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with the commission, neither could they sell them, except to the ex- tent necessary to make up annual deficits. Under the new act the de- bentures of the municipalities are a direct security to the bankers. Un- der the present act they are not a direct security to the bankers. but a security given to the Hydro to pro- tect-it, and the Hydro alone has got the right to deal with such de- bentureco, and then only to the ex- tent necessary to meet annual pay- ments.' The Premier read a letter from Mr. Pope of the Hydro-electric Com- mission, received last December, ask- ing the Government to approve an agreement with the municipalities which agreement said that the com- mission could lodge municipal de- bentures or hypothecate them to a, gtrust company. That was an at- tempt. the Premier went on, to do 'outside the existing law what the Government was doing in this act. I Withdraw the Government guar- 'antee. and it became necessary to ihave the double security, the rail- way and the bonds of the munici- palities. The latter would be put in trust where they would not be a vanishing collateral security, but a fixed collateral security. It the House threw out the new act, the lold act would have to be amended in regard to the financial arrange- ments. __ Financing Made Dinicult. "In effect, it means that under the present act. financing without a guarantee from the Province is made dimcult and uncertain, due to the fact that the debentures of the municipalities do not afford a secur- ity to lenders. except with the in- tervention of the Hydro Power Commission. On the other hand, under the bill before you such de- bentures are deposited with a trust company and they are a direct se- curity available for realization should default be made in the pay- ment of principal, interest or sink- ing fund on any bonds sold by an association." A. C. Lewis. Northeast Toronto. asked if, under the old act. there "was not a clause which provided that the commission could call on the municipalities for further de- bentures. The Premier said that to answer that he would go to Shakespeare. to Hotspur's answer to Glendower, when the latter said he could call spirits from out the vasty deep: "You can call, but will they come ?" Under the old act the operating deficits were met by the sale of bonds and the issue of more bonds. That was unsound. The new act provided that municipalities must make up the deficit year by year. The Hydro-electric Power Commis- sion could operate the railway for the association if it so desired. but at the end of five years the oppor- tunity for a change in this respect, if it were desired, was given under the_ provisions oCthe act. ' " Make Up Deficits Yearly. guGfiiiirir" up the advantages of. his new bill toward the conclusion of his address, Premier Drury said: "Ther new act provides for autonomy! on the part of the municipalities; it makes a. feasible way of financing the proposition; it enables them to appoint a representative to a fairly elected board to administer their railway; makes them responsible year by year for the deficit, so the lproject shall not be snowed under lby accumulated defttrittr, and allows them a say in who shall operate. Trusts to Common Sense. "Mr. Speaker. I trust the common sense of the people of the mu- nicipalities. They are not to be hood- winked; they are not to be cajoled into placing themselves into the power of anybody for an extended period of years. of giving them- selves no say as to how things will be carried out. The suggested pro- cedure as outlined in the new bill may not lend itself to a. Province- wide system of railways.- I do not know it will result in the operation of radial systems. where favorably voted upon, in a manner that will not be open to criticism, in a. man- ner where the people will be them- selves responsible. "Under the old act." he proceeded. "it you compel them to accept the administration of a Provincial body appointed by the Province. you would have to bear any loss, any- way, guaranteed bonds or not. You know that is the case. Any group of municipalities called upon to back a railway that did not earn in.. terest would have a. perfect right to say: "Here. your commission, ap- pointed by you, is administering this railway. We should not be call- ed upon to make up the losses in- volved in such administration.' Eliminates Responsibility. "Now, the new act is intended to, and does, cut clean between Provin- cial and municipal responsibility. It allows them to go on under proper conditions. "There is just one thing I would like to add; it is not contained in the act. The Government is com- mitted, and the old Government com- mitted us, to the guarantee of bonds for the Port Credit-St. Catharines Railway. It was a very strange pro- ceeding. by the way." - He read the governing Order-in- Council, and commented: "In other words. Council gave them a blanket order to go ahead, obligate the P;ovince as much as they liked." A record Order-in-Councll of the old Government, he said, "made the Treasurer a. rubber stamp to guar- antee such bonds." "But," he went on, "as I said. there is an obligation incurred by the guaranteeing of such bonds, and when we came in we found com- mitments had been made. and the only way to meet them was to carry out the terms of this order. Eleven millions of the bonds of that pro- ject have been guaranteed. To my mind. that bargain cannot be lightly broken. A bargain is a bargain. To my mind, the only sensible way to get out of such an agreement is by the consent of both parties. One, party cannot break an agreement. Two parties can. And I am going to ask the House in committee to introduce an amendment leaving the Port Credit-St. Catharines Railway with the railways that have been already taken over under the act--- that is, the Windsor and the Guelph street railways. operating under the |old act----to allow iihis railway to 'come under the old act, but on con- dition that the people of the mu- .nicipalities shall vote upon and carry lthe scheme once more. 7 _ "Now, I intend to introduce that amendment in committee. because it seems to me, in hQnor bound, we must carry out the "oblitrationtr----but only on condition that the people re-I vote on the scheme. , 'Wow, there is one further ques- tion: The question Is not covered in this act as to allowing municipali- 'ties to own and operate a radial! hallway running through other mu- i;eiiyt1,i,t",'i,trt2,t question. particu- :larly, of the city of Toronto owning and operating the Toronto Subur-' ban. That is not covered, and ca.n- not be covered by amendment, but' 'on behalf of the Government, so long "as we may remain in power, the needs of such a case can very well be met by a private bill dealing with each individual case as it arises. And in this case we will meet the needs iof a. special case. We will have 'working a fair, democratic Hydro- radial Act which will allow, not a Provinoe-wide system, but an act I, that will allow municipalities, where the needs warrant a. project, to go on with a feasible radial project." P. Wellington Hay-Chit' bill has no' c0nnection with the clean-up? Premier Drury---" has no con- rnection whatever with the clean-up. ,That is an entirely different mat- ter. Neither has the clean-up any- |thing to do with the radial project "That is fair. That is fair not only to the Government, but it is fair to the municipalities. For I would like to point out, Mr. Speaker, to you and to the House that some of these by- laws were voted upon as long ago as six years. and that since the people of the municipalities, and sections of the municipalities. committing whole townships to it, voted on that scheme, great changes have taken place-changes from private to pub- lie ownership of the steam roads, and others.