read by my hon. friend has not been authorized by me. I never said anything about those treaties except what I have stated in the House.


LORD STRATHCONA AND CANADIAN ASSOCIATED PRESS.
Mr. FIELDING.: I have received a telegram which I think the sender must have intended to be placed before the House, be-

cause it has reference to a matter which was discussed a day or two ago by the hon. member for Kootenay (Mr. Goodeve) concerning a certain expression attributed to Lord Strathcona, and for which the hon. member for Kootenay called the Canadian Press Association to account. The object of this telegram appears to be to show that the Canadian Press Association was not at fault, and if there is no objection, I will read it to the House. It is addressed to myself:
Toronto, March 15, 1911.
Canadian Associated Press not responsible for error attributing expression of opinion on reciprocity to Lord Strathcona. Cable in question is London ' Standard,' and is cabled as such.



PRIVILEGE-MR. NORTHRUP.

Mr. NORTHRUP.: I wished to bring a matter to the attention of the House when the orders of the day were called, and I dropped a line to the hon. membe? for North Cape Breton (Mr. McKenzie) asking him to be in his place at this time. As he is not in his place, I will let the matter stand until to-morrow, and I again request that he be present then.



INQUIRIES FOR RETURNS.

Mr. JAMESON.: I wish to ask the Minister of Militia and Defence (Sir Frederick Borden) when the return relating to the Bear river rifle range will be brought down, in response to an Order of the House passed on February 15th last, asking for all the correspondence.


Sir FREDERICK BORDEN.: The return is being made out.


Clarence Jameson: Also correspondence in regard to the Deep Brook wharf, ordered on the 27th February.


Mr. PUGSLEY.: I will make inquiry with regard to it.


Clarence Jameson: I would like to ask the hon. Minister of Marine (Mr. Brodeur) with regard to the return relating to Barrington Passage.


Mr. BRODEUR.: I made inquiries about the return which my hon. friend is asking for. The papers are somewhat voluminous but they are being copied.
WAYS AND	MEANS-RECIPROCAL



TRADE WITH THE UNITED STATES.

[Stage Direction]
Mr. FIELDING moved that the House go into Committee of Ways and Means.
Robert Laird Borden: Mr. Speaker, before you leave the Chair, I would like to bring to the attention of the government certain utterances by the President of the United States, as reported in the press. Speaking at Atlanta, Ga., on the 10th day 157
of March, he is reported to have used these words:
When we entered upon the negotiations I asked the Secretary of State and his commissioners to offer free trade in everything, but this Canada could not grant us, because slie has a protective system and she was afraid of the competition of our better-organized industries.
I would like to ask whether or not this is a correct statement, and I would like to call attention to this further circumstance: We have not, in respect to these negotiations, any information in this House as to offer or counter-offer one way or the other. In that respect the information with regard to these negotiations is very much less than the information which has usually been given to the House when treaties or arrangements of this kind have been brought down. If that is a correct statement of fact the House and the country are entitled to know it, and I think the House and the country are also entitled to know what other oral negotiations in reference to these matters took place. It is not desirable that we should have a one-sided or partial statement. If the President of the United States feels himself at liberty to make this part of the oral negotiations public, I see no reason why all of the oral negotiations should not be disclosed to this House. They would certainly, it seems to me, have been disclosed to this House and the country if they had been conducted in writing. They were not conducted in writing, apparently, but nevertheless they are equally important, and it is equally desirable that we should have the information. I should like also to ask what is the understanding of the government with respect to one further matter. Is Canada, on the one hand, or the United States, on the other, under the terms of this arrangement, at liberty to grant or to continue bounties, or to impose export duties on all or any of the articles and products which are included in the agreement? I mention that because some question has arisen in the discussion before the Committee on Ways and Means in the United States Senate in respect to a matter closely touching that particular point, and I would think it only right that we should have the view of the government with respect to that particular question.


William Stevens Fielding: Perhaps I may be permitted first to answer the last question that my hon. friend (Mr. Borden, Halifax) put. There is no agreement, understanding or anything of the kind as between the Canadian government and the United States that is not set forth in the documents in the possession of the House. That is my best answer to my hon. friend regarding bounties, countervailing duties, export duties or anything of the sort. The document speaks for



itself. With regard to the other question, my hon. friend quotes from the President of the United States as follows:
When we entered upon these negotiations X ashed the Secretary of State and his commissioners to offer free trade in everything, but this Canada could not grant us, because she has a protective system and she was afraid of the competition of our better-organized industries.
That statement may be entirely correct, and I have no doubt is, as to the instructions that the President gave to his officials. But, as to what actually occurred in the conference, the matter did not advance to a position which would enable these gentlemen to make such a formal offer in that way. At the very earliest stage in the negotiations we certainly gave them to understand that we could not undertake to have any free trade in manufactures, speaking generally. There are certain articles which are on the free list and which were not the subject of discussion, but speaking generally, we gave them to understand that we were not prepared to deal with them on the basis of free trade in manufactures. That circumstance was clearly expressed by us at the beginning and no formal offer such as that suggested was ever made. Yet the statement is no doubt substantially correct as to the willingness of the President of the United States. I do not agree with my hon. friend that the information furnished as to the proceedings of the conference differs in any way from information furnished under similar circumstances at other times.



WAYS AND MEANS-FARMERS' BANK.

['But the depositors are the people who are suffering.\nOn motion of Mr. Edwards, debate was adjourned.\nOn motion of Sir Wilfrid Lauxier, House adjourned at 12.07 a.m. Thursday.', 'Thursday, March 16, 1911.']
Mr. DAVID HENDERSON (Halton).: Mr. Speaker, I propose to bring to your attention a matter which I judge to be of sufficient importance to engage the attention of the House for a short time. I refer to the failure of the Farmers' Bank. This question is one of very deep interest to myself, inasmuch as my constituents, whom I more particularly represent here, are very deeply interested. In the small county of Halton, perhaps one of the smallest counties in Ontario, there was subscribed to the stock of this bank $196,200, involving a liability to these shareholders of $392,400 if the double liability of the shareholders should be exacted. Apart from that, there were deposits in two agencies in the county of $69,581, making a total possible loss- and I say possible loss, because I have at the present time very little hope indeed that much will be saved out of this wreck- of $461,981. In a small county like that hon. gentlemen can readily understand that to the farmers who are most deeply interested, they being chiefly the subscribers to the stock, it will almost mean a panic; in fact, if no redress is obtained the county will be paralysed by this loss. The bank Mr. FIELDING.
was called the Farmers' Bank, a name well chosen to enlist the sympathy of the farmers. The farmers were proud to have a bank taking their own name, and to my mind this was perhaps the strongest reason why these men so largely fell into line and subscribed so liberally to the stock. The farmers, as I said before, were the chief subscribers to this stock. There were others, some business men, some professional men, but chiefly those engaged in agricultural pursuits undertook to float the stock of this institution. Some of those farmers will be able to stand the loss, I have no doubt, but there are many to whom it will mean the loss of the savings of a lifetime, and when the loss falls on old men and old women, who have invested their spare means in this way the matter is one for very serious consideration.
I fear that a mortgage will have to be put on the farm in order to enable them to meet their obligations, and the trouble is that many of these people are t-oo far advanced in years ever to redeem that mortgage. Living in this small county there are four directors who are farmers. One of these was placed on the board only at a late date, and to my mind he could not in any way be held responsible for what brought about the wreck of this bank. The other three were, I believe, directors from the organization of the bank, and these four directors together stand to lose $98,200. The question I wish to discuss is: who is responsible for the trouble that has been brought upon these people. Are the shareholders responsible? No, I look upon them as innocent. They were farmers following their regular pursuits, induced by. I believe, largely the name of ' Farmers' Bank ' to engage in this undertaking. They did it in perfect good faith, they thought the matter was perfectly safe. They nominated the directors of the bank, and I believe also appointed the general manager at a meeting held about the 26th November, 1906, a few days before the certificate was given to put this bank into operation. We must bear in mind that until the certificate was granted these directors had very little power indeed. The provisional directors secured the subscriptions of stock and I believe they paid in to the Attorney Genera! of the Dominion a sum of $250,000 in order to secure this certificate. But beyond that, so far as I know, the directors of the bank had no power to spend any money, and I am not aware that they legally spent any other money, although I believe there was some money paid out, not in accord with the terms of the Bank Act. I say that apart from this $250,000 which was paid into the Minister of Finance for the purpose of securing a certificate to enable this bank to go into operation, I do not think the directors had anything to do in the way of expending money. They could do

no business, they could not- borrow, they could not lend in the name of the bank, and consequently the shareholders up to this time felt a great deal of security in as much as no certificate had yet been granted to do business. All the power they had, to my mind, was to complete the organization up to that date. Without the certificate the shareholders money would have been intact; every dollar they had paid in would to-day have been there because the directors had no power to pay it out. The $250,000 paid into the Receiver General would have been intact had the bank gone into operation and be perfectly safe in the hands of the Minister of Finance and could have been returned and paid back to those who subscribed the money, and thus no loss would have accrued. No branch bank could have been opened until authority was given by the Treasury Board to start business; there would have been no liability to depositors, and that is one of the serious matters connected with the whole affair, namely, that the depositors innocently believing the bank was organized on a sound basis came forward readily and placed their money on deposit in the various branches that were opened throughout the country. Only two of these were in the county of Halton, but I think there must have been some 20 or 30 throughout the province, and the sum of $1,281,774 was deposited. Had the certificate never been granted by the Treasury Board the bank could not have gone into operation. There could have been no such thing as the deal in connection with the Keeley mine, which was one of the unfortunate circumstances which brought the bank to ruin and neither could there have been a Trust Company deal, and T do not look upon that with very much favour. Had the certificate not been issued there would have been no bad debts, there would have been no double liability for the shareholders to meet, and to-day the shareholders would have been in a comparatively happy position.


Mr. LOW.: 
Thomas Andrew Low: 
David Henderson: If the hon. gentleman will bear with me for a few momenta I will be very happy to tell him. I said that this $250,000 must be paid out of cash actually paid on stock. If my hon friend _ reads the Bank Act he will find there is no doubt about that, and it was the duty of the Treasury Board to ascertain that that was an actual fact. If the Treasury Board did not do so they failed in their duty because that was one of the things it was necessary for them to know before they could issue a treasury board certificate and launch this bank on the country. I have perused the minutes of the annua] -meeting of the bank and the minutes of the directors' meeting in the early stages of the bank's history, and I have failed to ascertain that either the shareholders or the directors gave any man authority to ask the Treasury Board for a certificate, and I think the authority should have come from that direction. The man who asked the Treasury Board for certificate was the man who had been appointed as managing director. On the 27th of November, Mr. Travers as general manager, by a letter written from Toronto, applied to the Minister of Finance for a certificate to enable him to proceed to open the bank and to d-o an ordinary banking business. That letter was nodoubt received by the Minister of Finance on the 28th of November, and on the 30th of November the Treasury Board granted the certificate. Evidently very little trouble or time was taken to find out the bona fides of the whole matter, and whether this money was really the money of the stockholders or from what source it came. Now, the certificate granted to Mr. Travers enabJed him to do practically as he pleased with the funds of the bank; it enabled him to play ducks and drakes with all the money which the shareholders had paid to him. Only one day intervened between the receipt of the requisition and the granting of the certificate. I think one day was too short. I do not hesitate to say that this man, when he asked for the certificate, misled the Minister of Finance.
I would not think anything else. I am quite sure the representations he made were not correct; they are practically admitted to be untrue, and there is no doubt that the Treasury Board, the Minister of Finance particularly, were to a certain extent



[Stage Direction]
misled by this representation. I do not think the Treasury Board took the time that was necessary to see whether everything that was put before them was absolutely right, or whether they were justified at all in granting the certificate. The affidavit made by Mr. Travers was submitted to the Deputy Minister o! Justice for his opinion as to whether that was sufficient authority for the Treasury Board to grant a certificate, and I want to draw the attention of hon. members to a very significant [DOT]expression in the answer of the Deputy Minister, a shrewd lawyer who could see through the matter as quickly as any one. j He said that the statements of Mr. Travers were sufficient on which the board could exercise their power of granting a certificate ' if they are accepted.' These four significant words in the letter of the Deputy Minister of Justice to my mind were a warning to the Treasury Board to be careful. He apparently did not think that the statements made by the general manager were reliable or acceptable. Now, there is no doubt that there had not been sufficient money paid in to the provisional directors on account of stock to make up the $250,000. I presume that a great many hon. members have read the proceedings of the curator 'and the liquidator in Toronto, and it is perfectly clear that no such sum of money was available to pay to the Receiver General to obtain this certificate. I contend that in the granting of this certificate there was a direct violation of the Bank Act. That Act is most explicit that every dollar of this $250,000 should be paid in on account of stock, should not. 'be borrowed money or money derived from any other source; and that not having been done in this case was a clear evasion of the Bank Act, and the Treasury Board should have *inquired into the facts. I have before me a copy of the 'Monetary Times,' a journal printed in Toronto that devotes attention to matters of finance, and it deals with this question in a better way than I could; so I am going to read from it a few words to show how the government, or those acting for the government in this matter, were warned. The 'Monetary Times' says:
The day on which the Danners Bank obtained its charter was the first day of Farm-[DOT]ers' Bank deceit. The 'Monetary Times' admits that the government was placed in a delicate position. It could not have gone to Mr. Travers, saying that dishonesty was ram-pant in his institution, and notifying its indention to withdraw the charter. But the -department had six different warnings at various periods of the bank's existence. On October 8, 1906, about a month and a half "before the certificate was granted, Mr. Leighton McCarthy wrote to Mr. Fielding that a number of subscribers to the shares of the *Farmers' Bank would dispute the bona fide Mr. HENDERSON
character of the subscriptions. 'Grave conditions have arisen,' he said, 'which require careful consideration before the Treasury Board grant any certificate to the organizing of this bank.' In a subsequent letter dated October 19, Mr. McCarthy again wrote the Minister of Finance formally asking that the Treasury Board stay any action on the application of the Farmers' Bank for a certificate.
Now, 1 may be told that later on Mr. McCarthy withdrew his protest, assigning as a reason that his clients had been settled with by the bank, and therefore he had no further claim to make, but even supposing that his clients had been setT tied with the fact remains that the government had information that there was something decidedly wrong.
Mr. Fielding wrote to Mr. Travers, stating that in a previous case there had been an evasion of the intention of the Bank Act, and that subscribers to stock had given their note instead of paying in cash. Mr. Travers replied, 'I have to say that in the case of the Farmers' Bank of Canada the provisional directors did not raise the money in the way maintained by you.'
The information was that the provisional directors or Mr. Travers had raised this money, or a considerable portion of it, by taking the notes of shareholders who had paid for only a part of their stock, discounting these notes in the bank or in a trust company, and using the proceeds for the purpose of making up what was required of the $250,000, after exhausting the money they had from such stock subscriptions. Now there were two occasions on which the attention of the government was drawn forcibly to this very circumstance which Mr. McCarthy complained of, because the trouble with Mr. McCarthy's clients was that they had given notes for part of their stock and discovered afterwards that their notes had been endorsed by the provisional directors and discounted in other banks for the purpose of raising money to meet the deposit necessary to secure a certificate, which was clearly an evasion of the banking law.	.
I am now going to mention mother circumstance, which, I think, my hon. friend the Minister of Finance will quite well remember. As I told you, Mr. Speaker, I felt a very deep interest in the affairs of this bank owing to the fact that so much money was at stake in it from the county I have the honour to represent. I felt very much worried not because of any personal interest for I had refused to subscribe to any of the stock, although asked to do so. I refused because I had not sufficient faith in the concern to warrant my doing so-. It was not, therefore, for any personal reason that I felt so much interested but simply because I had a deep regard for the wel-

fare of the men in' my county who had pledged their credit, ranging from $100 up to as high as $22,000, which, with the double liability, would mean a liability of from $200 to $44,000. I went therefore to the Minister of Finance myself and spoke to him about this. I told him that I felt very uncomfortable over Ithe matter and was afraid there was going to be trouble.
An hon. MEMBER.: Was that before the certificate was granted?


David Henderson: Yes, and I told him the reason why I was anxious. That the reason was that very many of my constituents were deeply involved in the matter.
I said to him:	I have personal knowledge of this because I have seen notes in the hands of the solicitor who was acting for some ten or a dozen of these men, and who had taken proceedings against the bank and had forced it to give back the money they had paid and the notes they had signed. He had forced the bank to do this because the provisional directors were not carrying out the spirit and intent of the Bank Act. I had seen those notes. They were endorsed by the provisional directors for the purpose of raising money, presumably to provide the necessary deposit of $250,000 to get the certificate and enable the bank to begin business. Let me now read the answer given by the Minister of Finance to a question asked by the hon. member for North Toronto (Mr. Foster), and I consider that 1 am justified in mentioning these facts [DOT]because of the position I occupy in this House as representing these men. Under the 30th January last the hon. member for North Toronto asked this question:
Did the Finance Department, or any of its officials, the Finance Minister or any other member of the government, receive any communication, verbal or written, previous to the issue of the certificate of the Treasury Board to the Farmers' Bank, cautioning, warning or suggesting an inquiry as to the standing or character of the promoters, or the proceedings by which the deposit was procured.
The hon. minister replied as follows:
The government did not receive in any form any information which afforded ground for a refusal of the deposit.
The hon. member for North Toronto was not satisfied with that answer, and later on in the day repeated his question and pointed out that the answer given was not really a reply to the question he had put. He said:
I beg leave to point out to the House that the answer given is not an answer to my question. I think I have a right to an answer to my question, then the House, as well as myself would form its own opinion as to whether it afforded ground for any interference.
To this the Finance Minister replied:
There was some gossip in banking circles concerning the Farmers' Bank, of which we became aware. I do not see how we can take cognizance of that. There is an answer as to any representation that was made in the proper way. There was gossip abroad concerning the Farmers' Bank, I was welt artare of it.
I presume that the hon. minister intended to include me among those who were retailing gossip.
M(r. FIELDING. I can relieve my hon. friend's mind on that point. I had no such intention.


David Henderson: I am very glad indeed to have that statement because I can assure the hon. minister that I had no intention of retailing gossip. I went to him with a straight fact that came under my personal knowledge, and I felt it mv duty, as representing a county in which large amounts of money were at stake in this concern, to make the representation that I did. The Minister of Finance treated me with the greatest courtesy. He told me that he would hold the certificate back as long as he could. That certainly is evidence that my representation to him was made before the certificate was granted.


Mr. MILLER.: The hon. gentleman says that he was uneasy and anxious because people in his riding had invested in the stock of that bank. Would he say definitely what information he gave to the minister and whether he asked the minister to withhold the certificate.


David Henderson: I think I made my statement sufficiently clear. I shall Tepeat again so that the hon. gentleman (Mr. Miller) may understand it. I told him I was deeply interested in the matter of the Farmers' Bank foT the reason that a very-large amount of money, practically almost half the stock of the bank was subscribed in my county. I realized at this time that it might create a panic in the county if the worst came to the worst, and the bank should fail and the double liability be exacted. I told him that I myself, had seen promissory notes made by farmers in my county, endorsed by the provisional directors that had been used, as I was informed and verily believed for the purpose of raising money presumably to make up the $250,000 required in order to get a certificate. No other money was wanted by the provisional directors. They did not require to borrow money foT any other purpose; they had no authority to borrow money at all, and this borrowing wa= altogether improper. Now, I made that statement, and I thought that was a warning to the Minister of Finance to beware of the men with whom he wat

dealing, and that he should be on his guard. The Minister of Finance accepted my statement in that light, and, as I said, with all the courtesy that was required, he told me that he would hold the certificate back as long as he could. I confess that I left the Minister of Finance feeling quite safe. I thought the matter was in the strong hands of a strong man, who stood between the subscribers to this stock and the government, a man^who was in a position to defend my constituents and prevent them being defrauded. Shortly afterward, the minister met me in the corridor-there was no secrecy about this conversation, never so^ intended by me, or I believe, by the minister-and informed me that Mr. Travers had been down, and that he had brought his money. And the minister said - (I will use his own words)-' I put it up to him and he denied it.' What was it the minister ' put up to him?' What did the minister wish me to understand he had put up to him,' but the very statement I had made to him a short time before? And Mr. Travers denied it. He then asked Mr. Travers to give him a letter to that effect, declaring that my statement was untrue. And he accepted that letter and gave Mr. Travers this certificate. He believed Mr. Travers whom he had never met, perhaps, until a few days before-because I believe he was introduced to him by Mr. Calvert,-he accepted Travers' wordsj and repudiated mine, although I had sat in the House with him for fifteen years and we had always been on the best of terms. I confess that, when I heard the minister say, in answer to a question in this House that ' certain gossip ' had come to him, I felt somewhat hurt; and I am delighted today to heaT the minister say that in using these words he had no reference to myself, and I candidly believe he had not.
Now, I may as well follow this matter to the end In fact, I am compelled to do so, because my constituents think I ought to have something done, something to prevent this terrible holocaust. I met the minister, possibly about two years ago, and he confessed to me that he had some alarm about the Farmers' Bank and related to me the circumstance-which had not then come to my knowledge-that the bank had been peddling in the city of New York a deposit receipt for $150,000 and could not find a purchaser. I confess this looked very suspicious as to the standing of the bank. Before the close of last session, I called on the minister and drew his attention to a matter that had come to my knowledge through a gentleman in Toronto

the clippings of the correspondence that took place in reference to the matter that came up in Syracuse, the purchase of some insurance company. I again repeated to Hr. HENDERSON.
the minister my anxiety over the standing of this bank; for I confess I was anxious, I was worried; not on my own account, but for those who lived in my county, many of whom I knew personally, and for whom I had the greatest respect. And f wish to say in passing, that I am not speaking particularly on behalf of my political friends, because the men who stand to lose the most money in that county are men who are the political friends of hon. gentlemen on that side of the House. I make no point of that, but I do not wish it to be understood that I interested myself in this matter along political lines. As I say, I called on the minister and told him that, owing to the correspondence that appeared in the paper, I thought there was danger to the Farmers' Bank. The minister was familiar with what had taken place, and, seeing that I was somewhat worried over the matter, he very kindly said to me, ' Henderson, I 'don't see why you should worry over this; you are not responsible; besides, you did warn the government.' Those were the explicit words of the Minister of Finance.


William Stevens Fielding: I am bound to say to my hon. friend (Mr. Henderson) that I shall have to take exception to that statement later on.


David Henderson: I make that statement of my own knowledge, from distinct recollection;-and you can understand, Sir, and I think the House will understand, how vividly it was impressed upon my mind from what I have said of the anxiety I had concerning the standing of this bank. The minister says he will have to take exception to my statement, but I must ask him, as one member of this House, as one has a right to ask another, to accept this statement, I will not put it in the extreme form, but I adhere to it; the statement I made is absolutely correct.
So much, then, for the reason why the Treasury Board should have been on their guard, and should have refused the certificate at the time. The government unfortunately, did not heed the warning. Had they delayed and investigated, I am hopeful that, they would have disovered that this man was not entitled to the certificate to open this bank; and I repeat, if no certificate had been issued, this unfortunate affair would have been avoided.
Now, we ask the question:	Who is responsible?-for I look upon this as the crux of the whole matter. I may be told that the officers of the bank named by the shareholders are responsible. I cannot agree to that proposition, because as I have already stated, the officers named by the bank had no power to squander the money of the bank. All the money they could pay out legally was the $250,000. ' That they

had the right to do and did, I think, about the 23rd of October prior to the issue of the certificate. So, I fail to see that the shareholders are responsible in any way because their officers were guilty of wrongdoing. The Bank Act, in fact, delegates to the government, the power to safeguard the shareholders. That is the business of the government. Why was the clause put in the Bank Act forbidding the issuing of a certificate until all the formalities had been complied with? That was certainly to safeguard the public, those who had put their money into the institution, and one of the matters that I refer to more especially is the fact that the money that was sent down here to make the deposit was only in part the money derived from the sale of stock. Those who have been following the reports of the curator or liquidator in Toronto will have ascertained that only $170,000 of the shareholders' money was available for that purpose, and that there was borrowed from another institution $80,000 to make up the $250,000. I assume that if the evidence came out, that money was paid back to that institution which advanced the $80,000 after the $245,000 had been returned by the Receiver General to the bank in Toronto.
Now I contend that the most rigid inquiry ought to be made into this whole matter. 1 do not think that a liquidator in Toronto, or the curator who is dealing with that matter, has the power to deal with it, as it ought to be dealt with. What right have they to come down here and investigate the doings of this government? To the actions of this government, or to those on the Treasury Board, I think we must look for the origin of the trouble, and for the cause of the calamity. Therefore, I say we must pursue some other course, and my suggestion is that a full and thorough inquiry by a Royal Commission alone could bring out the information that is desired. If the shareholders alone are responsible through the men thaiPThew aiyphtnled, I qquld noT argJ5~hTrrThat they' wouldTiave tQjsuBerTEeToss alone,~tEey~wou]dTiave to suffeT~ahy loss if-they alone were responsible. But if these officers did not do anything that could dissipate their money, if they were not alone responsible, then I believe that we must look further; and if the government of this country was misled or deceived, or through lack of care in any way neglected to investigate the matter before a certificate was given to launch this bank, before giving the general manager power, as I said before, to play ducks and drakes with what was left of the shareholders' money, then I think that not the shareholders, but this country ought to come to the rescue for any loss that has been made. I submit that this country is big enough, rich enough and generous
enough to maintain its honour, and I do not see how the honour of this government or of this country could be maintained in this matter unless they came down with something to assist these poor people, and help them out of the difficulty which they have unfortunately fallen into. To do that requires an inquiry over and above anything that could be brought out under the Winding Up Act. Therefore, Mr. Speaker, I beg to move:
That all the words after the word 'that' in (he proposed motion be omitted and the following substituted therefor:
This House is of opinion that a Royal Commission should forthwith issue to inquire into and investigate the incorporation and organization of the Farmers' Bank of Canada, and the granting of a certificate by the Treasury Board permitting said bank to issue notes and transact business, and all the circumstances connected therewith; and generally to inquire into and investigate the operation and efficiency of the Bank Act in relation to the affairs and transactions of said bank.


William Stevens Fielding: With that portion of my hon. friend's remarks which deals with the misfortunes that have fallen upon these good citizens of Canada, and upon other good citizens of Canada, I am sure we all deeply sympathize. But though we may deeply sympathize with these good citizens in the misfortunes which have come upon them, it does not follow that we would be justified in treating them differently from all other citizens who have the misfortune to make an unhappy investment. A short time ago my hon. friend from Halton (Mr. Henderson) put a question on the Order Paper, and an answer was given on behalf of the government. I propose to read the question and the answer, because in a very short form they present the case on both sides:


David Henderson: What action does the government intend to take on tlie two requests preferred by the deputation on behalf of tlie shareholders and depositors of the Farmers' Bank, viz., that a Royal Commission be appointed to make a thorough examination into all matters connected with the incorporation and management of the Farmers' Bank; and that legislation be enacted to relieve shareholders of their double liability and to enable depositors to be paid at least fifty cents on the dollar?


William Stevens Fielding: The government have no reason to doubt that the exercise of the powers given to the liquidator by law, and the performance of the duties imposed upon that officer by like authority, and the proceedings now engaging the attention of the courts of justice in Toronto, will, lead to a full investigation into and disclosure of all the affairs of the bank, and that, therefore, there is no need of the appointment of a Royal Commission. Should anything arise later to indicate that the investigation is insufficient, the question can be further considered. Re-

530S
plying to the latter part of the hon. gentleman's question, the government deeply regret that a number of people who are not well able to bear the loss are likely to suffer from the failure of the bank, but in the judgment of the government it would be contrary to public policy to recoup the losses of any class of investors from the public treasury.
There has been no change in the condition of affairs since that answer was given. An investigation has been undertaken in part by the curator, and subsequently in part by the liquidator, the machinery of the courts has been invoked, and has been occupying a great deal of attention of the courts in the province of Ontario, and I see no reason to doubt that the investigation will be thorough. With regard to the investigation of the circumstances connected with the issue of the certificates, all that is a matter of record which is before the House. No investigation would bring forth anything material that is not now in the possession of the House, or is not within easy reach of the House. Therefore, we are unable to see that the situation is in any respect changed, or that there is any need of a Royal Commission to investigate matters which are already being fully investigated in the courts.
There are three stages in the proceedings in connection with the Farmers' Bank. There is, first, the incorporation of the bank; second, the issue of the certificate; third, the operations of the bank after organization. I desire to invite the attention of the House to each of these stages separately. My hon. friend, in his address, made no reference whatever to the incorporation although I see that in his motion he has included the incorporation of the bank as one of the matters which might require investigation


David Henderson: I certainly understood the issue of the certificate to be part of the incorporation.


William Stevens Fielding: I am glad in that respect that my hon. friend has mentioned it, because he did not mention it in his remarks. But, inasmuch as the incorporation of this bank has been the subject of very much discussion outside, it is as well that in considering the matter, we should give some attention to the circumstances under which the Act of incorporation was obtained. We have a general Act governing banking operations, but each bank has its individual and separate charter. Each bank comes to this House with a private Bill for the purpose of obtaining incorporation. It is not a matter particularly of government concern. Any individual member has the right, and exercises the right, of bringing in a Bill to provide for the incorporation of a new bank. The matter is usually investigated by the Commit-Mr. FIELDING.
tee on Banking and Commerce. In that committee the government have no particular rights. A member of the government at the committee has precisely the same-right as all. other members have. While the government will naturally feel an interest in all legislation, I am one of those who think that in the matter of private legislation, it is not well that the government should at all times project itself into the discussion and endeavour to have these matters take a party turn. So, in private legislation there is always very great freedom claimed by an individual member, which is not always the case with regard to general legislation initiated by the government or perhaps by hon. gentlemen opposite. The government, of course, have an interest in all legislation, and in that sense are responsible for legislation generally, but it is a fact that the method of dealing with private Bills differs somewhat from the manner in which general legislation is handled.
This bank was incorporated in 1904. I do not remember that any exception was taken to the incorporation at thait time. The bank was not organized at that time. The promoters came back in 1905 for an extension and received it. In the year 1906 they came back again. Now, as I said a moment ago, that committee is composed of gentlemen from both sides of the House, and if there had been any objection to the incorporation of the bank, it would have been well that we should have heard it and that those who opposed it should have placed themselves on record. As far as my memory goes, the only objection that was ever raised to the incorporation of this bank, came from myself and from some members who may later on, have shared my view. But, to the original incorporation, I do not remember that any objection wras taken. We have to consider a moment the general principles governing bank incorporation. The business of Canada has been increasing faster than the available banking capital. It is desirable that we should have from time to time additional banking capital. Whether that should be obtained by increasing the capital of existing banks or by the creation of new banks, is not, perhaps, a matter of great concern, but that the country with its rapid growth should have further capital *will be generally admitted. Whenever a proposition is made to incorporate a new bank, the committee is rather disposed to view it in a friendly light. I do not know whether there was any objection taken to the incorporation in 1904 nor can I recall anything in particular with regard to the application which was made in 1905. In 1906 the promoters came back again and I then opposed the granting of a charter. My view was that the fact that they had not

been able to organize promptly, indicated that they were having difficulty, and I confess that from the beginning I did not quite like the name of the Farmers' Bank. My fear was, that possibly the granting of the charter in 1905 would have the effect of inducing people to engage in the banking business, who were not likely to realize the responsibility they were assuming in becoming shareholders. However, the sentiments of members differed as they sometimes do in the Banking and Commerce Committee. Some hon. gentlemen were not in harmony with my own view and after some discussion, I found I could not carry niy views as to the rejection of the charter, but, it was agreed that they should at all events, be permitted a six months extension and I think I probably assented to that. At all events, I know that I succeeded in obtaining a reduction of the period for which the extension was granted. If it had not been granted what would have been said? At the time this argument was put to me, members friendly to the venture came and said: You must not oppose this charter, Mr. Minister. The country needs banking capital and there is a good deal of feeling in the country that the old banks have a monopoly of the business. I do not quite endorse that, but there is a good deal of that feeling, and these gentlemen said: If you are going to oppose the efforts of the farmers to have a share in the banking business of the country, you will be met with the cry that parliament is giving the eld banks a monopoly, and is not willing to give a fair chance to the farmers. In the Banking and Commerce Committee that feeling leads us to grant charters sometimes when possibly some of us would prefer that they should not grant them. At all events under these [DOT] circumstances and with that feeling on my part, the charters was granted by this parliament after it had been reported by the Banking and Commerce Committee of which many hon. gentlemen opposite are members and for which I take whatever share of responsibility I have as a member of that committee. Therefore, I think I can say at once that in so far as the granting of the charter is concerned, there is no room now for any complaint against the action of this government, or for that matter, against the action of this parliament. I am taking my responsibility as one member of this committee and of this parliament. Although I would have preferred that the charter should not continue to exist I accepted the compromise of a six months extension, and of course, I accept responsibility for that with my colleagues on the committee. Therefore, I say that parliament is responsible for the granting
of the charter and I do not think that any reasonable ground of objection can be taken to the incorporation of the new bank in face of the fact that the incorporation of new banks is still regarded as generally desirable.
Now, we come to the second question, the granting of the certificate. I want to say in, that connection that my chief regret is that I have to have a difference of opinion _ with my respected friend from Halton. I know him too well to hesitate for a moment in accepting any statement that he might make. I credit him with all good faith and sincerity, and if he and I do not agree as to what has occurred that does not imply that I for one moment question the good faith or veracity of my hon. friend, but it simply means that I am obliged to say that, my hon. friend is mistaken. I am obliged to say when my hon. friend tells me that he warned me against the issue of this certificate that he is mistaken. My hon. friend and I have had frequent conversations over the question of this bank. I do not recall, however, that we met in any formal way, but we met at different times as members-of the House do, and we had conversations-concerning the bank. That arose from the fact that my hon. friend knew I was opposed to the granting of the charter and that I viewed it with anxiety. The conversations-between my hon. friend and myself were always along the line that we regretted the necessity for the creation of this Farmers' Bank, we were sorry to have the farmers of the country engaging in banking when, in the case of many of them, they were not familiar with the responsibilities which would be involved in the acceptance of shares of a bank. All our conversations were along that line. We were feeling sorry that the farmers were going into this matter, but I can assure my hon. friend that when he says that he warned me against the issue of the certificate, although I know he makes the statement in all good faith,
I am bound to say that to the best of my recollection he is entirely mistaken. Nothing of the kind occurred.


Mr. FOSTER.: Does my hon. friend (Mr. Fielding) wish that denial to apply to the three interviews at which there were conversations or only to the last one?


William Stevens Fielding: I do not remember how many conversations I had with my hon. friend.


George Eulas Foster: There were three that were mentioned.


William Stevens Fielding: No matter how many-there were, in so far as they took place before the issue of the certificate, I mean my denial to apply to all. I had conversations with my hon. friend from time to time-as to the regret which we both had about I the farmers going into this bank, but I dis-

tinctly state that my hon. friend is wrong when he says that he warned me against the issue of a certificate. He says that I decided to accept the statement of Mr. Travers as against him.
I am bound to say that if the matter ever did take that shape-with my hon. friend a wfitness on one side-knowing my hon. friend for many years as well as I do -and having on the other side a gentleman who I did not know at all, I would unhesitatingly accept my hon. friend's statement. But I wish to say that the matter never did take that position at all; there never was any conflict with my hon. friend on one side and Manager Travers on the other. My hon. friend (Mr. Henderson) says that I told him-he is very clear about it, and he presumes to quote the exact language- that I Cput it up' to him (Mr. Travers). Well, if I were not sure otherwise I would certainly be sure from that, because I do not believe that I ever used such a phrase in my life. Whatever faults I have in the elegance of my language, I am quite satisfied that I never used such an expression, and therefore I can say my hon. friend does not recollect that correctly. However, that is not very important.


David Henderson: I must say that my recollection of that is very distinct, and I think that the minister ought to accept my word.


William Stevens Fielding: The hon. gentleman must remember that I am no more bound to accept his word than he is to accept mine.


David Henderson: I made my statement.


William Stevens Fielding: Well, I make my statement.


David Henderson: You have no right to contradict my statement.


William Stevens Fielding: Nor has my hon. friend any right to contradict mine.


David Henderson: I am not contradicting yours.


William Stevens Fielding: Well, we need have no conflict over that. I say at once that I have too much regard for my hon. friend (Mr. Henderson) to suggest for a single moment that he would make any statement in this House that he did not make in all sincerity, and believe to be absolutely correct. I would do my hon. friend and myself an injustice if I suggested anything of the sort; but I am bound to say that his memory is wrong as to what occurred.


David Henderson: Not at all.


William Stevens Fielding: While my hon. friend and I had occasional conversations about the affairs of this bank they all arose out of the fact that I had opposed the granting Mr. FIELDING
of this charter and viewed the matter with some anxiety.


David Henderson: I must take exception to that statement. I have no recollection of ever discussing with him the impropriety of granting these people a charter. I was on the Banking and Commerce Committee and supported the granting of that charter which was originally, I think, in the hands of the hon. member for South Wellington, and I representing farmers of Canada never objected to them getting a charter.


William Stevens Fielding: I did not say that my hon. friend objected to giving the charter. I said I had objected to giving the charter, and as hon. members who sat with me on the committee are aware I reluctantly agreed to give them a six-months' extension, and it was out of that discussion arising in that way that my hon. friend and I occasionally had conversation. Certain portions of the conversation he has repeated and certain others he has not, but that is not material. I must say frankly that while I am not complaining of his repeating the conversations, and while I would not think myself free to repeat them under the circumstances, I do not complain. I said nothing to my hon. friend that might not be said from the house tops.


David Henderson: Does the hon. gentleman consider that the conversation on a public matter o'f that kind was private? I certainly never considered it so. When I make representations concerning a public matter of interest to my constituents I would consider that they are perfectly open.


William Stevens Fielding: I am not complaining; I said that I did not consider myself free to repeat the conversation I had with my hon. friend, but my hon. friend has a different view as to that. Might I ask the hon. gentleman how it is, if it was a grave and serious matter affecting his constituents as he now says, he did not take the trouble to put his views in writing so that they might go on record and be beyond dispute) If my hon. friend felt as keenly in the matter as he now does, if he believed that the granting of this certificate was about to coime to pass, and if he had good reasons against it, surely my hon. friend would be bound by his duties to his constituents to have addressed me a letter and have his views on record, and then there would be no room for dispute.


David Henderson: While I believed there was trouble I was extremely anxious not to say anything more than -was absolutely necessary in case that might bring about the collapse of an institution which eventually might work its way through. I considered that mv personal verbal statement to the minister which was intended for him as a warning was just as good as

if I had put it in writing, and I stated the reason why I preferred that mode rather than putting a document on file which might have been read by others and construed into an attempt on my part to wreck a bank which might otherwise pull through.


William Stevens Fielding: My hon. friend will see that that remark might apply very well after the bank was organized, but it does not apply to a time when the bank was not organized at all, and when there was no bank to wreck. He says it is before the certificate was granted he warned me against it, and if so there is no reason why that warning should not be put in writing. Did my hon. friend then attach the same importance to it that he does now he should have done himself the justice of putting that warning in writing.


David Henderson: I did not regard it at the time as a necessity.


William Stevens Fielding: As a rule public business is transacted in writing; as a rule when men wish to bring about important transactions they exchange letters which will make the matter clear and place it beyond the possibility of any dispute, and if the hon. gentleman fails to do that and leaves it to a matter of memory, well, his memory is just as likely to be treacherous as that of any other hon. gentleman. I want to say distinctly that the conversation my hon. friend and I had, had no reference to any warning and that I never received from him any warning as to the issue of the certificate to this bank.


Mr. BOYCE.: Is not the minister's memory likely to be treacherous on that point?


William Stevens Fielding: It is possible. I am admitting that my hon. friend from Halton makes the statement in absolute sincerity, but I say that my recollection is that he is wrong. If he wishes to think that my recollection is wrong and his is right we will have to leave it at that. The fact that he failed to put it in writing is rather a misfortune in view of the difference of opinion that has arisen.


David Henderson: I would tell the Minister of Finance that I have ere this put my views in writing and a minister of the government of which he was a member, although these views were marked ' private,' published them in a blue-book and sent them broadcast all over the country to try and do me an injury. I do not mean to say that the minister of finance would have published this in order to do me an injury. I am quite satisfied he would not.


William Stevens Fielding: How could I have done mv hon. friend an injury?


David Henderson: It might be insinuated that I made an attempt to wreck the bank.


William Stevens Fielding: It would stand now to my hon. friend's infinite credit if he had warned me and iE I had gone on despite the warning. However, my hon. friend did not take that course, and I will leave that matter as it is. The first stage in this matter of the issue of the certificate is to be found in a communication from Mr. Leighton McCarthy, who says he is instructed by some shareholders, his clients, to object to the issue of the certificate, and he states in a subsequent letter that he complains that in some cases where large sums of money have been paid, notes have also been given. Now, at that time the application for a certificate had not yet been received. Mr. McCarthy was informed there was no application, and that when the application did come his representation would have all due consideration. Mr. McCarthy's letters on that subject were dated October 8th and 19th. My hon. friend (Mr. Henderson) has spoken of very great haste on this question, and he has said that the application for the certificate was written on the 27th, presumably received on the 28th, and the certificate was granted on the 30th November; but if my hon. friend will look through the correspondence he will see that on the 23rd of October Mr. Travers took the first step toward the organization by depositing the $250,000 in the Bank of Montreal, and notify ing the department that he deposited it for the purpose of organizing the bank. So mv hon. friend will see that we had notice of the application and the money in our possession for some considerable time before the dates he has mentioned.


Mr. LABOR.: May I ask the hon. minister if he had any letters warning him as to this bank other than that of Mr. Leighton McCarthy?


William Stevens Fielding: I think I am Tight in saying that there were no other letters. The day after the certificate was granted, a letter came from the Canadian Bankers' Association.


Francis Ramsey Lalor: As a matter of fact, did not a local manager write to you warning you of this bank?


William Stevens Fielding: Any letter written to us by a local manager had no reference to the issue of the certificate at all. I think I know what my hon. friend_ refers to. It had reference to another matter later. Mr McCarthy filed his objections, and on the 2nd of November Mr. McCarthy withdrew his objections in a letter in which he says:
Referring to my letters of the 8tli and 9th inst., with referenece to the application for a certificate made on behalf of the Farmers' Bank, I am advised by those who are instructing me that the claims made by them in the action brought have been settled by their subscriptions being taken up by some parties

interested in the hank and refunding the money paid hy the individuals or returning the notes which had been given. The, objections which I made on their behalf to the issue of the certificates are, therefore, withdrawn. Would you mind therefore returning to me the papers which I forwarded to you?
The papers were, accordingly, returned to Mr. McCarthy. The next stage of the matter was that, anticipating the application, the Deputy Minister of Finance, Mr. Eoville, wrote to Mr. Travers that it would be desirable that he should furnish a detailed statement of the actual amount of cash paid up in the case of each shareholder. Mr. Travers, in his affidavit, to which I will come in a moment, gave the most positive assurance that the amounts set forth, had been paid in cash. After the declaration of Mr. Travers had been received, although it was in proper order, I thought it desirable that I should see him on the subject. Mr. Travers came to the department in connection with the certificate, and I had a conversation with him, arising out of this note business. At that time-to the best of my knowledge and belief, the only time in my life that I met Mr. Travers,-I had a conversation with him, in which. I called his attention to the fact that there were rumours in banking circles that sometimes the organization of banks was brought about by the use of notes instead of cash. Mr. Travers in the most positive terms declared that there was no foundation for any suspicion of that kind in the present case.


Mr. THORNTON.: What made you suspicious of Mr. Travers at that particular time?


William Stevens Fielding: The letter itself says that I had heard of rumours in banking circles that in the case of previous organizations of banks the Bank Act had been evaded by the use of notes. I called Mr. Travers' attention to that and cross-examined him as well as I could on that aspect of the_ question. He assured me in the most positive terms that the cash was paid in, in every case. I think I had dictated a letter to Mr. Travers that was on its way to him, and I said I would like him to give me a written answer, which he did. So that we had before us at the moment of issuing the certificate Mr. Travers' affidavit and Mr. Travers' letter. Now, before we proceed to quote the statements of Mr. Travers, let us reflect for a moment on his present position and on the position he occupied at the time these events occurred. Mr. Travers is now a convict in prison, a discredited man. When you talk of the testimony of Mr. Travers to-day, you evidently think of him as a convict, the prisoner the discredited man. But do not for-Mr. FIELDING
get that at the moment Mr. Travers came before the Department of Finance, he was a man in as good standing as any member of this House, as far as I know. Do not forget that at that time he was the recognized manager of a new bank, associated with reputable men, and that he came to us on behalf of those reputable men in order that he might do business with us. Now, who were the men associated with Mr. Travers in the matter? By reference to the charter of the bank, you will find that at that time Mr. Travers was acting in co-operation with a number of gentlemen who aTe named as provisional directors :	James Gallagher, of the village of
Teeswater, John Watson, of the town of' Listowell, John Ferguson and Alexander Fraser, both of the city of Toronto, and Alexander Shepherd Lown, of the village of Drayton. I have not the pleasure of knowing any of these gentlemen, but I am told that they aTe men of good standing in their respective communities. Mr. Travers was associated with these gentlemen in the beginning and when the prospectus of the bank was issued it stated:
The following gentlemen have consented to act as directors if elected:-His Honour A. E. Forget, Lieutenant Governor, Saskatchewan; Major Thomas Beattie, President London City Gas Company, director Agricultural Savings and Loan Company, London; Lieut.-Col-onel R. R. McLennan, contractor; Cornwall, Ont., director Manufacturers' Life Insurance Company, director Trust and Guarantee Company, director Cornwall Paper Company; John D. Ivey, president, John D. Ivey & Company, Limited, Toronto; Thos. Charlton, lumberman, Collingwood, Ont., North Tonawanda, N.Y.; H. W. Anthes, president and managing director Toronto Foundry Company, Limited; W. S. Calvert, M.P., manufacturer, Strath-roy, president Cameron Dun Company, Limited, president Canadian Oil Company, Limited, vice-president Northern Life Insurance Company; D. P. McKinnon, Finch, Ont., ex-president Board of Agriculture and Arts, director International Portland Cement Co., Ltd.; Colonel James Munro, M.P.P., banker, Embro, Ont.; Hon. A. G. McKay, K.C., Owen Sound, ex-Commissioner Crown Lands; George W. Neely, M.P.P., farmer, Dorchester, Ont. ; Thos. Urquhart, ex-mayor, Toronto; D. N. McLeod, general merchant, Parkhill. Ont.; John Ferguson, M.D., M.A., director Excelsior Life Insurance Company; Robert Noble, miller, Norval.
These were Mr. Travers' associates according to the statement furnished us.


Mr. BEATTIE.: As my name is mentioned, I wish to make a personal explanation. One Sunday night about 10 o'clock I was rung up by the long distance telephone. I answered the call and a gentleman at the other end said: Mr. Travers is speaking. I know Mr. Travers, manager of the Bank of Montreal, and thought it \vas he, and did not suppose it was Mr. Travers,

manager of the Farmers' Bank, whom I did not know. On the following morning at the breakfast hour' a gentleman called on me with a paper which he asked me to sign. He came so sharp and early that I became suspicious and asked him when he left Toronto. He said he left at midnight and went on to tell me that I had spoken to Mr. Travers the night previous over the telephone, and that he had come to see me in consequence. I said to him: When did Mr. Travers leave the Bank of Montreal? He replied that Mr. Travers was formerly in the Merchants' Bank. I then said to him that I had been speaking over the telephone to some man whom I did not know, under the impression that I was speaking to Mr. Travers of the Bank of Montreal whom I knew very well, and I consequently refused to sign the papers. I then went and saw one of the clerks in The Merchants' Bank, and he gave me Mr. Travers' history, and I made up my mind To have nothing to do with the Farmers' Bank of which Mr. Travers was the manager. This Mr. Travers, whom I supposed to be Mr. Travers of the Bank of Montreal, asked me over the telephone on Sunday night if I would take stock in the new bank, and I replied that if he were associated with it I might take some shares, but I had no idea that I was speaking to a man whom I did not know. The following morning when this other gentleman came to London with a prospectus, to which my name was attached, I refused to sign for any stock, and if my name was kept on the prospectus, it was without my authority.


William Stevens Fielding: Of course I am not seeking to make any point against my hon. friend, but I am simply showing that when Mr. Travers came to the Finance Department, he came under these excellent auspices.


Thomas Beattie: I quite understand the hon. minister, but I wish to explain that I had not given any authority at all for The use of my name.


William Stevens Fielding: I do not in the slightest doubt the hon. gentleman, but am simply pointing out the names which appeared on the prospectus. Then we come to the names used in the application itself. I shall read the whole application in a moment, but for my immediate purpose I shall simply give the names. I have given the names of the provisional directors which appeared in the original charter, and of those who, in the prospectus, appeared as having agreed to act as directors. My hon. friend has declared that his name was used without his sanction, but the fact nevertheless remains that his name was there.


Thomas Beattie: I had no stock in the bank, and they had no right to use my name.


William Stevens Fielding: I accept my hon. friend's statement without hesitation, but what I say is that all these names were those of highly respectable men and calculated to give Mr. Travers strength when he came to deal with the government, and my hon. friend's name was among them, and it was one calculated to give the application some strength. I now come to the names of the provisional directors in that application. They are as follows:
Lt.-Col. R. McLennan of Cornwall, Ontario.
Lt.-Col. Jas. Munro, M.P., of Embro, Ont.
Allan Eaton, Esq., of Mount Nemo, Ont.
Robt. Noble, Esq., of Norval, Ont.
W. G. Sinclair, Esq., of Zimmerman, Ont.
A. Groves, Esq., M.D., of Fergus, Ont., and
N. M. Devean, Esq., W. Beattie Nesbitt, M.D., and John Gilchrist, Esq., of Toronto, Ont.
All these gentlemen were at that time apparently the associates of Mr. Travers. Mr. Travers came to us buttressed by all these good names. More than that, he came to u3 as the agent of the very shareholders that my hon. friend from Halton (Mr. Henderson) talks about. He could not have come in any other capacity, it was from these shareholders, in one form or another, that the money was obtained which he deposited with our department. He further came to us on his own reputation as a man of good standing-because I had heard nothing to the contrary-with the names of these men associated with him in the charter and with a list of gentlemen who were willing to act as directors and whose names are set forth in the application. Let me now read the application:
In the matter of the Bank Act and amendment and of the Farmers' Bank of Canada.
I,	William R. Travers of the city of Toronto, in the county of York, general manager of the Farmers' Bank of Canada, do solemnly declare:
1.	The Farmers' Bank of Canada was duly incorporated by Act of parliament of Canada, being chapter 77 of the Statutes of 1904; the said Act of Incorporation was amended by a further Act of parliament of Canada, being chapter 92 of the Statutes of 1905, and was further amended by an Act of parliament of Canada, being chapter 94 of the Statutes of 1906. A true copy of each of the said Acts are now shown to me and marked exhibit 'A' to this my declaration.
2.	The provisional directors of the said bank proceeded in accordance with the Bank Act to open the stock books and issued a prospectus. A true copy of the said prospectus is now shown to me and marked exhibit 'B' to this my declaration.
3.	On or about the twenty-second day of March, 1-906, I was appointed by the provisional directors general manager of the bank and still occupy the same position, and have knowledge of the matters hereinafter set forth.
4.	On the twenty-third day of October, 1906, there had been actually bona fide subscribed five thousand seven hundred and fifty-seven shares of the capital stock of the Farmers'

Bank of Canada, and I have had personal knowledge of the applications and subscriptions, and each and all of the said subscriptions is and are on the printed form of application-a copy of which is now produced and marked exhibit 'C' to this my declaration, and that the said subscription- appeared on the stock books of the said bank, and that a sum beyond $250,000 thereof in cash has been actually paid in by the subscribers of the same.
5.	Now shown to me and marked exhibit 'D' to this my declaration is a list of the subscribers to the capital stock of the said bank, correctly setting forth as to each subscription the name of the subscriber, his address, the number of shares subscribed for by him, the amount of such shares and the amount paid in thereon. Each of the said subscriptions is a bona fide subscription to the capital stock of the bank.
6.	The provisional directors of the said bank on the said twenty-third day of October, 1906, caused $250,000 of the moneys so paid in and which actually had been received in respect of the shares of the capital stock of the said bank to be deposited in the Bank of Montreal to the credit of the Minister of Finance and the Receiver General, and that the deposit receipt therefor was forwarded to the Deputy Minister of Finance who acknowledged receipt of the same under date of the twenty-fourth day of October, 1906.
7.	In accordance with the provisions of the Bank Act the provisional directors by public notice for at least four weeks, called a meeting of the subscribers to the said stock to be held at the offices of the bank in the Stair Building, corner Bay and Adelaide streets in the city of Toronto, in the province of Ontario, on Monday the twenty-sixth day of November, 1906, at ten o'clock in the forenoon.
8.	The said notice appeared by advertising in the issues of the 'Canada Gazette,' dated October 27th, November 3rd, 10th, 17th and 24th, and the same notice also appeared in the issues of the Toronto daily 'Globe,' dated October 24th, 25th, 26th, 27th, 29th, 30th and 31st, and November 1st, 2nd, 3rd, 5th, 6tli 7th, 8th, 9th, 10th, 12th, 13th, 14th, 15th, 16th, 17th, 19th, 20th, 21st, 22nd, 2.3rd, 24th and 26tli, and the said notice also appeared in the issues of the Toronto daily 'Mail and Empire,' dated October 24th, 25th, 26th, 27th, 29th 30th, 31st, and November 1st, 2nd 3rd 4th' 5th, 6th, 7th, 8th, 9th, 10th, ,12th, 13th.'14th' 15th, 16th, 17th, ,19th, 20th, 21st, 22nd,' 23rd' 24th and 26th. A file of the issues of the Toronto daily 'Globe' and of the Toronto daily Mail and Empire' containing the said advertisement are produced and marked exhibit 'E' to this my declaration.
9.	A printed copy of the said notice was also sent by post letter prepaid to each of 1 he subscribers of the capital stock of the bank at the address of each subscriber upon the books of the bank by depositing the same in the general post office branch B, Toronto on the tiventy-third day of October, 1906. One of the said individual notices is now-shown to me and marked exhibit 'F' to this my declaration.
10.	I acted as secretary to the said meeting of subscribers holden on the said twentysixth day of November, 1906, and at the said meeting upwards of eighty subscribers were present in person and upwards of three hundred and seventy subscribers were represented by proxy. The subscribers adopted by-laws for the bank and determined the day upon which the annual general meeting of the bank is to be held, being the fourth Monday in November in each year, and the subscribers elected nine directors duly qualified under the Bank Act to hold office until the annual general meeting in the year 1907. The directors so elected are as follows:
Lt.-Col. R. McLennan of Cornwall, Ontario.
Lt.-Col. Jas. Munro, ,M.P., of Embro, Ont.
Allan Eaton, Esq., of Mount Nemo, Out.
Robt. Noble, Esq., of Norval, Ont.
W. G. Sinclair, Esq., of Zimmerman, Out.
A. Groves, Esq., M.D., of Fergus, Ont., and
N. M. Devean, Esq., W. Beattie Nesbitt, M.D., and John Gilchrist, Esq_, of Toronto, Ont.
11.	The provisions of the Bank Act as to the subscribers to the capital stock of the said bank and the deposit with the Receiver Gen-ei al and as to the notice of the said meeting of subscribers and the proceedings of the said meeting have been fully complied with, and pursuant to the direction of the said meeting of subscribers and board of directors elected at such meeting application hereby is made for the certificate of the Treasury Board to permit the said bank to commence the business of banking in accordance with the said Act.
And I make this solemn declaration conscientiously believing it to be true and knowing that it is of the same force and effect as if made under oath and by virtue of the Canada Evidence Act, 1893.
Declared before me at the city of Toronto, in the county of York, this twenty-seventh day of November, in the year of our Lord, 1906.


W. R. TRAVERS.
[Stage Direction]
W. H. Hunter,
A Com., &c., in H.C.J.
Here was, in the most positive terms, a declaration on oath, or its equivalent, by Mr. Travers that this money had been subscribed in accordance with the terms of the Bank Act, and this at a time, I say, when Mr. Travers had the same position before us as a man of good repute, and not only one of good repute but one who was able to associate with himself these gentlemen whose names I have mentioned in one capacity or another. This being the case, I think it would not have been unreasonable if we had given him the certificate without further ado. As it was, we had an exchange of letters with Mr. Travers. On the 30th of November, the day when he came for this certificate I addressed him a letter. In the meantime,
I had seen Mr. Travers and discussed the matter with him, but I asked him to confirm his statements in writing. I had cross-exan lined him, /as I sayk on Ms affidavit, and his statements were as complete and full as anybody could desire, but
William Stevens Fielding: I asked him to put them in writing. The following is my letter as it appears at page 26 of the Return:
Minister of Finance, Canada, Ottawa, November 30, 1906. W. R. Travers, Esq.,
General Manager of the Farmers' Bank of Canada,
Russell House, Ottawa.
Dear Sir,-I regret that owing to pressing engagements yesterday, arising out of the budget, I was unable to meet you to consider your application for the issue of a certificate to authorize the Farmers' Bank of Canada to commence business. I shall be glad to see you to-day, at my office, at any time before one o'clock if you can call. Or I might be able to see you later, between four and five, at the House of Commons, if that will be more convenient.
There is a phase of the matter which I should like to bring to your notice so that you may consider it at once. It has been represented to us that in some previous instances where an application was in all respects apparently regular, there was actually an evasion of the intention of the Bank Act in relation to the paid-up capital. We have been told that in some cases the subscribers did not actually pay in cash but gave notes to the provisional directors which were used to raise the money. On account of information of this kind, which has reached us in relation to a previous case, we deem it proper to scan very closely every application for a certificate which comes to us. I shall be glad to have an assurance that nothing of the kind has taken place in relation to the subscriptions for the Farmers' Bank, but that the amounts set forth in the application as having been paid up have in every case been bona fide cash payments.


W. S. FIELDING.
[Stage Direction]
Minister of Finance.
Mr. Travers, replying to me on the same day wrote:
Ottawa, November 30, 1906. The Hon. W. S. Fielding,
Minister of Finance, Ottawa, Ont.
Dear Sir,-In reply to your letter of the 30th of November, I have to say that in the case of the Farmers' Bank of Canada, the provisional directors did not raise the money in the way mentioned by yon. You will find the statement put in by me absolutely correct as to the amount of stock subscribed and the amount paid np.

[Stage Direction]
General Manager, Farmers' Bank of Canada.
We already had the affidavit of Mr. Travers. This letter adds nothing to it, but it shows that, even after receiving that affidavit, we cross-examined Mr. Travers as to the statements in it.
Mr. PORTER, What does the minister mean by ' cross-examine ' P Does it mean that he simply asked him questions and accepted his answers, or does it mean that this was under the solemnity of an oath?
William Stevens Fielding: No. Perhaps the expression ' cross-examine ' may be taken by my legal friends in a broader sense than I intended. I mean to say that I discussed the matter with him and told him that it was a subject on which we wished to have information beyond all question. He answered in most complete terms.


Arthur Cyril Boyce: In the letter of the minister to the general manager of this bank, he puts the proposition in the abstract. May I ask the minister why he did not state that the information hu had as to the discounting of notes had to do with this bank and not with a previous case? Why did not he use the information he had at his disposal, instead of putting it m that way?


William Stevens Fielding: 1 am bound to say that I had in mind at that time more tiie recollection of previous cases than the case of this particular bank. However, crossexamination ' may not be the proper expression; I used it in the general way a layman would.


David Henderson: Had not the minister in mind the conversation I had with him?


William Stevens Fielding: I can assure mv hon friend (Mr. Henderson) in good faith, that I had not in mind any conversation with him bearing on the issue of the certificate. The idea that I had in mind, on one side my hon. friend's (Mr. Henderson's) statement and on the other the statement of Mr. Travers is, I am bound to tell my hon. friend, an entire mistake, We had before us the declaration of Mr Travers; we had his letter-if it gave any additional value -and we had the fact that he came to us representing his shareholders, the very men on whose account my hon. friend from Hal-ton (Mr. Henderson) now complains. Mr. Travers came as their agent. So far as the papers showed, the directors had been appointed at a regular meeting of shareholders, and they in turn had appointed Mr. Travers general manager. So he came to us, not only as a man of good repute

and I want that borne in mind, that he was, at the time he came representing the provisional directors, a man of high standing in the country-but also he came representing the shareholders in the bank. We had before us every bit of information such as we had had in the granting of any previous bank certificate. That being the case, what would have been the result had we refused to grant the certificate as in the previous cases?
^ Mr. NORTHRUP. Will the minister say that on any previous occasion when an application was made for a certificate the Treasury Board had been warned by such a letter as that of Mr. McCarthy?
532.3


William Stevens Fielding: I do not agree as to the " warning ' in Mr. McCarthy's letter. Mr. McCarthy made a statement and then withdrew his objections, But, even then, we had the sworn-because it is sworn-statement of Mr. Travers. I do not see what
better evidence you could get. Again, I j-tion taking exception to it. There is one
ask the House to note that he was not a convicted prisoner at that time, but a man of standing; and I had the right to attach the same importance to his statement as I would attach to the statement of any other man of good repute coming before us. That being the case, having before us all the
information that we had had in any pre->
farmers' Bank. There is this important
vious case, if we had not granted the Farmers' Bank certificate, my hon. friend from Halton (Mr. Henderson) would have been the first to rise and complain that we were not treating his farmers fairly. Surely, my hon. friend must see that when his farmers send to us, through their directors .and. general manager, an application for a Certificate, we ought not to be condemned, by them at least, because the certificate -was granted.


David Henderson: I do not wish to interrupt, or I might give a reply. But I do not wish to break into the hon. gentleman's speech.


William Stevens Fielding: I am not objecting.
If I may be permit-
Mr. HENDERSON, led to break in-


William Stevens Fielding: Yes.
Mr. HENDERSON-I would ask the minister to explain those words of the Deputy Minister of Justice.


William Stevens Fielding: The Deputy Minister of Justice was asked whether the papers were in proper order, whether the law was complied with, and the Deputy Minister of Justice, who is not the first judge as to the facts of the case, reports that the papers are in proper order. But they have no special significance, such as that which my hon. friend seems desirous to give them. So I claim that in granting that certificate we were simply dealing with these promoters as we have been dealing with all others. I know it is difficult to-day, in view of the calamity which has occurred, in view of the fact that Mr. Travers is now a convicted man, to give the same consideration to Mr. Travers' statements and affidavits that were given to them then. Those who want to look at the matter fairly will say that, whatever Mr. Travers may be now, at the time he made these statements, and wrote that letter, and gave us that affidavit, he was a man in good standing, and he came to us representing men in good standing, and there was no reason in the world why we should not accord to him and to them the same consideration that we accorded to Mr. NORTHRTTP
others who came to us with the same information and under like circumstances.
That is the story of the certificate that was issued on the 30th of November. As I have already stated, after it was issued a statement came from the Bankers' Associapoint in the case I would like to make. Undoubtedly that certificate, as has since been ascertained, was' obtained fraudulently. There was the deception. The minister was deceived, the Treasury Board was deceived, the whole country has been deceived by the whole proceedings of the
point to be borne in mind, that, although there was that irregularity-irregularity is too mild a term-although there was that fraud in connection with the payment of the capital at the beginning, although the notes were given when cash should have been given, and all that was wrong and fraudulent; nevertheless, in most cases those notes were ultimately paid, and the cash went into the bank, and the bank did possess the capital at a later stage, though it did not possess it at that moment. The bank did not get into trouble because of any lack of capital; the trouble with the bank was that although .they had the capital, not at the beginning, but later on-some portion of the notes I believe had not been paid-but the curator's report shows that the most of those notes have been paid, and the bank therefore, ultimately got the capital, and that irregularity was ultimately corrected. The bank got the capital, the bank was able to do business, the bank had the cash, and the failure of the bank came about, not through any lack on that score, but because of the mismanagement of its affairs, which might have occurred no matter what had happened with regard to the issue of the certificate. That I think is a point of great importance to be borne in mind.
Now the next and last stage of the bank's affairs is with regard to its operation after it was organized. I confess that I was one of those who did not regard the institution as very strong. In fact I was reluctant to give them a charter, and would have been much more willing to find reasons for refusing the certificate than for giving it.


Mr. MIDDLEBRO.: In view of the letter written by Mr. McCarthy on the 19th of October, in which he stated that he had brought action on behalf of certain persons, and of the persons who were subscribers to the funds of the bank, does not the minister consider that that was sufficient warrant, notwithstanding the fact that Mr. McCarthy on their behalf subsequently withdrew his objection, for believing that there was irregularity?


William Stevens Fielding: If we had had no later information, I think my hon. friend's criti-

cism would be just, but after that we did receive the solemn declaration of Travers.


William Sora Middlebro: Did not that affidavit in itself arouse the suspicion of the minister, seeing it was made before the man's own solicitor who was prosecuting this application on his behalf?


William Stevens Fielding: My knowledge of law is not sufficient to enable me to deal with that aspect of the question. The affidavit appeared to be all right, I think the affidavit was taken before a duly qualified official and sworn to. However, whatever may be said on that score we have the fact that Mr. McCarthy withdrew his objection, and after he had withdrawn his objection, later on we come to the same evidence that was held in every other bank case-in some cases less evidence was afforded.


William Sora Middlebro: My point is this, that the fact that Mr. McCarthy withdrew his objections is proof that the statements which he made were true, because he said that the matter had been settled, and it would have been settled if the affidavits were true.


William Stevens Fielding: I take it that Mr. McCarthy had a number of claims, that his clients wanted to withdraw from the bank, and he wrote on their behalf, and having withdrawn his objections that was the end. Subsequent to that, we had the declaration or affidavit of Mr. Travers. I want to point out that it was in the same form as every similar affidavit upon which we issued other bank certificates; there was no difference, the proceeding is the same, the information was the same. If there was any difference at all it was more complete in this case than in others. Yet time has shown that it was given fraudulently, it was deceptive, and as I said a moment ago, the fact that Mr. Travers is a convicted man, and is now in prison, makes it difficult to-day to give the credence that was given to his statement. But at the time that statement was made, at the time he wrote his letter, at the time he called upon me, when he made his declaration, Mr. Travers was a man in good standing, and we had the same right to treat his representations with respect as we had to treat with respect the representations of the last bank manager who obtained a certificate from us.


Mr. PORTER.: Was not that affidavit contradicted and shown to be false by the information given from the Bankers' Association? And if that is so, even although the certificate had been granted, if the affidavit was false, did the minister take any proceedings to revoke the charter that had been granted or to prosecute the man who had made the false affidavit?


William Stevens Fielding: We did not have any such information. We did not think that a statement from the Bankers' Association in general terms afforded ground for prosecuting anybody. The certificate had been issued. I do not hink we had any right to revoke the certificate which, having once been granted, the bank was duly organized I do not think we had power to revoke the certificate.


William Sora Middlebro: Who was it that had actual possession of the certificate at the time the minister got information from the Bankers' Association?


William Stevens Fielding: I would have to inquire of my officials; I presume it was given to Mr. Travers who came to Ottawa for the purpose of receiving it. The next stage of the matter deals with the conditions and operations of the bank after organization. I have already stated that I viewed the institution with doubt. I was reluctant to give them a charter, and would have been glad if an opportunity had been afforded to refuse the certificate. But I thought I was doing my duty in giving it to them. I was making no distinction between the treatment accorded to Mr. Travers and his associates, and the treatment accorded to other gentlemen who had come to me under similar circumstances. But after the bank was organized and had been running for several years, and was apparently complying with the law and doing well-at all events, no complaint was made-by and by a difficulty arose in regard to an insurance company in the United States. They had some transactions with the Farmers' Bank, and the Superintendent of Insurance of the state of New York desired to investigate the matter from the point of view of his department. He communicated with our department and wanted us to send a man with a representative of the New York State Insurance Department to Toronto for the purpose of inquiring into the affairs of the bank; and we had to point out that we had no power to send any man intc the bank.
We can call for returns of the bank's operations, but there being no government bank inspection, we had no inspector who had the right to go into that bank. We told the insurance superintendent in the state of New York that we could do nothing, but we advised him to go to the bank and frankly ask for the information, and we were satisfied it would be granted. We communicated from time to time with the Farmers' Bank in certain matters with regard to returns, &c, but we did not feel that we had any right to send an officer into the bank as had been suggested by the gentleman from New York state. In the discussion of the correspondence which was published some time ago one of the


David Henderson: The minister has detailed at some considerable length the reasons why he did not proceed when he obtained information from Syracuse. He did net want to do anything that would jeopardize the bank or which might bring about a collapse. Can he not give me credit for the very same kind of reasoning, when I said I went to him personally, and did not make a public display of my objections in w-riting and putting them on file. I think I acted just along the same line as the minister.


William Stevens Fielding: I must say that I did not .attribute to my hon. friend at any stage of the matter any action which was not actuated by just that purpose. If it is necessary to deal -with the point, let mo remind him again that -the conversations which he alleges he had with me on that point were before the bank was organized and, therefore, no harm could have been done if he had given the information at that time. The bank did not exist, there could have been no Tun on the bank and there was no difficulty about the matter.


Mr. HENDERSON  .@: But they may never have got the certificate. It was about the certificate that I spoke to him.


William Stevens Fielding: That is where my hon. friend and I differ.


Mr HENDERSON.: All right; we will hove to agree to differ.


George Eulas Foster: Mr. Speaker, it is an unfortunate thing that two hon. gentlemen differ in their recollections of what occurred three or four years ago, but such is the case. Beth have stated their positions and it will simply be left to the House and the country to form their own conclusions with respect to the matter. We have, I suppose, to take the word of both hon. gentlemen in reference to their personal acts at that time. I do not think the hon. Minister of Finance (Mr. Fielding), has exhausted the subject by any means, and I feel exactly now, as I felt when I brought my motion as to the return of papers-that this is a matter which requires careful thought and, as far as we' are able to give it, requires just and proper handling on each side of the House. We are not either of us surely ajmna.ted enitirely~by a- desire ttJ-make political capital out ot a~question of this kind. We are all of us, or ought to biv_ very desirous of finding out just what are the defects in our Bank Act, if there are defects, just what are the defects in the management of our Bank Act, if there arc defects, and we are equally as interested in finding out whether the parties, either members of the govemmnt or officials in any of the departments, whose duty it is to stand between the people and possible consequences, have in each case done their whole duty and done it properly. If they have done their duty, they stand all right; if they have not done their duty then they stand for censure and, without attempting to make politcal capital or to make a political defence or an attack, let us settle ourselves down as far as possible to a thorough investigation iof ttt<e circumstances that have developed in this matter. I will agrel with the Minister of Finance and get rid of that part of the discussion entirely, so far as we two are concerned, that as regards the incorporation of this bank, the House is responsible and not the Finance Minis-* ter. The House is responsible and not the government, and every member must take his share of that responsibility. So that, it boots nothing for either of us in this investigation we are carrying on as to the incorporation of the bank. That is a nonessential point in my mind. We cannot fairly _ attribute any fault to the government in the matter and I do not attribute any fault to myself or to other members of the House in that respect. On what ground could you refuse a charter to those who asked for the incorporation of the Farmers bank? You could refuse it onlv; it 1681
seems to me, on the grounds that we had either enough or too many banking institutions in this country already and therefore. there was no room for another. If that approved itself to the committee and the House it would have been fab-ground for refusing the charter. Or, we might have refused the charter because of the personnel of those asking for the charter; if we did not think they had a standing, financial or otherwise, which would give fair belief that they would carry to a successful conclusion the important operation of a banking institution in this country. If these two things were not proven in the negative then the parliament had no right, and the committee had no right, to refuse this bank its incorporation charter, and still less had it ground for refusing it because it was called a farmers' bank. That would have been, to my mind, a reason why the Act of incorporation should have been granted if all other things were equal, and the conditions were complied with; so that we may drop that feature of it out of our consideration. Now, when a bank is incorporated under the Bank Act, it is absolutely innocuous until it is allowed to go into operation. When it is allowed to go into operation it may be a medium of .great benefit and it may be a medium of equally great harm and damage and wrong. The important part of this discussion is, what was the part enacted by the gentlemen in whose charge the Bank Act places the important responsibility and duty of standing as trustees for the shareholders of the proposed bank and not allowing a single dollar of their money to be put in jeopardy in so far as the working of the bank is concerned until the provisions of the Bank Act are actually carried out-not carried out in a ' prima facie ' way, but carried out in a way which proves their actuality and reality. Now, I think all will agree with me that the incorporation could have lain here, if it had been allowed to, for 100 years, and nobody would have been damaged. The possibility of damage dated from the very day that the certificate was granted which allowed this force to be put in operation and the party to it, that was, and is, and will be held responsible for that certificate, is the party into whose hands it is confided by the Bank Act, namely, the Treasury Board. And if you come to look to the Treasury Board, as you look to a company or to a society, as to where the respnsibility lies, you will always find it lies in one or two, or at least in very few hands. In whose hands did this responsibility lie for the granting of this certificate which gave the power to Mr. Travers and his coadjutors to begin their operations? It lay theoretically in the hands of the Treasury Board; it lay actually in the hands of the Minister of Finance, and I call you, Mr. Speaker, to witness that

through this "whole discussion not a single allusion has been made by the. Minister of Finance to any other member of the Treasury Board. It was he who received the document, it was he who asked the opinion of the Minister of Justice, it was he who conducted the correspondence with Mr. McCarthy, it is he who signed the communications with Mr. Travers, he and nobody else, and it was upon his recommendation entirely that the certificate was finally recommended. Now, I think that commends itself to the minds of those who have heard this discussion as being in accordance with the facts. The things for us to consider, not only in the light of two parties sitting opposite each other, but in the light of the efficiency of tne banking institutions of this country, is to look very closely into the conduct of the Minister of Finance, which resulted in this certificate being granted. The Minister of Finance has based his defence on this: I had a ' prima facie' case, I took the evidence" given to me in that case, and if I did that I cannot be called upon to go any further; it is as far as ever was gone before in other cases. Well, I do not think that holds good. I do not think we ought to admit it, and for two reasons, one of which will be best ;put in the form of a question, I ask any member of this parliament if he had half a million dollars which he proposed to stake on a business venture, if he would stake that on the same quality of evidence and no more than the Minister of Finance had in connection with granting the certificate to this bank. I would not; the Minister of Finance himself would not. He said 'here to-day that he did not know Mr. Travers and never had met him before. Would he entrust half a million dollars to the management of Mr. Travers and gentlemen whom Mr. Travers might tell him were associated with him, when he did not know that a single one of these gentlemen was so associated with him, and when he did not know Mr. Travers himself and had never met him until a few days before the [DOT]certificate was granted? But, did not the Minister of Finance stand in exactly that position with reference to the $500,000 and more that was subscribed by the shareholders of this bank. Was not that money put in his hands in trust? The promoter of a bank comes to a man and the man says: yes, I will subscribe $5,000, because in this country up to the present time-I am not going to say it is so now- I feel sure that whatever happens after we all get together and are able to make our own board and manage our own affairs, whatever happens after that will be our fault, but up to that the Minister of Finance is my surety, first, that it will not be simply my subscription which goes in there
Mr, FOSTER
as bona fide, but that $500,000 with mine is to go in there as a bona nde subscription; it will not be only my money that will be paid up but it will be $250,000 which is bona fide put up, and until the conditions of the law are complied with my money is as safe as if it were in the bank, my money is in the hands of the Minister of Finance and it cannot be spent and cannot be squandered in any way. Now, that is the fair play which the Bank Act gives to any man; it is a guarantee that he is protected in that way. Therefore, I say the Minister of Finance should be equally as careful in connection with this money as he would be in the investment of the same amount of money for himself; he ought to be more careful for reasons which will commend themselves to the mind of any hon. gentleman in this House.
Now. the Minister of Finance had certain information, and it was his duty to come to a conclusion from evidence which was satisfactory to himself. I am glad to see that he does not depend on the opinion of the Minister of Justice, as some hon. gentlemen seemed to do when we discussed this question before, because he has acceded to the view that the Minister of Justice simply gave his opinion on the regularity of the papers, and that the matter of fact was to be decided by himself. So it must be. I ask the Finance Minister to correct me if I am wrong: If he asked the Minister of Justice for an opinion on the merits of the case, did he put before him all the information that had been brought to himself? He could have done nothing less if he was asking for an opinion on the merits. But he did not ask for an opinion on the merits. He simply wanted to know from the Justice Department if the papers were sufficient, and the Justice Department told him: The papers are sufficient, if you accept the evidence, for you to issue the certificate upon. The Justice Department threw back upon the Finance Minister himself the duty of seeing whether the evidence were sufficient or not. Now. note this, that the minister had his doubts in 1906 as to this bank. He has acknowledged that today. He said in 1906, after two failures to raise the funds:	My view was that they
were not the men to carry this bank to a successful conclusion, and I did not favour another extension. There is guard number one. The minister knew that this very outfit had attempted twice ^ and had failed to get the money, and two year's time had been spent, and he was of the opinion that if they could not get the capital in two years' time, they were not likely to be successful, and, therefore, he was against granting them another six months. So he was on his guard. Why should we, he said to himself bother with them any

longer? There is danger in it; don't let us grant them another term of six months. There was caution number one, and from that time on the Minister of Finance was bound, because of his own impression, to take especial care to see that_Jthere was bona fide capital, and nothing~~iess. But there was something else. The minister had knowledge in this case which I had not when I was Finance Minister. He wrote a letter to Mr. Travers on the 30th of November, from which I will read this extract:
There is a phase of the matter which I should like to bring to your notice so that you may consider it at once. It has been represented to us that in some previous instances where an application was in all respects apparently regular, there was actually an evasion of the intention of the Bank Act in relation to the paid-up capital. We have been told that in some cases the subscribers did not actually pay in cash but gave notes to the provisional directors which were used to raise the money.
The Minister of Finance had in his own mind, then, a knowledge that in previous cases there had been an attempt, whether successful or not-this letter would make it appear that it had been successful-to provide capital not in a bona fide way. but by the use of notes. There was guard and caution number two.. If there were nothing else, the Minister of Finance, as according to his own letter, should go below what was apparent on the surface. You notice his words:	' Where an application was in
all respects apparently regular,' this thing had taken place. Here was an application in all respects apparently regular, yet it might be wrong. Why did he not use the knowledge that he possessed to probe a little into this case to find out whether there was anything wrong underneath the ' apparently regular' application that was made? But the minister had more than that. On the 8th of October, on the 11th of October, and on the 19th of October, he had the letters from Mr. Leighton McCarthy. Now, the minister did not attach all the importance that I think is due to those letters. On the 8th of October came this letter:
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.
Bear in mind the information that the minister already had. Here was another piece of information which said, not in previous cases, but in this case, some of the subscribers to this bank are going to dispute the regularity of the subscriptions. Mr. McCarthy's letter goes on:
I have not time to-night to give a full statement of the grounds 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.
There is no need of reading the rest of the letter; that is the pith of it. On the 11th of October, Mr. McCarthy had not received any word. He gets anxious, and he sends the following telegram to Mr. Fielding:
Please wire me assurance in reference to stay of certificate of Treasury Board mentioned in my letter of Monday night.
He gets the assurance from Mr. Fielding, and that is followed up by a letter from Mr. McCarthy confirming and carrying out the substance of his telegram. Then, on the 19th of. October there is this most important letter, which is more than a letter of information from a man. It is the actual transcript of an action undertaken before the High Court, which is more than gossip, more than rumour, more than what you meet with upon the street. I will read that letter:
Re the Farmers' Bank of Canada.
My dear Mr. Fielding,-I beg to inclose the special endorsement upon a writ of summons in the High Court of Justice for Ontario, which will be issued by: William A. Dixon, John Sproat, George Castle, William McLean, Finlay McCallum, Robert Hume, James Murray, George Denoon, John McLeod, Jane Shuert, William 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, James 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 directors of the Farmers' Bank of Canada, for a certificate under section 15 of the Bank Act on the grounds alleged in the inclosed special endorsement, and other grounds which may be disclosed upon the examination of the alleged subscribers for shares.
My hon. friend knew Mr. McCarthy, he had met him before, he knew him as a bright man of the party, and a good man in this House, and a stable man in the country. What does Mr. McCarthy say? He says:
I 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 be made of the cash received and the proceeds of these notes, or sufficient amount to make up $250,000.
[DOT]5335

That was special information, no rumour about that.
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 legality, and I would be pleased to go to Ottawa upon any appointment you may make for the further consideration of this matter.
What was the reply to that, and I want the minister's attention to this. This was dated October 23:
Bear Sir,-I beg to acknowledge the receipt of your_ letter of the 19th instant, to Mr. . Bidding's address, respecting the Farmers' Bank of Canada.
When application is made by the Farmers' Bank to the Treasury Board for a certificate to enable them to commence business, the representations contained in your letter with its inclosure will be laid before the board.
T. C. BOVILLE, Deputy Minister of Finance.
The Minister of Finance made a point as he thought, against my hon. friend from Halton (Mr. Henderson) by saying:	You
are not quite right when you say that only three days intervened for examination, the application being made on the 27th November, and the certificate being given on the 3rd of the same month. The Minister of Finance said: Bear in mind that on October the 23rd the application was in, in the shape of a deposit of $250,000 to my credit. Now I will put this question to the hon. minister. From the 23rd October, 1906, until the 27th of November, 1906, will the minister say that either he or his department [DOT]took any step whatever to convince themselves of the bona fides of this application -or made any inquiry as to the standing or actions of the men behind it? That is a simple question, but there is a good deal in lit. I will go further. The information which Mr. McCarthy gave was to go before the Treasury Board. Let me *ask the minister if the Treasury Board met to consider this matter before the 30th of November, the very day when the certificate was granted. And I will ask him if he ever put before that board the information which Mr. McCarthy gave him, and which he declared would be put before them? That can be very simply answered.


William Stevens Fielding: I cannot remember vdiat exactly happened between these dates.


George Eulas Foster: My hon. friend has his deputy there. If the Treasury Board met, and if that board did consider that information, it must be on record, but I am just *asking him if that is not the case. So far as %ve can gather from the whole tenor of this thing, no investigation at all was made, either by Mr. Boville, the Deputy Minister of Finance, or the Minister of Finance him-


George Eulas Foster: self or any other official with reference to the bona fides of this proposition. If I am wrong, that can be very easily shown. Mr. McCarthy's letter was accompanied by a document, and this is a copy of the document which accompanied it. My hon. friend (Mr. Fielding) tried to justify himself by saying that as Mr. Travers had assured him on the 27th of November that Mr. Beattie, of London, was a director, that was prima facie evidence of the respectability of the whole affair. But in this very document which Mr. Leighton McCarthy sent to the Finance Minister on the 19th of October, there occurs this as one of the indictments or one of the charges in this high court suit:
That Major Thomas Beattie, represented by the prospectus to have consented to act as a director, had not subscribed to any shares, and refused to be a director, and refused to allow his name to be used in any way in connection with the bank; and the plaintiff alleged that the names of other persons were represented by the prospectus to have consented to act as directors, who had not subscribed to any shares or given any authority for any such publication.
That was in the hands of the Finance Minister, and ought to have been in the hands of every member of the Treasury Board, because the minister had promised that it should he. Was it? What does this allege? On every hand it puts the minister on his guard. The minister seemed to think that there was nothing in this question, but this one point:	Were those who
were alleged to have been defrauded settled with? If they were, the objections were taken away and nothing remained.


Robert Laird Borden: Hear, hear.


George Eulas Foster: For the Finance Minister, everything remained, and what was removed was nothing, absolutely nothing. What remained? There remained the charge of fraud, the charge of misrepresentation, the charge of having directors on the prospectus who were not directors, the charge of paying immense sums in different ways that were unauthorized-all the grave charges that were made in the suit in the high court remained, and Mr. McCarthy could not and did not take them away. My hon. friend, the Finance Minister, knows that well enough. Did he read the judgment? The judgment was given on the 27th. What does it say, as clearly as any words can say it?
It says: On the 27th day of the month appeared before me, solicitors for both plaintiffs and defendants. The plaintiffs had been bought out and all their claims and obligations had been cancelled, and the two solicitors agreed to remove the case without costs. What does that prove? Would these men have been settled with if they had had no case? What was their

case? It was:	You got our names and
our subscriptions by fraud and misrepresentation; in one ease a man subscribed $1,000, and you put him down for $10,000. And other cases were specified of similar transactions. The defendant's lawyer comes and says to the opponent: Let's settle; we have bought out the plaintiffs. If you want to go to the evidence, you will find the evidence. Mr. Travers made a personal loan and sent Mr. Hunter and Mr. Lindsay out to the county of Hal-ton, bought out the claims, squared them up, took away the case from his opponent, and then came back into the court and a settlement took place. And any man who knows anything about these things could judge it to be nothing else than an absolute confirmation of the charges of fraud
Now, let me put one more case to the Finance Minister,-the confiding Finance Minister, the simple-minded. Finance Minister, the man who never looks below the. surface, but just sees what is on the top and if that is apparently all right goes no further down. He held in his hand the affidavit of Mr. Travers swearing to a list of bona fide subscribers as of that date who had subscribed what was put opposite their names and had paid what was put opposite their names. And, if he had taken the trouble to make the investigation, he would have found on that list the names of these very plaintiffs who had been bought out, who had no stock and whose names should not have been upon that list.
At six o'clock House took recess.
After Recess.
House resumed at eight o'clock.


George Eulas Foster: And the plaintiffs allege that the acts and proceedings of the provisional directors were illegal and irregular; and the plaintiffs allege that the agents and solicitors professing to act under the name and authority of the provisional directors have procured a large number of subscriptions for shares, and have received the sum of $175,000 more or less on account thereof

What for?
-for the purpose of raising money to make a deposit with the Treasury Board of the Dominion government.
There were the resolutions spread on the minutes of the provisional directors' meetings, and all that the minister had to do when these warnings came to him was to ask for these minutes. He could have had them, and if he had had them this trouble would not have occurred. But it went further. On October 8, 1906:
Moved by James Gallagher, seconded by John Ferguson, that the provisional directors-
I want the House to note how far this, goes:
That the provisional directors execute a power of attorney to W. R. Travers for the purpose of endorsing all notes in their names as provisional directors and of signing their names to a note or notes for the purpose of raising funds to put up the deposit with the government, and we authorize the secretary to hand over all notes to W. R. Travers for said purpose.
Simple business precaution, especially when aided by the warnings to, and the premonitions of the Minister of Finance, by the statements of Mr. McCarthy, by the writ which was issued, by the result of that writ, would surely have advertised to the Minister of Finance that he ought to take, a little trouble to look into this matter to the extent at least of having the minutes of the directors' meetings in his possession. When Mr. Travers was asked in court why this last resolution was passed he was frank enough to say:	We could not
raise the money in any other way. That is October 8th; on October 15, Mr. Travers took $100,000 odd of'the notes of subscribers to the Trust and Guarantee Company, and made his loan personal of $81,000, and $80,000 of that went as a deposit as part of the $250,000 that was to be deposited to the credit of the Minister of Finance. But that was not enough. On October 22, he took other notes (not belonging to the subscribers to the bank), to the same company, raised a loan of $20,000, and had that by cheque sent to the credit of the Minister of Finance as a part of the $250,000 deposit. $100,000 of the $250,000 was not bona fide paid in cash by the subscribers; it was raised as a loan from notes they had given which might.
53-! 3

be paid or might not be paid, but which were jjiven absolutely in contradistinction to the doctrine of the Minister of Finance as well as to the express provisions of the Bank Act. Now, Sir, that evidence lay close at hand and was easily obtainable, and why in the world-can any one answer the question-with all these warnings, and with the means of getting the information, did the Minister of Finance not take the simple precaution to get it. Mr. Travers brought a stock list to the Minister of Finance, and he swore to it although the swearing was false. That was the stock list about which the Minister of Finance never asked the least question; he simply took Mr. Travers' statement that it was bona fide. Would it have been a difficult matter for him, to have asked Mr. Travers-about whom he knew nothing until three days before the certificate was granted-to kindly bring him the stock list as subscribed to by the subscribers, and if that list had been brought the -evidence was all over it that the stock list which was handed in by Mr. Travers was a fake list. How was it done? Mr. Travers describes it-They had not enough money in the early subscriptions, and the early payments to make the deposit; they went to work and gc>t notes from the subscribers, they discounted those notes and raised the money and they took the money thus raised, and to use their own language they spread it over the list of subscribers so. that the man who had not paid a cent was credited with one or two or three thousand dollars as paid. John Jones subscribed 10 shares, paid 10 per cent thereon and gave his note for the rest, the note brought in a discount, and the amount of that discount was not written down to this man, but it was placed to another man who had not paid anything. That, is the list that the Minister of Finance swallowed, that is the list he raised no question about, and all he would have had to have done was to ask for the original list, and he would find the evidence of the pencillings, and spreading on every page, but, he did not do it. There were officers and directors in that bank. How easy it would have been for the Minister of Finance if he had the least doubt, to write to some of these men and say: I find such and such a state of things, will you give me your view with reference to it. How quickly he would have got an answer from the hon. member for London (Mr. Beattie). How quickly he would have got a.n answer from dozens and dozens of others. The Minister of Finance has very good financial friends in the city of Toronto; he could easily have written to any one of them, and they would have given him a proper estimate of what this matter amounted to, and what Mr. Travers amounted to. If he had written to any one of the mem-Mr. FOSTER.
bers of the Bankers' Association of Canada they would have given him that information, and would have been glad to have given it. The Bankers' Association is a part of the machinery of the Bank Act, and is at the disposal of the Minister of Finance for information, and if anybody can get information on these things the associated bankers can. Lying there for a month were three cheques, to the credit of the Minister of Finance, one from the Trust Company, for $80,000, one for $20,000, and one I think for the other $150,000; there they were lying in the Bank of Montreal to the credit of the Minister of Finance. Are those things so hidden that bankers do not know what is there? Do you mean t-o say that the question would not arise:	Why, if the Traders' Bank is
the bank of the Farmers' Bank do we have cheques from the Trust Company, and the information did get to the banking association as I shall soon show, and the Minister of Finance could have had the information just as easily as not. Did he ever ask any one for it? Now, he read Mr. Travers' affidavit. Let me just recapitulate. Mr. Travers makes an affidavit as to the acts of incorporation. They are plain; they are written in the statutes; he could not make a mistake about those. He makes an affidavit with reference to the prospectus. The prospectus was there to answer for itself- that is all right. But he says:
Now shown to me and marked exhibit 'D' to this my declaration is a list of the subscribers to the capital stock of the said bank correctly setting forth as to each subscription the name of the subscriber, his address, the number of shares subscribed for by him, the amount of such shares and the amount paid in thereon. Each of the said subscriptions is a bona fide subscription to the capital stock of the said bank.
Travers swore to that; that was a lie. Mr. Leighton McCarthy told the Finance Minister a month beforehand that that was not so; and yet the Finance Minister says, what could I do? I had to take Mr. Travers' declaration. Mr. Travers also swears:
The provisional directors of the said bank on the said twenty-third day of October, 1906, caused $250,000 of the moneys so paid in and which actually had been received in respect of the shares of the capital stock of the said bank to be deposited in the Bank of Montreal to the credit of the Minister of Finance and the Receiver General.
Mr. Travers swore to that; it was an absolute falsehood. $100,000 of that was money that was not paid in by the shareholders, but was borrowed to make up the deposit under the condition that as soon as the Finance Minister let go the $245,000, this would be paid back, and it was.


An hon. MEMBER.: At what interest?


George Eulas Foster: 10 per cent interest and a bonus of $1,000; and if I had been a lender of money, I should have wanted that much or more on that kind of security.


Mr. AMES.: Who lent it?


George Eulas Foster: The money was loaned by the Trust and Guarantee Company, and the bonus went to that company, accord-ins to the evidence. Mr. Travers then
swears:
I acted as secretary to the said meeting of subscribers holden on the said twenty-sixth day of November, 1906, and at the said meeting upwards of eighty subscribers were present in person.
According to the minutes of the bank 69 subscribers only were present in person.
The subscribers adopted by-laws for the bank, and elected nine directors duly qualified under the Bank Act to hold office.
They elected only eight directors, but a resolution provided that they should elect twelve. So that they did not elect the directors that were required by the law which they themselves declared necessary. Mr. Travers also swore:
The provisions of the Bank Act as to the subscribers to the capital stock of the said hank and the deposit with the Receiver General, and as to the notice of the said meeting of subscribers and the proceedings of the said meeting have been fully complied with and pursuant to the direction of the said meeting of subscribers and board of directors elected at such meeting, application hereby is made for the certificate of the Treasury Board to peimit the said hank to commence the business of banking in accordance with the said -let.
The minute book of that meeting and of the directors shows no resolution authorizing an application for the Treasury Board certificate, which would have been made clear if the simple precaution had been taken of having a certified copy of the resolution or of the minutes. I have already spoken with reference to the stock list. So that all the things that were essential, that were sworn to by Mr. Travers, turned out afterwards t-o have been falsely sworn to. The Finance Minister says, I could not know that at the time. But he could have taken the precaution to get corroborative evidence which was at his hand and easily obtainable., That he did not do. He preferred to take a simple declaration of a man whom he had not met until about three days before.
Now 1 come to that wonderful 30th day of November. I do not think any more eventful day than that has for many years dawned upon the city of Ottawa. Business was done with hurricane haste. If the departments of this government always worked with such speed and alacrity, there
would be no arrears in the government business of this country. On the 30th day of November an interesting number of people were in this city. Having made the deposit, having had the subscribers' meeting, Air. Travers makes haste after the 27th of November to come to Ottawa for his certificate. With him came Mr. Hunter and Mr. Smith, who had been the seejetary of the Provisional Board. Mr. Hunter came as the legal adviser of Mr. Travers. Mr. Smith came for a far different purpose. He had, figuratively speaking, blood in his eye or money on his heart, and he was to demand of Air. Travers, before that Treasury Board certificate was got, that he should be paid $2,500. or worse would happen. He employed as his lawyers Guthrie & Pringle of Ottawa. Guthrie & Pringle put the claim before Air. Hunter, who was acting for Air. Travers. In the end Guthrie & Pringle settled Smith's claim by taking an I. O. U. for, $1,800 from All. Travers who also had to pay the cost, $100; and, to use the expressive phrase of Air. Travers, ' I got rid of another difficulty.' When pressed to say why he should pay Mr. Smith, he supposed the reason was that Air. Smith knew the fraudulenc.y of the list, and that if he had told that to the Finance Minister, it would have been all up with Mr. Travers' application for the certificate of the Treasury Board. So that Air. Smith received his $1,800 of hush money, Alessrs. Guthrie & Pringle received their $100 of costs, Air. Smith hied himself home, and Air. Travers was happy once more. But a question arises here:	Did Mr. Hunter, or did
Messrs. Guthrie & Pringle know all the circumstances of the ease when they pried that $1,800 of hush money out of Travers' pocket and into the pocket of C. F. Smith? Air. Travers said they did. If so, that raises another interesting question. Now, all this was taking place on that 30th day of November. But here is a singular circumstance. On the 30th of November the Minister of Finance writes a letter to Air. Travers. Air. Travers says that letter was shown to Mr. Hunter. Air. Hunter left this city on the night of the 28th of November. How did Air. Hunter come to see the letter written by the Alinister of Finance on the 30th of November-how did he come to see it two days before the 30th November? If I understood the minister aright this afternoon, I understood him to say that he had previously told Air. Travers the nature of the letter he was going to send him. Then Mr. Travers must have had a conference with the Finance Alinister, and my hon. friend must have intimated to him what he was going to require from him in the shape of a letter, and must have told him that he would send him a letter on that line. Then, Air. Hunter, and

Messrs Pringle & Guthrie, who were both consulted1 about that letter, might have seen it two days before.


William Stevens Fielding: The letter was written on the date mentioned, the 30th November, and nobody could have seen it two days before. Mr. Travers came to my department in connection with the certificate and I asked that he be sent in. In the meantime I had drafted a letter: to Mr. Travers, because I was not aware at the time that I could have a personal interview with him. When he came I discussed the matter with him along the lines I mentioned this afternoon, and I said to him that I was sending him a letter on the subject, and would like an answer. That was on the 30th of November.


George Eulas Foster: Then my hon. friend had a conference with Travers previous to Travers receiving the letter, and yet the conference was on the 30th of November.


William Stevens Fielding: On the same day.


George Eulas Foster: I take the minister's word, but if I take that, the other ,mystery is unsolved, for I find this letter written from Toronto on November 29th, 1906:
W. E. Travers, Esq.,
Russell House
Ottawa, Ontario.
Dear Travers,-Mr. Hunter called in this morning, and I was glad to learn that so far things are going on nicely, and trust you will have no trouble.
Mr. Hunter went over all the applications and informs me that they are in first-class shape, and that he would have no hesitation in exhibiting them if called for. At his request I inclose three blank checks out of the check book in case you have occasion to use them.
Wishing you success, I am,
Yours faithfully, (Sgd.) .T. B. FITZGIBBON.
P.S.-Nesbitt has just called to inquire how things were going, and I have given him the gist of Mr. Hunter's report this morning.
So that on this 30th of November we have this interesting lot of business done. The Minister of Finance writes a letter to Travers in which, after regretting that he ,was not able to see him yesterday, which would be Thursday, the 29th-that was the date of the Budget speech I think-he says:
I was unable to meet you to consider your application for the issue of a certificate to authorize the bank to commence business.
Up then to November 30 the date of that letter, the Treasury Board had not had under its consideration the application for a certificate.
It was not the Treasury Board which was unable to meet Travers, but the Finance Minister. The Finance Minister takes the Mr. FOSTER
responsibility and no doubt is quite willing to take it. He goes on to say:
I shall be glad to see you to-day at my office at any time before one o'clock if you can call. Or I might be able to see you later, between four and five, at the House of Commons if that will be more convenient.
There is a phase of the matter which I should like to bring to your notice so that you may consider it at once. It has been represented to us that in some previous instances where an application was in all respects apparently regular, there was actually an evasion of the intention of the Bank Act in relation to the paid-up capital. We have been told that in some cases the subscribers did not actually pay in cash but gave notes to the provisional directors which were used to raise the money. On account of information of this kind, which has reached us in relation to a previous case, we deem it proper to scan very closely every application for a certificate which comes to us. I shall be glad to have an assurance that nothing of the kind has taken place in relation to the subscriptions for the Farmers' Bank, but that the amounts set forth in the application as having been paid up have in every case been bona fide cash payments.
That is the letter to Travers. In a note written the same day, after he had explained the circumstances and got the opinion of Guthrie and Pringle upon that letter, Travers replied:
Ottawa, November 30, 1906. The Hon. W. S. Fielding,
Finance Minister, Ottawa.
Dear Sir,-In reply to your letter of the 30th November, I have to say that in the case of the Farmers' Bank of Canada, the provisional directors did not raise the money in the way mentioned by you.
Did the minister take that as an answer to his question? Surely not. What was the minister's question? It was this:
I shall be glad to have an assurance that nothing of the kind has taken place in relation to the subscriptions to the Farmers' Bank, but that the amounts set forth in the application as having been paid up have in every case been bona fide cash payments.
He is told, not that this did not take place, but that the provisional directors did not raise the money in the way mentioned by him. And they did not, because in October and July they had given over the raising of money absolutely to Travers himself, and from that time forward Travers used their names, endorsed their notes to which he had signed their names, and got discounts 'in that way. Travers does not say that the money had not been raised in that objectionable way, but that the provisional directors did not do it. Did the Finance Minister take that as an absolute and definite answer to his question? If he did, I differ with him as to its being an answer at all. It is not an answer but an evasion which, though true in itself as

to tlie provisional directors, did not deny that the thing itself had been done as it really had been done by Travers himself.
Now, I asked my hon. friend to bring down the minutes of the Treasury Board meeting of the 30th of November. The minister brought down an extract, and the extract was that the Treasury Board had met and passed the application and had ordered the Treasury Board certificate to be granted. I then said to the Minister of Finance that it was not an extract I asked for, but the whole minute. And I got the whole minute. And the whole minute and the extract were exactly the same. Does the minister think that is an evasion?


William Stevens Fielding: I desire to say, there is a printed form for extracts from the Treasury Board minutes, and the return was made on that form. The moment the full return was asked for, I inquired, and found that that was the whole record for the day.


George Eulas Foster: I have the two, and I will give them to the Finance Minister.


William Stevens Fielding: They are both the same.


George Eulas Foster: No, one is the full minute and the other is marked in writing ' Extract.'


William Stevens Fielding: That is the usual form.


George Eulas Foster: Printed; but this is written. Here you have it at page 27 of the Return, ' extract from, the minutes of a meeting of the Hon. the Treasury Board, held at Ottawa, on the thirtieth day of November, 1906." It is not an extract; it is the whole minute: nothing else was done that day. Now, what I asked the minister was, at what hour was that Treasury Board held, and he refused to give me the hour. Why should the minister refuse that information?


William Stevens Fielding: I told my hon. friend I did not know.
Mr. FOSTER No, the hon. gentleman refused to give it. I refer him to 'Hansard' on that point. If he did not know, he had his office behind him and could easily find out. Why did I want to know that? Tn the interest of truth. The letter to Mr. Travers says: You may see me up to one o'clock at my office, or you may see me at the House of Commons any time after four o'clock. When did Mr. Travers see the Finance Minister? Was it in his office before one o'clock, or was it not until after four o'clock in the House of Commons?


William Stevens Fielding: I can answer that. It was in my office. I cannot give the hour, but, I should say, probably before the lunch hour. It was not in the House of Commons.


George Eulas Foster: That is satisfactory. If the minister had told me that before-


William Stevens Fielding: The hon. gentleman (Mr Foster) did not ask it.


George Eulas Foster: I asked what hour.


William Stevens Fielding: He asked what hour the Treasury Board met, but not at what hour I met Mr. Travers.


George Eulas Foster: Well, there is not much difference between the two, is there?


William Stevens Fielding: So long as my hon. friend understands it. 1 give him the facts.


George Eulas Foster: If the minister had given me this information, it would have been just as good for me as the hour of the Treasury Board.'~Now, I wish to point out something else. The Treasury Board Act says that the Treasury Board shall consist of the Minister of Finance and any five other ministers. If the Act is lived up to-and if any Act is lived up to, this should be-there will be six members of the Treasury Board. But, by the return I hold in my hand, only three ministers are reported to have been present at this meeting of the Treasury Board on the 30th of November. If that be so, there was not a majority. The ministers noted as present besides the Finance Minister are Sir Richard Cartwright and Hon. Mr. Brodeur. Now, what I want to ask the Finance Minister is this:	Was the
Treasury Board regularly called for that day, or is this what we would call a hole-and-corner meeting, got up hurriedly? And when it was called and these three members were there, were the facts of the case in reference to this application, as the Finance Minister understood them, laid before the Treasury Board for its consideration?


William Stevens Fielding: Does the hon. gentleman wish me to answer? I cannot say exactly how that particular Treasury Board was constituted. With regard to only three members being present, I shall be happy to show the hon. gentleman: many occasions on which the Treasury Board business has been done with three members present. In that respect, there is ample precedent. What probably happened was that this Treasury Board took place at the Council. I wish to be very frank with the House about this matter. When there is abundance of time, the Treasury Board meets at my department, but we occasionally have a Treasury Board at the Council chamber where the members confer and agree upon what is to be done. But there are occasions, both with regard to matters of the cabinet and with regard to matters of the Treasury Board,

when it is not convenient or possible to get the members together, and you have to send information round and obtain the report in that way. My impression is that in this particular case the conference probably took place at the Council meeting that afternoon, but I would not speak definitely.


George Eulas Foster: The minister does not say anything as to whether the precedent history of the matter was laid before the board.


William Stevens Fielding: The whole matter was probably discussed. As to what particular information was laid before my colleagues on that occasion I cannot say. Of course, they would ask for information and I would give it, I accept the full responsibility of advising my colleagues in this matter. They would ask my advice and I would give it.


George Eulas Foster: That makes it all clear; we have now the modus operandi. I have only a few words more to say. The Minister of Finance says that the same evidence was accepted in this case as in other cases. I wish to ask whether there was any precedent case in which the circumstances surrounding an application were of the same nature as in this? The Finance Minister said; If I had denied this Treasury Board certificate, I should have been accused of not treating the farmers right. I do not think the Minister of Finance would take the position that, in order to parry criticism, or to keep himself from being wrongfully attacked, he should cease to perform his duty of guarding the interests of the shareholders which were confided to his trust. Which would the farmers like better-that he should make a thorough inquisition into this matter, and stop it on the demerits of the case and save them their money, or, for fear of criticism, should allow it to go through and them to be involved in this loss? _ There is only one answer to that question. It was the duty of the Finance Minister not to look at criticism one way or the other, but to perform his whole duty as the trustee for the shareholders, and that duty was to guard their rights. He says now:	I have been deceived. When
did the Finance Minister know that he had been deceived? He knew it, or had good reason to believe it, within twenty-four hours after he had granted that certificate, for there is the letter of Mr. Clouston, of the Bankers' Association, making the statement in black and white that he had reason to believe that this denosit was not a bona fide deposit and that therefore steps should be taken to prevent the bank going into operation. Tf, within twentv-four hours of issuing this certificate in 1906 the Minister of Finance knew that he had been deceived, what has he done up to the present time to punish the men who deceived M. FIELDING.
him? Is it to go forth that in this administration men, in a matter of this kind, can combine and deceive the Minister of Finance, and by reason of that deception bring ruin upon hundreds and thousands of people, and yet the Finance Minister and the government not stir a hand to ferret out and punish the men who deceived him?
Why, Sir, Mr. Clouston wrote a letter on the very day that the Treasury Board issued the certificate. That came to the minister the next morning, the minister read it in his mail. Under that allegation by Mr. Clouston there was only one thing for the minister to do. He had given a cheque for $245,000 of the shareholders' money to Mr. Travers, and it was his duty simply to advise the bank not to honour that cheque, and to have written or telegraphed to Mr. 'Travers that he wanted to see him immediately, to have brought him here, and to have had that matter thoroughly explained before he allowed the shareholders' money to go into the hands of Mr. Travers. More than that, he knew that the associated bankers sent their man, Mr. Knight, up to Toronto, and Mr. Knight investigated in Toronto, and came to the conclusion that the deposit had been made with borrowed money. He telephoned Mr. Burn, Mr, Burn communicated with the department; and yet, with both Ml. Clouston and Mr. Knight, and the evidence standing out before him, he took no steps to collar that money and to prevent the bank from going into operation. If I am rightly informed, the bank did not open its doors to do business until the 2nd day of January, 1907. On the 18th of December, Mr. Knight made his report to Mr. Burn, and Mr. Burn presumably made his report to the Finance Department, and even then the Finance Minister did not do anything. The bank was not in operation, the money would have been saved, this gigantic series of mal-deeds vcould all have been impossible.
The minister says that the bank failed on account of bad management. Even though, he say's, $100,000 of capital had been depleted, yet afterwards, he does not know quite when, the capital did begin to come in. Good management would have saved it, bad management was its curse. I go back a little further than that, and I say that a bad manager rvas the curse of that bank, a bad manager was the very man that could have been unmasked by my hon. friend and put out of business, because every transaction that he took in the formation of that bank was accompanied by perjury, and fraud, and misrepresentation. If the Finance Minister had taken hold of it and unmasked Mr. Travers and his operations, there might have been bad management, but it would not have been bad management by Mr. Travers, because Mr. Travers would have been impossible as manager of any

bank. There is where I think my hon. friend made a great mistake. Look at it. He had his own opposition to the extension: warning, premonition, No. 1; the other cases previously occurring in his mind, to his knowledge: warning No. 2; Mr. McCarthy's letters, and the judgment: warning No. 3. The appeals and conversations of my hon. friend from Halton, whose word I am bound to take, for this consideration, that while the Finance Minister is busy with many things, my hon. friend from Halton though a busy man, lias less business, and would be more likely to follow this matter out in the interests of his constituents. So without any disrespect to the Minister of Finance, I would say that I am bound to think that my hon. friend beside me would not have made the mistake he has made in regard to his memory of those things. But Sir, will the Finance Minister tell me and tell this House that had no other warnings? I asked him again the question whether any of the officers of his department had had interviews and warnings. He never answered that.


William Stevens Fielding: I will answer at once. I certainly had no other warnings-I do not know what my hon. friend refers to-I had no warnings that have not been brought to the notice of the House in the discussions that has taken place.


George Eulas Foster: Very well, then. I will make what I think is a practical test of that question. My hon. friend has said that there is no work for a commission in this matter, the courts will do all the work that is necessary to be done. I deny that all the facts can be brought out in a police court examination. It does not seem to me that the most important part of the investigation into this business can be or will be taken up in the courts. There is a lot of information which lies at the very essence of this matter that the courts will not look into at all. And with reference to all that has taken place in granting the certificate, my hon. friend dismisses it with the simple statement that it is all a matter of record. It is not all a matter of record. I want to put the gravity of this case before my hon. friend and my right hon. friend. Up to this occurrence, the people of Canada had absolute faith that when the Minister of Finance granted a certificate for a bank to go into operation, everything was perfectly square. They had perfect faith. Have thev now? It is absolutely shattered, and until something is done, and a thorough investigation is held, coupled with legislation wherever legislation is needed, to strengthen the preliminary operations, until the truth of the matter is brought out, this country will not have faith in any bank which is put into a position to do work through the Department of Finance of Canada. I believe it is absolutely necessary, no matter
whom it hits or whom it hurts, to have a thorough investigation into everything connected with this matter. I would go further, and take in all the banks that have failed during the last four or five years, the curators' reports of which furnish strange reading to any jjerson who will go through them.
I ask the government to grant that royal commission which my hon. friend has asked for in his motion, and I will bind myself to add material evidence in the line of the evidence of my hon. friend from Halton, if an opportunity is given me before that commission. There is other evidence to be brought out, give us a tribunal and we will bring it out. Who is to be hurt by granting this commission? Who can be injured? The government does not mind the expense of it. It is easy to get able men to carry it out; it can be carried out without great trouble and much time. What reason is there at all why it should not be granted? We ask that it be granted. There are questions after questions that we would like to ask the officers of the department, the Finance Minister and the members of the Treasury Board, and numerous others. If there was a tribunal before which these could be put, all the facts could be obtained. Why should we not have that information? It is not for the benefit of my hon. friend or of myself. It is not to pull one down and build another up, it is to get the absolute facts of the case? Why should we not have the commission?


Henry Horton Miller: Mr. Speaker, the hon. member for Halton (Mr. Henderson) has said that his constituents are troubled over this matter of the Farmers' bank, many of them having become shareholders, many of them having deposits and many of them having suffered severe loss. The hon. gentleman says that it is expected that he shall do everything here that he is able to do. lit is the right of every member of this House to keep himself squared with his constituents in any way that he legitimately -can and perhaps this is not the only instance where men have occupied an hour or two of the time of the House in an endeavour to square themselves with their constituents at home. The hon. gentleman has said that the name of this bank-the Farmers' bank- won the confidence of the people of his constituency and of the country. It may be that there is something in that, but I take it that there was a great deal more in the prospectus that they issued to the public and in the representations made by smooth tongued and skilful canvassers who were engaged in the selling of the stock. I notice by the prospectus that one of the features of it is the statement of the large -eturns that have been made by Canadian banks in times past. I find a list of twelve

and then go on, organize and do business Sec. 15 of the Bank Act says:
No certificate shall be given by the Treasury Board until it has been shown to the satisfaction of the Board, by affidavit or otherwise, that all the requirements of this Act and of the special Act of incorporation of the bank, as to the payment required to be made to the minister

The payment of $250,000 had in this case actually been made.
-the election of directors

The directors had been elected in the regular way,
-deposit for security for note issue

The required deposit-of $5,000 had been made to the minister.
-or other preliminaries have been complied with

The other preliminaries, so far as appeared by the affidavit, had all been complied with.
-and that the sum so paid is there held by the minister.
The $250,000 and the $5,000 had been so paid and were so held by the minister. So that as far as all the evidence made it appear, every single possible requirement of the Bank Act had been complied with. But, I am told that the affidavit which the Act stipulates may be accepted, and it is the only specific proof the Act mentions, was not sufficient and that further evidence ought to have been asked for. I claim that the position of the Minister of Finance in this respect is not different from that of the Provincial Secretary in the Ontario government or the Secretary of State in the Dominion government when a number of business men apply for a charter in the one case under the Dominion Companies' Act or in the other case to Mr. Whitney's government under the Ontario Company's Act. They show the particulars on printed forms furnished them for that purpose. They show the names of at least five shareholders, the names - of the provisional directors, the amount of stock subscribed, the amount of cash paid in on the stock, and these statements are verified by affidavit of one of the promoters or interested parties. The member for North Toronto says that the minute books of the company might have been obtained and they would have furnished evidence that the certificate ought not to have issued. 1 would like to ask the hon. gentleman (Mr. Foster) or any other man who has occupied the position of Minister of Finance in the Canadian government, whether in any single instance the minute book of a company has been asked for under similar circumstances?


William Barton Northrup: Was there ever a case like this?


Henry Horton Miller: Yes.


William Barton Northrup: When and where?


Henry Horton Miller: There was no case different from this.


William Barton Northrup: Name a single case like this.


William Stevens Fielding: My recollection is
that there was no case of the minute book being required previous to this, although in a recent case I think we did require the minute book. I am safe in saying that in no case prior to this was the minute book required or demanded.


William Barton Northrup: Was there ever a case like this before?


William Stevens Fielding: I think that substantially this case is not different from other cases before the board, except in one case where I know a certificate was granted without an affidavit at all,


Henry Horton Miller: There were 250,000 good reasons in the shape of the $250,000 deposited to show the bona fides of the men en- _ gaged in the transaction. That was far " better evidence than any affidavit as to the bona tides of these people. A quarter million dollars is not easily picked up, and there was no source whence the greater part of it could come than from the shareholders of the bank and from the shareholders of the bank it did come. Mr. Travers did not and could not put up $250,000 of his own money; it was obtained from the shareholders of the bank' who had subscribed to the stock of the bank. The Minister of Finance has pointed out, and none can deny it, that at this time Mr. Travers had as good a reputation as a financier and man of integrity as has any member of this House. He had been manager of the important branch of the Merchants' Bank in Hamilton, and I am informed that when he left the employ of that bank he took with him from the general manager a splendid testimonial in the shape of a letter speaking highly of his integrity and financial ability. Long after the certificate had been issued and the bank opened for business, the government of Sir James Whitney showed their confidence in Mr. Travers and in the Farmers' Bank by depositing in that bank Ontario government funds to the amount of $25,000. Talk about a trusteeship; the Ontario government were trustees for this $25,000 of public money, and they deposited it in the Farmers' Bank, showing the confidence they had in the institution and in the men by whom it was managed. Mr. Travers, who at that time had the reputation of being an honest business man, was manager of the bank, and the



president at that time was Dr. Beattie Nesbitt, in whom, at least a large number of the people [DOT] of Ontario had confidence. The Ontario government and Sir James Whitney had such confidence in him that they made him registrar in the city of Toronto. Therefore, not only had the general manager of the bank a good reputation at that time, but so had the president of the bank, and, in addition to that, some of the directors and shareholders were amongst the foremost business men of Ontario. The hon. member for Hastings asked was there ever such another case as this, and he proved there never was by his sarcastic laugh, and we were told by the hon. member for North Toronto that the letters from Mr. Leighton McCarthy should have aroused the suspicion of the Minister of Finance. Let us look at the letters. The first says that Mr. McCarthy is representing eleven subscribers of stock in the bank and on the 9th of October he writes:
My dear Mr. Fielding,-I beg to inclose the special endorsement upon a writ of summons in the High Court of Justice for Ontario, which will be issued.
* This would seem to contradict the statement of the hon. member for North Toronto that the writ had issued because Mr. McCarthy says that the writ would be issued, and the inference is that when Mr. McCarthy obtained satisfaction for his clients the writ was withheld. But, Mr. [DOT] McCarthy does not ask the Treasury Board not to issue the certificate; what he asks for is delay. Mr. McCarthy was acting for eleven shareholders whom he named, and ' for 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.' Apparently no other subscribers did come in and the eleven subscribers represented by Mr. McCarthy so far as we know were the only ones dissatisfied. The hon. member for North Toronto speaks of these eleven men having been bought up, which implies that they were bribed not to proceed with the action they intended to proceed with. Well, these men had subscribed for the stock of the Farmers' Bank, and I would not wonder that my hon. friend from Halton or some other equally cautious and shrewd man had advised them that their investment instead of being sure to be as protfiable as they expected, was attended with certain risks.
They then thought it wise that they should withdraw, and if possible escape any liability. They engaged Mr. McCarthy. He proceeds to threaten, and possibly he may have issued a writ. The promoters of the bank say: We do not want any delay or litigation; we will go to these eleven dissatisfied shareholders, and we will give Mr. MILLER.
them back the money they have paid in, and take over their stock. These eleven subscribers had subscribed for stock to the value of $23,500, but they had only paid on that stock $6,530. So that all that the promoters of tie bank had to do to stop the agitation of these eleven men was to raise $6,530, which they did, and took over their stock. Now, Mr. McCarthy's letter shows that eleven men out of a total of 557 subscribers were dissatisfied. There were at the same time 546 other subscribers who apparently were perfectly satisfied with the investment they had made, and were not making any trouble or asking for any relief. These 546 satisfied subscribers had subscribed stock to the amount of $476,500. Now, what were the irregularities pointed out in Mr. McCarthy's letter? The sole irregularities on the part of any person up to that time were that certain subscribers to the stock of the bank who had supposedly paid in $6,530 had not paid in all of that in money, but had paid a part of it in their promissory notes. Had these farmers and others, instead of giving their promissory notes to Mr. Travers, taken them to some bank and discounted them, and paid the money to Mr. Travers on their stock, they would not have been guilty, morally, legally or otherwise, there would have been_ no irregularities to point out, and no technical reason why they could have evaded their stock subscription. The hon. member for North Toronto asks:	Would the Finance
Minister in the transaction of private business, have invested $500,000 of private funds in the same careless way? I say, in reply to that, that the Minister of Finance did not invest one single dollar of that $500,000, and he was not in any way responsible for the investment of that or any part of it, to any subscriber of that stock. The man who was responsible primarily and above all was W. R. Travers, and what position did he occupy, and how did he obtain that position? He was general manager of the bank. He had not been made general manager by the Treasury Board or by the Finance Minister, but by the votes of the 557 shareholders including the shareholders in the county of Halton. They are the men who had given to W. R. Travers the responsibility and the right of handling their money. The hon. member for North Toronto says that the Finance Minister was a trustee, or the Treasury Board were trustees, for the handling of the money, and the hon. member for Halton uses to some extent the same reasoning. He said that if the Treasury Board had refused to issue the certificate, then the $250,000 deposited with the Treasury Board would have been refunded, and could have been paid back to the shareholders. That is not the case. The $250,000 had been paid in by W. R. Travers. If the Finance Minister was a trustee at all,

or if the members of the Treasury Board were trustees at all, then surely they were trustees to those who had made the application for the $250,000 paid in, under the law, to the Treasury Board. But I direct the attention of the members of the House to section 17 of the Bank Act, which says:
In case no certificate is issued by the Treasury Board within the time limit for the issue thereof, the amount so deposited shall he returned to the persons depositing the same.
Who in this case was W. R. Travers? Then, subsection 3 of section 17 says:
In no case shall the minister be under any obligation to see\ to the proper application in any way of the amount so returned.
So not only does the Bank Act not say that the Treasury Board or the Finance Minister are trustees for the $250,000, but it takes especial care, in the plainest and most definite language, to say that they are not trustees for that $250,000, and cannot be so regarded. Then surely they cannot be held to be trustees for a single dollar of the money of the bank. The hon. member for North Toronto says that the. hon. Minister of Finance could have had information and advice from the Canadian Bankers' Association, which would have put him upon his guard. I say that if the Bankers' Association, before the certificate was issued, had information which the Minister of Finance ought to have had, and which would have influenced him in the granting of the certificate, then they had not only a financial and a personal interest in seeing that the Finance Minister obtained that information in time to be of some use, but also a public duty in seeing that the information was given to him as quickly as possible. But the Bankers' Association, if they had that information, which I doubt, withheld it until after the certificate had been issued. I ask again if the hon. member for North Toronto, during the time he was Finance Minister, ever asked for the production of a minute book of a bank applying for a certificate or of any other financial institution applying for a charter or a license authorizing it to do business. We believe, and the people of this country believe, that the Minister of Finance is a very careful and capable official; but we do not claim that he is a seer or is omniscient. It is all right now, after loss has come, and there has been calamity, to endeavour to blame the Minister of Finance, it is all right to say that Mr. Travers made an affidavit that was utterly false in this particular, and that particular; but there was no possible way by which the Minister of Finance or any other mortal man could at that time have known that the statements contained in Mr. Travers' affidavits were not correct.
169i
Suppose that this parliament had known years before the certificate' was issued, as they know to-day, that Travers was not an honest man, what would have been the power of this parliament and the power of the Treasury Board? I say that the Banking and Commerce Committee, when the charter for this bank was being obtained, might very well have considered the character of the men who were promoting the scheme. I say that the members of this House, who were called on to adopt or reject the report of the Banking and Commerce Committee, might very well have considered the character and business ability and prospects of the men who were asking for incorporation. The Banking and Commerce Committee is composed of members on both sides, many of whom have large business experience, and all of whom have no doubt the interests of the people at heart. Of that committee my hon. friend from Halton is one of the most careful and efficient members. I say that that committee might have refused a charter of incorporation to Travers and his associates if it had any reason to doubt his character or ability. And after that committee had agreed to give these men a charter, the members of this House could still have refused to pass the Act. But when this parliament, under the advice of the Banking and Commerce Committee, did issue a charter to these people, it was beyond the power of the Treasury Board to withhold the certificate because of the character of the men applying for it.


William Barton Northrup: Travers had nothing to do with getting the charter.


Henry Horton Miller: It does nor make any difference whether Travers had anything to do with getting the charter or not. The members of the committee or of this House can refuse a charter to any one applying for it, but the Treasury Board, once a charter is given, cannot refuse a certificate after the parties have complied with the conditions of their Act of incorporation. In this case, the conditions were complied with to the letter in every particular.


William Barton Northrup: We say that they were not.


Henry Horton Miller: I say further, suppose the Treasury Board, with its six members, had taken upon itself to say that they had information as to the character of these men or their lack of business ability and would not issue to them the certificate to enable them to do business, what would have happened? Would this House have been disposed to _ accept that position of affairs? Would this House be willing to delegate to any set of six men, no matter who, the right to pass judgment on the character or ability of any group of men to whom this House had given an Act of incorporation? In this

case Travers was a member of the Conservative party, Dr. Nesbitt, the president of the bank, was also a prominent -member of that party; and if the Treasury Board had gone out of its way to refuse a [DOT]certificate to these men, the Minister of ^Finance and the other members of that board would have been accused of having been actuated by political reasons in withholding that certificate.
I do not think that anything can be accomplished by a Royal Commissioin. The hon. member for North Toronto (Mr. Foster) has had the privilege ot examining all the correspondence and all the documents in this whole matter, and I do not think that any commission could make a more searching inquiry into the facts than he has done. Hon. gentlemen opposite will agree that the hon. member for North Toronto (Mr. Foster) is well able to make an investigation and examine every bit of evidence submitted to him, which is all that could be submitted by this House to a Royal Commission.
There is a lesson to be learned in this, and that is that we, as a parliament, should be more careful when we come to frame a new Bank Act, and I refer, hon. members . opposite to the new Act drafted by the Minister of Finance. If they will compare the sections of that new draft Act with the parallel sections of the present law regarding the issue of certificates, they will find that the hon. minister has taken many precautions to guard the interests of the public more fully than they are in the present law. But I repeat that every member of this House, who was a member of it when the old Act was passed, is equally responsible with the Minister of Finance for the Act as we have it to-day.


William Barton Northrup: Perhaps it is just as well that I should read the amendment before the House, as it is some time since any reference has been made to the real question at issue. The amendment is as follows:
This House is of opinion that a Royal Commission should forthwith issue to inquire into and investigate the incorporation and organization of the Farmers' Bank of Canada, and the granting of a certificate by the Treasury Board permitting the said bank to issue notes and commence business, and all circumstances connected therewith and generally to inquire into and investigate the operation and efficiency of the Bank Act in relation to the affairs and transactions of the said hank.
I am free to admit that when an amendment such as this is brought before the House, the responsibility rests on those who bring it forward of making out a prima facie case to justify an investigation. But it would be idle to expect members on this side to prove the point they wish to have investigated. Of course, however, in order to compel even the hon. member who Mr. MILLER.
has just taken his seat (Mr. Miller) when he comes to read the amendment, to vote for it, as I hope he will, it is necessary that we should show that there is something worth investigation in the transactions referred to. What are the circumstances which we say justify an investigation? The people of this country, through their representatives, have provided that after parliament has granted a charter to a bank, that bank has no power to carry on its business until it has complied with certain formalities. But after it has complied with these formalities, the Treasury Board is allowed to give it a certificate, and on that certificate-and that alone-can it begin business. A great deal has been said about the shareholders, and I do not intend to add to what has been said on their behalf. But what about the depositors? The Minister of Finance may possibly say that he was led astray by Travers, the representative of the shareholders? But what has he to say about the unfortunate depositors throughout the land? What has he to say of those men who were in comfortable circumstances a few months ago and who are to-day in the depths of poverty because the hon. minister blundered. In my own constituency, I met an old soldier, about 75 years of age and his wife of the same age. This man had worked hard during 20 years since leaving the army and accumulated a little property, but he had deposited his savings, some $11,200, in the Farmers' Bank in March last, and all he had left after all. these years of industry, was $3. It is such people as those, people who put their money into this bank relying on the Minister of Finance seeing that the law was complied with to the letter, who say, surely we are entitled to an investigation. I am not implying that the Finance Minister himself was corrupt in any respect; but I do say that if he has any proper regard for his own reputation, he should be the first man to ask for a complete investigation into all the circumstances which, to say the least are most extraordinary.
Now, there are certain facts which cannot be gainsaid. They have been laid before the House very fully by the hon. member for North Toronto (Mr. Foster), but perhaps I may be allowed, briefly to Tefer to some of them. In the first place, as I said before, the responsibility is, by statute, thrown on the Treasury Board. The statute provides that $500,000 must be subscribed and $250,000 paid up, bona fide payments in cash, and certain other conditions complied with without the performance of which the Treasury Board has not the power to grant a certificate. Now, I would like to ask the Finance Minister, sitting in this House to-night:	If he had
known on the 13th day of November, 1906, all that he knows on this 15th day of March, 1911, about the state of affairs at the former

date, would he have granted that certificate to the Farmers' Bank of Canada? The hon. gentleman declines to answer


William Stevens Fielding: I do not decline to answer. I thought it did not require an answer. Certainly, with the information now available, I would not have issued the certificate.


William Barton Northrup: Well, we have got that far. The hon. gentleman admits on this 15th day of March, 1911, that he issued a certificate under such circumstances that, had he known


William Stevens Fielding: We can all be wise after the event.


William Barton Northrup: But the Finance Minister was the one man who had it in his power to have the information that would make him wise before the event. And I desire to call attention to the care, persistence and assiduity with which the hon. gentleman prevented his own eyes being opened despite every effort to that end on the part of those who were in possession of the facts. That 'is the reason why we are entitled to an investigation, to find out what hypnotic power was around the Finance Minister on that unhappy 30th of November, 1906. It was well known that those connected with the bank had had a great deal of difficulty in getting the required stock subscribed. The time of the charter had been extended. I think, twice. So, if ever there was an occasion on which the Finance Minister, on the merits of the case,_ might well have been justified in looking into the facts, it was this case. But, while proceedings were on, a letter was received by the department from one of the leading lawyers of the city of Toronto; I presume the Finance Minister read this letter-or he did not. Might I ask: Did the hon. gentleman take the trouble to read that letter and the information


William Stevens Fielding: The information was conveyed to me by my officials in substance.	,


William Barton Northrup: Then, we find, in substance, the Finance Minister knew that the writ was about to be issued. The names of all the parties were given, some 10 or 11 of them; the grounds of the action were fully set out in the endorsement of the writ, which I will read in a moment, and also stated in the letter itself. In the letter it is stated that this action was to be brought. It says: I
I 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 be made of the cash received
and the proceeds of these notes, or sufficient amount to make up $250,000.
This is information coming from a reliable source. He goes on;
I wish you to have the kindness to acknowledge the receipt of this protest against the granting of a certificate so that 1 may advise the shareholders who are disputing their liability, and I would be pleased to go to Ottawa upon any appointment you may make for the further consideration of this matter.
That was written on October the 19th. The department hurried to reply to it four days later-they acknowledged the receipt of the letter. On the 19th of October, then, this writ had not been issued. On the 31st of October a letter was written by Mr. Bo-ville, the Deputy Minister of Finance, to Mr. McCarthy, in which he said:
Referring to your letter of the il9th inst.-
The one I have just mentioned.
-addressed to Mr. Fielding, on the subject of the Farmers' Bank of Canada and the issue of a certificate to that bank to commence business under section 15 of the Bank Act, I notice recently a reference in the newspapers for a judgment given by Judge Anglin in a suit relating to this matter. In view of the decision rendered, I shall be obliged if you will let me know if you still desire the protest contained in your letter to be brought before the Treasury Board upon an application of the Farmers' Bank for a certificate to be considered.
Was a more remarkable letter ever written? A leading lawyer states facts which the minister and his deputy should have been delighted to receive, if they were facts, and which, if true, disentitled the Farmers' Bank to receive this certificate. This letter made it the duty, beyond all question, of the deputy minister to investigate. Because no one will suggest that when the Banking Act provides for a Treasury Board consisting of the Finance Minister and five of his colleagues, it intends that five wooden Indians with a rubber stamp can transact the business of the Treasury Board. There must have been a presumption somewhere that a little intelligence would be used. And when parliament requires certain conditions as prerequisite to a certificate being issued, surely it expected that the ordinary-I do not suggest extraordinary-amount of intelligence and industry would be displayed by the officials in carrying out that law. Yet, after this extraordinary statement, the only letter of inquiry is to ascertain if, the suit having been settled, this 'lawyer is prepared to withdraw the protest , he had entered for these 10 or 11 gentlemen. But not u. thought of the hundreds of shareholders and thousands of possible depositors, but'only of the few individuals whose names happened to be mentioned in that writ. It may not be out of place to give a few of the principal

charges made, to show how serious this matter was. This is the endorsement on the writ:
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 share 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 or 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 the particulars of the plaintiffs' claim.
il. That the Farmers' Bank of Canada was incorporated by special Act of the parliament of Canada, passed on the 18th day of July, 1901.
2. The defendants, James Gallagher, John Watson, John Ferguson, Alexander Fraser and Alexander Shepherd Town, were appointed by the said Act to be the provisional directors of the bank.
Then it recites how the bank was proceeded with, prospectuses issued and stock-books opened. And these are the charges of impropriety:
11. The plaintiffs and others subscribed to 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 agent 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 representation, namely: (a) that Robert Noble whose name is 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 filled up for $1,000 and that the general manager afterwards claimed that it was a subscription for'$10,000, and the said Jchn 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;


William Barton Northrup: and other false representations of a similar character were made by the solicitors and agents in reference to alleged subscriptions of other persons.
Then there is a charge with regard to Major Beattie, which was read before. Then there are a number of attractive inducements held out, and then it is alleged that actions and proceedings were taken, and so forth. Now surely there wercj charges enough to put any treasury board on its guard, charges explicitly made, and charges which went to court; and when we find that on the 19th of October the writ had not yet been issued, and that on the 31st, the Deputy Minister of Finance could write that the judgment had. been given which, as a matter of fact was given on 'the 27th of October, and when we find all these allegations of fraud against the provisional directors and general manager, that when the writ was not issued on the 19th of October, such haste was made that the judgment was entered on the 27th of October, and the judgment itself recites as follows:
And it appearing that the said plaintiffs John Sproat, George Castle, William A. Dixon, William McLean, Finlay McCallum, Robert Hume, James Murray, George Denoon and John McLeod, have assigned and transferred their applications for the issue of shares of stock of the Farmers' Bank of Canada, and their right to shares in accordance with the said applications, to one William J. Lindsay, and that the claims of the said plaintiffs last above named, and also the obligations and liabilities of the said plaintiffs, have ceased

2. It is ordered and adjudged that this action be and the same is hereby dismissed out of court without costs.
Now, Sir, if a deputation had come from Toronto with a brass band to serenade the Finance Minister, and had come with the express purpose of calling his attention to the fact that these charges of fraud had been made by Mr. McCarthy and had been substantiated, they could not have given a better evidence of the fact than this judgment which was referred to by the Deputy Minister of Finance in his letter of the 21st of October; and after these people had been settled with, and after these charges of fraud had been made, the minister simply inquired whether the individual whose clients had made these charges and who had been settled with, wanted to press this protest; but that the minister owed any duty to the shareholders or to the people of Canada, never even seemed to have entered his mind. Well, we find then that Mr. McCarthy received back his papers, and there was an interval of time, and then Mr. Travers sends in his application for a certificate and makes his declaration on the 27th of November. Now when the minister had seen the endorsement in this writ, and when there were 8

or 10 plaintiffs in that case whose names were before him, and when Mr. Travers on the 27th of November, this judgment having been entered on the 27th of October, makes his sworn declaration, that on which the minister gave, and could only give, the certificate, would it be believed that neither the minister, nor the Treasury Board, nor anybody in the department took enough interest in the proceedings to read the declaration of Mr. Travers to find out whether these men were still on the list given by him as shareholders on the 27th of November. If he had, he would have found their names still there, and then surely if he had so learned, he would have taken some steps to prosecute the man who had perjured himself in making that declaration. If the minister had only taken the trouble to read the papers put before him by Mr. McCarthy, the papers on which alone he. granted the certificate, he would have found that the applicant was a perjurer, and he would surely have been justified in refusing to give to a perjurer a certificate to do business, and all this calamity, and all this loss and suffering which has been entailed on many people of this country, would have been saved; but all this exists to-day because the minister declined to take the trouble to read these papers, or if he did read them, declined to convey the information to the Treasury Board. On the 27th this declaration was made, and it would seem that Mr. Travers came post haste to Ottawa, and apparently a little deputation with him, and if we are to believe what was said by the hon. member for North Toronto, he was here on the 30th of November. Now it is a peculiar thing that the depositors' money had been paid into the Bank of Montreal about a month before. On the 23rd of October the money was paid into the Bank of Montreal, then suddenly on the 30th of November, when the minister was up to his eyes with his budget speech, Mr. Travers and his friends came down here, though it has been said that they had been here for two or three days already; at all events, on the 30th of November, when there was still plenty of time-the certificate did not require to issue until the 18th of January-on the 30th of November there was such urgency that this certificate should be issued, that that very day the minister, in his bustle, and hurry, and excitement, writes to Mr. Travers, and let us see what the minister wrote on the 30th of November to Mr. Travers:
Dear Sir,-I regret that owing to pressing engagements yesterday, arising out of the budget, I was unable to meet you to consider your application for the issue of a certificate to authorize the Farmers' Bank df Canada to commence business. I shall be glad to see you to-day, at my office, at any time before one o'clock, if you can call. Or I might be
able to see you later, between 4 and 5, at the House of Commons, if that will be more convenient.
There is a phase of the matter which I should like to bring to your notice so that you may consider it at once.
' A phase of the matter,' only that and nothing more.
It has been represented to us that in soma previous instances where an application was in all respects apparently regular, there was actually an evasion of the intention of the Bank Act in relation to the paid-up capital. We have been told that in some case the subscribers did not actually pay in cash, but gave notes to the provisional directors which were used to raise the money. On account of information of this kind, which has reached us in relation to a previous case, we deem it proper to scan very closely every application for a certificate which comes to us. I shall be glad to have an assurance that nothing of the kind has taken place in relation to the subscriptions for the Farmers' Bank, but that the amounts set forth in the application as having been paid up, have in every case been bona fide cash payments.
Now is it conceivable that, unless there is something which we do not know, which is not before. the House, and which we would like to investigate, is it conceivable that after receiving such an extraordinary endorsement of a writ from Mr. McCarthy, that when Mr. Travers was applying for his certificate, when he had put in his declaration, the minister fails to read the declaration for fear he might find the list of shareholders which would show the declaration was false, he writes to Mr. Travers and he is so afraid of this financial magnate, that he actually fails to refer to any charges made against his bank, and in the most timid way intimates-what? He intimates that: My attention has been called to the fact that we have been fooled by these declarations before; this is not the first time we have been fooled, we are alive now, we are alert to-day, and we are determined that we will not be caught againt by a false declaration, we will check your declaration by asking you whether it is true or not. I wonder if an investigation would not be justifiable, even to find out the process of logic by which the minister thought he was going to get the truth of a statutory declaration by asking the man who made it whether it was true or not. I think the amendment might be altered so as to give the committee power to inquire into the simplicity of the Finance Minister, to inquire into the reasons of the Finance Minister for making this bargain with Mr. Travers. It is no wonder that we wonder at his capacity for making bargains. But that is not all. This letter was written to Mr. Travers asking him for an answer, and as the member for North Toronto pointed out, the Finance Minister did not even get what he asks for. He was

apparently assiduous in his care to ask a question that would be easy for Mr. Travers to answer, and Mr. Travers did not even answer that question. Now the minister ventures to intimate that in the case of the Farmers' Bank of Canada the provisional directors did not raise the money in the way mentioned by you. That is the kind of close, rigorous cross-examination and checking of the affidavit that the Finance Minister enters upon; he decides that the certificate must be given and so it was given. We have really nothing to do with the Finance Minister in this case except that he is chairman of the Treasury Board and except in so far as the correspondence shows that he acted. Our charge is not against the Finance Minister; we want to investigate what took place before the Treasury Board. What has been said by the Finance Minister?-It's not fair to say that the Treasury Board knew anything about the charge which was made.


An hon. MEMBER.: He took the responsibility.


William Barton Northrup: It is all very well for the Finance Minister to say that he took the responsibility. He might do that had the statute put it in his power, but the statute says that the Treasury Board shall do so and so. When the statute says the Treasury Board that does not mean the Finance Minister, and when it says the Finance Minister that does not mean the Treasury Board. So, we have first the Finance Minister deliberately shutting his eyes to all the information given him, then we have him writing Travers not saying a word to him about this case, but referring to some suppositious case in days gone by, we have been calling attention to the fact that he had been deceived by declarations heretofore, he asks a question which is not answered, and then runs off to the Treasury Board. He does not even know where he met them, he could not tell whether he met them in his office, or in the council chamber, or where it was, but in some way he met these worthy gentlemen and the Treasury Board agreed to issue this certificate. One would have thought that the Minister of Finance would have been anxious about that certificate. Not he The very next day he found a letter from bir Edward Clouston, president of the Bank of Montreal and head of the Bankers' Association, and Sir Edward Clouston puts his case very clearly. Surely a man in the position occupied by Sir Edward Clouston is entitled to a little consideration and respect when he makes a serious charge.


William Barton Northrup: Canadian Bankers' Association, incorporated 1900.
Montreal, November 30, 190G.
T. C. Boville, Esq.,
Deputy Minister of Finance,
Ottawa.
Farmers' Bank of Ottawa.
Dear Sir,-In connection with the application of the Farmers' Bank of Canada for the usual certificate from the Treasury Board, I have reason to believe that the money lodged, or to be lodged, at Ottawa as stock subscriptions, cannot be regarded as paid-up capital, and that a large proportion of the amount necessary to the obtaining of a certificate is a loan made upon the promise of its payment when returned by your department.
That surely is a specific enough charge.
Permit me to request that, if only for the protection of the public

Like myself, he has a feeling for the unfortunate depositors.
-the Treasury Board will exercise its right to refuse to issue a certificate if it thinks best so to do, until a thorough investigation has been made into the circumstances stated herein.
When the Finance Minister received that letter, as my hon. friend from North Toronto (Mr. Foster) pointed out, what in the world was there to prevent him from stopping the payment of the $245,000 cheque and demanding back that certificate which had been obtained by fraud? If the general manager had refused to give it back, clearly there are courts of law in the land. He could not possibly be allowed to keep it under such circumstances, and, having obtained this certificate by fraud and perjury, it is not to be imagined that the courts were powerless to cancel the certificate. The Minister of Finance and the Treasury Board had ample knowledge from Sir Edward Clouston that the whole institution was a fraud, that they were not entitled to the certificate, and that therefore the certificate which the Treasury Board wilfully and knowingly gave was a certificate that was not justified by the law of the land. Now, the case would seem to be so reasonably clear so far that an investigation is a small matter. The fatuity with which the Minister of Finance seemed to have followed all the directions of this man Travers is most remarkable. It was not very long after that that the minister received a letter from a very honest young man. At page 29 of the Return we find the following letter addressed to the Deputy Finance Minister;
The Farmers' Bank of Canada, Milton, April 7, 1907.
T. C. Boville, Esq.,
Deputy Minister of Finance,
Ottawa.
Dear Sir,-Will you kindly give me your opinion as to the following: Our general man-

ager sends to the different branches lists of notes given in payment of onr capital stock. These notes he makes the managers put through as discounts, crediting the amount to
H.	O. This is figured in the government return as paid-up capital and circulation issued to that amount. If I read the Bank Act correctly, section 76, he is asking us to do what is not right. As I do not wish to do anything contrary to the law I should be much obliged if you give me the ruling on it. With many apologies for troubling you.
G. VANKOUGHNET, Manager.
That is written on April 17th anil gives such a shock to the department that it is two weed's before they recover. On May
I,	a reply is sent to Mr. Vankoughnet as follows:
Finance Department,
Ottawa, May 1, 1907,
G. Vankoughnet, Esq.,
68 Howard avenue, Toronto.
Dear Sir,-I beg to acknowledge receipt of your letter of the 17tli ultimo.
I must apoligize for the delay in replying. Parliamentary business at this time in the session takes precedence over other duties.
While it is not deemed expedient to enter into correspondence at this stage, the matter referred to by you is of sufficient importance to warrant further inquiry. This will shortly be made. I should like to have a copy of any of the notes.
T. C. BOVILLE, Deputy Minister of Finance.
Well, he gets his copy. That was written on May 1, and the manager, unlike the department, answered promptly on May 3:
Farmers' Bank of Canada,
Milton, May 3, 1907.
T. C. Boville, Esq.,
Deputy Minister of Finance,
Ottawa.
Dear Sir,-I have received your letter of 1st instant and inclose as requested one of the notes which I referred to in my letter to you of 17th ult.; when we renewed these-notes we dated them 2nd Jany., '07, or later, and made them payable at this office.
The amount under discount at this office 30th April was about $111,885.


G. VANKOUGHNET.
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I looked all through the book carefully trying to find any further comments, but that note seems to have been a crusher. Apparently there is no further correspondence between Mr. Vankoughnet and Mr. Boville or the Minister of Finance. But we have the fact then that on the 3rd May that letter was written and received on the 4th May giving the minister this information. The letter of Mr. Vankoughnet told about notes being discounted at his office by the manager and the proceeds credited to the head office and he wanted to know whether this was in accordance with the law of the land. He stated that the
amount under discount in his office was $111,885, In that one little office in Milton the Finance Minister knew that on the 4th May, 1907, there were $111,885 in discounts of note which had been given for the capital stock. Now, in the meantime not only had Mr. McCarthy questioned it, but Mr. Knight had been very busy. Some demands have been made and so the department is screwed up to the point of venturing to ask for another Return from their friend Travers, and they got it. We have it here on page 35 of this Return. There the minister is told that:
The portion of the $375,473 paid-up capital of the bank, as per Return of March 30, 1907, represented by promissory notes of the shareholders, held by the bank, amounts to $59,110.
That is the sworn declaration of the general manager. On the 10th May there was received by the Minister of Finance the sworn declaration of W. R. Travers that the total amount of these notes held by the bank was $59,000, while the minister had under his thumb the letter from Mr. Vankoughnet, the manager at Milton, saying : ' I have in my branch notes under discount to $111,885, my conscience smites me and I appeal to you as Minister of Finance to let me know if I am doing what is wrong.' How can this House account for the fact that away back in May, 1907, the Minister of Finance had it proved up to the hilt by documents in his own possession that Travers had perjured himself again? Where was the difficulty in bringing this bank to its senses? What possible use could there be in getting bank returns month after month from a man who already had committed, deliberate, wilful, ridiculous perjury? The Minister of Finance does not come before the House and say: I laid that before the Treasury Board, I was over-ridden, they would not listen to me, but he comes here and says: I take all the responsibility. Does he appreciate the responsibility to the widows and orphans of this country who have suffered because of the actions of two classes of men-those who have robbed the people and are now represented in the penitentiary, and those who have failed in their duty to enforce the law of the land-and who have refused to take a single step to save the shareholders and the depositors?	_
Surely if ever there was a case which would justify investigation it is this, and if ever there was a man who would hail with joy the opportunity of investigation it is the Minister of Finance. The Minister of Finance must not forget that if in the face of this extraordinary evidence showing the knowledge brought home to him again and again and again and refusal on his part to act, he calls his supporters in and votes^ down an amendment asking for investigation into the circumstances which
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led to the issue of this charter, he may not be surprised if strong comments are made in the country and perhaps very great injustice done to himself. There may be a perfectly honest explanation of all this, and I do not say there is not, but I do isay that if the Minister of Finance refuses to give men an opportunity to believe the simple, innocent, plain, convincing facts, he cannot be surprised! if people draw their own conclusions which perhaps would not be gratifying or complimentary to him. Now, Sir, the last speaker (Mr. Miller) said that the Treasury Board had to give the certificate, and that the very best guarantee that all was well was the presence of the $250,000 deposit. Imagine a man, in the face of what has taken place saying that that is any guarantee. What are you to think of 'that for logic? Why should this House be compelled to waste time listening to a man who in the face of what has taken place in regard to the Farmers' Bank would deliberately tell this House in the year 1911 that the best guarantee that could he had was the presence of this $250,000. I think, Sir, that the Treasury Board would be bound to grant a certificate to the bank if after making all due inquiries they were satisfied the provisions of the Act had been complied with, but they made no inquiry in this case and they simply wrote a letter to the Justice Department in which they invited just the answer they got. Why they should have gone to the Justice Department at all I do not know; perhaps it is because they always do. An the question submitted to the J ustice Department was a peculiar one. Again and again attention had been called to the fact that there was something rotten in the state of Denmark and instead of looking into the actual facts, on the 28th of November a letter was written to the Deputy Minister of Justice which reads :
E. L. Newcombe, K.C.,	-
Deputy Minister of Justice.
Dear Sir,-I beg to inclose herewith a file of papers, being an application from the Farmers' Bank of Canada for a certificate to commence bnsiness under sections 13-17 of the Bank Act. Kindly advise me if on the papers submitted such a certificate may immediately issue.
_ Here is the Department of Finance appealing to its own solicitor as plain as words can: For Heaven's sake can we give the certificate; say so if you can. And Mr. Newcombe who is an astute lawyer gave them back the letter they'desired and it was to this effect:
Ottawa, Nov. 28, 1906.
Sir,-I have the honour to acknowledge receipt of your letter of the 28th inst. and of the inclosed papers, being the application from the Farmers' Bank of Canada for a Mr. NORTHRUP
certificate to commence business under sections 13-17 of the Bank Act, and papers in support thereof.
You ask me to advise you if on the papers submitted such certificate may legally issue.
He is veTy careful to (repeat their question; he takes no responsibility.
In reply, I beg to state that the statements in the statutory declaration of Mr. Walter R. Travers are sufficient, if they are accepted, to show compliance with the statutory provisions, and that the evidence thus afforded is such as the Treasury Board may lawfully accept under the Act, and thereupon issue to the bank a certificate under section 14 of the Act. Papers returned herewith.

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Deputy Minister of Justice.
George Eulas Foster: The opinion was given on the same day as the request for it.


William Barton Northrup: 
Mr. T. W. CROTHERS (West Elgin).: Although toe facts available have been fully laid before the House by gentlemen on this side, yet, as many people who live in the constituency I have the honour to represent have been very heavy losers in connection with this bank, I desire to say a few words before the debate is closed. In view of the evidence we have heard to-day the action of the Treasury Board in issuing a certificate to this bank on November 30, 1906, establishes beyond any per-adventure that we have not a complete record of the evidence before this House. The evidence we have cannot and does not explain the action of the Treasury Board. There is evidence either of record or of an oral character that has been witheld from this House, of that I have no manner of doubt whatever, and the people of this country have the right to know all the facts, in
order to secure which a Royal Commission ought to be issued. The Treasury Board who are made the guardians of the public interest in such a matter as this, is composed of the Minister of Finance and five other members of the cabinet, and as we have been informed that this matter was considered when only three members of the Treasury Board was present it is perfectly clear that there not being a quorum or a majority of the members of the Treasury Board present the issuing of thi3 certificate was illegal.
Nothing less than a majority of the six members of the board could have legally issued a certificate to this bank authorizing it to do business. We have been told that there were present on that occasion Sir Richard Cartwright, the Minister of Marine (Mr. Brodeur) and the Finance Minister (Mr. Fielding). Well, I do not believe that Sir Richard Cartwright had his attention called to the facts, or he would certainly not have consented to the issuing of this certificate. Parliament has provided that the Treasury Board should protect the public by seeing that the provisions of the Banking Act are complied with before a certificate is given to authorize a body of men to open branches in every city, town and village in the Dominion and secure from a confiding and innocent people millions of dollars. Why it seems to me that if the Minister of Finance had received no warning whatever, it would still have been his duty to have got some evidence corroborating that given by the manager of the bank. You will remember that the manager is not a portion of the body proper of a bank as is the president or vice-president. He is simply a general manager, an official, employed by the directors. His was the only evidence before the Finance Minister with regard to this matter. Now, it is only since a few years that any one was allowed to give evidence, who is interested in the matter under investigation, because it was considered that his personal interest would so affect his evidence as to make it unacceptable. It is only since a few years a man who is interested in the result is a competent witness in a court of justice. I find in the Dominion Lands Act a section providing that a patent shall not issue to a man for 160 acres of land in the remotest corner of British Columbia on his own uncorroborated affidavit. He is required to have his statement corroborated by two of his neighbours under oath. Section 126 of the Dominion Lands Act provides as follows :	[DOT]
Proof of residence or cultivation, required by the three last preceding sections of this Act. and of the erection of a habitable house, shall be made by the claimant by affidavit, and shall be corroborated by the evidence on oath of two disinterested witnesses resident in the vicinity of the land to which their

' Previous instances ! ' With all these charges before him, not in ' previous instances ' but in this instance. Why did he deal so tenderly and carefully with the manager of the Farmers' Bank? Why is he withholding the facts that these charges have been made in connection with this very transaction?
-where an application was in all respects apparently regular, there was actually an evasion of the intention of the Bank Act in relation to the paid-up capital. We have been told that in some cases

Some other cases, away up in the moon somewhere.
-the subscribers did not actually pay in cash, but gave notes to the provisional directors which were used to raise the money. On account of information of this kind, which has reached us in relation to a previous case

How anxious he is. to impress upon Mr. Travers' mind, apparently, that he had received no charge of fraud against him in this particular case, but some previous case, away back. Why was that?
-we deem it proper to scan very closely every application for a certificate which comes to us. I shall be glad to have an assurance that nothing of the kind has taken place in relation to the subscriptions for the Farmers' Bank, but that the amounts set forth in the application as having been paid up have in every case been bona fide cash payments.
And then, in order to have a record of Travers' answer, he has Mr. Travers write him a letter back the very same day:
In reply to your letter of the 30th of November, I have to say that in the case of the Farmers' Bank of Canada the provisional directors did not raise the money in the way mentioned by you. You will find the statement put in by me absolutely correct as to the amount of stock subscribed and the amount paid up.
I think the Minister of Finance told us this afternoon that he wrote that letter himself and left it in his office for Travers to sign


William Stevens Fielding: There is not a shadow of foundation 4or that statement.


Thomas Wilson Crothers: I am mistaken, am I?


William Stevens Fielding: No, the hon. gentleman is not mistaken.


Thomas Wilson Crothers: I understood you to say that you had written this and left it in your office


William Stevens Fielding: Written what?


Thomas Wilson Crothers: This letter-for Travers to sign.


William Stevens Fielding: I never made any such statement, nor did I say anything that would lead or give any intelligent person reason for imagining that I had said so.


Thomas Wilson Crothers: Mr. Speaker, I thank the Finance Minister for the compliment he has paid me; but I think I have a little intelligence, and I do not think he is a better judge of intelligence than a good many other people.


William Stevens Fielding: It is a very extraordinary statement for the hon. gentleman to make.


Thomas Wilson Crothers: Not an extraordinary statement at all, I submit; it is what I understood the hon. gentleman to say. He did say something about writing a letter-


William Stevens Fielding: If the hon. gentleman will permit me, I said nothing about writing a letter for Mr. Travers to sign. I wrote a letter to Mr. Travers and signed it. I state that he is mistaken-I said nothing about the other letter.


Thomas Wilson Crothers: Didn't you say you discussed the substance of the letter-


William Stevens Fielding: I discussed the matter with Mr. Travers.


Thomas Wilson Crothers: The character of the letter you desired him to send?


William Stevens Fielding: No, I did not say anything of the sort. I said I had addressed him a letter and would await his reply.


Thomas Wilson Crothers: And you got this reply?


William Stevens Fielding: Very well.


Thomas Wilson Crothers: Now, we have a letter from Mr. Boville, of December 3, in which he says:
For the purpose of record, Mr. Fielding wrote Mr. Travers a letter, of which I inclose a copy, asking for the assurance that the amounts set forth in the application as having been paid in were in every case bona fide cash payments. I inclose a copy of Mr. Travers' reply.
It seems from Mr. Boville's letter that the Finance Minister was very anxious to have something in writing from Travers to have it on record so that he could show it at some future time if necessary. He not only desired to have tlmt on record, but he desired also,, apparently, to have on record an opinion from the Department of Justice whether or not he could legally issue the certificate on the evidence that he had before him. I submit to you, Mr. Speaker, that any child of ten years would have known that it was competent for the Finance Minister, as a matter of law, to issue the certificate on the evidence he had before him: it was wholly a question of discretion as to whether he should be satisfied with the evidence. And I submit to Mr. CROTHERS.
you that, he having written that letter, I may question the magnitude of the Finance Minister's intelligence just as sincerely as he questioned mine.
Now, with all these warnings, does he ask anybody else for any corroborative evidence? None whatever,-simply calls in Mr. Travers and accepts his uncorroborated statement with reference to matters involving millions of dollars. Did you ever hear of a Crown attorney or a judge before whom a charge was made against a man of stealing or of having committed a fraud sending for the man and saying:	I have
been told that a man about your size-I have no reference to you now, but in some other case a man stole a horse under certain circumstances, and John Brown lost a horse the other night, and I would like to know what you have to say about it? And the man replies: I did not steal the horse. And the judge says:	Very well, let us
have that in writing so that we may have it on record. That would be just as sensible as the very intelligent action of the Minister of Finance.
The Minister of Finance, the Treasury Board, do not seem to have realized their position at all-do not seem to have realized the responsibility resting on them to protect the public, as suggested by the president of the Bankers' Association, There is some reason for the issue of this certificate which has not yet been made known. If the Minister of Finance had acted as a man of ordinary intelligence under the circumstances-I am speaking guardedly, Mr. Speaker-I submit that where a man oome3 before the Minister of Finance asking for power to open the bank, asking to be placed in a position where he can fleece the public of millions of dollars, where the Minister of Finance has been told that this man has already committed many frauds, I say a man of ordinary common sense and intelligence, acting in the interests of the people, would have insisted upon evidence other than that of the man who is making the application himself. I must give the Finance Minister credit for the fact, as he states it, that he did not receive the letter from the president of the Bankers' Association until the day after this certificate was issued. I have no doubt that the Treasury Board, authorized to issue a certificate, had the inherent power to cancel that certificate, if they were satisfied afterwards that it was unwarrantedly issued. We have no evidence that the Minister of Finance took the slightest notice of the warnings that he received from the president of the Bankers' Association the day after.


Mr. LENNOX.: Did he take the advice of the Department of Justice then?


Thomas Wilson Crothers: I am not aware whether he did or not. It is not on record, and we have nothing here to-day except

that which is on record, and there is a great deal that is not on record. Now, I have no hesitation in making the charge, I believe the people of this country will make the charge, that the losses that the depositors and shareholders of the Farmers' Bank have sustained are morally owing to the culpable negligence, the criminal negligence, of the Treasury Board. They made a mistake, to say the least of it; certainly they failed to exercise that common sense and that intelligence that any man would who had in his heart the best interests of the people of this country. And having got further evidence, he would have refused to authorize these people to open their doors and be in a position to bleed the public to the extent of millions of dollars. I believe, therefore, it is the duty of parliament to do something for these people. I do not know, I am not prepared to say, that - they would have a legal claim against the Crown, because the Crown is supposed to do no wrong, by a monstrous fiction. But these people, having suffered this immense loss by reason of the negligence of the Treasury Board of this government, this government is morally responsible for the losses they have sustained, having taken the course they did.
The Finance Minister says that Mr. Travers came to them as a man that they did not know anything against. Well, that was simply a negative quality, we do not generally trust a man in large transactions of whom we know nothing. This man was charged with a dozen frauds of a very serious character, which may possibly involve millions of dollars. We do not know the man at all, and we accept the word of this man in the face of these charges, and send him out authorized to rob the people of this country as he has done. Now, Sir, I submit that the people of this country, especially those who are interested in the Farmers' Bank, especially the depositors and shareholders, desire to know all the facts in connection with this matter. They are perfectly satisfied that we have not got all the facts this afternoon. The conduct of the government cannot be explained on the facts we have, but their conduct may be explained on other facts. Who introduced this man to the Finance Minister? We have it stated that the chief whip of the Liberal party at that time did so; I think that is not denied.


William Stevens Fielding: I do not recollect whether it was or not. But whv should not anybody introduce him? There was an article to that effect in a Toronto paper, it may be quite correct. I do not know.


Thomas Wilson Crothers: We would like to know, the public would like to know, they have a right to know, all the facts in connection with this matter, what it was that influenced the Treasury Board to issue a certificate under these very suspicious circumstances without making any inquiry whatever to corroborate the statement made by the gentleman who is making the application. As I said a few moments ago, the issue of the certificate I believe to have been illegal. There was no quorum of the Treasury Board qualified to issue a certi-cate. Of the capital stock of $500,000, $250,000 not having been paid in cash by the subscribers, they were not legally qualified to do business. There is a case which I think establishes that fact, the case of Cass against the Ottawa Agricultural Insurance Company and others, reported in volume 22, Grant's Chancery Reports, where it is held that where a company was required by statute, to raise $50,000 before beginning business to be paid in by those who have subscribed to the stock, and where they borrowed a large portion of that money to make up the $50,000, they were not legally authorized to do business. That is the case here. Those who subscribed for this stock did not put up the $250,000. One can understand why the statute requires subscribers to pay the cash. A later section of the Act provides for double liability in case of insolvency; it therefore becomes important that the shareholders should be men of substance, and hence it is required that they should put up the cash, not simply to give their promissory notes. The most superficial investigation on the part of the Finance Minister would have disclosed that the subscribers had not put up the $250,000, and therefore they were not entitled to the certificate. If the Finance Minister had taken the reasonable course, and had found they had been guilty of fraud in the inception of this institution he probably would have said to them: I shall have nothing more to do with you. It has been shown that you are capable of an attempt to defraud the public, and so far as I am concerned you will never be authorized to open a bank anywhere in the Dominion of Canada.
I take much pleasure in supporting this resolution. I believe the people require ,a thorough investigation, and I submit that this House should not surrender its right to investigate a matter of this kind because it is in the police court of Toronto or in the hands of a curator there. It is the duty of this parliament to investigate a matter where the officials of this parliament, the Treasury Board which is composed of six members of the cabinet, have shown themselves guilty of negligence in not taking a reasonable course to satisfy themselves that there was no fraud in the matter. If they had taken that course no certificate would have been issued, and thousands of people who have suffered seriously would have been spared. I, therefore, submit that a Royal Commission should issue that we may get all the facts, no matter who is. hit or who is hurt.


Robert Laird Borden: I do not intend to occupy much time, because the subject which is engaging the attention of the House has been very thoroughly debated. This is one of the most disastrous bank failures that has ever occurred in Canada. Looking at the statement of the curator one sees that the liabilities of the bank amount to nearly $2,000,000, and looking at his statement of the assets there will be' apparently a shortage of $1,250,000 to $1,500,000. The capital stock is gone, and it is doubtful whether the ordinary creditors will receive anything at all, and in any case they are not likely to receive more than a small percentage of their claims. The failure has occasioned widespread distress not only throughout the province of Ontario, but elsewhere in this country, and in the United States. I have received a good many letters on the subject; oge of them is so cogent in its terms and so well written, that I will take the liberty of reading it to this House, because it expresses in respect of one locality what has occurred in many localities in the province of Ontario, and elsewhere in this country. This is a lady writing from Lakeside post office in Ontario. She writes in this way:
I write to you on behalf of the ' Farmers' Bank.' I wrote some time ago to Mr. Lau-rier, also to Mr. Fielding on this subject, and both sent short but courteous replies. I read all the parliamentary discussions this year, and when the time comes for the Banking Act to be ventilated in parliament, come to the rescue and plead the cause of the poor widows and people either paying for, or renting farms, who have lost their whole savings in this bank. Some are in want who are advanced in years, while others cannot meet their payments this spring. If you were to visit Embro and heard the tales of distress, your heart, I am sure, would be touched with sympathy. Our butcher lost $2,000 in it at Lakeside, which he took out of the Imperial in Ingersoll for convenience. His sons have both been through operations this last year, and here this man is without a dollar, and his oldest son and son-in-law are on rented places lately set up and cannot meet their payments, and this, sir, is repeated wherever Travers set his trap.
Then she goes on to speak of criminal proceedings at Toronto, commenting upon them and wanting to know why they are not more effective. She proceeds as follows: I
I am proud of my country, but I am ashamed of the way this affair is conducted. Now, sir, if yon know any other of the members who know better than you how people are suffering, do please get them to advocate the rights of the people and pay them their hard earned money. Those who stole should be made to refund, and what the Keeley mine does not supply, should be raised by the government, and paid by May at the farthest. You know very well that the people have no Mr. CROTHEES.
way of agitating reforms of any kind but through their public men, both in church and state, and I feel that this has been a clear case of robbery, and is a case of truth and justice, to be rectified by the government, and also things should be put on such a basis that such rascalities could never occur again. You know the government helped the sufferers by the Martinique disaster, and it is quite right, but how much more should our own people, who are industrious and law abiding, be helped, who put their money in the * Farmers' Bank ' believing it to be chartered properly. How soon we should be arrested and fined heavily if we made wine and sold it without paying license to the government. A pedlar cannot travel a one-horse wagon without paying license, and why should bankers be allowed so much liberty which has often driven sufferers to the lunatic asylum hr worse than all to suicide. I do hope you will do your best in this matter, and oblige thousands.
That gives an idea of the way this matter is regarded throughout the country, of the suffering which has been brought upon the people, and the question is: How has all this result been brought about? The bank obviously should not have been permitted to commence business. My hon. friend the Minister of Finance himself has admitted that. There can be no doubt at all, as my hon. friend from North Toronto (Mr. Foster) has pointed out, that if he had taken the ordinary business precaution of calling for the minute books of this bank, as one would suppose that any man in his senses would have done, he would have seen that the Bank Act was being violated, he would not have permitted the bank to commence business. Let us see what the real conditions were when the bank commenced business. I am not speaking of my own knowledge; I am taking it from the curator's report, at pages 6 and 7. of the Eeturn which has been brought down. The directors had collected about $211,000 from subscribers in cash. In contravention of the law of this country, a fact that was shown by their own minute books, which were not brought here as they should have been, they paid out improperly for commissions and expenses $41,000; so that they had in actual cash not $250,000, but $170,000. They handed over that $170,000 and turned over subscribers' notes to W. R. Travers, who borrowed on these notes $80,000, which amount, with the $170,000, made-up the $250,000 which he deposited with the Receiver General. Travers then handed back the $80,000 which he had borrowed, and thus the bank's capital, after the deduction of the $80,000, did not amount to the sum required by law. Further than that, the actual amount of capital, $211,000 which had been collected by the directors, was further diminished to the extent of $41,000 which it had been improperly paid out. How was it possible under such conditions that the Treasury Board permitted

this bank to commence business? Had the Treasury Board any notice that these unlawful acts were being perpetrated? They had the most direct and positive notice, I affirm, in the presence of the Minister of Finance, and I will prove that the notice of the frauds was never from first to last withdrawn.
Mention has been made of the oral notice given to the Minister of Finance by my hon. friend from Halton (Mr. Henderson), I can only say with regard to that, without the slightest disrespect to the Minister ol Finance, without any desire to impugn his sincerity, that where you have two men, one of whom deposes to a positive and direct recollection of a particular incident, and the other of whom says he has no recollection of that incident and does not believe that it ever took place, according to' well recognized rules which prevail in courts of justice, assuming that both of these men are sincere in their statements, credit must be given to the man who has a positive and direct recollection and credit will not be given to the man who simply says that he has no recollection.


William Stevens Fielding: I think that my hon. friend ha.rdly states the case fairly. I did not state that I had no recollection; what I did state was that I had had conversations with the hon. member for Halton, but that the nature of these conversations was not as he had stated it to be. I did not say that I had no recollection.


Robert Laird Borden: All I have to say to the Minister of Finance is that if he will grant this Royal Commission another hon. member of this House will be produced and will depose on oath, as he has informed me, that he gave the same kind of notice.


William Stevens Fielding: Why cannot the hon. member say so here?


Robert Laird Borden: Because he is not in this country, or in this House at the present time, but he told me before he left the country that he gave the Minister of Finance exactly the same kind of notice which my hon. friend from Halton gave to the minister.


William Stevens Fielding: Will my hon. friend give the name?


Robert Laird Borden: I will give the name; Mr. E. B. Osier was the man who so informed me.


William Stevens Fielding: I am quite satisfied that Mr. Osier will not confirm that statement. I think my hon. friend has misunderstood Mr. Osier, and I am quite sure that Mr. Osier will hardly make the statement in the terms that my hon. friend has stated it.


Robert Laird Borden: I am perfectly aware that it is possible to misunderstand 170
a gentleman who makes a communication. I do not think I misunderstood Mr. Osier with regard to the matter because! the communication was made not in my presence alone, but in the presence of other gentlemen w;Jio understood Mr. Osier in that regard in exactly the same way as I understood him. There are gentlemen sitting in this House within the sound of my voice who heard Mr. Osier make that statement when I heard him make it before he went away.


George Eulas Foster: Give us your commission and we will produce the man.


Robert Laird Borden: Further than that I have heard of other reputable men also who, before this certificate was issued, gave the Finance Minister the same kind of warning. There are also rumours throughout the country-I do not know whether they are correct or not-that this matter so impressed itself upon certain officials in his department that they made a rather strong protest against the certificate being granted under the circumstances in which it was granted.


William Stevens Fielding: I can assure my hon. friend that that is unfounded.


Robert Laird Borden: Well, I accept the minister's statement at once. I only mention it because it came to me in a way that seemed to give some appearance of credibility. But, we need not debate these things. There was the letter of Mr. Leighton McCarthy, there was the writ, and the endorsement upon the writ itself which, in the plainest and most unmistakable terms, conveyed a warning to the Minister of Finance in this regard. Perhaps sufficient emphasis has not been laid upon one particular paragraph of Mr. McCarthy's letter of the 19tn of October, 1906, three days before the writ was issued. He stated the writ would shortly be issued, and three days afterwards on the 22nd of October, it was issued, and in his letter he says:
I 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 arid received the proceeds, and that a deposit either has been made or will be made of the cash received and the proceeds of these notes, or sufficient amount to make up $250,000.
The intimation conveyed by that to any one who is familiar with the provisions of the Bank Act is simply that these men were conspiring together to contravene and to evade the provisions of the Act which the Minister of Finance was bound to see observed. From first to last Mr. Leighton McCarthy, in the correspondence at least, has never withdrawn the statement made by him in that letter of the 19th of October,



1900. True, he did in a subsequent letter state that his clients had been settled with, but he never in any letter withdrew these statements of fact which he made to the Minister of Finance. The statements in the writ itself are so startling and convey so plain a notice to the Minister of Finance that one would think there could not be the slightest doubt in his mind as to what his plain duty would be. The first charge of fraud is this:
1. That the provisional directors who professed to act for and in the name of the hank 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 agent 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.
Then he gives eight or ten cases where men had applied for small sums and had been put down for sums ten times as great, and where men who had subscribed nothing at all are put down on the stock list as actual subscribers. In all the instances so set forth in this writ, as I understand it, the names of these men are on the stock list which the Minister of Finance accepted on the sworn declaration of Travers, although comparison of the writ with the list would have given the plainest possible indication to the Minister of Finance not only of fraud in the first instance, but fraud persisted in up to and at the very-time when this certificate was being asked for from the government:
That Major Thomas Beattie, represented by the prospectus to have consented to act as a director, had not subscribed for any shares, and refused to be a director, and refused to allow his name to be used in any way in connection with the bank; and the plaintiffs allege that the names of other persons were represented by the prospectus to have consented to act as directors who had not subscribed for any shares or given any authority for any such publication.
Was it not open to the Minister of Finance to write a letter to Major Beattie and ask him whether that statement was true or false? Was it not competent also for the Minister of Finance to have taken the precaution which Major Beattie took to have looked up the record of Mr. Travers a little and to ascertain whether this matter was not worthy of further investigation by him. There is a further direct charge of fraud which ought to have attracted the attention of the Minister of Finance in an especial manner:


Robert Laird Borden: And the plaintiffs further allege that the agents and solicitors who were procuring subscriptions for shares had not lawful power or authority to solicit or accept applications for shares or subscriptions for shares.
And the plaintiffs allege that the agents and solicitors professing to act under the name and authority of the provisional directors have procured a large number of subscriptions for shares, and have received the sum of one hundred and seventy-five thousand dollars more or less on account thereof, and have also procured promissory notes to be signed by persons who were subscribing for shares, payable to the provisional directors of the bank, and the persons acting in the name and under the professed authority of the act of incorporation and amendments thereto, are endeavouring to discount or procure a loan by the transfer of the said notes.
And the plaintiffs further allege that the persons professing to act as aforesaid under the alleged authority of the provisional directors have unlawfully deducted large sums of money for alleged services and commissions and other purposes out of the money received by them.
The plaintiffs allege that the shares and the money and the promissory notes procured from them have been procured through fraud, deceit and misrepresentation.
Finally in the concluding part of the endorsement prayer is made for:
An injunction to restrain the bank, and the provisional directors and the general manager, and their officers, servants or agents, from the publication of a notice to call a meeting of the alleged subscribers of the shares of the capital stock of the bank, and from making application to the Treasury Board for a certificate under sections It and 15 of the Bank Act.
The defendants in that suit under the terms of the settlement in court admitted in effect every one of the charges of fraud I have just now read.
I am not going into particulars of Sir Edward Clouston's warning just at this moment, but to be brief let me sum the whole situation in this way. The minister had the following warnings-in the first place he had the warning of the hon. member for Halton (Mr. Henderson). Again I repeat that, attributing equal sincerity to each, the testimony of one who has a distinct recollection of a particular incident which impressed itself upon his memory, is always to be accepted against that of the other party who merely affirms that according to his recollection the incident did not occur. In the second place he had the warnings of other similar witnesses who can be produced if inquiry is granted. In the third place he had the warnings of Mr. Leighton McCarthy in the three letters referred to. In the fourth place he had the warnings contained in the writ of summons, and the endorsement. I want to point out to the minister and to the House that the charges

in that writ were of a two-fold nature, namely, those which concerned the plaintiff alone and those which concerned the public interest, and the duties of the Finance Minister. Among the latter were the charges that moneys had been illegally paid out by the provisional directors in contravention of the Bank Act, thus impairing the hank's capital. Even if the plaintiffs were settled with, was not that a consideration which should have been before the mind of the Minister of Finance, and which should have impelled him to call for the minute books, and for every scrap of evidence which would bear upon the conduct of the persons which had been promoting the organization of this bank. Another charge made by Mr. McCarthy, and which never has been withdrawn was: That notes of subscribers had been and were being discounted by the provisional directors in order to evade the Bank Act, and to deceive the government, and there was a further charge that fraudulent representations were being made by this man to obtain the money necessary to secure the certificate of the Treasury Board. And, although Mr. McCarthy withdrew his clients' objection to the granting of the certificate by the Treasury Board he never withdrew his statements and representations which disclosed a fraudulent attempt to evade and contravene the Bank Act. Although the suit was settled the allegations of fraud set forth in the writ were never withdrawn, but were rather confirmed by the judgment of Mr. Justice Anglin. The written warning of the Canadian Bankers' Association confirmed all previous warnings, and the Treasury Board should have instantly ordered the return of the certificate and failing compliance the government should have peremptorily ordered the issue of a Royal Commission to. investigate the alleged frauds. The Treasury Board had a plain and clear duty before it. We have been asked what could the Minister of Finance do? In the first place he could have ordered the production of the minute books, he should have ordered an investigation, he should have ordered further corroborative evidence, he should not have granted that certificate after warnings which had been conveyed to him unless he was absolutely and positively assured by the evidence as to which there could be no doubt whatever that everything in connection with the Farmers' Bank had been properly done in accordance with the law, and that no fraud was intended upon the government of this country or upon the public. That is what he should have done. But, he says he was helpless when the direct and positive warning of Sir Edward Clouston came to him. I say he was far from helpless.
What should he have done? He should have sent a telegram after Travers. It is 1701
said that he sent a messenger after him, and that Travers refused to give up the certificate. That may be mere rumour; there may be nothing in it; and I do not vouch for it. But the minister should have sent a telegram after Travers ordering him to return that certificate immediately and telling him that if he failed to comply, the government would the next day issue a Royal Commission to inquire into all the circumstances attending the organization of that bank and its application to the Treasury Board for a certificate. That is what the minister could have done, but that is what he did not do; and as the direct result of his inaction and neglect, the farmers of Canada, the workingmen of this country, have suffered losses to which they should not have been subjected; the Bank Act of Canada, as to its efficiency and its operation, has received a blow such as it never received before. From one end of this country to the other people are in doubt to-day as to our banking system, seeing that under the operation of that system, under the safeguards which ought to be observed by the Finance Minister and his department, these frauds have been perpetrated. The minister had Travers' affidavit, it is true, but he had the warnings of reputable men that that affidavit did not set forth the true statement of facts. What was the course he took? He took the solemn and serious course of asking Travers in private conversation whether or not his affidavit was true or false, and he received of course the answer that the affidavit was true. He then solemnly determined that that conversation should be made a matter of record and sat down and wrote a letter to Travers and Travers wrote a letter to him, and then he handed over the certificate. Is it any wonder that the other side of the House has lapsed into silence over this transaction? I do not wonder that they no longer have the courage or hardihood to stand up and say a word in defence of the position of the government. I do not wonder that the Prime Minister left this chamber in disgust and only returned a few moments ago. I wonder whether we shall hear from him; but if we do I sincerely trust that he will give some attention to some of the serious matters which have been urged against the administration of an important department of his government in this connection.
Then, as my hon. friend from Hastings has observed, within two or three months after this bank had begun business, the Minister of Finance learned out of the mouths of officers of the bank, by direct statements under their own hand, that these notes which had been discounted for the purpose of raising part of the capital paid over to the Receiver General, were still being held at different

branches of the bank. At one branch $109,000 of this paper was even then being held and that was only two months after this bank had begun business. That was confirmation, if any was necessary, of the warnings the minister had been given. It was confirmation of the warnings given by my hon. friend from Halton (Mr. Henderson), by Mr. Leighton McCarthy, by Mr. Osier and other persons, by the writ of summons and the endorsements thereon, and last but not least it was confirmation of the direct and positive warning given by the president of the Canadian Bankers' Association. What was the object and. purpose of that association when its president conveyed to the minister the positive statement that a fraud was being practised on the government in order that a greater fraud might be practised on the people, if not to induce the government to take some course to protect the public. Yet the minister remained inactive and matters were allowed to drift. This is absolutely an indefensible case, and it will be to the discredit of the government if it should refuse the inquiry demanded by my hon. friend from Halton.


Eight Hon.   S@: In approaching the discussion of this question, I think it is advisable in the first instance to examine what are the objects stated by the motion of the hon. member for Halton (Mr. Henderson). The motion reads:
That this House is of the opinion that a Rcyal Commission should forthwith issue to inquire into and investigate tha incorporation and organization of the Farmers' Bank of Canada and the granting of the certificate by the Treasury Board permitting the said bank to issue notes and commence business, and all circumstances connected therewith, and generally to inquire into and investigate the operation and efiiciency of the Bank Act in relation to the affairs and transactions of the said bank.
In this motion three things are asked. It asks that a commission should be appointed to investigate the incorporation of this bank, its organization and then the granting of the certificate by the Treasury Board permitting it to issue notes and begin business. The discussion which has already taken place has already eliminated from this motion two of the objects sought to be accomplished by it. The first thing to be examined was the incorporation of the bank; but if I understood the speech of my hon. friend from North Toronto (Mr. Foster), that part of the motion has been abandoned because he said that in reality there was nothing to investigate as regards the incorporation of the bank.


George Eulas Foster: If my right hon. friend will allow me, I was combatting the argument made by the Minister of Finance. He Mr. BORDEN (Halifax).
divided the motion into three sections, namely, the incorporation of the bank, the granting of the certificate and the operation of the bank. I agreed with him, that as far as the incorporation by the commission and this House was concerned, ail were responsible. My hon. friend from Halton said that by incorporation he meant all the preliminaries up to and including the granting of the certificate. I was simply replying to the Minister of Finance.


Wilfrid Laurier: I think that this is really a distinction without a difference. Will my hon. friend tell me now, in the face of the discussion we have had, what would be the object of an investigation into the incorporation of the bank? What would such an investigation lead to? The same thing applies to the organization of the bank. The Teal crux of the matter is the third part of the motion, the granting of the certificate by the Treasury Board. All the discussion ^has1 really been upon this part of the motion and nothing else. Nothing serious has been said about the incorporation or organization, but the whole complaint has been that the Treasury Board -advised by the Minister of Finance, made a mistake in granting the certificate. Therefore we can eliminate the other two parts and address ourselves to this alone, namely, what are the facts connected with the delivery of the .certificate? My hon. friend from Halton made his motion with an object, and that object was to show that the certificate had been issued erroneously, that it should not have been issued at all, that the Department of Finance and the Treasury Board had been deceived and all this led to the conclusion that the government or parliament or the country should assume the losses incurred- by the shareholders-. I think I have stated _ the case fairly when I pat it in this way. We are asked to- investigate the granting of the certificate in order that such investigation might lead parliament to come to- the rescue of those who lost their money in this institution. If siuch be -the case, let U3 examine the reasons given why parliament should take this extraordinary step. The reason given is that the Department of Finance was deceived. All the speeches made, even the speech o-f my hon. friend who has just sat down (Mr. Borden, Halifax), have been to this effect, that the Department of Finance and the Minister of Finance, as leader of the Treasury Board, issued a certificate which should not -have been issued1, that the government had been deceived, and -that those who 'lost by the bank should not bear their losses but they should be borne by the country.
Deceived in what manner? That is the question we have to investigate. That the

Minister of Finance and the Treasury Board have been deceived was admitted long ago. But let us go further. My hon. friend from Halton (Mr. Henderson) tells us that this is only a preliminary step leading to another whereby parliament should be induced to come to the rescue of the men who put their money in the hands of Mr. Travers and the other directors of the bank. In what manner have the department and the Treasury Board been deceived, and what had the deception to do with the ultimate loss incurred by the shareholders? The deceit consisted in Mr. Travers, manager of the bank, reporting under oath that the bank had received in cash $250,000, half the amount required to be subscribed under the statutes. There iis no longer any question about the deceit. When Mr. Travers declared that the shareholders had put into the treasury of the bank $250,000, that was deceit to the extent of about $80,000. That is admitted. Afterwards the bank failed. The question arises: Was that deception the cause of the failure of the bank? Can any one say-I put the question to my hon. friend from North Toronto (Mr. Foster), to my hon. friend the leader of the opposition (Mr. Borden, Halifax)-that this deception was the cause of the failure of the hank and the loss of the shareholders' money? I believe it has been stated and not denied that ultimately the whole of this money was paid into the treasury of the bank. There was a deception at the time, but afterwards the whole $250,000 required for the bank to commence business was actually paid in by the shareholders. If the bank afterwards failed and the shareholders lost their money, it was not because of the deception practised upon the Minister of Finance and the Treasury Board.


Robert Laird Borden: 
Wilfrid Laurier: The hon. gentleman's question has no relevancy to the subject now before us.


Robert Laird Borden: Why not?


Wilfrid Laurier: Let me read
the motion under discussion:
That this House is of the opinion that a Royal Commission should forthwith issue to inquire into and investigate the incorporation and organization of the Farmers' Bank of Canada and the granting of the certificate by the Treasury Board permitting the said bank to issue notes and commence business.
The motion is not to examine what took place after the bank had been organized as now suggested, but to examine these circumstances under which the certificate was granted.


Robert Laird Borden: If I understood the motion correctly, it asks for an investigation into the operation and efficiency of the Banking Act in respect of the affairs and transactions of the bank.


Wilfrid Laurier: Let us read the motion:
That this House is of opinion that a Royal Commission should forthwith issue to inquire into and investigate the incorporation and organization of the Farmers' Bank of Canada, and the granting of a certificate by the Treasury Board permitting the said bank to issue notes and commence business, and all circumstances connected therewith and generally to inquire into and investigate the operation and efficiency of the Bank Act in relation to the affairs and transactions of the said bank.
The fact that the provisions of the Bank Act may be violated is not an argument in favour of the view taken by my hon. friend. We are asked to investigate three things-the incorporation, the organization and the granting of the certificate. As to the granting of the certificate, anything that transpired afterwards, when the bank was in operation, is not relevant to the question.


Mr. LANCASTER.: Will the Prime Minister allow me a question? If the Treasury Board had not given the bank permission to do business, could this loss have occurred?


Wilfrid Laurier: That is very easily answered-certainly not. Had the certificate of the Treasury Board not been granted, the bank could not have begun business; and there would have been no default and no loss. But the object my hon, friend from Halton (Mr. Henderson) had in this motion is, after this investigation is granted, the treasury of Canada should come to the rescue of the shareholders. My answer to my hon. friend is there is nologic or relevancy in his question. If the shareholders have lost, the man who was their agent deceived the Treasury Board as well as the shareholders, and the Treasury Board is no more responsible for the laches of the agent of the shareholders than
COMMONo
are the shareholders themselves. I think that is common sense. The government has been deceived by the agent of the shareholders, by the man whom they selected, and in whom they put their confidence. So, I ask my hon. friend himself:	Does he
think that, under such circumstances, it lies in the mouth of the shareholder to tell the government:	You should relieve
us from the effect of the laches of our own agent?


Edward Arthur Lancaster: If the hon. gentleman is speaking to me, nay answer is that in the first place the motion does not say anything of the kind, and, in the second place, in the interest of the people, there should be a full investigation so that a disaster like this could not happen again.


Mr. GOODEVE.: May I ask a question? As I understand it, the object of the hon. member for Halton (Mr. Henderson) is, only if the investigation proves that the issue of the certificate was due to the neglect of the Finance Department, to hold the government_ responsible for protecting the people.


Wilfrid Laurier: I say that is the object of this motion, as it was plainly stated by my hon. friend from Halton, who spoke, I think, in very clear language. He made it plain that his object was to come to the rescue of the shareholders. He wanted to show that this investigation was only a preliminary step which would ultimately induce parliament to recoup these people for the losses they have suffered. My answer is, simply, if the shareholders have lost, it is because the agent of the shareholders deceived the government as well as the shareholders. And I think it is not a sound principle that anybody should be recouped for a loss made by his own agent.


David Henderson: I dislike to interrupt the Prime Minister, but would he permit me a word?


Wilfrid Laurier: Certainly.


David Henderson: I think you will recollect, Mr. Speaker, that in what I said I divided the question into two parts. I distinctly said that if the loss was all brought about by reason of the action of the men whom the shareholders had put into office, then, they should suffer alone. I was clear on that, I think. But I said that if, on the other hand, the loss was brought about by reason of the action of this government or of the Treasury Board which was part of the government, then I thought this country was big enough, rich enough and generous enough to maintain its own honour and defend these people. That is what I said.


Wilfrid Laurier: I am quite willing to discuss the question in the light Sir WILFRID LAURIER.
my friend has placed it, that this country is broad enough, rich enough, to correct an error of the government, if an error has been committed. Undoubtedly the government has been deceived in this matter, but by whom? The government has been deceived by the agent of the very men whom my hon. friend now wants to recoup. The government has been deceived by, Mr. Travers, if by anybody, and Mr. Travers was the agent of the shareholders who had appointed him to his office. Under the circumstances, I think that the suggestion of my hon. friend that the government should come to the rescue of the men who appointed the very man who deceived the government, is a proposition which no one could on reflection be prepared to admit. Now, it has been stated that there is a further question to investigate, the broader question of the sufficiency of the Bank Act. That is a good proposition, and it may be that an investigation might serve a good purpose. But I am not prepared to say at the present time that a case has been made out against the Bank Act; I do not say that later on something may be disclosed of that nature. But I have to observe that at the present time the matter is being investigated^ by the courts, and that there is not sufficient evidence yet disclosed by the courts to show that it is necessary to go further with this investigation. My last word is that at this moment no case has been made out why the motion should be granted.


Robert Laird Borden: I would like to ask the Prime Minister how he can argue that Mr. Travers was the agent of the depositors.


Wilfrid Laurier: I did not say the depositors. I said the shareholders.


Robert Laird Borden: But the depositors are the people who are suffering.
On motion of Mr. Edwards, debate was adjourned.
On motion of Sir Wilfrid Lauxier, House adjourned at 12.07 a.m. Thursday.

Thursday, March 16, 1911.