1924-04-09

UNITED CHURCH OF CANADA

[Stage Direction]
Mr. MATTHEW R. DUNCAN (North Grey): Mr. Speaker, I desire to present the petition of the Owen Sound Presbytery opposing the United Church of Canada bill.
Mr. L. J. LOVETT (Digby-Annapolis):: Mr. Speaker, I desire to present petitions from Digby Methodist Church, Bay View Presbyterian and Methodist Churches, Smith's Cove Methodist Church, Middleton Presbyterian Church, Middleton Methodist Church, Annapolis Royal Methodist Church, Annapolis Royal Presbyterian Church, Clementsport Methodist Church, Granville Ferry Methodist Church, Port WTade Methodist Church, Par-kens Cove Methodist Church, Goat Island Methodist Church, Bear River Methodist Church, and Lawrencetown Methodist Church, in favour of the enactment of legislation to incorporate the United Church of Canada.



QUESTIONS

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

Mr. SHEARD:: 1.	Has Mr. Aronovici referred to by the Minister of Railways in the session of 1923 as the Canadian National Railways' representative in France, been discharged or otherwise severed from the service of the said railways?
2.	If so, why?
3.	How much money altogether was paid said Aronovici in the #service of the railways and for what length of time?


Hon. Mr. GRAHAM:: 1.	Resigned from service.
2.	The re-organization of the traffic, colonization and development departments of the Canadian National Railways on the continent of Europe.
3. Salary from April 15, 1923, to December 31, 1923, at $1,250
per month	$10,625	00
Compensation for special services, December 1, 1922 to
April 15, 1923	
5,625	00Travelling expenses	
9,291	46

Also 150,000 francs, or approximately $7,500, in lieu of notice.

Questions


Mr. STEWART (Leeds):: 1.	When did A. Aronovici receive appointment as General Agent (or otherwise) of the Canadian National Railways?
2.	What were his duties and his salary?
3.	For what reasons did the Canadian National Railways management or the Department of Railways and Canals through Major Graham Bell or otherwise, press for Aronovici's resignation ?
4.	What moneys were paid Aronovici over and above his salary in connection with such resignation, or otherwise?


Hon. Mr. GRAHAM:: 1.	April 15, 1923.
2.	General charge of traffic, colonization and development departments on continent of Europe; salary $15,000 per annum.
3.	The re-orgamzation of the traffic, colonization and development departments of the Canadian National Railways on the Continent of Europe.
4.	150,000 francs or approximately $7,500.


SOLDIERS' CIVIL RE-ESTABLISHMENT EMPLOYEES
Mr. McBRIDE:: 1.	What was the total number of employees of all classes in the Soldiers' Civil Re-establishment department at Ottawa-
(a)	on the 31st December, 1921;
(b)	on the 31st March, 1924?
2.	What was the total salary paid to such employees-
(a)	on the 31st December, 1921;
(b)	on the 31st March, 1924?


Hon. Mr. BELAND:: 1.	(a) Total number of employees of all classes at Ottawa, December 31st, 1921, 1,178.
(b) Total number of employees of all classes on March 31st, 1924, 741.
2.	(a) Total salaries paid to such employees December 31st, 1921, $1,348,664.
(b) Total salaries paid to such employees 31st March, 1924, $911,693.


Mr. MANION:: 1.	What is the total number of employees of all classes in the Soldiers' Civil Re-establishment department in Ottawa ?
2.	What is the total salary paid to such employees?


Hon. Mr. BELAND:: 1.	741; consists of head: office staff, and staff employed at the headquarters of the eastern Ontario unit.
2.	$911,931.


MR. DUNCAN MARSHALL
Mr. SUTHERLAND:: 1.	Out of what vote of parliament have the payments been made which have been received by Mr. Duncan Marshall as salary and expenses, which payments total according to the government's return $19,937.98?
2.	Under what clause of the Appropriation Act, or if not paid under the authority of the Appropriation Act, under what clause of any other act had the government authority to pay Mr. Marshall?


Hon. Mr. COPP:: Department of Agriculture.
1. Votes Nos. 51 and 14-1921-22.
Votes Nos. 52 and 14-1922-23.
Votes Nos. 50 and 14-1923-24.
2. Appropriation Act No. 2.	No.	1-1921-SectionAppropriation No. 2.	Act	No.	2-1921-SectionAppropriation No. 2.	Act	No.	1-1922-SectionAppropriation No. 2.	Act	No.	2-1922-SectionAppropriation No. 2.	Act	No.	1
1923-Section
Appropriation No. 2.	Act	No.	2-1923-SectionAppropriation No. 3.	Act	No.	3-1923-Section
Department of Immigration and Colonization.
1.	$300 paid by this department; was from vote for exhibitions, salaries and contingencies.
2.	Appropriation Act, Vote 56, Department of Immigration and Colonization 1922-23.


CANADIAN NATIONAL RAILWAYS-COLONEL BALFOUR
Mr. STEWART (Leeds):: 1.	Was Colonel Balfour employed as head of the Immigration and Colonization department of the Canadian National Railways, or in any other capacity, and if so, at what salarj' and for what period?
2.	Was he provided with a staff, and if so, what were the names and salaries of that staff?
3.	What was the total amount of salaries and expenses of said Colonel Balfour and staff, up to the time he was sent back to England?
4.	Is Colonel Balfour still retained on the payroll of
the Canadian National Railways, and if so, at what salary and in what capacity?	*


Hon. Mr. GRAHAM:: 
HUDSON BAY
Mr. DESLAURIERS:: 1.	At what distance are the ships used in provisioning the post of Port Nelson, in the Hudson bay, obliged to anchor to allow the transhipment of their cargo?
2.	What is the rate, per hour, of the current at that point?
3.	What is the speed, per hour, of the lighter?
4.	What is the draught of the Nascopie?
5. What is the mean depth of the Hudson bay according to the latest soundings, and what is the length and width of said bay?
6.	What was the cost of the dredge sent to said bay during the war, how long was it in service, how many men were employed on same, and how long did they remain there after work ceased?


Hon. Mr. GRAHAM:: 1.	Seven and one-half miles, if draft 21 feet and over.
2.	About four miles per hour.
3.	Six to seven miles per hour.
4.	About 21 feet.
5.	The mean depth over the outer bar 19 miles from the Nelson wharves at high water of neap tides is 33 feet. Hudson bay is 530 miles long and 450 miles wide.
6.	The suction dredge, Port Nelson, with pontoons cost $371,881.20. It was in service during the working seasons of 1915, 1916 and 1917. The double shift crew, including pontoon tenders, consisted of 29. The crew was discharged as soon as the dredge was placed in winter quarters at the end of each season's work.


EXAMINER OF PATENTS
Mr. HARRIS:: 1.	Why has the Commissioner of Patents abolished the position and dispensed with the services of the examiner who has had charge of this work?
2.	Who is to examine such applications for patents, and what are his qualifications for such work?
3.	Was not the examiner competent to do the work?
4.	What are the reasons for his dismissal?
5.	What representations have been made on this matter by the chemical and metallurgical industries and professions?


Hon. Mr. STEWART:: 1.	Assuming that the position referred to is that of the patent examiner who is charged with the examination of chemical, electro chemical and metallurgical patent applications, the Minister of Trade and Commerce abolished it for the reason that he was of the opinion that the duties of the position could be performed by remaining members of the examining staff in addition to the other duties assigned to them.
2.	Remaining members of the examining staff as follows:

Chemicals.-M. A. Belanger, a pharmaceutical chemist, a graduate, 1890, of the Ontario College of Pharmacy affiliated to Toronto University. Service in pharmacy thirteen years; examiner of patents twenty-three years, had charge of chemical applications 1908, 1909, 1910.
Electro Chemistry.-J. II. Young, a graduate of Queen's University, 1910 with a degree of Bachelor of Science in electrical engineering. Patent examiner eleven years. Had charge of electro chemical applications in 1914.
Metallurgy.-J. T. Mitchell, a Bachelor of Science in engineering of Glasgow University, Scotland 1909, taking the usual course in chemistry prescribed for engineering students. Assistant draughtsman, The Steel Company of Scotland, Hallside Works, Newton, (furnace work). Engaged in metalliferous mining in Rhodesia, South Africa (mill work, amalgamating, retorting and assaying gold). From June 1913 to September 1920, employed by a prominent firm of Canadian patent attorneys in preparing and prosecuting patent applications before the Canadian and United States Patent Offices. Entered the Patent Office in 1920.
L. C. Prittie, B.Sc. of Queen's University in mining with metallurgical option acts as assistant to Mr. Mitchell.
3.	All examiners whose positions have been abolished were considered competent for their work. The examiner in question has not shown the capacity of other members of the staff.
4.	The holder of the position referred to was not dismissed. This position was one of three abolished for the reason given in No. 1, and as a consequence the services of the holder were dispensed with.
5.	Evidently unaware of the qualifications of the remaining members of the staff, fifteen in number in addition to the senior examiner and five assistants, certain chemical and metallurgical industries and professions have represented that the abolition of the position in question would injuriously affect such industries.


C. G. S. GULNARE
Mr. BLACK (Halifax):: 1.	Has the Canadian government steamer Gulnare been laid up ?
2.	If so, on what date was the steamer laid up and for what reasons ?
3.	Who was placed in charge of this steamer?
4.	What salary was paid to the person in charge?
5.	Who is now in charge of the steamer 'Gulnare and what is his salary?

Questions


Hon. Mr. STEWART (for Mr. Cardin):: 1.	Yes.
2.	The Gulnare was laid up on October 25, 1923, as the survey work on the gulf of St. Lawrence was completed for the season. On account of the reduction in the Geodetic Survey estimates it was decided to keep the Gulnare laid up for the fiscal year 1924-25.
3.	The steamer was placed in charge of Captain O. J. Morin, who has been in continuous charge since April, 1920, and has given very efficient service. He is thoroughly acquainted with the gulf and lower St. Lawrence area and it is of vital importance to our Geodetic Survey that he be retained for the completion of this work. In addition to guarding the boat, Captain Morin will be kept busy effecting needed repairs.
4.	During the fiscal year 1923-24 Captain Morin was paid a salary of $160 per month.
5.	Captain O. J. Morin, at a salary of $160 per month.


COLONEL JOHN McCOMBE
Mr. HANSON:: 1.	What position does Colonel John McCombe hold with the Department of Soldiers' Civil Re-establishment?
2.	What is his salary?
3.	On whose recommendation was he appointed?
4.	Is he carrying on at any other government work at the present time?
5.	If so, what work?
6.	What are his duties in connection with the Department of Soldiers' Civil Re-establishment, and how many days' time has he given to these duties during the past year?
7.	How much money has he drawn in salary for the past fiscal year ?


Hon. Mr. BELAND:: 1.	Part time Inspector of Medical Services.
2.	$3,300 per annum.
3.	Director of Medical Services, Department of Soldiers' Civil Re-establishment.
4 and 5. No.
6.	(a) As directed, to inspect hospitals, sanatoria, clinics and all District Medical staff of the department, to report thereon; to suggest reductions in personnel that may be effected without impairing the efficiency of the service, (b) 175 days.
7.	$3,300.



APPEALS UNDER PENSION ACT

Mr. CLARK:: 1.	On what grounds were all appeals refused under Section 12 (2) of the Pension Act as amended in 1923?
2.	Can the Federal Appeal Board and the Pension Board legally award pensions on compassionate grounds under said section as amended?
3.	If so, what classes are covered by the amendment?


Hon. Mr. BELAND:: 1. The interpretation placed by the joint Federal Appeal Board and Board of Pension Commissioners on section 12 of the Pension Act (as amended 1923) is that a compassionate pension or allowance can only be made where pension has been refused because the death or disability of the member of the forces was due to improper conduct. Even under this interpretation no action towards the award of a compassionate pension or allowance is possible by the joint board on account of the words used in the enactment, viz: "because such case did not form part of any class of case." In the first part of section 12 provision is made for cases arising out of improper conduct consequently they do not form part of a class of case for which no provision has been made. Furthermore, the words "because such case did not form part of any class of case" exclude the interpretation that the discretion vested in the Pension Board is to be exercised by the members of the Pension board and of the Appeal board sitting jointly.
2 and 3. Answered by No. 1.



REPATRIATION OF FORMER BRITISH SUBJECTS

Mr. CLARK:: 1.	Is the government aware that citizens of the United States who were born in Canada, or who were formerly British subjects, are required to reside in His Majesty's dominions for a period of not less than five years, before they can be repatriated?
2.	Does the government propose to introduce legislation during the present session by way of amendment to the Naturalization Act whereby such citizens may become repatriated in a shorter period of residence than that now required by the act in its present form?


Hon. Mr. COPP:: 1. Yes. The interdepartmental committee appointed by the Right Honourable M. W. Ridley, Secretary of State for the Home Department, on the 9th of February, 1899, reported on the 24th July, 1901, and dealt with the question of re-admission of denaturalized British-born subjects as follows:
Sec. 35. "We do not think it is necessary to maintain the distinction made in the act of 1870, section 8, between "re-admission" and "naturalization." A person who has become an alien under the provisions of the act must before he or she is qualified for re-admission fulfil the same conditions as are required for
Questions

naturalization. We see no sufficient reason for distinguishing between a statutory and any other alien, and consider that it would tend to the simplification of the law if the provisions of section 8 were repealed and) not re-enacted." This section was, no doubt, considered at the Imperial Conferences which resulted in the approval of The Naturalization Act, 1914.
2. The provisions of the Naturalization Act were settled after discussion at the Imperial Conferences of 1907 and 1911. This legislation is uniform throughout the British Empire, and amendments could be dealt with only after consideration at an Imperial Conference.



CANADA HIGHWAYS COMMISSION

Mr. KELLNER:: x. What are the duties of the Canada Highways Commission ?
2.	When was the commission created?
3.	Does the commission disburse or administer the grants to the provinces under The Canada Highways Act?


Hon. Mr. GRAHAM:: 1.	The duties of a Commissioner of Highways, according to the classification of the Civil Service Commission, as approved by Order in Council (P. C. 1184) June 1st, 1920, are as follows:
Under the direction of the Deputy Minister, Department of Railways and Canals, to administer the Canada Highways Act and control the distribution of Dominion grants to provinces for highways; to confer with and give information to provincial legislatures and highway engineers relative to highway matters; to promulgate rules and regulations affecting the construction of highways coming under the act; to supervise the inspection of highways and pavements to ensure conformity with terms of the grant; and to perform other related work as required.
2.	May 15th, 1919.
3.	The commission recommends payments to the provinces, as provided by the act, on report of its inspecting engineers and auditors.



CANADIAN NATIONAL RAILWAYS-EQUIPMENT

Sir HENRY DRAYTON:: 1.	What orders have been placed for cars, engines and other equipment by the Canadian National Railways or any company incorporated therein or any other company the majority stock of which is held by the government of Canada, in the years 1922 and 1923?
2.	With what companies and at what prices and terms were such orders placed, and when?
3.	Were any of such orders given on a "cost plus" basis, and if so, to what companies and for what quantities?
4.	Were such orders on such terms approved of by the
government ?	.


Hon. Mr. GRAHAM:: 1. and 2. During the year 1922 equipment was ordered as follows:-250 Refrigerator cars for Chicago, New York & Boston Co. built by American Car and Foundry Company at a price of $3,132.11 each. 1 Gasoline motor car from the National Steel Car Corporation at $27,500.00 plus Sales Tax.
During the year 1923 equipment was ordered as follows:-
Total including
Locomotives.	Price.	Sales Tax.
16 Mountain Type, Canadian Locomotive Co		$74,500 00 $1,245,640 00	
16 Consolidation type, American Locomotive Co	47,165 00	754,640 005 Pacific type, American Locomotive Co.	56,000 00	230,000 0035 Mikado type, Montreal Locomotive Co	66,500 00	2,431,453 7510 Mikado type, American Locomotive Co	56,795 00	567,950 008 Mikado type, American Locomotive Co	56,625 00	451,208 0010 Mikado type, Canadian Locomotive Co	66,500 00	694,925 0010 Switchers, Canadian Locomotive Co	41,000 00	430,749 008 Switchers, American Locomotive Co.	37,570 00	300,560 005 Switchers, Lima Locomotive Co. ..	51,700 00	258,500 005 Switchers, American Locomotive Co.	38,092 00	190,460 003 Switchers, Lima Locomotive Co. ..	40,000 00	120,000 007 Transfer switchers, Canadian Locomotive Co	52,500 00	384,037 00Passenger equipment. x-35 1st class coaches, Canadian Car & Foundry 	35,443 81	1,296,357 35x-6 Comb. 1st & 2nd coaches, Canadian Car & Foundry ...	35,443 81	222,232 1950 Express refrig. National Steel Car .	10,550 00	551,237 50x-20 Baggage cars, Canadian Car & Foundry 	24,750 00	517,275 00x-10 Baggage cars, National Steel Car	24,750 00	258,637 50
Questions
Passenger equipment.-	Total including
Con. x-30 Sleeping cars, Canadian Car &	Price.	Sales Tax.Foundry 	
x-10 Mail cars, Cana-d i a n Car &	49,400 00	1,548,690 00Foundry 	
Freight equipment. 250 RefrigL cars, American Car &	29,650 00	309,842 50F oundry 	
1000 40-ton box cars, Canadian Car &	3,132 11	783,027 50Foundry 	
1000 40-ton box cars,	2,550 00	2,669,750 00National Steel Car 500 40-ton box cars, Eastern Car Com-	2,555 84	2,670,852 80pany 	
750 60-ton Box cars, Canadian Car &	2,555 20	1,277,600 00F oundry 	
250 60-ton Box cars,	3,200 00	2,508,000 00National Steel Car 1000 40-ton Auto ears, Pressed Steel Car	3,200 00	834,000 00Co	
600 40-ton Auto cars, Canadian Car &	2,275 00	2,275,000 00Foundry 	
400 40-ton Auto cars,	2,625 00	1,645,875 00National Steel Car 100 General service cars, Eastern Car	2,625 00	1,097,250 00Company 	
100 General service cars, Pressed Steel	2,950 00	295,000 00Car Co	
100 Hopper cars, Eastern Car Com-	2,300 00	230,000 00pany 	
100 Hart Ballast cars, Canadian Car &	2,750 00	287,375 00Foundry 	
12 Depressed centre flats, Canadian Car	3,264 50	341,140 00& Foundry 	
8 All Steel snow plows, Eastern Car	5,930 00	74,362 25Company 	
32 Ore cars, Nichols	10,500 00	87,780 00Chemical Co	
6 Battery cars, International Equipment	650 00	20,800 00Company 	44,500 00	267,000 00This equipment was all ordered on com-	
petitive bids.
The locomotives and cars which were ordered in the United States were for service in the United States.
3.	Orders indicated by an "x" were purchased on a "cost plus" basis. Tenders were called for, but the management did not consider them low enough to warrant placing orders at prices quoted; therefore the management fixed an upset price, somewhat lower than the lowest quotation, and arranged with the companies on that basis, the maximum not to exceed the upset price arranged. By this arrangement the management were assured that the equipment would not exceed a maximum cost, with the added advantage that if the car companies made any saving over and above the upset price the management would be entitled to it. As a result, in most cases, the management have received credit notes from the equipment builders on the cars so built.
4.	No orders placed on authority of the president.



CANADIAN NATIONAL RAILWAY-TIES

Mr. WILSON:: In the accounts of the Canadian National Railways is the cost of creosoted ties, replacing ordinary ties, charged to capital?


Hon. Mr. GRAHAM :: No.



CANADIAN NATIONAL RAILWAYS-HOME BANK

Sir HENRY DRAYTON:: 1.	When the million dollar cheque was drawn on the bank used by the Canadian National Railways for deposit in the Home Bank, what was the remaining balance to the system's credit in the bank on which such cheque was drawn?
2.	What was the total amount of other cheques cfrawn on said bank then outstanding, including payroll cheques?
3.	What was the total amount of further cheques drawn on the said bank down to the end of the then
current month including payroll cheques?


Hon. Mr. GRAHAM:: 1.	$3,146,180.50.
2.	$759,453.75.
3.	$14,524,690.90.



CANADIAN NATIONAL RAILWAYS-FIXED CHARGES

Mr. ARTHURS:: The answer to question No. 11, given on March 31, stated that the fixed charges of the Canadian National Railways as of date December 31st, 1922, were $59,400,476, but the report of the Department of Railways and Canals, 1923, gives $62,454,627, as the amount of those charges at that date.
Which figure is correct?


George Perry Graham: The fixed charges
as published last year included interest on inter-company securities and advances. In the interval the various companies have been

Questions

co-ordinated and combined into one system and this year's statement of fixed charges is exclusive of inter-company holdings. To make the 1923 figures properly comparable the fixed charges of 1922 had to be re-stated. In addition the first figure mentioned in the question does not include the fixed charges of the Central Vermont; the figure from the annual report of the department does.



ST. MALO WORKSHOPS-EMPLOYEES

Mr. DECHENE:: 1.	Has a Mr. Young been recently appointed assistant foreman in the workshops at St. Malo to replace a Mr. Langis?
2.	If so, has Mr. Young a sufficient knowledge of the French language to give orders to the employees who work under him?


Hon. Mr. GRAHAM:: 1.	Yes.
2.	Yes.


Mr. DECHENE:: 1.	Were two persons, named Hughes and Jackson, employees of the National Railway, at the workshops at St. Malo, in the city of Quebec, accused of larceny?
2.	If so, on what date?
3.	Have the accused been admitted to bail?
4.	Did a trial take place?
5.	If not, why?


Hon. Mr. GRAHAM:: 1.	Hughes, no. Jackson, yes.
2.	September 10, 1923.
3.	No.
4.	No.
5.	Charge withdrawn.



MR. M. P. FENNELL

Hon. Mr. BAXTER:: 1.	Was M. P. Fennell appointed to be Trade Commissioner in Europe?
2.	By whom was he appointed?
3.	Was the Civil Service Commission consulted and what was their action?
4.	At what salary was the appointment made?
5.	What was the reason for the appointment?


Hon. Mr. STEWART (Argenteuil):: The
answer to this question is no.



SOLDIER SETTLEMENT BOARD-OFFICE RENTS

Mr. COOTE:: 1.	What amount was paid for rent of offices by the Soldier Settlement Board for the fiscal year 1922-23 at (a) Edmonton, and (b) Calgary?
2.	How many feet of floor space are covered by the rentals in each case?


Hon. Mr. KING (Kootenay):: 1.	(a) Edmonton, $15,276.67;	(b) Calgary,

2.	Floor space Edmonton, 10,325 square feet from April 1, 1922 to February 28, 1923, (11 months), and 5,423 square feet for March, 1923. Floor space Calgary, 6,000 square feet.



LATE CAPTAIN PERCY R. WHITE

Mr. BLACK (Yukon):: 1.	Did the government issue a policy or policies of soldiers' insurance on the life of the late Percy R. White, Captain, 39th Battalion, Canadian Expeditionary Forces?
2.	If so, what was the amount of each such policy?
3.	Who were the beneficiaries under each policy?
4.	On what plan of insurance were such policies issued ?
5.	(a) What was the rate, and (b) amount of premiums collected for such insurance?
6.	Did the government pay any amounts under any of such policies?
7.	If so, what was the date and amount of each such payment under each policy?
8.	To whom and for whom was each of said payments made?
9.	If such payments were made to an official administrator for the infant son of the insured, what were the dates and amounts of each such payment and to what official administrator were such paid?
10.	Were any deductions made from any of such payments ?
11.	If so, what are the particulars of such deductions?


Hon. Mr. BELAND:: 1.	One policy was issued.
2.	$2,000. "
3.	Florence G. White, wife, and Charles R. White, son.
4.	Twenty-pay life.
5.	(a) Rate $4.88 monthly; (b) Total premium collected $53.68.
6.	Yes.
7.	(a) To Mrs. Florence G. White on her own account: November 25, 1922, $200.00; December 6, 1922, $179.70; July 27, 1922. $179.70.
(b) To Mr. F. W. Harcourt, official guardian, province of Ontario on account of Charles R. White: January 31, 1923, $379.70; August 14, 1923, $179.70.
8 and 9. Answered by No. 7.
10.	No amount was deducted from the insurance payments, but pursuant to Section 10, of the Returned Soldiers' Insurance Act, the amount paid in excess of $500 was deducted from the pension subsequently awarded to the widow and child.
11.	Answered by No. 10.


Mr. BLACK (Yukon):: 1.	What was the rate of pension issued to Mrs. Florence G. White, widow of the late Percy R. White, Captain, 39th Battalion, Canadian Expeditionary Forces, on account of the death of the said Captain White ?
2.	From what date did such pension accrue?
3.	What was the date and amount of each payment made to said Florence G. White on account of said pension and how was the amount of each such payment arrived at ?
4.	What was the date and particulars of the amount of each payment made to Charles R. White, infant son of the said late Captain White, or to the official administrator for said infant?
5.	What deductions, if any, were made from pension payments to the said Florence G. White, giving particulars of all such deductions?

Questions
6.	What deductions, if any, were made from pension payments due to said infant, showing particulars of such deductions?


Hon. Mr. BELAND:: 1.	S66.67 per month.
2.	July 25, 1921.
3.	(a) On 18th March 1924, a payment in the amount of $1,691.41 representing:
(i ) Pension to Mrs. White from July 25, 1921 to February 29,
1924, at $66.67 per month.. .. $2,081 82 (ii)*Pension to Charles White from July 25, 1921 to October 31, 1922, at $15 per month. .	228 39
Total	$2,310 21
Less insurance payments in excess of $500	 618 80

(b) On March 31, 1924, $66.27 being pension for the month of March.
4.	Pension payments were not issued to Charles R. White nor to the official administrator on his behalf.
5.	Answered by No. 3.
6.	Answered by No. 3 and 4.
*As Charles R. White attained the age of 16 years on 31st October 1922, pension is not payable on his account subsequent to that date.



PENSIONS AND COST OF LIVING BONUS

Hon. H. S. BELAND (Minister of Soldiers' Civil Re-establishment and Health):: On
April 2, as will be found by reference to page 944 of Hansard, Hon. Mr. Manion asked the following question:
What is the total amount of money involved in the cost of living bonus added to the ordinary pensions of the soldiers and their dependents.
This question I answered as follows:
(a) To disability pensioners $4,184,375; (b) To dependents as pensioners, $3,679,200; Total, $7,863,575.
I am now advised by the department that there was an error in the computation of these figures and I therefore wish to correct them. The answer should have been:
(a) To disability pensioners $4,009,334; (b) To dependents as pensioners, $2,227,021 ; Total, $6,326,355.
I am sorry to have involuntarily made a statement somewhat inaccurate.


Mr. MANION:: Might I ask the minister as to what classes are not given a bonus as the bonus amounts to fifty per cent and therefore should, if all were affected, amount to over $10,000,000 as the total pensions are about $33,000,000. Those above the rank of captain are not given the bonus I understand. What other classes are missed?
76*


Henri Sévérin Béland: It will occur to my hon. friend that, for instance, the pension for children under the age of 15 and 16 is fixed by statute at $15, $12 and $10.


Robert James Manion: They do not come under
the bonus?


Henri Sévérin Béland: No, they do not come
under it. There is a class of pensioners under the denomination of dependent parents, sisters or brothers whose pension is awarded and assessed at the discretion of the board. The pension is commensurate with the need and also the degree of the dependency. This class does not come under the bonus provision, and there are other cases.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. ARTHURS:: 1.	Has the government through the Department of National Defence given a contract for the supply of rifle sights or bases to McKay & Fraser Limited of New Glasgow, Nova Scotia?
2.	If so, how many rifle sights or bases and at what price?
3.	Were tenders asked before contract was awarded?
4.	Does the department contemplate further orders for rifle sights or bases or does this order cover the present requirements of the department?
5.	Are these rifle sights or bases adapted for use in target practice or for active military service?
6.	What officer of the Department of National Defence recommended the purchase of said rifle sights and bases?



VICTORIA BRIDGE-MONTREAL

[Stage Direction]
Mr. ARCHAMBAULT;
1.	What was the total amount of tolls collected in 1923. on the Victoria bridge between Montreal and St. Lambert ?
2.	What was the total expenditure on said bridge, in 1923. for (a) maintenance, (b) salaries, (c) repairs?
3.	What were the tolls collected on said bridge accruing from (a) railways, (b) electric tramways, (c) motor cars, (d) all other vehicles, (e) pedestrians?
4.	How many motor cars crossed the bridge during said year?
5.	How many motor cars crossed the bridge during the months of June, July, August, September and October, 1923, respectively?


Hon. Mr. STEVENS:: For a copy of all correspondence, telegrams, and other documents exchanged between the Minister of Agriculture of the Dominion, or any officer in his department, and the Minister of Agriculture of British Columbia, or any officer in his department, regarding the regulations respecting the grading and marking of eggs.
Questions as Orders



SINGAPORE NAVAL BASE

Right Hon. Mr. MEIGHEN:: For a copy of all correspondence, telegrams, writings, or other documents, passing between the Department of External Affairs and the British government with respect to the naval base at Singapore.



CARILLON POWER DEVELOPMENT

Mr. DESLAURIERS:: For a copy of all letters, telegrams, correspondence and other documents in the possession of the government or any department of the government, regarding the development of the water-power at Carillon and permission to sell such power to the United States.



CANADIAN NATIONAL RAILWAYS-MARITIME FREIGHT

Mr. MacLAREN:: For a return showing (a) the number of tons of freight handled by the Canadian National Railways in and out of Portland during 1922 and also 1923; (b) the number of tons of freight handled by the same railway company during the same years in and out of St. John, New Brunswick, and in and out of Halifax; (c) the number of tons of freight handled by the Canadian Pacific Railway during the same years in and out of St. John, New Brunswick.



PULP WOOD COMMISSION

Henry Herbert Stevens: For a copy of all evidence or statements made before the Royal Pulpwood Commission by Mr. Piche and other witnesses, members or officers of the government of Quebec.


George Perry Graham: In the absence of the Acting Minister of Finance (Mr. Robb) I would ask my hon. friend to allow (tjie motion to stand until the minister is in his seat.
Motion stands.
CANADIAN NATIONAL RAILWAYS-TIES Mr. CHAPLIN:
For a copy of all letters, papers, reports and other documents relating to the purchase of railway ties by the Canadian National Railways or any of its officials, including correspondence with the firm or firms from which the said ties were purchased, reports on the price or prices of same, and also returns and vouchers showing the cost of all creosoting plants either under construction or completed by the Canadian National Railways, during the year 1923.


George Perry Graham: I should like my hon. friend to let this motion stand and he and I will have a conversation about it. As a matter of fact there are between two hundred and three hundred under tie contracts and it will be easily seen what an amount of correspondence is involved in these transactions. If there is any particular contract, or any particular dozen of contracts, we will be glad to let my hon. friend have the information. I
fMr. Stevens.]
want to point this out though, as coming from the board; they would prefer that their private business-this is private in a way- should not be made public in parliament any more than is necessary. It is not considered good business for a company of that size and dimensions to have all its transactions disclosed publicly, particularly as some of them are running at the present time. If my hon. friend will let the motion stand he and I will have a little chat about the matter and see if we can come to an understanding.


Arthur Meighen: May I inquire if the
minister would consider the information asked for in this motion as in any sense confidential?


George Perry Graham: I have not had an opportunity to discuss the matter with the management. Some of these contracts may be only partly carried out; there may be something in them that is confidential, or not so much that as the fact that objection is taken to spreading information before the public as to entire contracts. I do not think any private company would like that to be done on such a scale.


Mr. CHAPLIN:: I am quite willing to let the matter rest for a few days until I have talked the matter over with the minister. I might remind him, however, that formerly questions of this kind were asked and I do not think we, when on that side of the House, ever refused to give the information as to a year that had gone by. I realize that the business of the railway company should not be disclosed to its competitors. I do not want to ask for information as to current matters, but as to matters that are closed there ought not to be any difficulty. However, I will be glad to talk the matter over with the minister.
Motion stands.



CANADIAN NATIONAL RAILWAYS- SALES OF PROPERTIES

Sir HENRY DRAYTON moved:: For a return showing all properties sold by the Canadian National system or any company incorporated therein or operated thereby during the years 1922 and 1923, and showing the dates of such sales, the names and addresses of purchasers and the consideration paid in each case.


George Perry Graham: The House will remember that on motion of the right hon. leader of the opposition (Mr. Meighen) a

Savings Bank Deposits
return similar to the one requested in this motion was brought down last year. That return I think dated down as recently as June, 1923. It would save a lot of trouble if the hon. member (Sir Henry Drayton) would consider it an answer to this motion provided we completed the record from the date of the last return down to the present.


Arthur Meighen: If all the information
that would come under the general scope of this return is furnished up to that date inclusive, then certainly all that should! be brought down now would be the continuation. Motion agreed to.



CANADIAN NATIONAL RAILWAYS- OFFICIALS

Mr. DOUCET moved:: For a return showing the names of all officials of the Canadian National Railway system, inclusive of superintendents and officials or special employees drawing salaries higher than superintendents, together with the salary of each.


George Perry Graham: An order very
similar to this was passed the other day, and the reply by the Canadian National Railway Board did not include salaries. The railway is run by a board by virtue of the statute, and the response to this return would have to be the response of the Canadian National Railway Board.


Arthur Meighen: In that connection. I say to the minister first, that nothing of that character could possibly be considered as confidential when it refers to officials; and secondly, in the United States this material is published by the commission which has charge of such railway matters, and is a matter of public information. It would seem to be unnecessary to conceal it in Canada; but it would be utterly inexplicable coming from this government after its attitude some years ago.


George Perry Graham: That applies to all railways in the United States.


Arthur Meighen: Yes.


[Stage Direction]
Motion agreed to.
Arthur Meighen: I understand that this
motion, No. 6, is carried. Is that correct?


George Perry Graham: Yes, carried with the explanation.


Arthur Meighen: You cannot carry an
explanation.



SAVINGS BANK DEPOSITS


[Stage Direction]
Mr. L. J. LADNER (Vancouver South) moved the following resolution:
That, in the opinion of this House, a special committee of the House be appointed to inquire into and report to the House on the question of amending the Bank Act in order to provide for the establishment in the chartered banks of Canada of a special savings account or other class of accounts for savings deposits in addition to those now existing, whereby all holders of deposits in such special savings account in any one bank, or branch thereof, shall be protected or guaranteed against loss up to the sum of $3,000 according to a similar principle as that now provided for in sections 62 to 69 inclusive of the Bank Act relating to the protection of bank notes by the establishment of a fund known as the Bank Circulation Redemption Fund, or that such special savings account be established in accordance with some other principle of insurance, the premium of which will be paid by the depositors or the chartered banks of Canada, or both or in such other manner as the committee may consider capable of giving reasonable protection to depositors of money in savings accounts in such sums as the committee may determine.
Robert James Manion: In reading the resolution
to the House, his Honour the Speaker mentioned my name as seconder. In seconding the motion I may say I am doing it pro forma. I have nothing whatever to do with it, but as the Speaker mentioned my name,
I thought I would let it go in that way.


Mr. SPEAKER:: If the mover wishes to
associate himself with some other seconder, he is at liberty to do so. As I found no other name coupled with the motion, I saw the hon. gentleman sitting near by and I mentioned his name as seconder. Of course if there is no objection to it, no harm will be done.


Mr. LADNER:: The mover of this resolution hopes that before his remarks are concluded the pro forma seconder will be the real seconder. Some days ago we had rather an extended discussion in the House on the subject matter of the Home Bank. The speeches on that occasion were largely delivered in a critical tone, and quite properly so. The purpose of this resolution is to bring to the attention of hon. members of this House some suggestion in the nature of a practical scheme in order that future depositors may be protected better than the depositors have been protected in the past. The purposes of the resolution are as follows:
To provide a definite and practical remedy for the immediate protection of the savings deposits of the great masses of our thrifty citizens.
To re-establish the confidence of the people generally in all our banking institutions.

Savings Bank Deposits
To make possible the continuance of our smaller banks in the field of competition with the larger ones, and thus provide better service to the people of Canada.
To stop the flow of the people's savings into government bonds, government savings banks and long term investments, and to encourage the placing of the people's savings in our chartered banks, where they properly belong, and in this way to assist industry, agriculture, commerce and business in the development of our country.
The whole situation and the general interest of the public with respect to banking conditions in Canada have arisen largely from the merger of, certain banks since the parliamentary committee made their report last year, and that interest has been still more increased by the failure of the Home Bank. It is not my intention to deal extensively, if at all, with that subject, but I would ask hon. members of the House to take the position of the ordinary citizen, and, putting it in a concrete form, I will ask hon. members to journey with me to Fernie, British Columbia, and to go out where the coal company is operating at Coal Creek. Let us take the position of the workingman, the small business man, the thrifty person who wishes to deposit his money in a bank and to have protection. At Coal Creek there was a little building which constituted the office of the company. At one end of the counter in the building was the pay office of the coal company and at the other end was the teller of the Home Bank. There was no other bank or means by which these men could deposit their money unless they went several miles. I will take, not a theoretical, but an actual case of a man who had occupied a prominent position and who had saved $7,200, in order that his daughters, the oldest of whom was sixteen years of age, might be taken from this place which was far in the country to some city where he could give them an education and establish them in the world as any father would like to establish his daughters. He decided, no doubt, to conduct his saving in a thrifty manner. What does the average man do? What, perhaps, did this man do? He sees a sign which tells him something about this particular bank. In glaring headlines he finds that this bank is authorized under the Bank Act to carry on business; that no institution can receive deposits unless it is carrying on business-under the Bank Act. He finds that this bank has a capital authorized of $5,000,000, a capital paid up of $1,960,000 and a rest account of $550,000. Being a careful man, he wants to make further investigations.

How can he do so? He does not understand the returns which are given to parliament and very few men do. He picks off the counter where he is giving his deposits to the bank, the eighteenth annual report of the 31st May, 1923, of the Home Bank of Canada. Let us see what convinces him in this report. He finds first a splendid array of directors and officers. Then there are set out the branches, seventy-eight in number, throughout Canada, this indicating a very large and important institution. Further along he observes that dividends have been paid regularly; that the deposits of the people of Canada have been placed in this institution up to the large sum of $22,000,000, and that is a very great assurance in itself. He finds that the total assets are given at $28,000,000. Still further he looks for the auditor's report, and he finds that this is given pursuant to the Bank Act and the regulations of parliament under law. A portion of this report reads:
The foregoing balance sheet has been examined with the books and vouchers at the head office, and with the certified returns from the branches, and is in accordance therewith	The cash has been checked and the securities of the bank verified, at its chief office, both on the 31st of May, 1923, and also at another time during the year. The cash and securities of one of the branches have also been checked, and in each case they have agreed with the entries in the books of the bank with regard thereto.
Then he turns to the report of the directors and he finds it stated that:
The net profit for the year, after providing for bad and doubtful debts, rebate of interest of unmatured bills under discount, payment of municipal taxes, cost of management, etc., amount to $232,539.17.
The president gives this information. The auditor of this company is Mr. Jones, so the president tells the shareholders that:
Mr. Jones' name will be submitted at this meeting for reappointment as auditor for the ensuing year... It is hoped that the changes enacted will accomplish the objects intended.
He finds that the general manager makes this comment on the solvency and strength of this institution:
But have carried out measures of retrenchment that will inspire additional reassurance for the future.
Finally, the irony of the whole situation is embodied in this resolution of two innocent shareholders:
That the thanks of the shareholders be tendered to the general manager, the assistant general manager and the other officers of the bank for the efficient maimer in which they have respectively discharged their duties during the past year.
My purpose in reviewing that report is this: What has parliament done under the law as it stands to-day, to safeguard an ordinary citizen who takes ordinary precautions to protect

Savings Bank Deposits
his savings? There is not the protection under the law to-day, and protection can be given if parliament is disposed to investigate the matter sufficiently and to provide that protection. In this particular case, what was the situation on the 31st May, 1923? The $550,000 of reserve was wiped out; the $2,000,000 of capital has disappeared; the whole thing can be stated in this way, that the report was a sham, a farce and a crime upon the people of Canada. In my opinion, this should not be allowed to be repeated because we cannot have a second Home Bank failure in Canada. If the government stands aside and appoints royal commissions and waits for something to turn up, we are going to have further complications in our banking institutions and we are going to have public confidence shaken still more than it is to-day. We are going to find the savings of the people drifting across into the United States, taken from our banks and put into government bonds and long-term investments, thereby imperilling and restricting the development of the industry and commerce of this country.
Some days ago when the hon. member for East Calgary (Mr. Irvine) moved this resolution, the hon. member for Pontiac (Mr. Cahill) moved an amendment, what one might call a "chloroform" amendment. The intention, according to the Journal, was to thwart and eliminate any investigation or any remedies which might and should be provided. Nevertheless, the amendment was passed.
I wish, at this stage, to repeat one or two observations that I made a few days ago with regard to the centralization of the banking business of Canada. I would ask the government seriously to consider the situation as the facts stare them in the face if they make the most cursory examination of reports which have been given to parliament by the banks themselves. We need not be under any confusion about this. We have the past before us and the present is merely a connecting link between the past and the future. The signs of the times point most decidedly to the elimination of all our smaller banking institutions and the centralization of the banking business in four or five of the largest banks of this country. What are these signs? You need take only the official returns given by the banks each month under the Bank Act and examine those in four or five respects. I have made this examination during the past thirty years. The number of our banks carrying on business under competition in Canada in 1867 was 22; in 1890, 40; in 1900, 36; in 1910, 28; and in 1924, 14. But we must, in fairness to the banking system of this country
-and it is a good banking system as such- admit that banking facilities have been extended by the branches of the banks. In 1890, the banks had 402 branches; in 1900, 663; in 1910, 2,368, and at the end of 1923, they had over 4,400 branches carrying on business and giving service to the people of this country. The capital invested in all the banking business in Canada is as follows:
	 $60,000,000
1900	 67,000,000
1910		 100,000,000
1923'.'		 123,000,000
But while the capital has increased approximately the small extent of 84 per cent from 1900, the volume of business handled by the banks has increased by over 1,100 per cent. In 1900	we	had $1,500,000,000	according to thereturns	and	in	1923	this	had	increased	to
$17,000,000,000. I would call the attention of the House to another significant fact, that while the capital has apparently increased, such a large amount of money has been placed in bank premises and real estate by the banking institutions that the liquid capital in 1923 was only $47,000,000 as against $60,000,000 in 1900 and $74,000,000 in 1910. All these facts are obvious to anyone who will study the situation. Perhaps the most astounding feature of my analysis, which is as accurate as possible, having been checked two or three times, is that out of a total of some $2,000,000,000 of deposits in the banks of Canada not less than 70 per cent are in the hands of the four largest institutions, leaving 30 per cent of deposits to the ten smaller banks that are struggling to exist in the field of competition. That in my opinion is the most amazing, the most important and the most significant feature of all the signs that point towards centralization.
Let us see what the situation has been in the past thirty years. In 1890, 30 per cent of the deposits were in these four largest banks, while 70 per cent were in the other banks. In 1900, 40 per cent were in the four large banks and 60 per cent in the others; in 1910 the proportion stood at 45 per cent in the four and 55 per cent in the others; and in 1923 the percentages were respectively 70 per cent in the four largest banks and 30 per cent in the rest of our banking institutions.


Mr. MARCIL (Bonaventure):: I do not
like interrupting the hon. gentleman, but I think, Mr. Speaker, that the present discussion is out of order. It is a well-known fact that when any subject has been referred for consideration to a committee of the House, no resolution dealing with the same questions
Savings Bank Deposits

involved shall be debated. I find that on March 27, a resolution was adopted in this House by which the whole question of banking and the protection of the interests of depositors generally was referred to a standing committee for consideration. The proposition advanced by my hon. friend (Mr. Ladner) would be quite properly debatable at the present time had that committee, to which this subject was referred on March 27, already submitted its report. I question very much whether the hon. member is in order in discussing this matter to-day in the absence of that report. I may quote May on this point:
Until the report and evidence have been laid upon the Table it is irregular to refer to them in debate, or to put questions in reference to the proceedings of the committee. If a committee, at the conclusion of their inquiry, make a final report to the House, the sittings of the committee are assumed to have been closed; and if further proceedings were desired, it would be necessary to revive the committee.


Mr. McMASTER:: No doubt the hon. member is addressing the House, because we can see his lips moving; but it is impossible for us to hear a word he sa3^s.


Charles Marcil: I am citing May in support of the objection I have raised to the discussion of the motion before the House; I stated that I had grave doubts as to whether the hon. member was in order in proceeding, in view of the fact that on March 27, the House adopted a resolution referring the Bank Act and everything connected therewith, as well as the Home Bank situation and the question generally of protecting the interests of depositors, to a standing committee for consideration and report. That committee is the select standing committee on Banking and Commerce, whose report upon the questions referred to it is not yet before the House, and the hon. member (Mr. Ladner) is now moving for the appointment of a special committee to deal with some of these questions. I am submitting that until the report of the other committee is before the House the present discussion is out of order.


Leon Johnson Ladner: The motion of the hon.
member for East Calgary (Mr. Irvine), to which my hon. friend is referring, was stated in very general terms. That resolution may or may not relate to the specific proposal which I am now asking the House to consider. It may simply investigate a general principle; and although I have not by me the authority on the question, I submit that under the rules, where the House is asked to consider a specific and concrete proposal and refer the same to a special committee, 
such a motion is entirely distinct from any general question which a select committee of the House may be considering.


Mr. BAXTER:: May I suggest, Mr. Speaker, that the distinction has been very well drawn.


Some hon. MEMBERS:: Louder.


John Babington Macaulay Baxter: Oh, wait until I get up
steam. A distinction may very well be drawn between debating a matter that has been referred to a select committee of the House and the appointment of a committee which will withdraw from any other committee, a specific question which does not seem to be clear under the circumstances. If this resolution sought to express an opinion as to what should be done in regard to something that has been referred to a committee it would be encroaching upon the subject matter so referred. But this is a concrete proposal, to place a specific part of the subject in the keeping up a special committee to be appointed for the purpose of considering it, and I submit that it is entirely different from the case cited by my hon. friend,


Hewitt Bostock: Does any other hon.
member desire to speak to the point of order?


Mr. MACLEAN (York):: A motion similar to this, I understand, has already passed the House.


Hewitt Bostock: The hon. member will find that motion in the Votes and Proceedings of Thursday, March 27, 1924.


Charles Marcil: The original motion of the hon. member for East Calgary was amended and the following resolution was finally adopted by the House:
In the opinion of this House, in view of the failure of the Home Bank and of the fact that official prosecutions and inquiries have been instituted, including the royal commission which has been appointed to investigate the facts alleged in the petition represented by the depositors of the Home Bank and the affairs of the bank generally; and considering that the evidence received and to be taken before the several tribunals will be available for consideration, the select standing committee on Banking and Commerce should be instructed to consider the provisions of the Bank Act with a view to recommending such amendments to the act as will better protect the interests of depositors generally and will prevent similar occurrences in the future; and also to consider the report of the royal commission in its bearing upon these matters and with respect to the possibility of saving the Home Bank depositors from loss.
The whole question therefore has been referred to a standing committee of the House and until the report of that committee has been received I submit that the present discussion is out of order.

Savings Bank Deposits


Leon Johnson Ladner: Does the hon. member
say that the whole question has been referred to the committee?


Charles Marcil: Yes, everything connected with the banks and the Home Bank, as well as the protection of depositors generally.


Mr. RYCKMAN:: The resolution, as it
appears on page 730 of Revised Hansard has reference to the Home Bank, and when it refers to the depositors of the bank, and the affairs of the bank generally, the reference,
I submit, is to the depositors of the Home Bank. The concluding sentences of the motion of the hon. member for East Calgary (Mr. Irvine) show that the hon. gentleman had reference to the Home Bank situation. I am not speaking as one entirely in sympathy with the resolution now before the House, but I think it must be apparent that the present motion deals with the larger field of savings accounts generally and is certainly distinguished from the object of the resolution of the hon. member for East Calgary. In a word, no one can read the resolution as it finally passed the House without coming to the conclusion that the depositors concerned are those of the Home Bank, and that where the reference is to depositors generally it is to depositors of the Home Bank by reason of the context, the preceding clause and the succeeding clause both referring to Home Bank depositors and Home Bank affairs.


Hewitt Bostock: Does any other hon.
member desire to address the Chair?
The question before the House is whether or not this is the revival of a previous debate. Is it in order to move a resolution to refer to a special committee the question of protecting the depositors of any bank by the creation of a redemption fund when another debate bearing on this point took place a few days ago? As the senior member for St. John and Albert (Mr. Baxter) stated a moment ago, this is a concrete case. True, on the 27th March the House decided to refer to the committee on Banking and Commerce the question of whether depositors generally should not be protected by an amendment to the Bank Act. This might be said to include the subject matter of the present resolution, but I see a distinction in the fact that in one the reference is vague and general, while in the other there is a specific plan proposed to protect depositors. It aims at creating a new machinery by which the savings of depositors will be guaranteed.
The rule is well known, and will be found in May's Parliamentary Practice at page 267:
It is a rule, in both Houses, which is essential to the due performance of their duties, that no question or bill shall be offered that is substantially the same as one on which their judgment has already been expressed in the current session.
And at page 289 the rule is commented on as follows:
It is a wholesome restraint upon members, to prevent them from reviving a debate already concluded; and there would be little use in preventing the same question or bill from being offered twice in the same session, if, without being offered, its merits might be discussed again and again,
At first sight I might be of the opinion that this resolution is a revival of the earlier debate, but I do not find that substantially, to use the language of May, the same question is involved which was then at issue. A concrete plan, a redemption fund, is now proposed to protect depositors of money in savings accounts in the chartered banks of the country. Under these circumstances I am inclined to permit that the debate be continued, but I would suggest to the hon. member that later on he amend his motion and refer the question with instruction to the committee on Banking and Commerce and not to a special committee.


Leon Johnson Ladner: Mr. Speaker, I think your suggestion is the best method of handling the matter and I am quite willing to adopt it.
The proposal which I am submitting to the House is that savings accounts up to a limit of 83,000-because I do not think it is practical to guarantee deposits in excess of this amount- should be protected under a principle of insurance somewhat similar to that relating to the protection of bank notes. There was a time when the holders of bank notes were ordinary creditors, but the chartered banks, alive to their interests, and out of consideration for the public interest too, because it was in the public interest-


Mr. IRVINE:: If I may interrupt the hon. member-supposing I had $12,000 to deposit, could I not make four deposits in so many banks, and be protected to the extent of $3,000 in each case?


Leon Johnson Ladner: I do not see that there would be any objection to dividing the money into four deposits as suggested. On the contrary, I think it would be an advantage because it would distribute the deposits among several banks, and their services would be extended accordingly.
In 1879 the Bankers' Association came to parliament with the request that legislation be passed to give priority to the holders of bank notes against the estate of a defunct bank.
Savings Bank Deposits

That priority extended not only ahead of all other creditors, but to my know-4 p.m. ledge it is the only instance in which debts due to the Crown take second place. I do not think I can better explain to the House what then took place than by quoting from a little pamphlet, Canadian Banking, written by the late Sir Edmund Walker. It seems to me that in the death of Sir Edmund Walker Canada has lost one of her big men. He was not only a philanthropist, but a patron of art and literature, and he also took a keen interest in education. In a word, he was the type of man that helps to build any country in a real and material way. At page 22 I find the following: Since 1880 note issues have been a prior lien upon the estate of a bank, prior even to a debt due to the Crown. This legislation was prompted by the failure of a small bank in 1879, which did not pay its notes in full. The bankers had urged such legislation in 1869, and if they had succeeded in obtaining it then, we should be able to say to-day that, without further security than this prior lien on all assets, note issues had always been paid in full, no matter how bad the failure of the issuing bank.
Then on the following page this will be found:
And, while it might be confidently asserted that all bank issues secured by being a first lien on the estate of the banks would eventually be paid in full, it was nevertheless true that, because of doubt and delay, the notes of a suspended bank might fall to a discount for the time being. To meet these two defects, the bankers at this time proposed the following new features which were adopted by the government:
1. To avoid discount at the moment of suspension of a bank, either because of delay in the payment of the note issue by the liquidator, or of doubt as to ultimate payment, each bank is obliged to keep in the hands of the government a deposit equal to five per cent on its average circulation, the average being taken from the maximum circulation of each bank in each month of the year. This is called the Bank Circulation Redemption Fund, and should any liquidator fail to redeem the notes of a failed bank, recourse may be had to the entire fund if necessary. As a matter of fact, liquidators are almost invariably able to redeem the note issues as they are presented, but, in order that all solvent banks may accept without loss the notes of an insolvent bank, these notes bear five per cent interest from the date of suspension to the date of the liquidator's announcement that he is ready to redeem.
Sir Edmund Walker refers to the experiences in the United States, and says:
Both of these reforms were suggested by the writer but, like many other features in our act, they were prompted by the experiences of the United States in the period preceding the national banking system.


Mr. SHAW:: Is it not a fact that the
bankers opposed the institution of the very reform the hon. member has mentioned, and that parliament took action	regardless of
the views of the bankers?


Leon Johnson Ladner: On the note issue?


Joseph Tweed Shaw: In connection with the protection of the note issue.


Leon Johnson Ladner: It was Sir Edmund Walker,
one of the leading bankers, who made this proposal, and the bankers fought for it for a number of years before they were able to get it through.


William Findlay Maclean: Now it is there,
does the bank sidestep it and make the redemption of the notes the first charge on depositors' money in the bank?


Leon Johnson Ladner: If the hon. gentleman had followed the previous lines I have just read, he would have heard that the priority is created by statute, by the law of 1880, which gives a prior lien on the estate of a defunct bank ahead of all other creditors whatsoever, including the Crown. I should like to finish the quotation from Sir Edmund Walker's pamphlet:
That our bank notes are abundantly secured, so far as the public is concerned, seems evident from the fact that a note circulation at 31st December, 1922, of $176,201,351 was in effect secured by a prior lien on total assets of $2,618,638,104, to which must be added the double liability of the shareholders on the capital stock of the banks, making a total of $2,743,930,038. That the banks are not likely ever to lose a dollar by the system of guaranteeing each other's notes seems quite clear. Daily redemption and other features in the act make it difficult to create a forced circulation and, although we have had several fraudulent bank failures, there has never been a case where the assets on which we had the first claim did not easily protect us.
Now my proposal is this: li the bank notes which at any given moment during the period of non-business hours are held chiefly by the banks of the country are so amply and exceedingly well protected, surely parliament in the face of the experiences of the past, and especially in the face of recent experiences, has a duty and a responsibility to protect the man on the street who knows nothing about these matters. Some will say that this proposal is not practicable, that you cannot work out a guarantee system. In fact, I have here a little booklet issued by the Bankers' Association called The Bank Act-Its Audit Provisions and the Suggested Guarantee of Deposits, and the whole substance of the contention in this booklet is a general guarantee of deposits.
I have explained how it was worked out in the United States, where a guarantee of all the deposits was undertaken by each bank guaranteeing the deposits of the others. My proposal is entirely different from that. My proposal is that we build up an insurance fund on a system of premiums by which the citizen who wants mainly protection, who puts

Savings Bank Deposits
his money into the bank so that he may find it there when he wants to draw it out a week or a month or a year from now, will pay a portion of the premium, and the banks also, having increased deposits by reason of thi3 arrangement, will pay a portion of the premium. How does this work out? We have the authority of one of the foremost men perhaps in the world on this particular question, of which he has made a study. In the report of the Comptroller of Currency for the United States, in 1921, at page 20, it is explained:
Full Guaranty of Bank Deposits for $25 per Million of Deposits
During the past six years of stress and strain the losses to national bank depositors from failure have been reduced to such unprecedentedly low figures that an annual charge on all deposits of 2i ten-thousandths of 1 per cent of deposits would have been more than sufficient to cover all such losses accruing to the depositors of our national banks for this period. It is believed that it would be preferable at the outset, as heretofore recommended, to begin with a guarantee of deposit balance of $5,000 or less, and the guarantee plan can then be developed in accordance with the lessons of actual experience.
If the excellent record made by the national banks in the past six years in the matter of immunity from failure should be maintained the government could meet all such losses arising from the guarantee of national bank deposits from 1 per cent of the annual profits which it will receive as a franchise tax from the operation of the Federal reserve banks, if we assume that these reserve banks in the future should only make one-half of the net earnings which they have made in the past 12 months.
No better way can be suggested for bringing into life and getting back into circulation the enormous amount of money which is now hidden and stored away and kept out of banks by timid and nervous owners.
That is exactly the situation in Canada. He continues:	[DOT]
The guarantee of all deposits of national banks of $5 ,000 and less would give complete security for their money to more than 19,000,000 depositors whose deposits in the national banks at this time are estimated at about six thousand million dollars. The remaining individual deposits in national banks, about eight billion dollars, stand to the credit of depositors whose balances exceed $5,000 and those larger depositors aggregate in number, according to the latest estimates, considerably less than 5' per cent of the total number of depositors.
In Canada the deposits on demand, which are saving deposits, amounted on September 30, 1923, approximately to $1,100,000,000, or a little over one billion dollars, so if the same rate were applied in Canada, where according to the best authorities we have fewer failures, the rate of insurance would really be less than it is in the United States, and it would still further be less when you consider that this proposal asks for a guarantee of deposits only up to $3,000, and not for the full amount of the deposits, upon which basis the Comptroller of Currency works out his report.
To summarize, my proposal in short is this: To leave the business of banking with all its intricacies, as it has been built up on experience, exactly as it is. Let the banker's skill and judgment and his responsibility go together. Parliament should not unnecessarily meddle in the complicated business of banking. But in addition to the existing accounts, current and savings, my suggestion is that we create this special class of account so that the man who walks off the street into one of these great pillared institutions and sees the figures across the window showing the bank's capital, but knows nothing about its balance or its solvency, will know that his money will be there when he wants to draw it out a week or a month or a year from now. It is not only the man who does not know much about banking that will take advantage of that class of account. Though that class of account will pay only 2.9 per cent on the money deposited, the depositors' money will be protected, and many people who wish to make deposits will deposit their money in this guarantee account. Others may prefer to put their money in the ordinary bank which they think is safe, and where they will draw three per cent. In this way not only will the depositors have protection, but there will be increased confidence in the banks. The confidence of the people in many of our banks has been shaken, and if we are going to have the smaller institutions remain in business we have to do something, and do it in the near future, in order to retain deposits in these smaller banks, and stop them wandering across into the United States or into our larger banking institutions, or into the Ontario savings office and other institutions throughout the country.
It is perhaps unnecessary for me to point out to the House .that under the Bank Act our chartered banks have very great and very important privileges. They have the exclusive "monopoly of the business of banking. They have the privilege of note issue, on which they earn large sums of money without, you might say, paying anything for it. They have the right of rediscount facilities under the Finance Act, whereby if they are short of capital they may take their securities to the government and say: "Here, we have these securities but we are short of money; you lend us the money on these securities," and the government at once issues notes in accordance with the Finance Act.


William Findlay Maclean: Where do these
notes go?


Leon Johnson Ladner: To the bank in exchange
for securities.
Savings Bank Deposits


William Findlay Maclean: (York):	No, to the
Central Gold Reserve in Montreal, where they are burnt and bank notes substituted therefor.


Leon Johnson Ladner: The national notes are in
addition to the notes the banks have issued. That is a different proposition. I suggest that a proposal of this kind should be placed under the Department of Finance.
Now I do not doubt that hon. members who oppose my motion will show that these facilities are provided by the post office savings bank; that if people want protection for their money they do not need to go to the chartered banks at all. I submit that such is not the case and for these reasons. In the conduct of the post office savings bank business you must appear personally at the post office wicket. There are no checking privileges, you cannot write cheques on the bank, you have got to go there and draw out your money. In British Columbia, for example, you have to file your application and wait until the application goes down to Ottawa, where the money has been deposited, and the funds come back. In other words between the time of your asking for your money and the time of receiving it a period of approximately fourteen days elapses. Furthermore, in the case of the post office savings bank you are only allowed to deposit $1,500 a year and the whole business and machinery connected with the institution is very slow. But there is a much more serious objection to that proceeding than any of those I have mentioned. I contend that it is unsound in principle and is not in the best interest of the country that governments, either federal or provincial, should open savings banks at all. If we had sufficient protection in our chartered banks you would not need to have the provincial and Dominion governments establishing banks from one end of Canada to the other, increasing the rate of interest in order to induce people to put their money into those banks, thereby attracting money from the chartered banks and paralyzing industrial and agricultural activities-because that money in the chartered banks is loaned in the interest of the industrial expansion of the country. The whole principle of these government savings banks is unsound; and for my part I should like to see the post office savings banks, the Ontario savings offices and the Manitoba savings banks offices, entirely wiped out, because that would be in the best interests of the very people that these institutions are intended to serve. Let us suppose, for example that we carried this principle even further than it has been carried. Let us suppose that every province has its savings 
banks as well as the Dominion, and that everybody is invited from motives of selfinterest as well as for reasons of loyalty, upon every ground of sentiment and profit, to put his money into these banks, what would be the consequence? It must be clear as it is possible to demonstrate that to draw the savings from the chartered banks and the banking institutions would leave no money to develop the business and industry of the country. Therefore I submit, Mr. Speaker, that this deposit feature should not be encouraged by this government or by parliament.


Mr. WOODSWORTH:: Where do these
deposits go that are put into the provincial savings offices?


William Findlay Maclean: They are growing every day.


Leon Johnson Ladner: They are growing every
day as my hon. friend (Mr. Maclean) says, because of the fright which the people have received. Now, in answer to the question of the hon. member (Mr. Woodsworth), these deposits presumably are to be kept on hand by the provincial government and repaid on demand. To that extent the provincial government is in the banking business. But that government will have no use for the money unless it is able to employ it for some purpose of its own. It naturally uses it in public works and the general conduct of government business with this result: That while the government presumably will repay this money on demand, the actual fact is that it has locked it up in permanent improvements. The government is therefore using for that purpose the savings of the people instead of going on the markets of the world and securing money at the cheapest price.


James Shaver Woodsworth: Another question if the hon. member will permit it. If the government did not use this money for improvements and for the carrying on of its business would it not otherwise have to draw supplies from the regular chartered banks?


Leon Johnson Ladner: No. My hon. friend must distinguish between the two classes of money. One is short term money which the banks loan at sixty, ninety or one hundred and twenty days and which they are free to draw on demand, or rather on fifteen days' notice. By experience the banks are able to estimate for how long a period people needing money will require it and they loan it for a specified time. That is short term money. The whole banking system of Can-

Savings Bank Deposits
ada, however, as may be ascertained by reference to the charter of the Bank of Montreal, was designed to develop the commercial and agricultural business of the country. What the government wants, as I explained before, is investment money. It wants money that it can use to build roads and other improvements, and the taxpayers will have to provide for this on a sinking fund basis extending over a period of years. The government should go, when it needs money, on to the markets of the world and borrow at the very cheapest price it can. Bonds are issued for the purpose and at maturity these bonds are liquidated.


Joseph Tweed Shaw: Is it not a fact that the
Post Office Act requires that the money deposited in the Post Office Savings Bank and in the provincial government savings office should be deposited in a chartered bank?


Leon Johnson Ladner: That is not my understanding. I do not see how the Ontario government is going to pay four per cent on deposits, and then re-deposit that money in a chartered bank and only receive three per cent for it.


Joseph Tweed Shaw: I am referring to the Post
Office Savings Banks and the provincial government savings offices.


Leon Johnson Ladner: Well, the money in the
Post Office Savings. Banks goes to the Receiver General. Presumably it is there on demand, but the fact is that the government does not keep that money there, paying interest on it, receiving nothing for it and waiting for people to ask for it. I am of the opinion, on information received from an authoritative source, that the government uses that money in the course of its business. The point of my contention is that the government takes that money from the banks which should be used for the business and industry of the country. Now that is not a sound principle, nor is it in the interest of the country at large.


William Findlay Maclean: Is it not possible to modernize the government savings banks? My hon. friend referred to the Receiver General's offices which formerly received deposits in Canada. I want to ask him how these offices have disappeared. For some reason these offices have surreptitiously disappeared from practically every province but two-the Maritime provinces and British Columbia. These offices have been closed in Toronto and Quebec. Why?


Leon Johnson Ladner: I am sorry the Receiver
General is not here to answer the question as to the surreptitious closing of these offices.
I am not in possession of the facts that would explain it. I am endeavouring to advocate the principle which I claim to be sound in finance and sound in economics. That is that the government must not take the savings of the people Jrom our chartered banks and sink them in public works when that money is needed in connection with the business of the country, and there is no man who has studied the proposal for a moment but will admit my contention.
I do not know that there is very much more for me to say on this question. I see that I have exhausted my notes but undoubtedly there is a great deal that can be urged for the proposal. My desire is to have parliament consider some constructive proposal that may be the basis upon which a more practicable scheme may be worked out. Parliament especially in view of the experience of the last few months should come to the aid of the citizen who avails himself of the banking privileges of the country and give him the protection to which he is entitled, even to the limited extent that I advocate. I cannot see how any hon. member can deny the justice, the merit, or the reason of such a proposal, and if any arguments exist against the working out of a scheme of this kind I should like to hear them. I have spoken to many people and have discussed the question with leading financiers of Canada and men who understand the subject far better than I do.
Before I sit down I must formally ask, with the leave of the House, that instead of the resolution being referred to a select committee, it be referred to the committee on Banking and Commerce. The Speaker made the suggestion and I had it in my mind. I move to strike out the words "a special" insert the words "the Banking and Commerce", and strike out the words "be appointed" and substitute therefor the words "be directed".
I think the formalities of parliament require the consent of the House to this motion.


Charles Marcil: The hon. member must obtain the unanimous consent of the House to amend his motion. Will this consent be given?


Some hon. MEMBERS:: Carried.


Charles Marcil: Then the motion will be that this resolution, instead of being referred to a special committee will, if adopted, be referred to the Banking and Commerce committee.
Savings Bank Deposits


Mr. H. E. SPENCER (Battle River):: I wish to congratulate the hon. member for Vancouver South (Mr. Ladner) on bringing this all-important subject before the House. I cannot agree with his entire argument, but with part of it I am in complete accord. I intended to quote from a leading article in the Toronto Saturday Night in regard to insuring of deposits. I notice the hon. member who preceded me covered the points to a certain extent, and I will try to omit any repetition of his statements. The article in the Toronto Saturday Night reads:
The main arguments in favour of such a system-
That is the system of insuring deposits-
-according to the United States controller are, that it would bring from hiding places many millions of dollars of hoarded money, a contingency which we now genuinely face; that it would largely prevent runs on the banks, and that such a law would contribute largely to the unification and solidarity of the banking system.
Then it goes on to quote the very small percentage that it would cost to insure such deposits; this figure was given to us by the hon. member who moved the resolution. The article proceeds:
It might be well if the members of the Canadian Bankers' Association discussed seriously the adoption of some such system, for as Mr. Cherry points out in his communication, stable and normal conditions are a prime necessity at this time.
I have been led to understand that banks have been bolstered up by the government for some years, and that hardly a year goes by in which some bank does not request the government to lodge deposits with them to help them through a crisis. I wish to place on record some figures that have been very carefully compiled as to the relation of the Dominion government to chartered banks in regard to deposits, and advances under the Finance Act. These figures relate to 1923 and the statement reads as follows:
A statement of deposits made by the Dominion government in the various chartered banks shows that as deposits were reduced by the withdrawal of deposits by the public from a number of chartered banks in Canada last fall, (particularly the month of October 1923) deposits in these particular banks by the Dominion government were increased.
While this policy was followed in regard to the Dominion, Union, Standard and Sterling Banks, the reverse policy was followed in the case of the Home Bank. To what extent did this policy of the government assist the four banks named, and to what extent did the reverse policy in the case of the Home Bank contribute to the failure of that bank?
In January 1923, taking, the Dominion Bank,
we find they had in current accounts and savings accounts $88,400,000 in that bank.
I will not bother the House with April and July, but I can give the figures if required. 
In October this amount had dropped to $77,-
600,000.	Now let us look at the amount the government of Canada had on deposit in the Dominion Bank in these months. In January it had $1,800,000, and in October it had increased to $6,016,853, and there was due to the Dominion under the Finance Act $2,800,000.
In the case of the Union Bank we find that in the month of January the public had deposits to the extent of $92,900,000. In October that had dropped to $82,200,000. Turning again to the amount the government had on deposit, we find that in January it only had $268,000, while in October it had increased to $1,588,000, and under the Finance Act it had $12,500,000 in addition. In the case of the Standard Bank the same line was followed. In January they had $60,600,000 in public deposits. In October the amount dropped down to $48,100,000. On the other side we find the Dominion government had on deposit only $329,000 in January, but in October they increased the deposit to $8,600,000, while the bank owed under the Finance Act no less than $3,000,000.
Turning to the Home Bank for a moment, in January that bank had of the public's money $18,100,000. In the month of June that had increased to $19,200,000, but as far as the government deposits went, the deposits were decreased instead of increased as in the other cases. In January the government had in the Home Bank $243,000, but when the bank went smash on the 17th August the government had withdrawn these moneys, leaving only $9,000 there. Hon. gentlemen will notice from the aforesaid that when deposits were withdrawn by the public from the Dominion Bank, the Union Bank and the Standard Bank, the Dominion government increased its deposits with them, but in the case of the Home Bank the reverse took place. The public, having confidence in the Home Bank, increased their deposits in January from $18,100,000 to $19,200,000 in June, and when the bank went smash, although the Dominion government had the sum of $243,000 in the Home Bank in January, it had only $9,000 in that bank on the 17th August. The question arises, did the action of the government materially hasten the bank into, liquidation?
In the discussion which took place in this House a few nights ago the ex-Minister of Finance (Sir Henry Drayton) stated that in his opinion this bank should not have been allowed to go to the wall. It looks very much as if they had intentionally saved the other banks. The question arises:	Why were the
depositors of the Home Bank not helped in the same way as the depositors of the other

Savings Bank Deposits
banks and that bank kept alive? It is interesting to see what such a conservative paper as the Toronto Saturday Night has to say in an editorial with regard to the present situation of our banks:
The mere fact that a financial institution, manned by several men of eminence in the community, had been enabled to carry on business for years, sell shares and accept deposits, while literally bankrupt and so regarded by the inner circle of financiers, has robbed the community at large of that sense of security which the Canadian banking system was supposed to symbolize. Let it be remembered that last winter when the Bank Act was up for revision, the public received solemn assurances from eminent men that the Canadian system was the best ever devised for the protection of the public; and a few months later were confronted with the spectacle of the rankest failure that has been known in Ontario since confederation. What wonder if the psychological effect has been general distrust?
There was also this aggravating circumstance: The erroneous impression had been abroad that it was now the policy of the Bankers' Association, as a body, to take care of depositors in case one of its members fell by the wayside. This was the general impression gained from replies to critics when the whole question was before the parliamentary committee on banking at Ottawa last session. When this impression proved false, there arose a deep-rooted feeling among vast masses of people that the whole financial community was engaged in a conspiracy against them.
Now it is clear that the Bankers' Association and the Finance department of Canada must get together and do something to restore the public morale... It would perhaps surprise eminent members of the banking profession to learn how many thousands of people to-day believe that the reason they have resisted government inspection is that they have something sinister to conceal.
I have never been able to understand why no encouragement was given to the public at large, to place their savings in post office savings banks. The only reason I can see why more encouragement was not given is because of the intense propaganda put forward in all parts of this country that the present commercial banks were absolutely safe and could take care of or practically guarantee the deposits of the people. I do not understand why-I think it was in 1897- the interest on savings in the post office savings banks was cut down from four to three per cent, unless it was to prevent competition against commercial banks. I cannot understand why the people have not been encouraged to place more money in post office savings banks, particularly when the government has been borrowing continually for its needs. If we had increased the interest from three to four per cent or even to four and one-half per cent when the government was wanting money so badly; it would have been, not only a good thing for the public, but a great saving in the matter of interest to the government itself. Further, I do not understand why a restriction is placed on people using the post office savings banks, why there
should be a limit to the amount of 81,500 per annum, and why, when anyone gets an amount of $5,000 placed in that department he should be refused any more interest. This looks very much as if all the regulations with regard to post office saving banks had been made to fit in with the particular wishes of the commercial financial institutions.


William Findlay Maclean: Banks.


Henry Elvins Spencer: I do not intend to take up the time of the House in going over the unhappy history of what has taken place during this past year. I might, however, refer to these disasters as an orgy of failures. This came as an utter surprise to the people of Canada,' particularly after the intense efforts that were made to remedy various deficiencies in the Bank Act last year, many of those efforts being unfortunately without effect. I should like to draw the attention of the House to the fact that the condition that we have gone through in the last eight or nine months was prophesied by a Canadian who had taken a very great interest in the financial life of this country during the past twenty years. I wish to point out the work of a Mr. W. L. Baker, once with the Standard Bank of Canada, who in 1921 issued a book entitled Money Monopoly vs. the Community Dollar in which he drew the attention of the Canadian people to the very serious condition of the banking institutions of Canada and the lack of all guarantees to the savings of the people. Some time before the Home Bank failure took place, the following rather extraordinary editorial came out in the Financial Post on February 23, under the title of Banking and Banking.
Canadian Banks are chartered by the Dominion government, and are operated under strict regulations as
regards their trusts of money deposited by the public, and even in the event of failure there would be no loss to the depositors.
I wish the House to note that.
Shareholders might be expected to face a loss, but not those, who in good faith had placed their money in the keeping of the bank. Statutory provision provides against any such an eventuality.
Mr. W. L. Baker at once replied in the public press, in part saying:
There are no strict regulations, no statutory provisions which make loss to depositors impossible in the event of failure of a bank, and yet this is exactly what the Post says obtains in our Canadian system. There is no legislation which compels the bank to be any more careful in investing the savings of the people than restrictive or protective legislation regarding any phase of banking or banking funds.
The statements, coming out during this session, I am sure, will not only enlighten the people of Canada to the position they are

Savings Bank Deposits
in, and the inability of the present financial institutions under the present Bank Act to guarantee the savings of the people, but create a demand for some system whereby the thrifty of this country can know that they can be guaranteed that their savings will be looked after. At a later date, again before these financial calamities came upon Canada, Mr. Baker, in writing to the Busy East magazine, made the following statement;
Canada is approaching a serious crisis in her banking business.
I desire to put that on record 'because no credit has been given those who have pre-. dieted the present situation and tried to guard the people against the tremendous losses which have been incurred during the last twelve months. I again express appreciation of the efforts of the hon. member for Vancouver South (Mr. Ladner), or any other hon. member of this House who may bring forward resolutions with the object of trying to improve the financial institutions of the country. I am entirely in sympathy with his amendment to have this matter go to the committee on Banking and Commerce, and I hope we shall be far more successful than we were a year ago. At any rate, I believe the matter will receive more sympathetic consideration.


William Findlay Maclean: While I do not altogether agree with the motion, I think it is proper that the matter under consideration should go to the Banking committee. I would point out this important consideration, that when a question comes up in parliament in which the depositors of the country are so much interested it is unfortunate that the Prime Minister (Mr. Mackenzie King), the Acting Minister of Finance (Mr. Robb) and, on this side of the House, the ex-Minister of Finance (Sir Henry Drayton) and other leaders should all be absent, so that it devolves upon private members to discuss the most momentous subject before the people to-day.
In regard to the post office savings bank, the hon. member whose motion is now before the House (Mr. Ladner) expresses the opinion that this institution is no good. Why is it no good? Simply because we have not made it so. Why do we not modernize this savings bank so as to provide that cheques shall be marked at the office of deposit and be acceptable in any other institution in the country, going through all the clearing houses? There seems to be an organized effort throughout the country, largely on the
(Mr. Spencer.]
part of the banks themselves, to stifle the post office savings bank. During the last twelve or fifteen years I know that the government of the country was taking savings on deposit from the people all over Canada at the Assistant Receiver General's office in each of the various provincial capitals. I remember that the Deputy Receiver General's office in Toronto received deposits payable on demand from the public, and paid interest; and that practice prevailed throughout the country. I have been trying to ascertain just what has happened in the last fifteen or twenty years, and it seems that some one closed the Deputy Receiver General's office in Toronto against the receiving of deposits, while, for some reason or other, these offices have been kept open in the Maritime provinces and in British Columbia, as I am informed, so that deposits are still made and money withdrawn. Now, I should like to have the Acting Minister of Finance here to-day to inform the House how that change came about.


Mr. BUREAU:: That will be a proper
subject for investigation before the Banking committee.


William Findlay Maclean: Yes, and this
House, too, is a good place in which to investigate it, for we will have the Minister of Finance with us.


Jacques Bureau: The Banking committee
is a body delegated by the House to consider such subjects.


William Findlay Maclean: But I submit that the responsible minister, who I hope is here to take care of the public interests, should be present to answer questions in reference to these matters.


Jacques Bureau: Put your question on the order paper.


William Findlay Maclean: I will bring it up at the proper time when I have the opportunity. What I am pointing out is that while this system of receiving deposits at the various offices of the Receiver General in Canada has been discontinued throughout Canada, it still obtains in the Maritime provinces and in British Columbia. The finest note we have in this country is the national note of Canada in one and two dollar bills. These notes circulate everywhere, and in the western provinces within the last few months national notes of five and ten dollars denominations have been .used in the purchase, I believe, of grain and in other ways as well. We have the right to issue those, or larger, notes, but some one put a stop to it and the banks have sub-

Savings Bank Deposits
stituted their notes for them. If the one and two dollar notes are good, why should not the fives, the tens, the fifties and one hundreds be issued in Canadian national notes instead of having bank notes? The bank notes have to be redeemed; and they are not redeemed, as the late president of the Canadian Bank of Commerce stated, by the banks themselves; they are actually redeemed by the money belonging to depositors in these banks. And when a depositor thinks he is going to get his money which he has placed in the bank he finds that a lot of it has been grabbed to take care of notes issued by the bank. That is something that should not continue. In the United States there is only one currency, the national currency; and the best currency in the world to-day consists in the national notes of the United States. The greenback to-day is the greatest note in the world, and next to that is our Canadian national note. We have these notes in circulation in Canada, principally ones and twos, and I see no reason why fives and tens should not be in use as well. That is a question which I should like to have the Banking committee investigate. I may say that we have issued notes of five thousand and ten thousand dollars, but the banks get them by way of discount with the government. Do they put those notes into circulation? Not at all; they deposit them in the Central Gold Reserve in Montreal. This of course is a sound institution, but it is eminently a bankers' institution; and the result of this is that the national notes disappear. They are all burned; and replaced by bank notes which go all over the country. So far these notes have been protected not by the government but by the money placed by depositors in the banks.
Now, I am aware that I am speaking to a very small House, but my voice will carry very much further than the precincts of this chamber, for there are people all over the country who are closely following this question. Let me say therefore that in my opinion the time has come when, first of all, we must modernise the post office savings bank so that the people may have their cheques marked, which cheques, when so marked, shall be legal tender in clearing house transactions. These cheques ought to go through the clearing house, and that I think, should be done on the day the cheque is taken to the bank. As things are at present it takes five days for the cheque to go from Toronto to Ottawa and return, while the period of this delay is ten days in the case of cheques coming from the western provinces. That is an absurd state of affairs. The present Postmaster 77
General (Mr. Murphy), I am told, has in mind a scheme-in fact, I believe he has it in concrete form on his table-for the modernization of the post office savings bank. But we cannot hear anything in reference to this matter. Perhaps we might ask the Acting Postmaster General (Mr. Stewart, Argenteuil) whether he knows anything about it, but he too is out of the House and apparently there is no one available to answer this important question.
There is something else I want to tell the public. While we have stopped taking deposits at the various offices of the Receiver General in this country, the United States today is taking deposits, of amounts of up to five hundred or a thousand dollars, payable one year after date with interest at 4 per cent payable half-yearly. So that any man in the United States who does not consider the ordinary banks secure can go to the agency of the national reserve bank system, deposit	anything	up to five hundred	or athousand dollars,	and get a	certificate	whichis practically a bankers' receipt. That receipt is good for the amount deposited,	at 4	per cent,	payable	halfyearly,	the whole payable	within a	year.
Why have we not something like that here? They have a national reserve bank system in the United States. Why should we not have it? They have something like it in the Old Country in the Bank of England. But somebody does not allow these progressive measures to become law here. Although the Bank Act was revised last session any progressive amendments were denied. I may be only a weak voice in this country but I intend to raise these questions before the committee on Banking, namely, as to national notes taking the place of bank notes; as to the establishment of a national reserve bant system similar to that in the United States; and as to public deposits being received by the government. I give the Drury government credit for establishing provincial savings banks in Ontario. Already over $20,000,000 has been deposited by the people in these banks. They have no use for the old-fashioned savings bank account which has been enveloped in so much red tape. Even the Receiver General's offices in Toronto and other cities, which were once doing business and accepting deposits, have been tied up. Who is responsible for this action I do not know. I have raised the question in this House, but without obtaining any satisfactory information. When we get before the committee on Banking we will have it looked into. But there is chloroform all over the country, it is even in this House,

Savings Bank Deposits

and neither the present Minister of Finance nor his predecessor is here when the question of our banking system comes up for discussion.


An hon. MEMBER:: The Minister of
Agriculture is in his seat.


William Findlay Maclean: Perhaps he
would be prepared to follow the example set by the province of Ontario. A national reserve bank system must come in this country and this parliament must face the question. There must be no other failures similar to that of the Home Bank; better provision must be made for the repayment of deposits. The public are entitled to protection similar to that proposed in this resolution. Anyway, something has to be done, and parliament and the government must take action to afford relief to the public. There is a national currency in nearly all other countries, but for some reason or other in this progressive Dominion we cannot have even a modernized system of post office savings banks.
And yet I have not any great fault to find with our chartered banks. They are giving great service to the public and they are making money in doing so. But they have great privileges, and some of these privileges must be regulated. Undoubtedly there must be security afforded the public by instituting a proper system of bank auditing.
5 p.m. You cannot take a bank statement to-day as being correct; in fact it is often misleading. They have an audit of banks in the United States; we have not. In the national reserve bank membership every bank is a check on its fellow-members, and in that way there is a constant checking up of all the member-banks. There are just as many bank failures in the United States as in Canada.


Mr. HUGHES:: There are many more in
the United States.


William Findlay Maclean: But we can have a better banking system if parliament says so. Why is not the Prime Minister here today to answer this question in connection with our banking system? I grant that the Acting Minister of Finance (Mr. Robb) is busy to-day with the budget which he is to present to the House to-morrow. But where is the Prime Minister?


Mr. MARTELL:: Here he is.


William Findlay Maclean: "Oh, Willie we
have missed you." He has come in since I started.


Jacques Bureau: Does the absence of ministers dampen my hon. friend's inspiration?


William Findlay Maclean: No, but now I
will address myself to the Prime Minister.


Jacques Bureau: I thought you addressed
yourself to the country.


William Findlay Maclean: I point out to
the Prime Minister that when this question comes up in connection with our banking laws he does not happen to be in his seat, and his Minister of Finance is also absent. Of course, the Prime Minister is only responsible for what occurs during his term of office-and he did not draft the Bank Act. But I should like to know from him why we have not got a national currency; why the Receiver General's offices in Toronto and other cities, which some years ago received deposits from the people and paid them out on demand,-why these offices have been closed in Ontario and Quebec while they have been continued in the Maritime provinces and British Columbia.
After listening to the arguments presented by the two previous speakers, I say it is high time that this House approached the question of banking reform. We had it up last session, but the Bank Act was passed with very few improvements in it. Fortunately the question is coming up again this session, and I hope the government will take the lead in some measure of reform. But that reform must be in the direction I have stated. For instance, we must have a national currency in the place of bank note currency which, when a bank fails now, is redeemed by the deposits of the people. When a depositor goes to withdraw his money he is told, "Your deposit is weakened by our having to cash in for bank notes that the defunct bank issued." That should not be allowed to continue. There should be an absolute reliable national currency as good as gold, just as there is in the States.


Jacques Bureau: Does my hon. friend mean to say that only silver and gold certificates are in circulation in the United States?


William Findlay Maclean: No, national
notes are in circulation all over the country.


Jacques Bureau: Does he mean to say that there is no other currency save the federal currency?


William Findlay Maclean: There is no bank currency there; there was for a time, but it has disappeared, and the only currency in the United States to-day is the national note and the national coinage. They have a national note there; we got it only in part. What is good enough for Uncle Sam is good enough for Jack Canuck. We want the same law in re-

Savings Bank Deposits
gard to the post office savings banks. I hope now I have had the opportunity of presenting these ideas to the Prime Minister that we shall get some assurance from him that this question will go to the Banking committee, and that the Banking committee will take up the question of banking reform, including the substitution of national currency for bank currency, the opening of the Receiver General's office as a place for deposits, and the modernizing of the post office savings bank making it just as convenient for the ordinary depositor as the ordinary savings bank. All the modernization it needs is that the depositor can go to a post office savings bank and get his cheque marked and stamped; and when stamped that will go through the clearing house of all the banks at par.


Right Hon. W. L. MACKENZIE KING (Prime Minister):: With respect to the suggestion of my hon. friend from South York (Mr. Maclean) that this be referred to the committee, the committee, of course, has powers to take whatever attitude it wishes in this matter, and I have no doubt that it will take into account the representations my hon. friend has made.


William Findlay Maclean: Hear, hear.


Mr. W. C. GOOD (Brant):: Mr. Speaker,
with much of what the hon. member for Vancouver South (Mr. Ladner) has said I am in agreement, but I would not like to endorse everything that he has said in connection with his motion. I believe, however, that the subject matter is of very great importance, and that it ought to receive the careful consideration of the Banking and Commerce committee. It is very significant indeed that when the act was under consideration last year in the committee and in the House, Mr. Baker, who has been referred to by the hon. member for Battle River (Mr. Spencer) published a letter in the Ottawa Citizen, which has been already alluded to. I would like to quote one or two paragraphs from that letter in addition to the one quoted by the hon. member for Battle River. His letter contains an enumeration of the lack of safeguards then existing in our banking legislation. Mr. Baker says:
There is no law restricting the amount which may be loaned to directors or to firms or companies controlled by directors.
That, I believe, was somewhat modified last year. Continuing:
There is no maximum amount fixed by legislation which may be loaned to any one customer.
There is no law stipulating that the bank shall hold any security for loans or that any percentage of its loans shall be secured.
77i
There is no distinction made between shareholders' funds, commercial deposits and the savings of the thrifty. The banks enjoy unusual privileges in the handling of deposits as "savings banks."
I may comment upon that, that these difficulties or'defects in the pre-existing legislation are those which the suggestion of the hon. member for Vancouver South is designed to meet. There is no doubt at all that the matter is worthy of the most serious consideration. Continuing from Mr. Baker's letter:
There is no legal requirement regarding the amount of cash reserves a bank shall carry, and possibly no sound reason why there should be, but other countries have such laws, and the fact that we do not, is mentioned merely to show the absurdity of the Post's claim that we have statutes which would provide for such an eventuality as a bank being able to lose for its depositors.
There is no law to prevent any bank from wrecking itself by over-expansion, injudicious banking and permitting the bank's funds to be used in the speculations of a favoured clique, and no limits placed that would make shareholders alone the sufferers.
How we have seen these warnings fulfilled since the 1st of July last! Continuing:
There is no law providing for either government or external inspection. We have shareholders' audit- the sop given to quiet public clamour for government audit, and anyone who studies the act providing for this delusion must recognize what a farce can be made of it.
Mr. Baker goes on to say:
It is high time that the independent press of Canada should give the public real information on a subject of such vital importance and see to it that mutual admiration societies are not left entirely free to spread propaganda for the continuance of a system and policy which may lead to ruin.
I will not read the rest. I quote this to show that men who had an intimate knowledge of the banking situation gave timely warnings last year to have effective safeguards put in our act, but those who attended the committee know how impossible it was even to get adequate discussion of these matters, much less get any necessary amendment put through. The situation, however, is somewhat different this year, and I take it that he will be a brave man who will prevent the calling of witnesses or prevent discussion of these matters this year.
I have here a little pamphlet which I presume has been sent to all the members, written by a certain W. R. Morson, of Toronto. I do not know the gentleman, but I presume he is a man with some banking experience. The pamphlet is entitled A Better Banking System for 'Canada, and here is a very significant statement on page 2:
Savings Bank Deposits

As an instance of the inefficiency of the present system, take the glaring cases of the Merchants Bank and the Home Bank. The circumstances that finally brought the Home Bank into insolvency were known to many people, myself included, five years ago.
I would like the Minister of Finance to note that. Here is a man who states that he knew the situation five years ago, but our Department of Finance that is supposed to keep track of these things apparently did not know it; or if they did they took no steps to protect the depositors. Continuing:
Tt is not conceivable that those irregularities could have continuned so long under an independent audit and an independent scrutineer.
Further on under a section devoted to the guarantee of deposits he says:
With a proper inspection and power to correct abuses, it would be a perfectly safe undertaking to guarantee deposits. The Controller of the Currency at Washington has shown that the percentage of losses compared to deposits amounted to 1-2400th of 1 per cent per annum for six years previous to 1920, during which period the Federal Reserve was in operation.
I will not read the rest because this is probably not the time and place to enter into a detailed discussion of this matter. In conclusion, Mr. Speaker, I simply want to repeat my conviction that this question did not receive sufficient consideration last year; that if we are going to prevent this country from going through very, very serious times in the future, more serious I think than we can now imagine, we have got to grapple with some of the real problems that face us in this connection. I have very great pleasure indeed in supporting the amended resolution to refer this particular proposal to the select standing committee on Banking and Commerce.


Mr. HERBERT MARLER (St. Lawrence-St. George):: I honestly think that the very
question we are discussing to-day is comprised in the resolution which we passed on 27th March last. However, since that point which was brought up by the hon. member for Bonaventure (Mr. Marcil) was ruled out of order by the Speaker I see no reason why we should not discuss this very important subject to-day even though, perhaps, it may be to some extent an academic discussion. I congratulate my' hon. friend (Mr. Ladner) on the manner in which he has presented this resolution. The motion is an important one. It calls for the appointment of a committee to consider measures for the purpose of guaranteeing certain classes of deposits. It involves the important principle, as the mover of the resolution will admit, of the guarantee of deposits. Now I think what we have to consider to-day in discussing this resolution, even though, perhaps, we may be having an

academic discussion, is whether or not the proposal my hon. friend brings up is a feasible one or not. Is it practicable?


Leon Johnson Ladner: When the hon. gentleman
uses the term "guarantee," does he mean a guarantee by the government or by insurance, because the insurance principle is not a guarantee?


Herbert Meredith Marler: If my hon. friend allows
me to proceed with my argument he may be in a position to ask me some questions later on. There is no doubt whatsoever, Mr. Speaker, that the resolution deals directly or indirectly, by way of an assurance fund or otherwise, with the guarantee of deposits up to a certain amount, segregating a certain class of accounts in a particular manner up to the sum of $3,000.


Jacques Bureau: The language of the resolution is "protected or guaranteed."


Herbert Meredith Marler: I thought either the word "protected" or "guaranteed" was used. Now had this matter not been referred already to a committee, as I think it was so referred by the resolution of the 27th March, I do not know that I would be prepared to support the resolution, not because I am opposed to any principle which will assist depositors but because I am more or less opposed to a principle which will involve banking to a very serious extent indeed. The principle of guarantee of deposits, no matter how it may be taken- whether it may be taken by way of a guarantee fund, or whether the guarantee only extends up to a certain amount-cannot stop at the mere question of guarantee. It involves not only the question of guarantee itself, that one item in banking, but it must go down the line into the various banking transactions and more or less involve the principle of banking which we have in this country to-day. I think as my argument develops to some extent hon. members will see that. As a matter of fact the system of guarantee-in any form in which we discuss it or desire to place it before ourselves or a committee-is nothing more or less than a contract or .surety issued. It means that someone else becomes the guarantor of or surety for the principal debtor, the principal debtor in this case being the bank whose deposits are guaranteed.
This sort of guarantee of deposits, I must admit is very attractive looking. It has, particularly at this time, an appearance that merits the most careful consideration. I do not deny that at all, but I do not think we should be led away by a matter of looks or

Savings Bank Deposits
the name which we bestow on any proposal during this discussion. Perhaps we have on other occasions been led away by a system which we think may carry out, or is even certain to carry out, what we expect it to do under the terms of a resolution which has been adopted by the House. But if we look further and if we try and put that system into operation we will discover there are a great many difficulties which occur in connection with the actual law as put into force. Therefore I say I think we should discuss this matter in a dispassionate manner. I think we should not entirely fix our minds on the word "guarantee" alone and think that by reason of that guarantee being effected it is going to accomplish, or will accomplish, the object which is intended. That I may say, Mr. Speaker, is simply a preliminary remark I have to make, and I make it merely because I am trying to discuss this matter purely with an open mind, not with a view to opposition and at the same time to lay stress on what I state, that the question of a guarantee of deposits does not end with the guarantee of deposits alone but goes a good deal further.
Now, in most matters of banking, in most matters of law, in a great many other commercial affairs in life, we attempt in so far as we can to find various precedents to which we can look for experience. We are not altogether bound by precedents. We are not bound to say that a precedent which happened in this country or in that country is what might happen in this country if it were applied here, we are not bound to accept what actually did occur in other places; nevertheless in law, or in commerce, or in other walks of life, the question of what has happened under similar circumstances, is of importance because we are bound to learn from what did occur in other countries something that will be of assistance to us. We have got no precedent in this country as regards the guarantee of deposits direct or indirect. We have no such principle as to the guarantee of deposits direct or indirect by an insurance fund, or otherwise, in any of the great countries of Europe. We have no such precedents so far as I know-and I think I am right in making this statement- in Great Britain on whose system our banking system is based. We have no precedents to which we can look-if I mistake not, and I think I am quite right in making this assertion-in any of the great eastern states. We have, however, precedents in certain of the other states to which we can look and from which we can ascertain whether the system of guarantees turned out successfully
in those states or not. I am not one of those who look to the United States for precedents, I must quite admit. I very much prefer to look for precedents	to Great
Britain.


An hon. MEMBER:: To Turkey?


Herbert Meredith Marler: Yes, Turkey has some
good precedents too.


William Findlay Maclean: National currency.


Herbert Meredith Marler: 
Leon Johnson Ladner: By way of information, has the member found any precedent where deposits were guaranteed on an insurance basis to a limited extent? The United States guarantees to which he refers were not limited and were effective in all the banks.


Herbert Meredith Marler: My hon. friend is not quite right in his statement. The guarantees which took place in the United States were not all limited. Some were limited, some were voluntary and some were involuntary. As regards the insurance principle for the
Savings Bank Deposits

guarantee of deposits which my hon. friend brings up, I will explain to him in a few moments that I have not forgotten what he stated in regard to the insurance principle, but I want to make my point absolutely clear in discussing the guarantee of deposits, and I am perhaps going more or less ahead of the argument I intended to make, but I want to make abundantly clear-and I might as well do it now-that if there is to be any guarantee at all it must be such a guarantee that there need be no explanation behind it, that anybody going to any bank and placing deposits there will know definitely and absolutely that if that bank fails these deposits will be paid. That is the only kind of guarantee that is worth anything. I do not care what is behind that guarantee, I do not care what is in front of it, and I do not care what conditions surround that guarantee. What I say is this -and I repeat it because it is a most important point in connection with this guarantee

that if any guarantee of bank deposits exists at all, it must be such that the poor man, the rich man, or whoever the man may be, and no matter in what bank he places his money, will know that if that bank fails that money is to be paid without any legal argument or without any conditions surrounding it, and that he will receive his money in a short time, without any legal entanglement.


Lewis Herbert Martell: Does the hon. gentleman believe that the government of the country should be the fairy godmother of the people in the way of giving a guarantee for everything that happens? We get too much government ownership and too much government guarantee.


Herbert Meredith Marler: The only way I could
answer my hon. friend would be to say that I agree with him that we have too much government ownership and too much government guarantee but I must disagree with him if he suggests that the government should be the fairy godmother of the people. I think that this time to-morrow he will find that the government is not the fairy godmother of everything in the country, but that remains to be seen. I was proceeding to deal with the question of guarantees, and was saying that the guarantee must be absolute.


Mr. COOTE:: Would the hon. gentleman
state that the bank notes which we have today have that absolute guarantee which he states must be extended to deposits if it is to have any value?
[Mr. Marler.1


Herbert Meredith Marler: Bank notes at present have that guarantee because in the light of our experience I think I am right in saying that they have been paid in full from the time of confederation.


George Gibson Coote: Even if the statement that they have always been paid in full is correct, will the hon. gentleman say that they will always be paid in full under the system which we now have and which is set forth in the Bank Act?


Herbert Meredith Marler: I cannot prophesy that
they will always be paid in full. All I can say is that the system in force at the present time is a fair and reasonable one. I am giving my opinion now on the subject of guarantees and I say that if there is a guarantee at all it must be a good one, not a half or a quarter guarantee. It must be known that the guarantee is actually a guarantee which is worth something. I was going on to speak of certain instances which have happened in the United States and certain precedents which have been established there. There is the case of the state of Oklahoma one of the newer states I admit, but one of the first states to adopt a system of guarantee. It came about somewhat in this way. In 1907, hon. gentlemen will remember, the United States was going through more or less of a period of financial panic. A number of banks had failed. It was the year after the national election. Happily or unhappily in that election Mr. William Jennings Bryan, who was a candidate for president, placed in his platform as a principal plank the promise that there should be a guarantee of all deposits in the banks. I think that was a pretty good card politically. If Bryan had been elected president and the government had guaranteed the deposits in all the banks, it would have been a fine thing. At least, it was an admirable thing for him to say before the election that he was going to try and do it. What he would have done if he had been elected of course, is quite another story .


Mr. GARLAND (Bow River):: Hear, hear.


Herbert Meredith Marler: Do I hear my hon. friend from Bow River say "hear, hear?"


Edward Joseph Garland: It usually
is another story.


Herbert Meredith Marler: But in any event, after
that happened, the Oklahoma territory and what was Indian territory were made into the state of Oklahoma, and a month or two afterwards, the state of Oklahoma

Savings Bank Deposits
brought in a system of joint and several and absolute guarantees. I see that my hon. friend from Vancouver South (Mr. Ladner) is looking at me.


Leon Johnson Ladner: Hear, hear, I am looking
for the point.


Herbert Meredith Marler: The point is a long way
off yet I am only developing the subject. I know that this question of joint and several guarantee is not what my hon. friend (Mr. Ladner) believes it is.


Leon Johnson Ladner: No relationship.


Herbert Meredith Marler: No relationship to it at
all. He believes in a guarantee, or some insurance fund, some more or less mystic form of guarantee. He did not tell us what the guarantee would be, but be believes in a guarantee.


Leon Johnson Ladner: I wish to correct my hon. friend. I did say what it would be. I said it would be built up on the insurance principle, on an actuarial basis founded on experience, exactly in the way insurance companies build up their business. There is no distinction and it is a limited amount. If my hon. friend wishes to argue against the point I have raised, he should direct his very able mind to this point. I am afraid he is departing from it.


Herbert Meredith Marler: I quite understand that
my honourable friend wants to get at a guarantee system more or less along the lines of insurance, on an actuarial basis or something of that description. It sounds supremely simple, so simple that one might almost imagine that you could sit down at one of these desks and work it out. But I want to revert again to the question which I brought up with my hon. friend, namely, that if he has a system of bank guarantee of deposits, it cannot stop at a guarantee, it will go down into all the intricacies of banking. If he will have a little patience, I shall get into the subject much more quickly. I will not go on detailing all these cases which took place in the United States, although they are of interest. I must admit that the precedents which they show under the experiences which they had at the time were of considerable interest. I was, however, speaking about Oklahoma, under which state this law of joint and several guarantees was adopted. When that guarantee law was passed in the state of Oklahoma, it applied to state banks, not to national banks. It looked at first blush like a very good arrangement for the guarantee of deposits. It also looked like a very good card for attracting deposits to banks. Hence, because of the
apparent power of this system to attract deposits, many banks which were national banks, to which the guarantee law did not apply, turned themselves into state banks. A few of the state banks in the larger cities, being afraid of the guarantee law, turned themselves into national banks. Consequently, it was interesting to ascertain what happened owing to this transition from state banks into national banks. What happened was this. You will remember that the law was passed in 1907. Out of one thousand state banks, in July, 1923, 450 were still in existence; 255 had withdrawn from the guarantee banks turning themselves into national banks; 125 had consolidated with others: 125 had failed, and 50 had been liquidated. That is what happened to the banks that turned themselves from national banks into state banks in order to come under the law of the joint and several guarantee. In 1922, the state of Oklahoma repealed this law, because sound bankers went to the legislature and stated that if the law was to be kept in force, they would have to go out of the banking business entirely or turn themselves into national banks. That repeal of the law which took place at that time at th^, request of prominent bankers took place because there was knowledge that a million dollars was outstanding and unpaid by reason of this particular guarantee fund.
I am going too quickly because I want to explain briefly what happened during the time this guarantee was in effect. As regards depositors, the effect of the guarantee was this:	The law went into effect in February,
1908. At first blush the effect of this law was good. A great mass of deposits flowed into the banks of Oklahoma. As a matter of fact, deposits came not only from this new state of Oklahoma which was a few months old, but from neighbouring states, so much so that the neighbouring states had themselves to make laws guaranteeing deposits, but those neighbouring states did not make their laws in such wise that the guarantee was a several and joint guarantee but they made their laws on the fundamental principle of the law of suretyship. What was this test of the law of guarantee in the state of Oklahoma? The test came along very quickly. The law went into effect in February, 1908, and in May, 1908, three months later, came the first test of this law. The test was only a 'little one; it did not amount to very much. A little bit of' a bank called the International Bank of Coalgate closed its doors. It may have closed its doors in order to put to a test this law of guarantee which the state of Oklahoma had passed. As soon as it closed its doors, state

Savings Bank Deposits
officials walked into the bank, counted the cash, said that there was so much cash there, put the cash aside, put their hands into the till of the guarantee fund and took out of that fund sufficient money to pay all the depositors. That sounds like a very simple procedure; it may sound to hon. gentlemen like a very proper procedure; but it was a most improper procedure under a most vicious principle. The law of suretyship of which this is a part-and it does not matter how it is argued by way of a guarantee fund-is that a contract of suretyship means simply that the principal debtor, that is to say the man or person or corporation owing the money, has first to have his assets and liabilities discussed, his assets sold, the money from those assets brought together, and as regards any deficiency there may be, the surety or guarantee fund, as the case may be, is liable for the difference. That is the ordinary law of suretyship.


Leon Johnson Ladner: The hon. gentleman is of a legal mind.


Herbert Meredith Marler: I do not know that I am.


Leon Johnson Ladner: Surely the contract of
surety is expressed in the terms of the document. You make it as you want it. You make it fit the situation. You do not adopt some general principle like that, a general scheme under which there is an unlimited call on banks.


Herbert Meredith Marler: My hon. friend, to some
extent, is quite correct. I am glad that he has brought that question up. No, the general law of suretyship, as I have explained it, is the customary law of suretyship.


Leon Johnson Ladner: That is not this case.


Herbert Meredith Marler: My hon. friend is quite
right in what he states that these benefits or advantages which the suretyship may ask for can be limited or not. You can make the contract of suretyship pretty much as you want it, so that the principal debtor may not or will not have to be discussed. That is quite true; but the point which I make is this, that people who have guarantees of deposits do not want to discuss the question of the law at all. I reiterate and repeat that if a bank has written up on its windows "Deposits in this bank are guaranteed," when that bank fails, the people want to know that their deposits are assured, quite irrespective of any intricacies of the law of suretyship or anything else.


James Shaver Woodsworth: Might I ask without anticipating my hon. friend's development of his subject, whether he has any definite proposal by which they can have an absolute assurance of that kind?


Herbert Meredith Marler: I must admit that, although I have studied this question to quite an extent, I have great difficulties in mind in seeing how a guarantee fund could be brought about so that it would actually guarantee deposits. Perhaps if the hon. member for Centre Winnipeg (Mr. Woodsworth) will allow me to progress a little more, I will try to get through immediately. Some questions may develop which will be of use in discussing this subject before the Banking and Commerce committee, because without' a doubt it will be discussed before that committee under the resolution of the 27th of March, and I must say to my hon. friend that I feel a good deal of hesitation in detaining this House in discussing this matter at all, unless what I say is of some particular interest.
Following on the question of what happened in the Oklahoma situation, I will come very quickly to. the conclusion. In October 1909, or two years after the law was passed, another large bank failed, the Columbia Bank and Trust Company. That bank had procured very large deposits owing to the fact that this guarantee fund existed. The directors and officers, having secured these various funds, went into rash speculations and the bank failed, with the result that in 1914-to make a resume of the situation-there had been paid out of the guarantee fund $4,000,000, while there were outstanding unpaid warrants for $1,000,000 more. In 1921 the banks began to fail rapidly and many of those who were in this particular guarantee fund withdrew from it. In November of that year, on the closing of one of the banks, the guarantee fund was bankrupted. In July 1922, there was $3,000,000 out against the guarantee fund, and the fund became bankrupt.
Now, I do not think that this is entirely the question which my hon. friend wants to have settled, but it is a question of a joint and several guarantee fund which I claim the banks would have to enter into in this country in order to make an absolutely positive guarantee.


Leon Johnson Ladner: Does my hon. friend
think that any member of this House would

Savings Bank Deposits
seriously propose that, with the system of banking we have in this country, the very large amount of deposits in Canada should be entirely guaranteed? I think his arguments are wide of the mark.


Herbert Meredith Marler: That is precisely what
the hon. member wants.


Andrew Ross McMaster: No. If I understand
the proposal of the hon. member for Vancouver South (Mr. Ladner), it is that there should be a certain limited class of guaranteed deposits. I do not understand him to propose that all deposits should be guaranteed.


Herbert Meredith Marler: I am glad my hon.
friend interjects an explanation. Will the hon. member for Brome (Mr. McMaster) tell us how he will guarantee deposits limited, say, to $3,000? Will he not create a preferred class of depositors? WTould a man not divide up his deposits, in any case, so that they would all come within the guarantee? Surely my hon. friend does not imagine for a moment that a man who had $10,000 or $20,000 would be foolish enough not to see to it that the whole amount was guaranteed, and not the first $3,000. In the goodness of my hon. friend's heart, and knowing human nature as he does, I think he would admit that people would separate their accounts, put them in different banks, in trust accounts, and under various names, all for the purpose of coming within the $3,000 guarantee. I think that this is almost a frivolous point to raise.


Leon Johnson Ladner: As the hon. member puts
the matter in that way, I trust he will give me the privilege of making one observation. Apparently he is as far from appreciating the points of my remarks as he is, in his argument, from answering this point I have raised. I do not say that there should be a total guarantee. The deterrent against putting moneys into special accounts would be the fact that they would receive not the regular 3 per cent rate but less than that. In other words, any one who resorted to the means which my hon. friend suggests would have a special reason for doing so, whereas many people would take advantage of the larger interest offered the other way.


Mr. DEPUTY SPEAKER:: Order.


Leon Johnson Ladner: I simply wanted to make myself clear, Mr. Speaker.


George Newcombe Gordon: The hon. member must not make a second address.


Herbert Meredith Marler: I still regret that I cannot agree with the hon. member. He cannot by the widest stretch of the imagination convince me or any banker, or any person in this House who has not an inhuman character, that if a man has $15,000 and wants to have the whole of it guaranteed he will not be able to do so by separating his accounts and segregating his deposits in different banks, even though, instead of securing 3 per cent, on his deposits, he might get only 2f or 2i per cent. So that it is utterly impossible to fix any guarantee up to a certain amount. But in any event, I say that if a guarantee is to exist it should be a full guarantee, so that every one will be treated alike. Let us say, for the sake of the argument, that only those accounts up to $3,000 will be guaranteed. Does my hon. friend realise what percentage of deposits in the banks comprises accounts of $3,000 and under? No doubt he knows what the figure is.


Leon Johnson Ladner: Not exactly.


Herbert Meredith Marler: Let me tell him: 85 per cent of the deposits in the banks consists of accounts of $3,000 and under.


Leon Johnson Ladner: Has the hon. member any authority for that statement? I have authority for the statement that it is only 55 per cent.


Herbert Meredith Marler: On inquiry of very prominent bankers I have received the information which I have given. It may be right or wrong but I leave the matter to the judgment of my hon. friend. I am inclined to think, however, that it is right.


Leon Johnson Ladner: It is not a matter of
guessing.


Herbert Meredith Marler: No, it is not; and I think the figure I have given is more or less right.


Mr. VIEN:: At any rate, it is a safer
guess than the hon. gentleman's.


Herbert Meredith Marler: I do not see how my hon. friend (Mr. Ladner) could possibly work out the proposal in regard to a guarantee to the extent of $3,000, and I have indicated one of the difficulties which would supervene in the matter.	.


Lewis Herbert Martell: Will the hon. member
tell us why a man who had $100,000 in the bank should not be as fully protected as the man with $3,000, simply because they were in different walks of life?


Herbert Meredith Marler: Is the question addressed to me?
Savings Bank Deposits


Lewis Herbert Martell: It is addressed to hon. members generally.


Herbert Meredith Marler: The answer is simple. There is no doubt that the man who had $100,000 would see to it that he was guaranteed, and he would be foolish if he did not. I agree with the implication conveyed in my hon. friend's question; I always agree with the hon. member for Hants. Now, as the hour is drawing to a close I think I shall bring my remarks to a conclusion. What I wanted to bring to the attention of the House, as regards these instances in the United States, was the fact that there was a joint and several guarantee of the banks- both an individual guarantee and a partial guarantee-all of which have proved unsuccessful. I do not say for a moment that in this country they might prove unsuccessful also, but we have the evidence of what occurred in the United States. Without a doubt they have not been successful in any single state of the union where these guarantees have existed. Furthermore, not only have they been most unsuccessful from a banking point of view, but they have been equally unsuccessful from the point of view of depositors and of business men generally. There is not a single shred of evidence to show that any of these guarantees which took place in the United States were of any value whatever.


Edward Joseph Garland: Now that the hon. member has dealt with the states that had guarantees which failed to satisfy the requirements of the guarantee law, will he not tell the House about the guarantee law of the state of Kansas?


Herbert Meredith Marler: Certainly, I will be very
glad to tell the House of the guarantee law of the state of Kansas. It was a voluntary system. Certain banks agreed to enter into the guarantee fund. They created what was called a "guarantee fund account." When a bank failed in Kansas under that guarantee law the depositors were not paid out of the guarantee fund as they were in the Oklahoma case which I cited, but they were given certificates of deposit. It meant that the assets of the bank which had failed had first to be sold. Then the depositors came forward with their certificates of deposit and called upon the guarantee fund for the money that was there to pay those particular deposits. This is what actually happened in 
the state of Kansas. Certificates of deposit had been issued to the extent of over $5,500,000 this is the last report which I could find
and there was in the guarantee fund about $850,000 in cash, and bonds at par of $1,140,000, making a total of $2,000,000, against the payment of guarantee certificates outstanding of $5,500,000.
At six o'clock the House adjourned, without question being put, pursuant to rule.
Thursday, April 10, 1924