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one of the milestones in our progress and development of a great, prosper-- ous and wealthy community. I am perfectly satisfied, no matter what the purpose is, that this purchase that I am now submitting to the House has every justification, in&.v 'iil;r'ef(-)--r--g, with supreme confidence, I move the second reading of the bill." Premier Henry rose to move sec-- ond reading of the bill as virtually the first item of the afternoon's business. Declaring that he had little to add to what he had already publicly stated in respect of the subject under dis-- cussion, he reviewed the history of the Abitibi and the Ontario Power Service Corporation and the events Province, particularly for the Northern part. of the Province. I am firmly convinced that this purchase will go down in the annals of this Provinse as Premier Henry--They were going to make an alternative proposition to the Ontario Power Service Company, not to the Government. Mr. McQuibban--Were you not aware of it? Mr. McQuibban--Would the Prime Minister be willing to divulge the terms the private interests wanted to take the enterprise over? Alternative Proposition. Concluding his brief presencation, the Prime Minister said: "I am not going to debate the imatter further. Of all the measures I have proposed to this House from time to time tor the past twenty years, there has not been any measure that is of more im-- portance, of greater value for this proceede leading up to the exchange of On-- tario Hydro Commission bonds for those of the O.P.S.C. Liberal Leader W. E. N. Sinclair followed Hon. Mr. McCrea just before midnight and the House voted on the O.P.S.C. power acquisition at about 12.15 o'clock this morning. Premicr Reviews History, i "This House, or shall I say every member of this party that stands be-- hind the Honorable Prime Minister, | the members of the Government to a man, believe that not one iota from 'his duty did he swerve because two | years before, like thousands of other citizens of Ontario, he had made an investment to help develop Northern Ontario and to give a reasonable as-- surance of saiety. "*Mr. Speaker, I ask this House to support this bill because it is a good bill for old Ontario, beceuse old On-- tario will benefit, because the trans-- action will produce increased wealth in the North in which old Ontario will share. A vote to defeat this bill will be adversely felt in a far larger and broader area than perhaps some gentlemen think tonight. To defeat this bill wilil be to prevent these people who built the enterprise from getting their money; it will prevent the carrying out of the settlement the carrying out of the settlement which has been made on the bond-- holders, and defeat the interests of those who entered into the construc-- tion of the plant. "Whether the people of Ontario march under the banners of Liberal-- ism of Progressivism, or Labor or U.F.O., there are honest men in all these parties, and honest men will agree, and honest men will find no fault with George S. Hentry in the dis-- charge of his duty; that he was not failed the people of Ontario in the discharge of that duty. Urges House Support. bonds, the suggestion behind it is that he didn't do fairly for his Prov-- ince because of that interest. harshly, that he had driven a hard | bargain, that he had taken off their investment 25 per cent., or $5,000,000, over the period of investment. Disputes Suggestion. "And yet some would have us be-- lieve that, in the negotiation of these transactions, there was a suggestion of dishonesty. Because in the last | analysis, if this deal is not a good deal, | is not a good deal because George | _Henry had those $25,000 worth of Dr. McQuibban followed. 1 _ *"*Not for one moment do I suggest ! that Hydro in possession of its com-- plete senses would enter into such an ia.rmngement. Unable to secure a 'market, the promoters conveniently 'sell back to themselve$s, not only to themselves, but, short--circuited under the signature of Hydro, Hydro be-- came the foster parent. The contract was stepped up in the political trans-- former, and when it came out it had political dropsy. "Consider such a contract--Abitibi to Hydro, and Hydro to Abitibi, play-- ing tag, gambling with the greatest asset in the entire Northland. It is apparent on the very face of it that Hydro was nothing but Santa Claus. It was evidently a padded contract, with the soft cushion of political con-- science taking the rebound. _ "Had the Abitibi been able to finance, and the bond dealers willing to accept their financial status, this Government and the Hydro would never have entered into the picture. My honorable friend states that the Government assumes the responsibil-- ity against any loss by the Hydro. "Instead of 16,000, it became 100,-- 000 horsepower. The financial cen-- sors O.K.'d it, and the promoters were assured of $18,000,000. This contract might be said to suffer from a healthy political disease, inasmuch as the whole matter became hinged on the security of the contract, and here as in the Quebec situation Hydro was the guilty security Hydro Termed "Santa Claus." "Had they ~been satisfied, there would have been no further trouble in promotion, and the Commission would have completed arrangements for securing an adequate supply for future demands, from the great sur-- plus without becoming responsible for & large contract. The promoters were versatile and knew their way about, because they had to secure more evi-- dence of financial strength before these bonds could be offered to the public. They had a beaten track down tga Eniversity Avenue and Qucen's rk. "At this very period there must have been some startling political ad-- ventures. The financial censors of the bond flotations naturally demand-- ed the highest security on so vast an undertaking. This 16,000 horsepower was not enough to satisfy them. More, the security of the parent company, the Abitibi Power and Paper Com-- pany. was not enough. They were not satisfied. 4 "The time was not opportunc. The mad waters of depression were gain-- ing momentum, the pulp industry was extremely sensitive and its output was being seriously affected. These are matters for a financial expert to determine as to the probability of an industrial enterprise of this magni-- tude being successful in all its rami-- fications in view of abnormal times. "Let us analyze the standpoint of the financial barons. The promoters, whose nlan was to produce 285,000 horsepower had a visible contract of 16,000 horsepower with the Hydro-- Electric Power Commission. Every major power dGdevelopment has been developed on the concrete basis of actual contracts for the sale of the power. There was little possibility of this corporation undertaking this Ac-- velopment with only 16,000 horse-- power marketed. Political Adventures. "'The Hydro--Electric Power Com-- mission signed a contract for 100,000 horsepower at one crack from a pri-- vate company promoted as a sub-- sidiary of the Abitibi interests. At this very time, the Abitibi ~Corpo-- ration had taken on vast commit-- ments, extending their operations into three Provinces. '"'The pulp and paper companies had pioneered in this respect and had many fine developments serving their own demands. Abitibi Power and Paper Company had several de-- velopments situated strategically to serve their large needs in this respect. And we find that there is a sharp divisicn in the Northern fields, the mining companies being supplied from private enterprise, while pulp com-- panies have their own source of power. C '"Mr. Speaker, let us face the situ-- ation at the time of Hydro's entry into this fiel¢. The entire mining area with the exception of Sudbury was under the control of a private cor-- poration whose peak demands were 85,000 horsepower. This included municipal distribution also. Dr. McQuibban Speaks. iT \ T3 APv\ ness of its creators and this Govern-- ment has developed an incurable tt:'gmplex of muddling and incompe-- nce. f "I cannot condemn this Govern-- ment too strongly for its part in this whole series of events. The Govern-- ment and Hydro know better. They went about the Ear Falls develop-- ment in a commendable manner and the low--grade camps of Howey are assured of cheap power. But the moment it plays ball with the pro-- moters of power it loses its identity and helps itself to a meal it cannot digest. Any movement or concern must reflect the strengh and great-- No Mining Customers. "Is it a sane policy to produce a supply of electricity three and a half times as great as tke actual demand in the North, to expect that what took a quarter of a century to accom-- plish could be duplicated almost over-- night in the way of mine development? We are told that there are huge de-- posits of low--grade ore in the North country which are just waiting the advent of Hydro and cannot exist without a very minimum of electrical charge. "I.am whoie--heartedly in favor of public ownership of this project, but under vastly different circumstances, not the way the Government went about it. It should never have gone through this tangled web, squirming with suspicious transactions which even this Government cannot spirit away. The only people who are pleased at all are the promoters, bondholders and contractors. These three classes of people are with you, anyway. . "Gold mining is one of the indus-- tries that have prospered in these troublous times. Canad&s has ad-- vanced to second place in world pro-- duction, a record we are justly proud of, but yet having announced in 1930 that Hydro would have an abundance of power to supply every customer, it is some three years now, and Hydro has not secured one single customer in the gold--mining industry, "It should have undergone develop-- ment to keep pace with the demands of the North, and developed by the Hydro, then my friends would not be on the mat today wrestling with an outraged public seeking to explain the whole matter by a subterfuge patriot-- ism and the ulterior motives of those who dare to criticize. "Had the whole thing been success-- ful, it would still be under private en-- terprise. Because it failed, it slipped back to the Province of Ontario. Be-- | cause it failed, another situation has | arisen. May I counsel my honorable | friend opposite to be honest about the | whole thing. Do not blame the de-- | pression. Do not hide behind the | charitable skirts of patriotism. Do not heap abuse upon those who dare to point out your errors. Do not create | an erroneous opinion of power--starved mines. The mining industry, instead of reaping untold benefit from nature's prodigality at the Canyon, | must now bear the overhead of a vast | concern muddled by incompetence, | which must languish in -- semi-- | idleness and entail millions upon imil-- | lions of loss, in addition to the in-- creased cost of completion, before it can possibly function to anything like its capacity. Condemns Government. '"'This great site should never have left the Crown. This may have in-- curred some difficulties, but this is the place where legislation is enacted, and a great natural resource such as this is surely the first concern of the governing body, especially with its tremendous relation to the mining in-- dustry of the North. '"We have bartered away a power site, one of the greatest in all the world. We provided the pillars of its promotion. And strangest of all, when it came to the financial precipice, we diverted the credit of the Province to its assistance. Is it any wonder the public are up in arms? Just where all these strange wanderings led is a mys-- tery. It is a tangled web the people of Ontario have difficulty straightening out. It is the same strange mysterious power which was present in the Que-- bec contract. "Now we come to a bend in the trail; the lane lasted a long time, but we have reached the point where there are a great many bends. We have a power plant by one of the most devious and circuitous routes possible. Power Site Bartered.