May 27, 1921

L LIB

Daniel Duncan McKenzie

Laurier Liberal

Mr. McKENZIE:

It is a very common provision in a contract of this kind, that if default is made in payment of one instalment the whole amount becomes due at once. I simply want to know if the minister had that provision in this contract?

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L LIB

William Daum Euler

Laurier Liberal

Mr. EULER:

I would suggest to the minister, if it can readily be done, that this correspondence with the firm be placed before the committee.

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UNION

Charles Colquhoun Ballantyne (Minister of Marine and Fisheries; Minister of the Naval Service)

Unionist

Mr. BALLANTYNE:

I have no objection at all.

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L LIB

Samuel William Jacobs

Laurier Liberal

Mr. JACOBS:

Why did not the department insist that cash should be paid for this boat, instead of selling it on the instalment plan.

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UNION

Charles Colquhoun Ballantyne (Minister of Marine and Fisheries; Minister of the Naval Service)

Unionist

Mr. BALLANTYNE:

I know my hon.

friend did the best he could for his friends, and it may turn out that it would have been better had the department accepted the next lowest bid for cash, but as there was such a difference in the tenders I made the best deal that I could with this concern, after satisfying myself that they were financially good. I do not think I would have been justified in turning their bid down and accepting another bid some ,125,000 lower.

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L LIB

Daniel Duncan McKenzie

Laurier Liberal

Mr. McKENZIE:

I asked the minister a question, but he did not answer me. I want to know what instructions he gave to the Department of Justice. Were the instructions to sue for $10,000 or for the whole amount? Has the minister received any report from the Justice Department on the contract?

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UNION

Charles Colquhoun Ballantyne (Minister of Marine and Fisheries; Minister of the Naval Service)

Unionist

Mr. BALLANTYNE:

I merely sent the tender to the Justice Department and ad-

vised them of the steps we had taken, quite unsuccessfully, to get the firm to meet their payments. A layman like myself would not presume to suggest to my colleague what legal steps he should take.

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L LIB

Daniel Duncan McKenzie

Laurier Liberal

Mr. McKENZIE:

I must remind the

minister that twenty minutes ago he told us in the most positive way, in a way that no lawyer would dare to do, that the contract was absolutely good, perfectly sound, and enforceable in every particular. Now, when it suits him to say that he does not know anything about law, he tells us that he does not know whether the contract is good or not. The minister ought to be able to tell us what the terms of the contract were. I do not think that fhe tender was ever handed over to the Justice Department. The minister would naturally hand over what was finally consummated in the shape of a contract and which I presume is in writing. The preliminary communings that took place before the final contract do not cut any ice; the contract must speak for itself. The minister must surely have contemplated some discussion of this kind to-night and should have had the contract here. It would not take long for him to get it and we should like to see it. We want to know whose names are on it. It has been suggested to-night that some favoritism has been shown in this matter. Three or four persons tendered and all except one said that they would pay cash in full. This concern is not paying cash and some inside arrangements seem to have been made to favour them. They fell down on their contract altogether and yet are given five or six months' leeway without anything being done. That looks like favouritism. At all events it is what the minister would do for his best friend if he could do anything at all for him. He would say to his very best friend, political or otherwise: "I will turn down the cash tenders of the other people and take advantage of the fact that yours is a little larger, and I will give you the best terms possible and deliver the property to you. If you do fail in your payments I will give you all the time you want and go through the camouflage of handing the matter over to the Justice Department. But you need not be afraid of this; nothing will be done.'" That is what the minister would do for me if I were his very best friend. It remains for him to show that no favouritism characterized this transaction, but that on the contrary, it was a hard and fast business deal. He can make this point clear by

producing the contract and showing that everything has been open andi above board and done in good business shape. And he should do that before the item passes. We ought to have the contract, because this is something that the minister might very well have anticipated.

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UNION

Charles Colquhoun Ballantyne (Minister of Marine and Fisheries; Minister of the Naval Service)

Unionist

Mr. BALLANTYNE:

The hon. member will certainly see the contract to-morrow. I do not find any fault with him for imagining anything he likes. The transaction was a perfectly sound and legitimate business transaction and was perfectly above board. If I had accepted the lowest cash bid of $88,000 and someone had asked the hon. member to inquire of me why I had not accepted the offer of the St. John Rolling Mills at $135,000 even if the terms were longer, I could understand that the hon. member might possibly have something to say. But the whole criticism to-night is directed at the department because we did not take the lower tender, for the reason that it was cash, notwithstanding that it was $30,000 less. Possibly it might have been better had we taken it, although I do not hold that opinion. But everything was done in a proper way and I shall have no hesitation in bringing down all the correspondence, laying all the tenders on the Table, and producing a copy of the contract or the original itself. The Department of Justice was furnished with the contract which we entered into, and I have absolutely nothing to hold back.

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L LIB

Daniel Duncan McKenzie

Laurier Liberal

Mr. McKENZIE :

Personally I do not propose to hold any post mortem upon this item. If we are to have any evidence on the matter at all we should have it before we pass the item. The minister cannot claim any credit for getting $135,000 instead of $112,000, unless he can show us that he is dealing with reliable people. To put up a straw company, such as this ap pears to be, which is not able to meet its responsibilities, which squeals because the nrice of steel has gone down, and which refuses to pay, is something for which the 'unister cannot take credit. There is no credit at all to him in the fact that he turned down a cash offer of $112,000 and accepted a vague promise of $135,000.

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L LIB

Samuel William Jacobs

Laurier Liberal

Mr. JACOBS:

The minister had an offer of $112,000 from A. Garson & Company of St. John for the Niobe alone, and he threw in two torpedo boats, the CC-1 and the CC-2 and got $135,000.

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UNION

Charles Colquhoun Ballantyne (Minister of Marine and Fisheries; Minister of the Naval Service)

Unionist

Mr. BALLANTYNE:

I did not throw

them in at all.

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L LIB
UNION

Charles Colquhoun Ballantyne (Minister of Marine and Fisheries; Minister of the Naval Service)

Unionist

Mr. BALLANTYNE :

No, they were not. Let us be perfectly fair to one another;

I am fair to hon. members and they must be fair to me. I gave all the tenders that my department received for the submarines and I also gave all the tenders that we received for the Niobe. The highest third bid for the Niobe was $112,000, but we actually sold her for $119,000, apart from the submarines altogether. As regards the submarines we received from the St. John Rolling Mills Company the highest price offered by any firm. There is no case of throwing in the submarines at all. It was a straight case of calling for public tenders and giving the contract to the highest bidder. I know very well that these firms that tendered and did not get the contract were sorry; whether or not they are sorry now I do not know. Possibly they are behind all this questioning at the present time. What position should I be in as Minister of Naval-Service if after calling for tenders three times I repudiated the highest tender and gave the contract to another? I should not like to appear before the members of the committee under such circumstances.

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L LIB

Samuel William Jacobs

Laurier Liberal

Mr. JACOBS:

The offer of $112,000

from Garson & Company was a cash offer, while the offer from the New Brunswick Rolling Mills of $119,000 was credit. That is the distinction.

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UNION

Charles Colquhoun Ballantyne (Minister of Marine and Fisheries; Minister of the Naval Service)

Unionist

Mr. BALLANTYNE:

My hon. friend is

getting on to ground that he is not familiar with. It is hardly fair for me to express any adverse opinions regarding any firms that tendered, but it might interest my hon. friend to know that, as regards the firm that tendered $112,000, their cheque was returned to us as being no good.

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L LIB

Ernest Lapointe

Laurier Liberal

Mr. LAPOINTE:

The minister says

that this is a good company. He tells us that there is no doubt about its being solvent, and he is proud of the business deal he has put through. If that is so, surely the Minister of Customs can give us the names of the president and the general manager of the company. St. John is not so large a city. I know that if it were a Quebec company, and if the firm were a reliable one, as the minister says this is, I could give the names of the president and general manager. There is something queer about the whole matter. Surely my hon. friend can give us these names; and we are entitled to see the contract.

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CON

Rupert Wilson Wigmore (Minister of Customs and Inland Revenue)

Conservative (1867-1942)

Mr. WIGMORE:

I have not been in

St. John since Christmas. I know that at

that time this firm were doing a good business. They were working day and night running a rolling mill formerly owned by the St. John Rolling Mill Company. The firm in question took over the St. John Rolling Mill and called it the New Brunswick Rolling Mill and since that time they have been rolling iron there. I know nothing about the business since January, but I can say that they were doing a good business at that time and that they are perfectly able to carry on and pay any indebtedness that they owe. Personally I think this contract is a good one from the Government's standpoint. If I understand the figures correctly, this company agreed to pay $135,000 for the Niobe and the two submarines.

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UNI L
CON

Rupert Wilson Wigmore (Minister of Customs and Inland Revenue)

Conservative (1867-1942)

Mr. WIGMORE:

The highest price received for the submarines was $6,000 each, making $12,000 in all. Take that from .the $135,000. The minister tells me that the amount for the Niobe was $119,000. Now, the manager of the firm is H. J. Garson and the secretary is a man named S. S. Elliot. Both are respectable citizens and good business men of the city of St. John, and I believe they are carrying on a satisfactory business.

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May 27, 1921