Page:Sutherland Commission report (hydro-electric railways).djvu/17

Rh It appears from the correspondence and statements recently received that on February 23rd, 1920, the Secretary of the Commission wrote the Treasurer of the Province that the debentures required had been prepared, and asked that they be endorsed as authorised by the Order-in-Council of August 8th, 1919. The Secretary also said:

"'The purchase of rights of way has been going on for some time, and the Commission would be obliged if the matter of endorsing bonds would receive early attention, so that the necessary funds may be secured through the depositing of bonds to take care of the disbursements for right of way purchase and preparation for the construction of the lines.'"

It also appears from said correspondence that the total amount of bonds to be issued was $11,360,363, and as already mentioned it is said to have been represented to the present Government that certain commitments had been made by the Commission, and certain advances secured by the Bank, that it was necessary that guarantee of these bonds should be duly executed in order that the Commission should be in a position to meet the obligations it had incurred.

It also appears therefrom that the Government consented to the guarantee, for the purpose of protecting the Commission against commitments already made, and it was not intended that any more bonds would be issued than were necessary for that purpose. On various dates from March 10th, 1920, until May 20th, 1920, the Assistant Treasurer, Mr. Sproule, as authorised by the Order-in-Council, endorsed the guarantee of the Province for the issue of the bonds, and delivered them to the Hydro-Electric Commission to the extent of $1,200,000.

It further appears therefrom that at the present time (July 13th, 1921) "The obligation of the Province in respect to the Toronto, St. Catharines Railway, consists of the guarantee on its part of $11,360,363 of Hydro Radial bonds of which $10,160,363 are held by the Commission not fully executed (said to be unsigned and unsealed)" "And the remaining $1,200,000 are pledged to the Bank of Montreal for advance of $200,000. No cash advances have been made by the Province for the purpose of the railway."

Re Toronto to Port Credit Radial Railway.

The correspondence further disclosed that expenditures have been made in connection with this railway, to the amount of $683,286.74, on authority of a letter from Sir William Hearst, former Premier, "that if the Commission would obtain resolutions from the municipalities interested and request the Government to endorse and pass all amendments to the existing legislation which might be necessary to validate," etc. .. .. .. .. .. "that on the basis of these assurances, with the resolutions of the municipalities in its possession, Commission acquired certain rights-of-way and made other expenditures which up to Oct. 31st, 1920, amount to said sum of $683,286.74, that on that date bonds of six municipalities to the amount of $5,109,573 stood deposited with the Commission: that no bonds had been issued by the Commission neither had the Province entered into any guarantee with respect to the line." "The $683,286.74 expended by the Commission upon/ the line can, however, fairly be said to be part of the funds advanced by the Province to the Commission under appropriations made for the purpose of the different power systems and undertakings operated and controlled by the Commission."

Re Toronto and Eastern Railway $ 43.946.40 St. Catharines & Niagara Falls Railway 25,984.29 Hamilton, Gait, Elmira & Guelph Railway 36,482.06 Hamilton, Brantford, Woodstock and London Railway 17,617.34 $124,087.09

The above amounts expended by the Commission in respect of such railways, according to the letter of Mr. Clarkson.. "were made out of the funds held by it for the benefit of power undertaking, and without any apparent legal authority. No bonds had been issued by the Commission in respect to such railways or guarantees given by the Province." The remainder of Mr. Clarkson's letter shows how incomplete as to necessary by-laws, etc.; matters were and are. The letter contains this further statement: