Right Hon. W. L. MACKENZIE KING (Prime Minister):

Mr. Speaker, I desire to lay on the table copies of the final report of the royal commission appointed under order in council P.C. 441 on February 5 to "investigate the facts relating to and the circumstances surrounding the communication by public officials and other persons in positions of trust of secret and confidential information to the agents of a foreign power."

There have thus far been three interim reports by the commission, all of which have been tabled in the house. These are as follow: first interim report, March 2, 1946, tabled March 14, 1946; second interim report, March 14, 1946, tabled March 15, 1946; third interim report, March 29, 1946, tabled March 29, 1946.

The final report, which I am now tabling, as hon. members will observe is dated June 27. I think I should make it clear that the physical work of printing the first copy of the report for presentation was not completed until July 12. It has been received only to-day by the governor in council to whom it is addressed.

I have gone through the report rather hurriedly and have noted some of the outstanding features. I have thought that the house would wish to have something in the nature of a resume, but the report is a very lengthy one, with its quotations, appendices and the like, so what I am giving is not intended to be in any way all-embracing, but simply essential features.

The circumstances in which it was decided to appoint the royal commission of inquiry are well known. It is not necessary to review them to-day. The investigation has been completed; it confirms the seriousness of the situation which the government asked the commission to investigate.

Official Secrets Act

In this connection, however, I should like to quote a paragraph from the report, page 87, which relates to the position of the Soviet ambassador. It is as follows:

The evidence before us is that those members of the embassy who were engaged in improper and inadmissible activities operated in special sections of the embassy the operations of which were quite distinct from the official and legitimate activities of the Soviet embassy, and that the Soviet ambassador, representing in Canada the government of the Union of Soviet Socialist Republics, had no part in them.

As a result of findings contained in its interim reports, proceedings have been instituted in a number of cases and four persons have been convicted and sentenced. Other cases are awaiting trial, and I shall not refer to them.

When the inquiry was undertaken, I said that prosecutions would be instituted where the evidence warranted it. This has been done, but prosecutions and punishments are essentially secondary matters. Publicity, education and full understanding are better preventives of any recurrence of any such state of affairs as that disclosed by the report of the royal commission. In that process of education and understanding, the report itself is a very important instrument. It deserves the thoughtful study of all Canadians who feel that there is no place for espionage and underhand activities in the public life of our country.

I shall not on this occasion attempt to comment on the contents of the report. With appendices it runs to over 700 pages. It requires and will repay careful study. I desire however to place upon the record a summary of the findings of the royal commission and the statement of their recommendations as set forth in sections XII and XIII of the report.

Section XII

I. We report that the following public officials and other persons in positions of trust or otherwise have communicated, directly or indirectly, secret and confidential information, the disclosure of which might be inimical to the safety and interests of Canada, to the agents of a foreign power:

1. Eric Adams

2. J. Scotland Benning

3. Raymond Boyer

4. H. S. Gerson

5. Israel Halperin

6. David Gordon Lunan

7. Allan Nunn May

8. Edward W. Mazerall

9. Matt. S. Nightingale

10. P. W. Poland

II. David Shugar

12. Durnford P. Smith

13. Kathleen Mary Willsher

14. Emma Woikin

II. We report that we have been unable to identify the following persons named under "cover names" in the documents and there definitely stated, to have been members of Zabotin's ring:

"Galya"

"Gini"

"Golia"

"Green"

"Surensen"

III. We also report the following facts relating to and the circumstances surrounding such communication:

1. There exists in Canada a fifth column organized and directed by Russian agents in Canada and in Russia.

2. Within the fifth column there are several spy rings.

3. We have been able to identify many of the members of one of these rings, namely, that of which Colonel Zabotin was the head in Canada.

4. Membership in Communist organizations or a sympathy towards Communist ideologies was the primary force which caused these agents to agree to do the acts referred to in their individual cases.

5. The persons named in paragraph I were members of Colonel Zabotin's organization.

6. Without documents such as Gouzenko placed before us we cannot identify any nonRussian members of the other rings.

7. There was an organization whose duty it was to procure false Canadian passports and other citizenship documents for the use of agents engaged in fifth column activities, in Canada or elsewhere.

8. Zabotin and his assistants were helping to supervise and finance the work of an organization of agents operating in certain European countries. At least one person temporarily in Canada as an employee of the international labour office was a member of this organization, namely, Germina (Hermina) Rabinovitch.

9. Members of the. staff of the Russian embassy at Ottawa who were actively engaged in inadmissible espionage activities are named in Section II.7.

IV. The following persons who may not come within the category of "public officials and other persons in positions of trust or otherwise" were members of Zabotin's organization and took an active part in recruiting agents, acting as contacts and securing and transmitting such secret and confidential information:

Sam Carr Fred Rose.

V. Many of the persons named in paragraph I hereof _ were also actively engaged in the organization of "colls " from which agents were recruited, and in addition the following persons were organizers of such cells, or media of communication between espionage agents, or both:

Agatha Chapman Freda Linton S. S. Burman Henry Harris.

VI. The following were active in procuring a false Canadian passport for a Russian agent who was operating in the United States:

Sam Carr Henry Harris John Soboloff, M.D,

W. M. Pappin.

Official Secrets Act

VII. Tlie following persons named in the documents did not so far as the evidence discloses take any active part in the subversive activities, but would have done so if required;

Norman Veall

Fred Chubb

Jack Isidor Gottheil.

VIII. The names of certain other persons are mentioned in the documents merely because Moscow desired the names of all members of certain government staffs. Outside of those specifically named elsewhere in this report, there is no necessity for these names to be mentioned.

IN. The names of certain other persons were mentioned in such a context that it was considered advisable to examine them and to investigate their activities. In each case we were satisfied that their conduct has been entirely proper and that, while the Russians designed to draw some of them into the net in future, having in anticipation of doing so actually given them cover-names, such hopes were in our opinion completely without foundation and the objects of those hopes were unaware that they were being considered. Among these we refer to Colonel Jenkins by name, because he has been mentioned by name in the public press.

X. The names of a number of persons, in government service and otherwise, who were members of secret Communist cells have been disclosed by this inquiry. These names appear in the volume of evidence. As there is no evidence that these persons were implicated in, or aware of, the espionage networks, we do not consider it necessary to mention these names in this report.

Section XIII Recommendations

We respectfully recommend:

1. That, because of the introduction into the evidence, necessarily and unavoidably of secret technical data, the publication of which, according to the witnesses most concerned, would not be in the public interest at this time, none of the evidence or exhibits relating to any top secret, secret, restricted or confidential matters be published except with the approval of the government in consultation with the heads of the services, departments or organizations concerned.

2. That the proper authorities in each service, department and organization take such steps as may be considered desirable and effective, in the light of this report and of the evidence and exhibits, to prevent further unauthorized transmission of information and to set up further safeguards.

3. That all security measures should be coordinated and rendered as uniform as possible.

4. That the evidence and exhibits accompanying this report be placed before the proper persons in the various services, departments and organizations affected, for study so that a complete evaluation of the information and material handed over can be made in each case to ascertain in detail what has, and what has not, been compromised. That consideration be given to whether the findings so made should be communicated to the proper authorities in the United Kingdom and the United States.

5. That the Official Secrets Act, 1939, be studied in the light of the information contained in this report and in the evidence and exhibits

and, if it is thought advisable, that it be amended to provide additional safeguards.

6. That consideration be given to any additional security measures which would be practical to prevent the infiltration into positions of trust under the government of persons likely to commit acts such as those described in tbis report.

7. That the practice and procedure in connection with the issue of Canadian passports be revised. While not elsewhere referred to in this report, we have had evidence indicating that naturalization and birth certificates have also been improperly obtained. We therefore suggest that the conditions surrounding the issue of these documents might be the subject of consideration by the proper authority.

In conclusion I should like to say a word of appreciation of the service to the state which has been rendered by the members of the royal commission, by the counsel associated with them and by the officers of the public service who have assisted them in their investigations. Their task has been long and arduous. They have worked at it unremittingly and with a high sense of public duty.

I should like to direct a question to the Prime Minister. I notice that the name of Doctor David Shugar is included. Doctor Shugar has since been acquitted by the court. Should not that fact have been recorded in presenting this report to the house? Once a man has been tried and acquitted, I think a note should be made of the fact in order to clear up the situation.

Mr. HOMUTH:

He was not tried. He was not even sent up for trial.

Mr. COLDWELL:

The case was dismissed.

An hen. MEMBER: He was not even committed.

Mr. MACKENZIE KING:

I am unable to say at the moment whether the reference here covers all that relates to Doctor Shugar. It is possible there is another connection to which this may have reference. I am sure, however, the public will be happy to take notice of what my hon. friend has said.

Mr. A. L. SMITH (Calgary West):

Mr. Speaker, pursuant to standing order 31, I beg leave to move the adjournment of the house to discuss a matter of urgent public importance, namely, the threat to the whole Canadian economy which now exists due to the unsatisfactory relations between management and labour, accelerated as it now is by the present strike in the steel industry.

Labour Conditions-Strikes

Mr. SPEAKER:

The hon. member for Calgary West courteously notified me of his intention to make this motion. I have had the opportunity of considering it and will not need to delay the house further by examining the motion. The hon. member is asking for leave to move the adjournment of the house to discuss an urgent matter. I must draw the hon. member's attention to the fact that this question is already before the house in the debate on the budget. During that debate, as he knows, it is the privilege of every hon. member to make any suggestion or recommendation to the government that he sees fit, and to discuss any matter which comes under government responsibility; therefore I do not see any urgency to adjourn the house to discuss the matter, and I cannot allow the motion to be proceeded with.

Mr. BRACKEN:

I am aware, Mr. Speaker, that no debate is permitted on the decision you have made, but with all deference I must appeal against Your Honour's decision.

Mr. COLDWELL:

May I respectfully point out that a large number of members who are interested in this question have already exhausted their right to speak on the budget, and therefore Your Honour's ruling will deny some hon. members the right of expression.

Mr. SPEAKER:

I hope that I have

explained my position clearly to hon. members. The object in moving the adjournment of the house under standing order 31 is to give hon. members an opportunity to discuss an urgent matter. During a session we have two debates, the first one on the address and the second on the budget, during which every hon. member has an opportunity to discuss any matter which comes under the jurisdiction and the administration of the government. In a few minutes the leader of the house will call the order to resume the debate on the budget. When that is done nearly all hon. members will have the opportunity to discuss this matter.

The leader of the C.C.F. party has called my attention to the fact that many hon. members have already spoken and will not be able to take part in the debate. I would answer him by pointing out that only forty-two members out of 242 have spoken thus far on the budget. Moreover, there is an amendment and a subamendment to the motion before the house. As the house knows, hon. members have an opportunity to speak on the subamendment and the amendment, and when that is disposed of they will have another opportunity to speak on the main motion. I believe therefore that it is my duty to refuse the hon. member leave,

since, according to the rules of the house there is no urgency to adjourn the house to discuss the matter.

Mr. MacINNIS:

May I draw Your Honour's attention to the fact that either it is an urgent matter or it is not. If it is an urgent matter, then Your Honour should allow it to be dealt with nowr. I have already exhausted my right to speak on the budget, but I should certainly like to speak on this matter, because it is urgent. It cannot be put off on the basis that there is an opportunity on the budget to discuss it. This is an entirely different matter, and hon. members should have an opportunity to express themselves on it.

Mr. MACKENZIE:

May I rise to a point of order-

Mr. HOMUTH:

There are five thousand employees in my riding who are threatened with unemployment.