1939-02-13

PRIVATE BILLS


[Stage Direction]
Bill No. 20, respecting Central Finance Corporation and to change its name to Household Finance Corporation of Canada.-Mr. Macdonald (Brantford City).
Bill No. 21, respecting Industrial Loan and Finance Corporation.-Mr. Vien.


Mr. SPEAKER:: I have the honour to
inform the house that I have received the following letter:
Ottawa, February 11th, 1939. Hon. Pierre Casgrain,
Speaker of the House of Commons,
Ottawa.
Mr. Speaker,
The official commemoration of the August Pontiff Pius XI, made in your honourable House of Commons on Friday the 10th instant, was an eloquent tribute to the memory of the great Head of the Catholic church and generous and indefatigable Protector of suffering humanity.
I wish to offer my deep and heartfelt thanks for this expression of sympathy on the part of the House over which you so worthily preside. I am sure that it will be appreciated at its true value by the noble Canadian people.
Deeply appreciative of the call you were so kind as to make at this legation, I beg you to receive, Mr. Speaker, the expression of my best sentiments.
(Signed) Hildebrando Antoniutti,
Apostolic Delegate.



EDITION

[Stage Direction]
Bren Oun-Mr. Pouliot

[Stage Direction]
The house resumed from Friday, February 10, consideration of the motion of Mr. MacNeil:
That the agreement between the government and the John Inglis Company, of Toronto, for the manufacture of Bren machine guns, the report of the royal commission dealing with said agreement, and all related documents, evidence, vouchers and exhibits, be referred to the standing committee on public accounts; and the amendment thereto of Mr. Stevens.
Mr. JEAN-FRANCOIS POULIOT (Temis-couata): Mr. Speaker, to say a few more words about the Bren gun contract required inspiration, so I went home and spent yesterday in that loveliest spot in all Canada, at Riviere du Loup. I met there scores of good Liberals, and they asked me to convey a message of kind remembrance and best wishes to our revered chief, the Prime Minister (Mr. Mackenzie King), and also to our beloved Quebec leader (Mr. Lapointe), who is celebrating to-day the thirty-fifth anniversary of his entrance into parliament.
There is nothing so interesting, Mr. Speaker, as to talk with good old Canadians who are full of wisdom, well informed on Canadian problems, and who follow politics very closely. A few of them asked me this question: How is it that Judge Davis during the first thirty sittings of the Bren gun probe was so suspicious of the Plaxton family and so hard on General LaFleche, and then afterwards seemed to change his mind, and declared that there had been nothing corrupt in the Bren gun matter, and that he could blame no official of the Department of National Defence for corruption? I find the answer in the official report of the thirty-second day, November
8.	I quote from page 4039;
The Commissioner:	.... My feelings are
really not in connection with the details at all. The picture is so changed. However-that is a matter for argument.
What I am very much surprised at is that learned counsel who appeared for the different parties at the probe did not call earlier for the evidence of one man who was responsible for the drafting not only of the Canadian contract but also of the British contract. At page 3948 the commissioner said:
I do not know yet, from the evidence, who was the solicitor really acting for the government, the Department of National Defence.
That was left in the shade, probably because every counsel was afraid of the kind of evidence which was to be given by the one who is not a judge or an advocate or a general, but who is the judge advocate general.

At page 800 of Hansard of February 9 the hon. member for St. Lawrence-St. George (Mr. Cahan) said this:
Then there is another young officer, with whom I am not acquainted, Colonel Orde, judge-advocate general of the Department of National Defence, who was called upon without any expert assistance to draft a very important contract.
Then, speaking for himself:
I have drawn more contracts dealing with munitions than almost any number of other lawyers in Canada.
And then:
But I had the good fortune, having so insisted, to have at my elbow some ol the best expert advice, and to that expert advice is due the fact that those tens of millions ot dollars worth of contracts, although some of them appeared in the courts, were never seriously brought into issue in the ^ courts. Therefore I know something of the position of Colonel Orde, who I judge by his evidence to be a young lawyer-
An hon. Member: Not so very young.
Mr. Cahan:	I do not know how old he is,
but I understand he is a young gentleman.
Mr. Power:	Aged forty-five perhaps.
An hon. Member:	Or fifty.
Mr. Cahan: Well, even that is young. I am grateful that they have these young men who are growing up and developing, for the performance of essential duties in that branch of Canada's service.
At pages 3950 and 3951 of the record of the evidence appears this statement by Colonel Orde:
Mr. Ralston:	How long have you held the
position of judge advocate general?
A. Since February 1, 1920.
What are the functions of this official?
Mr. Ralston: What are your duties as judge advocate general?
Listen, Mr. Speaker:
Colonel Orde: Generally, the superintendence of the administration of naval, military and air force law, and reviewing and recording proceedings of court martials, and advising and performing duties in relation to matters of a general civilian and legal nature in the department, as they arise. ... I took that from the king's regulations.
By the Commissioner:
Q. It is quite an undertaking, is it not, for one man?
A. It is a fair sized job. However, I have assistants. I have help in the office.
What is that help? According to a chart which was tabled in the civil service committee last year, on July 1, 1938, his staff was one clerk, grade 4, and one stenographer, grade 3.
What is the staff of the office of judge advocate general in England? There is in the first place the judge advocate general, Sir Henry MacGeagh; a deputy judge advocate

Bren Gun-Mr. Pouliot
general. C. L. Stirling; deputy judge advocates, first, 0. C. Barnett; second, Hon. T. D. Free-man-Mitford, and an officer in charge, military deputy of the judge advocate general, Colonel H. S. Barrett. That is for the army. In the admiralty there is a judge advocate general for the fleet, who lives at Greenwich, J. G. Trapnell, K.C., and a deputy judge advocate, Paymaster Captain A. F. Cooper, O.B.E., R.N. Who is Colonel MacGeagh? I quote the following particulars:
MacGeagh, Colonel Sir Henry Foster, K.B.E., cr. 1930; C.B.E. 1919; Iv.C. 1924; T.D.; Judge Advocate General, H.M.'s Forces (Army and Royal Air Force), since 1934; b. 21 Oct. 1883; o.s. of Foster MacGeagh, late of Hadlow Castle, Kent; m. 1917, Rita, o.d. of late William Kiddle of Walbundrie, New South Wales. Educ.: St. Paul's, Magdalen College, Oxford; rowed in Magdalen College eight, head of the river; honours degree history, B.A. 1905. Barrister-at-law of the Middle Temple, 1906; South Eastern circuit; member of the Council of Legal Education; bencher of the Middle Temple, 1931; held commission in territorial army (London Rifle Brigade), 1909-23; regular commission in the rank of colonel, 1923-34, when retired from army on appointment as Judge Advocate General; served European war, France and Flanders, 1914-15 (Bt. Major,
C.	B.E., 1914 star and clasp); military assistant to the Judge Advocate General, 1916-23;
D.	A.A.G., 1917; assistant adjutant-general, war office, 1918-23; Deputy Judge Advocate General British Forces in China (Shanghai Defence Force), 1927; military deputy of the Judge Advocate General (war office and air ministry) and in charge of the military and air force department of his office, 1923-34. Address: 33 Dover Street, W.l; 2 Barden Court, Temple,
E.	C. Clubs: Carlton, Conservative, Leander.
Barrett, Colonel Hugh Scott, C.B.E., 1937;
T.D.; military deputy of Judge Advocate General of the Forces, and officer in charge of military and air force department of his office since 1934; b. 3 March 1887; y.s. of late Sir William Scott Barrett and Julia Louisa Colville; m. 1916, Dorothy, d. of late Rev. A. E. Farrar; three s. one d. Educ.: Aldenham School; St. John's College, Cambridge (scholar). Called to bar, Inner Temple, 1911; Northern circuit; commission in 6th (Rifle) Battn. The King's Regiment (Liverpool), T.A. 1910-23; regular commission, 1923; served European war, France, 1915-18 (O.B.E., despatches twice); D.A.A.G. 1919: Deputy Judge Advocate General, Army of the Rhine, 1920-23. China 1927-28, Egypt 1935, Palestine 1936. Address: St. Nicholas, Kings-wood, Surrey. T.: Burgh Heath 451. Club: United University.
Trapnell, John Graham, K.C. 1931; Barrister-at-law; Recorder of Plymouth since 1932; Judge Advocate of the fleet since 1933; b. 25 May 1875; s. of Caleb Trapnell. Stoke Bishop, Bristol; m. Ethel, d. of Thomas Chappel Gardiner; two s. Educ.:	Harrogate college;
King's college, Cambridge. Called to bar, 1903; joined the Western circuit; naval service, European war, lieutenant, R.N.V.R. Address: 1 Temple Gardens, E.C.4. T.: Central 8557; 25 Holland Park, W.ll. T.: Park 6951. Clubs: Royal Air Force; Hampshire County, Winchester; Royal Yacht, Southampton; Royal Western Yacht, Plymouth.
71492-54 i
In the Royal Air Force there are thirty-two officers of high rank who are in charge of contracts, and especially there are fifteen senior contract officers. In Canada we have the judge advocate general, one clerk grade 4 and one stenographer grade 3. I hope that the house will have no objection to my placing upon Hansard the few lines which contain the details of the officers of the directorate of contracts under the air ministry.
Walter Edward Foster: To do so will require the unanimous consent of the house.


Some hon. MEMBERS:: Carried.


Mr. POULIOT:: The details follow:
The Royal Air Force
Directorate of Contracts under the Air Ministry Director
Principal deputy director 2 deputy directors 1 principal assistant director 5 assistant directors 15 senior contract officers 1 principal accountant 4 senior accountants 1 principal technical costs officer 1 deputy technical costs officer
Turning to the record of the commission, at page 3951, I quote:
Mr. Ralston: When did any matter relating to the Bren gun first come to your attention, officially?
A. In March of 1936-I think it was March 19, 1936; it had to do with the licence matter. Q. I am dealing with the licence matter.
The Commissioner: I am anxious to have it.
At page 3952 Colonel Orde said:
October . . . 1936 was the first time I had heard of Major Hahn having a connection with the Bren gun.
Q. Did you know Major Hahn before that?
A. No.
Q. You did not meet him personally until when?
A. November 19 or 20. 1937.
Q. Thirteen months after?
A. Yes.
At page 3953 Colonel Orde said:
On October 19, 1936 . . . The Master General of the Ordnance, General Caldwell, spoke to me in the matter of licence, generally, with which I had dealt about four or five months before-in the month of March, before . . . General Caldwell, if I remember rightly, spoke to me; and I am not sure whether I saw him alone, or who it was mentioned the matter.
He was not sure about it.
By the Commissioner:
Q. I suppose it was vague at that time?
And at page 3954:
Colonel Orde: Yes, it was pretty vague. So far as I was concerned, just an isolated incident in the course of my work . . . The instructions I got from somebody-and as I say, I am not
Bren Gun-Mr. Pouliot

And then an answer by Colonel Orde on page 3979:
On December 22 I made revisions of several of the provisions of the first draft.
Look at that, Mr. Speaker. There are many eminent counsel like yourself, in this house, and there are also many business men. I ask them to consider the actions of this man who holds the high position of judge advocate general in the Department of National Defence. Look at how he does his work. His answer continues:
They were just made on slips of paper, and they were either handed to Colonel Dewar or they were cut out and pinned to the earlier draft.
Lots of pins. Pins are dangerous for balloons. Then we find the following on page 3984:
The Commissioner:	I am attaching some
consequence to this thing. Was it the draft agreement, that is exhibit No. 33, plus these revisions Colonel Orde made that went to the interdepartmental committee?
Mr. Ralston:	I hesitate to make any statement without having compared them; I would have to compare them to see. I am afraid 1 have assumed that was so.
The Commissioner: I have assumed that too, but it may not be correct. I do not think Colonel Orde probably knows. What has been interesting me for some time is what was the document that the Department of National Defence sent on to the interdepartmental committee, who stood behind it, who said, "Well, now, if it were not for the interdepartmental committee, why we would pass this, but as a matter of fact it has got to go in there and there it is." That is the point. I am assuming, unless someone should tell me to the contrary, that Colonel Orde's draft of December 22, being exhibit No. 33, plus the revisions of November 22, 1937, was the document that went on to the interdepartmental committee.
The Witness: I am practically certain that was what happened because soon after the committee met I was making some further amendments. I was working on a draft which embodied my draft of the 22nd November, plus the amendments of the 22nd December, plus some further suggestions.
And then another question by the commissioner to Colonel Orde, as reported on page 3985:
Q. I was wondering if Colonel Orde, before he was dealing with the drafts, whether he saw the memorandum of December 10, 1937, which is exhibit No. 31. He may not have had it before him, but just before w'e pass on I should like to clear up that. That has been in my mind. That is the memorandum, I think, by the Master General of the Ordnance. It is a memorandum by someone.
Mr. Ralston:	It is a memorandum of the
Master General of the Ordnance.
The Witness: I do not remember particularly seeing this particular memorandum. I saw 
during the course of my duties numerous memoranda, but I cannot identify them by reference to any particular dates.
By the Commissioner:
Q. Look at the last paragraph and read it and see if you recall that that was before you at the time?
A. I may have seen it later. I remember seeing it some time.
Q. You do not think it was there when you were making the draft?
A. Oh, no, I mean it looks familiar and I may have noticed it when glancing through the file.
Q. Was there any discussion around that time, in the month of December, 1937, or January of this year, with reference to the last paragraph?
A. I have-
Q. Do you remember whether there -was any conversation with you as to whether that was wise or unwise, whether it might be well to have it stricken out before it went to the interdepartmental committee as an unwise suggestion?
A. I do not remember anything, I do not remember myself.
Q. You do not remember any discussion?
A. No.
Q. Have you the right paragraph, the one that deals with the chartered accountants?
A. Yes. It reads-
Colonel Orde then read the paragraph dealing with the employment of a reliable firm of chartered accountants. The questions by the commissioner continue:
Q. You do not recall that?
A. I have a vague recollection of hearing something discussed, but only informally. It never came to my attention.
By Mr. Ralston:
Q. I was asking you about interviews with Major Hahn during the period in which the interdepartmental committee were considering the Canadian contract. Did you have discussions with him?
A. Oh, I had numerous discussions with Major Hahn and the deputy minister, either in the deputy minister's office or consequent upon Major Hahn's seeing the deputy minister and being instructed to see me.
It is probable that at times Major Hahn went to the deputy minister's office, but as his visits related to the legal part of the contract the deputy minister always referred him to the judge advocate general, Colonel Orde. I ask hon. members to listen to this so that they will be in a position to see whether Colonel Orde is to be credited in connection with his interviews with Hahn. The evidence continues on page 3987:
By the Commissioner:
Q. Over what period?
A. Running from somewhere in January until I think towards the end of January.
And again on page 3988:
By Mr. Ralston:
Q. Just to clear that up. To go further with that. Does that mean you had no interviews with Major Hahn in February?

Bren Gun-Mr. Pouliot
A. Oh, I had some. I learned subsequently Major Hahn had come to England somewhere towards the end of January and that is why the interviews stopped then, at least for the time being.
Q. Did you have some interviews with him again in March?
A. I had some with him in February, around the end of February, after his return from England, and in March.
He had intimated before that his interviews were from the beginning to the end of January. The evidence continues with a question by Mr. Ralston:
Q. That is what I wanted, the period over which you had those interviews.
The Commissioner:	Did Colonel Orde keep
any diary or contemporaneous memoranda from which he can refresh his memory in any way, or does he just base that on memory?
The Witness: I wrote during that period two or three memoranda which I think are already in as exhibits.
By the Commissioner:
Q. They were contemporaneous?
A. Contemporaneous.
Q. That refreshes your memory?
A. That refreshes my memory.
Then on page 3990 there is the following:
The Commissioner: That is, he had no interviews with any solicitor representing Major Hahn or the John Inglis Company in connection with the Canadian contract?
Mr. Ralston:	In connection with the Canadian contract.
I must explain here that Mr. Lash, K.C., was appearing on behalf of the British government as well as on behalf of Major Hahn, When Mr. Orde met him, he did not meet him in his capacity as counsel and solicitor for the British government, but only as counsel and solicitor for Major Hahn. Then, again on page 3991, a question by Mr. Ralston:
Q. Did he ever tell you that Mr. Plaxton was engaged as a legal representative, until at the time I was going to deal with, that is March 17?
A. No knowledge of any connection with the Plaxtons at all.
That is to be noted. The evidence continues :
By the Commissioner:
Q. Did you have any indication, as far as the Canadian contract is concerned, by correspondence that Blake, Lash, Anglin & Cassels were acting?
Listen to how he answers this question:
A. It is rather hard to describe the situation. Major Hahn was continually up and down between Ottawa and Toronto and he was in and out of my office so many times. He would dash back with some suggested change and then he would come back two or three days afterwards. I do not know whether it is in order to mention it, but Mr. Lash's firm had been engaged in connection with certain other contracts of a similar type and I derived considerable comfort from knowing that Mr. Lash was at the other end of it.
Here is the judge advocate general of the Department of National Defence, who is entirely and absolutely incompetent, and who takes comfort from the fact that he is helped by counsel acting for the other parties. It is enough to disbar any lawyer whose name appears on the law list, and I do not see why this has not been brought out by other members who have spoken previously. It is something formidable. Here we have a man who, according to the evidence, can hardly sign his name, who oannot draft a contract, who has had no experience. You know the number of people who are engaged in that sort of work in the British war office, the British admiralty and the British air force. Here we have that man with a grade 4 clerk and a grade 3 stenographer, both of them incompetent, both making plenty of mistakes which were the cause of 'trouble. He cannot do anything; he has to rely on counsel for the other party ito do his own work. I continue quoting:
By Mr. Ralston:
Q. Did you ever discuss the contract with the Department of Justice?
A. No.
Q. Did you ever see Mr. H. A. W. Plaxton as the representative of Major Hahn previous to the signing of the Canadian contract?
A. No.
Then it goes on:
By the Commissioner:
Q. Why did you leave in the clause:
The party of the first part will provide or grant to the party of the second part an exclusive licence to manufacture the Bren gun in Canada.
Who told you to do that?
A. Instructions that I had got previously.
My time is not up yet, Mr. Speaker, but it soon will be, and I wonder if the house would have any objection to letting me finish reading this part of the evidence, which may take about fifteen minutes. I do not intend to say anything that will hurt anyone, but I want to put on record part of the evidence which is now downstairs and which is very difficult for hon. members to obtain.


Some hon. MEMBERS:: Hear, hear.


Jean-François Pouliot: Then I continue:
Q. You were solicitor for the-
A. I was the solicitor.
Q. Had you no realization of what an exclusive licence in Canada to manufacture the Bren gun meant?
A. Precisely, Mr. Commissioner.
Q. Who told you to put it in?
A. It was put in earlier. If you will look at the draft that was considered at the interdepartmental committee, at the first meeting that the committee had had, I think in January, and the clause that was inserted in there at the request of this officer, whoever it was, who saw me on December 22, you will notice there that there was an exclusive clause in that.
84S
Bren Gun-Mr. Pouliot

Then I quote from page 3996:
A	Unless I was instructed to the
contrary I was not going to_ remove anything on my own volition. I never liked it.
Here is a matter not of right or wrong but a matter of liking or not liking it. Then at page 4006:
By the Commissioner:
Q. Did you have to say up until three o'clock in the morning that time while the committee was meeting?
That was in the middle of March.
A. Yes, sir. I was there until three o'clock and I left my office at a quarter to eight the following morning. I was present in my office.
Q. And there were communications passing to and fro between the interdepartmental committee and yourself?
A. That is correct, sir. Sometimes they would send a note up, other times I would get a phone message to attend and I would go down and attend.	_
Q. And you were there until three o'clock in the morning?
A. I was.
Q. Great haste, was there not?
A. Very much so.
Q. Did you understand you had to stay up all night until three o'clock in the morning?
A. Well, I was instructed by my chief to attend and be on hand as the committee needed me.
There was the judge advocate general; there was the interdepartmental committee that was helping him with that contract, and the work of this gentleman and of the committee was so slow that after four months they had nothing ready in finished form. Therefore the deputy minister told the judge advocate general to stay that night in order to have it finished ready to present to council the next day. Apparently the British government was very anxious to have this contract completed.
Q. Whom do you mean by your chief?
A. The deputy minister of the Department of National Defence.
Then in discussing the work of the interdepartmental committee and also the work of the judge advocate general in drafting the contract, the commissioner said:
I am inquiring into the competency of those charged with the responsibility of drafting the contract.
Then, at page 4011, the commissioner continued :
Q. I am thinking of the hour. You worked through until 7.30 in the morning?
A. I did, sir.
Q. I sympathize with you very much. I sympathize with you very, very much. And you had no other legal help in this matter?
A. No.
Q. You just worked all night trying to put the document in the best shape you could?
A. There were two mistakes.

Q. You tried to put the document in the best shape you could? You were directed to stay to do this? I think you said, "1 was directed to do this or required to do this." By whom?
A. My instructions from the deputy minister were that this had to be ready for cabinet council at eleven o'clock the following morning.
Q. That is the system?
He had to work all night because he had done nothing useful in the previous four months. Then I quote from page 4021:
A. I attended a conference with Major Hahn and Mr. J. F. Lash, K.C., in the suite of offices of Blake, Lash, Anglin & Cassels.
By Mr. Ralston:
Q. Is that the first time you saw Mr. Lash in connection with this matter?
A. Yes.
That was March 28 or 29, in reference to the British contract. Then at page 4045 there is a letter from Colonel Orde to Major Hahn, an official letter which is extended in the evidence; and do you know how the judge advocate general, counsel for the Department of National Defence, addressed Major Hahn? Was it "Dear Major"? Was it "My dear sir"? No; it was "My dear Jim." He had known Major Hahn for only four months, but apparently they became very intimate.
Then at page 4048 there is a reference to the proposed British agreement which was made subsequent to the final draft of the Canadian agreement. Incorporated in the draft of the proposed British agreement were the changes which were consequential upon the interdepartmental committee meeting. Then Colonel Orde continued:
... I took one copy of this draft, of the proposed agreement which I called my working copy, which had in it the various changes discussed at the meeting-


Walter Edward Foster: I am sorpr but the hon. gentleman has exhausted his time.


Some hon. MEMBERS:: Go on.


Some hon. MEMBERS:: No.


Jean-François Pouliot: Shall I go on or not?


Walter Edward Foster: I cannot allow the hon. member to proceed except with the unanimous consent of the house.


Some hon. MEMBERS:: Go on.


Jean-François Pouliot: Thank you.


Some hon. MEMBERS:: No.


Walter Edward Foster: Do I understand that the hon. gentleman has the unanimous consent of the house?


Some hon. MEMBERS:: No.


Walter Edward Foster: Then the hon. member must resume his seat.

Bren Gun-Mr. Manion


Hon. R. J. MANION (Leader of the Opposition) :: Mr. Speaker, I should like to join with the hon. gentleman who has just resumed his seat (Mr. Pouliot) in congratulating the Minister of Justice (Mr. Lapointe) on celebrating his thirty-fifth wedding anniversary and his entrance into parliament. Sometimes, as I realize that the years are slipping by-because I am only a couple of years behind my right hon. friend-
I wonder if we should extend congratulations or commiserations on our birthdays and various other anniversaries. However, so far as congratulations are of any use, I offer mine to the right hon. gentleman and hope he may enjoy many more years of great happiness.
I rise a second time in the debate, Mr. Speaker, because I feel that the issue should once more be clarified. It has been to my mind so confused that the air needs clearing. I suppose, sir, it is fair to say that it has been confused intentionally. There has been an injection of extraneous matters of all kinds, attacks personal and political upon many of us on this side of the house, no doubt with the object of confusing the issue, hiding the facts, disguising the irregularities, concealing the incompetence, and distracting attention from the method of awarding the contract.
I have listened to nearly all the speeches made on all sides, and in all sections of the house on this question. While on this side of the house-and I include all parties on this side-different speakers criticized the contract and the manner in which or method by which the contract was awarded, to my mind they criticized fairly the whole proceeding. But from the other side, from the Liberal benches, there came practically no answer of any kind, except abuse. All of them were like that, except in the case of two speeches. One of those was entirely abuse, and so it is not therefore an exception. One of the two to which I last referred was a studied legal argument. The one which was worst, I am sorry to say was delivered by the Minister of National Defence (Mr. Mackenzie) himself. In my opinion, undoubtedly the best speech was made by the hon. member for Vancouver-Burrard (Mr. McGeer), who spoke on Thursday night. In fact, I think the hon. member for Vancouver-Burrard was the only speaker on that side of the house who at all adhered to the charges, if we may term them such-or to the statements made by myself and others on this side of the house. He was the only one who got away from personal and political abuse,
and the only one who really attempted in a legal manner to build up a case on behalf of the government.
So far as the minister's speech was concerned, he never touched the issues at all. His speech was made up of abuse, of name calling, of protestations of honesty and of unparliamentary remarks. I have been in the house now for twenty or twenty-one sessions, I believe it is, and I say without hesitation that never in all those sessions have I heard anything approaching, in unparli-mentary language, the minister's speech.
But he was not alone in that. Here are some of the terms which flew across the house at us, from various speakers-some from the minister and some from others. These are the terms which I jotted down: "Cheap Tammany Hall politicians." "Sinister alliance" between ourselves and members to my left. Incidentally in that regard I recall that between 1921 and 1925 the right hon. gentleman who now leads and then led the government (Mr. Mackenzie King), was very glad to have alliances with the same group, the third party. It was not termed a sinister alliance at that time; what can be wrong in my hon. friends to my left and ourselves taking the same attitude on a question such as this?
Other terms used were in regard to the hon. member for Waterloo South (Mr. Homuth)-"a bird of passage," "Prussian mentality," "never loyal to any principle." The same hon. member who used the "bird of passage" phrase, namely the Minister of Transport (Mr. Howe) called us blackguards. Another speaker,-I think it was the hon. member for Parry Sound (Mr. Slaght) spoke of a political cabal.	[DOT]
Those terms have been used as a defence for this indefensible contract. Fortunately-and I say it is fortunate- some of the terms used by the Minister of National Defence have been expunged from Hansard-against the rules of the house, incidentally. They have been expunged I think for the good of Hansard. It is better perhaps that in years to come readers of Hansard should not think that such terms would have been permitted in the parliament of Canada. So that the expurgated edition of Hansard is probably all to the good so far as that is concerned.
But, sir, I do say this: it is no wonder that the Vancouver Sun, ordinarily an outstanding Liberal organ, spoke of the brawling in parliament, and of the vulgar personalities cast across the floor of the house by an hon. gentleman who comes from the city in which
Bren Gun-Mr. Manion

that paper is published. They added that there is still a strong suspicion of gross political patronage in the awarding of the contract, and they say that the contract was improperly awarded, and that abuse of this kind does not hide the facts.
I want to say with all due respect that I think it is time we had decorum in the House of Commons. In the past week, I think there have been more justifiable appeals against unparliamentary language, and fewer appeals upheld, than I have ever known in the whole of my parliamentary life. If we are to build up the reputation of parliament and help the progress of public business, I suggest that more severity be used in the future, particularly in connection with name calling and unparliamentary language.
The hon. member for Vancouver-Burrard I believe made the only real attempt to defend the contract and the proceedings leading up to it. He emphasized the few favourable points, and there were very few. Naturally he ignored the unfavourable evidence, and used his Celtic wit to cover up the weaknesses of his case. He quoted in favour of the case only one section of the report, that section which has been so often quoted-the one paragraph pointing out that there was no corruption.
In the Parliamentary Guide I note that the hon. member for Vancouver-Burrard describes himself as by trade an iron moulder and by profession a lawyer, which to me explains a rather interesting point. When I was out in Vancouver a few months ago, being interested in this picturesque gentleman-


An hon. MEMBER:: You are interested in pictures, too.


Robert James Manion: So is Judge Davis; he is interested in pictures. My hon. friends opposite are not interested in pictures. All they are interested in is the one part of the report exempting them from corruption. They showed a very distinct disinclination to discuss the rest of the report, which is made up of pictures.	,
But, as I have said, the Parliamentary Guide has described the hon. member as by trade an iron moulder and by profession a lawyer. When in Vancouver I asked about him and his ability as a lawyer, and somebody said that the lawyers claim he is a very good iron moulder, and the iron moulders claim he is a very good lawyer.


An hon. MEMBER:: That is smart.


Robert James Manion: However, I agree with the iron moulders. I agree with them that he is a very good lawyer, if I may judge from the case he put forward the other day.
[Mr. Manion.)


Mr. REID:: He was a good iron moulder, too, for I worked for him.


Robert James Manion: I just wanted to say I had so much confidence in him as a lawyer, after listening to him defend this case, that if I am ever accused of murder-and particularly if I am guilty-I will hire him to defend me.
There is one other speech I wish to mention, and that is the speech of the Minister of Transport, who, I regret, is not in the house. He was the one who used the word "blackguarding," and called the hon. member for Waterloo South "a bird of passage." The Minister of Transport has been in the House of Commons and in the public life of Canada only about three and a half years. Prior to that time he was in business, looking after his own affairs as an engineer, and, if rumour is correct, building up quite a comfortable fortune. Over a period of twelve years the hon. member for Waterloo South has been serving in the parliamentary halls of this country- nearly four times as long as the Minister of Transport has served. I think therefore that some of the minister's speech was more particularly out of place, because of that fact. I suggest that in all probability the hon. member for Waterloo South, who has served twelve years, will still be serving in the parliamentary halls of this country when the Minister of Transport is not.


An hon. MEMBER:: In what party?


Robert James Manion: At the present time he
is supporting ours, and I have no doubt that he will continue to support ours. The fact that a man changes his party is no disgrace. Wasn't it Lincoln who said that anybody who has not a little more brains to-day than he had yesterday has no brains at all? And I believe it was Morley who once said, "Anybody who wants my discarded opinions can have them," and I say the same.
In the case before the house the Liberals have ignored the issues altogether. They have ignored the report with the exception of three paragraphs which deal with members of parliament and senators not profiting by the contract, and with the "no corruption" paragraph.
They based their replies largely on personal and political abuse, on affection for the minister, and on the tu quoque argument, that from 1914 to 1918 there was graft and profiteering in war contracts. I know nothing about that. I do not deny it, but I do say this: if that was true in war time, it is all the more important in peace time that we should avoid all grafting and suspicion of grafting.

Bren Gun-Mr. Manion
My book was also quoted freely by hon. gentlemen opposite, and I have no objection to that. In the book I pointed out some of the duties of an opposition, but there are men much more prominent in public life than I who have discussed that question. I well remember that Stanley, the so-called Rupert of debate, said that the duty of an opposition is to oppose, and that dictum has been often quoted. But in quoting my book hon. gentlemen opposite omitted to mention entirely a paragraph which shows that when I wrote that book, at a time when I was not even dreaming of being leader of this party, I had the same opinions that I have now with regard to profiteering in munitions. This is the paragraph, to which I refer:
If ever again men are compelled to risk their lives at a dollar a day, others who do war work at home should be put absolutely upon the same basis, and no one permitted to profit in any manner whatsoever by war.


Mr. POWER:: What page, please?


Robert James Manion: Frankly, I do not know.
I have not read the book, I was so sick and tired of reading the proofs.


Charles Gavan Power: Pity us, then.


Robert James Manion: Well, you do not have
to read it. In fact, I warn my hon. friends over there that if they go on quoting from my book I am going to take revenge by turning some of my party on the Prime Minister's book. I tried to read it myself, and as I once told the right hon. gentleman, I got only half way through. That is as far as I ever got.


Mr. MACKENZIE (Vancouver):: Which one of the three books?


Robert James Manion: I am speaking of Industry
and Humanity. I have not read the others.
I did not intend to speak long, but if my hon. friends opposite insist on helping me out I am afraid I shall have to take more time.
I was saying, Mr. Speaker, that the opinion I expressed in the paragraph I have just quoted from my book was just as sincere then as the opinion I hold now, and my opinion now is just as sincere as it was then. I believe the one thought that is in the minds of the people of this country to-day, and particularly of the young men who may have to risk their lives if ever we are so unhappy as to have to take part in a war again, is that no one should make money out of war. That I believe is the desire of all of us, and I shall quote the Prime Minister before I sit down as taking exactly the same attitude,
although I cannot understand why after taking that attitude, he permits such a contract as this to be made.
There was only one member opposite from the province of Quebec who raised the race cry in this debate. He claimed that we were making an attack on General LaFleche because of his race. But the hon. member who is just now taking his seat, the hon. member for Humboldt (Mr. Fleming), who belongs to the same profession as I do, not only repeated the race cry but as well went on to attack me for using patronage to get a job, as he put it. As a matter of fact, Mr. Speaker, I was giving up what was for a young man a very lucrative medical practice to get a job in the army. That was the patronage I was looking for; that was the job-hunting I was doing.
We were also told that we were trying to destroy the minister and the deputy minister. I say that they have both been friends of mine in days gone by, and I think they are yet. As a matter of fact, we appointed the deputy; I do not know whether that fact has been pointed out. He had a very fine record, and I have a very high admiration for him, and my opinion is that the reason he acted so strangely in regard to Hahn is that he was being pushed forward by his minister.


Ian Alistair Mackenzie: That is not true.


Robert James Manion: The minister denies that, and I do not wish to misrepresent him. But irrespective of what the deputy minister did, it is the government of the day that is responsible-not only the minister. The deputy minister has been a friend of mine for many years and I have the utmost respect for him. Personally I made no attack on him whatever, and I do not think anybody on this side of the house, in any of the parties here, attacked him personally. We merely directed attention to the action taken by the department in an effort to give the contract to Hahn.
There have also been several wicked attacks on Colonel Drew, who is another fine soldier with a very fine record. Whatever Colonel Drew did he certainly performed a service for this country, inasmuch as he saved this country a lot of money-a quarter of a million dollars, as I have seen it claimed-by causing another letter to be drawn up as a supplement to the contract. In addition, I believe that his article will make any government in power in this country in the future more careful in the letting of contracts for munitions of any kind.
Bren Gun-Mr. Manion

Then there was a defence by several hon. gentlemen opposite of Major Hahn and the hon. member for Trinity (Mr. Plaxton). So far as Major Hahn is concerned I did not attack him; I have not attacked him. I think he was just a shrewd business man who saw in the hon. member for Trinity an instrument at hand to help him get a government contract. He found the government even more pliable as an instrument than the hon. member for Trinity, so he went right ahead and got the contract. That is all we can say about Major Hahn. I do not know him; I have never met him. In that respect I am in the same position as the Prime Minister, except that I did not appoint him as representative of Canada to get secret information from the British government, as did the Prime Minister.
But all these defences or so-called defences that hon. gentlemen opposite have put up, even that of the hon. member for Temiscouata (Mr. Pouliot), who has just sat down after making an attack on another official of the Department of National Defence, are no defence at all of the awarding of this contract. They are no defence at all, to my mind; they are just an attempt to confuse the issue. Every speaker from the Liberal party, with the exception of the hon. member for Vancouver-Burrard, ignored practically fifty pages of the report and tied his whole case to three short paragraphs which disposed of the charge of corruption.
Now I am going to attempt to define the issue, which is not that of corruption or graft. The issue in a sentence is the whole method of buying munitions at a time when, because of threats of dictatorships against democracy, we in Canada, a peace-loving people, are forced at a cost of tens of millions of dollars to arm in our own defence in order to maintain our freedom as a nation. That is the issue so far as I see it. Are we going to place our very life as a nation in jeopardy through politics, patronage, and favouritism, as in the Bren gun contract? Or, are we going to rise above that low level and act as a united people in building up our defence of all kinds

doing it fairly, honestly, sanely, without profit, so far as is humanly possible-giving our citizens at the same time a chance to show that they love sufficiently this Canada of ours to bend their energies, without the profit motive, to a great national endeavour on behalf of the safety of our country? If the Bren gun contract is any criterion, then we are going to take the low road of private profit and personal selfishness. But I refuse to believe that such is the desire of the great masses of our people.
I insist, sir, that our business men and all others are only awaiting the clarion call

of national service in order to answer it enthusiastically, honestly, and loyally. The government supporters say that in the last war patronage and war-profiteering were rampant. I do not know whether they were or not. I was not here. But if that charge is true, there was at least the excuse of a great crisis and a great danger because of Canada's participation in the war. Even if the charge be true, is it then necessary that we must again, in peace time, continue to wallow in the mire of filthy profiteering while the very lives of our youth and the very existence of our beloved Canada are at stake?
I say now, sir: let the Prime Minister rise to this challenge and I will stand beside him and back him completely in the noble work of not only declaring our high principles as Canadians, in this regard at least, but of living up to those principles.
How then does this contract, and the procedure leading up to it, conflict with the issue as I have defined it? To learn that we must study the whole report of Mr. Justice Davis, the royal commissioner who investigated the Bren contract. It is true he says that no member of parliament or senator is to share in the benefits of the contract, and he adds that there has been no corruption. He makes these statements in three short paragraphs on page 51. But on nearly all the other pages he shows the gross irregularities that led up to the consummation of the deal. For example, the report shows clearly, among other things:
1. That the methods leading up to the signing of the contract and the method of giving it were unfair;
2. That Hahn, whom apparently no one knew, except Mr. Plaxton, was shown great favouritism;
3.	That thereby other industrialists, much better equipped, were given no opportunity to compete with Hahn.
4.	That Major Hahn, although unknown to the Prime Minister or to the Minister of National Defence, was made by the Prime Minister the representative of Canada in order to give Hahn access to secret information from the British war office;
5.	That Hahn and his fellow promoters were placed, through this contract, in a position to make more than 81,000,000 out of stock for which they paid nothing-this in addition to the profits of the contract itself.
Perhaps I should correct that. They paid an average of 52 cents a share and some of it sold for over six dollars a share, or over one million dollars of profits to them. This in addition to the profits of the contract itself.'

Bren Gun-Mr. Manion
These are a few of the aspects of the deal which seriously undermine the confidence of the Canadian people, not only in this deal but in the whole method under which tens of millions of dollars of this year's estimates are to be spent in purchasing munitions.


Mr. MACKENZIE KING:: I hope my
hon. friend will make it clear that these are deductions of his own, and not findings of the commissioner.


Robert James Manion: Well, I think they are
the findings of the commissioner.


William Lyon Mackenzie King: Where?


Robert James Manion: All right, we will deal with them as we go along. I know how quick the right hon. gentleman is to contradict statements. I have the proof here; I was not going to quote it, because the matter is so clear there is no dispute about it. It is on page 24.


William Lyon Mackenzie King: I am not
speaking of an individual quotation; I am referring to these four or five different inferences which my hon. friend drew as he was speaking.


Robert James Manion: I am going to prove the
inferences. In fact I am going to prove them and a lot of others as well. Neither the right hon. gentleman nor any one on that side of the house has risen and refuted -not one. The right hon. gentleman is now getting out from under. He has risen not once, but at least fifteen times to contradict hon. members on the statement that he appointed Major Hahn as representative. He said he meant that he had not appointed Hahn to get some information from the British war office, but when he saw I had the evidence he wanted to get out from under.


William Lyon Mackenzie King: I meant what
I said, and what I said will appear on Hansard.


Robert James Manion: Well, here is the concrete information. The High Commissioner in London, Mr. Massey, had been asked by the Minister of National Defence to get Hahn inside information, to obtain for him entrance to the war office. Hahn states, according to this report-and I am sticking to the report-that he got very impatient because Mr. Massey was not getting him the appointments he had promised. Finally Mr. Massey cabled to the Prime Minister. The cable, dated November 9 is set forth in the report. I will not read it in full but Mr. Massey quotes the cablegram of the Minister of National Defence to him of that day to get Hahn in communication
with him, and then he adds-in his cablegram to the Prime Minister, who is the Secretary of State for External Affairs:
In order to obtain information desired, war office must be requested to give Major Hahn, as representative of the Canadian government, access to information of a secret nature which normally is not given to other than government officials.
That is the part which applies to my statement. I will read that sentence again:
. . . access to information of a secret nature which normally is not given to other than government officials.
And the Prime Minister, as Secretary of State for External Affairs, the following day sends a cablegram making Hahn representative of the Canadian government. I do not need to quote it unless the Prime Minister denies the cablegram. I simply say that he made Hahn the Canadian representative to get this secret information from the British war office.


William Lyon Mackenzie King: What my hon. friend just said is quite different from what he said a moment ago. This was to get information, not to get a contract.


Some hon. MEMBERS:: Oh, oh.


William Lyon Mackenzie King: If my hon.
friend will read the cable which was sent, and the reply, he will see that the purpose was to get information to enable the Department of National Defence to reach its own conclusions with reference to a certain matter,-namely the possibility of producing the Bren gun in Canada-nothing else.


Robert James Manion: The cable was to get Hahn the information. The Prime Minister asks me to read the cablegram, and I will read it:
. . . Your cablegram 9th November 396.
That was the cable which was sent by the high commissioner to the Prime Minister.
Have discussed matter with Minister of National Defence. You might request war office to give Major Hahn, as representing Canadian government in this particular, any information which they consider desirable and necessary to enable national defence to reach conclusion on possibility produce Bren gun in Canada.


Some hon. MEMBERS:: Hear, hear.


Robert James Manion: It is not desired to request furnishing of information on any article other than this gun.
What are my hon. friends saying "hear, hear" for?


William Lyon Mackenzie King: It is just to get information solely for the purpose of considering the possibility of producing the Bren gun in Canada-nothing else.
Bren Gun-Mr. Manion


Robert James Manion: Not to get information, but to make Hahn representative of the government of Canada; to enable Hahn to go inin the words of the high commissioner-"as representative of the Canadian government" to get "access to information of a secret nature which normally is not given to other than government officials." That was the point, and it is clear. The Prime Minister has been jumping up from his seat-I have watched him rise about fifteen times-to contradict and to try to get out from under. Why, if there is not something wrong with the contract, is the Prime Minister continually trying to get out from under?


Some hon. MEMBERS:: Oh, oh.


Robert James Manion: I do not think that the loud laugh proves anything. It is simply that the Prime Minister made Hahn the representative of Canada, when without his being made Canada's representative Hahn would never have got the British contract. By the way, some hon. member on the other side said that that contract was given to Hahn before the Canadian contract. As a matter of fact it was given four months after the Canadian contract.


Ian Alistair Mackenzie: The
promise of it was not.


Robert James Manion: I do not care about
promises. If we go into promises in addition to all this I do not know what we shall have.


Ian Alistair Mackenzie: If the hon. member reads the evidence he will find that he is wrong there.


Robert James Manion: No, I am not wrong. I am as right on this point as I am on the others.


Ian Alistair Mackenzie: May I inform my hon. friend that a telegram came from the British war office on November 9, 1937, to the effect to give a contract for 5,000 guns to the John Inglis Company.


Robert James Manion: The minister had an opportunity the other day to put some of this matter on record. Instead of doing so he indulged in a tirade against us on this side. I read from page 42 of the report:
The Canadian contract was authorized by order in council P.C. 561 of March 22, 1938.
A little later on:
The war office contract-
That is the British contract.
-which was complementary to the Canadian contract, was not signed until July 15, 1938-
Almost four months later.


Ian Alistair Mackenzie: That is right.


Robert James Manion: What is the use of quibbling about the details? It is just a quibble by which the Prime Minister tries to get away from the fact that he appointed Major Hahn as the representative of this government. That to my mind is one of the most extraordinary things in the whole proceeding; and I believe that the Prime Minister is ashamed of it. When I accused him of it the other day in the house he said -at first-no, he had not done it. He feels to-day, I think rightly, that he should not have made a perfect stranger Canada's representative. There are all kinds of employees of the Department of National Defence from the deputy minister down, who are outstandingly able men.	.


Mr. McLARTY:: May I ask my hon.
friend a question on this matter? This was for the manufacture of the gun, not considering it from the standpoint of technical efficiency?


Robert James Manion: What did Major Hahn know technically about the manufacture of the Bren gun until this government taught him, sent him over to learn about it in England? Surely my hon. friend the newly appointed minister does not suggest that no one of the outstanding servants of the Department of National Defence could not have gone over, quite as well as Major Hahn, and obtained that information.


Norman Alexander McLarty: There was one sent over, previously, and this was from the standpoint of manufacturing, not as to their technical efficiency.


Robert James Manion: Major Hahn had never manufactured. All he had done was to assemble radios, and when he was assembling these for ten years he or his company went broke and he paid twenty cents on the dollar. That is his record. I say that there are in the department this very day and there have been all along public servants like the deputy minister and various others who could have obtained the information and come back and laid it before the department. Industrialists could then have been called in just as the British government did in the matter of aeroplanes, and the whole thing would have been carried out in an absolutely upright manner and aboveboard.
We have had in the research department for some time one of the greatest soldiers in the British empire, Major-General McNaughton, a man who is not only an outstanding soldier but a Master of Science from McGill university. He is at the head of the National Research Council. He used to be chief of general staff.

Bren Gun-Mr. Manion
My former leader, Mr. Bennett, said many times that he had been informed by British soldiers that Major-General McNaughton was the best military man in the British empire. I cannot pass judgment upon that statement but I do know at any rate that Major-General McNaughton has a magnificent war record. Why did not the government send him over to get the information needed? Major Hahn is not a scientist. He is a lawyer by profession. Why was he sent? Why did not the-government enlist the services of Major-General McNaughton and have him bring back the necessary information and submit it to the department, and then have industrialists called in? If that course had been followed the government would have obtained the same sort of efficiency as was secured in connection with British aeroplane contracts for which the government there set up a board in Canada.
Major Hahn and his associates could have made a million dollars out of their stock dealings. At the price of the stock they stood to make a million dollars. These are a few of the aspects of the deal that seriously undermine the confidence of the Canadian people, but there are many other similar phases of the subject with which I shall deal briefly.
These points have all been brought to the attention of the government and of the house, most of them by myself, a good many of them by other hon. members including my own followers, and none of these points have been dealt with by hon. members opposite. They have confined themselves to the three paragraphs that exempt the persons involved from the charge of corruption. My hon. friends opposite have never tried to refute any argument advanced on this side. For my own part, in my first remarks I limited myself to the report itself. I gave chapter and verse for every statement I made, and I did not make any statement on my own authority. All the statements I made were based upon the authority of the Bren gun report as submitted by Mr. Justice Davis, the commissioner, and not one of the points that I established has been dealt with in the many speeches that have been made by my hon. friends opposite in supposed refutation of the arguments advanced against the government.
My criticism is against the government as a whole and not against the minister particularly for his action. I say that the whole government is responsible. Now what were the statements I made? Let me give a synopsis of them. First, I said the Prime Minister was deceived by the hon. member for Trinity when that hon. gentleman wrote
him in 1936, two and a half years ago, that a group of friends of his had a fully equipped plant in Toronto for the making of munitions. As a matter of fact the plant is not yet fully equipped; it is only being equipped at the present moment. Nor is it manufacturing munitions to-day. It was not fully equipped and therefore the hon. member deceived the Prime Minister. He rose in his place and expressed himself in a brief, dignified speech of three and a half minutes. I do not wish to do this young man any harm, but he never touched that charge made against him, and nobody has. Does anyone deny that he deceived the Prime Minister?


Mr. HOWE:: The plant is as fully equipped as any plant in Canada.


Robert James Manion: It was not. My hon. friend who is an engineer should know better, and he does know better. It was a boiler factory and had been closed for a couple of years.


Clarence Decatur Howe: It was a machine shop.


Mr. LENNARD:: Some of the machinery ordered for this plant has not been made yet.


Robert James Manion: As my hon. friend says, some of the machinery ordered has not been made yet. It was not fully equipped to manufacture Bren guns.


An hon. MEMBER:: That has not been said.


Robert James Manion: If he had said that it
was as fully equipped as other plants in Canada there might be an argument, but he said that it was fully equipped. That is the first charge, and there has been no denial of that statement. And the deputy minister later, no doubt basing his statement upon the assurance of the hon. member for Trinity, spoke of a reliable group controlling plants- they had become plural by that time. In the second place, there was a letter of introduction given to Major Hahn by the minister -a letter of introduction given to a man who was unknown to the minister. The minister said, a year and a half afterwards, that he did not know this man. So that he was unknown to the minister, to the deputy minister, and to the Prime Minister. In the third place, there was this unknown man being made a representative of Canada. To me this is the most extraordinary proceeding in the whole transaction. I have the evidence here and I have given it, and I suggest that the reason why the Prime Minister has been trying to get out from under the position of having made this man the representative of Canada in this matter is that he realizes that he made a serious blunder. The
Bren Gun-Mr. Manion

next statement I made was that pressure had been put upon the British government, because the commissioner says in the report at pages 47-48:
As appears from the communications quoted above, the war office as late as February 3, 1938 (Exhibit 190), was still adhering to its desire to deal with the Canadian government and not with a Canadian manufacturer direct.
That was more than a month before the contract was signed by the Canadian government. And the Prime Minister, in reply to the letter from the hon. member for Trinity asking whether Canadian firms might obtain orders from the British government for the manufacture of munitions, said, as quoted in the report:
It would be necessary, of course, to see that it was distinctly understood that such orders as were obtained, were at the instance of the firm itself and not either directly or indirectly, at the instance of the government of Canada.
Major Hahn would never have got a contract from the British government without the support of the government of Canada. He was pressed into the contract, and the government of Great Britain, the war office, was fighting against it up to a month before the Canadian contract was let, and did not award their own contract until four months later. The Prime Minister in the House of Commons on April 2, 1937, a year before, had said, in reply to the leader of the Cooperative Commonwealth Federation:
We agree with him in asserting the principle that no profits should be made out of war.
But how can you take profits out of war without nationalizing the industry? That is the only means by which profits can be taken out of war, by some form of nationalization. The minister himself is quoted at page 11 of the report, referring to this very statement of the Prime Minister which I have just quoted:
The Minister of National Defence said in his evidence before the commission that that statement was in agreement with his own view. The minister said that there had been no change in the actual policy of the government, or of himself; that government ownership is the best and that the next is competition.
But they did not have either; they had neither'government ownership nor competition but resorted to a form of patronage and favouritism; and the claim that Major Hahn was appointed merely to get information on behalf of the Department of National Defence is to my mind ridiculous and unfair. It is ridiculous because the department, as I have said, had at their disposal many men whom they could have sent to England. They could have sent over men who were better equipped

both mentally and by training than Major Hahn. And it is unfair to the other industrialists of the country that one man, without any special training, should be picked out and given peculiar rights, pushed forward by this government and made a special representative of Canada to obtain secret information from the war office in Great Britain.
The charge has been made from the opposite side that this discussion in this house has had the effect of suspending the flow of contracts from Great Britain. I say that is mere balderdash. The surest way of getting contracts from the British government is to demonstrate to them that they will get a fair deal over here, as in the matter of aeroplanes.


Mr. GRAY:: Are they complaining about this contract?


Robert James Manion: Well, my hon. friends opposite seem to imply that because they say that this discussion was preventing us from getting contracts. Half a dozen hon. members have said so.


Ross Wilfred Gray: Future contracts.


Robert James Manion: I deny it. I repeat, the best way of securing contracts is to let the British government know that they will get a fair deal.
Another statement I made was that this was patronage, and the minister replied heatedly that it was not. What is patronage? My definition of patronage is that it is favouritism to friends of the government in connection with government business to the exclusion of all others. I think that is a very simple definition. Surely this is favouritism to friends of the government in connection with government business to the exclusion of all others. What makes it worse is the fact that it is patronage in connection with munitions, something which should be above and beyond politics.
Then I made a statement about Lieutenant Jolley. I simply quoted the commissioner who pointed out that Lieutenant Jolley was inexperienced. Some hon. member then said, forsooth, that I was making an attack on youth. As a matter of fact I made no attack on youth. I know something of the problems of youth. I have three youths myself who have had their troubles in getting established in life. I know something first-hand about the problems of youth, and I have every appreciation of the difficulty of those problems. I based my remarks on the statement of the commissioner, who said that obviously Lieutenant Jolley was without the business experience and judgment necessary for a job such as he was given.
I said that there was no competition in connection with a contract where millions

Bren Gun-Mr. Manion
were involved. I said it was an injustice to others, many of whom were more capable than Major Hahn. I pointed out that Major Hahn had no special experience for this work.
Then I pointed out that this was a cost-plus contract with ten per cent going to Major Hahn. There are times when cost-plus contracts cannot be avoided, but I do not admit that this was necessarily such a time. A cost-plus contract is one of the most dangerous types of contract to give unless you are very sure of the man to whom you give it. There is generally an inclination to increase expenses under the contract, because the higher they are the greater the profit. Ten per cent on the cost of the work was allowed by this contract. Such a contract is always undesirable if it can be avoided. It was stated that there was no competition possible. If there was no competition possible as far as price was concerned, there must have been competition in connection with the percentage allowance. There may have been many who would have been willing to take this contract on a 71 or 5 per cent basis instead of ten per cent.


Ian Alistair Mackenzie: That is
what it is, 7-76 per cent.


Robert James Manion: My friend says that, but
I cannot find it. I based my statement on the contract, which says that it is ten per cent. I am going to deal with the matter on the basis of ten per cent. There may have been someone willing to take it for five per cent. There are outstanding men in this country who are patriotic and loyal enough to be willing to come forward and get together an organization to make these munitions without profit at all. That is what should have been done.
In connection with the interdepartmental committee the commissioner states-I do not intend to read the whole report-that they were given much misinformation with regard to the British government's preference for Hahn. He said also that they were overruled with regard to competitive bids and that their efforts were rendered futile by the attitude taken by the Department of National Defence. I ask, why the hurry? Under this contract no guns were to be delivered until the lapse of nearly three years, at which time some 500 odd guns were to be delivered. So far as the Canadian contract was concerned, they were within its terms if within two or three days before the end of three years they were able to make this delivery of guns. That is my understanding of the contract. Since it was to take three years to make delivery, why the hurry?
I pointed out also that the placing of the defence purchasing board recommended by the commissioner under the jurisdiction of the Minister of Finance rather than under the Department of National Defence was a complete condemnation.
Now I intend to touch upon a few points in the contract itself. I did not deal with these the other day. I had read the contract at that time, but since then I have read it again two -or three times. I am going to point out a few items in the contract which seem rather extraordinary to me. So far as my experience goes, and I have had some experience as a minister in awarding large contracts, there is nearly always a clause in these contracts which forces the contractor to give something in the way of bond or marked cheque, sometimes for twenty-five per cent of the value of the contract, which is retained until the contract is practically completed. There is nothing of that sort in this contract. The financial solvency of the contractor is not assured so far as the government is concerned.
Then the licence is for ten years, and may be renewable for further periods of ten years. That makes it appear as though this is to be a continuing business which will go on for a very long time. The hon. member for Kootenay East (Mr. Stevens) referred the other day to the fact that the contract allows the costs of preliminary investigation. I venture to say that there is not a day in the year with the exception of Sunday on which there are not business men in the city of Ottawa looking for government business. Never in my life have I heard of a contractor or business man being paid his preliminary expenses for coming down here to look for a contract from the government.
The minister says the profit is not ten per cent, but 7J per cent. I do not quite follow him, but at any rate a percentage is allowed on everything conceivable. To my mind, the provisions are far too wide. For example, under the contract he gets ten per cent on the cost of tools, dies, jigs and gauges purchased by the government. Can anyone tell me what justification there is for that? One of my hon. friends has just placed in my hand a clipping from the Globe and Mail of January 27, to the effect that contracts for a little more than $64,000 had been let in connection with machinery for this work. This is not a criticism, it is merely a statement of fact. It reads:
Ottawa, Jan. 27.-Six Canadian firms have been awarded contracts to supply machinery required in connection with the manufacture of Bren machine guns, national defence department announced to-night.
Bren Gun-Mr. Manion

The total figure given is $64,776, and this amount is to be paid by the Department of National Defence. Can anyone tell me why Major Hahn should get ten per cent of the cost of machinery purchased by the department? Yet there is a clause in the contract stating that. Surely there is no justification for it, He gets his percentage, whether it is 7J per cent or 10 per cent I am not arguing at the moment, on salaries, on wages, on travelling expenses, on maintenance and repair of plant, on insurance, on depreciation, on legal fees and on the interest on bank loans in some cases, when made for additions to plant. Major Hahn is to get his percentage on all these items. That is covered by the clause to which I have just referred. The government buys the machinery for the plant and he gets his ten per cent. Then in case he is not sufficiently covered, there is a blanket clause to cover a lot of other things. Perhaps I should read this clause, which appears on page 10 of the contract.


Mr. McLEAN (Melfort):: Did the hon. leader of the opposition say that it is ten per cent on the capital cost of the machinery?


Robert James Manion: I have the contract here. Perhaps I should read the clause. It appears on page 5 and is as follows:
Ten per centum of the actual cost of tools, dies, jigs, and gauges purchased by the party of the first part or the party of the second part;
The party of the first part is the government, and the party of the second part is Major Hahn. He gets ten per cent of the actual full cost. Then the clause goes on to deal with the other things to which I referred.


Mr. McGEER:: That does not include the machinery.


Robert James Manion: It includes some material bought to manufacture that.


Ian Alistair Mackenzie: Read the evidence on that point.


Robert James Manion: I am not going to plough through nearly five thousand pages of evidence ; I am going by the report and by the contract. The only attempt that has been made by my hon. friends on the other side to read the evidence, has been made in an effort to cover this up with words.


Ian Alistair Mackenzie: The public accounts committee certainly will do it.


Robert James Manion: Let them go ahead and do it.


Mr. MacLENNAN:: I do not take up much of the time of this house, and I would like to

ask a question. I think the hon. gentleman ought to listen to the explanation in connection with that item. What is the explanation of the suggestion made by the leader of the opposition that Major Hahn apparently was to get some percentage of the money that was to be paid?


Robert James Manion: I am afraid this is not much of a question.


Walter Edward Foster: I do not think that is a proper question.


Robert James Manion: I do not say this with disrespect, but I do not think it helps matters at all. The hon. gentleman has an opportunity to make his own speech; I am sure he is not going to make mine.


Donald MacLennan: It was only to help the hon. gentleman.


Robert James Manion: I did not see much sign of it.
Then the government pays the cost of converting this factory into a gun manufacturing plant. Naturally, with all these things to be considered, the cost of the guns is unknown. I have heard it stated frequently, and I think the minister stated, that the cost of the guns is known. It is not; no one knows to-day what the guns are going to cost. Then, sir, on page 12 of the agreement there is a joker clause, which provides for payments in addition to the ten per cent, and I am sticking to the ten per cent because that is the figure used throughout the contract. Not only will the government have to pay that; under certain conditions they will have to pay more. It is stated that a standard price will be set for these guns; once that price is fixed, whether or not he gets anything in addition, will depend upon what Major Hahn does in regard to manufacturing costs. He can get a higher percentage if he manufactures these guns for less than the standard cost. Who is going to set that standard? It will be set by the minister and his department and Major Hahn. There is a very grave opening, to my mind, for some very peculiar work. This looks to me like a sort of joker in the contract.


Ian Alistair Mackenzie: I may
tell my hon. friend that that was inserted by the interdepartmental committee against the actual objections of the officials of the Department of National Defence, in conformity with the British practice.


Robert James Manion: I am glad to hear my
hon. friend say that, but if it was inserted against their wishes they should have had

Bren Gun-Mr. Manion
the courage to stop it from being inserted. The interdepartmental committee was overruled in almost everything else, and I do not see why the department or the government should let themselves be governed by the committee in this regard.


Gerald Grattan McGeer: Would it not be fair to say that this incentive clause was demanded by the British war office; that the Canadian department objected to it and the British war office insisted on that incentive clause being included?


Robert James Manion: I am afraid the hon. member for Vancouver-Burrard (Mr. McGeer) and the minister will have to fight that out between themselves. The minister says it was inserted on the insistence of the interdepartmental committee; the hon. member for Vancouver-Burrard says it was inserted by the British war office. I do not care by whom it was inserted; I do not think is was necessary. I think this man Hahn was making plenty out of this contract without the insertion of any such clause.
Then there is another extraordinary clause, to me the most extraordinary of all. My hon. friend from Vancouver-Burrard made a very fine speech on this subject, on which I complimented him before he came in. Incidentally he was the only speaker whom I did compliment.


Miss MACPHAIL:: They should make him Minister of National Defence; he was the only one to offer any sort of defence.


Robert James Manion: I wish, however, when he made his defence, the hon. member for Vancouver-Burrard, with his fertile Hibernian brain, had dealt with the contract itself. Knowing contracts fairly well, as he does, I have no doubt he could have pointed out some of the bad points as well as the few good one he was able to find.
On page 14 of the contract there is one of the most extraordinary clauses I have ever seen, and I should like to read the important part of it to the house. I should like to know what it means, and I would like my hon. friend from Vancouver-Burrard, or any member of the government who can do so, to explain it. It provides:
-the party of the second part-
That is, Major Hahn.
-hereby agreeing that it will not employ any person on or in respect of any of the work required under this contract, or allow any person to have access to the plant wherein the manufacture of said Bren guns is being carried
out unless and until it has furnished in writing to a party to be designated by the party of the first part-
That is the government.
-the name, address, and other particulars,-
Politics, I wonder?
-as may be required by the party so designated of each such person, and said party has approved of such person being employed on or having access, as the case may be, to the said work and plant.
That appears in the middle of page 14 of the contract.


Gerald Grattan McGeer: If my hon. friend would accept an explanation of that clause-


Robert James Manion: The hon. gentleman has made his speech, and I am going to explain this clause. During the course of his remarks my hon. friend said a man never listened himself into trouble, and I pass the advice back to him now. I listened to him fairly patiently the other night. When I read that clause I asked what it could mean but this: it simply says that Major Hahn or the John Inglis Company-and I am referring to Major Hahn as the John Inglis Company -cannot hire anybody without the consent of this government. They have to give the name, address and other particulars, to somebody designated by the government, before ay person can be hired.


Mr. ROGERS:: I should like to ask one question. As I read it, the first part of that clause entirely explains it:
The party of the second part undertakes and agrees not to disclose or communicate any information concerning the said Bren guns to any unauthorized person or persons, nor shall they permit any unauthorized person or persons to have access to that part of their plant where said Bren guns are being constructed during the construction of the said Bren guns-
Then it goes on to the section quoted by my hon. friend, but why did hg not quote the whole clause?


Robert James Manion: I did not quote it because I did not choose to do so. I allowed my hon. friend to quote it, but I should not have done so; he is following me and he can deal with it. I say that is not the case; I say secrecy has nothing to do with it. I say that is a political patronage clause for the purpose of giving this government an opportunity to hire its own friends. That is the only thing I can read into it. All they had to do was say that no one but Canadians could be hired, if they wanted to be particular; they could have seen that the employment was restricted
Bren Gun-Mr. Manion

to Canadians. Why should this government, in a contract given to a private individual, want the names, addresses and other information of all those to be employed? Incidentally some of the members from Toronto tell me that this is what is being done at the present time; that unless you are a Liberal you do not get a job in the Hahn plant right now.


Ian Alistair Mackenzie: May I assure my hon. friend that that is not with my knowledge.


Robert James Manion: That may be; I am not questioning that. I am simply saying it is probably with Mr. Plaxton's knowledge. He is the local member. And by the way, since hon. gentlemen opposite are asking me questions, I should like to know who is the man designated by the government. They say somebody has to be designated, and I should like to know who it is.


Ian Alistair Mackenzie: I think there will be about thirty inspectors and auditors altogether.


Robert James Manion: But in regard to the employment?


Ian Alistair Mackenzie: I have no knowledge at all.


Robert James Manion: Apparently someone is to be designated. To me that is the most extraordinary clause in the whole contract. Then there are a few other clauses on which I should like to touch. The government may cancel the contract, but if they do so Hahn receives $43,750; that is, if they cancel it before he starts to deliver these guns. If it is cancelled after he has started to manufacture them he receives more. If this contract is to be cancelled at all, supposing it should be cancelled by the government for cause, why should Hahn receive anything? Why should it be written into this contract that if it is cancelled before he begins to manufacture these guns he will receive $43,750? To my mind these provisions are sufficient to illustrate the preferred position of Hahn.
Then I should like to ask another question, touching a matter which I mentioned during my previous remarks. In his speech the other day the minister made no reference to it; neither did anybody else. This contract was signed by the Canadian government on March 22. It was tabled in the House of Commons on June 29, three months and seven days later. Why was it not tabled when it was signed? The house was sitting.	-


Ian Alistair Mackenzie: It was never asked for.


Robert James Manion: Is that a proper answer, that it was never asked for? This contract should have been tabled immediately after it was signed, but it was not tabled until three or four days before the house prorogued, for the purpose of preventing discussion on the contract. Undoubtedly, sir, that is the whole answer. I say the whole matter was clumsily-


Ian Alistair Mackenzie: I rise to a point of order. On May 5 a press release was given to the press of Canada giving details of this contract. On May 16 the hon. member for Yale (Mr. Stirling) asked a question of me, and in my reply in this house I gave details as to this contract.


Mr. STIRLING:: And on the point of order, if I may say so, the minister promised then to table the contract.


Ian Alistair Mackenzie: I said I should be glad to.


Robert James Manion: The contract was not tabled until two or three or four days-two days, I am informed-before the house adjourned, anyway. So that the whole affair had not a good appearance.
Then there was the stock promotion. These gentlemen-Major Hahn, the Plaxtons and Messrs. Cameron, Pointon and Merritt, a firm of stockbrokers in Toronto, got stock sufficient to give them nearly-indeed, over a million dollars in profits over and above what they paid for the stock. They paid around $100,000 for it, at 50 cents a share, and they could have sold it-they did sell some of it-at between $6 and $7 a share. So they stood to make over $1,000,000 in profits.
No Liberal standing upon the other side of the house has either endorsed or denied that statement. It was put on record by the hon. member for Waterloo South (Mr. Homuth), the hon. member for St. Paul's (Mr. Ross) and the hon. member for Mount Royal (Mr. Walsh). I did not mention it in my previous remarks, but it was put on record, and nobody has discussed it. I hope the Minister of Labour (Mr. Rogers), when he is on his feet, will give his opinion with respect to a contract for munitions which is framed in such a manner that the holders of that contract, before the plant is equipped, can clean up a million dollars, for nothing. They can put a million dollars in their pockets.
If that is the opinion of this government, then I say it is not the opinion of the people of Canada that that should be allowed. I say it is repugnant to the ideals of the Canadian

Bren Gun-Mr. Manion
people. If my hon. friends opposite are reading the press of this country to-day they will get that opinion clear enough, even from Liberal papers,-the Vancouver Sun, the Winnipeg Free Press and this very morning from the Ottawa Citizen.
I have received letters by the score. In fact, I have one in my pocket from a young man in which he says he is thirty-three years of age. This man lives in Montreal-I do not know him-and he says, "If this country is in danger I want to fight for it, but I don't want to fight for a lot of blood-sucking profiteers back home, for whom I would be risking my life." That is the attitude the young men have and if we are going to give them confidence in democratic institutions, confidence sufficient to make them loyal to their country, we must stop such dealings as this.
The Prime Minister took the same attitude in the house. He said no profits should be made out of war. I have already quoted his words, as they appear in Hansard of 1937. With the Prime Minister's ideals, against profits being made out of war, I wholly agree. But in this declaration, as in so many others, his actions do not agree with his expressed principles. I said on an earlier occasion that he was a theoretical reformer but a practical reactionary. I say in this instance that he is a theoretical idealist but a practical politician. If his ideals interfere with politics, then so much the worse for ideals. That is the only conclusion I can come to.
This contract is irregular. It shows the possibility of huge profits in stock deals, in complete contradiction of the ideals expressed by my right hon. friend. I have quoted statements of my own wherein I have expressed myself contrary to those methods. I have put on record my remarks in the book I published. I put myself on record in 1934 before the League of Nations, and in various other places. My proposals were that the contract should be cancelled, that Major Hahn might be recompensed if necessary, that the government should take over and carry on the work and that it should expropriate the plant. I pointed out, as I point out again, that there need be no delay in connection with the construction of these guns. It would suit the British government, because it has been pointed out over and over again in the report-certainly it has been stated clearly by Mr. Justice Davis-that the British government did not want to deal with a private contractor at all. They wanted to deal with
the government of the day in Canada. I said this in closing my remarks-as I am about to do now:
This is not ordinary government business. No one can deny that this is a question of life and death, a question of peace and war; it is a question of the life of our boys. It is a question of the safety of this country, and perhaps it is more than that, it is a question of our freedom as a nation.
That has been described by someone as drawing a long bow, and the suggestion is made that I was exaggerating. Am I exaggerating? I am going to put on record one statement I have in my hand which has nothing to do with the Bren gun contract, but which does deal with the defence of Canada. I hold in my hand a publication known as the Canadian Defence Quarterly. It is described as,-
A magazine published for the purpose of providing a medium for the free discussion or expression of views on matters of interest in connection with defence.
At page 54 is an article by a young man-well, I suppose he is a young man; I do not know him. His name is Flight Lieutenant A. Carter, M.M.-Military Medal-Royal Canadian Air Force. I will read two paragraphs of his observations with respect to defence. He says:
When the railway terminal was taken to Churchill and the grain elevators built, the transportation of grain and other produce by the shortest route from western Canada to Europe became a reality.
However, this is also the shortest route from Europe to western Canada; not only that, but with the development of long range high speed aircraft, this route makes it possible for an enemy to establish bases near enough to permit of the bombing of all industrial centres from Quebec city to Fort William and, operating from off Churchill or Port Nelson on the west coast of the Hudson bay, even Winnipeg itself.
Ships laden with aircraft, equipment, fuel and bombs could enter the Hudson bay via the north Atlantic and the Hudson strait, anchor off Churchill or Port Nelson and from this floating base assemble long range bombers which would necessarily have to be float planes or flying boats owing to lack of possible landing fields in this part of the country.
I will not read more, but I will show a map to hon. members and, in a few words, I will describe it. In this article Flight Lieutenant Carter sets out a map of the Hudson bay area, including Hudson bay and James bay, jutting down into the central part of the Dominion of Canada. He gives certain mileages-and I must say that I had them checked up, because I could not believe my eyes, although I thought I knew my geography fairly well. He gives the mileages from bases in Hudson and James bays, bases to which there
Bren Gun-Mr. Manion

is nothing in the world to prevent a German boat, or any other war ship, coming during a time of war. For instance, if a ship could escape, as did the Emden, during the early months of the last war, it could reach these points in Hudson and James bays. There would be nothing in the world to prevent them. We have nothing by way of defence at Hudson strait, Hudson bay or James bay.
On the map he sets out some mileages from points on Hudson bay and James bay, where he says an enemy ship could establish a base and enable enemy aircraft to make flights to some of the main centres of Canada. A aircraft carrier could discharge its aircraft and, from these places in Hudson bay and James bay, attack the different points in Canada. Would it surprise hon. members opposite to know that from Charlton island, down in the lower end of James bay, it is only 500 miles to where I am standing at this time?-just 500 miles. To Quebec, it is 525 miles; to Montreal, 525 miles; to Ottawa, 500 miles; to Toronto 550 miles, and to Niagara Falls-the farthest point-600 miles. To Sudbury, where we find the International Nickel Company, a huge industrial organization, it is only 400 miles. The mileage to the Abitibi dam is not given, but, following the scale used, it would appear to be about 150 miles. To Fort William it is 500 miles. Then, from a point in Hudson bay, namely from Churchill, it is 625 miles to Winnipeg, 600 miles from Port Nelson to Winnipeg and the same distance from another point farther down the coast of the bay.
In other words, an enemy ship could come across the Atlantic ocean and nothing in the world could stop it. It could go into Hudson bay or James bay and, with aircraft, operate over a long range, even as far as Niagara Falls. Those enemy aircraft could fly down and destroy Niagara Falls and Ottawa. They would travel a distance of only about 600 miles each way, or a total of 1,200 miles- and what is that, to-day, in view of present flying possibilities? They could destroy Ottawa, Montreal, Quebec, Toronto and Niagara Falls, none of which is more than 625 miles from the landing point.


Mr. LANDERYOU:: What about the British and United States navies?


Robert James Manion: The British and United States navies existed in the early months of the war. But at that time the Emden went all around, to different parts of the world, and did a great deal of damage. There is nothing in the world which would stop such a raid. I am simply showing the possibilities *
which have been pointed out by this gentleman in the pages of the Canadian Defence Quarterly. I state these facts to show that I am not exaggerating when I say that this may mean the very life of our defence, and the very existence of our country as a nation.
So I submit that this is one of the most important questions before the Dominion of Canada at the present time. What condition are we in to protect ourselves? What condition have we got into, through the expenditure in the last two years of something like $70,000,000? I am told we are in a very, very poor condition. I have discussed the matter with various people who are much better informed in that regard than I am.
In view of these and many other facts I ask if the Prime Minister can sit quiet and endorse this deal? After all, it is his responsibility.
May I make it perfectly clear to the house and to the country that we have been discussing this important matter from the standpoint of what is best for Canada in defence, and of the method of providing munitions for that purpose.
My object, and the object of this party, is to insist upon the honest spending of the huge sums of money which are allocated for the defence of Canada.
I repeat now what I said in my last speech in this chamber, and on other occasions outside of the House of Commons, that there should be absolutely no profits whatsoever for anyone in the production of munitions to be used for the defence of our own country. That has been my attitude for nearly five years, and I am prepared to-day on behalf of this party to adhere now and in the future to that position. The attitude of our party is one of determination to stop, once and for all, any patronage or profiteering in munitions contracts.
Let the Prime Minister make any proposal he wishes to do away with such methods as the Davis report has revealed, and we will unhesitatingly support him.
In conclusion, may I say that this party has done what it conceives to be its duty. We cannot stop the reference to the public accounts committee, on which we have eight members out of fifty, and I assume the question will go to that committee. To that I have no particular objection, but I have no hope that the public accounts committee will add anything to the information already given to us by the Davis royal commission.
Hon. NORMAN McL. ROGERS (Minister of Labour):	Mr. Speaker, the leader
of the opposition (Mr. Manion) has said just now that he believes the issue in this debate

Bren Gun-Mr. Rogers
ought to be more clearly defined. I agree wholly with that. He has said that there has been a confusion in the minds of some who have spoken as to what is the real issue in this debate. I agree with that too. But I would suggest to him that the confusion, such as it is, to which he has referred, has not been limited by any means to those who have spoken from this side of the house, and I would add further, that he himself cannot escape his share of responsibility for having not clarified the issue in the first instance.
He has said just now that the form and substance of this contract constitute the real issue before us at this time. Am I correct in that?


Robert James Manion: No, that is not correct.


Norman McLeod Rogers: Well, my hon. friend did
suggest that a few moments ago.


Robert James Manion: I gave the issue as I
see it.


Norman McLeod Rogers: And he admitted a little
later that when he spoke to this house in connection with the main motion more than a week ago, he had not read the contract at all.


Robert James Manion: I did not admit any such
thing. The minister is entirely wrong. I said I had read the contract then, and I have read it three or four times since. I had read the contract. I do not want my hon. friend to misquote me. I read to the house what the issue was. I have a copy of what I said before me. I allowed the minister to rise and give a quotation while I was speaking, so perhaps he will allow me to read again what I said was the issue. It was this:	The issue in a sentence is the whole
method of buying munitions at a time whep, because of threats by dictatorships against democracy, we in Canada, a peace-loving people, are forced at a cost of tens of millions of dollars to arm in our own defence in order to maintain our freedom as a nation. That, Mr. Speaker, is the issue.


Norman McLeod Rogers: I think my hearing is
fairly good, and when I listened to my hon. friend he certainly did state that when he spoke to the house before he had not read the contract.


Robert James Manion: I did not state any such
thing. If I did, I would have stated what was untrue.


Norman McLeod Rogers: I am willing to accept my
hon. friend's word, if he says that, but I understood him to say that he had not read the contract.
This debate has continued now for something more than a week, and I am sure there
are many in this house and beyond it who believe that every legitimate public interest would have been served if the questions at issue had been discussed over a period of two days, with a subsequent reference of all matters in dispute to the public accounts committee, as proposed originally by the hon. member for Vancouver North (Mr. MacNeil).
Why has this not been done? The reasons are abundantly clear. The leader of the opposition has preferred to prejudge and anticipate any report that might come from the public accounts committee. He has asked for the cancellation of a contract which was not condemned by the royal commissioner who was appointed to inquire into that contract and the circumstances surrounding its negotiation. At the same time the hon. gentleman has opposed, by implication at least, any further investigation of this contract and allied matters by a properly constituted committee of this house; and in this rather strange and devious course he has been aided and abetted throughout by members of the Cooperative Commonwealth Federation group, including the hon. member who moved the original motion to refer this question to the public accounts committee.
In the face of these facts, it is small wonder that we on this side of the house who are as . anxious, as we have proved, as any members of this house to have this matter thoroughly investigated, are convinced that members of opposition groups have now replaced, as it were, what was at first the paramount consideration in their mind-the reference of this matter to the public accounts committee for further investigation-with considerations of immediate political advantage. I say this with some regret, but I question if any other conclusion can be drawn from the debate as it has developed in this house during the past week. It is not easy to see any good reason for the objection taken by the leader of the opposition to the reference of this question to the public accounts committee. The reason he gave-


Robert James Manion: I do not object now, if I may say so, but I want it properly discussed in this house, not drowned in the committee.


Norman McLeod Rogers: If my hon. friend wishes to make another speech, that is his privilege.


Robert James Manion: My hon. friend himself
interrupts very often.


Norman McLeod Rogers: But the reason he gave is not one which could be accepted by any member of this house, and I am going to recall that reason to the mind of my hon. friend. He said in effect that he did not want an
Bren Gun-Mr. Rogers

investigation by a packed committee behind closed doors. Those were the words he used, and I suggest to him that in making that statement he did not bring credit either upon himself or upon the party he leads in this house. As a matter of fact, his attack was not merely upon the public accounts committee, but upon the entire committee system as it is practised under our parliamentary system. If what he said is correct of the public accounts committee now, it was true of the public accounts committee under any previous administration; and if it can be applied to the public accounts committee, it can be applied, I submit, to every committee of this house. My hon. friend in stating that he is not prepared to have this matter referred to the public accounts committee because that committee is a packed committee, and because, as he suggested, it met behind closed doors, which is absolutely incorrect, as he well knows, has by any rule of estoppel precluded himself from referring in the future any matter to any committee of this house.


Robert James Manion: That is just nonsense.


Norman McLeod Rogers: My hon. friend expresses entire lack of confidence in any investigation [DOT] that might be given to this matter by the public accounts committee.


Robert James Manion: That is different. I agree with that, but not as regards any other committee of the house. My hon. friend said that I condemned every committee of the house. I did not do any such thing.


Norman McLeod Rogers: How does my hon. friend distinguish between one committee and another?


Robert James Manion: If my hon. friend wants an answer I shall give it to him.


Norman McLeod Rogers: They are composed in entirely the same manner in accordance with the practice in this house and the practice at Westminster.


Robert James Manion: Does my hon. friend want an answer?


Norman McLeod Rogers: Let me put this question to the members of the opposition groups: From the moment that Colonel Drew wrote his article and it appeared in Maclean's magazine, has there been the slightest reluctance on the part of this government to submit this question to the most complete and exhaustive investigation? Was there any delay in creating the royal commission? Was there any lack of care in the selection of the

royal commissioner? Was there any restriction put upon the terms of reference which would in any way prevent the commissioner from making a finding upon the facts?


Robert James Manion: There was by the counsel.


Norman McLeod Rogers: I shall deal with that in a moment. The answers to these questions are, I suggest, clear and conclusive, but apparently they have to be repeated again and again in order to correct the impression which speakers from the opposition are attempting to have go out from this house to the country. The Prime Minister (Mr. Mackenzie King) put the position in the clearest possible light when he opened this debate on February 3. I quote his words:
The article was published on September 1, and the minister reached Ottawa a few days after. When he arrived in Ottawa there was a meeting of the cabinet which he attended. He brought the matter up for the consideration of the government, and he felt, and other members of the government felt, that if this article with the allegations it contained were to go without investigation until parliament reassembled, which would be some time in the new year, there would immediately be created in the public mind considerable concern over these allegations and it would be assumed that the government was seeking to avoid inquiry into the matter. The government took the alternative course of not delaying for one moment the matter of instituting an inquiry and adopted the course which would afford the most effective means for the fullest and most searching kind of inquiry, namely, an inquiry under royal commission by a judge of the Supreme Court of Canada.
So far as I can recall, the only objection taken by anyone to the form of the original inquiry by Mr. Justice Davis was that raised by the leader of the opposition when he suggested that the commissioner had submitted under pressure of counsel to a restriction of the scope of his findings. I do not wish to misquote my hon. friend, and I shall give his exact words on that point, on page 706 of Hansard:
In other words I find myself asking, was the whole investigation turned into a farce, in this way: that Mr. Justice Davis apparently desired to give opinions but was influenced so strongly by the views I have quoted, including the views of government counsel, that he did not, presumably, dare to do so?
Those are the words used by my hon. friend when referring to this matter.
No one who has even a slight acquaintance with Mr. Justice Davis would believe for one moment that he would be influenced by counsel against his better judgment, and I suggest that it is a reflection on him even to make a suggestion of that kind. The truth is that any restrictions accepted by the commission were not imposed by counsel at all but

Bren Gun-Mr. Rogers
were based upon the provisions of the Inquiries Act, combined with the fact that Colonel Drew, with more caution than he usually displays, failed to make any specific charges against any individual in the article published in Maclean's magazine. So that the suggestion of my hon. friend that it was counsel who imposed a restriction upon the commissioner is surely very wide of the actual facts.


Robert James Manion: Would the hon. gentleman quote-I shall not quote it-what Mr. Justice Davis said about that on page 35 of the report?


Norman McLeod Rogers: Well, Mr. Speaker, I have read the report; I am capable of forming [DOT] my conclusions from the report in the same way as my hon. friend has done, and I suggest to him that it was for the commissioner to decide-


Robert James Manion: According to the report, he did decide.


Norman McLeod Rogers: -after arguments of counsel, whether or not he could deal with charges which had not been made specifically by Colonel Drew in the article written in Maclean's magazine. There was no restriction imposed by counsel, least of all any restriction imposed by the government. The only restrictions accepted by the commissioner were those implicit in the terms of the Inquiries Act.
Let me turn now to the issue which is actually before the house in this debate. Perhaps my hon. friend will allow me to state the issue as I see it, even as, a little while ago, he stated it as he saw it. In simple terms the issue before us is this: In the light of the report made by the royal commissioner on the Bren gun contract, should that contract be cancelled forthwith, or should the contract itself and the several questions referred by the commissioner for the consideration of parliament be referred to the public accounts committee for further investigation and report? These are the two. alternative procedures before the house at the present time. In his original amendment my hon. friend proposed that the Bren gun contract should be cancelled forthwith. When that was ruled out of order, the hon. member for Kootenay East (Mr. Stevens) moved another amendment which, I suggest, was in effect for the same purpose, namely to bring about the immediate cancellation of the Bren gun contract; whereas the hon. member for Vancouver North (Mr. MacNeil) who moved the original motion suggested that the report on the contract and allied matters should be referred for investigation to the public accounts committee.
In the first place neither the report of the commissioner nor anything that has been said
in the course of this debate can be urged in justification of the cancellation of the Bren gun contract. There are only two sufficient reasons which might be given for the cancellation of this contract. The first is that the contract is tainted with fraud and corruption, and the second is that in substance it is not a good contract. I think at this point it might be useful to refer to what was said a little while ago by the leader of the opposition with respect to charges that had been made by Colonel George Drew, charges which subsequently were fully investigated by Mr. Justice Davis. The leader of the opposition has said that he is now making no charges of fraud or corruption with respect to the Bren gun contract. In the most recent issue of Maclean's magazine I read these words:
There is not one word in the Davis report which disputes the facts disclosed in Maclean's article.
But I suggest that one thing which has led to the confusion in this debate is this, that members on the opposition side have been dealing in large measure with the evidence brought by Colonel Drew before the commission, and have been ready to draw inferences from that evidence which were entirely rejected by the royal commissioner, Mr. Justice Davis. Maclean's magazine refers to the facts having been fully borne out by the investigation. But it was not the facts alleged by Colonel George Drew in the article which he wrote in Maclean's magazine that caused the most damage in this country, and my hon. friend, I am sure, is fully aware of this. What really tended to create suspicion and undermine confidence in the Department of National Defence were the insinuations and innuendoes which were drawn from those facts by Colonel George Drew. I suggest that the whole purpose of the article written originally by Colonel Drew and published by Maclean's magazine was to prove that there had been fraud and corruption in connection with the Bren gun contract.


Mr. DUNNING:: To make the Canadian people think so.


Norman McLeod Rogers: Undoubtedly that was the impression which was sought to be created in this country by the publication of the article by Colonel George Drew. If there was any doubt on that matter, it was dissolved by the charge made by Colonel Drew to the commissioner in the course of the investigation. Colonel Drew attempted to prove fraud and corruption in this contract and he failed completely to do so. That was the purpose of the attack on *he minister and the Department of National Defence. That was the impression

Bren Gun-Mr. Rogers

which was sought to be created in the country by the proprietors of Maclean's magazine. If I am asked why these specific accusations were not made in the original article, the answer is so clear that he who runs may read. Colonel Drew knew that what he wrote in that original article would expose him to the law of libel and slander, and he preferred apparently to damage other reputations rather than risk his own. He knew equally that what he said in the course of the inquiry before Mr. Justice Davis would be protected by the privilege which surrounds judicial proceedings.


Mr. CAHAN:: No, no. The minister certainly cannot go that far. Even a commissioner is not protected.


Norman McLeod Rogers: I am going to refer in a moment to what Colonel Drew said.


Charles Hazlitt Cahan: I have read a judgment of the judicial committee to the effect that the commissioner himself is not protected by any privilege.


Norman McLeod Rogers: If it was not the intention of Colonel Drew to prove that there had been fraud and corruption in connection with this contract, how else can one account for his boast, given at the Ontario Conservative convention, that the contract itself would be cancelled before the opening of this session of parliament? Surely it would be only upon the basis of some fraud or corruption in connection with the contract that any government would have been justified in cancelling it, particularly in view of its close connection with the contract let by the British war office. If there had been fraud or corruption in connection with this contract it would have been condemned with equal vigour on all sides of the house. But upon that point the commissioner has left no one in doubt. The leader of the opposition apparently objects to the repeated reading of that section of the report which deals with this important matter, but I suggest that if this entire question is to be placed fairly before the people of the country it is well that we should remember three things: First, that it was the intention of this article in the first place to create the suspicion that there had been fraud and corruption in connection with this contract; second, that all the evidence in the matter was brought before the commissioner; and, third, that the commissioner found that there was no evidence which would justify even the suspicion of fraud or corruption. These are his words:
There is no evidence that any member of the Senate or of the House of Commons of Canada was admitted to any share or part of the contract, or to any benefits to arise therefrom,

or had been promised or given any suggestion that he was to have any share or part of the contract or was to be admitted to any share or part of the contract, or to any benefit to arise from the contract.
The evidence relating to the activities of Mr. Hugh Plaxton prior to the making of the contract has already been set out or referred to in this report, and with that exception (and excepting of course the minister presiding over the Department of National Defence) there is no evidence that any member of the Senate or of the House of Commons of Canada had any connection with or took any part in the discussions or negotiations leading up to the contract.
There is no evidence that any senator or member had any connection with or took any part in the affairs of the company or in the sale of shares or securities of the company.
I think it right to say that there is no evidence (nor is there in the evidence any ground for suspicion) that the minister or the deputy minister or any officer or official of the Department of National Defence was guilty of any act of corruption or anything in the nature of corruption.
Surely in the light of the evidence brought before the commissioner, and in the light of his own findings, it could not be suggested for one moment that there was the slightest ground for the cancellation of the Bren gun contract because of any taint of fraud or corruption.


Mr. WOODSWORTH:: The minister is trying to clear up the situation, and I should like to understand whether from his standpoint the granting of special privileges to one individual would come in any way under his terms of "fraud" and "corruption?"


Norman McLeod Rogers: Upon that point I should say that all the evidence was before the commissioner as to the method of negotiation of the contract, and the commissioner found no evidence of fraud or corruption with respect to that. I should think that would answer my hon. friend completely. The commissioner says further at page 49 of the report:
No substantial objection can be taken in my view to the provisions of the Canadian contract, though in the absence of any competitive bids or terms of manufacture, I am unable to pass upon the substance as distinct from the form of the contract.


James Shaver Woodsworth: Is that not the
point?


Norman McLeod Rogers: I am coming to that:
It is important, of course, that the contract be a good and businesslike contract; but what is more important after all is whether the procedure adopted in making the contract was that best calculated to protect the public interest and to secure the confidence of the people of Canada that there would be no improper profiteering in the private manufacture of war armaments for the defence of the country.

Bren Gun-Mr. Rogers
I have read the entire paragraph given in the report. We will take it for granted, as it ought to have been taken for granted from the beginning of the discussion, that there is no ground whatsoever for the cancellation of the contract upon the basis of its having been tainted in the slightest degree with fraud or corruption.
That brings us to the question of the substance of the contract, as to whether it was in all the circumstances a good contract. The leader of the opposition said that there had been some confusion in the minds of speakers in this chamber with respect to the matters that were really at issue, and I have no doubt that he had in mind that this house had not given sufficient attention to the substance of the contract. Well, I have followed this debate carefully from day to day and certainly the suggestion of my hon. friend did not apply to a number of addresses given from this side of the house by those who were competent to refer in an authoritative manner to the provisions of this contract. I have in mind the speech from the hon. member for St. John-Albert (Mr. McAvity), the speech of the hon. member for Parry Sound (Mr. Slaght), the speech of the hon. member for Vancouver-Burrard (Mr. McGeer), and the speech of my colleague, the Minister of Transport (Mr. Howe). These men spoke either as engineers or as lawyers with respect to both the form and the substance of the contract, and I recall that the member for St. John-Albert stated that the practice followed in the awarding of the contract did not differ in any important respect from the procedure followed in the letting of contracts by the imperial munitions board during the last war. Not onty that, but the Minister of Transport, who is an engineer of long experience, also stated, after a thorough examination of the contract, that in substance it was the kind of contract which would be regarded as a good one had it been entered into by a private corporation in this country.
There is the further question whether or not this contract ought to be rejected simply because it was not given after competitive bids. There are large questions of policy involved in any suggestion of that kind, and that question of policy has been discussed to a limited extent in the course of this debate. It is stated against the method actually followed that it involved the giving of a special privilege to one selected contractor, and the suggestion was made that this practice of necessity should be condemned, because it assumed the form of political patronage. Now, it does seem to me, as one examines the question in terms of policy, that those who 71492-55J
say that we should manufacture all munitions directly in government factories are at least logical to this extent, that by that method one would avoid any suggestion of patronage. But I have not heard it suggested seriously by anyone who has taken part in this debate that in the light of the urgency of the last two years and the critical position of international affairs it would have been wise or practicable for this country to accept the delay that would have been consequent upon the manufacture of Bren guns in a government factory which did not at that time exist.


James Shaver Woodsworth: Will the minister
explain why not?


Norman McLeod Rogers: My hon. friend is fully
aware of the fact that the arsenal at Val-cartier deals with the manufacture of ammunition but to my knowledge, at any rate, has nothing to do with the manufacture of guns. The plant at Lindsay was dismantled at the close of the war and was not equipped to produce Bren guns; and for a government to set up an entirely new factory to manufacture guns of this kind-


Mr. HOMUTH:: May I ask-


Some hon. MEMBERS:: Sit down.


Karl Kenneth Homuth: I just want to ask this
question. Is it not a fact that they have built and are equipping an entirely new factory for the purpose?


Norman McLeod Rogers: The question of policy
has been discussed before in this house and will be discussed again. It may be discussed very properly before the public accounts committee. The negotiations with respect to this matter, let us remember, continued over a period of two years.


An hon. MEMBER:: Three years.


Norman McLeod Rogers: Three years, if you will.
The Minister of National Defence (Mr. Mackenzie) stated that in theory he favoured government manufacture of munitions, but at the same time he was obliged to take account of practical necessities. Can my hon. friends point to any other country such as Great Britain or the United States, which under the conditions that have existed during the last few years have taken the position that all munitions should be manufactured directly by the government. I know of no such country. It has been found necessary in both Great Britain and the United States to mobilize private enterprise in order to ensure that there shall be that constant supply of munitions which is absolutely necessary to maintain the security of the country.
(
Bren Gun-Mr. Rogers


Mr. COLDWELL:: France is doing it.


Mr. BRADETTE:: Look at the mess she
got into.


Norman McLeod Rogers: France is not dependent on that alone. In recent months France was faced with a complete stoppage of munitions probably because of the very policy which she had then adopted. I admit without question that there are strong arguments to be brought forward on the side of government manufacture of munitions, but so far as the immediate need is concerned I am not convinced by any means that it would have been feasible for this country to have manufactured Bren guns in the manner thus indicated.
I want to go further. If you rule out government manufacture of munitions, there is only one other method I know of which excludes completely the possibility of the kind of charges of patronage which have been brought against the present contract. That other method would be open tenders by public advertisement. I have not heard it suggested by anyone in this house that this would have been either a wise or a practicable method to have followed in the present instance. What has been suggested in this house as an alternate procedure which might have been followed in connection with this contract? The other day the hon. member for Leeds {Mr. Stewart) when discussing this matter Suggested that the proper way to have dealt with it would have been to invite tenders from half a dozen industrial companies. Am I correct in that?


Mr. STEWART:: That was just one method. There was also that of public tenders.


Norman McLeod Rogers: I think I am correct in Eaying that he thought it was the best method.


Robert James Manion: It would be better than only one.


Norman McLeod Rogers: Would the hon. member for Leeds suggest for one moment that by inviting tenders you would exclude the possibility of patronage? I ask that question deliberately. Some years ago my hon. friend presided over the Department of Public Works at a time when the Public Works Construction Act was passed. I am sure he is fully aware of the fact that by inviting tenders from a number of selected contractors not only do you not exclude patronage, you promote it.


Hugh Alexander Stewart: I want to say to the hon. gentleman that I am not aware of anything of the kind. In the Department of Public Works the method was public tenders; I do not know about the other departments.


Norman McLeod Rogers: I have no desire to labour this here because I want to deal rather with the question of principle, but my hon. friend did suggest that the proper way to avoid patronage was to invite tenders rather than to give a contract to some particular person who was selected for the purpose.


Hugh Alexander Stewart: One person, yes.


Norman McLeod Rogers: I suggest that by no means is his method a remedy. I have in my hand a long list of contracts which were let by him during 1934 and 1935. In each instance the contract was either not awarded to the lowest bidder, or given at the lowest price to someone who was not the lowest bidder.


Hugh Alexander Stewart: Exactly. I said the reason for doing that was to prevent one contractor from having too great a number of contracts, but the contract was always given at the lowest price.


Norman McLeod Rogers: What are we to understand from that? Is the money voted by parliament for unemployment purposes to be used to satisfy contractors, or is it to be used in the most economical way for the purpose intended? I find it difficult to understand the reasoning of my hon. friend on that point.


Clarence Decatur Howe: It is not very good.


Norman McLeod Rogers: Surely the question of the substance of this contract is one that can be considered far more effectively, not behind the closed doors of the public accounts committee but in the clear, open light of the public accounts committee and under conditions which will permit hon. members to obtain all the information they may desire from the officials of the Department of National Defence. One of the recommendations contained in the report of the royal commission has some relation to the matter I have just been discussing. That recommendation is that there should be set up a national defence purchasing board to be responsible directly to the Prime Minister (Mr. Mackenzie King) or the Minister of Finance (Mr. Dunning). That question was one which had been considered by the Minister of National Defence before the inquiry by Mr. Justice Davis. The minister has already stated in the house the reason why he did not think it wise to make that suggestion while giving his evidence before the commission. mere certainly has been no delay on the part of the government in accepting that one specific recommendation by Mr. Justice Davis. Certainly, so far as the future is con-

Bren Gun-Mr. McLean (Meljort)
cerned, the setting up of a board as recommended by the commission would remove to a large degree any suggestion of patronage in connection with the awarding of munitions contracts.
Despite what he said a few moments ago I doubt very much if the leader of the opposition (Mr. Manion) would lend himself to the view that with the present state of world affairs and with the present urgency connected with the manufacture of armaments it would be feasible for this country to enter upon the manufacture of armaments in government factories exclusively. Mind you, when I speak of armaments I refer not merely to guns but to shells and aircraft. He knows perfectly well that just recently the British government let large contracts to private companies in Canada for the manufacture of aircraft. No one would believe for a moment that it would have been possible for those contracts to have come to this country if we had been entirely dependent upon government factories for the manufacture of our own aircraft.
These questions are questions of policy referred by Mr. Justice Davis to this parliament for consideration. They have rereceived some consideration during the course of this debate. They can be investigated further by the public accounts committee, and they can be discussed again when the report of that committe comes before this house. But I suggest that there has been nothing said either during the early course of this debate or to-day by the leader of the opposition which justifies the cancellation of the Bren gun contract, either on the basis of its having been tainted with fraud or corruption or on the basis of its not being a good contract in substance.
May I suggest this finally? From the outset this government has recognized the danger, not merely to the Department of National Defence but to our democratic institutions of government, of permitting suspicion to surround the administration of any of our great public departments. The suspicion caused by the article written by Colonel George Drew, if it had been allowed to continue without immediate inquiry, would have undermined the usefulness of the Department of National Defence. And believe me, what one might describe as the poisonous smoke fumes of rumour and suspicion have done more to impair democratic institutions in this country than any consuming flames of corruption or malfeasance in high places. We owe it to ourselves as a parliament and as a government to see that there is no cause for suspicion; that charges, when made in good faith, are
given immediate investigation; and that if fraud or corruption should be found, it should be dealt with summarily and completely.
This government, I suggest, in the course of what has happened with respect to this inquiry, has given evidence of its good faith. We have done everything possible to facilitate investigation and remove suspicion, and I suggest that the tactics adopted by the opposition at least point to this, that they have been ready to delay further investigation and preserve suspicion. In the long run I have no doubt whatever as to the verdict of the country upon the propriety of the two alternative courses that have been followed, on the one hand by the government and on the other by the opposition.


Malcolm McLean: Mr. Speaker, the debate on the motion concerning the Bren gun contract has been before this house now for ten days, and during most of that time I have tried to listen carefully in order to understand, if possible, the motives behind the speeches and demands being made from various parts of this chamber. I am glad to have heard from the leader of the opposition (Mr. Manion) to-day the issues at stake, as he described it; but I am sorry that he read so quickly that it was impossible for me to take down what he called the real issue. I think, however, after all my listening during the past few days I have arrived at an understanding of the real issue as it is seen by the official opposition.
I am going to deal with that later on, but I am sure I have an understanding of the real issue as it is seen by my socialist friends, because the hon. member for Vancouver North (Mr. MacNeil) put it very clearly when he said that the real issue, in a nutshell, was whether munitions or guns should be supplied by privately owned or government-owned factories. That is quite clear and I want to deal with those two points. In doing so, I should like to go back to other statements made by hon. members on both wings of the opposition, in order to see what they thought about munitions, Bren guns and other matters two or three years ago. In the meantime I want to convey to the house my impression of the genesis of the row that has been before us for ten days and to give my opinions as they have been clarified by reading, thinking and much listening. I want to thank my good friend the hon. member for Vancouver-Burrard (Mr. McGeer) for the advice he gave the house the other day, that one can never listen himself into trouble, because I have been doing a great deal of listening.

Bren Gun-Mr. McLean (Meljort)
I think it is well known and understood that the real cause of this discussion arose when an ambitious politician in the province of Ontario found it necessary to earn some kudos. A convention was to be held at which a permanent leader was to be chosen for his party. It was charged by many that the then leader of the party was too matter of fact and lacked colour. We all know that the leader of the provincial party at that time, who has sat in this house for many years, was a man whose word was reliable and who described conditions as he saw them. He was not a lawyer-writer or a pamphleteer; he was a farmer, in touch with realities and with the soil that kept him sane. But this aspirant to that post wanted to displace him, and to do so he had to stir up something sensational. There was not much use in talking against the government of Ontario, because it had been endorsed by the people of that province only recently, so the natural thing to do was to turn to the dominion government, then in office for three years, which in the natural course of events would within a year or two have to go to the country for re-election. But he did see in Ontario one example, after which he patterned his conduct. He saw the young, brilliant, aggressive, successful premier of that province, who had captured the imagination of the people of Ontario as probably no other leader had since confederation, so he thought he would follow that pattern as far as possible. But he forgot that the successful premier of Ontario, with all the audacity of his sensationalism and all his brilliancy, had one thing that was not possessed by this aspirant to public office. That was the ability to gather facts which he could present against a moribund government, and evidence that would stand up under any investigation which might be held. But this political writer got in touch with a magazine that has always been opposed, in a greater or lesser degree, to Liberal parties and Liberal policies, and sold this article containing these insinuations.


Frank Exton Lennard: That shows their good sense.
Mr. McLEAN (Melfort); Well, possibly it does. I am not going to prejudge the contract at the present time. A little while ago the leader of the opposition said that hon. members on this side had not defended the contract. The issue is not the defence of the contract; the issue is and has been whether or not this contract should be referred to the public accounts committee for further study in regard to points with which the commissioner

himself said he would not deal because they were matters for the goverment and parliament to consider.
Circumstances as well as time furthered the ambition of Mr. Drew. From 1920 until about 1933 the minds of people in Canada and elsewhere were filled with visions of collective security. The people of this country, together with the people of all the democracies, wanted to be sure that peace would reign in our time. Defence expenditures and preparations were reduced to a minimum. Until 1930 not much money was spent by the defence department of Canada, and from 1930 to 1935 still less. That suited most Canadians who were sincere lovers of peace, as we all are, who thought they could safely afford to trust to the goodwill of other nations and spend no money on our defence. So, at a time when social services were costing hundreds of millions of dollars, defence was being neglected; and because the Canadian people were not defence conscious and were in a state of apathy, little was said about the matter.
But what happened in 1935? A young and brilliant man was appointed Minister of National Defence (Mr. Mackenzie). He knew something of the realities of war. He knew it was not sufficient for the people of Canada to be peace-minded or to want to live at peace with their neighbours, in order to ensure peace. He knew that in common decency and in the exercise of common sense the government and parliament must do something, even if it were only to compel respect for Canada's neutrality, were such desirable.
In 1936 the Department of National Defence asked for and secured additional grants. We thought at one time and we have heard hon. members from the far corner say-from my socialist friend's comer, I would tell the hon. member of the social credit party who queries me; I would not confuse him with any others- that we have the British navy and the power of the United States to defend us. That situation has changed very greatly in the past three or four years. We have seen that Great Britain's naval power has sufficient to do to defend her own interests, without being handicapped by defending Canada. While we know the United States will do everything it is possible for one friendly country to do for another, in the event of aggression, yet there are some things Canada must do for herself, if she is going to retain her self-respect, and if she is going to help the United States, if we were allied with them in the event of any difficulty.
What other changes have come about? We have seen fleets of aircraft flying the Atlantic and Pacific oceans. Soviet fliers flew across the

Bren Gun-Mr. McLean (Meljort)
north pole, en route from Moscow to California. Our boasted defence by three oceans, one on each side of us and one to the north, has been made less secure through inventions and developments of the past few years.
Canada has had to face a change. All right. Three years ago an increase was asked in the estimates for the Department of National Defence. A further increase was asked two years ago; there was one a year ago and this year another increase is requested from the people of Canada and we find this debate arising out of these facts. This is natural, because we have it on the best authority in the world that where expenditures of that kind are being made there will the critics seek to find trouble; for wherever the carcass is, there shall the vultures be gathered together.
In this department, which was beginning to rebuild outside mere routine organization, it was thought there might be the possibility of finding something out of place. No one thinks of looking for much trouble in the Post Office Department, because it has been operating for many years, handling the same matters on a large scale throughout the country. The routine is set and established. We had the case of the Department of National Defence following a new procedure when it began to take steps in connection with the purchase of aeroplanes, the appointing and training of the personnel for aircraft, the buying of artillery, machine guns and ammunition of different types. There is the possibility, despite the highest qualifications, of honest mistakes being made and of judgment, even when quite honest, not being very sound. That is where the public is more easily led to believe that there might be something wrong.
Not only in the article published in Maclean's magazine has suspicion of that kind been stirred up. Three years ago my hon. friends of the Cooperative Commonwealth Federation kept asking hon. members on this side of the house: "Against whom are you arming?"-indicating there was no need for arming. But the minister went on with his job. Shortly after he commenced we found opposition to his efforts-and of course the leader of the opposition of to-day is not responsible for that. But we heard his predecessor in the house uttering veiled charges, making insinuations, throwing around innuendoes, and using expressions which led some of my friends in the social credit party who had more recently come to parliament to rise in their places and ask when the charges made by the right hon. gentleman who then led the opposition would be dealt with.
As a matter of fact, he made no charges. He was too skilled a politician, lawyer and
parliamentarian to make any charges concerning which he did not have evidence. But he misled hon. members into thinking that he had charges up his sleeve. Suspicion grew, because it found food to feed on in the minds of two classes of people, namely those who could not expect a Grit government or the Liberal party to do anything rightly, and those who are so constituted that they could see no good which could come from spending money on the national defence of Canada, believing that we should trust to collective action for our defence. Those two types of individuals have been glad to hear aspersions cast upon the personnel of the department and upon the principle of spending money for enlarged defence. The Prime Minister (Mr. Mackenzie King) took the right course-every hon. member agrees that he did-in appointing a royal commission, so that the whole matter might be sifted out.
One of the other circumstances in connection with the charge was that the Bren gun, the contract concerning which was to be investigated, was a new weapon. People in Canada did not know about it. For five years it had been under trial. It had been improved and modified after invention and before it was sold to the British authorities. It was adopted by Great Britain, and it was later decided that Canada should acquire 7,000 of those guns. I need not say more about that, because it is agreed by the commissioner, and those qualified to judge, that the Bren gun is going to fill the bill. Before I take my seat I shall have a few words to say about the attempt made by the hon. member for Vancouver North (Mr. MacNeil) to question the assurance of the British government and war office on the value of the Bren gun. I am not very much surprised, because it is part and parcel of this same kind of balderdash, as the leader of the opposition calls it, that is talked about defence in Canada. But I do say it is going too far to say that this government has been deceived by the British government, which is in a much better position to judge than we are, and I say an attempt should not be made to stir up suspicion in the minds of the Canadian people in that connection.
Major Hahn came to Ottawa and saw a sample of the gun. He thought it would be a good thing for himself, or for any other man, to secure the right to make that gun in Canada. I am quite sure he also thought, in view of the very high testimonial given to him by hon. members directly opposite, that it would be, as well, a patriotic thing to do. I know there are some people who sneer at

Bren Gun-Mr. McLean (Meljort)
patriotism and who like Johnson describe it as the last refuge or the last resort of a scoundrel. But in Canada there are many patriotic industrialists, just as there are patriotic people in the primary industries. Major Hahn decided that he would equip himself with knowledge, and fit himself by investigation.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Malcolm McLean: Mr. Speaker,
before six o'clock I was pointing out how Major Hahn went to London and by means of an introduction to the war office secured permission to visit the Enfield factory and was there able to gather a certain amount of information. The leader of the opposition (Mr. Manion), just before he finished speaking, dealt with the necessity of having a pass for entering the Inglis plant at Toronto, but I think that is exactly in line with what happened to Major Hahn in England. He could not get into the Enfield plant without first securing an introduction to the war office, and if you or I, Mr. Speaker, were to seek to enter that plant we would rightfully be told to show our credentials before we could go through it. We in this country do take a little exception to a thing like that because we have not been accustomed to it, but anybody who knows what is going on in Europe must realize the necessity that exists there, and the increasing necessity there will be here, for these precautions. One point that is evident is that Major Hahn undoubtedly sold himself, as the phrase is, to the British authorities as a man who could be useful to them in securing a secondary supply of munitions in Canada.
In reply to the leader of the opposition, who said that it was months after the Canadian contract was signed before the British contract was signed, which is true, I would point out that according to the report:
It was on November 9, 1937, that the war office had informed the department by cable that the British government was then "ready to negotiate" for the purchase of five thousand Bren guns to be manufactured by the John Inglis Company subject to some substantial reduction in cost.
That agreement was made and is now being carried out in the new part of a plant that had been arranged for by the new Inglis

company long before there was any expectation that they would be manufacturing Bren guns.
I am going to deal very briefly with a few items in the report, some of which have already been discussed, and some of which have been emphasized, but others not.
On page 49 of the report we are told that there was a saving of something like $1,300,000 by the Canadian government going into a joint contract. It is true the contract is on a cost-plus basis, and that no one knows what it is going to cost us. No one in North America has ever yet made such a gun, and at the time of making the contract the British war office was not able to state its costs. The Enfield factory was just going into production. So no blame should be attached to the government at Ottawa for giving the contract on - a cost-plus basis.
Second, the commissioner points out:
The estimated profit to be made, according to evidence before the commission, will not exceed 7-76 per cent.
Many of my Conservative friends admit that this is not an unreasonble profit. The hon. member for Mount Royal (Mr. Walsh), speaking in the house the other night, said that it is a reasonable profit. He went on to say:
It is a small profit considering the work they intend to do.
As a matter of fact, unless these guns are manufactured with the greatest possible care and in a most efficient manner the company is liable to find itself with very severe losses under the terms of the contract.
The commissioner, among other things, says in his report, and this is worth while emphasizing to the house:
Everyone who it was thought might be able to throw' light on the subject of the inquiry gave testimony voluntarily. It was not necessary to issue a single subpoena to enforce the attendance of any witness. Your commissioner is satisfied that all available documents in any way relevant and material to the subject matter of the inquiry were presented to the commission.
The suitability of the said machine gun and the urgency of its purchase or production for the use of the defence forces of Canada was common ground with all parties represented before the commission.
I think it is extremely desirable that we should have that knowledge. Again he says:
The facts are all in evidence; and as said by government counsel in opening their argument, "So far as the facts are concerned, there are very few which are even in dispute."
I cannot myself recall at the moment any fact to which direct proof was adduced that is in dispute.

Bren Gun-Mr. McLean (Meljort)
To quote again from the commissioner's report:
Mr. Elliott said that the chairman (the deputy minister of national defence) pointed out that "his department had followed the practice of the British government where competition is not always obtainable, and they unhesitatingly go into non-competitive contracts in order to secure their requirements. In this particular case the British government had picked the firm to manufacture its guns."
And apparently that fact was not in dispute.
I am going to pass over the remarks of the commissioner in dealing with the fourth and last meeting of the interdepartmental committee which prepared the contract and finished its work just before three o'clock in the morning of March 17, 1938.	But
from November 9, 1937, the British war office put pressure on the department here to get the contract signed and to get it under way.
A good deal has been heard about pressure being applied by the Department of National Defence of Canada on the war office, but that pressure was in regard to one thing only, as I read in the report. The war office authorities were queried time and again whether or not they were going to place orders for guns in Canada, not urging them to place orders in Canada, but asking them whether they intended to do so or not, following negotiations with respect to the matter at an earlier date.
I quote again from page 49 of the report:
On the question whether tenders should have been called for, government counsel argued that there was ample evidence on which it could be found that a specialty of this kind (i.e., the Bren gun), a new art in Canada, is not a subject for the calling of tenders from manufacturers; that it has to be dealt with on a cost-plus basis, at least in the initial stages.
Evidence was offered by government counsel to that effect, and the commissioner in his wisdom thought it was not necessary to receive it. He says at page 50:
The more I think of it, the more I can see the almost endless scope of such a line of evidence-one manufacturer saying one thing, and another manufacturer saying something else, one manufacturer actuated by one set of considerations and another manufacturer actuated by different considerations. Where am I going to stop? This may land me in a hopeless and endless controversy.
What is obvious, of course, is this: that if the government has an article to be manufactured for which by its very nature it is not practicable to call for tenders and the policy of private manufacture is to be adopted, then at once the heaviest sort of responsibility falls upon those charged with the duty of selecting the individual, firm or corporation to manufacture the article.
Again he says:
There is	no	evidence that	any member	ofthe Senate	or	of the House	of Commons	of
Canada was admitted to any share or part of the contract, or to any benefits to arise therefrom.
The commissioner says that apart from the member for Trinity (Mr. Plaxton), and, of course, the Minister of National Defence:
There is	no	evidence that	any member	ofthe Senate	or	of the House	of Commons	of
Canada had any connection with or took any part in the discussions or negotiations leading up to the contract.
There is no evidence that any senator or member had any connection with or took any part in the affairs of the company or in the sale of shares or securities of the company.
I think it right to say that there is no evidence (nor is there in the evidence any ground for suspicion) that the minister or the deputy minister or any officer or official of the Department of National Defence was guilty of any act of corruption or anything in the nature of corruption.
The commissioner also says on page 35:
No charge of misconduct, however, were formulated against any particular person.
When you read the insinuations contained in the original charge, and then read the judge's statement that no charges of misconduct were formulated against any particular person; that there is no evidence, nor is there in the evidence any ground for suspicion that any member of parliament or senator or officer or official of the Department of National Defence was guilty of any act of corruption or anything in the nature of corruption, it makes it still more amazing, Mr. Speaker, that there should be such a fuss cooked up over this matter.
Time is passing rapidly and I must leave out many of the items with which I was going to deal.
As I understood the speech of the leader of the opposition to-day, it was-I could not write it down as fast as he read it-that the contract was unfair because it had been given to Major Hahn and not given to somebody else; that it placed other industrialists at a disadvantage in not getting a share of the contract; furthermore that Major Hahn or his company might make a profit of a million dollars through the transaction in addition to the real profits, and it was unfair that this should be done. I can quite understand the indignation of someone waking up and finding that another has got ahead of him. There is an old proverb that it is the early bird that catches the worm.



Bren Gun-Mr. McLean (Meljort)


Mr. HARRIS:: The profit.


Malcolm McLean: The hon. member for Danforth I think will agree with me that any man who has shown himself to be the kind of man my Conservative friends say Major Hahn is, with the courage, faith, initiative, energy and those other qualities that make a go-getting salesman, the type of man who has helped build up industry in Canada and who, long before the task comes along, prepares himself for a task that may have to be done, is the type of man who is entitled to a reward when the opportunity offers. I say further that if we had more of that enterprise in Canada to-day that we had forty, fifty and a hundred years ago we should be the better off for it. I notice that my Conservative friends-and I do not want to quote the statements of many of them because it would take too long-were very moderate indeed in the last few days in dealing with these matters regarding Major Hahn.
In connection with the sale of stock I want to quote a few words of the attorney general of Ontario. In a speech made by him on January 31, he said:
Shares representing more than 73 per cent of the authorized capital stock of the John Inglis Company, Toronto, are held in escrow in the Bank of Montreal and cannot be dealt with without consent of the Ontario securities commission, Attorney General Gordon Conant said to-day.
"Obviously these 184,000 shares are an ample guarantee that the control of the company will never pass to any foreign interests," he said....
Mr. Conant said Colonel George Drew, Ontario Conservative leader, was "very bold and extravagant" in his statements on his recent northern Ontario tour in connection with the Inglis company, holder of a federal contract for the manufacture of Bren machine guns.
The Inglis company treasury received approximately $246,000 for 41,000 shares, said Air. Conant. Only 4,000 of these shares were sold to the general public and none at more than $7.50 a share "which clearly indicates there has been no high pressure salesmanship."
Mr. Conant said the Inglis company has 150 workers and expects to engage 600 by fall, "thus making a substantial contribution to the solution of our unemployment problem."
Our Conservative friends have complained about the transactions and have charged that the Inglis company is organized for no other purpose than to make guns and munitions. They also said that neither Hahn nor Inglis had made Bren guns before. But neither had anyone else in Canada or on the American continent. I have here an advertisement showing that the Inglis company-
-are designers, engineers and manufacturers of machinery and equipment for mine, mill, power plant and factory.

Our skilled staff of experienced technicians is at your service. We invite particulars of your requirements.
So that, after all, the making of Bren guns is going to be part of their business and not by any means all of it.
I must hurry on as quickly as I can in order to do what I promised at the beginning of my address-to discuss the real issue as given to this house by another group of members of parliament. I find that two years ago, when we were discussing a small increase of defence, the leader of the Cooperative Commonwealth Federation party (Mr. Woods-worth), opposing those armaments, said this:
We are to repel attacks from without, we are told. I am sometimes accused of being an idealist, but to-night I should like for a few minutes to be very practical indeed. I would ask the minister and the house whether we expect any European country to attack us. Would Germany attack us? Would Italy attack us? I do not think for a moment that the great United States to the south of us, with its Monroe doctrine, would permit anything of the kind. You may say: Well, but you are simply depending upon another nation. I am not particularly concerned with what the implications of all that kind of thing may be, but I submit that if we are thinking about some foe from Europe we are putting up a hypothesis which has no basis in fact.
I shall now refer to a speech by the hon. member for Vancouver North (Mr. MacNeil), based on another article of the same George Drew, in Maclean's magazine, entitled "Our Bow-and-Arrow Army," wherein he spoke of the poor equipment of the Canadian militia, the hollow-chested youths; and how ill-fitting the uniform was, as if that was a matter of any importance. Then the hon. member quotes an article by Mr. Way ling under the heading, "We are too fat to fight." He was not referring to some of my hon. friends or myself.


Mr. HEAPS:: Or to the leader of the group!


Malcolm McLean: Hon. members
know the amazing basis of his story: that during the war we had no more than 300 units and they were all engaged in battle overseas or training to go over, while in peace time we had five or six to eight hundred Units, and it was because we had so many units we were too fat and we were not getting our value out of them. Of course in peace time, with units scattered all over Canada in order to appeal to local patriotism and local convenience, we are bound to have a fairly large number of units, but that does not mean that we are handicapped. Mr. Wayling, however, provided part of the inspiration which the hon. member for Vancouver North had at that time.	.

Bren Gun-Mr. McLean (Melfort)
Let me now quote what the leader of the Cooperative Commonwealth Federation said in 1936, as reported at page 3197 of Hansard:
We alone are not in position to hold off any and all comers. On the other hand ... I think we are secure in our position on this continent . . . We are a great deal safer without an army than with an army ... I oppose military expenditure.


Abraham Albert Heaps: What has that to do with the motion?


Malcolm McLean: I am leading up to the reason for the attack on the contract.


Abraham Albert Heaps: What has all this to do with the motion to refer the matter to the public accounts committee?


Malcolm McLean: A little later the hon. member for Rosetown-Biggar (Mr. Cold-well) stated:
I am in agreement with Mr. Woodsworth that Canada's best defence at the present time is its defencelessuess ... A country the size of Canada with its diverse peoples and small population is best defended if we rely on our weakness physically and our good will as a good world neighbour rather than attempt to ape the military powers of the European countries.
A little later on the hon. member for Wey-burn (Mr. Douglas) said, in answer to someone on this side or a member of the opposition, that the people of Rosetown-Biggar knew their member to be a confirmed pacifist. That is quite all right; it is a proper attitude for him to take if he sees fit. But at the same time these extracts indicate that there was much objection to any increased expenditure for armaments. The leader of the Cooperative Commonwealth Federation party, on February 19, 1937, said:
That is the position we take. I do not need to reiterate. I think it is simple nonsense to be spending as much as we are.
Mr. Mackenzie King:	If dangers increase,
hon. members who support this amendment will say: Oh, we never opposed the amount of money that the government was proposing to spend for defence.
Mr. Woodsworth:	You will see when we
come to it.
And that, mark you, was at a time when Canada was spending S1.41 per capita for defence; Sweden, of which we hear so much, $4.95; Switzerland, which has not had a war for a century, $7.56; the United Kingdom, $14.14; and France, $16.79.
The hon. member for Weyburn said, as reported at page 1059 of Hansard, February 19, 1937:
It-
The amendment.
-states two things clearly, first that this group is opposed to increased expenditure for military purposes.
71492-56J
The hon. member for Macleod (Mr. Han-sell), in taking his stand, namely the stand that he could not, at that time of crisis, oppose the estimates, drew from the hon. member for Weyburn the statement that it was only the increased estimates he was opposing, not the regular estimates. The hon. member for Macleod was not quite satisfied with the economic policies of the government, but he would not assume the responsibility of voting against that measure of increase.
On February 10 of this year the hon. member for Vancouver North said:
Nothing will do more to lower the morale of those who may be required to risk their lives in the defence of the country than the knowledge we now have that his department is in alliance with armament racketeers.
I went to the dictionary to find what a "racketeer" was, and I read as follows:
Racketeer. One who singly or in combination with others extorts money or advantages by threats of violence or of unlawful interference with business (variously defined in recent legislation in various states of the United States of America).
How, in view of the fact that the judge declared there was no evidence or suspicion of corruption in the evidence received before him, hon. members of this house can say these things, and many more I should like to quote if time permitted, passes my imagination! Every time we talk like that, it makes it more difficult to come to a proper understanding of what is really important. One of the worst speeches, from that standpoint, which has been made in this chamber for some time was that of the hon. member for Athabaska (Mr. Rowe). Speaking a little earlier in the session I said I regretted I could not compliment him upon having gone to a better place than he had been in, but I feared he had gone to a poorer one instead. My statement was verified by what happened, because he spoke as follows:
The Minister of National Defence expresses great confidence in the ability of the British government. At page 2389 of the evidence, in reply to a question from Mr. Hellmuth, the minister is reported as saying:
"I think too highly of the British to think that they would take anybody else's viewpoint but their own; they are pretty canny over there."
I agree with the minister, that they are indeed "canny"; for they are even more zealous than he appears to be in the interest of the armament manufacturers. May I tell the minister that over in Great Britain they go in for armament profiteering in a really big way.
Later on he quotes from a speech made by Gerald P. Nye in the United States senate in which that gentleman mentioned-
-that among the prominent shareholders of Vickers or allied concerns in 1932 were the

Bren Gun-Mr. McLean (Meljort)
Right Hon. Neville Chamberlain, then Chancellor of the Exchequer, Sir Austen Chamberlain, M.P., winner of the Nobel peace prize in 1925, Sir John Simon, Secretary of State for Foreign Affairs and a long list of politicians, clergy, and members of the aristocracy.
May I say that the British people have not yet reached the stage where they will condemn anyone for trying to do his part to make it possible for the country to defend itself in time of danger. In reply to my Conservative friends' contention that Major Hahn or the John Inglis Company should not have been given the contract because they had never manufactured arms before, I would point out that in an earlier day in the history of Canada if the government had taken that view, the Canadian Pacific railway would not have been built. If they had said that there was an objection to the fact that an ex-Hudson Bay Company trader and a bank manager were organizing the company, Canada would have suffered in consequence. If no progress is to be made except by those who are already engaged in a particular line of endeavour, then the future of the country will never be assured. The progress that this dominion has made has been as a result of the enterprise of pioneers and those who were prepared to undertake ventures other than those with which they were already familiar.
Let me say this in conclusion. On a certain day in September last year, as I listened in Saskatoon to the voice of the tyrant of Berlin as he addressed his people, stirring up their feelings against the democracies of the world, I could not help reflecting upon what had taken place in this house for two years and the opposition that had been brought to bear upon the government because, as the hon. member for Vancouver North said, the real issue was whether this armament should be made in a private or a government-owned factory. When I thought of such a reason, not a matter of importance, even though it is opposed to Marxian socialist ideas; when I thought of all that opposition that was thrown up in the path of the minister because a slight increase in armaments was asked for; when I thought of the helpless position of the people in Czechoslovakia after the defection of Austria, I was thankful that I had put no hindrance in the way of the minister but had given him what help I could in the house. Czechoslovakia would not have been in the situation in which she finds herself to-day had the line between her and Austria been defended.


Mr. MacINNIS:: Are we armed to take part in any European war?


Some hon. MEMBERS:: Sit down.


Malcolm McLean: It is well for
us-


Some hon. MEMBERS:: Order. Time.


Angus MacInnis: May I ask the hon.
member a question?


Walter Edward Foster: The hon. member for
Melfort (Mr. McLean) has exhausted his time.


Angus MacInnis: I should like to ask the hon. member if he thinks we are armed for a European war?


Malcolm McLean: It is well that we have not on our conscience-


Some hon. MEMBERS:: Order.


Some hon. MEMBERS:: Time.


Malcolm McLean: -any delay or obstruction in asking the Canadian people to prepare some defence for the country.


Ian Alistair Mackenzie: Mr. Speaker, I rise to a question of privilege. The leader of the opposition (Mr. Manion), speaking this afternoon in the course of the debate, used these words:
But, sir, I do say this, it is no wonder that the Vancouver Sun, ordinarily an outstanding Liberal organ, spoke of the brawling in parliament, and of the vulgar personalities cast across [DOT] the floor of the house by an hon. gentleman who comes from the city in which that paper is published. They added that there is still a strong suspicion of gross political patronage in the awarding of the contract, and they say that the contract wras improperly awarded, and that abuse of this kind does not hide the facts.
I should like my hon. friend to produce the date and the text of that article in the Vancouver Sun.


Robert James Manion: I cannot produce it at the moment because it is in my room. As a matter of fact, I did not go beyond quoting it in a rough way because we are not allowed to quote in extenso from newspaper articles.


Ian Alistair Mackenzie: Does my hon. friend still aver that this article appeared in the Vancouver Sun?


Robert James Manion: I think it did. I certainly have the paper in my room.


Ian Alistair Mackenzie: I have
the most reliable information from the editorial director of the Vancouver Sun that the article never appeared in that paper.


Robert James Manion: I assume I shall be permitted a little later to say a word in reply.

Bren Gun-Mr. Hartigan


Mr. D. J. HARTIGAN (Cape Breton South):: Before dealing with the question before the house I wish to refer to a few statements made by the leader of the opposition (Mr. Manion) this afternoon when he rose to give a resume and a criticism of the various speeches that have been made on this side of the house. He took occasion at the same time to eulogize all the speeches which had been made on the other side, and in that way he sought to cast the blame for all the differences of opinion that have arisen, and for all that has happened in the house during the debate, on those members who have spoken on this side. First of all, he announced to the house this afternoon-anyone who was here and heard him will verify what I say-that he was speaking for the various groups on the other side. I have very few notes, and I am not going to go back over old Hansards and thresh again the straw that has already been threshed over and over again, because this debate has degenerated into a play of words; but the hon. gentleman said he was speaking for the various groups on that side. He did not tell us whether that was of his own volition or whether he was appointed to act as spokesman for them.


Robert James Manion: I have never said I was speaking for any group. I said I was speaking for my own party.


David James Hartigan: I beg the hon. gentleman's pardon. I think it can be verified by reference to Hansard that he said he was speaking for the other groups.


Walter Edward Foster: The hon. member must take the word of the leader of the opposition.


David James Hartigan: It would not be the first time that statements were changed in the house, not only in speeches by members on this side of the house but in speeches by members on the other side.
Mr. Speaker, there is one serious matter with which I wish to deal before I proceed with my speech. The leader of the opposition this afternoon laboured the point and tried to create the impression that the disturbance, if you may call it so, or the talk that is going around, is about some bitter remark made on this side of the house by the Minister of National Defence (Mr. Mackenzie), and that the onus for that statement lies on this side. I take exception to that. The other night when the Minister of National Defence was speaking and the honoured name of Colonel J. L. Ralston was mentioned, the hon. member for Parkdale (Mr. Spence) sang out, "Another grafter." I ask you, Mr. Speaker; I ask any returned man in this house, whether there was a statement more calculated to upset the mental equilibrium of a returned soldier. Medically, we know that returned men are jealous of the good name of those who played their part in the world war, and I was amazed that the returned men in this house took so calmly the statement that came from the other side, "Another grafter." Who would be the others? They would be the Minister of National Defence, the leader of the opposition, I assume, the hon. member for Vancouver North (Mr. Mac-Neil) and every other returned man.


Mr. SPENCE:: You are a bad guesser.


David James Hartigan: Is that the attitude of the hon. member for Parkdale? I am loath to believe that that represents the sentiments of the people of his constituency or of the province of Ontario. I certainly know this, that Colonel Ralston needs no word of mine to defend him. If you asked any returned man from Nova Scotia to the Pacific, whether the statement, "another grafter," is correct, I venture to say it would be answered by a vociferous and indignant "no" that would roll from the Atlantic to the Pacific. I have been in places in the section from which I come where if that statement were made at a meeting it would have been followed by immediate action, the meeting would have broken up in a riot. That is why I say the returned men in this house deserve to be congratulated upon the equanimity and cool-headedness they displayed when that statement was made.
I wish now to deal briefly with just a few salient points of the contract, looking at it as I think the Canadian taxpayer will look at it. The sentiment in Nova Scotia is that, in the first place, once this contract was signed, there should never have been a royal commission to investigate it. Their sentiment is that, having a Minister of National Defence of the type we have, and a Pi i me Minister (Mr. Mackenzie King) whose motives are of such a high character that everyone feels that nothing deceptive would be tolerated by him, why was there any necessity to appoint a royal commission? And why the necessity of sending the contract to the public accounts committee? On careful analysis I think it will be agreed that a great deal of harm may come from sending this matter to the public accounts committee.
Bren Gun-Mr. Hartigan


Angus MacInnis: Quite likely.


David James Hartigan: The point I want to make concerning the contract is that the defence and the criticism, if you may call it either defence or criticism-because we have had as much defence as criticism coming from the opposite side-resolve themselves merely into a play on words; we get words, words, words all the time. For instance, during the hearing some lawyer, probably, to be impressive if not dramatic, took up the point of precision steel. We heard that term played on, it was grabbed with avidity by many hon. members and there was a play of words about precision steel. After all, precision steel is only a matter of calibration. Precision steel can be made at any plant in the country; we know that. The most ignorant person in the house, I suppose, if such there be, would know that. I am giving credit to hon. members of the opposition that they know it too, as well as we do. Then why this play of words over precision steel? Again they made much of the fact that the patentee of the Bren gun specified that it should not be made anywhere but in a government-owned factory. But they never told the people of this country what we find on page 27 of the report:
, . . that while the deputy minister and Major Hahn were in England in June 1937 the deputy minister set in motion steps with the war office to obtain permission from the patentee in Czechoslovakia that would enable the Canadian government, if it should so desire, to place a contract with a private manufacturer.
They sought to give the people the impression that this gun could not be manufactured except in a government factory.


Major James William Coldwell: May I ask who asked that permission?


David James Hartigan: Yes. It says that the deputy minister used his good offices; he and Major Hahn were in England at the time.


Major James William Coldwell: That is the deputy minister of national defence?


David James Hartigan: Certainly, the deputy
minister of national defence; who else should be more interested than he? We shall come back to that in a little while. To develop all the different angles of this contract and elucidate all the principles involved would take far more than forty minutes. One thing goes without saying, from the standpoint of the taxpayers of Canada-and after all it is the taxpayers of Canada who are concerned with this contract, not just a few industrialists, friends of some hon. members in this house;

they are not the type of people who are so much concerned. I am speaking from the point of view of the general taxpayer. I am not going to take time to read the articles of reference, but I think everyone will concede that the terms of reference were sufficiently broad that all facts and factors entering into the negotiation and signing of this contract could be brought out, and I call attention to the fact that during all that hearing there was never any specific charge brought forth or proven by Colonel Drew, the writer of the article in Maclean's magazine, who is charged with being the instigator of the hearing.
That hearing took up a great deal of time and cost the people of this country a good deal of money, and for the past ten days we have been arguing and debating this question, yet the opposition have not been able to point to any instance of corruption or graft. Certainly we had statements hurled across the floor of the house, but they were absolutely without foundation, none of them being of sufficient importance to warrant sending this question to the public accounts committee. On the other hand the Prime Minister is so desirous that it shall be subjected to the utmost scrutiny that he prefers to send it there. I cannot see what results will come from sending it to the public accounts committee except possible harm to the national defences of Canada, because what I fear is that the public accounts committee will be made a hotbed from which will be disseminated unpatriotic thoughts, and words and deeds derogatory to the good name of Canada. Canada desires to have the cooperation of the British government in establishing here a secondary source of supply for munitions; yet at its very inception we have the insidious work of those who are against it. Need I tell the Canadian people or hon. members that we have, we must have and we are led to believe we have, in this house, hon. members who are not unanimous as to how this countiy should be run, how the national defence of this country should be conducted, and whether it should be conducted in the interest of the British empire or not.
We have heard statements made in this house with regard to the heavy pressure that is brought to bear on hon. members. Certainly a great deal of political pressure must have been required to bring about such a revulsion of feeling on the part of the hon. member for Nanaimo (Mr. Taylor) for example, tha]t he had to withdraw from his party. If we recall the speech that hon. gentleman made in this house on February 3, 1938, I believe we should

Bren Gun-Mr. Harligan
view with alarm the proposal that this investigation should be continued before the public accounts committee. I assume there will be reports of the proceedings before that committee, and those reports will be sent all over the country. I think we should have some fear in regard to what may be brought out in the committee and the indiscreet manner in which they may be spread all over the country.
This afternoon the leader of the opposition (Mr. Manion) belaboured a point in connection with what he said was a peculiar provision of the contract, stipulating that the government, or some designated person, had to know who worked in the munition factory. If the hon. gentleman read the speech of the hon. member for Nanaimo last year he would realize why hedging clauses were necessary in regard to who went in and out of that place. And then the hon. gentleman must know that sabotage is rampant throughout England as well as here. It has happened on other occasions and it can happen again. But the hon. gentleman was more concerned with picturing in his microphotographie mind the possibility that this might be used for political purposes. Such is not the intention at all. The department must take some precautions.
I have already referred to page 27 of the report which deals with the possibility of placing a contract with a private manufacturer. Another point that strikes me is that on November 9, 1937, the cable announcing the British decision to manufacture in Canada designated the John Inglis Company. That cable was exhibit No. 182, and is referred to at page 47 of the Davis report. Then on February 9, 1938, Sir Harold Brown cabled General LaFleche as follows:
-draft of Bren contract with John Inglis Company now agreed in detail by war office.
There again the John Inglis Company was specified. When that cable came, the matter was still under discussion in Canada; the interdepartmental committee had been dealing with the contract from January S to March 17. On page 47 of the report I find this:
British government has approved negotiations as to second source supply of Bren guns in Canada-
That is an important statement.
-war office is now ready to negotiate for purchase of 5,000 Bren guns manufactured by John Inglis subject to some substantial reduction in cost.
There was some question in regard to cost, but they agreed to a second source of supply in Canada.


Major James William Coldwell: Who sent that cable?


David James Hartigan: That was from the war
office.


Major James William Coldwell: No.


David James Hartigan: Yes. Read the report.
I have almost finished dealing with this report, but there is one other section to which I should like to refer. It is wonderful to think how much has been drawn from this small book by various speakers in this house. They could open it at any place and make a speech on it. This is what the commissioner says, at page 50:
The more I think of it, the more I can see the almost endless scope of such a line of evidence-one manufacturer saying one thing, and another manufacturer saying something else, one manufacturer actuated by one set of considerations and another manufacturer actuated by different considerations. Where am I going to stop? This may land me in a hopeless and endless controversy.
The commissioner realized that he would get no unanimity of opinion at that inquiry. It was just like any court,- where you never get both sides to agree. With Colonel Drew and his crowd on one side-


Ian Alistair Mackenzie: Drew
did not want the manufacturers called; do not forget that. Drew was asked if he wanted them called and he said no. That is in the evidence.


David James Hartigan: There was no possibility of any unanimity of opinion even among those who were called, and no one saw that better than the commissioner who was investigating the whole question.
The main point of the whole report is the finding, which has been read a dozen times. I am going to quote only one or two words from it, in order to keep the record straight in regard to what I was saying about the concern of the taxpayers of this country. It is wonderful that there was a finding at all. How many commissions, among all those appointed during the past fifty or sixty years, have made findings as complete as we have in this report? If you go back over them you will see that there have been very few. The commissioner said:
The evidence relating to the activities of Mr. Hugh Plaxton prior to the making of the contract has already been set out or referred to in this report, and with that exception (and excepting of course the minister presiding over the Department of National Defence) there is no evidence that any member of the senate or of the House of Commons of Canada had any connection with or took any part in the discussions or negotiations leading up to the contract.
There is no evidence that any senator or member had any connection with or took any part in the affairs of the company or in the sale of shares or securities of the company.
8S0
Bren Gun-Mr. Hartigan

I think it right to say that there is no evidence (nor is there in the evidence any ground for suspicion) that the minister or the deputy minister or any officer or official of the Department of National Defence was guilty of any act of corruption or anything in the nature of corruption.
That is all I have to say about that report. I think that covers the main points of what the people of Canada are thinking- with one exception, and that exception is this:	What is the cost to the Canadian
people? That would be a pertinent question for the taxpayers to ask. That is probably what most people have in their minds. They are not so much concerned with who will get the contract, whether it consists of a few hon. members on the other side of the house and their industrialist friends, or whether it is given to someone on the Pacific coast or on the Atlantic coast.
I. for one, come from the Atlantic coast, where we have great steel works. I am interested in seeing secondary supplies of munitions manufactured in Canada. As they are manufactured in greater quantities those men in Canada who are acquainted with the manufacturing processes will come in for their share of the steel work, and will supply their share of the steel used in manufacture of munitions. Everyone who has the interests of the steel workers of Canada at heart must realize that fact.
I think it was Mussolini who said that he did not fear the democracies because the democracies are dumb. I was wondering whether he was afflicted with the same picture disease which has been manifested so often, and whether in that mood he had visualized oppositions in this House of Commons, and did not fear them. I think one of the first questions which should be asked, the answer to which the people of Canada have a right, is this: On a comparative basis what did the Canadian government pay for Bren guns already in the country? That would be a pertinent question.


Ian Alistair Mackenzie: If my memory serves me correctly, it was about SI ,000 "or $1,200.


Mr HARTIGAN:: I investigated that
matter-


Ian Alistair Mackenzie: Each.


David James Hartigan: -in the minister's department, and I found out in that department that the cost of the first two guns was SI ,500 each.


An hon. MEMBER:: From the war office.


David James Hartigan: The next ten guns cost SI,100 each.


Ian Alistair Mackenzie: That is
correct.


David James Hartigan: Twenty-one guns arrived only a few days ago, and they will cost in the vicinity of $1,000 each.


Ian Alistair Mackenzie: That is correct.


David James Hartigan: Has the opposition
asked for a comparative statement of prices? On the figures given by the hon. member for Parry Sound (Mr. Slaght) the other evening, one can find, through an arithmetical calculation, that the government might anticipate that the guns manufactured in Canada in conjunction with the British order would cost in the vicinity of $400 each. There is quite a difference there.
One hon. member opposite, from the Conservative benches, referred to the boots and shoes which were worn in the last war. One has a fair indication of the chaotic state of brain of hon. members opposite when they throw up anything which happened in the last war, at a time when they were directing the affairs of the nation. They should think of the shell game, and what happened in connection with that nefarious contract at the time of the last war. Worse than that, they should think of the deal made for the Ross rifle, which has left such a stench and has had such an effect on the olfactory sense of the Canadian people that the odour still remains.
Those are matters of which they should think when they throw taunts across the floor of the house, suggesting things of which we have been guilty, and making the suggestion that we are guilty of everything that has happened. The Liberal government, as stated by the responsible minister and by the Prime Minister, has taken a stand that it will not manufacture Bren guns down to a price, but rather that it will manufacture up to a standard. That is the meaning the general public can take out of the government's attitude. That is why the country will have confidence that the guns in process of manufacture will measure up to a standard. That will be done because, if for no other reason, by means of a complementary contract the British government has become a party.
There are those who take the view that because certain persons interested in the manufacture would not have a chance to tender or to bid on supplying a secondary supply of ammunition, we must perforce kill the contract at its inception. Even the hon. member for Mount Roj'al (Mr. Walsh)-and I give him credit for it-discussed the matter a few days ago and agreed there should be private contract. I agreed with him. The hon.

Bren Gun-Mr. Hartigan
member always makes an interesting and scholarly speech. That man who said in all fairness, "Yes, it should be let to private firms,'' was exercising good judgment.
Here we have some advocating private tender and others advocating government manufacture of munitions. Do they think we have reached a modern utopia in Canada, remembering the experience in the past in connection with great utilities, whereby under governmental operation we could operate at a price less than 7-7 per cent over cost? I do not think there is an hon. member opposite who, speaking fairly and honestly, will claim that with government operation, considering all that would have to be done in the reestablishment of new plants, the cost of those guns could be kept down. As was insinuated this afternoon by the leader of the opposition, maybe someone would tender for 5-2 per cent over cost. That would be bringing it down to a price.
I think there is not a Canadian who will deny that 7-7 per cent over cost is a reasonable and logical allowance for profit, when profits are limited as to amount. When the opposition began its criticism of the Bren gun contract I think the imaginative faculty of the leader of the opposition was running away with him, and he visualized the Bren gun contract as something leading him into the Elysian fields, and probably on to the treasury benches. I say to the leader of the opposition in all fairness, and as kindly as possible, that lie should view the matter from a different angle; that he should reorientate himself and visualize the Bren gun contract going to a committee of the house, not as something which would lead him to the treasury benches. He should visualize it as a two-edged sword, a broken reed or a perfect boomerang. Those are the ways I would advise him to visualize it. I say that to him for this, if for no other reason, that not a Liberal on this side of the house need be ashamed-


An hon. MEMBER:: I believe that.


David James Hartigan: Well, we cannot very well depend upon the hon. member's belief, because it runs to pictures. There is not a Liberal member on this side of the house but can and will on the platform in any part of the country, east, west, north or south, defend the Bren gun contract. They will defend it in the interests of the Canadian taxpayer, if for no other reason than that it is predicated upon the fact that the British war office has taken part in it. Surely hon. members do not mean to say that those people can be turned around by a minister from one of the colonies or from any of the
departments in any of the component parts of the British commonwealth of nations. I do not think the imaginations of hon. members would run that far.
But I do say that if we predicate the value of the contract, as every red-blooded Canadian will, upon the fact that it has stood the test of the British war office, surely there must be some virtue in it. We are far away from the days when the Conservative party had other leaders. I cannot visualize the Right Hon. R. B. Bennett, for example, rising in his place here and saying that he would link forces with the subversive group in this house to take action against the British government.


Major James William Coldwell: Mr. Speaker, I rise to a point of order. I want to know what the hon. gentleman means when he says that the Conservatives are linking up with a subversive group in this house.


David James Hartigan: This afternoon-


Walter Edward Foster: Order. I would ask the hon. member to withdraw the words, " subversive group."


David James Hartigan: Yes, Mr. Speaker, I will withdraw them on the demand of the chair. But I say that so long as that speech of the hon. member for Nanaimo (Mr. Taylor) of February 3, 1938, remains and is available on the pages of Hansard, we are entitled to believe that there are subversive influences in this house.


Some hon. MEMBERS:: Order.


David James Hartigan: I did not say where.


Major James William Coldwell: On a question of
privilege, Mr. Speaker, as a member of this house-and it is a question affecting the privileges of this parliament; the hon. member says that there are subversive influences in this house. I submit that that statement is unparliamentary and should be withdrawn.


Malcolm McLean: On the point of order, Mr. Speaker, I suggest that perhaps the hon. member for Cape Breton South (Mr. Hartigan) was referring to racketeers with whom we were told this government was in alliance.


Walter Edward Foster: I would ask the hon. member for Cape Breton South to resume his seat please. I do not think the hon. member should use the expression "subversive" as applied to any group or any member of this house.


Some hon. MEMBERS:: Withdraw.
Bren Gun-Mr. Hartigan


David James Hartigan: I have already said that I withdraw it.


Walter Edward Foster: The expression "subversive" as applied to members of the house or to any group in the house should not be used by any member.


David James Hartigan: All right, Mr. Speaker, I have already withdrawn it.
I was going on to say-


Walter Edward Foster: Order. The hon. member has exhausted his time to speak.


Robert James Manion: Mr. Speaker, the hon. Minister of National Defence (Mr. Mackenzie) drew to my attention a few moments ago a telegram which I understood him to say intimated that the quotations I gave this afternoon were not from the Vancouver Sun. Is that right?


Ian Alistair Mackenzie: Yes.


Robert James Manion: I have the clippings here, and while there is no name on them I thought they were from the Vancouver Sun because I was informed by a note from a friend of mine that they were. On the side is written, "Not bad from a Grit paper." I will tell the house what I quoted. I said the heading of the article was, "Brawling in Parliament," and I quoted a word or two saying that there were vulgar personalities used by the minister, and gross political patronage. That is my complete recollection of what I quoted.


Ian Alistair Mackenzie: Does my hon. friend still say that that is from the Vancouver Sun?


Robert James Manion: The minister says that he has received a telegram from the editor of the Vancouver Sun saying that these quotations are not from that newspaper. I cannot contradict that, and I accept the minister's word without question. The only thing I can do, after haying cited the quotations-and there is a good deal worse in the clippings than I have mentioned,-is to adopt them as my own, and so I adopt them as my own.


Ian Alistair Mackenzie: I rise to a point of order, Mr. Speaker, affecting the privileges of this house. Any hon. member referring to any quotation in this house is required by the rules of parliament to produce to the house proof of the authenticity of his quotations, and I ask my hon. friend now to produce to this house evidence of the authenticity of the statements which he quoted in the debate this afternoon.


Robert James Manion: I have produced the clippings. I have them here, and the minister 
can look at them. These editorials were sent to me and it was stated to me that they were from the Vancouver Sun. I accept the statement in the minister's telegram from the editor of the Vancouver Sun that they are not from his paper.


Ian Alistair Mackenzie: Where are they from?


Robert James Manion: They are from Vancouver, I understand. I have already stated that I quoted them in good faith as supposedly coming from the Vancouver Sun. The minister says that he has received a telegram from the Vancouver Sun denying that they are from that paper, and I accept that. And to exonerate all the newspapers I accept responsibility myself for all these statements. I do not know what more I could do.


Ian Alistair Mackenzie: I accept immediately my hon. friend's statement that he quoted the editorials in good faith, but on a point of order I submit that under the rules of this house when an hon. member purports to read editorial comment from any journal he should immediately submit proof of its authenticity to the house or have the quotations expunged from the records of Hansard.


Robert James Manion: I did not read anything from the papers. I quoted the headlines verbatim. I did not read statements from the press at all.


Ian Alistair Mackenzie: On the point of order, Mr. Speaker, the record of Hansard, while not yet official, shows that my hon. friend said that he quoted this comment as from the Vancouver Sun, and I submit that it should be expunged from Hansard because the quotation was improperly and inaccurately made to this house. I ask for your ruling, sir.


Walter Edward Foster: Does the hon. leader of the opposition state where the quotations were taken from ?


Robert James Manion: I have said they come from a friend of mine. I do not choose to give his name. I have them here in my hand now, and I quoted them correctly.


Walter Edward Foster: What paper are they from?


Robert James Manion: I do not know. I have them here and the minister can read them. I adopted the statements as my own.


Ian Alistair Mackenzie: That is enough. Let it go.

Bren Gun-Division
The house divided on the amendment (Mr. Stevens) which was negatived on the following division:
++YEAS
Messrs:
Anderson
Baker
Barber
Black, (Mrs.) (Yukon)
Brooks
Casselman
Church
Esling
Graydon
Harris
Homuth
Hyndman
Lennard
Lockhart
McGregor
MacNicol
Manion
Perley
Ross (St. Paul's)
Senn
Spence
Stewart
Thompson
Tustin
Wermenlinger White-26.
++NAYS
Messrs:
Ahearn
Beaubien
Bertrand (Prescott) Black (Chateauguay-Huntingdon) Blackmore Blair
Blanchette
Bothwell
Bouchard
Boulanger
Bradette
Brunelle
Cardin
Cleaver
Cochrane
Coldwell
Cotd
Crerar
Damude
Davidson
Deaehman
Denis
Deslauriers
Donnelly
Douglas (Queens)
Douglas (Weyburn)
Dubuc
Dupuis
Dussault
Elliott (Kindersley)
Euler
Evans
Fafard
Fair
Farquhar
Ferguson
Ferland
Ferron
Fiset (Sir Eugene) Fleming Fontaine Fournier (Hull) Fournier (Maison-neuve-Rosemount) Franeoeur Furniss Gardiner Gariepy Gladstone Glen Golding
Grant
Hamilton
Hansell
Hanson
Hartigan
Hayhurst
Heaps
Howden
Hurtubise
Ilsley
Isnor
Jaques
Jean
Johnston (Bow River) Johnston __ (Lake Centre) Kennedy King, Mackenzie Kirk Kuhl
Landeryou
Lapointe (Matapedia-Matane)
Lapointe
(Quebec East) Leader Leduc McAvity McCallum McCann McCulloch McDonald (Pontiac) McDonald (Souris) McGeer Maclnnis McIntosh McKenzie
(Lambton-Kent) MacKenzie (Neepawa) Mackenzie
(Vancouver Centre) MacKinnon
(Edmonton West) McKinnon (Kenora-Rainy River)
McLarty
MacLean (Cape Breton North-Victoria) McLean (Melfort) MacLean (Prince) McLean (SimcoeEast) MacLennan
MacMillan	Quelch
MacNeil	Reid
McNevin	Rennie
(Victoria, Ont.)	Rheaume
McNiven	Rickard
(Regina City)	Rinfret
Macphail, (Miss)	Robichaud
McPhee	Rogers
Mallette	Ross
Marshall	(Middlesex East)
Matthews	Ross (Moose Jaw)
Maybank	Rowe (Athabaska)
May hew	St-Pere
Michaud	Sanderson
Mills	Sylvestre
Mulock	Telford
Mutch	Thorson
Needham	Tomlinson
Neill	Tremblay
O'Neill	Turgeon
Parent (Terrebonne)	Turner
Patterson	Veniot
Pelletier	Ward
Pinard	Warren
Poole	Weir
Pottier	Winkler
Pouliot	Wood
Power	Woodsworth
Purdy	Young-149.

Messrs:
(The list of pairs is furnished by the chief whips.)
Dunning Howe Elliott
(Middlesex West)
Gray Fraser Macdonald
(Brantford City)
Tucker Slaght
Taylor (Norfolk)
Howard
Lacroix (Beauce)


Walter Edward Foster: main motion.


Charles Hazlitt Cahan: This motion is for the reference to the public accounts committee of the agreement between the government and the new John Inglis Company for the manufacture of Bren guns.
Upon due consideration of the relevant facts, it seems to me that no public interest is likely to be served by such a reference, and indeed such a reference in my opinion will only serve to obscure the real issue which is now before the government and the house.
The public accounts committee is a standing committee of this house, and all relevant expenditures may be fully investigated by that committee without such reference being
Stevens
Stirling
Massey
Lawson
Heon
Walsh
Marsh
Brown
Green
Clarke (Rosedale)
Rowe
(Dufferin-Simcoe)
The question is on the
Bren Gun-Mr. Cahan

made. But, as I shall attempt to show, the real issue is not an issue that can be considered by the standing committee on public accounts. Moreover, such a reference will preclude discussion in this chamber of far more serious issues which arise out of the report of Mr. Justice Davis, the commissioner, who was appointed to inquire fully "into all matters relating to" the Bren gun contract and the steps taken to protect the public interest, and to report upon the same.
The commissioner has reported that all available documents in any way relevant and material to the subject matter of the inquiry were presented to the commission, and he has reported several thousand pages of oral evidence and of argument of counsel. I have already reviewed in an earlier debate the precautions taken by the Prime Minister (Mr. Mackenzie King) to safeguard the public interest; his appointment of a special committee of which his own deputy, Doctor Skelton, was chairman, and the report of that committee that the problem appeared essentially to be one of administration; that is whether under the present Minister of National Defence (Mr. Mackenzie) an adequate and competent administration was being or was likely to be obtained. The report of that special committee was undoubtedly made known by the Prime Minister to his colleagues in council and more or less thoroughly discussed. Thereupon the government, sitting in council, by order in council P.C. 439 appointed an interdepartmental committee to formulate and advise upon the principles and safeguards, whether general or specific, which should be observed to protect the public interest, and to communicate the same to the Department of National Defence and to any other department concerned. Thus far the Prime Minister and his colleagues appear to have taken reasonable precautions.
The commissioner indicates very fully in his report that that committee earnestly desired to secure competitive bids, and made persistent demands to that effect. The commissioner reports, on page 41, that:
The Minister of National Defence did say that he was informed in a general way, not in great_ detail, of the progress of the discussions in the committee by the deputy minister . . .
It would reasonably have been expected that the Minister of National Defence would have informed himself from day to day of the proceedings of that interdepartmental committee, before which his methods of administration were clearly on trial. But he gave no concern to its proceedings although he had

himself sufficient information to put him upon inquiry. He appears to have been utterly indifferent. The commissioner also reports, at page 42, that:
The minister says he never went over the proposals of Major Hahn in detail.
The minister also states, as reported at page 8 of the commissioner's report, that he never attempted in any method or in any way to comply with the demand of the interdepartmental committee for competitive bids from other well known companies, with skilled labour and skilled mechanics, who had been working in precision steel. He merely answers, without making any personal inquiry whatever, " I do not think it was practical." Again he declared, in answer to a question:
Q. There was never the slightest effort, was there, to interest or invite any of those firms to tender or to make any offer to manufacture the Bren gun?
A. No, I do not think there was. [DOT]
At page 41 the commissioner reports that:
There is not a suggestion that the members of the government ever heard of these difficulties which confronted the committee or of the attitude that was taken by members of it to the proposed contract.
That is, the commissioner expressly states that there is not a suggestion in any of the evidence adduced that the other members of the government ever heard of the difficulties before the interdepartmental committee and the demands of that committee with respect to the placing of these contracts. Certainly in view of all the circumstances leading to the appointment of that committee it was the bounden duty of the Minister of National Defence not only to keep himself fully informed but to have kept the Prime Minister and his colleagues fully informed of the views of that committee. But that duty he entirely ignored, and all the precautions and salutary safeguards taken by the Prime Minister were completely disregarded by the Minister of National Defence, apparently without the knowledge of the Prime Minister or of his colleagues. It is this defiant dereliction of duty on the part of the Minister of National Defence that Mr. Justice Davis sought to bring clearly before the government and before parliament in the report which he has submitted. Therefore the commissioner reports, page 35:
The facts are all in evidence . . .
So far as the facts are concerned, there are very few which are even in dispute.
... It will be for those charged with the responsibility of dealing with the facts, i.e. the government and parliament, to examine and study them and to take such action, if any, thereon as they may see fit.

Bren Gun-Mr. Cahan
That I conceive to be the primary duty which confronts the Prime Minister and the members of his government.
Again at page 49 the commissioner reports:
... I am unable to pass upon the substance as distinct from the form of the contract . . . but what is more important after all is whether the procedure adopted in making the contract was that best calculated to protect the public interest and to secure the confidence of the people of Canada that there would be no improper profiteering in the private manufacture of wrar armaments for the defence of the country.
That is a question upon which the government and parliament, in the light of the evidence brought before the commission, must pass.
So says the commissioner selected by the government and appointed for the purpose of making this inquiry and report. In fact the Prime Minister had previously declared in the House of Commons on April 2, 1937, as reported in Hansard, page 2697, that:
At the present time, in a time of peace, the government is proceeding on the theory of permitting competition with reasonable remuneration. the work to be subject to inspection and audit.
That declaration of government policy is in accord with the report of the special committee appointed by the Prime Minister to consider these matters, that "The problem appeal's to be essentially an administrative one." The interdepartmental committee were therefore fully in accord with the policy announced by the Prime Minister. That policy the Minister of National Defence deliberately disregarded, without ever consulting the Prime Minister and his colleagues in the government. Such action on the part of the Minister of National Defence calls for summary action on the part of the Prime Minister, who should call for the minister's resignation forthwith, or else the Prime Minister, by condoning the minister's conduct, must assume full responsibility before parliament and before the electors of this country.
Mr. Justice Davis on page 50 of his report says:
Your commissioner took the position that-
It is at least a plausible view that the question whether tenders should be called for in such a case is a matter of administrative policy, upon which competent opinion is, or may well be, divided, and one therefore peculiarly for the government and parliament.
That was a matter of public policy, therefore, respecting which the Prime Minister, I believe in good faith, had already made the solemn declaration to parliament which I have already quoted, and in the carrying out of which he would have certainly had my
full support and, I am confident, the support of an overwhelming majority in parliament. But at page 50 the commissioner adds that if- -the policy of private manufacture is to be adopted, then at once the heaviest sort of responsibility falls upon those charged with the duty of selecting the individual, firm or corporation to manufacture the article. The question is: Were proper and sufficient steps taken in this case to discharge that responsibility? Upon the whole evidence, that is a question for the government and parliament to pass upon.
And in summarizing his views the commissioner continues:
What is plain to me at the end of this long inquiry is this: that if the policy of private manufacture of war munitions and armaments is to be continued in this country (a question of administrative policy for the department and parliament to determine), once the requirements are determined by the Department of National Defence the negotiations leading up to and the making of contracts between the government and private manufacturers either for the purchase or production of such munitions or armaments should be put into the hands of an expert advisory group of competent business men-
Then he adds:
These persons should constitute a board (which might be known as the defence purchasing board) and be made directly accountable to the Prime Minister or to the Minister of Finance.
And the commissioner proceeds:
It is no reflection upon the technical skill and knowledge of the military officers and officials of the Department of National Defence to say this for it is a matter requiring quite a different training and knowledge and quite a different experience from military training and experience.
The appointment of such a board is a matter to be discussed at the proper time. A resolution is already on the order paper with respect to a bill to be introduced, and upon that resolution or upon the bill no doubt ample opportunity will be afforded to discuss this matter. I may say, however, that the appointment of every such board is, in some measure, a blow at responsible, respresenta-tive government and a step in the direction of the adoption of fascist administration and government in this country. But it is clear that the commissioner, having heard and reflected upon all the evidence which was adduced by counsel, has definitely concluded that the present Minister of National Defence is not only incapable but is disqualified from administering his department even with the assistance of such a board. Therefore the minister advises that such a board, if appointed, should report to the Prime Minister or to the Minister of Finance.
8S6
Bren Gun-Mr. Cahan

I urgently protest against the adoption of any such makeshift policy as that suggested. The Prime Minister's duties, as we all know, are not only numerous but ver3' onerous indeed. The Minister of Finance is already overburdened. The real remedy is for the Prime Minister to ask the Minister of National Defence to resign forthwith and to appoint in his stead a minister who is competent to administer the affairs of that department. As I have already stated, the Minister of National Defence has proved inattentive and neglectful of his primary duties, and, on the whole, has shown himself incompetent for the efficient administration of the most important work of his ministerial office. The next step is to fill the vacancy by the appointment of a new minister who will not persistently defy the Prime Minister of the country and his colleagues in the government, but who, in consultation with them, will carry into effect the policies which they have fully considered, adopted and confirmed.
That, it seems to me, is the primary issue which the commissioner, Mr. Justice Davis, has presented to the government, in the first place, and then, if the government fails of action, to the parliament of this country. The Prime Minister will not satisfy public opinion, and I cannot believe that he will full satisfy his colleagues, until he has effectively dealt with a recalcitrant, defiant and incompetent minister. If that minister is really sincere in the professions and protestations which he made to this house on Thursday evening last; if he really, sincerely desires, despite his manifest ineptitude and inefficiency, that proper measures may now be taken, quoting his own words-
-to provide such measures of national defence and security as will preserve the welfare and well being of our Canadian people-
-then he should forthwith place his resignation in the hands of the Prime Minister. Possibly now a less onerous post may be found for him by the Prime Minister. I certainly do not wish him any ill personally.
Some lion. MEMBERS: Oh, oh.


Charles Hazlitt Cahan: Well, laugh. I have seen
something of life; I have had under my administration many thousands of men. I have found in the best of them frailties and I have found in the worst of them many good qualities. I do not say that the present Minister of National Defence may not have some subordinate place in the administration of the affairs of this country, but he certainly has not lived up to the duties and responsibilities of his present office. If he

is retained in that office it will undoubtedly result in this, that the people of Canada will no longer have confidence in the administration of the Department of National Defence.
The Prime Minister and his colleagues, having access to more definite and more reliable information than is available to other members of this house, have declared during recent years that for the adequate defence of Canada large expenditures upon armaments are necessary. We have voted the moneys so far requested. We are now about to be asked for additional appropriations, to a veiy large amount. In the existing conditions of increasing national debt and ever-increasing and now almost intolerable burden of taxation, these additional expenditures upon armaments and munitions are only justified by the prospective imminence of war and by the necessity of our unanimous action in making adequate preparations for the defence and security of Canada. No unity in Canada is possible, and no adequate preparations can be made, unless the government as a whole and the Department of National Defence in particular have the complete confidence of the people of our country.
Any confidence that did formerly exist has been dissipated by the report of Mr. Justice Davis, the commissioner selected by the government, by his impeachment of the conduct of the minister as disclosed in that report, and, further, I may say, by the minister's vituperative address of Thursday evening last, portions of which have been deemed unfit for publication in Hansard of the Commons.
The people of Canada will not be united in making adequate preparations for defence, much less in entering upon a war of defence, while the administration of the Department of Defence is in charge of the present minister. The issue which Mr. Justice Davis has presented is now clear, and the responsibility of dealing with that issue is placed, under our constitutional form of government, primarily upon the Prime Minister. Our people are looking to him, and many are fervently praying that he may now have courage adequate to his responsibility. If he fails to measure up to his responsibilities, then it is that the parliament and people of Canada should take action, as recommended by Mr. Justice Davis.


Gerald Grattan McGeer: Mr. Speaker, the course of this debate has taken a rather strange line of procedure, finally to culminate in this extraordinary appeal to parliament to judge the outcome of proceedings which are to be referred or are now being referred to be dealt with by the public accounts committee. Granted everything that

Bren Gun-Mr. McGeer
has been said on the other side of the house, what possible basis can there be for this judgment before the committee's findings are made to parliament?
I want to draw the attention of hon. members to some of the dangers of responding too readily to that type of partisan appeal. On many occasions we have heard references to the report. To-night special reference was made to the report at page 42. I should like to quote the finding of the commissioner with regard to the minister's attitude. That finding is taken from page 2334 of the evidence, and is as follows:
The minister said he never went over the proposals of Major Hahn in detail.
"I had infinite confidence in my technical advisers and also in the final jurisdiction and supervision of the interdepartmental committee which I was largely instrumental in creating myself."
Let me say that this is the conduct of the minister which is being condemned to-night, and the attitude upon which the hon. member for St. Lawrence-St. George (Mr. Cahan) asks the Prime Minister (Mr. Mackenzie King) to dismiss the Minister of National Defence (Mr. Mackenzie).
Let me put this to hon. members: Here is a highly technical proposal. It is not a matter upon which the minister is supposed to be able to form opinions. The question was: Could a patented gun of a highly technical nature be more advantageously produced by the selection of a contractor and the cooperation of the government with that contractor, than by the old system of public tender? Here was the one exception to the general line of contractual relationships that even the Department of National Defence might enter into which required, not the dictatorial assertion of the authority of the minister, but the untrammeled action of the technical officers of the department, along with the supervision of the interdepartmental committee which was there, not to be told by the minister what to do, but to say whether or not what the technical officers were doing was worthy of their support.
There are some other statements which have been made which are just as far away from reason as this extraordinary demand. Let me put this to hon. members: Supposing the minister had gone in and had dictated the policy of the interdepartmental committee; supposing he had dictated upon technical matters the policy of technical officers-that, I submit, would have been political interference that this whole procedure of interdepartmental committee and technical officer advice was designed to avoid. It was the kind
of conduct which, had it been perpetrated by the minister, would have warranted the very action for which my hon. friends are now asking.
I wish to place before the house some facts which I think are pertinent to this particular issue. The first of these are contained in the letter dated October 29, 1936, of the Minister of National Defence to the Prime Minister, which states:
My dear Prime Minister:
May I suggest that at your earliest convenience we have a short meeting of the defence committee. One of the questions I should like a decision on is in regard to the following:	What should our policy be with
reference to the supply of munitions or small arms. The chief of the general staff believes that Canada should be self-sustaining, and that we should proceed with the work at Valeartier. The completion of the ammunition building there will entail an additional $5,500,000. Some members take the view that this money could be better spent in cooperation with private firms. The chief of the general staff believes that our policy should be to have a government factory both in regard to munitions and also in regard to small arms, but to cooperate with industry as far as possible.
It will take from two and a half to three years to complete the ammunition building at \ alcartier. In the meantime, of course, the government could give orders to private firms on the definite understanding that in case of any emergency arising these firms would be taken over and controlled by the government during the time of the emergency.
That letter clearly placed before the government the disagreement in the Department of National Defence as to public ownership of arsenals, as to the practical possibility of public ownership with the funds which were available, and the views of those who wanted to use the available funds to get the best possible results. It was then, I understand, that the Skelton committee came into being. That committee recommended against the development of public ownership of arsenals in Canada.
But there is a document exhibit No. 46, before the commissioner, under date of March 5, 1937, in which the Minister of National Defence secures a policy which is incorporated in an order in council of that date which I should like to read into the record:
Certified to be a true copy. The committee of the privy council have had before them a report, dated March 2, 1937, from the Minister of National Defence stating that an interdepartmental committee formed under the instructions of the right hon. the Prime Minister to consider certain questions pertaining to the control of profits on government armament contracts, has in its report suggested that there be instituted a standing interdepartmental financial committee to assist the officials charged with the placing of contracts under the defence program, and that such a committee "might
Bren Gun-Mr. McGeer

study and classify the requirements of the defence program from the financial point of view, and formulate or advise upon the financial principles or safeguards to be observed in placing contracts of various types, and as to rules of procedure."
That it was also suggested that this committee "might be available for consultation upon the financial aspects of any unusual specific cases or conditions arising from time to time, and that it would be limited to this function of assisting in the prevention of undue profits, that is to say it would not be concerned with other aspects of the defence program."
The minister-
That is the Minister of National Defence: -is of the opinion that a committee whose functions and duties would be generally as set out in the suggestion aforesaid would be in the public interest, and therefore, recommends :
X. That there be formed a committee to be known as the interdepartmental committee on the control of profits on government armament contracts, said committee to consist of one representative from the Departments of Trade and Commerce, Labour, National Revenue (income tax), Finance, and the deputy minister of national defence and one official or officer of the Department of National Defence, with the deputy minister of national defence as chairman of said committee.
2.	That the duties of this committee shall be generally to study and classify from the financial point of view the various requirements which the government's defence program involves, and when it is considered by the department concerned that effective competitive tendering cannot be secured in regard to any of its requirements, to formulate or advise upon such principles and safeguards, whether of a general or specific nature, which in this connection the committee considers should be observed, and to communicate to all departments concerned such information in this respect as the committee considers should be in their possession.
3.	That such departments of the government as have occasion to make purchases of armament and/or mobilization stores, and/or to arrange for services directly or indirectly connected therewith, be directed to refer to said committee all questions relating to scales of prices, quotations, and similar financial matters whenever it appears or seems to appear that prices quoted for any articles, stores, etc., which are sought to be purchased are not obviously fair and reasonable.
4.	That the committee shall be authorized to obtain from any department of the government such information regarding the matters coming within the scope of its duties and functions as it deems necessary, and that it shall have power to call before it any officer, official or employee of the government of Canada or of the naval, military or air forces of Canada, for the purpose of obtaining advice or information with respect to any of the matters wherewith the committee is empowered to deal.
What I want to point out is this, that the members of that committee had unlimited
[Mr. McGeer.}
powers under the order in council. Now I come to the men who formed that committee. They are:
National Defence:	Lieutenant Colonel L.
R. LaFleche, deputy minister; Mr. Charles Burns, assistant deputy minister, with wartime experience as director of contracts.
Finance: Doctor W. C. Clark, deputy minister, with Doctor A. K. Eaton as an alternate, in the event of Doctor Clark's absence. Doctor Eaton is one of the senior officials of the finance department and is known as taxation investigator.
National Revenue: Mr. Fraser Elliott, K.C., commissioner of income tax, in addition, Mr. Ronald Sharp, chief inspector of income tax, assisted Mr. Elliott and served on a subcommittee which examined certain contracts, including the Bren gun contract.
Trade and Commerce: Mr. H. Marshall, in charge of internal trade statistics.
Labour: Mr. C. W. Bolton, chief statistician.
There is the strongest possible non-partisan official committee appointed to guard against and prevent in every way abuses from any profiteering or from any untoward action on the part of the Department of National Defence or any other department. The committee's powers were unlimited. It has been said time and time again in this house that this committee never reported to the government.


An hon. MEMBER:: Hear, hear.


Gerald Grattan McGeer: My hon. friend says, "hear, hear." I think it is unfortunate that there should have been so many members speaking from the other side of the house who are clearly not conversant with the important facts about which they were speaking.


Robert James Manion: I am sorry to interrupt the hon. member, and I am not doing it. except for the reason of setting the record right. At page 41 of his report the commissioner states:
The system broke down when the committee failed to report back to the body that had created it.


Ian Alistair Mackenzie: Will the hon. leader of the opposition please read from the evidence.


Robert James Manion: I have no objection, but I have not the evidence before me,


Gerald Grattan McGeer: There are some things that are not open to argument; there are other things that it is not necessary to argue. What I want to put before the house and read into the record are the reports that were made to the minister and to the government from the interdepartmental committee and filed as exhibits before the commissioner.


Ian Alistair Mackenzie: And
printed in the evidence, and filed as exhibits at the minister's request.


Gerald Grattan McGeer: At the minister's request. I come first to exhibit 243. It is a report to the hon. minister from the interdepartmental committee under date of March 21, 1938, which was the day before the governor in council passed the order in council authorizing the execution of the contract, which was not executed until March 31. Here is exhibit 243, on file before the commission. The interdepartmental committee is reporting to the hon. Minister of National Defence:
The interdepartmental committee on the control of profits on government armament contracts has, during the last three months, at numerous meetings, considered in minutest detail all the aspects and factors leading up to the manufacture in Canada o'f Bren guns including the various methods possible which, with their advantages and disadvantages were fully weighed. In view of the experience of the war office in these matters and the position it took, the committee reached the conclusion that the placing of a contract on a cost-plus basis with a selected firm whose capabilities in the opinion of the war office and of the department are satisfactory, was the most practical course of action to be adopted in the circumstances.
The draft contract now before privy council represents the views expressed by the committee which considered it clause by clause in meticulous detail. The committee, after exhaustive examination of the financial aspects as reflected in the draft unanimously expressed the opinion that they are fair and reasonable.



L. R. L.

[Stage Direction]
Deputy Minister.
The initials are those of Colonel LaFleehe, deputy minister, and chairman of the interdepartmental committee.
Robert James Manion: What is my hon. friend
reading from, may I ask?


Gerald Grattan McGeer: From an exhibit that was
filed before the commission, exhibit 243. Now does any hon. member on the other side of the house rise to say that the deputy minister and chairman of the interdepartmental committee misrepresented the conclusions of that committee to the minister, because we have it from a great many hon. members on the other side of the chamber that the deputy minister is a man of honour whose word is to be believed?


Mr. WERMENLINGER:: We admit that.


Gerald Grattan McGeer: You admit that.


Edgard Jules Wermenlinger: Certainly.


Gerald Grattan McGeer: Well, I am glad of that-


Edgard Jules Wermenlinger: I refer to the
deputy minister.	.
Bren Gun-Mr. McGeer


Gerald Grattan McGeer: -because that must place the report before the minister in such a light that the Minister of National Defence was justified in acting upon it.


Hugh Alexander Stewart: Mr. Speaker-


Gerald Grattan McGeer: That was another story.


Hugh Alexander Stewart: Would the hon. gentleman allow me to ask him a question?


Gerald Grattan McGeer: Just a minute. I want
to put this on record without interruption, and when I have finished, if there are any questions, I shall be glad to answer them. I am not now making a speech; I am merely putting on record some facts which need neither speech nor argument to make them worth while and valid.
But the minister was not satisfied with that synoptic report. He went back to the deputy minister and said that he wanted a report in detail. I wish now to read in detail the report upon which the Prime Minister and his colleagues in the cabinet acted: it went before the commissioner and was filed as exhibit 244. The evidence is that it was the report upon which the Prime Minister and his colleagues advised the governor general to pass the order in council authorizing the execution of the contract.
As desired by you, a report on the Bren-


Ian Alistair Mackenzie: Will the hon. member please repeat those words: "As desired by you"?


Gerald Grattan McGeer: Yes. At the request of
the Minister of National Defence. The suggestion that there was no disclosure is unwarranted because it is untrue, and in all the calumny of the personal attack that has been made upon the Minister of National Defence, the most contemptible is that he failed to disclose the facts which are so fully reported to the government in this report.
As desired by you-
That is, the Minister of National Defence.
-a report on the Bren light machine gun question is respectfully submitted:
As far back as the summer of 1936 the Department of National Defence came to the conclusion that it would be necessary to arm the forces with the Bren gun and that 7.000 of these guns would be required. A few model or specimen Bren guns were ordered and it early became clear that Canada could not look to the manufacturing establishment of the government of the United Kingdom as a certain or timely source of supply reasonably safe from possible enemy action. The two model guns which we now have were not made in England but in Czechoslovakia where they were invented; the Enfield plant near London cannot satisfy the United Kingdom government's requirements before several years. You will not want me to go too deeply into the difficulties
Bren Gun-Mr. McGeer

which have been encountered in this connection by Great Britain, but the fact that the United Kingdom is not only willing but anxious to order 5,000 Bren guns from a Canadian manufacturer is of the utmost significance. Direct advice to this effect, with corroboration from our Royal Canadian Ordnance Corps officer stationed at Canada House, London, has been received, also similar advice to the effect that the treasury in London has approved the war office proposal.
In view of the present situation, as mentioned in the next preceding paragraph, which, although anticipated here long ago, materialized slowly and after long and unexpected delays, it was deemed advisable, even in 1936, to consider the possible necessity of having our requirements manufactured in Canada. The probable difficulties of the position of the United Kingdom were surmised here from the beginning. Because of known variations in cost factors (labour, for instance), heavy outlays for machinery, et cetera, that would be required if the guns were to be manufactured in Canada, it was known that Canadian production costs would be much more than the English production cost, if only 7,000 guns were to be made in Canada it was believed that the cost would be prohibitive under normal conditions. Such has turned out to be the case, to the extent that the placing of the 5,000 order in Canada will save something more than $1,000,000 in cash to Canadian taxpayers. It is impossible to translate into dollars the other advantages to Canada whether financial, or, very important, the extending of our means of defence. Perhaps to mention one other advantage will suffice, i.e., that we will get the guns more quickly than would otherwise be possible; there will remain in Canada the plant and acquired skill in the production of this weapon.
When the matter was first considered, it was not then believed that there would be long delay in receiving favourable or at least definite advice regarding the placing of an order by the government of the United Kingdom, the advisability of having the guns produced in a dominion arsenal, by private industry following invitation to tender or by a selected manufacturer who would produce the guns under the close financial and technical supervision of the Department of National Defence, on a cost-plus basis, was carefully considered. The latter method was chosen as the one which would bring quickest results, would be the most economical, would most easily permit of termination of activity, and would be one which would commend itself to the w'ar office.
It is the practice in England to select the contractor when, as in the case of the Bren gun and many other articles required for defence purposes, to have the contractor proceed on a cost-plus basis. This, when it is not possible to say what a fair and reasonable firm price is. This procedure permits sound planning against an emergency or war. In the case now under discussion, the president of Messrs. John Inglis Company Limited. Toronto, Ontario. James E. Hahn (Major, D.S.O., M.C., Canadian expeditionary force) called at the war office in October or November, 1936, and undoubtedly created a most favourable impression there and with the technical officers of the Enfield plant, with the result that of a number of Canadians who have displayed an interest in armaments. Major Hahn is one of

the few who has proven satisfactory to the war office if an offer of a contract is to be taken as the indication. The prospective contractors were equally acceptable to the department and their continued interest in the matter, despite delays vexatious to all concerned, was reassuring.
It may be added that Major Hahn has visited England several times and has acquired a great deal of extremely valuable information concerning the manufacture of the Bren gun. The departmental proposal was brought before the interdepartmental committee on the control of profits on government armament contracts and there given minute attention which has resulted in a draft agreement which would limit the financial returns to the company to an extent greater than the agreement which has been found acceptable by both the war office and the treasury people of the government of the United Kingdom.
Mr. MANION; Whose statement is that?


Gerald Grattan McGeer: I will tell the hon. gentleman when I have finished reading it.
The Department of National Defence has spared no effort to acquaint the members of the interdepartmental committee with all possible facts and information concerning the proposed agreement. The members of the committee, including a subcommittee, individually and collectively, have been extremely painstaking and cautious in their approach to the subject. Some members insisted that a cost-plus contract be submitted to tender by selected Canadian firms.
Mr. MACKENZIE (Vancouver); There you are. There is "concealment"!


Gerald Grattan McGeer: It being the expressed wish of a majority of the members, this was referred to the war office officials with the result that they nearly dropped the matter. It had been arranged through proper channels that the Department of National Defence ordnance office in London, as an observer, attend the discussions on this particular point. All reports were painfully to the effect that if such action -were taken it would mean the immediate and complete loss of interest on the part of the war office. Whatever the reasons for delay in arriving at a decision up to a short while ago, London evidently cannot or will not place an order in Canada unless it can do so immediately. All concerned in the department here, including myself, quite understand and agree with war office officials; the members of the interdepartmental committee who desired that the point be referred to London accepted the war office decision when the committee again took up the details of the proposed agreement.
What I want to draw to your attention, Mr. Speaker, is that the hon. member for St. Lawrence-St. George demanded that the Prime Minister call for the resignation of the Minister of National Defence because he had not acquainted the government with these very facts, facts that went before the government in this report and were filed there before the government acted. Surely the time has

Bren Gun-Mr. McGeer
come when in the face of a report of this kind members who charge a minister of the crown with deception by not informing the government of the facts have little regard for the right of the Minister of National Defence at a time like this to be free from having suspicions cast upon him that are not warranted by the facts.


Robert James Manion: What has the hon. member been reading from? Surely we have a right to know.


Gerald Grattan McGeer: I wish to compliment the leader of the opposition on putting upon the political records of Canada one of the finest Irish bulls that ever went into print. Speaking to the Minister of National Defence about the editorial from Vancouver, which did not come from Vancouver, " Why," he says, " Mr. Speaker, I did not quote the editorial; I merely read it verbatim."


Robert James Manion: I did not say that at all. I wish to correct that statement. I did not say that I quoted it verbatim. I did not pretend to quote it verbatim. I took some of the words and used them, adopting them as my own. I never made the statement attributed to me.
Mr. McGEEIl: Collectors of Irish bulls will find that in Hansard.


Mrs. BLACK:: On a question of privilege, Mr. Speaker, I myself sent that editorial to the leader of the official opposition. That editorial was printed in the Vancouver News-Herald.


Gerald Grattan McGeer: We have passed the editorial stage. We are now at the stage of the bull in the china-shop. I took a great deal of time to tell the house that I was reading from the report made by the interdepartmental committee to the minister and presented to the government, upon which they acted when they passed the order in council authorizing the execution of the contract, filed by the minister before the Davis commission as exhibit 244.


Robert James Manion: Why does it always say "myself"? In that report, again and again, says "myself." Is it the deputy minister?


Gerald Grattan McGeer: That is the reason why this kind of material should go to a committee where it can be analyzed properly. I do not blame the hon. member for not wanting it to go to a committee, but it is going there.


Mr. DOUGLAS (Weybum):: May I ask a question-


Some hon. MEMBERS:: Order. Sit down.


Gerald Grattan McGeer: To continue:
The last meeting of the committee was held on March 17, 1938, when all remaining clauses of the proposal were passed. Major Hahn was called into the discussion during the latter part of the deliberations.
The principal features of the proposed contract, as passed by the interdepartmental committee, and recommended to you by me, are: The contractor to manufacture in Canada 7,000 Bren light machine guns and parts, as ordered by national defence according to available funds.
Contractor to have ten-year non-exclusive licence. (This is effectively controllable by national defence through war office, and is subject to cancellation for cause, including increase of company's capitalization without consent of department.) Licence renewable by mutual agreement.
The essential feature of that report is to be found in the fact that the demand of a majority of the committee at one stage for tenders was properly placed before the government, and the government were advised that this committee, after full consideration of all the facts, had decided to accept the war office recommendation for the selection of the Inglis company under the direction of Major Hahn. Again, I say: Whether the minister was correctly advised or not may be one issue; but whether or not the minister and the government had a right to act upon that kind of report made by a responsible officer, who the other side declares is honourable and worthy of every respect, can no longer be an issue.
Upon what is a minister to act if he cannot act upon the written reports of the chairman of the interdepartmental committee, the deputy minister of national defence? Will any hon. gentlemen on that side say that this report is untrue; because to do so is to change completely their acceptance of the capability, honesty and integrity of the deputy minister of national defence? Well, if it is true, what was wrong with the minister and the government in acting upon it?


Robert James Manion: Because they took the
responsibility, not the deputy minister.


Gerald Grattan McGeer: Then we shall come to
one or two other incidental facts. This is the finding of the commissioner upon the interdepartmental committee's dealing with the question of tenders. Let me quote from that finding of commissioner Davis at page 40:
Mr. Elliott said that the chairman (the deputy minister of national defence) pointed out that
his department had followed the practice of the British government where competition is not always obtainable, and they unhesitatingly go into non-competitive contracts in order to secure their requirements. In this particular case the British government had picked the firm to manufacture its guns.

Bren Gun-Mr. McGeer

By the Commissioner:
Q. Just a minute; the British government had done what?
A. Picked the firm.
Q. In this case?
A. Yes.
Q. In this case the British government had done that?
A. Yes, that in this case the British government had picked the firm to manufacture guns, and that they had made the best possible deal with that particular firm.
That is the finding of the commissioner at page 40. Is that finding correct? We can go to this imaginary picture language and 'say that the commissioner did not mean to quote that to be believed; that he meant something else. Let us turn to pages 46 to 47 where he refers to the first cablegram from the British war office. I quote:
It was on November 9, 1937 (exhibit 182) that the war office had informed the department by cable that the British government was then "ready to negotiate" for the purchase of 5,000 Bren guns to be manufactured by the John Inglis Company subject to some substantial reduction in cost.
That is the finding of the commissioner. Then he quotes Sir Harold Brown's cablegram to the department in detail.
Mr. STEWART; May I ask the hon. member a question? Will he read the finding of the commissioner at the foot of page 47?
As appears from the communications quoted above, the war office as late as February 3, 1938 (exhibit 190) was still adhering to its desire to deal with the Canadian government and not with a Canadian manufacturer direct.


Gerald Grattan McGeer: I am reading the sections that are pertinent to the matter I have under consideration.


Hugh Alexander Stewart: The hon. member is leaving out what is pertinent.


Gerald Grattan McGeer: The commissioner has definitely found that the war office, rightly or wrongly, under pressure from this government or anyone else, did decide to select the John Inglis Company.


Robert James Manion: Under pressure, yes.


Gerald Grattan McGeer: What is the accusation, that this government in Canada is running the war office in England?


Robert James Manion: They were in this instance.
Here is a request under date of January 26, 1938, from the interdepartmental committee. It reads:	.
It is private and not public tender that is intended. The committee would like to know if this would affect the placing of your order in Canada realizing the probable delay incurred thereby. This information is for confidential use of interdepartmental committee which is working on proposed contract.
What was the answer of the war office to that?


Walter Edward Foster: I am sorry to interrupt, but the hon. member has exhausted his time.


Gerald Grattan McGeer: I should just like to finish this.


Some hon. MEMBERS:: Time.


Mr. J. T. THORSON (Selkirk):: The reply from the war office was:
Must emphasize that any further delay may adversely affect the proposal. In this connection firm having done necessary technical investigation obviously has the advantage.
Also, on February 5, 1938:
As regards alternative tender several months would necessarily be required for another firm to study job before making reasonable tender. This delay would be fatal to British interest in scheme.
Then there is Colonel Loggie's report to the secretary of Canada House. Colonel Loggie was the ordnance representative. His statement is contained in exhibit 224 as follows:
5.	In his cabled reply, a rough draft of which was shown to me, Sir Harold emphasized the necessity of the immediate completion of a satisfactory agreement and mentioned the fact that a firm having carried out technical investigations obviously had the advantage, or words to that effect.
6.	Sir Harold mentioned that should further delays occur a serious situation would arise in that the Enfield plant would be idle or nearly so before a Canadian entered production. He felt that unless immediate action was taken by the Canadian authorities the war office might be obliged to withdraw from participation in the scheme. I took occasion to ask him that in the event an auxiliary source of supply was established in Great Britain whether tenders would be invited or a suitable firm selected. He said, "We would select a firm."
The house divided on the motion (Mr MacNeil) which was agreed to on the following division:


Gerald Grattan McGeer: Do not be foolish. No one in Canada would believe that.
Let us come now to the other point about this particular issue. The committee did demand tenders; they did demand that the war office be requested to agree to a tender program, and they cabled a request to that effect to the war office. And what happened?

++YEAS
Messrs:
Anderson
Baker
Barber
Beaubien
Bertrand (Prescott) Black (Chateauguay-Huntingdon)
Black (Mrs.) (Yukon)
Blaekmore
Blair
Blanchette
Bonnier
Bothwell
Bouchard

Bren Gun-Division
Boulanger
Bradette
Brooks
Brunelle
Cardin
Casselman
Church
Clarke (Rosedale)
Cleaver
Cochrane
Coldwell
Cote
Damude
Davidson
Deachman
Denis
Deslauriers
Donnelly
Douglas (Queens)
Douglas (Weyburn)
Dubois
Dubuc
Dupuis
Dussault
Elliott (Kindersley)
Esling
Euler
Evans
Fafard
Fair
F arquhar Ferguson Ferland Ferron
Fiset (Sir Eugene) Fleming Fontaine Fournier (Hull) Fournier (Maison-neuve-Rosemount) Francceur Furniss Gardiner Gariepy Gauthier Gladstone Glen Golding Gosselin Grant
Lapointe (Matapedia-Matane)
Lapointe
(Quebec East) Leader Leduc Lennard Lockhart McAvity McCalluin McCann McCulloch Macdonald
(Brantford City) McDonald (Pontiac) McDonald (Souris) McGeer McGregor Maclnnis McIntosh McKenzie
(Lambton-Kent) MacKenzie (Neepawa) Mackenzie
(Vancouver Centre) MacKinnon
(Edmonton West) McKinnon (Kenora-Rainy River) McLarty
MacLean (Cape Breton North-Vic tori a) McLean (Melfort) McLean (Simcoe East) MacLennan MacMillan MacNeil MeNevin
(Victoria, Ont.)
Me Niven
(Regina City) MacNieol Macphail (Miss) McPhee Mallette Manion Marshall Matthews Maybank Mayhew
Rogers
Ross (St. Paul's) Ross
(Middlesex East) Ross (Moose Jaw) Rowe (Athabaska) St-Pere Sanderson Senn Spence Stewart Stirling Sylvestre Taylor (Norfolk) Telford Thauvette Thompson
Nil.
Thorson
Tomlinson
Tremblay
Turgeon
Turner
Tustin
Veniot
Vien
Ward
Warren
Weir
Wermenlinger
White
Winkler
Wood
Woodsworth Young-187.
++NAYS


Mr. HANSON:: Ten days of unnecessary
expense to the Canadian taxpayers.
An lion. MEMBER:	What is the hon.
member talking about?


Olof Hanson: I want it recorded, too;
ten days of unnecessary expense.


Robert James Manion: Why did the hon. member not make a speech when he could?


Hugh Alexander Stewart: Because he couldn't.


Olof Hanson: The whole thing is silly.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
Hon. C. D. HOWE (Minister of Transport) moved for leave to introduce Bill No. 22, respecting the appointment of auditors for the Canadian National Railways.
Some hon. MEMBERS:: Explain.
Graydon
Green
Hamilton
Hansell
Hanson
Harris
Hartigan
Hayhurst
Heaps
Hill
Homuth
Howe
Hurtubise
Hyndman
Ilsley
Isnor
Jaques
Jean
Johnston (Bow River) J ohnston
(Lake Centre) Kennedy King, Mackenzie Kirk Kuhl Lalonde Landeryou
Michaud
Mills
Mullins
Muloek
Mutch
Needham
Neill
O'Neill
Parent (Quebec West and South)
Parent (Terrebonne)
Patterson
Pelletier
Perley
Pinard
Poole
Pettier
Power
Purdy
Quelch
Raymond
Reid
Rennie
Rheaume
Rickard
Rinfret
Robichaud


Clarence Decatur Howe: This is the annual bill providing for the appointment of auditors for the Canadian National Railways. It is in exactly the same form as that of last year.
Motion agreed to and bill read the first time.



DOMINION ELECTIONS ACT REPEAL OF SECTION 106 OF ACT OF 1938

[Stage Direction]
Mr. ROBERT FAIR (Battle River) moved for leave to introduce Bill No. 23, to amend the Dominion Elections Act, 1938.
Some hon. MEMBERS:: Explain.


Mr. FAIR:: The bill provides for the
repeal of section 106 of the Dominion Elections Act, 1938. The effect of this section which was enacted last year, is to deprive electors of any control over the members whom they send to parliament.
Business oj the House


Mr. LAPOINTE (Quebec East):: What
control have they now?
Motion agreed to and bill read the first time.



ADJOURNMENT-BUSINESS OF THE HOUSE

[Stage Direction]
Mr. MACKENZIE KING moved the adjournment of the house.
Robert James Manion: What will be the business to-morrow?
Mr. MACKENZIE KING. Tomorrow we shall take up the resolution with respect to the trade agreement between Canada and the United States. I understand there is a desire not to proceed with the debate tomorrow in which event we would go on with supply, and take the estimates for the Department of Agriculture, Public Works or National Revenue.


Robert James Manion: Mr. Speaker, in regard
to the desire not to proceed, I pointed out privately to the Prime Minister that when the empire trade agreements were introduced on a Wednesday, back in 1932, the Prime Minister (Mr. Mackenzie King), who was then the leader of the opposition, took an adjournment of five days. And when the trade treaty of 1936 with the United States was introduced the right hon. gentleman who was then in my place took an adjournment of three or four days. To-morrow after the Prime Minister's speech I may make a few remarks, and then I shall suggest an adjournment for two days, until Thursday.


Ernest Lapointe: That is fine.


William Lyon Mackenzie King: Whatever is
most convenient to my hon. friend will be suitable to the government.
Motion agreed to and the house adjourned at 10.56 p.m.
Tuesday, February 14, 1939