1931-07-30

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Eleventh report of the select standing committee on banking and commerce.-Mr. Matthews.
Mr. MATTHEWS moved that the report be concurred in.
Motion agreed to.

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(Questions answered orally are indicated by an asterisk).

Mr. PLCKEL:: 1.	In whose name and on what date was preemption entry made in respect to each of the following: (a) S.W. I section 13, township 33, range 20, W. 4th; (b) N.W. i section 13, township 33, range 20, W. 4th?
2.	Was patent ever issued on each of same, if not, why?
3.	What ultimate disposition was made of each parcel?


Mr. MURPHY:: 1.	(a) S.W. 1 13-33-20-W. 4th mer., preemption entry William J. Garland, 25th April, 1911; (b) N.W. i 13-33-20-W. 4th mer., preemption entry Edward J. Garland, 25th April, 1911.
2.	Patents not issued, entries having been abandoned and cancelled.
3.	S.W. 1 13-33-20-W. 4th mer., now included in ranch No. 15076 held under lease by Edward J. Garland.
N.W. i 13-33-20-W. 4th mer., now included in ranch No. 23352 held under lease by Edward J. Garland.


IMMIGRATION BY MONTHS
Mr. BOULANGER:: What is the number of immigrants who entered Canada during the months of May, June and July, 1931?


Mr. GORDON:: The immigration figures for the current month will not be available until some time in August. The following are the figures for May and June:
Ocean Ports
Prom
British Others U.S.A. Totals
May.	.	.	1,693	602	1,523	3,818June.	.	.	940	536	1,693	3,169Totals.	.	.	2,633	1,138	3,216	6,987
PRIVILEGE-Mr. DURANLEAU
On the orders of the day:


Hon. ALFRED DURANLEAU (Minister of Marine (Translation):: Mr. Speaker, I rise to a question of privilege. I beg leave to correct the statement I made, a few days ago, in connection with the harbour of Three Rivers and which appears in Hansard, on July 20, at page 4226 (English version) and at page 4178 (French version). I stated:
"This undertaking will give work to the unemployed, because much filling will be required to be done by labourers in Three Rivers, in the same way as it was earned out the previous winter. At that time, instead of utilizing the material dredged to do the filling, we had earth brought from outside the city limits, thus giving work to the people of Three Rivers. The cost was somewhat higher than that contracted for by the company, however, under the circumstances we thought it proper to have the work done in this way in order to help the unemployed."
I wish to say that this statement was meant for the harbour of Chicoutimi instead of that of Three Rivers.
Criminal Code

The error happened owing to the fact that, last autumn, the Commissions of the harbours of Three Rivers and Chicoutimi wished to come to an understanding with the contractors performing the work in order that the filling of the wharves under construction could be carried out independently and without utilizing the dredging material. An agreement was arrived at for Chicoutimi which benefited throughout last winter by such an arrangement. So far as Three Rivers is concerned, the matter is still being considered by the commissioners and contractors; however, I hope that within a few days, the latter will come to a satisfactory agreement by which the Three Rivers labourers may immediately benefit as in the case of Chicoutimi.


CIVIL SERVICE
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COMMENCEMENT AND CONTINUATION OF FOUR o'clock CLOSING
Mr. E. R. E. CHEVRIER (Ottawa):: If
the house prorogues on this coming Saturday, may I ask the right hon. the Prime Minister when the four o'clock closing in the civil service will be started, and after it is started, will it be continued through the month of September in compensation for the month of July?


Right Hon. R. B. BENNETT (Prime Minister) :: The matter is under consideration and I trust I may be able to make a statement to the house to-morrow. The present intention is that the four o'clock closing will end in August.


CRIMINAL CODE
Hon. HUGH GUTHRIE (Minister of Justice) moved:: That a message be sent to the Senate acquainting their honours that this house doth agree in all the amendments made by the Senate to Bill No. 113, an act to amend the criminal code except in regard to the amendment to clause (d) of section 2 of the original bill which in the opinion of this house is not a desirable amendment and is unnecessary, having regard to the fact that a prosecution under the section cannot take place under the added section without a fiat of the attorney general of the province concerned.
The amendments made by the Senate to this bill are all very formal with the exception of two. Their honours have seen fit to amend the bill by striking out altogether section 15, which provided that:
Any judge of a superior court of criminal jurisdiction or of the court of appeal, may, if it seems fit, on the application of the appellant admit the appellant to bail pending determination of his appeal.

The other section to which I call attention is the one in regard to the nude parades. The bill provided that:
For the purposes of this subsection anyone shall be deemed to be nude wrho is so scantily clad as to offend against public decency or order.
Their honours have struck out the words "offend against public decency or order" and have inserted the words "expose the genital organs." I do not think we should concur in that amendment, and I have framed my motion accordingly, that we concur in all the amendments save that.


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Motion agreed to.

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The house resumed from Wednesday, July 29, consideration of the motion of the Right Hon. R. B. Bennett (Prime Minister) that Mr. Speaker do now leave the chair for the house to resolve itself into committee of the whole on the following resolution:
That it is expedient to bring in a measure to confer certain powers upon the governor in council in respect to unemployment and farm relief; and for the maintenance of peace, order and good government in all parts of Canada; and to authorize the governor in council to expend for the said purposes out of the consolidated revenue fund such sums as may from time to time be necessary.
Mr. JOSEPH A. BRADETTE (North Timiskaming):	In the few remarks I made
before the adjournment last night I brought to the attention of the house some of the anomalies that existed with respect to the wages paid in certain sections of northern Ontario in connection with unemployment relief. I cited that whereas the wages paid in certain districts for road work under the unemployment relief fund were $2.80 per day, in my section the men were paid only $2.40 per day, or a difference of 40 cents less. I would ask the government to make up that deficiency to the people involved in my section.
I 'also made an appeal on behalf of single men for work under the Northern Development Branch, and I hope that in any new work undertaken in the northern sections of the province such anomalies as I mentioned will not exist. I proved that single men in large numbers in that section of the country have been penalized. I am now going to bring to the attention of the house a local or regional matter, and I hope that my genial friend from Parkdale (Mr. Spence)

Farm and Unemployment Relief
will not say, as he said the other day, that I should stand behind a wailing wall. This is a very important matter to northern Ontario, and more particularly to the town with which I am more familiar, that of Cochrane. We have in that section of the country a situation which I believe is not experienced in any other part of Canada. This applies to Kapuskasing, Porcupine district, Kirkland Lake district and most particularly to the town of Cochrane. That is the reason I believe it is my duty as a representative of that section of the country to bring to the attention of this house, as I brought it to the attention of the Prime Minister, the very acute and serious situation with which we have to contend in the town of Cochrane.
I hope the house will be indulgent for a few moments so that I may tell of this very important matter. Already the Prime Minister is familiar with the present situation, and after listening to me very carefully he has promised that in conjunction with the authorities of the province of Ontario he will provide a remedy. I want the house to realize that that statement was made nearly a month ago by the Prime Minister. So far, no relief has been given to the unemployed in Cochrane district. Hon. members will appreciate the gravity of the situation when they know that the population of that town is only 3,000, and that at present we have to take care of about 1.500 transient unemployed. For the last six months we have had to do that. The town of Cochrane and municipality is practically keeping and feeding that additional population, and has been doing so for the past six months. That is one of the reasons why we in that section of the country think w'e have done our duty and that the responsibility now rests wholly, if not with the provincial authorities, at least with the federal government.
I believe some hon. members will be interested to listen to a statement of conditions among the unemployed in that section of the country. They do not look to the municipal authorities, but blame, simply and solely, the federal authorities. That is why it is important for this government to listen to my outline of the situation so that as soon as possible remedies may be effected. Perhaps some hon. members will ask, "How is it you have such a great number of transients in your section of the country?" The answer is that geographically speaking we are in the centre of Canada. Owing to the fact that at the present time developments are 'being carried on at Coral rapids, necessitating the employment of hundreds of men, and that the railway is being extended to Moose
Factory, that section of the country has been advertised in the newspapers for two years, with the result that Cochrane and district has been a drawing card for unemployed. That explains why we have so many people coming from all parts of Canada. True, many of them are there only for a short time, but a great many remain permanently.
That is my justification for appealing to the federal authorities to help remedy a situation for which the town of Cochrane is not, in a way, responsible. The situation is becoming worse, from day to day. We very much regret that the Minister of Labour did not find it possible, on his way back from the west, to go through our section of the country. We are at a loss to understand why he travelled through the southern section of northern Ontario; we do not know the reason. We were hoping that he would find it possible to come to Cochrane, speak to the unemployed and learn the facts of the situation with which we are faced.
Only last week the premier of the province of Ontario visited northern Ontario, but for some reason unknown to us in the northern section of the province he did not find it possible to come to Cochrane district, or to the northern section.
Now, so that the house may fully realize the situation in Cochrane I shall read to hon. members some articles appearing in local newspapers. The Cochrane Northland Post in its columns gives the northern viewpoint of the situation. I am no sob-sister artist, but I believe it my duty to make known the conditions we are facing and to point out to the authorities that unless attention is given to the matter immediately trouble will result. Last week, during one of the unemployed parades, one of the provincial constables was hurt. I shall quote from the Northland Post of May 14, 1931:
There seems to be no limit to the number of unemployed that the town of Cochrane can harbour, from the appearance of the streets these days. Last Monday evening when the National pulled out of town, Railway street and Sixth avenue looked as though they were out to put Yonge street in the shade. It seems a pity that the citizens of the town are forced to either step off the sidewalk or else be jostled till their teeth rattle in order to get to and from work.
Several storekeepers have complained that the entrance to their places of business have become the stamping ground of the hundreds of unemployed that wre nave in town. Many of these unfortunate men seem to monopolize the sidewalk with a bovine like indifference, making it almost impossible for women with baby carriages, to say nothing of the decidedly coarse type of talk that is all too frequently heard.
It is hoped that work will be resumed up north soon, before a series of robberies breaks
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Farm, and Unemployment Relief
out, which is inevitable with the large number of men we have here with no means of eup-port. Already two or three have been reported.
Again, quoting from the Northland Post of June 12, 19-31, I find the following:
The unemployment situation in the north has now reached a stage where immediate action on the part of either, or both, provincial and federal government is absolutely imperative. During the past several months northern Ontario has been the mecca of literally thousands of unemployed drawn here by the overdone publicity given the construction work in progress. North Bay, Kirkland Lake, Timmins, Cochrane, Kapuskasing, all have the same story; of hundreds, even thousands, of men from all parts of Canada, arriving seeking work, where no work was to be had. These men are now stranded in these various centres with no chance of obtaining work, with little, if any money; the condition of many bordering on the desperate. These men have no_ claim, legal or moral, upon the municipalities, in which they are stranded. The municipalities in turn, absolutely cannot extend to these men relief of any kind whatsoever.
The situation at present is the most serious that has ever confronted the north. Though there is a large amount of unemployment throughout the country, that does not help to solve the problem in the north, wdiich by virtue of the unique conditions existing here, is much more acute than in the older and more densely populated sections. In referring to this allimportant question, wisdom and expediency preclude a reference to certain contingencies which will almost surely arise, unless action is taken in the very near future. There is a very real potential menace in the situation, recognized by many of the citizens, which cannot safely be ignored.
Now is the time for action, not when it is too late. Now is the time for statesmanship, not polities. The north is looking anxiously to the seats of government for action. More, it is demanding it, and it has the right to expect it.
On the 28th day of last month I spoke to between 700 and 900 unemployed in the town of Cochrane. I could see for myself that the situation was very serious. I promised those people that I would do everything within my power to bring matters to the attention of the house.
On July 1 the present Prime Minister told me he would get into communication with the premier of Ontario. So far, however, I am sorry to say that a solution of the problem has not been arrived at and there is more and more unemployment in the town of Cochrane. Only last week I gave the Prime Minister an article I had clipped from the Northland Post stating that a provincial constable had been assaulted and seriously wounded during a parade of the unemployed, and as a result was taken to the hospital. Again, the Prime Minister promised me he would do everything within his power to solve the difficulty. However, the problem is not

yet solved and as a result the town of Cochrane is, so to speak, divided into two camps, and the situation grows worse. The house will understand that for six months Cochrane has had from 1,000 to 1,500 transient unemployed. Following the assault upon the provincial constable we have the spectacle in that section of the country of the population being divided into two camps. The local population resent the action of the unemployed men, and assert that they had no right to assault the constable. On the other hand the unemployed take the opposite stand and claim that they have to eat and work.
The time is ripe to remedy the situation. A few days ago I read a report in a Toronto paper to the effect that the premier of Ontario, Mr. Henry, after making a tour of the northern section of the province had said that within two months work would be initiated on the trans-Canada highway. Two months will be too late. So far as I am concerned 1 wish to wash my hands of responsibility for anything which may happen in the future. Two months time will be too late to offer those men work so that they may get something to eat and put shelter over their heads. I make that appeal very sincerely to the right hon. Prime Minister, for the situation is so urgent that it must be dealt with immediately. I said a few minutes ago that on the 20th of June, when meeting a body of the unemployed, I came to the defence of the government. I told them that the government were trying to do everything within their power to remedy the situation, and that it was no time for playing politics. It was said at the meeting that some of the unemployed would break into private property and take what they wanted. I told those men that as citizens of this country they were entitled to food and clothing, but at the same time property owners were entitled to defend their property. The house will understand the seriousness of the situation in my constituency when the unemployed take the law into their own hands and break into houses to get food and clothing. I repeat the statement that I made to the unemployed on that occasion, that I have enough confidence in this government to feel that they will step right in and deal with this acute situation in the north, particularly in the town of Cochrane, and that within a week or two
1,000	or 1,500 men will be put to work. This grave situation must be dealt with not two month's hence or next winter, it must be dealt with immediately. As I have said, this question should be lifted out of politics. It may be parochial in some respects, but in

Farm and Unemployment Relief
others it is national. Hon. members ought to hear what some of the unemployed say. They put the blame for the present condition of affairs on the right hon. Prime Minister and this government, not on the local organizations, not on the premier of the province. Every spokesman for the unemployed put the blame solely on the right hon. Prime Minister. In order that the house may realize the seriousness of the situation and the urgency for remedial action, I am going to read an editorial which appeared in the Northland Post of Cochrane published on the 24th inst. It is as follows:
Little Improvement In The Unemployed Situation *
That the unemployed men receiving relief in Cochrane are transients has been amply born out during the past week. Each day numbers have left town, their places have been taken by others coming in from other points. Some idea of the way these men shift around can be gathered from the fact that as many as a hundred or more have been known to come to town on one train, while nearly as many have left at one time also. The number in receipt of relief, however, has remained fairly constant, from a low of about two hundred and eighty to over three hundred and fifty.
In addition to those in receipt of relief there is a large number of men who have not yet reached that stage in their finances, who are staying at the various rooming houses around town. Quite a number of these men are subsisting on only two, and in not a few cases, one meal a day, in order to husband their scanty savings. In some cases also, the boarding-house keepers have allowed men to run up accounts for both rooms and meals, though of course this is necessarily limited, as the proprietors of the boarding houses are not in a position to finance the men indefinitely. One such case was recently reported to have some three thousand dollars of book debts, but few of them could afford to let the figure run so high.
Many of the men coming here state that they were told to come here by the police and others in the town or city which they came from. This practice has quite evidently been followed in many of the places, and the fact that there i3 a construction job going on up north of Cochrane has aided these places in persuading the men to come here. One or two places have been particular offenders in this way and Cochrane's troubles at the present time arc due in no small measure to these two places, both of which are better able to take care of the men than is Cochrane.
The news of Premier Henry's proposed "Labour battalions" was received here last week with tempered enthusiasm. Most of the local citizens appear to be very much in favour of the idea, but feel that in the case of Cochrane, immediate steps should be taken by the government to remove these men from here, as there are no facilities for looking after them, and the problem is really none of the town's business. There is also a certain uneasiness that there will be a recurrence of the trouble which broke out a week ago last Monday, when Provincial Constable Crozier was injured. Though many individuals are convinced that
Buch will not be the case, this feeling is not shared by the majority and the uncertainty of the situation is having a very unsettling effect upon the community.
Since the trouble referred to, there is very little sympathy on the part of the townspeople generally for the men, resentment being general that they should come here uninvited from every part of Canada and repay kindness and good treatment in such a manner. The citizens of Cochrane are heartily fed up with the whole situation, and while willing to assume a just share of any burden shouldered by the country as a whole, they feel that the town has been imposed on long enough and that it has been called upon to harbour far too many in proportion to its population. There is an insistent demand on all sides for the removal of these men in the near future.
No definite date has so far been announced in regard to the formation of the labour battalions. One source has estimated it at about two months hence, which, if correct, will not be soon enough to relieve the local situation. It is likely, however, that it will be sooner than that, as the situation throughout the province is so serious that it will force the government to rush the arrangements. The announcement of the labour battalions brought forth protests from certain quarters, particularly in organized labour circles, but subsequent reassurances on the part of the government that the men would not be conscripted has done much to overcome this opposition. Regret is expressed here that Premier Henry was unable to pay a visit to this part of the north in addition to his visit to Sault Ste. Marie this week, as it is thought that a personal inspection of the local situation would have hastened governmental action here.
Some hon. MEMBERS:: Carried.


Mr. BRADETTE:: I beg to inform hon.
members opposite that if some of them would come up to my- section of the country tomorrow they would be ready to plead my case with the right hon. Prime Minister, Last session when we mentioned the unemployment situation no one on the other side was treating our appeal very seriously. I do not take up very much of the time of the house, and I interrupt very few hon. members on the other side. Let me extend this invitation to hon. members opposite: If by "carried" they mean that the situation which I have described will be remedied within the next week, I will take my seat at once. But I am not going back to my constituents until I can tell them that the situation will be remedied. I am speaking for t'he unemployed in Cochrane and district, and so distressing is their situation that I am positive that if my hon. friends opposite could be brought face to face with those unhappy people they would fight by my side for immediate remedial action. I am not talking politics; this question is bigger than politics; but this is the time and place to discuss such a matter, and I would be derelict in my duty as representative of the riding if I

Farm and Unemployment Relief
failed to bring this critical condition before the attention of the 'house. Let me quote the statement made by the spokesman for the Cochrane unemployed delegation which recently waited on the council:
"You kuow very good what we want," was the answer of the spokesman for the unemployed delegation which waited on the council on Wednesday evening, when acting Mayor Penny invited him to come up to the council table and tell the council what was wanted. The spokesman went on to say that many men were sleeping in barns, sheds and out of doors, that they had no shoes, no clothes and no work, and were, in fact, living like dogs.
Now, this is not to be laughed at; it is too serious for mirth.
Mr. Penny assured the delegation that the council were doing all in their power to get action from the government and pointed out that they had been successful in obtaining some measure of relief. The delegation, nine in number, were told that though the council would continue their efforts to place before the government the condition of the men, the town was incapable of furnishing shelter for such a large number. The delegation left the meeting after being assured that the council would put their case up to the government again and urge measures of relief. The delegation spoke to a resolution, passed at a meeting of the unemployed, held on July 15th, which was, in its way, a masterpiece of misrepresentation, protesting as it did against police violence.
I believe, Mr. Speaker, that I have made out my case. It 'is not my intention to delay the house for any length of time, for I know it is not popular for any member to make a long speech at this late stage of the session; but I would be lacking in my duty to my constituents if I did not make it a point to bring this unfortunate and critical situation to the attention of the house with all the force at my command, and to appeal to the right hon. Prime Minister and the government-and I believe he and his colleagues are sympathetic -that to remedy this situation something be done, and done immediately. Surely it is within the power of the government to send a wire bo the mayor of Cochrane that they are going to take care of the situation at once. I am no "sob sister" artist and I am sure that my genial friend from Parkdale (Mr. Spence) if he would visit my section of the country would come back and give me his heartiest support in the appeal that I am now making to the government. I know the right hon. Prime Minister realizes the seriousness of the situation and I assure him I am making my appeal very seriously.
Last summer we were told that if the unemployment situation became a national problem it would be dealt with in a national way. That meant that it would be dealt with by the central authority, which is this parlia-

ment and this government. And again I appeal to the right hon. Prime Minister that before tlie day is over he send a message to the mayor of Cochrane that he will relieve the present unemployment situation in that town and district. So far we have heard of only one case of violence by the unemployed, so far they have kept within the law, but you cannot argue with men who are hungry and destitute, and need food, shelter and clothing. That is why I believe that hon. members will agree with me that a message should be sent to that section of the country that the government will deal with the situation in such a way that the town of Cochrane will be relieved of further responsibility for meeting a condition which has 'been forced upon them and with which during the last six months they have been trying to cope. Every institution and individual in that town has been doing its duty, but the stage has been reached where it is absolutely impossible for the town of Cochrane to cope with the situation further. It will be impossible for me to go back to my constituency unless I have a message to deliver to the people that authority will be taken by the government to deal with the situation, and that it will be remedied, and remedied at once.


Mr. JEAN FRANCOIS POULIOT (Temis-couata):: Mr. Speaker, I wish to refer briefly
to two statements made by my right hon. friend the Prime Minister, the most astounding and the most timely statements he has made during the last thirteen months. His most astounding statement was, "I will end unemployment," made in Moncton during the last campaign; his most timely statement was made before a large audience of unemployed in Calgary, to the effect that it was the intention of this government to study the causes of unemployment. That is the first thing that should have been done. I remember very well that after the last election a committee was formed to inquire into that question, and one of the recommendations brought in was that immigration should be stopped. That recommendation has not been carried out; immigrants may still enter the country, and the government have only ceased advertising in order to bring them here.
It is most important, Mr. Speaker, that we get to the root of the evil in order to cure it, and I am very much surprised that there has been no meeting of the committee on industrial and international relations this session to study that question, which is of such great importance not only to Canada but to all the countries of the world. It is

Farm and Unemployment Relief
late, Mr. Speaker; the session is about to close, and we have now a resolution before us in connection with which I congratulate the government. They seem to be in earnest in trying to do something to relieve unemployment, but this is only a palliative. This will not cure the evil at all; it is like putting a plaster on a wooden leg. I think it is time for the government to appoint a commission composed of technicians, university and labour men and others of wide experience to study the question in all its details and make appropriate suggestions. Last fall and this spring, before the Minister of Labour undertook his trip to the west he said unemployment was diminishing all the time and that conditions were getting better. When he went to the west, with adding machines with which to count the number of unemployed, he was startled; he was astonished; he was dumbfounded, and he returned to tell the government what he had seen.
Conditions are very bad in the west; they are very bad in the east also, because the farmers cannot sell their products and the lumber industries are not doing the business they did previously. What is the reason? Is it because the people who have some money are discouraged and are keeping that money in the banks or in their pockets instead of spending it in improvements? They may be waiting for better times, so in that respect I think the Minister of Trade and Commerce (Mr. Stevens) was doing the right thing when he preached hope for the future. But do we not all remember the campaign which followed the Winnipeg convention of 1927, during which hon. gentlemen opposite went about saying the country was in bad shape, when that was not true?
Following that people began to make money in the stock market; some people were getting rich, and others tried to do the same thing. Many people with small incomes put all their savings in the stock market, and everyone knows what happened. Some brokers were really thieves; they advertised certain stocks, saying they were good and were going up, in order to sell them. Then what happened? Those stocks came down; people lost their money, which was concentrated under the control of a few people. Those brokers became rich within a very short time by stealing money from people who had invested their small savings in securities of every kind. So I would make one suggestion:	In order to provide money
for unemployment relief works in this country would it not be fair to confiscate say three-quarters of the enormous gains made 22110-275
unlawfully by those brokers? That would be a step to which no one in this country except themselves would object; it would be only retribution for the evil done by those men.
That is one suggestion I desire to make; the other I made in beginning my speech. I believe the government are sincere in trying to relieve unemployment, and I ask them to be practical by going to the root of the evil and ascertaining the first causes of it. The matter has been studied by the League of Nations and by the keenest minds of Europe and America. Now it is time for this country to make a thorough inquiry into the question of unemployment in order to cure the evil and prevent it from happening again in the future.
Motion agreed to on division and the house went into committee, Mr. Tummon in the chair.


Mr. HEENAN:: I am anxious that the
Prime Minister should introduce the bill at the earliest possible moment, so I will not delay the house at this stage but will reserve my remarks for the second reading of the bill. However, I do wish in all sincerity to make one appeal to. the Prime Minister; I appeal to him to eliminate from his resolution and from the bill any reference to the maintenance of law and order, coupled with unemployment relief.
I make this appeal because I have knowledge of the labour men of Canada. I know they are a sane body of men; I know that during the inactivity of governments in providing for unemployment relief, the working men of 'Canada have shared their work, their number of days of employment, with those who were less fortunate. If the Prime Minister will reconsider it he will realize that there are sufficient laws on the statute books to-day to cope with any situation. But to couple with a bill providing for unemployment relief a provision with regard to the maintenance of law and order will not, I think, be taken in the right spirit. I appeal to the Prime Minister to eliminate that feature from the legislation.


Mr. MACKENZIE KING:: Ordinarily we
of the opposition would be inclined in committee to emphasize anew the points that were raised in the discussion of the resolution. But we realize that the house is anxious to conclude the business of the session and that, no matter what we may say, hon. gentlemen opposite have a majority, which enables them to do as they please. If, therefore, the Prime Minister is determined to pass the measure in its present form our discussion at this stage



Farm and Unemployment Relief
would possibly be regarded only as in the nature of obstruction. Nothing is further from our minds than a desire to obstruct in any way the granting of relief for unemployment and rural distress, and in view of these circumstances, having expressed our views on the main motion, we do not intend to discuss the resolution in committee.
Resolution reported, read the second time and concurred in. Mr. Bennett thereupon moved for leave to introduce Bill No. 142, to confer certain powers upon the governor in council in respect to unemployment and farm relief, and the maintenance of peace, order and good government in Canada.
Motion agreed to and bill read the first time.


Mr. SPEAKER:: When shall the bill be
read the second time?


Richard Bedford Bennett: With the consent of the house it might now be read the second time, and when the house is in committee on the bill my hon. friend from Kenora-Rainy River (Mr. Heenan) can make his observations and I shall be glad to answer any questions he may ask.


William Lyon Mackenzie King: The Prime Minister is not going to move the second reading now?


Richard Bedford Bennett: I was going to.


William Lyon Mackenzie King: If my right hon. friend would not press that we should be obliged. I should like to see the bill before the second reading. Possibly it would be better to delay the second reading.


Richard Bedford Bennett: In view of the lengthy discussion we had yesterday I had thought that, with the consent of the house, we might proceed now. However, the right hon. gentleman having expressed a desire to look over the terms of the bill, it will have to stand, because we can proceed only by consent. I had intended to dispose of this matter before going on with the report of the Beauhamois committee. In the circumstances, perhaps we had better take supply until later in the day. The minister who is to make the motion in that matter requested me not to proceed this afternoon. He says he will try to go on this evening if possible.


William Lyon Mackenzie King: I would agree to go on immediately with the second reading of the bill were it not that it is possible we may wish to move an amendment on the second reading. This we cannot even consider
IMr. Mackenzie King.]
without seeing the bill itself. If the house were to proceed with supply now, this evening we might go on with the other subject.


Richard Bedford Bennett: So that my hon. friends,
when studying the bill, will be acquainted with its terms, I may say that we propose to add in the preamble the words, "so far as the legislative authority of parliament extends." That will make it clear that there is no endeavour to take from the provinces their powers, as suggested yesterday by an hon. gentleman. These are the words mentioned in one of the judicial decisions to which I had reference to-day. The bill itself expires on March 31, 1932, which I did not mention yesterday.	[DOT]


EXTERNAL AFFAIRS
[Stage Direction]
The house in committee of supply, Mr. Tummon in the chair.
London-salaries and expenses of the office of the High Commissioner for Canada, notwithstanding anything to the contrary in the Civil Service Act, or any of its amendments, including $2,000 additional salary for the High Commissioner to that authorized by chap. 92, R.S.C., $132,260.
William Lyon Mackenzie King: Has my right hon. friend any figures which will indicate the allowances made in addition to the salary paid in connection with the London office?


Richard Bedford Bennett: There is an increase of $16,000 in the allowances.


William Lyon Mackenzie King: How is that increase made up?


Richard Bedford Bennett: The living and entertaining allowances are increased by $16,000.


William Lyon Mackenzie King: In connection with Washington, Paris and Tokyo, there are allowances made for house accommodation, and then there is something additional for other purposes. I would like to know if the London office is to be made to correspond with the other offices in these particulars. For example, what are the house allowances?


Richard Bedford Bennett: As my right hon. friend
knows, there is no residence at London such as there is at Washington. Having regard to the demands made upon the High Commissioner, the allowances made contemplate large individual resources. Studying the matter from every angle I am bound to say that I know of no other way by which the situation could be met except by increasing the allowances by at least $16,000. I think if justice were done the increase would be somewhat

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larger because the demands at London are more than they are at any other point where we maintain representation. The amount has been increased from $25,000 to $40,000 and I fancy my right hon. friend will agree with me that that is a lesser sum than will be required for that purpose. The salary is $12,000; living allowance, $5,000; allowance in lieu of house and furnishings, $5,000, and then a car allowance which has been paid for some years.


Mr. LAPOINTE:: Will my right hon. friend advise the committee whether festivities such as the dinner held on Dominion day are paid for by the people of Canada or by the High Commissioner? My right hon. friend will realize that it would be rather hard for those Canadians who are abused on these occasions by the High Commissioner because their views do not coincide with his to have to pay this cost.


Richard Bedford Bennett: I think my hon. friend is putting too constrained a construction upon the observations to which he directed attention the other day. I do not think there was any intention to abuse him or anyone else who entertains views at variance with those entertained by the High Commissioner. The High Commissioner is now en route on the sea, but as soon as an opportunity presents itself I shall make inquiries and then communicate with my hon. friend. These jocular observations which are made sometimes are seized upon by the press and we receive only the report of what has been said. I feel quite certain that no reflection was intended. I have found myself presiding at a meeting of the Canadian Bar Association, and in such capacity introducing my hon. friend, I have made some jocular observations as to our variance of views and I would be sorry to think that those remarks represented the considered views of the association of which I at the moment happened to be the head. I have no information as to what happened in London, but my information is that at such gatherings tickets are first bought and paid for.


Ernest Lapointe: That would be new.


Richard Bedford Bennett: I do not know of any place from which I could obtain this information, but the moment it is obtained my hon. friend will be advised.


Ernest Lapointe: I do not think I am over hyper-sensitive or that I have an exaggerated sense of my own dignity, but I
22110-275J
will admit that it is rather unpleasant to have our own representative in the centre of the empire refer to those who think otherwise than he does as men of low calibre. I read that in the official report of his speech, and there is no joke in that.


[Stage Direction]
Item agreed to.
Washington-representation, including salaries and allowances for minister plenipotentiary, secretaries and staff, notwithstanding anything to the contrary in the Civil Service Act, or any of its amendments, $100,000.
Richard Bedford Bennett: There is no change in
this item.


William Lyon Mackenzie King: My right hon. friend says that there is no change in this item. I am anxious to ascertain if there is any change in his point of view with respect to the legation at Washington. At the time the legation was opened, my right hon. friend may recall that he was somewhat critical of the establishment of legations by the government of Canada. Speaking in this house on April 13, 1927, as reported in Hansard, page 2472, my right hon. friend said:
I am wholly opposed to the establishment of this embassy at Washington. It is but the doctrine of separation, it is but the evidence in many minds of the end of our connection with the empire. For that is what it means. It means nothing else ultimately, because if we are a sovereign state we cannot belong to the British Empire.
I would ask my right hon. friend when he replies to say whether he still believes the legation at Washington and the underlying policy represent a doctrine of separation, and if the legation continues to be an evidence of the end of our connection with the empire. That view of my right hon. friend was expressed in 1927. In 1928 he seemed still to entertain the same view because in speaking at the Toronto Business Men's Conservative Club as reported in the Mail and Empire of June 15, 1928, my right hon. friend said:
I had hoped in my younger days, and I have not entirely lost my hope yet, that in maintaining the unity and solidarity of this commonwealth of nations we call the British Empire, we might attach Canadians, Australians, New Zealanders to the embassies abroad of the empire. It may come that some Canadian may be ambassador of the British Empire-just as much to be achieved by his ambition as if born within sound of Bow Bells.
I see no reason why that hope should be disturbed to-day. I see no reason why we should have separate embassies and legations, but rather embassies and legations should be of the united empire, and every part of the empire might find representation there when the moment of peril came, and they could speak with one voice, without divided authority.
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That represents an attitude somewhat different from that on which this particular appropriation is founded. I should like my right hon. friend to say whether here also he has modified his views.
Then speaking at Oshawa on July 22, 1928, my right hon. friend, criticizing myself as the head of an administration which had opened the legation at Washington, is reported in the Ottawa Morning Journal of July 23, 1928, as follows:
What port is Mr. King bound for? Mr. Bennett asked, referring to recent declarations by the premier of Canada's equal status in the British Empire, and the establishment of embassies in foreign countries.
If he wants to make this an independent country, let him say so. Let us have a well-defined expression from Premier King as to where he is heading, what his chart is and what his port.
That is the report of his speech as it appeared in the Ottawa Morning Journal of July 23, 1928. It contains the same underlying idea that the legation at Washington was making for separation.
May I give one further quotation? I have innumerable quotations from his speeches on this subject, but I think these will be sufficient to indicate what his previous critical attitude was. Speaking at Halifax, on July 26, as reported in the Halifax Chronicle of July 27, 1928, my right hon. friend said:
What is meant by this talk of equality of status? Mr. Bennett asked. What do all these legations mean? There can't be two kings. This may not mean what it seems and it may seem what it is, but it serves to make this country an independent nation. I say, for myself and for the Conservative party, that we in Canada are not prepared as yet to separate our allegiance to the British Empire. If Mr. King is sincere he will answer this question: What port are you bound for?
If we are to be independent, Mr. Bennett said in conclusion, Mr. King should let us know, that the people might have a say before it is too late.
Just in order that I may not take up further time by referring to this subject after my right hon. friend replies, unless he says something that occasions a reply, may I in substantiation of the point of view taken by the Liberal administration when these legations were opened, give him the words of his own representative whom he has appointed as minister to Washington, at the time of presenting his letter of credence to the President of the United States. The letter of credence was presented along with a letter of recall of the previous minister on June 23rd of this year. In the letter of credence the minister set forth, and I assume that he was voicing the opinion of my right

hon. friend, his views as to what the legation had really meant in the course of the time it had been in existence, and he was quite explicit in saying that the legation had not only served a very useful purpose to Canada but that it had served, if anything, to bring the whole British Empire closer together. That is the fruit of experience as it is expressed in the words of my right hon. friend's minister to Washington on June 23 of this year. I quote from the Ottawa Morning Citizen of June 24, 1931, a despatch from Washington, D.C., dated June 23, It says:
The minister

	-
That is the present minister to Washington:
-expressed to the president the conviction that the establishment of diplomatic relations had assisted in promoting the harmonious relations existing between Canada and the United States and the empire of which Canada formed a part.
Major Herridge's address is set out at length, and I have in my hand the words which appear in the address as presented to the president. I have no doubt that my right hon. friend saw this address before it was presented. I assume that he would be familiar with the words of it. At any rate, the minister was representing the government and was speaking for the government of Canada and for my right hon. friend in particular. I think my right hon. friend will admit that. The address in part reads as follows:
It is the earnest wish of His Majesty's government in Canada that the harmonious relations which have long prevailed between the United States and Canada shall be maintained and strengthened. Mr. Massey in Washington expressed the confident hope that the establishment of a Canadian legation in Washington would serve to strengthen those cordial sentiments which exist between Canada and the United States as well as between the United States and the empire of which Canada is a part. I feel that I can say with conviction that this hope has been fulfilled during the four years which have passed since direct diplomatic relations were established between the United States and Canada.
Nothing could be more gratifying than that, I am sure, to the administration which established the legation and appointed Mr. Massey as minister to Washington, as well as with respect to the manner in which Mr. Massey discharged his duties as minister to Washington. The president of the United States in replying used the following words:
You have likewise delivered to me the letters of recall of your distinguished predecessor, the Hon. Y'ineent Massey, whose residence in this capital as the first minister of the Dominion government to this country is most happily remembered.

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A little further on the president said:
I share your conviction that the establishment of direct diplomatic relations between Canada and the United States has served to strengthen the cordial sentiments which exist between our countries as well as between the United States and the empire of which Canada is a part.
There we have two entirely different points of view. The point of view of the Liberal administration which established the legations was that these legations would make for better relations between Canada and the countries to which the ministers were sent, and that they would also be a factor in making for closer relations between the British Empire as a whole and these countries. We took that view; it was in that belief we established legations. My hon. friend, as leader of the opposition at the time, criticized our action and said he believed it would lead to separation. After three or four years of the existence of the legations, however, my right hon. friend sends his own minister to Washington with a letter to the president. In that communication there is stated, in as concise and emphatic language as coidd be used in a diplomtic communication, the fact that the legation has made and is making for closer relations not only between Canada and the United States but between Canada and the British Empire as a whole.
Perhaps my right hon. friend will tell us frankly whether the views of his minister as expressed in his communication are my right hon. friend's views to-day, and if so, whether as a consequence of necessity he has altered his opinion as given at a time when he was so critical of these legations.


Richard Bedford Bennett: There is no difficulty in answering the questions of my right hon. friend. In the first place the word used was not "relations'. The words are "cordial sentiments". The words which His Majesty's newly appointed Minister for Canada used were
Mr. Massey, in presenting his credentials in 1927 as the first Canadian Minister in Washington, expressed the confident hope that the establishment of a Canadian legation in Washington would serve to strengthen those cordial sentiments which exist between Canada and the United States as well as between the United States and the empire of which Canada is a part.


William Lyon Mackenzie King: Did I use the word "relations"?


Richard Bedford Bennett: Yes, at the close of your remarks I believe you used the word twice. To continue the letter:
I feel that I can say with conviction that this hope has been fulfilled during the four years which have passed since direct diplomatic relation? were established between the United States and Canada.


William Lyon Mackenzie King: I did not misquote.


Richard Bedford Bennett: No, the quotation was
read accurately, but when the right hon. gentleman was speaking from memory at the end of his remarks he used the word "relations" instead of "sentiments," which T regard as a very essential difference. The cordial relations existing between the two countries have undoubtedly been strengthened by reason of the circumstances to which the right hon gentleman refers, and in his reply the president suggested that that was so. I repeat that the conduct of a legation in any part of the world on behalf of this Dominion will be successful along the lines I discussed in the years 1927 and 1928 only after the experiment had been tried for a long time. What the ultimate effect may be of the assertion in strange countries of sovereignty which you do not possess, and of a position which we cannot in any sense occupy, unless we change our relations to the motherland and to other parts of the British Empire, is a matter which will not be settled in a single day, a single year, five years or ten years. The stream of history flows slowly; its volume increases as the years pass, and it is fed by many little incidents that at the moment seem small but in the end constitute and make up its volume.
So far as I am concerned I did not view with approval the establishment of legations in foreign countries on behalf of the Dominion. I rather believed the doctrine of Sir Robert Borden in the first instance was a sound one, namely, that we should have our legation in the same premises as the British embassy, and that the solidarity of our empire should be proclaimed to all the world by the fact that we are all together. I believe that that was a perfectly sound experiment, and I so expressed myself on several occasions. But I certainly did not,-as I understood and still understand what is meant by representation by a minister in a foreign country,- believe that you could continue it without bringing about the inevitable result unless you changed entirely your attitude of mind towards the use to which the legation was put. I think it is now abundantly clear, from the observations that have been made publicly and otherwise by our minister at Tokyo, that the legation in that place is an adjunct to our commercial activities, and permits him, by reason of his diplomatic position, to have audience-if I may use that term, which I believe would be the proper one under the circumstances-with the authorities of another country, more readily and more expeditiously than coidd be hoped for if he did not occupy
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that position. Hence it is that the reports of that distinguished Canadian are so filled *with references to commercial matters, and the concern he has manifested for the expansion of trade and the attendant advantages upon our commercial position by better understanding in foreign countries.
With respeict to Washington I believe the extension of the use and utility of the office in that city will depend upon the extent to which the incumbent of the office makes himself familiar with the commercial as well as the other problems which have to be dealt with between the two countries. It will be recalled that only a short time ago the President of the United States invited foreign communities, if they so desired, to present their positions before the tariff board he set up. In that sense there is no doubt that any minister representing this Dominion could, if he had the desire, and the inclination to interest himself in commercial matters affecting the welfare of this country in its relations with the great republic, be of inestimable service, and more so by reason of the particular position which is accorded to the diplomatic representatives of countries in foreign capitals.
I have never made a statement that indicates that I have not a clear appreciation of the distinction which must be draiwn between the position which a minister representing this country must hold in foreign countries, if he interests himself in trade and commerce, as distinguished from the problems of pure diplomacy. On problems of pure diplomacy I have not changed my view, that if we are to speak with any degree of strength or power we must at least have some common purpose in our foreign policy. I need hardly remind my right hon. friend that not since 1900 has an Imperial conference been held at which the question of foreign policy has not engaged the attention of delegates. The extent to which foreign policy can be promoted by the maintenance of diplomatic representatives in foreign capitals who are not working out their diplomatic difficulties in accord with the other representatives of the British Empire, whether they be representatives of Great Britain, South Africa or Australia, is a matter which is still in the lap of the gods. While approving of a representative of each country finding a diplomatic home in Washington, the most eminent of British statesmen have indicated what every thoughtful man realizes is the real problem yet to be settled: Can the empire survive if it has six representatives in a given community following different courses with respect to a matter of concern between the capital in which they find their homes, and their several countries? The problem is

not yet solved, and the difficulties are not yet resolved. Still the problems remain and the difficulties are with us.
I am hopeful that as days go by, as the attitude of man towards peace is improved, and as recourse to arbitration and peaceful methods of settlement are changed from time to time, we will not have any reason to regret the action we have taken. I need hardly remind my right hon. friend however that standing in this very place within the last fifteen or eighteen months-yes, only that long ago -he expressed grievous concern as to the safety of this Dominion by reason of commercial relations which existed between this country and the United States with respect to one commodity, and expressed the view that he could not assume responsibility for the position which would be created. Under those circumstances I think he will readily agree with me that the ultimate determination of the value which attaches to the experiment we are making cannot to-day be apprised; it cannot be done. I have expressed my views with respect to it and given my reasons for it.
Like all other heads of parties who succeed to a position as distinguished from an idea, who have to deal with a concrete situation and not with a mere academic problem; we found these legations, and we will maintain them to the very best of our ability; we will support in every possible way their usefulness, hoping that as the days go by a clearer appreciation of their value in the field of commercial activities may make their maintenance more desirable and more justifiable. For if you consider them and weigh them in the pure realm of diplomatic usefulness, you will find it extremely difficult to justify some portion of the expenditures incurred. But from the larger standpoint of commercial advantages to the community, I think, weighing the value and the cost against the results and benefits, it will be found that the results and benefits outweigh the cost.


William Lyon Mackenzie King: I have done
my utmost, Mr. Chairman, to follow my right hon. friend in 'his reply, but I must say that his speech seems to me to be best described by the simile of a stream which he himself used. It was, however, a meandering stream, and it was not too clear a stream. I did try to follow him from Washington to Tokyo then over to the Imperial conferences in London, then to appreciate his digression on commercial relations and finally his reference to what I understood to be the liquor traffic. Altogether, I must say that I do not yet feel quite sure as to what in his heart of

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hearts my right hon. friend really feels and believes. He has spoken about the "stream of history" and the inflences that affect its course. May I say to him that he is in the middle of that stream at the present time, and it is his wand that turns the stream in one direction or the other so far as Canada is concerned. In the matter of legations he has been most emphatic as to the roads to the right and to the left. He has said that these legations mean independence, if we were to have legations that stand for Canada as possessing equal status with other parts of the empire, and that the only salvation in the long run for the empire as well as for Canada was not legations such as we have to-day, which represent the individuality of this Dominion, but some composite diplomatic organization to which the Canadian representative would be attached as a sort of glorified commercial attache. That, I think, is about the substance of the difference of the two points of view. Let me say to my right hon. friend that he cannot escape his responsibility by any amount of philosophizing-perhaps casuistry would be too strong a word, but it seems to me to be fitting in the circumstances. He to-day is responsible for the maintenance of the legation at Washington, which is expressive of the equality of status which this Dominion enjoys with the other self-governing parts of the British Empire, includuing Great Britain itself. If the maintenance of a legation of this character means in the end separation, or the risk of separation, he must now bear the responsibility for helping to direct this country along that course. He has it within his power to abolish the legation, to change its complexion if he likes, and if he does not do that, then he must be responsible for the consequences, not only so far as this Dominion is concerned but the empire as well, if the whole structure unfortunately collapses!


Mr. BOURASSA:: I think the right hon. leader of the opposition is unduly cruel to the right hon. leader of the government in this matter. He ought to rest modestly content with the fashion in which his successor is following his policy. I think that is the best possible commendation of his idea. There is a point which leaders of parties should not overstep in declaring their victories over their opponents in this matter as well as in the matter of interimperial relations. In this respect at least, I think the present government should be congratulated on the very frank manner in which they have stepped into the shoes of their predecessors and maintained all that has -been gained and madle the best of it. The right hon. leader of the
opposition has used the metaphor of the leader of the government being, I will not say King Log, but in the midst oif the stream and going either to the right or to the left. I think that most leaders of governments, whether they like it or not, once they are launched in the midst of the stream follow the current; they may seem to go one way or the other, but if the current corresponds really to the trend of public opinion they have to follow it.
But I did not rise with the idea of trying to restore harmony between the two right hon. gentlemen. I simply wanted to give an example in the history of our relations with the United States which shows the practical advantage to be derived from the establishment of direct relations. The right hon. leader of the government has endeavoured to minimize the importance of foreign relations, especially in Washington, to the level of commercial relations. Of course, I admit that commercial relations are very important, but as between two countries situated as the United States and Canada are I think the commercial interests of each country can be largely relied upon to establish relations between the two countries without much interference on the part of governments. But apart from those commercial relations, and apart also from those great questions of international concern to which the Prime Minister has referred, and upon which, I admit, so long as we are united with Great Britain there must be at least some conversations-ito use the diplomatic expression- before any action is taken in common or separately as between the representatives of Great Britain and Canada and the other dominions, there are also questions of a semi-diplomatic character, which are far better treated, I think, by men representing directly their respective countries. Here is an instance. Long before the question of the boundary between British Columbia and Alaska had become acute, the Americans had created trading establishments along the coast of the Pacific ocean. The British interests were represented by the Hudson's Bay Company. The Hudson's Bay Company established trading posts along the shore-some even in the state of Oregon, which they had to abandon after the boundary was established on the 49th parallel; they had a few also on Vancouver island and on the main coast. After the United States had purchased Alaska from Russia, naturally the activity of American fishermen and traders increased, and there was a time when they came in contact with representatives of the Hudson's Bay Company, until one day a surveyor sent by the Interior department in
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Canada became very much embarrassed to find where the boundary lay between Canadian territory and American territory. If I remember rightly, it was Mr. Dennis, who established a very fine reputation in the Interior department in the surveying of the western territory. He wrote to Ottawa to obtain instructions. This was during the summer time, and the Minister of the Interior sent a despatch to Sir John Macdonald, who was spending the summer at Riviere du Loup. Sir John Macdonald sent the letter to our representative in London, Sir Charles Tupper, who took the letter to the colonial secretary. After a couple of weeks the colonial secretary passed the letter over to the foreign secretary, who wrote the English embassy in Washington. At that time the English embassy was somewhat upset, because that was the summer when the English ambassador, Sir Lionel Sackville-West, had got into difficulty with the American government in connection with the presidential election, and to use a colloquial expression he was in the process of being sacked out of the country at the request of the American secretary of state. Naturally that took up some of the time of that gentleman before he could reply. Finally the reply of the secretary of state was sent to the foreign secretary, who handed it to the colonial secretary, who sent it to the Governor General in Ottawa, who handed it to Sir John A. Macdonald.
To put it shortly, after four months the department in Ottawa was informed that the secretary of state in Washington had no knowledge that any American citizen had encroached upon Canadian territory. In order to show how correspondence of that nature deleted the facts, let me say this: The report of Mr. Denis gave all the data, the names of the parties in conflict, the exact situation of the property and everything, but through this exchange of letters it came to this: Sir Lionel Sackville-West or his representative, the charge d'affaires, inquired of the Department of the Secretary of State if they had information that any American citizen had been encroaching upon the property of any Canadian citizen, to which naturally they replied they had no such knowledge. Here is a concrete example of the situation which existed between the two countries so long as we had to maintain our relations through that process of correspondence. Direct relations between Ottawa and Washington would have elicited the information in from eight to fifteen days.
What was the consequence? When the question was taken up by the Anglo-American commission in 18S8-I happen to know the

facts because I was one of the secretaries of that commission-that was the one instance in which Canada could have pleaded proof that we had placed a claim for possession of a portion of that strip of land extending south from Alaska along British Columbia. That was the one instance in which we could have demonstrated that we had already put in a claim for ownership, but through that absurd process of correspondence from Ottawa to London, from London to Washington and back the same way, these facts were entirely deleted of all their force and it was impossible to maintain them as against the series of counter-facts established by the United States government.
I quote that as an example to show that the establishment of direct relations between Ottawa and Washington is perhaps the most practical move we have made in that direction in the last twenty years. Between two countries such as the United States and Canada I firmly believe, and experience has shown, that direct relations are the best means of avoiding difficulties, misapprehensions and misconceptions of fact. The establishment of the International Joint Commission is another case. How many difficulties with regard to the navigation of the great lakes and the St. Lawrence would have arisen if those matters had been treated in the old-fashioned, indirect way through the British embassy?
Reference has been made to those expressions of opinion contained in the remarks of our present minister to Washington and of the President of the United States. I will go further and say that the British government felt greatly relieved when we established these relations. One of the English ambassadors stated in public that of all the affairs with which he had to deal during his occupancy of the position of British ambassador at Washington, at least half came from Canada. He did not say that in any grudging way at all, but anyone who has had any relations with English diplomats, or with diplomats of any other country, knows that they do not care to have more to do than they are obliged to do. We all know that the position of English ambassador at Washington is one of the most important in the world, and the idea that the representative of the British government in Washington should be obliged to deal with all those small matters, semipolitical, semi-diplomatic and semi-commercial, which arise every day between Canada and the United States, was absurd. The idea that a diplomat of the first rank, who is primarily concerned with the great problems of British policy the world over, should be

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obliged to pass a great deal of his time in dealing with such questions is unjust to the British government, I claim, and to the British ambassador. Therefore I say we have done a service not only to ourselves but to the British government through the establishment of that legation. They have enough of their own difficulties and problems with which to deal without our loading more on them. This was one of the most practical manifestations we could give of our friendship for the British Empire and at the same time of our dignity as a nation, showing both to the English and to the Americans that we were capable of presenting our own cases before a foreign government, of discussing them on their merits and of dealing with a foreign government without the mediation of a third party, as a minor child is obliged to deal through his tutor.


Mr. MacDONALD (Cape Breton South):: I do not propose to take up much of the time of the committee at this stage of the proceedings; I quite realize the importance of this position and the desirability of maintaining it, as outlined by the last speaker, but I wish to say that the importance of that position depends largely upon the personality of the individual appointed to it. I want to say that in my experience, at least, the former appointee was not fit to occupy the post. I had a case concerning a gross injustice done a Canadian citizen, whose ship was taken on the high seas and brought into a United States port. He was tried before the courts of the United States, which decided that the act of the United States officials was illegal and ordered the return of the vessel and cargo.


Richard Bedford Bennett: What ship was that?


Finlay MacDonald: The ship was called Over The Top, and was owned by a man residing in my constituency in Sydney, Nova Scotia. That is the reason I feel so strongly about the matter. The ship was a three-masted vessel worth perhaps $20,000 or $30,000. She was ruined; she was kept in a Lffiited States harbour for nine months and then thrown back on the hands of the owner. This was in 1925-26, and from that day to this we have never been able to get our representative at Washington to press our claims upon the United States government.
I do not wish to take up the time of the house, but in my opinion a gross injustice was perpetrated on a Canadian citizen. I consider that the person we had at Washington lacked the qualifications of firmness, tact and diplomacy necessary to press this case.
Nearly every month of every year this matter was brought to the attention of the department at Ottawa and also at Washington, and every year we got the same reply. In order to complete the record I will read one letter dated June 8, 1927:
Dear Sir:
I am directed by the minister to acknowledge your letter of June 7.
I wish to assure you that the case of Mr. MacKinnon is receiving every possible attention. It is still under consideration by the competent authorities. Some weeks ago we wrote to the Department of External Affairs at Ottawa. We hope to have soon an expression of the views of the Canadian government and then to communicate with you again according to the instruction? sent to the minister.
Yours truly,
Laurent Beaudry,
First Secretary.
So things went on. This was in 1927, and in 1928 and 1929 the same state of affairs continued. In the latter year we got a reply from the secretary here to the effect that they had been formally notified by the American legation that no provision had been made for the payment of any such claim. In other words, we were told that the claim was not going to be considered. Under clause 4 of our treaty special provision is made for just such cases as this, and all that was necessary was a little firmness, a little strength on the part of the person who then represented us at Washington, to have the claim properly considered.
This vessel was seized on the high seas nineteen miles from shore. It is true she was laden with liquor, and, of course, we had to say that a vessel laden with liquor deserved no consideration. But when we say that we only add hypocrisy to cowardice. The sale of liquor is a perfectly legal transaction in eight of the nine provinces of Canada, and it was perfectly legal for this vessel to be carrying liquor on the high seas. This American cutter, however, seized the vessel nineteen miles from shore and simply laughed at us. And the man whom we had at Washington lacked the necessary intestinal fortitude to press our claim on that government.
I do not wish to make any cheap utterance with regard to that position. It is a very important position. But the person who filled it did not recognize its importance, nor did he recognize the importance of the principles involved in this incident. If a Canadian vessel can be seized on the high seas, taken to an American port, condemned by the United States court as illegal and ordered interned, and we have no redress,
mo
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then I think the time has come for us to consider the qualifications of the person who then represented us at Washington.
I feel pretty strongly about this matter. I made two or three attempts in this house to bring it to the attention of the government, but for one reason or another I was frustrated. There is a principle involved: the high seas are free to the commerce of the king. Our vessels cannot be taken to a port in another country without redress. Our history shows many instances in which less provocation than this has led to very serious complications between nations. All I wish to say is that I regard the person whom we had as our representative at Washington as deserving of condemnation.


William Lyon Mackenzie King: My hon. friend from Cape Breton South (Mr. MacDonald) may have a personal grievance with respect to a vessel which was rum-running, and he may feel pretty keenly about it. But I do submit that it affords no justification for him to make a personal attack upon one who has held the office of minister of this country at Washington, and held that office with very great distinction to himself and to this Dominion, particularly when the ex-minister is not in this house where he can speak for himself. If my hon. friend wishes to have a discussion begun on the personal merits of representatives, he had better say so; I do not think it is the desire of anyone in this house at this moment to engage in any such discussion, and I do not intend to follow him in that direction.
May I point out to the hon. gentleman that a minister acts with the authority and power his government gives him. Within a few days it will be a year since the hon. member's own government came into office. Does he say that his own government is guilty of all these shortcomings which he ascribes to the previous minister at Washington?


Finlay MacDonald: Our own government has not a representative there yet. I have not the slightest doubt he will-


William Lyon Mackenzie King: But the doors of the legation have not been closed. The government is responsible if there is not a representative there. Can the hon. gentleman not see that he reflects on his own administration with respect to the way in which they have managed the affairs of Canada during the past year?


Finlay MacDonald: This year I have not made representations to this government.


William Lyon Mackenzie King: Then my hon. friend cannot be much concerned except for reasons of party. It does not matter what my hon. friend has done or not done; the representations are in the Department of External Affairs, and it is the duty of a new minister to take up all matters in the department where his predecessor has left them. Whether the office was filled for a time by an acting minister does not change the situation in the least. And may I add that not only has there been an acting minister all the time, but there has been recently appointed a full-fledged minister who has been to Washington on two or three occasions since his appointment. I repeat, however, that a minister's powers are those of the government he represents; and if there has been delay throughout the past year the hon. gentleman can only place the responsibility in toto upon his own Prime Minister. I am quite prepared to take the responsibility for delays during the time I was in office, and I have no doubt the present Prime Minister will take the responsibility for any delay during the time he has been in charge of the government. But I believe we shall both agree that with respect to these rum-running vessels which have been captured on the high seas that there has been a good deal of difficulty in getting any settlement that would meet the wishes of those engaged in the rum-running business. That is one of the reasons why it has not been possible to get some of these matters settled which have been outstanding. There are very few of them, but they are a class of cases that have occasioned all governments very considerable embarrassment. These, I think, are the reasons why this matter has not so far been adjusted.
Let me repeat that, so far as Mr. Massey was conoemed, the hon. gentleman's own leader, the present Prime Minister, speaking in this house, paid the former minister at Washington the compliment of saying that Mr. Massey had filled his position with distinction to himself and the country. And that opinion is one that is held universally. It has been expressed over and over again by distinguished visitors who have come to this country from Great Britain. Two prime ministers of Great Britain have spoken in Canada in the highest terms of Mr. Massey's representation of this country at Washington, especially when considered from the point of view of helpfulness to the British Empire. The Right Hon. Austen Chamberlain, the then Foreign Secretary, spoke in similar terms when he was in this country. I have read a communication from the President of the

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United States expressing the hapipy recollections which the government of the United States had of the manneT in which Mr. Massey had performed his duties. I venture to say that there is not an individual in this country possessing any knowledge of the situation who would say other than that during the time Mr. Massey occupied the position of Minister at Washington this country was very fortunate indeed to have one so distinguished and so able to fill the office in the very excellent manner in which he did.


Jean-François Pouliot: Mr. Chairman, I cannot but agree with the Washington appointment because it has brought Ottawa and Washington into closer relationship. I am sure that the minister will do very well but I would remind the committee of what was said in my county during the last campaign. Conservative speakers said that it would be the policy of the Conservative party to abolish the legations at London, Washington and Tokyo and use the money thus expended for old age pensions. I am glad the Prime Minister has acted otherwise than as announced by his followers. The people who voted Conservative for this reason have been much surprised that the Prime Minister has not followed the course which was indicated.


Richard Bedford Bennett: The right hon. gentleman must not say that I at any time favoured a Canadian being a commercial attache at the British embassy. I did not say that here or elsewhere and it is not what was said by Sir Robert Borden. It was not what was in any sense intended, and I need hardly call the attention of my right hon. friend to the terms of the order in council as originally drafted and as finally passed. I do think, and I endeavoured to make it perfectly clear, that in so far as possible we should secure unity of policy in all those overseas and self governing dominions, including the motherland, which constitute the British Empire. Every step possible should be taken for that purpose, for it is itself the greatest league of nations of which the world knows. Unless we can maintain unity and solidarity as such it cannot be expected that the other nations of the world will be apt to maintain a united front with respect to peace and other matters of equal importance.
With reference to the representations in connection with ships which have been held and released, I think the incident to which the hon. member for Cape Breton South (Mr. MacDonald) has just directed attention is the one which he brought to the attention of this
house either at the last regular session or the session before. As I understood it, the attitude taken was that no compensation could be obtained. As the hon. member said, the matter has not been brought to the attention of the present government although I apprehend that it will be. The issue is whether or not a vessel which has been seized and ordered released by the courts of the United States, a vessel which has been injured during the time she was held, is entitled to be put back into the position in which she was at the time of the seizure. All hon. members know that vessels lying idle in port under circumstances similar to those mentioned deteriorate very rapidly. I understand that there has been no case in which any compensation has been paid with respect to any vessel.


[Stage Direction]
Item agreed to.
Tokyo-representation, including salaries and allowances for minister plenipotentiary, secretaries and staff, notwithstanding anything to the contrary in the Civil Service Act, or any of its amendments, $80,000.
William Lyon Mackenzie King: Mr. Chairman, I should like to ask my right hon. friend if he is not changing his mind a little with regard to this legation. At fhe time the legation at Tokyo was being established we had a short debate in the house. Speaking on January 30, 1928, probably on the address in reply to the speech from the throne, my right hon. friend is reported on page 29 of Hansard as having said:
What this country wants in Japan and all other foreign countries are trade commissioners, under the Minister of Trade and Commerce, to carry forward Canada's trade. The Minister of Trade and Commerce (Mr. Malcolm) knows that trade commissioners are what are wanted, men who will carry forward Canada's trade, not our diplomatic skill and power, to the countries of the world.
And again:
I desire to make it perfectly clear that we on this side of the house are opposed to setting up these legations as long as our present status continues. We do not desire that the implications that are attached to our position shall be misunderstood in the world at large. It is going to bring about disaster, as certain as anything can be. About that there can be no doubt. One need not engage in prophecy; one need not be a prophet who reads the diplomatic history of Japan and the United Statep during the last twenty-five years, to understand what it means to start diplomatic relations in Tokyo. It is only necessary to know what has taken place to understand the situation. You, Mr. Speaker, represented this country in dealing with problems of immigration and if we set up an embassy or legation in Tokyo you can realize the position. We embark on these different problems with respect to immigration
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and other important problems, but it is idle boasting to talk about our position in a foreign country because some representative over there can wear gold lace and a uniform. That does not advance the interests of the country a single sou.
That was the way my right hon. friend spoke at that time and yet this afternoon he tells us that the ability to wear gold lace and a uniform was really an advantage.


Richard Bedford Bennett: I did not say anything
about gold lace.


William Lyon Mackenzie King: The right hon. gentleman mentioned the ability to obtain an audience.


Richard Bedford Bennett: That does not demand gold lace.


William Lyon Mackenzie King: My right hon. friend said that when a representative of our country was asking for an audience he must be suitably dressed. I notice that when the present minister went to Washington with his letters of credence he turned up dressed in a Windsor uniform, which certainly has lots of gold lace and feathers and all that sort of thing. This was done in the most democratic country in the world by a representative from another of the most democratic of countries. My right hon. friend must have had some knowledge that a uniform would be of some value, and if it would be of value in Washington it would be of far greater value in Tokyo. I submit that our ministers with their paraphernalia of office have been able to accomplish very much. My hon. friend said that it would not advance the interests of the country a single sou, but surely he will not contend that our minister at Tokyo has not served the interests of this country very well, very faithfully and most helpfully. His presence in the orient has been of real advantage to the trade of this country, and has furthered our friendly relations with Japan. I remember that just a short time ago we had a visit from His Royal Highness, Prince Takamatsu, a brother of His Majesty the Emperor of Japan. My right hon. friend presided at a very important international gathering at which he made a very eloquent speech, and unless I may have forgotten the real purport and tenor of that speech it was to the effect that since we have enjoyed these diplomatic relations, since we had a distinguished minister from Japan in Canada and a minister from Canada in Japan we had understood each other better and the interests of the two countries had been advanced socially, commercially and politically. I think that was the substance of his re-

marks. I do hope that my right hon. friend
will be quite frank and, without taking us all around the world again when he begins to make a reply, will just say that he is still of an open mind at least in regard to the legation at Tokyo, and hopes that it is going to advance the interests of the country as we who established the legation anticipated it would when the legation was opened.
There is just one other quotation of my right hon. friend which I desire to give. I feel it is necessary to give it in view of what he and those who accompanied him to Great Britain have been saying in respect to the great success of the conference that took place there so far as the constitutional side of the conference is concerned. They have been very silent as to all other sides. They have not said much about the success of the conference in promoting trade or as regards the fiscal policies, but they did crow quite a lot over what they would have us believe they had succeeded in doing in connection with the constitutional phase. The other day my right hon friend introduced a very important resolution approving of what is known as the Statute of Westminster. The purport of that statute, as we understood it, was to make it conclusive, once and for all, that Canada had at last freed herself of the last badge of colonial inferiority and that we were now a fully fledged nation with a status of equality comparable with that of Great Britain herself. Now that was true or it was not true. Here is what my right hon. friend said in speaking on June 11, 1928, as reported at page 4164 of Hansard:
The appointment of a minister by Canada-
That is in relation to Tokyo:
-implies by international law that the Dominion is a sovereign state. We are not, and that implication will create misunderstandings at home and abroad. . . . There can be no such thing in international law as equality of status between Canada and Great Britain until such time as this country has the powers of a sovereign state and absolute independence both within and without our country. Then, and then only, may we have equality of status. I have said, and I repeat, that as far as I am concerned I propose to die protesting against that independent condition being achieved.
May I say that my right hon. friend's friends who accompanied him to Great Britain, particularly the Solicitor General, almost died protesting (hat they had achieved in complete measure this equality of status which the Liberals had theretofore claimed the credit for, but which he said as a matter of fact had waited their arrival that the final seal of authority might be put upon the whole. My

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right hon. friend cannot have it both ways. He must do one of two things either admit that we have not equality of status, that this referring to Canada as a nation is all a mistake and that we are still a colony and not a dominion of equal status with the mother country and other self-governing parts of the British Empire, or he must come out and frankly say that we are a nation so far as status is concerned equal therein to that of any other self-governing portion of the British Empire. Let him tell us which of the two he stands for; that is all, and it is very important to know the truth, particularly if he is going to claim the credit that he does for what has been effected by the Statute of Westminster. We would like to know just what it all amounts to. Perhaps my right hon. friend will enlighten us in regard to his position in that respect.


Richard Bedford Bennett: I have not boasted about any achievements of mine with respect to the Statute of Wesminster, either publicly or privately. What I said at the Imperial conference I repeated in this house. I will say this, now that the right hon. gentleman has raised the question, that we did bring about an interprovincial conference which in a day agreed upon a formula that made possible the acceptance of that proposed statute by the parliament at Westminster. Had the statute as originally framed become law, it would have brought about an intolerable condition in this country by reason of the two largest provinces taking the position which they did. I have it on the word of one of my right hon. friend's most ardent supporters that that interprovincial conference was one example of a successful conference which had been provided for, and which met and discharged its duties and went away on the second day after it met. I endeavour at least to avoid the sin of boasting, and I do not think any man within sound of my voice in this house will say that I have boasted with respect to this matter, but I have some little pride in the fact that representatives of every province in this Dominion met together and that we agreed upon a formula that protected alike the interests of the smallest and the largest province in the confederation. The Statute of Westminister would certainly not have been possible had some such action as that not been taken, and the provision made prior to that was wholly inadequate for the purpose for which it was intended. That was admitted at the Imperial conference itself without question by all those who were present whether they were from one part of the king's dominions or the other.
The Statute of Westminster does confer upon this country, with limitations, equality of status legislatively with other parts of the king's dominions, but it does not confer upon this country complete equality of status. It only confers upon this country that equality of status which it was asserted was being sought. There is no suich thing, for instance, as the same power residing in the parliament of Canada that resides in the parliament at Westminster. That is still true, and as a matter of historical accuracy and of legal terminology, there can be no equality of status so long as one country has a different position from another with respect to that country. That is the position which I constantly brought to the attention of this house, and I still continue to do so. That is, the very use of the words equality of status, if applied in their strict legal sense, involves the idea of independent communities, and I say that this country does not desire that. The equality of status that has 'been accomplished by the legislation to which reference has been made is all the equality that has been desired, and all that should be desired. Standing in the place which the right hon. gentleman now occupies I did not vote against the resolution that made possible the legislation to which reference has been made. When I went to the Imperial conference I told them frankly that this resolution had passed the house unanimously, and that a change of prime ministers had not changed the unanimity that the House of Commons had expressed with respect to the resolution, and therefore it was my duty, having just been elected, in the light of that unanimity of action in the House of Commons, to carry into effect the proposals that had theretofore been made, and I proceeded to do so. But I was confronted with the difficulties to which reference has been made; that is, objections from the largest provinces of Canada as to the sufficiency of the safeguards of their constitutional rights and privileges. It was agreed that they were not ample as they stood, and we held the interprovincial conference as I have just said, and as a result unanimity was secured, and every province initialled the agreement at which we arrived as to what the legislation should be. That at least had something to do with the Statute of Westminster. I have not heard of anyone crowing or boasting nor have I read of it, but the fact that the legislation passed this house as it did and that the two largest provinces and the others were satisfied is at least an achievement to which some merit attaches. That is all that I can say with respect to that.
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As to the legation at Tokyo, I find an entire fulfilment of the exact conditions that I said would prevail if the legation were to serve the useful purposes which it was said it would. The minister who was appointed to that position entered upon his duties with enthusiasm, and he has discharged them with zeal. There is no doubt at all with respect to that, but he has made it abundantly clear that the major part of his duties have been of a commercial character. I cannot but think that upon reflection, when the right hon. gentleman looks in Hansard and reviews his references to gold lace, he will think they are somewhat unworthy of him. I have said that the mere wearing of gold lace was not what constituted merit or value in the discharge of duties as a minister, and it is perfectly true that members of His Majesty's Privy Council are entitled to wear a second class uniform. It is expected that when they visit representatives or heads of other states they will do so in the uniform of the rank or position they occupy. That is a part of diplomatic usage which has grown up through the centuries. It is true that the United States is a democratic country and no uniform is worn by their representatives abroad; they appear simply in evening dress. Just what that had to do with the value of services rendered, I do not know; but I did say in 1928, speaking on the address in reply to the speech from the throne, that this was not the measure of value. I believe every word I said as to what the minister to Japan would do has been borne out by the fruits of his efforts in that city. Since he has come home on leave his whole subject of discussion has been the extension of trade. He has desired to address, and I believe will address, Canadian audiences in different parts of Canada on matters of trade, selling our goods abroad, and the establishment of trade commissioners. As a result, in part at least, of representations which were made by him, my colleague the Minister of Trade and Commerce (Mr. Stevens) has now completed a design he had in his mind shortly after we took office, of opening up, as he will describe later, two more offices in the far east. The minister to Japan feels that is a matter of tremendous concern. I am free to say that practically the whole of the many conversations I have had with him as to trade conditions in the far east, all of which have been most illuminating, have touched upon the question of the expansion of trade. I repeat that the value of a Canadian minister in the orient consists in his ability to obtain ready audience 
of those who are directing the affairs of government in those countries, by reason of the international legal position which attaches to the name "minister." That is, the minister may do things which a trade commissioner or consul could not do. He has the right when he goes to the seat of government to have audience without delay with the heads of government and with the various ministers, whereas trade commissioners would not be entitled to-and as a matter of fact might not for days or weeks-see the heads of departments. That is the position I took previously, and one which is abundantly borne out by the results which have followed.
The present occasion affords me an opportunity to say that the appointee to that office, the minister to Japan, entering upon his duties with enthusiasm, after haring addressed a considerable number of public meetings in various parts of Canada, has zealously and with great toil continued to discharge the duties of his office. He has made sacrifices, not only financially but of his own personal comfort. His hospitality so generously extended in the far east, the excellent reputation Canada has gained through the sympathetic consideration which has been given by Mr. and Mrs. Marler to every matter engaging the attention of the people in the city in which they reside, has done much to raise the name of Canada among the people with whom (they have lived. Their action has enhanced our reputation, and by reason of his ability to carry on in the manner I have indicated he has done much to promote, and will continue to extend the trade of Canada. That and that only would be the measure of the duties he has discharged, but would not by any means represent the measure of responsibility which attaches to his office.


William Lyon Mackenzie King: I should like
to say to my right hon. friend how much I appreciate his words of appreciation concerning the Honourable Mr. Marler, more especially as Mr. Marler was a former colleague in my administration and was appointed to the office of minister to Japan under the former Liberal government. I am sure my right hon. friend's words of appreciation will be received with real satisfaction in all parts of Canada.
My right hon. friend made reference to the wearing of uniforms by privy councillors. I have no douibt he is aware that a minister of a legation as a minister in the diplomatic service is entitled to wear a uniform.


Richard Bedford Bennett: Quite so.

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William Lyon Mackenzie King: That causes
me to ask my right hon. friend whether he feels that because an appointment is made to the diplomatic service the appointee should also necessarily be made a member of the Privy Council of Canada. To be a member of that honourable body is to have attained one of the highest honours which can come to any man in public life, the highest, I believe, with the possible exception of that of being a member of the Imperial Privy Council of Great Britain. Both honours have usually been restricted to those who have played an important part in public affairs, to those who have distinguished themselves in parliament and who are known as national or world figures. I do not think that ever before that honour has been given to any one who has played no part whatever in public life, no matter how great his talents or abilities may be. It is very much in the interest of government that we should seek to maintain-the honour of membership in ithe Privy Council of Canada as one most exceptional in its nature, and one which should be awarded only after important or long service to the state. I recall having spoken at one time with the Right Hon. Stanley Baldwin when Mr. Baldwin was Prime Minister of Great Britain with respect to a possibility of certain appointments being made to the Imperial Privy Council. I was very much impressed at the time by the way in which Mr. Baldwin spoke of membership of the Privy Council. He expressed the view that the honour of Imperial Privy Councillor was the highest, and quite the most exceptional of all that could come to any man in public life, and he felt it was in the interests of government 'that the attainment of such an honour should be surrounded by as much in the way of exclusiveness as that high office would appear to warrant. As a political entity, we are of course, not as important a country as Great Britain, nor have our public men played the great roles which many of the public men of the did world have played. I do hope, notwithstanding, that my right hon. friend will not take the view that appointments to the privy council are to be lightly or quickly made, but that it shall remain, of all bodies we have in Canada, the one to which only those who have won their way into a ministry, because of the part they have played in the public affairs of the country, or who have otherwise greatly distinguished themselves, should be appointed. Unless that is done I am afraid we shall lose something of the great value which attaches to that time honoured institution.


Jean-François Pouliot: When the leaders of both parties join to pay tribute to a deceased citizen I admire their eulogy, but when they pay such compliments to a man still among us I am a little suspicious. Mr. Marler is full of dignity; he is a very dignified diplomat; he is one of the most dignified diplomats in the world; he impresses everyone by his dignity. I do not see how he can increase our business in China and in the other countries of the far east, or solve the Indian problem, or keep the bolshevists under control. But he is always dignified: his smile is dignified; his gesture is dignified; his voice is sweet-and dignified; bis words are impressive-and dignified. But, Mr. Chairman, in joining my tribute to that which has been paid him by the leaders of both parties, may I express the fear that if the monarchical system is reestablished in China the Chinese may steal the hon. gentleman from us to be their next emperor!


Mr. MALONEY:: Mr. Chairman, in connection with this item I must confess that in my county during the last election I condemned the expenditure for a diplomatic representative at Tokyo as well as at Washington. My views have not changed since. These gentlemen have cost us many hundreds of thousands of dollars. I cannot see where we have derived any benefit at all commensurate with the expenditure. Rather it would appear to me that we should pay fifteen or twenty trade agents 310,000 a year each to promote trade between this country and Japan, China and the United States. If by this means our trade with those countries was substantially increased, surely those trade agents would be of more value to Canada than the gentlemen who we have at Washington and Tokyo.


Richard Bedford Bennett: I might make one
observation with respect to the question of privy councillors. I think any Canadian who serves abroad must necessarily have practically the same position as had his predecessor; and one who has been a member without portfolio in a government, without ever having been in the House of Commons, and is sworn of the privy council, has no more claims to the title than his successor who, it is true, never was in the House of Commons. Mr. Marler was in the House of Commons for some years, but he was sworn of the privy council because he was made a member of an administration without portfolio and was not elected. Mr. Massey was in the same position exactly; he was sworn of the privy council. when he was appointed
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to membership in the government and failed to secure election. I can only say to the right hon. gentleman that so far as the privy council is concerned, any gentlemen that are recommended by this administration to His Majesty's representative will in every case be as worthy Canadians as those who found office under him.


William Lyon Mackenzie King: I am quite sure that what my right hon. friend has just said is wholly true. I hope he will not misunderstand the nature of my remark, or take it as an unwarranted criticism. The point I am particularly interested in making clear is this: there is a distinction between the diplomatic service and the service df the state in parliament and in administrations. I believe it would be unfortunate were it to be assumed, in the event of there being further legations established elsewhere, that just because someone was appointed a minister, he would necessarily be made a member of the privy council. I cannot think of any honour higher in the diplomatic world than that of being a minister plenipotentiary or an ambassador. It is an honour on a par with that of being a privy councillor in another field of public service. My point is that the two fields should be kept separate and distinct, and the fact that one is appointed to the diplomatic service should not necessarily mean his appointment as well to the privy council.


Mr. MARCIL:: I do not want to refer to the constitutional issue in any way, Mr. Chairman, but after listening to the description given by the member for Labelle of our relations with the United States twenty-five or thirty years ago, and even before in the days of Sir John A. Macdonald, I feel impelled to mention an incident which occurred when I had the honour, in 1906 and 1907, of accompanying a distinguished body of Canadians to Washington. We were received by Theodore Roosevelt, the then president, and in his conversation he impressed very strongly upon us the absolute necessity of having Canada represented at Washington to do away with the circumlocution of communications between Canada and the United States by way of the British foreign office. That was twenty-five years ago, and in view of the position Canada has taken now, I have mentioned this incident to show that other countries like to be communicated with, directly by representatives of this country.


Richard Bedford Bennett: I may say that the high commissioner in London appointed by my right hon. friend opposite was never in par-
[Mr. Bennett.1
Lament, but was sworn of the privy council upon being made high commissioner. Upon succeeding to that office the same honour was accorded to one who for many years had been premier of one of our largest provinces and had served his country with great satisfaction in that province. I think if it is to be put on the ground the right hon. gentleman mentioned, one case could be justified and the other not. But inasmuch as the former high commissioner had been so honoured, I took the responsibility-which I think was a sound exercise of my discretion-to recommend to the sovereign's representative that his successor should be similarly honoured.


William Lyon Mackenzie King: I think my hon. friend took the correct course when he appointed the Hon. George Howard Ferguson a member of the privy council, for two reasons: the Hon. Mr. Ferguson had been a long time in public office, and was a well-known "public figure and quite worthy of being appointed to the privy council; secondly, he was going to England as high commissioner for Canada, and all the previous high commissioners had been members of His Majesty s privy council of Canada. The position of high commissioner is somewhat different from that of ministers to foreign legations. I believe the distinction there would justify the appointment of both Mr. Ferguson and Mr. Larkin to that particular position.


[Stage Direction]
Item agreed to.
Geneva-salaries and expenses of the office of the Canadian advisory officer, $27,000.
Richard Bedford Bennett: This is an increase of
82,000	to make some allowance for rent and salaries.


[Stage Direction]
Item agreed to.
Expenses of Canadian delegates to the assembly and commissions of the League of Nations, $18,000.
William Lyon Mackenzie King: Is my right hon. friend in a position to indicate who are likely to be appointed as delegates to the assembly of the league this year?


Richard Bedford Bennett: The matter has not yet been settled, except as to one appointment. I think it would not be sound to indicate who that would be until the matter has been settled with respect to the others.


William Lyon Mackenzie King: Representations were made to myself at different times, and I think they have since been made to my right hon. friend, that it does materially assist

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the delegates at the League of Nations if their appointment is made some time ahead of the actual meeting of the assembly. I hope my right hon. friend will be able to annonce before very long who the appointees are likely to be.


Richard Bedford Bennett: I hope to be able to do so next week.


[Stage Direction]
Item agreed to.
Publications of League of Nations for distribution to members of parliament and a grant to the League of Nations Society in Canada, $3,000.
Mr. \\ OODS WORTH: In connection with our committee on industrial and international relations it was pointed out that it would be very desirable to have a larger grant for the League of Nations Society in Canada than is made at present, since this is one way in which the peace ideal may be more effectively spread throughout the country. As I understand it, in these depressed times the League of Nations Society is finding some difficulty in financing its operations. Particularly in view of the disarmament conference, and the preparatory work which should be done in all countries before that conference may be effective, it would be highly desirable that this society be given full support. I wish it were possible that an extension of this grant could be made.
Item agreed to.
Civil Service Commission-contingencies, further amount required, $3,000.
Richard Bedford Bennett: Perhaps the Secretary of State should take this item, but since it goes through the Department of Finance I will pass it with the consent of the committee.


[Stage Direction]
Item agreed to.
Finance-salaries-to provide for the payment of an honorarium to executive officers of the Department of Finance for extra services rendered since the commencement of the illness of the late J. C. Saunders in January, 1930, in connection with the executive administration of the department, the treasury board and conversion loan operations, and to authorize the treasury board to make an allocation of the grant, notwithstanding any provision to the contrary in the Civil Service Act, $7,500.
Richard Bedford Bennett: This is an item at which I wish the committee would be good enough to look. It provides for some compensation to five men who did all the work of the deputy minister and of the secretary of the treasury board, and a good deal of the work of the minister, saving the country something
over $37,500 during the last year. I think their services, which in many instances extended far into the night, should be compensated for, and that is the purpose of this item.


Mr. BOTHWELL:: Is this the last item in the Department of Finance?


Richard Bedford Bennett: No. I told my hon. friend I would give him an opportunity to speak, and I will do so.


[Stage Direction]
Item agreed to.
To provide for a Canadian contribution in commemoration of the 1000th anniversay of the parliament of Iceland, $2,500.
Richard Bedford Bennett: It will be remembered that we promised to do something in connection with the 1000th anniversary of the parliament of Iceland. The former Prime Minister and myself agreed that some contribution should be made for the purpose and this sum will be expended as may be deemed desirable.


[Stage Direction]
Item agreed to.
To provide a retiring gratuity for Lucien Faeaud, late secretary, office of the High Commissioner, London, $5,000.
Richard Bedford Bennett: Mr. Pacaud for a time discharged the duties of high commissioner and when he resigned I took the responsibility of submitting a gratuity of $5,000.


[Stage Direction]
Item agreed to.
To provide for the administration of the Royal Canadian Mint, including salaries, contingencies, retiring and other allowances, and general expenses, $125,000.
Mr. EULER:: What changes have taken place in the administration of the mint?


Richard Bedford Bennett: None. The act comes into force by proclamation and that will not be done until such time as satisfactory arrangements have been made with the British authorities in connection with the staff.


[Stage Direction]
Item agreed to.
To authorize a compassionate grant to the estate of the late Miss F. V. Bridgman, $2,028.65.
Richard Bedford Bennett: This unfortunate lady died before the documents she had executed with respect to sums she had contributed to the superannuation fund could be forwarded,-that is, between the date of execution and getting them to the department.


[Stage Direction]
Item agreed to.
[Stage Direction]
Supply-Miscellaneous
[Stage Direction]
Expenses of litigated matters-Department of Justice-further amount required to pay legal fees and expenses of N. W. Rowell, K.C., in the Trail Smelter investigation before the International Joint Commission, $7,020.36.
Jean-François Pouliot: Is Mr. Rowell still on the list of lawyers engaged by the government?


Richard Bedford Bennett: These were eases in which Mr. Rowell had been engaged as counsel and he continued his services. I do not know whether at the moment he is employed in any litigation, but I should rather think he had practically concluded his very eminent services to the state in that regard.


Jean-François Pouliot: He was well cared for.


Richard Bedford Bennett: Yes, very.


[Stage Direction]
Item agreed to.
Unforeseen expenses - further amount required, $25,000.
Richard Bedford Bennett: We have had larger unforeseen expenses in connection with many matters.


[Stage Direction]
Item agreed to.
To provide for hospitality in connection with foreign visitors, $35,000.
Richard Bedford Bennett: We must discharge our duties as host to the best of our ability, once we have undertaken them.


[Stage Direction]
Item agreed to.
To provide for grants to veterans of the Northwest Mounted Police, who served in the northwest rebellion of 1885, in lieu of scrip, at $300 each, as authorized by the governor in council, $18,000.
Richard Bedford Bennett: There are fifty-eight survivors of the old mounted police who did not receive, after the rebellion, consideration in connection with scrip which was awarded, as the committee will recall, to all those who went west of Fort William in the quelling of the rebellion.


Mr. NEILL:: Before this item carries may I ask when we can expect vote No. 463 with regard to payments to the railways in connection with coal?


Richard Bedford Bennett: There is some question whether the words in the vote are sufficient to warrant the. auditor general making the payments for the movement of coal. I wish to have that stand until the matter can be disposed of.


Alan Webster Neill: When will it come up?


Richard Bedford Bennett: : I was hoping to-morrow or this evening; to-morrow at any rate.


[Stage Direction]
Item agreed to.
[Mr. Bennett.1
To provide for the payment of claims for compensation for loss sustained by the civil population and prisoners of war of Canada during the late war, interest thereon and cost of administration, $3,200,000.
Richard Bedford Bennett: This comes partly within the Department of Finance and partly within the Secretary of State's department. The Department of Finance is responsible for providing the money. This item is necessary because. of the decisions of the commissioners in connection with the payment of these claims. Ultimately the money will not be raised by taxation but will be provided out of the funds that come into our hands through enemy property.


William Daum Euler: Is the amount of claims to
be paid to be limited by the amount of the reparations received? I presume so.


Richard Bedford Bennett: I should hardly put it
so strongly. We have now taken care of practically all and we hope that with respect to the others there will be no question about there being sufficient money.


Mr. MACKENZIE (Vancouver):: Will the
claims of prisoners of war be paid before the next report of the commissioner is submitted to parliament? I ask merely for information; I am in favour of its being done.


Richard Bedford Bennett: My personal view is that if the money is available under this vote we should pay them. I am afraid the vote will not go far beyond taking care of those things already decided; it leaves a small balance. On the other hand, the cases now awaiting adjudication do not involve large sums, and if it is possible I certainly share the hon. gentleman's view.


Alan Webster Neill: I inquired into the circumstances of some of these men whose cases were investigated as far back as last October. They had to travel a considerable distance at very great expense to be examined. In making inquiry as to when these payments were to be made I was advised by the Secretary of State (Mr. Cahan) that it was not proposed to consider the matter until all the soldiers' claims had been put in, which he expected would be somewhere about next December. Is there any reason why the cases which have been decided should not be paid as we go along?


Richard Bedford Bennett: Except that the minister
has been anxious to dispose of all cases of a class as far as possible. I think all claims which have been adjudicated upon and which have been laid on the table of the house have been paid. The main estimates provided

Supply-Trade and Commerce
for all which had been laid upon the table and this item provides for those which were laid upon the table the other day. A small balance will be available for other claims. The hon. gentleman will have to direct his question to the Secretary of States because I have no information as to why action has been taken in the way in which it has.


Alan Webster Neill: If I am not mistaken, the
report which was laid upon the table referred to civilians' claims exclusively and not to soldiers' claims.


Richard Bedford Bennett: I understand that some
referred to soldiers.


Ian Alistair Mackenzie: I do not think the report referred to soldiers.


[Stage Direction]
Item agreed to.
[Stage Direction]
Mail subsidies and steamship subventions ¥1,052,220.
Mr. WOODSWORTH:: Are any of these subsidies given in lines in competition with our merchant marine?


Mr. STEVENS:: I think not. In fact, we give the merchant marine a subsidy for the service to South America.


[Stage Direction]
Item agreed to.
Mail subsidies and steamship subventions-* additional amount required to provide for ocean service subsidies; to meet obligations under existing contracts; to provide subsidies to assist the shipment of live stock to the United Kingdom and the continent of Europe; and to provide for a subsidized service between St. John and Weymouth, ¥2,016,000.
Ian Alistair Mackenzie: Does this item supplement the amounts provided for specific service?


Henry Herbert Stevens: Yes.


[Stage Direction]
Item agreed to.
Construction of a grain elevator at Lethbridge-further amount required, $400,000.
Mr. LUCAS:: Will this item complete the
elevator?


Henry Herbert Stevens: Yes.


Mr. GARDINER:: Is it the intention of the government to build a seed cleaning plant?


Henry Herbert Stevens: That matter is under consideration.


Robert Gardiner: A definite decision has not been arrived at?


Henry Herbert Stevens: No.


[Stage Direction]
Item agreed to.
Richard Bedford Bennett: I move that the committee rise, report progress and ask leave to sit again this day. I am asking for second reading of these resolutions in order that time may be saved when concurrence is being sought.
Progress reported.



SUPPLY-CONCURRENCE

[Stage Direction]
The house proceeded to consider certain resolutions reported from 'committee of supply.
Resolutions reported, read the second time and concurred in.

Richard Bedford Bennett: The hon. member for Swift Current (Mr. Bothwell) will be given an opportunity to carry on his discussion when the house is again in committee.


Charles Edward Bothwell: I believe that two or three hon. members dealt with this matter the other night.


Mr. BROWN:: Will that be gone on with after adjournment?


Richard Bedford Bennett: No. It is the intention to continue wtih the Beauharnois report provided the minister is feeling able to make an address.
At six o'clock the house took recess.
After Recess



BEAUHARNOIS POWER PROJECT


George Gordon: Mr. Speaker, if I have the consent of the house to revert to motions, I wish to introduce a motion with respect to the fourth report, which has been tabled, of the special committee appointed to investigate the Beau-hamois power project.


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


George Gordon: It is not my intention, Mr. Speaker, to dwell at length on the report of the special committee on the Beau-'harn'ois power project. The committee was set up by this house on the 10th of June last, and the reference contemplated that the
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project known as the Beauharnois power project would be investigated from its inception by that committee, and that in addition to the investigation of the project the charges which were made by the hon. member for Acadia (Mr. Gardiner) in May last should also be inquired into.
As hon. members know, the committee held its sessions from day to day, and invited and compelled the attendance of all witnesses who they thought might be able to contribute useful testimony in connection with the inquiry.
At the outset, Mr. Speaker, I should like to make this observation. Being chairman of this committee in the first regular session of the parliament of Canada in which I had the honour of being a member of this house, gave me no sense of gratification. The subject matters under review were very, very serious, so serious indeed that I accepted the duty of presiding over that committee only with a great deal of reluctance. Let me say at this juncture that I cannot do 'otherwise than commend the members of the committee for the attitude that they assumed throughout its deliberations. It was apparent that the investigation of necessity had to do with political matters, and it seems that when one's party is challenged or its actions are under fire it is difficult indeed to divorce oneself from the suggestion of partisanship, but the members of the committe, and particularly those belonging to the party opposite, adopted with a degree of resignation an attitude throughout which was commendable. I am beginning to find out that it is difficult when one is interested in politics to accept a position of this kind with any degree of resignation. However, the members of the committee did so conduct their duties that they made the work a great deal lighter than it might otherwise have been.
At the conclusion of our efforts I undertook the drafting of the committee's report. It was of necessity long and to some extent involved. On the last day of the committee's sittings I presented the report to the members of the committee, paragraph by paragraph and page by page, and the members of the committee studied it paragraph by paragraph and page by page. The committee went into the various statements of facts and the various inferences that were drawn- and let me say that inferences were not drawn from the facts unless those inferences were irresistible. I think the committee was careful to see that no one was involved unjustly or unfairly, and I experienced a degree of satisfaction when at the end of the review

of the draft report the members of the committee, representing all political parties in this house, were able to subscribe to its terms.
By reason of the unanimity which ultimately prevailed with respect to the report, and by reason of the length and the exhaustive nature of the inquiry as disclosed in the report, I do not feel that in introducing the motion that the house concur in the report I should dwell at any great length on the matters disclosed therein. The report speaks for iteslf. We had to deal with the disposition of probably the greatest single natural, national resource that Canada has. When I say that I do not mean that the Soulanges section of the St. Lawrence river is iteslf the greatest, but it may be, and probably is the pivotal part of the St. Lawrence river which ultimately we hope will become a great deep sea waterway from the head of the lakes to the Atlantic ocean. That being so, I think all the members of the committee felt that we should detach ourselves from petty party consideration in the hope that our deliberations might contribute something to the nation in whatever steps the house might see fit to take with respect to this matter. I do not think I need dwell upon its importance. We hear from time to time of the great natural resources of Canada. Sometimes people speak of our great hinterland and our great resources, and they use those euphonious terms which probably do not mean anything so far as the knowledge of the person speaking is concerned. Our resources, in large measure, can be identified by those who have taken the time to inquire into them, and to try to limit or delimit them, as the case may be. I think we may all agree that the St. Lawrence river and its development is a question bigger than party; it is probably bigger than any contest which may arise between the Dominion and the provinces; it is something that is inseparably connected with the future of this great Dominion. Let me say then, at the outset-and I think I am speaking the mind and reflecting the views of the committee-that there will be no conflict between the Dominion of Canada, the federal government, and the province of Quebec. The rights of that province will be religiously preserved. Undoubtedly they have rights- some of them may not be clearly defined- but I think I am reflecting the mind of the government and of the committee when I say that whatever steps may be taken in the future-and I trust and hope that by agreement, if possible steps may be taken-will be

Beauharnois Power-Report
with a view to conserving this national 'resource for the best interests of the people of Canada.
The Soulanges section of the St. Lawrence river, and the particular part of it with which your committee dealt-that portion lying between lake St. Francis and lake St. Louis, a distance of fourteen or fifteen miles -constitutes probably, if engineers are to be relied upon-and I have no reason to suggest that they are not to be relied upon- the one portion of the St. Lawrence river most easily capable of being converted to the use of mankind, with respect both to power and to navigation. The total area of the river at this point lies within the limits of the province of Quebec. It is adjacent to the city and port of Montreal, and will undoubtedly constitute part of a deep sea waterway. The development of this project, I believe, can be carried on, having regard both to the navigability of the river and to the utilization of the power incidental thereto. I have no reason to suggest that the plan at present under way is not the soundest method of developing that section of the river, although engineers differ on that point. I am not sufficiently well acquainted with engineering problems, however, to take a stand on one side or the other. Having had with the other members of the committee an opportunity to visit the scene of the works and to visualize what is being done and what will be accomplished when the project is completed, I could not help but be impressed by the magnitude of the work and of its ultimate benefit, not only to the part of the country in and around that portion of the province of Quebec, but to the whole of the Dominion of Canada.
In dealing with this matter your committee felt they should direct their attention to various phases. With that in mind they went into the history of this power development as well as into questions affecting title. Probably the historical facts are important only from a historical point of view; at any rate there came a time about twenty years ago when those who had acquired what rights were originally in the former owners who held possession over one hundred years ago, found that the rights they held were manifestly important, although in themselves, at the inception, they were insignificant. In 1902 the Robert family caused to be incorporated, under the provisions of the Quebec Companies Act, a company known as the Beauharnois Light, Heat and Power Company. They had utilized some power through a feeder that ran from lake St. Francis in a southeasterly
direction to the St. Louis river for the purpose of adding some volume to that stream, and providing power for the water wheels they had established upon it.
As we all know, about this time the development of -hydro-electric power became interesting from many angles. The whole of this continent was interested in hydro developments, and it must have been obvious- as it was to those who knew of this situation- -that nature had thrown in the lap of Canada one of the greatest resources that this or any other country ever possessed. The time had come when industry advanced to the stage that absorption of the powers to be developed from the Soulanges section could reasonably be anticipated. The time was then, and then only, ripe for the development of this enterprise.
Certain advances were made by the Robert people through the government of the province of Quebec with respect to the identification of their rights. After some litigation in the Exchequer Court of Canada about the year 1909 their rights were in a measure determined. Nothing further of consequence was done, although from -time to time in other reaches 'of the river adjacent thereto rights were acquired by certain companies to carry on comparatively insignificant industrial operations. It was not until the year 1923 that any pointed interest-and I use that word advisedly-was taken in connection with this development. True, back in 1912 Mr. Sweezey, at the suggestion of Sir Max Aitken, now Lord Beaveibrook, made some investigations with respect to this power project which, however, seemed to come -to nothing, and the project apparently was not seriously taken in hand until about 1923.
At that time a rather important event took place which I shall not dwell upon. I shall give merely a narrative history of the facts, because bon. members of the house are as capable as I am-probably more so-of drawing conclusions from the facts. Mr. Henry, who was in 1923 an employee of the Canadian National Railways, a man of quite superior engineering ability and, I think, equipped with a profound knowledge of the Sit. Lawrence river and all its possibilities, enlisted with him Mr. W. L. McDougald, the idea being to have Mr. Henry make an investigation into the possibilities of developing power by a canal extending from lake St. Francis to lake St. Louis. Mr. Henry ait that time was busy with his work in connection with the Canadian National Railways and is said to have employed another engineer for the purpose of making a survey between the two

Beauharnois Power-Report
lakes. There followed as a result the incorporation in Ottawa by the firm of Mc-Giverin, Haydon & Ebbs of a company known as the Sterling Industrial Corporation. That was accomplished on the fifth day of July, 1924.
Concurrently with its incorporation in fact on the same day, application was miade to the Department of Public Works, and two days later, on the 7th of July, a similar application was made to the Department of Railways and Canals, asking on behalf of this company that approval be granted under the provisions of the Navigable Waters Protection Act to the plans then submitted, which Contemplated the diversion of 30,000 cubic feet per second from lake St. Francis down through a proposed canal to reenter the St. Lawrence river at lake St. Louis. Very shortly after the filing of this application advice was given to the promoters, or to their solicitors, that the application could not be entertained; and in that advice certain things were suggested that they might or might not do, whichever course they chose to adopt. At any rate, nothing was done. That application was allowed to lie there and was not renewed until some years later.
In 1927 Mr. Sweezey became interested in this project. Mr. Sweezey is unquestionably an engineer of repute. He, in my view, and I think it is the view of the other members of the committee, is a very capable engineer. But I must confess that he adopted a rather strange attitude on his first move towards acquiring the rights that he hoped to acquire on the St. Lawrence river. I have reference to the letter-with which hon. members are well acquainted, I think-to Alderic Raymond, in which he set out his conception of the method and the manner and the means that should be adopted and employed in order to accomplish the acquisition of the rights in this part of the river. No one could read that communication without at once being struck by Mr. Sweezey's conception of what might or might not be done if "political influence," as he calls it, could be assembled to his assistance. Now, right from the beginning-and in making this statement I am sure that the members of the committee will not quarrel with it

Mr. Sweezey and those who were associated with him seemed not only to be inspired, but to feel that they could make no headway unless they had political influence, and they proceeded upon that assumption, so that even those who had no political influence at all, even those who were not in t'he counsels of any party, probably participated in the disbursement of moneys at the hands of the promoters. It 
is 'not a pleasant thing to contemplate, but that seems to have been the case. From 1927 onwards we find $437,000 paid in legal fees. Of course, they were noit legal fees in the sense of payments for professional services rendered, and that became manifest as the investigation proceeded.
Application was made to the federal government at Ottawa for the approval of certain plans on behalf of the Beauharnois Light, Heat and Power Company after the option to acquire the stock of that company had been secured by Mr. Sweezey. That application met with considerable opposition. Other power interests on the river, jealous, I presume, of the rights sought to be acquired by the Sweezey organization, set up an opposition that at one time, according to the evidence, almost spelled disaster for his application. But there came a time when this opposition seemed to lose their interest in opposing, and almost overnight they reappeared in another form, namely, in support of the application which they had theretofore so vigorously opposed.
Out of it all came the passing of the order in council we have heard so much about,
P.C. 422. The order in council, shortly stated, gave the right, or assumed to give the right, to divert 40,000 cubic feet per second from lake St. Francis into a canal down to lake St. Louis. Prior to this Mr. Henry had taken on a new duty; he still remained associated with the Canadian National Railways, but he was appointed deputy Minister of the Department of Railways and Canals, and during the time he occupied that office three orders in council were passed whereby the water in the river which the Montreal Cotton Company had the right to use was acquired by the Sweezey interests. There may be a difference of opinion as to the efficacy of the order in council, whether it in fact gives the right that those who were sponsoring the application hoped it did give. Your committee felt that it was not within the purview of the task assigned to it and that it would serve no useful purpose for it to try to define the law with respect to that order in council.
But it is plain that the order in council, by its terms, contemplated that nothing should be done in this stretch of the river until the final detailed plans had been approved by the minister. Those final detailed plans were not approved, and I believe I am stating it fairly when I say they have not been approved to this day. But the work went on. It is only fair at this juncture to point out that evidence was given, and with a good deal of force, that detailed plans, that

Beauharnois Power-Report
is, working plans, could not very well be prepared and approved that would not have to be changed as the work progressed. I say that in fairness to those who were sponsoring the application. But the fact remains that the plans contemplated by the order in council were not approved and have not been approved up to the present time.
Another point I might touch on in passing is this: that the land through which this canal will run from lake St. Francis to lake St. Louis is all owned by the Beauharnois Light, Heat and Power Company Limited. As the case stands at present there will be no fight as between provinces or as between the Dominion and any province or anyone else with respect to the bed or banks of the new canal because they are owned in fee simple by the company.
That raises another point, if one cares to pursue it further, with respect to the three bridges crossing the channel. The Navigable Waters Protection Act itself does not in any of its sections, so far as I am able to read and interpret them, give to the governor in council power to authorize the diversion of water from a navigable stream. It is quite true that the evidence disclosed that, in the past, rightly or wrongly, approval has been given to such diversions, but that raises just the point whether or not, under that act, the governor in council had the right to do what they did. At any rate, granted they had the right and that ultimately the waters are turned into the canal and the total useful flow of the St. Lawrence river is made use of- and that is what was in contemplation by the promoters, and what is still in contemplation according to the evidence-then we will have the rather curious situation of a new river built from lake St. Francis to lake St. Louis, the bed and banks of which are owned by a private corporation and across which are three bridges. The Navigable Waters Protection Act, if I remember section 11, distinctly states that no approval shall be given under the act to the construction of a bridge across the St. Lawrence river.
The authority of parliament comes from the British North America Act; section 91, with which I am sure hon. members of the house are well acquainted, deals with navigation and shipping. The power there given for the control of navigation and shipping is given to the parliament of Canada, and the words are just as I have used them. Of course, the widest interpretation can be given those two words. The Navigable Waters Protection Act was passed by this house under the authority conferred upon this parliament by the British
North America Act with respect to navigation and shipping, and under the terms of the Navigable Waters Protection Act certain authority is delegated to the governor in council. In my view at least that does not include the power to authorize the diversion of water from a navigable stream. However, I may be wrong in that; others may take a different view, but that was one of the matters your committee had under review and upon which they felt they could not make any useful pronouncement.
The next step in connection with the matter with which your committee had to deal was the structure of the various syndicates and companies. I am not going to labour that phase of the question, because the history is set out in the report which was read in the house a day or two ago. I think it is only necessary to say that one syndicate was formed with 5.000 authorized part interests or units; that a little later another syndicate was formed with 30,000 part interests or units; that the second syndicate took over the first, giving two shares for one, and that the assets Which were originally those of the Beauharnois Light, Heat and Power Company, Limited, namely, the shares of the Beauharnois Light, Heat and Power Company, Limited, which were acquired by the first syindicate and subsequently by the second syndicate, were in turn transferred to a new corporation known as the Beauhamois Power Company, Limited, a company incorporated under the Dominion Companies Act.
Following out what appeared to be the course Mr. Sweezey set himself, in order to procure the rights that he wanted he got the financial support, and I think I am not unfair in saying the political support, of different gentlemen. He obtained the financial support of Frank P. Jones and the political and financial support of Senator Raymond and Hon. Walter Mitchell. Later on those gentleman were joined by Senator McDougald, whose advent into this project appeared to come about in this way: If hon. members will remember, a moment or two ago I said that he and Mr. Henry incorporated the Sterling Industrial Corporation and filed plans on July 5, 1904. Those plans remained in the department. When Mr. Sweezey started in to * acquire these rights to develop the power on the St. Lawrence, Mr. Henry-and I think I am not unfair in stating it in this way-apparently was watching the developments and he, acting on behalf of himself and Senator McDougald, interviewed Mr. Sweezey, or Mr. Sweezey interviewed Mr. Henry. The evidence is not clear as to which one was

Beauhamois Power-Report
interviewing the other, but it was a sparring match, as it were, to get information one from the other. The ultimate result was that Mr. Sweezey became convinced that in order to have his efforts crowned with success he would have to get rid of the application of the Sterling Industrial Corporation, which was owned by Senator McDougald and by Mr. Henry, who at that time or shortly afterwards was the Deputy Minister of Railways and Canals. A good deal of evidence was taken with respect to those interviews, and with regard to what was done before an agreement was reached. Some of the evidence was vague, but during the taking of that evidence there came a time-and the evidence can be referred to by any hon. member-^ when a question was put to Mr. Henry substantially to this effect: "Is it correct that you filed that application for the rights which are now under discussion for the purpose of compelling anyone who might thereafter undertake the development of that section of the St. Lawrence river to take care of McDougald and Henry?" His answer was, "I guess you can put it that way."
Those interests became very valuable, the upshot being that 2,000 part interests in the new syndicate were given in exchange for them. Evidence was taken with respect to what consideration was given for the issue of those 2,000 part interests, and that evidence was not contradicted. On both sides it was reluctantly admitted that there was no consideration; and in fact it got down to being described as a nuisance value and similar units in that same syndicate were sold for $550 each.
Those matters of necessity had to be inquired into by your committee, and again I wish to commend members of the committee for the ability they displayed and for the self-abnegation, if I may put it that way, as far as party politics were concerned, which they showed in their desire to search out and attempt to determine what was the truth in connection with this promotion. It is, I believe, the opinion of the committee, and it is reflected in the report, that this project or a similar project is one that will be of great advantage to this country and, if properly built, will become part of the deep sea waterway. Whether or not there was too much hurry in the building, your committee does not see fit to report upon except indirectly. At any rate, it was the view of the committee that the work was a very important one and that we could not report otherwise than to say that every safeguard should be taken so that the work might not be im-

perilled, and at the same time that the rights of the province of Quebec and of the people of Canada should be protected.
I will not go further in discussing the financial structure or set-up of the laslt company. There were five management shares that contemplated continuity of management for a period of ten years. Probably it is a wise precaution to take if the management is in sound hands during the initial stage. There were common class A and class B nonvoting shares. These, in the main, were given those who were raising money, and they in turn subscribed for some of the shares with the profits they made out of various syndicates. The final result was that the promoters of the company, who now own and control the company, have no money in it and have made a great profit out of it. I am not complaining of that if the rights of the people of this country are adequately protected. It is for the members of the house, after a review of the report, for concurrence in which I shall presently move, to say whether or not that protection has been given.
There is one oTher phase of the matter which I wish to discuss, probably the one phase that is most difficult of all. I refer to the employment of moneys out of this project for the purpose of contributing to campaign funds of political parties. I know from my reading-not from my association with politics, because that has been but a recent matter with me1-'that contributions to campaign funds to all parties have been made for many, many years, and I do not think the leaders of any party would care to suggest that funds, large or small as they may be, are not made to organize the voters of the country in order that the views of the party particularly concerned might prevail. That has been the custom. Whether or not it is a proper one, I do not think I am called upon to pass judgment. At any rate it has been done, and I assume that it will be done in the future. It costs something to organize the vote of the voters of the country. Whether it is done properly or improperly is probably the important question. Those who contribute to the campaign funds of the parties, and do so prompted by their belief in the soundness of the policy of the particular party, can be, I think, probably excused and, maybe, commended. But those who contribute to a party's coffers, inspired only by the hope- and in time something more than hope-that they will, by reason thereof, be able through the influence of that party to alienate from the people of the country the resources that belong to them-those contributions, I say,

Beauhamois Power-Report
and those who make them cannot be too strongly condemned.
In connection with this project I must confess that I am unable to divorce myself from the view that the contributions to campaign funds that were made from t'he company's funds, which came from the sale of bonds to the people, were made for the purpose of influencing those who might be returned to power; and those who took them, those who collected them, receive in the committee's report the condemnation they deserve.
This is the first unit in the course of the development of this great natural national resource. Obstacles were thrown in the way here and thrown in the way there, purely and simply because those who were doing it felt that they would be paid to step aside. Now, this is only t'he first step, and every time a dollar is added to the capital cost of any business the ultimate result is that those who have to transact business with that company or with that industry must, all down through the future, just pay that much more for the product of that industry. Therefore it is very essential, particularly in the development of a resource such as this, that its initial capital cost be kept down to the lowest possible limit, in order that the benefits that will flow from its development will be reaped by the people of the country. This is only the first unit, and if, on examination of the report, you can visualize what might have happened if, as each recurring application came along for the diversion of more waters of the river, the same course was taken, then I ask you to realize for yourselves the load that this resource would carry before it was finally developed. We should have on our hands a burden which probably would in large measure discount the benefit and advantage that nature has given us by placing that water available to the people of the country.
I have spoken longer than I intended and I trust that in the remarks I have made I have not departed from the evidence that was disclosed before the committee. Our report in certain respects may be blunt, but it is supported by the cold, unvarnished, sworn testimony, and your committee a sics this house to concur in that report. I now move, seconded by Mr. Dupre, that the report be concurred in.


William Lyon Mackenzie King: The hon. the Minister of Immigration and Colonization (Mr. Gordon), who has just moved for concurrence in the report which has been presented to the house, has outlined its main
features. In doing so he indicated that the report has several important divisions. The first is historical in character, reviewing the inception and development of the Beauhamois canal project. The next division has to do with the organization of syndicates in connection with the promotion of the company, while another portion of the report has to do With individuals who were concerned in its promotion, and particularly with the fees which were paid to many lawyers whom the promoters seemed to believe had a certain political influence which they should seek in this manner to gain. The minister has indicated that the report further deals with the question of contributions to party funds, and while he did not mention it, I think I am right in stating that the report concludes with certain important recommendations which this house is asked to accept.
Perhaps I could not do better than to follow the minister in his order of presentation and to deal with the matter not only in the sequence he has pursued but more particularly with respect to the particular topics which he has touched upon, leaving other matters aside for the present, unless perchance some seem to me to be deserving of special mention.
I would like to do as the committee has done, present to the house a statement as to the position of the late government in granting approval of the plans of the Beauhamois company in the light of the perspective which governed in the matter. In so doing I hope the house will not feel that I am trespassing unduly upon its time if I outline the background, so to speak, of the- developments in which the approval of the plans of the Beauhamois canal had its particular setting. After all, I assume that what the house and the country is most interested in is whether the late administration, of which I had the honour to be the head, granted approval of the plans from any motive other than that of the public interest, whether the decision was a wise one, whether all that could be expected of the ministry in the way of safeguarding its action was or was not performed. It is from that point of view that I wish to develop what I have to say.
When the late Liberal administration assumed office there were many pressing problems facing this country. Not the least important of these were the differences which had sprung up in the course of years between some of the provinces and the Dominion government itself. These were not differences of a character to involve conflict between governments, but there was a feeling on the part

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of some of the provinces that they had not received full justice in matters with respect to which the Dominion had more or less the determining voice. As an administration we set ourselves the task of endeavouring to remove these differences as largely and as completely as possible, believing that upon Canadian unity more than upon anything else depended the progress and development of our country.
Among the questions which were to the fore and which occupied the time and thought of the ministry perhaps more than any other during the first few years after it assumed office was the question of the return to the western provinces of their natural resources. This question had been facing the governments for many years, and it was one with which we wrestled and of which we finally successfully disposed. Allied in a way to that question was a grievance on the part of the province of British Columbia. That province felt that it had been deprived of certain lands along the Canadian Pacific railway and in the Peace River belt, and that those lands should be restored to it. That question also was dealt with, and may I say, dealt with successfully. We had not been in office very long before difficulties which were latent asserted themselves in the maritime provinces, and we were confronted with a great deal in the way of social unrest, and a feeling on the part of those provinces that they had not been properly treated from the time they had come into the federation. As hon. members know, we appointed the Duncan commission to investigate the grievances of the maritime provinces. When that commission made its report we acted upon it, if not in its entirety, at least with respect to all its major features. So far as the other provinces were concerned, Ontario and Quebec, there remained very few differences or difficulties of any kind with which to deal, with the exception of the question of the navigation of the St. Lawrence river and the development of power on that river. In the case of Ontario that question was particularly involved because it had to do with international ns well as national considerations; it had as I have indicated also to do with power as well as navigation. A vexed question was the degree to which the Dominion itself might have ownership of the power which would result from any improvements which it might make with respect to navigation. These were the problems with which we were occupied at the time the Beauharnois application came before the administration.

I think I need scarcely say to any body of hon. members of this house that a government comes to know of questions only as they are presented to the ministry for consideration. There are at the present moment innumerable matters awaiting consideration in the different departments of government but they will not assume importance, so far as the government of the day is concerned, until they reach the cabinet through the minister of the department in which they happen to arise. The first real concern which the administration had with the Beauharnois canal was when the formal application which had been made to the Department of Public Works for the approval of the plans came from that department before the cabinet for consideration. That however was not the first intimation which individual members of the government had had of an application being made for the approval of plans for the Beauharnois canal project.
Perhaps the house will permit me to speak more particularly of my own knowledge of the matter, giving, as I speak, my version as one who at the time was holding the office of Prime Minister. I have a very slight recollection of having heard anything about the Beauharnois canal project, so called, before I was asked by Mr. Frank P. Jones if 1 would grant him an interview to discuss a matter of considerable importance. I did not know at the time very much about the matter that Mr. Jones wished to discuss, but he wrote me upon it and I arranged to accord him an interveiw. That was in June, if I remember rightly, or July, 1&28. Mr. Jones called on me at my office and we had a Short conversation. My mind was full at the time of the question of the St. Lawrence development, the deep seaway. It was a matter to which the administration had been giving a good deal of attention. We were in communication with the government of the United States with respect to it. As hon. members know, the exchange of correspondence between the two governments had been tabled in the house. My first reaction to the interview I 'had with Mr. Jones was as to just how this particular project might affect the St. Lawrence waterway. In that connection I put to him the very direct question: How would the province of Ontario view a matter of this kind? Because I knew that the province of Ontario had been interested in seeking to get approval of certain plans of power development on the international section of the St. Lawrence, and that we had not been able, as a government, to see our way to grant that approval until our exchange of

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views with the government of the United States had progressed a greater length than they had. Being international waters the consent of both countries was needed. I felt that if the government was even to consider the project at all, we would have to feel perfectly sure that out of our consideration there was not going to arise any difference or possibility of estrangement between two of the provinces, but rather that whatever would be done would accord with our policy of seeking to remove altogether whatever in the way of differences might exist between the provinces and the Dominion.
In 1928, as members will recall, the Briand-Kellogg peace pact was signed in Paris. I had the honour of representing this country at its signature, and subsequently of representing Canada at the assembly and on the council of the League of Nations. Those particular missions occupied a considerable portion of my time abroad that year. Being absent, I had no further thought of the Beauhamois matter until after my return to Canada, when the matter again came up for consideration. Shortly after my return to Canada I received another letter from Mr. Jones, in which he recalled the previous interview and the question that I had put to him at the time. He said that he was in a position to answer the question, and he enclosed certain correspondence in his letter, which correspondence was tabled in this house, I think, two years ago, which answered the question which I had put to him. It was shortly after that, that the application came before the government for consideration.
May I pause here to say a word-I shall enlarge upon it a little later-as to the attitude which I have taken with regard not only to the Beauharnois project but to every question that came before the cabinet during the time that I was Prime Minister; for this has a very important bearing on all that pertains to the consideration of this application. Once a matter came before the government for consideration, I made it religiously a rule not to discuss it with anyone-whether members of the House of Commons on my own side, friends of the party from outside, or anyone else-other than my colleagues. I received respectfully such representations as were made to me, but I invariably made the reply: this is a question under consideration in the cabinet; it will be dealt with on its merits;
I cannot discuss this question with you. I am afraid that many of my own followers were most impatient at times, or perhaps I should say more than patient with me in
this attitude, I know that they have felt, and it has reached my ears very often, that I was inaccessible, that it was difficult for members of the party even to have a chance to discuss with me many of the questions which they were concerned in. Part of that has been due to the fact, which I am sure my right hon. friend will be able to bear out as true, that the task of a Prime Minister is a very considerable one, and that any man who wishes to master the questions that have to be discussed in this House of Commons, unless he has had extensive preparation and unless he has a powerful mind, will require pretty much all the time he can get to himself to study intimately and thoroughly the essentials of the problems that come before his government and before parliament for consideration. I have all along been conscious of my own limitations in dealing with many of the great questions which involved complicated legal as well as technical considerations, and it has probably taken me much longer than it might have taken other men to become thoroughly familiar with the different questions that have been discussed in the cabinet and on the floor of this house; but I found that the only way in which it could be done was in just the manner I have indicated. I have been prepared to be misunderstood on the part of my own following, and even to incur the reproaches of many of the best supporters of the party, because I have been unwilling to discuss with them matters which were before the cabinet council for its consideration. I have told them I would not very frankly and emphatically. Indeed, I think every secretary who I have had will bear me out when I say that the instruction that I have oftenest given is not to let anyone into my office until he knew what he wanted to see me about, and unless it was something that could be told to my secretary then I preferred to have my office to myself. That has been pretty much the rule I followed during the time I was Prime Minister. It may serve to account for an attitude, which some of my own followers have not always appreciated. I mention that now because when this application came before the cabinet there were many persons who did try to see me and did want to discuss with me the question of the Beauhamois canal project. They were not only those who wanted to see the project plans approved; they were very powerful interests that were concerned about this power not going to the Beauharnois people. Certain of these claimed they were friends of the party-if it may be
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expressed in those terms-or professed to be, and thought for that reason they should be entitled to present their views. I dealt with all in exactly the same way. On this question, as on all others-I am not singling out this one, because my attitude as Prime Minister in this instance was exactly the same as it has been with regard to every other question -I refused to discuss the subject then before the cabinet with other than my colleagues, preferring to get my knowledge of the situation from what might be said at the council table.
For that reason the decision which was reached in cabinet council, so far as I personally was concerned-and I think I can say the same with respect to my colleagues of the day-was a decision reached as the result of open discussion across the council table in which every conceivable aspect and consideration was thoroughly discussed, and the merits thereof very carefully weighed. In a few minutes I shall go into the considerations of which we had to take aocount. Before doing that however may I give to the house by way of confirmation of what I have said, and to throw a little more light on the subject, one or two communications to which I have referred.
These communications were tabled as the result of a return for all correspondence between the government of Canada and other parties under the Navigable Waters Protection Act, in relation to the question commonly known as the Beauharnois power and canal project. An order was granted by the house on February 13 or 14, 1929, for these papers. It includes all the correspondence that was in my office at the time. The letter from Mr. Jones to which I have referred is dated at Montreal, June 22, 1928, and is as follows:
Right Honourable W. L. Mackenzie King,
Prime Minister of Canada,
Ottawa. Ont.
Dear Sir:
For the past month I have been desirous of seeing you regarding the Beauharnois Light, Heat and Power Company, but have refrained from asking for an interview, knowing how frightfully busy you must have been while the house was sitting, and although I know your time is really more than fully taken up now, necessity compels me to ask if you would, if possible, be kind enough to grant me a halfhour's interview as early next week as you can.
You will remember I told you before I sailed for Europe I expected to take an active interest in the Beauharnois proposition, this X am doing, but naturally do not want it to drag, and I would like if you would make it possible to have actual construction work started this fall. I am anxious to see this water go through
[Mr. Mackenzie King.l
the turbines and industries using the power generated. I may be impetuous, but I have always found that while impetuosity may be a drawback to an individual, it is very often good for the community.
I have the honour to be,
Your obedient servant,
F. P. Jones.
I arranged for the interview with Mr. Jones and at the interview made to him the representations to which I have already referred. The next communication I received from him was dated at Ottawa, November 28, 1928, from the Chateau Laurier, and is as follows:
Right Hon. W. L. M. King, P.C.,
Ottawa.
Dear Sir:
At the last interview you were kind enough to give me, re Beauharnois Light, Heat and Power Company, it was suggested that I might procure some evidence as to the attitude of the government of Ontario towards the proposed power development. This I have done and therefore would like, if it is possible, to have you grant me a short interview in which 1 could submit the evidence to you.
I have the honour to be,
Sir,
Your obedient servant,
F. P. Jones.
Unfortunately Mr. Jones did not receive an interview. He, however, sent me another communication. This one was dated from the Chateau Laurier, Ottawa, November 30, 1928, and is as follows:
Rt. Hon. W. L. Mackenzie King, P.C., M.P., Prime Minister of Canada,
Ottawa.
Sir:
You will recall that when I saw you a few months ago regarding the application of the Beauharnois Light, Heat and Power Company for the approval of its plans under the Navigable Waters Protection Act, you asked me regarding the attitude of the premiers of Quebec and Ontario regarding this project.
I was in a position to assure you that not only the premier but the entire government of Quebec was practically unanimously in favour of it and anxious to see the development go ahead. I could not, however, state definitely the precise attitude of the premier of Ontario.
1 now take the liberty of enclosing a copy of a letter from the Hon. Mr. Ferguson, dated November 19, to the Hon. Mr. Taschereau, by which you will see that Hon. Mr. Ferguson considers that the matter is one which should be dealt with according to the wishes of the province of Quebec. Mr. Ferguson appreciates the spirit of cooperation shown by the province of Quebec, and evidently feels that this development will be beneficial to Ontario, inasmuch as it will be an additional source of supply of power to help satisfy Ontario's rapidly increasing demand.
I think the letter of the Hon. Mr. Ferguson justifies my stating to you that Ontario, as well as Quebec, is in favour of the project.

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I -svish to state that the copy of this letter which I enclose was sent to me by Mr. Tasche-reau, and I have his permission to give it to you.
I have the honour to be,
Sir,
Your obedient servant,
S'. P. Jones.
The letter which was enclosed is before me. I shall not read the whole of it, because it deals with two subjects but shall read that part dealing with the Beauharnois canal project. It is from the Hon. Howard Ferguson, at the time Prime Minister of Ontario, and is addressed to Mr. Taschereau the Prime Minister of Quebec. It is as follows:
I note you say that the Beauharnois people are about to press the Dominion authorities to give effect to the legislation passed by your legislature at the last session. I fully realize that this development is entirely within the boundaries of the province of Quebec and this province has no voice in the matter. We do, however, greatly appreciate the spirit of cooperation in the development of these two great old provinces which you have so frequently shown, and which is again evidenced by the provision you have made that a portion ol this power may be made available to this province should we need it and are able to negotiate a favourable contract, so long as it is not directly or indirectly exported to the United States.
Owing to the undoubted delay there will be in regard to the settlement of the development of the St. Lawrence and Ottawa river powers, and the rapidly increasing demand for power in Ontario, I feel that we will probably again in the near future have to take advantage of your good-will and secure a further supply from some point in your province.
I am sure I need not assure you again, as I have done in the past, of our appreciation of your attitude towards Ontario and her power problems by voluntarily making such generous provision a condition of your approval of the IJeauharnois undertaking. If I am right in my view as to our early requirements of power, Beauharnois would seem to me to be a very convenient and favourable point from which to procure our requirements.
Yours faithfully,
G. H. Ferguson.
I believe the correspondence I have read is sufficient to make clear the fact that in November, or the beginning of December 1928, the administration of the day was in this position: They had before them an application from a company which had been organized in the province of Quebec, had received its charter from the province of Quebec, had been given a lease of power from the province of Quebec, had been given the right to divert certain waters from the province of Quebec, that the Premier of Ontario knew of the particulars of the lease granted and the conditions attached to it, and had
stated in a written communication which I assume was intended to be brought to the attention of the federal government, that he approved of the project, that he would be in need of additional power for his own province and that he would probably have to make a contract at an early date with the government of Quebec in order to get the power he needed for the province of Ontario. That was the position as it presented itself to the cabinet. Our first consideration was whether we could afford to ignore the wishes of the two provinces most vitally affected in this power development, provided that ail requirements with respect to the federal obligation of approving the -plans were fully met.
Now, may I pause at 'this point to remind hon. -members what was the obligation, the duty and the power of the federal government in this particular. We were not required to pass upon the organization of a company, in the application before us we had nothing to do with leasing the power, we had nothing to do with the diversion of water; all this belonged to the government of the province of Quebec-a government just as sovereign within its jurisdiction as the Dominion government within its jurisdiction. We had to consider whether, when the government of Quebec, and I might add the government of Ontario, were urging that these plans should be approved, we were justified in refusing approval. We had to consider, -when the government of the province of Ontario was asserting its needs for more power, whether we were justified by refusing such approval, thereby to prevent the Ontario government from getting that extra power from the source with which it said it was going to make a contract. Our obligation was limited to the approval of the plans from the point of view of the protection of navigation. The protection of navigation comes within the jurisdiction of this federal parliament. Our obligation was in the nature of an administrative act certifying that the grant made by the province of Quebec with respect to water powers within its own jurisdiction would not in any way interfere with navigation on the St. Lawrence.
But we had a larger question to consider- and this, let me repeat, was the thought mostly in the minds of the administration, because it was a question that we had been dealing with for four or five years,-namely, the question of the ultimate development of the St. Lawrence deep seaway project. We had to make perfectly sure not only that any project we were going to approve would not interfere with navigation, but that it would
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be so carried out that it would not interfere with but rather further the development of the St. Lawrence deep sea waterway. It was to that question that we had to direct our attention particularly.
In that connection we had to take into account all outstanding considerations of importance. First of all we had to consider whether, in constructing works for the protection of navigation, power developed from those particular works would belong to the Dominion or to the province. There never was any question about the power in the St. Lawrence river within the province of Quebec itself belonging to that province. The question for our consideration was whether once the works necessary for the protection of navigation, were constructed, and power developed therefrom, that power should belong to the province of Quebec or to the dominion. That was a legal question that we were not in a position to pronounce upon except through the advice of the law officers of the crown.
Here again may I revert to the original setting of this matter. As I have said, the question of the settlement of the differences with respect to the St. Lawrence development was the outstanding question with Ontario and Quebec. When the Dominion-provincial conference met in 1927, the year of the diamond jubilee of confederation, the premiers of Ontario and Quebec asked that this question of the relative jurisdiction and rights of the dominion and the provinces respectively with regard to power on the St. Lawrence should be submitted to the Supreme Court of Canada. As a result of that request a series of questions was prepared and after amendment submitted to the Supreme Court of Canada. Those questions were before the court when the application of the Beauharnois Power Company came before our government, but no decision upon them was given until the eve of the meeting of parliament in February, 1929. I ask hon. members tO' keep that fact also in mind-that the question of the respective rights of the Dominion and the provinces with regard to power developments in all their phases was before the supreme court at that time.
When the opinion of the supreme court on the question submitted to it was delivered, I confess that not being a lawyer I could not make head or tail of it, and much to my relief I found that even members of the legal profession were in the same quandary that is in so far as the opinion being of a character which would settle the question of legal rights. In a word, as I recollect it, the supreme court said it could not decide a hypothetical case,

that the question of legal rights could only be finally determined when a concrete case was before the court. '
We had then to consider whether or not all this power development should be held up indefinitely simply because we had not a definite finding on the points submitted to the supreme court. However, the court laid down very definitely certain principles, and those principles were a guide of the administration. What we eventually decided to do was this. So far as the province of Quebec was concerned, there seemed to be no doubt whatever that the power developed within the provincial area belonged to that province. We undertook to say that any power resulting from the works that were constructed for the purpose of protecting navigation should be treated as though it belonged to the province of Quebec, even although the legal decision to that effect had not been given. But in order to be fair with all concerned, we took precisely the same position with regard to the province of Ontario. We said to Ontario: while we cannot give you a legal right in respect to these matters, we will treat you as though you had that legal right. In other words, in dealing with Ontario power rights we were prepared to treat the province of Ontario in precisely the same way as we were prepared to treat the province of Quebec.
At the time that we were awaiting the decision of the supreme court we were in conference with Premier Ferguson of Ontario and Premier Taschereau of Quebec, and members of the Dominion government, with a view to seeing if we could not mutually agree upon terms that would be acceptable to the provinces as well as to ourselves. We had two conferences. After the first conference we believed we had everything satisfactorily settled. Apparently the premiers of the two provinces went away feeling that we had said we would concede what they contended were their legal rights, whereas our contention was that we could not say what their legal rights were but we would treat them as though they had the legal rights they asserted though we were not in a position to give them legal rights. The whole purpose of the conference was to enable us to meet the situation by way of conference rather than as a matter of law.
We had a second conference which was held, if I recollect aright, on the day the decision of the supreme court was given out. At that conference I drew up and presented in the form of a definite memorandum the attitude the federal government was prepared to take in dealing with the provinces of Quebec and Ontario. By way of confirmation of what I

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am now stating, may I refer to a file of correspondence which took place between Premier Ferguson of Ontario, Premier Taschereau of Quebec and myself in arranging for these conferences. Without going into the correspondence at any length may I quote the essential points from these communications. The first is under date of April 17, 1928, and is a communication relating to the St. Lawrence waterway development. I sent to Mr. Ferguson, Premier of Ontario, a letter having the following as its concluding paragraph:
In our view, as the correspondence indicates, the next step should be conferences with the governments of the provinces of Ontario and Quebec. I hope that it will prove convenient for you to take part in such a discussion, as to which T shall write you more definitely at the close of the session.
I must correct one statement I have made. Aifter that communication which was dated April 17, 1928, Mr. Ferguson, owing to reasons which he outlined in subsequent corespond1-ence, indicated that he was not able to come down for a conference at the time, and the conferences which I said had taken place in 1929 I should have said took place in 1930. In the meantime however there was correspondence, which I have under my hand, showing the extent to which we were proceeding with both provinces in the same way. For example, on May 3,	1928, Premier
Ferguson wrote as follows:
Some four or five years ago this government, through its electrical agency, the Hydro-Electric Power Commission of Ontario, filed with the proper department at Ottawa plans for the development of power on the international section of the St. Lawrence river. We requested the approval of these plans and at intervals since that time have urged that early action be taken towards such approval. We still await a favourable reply. The government of Ontario feels that the power problem is the most pressing, and is quite separate and distinct from the question of international navigation project. No matter what may be the outcome of the negotiations for the canalization of the St. Lawrence, it would appear that many years must elapse before the project can be completed.
As I have explained, questions of power and of navigation were so inseparably intertwined with regard to the international section of the St. Lawrence that as a government we felt it impossible to conclude any negotiations relating to the international section of the St. Lawrence at the time Mr. Ferguson hoped they might be concluded. One of the causes of the delay was a certain difference of view between the engineers of the province of Ontario and those of the Dominion with respect to what would be the best route for a canal, and in that connection we asked that a conference should be held between the engineers, which conference was delayed for a
time but finally took place, moving the project along a step further with regard to the St. Lawrence.
In a communication dated August 14, 1928, to Mr. Ferguson, among other things I pointed out the following:
This objective which you emphasize so strongly can be attained only through an adequate solution of the problems of engineering and finance, of constitutional authority and of international adjustments which are involved.
Consideration of the development of power from the St. Lawrence cannot be separated, you will agree, from consideration of the conservation and development of this great national asset for the paramount purposes of navigation and commerce.
Then again:
Nor can we overlook the difficulties as to jurisdiction involved by the division of authority under our federal system.
And a little further:	[DOT]
So marked has been the divergence of view as to legislative control and proprietary interest in connection with many phases of water-power development that the representatives of the province of Ontario at the recent Dominion-provincial conference joined in a request to the Dominion to submit a ease to the Supreme Court of Canada. This has been done, after consultation with provincial representatives, and the case will be heard at an early date. While it is not necessary to postpone all further action until the respective rights of the Dominion and the provinces have been judicially determined, it is obvious that the results of this appeal to the courts, undertaken at the request of the provinces and the full cooperation of the federal government, may affect very materially the view of either authority as to the feasibility of the various methods of construction and finance.
That bears out what I said as to one of the causes of delay in not being able to meet the situation as far as Ontario was concerned. I concluded that communication by saying:
I trust that in the way indicated we may find it possible to cooperate effectively for the advancement of the interests of the province of Ontario and of the Dominion as a whole.
I shall not go further into this correspondence, because it deals more particularly with the St. Lawrence development, but at the conference which was held in Ottawa with Premier Taschereau and Premier Ferguson, in the early part of last year, after we had approved the Beauhamois plans, we made a statement of our policy with respect to approval of plans generally and with respect to powers on the St. Lawrence. That memorandum was as follows:


Mr. CAHAN:: The date, please?


William Lyon Mackenzie King: This was about March, 1930. The memorandum reads:
With due recognition of the paramount rights of navigation and subject to the observance of
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any necessary international requirements, the Dominion government is prepared to adopt a practical policy for water-power development in navigable waters as follows:
(1)	Where a province desires to undertake power development in navigable waters, its right to do so shall be recognized, conditional on the provision of the necessary navigation requirements.
(2)	Should the Dominion government at any time undertake or authorize the construction of any canal or other work for the improvement of navigation, it would be prepared to make available to an approved' provincial agency the surplus -water-power developed beyond that needed for the operation of the locks and purposes of navigation, on a basis equivalent to that which would govern if the provincial agency had itself undertaken the work as a power development scheme.
(3)	In either case, should the use of Dominion or provincial property be required or the riparian or other property rights of the Dominion or province be interfered with or affected, the acquisition of such property, or the authority to interfere with or affect such rights, could be made the subject of a special agreement in the particular circumstances of each case.


Charles Hazlitt Cahan: Was that carried into effect by any official order in council?


William Lyon Mackenzie King: No, it was not. It was communicated to the premiers of Ontario and Quebec. I am reading the memorandum to make clear that with respect to whatever was done with regard to Beau-harnois, was part of a general policy which applied to all parts of the St. Lawrence, and to all provinces; It was not something peculiar to the province of Quebec but, as I say, it was a matter of policy which was generally applicable. And this particular communication was sent both to Premier Taschereau and to Premier Ferguson as indicating our point of view, with the hope that it would be acceptable to them.


Richard Bedford Bennett: Their replies were not in that sense.


William Lyon Mackenzie King: No, they would not accept what we suggested. As a matter of fact the provinces have always contended that they had full legal rights and they would not accept anything which would not accord them those full rights. Our view was that we were not in a position to say that they had full legal rights, though we were in a position to treat them as though they had. As I remember, they claimed that they were entitled to even better treatment than the terms we required of the Beauharnois canal people because of certain conditions which we had imposed in the contract made with them.


Richard Bedford Bennett: It was a year after the Beauharnois order in council.


William Lyon Mackenzie King: Yes; but what I am trying to point out at the moment is that when we dealt with the Beauharnois matter we were trying to settle it in the light of what would apply to the whole of the St. Lawrence development. We were endeavouring to lay down principles which would govern with respect to any similar situation that might arise at any time. And I think I made that quite clear in this House of Commons when parliament met in February 1929.
I wish to touch briefly upon other important features which have a bearing on the matter. I need not say anything with respect to the different meetings of the cabinet beyond the fact that the application came before us first of all in the month of November. To safeguard our action, particularly with respect to the question of the diversion of water and our rights in that particular, we obtained from the law officers of the crown a written opinion on the subject. That written opinion appears in the records of the proceedings before the committee and I need not quote it at the moment. But I mention it to indicate that we were seeking the best legal opinion that we could obtain to guide us in our decision. After the Department of Justice had given its opinion the whole Beauharnois situation was considered in the light of that opinion. Later, when the supreme court gave its decision, the matter had again to be reviewed in the light of the opinion of that body, and it was not until after the supreme court had given its decision that it was possible to begin work on the final drafting of the order in council which contained the conditions that were imposed upon the canal people.
Now, parliament opened in 1929 on the 7th of February. And here I wish to speak particularly of what I regard as all important. In the course of the inquiry before the committee an effort was made, it seemed to me, to have it appear that there had been great delays in the granting of approval of this application-. As far as I can gather from a reading of the evidence, questions were asked in a way which sought to have it appear that this matter was being dragged on over a considerable period of time.


Charles Hazlitt Cahan: For just a little over a year. The application is dated January 17, 1928, and the order in council, P.C. 422, is dated March 8, 1929.


William Lyon Mackenzie King: It never came before council for consideration until the month of November. Up to that time it had been a departmental matter, and Mr. Jones's letter makes it pretty plain that until he

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spoke to me I had no knowledge that any application was in .the department. However, the point I am making now is that an effort has been made to have it appear that action was being delayed. The fact of the matter is that at the time the press of the country was asking-Why this haste? Why this hurry? All the while the course the cabinet was taking was one which would insure every possible safeguard. The promoters saw no reason why they should not get their approval before the supreme court gave its decision; and while waiting for that, they saw no reason why approval should not be given before parliament met. There were two very important considerations which the cabinet had to take into account. The position we took in council was that we would not grant approval of the application until we had before us the opinion of the supreme court. If the opinion of the supreme court had been adverse to what was being contemplated, that would have settled the matter; we should then have known definitely that our powers were restricted in the way indicated by the court. But when the opinion of the court came, it did not afford us very much light or guidance. The other consideration was the meeting of parliament. If we had approved the plans before parliament met, there is not a member on either side of the house who would not have said, ''Why all this hurry? Why did the government approve the plans before parliament met? Why could they not have waited? They knew we were meeting in February and they could have put it off until parliament met." Well, we did put it off, and I took care to let parliament know as soon as it assembled that we had this very matter under consideration.
I did so deliberately in order that every hon. member of the house might be. on his guard with respect to what was being done in the consideration of this particular project. I sought to indicate to parliament at that time what the considerations were of which we had to take account.
May I add this further point. There has been a good deal of talk about political considerations and influence in this matter. So far as I knew-and I think I am right-Mr. Jones, who was the prime mover in seeking to get the plans approved, was a strong Conservative, having been one all his life. I believed, in dealing with this matter, that the government was dealing with a Conservative corporation. That did not make any difference in our obligation; we had to view the question on its merits. But far from considering that we were approving any plans with which any political friends of the administration
were concerned, our conception, certainly mine, was that the main factors in the company were Mr. Jones and those who were associated with him. As regards Mr. Sweezey, I did not know what his politics were. I have never met him; I should not know him if he were to come into this room at this moment. That may be an unfortunate circumstance, but nevertheless it is true. I know nothing about his politics. My right hon. friend the Prime Minister told me last night the he understood Air. Sweezey was thought of as a Liberal candidate in the last election.


Richard Bedford Bennett: In Kingston.


William Lyon Mackenzie King: This is the first I have heard of it; my right hon. friend has more information in this regard than I have. That is the position with respect to the company.
Senator McDougald's name has been brought into the discussion. At this point let me say that up to and until after the time of the approval of the application, I had no knowledge that Doctor McDougald had an interest in or was concerned, directly or indirectly, with this company. He had never spoken to me with regard to these plans at any time prior to or for a considerable period after the application had been approved. I refused to discuss with Doctor McDougald at any time any matters with respect to the Beauharnois situation. I said at all times to him and every one else that the project would be considered only on its merits. That was the position both before and after these plans were approved.
I want to make these three statements most emphatic. Let me repeat them. I believed, and I think the cabinet believed, that the company which had been granted this charter was in the main a Conservative organization.


Some hon. MEMBERS:: Oh, oh.


William Lyon Mackenzie King: That is the truth.


Mr. MOTHERWELL:: Wasn't Jones a Tory?


Richard Bedford Bennett: They would have been apt to get a charter in Quebec.


William Lyon Mackenzie King: Mr. Jones was the only man with whom I had discussed this matter. He surely had not the authority to negotiate in the way he did unless he was the prime mover in the matter. I knew Mr. Jones as a very able business man, one who was generally successful in what he was undertaking in the way of business and industrial

the government at the time had been moved by political influences or by any consideration of the kind with respect to what it did? The government acted wholly and solely on the merits of the case, seeking to be perfectly fair and perfectly impartial, and the government advised this House of Commons in advance of what their full power of control over the situation would be. May I read the words? This was on February 25, 1929: Further with respect to the portion of the St. Lawrence which is wholly within Canada and indeed in respect to all navigable waters, this parliament is already secured in its powers of supervision under the Navigable Waters Protection Act, which gives to parliament the right not merely to review but to annul whatever may be done by the governor in council should it be shown that in any particular the action taken is unwise.
I ask hon. members to contemplate the significance of that statement at that time. That was not a statement made after there had been an investigation. That was not a statement made after approval had been given. That was a statement made a week or two in advance when this whole matter was being finally considered and the drafting of the clauses that were to protect the country and protect the rights of the people and the provinces were being most carefully considered and weighed. I continued:
Let me give to the house the sections of the Navigable Waters Protection Act "bearing on this question. Section 4 reads:
"No work shall be built or placed in, upon, over, under, through or across any navigable water unless the site thereof has been approved by the governor in council nor unless such work is built, placed and maintained in accordance with plans and regulations approved or made by the governor in council."
Section 10 provides:
"The governor in council may make such orders or regulations as he deems expedient for navigation purposes respecting any work to which this part applies or of which the plan and site are approved under any act of the parliament of Canada.
2. The local authority, company or person constructing, owning or in possession of any work shall be subject to such orders or regulations."	_
I come now to section 12, which is the important provision. This is the section which I wish hon. members to note particularly: "Parliament may, at any time, annul or vary any order of the governor in council made under this part."
Mr.' Adshead: Parliament?
Mr. Mackenzie King: Yes, parliament. Subsection 2 goes on:
"Any action of parliament in that behalf shall not be deemed an infringement of the rights of the local authority, company or person concerned."
Then I went on:
Where, then, is the need for adding anything to this particular act? rMr. Mackenzie King.]
That had reference to something that the hon. member for North Winnipeg (Mr. Heaps) had been discussing, I brought m the Beauharnois matter in that discussion. Someone asked me at the time, "Why did you bring the Beauharnois matter into something that has to do with natural resources?" That I believe was the question that was then under consideration. I replied that I was deliberately availing myself of 'my earliest opportunity to let hon. members know the exact position in regard to matters that were under consideration in the cabinet. I continued:
My hon. friend the member for North Winnipeg (Mr. Heaps) asked me the other day as to whether parliament would have the right to review certain matters which might be in contemplation. He has no need^ for concern as to the powers of parliament with respect to the possible acts of the government he had in mind whether they were of to-day or of six mopths ago or are still of the future; because parliament, with respect to the protection ot navigable matters under the act as it stands, has the power not only to review but to annul whatever may be done by the governor in council. Words cannot be stronger.	.
A little later I said:
I am merely seeking to make plain the points that bear particularly upon the St. Lawrence water development. I am not dealing with the other question. To that I have referred only incidentally. But this is very material to the question of the St. Lawrence development with respect to the rights of this parliament touching any act of the government by order in council or otherwise.
Mr. Garland (Bow River) [DOT] Would it not be better, sometimes not to pass an order in council than to have to annul it afterwards?
Mr. Mackenzie King: My hon. friend has asked a reasonable question, and I am glad that he has done so. There are some matters which are administrative in character, and others which are legislative; there are some questions which are technical and which can be dealt with only by experts, and other questions which are suitable for discussion in a deliberative assembly. When one comes to such questions as sites for water-power, the volume or rapidity of water passing over a particular point, the question of the effect of obstructions upon the levels of waters, the effect of the ice flow in certain localities, all of which are important questions when we are dealing with navigation, these questions can be settled, and settled only by expert engineers. They cannot be settled in a deliberative assembly. Most questions that relate to public works are of that character. They are questions for the experts of the government departments, and parliament in its wisdom has made clear that it is not advisable to prevent development by requiring in the first instance that parliament shall perform functions or duties which it is not at all fitted to perform. That is the reason this section is worded in the way it is. In other words, so far as provincial rights may be concerned, what :* sought by tile Navigable Waters Protection

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Act is to allow the full development which provinces may seek with respect to power but where navigation is likely to be affected to assure at the same time that the general interest will be wholly and adequately secured.
That was on February 25. I am not going to weary the house much longer with citations, but I wish to give one more, and this is from what I said in the house two days later, on February 27, which bears on this matter. The citation is from the revised Hansard, page 525:	.
I think it is apparent that most of the problems respecting resources relate to the provinces. The provinces are primarily concerned with the natural resources, whether they be lands, mines, timber, waterpowers or other resources. I can conceive of nothing easier than to raise in this country the old issue of provincial rights if the federal government were to go beyond its jurisdiction and seek to perform in dealing with resources that belong to provinces acts which parliament never intended should be performed by a federal government. We have to be particularly careful in this Dominion, which is composed of provinces as well as a federal authority, to see that powers given to the Dominion for one purpose are not used to frustrate the rights of provinces as regards other matters which have been entrusted to them.
A good deal of discussion has taken ' place in connection with power resources, and I want to say a word in that connection, in order to make perfectly clear wherein the administration of water-powers within a province may belong to the province and not to the Dominion, and wherein there may be a difference of views as to powers generated in navigable waters. The question has arisen whether, under the rights which the Dominion has, with respect to the protection of navigable waters, the power that results from works constructed in a river for the purpose of improving navigation, would belong to the Dominion or the province. That question has been referred to the Supreme Court of Canada, and the answer that we have received, as I made clear the other day, is, to say the least, indecisive as to what, in that regard, are the rights of the respective parties
Some persons reading the judgment may say that the emphasis inclines in one direction, while others may say that it inclines in the other. I think the judges have indicated fairly clearly that they must have a concrete case before them before they will attempt to give any real decision as to the respective rights of the Dominion and the provinces. Wliat I wish at the moment to make clear is that, as regards navigable waters, the authority given to parliament to protect navigation and the means taken by parliament to exercise that authority enables the government, with respect to any applications that come before it for approval of plans of any company generating power in navigable waters, to impose such conditions as, in the opinion of its experts, are necessary to safeguard navigation. But it was never intended by any legislation of which I am aware, that the power which was given to the Dominion to protect navigation, was a power to be exercised to frustrate provinces
in the legitimate development of their own natural resources. That is an aspect of its rights and obligations which the government has to consider pretty carefully.
We have had placed before us by a company in the province of Quebec an application for the approval of certain plans that are essential in the development of power under a charter which lias given to that company by the province of Quebec. From much of the discussion in the public prints, one would think that the Dominion government was giving a charter for the right to develop water-power in the province of Quebec. The government has neither the power nor the authority to give a charter such as the one I refer to. The legislature of Quebec protects its own water-powers; that legislature gives its charters to companies in the light of its administration of its resources and what it may wish to have done with them, all that this government is called upon to do under the legislation which has been passed by parliament to protect navigable waters-navigable waters being a subject which by the British North America Act, is assigned to the Dominion parliament for protection and de-velopment

is to say whether or not those plans prejudice in any way or will injure the needs of navigation in the waters in which the works are to be placed or to which they may be related. When plans are submitted they do not go before a body of ministers; they go to expert engineers who examine them to see whether or not, they would be an obstruction to navigation, li they are, then the Dominion has no right to approve them. If they are not, the Dominion has then to consider whether there are other obligations of a general character of which account has to be taken? Where the river St. Lawrence is concerned, I submit there is a very real obligation of which the Dominion must take account: the Dominion, is obliged to see that any step which is taken under a provincial charter shall not be of a character which in any way will, in the first place, interfere with navigation, or, in the second place, prejudice [DOT]any possible scheme of development of navigation of which account ought to be taken because of the important national interests involved or to be considered. In other words, in regard to the St. Lawrence, the government would not only be justified in refusing but ought to refuse to approve any powder plans that would have the effect of prejudicing the development of the St. Lawrence as a great ocean shipway. But if engineers and experts, whose business it is to look into these matters, advise the administration that not only do plans submitted not obstruct or appear in any way as an obstruction, but that they may also be made to serve to help the larger object, then the government has to ask itself whether it is justified in preventing an industrial development in the matter of water-powrer in a prov-nice where it finds navigation fully safeguarded simply because under an act of parliament, it has been given the duty of safeguarding navigation. I am bringing this up at the moment because it also bears on the resolution of my hon. friend.
In matters of government certain acts are legislative; others administrative; while parliament has given to the executive power to approve plans, has parliament thereby parted with its power of controlling any situation, should it be found that the executive in the exercise of its duty and authority has made


Richard Bedford Bennett: Two.


William Lyon Mackenzie King: Two, was it?
I thought it was one.


Richard Bedford Bennett: Public works and railways.


William Lyon Mackenzie King: But no action was taken upon it. So far as the application was concerned, the government's part consisted in turning it down. Now, if some action had been taken on it, I suppose it would have been said that that was the result of political influence. I ask hon. members to be just in this matter, and see how every question has its two sides. I say if the government had approved of that application we would have been told that it was due to political influence. As it was turned down, I suppose the insinuation is that this action was also because of political influence being exerted somewhere.
At any rate the Sterling Industrial Corporation disposed of its interests, whatever they were, real or unreal

I think from what I have read in the evidence they were unreal-about the time at which these plans were approved. Because of that fact and * other facts that have been brought out in evidence, it is assumed that some political influence was being exerted. May I say with respect to the Sterling Industrial Corporation that I never knew of the existence of that corporation until this committee of inquiry held its sessions, I had never known there was such a corporation in existence, and I doubt very much if any of my colleagues other than possibly those of the department, to which the application went had any knowledge of the existence of any corporation of the kind.


William Richard Motherwell: I never heard of
it.	.


William Lyon Mackenzie King: I never heard of it, knew nothing about it, had no conception in the world that anybody associated with me in a friendly way, in a political way, or in any other way had anything to do with any corporation by the name of the Sterling Industrial Corporation. All my knowledge of that particular concern has come since this inquiry-and I must say it has come as a very great and a very sad surprise.
Now, just a word as to political influence. I agree with what the hon. the Minister of Immigration said when he drew attention to the fact that Mr. Sweezey had curious notions as to how progress was to be made with respect to industrial enterprises through the exercise of political influence. As the minister says, either he or those associated with him retained members of different legal firms, some that could not possibly have had any influence, some that might be presumed co have influence, but evidently on the theory with respect to all that if there were enough of them sooner or later their influence would make itself felt. Now, may I ask this question, and I ask hon. members to think of it carefully: Is it any reflection upon the government of the day that a company paid those legal fees, unless it can be shown that in some way the result of those payments had its effect and influence upon the government? Remember this, it is stated in the evidence that some of these payments were contingent upon the plans being approved. Let me pause for a moment at this poinfct. There was before the Supreme Court of Canada at the time certain questions as to the right of the government to grant approval of the plans. Is there not just as much ground for saying that legal influence was bought in order that it might be exerted against the Supreme Court of Canada as that it might be exerted against t'he government of the day ? My right hon. friend the Prime Minister shrinks back in horror. May I ask him, as Prime Minister of this country, does he not feel his honour to be as great as the Chief Justice of Canada feels his honour to be? Why should anyone who is the head of the administration, why should any member of the government, feel that a government composed of honourable men is any more venal than any court of judges in this country? I say that in the circumstances anyone who was so ill-minded as to take the view that those legal firms were financed for the purpose of bringing influence to bear, are bound to say that that influence would have had to operate on the supreme court just as much as on the government. It is no reflection on the supreme court to say that, because everybody knows that the supreme court would never yield to any influence of the kind. It is equally no reflection on the government of the day. After this committee of the house has done its best with respect to every witness to find some way in which it could be shown that political influence was brought to bear upon the government, there is not a
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single statement in all the evidence that will bear out such a suggestion.
Now, may I go a step further. Will he say it was a reflection upon the legal profession.' Will members of the legal profession say it was?


Richard Bedford Bennett: Yes.


William Lyon Mackenzie King: My right hon. friend says "yes." - No, I do not think so.


Richard Bedford Bennett: Yes.


William Lyon Mackenzie King: I do not think it was.


Richard Bedford Bennett: Contingent fees are forbidden by the ethics of the profession, and by statute in Quebec.
Mr. MiAOKENZIE KING: My point is this: does he feel it was a reflection upon himself as a member of the legal profession that these moneys were paid to members of his profession in order to bring influence to bear? That is my point.


Richard Bedford Bennett: Indirectly, certainly.


William Lyon Mackenzie King: I do not hold that view. I say there are in the legal profession honourable men, and in the main they constitute the profession. There is no more reason to feel they are reflected upon by anything dishonourable done by a few members of the profession than there is reason to feel that the government of the day or the Supreme Court of Canada is reflected upon because of some supposed influence that has been proven never to have been brought to bear upon either.
I feel, Mr. Speaker, that in justice to the government of the day, that is one factor which should have been brought out very prominently. When I speak of the government of the day, I am speaking of the government of Canada. After all, as hon. members of this House of Commons, this parliament, each of us who are its members has something at stake with respect to the government of Canada. Why should any hon. member wish to have it appear throughout Canada and throughout other countries that governments in this country are venal? Surely our politics do not need to be carried that far. We ought to rejoice that this parliamentary committee, sitting as it has been for weeks and examining witnesses under pressure, has been unable to show anything in the way of direct influence, or any influence at all of a political kind that had a bearing upon the situation. Instead of innuendo, instead of insinuation, as there is in many of the questions that were put,-and I am afraid as

there is with respect to some of the evidence as quoted in the committee's report-I think there should have been a direct statement by the committee that, having gone into this whole matter very fully and very carefully, they could say that any political influence that had been paid for in any Way by this company had not been brought to bear at all upon the administration. I say if that statement had been made I would find it much easier to support the report of the committee. But when the report is so drafted that there is insinuation and innuendo in. the absence of statement of matter of fact, I confess that notwithstanding as the minister has said, that all the members of the committee subscribed to a draft report, I shall have to think twice before I can feel that concurrence in that report, might not be construed in the country as an endorsation of its innuendos and its insinuations.


William Richard Motherwell: Here is one who won't approve of it anyway.


An hon. MEMBER:: There are lots of others, too.


William Lyon Mackenzie King: Now may I quote just two or three, lines from an article written by one of the ablqst Canadian journalists who has followed this investigation very closely and who gave at its close a brief review of the entire inquiry. I quote from an article by Mr. Pauli Reading, special correspondent for the Ottawa Citizen, copyright by the Southam Publishing Company. The article is dated July 23, 1931. It was written as I have said at the conclusion of the inquiry. This is what Mr. Reading says after having followed the proceedings of the inquiry from day to day:
It has not been actually shown that political influence was bought in any quarter, though it may have been generously paid for.
That is the, opinion of a keen and very able journalist who was watching the evidence day by day in order to see what would be the outcome of this all-important question of whether political influence, had been brought to bear on the government when it was approving these plans. He says, and I believe every journalist, and every person who attended the sittings of the committe will endorse these words:
It has not been actually shown that political influence was bought in any quarter, though it may have been generously paid for.
May I say this also: We all have our friendships. Are we to understand that every man is responsible for every act of his friends? Unless every hon. member is prepared to say

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that this is his view, and that such a law should apply to himself, then I say he owes it to others to apply his own view to them, as he would expect it to be applied to himself. The fact that certain friends of the administration, or of individual members of the administration, may have done things which probably no one regrets more deeply than they do, is not even circumstantial evidence that those with whom they shared friendship have been in any way associated with them in transactions of the kind.
I ask this honourable house : Is there any relationship closer than that of father and son? Will hon. members apposite, or will any member of this parliament or anyone in this country say that because a son commits indiscretions and does things which will not bear the light of day his father is responsible for those acts, that as a result of them his father has been corrupted. He may break his father's heart but he will not break his father's character. He. may even help to reveal something of the beauty and the strength of a father's character, and what is true of that very intimate relationship of life is true also of the less intimate but hardly less sacred relationship of human friendship. I say that any hon. member who would seek to imply by insinuation or innuendo that any act of a friend reflects upon the one who has been sharing his friendship is playing a rale unworthy of anyone who regards himself as a man in the true sense of the word.
Now may I come to the significant statement which has been made during this inquiry? It was brought out during the investigation that very large sums of money were paid to two members of the party who were, acting as its treasurers in the recent political campaign. I refer in this regard to the evidence given before the committee. Mr. Sweezey was being examined by Mr. White, as follows:
Q.	Then you spoke of contributions to the Conservative party. By the way, during what period were those contributions of which you have spoken made?-A. Oh, they were sometime prior to the last election, the last federal election, not very long before.
Q. That was July 28th last?-A. Well, it was sometime previous to that.
I ask hon. members to fix that fact firmly in their minds. Approval was given these plans on March 8, 1929,' and Mr. Sweezey says the money he gave was contributed during the campaign in the summer of 1930. There is no evidence that a single dollar was given by that corporation to anyone until the campaign of last year. The evidence is that the money was contributed in the thick of
the campaign. I. say, Mr. Speaker, that in view of the . evidence being what it was in that particular, the report which was brought in by the committee should have disclosed that fact prominently. It should have been clearly stated that there was nothing to sfiow that the government as a whole or a single member of the government, was influenced, directly or indirectLy, by any monied influence or political influence of any kind in the approval of the plans; that it was not until the general election of last year that moneys were paid as a political contribution.
Why were those moneys paid? Perhaps the best way to answer that question is to take the evidence of the witness himself, the one who made the contributions. Here is what Mr. Sweezey says, at page 823 of the evidence:
By Mr. White:
Q. Inasmuch as it has been suggested that we go into the matter of provincial campaign funds, was any political contribution made to the Ontario Conservative party?-A. Yes; again Mr. Griffith can give you particulars on that. I know we made contributions to someone who represented himself as standing up for an Ontario fund of this kind.
Q. To whom did he make those representations?-A. To me.
Q. To you?-A. Yes, sir.
Q. And what did he say to you in that regard?-A. That he thought that 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.
Let me hasten to say that I have not selected that passage because mention is made of the Conservative party.


Some hon. MEMBERS:: Oh, oh.


William Lyon Mackenzie King: Hon. members opposite may laugh, but I have selected it because it is the one statement in Mr. Sweezey's evidence which gives his conception of what political campaign funds are for, and discloses what Mr. Sweezey had in mind when he was making contributions to campaign funds. Mr. Sweezey makes it very apparent there that he is not thinking of something that has taken place in the past; he has in mind what he hopes will take place in the future.


Some hon. MEMBERS:: Hear, hear.


William Lyon Mackenzie King: Nothing could be more plain. Hon members say, "hear, hear;" I hear my hon. friend, from East Algoma, who is a bit of an authority, saying

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"hear, hear." Perhaps he knows. I repeat: Here are Mr. Sweezey's own words:
.... 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.
I can say that if Mr. Sweezey took that view I am very sorry for him.


Some hon. MEMBERS:: Hear, hear.


William Lyon Mackenzie King: I hope hon. gentlemen opposite do not agree with him; I hear some saying "hear, hear." Remember that this remark of Mr. Sweezey's applies as much to the government of my right hon. friend as it does to the government of which I was the head; his is a democratic government, just as ours was a democratic government. That is not a statement limited to Liberal governments; that statement applies to all governments in the country. That was the view Mr. Sweezey entertained as promoter, and my hon. friend the Minister of Immigration and Colonization (Mr. Gordon), who moved concurrence in the report, touched on that very point himself. He said he could not understand how a man could believe that governments were moved in that way. I agree with the minister in that. I say that any man who thinks that he can sway governments by the size of his contributions to political funds has not the first knowledge or understanding of human nature-perhaps I should say character-worthy of the name. What evidence is there on which to condemn an administration because of the fact that some man makes a very large contribution to a political campaign fund? All would depend upon what as a result was done. That company was undoubtedly looking for something in the way of consideration from governments. They are looking for something more from my right hon. friend to-day.
We provided in the order in council that if the company failed in any particular to do what was expected of them the government should always have the right to take over the whole concern. We have protected the public rights in every respect, where it appeared that the company might fall short in anything it was doing. Had we left out that consideration, had we not put in a clause in the order in council, with a view to safeguarding the government of the day, whatever might be its complexion, in the event of the company's failing to fulfil its obligations, then certainly we should have been at fault. I am sorry I have not the time to put on record all the safeguards that were

provided. They are in the order in council, and they show that in every particular we have protected the rights of the public. And having so protected the public rights, I say that in the event of the company coming for further consideration, its application should receive that consideration on its merits and on its merits only.
I hope I have made that as clear and emphatic as it is possible to make any statement. I say if he was thinking of the late Liberal administration, that Mr. Sweezey little knew the character of the men with whom he was dealing if he supposed that any contribution of his, however large, would influence in the slightest the consideration of any question he or those associated with him at any time might bring before the cabinet. I say he little understood the character of the men who were handling the affairs of the country at that time if that was his view.
Now I come to another point. Unfortunately this report contains very much in the way of innuendo and insinuation. I regret to have to say that, but no one can read the report without seeing that certain things appear in it which can only be there with a view to conveying a certain implication. The minister said to-night that the members of the committee had had an opportunity to read over the report clause by clause and then subscribe to it. I gather from his words that this was all the opportunity they had. I think I am right when I say that no member of the committee ever saw the report in its final form, nor had a chance to read it through in its final form. The minister states that it was drafted-


George Gordon: I wander whether I might interrupt the right hon. gentleman, so that there may foe no misunderstanding. As chairman I prepared the draft report. The committee started ait nine thirty in the morning, going over itfaalt draft report, taking up paragraph after paragraph, page after page. I signed at the foot of each page after the committee had subscribed to the correctness of what was disclosed on each page. The whole day was spent in assembling the facts. Whatever inferences are contained in the report, that report was the unanimous report of the committee.


Ian Alistair Mackenzie: May I
have the same indulgence as the minister-


Pierre Édouard Blondin: Has the leader of the
opposition concluded?


Ian Alistair Mackenzie: This is
on a point of order.

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Pierre Édouard Blondin: The hon. gentleman is
not in order at the moment.


Ian Alistair Mackenzie: It is a
point of order with reference to the interruption of the Minister of Immigration.


William Lyon Mackenzie King: If the hon.
gentleman is not in order I wil'1 refer to the statement of 'the minister. I do not think-


Ian Alistair Mackenzie: And I
wish to challenge that statement.


Some hon. MEMBERS:: Order.


Ian Alistair Mackenzie: Mr. Speaker-


Pierre Édouard Blondin: The hon. member has
said that he is rising to a point of order. What i3 the point of order?


Ian Alistair Mackenzie: I wish
to challenge the statement of the hon. gentleman-


Pierre Édouard Blondin: That is not in any respect a point of order. Unless the leader of the opposition has concluded his speech the hon. member may not speak now.


William Lyon Mackenzie King: 
George Gordon: May I interject-


Some hon. MEMBERS:: No.


William Lyon Mackenzie King: I wish to have the hon. member make his statement.


Ernest Lapointe: Why not Mackenzie?


Richard Bedford Bennett: Because the minister is
chairman.


George Gordon: I regret having to interrupt, but I wish to make the position clear. I take full responsibility for the drafting of the report which was submitted to the committee. Rightly or wrongly, I conceived it to be my duty to see that that report should not go out to the public until it was tabled in this house for the information of the members. We went over the report paragraph by paragraph, page by page. There were deletions and there were additions. The original has been preserved by the clerk of the committee, to be seen by any member. Every change in the draft report was initialled by me, and the bottom of the page signed by me. Great discussion took place on every paragraph of the report, and at the conclusion, when all members were agreed and satisfied-


Ian Alistair Mackenzie: No.


George Gordon: Well, read the proceedings of the committee and see.


Ian Alistair Mackenzie: I want
to ask the minister a question. Is it not a fact that at the conclusion of the proceedings in camera, at about half past five, I asked whether the Liberal members of the committee might have permission to adjourn and consider their attitude to the report as a whole? I protested against the minister submitting the report to parliament as a unanimous report without giving us an opportunity to consider it.


Some hon. MEMBERS:: Hear, hear.


George Gordon: Hon. members may
applaud that statement, but what I have said I have said with a full consciousness of the seriousness of it. When the report was finally revised, the hon. member for Vancouver Centre (Mr. Mackenzie) asked me whether he could have a copy to submit to his leader.
*1374
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Ian Alistair Mackenzie: That is
right.


George Gordon: I said to the hon. member that the report had not been in any way referred to the Prime Minister; not a thing had been referred to him.


Some hon. MEMBERS:: Oh, oh.


George Gordon: Laugh if you will.


An hon. MEMBER:: Answer the question.


Ian Alistair Mackenzie: Is it
not a fact that I asked for an adjournment?


Some hon. MEMBERS:: Sit down.


Ian Alistair Mackenzie: I will
not sit down.


Some hon. MEMBERS:: Sit down.


Ian Alistair Mackenzie: Is it
not a fact that I asked for an adjournment of the committee and to have the committee reconvene?


George Gordon: I will leave it to hon. members of the committee as to whether my recollection is correct or incorrect. The clerk of the committee says it was unanimous, and so does the report. I made it abundantly plain that I considered it to be my duty to see that the report was a report from this select committee and not one influenced by any advice which might come from the leader of the opposition or others.


William Lyon Mackenzie King: My point was that if hon. members had had a chance to read over the report, possibly many of the phrases would have been altered before the report finally came down. There are in the report what might be regarded as insinuations carrying very serious reflections. Reference, for example, has been made to the appointment of Mr. Henry as Deputy Minister of Railways and Canals, and in this connection the report says:
(4) Mr. Henry joined the Department of Railways and Canals in 1912 as inspecting 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 yeai as Director of Bureau of Economics. He remained with the railways until the 14th February, 1929, when he was appointed Deputy 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.
Why were the words "on the recommendation of the Prime Minister, by order in council, P.C. 102 (Exhibit 76)" put in the report, unless it was an effort to connect the Prime Minister of the day with the appoint-

ment of Mr. Henry? My hon. friend states that he wrote this report with his own hand, but I would refer him to a statement made in this house a short time ago by one of his own colleagues and to the answer which was made. A question was asked on May 21, 1931, of the Minister of Marine (Mr. Duranleau) as to the appointment of a deputy minister, as follows:
Mr. Power:	May I ask the minister if the
rumour which has been circulated is true, that Mr. Lucien Dansereau is to be appointed deputy minister?
Hon. Alfred Duranleau (Minister of Marine) : I supjtose my hon. friend knows that these appointments are in the hands of the Prime Minister. According to law and practice, the heads of the various departments are appointed by the Prime Minister, so the question will have to be directed to him.
It i3 quite clear from this reply that hon. gentlemen of the administration had considered the question of who made tho appointments of deputy ministers, and they knew that the practice was for the Prime Minister to make such appointments.


George Gordon: The committee was in doubt as to who made the appointments, so they sent out for a copy of that order in council.


William Lyon Mackenzie King: The minister's reply was made on May 21. In the light of that knowledge on the part of one member of the ministry, which I assume was equal on the part of all, was there any necessity for adding the words "on the recommendation of the Prime Minister, by order in council, P.C. 192 (Exhibit 76)"?


William Richard Motherwell: They are not looking so good now; they are getting a little white behind the gills.


William Lyon Mackenzie King: Hon. gentlemen opposite knew that there was an order in council which governed this matter. I have in my hand order in council, P.C. 1639, approved July 19, 1920, at a time when the Right Hon. Arthur Meighen, head of the previous Conservative administration, was Prime Minister of this country. This order in council was passed upon the recommendation of the Right Hon. Arthur Meighen. It deals with the functions of the Prime Minister, with the question of quorum, with the dissolution and convocation of parliament, and in connection with appointments, it reads:
Privy Councillors;
Cabinet Ministers;
Lieutenant-Governors;
Provincial Administrators;
Speaker of the Senate;

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Chief Justices of all courts;
Senators;
Sub-committees of council;
Treasury Board;
Committee of Internal Eeonomjr, House of Commons;
Deputy heads of departments;
Librarians of parliament;
Crown appointments in both houses of parliament;
Governor General's secretary's staff.
This order in council made it a function of the Prime Minister to appoint deputy ministers. I must say that when I came into office I had no knowledge of that particular order in council, and I permitted my colleagues who were ministers of departments to make their own recommendation to the cabinet. This particular order was brought to my attention by the Clerk of the Privy Council after we had been in office some years, and after that time I held still to the practice of permitting my colleagues to choose whom they wished as their deputy ministers, I making the appointment as was my duty in accordance with the order in council of the day.' To show that I alone in the case of Mr. Henry, was not the only one to make the appointment of a deputy minister, I will quote from an order in council passed July 14, 1919. This particular order was passed at a time when Mr. Meighen was Prime Minister. It reads:
The committee of the privy council on the recommendation of the president of the privy council advise that Lieut.-Col. John A. Amyot, M.B., C.M.G., of the city of Toronto, be appointed Deputy Minister of Health under the provisions of the act passed at the recent session of parliament, intituled "An act respecting the Department of Health."
Mr. Meighen was president of the Council.
Does any hon. member suppose that Mr. Meighen had any ulterior motive in making that particular appointment? He was just carryin out the provisions of his own order in council with respect to the powers of the Prime Minister.


Richard Bedford Bennett: Did not my right hon.
friend find a copy of that order in council attached to his patent? A copy was attached to mine when I first took office.


William Lyon Mackenzie King: I am Sony but it was not attached to mine. However, I told the Clerk of the House to see to it that a copy was attached to future patents. My right hon. friend is only bearing out what I have said, that he and his colleagues knew when they came into office that deputy ministers* were the appointees of the Prime Minister.
I notice it is eleven o'clock. I wonder if it would be agreeable to the house to permit
me to continue a little longer so that I may conclude my remarks this evening. It would help to shorten matters as to the conclusion of the session if I might have unanimous consent. I should be glad indeed to rest until to-morrow and continue at that time, but I think the debate could be shortened by my concluding this evening. I am thinking mostly of the convenience of others.


Richard Bedford Bennett: The matter of adjournment is entirely in the competence of the chamber. If any hon. member desires that the house shall not continue, we will adjourn; if there is no voice to the contrary, we will not adjourn. I am quite willing that the right hon. gentleman be accommodated but I wish he had spoken to me so that I could have made a motion.


William Lyon Mackenzie King: I am sorry to have taken as long as I have, but the reading of citations necessitated my doing so. I promise that I shall not be very long in concluding.
I have in my hand another order in council covering the appointment of a deputy minister. This order in council is da/ted December 11, 1924, which should be far enough removed from any Beauharnois relationship not to have any association with it. It reads as follows:
The committee of the privy council, on the recommendation of the Right Hon. W. L. Mackenzie King, the Prime Minister, advise that william Stuart Edwards, Assistant Deputy Minister of Justice, be appointed to be Deputy Minister of Justice vice Edmund Leslie New-eonibe, appointed judge of the Supreme Court of Canada.
When that appointment of Mr. Edwards was made, I made it on the advice of my colleague, the then Minister of Justice. He was the proper person to advise me whom he wished to have as his deputy, and I put forward the order.
I have here the order under which I appointed the successor to Mr. Henry, Mr. Valentine Irving Smart. Then here is an order'dated July 12, 1928, which reads:
The committee of the privy council, on the recommendation of the Right Hon. W. L. Mackenzie King, the Prime Minister, advise that Mr. William A. Found be appointed Deputy Minister of Fisheries under the authority of section 2, of chapter 62, of the statutes of 1926-27, at a salary-
And so forth. This was the regular way of proceeding. No one would say because I had appointed Mr. Found that there was something which necessitated the bringing of the name of the Prime Minister into the report of a select committee of the commons dealing with a
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project such as the Beauharnois canal project. This kind of thing, I say, I believe would have been somewhat altered in any careful revision of the report.
May I say in regard to the appointment of Mr. Henry that it would be just as true to say that Major Graham Bell's death, which was the occasion of filling the vacancy of deputy minister was due to some circumstance connected with Beauhamois, as it would be to say that Mr. Henry was appointed because of any association with the Beauharnois interests? I ask hon. members to be reasonable in these matters. Consider the circumstances in which an administration is sometimes faced when very critical questions have to be dealt with. The late Mr. Graham Bell had a knowledge of Canadian railway conditions second to no other man in this country. There were very few who had any intimate knowledge of the railway business generally, of the work of the Department of Railways and Canals, and particularly of the work of the Canadian National Railways. When Mr. Graham Bell died, the Hon. Mr. Dunning, the then Minister of Railways and Canals, was at his wit's end to know where he could get a deputy minister who would be of any help to him wrhen the session come on.
It was a session during which a large program with respect to the Canadian National Railways was if possible to be put through parliament, and Mr. Dunning was filled with anxiety as to what he could do to fill that office so as to enable him to go on with that particular program. Mr. Henry had been for years in the Department of Railways and Canals, and was familiar with the general railway organization. He was at the time the economic expert on the Canadian National Railways, and as such knew about the Canadian National Railway system generally. The deputy minister had always been a member of the board of directors of the Canadian National Railways. He was the link between [DOT] the two. Mr. Henry helped to fill that particular role as no one else could possibly have filled it at the time it was necessary to fill the vacancy created by Major Bell's'death It was for that reason that Mr. Dunning sought to get the services of Mr. Henry.
Mr. Henry has given his own evidence. He has stated 'that he did not wish to accept the office, that he did not want it, but that Mr. Dunning pressed him and Sir Henry Thornton . pressed him in the railway interests. He says that he told Mr. Dunning that he was interested in Beauharnois. Mr. Dunning had [DOT] said to him: If Beauharnois was going to come before the Department of Railways and Canals in any shape or form he would not

allow him to come in, but that the Beauharnois application was before the Department of Public Works and that he would not be asked 'to have anything to do with the Beauhamois matter. The very day the evidence came out that Mr. Henry -was associated with the Sterling Industrial Corporation I asked Mr. Dunning whether that fact had been disclosed to him and whether he had had any knowledge of it, and he said to me that he had no knowledge of it whatsoever, that he did not know of the existence of the Sterling Industrial Corporation when he spoke to Mr. Henry, that until he read the evidence given before the commission he never had had any knowledge of its existence any more than I or, I imagine, any other members of the cabinet bad. If he had had the knowledge of what has since been disclosed, I am quite sure he would not have asked, pressing as the circumstances were, to have Mr. Henry fill the position for that time. Mr. Henry had to be persuaded against his own will and wish. He did what he did to oblige the government of the day and to render a much needed public service. He was at the time, as he said himself in giving his evidence, not in a condition physically where he felt he should take on extra burdens, and indeed he had to go into hospital for an operation very shortly after he took the appointment. All the circumstances, to anyone with an unbiased and free mind, make it perfectly clear that Mr. Henry's association with the Department of Railways and Canals was only because of the interests of this country, generously given with regard to its railway problems. It was for a temporary period only, until Mr. Dunning had had time to look around and obtain a successor. Mr. Dunning a little later was transferred to the Department of Finance, upon the death of Mr. Robb, which rendered necessary the keeping on of Mr. Henry for a little longer than would otherwise have been the case. He stayed only to oblige the administration in a critical situation.
Those are the facts. Why unless there is an ulterior political motive, this reference to Mr. Henry's appointment should be brought into the report in a way (to appear to reflect upon the head of the government of Canada, I am at a loss to understand. As I say, I would like 'to support this report in its entirety if it were not for things of this kind, buit when one encounters paragraphs of that sort one has to ask oneself: What view is the public going to take of the attitude of anyone who supports a report that contains that kind of insinuation and that kind of reflection?

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May I say that the same kind of thing is true with respect to some other of the personal references in the report. Here I feel I come to tread on rather delicate ground. The report makes mention of several persons, some of whom are in pulblic life, some of whom are in the civil service, others of whom are citizens engaged in industrial and other concerns. I have always understobd with respect to this parliament that where matters concerned members of the other house it was for that house to concern itself with those particular individuals, that is was not for the members of this House of Commons to pass judgment upon any member of the honourable body of the Senate, any more than it is within the jurisdiction of the Senate to pass judgment upon an honourable member of this house. I do not want it to be assumed that I am trying to shield anyone, or to avoid any discussion, but I have the same; responsibility as the Prime Minister has in seeking to maintain the traditions of parliament, traditions that are fundamental, that are based on principle and that may operate in one way to-day as respects hon. members on this side and tomorrow may be operating in the same way as respects hon. members on the other side of the house. For that reason I say I was surprised when I found the report did refer in condemnatory terms to hon. members of the Senate. I would take no exception whatever to the committee taking all of the evidence that it wished to take, bringing it together in its report and making it as pointed. and direct and as strong as you please, and saying that this evidence should be submitted to the Senate of Canada-I am speaking now of the evidence that relates to the senators- for that honourable body to deal with. Indeed one of the recommendations of the report is that a copy of the report and 'the evidence shall be sent officially from this house to the Senate so that the Senate may take cognizance, of it. I submit that the Senate is the body that must deal with senators, and that we in this House of Commons have not the right to pass judgment on any member of the other house. I ask, Mr. Speaker, if I am not right in that view. Perhaps it is unnecessary to make an appeal offhand. I will leave it to the sense of the house. All that I want to make perfectly clear is this: I think a mistake is made in the report in presenting the matter in the way it is. Let me repeat, I would not have asked the committee to refrain from making a single statement about anything done by any senator that came out before the committee, but I do say that when they had brought out the, evidence, no matter how condemnatory in their opinion it
may have been, it was their duty where the evidence reflected upon honourable members of that body to recommend that the evidence be transmitted to the Senate for the Senate itself to deal with. Similarly in the House of Commons I believe we have here to maintain the rule and the tradition in that particular regard. If therefore I do not go into the question of any actions of the senators as referred to in the report it is because I am respecting what I believe to be the rules and the traditions of this parliament. Let me say most emphatically however that with respect to much set forth in the report concerning some of the things which have been- done, I believe they are wholly unjustifiable and cannot be defended a-t any cost. However with the matters contained in the report which pertain to senators it is for the Senate itself to deal.
There is one reference in the report, however to an honourable senator which I believe I should not allow to pass without comment, because it seems to cast a reflection on a hon. member of parliament which the evidence does not justify. I have before me that portion of the report which refers to Senator Raymond. It is to be found at page 638 of the votes and proceedings. Referring specially to subsection 2 of section 15, I quote the following:
At the conclusion of his evidence one of the members of tile committee expressed the view that he ought to be commended for his frankness in giving his evidence.
This is referring to Senator Raymond. Then, a little farther on I find the following:
It transpired when Mr. Sweezey returned to give further evidence that Senator Raymond had received from Mr. Sweezey some $200,000 of campaign funds for the Liberal party. The commendable 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.
I say that is not the evidence, and not even the inference to be drawn from the evidence. There are in those paragraphs insinuations and implications which under the circumstances are not at all justified. May I direct the attention of hon. members to the fact that Senator Raymond was never asked the question whether or not he received money for campaign funds. Senator Raymond offered to appear before the committee, came of his own volition, was present at the sittings and allowed members of the committee to examine him and ask any questions they wished. He answered every question. I am told that in fact he came back a second time.
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May I say to the house that there were other witnesses who had appeared before the committee and had been questioned, but to whom no questions were put concerning campaign funds. Mr. Sweezey himself had been on the stand more than one day. At a later time he was recalled and asked concerning campaign funds, but this was at a time subsequent to that at which Senator Raymond had given his evidence. When Senator Raymond gave his evidence the matter of campaign funds had not been discussed in the committee. Under those circumstances I ask:	Was it
fair for a committee wishing to be perfectly impartial and judicial to inject this reference into the report:
At the conclusion of his evidence one of the members of the committee expressed the view that he ought to be commended for his frankness in giving his evidence.
There was no need to insert that sentence in the report. It was put in to form an excuse for inserting the following paragraph:
It transpired when Mr. Sweezey returned to give further evidence

Those are the words, "when Mr. Sweezey returned to give further evidence." Why was that evidence not brought out at the lreginning? Hon. members in the committee had knowledge during the several meetings of the facts that they were going to bring out with respect to campaign funds, and with respect to everything else. They had that knowledge before the committee ever met. Why did' they not ask Mr. Sweezey about campaign funds when he was questioned at the start?


Richard Bedford Bennett: The right hon. gentleman realizes that he has omitted the intervening ten lines.


William Lyon Mackenzie King: I did it because I felt they were not relative to the point I was making.


Richard Bedford Bennett: On the contrary, they explain what follows.


William Lyon Mackenzie King: Very well, I shall read it all. To my mind they disclose a further reason why this particular part of the report is not at all justified. I shall read the whole thing:
At the conclusion of his evidence one of the members of the committee expressed the view that he ought to be 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'homme, counsel for the Beauharnois syndicate (exhibit 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 action."


Richard Bedford Bennett: To get "some" action.


William Lyon Mackenzie King: Yes, to get
some action. To continue reading:
(4)	It transpired when Mr. Sweezey returned to give further evidence that Senator Raymond had received from Mr. Sweezey some $200,000 of campaign funds for the Liberal party. The commendable 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 liis connection between the government and the Beauharnois promoters.
I say that Senator Raymond was perfectly frank when he appeared before the committee. He answered all questions asked him and he was never asked any question about campaign funds. Had he been asked he would I believe have made then exactly the same answer as he would give to-day. He would have answered in the same straightforward manner in which he gave his evidence before the committee on other matters. I am informed that he came a second time to Ottawa in order to continue his evidence. I really believe there are many hon. members on this side who would like to support the report and make it as nearly unanimous as possible, but how can hon. members on this side support a report with that particular statement in it concerning Senator Raymond, which is in the nature of a reflection, without its being broadcast from coast to coast that the Liberal party this day condemns Senator Raymond for his action? The evidence does not disclose anything which would afford reason for an attitude of that kind.
I should like now to pass on to further matters. I do not wish to take up too much time in a discussion of individual names, but reference has been made to two civil servants and in that connection I think I should speak briefly. The report contains a reference to Mr. J. B. Hunter, Deputy Minister of Public Works, and to Mr. K. M. Cameron, chief engineer of that department. True, the report does not say very much about these gentlemen, but refers to the manner in which they gave their evidence. I feel the statement ought to be made that at all times, civil servants are in a very difficult position. They are in the public service under the direction of ministers, but they are not in positions where they can speak for themselves. A reflection may be cast, in a report such as this, upon two members of the public service,

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and yet they are not at liberty to so much as come out in the press the next day and make an explanation of their conduct.
I gather that in the committee there was a good deal of questioning of witnesses and it may have been that there was something in the manner of these gentlemen that was not altogether pleasing to members of the committee. But let anyone go through the ordeal of appearing before a parliamentary committee to give evidence, and I should be rather surprised if his manner would be all that one might expect from a person expert in the matter of giving evidence. In this case I submit if these gentlemen gave their evidence in a manner which was not satisfactory the whole purpose would have been served had the minister in charge, the chairman of the committee, spoken to his colleague, the Minister of Public Works, about the manner in which the evidence was being given, and requested the Minister of Public Works to speak to those particular civil servants concerning the manner in which their evidence had been given. That would I believe have been a fair way to deal with public servants, but I do not think it is fair that the names of these two very worthy men who have been in the service of Canada for a long time and who have given excellent service, should be broadcast across Canada, coupled with the kind of thing contained in this report, thereby carrying the inference that in some way they too were connected with what there may be in the way of scandal revealed therein.


Some hon. MEMBERS:: Hear, hear.


William Lyon Mackenzie King: That is another reason why I should hesitate to approve fully of the report in its present form, strongly as I am prepared to endorse most of what it contains.
That concludes about all I wish to say at the moment with respect to individuals whose names are mentioned. I come now to the concluding portion of my remarks which deal with the matter of political organization and campaign funds. At this point I shall ask hon. members to allow me to review the situation, as did the Minister of Immigration, in its true perspective. I wish to state my own position as head of the party I have the honour to lead, and from the standpoint of my relation to the whole question of political organization.
I was chosen leader of the Liberal party at the national convention in 1919-chosen by the votes of the majority present at the convention, which happily included a majority
of the then members of the Liberal party in the House of Commons. On some previous occasions leaders have been chosen only from the parliamentary group. My right hon. friend was chosen at a great convention of his party. I think he is the first leader of his party who has been chosen in that way. I mention this matter simply because it has some bearing upon the question of the organization of a political party. The proceedings of that convention have been published, and are available to all hon. members of this house. In the proceedings are given the twofold purpose of the convention: (1) to choose a leader; (2) to arrange for party organization. Page 12 reads as follows:
In the official call for the national Liberal convention it is stated that the second purpose for which the convention is to be held will be to deal with the question of party organization. The importance of party organization was, therefore, present to the minds of those who prepared the official call, and it should not occupy a lesser place in the minds of those who may be given an opportunity to deal with the subject either as members of a committee or in the convention as a whole.
The convention took up the question of party organization, and it was decided that there should be a national committee of which the leader of the party would be the president or honorary president, there were to be vicepresidents from the different provinces, and a committee of fifty odd in number. There was to be a national Liberal organization office to be established in the city of Ottawa, which would have charge of organization and information. Mr. Haydon had been secretary of the national convention. He generously consented to act as secretary of this office. Probably I am wrong in saying he acted as secretary; I think he was to be general counsel, although he assumed in large part the obligations of secretary. That was in 1919. The work of carrying on such publicity as was issued on behal" of the party was centred in this office, and when political campaigns came on those who were associated with the office had to do with those campaigns.
There were by-elections prior to the general election of 1921. With regard to those byelections, as leader of the party I had no knowledge whatsoever of the organization of the campaigns, I did not regard it as part of my duty as leader of the party to have to do with the work of organizing political campaigns. I could never have hoped to fill the position of leader of my party in this house had I, in addition to the duties of preparing for the subjects of debate here and the obligation of speaking publicly throughout the country, to take charge of political campaigns

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I simply could not have done it even if it had been expected of me as a political leader, which it was not. I had nothing to do with the organization of the by-elections prior to 1921. When the general election of 1921 came on, I had no knowledge whatever of how that campaign was managed-I went where I was told to go to speak by those who had direction of the campaign. I had just about all I could do to get together the material that was needed for speaking in that campaign from one end of the country to the other.
How could I, as leader of the Liberal party at that time, having had very little experience in public life, have taken charge of such organization work? I was returned to parliament in 1908, and during the greater part of that year I was in the orient. When I arrived back in Ottawa before the end of the session the Right Hon. Sir Wilfrid Laurier honoured me by taking me into his cabinet, and I continued as Minister of Labour until 1911. I was busy with my departmental work during that time and was not dealing with questions of political organization. While I was out of parliament after 1911, I had for a time to do with some of the publicity work of the party, writing pamphlets, and also editing the Liberal monthly publication. But during the time I held the position no election campaigns took place, and I had no knowledge of the organization of political campaigns. When I came back into parliament in 1919, I had had very little in the way of political experience. With such ability as I had it required just about all the time and resource I could command to master the questions that presented themselves for debate and discussion without attempting in addition to deal with election campaigns. So during the campaign qf 1921 I had no knowledge whatever of who contributed to the campaign funds or how the campaign was conducted.
Now, what was true of the by-elections prior to 1921 was equally true of all by-elections which took place subsequent to 1921; what was true of the general election of 1921 was equally time of the general election of 1925, the general election of 1926 and the general election of 1930-the position was exactly the same. With respect to the political organization of the party or the knowledge of its affairs in 1930 my attitude was no different from that which it had been in previous years. There was no reason why it should be. I held to the position which I hold to at this moment, and which I say is the only true position that a political leader can take-that
fMr. Mackenzie King.]
there must be a division of labour in a political party, that it is the duty of the political head of the party to see to matters of policy, to be able to discuss questions on the floor of parliament and throughout the country; but that it is not his business to get out the literature of the party, nor is it his business to organize political campaigns. Such work belongs to the rank and file of the party and to those who will act on their behalf.
In that particular may I say that I believe I am following the tradition which has always been followed in British politics. Will anyone say-I will not speak of those who are in active politics to-day, and I will not speak of those who have been politically active in this country, but I will speak of some of the great political leaders in Great Britain who have passed away. Will anyone say that Mr. Gladstone had supervision of the organization of the Liberal party and its campaigns in England during the time he was Prime Minister and leader of the party?


Richard Bedford Bennett: The records show that
he had a most intimate knowledge of it.


William Lyon Mackenzie King: My right hon. friend says that Mr. Gladstone had the most intimate knowledge of the organization of his party. That is a surprise. However it helps bring us to the point that I wish to develop. Will anyone say that Lord Salisbury had a most intimate knowledge of the organization of the Conservative party, that he knew who contributed to the funds of the party, that he knew about all the contributions that were being made to the political funds of his party? Will anyone say that Mr. Asquith had that intimate knowledge?


Richard Bedford Bennett: Yes.


William Lyon Mackenzie King: Will anyone
say that Mr. Bonar Law had that intimate knowledge?


Richard Bedford Bennett: Yes.


William Lyon Mackenzie King: Will anyone
say that Lord Balfour had that intimate knowledge?


Richard Bedford Bennett: Yes.


William Lyon Mackenzie King: The Prime
Minister says, "Yes"?


Richard Bedford Bennett: I am saying that all the Prime Ministers of Great Britain since Lord Salisbury-I am not speaking in relation to him-had the most intimate knowledge of the matters to which the right hon. gentleman refers.

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William Lyon Mackenzie King: Well, that is
a surprise to me.


Ernest Lapointe: It is to everybody.


William Lyon Mackenzie King: I cannot speak for the organization of the Conservative party, in Great Britain, but I can speak of the Liberal organization in that country because I know a little of how it is carried on. I took care at the time I became leader, to ascertain what was the practice followed in Great Britain.


Richard Bedford Bennett: Surely my right hon.
friend knows that Mr. Lloyd George has control of it.


William Lyon Mackenzie King: Yes, and I
am glad my right hon. friend has spoken of that. I will have a word to say in that regard, because it brings out the essential difference between our points of view. In England the organization of the Liberal party was a development of the national federation. Its secretary was Mr. Robert Hudson, a gentleman who subsequently became Sir Robert Hudson. For a third of a century he was secretary of the national Liberal federation, an organization of the party as a whole whose affairs were controlled by representatives of the party from all parts of England. He was also secretary of another special council which had to do with political matters, the Liberal Central Association. This national federation carried on the work of the Liberal party throughout the country and in the constituencies; it had to do with the sending out of literature, the placing of speakers and the organizing of political campaigns. In parliament the whips of the party had their own organization in association with the Prime Minister, but that organization had nothing to do with political campaigns. The whole work of political campaigning, as I have said, was kept separate and distinct from the Prime Minister and his associates; they may have been in touch with it but it would have been impossible for any prime minister to attempt to grasp all the details.
I do not ask hon. members to accept my word* for this. I hold in my hand a volume which is a memoir of Sir Robert Hudson, published by Mr. J. A. Spender, who for many years was editor of the Westminster Gazette and who is well known as the distinguished author amongst many other works of the Life and Times of Campbell-Bannerman and other volumes entitled "The Public Life." This memoir of Sir Robert Hudson contains a statement of the organization of the Liberal party in England over a period of forty
years. If hon. members wish to know about the organizer and his work they will find in chapter 3 a full account of how the organizing is carried on, under the following headings:
Appointment as secretary to the N.L.F.; A dual office; The Liberal central association and its functions; A working partnership; Robert's friendships and their value; The duties of the secretary; Visitors to the office; Supplying candidates; Arranging public meetings; Difficulties with the star performers; Providing "literature;" The Liberal publication department; The Liberal magazine.
That chapter contains a complete statement of the organizer and his work in connection with the Liberal party in England. Then there is another chapter which goes even more fully into the matter we are now considering. It has to do with the Liberal party and its finances. This subject is discussed under the following headings:
Asquith at Dean's Yard; Work at Abingdon
Street; Anxiety and hope; The financial storm-centre; The 1923 election; The Lloyd George fund; Negotiations with Mr. Lloyd George; The disaster of 1924; The million fund; Its difficulties; The general strike and Lord Oxfords resignation; Renewed negotiations with ,r* iloy!l George; Their outcome; Resignation of officers.
This chapter makes clear that the split in the Liberal party of England, which is more or less irretrievable, was the result of the introduction into Liberal politics of a plan of organization by one of the political heads of that party which had never existed previously. Mr. Lloyd George, who had been head of the Union government, acquired control of a campaign fund which, as is generally known, was largely derived from the sale of titles. They get their campaign funds in one way or another in the old country as well as in this country. Over there they got them larglely from the sale of titles, and when Mr. Lloyd George had this fund he earned it with him away from his position as head of the Union government to his position as leader of the Liberal party. The Liberals who were of the old school, and who believed in the party itself looking after its own organization, were not satisfied with that sort of dictatorship. It shocked their sense of independence, they felt that it gave a political leader who had all the power in his own hands, the right to dictate policies, to control constituencies and to make conditions in a dozen and one ways with respect to the general business of the party. They thought no political leader should have any such power, at least in the Liberal party, so they

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decided to issue a call asking the Liberals of England to subscribe to a million pound fund.
What was the result of that call? The Liberals of England asked, "What about this fund Mr. Lloyd George has? They said: We do not intend to subscribe a million pounds while the party has a fund as large as that in the possession of Mr. Lloyd George." The leaders of the party could not very well explain that Mr. Lloyd George was attaching all sorts of conditions to the use of that fund, and through their inability to give any explanation of the kind they were unable to gather in subscriptions to any appreciable amount. The result has been that large numbers of Liberals have left Mr. Lloyd George altogether simply because they do not wish to have at the head of their party anyone who has complete control of the party purse.
This is where the difference and a complete divergence arises between my right hon. friend and myself in connection with what has been said to-night. He is perfectly sincere in his point of view; I am equally sincere in mine, and this house and this country will have to judge as to which holds the correct view. My right hon. friend says that as political head of his party he should have full knowledge of all the funds of the party, that he should know-


Richard Bedford Bennett: When has he said that, and where?


William Lyon Mackenzie King: But is not that what I am to gather?


Richard Bedford Bennett: I ask the right hon. gentleman where and when he said it.


William Lyon Mackenzie King: If the remarks of my right hon. friend to-night meant anything they were to the effect that he blamed me for not having a knowledge-


Richard Bedford Bennett: I did not blame my right hon. friend for anything.


William Lyon Mackenzie King: I thought so.


Richard Bedford Bennett: I have not yet blamed the right hon. gentleman for anything.


William Lyon Mackenzie King: Then let us understand each other; that is what I want to get at. Does my right hon. friend hold a view different from mine? I take the position that it is not part of the duty or obligation of a leader of a political party to have to do with the organization of political campaigns or to possess an inventory of those who make contributions to party funds. That is my view; does my right hon. friend hold a different view?


Richard Bedford Bennett: I have always held that
the receiver of stolen goods was a criminal.


William Lyon Mackenzie King: Well, I notice that whenever my right hon. friend is asked a direct question, the reply to which is of importance, he usually evades it by some very smart remark such as the one to which we have just listened. I do not think the country will find in my hon. friend's answer anything that will satisfy it with respect to his views as to 'the obligation of the leader of a political party with respect to its funds and its organization for party purposes.
I want to explain, as I think I have explained, wherein there certainly is a difference in point of view with respect to the ownership or control of a fund by the political head of a party and the funds of a party being controlled by the party itself. The view I hold is that with respect to any funds relating to campaign purposes it is not 'the duty of the leader of the political party to have to do with these matters. It is for the party organization formed expressly for the purpose by the party itself.
Now may I go a step further. This memoir of Sir Robert Hudson contain appreciations of the work done by the secretary of the Liberal organization, and I want to read a few words from these appreciations because they confirm what I have all along held to be the relationship between the secretary of the national organization and Whoever might hold .the office of Prime Minister or leader of the party. I quote from page 187:
In his dual capacity of secretary of the national Liberal federation and secretary of the Liberal central association, Robert at the time of his death had had a longer continuous association with the intimate affairs of a great political party than any man then living. His service stretched back to the days when Mr. Gladstone was in the plenitude of his power, and Mr. Chamberlain the enthusiastic leader of the Radical left-wing; he was appointed to the highest place in the administration of the Liberal party when Mr. Gladstone was still on the scene, and remained at his post for thirty-three years in intimate relations with three prime ministers and a succession of leaders and whips, by all of whom he was trusted and respected. Though he died in the prime of life, the years in which he lived were crowded with events of overwhelming importance, and he had an inner vision of them and of the chief actors in them vouchsafed to very few- men of his generation.
There is a true picture of one who hold's the office of chief organizer of a political party formed on the lines I have indicated. Here is a further word that throws a little light on the relations of an organizer to his party:
So far as Robert was concerned, life behind the scenes was one of cheerful and loyal com-

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radeship between men who honestly believed in the policy and principles of their party, and were convinced that in serving it they were serving their country.
In this report that has been brought down there are many references to Senator Haydon, and over and over again, in what has appeared in the public press, reference has been made to the fact that Senator Haydon was a close personal friend of my own. It would be strange indeed if Senator Haydon had not been a close personal friend of my own. He was a close personal friend and is a close personal friend of mine; he was a friend throughout the years that he held the position of secretary of the national office and before that time. And may I say that if I were asked to describe the relationship between us, as I have believed it to be all the time, I would do so in the words which are used here by Mr. Spender in reference to the one who held the office of chief organizer of the Liberal party in Britain. So far as Senator Haydon's relationship and my own was concerned-
-life behind the scenes was one of cheerful and loyal comradeship between men who honestly believed in the policy and principles of their party, and were convinced that in serving it they were serving their country.
What else is said in this volume by way of appreciation of this man who was chief organizer of his party?
The confidence that Hudson at once inspired in men, even rich men, wary of their pockets, was extraordinary. Rich men would give him thousands when they would not have given prime ministers a penny piece, and yet Hudson had nothing to offer them in return save his good-will, for the federation possessed neither patronage nor power, and never attempted, or would have been allowed, to interfere with the arrangements of the whips' room.
That is the position in England. The chief organizer of the party had to do with the obtaining of party funds and he obtained them from different persons. Mr. Spender, who has perhaps a more intimate knowledge of the politics of Great Britain than any other living man, certainly than any other Liberal in Great Britain, says that there were men who gave the chief organizer thousands when they would not have given a prime minister a cent. And yet so scrupulously careful were they in Britain, or have -been so far as I can judge, to prevent political leaders from being placed in a position of embarrassment through knowledge of what contributions may be made to party funds, that, as the writer says here, the organizer-

had nothing to offer them in return save his good will; for the confederation possessed neither patronage nor power, and never attempted, or would have been allowed, to interfere with the arrangements of the whips' room.
May I say with regard to Senator Haydon that he possessed neither patronage nor power, nor would he have been permitted to interfere nor would he have thought of interfering in any way with the duty of the Prime Minister and his colleagues. That is the position; and I cannot make it too clear that, so far as the Prime Minister and his colleagues in the late administration were concerned, they were attending to the business of government, attending to their duties as ministers of the crown, and were not concerning themselves with the question of raising party funds or of working out party campaigns. They may have assisted. But the fact that contributions were made to a party campaign fund, no matter what their amount, cannot possibly carry with it, except to those who are inclined to think in that way, the inference that these funds were going to influence at any time either the present or any future action of the administration of the day.
I was struck, in reading this book, with a remark about the way Sir Robert Hudson felt in regard to this obnoxious and thankless business of collecting political campaign funds, and obtaining moneys wherewith to run the organization. It discloses how difficult it is in England or elsewhere to obtain funds. Here is a paragraph which appears at page 174:
Robert felt his position as treasurer of the federation to be becoming intolerable and more than once in 1925 and 1926 he warned the federation that he would be unable to go^on unless the response was more generous. "As for money," he told Maclean at the end of 1926, "the answer is simple, there ain't none.'
I speak in the presence of members of my party who were members in the last session of the last parliament. I wish to tell this house what I said to them when I spoke in caucus in the spring of 1930. I had asked Senator Haydon why it was that, despite the fact that we were labouring night and day in this parliament to make our policies known, we could not get a leaflet published which we could distribute among the electorate. We had the Dunning budget which we were bringing in and we wanted to have the electors acquainted with the details of that budget and the policies that underlay it. So far as the Liberal information office was concerned, there was no money for the purpose of getting out any publications. I confess that if there is one thing above another that has been a heartbreak in the task of leadership of the political party which I have led in these last few years, it has been that, labour as some of us would in this House of Commons, and on the platform and elsewhere, the great body of men and women throughout the country
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who call themselves Liberals have not seen their way to send into the organization contributions in amount sufficient to enable us to issue our literature.


Some hon. MEMBERS:: Oh, oh.


William Lyon Mackenzie King: My hon. friends opposite laugh. Perhaps they find it easy to get political party funds. They have on their side -many interests which unfortunately, because of -our policies, we are dbliged to oppose, and we do not find it so easy. Indeed, we find it as difficult to get pennies as they d'o to get dollar bills. They may laugh, but that is the position. We have had great difficulty. What did I say to my own followers in parliament at the caucus to which I refer? I said that I felt my responsibility as leader of the party to let the members of the parliamentary party know that in the event of a campaign at some future date we might find that we would not be as successful as we believed our cause entitled us to be, for no other reason than that nothing was going out to the country in the form of literature. I directed their attention to -the Victoria building across the way, in which my right hon. friend and his friends, for months, had offices with a staff of some fifteen clerics, if I am not in-oorrectly informed. They had offices from which there issued literature not by -the pound but by the ton, which they sent out broadcast. I called attention to the fact -that while our political opponents were spreading broadcast their political ideas and aims, and misrepresenting ours, nothing was being done by our own party to further a knowledge of its purposes and aims; and I pointed out to the members of the party how necessary it was that they should all do what they could to arouse public interest, that we might secure at least something -to enable us to carry on
Does that look like a political party under obligations to power companies or other concerns? That was more than a year after the approval of the Beauharnois company's plans. That was the position of the party at that time. If mistakes have been made in accepting funds which never should have been accepted in a political campaign, it has been a very serious error in judgment, but this error has grown out of the fact that things have been done in the heat of a campaign possibly through a feeling of desperation brought about by the competition with which the party was faced which would never have been thought of or dreamed of at any other time. I do not say that to mitigate what has been done; I do not mitigate it in

the least, but there is a reason for everything, and that I submit was the reason in this case.
May I say to my right hon. friend that I have stated quite frankly my point of view as to the organization of political campaigns and the duty of a leader with respect to political campaign funds. I hold the view I do for two reasons. The first one is the one which I have already given, namely, that it would be humanly impossible for me as the -leader of the Liberal party to attempt to do my duty in this House of Commons and deal with the questions which are before us if I were to be continually harassed through having to do with questions of party organization and political campaigns. I could not have done it in the past, I cannot do it now, and I will not do it in the future. Unless the party of which I am the head can find some means of having the work of publicity and organization carried on without my being responsible for it, and for the organization of political campaigns then all I can say is that they will have to find someone else to lead the party. It would be an impossible task for any man who is in this particular position and I have always so indicated to members of the party ever since I have been its leader.
But I have another reason. I think I have some faith in my own integrity and in my purpose in public life. I would not care to have to deal with the questions with which this house has to deal and be possessed of an inventory of those who had contributed to the party funds. I would not care to know who the men were or what the amounts were which they had given for purposes of political campaigns. I want to make a distinction with respect to the issuing of literature and for the work of the Liberal information office from month to month and from year to year. I have time and again asked leading members of the party if they would not make some small contribution in order to help out with our literature, and a very few friends of the party have been generous in that regard. I felt that that was a perfectly legitimate thing to do. These names and amounts can be made public at any time; these contributions have been made in order to help the party publish what literature it has been in a position to get out. All the time that I have been the leader of the party I have never asked a single individual to make a contribution to a political campaign. I have had no knowledge of what the political campaign funds were. As I have said, I cannot see how a political leader could have in his pocket an inventory of the contributions made by those who have

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to do with one interest or another interest and at the same time hope to be free from any kind of influence in his dealing with many of the questions which might come up in the house.
The following statement is made in the report, as appears on page 634 of votes and proceedings. I read this to bring out the difference between my hon. friend and myself in the way in which I think it should be understood. The report reads:
There was also a suggestion with reference to a proposed contribution to the Conservative federal campaign fund through 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."
The evidence upon which that statement in the report is based will be found at page 823. The following are questions asked of Mr. Sweezey:
Q. Was there any proposal indicating a contribution to the federal campaign fund through its organizer, General McRae?-A. Yes, a proposal came to me at one time to make a contribution.
Q. Of how much?-A. Of $200,000.
Q. Was it made?-A. No.
Q. Why?-A. I do not know what happened.
Q. I understand that Mr. Bennett would not accept it?
How did Mr. White get that information? How did he know in advance of the witness? Had Mr. Bennett told him that he would not accept it? Had he asked him to ask that question? The answer given is as follows:
A. I do not know that, but I presume that may be so.


Richard Bedford Bennett: Mr. Lennox and not Mr. White appears to have asked those questions.


William Lyon Mackenzie King: I thank my
right hon. friend. My right hon. friend had knowledge of the contribution that was made or at least of the fact that this Beauharnois company had been asked for a contribution of $200,000, and it is intimated he said that it was not to be accepted. Was there an exception in the case of Beauharnois with regard to political contributions? Was Beauharnois the one case that my right hon. friend knew about or did he know about all contributions to the party fund? I hope he will tell us this when he speaks on this subject. Did he ask his organizer to tell him who were contributing and how much they were contributing? Did anyone come to him to find out whether or not a contribution should be received? He may have had this information, but if he
had I do not know what view he himself or the country will take of the fact that these contributions must have come in a large part from those engaged in industry in this country. I have implicit faith in the integrity of my right hon. friend. I do not say for any reason other than this, I honour him in his position. I honour him as a man and I have faith in his integrity, but I think he renders himself open to very serious misunderstanding from one end of this country to the other if he tells the people of Canada that he has an inventory of those who contributed during the last elections to the funds of the Conservative party; that he knows the amounts which were received, that he said they were to be received from this person or from that and were not to be received from other persons. We have been dealing with many matters during the present parliament. Both at the special session and the present session the tariff has been raised-raised very high indeed. It will be remembered that Mr. Sweezey told the committee that contributions were made to political parties not for favours which were past but for favours to come. Having that thought in mind, I ask hon. members to ask themselves this question: If it be true that my right hon. friend had knowledge of all who were contributors to his party fund, what will the country be thinking to-day of the changes which have been made in the tariff in connection with cottons, in connection with woollens, in connection with rayon and silk? What about iron and steel, boots and shoes, gasoline, magazines, sugar refining; what about income taxes, what about agricultural manufacturers, what about motor car manufacturers and what about electrical goods manufacturers?
Let me hasten to add that my right hon. friend-


Richard Bedford Bennett: That is disgraceful.


William Lyon Mackenzie King: I say that I
do not believe my right hon. friend-


Richard Bedford Bennett: My right hon. friend has been talking all evening about insinuations.


William Lyon Mackenzie King: I am speaking directly; there are no insinuations in this.


Richard Bedford Bennett: It is full of them.


William Lyon Mackenzie King: The extent to which there can possibly be insinuation depends on whether or not my right hon. friend has gained from everyone who has contributed to his party exact knowledge of how much they contributed. There is not

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an insinuation of that on my part. I am speaking of how the country may view matters however upright and good my right hon. friend's intentions may be. The difference between him and me is this, he may feel that as Prime Minister he can have a knowledge of how much has been contributed to the party funds by the different members of his party and yet keep free from any kind of direct or indirect feeling, conscious or unconscious, with respect to the matters in which those who have made contributions may be interested. Perhaps he is able so to do. Perhaps he can hold that position, but I say to him that I think the country would feel in a much happier frame of mind if it believed that my right hon. friend did not know what contributions had been made by the textile industries, did not know w'hat contributions had been made by wealthy men with large incomes, did not know what contributions had been made by some of those concerns getting subsidies and other benefits at the present time. I repeat, I am not reflecting on the integrity of my right hon. friend.


Richard Bedford Bennett: What are you saying it
for, then, if not for that purpose?


William Lyon Mackenzie King: I am trying my best to make clear the difference between my right hon. friend's point of view with regard to political funds and my own. Either he knows what contributions were made to his party, or he does not. I say that the view that I take of a prime minister's obligation is that it is not part of his duty, and it must not be expected of him, to know what contributions have been made to political campaign funds. I may be wrong in that, but that is the position I take.
May I add this? I do not see how anyone could possibly be expected to know what contributions are being made to party funds. After all, is the Prime Minister going to* be told everything? Some things come from one source, others from another source, some in direct ways, others in indirect ways. How can he possibly know? I think any doctrine that the Prime Minister should know is as unfair to those who make political contributions as to those who ask for them. Many a man might wish to contribute to his party and the policies it advocates, but if he knew that the leader was going to know what his contribution was he might hesitate to make a contribution, feeling that it would be embarrassing both to him and to the head of the government. I just want to say apart from all else that during the years I was Prime 
Minister I had not the time to keep myself familiar with these matters of organization, There is no use pretending or being hypocritical in the matter. The truth is it could not have been done and was an impossibility.
I want to answer a question or two that come concretely to the point in this matter. In the Ottawa Journal of Thursday, July 23, 1931, there is an article W'hich is headed, "Mr. Mackenzie King and Beauhamois." The first part of that article has reference to my own personal honour as leader of the opposition. I should like to thank the Ottawa Journal for w'hat it has said in regard to myself personally, as I do thank as well other publications both on the Conservative and the Liberal side which have been generous enough to say a word at this time with respect to what they believed to be the personal honour of one who has held the office of Prime Minister in this country for nearly ten years. However, I have not referred to the article for that purpose. I have referred to it for the purpose of answering four questions which it asks in the editorial and which it says I should answer. The article in this particular reads:
In the matter of campaign funds, and in the particular matter of that $700,000 which Mr. Sv'eezey handed over to Senators Haydon and Raymond, Mr. King's position is not so happy. Here, we think, the country will want to know' the answer to those questions:
1.	Upon whose credentials did Senators Raymond and Haydon obtain Mr. Sweezey's money ?
My answer to that is that I do not know. Senator Haydon was known to be and had been known to be for years the organizer and treasurer of the party, so far as Ottawa and the general work w'as concerned. I assume that he would naturally be thought of as the one to whom contributions should be made. As hon. members well know, in political campaigns a great many are only too anxious to be the collectors of political funds, and I think it is fortunate for a political party when it is known that only one or two men have the right to receive contributions. The province of Quebec, so far as the Liberal party is concerned, whether it relates to the Dominion or the province, has always preferred to manage its own affairs, and in that province Senator Raymond acted as treasurer for the party- a very difficult task, a very obnoxious task in many ways, but assumed by him as his share of the party's work in a political campaign, and generously assumed.
2.	Did Mr. King authorize them to go to Mr-Sweezey ?

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My answer to that is no, I did not, nor did I know they had gone to Mr. Sweezey.
3.	If not, did Mr. King know that they were going to Mr. Sweezey and did he know that they got the $700,000, and that his party was using it?
My answer to that has already been given, and it is an emphatic no.
4.	Whether Mr. King, assuming that he did not know anything about the Beauharnois contribution, should not have considered it his duty to find out from what sources his party was being financed?
I think I have answered that last question. I may be in the wrong in my answer. The country will have to judge, and this house will have to judge, ibut my answer is this, and it will continue to be this as long as I have to do with the Liberal party: I simply cannot underbake to assume responsibility for the organization of political campaigns and to pretend to have a knowledge of who are making contributions to them. I agree that some way will have to be found to help make more effective the supervision of such funds, and I shall gladly cooperate with anyone towards that end, buit so far as I am concerned there will have to be someone else take on the task of leadership if that particular job is expected of the leader of the party, particularly during the time one might be holding the office of Prime Minister.
May I just say a further word in regard to this matter? Some of the papers of the country have been saying that the Liberal party has been brought into disgrace by what has taken place. After all, it is an unfortunate fact with regard to most things in human life, that no matter how good the cause may be, no matter how true and honourable and honest the great body of men and women are who are supporting a cause, every now and then something happens which is not creditable, and the party as a whole or the group as a whole have to suffer as a consequence. During the period of the great war when men were fighting for liberty and giving their lives for the cause, things happened to the commissariat which were most discreditable. There were scandals in connection with the food that was supplied, in connection with the boots and shoes supplied, even in connection with the munitions supplied, scandals which everyone deplored, and I am sure no one more than those who belonged to the great army in the fighting forces. But will anyone say that because some of the army organization or those connected with it did things that were not creditable, that their actions brought the whole army into disgrace or that the great cause for which
they were fighting had suffered thereby. No one could deplore more than I do what has been revealed in this inquiry. I am glad if it was there to bring out, that everything has come out that has come out. I would much rather have everything known than that anything should be concealed with no end of rumours and suspicions continually afloat. What I want to say is this. Individual members of the Liberal party may have done what they should not have done, But the whole party is not thereby disgraced. The party is not disgraced, but it is in the valley of humiliation. I tell the people of this country today that as its leader I feel humiliated, and I know my following feel humiliated. I have told them so in caucus, that we are in the valley of humiliation. But we are going to come out of that valley, not in any boasting way, but with a determination to see to it that so far as the cause of Liberalism in this country is concerned, it will advance forward to higher and stronger and better ground than it has ever occupied in the past.
The report concludes with certain recommendations. There is no time to go into them in detail; but may I say I am quite prepared to accept them with the qualification that their final acceptance will depend upon the legislation to be based upon them. As they stand, the recommendations of the committee are:
1.	That the parliament of Canada take such , action as may be within its power, 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 be remitted to the Speaker of the Senate for the information of that house.
0.	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.
I endorse all of those recommendations, but I will reserve to myself and to the members of my party the right to decide, when my hon. friend brings down his legislation, whether it comes within the lines of the recommendations here laid down.
43S8

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I wish now to conclude, Mr. Speaker, what I have to say. A committee has been sitting which has revealed the source of the campaign funds of the Liberal party in the last general election. I believe the country feels and I know I feel, that as regards campaign funds only part of the story, and a very small part, has been told. The country is demanding to-day that this inquiry which has (been started shall not be permitted to drop at the point it has now reached, -but that it shall be continued, and continued in a more thorough and more impartial manner than it has thus far been conducted. What I believe the country wants, and what I ask my right hon. friend to grant, is a royal commission to go into the question of party campaign funds, the sources of those funds and the cost of conducting political campaigns, and to investigate not only the election of 1930, but the elections o-f 1925 and 1926 as well.


Some hon. MEMBERS:: Hear, hear.


William Lyon Mackenzie King: In that connection I do not believe the country will be satisfied with a commission which would consist of one judge or one commissioner appoined by my right hon. friend himself. It will expect that there shall be a commission on which all parties in this house will feel they have a voice in the choice of the commissioners, and also that they have representation by way of counsel. W'hat I recommend and ask the government to do is this: To appoint a royal commission of three judges. I would recommend that my right hon. friend as leader of the Conservative party name one of the commissioners; I would ask that as leader of the Liberal -party I should be allowed to name another, and that the so-called independent group in this house should name the third commissioner. I would recommend that the right be given to each of the three groups to have its own solicitor who may act in an advisory capacity, and that such a commission should go into the whole question of the sources of campaign funds of the last general election and the elections of 1905 and 1926. I say nothing short of that will satisfy the people. If it is not done, the country will increasingly come to the conclusion that the purpose of the select committee has been not so much to gain information concerning the Beauharnois canal project as to bring out certain facts known in advance concerning what has been done by one or two members of the Liberal party in order that the Conservative party might be shielded with respect to what it has done in political campaigns.

I am not making any charges, but I think the country will be interested in knowing how large contributions have been, what individual contributions have been, what every member who has contributed to the party has given. After all, it is not merely the fact that individuals contribute but the amounts which are given which are of importance during election times. A contribution of half a million dollars-


Some hon. MEMBERS:: Oh, oh.


William Lyon Mackenzie King: My hon. friends opposite laugh, but the contribution of half a million dollars, whether it comes from an individual who is a member of his party in the House of Commons or from a company outside of parliament, is still a contribution of half a million- dollars, and serves exactly the same purposes.


An hon. MEMBER:: Make it threenquarteTS of a million.


William Lyon Mackenzie King: My hon. friends opposite probably know more about amounts than I do; I am not directing my remarks to particular amounts.
May I add that I believe it is a great mistake that the -public should have the idea that because campaign funds are large, and large amounts are contributed, that they are used for the purposes of corrupting the electorate or for buying votes. I do not believe of late campaign funds have been used in that way by any of the political parties in this -country.


Some hon. MEMBERS:: Oh, oh.


William Lyon Mackenzie King: 
Some hon. MEMBERS:: Oh, oh.


William Lyon Mackenzie King: We would be in a position to find those things out for ourselves if my right hon. friend would grant the commission I -am now asking for in the name of the country.
I think that not only should there be a royal commission to go into the matter of party campaign funds from the ground up, so that if at all possible we may have the

The Governor General
matter cleared up once and for all, but as soon as the next session of parliament meets there should be appointed a select committee of the house to consider the Dominion Elections Act, and see if in some way it is not possible to have that act further amended so as to render unnecessary, to as large a degree as possible, the collection of moneys for campaign purposes. I make that suggestion in the interests of every hon. member in the house, in the interest of every future candidate, in the interests of every political party, and in the public interest. I would suggest the establishment of a permanent register which would record the name of every elector who is entitled to vote, such register to be kept up to date by the chief electoral officer so that when there is a by-election or a general election no money will have to be spent to make out voters' lists, or for other like purposes. May I add that when in office we considered the register idea, and had time permitted would have put it into force. I had consulted with Colonel Biggar, who had to do with the drafting of the elections act some years ago and he told me that two years at least would be required to put such legislation into effect. There was not time before the general election to bring it into effect, but the government now in office might have time to deal with the matter.
In addition to the suggestions I have made there should be a measure to make it the law of the land that voting shall be compulsory. Under such a law every voter would be expected to go to the polls and record his vote, whether he marked his ballot for one party or for another, or simply sent it in in blank. It is the duty of every one to vote, a first duty of citizenship; and if the last two measures I have mentioned were put into effect I believe they would go a long way towards putting an end to the necessity of campaign funds and everything associated with them. In the third place, if any way can be found of limiting the amounts of subscriptions to be given by individuals, companies or corporations, and any way of giving increased publicity to whatever is given, I believe such measures would be very much in the public interest.
It would be a grave mistake, after the inquiry has gone so far, if the matter were allowed to rest as it now stands. The public conscience in Canada has been aroused, and we should take advantage of that fact to see that as much information and as much light as possible is thrown on the whole matter of party organization and campaign funds, and that legislation be enacted to ensure at election time hereafter as little necessity as possible for campaign funds. If we do that, then possibly some great good will come of the inquiry which has been held, and which has been such a heartbreak to many of us on this side of the house.
On motion of Mr. Woodsiworth the debate was adjourned.
On motion of Mr. Bennett the house adjourned at 12.20 a.m. (Friday).
Friday, July 31, 1931.