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Debentures Price High On Aug. 1, 1937, debentures to the par value of $20,000,000 were issued; $10,000,00 being repavable in three years with & coupon rate of 2 per cent, and $10,000,000 repayable in seven years at a coupon rate of 2'4 per cent. The three--year deben-- tures were sold at a price to pro-- duce an interest cost of 2.2 per cent. The seven--year deobentures were rold at a price which resulited in an Interest cost of 2.85 per cent. & With the heavy program of cap-- ital expenditures, both for highway construction and for hospital exten-- sion, which this Government has undertaken, it was found expedient to issue and sell debentures to the public. On Nov. 15, 1937, debentures of the par value of $25,000,000 were gold; $8,000,0M00 having maturity of three years and two months at a coupon rate of 2 per cent and an effective interest cost rate of 24 per cent; $5,000,000 debentures pay-- able in seven and one--half years with a coupon rate of 254 per cent were sold on a basis of 3 per cent, aend $12,000,000, due in fourteen years and callable at the option of the Province in twelve years, bear-- Ing 3' per cent coupon rate, were sold at a cost of 3495 per cent. Highest Price Offered. The average cost of the money borrowed compares most favorably with that secured by any other Province and also the rates paid by the Dominion Government on its guaranteed Canadian National Rail-- way loans. The credit standing of any public authority is reflected by the rate at which it is able to bor-- row large sums of money; and I am able to inform this House that the price offered for our debentures to-- day is the highest in history and ap-- proaches very nearly the price rul-- Ing for Dominion of Canada obliga-- tions. Cheap Money Looked For The Treasury bills outstanding, bearing rates of interest varying from 1%% to 1'4%, amount in total to $49,000,000, As is customary, a dGetailed statement of the outstand-- ing Treasury bills, all held by chartered banks in the Dominion of Canada and payable only in the law-- ful money of Canada, will be sup-- plied in the printed copy of this eddress. In this connection let me say that this Government has found g_reat advantage in financing by reasury bills with a maturity of from six to twelve months rather than by the issue of debentures. There is every indication, from every reliable source of information which we are able to contact, that this country is in for a period of cheap money and, in my opinion, there is no doubt that the cost of money will find much lower levels before business gets on a sound footing. s & yo The text of the address, exclusive of the preamble, which Premier and Provincial Treasuree Hepburn de-- livered in the Legislature yesterday in the presentation of his fourth Budget. follows: The continued trend toward lower interest rates has vindicated in no small measure the policy of this CGovernment in financing its obliga-- tion by short--term maturities at rates of less than one--half those which obtained with respect to the borrowings of the former Adminis-- tration. The political and financial diffi-- culties that presently exist on the Continent of Europe are felt here in no small measure because of the folly of former Administrations in issuing bonds redeemable both as to principal and interest and at the option of the holder, in New York, sterling or Canadian funds, to the advantage of the bondholder and to the disadvantage of the Ontario tax-- payer. Fredicament Faced. Any one who has been watching the fluctuations of foreign exchange within the past hectic week will realize to some extent the anxiety that besets a Provincial Treasurer in trying to arrange to meet accru-- ing interest and debentures at ex-- change rates most favorable to the Province. The fluctuations in for-- eign exchange have, during the past few years, constituted a tremendous and almost unsolvable problem for the large financial institutions in the United States, but the Province of Ontario has furnished a partial solution to their problem, for, of the $234,000,000 of Province of On-- tario bonds payable at the option of the holder in Canadian, New York funds, or in sterling, the bulk of these are now held in the United Etates; and used as hedge money by the large financial interests; and the day is not far distant when the Province of Ontario will be the only public authority in the whole of the English--speaking world that is in the unenviable position of having in meet principal and interest in one of three currencies, whichever is the highest--always to the dis-- acvantage of the cashbox of the Province. Interest Cost Cut Again Partly because of the budgetary position of this Government and partly, as I have already indicated, because of the low rates of interest obtained, this Government con-- tinues to improve its position as far as interest costs are concerned. Last year I drew your attention to the fact that for the year ended Oct. 31, 1934, out of every dollar of net revenue collected by this Prov-- Ince it required approximately 43 cents to meet the cost of interest on the public debt, leaving only 57 cents of the taxpayer's dollar to meet other ordinary expenses,. You will recall that I was able to an-- nounce in my Budget Speech of last year that this cost had been re-- duced from 43 cents to 26 cents out of every dollar of revenue collected; and this year I am able to announce that it will cost less than 24 cents out of every dollar of revenue col-- lected to service the debt charge of the Province. 5 > roads and other necessary public services. In increasing the value of the taxpayer's dollar by 19 cents in the dollar in a period of four years I hold that this Government has contributed something to the benefit of every one of its citizens. Thus it will be seen that, whereas In 1934 only 57 cents out of the tax-- payer's dollar remained available to meet the necessary costs of dis-- charging the functions of govern-- ment, this year, instead of 57 cents, we will have 76 cents out of every dollar of revenue available for edu-- cation, hospitals, maintenance of Maych i3 Roads Built For Future This year, highway extensions undertaken, whether in the north-- ern or southern part of the Prov-- ince, were carried on with a view to maintaining the highest standard of modern highway construction. Any one who has had a chance to study our highway system must agree with the contention that the roads we are building today will not only serve the present genera-- tion, but are built for the future. In the northern part of the Prov-- ince we constructed seventy miles of new pavement; a greater length than had been completed in al} the years from 1920 up to date. We also prepared 175 miles of grading, ready for surfacing this --coming season. We -- erected forty--six bridges of a heavy type, a number of these structures permitting of the opening of many miles of new highways. In the southern part of Ontario we laid 264 miles of new pavement and seventy--five miles of grade was finished, the major portion of which permits of dval highway develop-- ment this summer. We also com-- pleted in the southern part of the Province thirty bridges, a number of which are the heaviest type of concrete, exceeding, in dimensions. anything that has ever been under-- taken on Canadian highways up to date. Apart from the financial aspect of our highway problems, one must recognize the fact that because of our climatic conditions the hazard of highway traffic has increased as compared with other sections 61 this continent. In the winter time we have snow, sleet, and ice condi-- tions, and in the summer, by reason of our geographic position--wedged as we are in that densely settled section of the United States --we have to provide highway accommo-- dation for a population greatly in excess of our own. Confronted as we are by this problem, and for the sake largely of preserving human lives, having in mind the terrific in-- crease in highway fatalifies, this Government can justify very prop-- erly the huge investment of money in highway construction. We are looking forward to the day when the main artories of our highwa system will be in the nature of the super--hizghway, eliminating the in-- cident of actident, according to statistics available, by 66 2.3 per cent; so that our highway program, progressive as it is, can be justified not only by the return of invest-- ment, but by saving the lives of 'our own citizens and the tourists from other lands, to whom we ex-- tend a most cordial invitation to visit this great domain, in order to glean first--hand information with regard to the natural re-- somurces with which we are blessed. The death toll on our highway systems has convinced this Admin-- istration that we have gone beyond the saturation point of traffic, In accordance with our promise to municipalities that we would lighten the tax burden, we assumed 681 miles of what had formerly been heavily travelled county roads. Prior to last vear, because of our assuming 100 per cent of the Pro-- vincial expenditure, the counties of this Province were saved $2,705,-- 474.35. This vear alone this amount-- ed to $5,000,000, certainly a most substantial saving. Look to Super--Highway.