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HALE--TRUTH _ $ CHARGED TQ AUDITOR Public Misled on Debt by Ontario Official, Says Macaulay That statement, said Mr. Mac-- aulay, was "untrue," and he defied the Government to name a single financial editor in the Province who would support it. The gross debt had been reduced by that amount, he said, but there had been no re-- duction in the net debt--a situation which apparently the Auditor had overlooked. Mr. Brown, he said, was just out $32,000,000 on "the true debt--picture." Virtuailly, the deobt-- reduction was onlyvy . some $A00,000, In resorting to a "half--truth--the worst sort of deception." he further charged, Mr. Brown had not reflect-- ed any credit on the hnpnorable office which he held or the Govern-- ment condoning such action. Clashes With Hepburn. Opposition Leader Macaulay elec-- trified the draggy close of the Leg-- islature Budget debate yesterday with the charge that Provincial Auditor Gordon A. Brown had "de-- liberately misled the public' when he had certified in Government-- prepared and paid--for newspaper advertising that at the end of the fiscal year, March 31, 1937, the Hep-- burn Administration had reduced the debt of Ontario by some $32, NET FIGURE IGNORED Coercion Claim Denied: Amendment to Supply Motion Defeated Tempers flared momentarily, at one stage in the blast loosed by Mr. Macaulay, when he point--blank accused Mr. Hepburn, in his added cavacity of Treasurer, of "coercing" the Auditor into certifying the debt statement. "I'm going to ask my honorable friend to withdraw," snapped the Prime Minister, jumping to his feet. "I've noever interfered with the Provincial Auditor, and I have never instructed him in any way In the statement he made. His position is analogous to the Re-- ceiver--General's." "I accept the Honorable the Prime Minister's statement," re-- plied Mr. Macaulay, "but I want to say that when the Auditor in-- cluded the gross debt in his state-- ment, but did not include the net debt, he deliberately misled the people of Ontario." _ _ _ The Opposition Leader's un-- scheduled brief but belligerent ad-- Dealing with the Brown state-- ment, Mr. Macaulay declared that it all harked back tn the East Hastings by--election when Mr. Hep-- burn had campaigned to some ex-- tent on the debt reduction he had achieved, and his figures of that time had been challenged by the Conservatives. In May of the fol-- lowing year, true to his promise, '\the Government had presented, \over Mr. Brown's signature, what ]purported to be the "true picture" | of the debt. But it was not a com-- plete financial statement of the Province's assets and liabilities, and Mr. Brown must have known it when he signed it, said he. |__"I want my honorable friend to | withdraw t hose _ insinuations," . Clicked the Premier. "I have never | interfered with the work of the | Provincial Auditor as I said before, [and, as a matter of fact, I allowed him to select his employees." dress paved the way tor nis intro-- duction of an amendment to the Supply motion, condemning the Government for failure to imple-- ment its pre--election promises of reducing the public debt and the costs of Government. The House defeated the amendment on a registered vote of 63 to 21, and on the same division carried the main motion. Prior to embarking upan his audi-- tor argument, the Opposition Leader challenged the tendency of the Gov-- ernment to create "hundred--million. dollar budgets." When the Liberals came into office, he said, the annual revenue and expenditure, includ-- ing a relief bill of some $20,000,000, amounted to between $70,000,000 and $75,000,000. _ In four short years it had jumped close to the century mark. "Let me warn my honorable friends," said he, "that they would be well advised to put their ship of state in order instead of setting full sail into the stormy seas ahead. The hundred million dollars you collect come from taxes. Get it out of your head that they don't represent taxes. Call it profit from liquor, highways receipts or what you like, it comes out of the people. And vyou can't go on increasing your budgets with-- out increasing taxation. Sooner or later the people will call a halt and you'll have to pay up for your spending. Apparently your policy is like that of a former noted Trea-- surer, 'We had the money, so we spent it.! That's the only explana-- tion 1 can offer for the budgets you are turning out these days." Held Not Complete. "I don't blame the Prime Min-- ister if he can get a statement of that kind from the Auditor," said Mr. Macaulay. "Well," said Mr. Macaulay, "I cer-- tainly blame the Auditor for creat-- ing the situation of which I am critical." c What Mr. Brown "forgot to ive" the public, in his statement, was that while the gross debt had been | reduced the assets of the Province | had also been reduced, he declared.. Hydro, he said, had paid off out--| standing liabilities to the Province.' There was, as a result of that trans--| action, no change in Ontario's posi-i tion insofar as the net debt was concerned. The Financial Post of last December, he said, had analyzed the debt situation, and he would challonge the Premier, he said, to get a statement from the Provincial -- Auditor, contradicting the accuracy of that journal's analysis. AP\'\ The Hepburn Government's one-- mill subsidy to municipalities was declared to be unfair and inequit-- able by G. H. Doucett (Cons., Lan-- ark), when he submitted a fairer distribution of public monevy could | be effected if the Government took |over a greater portion of the pri-- 'mary education costs. At this juncture Mr. Hepburn in-- formed the House that Mr. Brown was critically ill--a fact of which Mr. Macaulay was unaware, and over which he expressed sincere re-- gret. No statement of any sort could be obtained from Mr. Brown, the Premier said. If the Financial Post was right, said the Opposition Leader, revert-- ing to his argument, then the Audi-- tor was wrong. "I'd do as you did in 1935, when you came into office," said Mr. Mac-- aulay. '"Then you lined up all the obligations you could find, piled them together, and said, 'There's the mess the former Government left on our doorstep.' Now, when the shoe is on the other foot and it begins to pinch, you don't, and there's never a word about the as-- sets and liabilities. You try to paint as good a picture as you can for yourselves." "Would you be prepared to ac-- cept the word of the Deputy Pro-- vincial Treasurer," asked Mr. Hep-- burn, "that the certified statement of Mr. Brown's in the papers was accurate?" What did the Opposition Leader want the Government to do with capital repayments such as Hydro had made, demanded the Premier. "'I'm not saying it was inaccur-- ate," Mr. Macaulay retorted. "I'm saving it was only half the picture. It's only half the truth, and a half truth is the worst sort of decep-- tion." "T'll tell my honorable friend what I'll do," declared Mr. Macaulay. "T'd like him (Mr. Cotnam) to show me where the Financial Post analysis of Dec. 4, 1937, is wrong. Then I'll debate this matter further." Dr. Welsh took the opportunity of criticizing the sweepstake motion in his address on the Budget de-- bate, claiming that sweeps would cut off private endowments, and would discourage the local interest and support that was essential to the good management of any hos-- pital. With an expenditure of $15,000,000 facing the Department of Health, it was no wonder, in the opinion of Dr. Harold Welsh (Cons., East Hast-- ings) that Premicr Hepburn was attempting tn bolster revenues by the uncertain returns of sweep-- stakes. Deputy Treasurer, Mr, Cotnam? Mr. Hepburn pressed. "Will you accept the word of the LHJ