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GOVERNMENT DENES USING HYDRO REFUND TO TDE OVER DEFICIT Detailed Statement Given to Public Accounts Committee Opposition -- suggestion that the | $2,108,170.08 which the Ontario -- Hydro--Electric Power Commission re-- | funded to the Government on October 26, 1928, may have been paid back for | the express purpose of tiding the . Treasury over a deficit for the fiscal vyear ending five days later was firmly denied before the Public Accounts Committee of the Ontario Legislature yesterday by W. W. Pope, Secretary of the Commission, and by Hon. William Finlayson, Minister of Lands and For-- ests, who is representing the Ferguson Ministry on the committee. CA The sum in question represents the expenditures (plus interest) which the Government made on surveys and other: preliminary work in connection with the Hydro enterprise prior to 1925, Ac-- cording to Mr. Pope the matter has been one of long standing and for sev-- eral years both Government and Com-- mission have been negotiating for set-- tlement. While at no time was there any dispute between the two as to the amount of the moneys advanced, there had been some differences as to how it should be re--allocated, and the actual agreement on the refund was not set-- tled until October 26. Mré'flnlayson stated that as carly as last summer the Government had known what was to be repaid, and, in answer to a question of Hon. Harry C. Nixon, Progressive, Brant County, ad-- mitted that it would not have spent the sum had it not realized it was to be forthcoming. In any event, gibed Mr. Nixon, it was a lucky "break" for the Treasury that it arrived when it did. _ Mr. Pope appeared before the com-- mittee, on summons, for the purpose of From my long association with the Commission, and the late Chairman, I know that he fully expected that the Provincial moneys used for the pur-- pose of the establishment and for the ultimate benefit of the power systems would eventually be paid. "I would like to say that to attempt to allocate and produce the books, cheques, vouchers and documents to fully conform to the requirements of the committee would mean the ex-- amination of records covering a period of seventeen years, many of which have been placed in storage, and I question if such cou'ld be completed before the end of the present session. Expected by Beck. "Following the receipt of a state-- ment from the Government summariz-- ing the expenditures made by the Prov-- ince on account of the Commission's activities over the period from 1909 to 1925, inclusive, the Commission gave instructions that the Government's statement be checked for the purpose of ascertaining what expenditures rep-- resented therein were incidental to the establishment and for the ultimate benefit of the power properties, "A careful analysis of the expendi-- tures represented. by this statement owed that there were certain cxpen-- atures incidental to the establishment ana for the ultimate benefit for the testifying regarding the $2,108.170 re-- fund. From him the committee ac-- cepted a detailed statement of the situ-- ation, which Liberal Leader Wiliam E, N. Sinclair, who called the inquiry, will have the privilege of studying in its entirety before he resumes exami-- nation of the witness on Wednesday next. This statement of the Hydro Commission Secretary follows: "I take it that the desire of the committce is to obtain some details in respect of this payment, and I have concluded to bring forward the attach-- ced statements which show the purpose for which the money was expended. I would like to point out that since 1925 the Commission has taken care of serv-- ices (such as those embodied in the repayment) for which formerly the Province was providing the funds. S'R"'u "cl a J -- 4'('3'/'6'--4' eP A d > power propertics, Out of the total sum| submitted by the Government amount-- ing to $2,203,344.82 it was found that the sum of $1,312,316.32 was expended in connection with the power systems and was for the establishment and ul-- timate benefit thereof, This sum, to-- gether with interest calculated at the rate of 5 1--2 per cent. per annum (simple interest), amounting to $8106,-- 853.76, was paid to the Province in full settlement of all claims in respect of advances other than those relating to "The amount referred to in the Pub-- lic Accounts is $15,000.00 less than this sum, This is accounted for by the fact that the Government has applied $15,-- G00.00 of this payment in extinguish-- ing the debt of the Hydro Commission to the Province for moneys advanced under special warrant dated July 20, 1927, for surveys on the Mississaugi, French and Montreal Rivers. "Sinte the first of the fiscal year, 1926, the Commission has not found it necessary to make application for Government assistance in meeting ex-- penditures of a nature similar to those comprised in the repayment, but have absorbed all such in current capcrations. This plan was adopted and will in future be followed now that the power systems are fully established and are financially able to defray such ex-- penses. | _ e m k "With the repayment of this sum the Commission has definitely removed a contingent liability and placed itself in the position of having provided ali of the funds required in the establish-- ment and for the ultimate benefit of the power systems since the inception of the Hydro movement." Ssummary of Amounts. capital actouu.. cine totar payment therefor amounted to $2,123,170.08. Extinguishing Debt. Mr. Pope's summary of the amounts paid by the Province which were ex-- pended on Hydro development and ex-- tensions "to the ultimate benefit of the power systems and municipalities comprised therein'" is appended: Commission -- Interest to Year, to Pay. Oct. 31, 1928, 1909 .... $ 32,024.07 $ 33,465.15 1910 .... 4#2,107.15 41,686.67 if11.... ©76,339.10 71,377.62 1912 .... 152,975.14 134,618.12 1913 .... 105,142.54 86,742.59 1914 .... 107,371.27 82,675.88 1915 .... 118,066.16 84,417.30 1916 .... 22,362.170 14,759.38 i9177 .... 15,102.11Cr, 9,130.77 Cr. 1918 .... 66,664.18 36,665 .30 1919 .... 107,9175.179 53,448.01 1920 .... 188,131,69 82,786.74 1921 .... 114,600.55 44,121.21 1922 .... . 83,052,00 271,605.32 1923 .... & 41,153 28 11,317.15 1924 ....> 53,581.10 11,787.84 1925 .... 15,250.01 2,016.25 52. R. H. Kemp, Progressive member for Lincoln, asked before the committee if the money advanced by the Province had been carried from year to year in the public accounts as an asset, and Mr. Finlayson stated he did not think so, because the exact amcunt had not been "ascertainable." Summary of expenditures for the))to lead the people to believe that they Commission from 1905 until 1925. It is| were protected when they were not. as follows: § k All that Premier Ferguson believed Engineering assistance to municipali--| the Legislature could do was to give ties, $442,200.13; hydrographic surveys,| "fair protcction and insist upon henest etc. $709.071.15; audit, administration,| dealing." 'The legisiation in question salartes, etc., $247,570.98; preliminary, was the result of many months of study surveys, $3,802.10; standardizing mu-- by 'he Attorney--General, officials of nicipal equipment, $3,910.86; engineer--, his department, and big business men ing assistance, Department of Public' in the brokerage world. He was not in Works, $2,710.23; reports on overhead favor of Government audit. and underground construction for mu-- "Just think what would happen," he nicipalities, $23,760.85; rules and regu-- said. lations for installation of systems, $27,-- "Yes, just think what would happen," 254.54& farmddgmorlxstratio?s. 8125,§(1ig.- observed the Liberal Leader. 0; shop an evelopment work, ,= 849.18; illuminating engineering inves-- Seen as Guarantce. tigations, etc., $4,492.54; engineering 1'""'; Prime Minister went on to say investigations, surveys and reports, that if a Government audit was made Water Power Regulation Act, 1916, °1 a firm, the audit would be inter-- $34,953.75; data, statistics, surveying, PCLfd by the buying public as a Pro-- etc., re construction Municipal Electric Zlincml guarantee of the reliability of Ralilway, $211486.13; municipal esti-- th¢ firm and the stock in which it mates, power supply, etc.. $18,040.88; twoas transacting, and if anything were clectrical inspection, expenses, etc., go twrong, later, the public would $376,395.56; data and statistics for an-- CPN° vg the Government and insist nual report. $5,120.67; legal expenses, "F;°g t making good any loss that $1,750; expended for power investiga-- m..gof; have been incurred. 1 tion, surveys and reports on electrical . ugy' no," put in Mr. Sinclair. inspection, $24,086.20; interest on tX w Y?:» said Mr. Ferguson. penditures, $5,810.37; total, $2,.311,126.. | . W NHl¢ the Government should insist on $1,312,316.32 Total, $2,123,170.08, Expenditure 1905--1925. 1910 1911 1912 1913 1914 1915 1916 1917 1918 1919 1920 1921 1922 1923 1024 1925 $810,853,76 | _ _ All that the bill before the House would accomplish, he maintained, was 'to lead the people to believe that they 'were protected when they were not. The Prime Minister went on to say that if a Government audit was made of a firm, the audit would be inter-- preted by the buying public as a Pro-- vincial guarantee of the reliability of the firm and the stock in which it was transacting, and if anything were to go wrong, later, the public would come to the Government and insist upon it making good any loss that might have been incurred. "Oh, no," put in Mr. Sinclair. "Oh, yes," said Mr. Ferguson. While the Government should insist on "fair dealing" at all times, it was not its duty, the Prime Minister argued, to %cp in and run brokers' businesses for em. ' FRAUDS BILL SCORED | BY LIBERAL LEADER Says "Brokers' Audits" Wil Create Sense of False Security The Liberal Leader contended that the audits of the brokerage firms con-- templated should be conducted by the Province at stated intervals as well as random ones and should be conduct-- ed in an independent way so as to pre-- vent possibility of any "collusion" be-- tween them and the brokers. "What this Legislature should try to do," he stated, '"is to give absolute security for the public's investments." His observa-- tion that many people did not consider stock--dabbling gambling, but, rather, investing, was met with a long--drawn "humph!" from _ the Government benches. Brokers should be compelled, he claimed to carry on their business as efficiently and honestly as bankers sarry on their businesses. SAFEGUARD,SAYS PREMIER Second reading, in the Legislature yesterday, of Attorney--Gencral Price's Security Frauds Prevention Act amend-- ment, which provides for, among other things, the establishment of "Brokers' audits'" on the Standard and Toronto Stock Exchanges, furnished Liberal Leader William E. N. Sinclair and Pre-- mier G. Howard Ferguson with an op-- portunity to air their views regard-- ing the question of protection for tne "gullible public." Mr. Sinclair denounced Colonel Price's bill as a "mere gesture," that would create a feeling of false security in the minds of the investor. Premier Ferguson admitted that the measure was not "absolute protection" but claimed that it went a long way in safe--guarding the public interests. No law, he maintained, could be devised that would guarantee an investor against loss. To Prevent "Collusion." AS "MERE GESTURE"