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| --Charles McKeown took up the ex-- |amination of Mr. Fleming on the subject of the $42,400, and estab-- Illthed that of the several Mason chegques--$18,000, $2.500, $25,.000. $12,000, $1,000 and _ $100--the first two were drawn Oby O Mr. Mason before the bond _ deal was negotiated, the large $25,-- | 000 item on Sept. 28, the very day |that the deal was transacted, and lthe remaining three before the Home Bank had received any moneys from the Province. "Yours in Anticipation." Paul R. Fleming, of Kerr, Flem ing & Company, was then called tc the stand. Mr. Price stated that Mr. Fleming was not being called on account of anything that affected his firm, but to get from him some information concerning offers made to the Province to sell bonds. Mr. Price asked Mr, Fleming: if e "As I remember," he said, "the General Manager -- saw the new Treasurer to advise him we had made this deal with his predecessor. He had no knowledge of it when he went into office. There was some discussion about the price, in view of the price at which our bonds had 'been sold, and I think it was 'as a result of that that the General Manager advised us that there would be a refund to the Province. Q.--Of the $15,0007 A.--Yes having in mind the profit we hac made on the transaction. Q@.--Now, the $15,000 chequ:« hasn't anything to do with th« $42,400 matter? A.--None whatever Q.----A different transaction? A ----Different transaction. . e TTer' Ese _ Weitt. Iiig@A. D6 an in-- ternal matter in the bank? A . -- Yes. Witness was asked if he knew that the Province had approached the Manager of the Home Bank and told him they had made too much money, and that there should be a rebate, Advised Them of Refund. Q.--And this talk about one quarter per cent. might be . ternal matter in the banlk * Q.----So that Mr. McGarry, when he swears there was no arrangement whereby the Home Bank was to get only one and a quarter per cent., he might be quite correct on that? A. --According to the correspondenceo you have read this morning he would be correct. a profit themselves? A.--Yes, we might sell bonds for the head office, and they allow us one or one and a quarter, and take the balance. To Mr. Price witness said he could have no knowledge of the meaning of all these cheques totalling the $42,400, but, to Mr. Price's question, following upon Mr. McKeown's ques-- tions: '"So that the payments out in September before the loan was even negotiated could not be very we!l charged to this loan, is that right?" witness replted: "That is right, ur\- lfss they were charged in anticipa -- tion." Mr. Price--And the anticipation was not very good for a long time? A.---Qult_e true. In the period when I was in Chicago there were no profits anticipated. Q.--So that this $42,400 was a cheque to Col. Mason's account, head office, on December 19, 1919; it was apparently to recoup Col. Mason's account for payments already made? A.--Well, the exhibits would indi-- cate that. Q@.--The head office had allowed you proms_ on other deals and taken WednesAay t AP"; and a "Did you get instructions from Mr. McGarry, once the loan was ar-- ranged, to get the Order--in--Council and put it through?" }'"No." Mr. McGarry would look after the print-- ing of the certificates, he said. Mr. Bproule said that anything he had to do with the transaction was on record, and the vouchers were in the department.. *"Beyond that I know nothing of it." Em | '"Was this issue an exception to the general rule?" asked Mr. Price. "Only in this way. I understand there was an open question, as to the amount to be paid, the rate on the dollar," said witness. Coming to the letter of June 30, in which the offer was at 94.78, witness said that offer was accepted. Mr. Price said that, figuring the pound sterling at 4.2%5 this) was equal to 82 7--8 in Toronto,. The firm of Browning, HMHarris, he said, accord-- ing to the returns, sold the same securities at 99 five days later. C. H. Sproule, Assistant Provincial Treasurer from 1905 to 1920, when he was superannuated, was asked if he remembered anything of the four-- million--dollar bond issue which was sold by the Province to the Home Bank of Canada shortly before Hon. T. W. McGarry. went out of office. Mr. Sproule said he did not recol-- lect any of these deals. If his mem-- ory served him correctly, he said, the Provincial Treasurer always at-- tended directly to all arrangements in connection with loans.> "My ac-- tion in regard to the matter would only commence after the Order--in-- Council was issued." > Chairman Finlayson explained that a sale from the Provincial Securities had been purchased at par on April 15. Witness said his offer had not been accepted. In answer to a ques-- tion by Mr. MacBride, if any reasons had been given for not accepting Mr. Price replied that there was no answer to the letter, apparently, but on the 10th of June there was a letter sent to Kerr, Fleming & Company saying the Province was ready to take up a certain amount of the securities if the firm still held, them and would be glad to get in touch with them. "Is it usual for you to hold something of that kind for two months?" asked Mr. Price. '"*No, sir, we try not to hold it for two months," said witness. 82 Refused and 99 Paid. Mr. Fleming said that one block he had bought was brought over to Canada, but not being able to sell it had to resell it in London. This block of £2,700 appeared to be offer-- ed by some dealer in Toronto shortly after. a his firm had made inquiries as to Ontario inscrib8d stock respecting itn. liability to English death duties. Witness said he had got the au-- thority of the Inland Revenue De-- partment, Somerset House, London, and Mr. Price produced a letter, dated May 24, 1921, from the Estates Duty Office setting out that in the event of the death of any holder of such stock, estate duty would be pay-- able in England. Mr. Fleming said he had sold a block of this stock to a client. Apparently this question then had been raised, so his firm ascertained the facts and, finding what they were, bought the stock back from the client. Bargain Prices Rejected. The Provincial Treasurer then took up with the witness the offer of his firm to the Province on June 30, 1921, of stock to the value of £13,-- 375 at 94 7--8, witness explaining that the sterling was to be calculated on the current rate of exchange. On April 17 he had offered the Province £10,000 of stock at 91.14, with the pound at par. That offer was not ac-- cepted. The Provincial Treasurer said he noted that at this time the Provin-- cial Securities had sold to the Province £12,400 4 1.2% per cent. at par and par of exchange. '"You were offering at that time these stocks at 91.147?" '"Yes, sir.'" stocks at 91.14?" '"Yes, sir." "And you would have been glad to sell to the Province at that price?" u'ves' Slr." t] | Before Whole Cabinet. Mr. Fisher said it was quite °Vi-- dent the whole business looked sus-- picious, 'The committee ought to have a statement from the Govern-- ment that it had done everything it could to trace these payments. Mr. Price said he thought they had made every effort. Mr. Ciarkson had been instructed to look into the whole thing thoroughly, and since then the Provincial Police had been nut on to find out all possible. Mr. Mr. MacBride asked who con-- stituted the Treasury Board. Mr. Price said that, usually it was com-- posed of the Prime Minister, the At-- torney--General and the Treasurer. All these bond issues, however, ap-- peared to have come before the whole Cabinet. _ "I think Mr. Cuddy has been on it," replied Mr. Price. + LoOks Suspicious. $ "Advertise if anyone has seen any thousand dollar bilis,"" suggested Mr. Fisher. /1 "That doesn't cost much, anyway, said Mr. Finlayson. x yaie os," "Has Inspeéto';'w Cuddy, | for | in-- stance, made efforts to trace these big bills?" asked Mr. Fisher. Government that it had done every-- thing it could to trace these PaY: ments. Chairman Finlayson replied that Mr. Clarkson had been instruct-- ed to find out all he could, and the Provincial police also had been put on to the matter. 1 per cent. commission was said to have beon paid, as Mr. Calvert had Informed him that his recollection was that the commissions covered some two or three months, but he did not know what three months. Other documents produced by Mr. Nash relative to the purchase and sale of Ontario Treasury bills and bonds by the Home Bank did not contain anything he thought should be brought to the attention of the committee, he said. Tracing the Large Legals. Mr. Fisher asked if he had made any effort to trace the large bills given out by the bank. '"Only by the examination of the bank rec-- ords," said witness. Nobody had volunteered any information respec{-- ing them to him, he said. Sam Clarke also pressed this question, and want-- ed to know what information could be obtained about the cheque pay-- able to the Central Canada Lo&an Company. Mr. Nash was instructed to obtain information as to this for to ODLaIilnl iniviidii2 do i2 iiiiG IVL today. § Mr. Fisher said the committee ought $ to have a statement from the