Motor Trucks: The evidence given before the Public Accounts Committee of the House of Commons respecting the purchase of Motor Trucks for the use of the soldiers was of a most interesting character. We shall not attempt to reproduce it because it is altogether too voluminous and much of it is technical. We shall try to give a fair summary of the situation as disclosed. It appears that two years before the War broke out, the Militia Department purchased, through representations made by one Mr. McQuarrie from Wylie, Limited, of Ottawa, three Gramm Motor Trucks. On this sale to the Department, McQuarrie received a commission of $1200 for which he gave a receipt to Wylie Limited which read as follows: “Received from Wylie Limited on April 22nd, 1912, $1200, for my influence with Col. Sam. Hughes, Minister of Department of Militia and Defence in securing from the Department an order for three Gramm Motor Trucks. This is in accordance with agreement with your Company, February 19th, 1912. (Signed) J. H. McQuarrie.
Mr. McQuarrie, it is well known, is a protégé and political henchman of the Minister of Militia. At one time he was a lay-preacher, at another, he was a chauffeur; but always a strong helper of the Major General at election times in his riding. When the War broke out McQuarrie appeared on the scene as a Motor Truck Agent and sold the Department eight trucks manufactured by the Russell Motor Truck Car Company at $1650 each equal to $13,200, for which he admitted he received a commission, probably 10%.
Russell, General Manager of the Russell Motor Co. were then appointed by the Minister of Militia as per the following letter: August 14, 1914. Dear Sirs:-I have pleasure in commissioning you to select for me, for the Department of Militia and Defence, using your best judgment, as many motor trucks as you ·can conveniently secure, up to twenty-five (25) to be delivered at Valcartier, Quebec, by the end of two weeks from. to-day-the 28th instant. I shall be obliged if you will also supply us with chauffeurs for these trucks. Faithfully, (Signed) Sam Hughes. Also suitable trailers-S.H. Messrs. Russell & McQuarrie, Chateau Laurier, Ottawa.
NO ORGANIZATION IN MILITIA DEPT: Considering the fact that Motor Trucks for military transport have in recent years largely displaced the ordinary horse wagon, one would naturally imagine that the Militia Department would be posted on the subject and would be possessed of sufficient information to do their own buying of trucks. Major General Sam Hughes had dinned it into our ears incessantly that he knew the war with Germany was coming. In view of that, it is difficult to believe that the greatest military Organizer of all time would neglect to see that his officials were thoroughly informed in regard to such an important detail of military organization as Motor Truck Equipment. Mr. Russell, however, stated before the Public Accounts Committee, (vide page 326) that “there was not no scrap of paper in the Department of Militia to indicate what the style of truck should be, what the body should be like and so on.”
GOVERNMENT AGENTS ACT AS BUYERS AND SELLERS: How did these agents appointed by the Minister of the Militia Department perform the duty assigned to them? The first thing Mr. Russell did was to constitute himself seller to the Government as well as buyer for it. He bought eight trucks at $3500 each, in all $28,000 from his own Company, the Russell Motor Car Co., that being the full retail price. It was stated in evidence by Mr. Russell that the wholesale price of the truck was $2800, so that the Government, although buying .eight trucks, which is a wholesale quantity for trucks, had to pay the same price as the ordinary consumer buying one. The Government was undoubtedly entitled to the wholesale or manufacturer’s price and it is clear that the Russell Motor Car Co. got $700 per truck or $5600 in all, more than they get for their trucks as they sell them in the ordinary course of their trade.
Russell and McQuarrie bought seventeen more trucks from different concerns and in each case the Government paid the full retail list price, that is to say, the price which any ordinary consumer buying one truck would have to’ pay. That retail list price is 20% greater than the manufacturer’s price to the trade. Mr. Russell stated in evidence that he made no effort to get I wholesale or manufacturer’s prices, and gave as his reason that he had information that there was talk .at Washington of not allowing motor trucks to go out of the country to belligerents and he was anxious to get the trucks.
SAM HUGHES SATISFIED: The Minister of Militia was evidently satisfied that the agents in buying trucks at retail prices although in wholesale quantities, and in part from their own Company did the correct thing because on September 2, 1914, he reappointed them to purchase a great many more trucks as per the following letter: “Ottawa, September 2, 1914. Dear Sirs:-Will you please proceed with the purchase of motor trucks and equipment for .the Department of Divisional Supply and Ammunition Park, according to the schedule furnished you, totalling 134 motor trucks, 7 motor cars and 16 motor trucks for the workshops and storage for parts, instead of having special tractors for this purpose. These trucks will be of three ton capacity, if you can secure a sufficient number of satisfactory make without too great a variety; if you have to use the two-ton trucks to secure a sufficient number, it will be necessary to provide an additional number so as to take care of that tonnage required. I am anxious that you should make use of the Jeffery trucks, if possible, as these have been recommended to me for military purposes. The trucks should be delivered at Quebec by 22nd September. (Signed) Sam Hughs. Messrs. T. A. Russell J. H. McQuarrie, Ottawa.
Under these fresh instructions McQuarrie and Russell bought in the neighbourhood of 140 trucks of which 60 were bought from the Russell Motor Co., of Toronto. These 60 trucks were not manufactured by the Russell Company; they were manufactured complete in the United States. The Russell Company whose General Manager was doing the buying for the Government simply stepped in and acted as middlemen. They bought the trucks at discounts of 15% and 10% equal to 24% from the retail list price, and sold them to the Government at the same list price less a discount of only 10%-so that they pocketed a nice profit, of 14% or over $20,000. The obvious question is why were these trucks not bought direct from the manufacturers, which would have saved that $20,000 to the country.
The other trucks about ninety in all were purchased from different manufacturers and agents on the basis of retail list price less 10%-instead of at the manufacturer’s price to the wholesale trade which is a discount of 25% from the list price. Mr. Russell further, as buyer for the Government bought from the Russell Motor Co., of which he was General Manager traders, Russell cars, ambulance cars, parts, etc., the total profit realized by the Company on all purchases from it, according to Mr. Russell’s own evidence being $30,125. Moreover all the trucks, cars, etc., bought by Mr. Russell as buyer for the Government from his own company, were inspected and. passed by himself or by Mr. McQuarrie who was acting in harmony with him.
SOME TRUCKS NO GOOD: It appears too , from a Return presented to the House of Commons on February 24th, 1915, that 38 two-ton trucks bought from the White Company and 26 two-ton Jeffery Trucks through the Russell Motor Car Company were found to be smaller than · the actual requirements, and are consequently not being used at the Front. · The Gramm trucks also developed weakness in the engine crank shafts.
RUSSELL MAKES $30,000 FOR HIS COMPANY: In fairness to Mr. Russell it should be stated :that he spent about three months in buying, organizing, inspecting and shipping the whole army truck and car transport without making any charge for his services, held that personally he got no commission or remuneration on any of the purchases he made for the .Government. As Government buyer he made $30,000 profit for his company, but nothing for himself. It will be obvious that the method of purchasing these trucks was a most unbusiness like one-indicative of ·the slap-dash devil may care policy of the Minister of Militia. A Government buyer should be absolutely independent and he certainly should not be both buyer for the Government and seller to it.
SAVING MADE .PROVING PREVIOUS LOSS: Mr. Russell evidently realizing that his dual position was somewhat anomalous declined to act on a commission appointed by the Minister of Militia to purchase trucks for the second contingent, the reason assigned being that he wanted to be free to try to secure business for his company. That commission consisted of:-Gen. MacDonald, Senator Geo. Taylor, W. K. McNaught, J. H. McQuarrie and W. O. Thomas. As it developed Mr. Thomas who is a recognized motor truck engineer expert controlled the situation. On his recommendation 150 Kelly Trucks were purchased from the Kelly Co., of Springfield, Ohio at a price of $550′ per truck .less than the same truck was bought for from the Russell Motor Co., who acted as middleman and who purchased from the Kelly Co. 1n this way Mr. Thomas claimed he saved the Government $180,000 on that trucks for the second contingent as compared with the price paid for the trucks for the first contingent. Mr. Thomas showed that it was not necessary to buy through agents the bought direct from the manufacturer at the lowest manufacturer’s price. It will be apparent that Mr. Thomas’ saving of $180,000 meant that practically that amount was lost on the first purchases.
A BIG BLUNDER: Although Mr, Thomas was supposed to be the adviser to the Commission in regard to all purchases of motor trucks, and is, indeed, paid a commission of 1 1/2 % on all purchases f or his .services,-in some way or other an order was placed by the Department in Canada for 150 bodies for the Kelly trucks at $168 ,each equal to $25,210 without his knowledge, and it transpired -that these bodies were quite useless as they were made for two-ton trucks whereas the trucks ordered are three-ton capacity. To save these bodies being a dead loss to the Government, Thomas is trying to work off on the Kelly Co. for use on two-ton trucks for the French Government.