Hon. W. R. MOTHERWELL (Minister of Agriculture) moved:

That the organization and establishment of the permanent positions on the staff of the House of Commons, as approved by the house on the 14th June, 1929, be amended as follows:

Committees and private legislation branch: for "4 committee clerks" substitute "5 committee clerks;" delete "1 clerk of petitions."

Debates reporting branch: for "three assistant parliamentary reporters" substitute "4 assistant parliamentary reporters;" add "1 assistant parliamentary reporter (French)."

Mr. SPEAKER:

These appointments will be made by the Civil Service Commission under recommendation of the Board of Internal Economy.

Mr. ROBERT GARDINER (Acadia):

Mr. Speaker, I desire to speak to a question of privilege and to refer to certain statements reflecting on my honour and integrity both as a member of the house and as a private citizen, which are contained in a newspaper, the Toronto Daily Star. I hold in my hand a copy of the Toronto Daily Star of Friday, May 23, 1930. The heading of the article is as follows:

R. O. Sweezey Assails Beauharnois Attack. Electioneering Play, Power Head Styles Demand for Probe.

Special to The Star by Staff Reporter. Ottawa, May 23. In a statement to The Star to-day, R. 0. Sweezey, president of the Beauharnois Power Corporation described the attack on Beauharnois in the house yesterday as a crude electioneering play that would deceive no honest or intelligent Canadian.

"I'm afraid," he said, "that Mr. Gardiner has been utterly deceived by a group who have

confused him with a jumble of distorted facts and deliberate falsehoods. He has shown such utter disregard for the truth that I should scarcely know where to begin in an attempt to convince him that he has been led into a silly lot of misstatements.

Intelligent investors in this country, however, know full well that last night's kind of performance in parliament is usual on the eve of a general election.

I assure all fair-minded Canadians that our undertaking is sound, honest and sincere. Ninety-nine per cent of Beauharnois Power stock is owned in Canada by Canadians, and there are several thousand shareholders.

Personally, I am very busy with engineering development work, and would as soon try to explain the Einstein theory to an Eskimo as to enter into a controversy with some people."

In the first place I want to say that Mr. Sweezey's statement, as above reported, that I have been deceived by a group who have confused me by a jumble of distorted facts and deliberate falsehoods, is utterly untrue and without foundation in fact. I have not consulted nor have I been consulted by any group, either financial or political, in reference to the Beauharnois project, and the statements made by me in the house were the result of private investigations by myself and certain of my colleagues. His statement that this attack was purely "electioneering play" on my part is not only false but deliberately misleading.

I desire to enlighten him as to both the sources of my information and the reasons which prompted my bringing this matter to the attention of the house. In doing this I am also inspired with the desire to place the facts fairly and impartially before the house and the people of the Dominion of Canada, so that they will be able to decide impartially and fairly as to whether or not what I said in the house in connection with Mr. Sweezey and the Beauharnois project was justifiable or not. In view of the statement that Mr. Sweezey made in the dispatch just quoted, namely, that he does not know where to begin in denying my statements, I propose to give him an opportunity to start by going over the main points of last Thursday's discussion in the house.

The order in council dated Friday, March 8, 1929, P.C. 422, is authority for the statement made in the house respecting the incorporation of the Beauharnois Light, Heat and Power Company, as well as authority for the statement made in connection with the securing of the lease from the province of Quebec and the application made by the

2702 COMMONS

Beauharnois Corporation-Mr. Gardiner

Beauharnois Power Corporation Limited, for approval of its plans by the Dominion government. Surely Mr. Sweezey does not hope successfully to deny the facts mentioned in this order in council, although these are the very facts that are denied by him in the newspaper despatch above indicated. Apparently his conception of the mentality of the members of the house and of the Canadian people is not very flattering, but it is quite consistent when one realizes what he has attempted to perpetrate upon an unsuspecting public. My statement that the Robert interests had to be acquired is founded upon a statement found in a letter signed by Mr. Sweezey himself and addressed to Mr. J. Alderic Raymond, brother of Senator Donat Raymond and the hon. member for Beauharnois (Mr. Raymond). I placed that letter on Hansard last Thursday and hon. members may read it there so that the time of the house may be saved. Further Mr. Sweezey has admitted under oath that he personally purchased the Robert interests referred to in this letter, which interests were essential to this undertaking. If Mr. Sweezey has forgotten about giving such evidence under oath, he can refresh his memory by reference to a transcript of the evidence given by him in connection with this matter.

The statements made in the house that the company was over-capitalized are based on statements contained in a document called " A Statement in Lieu of Prospectus," which was prepared and issued by the Beauharnois Power Corporation Limited, of which he is now president, and filed in the office of the Secretary of State, Ottawa. I have the statement under my hand and I propose to take the time of the house to put it on Hansard in order that hon. members may know that when I was dealing with the capitalization of this company last Thursday I was taking the facts from the statement of the company itself. It is headed first of all, "Dominion." Then "The Companies Act." It continues: Statement in Lieu of Prospectus Filed by Beauharnois Power Corporation Limited

Pursuant to section 52 of The Companies' Act presented for filing by McGiverin, Haydon & Ebbs.

1. The nominal share capital of the company. Five management preferred shares without nominal or par value;

1,799,995 class A common shares without nominal or par value;

3,200,000 class B non-voting common shares, without nominal or par value.

- .

Provided, how'ever, that the said shares without any nominal or par value may be issued for such consideration as may from time to time be fixed by resolution of the board of directors of the company, not exceeding in the aggregate the sum of $50,000,000, or such greater amount as the directors may deem expedient and as shall be authorized from time to time by the Secretary of State of Canada.

2. Divided into-[DOT]

(See answer to one above.)

3. Names, description and addresses of directors or proposed directors.

Osmond F. Howe, barrister-at-law, Trust building, Ottawa, Ont.

Duncan K. MaeTavish, barrister-at-law, Citizen building, Ottawa, Ont.

Belle Fraser, stenographer, Ottawa Electric building, Ottawra, Ont.

Lyla Brennan, stenographer, Ottaw-a Electric building, Ottawa, Ont.

Edythe H. O'Malley, stenographer, 115 Sparks street, Ottawa, Ont.

Bessie Conniffe, stenographer, 115 Sparks street, Ottawa, Ont.

Lillian Dell, stenographer, Trusts building, Ottawa, Ont.

Elsie M. Burritt, stenographer, Ottawa Electric building, Ottawa, Ont.

Gwen Gunderson, stenographer, Trusts building, Ottawa, Ont.

Kathleen Havey, stenographer, Ottawa Electric building, Ottawa, Ont.

M. H. Kelly, stenographer, Ottawa Electric building, Ottawa, Ont.

4. Minimum subscription (if any) fixed by letters patent supplementary letters patent, or by-laws on which the company may proceed to allotment.

None fixed.

5. Number and amount of shares and debentures agreed to be issued as fully or partly paid-up otherwise than in cash. The consideration for the intended issue of those shares and debentures.

No shares or debentures have as yet been agreed to be issued other than the 5 management preferred shares and 22 class A common shares subscribed for by the applicants for the letters patent all of which have been paid in cash.

6. Names and addresses of vendors of property purchased or acquired, or proposed to be purchased or acquired by the company. Amount (in cash, shares and debentures) payable to each separate vendor. The Beauharnois power syndicate, an unincorporated syndicate, organized and existing under and in virtue of an agreement made at the city of Montreal on the 4th day of April, 1928, by and between F. Stuart Molson and others of the first part and Marquette Investment Corporation of the second part whose address is Yorkshire Insurance Building, St. James Street, Montreal, Quebec. It is intended that the company shall enter into an agreement with the said the Beauharnois Power Syndicate and Marquette

Beauharnois Corporation-Mr. Gardiner

Investment Corporation, (a company incorporated under the Quebec Companies' Act) as depository providing for the acquisition by the company and/or its nominees upon the terms and conditions therein set out of the undertaking and assets of whatsoever nature of the syndicate (except any unpaid balances and any uncalled balances for which the syndicate members may be liable to the syndicate in respect of the part interests of the syndicate held by them respectively).

The intended consideration for such acquisition shall be

(a) The sum of $4,750,000 payable to the syndicate by the company at the time and upon the conditions set out in the said agreement;

(b) The assumption by the company of the liabilities and obligations of the syndicate (except its liabilities and obligations to its members as such) and

(c) An undertaking by the corporation to defray the expenses (to an amount not exceeding $10,000) of the winding-up of the affairs of the syndicate, and the distribution of its assets among its members.

The said agreement further provides for the subscription by the said syndicate at $1 per share for one million class A common shares of the company, such shares to be allotted and issued to the nominees of the syndicate, and to be paid for at the time of the transfer and delivery of the undertaking and assets of the syndicate to the company and/or its nominees, and the payment of the said sum of $4,750,000 by the company to the syndicate.

The liabilities of the syndicate assumed by the company as stated in suib-paragraph (b) will include a liability to pay $20,000 and

21,000 class A common shares of the company to William Henry Robert and Sarah Mary Robert, both of 1452 Bishop street, Montreal, Joseph A. Robert of 371 Wilbrod street, Ottawa, and Edmund A. Robert, Linton apartments, Montreal, the vendors of the said syndicate of certain of the assets to be acquired by the company as aforesaid.

Names and addresses of vendors of property purchased or acquired or proposed to be purchased or acquired by the company.

Amount (in cash, shares and debentures) payable to each separate vendor.

7. Amount (if any) paid or payable (in cash or shares or debentures) for any such property, specifying amount (if any) paid or payable for goodwill.

(See answer to 6 above.)

8. Amount (if any) paid or payable as commission for subscribing, or agreeing to subscribe, or procuring or agreeing to procure subscriptions for any shares or debentures in the company, or rate of the commission.

Nil.

9. Estimated amount of preliminary expenses, $75,000.

10. Amount paid or intended to be paid to any promoter.

Consideration for the payment.

(See answer to 6 above.)

11. Dates of, and parties to, every material contract (other than [DOT] contracts entered into in the ordinary course of the business intended to

be carried on by the company or entered into more than two years before the filing of this statement.

No contracts have as yet been entered into by the company. See however, answer to 6 above. It is also intended that the company shall enter into an agreement with Newman, Sweezey and Company, Limited, a company incorporated under the laws of the Dominion of Canada, and The Dominion Securities Corporation, Limited, a company incorporated under the laws of the Dominion of Canada providing for the creation and issue of thirty-year 6 per cent collateral trust sinking fund bonds of the company to an authorized principal amount of $30,000,000 as set out in such agreement and providing for the sale to Newman, Sweezey and Company, Limited, and The Dominion Securities Corporation, Limited, of $30,000,000 in par value of the said bonds together with 770,000 class A common shares of the company for the price of $27,000,000 and accrued interest on the said bonds to the date of delivery all upon the terms and conditions set out in the said agreement.

12. Time and place at which the contract or copies may be inspected.

Names and addresses of the auditors of the company (if any).

When the intended contracts above mentioned have been entered into the copies may be inspected at the offices of the company, Drummond building, Montreal, during reasonable business hours.

No auditors have as yet been appointed for the company.

13. Full particulars of the nature and extent of the interest of every director in the promotion of or in the property proposed to be acquired by the company, or where the interest of such a director consists in being a partner in a firm, the nature and extent of the interest of the firm, with a statement of all sums paid or agreed to be paid to him or to the firm in cash or shares, or otherwise, by any person either to induce him to become, or to qualify him as a director, or otherwise for services rendered by him or by the firm in connection with the promotion or formation of the company.

Nil.

14. Whether the by-laws contain any provisions precluding holders of shares or debentures receiving and inspecting balance sheets or reports of the auditors or other reports.

Nil.

Dated at Ottawa, this 30th day of September, 1929.

Witness:

Daniel Baker.

(Sgd.) Osmond F. Howe,

Duncan K. MaeTavish, Belle Fraser,

Lyla Brennan,

Edythe H. O'Malley, Bessie Conniffe,

Lillian Dell,

Elsie M. Burritt,

Gwen Gunderson, Kathleen Havey,

M. H. Kelly.

That, Mr. Speaker, is the statement which was filed in. the office of the Secretary of State

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Beauhamois Corporation-Mr. Gardiner

in lieu of a prospectus of this company. It sets out very clearly the claim which I made last Thursday when I dealt with the capitalization of the company.

The valuation of the shares of this corporation is fully dealt with in a statement described as an "Analytical study of values of the Beau-harnois Corporation" by Robert Dodd and Company, Incorporated, dated March 31, 15)30, which gives the value of the class A and class B shares at the end of a five-year period This valuation is based on an earning power of $4.25 a share. The study goes further and states at the end of a ten-year period these shares will earn around $10 per share, so that the value of the shares will then be in the neighbourhood of $141 per share. All that is fully and carefully explained.

I hold in my hand a document issued by the Robert Dodd and Company Incorporated, investment bankers, Royal Bank building, Montreal. It is headed "Beauhamois Power Corporation-A comprehensive analytical study of values." I quote one paragraph:

Over $4 per Share

It will be observed that our analysis discusses in circumstantial detail the expectations of this 30-year bond-share-warrant investment over a five year period, when 1,000,000 h.p. should be in operation; and we show with that production unit, which is 50 per cent of the final objective, an earning power equal to slightly over $4 a share on the combined common stock outstanding.

With this $4.25 per share earning power on half the projected development, we believe a price of $60 for the stock to be quite conservative, without giving consideration to the investment momentum which will gather force when the public realize the company's industry- building characteristics in the territory adjacent to the Beauharnois operations.

We also give due consideration to the fact that it will be several years before dividends are declared, but in that respect it is well known that market increment does not wait for dividend declarations-and precedent tells us that prospective discounting of events is the astute investor's road to Eldorado.

The following tabulation considers the prospective market equity of the 30-year bond and its share attachments, if all securities, bond and shares, are held for permanent investment at a market price of, say, $60 a share for the

common stock.

A $1,000 bond cost $ 1,000

5 shares valued at $60 300

Increment on 20 shares at $25.. .. 500

Market value of the $1,000 investment $ 1,800

On this tabular calculation, we find what is equal to an 80 per cent increase in the capital investment, on a bond which returns a regular 6 per cent yield during the entire period of increment growth.

Then we have another paragraph, Mr. Speaker, that is important:

As we have shown in this analytic study, there is every reason to anticipate the progressive sale of the total projected 2,000,000 horse-power, as and even before each 500,000 units is completed. Therefore, we would estimate, within ten years, an annual gross revenue of at least $40,000,000. This will entail a mortgage capitalization of well under $200,000,000, which, at, say, the high average of 6 per cent, would require $12,000,000 as fixed charges, with $4,000,000 of over-all operating costs, resulting in a net surplus of $24,000,000, equal to $10 a share on the combined "A" and "B" stock.

While it is perfectly true that this analytical study is not an official publication by Mr. Sweezey, the fact nevertheless remains that in a prospectus issued by the same Robert Dodd & Company Incorporated, and which is signed by Mr Sweezey himself, the value of "B non-voting shares" is fixed at $35 a share and the bondholders are given the privilege of purchasing class B shares at that figure.

Mr. ROSS (Moose Jaw):

Mr. Speaker, I

rise to a point of order. Is an hon. member allowed to bring up a question again that has already been debated on a motion for adjournment of the house to discuss a matter of urgent public importance? This is not a question of privilege; it is a question of special privilege.

Mr. SPEAKER:

This is a question of

privilege and Bourinot says at page 303:

In the Canadian house questions of privilege take a wide range, but it may be stated in general terms that they refer to all matters affecting the nights and immunities of the house collectively, or to the position and conduct of members in their representative character. In this category may be placed: motions touching the seat or election of members; reflections or libels in books and newspapers on the house or members thereof, or any of its committees; forgery of signatures to petitions; motions for new writs; questions affecting the internal economy or proceedings of the house;

Bourinot says also that great latitude is given in the house when the question of privilege is raised. But the question of libel should be dealt with in a brief way so as not to take up the time of the house unduly. The moment the hon. gentleman has denied the statement and explained why it is not true according to his own interpretation he should not proceed much further. I understand the hon. gentleman is practically through.

Mr. GARDINER:

Not quite, Mr. Speaker, I will not take very many more minutes.

Mr. SPEAKER:

Very well.

Beauhamois Corporation-Mr. Gardiner

Mr. GARDINER:

Mr. Speaker, it is rather remarkable that any hon. member should question my right after I had read this statement in the press despatch:

"I am afraid," he said,-

That is, Mr. Sweezey.

-"that Mr. Gardiner has been utterly deceived by a group who have confused him with a jumble of distorted facts and deliberate falsehoods."

I am trying to show, Mr. Speaker, that every word I said was absolutely true, and I am going to proceed. The prospectus is so worded that one is forced to the conclusion that the bondholders are getting more or less favoured treatment in respect to class B shares, and that if the general public were allowed to purchase them $60 would likely be the amount that would be asked for them.

The charge made in the house that this company was violating the terms of its lease and order in council is founded on and substantiated by the prospectuses signed by Mr. Sweezey and issued by Wood, Gundy & Company Limited, Dominion Securities Corporation Limited, Robert Dodd & Company Incorporated, and a number of other brokerage houses both in Canada and in the United States.

In these prospectuses it ds made perfectly clear that the plans of the company make provision to take the whole flow of .the river through the company's canal and that work is being done under these plans with that end in view and money being spent therefor. All clearly in violation of the terms of its lease and of the order in council.

I have in my hand a copy of this prospectus issued by Robert Dodd & Company Incorporated, investment bankers, the Royal Bank Building, Montreal. I realize, Mr. Speaker, that it is getting late in the session and desirable that the house should conclude its business as soon as possible. Therefore if I have the permission of the house I will not read the prospectus, but if I have not that permission, then I must proceed to read it, because in it is contained many of the allegations which I made last Thursday, and I am here, sir, to protect my honour. May I have the permission of the house to file this with Hansard?

Carried.

No.

Mr. SPEAKER:

2706 COMMONS

Beauharnois Corporation-Mr. Gardiner

mon Shares (no par value) of Beauharnois Power Corporation Limited, on the basis of twenty such shares in respect of each One thousand dollars ($1,000) of Collateral Trust Bonds. Such Warrant will be non-detachable (otherwise than by the Trustee at the time of its surrender) except in the event of the Bond being redeemed, in which case it will be detachable by the Trustee and remain in force until October 1, 1937.

In the event of provision for distribution of its assets as an entirety or substantially as an entirety, sixty days' notice may be given by the Corporation within which the stock purchase right conferred by the Warrant may be exercised, and on the termination of such notice such right shall cease. But any Class B Common Shares so purchased on or before such termination shall be entitled to participate in such distribution of assets. The Corporation reserves the right to increase the amount of its authorized or outstanding shares and otherwise change its capital structure, but in the event of subdivision or consolidation of its Class B Common Shares, or their conversion into shares of another kind, the rights conferred by the Warrant will be correspondingly adjusted. All as will be more fully set out in the Stock Purchase Warrant.

These Bonds are offered for sale when, as and if issued and received by us and subject to the approval of Messrs. Meredith, Holden, Heward & Holden, on behalf of the Corporation, and Messrs. Blake, Lash, Anglin & Cassels on behalf of the Bankers, as to the incorporation and organization of the Corporation, the issue of its stock and the creation and issue of the Bonds, and of Aime GeoflFrion, Esq., K.C., as to the franchise and water rights of Beauharnois Light. Heat & Power Company and the contracts for sale of power already entered into by it.

Price: 100 and accrued interest It is expected that Trustee's interim certificates or receipts will be ready for delivery on or about December 17, 1929 Robert Dodd & Company Incorporated Investment Bankers The Royal Bank Building Montreal

Statements contained in this circular, while not guaranteed, are based upon information and advice which we believe accurate and reliable

Letterhead-Beauharnois Power Corporation Limited

Montreal, December 2, 1929 Newman, Sweezey & Company,

Limited,

The Dominion Securities Corporation,

Limited,

Wood, Gundy & Company, Limited.

Dear Sirs:

Referring to the purchase of $30,000,000 Thirty-year 6% Collateral Trust Sinking Fund Bonds of ^ Beauharnois Power Corporation Limited, I give you the following information: Beauharnois Power Corporation Limited has been incorporated under the laws of the Dominion of Canada and is to own or control all the outstanding shares of Beauharnois Light, Heat and Power Company (which is carrying on the Beauharnois hydro-electric development) and of its associated companies, Beauharnois Land Company, Beauharnois Transmission Company and Beauharnois Construction Company.

Beauharnois Light, Heat and Power Company

Beauharnois Light, Heat and Power Company has acquired under a lease from the Province of Quebec extending to the year 2003, and under authorization from the Governments of the Dominion of Canada and the Province of Quebec, water power rights on the St. Lawrence River about twenty-five miles above the City of Montreal. Its power house, in which it is proposed to install equipment capable of producing 500,000 horse power, will be west of the Town of Beauharnois, on Lake St. Louis. This development involves the construction of a canal approximately fifteen miles in length to the south of the River St. Lawrence, running from Lake St. Francis to Lake St. Louis. Complying with the conditions imposed by the Dominion Government, the canal has been designed so that if the St. Lawrence Deep Waterways project is proceeded with, the canal can be used jointly for navigation and power purposes. In addition to the above water power rights the Beauharnois Light, Heat and Power Company has entered into a contract with Montreal Cotton Company providing for the acquisition of the latter's rights to divert water for power purposes from the St. Lawrence River at Lake St. Francis. In the opinion of the Company's engineers, the water available from the above sources when diverted through the canal will generate 500,000 horse power equivalent to 7,500,000 kilowatt hours per day. Between Lake St. Francis and Lake St. Louis the St. Lawrence River drops eighty-three feet in a series of rapids, making this section of the River one of the most important water power sites in Canada, being capable of developing about 2,000,000 horse power. The average low water flow of the River through this section is approximately 220,000 cubic feet per second. Of this flow approximately 120,000 cubic feet per second is presently allotted to power developments, which amount includes the quantity allocated to the Beauharnois Light, Heat and Power Company. It is estimated that the unallocated balance of about 100,000 cubic feet per second, if passed through the Company's canal, would permit installation of approximately 1,000,000 additional horse power. The Company's proposed development, in the opinion of its engineers, is the most efficient method of utilizing the entire drop in this section of the River. In view of the above provision is made in the plans and considerable work is now being done with a view to installing further units if additional water becomes available. After the completion of the present 500,000 horse power installation it is estimated that further units can be installed at an average cost of less than $65 per horse power. The present plans contemplate that 200,000 horse power will be available by October 1, 1932, at which time the Company will commence delivering the first blocks of power under contracts already entered into, and that the total of 500,000 horse power will be available by October 1, 1935.

Engineering

The plans and estimates of the present development have been prepared or approved by the following engineers on behalf of Beauharnois Light, Heat and Power Company.

Frederick Baylis Brown, Esq., Montreal, Que. Thomas H. Hogg, Esq., Toronto, Ont.

William S. Lee, Esq., New York City.

Beauhamois Corporation-Mr. Gardiner

These plans and estimates have been concurred in by Albert S. Crane, Esq., consulting engineer of New York City, acting on behalf of the Bankers.

Capitalization

Beauhamois Power Corporation. Limited (Upon completion of present financing)

Authorized To be issued

Collateral Trust Bonds

(this issue) $30,000,000 $30,000,000

Management Preferred Shar es (no par value). 5 5

shares shares

Class A Common Shares (no par value) 1,799,995 1,791,000

shares shares

Class B Non-Voting Common Shares (no par None

value) * 3,200,000

shares

*600,000 Class B Non Voting Common Shares to be available for purchase under Stock Purchase Warrants attached to the Bonds.

The Management Preferred Shares above mentioned confer on the holders the exclusive right for a period of ten years from September 17, 1929, to elect and remove the Directors of the Corporation and otherwise conifer in respect thereof the same rights as if each Management Preferred Share were a Class A Common Share. The Management Preferred Shares at the end of the ten-year period will automatically be converted into Class A Common Shares, but, with the consent of all the holders thereof, may be so converted prior to that time. These shares have been provided to ensure continuity of direction and policy during the important initial period covering the construction and early operation of the development of Beau-harnois Light. Heat and Power Company, and will be held between Hon. W. L. MeDougald, M.D.; R. O. Sweezey, Esq.; and A. F. White, Esq.

Class B Non-Voting Common Shares do not carry the right to attend or vote at meetings, but otherwise are entitled to the same righs as Class A Common Shares in all respects. Beauhamois Light, Heat and Power Company

Proposed Bond Issue

It is proposed that Beauhamois Light, Heat and Power Company shall issue in due course bonds, debentures or other securities in such principal amounts (estimated at $50,000,000) as its Directors may from time to time consider sufficient, together with the monies made available to it from the proceeds of the Collateral Trust Bonds, to complete the installation of five hundred thousand (500,000) horse power. The above-mentionned bonds, debentures or other securities will not constitute a closed issue and the Company will be permitted to issue further securities as more specifically set out below.

Power Contracts

Beauhamois Light, Heat and Power Company has entered into contracts extending beyond the maturity of these Bonds with The HydroElectric Power Commission of Ontario for the sale of 256,000 horse power and with Montreal Light, Heat and Power Consolidated for the sale of 150,000 horse power. The first blocks of power under these contracts are to be taken on October 1, 1932, with increasing quantities each year, the full amount to be taken at the end of five years. From past experience it is anticipated that, owing to the rapidly increasing 2419-1711

demand for power, the entire amount of power deliverable under the above contracts will be required well before the end of the five-year period. These two contracts dispose of 400,000 horse power of the 500,000 horse power now being installed, and it is expected that the balance of available power will be under contract before the plant is completed. The construction plans for the development have been prepared with a view to making available in the most economical manner the amount of power estimated to be required each year.

Earnings

It is estimated by the engineers of Beauhamois Light, Heat and Power Company that upon the sale and delivery of the 500,000 horse power now being installed, the consolidated annual earnings of Beauhamois Power Corporation Limited and its Subsidiary companies (after providing for all operating expenses) available for interest and Sinking Fund on the First Mortgage Bonds of Beau-harnois Light, Heat and Power Company and on these Collateral Trust Bonds will amount to over. $6,200,000 It is estimated that annual interest and sinking fund requirements on the securities of Beauhamois Light,

Heat and Power Company expected to be issued in connection with completion of the 500,000 horse power,

now being installed, will be.. .. $2,750,000

Balance available for annual interest and sinking fund on these Collateral Trust Bonds $3,450,000

Annual interest and sinking fund requirements on these Collateral Trust Bonds $1,950,000

The revenue from the sale and delivery of

400.000 horse power now contracted for by the Hydro-Electric Power Commission of Ontario and Montreal Light, Heat and Power Consolidated, will be more than sufficient to pay all estimated operating expenses of Beauhamois Light, Heat and Power Company, interest and sinking fund on the First Mortgage Bonds of the Company expected to be issued in connection with the installation of 500,000 horse power as set out above, and interest and sinking fund on these Collateral Trust Bonds.

Security

The Collateral Trust Bonds are to be secured by a first fixed and specific charge on all the shares at any time outstanding of Beauhamois Light, Heat and Power Company, Beauhamois Construction Company, Beauhamois Land Company and Beauhamois Transmission Company, on any shares of any other corporation acquired with the proceeds of the Collateral Trust Bonds, and on the principal of all indebtedness in favour of the Corporation arising from the application of the proceeds of the bonds, and also by a first floating charge on the undertaking. property and assets, present and future, of the Corporation. The first fixed and specific charge on the shares of such companies is not to prevent the issue by any of 9uch companies of bonds, debentures or other securities or other evidences of indebtedness, but the issue of such bonds, debentures or other securities by Beauhamois Light, Heat and Power Company is to be permitted only:

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Beauharnois Corporation-Mr. Gardiner

(a) to such principal amounts (estimated at $50,000,000) as its Directors may from time to time consider sufficient, together with the monies made available to it from the proceeds of the Collateral Trust Bonds, to complete the installation of 500,000 horse power; and

(b) to an additional principal amount equal to the cost or estimated cost (including interest charges, taxes during construction and discount on securities) of the installation or proposed installation of additional horse power and/or of the acquisition or proposed acquisition of rights and other property in connection therewith, provided that the total principal amount of such securities at any time outstanding in respect of such additional horse power shall not exceed in the aggregate $100 for each additional horse power installed or proposed to be installed; and

(c) to an additional principal amount equal to not over seventy-five per cent (75%) of the cost (as above defined) of any other rights and other property acquired or constructed or contracted to be acquired or constructed by or on behalf of Beauharnois Light, Heat and Power Company in connection with its business;

Provided that Beauharnois Light, Heat and Power Company may borrow from and give security to banks, may give purchase money, mortgages, and may incur unsecured indebtedness, all in the ordinary course of business, and may borrow from and give security to Beauharnois Power Corporation Limited.

Such securities of Beauharnois Light, Heat and Power Company may be issued from time to time in such series, made payable in such currencies and places, on such date or dates and with such rates of interest and carrying such sinking fund, conversion, redemption and other provisions as its Directors may from time to time determine.

All as will be more fully defined in the Instruments securing such bonds, debentures or other securities.

Sinking Fund

The Trust Deed securing the Collateral Trust Bonds will provide for an annual cumulative Sinking Fund, commencing in the year 1940, under which on or before October 1 of each year from 1940 to 1958, inclusive, payments of not less than $150,000 will be made, together with a sum equal to the annual interest which would have been payable on all Bonds previously retired through the operation of the Sinking Fund 'had such Bonds remained outstanding. This Sinking Found is to be used for the purpose of retiring Bonds of this issue by purchase at or below redemption prices, failing which Bonds will be redeemed by lot. All as will be more fully set out in the Trust Deed securing this issue.

Proceeds of Issue

The entire proceeds of the Collateral Trust Bonds will be deposited with the Trustee to be released to or to the order of the Corporation in accordance with the provisions of the Trust Deed securing this issue, and will be used by the Corporation for the acquisition of the undertaking and assets of The Beauharnois Power Syndicate (including the whole of the issued stock of Beauharnois Light, Heat and Power Company), for proceeding directly or through subsidiaries with the construction of the Beauharnois power development, with the acquisition of rights and other property in connection with the project and for other corporate purposes.

Board of Directors

The Board of Directors will include

Hon. W. L. McDougald, M.D., Chairman of the Board, President, The Harbour Commissioners of Montreal.

R. 0. Sweezey, Esq., President. President, Newman, Sweezey and Company, Limited.

A. F. White, Esq., Vice-President. VicePresident, The Canadian Bank of Commerce.

Aime Geoffrion, Esq., K.C. Director, The Canada Life Assurance Company.

S. Godin, Jr., Esq. Director, British Columbia Power Corporation Limited.

J. H. Gundy, Esq. President, Wood, Gundy and Company, Limited.

Miller Lash, Esq., K,C. President, Brazilian Traction, Light and Power Company, Limited.

G. H. Montgomery, Esq., K.C. Director, Montreal Light, Heat and Power Consolidated.

Hon. P. J. Paradis. Director, Quebec Power Company.

M. W. Wilson, Esq. General Manager, The Royal Bank of Canada.

Yours very truly,

(Signed) R. O. Sweezey, President Beauharnois Power

Corporation Limited.

The charge that the government disregarded the recommendations made unanimously by the joint board of engineers is founded on the fact that if the recommendations of the joint board of engineers had been followed the canal would be located in an entirely different place to where it is now being dug.

May I here point out for the benefit of the honourable members of this house and of the people of the Dominion that the recommendation of the joint board of engineers in connection with this matter is contained on pages 36, 37 and 38 of their report. With the permission of the house I will quote section 175 of the main report of the joint board as found on page 38 thereof:

175. Conclusions-The board unites in the view that the navigation improvement combined with the progressive development of power (paragraphs 162 to 169) hereinbefore set forth better provides for the present and future development of the waterway than any scheme for navigation alone, and is therefore the disirable scheme, if arrangements are made whereby power interests bear a fair proportion of the cost of the initial expenditure required.

The plan outlined in paragraphs 162 to 169 mentioned in the above paragraph is an entirely different plan to that proposed by the Beauharnois Light, Heat and Power Company and approved of by the government. It will be clearly seen that the plan recommended by the joint board is a plan in which navigation and power are combined and their report on that situation is unanimous. It is true, however, that where navigation alone was considered the board was unable to agree on a plan. The

Questions

majority of the Canadian section favoured the development of the south shore of the St. Lawrence river, a plan similar to the Beau-harnois project, but it must be recalled that the other members of the Canadian board and the United States section recommended a different plan. But the fact nevertheless remains that when that power and navigation were combined the joint board of engineers were unanimous in recommending a plan entirely different to the Beauharnois plan and the government in approving of the Beauharnois plan did not accept the recommendations of the Joint Board of Engineers.

The charge made in the house that Sweezey and his associates were guilty of fraud and should be prosecuted under the criminal code have their foundation in the fact that the above advertising is not in accordance with the facts. According to the statements of Mr. King and Mr. Bennett there is no agreement between either the Liberal or the Conservative parties and Mr. Sweezey and his associates which justifies the statements over the signature of Mr. Sweezey himself that the company will secure the whole flow of the river and as a result of which people are being induced to invest in this undertaking. That Frank P. Jones was connected with this company as a director and is now no longer one is established by reference to the returns made by the Beauharnois Light, Heat and Power Company to the Provincial Secretary of the province of Quebec. The figures for the cost of this undertaking were secured from a report made to the corporation by Frederick Bayliss Brown, consulting engineer, and verified by W. S. Lee and T. H. Hogg, two other eminent engineers, and which report is on file with the Minister of Public Works at Ottawa.

Mr. Speaker, I have covered the main points of the statement made in the House of Commons on Thursday last in connection with the Beauharnois project. These sources are official, some of them are over ithe signature of Mr. Sweezey himself and some in documents which, while not signed by the corporation, are nevertheless authoritative inasmuch as Mr. Sweezey has not repudiated the statements contained therein but rather has confirmed them by other documents over his own signature. Mr. Sweezey cannot deny successfully the truth of these statements. In fact his reported denial is in keeping with his whole disgraceful conduct in connection with this vast project. Deceit and duplicity amounting to fraud mark his every step in the handling of this affair. If Mr. Sweezey, as he says in the article in The Star "scarcely knows where to begin to convince me that I have been led into a silly lot of misstatements" I would suggest that he start at the beginning and tell the whole story of this outrageous affair. He can do this in no better way than to ask the government for a judicial investigation, a request in which no doubt he will be joined by Senators McCDougald, Haydon and Raymond. If he does, I shall facilitate him in every way as far as it lies within my power.

I Tepeat that I was not acting on behalf of any group, nor had I the interests of any individual or group of individuals when I brought this matter before the house originally, or in discussing it to-day. If it were not for the fact that the house desires to prorogue at the earliest possible date, it would be my duty to ask leave to bring Mr. Sweezey before the bar of this house to answer for his wholly unwarranted, false and insulting reference to myself and to the other members who took part in the discussion in the house on Thursday last. The honour of this house has been impunged by Mr. Sweezey and I would respectfully suggest that when the house reassembles at the next session, appropriate proceedings be taken to summons Mr Sweezey before the bar of this house to answer for his conduct.

1. What salary is paid to the members of the Halifax Harbour Commission?

2. What are their expense allowances?

3. What salary is paid Superintendent Moriarty?

4. What is his expense allowance?

5. Who recommended him for the position?

6. What position does Malcolm MacKay hold with the commission?

7. What is his salary?

8. What is his expense allowance?

9. What is his age?