1934-06-08

[Stage Direction]
On the orders of the day:
Mr. G. P. LAURIN (Jacques-Cartier):: Mr. Speaker, before the orders of the day are called I should like to put this question to the Minister of Labour: Has anything been done to help the city of Montreal in matters of relief, pending the checking up of the accounts of the city by the provincial officials?


Hon. W. A. GORDON (Minister of Labour) :: Mr. Speaker, the position of the city of Montreal has upon a number of occasions

been the subject of some interrogations in this house. I have tried to make it clear that with respect to direct relief and other matters the province of Quebec is functioning under an agreement couched in the same terms as the agreement which prevails with the province of Ontario. During the past year, and particularly in the year 1933, great difficulty seems to have been encountered by the province of Quebec in rendering account to the dominion in order that the share of the dominion under the agreement could be promptly transmitted to the province of Quebec for payment to the city of Montreal. Just what the difficulties are I am not fully prepared to state, but the fact is that the dominion has not been receiving accounts from the province of Quebec.
Undoubtedly one of the difficulties is that the city of Montreal and the auditors of the province of Quebec have not been able to settle upon the proper amounts that are payable to the city of Montreal. The question has become acute, and for some time past this government has had under consideration some method which might be adopted in order to assist the city out of its present troubles. The province of Quebec as late as November last was urged to try to have its accounts submitted to Ottawa without the undue delay which had been experienced for many months prior to that date. But very little headway seems to have been made. The government, therefore, acting through myself, has to-day caused a message to be dispatched to the premier of the province of Quebec, reading as follows:
By reason of the prolonged delay which has occurred in respect of the completion by your provincial officials of the audit of the city of Montreal's relief accounts, and the acute financial difficulties which that city is experiencing by reason of the consequent nonpayment of the dominion and provincial proportions of the same, the dominion on the assumption that there will be approximately $3,000,000 payable by the dominion and an equal amount by the province, under the terms of the agreement, is prepared to make an accountable advance to the province of Quebec of $3,000,000 which with an equal amount from the province in respect of its share would provide the city of Montreal with $0,000,000, and greatly improve its present financial position. The proposed advance by the dominion would be made on the same terms as similar advances have been made to other provinces for similar purposes. At the same time I would again stress the importance of the provincial audit of Montreal's accounts

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being carried out with all possible expedition in order that a financial adjustment of the dominion's accountable advance above referred to can be made with the least possible delay.



BANK ACT AMENDMENT


[Stage Direction]
The house resumed from Thursday, June 7, consideration in committee of Bill No. 18, respecting banks and banking.-Mr. Rhodes- Mr. Smith (Cumberland) in the chair.
On section 88-Loans to certain wholesale dealers.
Mr. CASGRAIN:: There was an amendment before the committee when it rose last night along the line of the amendment which I proposed in the committee on banking and commerce, and which I reintroduced in committee of the whole last night. The amendment was left over at the request of the minister for consideration and discussion. My purpose in moving the amendment is to protect the unpaid vendor as against the claim of the bank. The object is to put the unpaid vendor on the same basis as all the other persons mentioned in this clause, which has in view the protection of the wages, salaries or other remuneration of persons employed by any wholesaler, purchaser, shipper or dealer. I submit the amendment for the consideration of the committee.


Mr. RHODES:: Mr. Chairman, there is
nothing that I feel I can usefully add to what I said in the committee last night. For the reasons then given and given also when the bill was under consideration in the committee on banking and commerce this amendment cannot be accepted.


Joseph Philippe Baby Casgrain: Last night's reasons still hold.
Amendment negatived on division.


[Stage Direction]
Section agreed to.
On section 89-Goods manufactured from articles pledged.
Joseph Philippe Baby Casgrain: Again, Mr. Chairman,
I have an amendment to propose which I also proposed in the committee on banking and commerce, and which is also for the purpose of protecting the unpaid vendor. It will be noted that this section gives the bank a claim prior to that of the unpaid vendor. That is the evil I want to cure, and which I tried to cure with respect to the
74726-240 J
previous clause, but without success. Although this amendment may meet with the same fate it is my duty to propose it. I therefore move that subsection 2 of section 89 be amended by striking out all the words commencing with the word "who" in the fourteenth line thereof down to the end of this subsection and substituting therefor the words " of or in respect of such products, goods, wares and merchandise to the amount remaining unpaid." This amendment goes with the other.


Mr. MACKENZIE (Vancouver):: It certainly will.
Amendment negatived on division.


Joseph Philippe Baby Casgrain: I have done my duty,
Mr. Chairman.


Mr. FRASER (Cariboo):: Mr. Chairman, I would like to take up a few minutes-


Joseph Philippe Baby Casgrain: He may have more success than I had. He is on the right side.


John Anderson Fraser: I am very fearful of it'. I want to bring to the attention of the committee a matter that did not receive that full consideration that was intended in the committee on banking and commerce. If hon. gentlemen will turn to volume No. 11 of the proceedings of the committee on banking and commerce they will find the following minute on page xi:
Mr. Fraser (Cariboo) proposed that subsection (19) of section eighty-eight be amended by making it possible that the notice of intention provided for by this section shall be registered not in the office of the assistant receiver but at some appointed county office.
It was agreed that the subcommittee should consider the advisability of amending those subsections of section eighty-eight which deal with the registration and cancellation of the notice of intention. The matter of the subrogation of the rights of a guarantor to be considered at the same time.
May I say that the first part of this minute was attended to by the committee but for some reason which I have not had explained the last part of it "the matter of the subrogation of the rights of the guarantor to be considered at the same time," was not dealt with and no report was made by the subcommittee to the committee on banking and commerce. I therefore move the following amendment:
That section eighty-nine of Bill 18 be amended by adding thereto the following subsection :*-
(4) Where payment of a loan made by a bank under the provisions of section eighty-
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six or section eighty-eight of this act is guaranteed by a third person and such loan is paid by the guarantor, such guarantor shall be subrogated in and to all of the powers, rights and authority of the bank under the security which the bank holds in respect of the said loan under the provisions of the said sections eighty-six and eighty-eight.


Edgar Nelson Rhodes: Mr. Chairman, I have consulted the Department of Justice with respect to this proposed amendment which was moved by my hon. friend in the committee on banking and commerce, and while I have not a final opinion from them they raise the question as to whether it is really competent in a matter having to do with banking to go beyond the bank and attempt to provide by way of legislation with respect to other creditors, having in mind the fact that the question has a bearing upon property and civil rights, which is a matter under the exclusive jurisdiction of the provinces. For that reason alone I feel that it would be unwise to place an amendment in the act which might prove of no avail.
I might point out further that the difficulty which my hon. friend has in mind in moving his amendment has not arisen in practice to any appreciable extent. The section in question has been in force for some fifty years. There was some question bearing upon this point which arose in the decision af the case of the Victor Varnish Company, in re Clare's claim, reported in 16 Ontario law reports, 1908, but that is some twenty-six years ago. Notwithstanding that decision there has not been any demand made upon the department nor any suggestion offered, except that made by the hon. member for Cariboo, that the section should be amended. Under all the circumstances I feel that the amendment should not be entertained.


Mr. RALSTON:: Has the minister any
objection to the spirit of the amendment on its merits?


Edgar Nelson Rhodes: I might say that I have
none.


James Layton Ralston: I sympathize entirely
with the spirit of the amendment. It seems to me that there is no good reason why a man who guarantees a note to the bank should not be placed in the same position as the bank with regard to security when he pays that note. Of course, we must bow to the opinion of the Department of Justice with regard to the constitutionality of such a provision but I think there is a great deal of room for argument that it is part of a genuine banking bill to provide that guarantors of

obligations to banks, which are incidental to banking business, should have certain rights with respect to the security which the bank holds. It seems to me that this is a distinct improvement in our banking legislation and will facilitate banking. It will make a man a little more ready to assist his neighbour or his partner in connection with obligations if he knows that he will be subrogated to the rights of the bank in connection with the securities which the bank holds. I wonder if the minister feels that he should not go further with this matter and pursue his inquiry as to the constitutionality of the section, especially when he has no objection to the amendment on its merits.


Edgar Nelson Rhodes: There is no objection to
it on its merits. I quite agree with my hon. friend that it would appear that the object which the hon. member for Cariboo has in mind is desirable. I would suggest two courses. The first is that the committee should accept the amendment on the understanding that if an adverse opinion is received from the Department of Justice, the amendment can be dealt with in the Senate. Secondly, we might pass the section without the amendment and if in the meantime a favourable opinion is secured from the Department of Justice, an amendment could be made in the Senate. Either of these courses would be quite acceptable to me.


Mr. HACKETT:: I believe it is already
the law in some provinces.


Ian Alistair Mackenzie: I think
the first course would be the better one, to have the committee accept the amendment moved by the hon. member for Cariboo (Mr. Fraser).


Mr. MacLEAN:: I think there is a great
deal to be said in favour of the amendment. I think in amending the Bank Act, further consideration should be given to the position in which a guarantor is placed in connection with a bank. Once a guarantor or an endorser has placed his name on a note, the bank does not worry very much about the man who gets the money, they simply look to the endorser in every case. I have known of cases where the bank would not even cross the street to attend a creditors' meeting. They claim they have a certain man on the note and that they look to him for payment. They will not even put themselves out to send a second notice to the man who really got the money but they will go after the endorser who has no recourse but to pay. Quite often the bank will not even take

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action against the man who really got the moDey. They will take a joint action against the two, but they will not take single action against the man who got the money and walked away with it. I think that is very poor protection for a man who endeavours to accommodate or assist another and I think the amendment moved by the hon. member for Cariboo (Mr. Fraser) should receive consideration. I feel that it should go much further.


Edgar Nelson Rhodes: I do not profess to be competent to pass an opinion upon the legal phase of this question, which is the sole point I raise. I raised that point by indicating that the officers of the Department of Justice had grave doubts as to whether or not the constitutional question might be involved. It seems to me that we could meet the situation in one of the two ways I have suggested. If the committee desires to take responsibility and have this section amended, I have no objection. On the other hand, I would endeavour to expedite the receipt of an opinion from the Department of Justice and if it were favourable, an amendment could be made in the Senate. Either course is acceptable to me.


Mr. ELLIOTT:: It seems to me that an act which permits a guarantee to be paid should be able to provide for the guarantor being protected if he has to pay the guarantee. While I would not for one moment express an opinion in opposition to the Department of Justice, I feel satisfied that the department will say that if power is given to guarantee the bank the guarantor can be protected, either by the guarantee providing that upon payment he shall receive whatever securities the bank holds or in some other way. I suggest that the amendment be passed subject to the understanding that if the Department of Justice says it is not constitutional or that it cannot be so varied as to be made constitutional, it can be changed later on.


Edgar Nelson Rhodes: I have already indicated that that course would be quite acceptable to me if it is the wish of the committee.


James Layton Ralston: I suppose this will not apply to members of parliament.


An hon. MEMBER:: They would not accept one as a guarantor.


John Anderson Fraser: I am quite satisfied that this amendment should be incorporated in the bill with the understanding that the Senate may delete it if it feels so inclined.


Ian Alistair Mackenzie: Do not make any suggestions to them.
Amendment (Mr. Fraser, Cariboo) agreed to.
Section as amended agreed to.
On section 91-Interest exceeding 7 per cent shall not be charged.


Mr. NEILL:: I thought there were to be some amendments to this section. I have been asked by a board of trade to bring up a matter in connection with subsection 4, the one which deals with the charge for keeping accounts. There is a general feeling that this is unfair. Of course, as regards private people, the contract would be between two parties and if one did not like it, he could go somewhere else. But the banks have practically a monopoly and there is no opportunity to go somewhere else. It is felt that the bank should give this service although it may not be exactly profitable in the case of some individuals. I think this matter was brought up in the committee but apparently nothing was done about it and I should like to hear from the minister.


Edgar Nelson Rhodes: I think the practice of making what is called a service charge is entirely fair and proper. It is only made in the case of those accounts where without a charge being made the bank would be doing business at a loss. Inasmuch as the section protects the indivdual by providing that there can be no charge made except the individual affected agrees, it seems that no injustice is done. For these reasons I think there can be no objection to the subsection as it stands.


Alan Webster Neill: That would be all right if there was any choice of banks, but very often there is not. Even if there are two banks in a community, they have practically a monopoly. The. subsection states that there shall be no charge unless by express agreement between the 'bank and the customer but I understand the banks take the position that they are entitled to make such a charge when a man signs for his cheques at the end of the month and certifies that the account is correct. They contend that that is an acceptance of this agreement. I understand that in the case of stores placing on their accounts the words "interest charged on overdue accounts" it is held not to be a valid agreement even although the man who gets the bill makes payments from time to time. It is held that an express written agreement is required before a storekeeper can charge interest on overdue accounts. Has there ever been a ruling as to
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whether it is considered sufficient for the bank merely to make a charge, and because the customer accepts his account as correct, as stated, whether that binds him without an express agreement? Do the words express agreement require any obligation in writing?


Edgar Nelson Rhodes: With all deference, there is in my judgment nothing in the point that the individual has no alternative inasmuch as there may be only one bank in the community and therefore no opportunity for him to go elsewhere, having in mind the fact that the charge itself might and probably would be a reasonable charge, or rather that the principle of charging would be reasonable. This matter was inquired into by the Royal Commission on Banking and Currency and is referred to in paragraph 257 at page 74 of their report. They state:
The reasonableness of the banks making by agreement charges for services rendered in administering active accounts, when the customer offers no collateral or compensating advantage to the bank, has been recognized by the Bank Act, and rightly so. Any other mode of procedure would result in the shifting of the costs of performing certain services from one class of customers to another class.
I have only to add, with respect to the further query of my hon. friend, my belief that in practice the customer always signs a printed document which constitutes the agreement.


John Anderson Fraser: With regard to these service charges I have only one or two observations to make after listening to what the bankers themselves have had to say in this respect. These charges, in practice, are not nearly so innocent as they look when you are discussing the matter in the way we are. I only want to bring to the attention of the committee a case that came to my notice when I was travelling around the country and coming in contact with men whom I scarcely knew. I could cite a dozen instances, but the most striking example I submit now to show what is the actual practice in connection with these charges. This man lived in an outlying community and he told me he had been in the habit of carrying balances for months before the time of the occurrence-balances anywhere from $3,000 to $5,000. He was a general merchant in an outlying community. On B certain day he knew he had a number of obligations coming due and cheques that would be presented-it was a mail day-and he was very busy in his store. He overlooked making the deposit until after three o'clock. He went to the bank after three o'clock with a sufficient deposit to more than take care

of the obligations he had, but the bank was closed, and the next day when he went to clear up the deposit the manager charged him fifty cents for taking care of an overdraft of seventy cents during that time. I submit that as an actual occurrence, and I am satisfied that this man was telling the truth.
I have no objection to a service charge that is reasonable, but I want the general managers of banks to understand the situation. In actual practice the conditions which, impliedly, they lay down to their branch managers, are not carried out; their instructions are adhered to altogether too strictly. I think it would be well therefore for the banks to take up this matter to see whether they cannot loosen up on their instructions or have managers who will not follow those instructions as definitely and consistently as they do.


Edgar Nelson Rhodes: Assuming the facts-and I do not call them in question-to be exactly as stated by my hon. friend from Cariboo, it seems to me that the only inference to be drawn from them is, to put it mildly, that that bank is unfortunate in having a manager with bad judgment.


Mr. DUFF:: And the customer was easy.


Edgar Nelson Rhodes: That is as far as I go. However, the fact that he has brought forward this rather exceptional case; the fact that the matter was discussed in the committee on banking and commerce; and the further fact that the attitude of mind with respect to instances of that character has been brought home to the management of the banks, leave every reason to hope that these instances will be few and far between. They do not arise of necessity out of the statute, because they represent merely the abuse and not the proper use of the statute.


Mr. COOTE:: One great difficulty in connection with this matter of charges by banks is that there does not seem to be very much uniformity in the practice carried out in different sections of Canada, and sometimes not very much uniformity within certain sections. The complaints are many and varied. Of course, we anticipate some complaints, but I do not think there is much use discussing the matter at any great length in this committee; we discussed it at some length in the banking committee. It is a very difficult matter to legislate upon, but in some instances charges have been quite exceptional, running to as high as $2.50 a

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month for a comparatively small account. One case was brought to my attention where the charges amounted to $4.50 for one month, in the case, too, of a man who was discounting a great many notes. As I say, it is a matter which it is very difficult to legislate upon and I am rather of the opinion that the only way to deal with it satisfactorily is to set up some sort of tribunal to whom aggrieved persons may appeal if they think they are unfairly dealt with by the banks in regard to service charges. Many of these people live in communities where there is only one bank, and the banks are becoming more and more in the nature of public service institutions, so that before very long, in my opinion, some method will have to be devised of regulating service charges.


[Stage Direction]
Section agreed to.
Sections 99, 112, 124 and 125 agreed to.
On section 138-Unauthorized issue of notes for circulation.
George Gibson Coote: Section 138, if carefully examined, will be admitted by many members to be very objectionable indeed. The effect of this section is that only banks can issue money or substitutes for money; more than that, it is only banks which are chartered by this act. This gives these banks the absolute monopoly of the issue of the medium of exchange. If people have goods and services to exchange and have no money and can get none from the banks, why fine them $400 if they can invent a substitute for money? That is something I cannot understand. Is not this section putting people in so far as the issue of money is concerned at the mercy of the banks? Clause 138 reads:
Every person, except a bank to which this act applies, who issues or reissues, makes, draws or endorses any bill, bond, note, cheque or other instrument, intended to circulate as money, or to be used as a substitute for money, for any amount whatsoever, shall incur a penalty of $400.
It seems to me that a cheque is either money or a substitute for money. Which is it? Any person other than a bank that issues a cheque is liable to a fine of $400. It is true that there is perhaps an exception under subclause 4 if the cheque is for less than $20 but even in such a case it is only when the cheque is payable directly to the creditor of the immediate issuer that it is not considered a substitute for money. If that cheque passes through the hands of a third or fourth person, then under the terms of subsection 4 it becomes a substitute for money and the issuer
is liable to a fine of $400. If the cheque is for more than S20, according to this section it is a substitute for money, it would be a contravention of the clause itself. It is money or a substitute and it is a contravention of this clause because it is not issued by the banks. The whole clause appears to me to be very objectionable and bad law.
I would also address this question to the minister: What about a cheque issued on a trust or loan company? There are thousands of these cheques issued every week. Are they money or substitutes for money? As I understand the matter, they must be either one or the other. Under this section there seems to be the possibility of endless litigation. It is bad legislation, apparently designed to give the banks the monopoly of the issuing of our medium of exchange.
Subclause 3 which provides for a moiety of the penalty to the informer is bad law and should have no place in this bill. It is a disgrace to parliament to pass subclause 3 which provides that a moiety of the penalty goes to any person who becomes an informer. That is bad enough when it is incorporated in the Customs or the Excise Act, but to put it into such a respectable measure as the Bank Act is beyond my imagination, and as I said before, it is a disgrace to parliament if we pass it.
Subclause 4 reads:
The intention to pass the same as money shall be presumed.
I would invite hon. gentlemen just to take a few minutes to study this subclause which reads:
If any such instrument is made for the payment of a less sum than $20, and is payable either in form or in fact to the bearer thereof, or at sight, or on demand, or at less than thirty days thereafter, or is overdue, or is in any way calculated or designed for circulation, or as a substitute for money, the intention to pass the same as money shall be presumed.
Surely that is bad law. It is contrary to the old English maxim that a man is innocent till he is found guilty. It says:
The intention to pass the same as money shall be presumed-
Then it goes on to say:
-unless such instrument is a cheque on some chartered bank paid by the maker directly to his immediate creditor.
Again I raise the point: What about this cheque when it goes into the hands of a third or fourth party? What if it is drawn on a loan or trust company? What if it is for more than $20? I think clause 138 should be deleted from this measure-and I hope I shall have the support of many hon. members in the committee-because there are certain
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features which are so objectionable and I cannot see any necessity for their being in the Bank Act. If there is necessity for placing anywhere in the statutes of Canada the provision that no one but the banks should issue money, it should be in some other act than the Bank Act, which applies only to banks, and anything of this kind having to do with organizations other than banks should be stated in the criminal code or in the Currency or the Dominion Notes Act which deal with the particular business of issuing money. I appeal to the minister to allow the deletion of clause 138 from the bill.


Edgar Nelson Rhodes: My hon. friend will appreciate the fact that there must be some protection for a country's currency. It may be arguable whether it is good policy even from a national viewpoint that the privilege of issuing currency should be delegated to banks. I need not enter into that question for the very obvious reason that the Bank of Canada Act provides that ultimately the whole of the currency shall be issued by a quasinational institution, the Bank of Canada. Therefore in very large measure, whatever force there may be in the hon. member's argument, it falls to the ground for the reason it is in the interests of the state itself that it should preserve its currency inviolate.
As regards his reference to the provision with respect to cheques, he must bear in mind that the statute itself provides that it is only in those cases where such cheques are used as a substitute for money with the object of defeating the note circulation privilege that any of the penalties would apply.
I do not propose to enter into an argument with him as to the question of the provisions of subclause 3 of this clause. I may say to him very frankly it is a provision of the law that I do not like, but that is only my personal view. It does not follow that because that provision has been in the law for years and years it must therefore remain, but I may point out to the committee that the same provision is found in numerous other acts touching various services of government and if we are to be consistent we should not make fish of one and flesh of another. If parliament in its wisdom-and I would not quarrel with it-were to decide that that principle should be abandoned and disappear entirely from our legislation, I would be quite in accord but I do not know that we should centre our objections to it upon the Bank Act in particular. I have only this to say, that my information is that in the light of experience this subclause has not lent itself to abuse and so far as I am aware no

harm has been done to the public by reason of that provision having been in the Bank Act for a period of years.
There is, I know, in some quarters the opinion that there should be the right on the part of municipalities to issue scrip. There are no doubt instances where that privilege might be exercised with benefit to the particular community and with no detriment to the banking situation in the country, but if that policy were recognized as a general thing it would have a tremendously disturbing effect upon the country's currency and credit which, I say, should be entirely under the control of the central authority.


George Gibson Coote: I am glad the minister holds subclause 3 rather in, I suppose I might say, disrepute. As we are considering this whole section, I will suggest two amendments here which I would like to have considered separately. The first one deals with subsection (2). I move:
That section 138 be amended by striking out subsection (2) and substituting the following:-
Such penalty shall be recoverable with costs in any court of competent jurisdiction by the Attorney General of Canada.
The section now reads:
(2) Such penalty shall be recoverable with costs in any court of competent jurisdiction by any person who sues for the same.
It seems to me that if anyone is going to sue for this it should be the attorney general.


Edgar Nelson Rhodes: I wish only to say that
the proposed amendment should be considered in the light of the fact that there still remains in the section subsection (3). It would appear to me that my hon. friend should at least advise the committee that he proposes to move an amendment in connection with it.	[DOT]


George Gibson Coote: If I may interrupt I will
state the amendment which I propose to move to subsection 3. The section now declares that:
A moiety of such penalty shall belong to the person suing for the same, and the other moiety to His Majesty for the public uses of Canada.
My objection to that section is the moiety belonging to the person who sues for the same. Under subsection 2 as it now stands there is of course an encouragement for someone to come and sue simply to get the moiety. I move:
That section 138 be amended by striking out subsection 3 and substituting the following:-
Such penalty shall belong to His Majesty for the public uses of Canada.

These two amendments when read together would provide that the penalty should be recoverable in any court of competent jurisdiction by the Attorney General of Canada, and that the penalty should belong to His Majesty for the public uses of Canada. It deletes the provision for a moiety, and would do away with that encouragement to any person to institute action to get a moiety of the fine. I think the two amendments as proposed are very reasonable and I hope will meet with approval.


Edgar Nelson Rhodes: As far as the object my
hon. friend has in mind is concerned I am in accord with it, but perhaps the amendments might be revised a little and incorporated in one subsection. There seems to me to be no object in having two subsections dealing with the one thing. If it is the sense of the committee, perhaps we could by redrafting incorporate the two subsections in one. I would not feel competent to express myself upon the legal effect, but with the object my hon. friend has in mind I am in agreement.


George Gibson Coote: I am very pleased at the attitude the minister has taken in this regard, and shall be very glad to leave the matter of drafting to the department. Perhaps the item might stand for the officials to draft something satisfactory to the minister.


Mr. CARMICHAEL:: I am not sure of the meaning of this proposed amendment. I understood the term proposed was, the Attorney General of Canada. Does that mean that one official in the dominion will take action in any province, or does it mean the attorney general of any province? As a matter of fact I believe the term is solicitor general rather than attorney general, is it not?


John Thomas Hackett: There is in all legislation which affects the crown-and currency is now to become almost the exclusive prerogative of the Central Bank, which will be very closely associated with the government-a sanction for infringing on any of its rights. Theft of a piece of rope from the Marine department, theft of a postage stamp from the post office, and similar shortcomings of relative insignificance are visited with very heavy penalties. Defacing money or fabricating money has been classified with misdemeanours of this type. The issue of money or the attempt to issue something that has the appearance of money has always since the very first days of the Bank Act been considered very reprehensible, and severe penalties have been provided to preserve from encroachment this right of
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issuing money. I do not know that there have been many people who have suffered under this provision, because there are sections in the criminal code which deal with similar offences. If we strike out subsection (3), do away with the moiety system, I do not suppose any great harm will result, but we are breaking in on the moiety system, which has been introduced, as the minister stated, and maintained in all legislation in which the property of the crown is involved and an attempt made to protect it. I think this much at least can be said against any change in the section.


Edgar Nelson Rhodes: Will my hon. friend from Shelburne-Yarmouth (Mr. Ralston) direct his attention to section 168? I am inclined to the view that if it should be the sense of the committee that the moiety system should be departed from in this act, our object would be accomplished by striking out subsections (2) and (3), because section 168 provides procedure which I think covers the case in point, and would make it unnecessary to have any provision whatsoever with respect to procedure in this section. If that is correct I think our object would be accomplished by merely striking out the two subsections, assuming that it is the will of the committee that that should be done, for I am quite content that the judgment of the committee should prevail.


James Layton Ralston: It looks as if that is the effect of section 168, if the word "imposed" means the same thing as the word "incur" in section 138. Section 1'38 says that every person-shall incur a penalty-, and section 168 says that the amount of the penalty imposed shall be recoverable at the suit of his Majesty instituted by the Attorney General of Canada. I do not know whether the word "incur" is used all the way through the bill. If it is, it is intended that the word "imposed" shall cover all those sections. To make it clear, and sure, I would amend section 168 subsection (1) to read, "The amount of all penalties imposed upon or incurred by" and so on. In this way we would make the proper provision.


Edgar Nelson Rhodes: I differ from the hon. member for Shelburne-Yarmouth in his construction of the section, although it would occur to me that if a penalty were imposed upon an individual-


James Layton Ralston: If it were incurred by him it would be imposed upon him.


Edgar Nelson Rhodes: But the point I make is that it could not be imposed unless it had
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been incurred. It would seem to me that the word "imposed" is more comprehensive, and would include the lesser term. However, I do not wish to argue with my hon. friend because I am prepared to accept his judgment as to construction.


James Layton Ralston: Other sections include the word "incurred."


Edgar Nelson Rhodes: Hon. members may take the sense of the committee on the wisdom or otherwise of deleting subsections (2) and (3). Then, if it is thought necessary, at a later period we could deal with section 168, so as to make it clear.


The CHAIRMAN (Mr. Smith, Cumberland) :: I think we had better deal with each subsection. Shall subsection (1) of section 138 carry?


Mr. IRVINE:: If the committee is going to deal with the section by subsections I should like to say something on subsection (1). Could we not deal with subsections (2) and (3), as to whether or not they should be deleted.


Ernest D'Israeli Smith: Subsection (1) stands.


Edgar Nelson Rhodes: Well, why not go. on with it.


George Gibson Coote: If the chairman would accept an amendment, I would be prepared to move that subsections (2) and (3) be deleted. Probably that would serve the purpose of testing the committee.


Edgar Nelson Rhodes: I cannot see any object in allowing subsection (1) to stand, and proceed to deal with (2) and (3). It seems to me we had better proceed with them in their proper order.


William Irvine: We have been passing the whole sections, without going into details, except in cases where there were amendments.
I had intended to raise some objections to the whole clause, and I thought it would be better to do so after the amendment now before the committee had been disposed of. That was my intention, because the objections I wish to raise are more fundamental than even the objections which have been taken to subsections (2) and (3). This is the clause which grants a complete monopoly to the banks of Canada on not only the currency, as was pointed out by the minister, but on the credit of the country, something which is very much more important than currency, so far as volume and use are con-
cerned. I agree with the minister that we must have protection for the country's currency. I presume he means there must be protection for the notes of 'the Bank of Canada which will be issued when that institution functions, and the bank notes now being issued by the chartered banks.
In connection with this section however we are more interested in retaining a little power from the banks for other institutions such as municipalities, and so on, so as to use credits which the banks may not be willing to grant them under banking policy. I presume it is within the knowledge of every hon. member of the committee that there are cases when as a matter of banking policy a municipality may not be allowed to borrow. Nevertheless, that municipality by the issuing of certain credit instruments, if it were not prevented by this section, could not only carry on successfully its public services, but could succeed in collecting a great percentage of the taxes which otherwise would not be collected. We have instances in the province of Alberta where municipalities, despite this act, have actually issued what they call scrip, have issued it with success and have been able to carry on. But they did that only when they were refused credit by the banks, under ordinary banking policy. While it may be necessary to grant certain powers to the banks, under subsection (1) and while it is necessary to protect the currency of the country, I say it is also necessary that the municipalities of Canada should have the right to use their own credit under circumstances when, owing to banking policy, credit is not available to them. I suggest there should be an amendment to the principal section making such provision.


Mr. LUCAS:: I should like to endorse what the hon. member for Wetaskiwin has said, and should like to have some information on another matter. Section 138 provides a penalty for anyone other than a bank issuing money. If I may be permitted to refer to the preceding section, namely, 137, which I believe has been passed, and which provides a penalty for banks issuing an excess of notes,
I would say -that on September 30, the banks had a total note issue of 8141,000,000; there was current gold and subsidiary coin amounting to $48,886,963, and dominion notes amounting to $127,214,267. On top of that the banks had issued credit to the amount of $1,427,723,609. The information I should like to get is as to where in this Bank Act authority is given to the banks to create this credit which serves the country just the same as money. Dominion notes are issued

Bank Act
under the Dominion Notes Act, currency is issued under the Currency Act, and banks are prevented by section 137 from an excess issue of notes, but when it comes to issuing credit, upon which 90 per cent of the business of the country is done, there is apparently no limit as to what the banks may do. As a matter of fact dominion notes, bank notes and subsidiary coin are, in other words, just chicken feed or what may be termed the small change of the country, while 90 per cent of business is done by cheques. Those cheques are issued on credit created by the banks. We find that in 1929 the banks had total loans of 82,358,544,498 extended on 8188,740,522 composed of current gold and subsidiary coin and dominion notea. But in 1933 the total loans were reduced to 81,427,793,609, or a reduction of $930,000,000 in four years. I should like to know by what authority or where in the Bank Act is authority given to the banks to create credit to the extent of carrying on 90 per cent of the business of the country, when a penalty is imposed by a section in the Bank Act on any other person issuing anything which will pass as money, and when the banks themselves are limited in the issuing of notes.


Edgar Nelson Rhodes: Mr. -Chairman, the question raised by my hon. friend from Wetaski-win and also by my hon. friend from Camrcse are large questions of general policy which, even if I felt myself competent to discuss them at length with them, are not ones which properly arise in dealing with the carpenter work of the construction of this section in committee of the whole. I hope that my hon. friends will not expect me to reply in rebuttal of his observations with respect to the general question of credit and of the use of cheques as currency, and so forth. That issue does not arise'in considering this section at all. I hope that he will not consider me discourteous if I do not attempt to cover again the ground which has been so frequently covered not only in committee but on the second reading of the bill.


William Thomas Lucas: Mr. Chairman, I was not
a member of the committee and I do not know what discussion took place there, but I am sure that if any answer was given or decision arrived at in the committee it would be very easy for the minister to say what that was. We know what the penalty is today for anyone who is termed a counterfeiter or produces money in any way outside the terms laid dowm in the statute. He will soon find himself behind the bars. This section is exercising the minds of a great many people in Canada to-day, and I think it is generally
recognized that ninety per cent or even more of the business of the country is done on credit created by the banks, and I think we should have something more definite than what the minister has said in regard to the authority given to the banks to create this form of money.


George Gibson Coote: If my memory serves me
right, Mr. Chairman, we had great difficulty in the committee getting a definition from certain bankers of the term money. On one occasion I suggested that bank deposits were money, and the majority of the committee disagreed with me and said no. I think a very interesting point has been raised by the member for Camrose. It seems to me it is this: Does the difference which he mentions between the total deposits in the banks and the amount of actual currency involved consist of a substitute for money? Is it a substitute for money? If it is, why should we impose a penalty of $400 on anyone outside the bank who issues a substitute for say 820 of money even though there might be plenty of assets behind it? Since the discussion has taken place on this section I am wondering if that is not the real purpose of this section to give the banks in an indirect way the right to issue a substitute for money and to withhold it from everyone else. Perhaps the minister would like to inform us on that point.


Edgar Nelson Rhodes: All I can say to my hon.
friend is that if with all his wide knowledge and his astuteness he was unable to get an answer from those who make the practice of handling money and currency their life work, surely he must spare such a humble individual as the Minister of Finance by not pressing the matter further.


William Irvine: The point is that the minister and this committee are considering subsection 1 of section 138, and we ought to know what powers we are conferring on the banks by that subsection. The question is whether or not their right to handle cheques and other instruments is a right to the banks to issue a substitute for money. If it is why should we penalize, say, a municipality which might on equally good collateral issue a substitute for money?
Subsection agreed to on division.


William Irvine: And only under protest.


Ernest D'Israeli Smith: I have two amendments here to subsections 2 and 3, by the hon. member for Macleod. Are these withdrawn and another one substituted in their place?
3S00
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George Gibson Coote: If I have the consent of
the committee, Mr. Chairman, I would withdraw those amendments and move that subsections 2 and 3 be dropped.


Edgar Nelson Rhodes: Strictly speaking, that is
not a proper form of motion because it is a direct negative. I think my hon. friend would accomplish his purpose if he would move that section 138 be amended by deleting subsections 2 and 3. I think that that would be an amendment.


George Gibson Coote: I move accordingly, Mr. Chairman.


Mr. BROWN:: I do not presume to enter
very deeply into a discussion of the Bank Act, but I must say that I am heartily in sympathy with what has been said in opposition to these subsections. They are just as offensive as that clause in the criminal code which provides that a man may sue for a prize that has been won in a lottery. I think that is objectionable to most people, and I think these clauses are also. I do not think a private individual should be allowed to benefit by a penalty that has been imposed by the courts, and I would be heartily in sympathy with striking out these two clauses. It is altogether likely that the matter is sufficiently covered, as the Minister of Finance has pointed out, by section 168.


Archibald M. Carmichael: On first hearing the objections to subsections 2 and 3 of section 138 I agreed with the viewpoint that was put forward. I asked the question as to whether it was the attorney general in one person that was meant, and without having got any answer I believe that that is the intention of section 168, that the Attorney General of Canada is the only individual who would likely be qualified to take action in the case of any violation as outlined in subsection 1 of section 138. I would point out that subsection 1 outlines that any person who issues a cheque wrongly will not have any penalty imposed upon him or any action taken against him except upon some person or persons knowing the facts of the case submitting them to the Attorney General of Canada who resides in Ottawa. That means that the procedure would be very slow and very cumbersome. I recall that just last fall someone in my own community issued a cheque for I think $20 in the name of a certain prominent farmer in the community, cashed the cheque by buying some dry goods, and took the balance of the money and got away. He was detected within a day or so, but under this proposed amendment the only action that could be taken against that individual [The Chairman.]
would be by the farmer notifying Ottawa, and Ottawa instituting an investigation and getting the facts of the case. Then action might 'be taken. It seems that while we are moving along a line that sounds good and looks good we are making it so slow of operation that we shall have such cases multiply throughout the dominion and have a very, very ineffective means of checking them.


William Irvine: I think some of the lawyers should answer that.


Mr. BURY:: Mr. Chairman, I have listened to what my hon. friend from Kindersley has said, but surely that would not be a case of issuing a cheque for the purpose of its circulating as money. It would, of course, come under the clauses of the criminal code, but I do not see how you could treat the cheque as a document which had been issued for the purpose of circulating as money. It had been issued to obtain either cash or goods for the individual, but it seems to me that that is a totally different thing. This section is not intended to cover such a case as that mentioned by my hon. friend.


[Stage Direction]
Amendment agreed to.
Subsection as amended agreed to.
On subsection 4-Intention presumed.
George Gibson Coote: I should like to ask for a little information on this subsection. The subsection states that if any such instrument is made for the payment of a less sum than twenty dollars, and is payable either in form or in fact to the bearer thereof, and so on.
I should like to know why the sum of twenty dollars is used. Exception (a) states:
A cheque on some chartered bank paid by the maker directly to his immediate creditor.
Does that mean that where a cheque is payable to bearer and is less than $20 and goes through three or four hands it can be presumed that it is a substitute for money?


Edgar Nelson Rhodes: I must say that I am unable to get from the officials of the department a clear explanation as to why this is limited to $20. They advise me that this thing is likely to occur in the smaller denominations and it seems to me that that is the only explanation I can give to my hon. friend.


George Gibson Coote: A person making a cheque for $25 would be in a different category if he wanted to substitute it.


John Thomas Hackett: There are no $25 bills.

Bank Act


George Gibson Coote: Is this the meaning of this paragraph (a): If a cheque was drawn on a trust company instead of a chartered bank is it presumed that there is an intention to pass it as money, and would the issuer be liable to a fine of $400?


Edgar Nelson Rhodes: This section is confined entirely to banks and has no reference to cheques drawn upon trust companies.


George Gibson Coote: I am trying to get the meaning of this paragraph (a). Surely it is not the intention to differentiate between a cheque drawn on a chartered bank and one drawn on a trust company, or a loan company or on any organization which is permitted to take deposits. I have had no training in the law and perhaps I am handicapped in discussing these acts.


Edgar Nelson Rhodes: There are many things which I would like to understand. I may say that I asked the inspector general of banks why this distinction is made and he tells me that he has never before heard the point raised.


George Gibson Coote: I have never heard such an explanation given in connection with any other bill and this seems to put the Bank Act in a class by itself. I think section 138 proves this. As members of this committee we are charged with the responsibility of looking over these sections and trying to understand them before they become law. This is why I asked the minister for an explanation and I assure him it is not done to embarrass him in any way. I have often wondered about this matter. I think I asked for an explanation in committee but I may not have pressed the point to the extent I am pressing it to-day. If the officials or the minister have an explanation to make I should be very glad to have it, but I will not delay the committee unduly.


Edgar Nelson Rhodes: I have given my hon.
friend the only information I can give him on the point. That is the best information I can get from the inspector general of banks. However, I shall make further inquiry apart altogether from the committee and if I can secure some additional information I shall be delighted to pass it on to my hon. friend.


William Irvine: Supposing the minister gave me a cheque for $25 and I owed the hon. member for Macleod (Mr. Coote) the same amount; if I endorsed that cheque over to the hon. member, would I be violating this section?


William Irvine: How do you know that
such an instrument is not designed to circulate as money? How do we know when an instrument is circulating as money and how do we know when it is not?


Edgar Nelson Rhodes: I would say that that is
a question for the court.


William Irvine: It is the question which
is before us at the moment.


Edgar Nelson Rhodes: In the case referred to by my hon. fneud it would be quite proper for him to endorse the cheque over in settlement of the amount. That would not be a case where a cheque was intended to circulate as money.


William Irvine: Would that be a case where it was not circulating as money?


Edgar Nelson Rhodes: Yes.


William Irvine: When does a cheque circulate as money?


Edgar Nelson Rhodes: That is a question upon
which I would not be able to give a conclusive opinion.


William Irvine: It seems to me that it
would be circulating as money in the instance I gave.


George Gibson Coote: There is another question
I should like to ask in connection with lines 35 and 36 of the section, which contain the phrase "the intention to pass the same as money shall be presumed." I should like to know if it is necessary to use those words as the}' seem to me to incorporate something into the law which is hardly fair, particularly in connection with a law such as the Bank Act. This presumes that a person is guilty of circulating something as money without the necessity of the prosecution having to prove that it is so.


Ambrose Upton Gledstanes Bury: In the instance mentioned by
the hon. member for Wetaskiwin (Mr. Irvine), if he passed the cheque on to the hon. member for Macleod (Mr. Coote), the hon. member for Macleod would find it very difficult to pass it on to someone else without his endorsation. In other words, a cheque cannot pass from hand to hand without the endorsation of the prior holder, but this is not so of money. Money passes from hand to hand without endorsation; in other words, it carries its value within itself, so to speak. It appears to me that that is what is meant by saying that a man is trying to pass an instrument as currency and circulating it as money. In order to use a cheque it would have to be endorsed by


John Thomas Hackett: No.
Bank Act

every person who passed it. If that went on it would be circulating as currency before it was cashed, but there would be a limit to the number of endorsements which could be made upon the back.


William Irvine: There would be a limit but if you violated the act once I suppose it would be just as bad as if you violated it ten times. While the point raised by the hon. member for East Edmonton (Mr. Bury) is a worthy one, I doubt whether he will find the definition of money which he gives. I imagine that anything that satisfies a $25 debt is money, so far as we understand the functions of that instrument. In other words, anything that does what money does is money, whether it be a cheque or anything else.


Ambrose Upton Gledstanes Bury: I cannot follow my hon. friend in that. I could produce the same effect bydriving a steer to his farm. The steer would not be money. We are talking of money as currency. Each time a cheque is endorsed it is not being used as currency, it is being used purely as a negotiable instrument requiring the endorsation of the present holder. As long as it goes on being endorsed, the custom and practice of business treats it as merely a negotiable instrument transferable in that way. But if you try to pass it on from hand to hand without endorsation, without an assignment by endorsation, you are then treating it as something that is per se currency, which requires no such formal act of assignment and carries with it no liability and no guarantee of its value from its prior holder. If you sign a cheque and I endorse it and somebody else takes it from me and endorses it again, each of us is liable, having put his signature on the back of it to give it validity and value. But you do not do that with a dollar bill or coin currency, because it is currency. As I look at it, as long as you treat a cheque as a cheque, requiring endorsation for assignment-endor-sation and delivery-and the assumption by the prior holder of liability in case it is not cashed, it is not being treated as currency properly speaking.


Edgar Nelson Rhodes: In the endeavour if possible to get a little more light in view of the interesting queries of my hon. friend from Macleod, I have looked up Falconbridge and I find in the edition of 1929 the following:
This section dates from 1890, and was divided into its present subsections in 1906, ... the joint effect of this section and of the

Dominion Notes Act, is to reserve to the chartered banks and to the government of Canada, the exclusive privilege of issuing notes intended to circulate as money.
The interesting point about this authority is that not a single case has arisen out of the act, which is somewhat exceptional. So that my hon. friend will not wonder that when I put the query to the inspector general of banks he was unable to give me any more light than I was able to pass on to the committee and to the hon. gentleman. The section has never even occasioned a suit so far as we know.


George Gibson Coote: I believe a suit was entered against at least one municipality and one school district in Alberta, although I do not know how it was decided. I think it was some time in 1933. A lawyer friend of mine gave me the following memorandum in regard to section 138:
This section dates from 1890, and was divided into its present subsections in revised statutes, 1906, chapter 29, section 136. It relates to the unauthorized issue of notes for circulation, and its primary purpose is to prevent the issue of notes by anyone except the banks; that is to say, the joint effect of this section and section 60 of the existing Bank Act, together with the Dominion Notes Act, is to reserve to the chartered banks and to the government of Canada, the exclusive privilege of issuing notes intended to circulate as money.
That may be the intention, but it seems to me that the effect goes further and indirectly confers upon the banks the power to issue a substitute for money. That may not be the intention of the act but it may be the practical effect of it. Does the minister think that it is necessary to say, in line 35:
. .. the intention to pass the same as money shall be presumed ...
Is not that putting the onus of proof in the wrong place? Anyone issuing something that might possibly be regarded as a substitute for money is to have the onus of proving that it is not, instead of having that onus placed on the prosecution, to prove that it is a substitute for money.


Edgar Nelson Rhodes: It is in a sense putting the onus upon the individual who passes something intended to be used as money, but it is only in the case of those documents or what not which obviously upon their face are intended to be used as money, and it especially exempts cheques, promissory notes, bills of exchange, bonds or other undertakings, so that in such cases the presumption does not follow.

Bank Act


George Gibson Coote: Take the case of the municipality that has been sued under this provision. It seems to me that the effect of these words, so far as the municipality is concerned, is to place the onus on it of going into court and proving that certain instruments are not intended to circulate as money. It does seem to me that this is something a bit unfair to put in the act. The onus ought to be on the prosecution to prove its case to the satisfaction of the court, rather than on the person sued to prove that it is not intended to circulate as money.


William Irvine: I think that among the definitions we should have a definition of money, since it is a very important part of the act. If the interpretation that has been given by the hon. member is a correct one, I would not have so much objection. If the municipality issued an instrument that was acceptable to a man who had built a highway or a road, and acceptable to the grocer for goods, and paid back in taxes, and if that were not money, then I am satisfied. But I should like to be assured that the courts will not hold a municipality doing such a thing as having violated this section of the act by circulating an instrument intended as money.


George Gibson Coote: I wish to bring this matter to some finality, because there is a good deal of information that some of us would like to have in regard to the section and which it seems difficult for us to obtain-perhaps we are going too far in asking for all these explanations. I would move therefore that section 138 be amended by deleting therefrom subsection 4. It seems to me that all that section 138 is designed to do is covered in subsection 1. I do not think that subsection 4 is necessary, and it is so ambiguous that I do not see how anyone can know what it all means.
Amendment negatived.


George Gibson Coote: I move that section 138 be amended by adding as subsection 5 the following:
The provisions of this section shall not apply to warrants, certificates or like orders issued by and redeemable by a municipality.


Edgar Nelson Rhodes: That amendment cannot
be accepted. The dominion government is endeavouring to centralize its undoubted sovereign power to issue money and while hitherto that authority under the Bank Act, has been delegated to the banks, under the provisions of the Bank of Canada Act the proposal is to withdraw that right gradually
until the whole issue rests with the Bank of Canada. As I pointed out in the citation which I gave before, the object is to preserve for the dominion government the exclusive privilege of issuing notes intended to circulate as money. If we had a thousand agencies or as many municipalities as there are in the dominion issuing money we would have chaos and the obvious objection to the amendment appears on its face.


George Gibson Coote: It is not my intention to give the municipalities power to issue money, but I stated to the committee this afternoon that in at least one municipality in Alberta, a school district had suit entered against it because it was issuing certain forms, I do not know what name to give them-


Mr. HANBURY:: Scrip.


George Gibson Coote: I do not know whether it is really proper to call them scrip because I do not think there is any good definition of scrip and certainly the act itself contains no definition of scrip. They might be called something in the nature of tax warrants. I do not think I would be moving this amendment if clause 138 as it stands were not so ambiguous that it might be considered that any order or warrant of this nature a municipality might issue would render them liable for suit. It is perhaps unfortunate we do not know whether that case has been finally decided, and, if so, what has Been the outcome. But we know in some other countries municipalities that have made very good use of the issuing of what is termed scrip have been prevented by the action of banks in their own country from carrying on the practice. The same thing may prevent municipalities in Canada from issuing anything at all in the nature of orders or warrants which would enable them to put some of their idle people to work and to carry out local improvements through the labour of those men. Anyone who reads clause 138 and particularly subclause 4 must admit it is very difficult for a municipality to decide whether anything it may issue of that nature will not be a contravention of the section. Seeing that we cannot have subclause 4 stricken out, it seems to me that there is nothing left to do but to move the amendment which I have. I must admit we have had some difficulty in deciding upon the proper wording so as not to make the amendment sound unreasonable or unacceptable or offensive to the government. It asks simply that the provisions of this clause shall not apply to warrants, certificates or like orders issued by and redeemable by a municipality. I take it for granted
Bank Act

a municipality should have the right to issue something of that nature. Clause 138 gives to the banks an absolute monopoly of issuing anything that is money or even a substitute for money. Some of these municipalities have plenty of goods and services to exchange but they have no money and can get none and if by issuing certain orders of their own they can have unemployed people put to work, collect back taxes and have local improvements done, I do not want to be a party to putting into this legislation something that will prevent them from doing so.
I do not wish to delay the committee but I would like to draw attention to what has been accomplished in certain municipalities. The best example I can give' at the moment is one the story of which is contained in a book by Professor Irving Fisher entitled Stamp Scrip. It relates to the experience of the Austrian town of Woergl where in 1931-32, 1,500 people had lost their jobs because a number of factories had closed their doors. The taxes, therefore, were in arrears, and the town itself was almost as down and out as these 1,500 of its inhabitants. The mayor of this town, I think a very shrewd man, adopted the idea of issuing stamp scrip. He had watched with very much interest a similar experiment in a smaller town and he arranged for the issue of a small amount of this stamp scrip. I am going to read only a paragraph or two at the end of the article. It says:
According to plan, on August 1, 1932, 32,000 schillings worth of the scrip (equivalent to about $4,500) was issued, in denominations of one, five and ten schillings.
This would amount to about one dollar per head of population.
This amount was later found to be in excess of the actual need, and instead of following an "inflationary policy," only about one-third of the issue or less was kept in circulation through reissues, the rest remained with the city.
These are the results. It says:
Soon everybody accepted it-
That is the scrip.
-without hesitation, because everybody else accepted it. The only cases of permanent refusal to receive the scrip are the post office and the railroad, both of which are government institutions with interests primarily outside of the vicinity where the scrip is supposed to circulate.
The attitude of the Austrian government has not been hostile.
As to the rate of turnover, the mayor reports that the amount of the first wages paid' has returned to the city twenty times a month.
The other facts are contained in a report which the mayor of Woergl made to the Tyrol state government, January 1, 1933.

I would like to draw the attention of the committee to these, I think, wonderful results:
Taxes had been in arrears from 1926 to 1931 as follows (year by year):
21.000	schillings.
26.000	schillings.
28.000	schillings.
31.000	schillings.
61.000	schillings.
118,000	schillings.
But after the scrip was issued, not only were current taxes paid (as well as other debts owing the town), but many arrears of taxes were also collected. During the first month alone, 4,542 schillings were thus received on the arrears. Accordingly, the city not only met its own obligations but. in the second half of 1932, executed new public works to the value of 100,000 schillings. Seven streets aggregating four miles were rebuilt and asphalted; twelve roads were improved; the sewer system was extended over two more streets; trees were planted and forests improved, and permanent jobs were given to from thirty to fifty of the 1,500 unemployed; but probably a powerful influence has been exerted to prevent any increase of unemployment, by keeping business active.
In this book there is related the experience of certain cities in the United States which made excellent use of the issue of scrip. I will not delay the committee any longer but I would repeat that if people in municipalities have goods and services they wish to exchange and they have no money, why should parliament say that they cannot issue anything in the nature of municipal orders or warrants which will enable them to exchange their goods and services, collect their back taxes and put their unemployed people to work? I do not think such action on their part should be considered a violation of clause 138; it is certainly not violating the purpose which clause 138 is intended to serve.


Archibald M. Carmichael: This proposed
amendment does sound quite unorthodox, and therefore I presume there are many in this chamber to whom it does not appeal. But I would like to remind the committee that conditions now, especially in our western country, are quite different from what they were until some four or five years ago. In times past rural municipalities could have their road work performed, and through a line of credit given them by a bank could issue a cheque in payment for it, the person performing the work could negotiate that cheque and with the proceeds buy his groceries and carry on. For the past three or four years that condition has not prevailed, especially in rural municipalities in western Canada. The road work is still to do and there are still people to do it, but many of our municipalities are not able to get a line of credit at

Bank Act
the bank. The road work should be done perhaps in the months of May and June, and the taxes for the payment of same are not available until .perhaps September or October. There is a gap of three or four months in which the municipality has no money to pay the men who do the work. Those men have to buy their groceries, they have to have money to carry on current expenses. Under this proposal, as I understand it, it would be lawful for a municipality to issue a warrant, call it a day labour pay sheet or any other name you choose. They could give that instrument to the man who did the work in May or June, he could take it to his hardware store or his grocer and pay his account. The hardware man or grocer would hold the instrument until the fall and then turn it in to the municipality and secure the cash. As I understand that is what the amendment makes provision for. If that is so I think it is an amendment that this committee Should consider. It will help a situation in western Canada which at the present time is bad and in need of redress.


Edgar Nelson Rhodes: In practice, if a municipality finds it necessary to resort to certain expedients to meet a situation, it has been found that the situation can be met without difficulty arising from the Bank Act. Section 138 is only intended to apply to those cases where there is an attempt to issue documents which are to pass as money. The moment we attempt to open the door, giving authority to hundreds and thousands of municipalities in this country to issue money to circulate alongside of and perhaps displace the currency of the country as a whole, that moment we invite disaster. For that reason we cannot recognize any impairment of the exclusive right of the central authority, the Dominion of Canada, to provide for the control and issuance of that which passes as money. We cannot accept the amendment.


William Irvine: I think most of us will agree with the minister as to the necessity of centralized control of our monetary system, and that it would never do to let either individuals or corporations or municipalities issue currency and so forth. I think we all agree on that principle. But may I remind the minister that in our centralization we have confined the entire credit resources of this country to certain private institutions; first, our chartered banks, and second the Bank of Canada, which is also to be a private institution; that the basis upon which all these institutions operate is the wealth of the country or the credit of the people of the country; that these institu-74726-241
tions will operate under a certain well accepted monetary policy,-that is well accepted by them-which monetary policy frequently does not operate advantageously to many of the people of this country. I would remind him further that there are times when it almost ceases to operate at all. But when those times come the people must still live, they mu3t still build their sidewalks and finance their public institutions and collect their taxes, whether the banks say so or not. When such circumstances arise it is only reasonable that a municipality should have authority to use whatever resources may be available to enable it adequately to perform the public services. Now according to the best definition which this committee has obtained of money, which was given this afternoon by the hon. member for East Edmonton (Mr. Bury), these warrants asked for by the amendment would not be regarded as money. Moreover they would only circulate within the confines of the municipality that issued them. It does seem to me that it is not wise for this committee to prevent a municipality from using its own resources in the interests of its own community, by the use of any instrument that it may devise for the performance of these services, and to prevent them doing that in the interests of private bankers or private banking institutions. I hope the committee will consider the amendment favourably in this respect and permit municipalities to use their credit to carry on their public services, especially at times when banks pursuant to their policy cannot extend credit in the usual way, and by whatever name they choose to call the instrument by which they do it.
Amendment (Mr. Coote) negatived: yeas, 6; nays, 20.


[Stage Direction]
Subsection agreed to.
Section as amended agreed to on division.
Section 151 agreed to.
On section 166-Unauthorized use of the title "bank" etc.
Mr. WILLIS:: Mr. Chairman, I have an amendment. The present section 166 forbids the use of the expressions "savings bank" "banking company" "banking house" "banking association" or "banking institution." The purpose of the amendment is to make the section consistent and to include in it the word "banker." The amended section would read as follows:
166 (1) Every person using the word "bank" "banker" or "banking" either alone or in combination with other words, or any word

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or words of import equivalent to any of the foregoing in any foreign language, in a sign or in an advertisement, or to describe his business or any part of his business, without being authorized so to do by this act or by some other act of the parliament of Canada is guilty of an offence against this act.
The whole purpose of the amendment is to include the word "banker" as the other words namely, "bank" and "banking" are now included. That is to say, it appears to me to be entirely inconsistent that the present section should forbid the use of the expression "savings bank" but not "savings bankers." It forbids the use of the expression "banking company" but not "bankers company." It forbids the use of the expression "banking house" but not "bankers house." The same applies for "banking association" and "banking institution." These are forbidden, but the section does not forbid the use of the words "bankers association" or "bankers institution." Those are the present limitations.
It seems to me, first of all, that we must be consistent, and that therefore we must include the word "banker" as well as the words "bank" and "banking." We should, I contend, be fair to those different institutions in Canada, including provincial savings offices. We forbid them to use the word "bank"; we forbid them to use the expression "savings bank" or to use the word "banking"; yet we allow brokers, without any control over them at all, to use the word "bankers." That is to say, in my view the use of the word "banker" implies the existence of a bank. To a degree, then, to use the word-


Ian Alistair Mackenzie: What about subsection (2) of section 166? Does that not refer to a "banker"? I have looked at the subsection only casually.


Errick French Willis: I have not looked at subsection (2), but subsection (1) is very clear in its use. It refers to a foreign language, and in so far as the private banker is concerned hon. members will notice that the amendment provides such banker must be authorized by some act of the parliament of Canada. That is to say, if there is an authorization, or if the parliament of Canada desires to authorize, then there may be the use of the word "banker." It seems to me that to use the word "banker" or the expression "investment banker" gives a sense of security which is not present. We should in my view carry out the spirit of the act. At the present time we debar them from the use of these various combinations of words, but we apparently overlooked the word "banker", or

it was left in order to accommodate those who at that time had private banks and were private bankers.
We come directly, then, to the question of investment bankers, and the Investment Bankers' Association of Canada. Mr. Ward Pitfield appeared before the committee, the gentleman who is president of the Investment Bankers' Association of Canada. May I say that I have viewed the reports of that association, and I find that they include many of the outstanding bond dealers of this country. May I say, further, that I examined the association's report for the year 1929, and I found that among its membership were included some who later went into the institutions of this country.


Wilfred Hanbury: On government relief.


Errick French Willis: Government institutions.


Mr. GARDINER:: Sane, or otherwise?


Errick French Willis: 
Edgar Nelson Rhodes: Mr. Chairman, with the
object that my hon. friend from Souris has in mind I am in entire sympathy. I do not think there is any question, if we were starting out with the Bank Act, with a clear field from the beginning, that such provisions as he has included in his amendment would be passed without hesitation. I think the reason why the section was not wider in its scope in the earlier years was that when the Bank Act first came into being there was a number of small, individual private bankers, and the name was not included at that time I believe in order to protect them in their businesses which they had acquired long before the Bank Act came into existence. They have now very largely, if not entirely, disappeared, and for that reason the inclusion of the word " banker " does not have the same force as it had at the inception. My
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understanding is that when this section was dealt with in the banking and commerce commitee during my absence it was the sense of the committee at that time that the advisability of adopting this amendment was a question which ought properly to be left to the committee of the whole house rather than be decided in the banking and commerce committee.
I have only one observation to make. If the so-called Investment Bankers Association is a body corporate it is a question in my mind whether the rights which they hold have anything like the same force as in the case of the old banker who was in business before the Bank Act came into existence. I think we should surround the Bank Act with every conceivable safeguard to protect the public from those who might use names which would have the effect of leading an individual to believe that he was dealing with a chartered bank. I do not know that the rights of the Investment Bankers Association would be prejudiced if this amendment were to pass. It seems to me they ought to be able to conduct their business under a corporate name, such, for instance, as the Canadian bond dealers association, or some similar name. At all events, so far as I am concerned, I would like the committee to deal with the amendment of my hon. friend from Souris on its merits.


Ian Alistair Mackenzie: I agree with practically every word the minister has said, but we must realize that the permissions of subsections 1 and 2 of this section were inserted for a very definite purpose. In subsection 2 the word "banker" is specifically used, and from subsection 1 it is deliberately excluded. That has been the case for a great number of years, as the minister said, and it was done to protect certain vested interests. It is a question now whether by passing this amendment we are doing injury, without notice, to any interests. I quite agree that our main duty is to protect the public interest. I would suggest-I do not know if it is possible-that we might have some time limit, give them say, a year's notice or two, and that after that the word "banker" could not be used. I think it is somewhat unfair by an amendment moved in committee of the whole to abolish immediately the use of the word from the corporate title, and so Mr. Chairman, I am in the strange position of agreeing with the mover and with the Minister of

Finance, and still suggesting that there may be some possibility of injury being done by passing the amendment moved by my hon. friend from Souris.


Errick French Willis: If there is no further discussion, Mr. Chairman, I just want to say a word in reply to what my hon. friend from Vancouver Centre has said in regard to injury without notice. I think it is sufficient for our purpose that the amendment was moved in committee, that at that time we consulted and obtained evidence from the Investment Bankers Association of Canada, and that since then the matter has been before the public through the press for that entire length of time. It seems to me therefore that if there was going to be any real injury done it would have been made apparent either at that time or since by the president of that association or by others including such men as Colonel Drew, in charge of the Ontario Securities Commission, or the matter would have been brought to the attention of the mover of this motion. I moved this amendment in the banking and commerce committee, and I again move it here. So I think that the fear of my hon. friend from Vancouver Centre is largely removed and that the benefits that will accrue from accepting this amendment are much greater than any fears that have been expressed.


[Stage Direction]
Amendment agreed to.
Edgar Nelson Rhodes: Since the committee has adopted the amendment of my hon. friend from Souris I submit that perhaps we should drop subsection 2.


Wilfred Hanbury: I should think so.


Errick French Willis: I move, Mr. Chairman, that subsection 2 of section 166 be deleted.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 59-Cash reserves in dominion notes.
Edgar Nelson Rhodes: When the committee was considering this section last night my hon. friend from Shelburne-Yarmouth (Mr. Ralston) pointed out that an amendment I had submitted at that time was defective in wording, and I agreed with him. I have had redrafted an amendment which I think fully covers the case and does away with the objection raised by my hon. friend at that time.

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It is as follows; and I now move, Mr. Chairman:
That subsection four of section fifty-nine of Bill 18 be amended by striking out all the words down to and including "Canada" in the seventh line of the said subsection and substituting therefor the following:-
(4) The next three preceding subsections of this section shall be repealed on and from the date on which the Bank of Canada is authorized to commence business and on and after that date the bank shall maintain a reserve which shall, subject to the provisions of the Bank of Canada Act, be not less than five per centum of its deposit liabilities within Canada and which shall consist of a deposit with the Bank of Canada, and of notes of the Bank of Canada held by the bank;
If there is any question as to procedure, I will ask my colleague, the Minister of National Revenue (Mr. Matthews) to move the amendment.


Mr. MATTHEWS:: I move accordingly.


Edgar Nelson Rhodes: I might say that the hon.
member for Vancouver Centre (Mr. Mackenzie) made some observations with respect to this section when we were previously in committee. May I suggest to him that if he desires to press these observations, it would be better to do so on the Bank of Canada bill. If, as a result of the consideration of that bill, this amendment would be out of line with that bill, an amendment could be made in ample time, either here or in the Senate.


Ian Alistair Mackenzie: I am not withdrawing my objection to the amendment and I shall reserve my rights to object.
Amendment agreed to on division.
Section as amended agreed to on division.


William Irvine: I understood that there
would be no objection to the reconsideration of any clauses which an hon. member might ask should be reconsidered. I am sorry I was not in the committee last evening when section 29 was passed and I should like to request permission to reopen that matter for a few minutes.


Edgar Nelson Rhodes: Certainly.
On section 29-Appointment of officers; salaries; security.


William Irvine: I desire to point out that
the employees of banks are not perhaps as well paid as they migh'. be, regardless of the fact that the bankers think they are getting a very good salary. These employees are required to take out bonds to protect the banks before they are allowed to operate. They are also required to contribute to a
pension fund over which they have no control and which is sometimes handled in a way not pleasing to the employees. They have no organization to speak for them. I took up this matter in the committee and suggested that they should be permitted to organize like any other group of labour.


Mr. MITCHELL:: I should like to move
an amendment to section 29, subsection 2 of the bill:
That section 29, subsection 2 be amended by adding thereto the following words, "such officers, clerks and servants may have the right to organize for the purpose of protecting their interests with regard to such matters as wages, salaries, hours of labour and general working conditions."
One can hardly understand why such a section as this should be found in the statutes of a modern civilized state. This subsection states:
Such officers, clerks and servants may be paid such salaries and allowances as the directors or such officer, in the case of appointments made by him, consider necessary.
During the last century we have come a long way from that position. This year in Great Britain they are celebrating the martyrdom of the Tolpuddle martyrs. These men are recognized throughout the civilized world as the fathers of the modern trade union movement. Because of a reduction in the very small wages paid at that time, these men formed what was to be a friendly society. They were tried, convicted and sentenced to transportation to Australia for seven years. Because of the agitation and the arousing of public opinion in Great Britain they were eventually pardoned and to-day five out of the seven now lie in churchyards around London, Ontario. This government adhered to the treaty of Versailles which contains certain labour sections which were drawn up under the guidance of a former Prime Minister of this country, Sir Robert Borden. At the present moment a committee is sitting in Geneva drawing up conventions for the guidance of the governments which are members of the League of Nations. Only yesterday the Prime Minister (Mr. Bennett) pointed out the contribution which the trade unions had made to the life of Canada and Great Britain. He referred to the forces which were arrayed against the working men and women in their efforts to establish what they considered to be civilized and social working conditions. In these late days we now have a section of a bill being passed by this parliament which gives to the bankers of this country complete control over the daily lives of
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the men and women engaged by them. I do not think any argument can be made against the right of these employees to organize if they so desire. This bill gives enormous rights to the institutions in question and I think it is only fair that some right should be given to the employees. They should be permitted to organize if they so desire to bring about what they consider to be fair conditions of employment. They should be permitted to negotiate around a common table with their employers in order to establish conditions which they think are fair and equitable. It gives me great pleasure to move this amendment and I hope hon. members of the committee will realize its justness and soundness. In my opinion it is in conformity with present day thought and with the opinion expressed yesterday by the Prime Minister.
I am not going to go into details of the low wages paid by the banks to their employees as they are already on record. These wages are a disgrace to any civilized institution. They ask men from eighteen to twenty-three years of age to work for as low as $300 a year. Ledger-keepers from the ages of nineteen to forty-six years work for as low as $400 per year. Tellers from the ages of twenty-one to fifty-five years, receive S500 per year. Accountants from the ages of twenty-one to forty-nine years receive $700 a year. Managers of the ages from twenty-seven to sixty-four years receive $1,200. Women clerks and stenographers from seventeen to fifty years of age receive $300. I ask that this committee consider this amendment on its merits. I might point out in conclusion that the principle of allowing these employees to organize has been endorsed by the Trade and Labour Congress, the recognized mouthpiece of organized labour in this country, at many successive conventions.


Edgar Nelson Rhodes: Although the section has been passed I am quite content to have it reopened so that my hon. friend may move his amendment.


Ernest D'Israeli Smith: Is it the pleasure of the committee to adopt the amendment?


Edgar Nelson Rhodes: This amendment or one very similar was moved when the act was under review ten years ago. It was moved by the present member for Winnipeg North Centre (Mr. Woodsworth) and it was pointed out to him by my predecessor, Mr. Fielding, that it was entirely unnecessary to have such an amendment in the act for the reason that the employees of banks already possess all

the rights sought by this proposal. Notwithstanding that fact, and the want of logic in asking for such an amendment, seeing that these individuals already possess all these rights, the hon. member for Winnipeg North Centre proceeded to move his motion in committee of the whole house when the bill was here. We are met with precisely the same situation this time. My hon. friend from Wetaskiwin (Mr. Irvine) moved this same amendment, in the same terms, before the banking committee, in face of the experience and the logic of ten years ago, and he is here to-day in advocacy of it again.
Let me say to my hon. friend from East Hamilton that I am just as much concerned about the welfare of labour as he is, and he may be rather surprised to know that I am an advocate and always have been of labour organization and unionism. But the question of the rights of labour a century ago, resisted by statute, is quite another matter, because to-day those rights are recognized, and the privileges which my hon. friend seeks to give the employees of banks are enjoyed by them to-day, and have been for years. So that we are wasting the time of the house in playing on words when it is suggested thaf we are conferring a benefit on bank employees by adopting an amendment of this kind. The hon. gentleman speaks of the justice and soundness of this amendment. Well, any justice he seeks is already enjoyed by the employees of the banks; and so far as soundness is concerned, I submit with all deference and respect to the hon. gentleman that it is absolutely unsound to move an amendment to grant the employees of the banks something they already possess and which has never been denied them. In these circumstances I think it would be the part of wisdom to reject the amendment.


William Irvine: I anticipated that the minister or someone else would raise that argument. I am quite aware, and I am sure the hon. gentleman who moved the amendment was aware, that any group of people in this country have a right to organize. But that is not the whole story. It is just because of my experience of ten years ago and since that I am still interested in pressing that this amendment go into the Bank Act. We have passed in this act 170 clauses which protect the bankers, but we have not put in one single clause that protects the people who work for them. I know, as I am sure the minister knows, that while it is legal for any group of employees to organize, there are very effective means of preventing them from organizing, and those means have been put

Bank Act
into operation in this country. I know of several instances where bank employees have endeavoured to organize into groups. But what happens? It is a simple matter to prevent them, since it is part of the bankers' policy to change their employees from one community to another, and so if in a city there is an organization of bank employees, a change is soon made and those who belong to such an organization are moved and scattered all over Canada. And this is done just as often as they try to organize.
I know that the bankers do not wish their employees to organize; they frankly say so and use all the pressure that is in their hands to prevent it. This section is after all only a pious wish; it does not compel anything. But if it were included in the act it would at least encourage the employees to organize and it would reveal to the bankers that the parliamentarians of the country would like to see their employees organize to protect their own interests.
I submit that since we have granted such great privileges to these banking institutions and protected and safeguarded them in 170 clauses in this act, it is not asking too much that at least we express in one section the willingness to permit the employees of the banks to organize in order to protect themselves. Surely we all agree that it is not a fair wage for a young man to work for a year for S300. We have seen statements by judges-and not long ago-in pronouncing judgment on some bank employee charged with perjury, that the wages paid in the circumstances were such as practically to compel the man charged to do what he did. In view of these circumstances, and others which I do not wish to discuss now in detail, there can be no doubt that there is need for organization on the part of the bank employees.
I do not doubt that the minister is as anxious to assist labour as I or anyone else; I do not question that. But it is a matter of one's point of view in this particular, and I know from experience with working men that it is easy to prevent the organization of bank employees.


Mr. VALLANCE:: If the amendment is
adopted, does the hon. gentleman suggest that it will prevent a bank from moving its staff around in order to prevent them from organizing?


William Irvine: No, but it would encourage all bank employees throughout Canada to organize, so that no matter where they were moved to they could immediately affiliate themselves with an organization.


Ian Alistair Mackenzie: Why not make it compulsory?


William Irvine: I would rather make it
compulsory, but I want to make the adoption of the amendment a little easier. If it were passed as merely a pious wish it would not be as effective as if it were compulsory, but if my hon. friend will move an amendment to the amendment to make it compulsory-


Ian Alistair Mackenzie: You
believe in compulsion; I don't.


William Irvine: -I should be glad to support it. In order to get my hon. friend's support I left out the compulsory feature.


Ian Alistair Mackenzie: It means nothing as it is now.


Edgar Nelson Rhodes: I do not wish to add anything further to what I have already said, except to express surprise that my hon. friend should ask parliament solemnly to take time to incorporate in a statute the expression of a pious wish. I do wish, however, specifically to take objection to his very sweeping statement that we have passed 170 sections for the benefit of the banks. The hon. gentleman was going very far afield when he made that statement. Let me say to him that the great majority of these sections are placed in the act for the protection of the people of Canada, and of the banking institutions themselves, for the people's protection. There are not one, two, three but dozens of penalty clauses and restrictions of a very serious nature upon the banks, and the tendency during each decennial revision has been to tighten up the Bank Act. It is true that certain privileges have been granted to the banks; they certainly must have some or they will not be able to do a banking business. I do not propose to enter into a discussion of that question, but it is very unfair and unjust that the impression should go abroad that we have spent our time for months past in the banking and commerce committee in preparing legislation which is designed to be of benefit to one section of the community, because that is not the case.


William Irvine: I also do not wish to be
misunderstood. I quite agree that nominally a banking institution does and should give great service to the public, and I am not objecting to that phase of the matter. Nevertheless I still insist that the major portion of this legislation is in the interests of that institution, safeguarding it in every possible manner, and I feel there should be at least one clause which would favour the employees of the institution.
Bank Act


John Vallance: I have no brief for the bankers. I might say in passing that I do not take second place even to the hon. member for East Hamilton (Mr. Mitchell) or the hon. member for Wetaskiwin (Mr. Irvine), in regard to knowledge of labour organizations. If they can show me that the adoption of this amendment will make it easier or possible for bank employees to become organized, then I am all for the amendment. But as I see the matter-and I see it as the Minister of Finance has just stated- there is nothing now to prevent them from doing the very thing my hon. friend suggests they should have the right to do.


Humphrey Mitchell: I am not going to brag about my knowledge of labour organizations; it is not necesasry for me to do so to prove my point, but I do not see why this subclause 2 is required in this measure. It manifestly gives the bankers power to say that the wages they shall pay have the driving force of parliament behind them and the employees have no say in the matter. Subclause 2 reads:
Such officers, clerks and servants may be paid such salaries and allowances as the directors or such officer, in the case of appointments made by him, consider necessary.
I think the fairer kind of clause that should have been inserted there would have been a provision upholding a fair wage policy based on living standards as enunciated in the Labour Gazette of Canada.


John Vallance: If the hon. member
makes such an amendment, I will support it.


Humphrey Mitchell: I disagree with the hon. member for Wetaskiwin. I do not want to restrict this simply to trade unions; I want to make it cover any form of labour organization.


Wilfred Hanbury: The hon. member is not looking for compulsion.


Humphrey Mitchell: I know what I am talking about. What I want is the same rights given to the employees to organize; they should have in the legislation of this country just as many rights expressed as those the employer has. I believe the subclause is unnecessary; it smacks of chattel slavery. Where parliament provides what I might call the right of the employer by law to pay his employees whatever wages he deems necessary, that is a kind of dictatorship and not democracy. Frankly I think the amendment would at least give leadership to those employes, telling them they have in this legislation the same rights in connection with their
fMr. Irvine.l
working conditions as their employer has in connection with subclause 2 of this particular clause. This takes preference over the minimum wages laws in the provinces so far as such laws exist.


Wilfred Hanbury: It cannot.
Amendment (Mr. Mitchell) negatived on division.


[Stage Direction]
Section agreed to.
Bill reported; amendments read the second time and concurred in.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.

Mr. SPEAKER:: I have the honour to inform the house that I have received the following communication:
House of Commons, Canada,
Ottawa, June 8, 1934. The Hon. George Black,
Speaker of the House of Commons,
Ottawa, Canada.
I beg herewith to tender my resignation as member of the Canadian House of Commons for the constituency of Elgin West.
M. F. Hepburn (L.S.)
Witness:
A. Goulet, M.P. for Russell.
Peter Heenan, M.P. for Kenora-Rainy River.
I have accordingly issued my warrant to the chief electoral officer to make out a writ of election for the said electoral district.


Mr. MANION:: Where does he go from here?


Wilfred Hanbury: He is going to be the next premier of Ontario.



PRIVATE BILLS


[Stage Direction]
Bill No. 85, for the relief of Mary Mabel Taylor Johnson.-Mr. Bell (St. Antoine) for Mr. Lawson.
Bill No. 86, for the relief of Blanche Marjorie Short Hanson.-Mr. Bell (St. Antoine).
Bill No. 87, for the relief of Fenwick William Smith.-Mr. Heaps.

[Stage Direction]
Hon. ALFRED DURANLEAU (Minister of Marine) moved the second reading of Bill No. 91, intituled an act respecting shipping.
He said: In rising to say a few words on the second reading of this bill I think it is proper

Shipping Act-Mr. Duranleau
to give a brief history of the merchant ship^ ping laws as they affect Canada.
When confederation was formed in 1867 Canadian shipping was governed almost entirely by the merchant shipping laws or acts of the United Kingdom, because they were expressed to apply throughout the whole empire. It is true that the English laws contained provisions giving authority to the legislature of any British possession or any part of the empire to enact legislation repealing or modifying any provision of the British law relating to ships registered in Canada, and to regulate the coasting laws of those possessions. But it was provided that these enactments should not come into operation until approved and confirmed by Her Majesty, and that all British ships should receive the same treatment.
Shortly after confederation Canada commenced to enact merchant shipping legislation of her own under the authority granted by the British North America Act, section 91, subsection 10, Navigation and Shipping. I should like to refer to some of these earlier acts:
1.	Registration and classification of ships.
2.	Masters' and mates' certificates.
3.	Steamboat inspection, including engineers' certificates.
4.	Shipping of seamen.
5.	Shipping of seamen on inland water.
6.	Wrecks, casualties and salvage, etc.
When the revision of the Canadian statutes took place in 1906 the commissioners who were entrusted with that revision had to gather all these separate acts and put them into one act which they called the Canada Shipping Act; and from them the Canada Shipping Act was amended from time to time and now is chapter 186 of the revised statutes of Canada, 1927; our present legislation.
The British merchant shipping act, as I said a moment ago, required that when the laws enacted by Canada or any other dominion were different from those contained in the imperial act, they had to be reserved until they were confirmed and approved by His Majesty the King. This situation remained until 1926 when at the imperial conference of that year representations were made as to the limitations contained in the British law, and it was resolved at that conference that an expert committee and subconference be set up to "study, to consider and report on the principles which should govern, in the general interest, the practice and legislation relating to merchant shipping, in the various parts of the empire having regard to the changes in constitutional status and general
legislation which have occurred since existing laws were enacted." This conference on the shipping laws met in London in 1929, and its recommendations were to the effect that the limiting provisions of the imperial statutes should be entirely wiped out. I am glad to say that this recommendation was given effect to in the statute of Westminster in 1931. Thus to-day, Mr. Speaker, for the first time Canada is entirely free to enact any legislation with regard to her shipping matters, and when necessary to give her legislation an extraterritorial effect without any reference to or without limitation by the imperial statutes. While the British merchant shipping acts were in effect in all dominions the result was, of course, a very great measure of uniformity. The different parts of the empire have thought it would be very wise to maintain as long as possible that uniformity. In 1931 the different parts of the empire came to an agreement which laid down the main lines along which legislation should be enacted in the different dominions. This convention is known as The British Commonwealth Merchant Shipping Agreement, and covers briefly: (1) common statutes in ownership, registration, etc., of British ships; (2) standards of safety; (3) extraterritorial operation of laws; (4) equal treatment; (5) ships articles, internal discipline, and engagement and discharge of seamen; (6) certificates of officers; (7) shipping inquiries; (8) relief and repatriation of seamen; wages and effects of deceased seamen; (9) offences on board ship, and (10) general provisions.
It was in the light of the statute of Westminster and the shipping agreement to which I referred a moment ago that the Department of Marine undertook in 1932 and in the first part of 1933 to formulate a shipping code which when enacted would give Canada full power over Canadian ships wherever they might be, and over all other British and foreign ships when they were within our territory. In the new code of shipping Which was drafted were incorporated the provisions of certain international conventions which were adopted in 1929 and 1930. I will refer particularly to two of those conventions to which almost all the nations of the world subscribed. I refer to the international convention for the safety of life at sea, which was adopted in 1929, and the international load line convention, which was adopted in 1930.
After engaging eminent counsel to assist them, the officers of the Department of Marine drafted a full revision of the Canada Shipping Act, following which a bill was presented to the Senate in 1933 by the Right Hon. Mr. 3S14
[Stage Direction]
Shipping Act-Mr. Duranleau
Meighen which was known as bill J. This bill was referred by the Senate to its standing committee on banking and commerce where a study of the subject was begun. That committee called before it all those parties interested in shipping, namely the grain merchants, the ship owners, the shipbuilders, the pilots, the engineers, in addition to all those associations interested in shipping. When that discussion was in progress a point of law was raised and strong representations were made against certain provisions of the bill which purported to impose upon British consuls and other officials in other countries certain duties when, in fact, Canada has no jurisdiction over those officials. After a careful study of the point we came to the conclusion it had been well taken, and owing to the proximity of the end of the session in 1933 Bill J had to be withdrawn. It is interesting to note that when the bill J was under discussion in the Senate, copies of its text were circulated not only to the shipping interests in Canada but also to the chamber of shipping in London, England, and to the mercantile marine department of the Board of Trade, London; and we invited comments and representations from all those bodies both in Canada and abroad. Then, at the end of the year 1933 and in the early stages of this year, the officials of the Department of Marine, after having received all those representations, redrafted the bill under the direction of the Department of Justice, and it w*as reintroduced into the Senate. The bill was presented, on March 7 as Bill E, and was again sponsored by the right hon. leader of that body. It was referred to the standing committee on banking and commerce which in turn set up a subcommittee. The subcommittee, with the help of Mr. W. F. O'Connor, K.C., acting for the Senate, and Mr.. P. M. Anderson from the Department of Justice, made a careful study of the bill. May I add that this subcommittee sat throughout the Easter holidays and for some time following, during which time they made a very careful study of the legislation. The bill was amended in many respects in connection with important points, and as a result of the many changes made, it had to be reprinted for purposes of reporting to the full committee on banking and commerce. When that report was made the full committee heard again all the interested parties, the shipping associations, the ship owners, the shipbuilders, the labour associations and all those who wished to be heard. Following those hearings some further amendments were made, at the conclusion of which the bill was reported to the Senate and was adopted.
[Mr. Duranleau.1
I am pleased to state that after two months' study and discussion in the Senate the measure has been reported to this house in as complete form as possible. It comprises sixteen parts dealing with such varied matters as recording, registering and licensing; certificates of officers, masters and seamen, relief and repatriation of distressed seamen, sick mariners and marine hospitals, pilotage, safety, wrecks, salvage and investigation, lighthouses, buoys and beacons, harbours, harbour masters, port wardens, navigation, collisions, limitation of liability, coasting trade, delivery of goods, legal proceedings and so on.
This house will remember that when during the session of 1933, Bill J was withdrawn in the Senate a small bill was introduced in this house providing for certain amendments to the Canada Shipping Act respecting our coasting trade. That bill became law, and stood as chapter 52 of the statutes for 193233. May I add that the provisions of chapter 52 have been incorporated in the present bill.
I do not wish to close my remarks, Mr. Speaker, without paying tribute to the right hon. leader of the Senate, Mr. Meighen, and to the members of the Senate, and especially to the members of its standing committee on banking and commerce and the subcommitee for the tremendous work they have done in studying this measure. They had to spend weeks upon weeks in studying it, and so complete has their work been that they have rendered comparatively easy the task of this house in studying the measure. I am not an expert in maritime matters but I have perused and studied this bill with my officials and I can say that this measure is surely one of the most complete pieces of legislation ever presented to this house.
William Duff: Mr. Speaker, at this particular time I am not going to raise any objection to the motion that this bill, letter E of the Senate, be now read a second time, but in the course of my remarks I shall give reasons why in my opinion it is impossible for the House of Commons at this late stage of the session to deal with this most important measure in a proper manner. In fact, Mr. Speaker, I do not think it is necessary for me to say very much more on that point because the Minister of Marine (Mr. Duranleau) in the very instructive and able address which he gave in explaining this bill told us quite plainly that it is one of the most important bills that has ever been brought before this house.
The .minister in the course of his remarks went into the history of the various shipping

Shipping Act-Mr. Duff
acts in this country and the British Isles since confederation, and I was very glad indeed to hear him admit that Canada has authority to regulate her own shipping. That is one further reason why at this particular time we should not hurriedly go over this bill and pass most important clauses without knowing exactly what we are doing. It would be much more in the interests of Canada and in the interests of business and shipping, I submit, if we deferred consideration of this measure to a later date.
As I said a moment ago, I have no particular objection to the bill now being read the second time, nor, if it is the wish of the ministry, do I object to the bill being moved into committee after its second reading. But I do respectfully submit, Mr. Speaker, that in the interests of Canadian shipping after the bill has been moved into committee we should not endeavour to consider in detail this very important measure at this stage of the session, a measure about which most of us know so very little; but rather the minister should move that the committee rise and report progress, and at a later date, if not this session perhaps at another, we shall be in a position to deal intelligently rvith the bill.
I was very glad to hear the minister say that he and his officials had gone over this very important bill. That is more, sir, than I have been able to do.


Ian Alistair Mackenzie: More
i.han any of us.


William Duff: 
Pierre Édouard Blondin: I would draw the hon. member's attention to the fact that references such as he is making to the Senate are not in order.


William Duff: I called it another place, Mr. Speaker, and the minister called it the Senate, so I think perhaps I should be allowed a little latitude. But of course I should know better, and perhaps that is the reason, sir, why you are calling me to order. But surely I am not out of order in discussing a bill which has come from the Senate to this house. If I am not allowed to do that there is nothing more for me to do but to sit down.


Pierre Édouard Blondin: There was no such suggestion on my part.


William Duff: I am very glad, Mr. Speaker,
that we understand each other. I was saying that in another place this bill has been considered by a committee in two sessions, and this session that committee spent almost five months in considering it, with the result that it was only on Wednesday of this week that the members of the commons were able to get a copy of it. Again I am not complaining, because if you will look at this voluminous document you will see that the printers must have had quite a job to get it ready after it had been passed by the Senate. The fact remains that this bulky document was put into the hands of members of parliament only on Wednesday morning last. Taking the advice of the Prime Minister (Mr. Bennett), tendered to me a few days ago, instead of going to the moving pictures on Wednesday night I spent from six o'clock until twelve, and the intervening time since then when I was not attending to my other duties, in reading some of the sections of the bill.
The house will see that this important document contains 497 pages, and not only are there 497 pages, but there are 113 definitions and 719 sections.
This afternoon we dealt with a very important measure in connection with banking and commerce,, and if I remember aright that bill contained about 170 sections. It took the members of the banking and commerce committee some two and a half months to study that bill and report upon it to the house. Surely then, Mr. Speaker, it is only fair for me to say that it would not be right or proper that a bill to which the minister himself attaches so much importance should proceed after its second reading on the eighth day of June, after being only two days in
Shipping Act-Mr. Duff

the hands of members of the House of Commons, to be considered in detail at this stage of the session.
In addition to the 497 pages, 113 definitions, and 719 sections, there are schedules in the bill extending from page 273 to 497; in other words, there are 224 pages of schedules alone. In order to make a thorough study of the bill it is necessary to compare each clause with the definition at the front of the bill. Then we must turn to the schedule pages to see exactly what effect the particular section will have on the schedules or the schedules upon the section. We are being asked to move into committee and endeavour to deal with this bill in a hurried manner. This bill is of vital importance to the shipping and business interests of this country .
The Minister of Marine stated that when this bill was before the Senate committee, both this year and last year, all interests connected with shipping had an opportunity to appear before that body. It is quite true that anyone who read the newspapers and saw that the bill was before that committee could come to this city and appear, but I [DOT]think my hon. friend will agree that no one came to Ottawa to appear before the committee who was interested either in the building or the owning of wooden ships. I was here during both years and no one paid me *the courtesy of asking me to give my limited knowledge and state what I thought about this bill. While the minister was right up to a certain point in stating that everyone had a chance to be heard-*


Mr. DTJRANLEAU:: I said everyone who wanted to be heard. I am sure that if my hon. friend had applied to the Senate he would have been heard.


William Duff: I think I made it clear that the minister had said that anyone who wanted to be heard could be heard. I said that there were a number of people who did not appear to be heard. One reason why they did not was that they did not know that the bill was up for second reading. The ordinary wooden shipbuilder and the owners of wooden ships could not afford to come here to appear before that committee.
This House of Commons has a duty to this country in connection with this particular bill. We owe a duty not only to the country but to the shipping interests. The members of this parliament representing constituencies from the Atlantic to the Pacific should be given ample opportunity to study the bill. They should not be asked to go over it
[Mr. Duff.3
hurriedly. No interests will suffer if this bill stands over until next year. My hon. friend dealt with the statute of Westminster. I am more interested in the Westminster confession of faith than I am in the statute of Westminster. Three or four years ago no one seemed to be in a hurry after the statute of Westminster was passed, and another six months or a year is not going to affect the shipping interests of this country. I think the minister will agree that there is no crying demand that this bill should be passed by parliament at this session. I am sure that when the shipping interests see the bill they will realize that a number of its clauses should be amended in the interests of Canadian shippers and Canadian ship owners.
The minister has said that this bill is an amalgamation of the Merchant Shipping Act of Great Britain and our own statute. Sections from both acts have been put into this bill, and every care should be taken to see that the sections taken from the British act do not injure the interests of our ship owners, our shipbuilders, our seamen, our pilots or anyone else who does business in Canada. We should be very careful how we treat this very important matter. It is impossible for us to go into committee on this bill as we would with an ordinary bill. Yesterday we voted on the third reading of the so-called marketing bill. Although it contained only twenty-two sections, it took from six weeks to two months for this house to give it proper consideration and be ready to vote. As a matter of arithmetic, if it took six weeks to deal with the marketing bill how long will it take to deal with this bill, which contains 497 pages made up of 716 sections, 113 definitions and 224 pages of schedules and appendices?
The minister has stated that there are sixteen important chapters dealing with the lives of seamen, with the property of merchants, with the property of ship owners, with pilots, and with the health of those who go diown to the sea in ships. I was born in a seaport and have lived all my life among seamen. I am interested in a small way in shipping, and perhaps I may be allowed to say that in my opinion this is the most important bill which has come before parliament in several years. I ask the minister and the government not to ask parliament to pass this bill at the present session. Nothing will be lost by the delay, as the shipping interests are quite satisfied to wait another year so that parliament can deal properly with the matter. I have no particular objection to the second

Shipping Act-Mr. Rhodes
reading of the bill or its being moved into committee, but I respectfully suggest to the Minister of Finance (Mr. Rhodes), who is leading the house, and to the Minister of Marine, that the bill be allowed to stand over. This is June 8, and while hon. members are here to do their duty and pass any necessary legislation, in view of the fact that there is no crying need that the bill be passed at this particular time, I suggest that it be allowed to stand over. In the interests of every one concerned, I hope and trust that the minister will agree with what I have tried to place before the house.


Edgar Nelson Rhodes: Mr. Speaker, the hon. member for Antigonish-Guysborough (Mr. Duff) bears a distinguished title which has been given to him unanimously by his fellow members, and by virtue of that very title I think he can speak perhaps with greater authority on a measure of this kind than any other hon. member. He has indicated very clearly that he favours the principle of this bill, which is that Canada shall have a merchant shipping act of its own. Under these circumstances, may I submit that without tying ourselves to any one of the sections or any one of the numerous schedules to which my hon. friend has referred, it might be wise to give second reading to the bill on the distinct understanding that when we go into committee we will merely pass a section which is noncontroversial and then rise. The question as to whether it is or is not wise to attempt to pass the bill in toto at this session could be a matter for subsequent determination.


Hon. P. J. VENIOT (Gloucester):: Mr. Speaker, I am glad to hear the Minister of Finance (Mr. Rhodes) make the suggestion he has. I have no doubt it will meet with the approval of my hon. friend, the admiral of the fishing fleet of North America. I know it will meet with mine because I am taking a very deep interest in the passage of this bill. I should like to see its adoption deferred until next session, so that we might go very closely into all its provisions.
The Minister of Marine (Mr. Duranleau) has told us that very great care was taken in the preparation of the bill, but I would point out to him that that care which in my opinion should have been taken has not been exercised. The greater shipping interest may have been attended to; but there are other interests in the shipping line which have not been considered at all in this bill. For instance, no regard has been had to the conditions of the fishing fleet on the Atlantic coast, and there are several reasons why particular attention should be given to that fleet in this bill. I do not wish to discuss any section of the bill; I am pointing this out simply to support the argument put forward by my hon. friend from Antigonish-Guys-borough (Mr. Duff) that the bill should go over for one year so that we might be in a position to go into it more thoroughly. To support that contention, let me point out that if this bill goes through as it stands there are certain sections of it which will cripple the fishing fleet of the Atlantic, and the coastal fleet especially.
There is in the bill a clause which defines steamers and steamships. Steamers and steamships include vessels propelled by auxiliary machinery. There are hundreds of fishing vessels equipped with auxiliary machinery and they will come under that provision, so that the coastal and fishing services will be affected. The result will be that every man who for the last ten, fifteen, twenty or thirty years has been able to command a vessel of that kind will be debarred from doing so. He must obtain a master's certificate ; he must have qualifications tantamount to the qualifications required to ensure the safety of ships carrying passengers. If that provision goes through as it stands, then you are crippling the fishing fleet on the Atlantic coast, and I do not know that you are not doing the same thing as regards the Pacific coast. I speak of the Atlantic coast because I am better acquainted with it and know the conditions that prevail there.
We should like to have an opportunity of consulting our people engaged in that industry before we as their representatives agree to the passage of this bill as it stands, and I think the bill would make greater progress if the minister would carry out the suggestion made by the hon. member for Antigonish-Guysborough and defer its adoption. Let us have the second reading; I am not opposed to that, and I will not oppose the principle of the bill. But I am opposed and very strongly opposed to certain sections of it which in my opinion should be amended. But in trying to amend them I am not in a position to give to the house the information necessary to provide proper protection for the fishing fleet; I cannot give that information without having had an opportunity to consult those more directly interested in the fishing industry.
I will point out another fault I find with this bill as I go through it hurriedly. I find that, in respect to the registration system, it conflicts with the regulations of the Fisheries department. In this regard I hold that the
381S
Shipping Act-Mr. Veniot

interests of the fishermen and of the fishing industry have not been looked into with sufficient care in the preparation of the bill, so as to have the regulations of the Department of Fisheries conform with the bill, or to meet conditions, unavoidable in the past, which exist to-day and whereby fishermen entitled to bounties, owners of vessels, can be debarred from the enjoyment of those bounties owing to the fact that proper registration or proper transfer from one owner to another, in a great many instances, apparently has not been carried out.
Some provision should be made in this bill by which those entitled to bounty, those who find themselves in the position of having obtained the ownership of vessels under certain circumstances, shall have their interests safeguarded-for example, in cases of bankruptcy where, the liquidator not knowing the laws of Canada, liquidation has taken place through liquidators residing in England, representing companies established there one hundred years ago, with branches in Canada. These people established themselves in Canada along the Atlantic coast and, failing year by year, finally went into bankruptcy; but proper transfers were never made, so that the owners to-day do not know whether they legally own their vessels or not. They cannot obtain proper transfers from the liquidators, and there are hundreds of such cases.
If this bill had been as carefully looked into as it should have been, if the effect of registration had been compared with the regulations of the Fisheries department governing the payment of bounties, I am sure that some action would have been taken by the minister to meet the difficulty that exists to-day. It is an injustice to these fishermen; they are suffering more through the fault of the liquidators. If this aspect of the matter had been carefully investigated, I am sure that there would be in this bill some provision that would protect these people and entitle them to their regular bounties as if they were the original owners or held the original registration.
For these reasons I plead, with the hon. member for Antigonish-Guysborough, on behalf of the fishing industry on the Atlantic coast, that the adoption of this bill be deferred for a year in order to give to those interested in it an opportunity of studying the measure more carefully, so that we may be in a position to tell the house exactly what is necessary to protect the people engaged in this very hazardous industry.


Ian Alistair Mackenzie: As briefly and cogently as possible, I wish to identify myself with the suggestion made by the two hon. members who have preceded me. The Minister of Marine (Mr. Duranleau) gave a very excellent introduction to the second reading of this measure. The hon. member for Gloucester (Mr. Veniot) and the hon. member for Antigonish-Guysborough (Mr. Duff) have spoken in the interests of the industry on the Atlantic coast, and I wish to inform the minister that I have definite and specific representations from the shipping interests of the Pacific coast in opposition to many of the clauses of this bill. I do not think I will worry the house at the present time going into these representations in detail; I will reserve that for a future occasion. In a word or two however I wish to support the representations made by my two colleagues in impressing upon the minister the absolute necessity of deferring discussion in committee of the whole of this peculiar Anthony Adverse of legislative effort with which he has presented us at the eleventh hour of the session. This bill touches every shipping interest in the dominion on both the Atlantic and the Pacific coasts. If ever a measure came into the house deserving the earnest and sincere study of everyone who desires to advance the shipping industry of this country, we have it in this bulky legislation given to us only two days ago. If ever a special committee were required to study every single clause, phrase and paragraph, and ever possible implication and consequence of the various features of this measure, one is needed in regard to the legislation we have before us now. With all due respect, after a very strenuous session so far when we have given much consideration to minor pieces of legislation, it is unfair on the part of the government to ask the house in committee of the whole to discuss this measure just because it has received some study by a committee of another house. My information is that this bill after receiving such consideration was passed by another house practically in bulk without any study being given to the various clauses. In justice to constituents of mine who have important shipping interests in Vancouver, British Columbia, I suggest it is not fair to ask us to deal in committee of the whole with this measure at the present time practically at the eleventh [DOT] hour of the session and we should, as the minister says, pass the second reading, thus showing that we favour the principle of the bill, then pass one clause and at the next session of parliament appoint a committee on

Shipping Act-Mr. Cantley
shipping to go into every single phrase, paragraph and clause of this bill so that a measure may be produced that will be a monument to whatever parliament is in existence at that time.


Mr. THOMAS CANTLEY (Pictou):: Mr. Speaker, I would like to ask the Minister of Finance (Mr. Rhodes) whether it is the intention to have this bill proclaimed this present year, or will it be subject to proclamation by the government later?


Edgar Nelson Rhodes: I am not in a position to answer that question, because obviously the answer lies with parliament itself as to what it may determine to do.


Thomas Cantley: I presume the govern^
ment has some policy so far as that is concerned. I understood the object of introducing this bill this year was to provide a measure that might be discussed by the various dominions of the empire, witih the purpose eventually of producing legislation which would apply equally to all the dominions; this to be simply the nucleus of an act which the representatives of Canada could discuss with representatives of the other dominions.


Peter John Veniot: And thus have uniformity
of legislation.


Thomas Cantley: Whether that be so or not, I do not know, but I hope that is the situation. I agree with the two hon. members from the maritimes who have spoken in regard to some of the provisions of the bill. For instance, there is the matter of licensing masters of coasters. Fifty or sixty years ago, indeed, before and I think after confederation, a man who had served as mate and afterwards as captain for a series of years was given a certificate of servitude which enabled him to command our vessels on the high seas in any quarter of the globe. Some similar provision should be applied now so far as coasting and fishing vessels are concerned, whither sail or power propelled, of say less than three or four hundred tons. That, to my mind, is absolutely essential. I know men, and my two hon. friends opposite know more, who have commanded vessels for ten, fifteen or twenty years, men of forty or fifty years, of age who have had splendid records. If they are asked to pass an examination in regard to eyesight, a placard is put up fifteen or twenty feet away and they are requested to tell what the lettering on it is. They cannot without the aid of glasses do that, but they can see a ship half a mile or a mile and a half away at sea and say what flag she carries. Those are practical difficulties
that ought to be taken into consideration in any legislation of this kind, because they.are vital to the whole purpose of the bill.
If I understood the minister aright when he introduced the bill, he stated that it was the intention of the government to provide legislation which would control the shipping of Canada in all the ports of the world, or words to that effect. Might I remind the minister that before that can be effected it will be necessary for Canada to have consuls in all the great ports of the world. Those we have not got. We may talk as much as we please and as long as we like about being a nation, but until we have consuls in all or at least the principal ports of the world we are not able to exercise that sovereignty to which he referred. For instance, a Nova Scotia ship goes down to South America. She arrives at say the port of Rio de Janeiro. She has, we will say, three seamen in irons who have refused duty. What is she going to do with them? The captain wants them dealt with. He cannot on his own account put them into gaol in Rio de Janeiro. He has to apply to the British consul or to the British minister in that- port. It is idle to talk about our being a sovereign nation when we are in that position. Until we are in the position of a sovereign nation with our own consular officers in foreign ports he will not be able, nor will this government nor parliament be able, to do what the minister suggests, that is control, as he has suggested, our shipping in foreign waters. Those are matters which are vital and should be properly dealt with by this bill.	.
I have read a good many of the clauses. Some are all right; others objectionable, and, I have no doubt, will be amended or deleted before the bill passes the house. But, Mr. Speaker, I have not been very much exercised over this legislation by reason of the fact to which I have already referred, namely, that I presumed it was only a basis for discussion with the other component parts of the empire, and that as a result of that discussion a new measure would later be brought down to the house. If that view is correct I have nothing further to say in regard to the bill.


Mr. THOMAS REID (New Westminster):: Mr. Speaker, I should like to make a few remarks regarding this bill and join with the other speakers who have suggested that it had better be delayed for another year. I must first of all, like the others, compliment the Minister of Marine (Mr. Duranleau) on his presentation of this legislation. I was pleased
Shipping Act-Mr. Brown

to hear the Minister of Finance (Mr. Rhodes) suggest that perhaps it might be well to allow the bill to go into committee and then consider the advisability of postponing it for another year.
I might point out to the house that since the bill has been under discussion in the Senate I have received representations from many, including a captain who is also a port warden and w'ho has given this matter a great deal of consideration. So serious does he deem one of the clauses in this bill that he believes-and I agree with him-the measure should go to a committee of the house for discussion of this one clause alone, because he maintains that if clause 100 in the shape in which it has come from the Senate passes the house, it will add fifty per cent to the freight dues on all ships taking lumber from Vancouver or Prince Rupert or New Westminster or any other port in British Columbia. He says that it will also affect those ships in going through the Panama canal to Great Britain. Surely, if the information given to me is correct-I hold the brief in my hand; every phase of the matter has been gone into

that alone should make the government hesitate before attempting to have this bill pass through the house in committee of the whole.
Then questions are dealt with affecting seamen-seamen stranded on foreign shores, seamen in hospital, sick mariners' fund, the hiring and firing of seamen. I am in doubt as to whether the representatives of the seamen have been heard in these matters. When one looks over the various clauses affecting them and considers that the house is being asked to pass this bill in committee of the whole, I cannot but rise and protest. It would be wiser to have the bill referred to the committee of the whole house, perhaps at some other session.


John Livingstone Brown: It would be presumptuous for one like myself, who has lived most of his life half way between the Atlantic and the Pacific, to enter into a detailed discussion of this bill. There is however one section which affects those living on the prairies. The minister has referred to the fact that last year when the whole bill was withdrawn, a short bill was introduced, dealing with the protection of labour and with the coasting trade on the great lakes. That bill was passed, but my understanding was that it had never been proclaimed. The minister has stated that that bill is now the law of the land.


Alfred Duranleau: I said that the law, chapter 52 of the statutes of 1933, was incorporated in this bill.


John Livingstone Brown: Yes, but I understood the minister to say the bill we passed last year was now the law of the land.


Alfred Duranleau: No.


John Livingstone Brown: Then I was right in my understanding that the bill has never been actually brought into force. It was really to find that out definitely that I rose.
Section 663 is the one that we prairie people are .particularly interested in, and if we give time to the bill in proportion to that given to some other legislation, as the hon. member for Antigonish-Guysborough (Mr. Duff) suggested, I do not suppose we should reach that section until about the end of August. However, if it comes before the committee we shall be prepared to make recommendations.


Alan Webster Neill: Mr Speaker, I rise only to endorse briefly in general and very heartily the requests and suggestions of delay that have been made from this side of the house, especially the remarks of the hon. member for Antigonish-Guysborough (Mr. Duff), although I do not agree with him that it should be put into committee even at the present time, for reasons I shall give in a moment.
Turning aside for an instant to the remarks of the hon. member for Gloucester (Mr. Veniot), he said there would be trouble in granting the bonus to the fishermen in the maritime provinces on account of the regulations in this bill in respect to registration. I hardly anticipate that would be as serious as he suggests, because if my recollection is right, and I am fairly certain it is, the act of 1882 providing for that bounty said that the money should be allocated according to regulations established by the Minister of Marine. Therefore if the existing regulations do not coincide with some registration features of this bill it would be easy to remake the regulations. That naturally suggests that the opportunity is overripe, when those regulations are being made, to undo a wrong that has been done to British Columbia for many years and make provision for our fishermen on the Pacific coast to share in that bounty the same as the Atlantic men. They are absolutely entitled to it by the law of the land, and they have been unjustly deprived by the malformation, so to speak, of these regulations. I shall not detain the house longer on that matter, because it is too

Shipping Act-Mr. Neill
obvious and the necessity for it too crying to require elaboration.
I do not think we should pass the second reading of this bill unless we have the positive assurance that it will go no further this year. I accept the ever present cordiality of the Minister of Finance (Mr. Rhodes) and we recognize his integrity, but he did not make a definite promise. If he had I would have been satisfied, but I recall that some weeks ago we thought we had reason to believe- perhaps we were deceiving ourselves-that we would succeed in the agitation we were making to have the marketing bill sent to a select committee. But there was a little noise and confusion one day and we found a motion was put to go into committee and when we were in committee of the whole and began to protest we were told plainly that we had lost our opportunity, the bill was in committee and was going to stay there; and stay there it did, with an enormous waste of time that we would be very sorry to see duplicated in respect of this bill.
The hon. member for Vancouver Centre (Mr. Mackenzie) said that he had received many objections from the Pacific coast. I think objections would be much more numerous if people concerned really knew what the bill means, but as no one knows what it means, of course it is impossible for them to make very urgent objections. Among others I am only going to quote one, just to give an idea of the futility of men even as well informed as we are supposed to be, dealing with this matter in committee of the whole and not being able to have technical advisers, as we could in select committee. Here is one request I have received. These people say:
We request that the present method of computing the nominal horse power of propelling engines be discontinued, and brake or shaft horse power be substituted for all turbine and internal combustion engines, and indicated horse power for all reciprocating steam engines.
How many men are there in this house who really know what that means, let alone are able to pass an intelligent opinion as to how it should be brought about? Certainly I am not.
Another aspect of the matter is this: are we to pass this legislation or is it to be passed in a place that I must leave nameless? After all I think the House of Commons is responsible for passing legislation. The minister says it is very complete, that they have studied it for years. But we remember a former bill that was studied at great length in another place, and no doubt they gave it much care and attention-the bill con' 74726-242
nected with the amalgamation of railways. When it was brought here the same eulogistic remarks were made, that we did not need to do much more than sign our names because it had been so thoroughly considered by these able elder statesmen, but when the bill finally passed this house its own mother would not have known it, so different was it from when it left the other chamber. So we must not take it for granted that because it has been seriously and earnestly considered in another place it is going to receive unanimous support in this house. It is all very well to pass divorce bills and matters of that kind; we can afford to take a chance on that, but these are serious things.
Then the minister says that it was open to any of us who were interested to go to the other place. Well, that sounds reasonable, but it is not so reasonable as it sounds. In the first place we have about enough to do attending committees of this house; are we to undertake the duty of attending senate committees? Another thing, we have not facilities for knowing when those committees meet. And I do not know that we would be particularly welcome if we went there and butted into their deliberations, as the expression is. If we wished to give evidence we would be graciously received, but as far as taking part in the committee is concerned, I would not ask it for one thing; it is their committee and it would not be for us to go there and express opinions and take part in the voting.
Then again we are told that there have been important changes made by the committee and subcommittee in another house. What were those changes? No one is able to tell us I sent to another chamber this afternoon and asked for the copy of the committee proceedings, where all the serious consideration had been given, in order that I might inform myself. I wanted to know who these various people are that we are told about, from everywhere except British Columbia apparently, who gave such voluminous evidence. The answer I received was that the evidence taken before the Senate committee, that committee of another place, had not been printed and therefore was not accessible to me. I do not know what took place. I do not know what arguments were used; they may have been good or they may have been bad. They may have been ex parte arguments. The witnesses are gone-I do not know where. I have no means of getting that information. I simply have to take the minister's word that a number of worthy people gave evidence, but we do not know any more than does the man in



Shipping Act-Mr. Hanbury
the moon what evidence they gave. We can only guess as to what happened by looking at the bill now before us and comparing it with what was introduced in the Senate. Is that a desirable condition, and are we to be guided simply by that? I know that every man who rises in his place in this committee and finds fault with a section will be told that it was carefully considered in another place, a place where they had all the advantages of hearing witnesses, and that we must be satisfied. I will not accept that doctrine as a guide in the consideration of this bill. I want to know at least something about what we are doing. Hon. members who have spoken have indicated the time it would take to carry this bill through committee of the whole this session if it is given anything like proper consideration. It is impossible at this time in the session to have the bill placed before the committee on marine and fisheries; it is too late to get witnesses. Let it pass second reading, if we must. Then let us take the bill home, where people will be able to give us advice. Then early next session let us send it to the marine and fisheries committee, instead of trying to do anything more with it at this time.
I have a note before me which indicates that some people living at remote distances sent written recommendations to the committee which sat in another place. We have not those communications, and will not be able to have them on the floor of the house. If we had the services of technical men before the marine committee we could handle the bill very much more quickly, but it is far too late to do that now, and if that procedure is not followed a gross injustice will be perpetrated. I am merely duplicating the remarks which have been better expressed by other hon. members, but I could sum up what I have said by stating simply that any further procedure at this time would amount to a serious injustice. There are features in this bill the meaning of which is not clear; we may find out after it is too late, and there would be a howl go up which would bring us into disgrace.
The hon. member for Pictou (Mr. Cantley) asked if the bill was going to be brought into effect this year. There is a section of the bill-and I happened to glance at it when I was browsing through it- stipulating that the government may bring the whole bill into effect when and if they like, or they may bring any part of it into effect. Well now, a reaction which would be extremely undesirable may arise in that connection. One part may

be brought in which would conflict with something else. As the hon. member for Pictou has indicated, a steamer may reach South America and then find that a particular section under which it is operating has been brought into effect, and some other section of equal moment has not been brought into effect. I decline absolutely to accept the approval of any other body, nor am I willing to take any responsibility for the passing of this bill, if in the present session it is jammed through this House of Commons.


Wilfred Hanbury: Mr. Speaker, before the minister replies I should like to take only one moment to add my support to the respresentations made by the various members who have suggested that this legislation should be held over until next year. While it is true, or at least altogether likely, that much consideration has been given to the drafting of the bill, and that it has been very carefully studied by the committee in another place, still I think it is unfair for the government at this time to expect hon. members to accept legislation of this type and magnitude, really a whole library of legislation, without taking time to give it consideration. The government should tell the house that it wants hon. members to go through this measure clause by clause, to give it the consideration which the people of Canada expect hon. members to give to legislation handed down from another place, and to ascertain whether it is properly or improperly drafted. I make a very strong representation to the government in support of hon. members who have already said that in fairness to this House of Commons and in fairness to our sense of responsibility to our constituents and to the people of Canada as a whole we should not be asked to attach our names to this measure in the present session, if we hope to get home before Christmas.


Mr. QLOF HANSON (Skeena):: Mr. Speaker, I wish to associate myself with the former speakers, and state that this legislation is too bulky and brought down too late in the session to receive action from this chamber. I have received several representations from fishermen and shipping interests on the Pacific coast saying that they would like to have copies of the bill so that they may study it and make themselves available to give information affecting the Pacific coast. I understand that the present measure is based on British legislation passed a number of years ago, in days when there were different marine

Shipping Act-Mr. Duranleau
methods, and before the development of diesel and gas engines. Developments in late years have been so great it is quite possible that this measure based on legislation passed years ago would not suit present day needs.
I strongly urge that this matter be referred to a committee to sit at the next session, so that they may be in a position to obtain the necessary information applying to modern shipping.


Humphrey Mitchell: Mr. Speaker, from this corner of the house I wish to say exactly the same as other hon. members have been saying. This is not a bill, it is an encyclopaedia, and if we give proportionately as much time to its consideration as we did to consideration of the marketing bill we will be here until next session, and probably the session after that. And if a constitutional problem should happen to crop up in the present measure we may be still longer. I think sound advice has been given to the government. I have received a number of representations from organizations on the Atlantic and Pacific coasts concerning features in this bill to which certain interests are strenuously opposed. Then, there are other sections in the bill which vitally affect the welfare of the people on the prairies who ship via the great lakes. Certainly the government would be well advised if they accepted the advice of hon. members on this side of the house and committed the bill to a committee to sit next session-of course assuming that the government will be here next year.


Mr. BELL (Hamilton):: It will be.


Humphrey Mitchell: I think so myself; however, I shall not discuss that point.


Leslie Gordon Bell: You and I know, anyway.


Humphrey Mitchell: If the matter were
placed before a committee those who understand shipping and its technical ramifications could appear and give advice concerning the bill.


Sir EUGENE FISET (Rimouski):: Mr. Speaker, I understand the bill now before the house has not been submitted to the provinces for their consideration. Bearing in mind the fact that the province of Quebec has full charge of its fisheries, and the further fact that the pilot services for the lower St. Lawrence as well as the upper St. Lawrence are materially affected in this new bill, I wish to the best of my ability to support the 71726-2425
representations which have been made by hon. members who have preceded me in this debate. I believe it would be quite unfair to consider this bill at the present session, first because the province of Quebec has not had a chance to peruse it and, secondly, because hon. members of this house have not had a chance to study it clause by clause.


Alfred Duranleau: Mr. Speaker, may I say that the same difficulty arose in another house. When the bill was reported and before it had been read by hon. members the same objections were made. But after two days had elapsed and hon. members had read the bill they came to the conclusion it was not so complicated, and with perhaps slight amendment could be adopted, and it was. I am prepared to accept the suggestion made by my colleague, the Minister of Finance (Mr. Rhodes), because every hon. member accepts the principle of the bill. I am willing to proceed to committee of the whole and have the first clause adopted, and then move that the committee rise.


Peter John Veniot: That is all right.


Alfred Duranleau: I refer to the title, The Canada Shipping Act, 1934.


Alan Webster Neill: And what then?


Alfred Duranleau: If no hon. member has any objection to the title, we may pass that clause and then I would move that the committee rise. But in the meantime I would invite my hon. friends to take this volume home with them-


Mr. FAFARD:: It is a library.


Alfred Duranleau: -and to pass their week-end studying it. It is not so complicated after all.


Peter John Veniot: Have mercy upon us, Mr. Minister.


Alfred Duranleau: There are perhaps not more than twenty-five clauses on which discussion would take place in committee of the whole. There are, for instance, some clauses about pilotage, some about the size and measurement of ships, decks, and so on, but surely there will be no objection to eighty per cent of the clauses of the bill, which is in part a reproduction of the merchant shipping acts which are the result of centuries of experience in England and the British Empire. The provisions that were adopted by various international conferences, the load line convention and the convention for safety of life at sea,
Canada Shipping Act

have been reproduced in this bill, and those provisions are very voluminous. These conventions were adhered to by Canada and practically all the countries of the world, and we had to embody them in this bill. I am sure that when my hon. friends have devoted a few hours to a study of the bill-


Joseph-Fernand Fafard: It will take a week.


Alfred Duranleau: No. I held the same view when the bill came to me, but if my hon. friend from Rimouski will take the trouble to spend a few hours on the bill I think he will come to the conclusion that it should be considered in committee of the whole house and be adopted at this session.


Ian Alistair Mackenzie: It will
take a week to read it.


Alfred Duranleau: As was stated a few
moments ago by the hon. member for Pictou (Mr. Cantley), if we pass the bill this session it will be an inducement to all the other parts of the empire to adopt similar legislation. When I hear some hon. gentlemen say that this bill is not an urgent one, I desire to recall that ever since I became Minister of Marine in 1930 I have had queries from the other side of the house at every session, even at the first short session in September 1930, asking when a full revision of the Canada Shipping Act was to be brought down. Those queries were repeated at every session, and I gathered from that, that everybody was anxious that this law should be enacted in the interests of Canada. I invite my hon. friends to peruse the bill over the week-end, and then I am sure they will come back next week with an entirely different opinion. I assure my hon. friends that if we go on with the bill this session every opportunity will be given to every member to discuss every clause of the bill if that is desired, but I do not think it will be necessary.


Peter John Veniot: If the minister wants us
to read this bill over the week-end what shall we do on Sunday without church?


Alfred Duranleau: You can go to mass
in the morning and then start reading.


[Stage Direction]
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Smith (Cumberland) in the chair.
On section 1-Short title.
Thomas Reid: I know it is not the desire of the committee to raise any controversy tonight, but there is one question which I think the minister might well answer. In the bill of last year, letter J of the Senate, there were

821 sections, and in this new bill there are 719 sections, or 102 sections fewer. Would the minister be good enough to explain just what happened? Was there an amalgamation of some sections?


Alfred Duranleau: I think that a great number of the sections of the bill J of last year have been embodied in other sections of this bill as subsections. My hon. friend will notice that a great number of the sections cover one or two pages, and contain five or six or seven subsections. That is the reason for the sections being fewer in this bill.


The CHAIRMAN:: Shall the section carry?


Alan Webster Neill: I would point out, Mr. Chairman, that if we let this section through we are sunk; we are committed to putting the whole bill through. The minister was very pleasant in his manner of explaining things, but the real iron hand beneath the silken glove was evident. He does intend to go on with this bill, and he told the Scotchmen to read it on the sabbath day, more shame to him! He said he would adopt the suggestion of the Minister of Finance (Mr. Rhodes) but the Minister of Finance did not go any further than to suggest adjourning the discussion and then considering the situation. If he is going to consider it, why not do the considering now? We all know that this section is the only one on which we can have any general discussion. Once we pass this, we can be held by the rules to a definite and particular section, and we cannot go beyond the scope of that particular section. In that way we shall be compelled to go right through the bill. The minister has not made any promise that he will do anything else. I think we would be ill advised, considering the experience we have had with other matters, if we passed even this first section unless we can get a clear understanding along the lines suggested. If the minister is not able to say anything definite before consulting with his colleagues, let us adjourn now. It is quite sufficient to go into committee and then report progress. That keeps the procedure proper, and then the minister can discuss the situation with his colleagues and announce his intention when the bill comes before us again. But we should not pass this first section, which would preclude us from any general discussion, without knowing where we get off at.


William Duff: There is something in what
my hon. friend from Comox-Alberni (Mr. Neill) says. I would suggest that clause 1 stand, and that we take up clause 2, and pass

Excise Act
the first subsection of it. I mention that because of the closeness of the definition to my own title. Subsection 1 reads:
"The Admiralty" means the Lord High Admiral of the United Kingdom for the time being, or the commissioners for the time being for executing the office of Lord High Admiral of the United Kingdom.
We can pass that.


Edgar Nelson Rhodes: The suggestion of the lord high admiral of the opposition is entirely acceptable. I can assure my hon. friend from Comox-Alberni that there was no idea in the mind of the government to take any advantage, either technical or otherwise, in calling the first section of the bill. I submit that the rights of the house and the committee are preserved in precisely the same manner whether the section is passed or not passed, but I accept without question the suggestion of the hon. member for Antigonish-Guysborough.


Wilfred Hanbury: The minister stated that there had been a demand for this legislation, and he based his statement upon the many inquiries he had received from the members of the house during the past three or four years as to when this bill was to be brought down.


Alfred Duranleau: This legislation has
been demanded not only in this house, but has been requested by shipping interests all over the country.


Wilfred Hanbury: I would suggest to the
minister that a request did not come from the members of the house that a bill of this size should be brought down at this stage of the session, what we all hope will be the dying hours of the session. I again suggest to the minister that if the bill is to be given the consideration it deserves the government should very seriously consider withdrawing it for this session.
Section stands.
On section 2-Definitions.


Armand Renaud La Vergne: We are on subsection
1 of section 2. Shall tly: subsection carry?


[Stage Direction]
Subsection agreed to.
Progress reported.

[Stage Direction]
The house resumed from Monday, June 4, consideration in committee of Bill No. 89, to amend and consolidate the Excise Act-Mr. Matthews-Mr. MacDonald (Cape Breton South) in the chair.
On section 124-Penalties belong to crown.
Robert Charles Matthews: When this bill was in committee a few days ago all the sections were passed with the exception of some in which it was suggested that the governor in council should be substituted for the minister. I think this suggestion was made by the leader of the opposition (Mr. Mackenzie King) and in conformity with it I have prepared amendments covering sections 124, 126, 127, 155, 156, 159, 161, 180, 216, 235, 236 and 262. I shall ask my colleague, the Minister of Railways and Canals (Mr. Manion) to move the amendment in connection with this section.


Robert James Manion: I move:
That subsection 1 of section 124 of the bill to amend and consolidate the Excise Act be struck out and the following substituted therefor:-
124 (1). All penalties and forfeitures under this act shall belong to His Majesty for the public uses of Canada.
Provided that-
(a)	the proceeds of any such penalties and forfeitures may, under such regulations as the governor in council may from time to time prescribe in that behalf, be distributed' in whole or in part and may be divided between and paid to any officer and any person giving information or otherwise aiding in effecting a seizure resulting in any such penalty or forfeiture;
(b)	the governor in council may by such regulations prescribe the manner in which the proceeds of penalties and forfeitures shall be distributed and may provide for payment of awards forthwith after seizure of goods or the preferring of charges where goods are not seized, based upon the value of the goods seized, the amount of excise duty evaded, the penalties imposable upon any person guilty of any violation of this act, as the case may be, and not dependent upon forfeiture or the proceeds of forfeiture.


Mr. EULER:: I should like to ask the minister how this change compares with the law as it is now.


Robert Charles Matthews: This section corresponds to section 133 of the existing act which has been rewritten to bring the excise act into line with the practice long ago adopted under the Customs Act of paying for information received if such information results in conviction and the imposition of penalties even though the net proceeds may be a loss. That is, the fine is not paid; the convicted person may prefer to serve time, or the necessary expenses may exceed the amount realized.


Peter John Veniot: Do I understand from the
minister that this is to make this section the same as the section in the Customs Act?
Excise Act


Robert Charles Matthews: Yes, it makes it conform to the section in that act.


Mr. STEWART (Edmonton):: I realize
that this provision is in the statutes, but it seems to me to be a vicious principle to give a portion of the fine to an official under salary and permanently employed for the purpose of detecting evasions of the customs or excise acts. I can understand that an outside informer who assists in obtaining a conviction might be entitled to some portion of the fine, but I cannot understand why an individual who is paid for that job-


Peter John Veniot: Not always.
Mr .STEWART (Edmonton): Not always. As it now stands a permanent salaried officer will be entitled to a portion of the fine if he secures a conviction. I am just asking the minister if he is considering this matter.


Robert Charles Matthews: That matter has
received very careful consideration. Ever since 1867 the Customs Act has contained a similar clause in connection with moieties, and it is now being placed in this bill. It will be noted that the section as it now reads confers the power on the governor in council-
Mr .STEWART (Edmonton): That is not the point; my point is the principle of paying a portion of the fine to a paid official of the department.


Robert Charles Matthews: It must be remembered that the governor in council can decide at any time whether a moiety shall be paid. At the present time I think it would be better to pass this clause in order to have it in conformity with the Customs Act which has been in force so long. If I may say so, I believe this whole question of moiety payments may receive consideration before the Customs Act is amended and consolidated, which may happen within a measurable time.


Peter John Veniot: In my time I have been an officer in the customs and excise, and when it is said that an officer receiving salary on full time should not receive any consideration in the matter of seizures, I think that is going a little too far. An officer on full time in the customs and excise, during the time I was in the service, received his salary and his hours were defined

nine o'clock in the morning until four in the afternoon. Those were the hours for which he was paid. Very frequently in those days seizures were made at all hours during the twenty-four, and they were made principally at night. I served for eleven years in the customs and excise, and in those days a

customs officer had to do inland revenue service-excise service-without pay. He received pay for his service as collector of customs and then if he did work after hours for the excise and inland he received a certain small -commission that hardly compensated him for the time he put in. Having had considerable experience in matters of seizure, I say this to the committee. You are doing right when you provide that an officer who is zealous in carrying out his duties should receive a part of th'e fine. When I was in the service, an officer who made any seizure did not undertake a task as hazardous as the task that is now involved. Many times in the last few years, in the last eight or ten years, an officer to carry out what he deemed- to be his duty had to risk his life, and he is to-day doing so. Perhaps members of the committee have no idea of what a seizing officer who wishes to be zealous in the discharge of his duty is up against when he comes across smugglers and hi-jaekers. Those who have had experience in that line as I have had will feel it an injustice, I am sure, to cut off the extra remuneration, because, to-day more than at any time in my experience, the officer is risking his life every twenty-four hours he is after smugglers.


William Daum Euler: With regard to the moiety system I must admit that I was never particularly convinced of the propriety of it, although it -has its qualifications as outlined by the ex-Postmaster General (Mr. Veniot). I should think that the minister might very well reconsider the whole question, and possibly it might be arranged on a somewhat different basis, though I have no particular suggestion to offer at the moment. I think he is right when he desires to put the administration of the act, so far as moieties are concerned, on the same basis as the Customs Act. I think also that it is time the Customs Act was revised, and when that is done the two acts, the excise act and the act that is being revised now, should be brought entirely into conformity.
With regard to the moiety system I want to ask the minister this question. I believe that in the customs preventive service, now in the hands of the mounted police, -the system of distributing moieties has been changed; instead of the individual receiving the moiety, I understand that the amount is paid into a central fund and then distributed among the various officers of the force whether or not they had any part in the particular seizure. Can the minister explain more in detail just how that is working out, and whether it makes

Excise Act
for better service and satisfaction among the members of the force?
Another question. In my recollection, which is none too good, eases would come up where an officer would make a seizure of what would ordinarily be a very valuable cargo of alcohol or whisky or some other liquor, and under the regulations of the department this valuable commodity would be destroyed, and there would be nothing on which to base the value of the moiety. Is there any change in that regard? I always felt at that time that, when a person had made the seizure-it might not have been the officer at all but a layman assisting in making the seizure-and a valuable cargo of liquor had been destroyed under the regulations of the department, there being in consequence no value on which to base the moiety, there should be some means of compensating the man who had made the seizure for the work he had done.


Robert Charles Matthews: As to the first question, there is a central fund and the amount at the end of the year is distributed among the officers. As regards the second question, where there is no real value in the goods seized, authority is given to make an allowance up to S500.


William Daum Euler: This new arrangement of
distribution applies to both excise and customs?


Robert Charles Matthews: Yes.


Thomas Reid: Now that the question of
moieties has been brought up, I think it would be well to consider the position of municipalities in this connection. In the municipality I reside in, very often it is the municipal police who make both seizure and charge, and I think it is a little unfair that no part of the fine should go to the municipality. Instead, part of it goes to the informer and part to the dominion government, and where there is imprisonment for a term of less than two years the province and the municipality have to pay for the prisoner's upkeep in gaol. Of course, if it is over two years, he goes to the penitentiary under federal jurisdiction. I think it wrould be well to consider the position of municipalities, such as there are in British Columbia, whose officers make and have made seizures, but the fines in connection with which go to the federal government, *while the cost of policing is borne entirely by the municipality. Rather than have the whole of the moiety go to the officer, I think part of it should go to the municipality that is responsible for policing and seizure.


Peter John Veniot: I do not remember whether there is any provision in the Customs Act whereby the department has paid for the upkeep of a prisoner during the period of his incarceration.


Robert Charles Matthews: There is no such
provision.


Peter John Veniot: Well, the federal government does not go as far as provincial governments do in carrying out provincial liquor acts. Where a person is convicted for violating the provincial liquor law and confined to the county gaol, they make arrangements with the municipality to pay the board, so to spgak, of the individual so incarcerated. I have often thought lately whether it was fair for the dominion government to make an arrest for a violation of the customs or the excise act, to confine the person convicted to prison for a period running, say from three to fifteen months, and to allow the municipality to pay the expenses of the upkeep of that individual in gaol. In order to relieve the municipalities to a certain extent, especially during these hard times, we ought to make some provision whereby in the case of a person convicted under this or the customs act and imprisoned, the department concerned of the federal government should at least look after the expense of that individual to the county while he is in the county gaol. Will the minister take that into consideration?


Robert Charles Matthews: Certainly.


Alfred Edgar MacLean: I think this question of
paying a moiety to the informer is really embodying a very vicious system in this measure that is being put through. Of course the provision has always been there, but it is absolutely unfair for the government to be a party to paying a moiety of a fine to an informer who possibly just out of ill will to his neighbour informs on him in respect of some minor offence. The man is put in gaol and his family left, as has been stated, to the mercy of the community to be taken care of. That is really encouraging a system which to my mind should not be tolerated, especially when an officer is paid a handsome salary for doing his duty. If under such conditions he cannot conscientiously give time to his position without being a partaker of the fine which the poor chap has to pay, such an officer is not worthy of being an official.


An hon. MEMBER:: Poor chap?


Alfred Edgar MacLean: I am not so much concerned with those who make this a matter of business as with the maker of home brew,
Excise Act

who is usually a poor man. These people do this because very often they have no other way of getting a few cents together; frequently they are not able to pay their fine unless somebody comes to their assistance; They are put in gaol and their families left to be taken care of, in Prince Edward Island, by the province, because we have no municipal councils or districts. The minister should give us a statement of the amount of money distributed yearly in moieties.


Robert Charles Matthews: I am informed that
last year the distribution to officers was about $4,900 for the whole of Canada.


Peter John Veniot: Does that include all the
moieties to the officers and informers? The officer making the seizure under information given by an informer is not allowed to give the name of the informer to the department, the department does not exact it from him.


Robert Charles Matthews: That is the amount
paid to the officers.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 126-Regulations.
Robert Charles Matthews: I will ask my colleague the Minister of Finance to move:
That section 126 of the bill be amended by striking out the word "minister" in the first line	thereof	and	substituting	therefor	the
words "governor in council."


Edgar Nelson Rhodes: I so move.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 127-Drawbacks on export.
Robert Charles Matthews: I will ask the Minister of Finance kindly to move:
That section 127 of the bill be amended by striking out the word "minister" in the first line	thereof	and	substituting	therefor	the
words "governor in council."


Edgar Nelson Rhodes: I so move.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 155-All spirits to be warehoused.
Robert Charles Matthews: I will ask the Minister of Finance kindly to move:
That subsection 6 of section 155 of the bill be amended by striking out the word "minister" in the first line thereof and substituting therefor the words "governor in council."


Edgar Nelson Rhodes: I so move.


William Daum Euler: I would just like to ask whether this was the only objection.


Robert Charles Matthews: Yes.


William Daum Euler: There is no other objection to the passing of these clauses?


Robert Charles Matthews: No.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 156-Equivalent how determined.
Robert Charles Matthews: I will ask the Minister of Finance to move:
That section 156 of the bill be amended by striking out the word "minister" in the first line	thereof	and	substituting	therefor	the
words "governor in council."


Edgar Nelson Rhodes: I so move.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 159-Bottling spirits in bond.
Robert Charles Matthews: I will ask the Minister of Finance to move:
That section 159 of the bill be amended by striking out the wrord "minister" in the first line	thereof	and	substituting	therefor	the
words "governor in council."


Edgar Nelson Rhodes: I so move.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 161-Removal of spirits from distillery.
Robert Charles Matthews: I will ask the Minister of Finance to move:
That section 161 of the bill be amended by striking out the word "minister" in the fourth line thereof and substituting therefor the words "governor in council."


Edgar Nelson Rhodes: I so move.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 180-Regulations.
Robert Charles Matthews: I will ask the Minister of Finance to move:
That subsection 1 of section 180 of the bill be amended by striking out the word "minister" in the first line thereof and substituting therefor the words "governor in council."


Edgar Nelson Rhodes: I so move.

Excise Act


William Daum Euler: Perhaps I should know this, but I do not. I would like to inquire whether in these amendments there is discrimination as against the Minister of National Revenue as compared with other ministers? Are some of the ministers of other departments not permitted to make regulations without appealing to the governor in council? I am rather in sympathy with my hon. friend.


Robert Charles Matthews: I am sorry the exMinister of National Revenue was not here a few days ago-


William Daum Euler: So am I.


Robert Charles Matthews: -but where the change had previously been .made to "minister", these amendments are made on the strong representation of my hon. friend's right hon. leader.


William Daum Euler: And by agreement with the right hon. leader of my hon. friend?


Robert Charles Matthews: By concurrence.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 216-Manufacture in bond may be authorized.
Robert Charles Matthews: I will ask the Minister of Finance to move:
That section 216 of the bill be amended by striking out the word "minister" in the first line thereof and substituting therefor the words "governor in council."


Edgar Nelson Rhodes: I so move.


[Stage Direction]
Amendment agreed to.
Robert Charles Matthews: I will ask my colleague to move:
That the said section be further amended by striking out the word "departmental" in the sixth line thereof, and all words following, and substituting therefor the words "regulations made by the governor in council in that behalf."


Edgar Nelson Rhodes: I so move.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 235-Regulations respecting sale of spirits.
Robert Charles Matthews: I will ask the Minister of Finance to move:
That section 235 of the bill be amended by striking out the word "minister" in the first line thereof and substituting therefor the words "governor in council."


Edgar Nelson Rhodes: I so move.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 236-Generally.
Robert Charles Matthews: I will ask the Minister of Finance to move:
That section 236 of the bill be amended by striking out the word "minister" in the first line	thereof	and	substituting	therefor	the
words "governor in council."


Edgar Nelson Rhodes: I so move.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 262-Regulations.
Robert Charles Matthews: I will ask the Minister of Finance to move:
That section 262 of the bill be amended by striking out the word "minister" in the first line	thereof	and	substituting	therefor	the
words "governor in council."


Edgar Nelson Rhodes: I so move.


William Daum Euler: Just to vary the proceedings I should like to ask the minister whether the inclusion of the word "minister" in these clauses was done for the purpose of expediting and making more convenient the work of the department. There must have been a reason for it.


Robert Charles Matthews: That really was the reason for it. The minister was given certain powers, to which strong exception was taken. In conformity with our usual good humour and consideration we have changed it.


Charles A. Stewart: I think it is quite in order.	The minister makes the
recommendation and submits it to the governor in council over his signature, as it should be if you are going to preserve any control.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 128-Legal effect of regulations.
Robert Charles Matthews: The last section to be referred to is 128. That was allowed to stand. The section reads:
All regulations made under this act shall have the force of law, and the person guilty of any violation of any regulation shall be subject to such penalty or forfeiture as by this act is provided.
This section needs no amendment. I should like to point out that the powers sought are definitely less than those given in the existing section. All you have to do is to compare the language. Section 137 of the act says:
... any violation of any such regulations shall subject (the person) to such penalty or forfeiture as is. by the said regulations, imposed for such violation.
3S30
Questions

It also speaks of departmental regulations as well as regulations made by the governor in council. So that to-day the minister could, without consulting his colleagues, make a regulation under which a man might be imprisoned for six months, and it would have the force of a statute. No such extreme delegation of parliamentary power is sought in the bill. The bill reads "such penalty as by this act is provided." Parliament itself is to fix the penalties.


Ian Alistair Mackenzie: Compare that with the marketing bill.


Charles A. Stewart: I think the change of 126 and 127 of the bill obviates the necessity of touching 128.


Robert Charles Matthews: Yes, quite so.


[Stage Direction]
Section agreed to.
Charles A. Stewart: There are
over 200 sections in this bill. I have not had opportunity to look at it-


Robert Charles Matthews: They were all passed.
Bill reported; amendments read the first and second time and concurred in.



ADJOURNMENT-BUSINESS OF THE HOUSE

Edgar Nelson Rhodes: To-morrow night occurs an annual event of very great Lu^oiiance w wmch those who are privileged to attend always look forward with very great eagerness and expectation. That it has been an unqualified success in past years has been due to the fact that it had the devoted and assiduous attention of the representatives of the fourth estate who are associated with us in parliament, and so that it may have the same success to-morrow night as in previous years I hope that the representatives of the fourth estate will have the opportunity through an early adjournment to-night of addressing themselves solely to its well being. In fact this event is of such importance as to transcend all other considerations not excepting the business of the high court of parliament itself. Therefore, Mr. Speaker, I move that the house do now adjourn.


Charles A. Stewart: Before we adjourn I suggest to the minister that it would be a happy thought to allow us to adjourn so that members of the house may rest as well.


Wilfred Hanbury: Before the question is put I would like to take this opportunity of directing the attention of the Minister of

Finance and the government to the fact that some of us come from places many hundreds and indeed thousands of miles away. We have been here now for four and a half months, and we are hoping to get home. I trust the government will take into consideration Wednesday evening sittings or morning sittings as soon as possible. When time may be taken to encourage the members of the fourth estate and to celebrate Empire day and things of that sort, I hope we shall be given some consideration by the session being brought to a close so that hon. members may be permitted to get back to their homes and business.


Edgar Nelson Rhodes: I can assure my hon. friend that his remarks strike a responsive chord as far as I am concerned. I shall be very happy to pass them on sympathetically and commend them to the favourable consideration of the Prime Minister and my colleagues.
Motion agreed to and the house adjourned at 10.10 p.m.
Monday, June 11, 1934