May 26, 1908

CON

George Eulas Foster

Conservative (1867-1942)

Mr. FOSTER.

I take it back.

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LIB

Frederick William Borden (Minister of Militia and Defence)

Liberal

Sir FREDERICK BORDEN.

tleman been able to show that I have in any way participated in anything that could by any possibility be a benefit to me ? The hon. gentleman has rung the changes upon the fact that my son-in-law, Mr. L. S. Ma-coun, happens to be connected with the New Brunswick Cold Storage Company and with another company which was incorporated and in which I had an interest, although I had no interest, and never expect to have any, in the Cold Storage Company. Is my son-in-law to be prevented from engaging in legitimate business because he happens to be my sou-in-iaw ? He was in similar business before he came to my house, and I know of no reason why he should be punished and deprived of the means of getting a livelihood because he happens to be connected with my family.

I have observed questions on the paper and notices in the Public Accounts Committee this session which would indicate that certain gentlemen think that because Mr. Ma-coun is my son-in-law and happens to get an occasional contract from the public service -if he has got one-there must be something improper in it. I am quite willing that the fullest investigation should be made. But surely I am not to be asked to deprive my son-in-law of the means of earning an honest livelihood because he happens to have married into my family. So much for the son-in-law argument.

I observe that the hon. gentleman made some reference to a company for which, he says, I procured a charter in 1906, and with great diligence he has hunted up the names. And he saw something very mysterious and terrible in the fact that the names were not very well known. X tell him that the names were those of the clerks in the law firm which procured this incorporation. The Arm was that of Drysdale and McGinnis. Mr. McGinnis is one of the most prominent Conservatives in Nova Scotia, a man of the highest honour and one to whose business capacity and business methods the hon. member (Mr. Foster) will not take exception. While X was in England in 1906 application was made under instructions given by me and Mr. Graham jointly for the Incorporation of a company. It was intended, I may say at once and frankly, that my properties in Ivings county, orchards and farms should be made a part of this company, and Mr. Graham, of Belleville, I believe, a prominent Conservative, a great fruit dealer and well up in cold storage and all matters pertaining to agriculture, was to have taken an interest and to put his properties into. the company in the same way as mine were to be put in, and we were to accept bonds and a certain amount of stock for these properties. It was expected that money would be raised in England to carry on the business, and it was expected also that a portion of the money would undoubtedly be invested in the es-' Sir FREDERICK BORDEN

tablishmeut of cold storage plants in different parts of Canada. Was there anything wrong in that? Was there anything highly improper in that? This was all arranged before it was expected that any policy such as that afterwards decided upon would be brought down by the government. When the Minister of Agriculture saw fit to adopt the policy of aiding, somewhat largely, cold storage. I felt that, so far as I was concerned, it would be undesirable for me to' own stock in any company which was receiving from the government a subsidy, although, under the law, I do not know that it would have been. I would not have been going beyond my right in doing so. Then it was that I told Mr. Graham that some other means must be taken to carry on the cold storage project in the city of St. John and elsewhere. Mr. Graham made arrangements with a company already established, or, if not established, at least incorporated, known as the New Brunswick Cold Storage Company. He made arrangements with the government to secure for that company the necessary bonus which any cold storage company complying with the requirements of the law would be entitled to. Mr. Williams thinks he did not receive fair treatment. Mr. Williams never made a serious application. He never filed plans in accordance with the requirements of the Department of Agriculture. My own opinion-without wishing to reflect upon Mr. Williams-is that he never intended seriously to construct anything like the kind of cold storage establishment which is now in existence to which the hon. gentleman (Mr. Foster) himself is not able to take exception, and with which he finds no fault. My own opinion is that Mr. Williams never intended seriously to do more than provide something which he Could put up under his own roof and control in connection with his business. What is this cold storage plant established'at St. John? I am told that it is one of the most creditable, if not absolutely the most up-to-date establishment of its kind on this continent; that it has cost $160,000 or $170,000: that it is already doing a considerable business, and that it is being utilized for the business of transatlantic export. The hon. gentleman (Mr. Foster) says that I am interested. Well, Sir, I am interested; anfl I want to appeal to you and to this House as to whether there was anything underhand in the matter. The hon. gentleman says that this is done openly. Certainly, it is done openly; there has been no desire or intention to conceal anything-there has been nothing to conceal. I have said I am interested. What was my interest? My interest was to endeavour to provide the .means at St. John

as I hope may be provided also at Halifax later on-by which the fruit that is yearly grown in the valley of which I am a citizen the great Annapolis and Cornwallis valleys,

can be cared lor and held in cold storage safely, so that the people who grow that fruit may get the benefit of the best prices in the English market. Consider what happened last year. Thousands and tens of thousands-yes, hundreds of thousands -of barrels of the best fruit were sacrificed because of arrival in England at a moment when the market was unfavourable. The fruit had to be shipped early ; it could not be held, there being no means of keeping it. I have reason to know now that scores of people who were compelled last year to ship their fruit in this way- not only from my own province but from the west-will take advantage of this means of keeping the fruit and so tempering the market and shipping as the demand may exist for the goods in England. Mr. Speaker, the shipment of fruit from Ontario is a most important industry. In the winter months, the great port of Montreal, to which a great deal of the fruit is shipped up to December is closed. The fruit must go to the United States in order to be shipped, and, in transit from Ontario to Portland or Boston the fruit is frequently frozen. Two years ago this involved an enormous loss to the growers and dealers of Ontario. Under the present arrangement, I am told, tens of thousands of barrels will be taken to St. John in November or the early part of December, before the frosts become serious, and there stored to be shipped during the winter months. This is the interest and the only interest that I have in this cold storage establishment. I do not own one dollar of stock; I have never received one dollar of benefit. I never expect or intend to hold one dollar of stock; I never expect to receive one single dollar of benefit. I have done this in my position as a public man and a minister because I thought I was doing right, and I do not fear the closest examination into what I have done. It remained for the hon. gentleman (Mr. Foster) with his suspicious mind trained -trained, Mr. Speaker-as there has been ample proof, in directions not always the most open and frank; it remained for this gentleman to see this spectre of malfeasance and of failure to perform my duty in connection with my position. I can do no more, I suppose, than contradict the statement and deny it. I do not expect to satisfy the hon. member-he is not built upon those lines. I do expect, however, to be able to satisfy a large part of those who sit with him, and I do not doubt that my statement here in this House will be accepted with far more credence than any statement the hon. gentleman could make.

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CON

John Waterhouse Daniel

Conservative (1867-1942)

Mr. J. W. DANIEL (St. John City).

I am sure we have all listened with a great deal of interest to the speech which has just been delivered by the hon. the Minister of Militia and Defence (Sir Frederick Borden). I congratulate him at all events on 296

the plucky manner in which he made his defence. Not satisfied with assuming a defensive attitude he, as becomes the soldier, and head of the war department that he is, carried the war into the enemy's country, and made an attack on the opposition party. Unfortunately the line of defence which he seems to have adopted reminds us of the rule which seems to prevail among the legal fraternity, that when you have a bad case you are expected to abuse your opponent. That I think is the great weakness of the defence which the Minister of Militia has made this afternoon. He started out to abuse the hon. member for North Toronto who had brought this subject before the House. In my opinion if there is any subject which, more than another, ought to be ventilated before this House and this country, it is acts which reflect on the character of our public men, acts which contradict^the high ideals which we all desire,. I hope, to see set before the young men of this country and carried out by them. The people of this country naturally look up to their public men' for examples, and especially do they look to members of the cabinet for examples of high character which can be safely followed by the public at large.. The hon. minister made some personal reference to the hon. member for North Toronto, and rather accused him of taking commissions and things of that kind when he was manager of the Union Trust Company. These statements were absolutely denied by the hon. member for North Toronto himself, and I challenge the Minister of Militia to place his finger on anything in the printed evidence which will bear out any statement or insinuation of that kind, namely, that, the hon. member for North Toronto, while he was being paid as manager of the Union Trust Company, accepted commissions for business which he obtained for that.company and out of which that company made a profit. If the Minister of Militia is able to do that, he has an opportunity. The minister even went further, and he pointed, so to speak, the finger of scorn at the hon. member for North Toronto.

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LIB

Alexander Johnston

Liberal

Mr. JOHNSON.

The hon. member referred to the evidence relating to the action of the hon. member for North Toronto. If he wants information

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CON

John Waterhouse Daniel

Conservative (1867-1942)

Mr. DANIEL.

I have the floor. If the Minister of Militia has anything to say, I will permit him to say it.

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LIB

Alexander Johnston

Liberal

Mr. JOHNSON.

I merely wish to direct the hon. gentleman's attention to page 6334 of the ' Hansard ' of 1906-7.

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CON

John Waterhouse Daniel

Conservative (1867-1942)

Mr. DANIEL.

Having directed my attention to that, I hope the hon. member is satisfied. But the Minister of Militia, not content with making these references to my hon. friend for North Toronto, also passed a sneer on the morality of that gentleman,

and the futility of a gentleman like my hon. friend preaching morality and high ideals. Well, Mr. Speaker, I would ask you and I would ask any member of this House if the Minister of Militia and Defence is a gentleman whom we could look to as a preacher of morality. I will say nothing more in regard to that.

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LIB

Frederick William Borden (Minister of Militia and Defence)

Liberal

Sir FREDERICK BORDEN.

You had better not.

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CON

John Waterhouse Daniel

Conservative (1867-1942)

Mr. DANIEL.

I would ask the hon. members of this House if they think the Minister of Militia is a gentleman whom we would call upon to preach morality in this country.

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LIB

Frederick William Borden (Minister of Militia and Defence)

Liberal

Sir FREDERICK BORDEN.

Perhaps you are not either.

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CON

John Waterhouse Daniel

Conservative (1867-1942)

Mr. DANIEL.

Well it is one of those cases where you pay your money and you take your choice. Now to come down to the matter which is before the House it was initiated by an application from a Mr. Williams, a merchant in the city of St. John N.B., for aid to a bait freezer. When the Minister of Militia referred to this, he said that Mr. Williams not only made application for a cold storage plant on which he would get a* subsidy of thirty per cent, but he also asked for such a bait freezer as would carry with it a subsidy of fifty per cent. Now the application he made was for a bait freezer on exactly the same terms as had been granted to the bait freezers at Canso and Halifax. His letter to Mr. Emmerson reads as follows :

We have been giving a cold storage plant some attention of late, and 'having been in communication with the Marine and Fisheries Department, who will grant a bonus for a cold storage plant for freezing fish in order that fishermen will be supplied with bait at the time they require it. We are prepared'to go ahead and build one such as they are building in Canso and Halifax, providing we get the assistance of the government, such as has been given in the above places.

Just the same subsidy and the same assistance as were given to these other places.

In the meantime we thought it would be better to let you know that we are -in the field, and just as soon as we get a little further along with our negotiations and plans, we will send our representative to Ottawa and interview you and the Marine and Fisheries Department personally.

Another statement that the minister made was that this application was for a cold storage plant for fish alone, and not for any other purpose, or any commercial purpose. Here is a letter signed by the F. E. Williams Company, Limited, and addressed to the Hon. Mr. Prfifontaine, and although it has been read once this afternoon, I will take the trouble to read it again on account of the minister's statement that the application of the Williams Company was only for a storage plant, and none other.

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CON
LIB

Frederick William Borden (Minister of Militia and Defence)

Liberal

*Sir FREDERICK BORDEN.

I did not say that it was for no other purpose. I said that it was to carry on his own private business in addition to the freezing of bait.

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CON

John Waterhouse Daniel

Conservative (1867-1942)

Mr. DANIEL.

I understood the minister to say that it was not for commercial purposes.

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LIB

Frederick William Borden (Minister of Militia and Defence)

Liberal

Sir FREDERICK BORDEN.

No.

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CON

John Waterhouse Daniel

Conservative (1867-1942)

Mr. DANIEL.

I will read it and it will speak for itself:

St. John, New Brunswick, October 4, 1905. Hon. R. Prefontaine, Ottawa.

We take the liberty of addressing you with reference to a cold storage plant for the purpose of freezing fish for bait, also other kinds of fish at St John, New Brunswick. We understand the government is willing to give a bonus for a plant put up for this purpose, with space or rooms to hire to dealers or farmers who may require cold storage space. We would also agree to freeze and keep in stock sufficient quantity of bait for the needs of fishermen. We are anxious to put up a large plant that will give service to both the fish and farming industries and would be pleased to hear from you giving us some particulars of what you require and what bonus the government are willing to give. The Hon. Mr. McKeown will probably write you on this same subject.

An early reply is particularly requested.

Yours truly,

F. E WILLIAMS COMPANY, Limited,

F. E. Williams, President.

That was the original application and there is no doubt that in his mind he had largely the idea of dealing with the bait freezing question. Mr. Williams is a man who is in the provision business. He has a very large business. He is an able, experienced and successful merchant, and he is in a position to carry on any undertaking, such as he proposed to carry on, to the extent of $100,000 or more. The minister rather insinuated that Sir. Williams, in writing these letters to Sir. Emmerson, to Sir Wilfrid Laurier, to the Slinister of Agriculture and to the Slinister of Marine and Fisheries, was seeking to convey the impression that the Minister of Slilitia only supported the cold storage scheme of the government for the purpose of obtaining the cold storage subsidy for this plant down in the maritime provinces. The minister had no reason for making any such statement because there is nothing in the whole correspondence that has been given to us this afternoon which justifies it. What I understood Mr. Williams did say was that the minister, naturally being in the secrets of the government and knowing what was going on, aware of the legislation that was proposed, was willing to take advantage of that knowledge and put himself in a position, through the influence which he would naturally have as a minister of the Crown.

931S

to obtain for himself, or any company in which he was interested, the subsidies which would be offered by the government. There is only one important point to bring before this House and that is as to whether the Minister of Militia, in his position as a cabinet minister, did take advantage of his position to obtain for himself a subsidy, which, perhaps, might otherwise have gone elsewhere. Then again there is the question as to the propriety of a member of the cabinet putting himself in competition with the ordinary business men of the country. Mr. Williams had put in his application as far back as October, 1905. He put in the application which I have just read and he had quite a correspondence with the (Minister of Marine and Fisheries. After a good deal of correspondence, and with the assistance of Hon. Mr. Emmerson, he had obtained a certain promise that a sum of money would be placed in the estimates by the Department of Marine and Fisheries for the assistance of a cold storage company. But, after awhile, the Minister of Marine and Fisheries went back on that largely and told Mr. Williams that the Minister of Agriculture was bringing in a cold storage Bill and that this Bill would include fish cold storage as well as other kinds of cold storage. On the 7th December, 1906, Mr. F. E. Williams makes a formal application to the Minister of Agriculture for a subsidy under the proposed Act. On the 5th of that month, two days before, Mr. L. S. Macoun had applied, not in a formal way for a subsidy, but for the fullest information that the minister or the department could give him, and in the correspondence that has been brought down I can find no record of any actual formal application put in by Mr. L. S. Macoun at any time for a cold storage subsidy. After a good deal of correspondence between the then Minister of Railways and Canals and Mr. Williams, also, on behalf of Mr. Williams, by Mr. W. H. Trueman, his solicitor, and also, I believe, after a letter from the Hon. Mr. McKeown in connection with the matter, about the 20th February, Mr. George McAvity appears on the scene. This is his first connection with the matter. The fact of Mr. George McAvity appearing on the scene brings in the New Brunswick Cold Storage Company, for at that time Mr. George McAvity was the New Brunswick Cold Storage Company. What did that mean? That meant the bringing in of a company with a $60,000 guarantee with interest at 3 or 34 per celit which was afterwards raised to 4 per cent. It was a great advantage to have Mr. McAvity taken into this company. There is then still further correspondence and Mr. Williams writes to Mr. Emmerson a letter in which he says that he is afraid he is out of it, and he complains in that letter of

members of the cabinet getting contracts incompetition with business men. That letter is dated the 9th March, 1907, and addressed to the Hon. H. R. Emmerson. Ottawa:

Dear Sir, You will see from the inclosed clipping from the Globe ' newspaper that Sir 1 rederick Borden is getting along very nicely It certainly looks, unless you can assure me to the contrary, as though I was out of it and that my application .to Hon. Mr. Fisher has been turned down. I cannot understand lion. Mr. Fisher making a grant to a company m which Sir Frederick Borden has been the promoting and is the moving spirit, and which he puts forward merely as a blind to screen his own name. It is most unfair to the public to have to_ compete with ministers in matters of this kind. In the present case it was hopeless to do so. It seems to me it is contrary to law, and I do not feel like stand-mg for it. I believe if the matter were called to the attention of Sir Wilfrid Laurier he would see that Sir Frederick was overruled in this .matter, and that the matter was put upon a defensible basis. Where Sir Frederick Borden is acting with such a supreme disregard of my rights and the rights of my Liberal friends in St. John I am inclined to strike back, and I will be justified in doing so. I am willing to deal fairly with the government, but I expect a like treatment in return. If I am to be turned down, please let me know it, when I will at once place Sir Frederick Borden's conduct before Sir Wilfrid Laurier.

8one hon. MEMBERS. Hear, hear.

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CON

John Waterhouse Daniel

Conservative (1867-1942)

Mr. DANIEL.

That was afterwards done in the letter which was read this afternoon. Similar correspondence went on which has been- read. Now we come to what, in my opinion, is certainly a most important letter, one of the most important in.-the whole correspondence. I refer to the letter from the hon. the Minister of Agriculture, jn which he states that : 'v

Sir Frederick Borden .has made application on behalf of a company with whichAie-ie~ connected and I have viewed his- application very favourably.

There is absolutely a statement of fact made by the Minister of Agriculture, that the Minister of Militia (Sir Frederick Borden) had applied on behalf of a company with which he is connected and that his colleague viewed the application very favourably. As I understood the Minister of Militia this afternoon, he said he made no application to this government for a subsidy. But there is the statement of the Minister of Agriculture, and I set the one against the other.

Then there is another statement, the statement made by Mr. R. J. Graham when he wrote to the Minister of Agriculture on the 13th April :

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Belleville, Ontario, April 13, 1907. The Hon. Sydney Fisher, Ottawa.

Dear Sir,-Sir Frederick Borden requested me to interview you in reference to aid for our cold storage propositions at St. John and Halifax.

To whom does the expression ' our,' refer to ? Does it refer to any one else than Sir Frederick Borden and Mr. Graham who have already been connected together in advancing schemes of this kind.

It is our intention to complete the one in St. John this season. When I reached Ottawa Thursday night I learned from Mr. L. S. Macoun that you had advised him that everything had been arranged in connection with this matter and therefore it would be unnecessary for me to bother you any further in reference to the matter in question. This will explain why I did not interview you in regard to the matter, and if any further application of information is required, please advise.

Tours truly,

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R. J. GRAHAM.


There are the two statements. One from the Minister of Agriculture and the other from Mr. Graham. The one is a positive statement and the other is a statement by Implication. The latter is one which might fairly be taken to convey the idea that the Minister of Militia was interested in this application made by Mr. Graham to the Minister of Agriculture. Without going into all the details, for they have been pretty thoroughly gone into already, I may say that the scheme, as it eventually turned out, certainly was very favourable indeed for the contractors. They have, in the first place, a mortgage of $60,000 from the New Brunswick government, and only a week before the prorogation of the New Brunswick legislature, there was an order 4a- council passed providing that an additional guarantee of $30,000 should be given-tor the New Brunswick Cold Storage Company when the House reassembles. In other words,, the New Brunswick government of that day pledged itself to introduce and ernTy'-such legislation. That means an amount of $90,000 which was guaranteed, principal and interest, in favour of the New Brunswick Cold Storage Company. In addition there was an application to the Minister of Agriculture for a Dominion subsidy of 30 per cent on the proved cost. The application in that case was for 30 per cent; on an expenditure of $125,000, making an amount equal to $37,500. So that if this plant cost, as stated in the application to the Minister of Agriculture, $125,000, this company actually obtained in guarantees of principal and interest on its bonds and in subsidy an amount equal to $127,500, or $2,500 more than was spent in obtaining the plant and putting it where it is. There is a letter in connection with that matter. That agreement between the government and the New Brunswick Cold Storage Coon-Mr. DANIEL. pany was made on the 30th October, 1907, and the amount of subsidy granted was $37,500, being 30 per cent on the stated expenditure of $125,000. But on the 13th November, or barely a fortnight afterwards, Mr. Macoun writes the secretary of the Minister of Agriculture saying that their plant would cost more than the $125,000 and that it would cost completed $150,000. In that-case I presume there was another application for an additional subsidy; and perhaps the Minister of Agriculture will say whether there was another application for an additional subsidy based on a cost of $150,000 or $160,000.


LIB

Sydney Arthur Fisher (Minister of Agriculture)

Liberal

Mr. FISHER.

I shall speak of that in a few minutes.

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May 26, 1908