Introduction: libel in Calgary during the First World War
Between 1916 and 1918, D. Algar Bailey, an English transplant and editor, was prosecuted three times for libel over snide remarks in his small, long-forgotten Calgary newspaper, Fairplay. The least conspicuously political prosecution was brought through the attorney general’s office on the complaint of a chiropodist, who objected to being characterized as a medical charlatan.Footnote 1 The other two cases—the subject of this article—arose out of wartime tensions. Although much scholarship on the restrictions on expression during war focuses on censorship by the state, in these, the Crown stood aside and let the complainants pursue the cases as private prosecutions.
The first prosecution of Algar Bailey ended quietly in an apology. Its backdrop was the threat of violence against people with German and Austrian affiliations, whom he alleged were employed by the complainant lumber company. The second private prosecution emerged from the persistent wartime rumours of political corruption and the misspending of munitions money, to which Algar Bailey linked two Calgary lawyers: Richard Bedford Bennett, who had decided not to run for reelection as Calgary’s Member of Parliament, and Bennett’s colleague William H. McLaws. Bennett prosecuted; McLaws did not. Courtroom testimony unexpectedly exposed a kickback scheme regarding munitions money in Medicine Hat. Although legal cases are often treated as the inevitable outcomes of particular configurations of facts, these cases underline the strategic, personal side of decisions about prosecution made by both the aggrieved Crown in the period, along with the role of wartime tensions over ethnicity and munitions money and the possibilities offered by incorporation in the early days of energy development on the prairies.
Libel and wartime expression
This study places libel cases in their economic and political context as Alberta was being transformed by the promise of energy. It contributes to the literature on the uses of criminal libel and press censorship during World War I, most of which addresses the Canadian state’s efforts to muzzle criticism. Jonathan Swainger describes an efflorescence of prosecutions over seditious utterances in Alberta in 1916, mostly targeting inconsequential opposition to the Allied war effort made by people with Eastern European roots. These prosecutions were especially common west of Ontario, particularly in Edmonton, Calgary and the Red Deer district. Ultimately, R. v Trainor, in November 1916, discouraged Albertans from using the criminal law to suppress such trivial speech: in the interests of freedom of expression, they were to tolerate even speech they deplored.Footnote 2 Subsequently, prosecutions declined dramatically. Swainger postulates that such judicial approaches may have inspired decision-makers in Ottawa to adopt new techniques of repression.Footnote 3
In exploring individual legal decision-making, this study expands on the literature about Canada’s eleventh prime minister, R. B. Bennett.Footnote 4 It also contributes to scholarship on the effects of World War I on the Prairies, whose existing themes include ethnic tensions and uneven support for the war in a diverse population, labour relations, the impact of railway freight rates and ill-planned railway extensions and limited wartime spending on manufacturing alongside heavy demand for soldiers.Footnote 5 In Douglas McCalla’s assessment, prairie munitions manufacturing overall inspired mainly temporary alterations to trends already in place, but the account told here underlines the importance that a small community could attach to a promising industry.Footnote 6 This work also connects munitions manufacturing to Alberta’s early energy industry, which Paul Chastko has recently explored.Footnote 7
Calgary and the Great War
The newspapers that Calgarians read during the war contained a steady drumbeat of deception and scandal, with varying levels of reassurance that everything was being managed appropriately, often with a hint that asking questions was disloyal. Scandals over bribery and graft broke out over the building of the legislature in Manitoba and roads in Saskatchewan. There were rumours of political advantages being exchanged for exemptions from liquor-related prosecutions in Saskatchewan and Alberta. The war effort entailed vast spending, but federal public inquiries held to investigate sales of horses, munitions, weapons and other things multiplied, often ending too mildly for comfort. French Canadians were tarred with disloyalty to Canada when they resisted fighting for the British Empire. Public conversations about expanding the franchise to women and arranging voting for soldiers overseas were laced with suspicion about methods and purposes.Footnote 8 Canada was at war with the places of origin of many of the Eastern European immigrants whom Laurier’s Liberals had welcomed to the prairies, and clouds of suspicion followed them. Thousands were interned in camps, and many thousands more were subjected to compulsory monitoring.Footnote 9 Over all hung the headlines’ predictions that the kaiser was nearly vanquished, while the photographs of the dead multiplied and the lists of casualties grew.
The uncertain economy was complicated by the lure of fortunes to be made in energy, as natural gas was developed, oil was struck and land speculation thrived. Energy was promoted by “failures, miscreants, and charlatans,” in Chastko’s words, along with individuals with actual expertise, including some discussed here.Footnote 10 Calgary had enjoyed a boom until about 1912, but, by 1914, against the backdrop of recession, crops failed, wheat prices fell, construction tailed off and railways laid off staff. Wheat prices had risen by 1916, but the hands to farm it were getting scarce, tariffs and freight rates were problematic and debts mounted. Crowsnest Pass coal miners struck in late 1916. Inflation increased the cost of living and labour relations were tense. Westerners envied the intense wartime industrial production in central and eastern Canada.Footnote 11
Riverside Lumber
The defendant in these libel cases was born Douglas Coningsby Algar Bailey in England in 1881 or 1882. In 1909, he moved to Canada from South Africa, where he had participated in the war. An inveterate, self-righteous improver, he published his biweekly Fairplay from 1915 to 1921, first in Calgary and then in Vancouver.Footnote 12 Calgarians often called him “Mr. Bailey,” but he referred to himself as D. Algar Bailey or Algar-Bailey, a double-barrelled surname with or without a hyphen.
His first libel case, in 1916, has commonalities with other Alberta wartime prosecutions over expression that reflected intergroup tensions aggravated by the war. In 1915, a Roman Catholic layman initiated but dropped a prosecution against a Presbyterian minister who was using his pulpit to blame the war on the Roman Catholic Church, which he said was backing the kaiser.Footnote 13 More common were prosecutions over utterances by people with roots in Eastern Europe, which proliferated in Alberta and Saskatchewan up to late 1916 and then fell off considerably, as Swainger has described. This “seditious” expression usually amounted to hot-headed remarks to a few people, in shops, bars and the like, that revealed sympathy with Germany or opposition to Canada’s war effort. Judges eventually signalled that Albertans should refrain from prosecuting their neighbours over inconsequential antiwar expression, although prosocialist expression was another matter.Footnote 14
A person could commit the crime of seditious libel by inciting people to disturb the peace, by “rais[ing] discontent or disaffection” in the populace or by “promot[ing] feelings of ill-will and hostility” between different groups of people.Footnote 15 Under the headline “More German Labor” in the 16 March 1916 issue of Fairplay, Algar Bailey observed:
We understand that the Riverside Lumber Company are employing at their Medicine Hat yard a manager who is an Austrian and who has two brothers serving with the Austrian Army. One of them was recently mentioned in despatches for conspicuous services, which presumably means the Iron Cross. It is, of course, a well known fact that this company has a very large number of Germans and Austrians working for them in their British Columbia yards. The rotten part about the whole thing is that the Government are giving them a lot of orders—in other words they are on the patronage list and were placed there by that gallant Hon. Colonel R. B. Bennett, K.C., M.P.Footnote 16
The Riverside Lumber Company was a large but financially troubled operation owned by Henry Noah Sereth and Alexander Sereth, Jewish brothers from Austrian Poland, who undoubtedly did employ workers with German and Austrian origins. With the outbreak of war, the many Eastern European immigrants who had arrived on the prairies in the previous three decades found themselves viewed as enemy aliens. With his remarks, Algar Bailey was trafficking in tensions that had exploded in Calgary only a month earlier, when soldiers destroyed two restaurants downtown and the Riverside Hotel, a “first-class” rooming house near the lumber company’s Calgary premises, across the river from downtown in a working-class, immigrant neighbourhood. As they also did in Edmonton, the soldiers rioted over rumours that veterans were being fired in favour of German-Canadians.Footnote 17
Despite the risk that his allegations would incite violence, the Crown did not prosecute Algar Bailey for seditious libel. Instead, Riverside Lumber brought a private prosecution under section 334 of the Criminal Code for a libel defamatory of Riverside and its Medicine Hat manager, Thomas Thompson. Under this section, knowledge of falsity was irrelevant. Algar Bailey probably confused the manager with someone else: it turned out that Riverside’s current manager in Medicine Hat spoke with a Scottish brogue and had three brothers in British regiments. (At the preliminary hearing, the magistrate rejected the defence’s attempt to identify Thompson’s predecessor.) However, the lawyers made a deal and the prosecution was dropped, with the consent of the Crown lawyer James P. Short, who evidently kept an eye on private prosecutions. Both sides claimed victory.Footnote 18
The Crown’s decision to merely watch cannot be attributed to Riverside Lumber’s superior legal speed or to Short’s having a distaste for seditious libel. Algar Bailey’s July 1916 prosecution—for alleging that a chiropodist was not a real doctor and that his foot products were a sham—was brought by the Crown with similar speed.Footnote 19 Also, three days after Algar Bailey’s arraignment, Short represented the Crown when the Supreme Court Appellate Division, sitting in Calgary, upheld the conviction of a former German army officer, George Cohen. At his secondhand furniture shop in Riverside, Cohen had told another man that “Canadian troops were slaves to King George” and that their remains would make good fertilizer. The court held that the jury might have been concerned that such comments could stir up ill will against people of “peaceable subjects of German origin” and create “dissension and even riots in such times as these.”Footnote 20 The Crown was evidently more willing to prosecute men with Eastern European roots over anti-Allied sentiment than was Algar Bailey, an Englishman whose allegations posed a real threat to the property and safety of Jewish business owners who undoubtedly did employ Eastern European immigrants. It probably also seemed wiser, both to Short and to R. B. Bennett, to let pass the insinuations about Bennett and patronage.
R. B. Bennett, W. H. McLaws and munitions in Medicine Hat
The prosecution brought by R. B. Bennett arose through William H. McLaws’s evolving participation in munitions manufacturing in Medicine Hat, alongside other ventures and the political sensitivities around the 1917 election. Key here was the “Shell Committee”—a body of Canadian businessmen and military authorities assembled shortly after the war began by the minister of militia, Sam Hughes. The Shell Committee acted as the general contractor for Canadian manufacturers and as the agent for the British government in distributing contracts, thus pumping money into Canadian businesses.
Mills, foundries, ceramics manufacturers and other enterprises were drawn to Medicine Hat by the city’s location on the Canadian Pacific Railway (CPR) and South Saskatchewan River and its cheap natural gas.Footnote 21 In the spring of 1915, John Davies of Medicine Hat’s Alberta Foundry and Machine Company (“Alberta Foundry”) went to Ottawa on behalf of the Medicine Hat shops to seek shell contracts, as did other manufacturers from elsewhere in Canada. Davies met with Bennett, Sam Hughes and the Shell Committee’s ordnance adviser, David Carnegie.Footnote 22 In April, the British War Office contracted to buy from the Shell Committee 1,667,000 complete rounds of high-explosive 18-pounder shells—part of a larger order that also entailed the production of 5,000,000 fuses. As he travelled around western Canada in the spring of 1915 examining manufacturing facilities, sometimes with Bennett, Carnegie placed orders for (empty) high-explosive shells.Footnote 23 He gave one contract to Davies’s Alberta Foundry, on the understanding that it would enter into subcontracts with two nearby enterprises: the Medicine Hat Pump and Brass Company (“the Pump & Brass”) and the International Supply Company (“IS”), a tool-making and drilling company founded in 1912, of which Walter R. (“Frosty”) Martin was president. IS had recently gone unpaid in other dealings, but William H. McLaws had come aboard by mid-1914 and the company had found gas at Viking, near Edmonton, the previous November.Footnote 24 A fourth company, the Dominion Harvester Company (“Dominion Harvester”), also received work.Footnote 25 Shell-making was new for all of them, and Alberta Foundry apparently profited by about $1.50 per shell.Footnote 26
In June 1915, the Canadian Western Foundry & Supply Company (“CWFS”) was incorporated. It brought together IS; the Western Foundry and Metal Company of Calgary, of which McLaws was vice president; and Calgary’s Canadian Equipment and Supply Company, which was likely nearly defunct but had useful assets. McLaws became a director and member of the executive committee of CWFS, with Martin another director and George A. McKenzie (the sales manager of the Western Foundry & Metal Company) the manager. Shells, which IS was already making, would be a principal endeavour of the new company. It would also handle machining for railways, oil and gas enterprises and other businesses.Footnote 27
By September 1915, however, the British were concerned about the Shell Committee, believing that its exaggerations of Canadian capacity had led to huge delays and that it was sprinkling small contracts around for political reasons rather than maximizing output by using big, capable operations. On 29 November 1915, it was replaced by the Imperial Munitions Board (“IMB”), an arm of the British government, chaired by Canadian businessman Joseph W. Flavelle.
Early in 1916, with an election due and munitions manufacturing a ready target, Liberals in the House of Commons went on the attack. A scandal culminating in a federal royal commission unfolded over profiteering on the fuse contracts the Shell Committee had given out the previous summer to a group led by an American friend of Hughes.Footnote 28 Liberals also criticized the Shell Committee’s arrangements for shells. However, its records evidently confused the parliamentarians. Liberal Frank Bradstreet Carvell accused Dominion Harvester, IS and the Pump & Brass of having made no deliveries. Solicitor General Arthur Meighen insisted that the criticism was misplaced, as they had received their first contracts less than two months earlier, even though Bennett had already told the House about his travels with Carnegie the previous spring and how the orders had been placed.Footnote 29 The explanation may be that the records disclosed some deliveries by Alberta Foundry, as the general contractor, but that IS and the Pump & Brass had not received contracts in their own names until 12 January. Flavelle in fact issued these without permission in order to stave off labour unrest in the West.Footnote 30 The four Medicine Hat outfits each got orders for 10,000 shells at substantially lower prices per shell, which was financially challenging for them. These new contracts named IS, in which McLaws’s CWFS apparently held shares.Footnote 31
McLaws and his colleagues continued their corporate reorganizations in the Medicine Hat area. In November 1916, a transaction took place to which Algar Bailey later referred in his pleadings. It involved CWFS, Dominion Harvester and two new companies: Canadian Foundry and Machine (“CFM”) and Foundry Products Ltd.Footnote 32 Equipment salvaged from an April 1916 fire at the Dominion Harvester plant was moved to a former “motor truck factory” in Redcliff, outside Medicine Hat, with the plant and equipment now owned by CFM. Dominion Harvester’s manager, Fred Ratliff, moved to Redcliff to take charge. The plant got to work on an order for shells worth about $100,000, which must have been assumed through these transactions.Footnote 33
The sneering insinuation in Fairplay that inspired Bennett to prosecute took place during the lead-up to the December 1917 federal election, as rumours of corruption flourished. Newly minted Unionist Cabinet ministers were said to be spending lavishly on redecorating.Footnote 34 The Laurier Liberals, who refused to join Borden’s Conservatives, published a forty-two-page pamphlet about wartime misspending.Footnote 35 Debates over the introduction of a wartime income tax reflected suspicions over the distribution of the benefits and burdens of war—rhetoric encompassed by calls for the “conscription of wealth.”Footnote 36
On 6 November, the Calgary News-Telegram (hereafter News-Telegram) published an interview with Fred S. Ratliff of CFM.Footnote 37 Eleven days later, Fairplay commented:
The Manager of the Canadian Foundry and Machine Co. of Medicine Hat has made a statement that his company has manufactured about 75,000 shells for which the Government paid the sum of $5.00 a piece. He further states that of this $5.00 some “Mysterious Middle Man” received approximately $1.50. In course of conversation he said: “Of course I cannot put my finger on any one spot, and say ‘there went the money’ but I am convinced that there was what is called a big rake-off on graft or at least profiteering on this shell business.” Possibly R.B. Bennett and W.H. McLaws could, if they wished, put their fingers on the spot and find that it was located in Calgary, and that not a very great distance from their office. Perhaps some [sic] of these days there will be some conscience money paid out, although as a matter of fact we have very little hope in that direction.
Ratliff misunderstood the situation or the News-Telegram misunderstood him: Alberta Foundry, not CFM, was the general contractor that had profited by about $1.50 per shell, and there was no “mysterious middleman.”Footnote 38 Algar Bailey repeated the misunderstanding and the allegation of a “big rake-off on graft or at least profiteering on this shell business.” He ignored Ratliff’s complaint that the price per shell had since dropped to $1.50 and left the small western plants struggling. He added the hints about Bennett and McLaws being somehow involved. Bennett prosecuted; McLaws did not respond. CFM was his enterprise, but it was not a “middleman” and there is no evidence of graft.
The proceedings and Algar Bailey
A week after the article appeared, Bennett swore out an information and complaint against Algar Bailey for uttering defamatory libel, knowing it to be false.Footnote 39 Bennett’s colleague Alexander Macleod Sinclair conducted the prosecution. At around the same time, Sinclair was also attempting to use defamation as a component of an argument for limiting the scope of public inquiries.Footnote 40 Algar Bailey characterized his experience as persecution over his attempt to reveal wrongdoing. His self-righteous, sometimes devious machinations drew procedural manoeuvres against himself by those he was urging to investigate the shell business.
He was arrested just before noon on a Saturday but waited in jail until the Monday for his bail hearing owing to possibly suspicious delays by the magistrate and others.Footnote 41 He retained a Calgary lawyer, John J. Macdonald, and a flamboyant, conspiracy-sniffing Liberal politician and lawyer from Edmonton, Joseph A. Clarke.Footnote 42 Over the next two months, Algar Bailey lobbied Deputy Attorney General Arthur Browning and Attorney General Charles W. Cross, a leading Laurier Liberal, to quash the action, asserting that it was retaliation for his past criticisms of Bennett, the magistrate and Crown lawyer James Short (likely Unionist-Liberal).Footnote 43 On 1 December, Algar Bailey baselessly told Cross that one of the “McLaws Companies,” CFM, was conducting the supposed rake-off and he tried unsuccessfully to piggyback his allegations onto a defunct investigation into resource stock trading.Footnote 44 The recognizance required after the preliminary hearing on 4 December was $2,000, four times that of his two earlier prosecutions.Footnote 45 Nothing came of Browning’s promise to investigate the bail proceedings and he evaded Algar Bailey’s efforts to meet with him.
Munitions manufacturing in Medicine Hat
Algar Bailey and his lawyers saw the trial as an opportunity to expose a scandal, which it did prove to be, but not the one they expected. In January 1918, Algar Bailey was arraigned before Justice William Walsh, who had also conducted the arraignment in the Riverside Lumber case. Bennett and Sinclair were joined by Alfred H. Clarke, who sometimes prosecuted criminal cases and had recently successfully defended the Calgary Herald in a libel suit at the Supreme Court of Canada.Footnote 46 James Short also attended, representing the Crown.
Recall Algar Bailey’s allegation: that Ratliff had said CFM had made 75,000 shells for which the government paid $5.00 apiece, that about $1.50 went to a “mysterious middleman,” that Ratliff suspected a rake-off, that Bennett and McLaws might be able to find the money near their offices and that eventually there might be “conscience money paid out” but “we” had very little hope of that. Section 324 of the Criminal Code provided: “No one commits an offence by publishing any defamatory matter which he, on reasonable grounds, believes to be true, and which is relevant to any subject of public interest, the public discussion of which is for the public benefit.” Section 331 made truth a defence if “the publishing of the defamatory matter in the manner in which it was published was for the public benefit at the time when it was published.” Neither the pleadings nor the news coverage make clear which section the defence relied on but, as there was no testimony from Algar Bailey or anyone else about his belief or the grounds for it, section 331 must have been the relevant provision.
At the arraignment, the defence said that Algar Bailey had offered to apologize and explain: his lawyers said that he had not meant to imply that Bennett had been engaged in fraudulent activities, but only that he could and should have investigated. Walsh was pleased and suggested the prosecution could stop, but A. H. Clarke instead offered a suspended sentence in exchange for a guilty plea, which Walsh, expressing his sympathy for Bennett, recommended that Algar Bailey accept. The defence, however, was intent on proving that Algar Bailey’s allegations were true. It took Macdonald three tries to submit a valid truth plea. Rejecting the second effort, Walsh gave Macdonald one more chance, warning him that pleading truth but failing to prove it would likely result in more than a suspended sentence. Finally, Macdonald entered an acceptable plea, asserting that the publication was for the public benefit and that it was true: given the public roles Bennett had filled, the firm’s involvement and the public interest in munitions misspending, he had both the responsibility and the opportunity to investigate. The article, the defence lawyers said, was not defamatory. They denied that it contained an innuendo that Bennett might have taken a cut. They pleaded that, on around 18 November 1916, a company called Foundry Products Ltd acquired all the assets of Dominion Harvester and then sold them to CFM, with Lougheed, Bennett and McLaws acting for Foundry Products and CFM then and since. McLaws had been, and still was, president of Foundry Products and another firm lawyer had been president of CFM. Adding that Dominion Harvester currently owned 450 of the 1,000 shares of CFM’s authorized capital, the pleadings went on to describe Bennett’s position and access to information. Walsh set the trial for March to give Macdonald more time to obtain evidence from the IMB and the members of the former Shell Committee and to peruse CFM’s annual statutory return, which was late in being filed.Footnote 47
Algar Bailey’s lawyers must at some point have realized that they had misunderstood the facts, that Algar Bailey’s target, CFM, was not a “middleman” and may even have lost money through the arrangement, though Ratliff thought otherwise. Just before the trial started, Macdonald tried to amend the truth plea to deny that the impugned words contained an innuendo that Bennett’s firm had profited from an illicit arrangement. The lawyers were soldiering on, outmatched but determined to show that Bennett had failed to investigate as he should have. Algar Bailey may have published some sort of apology in Fairplay. However, A. H. Clarke refused to drop the case. He wanted a guilty plea and a suspended sentence, given Algar Bailey’s sustained campaign against Bennett and refusal to back off earlier.Footnote 48
The trial began on 26 March, before Justice William Simmons.Footnote 49 The witnesses for the defence included Ratliff, Martin of IS, Davies of Alberta Foundry and George Elliott of the Pump & Brass, who testified about their contracts. Bennett, McLaws and Algar Bailey all avoided the stand. On the question of Bennett’s knowledge, the jury learned that, probably in late 1915, Elliott went to Ottawa to complain about the profit that Alberta Foundry was making on the general contract. Davies visited Bennett in February 1916 to complain about losing profits under the renewal orders. Bennett was unsympathetic and referred Davies to McLaws. As will appear, Bennett knew more than emerged at trial about McLaws’s business in Medicine Hat and had actually intervened to protect it.
The newspapers focused on various parts of the case. The Calgary Albertan described Joseph Clarke’s ninety-minute closing address as “eloquent and telling,” but the other newspapers mostly ignored it. He emphasized that neither Bennett nor McLaws responded publicly to the allegation of a rake-off and pointed out that, despite Davies’s visit, Bennett had maintained that he knew nothing of these dealings before the Fairplay publication. Clarke criticized Algar Bailey’s detention in jail while he waited for bail. Mostly, though, Clarke seems to have tried to persuade the jury that Algar Bailey was part of the historic struggle of the press to bring the truth to light in the public interest. He emphasized the importance of giving latitude to journalists and in particular to those who published small, weekly papers, who lacked the opportunity that dailies had to correct their errors the next day, although in fact Algar Bailey had pressed his allegations throughout. Clarke argued that freedom of the press was the bulwark of civil liberty, that more latitude was granted to the criticism of men in public life. He tried to persuade the jury that Bennett should have inquired earlier into possible profiteering in Medicine Hat and that documents in Bennett’s own office would have revealed the details. He denied that the article implied that Bennett or the firm was participating in excessive profit-taking. Clarke insisted, with justice, that, given Bennett’s position and McLaws’s engagements, Bennett was the only person in Alberta to turn to about the comments that Ratliff was reported to have made in the News-Telegram.
Clarke grasped a thin legal straw, which failed him: Justice Anglin’s dissenting judgment of the previous June in a Supreme Court of Canada fair-comment suit brought by Edmonton city councillor Rice Sheppard against the Edmonton Bulletin, over allegations that he conspired with other councillors to advance private interests and to introduce “corrupt and unlawful practices.” The majority allowed the Bulletin’s appeal, but the judges varied in their reasoning. Clarke noted Justice Anglin’s acknowledgement that a publicist who attacked corruption would have a court’s protection against an unjustifiable action for libel being brought by the person criticized. However, A. H. Clarke, for Bennett, presented the court with the rest of Anglin’s reasoning, that the fair-comment defence would not allow critics to make baseless and libellous allegations, or good men would avoid public life, and a sense would emerge that public life had a looser moral system than did private life.Footnote 50 The reason why Joseph Clarke did not present a pro-press statement from one of the majority judgments in the Bulletin’s favour is that no judge made one.
In charging the jury, Simmons “drew attention to the common law of England” and said that an essential consideration was an alleged libel’s tendency to provoke a breach of the peace—no real risk here. He quoted parts of the Criminal Code that protected “those who drew attention to matters of public interest and made fair comment on them.” The jury was to decide “if the article complained of was fair comment or whether it abused it.”Footnote 51 Simmons does not seem to have invited the jury to consider whether Algar Bailey had merely impugned Bennett’s failure to investigate, rather than insinuating that he and his legal colleagues were profiting improperly. According to the Herald, Simmons said “that if the jury found that the words in their natural meaning imputed dishonesty to Mr Bennett or complicity in the dishonesty of others” the truth plea would fail and the jury would have to convict.Footnote 52
The verdict was guilty with a recommendation of mercy because of the time Algar Bailey had already spent in jail. Simmons rejected Macdonald’s suggestion that he might ask that certain legal determinations be set out for an appeal, because Macdonald had not objected to the charge at the time. Sentencing came next. The prosecution demonstrated that Algar Bailey’s campaign against Bennett had not stopped even after the charge had been laid. The “strange coincidences,” as the Albertan put it, around Algar Bailey’s two days in jail were discussed, but Simmons was more moved by the impropriety of commenting on a matter before a court. However, observing that Algar Bailey was young and hopefully able to learn a lesson, and doubting the comments had received much attention, Simmons nudged Bennett toward taking the moral vindication and letting the matter go. Invited to comment, Bennett disclaimed any vindictive feelings, explaining that he had been attacked for the past year, called “every name a man could be called” and been charged with flagrant dishonesty. He read the court an attack on one of the firm’s junior lawyers. As a suspended sentence was satisfactory, that was what Algar Bailey received—otherwise the punishment would have been more severe. Calgarians could take note of Bennett’s magnanimity.
Smoke and fire
There was no evidence that Bennett knew about it, but the testimony revealed that three Conservatives in Medicine Hat had indeed attempted a rake-off in around December 1915, after Flavelle and the IMB took over, when the manufacturers were desperate for renewal orders. This “patronage committee” approached Ratliff, Davies, Martin and Elliott, offering to use their political influence to obtain contracts. In exchange, the manufacturers would provide kickbacks to them and, in particular, to the failing Conservative Medicine Hat Times newspaper. All thought the demand was far too large. Martin had been prepared to give a small amount but Davies and Elliott declined entirely.
One of the three was A. H. Brown, mayor in 1914–15 and again during the trial. He responded by denying everything, calling the manufacturers liars and describing his own efforts to get new shell contracts. The rival Medicine Hat News reported that it had learned of the scheme earlier but decided to keep quiet when the patronage committee, perceiving the danger of publicity, rescinded its threat and expressed willingness to guarantee the shell order without the rake-off. The manufacturers also preferred silence so that the orders could be placed without the risk of scandal. Most of the newspapers moved on quickly, but the Alberta Non-Partisan, while acknowledging the lack of evidence that Bennett knew about the scheme, nonetheless disgustedly surmised that “discretion is often the better part of valor” and editors could face prosecution if they printed the inferences they could draw from the facts they knew. The newspaper concurred with Algar Bailey that Bennett showed little interest in investigating or denouncing profiteering.Footnote 53
Bennett and McLaws
We come at last to the decisions made by Bennett to prosecute and by McLaws not to, which reflect their diverging careers and increasing friction in their relationship, matters kept out of view in the legal proceedings. In particular, in early 1916, after the Medicine Hat manufacturers obtained renewal orders, IS’s treatment of its workers drew Bennett into a dispute with Flavelle and the IMB, which probably added to Bennett’s dissatisfaction in the autumn of 1917 and existing tensions with McLaws. Historians have written about Bennett’s temperament and beliefs: tough, astute, loyal to his clients, Tory, pro-Empire, volatile, confrontational, pompous and autocratic. He became rich through his work for clients that included major banks and especially the CPR, unpopular in the West for its virtual hegemony and callous attitude to accidents and the impact of its rates.Footnote 54
Bennett had served in the Alberta legislature from 1909 to 1911, when he became Calgary’s Member of Parliament, joining his senior partner James Lougheed in Ottawa. He did not fully get along with other Conservatives, however, and was frequently at odds with Arthur Meighen.Footnote 55 In February 1915, while the Conservatives and Liberals were picking their candidates in anticipation of a federal election, it was rumoured that he might not stand for reelection in Calgary owing to “internal friction.”Footnote 56 It was Lougheed who was the longtime Conservative leader in the Senate and a minister without portfolio in Borden’s government. Late in 1915, Bennett lobbied unsuccessfully to have the Calgary Power Company (which he and his friend Max Aitken had put together and of which Bennett was president) given work by the Shell Committee, work that would be shared with the CPR’s Ogden Shops.Footnote 57
Despite rumours in January 1916 that Borden might establish a Ministry of Munitions headed by Bennett, no appointment was forthcoming.Footnote 58 In October 1916, while McLaws was reorganizing companies, Bennett became director general of the National Service Board, having previously fulfilled that role provincially.Footnote 59 He led the orchestration of the registration system that preceded conscription.Footnote 60 He hated Arthur Sifton, formerly a judge and Alberta’s Liberal premier until the summer of 1917, about whom allegations of corruption swirled; but Borden drew Sifton into his Unionist government, while excluding Bennett. Aitken thought this was the real reason Bennett sat out the election.Footnote 61 He hoped for a Senate seat but was passed over in February 1918, which led to a fulsome breakup letter to Borden about three weeks after this trial.Footnote 62 Pestered about possible profiteering in the face of such efforts and disappointments, Bennett’s decision to prosecute is understandable.
By the autumn of 1917, McLaws, for his part, knew a lot about the profits on munitions manufacturing in Medicine Hat, but he was busy with other endeavours and probably preferred not to share the spotlight with Bennett. He had articled with the firm and been called to the bar in 1907.Footnote 63 After 1911, he and another lawyer took over the firm’s management.Footnote 64 Between 1912 and 1914, he, Lougheed and Bennett were involved as investors and counsel in companies that found, first, natural gas and then oil, and launched the scramble to supply energy to Alberta’s rapidly growing municipalities. However, at around the same time, McLaws was moving more deeply into separate energy ventures and his “Canadian Western” companies were proliferating.Footnote 65 By the time McLaws and mining engineer Eugene Coste were lobbying to supply Edmonton with gas from Viking in late 1915, the Edmonton Bulletin was warning of McLaws’s track record of obfuscating corporate name changes, extensions and delays.Footnote 66
As McLaws assembled munitions manufacturing capacity in Redcliff during the summer and autumn of 1916, he, George McKenzie and their associates took over a steel-making facility and a long-established local gas franchise.Footnote 67 He was undoubtedly behind a summer 1915 proposal to the Shell Committee to construct a smelter in Medicine Hat to supply zinc for munitions. The CPR-owned Consolidated Mining & Smelting Company of Trail, BC beat him to it, despite the Shell Committee’s lobbying of the British Ministry of Munitions, which began while Lougheed was acting as minister of militia.Footnote 68 What unfolded next must have added to the existing stresses of their intertwined but sometimes competing interests.
Labour troubles arose at the four Medicine Hat factories in early 1916, as the fuse scandal began to unfold and federal Liberals probed misdeeds and incomplete Western contracts. Bennett was drawn into a struggle between McLaws’s Medicine Hat concerns and the IMB. The orders issued on 12 January followed intense lobbying by Western manufacturers.Footnote 69 As Flavelle explained, these contracts were issued to keep Western “workpeople” employed and not because the IMB particularly needed the shells that these small, delayed enterprises purported to be producing. Although, under these orders, the Medicine Hat manufacturers would still be paid twenty-five cents more per shell than eastern manufacturers, their revenue would decline.Footnote 70
Rather than starting on the new orders, the unionized Pump & Brass and McLaws’s nonunionized CWFS, operating through IS, shut down their plants in early February. They proposed to cut their employees’ wages and CWFS/IS discharged its workers, refusing to rehire them until they agreed to rates even lower than they had already been earning. Alberta Foundry contemplated changing its pay scale. Flavelle warned CWFS/IS and the Pump & Brass that their contracts were in jeopardy. A great deal of correspondence ensued, with the Department of Labour investigating. Flavelle turned to Davies for help, and he mediated a resolution that worked for Alberta Foundry and the Pump & Brass. Martin for CWFS/IS, however, held out, at first floating blandishments that matters had been settled, blaming the IMB for sending materials late and suggesting that the dismissed employees were incompetent. When the IMB did cancel the order on 3 March, he warned the IMB that it and the Department of Labour were being used by organized labour. He proposed that the IMB should provide compensation for work supposedly already done under the new contract and extra equipment supposedly purchased.Footnote 71
Bennett stepped in. He probably consulted McLaws, because he told Flavelle that he had asked CWFS/IS to “dispense with the services of Mr. Martin” so that the order could be reinstated. He followed up by explaining that the IS plant had been “taken over by the Western Foundry and Supply Company and a new Manager appointed.” Martin, he said, had nothing more to do with the plant. Mayor Hawthorne likewise assured Flavelle that Martin and the others responsible for the labour trouble had been “discharged” and replaced by George McKenzie. Hawthorne and CWFS assured Flavelle that Alberta Foundry’s wage scale would be adopted, with CWFS boldly claiming it had “nothing to do with prior business here.”Footnote 72 Martin probably just moved to Viking for a while. Flavelle saw through the reshuffling and suggested to Bennett that the company should communicate with him directly.Footnote 73 On 23 March, after a Department of Labour representative had reported that terms comparable to those at the Pump & Brass had been set by all the Medicine Hat manufacturers, the contract was reinstated.Footnote 74
Flavelle was left thinking well of Davies but likely less well of Bennett’s taste in associates.Footnote 75 A year later, Bennett complained to Flavelle that unnamed “friends” who had taken over the Redcliff Rolling Mills the previous year (McLaws et al) were supplying steel made from turnings scrap to Australia, New Zealand and Japan but could not get a Canadian steel contract. Flavelle responded that it was uneconomical to ship them east.Footnote 76
By the autumn of 1917, then, Bennett had advocated to Flavelle for McLaws’s businesses at least twice. He was sloppy, misstating company names and representing that Martin was gone when evidently he had simply relocated temporarily, a fact fully on display at the trial. Bennett did not name McLaws in written correspondence or describe their relationship, although he may have done so orally. Whether or not McLaws had deliberately deceived him, Bennett had likely lost some credibility with Flavelle. Bennett would not, however, have wanted to reveal it to the jury, as failing to investigate was a key part of Algar Bailey’s allegation. It is no wonder that neither lawyer testified.Footnote 77
Conclusion
Lawsuits are often interpreted teleologically, as a somehow natural or inevitable outgrowth of frictions and bad behaviour, but they are not. Relationships, personalities, resources, other goals, knowledge of the real facts and rules of law and procedure all factor into what people decide to do. Given these personalities and their complex entanglements, when Algar Bailey attacked Bennett yet again, this time over McLaws’s business doings, it is unsurprising both that Bennett fired back and that McLaws did not. He would not have wanted to jeopardize relations further with Lougheed and Bennett, and he did know a lot about munitions spending in Medicine Hat. His other ventures would not have benefitted from a public airing of these dealings. After this episode, he focused on his business concerns, moved to British Columbia and did not return until after the firm broke up, at which point he reconnected with Lougheed and Sinclair, while Bennett and other former firm lawyers formed a rival endeavour.Footnote 78
Bennett’s prosecution of Algar Bailey was private, conducted by his own lawyers, as was the Sereth brothers’ action over allegations that Riverside Lumber hired Eastern European labour. The Crown prosecuted over an allegation that a Calgary podiatrist was not a real doctor and over indiscreet remarks about the war made by a person of German origin. Four cases do not constitute a pattern, but it is interesting that the Liberal Crown lawyers mainly watched when prosecuting would have meant siding with Eastern European Jewish businessmen against an English newsman and when Calgary’s most prominent Conservative brought a libel prosecution. Bennett and Attorney General Cross had squared off before.Footnote 79 The Crown’s prosecutorial decisions may well have been inflected by political considerations and loyalties, and quite possibly also by a willingness to let others pay the legal bills.
Rumours of corruption and scandal hung in the air, alongside human tragedy, while fortunes beckoned in energy and industrialization. After three libel prosecutions, Algar Bailey gave up on Calgary and its politics, but continued to promote himself and his visions for Canada. He moved to the United States in 1926 and spent most of the rest of his life there, supplying criticism and advice to anyone who would listen.Footnote 80 Bennett was wounded by politics, but would return to the fray. McLaws was a legal innovator, taking advantage of the corporate form and the nascent regulatory environment to partake in a wide variety of opportunities in energy and industrialization. In the realm of expression, the Great War brought not only state censorship of criticism and dissent. During this turbulent period, libel law was a fit tool for individuals’ own purposes, as it is in our own.