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States newspapers were not so reliable in the matter of reports, or interviews, as Canadian papers. In Boston, before the Twentieth Century Club on Nov. 28th, he was reported as saying that Liberals in Canada were more convinced than ever that they were in the right about Reciprocity: "Some day we will get it, or something that will serve the same purpose. I am sure that the hands will not go back on the face of the clock and that people on both sides of the Line will some day buy and sell with more ease. must exchange our goods, we do it now against great handicaps; some day we will be wise enough to take the obstruction out of the way." In the Contemporary Review for November Dr. Macdonald analyzed the electoral results as due to "vague prejudice against the United States, distrust of the sincerity of American politicians, an uneasy fear that freer trade relations might in some way lead to closer political connection." He denounced the Chamberlain policy and declared that the United States market would soon be necessary for Canada. On Dec. 14 he stirred the American Association of Life Insurance Presidents at New York with a vigorous appeal for world-peace. "It is given to Canada to be the bond, the interpreter, between our two world-powers and to hold them in an inner fraternity around which will gather the new-born Fraternities of the world.""

Although most of the Liberal press had, immediately following the Elections, been willing to let Reciprocity drop there were some, like The Globe, which kept the faith. Reciprocity," said Le Canada, of Montreal, on Nov. 7, "is inscribed on the Liberal programme and will triumph sooner or later for the reason that it is the cause of the people and of liberty." The Montreal Witness adhered to this policy so, of course, did the Grain Growers Guide and the Regina Leader. But they were somewhat lonely in this matter, and the Hon. S. A. Fisher-free trader though he wasstated his belief at the Montreal Reform Club, on Nov. 4th, that the occasion for Reciprocity could not recur. As to the future he wanted" a sane but not sentimental" Imperialism. Mr. Lemieux, late Minister of Marine, speaking in Montreal on Oct. 31, declared religious feeling in Ontario to have largely aided in the Liberal defeat. The "Ne Temere" discussion, the Eucharistic Congress, the sermons of Father Vaughan, were, he thought, factors in the result. As to the future he said: "I am absolutely opposed to the principle of the proposed Tariff Commission as directly contrary to constitutional principles. I am also solidly against a cash contribution to the Imperial Navy, and in this I believe I speak for all Liberals." At a birthday banquet given to Sir Wilfrid Laurier, at Ottawa on Nov. 22nd, by the Liberal members of Parliament, the new Opposition Leader declared that he would "rather be right than be Premier," that he would lead his Party as long as his health permitted, that his policy would be one of adhesion to those principles of freedom, equal rights, and justice to all creeds

and all classes, which he had learned from "the highest traditions of English Liberalism."

In Montreal, on Dec. 16, the Hon. R. Lemieux described the prosperity of Canada as due chiefly to the Preferential policy of the Liberals and not to Protection. He was hopeful for the future. "The Tariff question is the most important of the day. The farmer and the consumer are asking for a change and they have to get it. They were blinded once but the people can not be caught twice with such false pretences as those used in the last campaign." A Canadian Navy built in Canada was the only navy acceptable to Canadians. At this time (Dec. 7) T. A. Low, M.P. for South Renfrew, resigned his seat in conformity with an agreement between the Executive Committees of the Conservative and Liberal parties of the Riding by which the Hon. George P. Graham would be allowed to go in by acclamation for the vacancy and T. W. McGarry (Cons.) be returned in the current Provincial campaign by acclamation. It was understood that the Conservative managers at Ottawa had disapproved of the arrangement although Mr. McGarry had been duly elected without opposition; that they did not feel bound by an agreement between local officials which was not endorsed by the party in the constituency as a whole; and that Dr. Maloney, the late Conservative candidate, had refused his consent to the Agreement. Mr. Low had received a majority of 600 in the Elections and there the matter rested at the close of the year. *

To the Liberals in these months Nationalism was a most important theme as representing principles which were undoubtedly unpopular in Ontario and, therefore, calculated to affect Conservative dominance in that Province. The party press did everything possible to combine Mr. Bourassa with the Premier in the public eye and mind; to picture the alleged influence of the former in Cabinet-making and in policy creation; to indicate a promised Referendum on the Navy question and differences in the Ministry thereon; to deprecate delay in the Government's decision on this latter point and to demand prompt action of some kind or other. The Toronto Globe (Oct. 16) declared that the Tory Imperialists at Ottawa" had swallowed Bourassa "body, bones, and breeches." Mr. Bourassa, himself, did not seem so sure of his position. In his first speech after the Elections (Oct. 21) he said at Chambly-Canton that, as he was not very intimate with the Ministers, he was not in a position to say much regarding their policy. The group, however, which he had the honour to lead, would occupy the same position in the face of the new Government as of the old. As to the Navy issue it could never be settled without a direct mandate from the people. He suggested a Referendum with these questions for decision: (1) Do Cana

* NOTE.—Mr. Graham was eventually elected, with cut in half in a hotly-contested fight.

the Liberal majority

dians want to maintain their autonomy and spend their money in developing national resources?; (2) Do Canadians want to make a direct contribution to the British Navy?; (3) Do Canadians want to build a Navy which will be Canadian in time of peace and Imperial in time of war?

Mr. L. P. Pelletier, Postmaster-General, did not conceal the fact that he had advocated and would like to see a Referendum on this question and, at Lorette on Oct. 27th, declared that the papers left by the late Government showed that the initial cost of the Canadian Navy would be $37,000,000 with $6,000,000 a year for maintenance. L'Evenement (Cons.) agreed with this desire for a popular vote. Mr. Bourassa, in Montreal on Nov. 1st, reiterated his opposition to helping England in her foreign wars with either men or money (Herald report) because the best way to help the Empire was by developing Canadian resources and fortifying Canadian shores. In Le Devoir on Nov. 9th, however, and over his own signature, the Nationalist leader reviewed, almost sympathetically, a recent argument of C. H. Cahan, K.C., in favour of a Naval contribution by Canada in return for Imperial representation. At a Commercial Travellers' banquet in Montreal (Dec. 18) Mr. Bourassa declared that all Canadians wanted to establish a Canadian nation under the British flag. He desired the diffusion of the French language as a safeguard against Annexation and Americanization. The close of the year saw the Nationalist movement in Quebec a somewhat isolated idea, a rather intangible organization, with a journal, however (Le Devoir), which had much popularity and a large circulation. Rumours were also rife in Liberal circles as to the practical absorption of the Nationalists in the Conservative party. Meanwhile the Referendum idea had been vigorously denounced by the Montreal Star which continued a strong campaign for direct aid to the Imperial Navy; by the Montreal Herald (Lib.), by the Hamilton Spectator (Cons.) The British Columbia Premier (Mr. McBride) declared himself in favour of a Pacific Fleet unit such as the Admiralty had originally suggested; the Ottawa Journal (Cons.) wanted a Canadian Navy in co-operation with the British fleets.

The Farmers Bank Failure and the Public Interests

This small banking institution which suspended payment on Dec. 19, 1910, with-according to the Curator G. T. Clarkson, Jan. 7, 1911-Assets of $2,000,250 and Liabilities of $2,436,261, held a considerable place in public view during the year and was a minor issue in both the Dominion and Provincial Elections. The Farmers Bank of Canada had been incorporated July 18, 1904, and organized in Toronto during 1906 by W. R. Travers, who became its General-Manager with W. Beattie Nesbitt, exM.L.A., as its first President. The subscribed capital on Dec. 31st, 1906, was $577,600, the paid-up capital $300,240, the total Assets

$267,839; on Nov. 30, 1910, they were, respectively, $100,000, $584,500, and $2,616,683. From the beginning there was suspicion in financial circles regarding this institution. Through L. G. McCarthy, K.C., some shareholders on Oct. 8 and 19th, 1906, objected by letter to the Finance Department against the granting of a certificate-an objection afterwards withdrawn; and, on Nov. 30, Sir Edward Clouston, President of the Canadian Bankers Association, wrote the Department stating certain circumstances which he thought required investigation and hesitation in granting a certificate.

More specific information was sought by the Deputy Minister of Finance and apparently given by the General Manager, and the certificate was issued on Nov. 30 after the Deputy Minister of Justice had stated that the statutory declaration of W. R. Travers as to financial conditions was sufficient, if accepted, to show compliance with the statutory provisions, and that on such evidence the Treasury Board might lawfully issue the certificate. A flaring Prospectus had, meantime, been issued and a lot of small shareholders obtained, largely in the rural districts of Ontario. Special reports were asked for by the Finance Department from time to time; in 1908 the Bank got mixed up in the Keeley Mine speculation (Northern Ontario) and, on Dec. 7th, Secretary Knight of the Canadian Bankers Association wrote the Minister of Finance as to a Deposit Receipt of the institution being offered for sale in New York under peculiar circumstances; in 1910 a controversy with one of the Home Bank branches brought the Farmers' Bank and its condition into the Courts and on Dec. 19th suspension took place. It may be added that the chief shareholders at the time of suspension were G. Denoon, Milton; Allan Eaton, Mount Nemo; Dr. A. Groves, Fergus; John Sproat, Maneswood; Burge Gumby, Kellsite-all in Ontario; W. J. Lindsay, W. R. Travers, R. E. Menzie and Dr. T. H. Wylie of Toronto; John Tevis, Louisville, Ky., and M. D. Chapman, Trustee, New York. The Provisional Directors announced in the original Prospectus of the Bank included prominent men in different parts of Canada; those actually elected were Lieut.-Colonel R. R. McLennan, Lieut.-Colonel James Munro, Allan Eaton, Robert Noble, W. G. Sinclair, A. Groves, N. M. Devean, Beattie Nesbitt and John Gilchrist-all of Ontario.

In January, 1911, Dr. Beattie Nesbitt, who had only remained President during the first year and been succeeded by Colonel James Munro of Woodstock, was charged with making false returns to the Government and a warrant issued on the 17th for his arrest the charge being afterwards extended and varied. Dr. Nesbitt succeeded in making an escape from his Muskoka home to the United States. On the 16th Travers had been sentenced to six years in the Penitentiary and he afterwards gave evidence and made full confession as to the Bank's affairs. Summonses were

issued against Dr. John Ferguson and Alex. Fraser of Toronto, A. S. Lown of Drayton and J. Watson of Listowel, Provisional Directors, for conspiring and agreeing unlawfully to obtain $10,000 (in commissions, etc.) from the Bank's funds but, after varied proceedings and delays, Mr. Justice Riddell on Nov. 23rd declared them not guilty. Other charges were made and tried against J. R. Stratton, J. J. Warren and W. S. Morden of the Trusts and Guarantee Company and Matthew Wilson, K.C., of Chatham; against Colonel Munro for wilfully making or signing false statements and against W. J. Lindsay; but all were eventually acquitted. F. Crompton returned $10,000 and was fined a small sum; George Wishart had judgment rendered against him for $49,000.

Meanwhile the failure had been discussed in the House of Commons on Jan. 23rd, 1911, and the official correspondence tabled by Hon. W. S. Fielding on Feb. 2nd. On the former date the Hon. George E. Foster made a vigorous attack upon the Minister for granting the Bank a certificate at all. "The Treasury Board had the application before it. The fundamental conditions are the subscription of $500,000 and the paying up and paying in of $250,000 of actual cash. Neither the one nor the other was done, and the only way that the $250,000 came to be paid in at last was that some men, the Bank not being in existence, not having running power, borrowed a sum of money." Meantime, on Jan. 17th, a large meeting of shareholders had demanded the appointment by the Dominion Government of a Royal Commission of Inquiry and also urged the Ontario Attorney-General to press an investigation of the Bank's affairs. The request for a Dominion inquiry, together with relief from the double liability, was presented to the Premier and Mr. Fielding on Feb. 3rd by W. Laidlaw, K.c.-supported by a number of members of Parlia ment. It was refused on Feb. 23rd. Travers, in his evidence on Feb. 18th, stated that W. S. Calvert, M.P., the Liberal Whip, had gone with him to urge Mr. Fielding to grant the certificate and that his intervention had been successful.

On Mch. 15 D. Henderson of Halton-where the farmers had invested or deposited money to the extent of $265,000 and $196,000 of double liability in the Farmers Bank-moved in the Commons that: "This House is of opinion that a Royal Commission should forthwith issue to inquire into and investigate the incorporation and organization of the Farmers Bank of Canada and the granting of a certificate by the Treasury Board permitting said Bank to issue notes and transact business, and all the circumstances connected therewith; and generally to inquire into and investigate the operation and efficiency of the Bank in relation to the affairs and transactions of said Bank." Mr. Henderson quoted six different warnings alleged to have been given the Finance Minister and contended that some kind of action should have been taken by