proper restrictions and in compliance | At the time the Act to which my hon. with the law. Hon. Sir ALEX. CAMPBELL I think that the statement made by the hon. gentleman is perfectly correct, and that this bank is in an anomalous position, and is doing business under an assumed right acquired from the Ontario Legislature, which assumed right does not give it the powers it is exercising. We hope to be able to reduce the matter into order, and to be able, with the law as it stands, at all events to test that question, and I apprehend that the bank will not hold out, or will not refuse to submit to laws enacted by this I will take care that special attention is given to it in the Finance Department, and I have strong faith that they will be able to make the m comply with the law of this Parlia Parliament. ment. Hon. Mr. SCOTT - The charter was granted to certain gentlemen who took stock, but it states on the face of the charter that they have not paid anything on it. It seems an extraordinary thing to give a charter to a Company when the incorporators have not paid up even a portion of the capital. Hon. Mr. ALLAN I would like to ask the leader of the Government whether, as this Act is worded, it might not in some way recognize the existence of the Toronto Savings Bank. The Toronto Savings Bank had their charter extended to 1882, by the Act passed in 1872, and subsequently, in 1879, they got an Act enabling them, if they chose, to transfer all their assets and securities over to this Home Savings and Loan Company. In this Bill reference is made to savings banks in Ontario and Quebec, and this Toronto Savings Bank is expressly named. friend refers was passed, there was another savings bank in Ontario - the Northumberland Bank - but it has gone out of existence. Hon. Mr. ALLAN I was under the impression that the Toronto Savings Bank was specially named in the Bill. The clause was adopted. On the 5th clause, Hon. Mr. DICKEY said: I would like to call the attention of the leader of the Government to this 5th clause, as it is of some importance. In fact in it is the essence of the whole Bill. I fear that I have but a very imperfect knowledge of the details of this question, but there are certain general reasons which ought to commend this clause to the careful consideration of the House. It is perfectly true, as has been stated by my hon. friend from Victoria, that there is ercise greater care in legislating, because no other question on which we should exthe operations of those savings banks affect the interests of people who have no means whatever to protect themselves. They must rely upon the protecting care of Parliament to secure their interests. It is only necessary to look across the border and see what has been the result in the last two or three years in the City of New York and elsewhere in the United States, and, to some extent, in some parts of England, as to the operation of some of those savings banks, and the fearful result of mismanagement, or perhaps something worse, to people who have no means of protecting themselves. Now, I make that general observation in application to this particular section. Then there is the other question of the extension of the liability of the shareholders. I confess it Hon. Sir ALEX. CAMPBELL is surprising that we allow these banks to I do not think this Bill recognizes it operate with the single liability, whereas in any way, but I do not consider there we require for the protection of the pubwould be any evil, even if it did re lic from other banks at all events a cognize it, because the wish of Parlia- double liability. Now that is germane to ment would be to make it conform to the the question to what extent we should laws to which other banks yield. If continue this legislation. It appears to my hon. friend will look at the Bill, heme that the position of the matter is just will see that no special bank is men- this: These laws would have extioned at all. It so happens that that ispired last year, but they the only savings bank in Ontario, but it continued for a period of is not recognized in this Bill in any way. to give an opportunity were one year Parlia ment to consider the question. It is quite impossible to take up this matter in its fulness at this period of the session, and I have thought, in view of all that has been said with regard to the results of this legislation upon the persons who deposit their savings in these banks, which are supposed to be safe, and ought to be made safe; if they are not so, it wou'd be well for the Government to hold this question in reserve, and not to grant such a long extension as ten years, but follow the precedent of last year and extend the Act for a period not exceeding one year, or if possible not exceeding two years. That would give an opportunity to the Government to take the whole question into consideration and bring forward such legislation as to make those savings banks really what they profess to be-security for the depositors. Under these circumstances, I think my hon. friend ought not to press this section, but limit its application to a period of one year if possible. for a number of years without injury to Hon. Mr. DICKEY It is fortunate that no loss has hitherto occurred to depositors, but, unfortunately, we cannot foresee when a disaster may happen, and generally there is very little notice of such a change in the condition of things beforehand. I am not quite sure, from the information we have had, that some of those saving banks have all their securi Hon. Sir ALEX. CAMPBELL The provision last year was made with the view of having the matter considered in the interim. It has been considered, as far as the Government is concerned, by the Minister of Finance, and to the best of his judgment the true way in the interests of depositors and of the people who do business with savings banks is to give such banks a more permanent stand-ties in just the position that they ought to ing than they can have by holding char- have them. The object of my suggestion ters only for one year. Those savings has evidently not been appreciated by banks have been going on in Canada for the hon. gentleman. My idea is that the a number of years, both in Ontario and Government, unless they are prepared to Quebec, and, so far, no loss has been sus- say that these banks should go on with a tained by people who have deposited single liability, should take it into contheir money in them. The bank to sideration, with the view of altering the which my hon. friend from Victoria legislation for those banks. If they conrefers has been doing business in Mon- clude to extend these charters for nine or treal for a number of years, and no stop-ten years after what has been state l here page has occurred, and no losses have been sustained by depositors. The Savings Bank of Northumberland did business for a number of years successfully, and when it wound up it divided a considerable sum of money amongst institutions in the district in which it was situated. A large sum was given to the County Council for educational purposes, and other donations were made by the bank when it was wound up. The bank in Ontario has also been doing business to-day, it is very unsatisfactory that they should continue to do business under the present system. That is my view of it; but, of course, I am not prepared to give a positive opinion as to what ought to be done. Time ought to be given to enable the Government to change the legislation, so that those banks could not have power to say, after their charters had been extended ten years, that Parliament has sprung upon them other arrangements. We should be in a position to say, "Your Hon. Sir ALEX. CAMPBELL charter will expire in another year, and was another instance of that in our we wish to make those changes," and neighbourhood. A company put up the then the matter could easily be arranged. words " Savings Bank" on their office, I think that would be a much better way and began to take deposits; but they than to extend their present charters for were notified that if they did not take another period of ten years. down their signboard,complaints would be made to the Finance Minister at Ottawa, and they took down their sign accordI think the country is pretty well provided with savings banks. There are Government savings banks by way of post office savings banks, and also loan societies' savings banks. There must be $10,000,000 deposited in those saving banks in Ontario. If anything could have been done to have placed these savings banks upon some permanent foundation I think it would have been well in the public interest to have done The double liability clause is only im-ingly and discontinued taking deposits. posed because the ordinary banks have a circulation. The bills of ordinary banks go into circulation, and every one gets them without any immediate thought or consideration, and they pass from hand to hand. Therefore, there is this protection given of double liability. But the sav ings banks do not issue bills at all, and those who go to deposit know what their security is, and they do not expect to have any double protection. I do not think there is any precedent for a double liability clause except in banks that have a circulation. SO. The clause was agreed to. Sir ALEX. CAMPBELL moved the Clause A. "6. The said banks shall each of them fur nish annually to be laid before Parliament within fifteen days after the opening of each session, certified lists of the shareholders, with their additions and residences, and the number of shares they respectively hold." Hon. Mr. SCOTT" And the amount paid on each share" should be added. Hon. Sir ALEX. CAMPBELL Yes, that might be added. Hon. Mr. HOPE I think the day has gone by for this class of savings following as a sixth clause to the Bill: banks. They did very well in a former period of the history of the country. As far back as 1846, there was an Act passed by the Parliament of Canada authorizing the formation of savings banks. They were constituted on a very primative principle. They had no capital, and the only security depositors had was the security of their own money. I was connected for several years with a savings bank in the west. It was a very profitable one, and after winding it up the trustees handed over a considerable sum of money to a prominent charitable institution of the district. But savings banks now-a-days are expected to have capital, and the Government hitherto has bound down all the savings banks connected with loan societies or institutions of that kind not to take deposits exceeding the amount of their paid up capital. There is the security to the public who deal with these institutions, and the old fashioned system of savings banks without other security than depositor's own money has gone out of existence. I understand from what) the leader of the Government says that there is no savings bank in existence in Ontario, that it has been absorbed by another institution. I am surprised that that they would presume to take deposits under their Ontario charter. There Hon. Mr. HOPE - Might I ask the hon. the leader of the Government the amount of stock of these banks in proportion to the paid up capital? Hon. Sir ALEX. CAMPBELL Yes. The capital stock of the Montreal $2,000,000; the paid up capital is $600,City and District Savings Bank is 000; the amount of their deposits is $4,761,462; amount of Government deposits payable on demand $126,937; total liabilities $5,356,361. I suppose it is somewhat the same with respect to the different loan companies in Ontario which enjoy large deposits. Hon. Mr. HOPE But the deposits of the Permanent Building Societies cannot exceed the amount of their paid up capital, while this savings bank has in deposits nearly nine times the amount of mentioned, in every part of the Dominion of Canada." its paid up capital. Hon. Mr. McMASTER- - They cannot exceed their paid up capital. Besides, the unpaid amount remaining on their mortgages must be sufficient to pay all their liabilities. Hon. Sir ALEX. CAMPBELL Looking at the securities which this bank holds, viz.: Dominion securities, $893,015; loans for which bank stocks are held as collateral security, $2,106,565; loans for which other stocks, bonds or debentures authorized by law are held as collateral security, $1,503,613; cash in hand, or on deposit on call in chartered banks, $885,030; landed property of the bank, $329,882; miscellaneous, $120,971, etc., I do not consider the deposits are too large. The clause was adopted. Hon. Mr. LEWIN, from the Committee, reported the Bill as amended. The amendments were concurred in, and the Bill was read the third time and passed. It will be seen, therefore, that the enact- CREDIT FONCIER FRANCO-CANADIEN times their paid up capital; a provision BILL. SECOND READING. to which, I take it for granted, no hon. gentlemen can object. Then it goes on to say: Hon. Mr. GIBBS moved the second reading of Bill (31) "An Act to enlarge 13. The Corporation may, from time to and extend the powers of the Credit time, borrow money to an amount which Foncier Franco-Canadien." He said shall not exceed five times the amount of its Perhaps it is well I should make a few paid up and unimpared capital; and it may, for that purpose, execute, negotiate and issue observations, in answer to some objec- obligations or bonds or debentures ins sums of tions that were raised the other day, in not less than five hundred francs, French explanation of some features of this Bill. currency, redeemable either at a fixed period A misapprehension appears to have or within a definite term by means of drawtaken possession of the minds of hon.ings with or without premiums or prizes. It gentlemen that it is the intention of this Bill to re-enact the legislation of the Province of Quebec. If hon. gentlemen will turn for a moment to the preamble, and also to the first clause of this Bill, they will find that reference only is made to this Company being incorporated in the Province of Quebec, under the name of the Credit Foncier Franco-Canadien. Then the first clause enacts that : "1. It shall be lawful for the Corporation created and constituted under the name of Credit Foncier Franco-Canadien' by the statute of the Province of Quebec cited in the preamble, to exercise the powers hereinafter may stipulate and pay on the obligations or bonds or debentures which may be issued by it any rate of interest that may be lawfully taken by individuals at the place where they are issued." There may be, perhaps, two methods of raising money under this clause unknown not only here, but I believe in the United States or any part of this continent. It has been adopted successfully, however, in the older countries of Europe, particularly in France, where it is intended to raise the capital with which to carry on the operations of this Company. The first provides that it may raise money by way of bonds, issued either with or without premiums. The Company or the Government, or whoever may issue these our local legislatures, disasters should bonds, indemnify themselves by issuing befall the people of another country, we them at a lower rate of interest than would be responsible for it, if not in money is worth. In the United States I money, at least in honor. The Bill bebelieve it is the custom to issue bonds, fore us asks that the Credit Foncier redeemable in this way, by means of Canadien-Francaise may have an extendrawings; the other is perhaps one which sion and enlargement of its charter. may be looked upon as a little more unus- It is necessary for us to know ual than the one to which I have alluded, what this Credit Foncier is. It is that is, the issue of bonds to which prizes a Company incorporated by the Quebec are attached which may be drawn, and Legislature. For my part, I have grave these bonds may be issued at a certain doubts as to the constitutionality of that rate of interest, usually less than the charter. I know that the cry has been market rate; and the prizes are given to raised, particularly in the Cities of Montthe few bond holders who may draw real and Quebec, that there is a tendency bonds to which such prizes are attached. towards centralizing power at Ottawa. With the exception of this clause, I am and denying the local legislatures the not aware that there is any extraordinary urisdiction which the British North provision in the Bill, or any that will America Act confers upon them. Now, cause hon. gentlemen to make serious! I am second to none in my desire to upobjection to its passage through this hold the rights and privileges of the House. As to the constitutionality of local governments, but I am also one of the question if that comes up those who believe that if we stretch must leave it to be dealt with by hon. those rights too much they will break. gentlemen who are more competent to Therefore, every friend of our local discuss it than 1 am. Being a layman, legislatures should endeavor to prevent I do not profess to be competent to deal them from enacting laws which are ultra with that matter, and, while the best vires. I think, and I was glad to hear minds of the country are often divided the promoter of the Bill admit to-day, on that subject, I may be excused from that there is a great diversity of opinion offering an opinion on it. I therefore in the country on this question. move the second reading of the Bill. Hon. Mr. DEBOUCHERVILLE I Hon. Mr. GIBBS-I did not refer to this question particularly, but to constitutional questions in general. I referred to it because the hon. gentleman had raised the constitutional question yesterday, and I said that I would leave the discussion of that point to others. Before offering the amendment which I propose to submit to the House, I wish it to be understood that I am far from being opposed to either of the Credit Foncier Bills which are before the Senate, Hon. Mr. DEBOUCHERVILLEand I should be happy if, instead of having two such institutions, we had ten difference of opinion in the other House, On this very question there has been a or more established in this country. The and grave doubts have been expressed by greater the competition, the lower will be the rate of interest charged to borrow-gentlemen holding high positions in the ers; but, while it is desirable to have legal profession, as to the constitutionality these Credit Fenciers in this country, it Now, this Credit Foncier is necessary that their charters should was incorporated by an Act of ing that Act, I think, they exceeded the Quebec Legislature in 1880. In passtheir powers, because, in the first place, this Corporation is in the nature of a bank. It is not more than thirty years be constitutional and valid. Otherwise, they would be of no use. As these Companies are large borrowers, as well as large lenders, disastrous effects would follow the granting of a charter which would be found to be unconstitutional. Hon. Mr. PENNY Disastrous effects to people in another country. of this measure. since institutions of this kind were first established in France. In 1852 or 1853 there were three of them in that country, and the principal one was known as the "Banque du Credit Foncier." I do Hon. Mr. DEBOUCHERVILLE-not know the English meaning of the If by our legislation, or the legislation of term. |