III HISTORY LEADING TO APPOINTMENT OF COMMISSION
The proposed Hydro System was being slowly developed while the previous Government was in power. Certain investigations had been made and certain moneys spent thereon. Bonds of the Hydro had pursuant to an Order-in-Council passed on August 8th, 1919, been issued for $11,360,363, re Port Credit to St. Catharines Railway.
Following the change of Government, on March 3rd, 1920, Mr. Drury wrote to Mr. G. T. Clarkson, the Auditor, a letter, asking him to inform him, in a brief manner as to:
"(1) The state of the affairs of each of the systems and companies controlled or operated by the Hydro-Electric Power Commission of Ontario.
"(2) Approximate amount of moneys which must be paid by the Province within the next two years, and be loaned to the Commission in order to allow it to complete works undertaken by it, and now in course of construction, and to pay debts which become due within that period."
On March 18th, 1920, the Premier wrote to Sir Adam Beck, referring to his letter to the auditor and enclosing a copy thereof, and asked the Hydro-Electric Power Commission to let him know the estimated cost of construction of the Chippawa Power Canal, and when it was expected the works would be completed; what the condition with respect to the water supply to the Canal was, and the amount of power it was proposed that the Chippawa Works should develop. He also expressed a desire to receive a report from the Commission as to the situation of the Hydro-Electric Radial Railways, with particulars of the line which the Commission contemplated constructing and operating; the estimated cost of construction and operation of the same; and also to what extent it was believed expenditures would be made in the connection, within the next year or two.
On March 19th, 1920, the Auditor replied and reported to the Premier in a document of considerable length. At page 25 appears the following:
"In your letter you state that the Government is sympathetic to the Commission and you request me to express my opinion as to whether there are any reasons why support cannot be continued and extended to the Commission with benefit to the municipalities and the Province. In reply thereto I beg to report that there is, in my opinion, every reason to justify the Government in according a full measure of support to the Commission in its efforts to develop and utilize the power resources of this Province, particularly in view of the heavy advances in the cost of coal and other fuel which have taken place in the last year or two and the further increases which appear likely to occur in the near future. In providing such support to the Commission, however, there are, in my opinion, certain conditions to which the Province must pay regard and to which the Commission and the municipalities should also give attention in their own interests.
"The most pressing matter is the ability of the Province to raise funds under present conditions for its own requirements and the purpose of other developments in view and at the same time continue to extend credits to the Commission so as to permit it to enter upon projects of magnitude. At the present time the debt of the Province is about $100,000,000 of which approximately $40,000,000 has been advanced in cash and securities to the Commission, while $10,000,000 in cash and securities has been paid for the purchase and use of the Central Ontario System which is owned by the Province and operated on its behalf by the Commission. The Province has in addition, guaranteed other securities to the amount of about $8,300,000 to permit the Commission to purchase the Ontario Power Company and certain other minor properties . . . . .
". . . . . Based upon estimates of the Commission and its Engineers upwards of $29,000,000 will now be required from the Province in cash within the next two years to complete works in course of construction and meet maturing liabilities, while a further $25,000,000 to $26,000,000 may require to be provided by the sale or issue of bonds of the Commission — guaranteed by the Province — for the purpose of Hydro-Electric Railway Lines. With present abnormal costs it is stated that the Commission may find it to be against the interests of the municipalities to proceed too
