1931-07-28

[Stage Direction]
First report of the joint committee on the library of Parliament.-Mr. Speaker.


[Stage Direction]
On the orders of the day:
Mr. F. R. MacMILLAN (Saskatoon):: Mr. Speaker, will the Minister of Railways and Canals (Mr. Manion) advise the house if he

Privilege-Mr. Spotlon
has received any intimation from exporters of grain in the west that they would like to have cargo space reserved in the trial shipment from Churchill. Will he inform the house also if competent authorities in. Saskatchewan have stated that they have secured grain in quantities for the test shipments?


Hon. R. J. MANION (Minister of Railways and Canals):: Mr. Speaker, I have received no requests from anyotie in western Canada for space in this trial shipment. No one has communicated with me except the On-to-the-Bay Association, who stated that they had disposal of 150,000 bushels, which would comprise about half a cargo. While on my feet may I add that statements have appeared in the papers that Mr. Dunning had said repeatedly that if his party were returned to power they would ship 5,000,000 bushels this fall. A search has been made of the records and of Hansard and no such statement has been found. I do not believe Mr. Dunning ever made any such statement. I ask these western papers either to tell me the source of their information or to stop misquoting and misrepresenting.



PRIVILEGE-MR. SPOTTON

[Stage Direction]
On the orders of the day:
Mr. GEORGE SPOTTON (North Huron):: Mr. Speaker, I rise to a question of personal privilege. The Toronto Daily Star of Monday, July 27, contains the following headline:
M.P. Franks Circular Soliciting Students for Business College.
Had Several Hundred Mimeographed in House, George Spotton admits.
The article itself reads as follows:
Enclosed in an official envelope of the House of Commons, Ottawa, a letter written on government stationery received by a Toronto girl, carries a mime'ographed text of about 250 words soliciting her patronage for the Canada Business College, an organization owned and operated by George Spotton, Conservative M.P. for Huron North.
The letter is signed "Canada Business College, per George Spotton, M.P. for North Huron." The outside envelope is franked for free postage, and on the back in large type is the word "free."
Also enclosed is a return envelope, on House of Commons stationery, addressed to G. Mc-Eacbren, B.A., Canada Business College, 274 College Street, Toronto, Ontario.
Interviewed by The Star in Toronto to-day, Mr. Spotton admitted that the letter was one sent out by him.
"How many have you sent out?" The Star asked. "Several hundred," Mr. Spotton said. "Where were they mimeographed?" "In the house. They were dictated to a government stenographer and passed through the usual
channels. All letters dispatched by members have to be authorized by the chief of stenographers and the Clerk of the House."
"Were these letters authorized?" "They were authorized. In fact it was Mr. Smith, head stenographer, who suggested that they should be multigraphed to save time. Otherwise I could have had carbon copies made."
"Do you consider this method of writing business letters quite in order?" "Certainly. I consider it one of my perquisites. Every public office has perquisites. If a man were not allowed to keep in touch with his business while in Ottawa, except by hiring his own stenographer, then a parliamentary career would be for rich men only."
"Is this a general practice?" "Even more so than in my case.' Mr. Smith told me a short time ago that I had been particularly lenient in the use of his stenographers this session. I am not trying 'to put it over.' Both Mr. Smith and the clerk have long experience in parliamentary custom."
Mr. Spotton stated he did not think that the matter would be brought up in the house. "It was done before and it came out that the persons who protested had been themselves making particularly free use of departmental facilities," he said. "If anyone thinks they will do me harm in my constituency, I will say that my electors would laugh if anyone brings up the question in the house, of my having saved $17 or $18 or $21 by using the house stenographers, stationery and stamps. Every envelope bears my initial, written either by me or by someone else on my behalf. That means that I am responsible for that letter."
I wish to say that the Toronto Daily Star was particularly fair to me. During the week end they searched for me all over western Ontario and sought an interview before they published this item.


Mr. SPEAKER:: Will the hon. member
state bis question of privilege? He has laid the ground therefor by reading the article, but it is not in order to make a speech.


George Spotton: The following appears
under date of Ottawa, July 27:
"Offhand, I should say such a practice would be an abuse of the franking privileges," an official of the Post Office Department told The Star, commenting on Mr. Spotton's circular.
That is my chief complaint. I will read another paragraph in the article, as follows: The regulations governing franking are quite broad and indefinite, the text reading merely as follows: "letters and other mailable matter sent to or by any member of the Senate or House of Commons are carried free of postage." No limitation as to the character of the letter is contained in the regulations.


Pierre Édouard Blondin: Will the hon. member
state his question of privilege?


George Spotton: I deny absolutely the
accusation contained in the heading of this article. A cursory reading of the article would make it appear that the hon. member for
Customs Tariff

North Huron was abusing his privileges. I ask that the Postmaster General (Mr. Sauve) give the name of the post office official who says that a member of this honourable body has abused his franking privileges. I state: This is not correct. A lawyer in the house fills out his deeds, leases and mortgages and keeps in touch with his clients, so does the manufacturer, and if a humible business college manager cannot keep in touch with his business, then he cannot remain in the house.


Pierre Édouard Blondin: The hon. gentleman can direct his complaint to the Post Office Department which, and not this house, controls the franking privilege.



CUSTOMS TARIFF AMENDMENT

[Stage Direction]
Right Hon. R. B. BENNETT (Minister of Finance) moved the third reading of Bill No. Ill, to amend the customs tariff.
He said: The hon. member for Kenora-Rainy River (Mr. Heenan) said that on the third reading he desired to move an amendment and the matter stood over to afford him that opportunity.
Hon. PETER HEENAN (Kenora-Rainy River):: I am not going to discuss my amendment at any length, because it has been discussed on several previous occasions, and I think we have exhausted all the discussion on that particular subject. I am not, however, so sure that I am really responsible for the amendment I have to offer. I think the Prime Minister (Mr. Bennett) is responsible for it; in fact, I think the Conservative party is responsible for it, because in 1930 they advocated an amendment to the customs tariff, and taking my cue from their position I consider that industries which are receiving benefits from the customs tariff should be prepared at least to give their workingmen protection in accordance with the treaty of Versailles. My amendment is along the lines of the one I moved when the bill was last in committee. I beg to move:
That the bill be not now read a third time but be referred back to the committee empowering the committee to add the following section:
The governor in council may direct from time to time that any industry, the products of which receive protection under this act, shall demonstrate to the satisfaction of the governor in council that freedom of association for employees for all lawful purposes is permitted in the operation of such industry, and that the hours of labour and rates of wages are observed consistent with the provisions of the labour part of the treaty of Versailles concluded at Paris, France, on June 28, 1919.


Pierre Édouard Blondin: Will those in favour of
the amendment kindly say aye?


Some hon. MEMBERS:: Aye.


Mr. WOODSWORTH:: Mr. Speaker-


Pierre Édouard Blondin: Will those opposed to the amendment kindly say nay?


Some hon. MEMBERS:: Nay.


Pierre Édouard Blondin: I declare the amendment lost.


James Shaver Woodsworth: Mr. Speaker, I was on my feet before you put the motion, trying to catch your eye or ear. Some of us are seated at a long distance from the Speaker, and when we stand in our places in regard to a matter of this kind, I think we have a right to be heard before a motion is put. I was standing in my place before Your Honour put the motion.


Pierre Édouard Blondin: The hon. member for
Winnipeg North Centre rose while I was putting the question. He was too late. The question is now on the motion for the third reading of the bill. If the hon. member desires to speak on that, not having done so before, that is his privilege.


James Shaver Woodsworth: I do not propose to discuss
at any length the proposal put forward by the hon. member for Kenora-Rainy River (Mr. Heenan). It seems to me that this is quite in keeping with the suggestion as made last year by the present Prime Minister (Mr. Bennett). I think it was read once before, but I want to read once again what he said on May 21, 1930. He said:
Did Canada sign the treaty of peace? Did Canada thereby become, amongst the nations of the world, a member of the League of Nations? The answer is yes. Did the Liberal party, in solemn convention assembled, adopt the Labour articles of the treaty of peace? The answer is yes. Did the Conservative party do the same? The answer is yes. To-night the question is whether or not the parliament of the Dominion of Canada that signed the treaty of peace, with two great parties pledging themselves to its observance and the group to my left also supporting it, is helpless. It is true that property and civil rights are matters exclusively under the control of the provincial legislatures. It is equally true that this parliament may, if it so pleases, impose conditions with respect to any matter wherein it expends public money or confers a benefit or privilege upon any person or class or corporation.
I do not think the case could have been better put. Since only yesterday the Prime Minister definitely assured us t-hat he was prepared to carry out the pledges made by the people who elected him to his present position, I can scarcely understand-


Some hon. MEMBERS:: Carried.

Customs Act
. Mr. SPENCER:	Can we not have order
in tfhis chamber ?


James Shaver Woodsworth: I was saying, Mr. Speaker, that since it was only yesterday the Prime Minister told us that since he had been elected by the convention at Winnipeg to the position of leader of the Conservative party he was prepared to stand 'by the program laid down at that time, I can scarcely understand his position in this matter. Today I find that he is taking no steps whatever to carry out the solemn pledges adopted at that convention, and which he himself stated so well only a year ago when leader of the opposition. I can say no more than that.
Motion agreed to and bill read the third time and passed.



CANADIAN NATIONALS ACT


Hon. C. H. CAHAN (Secretary of State) moved:: That the motion to go into committee on Bill No. 24, be discharged, and the bill be withdrawn from the order paper.
He said:	The other day I gave reasons
why it was impracticable in the present session to deal further with the bill.


Hon. FERNAND RINFRET (St. James):: I understand that the government still believes in the principle of the bill, but for some special reason cannot proceed with it at this session.


Charles Hazlitt Cahan: I think I explained the
other day to the hon. member for St. James that because the Minister of Immigration (Mr. Gordon) had been employed on a select committee of the house it had been impossible to secure agreements between the Department of Immigration and Colonization, the Department of External Affairs and the Department of the Secretary of State with respect to certain necessary amendments to the Immigration Act which would be required to comply with the terms of this measure. For that reason the government decided not to proceed further with this measure this year, in the hope that at the ensuing session steps might be taken to enact measures embodying the principle of this bill and also making certain necessary amendments to the Immigration Act so that it may be made consistent with the terms of the bill before the house.
Motion agreed to and bill withdrawn.



CUSTOMS ACT AMENDMENT


[Stage Direction]
Hon. E. B. RYCKMAN (Minister of National Revenue) moved the second reading of and concurrence in amendment made by the Senate to Bill No. 39, to amend the Customs Act.
Mr. MACKENZIE KING:: What is the nature of the amendment?


Mr. RYCKMAN:: The amendment is
really formal in character, and is quite acceptable. If this bill as amended in the Senate becomes law, we will still have in our law subsection 7 of section 151 as it stands at present, although it is understood we will not exercise jurisdiction beyond the three-mile limit pending appeal to the privy council in the Dunphy vs. Croft case. Then, if a favourable decision is obtained from the privy council, a proclamation would be issued, the effect of which would be to repeal subsection 7 as it now stands and substitute therefor the new subsection 7 as proposed in our original bill.
Motion agreed to; amendment read the second time and concurred in.



CHICOUTIMI HARBOUR


[Stage Direction]
Hon. ALFRED DURANLEAU (Minister of Marine) moved the second reading of Bill No. 141, to provide a further loan to the Chicoutimi harbour commissioners.
Motion agreed to, bill read the second time, considered in committee, read the third time and passed.

[Stage Direction]
The house resumed from Thursday, July 2, consideration in committee of Bill No. 106, to amend the Special War Revenue Act.- Mr. Bennett-Mr. Hanson (York-Sunbury) in the chair.
The CHAIRMAN (Mr. Hanson, York-Sun-bury):: We shall consider section 1.


Mr. BENNETT:: No; section 1 has been adopted. The bill was in committee before.


The CHAIRMAN:: I am not certain of
the sections which have been carried.


Richard Bedford Bennett: The first section for
consideration was No. 2.
On section 2-stamp tax on cheques.


Richard Bedford Bennett: This section stood. It ia
proposed to give effect to the contention that cheques of five dollars or under should not pay the stamp tax.
Special War Revenue Act


Mr. RHODES moved:: That section two of Bill 106 be deleted and the following substituted therefor:
2. Section forty-four of the said act is repealed and the following substituted therefor:
"44. No person shall
(a)	issue a cheque for an amount exceeding five dollars, payable at or by a bank or drawn upon or addressed to a bank and requiring or directing payment of a sum of money; or
(b)	present to a bank for payment a cheque for an amount exceeding five dollars, as defined in paragraph (c) (ii) of the last preceding section;
unless there is affixed thereto an adhesive two cent excise or postage stamp or unless there is impressed thereon by means of a die a stamp of the value of two cents."


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 4-stamp tax on receipts for money paid by bank.
Richard Bedford Bennett: The next amendment is
to section 4 with respect to the receipt tax. It merely continues the provision of section 4 of the original act, exempting receipts for amounts up to five dollars from the tax.


Edgar Nelson Rhodes: That section four of Bill 106 be deleted and the following substituted therefor:
4. Section forty-seven of the said act is repealed and the following is substituted therefor:
"47. No person shall sign a receipt for money exceeding five dollars paid to him by a bank chargeable against a deposit of money in the bank to his credit unless he has affixed to the receipt an adhesive two cent excise or postage stamp, or unless there is impressed thereon by means of a die a stamp of the value of two cents."


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 6-Stamp tax on money orders, etc., of express companies.
Richard Bedford Bennett: Section 6 is amended to
conform with the other sections.


Edgar Nelson Rhodes: That section six of Bill 106 be deleted and the following substituted therefor:
6. Subsection one of section sixty-five of the said act is repealed and the following is substituted therefor:
"65. No money order or traveller's cheque for an amount exceeding five dollars shall be issued by an express company, bank or other person unless there is affixed thereto an adhesive excise or postage stamp of the value of two cents, or unless there is impressed thereon by means of a die, a stamp of the value of two cents."


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 7-Stamp tax on money orders of the post office.
Richard Bedford Bennett: This is the same provision with respect to section 69.


Edgar Nelson Rhodes: That section seven of Bill 106 be deleted and the following substituted therefor:
7. Section sixty-nine of the said act is repealed and the following is substituted therefor:
"69. No money order for an amount exceeding five dollars shall be issued under the provisions of the Post Office Act unless there is affixed thereto or to the relative advice a postage stamp of the value of two cents."


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 14.-Excise tax of 1 per cent on duty paid value.
Richard Bedford Bennett: The right hon. leader of the opposition directed attention to a suggested change and we made an amendment in committee, but I think it is more clear if it reads in this way:
or by the owner thereof when entering Canada, unless more than one entry of such goods be made by one importer during one day from one country, in which case the tax shall be applicable.
We exempted goods to the value of $25 coming in by mail or express or by a person crossing the boundary, and we are providing that the exemption shall extend only to one entry by one person in one day from one country. The proposed amendment makes it a little more clear than the amendment that was rather hastily drawn in committee.


Mr. EULER:: Is that the one per cent excise tax?


Richard Bedford Bennett: Yes. It will not apply to $25 worth of commodities brought into the country by mail or express or by any person crossing the boundary, but there shall be only one such entry by any one person in any one day from any one country.


William Daum Euler: It applies only to that provision, the one per cent excise tax?


Richard Bedford Bennett: That is all. There has also been added after the words " gold coin" the words "bullion and unmanufactured gold." Attention was directed to the fact that some gold came in from a foreign country, and we want to make it abundantly clear that it is exempt from the one per cent excise tax.


Mr. STEWART (Edmonton):: If a person were bringing in two different commodities to a total value of under $25, they would not be exempt as there would be more than one entry?


Richard Bedford Bennett: They would have to pay the tax.

Special War Revenue Act


Edgar Nelson Rhodes: That section 14 of Bill 106 be deleted and the following substituted therefor:
14. The said act is further amended by inserting therein the following section as section eighty-eight:-
"88. In addition to any duty or tax that may be payable under this part, or any other statute, there shall be imposed, levied and collected a special excise tax of one per cent on the duty paid value of all goods imported into Canada payable by the importer or transferee who takes the goods out of bond for consumption at the time when the goods are imported or taken out of warehouse for consumption. Provided that the said tax shall not apply to goods, the duty paid value of which does not exceed twenty-five dollars, when imported by mail or express, or by the owner thereof when entering Canada, unless more than one entry of such goods be made by one importer during one day from one country, in which case the tax shall be applicable.
Provided, further, that the said tax shall not apply to articles on which other excise taxes are imposed on importation by Part XI of this act, nor to raw leaf tobacco when imported by licensed tobacco or cigar manufacturers; material for the manufacture of binder twine for export, when imported by the manufacturers thereof; British and Canadian coin and foreign gold coin, bullion and unmanufactured gold; fish and other products of the fisheries of Newfoundland; fish caught by fishermen in vessels registered in Canada or owned by any person domiciled in Canada, and the products thereof carried from the fisheries in such vessels; donations of clothing for charitable purposes, nor to goods enumerated in customs tariff items 700, 702, 703, 704, 705, 705a, 706, 707, 708 and 709, but shall apply to all other articles of whatsoever nature, which are imported.
Provided that when raw furs imported into Canada are exported therefrom a drawback of the tax paid may be granted under regulations to be made hy the minister."


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 18-Drawback.
Mr. ELLIOTT:: There was some discussion with regard to a change in schedules 3 and 4, particularly with regard to vegetables.


Richard Bedford Bennett: I shall come to that. I
have kept it in mind. With respect to section 18, the hon. member for Queens-Lunen-burg (Mr. Ernst) suggested the use of the word "in" after the word "used" and before the word "wrought," to make the meaning clear. That has been adopted.


Edgar Nelson Rhodes: That section eighteen of Bill 106 be deleted and the following substituted therefor:
18. Section ninety-four of the said act is repealed and the following is substituted therefor:-
"94. A drawback of ninety-nine per cent of the taxes imposed by this part paid in respect of materials used in, wrought into or attached
to articles exported, may be granted; provided that payment of a specific saim in lieu of such drawback may be authorized by the governor in council in cases where specific rates of drawback of customs duties are granted under the provisions of section two hundred and eighty-six of the Customs Act."


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On sechedule III.
Richard Bedford Bennett: If the committee will
next turn to the exemptions commencing with line 2 of page 13 of the bill some question arose as to making it quite clear that hospital supplies would be exempt from the sales tax. The exemption commencing at line 2 of page 13 of schedule III is proposed to be deleted, and the following substituted therefor: articles and materials for the sole use of any bona fide public hospital certified to be such by the Department of National Health, when purchased for use exclusively by the said hospital and not for resale.
The committee will remember that some difficulty arose in properly defining the term hospital, and some exception was taken by some members of the committee to the language used. It is proposed to use the same language that was employed in dealing with sales of alcohol to hospitals, and to provide that a public hospital is one certified to be such by the Department of National Health.
Then the exemptions appearing on the same page under customs tariff item 219a. We have to add the provisions of the tariff that wc passed the other day, namely:
Customs tariff-219a. Non-alcoholic preparations of chemicals for disinfecting, dipping or spraying, n.o.p.:
Dry preparations used for the same purposes as goods enumerated in items 219a and 219c.
Those items were passed in the tariff and are now added to the exemptions. Then schedule 3 at the top of the page:
Preparations for use exclusively as gopher poison.
This question was raised by the hon. member for Kindersley (Mr. Carmichael). Then the customs tariff items that I have just referred to, 219c and 409e. The latter item deals with spraying, dusting and other garden machines. Those also will be free from tax.


Edgar Nelson Rhodes: That the exemption commencing on line two of page thirteen of schedule three of Bill 106 relating to hospitals be deleted and the following substituted therefor:
"articles and materials for the sole use of any bona fide public hospital ^ certified to be such by the Department of National Health, when purchased for use exclusively by the said hospital and not for resale;"
Special War Revenue Act

That the exemptions appearing on page thirteen under customs tariff item 219a, and dry preparations used for the same purposes as goods enumerated in item 219a, be deleted, and the following substituted therefor:
"219a. Non-alcoholic preparations or chemicals for disinfecting, dipping or spraying, n.o.p.;
Dry preparations used for the same purposes as goods enumerated in items 219a and 219c;" That the following be added to schedule three:
"preparations for use exclusively as gopher poison."
Goods enumerated in customs tariff item 219e:
"219c. Non-alcoholic preparations or chemicals, such as are used for disinfecting, dipping, or spraying, when in packages not exceeding three pounds each, in weight;"
That goods enumerated in customs tariff item 409e, appearing on page fourteen be deleted and the following substituted therefor:
"409e. (i) Spraying and dusting machines and attachments therefor, including hand sprayers; apparatus specially designed for sterilizing bulbs; pressure testing apparatus for determining maturity of fruit; pruning hooks; pruning shears; animal dehorning instruments; and complete parts of all the foregoing;
(ii) Fruit and vegetable grading, washing and wiping machines and complete parts therefor;"


[Stage Direction]
Amendment agreed to.
Richard Bedford Bennett: The same applies to tariff item 410d, well-drilling machinery and apparatus. There is a list on page 19. We delete the section that appears there and add the items that have been passed in the Customs Tariff commencing at 219a and 219c. That arises from the renumbering of the items in committee so the act will conform to the particulars of the customs tariff.


Edgar Nelson Rhodes: That goods enumerated in customs tariff item 410d appearing on page fifteen be deleted and the following substituted therefor:
"419d. Well-drilling machinery and apparatus, and complete parts thereof, of a class or kind not made in Canada, and seamless iron or steel tubing over eight inches in diameter, for *use exclusively in drilling for water, natural gas or oil, and in prospecting for minerals, but not to include motive power."
That the list of .articles and materials to be used exclusively in the manufacture of goods enumerated in customs tariff items appearing on page 19 be deleted and the following substituted therefor:
"219a, 219c,-Dry preparations used for the same purposes as goods enumerated in items 219a and 219c,-281, 281a, 391a, 406a, 406b, 409a, 409b, 409c, 409d, 409e, 409f, 409g, 409i, 409j, 409k, 409n, 409o, 410b, 410d, including goods enumerated in this item of a class or kind made in Canada; 410e, 410f, 410g, 410k, 4101, 410m, 410n, 410o, 410p, 410q, 410s, 410z, 411, 411a, 411b, 431, 431a. 439c. 439d, 440k, 442, 442a, 476, 476a, 480, 538, 603, 663a, 663b, 666, 667, 696. tubing enumerated in customs tariff item 1017;"


[Stage Direction]
Amendment agreed to.
Richard Bedford Bennett: The next amendment is:
That section 25 of Bill 106 be deleted and the following substituted therefor:
"25. Sections ten to thirteen, both inclusive, and fifteen to twenty-three, both inclusive, of this act shall be deemed to have come into force on the second day of June, 1931; Provided that the rate of consumption or sales tax imposed by section eleven of this act shall apply to any stocks of goods, wares and merchandise in the hands of licensed wholesalers on that date."
Otherwise the section would work great injustice to certain wholesalers who had cancelled their licences. Now they make their sales and pay the same rates as others.
Mr. RHODES; I move that section 25 be amended accordingly.


[Stage Direction]
Amendment agreed to.
Richard Bedford Bennett: There is no change in
the sense of section 26 but the language is put a little clearer by a change in the arrangement of the words.
Mr. RHODES moved;
That section twenty-six of Bill 106 be deleted and the following substituted therefor:-
"26. Section fourteen of this act shall be deemed to have come into force on the second day of June, 1931, and to have applied to all goods therein mentioned, imported or taken out of warehouse for consumption on and after that date, and to have applied to goods previously imported for consumption for which no entry for consumption was made before that day."


[Stage Direction]
Amendment agreed to.
Richard Bedford Bennett: Section 27 will read as
follows:
27. Sections three, five, eight and nine of this act shall be deemed to have come into force on the first day of July, 1931.
That, it will be recalled, is the provision by which all cheques were required to bear a two cent stamp, and it has been in force for the past month:
Sections two, four, six and seven shall be deemed to have come into force on the first day of August, 1931.
That is the exemption of cheques up to $5.
Provided that with respect to cheques, receipts for money, money orders and travellers cheques on which taxes were imposed by sections two, four, six and seven of this act, issued, or presented for payment between July first and July thirty-first, 1931, both dates inclusive, no refund of the said taxes shall be paid.
That is to make it abundantly clear that there will be no difficulty in that regard.


Edgar Nelson Rhodes: That section 27 of Bill 106 be deleted and the following substituted therefor:

Old Age Pensions Act
"27. Sections three, five, eight and nine of this act shall be deemed to have come into force on the first day of July, 1931.
Sections two, four, six and seven shall be deemed to have come into force on the first day of August, 1931. Provided that with respect to cheques, receipts for money, money orders and travellers cheques on which taxes were imposed by sections two, four, six and seven of this act, issued, or presented for payment between July first and July thirty-first, 1931, both dates inclusive, no refund of the said taxes shall be paid."


[Stage Direction]
Amendment agreed to.
Richard Bedford Bennett: My hon. friend from West Middlesex (Mr. Elliott) raised a question with respect to certain types of canned vegetables which he thought might possibly be brought within the exemptions. After much consideration the officials of the department advise that there is no good reason why it should be done having regard to all the circumstances, and from a personal examination of the facts I cannot think that there is any reason for taking that action at this time.


[Stage Direction]
Schedule agreed to.
Title agreed to.
Bill reported, read the third time and passed.


[Stage Direction]
The house resumed from Monday, July 27, consideration in committee of Bill No. 136 to amend the Old Age Pensions Act-Mr. Bennett-Mr. Hanson (York-Sunbury) in the chair.
Richard Bedford Bennett: Mr. Chairman, my hon. friend from Kenora-Rainy River (Mr. Heenan) suggested an amendment last night. He said that the provinces were desirous of having the amendment, but it imposes an additional burden upon the state, and I think it would be out of order.


Peter Heenan: I think the Prime Minister misunderstood me, Mr. Chairman, I did not offer it as an amendment. I think this is a measure that we can very well deal with without offering amendments from our side. What I had in mind I would rather offer as a suggestion.
The question of the amendment of the Old Age Pensions Act has been fairly well discussed in this house during this session, and I am not going to cover the ground further. The leader of the opposition has suggested that the government Should take over the old age pensions scheme and administer
it with the Dominion paying 100 per cent, and my hon. friend from Winnipeg North Centre (Mr. Woodsworth) has offered a suggestion with regard to the inclusion of the blind. I should like to say to the Prime Minister, in case he does not know it, that I think I am safe in saying five of the provinces have signified their willingness, either directly or indirectly, to have the blind taken in when the Old Age Pensions Act is amended.
The amendment I suggest to the Prime Minister at this time has to do with a matter which is causing a great deal of hardship. It is true that only a very few people are affected, but still those few should be entitled to a pension which, because of the way the act reads at present, they cannot get. As I said before, when we first introduced this measure we did not know how many provinces would take up the scheme, and naturally it was desired to protect the provinces who first took part, so that if only one or two provinces participated they would be protected from an influx of old people from other provinces. So we included subsection (d) of section 8, which reads:
(d) has resided in the province in which the application for pension is made for the five years immediately preceding the said date;
We find, in the administration of the act, that, I think, fifty old people have resided in one or more of the provinces for more than five years but have not been in any one province for that length of time. They have been in this country all their lives but are unable to obtain a pension. When the interprovincial board met to discuss amendments and new regulations they drafted the following suggested subsection to replace the present subsection (d) of section 8:
(d) has resided in the province in which the application for pension is made, or in that province and in another province with which an agreement under this act is in force, for the five years immediately preceding the said date.
That is to say, if a person had been in this country for twenty years and had resided for five years in one or more of the provinces coming under this scheme, he would be permitted to apply for pension, and since the five provinces under the scheme desire this amendment I suggest to the Prime Minister that he give consideration to it, because after all is said and done it will only affect about fifty persons.


Richard Bedford Bennett: I am not disposed, Mr. Chairman, to adopt the amendment at this session.


William Lyon Mackenzie King: I had not intended to say anything further in committee, and had it not been that at the close of
Old Age Pensions Act

yesterday's sitting my right hon. friend by his remarks rather left the impression that in some way I was seeking to block this legislation, I would not speak at the moment. Fortunately the Hansard report is there and speaks for itself. Hon. members of the committee will see that when the bill came up for second reading I drew the attention of t'he Prime Minister to the fact that the preamble contained a clause which I thought would create some difficulty unless it were removed. I thought it desirable that it should be removed in order to ensure the enactment of the measure. When my right hon. friend rose to speak he said he intended to withdraw that particular clause, and it was withdrawn.
Later I spoke about the desirability of the government taking over the administration of the measure, particularly since it now involved a contribution of 75 per cent on the part of the federal administration; I said it seemed rather anomalous that the body which was paying the largest part of the cost of the scheme should not be the body to administer it. My remarks were all intended to convey the hope that the government would move as rapidly as possible towards the administration of the scheme in its entirety in order completely to relieve the provinces of that responsibility. I also said that in speaking during the last campaign I had expressed the view that it was desirable that there should be a dominion-provincial conference to review as between the dominion and the provinces all these matters of social services and to delimit the fields of taxation and of expenditure and that I thought it would have been of advantage to the dominion had such a conference been held before this legislation was brought in. A conference for that particular purpose might well have taken place previous to this session of parliament. At any rate, it might have been arranged that a conference would take place between now and next year at which time a 100 per cent payment might be agreed upon. My sole contention in that regard was that in making our financial readjustments with the provinces, being trustees of the dominion's purse, we would in such an event be in a stronger position than would be the case if, before holding any conference of the kind, we were committed to further extensions of these and other grants.
Then I think my right hon. friend rather left the impression that in some way, when in office, I had been responsible for beginning the grants in general. May I say that the policy of making grants to the provinces 
started with previous administrations; that they had been made with respect to highways, agricultural instruction, technical education, loans for housing and unemployment relief before the Liberal administration ever came into office. With respect to old age pensions, at the time the Liberal government undertook to pay 50 per cent of the cost it was recognized that it was desirable to have a national scheme, but at that time anything of the sort was impossible owing to well known constitutional difficulties. The government of the day had been advised by the Department of Justice as to its authority and rights and powers in the matter, and as a result of the advice given the government reached the necessary conclusion that unless it were to be made a contributory scheme, which at the time we were not prepared to consider, the federal government could not inaugurate an old age pension scheme in any other way than by grants to the provinces. That was the reason why the government of the day made the grant of 50 per cent; it did so with a view to bringing about throughout Canada a uniform system of old age pensions and also with a view to giving time to remove any constitutional impediment to the dominion taking over the entire scheme. It was felt that the fact that all the provinces would be prepared to accept an old age pension scheme on the lines laid down to secure uniformity would of itself be the strongest evidence that it was desirable to have such a scheme on a national scale, administered federally.
That is the sum and substance of the remarks I made yesterday, and if my right hon. friend felt that in any way they were susceptible of another interpretation I hope he will permit hon. members of the committee to read for themselves the Hansard report.


Richard Bedford Bennett: They can read it without my permission.


Mr. NEILL:: I understand that the right
hon. Prime Minister has said he will not open the act for amendment at this time, so I only desire to place on record in the hope that it may be useful to the Minister of Labour when the act is to be amended another year, this difficulty which has been experienced in ascertaining the age of these old people.
The regulations require the production of a birth certificate, if possible, but in several of the older provinces of Canada births were *not registered seventy years ago, and it has been sought to have recourse to the census returns where the age given by a man at a

Sup ply-Fisheries
certain period is on record. For some reason or other, however-I think possibly in the Census Act-there is a regulation which provides that even with the consent of t'he man or woman this information may not be given out unless it has reference to a census which took place not less than thirty years ago. Old people applying for old age pensions forget frequently just where they were thirty years ago, and this information is difficult to locate. If the parties are willing to sign a consent certified to by a justice of the peace that they are willing to have their age revealed as at a certain census; this should be made applicable to as late as the census of 1921 because it would be out of place to use the present one where wrong information might be given for purposes of eligibility. In 1901 there was no suggestion of old age pensions and it would facilitate the work if access could be had to the censuses up to and including the year 1921.


[Stage Direction]
Section agreed to.
On the preamble.
Richard Bedford Bennett: I will ask the hon. member for Argenteuil (Sir George Perley) to move an amendment to the preamble.


Sir GEORGE PERLEY:: I move that the preamble be amended by striking out all the words after the word "desirable" in the seventh line down to and including the word "desirable" in the twelfth line.


Richard Bedford Bennett: The preamble would then read:
And whereas it is desirable and would be of advantage to the Dominion to augment the national contributions:


[Stage Direction]
Amendment agreed to.
Preamble as amended agreed to.
Peter Heenan: Section 20 of the act of 1927 reads as follows:
All regulations made under this act shall, from the date of their publication in the Canada Gazette, have the same force and effect as if they had been included herein.
Regulation number 32 under the act reads as follows:
The minister charged with the administration of the act may at any time require the province to furnish information, detailed or otherwise, in connection with statements of account rendered by the province.
Although it has not been used, I consider that there is sufficient authority contained in this regulation without making necessary subsection 3.


Richard Bedford Bennett: It is just to make it clear.
Bill reported, read the third time and passed.

The house in committee of supply, Mr. Hanson (York^Sunbury) in the chair.



DEPARTMENT OF FISHERIES

[Stage Direction]
To assist in the conservation and development of the deep-sea fisheries and the demand for fish, $190,000.
Mr. STITT (Nelson):: Mr. Chairman, before this item is carried I would like to deal with certain articles which have appeared in the press in connection with the fisheries of Hudson bay. I feel that I would fail miserably in my duty as the representative of that great country if I did not correct some of the statements which have been made.
The Ottawa Journal of April 24 contained an article stating that the government spent a large sum of money last summer making an investigation into the fishing possibilities and that no fidh were taken. That article would cause the average citizen not acquainted with that country to believe that there is no fish in the Hudson bay, and to that statement I take exception, I intend to place on the records of this house certain evidence in regard to the fishing possibilities in that great body of water. This information should be of great benefit to hon. members of the house as well as to the people of Canada generally.
In a book published by the Department of the Interior entitled The Unexploited West, I find the following information in connection with Hudson bay. J. B. Tyrrell, a well known engineer, stated that salmon of the very finest quality are found in abundance both in Hudson bay and the''straits. In another paragraph, Mr. Hanbury of the department states that he has seen Eskimos with cod and fish in great abundance along both the east and west coast of the bay. Mr. Christie, chief inspector of the Hudson's Bay Company, stated before the Senate committee that salmon were found in large numbers at Churchill as soon as the ice cleared out of the river, which was about the middle of June. He stated that they entered the river and went out with the tide, and he thought that these salmon were as large as those he had seen in Scotland. Mr. A. P. Low, director of the Geological Survey of Canada, examined by the Senate committee, stated that the Arctic salmon found on the east and west sides of the bay were very abundant. He stated that this was an excellent fish, beautifully coloured and resembling the western salmon more than it did the Atlantic or eastern salmon. He stated that salmon fishing in Hudson bay would no doubt have a commercial outlet as soon as marketing facili-
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ties were provided. He stated that the whitefish to be found in the bay was a very fine fish.
Captain Bernier, the explorer, published an excellent book entitled Hudson Bay and Straits which book contained a report of the special committee appointed to report on the navigability and fishing resources of Hudson bay and the straits. Captain Bernier states that at the entrance to the straits there is any amount of codfish, and that east of there they used to take from 200 to 300 fish a day with line fishing. He states that he caught a few halibut at Fullerton and some salmon further north. He found every river along the coast teeming with fish, particularly with salmon trout weighing from 10 to IS pounds. In the same bulletin, Mr. J. B. Tyrrell, a mining engineer and explorer who has made several trips into the bay, states that he met an enormous number of walrus which swarmed about the shores of the islands. These walrus live on clams and other shell fish and are to be found in great numbers. He states that they saw many seals and caught large quantities of fish, including salmon, whitefish and sturgeon. He states that seals appear quite frequently along the shores of the straits and bay.
So much for the evidence given before the Senate committee, to which I might add my own knowledge gained during eighteen years spent in this country. I have seen as many as 1,000 whales come into the harbours of Nelson and Churchill at one time. These whales live on fish, so that if what some seal expert who writes for the Ottawa Journal says is true, that there are no fish in the bay, there would not 'be any whales or seals or walruses, because those mammals live exclusively on fish. Inside of an hour using a short net, I have taken out of the bay more salmon than would fill a small boat. Last summer, when I was there during my election campaign trying to capture a few votes from a handpicked bunch of Liberals that were put in there, I saw about 1,000 whales chasing a shoal of herring. It was a great sight and was evidence that there must be fish in the bay.
It is true the government sent a trawler there last year to do some investigating in the deep water. It is also quite true they did not catch any fish by this deep-water trawling. Every schoolboy in that part of the country knows fish are not to be found in the deep water of the bay, because the water there is only one degree above freezing point, but we know there is a great number of fish along the shores and in the estuaries of the rivers. It is interesting to note that the fishing industry of British Columbia produces 
two-fifths of the fishery wealth of the dominion. Exactly the same condition exists in Hudson bay. I cannot too strongly urge upon the minister the necessity of a more thorough investigation of the shoreline and estuary fisheries of Hudson bay. It is of great importance to the Hudson Bay railway and the people of the west that a complete investigation is made. Boats should be sent in there, equipped to ply on the east and west shores of the bay with a good supply of gill nets, small boats and net fishermen. I sincerely hope the minister will provide for that at the earliest possible moment, and that it will be carried out.


Edgar Nelson Rhodes: If the hon. member for Nelson reads the report outlining the result of the investigation into the fisheries of Hudson bay, I think he will see that the statement that there were no fish had reference merely to what is known as deepssea fish, that is, cod, halibut and fish of that type. There is no question that the results of the experiments conducted by the Loubyrne demonstrate that fact. It is well known, that for many years there have been rich cod fisheries in Hudson strait, especially at the entrance. As a matter of fact, Newfoundland fishermen operated cod fisheries there as far back as a century ago. It is also well known that t'he rivers flowing into Hudson bay are teeming with fish; that those are what we know as freshwater fish. My hon. friend referred to the fact that there were seals and whales in the bay and they would not be there unless there were something on which they could feed. As a matter of fact, I am informed by the officers of my department that shoals of caplin come in there from time to time and they form the most delectable food for seals and whales. We are well satisfied the rivers are teeming with fish that an investigation on the part of the department scarcely seems necessary excepting that I might add that even this year we have issued a number of experimental licences to individuals who are conducting fishing operations there and a condition attached to the licence which was given to them was that they Should report to the department the result of their season's operations. Therefore, to the extent that they succeed, we shall add to the store of knowledge we already have.
In conclusion, I should like to assure my hon. friend we are already seized of the fact that there are rich fisheries in the rivers and tributaries surrounding Hudson bay.


Mr. BRADETTE:: I must say very frankly to the Minister of Fisheries that the northern

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seotion of northern Ontario is not satisfied with what I may call the Hachey report. I believe the government should find it possible this year to spend another $65,000 in order to make a very thorough inquiry into the situation, because we maintain that there are deepwater fish in Hudson bay. I am going to give the history of the reasons why such an inquiry was made last year. At page 81 of the sixty-third annual report of the Fisheries branch, I find the following information :
Hudson Bay Resources
A quick trip visit was made to the Churchill at Hudson bay during the late summer, the object being to ascertain what available information there was relative to the fisheries of the bay and the estuaries of the big rivers. A special report was made to the department, in which a recommendation was made to send a properly equipped trawler from the outside to investigate conditions in the deeper areas of the bay.
Along the Manitoba coastline and entering the rivers, there appear to be two important varieties of fish, the Arctic trout and herring or ciscoes. The former centre on the Churchill, while the latter seem more plentiful towards the Nelson, also whitefish although these fish are apparently not very plentiful. There are also to be found indefinite indications of both cod and halibut, but nothing to base a conclusion on whether or not these are indigenous to the waters of the bay.
Again it is clearly stated that in Hudson bay there are deepwater fish. In our section of the country we were all astonished when we read the report which was made after only a few days spent in making investigations over an area which covers 540,000 square miles in Hudson bay and 150,000 square miles in Hudson strait and Ungava bay, and which stated that there were no deepwater fish.
I am going to read the preliminary report of the investigations of the Hudson bay and strait fisheries expedition of 1930. On page one of the report I find the following: Instructions From The Department
The instructions received from the department were in part as follows:
"Actual fishing operations should be begun as soon after Hudson strait is entered as may be deemed feasible, but there should be no unnecessary loss of time to the trawler incurred in the journey to Churchill, or fishing carried on to the extent that might endanger exhaustion of the coal supply before Churchill would be reached. Also fishing should be again conducted in the strait on the homeward journey to as great an extent as conditions will permit."
On page 2, I find the following:
Operations In Hudson Bay
On the journey across Hudson bay the biological, physical and chemical conditions of the waters were investigated. These investigations consisted in,-
(1)	collecting samples for the qualitative and quantitative determination of the smaller organisms present which would form an important link in the food cycle of life in these waters,
(2)	determining the temperature of the water at various depths and localities,
(3)	obtaining samples of water for the determination of the salinity of the water at various depths and localities, and
(4)	setting out drift bottles for the purpose of mapping the prevailing surface water movements.
On page 3 of the report they give the results:
Results
The expedition travelled a total distance of about 8,000 nautical miles. Of this amount 3,100 miles were covered in occupying the various stations for the purposes of the investigation. The total distance was covered in approximately fifty-six days so that the average daily distance travelled was 143 miles.
The record of fishing operations furnishes the particulars of the actual fishing done.
Our objection is to the actual fishing done. We maintain in our district that the time allotted was not sufficient to make a thorough investigation. The report continues:
Hand lines were used at several points for seven hours and fifteen minutes. Drift nets wrere used for twelve hours. Long lines were used for two hours and fifty-five minutes, and trawling operations were carried on for fifty-seven hours and fifty minutes. As a result of the total work covering the whole of Hudson hay not a single commercial fish was taken.
I stated previously that Hudson bay comprises an area of 540,000 square miles. Was it possible to investigate such a large area in such a short time? They also had to investigate fishing conditions in Hudson strait which, including Ungava bay, comprises an area of 150,000 square miles. It was absolutely impossible to make a very good investigation under the circumstances. I must give credit to the officers in charge because they did the best they could in the time allotted, but I repeat that at least a three months' investigation should be conducted in these waters next summer. Anyone will realize that it would take at least three months to make a thorough investigation into the resources of Hudson bay. Quoting from the report, I find this:
In looking over a chart of the Hudson bay region the experienced fisherman would note immediately the absence of anything that would correspond to the various "banks" so familiar and appreciated by the fishermen of the Atlantic Coast. There is one small region in the vicinity of stations 39 and 40 which might be called a bank.
I challenge that statement. Any navigator in those waters knows that there is more than one bank in Hudson bay. The whole of James bay is practically a bank itself, and
Sup pi y-Fishe ries

there are unlimited schools of fish in that section of Hudson bay. They wind up their report by saying:
The scientific investigations were carried on concurrently with the fishing operations, and sufficient data is available for the correct interpretation of the fishing results. The cursory examination of the material collected and the data noted suggest that the waters of Hudson bay are similar to the unproductive waters of much higher latitudes.
Again I challenge that statement. The greater part of Hudson bay is in a temperate zone. The climatic conditions in James bay are identical with climatic conditions in Cochrane or northern Ontario. The statement in the report is not a true statement of the conditions in Hudson bay.
In all sincerity I say that this is not a political question but as a man from northern Ontario I am particularly interested, as all hon. members must realize, in this question which vitally affects the northern sections of Ontario, Quebec and Manitoba. Only a few years ago the Ontario government wanted to extend the government railway northward from North Bay, and some people prominent in public life said that not a single dollar should be spent in that northern country which they said consisted only of stunted poplar and muskeg. To-day that district, which comprises Cobalt, Porcupine and Kirkland Lake, is the treasure house not only of northern Ontario 'but of Canada as a whole. The same is true of Hudson bay. Anyone who looks at the map must be arrested by that great inland sea, and no one will say that not a single deep sea fish could be caught in that vast expanse of water. I know that the minister has at heart the development of the fisheries of this country. There have been rumours that there is fear of competition from Hudson bay with the fisheries of the Atlantic and the Pacific coasts. I do not believe that there is anything in that, but I would point out to the minister that we are fully equipped now to give a thirty-six hour refrigerator car service from Moose Factory to Toronto, and a forty-eight hour refrigerator car service from Moose Factory to New York. So we are highly interested in this problem. In conclusion, I would make a strong appeal to the minister to send a trawler up there this fall, to quarter there for the winter months, and then conduct a three months' inquiry into deep sea fishing in Hudson bay next summer.


Edgar Nelson Rhodes: I think we are all agreed
with my hon. friend from North Timiskaming that this is not a political question, and I hope it will never be approached as such. I am at one with him in that, and I think all members of the committee are.
[Mr. Bradette.l
I do not think it was ever suggested when
this expedition went to Hudson bay that in one short season it could cover that whole immense area. Without for a moment calling in question the findings of that commission, and without calling in question the suggestion of my hon. friend that a further and more prolonged examination might result in finding deep sea fish in those waters, may I point out this, especially with reference to his suggestion that possibly the examination was not as complete as it might have been, and that if deep sea fish were discovered in those waters it would minimize the opportunity of selling fish from the Atlantic coast-


Joseph-Arthur Bradette: I say there were
rumours to that effect.


Edgar Nelson Rhodes: I never heard of them
before, but I do not find fault with my hon. friend for having voiced them, although I do not think there is any truth in them at all. I would point out that the fishing operations were under the direction of Captain Sigurd Sorensen, master of the Loubyrne. He was given full charge of the actual fishing operations, while the scientific aspect of the expedition were under the direct supervision of the officer in charge, Mr. H. B. Hachey. In Captain Sorensen the department had a man who had had twenty-four years of experience in trawler operations in various north Atlantic waters, including the North sea, the White sea, the gulf of St. Lawrence, the waters off Labrador, Iceland and the west coast of Scotland, and the region extending from the Grand banks to Georges banks. In addition, at least two members of the crew were experienced in the use of hand lines and long lines. The instructions received from the department were as follows-I am quoting from the report:
Actual fishing operations should be begun as soon after Hudson strait is entered as may be deemed feasible, but there should be no unnecessary loss of time to the trawler incurred in the journey to Churchill, or fishing carried on to the extent that might endanger exhaustion of the coal supply before Churchill would be reached. Also fishing should be conducted -again in the strait on the homeward journey to as great an extent as conditions will permit.
My hon. friend quoted quite correctly the number of hours which the expedition employed in the various methods of fishing. For example, that some seven hours and fifteen minutes were employed in the use of hand lines, twelve hours for drift nets, two hours and fifty-five minutes for long lines, and fifty-seven hours and fifty minutes fishing by means of the trawler, but when you come to analyze the record as disclosed in the report of the expedition it will be found that this com-

Supply-Fisheries
paratively limited number of hours represented continuous operations subject only to the limitations of weather and sea conditions, beginning on August 8 and continuing to September 10. Furthermore, these operations were directed by men who knew, of their own experience, from the character of the ground the probable places in which fish might be caught. So it by no means represented as limited an inquiry as my hon. friend would imagine. Furthermore, the scientific end of the expedition was engaged in determining a number of other factors which would have a bearing on evidencing whether or not there were any deep sea fish, such as taking the temperature at various depths, taking water samples, investigations as to the various forms of bottom life, quantitative and qualitative samples of minute organisms in the upper fifteen fathoms. If, as time proceeds, it is deemed advisable to extend and enlarge this experiment, I am prepared to approach it sympathetically. Certainly our store of knowledge will be much more rapidly augmented now that the Hudson bay railway is open and Churchill will become an occupied place of some importance. -Possibly we may be able to discover what the conditions are by the actual operations of men upon the ground, which would save the treasury a great deal of money in sending an expedition up there to carry on an investigation covering two or three years. If there is evidence that further and more complete and extended inquiries would result in the discovery of sea fish there I should be very happy to lend my support to the proposal,


Olof Hanson: Before this item is carried I should like again to bring before the house a matter which seriously concerns Canadian fishermen on the Pacific coast. At an earlier date I believe I outlined their reasons for being concerned about this particular matter. At this time, speaking again to the question, I shall quote some of the evidence by members of the American fishing fleet from Washington. The whole report is lengthy, and I do not intend at this time to read it fully, but shall make a few quotations to show that it is necessary for the American fishing fleet to use the port of Prince Rupert.
I understand that since I last spoke concerning this matter the minister has received a petition signed by fishermen and residents of Prince Rupert and vicinity. I understand it is signed by the Canadian Fishermen's Association. In 1920 it was urged that the port of Prince Rupert should be closed to American fishermen. I believe the minister has thoroughly investigated the matter, and that 22110-260
it is of great importance so far as Prince Rupert is concerned. We lose the trade and rail haul of fish going to the American market, the market we have ultimately to secure in which to dispose of our Canadian fish. Before a committee of congress Mr. H. E. Lokken appeared representing the Fishing Vessel Owners' Association of Seattle, Washington. Mr. Hadley who did the questioning was one of the commissioners. I quote from the evidence as follows:
Mr. Hadley:	How many owners do you
represent?
Mr. Lokken:	Our association consists of 190
vessel owners. Their investment is over $1,500,000.
Mr. Hadley:	They are individual independent operators, who have an association to which they all belong ?
Mr. Lokken:	Yes, sir.
Mr. Hadley:	And you are representing that
association?
Mr. Lokken:	Yes, sir.
Mr Hadley:	And you say there are 2,500-
Mr. Lokken:	Fishermen.
Mr. Hadley:	What are the opportunities
for source of supply for the American fishermen?
Mr. Lokken:	Where they catch their fish?
Mr. Hadley:	Yes.
Mr. Lokken: They catch their fish in Alaskan waters, or in waters from northern California clear to Bering sea.
Mr. Hadley:	Is there an unlimited supply?
Mr. Lokken:	No, sir, there is not.
Then, at a latter point I find the following:
Mr. Hadley:	How many pounds did you say
are produced on the American side?
Mr. Lokken:	44,000,000 pounds this past
year.
Mr. Hadley:	And on the other side how
many?	.
Mr. Lokken:	9,000,000.
Mr. Davenport:	A rather large percentage
of our total was landed at Prince Rupert.
Mr. Lokken:	21,000,000 pounds are landed
at Prince Rupert; 13,000,000 pounds at Seattle, Washington; and 9,000,000 pounds in Alaska.
Mr. Davenport: Does Canada object to your landing fish at Prince Rupert?
Mr. Lokken:	There has been objection a
number of times but only on the part of the Canadian fishermen alone.
Mr. Davenport: If you had to land your catch at Seattle, would it mean additional cost of operation?
Mr. Lokken: It could not be done, because the run from Seattle is something like 1,200 miles, and only on rare ocasions can that be done; that is, when _ a vessel will catch the larger part of its trip in two or three days and will have sufficient speed to come to Seattle in a short time.
Mr. Davenport: Suppose they should shut out Prince Rupert; what would you do?
Mr. Lokken: We would just have to tie up; the majority of the vessels would just have to tie up.
That was in 1929. Since the matter has been taken up in this house I have received

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a wire from the Deep Sea Fishermen's Union. The wire is dated June 22, 1931, from Seattle, and is addressed to Mr. J. M. Morrison, the Canadian agent of the Deep Sea Fishermen's Union. The text is as follows:
Rumours here that there is strong move to close Prince Rupert to American vessels, wire our member's attitude on this matter. In my opinion it would not help men there as we are in the midst of a national and international depression we can and will try to have the tariff on Canadian fresh halibut reduced to one cent per pound if the men there think that of sufficient benefit.
I wish to read at this time a paragraph from a letter from myself to the minister dated July 2, 1931:
I also have a letter informing me that the halibut fishermen on the American side have asked their representative in Washington to cooperate in every way with the Canadian authorities in order to adjust the present discrimination between Canadian and American halibut fishermen, especially in reducing the American duty, if not altogether, at least 50 per cent. This is for your information and I hope you will give it due consideration and advise me as to what steps you have taken in this regard.
I do not think it is necessary to go into this matter at greater length. I wish merely to learn from the minister whether he has done anything to assist the fishermen either by negotiations with Washington or closing the port of Prince Rupert to American fishermen.


Alan Webster Neill: Before the minister answers
may I add my support to the proposals put forth by the hon. member for Skeena (Mr. Hanson), as I did when the same constituency was represented by an hon. member of the party opposite. This is not a political matter at all; it is beyond and I hope above that. The petition to which my hon. friend has referred I understand was signed by 1,500 people. I suppose that they did not solicit the ladies, so that 1,500 people in a place the size of Prince Rupert would indicate almost complete unanimity. I believe they seek to have the minister take steps to restrict the operation of American fishermen into the port of Prince Rupert. On many occasions in the past this matter has been discussed by officials but never was there a better opportunity or more appropriate occasion to take action than the present.
We know of the conditions of hardship existing among the fishermen in the present year, and I believe conditions will be much worse this year than they were last. Any support which can be given the fishermen to enable them to help themselves is much better than the handing out of doles. A gov-

ernment is in power committed to the policy of high protection. To avoid possibility of an argument I shall simply use the expression "protection." Coupled with that policy we have heard the further suggestion of equal opportunities to the man in Canada as against competitors from foreign fields. It cannot be said that Canadians and aliens are operating on equal terms when the alien can come into our ports, bond his fish through to the United States, get two cents a pound of protection in that market-because there is a duty on our fish going into the United States-fish with our fishermen on a common fishing ground and purchase gasoline at a price much lower than that asked of our fishermen.
At no time have we any right to object to duties imposed by foreign nations. That is their privilege. When such duties are imposed we can but take such steps as are possible to balance the situation. That is not always possible, but in this particular situation it is, owing to the geographical advantage we possess. The halibut ground used to be much nearer Seattle but because that ground has been fished out the fishermen have moved farther north and west until now it is practically compulsory for American fishermen to land their fish at Prince Rupert. There exists in the United States a rather high-class market such as we do not have in Canada. So we must base all our conclusions on those premises, that the market is in the United States. The halibut banks now being exploited lie so much nearer Prince Rupert that, as I said, the American fisherman is compelled to go in there, even though he does not want to. Efforts have been made to go to Ketchikan, which is comparatively near, or to Seattle, but in both cases it has been found impracticable and unprofitable, on account of the extra handling and extra expense involved. So the American fisherman must use the port of Prince Rupert, and the report that my friend from Skeena quoted was the report of a representative of the American fishing interests before a congressional committee at Washington, saying they did not want to change the existing system, and if they were compelled to they would have to tie up their boats.
The minister cannot impose a duty, but it is suggested that to remedy the present unsatisfactory situation he could charge port dues on all foreign fish coming into Prince Rupert. Or for a time he could withdraw the regulations under P.C. 2777, which gives certain privileges to American citizens coming into our ports. These privileges are granted absolutely as a matter of courtesy, and are

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renewed annually at the beginning of the year. I do not suggest that he should do that; he need not close the port, but he could place our men on the same basis as the American fishermen by imposing port dues of 2 cents a pound on foreign fish. The evidence quoted by my hon. friend from Skeena shows that the American fishermen could not endure that. That is the language they used a year or two ago. But to show that condition still exists and is indeed intensified, we have only to consider that when this matter was brought up in the house a month or two ago-and it was not at the time pushed to the extreme of asking for action

immediately the American fishermen from their headquarters at Seattle wired, as my hon. friend has said, to Prince Rupert, asking the Canadian fishermen to go slow on that matter because they were making efforts with their congressmen at Washington to have the two cent duty taken off. We have evidence that they are taking the matter up now, and they are asking their congressmen to take action-and this only on a vague hint that the policy I have suggested might be adopted. I am thoroughly satisfied that if the minister took that step we would find that the American authorities, through pressure at Washington would arrange the matter by striking out the obnoxious two cent duty. The result would be as Mr. Lokken said, the duty would either have to be taken off or they would lose the trade. Either event would undoubtedly inure to the benefit of our fishermen and would be the making of Prince Rupert.
While it would benefit Prince Rupert both as to halibut and salmon as the duty on fish going into the United States applies not only to the halibut but to salmon, and that affects also the district which I represent. There is a season of the year when practically our only market for spring salmon is in the United States. Speaking a few minutes ago when I said that our market for halibut was almost exclusively in the eastern United States I should have also mentioned spring salmon. Our market for the spring salmon that we catch off the west coast of Vancouver island in the spring and early summer i3 principally in New York and other eastern United States cities. That market cannot be secured anywhere else, so far as I am aware, than in the United States and our nearest port is Seattle. If this regulation were passed we would get a better price for our "springs" as they are called, at that season of the year.
I hope the minister will take action. I may say, without any attempt to flatter him, that he has shown himself to be a man capable
of taking decided action. If he took action in this case he would not only endear himself to the fishing industry of the Pacific coast, but I think he would also secure the respect of our friends to the south, because that is just the sort of language they understand, and if they found that he was prepared to take a step such as I have suggested, it would buttress him very strongly in any dealings with them. I am quite sure we would soon find them knocking at our door anxious to enter into negotiations.


Edgar Nelson Rhodes: Mr. Chairman, my hon. friends, the members for Skeena and for Comox-Alberni have touched upon a question which is not free from difficulty, but in that respect it is in common with every problem that I have so far met in the fishing industry -it seems to be one of a succession of difficult and almost insolvable questions. Let me say at the outset that, while I agree with my horn friend from Comox-Alberni that this is not a political question so far as parties in Canada are concerned, yet he was unfortunate in bringing in the controversial question of protection, because I am rather sensitive upon the subject. Although a protectionist, let me say to him that I have never subscribed to the point of view that there is any such thing as high protection or low protection. I would not wish to digress into a tariff discussion, but I should not like his remarks upon that point to pass without putting in this caveat; otherwise he might accept my silence as agreement with his idea of what our views are in respect to that vexed question also.
As my hon. friend from Skeena knows, this subject probably has become more acute this year by reason of the depressed conditions which have resulted in a very low price for fish and a very limited market. In fact the market this year was limited to such an extent that something has happened there which so far as I can ascertain has never happened heretofore, certainly not on the Pacific coast, namely, the fishermen could not sell their fish and for a time had to tie up their vessels with heavy loss to themselves because their overhead charges had to be carried on in the meantime. I can quite understand the feeling of bitter dissatisfaction-I do not think that is too strong a term to use -of those engaged in the industry at the unfairness of the situation which exists there today by reason of the difference in prices. Because here we find American vessels and Canadian vessels fishing side by side in the same waters, for the same fish, with the same
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gear, and coming to the same port, and eaeh having the same privileges there, and yet the American fisherman can ship his fish through Canada into the United States and land it there duty free, while the Canadian fisherman is handicapped to the extent of the duty of two cents a pound. I must say that I do not take very much exception to the attitude of the Canadian halibut fisherman as to the injustice of that situation. I can assure my hon. friend that I have given very serious thought to the question as to whether it would not be wise for us to prohibit the port privileges at Prince Rupert to the American halibut fishing fleet so long as this unfair condition continues. That I did not take action was because the petitions to which my hon. friend refers came to hand within the last ten days, I think, certainly not more than two weeks ago.
This scheme has only crystallized, if I may use the word, within that period of time. It would be a very unfair thing, I think, to take such drastic action in the midst of a fishing season after a large fleet of vessels had left their ports, outfitted and undertaken their season's operation with the idea quite properly in mind when they started that the conditions which hitherto obtained would continue to obtain during the fishing season. But I may say to my hon. friend that the department is giving very serious consideration to the question of whether we would not be wise to close the port of Prince Rupert to the American fishing fleet under these conditions, so that to the extent to which it can be utilized it may be made available to our Canadian fishermen. I would regret to have to take that step, in view of the fact that there are a number of questions outstanding between ourselves and the United States with regard to fisheries matters. I would rather approach those questions around a common table in the hope of being able to reach a solution which would be reasonably satisfactory; in other words I would rather approach our American friends in an attitude of sweet reasonableness.


Mr. RALSTON:: You would not be red
blooded, like the Minister of Railways?


Edgar Nelson Rhodes: Sometimes the red blooded policy is the policy required; sometimes the other is the policy required, and I will say to my hon. friend that I will have no hesitation in using whatever policy happens to be necessary, as far as I am concerned.
I want to impress upon my hon. friends and members of the committee generally, that I am fully seized of the seriousness of this
[Mr* Rhodes.]
problem. As I have said, I would wish that it might be solved by our sitting around a council table and discussing the matter with our American friends in an endeavour to reach a solution which might be reasonably satisfactory.


Olof Hanson: I understand
negotiations are already under way between the United States government and the Canadian government with regard to this question of duty.


Edgar Nelson Rhodes: I would not wish to say
very much about that at this stage, but I can assure my hon. friend that the department has not lost a single moment in taking every step and using every reasonable effort in an endeavour to lead the way to a solution. The department will continue to keep this matter in mind; it will not be lost sight of and no effort will be spared to see if we cannot reach a solution which will be reasonably satisfactory all around.


Alan Webster Neill: Hon. members will excuse us from British Columbia for taking up the time of the committee in these matters, but the fishing industry is as important to us as wheat growing is important to the prairies, and whether hon. members like it or not they will have to allow us a reasonable time in which to discuss these questions.
I think the hon. member for Skeena and myself might well join in thanking the minister for the attitude he has taken. Knowing him to be a man of his word I believe he will do even moi'e than he has indicated I should like to deal with one or two other matters, but before doing so I should like to express my gratitude to the minister, if I may do so without the suggestion of trying to curry favour with him, for his action in connection with the pilchard industry this spring. To his energy and persistence alone was due the fact that the regulations were so changed that it is now possible to manufacture pilchard oil into shortening in Canada and, thus cairry on a very important industry in British Columbia. Previously the regulations were such that it was impossible to do so; our main market was in the United States, with a very high duty and a very low price, and many of the plants were bankrupt while others were almost prepared to shut down. The minister had the regulations changed so that now we will have access to the Canadian market. The effect of this action may not be apparent this year, because probably it will be necessary for a plant to be built in order to carry out the process of hydrogenation, which is the essential part of the manufacture, but even the knowledge that this

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market is available has enabled several additional plants to be put into operation. I see by the press that there is a very good run of pilchard, and it'is to be hoped this change will make more money available for an industry which I can assure the house very badly needs it.
Some six weeks or two months ago the canned salmon industry in British Columbia was very much agitated by a report, which there seems to be good reason to believe to be true, that the French parliament was preparing to introduce a bill which would have the effect of doubling the general tariff on canned salmon, thus giving the Japanese, who are under a different trade treaty, complete control of that market. At one time we sold a large proportion of a certain variety of our fish in France, and if nothing can be done to modify or change this provision the result will be disastrous. I should like to ask the minister if anything has been done or if it will be possible to do anything in that regard.


Edgar Nelson Rhodes: The last question asked by the hon. member for Comox-AIberni is one of exreme delicacy. Of course he is aware that the disparity in favour of the Japanese has existed ever since the French treaty came into operation.


Alan Webster Neill: Yes, but this makes it worse.


Edgar Nelson Rhodes: Unfortunately that disparity has been such that it has brought about a gradual decrease in our shipments of canned salmon to France and has deflected to Japan what hitherto had been an almost exclusively Canadian business. That situation is still further aggravated by recent tariff changes made by the French government, which will make it practically impossible for us to export our canned salmon to that country. All I can say to my hon. friend is this: The hon. gentleman will realize that it is purely within the right of the French government to effect such tariff changes as may suit their own purposes, but to the extent that it is open to us to discuss the -matter with the government of France I can assure my hon. friend that this will be done. So far as any action of ours will enable us to bring about a betterment of that condition, it will be the desire of the government to endeavour to have this country placed on a parity of trade with our friendly neighbour, Japan.


Mr. CHAPLIN:: How much longer must we put up with this French treaty?


Edgar Nelson Rhodes: My hon. friend will have to address that question to the Prime Minister.


Alan Webster Neill: One more point before I go home; after this I will not bother anyone further. My last point is in connection with facilitating methods of communication to a place called Kyuquot on the west coast of Vancouver island. On this occasion I can hardly resist making my annual protest in connection with the diversion of $160,000- I see the hon. member for Ddgby-Anmapolis is not here-to the friends of the hon. member on the Atlantic while we on the Pacific are equally entitled to it. I am not going to say anything more on that point now, except to suggest that since they have been getting the whole of that sum illegally for a long period of years-it is a fisheries bounty authorized by statute, and I am not going into it in detail-we on the Pacific should be entitled to the major portion of the vote now under consideration, this $190,000 for the conseivation and development of deep sea fisheries and the furthering of the demand for fish. I assure the minister that we will not ask that it be expended in the petty ways in which the money is spent on the Atlantic, where they give eight dollars and six bits to one man and seventy-five cents to some other. That is not going to develop deep sea fisheries.
At the annual meeting of the Pacific coast fisheimen, held at Nanaimo last December, when the Deputy Minister of Fisheries was present, a petition was either presented or referred to from those who fish from the Kyuquot asking for better wire facilities. Kyuquot is a very small place; I do not suppose the total population exceeds 50 people during the winter, but when the fishing season is on the population may run up to 2,000, because many fishermen use that village as a base. I may explain also that Kyuquot is very remote; the nearest telegraph wire is about seventy miles away, and the country between is of such a character that one might almost say it would be impossible to build a telegraph line there. Nothing is impossible if you have sufficient money, but this countiy is so cut up with inlets, fiords and so forth, and the ground itself is so rough that the expenditure would be prohibitive. These people fish during the spring and summer, and in these days of keen competition it is necessary to have access to market information. A telegraph line eighty miles away is of very little use, they must have constant contact with the outside world. A sudden run of fish might come along and they would have them on the ground and not be able to get a carrier in time. These are the conditions which they have to face. A gentleman writes
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Edgar Nelson Rhodes: The first reaction to the
information that this business amounts to $200,000 per year is that it should be sufficiently profitable to enable those engaged in it to provide their own means of communication.


Alan Webster Neill: These are small fishermen
with no money.


Edgar Nelson Rhodes: This subject has been up
before and is being inquired into at the present time. I do not think that this department should embark upon a policy of establishing telegraph and wireless services. We have neither the machinery nor the equipment, and I do not think it is good business to have several departments conducting similar lines of endeavour. The Department of Marine handles all wireless matters, and I understand telegraph lines are being operated by both that department and the Department of Public Works. I assure my hon. friend that I will take this matter up with the Minister of Marine (Mr. Duranleau) and the Minister of Trade and Commerce (Mr. Stevens), and if it can be demonstrated that this is a reasonable measure of assistance which this department can give at not too great an expense, I will be disposed to consider the matter favourably.


James Layton Ralston: Mr. Chairman, speaking
for the other end of the Dominion, I want to say a word or two in support of the hon. member for Comox-Alberni (Mr. Neill). I am glad that the minister appears to be somewhat sympathetic in this regard. Every

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means possible should be used to extend our market for fish in the United States. This matter affects the western fisheries, but I think the minister knows better than most of us that it affects even more the eastern fisheries. I appreciate that the minister cannot give any definite information with regard to the progress of international negotiations, nor do I desire to instruct or advise him in this connection, but it seems to me that if we were able to go to Washington with this Prince Rupert matter and indicate to our friends to the south that we have been doing them a favour in affording certain facilities, there would be a different situation existing as far as the exporting of fish is concerned. I feel sure my hon. friend has now found that the negotiations, which were held up only because of certain negotiations with regard to treaties which were being considered, have sufficiently progressed to enable him to reopen the matter-and I presume he has done so-and to endeavour to secure better terms and more opportunities in connection with the consumption of fish in the United States. I assure him that so far as I am concerned he will have all support in that respect, and I am glad to hear he is at least thinking of this matter of withdrawing the port privilege or thinking of the extent to which it affords facilities to United States fishermen and of the way in which it might be said to improve our relations with the United States. The fishermen of Nova Scotia, as the minister knows, needs that market very badly. While we welcome every effort that can be made to extend the Canadian market, I am not convinced that the Canadian market can absorb the production of fish which it is possible to have if a decent and fair market is provided for the fishermen.
The minister spoke of the fishing industry in the west, and I have no doubt he intended to include the fishing industry in the east also. I do not think in any previous year the fishermen of the east have endured a worse situation or more hardships, if I may use that term in connection with business, than they did this year. Prices have been down; gear has been lost; it has been difficult to make ends meet; there has been no market and altogether the fishing industry is not at this time in a very healthy condition. It would give the fishermen new hope if the minister could indicate that there was some prospect of the opening up of the United States market.
While I am on my feet, I should like to ask what progress has been made with regard to the survey which I understand is being made by the firm of Cockfield Brown and
Company with regard to the development of increased marketing facilities for fish.


Edgar Nelson Rhodes: I wish to thank the hon. member for Shelburne-Yarmouth for the subject matter of his remarks and his manner of approaching it. With every word he has said I am in hearty accord. The fishermen in the eastern part of Canada have had a very serious year and every reasonable effort ought to be made to assist them.
My hon. friend knows how delicate his first question is as to negotiations with the United States. I can speak only in general terms and assure him that I am at one with him in appreciation of the desirability of what he has suggested. I feel sure when the time comes I shall be able to demonstrate to him that we have not lost any opportunity to take every step we can towards that end.
The survey of Cockfield, Brown and Company is now completed; the report is in process of preparation, and last week I was advised by Doctor Goforth that according to an agreement it will be in my hands on the first day of August. That survey, contrary to a more or less general impression, is not by any means confined to the Canadian market. It covers marketing conditions throughout the world wherever there is a possibility for a market. I am led to believe it has been very comprehensive and I trust when the report is available we shall be able to base upon it a policy which will enable us to enlarge not only our Canadian market but our foreign market to a considerable extent.


James Layton Ralston: Does my hon. friend think the report will be available at the end of August or within a month?


Edgar Nelson Rhodes: As soon as it is in hand and has been perused, we shall have it printed and made available for distribution if possible before the end of August, or at all events as early as may be.


James Layton Ralston: I know the report is not confidential except in the sense that it should be given to the government first. From what my hon. friend knows of what has been discussed and the nature of the report, does he think that under the present legislation and powers of the department any recommendations contained in the report can be put into effect?


Edgar Nelson Rhodes: I do not think any further legislation will be required, nor do I think, so far as this year is concerned, any further appropriations will be necessary for the purposes which we have in mind.
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Mr. VENIOT:: Has any request been received from the salmon fishermen for an extension, of time? If so, what action has been taken?


Edgar Nelson Rhodes: I think I could answer the question of the hon. member for Gloucester without making any inquiry at all. I do not know there has ever been a year or a district that there has not been a request for an extension of not only salmon fishing but every other kind. Perhaps my hon. friend will take that as an answer.


Peter John Veniot: I should like to know what action he has taken.


Mr. MARCIL:: I do not think this discussion of the fishing industry would be complete if I did not put in a word in regard to Quebec. In the early spring I received many complaints from those engaged in the salmon fisheries on account of the change in the regulations. Has the minister reason to believe the change made in working out in the interests of the fishermen and the fishing industry in that part of the country?


Edgar Nelson Rhodes: My hon. friend may take it as axiomatic that no regulations and no change in any regulations will ever be satisfactory to everyone. The best that the department can hope to do is to make regulations and effect such changes as will reduce complaints to the minimum. My information from the officers of my department is that the changes recently effected have been in the main reasonably satisfactory. They have been concurred in by the fishery authorities of the province of Quebec and by our officers, and I think on the whole are supported by public opinion, although here and there no doubt there will be the odd complaint.


James Layton Ralston: I suppose under this item I may refer to the policy which the minister enunciated the other day in the house with regard to trawlers. I note he intimates he has come to the conclusion-and I take it he is enunciating a matter of government policy -'that any trawler to be licensed must be built and owned in Canada. Does the minister intend to pass regulations to that effect?


Edgar Nelson Rhodes: Yes. Regulations are now being prepared, and I propose to recommend them to my colleagues. If they concur, the regulations will be put into force. I presume my hon. friend gathers from what I have said previously that it would 'be unjust to discriminate against trawlers already licensed, but it does not follow that we shall continue to license them all. If it be found that four or five trawlers are sufficient, we shall not

license more than that number, but the six that are now in existence will have the preference.


James Layton Ralston: My hon. friend is going to pass regulations?


Edgar Nelson Rhodes: Yes.


James Layton Ralston: Let me steer my hon. friend past any pitfalls that the late government found. Is he not going to get into difficulty if he passes regulations of that kind?


Edgar Nelson Rhodes: I do not say that we arc going to avoid pitfalls, whatever we do, but if my hon. friend has any suggestions to make I shall be glad to receive them.


James Layton Ralston: In order that it may be put beyond peradventure, in view of the fact that a case is pending before the supreme court, my hon. friend should1 have a statute for whatever he is going to do, particularly in the matter of limitation of licences. I am all for limitation of licences. As my hon. friend knows, the policy of the government of which I had the honour to be member was that after April 1, 1932, no licences should be granted except to Canadian-built trawlers. I understand that the difference between that policy and the policy enunciated by my hon. friend is that after this date no licences will be granted to other than Canadian-built trawlers except such as are now in existence and are now licensed.


Edgar Nelson Rhodes: I think my hon. friend,
if he will look at section 69 (A) will agree that it gives ample powers to the minister; in fact, as I said the other day, it gives too much power to the minister. I wish it had not given quite so much. I do not think any power, desirable or undesirable, could possibly be added by legislative authority to the powers contained in that section. This need have no bearing on the case now on appeal before the supreme court. That is only a question whether we are going to take so much money out of the trawler companies or not. If my colleagues agree with me in the regulations to be promulgated, I am going to recommend that that case be withdrawn and not proceeded with, because there is no object in attempting to extract large amounts of money from companies which are already having difficulties in financing. So I say quite frankly that the case was held over on my recommendation, having in mind the course which I felt I ought to take. If that course is taken, that case will be withdrawn.


James Layton Ralston: I do not want my hon.
friend to misunderstand me. I do not recede

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one tittle from the position which the former government took. We believe the policy which we laid down in that order in council was correct. The exchequer court has decided that it was ultra vires, but I am talking of the policy as a policy, and so far as I am concerned it still stands. On the other hand, I would warn my hon. friend, if I may, with deference, that in view of the principle which seems to have been laid down by Mr. Justice Audette, it would seem to me that he ought to look very carefully into the question whether he can ever make a regulation limiting the licences to the trawlers now in existence, for that, I understand, is what he is going to do. Outside of that they are to be Canadian-built trawlers. That is one of the points on which Mr. Justice Audette decided that the order in council was ultra vires. I only throw out that suggestion to my hon. friend. I think he is not going far enough in his limitations, but if he is going that far, I do not want him coming to us next year and saying: Well, we passed regulations, and we found that they were ultra vires. In view of the principle laid down by Mr. Justice Audette it is very questionable whether the policy which my hon. friend laid down in the house the other day can be accomplished without legislation.


Edgar Nelson Rhodes: I do not propose to enter into a discussion of the legai phases. I can assure my hon. friend that the question he has raised I have had in mind, and I certainly do not anticipate any difficulty upon that score. If the regulations are not so onerous as to come within the purview of the judgment of Mr. Justice Audette, and I do not think they will be, I cannot see where we shall have any difficulty.


[Stage Direction]
Item agreed to.
Oyster culture, $10,000.
Mr. REID:: I would like to direct the
attention of the committee and of the minister in particular to a state of affairs that exists in connection with oysters in British Columbia. We have two rivers there, the Serpentine and the Nicomekl, flowing into what is known as Mud bay. These two rivers have been set aside for biological purposes presumably for the cultivation of oysters. In order to acquaint the minister with the situation as it now exists I should like to give him a few facts of the case.
At one time there were no dams in these two rivers, but a few years ago dams were constructed across them and about the same time a lease was given by the provincial government to companies to propagate
oysters out in the bay. It was not until the dams had been constructed, and possibly not until the oyster operations began in the bay that the oysters began to go up these rivers. The dams are each about three and a half miles from the bay. There were however native oysters in the riveTs before these companies started their operations in the bay. The beds of the rivers are now covered with old shells to a depth of some four or five feet, and the fishermen last year had a great-deal of difficulty in fishing in these rivers because their nets would catch on these oyster beds, and when they dragged up their nets they would bring up large masses of oyster shells and also oysters which tore holes in the nets. Many persons were coming to these rivers to take oysters, but the oyster companies frowned on such action. They claimed that the oysters on the rivers belonged to them, due to their having propagated the oysters for many years and having also brought spat from away back east. They then approached the provincial government, which in turn approached the federal government. The result was that these oyster beds were set aside for biological purposes.
May I point out to the minister that in the description as it appears in the return that was brought down, an error occurs, inasmuch as it states that the reserve would exist from the river to Boundary bay. I think that that should be checked up because Boundary bay is far off, and if the reserve really extended to those limits not even the company could take oysters, because Boundary bay is many miles distant from Mud bay, into which these two rivers flow. I have the official file before me, from which I should like to quote. Here is a letter addressed to Mr. Found by J. P. Babcock, assistant to the commissioner of the provincial Fisheries department, Victoria. He says:
It is suggested that you take the bull by the horns and create an oyster reserve.
That certainly is an Irishism, to take the bull by the horns and create an oyster reserve. In another letter from Mr. C. R. Elsey, the marine biologist in charge of the oyster investigation, to Mr. J. P. Babcock, this statement appears:
Shells placed in the rivers by the Crescent Company have become heavily set.
I may say, Mr. Chairman, that no shells were set in the river by the company. The shells were there in the bay already, so that statement is not correct. He says further:
Efforts on the part of the oyster company to obtain leases have failed.
That is probably correct, Mr. Chairman, because there is a controversy as to the
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respective jurisdiction of the Dominion and provincial government over navigable streams, the Dominion government having jurisdiction over navigable rights and the provincial government claiming the bed of the stream. He says further:
Persons have been taking these oysters but the Crescent Oyster Company has refrained in the past from such action, but are at present quite resentful of such unrestricted vandalism and threaten, quite naturally, to go in with their superior equipment.
It would be interesting to know what superior equipment can be used in lifting oysters, because my information is that oysters are lifted "by hand. He says further:
The removal of these fully grown and well established oysters would make the summer's work futile and put back for ten years the establishing of seed beds.
That is very far away from the truth, because those beds have so many oysters in them now that they could not be depleted in years. One firm has offered $100,000 for the privilege of getting the oysters from each of the rivers, so great are the numbers of oysters in them. So that the statement that the removal of these fully grown and well established oysters would make the summer's work futile and put back for ten years the establishing of seed beds, is not correct.
One of the criticisms I have to offer concerns the hardship enforced upon fishermen. Fishing licences are given every year to fishermen allowing operations on certain areas on those rivers. Until last year they had the right to take the oysters and sell them if they wished, or use them for their own purposes. Now that privilege has been denied them. On behalf of those fishermen I ask the minister seriously to consider this point of view:	They are now denied the
right of taking oysters from those rivers. It is hardly correct to say that the beds of those streams have been set aside for experimental purposes. No experiment is necessary, because the oysters are there by the thousands. In fact, when they lifted the gates off the dams this year, oysters were found encrusted about two feet thick upon them. The fact of the matter is that the company to which I have referred are endeavouring to obtain absolute control of the two rivers. They could not obtain control in any other -way than by first coming here and having the reserve put on for biological purposes. This is the first move. - Their intention later on is to obtain possession, but in the meantime outsiders including fishermen who year after year have used these streams for fishing are denied the right even to use

the oysters for themselves. I have not gone into full particulars with the minister, but I should like to have done so because there are many aspects of the matter which should be inquired into. First of all I am asking on behalf of the fishermen that they receive back the right to get the oysters. Secondly, I think the situation should be carefully looked into; in the event of any lease being given to a company to operate the question of navigable rights would come in, because the rivers might have to be dredged. If any company or companies owned the beds of the rivers they would object very strenuously to dredging operations as such operations would take out practically all the oysters from the river. I shall not take up further the time of the committee, but would ask that the minister give these matters his serious consideration.


Edgar Nelson Rhodes: The only manner in which I can be of service to my hon. friend is to send his remarks as they wifi be reported in Hansard to the Commissioner of Fisheries of British Columbia, because the fisheries to which he has referred come within the exclusive jurisdiction of that province. It is true that we must in all cases, and did in this case, pass regulations, but that was done at the request of the government of British Columbia, pursuant to the policy followed by this as well as by previous administrations, namely to put into effect only such regulations as are in conformity with the wishes of the various provincial governments. That arrangement is subject always to a general provision-in the event of the dominion not agreeing with the provinces on a matter of policy relating to conservation, or something of that nature. So it was that this regulation was passed at the request of the government of British Columbia, and the area was set aside to enable experiments to be conducted by the biological board. Those experiments were paid for by the Dominion but were carried out by the biological board for the province of British Columbia and at its request. At the moment I do not believe I can do more than send Hansard containing the remarks of my hon. friend to the Commissioner of Fisheries for the province of British Columbia.


Thomas Reid: What experiments were carried on last year?-because I can assure you no experiments are necessary. Oysters are there on each river for a distance of three and a half miles-beds of them.


Edgar Nelson Rhodes: I think my hon. friend will find that a report covering these experiments

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has been circulated by the biological board. In any event I believe there is a report in the department which will be made available to him.


James Layton Ralston: I have in mind a matter which may not be of very great importance, but for the consideration of which I would ask special permission at this time. It concerns an appointment, and is as important to those interested as would be a matter of international significance to the industry at large. I am protesting on behalf of my own constituency. Mr. Marshall was appointed inspector in Digby. He had been dismissed for active political partisanship about a year before. However, in the eyes of the government at least he had purged his sin and was again considered eligible. Mr Lewis had been appointed temporarily and was located at Yarmouth. An advertisement was issued by the Civil Service Commission, confined to the counties of Halifax, Guysborough, and Digby. There was a joint advertisement for Kings and Queens but Yarmouth was not included. The point I make is that Yarmouth is included in that particular fishing district. The inspector who was to be appointed was to have jurisdiction in Yarmouth, Digby, Lunenburg and Queens, but when the advertisement was issued Yarmouth was excluded; in other words no residents of Yarmouth need apply. Why was that?


Edgar Nelson Rhodes: I cannot agree entirely with my hon. friend. I remember the matter to which he refers. Digby is a more central region for this officer than is the town of Yarmouth. Yarmouth is at one end of the area, because that inspector covers the counties of Yarmouth, Shelburne, Queens Digby Lunenburg and Annapolis. His location at Yarmouth would put him about as far away as possible from the centre of the area.


James Layton Ralston: It would put him just in the centre.


Edgar Nelson Rhodes: No, I do not agree with my hon. friend. Digby is a much more central point. He has to go away up to cover Annapolis, Queens and Lunenburg. Certainly when in Digby he is much nearer the centre thaD if he were in Yarmouth. My hon. friend will recall that we insisted the offices should remain at Digby where they had been originally.


James Layton Ralston: My hon. friend has missed the point. I am not talking about the location of the offices. I say my hon. friend is wrong; anybody who would take the trouble to look at the map would know that he is wrong.
With his knowledge of the geography of the province of Nova Scotia he does not need to look at the map. Yarmouth is in the centre of that district. Fishery inspectors have to go around the shores. For the first time, Yarmouth was going to have the office, but my hon. friend moved it back to Digby.


Mr. SHORT:: It never was moved to Yarmouth.


James Layton Ralston: Let us leave it at that; but when my hon. friend moves it to Digby why does he exclude all the residents of Yarmouth from eligibility for the position?


Olof Hanson: We are not discussing the matter to which the hon. member for Shelburne-Yar-mout'h (Mr. Ralston) has directed attention.


James Layton Ralston: I asked special permission to have the matter considered.


Edgar Nelson Rhodes: I have no objection to discussing it. I do not agree with my hon. friend at all when he says the jurisdiction of the fishery officers is around the shores; it is over the rivers and streams and lakes as well. So he covers the Whole area. My hon. friend was wrong there.


James Layton Ralston: One-tenth of the rivers,
streams and shore.


Edgar Nelson Rhodes: Yarmouth was not excluded. This question would never have arisen, because Mr. Lewis was not dismissed. He was asked to carry on his office from Digby, where quarters were available in the public building, and where the work had been carried on for years and years. If Mr. Lewis had not resigned he would have been in office yet, and it was only when we insisted on his living in Digby that he resigned. Having resigned, his place was filled by the Civil Service Commission.


James Layton Ralston: I understand that, but
it has nothing to do with my question. I am asking why when the position was going to be filled in Digby residents of Yarmouth were not allowed to apply.


Edgar Nelson Rhodes: My hon. friend had better address his question to the Civil Service Commission.


James Layton Ralston: My hon. friend knows
perfectly well that the advertisements were prepared by the department.


Edgar Nelson Rhodes: Quite so, but the position
was filled by the Civil Service Commission.
Supply-Fisheries


James Layton Ralston: A gentleman, a returned
soldier, living in Yarmouth was declared ineligible for the position because he lived outside the district advertised.


Edgar Nelson Rhodes: My deputy tells me that
it cannot be the same position; but even so. he has to live in Digby, that is all.


James Layton Ralston: I am saying that according to this return this gentleman is regarded as ineligible for this position because he lived outside the district advertised. There was no advertisement that included Yarmouth. Halifax and Digby were included.


Edgar Nelson Rhodes: Will my hon. friend let
me have the advertisement?


James Layton Ralston: Yes.


Edgar Nelson Rhodes: My hon. friend is confusing two things. This advertisement is for an inspector of fisheries; that would be a Digby county appointment. Mr. Marshall's position was that of supervisor of fisheries-a different office altogether.


James Layton Ralston: Was not Clement Crowell an applicant for this position?


Edgar Nelson Rhodes: He may have been, but
this advertisement has nothing to do with the appointment to the position at Digby.


James Layton Ralston: Is the other position
filled by a returned soldier?


Edgar Nelson Rhodes: My deputy advises me
that we have two vacancies for an inspector of fisheries in Digby county; that is why they were asked to be residents of Digby. The position that my hon. friend speaks of is that of supervisor. Of course, there is no question of exclusion there, and it was quite competent for the man at Yarmouth to apply. I do not know anything as to the details.


James Layton Ralston: I simply want to say to
my hon. friend that that is the information given me by the secretary who abstracted the return.


Edgar Nelson Rhodes: Quite so. But possibly the individual referred to in this application might also have applied for the position of supervisor.


James Layton Ralston: Yes. Is it true or not
that for the position of supervisor residents of the county of Yarmouth were excluded?


Edgar Nelson Rhodes: No.


James Layton Ralston: Does my hon. friend know that?


Edgar Nelson Rhodes: I am so advised by my deputy.


James Layton Ralston: Does my hon. friend know that Mr. Merkel was an applicant for the position of supervisor?


Edgar Nelson Rhodes: I would have to make inquiries to find out.


James Layton Ralston: If my hon. friend would inquire I should be obliged. I do not want to do any injustice to my hon. friend or to the department.


Edgar Nelson Rhodes: I shall be glad to make inquiries.


James Layton Ralston: A man named J. W. Merkel lived in Digby and served in France for four years. According to the report I have he was third on the list of eligibles. Even so, under the Civil Service Act he would be entitled primarily to the appointment, because no matter how far down the list a returned soldier happens to be he takes precedence over a civilian. Perhaps my hon. friend will at the same time look up the application of Clement W. Crowell. He was a disability case. He had a super-preference according to the return and applied for the position.


Edgar Nelson Rhodes: Yes, I will make inquiries.


[Stage Direction]
Item agreed to.
To provide, subject to the approval of the governor in council, for a grant to the United Maritime Fishermen, $5,000.
James Layton Ralston: Will my hon. friend be good enough to call the attention of his colleague, the Minister of National Revenue (Mr. Ryckman) to a communication to the secretary of the United Maritime Fishermen? There was some difficulty in Yarmouth to which I have referred before in this house-I do not propose to go into it fully again on this occasion-with regard to holding up a shipment of rope on which cents dumping duty had been imposed temporarily. An investigation was held which took a considerable time. The net result was that the rope was finally released in time for the fishing season, but very late, and after the fishermen had been put to a great deal of trouble due to the uncertainty as to whether they would get the rope or not. Then the secretary of the United Maritime Fishermen-which is the association getting this vote-wrote to the minister of Customs with regard to the holding up of the shipment at Yarmouth and to be advised fully as to the conditions under which it was released. The reply sent from the Department of National Revenue-I am bringing it to the attention of the minister,

Supply-Fisheries
and I am sure he will see that such a thing does not occur again-is signed by Mr. Watson. He says:
Messrs. Stone and Forsyth, Boston, Mass., have been advised as to the conditions under which the importation at Yarmouth-referred to by you-was released and are in a position to communicate same to you if they so desire.
It does not make any difference who the secretary of the United Maritime Fishermen happens to be, he represents a responsible body recognized by this government in the vote now under consideration, and I submit that the information he asked for was information to which he was entitled, and that he should not have been referred to somebody in Boston when the required information was so easily available in the department.


Edgar Nelson Rhodes: I went very carefully into that case. My hon. friend, I think, is wrong in saying that this extra duty was charged. As a matter of fact, Mr. Breadner, acting for the department, wired to the collector in Yarmouth not to collect, but to assure himself that the shipment had come direct from Holland. That was where the whole question arose. It was thought at first that the rope had been transhipped at Boston, but when it was found that it had come direct from Holland it was passed through without extra duty. The inquiry had taken place before Doctor Hamer ever sent any telegram. I have in my hand a copy of the letter on the subject written by Stone & Forsyth and addressed to the Prime Minister.


James Layton Ralston: I have it here.


Edgar Nelson Rhodes: May I say it is almost a disease with Doctor Hamer, the secretary of the United Maritime Fishermen, to rush into print on the first available opportunity, usually with a telegram, which he in all cases sends collect. In the present instance he could not resist dashing into print and getting his name-and usually his photograph-into the papers at the same time. Messrs. Stone & Forsyth say:
We feel that Dr. Hamer should have waited the result of the investigation and the decision to be made by Mr. Breadner's office before giving the matter such publicity.
In other words, the very people for whom he professed to speak in part, took exception to his having dashed into the newspapers before he knew what he was talking about. As a matter of fact this whole thing was adjusted by officials of the department, and Doctor Hamer had nothing whatever to do with it one way or the other. But he had to stick his telegram in the paper, get his photograph published once more and try to take a little credit in the matter.


James Layton Ralston: I do not know and
never even saw Doctor Hamer, but I want to say to my hon. friend that he is not quite doing justice to the association.


Edgar Nelson Rhodes: Neither is Doctor Hamer.


James Layton Ralston: My hon. friend said
Doctor Hamer had nothing to do with it. Here is a telegram from Mr. Breadner dated January 30 in which Mr. Breadner does not say "Hold it up" or "Do something temporarily," although he does say something about an investigation pending. The telegram reads:
Value for entry with collection of dumping duty twenty-three and one-half cents per pound less two and one-half cents per pound discount to dealers pending completion of investigation.
On February 1, only two days later, Doctor Hamer does wire, and I suppose there are wires from him right along. Then my hon. friend read a letter from Stone & Forsyth, for whom he said Doctor Hamer was acting. Stone & Forsyth are the dealers; they are not the fishermen. I am talking about the fishermen, and I only rose to make one point, that the secretary of the fishermen's association of the maritime provinces is entitled to some different answer than to be told that he can go to Boston and find out what was done there. That was the only point I desired to make, and I repeat it.


[Stage Direction]
Item agreed to.
To provide for an investigation by an international committee into the probable effect upon the fisheries of the lower bay of Fundy region of damming Passamaquoddy and Cobseook hays, in New Brunswick and Maine, U.S.A., $22,500.
Peter John Veniot: There are a few minutes
left before six o'clock, and I think we can get through this item, since I have just one question. Can the minister tell me what progress has been made with this investigation? I understand that the Canadian representatives to the commission already have been named in the persons of the Deputy Minister of Fisheries and Doctor Huntsman. If that is true I wish to express my satisfaction with those commissioners, but I should like to know how far the matter has progressed, because the delay is causing a great deal of uneasiness in the fishing industry of Passamaquoddy bay.


Edgar Nelson Rhodes: It is true that the Canadian representatives are the Deputy Minister of Fisheries and Doctor Huntsman, and I may say that the Deputy Minister of Fisheries has been appointed chairman of the joint board. There has been no delay so far as their efforts or the efforts of the department

Supply-Agriculture
have been concerned. As a matter of fact it has been difficult to get the best class of men to conduct the technical phases of the investigation, but there is on the way now one of the foremost experts of the British isles in matters touching the herring industry who, through the good offices of the British government, has been made available to this commission for a period of two years.


[Stage Direction]
Item agreed to.
At six o'clock the Speaker resumed the chair and the house took recess.
After Recess
The house resumed at eight o'clock.


[Stage Direction]
The house resumed from Tuesday, July 21, the debate on the motion of Mr. Lawson for the consideration of Bill No. 118, to incorporate Service Loan and Finance Corporation.
Mr. J. E. LAWSON (West York):: Mr. Speaker, by leave of the house, I ask permission to withdraw my motion?


Pierre Édouard Blondin: By unanimous consent,
Mtr. Lawson moves that order No. 46 be discharged and that Bill-No. 118 be withdrawn.
Motion agreed to and bill withdrawn.



DAIRY INDUSTRY ACT


[Stage Direction]
Mr. SAMUEL GOBEIL (Compton) moved the third reading of Bill No. 16, to amend the Dairy Industry Act.
Motion agreed to, and bill read the third time and passed.
Pierre Édouard Blondin: The orders under private and public bills having been exhausted the house will revert to committee of supply.



DEPARTMENT OF AGRICULTURE

[Stage Direction]
The house in committee of supply, Mr. Fraser (Cariboo) in the chair.
Dairying, including grant of $5,000 to National Dairy Council, $295,000.
Mr. POULIOT:: Mr. Chairman, would the minister advise the house why the price of milk for home consumption remains the same when the price of butter has dropped so considerably? The price of butter has dropped from 40 cents per pound last year to 20 cents

per pound this year, while the price of mils has remained at the same level for the past five years.


Hon. ROBERT WEIR (Minister of Agriculture) :: The only reason that can be given is that we are on an export basis with regard to butter and not with regard to whole milk


Mr. DONNELLY:: I understand an amendment was moved to this item when it was before the committee previously.


The CHAIRMAN (Mr. Fraser, Cariboo):: Yes. It was moved by Mr. Young, seconded by Mr. Bouchard:
That the item be reduced by $5,000, being the amount of a grant to the National Dairy council.
Amendment negatived on division.


James J. Donnelly: 
Jean-François Pouliot: I entirely agree with what the hon. member for Willow Bunch (Mr. Donnelly) has said. Let me draw the attention of the committee to one recommendation in particular. But first let me take this opportunity of fulfilling a very pleasant duty in congratulating the hon. member who is acting as chairman of the committee (Mr. Fraser, Cariboo) upon attaining such a high position to-night. The recommendation I wish to
mention is that which the National Dairy Council makes with regard to a high tariff on butter. Last year the tariff on butter was six cents a pound, and during the September special session the government increased it to eight cents. I asked the question: When was the highest tariff imposed on butter? It was before the new Australian treaty was brought before the house; in other words, in April we had the highest tariff on butter since the discovery of Canada, and yet the price was the lowest since May, 1904. Therefore a high tariff was of no use in protecting the farmers because the tariff was the highest and yet the price was the lowest. Although the Prime Minister made some jokes about the numerous returns for which I asked, thanks to that return the government has changed its policy and is no more acting in accordance with the recommendations of the dairy council, but in the light of that return it has reduced the tariff to five cents a pound. The tariff on butter is now one cent a pound less than it was when the former government was in office. Perhaps this tariff will cure the evil in time, but I do not know how the^ platform and stump speakers we heard during the last campaign preaching high tariff in my constituency as in others throughout Quebec, will explain the good results of that high tariff policy. I cannot conceive that it was ever good for the farmer, and we have the evidence now. It shows that with time the government can improve a lot.


Miss MACPHAIL:: I am opposed to this item of $5,000 for the National Dairy Council on the ground that last year the activity of the National Dairy Council was simply pro-panganda for higher tariffs. All the creameries in Ontario and the National Dairy Council, of which they may or may not be members-
I am not clear on that point-spent all their energies in trying to convince the farmers .that protection on butter was going to give them a greater return. If the National Dairy Council would	set	itself	to	answering	thequestion asked	by	the	hon.	member	forTemiscouata (Mr. Pouliot) we might well grant them $5,000. The Minister of Agriculture did not answer that question; at least, he did not answer it wholly. While it is true that milk is sold at	home	and	butter is	soldabroad, I think,	it is also	true	that the	lack
of organization among the producers of milk and the organization of the distributors of milk have very much to do with the great spread between the price the producer receives and the price the consumer pays. I do feel that the consumers to-day are being almost, if not quite, as badly treated as the producers
Beauharnois Power-Report

of milk, because they are paying much more than they should pay under the circumstances, and the producers are getting much less than they should get. I am entirely opposed to this vote. As a matter of fact, I would say that outside of the Conservative party itself there was no more effective body of propagandists for protection in the last election than the National Dairy Council of Canada.


Mr. PERRAS:: I see by Le Droit, in an
advertisement in its issue of July 24, that five-pound lots of butter are being sold at
15	cents per pound. I am entirely opposed to this grant of $5,000 to the National Dairy Council, and I would ask the minister to explain how it is that butter is being sold in five-pound lots in the city of Hull at 15 cents per pound.


Jean-François Pouliot: It must be peanut butter.


Fizalam-William Perras: No, it is good butter.


Mr. BERTRAND:: The hon. member for
Willow Bunch a few moments ago stated that the dairies in Ottawa were paying the farmers
16	and 17 cents per gallon of milk, but the dairies hare recently adopted a new rule that milk shipped to Ottawa and testing less than 3.25 would be paid for at the rate of 64 cents per 100 pounds, which is 6.02 cents per gallon. I do not want to refer to the question of paying a bounty to the wheat farmers of the west, but I do say that it is utterly impossible for the farmers to produce a gallon of milk for 6.02 cents. That milk is sold at very much higher prices to the consumer. I noted in the committee of agriculture this morning the very good disposition of the minister to inquire into the spread between the price to the producer and the price to the consumer. I would ask him to make a full inquiry into the milk business; to start by going into the capitalization of these dairy companies, and secondly to ascertain what they do with the milk that they buy from the farmers, and what revenue they derive from it. The middleman is getting far more profit than the farmer. There is ground there, and very serious ground, for a thorough investigation, in order that the producers may be assured that they are going to get some value for the products they deliver to the dairies.


[Stage Direction]
Item agreed to.
Progress reported.


Hon. W. A. GORDON (South Temiska-ming):: Mr. Speaker, with the consent of the house I desire to revert to motions.


Pierre Édouard Blondin: By consent the house will revert to motions.
The house having reverted to the order for motions:


Wesley Ashton Gordon: I desire to table the fourth report of the special committee appointed to investigate the Beauharnois project, and to give notice that on Thursday next I shall move that the report be concurred in. I give notice in order that in the meantime hon. members may acquaint themselves with its contents.


William Lyon Mackenzie King: May I ask my right hon. friend if the report will appear in the Votes and Proceedings of to-day?


Richard Bedford Bennett: I assume that the assistant clerk will read the report as soon as it is noted, and it will appear in the Votes and Proceedings.
The Clerk Assistant then read the report, as follows:
Mr. Gordon, from the select committee appointed to investigate the Beauharnois project then presented the following as its fourth report:
1.	On the 10th day of June, 1931, the House of Commons adopted the following resolution: that Messrs. Dorion, Fiset (Sir Eugene), Gardiner, Gordon, Jacobs, Jones, Lennox, Mackenzie (Vancouver Centre), Stewart (Lethbridge), be a committee to investigate from its inception the Beauharnois project for the development of hydro-electric energy by the use of the waters of the St. Lawrence river so far as the matters referred to are within the jurisdiction of the parliament of Canada, and without restricting the generality of the foregoing words in particular to investigate the matters referred to in the speech made in the House of Commons by Mr. Robert Gardiner, the honourable member for Acadia, on the 10th day of May last, as reported on pages 18751887 of Hansard, and to report from time to time their observations and opinion thereon; with power to send for papers, persons and records. Hon, W. A. Gordon was on the 15th of June, 1931, appointed chairman of the special select committee.
2.	(1) The committee sat from the 15th day of June, 1931, to the 22nd day of July, 1931, held on most of these days more than one session and examined 35 witnesses.
(2)	On the 1st of July, the members of the committee visited and inspected the site of the works.	,
There were filed with .the committee 129 exhibits.
3.	Sonianges Section

St. Lawrence River
(1)	The Soulanges section of the St. Lawrence river is that portion thereof lying between Lake St. Francis and Lake St. Louis which are some 141 miles apart, and between which there is a fall of 83 feet. The average normal available flow of the river through this section is in the vicinity of 230,000 cubic feet ppr second for 50 per cent of the time making possible a development of 2,000,000 horse power of commercial electric energy at 85 per cent

Beauharnois Power-Report
load factor. The site is in close proximity to the city and port of Montreal, and is conveniently located on what must soon be a waterway capable of accommodating ocean-going vessels. It has therefore great possibility for industrial development if cheap power is available.
(2)	It is apparent that the Soulanges section thus presents an opportunity for hydro-electric development almost if not quite unique on the face of the globe. It is one of the greatest national resources in Canada, and in its natural state of great potential vaiue.
4.	History
(1)	About the year 1800, Edward Ellice, the Seigneur of Beauharnois, erected a small "moulin Banal" at the mouth of the St. Louis river and in order to increase the flow of the river, in 1807 built a small feeder, four miles in length, from Lake St. Francis to the head waters of the river. This constituted the first diversion in the Soulanges section of the St. Lawrence river for power purposes. Whatever water rights were incidental to this feeder later passed into the hands of a family named Robert and apparently formed the basis of the applications for power rights hereinafter mentioned. Details concerning the Robert "rights" may be found in a judgment delivered in the Exchequer Court of Canada in the case of Robert vs. the King (9 Exchequer Court Reports). Reference may be had also to Exhibit No. 29. a memorandum prepared by Mr. R. C. Alexander.
(2)	in 1855 the government of the province of Canada built a dyke, known as the Hungry Bay Dylce, as a protection against floods. It rebuilt the control gates of the feeder and in 1883 the government of Canada deepened and widened the feeder and installed new gates in the dyke at the feeder entrance, considerable sums of money having been appropriated for this purpose.
(3)	In 1902, J. B. Robert, as the grantee of the representatives of Edward Ellice, brought action against the crown for a declaration of his rights and judgment was pronounced on the 17th October. 1904. deciding that Robert held substantial rights in the feeder. A compromise was arrived at by which tne feeder was leased to the heirs of ,T. B. Robert by the Department of Public Works under date of the 28tli December. 1909, for a period of 21 years. This was authorized by order in council, P.C. 2168, of the 9th December. 1909.
14) Tn 1902 by Quebec Statute 2 Edward VII. Chapter 72 of the 2fitli March, 1902, the Beauharnois Light, Heat and Power Company was incorporated with power to enlarge and extend the feeder. As a consequence of the finding of the Exchequer Court that J. B. Robert was not the owner of the feeder, in 1910 another Provincial Act was passed giving the Company the right to build a new canal or feeder from any point on the original feeder to any point on the St. Louis River at or near the town of Beauharnois. This Company thus became possessed of certain rights in respect of the diversion of rvater for power purposes from lake St. Francis. The shares of the Beauharnois Light, Heat and Power Company were all owned by W. H. Robert and other members of the Robert family. On the 3rd February, 1927, Mr. R. O. Sweezey obtained
from the Roberts an option of all the issued capital stock of the Company and the Company's rights.
The Robert interests
(5)	W. H. Robert and the other Robert heirs received for the 2,000 shares of the Beauharnois Light, Heat and Power Company and such other rights, if any, as were then outstanding in them
(1)	Cash $1,520,000.
(2)	200 fully paid part interests in the Beauharnois Power Syndicate.
(3)	21,000 class A shares of the Beauharnois Power Corporation.
(4)	100 fully paid part interests in the Beauharnois Syndicate transferred from R. O. Sweezey account, which became 200 part interests in the Beauharnois Power Syndicate.
(6)	In addition to the above-mentioned 400 part interests in the Power Syndicate owned by the Roberts, W. H. Robert held a further 300 units in his own name on which he owed $10,000 as at December 17th, 1929. For the 700 part interests, referred to above, the Robert heirs received, on the dissolution of the Syndicate, cheques aggregating $95,000, together with 28.000 shares of the class A common stock of the Beauharnois Power Corporation Limited.
(7)	In the same year, Mr. Sweezey applied to the Quebec Legislature for an amendment to the Act incorporating the Company permitting the construction of a canal between lake St. Francis and lake St. Louis. This application was refused.
(8)	On the 17th March, 1927, the Beauharnois Light. Heat and Power Company applied to His Excellency the Governor General in Council for approval of a proposal to build a power canal "which can be readily adapted for thirty foot navigation requirements also" from a point on lake St. Francis near the mouth of the St. Louis feeder to lake St. Louis and to use so much of the water of the St. Lawrence river as can be taken through the proposed canal without interfering with navigation and without interfering with existing prior rights in the river St. Lawrence." This application was not pressed.
(9)	On the 17th January, 1928, the Beauharnois Light. Heat and Power Company applied to His Excellency the Governor General in Council "for approval under the Navigable Waters Protection Act of its plans and site of proposed works herein described and for the right to divert forty thousand cubic feet per second (40,900 c.f.s.) from lake St. Francis."
(10)	In March, 1928, by Statute of the province of Quebec (18 George V, Chapter 113), a new section, 11A, was added to the original Act of incorporation giving the Company the right to build a new canal from any point within two miles in a southwesterly direction from the mouth of the St. Louis feeder to any point on lake St. Louis within one and a half miles in a westerly direction along the shore of lake St. Louis from the mouth of the St. Louis river and giving the Company the right to expropriate lands not exceeding six arpents in width.
(11)	On the 27th April, 1928, Mr. Sweezey and his associates obtained the passing of an order in council by the executive council of Quebec authorizing the granting to the Beauharnois Light. Heat and Power Company of an emphyteutic lease, which lease was subse-



Beanharnois Power-Report
quently executed on the 23rd June, 1928, and which grants to the Beauhornois Light, Heat and Power Company the rights of the province of Quebec to such part of the hydraulic power of the St. Lawrence River as can be developed between Lake St. Francis and Lake St. Louis through a derivation (six diversion) canal on the right (southern) shore of a maximum flowing capacity of forty thousand cubic feet per second (40,000 c.f.s.), (the province reserving the ownership and the free disposition of the surplus) for a period of 75 years from the 23rd June, 1928, at an annual rental of $20,000 for the first five years and $50,000 for each of the subsequent years and an additional payment of $1 for each horse power year revisable after each period of ten years from the date the plant will have been put in operation. The company agrees that at the expiration of the first five years it will have installed 100,000 h.p.; at the expiration of the sixth year, 200,000 h.p.; at the expiration of the seventh year,
300,000	h.p.; and at the expiration of the tenth year, 500,000 h.p. The lease is granted without prejudice' to Federal and Provincial laws concerning navigation, mines, fisheries and the driving of logs and also upon the understanding that the lessee "who is presently negotiating with the Federal government shall obtain from the latter in so far as its rights are concerned, tiie authorization to divert a flow of forty thousand cubic feet per second (40,000 c.f.s.)" and in the event of the approval of the Federal government not being obtained within twelve months, the lease may be cancelled by the lieutenant governor in council.
(12)	Having obtained the amendment to its charter and the lease from the province of Quebec, the company pressed its application to the governor general in council and on the 15th January, 1929, a hearing was held by the then Minister of Public Works and two other members of the Dominion government, at which were considered protests from shipping companies and power interests.
(13)	The application originally contemplated the diversion of the whole flow of the St. Lawrence River. To meet the opposition to the application at this hearing, Mr. Aime Geoffrion, K.C., who appeared for the applicant, amended the application to read as follows:
"The application of the Beauharnois Light, Heat and Power Company now pending before the governor in council is purely and simply for the approval of plans for hydraulic development which will be subject to a condition that not more than 40,000 cubic feet per second shall be diverted from the river-from lake St. Francis, to be returned to lake St. Louis, and used for power purposes by the company between these two points; and any condition that the government may exact, in any wording satisfactory to the government involving that limitation, is accepted in advance by the applicant. If the enginers think that the plans should be altered to meet this declaration the company will submit to any such alteration."
(14)	It should be noted that notwithstanding the limitation to the 40.000 c.f.s. the plans of the company and the works so far as constructed clearly show and the officers of the company and of the Department of Public Works admit that at all times there has been in contemplation the diversion of the whole flow of the river by this company.
(15)	A committee of departmental engineers was constituted, composed of Mr. K. M. Cameron, chief engineer of the Department of Public Works, Mr. D. W. McLachlan, engineer in charge of the St. Lawrence Waterway Project, Mr. J. T. Johnstone, director Dominion Water Power and Reclamation Service and Mr. Louis E. Cote, chief engineer, of the Department of Marine, and on the 30th January, 1929, made a report which is part of Exhibit No. 17, in the file of the Public Works Department 804-1-D.
(16)	Certain paragraphs of this report are as follows:	_
83. The 40,00-0 c.f.s. diversion project can be authorized without injury to existing navigation, if the plans submitted are subject to modification and to regulations embodying the restrictions referred to in this report.
89. Having regard to the application under the Navigable Waters Protection Act, now under consideration, your committee are of the opinion that the site and works proposed in the plans and application filed by the said company will not impede or interfere with navigation on the St. Lawrence River if the conditions attached hereto are met by the company and, having consideration to the interests of the country as a whole, we are of the opinion that if the works are constructed in accordance with such application and plans subject to the said conditions the same can be efficiently utilized in connection with and as part of any feasible and economical scheme which the Government of Canada may eventually decide upon for the deep waterway development of the St. Lawrence River.
14.	The works proposed by the Beauharnois Company consist of the following:
1.	A canal extending from Hungry bay, at the foot of lake St. Francis to Melocheville, at the head of lake St. Louis, said canal being contained between banks which are 1,100 feet apart where hard materials are encountered, and 4,100 feet apart, where soft materials are encountered.
2.	A power house at Melocheville equipped with ten 50,000 h.p. units.
3.	Regulating works at Thorn island and at Leonard island. These are designed to hold up the level of lake St. Francis, when a diversion of 40,000 c.f.s. from that lake is made.
4.	A series of works in the four rapid stretches of the river between Thorn island and the head of lake St. Louis. These are designed to maintain existing depths in channels, and also to maintain existing levels at the head and foot of the Cedar rapids works.
15.	The works proposed by the Beauharnois Company affect in varying degrees canal navigation, river navigation, power developments, and future plans for a deep waterway.
(17)	The committee expressed disapproval of the remedial works and channel improvements and in paragraph 28 stated that the committee while offering the suggestions aforementioned can only recommend approval of these works subject to modifications to meet conditions as experience shows them to be necessary. In paragraph 31, the committee says, "the design of remedial works for use in the rapids below Grande island is not yet worked out in a satisfactory manner." It will thus be seen that the approval of this committee was qualified and that certain of the plans were not in their view sufficient.
(18)	On the 8th March, 1929, order in council P.C. 422 was approved by His Excellency the

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Governor General on the report from the Minister of Public Works. This order in council recites the application of the 17th January, 1928, the deposit of plans, the grant of the emphyteutic lease and the report of the aforementioned engineers.
(19)	It sets out twenty-eight conditions, subject to which the recommendation for approval is made.
(20)	The committee, on the recommendation of the Minister of Public Works, submitted for His Excellency's approval, under section 7, chapter 140, revised statutes of Canada, 1927 -the Navigable Waters Protection Act-(subject to the foregoing conditious and to such additions, improvements, alterations, changes, substitutions, modifications or removals as may be ordered or required thereunder), the annexed plans of works and the site thereof according to the descriptions and plans attached in booklet form, which works were proposed to be constructed by the Beauharnois Light, Heat and Power Company with respect to the diversion of 40,000 c.f.s. from lake St. Francis to lake St. Louis in connection with a power canal to be built by the said company along the St. Lawrence river between the two lakes mentioned.
(21)	By reference to the large plan submitted with the application, and referred to in the order in council P.C. 422, and which is Exhibit No. 2A, at will be observed that there are two cross sections shown, one at Mileage 144-3 which shows a width between the embankments of about 1,100 feet, this being typical of the rock section of the work. This cross section also shows a width at the bottom of the deep section of the canal of something over 1,000 feet. In the cross section which is given as typical for each section, at mileage 152.0 the width between the embankments is shown as about 4,100 feet, and the bottom of the deep section, approximately 27 feet, is shown as having a width of about 500 feet.
(22)	Subsequently on the 29th July, 1929, modified plans were submitted to the Department of Public Works by the company, and for these there were on the 22nd August, 1930, certain other plans substituted. None of these has as yet received the approval of the Minister of Public Works, although the chief engineer of the department has recommended them for approval. Plans submitted on the 22nd August, 1930, did include plans for the remedial works, but such plans were subsequently withdrawn and as the matter now stands there is now before the department for approval any plan or plans of these remedial works.
(23)	On the 10th February, 1931, the Beauharnois' Light, Heat and Power Company applied to the Quebec authorities for a lease of a further 30,000 cubic feet per second, and has now obtained this right.
(24)	On the 25th June, 1929, an agreement was entered into between the Beauharnois Light, Heat and Power Company and His Majesty represented therein by the Minister of Public Works of Canada, Exhibit No. 43, which agreement incorporates the terms and conditions of P.C. 422.
(25)	On the 6th November, 1929, the Governor General in Council passed three orders
in council, numbers P.C. 2201, 2202 and 2203, authorizing the transfer of three water power leases from the Montreal Cotton Company to the Beauharnois Light, Heat and Powei Company, and on the 3rd December, 1929, three agreements were entered into between the Montreal Cotton Company, the Beauharnois Light, Heat and Power Company, and His Majesty represented therein by the Minister of Railways and Canals of Canada (Exhibits 7A, 8A and 9A) by virtue of which the Beauharnois Light, Heat and Power Company acquired with the consent of His Majesty the right to use and divert into the canal to be built 13,072 cubic second feet presently used by the Cotton Company at or near Valleyfield under an effective head of about 10 feet.
(26)	A difficulty may arise in connection with these three leases by reason of the fact that the Department of Public Works takes the position that under the order in council P.C. 422 there is only authority to grant an opening in the Hungry Bay dyke sufficient to take 40,000 cubic feet a second (see evidence, page 363).
(27)	On the 5th December, 1929, the Lieutenant Governor in Council of Quebec passed an order in council authorizing the diversion of this 13,072 feet.
(28)	On the 20th March, 1930, the charter of the Beauharnois Light, Heat and Power Company was further amended by enactment 20 George V, chapter 136 (Quebec) which extended the expropriation powers of the company so that for the purpose of building its new canal it might "expropriate such lands as may be necessary, not exceeding in all 21 arpents in width."
(29)	In the final result, the Beauharnois Light, Heat and Power Company appear to have obtained from the Dominion of Canada orders in council purporting to authorize the diversion of 53.072 cubic second feet, subject to their obtaining permission to breach the Hungry Bay dyke sufficiently for that purpose, and subject also to compliance with the conditions of orders in council and the approvals of plans.
(30)	They have also obtained from the province of Quebec a 75 year lease for 40.000 cubic second feet, authority from the lieutenant governor in council of Quebec to acquire the use of 13,072 e.s.f. and in 1931 the right to use an additional 30,000 e.s.f.
5.	Corporate Organization
(1)	There were two syndicates prior to the incorporation of the Beauharnois Pow-er Company Limited, the present holding company, the first being the Beauharnois Syndicate and the second the Beauharnois Power Syndicate. These will be referred to, sometimes, for convenience as the First Syndicate and the Second Syndicate, respectively.
The First Syndicate
(2)	About tire 12th May, 1927, Mr. Sweezey organized the syndicate known as the Beauharnois syndicate, having 5,000 units or part interests. This syndicate existed until the 4th April, 1928, at which date the holdings were as follows:



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Member	Number of part interests	Issue price	Amount
		$ cts.	$
25	100 00	2,500800	37 50	30.00050	100 00	5,000200	100 00	20,000150	100 00	15,00025	100 00	2.500350	45 71	16.000800	37 50	30,000100	100 00	10,00050	100 00	5.0001,050	42 86	45,000100	100 00	10,00010	100 00	1,000100	100 00	10,00025	100 00	2,500250	100 00	25,000900	30,00015	100 00	1,500
5,000		261,000
			
(3)	The units subscribed for in the name of the Credit Generale du Canada -were subscribed and held for senator Donat Raymond.
(3A) 1,000 of the units in the name of Newman, Sweezey & Company, Limited, were held for Frank P. Jones and 50 for Fred M. Connell. The Honourable Walter G. Mitchell had a half interest in Mr. James' holdings.
(4)	The units in the name of L. Clare Moyer are said to have been subscribed on behalf of the late Winfield Sifton. Senator Wilfrid L. McDougald states that on the 18th May, 1928, he agreed to acquire them, the transaction being completed about the end of that month.
(5)	The units in the name of R. W. Steele were held for the Dominion Securities Corporation.
(G) The price to subscribers Raymond and Moyer was $37.50 per unit and Frank P. Jones acquired 800 of his and Mr. Mitchell's units from Newman, Sweezey & Company, Limited, at the same price.
(7)	Of the 900 units in the name of R. O. Sweezey, 600 were issued pursuant to the syndicate agreement for consideration other
than cash and the balance of 300 subscribed for at $100 per unit.
(8)	The 350 units subscribed for by F. S. Molson were at an average price of $45.71 per unit.
(9)	The Newman, Sweezey & Company Limited, units were at an average price of $42.86 and all other subscribers paid at the rate of $100 per unit.
(10)	The average price of the 4,400 units sold for cash was $59.32.
The Second Syndicate
(11)	On the 4th April, 1928, the Beauharnois
Power Syndicate was organized and acquired the assets of the Beauharnois Syndicate, the consideration being two units of the new syndicate for each one unit of the old syndicate with the right to unit holders to subscribe for as many units in the new syndicate as each already held therein at $100 per unit, being the par value thereof.
(12)	The members of the Beauharnois Power Syndicate holding 100 or more units or part interests, a3 on the 17th December, 1929, were as follows:
Number
Members	of Part
Interests
Gerald E. F. Aylmer & E. J. Mackell	 100
S.	Turnstall Blaiklock	  100
A. L. Caron	 221
Fred M. Connell	 200
FI. V. Cullinan & D. M. Carmichael	 250
William M. Dobell	 200
Dominion Securities Corporation Ltd	 1,492
John P. Ebbs	 5,200
AimO Geoffrion	 800
Hugh B. Griffith	 000
Hanson Brothers Inc	 110
C. J. Hodgson & Co	 175
Angus W. Hodgson	 740
J. Charles Hope	 130
Jones Heward & Co	  210
Thomas A. McGinnis	 450
F. Stuart Molson	 465
F. W. Molson	 100
Montreal Trust Co	 8,000

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Number
Members	of Part
Interests
Henry Newman	 395
Newman, Sweezey & Co. Ltd	 410
O'Brien & Williams	 101
Joseph H. Pauli	 100
W. C. Pitfield & Co. Ltd	 152
Hon. Donat Raymond	 351
Ritchie (R. L.) and Gilmore (K. F.) in trust	 350
Wm. H. Robert, Joseph A. Robert, Miss Sarah M. Robert, personally, and as
executors of the late Sarah Robert	 200
William H. Robert	 366
William Sutherland	  100
Robert O. Sweezey	 1,000
Part interest holders of less	than 100 part interests	 1,932
25,000
All of these with the exception of part interests exchanged for holdings of part interests in the first syndicate, and the 2,000 part interests that were used to purchase the shares of the Sterling Corporation, and also except 200 units issued to the Robert heirs, were paid for at the rate of $100 per part interest. These
2,000	units are included above in the holdings of John P. Ebbs.
The 5,200 units in his name were held for Hon. W. L. McDougald, and will be referred to hereafter.
(12A) The capital of the Beauharnois Syndicate consisted of 30,000 units at the par value of $100 each, of which 25,000 were issued.
(13)	The tangible assets of the first or Beauharnois Syndicate totalled not over $261,000 as on the 4bh April, 1928.
Beauharnois Light, Heat and Power Company
(14)	This company has been in existence since 1902, as previously mentioned. The control passed to Mr. Sweezey and his associates on or about the 3rd February, 1927. Under the agreement of that date (Exhibit No. 60) and according to the minutes of the meeting of the directors held on that day, Mr. H. B. Griffith was elected a director and secretary of the company. It was not, however, until the _ 13bh June, 1927, that a board of directors consisting of Mr. Sweezey and his associates including Mr. R. W. Steele, representing the Dominion Securities Corporation, took charge of the company's affairs.
Beauharnois Power Corporation Limited
(15)	This company was incorporated on the 17th September, 1929, by the Ottawa legal firm of McGiverin, Haydon and Ebbs by letters patent under the Dominion Companies Act. It was granted wide powers of acquisition and development of natural resources and in connection with the production, use, distribution or disposal of energy, power, water, light or heat.
(16)	The authorized capital stock is five Management Preferred shares without nominal or par value;_ 1.799,995 Class A common shares without nominal or par value and 3,200,000 Class B non-voting common sdhares without nominal or par value.
(17)	The holders of the five management preferred shares during the ten years next succeeding the date of the letters patent have the exclusive right to vote for the election of directors of the company. At the expiry of this period these automaticaly become Class A common shares.
(18)	At a meeting of the company on the 31st October, 1929, held at the office of Messrs. McGiverin, Haydon and Ebbs, in the city of Ottawa, a proposed memorandum of agreement, dated the 31st October, 1929, between the Beauharnois Power Syndicate, the Marquette Investment Corporation and the Beauharnois Power Corporation Limited, was submitted providing for the acquisition by the company or its nominees of all the undertakings and assets of the syndicate except unpaid or uncalled balances in respect of purchases of units or part interests of the syndicate. The consideration was
(a)	$4,750,060 cash
(b)	the assumption by the company of the liabilities and obligations of the syndicate and
(c)	the undertaking by the corporation to defray expenses not exceeding $10,000 of the winding up of the affairs of the syndicate and the distribution of its assets amongst the members.
The syndicate, on the other hand, agreed to subscribe at $1 per share for 1,000,000 class A common shares of the company.
(19)	It was resolved that this memorandum of agreement be approved and executed on' behalf of the company.
(20)	The directors present at this meeting were O. F. Howe, and D. K. McTavish, barristers of Ottawa, and the Misses Belle Fraser, Lila Brennan, F.dythe H. O'Malley, Bessie Conniffe. Lillian Dell, Elsie M. Burritt, Gwen Gunderson. Kathleen Havey and Mary H. Kelly, stenographers, all of the city of Ottawa.
(21)	At this same meeting, according to the minutes, there was authorized a proposed agreement, dated the 31st October, 1929, between Beauharnois Power Corporation Limited of the first part and Newman, Sweezey & Company, Limited, and the Dominion Securities Corporation of the second part, providing for the creation and issue of thirty year 6 per cent collateral trust sinking fund bonds of the company to the authorized principal amount of $30,000,000 and for the sale to Newman, Sweezey & Company, Limited, and the Dominion Securities Corporation of the said bonds, together with 770.000 class A common shares of the company for the price of $27,000,000 and accrued interest of said bonds. This agreement was subsequently ratified by the shareholders at a meeting held on the same day and at the same place, the above named directors being all of the shareholders and all being present.
(22)	The agreements were subsequently executed and carried out. The Beauharnois Power
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Syndicate was dissolved as of the 17th December, 1929, its tangible assets at that time consisting of the amount paid in-aggregating for the two syndicates $1,561,000. This includes unpaid balances of subscriptions which on the final settlement were deducted from the amounts payable to the individual members,
and $20,000 par of units issued to Robert in part payment for Robert's rights.
(23)	The tangible consideration received in respect of the 25,000 part interests issued by the Beauharnois Power Syndicate may be shown thus:
Particulars	Part Interests	AmountIssued to members of Beauharnois Syndicate for the acquisition of the under-	10,000 13,000 2,000	$ 261,000 1,300,000
25,000	1,561,000
For purposes of exactness, it should perhaps be noted that the_above amount of $1,300,000 includes $20,000 in respect of 200 part interests of Beauharnois Power Syndicate issued as fully paid to the Robert lleirs m part consideration of the purchase of the shares of Beauharnois Light, Heat and 1 ower Company, etc.
(24)	As a result of the agreement above
mentioned, the syndicate members receive for each part interest $150, and 40 class A shares of the Beauharnois Power Corporation Limited, which class A shares are set up in the books of the company at $1 per share and have had a market value as high as $17 per share, the low price being $4 per share.	_
(25)	On the above basis the cash profit paid to the members of the syndicate would amount to $2,189,000, to which should be added 1,000,000 class A shares, which were purchased by an additional $1,000,000 part of the consideration for the transfer of the syndicate assets. The above mentioned $2,189,000 was paid out of $27,000,000 received from the sale of the bonds and shares under the agreement with Newman, Sweezey and Company, Limited, and the [DOT]Dominion Securities Corporation.
(26)	The Marquette Investment Company is a company controlled by Newman, Sweezey and Company, Limited, and organized for the purpose of acting as trustee and depository and dispersement agent of the Beauharnois syndicate. (Exhibit No. 59).
Subsidiary Companies
(27)	There are also the following wholly owned subsidiaries of the Beauharnois Power Corporation Limited, in addition to the Beauharnois Light, Heat and Power Company, namely:
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The Beauharnois Construction Company, having charge of the actual work of construction under contract; and the
Beauharnois Transmission Company, having to do with the actual transmission lines and the transmission of the electric energy to be produced; the
Beauharnois Land Company, in which is vested the lands of the company, including land acquired in addition to all that required for actual canal construction and which it is hoped to dispose of for industrial sites, residence and other purposes in connection therewith, the
Beauharnois Railway Company, organized to build and operate the construction railway; the
Marquette Construction Company, a Delaware corporation, organized to purchase in the United States and lease to the Canadian Construction
Company certain machinery which it is hoped to return duty free to the United States after use on the canal, where it is said to be more readily saleable.
6.	Authority for Construction Work
(1)	According to Mr. Henry, actual construction on the north embankment was commenced on the 7th August, 1929, in the vicinity of lake St. Francis, and on the south embankment on the 23rd April, 1930.
(2)	Condition 11 of order in council P.C. 422 provides that the company shall not commence the construction of the works until detailed plans of construction " . . . . have been submitted and approved of by the minister. . . ."
(3)	The work as it is being carried out is not in accordance with the plans referred to in this order in council in certain important respects, viz.:
(1)	The banks are about 3,300 feet apart, whereas the original plans show a width of about 1,100 feet in the rock section and 4,100 feet in the earth section.
(2)	The width at the bottom of the navigation part of the canal is shown in the original plan. Exhibit No. 2a, in one place as considerably less than 600 feet, and in another as considerably more, whereas the actual 27 foot channel is being dug at a bottom width of 600 feet.
(3)	The entrance to the canal from lake St. Francis according to the last plan filed on the 22nd August, 1930. and as actually being excavated, is some 3,000 feet northerly and nearer the head of the Cedar rapids than shown on the plan. Exhibit No. 2a.
(4)	The remedial works shown on the original plan have not been approved either by order in council or by the minister.
(5)	The Hungry bay dyke has been breached and a substitute feeder for the old St. Louis feeder dug on the south side of the proposed canal wholly without governmental authority.
(6)	Certain questions have been raised as to the rights to pass order in council P.C. 422:
(1)	Does the Navigable Waters Protection Act give the governor general in council the right to authorize the diversion of the water from a navigable river?

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(2)	Can any of the powers given under that Act to the governor general in council be delegated to a minister, or to anyone?
(3)	Is the right of the governor general in council limited to the approval of plans already submitted, i.e., can the governor general in council approve of plans to be submitted in the future.
(4)	Can the governor general in council approve of the plans after the work has been done or partly done, or in the alternative is his power limited to approval of work the plans of which have been submitted before the commencement of the work.
(7)	Your committee finds as a fact that the work of construction is proceeding according to plans which have not received the approval of the governor in council or of the Minister of Public Works.
7.	Hungry -Bay Dyke
(1)	The province of Canada in 1856 and subsequent year, constructed a dyke along the shore of that part of lake St. Francis known as Hungry bay. This dyke at Confederation passed to the control of the Dominion of Canada, and it has since been maintained through the agency of the Federal Department of Railways and Canals. It will be necessary before water can be diverted to the canal from lake St. Francis that permission be obtained from the crown in the right of the Dominion of Canada to breach this dyke.
(2)	An application was made on the 29th day of July, 1929, for a conveyance to the company of that part of the dyke opposite the lands ow-ned by the Beauharnois Company, to the extent of 9,064 feet measured along the dyke. This application is now pending.
8.	Ambiguity in Order in Council
(1)	Condition number 3 of order in council
P.C. 522 provides that "the diversion of water shall not at any time exceed the maximum quantity of 40,000 cubic feet per second." If this means that at no time can the quantity of water diverted exceed 40,000 eubic feet per second, it is doubtful whether 500,000 h.p. can be developed by the use of that quantity of water, even adding thereto the 13,072 cubic second feet obtained by assignment of the Montreal Cotton Company's lease.
(2)	Your committee is of the opinion that any ambiguity in this respect should be removed.
9.	Control of Water
(1) The present plans do not provide for the control of the water at the entrance to the proposed canal. It has been stated in evidence that for this purpose and for reasons of safety, some method of control should be adopted, whether by way of a dam and gates, or a control lock at this point.
(2)	Considerable time was spent by Mr. Henry in an endeavour to establish that proper control could be maintained by the Dominion authorities at the gates leading to the water wheels.
(3)	Your committee was impressed with the idea that there should be some means of control at the entrance to the canal.
10.	Site of Works
(1)	The topography of the locality and the ground at the site of the works are of such
a character as to render possible and of comparatively easy attainment the large power development contemplated at a quite reasonable cost.
(2)	Your committee is of the opinion that from the physical standpoint a power development on the south shore of the Soulanges section of the St. Lawrence river is fundamentally sound and that with proper safeguards and regulation a navigable canal can be developed synchronously with the power develop-and utilized as a link in the St. Lawrence great waterway, at a reasonable cost to the Dominion of Canada for locks and bridges.
(3)	While the present plans are not in accordance with the proposals of the International Joint Board for this section of the river mentioned in their report of 1926, nevertheless, in view of the amount of money already expended, and of the possibility, as we believe, of the utilization of this canal for navigation purposes, we think that from the navigation standpoint the scheme should not be abandoned.
11.	Robert A. C. Henry-Vice-President and General Manager
(1)	Mr. Henry is an engineer of considerable imagination. He first became interested in the canalization of the Soulanges section of the St. Lawrence river as early as 1922 or 1923. He then discussed the project with Senator MeDougald.
(2)	This resulted in an arrangement between them by which Mr. Henry was to make an investigation, Senator MeDougald agreeing to finance him up to $10,000. As a result, a company called the Sterling Industrial Corporation, Limited, was formed in the office of Messrs. McGiverin, Haydon and Ebbs (Exhibit Ao _63). The incorporators were Honourable Andrew Haydon, John Parsons Ebbs, and Mary Hilda Kelly, Belle Fraser and Lila Brennan, stenographers, of the city of Ottawa. By the letters patent dated the 5th July, 1924, the company was impowered to carry on the business of an electric light, heat and power company in all its branches and incidentally thereto lias wide powers. The authorized capital consists of 500 shares without nominal or par value and the letters patent provide that the company shall carry on business with a capital of $2,500, of which only five shares have ever been issued.
(3)	On the same day-the 5th July, 1924- this company made application to the Department of Railways and Canals for the right to divert from the St. Lawrence River 30.000 c.s.f. at lake St. Francis and to use the same for power purposes. On the 7th July, 1924, a similar application was made to the Department of Public Works. The company never acquired any rights and so far as its minutes show never attempted to do anything other than file these applications. To each was attached a plan, Exhibit No. 62, dated Ottawa, 20th June, 1924, and signed John B. McRae, engineer, and having this note on its face, "This plan has been traced from plans made by the department of Railways and Canals."
(4)	Mr. Henry joined the Department of Railways and Canals in 1912 as inspect'ng engineer of railways and structures. He remained in various capacities with that department until 1923 when he joined the Canadian National Railways on the 1st March of that year as Director of Bureau of Economics. He remained with the railways until the 14th February, 1929, when he was appointed Deputy
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Minister of Railways and Canals, on the recommendation of the Prime Minister, by Order in Council, P.C. 192 (Exhibit 76). He held this position until the 10th March, 1930, and was appointed general manager of the Beauharnois Power Comporation, Limited, by agreement, dated the 10th March, 1930. His appointment to the Beauharnois company had evidently been under discussion for some time for Senator McDougalid says (Evidence, _ page 960) that there was an arrangement with him (MeDou-gald) and Mr. Sweezey that Mr. Henry would go in with Beauharnois as soon as he could get away from the Canadian National Railways and that was some time in 1929 anti prior to the 13th January of that year, so that Mr. Henry accepted the position of Deputy Minister at a time when he had an arrangement to go m with Beauharnois. Senator McDougald says he was surprised when he saw a report in the newspaper of Mr. Henry's appointment as Deputy Minister-so surprised that he telephoned from London to Canada "because my understanding with Mr. Henry before I left Canada was that he would take up bis duties with the Beauharnois company with Mr. Sweezey and myscilf just as soon as he could make arrangements to get away from the National Railways.''
(5)	It is worthy of note that the three Orders in Council numbered respectively 2201, 2202 and 2203, approving of the transfer of the leases from the Montreal Cotton Com on m all dated the 6th November, 1929, each contain the following:-	,	, .	. .,	, . f
The minister, on the advice of the ehier engineer of the department, concurred in y the Deputy Minister, recommended that authority he giv^n. etc.	_
(6)	Evidence was submitted that Mr. Henry had not be*n consulted about any matters pertaining to Beauharnois. His position, however, wras to say the least, quite anomalous.
(7)	The beneficial ownership of the Sterling Industrial Corporation Limited was and always has b"en in Senator McDougald and Mr. Henry until the transfer thereof to the Beauharnois Powrer Syndicate pursuant to the agreement dated the 18th December, 1928. By that agreement. Mr. Henry and his partner. Senator McDougald were to receive 2.000 units in the Beauharnois Power Syndicate, conditional on the passing of P.C. 422. It w'as not until August. 1929, that the actual interests of Senator McDougald and Mr. Henry were agreed upon at 50 per cent each but each affirm that it was always understood that they were partners in tb" transaction, so that during all of the time Mr. Henry was Deputy Minister of Railways and Canals, he had a very substantial interest in the Beauharnois Power Syndicate or, after the 17th December. 1929. in the Beauharnois Power Corporation Limited, an interest out of which he made quite substantial profits as will h"reafter appear. He was Deputy Minister of Railways and Canals at the time of the passing of the order in council P.C. 422, and was deeply interested in securing the approval of the plans of the Beauharnois project and your committee is asked to believe that he took no active interest in securing the approval of the governor in council. One can easily imagine, however, that in his position as deputy minister he threw' no obstacle in the way. once the obstacle or nuisance value of the Sterling application had been determined.
(8)	Mr. Henry, at his appointment to the managership of the Beauharnois Power Corporation Limited, also obtained 8,995 shares of that company at $i per share. Your committee is also satisfied that Mr. Henry participated to some extent at least in the withdrawal of company's funds for political purposes.
(9)	Sir. Henry's connection with Senator SIcDougald, and their success in despoiling the company of a large sum of money or money's worth for something that on the evidence was entirely worthless, does not commend him to your committee as a fit and proper person to continue in the management of this great public utility.
12.	Mr. R. O. Sweezey
(1)	Mr. Sweezey seems to have been the principal promoter of the Beauharnois project. He is now president of the Beauharnois Power Corporation Limited, and is a civil engineer by profession.
(2)	in 1912 he was engaged by the Royal Securities Corporation to investigate certain water powers, and in .1913 was instructed by the present Lord Beaverbrook, the then president of the Royal Securities, to investigate the water-power now known as Beauharnois. A copy of his report is filed as Exhibit No. 123.
(3)	Mr. Sweezey states that in 1925 or 1926, Mr. Narcisse M. Cantin brought the matter again to his attention and it is stated by Mr. Cantin in his evidence, and not denied by Mr. Sweezey, that from the 4th April, 1925, to December of 1926, Mr. Sweezey was chief engineer of the Transportation and Power Corporation Limited, the Cantin company.
(4)	As early as the 14th October, 1926, Mr. Sweezey had conceived the idea of forming a syndicate to take up the Beauharnois project, and his ideas of how to go about it are outlined in a letter written by him to Mr. Alderic R-'ymond. brother of Senator Raymond, on that date. In this letter he states: "To place ourselves in possession of all the rights essential to this undertaking we should pursue the following course:
"1. Acquire the Robert rights which are fundamental in regard to an initial grant which he holds to divert 40.900 c.f.s. He also holds rights granted by charter to expropriate for the proposed canal route. Numerous other in-<*' 1 ntnl rights are included in his holdings whioh he is anxious to sell, though he wishes to participate partially in the organization syndicate.
2.	Acquire the control of the St. Lawrence Waterways and Power Company stock, which is available to us. and upon which we have already a substantial hold.
3.	Enlist with our syndicate two or three
individuals, who in addition to providing some cash as their fair share, can assist us in getting our rights extended or enlarged so as to develop the entire available fiow of the St. Lawrence at this point. As the whole situation is entirely within the province of Quebec, our influence has to be exerted only in Canadian political circles-that is, at Ottawa and at Quebec. He further says: "In connection with personnel of syndicate, I have in mind the individuals we should enlist with us. ... I have hesitated to accept anyone definitely until certain that each and every one is persona grata to all others."	,
(5)	Asked as to who the persons he had in mind were, he at first couiil not remember. When later recalled and confronted with his answers on a former occasion under oath, he

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admitted that they were Senator Raymond, Hon. W. G. Mitchell, and Frank J. Jones, the latter of whom was desirable only for his ability to help with the finances.
(6)	It is obvious, therefore, that from the very threshold of this undertaking he had in mind that he had to associate with him men who could exert influence in political circles at Ottawa and at Quebec. How well he succeeded remains to be seen.
(7)	He states that he had talks with Senator McDougald, "and I was trying to get from Senator McDougald his view as to w-hat the difficulties would be in overcoming the political work to be done." This was probably in 1925 or 1926.
(8)	Mr. Sweezey succeeded in enlisting the help of all these gentlemen, first Senator Raymond, who was a subscriber for 800 part interests or units in the first syndicate through the Credit Generale du Canada; Hon. Walter Mitchell, who was an equal partner with Mr. Jones in the units purchased by Mr. Jones from Newman, Sweezey & Company; and Mr. Jones himself; and ultimately Senator McDougald, who agreed to join the ranks on the 18th May. 1928.
(9)	On the formation of the first syndicate Mr. Sweezey obtained 600 part interests for his activities up to that time, and he subscribed and paid for 300 units at $100 per unit. On the transfer of the assets to the second syndicate, his holdings doubled in number, and at the period of distribution, as of the 17 th December, 1929, he appears by the books to have been the holder of 1,000 part interests.
(10)	Mr. Sweezey's idea from first to last seems to have been that in order to secure the approval of the authorities at Quebec and Ottawa, it was necessary to deal with a lavish hand with his own moneys and those of the companies concerned. In pursuance of this idea he proceeded to employ a formidable array of legal talent, resulting ultimately in the payment up to the 31st December. 1930, of so called legal fees amounting to $436,000. t
(11)	The bills of some of these legal gentlemen show that the work was not of a strictly legal nature, and consisted to a certain extent of lobbying, and in fact one fee of $50,000 to Senator Haydon's firm was made contingent upon the Beauharnois Light, Heat and Power Company obtaining approval of its plans.
(12)	Mr. Sweezey was also, in association with Mr. H. B. Griffith and at least two other unnamed directors, the instrument by which approximately $300,000 of company funds were misused, as he alleges for campaign purpose. This is surely contrary to the purposes for which these moneys were borrowed from the public through the issue and sale of the company's bonds.
(13)	Your committee considers that Mr. Henry as general manager and Mr. H. B. Griffith, as secretary-treasurer, and director of the Beauharnois Light, Heat and Power Company, and other subsidiaries, are involved in this misuse of company funds. Mr. Sweezey's further activities in respect to campaign funds will be dealt with in a separate paragraph.
(14)	According to the evidence of Senator McDougald. Mr. Sweezey and he had arranged that Mr. Henry should join the Beauharnois Company and the matter had been discussed prior to the death of the then Deputy Minister Grahame Bell, which occurred on the 13th
January, 1929. It is, therefore, obvious that Mr. Sweezey must have released him from this arrangement and agreed to Mr. Henry's joining the Department of Railways and Canals at a time when he, Mr. Sweezey, knew that Mr. Henry had arranged to become interested as an employee of Beauharnois and this at a time when Mr. Henry, as the partner of Senator McDougald in the Sterling transaction, had acquired a substantial interest in the Beauharnois power syndicate.
13.	Campaign Funds
(1)	Mr. R. O. Sweezey has admitted in his evidence that he was responsible for the following contributions:
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(2)	For contributions for political purposes aggregating $864,000 and which includes the sum of $125,000 paid to John Aird Jr., of which mention will be made hereafter. Of this total, approximately $300,000 were Company funds and the balance was raised by Mr. Sweezey personally and probably at least in part came out of the large profit made on the sale of the syndicate assets to the Beauharnois Power Corporation and, therefore, indirectly out of the moneys borrowed on the sale of the company's bonds. Mr. Sweezey states (Evidence page 821) that he contributed personally to the Liberal party "somewhere around $600,000 to $700,000." This large sum was paid to Senators Haydon and Raymond. On page 822, Mr. Sweezey says that the total contributions to the Liberal party would run up well over $700,000 and in this there was included a sum stated by Mr Sweezey to be in the neighbourhood of $100,000 and by Mr. Griffith to be about $120,000, which were company funds.
(3)	Mr. Sweezey is unable to state how much was paid to them but he and Mr. Griffith agree that out of the sums paid to Senator Raymond, the Liberal party of the province of Quebec was to be taken care of. Mr. Sweezey says that he has no know-ledge of how much v-ent to the province of Quebec nor does he tell how much of the total amount was paid each of these two senators. He, however, ventures the statement that the amount received by Senator Raymond might have been in the neighbourhood of $200,000.
(4)	On page 822, Mr. Sweezey is asked the question, "Then you spoke of contributions to the Conservative party. What amounts were they and to whom were they paid"? Answer- "They weTe small amounts. Some of them were to help personal friends whom I had been helping, as a matter of fact, for a number of years in their campaign work." Mr. Sweezey spoke of contributing $6,000 to the campaign of Mr. Leslie Bell and Mr. Bell in his return under the Dominion Elections Act is said to have published this contribution, as required by section 80 of such act. Contributions were also made, according to the testimony of Mr. Sweezey and Mr. Griffith, to General McCuaig, understood to be a collector for the Conservative campaign fund in Montreal, of $10,000. Mr. Sweezey is not clear as to whether there were any further contributions to the campaign fund of this party. Mr. Griffith, however, states that there was a contribution to Mr. Cartier and that the total contributions to Conservative candidates or party organizers were *$25,000. Mr. Sweezey, on the other hand, thinks that the amount was $30,000 but refers to Mr. Griffith for the correct amount.
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(5)	Contributions were also made to Mr. W. R. P. Parker, president of the Ontario Liberal Association amounting to about $3,000. There was also a suggestion with reference to a proposed contribution ro the Conservative federal campaign fund tnrough its organizer, General McRae. This, however, was not made. Asked if the reason for its not having been made was that Mr. Bennett would not accept it, Mr. Sweezey in his reply said "I do not know that but I presume that may be so."
(8)	There appears to have been a com tribution of $20,000 to Mr. Cartier on behalf oi the Conservative party of the province of Quebec, but it does not appear clearly whether this was included in the sum of $30,000 above mentioned or in addition thereto. This item of $20,000 appears in a cheque of the Marquette Investment Corporation, dated the 7th March, 1931, payable to cash, endorsed by Mr. Sweezey and charged to accounts receivable, in respect thereto Mr. Sweezey says, "I think probably that must be the item contributed to the Conservative party in Quebec."
(7)	Asked by Mr. Jacobs who got that money, the answer was, "That went to the funds of the Conservative party." Asked who received the money Mr. Sweezey states, "Mr. Cartier, I understand it was on behalf of Mr. Houde's party."
The John Aird, Jr. Payment
(8)	This leaves but one further item to be discussed-the sum of $125,000 paid by Mr. Griffith at the direction of Mr. Sweezey to Mr. John Aird, Jr., of Toronto. This sum, as to $120,000 thereof, was procured by a rather ingenious device: Mr. Griffith purchased 8,000 shares of the Marquette Construction Company, at $5 a share, for $40,000, and immediately purported to sell them to the Beauharnois Construction Company at $20 a share, for $160,000, and took out the difference, $120,000 in cash, which he used to purchase through Newman, Sweezey & Company. Dominion of Canada bonds at a par value of $120,000.
(9)	Mr. Sweezey says (page 823): "I know we made a contribution to someone who represented himself as standing up for an Ontario fund of this kind," and that this representation was made to him by Mr. John Aird, Jr. Asked what Mr. Aird said, Mr. Sweezey's answer is: "That he thought a contribution would be in order to the Ontario Conservative party because we would probably be having a lot more dealings with the Ontario people and that gratefulness was always regarded as an important factor in dealing with democratic governments."
(10)	The delivery of the bonds is said to have taken place some substantial time after the last Ontario general election, and the conversation between Mr. Aird and Mr. Sweezey is said to have occurred some months before the delivery of the bonds, which were handed over on the 6th December, 1929.
(11)	Mr. Aird says in his evidence that the first interview with Mr. Sweezey took place at the Ritz Carleton Hotel, Montreal, in the early fall of 1929, at a time when the Beauharnois organization was negotiating for a contract for the sale of electric power to the Hydro-Electric Power Commission from whom they obtained a contract for 250.000 h.p. at $15 per h.p., on or about the 21st November, 1929.
(12)	Mr. Aird, (evidence page 844) is asked whether the receipt of these bonds was on behalf of any political party, and his answer is "No." Asked on whose behalf it was, his answer is: "On my own." Asked this question: "Was it on behalf of anybody, or was anybody interested but John Aird, junior, personally in these particular bonds to the extent of $120,000?" his answer is: "No, sir, decidedly not."
(13)	On page 847 of the Evidence there appears the following:
By Mr. Jacobs:
Q.	It was not your intention to turn this over to the organization at all?-A. No, I did not give Mr. Sweezey any communication that I was going to do so.
Q. You swear to that?-A. Yes.
(14)	On page 849, by Mr. Jacobs:
Q. You would swear you did not, directly or indirectly, represent to Mr. Sweezey that you were an emissary of the conservative political organization in Toronto?-A. Yes.
Q. You swear to that?-A. Yes, I do.
(15)	Mr. Aird states that he belonged to no political organization of any kind and had not taken any interest in party politics, and also that the arrangement between him and Mr. Sweezey was purely a personal one between the two of them.
(16)	Whether the truth lies on one side oi the other, it is clear there is no evidence before the committee that would indicate that any of these bonds have reached any political organization, or any person authorized to receive campaign funds.
(17)	Mr. Aird's statement is supported by the evidence of various bank officials as per details set out hereunder. Mr. Aird further stated that the coupons were personally collected by Mr. Aird. (Evidence page 974).
(18)	The evidence establishes that the $120,090 par of bonds handed to Mr. Aird by Mr. Griffith on the 6th December, 1929, have been dealt with as follows:
fA) Held for safekeeping or as collateral by the Royal Bank of Canada, the Canadian
Bank of Commerce, and the Bank of Nova Scotia	$	65,000
(B) Sold	 5,000
(C) Exchanged	 50,000
* 120,000
The detail of the bonds exchanged is:-
(1)	$10,000 for £3,100 G.T.P. 1962	 £	3,100
£2,600 held at Canadian Bank of Commerce, account Concrete Masonry__£	2,600
Sold	 500
£	3,100

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42G1
(2)	410,000 for $11,000 Province of British Columbia 1955	*	11,500
Later exchanged for «li,500 Province of Aloerta i957-of which held at
Canadian Bank of Commerce for safe keeping	$	9,500
Held at Royal Bank, account Champlain Construction Co	 2,000
$	11,500
	$ 11,000

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$	4,000
8,000
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(5)	$10,000 for $12,000 Hydro-Electric Power Commission 1957	$	12,000Held at Royal Bank on account Champlain Construction	$	12,000
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Summary op Sales
Bonds originally obtained from Griffith	$	5,000
Grand Trunk Pacific £500 say	 2^500
Toronto Harbour Commission	 5^000
(4)	$10,000 for $12,000 Province of Saskatchewan 1957	
Held at Aird, McLeod & Co. as collateral	
Held at Royal Bank, account Champlain Construction
(3)	$10,000 for $11,000 Toronto Harbour Commission 1953.
Held at Canadian Bank of Commerce for safe keeping.
Exchanged for Eglinton Hunt	
Sold	
$	12,500
Mr. Aird's evidence is that the proceeds of bonds sold were expended for his personal purposes.
(19)	Neither Mr. Sweezey nor Mr. Griffith pretended to speak with exactitude as to the actual amount of moneys contributed for political purposes. In this connection Mr. Sweezey says: "It was a very distasteful thing to me and I personally preferred not to know or remember much about it."
(20)	Your committee considers that return should be made immediately of any moneys improperly taken from the companies' funds for political subscriptions by those responsible for their extraction.
(21)	It is also to be observed that no pretence is made that the personal subscriptions were because of the adherence of Mr. Sweezey to any particular party and we are of the opinion that they were shamelessly wastefully and needlessly made for the express purpose of obtaining favourable consideration of the company's proposals to the government.
(22)	That Mr. Sweezey was solicited for these contributions appears on page 822 of the evidence, where in answer to Mr. Lennox he states: "I could not deliver that amount of money in one fell swoop. I had to scratch it up where I could from time to time." Further on, in speaking of the $10,000 campaign fund to General McCuaig, Mr. Lennox remarked: "You did not treat us very generously." Mr. Jacobs: "The fact that the party is in power is some indication."_ Witness: "They did not press me so hard, sir."
(23)	The evidence on page 826:
By Mr. Lennox:
Q. You said Senators Raymond and Haydon were designated as the proper persons to whom you should pay this fund? Who designated
them?" Answer: "Nobody specifically designated them; I just happened to know it; they came and told me they were."
14.	Senator Haydon
(1)	The first connection of Senator Haydon with the Beauharnois project appears to be in 1924, when his firm incorporated for Senator McDougald and Mr. Henry the Sterling Industrial Corporation on the 5th July of that year and made the application of that company to the two departments of the government for the right to divert 30,000 e.f.s.
(2)	Ilis firm was retained by Mr. Sweezey for the Beauharnois power syndicate in the fall of 1928 under somewhat peculiar circumstances.
(3)	Senator Haydon has been a member of the Senate since March 11, 1924, and was known to Mr. Sweezey to be a member of the Liberal party who collected campaign funds. The retainer was of an unusual character. The firm demanded in excess of $30,000 per year but Mr. Sweezey demurred and finally arranged that the firm of McGiverin. Haydon and Ebbs would be paid the sum of $50,000, conditionally upon approval of its application by the governor in council. On October 3, 1928, this firm received a cheque from the Marquette Investment Company for $7,500 for legal services. On page 728, Mr. Sweezey says in an interview with Mr. McGiverin, "However, by a compromise I agreed that if the thing got through, I would prefer to pay on that basis; if it went through I would pay him $50,000, and a retainer for three years at $15,000. ... it is human nature to xvork harder at a price." Asked, in the event of failure what would happen, Mr. Sweezey's answer was "Well, he would have his expenses. At least I presumed that he would
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have to have his expenses. ... I was sure he would charge me something for it." This arrangement was apparently made, according to Mr. Sweezey, some time prior to the 2nd October, 1928 (Evidence page 729).
(4)	On the 2nd October, 1928, a transfer was made to Mr. Ebbs of the Tlaydon firm, from Mr. Clare Moyer of the interest Mr. Moyer then held in the Beauharnois power syndicate for Senator McDougald.
(5)	Mr. Ebbs, Senator Haydon's partner, acted as syndicate manager for some time representing Senator McDougald. The order in council was approved, Senator Haydon's firm was paid $50,000 and thereafter received several cheques in pursuance of the arrangement made with Sir. Sweezey by which that firm was to be paid a retainer of $15,000 per year.
(6)	Senator Haydon was a man of note and standing in his party and was recognized as one of t'he official organizers of the Liberal party in Canada. Senator Haydon became the recipient from Mr. Sweezey and the Beauharnois company of sums of money for campaign purposes, said to be in excess of half a million dollars, and it is also to be noted that throughout this firm did not render any detailed bill for professional services, as shown by the vouchers (Exhibit Nos. 85 to 87 inclusive).
(7)	In these circumstances, your committee is of opinion that the acceptance of the above-mentioned contingent retainer and of the $50,000 involved, and of the campaign funds by Senator Haydon cannot be defended and is strongly condemned.
15.	Senator Raymond
(1)	Senator Raymond was appointed to the Senate on the 20th December, 1926. He, voluntarily, after the permission of the Senate had been granted, appeared before the committee on the afternoon of the 16th July, 1931, and stated that he had subscribed on the 1st April, 1927, at the suggestion of Hon. Mr. Mitchell and Mr. Franlr P. Jones, for 800 units of the Beauharnois syndicate at a price of $30,000, which he paid. These became 1,600 units in the second syndicate and as was his right, he subscribed for 1,600 further units, in the name of J. R. Lefebvre, and made his holdings 3.200 units. On the whole transaction he realized as of the 17th December, 1929, $529,600 profit and 14,040 shares of class A stock of the Beauharnois Power Corporation, Limited. Senator Raymond sold all his originally acquired units at the same time that Mr. Frank P. Jones sold his at $550 per unit, and later Senator Raymond bought from W. G. Mitchell 350 units and from R. T. Fuller or.e unit in the Beauharnois Power Syndicate and he held these at the dissolution of the syndicate on the 17th December, 1929. His total profit was as above mentioned. He slates that neither at Quebec nor at Ottawa did he exert or attempt any political influence on behalf of the Beauharnois applications. His evidence is that he "did nothing to push the deal." On page 794 of the evidence, Senator Raymond was asked:
Q. Then are we to understand you to say, that having this interest in this project and knowing that there was a very strong opposition and a big fight being put up, you never turned a hand to help it at all?-A. I do not know if there was anything in my power to do towards helping it.
Q. Well, you could help?-A. I thought the only help that I could give was to put my money in.
Q. I may take it then, from what you say, that we have your unequivocal statement that at no time did you attempt to exert your personal influence on behalf of this project?- A. At no time.
(2)	At the conclusion of his evidence one of the members of the committee expressed the view that lie ought to hs commended for his frankness in giving his evidence. It was, however, later disclosed in evidence that according to the bill of Messrs. Geoffrion and Prud'hotnme, counsel for the Beauharnois Syndicate (Exhibit No. 114) from September 10, 1927, to May 23, 1928, there appear some sixteen entries charging for interviews with and telephones to and ' from Senator Raymond. An interview appears to have taken place on one occasion with Hon. Mr. Mitchell and on another occasion in Ottawa with Senator McDougald.
(3)	On page 391, Mr. Frank P. Jones states "I certainly asked Senator Raymond over and over again if he could not do something to get some action."
(4)	It transpired when Mr. Sweezey returned to give further evidence that Senator Raymond had received from Mr. Sweezey some $200,900 of campaign funds for the Liberal party. The conmmendable frankness would seem to require that Senator Raymond should have disclosed this to the committee if he wished the committee to understand that he was stating fairly his connection between the government and the Beauharnois promoters.
(5)	In view of Mr. Sweezey's attitude throughout and his views as to the necessity for political influence, it is hardly conceivable that .Mr. Sweezey would pay this large sum of money over to Senator Raymond unless he at least was satisfied that the Senator's influence had been or would be worth the money and it is remarkable that Sanator Raymond did not insist on making some explanation of his position in this regard, in view of the evidence.
16.	Senator Wilfrid Laurier McDougald
(1)	Senator McDougald was first summoned to the Senate on the 25th June, 1926, hut owing to the dissolution of Parliament was not then sworn in and his appointment lapsed. He was again summonded in October of that same year and w«s sworn in the following year. Since 1922, except for a short interval in 1926, until 1930, Senator McDougald occupied the position of chairman of the Montreal Harbour Board and, as he stated in evidence, assumed a position of high responsibility in connection with the development of the St. Lawrence Deep Waterway.
(2)	In May, 1924, the then Dr. McDougald was appointed a member of the National Advisory Committee, whose membership included the Honourable G. P. Graham, as chairman, and Honourable Clifford Sifton, and several gentlemen interested in existing hydro-electric power developments.
(3)	On the 20th April, 1928, Senator McDougald was appointed a member of the Special Committee of the Senate to inquire into and report from time to time on the matter of the development and improvement of the St. Lawrence River for the purposes of navigation and production of electric current and power and

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matters incidental to such a project. That committee held several meetings in the month of May, 1928, and to which reference will be made more specifically hereafter.
. (U ^11 1923, Mr. McDougald became associated with Mr. R. A. C. Henry, as has been previously pointed out in this report, and as a result the Sterling Industrial Corporation Limited was incorporated and applications made to the Departments of Public Works and Railways and Canals on the 5th and 7th July, 1924, as already indicated.
(5)	Prom this small beginning, the interests of Senator McDougald have expanded until at the time of his giving his evidence he was chairman of the Board of the Beauharnois Power Corporation, Limited, elected on the 20th of December, 1929, the holder of Management Preferred shares; a director of the Beauihar-nois Light, Heat and Power Company, the Beauharnois Construction Company, the Beauharnois Land Company, and the Beauharnois Transmission Company.
(6)	This expansion is almost comparable to the present Beauharnois project as compared with the original St. Louis feeder.
(7)	The application of the Sterling Industrial Corporation was allowed to lie dormant until some time in 1928. On the 18th of May, 1928, senator McDougald agreed to take over 800 units of the first syndicate which had been subscribed for by Mr. Clare Moyer on the 4th of April, 1928, the day upon which that syndicate was dissolved, and upon which day a payment of $15,000 was made by Mr. Moyer, of moneys which he says he received in cash from Mr. Winfield Si fton. A further payment was made on the 18th of May, in an amount of $15,000 out of moneys which Mr. Moyer says were received by him from Mr. Sifton by way of a bank draft containing no information as to the person who was providing the funds.
(8)	The 800 units thus acquired by senator McDougald became 1,000 units on the formation of the second syndicate, and he, in the name of Mr. Moyer, subscribed as he had the right to do for 1,000 more units at a price of $100 per unit, and for which he agreed to pay $160,000 and on which at tile dissolution of the syndicate on the 17th December, 1929. he had paid $80,000.
(9)	In the meantime, however, namely on the 2nd October, 1928, these had been transferred from Mr. Moyer to Mr. John P. Ebbs, a member of the Haydon firm, by reason of some instructions from senator McDougald, about which there seems to be some insolvable mystery, and about which there need not have been any mystery at all if the transactions were an ordinary business one.
(10)	As previously pointed out, senator McDougald through his representative, Mr. Ebbs, acquired for the five issued shares of the capital stock of the Sterling Industrial Corporation. Limited, 2,000 part interests in the second syndicate. These units ivere given for a corporation the rights of which, as has been pointed out by Mr. Cameron, chief engineer of the Public Works department, on page 1019 of the evidence, "would he of no value/' The agreement was made in the fall of 1928, and the Beauharnois company considered these shares to be of such value that they still remain endorsed in blank, and have- never been transferred on the books of the company. It can
hardly be pretended that this company had any value, even as suggested, any "nuisance value" or was or could be thought to be any serious obstacle in itself to the application of the Beauharnois Light, Heat and Power Company to the governor general in council then pending. If so, there were two former applications in the department, one of -which at least was based on an alleged acquisition of the Robert rights, which rights were the foundation of_ the Beauharnois application. Still, the carrying out of the agreement was made conditional upon favourable action by the governor general in council, and it is beyond belief that had that company not been owned by Senator McDougald, who represented himself to he a close friend of the administration, and
R.	A. C. Henry, soon destined to become deputy minister of Railways and Canals, or others equally influential, the Beauharnois Power Syndicate would have hardly considered paying for it even the nominal amount that had been subscribed as its capital stock, much less 2,000 units, which ultimately became $300,000 in money and 80.000 shares of the Beauharnois 1 ower Corporation Limited but would doubtless have received the same consideration as was accorded the other prior applicants-namely, tile privilege of being completely ignored.
(11)	It is suggested that the handing over of this large number of units was in order to induce Mr. Henry to go over to the Beauharnois Company. Why any inducement, other than a of his salary which actually occurred, should have been necessary in order to induce the man who had for at least six or seven years been most anxious to be connected with a Beauharnois project is difficult to understand, and your committee cannot accept that as the explanation. On the contrary we are convinced that -he 'nuisance value" consisted in the necessity of a large inducement to Senator McDougald in order that he, a possible obstacle *in the attainment of the objects of the syndicate, might become so vitally interested therein that any possible opposition on his part might be obviated.
. (12) That Senator McDougald was a factor in the success of this venture is apparent from the proceedings of the special committee of the Senate above referred to, of which he was a member. It appears that on the 31st °-J.	he was instrumental in having
Mr. Henry, then his partner in the Sterling company, come before that committee and answer certain Questions. These questions had (see page 215 of the proceedings) been prepared beforehand by Senator McDougald and submitted to Mr. Henry.
(13)	Mr. Sweezey in his evidence makes it very clear that the reason for his having done some of the extraordinary things which he did do was that time was of great importance from the standpoint of financing the enterprise, owing to the threatened financial crisis.
(14)	On the 25th May, 1928, Mr. Airne C-Teoffrion, chief counsel for the Beauharnois syndicate, and who according to his bill for professional services had a number of interViews Starting on the 17th December, 1927, with Senator McDougald, wrote to Senator McDougald urging that there was "no reason for delaying the application to the Dominion Executive for approval of the Beauharnois plans under the Navigable Waters Act."
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(15)	The last question which Senator Mc-Dougald asked Mr. Henry on this occasion, on the 31st of May, 1928, was as follows:
(Page 232 of the committee's proceedings).
Hon. Mr. McDougald: The last question -which I have, Mr. Henry, is, in your opinion should the improvement of the St. Lawrence waterway be gone on with as soon as possible, and if so, why ?
It is to be recalled that thirteen days previously, on his own testimony, senator McDougald had agreed to become interested in this enterprise to the extent of 800 part interests in the Beauharnois syndicate.
(16)	On the 19th of April, 1928, Senator McDougald in a speech delivered by him from his place in the Senate stated: 'T want to say here, and to say it with emphasis, that I do not own a dollar's worth of stock in this enterprise, and have no interest in or association with that company in any. way, shape or form". . . "So far as I myself I am concerned I cannot add too much emphasis to my denial of the suspicions and aspersions which these despatches" (referring to despatches of the Toronto Mail and Empire and the Globe of April 18. 1928) "have cast upon me as a member of the advisory committee, as a member of this honourable body, and as a private citizen."
(17)	On the 20th of May, 1931, senator McDougald, in referring to his former statement on this subject, and the date thereof, the 19th of April, 192-8, made the following statement from his place in the Senate: "Honourable members of the Senate, before the orders of the day I rise on a question of privilege. According to the newspapers of this morning my honour and integrity as a member of this house have been attacked in another place, and I desire to draw attention at once to a statement which I made in the Senate in April, 1928, regarding my position in the much-discussed Beauharnois Power Company. Newspaper articles had reflected on myself and other members of the National advisory committee reporting on the St. Lawrence Waterways. It was insinuated that our decisions and recommendations were influenced by personal interest in power development on the St. Lawrence. In this house I stated at the time that I had no interest in the Beauharnois Power Company or in the syndicate. That wras absolutely true and correct. I may say at once that up to that time. . ." (-that is April, 1928) "I had been invited on many occasions to become a member of that syndicate but had always declined. After that date I was asked again, and had the whole project investigated from every angle. When I was satisfied that it was a proper project for me as a member of this Senate, as a business man, and as a citizen of Canada, to take a financial interest in, I agreed to do so. Some six months later, in October, 1928, I took an interest in the Beauharnois Syndicate."
(18)	On page 930 of the evidence appear these questions and answers:
By the Chairman:
Q. That is not a correct statement, Senator, I suggest to you?-A. I suggest, sir, that is is a correct statement.
Q. Then your evidence yesterday was wrong, because you bought from S-ifton in May?
[Stage Direction]

I did not appear in it until October, Mr. Ebbs was my representative in October, and I became active in it in October.
Q. Is that your explanation for that statement?-A. That is my explanation for that statement. I was in the syndicate-
Q. Why, of course you were in the syndicate; here is your evidence?-A. The end of May, 1930, and not When I made the speech in the Senate.
Q. You say in your speech, distinctly that in October, 1928, you first took an interest in the Beauharnois Syndicate. Yesterday in your sworn testimony you admitted that you had purchased from Sif-ton in May, 1928?-A. That is correct.
Q. I suggest to you that your statement in the Senate was entirely wrong?

A. It may have been ambiguous, but it was not wrong. What I meant was I came into it in October through Mr. Ebbs. That is the first time I came into it. . ."
Q. Just before you go on with that, Mr. White, I want to complete the question I was putting to the Senator a moment ago (to the witness). While you were making this ambiguous speech, as you call it now, in the Senate on the 20th May, 1931, of course you were interested with Mr. Henry in the Sterling Industrial Corporation- -A. That is right.
(19)	Further in his speech on the 20th May, 1931, Senator McDougald said: "I might add that I paid into the syndicate dollar for dollar with every other member of it."
(20)	As previously pointed out in this report,
Senator McDougald, Senator Raymond, and Mr. Frank Jones, bought their units in the first syndicate for many fewer dollars per share than any other of the members, except possibly Mr. Sweezey who got some of his for a consideration other than cash.	'
(21)	It is also significant that Senator McDougald received considerable sums of money from the company for travelling expenses.
(22)	How one holding the high offices to which he had been called, as chairman of the Montreal Harbour Board, member of the National Advisory Committee on St. Lawrence Waterways, a senator of Canada, and a member of the special committee of the Senate, above referred to, and as he himself has stated, having a high regard for his public duties, should allow his private interest to so interfere with his public duty that he found it necessary, speaking from his place in tire Senate to be "ambiguous" and incorrect, it is difficult for your committee to understand.
'	(23) Senator McDougald's actions in respect
to the Beauharnois project cannot be too strongly condemned.
17."Mr. James B. Hunter, deputy minister of Public Works, and Mr. Kenneth McKenzie Cameron, chief engineer of that department were called as witnesses and gave evidence. The committee desires to say that the evidence of neither of these officers appeared to be given in the manner which one might expect from departmental officials.
18.	Present Financial Position
(1) The consolidated balance sheet of the Beauharnois Power Corporation Limited and subsidiaries, as of the 31st December, 1930,, discloses:

Beauharnois Power-Report
1. Capital Stock-
5 Management Preferred Shares, no par	$	5 00
1,799,995 Class A Common Shares, no par	 1,799,995 00
2. Funded Debt-	$ 1'800'000 00
Collateral trust sinking fund; 6% bonds, due 1st October, 1959	 30,000,000 00
[Stage Direction]
The assets consist of-
Cost to date of property rights and power development in the course of
construction	$28,768,816	53
becurities on deposit with the Quebec Provincial Government and the
Hydro-Electric Power Commission of Ontario, etc	
1,021,385	00Investments (Brubacher et al)	
200,168	00Sundry accounts receivable	
221 434 67
Cash and marketable securities held by the Royal Trust Company in
escrow	
2,325,546	67Cash on hand and in bank	
186,130	73T	$32,723,481 60Bess sundry liabilities	
923,481 60
[Stage Direction]
The item of $28,768,816.53 is made up as follows:-
Real estate	 5,189,783 82
construction accounts	 g 193 497 [7
Equipment and temporary construction less depreciation	
3|oi2[337	33Engineering expenses	
1,081,431	59Interest during construction	
l' 338! 795 43Property rights and interest	
' " ii'357'88S 87Miscellaneous	595!082	32
[Stage Direction]
The item for property rights and interest of $11,357,888.87 is made up of the items set out in Exhibit J\o. 127, and consists in part as follows:-
Issue of 10,000 part interests at $100 each to members of the Beauharnois Syndicate, as of 4th April, 1928, as part consideration for the taking over of assets and undertaking of Beauharnois Syndicate	$	1,000,000Less net book value of assets acquired	
261,000	$	739 000
Issue to J. P. Ebbs, 2,000 part interests Beauharnois Power Syndicate, consideration for acquisition of capital stock
of Sterling Industrial Corporation	 200 000
Amount paid to Beauharnois Power Syndicate 17th December, 1929, as part consideration for the taking over of
Beauharnois Power Syndicate undertaking	$	4,750,000Less net book value of assets acquired	
2,500,000	2,250,000$	3,189,000
Note.-This figure represents the profits made by the Syndicates and includes $1,000,000 which was used to purchase 1,000,000 shares Beauharnois Power Corporation at $1 per share-the actual cash profit to the Syndicate members being $2,189,000.
Further items in Exhibit No. 127 are:-
Discount of 10% on issue of $30,000,000 Beauharnois Power Corporation, Limited, 6% collateral trust sinking fund
bonds, due October 1, 1959, underwritten at 90	 $	3 000 000
770,000 shares of Beauharnois Power Coloration, Class A Common stock issued to under-writers, on which a
book value of $1 per share was placed	 77q qqq
Purchase by Beauharnois Construction Company of 8,000 shares of capital stock of Marquette Construction Corporation at $20 per share	$	160,000Less issued price	!!!.'!	40! 000	120,000

[Stage Direction]
unaudited statement of the 31st of May, 1931, exhibit No. 128, as compared with the Consolidated isalance Sheet as of the 31st December, 1930, disclosed that the property account had increased by $5,781,185.74 to a total of $34,5o0,002.27, as compared with $28,768,816.53.
The Royal Trust Company escrow fund had been decreased by $1,430,396.67 for payments made to the Company for outgoings. Cash on hand had decreased by $113,857.31.
[Stage Direction]
Beauharnois Power-Report
(2)	In the liabilities the most important increase is a bank loan of $3.5(H),000 secured by the hypothecation of $5,250,000 of bonds of the Beauharnois Light, Heat and Power Company, being part of an issue of $20,000,000 bonds authorized for temporary purposes on the 15th day of January, 1931. At present the bank loans are, according to Mr. Griffith, about $6,000,000 secured by the hypothecation of $9,000,000 of these bonds.
(3)	Accrued interest of bonds had been decreased by $150,000 which means that having regard to the monthly accrual of interest amounting to $150,000 in the interval between December 31, 1930, and May 31, 1931, $900,000 of bond interest had been paid. Miscellaneous accounts payable had increased by $881,770.75 to an amount of $1,355,252.35.
(4)	As the situation now stands, the promoters of the Beauharnois Project involving tlie exploitation of a great natural resource nave been able to secure to themselves a return of all moneys advanced by them or any of them, a profit of $2,189,000 in cash and 1,000,000 class A common shares, which, if saleable at the market quotation would at one time have been worth $17,000,000 and at to-day's quotation of $4 per share, would be worth $4,000,000. This Cash profit was paid out of moneys borrowed by the Beauharnois Power Corporation Limited by the sale of its bonds.
(5)	According to Mr. Henry, in order to complete the project up to the point where 500,000 h.p. will be produced, they will require a further sale of bonds in a capital amount of $40,000,000. If this were accomplished the power project would have been constructed completely on borrowed money and the promoters would be in control of this vast enterprise owning 1 620,000 of the class A shares out of a total issue of 1,799,995 and also the 5 Management Preferred shares which for 10 years give to the under-writers practical control of the company's affairs and all of this without the present investment of any money.
Your committee recommends:
1.	That the parliament of Canada take such action as may be within its poiver, and without prejudicing the rights of the province of Quebec, to procure the development of this project in such a manner as will best serve the people of Canada.
2.	That should the rights of the Dominion and the province of Quebec come in conflict, every effort be put forth to arrive at a satisfactory agreement, so that the project may not be imperilled by delay.
3.	That definite action be taken to preserve the rights of navigation and the complete jurisdiction of parliament in respect thereto.
4.	That the order of reference, the reports of the committee, the minutes of proceedings, the minutes of the evidence taken, and the exhibits filed, be printed as an appendix to the Journals of the House.
5 That a copy of this report he remitted to the Speaker of the Senate for the information of that house.
6. That such of the exhibits as have not been read into the record and are not on departmental files and were referred to be copied and the originals thereof be returned to the person producing the same.	,

[Stage Direction]
The house in committee of supply, Mr. Morand in the chair.
Cold storage warehouses, $453,708.08.
Mr. TAYLOR:: How much is included in this vote for additional cold storage at Simcoe?


Robert Weir: The amount i3 $lo,000.


Mr. MOTHERWELL:: I presume that a large portion of this amount is to take care of contracts already entered into. Assuming that that is right, I would ask the minister if he had not sufficient applications to obligate his spending the same amount of money as last year. In other words, why is there this reduction of $46,000? Are there not sufficient applications of a bona fide nature to justify the same expenditure as last year?


Robert Weir: A number of them have notified us that they are not carrying on their contracts, and the payments will not have to be made this year.


William Richard Motherwell: Are there any new contracts this year?


Robert Weir: Yes.


William Richard Motherwell: What are they?


Robert Weir: They are as
follows:
Federal Warehouse, Windsor, Ont.
Norfolk Fruit Growers Association, Simcoe,
Ont.
Prince Edward Fruit Growers Limited, Picton, Ont.
Thedford Cold Storage Company, Thedford, Ont.
La Sarre Creamery, La Sarre, Que.
Georgian Bay Fruit Growers Limited, Thorn-bury, Ont.	. ,
Gagnon and Dufour, St. Felicien, Que.
Le Poisson de Gaspe, Barachois, Que. Trenton Cold Storage, Trenton, Ont. Penticton Cooperative Growers, Penticton, B.C.


Mr. VALLANCE:: Why is there a reduction of $46,291.92 as compared with last year?


Robert Weir: I have just explained that some of the contracts that have been entered into and accepted are not being carried out this year.


Mr. ILSLEY:: Doe3 the list the minister has just read make up the total amount of the vote?


Robert Weir: Not entirely. There are some applications pending.

Supply-Agriculture-Fruit


James Lorimer Ilsley: Are the payments that are to be made all under the Cold Storage Act? I understand that in the past the government has made payments mot under, the Cold Storage Act. Is it proposed to continue that practice?


Robert Weir: This year we are just making commitments under the Cold Storage Act.


James Lorimer Ilsley: That is for the present fiscal year?


Robert Weir: Yes.


[Stage Direction]
Item agreed to.
Fruit, including grant of $8,000 to Canadian Horticultural Council, $502,200.
Mr. YOUNG:: In this item is included a
grant of $8,000 to the Canadian Horticultural Council. I have here the Dominion government telephone directory, and I notice in it this name: L. F. Burrows, 114 Vittoria street, centre block 772. This man Burrows is secretary of the Canadian Horticultural Council. I would ask the minister how his telephone comes to be connected with the exchange of this building, and what he pays for it?


Robert Weir: In previous years
when this association was formed and the grant was made, it was agreed that we would supply the council with an office and telephone service.


Edward James Young: They are to have a free
office in this government building at 114 Vittoria street?


Robert Weir: That has been the
practice in the past.


Edward James Young: I know it, and they also
get free telephone service, connected with the government exchange. As I understand it, this association was organized some year.; ago to promote the interests of horticulture in this country, but it was not long until they degenerated into a political organization. The secretary of this association carried on within the walls of this very building an active lobby against the late government. I know it, for he admitted it when I accused him of doing it. He and that association are responsible for a large amount of the protectionist propaganda that has been circulated among the farmers during the past few years. This association is not representative of the horticulturists of this country. It includes in its organization those engaged in horticulture and also those engaged in the commercial handling of horticultural products.
At the annual meeting of the Canadian Horticultural Council last winter, the Ontario Horticultural Association decided to withdraw from this association entirely because of its political activities. I have before me a copy of the report of the convention. Mr. Carter of Guelph is reported as follows:
As your representative since the time the horticultural council was organized in 1922, and just to make myself right in regard to a statement made by Mr. Saunders, that if your representative had brought forward something there would probably have been something doing, I might state that the council, in my opinion, would be a wonderful organization for this society but not until such time as you people demand something more than what your representative can get for you to-day. The Canadian Horticultural Council was established for the purpose of helping horticulture in all its branches. Its branches extend to the canners, basket makers, etc., commercial bodies. You are the only body represented down there by one member. They send us a letter saying they have 85,000 members. You constitute 80,000 of that membership which they claim. You have one member on their board. If a resolution is proposed by that member, he seldom gets it seconded, because the institution is almost altogether commercial. There was only one circular which was of interest to this organization, and that was the one on shrubs, written by a gentleman in Nova Scotia, not a single item on the program last year that interested you. Now when we went before the minister in 1922 for a grant, the minister made it quite clear that his sympathy was with the amateur horticulturists, that the commercial men could very well look after their own, but he saw fit to make a grant of $8,000. That has been paid up to date, and now amounts to $64,000, and I can safely say that there has not been $3,000 of that money used in your interests. All of the legislation asked for in the last two years was for increased tariff, dumping duty, and all those things which affect only the commercial interests. When they go before the minister, or the government, it is always with that argument of 85,000 backing up their claim. That is not correct. You people constitute almost 80,000 -of those, the other 5,000 are commercial but they use you to accomplish their purpose of securing tariffs and other things horticulturally.
I would say that we would not be far astray if we demanded twelve representatives out of the twenty-one and I would say to the members if you want to get what is coming to you and to make this organization of any value, drop your membership this year, tell them what you want, and if they are willing to give it to you. They will, with their commercial men, be a strong deputation on increasing duties, with the new government, and your membership will be the agency in that, to force the government's hand.
As a result of this speech made by Mr. Carter and a motion introduced by Mr. Klos-terman, eighty thousand horticulturists of the province of Ontario decided to withdraw from membership in the Canadian Horticultural Council. To-day that council does not rep-

Supply-Agriculture-Fruit

resent the horticulturists of Canada but represents only the commercial men who come to Ottawa and conduct government lobbying for increased tariffs. I said before that the secretary of this organization has personally conducted active political lobbying within the very walls of this building, and I object to paying money for political purposes to any such organization. I therefore move, Mr. Chairman, the following amendment:
That item 109 in the estimates be reduced by $8,000 being the amount of the grant to the Canadian Horticultural Council.


Robert Weir: Mr. Chairman, I do not see how the Canadian Horticultural Council can be considered a political organization, on account of the very way in which the members of its executive are chosen. They are the people who year after year have appointed Mr. Burrows as their secretary. It may have been that in some matters they did not see eye to eye with the past government and I can assure the hon. member for Weyburn (Mr. Young) that since I took over the portfolio they have not seen eye to eye with me. If they did not feel that they should stand up for their owl opinions, even in contradiction or opposition to any opinions that I might have, I would not think they were worthy of any grants. If they agreed with me in all things they would be unworthy of anything, so far as their advice is concerned. Because they happen to disagree with one political party or another is no reason why we should consider them a political organization. From the very nature of their appointment I do not see how they could be political. In reply to the suggestion that the council is not representative of Ontario I would state that some of the most important officials in the Canadian Horticultural Council are residents of that province. As to the dissension in the ranks of the Ontario horticulturists I believe there was a very strong personal element involved.


William Richard Motherwell: Mr. Chairman, during the last three or four years it has been my misfortune to disagree with the hon. member for Weyburn (Mr. Young) not only on this matter but in regard to the National Dairy Council grant. I take much pleasure in supporting the minister in both these expenditures. Because I find myself disagreeing with him upon so many occasions I embrace every opportunity which presents itself to support him. With regard to this particular grant I would say that any government making a grant to such a worthy and important organization would not make it for the purpose of purchasing its silence on matters pertaining to

its own interest. Under those conditions they would never accept a grant. Naturally they have views regarding matters in which they are particularly interested, and they have thought for some time that their interest included some measures of tariff increase. They persevered in those views until the Dunning budget gave them some consideration and this government gave them much further consideration. This action would indicate that at least they were working along lines endorsed by public sentiment-that is, assuming that governments represent public sentiment. Surely we cannot assume that this important body representing the horticultural interests of Canada should be prevented from having views on tariffs because we extend to them a grant of $8,000. I think that would be a wrong attitude to take, and I for one would be opposed to it.
Before I sit down I have a question to ask. During the last year practically all the export apples of Canada have come under shipping point inspection. This inspection has been under consideration for many years. Five or six years ago British Columbia began such inspection for export and interprovincial trade and was followed by Ontario and Quebec. Last apple orchard harvest was the first occasion upon which inspection was carried out in the maritimes, and that action followed a commission carried out by the provincial government recommending that shipping point inspection be applied to the man-times forthwith. I wish to know with what success that practice met, and if there was any evidence of greater acceptability in the British market for maritime apples since shipping point inspection was introduced last fall.


The CHAIRMAN (Mr. Morand):: An
amendment has been moved by Mr. Young to item No. 109 Shall the amendment carry?


Edward James Young: In reply to the hon. member for Melville I would say that one of the few things I have against him is that while in office as minister he has taken vipers to his bosom in the form of the horticultural and dairy councils. These associations were nourished on public money and have become politically active. If it is justifiable to make a grant to the Canadian Horticultural Council to carry on political propaganda, and to urge their ideas in matters of increased tariffs, it is equally justifiable to give a similar grant to the Canadian Manufacturers' Association. What hon. member in this committee would justify such a grant to the last named association? Yet it is doing identically the same work as are the associations to which grants

Supply-Agriculture-Fruit
are given. If the action in respect to the horticultural and dairy councils can be justified, then similar action in respect to the Canadian Manufacturers' Association could be justified. The minister has said that he gives the Canadian Horticultural Council credit for standing up for their principles. Nobody denies that, but we do take exception to the expenditure of public moneys for the carrying on of political propaganda. Only the other day the members on this side of the house almost with one voice condemned the Minister of Trade and Commerce (Mr. Stevens) -for what? For talcing money out of the public treasury to spread protectionist propaganda. Having voted against the minister for doing that, how can they consistently vote for this $8,000 to the Canadian Horticultural Council ?


Robert James Manion: Would it have been all right if they had spread free trade propaganda?


Edward James Young: The consumers' league did not get a dollar from tlie government, and they did not ask for one. We have more right to a grant like this than those people have, because we have no axe to grind, we are working for the general good.


Some hon. MEMBERS:: Oh, oh.


Edward James Young: Hon. members are laughing because they do not understand. They cannot conceive of any organization working for the general good. All they can think of is some specific benefit being secured for some particular party or group. We cannot consistently support this vote since we voted against the Minister of Trade and Commerce for spending public money to spread protectionist propaganda in the newspapers.


Robert Weir: In reply to the hon. member for Melville (Mr. Motherwell)., the shipping point inspection in the maritimes has been very good, and it has very materially raised the price of their apples on the British market.


Armand Renaud La Vergne: (Air. Alorand): Those in favour of the amendment will please say "aye."


Some hon. MEMBERS:: Aye.


Raymond Ducharme Morand: Those opposed will please say "nay."


Some hon. MEMBERS:: Nay.


Raymond Ducharme Morand: I declare
the amendment lost.


Mr. McMILLAN (Huron):: No, sir, it is not lost. I endorse the words of the member for Weyburn (Mr. Young) to the letter, because I know that the secretary of this council travelled all over Canada m the interests of protectionist propaganda. He was right out to the Pacific coast, and when he came back he visited the Niagara district. I discussed the whole thing with him in my office. I also discussed it with the hon. ex-Minister of Agriculture (Mr. Motherwell). Before this government was in power I insisted that the item should be withdrawn, simply because the society was engaging in political propaganda. Those in control of the society have a perfect right, just as has any other organization, to conduct political propaganda at their own expense, but they have no right to conduct it on money voted from the treasury. For that reason I support the amendment which has been moved by my hon. friend from Weyburn.


Mr. GOTT:: Just a year ago to-day hon. members opposite heard it.
An hon. AIEMBER: Tell us what happened a year ago. ^


Eccles James Gott: The ex-AIinister of Agriculture mentioned the Dunning budget. I am going to give the house a piece of poetry on the Dunning budget. I do not want to hold up the item, but the other night the hon. member for South Huron (Mr. AIcMillan) gave us a piece of poetry that has been on record at least a dozen times in Hansard, and now I am going to give hon. members a poem that has never been on record before. It is entitled "The Wreck of the Hocus-Pocus." The subtitle is, The King-Dunning Pact.
Since this clay last July.
All the Grits wonder why
Premier King and his crew met defeat;
They have blamed the big crash,
On the lack of good hash,
That the unemployed needed to eat.
But these Grits just forget,
That the ocean is wet,
They are blind to the well-known rule; That though Barnum was right,
It is only at night
All the folks any party can fool.


An hon. MEMBER:: Are you talking on
the item?


Eccles James Gott: Yes; this is on the Dunning budget.
"We have cheapened your tea,"
Was a great Liberal plea,
"We have cancelled the 'Pullman-berth tax;' From the isle o'er the sea,
All your hay will come free,"
Was the gem of their infantile "cracks."
Supply-A griculture-Fruit

"Reduced rates of taxation We submit with elation,	,
For we know that you'll hardly surmise That with all these decreases How your tax-rate increases,
Just as fast as the dust in your eyes.
"Wheat, oats and 'cut-flowers,'
In your leisurely hours
You can smoke in a 'cast-iron pipe;
While for industries ailing,
We have nice 'country failing,' _ Tariff duties their life-blood to swipe.
It is just one year ago to-day, Mr. Chairman, that at this very moment there was considerable anxiety, and the people expressed their desire that the Conservative party should guide the destinies of this country for the next four years.


John Vallance: Mr. Chairman, after
listening to the oration by the hon. member for South Essex (Mr. Gott)-


An hon. MEMBER:: No more poetry.
Then that empire tirade With the flag well displayed,
To prevent us from using our reason;
Was considered by King,
As a mighty good thing.
Till our last "dairy-cow" shouted treason!
I presume this was the "dairy-cow" whose bellow in Marquette was heard from the Atlantic to the Pacific-the cow that produced the milk from which the cream came that produced the butter that caused the Liberal party to slide into the shades of opposition, where they are going to remain for many years to come. I will continue the poem, Mr. Chairman.


An hon. MEMBER:: Onions.
Mr. GOTT; Yes, I can give you a little piece of poetry on onions, too.
And of course with the knowledge That our chief learned in college,
When he raised up the "sales tax galore; He has taught you the system,
That though somehow you've missed them. With less shekels your wealth is now more.
Then the few unemployed Were no doubt overjoyed,	.
When they heard that the big-hearted chief Had decided, by gorry,
If they lived near a Tory
Not five cents would they get to buy beef.
Then with vivid description,
That old stand-by conscription He revived on the eve of the fight,
With fantastic pretension,
This King of dissension,
Warned Quebec of a war not in sight.
But these baseless deceptions,
And kindred conceptions	_	...
Were doomed to defeat ere their birth; When the people had voted,
Fremier King sadly noted
They had judged him for what he was worth.
From this wave-pounded wreck Bennett captured Quebec;
Good true union again as of old Shall guide Bennett's hand,
To reprosper this land
That our forefathers gave us to hold.
May God grant to this man,
Nearing life's given span,
True success in his greatest endeavour; Through his efforts sincere Bennett's name shall be dear To the heart of this nation forever.
(Mr. Gott.l


John Vallance: No, I do not intend to quote poetry-may I convey to him the sincere thanks of the opposition for a portion at least of what my hon. friends opposite tendered the Prime Minister at the banquet this evening. We are indebted to him for that portion of the banquet, for his remarks smack of nothing more than the banquet; what he said had nothing whatever to do with the item under discussion. I find myself, Mr. Chairman, in absolute agreement with the hon. member for Weyburn. I am opposed to this vote for the reasons he gave. I do not think it is in the public interest that any organization, I do not care under what name it travels, should expend public moneys to propagate and spread over the country whatever theories it may have regarding public policy.


Raymond Ducharme Morand: Shall the item carry?


William Richard Motherwell: No, Mr. Chairman. I feel strongly on this question. Naturally I would because I think it was under our administration that this grant to the horticultural council was first introduced. Reference has oeen made to lobbying around the buildings. My recollection is that the horticultural council's system of lobbying consisted of this: By appointment they met members. of the government in the railway committee room on a certain day; they met the former Prime Minister (Mr. Mackenzie King) the late Mr. Robb, the former Minister of National Revenue (Mr. Euler), your humble servant, and two or three other members of the government. Mr. Burrows, the secretary of the council, was there leading the horticultural interests with a large body of representative men from all over Canada. They must have been there at least an hour and a quarter making out their case before the government. Was there anything wrong in that? Nothing could have been more upright, nothing more honourable and fair. It is true Mr. Burrows made out as good a case as he could, but is that not what the council employed him for? I do not know that, from his standpoint, he went any further than he should, but I ha\e

Supply-Agriculture-Fruit
no doubt that he touched the low tariff susceptibilities of some of the people who listened to him. The very fact that both governments gave some consideration to those representations is an evidence that they were pedalling along the right lines, as I see it, and consequently they were not doing anything dishonourable or wrong at that time in making the .representations they did make in connection with the tariff.
I would much rather be supporting my hon. friends who hold the opposite view than be supporting the ministry, but on the other hand I am not going to refuse to support the ministry when their course is identical with the course I took a year ago.


Edward James Young: The explanation of the system of lobbying carried on by this body, as given by the hon. member for Melville, is not correct. It is true that this man Burrows, the secretary of that council, organized a deputation from all over Canada, which came to the government and presented its views in the railway committee room of this house, but what the hon. member for Melville does not know is that an active lobby was conducted in the corridors of this building in connection with individual members. Of course the ex-minister was not lobbied; they knew where he stood. It was those who took the other view who were lobbied. I know that to be so, and this man Burrows admitted it when I accused him. More than that, he openly boasted in this city that he hoped the United States would raise their tariff against us, because he said that was the only thing that would force the Liberal government to raise the tariff against the United States.


James Lorimer Ilsley: I should like to come back to the question with which I was dealing a few moments ago; I refer to the questions of cold storage and pre-cooling. In the part of Canada which I have the honour to represent the pre-cooling of fruit before it is sent to the market is receiving a great deal of attention, and I should like the minister tc say in a few words what the policy of his department is to be on the question of precooling and cold storage grants. I understood, from his answers a few moments ago, that during the present fiscal year the government does not propose to make any advances . except under the Cold Storage Act, and that all the advances in the list given were under that act. I should like to ba quite sure of that, because I understood that certain advances of government money were made, not under the act but by the department under some policy of its own, to certain applicants in certain parts of Canada. I know the matter has been before the minister and that he has given it a great deal of attention, and I should like him to say a few words to the committee-for the benefit of my constituents, I will admit, because I want them to know the policy of the government -as to what he intends to do in this matter of grants for pre-cooling and cold storage equipment for fruit particularly.


Robert Weir: The policy of the government is to give assistance, under the Cold Storage Act, to cold storage plants fruit and otherwise, which are open to receive public storage or which are operated by cooperative associations. All the grants we are making this year are under the Cold Storage Act, and as yet we have not received sufficient applications to take up the whole amount.


Thomas McMillan: Might I ask
the percentage of the grant?


Robert Weir: It is 15 per cent
the first year, 7 per cent the second year, 4 per cent the third year and 2 per cent the fourth year.


Thomas McMillan: Which amounts to about 30 per cent in all?


Robert Weir: Yes, roughly.


William Richard Motherwell: I think that brings out the information desired by my hon. friend from Hants-Kings. Under the Cold Storage Act the grants are governed by statute, and the money7 must be paid out as my hon. friend has indicated. In addition to that, however, under the old government we had a distinct policy which came under what we called the pre-cooling vote. Under that vote a grant was given amounting to practically the same percentage as the cold storage grant, but it was all paid at once. It makes a great deal of difference to the fruit men whether they get the money all at once or whether it is spread over three or four years. I know the vote was not large but it met a very urgent necessity, especially in those districts which were heavily in debt in connection with the construction of large packing plants. That was particularly so in the Okanagan valley some ten or twelve years ago. They got their money grant under this pre-ccoling vote all at once and equipped their packing plants with modem pre-cooling equipment beginning about the year 1923- the first of their kind in Canada.
Supply-A griculture-Fruit

I think my hon. friend the minister is making a mistake in departing from that policy. We usually had that vote included in the supplementary estimates, amounting to from $20,000 to $40,000. I see a long and very formidable looking list of individual payments in the supplementary estimates in connection with animals slaughtered outside the provisions of the Health of Animals Act, but they do not total very much. A vote of $40,000 or $50,000 would have meant a great deal in the establishment of pre-cooling plants in the various fruit districts of Canada. The supplementary estimates have been brought down, but we have heard of further supplementary estimates, and if the minister can get in his digs I would suggest that he include an item of about $30,000 for pre-cooling plants such as were suggested by the hon. member for Hants-Kings.


[Stage Direction]
Item agreed to.
For experiments in dehydration of fruits and vegetables, $20,000.
James J. Donnelly: I should like to know
what progress they are making with these experiments in the dehydration of fruits and vegetables.


Robert Weir: Experiments are
being carried on in Nova Scotia with the view of developing an apple cider free from the objections raised to apple cider in the past. It is hoped in that way to develop a market for the apples of Nova Scotia and to help the people learn the best apple for this particular use. We have there an arrangement with one of the cider pressing plants under which we carry on the experiments and provide the chemicals and some of the apparatus. The company does the bottling, buys the apples and puts the goods on the market. In Ontario We are carrying on somewhat similar work at Oakville and other plaices. In British Columbia also work is being done in connection with apricots, primes and so on, because we feel that while we have a market now for practically all those fruits produced in British Columbia, since large numbers of young orchards have been planted which will be bearing fruit in the near future, we must do all we can to put these people in a position to market their products through another channel and thus compete with outside interests.


[Stage Direction]
Item agreed to.
Progress reported.
At eleven o'clock the house adjourned without question put, pursuant to standing order.

Wednesday, July 29, 1931.