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antes of the Government was every- thing," said Mr. Drury. "The act was unworkwble without it." He said that such obligation would have had to be met out of the Provincial funds it the railways were not pay- Jntr propositions. Premier Drurrpaid that his Gov- ernment at that time had obtained a report from Mr. Clarkson, and he had advised caution in matters of new undertakings. The new under- takings involved an expenditure of nearly ttrtr,tr00,0tr0, to be guaranteed by the Province. The Government had decided to go slow and find out where the Province was headed on the radial Issue. Is Pntrtte,-ownertihtp Man. "But I believe they should have a fair chance." He was glad the Dominion had entered into the field of railway ownership, though not under the most happy auspices. The Domin- ion taking over the railways had changed the situation from what it had been in 1914. Mr. Drury then referred to hie Giencoe speech last year, when he had announced on behalf of the Government that it had decided not to go on with the radial lines so far as the guarantee of bonds was con- cerned, but he had said then, it the municipalities wanted radials, and voted again on them to go on with- out the endorsement ot the Prov- ince, the Government saw no rea- son to interfere. The present bill was a. fulfilment of that pledge. Can Build Local Lines. He then told about the appointing of the Sutherland Commission and the findings of that body, among which was one that, in the opinion of the commission, the proposed lines would not be self-supporting. "I stand for the public ownership of public utilities," said the Premier. There might be instances. he said, where the municipalities might find it wise to have a local railway. The present legislation was designed to give full power to make it easy for the municipalities to build and manage lines as they saw fit. If the municipalities were to incur the losses, then they should have some say in the body that would operate the road. The act he was sponsoring, said the Premier, put the inception of a radial project where it should be--- in the hands of the municipalities affected-but, at the request of 'pgSePtl,i,t,if,'t,'; the Hydro-electric Po er Commission was authorized to investigate and report on any radial project at the request and ex- pense of the municipalities. Munici- paiities were permitted under his act to enter into agreements, with each other for the construction. equip- ment and operation of electric rail- ways. After the municipalities had entered into agreements, the by- laws were to he submitted to the electors. All Electors Must Vote. The old law allowed the zoning of municipalities. The new act re- quires that voting was to be done by the whole of the electors of the municipality. The by-laws them- selves had to set forth in detail the total financial obligation and the estimated revenue. In explaining his abolition of the zoning system. Mr. Drury said that the whole munici- pality was liable, and so the whole municipality should vote. Experi- ence had shown, he said, that the nearer to the railway the more likely the people were to vote for it. In the old act, if one municipality failed to pass the by-laws necessary, and if the amount of the financial obligation did not exceed 10 per cent. of the whole, then the other munici- palities could proceed. That pro- vision was also in the new act. The new act also provided for the creation of a new body, the Munici- pal Association. The members ot this association, five in number, practically formed a board of direc- tors, controlling. as a board of directors did, the running of the railway. Like Bankruptcy Act. The small municipalities were pro- tected in the same way as were the,; small creditors in the election of administrators for a bankruptcy case, the provisions in that respect fetus based on bankruptcy proceed- ngs. The Premier then came to the financing under the new act. Con- cerning this feature he said: "Under the old system the guar- 1 "As the t1naneiat provisions of the !present act are complicated in their effects, I requested Mr. Cierkson. as auditor of the Hydro Power Com- mission, appointed by the Govern- .ment, to give me a memorandum lexplaining the effect of the provi- Mons ot the act, a.nd at the same time I asked him to state if the ob- Jections to such provisions are avoid- ed in the bill now before you. A memorandum which I have from Mr. Clarkson is as follows: Mr. CIarkson Explains. "'In order to explain the differ- ence between the present Hydro- electric Railway Act and the one contemplated. take the example where a railway is to be construct- ed on behalf of ten municipalities by the sale of five million dollars ot bonds secured by tive million dol- llars of debentures pledged by the l municipalities interested. " 'The bankers would have no direct recourse against the deben- tures deposited by the municipalities, but such debentures would remain in the hands of the commission. Thus the commission directly intervenes between the bankers and the securi- ties held from the municipalities. In case of default under the above circumstances the bankers might meet with considerable difficulty in obtaining the benefit of the deben- tures deposited by the municipalities with the commission, and it is very questionable if under the terms of the act the bankers could, with de- fault upon the bonds sold to them by the commission, obtain repayment before full maturity of the commis- sion's bonds. " 'Under the present act the Hydro-electric Power Commission would sell five million dollars of its; bonds to bankers, and these bonds, under the provisions of the act, would be a, direct mortgage upon the railway to be constructed, and would be enforceable against such railway. The commission, on its part, as security to it in respect of the five million dollars of bonds which it would sell, would hold tive million dollars of bonds from the municipalities. These bonds it would have the right to sell from time to time, only to the extent necessary to make up operating detteits, including sinking fund and interest. No Monroe for Bankers. " 'Under these conditions the bankers have direct recourse against the debentures of the municipalities without the intervention of anybody, and can realize upon them to meet their advances. " 'The difference between the two, methods of ttnaneing is Just tttil that under the proposed act the bankers can sell both the railway] and its equipment and the bonds' immediately upon default, in order to pay their claims. Under the pres- ent act they could sell the railway, but would not have direct recourse against the debentures deposited " 'In view of these conditions there can be. no question but that it will be very dimcult to sell bonds for the construction of any railway where there are a number of small town- ships interested without the Govern.. ment's guarantee, so as to overcome, from the standpoint of the bankers, the dimculties mentioned; in fact I think Sir Adam Beck admitted that such was the case. To Mortgage Radial Lines. " 'Under the new act it is content.. plated that the association to be formed shall issue its bonds, and that these bonds shall be secured by (a) a mortgage to a trust company upon the railway to be constructed; ('b) the deposit with the trust company of debentures from the municipalities to an amount equal to the bonds issspeirby the association. - of such bonds would immediately become due, when the bankers. through the trust company, would be entitled immediately to sell (a) the debentures of the municipalities lodged with the trust company, or (b) the railway and its equipment, or (c) both ot the above. Side-step II. E. Commission. " "thereafter each municipality interested is under covenant to pay its share of! any deficit (including interest and sinking fund). It under such circumstances default in the payment ot any interest or principal on the bonds issued by an associa- tion should take place, the whole