1916-03-02

CANADIAN RED CROSS SOCIETY.


[Stage Direction]
Sir ROBERT BORDEN (Prime Minister) moved for leave to introduce Bill No. 48, to amend an Act to incorporate the Canadian Red Cross Society. He said: I was asked to introduce this Bill by the executive of the society, as the result of a communication received by them to that effect from Sir John Gibson. There was some difficulty about the notice, and there was
also a desire to avoid all unnecessary expense in the way of publication. The purpose of the Bill is to increase the number of members on the council and on the executive committee. Mr. Sweny, Chairman of the Council, explains the purpose of the Bill in this way:
The limitations of the members of the Council and Executive Committee as laid down in the original charter have been found not to work so well from the difficulty experienced at certain seasons of the year providing for a quorum at the meetings called by the Council and Executive Committee. In addition, representations have been made that the western provinces of the Dominion have not been adequately represented. Some idea may be formed by you of the great extension which has taken place in the society's operations by the simple statement that there are now in addition to the provincial branches some five hundred branches and probably double that number of auxiliary societies all working in the cause. It is important that as many members of the council as possible should be chosen from leading people in the several provinces in order that their influence may be widely exerted.
Motion agreed to, and Bill read the first time.
Sir WILFRID LAURIER:: This is really a private Bill?


Sir ROBERT BORDEN:: Yes.


Wilfrid Laurier: All the requirements have not been fully complied with, but I suppose no interest can suffer on that account, the society being one of a purely benevolent character. Does my right hon. friend intend to send the Bill to the Committee on Standing Orders?


Robert Laird Borden: I had not thought of sending it to a committee at all, but I have no objection to sending it to the Committee on Standing Orders.


Wilfrid Laurier: It would be better to send it to a committee to see that no private interests are affected.


Robert Laird Borden: I have no
objection whatever to that course. We will send it after the second reading.


Wilfrid Laurier: Yes.



QUESTIONS.

[Stage Direction]
[Questions answered orally are indicated by an asterisk.]
LIEUT. COLONEL ONESIPHORE TALBOT. Mr. LAVALLEE:
1.	Is the Government aware that Lieut. Colonel Onesiphore Talbot is said to be carrying on recruiting in the county of Bellechasse?
2.	For what regiment is he doing such recruiting, if at all?
[Stage Direction]
3.	What salary is attached to his duties as recruiting officer, and what sums to date, have been paid to him as salary, outlays, travelling expenses, etc. ?
4.	How many soldiers have been enlisted in the county of Bellechasse since Lieutenant Colonel Talbot is said to have been acting as recruiting officer?

Mr. KAY:: 1.	How many horses for military purposes has the Government on hand at present in
Canada?
2.	Where are they being kept?
3.	Is it the intention of the Government to buy any more horses for military purposes during the present summer?
4.	Has the Canadian Government purchased any horses for military purposes outside Canada? If so, where?


Sir SAM HUGHES:: 1. 1,769 horses.	[DOT]
1st Division:	London, 37; Guelph, 70;
Woodstock, 5; Chatham, 1; Stratford, 1; Galt, 1; total, 115,
2nd Division:	Toronto, 270; St. Catharines, 58; Welland, 8; Niagara Falls, 8; Barrie, 8; Orillia, 8; Brantford, 50; Col-
lingwood, 8; Oshawa, 8; Sault Ste. Marie, 8; total, 434.
3rd Division:	Kingston, 251; Ottawa,
90; total, 341.
4th Division:	Montreal, -24; St. Dominique, 22; total, 46.	[DOT]5th Division:	Quebec, 67.	/
6th Division: Halifax, 39; Fredericton, 59; Sussex, 6; Woodstock, N.B., 1; Charlottetown, P.E.I., 4; Chatham, N.B., 2; Truro, 4; Canso, 4; Sydney, 2; North Sydney, 2; Sackville, 2; Glace Bay, 1; Pictou, 1; Newcastle, 1; Campbellton, 1; Bathurst, 1; total, 130.
M. D. No. 10: Winnipeg, 328; Port Arthur, 1; Portage la Prairie, 29; Saskatoon, 8; Regina, 10; Brandon, 8; total, 384.
M. D. No. 11: Victoria, 41; Vernon, 19; Kamloops, 6; Fernie, 5; Vancouver, 28; New Westminster, 13; total, 112.
M. D. No. 13: Edmonton, 25; Medicine Hat, 13; Lethbridge, 3; Calgary, 99; total, 140. Grand total, 1,769.
3.	No.
4.	No.


POLITICAL PATRONAGE.
Mr. MACDONALD:: 1.	In what departments of the Government is a patronage list maintained?
2.	In what departments of the Government is no patronage list kept?


Mr. BLONDIN:: 1.	Wherever in any department there is occasion to make comparatively small and incidental purchase? in respect of which the usual practice of securing the same by advertising for tenders would be disproportionately expensive and hence impracticable, the names of reliable persons or firm s from whom the same may be conveniently procured, having regard to the place where such supplies are needed, must necessarily be obtained; but the patronage system as it was practised before the general elections of 1911 is not carried out by the present Administration. The tender system is rigidly adhered to by aJl departments except in cases where it would mean waste of money. The purchase of all supplies for war purposes is under the War Purchasing Commission, which calls for tenders in every case where it is practicable.
2.	Answered by No. 1.


Mr. MACDONALD:: 1.	Is it the intention of the Government to carry out the statement made by Sir George E. Foster, as set out on page 949 of Hansard, as follows: " I wish now that I might speak from the heart out, and make an agreement in this country between both parties that hereafter

patronage shall not be applied by political parties in the construction of our public works."
2.	Does the Government intend submitting to this House a definite proposal, by which means the evils of patronage may be done away with?
3.	If not, what action does the Government propcse to take in the way of doing away with the patronage evil?


Mr. BLONDIN:: 1.	Public works are constructed by tender and contract except in occasional urgent cases where for reasons of public interest it is deemed advisable under the authority of the Governor in Council to proceed otherwise. It is not deemed wise to depast from this sound principle of public policy. The Government have ceased to undertake any new works since the commencement of the war, and during the continuance of the war they propose to commence none except in cases of extreme urgency. When any new public works may hereafter be started the Government will not use or introduce the system of patronage, but will continue the system of tender and contract. Consequently the suggested agreement is nbt necessary so far as they are concerned; although they would welcome the adherence of the Opposition to the same policy.
2.	and 3. Answered by No. 1.


MR. HECKLES WILLSON.
*Mr. PROULX:: 1.	Referring to an item in the Ottawa Citizen of January 29, 1916, as follows:
" Mr. Beckles Willson, of Windsor, N.S., the biographer of Lord Strathcona, has been selected by the Minister of Militia to assist Sir Max Aitken in compiling the records of the Canadian forces in the war."
2.	Is the s'atement therein contained correct? If so, what is the date and terms of Mr. Willson's engagement?
3.	Did Mr. Willson agree to expunge the Hutton letter from a new edition of his Strathcona biography? If so, what was the date of such agreement?


Sir SAM HUGHES:: 1.	Yes, Mr. Beckles Willson of Windsor, N.S., was appointed assistant to Sir Max Aitken, general representative for Canada at the front.
2.	He was granted the honorary rank of major in the Canadian Militia and in the Canadian Expeditionary Force, with effect from the 31st January, 1916, and was graded as a general staff officer, 1st grade.
3.	No.


PIERCE ARROW MOTOR CAR PURCHASE.
Mr. CARVELL:: 1.	When was the Pierce Arrow motor car purchased, referred to on page S. 168, Vol. 11, of the Auditor General's Report, 1915, at a cost of' $7,003?
2.	Who ordered the purchase?
3.	For what purpose is said car being used?


Mr. CASGRAIN:: 1.	The Pierce Arrow motor car was purchased on the 27th day of March, 1915, at a cost of $6,750. (The difference between this amount and the amount mentioned in the question is for accessories.)
2.	The Postmaster General, after receiving a report from the Chief Post Office Superintendent, Eastern Division, as to the necessity of the purchase.
3.	In July, 1910, owing to the great expansion of the city of Montreal, and the necessity for supervising efficiently and with despatch the many sub-offices and postal stations which came under the direct supervision of the Montreal post office, it was found necessary to purchase an automobile foT the use of the Post Office Department in Montreal. During the last few years several new postal stations have been opened in Montreal. These postal stations consist of branch offices operated in exactly the same manner as the Montreal head office, the majority of which in themselves are each as large as an ordinary city post office. The accumulation of work resulting from this steady increase has been so great that in order to overcome the great amount of postal work, it is an absolute necessity that the Post Office Department should have the use of an automobile which they could obtain at a moment's notice, in order that they may follow up inquiries and investigations which call for immediate attention and keep their postal stations and sub-offices under close supervision.
At the present time, there are seventeen postal stations in different parts of the city of Montreal as well as nearly 100 subpost offices, all of which are under the direct supervision of the officers of the Montreal head office, and some of which are sixteen miles apart, as the Montreal post office district now covers an area extending from Summerlea, ,west of Lachine to Longue Pointe, and from the River St. Lawrence to Riviere des Prairies.
A great bulk of the work transacted in that district is of a transient nature. The whole British mail is sorted at the Montreal head office, and is subsequently distributed from that office. The majority of investigations and inquiries in connection with the British mail have, therefore, to be made at the head office in Montreal and the various postal stations. These investigations, which take place from time to

time, are very numerous and it is absolutely necessary that the same he followed up without delay, as, unless immediate action is taken directly a loss is discovered, it is almost impossible to trace any missing mail. These remarks apply particularly to the registered part of the British mail, which is always' very heavy. In this particular class of work, despatch is the most important factor, and it is necessary that the officials of the department should have every facility to carry out these investigations. In the past, ever since Montreal was furnished with an automobile, it has been found of almost invaluable use in regard to this particular class of work, and also the most economical way of dealing with the same.
The automobile has been and is used in connection with the establishing and superintending of rural mail routes on the island and in the district of Montreal.
The automobile is used both summer and winter continuously. At the beginning of 1915, the automobile, which had been purchased in July, 1910, had become dilapidated and worn out, so that on many occasions when engaged on work in connection with postal matters, it broke down and became so defective that it could not be relied upon The present car, which is a more powerful and more durable one, and better suited to the winter roads, was, therefore, purchased and is being used for the same purpose as the car which was purchased in 1910.


ROSS RIFLE MAGAZINE PURCHASES.
Mr. J. J. HUGHES:: Were any extra magazines for Ross rifles purchased since the beginning of the war? If so, how many, and at what price?


Sir SAM HUGHES:: Yes, 43,000 magazines, at $2.31 each, were purchased, through the War Purchasing Commission.


COMMISSIONED OFFICERS AND COMMONS AND SENATE.
James Joseph Hughes: Can the members of the Commons and the Senate, who are officers of the Volunteer Forces, attend to their duties as officers and their duties as members and senators at the same time?


Samuel Hughes: Yes, when they can be spared from their regimental or other military duties.


EMPLOYMENT OF MRS. SHOULDIS.
*Mr. PROULX:: 1.	Is there employed in the Dead Letter

Branch of the Post Office Department a Mrs. Shouldis? If so, what is her salary?
2.	Is the husband in the Canadian forces? If so, what pay is he receiving?
3.	Does Mrs. Shouldis draw separation allowance, in addition to her salary?
4.	When there are said to be many needy persons on the waiting lists in all the departments of the Government, would the Government consider it fair to allow persons in good circumstances to draw from several sources?


Mr. CASGRAIN:: 1.	Yes, at $2 a day.
2.	No information in the -department.
3.	No information in the department.
4.	In view of the great amount of work added to the Dead Letter Office as the result of the Government censorship of all classes of mail and the much greater difficulty of handling these mails owing to the war, it was not a question of putting any person in this position, but some person of tried and proved ability and with a knowledge of this work. Mrs. Shouldis had been before her marriage (from 1907 to 1910) a cler^ in the Dead Letter office, and had proved herself a more than ordinarily intelligent and expert clerk, and when the department ascertained that her services, backed by her knowledge and ability, could be obtained, it was considered very much tn the public advantage to secure them if possible. For the above reasons the appointment was made, on the recommendation of the superintendent of the branch, approved by the Deputy Postmaster General, and it was made solely because of the necessities of the case and the expert knowledge possessed by the appointee. The necessity, moreover, was greater owing to the fact that on account of the number of men going to the front, one of the ablest clerks in the branch had to be sent temporarily to the West to assist in the work of the Dead Letter office for the province of Saskatchewan. Mrs. Shouldis has only been appointed a clerk temporarily, and until the pressure of the work is relieved.


Sir SAM HUGHES:: 1.	Answered by Post Office Department.
2. Yes, $1.50 per day.
3. Mrs. Shouldis draws separation allowance.
4.	Answered by Post Office Department.


PACKARD AUTOMOBILE PURCHASE.
Mr. PROULX:: 1.	Was a Packard automobile bought by or for the Post Office Department for use at Montreal?
2.	If so, what was the date of purchase, and price paid?

3.	Is this automobile used for private purposes? If so, by whom?
4.	If used for public purposes, what are the names of the persons so using it?


Mr. CASGRAIN:: 1.	Yes.
2.	July, 1910; $15,472.75.
3.	Car was sold on 15th July, 1915.
4.	See No. 3. .


EXPORTATION OP HORSES PROHIBITED.
*Mr. J. J. HUGHES:: 1.	What is the date bf the Order in Council prohibiting the exportation of horses from Canada?
2.	Has the said Order in Council been cancelled? If so, when?


Mr. REID:: 1.	Saddle, draught and pack animals suitable for use in war were prohibited export to any place other than the United Kingdom or British Possessions, from August 9, 1914, under Order in Council based on section 291 of Customs Act, chapter 48, Revised Statutes of Canada, 1906.
2.	Said Order in Council was amended by Order in Council dated January 6, 1916, by which horses and other animals, pack, saddle and draught, suitable for use in war, are prohibited export to all destinations abroad other than the United Kingdom, British Possessions and Protectorates, United States, France, Italy, Japan and Russia (except Baltic por(s).


DUTY ON NECKX AGES.
James Joseph Hughes: 
Sir THOMAS WHITE:: The Government have no knowledge of any importations having been made on which duty has not been paid.


COMMANDING OFFICER, 13TH C.M.R.
Mr. BUCHANAN:: 1.	Who is commanding officer of the 13th C.M.R. stationed at Medic'ne Hat?
2.	What previous military experience did he possess?
3.	Whom did he succeed in the command?


Sir SAM HUGHES:: 1.	Lt.-Colonel W. J. Holmes is Commanding Officer of the 13th Canadian Mounted Rifles.
2.	Graduated Royal Military College, June
26, 1891; Lieutenant, R.O., same date; Captain, 102nd Regiment, March 20,	1902;
Lieut,-Colonel, 102nd Regiment, May 4. 1908; transferred to R. O., February 16, 1912.
84	,
3.	This officer was appointed as Commanding Officer, vice Lieut.-Colonel A. C. Kemmis.
191ST OVERSEAS BATTALION, MACLEOD.


Mr. BUCHANAN:: 1.	Has authority been given to raise an overseas regiment with headquarters at Macleod, Alberta?
2.	If so, who is the commanding officer?
3.	What previous military experience does he possess, and what rank did he hold at the time of his appointment?


Sir SAM HUGHES:: 1.	Yes; the 191st Overseas Battalion has been authorized for Macleod, Alberta.
2.	No Commanding Officer has yet been appointed.
3.	Answered by No. 2.


ASH WEDNESDAY ADJOURNMENT.
Robert Laird Borden: That when this House adjourns on Tuesday, the seventh day of March, it do stand adjourned until Thursday, the ninth day of March instant, at three o'clock p.m.


[Stage Direction]
Motion agreed to.	.

[Stage Direction]
On the Orders of the Day:
Mr. VERVILLE:: I desire to call the
attention of the Minister of the Interior to an article appearing in the Vancouver Sun of Saturday, February 26 last. I give the article with its heading:
Hundreds of Loggers Imported to Work in British Columbia-Canadians complain cannot get work owing to Importations from State of Washington.
At least seven hundred loggers have been imported from the State of Washington, it is said, on the authority of Canadian loggers, wno complain that they are unable to obtain positions on account of the imported labour. Cities of Washington are said to be placarded arounfl those sections where the logger and labourer congregate. These posters say there is a shortage of labourers in British Columbia and pay is $3 a day. A considerable number of loggers attracted by the offer of $3 a day have gone hack to Seattle, it is reported, on finding that the posters had misled them and the pay was not $3.
It was reported to the Trades and Labour Council that the Princess Sophia on Tuesday night at nine o'clock took some two hundred of the foreign loggers up to Comox, where they were to work in the logging camps of the Fraser mills. Local loggers complain too that these men were provided with transportation from Seattle to the camps. The immigration authorities professed to know nothing about any such Influx of labourers when communicated with by officials of the Trades and Labour Council.


Mr. ROOHE:: If the hon. member will send the clipping to me, I will have it in-

ia3o

quired into. I am convinced that the immigration authorities have no knowledge of the matter, as there is an Order in Council prohibiting such immigration.


IMMIGRANT WIDOWS AND CHILDREN.
[Stage Direction]
On the Orders of the Day:
Mr. MURPHY:: Can the Prime Minister give me any information on the subject I inquired about the other day-the reported arrangement with the Salvation Army to bring dependent women and children to Canada?


Robert Laird Borden: A letter was received, but when the subject -was last referred to Commissioner Lamb had not arrived. Since then he has arrived and has proceeded to Montreal. He has a proposal which is, in effect, an enlargement of the work which the Salvation Army has been doing during the last four or five years, in bringing to Canada widows with families, under conditions which make it possible for them to support themselves and for the children to engage in work for their own support as they become old enough to do so. I understand that the idea is to enlarge this work so as to bring to Canada the widows of men who have fallen at the .front, and to make arrangements to provide for their support in Canada.


Charles Murphy: Does it involve the
granting of ^id by this Government?


Robert Laird Borden: No formal application has been made with regard to that, and I am not quite sure whether it is involved or not. The Minister of the Interior may have fuller details. I will ask him to ascertain and give the information later.


WAR TAXATION.
[Stage Direction]
The House in Committee of Ways and Means, Mr. Rhodes in the Chair.
Wilfrid Laurier: I understood
from the discussion that has already taken place, that several amendments to the Ways and Means resolutions were] to be brought down. It would have been more convenient had they been communicated to the House before proceeding with their consideration.


Robert Laird Borden: That is the intention.


William Thomas White: The right hon. leader of the Op-

position has anticipated the course I intended, to pursue. The resolutions which were brought down in the Budget appear in the Votes and Proceedings of February 15. In the course of the debate on the Budget, I stated, as my right hon. friend has said, that I would acquaint the House with certain provisions which appear in the Bill to be founded upon the resolutions dealing with some important matters which were discussed in the course of the debate. I propose, at this sitting of the committee, to deal briefly with these points and with the amendments which I have to offer; and then I will ask the Committee, to rise and report progress. The resolutions can then be printed, and to-morrow or some later day, With the full text of the resolutions and amendments before it I will ask the committee to proceed with their consideration.
In the resolutions it was provided that' the special taxation measure should apply to the, accounting periods ending after August 4, 1914, of persons, firms, partnerships and companies. I may say, although I do not purpose arguing the question now, that that followed the precedent of the British Finance Act No. 2, which was' passed into law in December, 1915-some three months ago-and which related back to August 4, 1914. In some of the accounting periods ending after August 4, 1914, it is obvious that there might be included some part of the period previous to the outbreak of war on August 4, 1914. But the committee will no doubt have observed that as the Bill imposed taxation only in respect pf accounting periods up to August 3, 1917, to the extent that any business was taxed in respect of its accounting period prior to August 4, 1914, it would not be obliged to pay for a corresponding period, prior to August 3, 1917. In other words, the intention of the proposals was, that no business should pay upon more than three accounting periods, or upon less than three accounting periods, pf one year each.
The proposal to make the taxation' apply to the past has been discussed at some length, and, so far as the revenue of the Dominion is concerned, I think it makes no difference-as only three periods can be taxed, and as three periods must be taxed- whether or not the proposals are limited to accounting periods, which fall in after August 4, provided that three accounting periods are dealt with. This, however, is subject to two considerations. In the first place, large profits were derived during 1915 by many firms and companies engaged in the munitions business and in many other

businesses in which, owing to the war, there was an abnormal rise in the price of the commodities dealt with. Secondly, there is this consideration: that it is not desirable, as this measure is a temporary one, to extend its provisions far into the future. In view of the discussion which has taken place, and having given the matter full consideration, the Government is of the view that the measure might with fairness be made to apply to businesses in respect of accounting periods which end after December 31, 1914, instead of after August 4, 1914. The months of August, September, October and November, after the outbreak of the war, were very trying months; and, therefore, I have to propose, in the amendments which I shall lay upon the table, that the taxation measure shall apply to businesses in respect of accounting periods which end after December 31, 1914.


Mr. A. K. MACLEAN:: The month oi December is excluded.


William Thomas White: After December 31, 1914. There is a further consideration which I desire to draw to the attention of the committee. It takes a considerable time to levy income taxation, or taxation in the nature of income taxation, and so far as I am acquainted with that kind of legislation, income taxation, or taxation in the nature of income taxation, is always levied in respect of the past, and usually in respect of the past year.


Mr. GRAHAM:: That is the basis.


William Thomas White: Sometimes it is the basis, and sometimes it is upon the actual business. Whether it be the basis, or whether it is upon the actual business, the tax is levied upon an amount determined by the past year's business. If- and the question has been raised in debate -we provided that these proposals should apply only to accounting periods from this date forward, it is perfectly obvious that we would not be able to obtain any revenue during the present year, because it takes almost a year to make assessment, to allow for revision, and, finally, to collect the taxation. I desire not to elaborate the argument, but for the present only to submit statements of fact.


Charles Murphy: How far does the explanation that the hon. gentleman has just given apply to the accounting period which, under the resolution, is to be determined by the minister himself?


William Thomas White: 
George Perry Graham: You will get more money, too.


William Thomas White: reserves. One company has carried on its business properly. Starting years ago with a small capital, it has written off year by year a proper amount for depreciation. Every, year it has put part of its profit back into business, usually into the plant or stock in trade. In a word, it has built up its business along conservative lines. Some of the greatest enterprises in the world have been built up precisely in that way, and in my opinion that is the proper way to build up large industries; that is to say, to grow by certain and sure steps from small beginnings to a larger, and finally to a great business. In cases such as that, where the reserves are true reserves, no question could possibly arise. Such reserves are just as much capital as the paid-up capital of the company, even if it is fully paid up in cash.


Mr. NESBITT:: Does that apply to incorporated companies as well as to partnerships?


William Thomas White: Undoubtedly.
The question does not arise in the ease of firms, because there we are taking the value of their assets. In my remarks I was referring more particularly to reserves of incorporated companies. On the other hand, there are companies whose reserves are more or less what might be called bookkeeping reserves. Some of these rer serves are actual reserves, but others cannot be regarded as true reserves. We have in this country a number of public franchise corporations, for example. I do not wish to make a sweeping statement, because it would probably be inaccurate, but I know that in the case of many of these companies very little is written off year by year for plant. The profits in excess of the dividend distributed to shareholders are carried to profit and loss account, or to reserve. The motive may be to show a large body of assets,'especially in the case of those companies whose franchise expires at a certain time and who look forward to their plant, being taken over by the municipality. Such companies naturally desire to show as large a body of assets as possible in anticipation of that time and of such taking over. I use these two illustrations because they represent extremes. In the one case, we have the well-managed company with true reserves, and in the other the company which, neglectful of sound business principles, has failed to make due allowance year by year for depreciation, and to whom it has been an object to build up reserves which, in part at least,
TSir Thomas White.]
may be regarded as book-keeping reserves. So that in dealing with such a range of business as we are dealing with in these proposals, it is a very difficult thing to lay down a rule as to what amount of reserves should be allowed as capital. It is not necessary that I should trouble the House by indicating the different stages of my consideration of this question. At first I thought it might be proper to allow a percentage of all reserves of capital, but that appeared to me to be unsound, because, as I have stated, in the case of some companies the reserves can be considered as true reserves, and in other cases the reserves cannot be so considered. Not to trouble the House further, I finally reached the conclusion which is embodied in the Bill, namely, that the true principle was that there should be allowed as capital the actual unimpaired reserves of a company. Now that is a question of fact. In my opinion that is the sound way of dealing with these reserves. It means that the man who has conducted his business soundly and yritten off a proper amount year by year for plant, and built up a reserve, will be allowed his reserve as part of his capital. On the other hand, if it should be found that reserves, so-called, are not true reserves, they would be allowed to the extent that they are actual and unimpaired reserves. That is the conclusion the Government has reached upon the question of reserves, and I think it will meet most of the criticism which has been advanced in respect of that feature of the Budget proposals.
Now I come to what might be called the converse of that:	the so-called watered
stock corporations-corporations whose capital is excessive. In a great many corporations, capital stock is issued in respect of consideration other than capital. It may be that the stock is issued in consideration of the transfer of a patent, of a valuable agreement, or of a franchise, as in the case of a public service corporation, and it is to be observed that it does not necessarily follow that that stock is valueless because it has been issued in respect of such patent, agreement, or franchise. A patent, agreement, franchise, good-will are all recognized in law as being value, as constituting valuable consideration in any agreement. The difficulty has been that company laws of all countries have been abused, and that the true amount of stock representing the real value of such patent, agreement, or franchise, has not been issued. If stock only to the true value of the patent, agreement,

franchise, or other intangible asset had been issued, the question which has been discussed in this House would hardly have arisen. But the difficulty has been that by virtue of the laws, and of decisions under the laws, which are a part of the law as hon. gentleman know, once capital stock is issued as fully paid for consideration other than cash, then under the authority of leading cases in the English law, which of course have the effect of law here and followed in our courts, no question can be raised by reason of the principle of estoppel against the company which has issued the stock. It has been held, Mr. Chairman, in one of the leading cases that the Court in the absence of fraud, will not inquire into the question of whether or not stock has been fully paid if issued as fully paid foT other consideration than cash, even at the instance of a liquidator. That, I think, is the. law, but what has happened is that under the company laws of all countries, under the decisions of the courts in this country, and by virtue of the decisions to which I have referred, capital stock has been issued to an unconscionable degree against intangible assets. It is in such eases that, unless there was a definition of paid-up capital which would bring those companies within the operation , of the Act, injustice would result to those whose stock had been fully paid up in cash, or whose stock had been properly issued for consideration other than cash.
I need not say to the House that there is considerable difficulty in meeting such cases and in doing full justice in such a measure as this. I stated before, and T state now, that it is practically impossible to ascertain the precise value of the consideration for which the capital stock of a company has been issued as fully paid. It would not be possible to go back to the past to ascertain what was the precise value of the patent, of the agreement, or of the franchise at the time that the stock was issued. Not only that, Mr. Chairman, but in the intervening period, the agreement or the patent or the franchise might have wasted, or become deteriorated. If, on the other hand, the stock has been issued, as consideration for real property, then the real property might have been sold, and altogether it would be impossible, as I stated, to ascertain the precise cash value of the consideration for which such stock was issued in the past.


Mr. SINCLAIR:: What would the minister say as to the value of stock quotations
on the exchange? We will say that a stock which has a nominal value of 100 is quoted in the market at 400. Would the minister say that that was a fair way of finding the market price?
'Sir THOMAS WHITE: I am coming to that, but I will say now, and I think my hon. friend, as a lawyer, will agree with me, that stock market value is evidence, but not conclusive evidence of value. It is some evidence to be taken into consideration. But many factors enter into stock market values-earning power as well as the tangible assets back of the stock, and while I woiild be disposed to say to my hon. friend that some regard should be had to stock market quotations, still I would not consider that a sound basis on which to reach the value of any stock listed upon exchange. My hon. friend also knows that stocks fluctuate very much according to financial conditions'. When money is cheap, when there is a boom, stocks of course rise in value. On the other hand when panics occur, or money becomes dear, stocks fall in value; so I think it would be very unsafe to take the stock market quotations as the value at which stock should be fixed for the purpose of ascertaining the true capitalization of over capitalized companies.
Now I come to what I have to propose. I told the House that this taxation measure would apply to businesses, including corporations, in respect to accounting periods ending after December 31, 1914. To meet the case of so-called watered stock corporations, or over-capitalized companies, I propose by way of addition or amendment to the resolutions a definition of amount paid up on capital stock, which I think will fairly meet the situation. I say again, perhaps quite unnecessarily, that it is not an easy situation to deal with, because we have behind us the entire legislation of the past, and corporate action in virtue of that legislation, and decisions thereunder.
What I propose is as follows: That the amount paid on the capital stock of a company shall be the amount paid up in cash. That is to say, if paid up in cash, no question arises. Where stock was issued before the first day of January, 1915, for any consideration other khan cash, the fair value of such stock, on such date, shall be deemed to be the amount paid up on such stock; and where stock has been issued since the first day of January for any con-

sideration other than cash, the fair value of the stock at the date of its issue shall be deemed to be the amount paid up on such stock. In estimating the value of stock issued for any consideration other than cash, regard should be had to the value of the assets, real and personal, movable and immovable, and to the liabilities of the company at the date as of which such value is to be determined.
In no case shall the value of the stock be fixed at an amount exceeding the par value of such stock. In other words, what we propose is that where stock has'been isued for cash, the amount paid upon the stock shall be the amount of cash so paid upon the stock, but not of course exceeding par. Where the amount paid exceeds par, that would appear in the reserves of the company, so that no injustice is done in making the limitation par. Where the stock of a company has been isused, for consideration other than cash, prior to January 1, 1915, we propose to say that the amount paid up on the stock for the purposes of this Act is the fair value of that stock as at January 1, 1915. Why? Because, as I have said before, this is a tax upon profits upon capital, if we can determine the capital of the company as of a date approximating the beginning of the period in respect to which the company is taxed, then we are fairly imposing the tax in respect to the capital of the company at that time. In other words, we are dealing with the over-capitalized company on precisely the same basis as we are dealing with the properly capitalized company.


Mr. W. F. MACLEAN:: And the hon. gentleman de-waters some of the stock?


William Thomas White: We de-water some of the stock for the purposes of this Act. I did not know that my hon. friend knew what watered stock was. That is the proposal which the Government has to make in respect to companies whose stock has been issued for consideration other than cash. I realise that it will not be possible to ascertain the precise cash value, but for every practical purpose of the Act, this puts the over-capitalized company upon exactly the same basis as the company which has been properly capitalized.


Wilfrid Laurier: How will you determine what is water and what is gold?


William Thomas White: No doubt my hon. friend uses the word "gold" in the sense of tangible assets?


Wilfrid Laurier: Yes.


William Thomas White: Let me give my right hon. friend an illustration such as this: You may have an industrial company whose stock was watered to a very considerable extent, say, some time ago, or, recently-it really makes no difference for the purposes of my argument. That company has certain earnings to-day. Its stock has been issued for a consideration other than cash. If vre could determine the value of the assets of that company as of January 1, 1915, and determine the liabilities of that company as of January 1, 1915, we would have a reasonably fair idea of the value of the stock; in other words, of the true capital of the company. My right hon. friend will, no doubt, say that it will be a difficult thing to do, and I quite agree with him, but in connection with assessment, I may say that I had charge of the business assessments in the city of Toronto for ten yftirs, and while a number of questions arise which are difficult of determination, they are not impossible of determination along fair or just lines for purposes of a Taxation measure. Personally, I see no difficulty in administering the Act under this provision, and administering it in such a way, as I stated a few days ago to the House, as to allow of no undue advantage to the over-capitalized company.


Mr. PUGSLEY:: Is it proposed to take
the actual, fair, cash value irrespective of any prospective profits?


William Thomas White: What I say -is
the value of the assets, movable and immovable, real and personal, irrespective of future expected earning power.


William Pugsley: The cash market value?


William Thomas White: The cash valuer What I say is the value of the assets of the company, real and personal, movable and immovable, adopting the same language as we do in connection with persons and firms subject to taxation, less the liabilities of the company.


William Pugsley: Does the minister know any other better way of arriving at the fair value except by taking what the men who own these properties and franchises, not being obliged to- sell, would be willing to take for them and what the purchaser would be willing to give? In other words, would he consider that to be the fair, actual market value?


William Thomas White: I have no doubt that my hon. friend has really in his mind

the provisions of some of the assessment Acts. Of course, my hon. friend knows that there is a difficulty in reaching what might be called the cash value. We had an assessment act in Ontario the wording of which is something of this character: The amount which would be taken in payment of a lawful debt by a solvent debtor. That was the language of the statute but I do not believe you can express it better than to say the fair value, or the value of the assets. After all, the words, " value of the assets " convey a definite idea to the mind.	*


William Pugsley: When you say the
" fair value," do you allow for prospective profits?


William Thomas White: No. I have not
used the words " fair value " in respect to the future profits on the stock, but I say that regard shoirld be had to the value of the assets, real and personal, movable and immovable, subject to the -liabilities of the company at the date at which such value is to be determined. When the matter is in committee I would value very greatly the opinion of my hon. friend, or any suggestion that he might put forward, but when we say that it is to be the value of the stock as of about the time this Bill begins to operate, and when we say, in reaching that value, that regard shall be had to the value of the assets, real and personal, movable and immovable, and the liabilities of the company, we put the over-capitalized company precisely on the same basis as the fairly capitalized company and- the individual who is being taxed by this Bill. That is what we propose to do and that is the intention of this amendment to the resolution.


William Findlay Maclean: Would the minister say who is to apply the law in this case?


William Thomas White: This is a temporary measure. It has not been my intention, or the intention of the Government, that the measure should become permanent. It is due to the exig-4 p.m. encies of the present situation under which it is absolutely necessary that the Government should raise further money by means of taxation if our credit is to be protected. We are fronted with responsibilities in this coming year to the extent of $425,000,000, and next year the liabilities for war will be greater than they are this year. Even if the war ends within this year, we shall still have
a military establishment, and it will be a long time before we can get off a military basis. I do not desire to mislead the House and the country; the financial responsibilities of the future are very heavy, and l feel if we did not bring in this measure of taxation the credit of the Dominion would suffer, anc( it would react upon our borrowing powers, because, when you go to borrow in the markets of the world at a time like this, the question that is put to you is: What measures are you taking to increase your revenue so as to take care of your rapidjy expanding public debt?


William Pugsley: They would ask two questions: What measures -are you taking to increase your revenue and to decrease your expenditure?


William Thomas White: I would like nothing better than that my hon. friend should raise the question of expenditures by this Government, so that I might have the opportunity, which I have not had up to date, of telling what I think about some of the arguments that have been made in this House against our expenditure. .


William Pugsley: Let us do it in committee.


William Thomas White: I am quite willing to discuss the matter with my hon. friend now or at any other time. This probably may not be the most convenient time, but at any convenient time I shall be glad to take the question up, because I say that this Government has done everything that is possible for any government to do to keep down expenditures.


Mr. MARCIL:: Why did you not strike them out of the Estimates that you are now asking us to vote?


William Thomas White: I do not want to be diverted from my argument, but I desire to say that for the last eighteen months, since this war broke out, in fact, for twenty months-since June, 1914-practically no new works have been gone on with in this country, and if hon. gentlemen can suggest any better policy of economy than not going on with any new works I would like them to submit it for .my consideration, and I will consider it. My hon. friend from South York (Mr. Maclean) asks how we propose to administer this Act. We propose to administer this Act through the Finance Department. Just as the customs administration is under the Minister of Customs, just as the administration of the inland revenue is under the Minister

of Inland Revenue, so the administration of this Act will be under the Department of Finance, and we shall have to make the assessment and collect the taxation. There will be an appeal to the Board of Referees and a further appeal to the court in order to safeguard the rights of the taxpayer.


George Perry Graham: Will the capital stock be taken into account at its value at the time of issue, no matter when issued?


William Thomas White: No, that would be unsound for two reasons. In the first place these proposals are designed to tax profits in excess of a certain amount on the actual capital invested. Suppose you have a company which years ago issued its stock for considerations other than cash. It would be impossible now to go back and ^ascertain the value of those considerations many years ago, and therefore in order to put the over-capitalized company, because I am dealing only with that class of company, upon the same basis as the properly capitalized company, I say: "We will determine what your stock is fairly worth on January 1, 1915;' in other words we will dewater your stock, if it needs to be dewatered, to what its fair value was on January 1, 1915, and then put it on all fours with the company whose capital you allow and whose true reserves you allow as of January 1, 1915."


George Perry Graham: What about stock issued after that date?	t


William Thomas White: My hon. friend must be interested in some stock issued after January 1, 1915. If stock is issued aftei* January 1, 1915, it will be determined on its fair value at the time of issue, but in determining that value regard will be had to its assets, real and personal, movable and immovable; or in other words, it will be put on the same basis as a company whose capital stock has been paid up in full in cash. [DOT]


George Perry Graham: There are two kinds of securities, namely: bonds and preferred stock, which usually provide the capital in cash. Common stock represents an intangible asset such as goodwill or something of that kind. As I understand it, my hon. friend proposes to treat preferred stock and common stock just as capital stock.


William Thomas White: "Capital stock" for the purposes of this Act is capital stock, whether preferred or common, but

bonds, the liability of the company, cannot be regarded as capital stock.


Mr. LEMIEUX:: I would like to read a letter from Alderman Joseph Ward, who is a high-class business man of Montreal. Alderman Ward is a member of the firm of Joseph Ward and Company, one of the large firms dealing in produce in Montreal. I would like my hon. friend, if he can, to give an answer to the questions raised by Mr. Ward, who writes:	*
Sir,-Unless this measure is closely studied it may he found far from equitable. How will Arms with two or more partners whose joint capital may he only $50,000 combined be treated? Will all be subject to the tax? In many cases junior partners in such firms have but little capital and very few firms are composed of members with even capital. In a firm of $50,000 combined capital there may be members with an individual capital of one or two thousand and even if of even capital in a firm of two each would have only $25,000, such would be taxed whereas, a firm with only one proprietor might have up to $49,000 capital and not be taxed. Tou can see the injustice to those forming the firm with the combined capital, and especially if made retroactive and the individual partners have spent or invested their past profits on given amount of business. Now how will firms with several partners under such conditions, compete? Taking the country and city firms with one proprietor is possibly ten to one, so that ten will escape and one will be taxed unless this is adjusted. Do you not think that in all justice in connection with private unchartered commercial firms of that kind, only the profit of such members who may have individually $50,000 capital invested in such firms should be taxed and not the profits of junior members who need all their profits to grow to take care of the commerce of this country? Whatever is done the Government should not allow the one proprietor with more capital than such individual to go free.


William Thomas White: While I do not care to state the effect of these resolutions in any case, as I think it would be unwise to do so, the points raised in this letter present no difficulty to my mind. If men are combined in a partnership, no matter what their interest may be amongst themselves, their firm is an entity. It is engaged in business and the matter of how they pay the tax is a matter of arrangement amongst themselves. The same argument will apply properly to the case of a joint stock company where there is a number of shareholders, one man holding five shares, another 500, and so on. You must deal with a firm as an entity, and a partnership as an entity.
There are carrying on business in Canada some companies who are controlled by companies outside of Canada and, instead of those companies paying their true net

profits, or a substantial part of them by way of dividends to the holding or parent company, they have an arrangement whereby they sell the parent company their product at less than its fair market value and in that way the parent company takes its benefits or advantage from the stockholders in such company. That also is a matter of some difficulty, as hon. gentlemen will realize, but I think I have covered that by an amendment which I shall ask the committee to consider carefully, and which is as follows:'
Where an incorporated company conducts its business whether under agreement or otherwise, in such manner as either directly or indirectly to benefit its shareholders or any of them or any persons directly or indirectly interested in such company by selling its product or the goods and commodities in which it deals at less than the fair price which might be obtained therefor the minister may determine the amount which shall be deemed to be the profits of such company for any accounting period and in determining such amount the minister shall have regard to the fair price which but for any agreement, arrangement or understanding might be or could have been obtained for such product, goods and commodities.


William Findlay Maclean: Would the amendment reach the nickel company-a nickel company? I do not want to specify. Is the minister trying to deal with a company of that kind?	,


William Thomas White: I think that
might fairly be gathered from the clause I read. There has been a misunderstanding with regard to the effect of the measure on mining companies, and there is no doubt that mining companies present difficulties that are not presented by other companies. It would in my view be quite unjust to leave mining companies untaxed in a measure such as this. You have in the case of mining company frequently a capital of five, ten or twenty million dollars earning large profits, and it would seem unfair to other corporations for mining corporations to escape untaxed. Now, it is only fair to the mining coroporations, because I have had representations from some of them, to say that they do not in the least degree desire to escape taxation at this time. They put forward their view as to the method of application of this Act to mining companies. But, as I have said, there has been misapprehension as to the effect of the proposals upon mining conditions. In the case of a mine, profits, so-called, include not only what might be regarded as true net profits, but a very substantial portion of the capital of the mine. Therefore, when we assess mining companies, we must bear
in mind that, in order to ascertain what their net profits are, a substantial part of the apparent profits of the mine represent capital, and that within a few years, depending upon the character of the mine, whether metalliferous or otherwise, the capital will be exhausted. Under the laws of the province of Ontario, and possibly under those of some other provinces, a mining corporation is permitted to do what another corporation is not permitted to do

namely, to pay out as profits to its shareholders a part of the capital. Now, under the resolutions as they stand, it is perfectly clear that in determining the net profits,, regard must be had to the amount by which the mine is yearly exhausted. I may say, there is legislation in the United States assessing the income of mining companies, and it is provided that allowance shall be made, not exceeding a certain percentage -I have forgotten the exact figure-to represent the capital that is being returned to the shareholders in the so-called profit distribution. Now, although it would be implied by the resolutions as they stand, that this allowance should be made for the depletion of capital, yet, in order to make it perfectly clear, I propose to provide that the minister, in determining the profits derived from a mine, may make an allowance for the exhaustion of the mine.
Now, parrying out the intention I indicated at the opening of my remarks, I would suggest that I be allowed to lay upon the table the amendments to these resolutions, that these be printed, and that after they are printed we shall resume the discussion of them in committee. That would seem to me to make for the convenience of all concerned.


Mr. BOIVIN:: Before the committee
rises, perhaps the minister will permit me one question. The minister explained that the profits made during a certain number of years, and invested in a business carried on in a conservative way, would be considered as part of the capital, in computing the profits of the company. I quite understand that, and I quite understand that that will be very advantageous for a company with a paid-up capital of $50,000 or even more. But suppose the case of a corn-pan^ in which the paid-up capital stock is less than $50,000, but in which, owing to accumulated profits, they have invested more than $50,000, will that be taxed?


William Thomas White: They come under the provisions of the Act, because their capital will be more than $50,000.


Georges Henri Boivin: But paragraph 6 of the
resolutions provides:	'
6.	That the capital employed in the trade or business of an incorporated company having its head office or other principal -place of business in Canada shall be the amount paid on its capital stock.


William Thomas White: I am defining
what "capital "stock" means. If I define "capital stock" to include the reserves, then "capital stock" will be the capital stock plus the reserves.


Georges Henri Boivin: So, the idea that all companies with a capital stock of less than $50,000 shall be exempt from this taxation, is a wrong idea?


William Thomas White: What we intend is that companies with a capital stock of $50,000 or over shall be taxed, and in determining what "capital stock" is, regard will be had to the paid-up capital and the reserve. A company in the position referred to by the hon. gentleman would be liable, and, I think, properly so.


Mr. LOGGIE:: The hon. minister said in his Budget that he would explain later on why he put partnership companies on the basis of ten per cent while he put incorporated companies on the basis of seven per cent. I should be glad if the minister would explain this before he proposes these resolutions. The proposal does seem to be inequitable, for it means than an incorporated company would pay four hundred per cent more taxation than would a partnership concern of equal capital and [DOT]earnings. Suppose that a partnership company earns eleven per cent on a capital of :$500,000. It is allowed earnings up to ten per cent without taxation, so that only the balance would be subject to taxation. That is, its earnings would be $55,000, of which only $5,000 would be taxed. Apply to this the rate provided, which is twenty-five per [DOT]cent, and you find that the tax payable by this concern is $1,250. But take an incorporated company with the same earnings *and the same capital, and it is allowed [DOT]only up to seven per cent profits untaxed. [DOT]On its earnings of eleven per cent, four per cent would be taxed. That is, $20,000 [DOT]would be subject to taxation at twenty-five per cent, so that this incorporated concern would pay $5,000 in taxation, or as I have said, 400 per cent more 'than would a partnership concern of equal capital and earnings.


William Thomas White: If my hon. friend [DOT]will be good enough to raise that question
iCSir Thomas White.]
when the matter is under consideration in Committee, after the amendments have been printed, I shall be glad to give my views upon it. I may say now, however, that I consider that there is a real difference between an incorporated company and a firm or partnership, and to show that that view is not singular to myself or tc this Government, I would cite the fact that under the Imperial Finance Bill, No. 2, to which I have referred, the pre-war standard in England was six per cent for corporations and seven per cent for individuals and firms.


Edward Walter Nesbitt: Is there any change with reference to the minimum capital In a partnership?


William Thomas White: No, I have not brought in any change. I do not wish to widen the discussion at this time, but I may say that we regarded if as necessary to fix a minimum. This is a temporary measure. If we had not fixed a minimum, or if we had done what was suggested by certain members of the House-establish an income tax-we should really be obliged to establish another Civil Service in Canada. We should have to cover the country from the Atlantic to the Pacific with an army of officials-assessors, and their clerks; we should have to go into every village, town and city; into every shop and office building, and make the necessary assessments.
Mr. MURPHY-. In that respect, do you not think that you are making a good start in these proposals?


William Thomas White: I think this legislation can be administered with little expense. I myself do not know any better method-I am open to suggestions-of raising a substantial sum of money at the minimum of cost and inconvenience to all concerned. I shall later ask the House to make an appropriation for the administration of this legislation. The reports of commercial agencies are open to us, and by fixing a minimum of $50,000 our task is greatly simplified. We shall not be obliged-and we should not, at this time- to engage an army of officials from the Atlantic to the Pacific to make a comprehensive assessment upon income and upon small firms, like grocers, tailors and others.


Edward Walter Nesbitt: After all, you are trying to get a revenue. I should like the minister to consider again whether that mini-

mum should be fixed, because I think it is absolutely unfair. A man with capital slightly less than that amount goes scot free, though he is willing to pay. It will not cost you any more to collect from everybody who is willing to pay than it will to collect front those having a capital of more than $50,000.


William Thomas White: In that respect, I do not agree with my hon. friend. My information is that if we made these taxation proposals apply to every class of business in the country, without any minimum, the added expense of administration would more than equal the revenue that we should raise.


Edward Walter Nesbitt: I do not think so.


William Thomas White: That is a matter of opinion; my view is as I have stated. I beg to give notice of, and to lay upon the table, the following amendments to the resolutions:
The definition of "non-Canadian company" in clause 1 is amended by adding thereto the following:
" Either directly or through or in the name of any other company."
The following is substituted for clause 2 of the proposed resolution:
2.	There shall be levied and paid to His Majesty a tax of twenty-five per centum of the amount by which the profits earned in any business exceeded, in the case of a business owned by an incorporated company, the rate of seven per centum per annum, and, in the case of a business owned by any other person, the rate of ten per centum per annum upon the capital employed in such business. Such tax shall be levied against and paid by the person-owning such business for each and every accounting period ending after the thirty-first day of December, one thousand nine hundred and fourteen.
Provided, however-	.
(a)	that the amount paid or payable by any person under the provisions of Part One of the Special War Revenue Act, 1915, shall be deducted from the amount which such person would otherwise be liable to pay, and the minister shall have power to determine any questions that may arise in consequence of any difference in the several periods for which the taxes under the said Act and those proposed herein are payable;
<b) that the dividends received from the stock of any incorporated company which has paid a tax upon its profits under the provisions of any Act based upon these resolutions shall not be included when the profits of any business are being determined ; and <c) that the amount of any tax paid by a person under the provisions of the Finance Act (No. 2), 1915, passed by the Parliament of the United Kingdom of Great Britain and Ireland or under any legislation for raising revenue for the present war in force in France, Russia, Italy, Belgium, Servia, Montenegro,
Japan or the colonies or dependencies of any of these countries in respect or the profits of any business liable to taaxtion hereunder shall be deducted from the amount of the tax that would otherwise be payable by such person.
The following is substituted for clause 4 of the proposed resolution :	.
5.	That the businesses to which the tax shall apply are all trades and businesses, (including the business of transportation,) of any description carried on, or partly carried on, in Canada whether continuously or not except:
(a)	the business of any person the capital employed in which is less than fifty thousand dollars, other than a business which, or twenty per centum or more of which, is or has been the manufacturing or dealing in munitions of war or in materials or supplies of any kind
[DOT] for war purposes ;
(b)	the business of life insurance;
(c)	the business of farming and live stock raising; and
(d)	the business of any company, con .mission or association not less than ninety per cent of the stock of which is owned by a province or a municipality.
Clause 5 of the proposed resolution is amended by adding the following to sub-clause 3 :
" And the minister when determining the profits derived from mining may make an allowance for the exhaustion of the mines." -
Clause 5 of the proposed resolution is also amended by changing the date of the fifth line of sub-clause 4 to " the first day of January, one thousand nine hundred and fifteen," and by addng the following sub-clause:
6.	Where an incorporated company conducts its business whether under agreement or otherwise, in such manner as either directly or indirectly to benefit its shareholders or any of them or any persons directly or indirectly interested in such company by selling its product or the goods and commodities in which it deals at less than the fair price which might be obtained therefor, the minister may determine trie amount which shall be deemed to be the profits of such company for any accounting period and in determining such amount the minister shall have regard to the fair price which but for any agreement, arrangement or understanding might be or could have been obtained for such product, goods and commodities.
The following clauses are substituted for clauses 7, 8 and 9 of the proposed resolution:
Capital.
7.	That the capital employed in the business of a non-Canadian company shall be such portion of the amount paid up on its capital stock as shall have the same proportion to the amount paid upon the entire capital stock the value of its total assets.
8.	That the amount paid up on the capital stock of a company shall be the amount paid up in cash. Where stock was issued before the first day of January, one thousand nine hundred and fifteen, for any consideration other than cash, the fair value of such stock on such date shall be deemed to be the amount paid up on such stock; and where stock has been issued since the first day of January for any consideration other than cash, the fair value of the stock at the date of its issue shall be deemed to be the amount paid up on the stock. In estimating the value of stock issued for any consideration other than cash regard shall be had to' the value of the assets, real and personal,

movable and immovable, and to the liabilities of the company at the date as of which such value is to be determined. In no case shall the value of the stock be fixed at an amount exceeding the par value of such stock.
9.	An incorporated company may include as part of its capital, its actual, unimpaired reserve, rest or accumulated profits.
2. The minister may determine the amount of the capital of any corporated company issuing stock after the fifteenth day of February, one thousand nine hundred and sixteen, and if, after the said fifteenth day of February, one thousand nine hundred and sixteen, the capital stock of any incorporated company is increased or additional stock is issued, or if the stock is in any way changed or re-organized in such a manner as to increase the amount of the capital, the minister may decide whether or not it is fair and proper to include such increase or any part thereof when determining the capital of such company, and the decision of the minister shall be final and conclusive.
9a. That the capital employed in the business of any person other than an incorporated company shall be taken to be the fair value of all assets, real and personal, movable and immovable, used in connection with such business.
2.	So far as the capital consists of assets being debts due to the business the value shall be the nominal amount of those debts, except bad debts proved to be such to the satisfaction of the minister; and
3.	Accumulated profits employed in the business shall also be deemed capital.
4.	Any borrowed money or debts borrowed or incurred in connection with the business shall be deducted in computing the amount of capital for the purposes of this section.


Wilfrid Laurier: I understood from some of the remarks of my hon. friend that there was to be an appeal from the decision of the Minister of Finance. There is no provision in the resolutions concerning this appeal.


William Thomas White: My right hon.
friend will understand that a Bill which contains all the machinery for the administration of an Act of this kind is necessarily _ very much more comprehensive than a resolution. The resolutions are declaratory of the principles and exhibit the leading features of the Bill. The machinery is provided in the Act, which of course will be brought down and discussed on its second reading, and in committee; and in this connection, just to show how far the English practice has gone, I may say that the resolution upon which the Right Hon. Mr. Lloyd George founded his pension legislation was as follows:
That it is expedient to provide for old-age pensions, and to authorize the payment, out of moneys to be provided by Parliament, of any expenses incurred for that purpose and connected therewith.
I quote that only to show that the resolutions are not on all fours with the Bill, but of course they should not be inconsistent with the Bill.
['Sir Thomas White.]


Wilfrid Laurier: So far so good. Another question: My right hon. friend said that in the case of mining companies the minister would be allowed to make a deduction upon the amount the companies are assessed. Will provision be made in the Bill authorizing the minister to make that deduction, and will any limitation be set?


William Thomas White: I gave that matter very careful consideration, and finally came to the conclusion that it would be unwise to fix any limitation, and I will tell my right hon. friend why. In the legislation of the United States respecting mining companies, there is a limitation beyond which an allowance cannot be made. An allowance may be made for exhaustion of a mine, but the allowance^ must not exceed 5 per cent, I think it is, of the output of the mine. I regard it inexpedient to fix a limitation for this reason. Mines are of different character. You may have a coal mine that will last for generations, and silver and gold mines which will last for varying periods. You cannot lay down any hard and fast rule in regard to all mines. It would seem to me that the facts in connection with each particular mine should be taken into consideration at the time the assessment is made; such facts,, for instance, as the district in which the mine is, the condition of the mine, etc., and then try and reach a just conclusion as to-how much should be allowed as capital. My right hon. friend might properly observe that that leaves a great deal to discretion, and I agree that it does. I think it advisable in all legislation, whether taxation or otherwise, that the law should be clear in so far as it is possible to make it clear, and that as little room as possible should be left for the exercise of discretion; but in all legislation, and especially in taxation legislation, a certain amount of discretion is necessary in the administration of the Act.
I do not mean a discretion which would favour one and do an injustice to another; but a certain amount of discretion must be exercised by the officials who carry out the Act. They may say: In this particular mine or industry we estimate that an allowance of such and such per cent should be made for exhaustion of capital. }t might be better to deal with this matter-and I have given this some consideration-by regulations of the Governor in Council, and I shall be very glad to consider any such suggestions when we are in committee again, and in the meantime my hon. friends may think the matter over with a view to offering

suggestions that they think would improve the Bill.


William Findlay Maclean: The minister is, in fact, proposing a visitation upon certain citizens of this country. Is he going to begin by making up a visiting list, and will that list be. made public, so that the people may know whether any who should be on that list have been left off? The public will want to know who comes within the purview of the Act.


William Thomas White: There is no doubt
that if Parliament desires information with [DOT] regard to the assessment that is made upon parties liable to taxation under this Act, such information should be laid on the Table of the House, but if any confidential information should be received I consider that it should not be mac(e public. It would seem to me only proper that this House, having authorized this taxation, should, if it so desires, see the results of it.


John Howard Sinclair: Has the minister considered the case of holding companies? I have in mind a company, for instance, which does not do any business at all itself, but holds stock in other companies which do carry on business. These latter companies will be taxed under these proposals. What I want to know is whether the holding company will also be taxed? Has the minister guarded against double taxation in cases of this kind?


William Thomas White: That point is guarded against, in the amendments of which I have given notice. If some pro^ vision were not made great hardship would be done in the case, for instance, of some English companies which hold almost a like amount of stock of Canadian companies. These companies are already heavily taxed in England, and provision has been made against doing an injustice in cases of this kind.
Progress reported.



SUPPLY.

[Stage Direction]
The House in Committee of Supply, Mr. Rhodes in the Chair.
Militia and Defence-allowances active service, $100,000.
['Then the minister is rebuking the hon. member for South Ontario (Mr. Smith).\nProgress reported.\nOn motion of Sir Sam Hughes, the House adjourned at 11.43 p.m.\nFriday, March 3, 1916.']
Samuel Hughes: I understand that the right hon. leader of the Government and the right hon. leader of the Opposition have come to an agree-men whereby I am privileged to go on with
my Estimates this afternoon, and I wish to thank both right hon. gentlemen for their courtesy in arranging this matter.
I have been listening for some little time to the discussion of matters bearing on business and finance, which is something we are not accustomed to do in the Department of Militia and Defence. There we do not listen; we practise; our thoughts turn more to the practical end of things. The last time I had the opportunity of listening to a financial discussion I heard a speech from the lips of that distinguished soldier, General Joffre, the great leader of the French soldiers who have acquitted themselves so gloriously in the recent fighting. On that occasion General Joffre, a practical business man as well as a brilliant soldier, pointed out the desirability of union- between the French and British peoples, not only in the fighting, but in the financing of this great war, and he took the liberty of suggesting that it could be done by floating an Anglo-French loan in the United States, and he also suggested the possibility of Canada doing something along the same lines in order to- carry on the great struggle in which we are now engaged.
Before entering into details I should like to give a brief resume of the work of my department. I have not burdened the House much with elaborate explanations during the last three years when putting through the Militia Estimates, and I take this opportunity to thank the House for the confidence it has shown in the department. We are pleased to have all necessary inquiries made, and I am satisfied that the House will be pleased with the information it receives. The task in which we are now engaged is one that is second to none in the history of Canada from a business or financial point of view. Three great undertakings have been carried through in the Dominion. One was the Canadian Pacific railway, another t'be National Transcontinental railway, but these pale into insignificance compared with the magnitude of the financial operations connected with this great war. Canada was a peaceful nation trying to build up homes for her people, and to promote industries for their benefit. In connection with the expenditures on this war, the Government have had many more complicated problems to handle than had the Canadian Pacific railway or the National Transcontinental railway. These undertakings occupied years, and those engaged in them had ample time for elaborate preparations, with large staffs



them all. In 1914, we took steps to have fuses manufactured in Canada. Every firm that any one could even dream of as being likely to indulge in the manufacture of these commodities was approached, and not one firm in Canada could be induced by any offer of assistance to go into the manufacture of these fuses. Any one could see that fuses would be needed. Later on, an order came to the Shell Committee from the British Government for 4,000,000 fuses. I had nothing to do with this-as I have had nothing to do with the Shell Committee- other than to ask the same gentleman to make sure that the lowest possible prices were obtained. I may say that I knew that the raw material for these fuses-time fuses -cost, before the war, $1.90, which included 24 cents royalty to'the Krupp firm. This is the same fuse that we are making to-day. I realized that under the conditions prices would be almost sure to double, if not more, but still I thought that they should be obtained at that price. Imagine our surprise when Col. Bertram told me that they were asking $6 apiece for these fuses. I sent for Col. Allison and said to him that this price was absurd, that we should get them for easily half that, and so fire two shots instead of one at these gentlemen who are seeking to overthrow the liberties of the British Empire and of the French nation. Col. Allison brought the price down to $5.10; later, to $4.90, which is the lowest price for which I have heard of any company in the United States, the Morgans or any other, making fuses for the British Government. Later, Col. Allison brought the price down to $4.50, and, by still further organization, to $4.25. Contracts were made at this price of $4.25 for these time fuses. But, owing at least in part to the fact that a number of firms in the United States had been blown up, and there was more or less of the "German peril" idea abroad, they refused to take the contract, and it remained at $4.50. Thus there was a saving of 40 cents on each fuse, or a total saving to the British Government of $1,600,000 in that one deal alone.
Then the president of the Shell Committee informed us that a rush order had come in for No. 100 fuse for the high explosive shell. This is not a time fuse. All that we could ascertain about it was that it was being made in Great Britain for $3.75. A contract was let in the United States at $4

and I may say that Colonel Allison never heard of that contract until it had been let. Subsequently, a month later, a contract was let at $3.50, with the price of $4 to a firm
	,
in Canada, who, I believe, got their fuses largely made in the United States.
Speaking of these matters, I received thi3 morning from Colonel Skinner, head of the Colt's Patent Fire Arms Manufacturing Company of Hartford, Conn., the following:
28th February, 1916. To Major-General Sir Sam Hughes:
Dear General Hughes,

At the suggestion of Mr. Archie MacFarlane, the Canadian representative for the Colt's Company, I am sending you my affidavit covering details of sales Of machine guns and pistols to your Government at the beginning of the war and since. I have tried to cover the points named by Mr. MacFarlane, and trust that I have done so in a satisfactory manner.
Sincerely yours,
Wm. C. Skinner.
I,	William C. Skinner, of Hartford, Connecticut, chairman of the Board of Directors of the Colt's Patent Fire Arms Manufacturing Company, being duly sworn, do depose and say:
1.	That on account of personal friendship between Major General the Honourable Sir Sam Hughes- and myself, the Colt's Patent Fire Arms Manufacturing Company has given preference to Canada in regard to the execution of orders for machine guns and pistols, and particularly in the matter of giving the Government of Canada options for the purchase of machine guns, such options extending over a much greater length of time than the company has accorded to other governments.
2.	That on account of the promptitude of the Department of Militia of Canada in placing its first order for machine guns after the outbreak of war it was granted a price of $600, which was the price for similar guns and equipment to the United States government, and no sales of machine guns of similar type and equipment have been made to any other foreign government since the outbreak of war except at a higher price.
3.	That the price of the said machine guns and equipment as quoted to the Canadian Government was later advanced from $600 to $650, such increase being due to the greatly increased cost of labour and materials, and this advance in price applied to all other sales made by the company to other nations. A number of the sales made to other nations were for much larger quantities than were covered by orders from the Canadian Government.
4.	That the price charged the Canadian Government for automatic pistols, Cal. '45, namely $18.50, was the same price at which the company has sold to ^11 other governments since the outbreak of war with the exception of the Government of the United States, for which Government the pistol was expressly designed and with which Government the company has a special contract.
5.	That nothing was added to the selling price of machine guns, pistols or revolvers sold to the Canadian Government for commission or selling expenses and that the Canadian Government could not have obtained these these machine guns, pistols and revolvers from any other source at lower prices than those paid by it to the company.
William C. Skinner.

Sworn and acknowledged before me at the city of Hartford, Conn., this 28th day of February, 1916,
Arthur U. Ulrich,
'	Notary Public.
I wish to enter into the details of these matters as fully as possible. Another question which has arisen, and which has been discussed very much, is that concerning the Canadian trench shovel. This shovel was invented at the Swiss manoeuvres in 191213. It was realized in some quarters when this war broke out that it would Jbe a trench and shield war. I may recall that when war was declared I drew attention to the fact that the war was going to be a trench war, and that, at the Prime Minister's request, I sent a cablegram across the water dealing with this aspect of the matter. It was realized at the outbreak of the war that no troops could possibly advance against machine guns and rifles; and during the course of the fighting it has been proved over and over again that this cannot be done. It cannot be done and will not be done, unless at the conclusion of the war auxiliary means of covering the advance are provided. The shovel to which I have refered has since formed the model for the trench and shield shovels, some for one, . some for two, and some for three men, used by the French, Prussians and British in trench work. Inquiry was made from the United States and British firms as to the prices at which these shovels could be manufactured, but the prices were all too high. The lowest price I got at first was between $4 and $5; the highest price was $6. After a number of experiments had been carried out, the Midvale Company evolved a process of making them more cheaply, and they came down in their price to $1.35. The Midvale Company, in order to cover themselves legally in the premises, asked the inventor and the minister if there was any royalty; and the reply in each case distinctly was that there was no royalty whatever. The Russian Government offered the inventor 5 cents a shovel on 1,000,000 shovels, but the offer was declined. The question of delivery arose. The shovels had to be shipped to Col. Allison, or to some one named by him,, by whom the^ were transferred to this side of the line at no cost to the Canadian Government. When the first contingent sailed the straps and fastenings were not ready, and these shovels were left in England. They were not the only things that were left in England at that time. Fifty-one motor trucks were left
there, as well as wagons, harness, saddles, water-carts, boots, field kitchens and valise equipment. When the second division went across, I put my foot down. Our goods had stood the wear and tear of training in England, and I could not see why they should not stand similar conditions in France. We took steps, therefore, to secure as far as possible- the use of our own materials at the front.
The board which was subsequently requested to look into this matter reported that the Canadian supplies were thoroughly serviceable.
Another matter which has been exercising public attention to a considerable degree is that of the Ross rifle. I shall not go into the history of this matter, for it has been gone over again and again in days gone by. Suffice it to say that the Lee-Enfield was not a success in South Africa. The Ross rifle, having a straight, pull, had commended itself to many; trade-rivalry sprung up; opposition came from people who opposed the spending of any-money on rifles, and, for this and other-reasons, the Canadian rifle was bitterly opposed. The Mark 3 Ross rifle is an excellent weapon; it has the same calibre as the British rifle, and takes the same ammunition. The fact that the chamber-not the groove or the barrel-of the Ross rifle was two-thousandths of an inch smaller than the chamber of the Lee-Enfield was claimed by some to be the cause of the jamming of the cartridge in the barrel. The reason was this: The Canadian-proved rifle is the same as the British-proved rifle. The steel elastic limit of the British rifle is only 48,000 lbs. to the square inch, while that of the Ross is 76,000 lbs. With the Lee-Enfield a proof charge of 50,000 pounds caused the chamber of the rifle to be raised .462 instead of .460. However, the Canadian rifle has been reamed out and enlarged to .464, and, as the British rifle has been similarly treated, the two rifles are now the same size. The difference of two-thousandths of an inch made it more practicable for both rifles to take the defective cartridges which were found all through the. service. These rifles were reamed out because different brands of ammunition issued by the British Government were found to be defective. As they contained: brass, and were very soft, they would stick in the gun when they were fired. Frequent tests have been made with this ammunition, and in every instance the Canadian rifle has gone more rounds than the;

Lee-Enfield before jamming. I may mention that that bad ammunition was all withdrawn from the lines, and no trouble has since been experienced. No charge of jamming in either rifle has been made for many a day.


An hon. MEMBER:: Where is Canadian ammunition made?


Samuel Hughes: At the city of Quebec; also at points this side of Montreal.


Rodolphe Lemieux: Is there any truth in the rumour that it is the intention to transfer the ammunition factory from Quebec to Lindsay?


Samuel Hughes: The factory at
.Quebec will remain there.


Mr. MACDONALD:: Do I understand the hon. minister to say that the Ross rifle has given absolute satisfaction?


Samuel Hughes: I will make that
clear before I get through; if I do not do so, I shall be glad if my hon. friend will repeat the question. I shall not go into the details of the arguments advanced by those who have opposed the Ross, rifle, but I wish to call attention to a strange incident that occurred at the time of the battle of St. Julien. It having been found that a number of the rifles were jamming, ten questions were circulated among the Canadians, as follows:
1.	Do you find the Lee-Enfleld better on account of its being lighter?
2.	Do you find the Lee-Enfield to be handier on account of its shortness?
3.	Do you find that the bolt in the Lee-Enfield does not jam as .much as in the Ross?
4.	Is the aim not quicker with the Lee-Enfield owing to the sights?
5.	Do not the heavy lugs guarding the foresight on the Lee-Enfield give an approximate aim at night which the ring on the Ross does not?
6.	Does not the magazine of the Lee-Enfleld hold ten cartridges while the Ross holds only five?
So far as that last question is concerned, I may say that every rifle in the world, the Lee-Enfleld included, has five cartridges in the magazine. The next questions are:
7.	Is it not true that the magazine of the Lee-Enfield allows for cleaning, while that of the Ross does not?
8.	Does not the charger clip guide on the Ross allow too much play, making loading difficult?
I may say that not one of the suggestions made in these questions is justified. The next question is:
' 9. Does not the bayonet on the Ross work loose in rapid firing?
fSir Sam Hughes.]	.
The same may be true of any rifle. The last question is:	.
10. Is not the bayonet too short and thick?
This question I shall take up later. These ten questions were circulated in the Canadian division just before the battle of Ypres. If they were not circulated by some person in the hope of causing the Ross rifle to be distrusted, I should like to know what they were circulated for. The fact stands out that the Canadian forces, armed with Canadian rifles, held at St. Julien as no troops ever held before in the history of the world. There was some bad ammunition, and undoubtedly some of the rifles did jam, just as the British rifles jammed. Owing to the jamming of their Lee-Enfields, two British regiments were forced to retire after firing scarcely a shot. They had this bad ammunition, and their rifles jammed. The Durhams and Yorks, two of the finest regiments in the British service, were fighting with rifles that were useless, owing to the condition of the ammunition, and were forced to retire at various points, just as the other regiments were forced to retire at various points, not because of the men, but because of the bad ammunition that was served out to them.
,,At Festubert the Canadian Division, armed with the Ross rifle and fair ammunition, met with grand success, advancing 21 miles, and it was the only advance made along the whole line. The troops armed with the Lee-Enfleld made no advance, and that is charged up to bad ammunition. At Givenchy, our troops weTe armed with the Lee-Enfield, and, as is well known, we did not succeed in making an advance there on account of the bad ammunition. With regard to the bayonet it is now giving general satisfaction. I have this report here from Colonel Helmer on the bayonet: Memorandum re Bayonets, Ross Rifle.
1.	The Ross rifle bayonet was adopted with the idea of furnishing a combined tool and weapon ; being of the knife pattern and strongly constructed, it fulfils both requirements.
2.	No criticisms have been received from overseas regarding this bayonet, except that it is too short; but it must not be forgotten that the fighting length of the Ross rifle and bayonet
1 combined is equal to the Lee-Enfield and American rifles, i.e., long rifle, short bayonet, short rifle, long bayonet.
3.	Extremely long bayonets such as the French, Russian, and German, are inconvenient to carry, and for penetrating purposes none of them is superior to the Ross rifle except the French, which is of the stiletto type but useless for other purposes.
4.	Long bayonets, as compared with short, are.a decided disadvantage in a fight, in that they are less easily carried. In addition if a man " gets home " with a long bayonet, the wea-

pon is likely to go clean through the body and protrude, making extraction difficult and placing the man, who has momentarily succeeded, at the mercy of any one who attacks him. " A short quick jab and get clear " is the safest rule in bayonet fighting, and this is difficult with a long bayonet and rifle.
5.	The honourable the minister has given instructions that the bayonets for overseas are to be ground so as to provide a fine sharp point. It is understood that these instructions are now being carried out at the factory and inspection branch. This will eliminate any reasonable ground for criticism.
R. A. Helmer, Colonel,
Director of Musketry.
The bayonet was designed a number of years ago under the direction of my predecessor. We call it the Lake bayonet, because it was designed by General Lake, one of the best soldiers in the British Empire, and who is now in Mesopotamia. The Committee on Small Arms assisted General Lake in designing this bayonet. The one objection I had' to this bayonet was that it had a bulge at the point, but we have now had the bulge removed, and all the soldiers of the Canadian Division think that it is as perfect a weapon as there is in the world. To show what it can do, I need only mention that at St. Julien 2,000 Canadians entered a wood one night against 7,000 Germans, and only 1,000 Germans left the wood alive.


Edward Mortimer Macdonald: What is the present status of the Ross Rifle? Is it popular with the soldiers at the front?


Samuel Hughes: All reports that 1
have received are to the effect that it is giving splendid satisfaction. Only a short time ago, a gentleman came to me with a letter from his son at the front, saying what a splendid weapon it was. The Ross rifle, in fact, is such a splendid success that the Canadian soldier has to sleep on it or the British soldier would steal it from him. Now that the bad cartridges have been eliminated, there is no trouble with either of the rifles being used at the front.


Rodolphe Lemieux: Then the statement in the Canadian Courier last year that the Ross rifles were discarded by our boys is untrue?


Samuel Hughes: The- rifles were not discarded. As the House will understand, a number of our rifles were lost at St. Julien, and the first division were then given the British rifle. I do not know whether the first division have yet received the new weapon we are making, but as soon as the rifles are made the whole Canadian
army will be armed with the Ross rifles. At the . present time all our troops except the first division are using the Ross.
In regard to medical examiners, I might point out that we have now a new system. .Under the old system we found that recruiting was greatly embarrassed by reason of the fact that there was only one examiner in each district. We Lave altered that, and now the officer in command can appoint an examiner in any centre to examine recruits. The examiner is given fifty cents for each recruit examined. This new system is more economical, and much more convenient to the boys.


Mr. COPP:: When did this new arrangement go into effect?


Samuel Hughes: About a month ago.


Mr. CARVELL:: Examiners only get fifty cents a man?


Samuel Hughes: That is all they ask.


Frank Broadstreet Carvell: If all the minister's expenses were as economical as that we should have little to complain about.


Samuel Hughes: I think we are enlisting the sympathy of the medical men. They have done splendid work, not only the military examiners, but civilian doctors too. I understand from my deputy that fifty cents per man is all they wish to take. They want to deal fairly and squarely with the country.


Frank Broadstreet Carvell: What was the previous system of medical inspection?
- Sir SAM HUGHES: The medical officer attached to each regiment would go all over his district examining recruits. It took the examiner fin my county about five weeks to cover his district.


Frank Broadstreet Carvell: How was he paid under the old system?


Samuel Hughes: He got his regular pay, and travelling expenses.


Rodolphe Lemieux: Has the regulation in regard to height been altered?


Samuel Hughes: We still have the old regulation. I may say that we are raising a couple of bantam regiments.


Mr. TURRIFF:: It was said that at Kingston last year there were a number of soldiers in the camp who had been passed by doetors not connected with the militia. After they had been in the camp for a considerable length of time, these men were

re-examined by the military .doctor, and some of them rejected. I understand that these outside doctors got $2 a piece for every recruit they accepted. Is there any truth in this report?


Samuel Hughes: I think there is
more or less truth in the statement of my hon. friend. That is partly why we have adopted this new system. It will prevent anything of that kind happening again, and will expedite the work generally.
With regard to recruiting officers. Last year, when I was out of the country-I am not shirking any responsibility in this matter, but am just mentioning that it was done when I was in England-recruiting officers were appointed all over the country, whether military men or not. In many instances these men were excellent officers, but in other cases they were absolutely useless, and yet were kept on pay. In the month of November last we adopted a new system of recruiting. We issued the order that all these officers must attach themselves to an overseas battalion or retire, and most of them have since undertaken overseas service. We have an officer supervising the whole work, with headquarters here at Ottawa.	.
With regard to the billeting of troops, I am sure that our new system of billeting the boys in the small centres has met with general approval. The tendency hitherto has been to keep these troops in the larger centres, and that of course did nothing towards creating any local, spirit. Under our new system there is hardly a county in Canada to-day that has not soldiers billeted all over the district. I am pleased to learn from both sides of the House, and from men of all shades of politics, that our new system of billeting is giving satisfaction. Unfortunately, one or two officers on their own responsibility undertook to order the men into larger centres. This was done without the knowledge of headquarters, and as soon as we found out we promptly stopped it.
Schools of instruction had been opened in every division, and also in cities such as Ottawa, for example. Recently, a number of members on both sides of this House, animated with the laudable desire to acquire a knowledge of drill so that they would be prepared in case of necessity, desired to have a school of instruction open-' ed for their benefit at Ottawa. Some of these gentlemen were men up in years, business men not accustomed to getting up
fMr. Turriff.]
early in the morning, such as my venerable friend from Souris (Mr. Schaffner); my hon. friend from Moosejaw (Mr. Knowles) and my hon. friend from Missisquoi (Mr. Kay), were also in the class. I believe they all managed to impress the instructor so favourably that he is giving them all a certificate of some kind or another; I do not know just what the details are. I am sure that there is not a man of them who, altogether apart from the war, does not regret that he did not start training when he was a boy, just for the benefit to be got out of it. It makes them better men.	.
There is another matter to which I desire to draw attention, and that is the question of promotion. There are three forces, the forces in Canada, the forces in England, and the forces at the front. It goes without saying that the heart of every good fellow in the country is with the boys in the firing line. The soldiers in England have no claim to more favourable consideration than the soldiers in Canada; if any favours arq to be given, they should go to the boys in the firing line. We had not a definite system until recently. No one ever dreamed that the war was going to last so long, otherwise we would have adjusted matters earlier. But we- have now got the matter on a proper footing, and the boys at the front will no longer have reason to complain in regard to lads who were their juniors in service when they left Canada getting priority in any company or regiment. In other words, the first consideration in the matter of promotion will be for the boys in the firing line. We will regard the forces in England and the forces in Canada as on the same footing I can see no reason why a man training at Shorncliffe should be given consideration in preference to the boys in the camps in Canada. I believe that that is a course which will meet with universal approval. As the House knows, promotions are made on the recommendation of the commanding officer of each regiment.
I might add that the same holds good in regard to honours for heroic conduct in action; we do not interfere in any sense whatever, though, of course we rejoice when we hear of a marrwinning meritorious recognition.
All the little difficulties in connection with the Valcartier camp ground are being satisfactorily settled. I will now present to the House a return of 29th February, 1916, showing the number of troops enrolled in the Dominion of Canada. In No.
1 district, which includes western Ontario,
MATJOTT 9 I91fi
there are 23,560; in No. 2 district (Toronto), 60,360; in No. 3 district (eastern Ontario), 27,856; making a total for the province of Ontario of 110,676, and nearly all are in readiness for the front.
In No. 4 district (Montreal), there are 22,926 soldiers; in No. 5 district (Quebec), 5,212, a total for the province of Quebec of 28,138.
In No. 6 district, which includes the Maritime Provinces, there are 24,198 soldiers enrolled-I have not the total for each province separately. In No. 10 district (Manitoba and Saskatchewan), there are 50,710; in No. 11 district (British Columbia), 24,368; in No. 13 district (Alberta), 24,424; the total for the four western provinces being 100,002.
Exclusive of officers, therefore, the total number of soldiers enrolled and on duty is 263,114. The number of officers is 10,468, which brings the total to about 275,000 troops, ready for overseas service.
Reference has been made to patronage. Every one knows that so far as the Department of Militia is concerned, the patronage list practically vanished at the outbreak of the war. If any grocer in the riding of any hon. member happens to get an extra bit of patronage, I do not know anything about it; we have not time to bother with such small things.


Edward Mortimer Macdonald: It is all very well
for the minister to say that there is no patronage list, but it is the case that when supplies are needed for the troops it is the friends of the Government who get the contracts. If the hon. minister is not responsible, who is?


Samuel Hughes: In my own town, which is in the district under the officer commanding at Kingston-the district of my hon. friend is under the officer commanding at Halifax-two or three honest Grits are-I will not say enriching themselves-but getting a fair share of contracts.


Frank Broadstreet Carvell: Will the minister tell us how many Grits are getting a share in the town from which I come?


Samuel Hughes: Are there any there?


Frank Broadstreet Carvell: I had a majority of 79 at the last election, and I will double it at the next election. Not a single Liberal has got a dollar's worth from the Militia Department, and at present we have 500 soldiers there.


Samuel Hughes: I am glad there are so many soldiers, but I say, and I challenge contradiction, that we have not interfered. We have no time to look after the peddling of groceries.


Edward Mortimer Macdonald: There' is no use in my hon. friend saying that there is no patronage list. If the men who have charge of the distribution of these matters have a patronage list, then my hon. friend is not stating a fact. The minister can settle the question by giving directions to carry out what he says is his view.


Samuel Hughes: My hon. friend
knows that so far as headquarters is concerned, and I challenge contradiction, we have not a patronage list in connection with our contracts. I do not know anything about these local affairs; it is the first time that my attention has been called to them. I have had complaints over and over again from Conservative members of Parliament who demanded my scalp because I had let Grits get contracts in various centres. The Prime Minister has been bombarded, and I have been bombarded with letters from Tory friends, because contracts have gone to Grits; I have had ten complaints of that character for the one I have had from Grits. But I have not paid any attention to them. They cannot all get contracts, and complaints about groceries are not woTth attention.


Edward Mortimer Macdonald: Last year I happened to be a member of a committee that investigated certain matters connected with the Militia Department and an officer came before that committee and distinctly swore 'that there was a patronage list in the department. That statement was made under oath.


Samuel Hughes: We had a patronage list in the department before the war broke out, but so far as I know, after the war broke out, that patronage list received no consideration. The cases of a number of gentlemen, who had obtained contracts were reported to me, and I found that two of the firms, about which there was the most talk, were Grit firms, and representations were made that they should not get contracts. I refused to entertain any such objections.


Edward Mortimer Macdonald: The statement made before that committee by an officer of the department was that at that time, last spring, when the war was on, there was,

and had been for months, a patronage list in the department. The question is, is there, or is there not, a patronage list in the department? My hon. friend says there is not, which indicates, I assume, that the minister thinks that the proper way to do business is to dispense with such a list. Has there been a change since last year; has the patronage list been abolished since last March?


Samuel Hughes: I know nothing about a patronage list last year. I know that there was a patronage list before the campaign came on, and I am not sure that I was very much enamoured of it. There has been no patronage list in connection with this war in the Militia Department-as far as I am concerned,, or as far as any officer with whom I am in touch is concerned.


Frank Broadstreet Carvell: The minister evidently could not have heard what took place in the Public Accounts Committee yesterday morning, when Mr. Brown, the purchasing agent of the department, stated there .was a patronage list, and that it had been made up after 1911. We asked him if he could produce it, and he said he could. We expect to have it before the committee tomorrow morning. He told us that down to last May he had bought from that patronage list and that since May he has been buying under the instructions, of the War Purchasing Commission. They send instructions to him, and when they want him to buy a certain article they tell him how to do it. Sometimes he buys from his own patronage list and sometimes he buys from a list of names that the War Purchasing Commission has given to him.


Samuel Hughes: That is all under the War Purchasing Commission; I have nothing to do with that.


Frank Broadstreet Carvell: But it is done by the minister's department, and, his own purchasing officer swore to it yesterday.


Samuel Hughes: Only recently the hon. member, for Ottawa berated me very severely because certain Liberals were getting contracts from my department.


Frank Broadstreet Carvell: You could not satisfy the member for Ottawa.


Samuel Hughes: Let me say here that ever since this war began I have refused to allow patronage or politics to influence me in any shape, manner, or form, in regard to the appointment of men to office,
[Mr. Macdonald.!
or the awarding of contracts. Unfortunately, some of my Conservative friends say -that I have appointed too many Liberals. As long as they are good men it makes nodifference what their politics may be, but once they show that they are not out they go, whether they are Liberals or Conservatives. As far as the peddling arohnd of #200 or #300 worth of lumber or potatoes is concerned^ I have not given any attention to that, and I do not intend to. If I cannot trust my officers to look after things-of that kind they are not fit for their jobs.
Mr. W. M. 1IARTIN: Does the hon gentleman know anything about a patronage list in the city of Regina?


Samuel Hughes: I do not know anything about it. How could you expect me to keep such things as that in my head?


Mr. MARTIN:: I know that in the city I reside in no person but a Conservative can serve a meal to a soldier, and I am told that no person but a Conservative can shave-a soldier. The minister knows the trouble that developed in Regina some months ago in respect to the patronage system that existed there.	[DOT]


Samuel Hughes: Who found it out?


William Melville Martin: I do not know whether the-minister found it out or not, but there is a great deal more, I believe, that might be-told and that the minister does not know.
If the minister does not want to go into it now we might take it up at some other time.


Samuel Hughes: I would like to get through before six o'clock. I may say that we have carried out our ideas with regard to the development of our citizen soldiers. There is a tendency in many lands to place-the citizen soldier in a subordinate position to that of the regular soldier. My idea always has been that the citizen soldier, properly trained, is superior to the man who-is not properly trained, and this country has exemplified that fact. We have followed certain original ideals and ideas, and we have tried to hold a firm hand. Our decisions have to be rendered rapidly, because there are questions coming up every day, and we have always tried to be fair. I think I am justified in saying that every one of our decisions, and actions, has met with the approval of the men against whom they necessarily had to be directed at the time. There are only one or two instances in which our decisions have met with opposition. We have necessarily had to offend some contractors who wanted favours at-the hands of the department and some offi-

cers who were seeking places which the officers of my department thought they were not entitled to. There are certain other people who have raised disturbances but they are comparatively few in number, and, taking it all in all, I cannot but express my appreciation of the splendid assistance which the people of this country have given us in the strenuous work which the war has. imposed upon us.
I ;want to express my appreciation of the treatment accorded me on this side of the House by my Conservative friends. If any of my Conservative friends asked me to do anything which it was not possible to do, or to have done in their ridings which could not be done, when I explained the case to them, in every instance, I found them absolutely square and sympathetic and quick to see my difficulties. I want also to express my appreciation of the attitude of my hon. friends on the Liberal side of the House, who have been, all in all, very fair in this matter. Some of them have been more than fair and there have been, very few who have not been straight and just in their attitude towards me. I wish to express my appreciation to these gentlemen for their conduct in the premises.
At six o'clock the Committee took recess.
The ICommi|itee resumed at eight o'clock.
Militia and Defence-allowances active service, $100,000.


Frank Broadstreet Carvell: Mr. Chairman, before you go into the consideration of this item, I would like to make a few general observations with reference to the very mild and gentle speech delivered this afternoon by the Minister of Militia and Defence.^ I am a great admirer of the minister, because he has the most wonderful faculty of coming before the House of Commons, shooting off a lot of hot air, getting it into the newspapers the next morning, and getting away with it.


George Perry Graham: His organization is perfect.


Frank Broadstreet Carvell: Yes, and I think he has surpassed himself this afternoon; he has out-Hughed Hughes and Allison put together. If I could sum up his arguments under headings, I would say that the first heading is that there have been no politics and no patronage in the conduct of the affairs of the Department of Militia and Defence since the beginning of the war in August, 1914. In fact, I do not think he discussed anything regarding his department prior to that date, and therefore I do not intend to refer to anything prior to that date myself. I want to call my hon. friend's attention to a few matters which took place about a year ago, and I am sure my hon. friend's memory can go back as far as that, because he has told us of things which have happened as far back as the outbreak of the war. He has told us that there have been no patronage and no patronage lists, and that he has bought things from Grits and Tories, from everyone who had anything to sell. Now, I wondeT what he has to say about a few of the war purchases that we investigated in the Public Accounts Committee last session.
Let us take, for instance, the purchase ol binoculars. There is in the city of Ottawa a very estimable gentleman, Mr. Birkett, whose father is a hardware merchant, and I believe a very honourable one, a man who at one tifhe-occupied a seat in this House. This young man, according to the evidence, was a clerk in his father's business, and he never saw a binocular in his life except to look through it. He would not know anything about a 6 millimetre binocular or a 10 or 12 millimetre one any more than I would. Nevertheless this young man formed himself into a company called the Ottawa Supply Company, which was put on the patronage list. This company could not purchase binoculars themselves, because they did not know how to go about it, so they went to our good friend Sam Bilsky, who is a Liberal, and who knows how to buy binoculars; they allowed him a commission of $5 apiece, and they went down to New York and bought a lot of cheap binoculars at prices ranging from $7.50 to $25 each. They brought these binoculars to Canada and handed them over to one of the boys, and the Government bought the binoculars at $10 more than the original price. There was thus a rake-off of several thousand dollars. I do not care whether you call it patronage or not, but if Birkett had not got his name on the patronage list, he would not have been able to sell binoculars to the Government.


Mr. KYTE:: The Government would not
buy from Bilsky.


Frank Broadstreet Carvell: Certainly not. Bilsky
was a Grit, and although Bilsky tried over and over again, as only gentlemen of his race know how to try, he could not get his name on the patronage list.


Samuel Hughes: If my memory serves me aright-and I think it will be found fairly accurate-it was Colonel Hurdman,

a gentleman whom I retained in my service, who made this deal, whether good, bad or indifferent, and the matter was taken up later on by Mr. Mason. The whole thing was started by Colonel Hurdman, a Lib-'eral in whom I had confidence.


Frank Broadstreet Carvell: The hon. minister need not hit back at us this evening after being so kind to us this afternoon. Colonel Hurdman is not on trial. The people of this country do not care two straws who Colonel Hurdman' is or whether he ever was in the business at all.


Samuel Hughes: Colonel Hurdman
had no list whatever; he made this deal off his own bat.


Frank Broadstreet Carvell: 
Mr. BURNHAM:: I can give that a flat denial.


Frank Broadstreet Carvell: The hon. gentleman certainly can, if he wishes.


John Hampden Burnham: So far as the county of Peterborough is concerned it is absolutely untrue.


Frank Broadstreet Carvell: The hon. gentleman will have a chance to air his views in a little while. This is a free-and-easy argument;
we are in committee, and the night is young, and all may have an opportunity of expressing their views. What I say is that from one end of Canada to the other it is nothing but politics and the patronage list. Why, down in New Brunswick the patronage committee even appoint commissioned officers up to lieutenants. If a man wants an appointment as lieutenant in the province of New Brunswick he goes to the patronage committee.


Samuel Hughes: Did that occur in the case of Major Anderson?


Frank Broadstreet Carvell: He is a major.


Samuel Hughes: Can the hon. gentleman give one solitary name in New Brunswick to establish what he says?


Frank Broadstreet Carvell: Yes.


Samuel Hughes: I would like to
hear it.


Frank Broadstreet Carvell: In Victoria and Madawaska-


Samuel Hughes: The commanding
officer at Sydney is a Liberal, and so is the commanding officer at Moncton; Colonel Borden at Halifax is a Liberal, and so is the next officer under him. Colonel Mc-Avity of St. John is a Liberal, and so is every man of them in the Maritime Provinces, except Colonel McLeod.


Frank Broadstreet Carvell: That is more hot air.
Any man who lives in New Brunswick knows that the minister has been misinformed-to put it that way-because those who want appointments must go to the patronage committee. There are Liberals in the province of New Brunswick who have commissions, but they had to go to the patronage committee. Every time the minister has referred to this matter he has spoken of Colonel McAvity and Major Anderson. They are good men-such good men that they could not get around them. But whether it is a commission to be given or an order to be placed for meat or lumber, it is all politics there from beginning to end.
The minister spent a good deal of his time in defending his own department with regard to certain matters, and I am not going into them all. He went a long way out of his way, I thought, to defend Colonel Allison. When he was making that defence there came to my mind the well-known words of Shakespeare:	" The lady doth
protest too much, methinks." One can hardly understand why it should be necessary for the minister to take half or three-

quarters of an hour of the time of Parliament in defence of Colonel Allison. If Colonel Allison is all right, why not say so and let it go at that? Let me point out to the minister one of the cruel things in this world-at least from his standpoint: he must think it a cruel thing that such an angel in disguise as Colonel John Wesley Allison should be so maligned by ordinary people. Well, my experience of life has been rather the other way. I have very seldom found the real, true, honest man of this world maligned by anybody. And when I find reports with regard to a person coming from every point of the compass, all tallying exactly and all along the same line, I naturally come to the conclusion that there is a little truth in them. Where there is so much smoke there is sure to be fire. But the minister says that Colonel Allison is an honest man-I think he said he was the only honest man he had met since the war began. At least he said he was the most honest of all the men he had met, if there can be degrees of honesty, and I presume' there can be. But, besides being the most honest man, Colonel Allison, it seems, is also the most able. Why it is evident that the minister could never have carried on this war successfully-and I want to give him all the credit that is coming to him; he has shown a lot of energy and has done some great hustling; we on this side give him credit for all that-had it not been for the great assistance he has received from Colonel Allison. Judging from what we have heard this afternoon, had it not been for this gentleman, the minister would not have succeeded in getting anywhere; there would have been no Canadian overseas force but for him. The minister tells us that Colonel Allison has saved $50,000,000 since the war began, and would not take a cent. What is the use of the Minister of Finance (Sir Thomas White) racking his brains and getting grey-headed over the question of raising money for this war, when all that is necessary is to bring on this wizard, Colonel Alliston, and let him wave his magic wand, and bring forth $50,000,000 when it is needed. Why, the minister has not treated this colleague of his right. Instead of having Colonel .Allison down there in the United States he ought to have him here, running the whole show. I am afraid, maybe, some of his colleagues would object to Colonel Allison running the show, and some of his followers also. Looking at the faces of some of the fol-' 
lowers of the Government, when the minister was extolling the virtues of his friend, I thought I noticed on some of them indications of dissent. That may have been an optical delusion, but some feeling was patent in their faces as the minister was telling of the virtues of Colonel Allison. Well, we have invited Colonel Allison to come before the Public Accounts Committee, and we will have an opportunity to judge for ourselves whether the minister's opinion of this gentleman is right or wrong, coloured or not-that is, from our standpoint, and I admit that we are very much below the plane of the ministe>-The minister endeavoured this afternoon to free Colonel Allison from any suspicion of wrong-doing. Well, the minister had better wait until a charge is made before he attempts to put up a defence. But let me call attention to something that was brought out in the Public Accounts Committee yesterday morning. A man named Nash, a tailor, I think, of Morrisburg, said that in the early days of the war he was requested by Mr. Chambers who, I have learned, is a very active gentleman in the Conservative organization of the constituency that I have mentioned, to give Colonel Morgan some assistance in the tailoring line. He consented, and, with that end in view, went to Colonel Allison's office, where he met Colonel Morgan and two or three merchants, from Redfield, New Jersey. These gentlemen, one of whom was a Mr. Eismer, had twenty or twenty-five samples of all kinds of army clothing-caps, greatcoats, tunics, trousers, knickerbockers, handkerchiefs, shirts, shoes, blankets. Upon these samples was stamped the firm name and the price. Evidently the gentlemen who came here from New Jersey were not trying to deceive anybody, for there were the. samples, with the name of the firm and the price of the goods stamped upon them. But the Conservatives of Morrisburg employed this tailor to go to Colonel Allison's office and change these labels. He cut the labels off, and put on other labels from which he had removed his own name, simply leaving the label blank-" white linen," he called them. The number and the price, I think, appeared on the label. Mr. Nash does not know exactly what was done, but he heard them talking about the price that was going on one of these labels. The price that was on the manufacturer's label was $3.50-this was a pair of trousers-and he says that they were talking about putting on a price something over $4. When we asked him why they were removing these labels, he

said they told him that they did not want the Germans to know from whom the goods had been bought. A little later in the investigation he said that these were samples, and that he heard them direct the stenographer to address them to Sir Sam Hughes at Ottawa. I asked him if he was afraid that the Germans might capture some of the British soldiers who were wearing these trousers, and subsequently trace their purchase back to United States manufacturers. He said he hardly thought so, because these goods were only samples. Then I asked him if he thought the price would scare the Germans, but he had entirely receded from the German theory.
' These samples were going to the Minister of Militia; it was supposed that from them the Government of Canada would purchase goods. The manufacturer was perfectly willing to leave the price upon the goods, so that everybody should see it. In Col. Allison's office, by Col. Morgan, his associate and friend, these tags were cut off and other tags put on upon which other prices were placed. We have not got any further than that; I do not know whether they succeeded in getting orders.


Mr. MIDDLEBRO:: The hon. gentleman is in error when he says that other prices were placed upon the labels.


Frank Broadstreet Carvell: The witness swore that he heard them talking about putting another price upon this particular pair of trousers-more than $4.


William Sora Middlebro: The hon. gentleman just now said that other prices were placed on these tags.


Frank Broadstreet Carvell: Certainly.


William Sora Middlebro: That is not so.


Frank Broadstreet Carvell: I will admit that the Ghairman of the Public Accounts Commit-dee, by his ingenuity, did everything he could to keep that evidence from coming out. But he got it, and now the public is getting it. The Chairman of the Public Accounts Committee is now seeking to draw a herring across the trail.


William Sora Middlebro: The hon. gentleman is stating what is not true.


Frank Broadstreet Carvell: That will not help
matters one particle. I tell my hon. friend Tight here that we know our rights in the Public Accounts Committee just as well as he does, and we know our rights in this committee just as well as he does. He will
not help the Estimates through by any such conduct as this.	'


William Sora Middlebro: My hon. friend said a moment ago-and Hansard will bear me out in this-that different prices were placed upon these tags.


Frank Broadstreet Carvell: Yes; and they were.


William Sora Middlebro: The evidence was
that there was a price of $3.50 on one pair of trousers, and that no other prices were put on. As my hon. friend says, the witness heard different prices mentioned.


Frank Broadstreet Carvell: Is that not a nice distinction? Is the Chairman of the Public Accounts Committee not covering himself with glory by making a statement of that kind? The Solicitor General will have to resign if my hon. friend takes his place in the hair-splitting business. With all 'the ingenuity that the Solicitor General possesses, he never could make an argument like that; he never could draw so fine a distinction as that. What do you suppose they cut these tags off for? What was the object of taking these articles into Colonel Allison's office and changing the tags? They say it was done to fool the Germans; do you think anybody in Canada is fool enough to be fooled by a reason like that? Hardly. The minister knows better; everyone of his followers around him knows better; even the Chairman of the Public Accounts Committee knows better. He knows that men do not .do things like that without a purpose, and he knows that the purpose of these men was to deceive somebody-and that somebody was the Government of Canada. Whether they succeeded or not, I do not know. We will try to find out.
The hon. minister told also about the wonderful honesty of Col. Allison in purchasing Colt revolvers and pistols. I shall not go into that to-night, for I know that there will be another opportunity of going into it more thoroughly. The hon. gentleman tries to justify the throwing away of thousands of dollars of the people's money because of something that was done in 1899 or 1900. It is the tu quoque argument over again; if somebody else steals, we have the right to steal. That is the answer that has been given to every statement which we have made on this side of the House since 1911.


Samuel Hughes: May I correct my hon. friend? I did not say that if somebody else had the right to steal, we also have the right to steal, but that if some others had

the right to put on a commission, we might have justification for putting on a commission, but we did not do it.


Frank Broadstreet Carvell: Then I will modify my assertion by using the word "commission" instead of the word "steal." The hon. gentleman says: "We did not do it." Has my hon. friend forgotten the evidence given by two reputable witnesses before Sir Charles Davidson's commission in Ottawa, one of them a representative of Mr. Birkett and the other a representative of the Ketchum Company? Two hardware firms in this city swore at the very time the minister was buying these revolvers at $18.50 that they were able to buy them at a discount of 10, 5 and 2i per cent, which brought the price down to $15.05; it was either $15.05 or $14.05. One of these firms bought one pistol, - and the other two. And Colonel Allison, who was buying them by the thousand, paid $3.50 more for his pistols than did these two firms. Does the minister tell me that if he had had Birkett buy these pistols he could not have saved the country at least one-half of the commission? I will go further. Is there a man within sound of my voice to-night, is there any man in Canada who has read the evidence, who does not believe that the Colt Revolver company paid a commission in some way or other to somebody? The vice-president of the Colt company swore that he made a present to Col. Allison, and said that it was for general business. Is there any man who believes that business is carried on in that way? Is there any man who believes that there was not a rake-off somewhere? There is something else the minister did not tell us this afternoon, when he was reading the evidence of Stone. He did not say that he was present when this trade was made.


Samuel Hughes: Stone was not present.


Frank Broadstreet Carvell: Stone said the minister was present.


Samuel Hughes: The minister made the deal; Allison had nothing to do with it.


Frank Broadstreet Carvell: He was present too.


Samuel Hughes: Yes.


Frank Broadstreet Carvell: You always find Allison around. You will find Allison around in every transaction of this kind that has taken place in the United States since the day war was declared. Of course, the minister says that he is a saint, and that
[Sir Srm Hughes.)
everything is all right. We have no proof to the contrary, but we have a lot of suspicious circumstances. As I said before, Allison can come here and we will try and get the matter straightened out.
The minister has also been able to revolutionize the price of copper in the world to-day. He says that he has bad a smelting establishment erected in Canada and that this at once brought the price down. I have not bought any copper myself in the last three or four weeks, but I am buying copper quite frequently, and I know the price has been going up and up and up. The last I bought I paid 25 cents a pound for it. But I can discuss copper with the minister a little later on. He has copper on the brain , just now, and shells, and fuses, and things of that kind. Next Tuesday we shall have the pleasure of discussing shells, and fuses, and copper, and I know the minister will be present to discuss these things with us face to face. I will therefore reserve my remarks on copper, and fuses and shells. While I am on the subject, however, I might say that when it comes to letting a $22,000,000 contract for fuses, at an average price of $4.33J, we find Colonel Allison on the job again. Wherever you find the Militia Department doing business in the United States, there you find Colonel Allison. And another gentleman is usually found with him, one by the name of Harris. Probably the minister knows something about him. He has an interest in the shell business in Ontario. Like Colonel Allison, he is a great friend of his; he is always around when fuse contracts are being let.


Alexander Kenneth Maclean: He lives in New York.


Samuel Hughes: Perhaps the hon. member for South Renfrew (Mr. Graham) could tell us something about this gentleman.


Frank Broadstreet Carvell: I know this man Harris is always around when contracts are being let.


Samuel Hughes: Is there any harm in that?


Frank Broadstreet Carvell: I don't know. He is simply Allison's friend. The minister also told us this afternoon what a wonderful saving had been made on jjiotor trucks. I want to give my hon. friend credit where credit is due. I admit that the department bought motor trucks cheaper after April, 1915, than they did before, but how much cheaper I do not know. The minister gave us certain figures this afternoon, but you

E
f
know, Mr. Chairman, the minister's memory is bad when it comes to figures. I do not mean that he would mis-state a figure, but only that his memory is bad. However, the accounts will be brought down, and I presume we shall have a chance of verifying his figures. I should also like to know what 'has* become of this wizard in buying motor trucks, Col. Thomas. The minister referred to him this afternoon. This Col. Thomas appeared before the Public Accounts Committee over a period of three or four weeks last spring. He took all the credit to himself for reducing the price of motor trucks, and gave Allison none at all. Whenever we had a spare half-hour in the committee we used to put Col. Thomas on the stand, and he would tell us how he purchased the motor trucks. Then we would go on with our business, and when work became shy again, we would put Thomas on the stand and hear the story once more. But he seems to have disappeared altogether. He has not been seen around the city since October or November last. He may have gone to the front to look after motor trucks, or he may be in the United States buying more, or spending the winter in Florida with Allison and Morgan. Will the minister tell us where he. is?


Samuel Hughes: Ool. Allison is the gentleman who first drew my attention to the plan by which the price could be reduced. He gave me the names of two, gentlemen who were experts in the business, and if, when I was speaking this afternoon, I omitted anything in this regard it was an act of omission, not of commission. I will tell the whole story. There is nothing being kept back at all. Colonel Allison got me in touch with Mr. Thomas, now Colonel Thomas-promotion comes rapidly when you do good work-and with a young gentleman by the name of Bucroft, who is the editor of some automobile journal in the United States, and one of the brightest young fellows it has been my privilege to meet. These three gentlemen thought out the plan, and I executed it. I am a little proud of that, because we saved Canada on these motor trucks the sum of $1,600,066. Thomas has since been sent over to England to consult with the British Government, and has been inspecting trucks at the front. He is returning to Canada at a very early date. His services have been recognized as very valuable both by this Government and the British Government.


Frank Broadstreet Carvell: The minister should tell him to take a little less credit to himself, and leave a little for Allison.


Samuel Hughes: He was the expert.


Frank Broadstreet Carvell: Then Allison did not
play any part at all in the saving on these motor trucks?


Samuel Hughes: Oh, yes, he did. He was the engineer of the show, Thomas was the expert, and I had the honour of being the driver.


Frank Broadstreet Carvell: There always seems to
be enough glory to go around. The minister is never shy on glory, he has a plentiful supply of it. They are all the finest chaps in the world as long as the money holds out. The minister has also referred to the Ross rifle, in practically the same terms he used a month ago. I am not here to defend or condemn the Ross rifle. I am free to admit that on many occasions in this Parliament during the last eight or ten years I have defended the policy of manufacturing rifles in Canada. I defend that policy to-day. I believe it is the proper policy, but I am surprised that in the conduct of his department, the minister has not gone further in connection with the manufacturing of war supplies in Canada than he has done. We have a big plant down in Quebec; I think my hon. friend referred to it as a blacksmith's shop. Well, it costs a lot of money to run that blacksmith's shop; the cost runs into hundreds of thousands of dollars a year; I refer to the arsenal. Is it not a most remarkable thing, Mr. Chairman, that we have been buying our war supplies, such as shrapnel shells and high explosives, though I do not believe we had any high explosives in Canada before the war comenced.


Samuel Hughes: In Canada, we have made millions of high explosive shells. The Shell Committee-


Frank Broadstreet Carvell: I know more about the Shell Committee than my hon. friend thinks I do.


George Perry Graham: There were not high explosives made before the war.


Samuel Hughes: No.


Frank Broadstreet Carvell: We will discuss the
Shell Committee next Tuesday, and probably without gloves. But to-day we are discussing the Militia Department, and the policy of manufacturing war supplies in Canada. I defended the Ross rifle propo-

sition some years ago, and I defend it today; but I want to say, in passing, that I only hope the Ross rifle is in the happy condition in which the minister claims it is. One would think, according to the description given by the minister this afternoon, that the Ross rifle was such a fine weapon that everybody in the Old Country had his eye on it, and that the soldiers had to sleep on it to keep other solders from stealing it, and substituting a Lee-Enfield, Of course I know that that was a figure of speech intended for the reporters.


Samuel Hughes: I referred to sharp shooting.


Frank Broadstreet Carvell: Let us get down to the ordinary business, of Parliament for a little while. I have met four different soldiers within the last two months-I could give their names, but I do not wish to do so- two of them were sergeants and the other two privates. They were wounded soldiers who had returned from the front, and I discussed this matter with them. By a rather singular coincidence their statements agreed. They were partly commendatory of the Ross rifle, and- partly condemnatory. They all agreed that, for sniping, all the soldiers wanted the Ross rifle because it had the peep sight, and the men who were hidden had plenty of time in winch to shoot. But they said that for action or ordinary service the men would throw away their Ross rifles for a Lee-Enfield. I give that statement to the minister and to the House. I came to the conclusion that there must be something wrong with the Ross rifle as an ordinary weapon for trench, and field warfare, but if the minister can succeed in eliminating those difficulties, or, if. he has succeeded, as he says he has, I am glad.


Samuel Hughes: I did not say there were difficulties. I stated that it had been discovered that the ammunition was at fault. The Canadian soldiers could not be expected to have confidence in their rifles when they were asked to answer those ten questions that were sent to them. The bad ammunition got mixed up with the good, and at the battle of St. Julien some of the rifles were found to be jamming. The soldiers who had not been accustomed to the Ross rifle might take it into their heads that the rifle .was at fault, but it was the fault of the ammunition. It is known now that the fault lay with the ammunition; the report of Field Marshal French showed that. The reports show that for many weeks

there has been nothing wrong except that some ammunition got mixed up again. My hon. friend *will remember that I read a letter from the inspector, a very capable officer, in which he stated that by some peculiar mischance a lot of bad ammunition got mixed up with the ammunition served out to the Canadians.


Frank Broadstreet Carvell: The minister told us on a former occasion that they had enlarged the chamber of the Ross rifle something like a two-thousandth part of an inch. Would that make any difference even if the soldiers got perfect ammunition? I am just giving the facts as I understand them. I know there has been a lot of dissatisfaction at the front, in England, and in Canada over the Ross rifle, but I sincerely hope that the minister has overcome the difficulties. If the difficulty was not with the rifle, of course the rifle cannot be blamed. I do not want to say anything here that would in any way be quoted as criticising or condemning the equipment of the Canadian army at the front.


Samuel Hughes: I know my hon. friend does not. I am sure he will agree with me that when questions like those to which I have referred were distributed among the soldiers-and they were sent there with an object, whether by an enemy or not, I do not know-the men would not have a feeling of confidence in their arm, particularly on the eve of battle.


Frank Broadstreet Carvell: I agree with that, and I think the party responsible should be severely censured. I am very glad to learn that the fault in regard to the Ross rifle is with the ammunition and not with the rifle itself. But why is it, that in the three years during which my hon. friend was minister, prior to the outbreak of war, nothing was done in the way of manufacturing shells in Canada? We had an arsenal at Quebec. The minister made a statement which I could hardly credit, but I read it over in Hansard, and found that 1 had understood him correctly. He stated that they made only 75 shells a day at the arsenal, and that 75 per cent of these shells were no good. What is wrong with the outfit at Quebec anyway?


Samuel Hughes: In the event of war taking place we felt that we would be in a better position to buy our shells, and we only made enough to meet ordinary requirements. Both our energies and our money went towards making Mark VII ammunition. The manufacture of shells was so

small that it would not count in the case of war.


Frank Broadstreet Carvell: That is the minister's explanation, and of course we must accept it, but to me it is a remarkable thing that the arsenal at Quebec, which costs, I am safe in saying, hundreds of thousands of dollars a year, was so utterly useless when the war broke out. The minister will remember that, prior to 1914, we on this side of the House called his attention on many occasions to the fact that his militia was not anything like what he said it was. We were compelled to point out that his principal business was building armouries and places of that kind; that he was not really building up the militia. While I do not want to cast any reflection on the Canadian militia, it would be very interesting now to get a return showing the number of men in the first contingent who had attended the annual drills five or six weeks prior to the time they were mobilized. However, that is a matter which we may bring up at another time.
There is one thing that must be impressed upon the minister, that musit be engraven upon his heart, and that is that if he is Minister of Militia after this war is over there will be a very different militia system in existence in Canada than that which prevailed, prior to the war. We used to listen to the bombastic speeches of the minister, in which he used to tell us about the 75,000 trained and equipped men whom he had ready to jump into the fray at a moment's notice. I think he has had cause to revise that opinion; but, fortunately, the yeomanry, the young men, the middle aged, men, and the old men of Canada, who did not belong to the militia, who were not under the special guidance of the minister, and did not know anything about his top-heavy militia department and system, jumped into the breach, and well it was that they did, because otherwise the minister would not have been able to read us the figures to-day, that will excite the pride of every Canadian, showing that there have been recruited 275,000 men in a year and a half. I do not know that the minister should take all the glory to himself. He had better distribute that glory around a bit.


Samuel Hughes: Did I not try to do it to-day?


Frank Broadstreet Carvell: Yes, I admit that he did; he was very impartial in his distribution of the glory. If he 'had been as impartial
in his distribution of business favours as he was in throwing bouquets around the House we would not be criticising him.


Samuel Hughes: I do not know how I can please my hon. friend. I was tackled by my hon. friend from Portage la Prairie (Mr. Meighen), who said: "This thing works one way altogether; no Tory in Portage la Prairie can get a contract; the Grits get them all." A 'friend from Brandon wrote to my right hon. friend the Prime Minister and myself complaining that we had given the Grits of Brandon everything, and that nothing was given to the Tories at all. I get knocked on this side, I get knocked on that side, and all I can do is to settle down and keep going ahead on an even keel.


Mr. BRADBURY:: It is the same in Selkirk.


Mr. WEBSTER:: It is the same in Brock-ville.


Frank Broadstreet Carvell: That is internicine warfare, and I am not interested in it. The minister will have to settle that matter with his followers. But, to be serious, I would say that he has not got any more knocks than he deserves.


Samuel Hughes: Prom both sides.


Frank Broadstreet Carvell: Yes, from both sides. I was very glad to hear the minister say this afternoon that he had got out of the patronage system as far as medical doctors were concerned.


Samuel Hughes: I used the wrong term this afternoon, my deputy minister informs me, in speaking of the patronage list. The local officers have a purchasing list for small things in country towns, but I do not know anything about it. There is a purchasing list, for instance, in Portage la Prairie, Brandon, Pictou and other places. This purchasing list is sent to the local divisional officers, I believe.


Frank Broadstreet Carvell: This list must be all Tory then down in New Brunswick, because no Liberal has heard anything about it.


Samuel Hughes: Anybody who has the line of goods desired can get on the list.


Frank Broadstreet Carvell: He can get on the list, but he will never be applied to, and therefore will not be enabled to sell anything. Being placed 'on the list is one thing, but being applied to and asked to sell goods is another thing. Will the minister say



that every man on the list will have a chance to supply the goods that he has to sell?


Samuel Hughes: I do not know the first thing about the list. Such things are left to the local men. In Kingston, Brandon, Portage la Prairie, Brockville, and a hundred other places they have been tearing me limb from limb because I would not give them this business. Now, my hon. friend is tearing me limb from limb the other way.


Frank Broadstreet Carvell: That is a family fight. The minister says that he has no time to bother with these small things. All right; I agree that he is a busy man, but it would not take very much of the valuable time of the minister if he ordered his deputy to send out instructions that any man who has goods to sell should be put on the list and will have the right to tender.


Samuel Hughes: That is the order now.


Frank Broadstreet Carvell: And that the lowest tender be accepted.


Samuel Hughes: That is the rule which has invariably been followed.


Frank Broadstreet Carvell: Will the minister tell us that all over Canada that policy will be followed and that he will give instructions to that effect?


Samuel Hughes: No, I cannot give instructions because I gave them long ago. Those are my instructions to the officers in various places. Not only that, but instead of placing the list pn the back door of a store, I have instructed them that the call for tenders shall be made public and that a list of the things required shall be sent to people able to supply them whether they are Liberals or Conservatives. That order has been in existence for years.


Frank Broadstreet Carvell: How long?


Samuel Hughes: That was issued
before the war.


Frank Broadstreet Carvell: Then, I can
9 p.m. only say that the minister has been awfully deceived, that so.me-body has gone back on him or has double-crossed him, because, certainly down in my county no Liberals ever get a chance to tender on anything. There is no use in the minister talking about what he has done in this town or in that if they have not carried out his instructions. Every

gentleman sitting around me to-night can bear testimony to that. My hon. friend from Northumberlanad- (Mr. Loggie) was telling us this evening that in Chatham no Liberal could by any chance sell a loaf of bread.


John Hampden Burnham: Perhaps they do not deal in bread.


Frank Broadstreet Carvell: I hope my hon. friend from Peterborough (Mr. Burnham) will pardon me if I do not reply to that sage remark at the present time. I want to have this thing thoroughly understood before leaving it; let us have no misunderstanding.


Samuel Hughes: The deputy minister informs me that I was absolutely right in the statement I made and that at every place where troops are stationed the Army Service Corps invariably call for public tenders for these things.


Frank Broadstreet Carvell: I can tell the minister that that statement is not true. In Woodstock, New Brunswick, there have been 500 troops stationed since some time in December and there were no public tenders for supplies of any kind.


Samuel Hughes: Are they fed by the Army Service Corps?


Frank Broadstreet Carvell: Certainly they are. Two good Tory firms were invited to tender for the groceries, they put their heads together and they decided that they would tender just exactly alike, and they put the tenders high enough. One of them double-crossed the other, he cut a little off the price and got the business. Nobody else got a chance to tender. The minister may have given instructions that Liberals might be given a chance to tender for groceries, meats and things of that sort, but there is somebody between him and the carrying out of his instructions and I do not think it is the deputy minister either. The whole thing gets down to local Tory patronage. When the minister interrupted me I was going to congratulate him. I was going to tell him that the arrangement he ha^ made whereby the commissioned officer of a corps can appoint a medical officer at any time he chooses to examine recruits is a move in the right direction. There may be some things that his Conservative friends may complain of in certain places; that is liable to happen. I imagine, from what he tells us that he does not take very much stock in some of these complaints. I think it is a move in the right direction because men

have been moved long distances to be examined, in many cases they have failed to pass the examination and it has been a cause of a great deal of inconvenience, and I believe, to some extent, has retarded recruiting.


Samuel Hughes: And it has obviated the objection of keeping men waiting for weeks.


Frank Broadstreet Carvell: I commend my hon.
friend. I am glad to commend him when I can. Unfortunately, there are so few occasions when you can commend him and so many when you must criticise him. If the minister will carry out the promises he has made here lo-day and see that his ideals are carried oht in practice throughout the country, he will revolutionize Canada and will put the militia system on a different basis from what it has been on during the last four or five years; he will stimulate recruiting, and that ought to be the object of every patriotic citizen, regardless of ms politics. If the minister will do this, I shall be only too happy to come back here next session, if I am alive then, and commend him for doing so; but he has a big job on his hands; he is surrounded by a number of friends, I see them all around him; I know them all intimately.


George Henry Bradbury: Lots of friends.


Frank Broadstreet Carvell: Yes,, lots of friends, who will raise the biggest row that was ever raised in Canada if the minister endeavours to carry out these reforms. While the minister lias plenty of go and push in him, plenty of independence, it will take even more independence than he possesses to carry out the reforms he has promised. Conditions, however, are better than they were a year or so ago-the Lord knows they could not be any worse, and if there is a change at all, it will have to be for the better.


Mr. McKENZIE:: The department is not paying such high prices for some things.


Frank Broadstreet Carvell: No, they are buying
things much cheaper in some cases. Of course, there are many notable instances to the contrary. The are buying shells much cheaper.


Daniel Duncan McKenzie: Of course, they have
nothing to do with that.


Frank Broadstreet Carvell: The minister had all to do with that until the first day of December, 1915, and I must say there was a gradual reduction even before the minister
handed over the purchasing of shells to other people, so that we can give him credit for some improvement; but so far as buying goods out in the country is concerned, there has been no improvement at all. But if he carries out the great improvements he has promised and allows Liberals to be placed on the lists and allows Liberals in towns where troops are quartered to tender on the supply of provisions and so forth, he will make a great improvement and the country will not be called upon to pay as much as they have had to do in the past for carrying on the work of the department in connection with the war.
I was telling the Minister of Militia a little while ago that, as Colonel Allison is such a financial wizard that he has saved Canada and the Allies $50,000,000 on war purchases, the Minister of Finance should not fret and worry himself until he is getting grey-haired in his endeavour to raise money; he should send for Col. Allison and he will raise $50,000,000 by merely waving his hand.


William Thomas White: I am very much obliged for the suggestion.


Frank Broadstreet Carvell: I will not say any more for the present, but there are a number of special items on which, of course, I will reserve the right to offer some mild criticism if I think it necessary.


Mr. W. H. BENNETT:: In November last, some 275 men of the 76th Battalion were sent from Niagara to the town of Orillia to be kept there in the splendid armoury which has been erected in that town. Col. Caldwell, who is in charge of the regiment, asked the mayor of Orillia for the names of all the butchers, bakers and provision dealers so that he could get tenders from them, and the supplies were secured in that way without regard to politics whatever. I cannot speak of any other town than Orillia, but the hon. member for South Simcoe (Mr. Boys) tells me that 500 men were placed in the barracks in the town of Barrie and the provisioning was done in the same way, so that if the remarks of the hon. member as to provisioning of troops are as incorrect in New Brunswick as in the county of Simcoe, he would simply be laughed at if he went into that county.


Frank Broadstreet Carvell: He would not be laughed at in the province of New Brunswick.


John Webster: We had 800 men of the 58th Battalion stationed at Brockville, and, when they came there, orders were sent by

the Minister of Militia that all supplies were to be publicly advertised for, and a Liberal in that town is now supplying all the groceries, vegetables, butter, eggs, etc. There are in BrockVille four other war contracts, two of which are held by Liberals and two by Conservatives. If the Minister of Militia has divided up his patronage in that way throughout the country, the Conservatives are not making much out of it.


John Hampden Burnham: I would like also to
say-


Frank Broadstreet Carvell: Next.


John Hampden Burnham: I would like to prove the utter fallacy-I will not use the word " falsity "-of the remarks of the hon. member for Carleton, N.B. A leading Liberal in Peterborough is providing 700 troops stationed there with provisions; and in order that there might be no criticism whatever of carelessness on my part in carrying out the instructions of the Militia Department, I inserted in the newspapers, including the Grit organ, a letter addressed to the Liberals, telling them that they could send their names to Major Hamilton of Kingston, who would put their names on the list and that they would be allowed to tender for whatever was required. It is a most shameful procedure to cast these reflections upon the Minister of Militia, especially at this juncture, and to say that such conditions are general throughout the country when, as a matter of fact, they are not by any means general, even if they are particular, and they might happen through carelessness or inadvertence.


Samuel Hughes: I am sure the House will pardon me if I read this little dispatch from the front:
French midnight reports violent fighting resumed on Verdun front, especially Douaumont and Pepper Hill, where German infantry have been repulsed and decimated. British report recapture of 800 yards of trenches lost on February 14 at Ypres and Comines canal, and also taking of a German salient.


Arthur Bliss Copp: 
Frank Broadstreet Carvell: He was lucky then to
get it.


Arthur Bliss Copp: When such things as this
happen, I cannot understand how hon. gentlemen can expect the people to believe that the minister is conducting the affairs of his department without regard to politics. Last year, not in my own town but very near to it, contracts were let for the supply of hay and fodder for horses .as well as provisions for the troops, and Liberals were not given an opportunity to tender. I do not find so much fault with that. If these people would tell us that they are running this affair on patronage lines, it would not be so bad. But I certainly do object to any man standing up and telling me that the patronage system is not followed, when I know better, when I have seen it in my own town, and when I have seen the letters that show that the patronage system is followed in the purchase of even the smallest items for the Militia Department. In this contract for hay, not only were the Liberals not asked to tender, but the man who got the contract got it on condition, I am informed, that he he .should not even buy his hay from Liberals. These are things that I know. And does the Minister of Militia expect me to sit quiet and listen while he tells the House and the country that there is no patronage in his department? If he has been so fair to the Liberals in his own county, I congratulate him for it. But he thereby declares for a principle, and that principle should be carried out elsewhere. Though that may be the case in his own county, it is not true of my county, nor of the province of New Brunswick, and from what I hear from other hon. gentlemen on this side, it is not true in other parts of the Dominion, especially the Maritime Provinces. If the minister has had a change of heart, and intends

in future to conduct his department on the lines he says, I am sure the country will be glad of it. As has been reiterated in this House, if there ever was a time when every dollar of the public funds should be rigidly safeguarded and honestly and wisely expended, this is that time. If the Minister of Militia has seen the error of his ways and intends in future to give every person that can do so an opportunity to supply goods, I congratulate him. But he can hardly blame us for taking his statement with a grain of salt when w<j know how he has epred in the past. I think the time has come when hon. members who know that these things are taking place should tell the people the facts as to their own ridings; and I believe that what is true of my constituency is true of most other constituencies in Canada.


George Henry Bradbury: It Is refreshing to hear hon. gentlemen opposite criticising the Government for its purchases in connection with this war. This is not the only war in which Canada has indulged; we had the Boer war when the Liberal party was in power, and perhaps hon. gentleman opposite could tell the House how many Conservatives participated in the supplying of the troops then.


Frank Broadstreet Carvell: I could tell the hon.
gentleman some in New Brunswick.


George Henry Bradbury: Very few, I am sure. It is well known that for years, during the reign of the Liberal party, they built up - such a system of patronage in connection with the Militia Department that, when this war took place, not a man could make even a pair of trousers for the troops unless he was a Liberal. Practically all the supplies for the first contingent in the (present war were furnished by Liberals. My hon. friend (Mr. Copp) talks about his own county and about New Brunswick. Well, I come from the West-the West which has furnished two men for every one furnished elsewhere in Canada-and I want to tell the hon. gentleman a few facts. In the city of Winnipeg we have ten battalions; in the West we have about fifteen battalions. I think I know what is going on in the West, and I believe that there is not .an hon. member of this House who comes from the West who will make with regard to his constituency a similar statement to that made by the hon. gentleman. The 108th battalion is stationed at my own town of Selkirk. The barracks was obtained from a Liberal,
member of the local legislature. Every dollar of the money spent in fitting up the
barracks went to improve his property. There were other places that we could have got, but there was no intention of making a party question out oif it. I often wonder, as I hear such criticisms as that to which we have listened to-day, whether the party, as a party, has been justified in being as fair as it has been to the Liberals, for they get no credit for it. 'In connection with supplies for the 108th battalion, tenders were invited, and the contract went to one of the strongest Liberals in Selkirk, a man who, to my knowledge, never cast a Conservative vote. 'Tenders were received from two or three Liberals and from two Conservatives. No, attempt was made to limit the opportunity to tender to the Conservatives of that district. Take the commanding officers in Manitoba to-day. I believe there are as many Liberals as Conservatives, if not more. And these men have a good deal to do with guiding affairs, so far as patronage is concerned. I do not believe that in the choice of officers in the West, politics has cut any figure. In my own battalion, I have never asked a man where he stood politically. Some of my majors, captains and lieutenants are Liberals. I never asked what their politics were; I was looking for efficiency, and I am sure that is what every commanding officer in the West 'has been doing. I believe that the same thing applies all over Canada. I hold no brief for the minister or for his department; if they have made mistakes- they are able to defend themselves. It would be strange if they had succeeded in spending the large amount of money that has been spent without making some mistakes, but I say that the criticism which has been made with regard to patronage is unfair and unfounded so far as Western Canad,a is concerned.


Arthur Bliss Copp: I thought that some hon. gentleman on the other side of the House would come to the rescue of the Minister of Militia. In doing so the hon. gentleman who has just taken his seat has admitted exactly what we-diave been charging, because he attempts to defend the minister and the department by saying that the Liberal party did the same thing when they were in power.


Some hon. MEMBERS:: Oh, oh.


Arthur Bliss Copp: My hon. friends may say "oh," but that is the first argument that thq hon. gentleman offered in answer to the statements made on this side of the House. He talked about what the Liberal party did at the time of the Boer war.


George Henry Bradbury: This party is not doing the same, though.


Arthur Bliss Copp: My bon. friend did not say that before he sat down. He says that we on this side of the House are not conducting ourselves in a proper and patriotic manner, because, forsooth, we have the temerity to offer criticism in regard to the conduct of the Government respecting certain public [DOT]matters. Is it out of place for hon. gentlemen on this side of the House to make statements as to how affairs are conducted in their own particular constituencies and provinces? The hon. member for -Selkirk took exactly the same ground. The arguments that my hon. friend has made prove that the charges we have advanced are absolutely well founded. He says they are not true in respect of his particular constituency, and he cites proof of this, so far as the province of Manitoba and the city of Winnipeg are concerned, My hon. friend seeks to place himself upon a higher pedestal than that occupied by his colleagues on the opposite side of the House. He says that in the province of Manitoba and in his constituency where he has the patronage, the criticism made by hon. gentlemen on this side has no application. I do not controvert the hon. gentleman's assertion, but I do say that if these charges are not true in the province of Manitoba or in his constituency, they are true in other constituencies. It has been proved that they are true, and I can show in black and white that they are true. My hon. friend says that these things have not been done in his constituency, and, in the next breath, he adds that it is wonderful that the hon. minister did not make more mistakes than he has made. The minister has made many mistakes, Mr. Chairman. I am not here to question my hon. friend's veracity, -and, if he has been fair to his constituents in the statement which he has made, I commend and congratulate him for being able to rise above the methods of a party that have traded down to the very last ditch in the matter of patronage and graft in connection with the public affairs of this country. I can say to him, however, that in the great majority of constituencies in Canada they have not 'been able to rise to that high level that my hon. friend claims to have attained in respect of the patronage in his own county.	[DOT]


George William Kyte: I am sure it is a great shock to the hon. member for Peel to hear it asfMr. Copp.]
serted over and over again that there is at the present time a patronage list in the Department of Militia and Defence. I remember during the years that the member for Peel sat in Opposition how very strong he was on the subject of patronage lists. The very thought of there being a patronage list in existence for any purpose whatever, in respect even of the most trifling services br the most trifling purchases, was enough to cause him to manifest as much of an ecstacy of passion as his placid temperament is capable of. Even with respect to the advertisements published from time to time in the newspapers of the country, he used to ask the minister day after day whether or not this patronage was accorded by tender. It was disclosed in the Public Accounts Committee last year, and yesterday as well, that there is a patronage list in the Militia Department. If hon. gentlemen will turn to the evidence given in the Public Accounts Committee a year ago, they will find there the statement, made by the present purchasing agent of the Department of Militia and Defence, that there is at the present time a patronage list in that department, containing about 8,000 names. This gentleman also stated that there was a small patronage list previous to 1896, and that it had grown from very small proportions in 1911 to 8,000 at the present time. The same courteous and efficient officer was examined in the Public Accounts Committee yesterday, and he gave similar testimony.
The hon. member for Selkirk endeavoured to score a point against the late Government in respect of expenditures made during the Boer war. No comparison whatever can be made with the circumstances under which the late Government carried on its very moderate part in the Boer war and the magnitude of the interests which are in the hands of the present Minister of Militia and Defence in respect of the present conflict. The total expenditure in respect of the Boer war for supplies and equipment of troops in Canada was defrayed by the British Government.^ The taxpayers of Canada were under no obligation to provide the money necessary to defray the expenses of our participation in that war. To-d,ay, however, the taxpayers of Canada are deeply concerned in the expenditures of the Government in connection with the present war. Again, the services rendered by the Canadian Government at the itime of the Boer war in respect of the* number of men recruited and equipped at

that time were insignificant compared with the campaign for men that has been going on in ths country during the last two years. Further, whereas the number of Canadians who took part in the South African war was only a few thousand, I have it upon the authority of the right hon. Prime Minister himself that he hopes to see 500,000 Canadians in the field in the course of the present year. This will involve an enormous expenditure of money- an expenditure which must be defrayed by the taxpayers of Canada. Every city, town, hamlet, and agricultural community in the whole of Canada is concerned in the manner in which our participation in the war is carried out, and how that participation is to be financed. In every section of Canada, from the Atlantic to the Pacific, appeals are being made at the present time for recruits. Every taxpayer, every father of a family, be he Liberal or Conservative, is.asked to permit his boys who are under age to join the colours; sons of these parents, irrespective of politics, are being asked to give their services to King and country. They are all responding magnificently to the call. There is no difference of opinion as to what Canada's duty is. The only distinction that has prevailed is that which has been made by the Minister of Militia and Defence in 'his department in the matter of patronage. While it is the privilege of the sons of Lib-, erals to take their places in the trenches and to suffer and die for the Empire, it is the privilege only of Conservatives to enjoy the patronage which this enormous expenditure involves.
There is another point to which I wish to direct the attention of the hon. member for Selkirk, with respect to. the difference between the Boer war and the present war. We do know that the late Minister of Militia (Sir Frederick Borden) was attacked time and again on the floor of this House in respect of the administration of his department with reference to the part Canada took in the Boer war. But it is a fact that the most eloquent, forceful and strenuous defender of the late Minister of Militia (Sir Frederick Borden) was the present Minister of Militia (Sir Sam Hughes). We do know that time and again when members supporting the then Opposition challenged the conduct of the then Minister of Militia in respect of his management of Canada's share in the Boer war, the first man upon his feet to defend Sir Frederick Borden was the present Minister of Militia. Has any such thing happened during this discussion?
From the temper of hon. gentlemen sitting on these benches, I do not think there is much danger of any gentleman rising in his place to defend the minister.


George Henry Bradbury: If the late minister was here he might.


George William Kyte: If he were here he would do the right thing, and I question whether he would consider it the right thing to defend the Minister of Militia to-night. I was going on to speak of the recruiting campaign that is going on throughout this Dominion. I have very much pleasure in being able to say that there is no part of the Dominion that in the last few days has contributed more men to the colours than the province of Nova Scotia. I saw in the Montreal Star last night that in two days 1,200 recruits in Nova Scotia had enlisted and taken their places at the different stations where training is going on. The province of Nova Scotia, I venture to say, in proportion to its population, will contribute as much as any other province in the Dominion, and perhaps more. Nova Scotia is a small province comparatively speaking. Her population is less than 500,000 and in order to get 1,200 recruits in two days, and the 13,000 recruits who have come to the colours in the province of Nova Scotia in the last year and a half it was necessary to appeal to men of all classes and of all political parties, and men of all classes and of all political parties have come readily to the colours. I repeat what I have said before, now that the minister is in his place, that the only attempt that has been made to create any political division in this recruiting campaign has been made by the Department of Militia and Defence, which persists iif drawing the party line in respect to patronage. In the county of Cape Breton a large number of young men have enlisted and gone to the front. They have borne their part well. There are families in Cape Breton that have con tributed not only one, or two, or three, but in some instances four sons to the various Canadian regiments. A very considerable sum of money has been expended in the city of Sydney in respect of the training of soldiers and the maintenance of interned aliens. But I venture to say that up to the present-unless it was by some accident that can not be accounted for-not a single dollar of the large sum of money that has been spent by this Government in the county of Cape Breton has ever reached the coffers of a Liberal. Why the statement the Minister of Militia made to-

night, if it were intended to apply to patronage as it has been distributed in the county of Cape Breton would be laughed at by every sane man in the county. And not only that, but there has been partisanship in the selection of recruiting officers. Last year I remember a very active recruiting campaign was carried on in the Island of Cape Breton. I attended a recruiting meeting which was addressed by a man in civilian clothes. This man had not received any appointment. As a matter of fact the recommendation that he be appointed a recruiting officer was turned down by the Department of Militia and Defence. That man made a speech that night which was the most effective recruiting speech I have heard since the war began. He had only one son, and this young man was among the first to join the colours from the island of Cape Breton. He had been for many months in the trenches and had borne his part well and bravely, and his father had, therefore, warrant to come before the young men of the province of Nova Scotia and ask them to come forward, and to do what his only son had done and what he was proud his only son was willing to do. After the meeting I asked this gentleman if he had been appointed a recruiting officer. He said: No, I am not a recruiting officer; in view of the service I am giving the department and the island of Cape Breton in addressing recruiting meetings it was suggested that I be appointed a recruiting officer, but the gentleman who spoke in my behalf was told that the only way I could be appointed would be upon a recommendation to that effect from the Tory candidate of the riding. Now, Mr. Speaker, this man and the Tory candidate do not happen to be on very good terms, consequently the man did not receive the appointment. But that did not cool his ardour. Wherever he happened to be in the performance of his duty, if there was a recruiting meeting going on he would be the first man there and he always made the most effective recruiting speech of the meeting. During the last couple of weeks I understand that he has been appointed a recruiting officer. Not, however, by the Minister of Militia, but by the chief recruiting officer for the province. He had heard the success this man had had in getting recruits and he came to him and asked if he would continue his services. The chief recruiting officer said: I have no authority to appoint 
you but I will take the responsibility myself. The man accepted this quasi appointment, and at the present time he is one of the most active and successful recruiting officers in the province of Nova Scotia.
There is one other matter I desire to refer to and that is with respect to the appointment of medical officers. There is a medical man in the province of Nova Scotia who is well known to every member of this House. He has had many years of experience in his profession. His practice has been most successful. I refer to Dr. J. B. Black, of the county of Hants, formerly an honoured member of Parliament. Now Dr. Black was anxious to do his bit in this war. While he is a man up in years he is still active in the practice of his profession, and he felt that the obligation rested upon him to do what in him lay towards the alleviation of the sufferings of Canadian soldiers wounded in the war. He addressed a letter to General G. Carlton Jones, Surgeon General, who is at present in England, and I have here General Jones' reply:
London, W.C., 10th December, 1915.
Dear Doctor Black,-I am very glad indeed to hear from you, but I am sorry to say that it does not lie within my power to cable for you to come over here, but if you can arrange it with Ottawa, I can easily place you for service in England, and would be glad to have your professional services.
We are at present short of medical officers, and we would be only too pleased if you could come and help us.
Yours very truly,
(Sgd.) G. C. Jones,
Surgeon-General,
Director of Medical Services, Canadian Contingents.
Doctor J. B. Black,
Windsor, Nova Scotia,
Canada.
Upon receipt of this letter, Dr. Black wrote the following letter to Mr. E. M. Macdonald, M.P.:
Windsor, N.S., December 29, 1915.
E. M. Macdonald, M.P.,
Pictou, N.S.
My dear Macdonald,-I have been very anxious for some time to do some part of a citizen's duty in this war and more particularly to do some part in caring for our wounded Canadian soldiers.
At the suggestion of Dr. John Stewart of Halifax (Colonel Stewart of the Dalhousie Unit) I wrote direct to Surgeon General G. Carlton Jones, London, of the Canadian Forces. A copy of his answer I enclose. Now why I am writing you is,-I do not feel that General Sir Sam Hughes would receive graciously an application for a commission in the Army Medical Department from me personally, but I have understood that party politics has not

clouded a friendly admiration of each other by you and General Hughes, so I am writing you to ask if you will do the good office of applying for me.
As near as I can analyse my motives I am not selfish in this matter. I am not worrying about pay for I have sufficient private income to meet my needs; besides X have all the practice here that I want to do. It is not a desire for a trip abroad, for I have done Europe more than once, as well as looking over India, China and Japan besides. My wander-lust is fully satis-fled. Further, I have had most of the honours that my medical brethren in Canada can give me. I have been president of our Colchester-Hants Medical Association, president of the Nova Scotia Medical Association, and vice-president of the Canadian Medical Association, and other honours. To close a very busy life I would, above all things, desire to give myself for service to our wounded who have fought for the saving of the Empire; and from Surgeon General Jones' letter, there is work for me in England.
Yours very truly,
(Signed) J. B. Black.
The result of this correspondence, and of this offer on the part of Dr. Black, was that he received no appointment from the minister. I would like to get from the hon. minister a statement as to whether or not Dr. Black's offer reached him, and if it did reach him, why some appointment of the kind asked for has not been given him.


Samuel Hughes: Does Dr. Black
claim that he made any application to the Department of Militia and Defence?


George William Kyte: He claims to have made an application through the hon. member for Pictou to the hon. minister.


Samuel Hughes: I do not remember anything about it.


George William Kyte: I have the minister's letter
here; I will not read it to the committee, but will pass it over to him.


Samuel Hughes: I have no objection to that letter being read.


George William Kyte: If the hon. minister has no objection, and in order to complete the correspondence, I shall put the letter on Hansard :
. Minister's Office,
. Ottawa, January 10, 1916.
Private.
Dear Mr. Macdonald:
I have much pleasure in acknowledging receipt of your letter of the 30th ultimo, enclosing correspondence from Dr. Black, relative to his desire to be of service in connection with this terrible war.
In reply I beg to advise you that there is a very simple remedy in connection with Dr. Black's case. If he will apologize for what he
has done I will be pleased to do what I can for him.	-
With kind regards,
Faithfully,
(Sgd.) Sam Hughes.


John Howard Sinclair: Shame!


George William Kyte: Now we have the secret of the minister's refusal to entertain the offer of Dr. Black to serve in this war. He asks for an apology for some fancied offence that Dr. Black has committed. I think the hon. minister should recognize that it was in his capacity as Minister of Militia and Defence, and in that capacity only, that he was approached by Dr. Black for this appointment. Whatever personal pique may exist on the part of the minister, I should have thought that he was too big a man to allow it to influence his judgment in a matter of this kind.


An Hon. MEMBER:: You do not know him.


George William Kyte: That remains to be seen. I refuse to believe that the hon. minister is not a big enough man to overcome whatever personal ill will he has towards Dr. Black, and I trust that the minister will be equal to the occasion, and accede to the patriotic request made by Dr. Black that he' be given an opportunity to contribute his share of service in this war.


Samuel Hughes: Dr. Black seems to have taken a very peculiar line. He applies first to a gentleman in England, and then to a gentleman in Nova Scotia. It would have been a simple matter for him to have applied to the military authorities in Halifax. He is much over the military age, and I may say that we have refused the services of many a good Tory for that reason. Being an old Parliamentarian, Dr. Black should have known that he had a very simple remedy. When I knew of his application, I took the matter up with the proper officers and it was decided that he should comply with the very simple procedure which he will understand. If he complies with that procedure I will remove any objections which I might urge to his being appointed.


George William Kyte: Dr. Black wrote to Surgeon-General Jones to know if there was any position in which he could be useful. The hon. minister could not possibly know that. I think Dr. Black took the proper course in writing to Surgeon-General Jones in England, because unless that officer found that there was some position which Dr.

Black could fill, it would have been useless for Dr. Black to have applied to the minister. In regard to Dr. Black's age, every member who recollects him will remember that he was one of the most active members in this House. I desire to say further to the minister that if Dr. Black is oyer age, he is no more so than Colonel John Stewart, who was sent overseas in charge of the Dalhousie unit. In all the circumstances, I hope the minister will withdraw any objections he may have had, and that Dr. Black will be privileged to place his services at the disposal of the medical staff.


Samuel Hughes: I understand that Dr. Stewart is a very estimable gentleman, and I believe that Dr. Black is also; but Dr. Stewart was selected by the officers of his unit. The officers were given the opportunity to select their own medical officer, and they selected Dr. Stewart. If they had selected Dr. Black, he would have been appointed.


Daniel Duncan McKenzie: When the statement is mad'fe in this committee by the hon. Minister of Militia and Defence that the affairs of his department are managed without any partisanship, or without any partisan bias, I do not think it would be fair for any member who knows the facts and the practice, locally at all events, to be different altogether, to allow the|Canadian people to suppose that things are as , the minister represents them to be. It is indeed a pity that this country has arrived at a stage when, whether wittingly or hot, ministers of the Crown stand up in this House and make statements, possibly believing them to be true, that are absolutely wide of the mark. The people of this country have >a right to suppose that when a minister representing the Crown stands up and makes a statement [DOT]of fact, he knows what he is talking about, and that representing his King and country honestly and truthfully and properly the condition of affairs is as he represents them to be.
I have no fault to find with the ordinary patronage practice. If there is a big contract which the statute requires to go out to tender in the ordinary condition of things, I insist that it should go out to tender. Under the ordinary conditions which prevailed before the war, if there were cases in which the interests of the country could be fairly well protected by ^the discretion of officers, .and they ' gave the preference to the 'friends of ithe .Government, I have no fault to find. But that was when they were spending the ordinary

revenues along ordinary lines. That was the practice when I was in this House supporting the Government. When I had the patronage in the county which I represent I had no fault to find with it, and I am not hypocritical enough to find fault with the Conservative party for doing what we did ourselves. But I do find fault with the practice that exists to-day when conditions are entirely different. There was no war in our time. To-day we are asking every man in this country to pay money towards carrying on the war; we tax him heavily for the purposes of the war.
They go to him for contributions to the Patriotic and other funds, and the money is expended by the ministers of a Tory Government, or by their officials. There is no party line drawn in the collecting of the money, they collect from Grit and Tory alike, and the Grit boys are just as able and patriotic and courageous in the trenches as the Tories, and when there is any profit, or preference, or emolument, to be bestowed, it should be divided equally amongst those who are entitled to it. If that is not done, the minister should have the courage to say boldly: No, we are conducting this thing along party lines; we have done it in the past and we are going to do it in the future. There would be some manly courage in that, and the people would at all events know that they were doing it on party lines and that they were not trying [DOT] to conceal it. But, we heard to-night the absolutely unfounded statement that the minister did not know about politics entering into the matter at all, that there was no preference in the management of the department, no patronage list, and that everything was going splendidly and beautiful. It has been pointed out by my hon. friend from Westmorland (Mr. Copp), and my hon. friend from. Richmond (Mr. Kyte), that it was only yesterday that we had sworn evidence in the iCommittee on Public Accounts to the contrary. In that committee one of the officials of the department went on the stand and swore that this patronage list existed, that only the names of Tories were on it, and that everything from the smallest to the biggest had to come to the department through that list. That is sworn testimony, and I believe it to be true, notwithstanding what the minister says to the contrary.
Now, I desire to say a word as to Cape Breton and Victoria. As far as Victoria is concerned, there has been assemblage of troops in that county since the war broke out, and we are not complaining of patron-

age, because there was no patronage there. But there was a large body of men at North Sydney and a battery at Sydney Mines which came from Prince Edward Island. They were there for eight or nine months. Large bodies of troops were recruited at both these points. I venture to tell the minister that never did a fifty cent piece reach the pocket of a Liberal in Sydney or Sydney Mines. The only instance in North Cape Breton in which a Liberal received anything at all was when a man, who was building a barracks at Sydney Mines, wanted some nails; he went into a store kept by a Liberal and bought sixty cents worth. About an hour afterwards he came back and dumped the nails on the counter, saying: I am not allowed to buy these nails fropa you; I told the man 10 p.m. who is i,n charge of the patronage that I had bought the nails from you and he stated that 'be would not vouch for them; here are your nails, I have brought them back. That is a case in point and everything else has been done in the same way. A Liberal in the county of Cape Breton is not given a blank tender. They scorn the idea of giving him a paper on which to put a figure by way of tender, and yet, in the face of that, the minister *comes here and says that everything is done in the highest, the loftiest, and most patriotic way. He stands up like a bronze god and says that be knows nothing about it. . That is another trick of the department. When we have $73,000 in cash sent down to the county of Kings, NjS., to buy glue pot horses, the Minister of Militia gathers his angelic wings around him and says: I d,id not appoint the man, I did not furnish the cash and I know nothing about it. I suppose we have to believe him, at .all events, in the Parliamentary sense. The right lion, the Prime Minister (Sir Kobert Borden) told us on the 15th of April last that it was a boy who had undertaken to buy these horses without any business experience, and that he should never have undertaken the job. I would call the attention of the business men on the other side of the House to the capacity of the *Government which they support, as disclosed by this extraordinary transaction. A boy, without business experience, who, according to the Prime Minister, should never have undertaken the job, is able to go into the Militia Department, get $73,-*000 in cash, put it in 'his pocket, and run to the country_with it, and yet the minister knows nothing about it. That is the way the business of the country is conducted. I want the people of Canada to know that a boy, according to the Prime Minister, without any business experience, and who never should have undertaken the job, was entrusted with this money. I am only repeating what the Prime Minister said, I am not expressing any opinion of my own, or of Mr. Foster. How he got that money the minister does not know because he tells us he knows nothing about it. If anybody can go into the Militia Department and get money, we ought to know it, so that some of us might be able to get some of the money lying around loose there. The people of the country want to know something about the business methods of a Government under which this kind of thing can happen. The money of the Government was taken in that loose way and horses that could be bought for two drakes and a duck were returned to the department.	*
There is another matter that I think should be cleared up before these Estimates are put through. We heard the speech of the hon. member for North Simcoe (Mr. C'urrie) the other day and it disclosed a most extraordinary condition of things. He said that the Canadian boys had been hired out in England to build railways and huts for some. English contractor or other at 25 cents a day, and that they never got anything out of it except that trifling amount. I call upon the minister to tell the Canadian people, to tell the mothers and fathers of the young men who were sent to the front, as they thought, to fight, for their country, to be trained a& soldiers and to be instructed in the art of war, why it was that they were put to work to build huts and to become the ordinary navvies of an English contractor at 25 cents a day. That is a statement made by an officer of the Canadian Expeditionary Force -to this House. So far it has not been contradicted or explained. As a matter of fact, in the interest of good government and the proper handling of the affairs of this country, the people want to know what has become of the money. Is this another piece of graft, is it collusion between some authority who has control of these men and the English contractor, by which able-bodied men were made to work for 25 cents a day, the balance of the wages going somewhere else -than into the treasury of Canada or that of the British Government? In conclusion let me say that whatever the minister may say about the counties iu

Manitoba, Ontario, and other provinces, the patronage in my county could not be closer to the lines of party patronage and politics than it is at present, because I have given the only sample where a Liberal sold anything or anything was bought from a Liberal, and that was 60 cents worth of nails, and they were returned.


Samuel Hughes: The hon. member for Victoria (Mr. McKenzie) has referred to the soldiers working in England. That was at a time when huts were very much needed because the huts put up by the war office proved very ineffective owing to the rainy weather. It was in connection witn that work that the soldiers were asked to turn in and build those huts. My information at the time, and since then was that it war, purely voluntary work and that they were given this additional pay as a bonus by the British Government, and that there was no objection on the part of the men. I objected to the men being taken away to do this work because of bad weither or anything else, and the work was stopped.
Mr. J J. HUGHES: The other day Col. Currie stated that the contractor charged $1.10 a day and that he paid the men only 25 cents a day.	_


Samuel Hughes: No.


Samuel Hughes: That was the statement that was made.


Samuel Hughes: I am afraid there must be some misunderstanding. I have had some considerable difficulty in understanding the political situation in certain spots here and there throughout the Dominion and let me say in all frankness that parts of Nova Scotia are included in that. Politicians on both sides from these districts seem to be very particular about the patronage lists, and I think it would take a Philadelphia lawyer to keep track of these lists. But our orders are explicit and in the early period of the war I learned from time to time that troops have been quartered in certain places in such a hurry that there was no opportunity of calling for tenders, and in such cases recourse was had to the old patronage lists. Possibly that is how some of these grievances occurred, but I know that practically throughout the whole of the Dominion the proper custom was followed.


Frank Broadstreet Carvell: I have just received a telegram stating that a new battery of ar-

tillery has been ordered, to my native town of Woodstock. That means about 150 men and 70 horses. Will the minister give me his pledge to-night that Liberal storekeepers, merchants, men who can supply forage and other provisions will have an opportunity of tendering for the supplies for these troops on the same basis as the Tories? I want to put the minister to the test.


Samuel Hughes: I am willing to be put to any test. The order has gone and will be carried out.


Frank Broadstreet Carvell: And Liberals will have an opportunity of tendering?


Samuel Hughes: Public tenders will be called for in every place where troops are quartered. I want that distinctly un, derstooa.


George Perry Graham: In regard to the Canadian troops receiving twenty-five cents a day for their work in building the huts, I understood that that was in addition to the pay which they received from the Canadian Government?


Samuel Hughes: Yes.


George Perry Graham: Col. Currie, however,
stated that had the men been working for the British Government there would have been no trouble, but his charge, was that he had discovered, later on that these men were working for a contractor, and not for the British Government, and that the contractor paid the men only twenty-five cents a day, thus making a large profit on their labour, and Col. Currie thought it was the duty of the Canadian Government to see that these men were fully paid* by the British Government.


Samuel Hughes: I requested Gen. Carson to take the matter up immediately and have it adjusted in that way, or else we_would, hold the British Government responsible, charging them $1.10 a day for our men.


Mr. DOUGLAS:: There is being raised
on the south side of the river in the constituency of Strathcona the 151st Battalion under Lieutenant Colonel Arnott. The senior major is Major Grant and the junior major is Major Lowrie from Lloydminster.
I am informed on the highest authority that these officers have no say whatever as to the selection of their captains and lieutenants, and that every one 'of these men must first of all receive a recommendation

from Mr. Crawford, the local member for South Edmonton.	.


Samuel Hughes: He has no more to do with it than a child has. If I find that he has, he will not have it any longer.


James McCrie Douglas: He did have something to do with it. The colonel was not allowed to entertain any request for a commission in that regiment without a recommendation as to the character of the applicant by this Mr. Crawford or a Mr. Aldridge, the Conservative candidate for Strathcona.


Samuel Hughes: He is a Methodist clergyman, perhaps the man was getting a clergyman's certificate.


James McCrie Douglas: Such a condition as this is not at all fair to the recruiting officers in the constituency of Strathcona because, without showing any undue pride, I may say that we in the northern part of Alberta -can point with pride to the large number of soldiers who have been recruited in the Edmonton district in particular. I know for a fact that this practice has been going on, although the minister may- not know anything about it, during the raising of the last four or five battalions in the city of Edmonton, I am informed on good authority that no subaltern can get a commission either in the 138th, or in the old battalions of the 51st and the 66th, without first of all getting a recommendation from Mr. Percy Abbott, one of the dispensers of patronage in Edmonton.
These are conditions that should be righted, and that is why I call the attention of the minister to them. These things were current talk on the streets of Edmonton when I left, and I have no reason to believe that conditions have changed since then. I know for a fact that men had to get that certificate. I am not saying that no one except Conservatives could get an appointment, for that would not be in good taste, nor would it show good judgment on the part of any candidate. But the fact remains that every man had to get that certificate. In connection with that, I have a letter and some telegrams from Major Thibaudeau, objecting to the minister not allowing him to raise a French-Canadian battalion in the district of Edmonton. I am not prepared to say whether he is justified in attempting to raise a French-Canadian battalion or not, but I desire to read the telegrams that have passed:
Edmonton, Alberta, February 21. General Sir Sam Hughes.
Minister of Militia,
Ottawa.
Are you going to accept offer to raise from Alberta and Saskatchewan Battalion French Canadians. Freely discussed here that report from G.O.C. District is that it is impossible and impracticable. Notwithstanding I can do it, if no undue interference is placed in my way. Tour department has had two months to consider offer and only fair I should receive answer whether my offer to be accepted or not.
DeBlois Thibaudeau.
On the 22nd of February the hon. gentleman sent the following characteristic reply:
*	Ottawa, Ont., February 22, 1916.
Major DeBlois Thibaudeau,'
Edmonton.
Wire received. Have made inquiries. First, find you are not reported upon favourable for command. Second, there are not enough French Canadians to maintain a company mucn less a battalion in the area spoken of. Third, the great majority of them prefer mixing with English speaking people and are loyally joining other battalions. Fourth, there are not sufficient in the whole northwest of Canada to maintain corps and all details.
Sam Hughes.
I have a statement here of the number of Freneh-Canadians in the provinces of Alberta and Saskatchewan, taken from the census returns of 1911. These show that in the province of Alberta there aTe 19,825 Freneh-Canadians. In the province of Saskatchewan there are 23,251; a total of over 40,000 in the provinces.


Samuel Hughes: That includes halfbreeds.


James McCrie Douglas: It may, but I do not think the proportion of half-breeds would be very great at the present time, and I do not suppose that the hion. minister would object to French-Canadian halfbreeds joining the French-Canadian battalion.


Samuel Hughes: They talk of raising two or three French-Canadian halbbreed regiments.


James McCrie Douglas: Has the hon. minister given authority.


Samuel Hughes: For two.


James McCrie Douglas: In the West?


Samuel Hughes: Yes.


James McCrie Douglas: In Alberta?


Samuel Hughes: I will give full details as soon as I have heard from the office in the West.


James McCrie Douglas: I am merely bringing this Alberta preposition to the minister's attention. I am not sufficiently conversant with the details to know whether the minister is justified in sending this telegram or not, but in my own constituency there are 2,300 French Canadians.


Samuel Hughes: Pardon me, there is nothing of the kind; there may be that number including half-breeds.


James McCrie Douglas: I am mistaken to this extent, that the exact number is 2,064.


Samuel Hughes: I have gone over it a good many times.


James McCrie Douglas: I wish to put myself right with that class of our people, and the statement made by the minister in this telegram, that there are not enough French Canadians in the West to form a company, much less a regiment, is absolutely beside the truth.


William Melville Martin: As the hon. member for Selkirk (Mr. Bradbury) comes from the West, and it might be supposed that in the matter of patronage he speaks for the whole West, I would like to say a few w ords in regard to what goes on especially in the constituency I have the honour to represent. The hon. member for Selkirk, I think, must have been asleep for the last year or two, if he has found no patronage in the vicinity of Selkirk. I am afraid he occupies a somewhat similar position with reference to the question of patronage as he occupies with reference to the question of the St. Peter's Indian reserve. It is only within the last six months or so that he has awakened to the fact that the people of Selkirk did not approve of his position.


George Henry Bradbury: They paid $50,000 for the land you gave away.


William Melville Martin: I will leave that for the hon. gentleman's constituents to settle with him, and, judging from the newspapers, the hon. gentleman will have a pretty hard task. However, as to the party patronage, it may be possible that the leopard has changed his spots in the vicinity of Selkirk, although I am afraid that the fact is that the hon. member simply does not know what is going on around him. But as to the city of Regina, from which I come, and also Moosejaw, Saskatoon and Prince Albert, I can say that party patronage never ran rife-especially in Regina-as it has since this war began. I do not blame the

minister altogether for this state of affairs.
I believe he is sincere when he says he tries to put down patronage in connection with his department. But throughout the length and breadth of Saskatchewan, they have got away from the minister. The hon. gentleman tells us that tenders are publicly called for, or, at least, that his instructions have been that they should be called for. We know that the Army Service Corps purchases the supplies for the soldiers at the points where they are stationed. Public tenders have not been asked for in Regina since the 4th of August, 1914, when the war broke out. Not a solitary advertisement, I think, has appeared in the press of either party calling for tenders for supplies. I am informed that the' same is true of the other cities of which I have spoken. The hon. minister speaks of a purchasing list.
I understand that he means the general purchasing list, and not a purchasing list for each constituency.	.


Samuel Hughes: Before we handed over the work to the War Purchasing Department, our orders were exactly as I have stated. I think that in one or two cases, where they had no time to get the army service corps ready, they called for a purchasing list from the mayor of the town- as occurred in the case referred to by the hon. member for East Simcoe (Mr. Bennett).
I know what our orders were, and we carried them out as far as we could. If any . officers are found deviating from it, they would be given to understand that they must obey orders.


William Melville Martin: I do not understand that. Was there a general purchasing list in the department?


Samuel Hughes: No, but each locality has its own purchasing list, I understand. It is not my department, but the War Purchasing Department.


William Melville Martin: Is there a purchasing list in the department for the city of Regina?


Samuel Hughes: Not in our department; there is in the office in Winnipeg, I presume. I suppose they wire the Mayor of Regina, or something like that.


William Melville Martin: They do not wire from
there, I can tell the hon. minister that. However, we get back to this position: there is a purchasing list for each constituency.


Samuel Hughes: Grits and Tories
alike.


William Melville Martin: I fail to see the difference between a purchasing list and a patronage

list. I could have shown the minister a good deal of correspondence last session in respect to purchases in that portion of the country. Business men in the city of Regina who contribute hundreds of dollars to patriotic funds could not get one dollar's worth of business from the Militia Department, or from the Army Service Corps, which represents the Militia Department in Regina: they were not even asked to tender. As I have already stated, tenders were never called for in the newspapers.


Samuel Hughes: They are never
called for in the newspapers; they are called for by means of posters,


William Melville Martin: That is something new to me. My information is that no advertisement by poster or in the newspapers was ever published since the war began, in or around the cities of Regina, Moosejaw, Prince Albert or Saskatoon, calling for tenders for war supplies.


Samuel Hughes: I do not undertake to say that the hon. member is in error, but I do undertake to say that posters have been put up.


William Melville Martin: I should not like to question the hon. minister's information, but I live in that part of the country, and I am in a position to know. If the minister can show me any advertisements that were published in newspapers or in the form of posters in that country, I shall gladly withdraw the statement that I made.


Samuel Hughes: I only know that
orders to that effect were given.


William Melville Martin: 
Samuel Hughes: There was no quarrel between that gentleman and myself as to who should dictate the patronage. The trouble was that I found something not exactly square, and I did not care whether he was Grit or Tory, his head came off.


William Melville Martin: I do not question the sincerity of the minister in connection with this matter. So far as I could judge from the correspondence, I should say, that the minister was absolutely correct in the stand that he took. But that does not alter the fact that the whole difficulty was caused by the attitude of a certain gentleman in Regina who said that he had the right to make certain appointments. The minister did not quarrel with this man; he considered it entirely beneath his dignity to do so. I do not say this sarcastically, for I , think the minister acted quite as a minister should. If it had not been for the protest of this gentleman that the Department of Militia had made an appointment over his head, probably the existence of this graft would never have been disclosed. It is quite true that, through the activities of the minister, the stealing of hay and oats in the city of Regina was discovered. It was established before the Davidson Commission that eight carloads of hay had been stolen, and that the way bills of 15 other cars had been forged. I wish to be perfectly fair to the Davidson Commission. I met Sir Charles Davidson on more than one occasion; he is what I would call one of the first gentlemen of the old school in this Dominion of Canada, and I have nothing to say against him. But I do submit that if that investigation in Regina had been pushed a little further, men high up in the Conservative party in that city would have been involved. Moreover, I know that evidence substantiating the charges against these persons was sent to Mr. John Thompson, who acted as counsel on Sir Charles Davidson's Investigation Commission, and that he never made use of the evidence. I may mention also the fact that in Regina

the Government was short-changed to the extent of thousands of bushels of oats. If the investigation had been pushed a little further, it would have been ascertained who was (profiting by the stealing of that oats. The -investigation disclosed the fact that this Government was paying sixty cents a bushel for oats in Regina, while the city of Regina itself was buying oats at the' rate of forty-eight or fifty cents a bushel to feed its own horses. This is one of t'he results of the operation of that honest patronage committee that exists in the city of Regina to-day. If the investigations of the Davidson Commission had been pushed a little further the man Mitchell, who is serving a sentence of three years in jail on a conviction of forgery, would not have been the only goat. There was a young men by the name of D. D. Bennett who got away before Mitchell was tried. For this young man Bennett I am personally sorry. I have known him a great many years; he ought to have known better than to get mixed up with this crowd, and to have committed the acts that he did in connection with hay and oats in Regina. Why was he allowed to get away? Mitchell's evidence and the evidence produced at Mitchell's trial involves him to the hilt; if he came back, conviction would certainly result for an offence against the Criminal Cod^e of Canada. It is rumoured around Regina that he is out of the way for the reason that if he were tried he would not be the only goat. I know that the Minister of Militia has not time to bother about where Bennett is, but I am sure that the officials in his department can easily get the information that is necessary to bring that man back. As a matter of fact, I should be only too glad to furnish the Minister of Militia or any person designated by him with the names. I do not wish to bother the minister himself for he is a very busy man. He has had his hands -full since the war began. I do not wish to flatter him, but I do think we sometimes fail to recognize the weight that has been on his shoulders since the war began. I should not like to have carried that weight myself. The expenditure of such a vast amount of money and the preparation of such a large number of troops for the front is a great responsibility. But there are men in the Government who are paid for seeing that there is honest administration in this country, men whose duty it is to see that those who steal from the Government are brought to justice. I say 
that there is one man who is away from justice at the present time, and I am prepared to furnish the Government with his address, if they want to get this man back to Regina and try him for the offence he has committed.


George Henry Bradbury: There are one or two others from Regina that we should like to get.


William Melville Martin: I am prepared to discuss that with my hon. friend at any time. What has taken place at Regina is not to be compared with what has taken place in Winnipeg, for that is in a class by itself. The hon. member from Selkirk has supported the Manitoba Government ever since he had a vote. As regards the Government of Saskatchewan they are absolutely innocent, as far as I am concerned, until they are proven guilty.


George Henry Bradbury: That is a good proviso.


William Melville Martin: I am sure my hon. friend will be interested to know that before the investigation in Saskatchewan gets through some evidence will develop which will be not far from a man who occupies a prominent place in this Government, the Minister of Public Works. But I am not going into local politics. I rose to protest against the system of party patronage that exists not only in the Militia Department, but in every department of this Government. We had an address from the Minister of Trade and Commerce a few days ago, which I think was the gravest indictment of the party patronage system I have ever heard in this House. It strikes me that the present Government are long on promises and short on fulfilment. How the hon. Minister of Trade and Commerce can lecture this House on party patronage, and at the same time refuse to raise a finger to stop the riot of patronage in his own department throughout the length and breadth of this country, I cannot very well make out. To bring my remarks to a close, I hope the minister will take steps to clear up the mess in Regina in connection with war purchases during the last year or two.


William Sora Middlebro: My hon. friend has made a remark which has already been made by many hon. members on the other side of the House, to the effect that during the present war there has been more partisanship displayed in the awarding of contracts than ever before in the history of Canada. I do not know what has taken place in other ridings, but I hope the House will permit me to tell what has taken place in my own. Whatever party patron-

age there is in the county, is very largely in the hands of the local member. In my own riding seven contracts have been awarded during the war. The first contract was to William Kennedy & Son. They are one of the largest iron and steel manufacturers in Ontario. The head of the firm is Mr. Matthew Kennedy, a brother of Sir John Kennedy, of Montreal. Matthew Kennedy was the Liberal candidate in North Grey, and was defeated by Mr. T. I. Thompson, who took the place of the late Dr. Horsey. William Kennedy & Son received a contract-and I think I might say I assisted them in getting it- to the value of $150,000.


Rodolphe Lemieux: Is he a brother-in-law
of the hon. member for St. Antoine?


William Sora Middlebro: No, an uncle-in-law.
The next contract was given to the Owen Sound Iron Works, the president of which is Mr. C. A. Fleming. Mr. Fleming is also the president or part owner of the Owen Sound Sun, the Liberal newspaper in my riding, and his son is manager of that paper. This company received an order for 25,000 shells. The next company to receive a contract was the Meaford Wheelbarrow Company, the president of which is Col. Hugh Cleland. He is the son of the Liberal member who represented my riding in the Local House for eight years. The next contract was given to the Owen Sound Malleable Iron Company, the president of which is Mr. J. M. Kilbourn, who also holds the majority of the stock. He was at one time the Liberal candidate in North Bruce, and was an applicant for a Senatorship from the Liberal Government. The next contract was awarded to Breckenridge & Sons for about $5,000. They are Liberals and have never, I think, given a Conservative vote in their lives. The next contract was awarded to the Owen Sound Tent Company, the president of which is Mr. J. B. Straith, a lifelong Liberal. So far as I know he has never voted for me or for any other Conservative in North Grey in his life. The seventh and last contract was awarded to Randall Brothers. They alone are Conservatives. That is the history of the patronage list in my riding. No other firm has got a contract so far as I can recollect.


Mr. H. BOULAY (Rimouski):: (Translation.) Mr. Chairman, it comes as a surprise to hear members of the opposition, especially those from the maritime rov-inces criticising the Minister of Militia in
regard to the distribution of patronage in his department.
So far as I am concerned, I acknowledge that, in this very House, I did in past years complain that the hon. gentleman was rather lukewarm in meeting the claims of Conservatives. I found fault with him for his giving too much to our political opponents, to the exclusion of members of his own party Thus, in my own riding of Rimouski, there was held every second year, under the Liberal administration, a military camp. Since the Conservatives came to power, not a single one has been held. Those camps bring a considerable amount, yet the Minister of Militia thought proper to transfer that military camp to Levis, represented in this House by a Liberal member.
My opinion is that the times are strenuous enough, and the hon. the minister has enough to accomplish in his department, that both sides of the House should agree to smooth his path when he gets his Estimates before the House.
Who will deny that, in the fulfilment of his duties, he has been able to cope with the extraordinary conditions that have arisen; and I say, without fear of contradiction, that the opposition could not find among its adherents in the House a single man to replace him. Of all the men in the Cabinet who have the qualifications and the will rightly to administer their department, the Minister of Militia stands at the top.


Samuel Hughes: I understand that a number of officers who went over with the first and second contingents have never gone to the front, but are still in England, chiefly in London. Some reasons have been given for this, which may or may not be correct. Would the minister tell us why these men have not gone to the front, and how many of them are still in England unattached to any corps?


Samuel Hughes: Seventeen infantry regiments went over with the first division, whereas there should be only twelve 'regiments to a division. Consequently, five of these regiments had to stay in England, and the officers had to stay with them. Some of them are in England yet, and that has given rise to some dissatisfaction amongst the men and officers not only in England but in Canada. We have taken the line that as far as possible men who have had actual experience at the front should be considered first by promotion. There are four or five colonels in England.
.JtEVISED EDITION

not in London as my hon. friend says, but a't Bramshott and Shornecliffe, in command of their units. We have also sent over senior and junior majors with all the regiments. These juniors are trained in England in the kind of work they would get at the front, and go forward as reinforcements are needed. We have some officers in England who returned from the front wounded, but as soon as they are convalescent they begin training again, and go back to the front attached to other corps. The rule used to be that if an officer was invalided for four weeks, his place was not kept for him in his original regiment. We took the matter up, and his place is now kept for him for three months. There is no such condition of affairs as described by my hon. friend. The five officers who were left behind stayed with the regiment in England.


Samuel Hughes: I could hardly follow the minister; he gave us so much information that he seemed to get away from the point. Does he say that there are no Canadian officers in England unemployed or unattached? I have seen letters from officers in England stating that they had no work to do, that the regiments to which they belonged had been drafted to fill gaps, I think, in other regiments, and that though they had offered to go to the front in a private capacity, they were not allowed to do so, and they had nothing at all to do. I think that statement is correct, and I would like to know how many men are in that position.


Samuel Hughes: There is no officer in the Canadian service in England who is not on some duty or another. A number lost their places in their old regiments, and a number who went over with the first contingent have returned to England, but every officer is on duty. I know that every officer wants to get to the front, but he has to take his turn. I may- say that it is more difficult for a senior officer to get to the front than for a junior officer. They were sending over lieutenants, and leaving the captains and majors out, and these were put on instructional duty in England. A number of lieutenants who entered .the service as sergeants and privates aTe waiting their turn to be attached. A great many officers have come back to Canada, and we have put them in training here.


Samuel Hughes: I understand that there are some men in Canada serving in the

capacity of officers, who, on account of age, or for some other reason, cannot go to the front, who do not intend to go to the front or who are not expected to go to the front Perhaps they are doing some work in the form of recruiting, or something of that kind. The point I wish to bring out is, if there are in England men unemployed, or men not likely to go to the front, would it not be a proper thing to have these men employed in Canada. They have had some experience and training, and would be more capable probably than the men who are employed here. That would prevent the doubling of the number of men on the pay list. It is very important that the expenses should be kept down to the minimum, because they will be high enough. Any overlapping of officers would be very expensive.


Samuel Hughes: We have taken the matter up and looked into it very carefully. Last year when I was in England I found a considerable number of men hanging around. They were not attached to their old regiments, and they felt that they were supernumeraries. They wanted to go to the front. We took the matter up then, and we brought home a great many of these officers and put them in other regiments in Canada for training- Our reports at the present time are that there are no men in England who are not on duty. However the matter is being looked into.


Samuel Hughes: There is another matter which I would like to bring to the minister's attention. Since the reply to the address from the throne was disposed of, I have been trying to get information in regard to the purchase of horses in Canada, but I have not been able to get any satisfactory reply. Perhaps the minister might be able to give us some information on that point.


Samuel Hughes: The purchase of
horses for the first contingent was, like everything else, done in a hurry, but all in all it was well done.


Frank Broadstreet Carvell: Tell us again about these Kings county horses.


Samuel Hughes: To purchase the
horses for the first contingent we sent out buyers as rapidly as possible. Like the case in Peel county, however, there were gentlemen behind the scenes. I understand that a certain gentleman there got so much money that he gave it to the Patriotic Fund. I also understand that the gentleman who was instrumental

in showing him the devious ways of horsedealing had been for years purchaser for the Liberal Government, and was for three or fjour years purchaser for the Conservative Government until we found out by accident that the farmers were getting low prices and the Government were paying high prices. Then we got on his track. However, he had got behind the scenes with this other gentleman. I do not know whether the prices charged were abnormal or not, but, from the fact that he felt disposed to give money to the Patriotic Fund, I assume that he felt that he had not given enough to the farmers. It was a serious and fatal mistake to give money to the Patriotic Fund when he should have gone through Peel county on the eve of the election and given it back in five dollar bills to the farmers. It showed he was not a very astute politician. My hon. friend (Mr. Carvell) wants to know about the purchase of horses in Kings county. With the exception of 24 or 25, they were the best horses purchased. and they were $25 chearier on an average than the Sydney horses, and $55 cheaper than the horses from the western counties. When we came to consider the purchase of horses for the later contingents, we came to the conclusion that it would be better to deal directly with the farmers, but we found again and again instances, similar to those I have referred to, in which the farmers did not get full value, and the middleman was getting a rake-off. We felt we were up against men to whom the fellows receiving patronage in Cape Breton or Woodstock could not hold a candle. The buyers did their best however, and we got a splendid lot of horses at very fair prices. Cavalry not being of much service in this war, we thought it would be foolish to maintain a depot for horses in Canada, where we would have to keep up an establishment of veterinary surgeons and other officers, while the British Government were maintaining their depots and had everything ready. The result was, as point pointed out by the Prime Minister, that we adopted the pooling system, under which we put our horses in and draw out what we need, these being placed to our credit as against the number that we turned in.


Mr. OLIVER:: From the statement made by the minister it would seem that the system works out in this way, that instead of the Canadian Government buying the horses that are required for Canadian service from Canadian farmers, they are
87J
buying horses that have been bought by the British Government in the United States.


Samuel Hughes: The British buyers are buying, and have bought, in Canada, many more horses than we will ever need.


John Howard Sinclair: 
Samuel Hughes: We have purchased and have on hand in Canada and England all the horses we will require for two or three years unless we raise some new batteries. With regard to the buying of horses, we found that we were buying, the English Government were buying, and the French Government were buying, and it created confusion.


Frank Oliver: The farmer got good prices?


Samuel Hughes: No, the farmer did hot get good prices, but the dealers did. Our buyers were dealing direct with the farmers. The others were dealing with the stables. I do not want to take the time to

go into all the details and tell about all the tricks, but we found that the farmer was not being benefited, and that the Canadian Government was not getting the horses. We were being outflanked by the stablemen and the farmers were not getting the high prices they should have obtained. That is why we decided that there should be only one purchasing commission and in coming to that decision we met the desire of both the Canadian and British Governments.


Samuel Hughes: The minister has made
an extraordinary statement. He says that the British, French and Canadian Governments were buying horses, that there was a great deal of confusion and
11 p.m. that the competition reduced the price to the farmers. It appears to me that the Government could have made arrangements with the British and French Governments to avoid this confusion. An embargo was put upon horses so that the farmers could not export them. Then the representatives of the British and French Governments were warned away from Canada and were not allowed to buy horses here. The Canadian Government stopped buying horses and as a result the horses are left on the farmers' hands. The farmer and the stock breeder are the men who will suffer. The minister tells us that not many horses were required in this war. According to the information published in the daily press, coming from New York, the British Government bought over 500,000 horses in the United States and paid for them $125,000,000. Could the minister tell me how many horses are obtainable that would be suitable for military purposes? Probably 100,000 or 200,000 are still left on the farmers' hands. There is no sale for them. The minister told us a moment ago that there was so much confusion that the purchase of horses was stopped. That shows our unbusinesslike methods and incapacity on somebody's part.


Samuel Hughes: The Canadian Government bought 24,000 horses for the Canadian service. These were sent over. There were a good many more than we wanted and we have a number of horses on our hands yet. In these stringent times we felt that it was quite out of place to buy a lot of horses and keep and feed them ,in England when we might never want them. Therefore, we decided to buy horses only when we needed them. We were ahead of our requirements and an arrangement was made that the British Government should buy the horses in Canada in the future.
ISir Sam Hughes.!


Mr. PKOULX:: What is to be done with the horses that the department has on hand?


Samuel Hughes: We are using them from time to time for batteries and that sort of thing. We furnish two or three to each regiment.


Edmond Proulx: It was stated in the papers last spring that a large number of Canadian horses were slaughtered in England; in fact such a large number that a member of the House of Commons there made the complaint that the presence of these slaughtered horses had created a pestilence in his constituency. Can the minister say why these Canadian horses were slaughtered?


Samuel Hughes: I never heard of anything of the kind.


Edmond Proulx: The minister admitted last session that quite a number of Canadian horses had been killed in England.


Samuel Hughes: Never heard of it in my life. I said that at Valcartier we had four or five killed.


Edmond Proulx: Not more than that?


Samuel Hughes: I do not know of it.


Edmond Proulx: The complaint was made by an Englishman.


Six SAM HUGHES:: I never heard of it in my life.


Edmond Proulx: 'Were any horses bought in Quebec?


Samuel Hughes: Yes, fine horses, too. Were there not any bought in the county of Prescott?


Edmond Proulx: The buyers never came to the county of Prescott. I suppose there were too many Grits in that county. How many horses were bought in Quebec?


Samuel Hughes: I do not know how many by provinces. We bought 24,672 all told.


Edmond Proulx: What proportion in Quebec?


Samuel Hughes: Quebec got more
than its proportion.


Edmond Proulx: That is not whaJt I hear. I hear that they never saw any buyers there and that they were not getting their share of the patronage. I do not know why it was except perhaps that the horses were not able to talk French.


Samuel Hughes: The minister says that the department have all the horses they want and that they do not propose to buy any more. Under these circumstances why put an embargo on horses and prevent the farmers from selling them to the United States, or wherever they could sell them, and why send the French and British buyers out of the country and thus prevent them from buying horses here?


Samuel Hughes: They were not.


Samuel Hughes: I think they were.


Samuel Hughes: The Briltish and French buyers aTe still in the country and
they can buy where they like.


Samuel Hughes: If the minister does not know that the British Government are buying horses in large numbers in the United States, he is a very innocent man.


Samuel Hughes: I can assure the hon. member that the British Government are not buying horses in the United States or shipping them across at the present time.


James Joseph Hughes: But they bought half a million horses in the United States after they stopped buying horses here.


Samuel Hughes: The hon. member has no evidence to that effect.


Samuel Hughes: What evidence does the minister want? Until a few days ago Major General Benson was buying horses in the United States for the British Government. Further than that, if the Canadian Government had all the horses they wanted for their own use, and if the British Government needed horses, why could not this Government buy horses here for the British Government? Last year the farmers were asked to increase their production, and horses are used in the army, because artillery has not been done away with. As we have horses to sell in Canada, why does not the Government assist the farmers in selling them? There is no local demand for horses, and if they are not sold to the Government they will be left on the hands of the farmers. There appears to be in this respect a dereliction of duty for which there is no reasonable excuse.


Mr. PARDEE:: What position did Sir Adam Beck occupy in connection with the buying of horses throughout Ontario?


Samuel Hughes: While he was buying horses, he was employed by the Government.


Frederick Forsyth Pardee: Sir Adam Beck, for some reason best known to the Government and to himself, stopped buying horses, and when there were plenty of horses in Ontario that could have been sold, we were not allowed to ship them out of the country. Whilst that embargo was on, and after Sir Adam Beck had told the people of Ontario that he was not buying any more horses for the Canadian Government, ten or twelve carloads of horses were being shipped every day through the Sarnia tunnel on their way to Great Britain, although we have put on the Order Paper questions about the buying of horses both for the Canadian and the British Governments and we have been told by the Prime Minister that for reasons of state these questions cannot be answered. What these reasons are I cannot understand. There are to-day in the province of Ontario thousands of horses that could be bought for war purposes. The minister, however, says that they are not needed. Last summer and the summer before the farmers of Ontario were in exactly the same position in regard to supplying horses, and yet horses were riot being bought. I saw Sir Adam Beck and I siaid to him: "Why do you not come to the county of Lamb ton where there are hundreds of good horses?" He replied: "Horses from the lake ports are of no use." It is absolutely foolish ifor a man to make such a statement, whether, as some hon. gentleman says, it is a joke or not. I replied to him that they were just as good horses as could be procured anywhere else in the world, but the horses were bought from other sources and the farmers of Ontario were left with these horses on their hands. If the minister can give us a satisfactory explanation in regard to this matter, the farmers in my constituency will be satisfied.


Samuel Hughes: Not one dollar of
Canadian money went into foreign countries for horses; it was all expended in this country, and a large amount of money belonging to the British and the French Governments was also spent in Canada. The Canadian Government have all the horses required for war purposes, and the same is true of Great Britain. I presume that later on more will be required. It must be remembered also that the United States furnish a large number of horses to the French Government, and these might be among the carloads going through the Sarnia tunnel.


Frederick Forsyth Pardee: They were horses for
Great Britain.


Samuel Hughes: I do not know anything about that, but I know that the French Government bought horses in the United States and shipped them from Canadian ports. Of course I would consider it bad business on the part of the Government to buy horses which were not required. So far as I know, the quality of the horses purchased was all right. I had my officers examine the horses'before they were taken over, and I believe that we got good value for the money. I do not think the farmers o'f Ontario would thank the Government for buying horses for which they had no use. It is no part of the Government policy to buy up all the horses any more than to buy up all the hens in the country.


Mr. ROBB:: We on this side of the House are not complaining because the Government are not buying horses that are not required; our grievance is that this Government sent British and French buyers out of this country at a time when they wanted horses, and that the Government arbitrarily fixed the demand and the price for horses. The Prime Minister last session made a statement that for reasons he could not give this market had been left to the Canadian Government, we have the evidence of the Minister of Militia that they have bought all the horses they required, a small number compared with those offered for sale. And he said that the British Government had bought all that they required. The result is that the farmers of Canada are left with horses on their hands at a time when grain and hay are high, and the market is gone. The Government have removed the embargo on horses to the United States, and so far as our part of the country is concerned horses are going daily across the line. It is scarcely necessary for us on this side to find fault with the Government for the manner in which they have handle^ the horse business, that has been done very efficiently by their own supporters. Only recently at a meeting of stock-breeders in Toronto the Government were severely arraigned on this account by a member of the House who supports them. My friends are asking me why it is that Canada is buying her horses through Great Britain.
I think I can understand why that was. When the war broke out the minister sent out letters to the members, asking them to recommend people as horse buyers in their several counties. In my county I recommended my opponent of 1908 and 1911, Dr. Walsh, who is a veterinary surgeon and IMr. Pardee.]
knows nurses. But for some reason he was not allowed to buy horses. Had none but men like Dr. Walsh bought horses for this Government there would have been no thirty-year old horses turned over to them. One reason why the British people lost confidence in the horses of this country was because horses were bought to be sent to Great Britain by men who knew nothing about horses. So they loaded up the department with old plugs that were useless, and naturally the English people said: If these are Canadian horses we can do without any more of them.


Samuel Hughes: The hon. gentleman seems to think that these were purchased for the Canadian Government. General Benson was not buying for the Canadian Government but for the British Government. When I communicated with General Benson, I communicated with him as buyer for the British Government.


James Alexander Robb: That only emphasizes the
point I make. Men who were not competent to buy were appointed to that duty, and so they sent inferior horses to Great Britain and our horses were judged by the plugs that were sent over. That is why our farmers have hundreds of thousands of horses on their hands. As to the matter of confusion, why would not the same rules apply to the purchase of flour and oats? I understand that one of the ministers is making flour purchases for all the Governments, and I believe he is doing it pretty well. I believe he is getting the flour at near cost, for I know that many mills are willing to sell almost at cost to these British markets. Our farmers did not ask an arbitrary price for their horses; all they wanted was to sell them. And they do not feel kindly* when they realize that as the hon. member for Lambton says, hundreds of thousands of horses were sent through Canada from the United States. And that is not the worst. Some of these horses were inspected in Canada and rejected. Then they were turned on this market to spread disease among Canadian horses.


Samuel Hughes: Can the hon. member give me an instance of any horses so rejected and spreading disease?
Mr, ROBB: My authority is the hon. member for South Ontario (Mr. William Smith) who made that statement at a meeting of stock-breeders in the city of Toronto recently. His statement was published in all the newspapers-

~ Mr. J. J. HUGHES: There is no manner of doubt that the Government has bungled this horse business terribly.


Some hon. MEMBERS:: Oh, oh.


Samuel Hughes: There is nothing to laugh ait; I am stating an actual fact. We have the statement of the minister to-night that there was confusion in the buying of horses. The hon. member for Huntingdon <Mr. Robb) pointed out one result of the early purchases that were made. It is very little wonder that the British Government should turn from buying horses here. Though the Minister of Militia evidently has never heard of it, as a matter of fact there was a discussion in the British Parliament arising out of this matter. One of the members of the British House asked the Ministry concerning a number of horses that had been slaughtered and were becoming a nuisance in some village in England, and he wanted to know what steps the Government would take to abate the nuisance. All this can be seen by a reference to the debates of the British House. The minister in Teply stated that the matter had been brought to his attention and that steps were being taken by the Government to abate the nuisance. This was the kind of thing that destroyed the horse trade in Canada to the great injury of our people. They started out to buy horses, appointing every Tom, Dick and Harry as their agents, men who knew nothing about horses. The sworn testimony last year before the Public Accounts Committee was shocking. Horses were bought at $10 and a few days afterwards were sold for the use of the soldiers at $110. A horse that was exchanged for two ducks and a drake, and good for nothing at all, was also bought. Such horses were bought in Kings county, (Nova Scotia, yet when they came to Valcartier, the hon. minister tells us he never saw a better lot of horses. A statement of that kind, Mr. Chairman, is simply ridiculous. At all events, the horse trade in Canada has been greatly injured, and the British and French. Governments have bought horses in the United States while our farmers have hundreds of thousands of horses on their hands that they cannot sell. It is a serious state of things, for which the Government is responsible.


Mr. A. A. McLEAN:: Two gentlemen came to Prince Edward Island to buy horses for the British Government. They bought three
or four hundred artillery horses, and they told me they had never sent forward a better bunch. The Canadian Government also sent men to buy horses, and I venture to say that not one of the horses bought in Prince Edward Island were rejected. As to the horses of Ontario, I do not know anything about them. It may be that some of the horses bought in the United States were of a poor class, not being broken, but so far as the horses bought in the Maritime Provinces are concerned, I believe that, except a few sold to some of the buyers, they were as good horses as any country could supply.


Samuel Hughes: That only confirms my position. I know that the horses purchased in Prince Edward Island were first-class. And a great many of the same kind of horses are there still, and there is nobody to buy them, while the British Government is buying horses in the United States.


Samuel Hughes: No.


Samuel Hughes: They were a short time ago. While these horses were for sale in Prince Edward Island, the representative of Major General Benson was buying horses in the United States. Is the hon. member for Queens, P.E.I., satisfied with the way the Government is managing the horse business? Our constituents in Prince Edward Island have thousands of horses on their hands for which they have no sale. These horses are the best in Canada, and -are quite suitable for army purposes. Notwithstanding these facts, the Government sent the British and French buyers away from the country and would not permit them to buy horses in Canada. Is the hon. member for Queens, P.E.I., satisfied with that condition of things?


Samuel Hughes: As soon as the Canadian Government had purchased its horses, the French and British buyers were let in. Canada has furnished twice as many horses to the British and Canadian Governments as the United States, in proportion to the size of the respective countries. The horses supplied by the Canadian and British Governments are infinitely superior to horses purchased in any other part of the world.


Samuel Hughes: Our horses are?
Sir SAM HUGIpSS: Canadian horses are. They are sought all along the line; the British Government seeks Canadian horses.


Edmond Proulx: Why were more horses
not bought?	[DOT]


Samuel Hughes: Because they have all they want.


Frank Oliver: This country is part of
the British Empire; as such, it was entitled to the first call for horses.


Samuel Hughes: And got it.


Frank Oliver: It got the first call; then, through the Prime Minister, this Government objected to the British Government buying any horses in Canada last year. As a consequence of that objection, the British Government and the Allies have bought half a million horses in the United States at an average price of over $200 each, while the average price paid for horses in Canada has been less than $175 each. There were plenty of attempts by the allied powers to take over at a good price horses for sale in Canada, and the Canadian farmer was entitled to that consideration, if not at the hands of the allied Governments, at any rate at the hands of thio Government.


Samuel Hughes: The hon. gentleman is entirely in error as to the prices. He is quoting, on the one hand, the price delivered in France, and, on the other hand, the price paid in Canada.


James Joseph Hughes: On the 14th of last month 'I put a question on the Order Paper, some of which the Prime Minister answered, and some of which he said it would not be in the public interest to answer. He said:
I understand that the French Government is buying horses in Canada at the present time.
I wanted to find out something more about the matter. H wanted to see if we could sell horses to the French Government, because we certainly wanted to sell them to somebody. A day or two later I put the following question on the Order Paper:
Where is the French Government purchasing horses in Canada? What are the names and addresses of the parties representing the French Government in this matter?
The answer of the Prime Minister was: "We are endeavouring to procure this information." The Government of Canada, knowing the number of horses that were for sale in this country, stated that the French Government was buying horses here, but that they did not know wheTe they were buying or what persons were representing the French Government in the matter. The Prime Minister said further, in answer to this question:

I understand that the Hudson Bay Company have purchased some supplies for the French Government, but I am not quite sure as to the nature and extent of these. The officer connected with the purchase of horses, who was recently in Ottawa, is absent at the present time; but the [DOT] information will he procured as soon as possible.
According to the statement of the Prime Minister representatives of the French Government were in Ottawa, but further than that the Government had no information. Hundreds of thousands of horses were obtainable in Ganada, yet the Government, as is apparent from the answer given by the Prime Minister, were taking no interest in the matter. Really, the Government should be ashamed of the way this business has been handled.


Samuel Hughes: The hon. member should know that the Hudson Bay company is agent for the French Government. If he had been anxious to secure the information for which he asked all he had to do was write a letter, put a threejcent stamp on it, and send it to the Hudson Bay company.	-


Samuel Hughes: The hon. gentleman says that the Hudson Bay company are agents for the French Government. The Prime Minister did not know that on February 1_


Samuel Hughes: Yes, he did.


Samuel Hughes: If he knew it he would not give me the information, because he said:
I understand that the Hudson Bay Company-have purchased some supplies for the French Government, but I am not quite sure as to the-nature and extent of these.


Samuel Hughes: It is not the Prime Minister's business probably.


Samuel Hughes: I asked the question not of the Prime Minister, but of the Canadian Government. This was a question for the Government, and the Minister of Militia and Defence should have given information on the subject if he had it. Surely the Prime Minister would not undertake to answer a question of this kind without applying to the proper officer or to the-proper minister for information.


Samuel Hughes: The proper officer is the Hudson Bay Company.


Samuel Hughes: I am pointing out to the minister that the answer which I got from the Prime Minister on February 21 was to the effect that the Government did not know that the Hudson Bay Company was buying horses for the French Government-


Charles Murphy: If I had known that the hon. member for Kings, P.E.I., (Mr. Hughes) was seeking this information,
I could have supplied him with some of it myself and I would not have had to go to the Hudson Bay Company -for it. I hold in my hand -a hill of sale of some horses sold to representatives of the French Remount Commission by a constituent of mine, at Lansdowne Park, in the city of Ottawa, two months ago. He informs me that he had to sell these horses through a well-known Tory heeler, and that after the price had -been agreed on between him and the purchaser of the horses, he afterwards received a memo setting forth the details of the alleged sale, and enclosing a cheque for the amount, which, after it had passed through the hands of the middleman, was considerably less than the price which he h-ad agreed upon with the original purchaser- It might strike you, Mr. Chairman, and the committee as strange that that -should have happened, hut the man in question i-s illiterate; he can neither read nor write. I am investigating (this particular transaction at the present time. It i-s a fact, therefore, that horses were (purchased -at (Lansdowne Park in Ottawa for the French Government, and not by the Hudson Bay (Company. I can quite conceive that the Minister of Militia would not know anything at all about that. As to the purchase of horses in- Canada, I think that the hon. member for South Ontario (Mr Smith) furnished the real reason for the trouble about the purchase of . horses in Canada. If -my -memory serves me correctly, the hon. gentleman attended a meeting of the Horse Breeders Association in Toronto on February 3, 1915. At that meeting he made the specific charge that there was too much graft in connection with the purchasing of horses that was then going on in Canada. He alleged as the reason for that that the men whom this Government had sent out to purchase horses did not know anything about the business. The exact phrase that he used was that "they might be able to play marbles, but they could not buy horses." The same hon. gentleman furnished us an additional reason only last week, again at the annual meeting of the Horse Breeders' Association in Toronto. At that meeting he referred to the statement that he had made a year ago, and supplemented it with the information that the people whom he was addressing knew that he was a strong party man, and that he had been called to account in
Ottawa for the statement that he had made at the meeting of the Horse Breeders' Association last year. Notwithstanding that, he alleged that the additional troubles that had existed subsequent to that were due to the fact that there were too many middlemen between the farmer and the Government. The reason given last year was that the men sent out did not know their business; they -could play marbles, but could snot buy horses. The reason this year is that there were middlemen between the Government and the farmer. That seems to -he the essence of the whole matter.


Samuel Hughes: I have not seen these
statements.


Charles Murphy: I will send them over to the minister. '


Samuel Hughes: If any gentleman in any part of the Dominion makes the statement that after the preliminary buying, middlemen have come between the Government and the farmers in -the matter of horse purchases for the Canadian Government, he is making a statement that is absolutely without foundation.


Charles Murphy: Then the minister is rebuking the hon. member for South Ontario (Mr. Smith).
Progress reported.
On motion of Sir Sam Hughes, the House adjourned at 11.43 p.m.
Friday, March 3, 1916.