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Full text of "Frenzied finance and the Foresters [microform]"

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•BOIUTION TBt OUn 

(ANSI and ISO TEST CHART No. 2) 




A 



/APPLIED I M/GE In. 

t613 Em Ualn SIrnI 
Roehtilw. New York 1*609 USA 
(716) W- 0300- PtMw, ^^ 

(7tB) 2M-59e9-Fo. 



FRENZIED FINANCE AND THE 
FORESTERS 



THE PLOTTERS 

The investigations of the Royal Commission into the conduct of insurance 
business in Canada two years ago laid bare one of the boldest schemes ever de- 
vised by a party of s|)eculalors for enriching themselves at the expense of other 
people and at I he risk of other people's money. 

1 Iiis plot becomes of paramount public interest and of tremendous public 
significance from the fact that the plotters were leading members and ex-mem- 
bers of the Parliament of Canada, n'.en some of whom would be i-allcd to Cabinet 
positions il their party were returned to power ,and one of whom would 'w put in 
charge of the public! money as Minister of Finance. The manner in which they 
handled the funds of other people which came into their possession must be 
taken therefore as indicating how they would handle the money of the people 
of Canada if they w<'re permitted to gain pos.session of it. 

The scheme of these gentlemen was nothing else than to take the money 
of the Independent Order of I'oresters, speculate with it in all manner of risky 
ventures, and pocket the profits. From the speculator's view-point, it was a 
splendid game. If the speculation succeeded, he was the winner; if it failed, the 
Foresters were the losers. 

Ihis nioney came from the premiums paid into tlie Order by the members 
on tJHM- insurance |)olrcies. It was held as a "trust" fund, froin which the in- 
surance policies had to be paid as members died. It belonged therefore to the 
widows and orphans of the Foresters. Lpon it fney were dependent if the hus- 
band and lather were taUen away. If it were lost, they must suffer. It had been 
paid in lor them. It was held in trust lor them. It belonged absolutely to them. 
.No one but they had any right, title or claim to it in any manner or form. No 
one h.id any right to use it but for their benefit. Any interest it earned belonged 
to them, and any of its earnings which were taken by anyone else was so much 
money taken from them. 

In Canada, such moneys are safe-guarded by laws. The Companies or or- 
ganizalions holding them are permitted to invest them only in certain clas.ses of 
absolutely safe securities. On no condition and in no circumstance '.s an Insur- 
ance Company or an oflicer of an Insurance Company permitted to speculate with 
these funds, even to cirn profits for the policy-holders, much less to earn profits 
tor him.se!t. The law demands that the first obligation of the Company and its 
oHicials is to keep such nioney absolutely safe for its owners. Speculation of all 
kinds is strictly forbidden, incli:ding land gambling, stock gambling, and every 
other financial game of chrmcc. Not even in the hope of earning larger interest 
for the f>wners of the money iias any man a right to invest thatimoney in any 
kind of a spc-culative enterprise. Much less has any man a right to invest it in 
any kind ot enterprise, speculati\e or not, for his own benefit. 

Sucii was the money which these speculative gentlemen wislicd to use for 
their own enrichment by gambling in western lands, British Columbia timber 
limits, saw-miUs, nnfl wh:!tever other speculation offered a chance of making 
gain. Such were the laws by which this money was safe-guarded and with-held 
from tlie use to whicji they would put it. Their problem became therefore how 
to evade the law and .secure control of the money without any restrictions as to 
how it should be used. 



THE PERVERSION OF THE UNION TRUST 

"Where there'n a will there's a way.'* A way was soon found of evading the 
insurance laws and ieaving the money uf the wivc^ und children of the toreiiters 
in the hands of the speculatt .. 

The way this was accomplished was simple enough. A Trust Company was 
organized to handle the Foresters' funds for them. The plotters secured control 
of the Trust Company, and thus had the funds in their own hands. 

In January, 1900, the Kxeciitive Council of the Foresters decideJ to pur- 
chase a "controlling interest in fht Provincial Trust Company of Ontario, by the 
"purchase of its stock from time to time." The Provincial Trust Company was 
a small concern, whose paid-up capital was only $113,700, and whose assets were 
worth only 65 cents on the dollar of this. This resolution, as the Commission 
says, was "the only direct sanction preceding what became ultimately an mi- 
"vestment in capital stock alone of no less than $a,745,t)00 of the funds of the 
"Order." 

Mr. William Laidlaw, K.C., was employed to purchase this stock, and Mr. 
Matthew Wilson, K.C., was authorized by the Provincial Trust to sell it. These 
appear to have been the legal gentlemen who engineered the details of ch.inging 
the Trust Company of the Foresters into a banking concer* for the specu- 
lators. 

They changed the plan of the Executiv;? Council into a sc. me whereby tht 
Foresters should buy all the stock of the Provincial Trust Company. They 
changed it into a scheme of building a new company on the ruins of the old, witli 
a .apital stock of $r,ooo,ooo. Then they increased the capital stock to $2,000,000. 
This stock, with the exception of forty shares, was all sold to the Foresters. $!io 
being charged for each $100 share, forty shares were sold to certain gentle- 
men, who became directors of the Company, and who presumably bought tin 
stock to qualify themselves for the positiwi. 

Thus in the beginning of things, the Foresters were robbed of $249,600, the 
$10 bonus per share paid for stock of a Company which had never as yet earned 
a dollar. 

But while in theory the Union Trust Company was a separate and inde- 
pendent Company from the Foresters Society, it is seen how thoroughly one was 
the mere creature of the other when we remember that of the$2,ooo,ooocapita| 
stock in the Trust Company, the Foresters held $i,99t>,ooo; in other words, out 
of every $500 of capital stock in that Company ,some individual held $1 and the 
Foresters $499> 

The practical result of this was to place $2,745,600 of Forester money in the 
hands of the Union Trust Company. More than this, such assets of the old Pro- 
vincial Trust Company as were considered bad or doubtful were unloaded on to 
the Foresters by the management of the Union Trust. 

How was it intended to use this money ? The Commissioners say, "It is 
"not to be supposed that the promoters of this investment wi t' indifferent to the 
"fact that the capital funds embarked were not any long*, confined to the classes 
"of investment permitted by the Insurance Act." As the money of the Trust 
"Company they were supposed to be enfranchised and available for any schem' 
"however foreign to the trust upon which they were held." "In the dcvelopmei 
"of ihis enterprise, private advantages were regarded, and those of the Order 
"disregarded." "Mr. Wilson, in these negotiations as in later cases, was paid 
"by both sides." 

Whatever was the intention of the Executive Council of the Foresters, the 
Commissioners declare, "It appears impossible to attribute the scheme in its de- 
"velopment to any such ide " as that of an investment agency for the Order. 
"The purpose then was undoubtedly to embark in speculative transactions." 

Hon. Geo. E. Foster, ex-Minister of Finance, and at present chief opposition 
lieutenant in the House of Commons, was engaged as general manager. In a 



b-c,,nK. '^u.i^r ri ■enu-n.HsTnl-f *"!"l"-r"«^ »"'<•■■• I '•<-• ■■operations' 
"l"inK .hem togefhiT." Tire e eme„rLT ? ' .'r''''?''""' ^' '"« '■^"' ""'v 

•i.-n.en ,1,,. l„,l„„.in,,. ',.h,,p,,r, wil" show '"""^ "■" '"■- "'"« S*"- 

THE MONTAGUE DEAL. 

the «^erlr':^: ':!^z:':^'Z{:::!::nr''T "^ ■"""- '-■"• '" -- -^ 

from ,he restrictions of tie Ins, rn"; w „,dT "."■■'^ '"',""■"'■'' '" ^ f™^ 

Her;!::;'l::n:^;^-,«,-;;;; -^.^-.PP^a, -.'He H„n,r, spec,„.t„r. 
re.-,d.y ,o .„„ec, ■■r.-a-e-offs '• himself nnd I'vs JX to't','"'-' ;;'■^''••"-"■^^ ■^'-■•■" 
nn,^„ied the, sh.red the .spoils with him V, tuT^Hv he V^ t' '" ''" '" - 
.-.-.me n •■trust- eomp.ny only in its willingne s ,n "w," thrr ,'''' Z""-" **" 
.-.nd ornh.ns to l,,„d sh,,rks and commerrial camWer, ' ""''' "' "■'''"»"^ 

1 he speculator soon came H<. r„,v. „r. 
<a..,e he usually brought an on.ion-u^ot./"'' '" ^'"^ P"'''""*- When he 
In time it eame to be understood that the ^^'"l"'' *"= '""'' ''^'''y 'h^ cash, 

the I.O.F. had become '""Sing f, untar^ •thr"7'' 1° ""' ^'■™"''- '- 
hnanciers of the Conservative persuL on Th ''efreshn.ent of distressed 

the second step in ..,e evoiuL^ ofT svstem IV'T T" ''"'< '" "'^ ''"'•''■ 
••I-o.ster (iroup" while they remained l.X^- ... '"f"*^ "'*™ "■'*'«'*'' "> 'he 
They must U.Vt.en into ,'ir"uTa, » ^^,X'", WeVcr "' .•^'' """T '''"''■ 
men to do it. The modus operandi was us, • llv ,' In .1- "' * "'" ^'""''- 

""t ow., to a syndicate who couldn^ ply tor i ^1 Ihern' '",? "'" '^"''"' '"" 
row the necessary money from the L^'L Trtt UuTllv tL^h''"'''''''* ^u'' 
.he vendor depended on his ability to sell to th!. r- ■""y' •"°' "'■s meant that 
the water when his obligation" iame du^ I,^ 1 '•""l ^'"'' '" ''^'P ^■•" "bove 

merly C^^rvltfve mlm Sf o'f Siame^nt'^nd t ''^t^" "J "^= '•'"—• f^ 
the chief orators of the Cons^rvati™ n^r J "th "f^ °' ■^'»"=' """^ "■"""« 
profit from speculating in M?n toba , 'nds'-bu^ he C n'™" ''" ""^ ^'■*"^'= "' 
buy. This didn't trouble him long however' He tLt^i s: "'"""'^ """> "Hich to 
the Supreme Secretary and Mr. lostriL t^' d.:' an'dthrrv?'"' ''^"'^"■ 
The money was taken from the coffers of the Union Trust ^ "™ ""''• 

thepS:ts'°of1^eTo".rr" Tjtll'et'lT '"'' ''"' '""^ """"^ f""" 
336. .h« funds of the F„::..eJ.';%'v'i;^^,\'"r\rnr°Th''""''''n'' "" *3-,- 
9,9Jo acres were added for $s,,ofc the Fore.tIrL? ^^^ """"'" '''«^' "' 

little deals the »fe of the Ub'm fru., w.!^ rrj'''"«."'''>' «"'■ '" "-ese 

and hi. associat.. mi,ht m^lT. •■r"k„"" '"''• '" '^^•- '''« Mr. Foster 



Clearly this was a "powerful and proH(able 
and hi.s applied speculators. 



combination" fur Mr. Kofttrr 



THE MANAGER'S GRAFT 

Four points dcMrve attention here. 

1. Supposing this !)pecuI.ition hud gone bad, who would have suffered thf 
loss ? The syndtr.-tte ? They had no money invested. In the ultimatf every 
cent put in the dc I belonged to the widows and orphans of members of the For- 
esters. In the event of loss they are the only parties who would have lost. 

2. It was nr> part of tlu; plan Ihat the Union Trust Company should share 
to the extent of one dollar In the prix-ecds of the spctulatirM. Th** lan<ls wore 
fonveyed to them only in trust, the real proprietors being the syn<lirate who-" 
names uere carefully concealed until exposed before the C<immission. 

ir the speculation turned out badly the Trust Companv lost; if it turned r *. 
well the syndicate raked in the profits. It was the game of I. -a Is I win; tails 
you lose. 

3. ^* . Stevenson, an offii:iaI of the Fore'*ers, became suspicious of the spec- 
ulation being carried on by the offii-ers of the Union Trust and domanded a show- 
down. Caught in the act, the syndicate could no nothing but turn oxer the lands 
to the Trust Company who had put up the money. 

Would they have done so if their transactions had l>eei legal ? Would thev 
have tamely subn-uted to be despoiled of their property, if it had really been their 
property ? Not by a lf)ng shot. . They would ha\e fought it out in the courts. 
if thev lUid not known that no court would countenance sucli trans.-tctions. When 
they telirquished the land to the Trust Company they admitted that in reality 
it belonged to the Company, and that they wr-c simply conspiring to swindle the 
owners out of the profits on their property. . 

4. V\'hen the Hrst block of this land was bought a commission of $10,000 
was due to one Pritchard, the agent of the vendors. Of this Mr. Foster pocketed 
or.e-half, actually causing a cheque for the awiount to be issued, and deducting 
it from the tirst payment on the land. This he said was a reduction which he 
received in the price of the land. Pritchard says, no such reduction was made, 
and claims that Fester simpl} held him up for one-half the commission. 

In either event Mr. Foster is guilty of taking m. 'ey from the funds of the 
Union Trust to which be was not entitled. If he received a reduction in the 
price his employers were to pay for the land, wasn't this the business he was 
paid a salary to do? What is a manager for, if not to buy what his Comp.iny 
wants to buy a.s cheaply as possible ? But wl.at advantage i.- it to a company 
if its manager secures a reduction in price, and then pockets the reduction ? How 
long would Mr. Foster last as manager of a retail store, if he demanded a re- 
duction from the wholesale lutuses and then "collared" the rebates himself ? 

And if no redeuction was secured, what business had Mr. I-'osier to take the 
money out of the funds of the Union Trust Company ? What would have been 
the difference to the Foiesters and their families if it had fseen Raffles who had 
gum-shoed in and stolen it from the vaults ? And what difference in moral char- 
acter between an expedition of this kind, engineered by Raffles, and the graft 
operated by Mr. Foster. 

This performance was repeater in the purchase of another block of la..ds 
near the Swan River, from Hon. R. P. Roblin, Premier of Manitoba. For this 
land Mr. Fualer oiTeicd '$S--S per acre, btipulaiing that ijcis. per acre was to be 
"commission" to himself. This sum $2,480, he took directly from the funds of 
the bniqn Trust in the same manner as the former. Again what business had 
Mr. Foster collecting; a "rake-off" out of the mOney of the Company of which 
he was manager ? And was it not simply that he might be able to collect this 
"rake-off" that the price be offered was boosted from $5.00 to $5.25 per acre. 



Iruly llll» wii> liiiiiiiig „ul „ •■powerlul" uri>l "(jiolmilik" LUiMlii.liilicin for 
Mr. Foster, l)ut hiirdlv no (or Ihe worTK-n and .hiMrcn rri.m ivho»c mon.'V lii> w.ii 
•'K "rake-oiy«." 

ANOTHER CRE<V ON DECK 

1 e MniilaKue rrowil did well, Imt tli.) urrt- out-doni- 1)V llic rw'xt wndiiiilf 
th.it I, me .■ilnnK. This wav ..imposed .it .Mr. ufr, H. I'op.', o\-M.I'., Mr. 
C'lirqc \V. Imvlor. .M.I>., Mr. W. M. llinnott, .>t P., and Ntr. A ,\. I.t-furee,, 
M,l. Thr«c qenlliii'(-n w.int.d l„ d.) a turn in u,',wrr l.inds. Irxi. Thoy had 
llfcn tniirin- ili,. , ivinlrv with ^lr. l!i,rd<-n. tin- imrtv \f!u\-r. h,id «,.,.„ th»- ru«h 
for farm lanas and . .m.ludfd tli.pt if 'lioy ,inild (;<-t liotwfcn the ••■lilcr and the 
I. Mid tlify iniild malii- him put up handsomely to gfl them out of th. way. 

In the f.ill of 190J, th.y l»,-j;an mjjotiations with the C.P.R. ( ir ..n option 
on a hiM,'o liloik of the fompanv's lands. Mr. Kowlfr and Mr. I'o(R' inliTvii-wed 
the IVisidi-nt of the l.in.idian rai?ilic and also ronsuhod Mr. Dani.-I Mann, ol 
the Canadian \orlh-Tn, to'learn where th.it road «as t,, run. How they wet« 
received by Ih.'se di-nitar:,,, .•.. . Fowler tells Mr. l.cfurL'cy in the following iiibi- 
ianl letter : 



Dear Ix:furgey : 



OCTOBER 4th, 190J. 



We have su<ceed.(l hevcnd our wildest lioiKs. We wired D. M., 
and he met us at the train. Toronto, and took us to his ofriie, and gave 
us the route as far as located; of loursc, under rover of the strictest 
secrecy, so keep it mum, except to Hcirclen, I'.ennett and yourself. We 
expect to have a wealthy Ijiglishman named Lister and Col. IVIlatt in 
the comliine with us. We haie increased the thing to joo.ooo acies. 
t)n arrivinjf here wo interxieved Sir Thomas Shaughiussy, and have 
every reason 10 expect most generous treatment as to Icrm.s and prices, 
lie .said, we should get the best that w.is going. \\v want to arrange 
i -eting there when thj , -rty returns to Mi.itreal. Tell Messrs. 
lici, Ueii .and Hehnctt ahoul the meeting. It will be necvssary for, at 
ie.ist, ivvo of u.s to go this fall .'nid locate, as it could not be done in the 
spring, a.i(i that is taie of the things th.at must be arranged at the meet- 



r,p:o. w. Fowi.FR. 

'.hus oarlv in 'he game it appi-ired that tlie svndir.-ite were hand and clove 
with the C.P.R.. and th.-t Mr. Rorden. if not interc^cd in f c enterprise, knew 
a!ioiit it, and was c xpectc.'d 10 take a hand in engineering it. 

OcK'S any sane man suppose thot the railroad magnates were distributing 
tl^cir f;,vcinrs !o ;i trroup of memlK-rs of Parliament in this manner, for nothing ? 
Wh;t \.-,is the service th;-y could render in lurn ? \\'liv shciidd Sir Thomiis 
extend c-nn.rssicius that exrdted Vr. Fowler into the se\omIi h.iiven of jovous 
.cnticipafion ? Win should (he \'ic-e-President ol the Canadian Xorthern receive 
them with c.|K'n aiiiis and give them exclusive inside information where the new 
road W.IS li, 1 un ? Del -'way m.agnalcs do these things for nothing ? \ot in 
Canada. 

W'hat wa.s the return the M.P.'s were to make? Well, tlu (irand Trunk 
Pacilii project was launched a few months after; the air was already full ol 
rumours of it, and when it was launched, these gentleir n fell upon it with fury. 
Was their attack on the Grand Trunk Pacific the price tl jy paid for these f;'Vours 
received from .Sir Thomas and Mr. Mann ? Did llu-y get the lavors on ,-ondition 
that they would make the attack ? The verdict of reason is th;it they were 
bought and paid for by the favor.s of the two corporations, and that the- were 
merely delivering llie goods when they assailed the new coiner. 



MR. FOSTER TO THE RESCUE 

Ai the rtiult of thMt negoliiitionf th« Pop«-Fowl«r •yndicafe* fot an optbn 
on some ioo.ooo acres 'if C.P.R. land. I he prite wot to bo §3. 50 per »cr^. 
lao.'vo was to be paid down, $40,000 more on M.iy ijih, $$ti,ht)t> on June i*t, 
190J, the remainder in annual inxtahoents of 8ii(),f)4>6 and interest. 

But like the pmious bunch this syndicate had no money' Thi« appears tu 
have !)een the chronic rondiiton of the ^entlrmen who came to do "bustneiis" 
with the I'nion Trust — unlil after ih«y had done the "business" and, incidentally, 
the Company. Mr. Bennett and .\Ir. Lviur^vy indeed claim they put a few thou- 
sand into the deal. This is probably correct and k*^-*> '" show th.it their partners, 
who never put in a cent, had not F\en the "honor that rxists among thieves." 
They deceived their confederates as well as their victims. 

But the lack of money did not long trouble them. They just marked the land 
up •1.00 per acre and resold it to tlw Union Tru.st. That is, they sold it and the 
Union Trust paid them their profits and became liable to the CP. R. for the orig- 
inal price. Hut the Union IVust did not get the land. That was where Mr. Fos- 
ter I it in his paw, as will be shown in the succeeding chapter. 

tn the meantime : 

Mr. Fowler declared in the House of Commons that his syndicate got no 
uni'.ftual favor in the matter of price from the C.P.R. Hut when Messrs. Pope, 
fowler, ei al, approached the Union Trust Company with their option two alter- 
natives lay before the Union Trust. The Company could either buy the $4-50 land 
from Messrs. Pope, Fowler, ei al, or < ould buy equally grxxl land from the C. 
P.R. at $3.50 per acre. This on the statements of Mr. Fowler and his friends 
that they received no favors whatever from the C.P.R. in regard to the price ot 
the land. If this be true the Union Trust could have obtained 300,000 acres of 
land from the C.P.R. for $700,000, could have secured the title outright, and 
stood to gain whatever profits might be made on the sale. Supposing, then, that 
western land was considered a sound and desirable security fur the investment 
of I.O.F. funds, it surely was the business of the investing department of the 
Order to secure the land at as low a pri^^ as possible, and according to Mr. Fow- 
ler and his associates, it could have been secured for $3.50 per acre. 

But land was not bought at the lower price. The option of Me-' s. ^.pe 
and Fowler was purchased at an increase of $1.00 per acre over the C.P.R. price. 
Thereby these gentlemen appear to have been released from an embarrassing, not 
to say pivcarious, position. Their option had been secured on April 24th, by a 
cash payment of $20,000. Another $40,000 was due on May 15th, and another 
$56,666.66 on June 1st. The available cash assets of the syndicate appear to 
have been sadly out of harmony with its ambition. Of the $30,000 down pay- 
ment, $4,000 cash was put up, $2,000 more was raised on private notes, and the 
balance of $16,000 was raised on joint notes of Messrs. Pope and Fowler, en- 
dorsed l>y Mackenzie & Mann. The second payment of $40,000 was raised in 
the same way, on notes endorsed by Mackenzie & Mann. There was still the 
$56,666.66 coming due. Plainly time was the essence of the transaction. If the 
option could be sold before this f^ame due, all would be well. Otherwise, things 
looked blue. The $4,000 cash was at stake; the money raised by notes would 
have to be repaid some way, and if things went by the board the hope of profits 
was also gone. Something must be done and done quickly. 

At this pregnant moment, Mr. Foster appeared 00 the scene with the ample 
fundi 'jf the Foresters. At his coming, darkness and shadows fled away, and 
rising stars brightened the sky of the stranded synd* ate. It was a timely rescue 
and gallantly done. Pressing needs were first consider ed~th« money was ad- 
vanced to meet the coming payment. The good work did not stop there. The 
$4,000 at stake was refunded ; funds were provided to tak« up the notes, and 
the profit! V iich heretofore had glimmered only as a distant and uncertain h«pe 



I.i.r ilu- , .„ »-t,ou" ■JSIl mil) r S;oo,ooo Innd lr:ins.i.ll<iji . Ivvo riiuiiili. 

p^'^irpi-:: ;t,r;, l:^'.^:; i^v;-r^;:,!;: '- --" 

tn romplite tin. firsl payment Mow Hinlh^ c,,,^- . . ' ''* "■■■^^' ■ 

Lnder these cir™m.stanrt.s is it rc^is.mwbli. u, suprn^,. thn ,■ |. 

con,. ? Kro*. „„ « ro^which 'Sid . .^ru^,; H^ e^d^'ir' ^'" ;' ' 



I'nwlof ;in.' 
t»'(t th:v 
>n,irv 



lo niCi, 



GETTING IN THE GAME 

;™S?=r;c"=- •— ^5£ "«»r :s^T 

another syndicate composed of Mr. I'oster \W tu-nit^r a .V'^l!^'"'" ' 

was for this syndirate that the In nn IV •7- ""^'""'^ ray and ^f^. Wilson. 1 

the Pope-FowlL synd.cat 'a d pr^ru,rTj"'ZZ """", T •'"'"'" '" 
"rphans. '^ ' '™ money of the widows .■.. ' 

was bou^iu for rhe";t.:rrMc'^i,t/a'; T; di.^Te 'w •:hTh''f 'r- ,''^ r 

Trust, and these gentlemen set to work tr, l.l! ,k • "'"*' "' ""-" "■" 

tained control of the charter ^ -n Ontnril 1 ] f" '"'-"'■ P'"' ""<■ ' '^"•v ■ 
the Great VVe.t Land rl^nL" °t^- •"'' ^'""''"'= ■■'"'i ' ^aneed its nnm, 
wi.h an imaginary capital 7$,:^ o^ IJZTT'' '""'"" ""^ ""■" ""''>■' 
were .0 make on^ the" land, frri/n^d"!'" lurnfd terTo^T ""■ '""" 



This st(. 



$i€»,ooo, was divided in such manner thai Mi. toster and his aJlies held »4B,J50 
interest; Messrs. Pope and Fowler came in for «5,oc»; Dr. Oronhyatekha got 
Sio.oooj and the Union Trust Co. were given $33,750 stock as bonus for financing 
ii]^j*u '^["*' ■'''''" ^"^^ boi'Kht fortv shares and paid for them ; Mr. Schol- 

held bought 40, paid half their cost, and was forgiven the bal.wce. This $6,000 
was all the cash put into the concern for stock. Aside from this every cent ot 
the money expended by the Great West came from the Union Trust Company, 
yet the Union Tru.st Company was the shareholder which in the end w.is rohhed 

"rfc* r ' ''"'' '^"^ prevented from sharing in the profits on the land. 
„ f,^ . "'''^' West Land Company was to all intents and purposes the Foster- 
McOilhvray syndicate, its capital represented their expected profits and its busi- 
ness was to divide these profits among the parties concerned. The members ot 
»ie syndicate were the executive committee of the Great West Land Company. 
Ihe purpose for v.hich the Company was formed was to enable Messrs. Fostc'r- 
McGillivray and Wilson to make their desired profits on the land. 
,, . "^^ "''' arrnn-ement what was the situation from the standpoint of the 
Lnion Trust, and o. .iie Foresters who supplied the money to the Union Trust ? 
It must be remembered that the land had yet to be paid for. The 8700,000 due 
the C.P.R. must lie paid by some one. \Vho was to do it ? The Pope-l''owler 
syndicate had neither the intention nor the means of doing it. They had not paid 
for the option out of their own pockets; how then could they pay for the land 
Itself ? The newly formed Great West Land Company had no money. Who, 
then, was expected to supply the money ? The Union Trust was the only party 
in the transaction capable of doing s>. It is obvious that from the first the in- 
tention was that this Company should extend to the Great West Land Company 
the generous treatment it had already accorded to the Foster syndicate, and 
should continue to provide the funds. 

And supposing the Unio 1 Trust advanced the funds, who became responsible 
for them to tl •; Union Trust .' The Union Trust could take a mortgage on the 
property, but is it the custom of financial institutions to prov ide all the funds for 
an enterpri.se without security other than that of the enterprise itself ? The 
Union Trust could lal;e stock in the (ircat West Land Company, but this would 
be nothing more than receiving a part interest in a concern for which they were 
supplying all the money. In cither case the position resolved itself into this: if 
the venture ^roved profitable, the Trust Company would receive back their prin- 
cipal with eii.ier interest or dividend ; if the venture proved unprofitable, the 
Tru^t Company had no one to hold financially responsible, but the Great West 
Land Company ; the (Jreat W'est Land Company had no assets save its prospective 
profits; and if the ventflrc were unsuccessful there would be no profits. 

This was the way Mr. Foster discharged the trust reposed in him — by per- 
verting the L'nion Trust from an investment .agency of the Foresters' money into 
a money-lending concern supplying the funds to himself and his friends to carry 
on their specuKitions. This was the position into which the Union Trust Company 
was led that Mr. Foster ,-ind his accomplices might make a profit on a huge land 
transaction, and it was in this posilion and for this purpose that the Company 
was made to advance 8980,000 How did this positio.-. accord with the purpose 
for which the Foresters had formed the Company, and put their n:oney in its 
keeping ? Was this .in example o( "forethought" and "care" that the funds 
should be absolutely secure, and that they would certainly return a satisfactory 
profit for those who.se welfare members of the order had in mind when they were 
paying the premiums on their life insurance policies ? 

ROBBli^ fHE BANKER 

When the Great West Land Company was formed it was decided to give 
the I'ninn Tni.-^t Co, n hlnrk of sin(:U as ;i bonus for undertaking to finance the 
enterprise. Besides this, for the actual cash it advanced the Trust Company 



Company is iohMv/,htop;f;,,.t'"- 'l'':!" \l''"R""t;«- ^ ■•Tbe Union Trust 
"■■ -ny p.nt „f .his a^^n C nd „ ';^I"f .l"''-*' •"""-"" '•'"'^ =" "^ f'- 'I'--- whole 
a Bonus 3,^7,; shares of $,o^,,,h 7 r""r "u""* '" '" '■^■"•■"'■- '" "''■'i'io" =« 

company." * °° "'" ''■ ''■•■■ ^"l"''. "f 'he p,-,ici-up ,.,pi(a: stork of the 

or mor^l.a-,e . ,len "or.L'osh "T' ^""7'^' """'P-'o". >.f whether stock 

duccnu-nt to the Tru l to no-, ,v . r ''''•"'"'^',<' •■' ' »"• bonus sto-k „as an in- 
on nnv ron.h-tlon that ihT r ^ hoM.anie tlie tra„sa,:tion. and was ,mt .-ivetl 

mortgage o; in the ;tpe of sToljr- ''"""" '"'' '"' -"-'>■ '" '"- ^^■'^'■'" 

"ade dcaA bu, the e-, id enr • , ', . n^i"f'p '"'■ ^' ''■' "^ T''" ' ^ "•'- ""' •'<^'" 

m trust for ..ither ,l,o Union T ■ , Co ,r ^h"!^!:';" ■" '" '"""""' "'' '"■'" '' 

33r.^=f<^t:;53o^;;:th::£" ? ?-'- - ^' -■■ -- - 

to secure it. ' '• ■''''•'"™d or -houW tui<c a morlffasje on the land 

reeds added to t'he ,™|, of the 'i^, *"^™'''' "" " ■' \V.,s it sold and tite pro- 
When the enterprise ™ 'an to , in n ,'"'''""' '"■ "' ""' "'"'''■'" ' ^"' "' ^'>- 
to dispossess the L'nim TrusTro , ,f^'^" T"" P"""*-'' ""■^"^ ''"'■ '"""d 

Moth the efhi^r ^^ , '"'' "'■ "ronhvalekha. and Ih,- ,,-.-: shares 

fleeted n the ft t , nl"' o^l ''':r'''- ,"' 'l'^ ^"'^■•''^""^ re-adinst'"en, arrre! 
witen Mr. sLen on a vi^nnn,'^^ , "J'*". *■■■ ""'"hyatckha was in India and 
absent from t"e countrv T he 'T"^"l '" "'= ^'"'"" Trust Dire, locate, was 
bv means of a general -Doweor'^M" "' ":■ "">"hyn,ol<ha-s s,.„ k was efleeted 

S~ t-;; ,£i EZ?' =Tr " ^" "" "- ■— " ™ 

held duriuf; .Noven.ber 7^- thnre ""'^""••■•^ .Meet.nss said to have b.H..n 

13th and 2Nth bv w V ;,f?^n;- T '«>,»'K"alure in the minute book on the 
and the d reetJX' auend,^ Zl^'T "' "f T"'? "' "''"^^ '"'^^•^'^ "'-'-S^' 
I.eemher^.,th, het^Ie^'^rHr slh^^^^lT^- :::;- ^™:/"--- ^.h .0 

.ionin^t,^'^:^:;ir<:r;Mss,:;k""'n" ["^f ra r-'-^ -"^ --"■''"" -- 

such r;..olt„i„n vvarp;ep,a,ed, ":ff;re L''m "^^•Vilonern:'-'!'' "' "" ""t"" 
^a.vtng: -The idea of ijs (the bonus s .aC b2,t" I i i rTr" rT'' ' 

and tho.,H. ..A.„tdd t:;:'r,!m:;;^^^.:intt;^e::':^s:;,^:^"'^ ""-"- 

ilow:e>er .t m.ay l.ave teen aeeomplishid, the taet rcuu?i s t h^l 's . , -o s,., .. 
be onjjuiK to ti,e company of which .Mr. Kos er was man r -d « -"'A^ It 
held in trust ijy Dr. Oronhvatekha for „Lr "'■'"■'ger. and »io,ooo .stock 

formed an<l Hnanced it « ,; 1 fuen r • '-"'"P''">' '"■ '"r "'C <''<ler which had 

"^^7:;riirM^:t-?—-:;^tf "•'''= d.e^Sr^;;;;e-. '" ~''- 
-St, no failure of .^^i^ri^^j^^r J^i^: ^f'zz^CtTS ^Li!;: 



IT^Ji'iT''"!""' '""r'i! '° """"••'>" "-« '>"»' Company ol which he w„. 

ONE WAY TO BUY A SAWMILL 

Sroup of fnend, was the acquisition of British Columbia timber limits and saw- 

Some time in 1903, Mr. Fowler, on behalf of himself, Mr. Irwin and Mr 

«Sn limiis °"/" M •'^-PO^i''™ l^'"" "^' l^-nion T. st Co. to join.; purchase 

rn" Tru 'co ,h";,uri''h"''",H'' '" """'" ^'''''™'''" ■^''* P"""^-^' ™' 'hat the 
,«n . u I ^ ^•"- ""• P^P^-ty ;md should turn it over to a new com- 

«« cent rd'^h'" .■'"'' T ""■:■- '■■°"'"' '"^'" •-""' ^'^■C'"--"K ^i.O"W haTe 
mip?rt 1^ ti, ?h °" ^""' ^°- 5- P<^ «"'■ Eventually, whenever that 

might be, the three a.Mcciates were to pay for their st<x-k. 

orooert'v ^r^" "'^'""i 'II"' .*" ,Y".' ""^ ""'""nd-oul owner of the option on the 
property, and approached the Union Trust simply as a vendor. Mr Foster 
however, avers that Mr. Powler entered on the negotiations for the purchai of 
he property or and on behalf of all •'those who were exported to Cmrin 
ii-restcd. m.iudmg, presumably, the Union Tru.st Company 

Rvan"'„^°*.''*'" "''^^ "^^'' ^'- ''"*''="■ "'"■•''"^<' f""" '^^ ^frent, Mr. Peter 
a, v. hZi S'^ ' 'TVf' 'r "«"'•"'"'' f"-- "le. one of which wa; to be oper- 
tteottrtK •'''""/,"'' 'T'*'' l"** -■*"'"« ""^ '■■"'" 'he property for $,°o,cS^; 
msed^ , n V ''".K °™'"''' '" •*" ^'"'T ■^'•"" Co- »-■= 'he real bargain, pro: 
posed to sell him the same property for $J2s,ooo. 

,„A K*" 1'"' yent through as arranged; the Trust Co. paid Ryan the $«c 000 

greate* tT^,1, '^7'" "l!*"^'^, "'"'"^^ hetween^he agreements ^;T; 
greate part of it. From this. Fowler paid Mr. Foster $2,500, and nrobablv 
paid him $7,000. He paid Irwin $.,000 and McCormick $.='00^. Steps were 

™td"- th ™*-' .""""^P' '-'™'"' ^'''- 'h* 'hares being dis.rfbu J as 
suggested in the original purchase. 

While these negotiations were in progress, another property was offered to 

r^V V u ,^ " "^J- ? *'"»"'"' of •-•ssets and liabilities had been submitted 
deb,s%^^''o,%« 7' '.h<>»-"K,-«'^«6S,544.66. stock liabilities $50,0,^ o,"er 
debts $11,026.81, leaving profit and loss account at $2,517.85 

it J^'Lrr!^^^ '". ""'"'"^ '"""'"J '™'" ""■' McCormick were also interested, 
t7rj: '^Tc" turn over ,0 the Kamloops Co. at the moderate price o 
h»n^; '"X '■•^•°°° f°'- 'OSS. or a total of $217,000. .And this was what 
happwed, the money being put up by the Union Trust Co. This was divided 

tr^lyrCo-mSi^lttc'r • "•^" --^ «-"- ■•" -»' P™P^"°" 
Practically, the plan worked out that Mr. Fowler and his associa' .5 unload- 
l„T^' tT" \"'3 "■" *400,ooo property which rost the fr .ler owners 

sirl ;^' A ""^"'t'"^ P"""^'" "*""'. 'o " very consid, rable extent, that they 
simply turned over their own property to the Union Trust at double its cost 
I he Union Trust put up the money for the whole proposition, but Mr. Fowler and 
his associates retained 49 P«r cnt. interest in the whole property, for which they 

orofi*t'° Te°^Lt ,L"'n •^"'t tr' ''T '" "« '"*"■•'• ^'eantime, .1^ cash 
rr.n««,o. ""^ * '^ "*^ ^"^ "" 'hout .qual to 49 per cent, of the whole 

Accpti.t tk* SMIMMM W Mr. Fwttr thai Mr. Fowltr was reallv reore 
...ti.r tk, U„l.. T™. C. „i ,., •...h.rs „p.ct.d .0 be irteres'ed" in^I^ 
new eompan,, th.r. .r« Mnral |Mints w»rthy of note in these transactions. 



.ii tliii; a> r«picsi-lltiiti\i; of Ihc pios- 

jointly interested, to kniK-k dowi: 
>i to s<ll to the conipaiiy u $40,000 



Wh»t businesf had Mr. I'owlfi, whii 
pecti\e company in which thfy were n> 
*55'<*» of 'li* t'nion Truit ( o. '« money 
property for 11^3,000 ? 

Mr. Foster recaived » portion of the $55,000 rake off. W hat was this for ? 
Does It support the view that .Mr. Foster did not know there was a rake-oft ? 
And If he know this, what wal his position in not lonveying the information 
to the Union i rust ? Was thi.s the exercise of •'forethought- and "care" in the 
handling of the funds committed to his keeping ? 

The "examiners" .sent out by the Union Trust Co. to look over the fir.st pre- 
perty we.-e none other than .Messrs. .McCormick and Irwin. Docs it not seen, 
remarkable that these gentlemen should have brought in a favorable report and 
recommended the purchase of the property ? Thev had the chance to become 
shareholders in a company for which the Union Trust was putting up lire money. 
Under such circumstances, it would be dilficull to imagine property so poor that 
It would not be to their interest to recommend its acquisition. 

More than this, Irwin and McCormick, though sent out and paid by the 
Union Trust, also received Si, 000 and SiJ,ooo res|),-ctively from the rake-oH. 
Uoes this tend to the conclusion that thev did not know there «as to be a rake 
off provided the sale went through ? 

Even assuming that Mr. Foster knew nothing of the proposed rake-olT, wa- 
it the part of ordinary business judgment to send out as "examiners" men whf 
stood to become benericiaries in a speculative enterprise at other people's expense 
provided that they "examined" favourably ? 

CURSING THE ENEMY 

When Parliament met .session before last, the opposition members realized 
that their chief business in life, if they wished to remain members, was to divert 
public attention from tliemselves until the findings of the Insurance Commission 
should fade from the public mind. 

This obligation was considered to lie, not only on the .active members 01 
the Foster group, but on their Parliamentary associates generally. Mr. Borden 
had long before rushed to the defence of Mr. Poster, and thereby put it up to his 
Parliamentary following to cease following him, or to .swim; inlo line and ;iid him 
in the defence. 

Tlie "following," though with very varying degrees of enthusiasm, saw the 
situation, and concluded th.it it was better to be a party with a bad cause than to 
efface all semblance of a party in a good cause; that it was better to stand to- 
gether and defend the "cult" than to stand apart and let the "cult" defend them- 
selves. The latter course could have only one result, and as Mr. Borden had 
already taken the opposite course, he mu.^t have figured among the ruins even 
more conspicuously than Mr. Foster. And with Moses and Aaron both gone, 
what hope for the guideless wanderers ? 

Another consideration. Mr. Foster and his financial following had been the 
leaders of the assaults on the Grand Trunk Pacific project. It had been proven 
before the Insurance Commission that this group had been given "the best that 
was going" by the C.P.R., and had profited by the timely kindness of Mackenzie 
and Mann, of the C.N.R., in backing notes to finance the trans.action. There was 
abroad a very general and a very axcellently founded assumption that these gen- 
tlemen had not receivad thasa good things for nothing — that they had simply 
been the reward of zeal in knocking the G.T.P. 

If the other opposition mambers stood dumb and permitted the.se gentlemen 
to be pummelM in the Houie, and probably driven from public life because of 
their "corporation coaaactiaaa," wko could tell what would become of them- 
selves ? No cvidance to tka coatriry having been produced, there was a splendid 
chance that they, taa, wauld ke included in the arraignment, that it would be 



T^Z.T't *'%"""P'-f' ""l « 'he Mlence of (juilt, nn<l that they should share 



the fate o fthe fin.M.ciai group. Hoivevt, di^ristrous was repudiation," slience 
nau diM) Its danger,, neither few n.)r in.onsideiable. tt was a rase of ■■Sncal< 
up, ^cnlk'iiien, now i^r never." 

s-. ?,'r "^I'l '",?''' ''>''.*;•-'"•> l'"""pl' ■nei .si-ruple. Honieii and Koster mu.st l« 
>. ..<!, or lin- Op,,„Mi,„n w.nild 1,l- Jivi.lcd and di>cre,liu-d, wilhoiit le^idcrs, with- 

T,'> i:.l^,ll ,'","'" r •■'■"""' "'"' "'"'""' »'■""!"'« in the House or Ih.- coimtrv. 
10 »h.te«asi, .l,c (,n.m, icTs was manif.;sliy i,.,p„.ssiblv ; there '.-r.ainud onlv li'„- 
opponents were as b:id as thinisi'!n-s. lii this 
joined \vith a fnry wliicli slu)\v('d In.w (ksperali' 
id \iiiii zealous ingenuity worthy a more honouriil)lt; lausc. 
, , ' ■■' "srandal" session, and that prarlically nothinfr else 

trom the Opposih.m benches. 

The point t(. ];. kepi in mind is that had every "srandal" been uncok.ured 
and unprejudlred l,-„tb instead of nnadulteraled slander, Ihi. whole arrav was 
n the hop<- or expeitation of bringing about a better condition ol 

was to divert 
iberaks. 



cour.se of protest i 
task, the opposili 
was their plight, 
Henee it war lliat we h. 
ear 



ti'.il Iheir 
nienibers 



raised, not 

thin^ 

attenti 



• ■ , ' ""I" '" expeiiatum ot brnurin"; about a better 

s. but forircd in ni.iliee and laur. lied in frenzy, their purpos-- « 
tlon from koslcr's Frenzied l-innnee to allei;ed misdeeds of Lib 



PURELY HIS OWN AFFAIR 



friends fn 



Foster s • leiizied I- man. <■ has <lestroycd the public character of the federal 
opposition, robbed il of ds political siRniCicance and dwarfed it into a semi-private 
of men whose chief purpose in life is to defend Mr. Foster and his 
tro:n the conseqiic ice .)f their own misdeeds, 
rii. sittings of ibe K:iy,al C--mmis.sion on Life Insurance and li.e evidence 
given before Ibat bodv made Mr. ^o.ster, his associates and their doings the one 
outstanding Ihougbt in the public mind regarding the party to «hich these gen- 
tlemcn belonged; it placed liefore the countrv in a new light the principles these 
nivmlers of the opposition adopted in the handling of other people's monev, and 
"■K'r '"■-' """''"' "^''-^ ""'S'l' '"^ expected to pursue should the mrna^ement 
ol the linanrcs of Canada ever fall into their hands. 

Since t;..il lime, llie party rcpresent.itives in the Kouse ha<e been delilier- 
ately, sy.steinatically and skillfullv manocuvered, jockeved and dragooned into 
position, unlil ihey stand an unbroken phalanx of defenders-in-ordinarv and 
apologists-extraor-linary for the brand of politico-spec, iators who o-mpv their 
front benches .-md dommato the party caucuses. True, some disniav a measured 
lack of enthusiasm m liie cause, but the criieial hour alwnvs finds them voliu'r 
solid. 

The net result is Ih.it whatever may be the opinions and wishes oF the pri- 
vate m the r.ink.s, his leader, his parliament:iry mis-representalivcs, and the chief 
newspaper esponenls of his polilical failh stand hand in hand for the defence ol 
the r-..^lcr '.n.np: hov-Mcr piih!:r-spirilcd may Ije his political artivilv. he has 
Ixcn made i-.-t of a niacbinc for whitewashing reputations such as he woula 
neither covel nor lolerate for himself; however disinterested and high mindcH 
may be his polilic.-il ideals, he is represented by those who speak fo- hi.n as the 
rietcnder of the iiu!efens!ble. The P:irliamentary parte which his vole helps to 
maintain for Ihe betterment of public affairs has been perverted into a group of 
personal apologisls and advocates for those whose dealings he would neither emu- 
late nor endorse. 

This perversion and paralysis of the opposition is more than the business of 
Mr. Horden and Ills parliamentary followers; it is of concern to more than the 
newspaper lights which reflect their doings and sayings, and has an interest 
broader even lliau the membership of Ihe parlv of whom they should be tl-.e rc- 
prosenta lives. 



It u tbc business oJ Canada, and is ol inlcresi lo all Can;„lrun, A Ha.lid. 
nien.n) par y exi,ls to advocnte the application of certain priiuiples and certain 
Imes of poi„:y t„ .lu- dis.h.rtje „1 ,l,o p„l,li,. l,.,.ines.,. It'ppci (or the fr'n- 
chLse of he |x.opl.., ,„,| ,„ rcl.irn, tho p«,plc have the right to dc,T,:md the ex- 
clusive ;,tlent,„„ of the pnrtv lo advan, ins; Hh- orincipl.-s for «h,.vc support the 
Iranthifo was sohi-ited and liestmvivl. 

»nrf ]•''* '"I""' "'^l'""'"'"" ''•■>"<!' 'n-rfav for the instiriiMtion ol iIk- "prin. iplcV' 
?hev r P." " '!"■ '■'"""^ '^'""P- ■•'"'' P"''i''nllv f"r "alhin, „,„',.. Wrre 

riev tnf t>nn<Mplcs on which the opposilron ,.,fmh.r« were return..,! tn Pnrli.T 
ment .1 i.l lor the advnnreiru-nt of wl,i,-h Ihr ouhlir framhis,- was soli. !led ? 

A pohfral partymav l.r s„ffi,-i,.„tlv ,|,.nm.,l as .-nnsi^linsr of those in the 
tJ,- ; .T f", """f* '" """ ••"!'■ ^"■""'nt of certain political views. It is not es- 
senttal that there he no diffcrrives of opinion on :„:,rtcrs of minor i.nportance, 
nor that Ihe purpose nlmc! at he snnported In- all f<,r the s,„,.e rcn^nns hi,t it is 
essential that „pon tho main nrnhlcms of p„Mir ronc-.-rn there Ik- cncirrence of 
opinion and unity of .vtion. Without this there cap he no ivirlv and 
for the evistence of a party. It follows from this that the vvclfaiv of 
.a matter of concern., not onlv to the l.-adcrs, Init -o <he rani, and We 
cho.o„ the lenders for the h, tter arhaneement of the common end. 
■vhon, the leaders in tr,-,. rilv for the oower to aceomoMsh «h 

hercfore. the n.iv.-fe -onduct of a leader in a nnrfv is such a 
his nuolic position, and thus para'v:- the cause for which the , 
surely poor cocsolal.on for the rank- and file tn he informed that ii 
fransn.-tions of their leaders, the puhlic has no concern. 

limy i.s a broader interest .stiil. In democratic countries nrocress in gov- 
ernment l.s made only by the conllict of parlies supporting oppo.MUi; views Ihe 
public iheielore, ha.s an interest in every party and a riyht l,> cvpcrt some niea 
sure ol public service from every party. Whatever cripples a party or paralyzes 
Its ability IS a matter of legitimate public concern, and a matter from which 
public attention is not lo be dive, led by the pelulanf Ucclaralion ol a party kaidei 
ihat his doings are nobody's business but his own. 

Mr. hosier and his friends have di.scrediled the Conservative partv and de- 
stroyed its pubhc u.-clulne,ss more elTectively than any opponents to that party evei 
could have done. Ihe sophistry o( these -c.illemcn aside, the plain lact remain.- 
that the lieople ol Canada have lost laith ia Ihcir "private cli.iraclcr," and heiict 
111 the dismteresUdccss of their "public position." The performances of tlic.se 
geiitlemcn have wrecked their party and paralyzed its ftinction.s as a factor in the 
political life ol the <ountry. To the parly which has 'to bear the humilialion and 
the country which Ims been roblxrd ,,f the public services it had the riirht to expect 
the only consolalioii offered by Mr. Foster is, thtit his ir.etho'l ol jusgl' 
other people's money is purely his own alTair. 



MO reason 

a pnrlv is 

who have 

and upon 

end. When. 

tn comnromisp 

rfv evists. it is 

these "private'* 



ping vvitn 



Raw and sore that his dealings with the I'niou Trust hunds have Ixcn made 
pubhc, .Mr. hosier sou-ht vengeance on the Koyal Commis.sioii bv whom the in- 
vestigation had been conducted, and in the House and out ol i! iia.^ wailed that 
the Commission exceeded the purposes ot its cre.ition in Iracini; Ihe hinds ot tin 
1-ore.sters out into :ill tho devious hut convcrsins; channels into' which Mr. Fostei 
and his friends directed them. 

On the face of it, the plaint Is without corioborative evidence. The Con,- 
rr-i-sion lnv£sri.;alci: liic Can.ida l.i'c .-\s.,urance (ompanv's business nuile a- 
exhau.stively as that ot Ihe Independent Order of Foresters.' Thev beslovved cer 
sure on Senator Cox as readily when occasion retiuircd as upim Mr. Foster. 1 
Mr. Foster received a larger share than Senator Cox, it was siir.plv because Ir 
deserved more. 



14 

•or Ic^.tin/wri^rt's!,''";,;'';- \^Z rH""" '*k.1"P'^ «"'""' '° "« Commission 

without WticTness ,,f v,, r it ,n, ui.h . '^''•.' "^ " "-'d b«n Kfilty, tiley did so 
ler was n„l the bus n s I .h^ • """"•;"' l-inRu^'KC. To ,c„rc ^rr. Fos- 
•hini; ..I llu Wn I, th . ^ "" ' • "">■ ^'■•'"'^'^ '■dmirably from any- 

d.vn..,,,.rvpri„dp,.',„,,;li7, '?'"'■ i' '™ ''i"">' '"''••''"I in^trurtions in thi 

... ;.£s . ^..<..:::i:;::rr ^r:r i^';,u',:::;;;-^^:n--: 
^^,^=:' i:z:^££-- r tr^s'^'^i-C:. :::^ 

losing Ii,i^.„e I'h ris , h M .''"'■"•'.'f'- -''."■>"'*^^" ■•"•'^ ""' '"'""«'' hv th. 

the hhrhos' tribute," he |„lc' X ;",.- ' " '"'".r''''' "" "' "-^ "-""..-cloer is 

ndds his t.stin,„:v t" Zht^uJs^h' ::, z " T;iT"'r:K' '^ ^'"-"'^ 

doers i, thoy had tnmmod their ;n;!::i^;i;;„t s^' N^'^^r.'"'" -'"^" "™'"^- 

and their d„i„,s. Tl. Comn.issionV;: tnew rh.::^'^ .a ThTy' ;''r°si:,:d'',^ 

>«ded, and the findin,., were recorded J.^outmL^il'^btn 'a No "wTtS 'J^r'^^"- 

His assaults on the tonm.ission landed Mr. Foster in •, worsL n,« ,i„n .k 
he had occupied before. He had previously been condemned ou, of h?. 
mouth: h,s assaults were sin.ply a confession that he "™W not clear hinse,r" 
any .single count. All his in,- nuity could not explain -.wnvth. ^J"V'"'«" »" 
eted while handing out Union Trust F^d" ,mr his d^^f'n V ""' ""^ <^''- 

a lean company an'd meml^r of . syndicate bor^wi'n^s':;^/;;:,: ?har.oX°' 
pany; nor the bagginR of the .-,37.4 bonus stock from the Fores ers Norer,; 
the ,nyect,ves he launched against the Commission becloud theTart that on Z^ 
essenfal matters he had no valid explanation to offer. He tried to defend tfl^ 
defensible, and his last condition was worse than hi, first ^ '"" 

.Another body has pronounced on Mr. Foster's doincs and one ».r,;„., i,- u 
he can launch no a,,usation of .ollti.al hias-the Inde^en^ o"rder oTf^ eTte'r"; 
Did they approve of h.s management of their funds ? Did thev crntefullv n^i ; 
the dividends of which he boasts and retain his brillian serti, es ? S ^f ,7 
They relieved him of the burdens of office very promp^K when^he nati^r- „f f ' 
dealings became known. '^ ' * "^""^^ °' *"« 

Mr. Foster has lieen thrice condemned, twice by himself _ in fl,. . ■. 

e'sTerT' Win^H^T" "' ""T""' " '■"<' ™« "-^ t'-e' IndTendent Order 7^ 
esters. Will he charfie each accuser with malice or bias ? 



According to Mr. F.iter it is impossible to "separate altogether private 
character and public positio.," a.d having laid down this standard for the me" 
WmsTir' "° "" ^ ''""'^ '""'' *" °'')«<="°" 'o its bein^ applied to 

We are invit.i thus t. ,« i, tke m*liv«s and purposes of his private lite 
the aim. and end. toward wki.k Mr. F.st.r works in public life. And in the rul« 
•f aetiM that li.ve r.»er..d tk. c.duet .f hi. private business we are invited 



o( conducting the affairs of the country. 

to J^Z^^'l " '' ""' ""^^""''^J '" ■"■"■Pl 'hi» implied invitation of Mr. Koslfr 
t™.«^o„, ;■' T"""' """'T •'""' "-^'iK^"- 'I'e .h..rnc,..r of his pr"v," 

ng these affa rs a.s ■■pri-atc" his implied invitation m.iv Ik- taken as exlondinl 
to them as fully as though thcv were private in rtalily. exitnuioK 

.Im.^^'J'' T "•'■"''.='"' "' i"<'Kn'ent, therefore, we are Icll „. .upp..., ihat the 

Tru t"c^ ™r;^r""* ^T'""'' "■■, '■■.'"'^•'■'" ""■ --»."■""•.""' >l,e Union 
In! u ;■ / ^ ;'""S and motnes of hi. pul.li,- life; that hi, methods „f hand- 
hng the funds of the I'nion Trus, C„. are 111,. „,elho,ls whi, h he v,ould like to 
apply in handhoK the funds of the Uoniininn of Canada: aiul that ,h rtoi° 
wh, h he considers suffrient excuse for his operalions in conneilion will, Ihe T " t 
field "v^'hTh *™''' '■""''"" i-i«->.i- I... puisuin,- a siinil.ir ..cc in ,ho hroa e 
dfsOraV "■"""' '" " ""■ ''"'•'""'••' "' ""■ Dominion were at his 

Let us see how this works out along the line of Mr. Fos-,.r's reasoning and 
practK^e. He arfi-iies that trust funds cease to h,. trust fnnds when passe.t over 
to a trust company. If -his he so what a eran.l opporlunitv would he nlTo-'-d 
lor the app ication of the doctrine hv his elevation to the trea.„rv benches r„r 
If the fonslcrs' rconey when dumped into the coffers of Ihe fnion Trust ,sease 
to he impressed with any trust, why would not the funds „f the Domini,.,, undi-r- 
RO the same transformation if pla.ed in the tre.nsiirv .,f a simil.nr concern ? 

Both the preaching and the practisim; of Mr. Koster uphold the theory that 
once trust funds have teen freed from this restriction hv lilllrinc ihrout-h a , is 
company ttey may be launched in any exploit, however ,,ues,i;,n;,l,le.''and ". 
the real owners of the money have no say in the m.-,tter. If this rule wis ni, 
plied to he converted" trust funds of the Foresters why would il not be equd Iv 
applicable to trust funds diverted from the National Trerfsurv ? equ.iiiv 

Air. Foster accepted commissions or reductions or drawbacks or rebites or 
whatever particular name he piefers to call thetn by. Iroin the c.oney .^t the For 
esters l«;ng paid out by the Unioo 1 rust Compan . ]( the -con e",ei" trus 
funds of the Foresters were liable to such discounts on behail of and lor the bene 
sillt^o'T"^"' "*»: ^'■7'^"'" dnertcd funds from the Uominioi, treasury te 
same LeV? " ' "'•''""^'^' ''^ "■■= '''""' S'""^'""" -" "'""£ 'h^ 

The investments of the "converted" trust funds of the Foresters were made 
m sj:- a manner ihat the lion's share of their earnings wen. not into the treaurv 
of the company, but into th« pockets of .Mr. Foster and his limncinl - i c^ ^ 
associates. Why should not "ihe diverted trust fundrc7t le iTom n ,,n e'm v"?' 
c>Hor the same purpose.and with the same result if handled unTe^ "he 'one a,:!-' 

?unds^ '^ ' '" '"*■ P'""'^ ""''-" ■"'*•"" b^ -■-'«J by'^itslirverted 

Mr. Foster's defence for his method nf handlin" th, "-„,. ,. ... , ., , 
.he Foresters was that dividends were returned To , he-owners W^'d the"p.UIe 
of Canada be prepared to have their funds nervertd to fm=,n.. , vvouio the people 
conducted along similar lines, under the sa^me ra'rgemeTanVf-or'ir "r^ 



. in 1*v n* "'"' '"*' ''''■ '■«"''<« ^^ •■"*'". l-o,i»crv..ii.c M.J'. I.„ Kini,. 
^rty m, the In IrusI t.m.pany, and to have ri'lk-vcd then, of more surplus 

t.. th ^7". '-•'• ••'")'1''"K ""d f-Tl«l, or ,hal he wns ever forced or asked to take 
wss than he dcmnndcd. 

fewne.'.'TK^""' '"" "*',>''''' .'"'^"»'' '" ""= "■""""^"^ "' his operation, or the 
irZ,\ ," "■',"■"• ,P" "" '■""'""■y. 'here wa., always 'somethinK 'l-mK" 
n that qu.-.rt.T and .,s„ally something of n.ore than ordin.-,ry proportions. \W 
dtd he ronfme h,., atl>.„l,on to a sinf,le line an.l rely on pr.M tire to pr<,<lure perfc-c- 

equally a home m sr,urmfr "the liest that is Roin«- from .Sir Tho„,;,s Sh:,„«h. 
nessy and u, net;,.,,.,r,nK vulh IVi.t Kvan for duplirato atreemonts of sal. 

(.ertainly he neicr rcsorl.-il to ruttinj; pri.es to lone s.d.s, il,o„Kh Iho lc-..,n. 

al.on must son,cM,mcs have been strong. VVheu the C.P.K. hnd d.al.. were on 

he crpet for ,„sl,„„c, the su,d„ale h:„| put up ,|„ ir ,a,h as^els. Sb,.x«, and 

.Id r:..scd »if,,oo., M„MV on the ind.,rscmenl of Mackenzie .< Mann 1,. .-omplete 

mL "7 P/'.>"7'- '^ '<■" "'''■■'^■■' ">'" 'h« wore ..Wird to x.t M.„ken/ie * 

Mann ., backmg for S^omx, more, and still there w:,s S,f,,o ,f,r^, due onlv a .nonth 

ahead. Where was this to .-..mio from ? Would M.'akcn /ie X Mann h.uk th.M.i 

again? Would the C. P. R. wait ? .And if not what would happ..n Well, pr.-ttv 

nearly anythinR mi^'ht happen. Tlie stri.in must liaie heen tenihlc. TIk .sale 

must he maile m a month, liul did t;eorf;c cut pri.es ? N.>t a bit of it He 

marked the prop.riv up Si.oo fier a.rc and conducted the deal as coolly as th.,ui.h 

he h.-id clermly to pl.iy on, and no interest charges. 

To be sure there was no feature in hi.s favr . Mis customers had mmle 
lunds and h.-,.l also >cry generous views regaru.,,^ prices. The- ne^cr were 
broke nor ha.-d run. neither did they quibble or dicker. With the r.-so„r.-es ol 
he [•oresters at their command they were r . disposed to count a .lollar here ..r 
there o. much conseqiuncc. They simply paid over the mr.ncv and took the 
^?mt'., , ■" """•;■,.'-"■';?.•■■ ^^'I«"'^'" "'k ? Allowing for this, there is credit 
comtng to (.eor^.. \\ History does not record that he was ever worsted in a 
financial bout wilh .Mr. Foster or th.it he ever Iw.siesfod the I'nion Trust in vain 



.. ,^Tlf ,." ..'"'1'""'^'' he took from the funds of the Union TruVt. the 
rake-olTs Mr. l-owler .iiu.ted wilh him. and the ■■rake-oirs" he cathercd from 
the specul.itinns lu.anced by the fnmn Trust, Mr. I- osier declares that he is i 
niior man. ' 

7/jen Ti'here did the money go r 
_ These tr.ms.i, tions wore cirrii'd on preccdins and during the general elec 
uons ol KJ04 Uurmg that campaign constituencies in every province from sea 
•a sea were lio.iiled with Opposition campaign funds. 

" hurr diii / i:.i luvnry come from '• 

do whh^Ih.rr'Tl!'"' ""' '''""r 'f y^^:-?'!'" ^^hat would he be mo.^t likely to 
do with then. .- Ihc success of the (Jppo.sition -neant that Mr. Foster would be- 
lome Minister .f hinance. 

What. for ? 

DO THK PFOPI.F OF CWAD.A W.\NT TliFIR .MOXF.V HA\DLED 
liV FREX/IEl) ; IN.\XCF .MFTHODS FOR THE SOLE BENEFIT OF MR 
FOSTER A.\D HIS GROUP OF FRIENDS ? 

,",ORA»N PRE5S,AlOTTAWA