Mr. STEVENS:

Yes, duty- paid. I am

coming to that point. I will deal with the duty paid phase at once.

I have under my hand a copy of Hansard of February 2, last, which contains, at page 702, what the minister had to say on that occasion regarding this alcohol. The minister twitted me about my "Holi'er than Thou" stand on that occasion, and I hope he will change his description this time a little. He said:

It is true I sold about 14,500 gallons of alcohol to the Dominion Distilleries Corporation in Montreal at 36 cents a gallon. I may tell my hon. friend that that corporation could have manufactcred alcohol of the same quality for about 32 cents a gallon, (but they were in a hurry for this alcohol because they required it for blending purposes.

I want hon. members to remember this point that they were in a hurry for this alcohol because they required it for blending purposes. On the next page he had this to say:

When the alcohol was sold to the Dominion Distillers Corporation it was sold to go into a bonded warehouse and not one ounce, one bottle or one gallon of that alcohol can leave that bonded warehouse without the excise duty being paid on it.

I recall, Mr. Speaker, that when the minister made that statement there was thunderous applause on the other side of the House, and it was accepted as a complete answer to my charge on that occasion. The minister's defence rests on two grounds, first, that it was an urgent case, the alcohol was needed at once for blending purposes; and, secondly, that not an ounce, not one bottle, not one gallon would be released from bond until the last cent of duty was paid. Let us examine that defence. Was it urgent? The date of this sale was the end of December, the negotiations I think were carried on slowly. I have discovered in the files that the deal was consummated about the 24th or the 28th, of December, 1925, and delivery, I think was made about the 1st January. Was it urgent? The Dominion Distillers secured over 60,000 gallons in addition to this 16,000 gallons of precisely the same class of goods, during the month of December, which effectively disposes of the plea of " urgency."

Now I turn to the next point. Mark you, it was urgently required according to the minister for blending purposes. I pause here to say that that institution, in all its history from 1923 I think, down to the present time has only produced 600 gallons of liquor, and that 600 gallons is lying in its warehouses to-day, unfit for human consumption, even unfit to be bootlegged out, and therefore it must be pretty bad. As far as the evidence [DOT] shows they produced nothing else, but they

Customs Inquiry-Mr. Stevens

were simply a medium through which other institutions have bootlegged liquor wholesale to the publie as they have bootlegged this stuff.

Now I come to another point. Was it required for blending purposes? Not an ounce was so used, and 82,500 gallons was sold and shipped by 'the Dominion Distillers within a period of weeks, and in fact within three weeks of the delivery of the alcohol sold by the minister. Furthermore, in the letter fixing the conditions of sale no mention is made of blending. I have here an extract from the letter setting forth the conditions under which this alcohol was sold to the Dominion Distillers under the order of the minister. This letter was written before he made his speech, and all this liquor, 82,000 gallons, including the 16,000 gallons, had been sold weeks before the minister made his speech in which he said that not one ounce would leave the bond until the excise was paid. That was sold between December 5 and January 18. The amount of 82,000 gallons was bootlegged into the United States. Three carloads did not go to their proper destination in Ontario. I have the letter of February 4, before me. These are the terms of the minister himself .-and of the department as to the conditions g>f the sale of the liquor. The conditions are:

I. To Dominion Distilleries at 36 cents per proof gallon.

II. Officer to accompany each load.

III. To be weighed on receipt at distillery.

IV. Such alcohol was not to be used for any purpose whatsoever except for the manufacture of specially denatured alcohol, grade No. 1-F in accordance with departmental specifications and under supervision of two officers.

V. For export only-removal in bond "and that a separate export bond for $5,000 was to be given by the Distilleries in connection with each export entry."

VI. To be an excise transaction and dealt with as by "Excise Warehousing Regulations Circular 327-C, page 3."

That refers to export. Let me go back for a moment. It was to be sold as grade No. 1-F in accordance with the departmental specifications. It was so denatured; that is true or at least the records show that it was. I have personal doubts about it, but I am not going to make the assertion. According to the evidence and what was generally known, it is a simple thing to extract these denaturants from this class of alcohol. That is, you put in certain denaturants. Diethyl-phthalate and Brucine sulphate. These may be extracted and the alcohol becomes potable. That was done with this alcohol. It was wittingly sold by these people as potable alcohol, and when the minister sold it to them, by the very fact of saying that it was for export, he demonstrated that it was for

[Mr. Stevens. 1

beverage purposes. Furthermore, the denatured No. 1-F alcohol is worth about eighty cents a gallon on the Canadian market to those who are at liberty to buy it. They sold this alcohol for $7 to $10 a gallon and not a cent of excise came into the public treasury in regard to it. As to the pious declaration of the minister to the House on February 2 last, that "not an ounce, not a bottle, not a gallon" would be released without duty being paid, I remember, as I said a moment ago, how my hon. friends cheered that as a final and absolute answer to that charge. But what are the facts? Not one ounce, not one bottle, not one gallon returned one cent of duty to the public revenue.

I call the attention of the House to the situation. On February 2, the minister made these statements, and prior to these statements having been made this stuff had been illegally distributed in the United States and in Canada. I pause to ask once again: Can this House entrust the present minister with the prosecution of these people for the recovery of revenue of which we have been defrauded. That is the question to decide here. It is not a question, as my hon. friend suggested out of the kindness of his heart, of whether we are going to condemn the minister because he responded to the importunities of friends. The question is whether we are going to continue to trust the minister who has allowed the public treasury to be defrauded out of these huge sums.

I come to another case. I hesitate a little in bringing this matter to the attention of the House, but I feel it is due to the House to do so. The Prime Minister has already received from me a letter and I have received his letter in reply. I will place them on Hansard if he so desires. I do not know whether he intended his letter to be in any way confidential. If he does, I will send it across to him.

Mr. MACKENZIE KING:

Does the hon. member refer to a letter that I received from him yesterday?

Mr. STEVENS:

Yes.

Mr. MACKENZIE KING:

I would suggest that he read all the correspondence, his letter to me and my reply to him.

Mr. STEVENS:

Mr. MACKENZIE KING:

Perhaps the

lion, member will allow me at this point to read the following communication from the Minister of Justice (Mr. Lapointe):

To supplement the accompanying memorandum from the Commissioner of the Royal Canadian Mounted Police, I wish to say that Mr. Anderson is acting usually as legal agent for the government at Regina. He has always done so satisfactorily and there was no reason or justification to remove the legal work from his hands.

Mr. STEVENS:

The point of the whole

matter is this-

Mr. MACKENZIE KING:

Perhaps my hon. friend will allow me one question so that the record may be complete. He has referred to Mr. Bryant, K.C., 4 p.m. and he has also mentioned another gentleman as holding a particular office. Is it not true that Mr. Bryant is the president of the Conservative Association of Regina and was a Conservative candidate in the last provincial election?

Mr. STEVENS:

That may be true. I do

not know but we will assume it is; I have no idea.

Oh, oh.

Mr. STEVENS:

I do not see the reason for the hilarious roar from hon. gentlemen opposite. When has it been an offence for a citizen to be a member of a Conservative association, and a great virtue for a man to be secretary of a Liberal association. My point to the Prime Minister, Mr. Speaker, is that a case involving the most intimate and intricate police investigation was given in good faith to the department with all the confidential information; the mounted police went about their duty properly; they had to keep the thing secret. Mr. Bryant happened to be the one who knew something about it, and the operative retained Mr. Bryant to guide him in the prosecution of that case. When they succeeded in apprehending some of the offenders suddenly action was stayed and there was a change in the counsel. Why? It was for purely political purposes.

Mr. MACKENZIE KING:

I submit that the statement of Commissioner Starnes is emphatically in contradiction with what my hon. friend has just said.

Mr. STEVENS:

Commissioner Starnes knew nothing about the retention of Mr. Anderson until he was instructed by his minister to make the change. The point is that all through these investigations one thing has been constantly brought to the attention of the people of Canada, and to put it mildly they are exceedingly impatient with the practice. Wherever responsible officers of the department seemed to be doing their duty there would appear on the scene, through some subterranean method, individuals with influence who would interfere -with the proper prosecution of those duties.

Take the Cohen case which I have already cited. Cohen was under surveillance for a considerable time; Officers Knox and Duncan, who have been carrying on investigations in different parts of the country but perhaps particularly in the great centre of Montreal, caught Cohen red-handed in four or five seizures. There are still three or four cases out against him and yet this case has been fiddled along through the courts, and there is ample evidence to show that it was political influence from members of the House which prevented the case from going forward. What happened? The case was set for hearing a few days ago, before the close of the spring assizes. Then this frame-up occurred, absolutely without the knowledge of departmental officials; they were not consulted at all. In the evidence before the House at the present moment is a statement or a precis showing clearly that this same man, Benjamin Cohen, sought to have this delay brought about by the excuse that he could1 give information regarding others. And why did he do this? He did it simply because the ablest lawyers in Montreal realized that they could'not keep him out of gaol. The stay in proceedings, forsooth, is made because this notorious silk smuggler, Cohen, must not go to gaol; there is no other reason for the sudden interference, towards the end of the assizes, when they had exhausted every measure of chicanery to defeat the courts. There is no other excuse than that the present Minister of Customs (Mr. Boivin) arranged through the Minister of Justice (Mr. Lapointe) for the mounted police to step in and interfere with the procedure in this case.

Mr. LAPOINTE:

Absolutely untrue.

Mr. STEVENS:

My only answer to the Minister of Justice is that three times dur-

Customs Inquiry-Mr. Stevens

ing the course of my speech of February 2 he rose in his place and absolutely denied all knowledge of the matters which later came before the committee, and there is ample evidence on the files and records to show that the minister knew all about it.

Mr. LAPOINTE:

Still untrue.

Mr. STEVENS:

I attach to the minister's statement to-day exactly the same weight which the evidence shows to be merited in the previous case.

Some one asks me about the Aziz case; I will not deal with that. The hon. member for West Hamilton (Mr. Bell) will take up that case, and I do not intend to trespass on his time.

Mr. POWER:

Before the hon. gentleman

passes to another point, will he tell me whether these two cases which he has just mentioned were brought to the attention of the committee?