1939-02-07

Mr. R. E. FINN (Halifax):: Mr. Speaker, before the orders of the day are called I rise to a question of privilege.


Mr. SPEAKER:: We are not on the
orders of the day yet.


Robert Emmett Finn: I draw your attention, sir,
to citation 170:
It is the practice in the House of Commons to bring up a question of privilege after prayers, and before the house has taken up the orders of the day.
Therefore I am in order.
My question of privilege is based on an article appearing in the Halifax Chronicle of February 4, which contains reference to proceedings which took place in this house on Friday last on the debate concerning the reestablishing of the lobster fishermen in their industry. It is headed, "Premier answers Ottawa comment," and goes on to say:
For more than eight years "the overwhelming majority of those unemployed in Canada or those otherwise in unfortunate economic circumstances have declared they prefer work to doles," Premier Angus L. Macdonald of Nova Scotia said to-night.
He was commenting on a discussion in the federal house to-day on the Nova Scotia government's plan to provide a "road works project" for fishermen who lost pots and equipment in November and December gales.
Repeatedly labour unions or associations, unemployed groups, social workers and others have urged that work be provided wherever possible. In the case of the storms in November and December in Nova Scotia the Nova Scotia government has endeavoured to pursue this policy. It endeavoured to provide work instead of doles or hand-outs.

If this can be called throwing a monkey wrench into the machinery, the government here is prepared-


Walter Edward Foster: Order. Would the hon.
member state his question of privilege?


Robert Emmett Finn: The question of privilege is
that the premier of Nova Scotia has absolutely misrepresented me in saying that I threw a monkey wrench into the machinery, I being in favour of the dole. Nothing of the sort. I made my position on that point very clear in the debate in this house. In a letter which I addressed to His Honour the Speaker on the moving of the adjournment of the house on February 3, 1939, I said:
The provision of the Unemployment and Agricultural Assistance Act, 1938, is abortive in its provisions to meet the absolute need of reestablishing the said fishermen in their industry, and to provide them with the means of earning their livelihood, and to enable them to provide the bare necessities of life for their families.
During the debate I said:
But a monkey wrench was thrown into the machinery by the premier of Nova Scotia . . .
Then the Minister of Fisheries (Mr. Michaud) in the debate on my motion on February 3, said:
Since this parliament, for the last three years at least, has deemed it advisable by supplementary appropriations to grant sums of money to help reestablish needy fishermen in their occupations . . .
And he adds that these moneys have always been distributed in the provinces where there was the need.
Now, Mr. Speaker, the premier of Nova Scotia goes on further to say, and it is a direct charge against myself, that I was not in Halifax when the storm took place, and that I had not any information in reference to it; in fact his inference is that I do not know the needs of my constituency.


Mr. POULIOT:: The storm took place in the house.


Robert Emmett Finn: Well, perhaps a storm did take place when I spoke, but a tremendous gale takes place when the hon. member who has just interrupted me rises-or perhaps something more in the nature of a cyclone.
I may say for the information of the house that I was here in Ottawa for nearly four weeks in November attending to departmental matters with the various departments and again on December 8 after the December gale, conferring with the Minister of Fisheries.

Bren Gun-Ruling


Walter Edward Foster: Order. I think the hon. member has stated very well his point of privilege.


Robert Emmett Finn: Perhaps that is your honour's opinion, but it is not mine.


Walter Edward Foster: I think the house is satisfied, so I would ask the hon. member to resume his seat.


Robert Emmett Finn: I desire to say further that I was in Ottawa two days after the storm in December, coming here from Halifax, and that I sent the following telegram to the Minister of Fisheries (Mr. Michaud)-


Walter Edward Foster: Order. The hon. gentleman has made his point of privilege clear to the house and to the country, and in justice to himself I would ask him to resume his seat.


Robert Emmett Finn: If that message will rebound
from here to Nova Scotia I shall be satisfied.


Mr. CHURCH:: You can never answer a newspaper; it always has the last word.



STANDING COMMITTEES


Right Hon. W. L. MACKENZIE KING (Prime Minister) moved:: That the name of Mr. Ilsley be substituted for that	of	Mr.	Rutherford on	the	select
standing committee on banking and commerce.
That the name of Mr. Golding be substituted for that	of	Mr.	Rutherford on	the	select
standing committee on standing orders.


[Stage Direction]
Motion agreed to.


Mr. THOMAS VIEN (Outremont) moved:: That the private bill intituled An Act respecting Industrial Loan and Finance Corporation, filed with the clerk of the house on January 31, 1939, based on the petition read and received by the house on February 2, be referred to the standing committee on standing orders for report on the filing of the said bill and for such recommendations as may be deemed advisable.


Hon. H. H. STEVENS (Kootenay East):: Might I ask, just for information, whether this is a method of introducing a bill without complying with the ordinary regulations for
this session-that is, accepting the bill as being in order by virtue of the fact that it was introduced in a previous session?


Thomas Vien: No. The bill was deposited with the clerk of the house a little late, and under the rules of the house it must be referred to the standing committee on standing orders before it can be introduced in the house.


Henry Herbert Stevens: Then I have no objection.


[Stage Direction]
Motion agreed to.


Hon. IAN MACKENZIE (Minister of National Defence):: I table herewith the return asked for last evening by the hon. member for Leeds (Mr. Stewart), containing the agreement, a copy of which he requested, and also a letter referring thereto.



CONTINUATION OF DEBATE ON MOTION FOR REFERENCE TO PUBLIC ACCOUNTS COMMITTEE

[Stage Direction]
The house resumed from Monday, February 6, consideration of the motion of Mr. Mac-Neil:
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. Manion.
Walter Edward Foster: Before the debate proceeds I think this would be the appropriate time for me to render my decision on the point of order raised yesterday in regard to the amendment proposed by the leader of the opposition (Mr. Manion).
The hon. member for Vancouver North (Mr. MacNeil) has moved to refer to the public accounts committee the Bren gun agreement, the report of the royal commission dealing with said agreement, and all related documents, evidence, vouchers and exhibits.
The hon. the leader of the opposition (Mr. Manion) has moved as an amendment that the said agreement be cancelled.
The motion of the hon. member for Vancouver North proposes to refer the agreement to the public accounts committee. The amendment proposes to cancel it, thus defeating the purpose of the main motion.
Bren Gun-Ruling

Can the motion be amended in the manner proposed? I do not think so. In the parliamentary debates of the United Kingdom of Great Britain and Ireland, 4th series, volume 146, at page 990, I find that a motion was made for the appointment of a select committee-
-to consider the agreement of the 2nd day of February, 1905, between the Postmaster General and the National Telephone Company, and to report whether it is desirable in the public interest that the agreement should become binding. (Lord Stanley.)
Mr. Kearley (Devonport) proposed as an amendment that -
[DOT]-having regard to the public statement of the Postmaster General, under no circumstances can any alterations be made in the agreement with the telephone company to which he has given his assent, this house fails to see the necessity for the appointment of a committee to consider it.
The deputy speaker ruled:
I may point out to the hon. gentleman that this amendment will not be in order. It is a direct negative, but he will be at liberty to make his speech.
In the light of this decision I believe that the amendment proposed by the hon. the leader of the opposition for the cancellation of the agreement destroys the object of the main motion, when an alternative proposition is not permissible, and is in the nature of an expanded negative. I must therefore rule it out of order.


Hon. R. J. MANION (Leader of the Opposition) :: Without reflecting in any way upon yourself, Mr. Speaker, under the circumstances I feel it my duty to appeal from your ruling.	*
Mr. Speaker put the question as follows:
The leader of the opposition (Mr. Manion) having proposed an amendment to the motion of the hon. member for Vancouver North (Mr. MacNeil) and Mr. Speaker having decided that the said amendment was out of order, Mr. Manion appeals to the house from the said decision of the speaker.


Mr. BERTRAND (Prescott):: I was paired with the hon. member for Eglinton (Mr. Baker). Had I voted I would have voted to sustain Mr. Speaker's decision.


Mr. D. G. ROSS (St. Paul's):: Mr. Speaker, before the adjournment last evening I had said a few words about the actions of the interdepartmental committee in connection with this contract. I pointed out during the course of my remarks that the promoters of this company had paid $100,000 for 191,662 shares of vendors' stock. This stock had a value of $6 per share, or $1,149,972, showing a profit of at least $1,049,972. The value of these shares had been established by the sale of treasury stock to the public at from $6 to $7.50 a share. Either the promoters made a profit of at least $1,049,972 or the public which purchased these treasury shares was gypped.
I should like to know whether these facts were brought to the attention of the interdepartmental committee when they were asked to give their opinion as to the advisability of giving this contract to Major Hahn and his associates. Did they know what profit was to be made by this promotion? Were they told that the promoters were to use not more than $500,000 in cash-the amount that was necessary to purchase the Inglis plant and provide working capital-to put this plant in production? I understand that under the contract the contractors are to receive ten per *cent on all machinery which goes into the
plant. The real money to be used in the production of these guns is only $500,000. I submit that if the interdepartmental committee had known that, there would have been no doubt as to their decision as to whether this contract should be awarded to Major Hahn and his associates, whether tenders should be called for, or whether the guns should be manufactured in our own arsenal. I am sure they would have decided that it was unnecessary for the government to allow a contractor a profit of $1,049,972 simply by his being awarded a contract. If they had known the small amount of money required to do this work they would have said: The government will manufacture these guns because the government can borrow money at three per cent for this purpose.
Going a little further, the interdepartmental committee were told that the British government had picked a contractor and would deal with no other firm. Now who was it that picked this contractor? The Prime Minister of this country picked him. He appointed him, by cable, to be Canada's representative. I say that the firm of John Inglis Company was forced on the British government, as shown by all the records, all the correspondence, and all the telephone conversations, code messages, and so forth, contained in the commissioner's report, and because of that the interdepartmental committee's hands were tied; for they were told that the British government would deal with no other firm.
Now let us look at the background of Major Hahn. He has an excellent war record. I do not know him personally but I hear that he is a very fine man. In the evidence it is pointed out that in 1934 the claims of the creditors of his company amounted to around $140,000. Over-expansion and the depression no doubt were the causes of the company's difficulties at that time, and that is not to his discredit. He compromised with his unsecured creditors for twenty cents on the dollar, and then sold out the assets of his company to the Rogers company, guaranteeing the payment of twenty cents on the dollar of his company's $140,000 of liabilities. The shareholders of his own company received one share in the Rogers company for ten shares of Major Hahn's company.
Again I say I have nothing against Major Hahn. I am just stating what is in the evidence. But this is the successful business man who was given carte blanche to the British war office with respect to Bren guns, and given access to all the secrets that he must have in order to make a contract with Great Britain for these guns. Again I ask,

Bren Gun-Mr. Ross (St. Paul's)
why was he picked by the British government? It is said that there may have been some delay in connection with the manufacture of these guns. It is said by some people that there may have been some detrimental factors with respect to receiving orders from the British government. I say now, Mr. Speaker, that the facts with respect to this contract, and the stock-jobbing that went on in connection with it, were bound to come to light sooner or later, and how much more it would have been to Canada's discredit to have them come to light later instead of coming to light and being settled now! Let us cancel this contract and get our credit with Great Britain straightened out. Let us start the manufacture of these guns ourselves, in our own arsenals, and make them without a profit. If we do that, I am perfectly certain that we shall get orders from Great Britain to make Bren guns for her, if we can do the job properly, and we ought to be able to do it with the brains and ability we have here.
As I said before, this is strictly a stockjobbing promotion from start to finish, based on profits accruing from the manufacture of implements of war, and every hon. member of this house knows it. All that the promoters had to find was an old building and a payroll to a matter of $500,000. The government paid for the machinery, and the government could just as easily have found that $500,000 and used it for putting a government arsenal into production. That would have saved ten per cent commission, as well, on the purchase of all the machinery which was going into this plant.
What about the actual cost of production of these guns? We hear rumours from time to time about the cost of production, running all the way from $250 up to $1,500 and $1,600. I do not know how much they cost, but I do know that there are plenty of industrial experts in this country who could give us an accurate estimate of the cost of producing them. There would be no difficulty in that, and if it was pointed out to our manufacturers that these guns are vital to Canada, I do not think there is a single industrial concern in this country which would not be only too glad to offer its services with respect to cost. Furthermore I am perfectly sure there is not a single one of these firms that would not be glad to give every bit of advice it possibly could with respect to putting a factory of this kind into operation.
There is a "but" to that, a great big "but," and that is patronage. You will not get cooperation from any industry in this country so long as there is patronage in the Department of National Defence, patronage in con-

nection with the awarding of contracts for the instruments of war-a profit of $1,049,972. The safety of our democracy is at stake. We must have no such patronage in the Department of National Defence. Democracy is founded on votes. Votes are being coerced through patronage. The Canadian taxpayer is paying for the patronage, and by that our democracy is endangered. Let us cancel the contract.
Mr. JEAN-FRANCOIS POULIOT (Temis-couata):	Mr. Speaker, during the course of
the summer I received a gift from Maclean's magazine. It was a reprint of the article published by Mr. George Drew, of notorious fame. He did not proceed in the article by means of accusations. He proceeded in the article, just the same as he did before Judge Davis, by insinuations. His article of nearly four pages contains two paragraphs referring to one of our esteemed colleagues in the House of Commons. I shall read them because at the time I was under the impression that the hon. member for Trinity (Mr. Plaxton) had been guilty of some kind of misdemeanour or offence; against the House of Commons Act. There is nothing worse, Mr. Speaker, than to proceed by insinuation, because you do not know what the accuser means by his insinuations. If there is a direct accusation, you can answer it; but there is nothing worse than putting doubts into the minds of the people.
Here are paragraphs 12 and 13 of the conclusion of the article:
12.	How does the government explain the fact that four of the seven directors of this enterprise are employees in the office of Plaxton and Company ?
13.	What is the position of Mr. Hugh Plaxton. M.P., in the office of Plaxton and Company, and what has it been at all times since Plaxton and Company began acting for the armament company which now has the contract?
This is the insinuation that was made by that notorious George Drew who, by the way, is a very good looking fellow-but there is no beauty contest to-day. In connection with these paragraphs 12 and 13 of the conclusion of this article we must read four paragraphs of the report made by Commissioner Davis, one of the learned judges of the Supreme Court of Canada. I was really surprised when I read that part of the report of Commissioner Davis, because it destroys entirely the whole insinuation of which George Drew himself was guilty. He was the guilty party in the matter.
Now let us give the Honourable Mr. Justice Davis an opportunity to remove all doubt concerning the integrity not only of the hon.

Bren Gun-Mr. Pouliol
member for Trinity but of all members of the government and of all members of this house. At this point I must say, before reading what Mr.. Justice Davis has to say, that the members of the House of Commons must be proud of the fact that they have been exonerated by a judge who is supposed to have no political affiliations and who was appointed by the Tories themselves. This is what Mr. Justice Davis has to say:
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-
Mark you, 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.
I have just this to add to the mention of the name of the deputy minister of national defence. All those who were with him at the front-and my brother was three years with him; he was wounded at Yimy when under his command-speak very highly of the integrity, the ability and the efficiency of the deputy minister of national defence, General LaFleche; and the way in which Colonel Drew proceeded against him was absolutely shameful. There are, of course, other officials of the Department of National Defence to whom I cannot pay the same compliment. General LaFleche is straightforward and honest, and he has that great quality which we do not always find among the chief officials of all departments of the government. He is loyal to his minister and he has been all the time. He has a splendid military record, but I will not insist on that.
Now here is the report. It speaks for itself; and of course if I read what the leader of the opposition (Mr. Manion) said yesterday,
Judge Davis is an honourable man. I do not know him personally, but I presume he is.
I have the word of my hon. friend for it that he is. At page 641 of Hansard of yesterday the leader of the opposition made this statement :
With one of his remarks, to the effect that in appointing Mr. Justice Davis he was sure he had selected as commissioner one who would be satisfactory to the country, I am in complete accord.
In the words I have just quoted the leader of the opposition was referring to the words of the Prime Minister (Mr. Mackenzie King). The hon. gentleman then goes on at page 703:
Now to deal with the report itself. When it first came out, indeed before it was made public, information was given through the press, I do not know by whom, that the report was a complete exoneration of the government as far as the Bren gun contract was concerned. To my mind that was merely propaganda. Far from this report being a complete exoneration of the government and those associated with the giving of this contract, it seems to me it is a complete condemnation of the government, as I shall prove before I finish. It is true that there was no evidence of corruption, but no one had charged corruption.
Observe, Mr. Speaker, the hon. gentleman says that no one had charged corruption. It is true there was no evidence of corruption.
It is true that there was no evidence of corruption, but no one had charged corruption. I do not charge anything in the way of corruption now.
We do not find the assertion only in the words of Mr. Justice Davis; we find it on the lips of the leader of the opposition, and what the hon. gentleman says confirms all that I have stated, that Colonel Drew had made no direct accusation but had proceeded by way of insinuation because he could not prove his charges. The leader of the opposition repeats three times that there was no evidence of corruption. He says:
I do not charge anything in the way of corruption now. The Prime Minister (Mr. Mackenzie King) quoted from page 51 of the report, where Mr. Justice Davis eliminated anything in the way of any suspicion of corruption. I accept that; far be it from me to suggest anything to the contrary.
Why then do they argue if they cannot prove corruption?
But, sir, there are fifty-two pages in this report and I venture to say that on at least forty of them there is an absolute condemnation of the minister and, through him, of the government for having made this contract at all.
I have the report in my hand. This is the report submitted by Commissioner Davis. It is an edition which was printed by Mr. COMMONS
Bren Gun-Mr. Pouliot
Patenaude, printer to the king's most excellent majesty. I recognize it as the only report given by Commissioner Davis; I do not accept as Commissioner Davis's report the other edition which has been compiled with amendments by my hon. friend the leader of the opposition. He was not a commissioner in this matter, and he has no right to put any words into the mouth of Commissioner Davis. But he does. I think it is clear what Commissioner Davis had in the back of his mind in speaking as he did at page 703. It is not expressed in the booklet, but one needs very little imagination to understand what he is pointing to. My hon. friend the leader of the opposition has a quality that his immediate predecessor never had-


An hon. MEMBER:: Imagination.


Jean-François Pouliot: Oh, no; much more than that. His illustrious predecessor was full of imagination, he had too much sail for the rudder; but the present leader of the opposition has a quality which he shares with sheiks of Arabia-he is a mind reader. I suggest to him that he read the mind of his colleagues, the hon. member for Kootenay East (Mr. Stevens), the hon. member for St. Lawrence-St. George (Mr. Cahan), and even the hon. member for Leeds (Mr. Stewart), who is sitting next to him. In the mind of my hon. friend the dean of this house he will find wisdom, but not in the minds of all the other hon. members who support him in the house.
Now, sir, you must consider two things in this discussion. You must consider in the first place this blue book, which is the report made by Commissioner Davis, and which speaks for itself; and in the second place you must consider the very same report which has been transformed into Tory propaganda by my hon. friend the leader of the opposition and all his satellites. Therefore I shall not attach much importance to the propaganda booklet. I am more interested in what my hon. friend said when he was speaking for himself than in his interpretation of the opinion given by the commissioner. In fact he did not interpret it; he made it. I would ask the Prime Minister if there was only one commissioner, Mr. Justice Davis, or if there were two, Mr. Justice Davis and the leader of the opposition; and if so, when was the leader of the opposition sworn as commissioner in this case? If he was a commissioner, why did he not present his report with that of Judge Davis? It would not be precisely a minority report; it would be a most 
extraordinary report, a report to the effect that Judge Davis is at the same time right and wrong. He is right when he says there is nothing dishonest; that he says under his own name. But watch the back of his head. The trouble is all there; it is the old saying, nella coda sta il veleno-in the tail the poison.
According to the Financial Post there is mounting opinion on the Bren gun contract. We have received reprints of editorials from newspapers across Canada. But it is easy to provide "mounting opinion." Once I attended a meeting, and the gentleman who had to speak had nothing to say. Pointing to his opponent he said: "Look at that gentleman! Ladies and gentlemen, you know what he has done; you yourselves have never done it, your children have never done it, but he has done it. Why did you not do it? Because you did not feel like doing it, but he felt like doing it and he should be blamed very severely for that." What had he done? Nothing. And public opinion was so much aroused against that man that he could not speak in reply. Well, that is the way Colonel Drew was speaking, before he quit. And that is the way my hon. friends on the other side of the house are speaking now.
My hon. friend the leader of the opposition has a strong objection on one point mostly- he will correct me if I quote him inaccurately. He said: The curse of democracy is patronage. My hon. friend is strongly against patronage. He made a strong case yesterday, a very strong case. He said, as reported at page 657 of Hansard:
My submission is that the whole report is one of political patronage in its worst form, favouritism to one man, Major Hahn; injustice to other industrialists far more capable and fully equipped-which Major Hahn was not; deception of the Prime Minister in the letter from the hon. member for Trinity (Mr. Plax-ton) -
It was a kind of deception which was not dishonest, according to Commissioner Davis, but it was deceit just the same.
-of the interdepartmental committee by the various statements made to it by officers in authority; of the British government; and of the people of Canada. Has the Prime Minister -I ask this in all sincerity-read the report completely?
Anyone who knows the Prime Minister would know that he had read the report from the first line to the last.
Frankly it seems to me impossible that he could have read the report and not have condemned the whole deal.
There is a very good reason for that; it is that he read the report and did not see into the back of the head of Commissioner Davis.

Bren Gun-Mr. Pouliot
There is another thing that is most interesting. My hoh. friend the Minister of National Defence (Mr. Mackenzie) said:
Where is the patronage?
Mr. Manion:	Does the minister suggest that
he does not know where the patronage is?
Mr. Mackenzie (Vancouver): I defy my hon. friend to prove it. I defy my hon. friend to prove any patronage.
Why did the Minister of National Defence show so much annoyance about it? If it was patronage, patronage is not so bad after all. Patronage is the rewarding of friends who have fought for us in political campaigns. And when it is within the law there is no need to be scandalized about it. I remember that one who was guilty of patronage, who gave jobs to forty-seven or fifty-seven of his relatives, was my very dear friend the former premier of Quebec, Mr. Taschereau. Once I received a telephone call from the Minister of Justice asking me to speak at Quebec, at the Arena. It was a huge meeting, ten thousand people were there, the meeting was broadcast; it was in the midst of the provincial election campaign of 1931. Everyone I saw-I had to see the barber in the hotel, I was driven to the Arena in a taxi-was speaking about Taschereau having so many relatives employed in the provincial government. They said, "it is shameful." I said, " It is pretty bad." And I went to the meeting to defend the Taschereau candidate. I said: You say Taschereau is guilty of nepotism. It is true. But others are worse. He has forty-seven or fifty-seven relatives in the employ of the provincial government. That sounds very bad; but I know of one who was actually prime minister of Canada and who gave his brother-in-law a job that meant more in the way of financial return than all the Taschereau family together wio-uld receive. And at the time of the appointment of Mr. Herridge my hon. friend the leader of the opposition (Mr. Manion) was supporting Mr. Bennett, together with the hon. member for Leeds (Mr. Stewart); my dear friend the dean of this house, the hon. member for St. Antoine-Westmount (Mr. White), the various members for Toronto, the whip of the Conservative party, dear Davenport and Greenwood and Vancouver. They were all supporting Mr. Bennett and they found nothing bad in that. Moreover I was just about to speak during a very important debate when Mr. Bennett in the most tragic voice, like Father Barrett of the Barretts of Wimpole Street, said, "We must adjourn. I have to go to the hospital." He was going to the hospital to see poor dear Mr. Herridge, and strangely enough the fact that Mr. Bennett went there cured Mr. Herridge immediately, so that now both gentlemen can make speeches three times a day. But Mr. Bennett had to adjourn the debate in order to go to see his brother-in-law in the hospital.
Just here I should like to refer to what Lady Beaconsfield did on one occasion. She had accompanied her husband to the House of Commons at Westminster where he was to deliver a most important speech, and on arriving there caught her finger in the door of the carriage but did not say anything because she did not want to disturb him before he made his address. But instead of quoting history let us come back to patronage. My hon. friend the leader of the opposition made a distinction between patronage at large and patronage with regard to the manufacture of munitions, and in that I think he was right. At page 658 of Hansard he said:
I can understand a certain amount of patronage in other matters, but not in munitions. I do object to one man in all this country being chosen, while other industrial people are ignored, and given a contract totalling several millions of dollars.
Well, patronage is the same thing whether it has to do with munitions or anything else, according to the argument of my hon. friend, but he says it is worse in regard to munitions. Why? It is exactly the same thing, according to his own argument. He must remember that the Union government which he supported was most extravagant in regard to munitions. May I recall to him Miss McAdam's life saver with a hole in it? It was a marvellous shield, a shovel with a hole in it, and an enormous quantity was bought by the Union government, just to encourage Sam Hughes' secretary. And the leader of the opposition knows very well that the burden that is so heavy on our shoulders to-day is the war debt. The government he supported at that time may have used one-third of that tremendous amount of money, totalling more than two billion dollars, for real war purposes; one-third was wasted, while the other third was stolen by bandits and gangsters. He knows that, but nevertheless he supported that government.


Robert James Manion: I am sony to interrupt my hon. friend but I should like to keep the record straight. I do not know anything about the matter he mentioned a moment ago, but since the hon. gentleman says so I presume it is correct, because I have great confidence in him. But I was at the front when the government was carrying on the war, and I was not supporting any government until 1918.
Bren Gun-Mr. Pouliot


Jean-François Pouliot: I thank my hon. friend for what he has just said, but coming back from the front in Europe he should have been in the front in Canada to fight such a rotten government.


An hon. MEMBER:: You did not go across.


Jean-François Pouliot: Each in turn. Now, if my memory serves me aright, in 1934 the present leader of the opposition was Minister of Railways and Canals. The hon. member for Cochrane (Mr. Bradette), who was also in the house at that time, spoke about patronage, and the leader of the opposition had to defend his own position. Here is what he said about patronage, and it is as sweet as milk and honey:
I admit frankly, however, generally speaking, that so far as the appointment of workers on works of my department in the city of Ottawa or elsewhere is concerned, we very frequently do accept the recommendations of the Conservative committee. What is the use of implying anything else, because everybody knows, as the Minister of Public Works has pointed out, that the same charge was made from our side of the house against the last government?
That was on February 16, 1934, and appears at page 651 of Hansard for that year. My hon. friend is like me; he is always sincere and honest, and he went on:
I say quite honestly and quite sincerely that there is no difference, generally speaking, between the system which obtains under this government and that which obtained under the previous one. Not only that, but I believe generally speaking there is a good deal to be said in defence of the practice. I do not mean to suggest that when a man is destitute he should not be given consideration; many of them are. Irrespective of a committee in this city I have on a number of occasions given positions to men who, it was represented to me, were in destitute circumstances.
I pay tribute to his good heart on those occasions, but this reminds me of the overture to a famous opera, I think it is Tann-hauser. I am not sure about that, because I am not strong on music, but I remember how the voices of good and evil are heard at the same time. My hon. friend heard the voice of good that was in his own conscience and his Own heart, but at the same time he was listening to the voices of those around him who were seeking patronage. Then, as he defined it at page 658 of Hansard for yesterday, patronage consists of choosing one man in this country while other industrial people are ignored, giving this man contracts totalling several millions of dollars. I will not say that he has always given contracts involving such sums, but I should like to mention here one instance out of thousands that could be mentioned. My hon. friend remembers when 
his leader, the lamented Mr. Bennett, gave a contract to the Foundation. Company for 82,000,000 at Saint John, New Brunswick, without calling for tenders. I hope if the public accounts committee investigates the Bren gun contract it will get down to real business and investigate the awarding of that contract as well. That is one case; I could give others. Then I quote again from page 651 of Hansard for 1934:
That often occurs, I have not any doubt, in the Department of Public Works, my own department and in others. But, generally speaking-
Mark this.
-generally speaking, it is obvious that the government in power, whether it be Liberal, Conservative or even a government of my hon. friends in the corner-when, a thousand years from now, they gain power-will probably do likewise. It will naturally give consideration to its friends. I do not think any just criticism can be levelled at that.
This is for patronage. But there is something more, Mr. Speaker-something that astounded me. We have discussed-not I, but hon. members opposite-the Bren contract, without ever seeing it. That is incredible. In fact several members from both sides of the house spoke yesterday and I shall deal with them in turn afterwards. At page 695 of Hansard I see the following:
Mr. Stewart: Mr. Speaker, might I ask the Prime Minister or the Minister of National Defence to lay on the table a copy of the Bren gun contract?
Mr. Mackenzie (Vancouver): That was done on June 29 of last year, but if the clerk is not seized of it I would be most happy to get a copy or two for my hon. friend.
At noon to-day I phoned downstairs to get that very contract, and I was told that it had been gone for half an hour. Therefore all the hon. members who spoke on the Bren contract never read it.


Mr. MASSEY:: It was tabled last year.


Jean-François Pouliot: I take the word of the hon. member, but I wonder if he stayed long enough after the session to study it. And besides that, he is not a lawyer, and he has no authority to discuss the legal side of any contract-although he will.


Denton Massey: Then my hon. friend has no right to discuss the engineering.


Mr. WOODSWORTH:: The hon. member has just made the statement that no one had read the contract. I say it is not right that all the hon. members who have spoken in the debate should be charged with not having read the contract. It was open to all of us; it was available to all.

Bren Oun-Mr. Pouliot


Jean-François Pouliot: It was open to all hon. members, but it was locked in that room downstairs, according to the statement I had at twelve o'clock to-day. No one got it until eleven-thirty. Who got it I do not know. But perhaps they are mind readers and can read a contract that is in a steel locker.


James Shaver Woodsworth: Mr. Speaker, as one who spoke, and as one who is concerned with this thing, I had access to the document some days ago and took my quotations from it. I think it is unfair for the hon. member to cast aspersions on hon. members who have spoken.


Jean-François Pouliot: The hon. member for Winnipeg North Centre (Mr. Woodsworth) knows very well that I would not cast aspersions upon him. I take what he says. If he did that, and if the hon. member for Vancouver North (Mr. MacNeil), who has just risen in his seat, has read the contract, then they are the only two who have.


Denton Massey: Oh, no; not at all.


Jean-François Pouliot: Now, leaving aside the legal side of the contract-


Denton Massey: Mr. Speaker, I demand that the hon. member for Temiscouata (Mr. Pouliot) withdraw that remark. I have read the contract.


Mr. MacNEIL:: I wish to inform the hon. member that I obtained from the clerk of sessional papers a copy of the contract, which is still in my possession.


Jean-François Pouliot: If my hon. friends have the contract, so much the better for them. But I regret to say that they have not understood a word of it.


Some hon. MEMBERS:: Oh, oh.


Mr. STEWART:: And you laugh at that.


Jean-François Pouliot: There is another point to consider in this matter-


Denton Massey: Mr. Speaker, no hon. member of the house-


Some hon. MEMBERS:: Order.


Denton Massey: -can make an insinuation about me-


An hon. MEMBER:: He did not insinuate.


Denton Massey: -nor can he make a direct statement involving me which is not in accordance with the facts, without withdrawing it; and I demand a withdrawal of the statement of the hon. member for Temiscouata that I have not read the report.


Jean-François Pouliot: I submit I have not anything to withdraw. The house has to decide, from the hon. member's speech, whether or not he understood it.


Denton Massey: On a point of order-


Jean-François Pouliot: Mr. Speaker-


Walter Edward Foster: The hon. member for Greenwood has the floor.


Denton Massey: The hon. member has made a statement which I demand he withdraw.


An hon. MEMBER:: What?


Denton Massey: That I have not read the contract.


Mr. LAPOINTE (Quebec East):: He has withdrawn it.


Denton Massey: Understanding has not anything to do with it; that is a matter of opinion. It was the first thing-


Jean-François Pouliot: Mr. Speaker, if I am
allowed by the house to give an expression of my views, may I say that most hon. members confuse points of order and questions of privilege. A point of order may be well taken when an hon. member uses language which is unparliamentary, and therefore an hon. member may have to withdraw any unparliamentary language. But an hon. member need not withdraw to please another hon. member. The hon. member for Greenwood is a member of the house, as I am. I state something and he denies it. The statement is there; that is enough. I did not use unparliamentary language.


Denton Massey: A minute ago the hon.
member for Temiscouata referred to the hon. members .for Winnipeg North Centre and Vancouver North, saying that these two hon. gentlemen were the only ones who spoke yesterday who had read the contract. I demand that that statement be withdrawn.


Jean-François Pouliot: And I ask you, Mr. Speaker, to tell the hon. member to keep the peace.


Robert James Manion: Mr. Speaker, on the point of order, I think the hon. member, who is an old parliamentarian, knows he must accept the statement of the hon. member.


Ernest Lapointe: He has.


Robert James Manion: When the hon. member
for Greenwood made the statement that he had read the contract, the hon. member for Temiscouata said he had not. In fact, he says none of us had. The hon. member for Greenwood says he did, and I think the hon. member for Temiscouata should accept that statement.

Bren Gun-Mr. Pouliot


Ian Alistair Mackenzie: He accepted it.


Jean-François Pouliot: The hon. member for
Greenwood reminds me of the country lawyer who was arguing a case before a judge. After he had won his case, the judge said, "Why do you argue any more?" "Oh," he said, "I have a fine speech, to please my client."


Denton Massey: Mr. Speaker, I am quite
prepared to accept the statement-in fact I am prepared to thank the hon. member for Temiscouata for insinuating that I have already won my case.


Some hon. MEMBERS:: Time.


Jean-François Pouliot: This is childish. We will continue, and talk seriously.


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


Ian Alistair Mackenzie: He has
been interrupted.


Some hon. MEMBERS:: Time! Timel


Jean-François Pouliot: By leave of the house,
may I finish?


Robert James Manion: No, no.


Ian Alistair Mackenzie: What
about interruptions?


Robert James Manion: We were not given leave
yesterday. The hon. member for Greenwood was not given leave yesterday.


Ernest Lapointe: He should not interrupt, then.


Robert James Manion: When a misconstruction
of fact is made, he has a right to interrupt.


Mr. T. C. DOUGLAS (Weybum):: Mr. Speaker, I am sure the hon. member for Temiscouata (Mr. Pouliot) will pardon me if I do not attempt to follow him in what he has been saying.


Jean-François Pouliot: You should finish my speech.


Thomas Clement (Tommy) Douglas: I am glad he gave members on the government side a good laugh. Some of them were looking as though they needed it pretty badly.


Mr. BRADETTE:: You need a laugh once in a while yourself.
Mr. DOUGLAS (Weybum),:	As the
seconder of the motion to refer the matter to the public accounts committee-


Mr. DUNNING:: And which you voted against.


Thomas Clement (Tommy) Douglas: -and as a member of the public accounts committee

I wish first of all to take issue with the speech made by the Prime Minister (Mr. Mackenzie King) last Friday when he stated, in effect, that members who expressed themselves in this debate might possibly preclude themselves from being members of the public accounts committee.


Charles Avery Dunning: He did not say that.


Thomas Clement (Tommy) Douglas: That is in
fact what it meant.


Charles Avery Dunning: No, it is not.


Thomas Clement (Tommy) Douglas: I would like to point out that at least in the last two or three years that has not been the practice. Questions have been referred to standing committees of this house after being discussed pro and con and after hon. members have expressed very definite opinions thereon. A resolution was moved in 1936 with reference to the high price of farm machinery. It was referred to the agriculture committee despite the fact that some hon. members had expressed themselves thereon. Last year and the year before a private bill having to do with small loan companies was referred to the banking and commerce committee after very strong and violent opinions had been expressed on both sides of the house. I think it should be made clear that the committee to which this matter is to be referred is not a judicial body. It is a committee of this house set up for the purpose of investigating, in this case, a contract, and to see whether or not the public interest has been properly guaranteed and the money of the taxpayers properly spent.
Last night the Minister of Agriculture (Mr. Gardiner) stated that the members of this group had voted against increased defence estimates in 1936, 1937 and 1938, and he went on to say:
Every one of these hon. members was against the expenditure of even the relatively small amount of money that was being proposed at that time. Then what was the position taken when we came to the house in 1937 and asked for 837,000,000? The attitude was exactly the same.
May I point out to the Minister of Agriculture that the members of this group stated then, and they have stated oftentimes since, that the reason they could not and would not vote for increased defence estimates was, first, that they wanted a statement of the government's foreign policy in connection with which these defence estimates would be used and, second, that they wanted a guarantee that the very things which have come to light as a result of this Bren gun inquiry would not occur in Canada. In my

Bren Gun-Mr. Douglas (Weybum)
opinion the whole Bren gun inquiry is the best vindication of our consistent opposition in this house to increased defence estimates.


Mr. McLEAN (Melfort):: That is why you are asking for the investigation?


Thomas Clement (Tommy) Douglas: May I turn to the report itself. In my opinion the full intent and purport of this report has never been appreciated. When it first came out headlines appeared in many of the newspapers. For instance, the Montreal Gazette of January 14 contained these headlines:
Bren gun contract held valid; full exoneration is given Mackenzie and Lafleche.
All charges fail.
Davis report clears everyone concerned in affair.
Ottawa is gratified.
Headlines such as these are misleading. In the first place no decision was possible with reference to the actual contract itself. I refer to page 49 of the report on which the commissioner is reported as saying:
I am unable to pass upon the substance as distinct from the form of the contract.
What the house is mainly concerned with) and what the public accounts committee will be concerned with is not whether the contract was technically legal but whether the substance of it was such as to safeguard the interests of the Canadian people. As the commissioner says:
That is a question upon which the government and parliament, in the light of the evidence brought before the commission, must pass.
The commissioner had no power to pass upon the substance of that contract; he could pass only upon its form. As has been pointed out by other hon. members-I am not going to quote this report to death-from pages 31 to 34 will be found argument in which counsel pointed out to the commissioner that he had no jurisdiction to find misconduct because no charge of misconduct had been laid. When the Prime Minister (Mr. Mackenzie King) was speaking the other day he referred at some length to the wide terms of the reference, and yet I find this at page 33 of the report:
At the noon adjournment the next day government counsel stated that they were afraid that there was not very much that they could contribute in a way of a concrete suggestion, because after all it is a very general and very indefinite subject, having regard to the terms of the order in council.
As was pointed out by one counsel, I believe Mr. Hellmuth, usually when a royal commission is set up there is provision for suggestions with regard to future conduct, but there were no such provisions in the terms of 71492-455
reference in this particular case. May I point out that the Davis commission was a factfinding body. It was not empowered to express opinions. It was not empowered to draw conclusions or to state whether one form of policy was better than another possible alternate form. What the commissioner did was to gather data, assuming throughout that the conclusions to be drawn would be drawn by parliament and by the people of Canada. There are many references to this. For instance, Mr. McRuer is reported on page 32 as having stated to the commissioner:
That is for the House of Commons. You are asked to report the facts, you are asked to report the evidence, and the opinions to be formed will be for the House of Commons, for the people at large, and for the press.
On page 35 I find the same thing. On page 50 I find these words:
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.
I submit that the statement made when this report was first published that it was a whitewash, that it exonerated everybody, was not well founded. The commissioner did what he was supposed to do. He gathered the data and he left it to this parliament, to this government and to the people of Canada to arrive at conclusions based upon the data which he had collected and verified. He assumed throughout that he was gathering the data so that someone else could formulate a conclusion. Nowhere did he attempt to formulate conclusions with reference to policy and the safeguarding of the interests of the people of Canada.
The Prime Minister said the other day that there might be some people who would think the government was right in refusing a second investigation. I am sure that those who were responsible for moving this motion had no idea of a second investigation being held-not at all. The facts have been collected. Yesterday the leader of the opposition said that there was no value in threshing over old straw and calling witnesses again. Nothing was farther from our minds. The data are there; I believe there are some thirty-four volumes of evidence. The material is at hand, but at the present time there is no one empowered to draw conclusions or pass opinions on it. That is why we are asking that the matter be referred to the public accounts committee. We believe that in such a committee conclusions may be drawn and opinions expressed as to whether or not the public interests of the people of Canada have been properly safeguarded.

Bren Gun-Mr. Douglas (Weybum)
Referring to certain speakers who had preceded him, the Minister of Agriculture made this statement, to be found at page 679 of Hansard:
They have left inferences with regard to what the contract may have in it; but I repeat that no one has risen in his place and_ told us what the terms of the contract to which they take such serious objection are.
I propose to deal with only one phase of this contract-although there are many others to which we take serious objection

namely that the giving of this contract was a departure from declared policy in two particulars. I shall deal with them in order.
First, why was there a departure from the declared government policy of manufacturing munitions in government-owned plants? Hon. members will remember that the report points out on page 5 that the original agreement between the Dominion of Canada and the patentee provided that
-such manufacture shall be in a factory operated by the government in question.
That was not done. Why was it not done? It is part of government policy, because on page 10 of the report the Minister of National Defence makes that perfectly clear. I quote:
Under examination by Mr. Hellmuth the Minister of National Defence said that he had stated in the House of Commons last year (1937) that he believed in public ownership, personally, through and through in regard to armaments; "and I still say so." Mr. Hellmuth proceeded with some questions
The answers to which I shall not bother reading, but will summarize by saying that in them the minister reiterates the view that he is in favour of the manufacture of munitions and guns in government plants.
The minister gives two reasons why there was a departure from this policy, and again I quote from page 10:
Q. So that there will be no inducement for people to make money out of necessities which arise from war?
A. Mr. Hellmuth, as a matter of an ideal objective, I completely agree with you; but you should read carefully the recommendations made by a distinguished committee to us early in 1937, in regard to ways of dealing with practical necessities of the Department of National Defence.
And the minister goes on to say:
You should read that.
That was the first reason given by the minister. I should like to refer the members to that report made to the minister in 1937. I have here a summary of it as it appears on page 2288 of the evidence. It was a committee that was set up under the chairmanship of Doctor Skelton. It was an interdepartmental committee, but we will call it

the Skelton committee in order not to confuse it with another-the other-interdepartmental committee that was set up later on. The minutes of this committee were read into the records of the commission. They begin by saying that in 1937 a resolution had appeared on the order paper of the House of Commons-the resolution happened to be my own-calling for, in the event of war, the conscription of the economic, transportation and natural resources of Canada for the duration of the war. In the minutes the committee go on to say that there is a growing opinion in Canada that steps should be taken to take the profits out of war and out of preparation for war, and in view of that the committee made a number of concrete proposals. I shall not give them all, but I should like to read one or two.
Proposal No. 6 was this:
One proposal ... to place manufacture of arms entirely in hands of state . . . the committee is unable to support such a proposal as being practicable under present conditions in Canada but there might be a case for some moderate extension of present government arsenals.
Thqn proposal No. 7:
The committee considered whether new legislation to control private profits might be attempted at this juncture, but they feel unable to suggest any specific legislative measures . . . which could be regarded as workable or effective.
In proposal No. 8 they say that the problem is an administrative one and that:
Control of profits and prevention of excesses can be most efficiently provided by appropriate administrative practice on the part of departments responsible for placing contracts and orders in defence program.
In proposal No. 9 they say that there is no hard and fast rule; that sound financial principles are proper safeguards. In proposal No. 13 are given a number of suggestions which Mr. Elliott, the income tax commissioner, had been asked to draw up, based on the experience that had been gathered during the last war. Mr. Elliott made a number of suggestions and submitted a report, and I just want to draw the attention of the house to one or two of his suggestions. One was that there should be caution to see that "share capital be not inflated by goodwill and other intangible values-that is, make certain that the value behind the share is cash or an asset having real value and paid for in cash or kind of equivalent value." He suggested also that there should be caution as regards salaries paid to executives and shareholders. Certainly these last two suggestions of Mr. Elliott have not been very closely followed.

Bren Gun-Mr. Douglas (Weybum)
I come back now to the minister's reasons. The minister says that his first reason for departing from declared government policy was the report of this committee. But this committee said that there might be room "for a moderate extension of government-owned arsenals." That was not done. Why was it not done?
The minister moves on to his second reason. He says that there were two schools of opinion in the department. He says that the chief of the general staff, General Ashton, and the former chief of the general staff, General McNaughton, had both been in favour of the manufacture of arms in government-owned arsenals, but there was another school of thought in the department that was headed by the deputy minister of national defence, which was opposed to the other. I want to quote just one sentence from a letter of the deputy minister of national defence to the under-secretary of state for external affairs. He says:
An arrangement by which the government would take over such a plant and operate the same with its own employees as if it was a government-owned plant does not particularly commend itself to the government.
Here you have in the department two points of view. You have an interdepartmental committee saying that the government-owned plant could extend on a moderate scale, and two high officers of the department, General Ashton and General McNaughton, both favouring that, and the minister pledged to it so far as his declared policy in this house is concerned; and you have the deputy minister opposed to it.
But the minister says the main reason was that they did not have any money. I read now from the bottom of page 10 of the report :
The minister said that General Ashton (the then chief of the general staff) was very insistent upon the development of government arsenals, and that the former chief of general staff, General McNaughton, evolved a very comprehensive scheme for Valcartier, which would include practically all the requirements of the Canadian forces.
Then the report goes on to quote the minister :
That was considered after I went into the department, and I found that the cost of it would be something between $30,000,000 and $35,000,000. With my meagre $25,000,000 or $30,000,000, what could I do with a scheme like that?
Then this is what the commissioner said:
But the testimony given before the commission established that only 60,000 square feet of space was necessary for the purpose of production of the 7,000 Bren guns for Canada as weli as 5,000 guns for the -war office and that an entire new building (apart from land)
would cost approximately $120,000. In proposal "B" of Major Hahn (exhibit 11) of December 29, 1936, the building was shown at an estimated cost of $104,196.40.
I submit that on the minister's own evidence, both as to the report from the Skelton committee and as to the expense involved, we have not had any satisfactory explanation why the government's declared policy of manufacturing munitions and arms in government-owned plants was not carried out.
I move to the second departure from policy. Why was there a departure from the government's declared policy of competitive bidding? In the case of the Bren contract there was, first of all, favoured treatment of one manufacturer and one company. That goes almost without saying. One individual, on the basis of a letter of introduction from a member of this house, was brought into contact with the minister and the deputy minister of national defence, was given first of all snapshots of a gun supposed to be secret and allowed to take it for examination, and was later given a letter to bring him into closer contact with the British authorities. I have no quarrel with that, but when that letter of introduction was not sufficient for him to get the contacts he required he was made a representative of the Canadian government; and from that time on it is very difficult to determine when he is a private contractor seeking a contract and when he is a government representative. It is a sort of "off again on again gone again Finnegan" combination. The most amazing thing of all is that favouritism was shown to the extent that this person -I do not know him personally and I do not cast aspersions upon him; I am dealing with the government, because they are the responsible parties-who was given preferred and favoured treatment throughout, submits expense accounts for work done which in the main was being done in order to procure contracts for himself and the firm of which he was president.
At page 2200 of the evidence I find that there were vouchers of claims up to 820,000 submitted by the John Inglis Company. On October 9. 1936 there is an item of $79.95 and a charge for Major Hahn of $50. This question is put to the deputy minister:
Q. Is this the same day on which Major Hahn called at your office and saw the Bren gun set up?
A. Yes.
Here we have an account for a man calling at the office of the deputy minister to get an entree into the munitions business. An account was submitted 1 In the same evidence, under exhibit 262, there is a charge

Bren Gun-Mr. Douglas (Weybum)
of $326.80 between March 14 and March 18, 1938, account rendered for expenses incurred while being at Ottawa to get a contract out of which he was to make a living.
I submit that any group of fair-minded people would say that this was preferred and favoured treatment. No one else in Canada in that business got treatment like that. And may I point out that there was no bidding. No one else was informed that the government intended to go into the manufacturing of Bren machine guns. I refer the house to page 29 of the report. The Minister of National Defence is being questioned by Mr. Hellmuth. I quote:
Q. There was never the slightest etfort, was there, to interest or invite any of these firms to tender, or to make an offer to manufacture the Bren gun?
A. No, I do not think there was.
No one was informed; and yet we find on page 8 this question put by Mr. Hellmuth:
Q. You did not give anybody else a chance?
A. Nobody asked for it.
Well, no one could ask for a chance when no one knew that the government had in mind the manufacture of these guns, according to the minister's own statement. I wonder if the minister honestly meant a statement like that, that nobody had asked for a chance. Are we to assume that from now on all companies in Canada who have facilities for manufacturing munitions are to come once a month or once a week or every day, up to this house and to ask, "Are you manufacturing Bren guns to-day?" Is it to be a sort of Fuller brush pedlar idea? Nobody asked for it! They could not ask when the government had not announced their intention of manufacturing these guns.
It is sometimes said that no one else could make these guns. That was said so often that finally the commissioner began to lose his patience, and on page 1949 of the evidence he said. "Don't be talking to me about one source of supply. I do not want to hear it again. It is ridiculous." Of course it was ridiculous.
I might point-out that the objections I am stating to the fact that there was no bidding did not come only from outside the government. There were serious objections among the officials comprising the interdepartmental committee set up by the Prime Minister to investigate the matter. I refer now to the evidence at page 1948. This is from the minutes of the interdepartmental committee set up to act in conjunction with the depart-
ment of National Defence in giving munitions contracts, and this is what the deputy minister of finance had to say. I am quoting from page 1948:
Doctor Clark then stated that his only objection to entering into a contract with the John Inglis Company was the fact that competitive tendering had not been entered into by three or four other companies capable of manufacturing guns, explaining that he could not, as a member of the committee, take responsibility for the way in which this particular company was selected.
That is pretty strong language. The deputy minister of finance, Doctor Clark, one of the ablest economists in Canada, said that he could not take responsibility for the manner in which this business was being handled because there was no competitive bidding. Now I submit that the government have a right to tell us, and to tell the public accounts committee, why no tenders were called for. We have a right to know whether the situation was carefully canvassed with reference to all outside manufacturers of munitions, in order to ensure that the taxpayers were getting full value for their money. We have a right to know why an objection made by perhaps the ablest business man on the interdepartmental committee was overruled and ignored. We have a right to that knowledge.
I wish to call the attention of the house to this fact, with reference to the officials concerned on the interdepartmental committee, that on two scores their desires and their opinions were either ignored or overruled. As I have said, the committee is on record as in favour of a somewhat moderate extension of the present government arsenals. I refer the house to page 2288. General McNaughton and General Ashton were in favour of it. The government is on record in this house as being in favour of it, and the only person on record as not in favour of the manufacturing of guns in government plants is the deputy minister of national defence. And yet, in spite of that, there was no attempt to carry out the declared policy of manufacturing in government-owned plants.
The officials on the interdepartmental committee were in favour of competitive bidding. They could see no reason why the Inglis company should receive preferred treatment.
I quote from page 37 of the report, where there is a reference to the testimony of Mr. Elliott:
Mr. Elliott, in giving his testimony, said that after the chairman (the deputy minister) had opened the meeting with a general statement indicating the purposes for which the meeting was called the committee began to take an active part in the sense of asking

Bren Gun-Mr. Douglas (Weybum)
questions, and getting to grips with the problem. In so doing the committee indicated that competitive bids should be one of the main considerations, and one of the first considerations.	,
And the deputy minister explained that this could not be done. Why? Again I quote Mr. Elliott, page 39. He said that-
-in discussing the financial status of the company, the history of the John Inglis Company was adequately disclosed to the chairman-[DOT]
That is the deputy minister.

namely, the essential point being that it was known that it had been in receivership.
Mr. Elliott continued:
The chairman indicated that he had an understanding-exactly how it was acquired I do not know-from England, that they would not deal with any other firm.
Pressed as to exactly what was said, Mr. Elliott put it this way:
I said as a statement of fact that the chairman stated to us that he believed, or he was of the opinion, whichever way you wish to put it-he believed that England would not place the contract with any other company in Canada.
That was a serious statement. The interdepartmental committee were apparently not very well satisfied.
Mr. Elliott said that the suggestion was then made that a cable be sent to England to ascertain definitely England's position in respect of competitive bids.
The chairman pointed out that to ask such a question at this juncture might endanger the placing of the British order, and endanger thereby the loss which he obviously was anxious to save Canada in the cost of_ the machinery and equipment. The committee nevertheless did not take such notice of that opinion as to withdraw their desire to have the cable sent. They were willing to risk the danger. The form of the cable was then drafted.
The deputy minister (but not without the subsequent approval of the committee) amended their draft cable before it was sent (exhibit 188). Moreover, the deputy minister sent a very long cable himself at the same time to the war office.
In order to keep the record straight I want to say something about these cables. I have copies of them here. I have the cable that was sent by the interdepartmental committee after it had been altered by the deputy minister, of course with the sanction and approval of the committee. It is found at page 1578 of the evidence. It is as follows: Kindly advise by cable production cost in England' of Bren light machine gun specifying which major cost factors have been taken into account and given percentage of each cost factor to the whole. Also the production schedule to which the figures apply. If exact figures are not available close approximation would be much appreciated. This suggestion
on agenda discussed to-day by interdepartmental committee when advisability of obtaining tenders on cost plus basis from limited number of selected companies including John Inglis Company was considered. 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 . . . interdepartmental committee which is working on proposed contract.
I would draw the attention of the house to the words that were inserted at the instance of the deputy minister of national defence: "from limited number of selected companies including John Inglis Company"; also: "It is private and not public tender that is intended."
I have here the reply of the war office and also the private cable sent by the deputy minister of national defence to the war office to explain the one that had been sent by the interdepartmental committee. And I have the reply that came back to the deputy minister from the war office. My time is getting short, so perhaps I cannot read it, but after very carefully reading these cables from beginning to end I defy any hon. member to find any indication that the war office stated at any time that they were not willing to deal with any company other than the John Inglis Company.
On the basis of that statement and of his insistence the deputy minister either ignored or overruled the two wishes expressed by the interdepartmental committee; one for a moderate extension of government-owned arsenals, and the other for the principle of competitive bidding.
What was done about this other statement of Doctor Clark? I quote from page 1949 of the evidence:
The Chairman-
That is, the deputy minister.
___reminded the members that on a previous
occasion the precise question came up as to whose responsibility it was for picking a likely firm to manufacture the gun, and at that time, some six months ago, he told the committee that his department would have to take the responsibility.
At page 1952, in reference to Doctor Clark, the minutes say:
He stated that he wished it understood by the public and the government that the committee had reviewed the financial aspects of contracts such as this, and considered them fair and reasonable-
I am quoting now the statement of Doctor Clark.
-but in this contract he stated that he would not say that they are.

Bren Gun-Mr. Douglas (Weyburn)
And what happened? The chairman, that is the deputy minister of national defence-[DOT]
then explained that the wording of the report to council was not such as to involve the members of the committee in matters of choice. . . .
What was this committe set up for? When they had finally come to certain conclusions and the deputy minister of finance said he would not accept responsibility for this method of selection, that he did not think it a good business arrangement, the deputy minister of national defence overruled him and said that his department would have to accept the responsibility and that the members of the interdepartmental committee had no power of choice. What power had they?
One thing more. Was any report ever made by this interdepartmental committee to the government? I have here in the evidence the statement made by the Minister of National Defence himself, as found at page 2364, where he says:
The only report I ever received was from the deputy minister who was chairman of the interdepartmental committee.
And that was a verbal report. He never had a brief from the committee. That interdepartmental committee was set up by the government to safeguard the interests of the people of Canada. Did the Prime Minister ever get a report? Did the Minister of Finance ever get a report? No. But his deputy minister had objected to this contract as an unbusinesslike arrangement. Did other members of the cabinet know that perhaps the finest financial mind among the government's officials objected to this method of selecting the company? Of course they did not. I doubt if the Minister of National Defence himself knew it; all he knew about was the verbal report given to him by the chairman of the committee, the deputy minister of national defence, who throughout the sittings of this committee had ignored and overruled the opinions expressed by members of that committee.


Walter Edward Foster: Order. I regret to interrupt the hon. member but I have to inform him that his time has expired.


Henry Herbert Stevens: We are discussing a motion by the hon. member for Vancouver North (Mr. MacNeil) to refer what is known as the Bren gun agreement to the standing committee on public accounts. It will be noticed that no instructions are included in this motion. I propose, before I take my seat, to suggest an amendment which I hope will be acceptable to the house. What I shall say this afternoon will TMr. T. C. Douglas.]
be uttered in as dispassionate a manner as possible. I should like to discuss the question frankly and in a way to appeal to the good judgment of the government themselves and hon. members of the house. Obviously I cannot cover all the ground, or any very large portion of it, in the time available to me; so I am not contending that my argument to-day will be a complete argument of the case. I should like to base what I have to say upon a paragraph which will be found on page 50 of the report of the royal commission on the Bren gun contract, and which has already been referred to by a number of speakers. There, referring to the question whether an article should be manufactured by the government or by private interests, the learned judge says:
. . . 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.
As far as I am concerned as a member of this house I accept my own responsibility to review this situation, as advised or suggested by the learned judge who presided over that commission.
Before discussing the contract, which I propose to do, I should like to make a brief reference to the statement of the Prime Minister (Mr. Mackenzie King), that in submitting the reference to Mr. Justice Davis, the commissioner, he enclosed in his letter a press release; and the right hon. gentleman suggested, as I certainly inferred, that he thought this was quite sufficient. I am not quarreling with him in that regard, Mr. Speaker, but another press release was given out from the Prime Minister's office at the conclusion of the inquiry. That second release was sent throughout the length and breadth of Canada; the general headline based upon the wording of that release was the term "exoneration." w'ith the inference that everything connected with the Bren gun contract had been satisfactorily explained to the commissioner.


William Lyon Mackenzie King: May I say that my hon. friend is entirely wrong. There was no press release sent out from my office at the end of the inquiry. I want to make that emphatically clear; there was nothing authorized, directly or indirectly. The only statement that went from my office was that the report was in my hands and that no one had seen it.

Bren Gun-Mr. Stevens


Henry Herbert Stevens: I accept the right hon. gentleman's word unreservedly, but in justice to myself I must say I was told that the dispatch carried by the Canadian Press was handed to them by the private secretary of the Prime Minister. I may be wrong.


William Lyon Mackenzie King: That is absolutely wrong.


Henry Herbert Stevens: I accept the Prime Minister's statement.


William Lyon Mackenzie King: I can assure my hon. friend and the house that no statement was given by me or any of my secretaries.


Henry Herbert Stevens: It would be interesting, I think, to know where that statement came from. It came from some source associated with the government. The question, however, I was going to ask was:	When that
latter release to the press was given out, wherever it came from, was it first submitted to the learned judge who presided over this commission, in regard to its accuracy or its harmony with his findings? I doubt whether it was.


William Lyon Mackenzie King: I do not want to interrupt my hon. friend too often


Henry Herbert Stevens: I have accepted my right hon. friend's explanation without reserve.


William Lyon Mackenzie King: The point I want to bring out is this: For myself I could never see that there was any authority for that statement from any source. Such reports as appeared seemed to me to be something that some member of the press itself had sent out, without authority from any source.


Henry Herbert Stevens: I shall check the source of my information, but of course in the meantime I accept the right hon. gentleman's word on the matter without reserve.
Conditions in Canada in regard to defence have been represented as serious, and this year we are asked to vote $63,000,000 for the purpose of defence. What we are doing in this contract is initiating a practice. We are laying the foundation of a practice to be followed in the expenditure of this huge sum of money. If this contract and its method, style, form and nature are now approved and accepted, then we can take it that, in the expenditure of that part of this $63,000,000 which goes to this class of work, the same sort of policy will be followed. Therefore in my opinion it is extremely important that we, the houses of parliament, should be satisfied with the basis on which we are now entering upon a huge expenditure which may 71492-46
be followed in subsequent years by still further expenditures, since this is a ten year-contract.


Ian Alistair Mackenzie: No.


Henry Herbert Stevens: I am coming to that, if my hon. friend will permit me. If that be so, it means that in future years we are going to follow the same practice we are here following. I mention that merely because it emphasizes the importance of this contract.
There are three ways in which we could approach this great, serious task, which on several occasions the right hon. Prime Minister has indicated he considers a very onerous and grave responsibility. There is government production; there is contract by tender, or there is the cost-plus basis with a selected contractor. These are three methods; there may be others that modify them to a certain extent. I want to get to the contract itself; so I am not going to take time just now to argue as to the advisability of public production. Let us assume that we are going to accept the principle of production by private concerns. In that case I submit, and if time permitted I think I could demonstrate fully, that it would be infinitely preferable to place this or similar orders with a number of firms qualified to do the work.
Let me just indicate briefly, by way of illustration, what I mean. I am not a technician, so I may speak rather recklessly in this regard; but I understand that in a gun of this kind there is the tripod, or whatever the thing rests upon; there is the rough frame of the gun, what might be called the stock, and then there is the barrel, which is a comparatively simple article to manufacture. Then somewhere in that gun, as in all weapons of this kind, there are some intricate parts which must be manufactured. There would be no difficulty in giving to certain firms orders for barrels and to other firms orders for tripods or frames. These are simple articles. Of course they must be made right, but there are scores of firms who could manufacture that sort of thing. Then you come to the intricate part, which I am told calls for perhaps fifty, seventy-five or one hundred gauges, the most delicate instruments it is possible to procure. I am told that in some forms of production over a hundred, and perhaps two hundred, gauges may be required for different parts which are of an exceedingly delicate nature.


Ian Alistair Mackenzie: More than that; three hundred and ten, if I am not mistaken.


Henry Herbert Stevens: In any case my hon. friend will agree that it is an extremely delicate

Bren Gun-Mr. Stevens

process. Great care should be taken, in dealing with this part of the .work, to select a firm that not only is organized to-day to do this class of work but also has a staff accustomed to it, such as superintendents, foremen of machine shops or portions of machine shops and experts of that kind, of course over and above the experts who understand the complete article. I submit that we might have borrowed from the old country-


Ian Alistair Mackenzie: We have; three of them.


Henry Herbert Stevens: Very good-experts who would advise with those who are competent to carry on this work. But my point is that, with the utmost respect and consideration for the group who secured this contract, it cannot be argued for one moment that they had any organization. They had no organization, whereas on the other hand we might have gone to one of a dozen firms in this country whom I could name, who are engaged in precision tool work of some kind, who have the experts, who, under the leadership of the ordnance experts brought from the old country, could have taken up this matter very quickly and readily, and who have the organization and the nuclei at least of a plant for the purpose.
It is said that this is a good contract. Well, I have read over the contract, and I think it is a good contract-


Some hon. MEMBERS:: Hear, hear.


Henry Herbert Stevens: -for the contractor.


Some hon. MEMBERS:: Hear, hear.


An hon. MEMBER:: Too soon.


Henry Herbert Stevens: And I will point out why. In making that statement I am not casting any reflection upon the contractor. His business was through his solicitors, and it is com-lucn knowledge that a man will get the best contract he can. I have read the contract with care, and I believe it is an excellently drawn contract, for the contractor. In some respects of course it protects the interests of the government. That we would expect. But I believe I shall show, before I take my seat, that there are provisions in the contract which are at least questionable-I shall just put it in that way.
The Minister of Agriculture (Mr. Gardiner), who spoke yesterday on behalf of the government, suggested that nothing had been said against this contract by Colonel Drew; that nothing had been said against it before the commission by any witness-in brief that nothing had been said against the contract. I shall suggest a few things-and

the minister invited us to make suggestions- which I think should make us pause before we sanction or place the approval of parliament on the Bren contract.
In the first place it is a contract giving a licence for ten years. The contract states:
The terms of this licence shall be for a period of ten years from the date hereof.
And then it says that the terms of this licence may be renewed or extended for a further period of ten years. It may be argued that the licence is not an exclusive licence- and, by the terms of the contract, that is true. But it would be hard to persuade me, when I read the whole contract, that it is not intended to be what is virtually an exclusive licence. Or, I will go farther:	If
under the terms of the contract the government, as they are bound to do, supply all the machinery for the production of the gun- and those are virtually the terms of the contract-how on earth could anyone else get into the game, after the manufacturing gets under way? How could that be done, unless the government repeats, with a second licencee, the same thing they did for the original licencee? So, whether or not the licence is exclusive in its terms, it is exclusive in its nature, and in the facts surrounding it. That is my first objection.
My second objection lies in the following:
The party of the second part-
That is the company; really it is Major Hahn.
-undertakes and agrees with the party of the first part to manufacture 7,000 of the said Bren gun, as defined in schedule 1.
And then it says:
There will be installed in the buildings made available by the party of the second part the machinery, tools, dies, jigs and gauges necessary for the manufacture of the said Bren gun, in accordance with exhibit A attached and forming part of these presents, it being expressly agreed that the machinery therein mentioned when so installed shall be capable-
Mark these words:
-of being utilized to produce Enfield rifles, pistols and other small arms as well as parts and components thereof.
Obviously the contract contemplates its extension to include the manufacture of articles other than Bren guns, or that language would not be in there.


Ian Alistair Mackenzie: Not
necessarily.


Henry Herbert Stevens: Again I agree with the
minister. But with an exclusive contract financed by the government of Canada and with machinery supplied by the government of Canada-

Bren Gun-Mr. Stevens


Ian Alistair Mackenzie: And
Great Britain.


Henry Herbert Stevens: -surely it is not going
to be suggested that in connection with a company equipped, as they say it must be- it is obligatory on the contractor-to manufacture Enfield rifles and pistols, no one contemplates giving them that work to do. Is the government going to set up another manufacturer, in the same way? Not at all. The minister knows that once the contract was running smoothly-and it would have been, had we not interfered-there would have been an extension of the contract to these other lines.
I may say it was the talk around Ottawa last May and June that this firm was on the way to being a real munitions producer and was going to get other work.


Ian Alistair Mackenzie: On a
point 'of order, the minister knows nothing of the kind. There have been no obligations, nor has there been any permission of any kind whatsoever given, with reference to this firm, in regard to any other contract.


Henry Herbert Stevens: Delete that clause from
the contract, then; it is not necessary. Let us delete it. I object to the contract because that clause appears in it.
Then the next point:
As compensation for the said machinery, tools, dies, jigs, gauges-[DOT]
And so on.
-the party of the first part shall pay to the party of the second part an amount computed on a basis of two-thirds of that set out hereunder, of which the said two-thirds shall be payable by the said party of the first part in the manner hereunder set forth-
This point has already been dealt with by the hon. member for Weyburn (Mr. Douglas).
1. A sum not exceeding $20,000, in respect of actual cost of preliminary investigation. . . .
I object to that, and I will point out why. There is not a manufacturing concern in Canada which does not at times come to Ottawa. It is open to any manufacturing concern in Canada to come to Ottawa, as they do by doaens, always paying their own expenses. They consider such expenses out-of-pocket, day-to-day expenditures incidental to business. It is absurd for the taxpayers of this country to be asked to pay S20.000 for "planning and engineering" services, entirely apart from the contract. That is important, and is another of my objections.


Ian Alistair Mackenzie: Did the
hon. member read the evidence in regard to that?
71492-46J


Henry Herbert Stevens: I have read the evidence.


Ian Alistair Mackenzie: What
was it?


Henry Herbert Stevens: Well, Mr. Speaker, I
have only forty minutes in which to speak.


Ian Alistair Mackenzie: I am
sorry.


Henry Herbert Stevens: I do not mind being
interrupted, but I do wish to do the job the Minister of Agriculture, or some other member, invited me to do. I have read the evidence. But I say I object to that provision, because I think it is unreasonable. I think it is unfair to the government. It is something which is not done commonly in connection with business of this kind.


Ian Alistair Mackenzie: It has
not been done.


Henry Herbert Stevens: No, I would not be surprised if this sum were not paid; and I would say the minister should be commended if, after this exposure of the matter, it should not now be paid.


Ian Alistair Mackenzie: The suggestion never came from me.


Henry Herbert Stevens: It is in the contract, and I am bound by-


Ian Alistair Mackenzie: The suggestion never came from the Canadian government, either.


Henry Herbert Stevens: There are in the contract many things which I certainly hope were not suggested by the Canadian government.
But let us go on.
2. The actual cost to the party of the second part of such machinery, tools, dies, jigs and gauges as it procures from outside sources.
I am not taking great objections to that, so long as the principle I have indicated is adopted. Then:
The actual cost-
And I am reading this for a purpose.
-to the party of the second part of such machinery, tools, dies, jigs and gauges as it manufactures.
And then comes this:
Such other costs, as are set out in section 5 of this agreement, as are properly chargeable under this contract in the fulfilment by the party of the second part of its obligations up to date of commencement of manufacture of the Bren gun.
That is one of those omnibus clauses which allow a contractor to work in what we commonly call, in government contracts, overages.
71C
Bren Gun-Mr. Stevens


Ian Alistair Mackenzie: Not
necessarily.


Henry Herbert Stevens: 
Ian Alistair Mackenzie: That is the British practice.


Henry Herbert Stevens: I do not care whether it is the British practice or not; I object to it. Here is another point to which I object:
The party of the first part shall also pay the cost of such conversion of the plant of the party of the second part as is in the opinion of the party of the first part necessary or advisable in making the said plant suitable for the carrying out of the terms of this contract but no such cost shall be repaid to the party of the second part, except such as has been given prior approval by the party of the first part.
It may be argued quite properly that this is a fair clause, but my point is that it was represented that this firm or this group of individuals had a number of plants equipped for this purpose. It was stated in 1936 that there were a number of plants equipped for this purpose, but here in 1938 we are agreeing under a contract to pay all the costs of equipping and converting this plant. I should like to quote from a letter of October 20, 1936, from the deputy minister of national defence to the under secretary of state for external affairs. This letter appears on page 20 of this report, and I quote as follows:
-and representing a reliable group which controls certain manufacturing plants-
Plural.
-capable of manufacturing armaments and munitions located in a large industrial centre.
By no stretch of the imagination can it be said that this plant was capable of manufacturing munitions.


Mr. GARDINER:: Did they not do it during the last war?


Henry Herbert Stevens: The minister asks, did we do it in the last war?
fMr. Stevens.]


James Garfield Gardiner: No, this plant.


Ian Alistair Mackenzie: Does
the hon. member know anything of its
record?


Henry Herbert Stevens: I know the record of the plant and I knew the late Mr. Inglis quite well. It is a splendid company, but it is not equipped for the manufacture of munitions of this kind.


Ian Alistair Mackenzie: Why
not? Does my hon. friend know anything of the record of this company during the late war?


Henry Herbert Stevens: They manufactured shells and other kinds of munitions, but they did not manufacture this gun.


James Garfield Gardiner: What the hon. member has just read does not mention the Bren gun; it refers only to the manufacture of munitions and armaments.


Henry Herbert Stevens: The people of Canada are to pay the total cost of converting this plant into a munitions plant. I pointed out further that the group which got this contract represented that they had a plant suitable for the manufacture of munitions. The next point to which I object is this:
The party of the first part shall pay the cost of dismantling and moving the same as well as the cost of replacing in its original condition, subject to reasonable wear and tear, such property of the party of the second part as has been originally moved or shifted by reason of the installation in the plant of the party of the second part.
That may be considered a normal clause to have in a contract provided you accept the principle that you are going to take a plant not suitable for manufacturing munitions and convert it at public expense into one suitable for that purpose. If you accept that position then you must accept the position of replacing it in its original condition if the contract is cancelled. But I object to that particular part of the contract. Reference is made to the price of the said Bren gun and spare parts thereof as ordered by the party of the first part, but I cannot cover all this long list. I shall, however, cover a few to which I take exception. One clause reads:
(a) The sum of all costs, as hereinafter defined, properly incurred in connection with the manufacture of the said Bren gun and spare or component parts thereof.
Then the contract enumerates certain exemptions such as sales tax, royalties, licensing fees and, mark you, interest on bank loans. That is covered by paragraph four of subsection (a)

Bren Gun-Mr. Stevens
of section four. Then on page ten of the contract we find a clause dealing with interest on bank loans which reads:
Interest on bank loans raised by the party of the second part for the purpose of providing any additional plant which may be required and approved by the party of the first part.
First, it exempts interest on bank loans, and then this clause is included. I object to the apparent contradiction, not to say deception, in those two clauses. Then it goes on:
It being expressly agreed that the total amount payable under this clause and under section 3 (e)	(5) of this contract shall not
exceed the sum of two hundred and sixty-seven thousand dollars ($267,000) in respect of seven thousand (7,000) guns as defined in schedule 1 attached hereto.
It has been emphasized over and over again that a limitation is placed upon the profits of this company, that limit being put strictly at $267,000. The house will notice a qualifying phrase in section 3 (e) (5). In other words, it exempts from this limitation that section to which I have already referred, namely, section 3 (g) which deals with the cost of dismantling and depreciation, which are exempted. The limitation does not protect the country against additional expenditures in connection with those operations. Here again I object to the form of the contract.
I turn now to later clauses in the contract dealing with depreciation in the value of the buildings. The contract states:
The annual rates of depreciation to be allowed shall be 2J per cent on brick or stone buildings, five per cent on wooden buildings, and ten per cent on machinery, other than on machinery referred to in section 3 hereof.
There is already included in the contract wear and tear brought about by manufacturing the gun. Anyone who knows anything about industrial plants and the setting up of depreciation accounts in the operation of a plant, knows that when a plant is in operation it is maintained. This plant is to be maintained throughout the whole term of the contract at the cost of the people of Canada. Yet in addition to that, depreciation such as I have mentioned, particularly ten per cent on the machinery, is to be allowed. Wear and tear, lubrication and other things are provided for in the contract; we are paying for renewal and maintenance, and in addition we are to pay ten per cent depreciation on machinery.
My time is almost exhausted, and I come now to one point that I desire to make. In the schedule, named exhibit D, we have an extraordinary statement:
Schedule of deliveries from date of execution and delivery of the attached agreement:
24th-36th month inclusive, 1,000 guns-
That is, three years from last March,
1.000 guns; next, four years from last March,
3.000 guns; next, five years from last March,
6.000	guns; and next, five and a half years from last March, 2,000 guns. In other words, Mr. Speaker, we are told that the reason why this contract was made was the pressure of time, the immediate need, the danger, and here we have the first gun coming in three years after the signing of the contract-no, the first 1,000 guns are to be delivered three years after the signing of the contract.
Mr. MACKENZIE (Vancouver:) Will my hon. friend compare that with the record of any other country?


Henry Herbert Stevens: Here are the facts. The minister may in his own mind justify it, but I am questioning it.


Mr. SLAGHT:: The statement of the hon. gentleman is inaccurate, and he ought to withdraw it and read the contract. Three years, he said, before the first gun is to be delivered.


Henry Herbert Stevens: I corrected that, and said
1.000	guns to be delivered within the three years.


Arthur Graeme Slaght: No; 1,000 to be delivered within twenty-four to thirty-six months. Read the contract.


Henry Herbert Stevens: That is three years. I read exactly what is here: 1,000 guns to be delivered twenty-four to thirty-six months after the signing of this contract. Make whatever you like of it.
My time is almost gone, and I should just like to make this observation in the few minutes remaining before I read my amendment.
I think the contract is an improvident one. I want to say this to the Prime Minister: I am not at all disposed to attack the good faith of the minister or his staff; but I do say that the record of the evidence, of the interdepartmental committee, and the observations of the learned judge who drew up that report, must raise in the minds of anyone who will read it grave doubts as to the wisdom of this contract. I have gone through it myself with some care. I have touched hastily on only a few points in connection with it. My opinion is that this contract should be cancelled; we can pay the necessary compensation that might be warranted, and then let us start this big expenditure of $63,000,000 on a sound basis. This contract is the most unfortunate basis from which Canada could possibly launch forth upon an expenditure of $63,000,000.
Bren Gun-Mr. Stevens

One reason why we do not approve of this matter going to the public accounts committee as proposed by the motion, is that there are no instructions given to the committee. The matter simply goes to the public accounts committee, and we all know what happens in committees. It is extremely difficult, with one party having an overwhelming majority on the committee, to get an impartial discussion. This house is the place in which the discussion should take place.


Ian Alistair Mackenzie: You are having it now.


Henry Herbert Stevens: We are having it now.
I come now to my amendment, and I am sure the Minister of National Defence will welcome this. We think this amendment is preferable to the motion because it lays on parliament all the responsibility, and we want to say to those who proposed the motion, in perfectly good faith, that while we do not wish the matter to go to the public accounts committee, we shall certainly support the motion for sending it there if all our efforts to get the matter dealt with on the floor of this house are defeated. We want to make that very clear. All the essential facts are before parliament. Everything we can possibly ask for is in the evidence and in the report, and so I now move, Mr. Speaker seconded by the hon. member for St. Antoine-Westmount (Mr. White):
That all the words after the word "to" in the fourth line thereof be struck out and the following substituted therefor:
"The committee of the whole house, with instructions that the committee consider the advisability of cancelling the said contract."
The amendment seems to arouse the mirth of the Minister of Finance (Mr. Dunning). Apparently he does not agree with his deputy on this matter. The motion, Mr. Speaker, will then read:
That the agreement 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 committee of the whole house with instructions that the committee consider the advisability of cancelling the said contract.
I submit, Mr. Speaker, that this amendment is properly discharging the responsibility placed upon parliament by the learned judge who presided over the royal commission.


Arthur Graeme Slaght: Mr. Speaker, I refrained from participating in the debate on the address, feeling that the wealth of numbers and material from all quarters of the house had made a sufficient contribution to the discussion at that stage; and having so refrained, I desire the house to know that

I expect to be able to represent the views of my riding of Parry Sound from time to time as specific matters come before us.
Not having addressed the house before this session, may I crave its indulgence to digress for one moment to pay a tribute to the hon. leader of his majesty's opposition in this house (Mr. Manion). I have not had the privilege of knowing him intimately for very long, but I may say that he has a personality which has entirely captured me so far as his demeanour, his sense of humour, and all those good qualities we like to find in our fellow-man are concerned. If during the course of my remarks in this debate I find it necessary to criticize his public utterances and conduct and to refer, perhaps shortly, to some doctrine that he has laid down in the book which he wrote for the guidance of the people with regard to the vilification of public men in public office and with regard to other topics that seem to me apropos to this debate, he will understand, I know, that there is nothing personal in what I say but that it is his public utterances and his public desire to instruct the people of Canada with which I quarrel.
We find ourselves, Mr. Speaker, engaged in a serious debate. Being, I find, a member of the public accounts committee, I shall, in reviewing now some phases of this question, endeavour so far as possible not to pass final judgment upon the contract under review, and not to pass final judgment upon the report of the Hon. Mr. Justice Davis, which has been so much-discussed. But I do propose to endeavour to have the members of this house and incidentally the people of Canada, understand the genesis and the raison d'etre of the fuss that has been raised in its various forums and the history with regard to the contract for the manufacture of Bren guns.
I propose to charge the young man who wrote this article with having done so for a purely political, partisan purpose. I propose to take this house, if I may, to a convention room in the Royal York hotel on November 9 and to quote a statement made by the young gentleman in bidding for the leadership of his provincial party, a statement he made with reference to this matter which will stamp him in language that I would refrain from using. I propose then to deal very shortly with the course adopted before the royal commission, and then, if time permits, with the. course adopted by the hon. gentlemen who occupy the front benches opposite, and who have made such eloquent speeches in denunciation of our beloved Minister of National Defence of Canada (Mr. Mackenzie).
Let me first make reference to some pages of what I regard as a most entertaining and

Bren Gun-Mr. Slaght
delightful book. I regret that my hon. friend opposite who wrote it, in addition to his ripe and wide experience in many phases of life, had not had the privilege of spending ten years of his life, as I did of mine, with the miners and prospectors of northern Ontario. If anything could have widened his experience and improved his book it would have been that. An interesting topic which the leader of the opposition purports to deal with for the instruction of his readers is found at pages 271 and 272 where he deals with the vilification of public men. At page 271 he points his thesis by writing of an experience. Let me read what he says:
On one occasion many years ago, while idling in the smoking room of a pullman car, I listened to a conversation in which politicians were roundly condemned for their "grafting and crookedness," the critics not being aware that a member of the house was among them. Getting tired of their criticism X turned to the loudest among them and said.
"I happen to come from Ottawa;-know many members very well-and am convinced that as a class they are as honest as other men. Would you mind telling me upon what you base your statements that members of parliament are grafters and crooks?"	.
"I am sorry, sir," he replied apologetically, "but I have nothing whatever to base them upon. I have heard others say the same thing, and was merely repeating their statements."
Upon such gossip does reputation often founder! It is as unwise as it is unfair that vilification of this kind should be indulged in, certainly unless one can prove his accusation to be true.


Robert James Manion: Hear, hear.


Arthur Graeme Slaght: There is some more wisdom laid down in this same volume. The hon. gentleman has undertaken to tell us what the duty of an opposition in parliament is, and I trust that his extended experience in that capacity may not be cut short too soon. I should like to make a brief reference to what he says in this book. At page 275 I quote:
From 1920 to 1930 we spent four more years in the shades of opposition. It is a freelance life, with plenty of opportunity for criticisms and little real responsibility for the proper carrying on of national affairs, for the party in power makes it a question of honour to have its own way. An active opposition may be of great use to a government and to a country if it uses its powers of criticism in a sane and constructive manner-
I call attention to the next few lines, which contain the nut in the coconut of this debate: . . . but few oppositions worry overmuch about constructive suggestions, aiming rather to point out the blunders of a government, and rarely showing sufficient generosity to praise worthy actions.


Robert James Manion: I wrote that right after I had observed my right hon. friend (Mr. Mackenzie King) in opposition for five years


Arthur Graeme Slaght: I take it the hon. gentleman was sincere, after his experience in opposition, when he related what he and his confreres thought wal the duty of an opposition. I do not agree with him and I do not commend his view to the youth of Canada as indicating the duty of an opposition. If he will search the records of British parliamentary life he will find that the best tradition in England dissents entirely from such a statement as that which he has written.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Arthur Graeme Slaght: Mr. Speaker, just after the house took recess several hon. members asked me for the name of the book from which I had quoted, which name I inadvertently omitted to state. The name of the book is, "Life is an Adventure;" the author is the leader of the opposition (Mr. Manion), and it may be procured at any reputable bookshop for the modest price, I understand, of $2.50. I assure my hon. friend I am seeking no part in the royalties.
I stated that this whole Bren gun agitation was, in my view, inspired by purely political motives, and I propose to spend the few minutes at my command in outlining my reasons for making that statement. We had a scholarly and interesting address from the hon. member for Kootenay East (Mr. Stevens) just before recess. I disagree with most of what he said, but in these times of war and strife I feel that the house should be congratulated upon the fact that two of the great parties of Canada have found peace and are now under the one banner: the great Reconstruction party and the great Conservative party-the National Conservative party.


Ernest Lapointe: Formerly the Liberal-Conservative party.


Arthur Graeme Slaght: I have not always agreed with the hon. member for Kootenay East, but I think it is to his everlasting credit that in this debate he was quick to dissociate himself from his new-found leader in his imaginative and bitter criticism directed against the Minister of National Defence (Mr. Mackenzie). We did get a clue from the speech of the hon. member for Kootenay East as to the inside workings of this Tory cabal to destroy the Minister of National Defence. In the course of his remarks he
Bren Gun-Mr. Slaght

was, as I noted it, referring to the contract, and he said or predicted: "Once this contract is running smoothly, which it would have been had we not interfered," then so and so would follow. There is the clue to the situation, and the disturbance in Canada for the last eight months: "Had we not interfered it would have been running smoothly." No truer word has been uttered in this debate. Notwithstanding the admitted interference, for purely partisan purposes I repeat, the contract has been, to the disappointment of my hon. friends opposite but to the great satisfaction of the people of Great Britain and the British war office, running more than up to date on its commitments.
Let me digress for a moment to refer to the evidence of Mr. Gillespie who was called as a witness. He has been and is in charge of the John Inglis plant for the production of these guns. I refer to page 3091 and following pages of the evidence taken before the commission.


An hon. MEMBER:: Who is Mr. Gillespie?


Arthur Graeme Slaght: I am glad to tell the hon. m'ember who Mr. Gillespie is and then to tell him what he says. Mr. Gillespie was for thirty-eight years in the employ of the British war office. He was for eighteen years in charge of the royal small arms factory at Enfield, the greatest munition producing factory in the British empire. He agreed to come to this country and undertake the supervision of this contract in the John Inglis Company's plant for the life of the contract, and the British war office released him to Canada for that purpose. His duties in the royal small arms factoiy at Enfield were-I paraphrase the evidence-to develop the manufacture of all sorts of small arms and machine guns, guns that would take the ordinary rifle cartridge. His evidence discloses that he was sent by the British Ministry of Munitions to the United States, to help them with their difficulties in regard to small arms, and spent some time in various factories there, including the Winchester repeating arms factory at Schenectady, the Remington factory at Ilion, and the Savage company. What does that gentleman say, compared with the slanderous imputations from the other side of the house that this firm and its equipment are not capable of producing the Bren gun as required by the terms of their contract? At page 3106 we find the following, in reference to the Inglis organization:
Q. And from your experience with them here what do you say as to their efficiency as engineers in charge of production, or in charge of planning for production of Bren guns?

A. I would say they are one hundred per cent.
Q. One hundred per cent?
A. Yes.
Q. Well that is pretty good.
The Commissioner: As the school boy says, it is not good, it is perfect.
That is the testimony of a man who is qualified to speak. We have discovered in our midst a young engineer. Let me say that while I disagree with 99 per cent of what he said I think he made a masterly presentation of a bad case, as he is always capable of doing. I have complimented him upon that; I regard him as one of my friends in the house, and I hope I am right in that. But are we to take the speeches of young engineers and of hon. gentlemen on the other side of the house who have achieved a great deal in their respective spheres, and throw out the testimony of a man who is preeminent in the manufacture of munitions in the British empire to-day? The people of Canada will not take long to choose.


Robert James Manion: Did the hon. gentleman
say that Mr. Gillespie is the head of the Inglis company?


Arthur Graeme Slaght: No, my friend misunderstood me. He is lent to the Inglis company by the British war office.


Robert James Manion: But he is in charge of the Inglis company now, do I understand?


Arthur Graeme Slaght: Yes, and he was there when they opened the doors and put these workmen to work, and has been there ever since. He was called to testify, and the arrangement is that he stays until this contract is fulfilled.


Robert James Manion: And I understand in that evidence he is speaking for a company which he is managing at the present time? I understood the hon. member to say that this gentleman is manager or superintendent or something for the company at the present time; is that right?


Arthur Graeme Slaght: Yes, for the John Inglis
Company; that is right.


Robert James Manion: So he was speaking of his own company when he said it was so up to date.


Arthur Graeme Slaght: Yes, but does my friend suggest that he prevaricated? He speaks with a record of thirty-eight years in the British war office behind him.


Mr. CLARKE (Rosedale):: Was he engaged before the contract was signed; was that one of the reasons?


Some hon. MEMBERS:: Order.

Bren Gun-Mr. Slaght


Arthur Graeme Slaght: No, I want to answer.


Harry Gladstone Clarke: Was this man Gillespie signed up with the company that received the contract, prior to their getting the contract?


Arthur Graeme Slaght: No. Let me tell my hon. friend that when the British war office notified the Canadian defence department that they had made a satisfactory draft contract for the production of Bren guns for them in Canada, concurrently with that they said, "We will give you our best man to see it through."


James Garfield Gardiner: Cooperation with the
British by hon. members on the other side!


Harry Gladstone Clarke: The hon. member is sure-


Some hon. MEMBERS:: Order.


Walter Edward Foster: The hon. member for
Parry Sound (Mr. Slaght) has the floor. If the hon. member wants to put a question to him it can be done only with his consent.


Harry Gladstone Clarke: I do not wish to take up the time of the speaker, being very well acquainted with him for a number of years-


Some hon. MEMBERS:: Order.


Some hon. MEMBERS:: Question.


Harry Gladstone Clarke: I have only one question: Is the hon. member quite positive of what he is saying?


Ernest Lapointe: This interruption has taken three minutes, Mr. Speaker.


Arthur Graeme Slaght: Let me answer my hon. friend. I believe, definitely, that I have stated the facts. I have studied the evidence, and I think if my hon. friend has read it-which I very much doubt

he will find that the statement I have made is absolutely correct. We can all make mistakes here and there, but let my hon. friend read the evidence, and then point out the mistake.
That, Mr. Speaker, brings me to a point with which I had not intended to deal here. My hon. friends on the other side of the house, in all their criticism, have failed to tell us one thing. In the friendliest way I challenge the leader of the opposition if he has read the evidence-which I doubt-to tell us what part the British war office took in scrutinizing the contract which they made, which is on all fours with the Canadian contract under attack except as to the quantity of guns and except as to one provision which we put in for the protection of the government of Canada, and which the British war office did not even insist upon. It is all very well for
my hon. friend to say to me, " Oh, you can deal with that." If he wants to present a fair case to the people of Canada, why does he criticize Mr. Orde, who, as I understand it, was a Conservative appointee?


Robert James Manion: I did not criticize Mr. Orde at all.


Arthur Graeme Slaght: Why does he suggest that the experts in Canada, legal, engineering and otherwise, made any error in advising their government to enter into this contract? Does he forget that for long months the British war office, whose experience goes back a hundred years, whose expert engineers and legal counsel I say transcend a hundredfold all the carping criticism that came from the other side, scrutinized a similar contract, which now bears the signature of the British war office and which they desire to have carried out? Why not be fair? Why sit down without dealing with that point when invited to do so? Under his theory of the duty of an opposition does he present the carping criticisms and refuse to acknowledge the good that may lie in the subject under discussion? That is not his exact language, but it is a paraphrase of his conception of the duty of an opposition, and he has demonstrated it to the nth degree in his conduct during this debate.
Now let me get to my real point, Mr. Speaker-


Robert James Manion: Hear, hear.


Arthur Graeme Slaght: Thank you-and it is this: From the day the Maclean's article was published it was a plan and scheme conceived in the brain of the young man who wrote it, for what fee has never yet been disclosed- my hon. friend says $500. I do not know. It might have been $500, or it might have been thirty pieces of silver. I am not sure as to which it might have been. But let me tell my hon. friends across the way that from that very day there has been a consistent cabal to close the plant of the John Inglis Company.


Mr. HARRIS:: Perhaps the hon. gentleman will tell us something about fees.


Some hon. MEMBERS:: Order.


Joseph Henry Harris: Fees; he knows about fees. What was the fee that the author got? I am asking the hon. gentleman a question. Will he tell me what the fee was for the Maclean's magazine article?


Some hon. MEMBERS:: Order.


Arthur Graeme Slaght: What is the hon. gentleman's question?
Bren Gun-Mr. Slaght


Joseph Henry Harris: Would the hon. member tell us what was the fee for the article to which he referred?


Mr. FRASER:: The hon. member knows that now; why is he asking?


Joseph Henry Harris: No, I do not; I am asking for information. We have an hon. gentleman speaking who knows more about fees than all the rest of this House of Commons put together. Tell us about the fee; tell us what, it was.


Walter Edward Foster: That is not a proper
question.


Arthur Graeme Slaght: When my hon. friend finds me accepting a fee to traduce a contract that is on all fours with a contract entered into by the British war office, which means a supply of guns and ammunition for the mother country when she is in dire need, then he can bring in any criticism of me he wishes.
Let us see what George Drew wanted, and I would ask hon. members to notice the date I am about to mention. An interview appeared in the press on September 1, 1938. That interview was with Mr. Dingman of the Globe and Mail staff, appearing in the Globe and Mail of September 2. The heading is:
Drew Demands Work Stopped on Bren Guns.
Would Close Inglis Plant till Probe of Deal is Concluded.
That is a significant date, September 1. A reference to the report of the commission will show that the report was brought in on December 29. If George Drew had had his way the Inglis plant would have been closed down for three months and twenty-seven days so that a young politician might become leader of his provincial party. Will any hon. gentleman across the way dare state, now or later, that he approves such a demand? The question answers itself; no. Did Colonel Drew consult the British war office as to what effect it might have on their plans if the Inglis plant were closed for four months? Certainly not.


Robert James Manion: It could be closed for
four years and make no difference.


Arthur Graeme Slaght: My hon. friend has now allied himself, as I hoped he would not, with an attempt to close the Inglis plant when the British war office had urged that the work be carried on. This young gentleman did not stop at that. We all know of the two months during which the inquiry proceeded, in which he took a prominent part as counsel. We know that he is a member of the bar of Ontario, and we know that members of the bar, both

British and Canadian, have a clear understanding that matters sub judice, as it is said in law, or matters which have not been finally dealt with by a tribunal before which evidence has been presented, should not be discussed in public, certainly not by a counsel engaged in the case and certainly not by a quasi litigant or accuser.
Let me take you, Mr. Speaker, to that historic room in the Royal York hotel where so many of my Ontario friends on the other side gathered on December 9, and bear in mind that the report came out on December 29. In his bid for leadership of the provincial party, at a convention where Bren guns and federal matters were not apropos unless they were dragged in for political purposes, this young man made a startling statement. This time I quote from the Toronto Telegram. Some of my hon. friends were there, and to their credit I believe their hearts stood still and they were shocked when they heard this utterance. The leader of the opposition smiles his usual bland and delightful smile. If he was in the room and did not rise and protest he should be ashamed of himself. At this time all the evidence was in; the commissioner was doing his best to make up his mind, to deal with a difficult task and prepare his report, and this is what this young gentleman said:
You have heard of the Bren gun inquiry.
It does not say, "cheers," but the reporter may have missed the cheers.
There is no doubt what is going to happen on that subject. There will be no Bren gun contract with the government when the next session opens.


Ernest Lapointe: He is a prophet.


Ian Alistair Mackenzie: Ordering the judge.


Arthur Graeme Slaght: Well, what was it? In the first place it was an 'arrant falsehood. Does anybody quarrel with that statement? In the second place it was a bid for provincial leadership. Does anybody quarrel with that statement? In the third place-


Mr. CASSELMAN:: He was then the leader.


Mr. THOMPSON:: May I ask the hon. member a question?


Some hon. MEMBERS:: Sit down.


Walter Edward Foster: Order.


Thomas Alfred Thompson: I know the hon. member wants to be fair. I was at that convention, and this was after the convention was over.


Some hon. MEMBERS:: Order.

Bren Gun-Mr. Slaght


Walter Edward Foster: Order.


Thomas Alfred Thompson: It was the night meeting, after he was appointed leader.


Arthur Graeme Slaght: There is one gentleman who was there. Did he rise and say, " How do you know?" Did he say, " You are discussing a matter that is sub judice?" Did he say,
" Look out, Mr. Drew; your statement is going to be published in every newspaper in Germany to-morrow morning?" No, he did not say that.


Thomas Alfred Thompson: He made the statement after he was appointed leader.


Arthur Graeme Slaght: Well then, it is all the worse, because it ties the hon. member in *with him. I assume the hon. member was a supporter of his, in his acquiring leadership.
Let me then in all seriousness point out to the house what happened. If he had had his way he would have shut the Inglis plant for the four months. He could not do it.


Mr. HOMUTH:: Hear, hear.


Arthur Graeme Slaght: My hon. friend says, " Hear, hear." May I name him, because I want his name on Hansard. The hon. member for Waterloo South (Mr. Homuth) says, " Hear hear," that the Inglis plant should have been closed for four months, when the British war office were urging by telegram, and everything else, " Get out those Bren guns as fast as you can."
But that was not all. The torch was thrown to the boys at Ottawa-" Let us cancel the contract."


Mr. PERLEY:: " The Shadow knows."


Arthur Graeme Slaght: " Let us cancel the contract." Eight months of production, which Mr. Gillespie says has been right up to date- one hundred per cent-although I did not read further extracts in which he said that the contract is right up to the minute. But the statement is there. The torch is thrown to Ottawa, and to my amazement and surprise hon. gentlemen opposite want now to cancel the Bren gun contract with the Inglis company.
I wonder if the five friends of my hon. friend the leader of the opposition, knowing his views on patronage, which the hon. member for Temiscouata (Mr. Pouliot) exposed this afternoon, whispered to him, " Let us get this contract cancelled-out of the way. We would like to nibble at it."


Robert James Manion: What five friends?
Mr.. SLAGHT: The five gentlemen whose names the hon. member refused to disclose; the gentlemen who were jealous, apparently,
because they could not get a chance at it, the contract. How can I name his five friends, when he is ashamed to name them himself?
Now, Mr. Speaker, there is much more I can show to you, but-


Mr. MacINNIS:: What have you shown?


An hon. MEMBER:: Nothing.


Arthur Graeme Slaght: Let me digress to say this-


Walter Edward Foster: Order.


Arthur Graeme Slaght: The hon. member is a
virile young member of the house, and I like him and his interruptions. I want to say before I am shut off that, having regard to the situation in Canada to-day, I believe the position of the two groups in the opposite corner of the house is entirely different from that of the Conservative party opposite.


An hon. MEMBER:: They are playing
politics.


Arthur Graeme Slaght: Of course they are playing politics. I believe that the report of the commissioner was one which made it perfectly proper and right for my hon. friends in the far corner to ask parliament to look further into the matter. I regret we are going to waste time to do so. Someone has said we have most of the facts, but my friends are within their rights, and the Prime Minister (Mr. Mackenzie King) was gracious enough to say that they could have his support. I do not want anything I say to-night which shows the history of an infamous cabal to apply at all to either of the groups opposite to my right.
Now, let me say just a word about two friends of mine, the first of whom is the hon. member for Trinity (Mr. Plaxton). Just a word as to him. I suggest his whole course in the matter, as disclosed by the sworn testimony, has been actuated by one motive, and one motive alone, namely the desire to serve his own people in Trinity constituency in Toronto. He has been completely vindicated by a judge of the Supreme Court of Canada. Is it for that desire that he is to be pilloried and torn to pieces, with barbed and poisonous insinuations-the imaginings in which the leader of the opposition said he deals. His imagination led him to paint a vivid picture of things that the learned judge did not say. He could not quarrel with the things the learned judge did say. With all his fire and eloquence he was pointing to the wall behind me, and he had me turning round in my seat to look at the five portraits the judge had painted.


Robert James Manion: Did the hon. member see any of them?

Bren Gun-Mr. Slaght


Arthur Graeme Slaght: No, I did not see any of them; that is the point. And without the slightest desire to be offensive let me suggest to the hon. member that he is suffering from "political delirium tremens." In another month we shall find him pointing to rats under his chair.


Robert James Manion: Is that what one sees when one has delirium tremens?
Some .hon. MEMBERS: Time.


Some hon. MEMBERS:: No, no.


Arthur Graeme Slaght: My hon. friend is a greater authority than I am. I never have enjoyed the privilege of having that disease, and I know he never has.


Robert James Manion: Then I would say my hon. friend is very lucky.


Arthur Graeme Slaght: There is a cure for it; if you are suffering from it, you can be cured.


An hon. MEMBER:: Pink elephants.


Arthur Graeme Slaght: But to be cured you must repent, and to repent you must confess. Repentance without confession is an empty vessel. One way for my hon. friend to confess is to confess his political sins to the Speaker of the house. And I will invite him. on a future occasion when we deal with tariff matters, to make full repentance and to endeavour then, if he can, to get absolution from the people of Canada.


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


Arthur Graeme Slaght: I wonder-


Some hon. MEMBERS:: Time.


Denton Massey: Mr. Speaker, I hesitated
to interrupt the hon. member for Parry Sound (Mr. Slaght) while he was speaking, but I understand from the rules of order that it is unparliamentary to impute motives to any members. He stated repeatedly during his speech that those of us on this side of the house who have spoken spoke from purely political motives. I ask that that statement be withdrawn. I refer to standing order 41, citation 297, which reads:
The imputation of bad motives, or motives different from those acknowledged, misrepresenting the language of another-
And so on. The remarks of the hon. member were unparliamentary and called for prompt interference, and I ask the hon. member to withdraw.


Walter Edward Foster: 
Some hon. MEMBERS:: Order.


Denton Massey: -of speaking from purely political motives.


Walter Edward Foster: The hon. member for Parry Sound did not mention the hon. member for Greenwood (Mr. Massey).


Ernest Lapointe: Even that would not be out of order. Speaking from political motives is not out of order, and I wish that no other motives could be attributed to me.


Mr. M. J. COLDWELL (Rosetown-Biggar):: Mr. Speaker, I rise to support the motion to refer this contract to the standing committee on public accounts. As I understand the motion of the Minister of Finance (Mr. Dunning), along with the contract will go the auditor general's report. In my opinion the Bren gun contract which we are now discussing is in effect only an incident. It seems to me that this house is now under an obligation to look into other phases of the expenditures of the Department of National Defence. We can begin where the Davis report left off.
I do not propose to follow the hon. member who has just taken his seat except to say that learned counsel as he is, he played up a few arguments which might possibly catch the ears of his listeners. I would merely point out that he made a great play of the fact that interference with this contract would result in slowing up the British rearmament program. Has he read the contract? If he has he knows that it calls for the first delivery of guns in twenty-four or thirty-six months. That being the case, how can any action of this parliament at this time slow up- the delivery if, as we have been told, this concern is ready, willing and able to manufacture machine guns for delivery to the government ?
I contend that in the light of the existing records of the department, of this house and of the interdepartmental committee from which the hon. member for Weyburn (Mr. Douglas) quoted this afternoon, the matter of the Bren gun would seem to be most extraordinary. In view also of the replies which have been given at various times to questions asked in this house, one is forced to the conclusion that the minister either paid little attention to the affairs, of his department and signed important documents without understanding them, or failed to give this house proper and adequate information when called upon to do so. As a matter of fact,.

Bren Gun-Mr. Coldwell
I believe that the first mention of the Bren gun in this house was made by myself almost two years ago. I find that on February 22, 1937, after discussing rumours that certain factories were to be called upon to make munitions, I asked a question of the Minister of National Defence (Mr. Mackenzie). As reported on page 1108 of Hansard of that year I said:
.	.	. are we experimenting with any guns
produced in Czechoslovakia? X have in mind the Bren machine gun. If so, what are we paying for these guns?
To this question the minister replied as follows:
I believe it was the year before last that two were ordered by the department; ten more are now on order. The Bren is a new automatic machine gun which up to now has been manufactured in Czechoslovakia. I understand that the rights of the manufacturer have been purchased by the British government and that they are to construct as soon as possible a factory in the United Kingdom for the extensive production of that type of gun. The department has been looking into the question with a view to having the gun manufactured in Canada.
The minister said that the department had been looking into the question with a view to haying the gun manufactured in Canada. As a matter of fact, the Davis report shows that the high commissioner wrote from London on February 27, 1936, a year before, concerning this particular matter. AVe find the following on page four of the report:
By letter dated February 27, 1936 (exhibit 68) the office of the High Commissioner for Canada in London advised the Secretary of State for External Affairs of the Canadian government that in connection with the adoption of the Bren light machine gun by the British army an agreement, dated May 24,
1935,	had been made by the secretary of state for the war department with the patentee embodying the terms and conditions under which the gun could be used and manufactured by the secretary of state for war and a copy of this agreement, together with a copy of a letter from the war office dated February 26,
1936,	were enclosed. Particular attention was drawn, in the high commissioner's letter, to the statement in the war office letter that in making the agreement opportunity was taken of including therein provision to enable his majesty's governments in the dominions, in the event of their adoption of the gun, to take advantage of the terms of the agreement should they desire to do so. The agreement covered the patented invention for the machine gun itself as well as a certain tripod from which the gun could be fired and a filling machine for use in connection with the gun. One of the conditions of the said agreement relating to the possible manufacture of the said gun by the dominions was that
such manufacture shall be in a factory operated by the government in question.
The statement "such manufacture shall be in a factory operated by the government in question" stands out in the report. The Davis report goes on to say on page five:
As early at least as June 3, 1936, the actual requirements for Canadian defence were put at approximately 7,000 of these guns.
The minister stated that the Bren gun production was our most vital necessity in the Dominion of Canada. Nearly nine months later he merely stated that the department had been looking into the matter, and a little later, on the same evening, February 22, 1937, I asked the minister:
AVhat company has secured the manufacturing rights of the Bren gun?
Mr. Mackenzie (Vancouver):	None so far.
Several have been endeavouring to do so.
That is, to manufacture the Bren gun in Canada.
Let us now turn to the report of the Davis commission, and what do we find? The minister stated on the stand that no one had asked for an opportunity to manufacture the Bren gun. I ask, having in mind those two statements, how can it be said that the evidence given before the Davis commission was correct? Or, if the minister on the occasion of his appearance before the Davis commission was giving an accurate statement of what was a fact, why were we told in the House of Commons a year and a half before that there were persons who were desirous of manufacturing the gun? I say, as my leader pointed out in relation to the questions which he asked last June, that the answers are grossly inaccurate and misleading.
Now let me turn to the evidence, where we find this, that following the interview with Messrs. Cameron, Hahn and Plaxton, the minister wrote the following letter-I am quoting from page 19 of the report, but first let me read the introductory paragraph:
Following upon the interview with the minister on October 19, 1936-
That is the interview to which I have just referred.
-and without waiting for the report of the inspector who had been asked by the department on October 10 to inspect the Inglis plant in Toronto, there was sent by the deputy minister of national defence to the under secretary of state for external affairs on October 20, 1936, the following letter (exhibit 74) suggesting, in view of Major Hahn's early departure for England, the desirability of communicating with the high commissioner as soon as possible.
Then follows the letter:
Sir,-
I have the honour to refer to previous correspondence pertaining to the Bren light machine gun, following on which the Department of
Bren Gun-Mr. Coldwell

National Defence has been investigating the question of the manufacture of this gun in Canada. Major J. E. Hahn, D.S.O., M.C., a former officer of the Canadian expeditionary force, and representing a reliable group which controls certain manufacturing plants capable of manufacturing armament and munitions located in a large industrial centre where the labour and material factor is stable and favourable, has been in communication with the department.
I would draw again particular attention to the phraseology-"a reliable group which controls certain manufacturing plants"-when as a matter of fact the group was not known to the minister or known, apparently, even to the deputy minister, and moreover when it did not possess a single plant equipped to manufacture the Bren light machine gun. I say that this statement sent overseas was certainly misleading. A little later in the same letter we find this:
In this connection the department must consider the possibility of the gun being manufactured in a plant or plants other than government owned, such as for example those controlled by Major Hahn and his associates.
If ever a misleading communication were forwarded from the Dominion of Canada to the motherland, certainly this communication was of all of them one of the most misleading, and I say that on that account alone the deputy minister should be disciplined, and that the minister, who says that he takes responsibility for this letter, was either ignorant of the facts, negligent of his duty, or incompetent, and therefore should not continue to hold the position which he holds to-day.
That I submit, Mr. Speaker, is the only conclusion which can be drawn from the evidence and from this letter in particular. Why, it implies that Major Hahn and his associates had plants and were a reliable group. How did the minister or the deputy minister know that they were even financially reliable; for it was not until May, 1938, that confirmation of financial reliability of Major Hahn was submitted in a letter from the Bank of Montreal. And yet in the face of those facts we have a letter of introduction going out which, to my mind, was a strong recommendation of Major Hahn and his associates.
Moreover, what plant had they? This letter is dated October 20, 1936, and it was not until the day before, according to the report, that the representative of the bondholders accepted the offer made by the Hahn interests for the Inglis plant. Moreover the plant was being investigated by an inspector under the department. His report was already on the way, available in a day or so, and yet in the face of what must have been knowledge that this report was in hand, this letter was sent

out for the guidance of those overseas who would have something to do with the placing of the contract.
So I say that when on the other side of the house it is said that the Davis report is a vindication of the minister and of his department, it would seem to my mind to be, on the other hand, a serious questioning of the minister and of his department; and we who are members of this parliament are called upon to adjudge the issue. I want to say to hon. gentlemen opposite that speeches of the type we have heard to-night will not help because in those speeches the points at issue are not taken up. This afternoon we enjoyed the sallies of the hon. member for Temiscouata (Mr. Pouliot), but he did nothing to refute the arguments of those who have condemned this contract. To-night we heard the hon. gentleman who preceded me, the hon. member for Parry Sound (Mr. Slaght), who, as I said earlier, like a clever counsel, was quite obviously doing his best with a bad case.


James Garfield Gardiner: His speech will be
remembered long after that of the hon. member.


Major James William Coldwell: That is quite possible. It will be remembered by those who delight in that kind of cheap political claptrap.


James Garfield Gardiner: May I ask the hon. gentleman whether he considers absolute proof that the men loaned by the British war office regarded this plant as suited to the purpose, as cheap political claptrap?


Major James William Coldwell: I would say that the British war office had no other advice than the kind of advice that was tendered in the letter which I was discussing, and that was distinctly misleading advice.


James Garfield Gardiner: They had the advice of one of their own appointees.


Major James William Coldwell: I do not know who the gentleman was.


James Garfield Gardiner: He was mentioned; the hon. member was not listening.


Major James William Coldwell: I am going on the evidence that was submitted to the commission.


James Garfield Gardiner: That evidence given before the commission was read to the house to-night.


Major James William Coldwell: In any event the judge did not think it worth while to mention him in his report. That is not the only matter which, in my opinion, should be referred to the committee-not to rehash the evidence

Bren Gun-Mr. Coldwell
that was given before the Davis inquiry, but to see that similar incompetence does not occur in connection with further huge expenditures that are contemplated. It seems to me that the Bren gun contract has served a useful purpose in bringing before this house the necessity of careful inquiry into expenditures that have been made or are about to be made by the present Minister of National Defence. Millions of dollars have been appropriated for defence since the war; many millions have been appropriated in the last two years, and yet over and over again we are told that this country is defenceless. Is it not about time that parliament made a thorough inquiry and investigation into how these expenditures are made, and into those who are responsible for making them? I say that inquiry into this contract is necessary because perhaps it may become a typical contract, and we do not want that to happen. That is why I am warmly in support of the motion of my colleague the hon. member for Vancouver North (Mr. MacNeil).
The Minister of Agriculture (Mr. Gardiner) last evening criticized us for opposing increased defence estimates. At page 682 of Hansard he is reported as saying:
And when this government came to the house during the first session of this parliament to ask for $25,000,000 for national defence, what was the position taken by the hon. member for Vancouver North (Mr. MacNeil) ? What was the position taken by the hon. member for Rosetown-Biggar (Mr. Coldwell) ? What was the position taken by the hon. member for Winnipeg North Centre (Mr. Woodsworth) and the hon. member for Winnipeg North (Mr. Heaps) ? What was the position taken by all hon. members of the group sitting opposite and to the right of the official opposition?
The minister will perhaps remember when I remind him what that attitude was, and I will quote from Hansard of 1937. When the hon. member for Vancouver North spoke he made a statement on behalf of the group with which he is associated and at page 882 of Hansard he is reported as saying:
I submit that one of the first and most necessary contributions to national defence, and one that should be made before we pay over additional millions, is so to purge the present establishment as to place it on a businesslike and sensible basis. Eliminate patronage, social nonsense and obsolete military routine and there might be some opportunity for men in that department to do something, men who have some technical knowledge and grasp of the requirements of national defence. If the country wants defence, there might then be some hope of its getting money for its money.
That was one of the grounds upon which we opposed those estimates; and if hon. members will look through the discussions during these three years they will find that
points similar to those contained in the statement which I have just read were made over and over again by members of this group. The second point upon which we opposed the estimates was the fact that no one knew exactly how these armaments were going to be used, what the foreign policy of the government was, or what the policy of the British administration which the government was following happened to be.
Last night the Minister of Agriculture quoted Sir Thomas Inskip as he spoke on July 20, 1936, in the British House of Commons. The minister said that he was there. I ask him, did he hear the speech which immediately preceded that of Sir Thomas Inskip, the speech of the leader of the Liberal party in Great Britain, Sir Archibald Sinclair? It is strange to me that in debates on foreign policy the government of Canada, which calls itself Liberal, always quotes the leaders of illiberalism in Great Britain. I have before me what Sir Archibald Sinclair said and I am going to put it on the record. Sir Archibald, in the summer of 1936, said almost in identical language exactly what this group has said in this house in connection with our defence estimates.


James Garfield Gardiner: I stated that last night.


Some hon. MEMBERS:: Oh, no.


James Garfield Gardiner: I pointed out that the opposition had opposed it on three occasions and this was the third occasion on which Sir Thomas was trying to disprove their statements.


Major James William Coldwell: And I am pointing out that if the Liberal leader in Great Britain-


Mr. MARTIN:: We are not obliged to follow him.


Major James William Coldwell: Pardon me?


Paul Joseph James Martin: Surely there is no obligation on the part of this house to pay lip-service to a leader who happens to bear the same name in another country?


Angus MacInnis: There is no danger.


Major James William Coldwell: Liberalism, as I have understood it in Great Britain, has stood for something; in Canada it is simply a meaningless name. That is why I will place on the record what Sir Archibald said, in order to show that a government of Canada which calls itself Liberal follows on the contrary the foreign policy of a British government which is far removed from Liberalism in its widest and best sense.


Malcolm McLean: The hon. member does not agree with it in either country.
72S
Bren Gun-Mr. Coldwell


Major James William Coldwell: Sir Archibald Sinclair said this:
My vote on the reduction of this estimate to-night-
It was a defence estimate.

will, however, depend-and indeed on some of the other estimates-upon the minister's answers to the questions which I have asked him.
Exactly what we said.
It will depend, above all, on his willingness and ability to give clear and direct assurances to this committee that British armaments will never be used, except in accordance with the covenant of the League of Nations, and that the government recognize, as an imperative and urgent duty, the creation of a system of collective security under the auspices of the league, so that British armaments shall be used, not for selfish or imperialistic aims, but to uphold the rule of law against arbitrary force, and thus to maintain peace on the only firm foundation, that of justice, and to avert the catastrophe of war.
The minister stated last night that we in this group had consistently opposed the defence estimates, and asked upon what grounds we opposed them. I point to the two main grounds that I have given, and they will be found embodied in the records of this house. In my opinion no group criticizing any estimates has ever had a clearer vindication of their opposition than can be found in the report of the Davis commission. It is all very well to say that the report found no one guilty of misconduct. That is not what the commission was charged with doing. The form was reported upon; "the form, not the substance, of the contract." Upon the substance we in this house, and through us the people of this dominion, must judge. So our attitude on defence estimates throughout has been vindicated by what we are now discussing.
In closing I say that a matter of this kind at the present time in the Dominion of Canada, or in any other democratic country, is to be deplored, because it tends to undermine faith in our democratic institutions and in those who are charged with the responsibilities of government. Matters of this sort do more to undermine what we loosely term democracy than all the propaganda that can be sent from over the seas. It enables some to point the finger of scorn at parliament, and to say, what we need is a certain type of so-called big business men in this house. I venture to say that those who would institute the rule of big business would also stifle free discussion.
I am persuaded that if we want to continue the institution of parliament, we who are [Mr. M. McLean.)
within these walls at the present time must judge a matter of this kind not from any preconceived notions that we may have but according to the material before us. In my opinion the commissioner places the questions clearly before this house, and we have to answer them. Be that as it may, I say that at least the report of the commissioner, the evidence given before him and the airing which has been given to the evidence in this house this week, have certainly undermined the confidence of the people of Canada in the Minister of National Defence and in those who serve immediately under him. I think it probable that until this debate occurred in this house the Prime Minister (Mr. Mackenzie King) was not altogether aware of all that was in the evidence and in this report. I am quite sure that many hon. members were not conversant with it. Those of us who had read some of the evidence-I had not read all of it for there are many volumes-have from hour to hour during the past two days heard evidence and conclusions based upon that evidence of which we had no knowledge before. So I am urging that the motion now before the house be adopted, and that, not a rehash of the evidence given before the Davis commission be undertaken, but that the operations of the Department of National Defence under the present minister and those who serve immediately under him be thoroughly inquired into by the public accounts committee.
Mr. KARL K. HOMUTH (Waterloo South): Reference has been made two or three times to-day to Colonel George A. Drew. I do not rise for the purpose of defending Colonel Drew; he has shown on many occasions that he is quite capable of looking after himself. But I do say that Colonel Drew has an enviable war record; he with many others belonging to our artillery and other defence units has been working for years to perfect the defences of Canada and put them on a businesslike basis. Colonel Drew's only motive in taking up this matter was his interest in the defence of this dominion. The hon. member for Parry Sound (Mr. Slaght) and the hon. member for Temis-'couata (Mr. . Pouliot) caused considerable laughter this afternoon and evening on the government side. I can easily understand how they appreciate that; it was like balm to their frayed nerves. It may be all right on ordinary occasions of debate to have a laugh. But to my mind this matter is too serious to laugh at, and this government cannot laugh off the seriousness of it. The fact of the

Bren Gun-Mr. Homuth
matter is that not one speaker on the government side has yet dealt with this contract in detail or refuted the charges made by hon. members on this side of the house.


Mr. BERTRAND (Laurier):: It is for the hon. member to prove the charges.


Karl Kenneth Homuth: The hon. member for Parry Sound made reference to Mr. Gillespie's evidence. So did the Minister of Agriculture (Mr. Gardiner). What did Mr.' Gillespie say? He said that these men had the ability to produce Bren guns. So have fifty other men in Canada, one hundred per cent ability to produce them. Mr. Gillespie did not say they were in a position to do so; he did say they had the ability to do so. The hon. member for Parry Sound challenged us to say whether or not we would say that the factory should be closed. I said yes, and I say it again. The people of Canada will say, "Close the factory." There are many Liberal members in this house who wish this thing had never occurred. When the hon. member for Parry Sound speaks so much of the British empire and our responsibility in helping to produce guns to defend that empire, let me say this: God help the empire if they are going to depend for their defence on some Bren guns delivered in twenty-four or twenty-six months from now.
It is^ difficult for any hon. member, from his place in this house, to discuss certain phases of government business which, unfortunately, have caused the people of this country to think there is something materially wrong m_ the Department of National Defence and with those men to whom we entrust such important questions. For many years, ever since confederation in fact, we have had prime ministers with characters above reproach, and in that category I include the present Prime Minister (Mr. Mackenzie King). He knows only too well, however, that there are times when those who support piime ministers are not always as careful as they should be in their governmental actions. In this particular instance I do not believe the Prime Minister was cognizant of what was going on. He was not told the truth; he was kept in the dark. But I do say this about him, that after he had declared the policy of the Liberal party in connection with a matter which was of such prime importance to Canada and the empire, this was one matter to which he should have given exceptional scrutiny before he ever became a party to the signing of a contract such as this.
What precipitated this whole mess, because that is what it is to my mind? It was the
Drew article in .Maclean's magazine. It was admitted in evidence that as a result of the publication of this article, one clause was cleared up within a day or two, which action it is quite generally understood saved this country and this government the sum of $250,000.


Ian Alistair Mackenzie: Absolute nonsense.


Karl Kenneth Homuth: My hon. friend says that is nonsense. This whole thing was nonsense, and the worst nonsense of all was that he should be a party to the signing of the contract.
This afternoon the hon. member for Kootenay East (Mr. Stevens) referred to the reports that went throughout this country after the report of Mr. Justice Davis was submitted, and the Prime Minister stated that no report had been given out from his office. The strange part of the whole matter, Mr. Speaker, is that a synopsis of the Davis report was handed to the press fifteen minutes after the Bren gun report was handed to them, and I am told on good authority that this synopsis came from the headquarters of the National Liberal Federation.


William Lyon Mackenzie King: Oh, what
nonsense.


Karl Kenneth Homuth: I have in my hand a copy of the synopsis of the report which was handed to the press gallery, and it was clearly understood that it came from the National Liberal Federation. If it did not come from there,, did it come from the government? If it did not come from the government or the National Liberal Federation headquarters, where did it come from? Who took the trouble to prepare it and hand it to the press, fifteen minutes after they received the report? That is the story which was broadcast throughout Canada to the effect that the Bren gun report was a whitewash, and so on; and the people of the country believed there was nothing to it at all.


William Lyon Mackenzie King: My hon. friend speaks about a synopsis of the report.


Karl Kenneth Homuth: I have it right here.


William Lyon Mackenzie King: I cannot ask him to read it at the moment, but certainly I should like to hear anything published prior to the report being issued, which could be considered as an exact synopsis of the report. There were all kinds of guesses by journalists as to what was in the report, but I would repeat to my hon. friend what I said this afternoon, that the report was delivered to me personally and was in my possession, and
Bren Gun-Mr. Homuth

no one outside saw the report. I am sure the judge of the supreme court did not give it out; I know I did not give it out. It was in my possession until sent to be printed. Any reports that appeared in the press were pure conjecture; they could not have been taken from the original.


Karl Kenneth Homuth: I still maintain that a copy-


Paul Joseph James Martin: Oh, accept the Prime Minister's statement.


Karl Kenneth Homuth: I still maintain that a synopsis was handed to the press. Here is a copy of it, and I understood that it came from National Liberal headquarters. If it came from there, what right had they to know anything about the Bren gun report before the people of Canada did?


William Lyon Mackenzie King: The report
covered ninety typewritten pages. How could it possibly be synopsized in fifteen minutes?


Karl Kenneth Homuth: So there is the story that went out across this country.
When we start to delve into the report, we begin to see just what a terrible mistake the Department of National Defence made. There are in Canada a great many industries capable of making Bren guns. They do work in steel that is much more intricate than the manufacture of a Bren gun. After all, what is there to the Bren gun? The important part is the alloy and the fact that the barrel is interchangeable. Steel companies throughout this dominion do more intricate work, and I venture to say that if they had been given an opportunity to tender on these guns the government would have obtained them for at least half the amount they are going to cost this country under this contract. More than that, these people would not have asked to be paid a large sum of money for getting government patronage, which is really what happened with Major Hahn and his associates.


Ian Alistair Mackenzie: On a
point of order, does the hon. gentleman know that the prices are regulated by the comparative Enfield prices?


Karl Kenneth Homuth: The minister himself does not know as yet what these guns are going to cost this country, and by the time they get through monkeying around, putting machinery in the Inglis plant and paying for it, paying for everything else in connection with it and taking it out again, we shall not know anything about the cost until the whole deal is through.
[Mr. Mackenzie King.l


Ian Alistair Mackenzie: My hon. friend does not want any guns; that is obvious.


Karl Kenneth Homuth: to pay 8100,000, spread over instalments up to February 6, 1938, and $150,000 in six per cent bonds. It might be interjected at this point that later, on the witness stand, Major Hahn testified that an old appraisal made in October, 1929, of the old Inglis plant as a going concern, fixed the then value at $1,327,000, exclusive of land.
A first payment of $500 was made on September 22, 1936. The next payment of $2,500 was made on November 9 of the same year. A third payment of $1,000 was made on May 10, 1937. Thereafter payments ranging up to $3,500 were made at intervals, but up to the time the Bren machine gun contract was signed only $46,500 had been paid. In the meantime the new John Inglis Company had been organized. On March 31, 1938, the day the government signed the Bren gun contract, the company itself made the final payment of 353,500.
These people then made the final payment on this factory which had been represented to the British war office and to a committee here made up of civil servants as an industry equipped to make Bren guns. Of the first $46,500 of cash payments the books of Cameron, Pointon and Merritt-this is all from the evidence-credited Major James E. Hahn with $26,416.86; Gordon Plaxton with $3,616.67; Herbert Plaxton with $3,616.67, and the firm itself with $10,850. An investigation carried on by Mr. Hoult showed that these moneys were likewise applied on the books of the new Inglis company as payment on account of the undertaking of Hahn and his group to purchase 58,333 shares at $6 par value. The final payment of $53,500 on the cash purchase price of the old company's assets was made directly from the treasury of the new John Inglis Company.
Here is another point which is perfectly clear. The total capital of the new Inglis company was 250,000 shares at S6 par value, or $1,500,000. Of this $1,500,000 of capital stock Major Hahn and his group took for themselves 191,662 shares of $6 par value, or a total of $1,149,972. This was stock for which they paid nothing. This stock has been termed vendors' stock. Excluding five qualifying shares which were given to the nominal original directors who came from the office staff, the group left in the treasury 58,333 shares of $6 par value which they agreed to buy at par, paying in instalments. To put it more plainly, this group held seventy per cent of the total capital stock of the company-


Robert James Manion: For nothing.
iMr. Homuth.]


Karl Kenneth Homuth: For nothing, and they had agreed to buy the other thirty per cent and to pay the money into the treasury in order to operate the company. This money was to go into the treasury to operate the company; yet the government was buying all the machinery for the plant. These people had all these shares for nothing, and then they were going to buy the others in order to-put money into the company with which to operate. Who would not take a contract like that from a government? I wish I could get two or three to-morrow.
May we go on? Up to September 15, 1938, it was shown that the group had paid in $231,198 on the 58,333 shares of $6 treasury stock which had a total value of $349,998, which they were obligated to buy. On that date they owned outright a $1,500,000 corporation, its assets and stock for that amount of money, subject to the payment of a balance of $118,000 on the treasury stock. The initial cash payment of $100,000 had been charged against these treasury funds. In the meantime 3,855 shares of treasury stock had been sold to the public and a few brokers for $27,041. The public paid $7.50 a share for its stock. It is easy to fill in the details when you get the framework.
Though the Hahn-Inglis corporation set-up was engineered with four corporations, one functioned only to take the group s subscription for $349,998 of treasury stock. Another functioned as a temporary holding company for the huge block of $1,149,972 of vendor's shares taken by the group. The third corporation was the machine which 'created the stock expansion, and the fourth was converted into the John Inglis Company. There is the picture. If ever there was a piece of manipulation for the purpose of watering stock of a company, this gives the picture. This is something to which western members can point with pride. They can point to this as showing how their government gives a large contract. I have given the exact picture of this whole affair.
The stock expansion corporation was the British Canadian Engineering Company which was incorporated on November 23, 1936, with an authorized capital of 200,000 shares at $1 each. Mr. Nurse, an employee of Cameron, Pointon and Merritt, who had bought in the old Inglis property, made an agreement, of date October 22, 1936, with Major J. E. Hahn and his employers to turn over to this British Canadian Engineering Company, when incorporated, the properties of the old Inglis company. One interesting paragraph in this

Bren Gun-Mr. Bertrand (Laurier)
early agreement of October 22, 1936, made nearly eighteen months before the Bren gun contract was signed, reads:
John E>. Cameron, H. A. W. (Herbert) Plaxton and the persons they represent, together with Major Hahn "are interested to manufacture war machinery, equipment, munitions and supplies or products of all kinds, and to act as agents, intermediaries or otherwise in obtaining, introducing or placing business or orders for war machinery, equipment, munitions and supplies or products of all kinds as may be furnished, dealt in, manufactured or supplied by other persons, firms or corporations whether in the United Kingdom, dominion of Canada, United States of America or elsewhere, and the parties hereto have agreed to incorporate, organize and promote a limited company for the above purpose."
In other words, these people were organized to make munitions, and in this contract there is nothing which says that they cannot use the Canadian government's machinery to make munitions for some foreign power. When one follows this thing through one begins to realize that here was a group of men without a plant and without any particular engineering ability. One had been mixed up with a radio company and the others were lawyers and brokers. These men come to this government, and the government points to ,them and says to the British war office, "Here are the only men who are capable of making Bren guns in Canada." If ever there was an insult to the heads of industry in this country, that was it. All one has to do is read the contract. Read what the deputy minister of defence said in his evidence. Read what the Minister of National Defence (Mr. Mackenzie) said in his evidence. Read what some hon. members opposite have said in the house. One cannot help but feel that these men considered the heads of industry and the workmen in industry in this dominion absolutely incompetent to do a job like that.
As the hon. member for Kootenay East (Mr. Stevens) said this afternoon, manufacturers come to Ottawa to see all departments of government. They pay their own expenses to come here to bid on contracts in order to get government business. All this government had to do was to say to the steel manufacturers of this country: We want these guns made and we want other arms and munitions made. These men would have come here. The heads of industries in Canada are loyal enough to give of their time, of their experts and of their office staffs and to spend their money to help the Department of National Defence to build up an effective defence force. Yet the Minister of National Defence and the deputy minister of national defence say to our Canadian manufacturers: You are not
competent; we cannot trust you with this job; it is too intricate a job for you, and we are going to give it to a man who had a radio company that failed, to a couple of brokers and a couple of lawyers, and the patronage is going to a member from the city of Toronto. That is the story in a nutshell.
Surely, Mr. Speaker, the members of this house cannot help but feel that the contract is not only improvident but unfair to the Department of National Defence, because it is going to be years before we get guns. They are now buying the machinery in spite of the Davis report. The government would not wait. Mr. Justice Davis in his report did not exonerate the government from responsibility for the contract. Corruption, no; he said there was no corruption. That is quite true, but he did not exonerate the government in any other way. What he did say to them was this: Here is your baby; this is your child. In a very subtle way he said: It is a little dirty and messy; it ought to be cleaned up, and it is up to parliament and the government to do the job.
There is only one way to do the job, Mr. Speaker, and that is to cancel the contract. I think the Prime Minister himself should unhesitatingly say: I will agree to cancel the contract and to create a munitions board. Not a purchasing board, Mr. Speaker, because patronage would be just as vicious under a purchasing board. But let the Prime Minister and his government say: We will create a munitions board and give them the right to handle the whole business, so that we can clean this thing up and once more give the people of Canada some confidence in the Department of National Defence.


Ernest Bertrand: Mr. Speaker, as I listened to the hon. member who has just preceded me (Mr. Homuth), I was reminded of the well known saying that you must not take yourself too seriously; but in French we go one step further and say: Do not take yourself for somebody else. After hearing the hon. member ask that the Bren gun contract be cancelled, in spite of the vote that the house gave this afternoon, I might say to him: Do not take yourself for anybody else, because you are not yet on this side of the house.
If we were going to add to the cost of the Bren gun contract what this debate is going to cost the country, the promoters would be much richer than they are going to be with the contract as it stands to-day. We can well say, now that we have the report of the Hon. Mr. Justice Davis, that this whole affair is a tempest in a teapot.
734	COMMONS
Bren Gun-Mr. Bertrand (Laurier)
We are talking of a contract and of nothing else. It is not important to know who opened the door, whether it was the minister, the deputy minister or the hon member for Trinity (Mr. Plaxton). We have a contract before us and we have to examine it.
But before going into the contract I want to say something which is dear to the province of Quebec. There are very few high officials of this government who enjoy a higher reputation than my friend Major General LaFleche. From the fall of 1914, when he attended his military school to get his lieutenancy, right down until to-day with the high rank he has now attained, his life has been, I think, a true expression of patriotism and of outright devotion to his king and country, and to his position he brings a very well-balanced intelligence and devouring energy. It would take more than the libellous pen of Colonel Drew to break that reputation so far as we are concerned, and we all applaud Judge Davis when he says in his report:
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.
And it is well for the hon. minister to say that corruption has never been charged against anybody. They are going into their second trench of defence. When this article of Colonel Drew's came out, rumours were going around that there was a mighty scandal in this affair, and that Colonel Drew would prove it. We have the idea that this attempt to discredit Major General LaFleche is due to the fact that Colonel Drew and the Tories, and especially the Tories of his species, because there are good Tories, could not reconcile their ideas with the fact that Major General LaFleche is the head of a big spending department and yet of French extraction.


Robert James Manion: Nonsense.


Ernest Bertrand: All right,
but this was in the air last year, and we were all prepared for it.


Robert James Manion: That is filthy stuff.


Ernest Bertrand: The rumour
was all around that there was going to be an attack upon General LaFleche. The hon. leader of the opposition was not in the house then.


Robert James Manion: I never knew of any such thing.


Ernest Bertrand: I said the
hon. gentleman was not in the house. Well,

it came out this year; it came out, if you will pardon me, Mr. Speaker, like an abscess, and it is not surprising because Colonel Drew is the man who said in Plainfield, Ontario, in November, 1936:
It is not unfair to remind the French that they are a defeated race and that their rights are rights only because of the tolerance by the English element who, with all respect to the minority, must be regarded as the dominant race.
We put two and two together; we put this together with the rumour that we heard last year.


Robert James Manion: I think in justice to an
absent gentleman, and a man who is just as courageous as General LaFleche, it should be said that Colonel Drew has denied that over and over again, and his denial has been accepted. There is an attempt being made now to make this an attack on the French Canadians. My wife is a French Canadian, and I would be ashamed to have anything to do with an attack on her race. I think it is filthy to attempt any such thing as my hon. friend is doing right now.


Ernest Bertrand: Colonel
Drew is not here to deny it. This statement that I have read has been published in every newspaper and I never saw a denial of it.


Robert James Manion: He has denied it many
times.


Ernest Bertrand: Well, I
think he should deny it once more. All through his article that we were called upon to read before it appeared in the magazine there appeared to be jealousy of the hon. Minister of National Defence (Mr. Mackenzie) and of his deputy minister, who have started doing something for national defence.
Several years ago Colonel Drew wrote that nothing was being done with regard to the defence of Canada, and as soon as something is started he condemns it. I have read the charge before the commission, and I have never found so many silly arguments put. together, all of which prove the futility of his accusations. One of his points is that the hon. member for Trinity (Mr. Plaxton) tried to deceive the Prime Minister (Mr. Mackenzie King) because, when he talked about this affair, he wrote " plants," plural, instead of " plant," singular, in his letter, although there are eighty acres of buildings in the old Inglis plant.
There are quite a number of arguments like that in Colonel Drew's charge before the commission, but I shall not take up the time of the house in discussing them. It has been said that a promoter is a man who, having

Bren Gun-Mr. Bertrand (Laurier)
an idea, meets another man who has money and seeks to deal with him, with the result that the man who has the money is left with the idea and the man who has the idea is left with the money. Colonel Drew, I understand, was superintendent under the Security Frauds Prevention Act, and this definition, in the work he had to do, must have stuck somewhere in his brain, because the main crime of Major Hahn and his group seemed to be that they were promoters. I am quite sure that Colonel Drew illustrates the meaning of the word " promoter " which I have just given to the house.
I wish to put on Hansard what the late Sir James MacBrien said about Major Hahn. Of course, to-day some hon. members who are attacking the contract are not aware of what Sir James MacBrien thought of Major Hahn. Let me quote Sir James MacBrien:
It will be a source of satisfaction to many Canadians who served at the front in the recent war to learn that a book on The Intelligence Service within the Canadian corps has been written by Major J. E. Hahn, D.S.O., M.C. There are few Canadian soldiers so well qualified as he to write a book on this important branch of the military work as it was organized, developed and carried out in the Canadian corps during the course of the great war. His record at the front was a brilliant one. Except for periods when he was incapacitated through wounds, he served continuously with.the Canadians in France and Belgium, and he has the honour of being one of the original members of the first Canadian division. A considerable portion of his service was as an intelligence staff officer with various formations, where he learned in the school of practical experience. Therefore, he brings special and valuable knowledge to bear on the subject of which he writes.
I wanted to put this on the record because of the attack that has been made against Major Hahn. The fact that a man was at one time a radio manufacturer, in the bad days while hon. gentlemen on the other side were leading the affairs of the country, with the result that his business went into receivership, is no reason why he should be blamed. I quite understand that these hon. gentlemen, the Cooperative Commonwealth Federation members, who are trying to have the greatest human quality, ambition, disappear from this good earth, are continually branding successful business men as public enemy No. 1, 2 or 3. I can understand that they might yell " shame." They are so narrow-minded that they would not even allow a business man to earn the income tax which they will require him to pay if, as and when they get into power.
Major Hahn got my friend the hon. member for Trinity to introduce him to the Minister of National Defence in order to *et the contract. Where is the hon. member
who has not solicited government contracts for some of his constituents? Is not a contract like the Bren gun one the best thing that could be secured for a constituency in which there is a labour element, such as Trinity? Let the electors of Trinity answer the question in the near future; but I do not advise Colonel Drew to run in Trinity in the next general election for the federal house, nor do I advise him to approach the district in the provincial field.
The question is not whether the contract should have been given to somebody else; it is whether there is ground for suspicion in the granting of the contract. I quoted the words of Mr. Justice Davis as to suspicion. The only points at issue, all of which have been answered by the commissioner to the complete exoneration of the Minister of National Defence and of everyone concerned, are the following: Is the contract a good one for the government? Is it being carried out according to schedule? And was the government right in not calling for public tenders?
The government had machinery that was idle in Valcartier and the government needed Bren machine guns. It would have cost a tremendous amount of money to build a government-owned plant, which might have been put only to temporary use. Every business man will understand that such a plant owned by the government could not have been used for anything but arms and munitions, and that the plant could not have been used to compete in the production of any ordinary line of steel products as against private producers. In this case the overhead expenses would have been exceedingly high, almost prohibitive. It was necessary to induce a manufacturer whose overhead expenses were partly absorbed by the manufacturing of some other goods to enter into a contract, and Major Hahn was found to be the proper man.
The statement to the public that the John Inglis Company had reorganized solely for the Bren gun contract is a premeditated misrepresentation. The commercial budget for the next five years provides for a business which is almost as high, apart from the Bren gun contract, as was done in the last good years of the John Inglis Company. It was furthermore discovered that the Canadian government and the company would both greatly benefit should a contract be obtained from the imperial government, then in dire need of help for the manufacture of arms and munitions. Major Hahn went to England with the necessary credentials to deal with the war office. He was found trustworthy and able to fulfil a contract for the manufacture of 5,000 machine guns. It is absolutely impossible to
736	COMMONS
Bren Gun-Mr. Bertrand (Laurier)
criticize this Canadian contract without at the same time criticizing the imperial contract. It has no bearing on the case, that Major Hahn went to England with the hon. member for Trinity or anyone else, or whether he waited five, ten or fifteen days before presenting his credentials. The net result is that he succeeded in bringing to Canada a good contract, which, coupled with the Canadian contract, will provide in Toronto a new industry and work for the citizens and at the same time lend a helping hand to the harassed war office.
During the inquiry an attempt was made to leave the public under the impression that the Department of National Defence had made a gift of the Valcartier machinery to the company; the hon. member who spoke before me (Mr. Homuth) repeated somewhat the same thing. Nothing is more-I would say more cowardly false. The machinery is lent to the company and, with the new machinery, remains entirely the property of the Canadian government. No hon. member has mentioned that in this discussion. Although one-third of the cost of the new machinery is paid by the war office, it remains the property of the Canadian government when the contract is terminated; and one-third of the cost of tools, et cetera is also paid by the war office, although they remain the property of the Canadian government. The Ross rifle plant furnished about one hundred machines out of four hundred required for the fulfilment of the contract. The Ross rifle machinery is valued at $212,000, while the new machinery is worth $964,000. By the signing of the contract the Canadian government immediately gained one-third of this amount, that is $321,000, plus one-third of the tools, dies, et cetera, worth more than $200,000. The argument that the government pays for everything, and a profit in addition, is childish in the light of these facts, and would not deceive even a village half-wit. What does it matter whether the government pays half the cost of the machinery or all of it? The profit is calculated on the cost, but the rental value of the machinery belonging to the government does not enter into consideration so far as the cost of production is concerned. This is one thing that hon. members who criticize the contract do not dare to say. The cost is calculated on the company's share of the assets only, not on the government's portion. If the plant and machinery were the property of the government, the profit would be calculated only on the cost of raw material, wages, and part of the overhead. It is absolutely unfair to compare this, a cost-
plus contract, with a contract that a manufacturer would obtain if he were coming here. On a cost-plus contract the government has to pay all the cost, even the expenses of the man who went over th.ere to learn what the Bren gun was. Now Mr. Sharp of the income tax branch calculated that the maximum profit would be 7-76 per cent, which is less than a reasonable profit in that kind of industry, as every business man will agree. Beyond all this there is a stipulation as to the maximum possible profit, $267,000, which is substantially less than 10 per cent.
Suffice it to say that Judge Davis, who cannot be said to be in the remotest way partial to this government, made three findings that have not been referred to by hon. members on the other side. These are that the contract was not subject to suspicion; that there were adequate powers of inspection, supervision and control; and that no substantial objection could be taken to the provisions of the contract. In view of this it cannot be said that the contract is not a good one for the government, as in fact it was found to be by the commissioner. In a cost-plus contract any good business man would charge depreciation on his machinery, and a fair rental value. Instead of being a gift to the John Inglis Company the use of the government's machinery reduces the cost and therefore reduces the profit. That made the Department of National Defence a partner in the contract. This is one point that I would ask my hon. friends the social crediters to remember, because that the government should own the plant is their ideal. Under this contract we can well say that Major Hahn is simply an employee of the government, working on a job basis. Everything belongs to the government except the machinery that was there which is going to be used.
It is a good contract. In spite of the fact that the inquiry was a serious handicap to its fulfilment, and that Colonel Drew and so many others asked that the work be stopped, work has been proceeding at high speed. Major Hahn got hold of Mr. Gillespie, the best expert of the Enfield plant, who had already planned the production of Bren guns in England, and the work under the contract is right up to schedule. When hon. gentlemen criticize and say they are simply putting the machine on in the plant, they are not absolutely fair. This is one contract, but it may well be divided into two. The simple fact of collecting all this machinery, assembling it and putting it to work is a big undertaking in itself. If it had to be done afresh it would

Bren Gun-Mr. Bertrand (Laurier)
take at least a year and a half or two years to get this plant together and ready to operate. There was no similar plant in Canada. When one considers the importance to Great Britain of having these Bren guns in the shortest time humanly possible, are we not justified in saying that the meagre pay given to Colonel Drew for his magazine article seems like treason money? It is not surprising that Colonel Drew's name is so well known in fascist circles in Canada. I suppose this is another statement that Colonel Drew will deny; but pamphlets were circulated in my province, and I have one here, in which Colonel Drew is named as one of the adepts of the fascist movement in Canada. This booklet is entitled, "Fascism over Canada," an expose by Fred Rose, and on page 45 I read this:
But Arcand and the forces of reaction have many other supporters in high places. Colonel George A. Drew is one of the people who is working for an alliance with Hepburn in Ontario and for a national government in Canada that would pave the way for fascism. The colonel travels from place to place, and under the guise of defending democracy, slanders most viciously all true democrats. Mr. Drew is honorary president of the Canadian Unity League, an organization financed by International Nickel for the purpose of combating trade union organizations. Such anti-labour organizations, using different names, exist throughout the country and are closely linked with the fascist movement.


James Shaver Woodsworth: May I ask the
hop. gentleman if that is by Fred Rose, the communist writer?


Robert James Manion: Hear, hear. No doubt it is.


Ernest Bertrand: I do not
know Fred Rose, the communist writer. .1 know Fred Rose who wrote this book; I do not think he is a communist. If he is, I am sui-prised at the hon. member asking me; he should tell me whether he is a communist or not.


Mr. BLACKMORE:: The hon. member
will be padlocked.


Ernest Bertrand: I am not afraid.
Was the government justified in not calling for tenders? To have an idea of what delay-means in this matter I might say that twenty-one Bren guns were ordered by the national defence department from England at the beginning of March, 1937, and they were delivered in January of this year, although pressure was applied to expedite the order. One must keep in mind that this government had to deal with the war office and could not open the secret specifications and manufacturing processes to any firms that were not first accepted by the war office.
On February 4, 1938, Sir Harold Brown calbled Colonel LaFleche as follows:
Must emphasize that any further delay may adversely affect the proposal. In this connection firm having done necessary technical investigation obviously has the advantage.
That firm was Major Hahn's. Then Colonel Loggie cabled General Caldwell as follows:
Re visit war office affecting gun I am of firm opinion that immediate action is essential and that any delay will jeopardize whole transaction.
These gentlemen who were representing the war office were in a hurry, much more so than was Colonel Drew, who wanted to close the plant here. The war office made it absolutely clear, in February, 1938, in a cable sent by Sir Harold Brown to the deputy minister of national defence:
as regards alternative tenders several months would necessarily be required for another firm to study job before making reasonable tender. This delay would be fatal to British interests in scheme.
These three cables have not been mentioned very often by those who criticize the contract; yet they are the three things that explain why bids could not be invited from the general public. There had been an extended correspondence for the purpose of obtaining the consent of the British government to the calling of tenders. Before Hahn could get the specifications it was necessary to make him an official representative of the Canadian government; otherwise the war office would not give them. The manufacturing processes, called working specifications in England, were only furnished to Major Hahn upon execution of the contract. They were never even nominally in the possession of the defence department until that time. I do not remember who it was that made it almost a crime for this government to nominate Major Hahn as Canadian representative in London in order to deal with the British war office. Major Hahn, with his remarkable war record, was the man designated, and he fully deserves the confidence that the Canadian government has reposed in him. As I said before, he was also found trustworthy by the imperial government which, as I understand it, was not born yesterday. When they trust somebody, and award a contract of such value, they take some care and make some investigations somewhere. It is not for us to know where they made those investigations, but we are certainly justified in giving our confidence to Major Hahn. Then Sir Harold Brown cabled General LaFleche on February 9, 1938:
Draft of Bren gun contract with John Inglis Company now- agreed in detail by war office.



Bren Gun-Mr. Bertrand (Laurier)
*tt

1 r
: u
They were waiting for the Canadian government to conclude its contract, and the Canadian government was assured that the imperial contract with the war office would be signed if the Canadian contract was signed. This is clear evidence that the imperial government would not allow competitive bids, and if it would not do so the national defence department could not allow them either.
I am one of those who believe we still have a good deal to learn from British methods of doing things, and I would not dare to criticize those methods in a field in which we are still in our infancy. The Tories, to whom nothing is good unless it comes straight from the British isles, are apt to forget this at times. After all, we remember the purchasing of horses and potatoes without tenders. Not only were there no tenders called; the merchants were told to sell their merchandise through middlemen. There are no secret specifications in the breeding of horses or the growing of potatoes. Therefore I say that the question of the secrecy of the specifications, the necessity of moving quickly and avoiding delays and the sine qua non condition of the imperial government left the national defence department no other alternative, and on this point, as on so many others, the commissioner has completely upheld the government.
Now, Mr. Speaker, I do not contend that there were no other manufacturers who could have satisfied the government as to their capacity to fulfil such a contract; but there is no proof whatever that anyone else did inquire about the matter or attempt to get the contract, and I for one am absolutely satisfied with the manner in which our government exercised its discretion. If to avoid a possible charge of political patronage this present government has to sign its contracts with social crediters, C.C.F.-ers and/or Conservatives, it is going to be too bad for more than half our Canadian citizens. When it was announced over a year ago that Great Britain would have aeroplanes and munitions manufactured in Canada, I read very little criticism and a great deal of praise. If this government had not taken the appropriate steps; instead of having them manufactured in Canada we would have had to buy the Bren machine guns somewhere else, and I do not know where, because England had its hands full with it own munitions program. Canada would have lost the English contract, which, after all, is going to be a factor in the labour world. In the opinion of many business men Colonel Drew's unfounded criticism and its repercussions might have resulted in many other contracts for arms

and munitions being lost to Canadian manufacturers. So I say it is impossible to criticize this Canadian contract without explicitly criticizing the imperial contract as well.
I take this opportunity of congratulating the Minister of National Defence upon his courageous stand in these difficult circumstances. National defence has been terribly neglected since the great war. No one ever thought there would rise up aggressive nations which would challenge the combined forces of democracy; but when nations such as Germany, Italy and Japan are asking for territory and threatening to invade French colonies and even part of France itself; when they call for a new distribution of wealth, meaning territories, it is time for us who have such a large territory with such a small population to realize more than ever that eternal vigilance is the price of liberty.


Mr. E. J. POOLE (Red Deer):: 
Walter Edward Foster: The hon. member should not quote newspaper articles making personal allusions to a member.


Eric Joseph Poole: I shall submit to your ruling, Mr. Speaker, but I have listened to many newspaper extracts being read in this house during the past few days.


Walter Edward Foster: The hon. member is out of order and it is my duty to inform him.

Bren Gun-Mr. Poole


Eric Joseph Poole: I would draw your attention, sir, to the fact that the hon. member who preceded me quoted from a communist newspaper.


Walter Edward Foster: Had I been in the chair I would have stopped him.


Eric Joseph Poole: We shall forget about newspaper comments for the moment, but there will be more of them in the future. The important matter before parliament at the present time is to remember the conditions which were brought about in the armament industry during the war and to see that they are not repeated. I think the best way to go about that and to see that the public shall not be victimized is for the government to cancel this contract and assume whatever loss may be incurred. I believe that would be cheaper in the long run. We should give serious consideration to utilizing the plant and equipment there is at present in Canada. Much of this is wholly or partly idle. There are manjf men in this country who have a certain training which would be useful to the production of Bren or other guns. We have the Canadian National railway shops and thousands of idle men. Surely these buildings and this labour could be utilized. We could provide our own equipment. If. that were done, there would be no necessity for investigations of this kind.
It is well known that the armament industry in general has contributed nothing toward peace, but has fomented war and internal strife wherever possible. The time to stamp out that sort of thing is now, not ten years hence. You cannot help people by expressing platitudes and regrets. Let each and every party in this house remember what occurred in the pagt and provide for the protection of the public in the future. The time to do it is now. It is an iniquitous practice, in my opinion, to let contracts privately for the manufacture of armaments. We are laying the foundations for the growth of the most insidious organization the world has ever known.
For further information in this regard I would refer the hon. members to the report of a committee which sat in the United States to study the munitions industry and report on the activities and sales of munitions companies. This report contains quite recent evidence and tells of the activities of these people at Geneva. It describes how they supplied both China and Japan with arms and furnished both sides in Spain with armaments. They are said to have fomented strife in the South American republics. There is no reason to believe that an armament industry which might be created in this country will be any different from any other armament industry.

As a matter of fact, the industry has within itself the seed of all these things. It can afford to pay thousands of dollars to lobbyists in order to persuade influential members of parliament and those in responsible positions in government to pass certain laws to give it liberty to extract its dreadful toll over a long period of years.
I said when I rose in my place that I was not going into the details of this contract. My only reason for rising was to sound a warning. While I did attempt to quote some newspaper articles, I must say that I am not impressed with all of them. I know that political advantage is taken of a matter of this kind. It is in the interests of the Liberal party to remedy the condition that exists. I feel that there are many members who sit on the government benches who believe that we should be most careful in handling the production of armaments and munitions. The time has arrived when these matters should be under the control of the government. It is in the public interest that this work should be done in our own factories. Only in that way can we be assured that there will be no recurrence of the iniquitous practices of the past.
On motion of Mr. Turgeon the debate was adjourned.



CITY OF OTTAWA AGREEMENT


[Stage Direction]
Hon. P. J. A. CARDIN (Minister of Public Works) moved that the house go into committee at the next sitting to consider the following proposed resolution:
That it is expedient to introduce a measure to authorize the Minister of Public Works on behalf of his majesty to enter into an agreement to pay to the corporation of the city of Ottawa the sum of $100,000 for the year ending July 1, 1939.
He said:. His Excellency the Governor General, having been made acquainted with the subject matter of this resolution, recommends it to the favourable consideration of the house.
Motion agreed to.


[Stage Direction]
Hon. IAN MACKENZIE (Minister of National Defence) moved that the house go

Defence Purchasing Board
into committee at the next sitting to consider the following proposed resolution:
That it is expedient to introduce a measure to establish a defence purchasing board with exclusive power, subject to approval of the governor in council, to enter into all contracts for the purchase of munitions, equipment, materials and supplies required by the Department of National Defence in cases where the expenditure exceeds $5,000; to provide safeguards to assure that such munitions, equipment, materials and supplies shall be purchased at a reasonable cost to the government and without unreasonable profit to any manufacturer or supplier thereof; to provide that salaries, wages and other expenses of the board shall be payable out of moneys appropriated by parliament.
To authorize the governor in council to borrow such sums of money as may be required to pa}' expenditures of the Department of National Defence which are chargeable to capital account in the appropriations provided by parliament for the said department; and to provide a sinking fund sufficient to retire in ten years the said sums borrowed for capital expenditures of the said department, together with interest thereon at three per cent per annum.
He said:	His Excellency the Governor
General, having been made acquainted with the subject matter of this resolution, recommends it to the favourable consideration of the house.
Motion agreed to.


[Stage Direction]
Hon. ERNEST LAPOINTE (Minister of Justice) moved that the house go into committee at the next sitting to consider the following proposed resolution:
That it is expedient to introduce a measure to establish a commission with power under the Minister of Justice to administer, control and manage the penitentiaries; to provide for salaries of the commissioners and assistant commissioners; and, generally, to repeal and reenact with consequential amendments the Penitentiary Act.
He said:	His Excellency the Governor
General, having been made acquainted with the subject matter of this resolution, recommends it to the favourable consideration of the house.
Motion agreed to.


[Stage Direction]
Right Hon. W. L. MACKENZIE KING (for Mr. Rogers) moved that the house go
into committee to-morrow to consider the following resolution:
That it is expedient to introduce a measure to amend the Technical Education Act to make available, for the purposes of the act, any portion of the unexpended appropriation during the period of five years succeeding the fiscal year ending March 31, 1939.
He said:	His Excellency the Governor
General, having been made acquainted with the subject matter of this resolution, recommends it to the favourable consideration of the house.
Motion agreed to.

[Stage Direction]
Right Hon. W. L. MACKENZIE KING (Prime Minister); Mr. Speaker, the government would have liked to'rnove the house into committee of supply to-night, not with a view to taking supply this evening but solely in order that some supply may be taken up in the latter part of the week should we be through with the Bren gun debate before Thursday or Friday. I understand that hon. gentlemen opposite do not wish the government to take any supply at this stage, and if that is the case I would move the adjournment of the house.
Robert James Manion: Mr. Speaker, the attitude that has
been taken both by this group and by the party to my left has been taken because private members' resolutions-nobody is to blame for this-have been practically pushed off the order paper. There were no private members' resolutions taken on Monday; the situation will be the same to-morrow, and private members felt that they had some rights to demand for their resolutions on the order paper. The taking of supply was not particularly objectionable so far as we are concerned except from the standpoint of private members, and I just wanted to make that clear.


William Lyon Mackenzie King: May I say
to the hon. leader of the opposition that as far as private 'members are concerned, Wednesday is their day, and their right to debate private members' motions on Wednesday will not be affected at all by our going into supply to-night. Monday also is private members' day, and that would not be affected by our taking supply to-night. But on Friday, which is not private members' day at all but a government day, we might wish to take supply, say in the evening, and we would be precluded from doing so without unanimous consent if we had not previously called an item in one
Bren Gun-Mr. Bradette

or more departments on Monday or Tuesday. It is a technical rule the house has imposed, but perhaps when the time comes the house will be willing to give us unanimous consent to take supply on Friday should we be short of other measures to take up on that day.


Robert James Manion: Can the right hon. gentleman tell me in what order these government resolutions will be taken up to-morrow if we get through with the discussion on the Bren gun?


William Lyon Mackenzie King: The government resolutions will not be touched at all. It will be private members' day, and their resolutions will be taken in the order in which they appear on the order paper. I have just been anticipating the business for Thursday and Friday.


[Stage Direction]
Motion agreed to, and the house adjourned at 10.45 p.m.
Wednesday, February 8, 1939