February 25, 1916 (12th Parliament, 6th Session)


James Joseph Hughes



I am reading from page 73 of the Public Accounts Report, comparative statement of expenditures on consolidated account. As I said, this department is the worst of all, for the revenue is falling off. For the first time in thirty years there has been a deficit in that department in the last two years. I think the deficit in 1914 was $250,000, and last year about $900,000. The receipts over expenditure during the last year of the previous Administration amounted, to over $1,000,000. I think .some explanation should be given of this increase.
As I see the Postmaster General in his seat, I wish to call his attention to the fact that the previous Administration in its fifteen years of office expended on the Post Office Department $72,438,037, or an average yearly expenditure of $4,828,536. The present Government during its four years of office has spent $48,838,088, or an average yearly expenditure of $12,209,522; that is, they spend on the average practically three times as much as the previous Government did. Sir William Mulook, when he was appointed Postmaster General, introduced business principles into the conduct of his department, and the effect was very quickly seen. Under the Conservative Administration the deficit was about $700,000 a year for some years. During the first two or three years of Sir William Mulock's Administration the deficit in the Post Office Department w'as reduced, but not completely wiped out. After that a surplus was the order of the day, and I think that the surplus during the last year or two of the previous Administration was pretty nearly a million dollars. Under the present Administration the surplus quickly evaporated, and a deficit took its place. Under the late Administration the postage rates were reduced from three cents to two cents on domestic letters, and, I think, from five cents to two cents on letters to Great Britain and all British dependencies, a very large reduction; but notwithstanding that the business management of the previous Administration brought about the condition of surpluses to which I have alluded,. Under the late Postmaster General (Hon. Mr. Pelletier) business methods were discarded, and patronage committees from the Atlantic to the Pacific took charge of the Post Office Department, and the results were quickly seen. The present Postmaster General (Mr. Casgrain)-I have not the

honour and privilege of his. personal acquaintance-has, amongst those who know him best, the reputation of being an honest man, but those who know the late Postmaster General do not make the same statement about him. If the present Postmaster General is to sustain the reputation that he possesses he will have to get busy, because, although the receipts are increasing, the expenditures are rolling up, and so are the deficits. The deficit last year wae $3,000,000; this year I understand it will be about $5,000,000, and yet the Postmaster General is asking, in his Estimates, for about $800,000 more than he asked for last year. That is a serious state of affairs. Can the country stand an extravagance of that chraoter? It is time that the matter should be made known publicly, because very few men would believe that any Government would conduct the public business in such a manner. I have to borrow the language of the Minister of Finance in order to describe this extravagance properly, because I myself cannot do it justice. That is the situation so far as the civil expenditure is concerned, and there is practically no let up, even under the trying conditions through which we are passing at the present time.
Now, Sir, one would have thought that, when the war broke out and we were confronted with the enormous expenditure that would have to be made under war conditions, the extravagance that had been practised during the previous years would disappear, but it seems that, instead of that, ttie flood-gates were opened and grafters aid middlemen from all parts of the Dominion flocked to Ottawa as flies gather around a molasses barrel. The revelations made in the Public Accounts Committee last year, although they only touched the fringe of the matter, shocked the country. In that committee evidence was submitted to show that, when representatives of business firms came to Ottawa to try to do business with the Government, they were told that they could not do it direct; that middlemen would have to be employed. Shaver, the Toronto representative of Bauer & Black, Chicago wholesale druggists, who made a specialty of field dressings, made the sworn statement before the Public Accounts Committee that, when he came to Ottawa wishing to do business with the Government, he was to'ld that he would have to employ a middleman, and in that way Mr. Garland, the late member for Carleton, came into the business.

In Kings county; N. S., there were in regard to horse purchases revelations which discredited the country. Horses that were lame, blind, spavined, ringboned, wind-broken, or old enough to be rejected at the time of the Boer war, were accepted and paid for, with very few questions asked. Of course, the men connected with this matter had to leave Parliament and were read out of the party. A few days ago 1 put upon the Order Paper a question asking the Government whether the horses that had been purchased for army purposes in Prince Edward Island and also in the other provinces were found to be suitable and satisfactory, and I got the answer " yes " in both cases. I was told that 114 horses had been purchased in Prince Edward Island, and I know that the Davidson Commission, after examining into that purchase, stated that everything was right; that the man who made that purchase had acted honestly and squarely with the Government; that he had got good value for the Government. But the Government left off buying horses in that province. What, Sir, can be thought of the answer which I received in reply to my question whether the horses purchased in the other provinces were suitable and satisfactory? The minister said " yes," and when I questioned the accuracy of his answer, he stated in the House a few days afterwards that he saw the horses that came from Kings county, N.S., and that he never saw a better lot of horses. That is the kind of information which we get from Ministers of the Crown, notwithstanding the sworn evidence before the Public Accounts Committee.
There is published in my province a paper which gets articles written in Ottawa or inspired in Ottawa, and in it I saw a statement that the speech recently made by the Minister of Militia and Defence had completely exonerated the Government from any impropriety in regard to the manufacture of shells and all expenditures of the Militia Department. I just want to read to the House an extract from the Daily Mail, a paper which is published in the city of Montreal, and which supports this Government. This paper, the president and managing director of which is a brother of the Minister of Finance, had this to say in its issue of January 28 with regard to the statement of the Minister of Militia and Defence concerning war munitions:
It is not so long since Sir Sam launched an attack of the stereotyped Hughes quality, at the head of Mr. D. A. Thomas, for the reason that the latter gentleman questioned the econ-

omic and other capacities of the old Shell Committee. Sir Sam then asserted in his vigorous cocksure manner, that all was well ana no change would be required or would he tolerated.
But a change' has been made; a reduction in price was brought about, and an increased production was thus secured. And now Sir Sam quotes this right-about-face as a justification of his wisdom or initiative.
General Hughes' comparison of shell prices in Canada and those in the United States, like a great many other statements made in his speech on the Address, are based upon information the sources or bona fides of which he does not establish or reveal. If these statements are in keeping with the General's allegations as to the politics of some of the so-called mushroom manufacturers of shells in Canada, they are not worth considering.
It will be remembered that in his statement the Minister of Militia said that as many Liberals as Conservatives-and he gave some names-were making shells. The Daily Mail says that a statement of that kind is not worth considering. The article goes on:
We are in a position to say that he has named exceedingly good Conservatives in the mushroom business, and styled them Liberals.
I want to examine for a moment a matter with which the Minister of Militia and Defence is most closely connected, and which concerns a contract given to the Midvale Steel Company of Philadelphia. In his speech in the debate on the Address, the Minister of Militia said that the people of Canada could do anything that any other people on the face of the earth could do; that they could manufacture anything that could be manufactured elsewhere. There was only one thing that we could not manufacture-shovels. That m;ust have been the reason why a contract for 25,000 shovels at $1.35 each was given to the Midvale Steel Manufacturing Company. I am informed that at 500 different places in Canada these shovels could have been manufactured at from 30 to 35 cents each. Why was this order given to the United States firm? The only reason to be offered is this: no investigation could subsequently be held into the transaction. The people of the United States are not amenable to any court in Canada, not even to this Parliament, and no investigation into the giving of this contract could be held. Last session, over eleven months ago, I got an order of the House for the papers in connection with this transaction, and they have not yet been brought down. My impression is that the Minister of Militia and Defence has no intention of bringing them down; he intends to flout and disobey the order of the House. This year the matter is before the Hi -
Public Accounts Committee, and 4 p.m. some light may be thrown upon it; but certainly no thorough investigation can be held. In my judgment there are doings in connection with this transaction that are more reprehensible than anything that Garland of Carleton, Ont., or Foster, of Kings, N.S., did. It is known that a young lady, a stenographer and typist in the office of the minister, got a patent on a shovel and made perhaps $25,000 out of it. The thing was worthless;
6,000 of them were sent over to England, but never got any farther. Is it possible that a young lady in the minister's office could have had sufficient military know-eldge to enable her to invent a military tool or arm that the generals- of Europe, with their years of experience, would not think-of? This young lady has been made wealthy at the public expense, and my constituents have to bear a share of that burden. I do not want them to bear it; it is not fair that they should. There is no surer way of injuring the country than by destroying the faith of the people in the impartiality and rectitude of its courts. This is the highest court in the land; the Prime Minister has its honour in his custody. Garland and Foster are out of the party; they are punished to the full extent of the minister's power for doing something that, in my judgment, was not as reprehensible as certain things done by another gentleman who was recommended for knighthood.
Considerable discussion has taken place in this House and in the press of the country with regard to shell contracts. That will be discussed at length before the session is over, and I shall not go into it now, except to say that the facts that I mention show the enormity of the graft which characterized the operations of the Shell Committee. The Minister of Militia says he is responsible for that committee, and that he will stand by it as long as it has a button on its coat. I just wish to mention that Mr. Jones, manager of the Canada Mr. D. A. Thomas, special representative of Mr. Lloyd George, secured by his intervention, the cancellation of certain contracts and saved Canada and the Empire $21,000,000 of excessive profits. These contracts were re-let at a price saving $21,000,000 in profits. It is not too much to say that there are men in the Dominion of Canada who will be multi-millionaires in consequence of some of the operations of the Shell Committee. An investigation has so far been refused by the Government, the reason advanced being

that the greater part of the money expended belonged to the v British tax-payer. And that is our idea of loyalty, that is our idea of guarding the British taxpayer, who is carrying a burden at the present time, and will be after the war, greater than has ever been imposed on any man in the world, who is bleeding from every pore at the present time. And these super-loyal men are piling millions on millions of graft upon the British taxpayer-and yet the Government so far refuses an investigation I Other things are going on that are nearly as bad. There is at present pending in the city of Quebec a suit between a middleman and a reputable shoe manufacturing company. The John Ritchie Shoe Company is being sued by a Mr. Belmar for some $40,000 or $50,000 as a middleman's profits on
150,000 pairs of canvas shoes, an order foi which he claims he was instrumental in getting from the department. This suit is contested, but a contract has been submitted, signed by the John Ritchie Company, acknowledging Mr. Belmar to be the middleman who obtained the orders for them, and it is known that on a previous order for boots they gave him a very considerable commission. The iniquity of the whole thing must be apparent to everyone. Under the present purchasing committee, which was appointed last year to do things properly, it appears that an order for trousers was given in Toronto at $40,000 more than the price at which the lowest tenderer was willing to make them. One company got a small portion of that order, some twelve thousand pairs of trousers, upon which they made an excess profit- because I presume the lowest tenderer was calculating on a profit-of over $6,000. That is going on at the present time, or it was quite recently ,and so it is all along the line.
Turning to the purchase of horses in Canada, I have been trying during this session to get some information from the Government in regard to their purchases of horses, but I cannot get any. Why should not the Government try to dispose of the surplus horSes fin this country? The situation appears to be that the Govern ment started in to purchase horses foT the Canadian troops-and we have seen the kind of horses they purchased. That discredited the horse industry of the country. Whether or not the horses were sent to Salisbury I am not aware, but I presume some of them were, and that they were very little good when they arrived there. Later on the Government put an embargo

on the export of horses, they passed an Order in Council prohibiting the exportation of horses from Canada. Then, almost without warning, the men who came from Great Britain and France to purchase horses were turned out of the country; the Government would not allow them to purchase horses here and they went to the United States. That embargo, I under stand, was removed, but there have since been no horse purchases worth speaking of in Canada, and there is a large number o', horses in Canada for sale, probably one hundred thousand. I wish to refer to some answers which I received to questions placed by me on the Order Paper. On page 794 of the unrevised Hansard, these questions and answers will be found:
1. Did the British or French Governments purchase any horses in Canada for army purposes since 1st August, 1914?
2. If so, how many, and when did they stop buying horses in this country?
3. Has the Government made .any representations to the Government of Great Britain or France in regard to the number of horses obtainable in Canada? If so, with what results?
4. Are the British and French Governments purchasing horses in the United States for army purposes?
5. When'did the Canadian Government stop buying horses for military purposes?
Sir Robert Borden:
1. The Government is informed that the British and French Governments have purchased horses in Canada for army purposes since the first of August, 1914. I understand also that the French Government is buying horses in Canada at the present time.
, 2. The British Government has not. been purchasing horses for some months; I think since about November. I would not feel at liberty to give information to the 5 1 ousy as to the number of horses purchased as it would be against the policy which the British Government has pursued in such matters. The Britisn Government does not give information as to the numbers of horses, or munitions, or anything of that kind which they purchase.
3. Representations were made to the Government of Great Britain with regard to the number of horses obtainable in Canada, and the British Government was asked to communicate these representations to the French Government. The result was that in August last an arrangement was made between the British Government and the French Government, by which the French Government should be permitted to purchase horses in this country.
4. The Government is not aware whether the British and French Governments are purchasing horses in the United States for army purposes.
5. The Canadian Government stopped purchasing horses for the reason that an arrangement was made during the past summer by which the British Government would purchase whatever horses might be necessary, not only for the British forces but for the Canadian, forces as well. That arrangement was made in the early part' of August, and I believe that since about that time the Canadian Govern-

ment has not been purchasing horses for military purposes.
Remember, the Prime Minister stated that he could not give me the information in regard to the number of horses purchased by the British Government, or anything of that kind. I have here clippings from the Ottawa Journal which are of interest in this connection. They are as follows:
Kansas City, Mo., Fob. 18.

No more American horses for use of the British forces will be purchased for some time at least, according to Major General F. W. Benson, of the general staff of the British army, who is in charge of the purchase of horses. The British Government has secured enough horses for the next three years.
New York, Feb. 18.-Records of the exports of horses to Europe show that more than 500,000 . horses valued at $125,000,000, have been shipped there from this country since the beginning of the war.
The prices show a declining tendency. The average price in 1914 was $240, against an average of $207 in November last.
So it appears that the Major General, who is purchasing horses in the United States fo.r the British army, gave out the information that we could not get in this Parliament. It appears also that the British authorities have purchased half a million horses in the United States at a value of $125,000,000, while the farmers and stock breeders of this country cannot sell a horse, and the Government appear to be helpless. Whatever interference, whatever action they took, would appear, so far as we can discover, to have been futile. Their Order in Council appears to have been ill-advised. Sending the representatives of the British and French Governments to the United States to purchase horses was surely a suicidal act. It reminds me of what the Agricultural Department did some years ago in sending an officer of that department to Washington to tell the people of the United
States that our potatoes were diseased and should not be allowed into that country. Horses are what the British and French armies want, and if the Canadian horses are not sold for army purposes, they will not be needed at all, for there is no local demand for them. Is there any reason in the world why an industry in which the farmers and the stock breeders of the country are so deeply interested, should not find a market if the Government would only interest thmselves in securing it? But they seem to have done nothing; they have simply destroyed the horse trade in this country. We read in the despatches that the British
Army have secured in the United States sufficient horses for the next three or four years, so that we cannot expect to sell horses in this country for army purposes, and the surplus stock now on hand will be practically useless.
I would like to read a part of the answer to a question which I put to the Prime Minister. The Prime Minister in his reply said:
1. The Government is informed that the British and French Governments have purchased horses in Canada for army purposes since the first of August, 1914. I understand also that the French Government is buying horses in Canada at the present time.
I then put a question on the Order Paper asking where the French Government were buying horses in Canada, and what the names and addresses of the parties representing the French Government in this country were; and the answer of the Prime Minister-I am not able to put my hand on it at the moment-wjas that he could not give me the information. He understood that the Hudson Bay Company was doing something in that line, but he was not sure; that was the purport of the answer. That is the condition of affairs; the Government do not seem to know anything at all about the matter. If they do, they will not give the information. Why should there not be some place at headquarters in Ottawa where information of this kind could be obtained? Why withhold this information? Why should the Government not be pleased to give the members of this House such information, information that they could convey to the people. They should be willing to get the information from any source in regard to a matter of such importance to the farmers and stock breeders of the country. There seems to be something radically wrong in regard to the matter. If the Government haive inform- ' ation in regard to it, they are withholding it for some reason or another not yet understood, and in all probability no information will be forthcoming. But this matter will be fully investigated before this session ends.
Sir, I have brought to the attention of the Government some matters which I think deserve consideration. In the dying days of the old French regime the Intendent Bigot, and those associated with him, introduced into the colony a carnival of corruption, graft and dishonesty. We are not in that position; but we are at war, and a great many people in this country are taking advantage of the war to make pat-

riotism pay, and some of them are the men who most loudly proclaim their loyalty. The Government are either protecting them or they seem to be powerless. Notwithstanding the revelations that were made in the Public Accounts Committee last session, the people of this country did not slacken their efforts or moderate their determination to see this war through. When demands were made upon them for the Patriotic Fund, for the Belgian Relief Fund, for the Red Cross Society, and for other funds, everybody responded. In my own small town, when we heard that there was a scarcity of machine guns at the front, and that our soldiers were not having a fair show against the Germans, we subscribed to a fund to purchase three of those weapons. One man alone subscribed an amount sufficient to purchase a machine gun. He could afford it; he is a member of the other Chamber. Another man in very moderate circumstances subscribed for another gun, the town collected money to purchase a third, and that same man subscribed $300 to the second fund and was ready to give everything he possessed in the world to help on the war. That is the spirit which animates the people. Even the school children subscribed, giving their pennies. But while that is the spirit among the ordinary people of this country, the grafters are getting away with their millions, and the Minister of Militia and Defence says he will stand behind them while there is a button on their coats. That is the state of affairs.

Topic:   THE BUDGET.
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