London Letter


Any publisher who suppressed the facts of this case would have been derelict in his duty, not only to his own readers, but to the country at large"

July 1 1939
London Letter


Any publisher who suppressed the facts of this case would have been derelict in his duty, not only to his own readers, but to the country at large"

July 1 1939



Any publisher who suppressed the facts of this case would have been derelict in his duty, not only to his own readers, but to the country at large"

On Tuesday, May 30, Horace T. Hunter, president of The MacLean Publishing Company, presented to the Public Accounts Committee of the House of Commons a statement setting forth the circumstances leading up to the publication in Maclean’s Magazine of the article by Lieut.-Col. George A. Drew which precipitated the investigation into the contract between the Department of National Defense and the John Dtglis Company, Limited, for the manufacture of Bren machine guns.

On the previous Wednesday, the Deputy Minister of National Defense had charged “the person or persons who started the Bren gun enquiry” with “traitorous” conduct, and labelled them as “liars” and as “men who have sold Canada, who have sold out Canada's defenses and the defense oj the Empire.”

Following is the text of Mr. Hunter's statement:

I SHOULD like to thank you, Mr. Chairman, and honorable members of this committee, for the opportunity of being heard.

In recent evidence here some very disparaging remarks have been made regarding those primarily responsible for this enquiry. The references were obviously to The MacLean Publishing Company, Maclean's Magazine and Col. George A. Drew, the author of the article, “Canada's Armament Mystery,” since all members of the Parliament were specifically excluded. We were accused of a “dastardly, traitorous attack”; of having “sold out” Canada’s defense and the defense of the Empire; of being “liars”; of having “hounded and humiliated" the War Office. It has been charged that this enquiry has "dangerously hampered and impeded” the armament program of Canada and has militated against British armament orders for Canada.

Later, at the instance of yourself, Mr. Chairman, it was suggested that certain of the phrases deemed offensive should be changed in the record. Major-General LaFleche offered an apology for being discourteous. But the allegations have gone out to the country. The words cannot be changed in the newspaper dispatches that have already been printed from coast to coast. And it seems clear that the apology oi correction was not intended to apply to the grossly unfair and damaging innuendoes and imputations against ourselves.

That is why we have sought the opportunity of informing your committee as to our motives in publishing the article which was responsible for the appointment of the Royal Commission, whose report is before this committee. 1 should like also to outline the circumstances leading up to the publication of the article.

We were astonished that a public servant should have questioned the loyalty and good faith either of a company that has served Canada faithfully in the publication of national periodical literature for a term of more than fifty years, or of a writer who has shown himself to be a gallant and patriotic Canadian.

It is not my intention to defend ourselves against any imputation of traitorous disloyalty. 'Ehe records of both 'Ehe MacLean Publishing Company and the author of the article sjxnk for themselves in that regard. But we do feel that this committee is entitled to know how the article came to be written. A recital of the facts will eff ectively dispose of any suggestions either of bad faith or of political motives.

The MacLean Publishing Company publishes twenty-seven magazines and business newspapers. They have 700.000 subscribers and approximately 2.(XX),(XX) readers. These subscribers and readers look to us to keep them informed on many subjects. One of these subjects is the manner in which public funds are expended. This is routine, everyday work for our editors. We gather facts in an unprejudiced, non-partisan way and we give editorially our interpretation of the significance of those facts.

In the ordinary course of their duties, the editors of several of our publications had been studying armament contracts. A great deal of information had been amassed before the Bren contract was signed.

As soon as the contract itself was tabled in the House of Commons, we obtained copies of it. Because of certain references to the contract made by the Minister of National Defense in the House of Commons we came to the conclusion that this contract was much more important than an ordinary Government contract. It did not seem to be of merely routine significance. It seemed likely that it would be established as a model or precedent for future contracts in the placing of munitions orders for the Department of National Defense.

We were influenced in this interpretation by statements made by the Minister of National Defense.

On July 1, 1938, Mr. Mackenzie is recorded in Hansard as having made the following comment;

“. . from the business point of view this is one of the finest contracts that was ever signed in the public interest of Canada.”

Later in the debate, he said:

“I want to repeat what I said. I would like to see this contract examined from a business basis, through and through. I think it is one of the finest things ever done, since we had to do it in Canada, for the Dominion.”

Believing the contract to be so important we published an extensive summary of it in The Financial Post and the complete contract in Canadian Machinery.

'Ehe contract was examined in great detail by editors of various of our publications.

Origin of Article

"PARLY in July, 1938, one of the editors of Maclean's Magazine came to me with a copy of the contract. He stated that an examination of the contract had led him to the conclusion that certain of its provisions were open to criticism, that there appeared to be discrepancies between the description of the contract given to the House of Commons and the actual terms of the contract, and that certain questions relevant to the transaction were of such vital consequence that public interest demanded their thorough investigation.

He ]X)inted out specifically:

1. That the contract provided for the payment of $20,000 to the contractor for pre-contract expenses, of which amount the Canadian Government was to pay two thirds; whereas on June 22, 1938. the House of Commons, through answers to questions asked of the Minister of National Defense, had been given to understand that Major Hahn had not acted on behalf of the Canadian Government during the pre-contract period.

2. That the overriding limit of $267.000 claimed to have been placed on profits accruing from the Canadian contract did not represent the maximum possible profit.

3. That contrary to usual commercial practice, the contract provided for the payment by the Government to the contractor of a ten per cent profit on his own salary, on travelling expenses, legal fees, and other overhead costs.

4. That the contract stipulated the installation of the machinery in such a manner as to make possible its use for the manufacture of Enfield rifles and other small arms, a provision which suggested that the contractor was being placed in a preferred position to make very great profits should large-scale manufacture of small arms become necessary.

5. That the contract expressly forbade the sale of stock of the contracting company if the proceeds of such sale were not applied directly to the business of making Bren guns; and that a firm of Toronto stockbrokers was then selling stock of the company.

6. That the contract stipulated that no Member of Parliament was to derive any benefit therefrom, whereas it was known that a Member of Parliament had had some undetermined connection with the negotiations leading up to the signing of the contract.

In view of the considerations cited above and the further circumstance of the selection without tender of a contractor who had had no experience in the manufacture of small arms, was not equipped with the machinery necessary for their manufacture, and whose recently acquired plant had been inoperative prior to the signing of the contract, my associate felt that the public, which was paying the bill, should be informed through an article in Maclean’s Magazine as to the terms of the contract and the relevant facts of the transaction in so far as these were ascertainable.

I agreed.

Why Drew Selected

Y\ EE THEN discussed the selection of a man who would be * V competent to make the necessary investigation, who could write with authority and who could present the facts in a manner suited to magazine requirements.

After considering the matter very carefully we came to the conclusion that Lieut.-Col. George Drew was the man best qualified for the task.

He had been a regular contributor to Maclean's since 1928. He had written extensively both on military matters generally and armaments specifically. He was a man whose military background qualified him to speak with authority on military matters, having been chairman of the conference of defense associations and president of both the Canadian and Ontario Artillery Associations. He was a lawyer who had had judicial training as Master of the Supreme Court of Ontario, and was therefore qualified to deal authoritatively with the legal aspects of the contract. He had also had experience as Ontario Securities Commissioner and was qualified to deal with the aspects of the case relating to the organization and financing of -the companies involved.

Furthermore we had every confidence in Col. Drew’s accuracy and judgment, a confidence based on our handling of his writings over a period of more than ten years during which he dealt with some of the most important and controversial issues of the time.

It will be recalled that in 1928 he wrote for Maclean’s “The Truth About the War,” an article which disposed of serious misrepresenta tions by United States periodicals of the part played by the British Empire in the Great War. The demand for this article was such that it was repeatedly reprinted in pamphlet form and distributed throughout the world to the number of some hundreds of thousands.

Subsequently he wrote a series of similar articles dealing with “Canada in the Great War.” This was followed by a series on “Canada’s Fighting Airmen,” which was also published in book form and is now accepted as the authoritative historical record of our leading pilots during the War.

Later followed “The Truth About War Debts,” an article which constituted the first real attempt in Canada to correct the misunderstandings on this subject arising out of its treatment in books and magazines in the United States.

Then in 1931, prior to the opening of the first Disarmament Conference at Geneva, he wrote an article entitled “Salesmen of Death,” which profoundly affected public opinion in this country regarding the activities of armament manufacturers during and since the Great War. This also was reprinted in pamphlet form, was officially distributed by branches of the League of Nations Society throughout Canada and was circulated by similar societies in many other countries.

In short, he was qualified—as few men in Canada were qualified— to write on a subject relating to the defense of Canada.

Conscious of Responsibility

COL. DREW was therefore called in. The points I have already cited were brought to his attention, and he was asked if he would accept an assignment to write such an article as we had in mind. It was emphasized that the treatment must be objective. All statements of fact in the article would have to be substantiated. Facts, not opinion, were what was wanted; and the facts were to be presented with a restraint in keeping with the importance of the subject.

Col. Drew accepted the assignment. He was then handed a copy of the contract by the editor who had first brought it to my attention.

I wish to emphasize the fact that not only did the magazine initiate the article but it furnished Col. Drew with his original source material in the form of the contract itself.

In due course the first draft of the article was submitted and was carefully considered by the editors of the magazine and myself. After consultation certain changes were suggested and Col. Drew revised the article in accordance with these suggestions. A revised draft was submitted and this was again revised after further consultation. Every statement made in the article was minutely examined in relation to its factual basis.

Following these editorial revisions, the manuscript was placed in the hands of Mr. I. F. Hellmuth. K.C., for a legal opinion.,

'It is no more than the literal truth, gentlemen, to say that that article was scrutinized again and again, sentence by sentence and line by line, before it was allowed to go into print.

The reasons for this an' obvious. We were profoundly conscious of the responsibility that we as publishers assumed in presenting such a statement to the public. We knew we were assuming serious risks to ourselves. We knew we would be exposing ourselves to attack from many directions—attacks of the type made by the Minister of National Defense in the House and that recently made by the Deputy Minister of National Defense before this committee. We knew we were running a commercial risk, that publication of the article might affect adversely our advertising revenue. We knew we were running the risk of involving ourselves in costly litigation.

Threat Is Made

OUR responsibility was further emphasized by a threat of legal action made by Major Hahn.

On August 12, 1938, some two weeks before the appearance of the article. Major Hahn called me on the telephone, He stated that he had heard we intended to publish an article by Col. Drew bearing on the activities of his company. I replied that we were planning to publish such an article. He then stated, and stated very emphatically, that if we published this article and he found that it contained any grounds for legal action against us he would institute proceedings.

I replied that we had checked minutely all statements made in the article and were prepared to accept full responsibility for their publication. I stated further that we were convinced publication of the information contained in the article was in the public interest; and that the public interest was of much greater importance than the immediate private interest of either his company or our own.

You will realize, gentlemen, that no responsible publisher confronted with this kind of pressure, actual and potential, could afford to proceed unless he was convinced beyond all question of immediate private interest that he was acting in the national interest. You will realize further that, once we were possessed of the facts, only two alternatives lay open to us. One was to publish them. The other was to suppress them. And I submit, Mr. Chairman, that in the light of all that has since transpired, any publisher who suppressed the facts of this case would have been derelict in his duty, not only to his own readers, but to the country at large.

That the checking of the statements made in the article was carefully and accurately done was shown during the Davis enquiry.

The article was subjected, during the course of that enquiry, to the most rigorous and minute examination. More than 1.000 page's of evidence were taken during a period of over two months. Eminent counsel appeared for the Government, for the John Inglis Co. and for the Plaxtons. but no statement of fact appearing in this article was shown to be false*, inaccurate or misleading.

The Minister of Defense, in his evidence, insisted that the article was full of “assumptions, implications, innuendoes and suggestions of impropriety" and as such was “wild and irresponsible.”

He was handed a copy of the article by I. F. Hellmuth, K.C.. counsel for The MacLean Publishing Company, and was asked to point out any inaccurate statements.

For many minutes the Minister stxd on the stand with the article in his hand, while the Commissioner and counsel waited for him to cite extracts to prove his assertion that the article was "wild and irresponsible." Finally he pointed to a paragraph dealing with the Ross rille machinery installed in the Inglis plant, and stating that this “constituted the bulk of the machinery” required for the Bren contract. This statement is borne out by information contained in reports dated Jan. 27, 1936, made by the then Chief of the General Staff to the Minister.

Pressed further by counsel and by Commissioner Davis to single out any further statement in the article that was “untrue, incorrect or falsely stated,” the Minister could not cite one.

The Deputy Minister of National Defense has spoken of those responsible for this enquiry as "liars.” The truth of the matter is that no statement of fact made in the article has been shown to be inaccurate.

Commissioner Davis, in his report, said:

“The facts are all in evidence and as said by Government counsel in opening their argument: ‘So far as the facts are concerned there are very few which are even in dispute.’ I cannot myself recall at the moment any fact to which direct proof was adduced that is in dispute. It will be for those charged with the responsibility of dealing with the facts, i.e.. the Government and Parliament, to examine and study them and to take such action, if any, thereon as they may see fit.”

Co-operation at Enquiry

MAY I add a word as to the part we played in the enquiry that followed publication of the article.

When Prime Minister King appointed a royal commission to investigate the contract, he invited Col. Drew to aid the enquiry. He offered to provide counsel at Government expense to assist Col. Drew before the Commission.

Col. Drew accepted the invitation to assist. He did not accept any fees or expenses from the Government for helping the Royal Commission to elicit the facts. He attended every one of the Commission’s hearings, without expense to the Government. The editor of Maclean’s Magazine was also present at every meeting of the enquiry and was at all times available to give evidence or assist in any other way. I was present at many of the sittings

In addition, The MacLean Publishing Company appointed, at its own expense, counsel to represent them and to assist Col. Drew, in the person of I. F. Hellmuth, K.C., who acted as Government counsel in the famous wartime Shell Enquiry. Mr. Hellmuth has acted as counsel for our company for many years.

Col. Drew and ourselves refused to accept fees or expenses for counsel, not because we were unappreciative of the generous offer of the Government, but because we desired to remain entirely independent. As I have tried to make clear, we were at all times prompted by a desire to promote the national welfare. Our desire to serve the public welfare did not end with the publication of the article. We wished to use every means in our power to bring out all the facts in the interests of the country and the taxpayers who were paying the bills.

From the time the article appeared in Maclean’s Magazine until the present time the most intense public interest has been evidenced throughout Canada in the Bren gun contract. This is. we believe, further evidence that the subject was one of great national concern. We have filed all press references to the article and the subsequent developments. These files record more than a billion words of news and comment in Canadian publications from coast to coast.

A study of editorial opinion appearing in Canadian newspapers and other periodicals indicates that the majority of the comments made are critical of the contract and the manner in which it was let. A large number of newspa¡>ers—including newspapers of all shades of political opinion—have been quite as persistent and forceful in their treatment of the matter as have Maclean's Magazine, The Financial Post and other MacLean publications. If we have been guilty of a “dastardly betrayal of Canada.” then equally these newspapers are guilty. But, of course, they are not guilty of any such betrayal any more than we were. Their interest is the same as our own—to ensure that the strengthening ot Canada’s defenses in a time of world crisis should not be impeded by incompetence, political favoritism in the awarding of Government contracts, or profiteering in their execution.

Munitions Orders Not Retarded

THE accusation has been made in evidence before this committee that “this enquiry has had the most serious retarding effect on the department and perhaps a still more serious effect by retarding the placing of orders here by the British Government.”

In the absence of any specific evidence that British orders for Canada have been retarded because of the enquiry it is difficult for us to comment. But our own information provides us with another explanation for the lack of British orders for munitions from Canada.

Last fall while the judicial enquiry into the contract was in progress the editor of Th ' Financial Post was in London. He interviewed important officials at the \\ ar Office. Certain information then obtained was used as the basis of an article that was

published in the Nov. 5 issue of his paper: The heading of the article read: “Munitions Orders May Disappoint Canadians.”

The article proceeded as follows:

“Under present conditions, and despite the decision of Great Britain to proceed even more vigorously with its rearmament program—it is not expected that further substantial munitions orders will be placed in Canada in the near future.

“This applies to guns and shells rather than to airplanes and other more diversified armament supplies.

“The view taken here in official circles is that, due to the slowing down of business, the Government is now able to get all supplies necessary from domestic plants and without delay. Accordingly, were the British Government to place more orders in Canada, it would be subject to criticism from firms at home who are actually laying off men.”

If the enquiry has had a retarding effect on purchases of munitions, it would equally have had the same effect on purchases of military aircraft. The facts are, however, that since the Maclean s Magazine article on the Bren gun appeared, announcement has been made of the formation of Canadian Associated Aircraft Limited to manufacture in Canada airplanes for the British Government. No definite statement has been made as totheexactamountofBritish business to be placed through this organization. but it would amount to many times the value of the Bren gun order. And it is to be observed that while a new company was organized to handle the placing of the business and the assembly of the machines, provision was made that the airplanes were to be manufactured in established Canadian plants under the direction of businessmen with a record of success in the manar ement of industry.

Article Brings Results

THE best answer to the charge of “lies.’ “traitorous conduct” and "selling out the country,” is to point out that the publication of the Maclean’s Magazine article has had certain results which no one can dispute were in the national interest.

1. The terms of the contract were amended, so as definitely to limit the profit accruing to the Inglis firm from the Canadian Bren contract to $267,000, and to eliminate the possibility of large additional profits under the so-called incentive clause.

The change in the terms of the contract after publication of Col. Drew’s article was summarized as follows by Commissioner Davis in his report:

“During the last week of August, 1938, an advance copy of Col. Drew’s article that was to appear in Maclean’s Magazine came to the attention of the Deputy Minister and other (defense) department officials. As a result of a conference with Major Hahn in Ottawa-at that time, a letter was taken subsequently from tl e company dated Sept. 3, 1938, fixing the amount of the maximum overriding profit accruing to the company under the contract; the provision in the contract being thought susceptible of a construction by which the company might get a larger profit.”

2. An entirely new system and basis for contract purchases by the Department of National Defense was established, in accordance with the recommendations of Mr. Justice Davis, who said:

“What is plain to me at the end of this long enquiry is this: that if the policy of private manufacture of war munitions and armaments is to be continued in this country . . . the negotiations leading up to, and the making of contracts between the Government and private manufacturers either for the purchase or production of such munitions or armaments should be put in the hands of an expert advisory group of competent businessmen . . . These persons should constitute a board (which might be known as the ‘Defense Purchasing Board’).”

Again the evidence is clear that this change to a new system of munitions purchase resulted from publication of the article.

3. A further result of the publication of the article was the cessation—for the time being at least—of profiteering through the sale of stock in an armament company.

Great War Precedent

CHARGES of disloyalty and traitorous conduct have been hurled before this at publishers and writers who have criticized government officials and military brass hats. History is now repeating itself.

In fact, it was in part our knowledge of the history of munitions manufacture in the Great War that made us so desirous of seeing a firm footing established for the placing of armament contracts.

In Canada in 1915 there was the gravest indignation among officials at Ottawa when criticisms were made of the manner of awarding shell and other contracts in the early stages of the Great War. One result of the criticism was the appointment of the Imperial Munitions Board, an efficient, independent and non-political body. Following its appointment Canadian manufacturers received increasingly large British orders for shells that greatly exceeded the contracts given to them during the period when the Shells Committee was in operation. Another result was the establishment of the War Purchasing Commission. Of this Commission Sir Robert Borden’s Memoirs declare that it saved Canada an amount of not less than $50 millions through establishing efficient methods.

Objection has been taken to the fact that we have criticized the Department of National Defense at a time when it is engaged in the critical task of rearming Canada.

The experiences of Lord Northcliffe in the Great War point to the importance and value of intelligent criticism of the administration of a country’s military services, even though it brings charges of disloyalty.

The Times and Daily Mail of London, in May of 1915, brought down upon themselves the most vigorous criticism for their exposure of the shortage of the right kind ci shells at the front. On May 14, 1915, tne Times ran an article from Col. Repington. its military correspondent. The contents of this article are suggested by the headline which read:

“Need for Shells: British Attack

Checked: Limited Supply the Cause.”

On May 21, the Daily Mail published a further article of which the headline read as follows:

“The Shells Scandal: Lord Kitchener’s Tragic Blunder.”

On the appearance of these articles, both of these newspapers, as well as their publisher, Lord Northcliffe, were accused of traitorous disloyalty to the country. Copies of the two papers were solemnly burned on the Stock Exchange. Lord Northcliffe was denounced in the House of Commons by the Prime Minister. Opposition newspapers shrieked their disapproval. It was necessary to put on a special police guard to protect the publisher and members of his staff from an infuriated public. Thou-

sands of readers of both papers cancelled their subscriptions. Efforts were made by the civil servants and the brass hats to hamper Lord Northcliffe’s newspapers in obtaining the news. Lord Kitchener instructed Sir John French not to permit the Times military correspondent to come near his headquarters.

But we all know the results of these articles. The British Government was strengthened, a strong ministry of munitions was established and British troops began to receive the shells of the type and in the quantity they required. Lord Northcliffe later was recognized throughout the world as a great patriot and public-spirited ctizen.

Public Interest at Stake

JUSTICE Davis, in his report, indicated that there was no evidence of corruption in the placing of the Bren gun contract. I should like to emphasize that no charge of corruption was made in the article in Maclean's or in articles in any of our publications. That finding of Justice Davis did not relate to any criticisms made by us. Our criticisms were based on other factors such as unbusinesslike methods; political favoritism in the selection of the contractor; the lack of tenders; the ignoring of well-equipped, established firms; the selection of a manufacturer not actually operating at the time the contract was signed; lack of frankness in presenting the facts to Parliament and to the public; inadequate protection against the making of huge profits by the sale of shares and against improper profiteering in the manufacture of armaments for the defense of the country.

At all times we had but one interest and concern; the very interest and concern which are the first consideration of every public-spirited publisher in Canada. Our concern was for the public gcxxl.

When the public interest and the welfare of the nation are at stake; no progressive publisher will fail to speak out pointedly and courageously no matter what pressure may be brought to bear upon him. no matter what added labors and expense he may anticipate as a consequence of his action; no matter what criticism and even abuse he may expect to receive.

Cleverly directed criticism and abuse are the normal lot of the publisher or author who treads upon the feet that have invaded the public treasury. We expected criticism. We expected abuse. We expected our motives to be impugned. We expected that those who were hurt would attempt to blacken us in the eyes of the public. And in these expectations we have not been disappointed.

The experience was not unique or unprecedented. Colonel Repington says in his War diary:

“Every endeavor was made to show that I had been engaged in an intrigue against the Government, or was acting under the orders of Northcliffe; and various reptiles bit me whenever they could. It is not an intrigue to endeavor to save an army from defeat by a necessary public exposure when all official representations have hopelessly failed.”

And it is not disloyalty or traitorous conduct, in time of peace, to anticipate the scandals of wartime by intelligent criticism and accurate exposure. Adapting the old adage, “in times of peace prepare for war,” is it not equally wise in times of peace to remove the inefficiency and political favoritism that in times of war must inevitably result in the loss of lives and the wastage of huge sums of public money?

Twenty-five years ago we had to wait for the war to come, thousands of men had to lose their lives and millions of dollars of the taxpayers’ money had to be wasted before public exposure forced the elimination of unsound business methods in the placing of orders for munitions. We cannot help but feel that Canada is fortunate to have had the circumstances surrounding this contract brought to light while we are still at peace and there is still time to profit by the lesson.