March 18, 1903

CON

William Humphrey Bennett

Conservative (1867-1942)

Mr. BENNETT.

As the Postmaster General was not in the House a while ago, I will read to him what Mr. Peuchen stated at that meeting. Mr. Peuchen does state in effect that his proposition was not received favourably by the Conservative administration and I can readily believe that. Here was a company coming to the Conservative administration and asking to have what is practically a monopoly of the manufacture of wood alcohol in this Dominion. Mr. Peuchen says that he asked for this monopoly and he was refused it by the Conservative government.

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The MINISTER OF RAILWAYS AND CANALS.

He does not say that. He says he could not get an interview. He never asked for a monopoly.

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CON

William Humphrey Bennett

Conservative (1867-1942)

Mr. BENNETT.

I will read what he stated.

He desired to start his present business before the change of government. He wanted a little help and went to Ottawa, thinking that as an old Conservative he would have little difficulty In his ' lobbying.' He found it impossible to even see several of the ministers upon whom he called and he came away quite disheartened.

It is plain that he wanted a little assistance as he puts it, and he thought some lobbying would do it, but what he desired was to get a hard and fast contract with the Department of Inland Revenue at that time for the sale of his product at his own price, and he tells us quite frankly that he could not get it.

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The MINISTER OF RAILWAYS AND CANALS.

That he could not get an interview. .

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CON

William Humphrey Bennett

Conservative (1867-1942)

Mr. BENNETT.

The hon. minister need not be so facetious about a person not being able to see a cabinet minister. Why there are times when some of the ministers of the present day won't see one another ; we had an exhibition of that yesterday. I have no doubt whatever that Mr. Peuchen found it impossible to make the bargain with the Conservative ministers which he made with the present Liberal ministers, because the arrangement which he wanted then and has now received was a preposterous arrangement. Mr. Peuchen says :

After the change of government he went down again. He had no difficulty in seeing the ministers. received a fair and businesslike hearing, and he found that when the ministers were shown a reasonable proposition, and one that was likely to be a benefit to Ihe country, they would assist it. Assistance was promised him and the result was the establishment of his business.

According to the Minister of Inland Revenue the assistance to be given was that this company was given a contract for

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the sale of their product. The Minister of Inland Revenue tells us that this Mr. Peu-clien was here the other day and after Mr. Peuchen made quite a change in that constituency he comes down for his reward and the Minister of Inland Revenue tells us that his reward is to he that for the next five or ten years this company is to have a monopoly for the sale of this article. Does the Minister of Inland Revenue believe that in view of the approaching expiry of this contract, it is not a good business proposition to call at once for tenders for the sale of this alcohol. Is not that the proper way to conduct public business. The Minister of Inland Revenue knows well that it is, but apparently he is being held up by this company and has to give them the contract.

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LIB

Robert George Macpherson

Liberal

Mr. MACPHERSON.

Mr. Chairman, l wish to say a few words on this wood alcohol. I am fairly well conversant with the prices which prevailed for this article prior to the present arrangement being made by the government. At one time the wholesale price of wood alcohol to the public was $2.25, but we are able to buy it now for $1.35. I may also say that the consumption of wood alcohol has increased possibly three times what it was before. The general public, at all events in the part of Canada I came from use wood alcohol in large quantities and this arrangement made by the government has reduced the price practically one-half to them. I think I am not going too far when I say that if the Minister of Inland Revenue was able to make arrangement whereby the price of wood alcohol was reduced by one-half, he is deserving of every commendation. So far as I am personally concerned, I have spent thousands of dollars in the purchase of wood spirits, and to-day I am able to buy for the same price nearly double the quantity that I bought formerly, and able to give the general public the benefit of this decreased price.

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CON

George Taylor (Chief Opposition Whip; Whip of the Conservative Party (1867-1942))

Conservative (1867-1942)

Mr. TAYLOR.

The Postmaster General said that when Mr. Peuchen came dosvn here and introduced himself, there was no other industry of the kind in Canada. Now, I wish to contradict that statement right here and now. Wood alcohol has been made at Deseronto by the Rathbun Co. for years, and they supplied the late Conservative government with it. When the hon. member for Victoria, N.B., (Hon. Mr. Costi-gan) was Minister of Jnland Revenue, I went with Capt. Carter time and again to the department to urge them to take larger quantities than they were doing, because they were then importing a certain quantity from Germany. The Rathbun Co. offered to supply it at the same price as the price in Germany without any duties added, and they claimed that they ought to have some protection on this article. The Rathbun Co. are making wood alcohol yet; and

yet the hon. Postmaster General tries to make the people of this country believe that by his entering into this corrupt bargain with a Conservative in order to get him to support the Grit party, he is helping to establish a new industry, whereas the fact is that it is an old industry.

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The POSTMASTER GENERAL.

I think 1 am correct in saying that until I heard Mr. Peuchen speak the other night, I was not aware that he had a contract with the government. What my hon. friend means by talking of my making a contract I do not know. I think he ought to explain, or not make such a statement. Mr. Peuchen made a contract with the government some years ago, but under what circumstances he did so I do not recollect. Certainly it was not made with me. I do not suppose there was anything wrong in the contract ; I presume the hon. Minister of Inland Revenue can explain it. Nor did I say that the industry of wood alcohol had not before existed in Canada. I said that Mr. Peuchen pointed out to me the importance of the industry treating wood in the way they proposed to treat it. He produced some figures showing the extent of the industry in the United States and the great importance of such an industry in Canada ; but whether or not it had a footing in Canada before, either in a sickly or a healthy condition, I am not aware. My impression is that it was proposed to put the industry on an extensive footing by the Peuchen and Thompson enterprise.

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CON

William Humphrey Bennett

Conservative (1867-1942)

Mr. BENNETT.

I want to call attention to one remark the hon. Postmaster General made that night, according to the statement that appeared in the ' Globe.' The statement is that the members of the government, and the hon. Postmaster General was one of them, promised assistance to this industry.

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The MINISTER OF INLAND REVENUE.

When was it ?

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CON

William Humphrey Bennett

Conservative (1867-1942)

Mr. BENNETT.

I presume it was five years ago, when he came down here. That assistance was not by way of bounty, because there is no bounty payable for the production of this article. AVhat was the assistance that was promised ? According to the statement of the hon. Minister of Inland Revenue, without any public competition, without asking for tenders at all, a hard and fast bargain was entered into with this company to take a great part of its product. What has been the result ? That under the arrangement made, this company has had an exclusive contract with the department; and the worst of it is that the Minister of Inland Revenue, in face, of the fact that next year the department will, probably require $25,000 worth of this article, and in view of the fact that this contract is soon to expire, is not prepared to tell the House that he proposes to call for tenders for the supply of this article.

but he says that when the contract expires, he will then make up his mind what he will do. Surely he does not expect that other companies will go into the enterprise when he practically informs the House that this company will have the contract for all timei to come.

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LIB

Charles Bernhard Heyd

Liberal

Mr. HEYD.

It appears that the government have entered into a contract whereby wood alcohol, which was formerly made in Germany, is now made in Canada. I do not think they should be condemned for that. According to the statement made by the hon. member for South Leeds (Mr. Taylor), although wood alcohol is made in Deseronto, in order to induce the late government to buy it, the manufacturer had to get the whip of the Conservative party to intercede for him, and through his influence they bought some part of this man's product at the price they were paying to Germany. That was the condition of affairs apparently at the time the present government made a contract with a concern which established an industry in Canada for the purpose of converting wood by-products into alcohol. The result has been a reduction in the price to the community and the establishment of a new industry in the country ; which is something for which the hon. gentlemen opposite ought to congratulate the government. What plan will ultimately be followed only time and ci)rcumstances can determine. But hon. gentlemen have no right to assume that a dishonest agreement will be entered into because the agreement that has been entered into has inured to the benefit of the people of Canada by reducing the price of wood alcohol and introducing a new industry into the country.

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IND

Jabel Robinson

Independent

Mr. ROBINSON (West Elgin).

I would like to ask the hon. Minister of Inland Revenue what he does with this wood alcohol.

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The MINISTER OF FINANCE.

I find a very interesting item in the Auditor. General's report bearing on this matter. It appears that the Minister of Inland Revenue is buying some $20,000 worth of wood alcohol from the Standard Chemical Company without any competition. I find that in 1896 we bought $19,000 worth of wood alcohol from the Rathbun Company without any competition ; but there is this important difference between the two cases : at that time we paid $1.60 a gallon, while under the present arrangement we pay $1.40 a gallon.

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CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BORDEN (Halifax).

I understood the hon. gentleman from Burrard to state that the ordinary price in Canada now is $1.35 per gallon and that the price is now one half what it formerly was.

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The MINISTER OF PUBLIC WORKS.

He referred to the methylated spirits, and not to wood alcohol pure, if I understood him rightly. I think he mentioned methylated spirits.

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CON
CON

John Graham Haggart

Conservative (1867-1942)

Hon. Mr. HAGGART.

He did not do so.

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CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BORDEN (Halifax).

I was discussing what I understood the hon. gentleman to have said. I would like to know what the tctal production of the company is and the cost.

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The MINISTER OF INLAND REVENUE.

We cannot ascertain what is the total production of the concern. I may say that when that contract was made, there were only two firms manufacturing that article- The Standard Chemical Company and the Rathbun Company. They both amalgamated, no doubt in order to secure the contract. The price given before was from $1.40 to $1.00. The contract was entered into five years ago. I do not care whether the parties were Liberal or Conservative. My impression is that Mr. Rathbun was a Conservative and so was Mr. Peuehen. The contract was given them because there were no other manufacturers of that article in the country. We could not get people to enter into the manufacture of alcohol for the sake of securing a contract of $1,500 or $2,000.

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March 18, 1903