SPEECHES Of HON. L. H. DA VIES, M.P. AND DALTON MCCARTHY, M.P. ":/i:;t- ON THE '■ Trv- CURRAN BRIDGE CONTRACT HOUSE OF COMMONS, OTTAWA, TUESDAY, 18tii JUNE, 1895. Mr. DAYIES (P.E.I.) Mr. Speaker, during the last session of Parliament, the I'ublic Accounts Committee was engaged at nearly all of its sittings in taking evidence in re- lation to the alleged frauds pei*petrated on the Government in connection with what is popularly known as the Currau Bridge Contract. That evidence was reported to the House at a very late penod of the session. There was also an investigation before the Excheciuor Court relating to the same sub- ject in which a great quantity of evidence was collected ; and there Avas an investiga- tion made into the subject by the commission appointed by the Government to investigate these matters n the summer of 1893. That evidence was before the Commission on Pub- lic Accounts in type-written form, though I believe it has never been printed in full. Towards the close of the session the House undertook to discuss the evidence which had been given before the I'ublic Accounts Conunittce ; but, as Avas very well remarked by some members who took part in the de- bate, sufficient time had not elapsed to en- able the members of the House thoroughly to master the effect of that evidence. It seems right and proper, in view of the admit- ted fact that enormous frauds have been committed upon the Government, that the attention of the House should again be in- vited to the subject-matter, with a view to determining, in the first place to what extent these frauds h.ive been perpetrated, in the second place the cause throiigh which they were allowed to be perpetrated, and, in the third place, whether the guilty parties have been punished or whether any attempt has been made to insure; their punishment. Now, I do not think it is necessary to enter into a minute investigation of the larger portion of tlie facts connected with these frauds. Sufficient for us, and for our pre- sent purposes is it, I think, to take a gen- oral bird's-eye view of the situation, and I tliink it will Iw found that not only liave tlic; subordinates who have been engaged in the construction of these Avorks been guilty of fraudulent conduct, but that the depart- ment, and tlie Minister of the department, are, and ouglit to be, held responsible by this House for these fraud*. The fact of the matter is, Mr. Speaker, that we were about to build a bridge over the canal in the city of Montreal, knoAvn as the Lachine Canal, of a breadth of from 225 to 250 feet, and, in the session of 1892, the Minister of IlaiUvays came down to the House and made us a statement as to the necessity of this public Avork. Having first stated to the House that elaborate esti- mates had been made by the department, he asked the House to vote $170,000 for the construction of these Avorks, and the House took him at his Avord, and voted the money. Now, as a matter of fact, at the end of 1893 we found ourselves billed for ncoouuts iu coniioctlou with the work, toting up the respectable sum of about $500,(K)0, of wiiich about ^400,(K)0 have been paid, In actual liKures, ,$.'594,000. The mere recital of the facts on their face is startling, and calls for tlie earnest attention of hon. gen- tlemen on both sides of the House. The Minister of Railways ''dmlts— and that part of tlie case being conceded, a large number of references which otherwise would have to be made, are become unuecessaiy— that huge frauds were perpetrated upon the Government. I have before me the speech which the hon. gentleman delivered last session, in which, among other things, he says : Tho whole business seems to have been one of fraud and collusion. And, furtlier on, he says : ' ' So far as the department Is concerned, there was nothing in the Information as to the material furnished on the works, to lead the department to believe that the amount to be expended In the construction of the work would reach such an alarming &um, for I say that this amount of $394,- 000 Is an alarming sum, and I have no hesitation In saying that n large portion of that money Is money fraudulently obtained by parties employed in the construction of the work. So that we stand here to-day at the thresh- hold of this inquiry, with the official state- ment made by the Minister that in a con- tract of $175,000 to be carried out in the construction of two small bridges over the Lachine Canal, within telephonic communi- cation with the department at Ottawa, and within a hundred miles or so of the capital, $394,000 have been actually paid of which the greater part, as the Minister says, has been stolen, or fraudulently ob- tained from the Government. Mr. FOSTER. I do not think " the great- er part " are the words. Mr. DAVIES (r.E.I.) Well, I think the hon. gentleman has a right to have it accur- ate, and if I have in any way misrepre- sented the language used, I will correct it. The language is I have no hesitation In saying that a large por- tion of that money Is money fraudulently ob- tained by parties employed in the construction of the work. And, previously he had said, " the whole business seems to have been one of fraud aiid collusion." Now, that being the case, 1 say we have a right to look to see, not only who Avere the parties who committed these frauds, but how far the Government were responsible ; and if we find that the Government are directly responsible by hav- ing opened the door and permitted the frauds to' be committed by their negligent conduct, then they have a right to be severely censured. Now, let us see, shortly, what the nature of the work was, because we have to eliminate from the discussion the whole cost of construriiug the super- structures. There is no dispute about the construction of the steel superstructures, tlio whole cost, and the wliole fraud has arisen out of the construction of the sub- structures. -These were originally estimiit- ed to cost $82,000, and by the additional depth which the department afterwards de- termined to make the substructures of the bridges that was increased by an estimate ot $40,000, making $122,000. Weil, Sir, the ex- cess in the accounts rendered over what was estimated, was $312,000 ; and on the whole work, as I said, including the super- structures, there have been paid $394,000, of which $(50,000 was for the superstruc- tures, which I do not intend to go into very much. So here we have $334,000 paid on a small work which was estimated to cost $122,000. Now, we know very well that these estimates were very liberal. We had the opinion of Mr. Hannaford, a gentle- man connected with the Grand Trunk Rail- way, who said that on the 24th September, lie aqd his officials on the Grand Trunk Railway had made careful estimates upon this matter, ^.^d they estimated that the cost of the construction of the Grand Trunk Railway substructure, would be about $35,- 000 to the contractor, and he went on to say that if he had the contract at $35,000, he would expect to make $10,000 out of it. Well, now we come to the straight ques- tion : Hov/ was the work carried out, and how, far was the Government responsible ? Now, Mr. Speaker, right at the threshold, 1 say that $170,000 was voted to construct a public worlc of this kind, and tliat the Government has paid $394,000 ; and the first inquiry is, What authority had they to pay the money ? The House did not vote the money. Where did they get tlie authority ? I say they acted un- constitutionally, and illegally. What has been the law with respect to the construc- tion of all these public works by contract ? The Act lays down explicitly that these pub- lic contracts shall be given after tenders have been called for, iiublic tenders invited by the Minister, and that except in cases ! of pressing emergency iu which delay would be injurious to the public interest, these tenders have to be called. Now, we find the hon. gentleman, in the beginning of the construction of this work,' deliberately ignoring the policy which Parliament has laid down for his guidance. He was bound to call for public tenders for the construction of that work, unless he did violence to the policy of the Government, as embodied in the several Acts of Parlia- ment we have. The Acts of Parliament went on further to declare that not only should public tenders be called for, but in order that the public interest might be suf- ficiently safeguarded, the lowest tender could only be passed by on the authority of the Governor in rouncll, lacing obtained to pass it by, on good grounds shown. No expenditure is uutliorized by law unless that expenditure lias been sanctlonert by Parliament, except in one ease, and that is a case which has been tlagrantly abused by the present Government, not only in this contract, but in others. I wish to. call the attention of the House to this fact, be- cause it is owing to persistent and flagrant abuse of a pown* which i!iey really have not, and which they claim, that they have been enabled to squander public money, from time to time, in these contracts. The law has laid down explicitly : If, when Parliament Is not in session, any acci- dent happens to any public work or building whicli requires an immediate outlay for th^ re- pair thereof, or any other occasion arises when any expenrllturc, unforeseen or provided for by Parliament, is urgently and Immediately required for the public good, then, upon report of the Min- ister of Finance and Receiver General that there is no parliamentary provision, and of the Min- ister having charge of the service in question, that the necessity is urgent, the Governor in Council may issue his special warrant. Well, Sir, there is no man who would be bold enough to stand up here and declare that the facts of this ease come within the pui-view of that provision. The Gov- ernor General's warrant in this case was issued, I say, Illegally. The circumstances which could justify its issue, did not exist. There was a parliamentary grant given. That parliamentary grant was given after careful estimates had been prepared by the ' officers of the Railway Department, after those c-stimates had been endorsed by the Minister, after the Minister had laid them before this House, after he had obtained the sanction of the House to his request, and the specific sum of $170,000 was voted for the specific purpose of build- ing these two bridges, or rebuilding them, because they were there before. So that the department started by acting in a most unconstitutional and improper manner, thereby aiding so far as they could the wrong-doing and the misappropriation of public money. This matter has been brought before the House time and time again by the Opposition, and we have time and again pointed out that the Government improperly made use of Governor General's warrants to obtain money which they dare not ask Parliament for, and hon. gentlemen know well that if they had followed the law and come to Parliament and a^sked for tliis money tliey never would have obtained the sum they demanded. ' But having violated the law in that respect, what did they do next V I charge the department that they violated the law. the policy of the law, in undertaking to do the work in the way they did. They were bound by law to. call for tenders. They were to build two little bridges, each about 235 feet long. One would suppose HON L H D 1| that tills was not a work to tax the engineer- ing ability of the officials of the department, and as a matter of fact we have the state- ment made tliat i)revious to the work being given out most careful estimates had been made as to its cost. Tlie moment the Min- ister dispensed with the calling of tenders and began the woi'k by day's work, that moment he began to open the door througli which fraud could be pei-petrated. Poli- tical influence then began to be brought to bear. Hon. gentlemen who wished to give employment to political friends and who found they could not give this employment if tenders were called, found the door opened wide by the Minister himself l)y which they could pass thTOugli as many political pro- teges and friends as they liked, not tens or dozens, but hundreds of tiie political friends of hon. gentlemen opix)site could be employ- ed under this system of day's labour to an almost unlimited extent. As a matter of fact we 'aave evidence, not disputed but ad- mitted on all sides, that this result did fol- low, that no sooner was the law violated, no sooner .vere tenders dispensed with, and the work begun to be carried out by day's labour than hundreds of men were employed who otherwise would not have been employed, and the public treasury was wronged to that extent. We have the facts embodied in the commission's report, and we have the rea- sons there given why the Government under- took to build this structure by day's work, and they are the most silly and futile rea- sons to which I ever listened. The statement was made by the chief superintendent of the canal, and the statement which the de- partment adopted to show that it was better to build this structure by day's work, was, to use the chief superintendent's own lan- guage, " owing to the uncertainty of the mode of execution which circumstances will command." For my part I fail to under- stand what the meaning of that sentence is ; but that is +he reason given for departing from the law and building the work by day's labour, instead of by tender, as the GoA^ernment is bound by law to do. I am reading from the third page of the commis- sioners' report, where there is this quotation from Mr. Parent's wlviee to tlie Government. I compared it with the document itself, and I found it a literal transcript. There was no uncertainty as to the mode of execution. The hon. gentleman stated deliberately and plainly the mode of execution. It was well understood. This was not a large work ; two substructures were to bo built, on which steel bridges were to be placed ; the work was clearly anil A\^ell understood, and the most accurate estimates wen^ made be- fore the Government came to Parliament and asked any vote whatever for tlie Avork. What was the next step taken by the Government ? The next step was that, instead of hiring the men themselves on day's labour and keeping some check over them, they gave a private eon- tract to a labour contnictor to dup- l)l.v labour. If the door wan not suf- licicutly wide open to permit fraud to b(' pcrpctrati'd Ixft'orc, the (lovcrunu'iit were dctcruiined to open it wido cuoukIi this time, and so ou the lUth .lauuary, Mr. I'aroiU advised the departnieiit tliat the syslein of employinjf a contractor to supply labour was jidojited. and the department at once ae(»i)t- ed and adopted the sunj^estlou. What do we find V As a matter of fact, instead of publl bona fide ; the competition may not have l)een genuine, and in reality tliere may havi; lieen only one tender." No one can read the evi- dence without comintf to the conclusion that there was only one tender, and that it was Intended from the first that there sliould \w only one tendei'. The commissioner put tills in very diplomatic language ; they will not condemn their own employers, the Govenimemt, out and out, but they say 'that there is c*onsiderable doubt from the evidence as to wliCther in reality there was more than one tender. So that not only did the Minister dispense with tenders, not only did he determine to do the work by day's work, but lie determined to give all the labour to a contractor and that by private tender. The hon. Minister, I believe, intimated that he did not know all about it '; but I say in tliis matter at all events the Minister is as responsible as iiis deimty or anybody else, and any one who turns up the hon. gentleman's speech de- livered on 18th July last year, will tind that he admitted explicitly, without any reser- vation, that he liad full knowledge of all the facts. The hon. gentleman felt there was Boiuething wrong about the transaction. He stated himself that he hesitated some time before he came to the conclusion that in the public interest a contract should be let in that way, but after proper pressure had been brought to beat he decided to do so, and it was done by his advice, and he therefore must be held responsible by the House and by the country. And what was the first step taken ? They did not plunge into this thing, they approached it gradually ; first, only skilled labour was +o be supidied by the <'ontractor. not common labour. But no sooner had they mode one bivacl; of the law. no sooner had they overcome and violat- ed the law than they extended the contract to cover not only skilled labour but also ordinary labour, and as I shall show, that extension is one of the main causes through which enormous frauds were perpetrated, and tliis extension was made after the Min- ister had positive and direct knowledge that I the w0 under false pretenses. The judge who heard the evidence, made a summary of the facts which I have carefully compared with the evidence, and I found it to be correct. I beg the indulgence of the House to read from the Judge's remarks. He says : As stated above, I believe, after studying this I record, that there have been frauds committed to the detriment of the Federal Oovernraent, but I do not think that they were as large as al- leged. Mr. St. Louis' contract was extremely favourable to him. He was allowed $4 a day for a foreman stonecutter, day time, and $6 a day for the same, foreman for night or overtime ; $8 for the same foreman on Sundays, and at the rate of $12 for the same foreman for Sunday overtime. He was allowed $5 a day for a double team, and $10 a day for the same double team on Sundays. He was allowed $2.50 a day for the use of a der- rick, day time, $3.75 for the use of the same der- rick, night or overtime, and at the rate of $7.50 a day for the same derrick for Sunday overtime, and so forth on the same scale for stonemasons, stone- setters and skilled labourers. It is no wonder that Mr. St. Louis' bills must have been tre- mendous, when It is remembered that the job lasted about four months and that there were at times as many as two thousand men at work in the day time and one thousand five hundred men at work at night time. The men were paid al- ternately every week. Mr. Michaud tells us that some of the pays amounted to $34,000, some $10,000, some $15,000, and some $20,000. la my opinion, the main causes of all the trouble In this matter are : 1. The exorbitant prices stipulated for labour in Mr. St. Louis' contract ; and f) 2. The almost, unlimited number of men' allowed ou the said work, so numerous that they were In one another's way, and Mr. St. Louis cannot be held criminally responsible for these causes. Now, tliiit statement of fact is an abstract of the evidence simply. It is 30t tlie judge's opinion. It is merely an abstract of tlie evi- dence, and I l)ave carefully C()mpare won't mention, but which his liooks would hav.» shown Jiad they been produced, towards an election contest in Vaudreuil. Now, what did the Government do next ? They had a gentleman in con- nection with that work, who was con- nected with it fix>m its inception, and whose name was Desbarats. Mr. Des- barats, as the report sliows, was sent to Montreal in September, 1892, to examine the site of the bridges. The first plan was pre- pared by Mr. Desbarats under Mr. Trudeau. late Deputy Minister, and the second and third plans were prepared in Monti'eal by Mr. Desbarats and Mr. Parent. Mr. Desbarats remained in Montreal from November till 1st of March. Mr. Desbarats was dis- missed, and why ? Tliere was no living pub- lic ofiicial ill a position so tlioroughly to un- derstand those works as Mr. Desbarats. He had prepared the original plans, he had pre- pared the extensions, lie was in a position to check them, but Mr. Desbarats liad done that which was an unpardonable sin : he liad interfered witli tlie politicians wlio were connected witli tlie construction of this lirldge. We had liere a Mr. Kennedy, a poli- tical supporter of tiie (5<»vernment, a pro- tege and friend of tlio Solicitor General, .1 gentleman who was appointed to his po«itlon as superintendent of the canal at tlie in- stance of the Solicitor (Jenerai and Mr. Ogil- vle, and a Senator wliose name I forget. An hon. MEMBER. Senator Drummond. Mr. DAVIES (P.E.I.) Yes, Senab.r Druin- nmnd, Mr. Ogilvie and Solicitor General Cur- ran had Kennetly apiM>lnted to the position. .Mr. Kennedy tliouglit lie was going to iiave a free-hand, to run matters as lie like? place, and the hon. Kentienian tele- graphed down to Mr. Parent to brlnj; np the pay-rolls— Why ? Why V he had noticed tlien that wrong was being done and very properly wanted to see the pay-rolls, ^^'hat took place ? Parent ' came up withoiit the pay-rolls and informed the Minister tiiat lie could not get tlieni. He said tliat he could not get the time from Kennedy or the pay-rolls from St. Louis. The Minister sliould therefore have been doubly ' on the alert, when his chief engineer came here, after a charge of that kind had been made l)y the newspapers and alHrmed by the special officer he sent down to examine. When he knew that unboimded extravagance was going on, it was his duty to stop payment at once if he could not get the pay-rolls. But not a thing was done. Mr. Douglas was sent for by the Deputy Minister. Mr. =,- Douglas was told that Mr. Parent said that the " Star " article was exaggerated, but he orally c(jnflruied the report that the work was being carried on in a very expensive manner and that large numbers of men were employed who were not on the work. On page 134, you will see that Mr. Schreiber gave evidence in answer to questions put by one of the Government themselves, to which I will take this opportunity of calling the attention of the House : Sir Charles Hlbbert Tupper asked the question : Did you, or did you not, consider that It would be In the interests of the department and the ' public for you to go down and settle this question ■ '.' between Mr. Parent and Mr. Douglas relating to . the excessive number of men employpd ? — A. I ^ thought Mr. Parent w ould reduce it to the proper proportions. Q. You relied on Mr. Parent ?— A. I did rely upon him, certainly. ;. Q. What is the relative position of Mr. Parent and Mr. Douglas in the department ? — A. Mr. . ', Douglas has nothing whatever In the world to do ^ V with these works. '^ Q. Was he not Instructed to make this special Inquiry ? — A. I only asked him to look over •_ things and let me know. Q. Because you had seen an alarn-ing rumour ? ' — A. Exactly. Q. And having done that, you paid no more ' v^ attention to his statements, after you had got ■' the visit from the lo'jal superintendent ? That is your position ? — A. No, the understanding was, when Mr. Parent was up here, that he would see that there were not more men employed than were required. Q. You, are three hours away from those works ; you have telephonic communication with them ; you see an alarming report ; you send a special officer. What is his work ? Is he a man of ability, equal to Mr. Parent as an engineer ?— A. Oh, as an engineer, I don't know that ho has had control of tho works, but for sclentlflc work he Is decidedly his superior. Q. What Is hia posUlon In your department ?-- A. He Is bridge engineer. He makes the calcula- tions of tho strains of bridges to see whether the bridges of tho various railways are up to tho requirements of the Government specllica- tlons. Q. He was one of tho commissioners appointed by the Government to Inquire Into this whole subject. — A. He was. Q. You sent him down to make an Investiga- tion ? — A. He did not go down for that purpose. He had been down before. Q. Ho was pkilnly Instructed for this purpose, was he not ?— A. Yea. Q. My dlfflculty Is this : you sent him and got an official report from him. You find there Is a contradiction between these two men, Mr. Doug- las and Mr. Parent. You say you did not con- aider It your duty, when he was contradicted, to examine Into this work, which was done by your- self personally ? — A. I did not go down directly, but Mr. Parent was up here and saw me. Q. When did you first get the pay-rolls which would throw some light on the question ? — A. We will see later on In the correspondence. Q. Have you any idea of the number of men 7— A. No, I could not tell. Q. Did you ever attempt to consider or find out ?— A. I asked for the pay-rolls several times. Q. But when your ofllcers were in dispute, Ofd you take any means to settle what would be the proper number and what was the actual number ? — A. No, I should say net. There we have a statement of what was done, and we have pretty well too the opinion given by the head of another de- partment as to what ought to have been done. There was gross negligence on the part of the Minister of the department and his deputy— a negligence which cannot be defended. As a matter of fact, the Minister knew all about this. He says himself he knew all about It. Mr. Schreiber swears that he was in constant communication with the Minister at the time. Everything done or omitted to be done was done or omitted to be done with the knowledge and consent of the Minister himself. At the very time that this " Star " article appeared, we find a letter written by Mr. Kennedy to the Solicitor General upon this subject, which will be found on page 140 of the report. Mr. Kennedy was very mucli troubled about the extravagance that was going en and the scandalous manner in which the work was being conducted, and he wrote to th(i Solicitor General as follows :— I beg leave to acquaint you of the scandalous manner how certain things are being conducted en the Lachine Canal, in reference to the con- struction of works in connection with the new Wellington and Grand Trunk Railway bridges, as well as the renewal of the masonry of old Lock No. 1. Then lie speaks aoout Mr. St. Louis' tender, and proceeds to say : ^'ow, I can get all the above by the thousands at an average day's pay, without any discontent ; 8 wo have aUo Hupplled ourselves with the necea- ■ary dorrlckB capable of rtinnl'iK thi work of CI iiHtructloM of WclllnKton hrldKo ; thoy no'^r wuiit to turn all thos'' onKaRed on to thrlr list, which would liKToaHo the cost of tho work 75 per cont. [iniiKlno tliclr trying to place pick and Bhovtd iHhourcrH, whom I employ for $1.25 per day, at $l.S7Vi on hiK (R. St. Louis') list. As you arc, no doubt, aware, I am. and havo been, worklnR nlKht and day, to push thi; work forward, and It will be too bad, when completed, to have the i)re8H crylnR out a^alnHt tho dcpart- ment and (lovernment, tho enormous amount of money thiN brldRe has cost. If the hon. the Min- ister of Hallways and Canals Is cognizant of theisc facts, and endorses them, why, I shall accept In humble silence. Well. \\w Arinist»u* was coKiilziint becauxo the Solicitor (}»'ii(?ral, liinn«Mlhit(!ly aftor ho Kot tlii.s lot tor, waitod upon tho Mliiistor and inforinod him of KonnodVs statomont, as I gatlu.T— Mr. HACJGAUT. Wiiei-e is there any evi- deneo of that ? i • ■ ,v . Mr. DAVIES (P.E.I.) Lot mo finish the ponlonco—as I Kuthor from tho Solicitor (jioiioral's reply, bocuuso Mr. Solicitor General writes tho foll:)wiu>? day in reply to that same letter : My dear Kennedy, — I have seen the Minister of Railways and Canals, and found that all has been tendered for, including labour for the carrying out of the work of the bridge. Mr. CUKliAN. Read on. Mr. DAVIIOS (I*. K.I.) There is uothinK more on this point. I will give the hon. gentleman tho page and need not lengthen my speech by reading ihe rest of the letter. Mr. CURUAN. It is a vny short letter. .Mr. DAVIIOS (P.li.l.) If ^V? hon. gentle- man Is anxious tl'at I should i ""a.-l It, I cer- tjilnly shall. Th,- ,<■•,., ^ refer' ed to was that Mr. Sollcltoi- Oeuortu 'Ccelved a letter from Kennedy, the superlnte.;dent of the canal, pointing out the outrageous character of his contract anu the discontent sure to arise If the work was carried on In the same manner. He pointed out that It was being conducted In a scandalous manner, and the Solicitor (jieueral, on the verj- day he re- ceived the letter, went to see the ^Minister of Railways and Canals, and wrote the next day to Mr. Kennedy that he had seen the Minister. The remainder of the letter reads as follows :— As superintendent of the canal, you will, of course, have to certify to the accounts, and it will then become your duty to see that nothing ir. certified to that is not, in y ur judgment, ab- solutely correct. In the event of disagreement with any of the contractors as to the classifica- tion of work or the prices to be paid for it, you will, of course, have the matter referred at once to the Minister at Ottawa, so that you may not be held responsible in tho future for any applica- tion of any false principle in connection with the nature of the work done. A question may arise as to what is skilled labour, and here you may have somt' conflict with tho contractor ; but your plan is to refer the matter to the department and jjulded by their decision, In which ease you will not bo responsible. Mr. CIJKRAN. Hear, hoar. Mr. DAVIKS (r.E.I.) The hon. gentleman sees that wliile tho .Minister of Railways denied that lie liad knowledge of tlie facts coulalnod in KonniMiy's letter, wo havo the letter of liio Sollcltiu* (Jonoral saying that lie had s(!('n the Minister, and It is incon- ceivable that tho Solicitor (Jonoral could have written that rej)ly unless he had shown Kennedy's letter to tho Minister. Mr. ClIRRAN. If the hon. gentleman will allow mo to Interrupt l»lm, I would explain that I got Hiat hitler and <'aine to Ottawa with it, but when I found that the contract had been extended, I thought tho letter was too strong and that It would Injure Mr. Kennedy If I w(»re to read it to the Minister. I got the Information from tho Minister that the ccmtract had been extend- ed, and I wrote to Kennedy to be careful how he carried out the work and not to certify to anyllilng that was not absolutely coiToct, but I did not read Kennedy's letter to tho Minister. Mr. DAVIIOS (IVE.I.) Does the hon. gentle- man deny tliat ho went to see the Minister after he got Kennedy's letter. Mr. d'RRAN, Not at all, I have just said that I did. Mr. DAVIES (P.E.I.) That was all I was trying to prove, so that there was no oc- casi(m for the interruption. AVhat will the House think when I tell them that the day after Kennedy wrote that letter, St. Louis and Emard came to Ottawa to settle this matter with the Minister ; and as a matter of fact, on that very day, the 13th March, the contract with St. I^ouls was actually ex- tended to ordinary labour. It Avas not tmtll the 13th March— the day after Kennedy wrote that letter— that they extended St. liouls' contract from skilled labour to ordi- nary lal>our, and that Avas the catiso of all the trcuble. Thait was tlio thing which en- abled these men to perpetrate this fraud. That threw the door wide open to fraud, and we have the letter from the Solicitor General to Kennedy telling Kennedy to be careful how he certified and to throw all the bltime upon the department. I believe it came out in evidence that Mr. Emard Is a gentleman who had more than ordinary influence with the Government of the day. Nobody would imagine that such a contract as Mr. St. liOuls had could pos- sil)ly be extended from skilled to ordinary labour unless special influence was brought to bear. It was sworn that Mr. Emard was in close relatlousliip with the Minister of Public Works— a partner, I believe— and therefore a gentleman who naturally would have a grnat d(Mil of luttueiiPi' with I la- th April, lli(> (l('i)artiiHUil l)t'>;au to be Hoiiii'wiiat Htarlk'd at tiic> (.'iionnous huiuh wlilcli iIh'.v were hciiiK' called ii[»on to pay for tlu> coiiHtnu'tioii of tli(';4(> works. A letter was written on that date— and 1 ask the at- tention of the IIou.se particularly to that fact —by Mr. Schrelb(!r, Deputy Minister of Hall- ways and Canals, to tlie Minister. I quote from |»a>je lol of the evidence : Dear Mr. Haggart, — As i mentioned to you, I was not a little startled on reccivinR from Mr. Parent the pay-rolls and account for the month of March In connection with the Wellington Strnot bridges, which summed up to an enormous llgure. I at onco despatched Mr. R. C. Douglas off lo Montreal to look into the n)atter and ferret out all the information he could, and report lo me the position of affairs. The information he glvas me is as follows : — December, January and February pay- rolls, &c $ 7^,000 March 132.000 April 110,000 Contracts for superstructure CI, 000 ?382,000 Less materials, &c., to be creditad to this work and to be debited to other appro- priations, say 22.000 ^- ■ • •• ' ■ • ' ' ' • $3GO,000 and this he considers Is the minimum figure that the work is likely to cost. He goes on to point out that the excessive expenditure requires some explanation and says : AV'e must look for other reasons to account for the enormous expenditure over and above the ertlmate. Thv» d(>pa.rtment was now— on the 25th April — tliorouKhly aroused to the fact that a huRe fraud was being perpetrated upon them— and it is to the date that I wish particularly to call the attention of the House. On the 10th May, Mr. Schreiber makes a more formal report, callinj? the attention of the Minister to the letter of 'J5th April, and stating that since that date : The Investigations, then in progress, have been continued by Mr. R. C. Douglas, and the Infor- mation he has gathered leads him to believe that the cost of the work will be In e.xcess of that amount, which Is a most unsatisfactory state of things, calling for the closest investigation. An- other rather startling state of affairs has come to light in connection with the Lachlnc Canal. As I stated in ray report to you .above referred to He winds up by saying : Everything in connection with the LPfihine Canal is on an extravagant l)asls, if nothing more. I see no reason to change my views, and I sug- gest that some person or persons be appoinieJ to thoroughly investigate all matters in connec- tion with the expenditure during the last year. Now, Sir. that startling state of affairs, as I have shown, was first called to the attention of the Minister on the 2oth April. On the loth .May, his attention was formerly called to it l)y his de])uty, and a t'omndssion wan recommended to issM(>. And a comndsslon did Issue ; 1 Itelieve the Order In Council was passed on the 17th .M.-iy. Now, Mr. Si»eiiker. wliat does tliat cummisslon llnd ? I do ni>t wisli to weary the House with any long extracts from the rei>orl, but I will give Just two or three to slunw wliat tlie state of nuitters was at that time. Willi reference to the timber and lumber, the report states, page 10 : Mr. Henderson's tender was accepted on the 7th December, 1892. There haa h:-vn charged for timber and lumber, at the confra<^t prices, the amount of $,10,914.50, and other timber and lum- ber, not at contract pri'-.s, to an ain defraud the (Jovernment by hctl- tlous pay-lists and accounts." I cannot put it any stronger, I need not put it any strong- er—it is the severest language of condemna- tion wMch can be used. In summing up this matter, we find that for work which sliould have cost $122,000, accounts were rendered to the amotint of $430,000, being an excess of $312,000, and on this claim. $394,000 were actually paid, of which $334,- 000 was on substructure. The vote of Par- liament for $170,000 was evaded by the de- vice ol^ a Governof General's warrant, and wliile authority of Parliament liad been ob- tained to spend on that special work $170.- 000. the Government illegally atid unconstitu- tionally used the Governor General's war- want, by which means they expended $394,- 000. We find that the Public W^orks Act was Ignored deliberately so far as tendering was concerned. We find that the contract which in the first instance was loose and against the public interest, was afterwards extended to the Grand Trunk Railway, at a time when the Minister knew the contract was a bad one for the country. We find the door Avas opened wide for the perpetration of fraud, as the Minister's own commission- er reports. Wo find a superintendent) was •appointed by ofilcial influence', wlio thr(»al- ened all wlio stood in ills way with instant dismissal ; that other officials engaged in 1 he work stood in hourly dread jf tlie super- intendent, on 'account, as they expressed it, of ills political influence with the Solicitor (jcneral and other supporters of the Govern- ment. We find that false pay-ixills were cer- tified, whereliy enormous sUms of money were stolen. We find that men appropriated money wrongfully to their own use, as was loiwrted in the commissioner's report, and that those men had gone scot free. We find Miat an honest engineer, Desbarats, who at- tempted to stop tills carnival of extrava- gance was Immediately i-emoved from his position, by this political superintendent, Kennedy. We find $170,000 was obtained frcm the Government by false pretenses, and paid out after the Government was ?o satisfied about the frauds that they had is- sued a i"oyial commission. Under thesei cir- cumstances. Parliament had a right to as- sume from these two facts that the Gov- (1 rment should have done something to pun- isl'. tlie perpetrators of these wrongs. Last year we had some of tlie Government sup- IK.rters acting upon the statement with wliich the Minister closed his speech setting f< rth tlie intentions of the Government. " Let us hew to the line, let the chips fall where they may," said the hon. member for Simcoe (Mr. Bennett). He was going to l;iosecute all parties to the fraud ; he did not care how high they might be, or who they might be ; he demandedi that criminal prosecutions be Instituted against all these p( rsons. And trie Minister wound up his spTOch by saying : The evidence is hardly printed yet. I intend to bring the whole matter under the considera- tion of my colleagues, when they have time to consider it, so that we may see what is to be done for the purpose of punishing those who have been guilty of frauds which I have not the slightest doubt have been perpetrated on the Government. What have the hon. gentlemen done ? Wltli the exception of one prosecution Instituted against Mr, St. Louis, which has fizzled out, not an attempt has been made to punish any one of those men who have been en- gaged, I i"egret to say successfully engagetl, in a huge conspiracy to defraud this Gov- ernment. We have lost our money, we have lost it under circumstances for which I hold the Minister must be held politically respon- sible in this House. He was Iwund tQ ex- ercise twenty times the vigilance he did, he wiiis bound to exercise the same business krowledge and tact he would have used if he hac" been carrying this out as a private ccntract, and he did nothing of "the kind, Init he threw the door wide open for the jjerpetration of these crimes, wiilch he now admits and condemns, but which, if he had exercised . proi)er vigilance at the proper time ho might have stopped. 13 Therefore, Mr. Speaker, I move in amend- ment : That all the words after the word "That" be left out, and ^the following Inserted Instead there- of : — " It appears from the report of the commis- sioners appointed to investigate the facis con- nected with the construction in the year 1893, of the two bridges at Montreal across the Lachlne Canal, that in the building jf the substructures for these bridges the estimates for which were $122,000, the Go.vernment has been already actu- ally defrauded of about $160,000, while claims for large amounts for labour and materials alleged to have been supplied are still unpaid. That the construction of such substructures was carried out by the Department of Railways wif'out calling for public tenders, without proper supervision or check, and with a reckless aban- donment of business rules which invited and en- couraged fraud and wrong-doing. That after knowledge had been brought home to the Minister and department of the reckless extravagance which prevailed In the construction of these bridges, no real or effective attempt v/as made to ensure an honest carrying on of the work, but on the contrary enormous nums of money were, after such knowledge. Improperly paid to 1 ontractors and others, and the door was left wide open for the perpetration of fraud upon the Government. That although the evidence discloses the names of many persons who were parties to these frauds, no attempt has been made t punish any of them criminally except St. Louis. That under these circumstances the Minister of Railways Is respvonslble, and deserves the sever- est censure of thlr- House, for negligence. Ineffi- ciency and gross .i.'lsmanagement In connection with these works, and for the losses the country has sustained." OTTAWA, WEDNESDAY, IDth JUNE, 1895 Mr. McCarthy. Mr. Speaker, I trust. Sir, that I should pay sufficient regard to the I'eelluss of my fellow-members, and cer- tainly I shall consult my own feelings bet- ter, if I fulfil the promise which I now make, that my observations shall be very brief, sis brief ds they possibly can be on so Import- ant a question as the one which is now un- • der conLlderation. I do not like, on this oc- casion, to give a silent vote. The charge is not one impugning the honour or integrity of a member of this House, although there has been an attempt on the part of the Min- ister himself whose conduct has been im- pugned, as well as on the part of the Min- ister of Justice to divert, as it were, the attention of members from the matter .,, T"hich we are now considering, and to make J it rather appear as if the attack were of a personal character. If the charges were of a personal nature against the Minister of Railways and Canals he would not be sit- ting here now. After he made his explana- tion, according to our rules, he would have been compelled to withdraw from the House. The charge against him is with reference to the manner in which, according to the re- sponsibility which is due to this House, he has fulfilled the duties pertaining to his im- portant oQice. Upon the main features of the history of this most unfortunate trans- action, there is now practically no dispute, and if I summarize them briefly, it will be merely for the purpose of making plain to the House the argument I shall attempt to adduce based upon these facts. It will be remembered. Sir— perhaps we shall never forget it after this discussion, and after the different circumstances attending it— it will be remembered that it was in the first place proposed and suggested that the woru-S in connection with these bridges should be done for a total sum of $170,000. From that amount we may at once eliminate the cost of the superstructure as to which uo difficulty has ever occurred, and as to which no complaint has ever been made. We have not merely to deduct that $73,000, but we have also to deduct a further sum of $15,- 000, which was rendered unnecessary because of the arrangement subsequently made that the canal was to be unwatered. We there- fore get a sum of $82,000 as the estimated cost of these works, to which 1 am called further to add— although, perhaps, the amount is liberal— the $40,000 for deepen- ing the works, and enlarging them, which was estimated by the department, and by the different engineers who were examined before the two inquiries into this matter. We have the estimated sum, therefore, of the cost of the operations of these works, about which the difficulty has been caused. To that— becau.se I desire in this to be per- fectly fair— to that, the commission added a further amount, owing to difficulties that occurred during the progress of the work. I have read the evidence, and I have en- deavoured to understand it so far as one can without hearing it, and I am not quite satisfied that the commissioners arrived at the proper conclusion in this addition which they made, but I am not going to occupy the time of this House at this period of the discussion with any criticism on that. The conclusion I have arrived at is not deter- mined by questions of that kind, and I will assume that the commissioners wei-e right, and that this work might possibly have cost in the neighbour- hood of $200,000. I will pass by all these questions which have been debated on both sides, and to which the speech of the Minister of Justice has been mainly di- rected, and acquitting, so far as I am per- sonally concerned and so far as it Is neces- sary to consider here, the Minister or his department of any preconceived scheme to allow this robbery to take place, and treating the matter on the most favourable 14 possible basis that It can be treixted for th'j Minister, I will see to what conclusion any iiuiu, havIuK roKiird to his responsibilities, niui^t reach. J^yt iiio give the dates. In the lii-sit j)Iace, all these circumstances of suspicion wore certainly not unreasonably urged In this House, because from tlie extraordinary incidents that occurred, no doubt, this steal from Ihe public treasury was rendered pos- sible. Take the maJtter to which the Minister tells us he deimurred, thai; Is, the hiring of skilled labour In the first place. We know perfectly well that if It had stopped there, Mr. St. Douls' ultimate transactions could not liave obtained the magnitude which un- fortunaltely for the country they did. But Vie Minister was weak enough afterwards, without any apparent reason, and against his better judgment, as he now cells us, to apply the contract for the hlriag of skilled labour to labour of all classes and kinds. In- cluding ordinary day's labour. Undoubtedly this led very largely to the unfortunate trajis-'action which has caused so much dis- cussion In the country, and which is no doubt destined yet to attain considerable propor- tions before the people of this Dominion. Then, we pass from that, because after all it may be said, as I think I hear the Minister of Justice say, that that is but a small ques- tion or a nice question. It may or jiay not be so. Whenever the Ministers are pressed, I notice that they 'have a habit of falling back on their engineers ; and whenever the Ministers do anj^hlng right, as, for instance, in the case of the Intercolonial Railway, we hear nothing at all of Mr. Pottinger or Mr. Sdhreiber or the officers of the department, but the credit goes to the Minister of Rail- ways. So that it is always heads I win, tails you lose. Sir CHARLES HIBBERT TUPPER. If ^ the hon. gentleman is referring to a con- | versation which I -had with the Secretary of j State, and which I Intended to be private, | I said that this question of what was skilled j labour was considered a very nice one. j Mr. MONTAGUE. I would tell the hon. | member for North Simcoe that each time , the Minister of Railways has spoken of the Intercolonial Railway, he has given great | credit to his engineers. Mr. McCarthy. I am u. going to be diverted at this hour of the night to any fui'ther statement in regard to that. We probably all know what has occurred. While tlie Secretary of Sta.te may say that the Minister of Railways has given credit to his engineers, I do not think the Secretary of State will say that that has been his own pi'uotlce, because he has blown the trumpet for the Minister of Railways on that ac- count on every platform throughout the Dominion, without reference to any officers of the department. Now, Sir, at this hour of Uhe morning, and after all the discussion that has taken place, I am going to deli- berately avoid every criticism with reference to the conduct of the work. I can appre- ciate, and I hope I am fair enough to give sufficient weight to, the argument which has been urged that it Is not perhaps possible or reasonable for a Minister to have minute charge of all the works of his department, and that It would be unfair and Impioper to hold the Minister of Railways responsible for wiiat occurred on the works at Lachlne, pix)vidlng, of course, thaJt * upon the facts coming to his knowledge he took the course which as a Minister of the Crown he ought to have taken to relieve the country, as far as It was possible to relieve It, from the loss which had occurred. But, Sir, we arrive at the date when it seems to me It Is im- possible for the Minister to shield himself any longer or any further behind his engi- neers or the officers of his department ; and, in oi-der that that may be made clear to the House, let me give the accounts as they were presented at the time when the Minis- ter ihimself admits tthat he became aware that great extravagance had been commit- ted, namely, on the 24th or the 25th of April. Now, the Minister of "^'^stice to my surprise stated that the Minister of Railways had no knowledge of any fraud until the lOth of May. When I heard that statement, I thought I must have misread the evidence very much indeed, as well as the argument put forward by the Minister of Railways himself when he practically conceded that on the 24th or 25th of April he had ample and compleite knowledge of the fraud that was committed at Lachlne by this man St. Louis. Upon that point there ought to be no dispute ; and, as conclusive evidence, I give a letter written by the chief engineer of the department— though it is not by any means the fli*st notice of what was going on at Montreal that had been brought to the Minister's attention ; and let me ask if after that it can be pretended that the Minister of Railways had not adequate knowledge. I am not speaking merely of Implied or Im- puted knowledge, but I am speaking of positive knowledge which the Minister had as to the cost of this work above the esti- mate, wJtilch was first $122,000, and which was afterwards swelled to $200,000, when this letter of the 25th of April was received by him : Dear Mr. Haggart,— As I mentioned to you, I was not a little startled upon receiving from Mr. Parent the pay-rolls and accounts for the month of March In connection with the Wellington Street bridges, which summed up an enormous sum. So that before the 25th of April the matter had been mentioned by the chief engineer, and mentloUv,u to the Minister : I at once despatched Mr. R. C. Douglas off to Montreal to look into the matter and ferret out all the Information he could, and report to me the position of matters, the Information he gives me is as follows : — 16 December, January and February pay- rolls, &c., In round figures $ 79,000 March 132.000 April 110,000 Contracts for superstructure 61,000 Less materials to be credited t.o this work, and to be debited to other ap- propriations, say $382,000 22,000 $360,000 And this he considers the minimum figure that the work is likely to cost. Against an estimated expenditure of $170,- 000 and tlie $40,000, maljlng altogether $210,- 000, because \n this sum 'the coutraot for superstructure was also included. He goes » on : Superintendent Kennedy attributed all to the causes mentioned by Parent, except the latter, of which he makes no mention. When the estimate made by Mr. Trudeau, the then chief engineer, and Mr. Parent, the super- Intending engineer, early in 1892, Is considered, namely, $150,000 for 16 feet navigation, and $40,- 000 additional if a depth of 20 feet of water was given, making In all $190,000, the excess of ex- penditure requires some explanation. Mr. Par- ent explains that the excess of expenditure Is due to the large amount of ice which had to be cut up and carted away ; to the frozen condition of the excavation, to the breaking awaj of the coffer- dam on two occasions, to the solid frozen condi- tion of the crib and other obstructions which had to be removed, and, as I understand him to say, to political Interference. Superintendent Ken- nedy attributes it to all the causes named by Mr. Parent, excepting the latter, of which he makes no mention. I, however, am of the opinion that, whilst these pauses may have contributed to an Increased cost, that we must look for other rea- sons to account for the enormous expenditure over and above the estimate. Mr. Douglas is now down in Montreal looking into the matter and endeavouring to keep the expenses down to reasonable proportions. In the meantime, a Gov- ernor General's warrant is required for $200,000. Now, I start with that point. I deliberately pass by all the other inquiries. I am not concluding, I do not desire to conclude my- self as accepting the argument put for- ward by the Minister of Justice. But I think It is well to leave these matters which are in controversy to one side and to come ex- actly to the question about which there can be no dispute. At that date, all that has been paid to the contrr. -tor was $14,717.45. That was the payment of the January and February pay-rolls, and it had been made in March. So that at the date we have now come to, the 24th or 25th April, there had been of this sum which the (Government seem to boast has been stolen— and because stolen they think they are free from all re- sponsibility—only the amount of $14,000 paid out, which, there is but little doubt, Mr. St. Louis was honestly entitled to re- ceive. But in the face of this document, in the face of this notice, coupled with the other matters to which reference has been so repeatedly made, the Minister of Rail- ways, on the 24tb March ordered the pay- ment—I do not say he signed the cheques, because he says he did not— but he permit- ted his chief engineer and deputy head to give to this contractor a sum, wlilch was not paid until the 28th, of no less than $74,- 777.43. On the 29th April, another cheque was signed but not actually handed over until 5th May for another sum of $9,000, making an amount of $83,777, a large por- tion of which was evidently obtained by false pretenses, deliberately and designed- ly paid over in the face <^f the stutemeut made by Mr. Douglas that these works VNOuld cost nearly douljle the sum estimat- ed by the engineers of the department. Re- feiTlng to page 451, according to the ex- hibit which the Minister filed, and as to which there can be no dlsi ute, the accounts for labour In Marcl^ were as follows :— $73,013.13 ; $10,129.78 ; $7,203.64. These accounts had been received by the depart- ment on the 18th and 24th April, and had been examined on the 24th and 28th April, and certified to by the chief engineer on the 24th and 28th April. I may be told that the chief engineer, the head of the department, certified to the correctness of these accounts on the 24th and 28th, and you will observe that some of the accounts which were paid by cheque dated the 24th do not appear to have been certified to until the 29th. But Is that an excuse which we have any right to accept ? I shall not, at the moment, do moi-e than just make that observation, be- cause what I say I can say In one sentence when I make the whole statement which I propose to lay before the House, and which has been so ably laid before It by my hon. friend from Winnipeg (Mr. Martin). We : know now that after the 24th April, after : this letter was written on the 25th April, i whatever doubt there might have been at i that time I'lpened rapidly Into conviction ; I and before the early days of May had gone I by, the chief engineer and deputy of the ' department had become abundantly satisfl- ' ed, from what he had heard from Mr. Doug- ! las and what he had seen and known, that 1 gross frauds had been perpetrated. There is no question as to that. I will not do '■ more than refer here to the interviews be- ' tween Mr. Schrieber and Mr. Douglas, ; which took place on the 24th April and the ' 10th May. Upon the 10th May Mr. Schrl- I eber reported to the Minister that frauds ' had been committed, and that by reason of I these frauds It was necessary there should be an Investigation, and he recommended the appointment of a commission. In the I face of these conclusive facts, as to which j there Is no dispute, passing by all the doubt- i ful matters ; admitting that the Minister I was not wrong In letting the contract out ; by day work, admitting that he did not violate the act of Parliament, giving him the benefit pf all thart; doubt— let us say It was not wrong to hire skilled labour, let us say It was equally justifiable to engage ordinary labour, let us say that those notices which were brought to him from 16 time to time were not of auy moment and not calculated to put him upon his guard— what are we to say when, after the 10th of May, the department of which the Min- ister of Hallways is at the head paid out public money to a man, respecting whose con- duct they had issued a committee of in- quiry to assertain whether he had stolen money or not. Let me give the dates, Ou the 8th May, by cheques on the 11th $8,393.13 was paid ; on the 27th May $00,- 000 was paid ; on the 27t'i May by a letter— 1 do not see a cheque signed, put among the exhibits but the letter is here ait p. 175— ano- ther $1,000 wius paid ; on the (ith June, $39,- 000 was paid to this contractor, at the very time the Governor in Council had issued a commission of inquiry on the ground that frauds had been committed, i confess I cannot imagine a case stronger than that. I fully admit that a de- partmental head cannot be held re- sponsible for all the details of the working out of a department. I am willing to admit that if the Minister of Railways and Canals puts in charge of these worlcs competent and proper men to see to the performance of contruct.s he does all that in liim lies so far as th.tt goes. But, Sir, where it has been ascertained by his own departmental deputy that frauds have been committed, he takes again re- sponsibility when he authorizes the payment of the money. Because the oaly fran.i up to that time was in the demand that was being made. Why, Sir, I do not wondtr at the police magiatrate of Momroiil after all this prosecution, after listening to the evi- dence coming to the conclusion that it was impossible to hold tills man ?.-uilty of having obtained money under false pretenses. What is the money he was alleged to have ob- tained under false pretenses ? The $8,000, the $66,000, the $7,000, the $39,000 p.iid by the Minister of Railways, paid c(>rtaiuly before he had the report from his com- mission, but after die knew of such irregu- larities that he actually caused a commisslcn to be issued to prove and establish the facta. If I understood the Minister of Justice, and if I took down his language correotly, he says that the important point upon which hangs the responsibility of the Government, is what has been their conduct after the facts had been brought to their knowledge ; I agree Avith the hon. Minister ; I tliink that is a fair sta/tement of the responsibility, and 1 am quite willing, for my part, to deal with them on that ground. Sir, can there be any (luesition atxjut it ? I believe the fact is— and I want to state it though it makes no difference, as I think I shall be able to si ow from a constitutional point of view— that some of these imyments, I do not know how many, were made upon the authority of the acting Minister, the present Prime Minister. But I do not suppose the Minister of Railways wants to shirk his responsibility by saying that the misconduct was that of his present chief. Certainly, according to every rule and principle govefrnlng the relation of Ministers to their parliamentary head, lie was bound, on resuming the duties of his office to accept responsibility for all that had been done In the interim by tihe acting Minister. But, Sir, I have not stated the whole gravamen yet. Why, Sir. these accounts when they were paid actually und not been authorized by the Deputy Minister or even checked over. So we have the fact tliat the Minister of Railways as to part, and the Prime Minister as to tiie lialance wei a paying out the moneys of the country for accounts that were not checked by the proper ottlcers, and In the face of the Infor- mation we have ail lieard about and be- cause of which they thought It necessary to* ask for an inquiry. Sir, I am not going to occupy time with a further statement of the argument If upon this simple statement of undoubted and undisputed facts I am doing wrong in voting for the motion In amend- ment now In your hands, I must accept the responsibility. To my mind it would be im- possible for any man who undei-stands the facts and who understands the responsibili- ties which the Minister beai*s to the repre- sentatives of the people, whose money has been stolen, to do otherwise than record condemnation of the Minister's action in this matter. I Impute nothing to him personally, but I ask him what steps did he take, when he handed over his department to the charge of the Prime Minister, warning liim not to make these payments. What did he do when he knew that this man Avas demanding an i clamouring for his money and the Minister himself was going on a summer jaunt ? Did he take the slightest means to protect the treasury by leaving instructions that no money was to be paid out until this matter had been Investigated ? There is no evidence that he did anytlilng, that he took the slight- est precaution. The hon. Minister followed this case througii the Public Accounts Com- mittee at every step, urging everything that could be urged in defence of himself and his department ; but, from flist to last, he lias not pretended that in any sense he sought to protect the public treasury in respt;ct of the payments made during his absence, for which he is responsible on every ground. For my part, I put the question upon these grounds, and I draw attention now to the responsibi- lity which, as I understand, rests upon Min- isters of the Crown, and upon them alone. Sir, according to the constitution we have nothing to do with the officers of the depart- ments ; we have no right to censure them. The gentleman responsible to us is the poli- tical head, and he is bound to keep ids de- partment in order. I do not moan to say tliat if he shows that he has lieen circum- vented, and that he has done all that a reasonable man could do, upon the know- ledge being brought to Mm in order to save the public treasury from spollaition, I do mean to say that under these circumstances 17 he should be held responsible. But what I do mean to say is that we are bound to call him to account, and upon him i^sts tl»e re- sponsibility of establishing to the satisfaction of this House and of Parliament that he has taken proper means to prevent such robbery as took place In this instance. Why, it seems almost too ridiculous, after this man has been used for false pretenses and the law has been appealed to to recover the money paid over, that it should be clear that the money was paid with a knowledge of the facts. It may be that the Crown cannot be bound in such matters by the action of its officers, but if this were the case of a private party, it would be a hopeless thing to attempt to recover money paid out under such cir- cumstances as in the case of this money paid to the contractor, much less would the party receiving it be held guilty as a cri- minal in the courts of the country. Now, there seems to be some doubt as to this ques- tion of responsibility. Let me give the House a recognized authority as to the responsibi- lity of Ministers to Parliament for the con- duct of the officials of their department. Ib the work of the late Mr. Todd, vol. 1, page 628. he says ; As a necessary consequence of Ihe division of the Civil Service Into political and non-political officers, and of the acknowledged supremacy of the members of the Administration over all the subordinate officers, it Is required by your parlia- mentary system, that every branch of the public service should be represented, either directly or Indirectly, In the Houses of Parliament. This rluty Is performed by the political heads, who are themselves solely responsible for every act of administration, down to the minutest details of official routine. Having entire control over the public departments, they are bound to assume responsibility for every official act, and not to per- mit blame to be Imputed to any subordinate for the manner In which the business of the country is transacted, except only In cases of personal mis- conduct, for which the political chiefs have the remedy in their own hands. Sir OHABLES HIBBERT TUPPER. Hear, hear. Mr. McCarthy. I am glad to find that that meets with the approval of the Minister of Ju^ce. Nobody can deny ithat that is ttie proper constitutional rule. Now, Sir, I am not holding the Minister of Railways respon- sible for the wrongful acts of Mr. Kennedy, or Mr. Parent, but I am holding him respon- sible for the adts of Mr. Schreiber, done upon these different dates, when this money waa paid out ; because there is no pretense that these payments were not made under and,, by authority of the Minister directly, and with Ms knowledge, and there Is no pretense that Mr. Schreiber has been repu- diated. The Minister of Justice argued that the department could either adopt or repudi- ate the acts of its subordinates, and until the department took that course, the Min- ister could not be held responsible. But there is no pretense here that Mr. Schreiber, in making these payments, was not acting HON L H I) 2 in accordance with the authority and In- structions of his departmental h(?ad. Now, I re'*er again, upon Ijhe same point, to this work of Mr. Todd, at page -15 of the second volvime, and I will draw arttenljic i to a dis- cussion which tjook place in the House of Commons in England as to the impropriety of Parllument in any way interfering with dejwrtmental officers : llecent administrative reforms, however, have al) tended to reduce th3 proportion of the politi- cal element, by recognizing the supreme author- ity and responsibility of the parliamentary chief o<.' each department ; he must be held accountable tor all the weakness or Inofflclancy of all his sub- ordinates, and every member of the Ministry must share with him In their responsibility. Having thus secured an adequate responsibility for the efficient administration of the whole pub- I'c service, by means of the control which Is ex- ercised by Parliament over Cabinet Ministers, Parliament should carefully abstain from any di- rect Interference with the subordinate officers of Government. Then I read again from page 217 : But, under any circumstances, responsibility for the actions of subordinates should always be fixed upon their political heads. If Ministers find the (permanent) officers of the departments; do not work well under them, then It Is their duty to devise some remedy for this Inconveni^ ence ; but the responsibility should not be di- vided ; It should be Imposed only on those that are able to respond for themselves In the House. And then an Instance is given : i ■ ; Thus In 1873 the Committee of Public Accounts reported unfavourably of the financial administra- tion of the Post Office, and expressly disapproved of the proceedings of Mr. Scudamore, the second secretary of the department, In appropriating enormous cash balances on hand to a particular service, without the knowledge of the treasury, or the authority of Parliament. But In a debate In the House of Commons upon these transactions Mr. Gladstone observed that Mr. Scudamore's conduct might be very properly animadverted upon in a report of a committee, but that he was not a fit subject for the censure of the House. These last 'words being Mr. Gladstone's : It Is the political officers of this House who stand between the permanent officers and Its cen- sure, and If the House is bound to take the ut- most care to avoid the cardinal error of treating the permanent servants of the Post Office as proper objects of parliamentary censure. Then we deal only with the head of the de- pa rtmemt, and we deal, so far as I am con- cerned, simply with the matter as to which, as I have said repeatedly, there is no con- trovei^y and no dispute. But, says the Min- ister of Justice, this matter was brought up last session and underwent a discussion ; and be pleads now, though the plea is a novel one to tne, that the promise of the Min- ister of Railways that he would prosecute all these offenders, was accepted by this House in satisfaction of the delinquency of the Minister himself. Well, It Is an in- genious defence, but it is wanting In any authority ; it stands alone upon the argu- 18 irent of the Minister hlmscll'. Jim I deny, that because, durin;^ the closlii;; liours or' last session whep only V>' nii'mibcrs wore pre .en t, be* u'e the papers were fully printed. betV)ro it was possible to di>;e.sl these ae- cc units, this question was br(»uy:ht before the Floure, that the Ho'ise Is not now as free as It ever was to consider, and more deli- berately, as we are doing now, and to d ;- termine, what we should do, and what we should say with regard to the i)olitieal olli- cer who is charged here with the offence. But, Sir, if I were to venture upon any criticism with regard to any subsequent ecnduct. which I do not think at all either adds to or talies from the offence which, in my judgment has been committed by the Minister, I should ask how it is that the party who stole in the early part of 1893, that was reported upon by this com- mission some time in the monlL of .TaJUiary, 1S9-1, was never prosecuted until the month of October. 1894. Now, Sir, has there any excuse been given for that ? All the facts had been collected by the commission. They needetl no collectiing, they needed no group- ing, they Avere all in the department, and from the early part of 189.'}, in the month of May or .lune, when the money was paid not u stei) Is taken until tlie month of Octo- ber in the following year, when, hounded on by public opinion, hounded on by the comments that were made, by myself among others, upon the extraordinary fact that no attempt had been made to prosecute this criminal, as I think we may call him, tiie department commenced a prosecution in the month of October, which terminates seven months afterwards in the month of May. Sir CHARLES HIBBERT TUPPER. I would mention this fact, that the commission did not suggest any evidence of crime. Mr. :MeC'ARTHY. Then wliere did the evi- dence of crime come from ? Sir CHARLES HIBBERT TUPPER. Later on. . , .■; vy. ,<•' Mr. McCarthy. Well, all I can say is that my hon. friend the Minister of Justice takes a very charitable view of the case. If that commission did not show that there had been crime, then I do not know where or ihow you are going to find it. Mr. MULOCK. Did not that commission suggest fictitious pay-lists ? Sir CHARLES HIBBERT TUPPER. Mr. Frigou, who was the first wltuess« of crime, was not heard before the commission, but before the Public Accounts Committee. I\Ir. McCarthy, it was the first direct evidence, if you like, but surely you do not wait to prosecute criminals until you get direct evidence, and If tliiS man Frigou had never turned np and made a clean breast of it, surely it would not be pretended that no prosecution would liave been commenced. Sir CHARLES HIBBERT TUPPER. I think we ouyl.t to wait until we get evi- dence before we prosecute. Mr. McCarthy, ah I can say Is that I do not think that any subsequent conduct in the slightest degree removes the censure or makes in favour of the Minister him- self. Now, Sir, I dislike very much to com- ment upon the conduct of the police )uagi.s- ti-nte of Montreal. I observe by the public press that the outspoken terms in wlilch the police magistrate of Montreal was re- ferred tQ here by a much more important member of this House than I am, the Min- ister of .FuHtice himself, have met with severe condemnation at the hands of the press and also the Bar of fhe city of Mon- treal. Now, I cannot pretend to say what the practice is in Montreal, but* I think you will search all through the criminal practice in England, as well as In any other English- speaking comunmity, to find a case which, on a preliminary Inquiry, was dragged out to the length to which this Inquiry was ex- tended In Montreal. Why, I should have thought with pi\)per management-^and I am not desiring at all to reflect upon my fellow- membors of tlie profession who were en- gagetl In the case, because, as I say, I do not know what their instructions were— but I do think with proper management that case could 'have been presewtwl to the police magistrate In one or two sittings, and that In one or two sittings he ought to have been able to say whether a prima facie case was niade out for trial. Sir CHARLES HIBBERT TUPPER. I beg to say that you know veiy little about the case. Mr. McCarthy. The hon. gentleman seems to know more about it than I do. Sir CHARLES HIBBERT TUPPER. 1 have to do so. Mr. McCarthy. I never heard in all my experience, and it is a good deal longer and wider than that of the hon. gentleman, of such a case, and I challenge the hon. Min- ister to show when an investigation before a magistrate of a charge of obtaining money on false proteoses, was ever permitted to drag along such a length of time. Sir CHARLES HIBBERT TUPPER. The hon. gentleman never conducted a case in Montreal before Judge Desnoyers. And I say this, that while my experience is not as great as that of the hon. gentleman, it does not enable me to furbish up a case where a magistrate ever allowed so manv continu- ances and adjournments, against tn' wish of the Crown, as Judge Desnoyers allowed. The hon. gentleman will not charge the Ci-own Avlth not pushing the case. We pushed the case, but the magistrate had control. Mr. McCarthy. I do not charge the Crown or the Minister or those in charge of 19 the prosocution with not pushluji the case ; I nuM-oIy coiumeut ou the fact with which wo must all bo lustonlshed. But this I say, that the case against the Minister hks boon enor- mously strongthoned by the double fact, that the inaKistnito liavin^ lieard the case argued at lonjjtii, and not only listened to arguments but read factums, deliberately came to this conclusion that there was not even a prima facie case, although he was satisfied that the department and the country had been de- frauded by this man St. Ixtuis. And why ? I suppose because the money was paid to him. as I have pointed out, with knowledge on the part of the officers of the depaiiiment of the suspicious circumstances ; because the money was paid to him deliberately. And not only did the magistrate stand justified In his own estimation and by his own reason- ing, but the grand jury— and I suppose they were not affected with the same mania for listening to cases— were able to dispose of It In two days. Sir CHARLES HIBBEItT TUPPER. The witnesses would take two hours. Mr. McCarthy. The Minister probably thought that the grand jury would take six or seven montlis. The grand jury also de- cided thiit there was no ground for sending the man for trial. If the grand jury did not see a case made out for sending the man for ti'ial if this money is gone, as It is, unless perchance it can be recovered by a ci/il suit now '>eing brought—and certainly I should think that very doubtful if the Crown Is not in a better position tlian a private indi- vidual would bo when the money was duly paid with all knowledge of all the circum- stances—If these be the facts, what are we to do. what tire we to say ? Are we to say that there is no man responsible V Sir CHARLES HIBBERT TUPPER. Al- low me to say that tlio partner of the hon. gentleman speaking believes we will obtain the money in the civil suit. He is engaged by the Crown in obtaining it. Mr. McCarthy. I have no desire to differ from my partner as to whetlusr the money can be obtained or not. Sir CHARLES HIBBERT TUPPER. He knows the facts better than you do. Mr. McCarthy. I hope he will be a little more successful than the hon. gentleman's represeutatives have been in Montreal. I only say this, and I do not hesitate to say it, that if it was not the Crown that was a party to the suit, for tliere are technical rules to the effect that the Crown shall not be prescribed by the dishonesty and negligence of its own servants in seeking to recover money, I venture to state, on the little re- putation I have, thait the money could not be recovered. If the Minister of Railways paid this money to St. Louis with knowledge and notice of the facts, if I know anything about the rules of law which govern the re- covery of money paid under such circum- stances, I say the action would not bo suc- cessful. But the money being paid out by the Crown in this case, the Crown can set up the negligence of the Minister of Rail- ways. Sir CHARLES HIBBERT TUPPER. You are differing from the opinion of your partner. Mr. McCarthy. This plea may be urged by Hor Majesty in the case against this man, and I do not know whether Judgment would lie for the recovery of money under these cir- cumstances or not, and whether It may be recovered and not retained by the pei"8on Avho obtained It illegally and improperly In that respect. For my part I have no hesita- tion In voting for every line of the resolution which my hon. frleml has moved. I have passed by, because it was unnecessary at this hour to go Into them, various questions whicli have been so fully and ably discussed in the course of this debate. I agn>e Ihat there was no ground whatever for letting this work by days' labour. But the depart- ment and the Government are above all law. They pay no attention to the statutes. I was astonished only last year to find with respect to the Sheik's dam that, without a shadow of pretense, and the Minister of Railways admitted in his speech that there was no ground for his action, a contract was let to William Davis & Bro. without ten-uer and in violation of the clause in the Act of Parliament. If I read the Act aright, there is no ground whatever here, and when the Minister of Justice pleads the advice of engineers on the coustructio'i of an act of Parliament,' then I think he is asking a little too much at our hands. I (luite agree that in all matters of a technical nature the Minister has a right to rely on the officers of his department. But this is not a matter of engineering ; it is the matter of the construction of a statute. Surely the hon. gentleman oiin read the language of the statute and decide whether there is any ground under either of the clauses to do what he did in this nase, and whether this was a work that could be done more ex- peditiously by days' labour than by con- tract. Sir CHARLES HIBBERT TUPPER. The engineers thought so. Mr. McCarthy. They did not. Sir CHARLES HIBBERT TUPPER. They advised so. Mr. McCarthy, you win not find it In the record, or I stand corrected. The work could have been done just as expeditiously by contract. Moi'eover, the statute says that only when the work can be done more ex- peditiously and economically is permission granted to do work by days' laboui*. We have the fruits of economy in this case. So 20 I wholly atfi't'o with that clause In the re- solirtloin. One word and I have dono. Not only was the money paid In the manner mentioned, but the Minister went to the Governor General and aaked u) have a war- rant to pay It, and he deliberately did so. Here wafl the money expmided that Parlia- ment had voted, which, according to the esti- mate of the department, waa all sufflclent for Its purpose, two votes, one of which has not been refeiTed to, namely, an amount of $fiO,000 or $51,000 In the supplementary estimates, making altogether $220,000 In con- nwtlon with the Lachlne Canal ; but on tbo 4th of May we know that the Minister went to the Governor and represented thoit there were debts due by the Crown so preeslng In character and urgent as to entitle him to Issue a warrant. That was a dellbemte act on the part of the officer, and If the Govern- ment could by any means have enabled this man St. liouls to keep the money, they did It ■then, fOr they took every step which, according to my light. It was poss»lble to do In order to make that money and paj'raeut safe in the hands of St. IxnilB. ■:,:i,,»-:V,/< A... IK,-, ...l- K , ■ * '; '. f,- ..',: •"'■■' >i: ,„.;^w, ■, ■ >''VV , •..' 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