184 REPOET OF TELE No. 3 



After studying the question for some days, the Chairman of the Board drew 

 the attention of the Prime Minister to certain matters connected with the settle- 

 ments, and received for the guidance of the Committee a letter as follows : 



Toronto, April 24th, 1920. 

 "My dear , General Gunn, — 



" I am writing this letter as a general instruction from myself and the Govern- 

 ment with regard to the settlement of the affairs of the settlers at Kapuskasing. 



" You are already familiar with the terms of the basis of adjustment, and these 

 must stand. Recognizing, however, the correctness of the statement made by the Com- 

 mission of Enquiry on page 12 of the printed report, we have added a paragraph which 

 gives the Board very full discretion in the application of the general principles laid 

 down. The Commissioners' statement is: 'They are convinced that no solution of the 

 difficulty can be proposed which will be equally fair to all parties,' and the paragraph 

 which we have added to the Basis of Adjustment is as follows: 



" ' Notwithstanding any provisions in these regulations contained, the adjusting 

 officers may alter, amend or vary the terms in these regulations as they in their abso- 

 lute discretion may deem expedient or advisable.' 



" In using the discretionary power given to the Board, I would suggest that two 

 general principles be kept in mind: (1) We wish, in the treatment of all settlers, to 

 err on the side of generosity rather than to strive to drive a hard bargain v^rith them; 

 (2) We wish that those who have been successful, and who elect to remain at Kapus- 

 kasing, should be treated rather more generously than those who elect to leave the 

 Colony. 



" We have been informed that the adjustment of the alleged overcharges in the 

 cost of the houses could be simplified by giving the settler credit for what he has paid 

 on his house and ignoring the balance of indebtedness which stands on the books 

 against him in the ' House ' account. We wish you to consider whether this would be 

 a fair and simple solution of the difficulty. 



" While the above will apply to by far the greater number of houses, we are in- 

 formed that some houses have been built which have cost the settler up to twice as 

 much as the standard house recommended by the Government. We feel that in erect- 

 ing these more expensive houses, the settlers must assume responsibility for their 

 judgment, and we suggest that you consider limiting the value of any house to say 

 $800.00, or at most $1,000.00. This would mean that no matter how much the settler 

 may have actually spent on his house, he would not be allowed more for it than the 

 maximum set. 



" In dealing with those who elect to remain at Kapuskasing, we feel that one con- 

 sideration has been omitted from the Basis of Adjustment. When the settlers went 

 to Kapuskasing, under the original plan, they were promised, (1) a free grant of 100 

 acres of land, (2) the clearing of ten acres at the expense of the Government, (3) a 

 grant of $150.00 toward the huilding of a house. In the Basis of Adjustment, no men- 

 tion is made of the obligation of the Government to complete the clearing of the ten 

 acres in cases in which that amount of land has not been cleared. We recognize our 

 obligation in the case of those who elect to leave the colony by paying them $100.00 

 an acre up to ten acres whether the land has been cleared or not, and we feel that 

 the same consideration should be given to those who elect to remain, namely, in the 

 event of less than ten acres having been cleared, we should allow such settlers at the 

 rate of $100.00 an acre for the balance of the ten acres. This would be in addition to 

 the provision made in Section 4 of the Basis of Adjustment. 



" Further, in Section 4 (c) it is provided that those who elect to remain may 

 select the land of those who elect to leave, and ' in such cases generous terms of ad- 

 justment should be given by the Government.' I feel that no general rule can be made 

 with regard to these terms, and therefore the Government leaves the making of these 

 termg in each specific case wholly in the hands of the Board. 



" The Government recognizes that a somewhat difficult task has been laid before 

 you and your Board, and we wish you to feel that we have every confidence that the 

 terms of settlement which you propose will be as equitable to each settler as they can 

 be made. Complete fairness as between different settlers may be impossible to attain, 

 but in that case we wish the settlers to feel that, while the settlement may be more 

 generous to one than to another, it is intended that it should be generous to all. This 

 applies particularly in the application of Section S (d). If the settler recognizes that 

 what the Government wishes to do is to provide every man who leaves the colony 

 with at least $500 to start him in his new life, it will probably be seen that it is hardly 

 right to speak of any settlement as being unfair. 



" Special mention should also be made of one class of settlers, namely, those who 

 have spent but a few months in Kapuskasing. They went there knowing the condi- 

 tions. I think all of them were connected in some way by blood ties with persons who 



