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PROHIBITION and the CUSTOM SCANDAL OF 1926
TEMPERAMENT TEMPERANCE TEMPER
In the 1820’s, Christian reformers began to campaign about the evil of alcohol. Most of these crusaders were middle-class, Protestant, English- Canadians.
This was one of the causes fought by the Woman’s Christian Temperance Union. Another big issue for them was women’s right to vote. The WCTU was founded in 1974 and reached national status in 1885.
Recognizing the dividing issue, the liberal government held a national referendum. Every province supported complete prohibition, except for Quebec, where 81% of the population rebuffed the proposition.
Prime Minister Sir Wilfred Laurier declared that the voter turnout was so low, that he decided against prohibition.
Campaigns then focused their efforts on provincial playing fields.
Prince Edward Island was the first to give in to downright prohibition in 1900. Every other province, except Quebec again, followed suit by 1916. In 1918, Prime Minister Sir Robert Borden brought into effect “prohibiting the manufacture and sale of alcoholic beverages” in Canada.
It is interesting to note that to this day it is strictly forbidden to sell cold beer in Prince Edward Island – it’s still on the books!
CANADIANS ARE ALL WET
After World War 1, the United States decided to stay dry. Canada, however, wishing to turn away from its history of strong temperance movements, went wet. The dominion government of 1919 parked the question of prohibition on each province’s doorstep.
Quebec and British Columbia led the way by setting up government-controlled liquor stores. The provinces prairie followed suit in 1923 and 1924, after seeing the revenue that the liquor commissions generated. Ontario joined in 1926. By the end of the decade, the only dry province was Prince Edward Island; they conceded in 1948.
Distilleries and breweries such as Hiram Walker in Windsor, Gooderham and Worts in Toronto, and Molson’s Breweries in Montreal were already old and established businesses.
The United States’ decision to keep its Eighteenth Amendment, prohibition legislation, sparked a gigantic cross-border smuggling operation that resulted in the 1926 Customs Scandal.
BY LAND AND BY WATER
By land and water, Canadian liquor was smuggled into the United States, and customs officers conspired with smugglers on either side of the border. The most famous illegal trafficking point was along the 200 kilometres between Cornwall, Ontario and Rock Island, Quebec – 60 unprotected roads led to Vermont and the New York State. Another spot later revealed was the Windsor-Detroit border, which was ruled by the prognostic of the Mafia, Black Hand. Customs officers conspired with smugglers on either side of the border.
The only law Canadian breweries and distilleries consistently broke was tax evasion, that is, not giving the federal and provincial governments their share in excise and sales tax.
By 1924 a two-way smuggling enterprise had been formed. Previously empty cars collecting Canadian alcohol began to fill with clothing, jewellery, cigarettes, radios and drugs. Since the United States’ mass production of these items was less expensive than their Canadian counterparts, they were readily accepted.
A group of clothing manufacturers formed the Commercial Protective Association in August 1924 to investigate the smuggling.
R.P. Sparks, the association’s chairman, wrote Prime Minister William Lyon Mackenzie King in February 1925 about his astonishing discovery of the extent of corruption in the department of customs.
Jacques Bureau, the minister of customs, responded to the allegations by defending those who worked for him especially R.R. Farrow, his deputy minister. And despite his established reputation as a shameless bootlegger, Bureau promoted J.A. E. Bisaillon to chief preventive officer for Montreal.
The RCMP tried to curtail the rampant smuggling, but repeatedly failed. One of Jacques Bureau’s first acts as customs minister was to withdraw the Mounties form the Quebec and British Columbia borders.
THE BARGE TREMBLAY AFFAIR
In February 1925, under cross-examination in the House, Bisaillon related an event that exemplified just how deep the corruption was set.
In November 1924, a Belgian Schooner in the St. Lawrence transferred a load of alcohol onto a barge owned and operated by a Captain Tremblay. On board with Capt. Tremblay were two of New York’s most prominent bootleggers.
After receiving a tip that Tremblay was planning to smuggle the alcohol to the United States, the Quebec Liquor Commission police arrived to meet the boat and arrest everyone on board.
When they reached the dock, however, they found that Bisaillon had taken over, representing the federal government. The thieves audaciously marched off the barge and sailed away on a yatch waiting for them.
Captain Tremblay was later arrested and charged with smuggling. He was released after paying a small fine.
Bisaillon was charged with conspiracy. He’d also confessed to depositing all the custom duties into his private bank account, which would explain why he had a balance of $65,000 even though he had an annual salary of $2,300. Even with this damaging discovery, the Montreal judge acquitted Bisaillon of all charges. Even more incredible is that he kept his job as chief customs officer in Montreal for the next ten months.
THE KING BYNG AFFAIR
After five years in office, and anticipating an open revolt in the House over the Customs Department scandal, King decided in 1926 to call for an election. As required by law in such matters, he then approached Governor General Julian Byng, a former British Commander and war hero.
Byng refused King’s request, and instead asked Arthur Meighen to form a government.
King was stunned and angry. After all, it was common knowledge that the Governor General was a figurehead only, and had o right to refuse the government’s requests.
Meanwhile, Meighen’s new government was so weak it only lasted three days before it fell apart. The election King had requested happened after all.
The election campaign that followed was heated and intense, with a lot of childish name-calling on both sides.
King cast a slur on Meighen for accepting power “unconstitutionally”. He also rallied against the Governor General’s “meddling” in parliamentary business, and cautioned the people that Byng was attempting to reduce Canada back to mere colony status.
Meighen, in turn, tried to sway the people against King by dredging up the Customs Scandal and ridiculed King’s arcane “constitutional issue”.
King was voted in with a working majority.
Canadians still can’t agree as to whether King or Byng was in the right, but the stage had nonetheless been set. Governor General, as the Royal Family, has since become (unofficially) no more than tokens and were not to interfere anymore.
King wanted Canadians to regain faith in their government, so he took belated steps to stop the bootleggers. He reinstated the RCMP’s power to patrol the borders. He also set up a Royal Commission to investigate the smuggling.
N.W. Rowell, a well-known prohibitionist, was named as Commission Counsel. One of the tasks he took on was to sue distilleries and breweries, which had profited largely, for tax evasion, or had their licenses revoked.
In 1930, King finally brought down legislation prohibiting clearances to vessels carrying liquor to the U.S., as the Americans have been asking for since the war had ended.
The reason King probably took so long to act on the problem was because of the large revenue that ensued form excise and customs duties. The American thirst for Canadian liquor had increased the government’s revenue from about $60 Million in 1929 from $10 Million in 1919.
After being elected President of the United States in 1932, Roosevelt repealed prohibition on December 5, 1933.
Source: Format: Trade Paperback · Published: September 2000 Dimensions: 384 Pages, 7.4 x 9.31 x 1.07 in ISBN: 1894413199 · Published by CDG Books