January 19, 1916

DEPUTY SERGEANT-AT-ARMS.

CON

Auguste-Charles-Philippe-Robert Landry (Speaker of the Senate)

Conservative (1867-1942)

Mr. SPEAKER:

I have the honour to inform the House that the Sergeant-at-Arms has, with my approval, appointed Louis Charles Panet as Deputy Sergeant-at-Arms for the present session.

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REPORTS AND PAPERS.


Report of the Royal Northwest Mounted Police for the year 1915.-Sir Robert Borden. Report of the Department of Indian Affairs for the year ended March 31, 1915.- Hon. W. J. Roche.


THE GOVERNOR GENERAL'S SPEECH.

ADDRESS IN REPLY.


Consideration of the motion of Mr. Alfred Thompson for an Address to His Royal Highness the Governor General in reply to his speech at the opening of the session, resumed from Tuesday, January 18.


CON

Auguste-Charles-Philippe-Robert Landry (Speaker of the Senate)

Conservative (1867-1942)

Mr. SPEAKER:

Before the House proceeds with this debate, I want to refer to an incident which happened last night between the hon. Solicitor General (Mr. Meighen) and the hon. member for St. John (Mr. Pugsley). Rule 19 of the House of Commons says that " no member shall use offensive words against any member." I see in Hansard, on page 79, that last night the hon. Solicitor General used the following words:

Mr. Meighen: I am satisfied of one thing only, and that is that the hon. gentleman is absolutely unfair and has deliberately misstated the facts.

Some hon. Members: Order, order.

Mr. Speaker: I-

Mr. Pugsley: Mr. Speaker, do not ask the hon. gentleman to take it back.

Mr. Speaker: If the hon. gentleman is satisfied-*

Mr. Pugsley: Perfectly [DOT] satisfied. If the

hon. gentleman forgets himself and ceases to act as a gentleman, I forgive him.

According to the rule which I have just read, every member of this House - will understand that the words used last night by the hon. Solicitor General were offensive, and at the same time I must say that the words used by the hon. member for St. John were also offensive. I see that the hon. Solicitor General is not in his seat; otherwise I would ask him to withdraw the words used, and I would ask the same thing of the hon. member for St. John. Both these two hon. gentlemen have the respect of this House, and no doubt in the future no such words will be used by them, nor by any other member.

Hon. WM. PUGSLEY (St. John City); Mr. Speaker, I am very glad that you have called the attention of the House to what was said last evening. I regret it very much myself, but I thought my hon. friend the Solicitor General had used the words which he did in the excitement of the moment, tho' I think he is not quite correctly reported in Hansard. I think he used the words, " and I fear that the hon. gentleman has done it deliberately." His language was not quite as strong as it appeared in Hansard. I thought that the Solicitor General was very much excited, greatly worried, and I was disposed to forgive him for what I thought was a lapse on his part. However, Mr. Speaker, I desire to say most sincerely that I regret the incident. So far as I am concerned, I am very desirous that all discussions in Parliament should be carried on with due regard to that courtesy which members are always anxious to show to each other, and I shall be glad to act upon your suggestion, Sir, and withdraw the words which I used.

I regret for another reason that my hon. friend the Solicitor General is not present because last evening, when I called attention to the fact that Mr. Thomas had come out to Canada as the personal representative of Mr. Lloyd George to look into the question of the furnishing of shrapnel and high explosive shells in 'Canada, he made a careful investigation into conditions, and upon one occasion, in making a speech in the city of Montreal, he used the words, "If I raise the veil a little." The Solicitor General at once challenged me to produce a newspaper report of that remark of Mr. Thomas. I now, Sir, produce the newspaper, which is the Montreal Gazette [Mr. Speaker.)

of, I think, October 9, 1915, and those are the very words Mr. Thomas used as a preliminary to some other observations he made. I will read the whole of the paragraph containing those words. He said:

If I raise the veil a little, It will be on my own personal responsibility, and do not take It as coming from the Minister of Munitions ; but naturally from my official position I must have considerable inside knowledge of what is going on in Canada in the manufacture of munitions.

Those words are very significant as coming from a gentleman in the position of Mr. Thomas. You will bear in mind that he came to Canada at a critical time, when there were vast orders being placed. He came to consider a question of enormous importance to Canada and to the Empire. He would necessarily be very diplomatic, very careful; he would take his time to look into matters, and it is significant that when he made his speech at Montreal he used those words, " If I raise the veil a little, it will b.e on my own personal responsibility." Mr. Thomas said more than that. In the same paper he is reported to have made the statement to wliich I called the attention of the House last night with regard to economy. He said:

That must be considered, and I may tell you that the cost of shells ip Canada has been higher than in competitive countries. It is complained that fat orders have gone to the United States, but I can assure you that a big slice will be reserved for Canada as long as the price is fairly satisfactory. The prices so far have been higher than in the United States or in Great Britain, where any extra profits have been commandeered by the Government.

In another place Mr. Thomas is reported to have said that up to the preceding June the deliveries from Canada were behind, and that only about two per cent of the orders had been filled.

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CON

John Douglas Hazen (Minister of Marine and Fisheries; Minister of the Naval Service)

Conservative (1867-1942)

Mr. HAZEN:

What is the date of the

Montreal Gazette?

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LIB

William Pugsley

Liberal

Mr. PUGSLEY:

October 9, 1915, as near as I can tell you. It is covered with a rubber stamp which is not very plain. While iMr. Thomas was, of course, very careful, very diplomatic, very desirous of not offending anybody, he was still very firm in his determiniationi to get nid of the old Shell Committee. I have here the report of an interview with Mr. Thomas in the Montreal Herald-and of this also I cannot give the exact date because vae record made with a rubber stamp upon the clipping is not clear. The report states

He believes that there is more " politics " in Canada at the present time than there is in England, and that it is a had thing for Canada.

Big political interests here, at the present juncture, who are intimately connected with manufacturing concerns, are out after orders. Orders come first-the making of munitions being a secondary outcome. Mr. Thomas repeated that it was a bad thing; but added that, in so far as he was able, the British taxpayer came first, and that much as he liked to see the golden stream pouring into Canada, to the benefit of her industries and individuals, that he was guided by no other thought.

That the matter was one of very great importance will 'be apparent from the fact that up to December 16 last, the total contracts for shells and shell boxes-and I suppose the contracts include also fuses^- amounted to the enormous sum of $265,000,000, or about $80,000,000 more than the total! expenditures by the Government of Canada for ordinary purposes. It ie important .to the British Government, as 'Mr. Thomas well knew, thiat shells should be supplied (art the lowest ipos stole cost. To the people of Canada also, this is .an important matter. It appears from the .statement made by the Prime Minister on the day of the opening of this debate, that this Government is advancing a share of the cost of the munitions on the basis of the forces sent from Canada. I take it from the statement which the Minister of Finance ('Sir Thomlais White) has made thiat this is merely a temporary advance to be adjusted with the British Government when they come to determine Canada's proper proportion of the expenditure. 'If we take the forces that Canada has at the front relatively to those thiat Great Britain has latt the front, this would mean that Canada would be bearing one-thirteenth part of the expenditure for shells. If I am right in my figures, then, in addition to the vast sums which Canada is expending in other directions, she twill have to bear an expense of more than $20,000,000 for shells. If there has been paid out, as I am informed is the case, millions upon millions of dollars more for shrapnel and high explosives than these munitions could have been produced for, had business methods been pursued, Canada must bear her share of this loss. My hon. friend the Solicitor General (Mr. Meighen), to whom I am obliged to refer again for a moment, is reported to have made a speech recently in which this subject was referred to. I

speak of that hon. gentleman because he is a prominent member of the Government, and I refer to his speech because it particularly attracted my attention. That speech, if I remember correctly, was made either at Port Arthur or at Fort William. He stated that excessive amounts were being paid for munitions of war. And what was the remedy that he suggested? He suggested that Parliament should impose a war tax upon these excessive profits. In my judgment that is fio adequate remedy. While it would bring into the Canadian treasury a part of the excessive profits, the whole amount of these profits would he taken out of the Imperial and Canadian treasuries respectively in the proportion of about thirteen dollars to one. If the Solicitor General knew as a member of this Government that excessive profits were being taken, that unreasonable profits were being paid for shells and other munitions of war, it was his duty to inform his colleagues and to take the necessary steps to compel the Shell Committee-which, as I have said, was a creature of this Government, a body with whose appointment the British Government had nothing to do except in a nominal way-to cease allowing excessive profits to be made. There are some who hlame the manufacturers of Canada. I do not blame them at all. Under the Shell Committee they were not asked to tender; they were only asked if they could manufacture shells at the prices fixed. They would be more than human if they refused to take the profits which this Government, through its Shell Committee, offered them.

I think I yesterday called attention to the fact, and I desire to repeat it to-day, that the constitution of this Shell Committee was entirely contrary to the public interest, and this Government ought to have known it. This Shell Committee fixed the prices which one company, of which the Shell Committee's chairman was vicepresident, and another company of which Mr. Carnegie, another member of the committee, was manager, were to receive for shells. In other words, the Shell Committee fixed the prices in the benefits of which some of its members were to share. This was clearly not in accordance with business principles, because to that extent incentive was taken away from these .men to make the prices fair and reasonable. A portion of every extra dollar paid for shells went into the pockets of these gentlemen who were directing heads of the Shell Committee. What did General Bertram say

on that subject? This was after he had received the honour of knighthood, which, as I said yesterday, was a very good way to get rid of General Bertram, and to afford opportunity to change the constitution of the committee. He gave an interview in which he said that the other members of the committee had nothing to do with the fixing of prices or giving of orders, that he took upon himself all these things and never consulted his fellow-members regarding such matters. Did the Government know that General Bertram, the vicepresident of John Bertram & Sons, Ltd., which, besides manufacturing, is the selling agent of shell making machinery made in the United States, was carrying on the business of this Shell Committee without consulting his fellow members ?

Although this country,was supposed to have guarding its interests a committee of eight members, four of-them civilians and four of them military men, General Bertram says that really nobody but himself was looking after those important interests. Well, Sir, I am told that General Bertram has not entirely stated the facts, or the whole facts. I am told that Mr. Carnegie, whose company was receiving a large number of orders, was the only member of the committee who was acting with General Bertram; that it was these gentlemen who, in large measure, distributed these favours and, as I have said, to the amount of a vast sum of money, distributed them among themselves. Surely the House will see at once that that was entirely irregular. These gentlemen, who were directing the contracts; who were selling these munitions to the British Government, which was the partner of the Canadian Government in connection with the procuring of them, weTe both sellers and purchasers. As the vendors they fixed the prices; as the purchasers they took the prices which they themselves fixed. As I have said, my information is that millions upon millions of dollars have been taken out of the British taxpayers and out of the people of Canada by reason of the payment of these excessive prices, and by reason of the lack of ordinary business methods in connection with the appointment of the Shell Committee and its operations.

I stated in the House yesterday that there was an insistent demand from the people of Canada that an investigation should be had into these matters. There is no doubt that Mr. Thomas did investigate. There is no doubt that he came to the conclusion

that this Shell Committee, the creation of the Government through my hon. friend the Minister of Militia, should go. He took his own time to have them go, but he made up his mind that go they should, and go they did. A new committee was appointed, with Mr. Flavelle at its head. Let me now read to you, Sir, and to this House, some extracts from leading newspapers bearing upon thi-s subject. I do this because 1 think the House will agree with me that, speaking generally, the newspapers oi Canada may be relied upon to give a fail-idea of public opinion, and to express also the honest views of the editors, based upon the information which they have the opportunity of obtaining with regard to the matters of which they write. But before I proceed to.that I should like to call attention to another remark which Mr. Thomas is reported to have made. I am now quoting from his public statement in both the Montreal Star and the Montreal Gazette. After stating that the cost in Canada had been greater than in the United States oi Great Britain, Mr. Thomas is reported in these two newspapers to have further said:

In June last Canada was, frankly, rather behind in making good in point of time on the orders that had been placed-only two per cent of the orders had made good. Public sentiment would not be met by retirement of the manufacturing members of the shell committee.

Mr. Thomas must have discovered facts of very great importance to have induced him, coming to this country as a stranger, to make these observations. And his remarks are evidence, I think, that he found the conditions very serious, and that the only way in which the interests of Canada and of the Empire could be served; the only way in which the public sentiment could be-satisfied, was by completely disorganizing that Shell Committee and appointing a new committee, which should be directly under the control of the Imperial Government. Mr. Thomas made an important change in another respect. He did not approve the conduct of the Canadian Shell Committee in themselves fixing the prices and giving the contracts at those prices; he believed in and adopted the principle of competition.

Let me read, first, from the Toronto Saturday Night, a journal which has devoted a good deal of attention to this subject, and which, I believe, recently expressed some dissatisfaction with the new committee as well. There are some people who almost believe that my hon. friend the Minister of Militia shares the views of the Toronto

Saturday Night as to the new (Commission. In its issue of October 23, 19115, that journal said: [DOT]

The shell committee was no place for a gentleman directly connected with the shellmaking 'plants-corporations, he it noted, with directorates having wide ramifications.

I iam sorry that my hon. friend the Minister of Public Works is not in his place, because I am going to quote from a newspaper with whose views I think he is very thoroughly in accord. He will, perhaps, be able to impress upon his colleagues the desirability of giving attention to those views. I quote from the Winnipeg Telegram of November 1, 1915:

The greatest of Welsh humorists is D. A. Thomas. No one suspected that the hardheaded Welsh coal magnate had as strong a sense of humour as the author of Sam Slick. His farewell announcement has convulsed Ottawa with laughter. He spanked General Sir [DOT]Sam, told him he was a good, active little hoy, hut to keep his fingers out of the jampot ; gave General Bertram a fine dish of soft soap, hut warned him that business was not his forte; praised the Canadian manufacturers for their energy and enterprise, but suggested that smaller profits would show greater patriotism; and kicked out Colonel Cantley, general manager of the Nova Scotia shell game, with such a grace, that this gentleman thinks he has been promoted.

A quotation appealed in the Ottawa Citizen from the Grain Growers' Guide of November 24-I assume that it is a correct quotation. The Grain Growers' Guide says:

There certainly should be a thorough public investigation of this matter. If it is true that Canadian shell manufacturers have been robbing the British treasury of millions of dollars in these ways, they are guilty of assisting the enemy, and no punishment would he too severe for them. They belong to the plutocratic class that has always claimed for itself a monopoly of patriotic sentiment, and if they are guilty of what is charged against them their disgrace is all the deeper. Perhaps these charges are not true, and if so the manufacturers should be given an opportunity to prove their honesty. Let the public have the facts and let all concerned take the consequences.

As I have already said, I disagree with anybody who says that the manufacturers of this country are to blame. I say, if there is any blame; if there is any offence against the public, or any impropriety which'ought to be condemned, it is upon the part of the gentlemen who were created a shell committee by this Government, and who themselves fixed the prices which they were willing to pay to the manufacturers.

The Ottawa Citizen, under date of November 29, makes reference to an editorial which appeared in the Toronto Telegram. It says: 6

The. Telegram publishes the followng editorial demand for Investigation of the late shell committee by the Davidson Royal Commission :

Is Sir Charles Davidson to squander all the time and energy on his inquisition upon drug clerks, vendors of aged and spavined equines or thrifty gentlemen who short change the country in the supply of oats for war horses?

The work of the shell committee in the purchase of munitions for the British government should he lit up with all the illuminating power of Sir Charles Davidson's lanterns of truth.

The worst sort of quibble travels in the suggestion that the shell committee was spending the money of the British taxpayers, and the work of that committee is therefore none of Sir Robert Borden's business.

The shell committee was acting on behalf of Sir Robert Borden just as Sir Robert Borden was acting on behalf of the Canadian people. The shell committee was not the steward of Canada's money. The shell committee was the steward of Canada's honour. The procedure that keeps the work of the shell committee outside the zone of the Davidson inquiry is not worthy of Sir Robert Borden. That procedure is no fulfilment of Sir Robert Borden's promise to institute and prosecute a full and searching and impartial inquiry into all war expenditures.

That article appeared in a newspaper which is owned and controlled by a very prominent member of the Conservative party, who formerly sat in this House. It is one of the most influential papers in the city of Toronto, and I shall ask hon. gentlemen whether the argument which is made in favour of an investigation is not a sound bne. He calls- attention to the fact that the Prime Minister promised a full and complete investigation into the *war expenditures. But here is a matter of expenditure running far and away beyond any expenditure in connection with [DOT]ordinary war supplies. He asks why the work of the Davidson Commission should be confined to an inquiry into purchases of horses, drugs, and matters of that kind when these vast expenditures made in Canada by a commission appointed by this Government go uninvestigated. When the editor of the Toronto Telegram wrote that article he did not know what we in this House know to-day, from the statement which the Minister of Finance has made, that in the final accounting Canada is to pay her proportion of the cost of all these war munitions, including shrapnel, high explgsive shells, and all kinds of equipment. If the editor of the Toronto Telegram had known that, he would have said that in these purchases of war material Canada and Great Britain are in partnership; Canada is to pay her share of all these expenditures relatively to the number of men she will have at the front; that, when the Shell Committee was pur-

chasing shells for the British Government, it was purchasing shells lor the Canadian Government as well, and, therefore, that for every million dollars of _ excessive prices which have been paid through the unbusinesslike and improper methods adopted by this Shell Committee, Canada is paying her share. When this Government advanced'during the summer a good many millions of dollars to the British Government to enable payment to be made for these war munitions, she was giving to the British Government her own share of these expenditures, the amount of which has to be determined "When the account comes to be finally adjusted. Therefore it is absolutely clear that if this Government is going to allow Parliament to investigate any war expenditures made by Canada, this is one subject of the very greatest possible importance which demands investigation at the hands of this Parliament; and in submitting the matter to Parliament I claim that the hon. gentlemen who occupy seats behind the Treasury Benches and those of us who sit on this side of the House have a duty to perform as trustees foT the people of Canada, just as much as those who sit on the Treasury Benches; and we would not be doing our duty if we did not, by every possible, every legitimate means within our power, insist upon the fullest! the most complete investigation of these vast expenditures.

Why, what took place during the Boer war? While the then Minister of Agriculture refused to answer some questions with regard to purchases of hay in the province of Quebec, this House adopted a resolution requiring the Government to bring before the House all correspondence which had taken place with the Imperial Government in reference to the purchase of hay and other military supplies which were going to South Africa; and when there was some delay in the bringing down of the return, tne present Minister of Trade and Commerce (Sir George Foster), who was then a leading member of the Opposition, rose in his place and informed the then Minister of Agriculture that he must understand that his estimates could not be passed until those documents were laid before the House. That is the attitude which the Minister of Trade and Commerce took even in reference to the bringing down of correspondence regarding the purchase of hay. But, Sir, how different were the circumstances then from what they are to-day! At that time all that Canada was doing was to. send to the front

the Canadian boys who volunteered for service in South Africa, and all the equipment, all the supplies, alfi this hay about which inquiries were being made, were being paid for by the British Government, and Canada had nothing to do with the expenditure. How different it is to-day with regard to the shells and other war munitions for which this Government has entered into a solemn obligation with the Imperial Government to pay its proper proportion, so that Canada's proportion of this expenditure is disbursed through the Shell Committee appointed by this Government, just as is the money of the Imperial Government.

The Ottawa Citizen of November 16, 1915, says:

Britain has been charged $5.15 for machining 18-pounder shells, though they could be machined profitably at $1. By steps the British authorities succeeded in getting the price down to $2.90. Even though a responsible contractor offered to machine the shells at $1.40, the Dominion Shell Committee ordered the shellmachining at $2.90. Certain Canadian shells have been costing more than United States shells to the Motherland.

Again, on December 4, the Toronto Saturday Night says:

If Canadian manufacturers will get down to brass tacks, eliminate the stock ticker from their considerations, and if the "profiteers" will bend their energies to shell the German trenches instead of shelling the public with stock at ridiculously artificial prices, Canada as a nation will keep all its idle and semi-idle plants busy for as long as the war lasts, and will come out bettered financially.

Then, the Montreal Daily Mail, a papei which has the sympathy and enjoys the confidence of prominent members of this Administration, is quoted in" the Toronto Globe of December 24 as making the following statement:

It is with real reluctance that the Daily Mail suggests the incompleteness-of what is termed General Bertram's "valedictory." A public duty, however, cannot be evaded, and it is a public duty to remind General Bertram that his statement, utterly lacking in detail and definiteness as affecting the criticism of the work of his committee, does not allay suspicion but tends to strengthen it. Major-General Bertram has-been accused of enriching his private interests from business placed by the shell committee under his direction. He has been .accused of' showing favoritism in the distribution of shell orders, and of allowing prices to the manufacturers (including his own concerns) out of all proportion to the cost. Not one of these charges did he deal with in his valedictory, except in relation to the price of shells, and in this particular matter he witholds from the public the very information it desires.

Major-General Bertram would have been well advised to say more or say nothing. His latest statement, padded with information which is

of no material interest to the public, would appear to be a crude pretext for putting the public off the scent in regard to the operations of the late shell committee. The public is ready to be convinced that General Bertram can justify every transaction consummated under his official auspices. While it will not jump to any half-baked conclusions, it will accept definite answers to definite accusations. General Bertram. in his utter lack of frankness in defending the work of the committee, has done poor service to himself, and has very materially strengthened the demand for a public investigation of his direction of the shell committee.

That is a strong editorial, the editorial of a newspaper not only friendly but zealously friendly to this Government. Surely that is a statement which this Government, and this Parliament, cannot afford to throw lightly lasiide.

Then, the Hamilton 'Spectator-I do not know whether that paper supports the Government, or whether it opposes it.

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'84 COMMONS


Kingdom munition manufacturers must contribute to the state 50 per cent of the profits they make in excess of an amount of £100 above their average annual profits for the last three years. While prices are still up, as Mr. Bonar Law says, so much of the excess over a reasonable margin above cost comes back to the state. In Canada, manufacturing industry is far from being in the closely-organized state of British industry. Strong pressure has been needed to work down prices of munitions to a fair-profit level, and in some cases they are yet far from meeting the requirements of economy set forth by the British colonial secretary. As we begin to bear our own financial war burdens we must necessarily see that far from being in the position of mere vendors of war wares to an outside government-with a vendor's privileges-our manufacturers are a part of the Canadian war economy, as well as of the 'imperial, and that patriotism requires munition contracts to be figured, not to make the greatest stroke for profits, but to give most benefit to the state. Then the Vancouver Sun comments: When the Mail realizes that it can not defend, much less acclaim the proceedings ot the shell committee and the manufacturers, the News-Advertiser should understand that thick and thin support of its party under such circumstances is clear indecency. Now, Sir, I am not sure that I am correctly informed as to the manufacturer in Hamilton who offered to Mr. Thomas to place his factory at the disposal of the Government so as to make shells free of charge; but I am told-probably it is the same gentleman-that there is a manufacturer in Ontario who, under the prices which had been fixed by the Shell Committee, and to which, as I have said, the manufacturers were not a party,, made a profit of half a million dollars, and who, thinking he had got enough, then offered h.is factory to the Government to turn out munitions of war free of charge. He had been surfeited with the enormous profits which the Shell Committee had enabled him to make.


LIB
LIB

William Pugsley

Liberal

Mr. PUGSLEY:

They did not accept his offer. And why, Mr. Speaker? What I told you yesterday showed that this Government, through its Shell Committee, did not take hold of this business with a view to supplying munitions of war for the armies of the Allies at the lowest possible cost. They took hold of it rather with the view of relieving industrial depression in this country, and they were guided by the thought that, as the result of the demand for army supplies, including munitions of war, they would be able to start small in-

dustries all over this country; that they would be able, I Tegret to say, to give much encouragement to political favourites and turn much money into their pockets. Probably my hon. friend the Minister of Militia will resent that istatement. Still, Sir, I say that if that was their motive, they could not have gone about carrying it out in a more direct fashion than the way they did. Therefore, if they had started a factory themselves and turned out these munitions of war at actual cost, they would have had to reduce the price to these other factories throughout the country, many of which were merely the creations of mushroom companies which had started by reason of the giving of these war orders.

Then, the Manitoba Free Press in an article on Dec. 28, said:

It is beyond all question that the people ot Canada will be more than glad to have it proved that the shell contracts have been honestly awarded and are being carried out with reasonable efficiency. There is not a Canadian worth discussing who would not prefer to believe that Canadian manufacturers are innocent of exploiting the unbottomed misery into which * this war has plunged practically the whole human race. And, although much less important, because merely material, there is not a Canadian who would not prefer to believe that Canada's industrial capacity was equal to present war emergencies.

There is, however, a fundamental thing upon which decent Canadians of every stripe and colour are adamant. This fundamental thing is that beyond ordinary and reasonable profits on the supply of necessary and honestly manufactured war materials, private parties shall not derive advantage and that family fortunes shall not be founded, to be spent no doubt after the war in easeful and luxurious living.

With all respect to General Bertram his Toronto interview, reported in yesterday's Free Press, is just as weak as the uplifted hands of the Canadian weekly published in the same city. Mere assertions of virtue are entirely out of court. Whatever a full and fearless inquiry may disclose, grave suspicion as to extortion, and even graft, in regard to the shell contracts is at this present warranted.

The Montreal Herald, on November 30, said:

The humiliating thing is that this is the work

of a " Dominion " Shell Committee-

Let that never be forgotten. I say that this was not the work of a committee appointed by the British Government; this was the work of a committee appointed by this Government, and for whose actions this Government must be held responsible to the people of Canada. The Herald says:

The humiliating thing is, that this is the work of a " Dominion " Shell Committee, and therefore represents the national policy regarding the .manufacture of munitions. This is how our industrial resources have been ' mobilized ' to

meet the supreme need of the Empire and of civilization itself! Compare this with the policy in force with the rest of the Allied nations. Compare it with a statement for instance, of the chairman of the Steel Company of Scotland, in an address at the annual meeting of the stockholders in October:

Then follows the address, which I will read:

" You are aware that on more than one occasion I have in this place denounced government legislation as it affected the country's industries, and I may be permitted to say how heartily I approve of the principle (the special taxation of war profits) which has now been set forth in Mr. McKenna's budget, although I am not at all sure that its application is adequate. To my mind, there is something absolutely revolting in the idea of anybody making profits out of the natiori's agony-and especially so in the case of a man or company who had no extra labour or anxiety, but whose -opportunity has come solely because of an artificial scarcity created by the Government on account of the nation's need. The ideal principle of taxation is, of course, equality of sacrifice. . . . When we think of those splen- . did men of ours in Belgium, France, the Dardanelles, and elsewhere. . . who have sacrificed home, kindred, health, comfort and ease.

. . . we must feel how paltry and Insignificant is any monetary sacrifice which we, who must remain at home, can lay on the altar of patriotism. . . It may be, indeed, that before the war is ended, the Government may find it necessary to take not 50 but 100 per cent of those extra profits, and if they do, I hope none of us will complain."

In Canada some of the favoured companies are counting profits by the millions; they are gloating over prices that will run, it is declared, all the way up to 150 per cent profit on their entire capitalization. They see nothing revolting, apparently, in profiteering to the full out of the British nation's agony.

I want to pause for a moment to repeat here that the taxation of extra profits will avail nothing in so far as the relief of the British Treasury is concerned. It will present the anomalous spectacle of the members of this committee having fixed the excessive prices which will be paid to the manufacturers, including those companies of which they were the directing heads, and then by the imposition of taxes, taking the money back again, not giving it to the Imperial Treasury, but putting it into the treasury of Canada. That would be no remedy. The remedy was for this Government to have watched the work of the Shell Committee from the beginning, and have seen that they discharged their duty to the country, that they did not pay excessive prices, and that they did their duty by Canada and the Empire.

There is another very important article in the Toronto Telegram of December 22, which I trust I may be pardoned for reading. I do it because of what I conceive to be the vast importance of the subject, and because of the necessity of placing before the House the views of the public of Canada as represented by its leading newspapers. The Toronto Telegram published an article on this subject on December 22, 1915, which I will read-in full:

Exploiting War Orders-Doings of Middlemen

-Proposition is up to Premier Borden,

Declares the Contract Record of Toronto.

Down New York way they're still sending out circulars that tell of desirable investments created by filling, war orders in Canada, says the Contract Record in this week's issue. One of the latest comes from .Gilbert Elliott and Company. It advises clients to invest in Canada Foundries and Forgings Company, which has shops at Brockville and Welland.

Then there is a quotation of the figures. If I am not mistaken, Sir Henry Pellatt is

president of that company.

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LIB
LIB
LIB

William Pugsley

Liberal

Mr. PUGSLEY:

I saw that there had been some denial of a statement of profits which had been put forth by a company with which he was connected. I will read the article from the Telegram, not knowing, of course, whether there was any contradiction of it or not: [DOT]

"We a>re advised from sources upon which we can rely, that earnings for the past ten months ending November 1, 1915, are over $900,000, and that the monthly earnings are now running at the rate of $150,000, or equal to $1,860,000 per year, which after taking care of fixed charges, will amount to over 150 per cent per annum on the outstanding common stock."

That is prefaced by the statement of Gilbert Elliott & Co., who, I assume, were brokers endeavouring to dispose of the stock of the company. Their information may or may not be correct. I cannot vouch for it, and I do not expect that the paper vouches for it either. It would not know, but the editor, or whoever wrote this article, saw it in the financial circular which was sent out by these brokers.

Sir Sam's Speech. .

The circular also stated that the company has within the past year filled large orders for shells for the British government, in addition to its commercial business.

Right on top of this comes Sir Sam Hughes with a speech to Ward 4 Conservatives, Toronto. From a newspaper report of that speech the following is clipped:

" Sir Sam related how, when the first order for 200,000 shells came to Canada, there were

only four men In the whole of the Dominion who had tshe courage to tackle * that little twopenny ha'penny order.' It had taken a week arid a half to even get them to face the issue.

" Since then we have delivered four million shells," declared Sir Sam. " Upwards of $350,000,000 from shells alone has been placed in the pockets of the workmen."

Who are the "Workmen?"

Now, taking the circular from Now York with the story told by Sir Sam, who would you take " workmen " to mean-the men who " worked " the Shell Committee or the men who work in munition factories? If Sir Sam means the latter he is evidently talking arrant nonsense. If the workmen have got-$350,000,000 in wages Canada must have shipped at least a billion dollars' worth of shells, for the cost of material and even reasonable profits would' make the difference between the sums mentioned. Every body'knows that Canada has not shipped either a billion or half a billion dollars' worth of shells. Cabinet ministers should be required to know some little thing about what they are talking.

Real Plants Ready.

Anothe'r excerpt from the report of Sir Sam's furious speech reads as follows:-

"S r S m said that men had gone to him with a white sheet of paper, in some cases with their sisters tagging on behind, and not a cent of capital, asking to get orders.

"An-1 these are the men who are making the complaints. I threw them out of my office as fast as they came in and some of them were good friends of mine. Some of them were Tories, too."

That is the condition which Mr. Thomas found when he arrived in Ottawa; he found that politics and munition orders were mixed very thoroughly together. Then the Telegram proceeds:

And within a block of where Sir Sam spoke was a foundry capable of turning out thousands of shells daily, lying almost idle.

That is typical of the condition of affairs throughout the country, that there were scores and hundreds of shops which were not utilized. The Telegram proceeds:

And I can furnish Sir Sam with a list of men who have the factories and who could not get orders. If they are not complaining too loudly it is because they still have hopes of securing orders.

A Pet Organization.

These attempts to belittle the manufacturers who have been wronged by the shell committee are unworthy of men of cabinet size. Bufthe shell committee was a pet organization of Sir Sam and he is only following the policy of his party to minimize those mistakes which lost to the manufacturers of Canada the greatest opportunity of a century.

Why did the Government lease the Transcona car shops to a private company for the manufacture of shells? Well, perhaps you had better ask D. A. Thomas. The shell committee was the part of the Dominion Government with which he came in contact. So when the Government proposed to start in to manufacture shells

without saying anything about price you can imagine him throwing up his hands and exclaiming " Heaven forbid!" However, what he said to the Government was, " put in a tender." Well, you know that shell committee never did care for tenders, anyway. It just shied off and the Government with it.

Now, I need not read the whole of the article, but I come down to the last part of it in which a positive statement is made with regard to a clerk getting a contract, which is an instance of, the newspaper says, how the shell committee handled contracts. The Telegram says:

Clerk got Contract.

This story has been investigated and can he vouched for, as can the others that have from time to time found place in this column. The owner of a planing mill in an Ontario town went out after a shell-box contract. His application brought the usual answer that all contracts had been let. Imagine his surprise when a shipping clerk in a dry goods house in his own town secured a contract, put up a building, completed his contract and got a renewal. The ' shipping clerk had no plant, no experience and no business rating. - But lie knew a man who knew something about bow contracts were got. Pretty wise man, wasn't he? Thrifty, too. For he still retains his job as shipping clerk, though he occasionally finds a few moments to run over to the shell-box plant and figure his profits.

How did he do it? Ask the average box manufacturer and his answer will be: "Search me." For, strartge to say, this shell game does not appear to have run along purely political lines. There are instances given where Liberals secured contracts and Conservatives could not get within hailing distance of them. Truly that shell committee moved in- a mysterious way its wonders-to perform. It might he put on .as a. movie mystery with a contract as a prize for the nearest guesser of its methods.

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January 19, 1916