1926-06-22

[Stage Direction]
Mr. W. D. EULER (North Waterloo) presented the fourth and final report of the select standing committee on National Railways and Shipping, as follows:
Your committee to which was referred for consideration and for report to the House the estimates of the Canadian National Railways and the Canadian Government Merchant Marine, Limited, held fourteen meetings, in the course of which it examined sundry witnesses, including:-
Sir Henry Thornton, K.B.E., President and Chairman of the Board, Canadian National Railways.
Major Graham A. Bell, C.M.G., Deputy Minister of Railways and Canals.
Gerard Ruel, K.C., Vice-President of Legal Affairs, Canadian National Railways.
D. J. MciDougald, Director, Canadian National Railways.
S. J. Hungerford, Vice-President, Operation and Construction Departments, Canadian National Railways.
[Stage Direction]
National Railways and Shipping
J. E.	Dalrymple, Vice-President,	Traffic and	Express Departments, Canadian National Railways.
R. C. Vaughan, Vice-President, Purchases and Stores Departments, Canadian National Railways.
A. E. Warren, General Manager, Central Region, Canadian National Railways.
R. A.	C. Henry, Director,	Bureau	of Economics,
Canadian	National Railways.
R. B. Teakle, General Manager, Canadian Government Merchant Marine, Limited.
C.	B. Drown, Chief Engineer, Operation Department,
Canadian	National Railways.
T. H. Cooper, General Auditor, Canadian National Railways.
Dr. W. J. Black, Director of Colonization, Agriculture, and Natural Resources, Canadian National Railways.
J. P. Doherty, Traffic Manager, Canadian Government Merchant Marine, Limited.
R. L. Fairbairn, Manager, Passenger Service Bureau, Canadian National Railways.
D.	0. Wood, Traffic Manager, Foreign Freight Department, Canadian National Railways.
C. Manning, Assistant to Vice-President, Colonization, Telegraph, Lands and Insurance Departments, Canadian National Railways.
F. Davidson, Auditor, Canadian Government Merchant Marine, Limited.
R. H. Fraser, Right of Way Agent, Department of Railways and Canals.
H. A. Palmer, Regional Right of Way Agent, Canadian National Railways.
Bert Grant of Toronto, Ontario, Builder.
Canadian Government Merchant Marine
Your committee has had under consideration item 373 of the estimates which provides for a loan of $600,000 to the Canadian Government Merchant Marine, Limited, and has in the course of its deliberations examined the operating statements of the company for the year ending December 31st, 1925. Your committee notes that the net results from operations have improved to the extent of $492,826 during 1925, as compared with 1924; and it is recaLled that the improvement in 1924, in comparison with 1923. was $423,412.
Your committee is also impressed with the conviction expressed by the president of the Canadian National Railways that during the year 1926 the position of the Canadian Government Merchant Marine will be still further improved, and is also gratified to learn that the net result of the operations for the first five months of the present year is an operating profit of $62,000 as compared with an operating deficit for the same period last year of $593,000.
From the evidence adduced it is interesting to note that the improvement in the results of the operations during the year, due to the re-arrangement of services, amounted to $207,000.
Your committee reviewed in considerable detail the negotiations leading up to the sale of fifteen vessels comprising part of the fleet of the Canadian Government Merchant Marine, which were not suitable for any of the services being operated, and is of the opinion that every reasonable precaution was taken to obtain the best possible prices for such vessels.
Your committee is accordingly unanimously of the opinion that the amount asked for for the coming year, namely, $600,000 should be passed by the House.
Canadian National Railways
Your committee has also had under consideration item 372 of the estimates which provides for loam or guarantees of $31,000,000 to the Canadian National

Railways for the fiscal year ending March 31st, 1927, and has in the course of its deliberations examined the operating statements of the company for the year ending December 31st, 1925.
The committee notes that by reason of an improvement in the operating results for the fiscal year ending March 31st, 1926. over that contemplated when the estimate of $50,000,000 for last year was under consideration, the financial requirements of the railway were reduced from $50,000,000 to $25,722,101.80 and that such requirements, with the exception of $10,000,000 advanced by the government in cash during the year, were met by the railway partly through a reduction in materials and supplies on hand and partly from working capital and by improved operating methods, resulting in marked economies.
Considerable evidence was adduced relating to the activities of the Canadian National Railways in regard to immigration and colonization and your committee is pleased to note that during the past year an arrangement has been effected between the government and the Canadian National Railways in conjunction with the Canadian Pacific Railway to eliminate over-lapping in immigration activities.
Your committee calls attention to the fact that expenditures on equipment during the past year have continued at a moderate figure and to the statement of the president that only moderate outlays for freight and passenger equipment are expected for some time.
Your committee also draws attention to the fact that during the past year the company has been carefully investigating the growing competition of the motor bus and the motor truck and expects shortly to develop some means of effectively meeting the conditions arising in connection with this competition.
Your committee in its previous report referred to the question of taxation and is pleased to note from the evidence adduced that considerable progress has been made towards the development of a basis of taxation in conjunction with the various provincial governments throughout the Dominion which will remove the discrimination referred to in the committee's final report last year.
From the evidence given, your committee is of the opinion that the amount of $31,000,000 is necessary for the purposes of the company during the coming year and should be passed by the House.
Your committee notes with satisfaction that the Canadian National Railways continue to hold the confidence and goodwill of the public through the excellence of the services rendered and the courtesy extended to patrons.
Your committee further desires to express its appreciation of the manner in which the president of the Canadian National Railways and the officers assisting him gave their evidence to the committee.
A copy is attached hereto of the minutes of the proceedings and evidence, with certain statements requested of the attending officers, which have been printed with the evidence.
Your committee further recommends that its proceedings and the evidence adduced before the committee be printed as an appendix to the Journals of the House and that Rule 74 in respect hereto be suspended.	[DOT]
All of which is respectfully submitted.

[Stage Direction]
Third and final report of the committee appointed to inquire into the coal resources of Canada.-M;r. Lapierre.

Customs Inquiry-Mr. Mercier (St. Henri)

[Stage Direction]
Fifth report of the select standing committee on Railways, Canals and Telegraph lines.-Mr. Cahill.

Mr. PAUL MERCIER (St. Henri) moved:: That the third and final report of the special committee appointed to investigate tihe adminisitration of the Department of Customs and Excise be concurred in.
He said: Mr. Speaker, the special committee investigating the administration of the Department of Customs and Excise laid its report upon the table of the House last Friday. We are convinced that this House will find in that report the material necessary to reorganize certain branches of this department, and particularly the preventive service, in order to assure the collection of the duties imposed upon goods of foreign origin which enter our country. A preventive service, well organized, is the biggest help to the administration charged with the collection of customs duties, not only on account of the very considerable amounts which it brings into the public treasury, but also as a means of contributing to our national wealth by the adequate safeguarding of our trade and commerce.
When we prepared this report we were indeed aware that the Canadian customs must be regarded with reference to two separate aspects: as a means of revenue, and as an instrument of protection. This investigation has shown that many of the large countries of the world draw considerable gain from their customs dues. A large portion of the revenue of the United States, our neighbours, has no other source.
It is admitted that our participation in the last war has given our finances a bad blow. We will find in the scrupulous and strict collection of duties one of the most efficient ways of rebuilding the national wealth, and one which will enable us to pay the enormous debts willed to us by the late war.
I am convinced, Mr. Speaker, and no doubt my colleagues who have read the voluminous evidence which accompanies the report laid upon the table of this House will share this conviction, that the Department of Customs and Excise is a most difficult one to administer; the duties, including the supervision of thousands of employees, are onerous and the responsibility immense.
The minister in charge needs to be continually on the alert. He is bound according to certain critics, not to err in the performance of his duties and the exercise of the discretionary powers which are vested in him by the Customs and Excise acts. Furthermore, according to the evidence and the several public documents produced at the investigation, the minister must take into consideration that the procedure of his department is governed not only by statutes passed by this House and the Senate, but also by decisions of the cabinet, orders in council, rulings and regulations, under the authority and powers vested in the administration, and in accordance with the different laws of Canada. Regard must be paid to all these in order to properly apply the rules and regulations of the department or to extend their principles by way of interpretation.
The evidence and the examination of the different files submitted to us have demonstrated also that the minister is exposed to numerous and varied influences, and is the recipent of requests of all sorts. They come from his colleagues, from members of his own party, even from members of the opposite party, but mostly from the public in general, .^presented in this chamber by their elected members. These hon. members in accordance with the popular belief and1 under our democratic system, have not only to enact legislation, but are sometimes placed under the painful obligation of obtaining, from ministers of the crown, and, in this case, from Ministers of Customs, past and present, on behalf of offending electors, private and lenient settlements, and if possible the minimum fine provided by law. They insist even upon the reconsideration of findings, or the suspension for a certain period of the proceedings and the penalties incurred in cases already referred to the jurisdiction of the courts of this country.
I would ask my colleagues in this House, to whatever .political party they may belong, to remember, before passing final judgment on the facts disclosed by the evidence that, as members of parliament they must be fair to themselves and to their fellow citizens, and I would also counsel them not to lose sight of the fact that a minister, or a member of parliament, is a public man, and as the word clearly implies, a man who belongs to and is representative of the people of Canada.
The public man does not exercise a profession; he fulfils a mission. Is it not true, Mr. Speaker, that the public demands from him what is not expected from others? Moreover, le is continually subjected to strict and severe
4818	COMMONS
Customs Inquiry-Mr. Mercier (St. Henri)
censure. Public opinion, as he perceives it, stands for a multiplicity of opinions, says Louis Barthou of l'Academie Frangaise, and such multiplicity is sufficient to show the variety of judgments always contradictory and often irreconcilable, to which his actions expose him. He is responsible not merely for what he says or does; his abstentions or the services he renders bind him as much as his actions or words. He stands alone in the community. In the situation there is for him danger and contrast. When a physician has given his advice or a lawyer has ended his address, he has no more to do with his client and has no account to render to anybody. The public man always, has accounts to render, and, as a matter of fact, the public is his client. And if a member of the House of Commons becomes a minister of the crown, how, Mr. Speaker, can you expect him to commit no error, even of a temporary nature, if sometimes compassion, or the intention to oblige or to please a representative of the people, takes control for a moment of his heart, or of his mind? .
Before this House insists on blaming a member, a minister, because a demand has been made to him and he has granted it, let it first re-educate the people of this country. Let those amongst us, who may extol such a narrow doctrine, tell the people of Canada that in future they can no longer depend on the devotion and benevolence of their representatives and on the humanity of ministers. Let them also make use of this opportunity to inform these same people, that Canadian members of parliament, followers of a government which they themselves have Chosen, will no longer be allowed to write or telegraph to a minister in charge of a department, in order to redress alleged grievances or to submit varying claims from their electors, without incurring the risk of being called or mentioned before an investigating committee and reported to this House. If there are such hon. gentlemen, and I do not believe there are any who will be parties to the ruin of some of the best talents of this House of Commons, let them remember that those talents are necessary to the community in order efficiently to help Canada to continue its actual course into the path of prosperity.
Impressed with the ideas and sincere convictions we have tried to express, impressed with the facts that the evidence adduced during this investigation has in our judgment confirmed, we beg of you to consider and to adopt in a spirit of fairness and justice, the recommendations contained in the report

submitted to this House, in accordance with the order of reference to our committee, dated February 5, 1925.
The committee, Mr. Speaker, has done everything in its power to discover the existence of smuggling in Canada and its causes. It is hoped that the reorganization of the department in accordance with the recommendation submitted, and the amendments to the Customs and Excise acts suggested, will repress smuggling in a large measure, and will show, little by little, to every vigilant observer the real cause of this evil which we wish to banish from our Dominion.
Our manufacturers and traders will no doubt be thankful to us for the efforts we have all made in the performance of our duties on this parliamentary committee. We have, by all the legal means at our disposal, endeavoured to avoid party politics, aiming, for once at least in the parliamentary annals of this land, at bringing about immediately a new era for the traders and the dealers, who have often suffered unfair competition, an improved condition towards which they may look with confidence and faith. Have we been successful? Mr. Speaker, the debate which is to follow will tell.


Hon. H. H. STEVENS (Vancouver Centre):: Mr. Speaker, I certainly appreciate the brevity of my hon. friend's address. As I followed him closely I think one might say that he was conscious that there had been serious dereliction of duty on the part of public men, and he entered a plea, coming, I am sure, from the kindness of his heart, that the House and the public should deal leniently with those who may have been guilty of some offence. As to the goodness of his heart I am sure we all agree. On the other hand, Mr. Speaker, I think at times we have a duty to perform when it is wise not to consult so much the heart as it is to consult what is right and what is fair to the country.
On February 2, last, I addressed the House charging maladministration of the Customs and Excise department, whereupon the House appointed a special committee to hold an investigation, or rather more correctly speaking to investigate the administration of the Customs and Excise department. For over four months, that investigation has been carried on and the report now offered to the House for its consideration represents the findings and recommendations of the committee. I feel, Sir, that for the stand I then took I am now warranted in claiming absolute vindication; the charges have been amply

Customs Inquiry-Mr. Stevens
justified and a state of affairs ha3 been revealed which demands the stern attention of this House.
Before proceeding, I wish to pay tribute to Mr. R. P. Sparks and his associates whose untiring efforts during the two years preceding the opening of the investigation contributed so largely to bringing to the attention of the government these serious abuses. Canada owes much to Mr. Sparks for his devotion to the task and his great public service. He and his associates for eighteen months acted with impartiality and without political bias. It was only when it became abundantly clear that the government did not intend to act that Mr. Sparks appealed to me to secure for him a public inquiry. The task was not a simple one, and entailed much anxiety and labour. I had hoped that with the presentation of the report my work would have been finished. However, such is not the case, and I have one other duty to perform, which I cannot allow to remain undone. It is never a pleasant task to attack those with whom one is in constant contact. One's motives will no doubt be misjudged and attacked. Nevertheless, as the one responsible for the launching of this inquiry, it is my duty to finish it to the last detail.
During the opening weeks of the investigation, there were some clashes of opinion, but latterly the members of the committee worked in comparative harmony, and, as the report indicates, sought earnestly to produce to the House some constructive and remedial measures.
The chairman the hon. member for St. Henri (Mr. Paul Mercier), one of the younger members of the House, had a difficult and onerous duty to perform. He presided over each and all of the 115 sittings of the committee, and I trust that the experience he has had and the knowledge he has gained will do much to equip him for larger fieldls of service and usefulness to the state.
With the report I am in accord with one reservation, namely, the failure of the committee to report a finding on the evidence referring to the conduct of the ministry. Its neglect to do so, if not now corrected by the House, indicates a likely continuance of those practices which so largely contributed to the collapse of the department. It is but fair to the committee to say that this failure is not due to absence of evidence, but to inability to agree to a formula which would adequately meet the case. This discrepancy I propose to remedy by offering to the House an amendment to the motion for the adoption of the report.
The vital part of the report may be apportioned into two main divisions:

That which refers to "findings", and that which makes "recommendations". A brief outline under the heading of "findings" would be as follows:-
1. That the Customs and Excise department had been degenerating in efficiency for some time, and during recent years at an accelerated rate, and that the Hon. Jacques Bureau had been derelict in his duties as a minister.
That is one of the findings and the one I shall deal with first. As to the ex-minister, I have this to say. He perverted his opportunities of service to the state to the distribution of indulgences to his favourites. The vast revenues of the country collected by this department and amounting to over 1300,000,000 annually, which he ought to have jealously guarded, were left unprotected the easy prey of mendacious individuals. High officials with a long career of faithful service to the country were debauched by him and must now pass out of the picture under a cloud more or less of shame.
His conduct and the conduct of these officials influenced, debased, I might say, by him as the responsible head, were well known to the Prime Minister and his associates. Yet he was allowed to resign his seat and his position as minister and he was rewarded with a seat in the Senate while his puppets have been driven out of the service in shame.
I pause here to emphasize this point of the knowledge of the Prime Minister and his associates of the general condition of the department for many months, indeed I think I am safe in saying for a year before this investigation started. I will read certain extracts from the evidence. For instance I have under my hand a letter written by Mr. Sparks to the Right Hon. W. L. Mackenzie King, Prime Minister of Canada, under date of February 4, 1925, just a year lacking two days before I m'ade my statement in the House and more than a year before the investigation started. I will not read the whole letter, but I will read a couple of extracts:
Dear Sir:
Some months ago-
That is some months prior to the date of the letter.
-a large representative deputation waited upon you and members of your cabinet pointing out that smuggling and under-valuation for duty purposes were causing an immense loss of revenue and serious interference with the business of legitimate traders and manufacturers.

Customs Inquiry-Mr. Stevens
Then there is a long recital of certain specific instances. Thr letter concludes with this paragraph:
It is respectfully submitted thet the conditions herein set forth are sufficiently well known to the government and to its departmental officers and the requested forms of relief so necessary and reasonable as to justify the government to take immediate action by instituting the required departmental changes and submitting to parliament bills providing for necessary legislative enactment. . .	. It is respectfully submitted that a parliamentary committee should be appointed immediately to inquire into the necessity of departmental and legislative changes.
On the 21st February this was followed by another letter dealing with the acquittal of the notorious Bisaillon in Quebec. This letter is addressed by Mr. Sparks, as chairman of this businessmen's organization, to the Prime Minister:
The acquittal by the Quebec courts of J. E. A. Bisaillon, the chief preventive officer at Montreal, who was charged with conspiracy, creates a new situation in reference to the prevention of smuggling. I think you should be in possession of certain information which we have in reference to this matter, as he is the key to the whole smuggling situation. . .
Might I again repeat what I think I have said to you before that, from the standpoint of loss of revenue, I think the smuggling business is second only to the loss occasioned from the operation of the Canadian National railways.
Warning the Prime Minister, urging him in conference, confirmed by letter, of the necessity of changes and remedial measures. On February 26, there is a letter stating:
After four months' investigation by a staff of trained criminal investigators, we are convinced that at least half of the smuggling now going on could be prevented within a month iby an energetic policy on behalf of the department, and further that, with necessary amendments to the act-
Which were given by this House, endorsed by this side,
-90 per cent of the smuggling could ultimately be prevented. Might I further express the opinion that smuggling is increasing at an alarming rate, rather than decreasing, as the minister states.
Thus even in February it was brought to the attention of the minister and his colleagues that these were the facts and it was pointed out that the responsible minister at the time was neglecting his duties in that respect. The letter goes on:
I took up with the Minister of Customs the question of the continuation of Mr. Bisaillon, as chief preventive officer at Montreal. I pointed out that the business community had lost confidence in Mr. Bisaillon. I had with me at that time a number of reports on this man, one of which I read to the minister.
And so forth. On March 20, 1925, there was a letter reviewing the situation at length and supplying the Prime Minister with a tabulated list of offences of this individual. The reason I mention this is because around

him at the time as chief preventive officer at Montreal, which was the pivotal point then, centred the weakness of the department. This letter addressed to the Prime Minister on March 20, 1925, reads:
In reference to the case of Bisaillon, there are certain facts, some of which are set out below which form a part of the public records and which, if they are not already known to the Minister of Customs and Excise, confirmation of them can easily be obtained. In our opinion these facts of themselves furnish sufficient evidence to warrant the immediate dismissal of Bisaillon.
Then it recites the oase of Rex vs. Lortie, the Tremblay barge case and a number of others. Then we have the following paragraph :
We would respectfully submit that the facts as above set out, together with information conveyed to you in a confidential memorandum, are sufficient of themselves to call for this man's dismissal, and, over and above all this, is the fact that this man has lost the confidence of the business community of Montreal and, as a consequence, his usefulness is at an end.
This was acknowledged by a letter dated April 16, 1925, and addressed to Mr. Sparks, from Mr. E. J. Lemaire, Olerk of the Privy Council, in the following words:
Dear Sir:
I am, iby direction of the Right Hon. the Prime Minister, to acknowledge your letter of the 20th instant with reference to Mr. J. A. E. Bisaillon, and to say that the same will receive due consideration.
I repeat what I said a moment ago that the conduct of the minister of the department, the laxity of his administration and his countenancing of evil-doers were well known to the Prime Minister and his colleagues long ago.
The second finding of the committee to which I desire to refer is in somewhat the following terms:
The committee also found that not infrequently important decisions have been made -which were repugnant to the facts, resulting in serious losses to the revenues, as well as placing a premium on dishonest practices.
The chairman of the committee (Mr. Merrier, St. Henri) who took his seat a moment ago, as I intimated, made a plea for toleration of public men who were derelict in their duty. Here we have the finding of the committee in these terms, that the minister, or officers of the department under the influence of the minister, under pressure from the minister, made findings, made decisions affecting the public revenue, affecting the treasury of this country, which were repugnant to the facts, to use the words of the report itself. Under this heading would come a discussion of " political expediency." I do not intend to enter into that this afternoon as I understand the hon. member for Kent (Mr. Doucet) and the hon. member for West

Customs Inquiry-Mr. Stevens
Hamilton (Mr. Bell) will deal at length with this phase of the question. But losses and discrepancies as disclosed by the investigation could have been effectively controlled if the existing statutes had been properly enforced by conscientious officers uninfluenced by ministerial interference. I pause to emphasize that. In other words it was not the legislation that was wrong; it was the administration that was at fault.
Another decision deduced from the evidence is that motor thefts and smuggling are intimately associated. Case after case was submitted which showed that professional auto thieves found in the Customs department a haven of refuge wherein to cover up their nefarious traffic. Of that, Sir, there can be no question. Scores of such cases were brought to light until the public grew weary of the monotony with which they were unearthed, and the question was asked, when will the end of these auto cases be reached? The purpose in bringing them forward was to try if possible to drive home to the ministry and to the members of the House on what a wholesale scale this business was being carried on. It was a thoroughly organized traffic, and the officers of the department, as well as the department itself, by its actions and by its rulings, connived at or participated in it.
In the fourth place, it was demonstrated that wholesale commercial smuggling was being practised on an extensive scale and that customs and excise duties and sales taxes were being systematically evaded. The audits, admittedly very incomplete, disclosed losses subject to possible recovery of a sum approximating $1,750,000. This is in respect of cases regarding which there is now to hand, and available to the House, such evidence as would warrant immediate action being taken for the recovery of the amount stated. 1 would point out here that the ground covered by these audits was undoubtedly but a fragment of the area which ought to be covered and which in my opinion must be covered if justice is to be done. The ex-Minister of Customs, the Minister of Marine while acting minister (Mr. Cardin), and the present minister (Mr. Boivin) have all displayed a callous indifference to the rights of the public treasury, but a touching solicitude for the liberty and well-being of defrauding offenders.
I come now to the fifth point: I refer to a practice which has reached tremendous proportions, namely, the smuggling of liquor into the United States. It was found that liquor smuggling from Canada into the United States was a serious incentive to return
smuggling of other goods into Canada, and that this Dominion has become a mere conduit through which a constant stream of liquor flows into the United
3 p.m. States. Much of this liquor pays no revenue into the treasury of either country and is admittedly unfit for human consumption. At this point I wish to refer briefly to the treaty between Canada and the United States. On February 2 last when discussing this phase of the question I gave expression to a sentiment similar to that which I shall now voice. With the laws of the United States I have nothing to do; they are not my business, nor is it my duty to criticize or to approve of them. But, Sir, when the Dominion of Canada enters into a solemn obligation with the United States, then I submit, altogether irrespective of any opinion I may hold of the laws of that country, that it is the duty of the administration of this country to see to it that the terms of that treaty as well as the spirit of it are honoured. I will not read the treaty in toto; I will quote merely the opening paragraph or a portion of it. It declares that this Dominion and the United States-
-being desirous of suppressing smuggling operations allong t/he boundary between the Dominion of Canada and the United States of America, and of assisting in 'the arrest and prosecution of persons violating the narcotic laws of either government, and of providing as to the omission of penalties and forfeitures in respect to the carriage of alcoholic liquora through Alaska into the Yukon Territory-
-have agreed to certain things. In other words, the three subjects of agreement in this treaty are first, the suppression of smuggling; secondly, the prevention of, and the prosecution of those engaged in, the narcotic traffic; and, thirdly, the carriage of liquor into the Yukon Territory. The treaty is dated June 6, 1924. There is in it a clause which I know some will contend is ineffective and renders the treaty not binding on either country in so far as the smuggling of liquor is concerned. I had better read this clause inasmuch as it will probably be advanced as an excuse for the failure of the government to observe the spirit of the agreement. Article II provides:
The high contracting parties agree that clearance from Canada or from the United States shall be denied to any vessel carrying cargo consisting of articles the importation of which into the territory of Canada or of the United States, as the case may be, is prohibited-
As properly pointed out by my hon. friend from Vancouver North (Mr. Donaghy) ir-the committee, had the article stopped there it would have been effective. But it goe! on:
-when it is evident from the tonnage, size and genera character of the vessel, or the length of the voyagt

Customs Inquiry-Mr. Stevens
and the perils or conditions of navigation attendant upon it, that the vessel will be unable to carry its cargo to the destination proposed in the application for clearance.
It is argued that in view of that qualification Canada is justified in giving clearance to vessels known to be carrying contrabrand cargoes into the United States. My submission, however, is that Canada as a country, and this parliament as well, both understood and do understand now that this treaty was intended for the suppression of the smuggling of prohibited goods from one country into the other. That is the gist of the treaty, shorn of verbiage; and I believe that this administration, and the officials under the administration, ought to be condemned without any measure of consideration for deliberately conniving at the violation of the general terms of that treaty.
I should like now to illustrate the manner in which this traffic is carried on. Vessels laden with liquor would clear for some foreign port, such as Nassau or St. Pierre-Miquelon, but before such clearance the exporter, under the Canadian regulations, would have to deposit a bond equal in value to double the duty assessable on the cargo. That bond is not to be released unless the goods so exported shall have been duly landed and entered for consumption or for warehouse at the point named in the bond. This has been one of the most prolific sources of evasion of the law. I cannot speak too strongly on this point. In my opinion the administration- and in this I include the officers of the department as well as the heads-are either too simple to hold office or else they are deliberately conniving at this traffic, which is contrabrand so far as our friendly neighbour to the south is concerned. And it is beneath the honour and dignity of this country to be engaged in, or to connive with others who are engaged in, such a pursuit. One would expect that when the government exacted such a bond it would demand that it be respected. In practice, however, it is consistently evaded. False landing certificates are tendered and accepted and the bonds are released. Not only is it a fact that liquor, instead of reaching its ultimate point of destination, is diverted to the United States, but there is a strong presumption that a substantial portion or at. least some portion of this liquor, upon which no customs or excise duty has been paid, finds its way back into Calnada. This, I think, is the conviction of every member of the committee so far as this traffic is concerned, both on the Atlantic and on the Pacific. These vessels secure from the department a clearance for Nassau or Mexico;

they leave the Canadian port and when they get outside they either produce an absolutely false landing certificate or, in the case of St Pierre-Miquelon, it may be genuine. Then the liquor is bootlegged back into Nova Scotia, Prince Edward Island or New Brunswick on the Atlantic and into British Columbia on the Pacific. All of it does not come back, because the great market is Rum Row or Liquor Lane, as they call it on the Pacific, but a portion finds its way back into Canada and pays no revenue to the country. To effectively investigate the possible losses from such cases will require a searching examination of the books and records of the firms concerned as well as some clever police work to check up the documents tendered, as to whether or not they are genuine. In other words this inquiry, while it uncovered certain facts, has not by any means succeeded in discovering the magnitude of the losses to the revenue of this country through this traffic as well as other branches of a different character.
There was another method disclosed by the evidence as followed by the notorious Cooper, 'Hushion and George gang of bootleggers, by shipment on the Bernard M. and Frank H, as well as other vessels; these, however, were the two vessels most frequently mentioned. In this case cargoes of liquor would be billed from a foreign port via the St. Lawrence and Great Lakes to Port Arthur, and thence by rail and ship to Japan. That sounds like a decent traffic, simply passing through Canada; that was the pretence, but what are the facts? The facts are that such cargoes would be passed through the Lachine canal and there given a clearance for Port Arthur, but the vessels did not reach Port Arthur. These goods were landed somewhere on lake Ontario or lake Erie east of Windsor, and not a dollar of revenue came into the public treasury from the admission of these goods. I find, Mr. Speaker, that the evidence discloses at least four vessels carrying from six thousand to ten thousand cases in this way; there were many more but we had before us definitely these four. Had these vessels been compelled to pay duty on their cargoes it would have meant from $450,000 to $720,000 in revenue to the public treasury.
What guarantee did the minister or the department have that the exchequer was properly guarded? They only had the word of a bootlegger, a man called Harbert, and absolutely nothing more. I ask this House to consider this question for a moment, and we will put it in a little different way. Let us suppose some business man, some merchant, sought to bring in a cargo of hardware,

Customs Inquiry-Mr. Stevens
or furniture, of groceries or drygoods, or any other class of goods legitimately handled, in bond for transhipment through Canada to Japan. These goods are brought down the Lachine canal and given a clearance for Port Arthur, but they do not arrive there; they are landed at some unknown point on the lakes, possibly in the province of Ontario, with no payment of duty. Would the department permit that merchant to carry on in that way? The answer is obvious. Then I ask the House why it is that those engaged in the liquor traffic should have a privilege which would not be granted or countenanced for one moment in the handling of other classes of goods. Why is it, Mr. Speaker, that the duty of the minister in the protection of the revenue of this country was satisfied with the word of the bootlegger who brought in the cargo? These are serious matters, and these are the things the House must face in connection with this inquiry.
Before going to another point I want to say that these few incidents I have mentioned are only a modicum of what one might bring forward to illustrate the magnitude of this traffic, but they do show a serious condition in connection with that class of business. I submit, Mr. Speaker, that it is high time for this unholy partnership between the government of Canada and a gang of bootleggers to be dissolved. And I have a word to say to the old established distilleries of Canada. We have here five or six old, well-established institutions which in the past, and I believe at present, claim that they carry on their business legitimately and within the law. Indeed, they pride themselves on it, but to those old-established distilleries as distinct from others of the mushroom type which have recently eome into existence I say that it is high time they ceased to sin by proxy, because that is virtually what they are doing. It is time these well-established firms recognized that they must keep genuinely and sincerely within the law and must not, by feeding their products out to law violators, enrich their coffers. I say this with all earnestness and sincerity; if they persist in dealing with such people they must expect to receive a measure of the public indignation which will be aroused.


Mr. GARDINER:: Will the hon. member
permit a question? Did the committee trace this liquor back to its source?


Henry Herbert Stevens: Oh, very frequently; that
is really what I am referring to at the moment. I do not want to go into too much detail, but to answer my hon. friend, .this is the 14011-306	.
situation. There are perhaps two general classes of liquor, with one of which I will deal at some length almost immediately. There is the class known as matured, decent spirits; to .those who like liquor it is known as good liquor. Then there is another class composed of almost pure alcohol, not matured; still with the fusel oils in it, merely coloured with prune juice or something like that. That liquor is assuming tremendous proportions to-day; I believe there is more of that kind1 handled by the bootleggers to-day than of the good liquor. The matured liquor largely came from the Old Country or from old Canadian distilleries, who sold it to these people who traffic it in the way I have mentioned.


Mr. WOODSWORTH:: The hon. gentleman has referred to the old, well-established distilleries. Does not the evidence show that at least one of these old firms was guilty of giving subscriptions to the old political parties?


Henry Herbert Stevens: No, the evidence does not show that. My hon. friend knows, and the House is well aware, that political parties old and new receive subscriptions from various sources, and I have no doubt that subscriptions have been received from that source. I say to my hon. friend, however, that so far as I know I have never seen or known of a dollar subscribed by that source in any campaign in which I participated. I am not denying that it was done, but I will say that there is no evidence before the committee that such subscriptions were made. The only evidence was that there were certain sums which the auditors said were unaccounted for by any other means, and my hon. friend can take what he likes from that.


Mr. MILLAR:: Might I ask what "new"
party my hon. friend referred to?


Henry Herbert Stevens: There are lots of parties. I would not for a moment criticise my hon. friend's party for the sources of their campaign funds; they get them anyway. I do not know which party my hon. friend is in at present, .but I can say he is now in unholy company. The party with which he is now identified has been the recipient of plenty of such contributions.
I now turn to the question of denatured alcohol, or unmatured spirits. The committee found that unmatured spirits, unfit for human consumption, have been released under four orders in council, and as a matter of record



Customs Inquiry-Mr. Stevens
I am going to put on Hansard the details regarding these orders in council:
Gooderham and Worts, P.C. 641, April 17, 1924.
Manitoba Refinery, Limited, P.C. 1903, October 2, 1925.
Distillers Corporation, Limited, P.C. 1646, September 14, 1925.
Consolidated Distillers of Manitoba, P.C. 29, January 7, 1926.
These four orders in council were 'brought to the notice of the House by the ministei in a return which he filed in reply to an order of the House. These four orders in council synchronize with a sudden increase in the production and sale of raw alcohol, allegedly for denatured purposes, but in reality for the vilest type of bootlegging.
The evidence shows that the Dominion Distillers, better known as the Cooper-Hushion, George aggregation, sold between December 7, 1925, and January 19, 1926, no less than 82,500 proof gallons of this alcohol, denominated No. 1 F. Special alcohol, and that they secured for it from $7 to $10 per gallon.
Now that this alcohol was intended for human consumption was proven beyond all
question by the evidence at page 2416 of Leo George, in answer to a question by Mr. Bennett. I will give the question and answer:
Mr. Bennett: Do you know anything about abstraction of the denaturing substance from this alcohol after it gets to the States?
Answer: I understand that they can abstract it.
Now I want to say a word in explanation of this type of liquor. I have the act under my hand, but I do not wish to weary the House by reading from it too minutely, but the act declares that this class of liquor, No. 1 F. Special, shall be used only for hospitals and institutions for the care of the infirm, and for certain purposes of that kind. It is a rubbing alcohol, a medicinal alcohol. It is not for internal use at all, my hon. friend from Fort William (Mr. Manion) reminds me. The sale of it is very jealously guarded by the regulations. This is important because it bears vitally on what I am going to say in a few minutes, and I want to make this point clear. According to the law, according to the Excise Act, and according to the regulations the minister is empowered to make under the law, this alcohol cannot be used indiscriminately. It must be sold only to certain specific limited classes of persons such as I have mentioned, but as a matter of fact the minister exceeded his power in allowing these 82,500 gallons Of alcohol to be sold by the Dominion Distillers. It was not only contrary to

the law in Canada, but as this class of
alcohol, denatured alcohol, is not admitted to the United States at all under their law, it might have been classified as potable spirits, which it was intended to be. It was intended for, and it was sold to the United States by the Dominion Distillers as potable alcohol for beverage purposes, and it was sold only under cover of a special permit granted by the minister, in the granting of which permit, I contend, the minister exceeded his powers.
Now I want to give three illustrations regarding the export. The minister will answer me that this alcohol is exported, and that therefore he had the right to give them this special permit. I answer, in the first place, that the law gives him no such right. In the second place, I want to show that some of it at least apparently never reached the point of export or was never properly exported. I have under my hand the record of three cars. I have duplicates here of the history of these three cars. I have summarized them, and I shall not read the whole story, but briefly it is as follows.
G. T. car No. 6995, containing this denatured alcohol, was billed at Montreal on December 5, 1925, to Louis Evans, Toronto, for export to Mexico. I have the bills of lading and the freight bills under my hand, showing the facts that I am reciting. This liquor was billed for export to Mexico by a boat called the Idle Hour. I would suggest, by the way, that the name of the boat is quite in keeping with the line of business. The record shows that this shipment-and this is the significant part-reached its destination at Toronto on December 6, but the car was not unloaded there. On December 13, it was reported at Welland, still with the same load, and was finally reported "empty" at Fort Erie, although it was billed, and had the guarantee from the Dominion Distillers written upon the face of the billing, to Toronto for export by this boat.
C.N. car No. 346083, containing the same class of liquor, was billed out of Montreal on December 9,1925, to the same man, Louis Evans, Toronto, for export to Mexico, by the same boat, the Idle Hour. I pause here to draw attention to this, that this Idle Hour was supposed to have unloaded a car for Mexico on December 6, and the boat apparently got to Mexico and back and took on another load on December 9, in spite of all the difficulties of navigation of the Great Lakes and the St. Lawrence, and the distance. One would almost think it was some new type of airship, but it was not; she is a little lake boat. This was shipped on December 9, and in this case the

Customs Inquiry-Mr. Stevens
car was unloaded at London, Ontario, on December 20, and according to my records this vessel was shown "empty" at London. Now London is not an export point; it is not even a lake or river point.
The next is C. N. car No. 409254, containing the same class of liquor. This was billed out of Montreal on December 13, 1925, consigned to the same man, Louis Evans, Toronto, for export to Mexico by the boat the Idle Hour. This car was not unloaded at Toronto, but arrived at Sarnia on December 18, and the contents were described as lumber when the car got to Sarnia for diversion to Port Huron.
I cite these three cases, Mr. Speaker, for the purpose of showing that in the export of this liquor by the Dominion Distillers, who were acting under a special permit from the minister, a permit, I contend, that was granted contrary to the law and in an enlargement of his powers-these three cars never reached the shipping point at all, or they passed the shipping point to which they were directed, and were unloaded at other points in Ontario. These various findings that I have cited I will leave at this point, and now I turn for a moment to the recommendations of the committee.
Many of these recommendations, Mr. Speaker, are clearly routine. I am not going to deal with them, because I think the House is in general agreement with regard to them. I do not think there is any question as to their desirability; I think they will be accepted without question. The recommendations, however, regarding further investigation and the prosecution of those already shown to have violated the law, are of paramount importance to the House. It is equally necessary that the House should be certain that those who are entrusted with this duty are untrammelled by any previous entanglements with those who are to be prosecuted. I pause, Mr. Speaker, to emphasize that point. I say to the House there are two things of paramount importance: First, that further investigation and prosecutions should be vigorously followed up; and secondly, this House ought to be certain that those to whom it entrusts this important task are untrammelled by previous entanglements with those whom they are called upon to prosecute.
Extensive and startling as the disclosures have been, it is well for the House to realize that neither the audit nor the investigation covered more than a small portion of the area that ought to be examined. I want that point to be borne in on the minds of hon. gentlemen. The way the committee proceeded it would have taken us probably two years to have covered the ground necessary 14011-306i
and then it could not have been done thoroughly. The careful examination of other sections of the Dominion will call for a sensitive appreciation of what is due to the state, as well as a fearless and impartial application of the law.
There are three major prosecutions to be undertaken. First, the Gaunt case; second, the Dominion Distillers, and third, the group of companies at Rock Island. There are others, many others, but these three cases ought to be and must be taken very seriously. Now regarding the Gaunt case, already this government, through the action of the present Minister of Marine, while acting as Minister of Customs last fall, has committeed itself to a settlement of the Gaunt case for S3,400, covering a claim which with penalties should produce $58,000. I am not saying, Mr. Speaker, that the $58,000 can be recovered. But I am within my right in saying this-that most eminent counsel, one who had given the subject most intimate study as a lawyer, advised me that he thought there was a very excellent case for prosecution. As a layman, and one who also gave the matter intimate study, I claim that as a matter of right and equity the $58,000 is due to the state and the case ought to be prosecuted. But what chance is there for success from a government whose Acting Minister of Customs and Excise now the Minister of Marine made an adjustment and settlement, which was supposed to have been final until this investigation reopened the matter, of $3,400 for this $58,000 claim?
Now, I turn to the Rock Island cases. In regard to the Rock Island companies,-and I may say there are probably about fifteen companies involved in this group-we know that the present Minister of Customs and Excise (Mr. Boivin) represents a constituency in that neighborhood, and is the intimate associate of some of the chief offenders. Now this is where some of my hon. friends will, perhaps, feel a little touchy. They may suggest, as my good friend the chairman so strongly pleaded a moment ago, that a minister should not be chided unduly for giving away to the importunities of his constituents. That is a kindly spirit, but I want to say to the House that in the face of these disclosures it is a spirit that will ruin Canada, it is a spirit that will degrade the public life of this Dominion; and I say further that it was just that buccaneering spirit of the exminister which largely contributed to the ghastly mess we have in that department at the present time. Now my hon. friend the present minister, in his speech of February

Customs Inquiry-Mr. Stevens
2, describes one of these gentlemen in the following terms, I am quoting from Hansard, page 702:
Mr. Bissonette of Stanstead, a very good fellow, an intimate friend of mine, and a young gentleman whom I have met on several occasions both politically and socially-
And yet, Mr. Speaker, this same Bissonette destroyed his books and records, and ignored the summons of the committee. The auditors reported:
This company has produced no books, except for the year 1926, which books were written up from another set of books which were destroyed.
Then again the auditors report:
The amount of duty recoverable might be determined by the department to be very substantial.
They could not determine it. They could not determine the amount because the records were destroyed and the man would not come before the committee'. Is the minister to be entrusted with the prosecution of this "intimate friend", this "young gentleman", this "very good fellow" as he describes him?
Now let us turn our thoughts for a moment to the Dominion Distillers case. In regard to this case I hold very strong views not only in connection with the denatured alcohol which was shipped out of the country contrary to law, not only in connection with the large sum, the sum of $700,000 odd, which ought to be paid into the treasury, but also because in connection with the shipments that this company brought in and landed somewhere on the Great Lakes, this government excused them and allowed them to come in because a bootlegger said he had landed his goods in Buffalo, and there was never a shade of evidence to support his word. In that case [DOT]which involved over half a million dollars -this company must be prosecuted. These multi-millionaires, these unscrupulous bootleggers, who encouraged poorer men to do the dirty work of their business and then posed before the public of their respective cities as benefactors with money of which the public treasury of this country had been defrauded, must be prosecuted.
I propose now, Mr. Speaker, to examine the chances of a vigorous prosecution of this gang by my hon. friend. This- group consists of several intimately associated concerns with interlocking directorates. All of these concerns practise brazen-faced bootlegging of liquor into the United States as their chief business. That is their business and nothing else, and as the report indicates there is "a strong presumption that some portion of the liquor so shipped and cleared finds its way

back into Canada for consumption" and pays no excise or customs duty. The concerns are: Dominion Distillers Products Co. Ltd.; W. George Limited; W. J. Hushion; the George Import and Export Co. Ltd.; the St. George Import and Export Co., together with certain other entanglements in the way of steamship companies and so on. They carried on operations and then let the company go bankrupt when its usefulness was done.


James Shaver Woodsworth: The hon. gentleman is describing certain practices. Are these practices limited to Rock Island and the Great Lakes, or was there any evidence to show that they were prevalent in other parts of the Dominion as well?


Henry Herbert Stevens: I have tried at least three times to explain, and I am most unfortunate in my expression if my hon. friend has not grasped the point, that this investigation has only touched the fringe of the ground to be Covered. I also said to my hon. friend a moment ago, if he will recall, that the practice regarding this liquor which we are talking of now was prevalent on the Atlantic, on the Pacific and on the Great Lakes. There is no question about it. It is general throughout the whole length of the country, but the investigation of four months and a half, an experience that I do not think any member of the committee wants to repeat, uncovered only certain limited areas. And regarding Rock Island, I want to say in justice to the Rock Island people I think it is perhaps there more pronounced than anywhere I know of. It exists also at Windsor and Niagara, and perhaps at other places, but at these two points I suspect the condition is not very much better.
Now then I want to proceed. Gregory George seems to be the chief executive head of this group of companies. He appeared before the committee during the early days of the investigation, and after perjuring himself left for Europe taking with him all the vital records of this group of companies. In spite of his evasion and of the loss of vital records, the auditors have uncovered ample evidence to warrant a prosecution of these people for the return to the treasury of a million dollars of revenue.
This man Cooper, who is reported to be a multimillionaire, and his wealthy associates, have made most of their wealth by defrauding the governments of Canada and the United States of revenue and by evading the laws of a friendly neighbour. I ask the question, is Ihe minister likely to prosecute these people?

Customs Inquiry-Mr. Stevens
Will he prosecute them? Can we entrust to him, in the light of the evidence of his intimacy with them, the serious task of prosecution? Who was it, Mr. Speaker, who bought from the minister,-who must now prosecute him-the alcohol seized from the barge Tremblay? None other than W. J. Hushion, the political genius of the group, he of the "missionary" spirit, who came to Ottawa as a missionary for this gang. Will the minister dare to prosecute Hushion for selling this alcohol without having paid any excise? He will not, or, if he entered action at all it would be doomed to failure before its inception. Their defence will rest in acts of the minister himself.
Allow me, Sir, to review the facts and let the House judge for itself: In the late autumn of 1924 the barge Tremblay was apprehended by officers of the Quebec Liquor Commission while in the act of landing liquor contrary to the laws of Quebec. A few hours after this action, a customs officer, Duval, a mere tool of Bisaillon, appeared on the scene and seized the vessel and the liquor in the name of the customs of Canada.
The alcohol, some 16,000 gallons originally
24.000	gallons, was then placed in the king's bond at Montreal and remained there until December 1925. During the autumn of 1925, Mr. Wilson, the chief preventive officer, wrote to a number of firms for bids for this alcohol. He received some offers which were unsatis-fadtory and continued hie efforts to make a sale in a regular and proper manner, as was his duty and he carried that duty out faithfully and well. During December 1925 the minister opened private negotiations with W. J. Hushion, ex M.P., who, according to his own evidence, was acting as a "missionary" for the notorious Cooper-George gang. During December, the minister closed1 a private sale of the alcohol to the Dominion Distillers for 36 cents a gallon. The customs law declares that all seized goods should be sold at not less than duty paid value, which in this instance would equal $10.50 per gallon, instead of 36 cents per gallon, otherwise it would be condemned to be destroyed.
That there is a large market for this alcohol within the law, is evidenced by the reports of the Quebec Liquor Commission, which showed that they handled at a price of $14.85 per gallon, 382,000 gallons in 1923, 359,000 gallons in 1924, 315,000 gallons in 1925; also it is in evidence that the department, when untrammelled by ministerial interference, had on a previous occasion sold approximately
7.000	gallons at $15.60 per gallon.


An hon. MEMBER:: Duty paid?


Henry Herbert Stevens: Yes, duty- paid. I am
coming to that point. I will deal with the duty paid phase at once.
I have under my hand a copy of Hansard of February 2, last, which contains, at page 702, what the minister had to say on that occasion regarding this alcohol. The minister twitted me about my "Holi'er than Thou" stand on that occasion, and I hope he will change his description this time a little. He said:
It is true I sold about 14,500 gallons of alcohol to the Dominion Distilleries Corporation in Montreal at 36 cents a gallon. I may tell my hon. friend that that corporation could have manufactcred alcohol of the same quality for about 32 cents a gallon, (but they were in a hurry for this alcohol because they required it for blending purposes.
I want hon. members to remember this point that they were in a hurry for this alcohol because they required it for blending purposes. On the next page he had this to say:
When the alcohol was sold to the Dominion Distillers Corporation it was sold to go into a bonded warehouse and not one ounce, one bottle or one gallon of that alcohol can leave that bonded warehouse without the excise duty being paid on it.
I recall, Mr. Speaker, that when the minister made that statement there was thunderous applause on the other side of the House, and it was accepted as a complete answer to my charge on that occasion. The minister's defence rests on two grounds, first, that it was an urgent case, the alcohol was needed at once for blending purposes; and, secondly, that not an ounce, not one bottle, not one gallon would be released from bond until the last cent of duty was paid. Let us examine that defence. Was it urgent? The date of this sale was the end of December, the negotiations I think were carried on slowly. I have discovered in the files that the deal was consummated about the 24th or the 28th, of December, 1925, and delivery, I think was made about the 1st January. Was it urgent? The Dominion Distillers secured over 60,000 gallons in addition to this 16,000 gallons of precisely the same class of goods, during the month of December, which effectively disposes of the plea of " urgency."
Now I turn to the next point. Mark you, it was urgently required according to the minister for blending purposes. I pause here to say that that institution, in all its history from 1923 I think, down to the present time has only produced 600 gallons of liquor, and that 600 gallons is lying in its warehouses to-day, unfit for human consumption, even unfit to be bootlegged out, and therefore it must be pretty bad. As far as the evidence [DOT] shows they produced nothing else, but they

Customs Inquiry-Mr. Stevens
were simply a medium through which other institutions have bootlegged liquor wholesale to the publie as they have bootlegged this stuff.
Now I come to another point. Was it required for blending purposes? Not an ounce was so used, and 82,500 gallons was sold and shipped by 'the Dominion Distillers within a period of weeks, and in fact within three weeks of the delivery of the alcohol sold by the minister. Furthermore, in the letter fixing the conditions of sale no mention is made of blending. I have here an extract from the letter setting forth the conditions under which this alcohol was sold to the Dominion Distillers under the order of the minister. This letter was written before he made his speech, and all this liquor, 82,000 gallons, including the 16,000 gallons, had been sold weeks before the minister made his speech in which he said that not one ounce would leave the bond until the excise was paid. That was sold between December 5 and January 18. The amount of 82,000 gallons was bootlegged into the United States. Three carloads did not go to their proper destination in Ontario. I have the letter of February 4, before me. These are the terms of the minister himself .-and of the department as to the conditions g>f the sale of the liquor. The conditions are:
I.	To Dominion Distilleries at 36 cents per proof gallon.
II.	Officer to accompany each load.
III.	To be weighed on receipt at distillery.
IV.	Such alcohol was not to be used for any purpose whatsoever except for the manufacture of specially denatured alcohol, grade No. 1-F in accordance with departmental specifications and under supervision of two officers.
V.	For export only-removal in bond "and that a separate export bond for $5,000 was to be given by the Distilleries in connection with each export entry."
VI.	To be an excise transaction and dealt with as by "Excise Warehousing Regulations Circular 327-C, page 3."
That refers to export. Let me go back for a moment. It was to be sold as grade No. 1-F in accordance with the departmental specifications. It was so denatured; that is true or at least the records show that it was. I have personal doubts about it, but I am not going to make the assertion. According to the evidence and what was generally known, it is a simple thing to extract these denaturants from this class of alcohol. That is, you put in certain denaturants. Diethyl-phthalate and Brucine sulphate. These may be extracted and the alcohol becomes potable. That was done with this alcohol. It was wittingly sold by these people as potable alcohol, and when the minister sold it to them, by the very fact of saying that it was for export, he demonstrated that it was for
[Mr. Stevens. 1
beverage purposes. Furthermore, the denatured No. 1-F alcohol is worth about eighty cents a gallon on the Canadian market to those who are at liberty to buy it. They sold this alcohol for $7 to $10 a gallon and not a cent of excise came into the public treasury in regard to it. As to the pious declaration of the minister to the House on February 2 last, that "not an ounce, not a bottle, not a gallon" would be released without duty being paid, I remember, as I said a moment ago, how my hon. friends cheered that as a final and absolute answer to that charge. But what are the facts? Not one ounce, not one bottle, not one gallon returned one cent of duty to the public revenue.
I call the attention of the House to the situation. On February 2, the minister made these statements, and prior to these statements having been made this stuff had been illegally distributed in the United States and in Canada. I pause to ask once again: Can this House entrust the present minister with the prosecution of these people for the recovery of revenue of which we have been defrauded. That is the question to decide here. It is not a question, as my hon. friend suggested out of the kindness of his heart, of whether we are going to condemn the minister because he responded to the importunities of friends. The question is whether we are going to continue to trust the minister who has allowed the public treasury to be defrauded out of these huge sums.
I come to another case. I hesitate a little in bringing this matter to the attention of the House, but I feel it is due to the House to do so. The Prime Minister has already received from me a letter and I have received his letter in reply. I will place them on Hansard if he so desires. I do not know whether he intended his letter to be in any way confidential. If he does, I will send it across to him.


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


Henry Herbert Stevens: Yes.


William Lyon Mackenzie King: I would suggest that he read all the correspondence, his letter to me and my reply to him.


Henry Herbert Stevens: 
CORTLANDT STARNES,
[Stage Direction]
Commissioner.
William Lyon Mackenzie King: Perhaps the
lion, member will allow me at this point to read the following communication from the Minister of Justice (Mr. Lapointe):
To supplement the accompanying memorandum from the Commissioner of the Royal Canadian Mounted Police, I wish to say that Mr. Anderson is acting usually as legal agent for the government at Regina. He has always done so satisfactorily and there was no reason or justification to remove the legal work from his hands.


Henry Herbert Stevens: The point of the whole
matter is this-


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


Henry Herbert Stevens: That may be true. I do
not know but we will assume it is; I have no idea.


Some hon. MEMBERS:: Oh, oh.


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


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


Henry Herbert Stevens: Commissioner Starnes knew nothing about the retention of Mr. Anderson until he was instructed by his minister to make the change. The point is that all through these investigations one thing has been constantly brought to the attention of the people of Canada, and to put it mildly they are exceedingly impatient with the practice. Wherever responsible officers of the department seemed to be doing their duty there would appear on the scene, through some subterranean method, individuals with influence who would interfere -with the proper prosecution of those duties.
Take the Cohen case which I have already cited. Cohen was under surveillance for a considerable time; Officers Knox and Duncan, who have been carrying on investigations in different parts of the country but perhaps particularly in the great centre of Montreal, caught Cohen red-handed in four or five seizures. There are still three or four cases out against him and yet this case has been fiddled along through the courts, and there is ample evidence to show that it was political influence from members of the House which prevented the case from going forward. What happened? The case was set for hearing a few days ago, before the close of the spring assizes. Then this frame-up occurred, absolutely without the knowledge of departmental officials; they were not consulted at all. In the evidence before the House at the present moment is a statement or a precis showing clearly that this same man, Benjamin Cohen, sought to have this delay brought about by the excuse that he could1 give information regarding others. And why did he do this? He did it simply because the ablest lawyers in Montreal realized that they could'not keep him out of gaol. The stay in proceedings, forsooth, is made because this notorious silk smuggler, Cohen, must not go to gaol; there is no other reason for the sudden interference, towards the end of the assizes, when they had exhausted every measure of chicanery to defeat the courts. There is no other excuse than that the present Minister of Customs (Mr. Boivin) arranged through the Minister of Justice (Mr. Lapointe) for the mounted police to step in and interfere with the procedure in this case.


Mr. LAPOINTE:: Absolutely untrue.


Henry Herbert Stevens: My only answer to the Minister of Justice is that three times dur-

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


Ernest Lapointe: Still untrue.


Henry Herbert Stevens: I attach to the minister's statement to-day exactly the same weight which the evidence shows to be merited in the previous case.
Some one asks me about the Aziz case; I will not deal with that. The hon. member for West Hamilton (Mr. Bell) will take up that case, and I do not intend to trespass on his time.


Mr. POWER:: Before the hon. gentleman
passes to another point, will he tell me whether these two cases which he has just mentioned were brought to the attention of the committee?


Henry Herbert Stevens: The Cohen case was set
out in full before the committee; the precis is on file. I cannot give the hon. gentleman the pages, but there are probably almost twenty pages of evidence in connection with that case. It was not brought before the committee for trial because it was then in the courts, and that is one of the reasons, Mr. Speaker, why I feel so intensely about this interference. Just as I said a short time ago, it presages that in the future the same influences and the same practices which have brought about the debauchery and collapse of this department will be carried on.


Charles Gavan Power: Will the hon. gentleman tell me whether the Regina case was brought before the committee?


Henry Herbert Stevens: No. I told the House a moment ago, and I also stated in my letter to the Prime Minister, that inasmuch as it required intimate and secret police work in order to be successful I thought it unwise to bring the matter before the committee. I gave it in confidence to the officers of the department and again I say that Mr. Taylor, now in charge of the department, acted in this matter in a most exemplary way; I have no fault to find whatever. It was not until from the Justice department political influence interfered that anything went wrong in connection with that case.
In the preparation of this report consideration was given to the responsibility of the present minister and his colleagues in regard to certain cases in the direction of which he allowed himself to be influenced by political pressure and political expediency involving

serious violation of the principles of the inviolability of the courts. Consideration was also given to the conduct of several members whose alleged importunity influenced the minister to give partial attention to particular cases. Upon these points, Mr. Speaker, the committee could not agree. The hon. member for Peace River (Mr. Kennedy) refused to support a motion to report censure of the minister, and in a substitute motion restricted the action of the committee to a mere reference of the evidence to the House. As the hon. member had the deciding vote, and the Liberal members rejected both motions, it prevented the incorporation of either motion in the report. I merely make this statement in explanation of the absence of any such reference in the report.
I hope the House appreciates the fact that this report is an intensely important document; it contains a great deal of valuable constructive matter, and it also lays upon the administration certain grave duties. The question before the House is not so much if you approve of the general terms of the report, but rather if this report is a good one -as it is generally admitted to be-can this administration be entrusted with the duty of carrying out the terms of the report? And now I have an amendment to move, Mr. Speaker, which I will read, but before doing 30, Mr. Speaker, I might say that it is realiy a composite amendment made up of the two that were proposed to the committee. I move, seconded by the hon. member for Kent (Mr. Doucet):
That the report ibe not now adopted, buit that it be referred back to the special committee with instructions to add thereto the following clauses as sub-clauses to paragraph six:
"The evidence further discloses that ministerial action has been influenced by the improper pressure of political associates and friends of the minister, or acting minister, administering the department, resulting in the suspension and in some instances the abandonment of prosecutions against those charged with violation of the statutes, and in the loss of revenue to the country. Moreover, successful appeals have been made to the minister and acting minister administering the department to improperly interfere with the course [DOT]of justice between the conviction of the offenders and the execution of judgment thereon. The Prime Minister and the government had knowledge for some considerable time of the rapid degeneration of the Department of Customs and Excise, and their failure to take prompt and effective remedial action is wholly indefensible. The conduct of the present minister of the department, the Hon. George H. Boivin, in the case [DOT]of Moses Aziz, is utterly unjustifiable.
"Your committee deplores the practice, as Tevealed by the evidence, of certain men influential in public life to direct appeals, to the minister to relax and depart from the proper administration of his department for reasons of political expediency.
"Your committee is of the opinion that this practice is detrimental to the best interests of the country and

Customs Inquiry-Mr. Boivin
prejudicial to the administration of the department.
"And that the committee for such purpose be revived."
Hon. GEORGE H. BOIVIN (Minister of Customs and Excise): Mr. Speaker, upon one ground at least I am in perfect accord with the hon. member for Vancouver Centre (Mr. Stevens), and that is in expressing my thanks, the thanks of this House of Commons and, I am sure, of the people of Canada to the members of the Customs committee, without distinction of political party, for the strenuous labours that they have performed, for the close attention that they have given to their duties, and for the fairly comprehensive report which they have presented to this House this afternoon. I agree still more heartily with him in his remarks concerning the work performed upon that committee by the chairman of the committee, our good friend from St. Henri (Mr. Mercier), who presided over all of its sessions, and who certainly displayed a spirit of fairness and impartiality which had a great deal to do, I am sure, with removing the political passion and prejudice that may have been apparent during the first few meetings of the committee.
I am not prepared to go quite the same distance with my hon. friend from Vancouver Centre in saying that I agree entirely with every word that the report contains, but speaking as a member of the government, and also speaking personally as Minister of Customs and Excise, I will say that every recommendation contained in that report if it is approved and adopted will be carried out to the letter so far as it is possible to do so. I regret, for instance, to see in the report among those who are recommended for retirement the name of Mr. Henry McLaughlin, surveyor of customs and excise for the port of Montreal. It is not my duty to defend Mr. McLaughlin before this House, I do not propose to do so, but as I have received a letter from him to-day, I merely ask to place it on record in order that if by any chance the amendment is carried and the report is referred back to the committee that they may consider the contents of this letter during their special session. The letter reads as follows: Hon. George H. Boivin,
Minister of Customs an4 Excise,
Ottawa.
I hate very much to trouble you at this time, but I feel very keenly the manner in which they propose to retire me. I have not been called before the committee to answer any charge, consequently I am unaware of having done anything that would call for a deoision such as the committee has rendered.
As regards the liquor samples referred to in Mr. Duncan's report, I wish to state positively that I have not received a single liquor sample during the past six
years. Before that Mr. Cote and Mr. Corbeil were in the habit of distributing before Christmas a few liquor samples to the employees.
Any orders issued by me to the officers at distilleries and other plants were always authorized by the department, otherwise I would not have issued them.
I feel that I have your entire sympathy and would like very much to retire under different circumstances, as I certainly have no objections to retiring but would like to do so of my own volition.
Yours very truly,
Heney McLaughlin,
Surveyor of Customs-Excise.
I merely place the letter on Hansard in order, as I said before, that it may be considered by the committee if by any chance they re-convene to discuss the amendment which has been submitted to the House by the hon. member for Vancouver Centre today.
The hon. member for Vancouver Centre prided himself on placing me in contradiction with some of the remarks I made on the second day of February last in answer to his unexpected charges. He has built up a very vociferous ease against me by saying that I had misled the House when I pretended that the alcohol sold to the Dominion Distillery Products Limited was for blending purposes instead of denaturing purposes. That, apparently, is the only contradiction which he has so far found in my remarks. That is the only falsehood I addressed to the House of Commons when I spoke on that famous night of February 2, 1926. My hon. friend, I think, will do me the justice of saying that on that occasion I spoke without preparation, without notes, without investigation. Mjy hon. friend took the trouble on two different occasions since the opening of this House to rise and make a special request to you, Mr. Speaker, to pass to the order of motions, to withdraw two or three motions standing in his name on the order paper, but it was without any notice that he withdrew his original motion from the order paper in order to take this party by surprise on that famous night. My hon. friend may shake his head, but I defy him to rise in his place and say that' it was not to the Clerk rather than to the House that he addressed himself in order to have his original motion withdrawn from the order paper, knowing well that while that motion was on the order paper he could not take this party by surprise, and that would have to be withdrawn before he could bring in his amendment to the motion made by the Minister of Justice.


Henry Herbert Stevens: That is nonsense.
Customs Inquiry-Mr. Boivin


Mr. BOIVIN:: That night I did say that
I had sold to a personal friend, W. J. Hushion, fifteen thousand and some odd gallons of alcohol which had been stored on the barge Tremblay. Let me tell my hon. friend, and he knows it very well, that one of the reasons why the attack was made upon W. J. Hushion was because he was a former Liberal member of the House of Commons. That is where I formed my friendship with that gentleman; and I assert now, as I asserted then, that when Mr. Hushion spoke to me for the first time about purchasing alcohol, it was a revelation to me to know that he was interested in any way in the Dominion Distillers Products Limited. I ascertained it then for the first time. I went to an officer of the department to whom my good friend the hon. member for Vancouver Centre has just paid such a high tribute of praise, Mr, G. W. Taylor. He is 'acting deputy minister now but at that time was assistant deputy minister and chief of the Excise branch in the Department of Customs and Excise. I asked Mr. Taylor if we had a right to sell the alcohol. He told me that we had and he has so sworn before the committee. I asked him what would be a reasonable rate for the alcohol. He told me that he would look up and ascertain the highest rate at which alcohol was ever sold to a distillery. He examined the records. We had an offer of 35 cents, an offer made by the same corporation, in the office of Mr. Wilson in the department, but which had not been reported to the deputy minister, which had not been reported to the chief of the Excise branch, and which had not been reported to the minister. It was ascertained that on one occasion alcohol of that kind had been sold for 35J cents, and it was for that reason that I told Mr. Hushion by long distance telephone that he could not get the alcohol for less than 36 cents a gallon. I said that he was in a hurry to get it but my hon. friend pretends that could not be because he had bought 60,000 gallons elsewhere. My hon. friend admits that the Dominion Distillers had bought 60,000 gallons elsewhere for 38 cents a gallon, or two cents more per gallon than the alcohol sold by the government. My hon. friend and his papers throughout Canada have tried to make out that this government lost over $800,000 by the sale of that alcohol when he admits himself that there was a difference of two cents a gallon between the price paid to the government and the price that would have to be paid to other distillers in order to buy it from them. My hon. friend knows well that this alcohol could not have been sold with excise duty unless it was sold for potable purposes. fMr. Stevens.]


Henry Herbert Stevens: Which it was.


Georges Henri Boivin: My hon. friend now says
"which it was." My hon. friend just said a few minutes ago, and I defy him to deny it, that this alcohol was No. 1 P denatured alcohol exported from Canada under bond,, with the exception of three cars which were possibly not exported from this country. If there were three cars of alcohol not exported from Canada I want to say that the Minister of Customs and Excise or the Department of Customs and Excise at that time knew nothing about it. I want to say that every carload was shipped from the distillery under a bond that it would be exported from Canada and that not one of these bonds was released until the B-13 or the export entries signed by the officer at the border were returned to the department. That is the precaution which was used to make sure that No. 1-F denatured alcohol would not be sold here in Canada. My hon. friend knows that no distillery would pay excise on alcohol when it goes into the distillery. The excise on alcohol is paid when the alcohol comes out, and I stated the other night, and I repeat now, that not one ounce, not one bottle, not one gallon of that alcohol could have left that distillery for potable purposes without the payment of excise duty on it, and when it did leave the distillery without the payment of excise, it left in tin cans labelled "poison" on its way to the United States, not for potable purposes, but as No. 1-F denatured alcohol, as the hon. member says himself, for rubbing and medicinal purposes.


Henry Herbert Stevens: Contrary to the regulations.


Georges Henri Boivin: My hon. friend says, "but
once before alcohol was sold at fifteen dollars and some cents a gallon." Alcohol was once sold to the Quebec Liquor Commission, good alcohol which had been seized.


Henry Herbert Stevens: Precisely the same as
this.


Georges Henri Boivin: How can my hon. friend
make that assertion?


Henry Herbert Stevens: Because it is in evidence.


Georges Henri Boivin: I thought my hon. friend
would make that statement, and that is why I want to read a letter from the Quebec Liquor Commission. Why, all through this inquiry it has been said that the minister was not trying to do his duty, that he was trying to favour a political friend, that if this liquor had only been sold to the Quebec Liquor Commission we could have got our excise upon it. I hold in my hand a letter signed by the

Customs Inquiry-Mr. Boivin
deputy chairman of the Quebec Liquor Commission, written to my much despised predecessor on the 29th January, 1925, stating that they would not buy that alcohol because it was not fit for human consumption.


Mr. MEIGHEN:: Will the minister explain why that letter was not put in evidence and the witness produced for examination?


Georges Henri Boivin: 
Some hon. MEMBERS:: Order, order.


Henry Herbert Stevens: The Prime Minister and
other hon. members interrupted. Take your medicine.


Georges Henri Boivin: I think the question asked
by the right hon. leader of the opposition is a fair one. He wishes to know why this letter was not produced before the committee. Because the hon. member who received this letter was not called before the committee and also because the letter was never addressed to the department. If it had been addressed to the department it would undoubtedly be on the departmental files, but it was addressed to the Hon. Jacques Bureau when he was at home at Trois-Rivieres, undoubtedly detained there through illness. My hon. friends smile, sneer and laugh-the same hon. members who allowed Hon. Jacques Bureau to put through his estimates year after year without a single dissenting voice; the same hon. gentlemen who were willing then and there to accept his favours. All of them* are not here but many of them are present, and they are going to sneer because I said that during the past year the hon. senator had been ill and unable to attend to his departmental duties. It was a secret from no one.


Arthur Meighen: Nobody sneered at that.


Mr. BOYS:: I think the minister is quite
out of order; nobody sneered. The minister should calm himself.


Georges Henri Boivin: Perhaps my good friend the right hon. leader of the opposition will tell us what the hon. members sneered at?


Arthur Meighen: I will tell him what I
smiled at. It was the suggestion of the minister that because the letter was received by Mr. Bureau it could not go into evidence.


Georges Henri Boivin: 
Arthur Meighen: What is the date?


Georges Henri Boivin: January 29, 1925. That I think disposes of at least one accusation-T- the accusation levelled against the minister of trying to favour a political friend and endeavouring to divert revenue from the public treasury.
Referring to the statement of my hon. friend from Vancouver Centre, I would like to disprove at once the claims that a great deal of the alcohol thus denatured was not shipped out of the country. He has read a letter, for which he says I am responsible, written by the acting deputy minister, the existence of which letter, he says, the minister well knew on the second February. I never saw the letter and my hon. friend knows that I never saw it. It was written by the chief of the Excise department to the Dominion Distillers giving them the same specific instructions concerning the shipment of denatured alcohol as have always been given to every distillery in the country including some of those old reliable distilleries who happen to have Conservative owners whom my hon. friend does not wish to blame or to hold up to censure. The instructions given to the distilleries are absolutely the same, and the letter sent to the Dominion Distillers on this occasion was exactly the same as the others.
If it is true that the Dominion Distillers succeeded in evading the law; if it is true that two or three carloads of that denatured alcohol did not reach the United States; if it is true that it was sold in Canada and that is not proven, it is due to one of two things. Either the bond for export has not been re-

leased and the export entry has not been returned, or some dishonest official on the border has signed a false export entry and returned it to the department without exporting the liquor. One or the other is the case. Is the minister to be held responsible for that? When I find employees on the border not living up to the liquor regulations of this country, not living up to the rules prescribed for the export of liquor from this country, those employees will be punished and dismissed. One of those employees from a port not far from Windsor is now under suspension for having acted as a distiller's agent, and there is a member sitting on the other side of the House, who will vote in favour of this amendment, who has come to my office in this building twice asking me to reinstate this man.


Henry Herbert Stevens: Does the minister not know that this alcohol No. 1-F special is not admissible to the United States?


Georges Henri Boivin: I will say to my hon. friend that no alcoholic liquor of any kind is admissible to the United States.


Henry Herbert Stevens: My hon. friend has
missed the point of my question. He argues that this alcohol was sold as denatured alcohol for export, not as potable alcohol. Denatured alcohol of certain classes is not prohibited in the United States, but this class of denatured alcohol is prohibited because it can easily be converted into potable alcohol, according to the evidence and according to the United States regulations.


Georges Henri Boivin: I agree with my hon. friend to a certain extent. I do not know why he rose the second time to interrupt me. In answer to his question whether I knew that this alcohol No. 1-F special is not admissible to the United States, I said that all alcoholic liquor is contraband in the United States.


Henry Herbert Stevens: That is not my point.


Georges Henri Boivin: I say that rye, Scotch, gin
and beer are contraband in the United States, and still they are being sent there by the boat load every day to the knowledge of my hon. friends opposite, of hon. members on this side of the House, of the Department of Customs and of the United States government, who are advised of every shipload that leaves Windsor for any point in the United States. Every boatload of liquor that is loaded at any one of the border points is given a clearance only when notice of that clearance has been given to a United States officer on the other side of the boundary line. It is true that those boats may never go to the ports to

Customs Inquiry-Mr. Boivin
which they are destined. It is impossible for us to follow them or to determine exactly where they are going.
I agree entirely with my hon. friend and with the recommendations of the report that closer and more stringent regulations must be made concerning the export of liquor from Canada to the nation termed by my hon. friend, "a friendly nation to the south of us." But what I want my hon. friend to admiG-and I know he will be fair enough to admit it-that up to the present time and especially since I took charge of the department, we have been living up to the rules and regulations of the treaty made between Canada and the United States of America. My hon. friend may well shake his head, but since I entered the department instructions have been given that there will be no camouflage bills of lading. For five or six days the export of liquor was practically paralyzed by a ruling given by the department that shipments of liquor would not be given clearance to Mexico or other points that could not be reached by the Great Lakes; that those camouflaged bills of lading would no longer be accepted; that it is absolutely necessary to show at the inland point from which the liquor was being shipped that it was being shipped from Windsor or some other point for export from Canada and that it must be accompanied by the export entry showing its destination in the United States. We have lived up in every respect to the treaty made between this country and the United States.
What I say-and I have been led away, by the question asked by my hon. friend- is that this No. 1-F denatured alcohol is in absolutely the same position as other alcohol shipped from Canada to the United States. It was shipped with an export entry; the bond given for its shipment was released only when the export entry was returned to the department, and therefore I say that not one dollar of revenue has been lost in favouritism to the Dominion Distillery Products Company Limited, or any other distiller in Canada.
There is one other point I want to make. My hon. friend says that I am not qualified to collect the accounts that may be due to the Department of Customs and Excise by some of the people who are brought before the committee, because I live in and represent a constituency not far from Rock Island, Que. My hon. friend will at least, I hope, admit that my constituency is not contiguous to that of Stanstead. But even if it were, even if I represented the constituency of Stanstead itself and even although the task might be a disagreeable one, I think I would be still
qualified to order a competent attorney to take the necessary legal proceedings against any persons who have defrauded the Dominion government.
The hon. member says that the minister admitted in his speech some months ago that he was a friend of Mr. Alfred Bissonnette I admitted it some months ago. I was his friend; I have been his friend for several years. He represents the county of Stanstead in the Quebec legislature; I represent the county of Shefford in the Dominion parliament. We have been out on many a political campaign together. But it was not until after this inquiry started that I knew that he had any interest whatever in the Peerless Overall Company or that I even knew that he was interested in the sale of overalls. I knew him as a politician and as a friend. The statement I made the other night I repeat, and I have nothing to retract in that connection.
There is, it is true, one more charge against me, a charge of such grave consequence that by it not only myself but the entire government of which I am a member must totter and fall. What is that charge? My hon. friend has left to a special pleader the task of arraigning me upon it before this jury of the House of Commons. That charge is that I consented to listen to the representations of a member of parliament before I would order the issue of a warrant of commitment against a man who had been accused and convicted of having smuggled liquor in his possession. That is the charge; but I ask the House to be good enough to go into the details of it and see to what extent I am guilty. To read the newspapers published under the direction of hon. gentlemen opposite one would almost conclude that I had gone to the province of New Brunswick and argued and pleaded with a judge not to incarcerate this man, Moses Aziz. Let me however tell the House what actually happened.
Moses Aziz was found guilty on the 18th day of August, 1925, three weeks before I even surmised that I would ever be appointed Minister of Customs. At the time that sentence was rendered I had no idea whatever that I might be Minister of Customs on September 5 following. No request had come to me, and I had no knowledge either of the case itself or even of the existence of Aziz until the second day I was in my office. Sitting at my desk in Ottawa, on or about September 28, I was approached by my secretary who had several hundred letters to dispose of,-the accumulation of a month. He was trying as rapidly as possible to deal with them, and reading this one to me he remarked, "This is a request from Mr. Robichaud, the member for
Customs Inquiry-Mr. Boivin

Gloucester, asking you to withhold a warrant of commitment against a man who was arrested down there for having smuggled goods in his possession." Having absolutely no experience and no knowledge of the laws of New Brunswick my first step was to call in the deputy minister and inquire of him whether we had the power to withhold execution of the sentence until such time as the member could make whatever representations he had to offer.
I was in a hurry to return home, having attended a meeting of council that day. It was during the election campaign and I had been in the Eastern Townships for several days. I had come to Ottawa on a hurried visit and was endeavouring as far as possible to relieve the burdens of my colleague sitting to my left who had continued to act as Minister of Customs and Excise. Because of that desire to relieve him so far as I could, I went to the department and looked into the correspondence with my secretary. When Mr. Farrow, the deputy minister, was called in, he not only declared that we had the right to do as requested but, he added, 5 p.m. "There is a letter on the file from the chief of the Remission branch in the Department of Justice in which the statement is made that the Department of Justice cannot deal with the case, but that the Minister of Customs has a perfect right to dispose of it as he sees fit." That letter, signed by Mr. Gallagher, will be found on the files, having been produced in evidence before the committee.
Now what are the facts? Why did the minister, even at that late date, consider it advisable to hear the member representing the constituency before this man was sent to gaol? There were several reasons. A letter from Mr. Stewart, the customs preventive officer at that point, which unfortunately was not filed, but which I have here, shows that Moses Aziz had turned King's evidence and had convicted his own brother and another person of smuggling. That evidence was given in a New Brunswick court on the same day as Aziz himself was convicted, and there was a promise from this Mr. Stewart, a veiled promise, an uncertain promise, if you like, that instead of being prosecuted for an indictable offence under section 219, Aziz would be prosecuted summarily. And that conveyed to him the impression that he would be relieved of a gaol sentence. That is one point. The next point is this: there is an assertion in the record, it - is read into the record in a letter from Mr. Veniot, that the smuggling operation complained of took place before the twenty-seventh day of June, 1925,

the date upon which the new law was adopted. Previous to that date no gaol punishment was obligatory, and the smuggling in this case had actually taken place before the new law went into force. But it was because Aziz happened still to have the goods in his possession, not having disposed of them in the interval, that he was sentenced to imprisonment. The law, however, provides for imprisonment for a term of one year, and he was sentenced to three months' imprisonment only. The judge therefore must himself have made a mistake; evidently he had doubts about his right to send the man to prison, because he sentenced him to a period of three months. There was a promise, in the form of a telegram from my predecessor to Mr. Veniot, to the effect that a revaluation of the liquor would be made, which revaluation had not taken place. These were the facts I had before me and I had no knowledge whatever of the practice in New Brunswick. I have since ascertained that the custom in New Brunswick is that after a man is condemned and after sentence has been passed upon him, it is incumbent upon the private prosecutor to go to the court and solicit the issue of a warrant of commitment which he hands to the gaoler in order that the convicted person may be apprehended and lodged in gaol. That is not the custom in my province but, I am informed that is the practice followed in New Brunswick. Now, the Minister of Customs, who in this instance was acting in the capacity of prosecutor, did not make any request of the judge to withhold sentence. He did not make any request of the sheriff to stay the execution of his writ. The Minister of Customs merely carried out his duties as he had a right to do, giving notice to his own officer in the province of New Brunswick that this man was not to be incarcerated until Mr. Robichaud, the member representing the constituency, could come to Ottawa and confer with the minister. Was there any intent on the part of the minister to keep the man out of gaol? Do my hon. friends believe that was the intent? Some smile now, although some do not. Some of them are going to vote against the Minister of Customs in this case with a great deal of regret. More than one of them will rise in his place and vote through party allegiance.


Arthur Meighen: So far as the first statement is concerned, all who vote against the minister will vote with regret.


Georges Henri Boivin: I thank my right hon.
friend for that statement, and I believe it. I believe the right hon. gentleman would

Customs Inquiry-Mr. Boivin
crucify his own brother with regret but he would do it in order to serve the Conservative party. I would that it were possible for every hon. member to vote according to his own wish and his own opinion; I am quite willing to leave my case in the hands of this honourable House if hon. members are not obliged to follow party ties. Is it a crime for a minister of the crown to say to a member of parliament, "I will wait until I hear you."


Mr. RYCKMAN:: Precious help in election.


Georges Henri Boivin: I told my hon. friend five minutes ago that I had not seen the letter at the time the request was granted; the request was transmitted to me in a very hurried way by my secretarjq sitting on the other side of the desk. But I say now that if I had seen the request and been cognizant of all the other circumstances my conduct would have been the same; I will say further that if this request had come to me from a Conservative member of parliament, my conduct and my reply would have been absolutely the same.
As I said a moment, ago, I had no intention of keeping this man out of gaol if he were guilty; on the other hand, I had no intention of letting him go to gaol if I could help it if, on the merits of the case, he did not deserve to go to gaol. That will be made very clear by reference to page 1324 of the evidence, where you will find the letter written by the minister to Mr. Robichaud on November IS, 1925, two weeks after I took possession of my desk. I said:
I have before me a memorandum concerning the case of Mr. Moses Aziz, who was condemned by the court *to a fine of $150 and to three months' imprisonment Tor having had liquor in his possession.
The fine of $150 was paid, but the execution of the warrant of commitment was temporarily suspended.
I have examined the case with care, and I can find ho reason for which the imposed sentence should not "be executed, but I will keep the matter in suspense *Until I get a reply from you, in the event of your *having other representations to make to me.
The officers of the department contend that the efforts made to prevent smuggling of liquors will be much lessened if this man is let go without further punishment.
Yours very devotedly,
Geo. H. Boivin.
I think it only fair to the hon. member for Gloucester (Mr. Robichaud) to say that he immediately answered this letter, and under date of November 25, wrote as follows: Honourable and Dear Sir,
Referring to your favour of November 18, on the subject of penalties imposed on Mr. Moses Aziz, for having had liquors in his possession, will you please do 14011-307
your best to suspend all proceedings until I see you *when I return to Ottawa.
With an expression of my best sentiments,
Yours truly,
(Signed) J. G. Robichaud,
*	Member for Gloucester.
Hon. members should remember that it was then pretty well decided that the House should meet on December 10, so the delay asked for was not long. It was after this date that the papers throughout the length and breadth of Canada carried a notice that my good friend from Vancouver Centre (Mr. Stevens) intended to demand a parliamentary inquiry to probe into the most hidden recesses of the administration of the Department of Customs and Excise. This case was on my desk awaiting consideration. It is true that after this notice had been given I could have called Mr. Robichaud and said, "I am scared; here is a parliamentary inquiry coming on. This man Aziz must get into gaol before they are able to reach his case, so we will be able to save ourselves from criticism." But that is not the conduct I wanted to follow; I wanted to place the record before the committee in the same condition as it was at the time notice was given that such a committee would be constituted, in order that the Department of Customs and Excise might be judged upon its merits and that the minister might be judged according to the crime he had committed.
I think I gave all the extenuating circumstances in connection with the matter when I referred to the fact that the liquor had been imported before the new law came into force; that under the new law, the sentence could not have been for three months; that a revaluation of the liquor had been promised, but had not been made, and hon. members should not forget that Mr. Moses Aziz was not entirely unpunished. He had already paid a fine of $150 and costs of $38, and his liquor had been confiscated. The Minister of Customs had not withdrawn the warrant of commitment, nor had it been annulled; the minister had not given a pardon to Mr. Moses Aziz, but was merely awaiting the further representations of Mr. Robichaud. The proof of that statement lies in the fact that Mr. Moses Aziz is now in gaol, serving his sentence. After the matter had been considered by the committee, after I had given my evidence before the committee and the facts were made known, then and only then did I carry out the suggestion of the hon. member for Vancouver Centre, that Moses Aziz be sent to gaol at once. Then I gave instructions through Mr. Wilson, the chief preventive officer, to send Moses Aziz to gaol.



Customs Inquiry-Mr. Boivin


Mr. CHAPLIN (Lincoln):: When did you
see Mr. Robichaud?


Georges Henri Boivin: On the morning following
my evidence before the Customs committee I met Mr. Robichaud and talked with him in the rotunda opposite this door. I asked him for his additional reasons, if he had any to give me, and Mr. Robichaud said that unfortunately he had no reasons other than those which were already on file, but that he thought those were sufficient. He had given several other reasons concerning the condition of the man's family and the necessity that he be free to provide for them. I spoke with him the morning after I gave my evidence before the committee, twelve hours before I gave instructions to Mr. Wilson to have Mr. Aziz incarcerated.


James Shaver Woodsworth: Before the minister passes on, in order that we may be absolutely clear, do I understand that the minister had not himself actually read the text of Mr. Robichaud's letter when he came to his decision in the matter?


Georges Henri Boivin: 
Mr. BELL (Hamilton):: What is the date
of that?


Georges Henri Boivin: June 7, 1926. That is the opinion of the Deputy Minister of Justice, based upon the law which I have just cited, which is section 266 of the Customs Act; so it is plain, I think, that the minister had the right to act.
Whether it was expedient for the minister to do what he did may be open to question. It may be that owing to the terms of that letter, written by an hon. member and for which I am not responsible-I think the greatest mistake I ever committed in connection with the whole matter was the placing of this letter on the file and bringing it before the committee, when it was marked "private and confidential," but it was done merely for the purpose of showing to the committee that we had nothing to hide, that every document and every letter in connection with the entire case would be placed before them and be entirely at their disposal-it was inexpedient to grant the request, but there is one fact that must be remembered, and that is that the mistake, if any, consists in having delayed the execution of a three months' sentence. There was no pardon granted. Execution was delayed at the
request of a member of parliament who had certain representations to make. I have stated before, and I state again, that if that request had come from a Conservative member of parliament it would have been granted in absolutely the same way. That member would have been heard and the case would have been judged on its merits, in so far as the minister has the right to judge, in so far as the minister has the authority to intervene.
I am informed by the best authorities in the Department of Justice that I only exercised the authority which I had, and after having given the case consideration, after having kept it in absolutely the same position in which it was, to submit it to the Customs inquiry, the case has now been carried to a conclusion and the warrant of commitment has been issued.
Those are the two charges levelled against the minister. I hope that when hon. members come to cast their vote, be it late to-night or some time to-morrow, they will bear in mind the explanation that I have frankly and clearly given, and that they will not be misled by the statement that perhaps will be made by the hon. member who I know, very reluctantly, will bring this case before parliament, and who will endeavour to base his case possibly on the evidence given by the minister himself before the committee. It is true that I said when I was called before that committee, "I may have been wrong in doing this." I had not gone into the details of the case. I had not got this opinion from the Deputy Minister of Justice. I had not gone thoroughly through the record, as I have done since. I placed the case in its true position before the committee, and the hon. member for West Calgary, who has the reputation at least of being a very eminent barrister and counsel, stated that I had done wrong. When he was asking me the different questions, and I was volunteering my evidence, I said, "Yes, perhaps I have, but if I have, those are the facts and that is the extent of my crime."
There is one point right here I wish to bring before the public in the galleries and the people of Canada, and I hope it will be mentioned in the press: In spite of all that this inquiry has delved into and worked over for a period of four and a half months in an endeavour to find something with which they could blacken this government, with which they could blacken the reputation not only of my predecessor but of the acting minister, and even of the Prime Minister and the Minister of Justice, there is one thing which shines out above all others, and that is that

Customs Inquiry-Mr. Boivin
there is not one important official in the Department of Customs, and there is not one minister or acting minister, past or present, who can be accused of having accepted any bribe to interfere with the proper execution of his duties. You may accuse the Hon. Jacques Bureau of having had a great big generous heart; you may accuse him of having been kind and good to his political friends and to his political foes, you may accuse him of having erred on the side of leniency in connection with the punishment of offenders, you may accuse him of having had a little too much confidence in some of his officials in the port of Montreal or elsewhere, but you cannot point a finger to where Jacques Bureau accepted a dollar as a bribe. Neither can you level such an accusation against the Acting Minister of Customs nor at the minister who is now in charge of that department. My opinion of the mentality of the people of Canada is that when a minister gives to the service of his country the best that is in him, when that minister is free from graft and free from corruption, when it is proven that neither he nor his subordinates have been influenced by paltry contributions or gifts of any kind, when it is proven that they have attempted to carry out their duties honestly, and that the only accusation that can be brought against them is that of having been a little too lenient and too generous the offence will be easily forgiven.
The inquiry has consumed four and a half months. I do not want the hon. member for Vancouver Centre or the hon. member for West Hamilton (Mr. Bell)) to think for a moment that in my opinion it has not been of any use w'hatever to Canada. I did say on a public platform in the early days of the inquiry, when there was a great deal of political squabbling, that I feared it would cost an enormous amount of money, and that the money would be entirely wasted. But I am ready and willing to admit that when I made that statement I made it conditional upon the fact that it would be carried on as it was then. I want to make the statement now and give credit to the members of the committee-and I want my hon. friend the member for Vancouver Centre to appropriate whatever credit he desires for himself-that I think the Customs inquiry has done a great good to this Dominion and to the Department of Customs and Excise. It has been of great assistance to the present minister and will be helpful to the minister who will succeed me in carrying on these duties and in preventing smuggling. I want also to pay a tribute to Mr. Sparks of the Commercial Protective Association, with whom I had some misun-
del-standing at the beginning of the inquiry. In my original speech in this House I blamed Mr. Sparks, and I blame him still for the fact that having got information from employees of my own department, he carried it to Mr. Stevens instead of bringing it to the Minister of Customs and Excise. I blamed him for it at that time and I blame him for it to-day; but I will say that the most instructive part of the entire evidence is undoubtedly the recommendations made by that same Commercial Protective Association. I want to give the association due credit for that. I have read these recommendations very carefully. Many of them are very valuable. In my humble judgment they are the most valuable representations made before the committee; and I want to say if I remain in the department as minister I will not only endeavour to carry out the recommendations of the report itself but I will also read in conjunction with it the suggestions made to the committee by the Commercial Protective Association.
There are many other things which I think my hon. friend will admit. One of the things I would like to have him admit is that for the first two and a half months of this inquiry every jot and tittle of evidence adduced before the committee was taken from a report which had already been prepared at the request of the Minister of Customs and Excise by an employee of the government and laid upon the table for the information of members of the committee.
My hon. friends may say: "It is because notice of a motion for an inquiry was given in the press that you gentlemen of the Liberal party hurried to have this investigation made." Now, it is stated clearly in the evidence by no less a personage than Inspector Duncan himself that the arrangements were all made with the Minister of Customs and Excise, that he was on his way to Montreal on November 27, 1925 to start his investigation, and that it was not until the 1st December, or four days later, that we received the first intimation in the press that the hon. member for Vancouver Centre had any idea of moving for a committee of investigation. As soon as I took over the department, after the elections, acting with the consent of the Prime Minister, acting in close co-operation with my good friend the Minister of Finance, who had unlimited confidence in the private investigator of that department, we secured the services of Mr. Duncan. He was sent to Montreal and on December 10th, long before this inquiry ever started, Mr. Bisaillon, who is the man against whom the hon. member for Vancouver

Customs Inquiry-Mr. Botvin
Centre directed most of his thunder in his speech on February 2, had been dismissed from the service. I think for at least three weeks the committee probed andi investigated to determine for their owa satisfaction that the Department of Customs and Excise was perfectly justified in dismissing Mr. Bisaillon.
I may say that Mr. Bisaillon was a very able witness, and the committee came very near not being able to prove that the department was justified, but ultimately they succeeded in doing so.
Other matters brought before the committee of inquiry, in the majority of eases, were taken from the Duncan report. There was no secret about the investigation that was under way at the instance of the department, and if the investigating committee had not been constituted, the process of cleaning up the department would have gone on and would have proceeded, perhaps, more rapidly. I do not say this in any way to disparage the work of the committee; but I do say that from the moment that committee began its sittings I have dismissed no employee we could possibly retain in the service or engaged no persons we could possibly get along without. I do not think there have been more than three dismissals and possibly not more than that number of appointments since the investigation started. I wanted to turn the whole thing over to the committee in order that they might direct the operations of the department as they thought best1 and carry out the authority with which they were vested by the House in the most effective way. My hon. friend the hon. member for Vancouver Centre attempted to exercise authority during that period as Minister of Customs and Excise. He went over to the department and gave his own personal instructions to the acting deputy minister, Mr. Taylor, and told him how to carry on and who to engage in connection with a certain case in the city of Regina.


Henry Herbert Stevens: That is absolutely wrong.


Georges Henri Boivin: I am not blaming my hon. friend for that. I do not know what is wrong about it. That is what my hon. friend admitted himself in his own correspondence.


Henry Herbert Stevens: No.


Georges Henri Boivin: My hon. friend went over to see Mr. Taylor, who is a very efficient employee, and gave him instructions.


Henry Herbert Stevens: No.


Georges Henri Boivin: He gave him facts in confidence.


Henry Herbert Stevens: Will the minister permit me?


Georges Henri Boivin: Yes.


Henry Herbert Stevens: I gave Mr. Taylor no instructions whatever. I handed him all the information and left the matter with him. I did not know who they were retaining; I knew nothing whatever about it. I gave him no instructions and gave him no recommendations other than this one thing: I asked that the case be prosecuted to the limit-that is all.


Georges Henri Boivin: The letter reads:
Some weeks ago there came into my possession certain very damaging evidence of extensive excise frauds, forgeries of bogus labels, possession of customs seals, etc. on the part of certain notorious individuals an that city. I at once realized that; if these were exposed before the committee, it would probably result in the destruction of evidence that would bring about a conviction, and I realized it was more of a police case, than one for investigation before the committee.
I took the matter up with Mr. Taylor, now acting chief of tile Department of Customs and Excise. At this point I wish to state that in my estimation Mr. Taylor has been and is doing his best in the case. It appears, however, that certain influences in the government ranks are exercised to prevent this case from being successfully handled. The facts are as follows:
1. I handed all my confidential information to Mr. Taylor in confidence.


Henry Herbert Stevens: In confidence so far 33 names were concerned.


Georges Henri Boivin: Yes.
I handed all my confidential information to Mr. Taylor in confidence.


Arthur Meighen: Not much in that.


Georges Henri Boivin: No, certainly not. My hon. friend will go to Mr. Taylor and he will say "I will allow you to tell the minister that 1 place the case in your hands, but I ask you to retain in confidence the information I gave you and not to tell the minister the names of the people against whom action is to be taken."


Henry Herbert Stevens: No, that is not it.


Georges Henri Boivin: "In confidence so far as names are concerned?"


Henry Herbert Stevens: Confidence in so far as certain names mentioned being published and nothing else-no other reservations.


Georges Henri Boivin: That is not what the letter says.


Henry Herbert Stevens: Oh yes.


Georges Henri Boivin: My hon. friend's interpretation may be that, it means in confidence only so far as the publication of names is concerned; I do not know what Mr. Taylor's

Customs Inquiry-Mr. Botvin
understanding was, but I know the confidence was so well kept that the minister did not know anything about it.


Henry Herbert Stevens: It was stopped very shortly after he had learned the facts.


Mr. BO  IVIN@: The minister did not know until he received a copy of thi3 letter yesterday anything whatever concerning the case. I ask my hon. friend to accept that as a true statement. Yesterday the Prime Minister was kind enough to give me a copy of the letter written to him by the hon. member for Vancouver Centre, and that was the first time I learned that the Royal Canadian Mounted Police were working upon this particular case at Regina, the first time I ever knew that any man named Bryant had represented the department, and the first time I ever knew that a man named Anderson ever conducted any case for the government in Regina.


Henry Herbert Stevens: The Minister of Justice knew about it.


Georges Henri Boivin: That may be. The attorneys were always appointed by the Minister of Justice. Then there is the Cohen case. The letter says it has been dragging through the courts since last October, that Cohen is a rich, influential citizen of Montreal and a notorious smuggler, and that the chief of the preventive service did not know anything whatever of the frame-up. Referring to the Royal Canadian Mounted Police, my hon. friend from Vancouver, when he made his speech on the 2nd February, stated that there was no better body of men in the world.


Henry Herbert Stevens: I agree with it now. My hon. friend need not bother about that. Take it as read.


Georges Henri Boivin: I will take the statement as read. I thank the hon. member for his confirmation.


Henry Herbert Stevens: Leave them alone and they will do their duty.


Georges Henri Boivin: The Cohen case was confided to them for the very same reason that the hon. member for Centre Vancouver did not want to confide the Regina case to the chief preventive officer in whom he had no confidence.


Henry Herbert Stevens: No my hon. friend is
wrong.


Georges Henri Boivin: The chief of the preventive service was at the beck and call of my hon. friend for Vancouver Centre from the beginning of the inquiry to the end, part of the time authorized by resolution, and part of [Mr. Boivin.J
the time not authorized. The chief of the preventive service placed in the hands of the hon. member for Vancouver Centre copies of certain documents that the hon. member moved for after he had the copies in his possession.


Henry Herbert Stevens: I do not recall what they are.


Georges Henri Boivin: I could give the hon. member a list of them. They are in connection with the correspondence and the files from Bisaillon's office in Montreal.


Henry Herbert Stevens: In justice to that officer, whatever blame the minister wants to attach to me, I wish to say that he did not hand me that correspondence, and as far as I know he has never handed me any correspondence except the files of the department. The minister is exceedingly unfair to him when he says that Wilson was at my beck and call; that is entirely wrong. He never acted, as far as I know in any instance, except under orders and direction of the committee- never.


Georges Henri Boivin: Before the applause subsides, I would like to ask the hon. member if it is not true that in connection with eight, nine or more of the cases brought before the committee, Wilson was not asked to take the files and prepare a precis and hand it to the committee, so that they would have a better case presented to them next day.


Henry Herbert Stevens: Never so far as I know, did Mr. Wilson under any circumstances, except under an open order of the committee, prepare any precis. I do not remember a single instance of that kind, and certainly Wilson would have been derelict in his duty had he not obeyed the orders of the committee.


Georges Henri Boivin: If Mr. Wilson was such an able officer-and that is the admission I wanted to get from the lips of my hon. friend-if he was under the orders of the committtee, :f he was in close communion with my hon. friend for a period of four and a half months-


Henry Herbert Stevens: That is wrong.


Georges Henri Boivin: -if my hon. friend has such great confidence in Mr. Wilson, why did he not confide to him, as the chief of the preventive service, the Regina case that he took over to the acting deputy minister of the department and asked him not to mention it?


Henry Herbert Stevens: I will tell my hon. friend why; the acting head of the department was

Customs Inquiry-Mr. Boivin
Mr. Taylor, the assistant deputy minister, the proper official with whom the matter ought to have 'been taken up.


Georges Henri Boivin: I thank my hon. friend for the reason he has given. The acting head was the deputy minister.


Henry Herbert Stevens: I did not say that. The acting deputy minister-the assistant.


Georges Henri Boivin: The hon. member went to the acting deputy minister and asked him to confide in these two special officers of the Royal Canadian Mounted Police.


Henry Herbert Stevens: No, I made no suggestion, but he suggested it, and I heartily concurred, and had the mounted police been left alone the case would have gone on merrily.


Georges Henri Boivin: There was no request from my hon. friend that the matter be referred to the chief preventive officer.


Henry Herbert Stevens: Why should I make the suggestion?


Georges Henri Boivin: Because you wish to make it a crime now that another case was conducted without it being referred to the same officer. In the Cohen case the matter was confided to the Royal Canadian Mounted Police.


Mr. WHITE (Mount Royal):: Does the hon. minister suggest that the chief preventive officer conspired in any way with members of the committee? I ask the question in fairness to Mr. Wilson, who is a personal friend of mine.


Georges Henri Boivin: I am very glad that Mr. Wilson has such an influential friend as the hon. member for Mount Royal, but I do say that a man who, like Mr. Wilson, has always obeyed the orders of the committee and frequently disobeyed the orders of his minister certainly does not deserve all this commendation. I will say that a man who receives and transports liquor from one province to another for other officials until he receives a certain appointment and who ceases doing it after that appointment has been given to him, is not one of those officers who deserve the highest commendation and praise even from my hon. friend.


Robert Smeaton White: The minister forgets that Mr. Wilson was chief preventive officer long before the question of the transportation of liquor came up.


Henry Herbert Stevens: The minister is absolutely wrong.


Georges Henri Boivin: My hon. friend says that I
am absolutely wrong. I may be unduly severe, but I am not absolutely wrong?


Henry Herbert Stevens: Will the minister allow
me to interject?
Some hon. MEMBERS. Sit down.


Georges Henri Boivin: My hon. friend spoke for
over two hours and a half.


Henry Herbert Stevens: Only an hour and a half.


Georges Henri Boivin: I think he should at least
let me reply.


Henry Herbert Stevens: He is absolutely unfair
to a man who cannot defend himself.


Georges Henri Boivin: I want to point out that
in the Cohen matter certain information that had been brought to our attention was confided to the Royal Canadian Mounted Police because the preventive officers had informed me some time previously that while Mr. Cohen had been arrested by Mr. Knox, they were not in a position to find any of the other conspirators in the smuggling of the goods. One of these men who is now under arrest and before the courts in Montreal had made the statement that he had influence with not Mr. Wilson-I do not want to accuse Mr. Wilson of anything of that nature-but with Mr. Knox. That statement was reported to me. It may have been a misleading statement; it may not have been true; but it was for that reason that instead of confiding the case to Mr. Wilson or Mr. Knox, I instructed that it be given to the Royal Canadian Mounted Police. If I have been unjust to Mr. Wilson-


Henry Herbert Stevens: 'Grossly unjust.


Georges Henri Boivin: -I may have been somewhat severe in some of my strictures on him, but I will say this, that in many cases to my personal knowledge confidences given to Mr. Wilson have not been respected. Information was given by Mr. Wilson to members of the committee before it was given to the minister himself during the conduct of the committee. That is an absolutely fair and true statement. I regret having interjected the Other matter in reply to the hon. member for Mount Royal.


Robert Smeaton White: If that be
so, I withdraw my remarks.


Georges Henri Boivin: I do not pretend to deserve special consideration in the administration of the department, but will my hon. friends allow me to say at least what I have done since I took possession of the office? The very first act was to start this investigation in the city
Customs Inquiry-Mr. Boivin

of Montreal The moment Inspector Duncan made his first report I had no hesitation in asking council to dismiss Mr. Bisaillon, in suspending some of the employees who were near to him in that office and in removing from the preventive service to the port many of the officers who had given faithful service for many years to the preventive service but who had been closely associated with Mr. Bisaillon. They have remained there ever since. Many of them have been found absolutely blameless by the committee. I hope they will return to their former positions in the immediate future.
As regards the regulations concerning automobiles not only am I prepared to follow out the recommendations contained in the report, but we started months ago putting similar regulations into effect. The instructions now given in the Department of Customs are that every time it is possible for a United States automobile to be returned to that country that procedure shall be followed, and the penalty imposed on Americans who come into Canada without reporting at the border shall be made as low as possible in order that all United States cars may be returned and not placed as a glut on the Canadian market in competition with our Canadian cars.
We have given instructions to do away with the practice, which was becoming prevalent in the department, of customs officers using smuggled and seized cars which had been confiscated and placed at their disposal, of their riding around in cars that had been seized but not confiscated or not sold. In two or three instances the cars were later claimed by the United States owner and they were returned. Instructions have been given to our officers now never to take over or use a seized car except where it is necessary to bring it from the point of seizure to the garage. Every car that cannot be returned to the United States must be sold and officers in the department entitled to cars will be supplied with Canadian oars for their use.
We have endeavoured to get new boats to place on the coast of the Maritime Provinces to prevent smuggling there, but unfortunately matters have been delayed by the fact that our supply has not yet been voted. Hon. members preferred to have us wait until the committee made its- report before voting us the supply required for the preventive service and I did not desire to increase the service until the supply is voted.
There are in the report many recommendations which we shall be in a position to carry out this year. There are some recommenda-

tions which I fear it will be impossible to embody in legislation until the next session of parliament. But I can assure my hon. friend once again, speaking for myself as minister of the department, that the regulations required will be made at the earliest possible opportunity and that every honest effort will be made to carry out the recommendations of the report, as it is finally adopted and approved by this House of Commons.
At six o'clock the House took recess.
After Recess
The House resumed at eight o'clock.


DETROIT AND WINDSOR SUBWAY COMPANY
[Stage Direction]
Mr. FRANK S. CAHILL (Pontiac) moved:
That owing to the late period of the session Bill No. 174, being Bill Ho of the Senate, to incorporate the Detroit and Windsor Subway Company, be placed on the order paper amongst .private bills .for consideration in committee of the Whole this day.
Mr. DEPUTY SPEAKER:: This motion
can be entertained only by unanimous leave of the House. Is it the pleasure of the House to adopt the motion?
.Mr. MEIGHEN:	The hon. member has
been good enough to consult me about this bill, of which I know nothing at all. He informs ,me that the hon. member for West York (Sir Henry Drayton) desires to have it proceeded with, and under the circumstances I agree.


[Stage Direction]
Motion agreed to.

[Stage Direction]
The House resumed, from June 18, consideration in committee of Bill No. 95, to incorporate the Red Lake and Northwestern Railway Company-Mr. Heenan-Mr. Duff in the chair.
On section 1

Incorporation.
Mr. SLTHERLAND (South Oxford):: When this bill was before the House on Friday last objection was taken that it had not been reprinted as amended and, further, that we had no statement from the Minister of Railways (Mr. Dunning) as to the policy of the government with regard to the granting of charters for railways such as the one here contemplated. This is an independent company asking for a charter and, as I pointed out the other evening, as a result

Red Lake Railway Company
of the indiscriminate granting of railway charters in Canada, without regard to public convenience and the absence of any well defined system controlling rivalry, we find ourselves in Canada with two competitive lines of railway, the government having been forced to assume responsibility for upwards of 22,000 miles. There can be no question that the Canadian people have paid dearly for their railway experience, and it passes my understanding how the government can sit quietly by and allow such a bill as this to come up repeatedly without offering some explanation of its policy in regard to the issuing of charters. This particular bill has been under consideration in different forms during the present session; yet the Minister of Railways sits here without volunteering any information to assist the House in coming to a conclusion in the matter. The Minister of Finance (Mr. Robb) himself on Friday last agreed that we were entitled to some definite statement regarding the policy of the Department of Railways on the granting of charters.
We have seen for years now private companies applying for charters with no intention whatever of building any railways, and always coming back for an extension of time, so that in the long run many of these charters have had to be cancelled entirely. In other 'cases roads have been constructed without regard to convenience or economy, with the result that the country has suffered. In the present, instance we do not know -whether the proposed railway will be built, the only information we have being that a blanket charter is asked for to enable a company to construct a line from somewhere near Hud-san bay down to the Canadian National system. The House ought to know just what the company will do, and whether it sincerely intends to build the road. I do not believe the people mentioned in this charter have any intention of going on with this road themselves. They may represent someone else, but it is quite evident that if this road is operated successfully it will have to be operated by the Canadian National Railway System, and if that is the case by all means let the Canadian National Railway System ask for a charter and go on with the construction of this road, and see that the road is built where it should go and not where it will suit the convenience of some promoters -who may possibly intend to dispose of their charter after having secured it.
I know it will be argued that there is provision in this bill that unless the company does a certain amount of work during the coming year the charter will lapse. That
provision has been in bills before, and we have seen the companies coming back time after time, after having spent a little money, and have their charters renewed. This renewal of charters has been a common practice for years, and I think we should have a clear and definite statement from the minister as to what the government propose doing. We recently had the experience of this government. granting a charter for the construction of a road adjacent to the Transcontinental and Temiskaming and Northern Ontario railways; bonds were guaranteed to the extent of $5,000,000, while an injunction was taken out against the province of Ontario, who did not ask for a dollar, in order to prevent them from building a road there. The people interested were more anxious for a connection with the mining centres tributary to the Temiskaming and Northern Ontario railway than for a road from O'Brien into that territory. I do think the minister should make a clear and definite statement as to what the government intend doing in this connection so that, parliament may have a proper idea of what the passing of this bill may mean.


Mr. DUNNING:: I regret not having had
an opportunity to discuss this matter on a former occasion. I think at one time the bill was talked out, and although many of the members speaking on that occasion asked for a statement from the minister he was not given an opportunity to make one, the time passes so quickly. On another occasion I regret to say that I was not in the House.
The position to-day is the same as it has been for many years. Those who desire to incorporate railway companies in Canada come before parliament with a private bill; that bill is referred to the Railway committee and there examined. The contents of such bills are communicated to the Minister of Railways, who examines them from the point of view of their relationship to other railways now existing or projected. In this case I had the bill examined from the point of view of its relationship to or effect on the Canadian National Railway system, and I was assured that the Canadian National did not propose itself to build into the territory affected at. present. That territory is not regarded by the management as being proven from a branch line traffic point of view, and they therefore do not intend to ask the Minister of Railways to request the necessary money from parliament for the construction of a Canadian National branch. That being the case, the Department of Railways made no
Red Lake Railway Company

objection before the committee to the granting of a private charter.
But I would like the committee to remember that the right to grant charters of this kind is inherent in parliament itself. It is true that we might have a government policy of refusal of all private charters. If we had complete government ownership of railways from one end of Canada to the other; if we had no private ownership of railways at all, then manifestly the policy of the government would be to ask parliament to refuse to grant charters for new lines. Inasmuch, however, as we have in Canada at present both government owned railways and privately owned railways, the position is as it always has been, that parliament itself on the advice of the railway committee, which presumably examines the merits of each case, decides whether or not additional private charters shall be granted. In this case I am informed that the line opens up entirely new territory, connecting at one end with the Canadian National main line and at the other with the Hudson Bay railway. Let me repeat that the management of the Canadian National Railways are not prepared at present to recommend to parliament the expenditure of public money necessaiy to build a branch line into this area. That being the case the Canadian National Railway leaves the matter entirely in the hands of the Railway committee of this House to determine whether, in all the circumstances, private parties should be permitted so to do.


Arthur Meighen: I have not given
particular attention to this measure, and I am free to admit that there may be some special considerations appertaining to it, but on the general subject of policy with respect *to private charters I am far from satisfied1 with the statement .made by the Minister of Railways (Mr. Dunning). He says that we have a government owned system which is not itself a monopoly; we have as well a great privately owned system and consequently, under these circumstances, the government simply examines any application from the point of view of the desirability of reserving the territory to the National system. If the government come to the conclusion that the territory is not such as the National system now desires to enter they simply leave it to the Railway committee of parliament to decide whether or not a private company shall get a charter.
I would like to suggest to the minister that the time has passed when any administration in this country should content itself with such

an attitude. It is true that we have not a government monopoly; it is equally true that we have no competitive system with a variety of railway companies such as other countries enjoy, the United States for example. We have proceeded in the evolution of our railway policy far beyond the point reached) in most other countries, and having reached the stage where we have one great publicly owned system and another great privately owned system we certainly have reached the point where we must consider whether we will grant any more charters to heterogeneous companies here, there and everywhere, for the construction of little one hundred or two hundred mile railways. These railways, when they are constructed, are certain either to be failures, thus bringing discredit upon Canadian finance, or if they are successful they are bound on the one hand to detract from the earning capacity of the great private system and thereby hold up railway rates, or to detract from the earning capacity of the great publicly owned system and therefore injure the country as a whole. One of these two results must ensue from the creation of privately owned railway companies anywhere, in competition with the two great systems we already have. I cannot see how any result beneficial to the people generally can ensue which could not have been attained much better by another route. Let me .repeat:	If
the railway proves a failure as a commercial venture then there is the repercussion back on Canadian credit, which is injurious to the country as a whole. If it proves a success it simply means that the new railway has invaded territory which in the general interest should have been conceded either to the private company on the one hand or reserved for the public company on the other. I do not think this reasoning can be very well challenged.
If these are the only consequences, all of them are injurious to the country, and for my part it would take a very powerful array of special circumstances to convince me that there should be an exception made in respect of a road either to Red lake or to any other territory. I would think the government Should very carefully consider whether or not we have reached the time when the granting of private railway charters to third companies, new organizations, should be done away with once and for all.


Charles Avery Dunning: There is a great deal of force in what my right hon. friend says in thus connection. He recognizes, of course, that the adoption of tba* attitude absolutely would

Red Lake Railway Company
be an entirely new departure, and one which therefore should be given very careful consideration. May I also point out for his consideration-and in this connection I am not discussing the merits of the present bill or of the proposed railway-that the provinces also have the power to grant railway charters; they can and do, and in the last sessions of many of the provincial legislatures charters have been granted to private parties for the construction of railroads entirely, of course, within the borders of the province. So the object sought by my right hon. friend cannot be wholly attained merely by this parliament refusing the granting of such charters. Also I am informed'-I should say this in fairness to the present proposal-that the proposed line will in any event be a feeder to the Canadian National system and will connect only with Canadian National lines.
We are in this awkward position in considering the matter. Parliament from time to time gives consideration to branch lines proposals put forward by the Canadian National and by the Canadian Pacific railway. It may! very well be that for reasons which seem good to the government or to parliament for the time being, it is not advisable to extend into an area such as the one now under discussion, and the important and difficult question which prevents me agreeing altogether with my right hon. friend is this:	Shall we
say, because parliament cannot see its way clear to vote public moneys for the construction of a line that therefore that particular area of country shall be left without railway transportation? That is a difficult question, and it is rendered still more difficult in its relation to general policy by the other fact which I mentioned, that every provincial legislature in Canada has the power to grant railway charters within its own borders.
In connection with the present case, inquiry was made of the government of the province of Ontario, and I understand that the premier of that province indicated that the government of Ontario had no objection to the granting of this charter.


Mr. HEAPS:: Were similar inquiries made
of the province o'f Manitoba?


Charles Avery Dunning: I cannot say whether the committee made any inquiries of Manitoba, but I can say this:	At the last session of the
Manitoba legislature, I believe I am correct in saying, a number of charters:-at least two *-were granted to private parties for the building of railways. Therefore I presume that so far as the province of Manitoba is
concerned it would have no objection to the granting of private charters as a matter of principle; and it is the matter of principle that I am discussing.


Abraham Albert Heaps: Is the minister aware that
Manitoba intends to guarantee the sum of $25,000 per mile for the building of a railway from Winnipeg into the Red lake area?


Charles Avery Dunning: I am not aware of that fact. That would be a consideration, of course, which, if it is correct, would affect this committee in arriving at its decision in respect to this particular charter. But I do submit to my hon. friend that that is not a question which affects the principle of the whole matter that we are now discussing. If anything, it lends force to the principle and illustrates the difficulty of deciding now, once for all, whether we shall have no more private charters granted in Canada. I am personally doubtful if we have yet reached the point where we can definitely say that no more private charters shall be granted. With regard to this particular application, the committee can give consideration to it as it sees fit. The minister and the Department of Railways do not recommend. We merely say, having examined the proposal from the point of view of the nationally owned system, that we cannot urge any objection from that point of view, for the reason that the nationally owned system is not presently prepared to propose the expenditure of public money for the construction of a branch line into the district affected.


Donald Sutherland: Has the government of Ontario or the premier of Ontario had any communication with the Department of Railways with respect to this road? If so, why not place the matter before the committee?


Charles Avery Dunning: I am informed by the
railway committee that no communication with the department was had, but I am also informed that there was communication from the premier of Ontario to the committee on railways.


Mr. MACLEAN (York):: I have listened to what the Minister of Railways has said. He is trying to get away from a decision that was practically reached by parliament and this country that we are over-railroaded in this country. It is the present over-railroading that is one of the causes of the great railway problem we have upon our hands, and the Minister of Railways ought to be on guard to prevent a further aggravation of that con-

Red Lake Railway Company
dition by the frequent granting of charters to private companies. It is something we must stop.
There is no hurry for this road. As a matter of fact Red lake is being supplied to-day by communication from the air, and a good service is being provided, with people and supplies getting in and out of that area with little trouble. If there is anything in this Red lake proposition it will show itself during this summer; then the Canadian National Railway may be prepared to build into that territory and Manitoba would be in a position to decide whether or not it would do so. There is no hurry for this proposition at all, except on the part of certain gentlemen who want to follow the example that was set in this House by the government a very short time ago in connection with the building of a line into the Rouyn gold field in the province of Quebec. A local company was incorporated in that case to build from Amos into the Rouyn gold field; that private road is now being built; the company is issuing bonds and will get the benefit that comes to such a company in the exploitation of such an entre-prise. We want to stop that. The minister has not yet explained why it was necessary to employ a second company to build an extension from Amos into Rouyn. To-day the whole mining belt of northern Ontario and this new mining belt in Rouyn is being supplied by one or other of two great public owned roads. The Canadian National is serv< ing the Rouyn territory, and the province of Ontario, by its enterprise, has covered the whole gold and silver fields of Ontario with the Temiskaming and Northern Ontario railway, which has a dozen branches through all that territory.


Charles Avery Dunning: My hon. friend is forgetting the Algoma Central.


William Findlay Maclean: I know, but the mining country of northern Ontario is being absolutely served now by public owned railroads, either the Canadian National which goes through Sudbury and all that mining district, or the Temiskaming and Northern Ontario railway, which goes through Cobalt, Kirkland lake, up to Timmins, and through all the great gold fields in the province. We are only beginning to develop the mining camps in Ontario; they are growing every day. Gowganda is coming back, and all we want to do is to keep that country for the two publicly owned lines. I believe these two lines will eventually co-operate in some way to cover the whole of that country. If we have made a success of the Canadian National covering the whole continent, cannot we do

better by building our own railway into this territory, into the mining fields of Ontario and Quebec, of Manitoba and the whole west? We are supplying these fields to-day either by the National lines or the provincially owned lines of Ontario, and the people are getting extensions just as fast as they are warranted. I am convinced the Temiskaming and Northern Ontario will build this summer from a terminal called Elk Lake into the Gowganda mining camp, on to Leonard and Shining Tree, and from there to Westree, where they will connect up with the Transcontinental. We do not want any more of these private companies. We have had enough of them. We have had to take up the mess they left, and pay for it. We have got far more miles of railway than we want in this country, simply because we have been over-railroaded and over-exploited by private individuals who came to. parliament and got- charters. So I intend to move, Mr. Chairman, that this bill be sent back to the committee and in that way taken off the order paper. We shall then see w'hat the developments will be in the Red Lake district. If it is shown that there is necessity for this railway it will be built; I have no doubt the Canadian National will build it if the occasion arises. In the meantime the aeroplane service will supply the necessities of that camp in every way. It is already giving a mail and express service, and taking in passengers. They can go in very quickly by aeroplane, whereas t'he journey now takes from two to three days by railway and waterways. I am also told that the Ontario government now have before them plans for the building of a roadway from Hudson right into Red lake. In the meantime let us stop this over-exploitation of railway charters by private individuals. Accordingly I move that we refer this bill back to the committee for further consideration, and that will end the matter for this session.


Abraham Albert Heaps: I second the motion.


Mr. HEENAN:: The hon. member (Mr. Maclean) said the Ontario government has a plan before it at the present time to build from Hudson into the- Red lake district. That is not a fact. Let us stay with the facts at any rate, even if we do -refuse to pass the bill. One of the reasons the bill was referred back from the Railway committee was to ascertain whether the Premier of -Ontario had any objection to this railway, and he has written a letter stating that he has not. I could not conceive of his writing

Red Lake Railway Company
such a letter if the Ontario government had any such intention as my hon. friend stated. The initial point of the proposed line of railway is over three or four hundred miles away from the Temiskarning and Northern Ontario railway, so that there is no doubt that that railway is not going to extend to the territory in question for quite a number of years, if ever.
One would think from the discussion which has taken place this evening that private investors ought to be debarred from developing this district. I notice, however, that only applies where the district is unorganized and without boards of trade or councils that could make representations to this House. For instance, in the Railway committee this morning we had under consideration a private undertaking for the tunnelling of the Detroit river. No one in that committee ever suggested that such a tunnel would take away traffic from the Canadian National Railways, and yet as a matter of fact it would. However, no objection was raised to it. Then, too, there seems to be no objection as to private concerns operating in Winnipeg, Toronto or Montreal; but when it comes to :a remote district, Where the population is scarce, and where the proposition is one that everybody can block and make a political football of, private investors seem to be .debarred. What we want is a railway in the Red lake district, and we care not whether it is built by the Canadian National, the *Canadian Pacific, or a private corporation. The Canadian National Railways have already announced, through the minister or his deputy, that they have no intention of building immediately into that country.
Now what is the worst that can happen if this bill carries? A private corporation can invest their own money in the building of a railroad that will be a feeder to the Canadian National railway if it is a success. If the enterprise is not a success, it is the investors that will !be out; they will have lost their money. I have received twenty-one telegrams from clubs, municipalities, and development boards in the northern part of the country asking that this railway charter be granted, and I hope the House will see to it that that part of the country is not held back from development. So far as the Ontario government is concerned, they granted a charter the session before last to a private concern for a railway right north of the twin aities of Port Arthur and Fort William. Evidently therefore the Ontario .government are not blocking avenues to
private investors. The hon. member for North Winnipeg (Mr. Heaps) stated that the Manitoba government have granted a charter to some private concern to build into the Red lake district, and are backing the enterprise to the extent of $25,000 a mile. Let me point out to my hon. friend that it is impossible for the Manitoba government to do that; they cannot grant a charter for a railway to build into Ontario, they can only charter a railway to the Manitoba boundary. What we need in that part of the country is transportation for carrying supplies and people into the Red lake territory, to which hundreds of people are flocking daily. The hon. member for South York (Mr. Maclean) advises people to go in by aeroplane. Well, the aeroplane may be a quick method of transportation, but there are a lot of people who prefer travelling by railway to travelling in the air. On behalf of the people in that part of the country I appeal to the House to grant this charter.


Donald Sutherland: Before the hon. member sits down, would he inform the committee as to the mileage covered by the charter asked for in this bill, that is to say from a point at or near the village of Quibell to a point on the Hudson Bay division of the Canadian National railway at or near The Pas?


Peter Heenan: It is about 125 miles from Quibell to Red lake, and I think it is 450 or 500 miles from the point on the Canadian National Railway at Quibell to the junction with the Hudson Bay railway.


Mr. NICHOLSON:: To me there seems
to be some little misunderstanding with regard to the application that is before the House in reference to this Red lake charter. In the first place such a branch line cannot be a competitor of the Canadian National railways. Whatever else it may become, it cannot compete with that system. The only line to which it can deliver any traffic it may gather is the Canadian National Railways. It is running at right angles hundreds of miles away from any other branch line whatsoever. When this bill was first before the committee I asked that it be held up until we got further information with respect to those who were promoting it, and the reasons why the charter was being asked for. Having inquired into the matter I came to the conclusion that parliament could safeguard itself and still allow this charter to be granted, it being clearly understood that people putting any money into the enterprise are doing

Red Lake Railway Company
so with their eyes wide open and will lose that money if the line is unsuccessful. My understanding, after making inquiries, is that in the first instance the people who are going in there in an effort to develop the country are desirous of building a light railway or tramway in order to get in the machinery and equipment necessary for development purposes. If the country proves to be what those who are interested hope and believe it will, the promoters, having built a light railway or tramway, would have a vested right . and could go ahead and build a line that would serve as a feeder to the Canadian National railways. Or the road itself might be taken over by the Canadian National Railways if they so desired; but that system would be under no obligation whatever to take the line off the hands of the promoters. If this charter is refused it simply means, unless the Canadian National Railways are prepared to go ahead and build the line, that the men who are in that district endeavouring to develop the country have no means by which they can get their equipment in. It is all very well to talk about bringing in supplies by aeroplane. Some people and mail matter can go in by aeroplane; but you cannot take diamond drilling outfits and hoisting machinery, with all the things that go to equip a mine, by areoplane. There is provision in connection with this charter by which the line can ultimately be extended, but they must do everything they are going to do this year, as I understand it. If the country did so develop that they could go right straight across from the line of the Canadian National to the Hudson bay, they would then be serving the Canadian National as feeders at both points. If the proposition is examined I do not think there can be any real objection to allowing the charter to pass and permitting these people to build the line this year as they desire to do.


William Duff: The member for South York (Mr. Maclean) has moved that the bill be referred back to the committee on Railways. Canals and Telegraph Lines. I have to rule that that motion is not in order, as the only time such a motion can be put is when the chairman of the committee rises to report progress.
Mr. O'NEILL: Before the hour passes and the usual burlesque with reference to this road is repeated, I desire to put myself on record as being in favour of this project, in view of the fact that there are some three or four thousand prospectors in that district, ninety per cent of whom are from my constituency. To my mind the statement that
rMr. Nicholson.]
Canada has been over-railroaded will not bear investigation. The main problem before the statesmen of to-day is to deepen the country. This road runs at right angles to the Canadian National, and any contention based on the dog-in-the-manger attitude on the part of either of the two large railroads in the country is no argument against the granting of a charter for the construction of this road. I know the people behind the project; I know that they have large commitments in that district, and it is in their interests and in the interests of the people in my constituency that the road should be constructed. I am in favour of the undertaking and I appreciate the remarks of the Minister of Railways in this connection. I did not have an opportunity to discuss the matter personally with him, particularly because I was not connected with the introduction of the bill, but I am much interested in it; a great number from my riding now have holdings in that country.
The statement has been made that the Backus interests are behind this project. I have absolute knowledge to the contrary. The statement of the hon. member for North Winnipeg (Mr. Heaps) to the effect that Manitoba is backing up a project to build a road into Red lake was refuted by the hon. member for Kenora (Mr. Heenan) who stated that that was merely a provincial charter. The province of Ontario has always been anxious to keep its mining country alive. If we have recourse to the same process that they have adopted in Manitoba our mining fields will be at a standstill and in the same position as they are in Manitoba. I might go further into the details of the matter, but at present I simply put myself on record as being very much in favour of the bill.
Mr. _ EVANS: On former occasions I have opposed this project for well defined reasons, and I have had no cause to change my mind. I believe this project to construct a railway into the Red lake district is not in the interests of either that part of the country or the country at large, and it cannot but prove detrimental to the welfare of the Canadian National Railway. The Red lake district can certainly be more efficiently served by a branch line from the Canadian National than by having a separate company owning and operating a short line of railway. One point that strikes me is that no one from that district has asked for a line of railway into Red lake. A few prospectors, it is true, are behind the project.


Peter Heenan: I stated that I had received twenty-one telegrams from the people of that country.

Red Lake Railway Company


Mr. EVANS:: The hon. gentleman, if he wishes, can speak again when I am through. These people ask for a charter. As soon as they obtain it they will have something for sale, and for sale it will be sooner or later, when either the Canadian National or the Canadian Pacific will have to take it over. When the need for a railway is made known in that district I shall be one of the first to advocate its construction by the Canadian National Railway. This country is commited to government ownership, and since we have over fifty per cent of our railways under government ownership and operation, the reasonable thing to do is to go forward and develop a complete system of government ownership and operation of our railway services. These roads must be operated and controlled by the people in the interest of all the people. It is a public utility and therefore should never pass out of the hands of the people. If we grant a charter in this case it will be a precedent for granting further charters for like branches, and in the future we shall have a railway problem even greater than that which is on our hands at the present time. Why should Canada take a step backward and create a precedent in this instance? Out of sixty-five countries of the world, fifty-one own and operate their railways. It is interesting to note that of all the countries Belgium is the only one that has owned and operated her railways from the beginning. It has often been said that government ownership is not a success when applied to public utilities, but I do not think there is even one advocate of private ownership who will say that our postal sendee should go back into private hands. The greatest argument for government ownership of railways is the fact that out of all the countries of the world fifty nations have, found private ownership a failure. I am giving the House this information on the authority of one Mr. E. B. Biggar, who wrote some articles on this subject some years ago. All the great dominions, apart from Canada and India, operate their railways through government ownership and control. In addition to that, out of seventeen crown colonies and protectorates in the British Empire, twelve have government ownership of railways. Surely therefore the reasonable thing for Canada to do is to go forward with government-owned and operated systems of railways. These countries and colonies are among the most highly developed and civilized in the whole world. They have adopted government ownership, and not through lack of private enterprise either. I think it can very well be said, particularly since the war, that the people of all countries are coming to
realize that public utilities should be owned and operated by the people in the interests of the whole people, and not as a source of private gain for private companies. Indeed it would be just as reasonable, in my view, to have our highway system owned and operated by private concerns as to place our railways in private hands with the one idea only of private gain. Shall Canada now take a step backward and grant a charter to a company which has no other idea than to exploit the public and our natural resources for private gain? Surely we have done with that policy regarding our railways. Since we have more ithan fifty per cent of our railways under government ownership and control, I say again it is the reasonable thing to go forward towards a complete system. It does not take much imagination to see the immense unearned increment that will in the future, through growth of population and industrial development, accrue to our private railway companies. All this must be appropriated from now on for the use of the state and not given away for the enrichment of a particular class in the community or a particular company which has no other idea than to exploit the people for its own private gain.
The whole sum of life is no doubt composed of trifles, and it is of such trifles as this charter represents that the great sum of over $2,000,000,000 is made up which represents our railway debt. This little charter, according to one of the promoters, represents just the beginning of another transcontinental railway. It is only part of a scheme to tap the tremendous resources of our hinterland and to exploit the people by so doing, to exploit the public in railway service and deplete our natural resources for private gain. Mr. Biggar, to whom I have already referred, has laid down a few well-defined rules regarding the public utilities of a country. Of the railways he has this to say:
X. The railways of a country are its main highways and therefore should not pass out of the control of the people.
2.	There is no source of revenue for a railway other than the rates imposed for carrying persons and goods.
3.	This revenue is raised, not from any hidden fountain of wealth within the railway itself, buit from the proceeds derived from the economic activities of the entire people.
4.	By the division of labour in the modem state everyone who earns and spends money contributes to the cost of railway service, and this cost enters into practically every article used by the people.
5.	The maintenance of a nation's means of communication is a function of sovereignty, which should not be permitted to be exercised by private individuals for their own benefit.
6.	Since ail the people contribute to the cost of railway service, railway rates become essentially a national tax. And in all highly developed countries,

Red Lake Railway Company
railway rates make up the largest element in taxation. It is of fundamental importance that the people should retain control of the machinery through which they are subject to taxation.
The people of Canada have only the satisfaction by taxing themselves of making good the yearly deficit on the railways that we have at present. It seems unreasonable to add to our burden by projects of this kind. The granting of this charter will mark the beginning of a system calculated to cripple the National system. Efforts have already been made to create in the minds of the public an attitude that will prepare the way for complete private control of our railway service. The privately-owned system is often pointed to as such a wonderful success in comparison with the nationally-owned system, which certainly from the very beginning consisted of just so many mistakes from a utility standpoint. The Canadian Pacific to-day is held up as an illustration that private
9 p.m. ownership is the only successful way of operating a railway. That is not just the way to look at it. We are -all supposed to jubilate when this great -private company makes known its annual [DOT]earnings and dividends and the great surplus earnings that are yearly carried over to its reserve. But the fact is that the public should come to realize-


William Duff: Order.
The hour for private bills having expired, -the Speaker resumed the chair.


CUSTOMS INQUIRY
[Stage Direction]
The House resumed consideration of the proposed motion of Mr. Mercier (St. Henri) for the adoption of the third and final report of the special committee appointed to investigate the administration of the Department of Customs and Excise, and the proposed amendment thereto of Hon. Mr. Stevens.
Georges Henri Boivin: Mr. Speaker, when the House rose at six o'clock I had almost concluded my remarks. I had, I think, refuted, in a manner that would! convince any hon. member or any oitizen of Canada, the charges and allegations made against me personally in connection with the two matters mentioned by the hon. member for Vancouver Centre' (Mr. Stevens). It was at that time my intention to reply to the allegation contained in the amendment to this *effect:
The Prime Minister and the government had knowledge for some considerable time of the rapid degenera-

t.ion of the Department of Customs and Excise, and their failure to take prompt and effective remedial action is wholly indefensible.
I intended to reply ,to that, but I will not take the time to cite the correspondence exchanged between Mr. Sparks, president of the Commercial Protective Association, and the Prime Minister. It is all of record; it speaks for itself. It will diow that from the very moment that the Commercial Protective Association was organized, they received the most hearty co-operation from the different members of the government with whom they communicated. It will show that both from the Prime Minister and from the Minister of Finance (Mr. Robb) they received the utmost aid and assistance. The preventive officers that they chose themselves as being the best available men to prevent the nefarious offence of smuggling were engaged and paid by t'he government. They were later placed upon the staff of the preventive service, but still left at the disposal of the Commercial Protective Association. These officers, while they were paid by the government, remained practically in the employ of the association until late in the autumn of 1925, when the political situation changed matters considerably and when one of the officers of the Commercial Protective Association deemed it advisable-and I have no complaint as to that -to stump the country on the same platform with the leader of the opposition (Mr. Meighen). He devoted his talents and his energies to the interests of the Conservative party and did his utmost to defeat the government now in power; and not only did he exert his efforts during the campaign, but as results will show he pursued them more or less successfully thereafter, from the very moment the votes had been counted until the present occasion. As I observed this afternoon, however, I desire to pay tribute to Mr. Sparks to the extent that the report which was submitted to t'he committee in printed pamphlet form by himself on behalf of his associates is well worthy of note is free from political considerations and will receive careful1 consideration at the hands of the government.
The Prime Minister (Mr. Mackenzie King) will be shown in this correspondence, and especially in the evidence of Mr. Sparks before the committee, as having done all he possibly could to meet the situation at that time, and I wish to assure the House emphatically that there is no reason for hon. gentlemen opposite to attempt to place responsibility for the conduct of the Department of Customs and Excise upon the Prime Minister or any other member of the government since

Customs Inquiry-Mr. Boimn
my entry into the cabinet. Neither the Prime Minister nor any of my colleagues have at any time attempted to interfere with the discharge of my duties. For that reason, if the words "political associates" embodied in the amendment are intended to include my right hon. leader and my colleagues in the proposed motion of censure, I wish to dissociate them from the amendment and bear alone the censure it implies.
I wish to make one observation for the benefit of hon. gentlemen opposite who shortly will be called upon to support this amendment :
Your committee deplores the practice, as revealed by the evidence, of certain men influential in public life to direct appeals to the minister to relax and depart from the proper administration of his department for reasons of political expediency.
Your committee is of the opinion that this practice is detrimental to the best interests of the country and prejudicial to the administration of the department.
I trust that hon. gentlemen opposite w'll bear in mind this fact, that since the commencement of this session members of parliament have come to me with the request to intercede in behalf of some of their electors in cases which in some respects were similar to that of Moses Aziz. Only the other day certain hon. gentlemen were in my office asking that I refrain from imposing a fine on a dealer who unfortunately had exposed his tobacco on his shelves without having revenue stamps affixed to the box; while others have approached me in the interest of civil servants who have been short in their accounts but who have subsequently made amends. I hope that those hon. gentlemen on the opposite side, before voting on the proposed amendment, will reflect for a moment, that the life of the Minister of Customs is perhaps, to use a popular expression, not all that it is cracked up to be. I do not pretend to be at the head of one c,f the most important departments of government; far from it. I do however claim to be at the head of the department whch is probably the most difficult to administer. I would remind hon. gentlemen opposite that when men are obeying the customs and excise laws of the country they never appeal to the Minister of Customs; there is no necessity for so doing. They deal directly with the officials of the department and their way is made easy. But the moment any member finds that an elector has transgressed the law, though sometimes unwittingly, sometimes unwillingly, the tendency inevitably is to come to the minister with a request for clemency. Occasionally the offender is a doctor who is called across the line in his automobile to attend a patient and who is obliged to cross 14011-308
at a point where there is no customs office, so that he is unable to report. Or, it may be, he finds it imperative to cross the line after nightfall. -Sometimes it is an American citizen who does not know that he has crossed the boundary and is therefore on Canadian territory without having reported his car. There are various cases of a technical nature in which a judge, applying the strict letter of the law, would in all probability impose the entire penalty; and such cases are submitted to the minister by members of parliament day after day. One case was laid before me the day before yesterday in which possibly it might be a hardship to exact the fine. A young girl who had recently been employed in a certain store, while the person in charge was absent through illness, failed to open a box of tobacco in the proper manner and so exposed the article on the shelves without having put the excise stamps upon it. If I had granted the request which was made in that case, and had refrained from imposing the fine, I would have been accused, in the event of the matter hav ng been brought before the committee, and if the member of parliament applying to me for consideration had been a Liberal member, of having acted with a view to obtaining political party advantage.
I hope, Mr. Speaker, that I shall be believed by hon. members on both sides of the House when I declare that, if it is my privilege to remain in charge of the department, members not only of the Conservative party but of -the liberal party as well, and my Progressive friends and the Independent members of this House will all be treated alike and that whatever discretion may be left to me will be exercised on the merits of the ease. I do say, however, that if this House of Commons were to remove that discretion it would be rendering the greatest service possible to the Minister of Customs. If it were possible for the minister to direct the general policy of the department, without any power to exercise discretion in any instance, the charge in the Moses Aziz case, which will be launched against me in a few moments by my hon. friend from Hamilton (Mr. Bell), would not be before the House to-night. But I submit that if discretion is to be left to the minister, then the circumstances surrounding any case must be taken into consideration. If it is felt that he should not exercise any discretion at all, then let that discretion be removed. But when that discretion is removed, do not hold him responsible for 'his inability to settle cases nor convey to the people of Canada the impres-

1856	COMMONS
Customs Inquiry-Mr. Bell (Hamilton)
sion that cabinet ministers in Ottawa are allpowerful and that they are clothed with the functions of a judge.
I do not want to detain the House a moment longer, but again I wish to dissociate my colleagues from the motion of censure contained in the amendment moved by my hon. friend from Vancouver Centre. As 1 tried to explain this afternoon that since the moment I became a member of the government I have renounced my private affairs and abandoned my family life. I have devoted sixteen hours every day, and an occasional Sunday, to the service of this country; and if as a reward I am to be voted out of office ito-night, either alone or with my colleagues, I am willing to attribute the action of parliament to the payment of the debt of service that I owe the country I love most, our own country, Canada.


Mr. C. W. BELL (West Hamilton):: I do not know when there has come to me as a member of, shall I say, the late Customs committee, a moment filled with quite so much gratification as that which I experienced this afternoon when my hon. friend from Vancouver Centre (Mr. Stevens) rose to his feet and was greeted as he was by this House. I could conceive of nothing more fitting, more reasonable and more just than that he who has shown such great courage, such great loyalty and such gTeat devotion to the affairs of this country and to all whose responsibility he has undertaken to see through, should render to the House an account of his stewardship. I am glad to be able to add to the remarks that he has made, as well as to those of the hon. gentleman who has just taken his seat (Mr. Boivin), the expression of our appreciation of the loyal, kindly, splendid service that has been rendered in this inquiry by the chairman of the committee. I can only say of the chairman, not having had the privilege of his acquaintance until coming here this term, that I feel the experience gained in my association with him has been such as to command a lasting friendship which, for my part, I shall be very proud to hold.
And, Sir, there is one other of those who laboured in connection with the work of this committee who, I think in simple, common justice, should be mentioned to this House tonight; I refer to Mr. R. L. Calder, K.C., who acted as committee counsel. The Conservative members of this committee were severely criticized in certain quarters when they readily agreed * to the selection of Mr. Calder as counsel for the committee, because it was felt that he who had been the political opponent of the present member for Mount TMr. Boivin.]
Royal (Mr. White) in the last election would perhaps have such a coloured viewpoint in the inquiry to be conducted that there would be a large measure of partisanship in his work. It is justice and not generosity to Mr. Calder to say that the element of partisanship was, from beginning to end, totally lacking. Therefore I deem it all the more unfortunate that this afternoon the Minister of Customs should have said that there was an effort made extending over some four months to attack and blacken the Department of Customs. If such an effort was made, with that loyal counsel exercising his functions and performing his duties in the most impartial way, I should like to know from what source it came. Unhappily the evidence adduced before the committee leads to but one conclusion, that the department has been blackened by those in charge, and not by this party.
The minister spoke truly when he told the House this afternoon that I, to whom has been delegated the task of saying something to the House dealing with the minister's conduct in connection with the Aziz case, would engage in that task most reluctantly; he has never spoken a truer word. It is with the greatest reluctance that I begin my task now, and I will go further and say that it is with a feeling of deep regret that I lay before the House certain facts and circumstances, unhappily both many and important, which go to show that the minister, however ready he may be to assume responsibility for the delinquencies of his party, is not one whit behind the leading members of the cabinet, including the Prime Minister (Mr. Mackenzie King) himself.
As one might well believe, Mr. Speaker, I listened with the greatest of interest to the defence made by the minister this afternoon of his colleagues and of his own conduct in office, and I am bound to say that, with my familiarity with these facts of which he was speaking, if I had any doubt before of the delinquencies which had occurred, the minister's own defence resolved those doubts for me. That is why I feel that we on this side of the House approach and deal with the facts as they stand by themselves without any spirit of partisanship or prejudice. Unhappily these facts, considered even in the most favourable light, are such as to render it impossible lor any self-respecting government and any self-respecting minister to remain longer in office.
The minister is surely master of his own method of procedure in this case, and he found it necessary to begin his argument by reading a letter which he had received from a man who was named as having been de-

Customs Inquiry-Mr. Bell (Hamilton)
linquent in his duty. This man was unanimously so named by the committee, because the evidence permitted of no other conclusion. If I am wrong in saying that the minister had the opportunity, if he so desired, of placing that man's position more favourably before the committee than it actually was placed, I know the minister will correct me. The minister approached the matter in such a way as to indicate some sympathy on his part for this man who, according to the unanimous decision of the committee, had utterly failed in his duty.
The minister has told us that during his term of office he at least had the advantage of enjoying the confidence of the Prime Minister of Canada. Let me say, Sir, that it is fair comment after listening to the evidence given before the committee that some do not apparently find it very difficult to enjoy that confidence.
The report brought in by the committee, as the House already knows, dealt with a number of ways in which the department has been degenerating for the past three or four years, and made a formal finding to the effect that the degeneration, through the lack of appreciation of responsibility on the part of the preceding minister, Mr. Bureau, had been greatlj'' accelerated. Perhaps it is worthy of comment here that the majority of those who sat on that committee, although this degeneration had been continuing for some time and had recently been accelerated to a very large degree, refused to find that this degeneration- had continued under the regime of the present minister. If there was any effort made before the committee to show that in the regime of the present minister anything was done to bring the department back to its former high estate, I would be glad to have that evidence pointed out to me. I think the facts point undoubtedly to the conclusion that so far from in any way rehabilitating the department, under the present minister it has sunk to a depth never touched before.
A considerable issue has been raised in this House as to whether or not the Minister of Customs, as he wishes to put it himself, stood alone in any delinquencies with which he has been connected. I want to say that the facts show irresistibly-as I propose to demonstrate to the House by reference to these facts-that long before the present minister took up the reins of office the degeneration of that department and of the whole cabinet had set in. When the Minister of Customs took office he simply fitted into a place already prepared for him by those whose one creed had been to protect and H011-3081
encourage smugglers as against the interests of honest people.
The first official reference in the evidence given before the committee came when Mr. Sparks, who has been already referred to for his earnest work in endeavouring to remedy these bad conditions, sought an opportunity of laying before the Prime Minister the facts connected with the smuggling operations which were being conducted to the great detriment and loss of honest Canadian merchants. Referring to the first positive statement that occurs in the evidence taken before the committee, may I point out that on June 23, 1924, Sparks, not acting alone but as representing a very large number of associations of merchants, manufacturers and importers who were being robbed and plundered by the'conditions that existed through the smuggling that was then rampant in Canada, sought an opportunity of getting the assistance of the government in some effort, that might be made to put down that smuggling. On June 23, 1924, Sparks wrote to the Prime Minister, on behalf of the Businessmen's Association asking for a meeting and point,mg out that smuggling had reached such appalling proportions in the Dominion of Canada that in the Rock Island district alone the sum of over $10,000,000 was annually being lost in revenue to the Canadian people. On the 6th of August they got their meeting, and according to the evidence that was given before the committee there were present at that meeting, representing the government: the Right Hon. Mr. Mackenzie King, Hon. Jacques Bureau, Hon. Mr. Lapointe. Hon. Mr. Macdonald, Hon. Mr. Graham and Hon. J. H. King, Minister of Public Works. On the side of those who came to protest against these conditions that had grown so intolerable, were the representatives of thirteen associations of businessmen in this country, and a large number of men who did not represent any particular association but who had decided that their only course was to come before the government and beg for assistance in order that the conditions might be remedied and, if possible, that their livelihood might be saved. They saw those members of the cabinet, and on that very day they asked for a parliamentary committee to investigate those conditions and to endeavour to find a remedy. What did they get? They got nothing at all except the indifference of the government, because this government from that day on, as is shown by the record, never exerted itself on behalf of anybody but the thieves and smugglers who were pestering the businessmen of Canada. But these
4858	COMMONS
Customs Inquiry-Mr. Bell (Hamilton)
businessmen persisted in their entreaties and in their efforts, and finally, on the 1st of October, Walter Duncan was loaned to them to investigate conditions particularly in the Rock Island district, and to assist them in putting down this smuggling.
It is said that Walter Duncan was told by the Prime Minister: Pursue the smugglers closely; do not allow them to continue their operations if you can help it; put them in gaol. Duncan went out, and he ran down some of the notorious silk smugglers, a number of people operating in and out of Montreal. Then what happened? As soon as he began, as a result of his investigations, to lay facts before this government which would justify, nay, which would demand, that prosecutions should take place, the friends of the smugglers came up to Ottawa, as they had been doing consistently from time to time, and saw the ministers of the crown, and they called off every prosecution that was suggested as a result of Duncan's investigation. But these manufacturers and businessmen had no other remedy. They had been defrauded and plundered; they had no other source than ihe government to which to turn for relief, so again on December 12, 1924, Sparks wrote to the Hon. Jacques Bureau, again stressing conditions at Rock Island. The hon. member for Vancouver Centre (Mr. Stevens) referred to that letter this afternoon, but I wish briefly to direct the attention of the House to it. At page 120 of the evidence appears the letter that was written by R. P. Sparks to the Hon. Jacques Bureau, dated December 12, 1924, in which Mr. Sparks, on behalf of all these associations of businessmen whom he represented, said this:
Another matter to which reference was made was the situation at Rock Island, Quebec.
Sparks was at this time endeavouring to recall to the Prime Minister and the members of his cabinet the promises and expectations that had been held out to the merchants at the time they approached the government in the August previous. The letter continues:
It is generally known in the trade that vigorous action was taken by your department, and that your officers found evidence of smuggling on a large scale. It is further well known that the smugglers who were detected came to Ottawa, interviewed members of the government, with the result that no prosecution was made. The information to this effect has come direct from Rock island. These people have always claimed to have influence at Ottawa, and, in the minds of those who are affected by this illegal traffic, the events of the past few weeks demonstrate the truth of their boasts.
Did that bring any favourable result? It did not. There was not even any response that was put on the record, no more than

there was any response to the earlier correspondence. But these people still kept on trying to get some relief, and again through Mr. Sparks they wrote to the Prime Minister on the 4th of February, 1925, six months after they had first appealed to him, six months after they had begged him, without result, for a parliamentary committee, six months after they had laid before the government their distress and wretchedness and the fact that their businesses were being pounded into the ground by the illegal competition which they had to face, during all which time the conditions, Mr. Sparks pointed out, instead of in any sense improving had steadily grown worse. Mr. Sparks writes to the Prime Minister-I am referring now to page 122 of the evidence:
It is respectfully submitted that the conditions herein set forth are sufficiently well known to the government and to its departmental officers and the requested forms of relief so necessary and reasonable as to justify the government to take immediate action by instituting the required departmental changes and submitting to parliament bills providing for necessary legislative enactment, or, if the government is not satisfied as to the necesity of action and the action which should be taken, it is respectfully submitted that a parliamentary committee should be appointed immediately to inquire into the necessity of departmental and legislative changes.
Once again they laid in vain their plea before the government of this country. Who were the people who made this latter plea? The business men who appealed to the Prime Minister of Canada six months before had had their ranks augmented by the most influential associations of merchants and manufacturers in this whole country, including, I notice by the last paragraph of Mr. Sparks' letter the Canadian Manufacturers' Association, the Canadian Wholesale Drygoods Association, and the boards of trade of Montreal and Toronto.	.


William Lyon Mackenzie King: My hon.
friend says that these persons whose names he mentions made their plea in vain. I would ask my hon. friend if their representations were not followed up by legislation introduced into this parliament and framed on the basis that they themselves laid down.


Leslie Gordon Bell: My answer to
that-and I shall proceed to demonstrate it in a moment, I think, to the satisfaction of the House-is that it was followed by legislation such as the Prime Minister speaks of, but the system of corruption which prevailed in the department, and in the government and in the cabinet itself, was such that the legislation was valueless.


Some hon. MEMBERS:: Order.

Customs Inquiry-Mr. Bell (Hamilton)


William Lyon Mackenzie King: My hon. friend is using words rather freely. He talks about corruption in the cabinet. I will ask him when he makes statements of that kind to substantiate them by evidence.


Mr. PARENT:: Put your seat at stake.


Leslie Gordon Bell: I will say this to the Prime Minister: In a few minutes, when I come to the circumstances which had to do with the activities of Bisaillon and the then Minister of Customs, the Hon. Jacques Bureau, it will be abundantly evident, to most members of this House at least, that there was corruption in the cabinet. But, Sir, the difficulties that were existing then, the difficulties that were crying out for remedy, were still unnoticed and still without action on the part of the Prime Minister; and following what had occurred before it was found that when smugglers were detected in their work, when the miserable, dishonest scheme had been disclosed in a number of quarters, another agency intervened to nullify and render useless any efforts that were being made by the honest men of the country to get justice.
The Prime Minister has himself put to me the query that leads to the introduction of the most sinister figure in the whole history of these affairs. That is the figure of the notorious Bisaillon, at that time chief preventive officer at the port of Montreal and, as it subsequently developed, a crook, blackmailer and swindler such as has never been heard of in the recent annals of this country.
Now, Mr. Speaker, on February 21, the Commercial Protective Association, again through Mr. Sparks, wrote to the Prime Minister, and in that letter, appearing at page 124 of the evidence, to which reference has already been made by my hon. friend t'he member for Vancouver Centre this afternoon, the very direct attention of the Prime Minister was drawn to the fact that Bisaillon being the centre of the keystone to the whole smuggling system, set at naught any efforts that could possibly be made to remedy the situation. Let me, with the indulgence of the House, repeat that paragraph in the letter of February 21, 1925, which begins:
The acquitt-a-1 by tihe Quebec courts of J. E. A. Bisaiillon, the Chief Preventive Officer at Montreal, who was charged with conspiracy, creates a new situation in reference to the prevention of smuggling. I think you should be in possession of certain information which we have in reference to this matter, as he is the key to the whole smuggling situation.
Moreover, may we not reasonably say that there was but one course open to the Prime Minister? When it was thus directly put up to him that there in the employ of the government as 'chief preventive officer was the man who was making those smuggling operations so enormously profitable, so enormously successful, was it not the least he could do to institute then and there an inquiry into the activities of that man?


William Lyon Mackenzie King: Did he not do that very thing? May I ask my hon. friend if the stand I took at that time was not this: That if Mr. Sparks, or any member of the Protective Association, would lay any charge of any kind against Bisaillon or anybody else-


Some hon. MEMBERS:: Oh, oh.
Mr. MACKENZIE KING-I would appoint a royal commission-


Some hon. MEMBERS:: Oh, oh.


William Lyon Mackenzie King: Wait a moment -I would appoint a royal commission to go into the whole question?


Mr. MANION:: Appoint a royal commission!


Leslie Gordon Bell: Yes, Mr. Speaker, the Prime Minister is indeed right. He who had appointed Duncan to investigate as the official investigator of the government, who had sent Duncan down to that district to discover what the conditions really were and lay them bare to the cabinet and to this parliament, when he discovered that Duncan had learned the details of so many of the smuggling operations went to Sparks-as the Prime Minister has just stated to the House -and said: "You make definite charges and we will appoint a royal commission, to investigate them."


William Lyon Mackenzie King: My hon. friend is just a little wrong there. Duncan did not come into this matter until months after the part to which he is now referring. When Mr. Sparks drew my attention to these allegations against Bisaillon I had not had any conversation with Duncan. I had Duncan go into this work some time later, and as soon as he went into it the government acted on his report.


Leslie Gordon Bell: Does the Prime
Minister wish so to mislead and deceive this House as to say that he did not know Duncan was operating at that time? Is the Prime Minister unaware of the fact that Duncan began his investigation on the first October, 1924.


William Lyon Mackenzie King: I said and I
repeat that Duncan did not come into this matter for the government-
Some 'hon, MEMBERS: Oh, oh.
4860	COMMONS
Customs Inquiry-Mr. Bell (Hamilton)


William Lyon Mackenzie King: Yes, for the government-until on toward the fall, and as soon as Duncan made his report and gave us any evidence we acted on. it immediately. I knew that Duncan was retained by the Commercial Protective Association and I said to Mr. Sparks: "Let Mr. Duncan or anybody else make this charge and I will give you a royal commission."


Some hon. MEMBERS:: Oh, oh.


Leslie Gordon Bell: Will the Prime
Minister now rise and assure this House that Duncan did not come to him within a few weeks after his appointment on October 1st, 1924, to aid these people, and complain that under the law as it then stood he could not get any assistance?


William Lyon Mackenzie King: Yes. Duncan came to me and said-


Some hon. MEMBERS:: Oh, oh.


William Lyon Mackenzie King: Duncan caJmeto me and said t'hat he had to make a report before he could make an arrest, and that that was impeding his endeavours in the matter of the investigation. I said to him: "You make your arrests and do not make any report. I will assume the responsibility for the action you take," and Duncan so stated in his evidence.


Leslie Gordon Bell: Yes, and the Prime Minister having said "Make your arrests -and I wiLl take the responsibility" put that responsibility so fully that instead of acting through his proper officers when Duncan made his report he said to Sparks, "You will get no action at all unless you lay specific charges."


William Lyon Mackenzie King: No, I did -not say anything of the kind. I made no statement that he would get no action at all. My hon. friend will not find that anywhere in -any letters of mine.


Leslie Gordon Bell: Mr. Speaker, one thing that is perhaps very helpful to the Prime Minister is that from the time when these efforts were being made by the decent people of this country in August, 1923, no statements of that kind appear in his letters, because he was too prudent to write any letters. But, Sir, these details may be adduced from the correspondence which took place with the Prime Minister; they may be adduced from a letter which Sparks wrote to the Prime Minister on February 26th, 1925, in which he says:
I took the liberty of writing you on Saturday last suggesting an appointment at which I could lay before you certain information in reference to J. E. A.

Bisaillon and other matters in connection with smuggling in which I thought you would be interested. However, if the statement of the Minister of Customs in the House of Commons on Tuesday last is to be accepted as an indication of the government's policy, I think perhaps, there is no use taking up your time in this regard.
A Canadian Press despatch reads as follows: "In speaking of smuggling Mr. Bureau said: I don't believe any human power can stop it", although hiis department had done a great deal to decrease smuggling at the border.
Miight I take the opportunity of stating that, after four months .investigation by a staff of trained criminal investigators, we are convinced that at least half of the smuggling now going on could be prevented within a month by an energetic policy on behalf of the department, and further that, with necessary amendments to the act, ninety per cent of the smuggling could ultimately be prevented.
Might I further express the opinion that smuggling is increasing at an alarming rate rather, than decreasing, as the minister states.
He goes on from that point to refer to the report the officers had turned in, and he says:
I might point out that last August a large representative deputation put the whole matter of smuggling before yourself and members of your cabinet. It has been kept constantly before the government since that time, and the statement made by the Minister of Customs in the House on Tuesday is the first public statement of any character as to the government's attitude.
Again there was no response, and finally these people, driven to desperation, took up what they never were obligated to take up, the challenge of the Prime Minister that they should lay charges against these criminals, which the government itself should have laid. On the 20th of March, 1925, Mr. Sparks again, on behalf of those whom he represented, wrote to the Right Hon. W. L. Mackenzie King as follows:
In reference to my conversation with you on Monday last my understanding was:
That if this association or any individual was prepared to make definite charges against the above customs officer, you would appoint a royal commission to investigate such charges.
And then he goes on and makes charges, although he was under no obligation to do it. He sets out here four different charges, the case of Rex vs. Lortie, in which it was stated by the presiding judge that Bisaillon had committed perjury; the case of the arrest of certain parties in connection with the seizure of the barge Tremblay, in which it was charged that Bisaillon had himself been responsible for the escape of two prisoners from custody, and in connection with the barge Tremblay case that Bisaillon had deposited at Farnhain in hi3 own private account $69,000 belonging to the government; and a fourth charge to the effect that he, Bisaillon, the chief preventive officer of the government in his own

Customs Inquiry-Mr. Bell (Hamilton)
district, maintained boundary properties between Canada and the United States where he not only connived at the efforts of those who desired to smuggle property into Canada, but was himself a smuggler to a very considerable extent.


Mr. DONAGHY:: Is the hon. member not aware that it was conclusively proved in the evidence before the committee that not one cent of government money went into the private account of Bisaillon?


Leslie Gordon Bell: The only answer I think that might be given to that is this; that Bisaillon having sworn to four different accounts of what became of that money, no one of them was established.


Dugald Donaghy: Does the hon. member not recollect evidence, brought before the committee that the chief accountant of the Customs department of Ottawa was sent down to investigate and to find out whether any moneys belonging to the government had gone into Bisaillon's private account? Does he not recollect that the chief accountant certified that all the moneys collected by Bisaillon had gone into the government account at Farnharn and not one cent into his private account?


Leslie Gordon Bell: I do not recollect that, but whether I recollect it or not, does the hon. member for North Vancouver not know that we are not dealing with what actually became of the money, whether Bisaillon took some money from the government or not, but the fact that Sparks was told, "You must get a royal commission to investigate charges. H you will go out of your way and make charges which you never were obligated to make, you will get that royal commission and the government will find out the truth." The point I am making is that Sparks took upon himself that unnecessary burden, that he did definitely make those charges, and that the royal commission promised by the Prime Minister has never been granted.
But Sparks and those associated with him, Mr. Speaker, still tried to be of good heart. Sparks wrote a letter on the 13th March, 1925, and I think I passed over that letter without intending to do so. In that letter he enclosed some reports which showed there had been some activity and some investigation; aud, Sir, I say to this House that the more the matter was investigated and the more the rottenness and corruption that existed^, at Rock Island was disclosed, the greater became the obligation of the government to take action in respect to it, and, as my hon. friend
says, the less they did. I am at a loss to understand, when Sparks and those associated with him had complied with every requirement laid upon them for action on the part of the government, why it was that all their efforts were disregarded and set at naught. I am at a loss to know why the Prime Minister felt that he must still take the statement of his then Minister of Customs, the Hon. Jacques Bureau, that it did not amount to anything, that there was a lot of fuss being made for nothing, and ignore it all.
As the Prime Minister himself has pointed out, all these matters went by with no response, no letters, nothing to put on record in any way, and Sparks and his associates were without any encouragement, without any hope or prospect of their being granted those investigations that were sorely needed. Twice they had asked for a parliamentary committee and did not get it. Once they asked for a royal commission, and it had been promised but was not given. At last, on the 16th April, 1925, the miracle happened. Sparks got a reply from the government to all these long protests and pleadings for help and assistance. The government actually gave him a reply, and that reply was the one set forth by my hon. friend from Vancouver Centre, this afternoon. The government rose to the occasion and met the importunities and troubles of these people by replying to Mr. Sparks in a letter of the 16th April, 1925, as follows:
Dear Sir:
I am, by direction of the right hon. the Prime Minister, to acknowledge your letter on the 20th instant, with reference to Mr. J. A. E. Bisaillon; and to say that the same will receive due consideration.
" Hope deferred maketh the heart sick," nevertheless there was no other avenue open, and all Sparks could do was to keep on pressing for action. On April 5 he wrote to the Prime Minister again along the same line, and that time he did not even get a promise of due consideration. But that was not the situation in which all the people of Canada found themselves. Oh, no. It was all right for the Board of Trade of Montreal to apply and get no answer. It was all right for the Board of Trade of Toronto, the Canadian Manufacturers' Association and other reputable associations of prominent men to ask help from the government and never even get a response. But there were some who found the government's response ready at the time of trouble. On March 31, 1925, a letter was written by Mr. Baldwin to Hon. Jacques Bureau. The letter was signed M. W. Baldwin-well, the initials are in doubt. It has been suggested that this letter was written by one of the hon.
4862	COMMONS
Customs Inquiry-Mr. Bell (Hamilton)
members opposite. If I suggest that the wrong initials have crept into the record and that he did not actually write the letter, perhaps he will be good enough to rise and inform the House of the fact, otherwise we may be reasonably justified in assuming that this was his letter:
Ottawa, March 31, 1925.
The Hon. J. Bureau,
Three Rivers, Que.
My Dear Sir,-You may remember (that I spoke to you in regard to removing the specials along the border an my county. It is now six months since they went there, and many of them representing people who are not smugglers and never were, are wondering why these specials are chasing every boy and girl, old and young, for a bunch of celery or a loaf of bread, and making it frightful for people, as we were elected for economy and efficiency. The electors who have not been touched are asking me who is paying the bills? We think that we are being very overburdened by taxation, and that the officers are trying to frighten the above-mentioned people.
If you remember, I spoke to you with regard to removing these specials, and really hope you will do it. and I want to tell you that the propaganda of two Montreal lawyers who formerly lived in my county, and Senator Pope, to upset the county and 'to bring it back into the Tory fold, and it would take very long to tell you the propaganda.
It is true that we carried the county by a large majority, but that they might possibly outdo us.
Does the House realize who those "specials" referred to in that letter were? They were the men put on the border line between Canada and the United States by the government to prevent smuggling into this country, the only safeguard that we had to prevent that nefarious traffic from being carried on. This suggestion that even they should be taken away in order to advance the future interests of the Liberal party in the election was being made by the hon. gentlemen opposite to the then minister of t'he crown. Perhaps it is a matter of congratulation to feel that there are some people at least who can get some response from this government, who can get not only some correspondence in reply, but actually action. At all events, instead of being embalmed as the correspondence, Sparks to King, seems to have been for so many months, we find the letter hurried over to Springfield, Massachusetts, where the Hon. Jacques Bureau was, and we find him writing to Bisaillon on the 7th April for advice as to the situation.
Will the House bear in mind the dates when Sparks had already placed in the possession of the government information to the effect that Bisaillon was himself a smuggler and a crook, and at this time the Minister of Customs-will the House pause to appreciate this?-refers to that man, himself a crook and smuggler, the question whether or not
[Mr. C. W. BeDJ
the special contables appointed and delegated to protect the boundary of this country shall be taken off, leaving the boundary bare in order to help the Liberal party in an election? The suggestions were not without their ready response. On the 16th April, 1925, the same day when the Prime Minister of Canada was assuring Sparks and boards of trade of the various cities that their representations would receive due consideration the preventive officer Bisaillon writes thus to the Hon. Jacques Bureau:
Montreal, April 16, 1925.
Hon. Mr. Jacques Bureau,
Minister of Customs and Excise,
Ottawa, Onit.
Dear Mr. Bureau,-I have the honour to accuse reception of your letter dated 7th instant, accompanied by that of Mr. Baldwin, relative to the officers who work the frontier a.t Rock Island.
Mr. Baldwin exaggerates; the officers have received instructions, at the beginning, to keep busy with important things only and not with bread, celery, etc.
. . . .and I do not believe that the people of Rock Island have become so fearful as wishes to say Mr. Baldwin; only he is pushed by Jenkins and Wilkinson who are the greatest smugglers of Rock Island, but the latter are his friends.
I also believe that, in the interest of the jparty, it would be preferable to discontinue to watch the frontier, but one must also think of the revenues of the department, for you know that the organization on the Merchants' Association awaits the occasion of the return of my officers to ptace some of their own people. The famous Knox and Sparks are trying to discredit all the department does; it is also said, right and left, that they have no instructions to receive from you nor from Mr. Farrow. Mr. Bureau,, this question is very delicate; but if you prefer that I recall those officers or else that I talk the matter over with Hon. Mr. Cardin, I shall do so with pleasure. A new advice on the matter wiill oblige me-greatly.
Not only could they get response in regard to the correspondence, but unlike the decent merchants, importers and business men of' this country, they got action. The Prime Minister a little while ago asked me what it was that indicated corruption on the part of any member of the cabinet. I say this, that following that correspondence, some of those specials, and one in particular, were removed' from the border and not sent back until after-the election. If the Prime Minister does not call that corruption I do not know by what term he would prefer to call it. There was. a man named Paul Jensen and another man. named Brosseau; but Jensen I refer to particularly because he was assigned to duty later' on in April of the same year, and as shown at page 2849 of the evidence, the official, report as to the movement of the officers at Rock Island indicated that Jensen had been doing duty at Rock Island and that he was called back to Montreal by former

Customs Inquiry-Mr. Bell (Hamilton)
inspector Bisaillon on August 31, 1925. What happened then? Mr. William F. Wilson, chief preventive officer at Ottawa, an honest official, asked when Jensen was going to go back to his duty, and the reply of Bisaillon was:
That Jensen was doing special work in Montreal and that he would be returned to duty at Rock Island after the 29th October, 1925.


Robert James Manion: What was the date?


Leslie Gordon Bell: It seems to me an election was on then. I suggest this, that when the only action that could be got was by people of such personalities as those who had such interests to serve, the charges that Sparks made with respect to the administration of justice in this country, and particularly the administration of the preventive service of the Department of Customs and Excise, were amply borne out. I suggest that long before the present Minister of Customs came into his position this pernicious practice of deferring to and looking after
10 p.m. smugglers and crooks as against decent and honest business men of the country had become well established and was being practised by hon. gentlemen opposite.
With no royal commission, no parliamentary committee, nothing that ever would have been appointed at any time, but by the efforts of the hon. member for Vancouver Centre (Mr. Stevens), the present Minister came upon the scene. There was, I believe, something in the nature of an interregnum during which the duties of Minister of Customs and Excise were looked after by an acting minister, the Hon. P. J. A. Cardin, who has been referred to before. But I think this is undoubted-and I am prepared to listen to any contradiction hon. gentlemen may feel disposed to make-that all the events which relate to the active part taken by the Minister of Customs (Mr. Boivin) in connection with the Moses Aziz case took place after that minister had assumed the active conduct of that case, regardless of whether or not he was handling other matters in the department.


James Shaver Woodsworth: Before the hon.
gentleman passes to the actions of the present minister, I should like to ask whether the committee made an effort to secure a statement from the late minister, and if not, why not.


Leslie Gordon Bell: I do not know whether Mr. Bureau was invited to appear before the committee or not. Personally I
made no effort to have him appear, but I would suggest that the one best qualified to explain the failure of Mr. Bureau to appear before the committee would be the chairman of the committee and not myself.


Paul Mercier: Would my
hon. friend allow me to answer that statement?


Leslie Gordon Bell: I wish you would.


Paul Mercier: The only
procedure that could have been adopted would have been for one of the members of the committee to request me to make an interim report to the House asking that a message be sent to the Senate begging for leave to have Mr. Bureau appear before the committee. As one of the members of the committee the hon. gentleman must share the responsibility for any failure [DOT] to take that course.


Leslie Gordon Bell: If the hon. gentleman suggests that any responsibility was made known by himself to me, I should be glad to know what it was. I think the answer he has just given the House probably explains the situation to the hon. member for Winnipeg North Centre (Mr. Woodsworth).
The Aziz case came into the files of the Customs department first with a reference to the events of May 14, 1925, when the seizure of liquor was made on the premises of one Moses Aziz of Caraquet, New Brunswick. This man Aziz was an Assyrian smuggler and bootlegger. He had been for some time notorious in that locality, having dealt with a particular vile and poisonous brand of moonshine whiskey, and he had been convicted and punished some time prior to the spring of 1925 for an infraction of the provincial liquor laws of New Brunswick. A record of that did not appear in the material that went to the Department of Customs at Ottawa, but the raid made upon Aziz on May 14, 1925, i3 recorded, and it is set forth in the documents. Perhaps the House will bear with me a moment while I point out what it amounted to, as it may be of importance presently.
The report sent in on May 14, 1925, was forwarded by the preventive officer down in New Brunswick, and it indicated that Moses Aziz had been in the smuggling and bootlegging business on a large scale, having been previously apprehended. I direct the attention of the House to the fact that this was one of the documents that came before the present Minister of Customs, or at any rate one which should have come before him. I
486-1	COMMONS
Customs Inquiry-Mr. Bell (Hamilton)
prefer to believe that it did come to him at the time he began the consideration of this case. I invite the attention of hon. members to the fact that on May 14, 1925, as the record shows, the Dominion officers raided Aziz and cleaned out his stock of liquor so that he had no more on the premises. Then two months later, on July 14, there was a further seizure of liquor on the premises of Aziz, which liquor was valued at something like 1650. In consequence of this seizure the man was charged with a breach of the Dominion liquor laws. Then, Sir, very shortly after that there came to the front again the same old influence of which Sparks had complained in vain. Before the case of Aziz was tried, a letter was written to the Hon. Jacques Bureau on August 1, 1925, by the Hon. P. J. Veniot, leader of the Liberal party in the province and at that time Premier of New Brunswick. I shall not read the whole of the letter, but I desire to call attention particularly to two or three paragraphs:
Officer Penley Stewart of the preventive service made a seizure on July 14th, and in laying his charge he fixed a valuation of about $600 on the goods so seized.
The Minister of Customs this afternoon said that the question of valuation was vital, and upon that point I shall have something to say later on.
If, however, the goods are fairly highly valued they would exceed the amount of $200 and therefore fall under the provision of the amended act, and make it an offence of from one to seven years imprisonment.
I call the attention of the House particularly to this:
These goods were in the possession of Mr. Aziz before the act was amended, and Aziz claims that after the amendment was enacted he was placed in such a position that he could not very well conform himself to tihe law, as he did not know what to do with these liquors.
Will the House bear in mind that on May 14 Aziz had been raided and cleaned out; .every bit of liquor he had in stock was seized. And wrhen they raid him in July, when he has a fresh stock in supply, the Premier of New Brunswick writes to the Hon. Mr. Bureau and declares that Aziz had not known what to do with the liquor!
Kindly note that he is not charged with having imported these liquors but simply having had same in his possession, and he can establish that they were in his possession before the act was amended. . . . Mr. Aziz is a very well known man in the country and has a wide circle of friends, and he has been a strong worker for the common cause, and I honestly believe he has acted honestly throughout this affair, and that if he will be sufficiently punished if the matter is brought within that section of the act which makes this offence punishable by fine. This case is to be heard on August 6.

Of course it was but the merest coincidence that there was to be an election in New Brunswick on August 10.
Trusting that this case will receive your immediate attention, and thanking you, I beg to remain.
Was the Hon. Mr. Veniot, intervening for this Assyrian smuggler and bootlegger, in the unhappy position of those whom Mr. Sparks represented? He was not. A telegram was sent from Ottawa on August 7 to the Hon. Mr. Veniot:
Hon. P. J. Veniot,
Bathurst, New Brunswick.
Revalue being made. Attention has been given as stated in your message.
And then an odd thing happened. William F. Wilson, chief preventive officer, and an honest official if ever there was one, must have been out of touch with the real powers moving in this matter, because he was so ill advised as to wire on August 7, the same day, to proceed with the prosecution under a more stringent section. That was done, and as a result, on the eighteenth day of August, Aziz came before Magistrate Sutton and was convicted of unlawfully smuggling liquors into the country and keeping them in his possession, for which offence he was adjudged to forfeit the liquors and pay the sum of $150 by way of fine and to serve a term of three months in the common goal of Bathurst in the township of Gloucester. Did they then despair? Not while there were still politicians to make representations to Ottawa. There was a letter written on August 29, to which the minister referred this afternoon, by Mr. M. F. Gallagher, chief of the Remissions branch. I would ask the House to note the date and purport of this letter:
Representations have been made >to the hon. the Minister of Justice by the Premier of New Brunswick on the case of Moses A. M. Aziz, convicted at Bathurst on August 18 of illegal possession of illicitly imported liquor.
The House will see that Moses was determined to have justice.
A fine of $150 was imposed, together with a jail sentence of three months, and the fine has been paid.
The Premier of New Brunswick suggests that the imprisonment be suspended as the offender is a married man, in business for himself, and the term of imprisonment will occasion him much hardship. Moreover, it is stated that Aziz was not aware that the mere possession of smuggled liquor was in itself an offence, and further that the possession dated long before the act was amended.
Then following August 29 there was a letter which appears to have been sent to the Hon. Jacques Bureau, but which a correction afterwards showed actually went to the present Minister of Customs. It is that letter and

Customs Inquiry-Mr. Bell (Hamilton)
the way the minister dealt with it that I would like to consider next. The minister appealed to the House this afternoon and said, "I am being charged because I did not- take proceedings to have a warrant of commitment issued." I do not remember the exact words, but that was the effect of his remarks. Is it not abundantly clear that the cause of complaint never was that the minister had anything to do with issuing a warrant of commitment; the complaint is that he stopped its issue.
And when we consider the course of the minister in this respect I would like to pause for a moment in order to place before the House a short record of the man who fell into this error. If we could find that an error had been committed in all sincerity he should get the 'better construction placed upon it. According to the Canadian Parliamentary Guide, the Hon. George H. Boivin was a successful and brilliant student of law from a very early date in 'his career. He was president of the Liberal Law Students' Association of Laval; he was called to the bar in 1907; he was crown prosecutor for the district of Bedford in the same year and continued in that capacity for some years thereafter. He entered this House in 1911 and was subsequently returned as a member in 1917, 1921 and in 1925. He was Deputy Speaker of the House of Commons in 1918. The House will plainly see that it was no novice, no young man who could not be expected to realize his obligations, who came into the department early in September and took up this Aziz case. On September 21 Mr. Robi-chaud, the member for Gloucester, wrote the minister to the following effect:
Will you please consult Hon. Mr. Lapointe about the .proceedings instituted against Mr. A. M. Aziz, 'Caraquet, for violation of ithe Revenue Act. I attach the greatest, importance to this affair, since in the actual circumstances I need the help of all my 'friends.	* -
The Hon. Mr. Lapointe will give you all the necessary information. Mr. Aziz is of the highest help for us during this campaign, and we cannot do without his services.
If there ever was a straighter bid to keep a man out of jail, and to help win an election with the assistance of a crook, a smuggler and a bootlegger, I have failed to come in contact with it. Then in answer to that letter we find another letter written on September 29, as follows:
J. G. Robichatjd, Esq.,
Shippigan, N.B.
Dear Mr. Robichatjd,-I acknowledge receipt of your 'letter of the 21st instant, on the subject of proceed-iings instituted against Moses Aziz of Caraquet for [DOT]violation of the law.
Considering your strong recommendation instructions have been given not to execute the warrant of imprisonment until a new inquiry has been made.
And on that same date Mr. W. F. Wilson, chief preventive officer, wired to Mr. Stewart, customs officer at Chatham, New Brunswick, as follows:
Am directed to request you to stay execution of warrant of commitment against Moses Aziz, pending further investigation. Arrange with magistrate accordingly.
I may say that that letter was stated by the minister on a subsequent occasion to have been dictated by himself. But apparently this did not suit Mr. Robichaud, and he wired back:
Please refer my recent communications re Aziz. Most important that matter be settled according to mj-wishes. Preventive service has demanded commitment to be effective at once. Rush action and wire me.
There the matter rested until November 18, 1925, when the minister wrote Mr. Robichaud again:
I have before me a memorandum concerning the case of Mr. Moses Azaz, who was condemned by the court to a fine of $150 and to three months imprisonment for having had liquor in his possession. . . .
I have examined the case with care, and I can find no reason for which ithe imposed sentence should not be executed, but I will keep the matter in suspense until 1 get a reply from you, in the event of your having other representations to make to me.
According to the minister's own statement, he could find no reason-after the election- why the warrant should not be executed, but Robichaud knew of a reason, whatever that reason was, because he wrote right back on November 25:
Referring to your favour of November 18 on the subject of penalties imposed on Mr. Moses Aziz for having had Liquors in his possession, will you please do your best to suspend all proceedings until I see you when I return to Ottawa.
The proceedings continued in a state of suspension from that time until, in the course of the investigation conducted by the Stevens committee, the matter was brought up and became too notorious to await further action, and the man was at last imprisoned.
Now, Sir, what I have to say is this. It must be sufficiently evident to this House that after these various steps had been taken, after-these recommendations were made and had proved so successful, there never would have been any imprisonment of Moses Aziz but for the fact that the whole wretched business was exposed before the Customs committee. Mr. Robichaud asked in his letter of November 25 that the matter be further suspended until he had an opportunity of seeing the minister.. November passed; December and January came and went; the
4866	COMMONS
Customs Inquiry-Mr. Bell (Hamilton)
House assembled ana Robichaud as a member, was here. January passed, then February and March, and on April 21, 1926, when the whole of these facts came out before the committee, Aziz was still at liberty walking the streets of Bathurst. As I have said before, had it not been for the investigation that was instituted Aziz would be walking the streets still.
Now in connection with this case, why did they not take the regular ordinary course that is properly taken, the only course that may be properly taken in respect to the administration of the courts of justice? Why, in the letter that Gallagher wrote he referred to the fact that the Minister of Justice could do nothing. He referred to the fact that until that man had surrendered himself to the officers of the law, nothing could be done by the Minister of Justice in the way of pardon or parole. He drew attention to the fact, which none knew better than the Minister of Customs himself, that there was no way to keep that man from at least going to gaol overnight except an improper and a corrupt way, and, Sir, that way was taken for the reason which is set out in two, three, four and five letters that were written to the minister-keep this man out of gaol, because we have an election coming on and we cannot afford to have him incarcerated. I suggest, Sir, that although the evidence of the fact is not before us, the conclus'on is irresistible that that man was not willing to do what almost any other man in his circumstances would have been glad to do, that is, surrender himself and receive a pardon. He was so important, he was such a precious help, he was such a great worker for the common cause that he considered he should not have his dignity invaded by even being shut up overnight. He must indeed have had something which gave him a hold on this cabinet and on the members of this government that they did net dare take the usual course in regard [DOT] to him.


Mr. CAHILL:: That is all rot.


Arthur Meighen: That is why he is condemning it.


Mr. ROBICHAUD:: Does the hon. member wish to imply that Aziz had a hold on the present member for Gloucester? *


Charles William Bell: (Hamilton): I would not be so unkind as to except the ho-n. member for Gloucester from the hold that Aziz has on the whole of that party.
I do not wish to be misunderstood, Mr. Speaker, in the position that I am taking in regard to the conduct of the minister in this respect. Everybody knows, even the hon. member for Gloucester (Mr. Robichaud)

knows, that it is a matter of common occurrence for solicitors or for those who are not solicitors, who have friends or clients or people whopn they desire to benefit and who are incarcerated as a result of some misdeed, and the case having passed through the proper channels of the court, to go to the Minister of Justice or to the provincial Attorney General and to the parole board and intercede for a man legally incarcerated. Nobody contends for one moment that there is anything wrong with that process; in common with almost every other lawyer I have done the same thing myself. But, Sir, it is new to my experience at least that a minister should be asked to interfere with the process of the courts which we have endeavoured to keep inviolate, and that he should do so for a corrupt and degrading reason.
The hon. Minister of Customs stated to the House to-day that he came into the matter suddenly. He has a most unfortunate faculty for dropping into things unexpectedly. That is the unfortunate position in which he found himself on the night when the hon. member for Vancouver Centre made his charges in this House, when the minister announced that he had no idea that they were coming up, and he was taken so unawares. The position in which the innocent minister found himself in the Aziz case he described to be this: He just walked into his office in the Customs department here one night, and his private secretary told him that there was a letter from Mr. Robichaud about the Aziz case, and in a casual way the minister just dashed off a little telegram and the thing was done. But let me again draw the attention of the House to this fact, that the minister had before him, if he had access to the file at all-and if he had not access to it I do not know who had or would have-the statement of the seizure made on May 14, 1925, when the entire stock of liquor of Aziz taken away, so he knew that those statements made in the letter of the Hon. Mr. Veniot were false statements, whether they were false to that gentleman's knowledge or mat. He knew perfectly well the grounds upon which Mr. Veniot sought for clemency and the intervent' on of his executive authority.


Arthur Meighen: Is it not a fact that
Aziz was convicted under a statute which was in vogue long before the act of last year, and not under last year's statute at all?


Leslie Gordon Bell: I believe that to
be the case, because the section which was insisted upon for the prosecution in the wire to Wilson changed the original intention to have the prosecution altered

Customs Inquiry-Mr. Bell (Hamilton)


Arthur Meighen: So it did not matter
how long he had the goods.


Leslie Gordon Bell: No. The Minister of Customs had before him the report that Aziz had been for a great many years a notorious smuggler and bootlegger. He had before him the fact that this was not an application for a pardon, because Gallagher's letter particularly called attention to that circumstance. So I say that having all those records before him at that time, the minister was fully seized of facts which made his action at that time a scandal and an outrage upon the people of Canada.
But, Sir, I think he said this afternoon that he did not have full information at that time. I think he said that at that time he saw his private secretary, and in a casual way suggested bo his private secretary that the action that was taken should be taken. Strange, is it not, that if the Robichaud letter was the only information the minister had before him at the time he directed the sending of his letter and telegram stopping the warrant of commitment-strange, is it not, that his own letter dealt with facts which were not contained or suggested at all in the letter which Robichaud had written? Because in the Robichaud letter the writer stated to the minister, "Mr. Lapointe will give you information about this case," and Mr. Lapointe, according to the sworn evidence of the Minister of Customs before the Customs investigating committee, was then out of town and he never saw him at all. So through some mysterious means, having seen that letter telling him simply: There is a man named Moses Aziz, and he is in trouble, but without saying why, and Mr. Lapointe being unable to tell him about it as he was out of town, the minister immediately sent off a letter and a telegram which stopped the issue of the warrant of commitment, of which he has never heard.
But there is more than that. The minister came before the Customs committee, and he made his own statement to the committee of the circumstances surrounding that transaction. I think the fairest thing to do in dealing with this case is to look at the minister's own statement and see to what it deposes. The minister went before the committee and he told them, not once but twice, "At the time I signed that letter, at the time I directed that telegram to be sent, I did not think it was worth the paper it was written on." Then the minister comes into the House this afternoon-and this is why I asked him to give us the date on which he got that ex post facto opinion from the Department
o'f Justice that he was entitled to do what he did-and produces an opinion which he gets in June, 1926, and which he wishes the House to accept as authority for his doing what he did in 1925. He told us before the Customs committee-let me give his exact words, because it is surely important that the House should know them:
I did not tihink it was within the power of the minister ito stay proceedings on a warrant of commitment.
He went on to say:
I still state that I do not think that the telegram sent in my name or at my request to the officer of the court was worth the paper ,it was written on.
What I should like the House to consider is this: Did the minister When he wrote that letter to Robichaud, and when he had that telegram sent, expect that it would be effective in stopping the warrant of commitment, or did he not? If he did not expect it would stop the warrant of commitment, then what a despicable trick he was playing on his friend. What almost unspeakably wretched treatment to accord to his own friend in whom he trusted and who trusted in him! If, Sir, on the contrary, the minister, in spite of the statement to which he has sworn, did expect and did think that the statement would be acted upon, then what is his position when he comes before the committee and swears: "I had a letter written stopping a warrant of commitment. I had a telegram sent stopping a warrant of commitment. I believe I had no power to do it, I believe it is not worth the paper it is written on." Is it not clear and perfectly plain that if that was his belief and he expected it to be acted upon, he was perpetrating a gross fraud upon the courts of this country?
Then the minister comes to us this afternoon and says: There is something I believe somewhere in the laws of the province of New Brunswick that would prevent that commitment in any event being put into operation unless the private prosecutor asked for it. Since when, may one inquire, did the province of New Brunswick pass provincial laws that override the statutes of this Dominion? But, Sir, it is sometimes interesting to realize how people get the same idea about the same possibilities that may arise. I was much interested when the minister said this afternoon that he expected "that my friend the member for Vancouver Centre would say in the House that the liquor that was sold in the Tremblay case was potable liquor," and so he had got a letter that covered the case. Oddly enough my hon. friend the member for Kent, N.B., (Mr. Doucet) and I had an idea that tfce
4868	COMMONS
Customs Inquiry-Mr. Bell (Hamilton)
minister would say something like that, and so with respect to this case in New Brunswick we have a letter for him. In answer to a letter written by the hon. member for Kent, N.B., Mr. J. L. Ryan, Clerk of the Peace at Bathurst, N.B., writes under date of June 9, 1926, as follows:
Dear Mr. Doucet,-With reference to your letter of the 4th instant in connection with the Moses Aziz case I have looked up the court records at the magistrate's office and find that the conviction is attached to the order itself which is dated 18th day of August, 1925. There is aJso a minute of the same date stating the penalty was $150 and $38 costs and that sentence
was imposed of three months imprisonment	
This conviction has been examined by several lawyers on behalf of Aziz and if it contained any irregularities they must surely have found them, long before this time.


Mr.   BOIVUST@: Will the hon. gentleman
allow me a question?


Leslie Gordon Bell: Yes.


Georges Henri Boivin: Was the warrant of commitment issued by the judge on the same date that the conviction which my hon. friend has just' read was entered?


Leslie Gordon Bell: There never was
any warrant of commitment, because my hon friend stopped it.


Georges Henri Boivin: There never was any warrant of commitment? There certainly was a warrant of commitment, because Moses Aziz is in gaol at the present time, and he could not be there without a warrant of commitment. I would like to know when that warrant was issued and upon whose request.


Leslie Gordon Bell: If there had never been a member for Vancouver Centre, Moses Aziz would never have gone to gaol.


Georges Henri Boivin: I explained this afternoon why that warrant of commitment had not been issued, and I think my hon. friend should accept my explanation. He is bound to accept it, and he has no right to insinuate, whether he sat on the committee or not, that the warrant would not have been issued if there had not been a member for Vancouver Centre sitting on the Customs committee. 1 ask him to take back that statement; I insist upon its withdrawal.


Leslie Gordon Bell: I do not consider that there is anything that I should be called upon to withdraw, and I decline to withdraw anything I have said in that respect. I am at a loss to understand how the hon. member can make any such suggestion for one moment. He knows perfectly well that the only explanation he sought to give before the committee was the explanation given or

April 28th when he said that he had not seen Mr. Robichaud excepting on the one occasion on January 28, in this building, when Robichaud came to him and discussed another matter in which he desired the assistance of the minister, and the minister stated he was so tender-hearted that he would not take up the Aziz matter with Robichaud because he did not want to refuse him two things on the one occasion. But, Sir, the minister has never told the committee, he has never told the House, he has not told the House right down to this moment, why it was that although he met Robichaud in January in this House and that matter was discussed, he allowed January to go by, he allowed February, March and April to go by. without any further explanation until at oui meeting of April 28th he admitted that the man was still at large.


Georges Henri Boivin: Mr. Speaker, I rise to a point of order. The statement the hon. gentleman has just made, that I never told the committee and never told the House why Moses Aziz was still at large on that date, is, as my hon. friend knows, not according to facts. This afternoon I stated that the reason why Moses Aziz was still at large when that case came before the committee was because I wanted to submit all the documents, submit the entire record which had remained upon my desk, absolutely in the way in which they were on the day the committee was formed, that I did not want to take any action in the matter until it had been submitted to the committee. I must again ask and insist that the hon. member withdraw his statement that if it had not been for the hon member for Vancouver Centre Moses Aziz would not be in gaol.


Some hon. MEMBERS:: Oh, oh.


Mr. SPEAKER:: Order.


Georges Henri Boivin: I made a statement this
aftenoon giving information to the contrary, and I ask that my statement be accepted.


Arthur Meighen: If in the discussion of the conduct of the Minister of Customs and Excise his statement or reason must be accepted why of course, this debate should close. The question in this debate is this: Is the minister's statement or reason to be accepted on the evidence or not? If his say-so ends it, why there should be no debate.


Hewitt Bostock: I was just about to state that this is a very involved case, and the question is one of appreciation of the evidence which was given in the committee. I do not find that the hon. member for West Hamilton has transgressed the rule. He does

Customs Inquiry-Mr. Bell (Hamilton)
not accept the explanation given by the hon. Minister of Customs and Excise. I repeat that it is a question of appreciating the evidence, and I do not know that any point of order is involved.


Leslie Gordon Bell: Now that the Minister of Customs and Excise has introduced the question of what took place on his appearance before the Customs committee, I am going to turn up the evidence, Mr. Speaker, and I invite his further contradiction if he feels disposed to make it. I want, and I know he realizes the fact, to be fair to him in regard to the matter. Let me first call the attention of the House to the fact that the Aziz case came before the Customs committee on the 21st day of April, 1926, and it was not until five days had elapsed that the minister appeared before the committee, made his own statement and was subjected to crossexamination on it. His statement is very short and I would like to read it to the House. I wish to draw the attention of the House to it for another reason, namely, that in spite of the fact that the minister then told us that he did not believe his letter or his telegram were worth the paper they were written on, he gave us this afternoon a somewhat elaborate statement purporting to show why on that occasion he did believe he had the very power he now says he knows he did not possess. The minister on the 26th April, 1926, having had five full days for reflection and recollection as to what had taken place, came before the committee and made the following statement:
As I happen to be before the committee, if Mr. Bennett will allow me, I might perhaps clear up the question of who signed these letters. At least I would be very glad to do so. If I may be allowed, Mr. Chairman, I saw in the evidence that was given when this Moses Aziz case was first before the committee that a reference was made to a statement of mine at the beginning of the inquiry, that I had been appointed on the 4th September, sworn in on the fifth and had taken over the complete administration of the department on the 31st October. If the committee will look two pages further down in the same evidence they will find that I took good care to say, before leaving the box, that I did not want to mislead the committee, that I had been in Ottawa on two or three occasions to attend council meetings, and when here, had gone tp the office and attended to some routine matters. The 29tih September, or 28th and 29th September was evidently one of those occasions. I remember very well having seen a telegram, or a letter of the 21st September which was on my desk when I arrived. I might say I was at the office only in the evening. My private secretary, Mr. Ide, was there with me assisting me to clean up correspondence, and when I saw the letter of September 21st, without taking the time to go through the file I was informed by Mr. Ide in a previous message sent by the-I cannot remember.
I will not take up the time of the House by reading further from that statement, but I am going to refer again to page 1407, on which it appears, and draw the attention of the House to the fact that this afternoon the minister gave us a long detailed account of how he had sent for Mr. Farrow, the deputy minister, and had asked Mr. Farrow, whether he, the minister, had the right to intervene to stop the issue of the warrant of commitment or not, and of how Mr. Farrow had assured him that it would be all right to go ahead. I draw the attention of the House to this fact; that if that were so it had completely passed from the mind of the minister when he made that detailed explanation on April 26 of what had occurred, because there is not the slightest reference to Mr. Farrow or anybody else being present. It passes my understanding, even if the minister could have conferred with Mr. Farrow on that point, why he, the crown prosecutor for years, the star legal man in his own division, should have consulted Mr. Farrow, who was not a lawyer, to know whether or not he, the keen legal mind, had a right to intervene.
Hon. members will note that here and there throughout the evidence taken before the Customs committee the same sort of thing kept cropping up. I do not refer to the appeals for clemency, but to this sort of political interference which prevented the laws of the country being enforced. I refer to the case of Byron Brown in October, 1923, when Hon. Jacques Bureau was still Minister of Customs. Brown was convicted of transporting liquor illegally, fined, and given a month in jail. Was the fine ever collected? It was not. Was the time ever served? It was not. Hon. J. E. Sinclair and Hon. B. C. Prowse came to Ottawa, and they were the men responsible for the fine not being collected and the imprisonment not being carried out to this day.
There was also t'he case of Geifard Harnish, against whom a seizure was levied on 11th June, 1925. The report shows that Harnish was one of the biggest smugglers in Nova Scotia, and when apprehended he offered to plead guilty. But with this tenderhearted government in office they would not let him plead guilty, they hung the matter up to the 4th of December, and then this minister sent word that proceedings were to be withheld. Did he just walk in, look at this file, and go out again without making inquiry? The Minister of Customs stated that proceedings in that case were to be withheld; they were withheld and have been withheld until this day. It was suggested in the course of the com-
4870	COMMONS
Customs Inquiry-Mr. Bell (Hamilton)
mittee investigation-and I think it has been suggested outside thid' House-that there were others who had applied for ministerial clemency in the ease of persons convicted, and if there were other cases such as this- and I have not heard of them-would the House for one moment tolerate the plea of a man or three men who came before us and said, "Yes we were guilty, but you have got to declare us innocent because there are half a dozen others who are just as guilty as we are." That is the only argument advanced in extenuation of the conduct of the minister and his associates.
With this situation before us, what is this parliament going to do? When there is a settled course of conduct persisted in month after month, year after year, and when conditions are getting worse instead of better, are we going to say that we are so lost to all idea of decent obligation that we will pass it over because the minister is a good fellow and we would like to see him keep office, whether he has done these things or not? Is that to be the argument by which the decision of parliament is to be governed? Let me point out to this House that every member who votes against the present amendment subscribes to this creed: "I believe in the protection of smugglers and crooks against all honest merchants. I believe that high office may be prostituted to low purposes, to serve political ends. I believe that we may violate every obligation and every tradition of the courts in order to advance ourselves and win elections." If that is going to be the decision of parliament to-night or to-morrow, let us know it, for just as much as the minister himself, just as much as the Prime Minister who ignored the honest man and responded to the appeals of the crook, this house of parliament is itself on trial in this matter. The whole country will watch to see whether this matter is disposed of as it should be, and some of the keenest of the watchers will be the crooks down at Hock Island, namely, Gilmore, Telford, Pike, Jenkins, Wilkinson and all the rest of the miserable gang. They want to know what the House is going to do. Bisaillon wants to know, and every man who hopes to carry on in future that course of crookedness that has disgraced this country will' want to know whether or not he is to be free to pursue it in future.
I often think, Sir, as I come up to this House, either by those winding paths that skirt its grounds on both sides, or by the broad avenue that leads to the front door, that this House stands here as symbolical of all that is best and most dignified in our national life.

I think too that here, where we have set up the high court of parliament, above all places must right, honesty and justice sit enthroned, and with that thought there comes this in addition, that better far we had seen this splendid building levelled to the ground till not one stone remained upon another than to endure the infamy of subscribing to those things of which we have read and heard. The results of this vote will extend far beyond our own time into the time of generations yet to come. When the vote is recorded on this amendment every man within this chamber will be confronted by his own personal and individual responsibility, for, say what any hon. member may like about the matter, it is not a question of fiscal policy; it is not a question of political expediency; it is the old, old question of right against wrong, the question of straightforwardness as opposed to disgraceful intrigue, the question of national honour as against national dishonour. That is the question upon which each one of us must take his stand.
There is no alternative. I say to this House that in the fulness of time when this building in the natural course shall have crumbled away and everyone here is dust again with the ages, there will be indelibly engraven on the records of this country the stand taken by every man, whether he stood in favour of condonation of those things that have thrown down and defiled our altars of justice in this land, or whether he remained steadfast for those traditions and those high ideals which alone can make Canada great.


Dugald Donaghy: Mr. Speaker, I have listened with interest to the address delivered by the hon. member for West Hamilton (Mr. Bell). He is one of the few members of this House whom I have known for many years. I have a great respect for his skill and ability as a pleader, and I think that from the standpoint of hon. gentlemen on the other side he has put forward as strong a special plea as any lawyer in the House could. I am not going to follow his example; I propose to take a somewhat different course. I intend to discuss intelligently if I can what was brought before the Customs committee, the evidence which we considered, the report which we made and the grounds upon which we made it. I do this because I think what the country is interested in is not so much personal recriminations or an attempt, in the slang phraseologly, to " get " a political opponent, but in knowing what this House and this parliament are going to do to remedy conditions that have existed for some years

Customs Inquiry-Mr. Donaghy
with regard to the smuggling of goods into the Dominion of Canada.
The Department of Customs and Excise has grown to be a somewhat important department in the last few years. Originally the minister had under his control merely the administration of customs. Later on the Department of Excise was amalgamated with the Department of Customs and he was charged with that responsibility as well. In 1920 further work was thrown upon the minister of this department when he was charged with the collection of the sales tax, and in 1924 the collection of income taxes for the Dominion of Canada was placed under the Department of Customs and Excise.
From the evidence brought before the committee it was quite apparent that there were many difficulties in the way of preventing smuggling. There is the long boundary line thousands of miles in extent between Canada and the United States. This boundary line is crossed in numerous places by roadways, arteries of various kinds, some of them in obscure districts. There are also the bridges, ferries, rivers and lakes. The difficulty was great originally, but it has been increased within the last two years to a remarkable extent by reason of the adoption of the 18th amendment to the constitution of the United States and the legislation following that for the purpose of enforcing prohibition in that country.
The enactment of the prohibitory law in the United States resulted in the building up of large liquor smuggling organizations. Such organizations are to be found in the Old Country and in other countries of Europe, all bent upon smuggling liquor into the United States and reaping the huge profits of that operation. Those organizations were also formed in Canada, and they carry on operations on a huge scale. The committee had every reason not to doubt that United States customs officials were susceptible to corrupt influences on the part of those liquor smugglers. The Canadian customs officials saw what was going on when liquor was being smuggled from Canada into the United States. The fact of their seeing their brother officers of the United States, under undue influence and possibly corruption, admitting liquor into that country and perhaps getting rich by giving way to the bribes of the smugglers would naturally have a bad moral effect upon our own officials. I have no doubt that that large trade in smuggling liquor from Canada into the United States has had a reflex action; it has a tendency at the present time and has had for some two or three years to increase smuggling 11011-309
from the United States into Canada of those articles of commerce and manufacture which we purchase in that country for use in Canada.
The advent of automobile transportation in recent years has also greatly added to the difficulty of the customs enforcement officers. At those various roadways which cross the boundary fast travelling automobiles loaded with merchandise quite often easily evade the watchful eye of customs officers. So that after all the work of the enforcement officers in the Customs department is not a bed of roses by any means. From the evidence brought before the committee we were rather inclined to the opinion that the three worst points at which smuggling was carried on were Rock Island, Quebec, the Niagara bridge, Ontario, and Windsor, Ontario. We made no investigation whatever into smuggling operations in the provinces of Manitoba, Saskatchewan, Alberta and British Columbia, and we inquired very little into the state of affairs in Ontario. Our investigations were directed largely against the province of Quebec.
I nave mentioned Rock Island in Quebec because the conditions there are interesting. Rock Island is a small village, straddling the international boundary line, half in Canada and half in the United States. It is a small, rather unimportant looking country place and the people of the village wander indiscriminately back and fro across the border line without knowing that they are doing so. The housewife in Canada walks across the street into the United States, buys a pound of butter and brings it back into Canada, thinking nothing of it. Many years ago some gentlemen, having an eye to the profit to be made by smuggling merchandise from the United States into Canada, went to this obscure village and built there factories for the manufacture of clothing such as shirts and overalls, and others for the manufacture of bolts, nuts and things of that sort. Some of these factories are built straddling the boundary line so that half the building is in one country and half in the other. A bale of goods on the south side of the building would be in the United States, and the owner would need to roll it only twenty feet across the floor and it would be in Canada. That condition has existed for years. Stores in that small village are built in the same way upon the boundary line. You could enter a store on the south side of the building and purchase goods in the United States, and stepping across the floor to the other counter you could buy goods in Canada. The people of that village were not averse to smuggling; at any rate, they were not opposed to it. The customs collector had been there for



Customs Inquiry-Mr. Donaghy
about fifteen years and we brought him before the committee to get his views on the subject and to ascertain what he had been doing there all that time. We found that he had borrowed a few thousands of dollars from one of the factory proprietors engaged in smuggling, and we wondered how he could watch the owners of factories and prevent them from smuggling under such conditions. We found one of our customs officers there doing a large insurance business with these same factory proprietors who were engaged in the smuggling traffic. In other words, there was a sort of family compact in this little village and there was no attempt, so far as we could see, rigorously to enforce the law. I may observe, by the way, that in our report we have recommended that the customs collector who has been asleep there for fifteen years be discharged. That is one of the recommendations which the House will be asked to consider.
In 1914 the conditions were as I have described, and three officers were sent by the government of that day to clean things up. They made many seizures, in those factories of goods which they thought had been smuggled. Several of these seizures resulted in forfeiture of the goods themselves and the imposition of penalties. That had the effect of putting the place in semi-order for a short period. Then there was a lapse of ten years during which nothing was done. From 1914 to 1924 there was no preventive service patrol along the border in Rock Island. Things were allowed to remain stagnant. The only time anything was done was on such occasions as complaint was made. If someone was smuggling in Rock Island and a complaint was submitted, a man was sent from Montreal to look into the matter. But that was not effective. In 1924, one J. E. Bisaillon, concerning whom I shall have something to say later on, sent eight or ten of his preventive force down to Rock Island to stop the smuggling, but like many other efforts of that gentleman this did not prove highly successful, and later on this force was withdrawn. However, as a result of the expedition which he sent to that place, several consignments of smuggled goods were seized and forfeited and some heavy penalties imposed. He has that at least to his credit. When the committee began its sittings, or rather after we had got well unfler way, we sent for some of these manufacturers.


Arthur Meighen: Was it not 1924 that
Bisaillon sent his force down there?


Dugald Donaghy: I said that in 1914 the
government of that day sent three men to Rock Island to make a clean-up-


Arthur Meighen: I thought the hon. member said Bisaillon did.


Dugald Donaghy: -and the governmentleft things stagnant from 1914 until 1924, when Bisaillon went there with his small contingent. As I say, we were rather interested to see the gentlemen who were carrying on this very lucrative trade of smuggling cottons from the United States for manufacture in these factories that straddled the boundary. As you may suppose, some of them were not anxious to appear. Some bucked rather strenuously when we put the halter on them and tried to lead them, and others refused to obey summonses. We asked them to produce their books, and by this time they had become somewhat alarmed, so that some of them mutilated their books or hid or destroyed them. This rendered very difficult the work of our auditors in checking up the quantity of goods these men had smuggled. There was one firm in particular -whose members came forward to the committee with the allegation that the books had disappeared. They swone they did not know what had happened to them; they had no idea. Apparently the books had taken it into their heads one night to walk out. We had able counsel assisting us, but Mr. Calder, K.C., found these gentlemen rather hard nuts to crack. They fought him off for two days, but in the afternoon of the second day, much to the surprise of the whole committee, one of them broke down and made a complete confession. He admitted that he had destroyed the books and he promised to give every assistance he could to the auditors and to our counsel in making a full disclosure of the sins of which he had been guilty. I do not know whether the auditors have succeeded in extracting very much information from him since then, but I am inclined to think that fear of contradicting the evidence he gave on oath before the committee will be a rather strong inducement to him to tell the truth in future.
Another manufacturer who appeared before us refused point blank to give authority to our officers to look into a warehouse he had on the American side of the line a few yards over the border. We wanted to look into that warehouse, because we suspected that he had it filled with merchandise and that in the night time hie slipped the goods across the boundary. He placed himself in contempt of the committee and his case seemed hopeless. However, he was arrested about two o'clock

Customs Inquiry-Mr. Donaghy
in the morning, taken out of his room in the hotel here and placed in gaol on a charge of smuggling. He appeared before the committee in custody the next day, a somewhat repentant sinner I may say, looking very much the worse for wear after his night's incarceration in gaol. This had a very good effect upon him; he gave in and agreed to take the officers down, open his warehouse on the United States line and show what was there. The officers went with him and saw the warehouse, which they discovered to consist of two compartments, one of which was filled with prison-made shirts with the labels torn off, together with cotton goods of various kinds. These were stored within a few feet of the boundary line ready to be smuggled into Canada in the dark or at any favourable opportunity.
These conditions were all revealed to the committee, and after considering them carefully the committee recommended that the law as set forth in the Customs Act be enforced. That law provides that where smuggled goods are found in any building within one hundred yards of the boundary, the authorities may demolish that building. We recommend that that be done in order to get rid of these buildings which straddle the line. We also recommend that an effective patrol be put in force there, where some six or seven country roads all lead to the United States, making it impossible for one customs house to guard them all. This is going to cost some money, but it will protect the revenue of the country if an effective preventive patrol is inaugurated there.
The committee spent a great deal of time, some weeks, in fact, investigating the very large question of cars stolen in the United States, smuggled into Canada and sold here by the thieves. Apparently there was a considerable trade in that line carried on in the city of Montreal. If hon. members will read our report they will find a recommendation suggested there to cover that situation.
Mr. Speaker, I observe that it is after eleven o'clock, and if it is the pleasure of the House I would be glad to move the adjournment of the debate.
Motion agreed to and debate adjourned.
On motion of Mr. Lapointe the House adjourned at 11.15 p.m.
Wednesday, June 23, 1926