Canadian First World War Contract Scandals & Public Accounts Committee 1915, Investigation.

War Contract Scandals as investigated by the Public Accounts Committee of the House of Commons Ottawa, 1915 • Also the purchase of Boots as investigated by the Special. “Boot Committee” Appointed by the House of Commons Ottawa 1915. PUBLICATION No. 44. The Public Accounts Committee investigated on:- drugs, bicycles, boots, binoculars, field dressings, motor trucks, automobiles, horses, “shield” shovels, housewives, jams, submarines, Valcartier lands and the burning of clothing, of First Contingent CEF.

 
No Tenders, No Competition-

 GOVERNMENT PURCHASING SYSTEM LOOSE, IRREGULAR AND ILLEGAL PRACTICE CONTRARY TO REGULATIONS.

 

“IT WAS WORSE THAN THAT: THEY WERE NOT IN COMPLIANCE WITH THE ACT.”-The Auditor-General of Canada, before the Public Accounts Committee, March 17, 1915, verified, his letter of Dec. 4, 1914 to Militia Department, complaining that war goods amounting to over $1,000,000 had been bought WITHOUT ORDERS-IN-COUNCIL AS REQUIRED.

 

TORY PATRONAGE SYSTEM COMPELLED USE OF MIDDLEMEN. “I saw Colonel Jones, an officer of the Militia “Department. H” said that the Government “WOULD NOT DO BUSINESS DIRECT WITH OUR COMPANY-We were prepared to do business direct if the Government saw fit to do “business with us AS WE DO IN OTHER COUNTRIES-The prices we charged Powell (the middleman who added $9,000 profit) are the prices “we charge the French, British or Russian Governments for hundreds of carloads of goods.”-W. J. Shaver, representative of Bauer & Black, manufacturers of Surgical Dressings, before the Public Accounts Committee,’ on March 23rd, 1915.

 

Tory Patronage List: WHAT GENERAL HUGHES SAYS. In the dying hours of the last Session of Parliament, Major General Hughes, in his usual bumptious manner, informed the House that there was no patronage list in his Department: What did his Director of Contracts, Mr. H. W. Brown, say before the Public Accounts Committee on April 9th, 1915.

 
A TORY PATRONAGE LIST SINCE 1911. “From 1906 to 1911 there was not very much “in the way of a patronage list; I was given a “pretty free hand and I bought without much “reference to any patronage list-There is now a “patronage list. WE BUY FROM THAT LIST-It “is a very large list now I suppose we have 8,000 “names on that list.”-H. W. Brown, Director of Contracts, Department of Militia before the Public Accounts Committee on April 9, 1915. WHO IS RIGHT?

 

Public Accounts Investigation 1915:

 
HOW THE INVESTIGATIONS WERE BROUGHT ABOUT. Repeated and insistent demands by Liberals in Parliament were met by subterfuge and delay. Results of investigations fully justified the Liberal demands. ‘But for’ the insistence of Liberals, the facts as to middleman’s graft, Government incompetence, lack of proper inspection, etc., all resulting in enormous waste of public money, might never have become known. Prior to the meeting of Parliament, which was formally opened on February 4th, rumours of irregularities in the purchases of war supplies in Canada were rife throughout the Dominion, from Atlantic to Pacific. There were hints in the newspapers, street gossip everywhere indicated something Wrong, but there was no proof and there could be no proof because all the official information was locked up in the various Government departments-and the Government was not giving any information.

 
MANUFACTURERS COMPLAINED OF MIDDLEMEN. There is proof that the Government knew very well that there was something wrong. Early in the autumn, not very long after the War broke out, the Canadian Manufacturers’ Association found there was something wrong and they wrote letters to Sir Robert Borden himself. They complained of the manner in which they were being treated by the Government; that they could not get orders while politicians acting as middlemen could get all the orders that were going. The manufacturers complained that they could sell their goods only through these political middle men.

 
BORDEN’S DUTY WAS TO INVESTIGATE. Premier Borden answered, asking for specific instances. Very rightly the Manufacturers’ Association replied “You are the Government, it is your duty to investigate.” The Premier asked again for specific cases which’ were supplied and referred t6 the Militia Department. Of course the Department said they were not true. Half a dozen times in Parliament, Premier Borden was asked to produce this correspondence. He admitted it was in existence and he finally premed to produce it but Parliament prorogued and the letters were never brought down. And yet on the day Parliament prorogued Sir Robert Borden, with a great Show, declared that he had been absolutely unaware of the middlemen.

 
RED TAPE DELAYS. This was the situation when Parliament assembled. February 8th, was the first business day of the session. On February 8th, Mr. A. K. MacLean, Liberal member for Halifax took the first step toward an investigation when he gave formal motion; “For a copy of all correspondence which has passed between the Auditor General and the Militia Department of the Government service, in regard to the expenditure under the War Appropriation Act.” On February 11th, three days later, the House passed the order, and the proper officials were notified to produce copies of the correspondence. The correspondence was not voluminous. It was afterward, printed in 44 pages. But the Government, with its horde of 12,000 new appointees in addition to the regular staff did not produce these papers until February 25th, just 14 days later. And then there was only one copy of each paper. On February 26, the next day, Sir Wilfrid Laurier asked if it was the intention of the Government to have the papers printed so that they might be available to all the members. The Minister of Finance promised “to consider the matter.” Four days went by in, “consideration.” On March 2, Sir Wilfrid asked the same question, this time of Sir Robert Borden, who responded that’ he saw no objection. On March 3, the next day, the order for printing was given.

 
ASK INVESTIGATION BY PUBLIC ACCOUNTS COMMITTEE. On March 5, Mr. A. K. Maclean, Liberal member for Halifax, moved that the correspondence be referred to the Public Accounts Committee. The Government took no action. On March 8, Mr. Maclean renewed his motion. On this second occasion the Premier himself, Sir Robert Borden, asked that the matter be delayed for one day. On March 9, the next day as suggested by the Premier, Mr. Maclean returned to the question for the third time and Sir Robert Borden again asked that the matter be delayed.

 
FOURTH TIME OF ASKING. On March 12, Mr. Maclean renewed the question for the fourth time. It was not till then that Sir Robert Borden gave his consent and the formal action was taken to refer the matter to the Public Accounts Committee. On March 12, Mr. Maclean renewed the question for the fourth time. It was not till then that Sir Robert Bordeh gave his consent and the formal action was taken to refer the matter to the Public Accounts Committee.

 
MORE DELAY. But there had to be more delay before the Committee could get to work, and it was not until March 17, that the first sitting was held, the House on the same day ordering that the proceedings of the Committee should be printed from day to day.

 
TIME WAS SHORT THEREFORE INVESTIGATION HAD TO BE CURTAILED. From the foregoing it will be seen that Parliament was in actual working session five weeks before the Public Accounts Committee got to’ work. The length of the session was uncertain-in fact on March 17, there was already talk of early prorogation. This being the case, members of the Committee realized that the investigation must necessarily be short. Knowing the large number of matters that should be investigated, they decided to confine themselves only to those cases in which evidence was easily and readily obtainable. They therefore investigated only the following:-drugs, bicycles, binoculars, field dressings, motor trucks and automobiles, horses, “shield” shovels, housewives, jams, submarines, Valcartier lands and the burning of clothing.

 
TORY COMMITTEEMEN WORKED HARD TO SHIELD MIDDLEMEN AND GOVERNMENT. The Government afraid of what might be brought out sent a Minister to be in daily attendance. Hon. J. D. Reid, Minister of Customs, officially represented the Government on the Committee. It is plain to be seen that this unusual custom in a Committee of the House was followed because of the fear of the Government as to what damaging facts might be brought out. That was why Mr. Reid was always is attendance at the meetings of the Committee. In spite of his reiterated statement that the Government wanted the fullest investigation possible, it is only fair and absolutely within the facts to state that every question asked by Conservative members of the Committee was asked for the express purpose and with the plain intention of covering up evidence that was damaging to their Tory middlemen.

 
LESS THAN THREE MILLIONS INVESTIGATED. One outstanding fact in connection with the investigation should be kept in mind. The total amount of money involved in the purchases investigated was no more than $3,000,000., this included the price of the Submarines. In other orders, the Public Accounts Committee’s investigation touched less than one-sixteenth of the $50,000,000 voted by 6 Parliament in August for war purposes.

 

War Contracts Not Investigated and Why?

 

PURCHASES NOT INVESTIGATED. Early in the Session Liberal members realizing that purchases in connection with the War supplies might come before the Public Accounts Committee endeavoured to get all possible information from the Government to enable them to investigate and ascertain to what extent the interests of the people had been protected by the Government. The Public Accounts Committee closed April 14th and the House prorogued on April 15th.

 
FLANNEL SHIRTS.-352,328 purchased. The Return asked for on March 8th and brought down on April 9th. Number purchased 352,328, prices ranging from $1.00 to $1.58 each. (See Sessional Papers No. 260).

SERVICE SHIRTS. -176,154 purchased. Return asked for on March 8th and brought down on April 12th only. The number of service shirts purchased were 176,154 at prices from $1.00 to $1.15 each. (See Sessional pps. 260B).

COTTON SHIRTS.-186,188 purchased. Return asked for on March 8th and brought down on April 9th. Number ordered 186,188, the price ranging from $1.00 to $1.15. (See Sessional pps. 260A).

FORAGE CAPS.-210,000 purchased. Return asked for on March 9th and brought down only April 7th, 210,000 purchased at an average price of $1.26. (See Sessional pps. 237).

UNDERWEAR.-282,438 Woollen Shirts and 366,448 Drawers purchased. Return asked for on March 8th and brought down on April 9th. Number purchased, shirts woollen, 282,438, ranging from $9.50 to $12.50 per dozen. Drawers 366,448 from $9.50 to $12.50′ per dozen. (See Sessional pps. 264).

SOLDIERS UNIFORMS.

A return was asked for on March 8th and brought down on. March 18th as follows:

  • Jackets …………… 228,170 @ $5.91 each
  • Trousers ………….171,032 @ $3.93 each
  • Breeches …………..79,000 @ $6.97 each

 

SADDLES. -11,000 purchased.Return for the number of saddles purchased was asked for on March 8th and was only brought down on March 26th and showed that 11,000 saddles were ordered at $45.00 each. (See Sessional pps. 207).
MOTOR CYCLES.-57 purchased. A return was asked for on March 8th and brought down only on April 1st. 57 were ordered ranging from $300 to $315.00 (See Sessional pps. 227).
CANVAS SHOES.-95,000 pairs purchased. At $2.00 a pair costing the Country $190,000.00. (See memorandum European War 1914-1915). The Country will require some explanations as to what use was made of these.
OLIVER EQUIPMENTS.-54,500 purchased. Price paid per set· $6.75 an expenditure of $373,475.00. All discarded. On April 5th, 1915, General Hughes in answer to a question asked by Mr. E. M. Macdonald, M.P. for Pictou, N.S., in regard to Oliver Equipment supplied the first Contingent stated: “It is reported that the Oliver equipment was withdrawn, and the division completed with Webb equipment from the British ordnance.” (See Unrevised Hansard, April 5th, 1915, page 2070).
OVERSHOHES.-120,000 purchased. Return showed that 120,000 overshoes were purchased at prices ranging from $1.70 to $1.96 per pair. (See Questions and Answers, Hansard, Feb’y 22, 1915.)
RAZORS.-62,363 purchased. Up to February 22nd, 1915, 62,363 razors were purchased at from $4.85 to $9.00 per dozen. (See Questions and Answers, Hansard, Feb’y 22, 1915.)
Returns were asked for showing the number of blankets, coats and great coats, socks, towels, etc., which have been purchased by the Militia Department for the War. The Government doubtless had this information at their fingers’ ends but the Session closed and nothing was brought down. With this statement it can be readily seen how easy it was for the Government to delay investigation in these war contracts, particularly when it is noted that it took the Boot Committee 26 days to investigate one item and the Public Accounts Committee investigated 9 items in 18 days.

 

The Patronage Maggot.

The Ottawa Citizen, for many years the leading Conservative newspaper of Eastern Ontario on March2:1th, 1915, commented on the absolute proof of the working of the Tory Patronage System as revealed in this investigation, in the following editorial.

 

WHERE ARE THE LOYAL ORDERS?

“There is a maggot eating at the heart of Canadian national life; and independent citizens of this country are standing by in silence, witnessing the work of the greedy maggot without a murmur. Materialism has burrowed into the body politic so deep that even things most dear to the honour of a nation do not escape it. Young men, young soldiers, are voluntarily giving their all, their lives, in defence of British freedom, British honour and British tradition; and the political maggot is eating into the health of the citizen army through the soles of its rotten boots.

Having eaten into the health of the soldiers who were strong and well, the maggot is now fattening on the sick and wounded, broken in the Empire’s war. Field dressings, even the salve and balm and bandages, for the poor broken limbs and shattered bodies of Canada’s wounded men and boys, have been made a medium for the cursed maggot to ply its loathsome business. Where are the upholders of British tradition, the loyal orders, the sons of England and the sons of honour in Canada? Must they remain for ever silent while such damnable maggotry is being laid bare?

Here it has been demonstrated and confessed before a committee of members of Parliament that a junior clerk in the Carleton Drug Company-of which William F. Garland, M.P. for Carleton, is principal owner-has made a profit of $9.000 on an order for forty thousand dollars worth of field dressings and other necessities intended for the brave men at the firing line. The drug clerk, a mere inexperienced youth, paid about $15 a week, is introduced to the militia department under the scoundrelly political patronage system tolerated by the pinchbeck political practise of this country.

It is pretended that the junior clerk of the Carleton Drug Company is allowed to appropriate this patronage be gotten $9,000 of public money without hint or interference regarding its disposal by his political masters. Taking the pack of patronage middlemen at their political word, and assuming that the $9,000 of profit on the field dressings and necessities for wounded men is to be disposed as pretended, is it not enough to bring tears of shame and indignation to the eyes of every lover of Canada and British honour?

The Red Cross fund is having to appeal for more help; and many good people are giving of their scant earnings to do what little they can for the tender nursing of the Empire’s broken men. For the sum of $9,000 eighteen trained nurses could have been sent from Canada and maintained at the saving line for a whole year perhaps till the end of the War-to wash the wounds and soothe, the pain-racked bodies of Canada’s injured Soldiers. One hundred and eighty Red Cross beds could have been sent to the saving line to lay weary, shell-torn and shattered men upon, in cleanliness and comfort, so far as comfort is possible. But the $9,00~just one instance of the work of the maggot eating at the heart of Canada-is now deposited to the account of a junior clerk of the firm of the Carleton Drug Company, of which William F. Garland, M.P., is principal owner.

And the political colleagues of the honourable member for Carleton gloss over the work of the maggot by asking smooth questions. Field dressings and first aid necessities for the wounded are made to yield up a profit of 28 per cent-$9,000 of public money-to a politically appointed agent; and Mr. Blain of Peel glibly asks, “Is that regarded as high in your business?” And Mr. Fripp of Ottawa says to the Carleton Drug Company’s junior clerk, “You do not have to account to anyone for the amount?” .The clerk answers, “No.” Says Mr. Fripp, honourable member for this Capital and royal city, “You are going through college and this will help you?” And the obedient clerk answers, “Yes.” And the loyal citizens of Canada are quite calm and unmoved about it!

Within a few weeks the political packs will have scattered across the country, and if the ring-leaders have their way Canada will be plunged into the swirl and swill of a general election. Such patriot gentry as the head of the Carleton Drug Company, and the sophist members of the committee investigating the profits over the bodies of wounded soldiers, will be expanding themselves upon political platforms and appealing for the support of the loyal orders and believers in British tradition and honour! They will vow themselves to be the saviours of the Empire. What will the loyal orders and independent citizens say? Britain would surely abhor and repudiate such professed aid. Will it seem well in the sight of the Great Architect of the Universe?

 

Public Accounts Investigation Brought to a Close.

 

PREMIER’S STATEMENT. The Public Accounts Committee completed its partial investigation on April 14th. On the morning of April 15th, the last day Parliament sat, Sir Robert Borden undertook to sum up the evidence which had been taken before the Public Accounts Committee. The Tory Press has lauded him for his explanations and the stand he took. In one paragraph the Prime Minister stated: “I spoke to the Minister of Customs (Mr. Reid) who is a member of the Public Accounts Committee, with regard to the scope of the investigation. I spoke to him in the presence of the Minister of Militia and Defence (Major General Hughes) and I informed him that we wanted the widest possible scope given to that inquiry. If there had been any wrongdoing in connection with political expenditures, we desired it to be investigated to the full.”

 
The Hon. Mr. Reid did represent the Government on this Committee and it is true that he stated several times that the Government wanted the fullest possible investigation. It is also true, however, that this Minister and the Conservative members who took an interest in the investigation asked question after question with no other apparent motive but that of finding an excuse for the appointment of these middlemen. They even went so far as to communicate with Colonel Jones in the trenches in France regarding the statement of Mr. Shaver that he had been informed that a middleman must be appointed before his firm could sell field dressings to the Government. Colonel Jones replied that he never made any such statement. Colonel Jones’ statement must be accepted as also the statement of the Government, but the action of the Government speaks louder than all the statements that Colonel Jones or any member of the Government can make. The fact remains that the middleman was appointed and that they knew he was appointed and that they permitted him to draw over $6,000 of commissions. That ought to be sufficient evidence of the Government’s desire and intention until the famous transaction was dragged into the light of day by the Liberals. $72,006 taken out of Public Treasury and no members of Government knew of it. With regard to Mr. Foster purchasing horses the Premier stated:

“Mr. Foster was appointed as purchasing agent without the knowledge or consent or approval of any member of the Government. I knew nothing of it or I should certainly have absolutely prevented his under taking any such duties. The Minister of Militia knew nothing of it.'” Did the Premier realize what he was stating when he made this remark? What does the electorate think of the Prime Minister of Canada standing up in the House and making a statement that a private individual can come to the Department, take out between $72,000 and $73,000 without the Prime Minister or any member of his Cabinet knowing anything about it?

 

TWO MEMBERS OF PARLIAMENT ACCUSED. Let us see what the Premier said in regard to Mr. Foster. ‘ In the unrevised Hansard page 2690, he is reported: “I regret to say that the evidence-Mr. Foster’s own evidence convinces me that he did not have regard to that duty in the way in which I think the Parliament and people of this country might have expected him to perform that duty.” Also what he said in regard to Mr. Garland, as found on page 2695 of the unrevised Hansard: “He (Mr. Garland) had in his employ this young man who was devoting 12 or 14 hours a day to his duties and who received a salary of $75 a month. He not only permitted, but he encouraged and assisted that young man to make a contract with the Government under which, within a few weeks, he acquired a profit of $9,000. I cannot for one moment give my sanction or approval to a transaction of that character, because to say the least, it bound to arouse a very grave suspicion.” This no doubt was the proper stand to take. Thanks to the investigation forced by the Liberals, evidence had been produced which to say the least was not at all satisfactory so far as these two members of Parliament were concerned. But why should Mr. Borden .condemn these two members of Parliament and protect others? Why did he overlook the men responsible for the rotten boots? Why did he forget to mention his Nationalist Deputy Speaker Sevigny, who as the fore-going evidence will show, did as much in getting his sister contracts for drugs as Mr. Garland did in getting contracts for Mr. Powell?

 
Why did the Premier exonerate his Minister of Militia who permitted his private secretary to take out a patent on a shield shovel and spent over $30,000 of the country’s money on it. According to the evidence, he sent these shovels to Great Britain without handles, and the British Government found that they were unfit for service. Did Sir Robert Borden in his declaration state that every member of Parliament who was found guilty of wrong-doing such as Mr. Foster and Mr. Garland had been convicted of, would be read out’ of the Party? Not a bit of it. He made a statement intended to convey the impression that he was taking a high and noble stand for the good of the country and the honour of his party. But he touched only the fringe of the proved corruption and he left untouched, without word or hint of disapproval or displeasure, many in the rank and file of his party.

 

THE REMEDY. Mr. Borden suggested a remedy in regard to the purchasing of supplies. Hansard, page 2698, quotes him: “We propose, as soon as this Parliament prorogues, to take up the question of the purchases of supplies under the appropriation of $100,000,000 and we propose to have a commission appointed of either one man or three men.” In appointing this business man’s Committee what did Premier Borden do? He pronounced sentence of unfitness on General Hughes who undertook at the outbreak of the War to dispense the patronage of his Department. He pronounced condemnation on the members of his Government whom he had appointed a special purchasing Committee. He makes the plain and undeniable admission that he has not in his Cabinet men whom he could trust with the expenditure of this additional $100,000,000.

 

WHAT THE COUNTRY LOST. Mr. Borden in this speech said: “In respect of the binoculars, I would estimate the amount overpaid at $3,000 at the outside-I am taking 166 binoculars and allowing, roughly speaking. $20 overpaid in respect of each pair-and that in respect of the horses, from what I can gather from the evidence. nothing has been shown up to the present time to indicate that more than a like amount, that is, $3,000 has been lost to the country if even that amount has been lost. So that there is a total net result of $12,000 out of $50,000,000 or one-fortieth of one per cent, and of that $6,300 has already been recovered, leaving a sum aggregating one-fortieth of one per cent of an expenditure of $50,000,000.” Was the Prime Minister sincere in making this statement? Was he acquainted with the facts? Or was he making a campaign speech? Let us repeat what he says that out of an expenditure of $50,000,000, $6,000 has been lost to the country, or one fortieth of one per cent. We have tried to be fair in the compilation of this publication. It is not $50,000,000 worth of goods that were investigated but less than $3,000,000 worth; As Sir Wilfred Laurier said just the surface had been scratched but from this it is evident that considerably more than $6,000 was lost.

 

 

Let us summarize and estimate what the country did lose:

 

  • Horses………………………$83,139
  • Bicycles………………………28,770
  • Shield Shovels…………….30,940
  • Binoculars…………………….3,000
  • Oliver Equipment………373,475
  • Submarines…………….. 250,000
  • Drugs. ………… Thousands of dollars
  • Motor trucks……………….Ibid.
  • Clothing……………………..Ibid.
  • Boots………………………….Ibid.

 

Some of these items are absolutely proved as to others, the best that can be said is that the accounting or explanation is unsatisfactory and cannot be accepted.

 

 

© Spañard.

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