June 22, 1926

LIB

Georges Henri Boivin (Minister of Customs and Excise)

Liberal

Mr. BOIVIN:

Was the warrant of commitment issued by the judge on the same date that the conviction which my hon. friend has just' read was entered?

Topic:   CANADIAN FUEL SUPPLY
Subtopic:   CUSTOMS INQUIRY
Sub-subtopic:   RETORT OF SPECIAL COMMITTEE-MOTION FOR CONCURRENCE AND AMENDMENT THERETO.
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CON

Leslie Gordon Bell

Conservative (1867-1942)

Mr. BELL (Hamilton):

There never was

any warrant of commitment, because my hon friend stopped it.

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Subtopic:   CUSTOMS INQUIRY
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LIB

Georges Henri Boivin (Minister of Customs and Excise)

Liberal

Mr. BOIVIN:

There never was any warrant of commitment? There certainly was a warrant of commitment, because Moses Aziz is in gaol at the present time, and he could not be there without a warrant of commitment. I would like to know when that warrant was issued and upon whose request.

Topic:   CANADIAN FUEL SUPPLY
Subtopic:   CUSTOMS INQUIRY
Sub-subtopic:   RETORT OF SPECIAL COMMITTEE-MOTION FOR CONCURRENCE AND AMENDMENT THERETO.
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CON

Leslie Gordon Bell

Conservative (1867-1942)

Mr. BELL (Hamilton):

If there had never been a member for Vancouver Centre, Moses Aziz would never have gone to gaol.

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LIB

Georges Henri Boivin (Minister of Customs and Excise)

Liberal

Mr. BOIVIN:

I explained this afternoon why that warrant of commitment had not been issued, and I think my hon. friend should accept my explanation. He is bound to accept it, and he has no right to insinuate, whether he sat on the committee or not, that the warrant would not have been issued if there had not been a member for Vancouver Centre sitting on the Customs committee. 1 ask him to take back that statement; I insist upon its withdrawal.

Topic:   CANADIAN FUEL SUPPLY
Subtopic:   CUSTOMS INQUIRY
Sub-subtopic:   RETORT OF SPECIAL COMMITTEE-MOTION FOR CONCURRENCE AND AMENDMENT THERETO.
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CON

Leslie Gordon Bell

Conservative (1867-1942)

Mr. BELL (Hamilton):

I do not consider that there is anything that I should be called upon to withdraw, and I decline to withdraw anything I have said in that respect. I am at a loss to understand how the hon. member can make any such suggestion for one moment. He knows perfectly well that the only explanation he sought to give before the committee was the explanation given or

April 28th when he said that he had not seen Mr. Robichaud excepting on the one occasion on January 28, in this building, when Robichaud came to him and discussed another matter in which he desired the assistance of the minister, and the minister stated he was so tender-hearted that he would not take up the Aziz matter with Robichaud because he did not want to refuse him two things on the one occasion. But, Sir, the minister has never told the committee, he has never told the House, he has not told the House right down to this moment, why it was that although he met Robichaud in January in this House and that matter was discussed, he allowed January to go by, he allowed February, March and April to go by. without any further explanation until at oui meeting of April 28th he admitted that the man was still at large.

Topic:   CANADIAN FUEL SUPPLY
Subtopic:   CUSTOMS INQUIRY
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LIB

Georges Henri Boivin (Minister of Customs and Excise)

Liberal

Mr. BOIVIN:

Mr. Speaker, I rise to a point of order. The statement the hon. gentleman has just made, that I never told the committee and never told the House why Moses Aziz was still at large on that date, is, as my hon. friend knows, not according to facts. This afternoon I stated that the reason why Moses Aziz was still at large when that case came before the committee was because I wanted to submit all the documents, submit the entire record which had remained upon my desk, absolutely in the way in which they were on the day the committee was formed, that I did not want to take any action in the matter until it had been submitted to the committee. I must again ask and insist that the hon. member withdraw his statement that if it had not been for the hon member for Vancouver Centre Moses Aziz would not be in gaol.

Topic:   CANADIAN FUEL SUPPLY
Subtopic:   CUSTOMS INQUIRY
Sub-subtopic:   RETORT OF SPECIAL COMMITTEE-MOTION FOR CONCURRENCE AND AMENDMENT THERETO.
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?

Some hon. MEMBERS:

Oh, oh.

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LIB

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

Order.

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LIB

Georges Henri Boivin (Minister of Customs and Excise)

Liberal

Mr. BOIVIN:

I made a statement this

aftenoon giving information to the contrary, and I ask that my statement be accepted.

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CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

If in the discussion of the conduct of the Minister of Customs and Excise his statement or reason must be accepted why of course, this debate should close. The question in this debate is this: Is the minister's statement or reason to be accepted on the evidence or not? If his say-so ends it, why there should be no debate.

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LIB

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

I was just about to state that this is a very involved case, and the question is one of appreciation of the evidence which was given in the committee. I do not find that the hon. member for West Hamilton has transgressed the rule. He does

Customs Inquiry-Mr. Bell (Hamilton)

not accept the explanation given by the hon. Minister of Customs and Excise. I repeat that it is a question of appreciating the evidence, and I do not know that any point of order is involved.

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Subtopic:   CUSTOMS INQUIRY
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CON

Leslie Gordon Bell

Conservative (1867-1942)

Mr. BELL (Hamilton):

Now that the Minister of Customs and Excise has introduced the question of what took place on his appearance before the Customs committee, I am going to turn up the evidence, Mr. Speaker, and I invite his further contradiction if he feels disposed to make it. I want, and I know he realizes the fact, to be fair to him in regard to the matter. Let me first call the attention of the House to the fact that the Aziz case came before the Customs committee on the 21st day of April, 1926, and it was not until five days had elapsed that the minister appeared before the committee, made his own statement and was subjected to crossexamination on it. His statement is very short and I would like to read it to the House. I wish to draw the attention of the House to it for another reason, namely, that in spite of the fact that the minister then told us that he did not believe his letter or his telegram were worth the paper they were written on, he gave us this afternoon a somewhat elaborate statement purporting to show why on that occasion he did believe he had the very power he now says he knows he did not possess. The minister on the 26th April, 1926, having had five full days for reflection and recollection as to what had taken place, came before the committee and made the following statement:

As I happen to be before the committee, if Mr. Bennett will allow me, I might perhaps clear up the question of who signed these letters. At least I would be very glad to do so. If I may be allowed, Mr. Chairman, I saw in the evidence that was given when this Moses Aziz case was first before the committee that a reference was made to a statement of mine at the beginning of the inquiry, that I had been appointed on the 4th September, sworn in on the fifth and had taken over the complete administration of the department on the 31st October. If the committee will look two pages further down in the same evidence they will find that I took good care to say, before leaving the box, that I did not want to mislead the committee, that I had been in Ottawa on two or three occasions to attend council meetings, and when here, had gone tp the office and attended to some routine matters. The 29tih September, or 28th and 29th September was evidently one of those occasions. I remember very well having seen a telegram, or a letter of the 21st September which was on my desk when I arrived. I might say I was at the office only in the evening. My private secretary, Mr. Ide, was there with me assisting me to clean up correspondence, and when I saw the letter of September 21st, without taking the time to go through the file I was informed by Mr. Ide in a previous message sent by the-I cannot remember.

I will not take up the time of the House by reading further from that statement, but I am going to refer again to page 1407, on which it appears, and draw the attention of the House to the fact that this afternoon the minister gave us a long detailed account of how he had sent for Mr. Farrow, the deputy minister, and had asked Mr. Farrow, whether he, the minister, had the right to intervene to stop the issue of the warrant of commitment or not, and of how Mr. Farrow had assured him that it would be all right to go ahead. I draw the attention of the House to this fact; that if that were so it had completely passed from the mind of the minister when he made that detailed explanation on April 26 of what had occurred, because there is not the slightest reference to Mr. Farrow or anybody else being present. It passes my understanding, even if the minister could have conferred with Mr. Farrow on that point, why he, the crown prosecutor for years, the star legal man in his own division, should have consulted Mr. Farrow, who was not a lawyer, to know whether or not he, the keen legal mind, had a right to intervene.

Hon. members will note that here and there throughout the evidence taken before the Customs committee the same sort of thing kept cropping up. I do not refer to the appeals for clemency, but to this sort of political interference which prevented the laws of the country being enforced. I refer to the case of Byron Brown in October, 1923, when Hon. Jacques Bureau was still Minister of Customs. Brown was convicted of transporting liquor illegally, fined, and given a month in jail. Was the fine ever collected? It was not. Was the time ever served? It was not. Hon. J. E. Sinclair and Hon. B. C. Prowse came to Ottawa, and they were the men responsible for the fine not being collected and the imprisonment not being carried out to this day.

There was also t'he case of Geifard Harnish, against whom a seizure was levied on 11th June, 1925. The report shows that Harnish was one of the biggest smugglers in Nova Scotia, and when apprehended he offered to plead guilty. But with this tenderhearted government in office they would not let him plead guilty, they hung the matter up to the 4th of December, and then this minister sent word that proceedings were to be withheld. Did he just walk in, look at this file, and go out again without making inquiry? The Minister of Customs stated that proceedings in that case were to be withheld; they were withheld and have been withheld until this day. It was suggested in the course of the com-

4870 COMMONS

Customs Inquiry-Mr. Bell (Hamilton)

mittee investigation-and I think it has been suggested outside thid' House-that there were others who had applied for ministerial clemency in the ease of persons convicted, and if there were other cases such as this- and I have not heard of them-would the House for one moment tolerate the plea of a man or three men who came before us and said, "Yes we were guilty, but you have got to declare us innocent because there are half a dozen others who are just as guilty as we are." That is the only argument advanced in extenuation of the conduct of the minister and his associates.

With this situation before us, what is this parliament going to do? When there is a settled course of conduct persisted in month after month, year after year, and when conditions are getting worse instead of better, are we going to say that we are so lost to all idea of decent obligation that we will pass it over because the minister is a good fellow and we would like to see him keep office, whether he has done these things or not? Is that to be the argument by which the decision of parliament is to be governed? Let me point out to this House that every member who votes against the present amendment subscribes to this creed: "I believe in the protection of smugglers and crooks against all honest merchants. I believe that high office may be prostituted to low purposes, to serve political ends. I believe that we may violate every obligation and every tradition of the courts in order to advance ourselves and win elections." If that is going to be the decision of parliament to-night or to-morrow, let us know it, for just as much as the minister himself, just as much as the Prime Minister who ignored the honest man and responded to the appeals of the crook, this house of parliament is itself on trial in this matter. The whole country will watch to see whether this matter is disposed of as it should be, and some of the keenest of the watchers will be the crooks down at Hock Island, namely, Gilmore, Telford, Pike, Jenkins, Wilkinson and all the rest of the miserable gang. They want to know what the House is going to do. Bisaillon wants to know, and every man who hopes to carry on in future that course of crookedness that has disgraced this country will' want to know whether or not he is to be free to pursue it in future.

I often think, Sir, as I come up to this House, either by those winding paths that skirt its grounds on both sides, or by the broad avenue that leads to the front door, that this House stands here as symbolical of all that is best and most dignified in our national life.

I think too that here, where we have set up the high court of parliament, above all places must right, honesty and justice sit enthroned, and with that thought there comes this in addition, that better far we had seen this splendid building levelled to the ground till not one stone remained upon another than to endure the infamy of subscribing to those things of which we have read and heard. The results of this vote will extend far beyond our own time into the time of generations yet to come. When the vote is recorded on this amendment every man within this chamber will be confronted by his own personal and individual responsibility, for, say what any hon. member may like about the matter, it is not a question of fiscal policy; it is not a question of political expediency; it is the old, old question of right against wrong, the question of straightforwardness as opposed to disgraceful intrigue, the question of national honour as against national dishonour. That is the question upon which each one of us must take his stand.

There is no alternative. I say to this House that in the fulness of time when this building in the natural course shall have crumbled away and everyone here is dust again with the ages, there will be indelibly engraven on the records of this country the stand taken by every man, whether he stood in favour of condonation of those things that have thrown down and defiled our altars of justice in this land, or whether he remained steadfast for those traditions and those high ideals which alone can make Canada great.

Topic:   CANADIAN FUEL SUPPLY
Subtopic:   CUSTOMS INQUIRY
Sub-subtopic:   RETORT OF SPECIAL COMMITTEE-MOTION FOR CONCURRENCE AND AMENDMENT THERETO.
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LIB

Dugald Donaghy

Liberal

Mr. DUGALD DONAGHY (Vancouver North):

Mr. Speaker, I have listened with interest to the address delivered by the hon. member for West Hamilton (Mr. Bell). He is one of the few members of this House whom I have known for many years. I have a great respect for his skill and ability as a pleader, and I think that from the standpoint of hon. gentlemen on the other side he has put forward as strong a special plea as any lawyer in the House could. I am not going to follow his example; I propose to take a somewhat different course. I intend to discuss intelligently if I can what was brought before the Customs committee, the evidence which we considered, the report which we made and the grounds upon which we made it. I do this because I think what the country is interested in is not so much personal recriminations or an attempt, in the slang phraseologly, to " get " a political opponent, but in knowing what this House and this parliament are going to do to remedy conditions that have existed for some years

Customs Inquiry-Mr. Donaghy

with regard to the smuggling of goods into the Dominion of Canada.

The Department of Customs and Excise has grown to be a somewhat important department in the last few years. Originally the minister had under his control merely the administration of customs. Later on the Department of Excise was amalgamated with the Department of Customs and he was charged with that responsibility as well. In 1920 further work was thrown upon the minister of this department when he was charged with the collection of the sales tax, and in 1924 the collection of income taxes for the Dominion of Canada was placed under the Department of Customs and Excise.

From the evidence brought before the committee it was quite apparent that there were many difficulties in the way of preventing smuggling. There is the long boundary line thousands of miles in extent between Canada and the United States. This boundary line is crossed in numerous places by roadways, arteries of various kinds, some of them in obscure districts. There are also the bridges, ferries, rivers and lakes. The difficulty was great originally, but it has been increased within the last two years to a remarkable extent by reason of the adoption of the 18th amendment to the constitution of the United States and the legislation following that for the purpose of enforcing prohibition in that country.

The enactment of the prohibitory law in the United States resulted in the building up of large liquor smuggling organizations. Such organizations are to be found in the Old Country and in other countries of Europe, all bent upon smuggling liquor into the United States and reaping the huge profits of that operation. Those organizations were also formed in Canada, and they carry on operations on a huge scale. The committee had every reason not to doubt that United States customs officials were susceptible to corrupt influences on the part of those liquor smugglers. The Canadian customs officials saw what was going on when liquor was being smuggled from Canada into the United States. The fact of their seeing their brother officers of the United States, under undue influence and possibly corruption, admitting liquor into that country and perhaps getting rich by giving way to the bribes of the smugglers would naturally have a bad moral effect upon our own officials. I have no doubt that that large trade in smuggling liquor from Canada into the United States has had a reflex action; it has a tendency at the present time and has had for some two or three years to increase smuggling 11011-309

from the United States into Canada of those articles of commerce and manufacture which we purchase in that country for use in Canada.

The advent of automobile transportation in recent years has also greatly added to the difficulty of the customs enforcement officers. At those various roadways which cross the boundary fast travelling automobiles loaded with merchandise quite often easily evade the watchful eye of customs officers. So that after all the work of the enforcement officers in the Customs department is not a bed of roses by any means. From the evidence brought before the committee we were rather inclined to the opinion that the three worst points at which smuggling was carried on were Rock Island, Quebec, the Niagara bridge, Ontario, and Windsor, Ontario. We made no investigation whatever into smuggling operations in the provinces of Manitoba, Saskatchewan, Alberta and British Columbia, and we inquired very little into the state of affairs in Ontario. Our investigations were directed largely against the province of Quebec.

I nave mentioned Rock Island in Quebec because the conditions there are interesting. Rock Island is a small village, straddling the international boundary line, half in Canada and half in the United States. It is a small, rather unimportant looking country place and the people of the village wander indiscriminately back and fro across the border line without knowing that they are doing so. The housewife in Canada walks across the street into the United States, buys a pound of butter and brings it back into Canada, thinking nothing of it. Many years ago some gentlemen, having an eye to the profit to be made by smuggling merchandise from the United States into Canada, went to this obscure village and built there factories for the manufacture of clothing such as shirts and overalls, and others for the manufacture of bolts, nuts and things of that sort. Some of these factories are built straddling the boundary line so that half the building is in one country and half in the other. A bale of goods on the south side of the building would be in the United States, and the owner would need to roll it only twenty feet across the floor and it would be in Canada. That condition has existed for years. Stores in that small village are built in the same way upon the boundary line. You could enter a store on the south side of the building and purchase goods in the United States, and stepping across the floor to the other counter you could buy goods in Canada. The people of that village were not averse to smuggling; at any rate, they were not opposed to it. The customs collector had been there for

Customs Inquiry-Mr. Donaghy

about fifteen years and we brought him before the committee to get his views on the subject and to ascertain what he had been doing there all that time. We found that he had borrowed a few thousands of dollars from one of the factory proprietors engaged in smuggling, and we wondered how he could watch the owners of factories and prevent them from smuggling under such conditions. We found one of our customs officers there doing a large insurance business with these same factory proprietors who were engaged in the smuggling traffic. In other words, there was a sort of family compact in this little village and there was no attempt, so far as we could see, rigorously to enforce the law. I may observe, by the way, that in our report we have recommended that the customs collector who has been asleep there for fifteen years be discharged. That is one of the recommendations which the House will be asked to consider.

In 1914 the conditions were as I have described, and three officers were sent by the government of that day to clean things up. They made many seizures, in those factories of goods which they thought had been smuggled. Several of these seizures resulted in forfeiture of the goods themselves and the imposition of penalties. That had the effect of putting the place in semi-order for a short period. Then there was a lapse of ten years during which nothing was done. From 1914 to 1924 there was no preventive service patrol along the border in Rock Island. Things were allowed to remain stagnant. The only time anything was done was on such occasions as complaint was made. If someone was smuggling in Rock Island and a complaint was submitted, a man was sent from Montreal to look into the matter. But that was not effective. In 1924, one J. E. Bisaillon, concerning whom I shall have something to say later on, sent eight or ten of his preventive force down to Rock Island to stop the smuggling, but like many other efforts of that gentleman this did not prove highly successful, and later on this force was withdrawn. However, as a result of the expedition which he sent to that place, several consignments of smuggled goods were seized and forfeited and some heavy penalties imposed. He has that at least to his credit. When the committee began its sittings, or rather after we had got well unfler way, we sent for some of these manufacturers.

Topic:   CANADIAN FUEL SUPPLY
Subtopic:   CUSTOMS INQUIRY
Sub-subtopic:   RETORT OF SPECIAL COMMITTEE-MOTION FOR CONCURRENCE AND AMENDMENT THERETO.
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CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

Was it not 1924 that

Bisaillon sent his force down there?

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LIB

Dugald Donaghy

Liberal

Mr. DONAGHY:

I said that in 1914 the

government of that day sent three men to Rock Island to make a clean-up-

Topic:   CANADIAN FUEL SUPPLY
Subtopic:   CUSTOMS INQUIRY
Sub-subtopic:   RETORT OF SPECIAL COMMITTEE-MOTION FOR CONCURRENCE AND AMENDMENT THERETO.
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CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

I thought the hon. member said Bisaillon did.

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LIB

Dugald Donaghy

Liberal

Mr. DONAGHY:

-and the governmentleft things stagnant from 1914 until 1924, when Bisaillon went there with his small contingent. As I say, we were rather interested to see the gentlemen who were carrying on this very lucrative trade of smuggling cottons from the United States for manufacture in these factories that straddled the boundary. As you may suppose, some of them were not anxious to appear. Some bucked rather strenuously when we put the halter on them and tried to lead them, and others refused to obey summonses. We asked them to produce their books, and by this time they had become somewhat alarmed, so that some of them mutilated their books or hid or destroyed them. This rendered very difficult the work of our auditors in checking up the quantity of goods these men had smuggled. There was one firm in particular -whose members came forward to the committee with the allegation that the books had disappeared. They swone they did not know what had happened to them; they had no idea. Apparently the books had taken it into their heads one night to walk out. We had able counsel assisting us, but Mr. Calder, K.C., found these gentlemen rather hard nuts to crack. They fought him off for two days, but in the afternoon of the second day, much to the surprise of the whole committee, one of them broke down and made a complete confession. He admitted that he had destroyed the books and he promised to give every assistance he could to the auditors and to our counsel in making a full disclosure of the sins of which he had been guilty. I do not know whether the auditors have succeeded in extracting very much information from him since then, but I am inclined to think that fear of contradicting the evidence he gave on oath before the committee will be a rather strong inducement to him to tell the truth in future.

Another manufacturer who appeared before us refused point blank to give authority to our officers to look into a warehouse he had on the American side of the line a few yards over the border. We wanted to look into that warehouse, because we suspected that he had it filled with merchandise and that in the night time hie slipped the goods across the boundary. He placed himself in contempt of the committee and his case seemed hopeless. However, he was arrested about two o'clock

Customs Inquiry-Mr. Donaghy

in the morning, taken out of his room in the hotel here and placed in gaol on a charge of smuggling. He appeared before the committee in custody the next day, a somewhat repentant sinner I may say, looking very much the worse for wear after his night's incarceration in gaol. This had a very good effect upon him; he gave in and agreed to take the officers down, open his warehouse on the United States line and show what was there. The officers went with him and saw the warehouse, which they discovered to consist of two compartments, one of which was filled with prison-made shirts with the labels torn off, together with cotton goods of various kinds. These were stored within a few feet of the boundary line ready to be smuggled into Canada in the dark or at any favourable opportunity.

These conditions were all revealed to the committee, and after considering them carefully the committee recommended that the law as set forth in the Customs Act be enforced. That law provides that where smuggled goods are found in any building within one hundred yards of the boundary, the authorities may demolish that building. We recommend that that be done in order to get rid of these buildings which straddle the line. We also recommend that an effective patrol be put in force there, where some six or seven country roads all lead to the United States, making it impossible for one customs house to guard them all. This is going to cost some money, but it will protect the revenue of the country if an effective preventive patrol is inaugurated there.

The committee spent a great deal of time, some weeks, in fact, investigating the very large question of cars stolen in the United States, smuggled into Canada and sold here by the thieves. Apparently there was a considerable trade in that line carried on in the city of Montreal. If hon. members will read our report they will find a recommendation suggested there to cover that situation.

Mr. Speaker, I observe that it is after eleven o'clock, and if it is the pleasure of the House I would be glad to move the adjournment of the debate.

Motion agreed to and debate adjourned.

On motion of Mr. Lapointe the House adjourned at 11.15 p.m.

Wednesday, June 23, 1926

Topic:   CANADIAN FUEL SUPPLY
Subtopic:   CUSTOMS INQUIRY
Sub-subtopic:   RETORT OF SPECIAL COMMITTEE-MOTION FOR CONCURRENCE AND AMENDMENT THERETO.
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June 22, 1926