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"Last year the Government an-- nounced that at the proper time it would be in the market. for long: term money, as soon as the time appeared favorable to float an is-- sue of bonds. Because of the Gov-- ernment's "Pay--As--You--Go" policy, we were able to meet maturing de-- bentures in May last year of ap-- proximately $12,000,000, which bore interest at 6 per cent.; in June, of| $2,000,000, bearing interest at 4 per | [ cent; and in August, over $7,000,-- |000, bearing interest at 2' per cent., and still keep a substantial cash balance on hand. "On Dec. 15, immediately follow-- ing the Dominion--Provincial Con--| ference at Ottawa, and following | upon the settlement of a great con--| 'stltutiona! crisis in Great Britain, | .the time being most opportune, the | \Treasury secured the approval of | the Lieutenanl-Gm'ernor-in-Council' for the making of an issue of de-- bentures due Dec. 1, 1951, and bear-- 'ing interest at the rate of 3 per | cent. per annum. These debentures | \ were to be payable only in lawtful) | 1money of Canada; and right here | \let me say that this Government | | has never borrowed a dollar repay--| 'able in any other than lawful money lof Canada: and. although we have 'hld very flattering opportunities | to borrow both in New York and | London, we have set our faces | against putting the neck of the Ontario taxpayer under the hee! of the London or of the New York money--lender, and have stuck by our policy to borrow in Canada only. The issue was purchased by \a syndicate which paid 98.51 for the bonds, so that the money cost the Province 3% per cent. This price for fifteen year money, may 1 say, is the most favorable obtained by any Province of Canada during the last quarter of a century: and I am further informed that this is the first time in a quarter of a century that long--term bonds of the Prov-- ince of Ontario have sold at a bet-- ter price than have those issued by the Province of Quebec. Maturing Debentures. "Early in January we made an issue consisting partly of 2'% per cent. debentures, repayable in annual amounts of $1,000,000, from 1943 to 1947. These were sold at $8.65 for the bonds with a par value of $5,000,000, the average cost of the money being less than 2.7 per cent. We also sold slightly over $10,-- 000,000 of 3 per cent. bonds, repay-- able annually from 1948 to 1962. 'These bonds were sold at 98.52, or an average cost of 3'4 per cent. l'l'he average maturity of the bonds was sixteen and one--half years. an average term of sixteen and one--half years at a cost of about 3% per cent. per annum is a worth-- while accomplishment and one that reflects most favorably upon the credit standing of this Province. The result of the sale of these two issues was to put the Province in a very satisfactory financial posi-- tion, and it is not expected that the Province will require to go into the money markets again until October or November of the present year. Indeed, if the financial showing of the Province continues to improve this year as it did last year, it may not even be necessary to go to the public with an offer of debentures at . any time during the present | calendar year. ----"I think this House will agree| with me that to borrow money for "I think this is an appropriate time to inform the House that during the present calendar year the total debentures maturing amount to $24,000,000; in 1938 they , will amount to $20,000,000; in 1939 ] to $25,000,000; in 1940 to $17,000,-- 000;: and in 12M41, to $13,000,000. _ "In order to properly appreciate the fortunate financial position in which the Province finds itself to-- day, let me say a few words con-- cerning the recent trend of bond prices. Since the beginning of the present calendar year, or to be more accurate, since the eleventh day of January, Governmental bond prices have shown continued unsettlement. This has been due in part to the congestion in the Canadian new issue market, but to a greater de-- gree to money market developments in New York and London. The de-- cline is not considered to be directly attributable to the budgetary prob-- lems ot Government, aithough that factor cannot wholly, of course, be disregarded. What is of greater im-- portance is the unsettled condition of foreign money markets. * Feriod of Cheap Money, "This disturbed condition is due to a number of causes among which may be mentioned the recently an-- nounced rearmament policy of the British Government involving, as it will, an expenditure of 7 1--2 billion dollars, a comparatively small por-- tion of which will be met by taxa-- tion; the raising of the reserve re-- quirements for United States banks. and the monetary measures under consideration for regulating the flow of forgign investments in che United States markets. While there has been a growing feeling that general conditions may be approach-- ing the period of expansion, wherein a hardening of money rates may be expected, 1 am inclined to the opin-- ion that we shall continue to enjoy a period of comparatively cheap money. Notwithstanding the presen unsettled condition of the bona market and the prospects of the British Government spending over a short poriod of years the sum of 7 1--2 billion dollars, 1 am inclined to think that in the long run the abundant supplies of gold, the production of which is constantly on the increase, are bound to exert a decided influence in keeping rates of interest approximately within the ! present levels. "When it is considered that since the eleventh day of January, 1937, day after day witnessed a drop in prices in the high--grade bond mar-- ket in London, England, honor: able members will appreciate and find reason for pride in the fact that a cablegram received from the fiscal agents of this Government in Lon-- don, on Feb. 24, 1937, reads as fol-- Jows: "I quotet 'Referring to tele. gram 23rd, Province of Ontario, 4 per cent. stock, 104 to 105; Province of Ontario 4 1--2 per cent. stock, 108 to 109. Quotations are nominal with no stock offering.' "Convincing Evidence." "You will recall that last year 1 discussed the price of Ontario regis-- tered stock in London and gave you! some figures to indicate the prices that ruled during the time that the Henry Government was in the sad-- dale were much lower than at this time, and in fact, most of the sales reported during the latter part of the Henry regime were under par | "Coming back to the cablegram. J should like to ask if there could be any more conclusive evidence of the fact that, notwithstanding the con-- tinued decline of high--grade securi-- ties in the London market, the credit of this Province is so highly regarded that Province of Ontario inscribed stock stood eight to nine points above par with no holders of the stock willing to sell. 1 often wonder how some ill--wishers of our Government, in the face of such convincing evidence, can have the audacity to continue their unwar-- ranted statements to the effect that this Government has destroyed On-- tario's credit in London. Ordinary Expenditures "In dealing with the problems of public finance, all authorities agree that no activity with which a Gov-- ernment is concerned, requires he scientific attention that is demand-- ed in the control of the expenditures made by public authority. It is deemed a great accomplishment, and one that is most highly esteem-- ed by every one charged with the responsibility of looking after the finances of public authorities, to keep expenditures well within the bounds of revenues. It is much more to the advantgge of taxpayers to achieve the results of a balanced budget by economical spending rather than by raising unreason-- able and oppressive taxes. This Government has endesvored to prac-- tice a wise economy, and by a >wise economy I mean, not a parsi-- monious reluctance to spend the public money regardless of whether it is needed or not, but rather the exercise of prudence and good judg-- ment, whereby the taxpayer's doi. _ "This Government has been blamed for practicing economy, out' it is my belief that the citizens witl: commend us for our policy of re-- trenchment and our policy of 'Psy-- As--You--Go. If we have been accused | of being an economical Govern-- | ment, I accept the charge, and, I say't | that we have followed throqghout' \the fiscal year sound financial | policy. Mr. Speaker, let me state | for the benefit of this House, and ilvommend to the citizens of this 'Province, an axiom which I believe hold true in any country in the world. It is this, that sound finan-- cial policy anl sound government are inseparable. A sound financia' policy is never found except in the case of a souna government; and no government is worthy of the name of being a sound government ; that does not follow a sound finan--| clal policy. ' "Kept Our Pledge." | "Moreover, it is with great satis-- faction that I am able to stand be--, fore you today and declare to you that the pledge 1 gave to you un . behalf of this Government a year| ago in these words: 'We promise without reservation of any kind that we will live within the supply which we shall ask this House to| vote to his Majesty, has been kept to the letter. We have kept our | pledge and today I am able to re--} port that, whereas we were given authority to spend on ordinary ac-- count this year the sum of $85,817.--, 633.64, we will spend only the sum : of $84.874,079.78, a saving, resulting | from a fine system of budgetary control, of $940,000. _ P ag eA for necessary materials and capital} goods in such a manner as to se-- cure a dollar's worth for every| dollar spent. i "For this accomplishment I desice to thank the members of the Cabinet, the Deputy Minister, and '\the whole of that great body, the | Civil Service of Ontario. They have |\ co--operated loyally and ceaselessly in bringing about this most de-- strable result. jcasts. "Just at this point I want to an»| nounce officially to the House that the cuts in Civil Service salaries, | which were found necessary and . which were introduced by the former Administration, have been entirely wiped out; and the only dedurtion from the salaries of per-- manent civil servants of Ontario is that representing their contribution to the Civil Service Superannua-- tion Fund. "With the permission of the House, I shall place upon the records an interim statement of gross ordinary expenditures for the fiscal year April 1, 1936, to March 31, 1937, being ten months' actual expenditure and two months fore-- Mach i0