April 2, 1909

CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. R. L. BORDEN.

But not only one.

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LIB

William Pugsley (Minister of Public Works)

Liberal

Mr. PUGSLEY.

My hon. friend is right, it doe3 not say ' only one,' but surely if any meaning can be given to language, that is intended to convey the meaning that there was inquiry into only one of the departments and the hon. gentlemen who have spoken on that side have advanced the argument that theTe was no inquiry except into one of the departments, and the same meaning is to be taken from the resolution of my hon. friend. The hon. gentleman in his argument said that because irregularities had been shown in the Department of Marine and Fisheries it was to be presumed that there would be irregularities and wrongdoing in the other departments Sir, in considering the foundation for that inference, we should bear in mind this fact that the only wrong-doing of any very great moment that will be discovered in reading the report, took place in the city of Quebec where the trusted agent of the department was a gentleman who had not been appointed by this administration, but who had received his early training not under any minister who was at any time a member of this administration; that agent had received his training under previous governments and was for a number of years under the control of my hon. friend the member foT North Toronto (Mr. Foster). I do not say there was anything in the cOurse Mr. PUGSLEY.

of the administration of the department which came to his knowledge which would account for the conduct of that official, but we must bear in mind that he had been for a lifetime in the department. He has now reached the age of 70 years and upwards and it is not reasonable to suppose that this practice of taking commissions, this practice of making advances to the people who delivered supplies and did work for the department has been indulged in only of late years. We may fairly assume that he had been doing this for a great many years. Unfortunately Mr. Justice Cassels, although he was in no way limited by the order in council, did not feel that he could go back beyond 1904, that is to say beyond the administration of the last three or four years. If he had been able to go back 15 or 20 years he might have found-I will not say he would have found-that Mr. Gregory, the agent at Quebec, had been pursuing the same practices for a great many years. In the other departments, in my department for instance, there are many young men- I have a deputy who was appointed in recent years, who came in there bringing new blood and new life into the department and who is vigilant, I believe, in the discharge of the duties which pertain to his position. We have in this country resident engineers, many of them young men, active young men, ambitious young men, ambitious to serve their country and to rise to positions of responsibility and influence in connection with the work of the department. They are the men who are engaged in hiring labourers, in buying supplies, in purchasing materials for the different works we are carrying on. Because the gentleman who had charge of the agency in Quebec has been guilty of wrong-doing, has allowed excessive charges to be made against the_ department and has received commissions from those having dealings with_ the department, is it a fair matter of inference that my deputy minister and the resident engineers of my department in different sections of the country would be guilty of wrong-doing also? It is an inference which mv hon. friend cannot draw and which no person can be justified in drawing. Let me say that I would have no objection myself to the very fullest investigation being made in my department by the commission. If any hon. member of this House has asked for a paper or an account in connection with my department since I have been minister he has had the fullest opportunity of having access to _ the documents. We have a Committee on Public Accounts in which is vested the duty of examining into all the expenditures of the different departments and whenever any question comes up with reference to an account it is quite open to that committee to call witnesses as to 1 the reasonableness of the prices which have

been charged, and if there have been excessive charges witnesses can also be called to show whether there has been any corrupt or improper conduct in connection with the purchase of those supplies. I have in my mind one or two cases in which it has been shown that excessive charges have been made; but it is quite open to any hon. member of the Public Accounts Committee, whether in the majority or the minority, to summon witnesses before it, take their evidence under oath, and have a full and complete investigation. But, Sir, is it to be said, with this Committee on Public Accounts before which there is every opportunity for the fullest investigation, and without any charge of any kind being made against any department of the government, that a commission is to be appointed to go into the expenditures of every department and into the conduct of all the officials of this government, to turn the departments inside out, in order to ascertain - what? Not the truth of any charges that are made against the government or against various officials; but to find out whether they are honest men or not- to find out whether there is anything wrong in the departments or not. You know, Mr. Speaker, that the cost of the commission which we have had has amounted to upwards of $50,000 Its investigations took in Montreal, Quebec, Prescott, Halifax, St. John and Ottawa. If that investigation had been carried to the west, if it had taken in British Columbia, its cost would probably have been double what it has been. There are thirteen different departments of the government. If you even multiply the cost of the investigation which has already been held by thirteen, you will find the expenditure running to three-quarters of a million dollars. Suppose my department were to be investigated by a commission, with a judge, a registrar, stenographers and lawyers in attendance, if they made a full investigation they would not limit their inquiries to Montreal, Quebec, Prescott, Halifax, St. John and Ottawa; but they would have to go to Toronto and Hamilton, to Kingston, to all the towns in which public works had been carried on-to Winnipeg and Edmonton and Prince Albert, to Vancouver and Victoria and New Westminster, away up to the Fraser river and on to the Yukon, in order thoroughly to investigate the working of my department. They would have hundreds and thousands of officials to examine as well, as people doing work for or furnishing supplies to the department. And if a commission were appointed, and did not take in all sections of this country in its inquiry; if, instead of being limited to one year, it did not go back at all events as far as 1896, when this government came into power, it would be charged by the 123

other side that it was only a limited and partial inquiry. I venture to say that a million dollars would not cover the expense of such an investigation as that proposed by the hon. member for St. Anne; and with what purpose? In order to determine whether we are able efficiently to carry on the affairs of our departments or not; in order to determine whether or not our officials are honest-whether or not there has been any wrong-doing in the various departments; and without the slightest tittle of evidence which can warrant the suspicion that there is any wrong-doing of any kind or description. What has the investigation before Mr. Justice Cassels disclosed? So far as the city of St. John is concerned, it has not disclosed, after the most full and complete investigation; after Mr. Watson, the counsel, and the gentleman associated with him went around among the different merchants supplying goods to the department and examined their books and accounts so that they could compare the prices paid by the government with the prices paid by other parties -they were not able to show that in one single instance any of the merchants in the city of St. John had charged one dollar beyond the fair value of the goods. My hon. friend from North Toronto (Mr. Foster), in my absence this afternoon, asked whether the government was going to prosecute among other people the McAvitys of St. John. Let me say to my hon. friend that if he reads the evidence given before Mr. Justice Cassels from beginning to end, he will not find that the McAvitys charged one cent beyond the reasonable and fair price of the goods they delivered to the department; and, more than that, he will not find that the McAvitys were shown by the evidence to have ever given a gift of any kind or description to any one of the officials of the department. _ _ And yet my hon. friend asks the Prime Minister, in a manner as insulting as a question could be put by one hon. member of this House to another-looking towards the Prime Minister, and departing from the parliamentary practice of addressing the Speaker, he said: 'Why don't you prosecute those people who robbed the people of this country? Is it because you shared in'- and then my hon. friend was stopped by the Speaker because he was proceeding in an unparliamentary way, and then he said: 'Because you shared in it for party purposes? ' Let me say in asking that question, so far as the McAvitys of St. John are concerned, that, my hon. friend has done a wrong and an injustice to gentlemen of the highest_ reputation and integrity -men who stand just as high in the commercial world as any business firm in the Dominion of Canada from the Atlantic to the Pacific.

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CON

John Waterhouse Daniel

Conservative (1867-1942)

Mr. DANIEL.

Will the minister allow me to ask him a question? Did George McAvity, who received $35,933 from Mr. Gershon S. Mayes, keep that money in his pocket, or did he hand it over to the Liberal association for party purposes?

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LIB

William Pugsley (Minister of Public Works)

Liberal

Mr. PUGSLEY.

I do) not know of any amount which Mr. George McAvity received from Mr. Gershon S. Mayes, nor do I know of any amount that Mr. George McAvity may have contributed for party purposes. My hon. friend professes to have a knowledge of that kind. If he has, he might acquaint the House with his knowledge. My hon. friend from North Toronto was not referring, I understand, to the alleged incident between Mr. McAvity and Mr. Mayes, but was referring to gifts alleged to have been made by these parties to officials of the Marine and Fisheries Department. I have already referred in this House to the matter about which my hon. friend aisks, and if the matter is brought up in such a way that it can be discussed, I shall be ready at all times to discuss it; but of course this is not the proper and suitable time to do so. It does seem to me that when my hon. friend from St. Anne puts before this Houise the statement that there is ground for suspicion that the other departments of government have been wrongly administered, that there has been-to use the words of the resolution -official negligence, wastefulness and corrupt dealing in the departments,-let me say to my hon. friend that if he has any suspicion of that character, it is due to himself as an hon. member of this House that he should acquaint this House with the grounds of his suspicion. If he has any suspicion against any individual official in my department, it is his duty to acquaint me and the public with the name of that official. And let me >say to my hon. friend if he has any suspicion that I, as Minister of Public Works, am improperly discharging the duties of my office, or have been guilty of negligence or wrong-doing of any kind, it is the part of a man of courage to come forward and make his charge; and, so far as I am concerned, and so far as any member of this government is concerned, I am satisfied that if any hon. member will take the responsibility of rising in his place and charging any one of us with maladministration of the affairs of our departments, we shall be only too willing and happy to afford to him every opportunity of having a full and complete investigation. But that is a different thing from going on a fishing expedition in order to see whether we are properly administering our departments or not.

One word in conclusion. I want to refer to what I think is going to be the beneficial results of the investigation before Mr. Justice Cassels. Let me say that that was not an investigation induced by hon. 1 Mr. PUGSLEY.

gentlemen opposite, but instituted by the Minister of Marine and Fisheries himself on hi>s own initiative. When the report of the Civil Service Commission was brought down, it contained certain reflections on certain officials of the Marine and Fisheries Department; and when my hon. friend saw that the commissioners had not gone as far as they might have, he, out of regard for the proper administration of his department, asked His Excellency to appoint a Royal Commiission to complete the work which the Civil Service Commissioners had not carried to a successful conclusion, and make a thorough investigation. What has been the result of that Royal Commission? It has been to show that practically all the evils which Mr. Justice Cas*sels complains of have resulted from the patronage system which has been in force ever since confederation.

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CON

John Waterhouse Daniel

Conservative (1867-1942)

Mr. DANIELS.

The hon. minister has said that the commission was a Royal Commission. I understood that it was a departmental commission appointed by the Minister of Marine and Fisheries.

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LIB

William Pugsley (Minister of Public Works)

Liberal

Mr. PUGSLEY.

I think it was a royal commission. I do not know that there is much difference between the two.

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CON
LIB

William Pugsley (Minister of Public Works)

Liberal

Mr. PUGSLEY.

There is none as regards the power of taking evidence under oath and the summoning of witnesses.

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CON

John Barr

Conservative (1867-1942)

Mr. BARR.

Surely the Minister of Marine and Fisheries could tell us which it was?

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LIB

Louis-Philippe Brodeur (Minister of Marine and Fisheries)

Liberal

Mr. BRODEUR.

It was a royal commission instituted under the statutes. The statute provides that investigations of this kind may be made under it, and these investigations are called royal because the appointments have to be made under an order passed by the King or his representative.

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LIB

William Pugsley (Minister of Public Works)

Liberal

Mr. PUGSLEY.

A royal commission simply means a commission issued by His Majesty, or with his authority, for the investigation of certain matters. This commission was issued under the statute, in His Majesty's name, to Mr. Justice Cassels. It has been declared by Mr. Justice Cassels that the evils complained of are the result of the patronage system which was introduced, not by this government, but by the first government which held power after confederation, and which has been

continued ever since. I am not going into the merits or demerits of the system of having a certain number of prominent merchants and manufacturers in each

community, whose name might be kept on file, and from whom purchases might be made after competition. There is no doubt

that there was a patronage list and that the prices were asked only from the few on that list, and there is no doubt that such a system is always likely to lead to confusion. But what has the Minister of Marine and Fisheries done? He has abandoned the patronage list. In my department, which is another great spending department, the patronage list has also been abolished. My hon. colleague the Minister of Militia, as I have understood, never had a patronage list in his department. Most of the supplies there are obtained by tender. I have found in my own department great benefit arising from asking for tenders and giving everybody an opportunity to tender. One great advantage, of course, is that it leaves no chance for favouritism, because the contract is given to the lowest tenderer. We have made a distinct move in the way of reform by doing away with the patronage list. When the furnishing of supplies is open to public competition, there will be no motive for any one to make gifts to certain officials in order to secure their influence or favour. In my own department I have realized, even in the case of smaller articles, where the amount involved was not very large, the great advantage of introducing tender and competition. What the country wants us to do is to profit by the examination which has taken place into the affairs of the Marine and Fisheries Department. The country does not ask that we should spend three quarter of a million or a million dollars on further investigations into departments with respect to which there is no ground for suspicion. What the people expect is that we should cary on the business of the different departments in an efficient and prudent manner. If we do that the country will continue to give us its confidence, and if we fail to do it then we shall have to meet public condemnation. I apologize for having taken up so much time, but I felt it was my duty to refer briefly to what I think are reasons why this amendment should not be carried. My hon. friend has taken a course which is calculated to induce every member of this House, who has confidence in the government, to refuse to vote for his amendment. He has not chosen to adopt a course which would enable an amendment to be made to his motion, but has moved it at a time when it must be regarded as a motion of want of confidence, and has asked the House to say that it has no confidence in my hon. friend the Minister of Marine and Fisheries, even when the hon. member for St. Anne's (Mr. Doherty) himself is obliged to admit that he has nothing whatever to say impeaching the integrity of my hon. colleague, but that, on 1231

the contrary, my colleague has done everything he could to secure the efficient administration of his department.

I oppose this resolution on two grounds. First, because it is a motion of want of confidence, and second because it is based on statements without foundation and contrary to evidence contained in the Civil Service report, and the report of Mr. Justice Cassels, and I appeal to the House with confidence to reject the amendment moved by the hon. member for St. Anne's division (Mr. Doherty.).

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CON

George Taylor

Conservative (1867-1942)

Mr. GEO. TAYLOR (Leeds).

I had no intention of speaking, and would not have spoken at this hour of the night had not the Minister of Public Works (Mr. Pugs-ley) taken the floor. With the consent and approval of my leader (Mr. R. L. Borden) I suggested to the whip of the government side that, after the two leaders had spoken, we should take the vote. Again, after the hon. member for Wright (Mr. Devlin) had spoken I made the same proposition. This was not accepted. I thought the government were anxious to get supply and concurrence to-night. But, after several speakers from that side not being replied to from this, the Minister of Public Works having got up and occupied three quarters of an hour, I think it my duty to draw his attention to some facts that have an important bearing on this case. I will not take my facts from the report of Mr. Justice Cassels, but from the report of the Auditor General, and I think those facts should convince the hon. minister that there is need of an investigation. I fully concur in the amendment moved by my hon. friend from Ste. Anne's (Mr. Doherty), and I agree with the language used by that hon. gentleman in his speech as quoted by the hon. minister, except that those words are not strong enough to properly characterize and duly condemn the reckless manner in which the government has expended the money of the people of this country. In 1896, the public debt was something over $258,000,000. In 1909, it is $308,000,000, an increase of $50,000,000 under this government. In 1896, the estimates of the Conservative government amounted to $43,000,000. Sir Richard Cartwright isaid this expenditure was outrageous. And the present Prime Minister (Sir Wilfrid Laurier) promised the people that if they put him in power he would reduce the expenditure by two, three or four millions, that he would surround himself with business men and conduct business on business principles. The Minister of Public Works rises to-night and tells us that the patronage system was in existence under the previous government. But how can he justify himself by the acts of the previous government when the Prime Minister promised to make such changes as would greatly reduce the expenditure? As

a matter of fact the expenditure is increasing until the estimates last year amounted to $129,000,000, and the supplementary estimates which have just been passed amount to $3,000,000 more, making a total estimated expenditure of $132,000,000, or almost $90,000,000 increase over the Conservative government. If we take the increase of expenditure and the addition to the public debt, we find a total of $140,000,000 of increase under this government instead of the promised reduction of two, three or four millions.

Out of this $132,000,000 which they asked for on account of last year's expenditure, I admit that a part is uncontrollable. The statutory expenditures amount to $26,000,-

000. Of course, we had statutory expenditures in our $43,000,000. Then, there is about $14,000,000 of salaries and other uncontrollable expenses. This would make a total of $40,000,000, leaving a controllable expenditure of $92,000,000. And where has that money gone? I say that every dollar of that wants investigating. If my hon. friend (Mr. Pugsley) will take the Auditor General's Report-and I wish him to follow me, for I am going to give him page and date for everything-and if he will turn to page V-52, he will find that his men in Montreal purchased 391 feet of five-inch belting and paid an average of $2.12 a foot for it. The invoice came to $924. They got a discount of 10 per cent, leaving $831 of the public money paid for that belting.

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LIB
CON

George Taylor

Conservative (1867-1942)

Mr. GEO. TAYLOR.

Yes, if they had gone to any manufacturer, they could have got the same belting for $293. So, the middleman made a profit of $538. When I was a boy and went to school the schoolmaster used to propound this question: If a herring and a-half cost a penny half-penny, how many can you get for a shilling? I will ask the Minister of Public Works that question.

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LIB

William Pugsley (Minister of Public Works)

Liberal

Mr. PUGSLEY.

Are you the schoolmaster? The question is too much for me, at this time of night.

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CON

George Taylor

Conservative (1867-1942)

Mr. GEO. TAYLOR.

Then, let me ask the minister to work out this: If on an

expenditure by this government of $831, the middleman makes a profit of $538, how much has been made by the middlemen out of the controllable expense of $92,000,000? That can be worked out by the rule of three-every school boy can do it. If the "minister will figure it out, he will find, at this proportion, the middlemen got a rake-off of $59,000,000. Now, if the hon. gentleman will turn to the Auditor General's report, page O-21, he will find that they went to a friend of his in St. John, having some little repairs to do, and thev hired from this friend of the minister's two cross-cut saws for 100 days at 10 cents a day each, a total of $20. If they had stepped into Mr. G. TAYLOR.

any hardware store, they could have bought those saws for $7, but they paid $20 for the use of them. And they paid the same man, Mr. Daniel McLaughlin, $24 for the hire of three planking screws that they could buy for $4.50 each. They paid $5 for the rent of a grind-stone, and they could buy the grind-stone at one cent a pound and the frame for $3.50. They paid this man $50 for the rent of tools that they could have bought for $17 and could have owned the tools when they were through. On this, the middleman got a rake-off of $33. On this basis, how much rake-off did the middlemen get on the controllable expenditure of $92,000,000? They got $60,763,000. Now, if the minister will return to page Y-53, he will find the record of purchases made for the repair of some buildings in Montreal. This was not let by tender, but they went to a political friend, Mr. Marchand, and they paid him for 11,000 feet of lumber, ash, basswood and elm, a total of $997. They paid $150 a thousand for ash, and $100 a thousand for basswood-and you can buy basswood anywhere for $28 a thousand. The average paid for ash, elm and basswood was $90 a thousand, and it can be purchased anywhere at an average of $35 a thousand. The middleman got a rake-off there of $55 a thousand. On that deal of $977 there was a rake-off of $607 to the middleman; what would be the rake-off on $92,000,000? The middleman would make out of that expense $57,000,000 of the people's money, if that rule applied as it applies everywhere else. After they got the building completed they went to a Mr. Thibault and got him to put in a floor upstairs, of hardwood, 216 squares, and they paid him $16 a square, amounting to $3,456; for birch flooring, 40 squares at $16 a square, amounting to $636.

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LIB
CON

George Taylor

Conservative (1867-1942)

Mr. GEO. TAYLOR.

I am surprised that my hon. friend, being Minister of Public Works, does not know what a square is. Any schoolboy knows what a square is, it is 10 feet each way.

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LIB

William Pugsley (Minister of Public Works)

Liberal

Mr. PUGSLEY.

I must confess I did not know that.

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CON

George Taylor

Conservative (1867-1942)

Mr. GEO. TAYLOR.

Then you are not fit to be Minister of Public Works. And yet he is building all over the country. He will pay $16 a square when it is only worth $7. I went home on Saturday, and went to a firm of the largest lumber merchants, Mitchell & Wilson, and I said to them: What will you put me in squares for, hardwood lumber, maple or birch, and they said they would do it for $7 per square, or for red beech, at $6.50 per square. Yet the minister paid $16 to a political friend in Montreal. He paid for 256 squares $4,090. If he had called for tenders he could have got it done for $7 a square. The middleman made there a rake-off of $2,300. At

that rate how much have they made on $92,000,000 of controllable expenditure? In V-103, the minister wanted some basswood lumber for his ships and he went over to Hull, to a Mr. Desrosiers, and got 3,010 feet of basswood lumber, for which he paid $60 a thousand, and he could have purchased it for $18 to $25 a thousand. The Minister of Railways knows something about the quantity they consume in the railway shops, where they buy the best. But here the Minister of Public Works pays $60 a thousand for the same goods. On that $180 worth, which he could have bought for $75, there was a rake-off to the middleman of $105. At that rate how much did the middleman make on $92,000,000? $54,000,000. In every case it works out between $50,000,000 or $60,000,000. I could cite a hundred cases like that all through the Auditor General's Report. No wonder they do not want an investigation. But the country does want an investigation into the accounts for the last 12 years, in every department, and this i3 one sample of many of them. I want to refer now to the cost of the steamers. In 1896 the government had nine steamers, named ' Aberdeen,' ' Alert,' ' Druid,' * Le Canadian,' ' Lansdowne,' ' Newfield,' ' Quadra,' ; Sir James Douglas ' and the ' Stanley.' The government to-day have nine also, but they have replaced some of the old ones with larger ones. In 1896, $150,000 was the entire cost far these nine steamers. To-day the government have nine steamers, the ' Aberdeen,' the ' Champlain,' the ' Druid,' the'Lady Laurier,' the 'Lansdowne,' the ' Minto,' the ' Montcalm,' the * Quadra ' and the ' Stanley,' and these nine steamers cost last year $696,000, or an increase of $519,000. How has all that money been spent? Here is a sample. In 1896 they paid the salaries of the captains and crews of these steamers, amounting altogether to $138,000. They paid for provisions to feed them, $77,000. Now the provisioning of the ' Aberdeen,' as a sample, cost $13,059, or $32.50 per month per man the year round, allowing the steamer had a full crew for a full year. They paid $32.50 per month just to feed the men on that boat, and the government furnished besides the cooks, the waiters, crockery and everything else. When I brought this matter up a few years ago my hon. friend promised me that he would make a change, and have the captain and/ steward board the men by the day. He did so, and how much did he save? On the ' Montcalm ' he paid the captain, or steward, 50 cents a day for the men, and the cost for that steamer amounted to $8,693, or $16 per month. But where the patronage system prevailed they paid their customers at the rate of $10 a barrel for apples for one of the steamers, and everything else m the same proportion. When the steward boarded the men and purchased the provisions, it cost the government $16 per month, whereas, when the provisions were

furnished on the patronage system it cost $30 to $32.50 per month. Is not that squandering the people's money? If the minister will turn up the Auditor General's Report, page 0-16, he will find why it cost so much. On the 'Lady Laurier' the board was $30 per month.

John Tobin & Co., Halifax: Apollo water, one case, $9; condensed cream, 5 cases at $4.60; condensed milk, 5 cases at $5.20; herring, 41 barrels at $2.50; jam, &e., $6.60; pork, 2 barrels at $22; Radnor water, 8 cases splits at $8.38; 7 cases pints at $9.50; shad, one half barrel, $12.50.

< i3 *he way they fed the men on the Bady Laurier,' and that is why it cost so much. If the hon. gentleman will turn to page 0-25, steamer ' Minto,' he will find that Louis Maiois at Quebec was paid $10 for a barrel of apples, and there are other items in keeping-turkeys at $3.75 each and so on. Ten dollars for a barrel of apples when they were $2.50 and $3 in Ottawa. Then there is another case in which they helped a political friend very nicely to which I wish to refer.

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April 2, 1909