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'This, the Government immediate-- Ivy announced to be impossible, not-- withstanding that it was pointed out that the loss would decrease should the demand for power in-- crease,. 'The Prime Minister inquired as ' to whether the representatives of the companies were armed with authority to amend their contracts. The reply was in the negative. It was admitted that no accredited | representatives of the bondholders | were present. It was thought, how-- | ever, that the bondholders would | later approve some reasonable con-- ! cession. The companies had not been able to agres on a combined offer. Beau-- harnois, MacLaren and Ottawa Val-- iey joined in one offer, and Gatineau made 2 different offer on its own behalf, 'The three companies offered to reduce the amount of the Hydro's aggregate commitments, including Gatineau, from 733,000 horsepower by an amount of 191440 horse-- power, leaving the Hydro to absorbh a balance of 542,000 horsepower, An abatement in price was suggest-- ed, and refused, so that this amount of power at $15 per horsepower would involve a payment annually of $8,130.000. Aside from the energy now being temporarily used for the production of steam, as the Hydro's require-- ments this winter will not exceed 100,000 h.p. primary demand, or, at the contract price of $15, an amount of $1,500,000. 'The companies' offer was on a basis of loss to the Hydro of $6,630.000 per year. Spokesman on behalf of the Hy-- dro Commission asked if the com-- panies were prepared to sell to the Hydro the amount of power that the power users required and no more. This suggestion on behalf of the Hydro was declined by the com-- panies. The parties having reached an impasse, the conference was ad-- journed in order that the Govern-- ment might meet with the repre-- sentatives of the Gatineau Com-- pany. As spokesman for the Gatineau, Mr. Graustein offered a revision of the contract by the elimination of certain objectionable features. The company was not prepared to sur-- render its complete rights to shift to the Hydro increased costs due to new Quebec taxation. This reser-- vation, the Premier declared, was fatal to any agreement. oys The Gatineau Company proceeded q to offer to supply the Hydro with | the 100,000 horsepower required for | this winter's maximum demand and to continue to supply power in ad-- ditional amounts as demand grows, throughout the years until the full 260,000 horsepower mentioned in the contract is again absorbed. § The power at present being used for the generation of steam, the Gatineau is prepared to continue to supply until such time as the Hydro's customers can equip their plants for the production of steam by coal--fired boilers, and to charge for this energy pro rata on the basis of the time for which it is used. This power is now being sold by the Hydro at less than $2.25 per horsepower, though purchased at $15 per horsepower, invo'lving an annual loss of over $2,000,000. Following the conference with the Gatineau rcpresentatives, the Cab-- inet went into Council. The situa-- tion was fully considered, and in view of the altogether unsatisfac-- tory offers received and the inabil-- ity of the company representatives to surrender the contracts for re-- vision without further authority from the bondholders, it was de-- cided that the Act must be pro-- claimed. An Order--in--Council was accordingly passed, and the fact was announced to the companies, Further negotlations will be car-- ried on by the Hydro Commission for the purchase by the Hydro of the power it actually requires and | panies had now reached a critical 'sh:e. 'The definite step of cancella-- ' tion had been completed. The future | of the Ontario Hydro System was , hanging in the balance. With the lcoumge seldom, if ever, equalled by any public man in the history of Can-- ada, Mr. Hepburn, in his capacity as . Prime Minister, had accepted the final | responsibility as head of the Govern-- ment, in a declaration of war against the millicnaires of the financial dis-- tricts and the power octopus which !had held Ontario in its grip and had | drained its domestic and industrial power usors of many, many millionsi of dollars. ) "Under such circumstances one would havse imagined that the Leader of his Majesty's TILoyal Opposition would have refrainecd from joining hands with the enemy and giving comfort to the foe, and attempting to embarrass the Province's responsible representatives in the discharge of their ifficult and responsible duties. 'Rules of Parliamentary debate make impossible a fitting description of the quality of the act of the Leader of the Opposition when he actually sug-- gested that the power companies open | the sluice gates on the Quebec side ; of the Chats Falls development and ;sab:mge the Commission's generating ' plant. I hold in my hand a press re-- port of an interview on the day fo!-- lowing the proclamation of the Act, in which the Leader of the Opposition took sides with the power companies in their battle against the people of Ontario, and actually suggested, and apparently justified, the theft of On-- tario's waters by the Quebec com-- tpanies, in an offensive warfare to |cripple the Commission's plants, and : by bringing about a power shortage in the Niagara system compel the Hydro Commission to pay to the power com-- panies the price of peace,. It is to the credit of the power companies that they refrained from a criminal act of open warfare to the Commission, of which the Leader of the Opposition had egged them on. This is what he said: 'I wouldn't be surprised if Pre-- mier Hepburn reconsiders his decision before very long, when he finds out what he has done,' former Premisr George S. Henry predicted today, as-- serting that 'Ontario's cancellation of the Quebec power contracts had left Hydro powerless to prevent the Ot-- tawa Vallcy Company from opening its sluice gates at Chats Falls, thus ruining Hydro's half of the joint de-- velopment.' Nor does it add anything of credit to the sorry picture of the honorable gentleman in this connec-- tion when we learn of the glee with which he observed the supposed pre-- dicament of the power--users of the F.ovince. I read from his published interview: 'So that is the kind of in-- surance for Ontario Hydro that Mr Roebuck has,' laughed Mr. Henry. 'W« need Chats Falls, for we cannot gen-- erate even the power on our side of the river without their co--operation.' The time may come when the honor-- able gentleman will laugh on the other side of his face. "When one realizes that the Prime Minister had invited the power com-- panies to send their salesmen to the Hydro Commission, with a suggested hope that they might perhaps sell power, one might perhaps have ex-- pected the Leader of His Majesty's Opposition to refrain at this point from attempts to boost the price, and yet we find the Member for York East declaring that $15 per h.p. is justified. price apparently is justified,' Mr. Henry asserted. "Evidently the gentlemen opposite are stili prepared to accept 733,000 hp. from their power baron friends and to pay a price of $15 per h.p. or $10,965,000 per year. They have done everything in their power to bring that result about. 'The country has not yet forgotten the thirty--six hour This is what he says: 'Premier Hep-- burn's continuation of the $15 per h.p. price for the power still purchased from Gatineau showed that the $15 March 4 Opposition in this House at its last Session, in their futile attempt to pre-- vent the passage of the Power Bill. And may I remind them of the declaration of the Leader of the Op--. position of that time that, the% Niagara and Eastern Ontario Systems are now taking sufficient power tol warrant continuing the contracts.' "Nor can one forget the implicd threat of the former Attorney--Gen« eral, the member for Parkdale that should the Conservative Party be re-- turned to office, it would repeal this Government's Power Act and re-- establish the contracts with the power barons. I read from a newspaper re-- port of the honorable gentleman's speech in this House on Friday, April 12, 1935: "The suggested attack on the Commission's Chats Falls plant, and the attempt to maintain the power price at $15 per h.p. is in keeping with the policies pursued throughout the entire Conservative Opposition. "The Act was no sooner proclaimed than the member for South York, former Minster of Highways, rushed to the aid of his power baron friends. I read from the press report of his in-- terview on Dec. 7, 1935: "The working conditions of the two agreements are of sufficient similarity that nothing is to be gained by read-- ing many of the clauses important in themselves. I shall content myself with noting the striking comparisons between the two agreements. Under the old contract, deliveries commenced on Oct. 1. 1928, and were completed at 260,000 h.p. on Oct. 1, 1931, and were to continue for a period of thirty years from the first--mentioned de-- livery. Under the second agreement 260,000 h.p. is to be held available for "The events of the next few days proved how groundless were the Up-- position's fears, and how unjustified was their attempt to maintain the $15 price. I stated that when the can-- cellation of the contracts was an--« nounced not a motor would stop turn«» ing, and not a light would go out. That prediction was fulfilled, and in due season the power companies sent their representatives to deal with the Hydro Commission. A totally differ-- ent situation was then presented. The contracts had been cancelled, and the companies were free from attack by the bondholders in entering into new agreements, and on Dec. 20, 1935, the Hydro Commission accepted in broad outline, and subject to confirmation by the Government, the terms of agreements which have now been executed in formal documents. It is my privilege to bring to the attention of the House the new agreements. by which the Government and the Com-- mission have secured for the Province both its present and future require= ments, limited however to amounts which can actually be used, at prices in striking contrast with the improvi«-- dent agreements which have been cancelled." ° "And even my friend from Toronto High Park takes up the cudgels for the power companies and their exorb-- itant price. "I shall deal with the Gatineau new and old agreements first," proceeded the Attorney--General. If this Government can repudiate, perhaps the next Government will come along and repudiate the acts of this Government. Cabinet action is a grave mistake. This removes the last hope that by amicable settlement Premier Hep-- burn might repair the harm done by passage of the repudiation legisla-- tion. Continuation of purchasing power from Gatineau at $15 per hp. is an admission by the Hepburn Govern-- ment that the price was right. I hoped when the Government de-- layed so long in proclaiming the Act that the Government concluded it made a mistake and was trying to get out of it gracefully. I have a great deal of admiration for Mr. Hepburn's courage but he has been badly advised by his Attorney--Gen-- the Conservative