March 14, 1930 (16th Parliament, 4th Session)


Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)


Before I conclude my observations hon. gentlemen who were not in the house at that time will understand the matter. In those days they sought support from and alliance with those whom they now condemn. The evidence given before the royal commission, for which Hon. N. W. Rowell acted as counsel, brought out the fact that it was the contributions of the same men that are now being attacked in this house that enabled the government to defray the election expenses. Here is the evidence given before the royal commission under Mr. Rowell's questioning as to the "rat fund." That was the term used when Mr. Rowell was questioning the witness. He said, "We called it the rat fund." Then he was asked, "What happened to the rat fund," and I have here the names of men who secured the fund, and the amount they received when liquor was sent across the boundary. They received so many cents a case for beer, and so much for hard liquor. For what purpose? It was partly for the persona! enrichment of the gentlemen who received it, and partly for the campaign funds of the Liberal party of Canada. Here are the words with respect to it. Mr. Rowd.l said to the witness, "We did not think it was fair to leave Windsor after taking the small ones without taking you." The answer of the witness was, "I think it is quite nice for you to come to Windsor so that we may tell about the rat fund. You had a snake fund down east, and we 'had a rat fund here."
Export Act-Mr. Bennett

Then he told the story of the rat fund; he told who was the big fellow to whom the money ultimately went-the custodian of funds for the Liberal party during the election of 1926 and the .preceding .election. These men, sir, who are now denounced in words of righteous indignation, were those who supplied the necessary funds to 'carry on the campaign when the hon. gentleman was seeking position and power. Is it any wonder that the people of this country who read and understood the evidence given before that royal commission are getting a little weary of this high, moral indignation about conditions at the boundary line? Is it any wonder they are getting a little weary when they hear these reiterations about international goodwill and moral delinquencies when all the time, with their tongues in their cheeks, the Liberal party are the beneficiaries of the very men whom they now condemn.
Let us look at these things fairly. I have in my hand the summing up by Hon. N. W. Rowell before that commission with respect to these matters; I have the precis of the evidence given by those witnesses at the border points as to what took place, as to how money was paid the times they made their contributions and what they made them for. Those statements are here, and now in a fine frenzy of moral indignation we are told that to save Canada from a war with our good friends to the south-who never thought of it-we must be prepared to adopt this measure. It is hard for the Minister of Finance to keep his face straight, the silence is so impressive.
Let us remember what is the crux of the * matter. The American republic, for reasons of its own and within the exercise of its powers, adopted a constitutional amendment known as the eighteenth amendment. That amendment provided in clear terms that there Should be no longer any importation into or manufacture of liquor in that country. Let me read the terms of that amendment in order that .we may fairly begin this discussion:
fl) After one year from the ratification of this article the manufacture, sale or transportation of intoxicating liquors within, the importation thereof into, or the exportation thereof from the United States and all territory subject to the jurisdiction thereof for .beverage purposes is hereby prohibited.
(2) The congress and the several states shall have concurrent power to enforce this article by appropriate legislation.
(3) This article shall be inoperative unless it shall have been ratified as an amendment to the constitution by the legislatures of the several states, as provided in the constitution, within seven years from the date of the submission hereof to the states by the congress.

That .resolution was duly submitted to congress and to the several state legislatures, and on. January 29, 1919, the United States
Secretary of State proclaimed its adoption by thirty-six states of the union, and declared it to be in effect on January 16, 1920. So on the last mentioned date the eighteenth amendment to the United States constitution, familiarly known as the prohibition amendment., came into force.
The right hon. gentleman indicated this afternoon that some time elapsed before we were advised as to what the attitude of the Unified States might be in connection with this matter. I find, however, on reference to the parliamentary proceedings as reported in Hansard for June 25, lQ28i, that in the preceding year the United States had directed attention to the question of the enforcement of the smuggling laws between that country and Canada. On the date I 'have mentioned the Right Hon. Arthur Meighen, then leader of the opposition, called attention to a despatch from Washington, and Right Hon. W. IL. Mackenzie King, then and now Prime Minister, said:
I am obliged to my right hon. friend for bringing up the matter, because, having read the despatches to which he refers, I think they are calculated to create an entirely erroneous impression. It is true, the government has received from Washington a communication asking if it would be possible for the Canadian government to assist in promoting the observance of certain liquor laws of the United States. The communication relates to matters particularly appertaining to the export of liquor. When the communication was received it was referred to the departments of government concerned. The reply sent to Washington related exclusively to a statement of the law as it stands and the position of the Canadian authorities in meeting the request that has been made. There has been nothing sent forward to Washington with respect to the government's policy in the matter of endeavouring to cooperate with American authorities in securing observance of their laws. So far as the government's policy in that matter is concerned,
I would say that we have every desire to cooperate with the American authorities in helping them to secure the observance of their laws in precisely the same manner as we would hope to have the American authorities cooperate with ns in securing the'observance of our laws. Such action as has been taken up to the present has been entirely of a departmental character.
Then the leader of the opposition asked! a further question as to when the request had been received, and .the finally given by the Prime Minister was:
My impression is that it was about three months ago, the request was received. There was no intention of delay in the matter. It was dealt with entirely departmemtally. As regards the larger question, that of policy, the government would like to be able to view all sides of the situation before taking final action.

Export Act-Mr. Bennett
So that three years alter this amendment to the constitution of the United States became effective, the right hon. gentleman was still in the cloudland of conjecture and doubt as to the high moral issues involved. His mind was not then settled; his opinions were not then made; an election was not to be held the following year. It was not important that he should frighten the Canadian people into the belief that they were menaced by the great republic to the south. On the contrary he said, "Our opinion is not formed, our policy is not settled." That was in June, 1923, three years after the constitutional amendment had become effective in the United States.
Then the Imperial conference was held in London, at which the right hon. gentleman attended, and we are told now that at that conference-it is the first time we have been told so publicly, but he himself admits it- when that great foreign secretary of Great Britain, Marquis Curzon, was dealing with the question of the right of search by American coastguard ships of British vessels carrying liquor, and other kindred and allied matters, he indicated that this situation was "so delicate and disagreeable" that it involved consequences of the gravest character. But Great Britain did sign the treaty and this country ratified the treaty made between Great Britain and the United States. The right of search was extended, as you will remember, for a distance of an hour's run of the ship out to sea. As was stated by the right hon. the Prime Minister to-day, there were three matters to be considered, one of which was British commerce. Inasmuch as British ships plied between New York and the cities of the old land, it became necessary that it be determined whether or not they would be permitted t.o enter the harbour of New York with liquor in their stores, and I fancy that if he were so minded the right hon. gentleman could tell this house what is so well known by those who have taken the trouble to ascertain, that the commercial side of the situation became one of the most potent factors in bringing about the end obtained. It was quite clear that British ships would not be permitted to enter the harbour of New York even with their liquor sealed, unless some arrangement were made whereby the United States might search ships suspected of carrying contraband liquor within a distance of one hour's steaming from shore. That was in 1923.
What do we find in 1924 and 1925? There was an election in 1925, and what condition do we find obtaining in this country at that
time. A part of the evidence is the report of the royal commission arising out of the proceedings before a select committee of this house, which sat in 1926. That evidence disclosed a condition the like of which had not been disclosed heretofore in any part of this count,ry, and to which the right hon. gentleman alluded a moment ago when he was dealing with the report made by the committee. The report of the committee as amended was adopted by a majority of ten in this house at a time when the house was very closely divided along party lines. That majority comprised a group of members who were not actuated by strong partisan feeling, and in view of the fine frenzy of this afternoon, I would ask the house to keep in mind the following words contained in that report as amended:
The evidence further discloses that ministerial action has been influenced by the improper pressure of political associates and friends of the minister, or acting minister administering the department, resulting in the suspension and in some instances the abandonment of prosecutions against those charged with violation of the statutes and in the loss of revenue to the country. Moreover successful appeals have been made to the minister and acting minister administering the department to improperly interfere with the course of justice between the conviction of the offenders and the execution of judgment thereon.
I ask if, in any condemnation that has ever been made of a government of this country, you can find words such as appeared in that report, as follows:
The Prime Minister and the government had knowledge for some considerable time of the rapid degeneration of the Department of Customs and Excise, and their failure to take prompt and effective remedial action is wholly indefensible.
Remember, sir, that is the report.

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