1924-03-27

FEDERAL APPEAL BOARD

Hon. H. S. BELAND (Minister of Soldiers' Civil Re-establishment):: I desire to lay on the Table the third return to an order of the House, dated 19th March 1924, showing the number of appeal cases heard and the number of decisions rendered by the appeal board.


Mr. McMASTER (Translation):: Mr. Speaker, I rise to a point of order, on the very same point of order that I rose yesterday: That the Ministers do not speak loud enough.
Some hon. MEMBERS (translation): Hear, hear.


Mr. SPEAKER (translation):: I shall request the hon. minister to speak louder.


Henri Sévérin Béland: I desire to lay on the Table a return to an Order of the House dated 19th March, 1924, prepared at the request of the hon. member for Durham (Mr. Bowen).



UNITED CHURCH OF CANADA

Mr. HERBERT MARLER (St. Lawrence-St. George):: I desire to present the petition of the Montreal Branch of the Presbyterian Women's League, protesting against the bill to incorporate the United Church of Canada.



QUESTIONS

[Stage Direction]
(Questions answered orally are indicated by an asterisk).
CIVIL SERVANTS-AVERAGE SALARY Mr. McQUARRIE:
1.	What was the average monthly salary paid to full time civil servants in Canada for the month ending February 28, 1914?
2.	What was the average monthly salary paid to full time civil servants in Canada for the month ending February 29, 1924?
3.	What is the percentage of increase?
4.	By what percentage are the cost of living figures for the month of February, 1924, as compiled by the
[Mr. Mackenzie King.}
Dominion Department of Labour, greater than those for the month of February, 1914?
['That the Standing Committees on Mines and Minerals, and on Forests, Waterways and Water-powers be consolidated into one standing committee under the name of the Committee on Mines, Forests and Waters; that a new standing committee be formed under the name of the Standing Committee on Industrial and International Relations; and that Rule 10 be amended accordingly.']
Mr. McQUARRIE:: Mr. Speaker, I desire to comply as far as possible with the wishes of the Prime Minister in regard to these inquiries, and I am going to suggest that questions 1 and 2 be confined to the Departments of Customs and Agriculture. These two departments are chosen because in the case of the former the staff is largely clerical and in the case of the latter, technical. So I have redrawn these questions and would submit them to the House, if it is agreeable to the Prime Minister, in amended form. I have added another question, No. 5, as follows:
5.	Is it not true that the salaries fixed in the reclassifications were based on normal living costs?
I can read the question as amended if you so desire.


Hewitt Bostock: I think the hon member would be more in order if he allowed this question to be dropped and put his amended question on the order paper.
Question dropped.
EXPORT OF PULPWOOD Right Hon. Mr. MEIGHEN:
Under what authority of what statute did the government pass Order in Council P.C. 1563 of August 14, 1923, guaranteeing to permit for a period of ten years the shipping out of pulpwood from Canada under existing contracts?


Right Hon. Mr. MACKENZIE KING:: Under authority of chapter 46, Statutes of Canada, 1923, 13-14 George V.
QUEBEC HARBOUR COMMISSION Mr. HANSON: '
1.	When was the Quebec Harbour Commission created ?
2.	Under what statutory authority?
3.	What loans or advances have been made to said commission since its creation, and under what authority?
4.	Is it not a fact that loans or advances over and above those authorized by statute have been made by the government to this commission?
5.	If so, when were such loans or advances made; in what amounts and under what authority?
6.	Has the Governor in Council authority to order advances or loans to this commission over and above those specifically authorized by statute?
7.	If so, where is such authority to be found?

Questions



[Stage Direction]
Mr. SEGUIN'.
1.	What is the name of the excise officer at L'Epi-phanie, Quebec?
2.	What is his salary and the date of appointment?
3.	Whom did he replace?
4.	What salary was paid his predecessor at time of replacement ?
Hon. Mr. BUREAU:: 1.	Ovila Gariepy.
2.	Employed at Montreal, July 23, 1917; transferred to L'Epiphanie, January 1, 1919 at a salary of $900; permanent appointment, April 1, 1921; present salary, $1,440.
3.	J. T. Brick.
4.	$900.


HUDSON BAY RAILWAY
Mr. EVANS:: How much of the vote of $350,000, Hudson Bay Railway, passed at last session, has since been expended on this work?
Hon. Mr. STEWART (Argenteuil), (for the Postmaster General):
1.
Per Annum cost as on 1st January, 1924
St. John postal district	$156,886.60
Quebec postal district	 185,265.98
Ottawa postal district	 413,004.79
Winnipeg postal district	 69,557.83
Saskatoon postal district	 33,518.73
Calgary postal district	 72,654.94
Vancouver postal district	 53,487.21
2.
As on 1st January, 1924 St. John postal district	 276
Quebec postal district	292
Ottawa postal district	 534
Winnipeg postal district	 98
Saskatoon postal district	 54
Calgary postal district	 95
Vancouver postal district	 67
3.
Average cost per mile as on 1st January, 1924, on the basis of 6 trips per week.
St. John postal district	$41.47
Quebec postal district	 37.94
Ottawa postal district	 39.35
Winnipeg postal district	 54.56
Saskatoon postal district	 53.04
Calgary postal district	 51.35
Vancouver postal district	 52.54


Hon Mr. GRAHAM:: $112,96327


VANCOUVER-FISHERIES INSPECTION
Hon. Mr. STEVENS:: 1.	Is it the intention of the government to close the fisheries inspection office in Vancouver ?
2.	If so, what are the reasons?
3.	If closed, what other facilities will be provided for those engaged in the fishery industry to deal with questions constantly coming up and seriously affecting their business?
4.
As on 1st January, 1924
Alberta (i.e. Calgary postal district)	 $72,654.94
Saskatchewan (i.e. Saskatoon and
Moose Jaw postal districts)..	48,240.81
Manitoba (i.e. Winnipeg postal district)	 69,557.83
Total	$190,453.58


Hon. Mr. CARDIN:: Under consideration.


COST OF RURAL MAIL DELIVERY
Mr. MILLAR:: 1.	What has been the cost to Canada during the last year, for which figures are available, of rural mail delivery in each of the following postal districts: St. John, New Brunswick, Quebec, Ottawa, Winnipeg, Saskatoon, Calgary, Vancouver?
2.	What is the number of routes in each?
3.	What was the average cost per mile in each?
4.	What was the total expenditure during the same year on rural mail delivery in the three prairie provinces, and those portions, if any, of adjoining provinces included in the prairie province postal districts?
5.	What was the total expenditure during the same year on rural mail delivery in the postal districts of Ontario, including those portions, if any, of adjoining provinces, included in Ontario postal districts?
5.
As on 1st January, 1924
London postal district	$682,302.54
Toronto postal district	 489,668.30
Ottawa postal district	 413,004.79
North Bay postal district	 17,619.71
Total	$1,602,595.34
IMPERIAL PENSIONERS IN CANADA Mr. ROSS (Kingston):
1.	How many ex-service men are being paid imperial pensions in Canada by the Department of Soldiers Civl Re-establishment ?
2.	What is the total amount of such pensions?
Questions


Henri Sévérin Béland: 
Hon. Mr. BUREAU:: 1922-23	1923-24
			(to date)
Customs	import		
duties.	.$33,410 01	$22,896 07Excise	taxes..	. 37,120 90	44,271 43Excise duties..	. 300 20	287 61Sundry	collection:	5.	
Totals.		$70,831 11	$67,455 11


GRADING OF POTATOES
Mr. MICHAUD:: 1.	At whose request or demand docs the Canadian Horticultural Council propose to change the grading ol potatoes in the province of New Brunswick?
2.	Is the government aware of any complaints made about the present grading of potatoes in said province?
3.	If so, who made said complaints?


Hon. Mr. MOTHERWELL:: 1.	The Canadian Horticultural Council has no jurisdiction over the matter of changing potato grades.
2.	No.
3.	Answered by No. 2.
QUESTIONS PASSED AS ORDERS FOR RETURNS ROYAL COMMISSIONS Right Hon. Mr. MEIGHEN:
1.	What royal commissions have been appointed since the present government came into office?
2.	How much has each commission cost the country (a) in remuneration to the commissioners; and (b) m
expenses or other outlay?
3.	What of these commissions are now in existence?


GOVERNMENT APPOINTMENTS-SALARIES IN EXCESS OF $3,000
Mr. HODGINS:: 1.	How many appointments with a salary of $3,000 or more has the government made since coming into power?
2.	What position does each appointee fill?
3.	What is the salary in each case?
4.	What are the new positions created?


MANITOBA BREWERIES
[Stage Direction]
Grand Total	 18,402 £798,908 10s. 8d. $788,517 34
Note.-In addition to the payment of pensions show above, the Imperial Pension Office is responsible fc the payment of allowances to imperial pensioners un dergomg treament; payment of decoration awards, etc the total of which added to the total pension disburse ments as shown above involved the disbursement durin the year 19?3 of approximately $5,447,897.30.
[Air. A. E. Ross.]
Mr. WARD:: 1.	What, breweries have been operating in Manitoba within the period 1915-1924?
2.	What requirements, if any, as to plant, capacity, etc., and what undertakings, if any, as to continuity of operation, observance of law, etc., are made of those securing brewers' licenses?
licmsT?11"4 f"S arC rCqUired t0 be paid for a brewer's
4.	What additional brewers' licenses, if any, have been issued for Alanitoba since July, 1923?	'

Questions as Orders
5.	Does the government's policy limit in any way the number of brewer's licenses which may be issued in Manitoba ?
6.	What inspection or supervision, if any, is made from year to year of brewers' plant or operation?
7.	What quantities of beer were manufactured by each of the brewers in Manitoba in the years 1915, 1916, 1917, 1918, 1919, 1920, 1921, 1922, 1923, and what taxes were paid by each in respect of these quantities?
8.	What brewers, if any, in Manitoba were convicted of infractions of the law during the calendar years 1922 and 1923?
9.	Has the government yet established any policy as to the issue or continuance of licenses to brewers convicted of infractions of law, and if so, what is its policy ?
10.	How many convictions for having or operating illicit stills occurred in Manitoba in each of the years 1913, 1914, 1915, 1916, 1917, 1918, 1919, 1920, 1921, 1922 and 1923?
11.	Has the government given consideration to the proposal that it should adopt the policy of refusal to issue permits for manufacture of liquor within the bounds of those provinces in which the importation and sale of liquor for beverage purposes is prohibited? If so, what conclusion was reached or policy established ?


Jacques Bureau: I would ask that part of this question stand as an order for return and that the questions which involve the policy of the government be placed upon the order paper as separate questions. Some of the questions ask for information going back as far as 1913, which would take some time to get and would be quite voluminous.


Hewitt Bostock: Stands partly as an ord'er for return. The balance of the questions should be re-drafted.


Jacques Bureau: All I ask is that the
part of the question which touches upon the policy of the government shall stand as a question, and that the rest of it be passed as an order for return.


SELECT STANDING COMMITTEES
William Lyon Mackenzie King: That the Standing Committees on Mines and Minerals, and on Forests, Waterways and Water-powers be consolidated into one standing committee under the name of the Committee on Mines, Forests and Waters; that a new standing committee be formed under the name of the Standing Committee on Industrial and International Relations; and that Rule 10 be amended accordingly.


[Stage Direction]
Motion agreed to.

[Stage Direction]
On the Orders of the Day:
['I will lay it on the Table this evening.']
Right Hon. ARTHUR MEIGHEN (Leader of the Opposition):: I desire to call the attention of yourself, Mr. Speaker, and of the government to question No. 8, which reads as follows:
1.	What royal commissions have been appointed since the present government came into office?
2.	How much has each commission cost the country -(a) in remuneration to the commissioners; and (b) in expenses or other outlay?
3.	What of these commissions are now m existence?
Why that question should stand as an order for return is a mystery to me. The answer must be relatively brief. Although the numbers of commissions are rather extensive, still, to make it an order for return and keep it out of Hansard is merely a ridiculous abuse of the rule.


Hon. A. B. COPP (Secretary of State):: As my right hon. friend knows, these inquiries are in the ordinary course sent out to the different departments with a request that the information be furnished. I find that in one of the answers a statement has been included of the work in which the royal commissions in question have been engaged. I hold the statement in my hand, and my right hon. friend will see that it is quite long, consisting of about eight pages.


Arthur Meighen: I am not responsible for that. I did not ask for that at all.


Arthur Bliss Copp: As the return has been made
in this form it seems to me that under the circumstances the question should be made an order for return. I do not think it is necessary to have all these details spread upon Hansard.


Arthur Meighen: I must protest against
this reasoning, that because the minister's staff insist on answering a lot that is not asked, the government should make the question an order for return. I want only what is asked, and certainly less than half a page would contain the whole information.


Arthur Bliss Copp: It seems to me that if the
different departments feel that the information ought to be furnished in whole instead of in part, the matter should be dealt with as an order for return.


Hewitt Bostock: The House knows as
well as I do of the drastic rule, No. 37-*


Jacques Bureau: Drastic?


Hewitt Bostock: Rule 37, subsection 4,
provides that:
If a question is of such a nature that in the opinion of the minister who is to furnish the reply, such reply should be in the form of a return, and the minister states that he has no objection to laying such return upon the Table of the House, his statement shall, unless otherwise ordered by the House, be deemed an Order of the House to that effect and the same shall be entered in the Votes and Proceedings as such.
I am, of course, governed by that rule.
Postal Service Salaries



[Stage Direction]
On the Orders of the Day:
Hon. H. H. STEVENS (Vancouver Centre):: May I ask the Prime Minister if the government has definitely promised a revision of the postal service salaries during this present session, and if so, is it the intention of the government to make such revision retroactive to April 1923?


William Lyon Mackenzie King: In answer to my hon.
friend, I stated in the House a few days ago that the government intended having an immediate revision made of the salaries of the Civil Service, which will, of course, include the salaries of the clerks to which he has just referred. The government is proceeding in accordance with that undertaking. As to whether or not there will be anything in the nature of retroactive action will depend upon the recommendation made by the Civil Service Commission in that regard.


Henry Herbert Stevens: May I ask one further question? In view of the fact that the Post Office Department has been reorganized, and in view of the further fact that it would take perhaps a long time to complete the total revision, is the government prepared to consider an early revision of the salaries of the Postal Department as distinct from the whole Service?


William Lyon Mackenzie King: I might say
that the government has already had representations along the line my hon. friend has just mentioned, and it was our intention to see that those representations were made known to the Civil Service Commission. We will expect the commission to take them into account in connection with the revision.


Arthur Meighen: I would judge from what the Prime Minister has said that the Civil Service Commission is to make the revision of salaries. Is he aware that the Civil Service Commission is just a little more than through with the last revision?


Mr MACKENZIE KING:: No.


Arthur Meighen: Is it the Civil Service
Commission which is to make the revision?


William Lyon Mackenzie King: I think my right hon. friend was in his seat when I made the statement the other day that the Civil Service Commission would be asked to do so-yes, certainly.


HOME BANK
[Stage Direction]
On the Orders of the Day:
Sir HENRY DRAYTON (West York):: The other day I drew to the Prime Minister's attention the fact that the extended commission in connection with the Home Bank allowed no inquiry into the formation of that bank and the circumstances under which its charter was granted. My right hon. friend said that the government would consider the question. Has the government yet arrived at any conclusion?


William Lyon Mackenzie King: I think the House will agree that the government has been wise in not reaching a final decision on the point to which my hon. friend has referred until after hearing the discussion on the resolution which is to be taken up this afternoon.


Arthur Meighen: Will the government
lay on the Table of the House-which has not yet been done according to my inquiry- the petition from the Home Bank depositors on the basis of which the first order in council was passed calling for a commission investigation?


William Lyon Mackenzie King: I will lay it on the Table this evening.



BUSINESS OF THE HOUSE.

William Lyon Mackenzie King: Mr. Speaker, I move
that we proceed to Notices of Motion to take up the resolution which appears on page 19 of the order paper with reference to the Home Bank, standing in the name of the hon. member for East Calgary (Mr. Irvine).


[Stage Direction]
Motion agreed to.


Mr. WILLIAM IRVINE (East Calgary) moved:: That, in the opinion of this House, a parliamentary commitee should be appointed immediately to investigate the Home Bank failure, with a view to discovering any weaknesses in the Bank Act which may be amended to prevent a similar occurrence; to devise some means of protecting depositors generally; and to make recommendations as to the possibility of saving the Home Bank depositors from loss.
He said: Mr. Speaker, I think it is somewhat unfortunate that through certain misunderstandings, which perhaps are difficult to avoid, and also through certain misrepresentations on the part of the press at times, I feel it incumbent upon me to say at the out-

Home Bank Investigation
set that I have not the slightest intention in the world of seeking to destroy the Canadian banking system. You will recall that our investigation of last year led to certain misunderstandings of that absurd character. Our investigation, of course, was dealing with the fundamentals of the finance system. Today we are dealing rather with the technique of that system; and while I believe that the time is coming when we shall have to have a new finance system, yet I want to see the system which is in vogue working as efficiently as it is possible for it to work while we are using it.
May I also add that in moving this resolution there is not the slightest intention on my part to seek to embarrass the government in any way. I recognize the difficulty of the situation with which the present government is confronted, and I am in hope that a frank discussion of this question by parliament, and some conclusion by. parliament thereon, will be of some assistance to the government in dealing with this question before this session closes.
The resolution proposes a course of action by parliament in respect to a grave situation which cannot possibly be ignored. The House will recall that at the last session of parliament the Bank Act was revised, or, to be more specific, it was reviewed, and the pronouncement was made to the country that we had the best banking system in the world. Impressions were created both by the Bankers' Association and. to some extent by this parliament that the banking system of Canada was on a very sound basis, that there was no chance of depositors suffering any loss whatsoever. That impression was undoubtedly created. The bill passed. And when we passed that bill we virtually said that this parliament can make no further improvements on this act, and upon this ground we granted a charter for ten years, notwithstanding the fact that a number of us pressed for the delaying of the ten-year charter for another year. But scarcely a year has passed when it is proven beyond the shadow of a doubt that there are grave weaknesses either in the Bank Act itself or in its administration. Under the present Bank Act, or in spite of the present Bank Act, wildcat schemes of financing have flourished undisturbed for decades. Gambling by responsible or irresponsible individuals who are regarded under the act as the guardians of the public savings has taken place. The depositors-including widows, orphans and the aged-are unprotected under this act; and recent events have swept the savings of 60,000 of the Canadian people away from them in one night. It is regrettable
that it required a catastrophe of this magnitude to convince the general public and perhaps to convince this parliament-I will not say to convince the Bankers' Association- that there is need for amendments somewhere in the Bank Act. There are, of course, greater and graver and more fundamental weaknesses with regard to our finance system, than the failure of a bank, but I will not deal with them here. I will merely express the hope that parliament will not delay action on these until a greater catastrophe compels attention. I need scarcely remind hon. members of the series of events since the last session of parliament which have not only justified many amendments to the Bank Act which were proposed and rejected, but which have shattered the confidence of the public to a dangerous degree, impoverished thousands, and created a situation which makes action by parliament imperative.
To go no further back than just a few short months we find ample cause for that approach to panic which has characterized the action of the public with regard to banks, and that is also sufficient reason, I trust, to convince this parliament that something must be done. What are these disturbing events? In recent months two banks, which were considered beyond reproach, have been forced through their speculative proclivities to write off millions of dollars of loss. It was only by the merest chance-not by the prudence, not by the integrity, not by the efficiency of the management-but by chance that these losses were not sufficiently great to wreck the institutions concerned. This was closely followed by the absorption of the Bank of Hamilton by another bank, as the only possible escape from bankruptcy of one or both institutions. Then came the crowning calamity of this short period in the failure of the Home Bank with all its attendant losses, followed by a comatose condition of La Banque Nationale which was only revived by the injection of $15,000,000 from the Quebec treasury. And the end is not yet. I regret as much as any hon. member, the unfortunate circumstances that necessitate the reiteration of these unpalatable facts; it brings no special comfort to me to draw the attention of the House to the danger signal which points toward the future. I do so, however, because I honestly believe that it is within the power of parliament to avert the impending danger, and this resolution indicates one way of averting it. Not only have these unfortunate incidents undermined confidence, but there is no reasonable means so far proposed, either by the Bankers' As-
Home Bonk Investigation

sociation or by this government, upon which confidence may be re-established. Our largest banks have, on an average, a surplus of about 12 per cent of assets over liabilities, but that 12 per cent includes frozen assets, profitless loans, depreciation of real estate, and fixture values, as well as bad debts. Our banking institutions are I submit not prepared for a situation which might very easily arise out of the present state of public opinion. If things go on as they are now going then further mergers, or the alternative of bankruptcy, is the inevitable destiny of a number of our financial institutions. In support of that contention I should like to quote one short paragraph from an editorial in the Vancouver Sun under the caption Canadian Banking System has Codlapsed:
When we say this, we mean it. We do not mean that the Canadian banks have collapsed but that their system has. The system of one man management; the system of public audit instead of government inspection; and the system which pays only three per cent on deposits and gives no guarantee; we repeat this system has utterly failed to sustain Canadian business and to maintain Canadian confidence.
When a paper of this repute and influence so boldly states that the system has collapsed, is it not reasonable for us to conclude that there is a very large percentage of the Canadian public that, with the editor of this paper, has lost confidence in the banking system? I do not need to tell this parliament that if the public have lost confidence in the banking system then the banking system has already gone, it cannot be maintained; and so the future can only be safeguarded by restoring public confidence. And public confidence cannot be restored by a pious expression of confidence on the part of the Bankers' Association. Public confidence cannot be restored by words from anybody, public confidence can only be restored by action; and the first act is to reimburse the 60,000 depositors who lost their money in the Home Bank failure. For I can assure this House that those depositors, with their families and friends numbering at least 300,000, a considerable percentage of the population, are not going to be lulled into quietness by assurances that this thing will not occur again. My argument is that the position of some of our banks is rendered more precarious by the well-founded fear inspired by recent events to which I have alluded. There have also occurred runs on banks which are evidences of the lack of public confidence. It is natural for people to think that the large banks are the safer institutions for them to put their savings in. It by no means
[Mr. Irvine.}
follows that because a bank is larger it is safer, but it is nevertheless a general idea. Now that will lead to this-has already led to it; that the public will draw their money from the smaller banks-which may be safer in reality than the larger banks-and will deposit in the latter institutions, but with the result that the smaller banks will be wrecked. So that I prophesy-whether it be dangerous to prophesy or not-that in a very few years we shall have a considerable number of bank failures or a considerable number of mergers. One of these two results is inevitable under our present banking system.
In further support of the argument that the confidence of the public has been shattered, and that the shattering of that confidence endangers the whole banking system of Canada, I would refer to the fact that the deposits in the provincial savings banks have increased enormously since the failure of the Home Bank. I would also refer to the fact that a great many people, some my personal acquaintances, are hoarding their savings,- afraid to put them into any bank whatsoever.
So that it is in the interest of the banks, as well as in the interest of business and industry and in the interest of the depositors generally, that we should take some action in this parliament to restore the confidence of the Canadian public. "But," you say, "they will read the bank reports of last year", and these reports, you will contend, are quite reassuring being as they are filled with optimism. For instance, I have here the last report of the Bank of Montreal. It is an excellent report. I have also the report of the Canadian Bank of Commerce, another excellent report. But I have also before me the last report of the Home Bank of Canada, which is also an excellent report. Now, what assurance have I, or what assurance has any person in Canada, that there is any more ground for confidence in these other reports than there was for confidence in this report of the Home Bank? These reports of the Bank of Montreal and of the Canadian Bank of Commerce may be truer than that of the Home Bank, and they may not; there is no basis for assurance that they are not of the same character. A bank report in one month may prove the bank to be in a healthy state, while, the next month it closes its doors, and the auditors discover that the bank has been in a bankrupt condition for a decade.
Now I anticipate that some hon. members may advance, against this point, that the amendments to the Bank Act of last year will

Home Bank Investigation
provide ground for greatei confidence in these bank reports than could have been inspired by the last report of the Home Bank which was made before the Bank Act revision. The Bankers' Association has anticipated this discussion, and has prepared for the edification of parliament a pamphlet entitled, The Bank Act, and seeing that they have dealt with this point, I must answer their arguments, because I am going to argue that there is a need for further amendment to *the Bank Act. But if this report of the Bankers' Association contains the truth, then any further amendments to the Bank Act would be superfluous. So that I must of necessity answer their argument if only on this one point. I would say the Bankers' Association, endeavours in this pamphlet to which I have referred to establish confidence on a false basis, and I have noticed also that a considerable section of the press, simultaneously with the issuing of this pamphlet, came out with editorials making a plea that the Bank Act, the dear Bank Act, should be given another trial. Now I recall an incident of my early boyhood. I remember seeing a couple of youths trying to get two roosters to fight; they succeeded, and one of the roosters was severely beaten. He ran to his own backyard around the barn, and got up on that old straw stack among the old hens, and he crowed and crowed as if he had been the master of all the henneries of the universe. Well I would characterize this pamphlet as the cock-a-doodle-doo of the Bankers' Association. Listen to it. It says:
But no one can candidly survey the business mortality-
Mark the word:
But no one can candidly survey the business mortality in 1920 and 1922 without reaching the conclusion that the bankers of Canada have marvellously well weathered the storm and conclusively demonstrated the soundness of the system under which they operate and the general prudence and skill of the management.
With studied care they have ignored the tragedy resulting from the mismanagement, the imprudence of bankers and the incompetence of the system over which they crow, and when they come to dealing with the merger of the Bank of Hamilton they say:
As to the merger of the Bank of Hamilton with the Bank of Commerce, it merely follows a long line of precedents that are numerous in Great Britain.
Now, if a doctor who had lost a patient with smallpox had said to the family, "Huh! this is following a long line of precedent very numerous in the Philippine islands," do you suppose it would be refreshing to the rest of the family? I cannot see the reassurance in that. Let me hasten to say that there is
not a single clause in the Bank Act that gives any basis for such assurance as is put forth by the Bankers' Association. I claim that it is immoral, it is criminal, for any institution, or for any parliament, to endeavour to build up an assurance on such an unstable foundation as that. Now the bankers' pamphlet in an endeavour to create the impression that the system is now safe, points to the great rock of safety-the efficient management, the integrity and so forth, of the banks and the bankers. There is no great change in this regard since the Bank Act was passed. The banking system is such as to force prudent men at times to be imprudent, to force well-balanced men to take chances. I say, the branch bank system of Canada, which gathers all the funds from the four corners of the Dominion and centralizes them in the hands of a few individuals who must lend out that money, sometimes actually compels men to be imprudent. But to answer their point: We had prudent bankers before the failure of the Home Bank, and yet their prudence did not save the Home Bank depositors. We had efficient management- before that, and that did not prevent this failure. If we have not been safeguarded by prudent management in the past, how can we feel sure that we shall be safeguarded by prudent management in the future? Prudent management is not enough.
The next safeguard which they lay down as a basis for confidence is a slight amendment to the clauses dealing with auditors, which were made at the last session of parliament. Now, there is no real safety in any scheme of audit. I am sure every hon. member will agree with me in that statement; if not I would be very much amused to hear some hon. gentleman argue the contrary. There is no real safety in any scheme of audit, and no real safety in any type of auditor. There is no scheme of audit provided for by the Bank Act which will warrant the public of Canada feeling safe with regard to any bank in Canada. The government system of audit, which was defeated largely at the behest of the representatives of the Bankers' Association last session, would come nearer being a safeguard than any other type of audit, but we have not got that, because the Bankers' Association said it would not work, or offered some such excuse as that. But by a strange disregard for logic, the Bankers' Association are more nearly correct in the latter part of their pamphlet, when arguing against the advisability of providing a guarantee to depositors. In this regard they say, first, that there can be no
Home Bank Investigation

guarantee of deposits which would be practicable, because deposits are without limit. I am glad to hear the Bankers' Association admit that. They would not admit it last year. We argued that deposits were without limit, and since deposits are without limit, the loans are without limit, and since the loans are without limit, we are virtually under a system of limitless issuance of paper currency. But they tried to saddle that on me and to say that I was a Bolshevik financier, who wanted to start a paper mill down in Ottawa to turn out bank notes. That was the impression they gave, but they virtually have that system now. I just point that out in passing.
Listen to this. On page 15 of the pamphlet they argue-in fact, they state-that deposits are a fourth mortgage. I hope that all depositors will realize fully their proper relationship to the bank. They have got a fourth mortgage which cannot go into effect if the first one goes into effect, because there will not likely be anything left with which to meet the fourth mortgage after the first, second and third mortgages have been paid. But here is the crowning absurdity of the Bankers' Association statement, and one which ought to be sufficient to induce that association to hire a logical thinker to prepare its propaganda. After having argued as to the safety of depositors under the audit-system which was provided at the last session of parliament, and finishing that section of the pamphlet with the striking, selfevident fact which I quote:
A law under which an unsound bank dare not continue to operate is a law which is effective.
-which was intended to apply to the present Bank Act, but which obviously does not; after having said that and argued that the auditing system is sufficient guarantee, the pamphlet releases the ferocious feline from the bankers' bag of tricks by proving the mpracticability of guaranteeing deposits. The writer of the pamphlet had forgotten all about his previous argument, about the safety provided by the new audit system. That had been completely wiped from his mind, and this is what he said:
If we had a system of guaranteeing deposits, there would then not be the same inducement to prudence on the part of the bank manager. He might, and very probably in some instances would enter upon speculation, incur grave risks, gamble on a chance with his funds knowing that if misfortune overtook his bank the depositors would suffer no loss.
May we not ask the Bankers' Association where their auditors would be all this time; the auditors considered a page or so before to be sufficient for the safeguarding of the

depositors? Could the auditor who is so well fitted to protect deposits not stop this banker who had forgotten about his prudence, who had gambled with public funds? In other words, if the audit is so perfect as to constitute a safe basis for depositors, would it not prevent a bank manager at the same time from gambling with the depositors' money? That is where their lack of logic lands them. No, there is no safety for deposits under the present act, and those who argue that are only opening the doors of a fool's paradise. The general public must have some assurance of safety beyond any provision that now exists. If this is not given, members of this House would not be honest with themselves if they endeavoured to restore confidence on the present basis. Therefore, in the best interests of the banks themselves, of business and of depositors, I urge that something must be done.
Some hon. members may argue that that is a pretty vague statement to make-something 1 -and no doubt a number of hon. members will ask: "Yes, but what is the something?" That is what I want the committee for. This resolution calls for the appointment of a parliamentary committee to find out what "something" should be selected. I cannot imagine any member of this House, however, disagreeing with me on the necessity for doing something at this time. We are dealing now, not with theories of banking, theories of finance, but with a menacing situation.
I will briefly state what, in my opinion, might be done under the purview of this resolution. First, though perhaps not most important from the future national viewpoint, the depositors of the Home Bank should be reimbursed. But immediately someone will say: "How can that be done?"
4	p.m. And some may even say that it cannot be done. I reply that this parliament should say unequivocally that it must be done; first, as a basis of re-establishing the necessary confidence for the continuation of banking and business in Canada; second, from the point of view of justice to those who have lost their savings in the Home Bank failure. While it is not for me to outline exactly how that should be done, yet I might intimate that, so far as I am aware, there are only two sources from which funds sufficient to reimburse the Home Bank depositors could possibly come. The first is from the banks themselves; the second is from the public treasury. Frankly, I believe

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that in view of the nature of the charters under which the banks do business, it is the bounden duty of the banks to make good the loss of the Home Bank depositors and to create a fund, as well, which will be a guarantee against a similar occurrence in the future. I will go so far as to say that parliament should make it known to the Bankers' Association that unless this is done, their charters will be cancelled.
With regard to the other source, it will no doubt be argued by some that it is unfair to tax all the people of Canada to make up the losses of a few of the people of Canada. That sounds plausible; but since we, the representatives of the people, are ultimately to blame for having failed to safeguard the public interests to the extent that a large section of that public has sustained a severe loss, the people must be prepared, if necessary, to pay for the blunders of their representatives. In any case, it is going to be more difficult to continue with a banking system which is really now taking away from the many in order that the few may have some, than it would be even to tax the general public to make up the loss of the Home Bank depositors. It is going to be infinitely more difficult to continue a system which permits bankers to gamble with the savings of the people without giving any guarantee to depositors. In this connection, may I quote a pararaph from the editorial column of the Ottawa Citizen which suggests another way of doing this:
When the Canadian Northern Railway defaulted during the war, the government found it feasible to make an issue of financial credit from the national credit reserve. It would seem to be quite as necessary to protect the interests of bank depositors, as of railway financiers. National interests are just as much involved in the situation created by the failure of the Home Bank as they were in the failure of the private railway companies.
Perhaps the government and the Canadian Bankers' Association do intend together to consider the possibility of taking care of the Home Bank depositors.
But another point of even greater importance than that of reimbursing the Home Bank depositors is that the Bank Act must be amended so as to provide, so far as is humanly possible, against a similar occurrence. This could be done perhaps by instituting some method of government inspection. Such a proposal was repudiated last year both by the bankers and this parliament, but I shall quote a short extract from Mr. Clarkson's official report to show that had there been a government inspector or auditor as far back as 1915 or 1916 the true position of the Home Bank would have been disclosed with much less disastrous results to the public. He says:
It is submitted that an audit in 1916 would have revealed the fact that there was an absolute and
definite loss to the bank of $500,000 in respect to the New Orleans deal, which, in itself, would have wiped out the reserve of $300,000 and impaired the capital to the extent of $200,000. It would have disclosed that the so-called Pellatt loans were advances on securities of loan companies which were in effect indirect advances on the security of lands contrary to the provisions of Section 76 of the Bank Act. In addition to this, it would have shown that to a large extent the business done by the bank was not a regular banking business and that there were potential losses in many other accounts where interest had been accumulated on " frozen " and unreliable securities.
Since the bank was in this deplorable state of potential bankruptcy since 1916 and continued well on until 1923 without the public knowing anything of the risks they were taking as depositors, is it not possible, and even probable, that there are other banks in the same condition, their annual reports to the contrary notwithstanding?
What might render the appointment of a government auditor not so necessary would be guarantee of deposits. That is, as a condition of granting them their charters we should demand of the bankers that they set aside a fund as a guarantee to depositors. What is the actual situation to-day? The bankers take deposits without giving any security at all. They conduct their business almost entirely on these deposits. But they also gamble with them. If they win in the gamble they retain the winnings; if they lose, the depositors suffer. Or to put this in another way, the bankers own the banks while these institutions are making profits, but when they become bankrupt the depositors take the place of the bankers and bear the losses. The Bankers' Association in their pamphlet go into this question of a guarantee fund at some length in an effort to show its impracticability. I would refer hon. members to the pamphlet, for I believe they will find it the very best argument to prove not only the practicability but the necessity for providing the very security which the bankers object to.
Now, if the House agrees with me that something should be done, although there may be wide disagreement respecting the definite proposals which I have suggested, may I hope that all hon. members will endorse my statement that not only must something be done, but it must be done now, and no further dilly-dallying permitted? Immediate action is required in the best interests of the banks themselves. I need not recapitulate; I merely refer to what, I submit, I have already proven, that public confidence has been shattered, and that unless something is done to restore that confidence we are going to have more bank failures, we are going to have more bank mergers, we are going to have more difficulty


Mr. MACDONALD (Pictou):: If my hon. friend will permit me, does he understand that the references to the commission in that first order in council were based upon the statements contained in the petition presented to the government on behalf of the depositors? The order in council follows the allegations of the petition.


William Irvine: I quite understand, Mr. Speaker, the basis upon which the commission was drawn. I wish also to add that, as hon. members know, the scope of the commission has been extended to cover the whole period of the bank's existence. I suppose it would be of some value for Canada and for parliament to know whether any finance minister was negligent or whether he was not, or which finance minister was negligent and which was not. That Would be of some political interest at least. But for the life of me I cannot see how that "would affect the Home Bank depositors. I cannot see that the discovery that Sir Thomas White or some other minister of finance had been negligent would put one dollar in the pocket of a depositor.


Edward Mortimer Macdonald: If my hon. friend will again permit me, the petitioners, representing, as they alleged, sixty thousand depositors, stated that if these allegations were true it would become the duty of the government to reimburse the depositors. The government have isued a commission for the purpose of ascertaining whether or not the allegations are true.


William Irvine: I would like to ask whether the minister has assured the depositors that in the case of the finding of negligence on the part of some minister the government has decided to reimburse the Home Bank depositors? If that is the ground upon which the commission was appointed, I think my question is a reasonable one. If they are not prepared to do that, what is the use of going to the expense of appointing a royal commission in the matter? But I find, on the contrary, that the government has very carefully safeguarded itself against making any such allowance. The order in council says:	.
The petition alleges that, for reasons of a public and national character, owing to the state of war
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then existing the then Minister of Finance may not have deemed it advisable to exercise the power-
And so on; then it says:
In view of the foregoing allegations the Committee of the Privy Council, without in any way accepting the view that in the circumstances mentioned it is proper for the government to expend moneys in the relief of the depositors of the said bank, are nevertheless of the opinion that it is expedient that an investigation should be made
And so on. Now, if the government are not prepared to carry out the findings of the royal commission should negligence be found on the part of a government official, why put the public to all this expense? So we will wait, and I hope that the government, if they are not going to adopt my resolution, will definitely make this promise to parliament to-day. Otherwise we shall have to charge them with spending money foolishly.
I am in hopes, however, that they will make that promise.
Frankly I have not much faith in royal commissions in matters of this kind. Royal commissions have in one or two outstanding historic instances been of some service, although I do not recall those instances myself. I will not be so sweeping in my criticism as to say that a royal commission never did any good. But I think perhaps I could put it better by quoting a paragraph from a correspondent in the Ottawa Citizen of yesterday. Now, this correspondent is a very prominent Canadian; perhaps you will recognize the writer from the tone of his letter. He says:
A government fears to face a question-a problem to be conveniently shelved-political friends in need of a job; and so your royal commission is set up, and with the usual benedictions, references-and expense money-goes on its costly way. What happens then is told chiefly in the auditor-general's report. Huge travelling expenses, private secretaries for commissioners, clerks, stenographers, prolonged hearings- and finally a report which nobody reads, much less acts upon, and which serves chiefly as additional printing contracts for others of the hungry faithful.
I have sat in the parliament press gallery for twelve years. During that time I have seen countless royal commissions come, take their toll, and go; yet offhand I cannot recall a single report of a royal commission being translated into law. Not a single one.
I am not suggesting that any of these things apply to the government's intention in appointing a royal commission in this case -not in the slightest degree. But I am arguing that the public has just about as little faith in a royal commission as this man has. That is a fair and accurate representation, to my mind, of what the general public thinks of royal commissions, and it is a fair and accurate statement ias to the results of royal commissions in the past. So that I have very little faith in the royal commission in this case doing very much.
revised edition
Home Bank Investigation

But that is not the only reason why I press this resolution notwithstanding the appointment of a royal commission. We want action, and the royal commission proposes no action. The government did not say they will do this, that or the other thing; all they say is that they will get some information. Now, that information may be a dangerous thing so far as getting right action is concerned, because the royal commission is going to land the whole thing into a political squabble. How, you say? Well, I imagine it will be very good political propaganda. If it can be shown, on one hand, that Sir Thomas White committed any act of negligence whatsoever, I would imagine that the opposition, true to their past and standing on the dignity of their party, would naturally come to the defence of one of their party. Then, on the other hand, according to the public press the name of the hon. Minister of Labour (Mr. Murdock) has been associated with the Home Bank, and it would be in the interests of the party to my extreme right to make as much political capital out of that as possible, and in the interests of the other party to smooth it over, if anything was to be smoothed over; and even the party to my immediate right the Progressives, have some interest, because the hon. member for Marquette (Mr. Crerar) had some dealings with the Home Bank in its earlier stages and this investigation is going to cover the whole field. So the three major parties in this House are interested in a political sense in the findings of that commission. Only the Labour party has no clothes to wash in this matter.


William Lyon Mackenzie King: May I ask the hon. member a question? Concede for a moment that all he has said just now is perfectly accurate; is it his opinion that there would be less of political squabbles if this investigation were made by a parliamentary committee rather than by a judicial body such as the commission?


William Irvine: I am very glad the Prime Minister has asked that question because it gives me an opportunity to point out more clearly just what a committee would do. According to the commission given by the Privy Council, the royal commissiion, to put it briefly, is to find some goat upon which to place the responsibility for the Home Bank failure. Now, a parliamentary committee would not be looking for a goat, it would be looking towards the amending of the Bank Act and towards reimbursing the Home Bank depositors. There is a basis for co-operation. Let the royal commission go on and find the

goat if it wants to find one, and then we will have a political squabble to boot; but do not let us mix up a political squabble with the immediate demands of sixty thousand depositors who have lost their money. There is the point.


Edward Mortimer Macdonald: I assume my hon. friend does not want to be unfair, but every criticism he is making of this royal commission is a criticism of the assertions made by the depositors themselves, who came to the government setting out only these facts which we are investigating, and asked for a commission-the most impartial tribunal you could get in this country, consisting of the chief justice of a province where there are no Home Bank depositors, a learned jurist and a man who is not being paid for his services.


William Irvine: My hon. friend, being an able student of law, understands, I have no doubt, the reason for that presentation of the case by the Home Bank depositors just as well as I do. He understands that they cannot come to this parliament with a direct plea that they be reimbursed; but on the special ground that during war time and jn the public interest the finance minister of that day allowed this thing to go on, they want to make a compassionate plea to this government for reimbursement, and my hon. friend is aware of that. They had no other foothold than the one they took, but parliament has. We have another foothold, and I want to get that now; that is why I want this committee.
Now let us follow the argument just one step further. We want action at this session of parliament. The government cannot give U3 an assurance that the commission will be done with its sittings this session; indeed, it cannot assure us, perhaps, that the commission will be done next year. It has not assured us that there will be any report made when the commission has done its work. It may report this year, it may report next year, it may report never, and every day we are getting farther away from the tragedy and there will be less inclination on the part of parliament to do anything. This is the time, this is the moment for action, and I submit that the way of the royal commission is the way of death to the hopes of Home Bank depositors if we are not very careful. On the other hand, the parliamentary committee would get action immediately on the points that are of immediate interest.
It need not necessarily clash with the investigation which the commission is to make. I have pointed out the difference. Of course we want to know if our public men have

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been culpably negligent, because it would serve us in good stead during an election, it would give us material for speeches; it would be "good stuff,"-so to speak we want that; but more than that, we want reimbursement of the Home Bank depositors, and more than that, we want the Bank Act so amended as to make this thing impossible in the future. Then the parliamentary committee would secure full co-operation.
I do not believe there is a party in this House that would dare, in a parliamentary committee of the character I am asking for in this resolution, to make political capital out of the situation; I do not believe that they would want to. I would like to see the government take parliament into its confidence in this matter of public interest, and give parliament a chance to co-operate. I believe it would work. I believe we would find a way out, and particularly would it be of advantage to the government, situated as it is in a minority, and perhaps forced, if it takes action at all, to take action which would constitute a precedent; it might be to the government's interest and advantage to have the full co-operation of parliament in anything that might be done. And so I would urge the government to accept my resolution. I urge it now in all sincerity. I urge it with the very best of motives. It may be that hon. members will show how badly mistaken I am in doing this, but at least grant that I am sincere, and I am just as assured that the government is sincere; and if they are sincere, as I believe they are, they will listen to my argument and they will see the advisability of appointing a committee in order that the action which is necessary may be taken immediately.
But if the government will not accept this resolution and will not support it, I have three questions that I want to put, and I hope that the Prime Minister or some other member of the government will give specific answers to them.
1.	If the committee is not given, can the government guarantee that the commission will report to this session of parliament in time for parliament to deal with any recommendations which the commission may make?
2.	Will the government promise that the depositors of the Home Bank will be reimbursed from some source, or in the event of the commission discovering negligence on the part of any government official at any time will the government promise on that ground to reimburse the Home Bank depositors?
47i
3. Will the government give a reasonable assurance that the Bank Act will be amended this year, either as I have suggested or in some other way that will meet the requirements more adequately?
Mr. E. C. ST. PERE (Hochelaga) (Translation) : Since, Mr. Speaker, the failure of the Home Bank, the Canadian and foreign press have never ceased commenting upon the unfortunate consequences of this financial disaster. Not only those most intent on being reimbursed but the public at large have shown considerable interest regarding the charges made and explanations given. Indeed, the failure of the Home Bank has been a national calamity. Those who are more directly concerned are mostly humble toilers, and, as sympathy is still deep-rooted in the Canadian soul it naturally extends to those who suffer after having endeavoured to economize. Therefore, all expect that this parliament, this government, and the bankers will find means of coming without delay to the rescue of the unfortunate depositors. I mention this parliament, Sir, for it is not to a party in particular that the losers, at present, direct their appeal. They submit this request to the whole House, for their common misfortune ignores party differences.
This banking disaster did not spare my constituency which, already, had felt the sad effects of a similar catastrophe when the run on the Yille-Marie Bank took place. At the time the Banque Nationale was established, the Hochelaga district was chosen for a branch office to carry on business, and following the merging of this bankfhg institution with the Home Bank, the latter made strenuous efforts and did much canvassing to establish a good connection with thrifty depositors. I lay stress, Sir, on " a connection with thrifty depositors" so as to bring out the kind of transactions carried on by the Home Bank in our midst. " No discount or very little " such were the instructions given to their local manager. A fine institution, an institution which obtained from our workmen all their savings, to have outsiders benefit by them! As "to helping" the local trade, no one gave it a thought, or, to express it better, they refused even to give it a thought.
More than 1,800 residents of the suburbs of Hochelaga and Prefontaine as well as the church wardens of the two Roman Catholic parishes of the same district saw their savings and parish revenues, to the amount of over $300,000, engulfed in this failure. It is, therefore, easy to under-

the humble and refuse to listen to the complaints of those who suffer? The depositors have a right to their money. Let us make an appeal to justice to render unto others what belongs to them. On the other hand, the Canadian people-and it would be such a trifle to them-would be performing such a worthy act of charity by giving what is theirs to the depositors.
The duties of charity and justice differ; but, if we must not confuse them let us beware of separating them, for they are closely linked together.
This re-imbursement would create a dangerous precedent. Not so, if we are to take the word of certain bankers conversant in the matter, who assure us that the new Bank Act will prevent false statements in the reports forwarded to the government, and consequently also prevent failures. Moreover, must not the first cares of a legislator be those of establishing the rightfulness of his orders by showing that they conform to the dictates of conscience? What beautiful and laudable precedents would we establish if they always agreed with them.
The Bank Act will be held in greater respect in the future, are we assured. So much the better! If not, we would be justified to apply to it Shakespeare's word:
...It is a custom
more honoured in the breach
than in the observance.
1 he Home Bank was not the only institution where depositors could place their savings. They lost; so much the worse for them. They should have chosen a sound bank. They are responsible for their actions. May Heaven come to their rescue! It is true, they were free to place their savings in a sound bank; but was it not preached to them in all possible manner and in all the newspapers that the Canadian banking system rested on - a sound basis? Has it ever been explained to church wardens, who are obliged according to law to deposit the parish funds in chartered banks, what institutions are covered by "this" or "these" sound banks? To choose a sound bank? Would the banks have dared to advise the public at large, previous to the Home Bank disaster, such a thing as to deposit in a sound bank? Certainly not, for they would by the fact have hinted to the depositors that there were some tottering ones among them, a statement which would have been in direct contradiction with their conception of soundness throughout the whole banking system, and, including all of its constituent units.
[Mr. St. Pire.1
Are the depositors responsible? No, for the failure of the Home Bank cannot be attributed to them. "But, might it not be said:	they should have known that the
government did not guarantee and does not yet guarantee the deposits in banks. Civil justice makes no allowance for the plea of ignorance. To this we answer that a great number had no knowledge of the law, but had an unshakable faith in the soundness of banks, impressed upon them through the reports published in the official Gazette of Canada, in the name of the shareholders and by the statement of the highest integrity of the board of directors of banks. Now, that they have been wronged because they believed in the honesty of others, a sentiment which disposes us to trust in them, to confide to them even that which they might take advantage of to our detriment; because these people had this frame of mind of trusting in the constituted authority; because they shared this feeling of security, inspired by the great Canadian financiers and, what is more, by certain financial newspapers of high standing, which, commenting on the debates of the sittings of the banking committee of 1923, ridiculed and qualified as idiots and fanatics those among the members who insisted on more guarantees for the depositors, and a more thorough system of inspection, we now say to these people: "Be gone, you were wrong to believe in the truth taught in this maxim of Catena: "Confidence is the esteem of oneself extended to others." I ask, Sir, should not responsibility before the law be altered in favour of the depositors, in view of such a situation?
A number of resolutions appear on the orders of the day. Nothing must be neglected in these days, for hardships prevail among a great number of families, merchants complain of delay in the collection of debts, finally, this failure has created a kind of panic in many provinces. To come to their rescue w'ould give the measure of the efficiency of such legislation in the shape of whatever results are secured, and it would be judged accordingly to the actual benefit derived from it.
The government has decided to hold an inquiry into the affairs of the Home Bank. Let it be thorough, even if we have to go back to the days when Mgr. Charbonel received as a deposit the first savings of the diocesans of Toronto. No one should be spared. Let it have a practical result.
In closing my remarks, Mr. Speaker, allow me to support the request for assistance and relief addressed to the government, parlia-

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ment and the Bankers' Association, by the 400,000 afflicted, anxious of learning what will be our attitude, by the passage of this encyclical letter where it is Written: "that the rights wherever they may be found" must be religiously respected; and the state must guarantee them to all the citizens by preventing or by avenging their violation. However, in the protection of private rights, it must make special provisions for the failings of the poor. The wealthy class in a way make a rampart of their wealth and are less in need of public protection. The poor on the contrary, without means of guarding themselves against injustices, rely especially on the protection of the state. If the law of justice, Sir, does not provide for all men a sufficiency in all their wants, there will always remain, let us not forget, a wide field of auxiliary and sublime usefulness open to compassion and charity.


Mr. R. J. WOODS (Dufferin):: The hon.
member for East Calgary (Mr. Irvine) has so ably and fully covered the ground in his admirable presentation that there does not appear to be very much left to say. However. I wish to corroborate some of his statements, and, if possible, to present some new thoughts in connection with the banking system of Canada. Money as it circulates through the community may be regarded as the life blood of the country. Trade and commerce, all the varied enterprises of the nation, are dependent upon an efficient and stable currency. To my mind it is beyond question that our people generally have regarded the banks as safe places in which to deposit their money, and parliament in any legislation touching banks should do its utmost to protect the interests of the public. If parliament fails to do this, then it is undoubtedly lacking in that proper regard which it ought to have for the welfare of the people. We as members of parliament should thoroughly realize the responsibility that devolves upon us as legislators to do our utmost to protect the public interests in this respect. Canadians have been in the habit of depositing their money in banks, not as an investment but in order that it might be safe and available when they needed it for immediate use. In that respect deposits of savings are very different from deposits of money required for investment in industrial enterprises or for purposes of speculation. The people felt when they were making these deposits that the banks were perfectly safe, and that they could get their money at any time they needed it. The failure of the Home Bank came to them as a terrible shock. We have heard this afternoon what happened, by reason of that failure, to various classes in the community who had placed their savings in the Home Bank quite confident that the money was secure beyond all question. We have heard this afternoon of many people who have deposited money in this bank for safe keeping who have lost it all. We have heard about the labouring classes,
5	p.m. young men and young women, who deposited their money expecting to be able to withdraw it when they required it and who have been unable to do so. Alas, the failure came. Men and women, widows, hardworking men, old men and old women who desired to withdraw their money from this bank found the door closed, and a sign above it "No admittance". Some of these widows,
I believe, had deposited the life insurance of their deceased husbands which was probably their sole means of sustenance, and it was all lost. Old men who had retired had deposited in the bank the little bit of money they had saved, and these men were unable to obtain even a portion of their deposits. I believe many of them turned away in tears. The ones who are suffering most are not the wealthy class, or the ones who could well afford to lose a little money; but the greatest sufferers were those who depended on their deposits in the bank to sustain them in their old age when other things failed, and they were shut out. I think it is very important that the hard-earned money of the working men and women, upon which they are dependent for their old age, should be properly safeguarded, so that they would be assured of it when required for necessary use. In the locality where I live a great many have suffered. In a little town not a great distance from where I live, very close to $400,000 was deposited by people of that class. In another town quite close to my home over $100,000 was deposited by the same class of people.
It is very important that the people should have confidence in our financial and banking institutions of the country. Last year we revised the Bank Act. I am not going to say that there were not important amendments to the Bank Act placed on the statutes at that time, or that some of the amendments were qpt an improvement, but it appears to me they did not go far enough.
The 'hon. member for East Calgary (Mr. Irvine) has referred to bank inspections. One amendment in regard to inspection was urgently pressed before the committee last year, but the Bankers' Association was unfavourable to it. The bankers have their own audit system and appoint their own auditors to do the work. What for? Not primarily to safeguard

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the interests of the public, but to safeguard the interests of the bankers and the shareholders of the bank. So far as the depositors and the general public are concerned, they have not that same safeguard of their interests as the bankers have. If an inspector or auditor who was independent of the banks, not appointed by the banks but by the government, were charged with the investigation of the banking system of this country, I cannot see why it would not to a great extent safeguard the interests of the depositors and those who did business with the banks.
With reference to the amendments which were made to the Bank Act, as I view it, as a member of that committee, I think the amendments went possibly as far, and no further in my opinion, than the Bankers' Association was willing to concede.


Mr. FOURNIER:: Is it not a fact that the Home Bank suspended its operation before the revised Bank Act of last year came into operation? Is my hon. friend prepared to say that if that Bank Act had been revised many years ago as it was revised last year it would have prevented such a failure as that of the Home Bank?


Robert John Woods: I am not prepared to state tnat such a revision would have saved it, but the Home Bank was in a precarious condition many years ago-long before the revision of the Bank Act last session. As I have already said, the masses of the people of this Dominion believed that the Bank Act and the banking system were and had been in years gone by of such a character that there was no possibility of a bank failure and that their deposits would be absolutely safe. After the failure of the Home Bank, individuals came to me and referred to that, stating that they considered that the government was responsible to depositors for money deposited in a chartered bank. That was the general impression amongst the people; having that impression, they deposited their money with confidence, and the banking system has fallen down to such an extent that depositors have lost millions of dollars which they expected they would receive.
I said that the Bank Act was under revision and that in my opinion, a government inspector or auditor of banks would have in some way helped the situation. Some time ago, we listened to an address by the hon. member for Vancouver South (Mr. Ladner) ] who, to my mind, gave us a great deal to think about. He gave us some information regarding a federal reserve bank. But whatever system it is thought wise to adopt by the men who transact the affairs of this Do-[ Mr. Woods.]
minion and we have wise, capable men, men who have no peers, I believe, in any other country it is a fact, so we are informed, that government inspection and a federal reserve bank system have proved to be a good thing in the United States, and something should be done to lift the banking system of this country above what it is to cause the people to have confidence in our banks, and to make it impossible for men and women who deposit their money, not for speculation, but for investment and safekeeping, to lose it. The government should take hold of the situation and work out some scheme that will put the banking system of this Dominion in such a position that an occurrence like the Home Bank failure will be impossible in years to come.
The hon. member for East Calgary has referred to the action the government has taken in appointing a royal commission. Many questions have been asked about it. I hope that commission will make a thorough investigation into the whole system, as it has been appointed to do, and that its report will be laid before parliament before the close of this session.
I am not going to make any definite statement in regard to my attitude on the question of reimbursing the depositors further than to say this: If it is proved satisfactorily that a minister of finance, past or present, in years gone by or whenever the occasion was, was remiss in his duty, or that the government of that day neglected to investigate thoroughly the affairs of the Home Bank; if it is proven to be the case, as a minister of finance of the last government in a statement in the public press excused himself in th.at regard, that the investigation did not take place at the time because the war was on and because there was a danger of upsetting the financial system of the country and breaking the confidence of the people in our banks; if the then minister of finance neglected to undertake the duty of investigating the affairs of the Home Bank in 1915, 1916, or any other year, on the ground that this inaction was in the interest of the people of Canada; and if as a result of that inaction on the part of the minister, hundreds and thousands of the people of this country lost their little all, the little money they had in the banks, and citizens are suffering thereby,-then, in my opinion, the government and the people of the Dominion of Canada are bound to reimburse the men and women who have suffered in the public interest. ,
The ground has already been thoroughly covered, and I believe the attitude of the

Home Bank Investigation
great majority of hon. members is to do justice to the poor, the widows and children. If the poor people, widows and children, have suffered because of the public interest in 1915, and 1916, those same people should be reimbursed for their losses in that regard.


Mr. R. H. HALBERT (North Ontario):: Mr. Speaker, I do not think it is necessary for me to take up much of the time of the House, because the situation has already been extremely well covered by the hon. member for East Calgary (Mr. Irvine). I should, however, like to put on record this petition:
We, the undersigned petitioners, being your constituents and depositors in the Home Bank of Canada, and the friends and neighbours of such depositors, respectfully submit as follows:
Whereas the Home Bank of Canada did at the time of suspension have on deposit by the citizens of North Ontario a sum upwards of three hundred and thirty-six thousand dollars, divided among approximately two thousand people, mostly of small means.	.
And whereas the suspension and subsequent insolvency of the said bank has caused and is causing serious hardship among many people.
And whereas your petitioners are led to believe that the insolvent condition of the bank was known to the government for many years and that it was allowed to continue business because its closing might have occasioned a serious crisis in more difficult times.
We therefore your petitioners do hereby respectfully request you to use your utmost endeavour and your influence as a member of parliament at Ottawa to induce the government of Canada to take whatever action may be necessary to ensure the depositors full payment of their deposits.
And your petitoners will ever pray.
Now, Mr. Speaker, this petition is signed by William Brethour, R. C. Brandon and six hundred and seventeen other persons in my constituency. We have already heard of the many hardships resulting from the failure of the Home Bank. Allow me to stress the baneful consequences to many war and other widows in our small towns, where this bank had most of its branches. These widows sold their property in the country, moved into the small towns and villages because it was cheaper for them to live there, and many of them deposited the proceeds in the local branches of the Home Bank. But, worse still, many of these widows were induced, by the prospect of receiving higher interest, to become stockholders of the bank. The result is that not only have they lost their deposits, but they are also subject to double liability. This means that many a little home purchased in these small towns will have to be sold to meet that double liability.
Undoubtedly, as has been already stated, the impression prevailed generally throughout the country-although unfortunately it proved
not to be well founded-that money deposited in a chartered bank was practically safe as the Dominion government was, in a sense, behind the bank.
Now, to appoint a royal commission to investigate the failure of the Home Bank and apportion the blame upon the responsible parties with a view to their being sent to jail, will not help the widow and her small family. On the contrary, it will rather increase her burden, because the wreckers who are incarcerated will have to be maintained in jail by, among others, their victims. Then again, in some cases those in charge of the bank who speculated with the money of the depositors were guilty of even more than robbery. I would characterize their crime as practically murder in the first degree, because some of the unfortunate depositors who lost their all in the wreck have gone out of their minds. I hope this parliament and this government will see to it that justice is done to the innocent victims of the unscrupulous manipulators who were responsible for the Home Bank failure.
While it may not be possible under the present Bank Act for the government to reimburse the unhappy depositors, I think perhaps something might be done by way of an insurance scheme out of which some of the losses might be met. I think also that we might have a more extended government issue of currency instead of leaving this important privilege in the hands of our banks. I say this by way of protest against our present system of banking and the abuses which it sometimes leads to.


Mr. A. M. CARMICHAEL (Kindersley):: Mr. Speaker, I have been an interested listener to this debate. I have understood fairly well the addresses delivered by three of the four hon. members who have preceded me, but regarding the third hon. gentleman I must say, "Je ne vous comprends pas." His speech seemed to imply that there is a great responsibility resting upon this honourable body, to the extent of reimbursing some sixty thousand citizens who have suffered a severe financial loss. I am in agreement with many of the views enunciated, more especially those of the hon. member for East Calgary (Mr. Irvine). He presented the resolution in an admirable way and his facts were well marshalled. But I cannot say that I would accept all his facts and arguments nor agree with all his conclusions. I realize that the resolution calls for debate on a matter that is of great importance to the country. I agree that the financial business of the Dominion is something that interests all of us, because
Home Bank Investigation

not only is the confidence of the public in our banking system at stake, but also the very stability of the country itself. We are not so much concerned about the stability of our banks alone, but our very national existence is at stake in regard to financial matters. That is why every hon. member should be interested, and in fact every one throughout the country whose business brings him in touch with the banks-all are vitally interested in our banking system, for federal, provincial, municipal and private business is carried on through the facilities afforded by our banks.
The chartered banks of Canada control possibly $2,000,000,000 of the deposits of our people. We can scarcely realize the magnitude of this sum. To-day fifteen banks control these moneys. They have assets of something over $2,600,000,000, and their liabilities reach up almost to their assets, but not quite -I am relying on the statement issued by the Finance department on January 31, 1924. Intermingled with that banking business we had the Home Bank of Canada, operating seventy-eight branches throughout Canada from Quebec to British Columbia. The bank had been in existence for some eighteen years and had a president and a board of directors-who, by the way, did not direct very well. Its last annual report was issued on the 31st May, 1923. It may interest the House to hear one or two short extracts from this report, showing how the directors viewed their business. On page 12 we read:
In view of the somewhat depressed condition of industry in general during the past year, the affairs of the bank, as will be seen by the statement, may be considered very satisfactory.
Further on appears the following:
The net profits for the year, after providng for bad and doubtful debts, rebate of interest on unmatured bills under discount, payment of municipal taxes, cost of management, etc., amount to $232,539.17.
Then at the back of the report we have a motion, duly moved and seconded, to this effect:
That the thanks of the shareholders are due, and are hereby tendered, to the president, vice-president and directors for their careful attention to the affairs of the bank.
That was the summing up of the annual report as presented to the shareholders by the directors and general manager. Now, this bank had a capitalization of $2,000,000, with a rest or reserve account of $550,000, and it controlled interest-bearing deposits of the people of Canada to the amount of something over $17,000,000. People had their money in that bank, no doubt thinking that it was safe, but shortly after this glowing report appeared they came to the realization

that their money was mostly all gone. In fact, I think all they are going to recover is about 35 cents on the dollar, or a total of a little over $6,000,000, making a net loss to the depositors of something over $11,000,000. Now that has taken place in, and affected, six of the provinces, and it is only reasonable, natural and logical that this parliament should take cognizance of what has happened and that a debate of this kind should take place in reference to the matter.
I would judge from the remarks I have heard from previous speakers that they are influenced to some extent by the fact that there were branches of the Home Bank in their respective constituencies. I do not know whether that is the case or not, but so far as I am concerned there was no branch of that bank in my constituency. I am here as the representative of some 45,000 citizens and taxpayers of Canada. I do not like the small parochial or even the provincial view; I prefer looking at matters from the Dominion viewpoint; I prefer that hon. members should approach all matters from the point of view of the good of Canada rather than that of narrow provincial or even constituency issues. It is true, nevertheless, that when we are putting forth our constituency viewpoint we are to some extent putting forth a Dominion viewpoint as well. I have been led to ask myself one question. What would the 45,000 citizens of Canada, whom I have the honour to represent wish me to do in this matter? Would they wish me to concur in the remarks of previous speakers to the effect that this parliament is financially liable to the extent of $11,000,000 in regard to the failure of the Home Bank, or would they not? Well now, I have a few suggestions to make.
While our Bank Act may not be all that we might wish it to be, the fact that one bank has become bankrupt does not justify our saying that the Bank Act is a useless scrap of paper or that it has utterly and completely fallen down. We cannot from the fact that one bank has failed conclude that our banking system is of no use, nor should we deem it a justification for putting the crowbar under our whole banking system and overturning it. We cannot prevent the people from depositing their money where they please. Those who put their money in the Home Bank did so in the belief that they were putting it in a safe place. I doubt whether we would be justified in reimbursing the lasers in the case of the Home Bank. I suppose it would be more popular to take the other view; one's remarks would perhaps meet with more general, favour if he argued that we should reimburse the depositors, because in addition to the 60,-

Home Bank Investigation
000 people who lost, there are sympathizers of these people in every province who feel that the poor children and the widows who lost all they had should be reimbursed. Nevertheless I fail to see the logic of the argument that this parliament is in duty bound to make good those losses. I might remind you that other losses have been suffered by people in this country. For instance, a great many people went into our western country, largely at the instigation of the Dominion government and took up homesteads; they branched out into the farming business and lost all they had. Nobody would suggest that the Dominion government should recoup the losers in that case. Moreover, out in the western country we have had in the past a vicious system of subdividing properties adjacent to small towns. I think I am safe in saying that hundreds and thousands of people have lost thousands of dollars there through (buying Up subdivision property. There may not have been in those cases the guarantee afforded by legislative machinery but legislative machinery permitted that kind of business to go on, and many people, some of them poor people too, lost large sums of money.
There is also a question in my mind as to how docile the representatives of the Maritime provinces would be if it were proposed to reimburse even 60,000 losers out of the taxes of the whole Canadian people. There were no branches of the Home Bank in Prince Edward Island, Nova Scotia and New Brunswick; would the people of these provinces view very favourably a proposal to pay out $11,000,000 to compensate for the loses incurred in this catastrophe? I doubt very much if they would. I also doubt very much if other portions of the country would be favourable to the paying out of Dominion money for this purpose. If the deserving people, such as widows who lost their all or old men who had all their earnings on deposit, could be separated from what I might call the less deserving people, it might be different-for we must remember that not all the 60.000 people who lost are children or widows or deserving poor; there were some corporations and there were some people who could afford to stand their loss. But if reimbursement were made at all, all would have to be treated alike.
I do not know, Mr. Speaker, that there is any legislative club by which people can be forced to deposit their money in any particular bank. We not only had the Home Bank in Canada doing business for the past eighteen years, but several others. In the city of Ottawa we had a branch of the Home Bank, but we had branches of other banks
as well. Now the people who deposited in the Home Bank, so to speak, said: Here, I trust the directors of the Home Bank to handle my money, and I am placing my $100 or my $1,000 in their care to handle for me and pay me 3 per cent interest. They had a perfect right to do that. But we might put forward the question: Why did they not put their money in some other place? They were not compelled to give their money to the Home Bank of Canada. In the city of Moose Jaw there was a branch of the Home Bank, but there were branches of other banks there as well. That may not apply to all points, but it does apply to some.
Also Mr. Speaker, it is not compulsory for people to put their money in any bank at all. We have a Post Office Savings Bank in Canada, connected with 1,307 post offices throughout the Dominion. Those 1,307 offices will accept the deposits of the people in any amounts from $1 up to $1,000 in any one year, and they will pay 3 per cent interest on the deposit. Was there anything to prevent the depositors of the Home Bank from putting their money in the post office, and thus giving to the country the benefit of the profits that might be made? There was absolutely nothing.
So far as the province of Ontario is concerned, they have a provincial savings bank that pays 4 per cent interest. Why did not the Home Bank depositors in the province of Ontario put their money in the Ontario Government Savings Bank, with the whole resources of the province behind it? They would have been almost sure that they would be repaid, and in addition they would get one per cent more interest than they got in the case of the Home Bank.
Out in the province from which I come, Saskatchewan, we have a Farm Loan Board that during the past several years has been very anxious to secure the money that the people have and cannot make use of. So anxious have they been to secure it, that they have been paying 5 per cent interest. Now, so far as Saskatchewan is concerned, why, let me ask, did not the depositors of the Home Bank put their money on deposit with the Saskatchewan Farm Loan Board and help out their own province and incidentally help themselves to the extent of an additional 2 per cent over and above what they got from the Home Bank? Or if any of those investments did not appeal to them, we have in Saskatchewan an admirable investment in the way of purchasing tax sale certificates. Every town, city, village and rural municipality in the province is compelled yearly to put up on
Home Bank Investigation

tax sale the property on which the taxes have not been paid, and any purchaser who has the money to invest will receive 10 per cent on the investment, and the investment, Mr. Speaker, is more secure than the investment in any bank. Now, we might ask, why did the people not put their money in any of these more safe investments?
But there are other reasons, Mr. Speaker. If the government of this country should find it incumbent upon them to reimburse the Home Bank depositors, would it not establish a precedent that would be very hard to get away from? Would they not be virtually saying that from now on they will guarantee all the deposits in all of the banks in Canada? In other words, they would be guaranteeing the sum of two billions of dollars. More than that; if they found it necessary to reimburse the losers in this case, would it not be necessary to make the action retroactive and reimburse losers in other cases, notably the depositors in the Farmers Bank, which failed some time ago?
Another reason why I would be opposed to reimbursing depositors, would be that it would tend to make the bankers more reckless than they are, if that is possible. It would tend to make them feel: The government of this country is standing back of us and will. pay the bill if we lose; so let us leap in and speculate. They would say; If we lose $11,000,000 or $20,000,000, what is the difference?-the government will come to our rescue. I do not feel, Mr. Speaker, that our government should compromise the country to that extent.
But there are some things that we may do. I cannot say that I am wholly in accord with the resolution. It asks for the appointment of a parliamentary committee immediately. I fail to see the necessity for appointing a parliamentary committee immediately or later. We have a Banking and Commerce committee, made up of ninety members of this honourable body, and I fail to see the need for any other committee than the one already appointed. I do not agree with that portion of the resolution. I have absolutely no objection to inquiring into the weaknesses in the Bank Act, but that should be done through the Banking and Commerce committee. I do not agree with that part of the resolution which asks for a recommendation for saving the Home Bank depositors from loss. Therefore, I could not vote for this resolution, but I would be in favour of referring the matter to the Banking and Commerce committee and suggesting to them that they should review,-not the entire Bank Act, because I do not think the entire Bank Act upon which we IMr. Carmichael.]
spent so many days and weeks, yes, months of time last year in reviewing and discussing, should be again ground up piecemeal and evidence taken in regard to it,-but I do think that possibly some sections of that act that bear more directly on the Home Bank case should be reviewed, and if possible amendments to such sections should be proposed. I would be in favour of reviewing more especially the sections dealing with the inspection of banks. I know that last year in the Banking and Commerce committee the hon. Minister of Finance (Mr. Fielding) took a stand against government inspection of banks on the ground that government inspection entailed government responsibility. He might be correct to a degree, but if government inspection is going to eliminate Home Bank failures and the like, then, Mr. Speaker, we should have government inspection and we should have it quick. I do not think that it is a physical possibility-well, it may be physically possible, but it is almost a financial impossibility-to inspect all the branches of all the banks in Canada, but we could adopt a system of government inspection whereby the head offices would be inspected, and possibly by so doing we would strengthen our banking system and overcome some of the weaknesses and some of the tendencies to failure.
As well as those suggestions, Mr. Speaker, as soon as this country has come to realize the success of public ownership, which it is coming to realize more and more every day in every way, as soon as it realizes to the full extent that public ownership is not only a feasible but a profitable proposition, I would suggest that at that time there is the possibility of the government of Canada going into the banking business in a similar way to that in which the Commonwealth of Australia has gone into it, not by tearing up our banks and throwing them overboard, not by adopting some scheme that is more or less wild and weird, but by starting in the banking business alongside of our present banking institutions. I am quite sure that if the Dominion government should venture on such a scheme they would be just as successful as the Commonwealth of Australia, which has made over $18,000,000 in some ten years of business, and which has kept the rates of interest down near the earth, and has the resources of the countiy back of every deposit. Just think, Mr. Speaker, with what confidence a person could put his deposit in a bank owned and controlled by the Dominion of Canada. I understand the total wealth of our country is placed at some

Home Bank Investigation
twenty-two billions of dollars. Such being the case, a depositor could put his money in such a bank and feel perfectly safe. I am well aware that this suggestion is possibly a little premature, and I do not look for action to be taken in regard to it in the immediate future. But I feel quite convinced that action could be taken in the years to come along this line, and that such a proceeding would be perfectly safe. I do not feel that I can support the resolution as it is worded, and therefore I shall have to vote against it.
At six o'clock the House took recess.
After Recess
The House resumed at eight o'clock.


Mr. R. K. ANDERSON (Halton):: In rising to address the House on the motion proposed by the hon. member for East Calgary I might say that I find myself in accord with at least a considerable part of the resolution. The resolution says:
That, in the opinion of this House, a Parliamentary committee should be appointed immediately to investigate the Home Bank failure, with a view to discovering any weaknesses in the Bank Act which may be amended to prevent a similar occurrence; to devise some means of protecting depositors generally.
I can endorse that part of the resolution; but with regard to the latter part I am not quite so sure. I do not intend at the present moment, until I hear further discussion, to say whether or not I should be willing to go to the extent of saying that the government should make itself liable for the loss of the depositors of any bank. I am well aware the Bank Act which was revised last year might possibly be made better than it is, but I do not think it is possible for any government to pass an act which will completely prevent fraud and dishonesty on the part of the managers of any bank or any other private or public corporation. The Bank Act as it stands is fairly effective, and if its provisions are enforced I think it is almost sufficient to guarantee the deposits of the people who put their money in a bank. So far as the government are concerned, and its responsibility to see that the managers perform their duty to the depositors and shareholders, it is possible that they might be more active in that regard. The hon. Minister of Finance (Mr. Fielding) has said that inspection by the government adds responsibility. I would be in favour of a greater inspection of banks, not so much by the government as by an independent audit. The government might appoint an audit board. Such board could be paid
by making their salaries a- charge upon the banks, and that could be supplemented by the government. That independent audit board could go through the records of the bank at any time if they thought there was need, and make a report, not only to the Bankers' Association, but to the government and to the directors of the bank. I believe, Mr. Speaker, that in most cases banks have succumbed to failure because of inefficiency and lack of knowledge of banking institutions and banking procedure on the part of the directors. Chief Justice Meredith, when acting as commissioner for the Farmers' Bank, made such a statement. He said it was significant that the directors of the Farmers' Bank had no experience whatever in banking or in large business of a financial character of any kind. He attributed the failure of that bank largely to that cause. I understand, and I believe it can be substantiated, that the directors of the Home Bank under discussion to-night had no experience in banking. They had no knowledge of banking procedure, and I am confident that the failure was the direct result of inefficiency on the part of the directors, and possible dishonesty on the part of the management. Even if you have an inspection by a government auditor, it is possible that such defalcations on the part of the bank might not be discovered.
In reference to the Home Bank, I think its condition has been precarious for a number of years, and I believe that Sir Thomas White did make an investigation of some sort, and it is somewhat significant with regard to that investigation that the gentleman who was appointed to look into the condition of the bank was in some way taken into the employ of the bank itself. That is a significant fact which will bear investigation-as to why it was that Mr. Lash, appointed by the Finance department to look into the affairs of the bank and make a report, was almost immediately afterwards taken on as the solicitor for the Home Bank.


Mr. SPENCER:: Is it not true that Mr. Lash was solicitor for the bank before he was appointed by the Finance department.


Robert King Anderson: I believe he had done
some independent temporary work for the bank previous to that, but I think that it was after his report was made that he was taken on as permanent solicitor, not in a temporary capacity, but that he was not in that position at the time he made the investigation.
With regard to revision of the Bank Act, I think it is possible also that certain pro-
Home Bank Investigation

visions might be made to give a greater security to the depositors. I find myself in agreement with the hon. member for Kindersley (Mr. Carmichael), that as the government has no direct control over the affairs of the bank; that as those who place their money in the bank do not seek information from the government, that they are in no way responsible for the action of the management of the bank; and that it would be thoroughly unjust to say that, while the bank is in a good working position and is making dividends for its shareholders, and paying interest to the depositors, the government should have no interest in it but that immediately it becomes a failure and the money of the depositors and shareholders is lost, the government should step in and say: "We will take all the loss." At the present time when the country is in such need of economy, when we have such a large indebtedness and a great amount of money to raise each year, it would be unfair to ask the government and the treasury of the country to become responsible for defalcations in banks. That would be establishing a precedent which might lead to very grave conditions in the future. Nobody knows where it would stop, as it would need to be retroactive, because it would be impossible to select the depositors of the Home Bank and say to them: "You will be a select few whom the government of this country will reimburse for your losses," and not do the same thing for others.
I want to state emphatically that if the government should take that attitude, they must then reconsider giving recompense to the depositors of the defunct Farmers' Bank and other banks as well that have failed in the last few years. You cannot say that the depositors of one particular bank shall have a claim on the bounty of the government and that the depositors of another bank shall not.


Mr. CHURCH:: Why should there not be
created some reserve fund ear-marked for the protection of depositors similar to the present redemption fund for the protection of noteholders? Are they not equally creditors and do they not have an equal priority?


Robert King Anderson: goes without saying that the failure is due to lax and inefficient, if not dishonest management.
In less than four years the Farmers' Bank was utterly wrecked. Mr. Travers invested something over half a million dollars in the Keeley mine and other unprotected loans, and this tying up of its assets was the principal cause of the failure. For instance, the Keeley mine was afterwards sold for the comparative]}'' insignificant sum of $141,000. Sir W. R. Meredith, in summing up the causes of the bank's failure, said:
The subsequent management of the affairs of the bank was characterized by gross extravagance, recklessness, incompetency, dishonesty and fraud, and has resulted in the entire loss of the paid-up capital and the whole of the deposits, and that after allowing for all that can be extracted from the shareholders on their double liability a loss amounting to no less than $1,806,437, making a record unparalleled in the history of any bank in Canada, or, as far as I am aware, in any other country.
Subject to deductions in respect of some of the times of sums amounting in the aggregate to $42,377, during the short career of the bank, the bad debts amounted to $598,565; the operating losses, including the cost of printing bank notes and stationery, to $281,119; the organization expenses to $87,279; the sums stolen by officers of the bank, after deducting what has been and is expected to be recovered from sureties, to $134,118; the dividends paid, to $50,772; the losses on expenditures on bank premises, fixtures and furniture, to $108,801; the loss on the purchase of the Keeley mine, to $509,886, from which, however, is to be deducted what may ultimately be realized from the sale of it; loss on the purchase of stock in the Keeley Mine Company, $15,000; besides other losses amounting in the aggregate to approximately $63,274.
And that in the short period of three years or a little over! How could any bank act prevent the failure of a bank that was run like that? How would it be possible to make an act of such a character that it would prevent defalcation of that kind when the manager of the bank had no idea of his responsibilities to the public, had no regard for what their losses might be so long as he himself was retained in his position? The directors of that bank guaranteed Mr. Travers $5,000 for the first year and an increase of $1,000 in salary for four years, making a total of $9,000, and if at any time he was deprived of his position in the bank he was to be given a pension of $1,500 a year for life, so that he was to be well looked after. When the provisional directors severed their connection with the bank and the regular directors were appointed, $20,000 of the bank's funds were distributed amongst the provisional directors for their work in connection with the organization of the bank.
The matter of this bank has now been before the public for something like ten years,

and a statement to the shareholders of that bank from the liquidators has not been submitted. The shareholders employed a liquidator to look after their interests in the liquidation of the bank, and they have a right to know what the assets of the bank were, how its debts were paid and what returns might be expected to depositors and shareholders. Such a statement has not been forthcoming, or was not forthcoming up to a short time ago. Last January I made an application to Mr. Clarkson, the liquidator, for a statement in the interests of the shareholders, mentioning that I myself was a shareholder. I received no reply to my letter. Other men had asked for a similar statement but did not receive any. When I came to Ottawa at the opening of the session I took the matter up with the Finance department, and I must say that the Finance department acted very promptly; they wrote Mr. Clarkson asking him for a statement of the bank's affairs, showing what had been done with the assets and what amount of debts had been paid. I wish to read Mr. Clarkson's reply, addressed to Mr. J. C. Saunders, the Deputy Minister of Finance, Ottawa, under date of March 4, 1924:
Re Farmers' Bank of Canada
I am in receipt of yours of the 29th ult., and in reply thereto would say that in April, 1923, I had an extract of the accounts of the Farmers' Bank made with the intention of whipping the matter into shape to give you the statement then asked for. Thereafter, however, I gained the understanding that the necessity for the statement had passed when revision of the Bank Act had been disposed of, and consequently I did not complete it.
That was rather a peculiar reason for not giving the statement.
In order that you may understand the conditon of affairs, I wish to say that in dealing with the affairs of the Farmers' Bank we adopted the only policy open to us which would admit of our passing accounts before the court from time to time and as receipts and disbursements were made. To do this statements were prepared of every individual receipt and every individual disbursement, the latter bo that vouchers for every expenditure could be placed before the court. This meant that while all receipts and all disbursements were passed no statements were prepared or asked for by the court which required the subdivision of receipts and disbursements under headings which would allow of a comprehensive statement being presented.
I may say that I had given the headings under which I wanted the statements presented with regard to the disbursement of the assets of the bank. The letter continues:
Under the above circumstances when you ask me for a statement it now means that I have got to take the accounts passed by the court and extract every individual item of receipts and disbursements under

Home Bank Investigation
headings so as to show what was realized from receivables, interest, double liability, collections, securities, real estate and fixtures and furniture, while on the other hand I have got to divide the expenditures to show payments of circulation, salaries and preferred claims, wages, branch expenses, liens, preferred accounts, set-offs, bank collections, legal fees, liquidator's remuneration, court costs and other charges. Having regard to the fact that there are thousands of entries involved and the liquidation spread over a period of more than ten years you will see what your request means. The extraction and the allocation of the items is now under way, and I would say that we ought within one week to be able to supply you with the information. This I trust will be satisfactory.
Mr. Clarkson sent me a copy of the letter he wrote to the Deputy Minister of Finance, and I must say that in a week a statement did come to hand. I wish to put that statement on Hansard as being the only one that has been issued with regard to the liquidation of the Farmers' Bank, although that bank failed fourteen years ago. The shareholders have had no knowledge whatever of what was done with their money, of what became of the assets of the bank, although they had a right to know. The statement is as follows:
In the matter of the Farmers' Bank of Canada
Statement of Estate Receipts and Disbursements for period between December 19, 1910 and March 12, 1924
Receipts-
General collections and realizations as passed in detail by Court-
Head Office items	$ 37,651 89
Toronto branch items.. ..	165,697 92
Branch items (26 branches). 267,495 87

Bank balances	 4,699 30
Special claims, accounts and securities
realized therefrom	 420,402 82
Real Estate, fixtures and furniture.. ..	41,742 27
United States claims-collected therefrom	$35,713	49
Less Costs of United States
Attorneys	 9,356	96

 26,356 53
Recovered from double liability	$314,880	66Returned dividends	
4,225	00
319,105 66
Interest receipts	
13,270	13Sundries	
45	44Recoveries in	respect	of	defalcations,misfeasances	and	illegal	preferences..	74,003	61
Payments-
Circulation outstanding..	.. $536,020 00
Interest thereon to dates of

	$606,984	77
Trusts and Guarantee Company-advances against receivables-with interst
thereon	 231,953	55
Claims secured upon items receivable
and collections	 73,633 61
Current and Savings balances applied by debtors in liquidation of	obligations..	30,592	19
Deposits after suspension repaid.. ..	1,14175
Collections of items held in	trust-repaid	1,052	18Preferred wage claims	
5,403	00Advances in respect of special accounts and in discharge of liens and mortgages	
195,141	20Court and Court Stenographer	costs..	7,507	86
Costs of Creditors and Debtors required
to be paid by Estate	 7,491	97
Shareholders Test Case-costs allocated
against Estate	
3,500	00Branch general expenses	
4,901	28
Rentals, postage, printing and sundry
expenses	 17,687	38
Salaries and wages of employees.... 8,089	39
Remuneration of Curator and salary allowance to Liquidator for period December 19, 1910, to October 31st, . 1916 (including services of employees in
investigations)-as allowed by Court.. 61,250 00 Law Costs-including costs during Cura-torship-general Estate costs-misfeasance actions-double liability actions-Test cases-and in respect of
special accounts	 98,189 96
Balance on hand	 15,951 37
$1,370,471 44	$1,370,471 44
With reference to the item "Shareholders' Test	Case-costs allocated against estate,
13,500", I might say that the shareholders contested their obligation to pay double liability, and the case was fought in the courts of Ontario and in the federal court, and the shareholders lost out. I might add that the commissioner who was appointed to investigate the affairs of the Farmers' Bank was givei^ every means by the government of the day for investigating the whole proceedings of the bank. He was empowered as follows:



REVISED

[Stage Direction]
In pursuance of the Commission of Your Royal Highness, dated the twelfth day of February, one thousand nine hundred and twelve, by which I was appointed a commissioiner to make investigation into all material and relevant facts in relation to:
(a)	The incorporation by Act of Parliament of the Farmers' Bank of Canada and the organization thereof;
(b)	The application for and the giving by the Treasury Board of the certificate permitting the bank to issue notes and to commence the business of banking;
(c)	The conduct and operation of the business of the bank, the amount of capital subscribed and paid up, the causes of the suspension and failure, and the extent of the liabilities and the value of the assets thereof.

[Stage Direction]
Home Bank Investigation
[Stage Direction]
The commissioner was given a free hand to investigate every aspect of the Farmers' Bank from its inception up to the time of its liquidation, and I would recommend this government to do the same thing with regard to the Home Bank.
The government has said that they wish to get the opinions of members of the House with regard to what shall be done, whether the inquiry should be by a commission or by a parliamentary committee. I would prefer a parliamentary committee, and that it should be given as free a hand as the commissioner was given in respect of the Farmers' Bank, to inquire into everything in relation to the bank from its incorporation to the time of closing its doors, and after, so that the committee could look into the matters of liquidation and see that they were carried out properly, and see that all persons who owe money to the bank pay their liabilities in order that the depositors may receive everything that is coming to them. The depositors have a right to expect that everything will be done in that regard. When a bank fails I think it should be the duty of some person, either the attorney general of the province or the Minister of Justice for the Dominion, to see to it that action is taken to inquire into the causes for the failure, and to ascertain who is to blame. If the manager or the president or a director is responsible, if he has been fraudulent in his acts, if he was dishonest in the incorporation of the bank, he should be brought before the Courts and properly punished. Too many of our bank managers and bank presidents) who wreck banks get off too easily. They are not prosecuted as they should be, and the consequence is that there is every incentive on the part of dishonest men to make an effort to get rich at the expense of the depositors and shareholders.
I want again to impress upon the government the advisability of looking into every matter concerned with this bank. I would prefer a parliamentary committee, if possible, but the inquiry should be made either by a parliamentary committee or by a commission -by some competent authority-and every attempt should be made to see that justice is done.
Mr. 0. R. GOULD (Assiniboia) :	I was
quite unable to hear the remarks of the hon. gentleman who has just taken his seat (Mr. Anderson)-
Some hon. MEMBERS:: Louder.


Mr. GOULD:: It is very seldom that it
has been necessary for hon. members in this chamber to call "Louder" to me.

Like the hon. member for Kindersley (Mr. Carmichael) who addressed the House this afternoon, I can say that I do not speak for the depositors of the Home Bank resident in the electoral district which I represent. I regard this as a national question, and I shall be intentionally brief in the few remarks I shall make to-night because of the clearness of the resolution itself, and more particularly because of the clear and able presentation of the case by the hon. member (Mr. Irvine) in whose name the resolution stands.
The resolution contains three clauses, all very specific and needing very little elucidation, and in my humble opinion they are such that no one in the Chamber should object to their fulfilment. The first asks for a parliamentary committee to be appointed "with a view to discovering any weaknesses in the Bank Act which may be amended to prevent a similar occurrence" to the failure of the Home Bank; the second seeks "to devise some means of protecting depositors generally;" and the third clause reads "to make recommendation as to the possibility of saving the Home Bank depositors from loss." I think each of these three clauses very laudable; and again I say, I do not see why any hon. member of this Chamber should object to a committee being appointed for the purpose of proceeding along the lines indicated in the resolution.
I might state that while there are no depositors of the Home Bank in my constituency, and no branches of that bank, yet I was interested enough in this matter to appear in the city of Moose Jaw during the month of January last and listen to a presentation of the case by a committee who spoke for the depositors in the province of Saskatchewan.
I had the opportunity of addressing that committee for a few minutes, and in my remarks I first of all expressed my sympathy for the depositors, and secondly I stated that I would do all in my power to assist them in recovering the losses they had sustained. That remark was qualified by the statement that I should be glad to assist if there would be no added burden thrown upon the already overburdened taxpayers of the Dominion of Canada. Since I have listened to the presentation of the case here to-day, and having since the occasion to which I have referred, met many of the depositors personally, and having received many recommendations from various organizations throughout Canada setting forth the case more clearly than I had seen it 'presented up to that time, I may say that to-night I have no occasion whatever to change the sentiments I expressed in the city of Moose Jaw; in fact, I am prepared

Home Bank Investigation
to state that the sentiments I then expressed have been intensified since.
I think the resolution as it stands to-day, in its three clauses certainly points the way whereby the ends there outlined may be attained. We have to look at this question, firstly, from a more or less psychological point of view, because people who deposit money in our chartered banks in Canada are what might be termed the best class of our citizens. They are not extravagant people or the wasters; they are the people who have conserved the money they have made and deposited it in our institutions in the firm belief-and that belief has been taught them from their youth -that these institutions were safe and sound. But we have had many cases, and particularly the grievous failure of the Home Bank, which have shattered the faith of many people in this country in our banking institutions, and particularly those who have had money deposited in them. Not only that, I believe I am safe in assuming that many people who have money deposited in the other chartered banks of Canada entertain a doubt at times as to whether the foundations upon which those institutions rest are as secure as they have been led to believe. That is a very serious thing to say with respect to our financial institutions.
It seems to me that if a former minister of finance is rightly credited with the assertion that he knew of the workings of the Home Bank many years ago, the question at issue hinges upon two things: First, whether it was known at that time that the Home Bank was an almost shattered institution; second, whether the peop'e of Canada benefited by allowing it to continue. If, because of the silence of the finance minister of that time, the people of Canada derived a benefit, a committee appointed now might endeavour to find out what the extent of that benefit was. The question naturally arises also:	If that former finance minister
was aware of the actual circumstances, is it not fair to assume that succeeding finance ministers likewise knew of the condition of the Home Bank during and following the war period? These are questions that are being asked and the people have a right to receive replies to them. If it is established as a fact that the people of Canada did so benefit then I state my opinion most positively that they are under an obligation to the depositors of the Home Bank. I am prepared to state my belief that Canada did benefit as a result of the silence maintained from 1916, which was during the war period, until the crash came. I believe the people 48i
of the district that I represent would not object to paying their fair share or fair proportion of the loss sustained by the depositors, under some plan that would enable them to meet the burden without difficulty, providing it can be clearly established that Canada did profit as a result of the silence in question.
It may be that the ex-minister to whom the statement referred to is attributed is not culpable. If his culpability is established, our duty is all the more manifest, and the people at large, in my opinion will gladly reimburse those who have lost their deposits, in accordance with some suitable plan upon which a committee may report after due investigation.
The question may naturally be asked-and I think is being asked at the present time:- did not succeeding governments accept the income taxes which the Home Bank continuously paid into the Dominion treasury? These taxes certainly must have been accepted, at any rate the statement is made in an explanation issued in connection with the bank's affairs. The government should have been as diligent in watching the affairs of the Home Bank as they are in scrutinizing the transactions of other institutions. Had they maintained such a keen scrutiny the actual condition of the bank could hardly have escaped their notice. A short time ago Canada covered itself with glory when it rushed to the assistance of Japan, following the terrific earthquake which devastated portions of that empire, Because of the aid then rendered Canada has been lauded internationally. And yet, although we rendered such assistance, Japan was collecting a duty on our imports of wheat. It seems to me that if Canada did the right thing in going so promptly to the assistance of the people of a foreign state, it would be even more justified in moving in the interest of those who have suffered from a calamity such as the failure of the Home Bank.
I could recite many distressing tales of the results of that failure, but I refrain from narrating such pathetic experiences. I simply rose to give expression to my earnest convictions in this matter. I am quite in sympathy with the resolution, and I see no reason why every hon. gentleman should not support the appointment of the committee asked for.


Mr. JOHN MILLAR (Qu'Appelle):: At
times the good things of life are close to our hands. As we are engaged in trying to find a remedy for the existing banking troubles
Home Bank Investigation

my good friend the member for Macdonald (Mr. Lovie) hands to me a newspaper clipping advocating a remedy which, however, I think would be very far-reaching. The clipping in question, which is from the Brandon Sun says:
There are few bank failures in China. When a bank fails there the official responsible is beheaded.
I wish to refer very briefly to the resolution before the House. There were $225,000 of deposits in the Home Bank in the district I have the honour to represent. Now, I do not wish to claim that because some of the people of my constituency have had bad crops, or are poor, or have suffered greatly, or have lost all they had, through this bank failure, that that is any reason why we should act regardless of justice and set a precedent that would be dangerous. I do maintain, however, that it is a reason why we should be very careful to give these sufferers justice to the extent of one hundred per cent. I have received many letters from Home Bank depositors, and also petitions some of them containing over one hundred signatures, asking that consideration be given to the depositors, and that the government undertake to make good their entire loss. As yet I have an open mind on the subject, although I am free to admit that my heart is with the losers. I have heard it stated that a member who had branches of the Home Bank in his own constituency is not competent to act impartially. I do not admit that would be true of myself, and yet my sympathies are strongly with those who were depositors and shareholders and have lost everything they had. I might just refer to the case of one depositor, a man who was hard working, who had a little more funds and a little more backing financially perhaps than most of the other depositors
9 p.m. and yet who earned his money laboriously. He placed in one of these branches, a few days before it closed its doors, $7,000, the return from his last year's crop. Perhaps he is not so much to be pitied as some others who had not t'he $7,000 to deposit, and yet it seems very hard indeed that a man should, within a few days of the failure of this bank, place in trust $7,000 hard-earned money, when those who are collecting this money in this way look upon it not as a sacred trust to be invested where the security is only of the very best, but rather look upon it as an unlimited fund with which to engage in wild-cat schemes, and that is the way it is treated. Our Bank Act I believe is a good act, but it certainly has its weak-

nesses. This I think has been amply shown. I think if we had some measures of protection such as they have in the United States it would be an improvement. They have found in that country that a reserve fund bank is very useful-a bank to which other banks can resort in case they require funds, where they can have their paper discounted. Those who have studied the banks of the United States carefully believe that at one time there would have been a serious crash if it had not been for the federal reserve bank; but through the efforts of that federal reserve bank other banks that were in financial difficulties, not because they were insolvent but because of pressure at the moment, were able to resort to that bank and have their paper rediscounted; and thus were able to carry on. I fancy that if we had some scheme similar to the federal reserve bank of the United States, by which somebody would be appointed who would be able to arrange a rediscount, a bank in Canada would not find it necessary to close its doors in case of financial pressure. One difficulty with our banks in the past has been that when times were good they were too ready to loan, they had plenty of money, the depositors were numerous and the borrowers few. Then when times became bad, those who had plenty of security and who had a right to expect that they would be able to borrow money, and those who would receive money under a proper banking system were not able to obtain that accommodation. I have known men to go out with Victory bonds of considerable amounts and find themselves unable to borrow one dollar on them. That state of affairs should not exist. It has been said that even in the United States where they have government inspection, banks fail. It is true that such things occur; and yet I am inclined to think that a proper inspection by the government-not such an audit as we have had in the past, which seems to me to have been entirely ineffective, but an inspection that would examine very carefully the reports from the various banks, and have a nose for trouble the same as a newspaper man has for news-would have discovered something wrong with the returns from the bank which has caused us so much trouble. If such banks as these were inspected more carefully, and the loans the bank had made examined thoroughly, such a disaster as has occurred would not be repeated. I am inclined to think the banks are standing in their own light. This failure has shattered confidence in our banking system, and, I think the banks by standing together, by not adopting such measures

Home Bank Investigation
as will prevent such a catastrophe as this, have done themselves a very great deal of harm. It seems to me the claims of the depositors rest to a very large extent on this point: It is claimed by some that Sir Thomas White, when Minister of Finance, being notified of the condition in which this bank stood, withheld his hand in the interests of the public good, and that Canada at large benefited thereby. I think, if that be proven, I have found a very strong claim and a very good reason why the country at large should bear the loss. I am watching these matters very carefully. I hope the investigation will be thorough. I am glad that it extends from the time the bank was created up to the time it closed its doors.
I would like to refer to a remark made by the mover of the resolution (Mr. Irvine), that I think, was rather unfortunate. I feel that I cannot let it pass without a reference. It was to the effect that the commissioners usually write reports that nobody reads, run up large bills of expense, and that their reports are very seldom translated into legislation. I think if the hon. member (Mr. Irvine) had thought seriously he surely would not have made that statement. I have gone back carefully in my memory over the commissions I have known, and of the men who have been employed on these commissions, and I can find no justification for any such statement. A clipping was read from a newspaper, supposed to be a statement from a newspaper reporter, to the effect that having sat three years in the gallery he knew of no case where the report of the commission had been translated into legislation. I have in mind at present such men as are working on these commissions even now, and coming from Winnipeg, on my way to Ottawa a short time ago, I met the Grain Commission, and when I saw these men and talked with them I found they had just returned from Fort William and Port Arthur, and I can well say that their solicitor was worked to the last pound of his strength. He had done all that any man could possibly do. He is a man of great ability and high attainments. Surely such ridicule should not be heaped upon such men as Chief Justice Turgeon, such men as Dean Rutherford or Mr. Scott of Winnipeg, or such men as Professor Gibbon. These are not men of the stamp that are wasting their time and public money writing reports that nobody reads. I can assure the hon. member for East Calgary that there are men all over the country who are deeply interested in this matter of the grain trade, and they will read with the greatest care the reports that
have been issued. It may be-and I believe it is the case-that three-fourths of the people are not interested in that matter and do not read the reports. Why should those who are interested be deprived of the benefit of the reports because some people will not read them? I desire to refer to two or three commissions of which I have actual knowledge. How did we get the co-operative elevator companies? It was because the report of the commission was translated into legislation. The Royal Grain Commission of 1906 and 1907 made twenty-six recommendations, and twenty-four of these recommendations were accepted by the organized farmers of western Canada, and were incorporated into the Canada Grain Act of to-day. I am asked, do we get any results? Let me read to the House two or three paragraphs which will be good reading at any time in this connection or in any other connection. I read from the Regina Leader of April 27, 1910:
In the matter of the Port Arthur elevator and the Empire elevator, the charges were taken up and on investigation were all sustained and the department at Ottawa instructed their counsel here to prosecute and the case came up befoi'e Police Magistrate Daly on Friday, April, 1923. The Port Arthur elevator was proven guilty on five charges of false statement and fined $500 for each offence. The Empire elevator was found guilty on six charges of a similar character and fined $500 for each offence.
Just one other short paragraph, because I have heard many slurs cast on the work of commissions from time to time, therefore, I dwell for a moment on this question. A question was asked as to the result of the Grain Commission. Let me read two or three lines from a clipping from the Farmers' Advocate of November 17, 1909. This shows the result of measures put into effect on the strength of the report of that commission:
In 1908, the shortage on out-turns totalled 50,000 bushels, a loss of course which indirectly affected the price paid for grain at Fort William.
I will now give the returns after the remedial measures were put into effect.
Bill of	Net
Lading	Out-turn	shortage
Bushels	Bushels Bushels
Wheat	
8,470,287	8,463,925	5,956Oats	
2,377,311	2,375,096	2,214
I think that is as far as I need to go in regard to this matter. When commissions are working hard on very important work and are doing as faithful and honest service as members of this House, it is a grave mistake to undermine their work, to leave the impression that it is useless, that their report will not be translated into legislation. Let me close by asking this question: Does any member amongst the 235 in this House be-
Home Bank Investigation

lieve for one moment that the report of the present Grain Commission will not be translated into legislation? I think there is not one.
I believe it will be better to refer the resolution to a committee of the House rather than to a commission; but I feel just a little undecided at the present time whether it will be better to refer it to a special committee than to the Banking and Commerce committee. I hope, however, wherever it goes, it will be dealt with in a very effective manner, so that such disastrous failures as we have had in the past will not occur in the future.


Thomas Langton Church: Mr. Speaker, I would not have taken part in this debate but for the fact that I come from a city in which my office is a few doors away from the head office of the Home Bank and that a large number of the depositors have ajked me to speak on their behalf. I had a great deal of business to transact with nearly all the chartered banks of Canada while a municipal officer. The Home Bank had a lot of people trying to get the city of Toronto deposits. They offered a higher rate of interest to municipalities; they engaged lobbyists also, as you will see from the papers to secure business; they advertised for deposits and had a good advertising campaign. I remember the start of this bank. It commenced as a loan company and it started with poor people. Of the directors of the bank, with the exception of Mr. Daly, only two or three had as much as $3,000 or $4,000 stock in it. Mr. Daly had a large amount of stock in the bank, and some of it was transferred to his wife. Those in charge of the bank, the president, the directors, the manager and the rest of them, as Mr. Clarkson pointed out in his report, had no banking experience. In my opinion, the Bankers' Association should bear the-brunt of this disaster. All last year while we were getting the Bank Act revised, they appeared around these legislative halls asking that it should not be laid over, that not one day was to be lost to get the new act through. For it had been contended that the act should be laid over for a year and a survey made of all the banks, and that auditors should be put to work. It was proposed that a survey should be made in the recess of parliament in regard to all these banks, because what has happened to-day in the Home Bank may happen to another bank to-morrow. I do not think the Canadian Bankers' Association dealt fairly with this parliament in regard to this legislation. They .issued'booklets, pamphlets of all descriptions, and they described the Canadian

banking system as the finest system in the world. They talked in these treatises about the "uninformed agitators" amongst the farmers of the West. They put into the hands of members books containing a sort of catechism between the farmer and the student on the different banking systems in the world. This pamphlet in a white book is called Banks and Banldng, and there are articles under various headings such as "Protection to depositors", "Priority for depositors equal to that of note holders", "Redemption fund." The people of Canada had a shock last August from which they have not yet recovered. Members of the cabinet were over in the Old Land last summer looking for more capital to come to Canada. How can we expect to get capital in Canada under the present banking system and Bank Act? With all due respect to the gentlemen who compose the Canadian Bankers' Association, I would say that everything they say in this pamphlet can be proved to be incorrect since last August. They have criticised the banking systems of other countries, and we find, under our own banking system, the disaster of last August which happened only three months after these gentlemen had been running around these legislative halls telling us not to lay over the revision of the Bank Act, not to appoint auditors. They forced the act through, saying that not an hour was to be lost. With alf due respect to what the late government did in the case of the Farmers' Bank, I would say that that government took a certain stand at that particular time, but two wrongs do not make a right. Public confidence has been shaken in the banking system we have in this country. A few years ago there was a case in point when the Canadian Northern Railway was taken over by the government of Canada under an arbitration presided over by Chief Justice Meredith, to whom the hon. member for Halton (Mr. Anderson) referred tonight. There was a hypothecation of title deeds to the government by the Canadian Northern Railway for almost all their assets throughout Canada for advances. Subsequently to this claims were made for further advances. Some advances were made to the Canadian Northern by the Canadian Bank of Commerce amounting to $10,000,000 or $15,000,000. When the arbitration was in progress, what did this parliament do? Although the parliament of Canada had priority and could have foreclosed the system without paying a dollar, and preserved its priority under those title deeds of the Canadian Northern Railway System, this legislature paid them $10,000,000, although in my humble opinion, they had no legal claim, let alone a moral claim. What is good for a

Home Bank Investigation
large corporation like that should be good enough for the poor depositors in the Home Bank. We have been told that there is a difference between a note-holder and a depositor. A bank has two classes of first creditors. One is a note-holder and the other is a depositor. In the old days of the banking system of this country there was a difference in the way bank notes were regarded. Some people would prefer the notes of one bank to those of another.
I remember the time in Toronto when people would not take the notes of certain banks because they were not considered safe. After the disaster to which I have referred parliament revised the Bank Act and provided for a note redemption fund, which was formed by each bank contributing five per cent of its note circulation. This fund to-day amounts to six or seven million dollars, and noteholders are thus protected when a bank fails. The same legislation should be extended now to depositors and a sinking fund established.
Now a disaster has overtaken the depositors of the Home Bank, and I know that many people in Toronto have lost all their savings and will be driven into the poorhouse. All the inquiries whether by royal commission or otherwise will not recoup those unfortunate people. Instead of futile investigations, I contend this parliament should say to the Canadian Bankers' Association: "You were the leaders in passing our banking legislation, you are our partners by reason of the note redemption fund, and you are in charge of the banking system of this country; therefore it was your duty to save the Home Bank from going to the wall; you might very easily have saved it as you did the Merchants' Bank; we have enough problems on our shoulders without assuming your work; you must come across with sufficient financial assistance to take care of these depositors." Would it not have been far better if the Bankers' Association had come to the rescue of the depositors to the extent of six or seven million dollars? In fact, four or five million dollars would probably have been sufficient, because some of the securities of the defunct bank may yet be realized at par. Would it not have been far better for the credit of this country had the Bankers' Association taken that course? It must be borne in mind that the chartered banks have to come to this parliament for their charters, under which they are granted valuable and exclusive privileges, and as a result they have made and are still making millions of dollars of profit out of the people of this country. I do not think the Bankers Association played the game last year with this
parliament-they did not "play cricket"- because two or three months after the revision of the Bank Act was carried through by parliament, largely on the advice of the bankers themselves, large losses were written off by the Union Bank and the Standard Bank, the Bank of Hamilton was taken over by the Bank of Commerce, then came the failure of the Home Bank, and later La Banque Na-tionale was saved by the wise action of the government of Quebec. After all the assurances by eminent bankers that the Canadian banking system was absolutely sound, that government inspection of chartered banks was unnecessary and uncalled-for, and that everything in the Canadian banking world was perfectly satisfactory, it was a rude awakening for the people of this Dominion to find these assurances of the prosperous Bankers' Association were not borne out by subsequent events.
I repeat, the government should say to the Bankers' Association: "You must come across with such financial assistance as will take care of these unfortunate depositors of the Home Bank." And the association can do so if they want to. They have held up other weak banks, and have pointed with pride to their wonderful system which enables them to do this. Sir Edmund Walker wrote a little pamphlet on Canadian banking which was circulated at the time the revision of the Bank Act was proceeding, and dealing with depositors he laid down the following principles :
Under our banking laws, as is very properly the case, the claim of the noteholder is preferred to that of the depositor in the event of a bank getting into difficulties. .
We must not expect that any government will relieve a depositor from the necessity of using discretion as to where he places his money. Governments never have done and never can do that. Men must use their intelligence, and after measuring the security offered, judge where they should intrust their money. It is perhaps easier for a man with limited intelligence to make a selection if the banks have large capital and are of semi-national importance, provided, of course, the basis of the system is not unsound. In Canada, we do not obtain deposits from abroad, although we might not object to do so if money could be obtained at low enough rates of interest; and we do not lend on real estate. There are probably few countries in the world where greater security is offered to depositors.
His words were proved to be incorrect when a month or two later the country was shocked by the failure of the Home Bank.
There have been five revisions of the Bank Act since confederation, and amendments have been made from time to time to protect depositors and shareholders. But all to no purpose, as the Home Bank failure demon-
Home Bank Investigation

strates; losses still arise by reason, of gross mismanagement, and to-day the confidence of the public has been shaken in our banking system. Consequently it is now the duty of parliament to impose further restrictions to safeguard depositors on lines similar to those by which a few years ago noteholders were protected. To this end the Bank Act should be amended. The Bankers' Association say that depositors are voluntary creditors, while noteholders are involuntary creditors. In my opinion this 'is simply a distinction without a difference. Undoubtedly if the depositors of the Home Bank had been warned of the kind of directors to whom they had entrusted their deposits they would not have been voluntary creditors; they would have placed their money in the post office or in a provincial bank.
It is significant that the Home Bank used quite up-to-date advertising methods for the purpose of attracting deposits. For instance, in 1913 we find them using these axioms:
A dollar in the bank is worth two in the pocket. When in doubt, leave your money in the bank. Everything comes to him who saves his money while he waits.
Get the habit of learning to do without what you only think you want.
To make a dollar go further-put it in the bank. Dollars into riches run; not all at once, but one by one.
Never a borrower nor a lender be-unless it is to lend to your bank, by depositing your savings, and borrowing from the bank on good collateral at an equitable rate of interest.
People who live in mortgaged houses should not throw around their money.
Make haste to get rich slowly.
Spend carelessly and thrive miserably.
Banked money talks compound interest twice a year. On the average poverty is the result of bull-headed negligence.
Not only has the confidence of the public been shaken in our banking system and the Bankers' Association, but our courts are being subjected to considerable criticism. A large number of people in my city are disgusted with the manner in which the prosecution of the Home Bank directors is proceeding. The case has already been before several judges, and it seems likely to go to the Pricy Council before a note of evidence has been taken. For this reason the public are urging parliament to take action. Under our constitution parliament is the highest court in the land, and the people are urging, in view of the failure not only to hold an inquiry into the failure of the Home Bank but to bring the wreckers to justice, that up-to-date legislation be passed for the protection of depositors and also, that something be done in the premises to deal with the Bankers' Association.

I may say just here that I have received a petition from the depositors of the branch of the Home Bank in Toronto at the corner of Woodlawn avenue and Yonge street, signed by 1.372 persons. I wrote to the Canadian Bankers' Association last August asking that they do something for the depositors of the Home Bank, and I wish to read the reply which I received. It says:
. Edmund Walker's secretary has forwarded me your .otter of the 12th instant, addressed to me in Sir Edmund's care, in reference to Home Bank affairs.
The suggestion that the members of the Canadian Bankers' Association should take care of the probable losses of depositors in the Home Bank, while doubtless made with a desire to remedy an unfortunate situation, has not, if I may with respect say so, been considered m all its bearings. In the past the basis of the purchase by individual banks of the assets of weaker banks and the protection of their depositors, was that the assets purchased were at least of sufficient value to meet the demands of the depositors.
There is no legal or equitable ground, so far as I am aware, on which the shareholders of banks which have had prudent and conservative management should contribute out of their resources to make good losses which a bank imprudently managed has sustained If it were once understood that banks with prudent and conservative management were under obligation or were even likely to make good to depositors of a bank which closed its doors, all incentive to honest and careful management on the part of an executive with little sense of responsibility would be removed; capital would desert our banking institutions and the business of the country would as a result be seriously crippled.
These in my opinion are the probable consequences of the application of the doctrine that banks are guarantors of the deposits in every other bank I am, Yours very truly,
F. W. Taylor.
President.
Well, it would not shake the confidence of the people half as much as the closing of the doors of the Home Bank did. It would not shake the confidence of the country half as much as the representations made by this association in the pamphlet which 1 hold in my hand and which was distributed among members of the House. Let me read a few more paragraphs from this pamphlet. With regard to noteholders and depositors, it says:
The creditors of the banks consist of noteholders and depositors, one of whom may be classed as involuntary, the other as voluntary. When a bank bill is paid out in settlement of wages or accounts, the receiver does not concern himself about the bank of issue; all bills look alike to him in regard to their value... What of the depositor? What protection is extended to him? Before answering this question it is pertinent to repeat that noteholders and depositors stand in different positions. The noteholder is an involuntary creditor. In the course of business, selling goods or receiving wages, he has practically no option other than to accept the currency given him, and is therefore entitled to have that currency made sound and unchangeable in value.
He says that this is the only country in the world where the depositors have protection. Then there follows a supposed con-

Home Bank Investigation
versation between a farmer and a student of finance-the student, I suppose, being the Canadian Bankers' Association. Then further on there is a reference to the western farmers being misled by uninformed agitators. Well, I think this legislature was misled by a lot of uninformed agitators when members were told that a bank could not fail without the depositors being protected. Otherwise I do not believe this parliament would ever have passed the act giving them their charter. All the cards should have been laid on the table. Parliament gave to the Canadian Bankers' Association tremendously wide powers. - Let me mention a few of the purposes of the association as set out in the act of incorporation:
(1) to promote the interests and efficiency of banks and bank officers, etc.; (2) to establish sub-sections of the Association; and (3) to establish clearing-houses for banks, by-laws regarding which require the consent of the Treasury Board. More serious powers were those imposed by the Bank Act. When the banks undertook to guarantee the note issue of every bank they found that they needed the power to inspect the note issue records of each bank and some protection at the moment of the suspension of a bank. For these purposes the Bank Act gives the Association power (1) to appoint a curator to supervise the affairs of any bank which may suspend payment, until the resumption of its business or the appointment of a liquidator; (2) to supervise the issue of bank-notes, including the making, delivery and destruction of the notes, and the inspection of the circulation accounts of the banks; (3) the custody and management of the Central Gold Reserves; and (4) to impose penalties for the breach or non-observance of any by-law, rule or regulation made by virtue of the section of the Act in question.
So that to all intents and purposes the Canadian Bankers' Association to-day have the powers of parliament, and instead of having only a Senate and a House of Commons in this country we have a Senate, a House of Commons and a house known as the Bankers' Association. Among the vast powers given to them under the act is that of inspection. But they did not inspect; they led us to believe everything was safe. Now, they say that the depositors of the Home Bank have no claim, but in my opinion they have a good moral claim. This legislature is responsible for the position in which these poor people who have lost everything now find themselves. They put their money in the bank because they thought they were protected. Let me quote just here the words of the Right Reverend Bishop Fallon of London in this connection:	.
But how can this end be reached in the matter under consideration. By the simple method of making the banks collectively responsible for the money they accept as deposits. The banks borrow our money without other security than the charters the people give them; they pay no, or a very low, rate of interest. When they loan us our money they charge
us the highest rate of interest obtainable, and every shred of security that can be squeezed from us is rigorously exacted. We are actually made financial slaves by the very power of our own savings. And the bankers gamble with our earnings, and tell us to go whistle when the crash comes.
No	further faith	can be put in	those	who havebeen	hitherto our	financial guides.	They	have beenweighed and found wanting. And they know it themselves. We are now being told that the banks have	no objection	to " government	inspection," butthat	the government must bear	the	consequent
" responsibility." The people of Canada will not tolerate the placing of any such " responsibility " on their government, that is, on themselves. They shall demand an effective guarantee for their hard-earned savings, and they will look to the forthcoming session of the federal parliament to exact that effective guarantee from those to whom these savings are confided.
I had a resolution on the order paper, Mr. Speaker, asking the government to consider the advisability of assisting the depositors and of calling upon the Canadian Bankers' Association to that end, but the motion has been ruled out of order on the ground that it involves a matter of finance. In my opinion, if the Canadian Bankers' Association will not voluntarily come across with this money, their association should be assessed for the amount of loss sustained through their failure to carry out proper inspection and audits and to maintain a state of efficiency in the banking business. Hon. members of this House should put their heads together and see what can be done to bring about some active measure of relief for these unfortunate depositors, many of whom lost their all and can never get back to the position in which they were before. I hope that this parliament will take such steps as may be necessary to restore confidence in the banking system of the country, and will see to it that the Canadian Bankers' Association carry out the conditions under which they received their charter. I suggest that should they fail so to carry out those conditions, parliament should take their charter from them and vest those powers where in my opinion they should be vested, in the Finance department of this country.
Mr. FRANK S. CAHILL (Pontiac):	I
agree with much that has been said by hon. members on both sides of the House with regard to the desire on the part of every person that the Home Bank depositors should be reimbursed if it is at all possible. I am not one of those who believe that our banking system is the last word in banking; I think that some useful amendments could, be made to the Bank Act, amendments that would serve a good purpose in this country. Only a very few years ago we had twice as many banks
Home Bank Investigation

in Canada as we have to-day. We had then a much better banking system than we have at the present time. The smaller banks in Canada are gradually being absorbed by the larger until it is perfectly obvious that within a very few years we shall have not more than three or four very large banks in Canada, serving the people by a system of branch banks. I do not believe that that system will serve the people in developing this Dominion. The branch banks to-day are merely gathering points for deposits. These deposits in turn are sent on to head office for investment. It is quite apparent to any person who will study the Canadian banking system that it would be impossible for these branch banks to make loans in the country; the system will not permit it. Some of our banks have three or four, and some as many as seven hundred, branches throughout Canada. They select a boy from school in the country, put him in the bank as messenger, later on he becomes an accountant, and in a very few years he blossoms out as a branch bank manager, with absolutely no experience in any kind of business except book-keeping and the making up of interest. Under the present system of banking a branch bank manager can make a good showing for his branch by not lending one cent from his branch. He can do that in this way: If he can get sufficient deposits in his bank to forward to head office he will be allowed enough interest on that to show a profit in his branch, and he does not need to lend a cent out of his branch. The result is that the cautious boy adopts that course and sends the deposits to head office. The money that is deposited in the branch banks all over Canada is forwarded to head office, and head office makes the loan.
I did not agree with much that was said in the Banking and Commerce committee last year about the banks not wanting to make loans. It goes without saying that no bank can make a profit and succeed unless it does make loans, for the only way they make a profit is by making loans, and the only way in which you can obtain a loan under the present system is by going to head office, where the money is accumulated from the branches. As a result of this accumulation, head offices have from time to time made improvident loans, and the bank failures in Canada in the past have been caused by head office loans. The money accumulates at head office, and if they cannot make legitimate loans they do what was done recently in the case of-the Home Bank, make speculative loans where the ordinary business man would say they have no chance of recovering their capital. The Home Bank failure has 
brought to the notice of the Canadian people more forcibly than anything else the shortcomings of our banking system, but the Home Bank failure did not disrupt the business of this country to anything like the extent it was disrupted by the Merchants Bank fiasco. When the Merchants Bank closed its doors there were hundreds of thousands of customers and depositors who had to look elsewhere for their banking connection. They had to make new banking arrangements^ start all over again in the tedious business of building up a credit.
Let me say that I have no grievance against the bankers of this country. I have never in my life made an application to a bank for a loan that was refused. I could always get all the money I wanted from the bank, so I have no grievance on that score.


Mr. JACOBS:: Can the hon. gentleman
tell me how he did it?


Mr. CAHILL:: I shall be glad to, because
it will illustrate one of the points I want to bring out. After I had made a few loans at first, as my business developed and I required more money I did what everyone else does who wants to get a loan; I went to head office. You cannot get money any other way. The branches have no authority to make loans under the present system, and unless a man who wants to borrow money can get acquainted with the officials at head office his business is in a very precarious state, because he cannot get anywhere with the branches.


Samuel William Jacobs: How is it that no money
would bd' advanced to my hon. friend where he is best known and that he could get all the money he wanted where he was not known?


Frank S. Cahill: Of course, my hon. friend
knows as well as I do that every man has to be recommended by his home office before he can get to head office, so there is nothing in my hon. friend's contention. Apparently he is not able to get recommended at either place.
We are told that we have the best banking system in the world, that we have very few failures. I have been told repeatedly that in the United States this past year there were four or five hundred failures of banks. That would mean forty or fifty bank failures in Canada, in proportion to our population, and as a matter of fact we have had sixty or seventy bank failures in Canada in the past year. The failure of each branch of the

Home Bank Investigation
Home Bank is the failure of a bank just as much as the failure of an individual bank at any point in the United States. They have several systems in the United States, and I am not competent to speak with authority on any of them, but I do know that in some of the states where the branch bank system is operating-not on the same lines as ours but along similar lines-they have had more failures than in other states where branch banks are not permitted.
I believe that the motion of the hon. member for East Calgary (Mr. Irvine) is very good, but I think that instead of referring this matter to a special committee his motion, or something similar, should be referred to the select standing committee on Banking and Commerce, and I therefore propose to move an amendment:
That all the words after the word " That " be struck out and the following be substituted therefor:
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 shareholders of the 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 the 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.
I think that will serve the purpose better than my hon. friend's resolution.


Henry Lumley Drayton: I propose to support a motion which will enable the standing committee on Banking and Commerce to consider this question, not in the autumn-even if a special session is called for it, which we know will not take place-not next year or the year after, but this session. The amendment of my hon. friend (Mr. Cahill) simply means that the hands of parliament are to be entirely tied for an indefinite period. We may just as well cut out the camouflage and get down to facts. My hon. friend talks about the evidence to be got from trials and the like, the help that will be given to the committee. He asks the committee to wait until this royal commission has royally functioned, and he ties the hands of parliament just as absolutely and effectively as if the motion itself, was defeated. What is the need of the commission at all? What is the need of putting the question at all if the matter is
to be so determined? Why, the whole thing has been inquired into, threshed over backwards and forwards. And what is to prevent the banking committee at any time taking up any question on banking? The thing is a farce and is intended as a farce-that and nothing else. Wait until the trials? Why there is to be a case tided before the Privy Council some time this summer, in the early summer, to find out how these fellows are to be tried; then after all that you have to get your trials. Let us be honest about this thing. Let us start in by trying to be a little honest about it. We can have no action now-action of any and every kind would be impossible now-if that amendment is accepted. That is the way, Mr. Speaker, which this amendment strikes me. It rather carries on the whole game the government is playing in connection with this bank.
Let us start out with the first order. That first order is theirs. There is nothing in it except the attempt that was made to get the hide of Sir Thomas White nailed by somebody. That is all that is in it. Is there any suggestion that there was anything wrong-


William Lyon Mackenzie King: May I ask
my hon. friend a question? Does he intend by that remark to say that was the object of the depositors in presenting the petition which they did?


Henry Lumley Drayton: We will get
to that in a minute. I at least credit the government with some common sense and some knowledge of what they are doing. I credit them with that. I cannot credit them with this:	That they are so fatuous as to
think there was anything wrong with the Home Bank except those particular dates that they so particularly picked out.


William Lyon Mackenzie King: Who picked
out?-not the government.


Henry Lumley Drayton: My right hon.
friend asks me who picked out the' dates. Why, his very good supporter and a counsel of the depositors, Mr. W. T. J. Lee. He was the prime mover.


William Lyon Mackenzie King: The counsel
of the depositors.


Henry Lumley Drayton: Certainly that
is what I am saying; that is where it comes from.


William Lyon Mackenzie King: Let me understand aright. Does my hon. friend say that a certain gentleman took a position because he was. a Liberal, or because he was counsel for the depositors?
Home Bank Investigation


Henry Lumley Drayton: I say that a
certain gentleman, acting for this government took a position that was very convenient for the government to take.


Some hon. MEMBERS:: Order.


William Lyon Mackenzie King: I wish to state to my hon. friend that so far as this government is concerned it knew nothing whatever of the actions of the depositors in this matter, or of their counsel until they presented to the government the petition which the government has now placed before the commission.


Some hon. MEMBERS:: Take it back.


Henry Lumley Drayton: There is nothing to take back. I repeat. Whether it be an accident, or anything else, that was a most convenient position for this government. What does it mean? What object is there in it?


Mr. FORKE:: Do not get politics into
this thing, anyway.


Some hon. MEMBERS:: Hear, hear.


Henry Lumley Drayton: Well, the life
line is already thrown out, and it is grabbed enthusiastically by hon. gentlemen opposite. I am anxious that this House, Mr. Speaker, shall have its hands untrammelled in doting what it thinks ought to be done and doing it now, and not in some other day within the future, and I am just trying to trace exactly how this thing works out. Is it intended to help the depositors? One would hardly think so. If it was to help the depositors there would be a plain straight declaration on the face of the very order in council itself showing that the government was not committed in the slightest degree to help out a depositor to the extent of one single sou. Oh, no, that was not the intention. What was it done for?


Samuel William Jacobs: Would the hon. member
tell me if he is in favour of helping the depositors?


Henry Lumley Drayton: The hon. gentleman is seeking very anxiously to get information just at the time he wants it. I do not think he really wants it. Let us see. We have that order in council, and it is an order in council not for the purpose of ascertaining what is wrong with banks, banking and bank laws; not really what was the matter with the Home Bank but what was the matter with Sir Thomas White, and that is just about the last thing that any depositor is really interested in, unless the gov-fMr. Mackenzie King.]
emment had said to the depositors "Make a case out against Sir Thomas White and we will undertake to pay you." If that had been done we could at least understand the order.
Now, what is the next thing? The next thing we have is an amplification of this order in council, an amplification of the order to this extent: That the business of the Home Bank-mind you the business of the Home Bank

this time is to be inquired into from the time it gets its charter until it winds up. Why one of the matters is known to my hon. friend. I have myself drawn it to the attention of the Prime Minister. I tried to-day to get an answer and did not succeed. One of the matters that ought to be inquired into is the question as to whether or not this institution ever should have been allowed to function. We have the application one year, then we have the delays and the trouble, and we have the removal of the hand of the person whoever it was, who in the first instance said "This is an institution that ought not to function as a bank". That is something we do not get under this order in council, amended and extended as it is to-day. That is something I would have thought the standing committee on Banking and Commerce would have the right at any time to look into.
There is another question about this bank which is really not touched at all. After all the chief crime about the Home Bank is that it was allowed to smash. Oh yes, there ha,ve been representations -made to other ministers besides Sir Thomas White. Does anyone doubt it? Does not everyone know it? Why should we not know what representations were made in matters having to do not only with the bank business but having to do with the stand of the country towards keeping banks going? Why should we not get some information upon that point? That is another matter which is entirely outside of this order in council. That is some information as to facts and allegations placed before the government by the bank directors on their visit to Ottawa. That is entirely outside of this order in council. Oh, no; there may have been tremendous governmental mistakes that allowed a bank to crash, but nothing in the world is to be said about it, it is not to be inquired into.


William Lyon Mackenzie King: The order in
council was amended to include everything from the time at which the bank was created to the day of its failure. What does my hon. friend mean by saying that anything has been left outside of the scope of the inquiry?

Home Bank Investigation
I venture to say that if anything that touches this bank is outside the scope of the order in council it will be included.


Henry Lumley Drayton: I do not know
what the trouble is with my right hon. friend, but I think I put him a pretty plain question not so very many days ago. I thought I repeated it here only to-day. He says everything is included. Why he knows the very question as to the incorporation of the bank is kept out and is not included.


William Lyon Mackenzie King: May I say to my hon. friend right here that his remarks to-night have been directed along the line that this inquiry is going to take too long. The government, when it instituted the inquiry, took what the depositors were most interested in and desired to have looked into, and referred that to the commission, hoping they would get through with it as quickly as possible. It was thought that by confining it in that way it would not take so long.


Henry Lumley Drayton: My right hon. friend-


William Lyon Mackenzie King: I am trying to answer my hon. friend.


Henry Lumley Drayton: I will let the right hon. Prime Minister answer any question he likes, but I have been waiting to get from this government some notion as to what their ideas were, but have not heard a single word, and now when I try to say something the hon. Prime Minister tries to make a speech.


William Lyon Mackenzie King: I tried to answer the question as to whether or not the very points he speaks of should be included, and I have given him the reason why the order in council was framed as it was at the time. It was enlarged to bring the matter up to the time the bank failed. With regard to what happened before the bank was created, the circumstances that brought it into existence, I do not hesitate for one minute to say that the government will ask the commission to inquire into that point as well, if that will satisfy my hon. friend.


Henry Lumley Drayton: We have made a little progress. We have got something else from the government. Let us see if we can make some more progress.


William Lyon Mackenzie King: It is all going to take time.


Henry Lumley Drayton: Will the hon. Prime Minister give us now, if he has them, the representations made by the directors who were here begging government assistance? He has got them.


William Lyon Mackenzie King: I do not know what representations my hon. friend has reference to, but any representations made to the government will be placed before the commission, whatever they are and wherever they are.


Henry Lumley Drayton: What I am referring to I think my hon. friend understands.


William Lyon Mackenzie King: I do not.


Henry Lumley Drayton: I refer to the representations made by the directors who came to Ottawa for the purpose of acquainting the government with the situation, and the statements made by them, the action taken by the government in allowing the bank to go, and their reasons for it. Now, none of these questions, Mr. Speaker, is covered by that order in council, and if there is anything that is vital for us to know, it is just exactly what happened at the windt-up, to see if anything could be done, for it is possible that something could be done. It has been done. My hon. friend knows it has been done. It is something that is possible. After all, the function of a government is to uphold banks, rather than to let them go in the discard.


Samuel William Jacobs: Even if they are rotten to the core.


Henry Lumley Drayton: My hon. friend says "Even if they are rotten to the core". Banks have been saved which have been pretty rotten, and my hon. friend can find that out very, very quickly and very, very closely, and if there is anything that I am certainly not ashamed of, it was the action I took in saving that institution.


Mr. ROBB:: What institution?


Henry Lumley Drayton: We all know that-


Edward Mortimer Macdonald: What
institution does the hon. gentleman mean that he saved?


Henry Lumley Drayton: I do not know that I can add to my hon. friend's information on the point.


Edward Mortimer Macdonald: I did not catch the institution he referred to.


Henry Lumley Drayton: I cannot add to my hon. friend's information.


Edward Mortimer Macdonald: My hon.
friend did some wonderful thing and will not tell us about it.
Home Bank Investigation


Henry Lumley Drayton: My hon. friend knows it is going to take a long time for any commission to go into the matter and to report. If we do not know that we are just as foolish as the right hon. Prime Minister thinks we are, but I do not think we are quite so foolish. I think we know that it is going to take a long time, and that it means there will be no action taken one way or the other.
I do not for one minute identify myself with many of the remarks made by the mover of the resolution'(Mr. Irvine). I think he is all wrong. But there is one matter I want to identify myself with, Mr. Speaker, and that is that the worst thing that can be done to our financial institutions at the present time is the maintenance of a smoke screen and keeping up a situation which will not admit the fullest discussion and the brightest light of day. And the way to get it and the way to have it, to my mind, is before the Banking committee without restrictions. Why should this parliament shackle the Banking committee with a resolution of this character? I say I do not agree with ground taken by our hon. friend from East Calgary (Mr. Irvine). I think he is wrong. Take for example, what he says as to the assets of the banks of Canada, and what he says as to the 12 or 15 per cent-I forget the figure he gave,
I think it was 12-of excess of assets over liabilities. Then in a subsequent sentence he said that that was only arrived at including bad debts, frozen credits, bank premises, and so forth. My hon. friend is quite wrong. That means that the banks, after every possible allowance is made, find themselves in that position. My hon. friend again is wrong. It is idle to say that there are no liars; but because we find a liar here-


Henry Lumley Drayton: It would be absolutely wrong to say that they were all liars over there. Some of them may be honest and I think they are. Just in the same way, it is ridiculous to say that because there is one thief, everybody else is a thief. We know that is not so. Because one bank is improperly run and managed, it is ridiculous to say that the rest are the same, or that simply because one bank goes wrong, all are to be suspected. My hon. friend goes too far altogether. He says that he wants to put Canadian banking upon a proper basis in order to restore confidence. His speech this afternoon, if taken seriously, would go a long way to dispel any possibility of confidence.
There is another point, and I think if my hon. friend looks into this, he will see the

fallacy of it. In one part of his speech he tells us that the banks are in this deplorable condition. In the next part of his speech he takes the position that the banks are so well off and prosperous that, without affecting their depositors or the interests of their shareholders, they can afford to shoulder the whole burden. My hon. friend is wrong there. He is right in this-that it is always better to have open and free discussion. The bank that ought to be respected has nothing to hide. Therefore, the position that I take is, in short, this, that any investigation into the Home Bank ought to be full and thorough; it ought to have to do, not only with its governmental connection during a certain period of its lifetime, but most particularly with its birth, and then, a great deal more emphatically and particularly, with its death. Further, if anything is to be done in connection with this matter, it is a great deal better that it should be done now. Why leave in the public mind the suspicion that people are giving voice to, that members of this House are giving voice to, as to the solvency of our institutions?


Mr. McCONICA:: In the opinion of the hon. gentleman, would it be possible for the Banking committee or any other select committee during this session of Parliament to investigate fully the affairs of the Home Bank and to come to a definite conclusion as to its condition at the time it was formed, as to the maner in which it conducted its business and as to the shape in which it was when it went into liquidation?


Henry Lumley Drayton: They can do that at least as quickly as any royal commission, and there is no reason why they should not get to work, stick to it, and do it.


Thomas Henry McConica: They cannot finish it.


Sir HENRY DRAT  TON@: I do not know why they could not or should not. In any event, they will have to do it sooner or later. Whatever work is done by any royal commission, if anything is wrong, has all to be done over again before that committee. No measure of relief or change in the law can be carried out by the commission. Any fences that are found to be down cannot be re-erected by the commission. In any event, the work has to be done by the committee. If the government wants to have the commission running around, all right; but if we are really serious about this, we should say one of two things: Either that because there is a royal commission, nothing is to be done until that commission reports in so many words-and that means that we shall do nothing this year-or we should reject the amendment

Home Bank Investigation moved by the hon. member for Pontiac (Mr. Cahill). '


Edward Mortimer Macdonald: Mr. Speaker, I think
the admission of my hon. friend the former Minister of Finance (Sir Henry Drayton) is one of the most peculiar utterances ,t we have ever heard in this House on a serious question. Altogether it is rather a unique situation that an hon. gentleman speaking for the opposition should have been a Minister of Finance of this country during a period in which he ought to have known something about this bank. It is generally understood that my hon. friend had in his possession certain information that had been given to Sir Thomas White in previous years, and I think many in this House would view with some suspicion this attempt to sidetrack a deliberate effort which I believe the House will appreciate on the part of this government to find out the true facts in regard to the whole situation and to take action immediately those facts are found. That is the policy of this government. Imagine my hon. friend intimating to this House that the sole purpose of the organization of the commission was to get after Sir Thomas White. That is a peculiar statement, and one which my hon. friend knew, when he made it, had no warrant in fact.


Henry Lumley Drayton: My hon. friend says I made a statement which I knew to be untrue when I made it?


Edward Mortimer Macdonald: No.


Henry Lumley Drayton: What did he
say.


Edward Mortimer Macdonald: No warrant in fact. That is what I said.


Henry Lumley Drayton: He said that I
knew it had no warrant in fact. I now ask for a ruling from the Chair whether that is a parliamentary expression.


Hewitt Bostock: I think the Minister of
National Defence said that what had been stated by the hon. gentleman was not warranted in fact. I did not catch the words "that he knew."


Henry Lumley Drayton: "To my knowledge."


Arthur Meighen: The Minister of National Defence said, and very emphatically, that the hon. member for West York (Sir Henry
Drayton) had made a statement which, at the time he made it, he knew had no warrant in fact. That is a distinct violation of the rules, even though supported by the laughter of hon. gentlemen behind.


Edward Mortimer Macdonald: Do I understand that my hon. friend says that he did not know that there was no warrant in fact for his statement?


Henry Lumley Drayton: I have asked for a ruling.


Hewitt Bostock: No hon. gentleman can
impute motives, and if the Minister of National Defence said that the hon. gentleman knew that the statement was not warrant in fact, that is not parliamentary.


Edward Mortimer Macdonald: I will say
this, that if my hon. friend did not know it, he ought to have known it, because if my hon. friend had taken the slightest trouble-


Henry Lumley Drayton: I would ask the Chair to request the hon. member to withdraw his statement.


Hewitt Bostock: I will ask the hon. gentleman if he will withdraw that statement.


Edward Mortimer Macdonald: Certainly. And I will show this House before I finish the few remarks I have to make that my hon. friend ought to have known there was no warrant for that statement. He knew there was presented to the government a petition from-


Arthur Meighen: Mr. Speaker, I rise to a point of order. The rule is of no avail whatever if that is to be considered a withdrawal. I ask again for a ruling as to whether anything the minister has said is a withdrawal in any sense whatever.


Hewitt Bostock: He has withdrawn the statement. He made a sign.


Arthur Meighen: I did not hear it.


Mr. DUFF:: Yes, he withdrew the statement.


Edward Mortimer Macdonald: Certainly.


Arthur Meighen: If the minister says he has withdrawn, I am satisfied.


Edward Mortimer Macdonald: Certainly. My hon. friend from West York (Sir Henry Drayton) knew that there had been a petition presented to the government on behalf of sixty thousand depositors who had lost their money in the Home Bank. That petition was

Home Bank Investigation
presented by a representative delegation of men from all parts of the country, from British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Quebec. It was in the following terms:
To His Excellency General the Right Honourable Lord Byng of Vimy, G.C.B., G.C.M.G., M.V.O., Governor General of the Dominion of Canada, in Council.
The petition of the undersigned members of the Executive Committee of the depositors in the Home Bank of Canada, humbly sheweth:-	.
(1)	Your Petitioners are residents of various parts of the Dominion of Canada and are the duly appointed executive committee representing about sixty thousand depositors in the Home Bank of Canada.
(2)	The said Bank was a Chartered Bank doing business under the provision of the Bank Act. Your petitioners are informed and believe that in the years 1915 and again in 1916 and in 1918 representations were made to the Department of Finance of the Dominion of Canada respecting the condition of the Home Bank of Canada and revealing a state of affairs that would have justified an investigation by the Department of Finance under the powers conferred upon the Minister of Finance under Section 56A of the Bank Act, whereby he was authorized to examine and enquire specially into any of the affairs or business of the Bank.
(3)	Your Petitioners realize the seriousness of such action on the part of the Minister of Finance, and that the mere fact of causing an audit to be made might in itself bring about the failure of the said bank.
(4)	Your Petitioners are also aware that at the time such representations and disclosures were made, the Country was at War and that the Minister of Finance, having regard to the public interest, was unwilling to precipitate a bank failure or crisis, or in any way disturb the financial condition of the Country, and that for such reason and on other good and sufficient public grounds, may not have deemed it advisable to exercise the power above referred to.
(5)	If such audit had been made your Petitioners believe that the condition of the Bank would have been shewn to be such that its continuance in business could not have been further permitted.
(6)	Your Petitioners believe that if the said Bank had ceased doing business at the time the said disclosures were made the then existing assets would have been almost, if not quite sufficient to meet all claims of creditors, whereas, by reason of the Bank continuing in business until the 17th day of August, 1923, and greatly increasing the amount of money belonging to the public on deposit, and at the same time permitting the assets of the said Bank to be greatly diminished in proportion to the amount of the deposits, the present depositors have suffered and will unless relief is granted, suffer a very severe loss.
(7)	Your petitioners submit that the reasons an audit was not made of the said Bank, in accordance with the powers vested in the Minister of Finance, were reasons of a public and national character, and intended for the benefit of the public at large, and that therefore the loss to the present depositors occasioned by the Bank being permitted to continue to do business should be borne by the public at large and not by the present depositors.
(8)	The said Bank and its predecessors. The Toronto Savings Bank and the Home Savings and Loan Company had for over fifty years been regarded as a safe depository for the savings of the public and the class of people who deposited their money in the said Bank was largely composed of wage earners with small earnings and their deposits consisted in many cases of the whole savings of a life-time.
(9)	Your Petitioners submit that the confidence of the simple people throughout Canada in the banking

institutions of the country is of the very greatest importance to the industrial and commercial interests of the country and that the lack of such confidence would have a serious and detrimental effect on the whole industrial and commercial prosperity of the country.
(10)	Your Petitioners therefore submit that whether rightly or wrongly the depositors of the Home Bank of Canada were largely of the opinion that the Finance Department of the Govermnent of Canada exercised such supervision over chartered Banks that it was impossible for depositors to lose their savings entrusted to such a bank the charter of which had been renewed from time to time by parliament and it is further submitted that the confidence of the people as a whole would be greatly restored if adequate relief were granted to these depositors.
Wherefore your petitioners pray that your Excellency be pleased to submit to Parliament an Act for the full indemnity of the depositors of the Home Bank of Canada against any loss suffered by reason of the failure of the said bank.
And your petitioners as in duty bound will ever pray. Dated this 23rd day of January, 1924.
W. T. J. Lee.
Edgar C. Sanders,
R.	M. G. Anglin, E. H. Cleary,
W. A. Dover,
J. A. Sinclair, Henry Winfield, Arthur English,
S.	S. Henderson,
H. H. Higginbotham, A. B. Campbell,
Paul Poisson,
A. G. Browning, W. T. Kernahan. J. H. Mitchell. J. C. Brudy,
J. O. Reilly,
J. F. Edgar,
J. P. Greacy,
W. A. Buchner, J. I. Weedon.
The delegation which presented that petition, made up, as I have said, of representative men from all parts of the country, alleged that in the years mentioned in the petition the attention of the then Minister of Finance, Sir Thomas White, had been called to the condition of the bank, and they asserted that instead of performing his duty under the provisions of section 56a of the then Bank Act, he made no audit such as was contemplated, and that had he taken this course a situation would have been disclosed which although it would probably have caused the failure of the bank, would have enabled the depositors to be reimbursed. That was their case. Therefore they claimed that on principles of justice and fair play they should be paid their deposits. They presented for the consideration of the government an interview which was given by Sir Thomas White to the Canadian Press, in which he admitted that he had received representations in regard to the bank, but gave the war and other reasons-I need not quote the interview in detail; most of it is unquestionably known to hon. gentlemen-as his justification for not having an audit made.
Now, I leave it to the judgment of every hon. member as to what was the duty of this government under the circumstances. Would the government have been justified, without any investigation, in asking parliament to vote the money necessary to compensate the

Home Dank Investigation
depositors for their losses? If, without a full and complete investigation, they had done so, then they would have been making (he Treasury liable not merely to those who lost money in the Home Bank, but to those who had lost money in the Farmers' Bank and in all other bank failures which had occurred in the history of the Dominion. Well, what was to be done? Was not the most natural and ordinary thing to do to make an investigation into the truth of the allegations set out in the petition? It was when we decided to make that investigation, in making which my hon. friend says, we were taking a political course entirely in order to get after Sir Thomas White.


Henry Lumley Drayton: Hear, hear.


Edward Mortimer Macdonald: In the face
of the petition presented to us, does my hon. friend mean to say there was any other course open to the government than the course we adopted of ordering a judicial investigation?


Henry Lumley Drayton: Certainly.


Edward Mortimer Macdonald: Mr. Speaker, what was the course adopted by the government of Sir Robert Borden in 1912, when allegations were made by the depositors of the Farmers' Bank which had recently failed with regard to the circumstances under which its charter was granted? Sir Thomas White himself was the finance minister at the time, and he and his friends cannot now complain if we have followed what he then recommended-Sir Thomas White recommended to Council the appointment of the late Sir William Meredith, then Chief Justice of Ontario, to examine into the truth of the statements contained in the petition. We have taken the same course to-day.
Then when parliament meets my hon. friends opposite say:	"Oh, you are not investigating this thing completely enough." Well, we started out to do what the depositors wanted us to do. We took the position that if the statements contained in their petition were proved to be correct by the Chief Justice of New Brunswick, a jurist of high repute, then the government would be bound to take some action in regard to the matter. But my hon. friends come along and say:	"We don't want to find out what
these depositors want to find out; we want everything investigated from the beginning to the end."


Henry Lumley Drayton: If the government was so anxious to do just what the depositors asked, may I ask whether this sentence was put in at the request of the depositors:
-without in an way accepting the view that in the circumstances mentioned it is proper for the government to expend public moneys in the relief of the depositors of the said bank.


Edward Mortimer Macdonald: I have no doubt that the same clause was inserted in the order in council appointing Sir William Meredith. We were not going to prejudge the case; by that statement we simply reserved to ourselves the right to act upon this matter when the commissioner reported. If we were to decide in advance that we were going to pay the money without any investigation, then-


Henry Lumley Drayton: You are having an investigation.


Edward Mortimer Macdonald: My hon.
friend knows that very well. We simply reserve our judgment until we have an investigation made by Chief Justice McKeown into the allegations made by the depositors. If we find that those allegations are true, then the government will have to consider what course to pursue. We appointed a commission; the commissioner has made full arrangements; he has given up his circuit in New Brunswick and begins his hearings in Ottawa on April 16. He is prepared also to go to Toronto in order that full evidence may be heard. Was there anything wrong in our course up to that point? Did a single depositor find fault with us for taking that course? What other course could we have taken? If the commissioner had had nothing else to do than inquire into the statements made in the petition, there is no reason why we could not have had a report from him within a very short time. But my hon. friends come along and they want all sorts of things inquired into, which may not have the slightest relevance to the question whether or not the country should contribute any money to the depositors. The depositors have made their case; they have submitted their argument, and we are finding out the facts. We are prepared to act either on an interim report or upon the final report when presented, which we hope will be at the earliest possible day.
The hon. member for West York (Sir Henry Drayton) to a certain extent is involved in this matter. As a result of the representations made by hon. gentlemen opposite, the powers of the commissioner have been extended-
-to an investigation of the affairs of the said bank during the whole interval between the issue of the bank's charter and the failure of the said bank, including any representations made to the government of the day, as to its condition, any action taken by any of the ministers of finance upon such representations as may have been made, and the effect on the position of the depositors of any audit under Section

Home Bank Investigation

56a of the Bank Act if made at any time in consequence of such representations.
So my hon. friend's conduct as Minister of Finance comes under review before the commission.


Henry Lumley Drayton: Not in the first order, but in the one we wanted.


Edward Mortimer Macdonald: My hon.
friend did not know what he wanted.


Henry Lumley Drayton: Yes, he did.


Edward Mortimer Macdonald: He did not know anything about the order until we brought it here. He talked about having wide investigations. We are willing to have wide investigations-anxious to have them. But we do not want the case of the depositors as presented to us-and because it involved Sir Thomas White we are told we are playing polities in investigating the matter-to be imperilled or interfered with; we do not want anything to prevent its full consideration by the commissioner and his early report thereon to the government.
Now, my hon. friend, speaking of the amendment of the hon. member for Pontiac (Mr. Cahill), said that it meant that nothing could be done, that parliament was tying its hands until the result of the criminal actions was known. Probably my hon. friend made that criticism simply on hearing the resolution read, and did not know just what the effect of the resolution was. In other words, he made a hasty criticism of it-and that is speaking very kindly. As I understand the resolution of the hon. member for Pontiac, it deals very fully and completely with the proposal that was brought before the House to-day by the hon. member for East Calgary (Mr. Irvine).
What did the hon. member for East Calgary propose? His motion is:
That, in the opinion of this House, a parliamentary committee should be appointed immediately to investigate the Home Bank failure, with a view to discovering any weaknesses in the Bank Act which may be amended to prevent a similar occurrence: to devise some means of protecting depositors generally: and to make recommendation as to the possibility of saving the Home Bank depositors from loss.
The resolution of the hon. member for Pontiac deals with the three matters that are referred to by the hon. member for East Calgary; He recognizes the fact that investigations have been made by the curator; that investigations have been made at the request of my hon. friend, the Acting Minister of Finance (Mr. Robb) that other information is obtainable from the investigation made by the Attorney General of Ontario; that the commission which we have

appointed is proceeding to function; and that the evidence taken before that commission will be available day by day to go before the Banking and Commerce committee. My hon. friend suggests that an inquiry by a commissioner will take longer than an inquiry before a parliamentary committee, But hon. gentlemen should remember that the commissioner in this case is a judge who will sit every day from ten o'clock in the morning until the usual time for the closing of the day's proceedings, and he will be attending to the one task of ascertaining the facts in connection with the allegations made by the depositors in their petition. That is his business; that is his duty. How can a committee of the House of Commons sit except in the mornings for an hour or two? How can they give full attention to this matter with hon. gentlemen giving consideration to the other important questions that come before this House? What possible attention could be given to details except by the retaining of counsel and all that kind of thing? Any gentleman who has had experience in regard to inquiries the purpose of which has been to ascertain the truth in reference to public questions will realize that a trained jurist who devotes himself exclusively to the task of getting at the truth will do so more effectively than a parliamentary committee which can only sit occasionally and do desultory work. So that as I understand the resolution of the hon. member for Pontiac, there will be committed to the Banking and Commerce committee at once the task of considering this question of the Home Bank failure, of considering the evidence adduced before the commission and of obtaining it day by day as it is given. With that evidence before them they can proceed to make such recommendations as they deem wise and which can be crystallized into legislation for the purpose of preventing a condition of affairs from arising in the future similar to that which has arisen in connection with the Home Bank, and for the purpose of protecting the rights of depositors in the future. The motion also provides that when the report of the commissioner is presented-which the government hope will be well before the conclusion of this session-the committee on Banking and Commerce will have the right to consider it and to deal with the question whether something should be done to assist the depositors in the matter of their losses. I submit that the resolution of the hon. member for Pontiac is one that ought to commend itself to the judgment of every hon. member of this House who is anxious that the interests of the public shall be protected and

Home Bank Investigation
that a full and proper inquiry shall be made into this matter. And that inquiry should first be into the facts alleged by the petitioners,-let us never get away from that; hon. gentlemen may talk about paying these losses, and it is right that they should talk about it. But when we come to consider how this matter was first initiated and brought to the attention of the government; when we remember that representatives of 60,000 depositors, who had made their organization and retained counsel, came to the government and made requests based on a certain statement of facts, I submit, Mr. Speaker, that this House will agree that this government did the wise thing in endeavouring to find out first as to the truth of the facts alleged, and the government will be prepared to act. The committee will be asked to consider the findings made by the commissioner dealing with that particular matter. It should be the first matter submitted to the commissioner.
That is the situation, Mr. gpeaker. What more could this government do? Every hon. member that sits in this House knows of hard cases that have arisen wherever the Home Bank had an agency. Pathetic stories have come to us all, of the widowed mother left alone with no money, and of organizations that have lost all their funds. Sad cases are to be found all over the country, and I am sure that every hon. member of this House approaches the consideration of this question in a most sympathetic way. I think I can speak for my colleagues as well as myself when I say that we all do so. But we want to have the matter dealt with on proper business lines. We want to have findings made by a proper tribunal, to be submitted to this House.
It is alleged that there were certain peculiar circumstances in connection with the Home Bank which were responsible for its failure. It is alleged that those circumstances were such that in the interest of the country and as a matter of fairness and justice this parliament should reimburse the depositors. It is alleged too that the circumstances in this case are different from those which existed in the case of any other bank that failed, but unless it is shown that that condition existed, in what different position are the Home Bank people from those of any other bank that has failed ever since confederation? We want to find out what the facts are, and I think we are taking the most effectual way for the purpose of getting the facts, and the government will act in this matter. The desire of the government is that the commissioner should proceed with the greatest possible speed in dealing with this question. '
It has been suggested by somebody that this government have some reason for not wanting a full investigation. As the Prime Minister has said more than once, there is not a single item in connection with this Home Bank from the period previous to the granting of its charter down to the last moment but what this government is fully prepared to have investigated. But I want to say to hon. gentlemen that those who desire to have speedy action taken in this matter do not want to have a herring drawn across the trail, as the ex-Minister of Finance (Sir Henry Drayton) attempted to do to-night in order to mix this matter up. Let the commissioner deal with this question of the request of the petitioners and report, and then let us have the fullest possible investigation of all the doings of the finance ministers during the life of the bank.
I just want to make one point more. It is alleged here that Sir Thomas White has given as a reason that he did not have the audit made which was contemplated under the old Bank Act the fact that we were at war and the danger to public credit by proceeding at that time. Now, when a duty is imposed on a minister of the Crown under a statute he is bound to carry out that duty, and if the statute does not create some exception which would enable him to evade responsibility, then he should proceed to carry out his duty. It does not make, to my mind, the slightest difference in the consideration of this question as to what reason Sir Thomas White gives why he did not act. The statute says that he could act, that the audit could be made, and he has not made the audit; that is the situation. You may excuse, you may explain, but you cannot justify. If there was given to Sir Thomas White in 1916 and in 1918 evidence from responsible and competent sources which required action on his part, it does not make a bit of difference whether the country was at war or not; I submit he should act under the statute. I only mention that because we have had discussions in this House as to whether he should or should not have acted in view of the fact that we were at war. There is nothing in the statute that exempts him or excuses him for not acting in case of war or in any other case.
Now the question before the House, Mr. Speaker, is this. Approaching the consideration of this matter, as I am sure hon. members do, or ought to do, from a sympathetic point of view, and having regard to the general interests of the whole country. I do submit that the course which the government has adopted will result in a more speedy inquiry, an inquiry which will be
Home Bank Investigation

complete and full, and which will give to the House and the country a report and information upon which we can act. The amendment of my hon. friend from Pontiac (Mr. Cahill) will * give full and complete authority to the Banking and Commerce committee to go into this whole question and enable them to report to parliament their recommendations in regard to this whole matter.


Mr. JOHN MORRISON (Weyburn):: Mr. Speaker, I wish to take a non-partisan stand in this debate to-night. I submit, Sir, that what is most needed to-day is the restoration of confidence in our banking institutions. To-day throughout the country business is stagnant, and men are not sure just where they are at. .1 am sorry to see this debate develop into such a partisan squabble as it has to-night.
I submit, Mr. Speaker, that it is the func-^ tion of government to provide a sound monetary system for the country. If a government sees fit to do that by proxy, it may; but I do think that a government cannot delegate its moral obligations to banks. The government has a duty to the people which it can only discharge by providing a sound, monetary system and a thorough banking system which will be absolutely safe.
The hon. member for Kindersley (Mr. Carmichael) said that he was against the government reimbursing the depositors of the Home Bank because it would create a precedent, and other hon. members have taken the same view-a precedent that would be very costly to Canada. I wish to state that such a precedent would not be as costly as the repetition of bank failures has been. Some change is very, very necessary. The annual reports of our banks for the last two years have all been such as would lead the public to believe that they were all absolutely sound, and yet a number of them were in considerable difficulties. What confidence can be expected to be placed in the other banks more than in those that have been proved to be in difficulties?
Last year when the Bank Act was under discussion the banks used all their powers, which were many, in resisting the attempts of some hon. members to provide for government inspection of the banks. Now we have the evidence that some other system of inspection than prevails at present is very necessary in the interests of the banks themselves as well as of the people.
I do not think the comparison of the Farmers' Bank with the Home Bank is a fair one, as the government knew in 1916 the Home Bank was not in a sound condition.
IMr. E. M. Macdonald.)
Sir Thomas White, it is alleged, said that it was not in the public interest to permit a bank failure. I think he meant it was not in the public interest to admit a bank failure. If the Home Bank was wrong at that time, which we have every reason to believe, if it was really broke then, and that knowledge was kept from the public, I do not see why this $11,000,000 loss should be saddled on the shareholders of the Home Bank. Some say it will be eleven millions that Canada will have to shoulder and that we cannot afford it. We can afford to stand the loss of such a sum much better than the depositors can. Eleven million dollars sounds like a lot of money. It is a lot for the few depositors of the Home Bank to lose, but it is not too big an amount for all the people of Canada to pay; and if it was lost in the interest of the Dominion as a whole, if it is to be regarded practically as a war measure, then it is right that we should should*- the burden and not place that obligation on the shoulders of a few. The country is engaged in looking after the returned men and providing for them, loaning them money and financing them, because of the sacrifices they made during the war. If the sacrifices of the depositors of the Home Bank can also be regarded as a war measure, and the people of Canada benefited therefrom, I think the Dominion should come to their assistance and assume the burden.


Mr. A. F. HEALY (North Essex):: The
constituency I represent is vitally interested in this question. At the time of the Home Bank failure we had five branches with $1,120,000 on deposit and 4,000 depositors. Now, up to the moment the hon. member for West York (Sir Henry Drayton) spoke this debate had been carried on absolutely free of any political complexion of any kind. I am sorry indeed to see any hon. member of this House attempt to make the just claims of the depositors of the Home Bank a political football. No good can come from taking that attitude and I, for one, say, Mr. Speaker, that whether the charter was granted wrongfully, whether any minister of finance or officer at a later date did something, or did not do something, that he should have done is not the question that interests the depositors of the Home Bank. I have no desire to attempt to attach blame for the failure of the Home Bank to any one, or to any party; but I do say that in my opinion in seconding the amendment to the resolution I have taken the best course to protect the rights and interests of four thousand of my constituents. If it can


Home Bank Investigation
be shown, and if it is shown, that something was not done that should have been done, and for that reason this case is entirely different from some of the other failures and that it was for the benefit of the general public or for the benefit of the Bankers' Association, then I think these depositors should be paid, and paid in full.
Now, what is the best and quickest way to get relief? Are we to throw this question into the hands of a committee who can summon witnesses from all over, or is this committee to sit and duly accept the evidence that is submitted before the commissioner and duly to consider these points, and *at any time bring in a recommendation to this House? The committee may not have to wait until the final report is in before making a recommendation. If the hon. member for West York is prepared to move to-night that these depositors be paid at once without any further investigation I will support his motion. But surely no member of the House is prepared tonight to take such an attitude. If the depositors are to be paid the question comes up, who should pay them? I claim that the members of the Bankers' Association, in cooperation with the government, should pay the depositors, for the reason that if anyone was saved by the action of the then finance minister it certainly was the chartered banks of Canada. On whom would have fallen the first loss? On the chartered banks. For that reason these banks should take an entirely different attitude from what they are pursuing in this situation.
From time to time last year I attended the sittings of the select standing committee on Banking and Commerce when they were considering the Bank Act. I was not a member of the committee, but I found an atmosphere there that should not have existed. When the representatives of the people were attempting-and they do not pretend to be experts; none of us are financial experts-to amend the Bank Act I found an atmosphere of war existing, an atmosphere of war between the banks and the people of Canada-that was what existed at the sitting of the committee on Banking and Commerce. When I went there I viewed a circle of the highest-priced counsel in Canada surrounding the representatives of the people, and I felt that they were being surrounded by a bunch of high-priced gunmen. Why, some hon. members were almost afraid to open their mouths before that committee.


Mr. GARLAND (Bow River):: Not all of them.


Albert Frederick Healy: That is not an atmosphere that should exist in this country. We are groping for light in this situation. I will admit that I would not be able to give a suggestion, because I am not an expert in banking; but I do say that from the bankers of this country a group can be got together, and a very small group, that in a very short time can show the people of this country how their savings can be ensured. The bankers of this country are the only people who can do it and do it safely. Therefore, they should co-operate with the representatives of the people, and bring the suggestion here so that we can put it in the form of legislation. That is one point.
Another point is that there should be a different method of inspection. It should not be government inspection but inspection of banks by banks. The bankers of this country can form a corps of inspectors, comprising expert government representatives whose inspection could be so thorough that it would be impossible for a single cent to be lost by the depositor, because before the capital employed in the bank would be used up from the knowledge that these men would have the bank would be closed and loss to the depositors saved. Therefore I say that with that inspection it is possible to ensure deposits. In bringing about that desirable result I am asking the co-operation not only of the bankers but of every member of this House and of every party. By carrying out this suggestion, we shall be doing what I believe the people are to-day demanding of their representatives.


Arthur Meighen: I desire only to add a few words at the present time to what has been said, chiefly with a view to making more clear-and placing if I can in a fail light before the House-the position of Sir Thomas White, not now a member but formerly Minister of Finance.
May I commence by saying that I have never been disposed to assume an attitude of hostility, either to the depositors on the one hand or the government on the other, in relation to this matter. I have had many delegations-well, not many but some-wait upon me up to the time of the issue of the first commission which is under review to-night, and I fancy if any of those delegates are interviewed they will say that I expressed no criticism whatever of the relationship of the government to the bank. I have had some experience in matters of this kind and I know how difficult such a situation is for an administration. I was, however, astonished
IInine Bank Investigation

when the terms of the commission were first announced. I may be wrong but I think I can divine to-night the hand that wrote the commission. I think I see behind the throne in this matter the instigator of what was intended to be a purely partisan investigation designed to injure a political opponent. Let us look over the history of the matter. The bank failed in the month of August. Many depositors over the length and breadth of our country were ruined. Others were nearly ruined. Widespread distress prevailed. People in distress are not disposed to be quite as fair-minded as they would be under other circumstances. They are disposed to grasp at anything at all that can be elevated into a complaint or a greivance, and to seek to build thereon a claim to be recouped. In doubtless this state of mind those who suffered most, the depositors, came to the government. They alleged that at a period in the prior history of the bank certain representations had been made impeaching in some way the integrity of the institution, and they alleged that had certain action then been taken the failure which they admitted would have resulted would have been less disastrous than now is the result, after some years delay. One would imagine that they had gone much further, to listen to the words of the Minister of National Defence (Mr. Macdonald). One would have imagined-indeed, he stated in so many words-that they had asked for an inquiry into allegations of negligence and breach of duty, and that the government had simply acceded to their demand in granting the inquiry.


Edward Mortimer Macdonald: I did not
say that they had asked for an inquiry. I said they asked for the payment of the money and that the government felt that it would be necessary to ascertain the truth of the allegation before acting.


Arthur Meighen: The minister went
further.


Edward Mortimer Macdonald: Not at all.


Arthur Meighen: He stated that in asking for the inquiry they had only done what was asked for by the depositors.


Edward Mortimer Macdonald: Not at all.


Arthur Meighen: Very well. I put myself in the judgment of the House if that was not the statement of the minister. Now as a matter of fact there was no allegation, either of malfeasance of office, of negligence or of error in judgment in any of the representations of the petitioners to this govern-
ment. Indeed, the whole body of the petition was an admission that Sir Thomas White had performed his duty in each of the decisions he had arrived at in relation to the bank. But the Minister of National Defence (Mr. Macdonald) to-night has gone so far as to plainly intimate that there was a compulsion in law upon Sir Thomas White, and that to that compulsion he failed to respond and that in failing so to respond he could not plead the exigencies of the war.


Edward Mortimer Macdonald: What I
said on that point was this: that if a proper complaint requiring an audit under the provisions of the Bank Act, section 56 (a), as stated in the petition, was made to Sir Thomas White that he would be bound to carry out the statute; and the fact that the war was on was no excuse or justification, as it is not provided for in the statutes.


Arthur Meighen: After the minister said
what I have stated, or words to the same effect, he did say what he says now; but he preceded it with the other statement. The intimation he wished to convey was that there was an allegation of malfeasance of office, an allegation of neglect of duty against Sir Thomas White, which allegation never existed and never was presented to the government,


Edward Mortimer Macdonald: I never
used those words.


Arthur Meighen: Well, "neglected duty"
is a mild expression for what Sir Thomas White would have been guilty of, had the minister's words been given their full and complete interpretation. What I say is this: Lhat Sir Thomas White has not pleaded the war by way of any defence for omission of a duty he otherwise would have performed. Sir Thomas White has said that because a war was raging, because of the financial conditions that necessarily surround a ivar, he had to be all the more careful that he did not unnecessarily precipitate a financial crisis. But what I want to say to-night is this: That in order to ascertain the facts connected with Sir Thomas White's relationship to the bank, the government do not need any commission of inquiry. There were not any allegations of verbal representations and of verbal replies. What took place took place in writing and all was on the record, open to the inspection of the government, and open for their review and decision; and if upon that record they came to the conclusion that they were responsible as

Home Bank Investigation
a government, that in any way Sir Thomas White failed in his duty-


Edward Mortimer Macdonald: Does the
right hon. gentleman mean to say that this government got the complaint that was made to Sir Thomas White in 1916? All I have to say is that there was no such record in the department.


Arthur Meighen: I fancy, from the hon. minister's knowledge of the department, that I was right in divining who was behind the order in council. But let me say that the records of the department showed what the complaint was, and showed what was done. The records of the department were transmitted to Sir Thomas White after the failure of the bank, and had been in the department up to that time. I have a copy of them in my hand. They disclose the nature of the complaint complete, and disclose Sir Thomas White's conduct after, and there ^ is never an allegation that either the complaint or the conduct that followed the complaint differed in the least degree from that reflected in this correspondence. So that the government had everything before it. The government was in a position to act, but the government shunted the thing, in order to bring the country, if they could, to a suspicion or a belief that in some way the question revolved around the culpability of Sir Thomas White; and in that way they hoped to secure a sort of political advantage as respects himself and his party, and consequently, what is dear to their hearts, a postponement of their responsibility.


James Alexander Robb: Does my hon. friend still maintain that there was in the public records of the department the correspondence that was sent to Sir Thomas White?


Arthur Meighen: Yes.


James Alexander Robb: Or does he mean to say that Sir Thomas White, when he left office, had left with his secretary an envelope to give to his successor; and that when the announcement of the failure took place that secretary sent this confidential document on to Sir Thomas White, and the Minister of Finance (Mr. Fielding) gave out a statement that it was private correspondence and he supposed it belonged to Sir Thomas White?


Arthur Meighen: Sir Thomas White left it to the department as a public record.
anything but a public record, and in its essence it is a public record. You cannot make a public record a private record.


James Alexander Robb: These documents were sent to Sir Thomas White. Does the right hon. gentleman deny that the secretary sent the documents on to Sir Thomas White? Will he say now that Sir Thomas White, up to this minute, has yet returned the original documents to the department?


Arthur Meighen: I do not know who sent them to him. I know they were sent from the department to Sir Thomas White after the failure of the Home Bank, having lam there all the time prior to that.


Edward Mortimer Macdonald: Private and
confidential.


Arthur Meighen: No, they were not. Sir Thomas White never intended them to be. If they were private and confidential, why did he ndt take them with him?


Samuel William Jacobs: Ask Sir Thomas White.


Arthur Meighen: They were public documents.	[DOT]


James Alexander Robb: If they were public, why has Sir Thomas White not returned them to the department?


Arthur Meighen: No doubt the department has a record of them. The government would know what they were before they sent them out.


George Perry Graham: Is this difference of opinion not the best proof possible that an investigation is necessary?


Arthur Meighen: I will answer my hon. friend. In the first place, I do not think there is any difference of opinion. These were documents on the records of the department. Some of them had been marked "private" at the time, as many a document is; but when a minister leaves a department and leaves documents there, those documents are public documents. If they are private documents, he takes them with him, because he is a private citizen after that. He does not leave a private file in the department to be treated as private, and he never intended these to be treated as private.


George Perry Graham: Why does he not send them back?


James Alexander Robb: Not at all.


Arthur Meighen: Yes, he did, and I have Sir Thomas 'White's letter to that effect in my possession. It never was intended to be


Arthur Meighen: Evidently the government does not want them, and I would presume he would expect the government to have a copy.

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the opposition has said that the government had a knowledge of those documents to which he has just made reference. The member of the government that would have the knowledge, if any, would be the Minister of Finance (Mr. Fielding). When I came back from England, I took occasion to ask the Minister of Finance whether he had any knowledge whatever of this particular document. Mr. Fielding told me that he had not; that if the question were raised at any time, I had his authority to say that he had not; that until after the private secretary in whose hands Sir Thomas White had left those documents, had returned them to Sir Thomas White at Toronto, he had no knowledge that any such documents existed.


Arthur Meighen: All I can say is that
from the information I have it would be his own fault.


William Lyon Mackenzie King: If Mr. Fielding were here to answer that insinuation, I would not reply to my right hon. friend when he says, "it was his own fault."


Arthur Meighen: What does my right hon. friend mean by that? I am saying that the documents are public documents. I cannot help it if he did not look at them.


William Lyon Mackenzie King: They were not public documents; they were documents that Sir Thomas White had left with his secretary as private documents. He regarded them as private documents and they have been so treated.


Arthur Meighen: 
James Alexander Robb: Does my right hon. friend now admit that he has those documents in his possession?


Arthur Meighen: No, I have copies of them! Sir Thomas White has given me copies of the documents.


Edward Mortimer Macdonald: Why does he not send copies to the department?
[Mr. Meighen.J


Arthur Meighen: It is a wonder to me why they were sent to Sir Thomas White immediately after the failure of the Home Bank.


Edward Mortimer Macdonald: The private secretary of Sir Thomas White was also private secretary of his successor.


Arthur Meighen: Ask the private secretary why he returned them.


George Perry Graham: Ask Sir Henry Drayton. He knows about them.


Arthur Meighen: This is the kernel of the whole thing, and consequently it excites hon gentlemen opposite. They do not get rid of the fact that the documents were all at their disposal and that they were not sent to Sir Thomas White until after the bank failure The government knew right well that if they would send them out, they could easily get them. The whole thing is open and clear as day.


Some hon. MEMBERS:: Oh, oh.


Edward Mortimer Macdonald: As clear as mud.


Arthur Meighen: Hon. gentlemen are hiding themselves in laughter, and I admit that they have attained a certain degree of perfection in that art that far surpasses any that they have attained in any other. All is on record. All was before them in their files for nearly two years. They sent it away afterwards on the plea that it was a private document.


William Lyon Mackenzie King: I take strong exception to the remarks of my right hon. friend. He says that the government sent away these documents; that they were on the government files. I repeat that the Minister of Finance himself stated emphatically that there were not such documents on the files of the department; that he had no knowledge of them whatever; that he never sent them away, nor were they sent away by his authority nor by that of any member of the government. My right hon. friend has said and repeated over and over again statements which are absolutely untrue.


Some hon. MEMBERS:: Hear, hear.	<r
xvlr. MEIGHEN: Of course, the ruder the language the more the applause. Is the private secretary not now an officer of the Finance
department?


William Lyon Mackenzie King: I understand the gentleman who acted as private secretary for Sir Thomas White is still in' the government service.

Home Bank Investigation


Arthur Meighen: Is he not an officer of the Finance department?


William Lyon Mackenzie King: I think he is in the Finance department, but he is in that department in a particular capacity. He is not there as private secretary of Sir Thomas White, nor there to disclose to the department matters which were confidential and which Sir Thomas White in his day regarded as confidential.


James Alexander Robb: I think it is fair to the young man who is now an officer of the department to make this statement, that when the Minister of Finance (Mr. Fielding) learned, through a statement in the press that those documents had disappeared, he called in this young man for an explanation. This young man said that the documents had been left him by Sir Thomas White to be given to his successor; that they had remained there in the pigeonhole; that when he learned that the Home Bank had failed, he called up Sir Henry Drayton and told him that those documents were there, and Sir Henry Drayton told him: "You had better return them to Sir Thomas White."


Arthur Meighen: He has proved what I said.


Some hon. MEMBERS:: Oh, oh.


Arthur Meighen: Perhaps hon. gentleman will get through with their laughter after things get a little more serious for them in the investigation. The documents were left to the successor in office. WTere they private if they were to be handed to the successor in office?


William Lyon Mackenzie King: The successor in office was a political and personal friend of Sir Thomas White. That is a very different thing from having the documents on file in the department.


Arthur Meighen: The successor in office was .the next Minister of Finance. Sir Thomas White is alleged to have handed to the next Minister of Finance a file which was a private file! Can hon. gentlemen conceive of any greater rubbish than that? I have not seen the gentleman since; I do not remember his name; I have not seen him since to my knowledge; but if he had those documents in his possession and afterwards, being told to deliver them to Sir Henry Drayton, reported to him that they were a private file, no doubt Sir Henry Drayton would so advise him. But a minister does not hand to his successor a private file.


William Lyon Mackenzie King: Why did Sir Henry Drayton not hand the file to Mr. Fielding?


Arthur Meighen: Because apparently Sir
Henry Drayton never got it. Sir Thomas White never intended the documents to be regarded as private.


William Lyon Mackenzie King: Why did Sir Henry Drayton ask that the documents be sent back to Sir Thomas White? Why did he not ask that they be sent to Mr. Fielding?


Arthur Meighen: Because, I suppose, it was reported to him by the secretary that the file was a private one. But the Acting Minister of Finance (Mr. Robb) distinctly says to-night exactly what Sir Thomas White said, that Sir Thomas White handed them to his successor.


James Alexander Robb: But they were marked
"private".


Arthur Meighen: I presume they had been marked "private" all along. Those things are usual; but when they are to be handed to the successor, there is nothing private about them; they become the property of the department. That is all I have been saying right along, and if hon. gentlemen find much cause for either amusement or self-congratulation, while I admit that they are badly in need of it, I can only admire the elasticity with which they spring for it. Now may I ask the Acting Minister of Finance (Mr. Robb): Have they not now copies of all these documents in the department?


James Alexander Robb: We have copies that were discovered in the Home Bank files of certain letters that were sent out. We have not copies of the letters that came down to Sir Thomas White.


Some hon. MEMBERS:: Oh, oh.


Arthur Meighen: Home Bank Investigation
Now, Sir Thomas White in the published statement he gave, said that nothing had come to his attention which at all called for investigation under the section referred to in this debate, but that what did come to his attention came there presented by three of the directors. Those directors made certain representations to him. Pursuant to those representations, and with their full concurrence as to the method adopted, he had certain inquiries and investigations made, and the result of those inquiries and investigations was entirely satisfactory to those three directors and accepted by them as satisfactory. Sir Thomas White adds that to have made an external audit, to have sent in representatives from the outside, would in his judgment have precipitated a collapse of the bank. No lion, member would there be in this House at all acquainted with financial matters who would not agree that to take such a step is in itself very serious and likely to do very great injury to the institution under investigation. When that becomes known, to carry on further, even though the other circumstances would warrant it, would probably become impossible.
What I want to impress is this. As to what a minister of finance should do on representations made him, that minister, in association with his colleagues or alone, must decide in the light of the public interest and under the circumstances that surround him at the time. That is his duty, and his duty alone. And I want to know how any judge of the court of New Brunswick or of any other court is going to say now what a minister of finance should have done under the circumstances of five, six or seven years ago. How is he going to put himself in the position that the minister of finance v'as in then? It cannot be done. He cannot possibly surround himself with the circumstances that then prevailed, nor can he to-day revive the circumstances which surrounded the minister then. He may find out what the position of the. bank was at that time. But what were the circumstances that then surrounded the minister? The minister had to decide in the light of the representations made to him, in the light of what he knew of the record' of the Home Bank, in the light as well of the circumstances of the hour in Canada, what it was his duty to do. How is a judge of a. court now to report upon what the duty of the minister of finance was at that time? This government is in a far better position to decide than any judge. This government knows, or ought to know, something of the duties of a minister of finance. The present minister of finance knows without question, and looking over that record which reflects the

whole situation, he is in an infinitely better situation to judge what should have been done than any official of any court in Canada. Consequently I say, keeping in mind the object of the expanded order in council to ascertain whether there is liability, moral or legal, to the Home Bank depositors, the minister of finance, knowing that all is reflected in the documents, is in a far better position to determine than any judge could ever be.
But the motion of the hon. member for East Calgary (Mr. Irvine) goes further. As I read the order in council, while it is wide in its terms, its purpose is very definite. Its purpose was definite from the beginning, and is definite now. Its purpose, as stated in the document, is to inquire into certain things, first a few, now many, but all in order to ascertain what the government should do in relation to the depositors. I do not think any hon. member will say that there is any other object in the investigation. The object, though, of the motion of the hon. member for East Calgary is much wider. He seeks to review the circumstances of the failure for the purpose not only of seeing what ought to be done in relation to the depositors, but as well what ought to be done ip relation to the law. Consequently there is an object to be served by such investigation and inquiry that cannot be served by the present one.
Now as to the amendement. I was not in the House when the amendment was moved, but really it is an extraordinary motion, and I hope hon. members will realize its full import-what it entails if it is going to carry.
I do not think any hon. member imagines that this amendment means other than another evasion. It reads:
That 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 representing all the shareholders of the 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 the depositors generally and will prevent simlar 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 possiblity of saving the Home Bank depositors from loss.
Put succinctly, is it not this? That the committee on Banking and Commerce shall not hear evidence, but shall consider the report of this royal commission-when it comes; shall consider as well the evidence in the prosecutions and inquiries that have been instituted;, and upon that evidence and upon

Home Bank Investigation
the report of this commissioner shall then make recommendations to protect the interests of depositors generally and to prevent further occurrences in the future, and also with respect to the possibility of saving the Home Bank depositors.
Well, nothing apparently is going to be done by the committee on Banking and Commerce, nothing can be done until the prosecutions and appeals are over, until the other inquiries referred to, whatever they are, which have been instituted, are over too, and until, as well, this commissioner gets through the investigation of the whole history of the bank back to 1903 for his purpose of deciding what should be done about the depositors; when all these things are over they are, I presume, going to review the reports and make recommendations to this House. Well, that simply means-one can hardly tell what it means, but it certainly does mean that nothing will be done this session; it means another shelving. Hon. members talk about investigations; it means piling on top of the investigations, already so numerous, according to the Minister of Defence, still another. It will be a case of waiting until all these investigations are over and then having the Banking and Commerce committee review the matter again. Is that going to be satisfactory to the depositors? Is that going to meet the general demand of the country? Is that going to meet the demand for an answer to the question, has there been negligence; has there been malfeasance; has there been neglect of duty; has there been anything to justify or compel a recoupment of the depositors? I do not think it will, but that is the position the government takes. I protest against this continual postponement of responsibility. If the government is not able to meet its responsibility let the government get out and give place to some other which will meet responsibility. Now, the Minister of Railways (Mr. Graham), smiles, and sometimes as I look across the floor of the House I really think he would like to do that.


George Perry Graham: I do not see the more
responsible man to take the job.


Arthur Meighen: Well, I can see some
who have some notion of responsibility, and that this government has not. The art of government, to this administration, consists in taking the most circuitous and long-winded route by way of evading every responsibility they confront. That seems to be what they keep themselves in office for.
There was an investigation by commission in the case of the Farmers' Bank, and why? I remember it; it was some years ago, I do
not say I remember it with absolute accuracy. But in that case there was a division of statement as respects certain representations made that were not in writing, as respects certain warnings given to the then minister of finance in relation to the issue of the charter of that bank, and which could only have been made clear and only have been established by something in the nature of a judicial investigation. So far as I can recall, no committee investigation was asked for; I do not think there was any asked for and denied. Here, though, the investigation looks to one object and one alone, an object much narrower than that in the mind of the hon. member, an object that will be defeated if the commission alone is relied on and an object that will be indefinitely postponed if the amendment is adopted. I desire to move the adjournment of the debate.


Some hon. MEMBERS:: No.


William Lyon Mackenzie King: I think that
practically .all hon. members who desire to speak on this motion have done so, and I do not see why we should not conclude the debate this evening.


Arthur Meighen: I understood from the
whip that the adjournment was to be moved at any time after eleven. Perhaps I am misinformed.


William Lyon Mackenzie King: I think it is
the wish of the House to conclude the debate to-night.	'


Arthur Meighen: Will the Chief Government Whip say that I am misinformed?


Mr. KYTE:: No; I said that if a motion was made to adjourn the Prime Minister would express a desire to conclude the debate, but he would leave it to the sense of the House.


Hewitt Bostock: Is it the pleasure of the
House to adopt the motion?


Some hon. MEMBERS:: No.


Some hon. MEMBERS:: Carried.
Motion (Mr. Meighen) negatived.


William Lyon Mackenzie King: Is my right
hon. friend through speaking?


Arthur Meighen: Yes, if I cannot get an
adjournment. I wished to bring some^ other matter into the debate in relation to this correspondence, and understood definitely from the whip that a motion for adjournment would be accepted at any time after eleven. If I am wrongly informed I have no right to go on, and I yield.

Home Bank Investigation


William Lyon Mackenzie King: Mr. Speaker, I desire to
occupy the time of the House just for a moment. In view of what the right hon. leader of the opposition, (Mr. Meighen) has said one or two remarks on my part may not be out of place before the debate concludes.
In the first place it is desirable that the House should understand just how the government came to take the course it did in this matter. The matter came to the government's attention officially through a deputation representative of the depositors of the Home Bank. The depositors are the persons most interested in this matter; indeed, the House is debating the subject because the House realizes that a very large number of men and women in this country have lost sums of money and have endured great hardship as a result of the failure of this bank. They feel, and I think rightly feel, that it has been through no fault of theirs that the bank has failed; they wish if possible to have their losses recouped, and they have asked the government whether it would consider the recouping of those losses. It is from the point of view of the depositors and from the desire of the government to consider their wishes and to see that their representations are fully considered by parliament, that we	are discussing the matter at all.
It was the depositors we were considering; that being the case we acted upon the representations made by the depositors themselves.
I was amazed to hear the ex-Minister of Finance (Sir Henry Drayton) say that the depositors had framed their resolution at the instance of one who was a political friend of the government. His insinuation, if not, indeed, his direct statement, was to the effect that there was some arrangement between the government and the solicitor in virtue of which representations were made in this manner; that, in other words, there were political considerations at the bottom of the representations that were made. I am sorry that the exMinister of Finance is not in his seat; I should like to tell him that his remarks in that connection were unprofessional, were unparliamentary, and 'certainly unworthy of himself. He referred to Mr. Lee who was one of the counsel for the depositors. ]\ 1 r. Lee is a gentleman of high professional standing, a gentleman whose sense of honour is as high as that of any honourable member of this parliament, and I think it ill becomes a* ex-minister of the Crown and a member of parliament, under the privilege of parliament which shields him but which does not permit of any reply to his remarks being made on the floor of the House 
by the person attacked, to direct an insinuation or to make a charge of that character against a member of the legal profession in high standing. I would like to point out that Mr. Lee was not the only gentleman who came before the government representing the depositors in this matter. The deputation which appeared before the government, and which, I may say, was received by all members of the government, came to Ottawa on January 23. Mr. Lee was one of the speakers on that occasion, but other members of the legal profession and members of other professions also spoke and presented the case of the depositors to the government. Mr. R. J. McLauchlin,
K.C., of Toronto, spoke on behalf of the depositors and made representations to the government in this matter. Will the hon. member for West York say that Mr. McLauchlin was speaking as a Liberal or was acting other than as a true counsel for those whom he was representing. Mr. J. F. Edgar, K.C., also spoke on behalf of the depositors, as did Mr. Y. D. Sinclair, K.C., Mr. I. E. Weldon, Mr. Kernahan, and the Rev. Dr. Tracy. All these gentlemen presented the petition of the depositors to the government. If the charge made by my hon. friend has any foundation, then it must apply to all these gentlemen. But more than that, two hon. members sitting behind my right hon. friend on the other side, members of the Conservative party-the member for Leeds (Mr. Stewart), who is in his seat at the moment, and the member for West Elgin (Mr. McKillop) were also members of that deputation. Will my hon. friends say there was a conspiracy between the government and these gentlemen to play politics in this matter?


Mr. STEWART (Leeds):: Mr. Speaker, I wish to correct the Prime hjinister. I did not attend on any such deputation in connection with the Home Bank. I was not here at all on that occasion.


William Lyon Mackenzie King: My hon. friend is right. I should not have said the hon. member for Leeds but the hon. member for Hamilton (Mr. Stewart). There are two Mr. Stewarts in the House from Ontario. The hon. member for West Elgin (Mr. McKillop) also appeared with the delegation. I do not think I need to labour that point, however. It will be apparent to hon. members of the House that the gentlemen who presented this petition to the government were all trusted counsel and representatives of the depositors. They came with a written petition, a petition not addressed to any individual member of the government, but adressed to His Excellency The Right Honourable Lord Byng of Vimy,

Home Bank Investigation
Governor General in Council, of the Dominion of Canada. That was the form in which their petition was presented, carefully drafted and signed by twenty or more persons acting on behalf of the depositors.
In the petition which was presented to the government there were certain charges, direct or indirect, against former ministers of the Crown. My hon. friend, the leader of the opposition, says that the government could have taken upon itself to pass judgment upon these former ministers.


Arthur Meighen: Will the Prime Minister tell us what charges were made against the ministers of the Crown? Read them from the document.


William Lyon Mackenzie King: 
William Lyon Mackenzie King: I remarked, Mr. Speaker, that at the time of the presentation of this petition there were several gentlemen who spoke to it, and as I listened to the petition being read it seemed to my mind to carry the implication that the Minister of Finance of that day for some reason or another had not carried out what he should have carried out by way of investigation in accordance with the law existing at the time. The elaboration of their remarks caused me to ask of the deputation at the time, on what ground they were asking the government to indemnify the depositors for their losses. I pointed out to them that they had really presented what seemed to me to be two diametrically opposite points of view. One was that the minister of finance of the day had taken the course that he did for public reasons, that he had not complied with the act in some part for public reasons. Another view was that he had taken the course he did because of some neglect or oversight, that he had shifted his responsibility on to some other person. He had made casual inquiries, and had referred the matter to the late Mr. Lash, I think it was, of Toronto, and that he had not gone into the matter as fully as he should have done so I asked the deputation at the time: On what ground are
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you basing your claim? Is it on the ground of neglect on the part of the Minister of Finance of the day to do his duty, or is it on the ground of his having failed, because of some public reason, to do a certain thing which the law requires? And the answer I received was that in a court of law it was permissible to plead alternatives, and that they were there for the purpose of presenting both points of view. I contend, Mr. Speaker, that using the word "charge" in the sense I meant it, namely, a reflection Qn the Minister of Finance, is the essence of the ground upon which the appeal is being made to the government. The whole ground upon which the depositors have asked the government to see they are indemnified in this matter is that of a certain neglect of duty or failure to perform duty for a public reason or for some other reason, on the part of a previous minister of finance. That is the ground.
Now if this government were to attempt to pass upon that, what would be said? We are being asked to-night not to treat this question in a political, partisan fashion. But were we to say that Sir Thomas White had not done his duty, and to ask this country to pay so many millions of dollars to the depositors because a previous minister of finance had not done his duty while he was in office, what would be said about this administration? From one end of the country to the other it would be heralded abroad that the government had taken advantage of a political opponent, and out of the public treasury had spent this vast sum of money in order to secure political advantage. If in any way this government were to attempt to pass judgment on any of its predecessors in office who were of a different political party, it would be said that our reason for doing so was because we saw in it a political advantage. That is the one thing, Mr. Speaker, we desire the people of this country to know we are not seeking. We wish no political advantage in this matter. We want this question removed from the realm of politics altogether. We want fair play and justice done in this matter in as fair a way as justice can possibly be done.
The question then presented itself, how was an investigation to be made? My right hon. friend the leader of the opposition has spoken about the government having responsibility. He is sometimes fond of asserting that he himself has responsibility, and will carry it out. Hon. gentlemen opposite of the Progressive group, or rather, my hon. friend from East Calgary (Mr. Irvine) representing, I think, in part those who sit 
in the Progressive group, has brought forward a resolution in this House. One of the members of the Liberal party, on this side, has moved an amendment. The government will accept that amendment in full. We will take that responsibility. Now will my right hon. friend and some of his friends show . where they stand by moving an amendment to the amendment? We have made our position clear. All hon. members in the House, with the exception of my right hon. friend, and his supporters, have made their position clear. My right hon. friend is the only leader of a party who is not prepared to stand up and say whether he would or would not settle this matter on some particular line. We have taken a position. We realized that an investigation was necessary, and I contend, Mr. Speaker, that, without investigation, the public ;of this country would never have sanctioned for one minute action on the part of the government in this matter. It is unthinkable that, without any investigation, the government of to-day on the representations of depositors alone, with reference to a matter which took place some years ago, would ask parliament to vote so many millions of dollars out of the public treasury to indemnify depositors for their losses. An investigation is absolutely necessary in this matter. Now an investigation could be of one form or another. We could either have had a parliamentary investigation-could have had this matter referred to a special committee of parliament-or a judicial investigation. Those are the alternatives. Assuming that we had adopted the plan of having a parliamentary investigation, assuming that when parliament met we had said "We have decided to refer this matter to a committee of parliament, to a special committee, my right hon. friend', the leader of the opposition, would hardly have waited to draw a breath until he would have jumped to his feet and declared "The government has a majority on that committee and is doing what it likes in the matter." We realized the tactics of my right hon. friend, we realized the attitude that parliament, would have a perfect right to take towards any action of that kind, we surrounded this matter with the greatest care and caution-


Arthur Meighen: The Prime Minister will permit me to say, in view of the fact that I have already spoken, that he has no right to misrepresent me. I did not say that the government should have referred the matter to investigation by committee. When I spoke I said the government had the facts

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before it, or should have had, and could have decided the matter on these facts.


William Lyon Mackenzie King: I did not say my right hon. friend stated we should have referred it to a committee. What I said, and what I repeat, is that if the government had taken the course of referring this question to a special committee of parliament my right hon. friend would have been the first to condemn us for having done that, and he would have condemned us on the ground of our adopting a partisan course, of making a political matter of this very serious question. My right hon. friend knows it and will not deny it.


Arthur Meighen: I never said such a
thing.


William Lyon Mackenzie King: I know.


Arthur Meighen: Then what statement
of mine are you answering?


William Lyon Mackenzie King: My right hon. friend admits we have taken the right course-


Arthur Meighen: Oh, no.


William Lyon Mackenzie King: -in having a judicial inquiry instead of a parliamentary inquiry. When it came to the matter of a judicial inquiry the government was anxious that whoever was chosen should be chosen from another part of the Dominion. I mean from a part of Canada that was not immediately interested in this matter. Many names naturally presented themselves to the government when we were selecting a commissioner. We might have taken a commissioner from Montreal, Toronto, or from Winnipeg or elsewhere. As my hon. friend from East Calgary (Mr. Irvine) mentioned this afternoon, this failure affected people from the province of Quebec out to the Rocky mountains but it did not affect, I think, any persons from the Maritime provinces. It was for that reason the government went to the Maritime provinces and chose as commissioner to investigate this matter, the chief justice of one of the courts, who as commissioner receives no salary for the services he is rendering. The government's whole course was taken with a view of inspiring confidence on the part of the members of this House, on the part of the public, and particularly on the part of the depositors who are most affected.	.
Now, as to the matter of the correspondence, to which my right hon. friend has referred, let me repeat that the communication spoken of that was in the possession of Sir Thomas White and was passed on by him to
Sir Henry Drayton was, so far as the government has any knowledge of it at all, a private document in the possession of these ministers or their private secretaries. Let me direct the attention of the House to this circumstance:	The gentleman who was secretary to Sir Thomas White was also the private secretary to his successor, Sir Henry Drayton, when the latter became Minister of Finance. The same gentleman was secretary to both. Sir Thomas White when he left the Finance department gave certain instructions to his secretary, left certain papers with him, told him that some of these papers were to be given to Sir Henry Drayton.


Arthur Meighen: No not "some," all of
them.


William Lyon Mackenzie King: My right hon. friend says all of them were to be given. Very well, "all of them." Then if they were to be given as public documents to Sir Henry Drayton I submit, Mr. Speaker, that it was equally the duty of Sir Henry Drayton to give instruction that these papers be put in the possession of the Minister of Finance who succeeded him. My right hon. friend will recall that when he left office he had a private secretary or a couple of private secretaries; that when he left the position which he formerly held he took with him a large part of the correspondence of the office of Prime Minister, and it was quite right that he should. Some of it he subsequently returned, some of it could not be found anywhere and on this account I asked if I could not obtain it and he had it sent over to me a week or two later iby the private secretary who had it. That' was perfectly proper and perfectly right, but would I have thought of going to the secretary of my right hon. friend and saying to him "I want you to tell me about all the papers that were in Mr. Meighen's possession. I want you to give me his private papers, the documents that he has left with you." Had I done that I should have felt that I was taking an extraordinary course, and I should think no person who had been secretary to a minister who would be prepared to hand over documents to his successor without instructions, would be worthy of a position of confidence in the government service.


Arthur Meighen: The Prime Minister forgets that the secretary was instructed to hand them to the minister's successor.


William Lyon Mackenzie King: He has not
forgotten anything. My right hon. friend
Home Bank Investigation

says he was instructed to hand them to the minister to whom he was going to be private secretary?


Arthur Meighen: Yes.


William Lyon Mackenzie King: Who was Sir
Henry Drayton, a political and personal friend of Sir Thomas White. If that was the right course of procedure, if that was a duty performed at the time, then I say the duty equally devolved on Sir Henry Drayton to see that these documents were put in the possession of Mr. Fielding which they were not.


Arthur Meighen: If Sir Henry Drayton
got them. I do not know that he did get them.


William Lyon Mackenzie King: My right hon. friend says he does not know whether he got them. Then how could he expect that the subsequent Minister of Finance (Mr. Fielding), would ever get them? The whole object my hon. friend has in mind is perfectly apparent. However, the point is a small one, I do not think it need be stressed. There is one circumstance, however, I would like to bring to the attention of the House: The administration is convinced of the necessity of having an investigation into this matter. We want the public to know the truth about these papers. Unfortunately the Minister of Finance, through illness, is unable to be in his seat. He told me in his own room, and I talked with him at his bedside, that he had no knowledge whatever that any of these papers were in existence until after he read about them in .the press and discovered that there were some documents which he had not seen and has not seen yet.


Arthur Meighen: Was that not long before the investigation was ordered. Why were not the documents requested if the government had not copies, and the facts gone into by the government?


William Lyon Mackenzie King: I have already answered my right hon. friend as to why the government did not go into the facts. Supposing the government had started to investigate Sir Thomas White's doings and the doings of the hon. member for West York (Sir Henry Drayton) what would have been said of its method of procedure? We have taken the proper course. We have appointed a commissioner before whom all parties can appear, and before whom all parties will be made to appear and give evidence in this matter.
LMr. Mackenzie King.]
Now, Mr. Speaker, so as not to take up too much time of the House let me conclude briefly with a statement of the further action of the government. When the petition was presented in the form in which it was presented, by all the persons whose names I have mentioned, drawn up with the great care and great skill with which it was drawn up, the government assumed that it would be impossible to present a case to any tribunal for the depositors in a stronger or more effective form than that in which the depositors themselves thought best to present it to the government. And so we decided to use the language of the petition, not with a view to directing any investigation against Sir Thomas White, not with a view to inquiring into the acts of our predecessors, but that by taking only what was put before us by the depositors we might be removed from any criticism of any kind. We took their language, their words and their documents, and made them the basis of the investigation. The period mentioned in the document that was presented to us included certain years, and those years were mentioned in the order in council just as they were presented in the document; but when it was suggested to us the period should be extended, as soon as representations were made on that score, we immediately amended the _ order in council and had the inquiry carried on to the time the bank closed its doors. I submit it would be impossible to have a representation presented in a fuller, clearer, more unbiased, and unprejudiced manner than that. Let me recall a remark of the ex-Minister of Finance (Sir Henry Drayton) . He asked, why did the government not refer the representations that were made to it before the bank closed? For the life of me I could not make out what representations he had reference to. I do not know what representations were made, unless it was possibly one or two gentlemen coming and asking the government if they would not help to save the situation the day before the closing of the bank.


Arthur Meighen: Did the hon. minister say these gentlemen came just before the bank closed?


William Lyon Mackenzie King: My impression is yes. The only recollecion I have of any deputation is a deputation that came late one evening to ask if the government would make some huge deposit, in order to meet the situation for the next day, and I myself declined to entertain a thought of the kind. My recollection is that we vere told the bank

Home Bank Investigation
would fail if that were not done, and I think it was the day following, or two days after, that the bank closed its doors.


Arthur Meighen: Would the hon. Prime Minister tell us who the gentlemen were?


William Lyon Mackenzie King: I will be prepared to make a statement as to who they were, every one of them, but I think the proper place is before the royal commission appointed to look iBto the matter. They were representatives of the bank. I will give the names to the commission when it is taking evidence on the matter. The point I want to direct attention to is that the order which the government drafted covers this very point. Let me read one clause of it-
The Committee of the Privy Council therefore advise that the powers of the commissioner under the said order in council be not limited to the specific years 1015, 1916 and 1918 referred to in the petition of the depositors, but should extend to an investigation of the affairs of the said bank during the whole interval between the issue of the bank's charter and the failure of the said bank.
Then listen to this-
Including any representations made to the government of the day.
Does that not include everything? Does that not include the representations of anyone who ever spoke to the government or made any reports to them from the day the bank opened its doors to the day they were closed. The government's order in council says:
Any representations made to the government of the day as to its conditons, any action taken by any of the ministers of finance upon such representations as may have been made, and the effect on the position of the depositors of any audit under Section 56a of the Bank Act if made at any time in consequence of such representations.
I say it is not possible to put into the English language words more comprehensive and words more inclusive than the words used there, but I say if it is possible, if any hon. member will point them out to the government, I will try to have them inserted in another order in council, if that is necessary for the purpose. I cannot make it too plain that the government wants this matter investigated from beginning to end, and every feature and aspect of it investigated, and if there is anything that is material which is not covered by the order in council, we are prepared to see that those matters are inquired into. If the government has not sought to go back to the days when banking began in Canada, it is because the government has been seeking to confine its inquiry within limits that will make it possible for this parliament to deal with this matter at this session. It is 50
not the government that has been delaying the inquiry or causing it to be prolonged. We brought down the - order in council couched in the words of the depositors, who are the people most interested. We took it in their own language and did not deduct from it or add to it, for the reason that we were anxious to see that their wishes in the matter were met. But hon. members of the House were the ones who raised the point that we had not carried the investigation down far enough. They and others asked that we should supplement it, and we added to it, and now the exMinister of Finance (Sir Henry Drayton) says we should go further and that we should not be content to have the inquiry from the day the bank started business to the day it closed. He blames us because we have not given authority to examine conditions which in the first instance led to the establishment of the bank. I think, after all we have heard to-day, that as a government we would perhaps be wise if we confined this investigation to what we have already set out in the orders here. But let me say this: That rather than be under a suspicion that there is anything in the matter that we are seeking to conceal, I am agreeable that the commission shall inquire into what took place before the bank was instituted, when the bank was instituted, and after it was instituted, and any period that any hon. member of the House can suggest to the commission. I do not think it can be made broader or more comprehensive than that.
Let me come to the amendment of my hon. friend from Pontiac (Mr. Cahill). As I read this amendment, it clearly has one object above every other object in view. My hon. friend wants immediate action, just as the hon. member (Mr. Irvine) who moved the resolution wants immediate action. They do not want to wait until the commission has completed its inquiry to have the matter looked into. They want to go to work at once with a parliamentary committee. We are prepared to say that that part of the matter which it seems wise and expedient should go in the first instance to such a committee, shall go to a parliamentary committee. We do not think it is wise or right or proper to put those who are our political opponents in judgment before a parliamentary committee. We do not think that is a proper way of proceeding. But with respect to such matters as those which affect the Bank Act, the possibility of amending it, or as to anything growing out of investigation which will help to show wherein the Bank Act can be amended to the benefit of depositors, and to the saving

Home Bank Investigation

of similar situations in the future, we not only agree but will welcome any suggestion that may be made in that connection; and for that reason we are only too glad to accept the amendment which has been moved-and which I think my hon. friend from East Calgary (Mr. Irvine) will feel is very much akin to his own motion, if not largely in the identical words of it-to refer such matters to the committee on Banking. The right committee to which to refer these matters is the Banking committee. Now what does the amendment say? It does not say we are to leave these matters until the commission has made its report. The amendment says:
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 a royal commission which has been appointed to investigate the facts alleged in the petition representing all the shareholders of the bank-
I would like to direct the attention of my hon. friend to the fact that I think he meant "depositors" when he used the word "shareholders".
-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 Bank 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.
In other words, there are, in connection with this matter of the failure of the Home Bank four or five public investigations proceeding at the present time and every one of these investigations will throw some light on this bank failure and its causes as well as consequences and will reveal some aspect, some important question in connection with it. There are the prosecutions against all the directors and certain officers of the Home Bank, conducted by the Attorney General of Ontario under the Bank Act and the Criminal Code. As soon as those prosecutions are gone on with, that matter will be available. If they are delayed, that need not delay this committee; there will be other matters to consider. There is an investigation by a special auditor appointed by the Minister of Finance (Mr. Fielding), to report to the Minister as to the condition under which the business of the bank has been carried on since opening its doors as a chartered bank. This is being done under existing legislation. This report, as soon as it is made to the Acting Minister of Finance, will be available, and 
I imagine that it will not be very long in being made. Then the liquidators appointed by the courts to take charge of the affairs of the bank are going into these matters and making reports. The evidence and material coming before them will all be available for the Banking committee in considering this matter.
Finally, the government has appointed this royal commission which will begin its sittings immediately; some of these sittings will be held at Ottawa, some at Toronto and elsewhere. The proceedings of this commission will be reported from day to day, and they can be taken to the committee from day to day. The committee need not wait until the commission has made its final report to have matters brought out. If hon. members are interested in some particular phase of the question, they can appear before the commissioner at Ottawa, while he is here, and have such matters brought out. With all these investigations proceeding, I submit that it is not possible to conceive of any manner in which a committee could be supplied more effectively with all relevant and pertinent facts.


Mr. GOOD:: How far will the committee
be restricted in the matter of calling and hearing witnesses?


William Lyon Mackenzie King: 
William Irvine: Mr. Speaker, the resolution has been pretty thoroughly discussed, and I want to offer just a thought or two on the amendment. I do not wish to prolong my remarks unduly, because I do not think there is anything very much more of value that I have to offer. Let me first of all point out that I think the hon. member for West York (Sir Henry Dray-50i
ton) made the only attack on my speech that has been made by any hon. member. I am sorry that he is not in his seat now, but I think his attack was a little unfair. I think he misrepresented my statement when he said that I had argued that because one bank had failed that proved that all banks were going to fail. I did not argue that. Then the hon. member made a definite charge that I was wrong in my estimate of the assets of the bank over its liabilities. I have laid claim to many things, but I have never laid claim to infallibility. It is just possible that I was wrong, but I am not wrong merely because the hon. member for West York says so. He offered no arguments or facts or figures to prove that I was wrong, and I do not accept his statement in that regard, neither do I think the House will accept it. When I challenge the statement of the hon. member for West York as definitely as he has challenged mine, I shall have more to put forward than a challenge; I shall have the facts to put forward as well.
The Minister of National Defence (Mr. Macdonald) has explained the position of the government; he has given us a history of the whole movement towards investigation; he has referred to the deputation from the Home Bank depositors; he has pointed out the situation which practically compelled the government to take some action and to take action along the lines of a royal commission.
As I pointed out in my first speech, the position of the government is a difficult one in dealing with this matter, and I certainly wish to do all in my power-and I believe hon. members will concur with me in this- that we all wish to help to the best of our ability to bring this matter to a successful issue. I have no politics, Mr. Speaker, of the popular type. I do not know whether that is a matter of shame or pride. But some portions of the debate have verged sometimes on the acrimonious and have dealt with matters that, I think, might have been left to the royal commission and so have saved a good deal of debate. I am bound to say, as a new inexperienced member, that in listening to the debate I felt sometimes a little uncertain as to what confidence to place in the government and in the amendment. When the hon. member for Pontiac (Mr. Cahill) moved his amendment, I felt that in it were the principles that I had contended for in my resolution. When I heard the right hon. leader of the opposition (Mr. Meighen), who is an experienced parliamentarian and has an undoubted gift and
Home Bank Investigation

power of analysis, I began to wonder whether the hon. member for Pontiac was not trying, as we say in popular parlance to " put one over on me." Now, however, I do not think the government is doing so. I think it is unfortunate that such an opinion should be created by the discussion. I am going to take the government's word. I am going to assume that the amendment is sincerely moved and that the government in accepting it is going to do its best to carry out the spirit of the amendment. I hope that hon. members to my right will concur with me in taking this attitude. Surely the government will not, after we have placed such confidence in it, attempt to play fast and loose with its word. I would take the same position with the right hon. leader of the opposition. I would be prepared to give him all the advantages in this regard, and I trust that he will extend the same to me when the Labour party comes to power in this Dominion.
Now, Mr. Speaker, after having heard the declaration of the Prime Minister that we will be allowed to at once proceed to action, and after having been assured that we will receive the evidence as it is adduced before the royal commission from time to time, and be in a position to deliberate thereon, I see no reason why I should not accept the amendment and withdraw my resolution, with the consent of the House, for, after all, what I was trying to get was action. I do not want any more investigation than is necessary. I think we can get action in this committee, and in that way co-operate wth the royal commission that will furnish us with the requisite information.


Hewitt Bostock: The question is on the
amendment moved by the hon. member for Pontiac (Mr. Cahill) and seconded by the hon. member for North Essex (Mr. Healy):
That 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 shareholders of the 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 the 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.
By unanimous consent shall I substitute the word "depositors" for the word "shareholders."


Some hon. MEMBERS:: Carried.


Hewitt Bostock: The question is on the
amendment. The House must pass judgment on the amendment before the hon. member who moved the motion can have leave to withdraw the motion. That is in accordance with rule 324 of Beauchesne's Parliamentary Rules and Forms.


James Alexander Robb: Mr. Speaker, on the vote	
iust taken I was	paired with the hon.	member
for Vancouver Centre (Mr. Stevens).		Had I
not been paired amendment.	I would have voted	for the


Mr. CLIFFORD:: I was paired with the hon. member for East Elgin (Mr. Stansell). Had I voted I would have voted for the amendment.


Hewitt Bostock: I declare the amendment
carried. I understand that the hon. member for East Calgary (Mr. Irvine) withdraws his motion. Is it the pleasure of the House that the hon. gentleman should have leave to withdraw his motion? '


Arthur Meighen: Mr. Speaker, how can
there be an amendment carried to a motion that is withdrawn? The amendment is to the motion; the amendment having passed, there is no motion.


Hewitt Bostock: There is no motion left,
but I wanted to give effect to what the hon. member for East Calgary had stated prior to the vote.


Arthur Meighen: It cannot be given effect to after the vote just taken. I may say that a large number of our members had gone home on the faith of the report from the whip to the effect that an arrangement had been made that there would be not a vote, but an adjournment.



ADJOURNMENT-HOME BANK PETITION TABLED

William Lyon Mackenzie King: I wish to lay pn the Table of the House the petition of the depositors of the Home Bank, which I promised I would bring down before the sitting was concluded.
Motion agreed to and the House adjourned at 12.55 a.m. (Friday).
Friday, March 28, 1924