Canada. Royal Commission on the Bren Machine Gun Contract : The Royal Commission on the Bren Machine Gun Contract was established under Order in Council P.C. 2251, 7 September 1938, under Part I of the Inquiries Act (R.S.C., 1927, c.99) and on the recommendation of the prime minister. The Commission was mandated to inquire into and report on the preliminary discussions and negotiations leading up to and the completion of a contract executed on 31 March 1938 between His Majesty the King represented by the Minister of National Defence for Canada and the John Inglis Co. Ltd. whereby the company undertook to furnish His Majesty a certain supply of Bren machine guns; and into the shareholdings and transactions in the shares or securities of the John Inglis Co. Ltd.; and the connection or activities of any member of the House of Commons in the discussions and negotiations leading up to this contract or in the affairs of the company or in the sale of shares or securities of this company. The Commissioner was Henry Hague Davis. The Secretary was Paul Belcourt.
On 1 September 1938 Maclean's published an article written by Lt.-Col. George A. Drew, entitled "Canada's Armament Mystery." In it the author made numerous allegations concerning negotiations leading up to the signing of a contract in 1938 for the manufacture of 7000 Bren machine guns in Canada. According to Drew, negotiations for the contract started in 1936 and involved a trip to England by Major James E. Hahn, who acted as a representative of the Canadian government.
On 1 July 1938 the Minister of National Defence, Ian MacKenzie, confirmed in the House of Commons that Hahn had visited England in 1936 to investigate the Bren gun. Earlier, on 16 May 1938, MacKenzie had told the House that "it early became clear that Canada could not look to the manufacturing establishments of the Government of the United Kingdom as a certain or timely source of supply reasonably safe from enemy action."
A contract was signed on 31 March 1938 between the Minister of National Defence for Canada and the John Inglis Co. Ltd. of Toronto for the manufacture of 7,000 Bren machine guns in Canada. The Inglis Company also negotiated a contract on 15 July 1938 with the British War Office for the manufacture of 5,000 more Bren guns.
Drew claimed that the total cost of the manufacture of the guns was expected to be about million and that they were to be produced in a factory equipped entirely at the expense of the Canadian and British governments. The two contracts provided for payment on a cost plus 10 per cent basis. But as Drew pointed out:
"Many of the items on which the 10 per cent profit is allowed in this contract are extremely unusual. Profit is in no way limited to actual factory costs. For instance, the government pays the salaries of all executive officers of the John Inglis Company Limited, although their activities are not confined to the manufacture of machine guns. It also pays travelling expenses .... Other unusual items to be paid by the government, and on which 10 per cent profit is also to be paid, are legal fees; telephone, telegraph, and other office expenses; cost of light, heat and power; of all plant alterations (including even the cost of removal of any or all machinery which may ever be removed), and the cost of all tools, dies, jigs and gauges, whether bought from the company or manufactured by the company itself, if they are to be used in the production of Bren guns. Nothing is forgotten. The government even pays for all cartridges and explosives used in testing the guns before delivery. The government, or rather the Canadian public, pays everything, and then pays a profit as well to the company of 10 per cent of the amount of these already remarkably generous payments."
The company that obtained the contract was organized by Major James E. Hahn and Plaxton and Company, a legal firm, acting as Hahn's solicitors. It was chartered on 23 November 1936 as British Canadian Engineering Limited. Drew was concerned about the possible involvement of Hugh Plaxton, Member of Parliament for Trinity, in the deal. On 4 June 1937 the company changed its name to the John Inglis Company Limited because it acquired the property of a bankrupt boiler firm that went by that name, and it proceeded to convert the boiler plant into a factory for the manufacture of Bren guns.
Drew raised several questions relating to steps leading up to the acquisition of the old Inglis Company by Major Hahn and his associates. He also questioned how the new Inglis Company was formed and the allotment of its shares. Drew was particularly concerned about possible speculation and profiteering in the shares of a private company that was so heavily supported by public funds. Also, he challenged the wisdom of appointing E.T. Pointon, a stockbroker, as the treasurer of the new Inglis company. Drew ended his article with a list of 20 questions regarding the contract and demanded that Prime Minister MacKenzie King, give immediate answers to them. As Drew put it, "the public has a right to know every minute detail of the contract itself and every transaction connected with it."
Just one week after the article's appearance the Government of Canada appointed a royal commission to study and report on the Bren Gun contract. (See Lieut.-Col. George A. Drew, "Canada's Armament Mystery", Maclean's Magazine, 1 September 1938.)
Hearings of the commission were held in Ottawa from 19 September to 24 November 1938. There were 388 exhibits filed with the commission. RG33-66 general inventory
