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 9G85 
 
Hydro -e:].ec trie 
 Power commission 
 
 OEPT. 
 
"MURRAY REPORT" ON ELECTRIC UTILITIES 
 
 REFUTATION 
 
 "— OF 
 
 UNJUST STATEMENTS 
 
 CONTAINED 
 IN A REPORT PUBLISHED BY THE 
 
 National Electric Light Association 
 
 ENTITLED 
 
 "Government Owned and Controlled Compared with 
 
 Privately Owned and Regulated Electric Utilities 
 
 in Canada and the United States'* 
 
 RESPECTING THE 
 
 Hydro -Electric Power Commission of Ontario 
 
 TORONTO— 1922 
 
^^'^ 28 1929 
 
 DIVERSITY 
 
RE 
 
 "MURRAY REPORT" ON ELECTRIC UTILITIES 
 
 REFUTATION 
 
 OF 
 
 UNJUST STATEMENTS 
 
 CONTAINED 
 IN A REPORT PUBLISHED BY THE 
 
 National Electric Light Association 
 
 ENTITLED 
 
 "Government Owned and Controlled Compared with 
 
 Privately Owned and Regulated Electric Utilities 
 
 in Canada and the United States'* 
 
 RESPECTING THE 
 Hydro -Electric Power Commission of Ontario 
 
 TORONTO— 1922 
 
T 
 
 f. 
 
 
 
 TA.fM-^-t 
 
FOREWORD 
 
 THERE has recently been issued a voluminous printed report under the 
 title "Government Owned and Controlled, compared with Privately 
 Owned and Regulated Electric Utilities in Canada and the United States." 
 This report is popularly known as the "Murray Report." Even a cursory 
 examination of its contents reveals the fact that its real purpose is evidently 
 to undermine, if not to destroy, public confidence in public ownership and to 
 this end an attempt is made in it to discredit the success of the municipally- 
 owned, hydro-electric power and light undertaking operated for Ontario 
 mimicipalities by the Hydro-Electric Power Commission. 
 
 From an explanation presented in the report it is learned that it was 
 prepared by a United States firm of consulting engineers— Mr. W. S. Murray 
 and Mr. Henry Flood, Jr. — acting under instructions from the National 
 Electric Light Association through which organization the report has been 
 distributed to the public. The report itself is signed by W. S. Murray, who 
 personally received instructions from the National Electric Light Association. 
 This Association is antagonistic to public ownership. Of himself, Mr. Murray, 
 in his report says, "I have never subscribed to governmental ownership of 
 electric utilities in the United States." 
 
 In the introductory portion of his report Mr. Murray records that he 
 received a commission "from the National Electric Light Association, to 
 investigate and report on the electric utility systems as operating in the United 
 States and by the Hydro-Electric Power Commission of Ontario." Mr. Mur- 
 ray also states: "that the electric utility officials in the States were very much 
 at sea regarding the facts of the Hydro-Electric Power Commission's policies 
 and operations," and that consequently it is his desire to set forth the facts 
 "so that they would be correctly interpreted beyond peradventure of doubt." 
 
 The results of Mr. Murray's efforts have been published and a large and 
 widespread distribution of his report has been made throughout both the 
 United States and the Dominion of Canada. 
 
 An examination of Mr. Murray's report shows that some eighty-five per 
 cent of its contents consists of information epitomized, or otherwise arranged 
 by him from data supplied from the records of the Hydro-Electric Power 
 Commission of Ontario. 
 
!f' .STATEMENT IN REFUTATION 
 
 The report cf Mr. Murray effects comparisons between "privately- 
 owned" electric utilities and the Hydro-Electric Power Commission of Ontario, 
 and purports to do so in an "impartial and exhaustive" manner. Information 
 relating to the Commission was unstintingly supplied to Mr. Murray and, 
 as just intimated, portions of these data have been published by him in great 
 detail. He, however, in his report, makes no attempt correspondingly to 
 supply information respecting the private electric utilities. With regard to 
 the private companies in the United States, Mr. Murray fails to designate 
 adequately even the sources and limitations of many of the data which he has 
 employed; while with respect to the private companies in Canada with which 
 he compares the Hydro-Electric Power Commission, Mr. Murray, in response 
 to a special request from the Chairman of the Commission, replied that the data 
 of the private companies were given to him in "confidence" and that in this 
 connection he must preserve the restrictions imposed upon him. He could 
 not even submit the data to the Commission, in order to assist it in going more 
 fully into certain assertions published in his report. It will be appreciated 
 therefore, that although on the one hand, the reader has available the detailed 
 evidence relating to the operations of the Hydro-Electric Power Commission, 
 nevertheless, on the other hand, he must content himself— if able so to do — 
 with unsupported assertions made by Mr. Murray now known to be founded 
 upon "confidential" and unpublished data of private interests. 
 
 Although Mr. Murray's report upon the face of it bears "ear-marks" of 
 reliability and no expense has been spared to present it in attractive form, 
 nevertheless, Mr. Murray makes incorrect statements and representations 
 respecting the Hydro-Electric Power Commission of Ontario and its operations, 
 which lead to conclusions at complete variance with the facts. It is desirable, 
 therefore, that an authoritative statement be made which shall disclose the 
 inherent unsoundness of Mr. Murray's report. 
 
 The users of electrical energy in the province of Ontario are in no doubt 
 respecting the actual and genuine benefits of the cheap light and power which 
 they have so long enjoyed. It is, however, not for the citizens who understand 
 the subject that the present statement is prepared, but rather for those in 
 Canada or in the United States who are unfamiliar with, but who nevertheless 
 are really concerned to know, the facts. It is believed that both in Canada 
 and in the United States there are many interested in the work of developing, 
 distributing and using hydro-electrical energy who would like to know the 
 real facts relating to the subject Mr. Murray discusses, but who are unable 
 either to take the time or to make the effort necessary to conduct an inde- 
 pendent investigation. Even among the members of the National Electric 
 Light Association there are, no doubt, many v/ho would like to know 
 definitely whether or not Mr. Murray's conclusions could satisfactorily be 
 sustained if criticism were intelligently directed against them. There are, in 
 Canada, some who have been unsettled by similar propaganda plausibly sent 
 forth but devised with the express object of discounting the achievements 
 of Ontario's municipal hydro-electrical undertaking. 
 
RE MURRAY AND FLOOD REPORT in 
 
 In commencing this discussion it should clearly be understood that the 
 very title of Mr. Murray's report is misleading. The phrase "Government 
 Owned and Controlled," in its usually accepted meaning — and especially as 
 understood in the United States — conveys a significance radically different 
 from any which can be attached to the operations of the Hydro-Electric 
 Power Commission of Ontario. As commonly understood, "Government 
 ownership" carries with it the conception of political domination in the 
 appointment of oflBcials and other employees and in the purchase of equip- 
 ment and supplies and, in addition, the view that political manipulation may be 
 impressed upon important phases of the operations in hand. As contrasted v/ith 
 such a political organization it may simply be stated that the Hydro-Electric 
 enterprise of the Municipalities in the province of Ontario is not "Govern- 
 ment ownership." It is co-operative, municipal ownership working through 
 the agency of independent commission control and administration and is 
 entirely removed from political interference. Mr. Murray has not emphasized 
 as he should have emphasized, nor has he kept to the front, this fundamental 
 distinction between "Government ownership" as generally understood, and 
 Co-operative Municipal ownership as expressed in the constitution and work 
 of the Hydro-Electric Power Commission of Ontario. Had this point alone 
 been clearly brought out by Mr. Murray, he would have required to look 
 elsewhere than to the Hydro-Electric Pov/er Commission for his only illus- 
 tration of a "Government Owned" electric utility. It was, however, vital 
 to Mr. Murray's presentation that, by some means, he should identify the 
 undertaking of the Hydro-Electric Power Commission with government 
 ownership, in order that the stigma of government ownership as commonly 
 understood should be transferred to the unique, co-operative, municipal- 
 ownership undertaking of the Commission and thus aid in casting discredit 
 upon the achievements of the people of the province of Ontario who have 
 directly assumed the financial responsibility of obtaining their hydro- 
 electrical energy at cost. 
 
 Mr. Murray states that the National Electric Light Association desired 
 to have a report "based on an impartial and exhaustive study." It is proposed 
 in the present Refutation to show, briefly, some of the methods adopted by 
 Mr. Murray in order to reach his conclusions and then to leave the National 
 Electric Light Association and the Public to judge of the correctness of the 
 charge that Mr. Murray's report is not "exhaustive," it certainly is not "im- 
 partial," and, moreover, embodying, as it does, such fallacious methods as 
 Mr. Murray has employed, its conclusions also are necessarily unsound. 
 
 Mr. Murray has made definite statements purporting to be true but 
 which are at absolute variance with well-known facts. He has misquoted 
 statements, even replacing significant words therein with others. He has 
 employed partial and misleading data, thereby arriving at conclusions which 
 cannot for a moment be supported if the correct data be employed. He has 
 presented grossly misleading statements respecting even physical facts within 
 his knowledge, and he has made comparisons between entities radically differ- 
 ent, when even a proper recognition of the real differences would have created 
 
IV STATEMENT IN REFUTATION 
 
 an impression entirely at variance with what he has represented. He has 
 inflated costs in a manner which falsifies the conclusions. Such procedure 
 is characteristic of the use made of much of the essential material embodied 
 in the premises which Mr. Murray has adduced and upon which he has based 
 his conclusions. This accounts for the worthless nature of such conclusions. 
 
 It is unnecessary in this Foreword to follow Mr. Murray through the many 
 unjust representations by means of which he plausibly seeks to impose upon 
 the credulity of his readers. His garbling of documentary data, his general 
 misrepresentation respecting the operations of the Commission, his unwar- 
 ranted statements relating to the concentration of industries or to the thrott- 
 ling of initiative, his puerile dealing with economic subjects, such as muni- 
 cipal taxation, the question of 'intangibles,' bonded indebtedness, and other 
 similar features, and even his unprofessional treatment of important technical 
 data, will all be found to be characterised by the same lack of frank and 
 adequate consideration which is exemplified by the following specific illus- 
 trations. 
 
 In dealing with the legislation under which the municipalities carry on their 
 electrical operations, Mr. Murray refers in rather, a disparaging manner to 
 certain broad powers which the Government of the Province has conferred 
 upon the Commission. He states: 
 
 "It is apparent as one reads the many laws enacted that the faith of the 
 people is in an all-wise, unerring commission which 'can do no wrong,' 
 and legislation has been constantly passed so that the Commission is entirely 
 free from any character of inhibition; barriers, legal or otherwise, are levelled 
 to give free swing to the conscience and action on the part of the Commis- 
 sion." 
 
 In referring to certain circumstances where such broad powers as have just 
 been intimated might be invoked, Mr. Murray contends that no suit could 
 have been brought against the Commission "since," states he, "the Commission 
 cannot be sued without fiat from the Attorney-General, and to date no fiat 
 has ever been granted." Within the period from 1912 to date, the Attorney- 
 General of the Province of Ontario has granted more than twenty-five fiats per- 
 mitting legal action to be brought against the Commission. This statement 
 shows that Mr. Murray has definitely recorded that which is at absolute 
 variance v/ith fact. 
 
 When Mr. Murray is contending in his report that the Hydro-Electric 
 Power Commission is clothed with an "unlimited" authority which makes it, 
 as he charges, "the sole judge of its own acts," he purports to quote the Power 
 Commission Act. In so doing, however, he expressly omits certain all- 
 important, qualifying words in the earlier form of the Amending Act he employs. 
 Thus the phrase 
 
 "in respect of which authority is, by this Act, conferred upon it." 
 is altered by Mr. Murray to read 
 
 "in respect of that authority as by Act conferred upon it." 
 
RE MURRAY AND FLOOD REPORT v 
 
 By thus altering the wording of the Act, Mr. Murray creates the false 
 impression that the jurisdiction conferred by the particular portion of the 
 Act cited, relates to the operations of the Commission as a whole, instead of 
 relating as it does only to certain comparatively unimportant and special 
 features covered by the provision of the Act in question — that is, by this Act. 
 These features refer to a relatively minor power of the Commission which 
 permits it to approve of certain matters relating to the joint construction of 
 lines on highways, and in this connection the Commission acts in the 
 capacity of a regulatory commission. Mr. Murray's zeal to support his 
 charge that a power of procedure had thus been "granted to the Commission, 
 unlimited," has impelled him to such an extent that he is ready to misquote 
 even the wording of a Statute in order to lend plausibility to his unfounded 
 contention. 
 
 Again, when Mr. Murray is discussing rates for light and power for certain 
 places as compared v/ith the rates for other places served through the Hydro- 
 Electric Power Commission, he employs data which, rightly understood, totally 
 discredit his conclusions. Mr. Murray, for example, states that, in 1920, the 
 street lighting cost per capita in the city of Buffalo was 60 cents as compared 
 with 67 cents per capita in the city of Toronto. Mr. Murray, however, does 
 not inform his readers that in Buffalo more than one-half of the total number 
 of street lights are gas or gasoline lamps, whereas in Toronto all the street 
 lights are electric. The significance, of course, of this omission is that Mr. 
 Murray has taken less than one-half of the total cost of street lighting in 
 Buffalo and then compared it with the whole cost of all the street lighting in 
 Toronto. Had Mr. Murray used the figures necessary to effect a correct 
 comparison then he would have had to say that, in 1920, the total cost of street 
 lighting per capita in Buffalo was $1.15 and not 60 cents per capita as he has 
 incorrectly stated. Such a presentation of facts, however, would not have 
 fitted in with Mr. Murray's argument. What is required in matters of this 
 kind is "impartial and exhaustive study" and in an instance like that just 
 cited Mr. Murray shows himself to be singularly incompetent to prosecute 
 such a study. 
 
 Even with respect to certain physical facts, Mr. Murray lamentably 
 fails to present impartially the true condition of affairs. With regard to the 
 storage on the Nipigon river as contrasted with the storage available on the 
 Kaministikwia river, Mr. Murray states that the Nipigon development "lacks 
 a storage equal to that available to the Kaministikwia plant." The physical 
 facts are that the Nipigon river has a potential storage of 4,896,000 acre-feet 
 which with the flow of the river would jaeld a controlled flow of 6,500 cubic 
 feet per second, whereas the Kaministikwia river has a storage of 547,000 
 acre-feet yielding, correspondingly, a controlled flow of but 1,000 cubic feet 
 per second. Thus the potential storage on the Nipigon watershed is over nine 
 times that on the Kaministikwia. Moreover, the ultimate power which may 
 be developed on the Nipigon river is about four times that which may be 
 developed upon the Kaministikwia river. In view of such facts it is 
 
VI STATEMENT IN REFUTATION 
 
 incomprehensible that Mr. Murray should state that the Nipigon develop- 
 ment "lacks a storage equal to that available to the Kaministikwia plant" 
 when in point of fact it does not lack, but surpasses it manyfold. Not to 
 have directed attention to the very special features distinguishing the water 
 power of the Nipigon river, and to have compared the Nipigon river with the 
 Kaministikwia river, as Mr. Murray has done, is certainly not "impartial" 
 consideration, but, rather, is an unpardonable breach of professional integrity 
 on the part of the authors of the Murray-Flood Report. 
 
 Throughout his report Mr. Murray effects comparisons between data 
 and circumstances which often are inherently and radically different. Not 
 only does Mr. Murray fail to direct his readers' attention to these fundamental 
 differences, but in some cases he actually precedes the "comparison" he in- 
 tends to make, by a special discussion of differences between entities which 
 subsequently are not involved in the comparison actually made. In such a 
 case, unless the reader is on guard, he fails to perceive the tricky device by 
 which his attention has been transferred from an important to an inferior 
 consideration. 
 
 A typical example of this method as adopted by Mr. Murray, is found 
 in the way in which he presents his comparisons of the average costs of power 
 to the people of California and of Ontario. In discussing this subject, Mr. 
 Murray first directs his readers' attention specifically to the advantages en- 
 joyed by the people 0/ the Niagara district in having Niagara Falls as the 
 source of power. "This," states Mr. Murray, "should be kept in mind es- 
 pecially when the comparison is drawn for the California situation." He 
 then, under the caption, "California Compared to Ontario," makes his com- 
 parison, not however, on this broad basis of California and Ontario, nor indeed 
 between California and the only Hydro system which in magnitude is at all 
 comparable with California, namely, the great Niagara system to which he 
 has specifically directed his readers' attention; but between California, and, 
 to use Mr. Murray's subtle expression, the Hydro systems "other than the 
 Niagara." The reader unfamiliar with the actual situation, would probably 
 not know that the systems "other than the Niagara," embrace only the smaller 
 and relatively unimportant systems of the Hydro-Electric Power Commission 
 which serve the less populous sections of Ontario and represent in all less than 
 one-seventh of the total load on the Hydro systems. 
 
 The cost of power from these relatively small systems is "compared" by 
 Mr. Murray with the cost in California where over a million horsepower is 
 developed and where the electrical energy "delivered to agricultural industry" 
 states Mr. Murray, alone amounts to about 500,000 horsepower. The com- 
 parison Mr. Murray actually makes is foolish, but his attempt thus to beguile 
 his readers is an imposition upon their lack of knowledge of the facts. 
 
 Fi'cm the illustrations already considered it is apparent how inexcusably 
 inaccurate Mr Murray has been when dealing with data of fact, but when 
 he imdertakes to deal with hypothetical factors involving future circum- 
 stances, he, as will be seen from the following comments, transgresses sound 
 
RE MURRAY AND FLOOD REPORT vii 
 
 procedure in a manner even more indefensible. 
 
 By way of illustration, it may be pointed out that in presenting his es- 
 timates of the cost of Niagara power with the Queenston-Chippawa develop- 
 ment operating under various deliveries of power, Mr. Murray commences by 
 making a number of gratuitous assumptions respecting the amounts of water 
 which v/ill be available, the extent to which he states existing installations 
 will have to be scrapped, and so on, and then, he proceeds in a most astonish- 
 ing manner to inflate estimates by millions of dollars. For example, in 
 an important instance he has employed an interest rate of 8.15 per cent, 
 thereby imposing a fictitious annual charge upon the Commission's operations 
 of over $1,600,000. In another instance he has provided over $2,000,000 
 annually for the renewal of plant equipment which he proposes to scrap, and 
 which would not be renewed at all. It will be seen from the more detailed 
 consideration of this aspect of Mr. Murray's report how, by inflation and 
 other devices, he has estimated a total annual production cost for power of 
 $12,310,000 instead of what this total would be if correctly estimated under his 
 own assumptions, namely $7,200,000. In this instance, he has overestimated 
 the cost of power to the Niagara system by about $11.00 per horsepower 
 or 75 per cent. Evidently Mr. Murray's views of engineering economics 
 demand serious attention and revision. 
 
 It will be appreciated that such methods of handling and presenting data 
 as those referred to, simply place Mr. MuiTay's whole report out of the position 
 where it is entitled to be considered seriously, or even with respect; they show 
 conclusively that the report is not compiled in an "exhaustive" nor in an 
 "impartial" manner and hence its conclusions are not entitled to consider- 
 ation. 
 
 No one reading the Murray report could fail to be impressed with the 
 fact that one of the chief objects which Mr. Murray seeks is to establish his 
 contention that under the auspices of the Hydro-Electric Power Commission's 
 operations the people do not receive advantages in their rates for light and 
 power as great as do the people of the province of Quebec and others in the 
 United States. In other words, Mr. Murray alleges that electrical energy 
 is dearer in Hydro municipalities than it is in other territories to which he 
 refers. 
 
 In view of the general unreliable character of statements and comparisons 
 made by Mr. Murray, his comparisons respecting the cost of power could not be 
 expected to command serious attention, but in this connection also, his basic 
 factors are seen to have been greatly distorted according to the erroneous 
 methods above exemplified from other sections of his report, and thus his con- 
 clusions respecting the costs of power are also in error. 
 
 In the more detailed statement which follows this Foreword, it is explained 
 how Mr. MuiTay fails to present information which is absolutely necessary in 
 order intelligently to discuss some of the conclusions which he has expressed. 
 
 Mr. Murray, for example, has not sufficiently defined his districts nor 
 
VIM STATEMENT IN REFUTATION 
 
 the populations which he respectively uses. He has not given summaries 
 of the quantities of power involved, nor shown how, for the respective districts, 
 his quantities are determined. In important instances, he has made com- 
 parisons between unlike units with the result that his conclusions, based upon 
 such premises, are necessarily valueless and misleading. Time and again, 
 Mr. Murray dogmatically asserts that comparisons of certain quantities with 
 certain other quantities, give results of such and such percentages, greater or 
 less, as the case may be, but he does not present the basic quantities 
 themselves, with the consequence that no one can tell how he arrives at his 
 percentages. Again, the Commission has been denied the use of certain im- 
 portant data supplied to Mr. Murray respecting privately-owned companies: 
 Mr. Murray's excuse being that the data withheld are "confidential" for 
 his use and could not be disclosed. Because Mr. Murray has dealt with his 
 subject in this manner it has been impossible either with respect to his larger 
 territorial areas or with respect to important cities to which he has referred, 
 to deal specifically with his conclusions involving such communities. How- 
 ever, sufficient data are available for dealing broadly with his comparison 
 between the costs of electrical energy to the citizens of the city of Buffalo and 
 the city of Toronto. From this comparison it will be found that Mr. 
 Murray has blundered in a manner corresponding to that which has so often 
 been shown. According to Mr. Murray the average cost of electrical energy 
 to the citizens of Buffalo is 20 per cent lower than to the citizens of Toronto as 
 supplied by their Hydro system, whereas the data rightly employed show that 
 the reverse is the fact and that the energy costs in Buffalo are on the average 
 higher than the costs of Hydro service in Toronto by over 35 per cent. 
 
 The erroneous method which has resulted in false conclusions in the case 
 of the comparison of the costs of electrical energy in the cities of Buffalo and 
 Toronto is the same as that adopted in Mr. Murray's comparisons of the cost 
 of power in various other districts. It follows, therefore, that the results 
 of Mr. Murray's other comparisons must be correspondingly false, and con- 
 sequently his whole consideration with respect to this subject may be dis- 
 missed. 
 
 With regard to the charges for electrical energy made by the Hydro- 
 Electric Power Commission, it is sufficient to state that the factors germane 
 to the cost of power are published in the annual reports of the Commission. 
 No other hydro-electric power organization publishes an annual report pre- 
 senting anything like the amount of classified, detailed information contained 
 in the Commission's reports. All such data are separately audited and ap- 
 proved by auditors independently appointed by the Government of the Prov- 
 ince. Had Mr. Murray been just in his employment of even the data which 
 he has utilized, and had he used ordinary discretion in selecting comparable 
 data from other sources, he could never have reached the fallacious conclusions 
 he has published, but on the contrary he would have found that the rates for 
 light and power throughout the Hydro system in Ontario are cheaper than for 
 like service elsewhere in the world. It is actually hydro-electrical energy 
 "at cost." 
 
RE MURRAY AND FLOOD REPORT ix 
 
 For lighting alone, the over 300 municipalities now enjoying their 
 "Hydro" service have, during the period of operation, saved through re- 
 duction of rates approximately $60,000,000 over what would have been the 
 cost under rates prevailing before their undertaking was initiated. As Mr. 
 Murray says in his report: "Facts are impersonal things, sometimes they 
 hurt." It is facts like this which appear to hurt Mr. Murray and those 
 who fain would wish his conclusions were sound. But such facts do not 
 hurt the citizens of Ontario who have actually experienced such saving and 
 who know the benefits they have derived from "Hydro" electric power and 
 light. 
 
 During the fifteen years of its active operation, the Hydro-Electric Power 
 Commission of Ontario has been called upon to bear much unjust criticism. 
 Occasionally this has resulted from well-meaning parties undertaking to dis- 
 cuss phases of the Commission's work respecting which they were really un- 
 informed. On several occasions fretful criticisms have been initiated and 
 published by interested parties in the United States. 
 
 Soon after the Commission commenced operations there were propaganda 
 conducted through financial journals in the United States with the object of 
 representing that Ontario's municipal power undertaking would produce a 
 most unfavorable effect on credit — "not only of the Province immediately 
 implicated, but of the Dominion as a whole." In 1913, under the title "An 
 Expensive Experiment," in a bound volume of 281 pages, Mr. R. P. Bolton 
 of New York issued his tii^ade against the Hydro-Electric Power Commission. 
 Mr. Bolton stated that the purpose of his effort was to "inform the tax-payers 
 of the State of New York of the facts relating to the attempt to fasten at their 
 expense upon our State a speculative experiment, such as that in Ontario." 
 Later the Hj^'dro-Electric Commission was "investigated" by Senator Ferris 
 and his colleagues from Albany, N.Y. These men made an adverse report 
 but its superficial and erroneous character was soon disclosed. Now, the 
 latest of such criticism is that of Mr. W. S. Miirray. He, like Mr. Bolton 
 and others, has allowed his zeal to outrun his discretion. He utterly fails 
 to differentiate between certain basic elements differing in quantity, character 
 and situation. Mr. Murray in some respects differs from certain others who 
 have been sent "to investigate" the Commission's work, in that his services 
 were definitely contracted for to prepare this special report — a report which, 
 upon the counts herein made against it, is qualified to take its place alongside 
 of other efforts such as those just referred to as having been made by Senator 
 Ferris and by Mr. Bolton. 
 
 When it is appreciated that this great public enterprise — the Hydro- 
 Electric Power Commission — supplies, as it does, power and light to nearly 
 half of the population of the province of Ontario — supplying 242 urban muni- 
 cipalities, 68 townships, and numerous other customers, and involving in 
 all an investment in connection with the generation, transmission, and dis- 
 tribution of electrical energy of over $200,000,000 — it will be understood why 
 
X STATEMENT IN REFUTATION 
 
 it is necessary to make an authoritative and complete exposure of the character 
 and objects of a report such as that under review. 
 
 So long as the 300 odd municipalities— including practically all of the 
 cities, towns and large centres— now co-operating in the province of Ontario 
 for the purpose of supplying the people with electrical service "at cost," re- 
 tain their confidence towards each other and towards their Commission, no 
 assaults, no matter what their character may be, can prevail against their 
 great and successful co-operative undertaking. 
 
CONTENTS 
 
 Page 
 
 Foreword — ^By Sir Adam Beck 
 
 Attacks upon the Hydro-Electric Power Commission of Ontario by Interests 
 
 Outside the Province 2 
 
 Origin and Development of the Municipal Hydro-Electric Movement in the 
 
 Province of Ontario 3 
 
 Ontario Decides to Adopt Co-operative Municipal Ownership 4 
 
 In Their Rates, Hydro Customers Pay for Plants as well as for Service 4 
 
 Growth of the Undertaking of the Hydro Municipalities 5 
 
 Prominent Features of the Municipally-Owned Hydro-Electric Power Under- 
 taking IN Ontario 6 
 
 The Financial Structure of the Municipally-Owned Electric Systems of the 
 
 Province of Ontario 6 
 
 True Character of the "Murray Report" Disclosed 9 
 
 Mr. Murray Purposely Confuses "Government Ownership" with "Municipal 
 
 Ownership" 9 
 
 Mr. Murray Garbles Documentary Data 11 
 
 Mr, Murray Misrepresents Hydro Legislation 12 
 
 Mr. Murray Grossly Mis-states the Fact Respecting Fiats 13 
 
 General Misrepresentation Respecting Fair Dealing 13 
 
 Mr. Murray Ignores Half the Cost of Buffalo Street Lighting 16 
 
 An Example op Mr. Murray's Methods; His Comparison op Ontario and 
 
 California 16 
 
 Hydro Rates and their Influence on the Concentration of Industries 18 
 
 No Such Discrimination in Rates as Mr. Murray Alleges 19 
 
 Co-operative Municipal Ownership has not Throttled Initiative in Ontario... 21 
 Mr. Murray Jumps to Unjustifiable Conclusions Respecting MuNi-aPAi 
 
 Taxation 21 
 
 Intangibles Included in Hydro Rates are due to Early Alienation of Public 
 
 Resources to Private Companies 22 
 
 Statement Respecting Rate of Retirement of Bonded Debt not Supported by 
 
 Authority Mr. Murray Quotes 22 
 
 Mr. Murray Singles out the Nipigon Development for Special Criticism. His 
 
 Unjust Statements Refuted 24 
 
 Power Supply for Port Arthur-Fort William District not Overdeveloped .... 25 
 
 Kaministikwia Power Company Unable to Supply Port Arthur with Firm Power 
 
 of More Than 5,000 Horsepower 25 
 
 Kaministikwia Power Company Unable to Supply General Power Require- 
 ments OF Port Arthur-Fort William District 26 
 
 Commission has Published a Statement Respecting Nipigon Power Develop- 
 ment AND Thunder Bay District 27 
 
 The Commission Decided to Proceed with Nipigon Development After Receipt 
 of Urgent Demands from the Provincial Government and the 
 Municipalities 28 
 
 Mr. Murray Fails to do Justice to the Great Storage Facilities of the Nipigon 
 
 River 29 
 
 XI 
 
XH Page 
 
 Outline Map op Nipigon Lake with Dog Lake Inset to Same Scale 30 
 
 Great Advantages of the Nipigon River for Power Development 81 
 
 Comparison of Power Possibilities — Nipigon and Kaministikwia Rivers....'. 31 
 
 Queenston-Chippawa Power Development — Its Object and Extent 33 
 
 The Allied War Needs Were a Governing Factor in Initiating the Queenston- 
 Chippawa Development 34 
 
 Growth of the Use of Hydro-Electrical Energy in the Niagara District 34 
 
 A Load Aggregating 150,000 Horsepower Awaited the First Generators at 
 
 THE Queenston-Chippawa Plant 36 
 
 Mr. Murray Presents Estimates of the Cost of Niagara Power Based Upon 
 
 His Own Hypotheses 37 
 
 Mr. Murray Absurdly Overestimates the Renewal Reserves of the Ontario 
 
 Pow^R Company 38 
 
 Mr. Murray's General Inflation of Estimates 40 
 
 Mr. Murray's Gross Error Respecting the Interest Charges Applicable to the 
 
 Queenston-Chippawa Development 40 
 
 Even Under the Present Low Rates the Revenues op the Municipalities, with 
 BUT Few Exceptions, are Sufficient to Meet All Charges on Queenston- 
 Chippawa Development 41 
 
 Mr. Murray's Unproved Assertions Respecting Comparative Power Costs in 
 
 Various Districts 42 
 
 Mr. Murray's Erroneous Comparison of Costs op Power in the City of Buffalo 
 
 and the City of Toronto 45 
 
 Average Cost op Electrical Energy in the City of Toronto and in the City of 
 
 Buffalo 47 
 
 Discrimination in the City of Buffalo Against the Lighting Consumer 48 
 
 Comparisons of Actual Bills to Ultimate Consumers in Toronto, Hamilton, 
 
 London, Montreal, Buffalo and Detroit 49 
 
 Tabular Statements Showing Comparative Costs op Electric Light and Power 
 Service in the Cities of Toronto, Hamilton, London, Montreal, Buffalo 
 and Detroit 50 
 
 Conclusion 52 
 
REFUTATION 
 
 . of 
 
 UNJUST STATEMENTS 
 
 respecting the 
 
 Hydro-Electric Power Commission of Ontario 
 
 contained in the 
 
 "Murray Report" re Electric Utilities 
 
 LARGE printed report entitled "Government Owned and Controlled 
 Compared with Privately Owned and Regulated Electric Utilities 
 in Canada and the United States," has been prepared, and published 
 from New York City, under the auspices of the National Electric Light 
 Association, — an organization comprising and representing privately-owned 
 electric utilities chiefly throughout the United States. The Report was 
 prepared by a firm of United States consulting engineers — Messrs. Murray & 
 Flood, — acting under special instructions from the National Electric Light 
 Association. It is signed by Mr. W. S. Murray, from which fact it is com- 
 monly referred to as the "Murray Report." 
 
 The ostensible purpose of this report is to present "in a comprehensive 
 and comparable way the advantages of electric service rendered by privately 
 owned and publicly regulated utilities in the United States and Canada con- 
 trasted with that supplied by the Hydro-Electric Power Commission of 
 
 Ontario." Moreover, it is represented to be "based on an impartial and 
 exhaustive study." 
 
 The most casual examination of the report, however, reveals that 
 this is not its real purpose; its real purpose evidently is to undermine if not 
 to destroy public confidence in public ownership and in order to do so Mr. 
 Murray attempts to discredit the success of the Hydro-Electric Power 
 Commission of Ontario. The National Electric Light Association always 
 has been and is uncompromisingly antagonistic to public ownership, while 
 of himself Mr. Murray in his report says, "I have never subscribed to 
 government ownership of electric utilities in the United States." More 
 than six-sevenths of the subject matter contained in the Murray Report 
 consists solely of information relating to the operations of the Hydro-Electric 
 Power Commission, while in the remaining one-seventh, which refers to the 
 operations of privately-owned utilities, Mr. Murray presents practically no 
 
2 STATEMENT IN REFUTATION 
 
 information corresponding to that published by him respecting the Hydro- 
 Electric Power Commission, but deals largely in generalities and assertions. 
 Mr. Murray's report may justly be said to be permeated with comparisons 
 of non-comparable data, with incomplete or misapplied statistics and 
 with serious mis-statement of fact. 
 
 Attacks upon Hydro-Electric Power Commission 
 of Ontario by Interests Outside the Province 
 
 The Murray report is by no means the first instance of unfair attack 
 being made upon the hydro-electric undertaking of the municipalities of 
 Ontario. From its inception the entire Hydro-Electric power movement has 
 been subjected to bitter and relentless criticism, the instigators of which have 
 spared neither time, money, ingenuity, nor effort in order at every oppor- 
 tunity by unfair criticism to hamper the development of the movement and 
 to discount its success. Practically all of the special publications issued 
 against the work of the Hydro-Electric Power Commission have emanated 
 from sources outside of Canada. 
 
 In the early days of the Hydro-Electric Power Commission, extensive 
 agitation against the Commission's programme was carried on through financial 
 journals, in the United States and elsewhere, with the object of showing that 
 the proposed undertaking would produce a disastrous effect upon the credit 
 not only of the Province of Ontario but of the Dominion of Canada. One of 
 the earlier special attempts to destroy confidence in the Ontario co-operative, 
 municipal-ownership plan was in the form of a book entitled "An Expensive 
 Experiment." This book, under the authorship of a New York engineer, was 
 published by certain interests in the state of New York which at the time were 
 busily engaged in an effort to forestall the proposed institution of a plan in 
 New York state modelled upon lines somewhat similar to the then new project 
 in the province of Ontario. In this book, many prophecies were made respect- 
 ing the alleged ruin which, in various forms, would inevitably be visited upon 
 the unfortunate people of the Province. Comparison of the actual results of 
 the operations of the Hydro-Electric Power Commission with these inspired 
 and prejudiced prophecies, shows a complete discounting of the prophetic 
 abilities of those who inspired the publication of this unjust book. 
 
 Later, Senator Ferris and some of his colleagues of the state of New York 
 "investigated" the Commission and made an official report, the superficial char- 
 acter of which was soon discovered even by prominent officials of the State. 
 Many other less important but equally vituperative and unfounded attacks 
 have been made at various times since the Hydro-Electric Power Commission's 
 work was commenced. One of the latest examples of criticism of this nature 
 is the "Murray Report" with v/hich this Statement deals. 
 
 The same general class of interests which promoted the compilation and 
 publication of the now almost forgotten Bolton book — "An Expensive Ex- 
 periment" — corresponds to the interests that have instigated, financed and 
 spread broadcast before the public of the United States and Canada, the 
 "Murray Report." The fallacious nature of efforts like the Bolton report and 
 
RE MURRAY AND FLOOD REPORT 3 
 
 the Ferris report was soon discovered, and now one seldom hears them even 
 referred to. Once the real character of the Murray Report is appreciated, it 
 likewise will drop into di'^repute, and, doubtless, will be forgotten even by its 
 present supporters. 
 
 It is not the custom of the Commission to reply to much of the criticism 
 to which it has been subjected, but the attack in the Murray report is of a 
 character which singles it out for attention. The name of Mr. Murray, on 
 account of his association with work of a public character, is well-known, and 
 for those with whom 'authority' is truth, rather than" Truth authority, his 
 representations would probably have wide acceptance, especially by those who 
 possess no means of ascertaining the facts essential for an independent study 
 of the problem. In view, therefore, of the 'authority' sponsoring the Murray 
 report and of the gross misrepresentations which have been made regarding 
 the work of the Hydro-Electric Power Commission, and in view also of the 
 parade of information respecting this Commission published in Mr. Murray's 
 report, it is considered desirable that an authoritative statement be made, 
 exposing the inaccurate and indefensible nature of Mr. Murray's treatment 
 of the subject in hand. 
 
 It is unnecessary and it would be unduly tedious to review the Murray 
 report in detail, but sufficient of its representative statements will be dealt with 
 amply to demonstrate its lack of 'impartiality,' of 'exhaustiveness,' and even 
 of reliability with respect to statement of figure and fact. In addition, 
 Mr. Murray's main conclusions, and particularly his allegations respecting 
 the relative cost of power in Ontario as compared with that in various other 
 districts, will adequately be considered and their fallacious nature exposed. 
 
 The subject under consideration cannot be properly followed unless there 
 is some clear understanding of the service which the Hydro-Electric Power 
 Commission actually renders as agent and trustee for the municipalities it 
 represents. Discussion, then, of the Murray report may best be opened by 
 a few comments respecting the origin and work of the Commission. 
 
 Origin and Development op the Municipal 
 Hydro-Electric Movement in the Province of Ontario 
 
 In the decade of 1900-1910, the people of the province of Ontario realized 
 that if the Province were to maintain its standing as the chief manufacturing 
 centre of the Dominion of Canada and to expand its manufacturing industries 
 to meet the growing demand for Canadian manufactured products, then a 
 bountiful supply of electrical energy at moderate prices was a basic necessity. 
 
 At that time the supply and distribution of electrical energy was largely 
 local in its nature, almost all of the large municipalities being supplied by 
 private companies which largely used steam as the source of power. A few 
 municipalities, favoured geographically by nearness to Niagara Falls and 
 Decew Falls, received hydraulically-generated electrical energy through the 
 agency of private companies. The province of Ontario possesses no coal as 
 a natural resource, practically all of its coal being imported at great outlay 
 
4 STATEMENT IN REFUTATION 
 
 from the United States, and, as a consequence, the eyes of the people were 
 turned towards the large water-power resources of the Province, and par- 
 ticularly towards Niagara Falls, as a means of replacing coal for the generation 
 of power while at the same time greatly reducing the cost of electrical energy 
 for both power and light. 
 
 Preliminary studies made in the years 1903 to 1906 brought out the fact 
 that it was economically possible to obtain electrical energy from Niagara 
 Falls and to transmit it from the point of generation over long distances. 
 
 Ontario Decides to Adopt 
 Co-Operative Municipal Ownership 
 
 Having established the physical practicability and economy of the 
 generation and transmission, it remained to be decided by the people themselves 
 whether the desired and much needed electric service was to be owned and 
 controlled by private corporations or through the medium of a publicly-owned 
 and operated undertaking. The experience of the people of the Province at 
 the hands of the private utility corporations had been of an unsatisfactory 
 nature and such as to predispose the people very strongly against any action 
 which would to any further extent place these public resources in the hands of 
 the private companies. The private companies had shown little disposition to 
 serve any but the large municipalities or those in close proximity to the sources 
 of power, and, even in the municipalities served, the cost of the service and 
 its general character was such as frequently gave rise to expressions of dis- 
 satisfaction. 
 
 Public spirited citizens who, together with the appointed representatives 
 of the people, first had under consideration the selection of the best means 
 for supplying electrical energy at the lowest possible cost to the citizens of the 
 province of Ontario, were not unfamiliar with the economic features which 
 constituted the foundations upon which many public utilities had been reared 
 in other countries. Some of these features as, for example, the regulation of 
 rates through the agency of special Public Utility Commissions so common 
 in the United States, had been seen in numerous instances to be ineffective. 
 All factors considered, it was concluded best for economic and other reasons 
 to adopt the scheme of co-operative, municipal ownership under the guidance 
 and .control of an independent Commission freed, as much as possible, from 
 political interference. Thus the' Hydro-Electric Power Commission was 
 constituted to give expression to the principle just mentioned, in preference 
 to private ownership under the regulation of a Public Utility Commission. 
 
 In Their Rates Hydro Customers 
 Pay for Plants as well as Service 
 
 Throughout the entire development of the Hydro-Electric scheme, the 
 people of the Province have never lost sight of one fundamental, viz., that 
 under the operation of the Power Commission Act, the rates charged to the 
 ultimate consumer for service, must include a sinking fund for the retirement, 
 at maturity, of the bonds sold for the construction of the plant. This means 
 that after the maturity of the bond issues, the people will be owners, outright, 
 
RE MURRAY AND FLOOD REPORT 5 
 
 of the properties, and from that time forward the rates will be freed from the 
 portion of the costs due to interest and sinking fund charges on the bonds. 
 In other words, the people of the province of Ontario felt that if they had the 
 choice between service at equal initial rates, through a publicly-owned property 
 or a privately-owned property, it would be cheaper and more advantageous 
 to choose the publicly-owned service, because even at equal rates they would 
 he buying service plus the plant, whereas under private ownership conditions, 
 for the same money, they would be buying only service. 
 
 Through a period of years, many phases of the subject of "Public Owner- 
 ship" vs "Private Ownership" were discussed by the people, and sentiment 
 was finally crystallized by the Legislature of the Province passing the Power 
 Commission Act of 1907, which, with amendments and some additions, con- 
 stitutes the working basis of the entire Hydro undertaking. At this early 
 period, the people of the Province were thoroughly satisfied that the decision 
 adopted and the plan evolved were in their best interests, and as time has gone 
 on they have seen no reason whatsoever to regret the decision originally made. 
 
 Growth of the Undertaking of the 'Hydro' Municipalities 
 
 The 'Hydro' undertaking of the municipalities of the province of Ontario 
 has developed until it now embraces the larger portion of the more populous 
 section of the Province. The actual growth of the undertaking is well illus- 
 trated by the fact that in the year 1910, the Commission supplied 750 horse- 
 power to 10 urban municipalities; in 1915, very nearly 104,000 horsepower was 
 supplied to over 120,000 customers in 112 urban municipalities and 18 town- 
 ships; and in 1921, more than 305,000 horsepower was supplied to 265,000 
 customers in 234 urban municipalities and 44 townships, and in addition 
 about 60,000 horsepower was exported to the United States. At the present 
 time a total of about 450,000 horsepov,-er is being distributed and the total 
 investment involved, covering the activities in connection with over three 
 hundred municipal undertakings, is more than $200,000,000. 
 
 The municipalities now own and operate several hydro-electric systems, 
 including generating plants. These systems are: — 
 
 Niagara, Severn, Eugenia, Wasdells, Muskoka, St. Lawrence, Ottawa, 
 Rideau, Thunder Bay, Central Ontario, Nipissing. 
 
 Of the foregoing, the Central Ontario and Nipissing systems were pur- 
 chased by the Provincial Government in 1916, their operation being entrusted 
 to the Commission. 
 
 In 1917, the Commission acquired for the municipalities practically the 
 whole of the stock of the Ontario Power Company, whose plant at Niagara 
 Falls it now operates. On account of the great increase in load which took 
 place on the Niagara system during the v/ar, the Commission, to meet urgent 
 demands for more power, found it necessary to make a substantial addition 
 to the capacity of the Ontario Power Company's generating plant, and, pending 
 the completion of the Queenston-Chippav/a plant, the Commission found it 
 necessary also to purchase large blocks of power from the Electrical Develop- 
 
6 STATEMENT IN REFUTATION 
 
 ment Company, the Canadian Niagara Power Company and the Niagara 
 Falls Power Company. 
 
 The widespread distribution of electricity in Ontario is now taken more 
 or less as a matter of course. A map of the Province showing the 3,000 miles 
 of high-voltage transmission lines of the Hydro undertaking very clearly 
 reveals how wonderfully the water-powers of Ontario are being utilized for 
 the benefit of the people as a whole. Hundreds of communities large and 
 small are now supplied with electricity at such low rates that rich and poor 
 alike share in its many advantages. 
 
 It is well within the fact to say that nowhere else in the world do so many 
 of the general public make such extensive use of electricity in their homes as 
 is done in Ontario. Moreover, the magnitude and rate of growth of the 
 commercial and power loads on the Commission's systems indicate very clearly 
 that the decision of the municipalities to provide hydro-electrical energy "at 
 cost" has rendered its use popular for a great variety of purposes. The 
 detailed financial statement presented in this publication exhibits the sur- 
 pluses and other financial data appertaining to the operations of the Com- 
 mission with respect to the Niagara system. 
 
 Prominent Features of the Municifally-Owned 
 Hydro-Electric Power Undertaking in Ontario 
 
 In its essence, the hydro-electric power undertaking of Ontario is an organ- 
 ization of a large number of partner municipalities, co-ordinated for action 
 and operation through the medium of the Hydro-Electric Power Commission 
 of Ontario which acts as a trustee for the municipalities. The Commission 
 in its function as trustee, generates or purchases electrical energy and transmits 
 the energy to the various municipalities of the Province which can economically 
 be reached by its transmission network. In its function as trustee, the Com- 
 mission operates the generating stations and transmission systems, and, each 
 year, allocates the entire cost of operation of each system among the respect- 
 ive partner municipalities, so that each one contributes its own proper pro- 
 portionate share towards the total cost of operation. Each municipality 
 owns its local distribution system and distributes the power to the individual 
 customers in the municipality. These individual customers, in turn, are 
 charged rates which will meet the cost of power furnished to the Municipality 
 by the Commission, together with the cost of operation and management of 
 the municipal distribution system. 
 
 The Financial Structure of the Municipally- 
 Owned Electric Systems of the Province of Ontario 
 
 In order to inform people outside of the Province, it is desirable here to 
 record in concise form, the framework of the financial structure of the Hydro- 
 Electric systems, as follows: 
 
 1. The generation and transmission of power on a wholesale scale is 
 dealt with by a Commission which, although appointed by the Government of 
 
RE MURRAY AND FLOOD REPORT 7 
 
 the Province, acts independently in the capacity of trustee and agent for the 
 partnership of municipalities. 
 
 2. The local distribution of electrical energy within the borders of a 
 municipality is, in general, under the administration of a public utilities com- 
 mission appointed under the provisions of the Public Utilities Act. 
 
 3. Capital required for the plant for the generation and transmission 
 of power is provided by the Government upon receipt of formal requisition 
 from the Commission. Contracts are entered into between the Commission 
 and the municipalities under the terms of which the municipalities undertake 
 to repay in thirty years the monies thus loaned by the Government. 
 
 4. The local distribution system is financed by the issue of municipal 
 debentures. Provision is made in the rates charged to the ultimate consumers, 
 for revenue with which to retire these bonds also, usually in twenty years. 
 
 5. The "trustee" Commission supplies power at wholesale rates to the 
 municipalities, charging each municipality the actual cost. To do this, an 
 interim charge is made monthly based upon the estimated cost and, at the end 
 of each year, credit or debit adjustment is made of the amount charged, in 
 order to make up the actual total cost, — no more and no less. 
 
 The "cost of power" includes all the usual costs of operation and mainten- 
 ance of the generating, transforming and transmission plant and equipment, 
 and, in addition, the annual interest charges on the monies borrowed for the 
 initial cost of installation, also provision for renewal (depreciation) and sinking 
 fund reserves, as well as a special reserve fund for contingencies. 
 
 The sinking funds are, of course, for the purpose of repaying, at the end 
 of a stated period — usually twenty or thirty years — the capital borrowed. 
 The renewal reserve fund is used for the replacement of plant which, either 
 through wear, old age, or the invention of better engineering devices, has be- 
 come unsuited to perform its duties. As relatively little replacement of this 
 nature is needed during the first years of operation of a plant, this renewal 
 money is not immediately used, but is mostly held in reserve for future require- 
 ments and in the meantime it draws interest. Contingency reserve makes 
 provision for extraordinary or unforeseen demands arising from accidents, 
 storms, or similar causes. Thus, not only do the municipalities pay as part 
 of the cost of power, sums sufficient to assure for themselves a perpetual, 
 modern and efficient service but, in addition, their generating and trans- 
 mitting plant, at the time of the maturity of the bonds, w^ill be free of debt, 
 and their electrical service costs will thenceforward be relieved of the interest 
 and sinking fund charges which at present constitute a very considerable pro- 
 portion of the wholesale cost of power. 
 
 6. Each municipality sells electrical energy to its ov/n local consumers at 
 rates and under conditions approved by the Commission, which, in this respect, 
 functions in a manner similar to the regulatory Commissions in the United 
 States. The rates charged to its own consumers by a municipality are made 
 
8 STATEMENT IN REFUTATION 
 
 sufficient to take care both of the cost of distribution within the municipality 
 and of the estimated cost of power to be paid to the Commission by the mun- 
 icipality. The cost of distribution is ascertained in a manner identical with 
 that used by the Commission in arriving at its wholesale costs. 
 
 Inasmuch as the annual sinking fund and interest charges constitute at 
 present upwards of forty per cent of the total cost of power, it is clear that as 
 the successive issues of the municipal and provincial bonds are retired, and 
 interest and sinking fund charges thereon become correspondingly less, con- 
 sumers will obtain their power still more cheaply than at present. 
 
 In the case of individual consumers it is, of course, not practicable to 
 render at the end of the financial year a supplementary bill or to give a 
 credit note as the case may be, in order to adjust the charges made during the 
 year to equal the exact cost ; therefore, the ad justment or balancing is effected 
 by raising or lowering the rates for the succeeding year. The progressive lowering 
 of the rates which has thus actually been possible in most of the municipalities 
 served by the Commission has resulted in such a rapid increase in the sales of 
 power that the lowered rates have been unable to keep pace with the steadily 
 reducing costs of the service, with the final result that in the majority of cases 
 considerable surpluses have annually resulted. Such surpluses are applied 
 either to the reduction of debt or to the provision of additional equipment. 
 
 7. Under the Power Commission Act, the Commission is required to 
 determine, annually, the actual cost of service supplied to the municipal 
 corporations by the local commissions for such strictly municipal purposes 
 as street lighting and operating electric-motor-driven pumps in waterworks, 
 and if any profit has accrued through the charging of the rate used tlirough- 
 out the year, this surplus is handed back to the municipal treasurer. 
 
 The soundness of the Hydro undertaking is well evidenced by the large 
 "Balance Sheet" presented with this statement. This sheet sets forth in de- 
 tail the financial relationship existing between the Commission and the re- 
 spective municipalities in the Commission's oldest and largest system — the 
 Niagara system 
 
RE MURRAY AND FLOOD REPORT 
 
 True Character of the "Murray Report" Disclosed 
 
 Having thus reviewed some of the prominent and unique features of the 
 work of the Hydro-Electric Power Commission of Ontario, attention may- 
 be directed specifically to the character of the Murray Report. 
 
 Anyone familiar with the representations made by Mr. Murray in his 
 report respecting the work of the Hydro-Electric Power Commission will 
 recognize how very different many of his statements are from the foregoing 
 authentic description of the operations of the Commission. But in addition 
 to such vagaries, Mr. Murray in his report makes grossly incorrect and mis- 
 leading statements; he garbles documentary and other data and then employs 
 them as premises from which to derive conclusions; he makes pronouncements 
 based on comparisons so inadequate that they are puerile; he makes charges 
 which he fails to substantiate; he ignores important factors, even disregarding 
 most pertinent engineering data and, in general, Mr. Murray adopts methods 
 which are manifestly reprehensible and unprofessional. Obviously, conclus- 
 ions reached through the employment of such means are necessarily worthless. 
 That the charges here made are fully justified will be clear from the illustrations 
 of Mr. Murray's methods presented in the following discussion. 
 
 It would be impracticable to review all the material which Mr. Murray 
 has copied into his volume. The Murray Report is heavily 'padded' with 
 statistics, copies of legislation and other information found chiefly in the 
 annual and other published reports of the Hydro- Electric Power Commission 
 of Ontario. This material, it is true, makes an imposing 'exhibit' but, in view 
 of the fact that so much of it has been ignored by Mr. Murray in drawing his 
 conclusions and that its relevance to the subjects under discussion is often 
 quite remote, the material appears to have been inserted largely in order to 
 create an impression of 'exhaustiveness.' That Mr. Murray's expressions of 
 "opinion" are unworthy of consideration will be evident after the general 
 character of his report becomes appreciated. 
 
 Mr. Murray Purposely Confuses 
 
 "Government Ownership" with "Municipal Ownership" 
 
 Throughout his report Mr. Murray persistently uses the term "Govern- 
 ment Ownership" as applying to the undertaking of the Hydro-Electric Power 
 Commission of the province of Ontario. 
 
 With respect to his peculiar and prominent use of the term "Government 
 Ownership" Mr. Murray in his report states: 
 
 "The term 'Government Ownership' needs explanation. In Ontario 
 this term, used throughout the report, is associated with both the Central 
 and Local Government." 
 
10 STATEMENT IN REFUTATION 
 
 Here, Mr. Murray arbitrarily declares that in Ontario and throughout his 
 Report the term "Government Ownership" is associated with local, — or mun- 
 icipal — ownership just as with central government ownership. Mr. Murray's 
 statement regarding the accepted meaning in Ontario of the term "government 
 ownership" is not correct. In Ontario, this term signifies ownership by the 
 provincial or federal government — that is, by the central authority — and not 
 ownership by the municipality. 
 
 Mr. Murray follows his definition of "Government Ownership" — as 
 above quoted — by explaining that 
 
 "In the States 'Municipal Ownership' has reference to a City only." 
 
 Now, in Ontario "Municipal Ownership" carries just the same significance 
 as in the States, except that in Ontario it comprises not, as Mr. Murray ex- 
 plains, the "City only," but also towns, villages and other smaller communities. 
 Consequently, it is clear that neither in the United States nor in Ontario has 
 Mr. Murray justification for attaching to municipal ownership the name of 
 "Government Ownership" nor for the special significance which he attaches 
 to the latter term. Such a significance is especially unwarranted when the 
 term is employed in the manner in which Mr. Murray uses it "throughout" 
 his report. 
 
 It is widely recognized that many efforts of "Government Ownership" 
 in the United States have fallen far short of the goals sought, and thus in the 
 United States the term "Government Ownership" has an especial obloquy 
 attached to it. "Government Owmership" not infrequently carries as a con- 
 comitant, political domination in the appointment of employees, in the pur- 
 chase of supplies and equipment and in various other more or less hidden 
 ramifications, which inevitably tends towards inefficiency and mismanagement. 
 These destructive agencies are completely lacking in the functioning of the 
 Hydro-Electric Power systems in the province of Ontario. Moreover, the 
 people are thoroughly well aware of this fact and are firmly resolved that 
 matters shall so continue. Even the bitterest enemies, whether domestic or 
 foreign, of the Ontario public ownership plan, are forced to concede the ad- 
 vantages of the wise provisions which guard against political interference. 
 
 It was vital to Mr. Murray's presentation that, by some means, he should 
 identify the undertaking of the Hydro-Electric Power Commission with 
 government ownership, in order that the stigma of government ownership as 
 commonly understood should be transferred to the unique, co-operative, 
 municipal-ownership undertaking of the Commission and thus aid in casting 
 discredit upon. the achievements of the people of the province of Ontario 
 in obtaining their hydro-electrical energy at cost. Mr. Murray's sophistry 
 as displayed in the quotation under discussion, can deceive no one, once 
 attention is directed to the shallowness of his subterfuge. 
 
 It may just be added that, after all, the real issue underlying the subject 
 under discussion is not the question of "ownership," per se, but the question 
 of what kind of control and administration is exercised by the governing or 
 
RE MURRAY AND FLOOD REPORT 11 
 
 administering body. Had Mr. Murray emphasized this feature of admin- 
 istration, he would have displayed a grasp of the subject which is not in any 
 sense disclosed by his erroneous and unfair use of the term "Government 
 Ownership." 
 
 Mr. Murray Garbles Documentary Data 
 
 Mr. Murray in his report makes various statements regarding his con- 
 ception of the powers legally vested in the Commission. Inasmuch as Mr. 
 Murray had all the legislation before him, any direct misrepresentation of such 
 documentary data must cast serious reflection upon his methods. 
 
 Mr. Murray states that: 
 
 " legislation has been constantly passed so that the Commission 
 
 is entirely free from any character of inhibition; barriers, legal or otherwise, 
 are levelled to give free swing to the conscience and action on the part 
 of the Commission. 
 
 "A power of procedure has thus been granted to the Commission, 
 unlimited." 
 
 This, then, is the conclusion Mr. Murray draws from his study of the 
 operations of the Hydro-Electric Power Commission and of its special powers 
 as conferred by the provincial Legislature. The extent of the liberty Mr. 
 Murray is ready to accord himself in altering and misconstruing documentary 
 records is revealed by the following examples: 
 
 On page 9 of his Report, Mr. Murray states:* 
 
 "One of the Power Acts reads: 
 
 "The Commission shall have the exclusive jurisdiction as to all 
 matters in respect of that authority as by Act conferred upon it and nothing 
 done by the Commission within its jurisdiction shall be open to question 
 or review in any action or proceeding or by any Court" — 
 
 The clause most nearly resembling Mr. Murray's alleged quotation from 
 the Act occurs in "The Power Commission Amendment Act, 1911," and is 
 as follows: 
 
 "The Commission shall have exclusive jurisdiction as to all matters 
 in respect of which authority is, by this Act, conferred upon it and nothing 
 done by the Commission within its jurisdiction shall be open to question 
 or review in any action or proceeding or by any Court." 
 
 As Mr. Murray knows, all the Power Commission Acts passed prior to 
 1914 were revised and consolidated in Chapter 39 of the "Revised Statutes 
 of;Ontario, 1914," and the 1911 Amending Act was then superseded by the 
 consolidation and the section quoted above stands since 1914, as follows: 
 
 "The Commission shall have exclusive jurisdiction as to all matters 
 in respect of which authority is, by the next preceding three sections, con- 
 ferred upon it, and nothing done by the Commission within its jurisdiction 
 shall be open to question or review in any action or proceeding or by any 
 court." (R.S.O. 1914, c. 39, s. 34). 
 
 ^ Here, and in some other Instances, certain words in quotations have been italicired for purpose of emphasis. 
 
12 STATEMENT IN REFUTATION 
 
 It will be observed that Mr. Murray's alleged quotation from the Act 
 has departed from both the original and the present form of this clause and 
 in such manner as essentially to alter its meaning. 
 
 Comparing the phrase, as given by Mr. Murray 
 "in respect of that authority as by Act conferred upon it," 
 with the phrase actually occuring in the 1911 Act 
 
 "in respect of which authority is, by this Act, conferred upon it" — 
 
 it will be seen that the word this has been omitted by Mr. Murray, and two 
 other changes have been made. The alleged quotation, as given by Mr. 
 Murray, would make it appear that the clause relates to the operations of the 
 Commission as a whole instead of referring only to the relatively unimportant 
 and special features defined in this Act — namely, the 1911 Amending Act — 
 and as defined also by the qualifying phrase "by the next preceding three 
 sections" — which appears in Chapter 39 of the Revised Statutes. As a matter 
 of fact, the 1911 Act and "the next preceding three sections" of the 1914 
 consolidation, refer solely to a comparatively unimportant power of the Com- 
 mission which permits it to approve of certain matters relating to the joint con- 
 struction of lines on highways and in which connection the Commission acts in 
 the capacity of a regulatory commission. It is, therefore, clear both from the 
 original Act and from its present form, that the exclusive jurisdiction of the 
 Commission was very strictly limited, and not, as Mr. Murray so incorrectly 
 states, "unlimited." 
 
 Mr. Murray Misrepresents Hydro Legislation 
 
 Mr. Murray in his Report makes the following statement: 
 
 "A remarkable situation created by one of the laws passed under the 
 Power Commission Acts requires that a municipality assume the debt to 
 provide the facilities necessary to the supply of power to an individual or 
 corporation in that municipality, if request for pov/er is made, and the 
 only recourse to recovery if the bills for power are not paid is the levy 
 of tax against the party contracting." 
 
 The "situation" would indeed be "remarkable," were Mr. Murray correct 
 in his statements, but evidently he has failed to understand the principle and 
 purpose of the Act to which he refers. 
 
 Mr. Murray's statement is contrary to the fact in two important par- 
 ticulars. In the first place, the portion of the Act referred to, which is for the 
 accommodation of persons in those municipalities not served with Hydro 
 power, permits but does not in any way require the municipality to contract 
 or in any manner to assume liability, for the supply of such power. 
 In the second place, the privilege of recourse for the recovery of unpaid 
 bills for power through the levy of tax is not, as Mr. Murray states, 
 the "only recourse," but is granted only as an additional safeguard and conven- 
 ience, and does not in any way prejudice the municipality's right of recovery 
 through the ordinary process of law. As a matter of fact, this provision regard- 
 
RE MURRAY AND FLOOD REPORT 13 
 
 ing the collection of bills through the taxes is primarily a provision of the Public 
 Utilities Act of the Province and applies to all publicly owned and operated 
 services. It may be added, that the parties applying for power, must, along 
 with their application, provide evidence of their possessing sufficient property 
 to constitute adequate security to the municipality in case of default in carry- 
 ing out the terms of their contracts. Appreciation of the facts just recited 
 will show how very incorrectly Mr. Murray has represented the intent and 
 provisions of the legislation to which he refers. 
 
 Mr. Murray Grossly Misstates 
 the Fact Respecting Fiats 
 
 Mr. Murray on page 10 of his report refers pointedly to a "suit brought 
 and won by the Toronto Power Company against the Ontario Power Company 
 owned by the Commission." Commenting upon this, Mr. Murray says that, 
 
 "Had the Ontario Power Company lost its corporate identity, in 
 accordance with the Power Commission Act, no suit could have been 
 brought, since the Commission cannot be sued without fiat from the 
 Attorney-General, and to date no fiat has ever been granted." 
 
 The statements that "no suit could have been brought, "and "to date no 
 fiat has ever been granted," are utterly without foundation and contrary to 
 fact. Since 1912, more than twenty-five fiats have been granted by the 
 Attorney-General to permit legal action to be brought against the Commission. 
 With a single exception, every party that has desired to bring suit against 
 the Commission has been granted a fiat by the Attorney-General, and even 
 in this one exceptional case the reason for withholding the fiat was not to 
 shield the Commission, but because the applicants coupled the Attorney- 
 General with the Commission in the hope of involving the Province in a manner 
 which would clearly have been contrary to the public interest. 
 
 Mr. Murray's bald mis-statement of such an important and fundamental 
 fact regarding the Commission is inexcusable and casts grave doubt upon the 
 trustworthiness of his statements and especially upon the claim made of dealing 
 with matters under discussion in an "exhaustive" manner. 
 
 General Misrepresentation Respecting Fair Dealing 
 
 With reference to general misrepresentations by Mr. Murray of the 
 Commission's position with respect to various matters, it may be instanced 
 that Mr. Murray states: 
 
 "I cannot find justice in a jurisdiction which permits the Commission 
 to recover damages by process of law when persons contracting with it 
 are not allowed the same relief." 
 
 It has just been shown that Mr. Murray's contention that the Commission 
 occupies a specially favoured position with respect to fiats is absolutely in- 
 correct, and, this phrase is equally applicable to his general charge as summar- 
 ized in the quotation just given. It should fully be appreciated that the 
 object of requiring a fiat is not to work any injustice to those with whom the 
 Commission has relationship but simply to avoid litigation of an unnecessary 
 
14 STATEMENT IN REFUTATION 
 
 and vexatious nature. The rights of all parties concerned are comprehensively 
 taken care of under provisions of the Arbitration Act. For example, the 
 Commission's contracts with both private and corporate interests provide that 
 matter of dispute shall be dealt with under the Arbitration Act of the province 
 of Ontario, and under such procedure there can be no possible advantage to any 
 of the parties. The following citation from one of the Commission's contracts 
 will illustrate the kind of provision made to ensure fair treatment for all: 
 
 "THAT in case of any dispute arising between the parties relative 
 to the fulfilment of any of the terms, provisos or conditions of this agree- 
 ment, or as to the method or accuracy of the measurement of power, 
 or any other question which may arise under this agreement, the same 
 shall be promptly referred to arbitration under the Arbitration Act, and 
 the finding of said Arbitrator or Arbitrators shall be final and binding 
 upon both parties hereto." 
 
 Another instance from his report will serve to exemplify the kinds of 
 facts Mr. Murray fails to quote on behalf of the Commission, but which, if 
 quoted, would absolutely nullify such general statements as that expressed by 
 him as follows: 
 
 "There are a very considerable number of persons and corporate 
 interests in Ontario who possess the feeling that the Commission has 
 dealt with them unfairly, and, notwithstanding the inherent fairness of 
 mind possessed by Sir Adam Beck, it is plain that corporate advantage 
 has been taken under the powers granted the Commission." 
 
 In the first place, it is very unlikely that an outsider like Mr. Murray 
 would be circumstanced to pass an unprejudiced judgment upon the subject 
 to which he refers, if for no other reason than that he has not brought such 
 cases as he may have in mind to the attention of the Commission in order 
 that he might be in possession of knowledge from both sides of the case. The 
 Commission believes that where all the facts which have governed in de- 
 cisions are considered, it will be evident not only that the Commission has 
 desired to deal fairly, but also that in all cases a reasonable and just decision 
 has actually been determined. 
 
 In replying to such a general charge as Mr. Murray has made in the 
 quotation above given, and by way of illustrating the fairness of its dealings 
 with the public, the Commission would say that: although under the Power 
 Commission Act the Commission possesses the right to expropriate private 
 plants, nevertheless,^with a single exception involving a case which at present 
 is under consideration — the Commission since commencing its operations has 
 never exercised its powers of expropriation, although it has purchased no less 
 than twenty water-powers, thirty hydraulic generating plants and over sixty 
 electric distribution systems. In every such transaction the Commission 
 has negotiated fair terms, satisfactory to the interests immediately involved, 
 to the municipality or municipalities concerned, and to the public at large. 
 This fact is sufficient proof of honorable and fair dealing on the part of 
 the Commission, and is also ample refutation of Mr. Murray's charge. Such 
 statements as he has here made are certainly not "impartial," but are hasty and 
 unwarranted. 
 
RE MURRAY AND FLOOD REPORT 
 
 15 
 
 Mr. Murray Ignores Half the Cost of Buffalo Street Lighting 
 
 Under the caption of "The Cost of Street Lighting Compared in Toronto, 
 Buffalo, and Montreal," Mr. Murray purports to have under comparison the 
 per capita cost of street lighting to the city of Buffalo with the per capita 
 cost of street lighting to the city of Toronto. Mr. Murray, either v/ittingly 
 or otherwise, makes direct misrepresentation regarding the cost of street 
 lighting in the city of Buffalo. Apparently, he has totally ignored the fact 
 that in Buffalo, in 1920, out of a total of 15,000 street lights, over 8,800 were 
 not electric, but were gas or gasoline lights. 
 
 Mr. Murray, with regard to street lighting in Buffalo, states, 
 
 "In Buffalo the price has changed very slightly, ranging from 53 
 cents per capita in 1913 to 60 cents per capita in 1920." 
 
 As a matter of fact, in 1 920, the cost of street lighting in Buffalo was not, as 
 Mr. Murray represents it to be, 60 cents, but $1.15 per capita. The following 
 table for 1920 gives the actual street lighting data for Buffalo and for Toronto. 
 
 TABLE I 
 
 Cost of Street Lighting in Buffalo and Toronto in 1920 
 
 City 
 
 Population 
 
 Type of Lamp 
 
 Number of Lamps 
 
 Lamps per 1000 population 
 
 Cost of Street Lighting 
 
 Cost per Lamp per year (A v.) 
 Cost per capita 
 
 Buffalo* 
 505,875 
 
 Electric 
 
 Gas 
 
 Gasoline 
 
 All 
 Lamps 
 
 Toronto 
 499,278t 
 
 All 
 Lamps 
 Electric 
 
 6161 
 
 12.2 
 
 $286,196 
 
 $46.50 
 
 $0.56 
 
 8796 
 
 17.4 
 
 $295,447 
 
 $33.60 
 
 $0.58 
 
 62 
 
 0.1 
 
 $3,136 
 
 $50.52 
 
 $0.01 
 
 15,019 
 
 29.7 
 
 $584,779 
 
 $38.90 
 
 $1.15 
 
 43,310 
 
 86.8 
 
 $335,370 
 
 $7.74 
 
 $0.67 
 
 •Ballard — Report on Street Lighting Costs in the Larger Cities of the United States of America, 1920, Cleveland, 1920. 
 tThis population, which Mr. Murray has used, though reported with the municipal statistics for 1920, is the 1919 
 population. The 1920 population indicates a cost for Toronto of only 65 cents per capita. 
 
 It is interesting to note that Toronto, with little more than half the total 
 expenditure for street lighting, maintains nearly three times the number of 
 street lights that Buffalo does. 
 
 Since Mr. Murray has made no reference to the fact that nearly $300,000 
 per year is paid by the city of Buffalo for lighting its streets by gas and gasoline, 
 it is possible that he was ignorant of the fact that Buffalo, unlike Toronto, 
 is not wholly lighted by electricity. If Mr. Murray knew this fact and deliber- 
 ately neglected to include the cost of gas street lighting in Buffalo in his "cost 
 of street lighting," his statement — "In Buffalo the price has changed very 
 slightly, ranging from 53 cents per capita in 1913 to 60 cents per capita in 
 1920," — has deliberately misrepresented the fact, and in so doing cannot possibly 
 be excused. A blunder or misrepresentation involving but a small proportion 
 of the total might be condoned, but when Mr. Murray, with the purpose 
 of showing that street lighting costs in Toronto are higher than street lighting 
 
16 STATEMENT IN REFUTATION 
 
 costs in Buffalo, represents the cost of street lighting in Buffalo to have been 
 but 60 cents per capita, whereas, actually, it was $1.15 per capita, he has out- 
 stepped the bounds of excusable error. 
 
 An Example of Mr. Murray's Methods ' 
 
 Hia Comparison of Ontario and California 
 
 As a typical example of the method adopted by Mr. Murray to mislead 
 his readers, attention may be directed to the way in which he presents his 
 comparison of the average costs of power to the people of California and 
 Ontario. Mr. Murray emphasizes in some detail that there are differences to 
 be considered — in order to be, as he expresses it, "only fair to California in 
 making a comparison of its power costs to those of Ontario," and directs his 
 readers' attention to the disadvantages of water power developments in Cali- 
 fornia and the advantages of Niagara Falls and the Niagara District in com- 
 parison therewith. 
 
 He states for example: 
 
 "it is important to remember... that Niagara Falls, combining its con- 
 tinuous flow of water with its high head, should make the production 
 of continuous power the cheapest for any part on the American Continent 
 This should be kept in mind especially when the comparison is drawn for 
 the California situation, where the hydro electric power developments 
 are small in capacity and subject to variation in stream flow, thus requiring 
 that their systems be supplemented with steam electric plants." 
 
 and again, on the second page following under the heading "California Com- 
 pared to Ontario," he states: 
 
 "In California, electricity is produced and transmitted under far 
 more disadvantageous conditions than those obtaining in the Niagara dis- 
 trict of Ontario. In California, 41% of all the generating capacity is 
 represented by steam-electric plants. Obviously, therefore, such a 
 physical situation does not lend itself to the production of cheap power to 
 the extent possible by the electric utilities receiving power from Niagara 
 Falls." 
 
 Having thus described the characteristics which he wishes his readers to bear 
 in mind, "when the comparison is drawn for the California situation," and 
 having, by his specific references to the advantageous position enjoyed by the 
 electric utilities receiving power from Niagara Falls, created an "atmosphere" 
 in which the reader is ready to admit, for the sake of argument, that the water 
 powers of California must of necessity be smaller and less advantageously 
 situated than the great power developments at Niagara, Mr. Murray proceeds 
 to his comparison, and states "the average cost of pov/er to the people of 
 California is less by 4% than that to the people served by the systems other 
 than the Niagara in Ontario." 
 
 Now the sum of the loads on all the systems "other than the Niagara" 
 system is only one-seventh of the totalloads of the Hydro including the Niagara 
 system. In other words, Mr. Murray calls attention to the specially advan- 
 tageous situation of the Niagara system, which uses six-sevenths of the total 
 power of the Hydro systems, and then ingeniously switches to a comparison 
 
RE MURRAY AND FLOOD REPORT 17 
 
 with the Hydro systems other than the Niagara which altogether use only 
 one-seventh of the total power. 
 
 Thus it will be seen that the Niagara system to which Mr. Murray directs 
 his readers' special attention has nothing at all to do with the comparison 
 he actually makes. The fact that the power developments serving the other 
 systems of the Commission have none of the advantages of Niagara Falls 
 "combining its continuous flow of water with its high head" matters not to 
 Mr. Murray. The fact that in the actual "comparison" he makes he leaves 
 out the Niagara system which supplies eighty-five per cent of the Commission's 
 power, is to him equally unimportant. 
 
 Not only has Mr. Murray, in making his comparison, omitted the Niagara 
 system, but he has evidently omitted the second largest Hydro system — 
 the Central Ontario system — for in his general discussion of the question of 
 the "Cost of Power to the People," he states, "For the comparisons betv^een 
 government electric utilities in Ontario and those for privately-operated 
 companies, the Central Ontario system of the Hydro-Electric Power Com- 
 mission is omitted " 
 
 It may here be pointed out that it is usually difficult and frequently 
 impossible to ascertain from Mr. Murray's report just what he is actually 
 comparing. For instance, in the case of California, the general impression 
 conveyed is that comparisons are being made with the v/liole of the State, 
 nevertheless, elsewhere, Mr. Murray refers to "that section of California 
 analysed" but where situated, or what constitutes the confines of the "section" 
 analysed, Mr. Murray fails to state. 
 
 Mr. Murray's actual comparison plainly ignores the Commission's two 
 largest systems and embraces only the smaller systems. The cost of power 
 from these relatively small projects is "compared" with the cost in California 
 where over a million horsepower is developed and where the electrical energy 
 "delivered to agricultural industry" alone amounts, states Mr. Murray, to 
 about 500,000 horsepower. Yet Mr. Murray has the effrontery to set forth 
 his "impartial and exhaustive" study in this connection under the caption 
 "California compared to Ontario," when, evidently, his comparison is made 
 not on this broad basis, nor between California and the Hydro-Electric Com- 
 mission systems as a whole, nor even between California and the only Hydro 
 system which, in magnitude, is at all comparable with California, namely, 
 the Niagara System, but between an undefined "section of California analysed" 
 and the smaller and relatively unimportant systems of the Hydro-Electric 
 Power Commission serving the less populous sections of Ontario and represen- 
 ting less than one-seventh of the total load on the Hydro system. 
 
 When it is considered that in spite of his devious methods, Mr. Murray 
 has been able to claim for the cost of power in California an advantage of only 
 four per cent over systems other than the Niagara, his comparison becomes 
 foolish in the extreme, and his expedients in this connection constitute in them- 
 selves a striking testimony to the cheapness of power under the operation of 
 the Hydro. With respect to Mr. Murray's method the reader himself may be 
 the judge. There is nothing "fair," there is nothing "impartial," in such 
 trickery. 
 
18 STATEMENT IN REFUTATION 
 
 Hydro Rates and their Influence 
 On the Concentration of Industries 
 
 Mr. Murray, with respect to the method employed for the determination 
 of rates, states that, 
 
 "The rate-making method employed by the Hydro-Electric Power 
 Commission of Ontario favors those municipalities located near the sources 
 of power and in close proximity to the main transmission lines. The 
 lower rates for power to such municipalities cannot avoid the eventual 
 concentration of industry in a few of these favorably located municipali- 
 ties, and this rate system must, by its very structure, tend to retard in- 
 dustrial development over the Province as a whole." 
 
 This statement by Mr. Murray does not accord with the facts. Re- 
 specting the concentration of industry, the Hydro-Electric Power Commission 
 has been supplying electrical power for over ten years and there is no 
 evidence that, as a result of "Hydro" operations, concentration has taken 
 place, nor does Mr. Murray attempt to demonstrate that it has. He charges 
 that in the future there will be "eventual concentration." As opposed to 
 Mr. Murray's statement above quoted, it may be stated that the distribution 
 of electrical energy as accomplished by the Hydro has made electrical power 
 available in the smaller municipalities and over an extensive area at rates 
 far below those at which the service could be produced or delivered locally 
 by private companies or by the individual municipalities themselves. This, 
 in itself, tends towards decentralization of industries, and has resulted in 
 retaining in, and attracting to, both the smaller and the more distant places, 
 those industries which — apart from the question of power — would naturally 
 be domiciled or attracted there. 
 
 Of course, there are certain works, such as those of the pulp and chemical 
 industries, which must have large blocks of power at low rates in order to 
 operate successfully; these usually are compelled to gravitate to the sources 
 of power. It is especially noteworthy that concentration in the vicinity of 
 water powers of those industries which require large amounts of power is a 
 striking feature of large developments under private ownership. Mr. Murray 
 conveniently overlooks this fact, although he naively admits elsewhere that 
 "the transmission distances to reach their [Hydro] customers are generally 
 greater than those of the private companies, compared thereto." 
 
 In the more remote areas of the Niagara System — from forty miles to 
 some two hundred and fifty miles distant from Niagara — Hydro power is 
 distributed in the larger centres alone to the extent of over 130,000 horsepower, 
 and of this amount more than twenty-five per cent is supplied to municipalities 
 situated more than one hundred miles distant from Niagara Falls. This 
 certainly is not "concentration of industry" at the source of power. 
 
 Again, and by way of example, in the town of Walkerville, situated 240 
 miles from Niagara, the cost of power is over twice that in the city of Niagara 
 Falls, Ontario, nevertheless, in the last six years the town of Walkerville 
 secured over four times as many new industries as the city of Niagara Falls. 
 
RE MURRAY AND FLOOD REPORT 19 
 
 An examination of all the facts will conclusively demonstrate that, far 
 from tending — as Mr. Murray unjustly charges — to "retard industrial de- 
 velopment over the province as a whole," no other individual factor has con- 
 tributed more to the general industrial progress of Ontario "as a whole," 
 than have the operations of the Hydro-Electric Power Commission acting on 
 behalf of the associated municipalities of the Province. 
 
 No Such Discrimination in Rates 
 As Mr. Murray Alleges 
 
 Mr. Murray in referring to the subject of Hydro rates states in his report 
 that: 
 
 "It is very plain that the method pursued must automatically 
 
 lead to discrimination in rates." 
 
 and under the heading, "Un-uniform Power Costs in Ontario," he states: 
 
 "An example of this is the price paid for power in 1919 in the cities 
 of Toronto and Bolton, where the figure was $16.70 per horsepower 
 year for Toronto, and $53.80 per horsepower year for Bolton, notwith- 
 standing the small distance apart. 
 
 "The rate structure of the Hydro-Electric Power Commission 
 
 must necessarily bring about such a result. It is my opinion that a rate 
 structure so planned is fundamentally wrong." 
 
 Owing to the many differences in underlying circumstances such as differ- 
 ences in situations, in amounts of power required and other factors, it is 
 conceded that it is very improbable that any two municipalities can be 
 supplied with hydro-electric power from a distant source at the same actual cost 
 per horsepower, and without hesitation it is admitted that the rate structure 
 of the Hydro-Electric Commission does inevitably bring about un-uniform 
 power rates to the municipalities, for the very simple and obvious reason that 
 each municipality is supplied at the actual cost of the service to that particular 
 municipality and the costs per horsepower to the various municipalities 
 necessarily differ. 
 
 Such fundamental differences are recognized in practically all spheres of 
 business activity. Wholesale prices differ from retail prices, and, moreover, 
 no one would expect to purchase goods delivered 200 miles distant from the 
 factory at the same price as he would pay f.o.b. at the factory, nor would he 
 expect to obtain goods in small quantities for the same price as in carload lots. 
 Similarly, in the business of electrical supply, the price per horsepower must 
 vary, not only according to the distance from the generating source, but also 
 according to the quantity transmitted; other factors also have to be taken 
 into consideration and consequently the Commission with respect to its rates 
 differentiates according to the various governing basic conditions. It should 
 be appreciated that, due to diversity and other factors, differences in rates to 
 consumers are usually smaller than the differences in the wholesale rates to 
 the same municipalities. Under the Commission's plan, it is possible to 
 supply electricity at attractive rates to places so small or so remote from the 
 
20 STATEMENT IN REFUTATION 
 
 source of power that no company would consider delivering power under 
 such conditions. 
 
 If Mr. Murray prefers that the larger municipalities, and those located 
 nearer to the source of power, should help to pay for the power required by the 
 smaller and the more remote municipalities, he must do so from an altruistic 
 standpoint. This may be Mr. Murray's "opinion" but it does not in any way 
 alter the fact that the plan of the Commission's rate structure — charging each 
 municipality in proportion to what it costs to render the service — is not "funda- 
 mentally wrong" but is fundamentally right. 
 
 Mr. Murray cites as an instance of what he terms "discrimination" on 
 the part of the Commission, the "cities of Toronto and Bolton," situated 
 at approximately equal geographic — although not at equal transmission 
 line — distances from Niagara Falls. The respective populations of these 
 communities are about 500,000, and 675. Mr. Murray states that in 1919, 
 the cost of power supplied to the city of Toronto was $16.70 per horsepower 
 per year, whereas the cost of power supplied to the village of Bolton was $53.80 
 j^r horsepower per year. Does Mr. Murray wish it inferred that power 
 can or should be supplied to both these municipalities at the same rate, and 
 that this would be the case were the supply furnished by a private company? 
 In reality, the amount of power used by the village of Bolton, which is sit- 
 uated approximately 30 miles from the city of Toronto, was in 1919, less 
 than 90 horsepower, and no private company would even have constructed 
 lines to supply any electrical service to this village. Under private ownership, 
 a village situated as is Bolton, would be forced to obtain its electric power 
 locally from a small, inefficient steam or producer-gas plant, or forego the 
 conveniences of electricity. 
 
 To the city of Toronto which purchases some 60,000 horsepower the cost 
 per horsepower is naturally much less than that for the village of Bolton 
 which, even at the present date, takes but 120 horsepower, because the Com- 
 mission can provide the equipment essential for the delivery of 60,000 horse- 
 power to the city of Toronto at a lower rate per horsepower than it can provide 
 the equipment for the delivery of but 120 horsepower to a village even though 
 situated, as Mr. Murray points out, at about the same distance from the 
 source of power. 
 
 The Hydro municipalities all recognize the inherent fairness of this plan 
 of "power at cost" and are satisfied that the policy of the Commission respecting 
 rates for electrical service works out to the best advantage of all the municipali- 
 ties concerned. 
 
 Although the Commission does not launch out into any such quixotic 
 scheme as that advocated by Mr. Murray, nevertheless, there is no doubt 
 that the plan adopted has resulted in the greatest good to the greatest number, 
 and that far more people are now enjoying the benefits of Hydro service 
 than could have been the case if any uniform rate plan had been adopted. 
 
RE MURRAY AND FLOOD REPORT 21 
 
 Co-operative Municipal Ownership 
 Has Not Throttled Initiative in Ontario 
 
 In his report Mr. Murray states, 
 
 "Government Ownership eliminates all incentive for gain and throttles 
 initiative. This is evidenced by the far greater growth of privately- 
 owned utilities." 
 
 In the conduct of the Ontario co-operative municipal-ownership system, 
 there is substituted for the "incentive for gain," the desire to reduce, as low 
 as possible, the rates at which electrical energy is supplied to the ultimate 
 consumers who are the real owners of the systems. Although there is no 
 "incentive for gain" in the Commission's undertaking, nevertheless, the desire 
 on the part of the co-operating municipalities for reasonable rates is sufficiently 
 strong, and exerts sufficient pressure upon those charged with the operation 
 of the systems, to effectually prevent any "throttling of initiative." The 
 best evidence that initiative has not been throttled, lies in the numerous and 
 consistent reductions which have been made in rates, as clearly set out in the 
 Commission's annual reports. The people of the Province are well able to 
 judge respecting the rate of growth of the Hydro-Electric undertaking. As 
 yet no dissatisfaction has been expressed with the rate of expansion of the 
 systems. Further on, figures are given which bear witness to a rate of growth 
 such that it is very doubtful whether any bona fide demonstration can be given 
 that it is surpassed, if indeed paralleled, by any other system in the world. 
 
 Mr. Murray Jumps to Unjustifiable 
 Conclusions Respecting Municipal Taxation 
 
 Mr. Murray has dealt at length with the subject of municipal taxation 
 in the endeavour to attribute to the operations of the Hydro-Electric Power 
 Commission the fact that certain municipalities receiving Hydro service have 
 somewhat heavier taxes than have other municipalities which do not take 
 Hydro service. As a matter of fact, it is obvious that Hydro service must 
 reduce the taxes because the Hydro Commission supplies municipal electric 
 services such as street lighting and waterworks pumping "at cost." 
 
 In his treatment of this subject, Mr. Murray has compared groups of 
 municipalities which differ in average population by over one hundred per 
 cent; he has compared groups of municipalities whose inhabitants differ not 
 only in race, customs, and education, but also in wealth and in individual 
 productive capacity to the extent of at least fifty per cent. He has practically 
 ignored many of the basic factors which determine the tax rate, among which 
 may be mentioned the standards of living of the citizens; the mileage of streets 
 maintained; the character and extent of service received in return for taxes; 
 the net debt and the rate of interest thereon, and the efficiency of municipal 
 management. 
 
22 STATEMENT IN REFUTATION 
 
 Mr. Murray has simply assumed that it is Hydro service which causes 
 higher taxes and he endeavours to convey this impression to the reader. 
 The reader who appreciates the superficial methods adopted by Mr. Murray 
 and the total lack of any really comprehensive treatment of the subject or 
 presentation of supporting proof will understand the absurdity of Mr. Mur- 
 ray's assumption. 
 
 Intangibles Included In Hydro Rates are Due 
 
 To Early Alienation of Public Resources to Private Companies 
 
 In his report, Mr. Murray draws attention to "intangibles" and states 
 
 that: 
 
 "Money has been paid for such intangibles and therefore power at 
 cost to the people must include them. Here, therefore, seems to be the 
 place to say that where the Hydro-Electric Power Commission offers 
 such purchased power, as power 'at cost,' this does not mean power pro- 
 duced by a value of the works alone, but includes a money loss in interest 
 on the sum paid for the intangibles." 
 
 It is perfectly true, as Mr. Murray states, that the users of electrical 
 energy must now pay in their rates for light and power an extra cost which 
 has been entailed through the necessity of paying for "intangibles;" but Mr. 
 Murray has failed to draw attention to the fact that this extra cost was in- 
 curred, not on account of public ownership, but as an inevitable result of 
 having originally handed over a public heritage for the enrichment of individ- 
 uals or private corporations. If the principle of ownership of power develop- 
 ments by the people had been applied at an earlier date, this cost for 
 "intangibles" would have been entirely avoided, and rates for light and 
 power would have been even lower than they are at present. 
 
 Statement Respecting Rate of Retirement of Bonded Debt 
 Not Supported by Authority Mr. Murray Quotes 
 
 On page 121 of his report Mr. Murray has made a statement regarding the 
 rate of retirement of bonded debt in municipalities purchasing Hydro service 
 as compared with that of other municipalities. Throughout his report Mr. 
 Murray has based most of his conclusions partly on data which are not cited 
 in his report and which are not accessible either to the Commission or to the 
 public; but in this case he has stated the source from which he purports to 
 have obtained his information, and as that source is a Government publication, 
 it has been possible to examine it and see to what kind of data Mr. Murray is 
 willing to credit conclusions adverse to the Hydro-Electric Power Commission. 
 
 Mr. Murray's statement, referred to above, is as follows: 
 
 "For the cities of 25,000 or less the 'Municipal Statistics' published 
 by the provincial government show that as of 1920 there were 161 muni- 
 cipalities receiving Hydro Service and 139 not so doing, making a total 
 of 300 municipalities within these latter population limits for which 
 analyses were made. 
 
 Figure 13 shows the relation of taxes, bonded debt and sinking funds 
 upon a per capita basis for the 300 municipalities of less than 25,000 
 inhabitants. Taxes and bonded debt of the municipalities purchasing 
 
RE MURRAY AND FLOOD REPORT 23 
 
 Hydro Service were higher, while the retirement of the debt by sinking 
 funds was not being carried out as rapidly by those cities using Hydro 
 Service. This is illustrated by the respective sinking funds in terms 
 of the present bonded debt; the rate of retirement being 13.8% less for 
 the Hydro municipalities than for those not taking Hydro Service." 
 
 It will be noted that Mr. Murray has definitely stated as his conclusion 
 
 " the rate of retirement being 13.8% less for the Hydro municipalities 
 
 than for those not taking Hydro Service." 
 
 This statement is repeated in graphic form in Mr. Murray's figure 13. 
 The source of Mr. Murray's information is also definitely stated as follows: 
 
 "The last publication of this Bureau" [The Bureau of Municipal 
 Affairs] "is dated February, 1921, and from this has been derived the 
 information contained in Figures 13 and 14." [Figures 13 and 14 illus- 
 trate the paragraph quoted above.] 
 
 These two statements when taken together prove that Mr. Murray has 
 drawn conclusions which are utterly unjustified by the data upon which they 
 are said to be based, because examination of the booklet to which he appeals 
 as issued by the Bureau of Municipal Affairs under date of February, 1921, 
 discloses the fact that in it there is no mention of how many or which municipal- 
 ities received 'Hydro' service; also, there is no information given regarding the 
 rate of retirement of bonded debt, nor from which such rates may be deduced. 
 Moreover, the Bureau of Municipal Statistics, which issued the booklet re- 
 ferred to, states that this Bureau does not publish the annual sinking fund 
 payments set aside by the municipalities, the amounts of the debentures 
 actually retired annually, or any other statistics from which it would be pos- 
 sible to determine the rates of retirement of municipal debentures or bonded 
 debt of Ontario municipalities. These comments are offered for the benefit 
 of those who, unwittingly, might conclude that the appeal to authority by 
 Mr. Murray was bona fide. 
 
24 STATEMENT IN REFUTATION 
 
 Mr. Murray Singles Out the Nipigon Development for Special 
 Criticism — His Unjust Statements Refuted 
 
 The latest municipal power development constructed by the Hydro- 
 Electric Power Commission is the Nipigon plant at Cameron Falls, on the 
 Nipigon river, in the Thunder Bay district. This plant was installed at the 
 special request of municipalities of the Thunder Bay district in order to meet 
 the prevailing power demand and to provide, also, the power necessary for the 
 development of the extensive and varied natural resources of this territory. 
 
 Mr. Murray goes out of his way to make adverse criticisms respecting 
 the installation itself and even the necessity for its construction. Mr. Murray 
 devotes a whole section of the detailed portion of his report to "The Nipigon 
 Development for the Thunder Bay System of the Hydro-Electric Power 
 Commission of Ontario." Inasmuch as Mr. Murray has entered upon a 
 special discussion of the Nipigon development and has therein shown that he 
 has no proper understanding of the circumstances which he reviews, it is 
 necessary — if for no other reason than to be fair to the municipalities which 
 have invested in this enterprise — to state why the Nipigon plant was necessary, 
 and, at the same time, to refute the false representations which Mr. Murray 
 has made. 
 
 Mr. Murray has not described the circumstances which made it necessary 
 to construct the plant. He has definitely misrepresented the amount of 
 power available under the terms of an important contract, — just as he has 
 already been seen to have misquoted the Power Commission Act of the prov- 
 ince of Ontario, and made false statement respecting the subject of fiats. 
 Again, in order to cast serious discredit upon the physical advantages of the 
 water power of the Nipigon river, Mr. Murray has failed to emphasize the 
 exceptional storage capacity of Nipigon lake which has an area of 1,530 square 
 miles, while he does emphasize the much inferior storage of Dog lake on the 
 Kaministikwia river which has an area of but 53 square miles. The last 
 mentioned feature of storage is one involving purely engineering considerations, 
 and, inasmuch as Mr. Murray had all the facts before him, it is a matter of 
 surprise that he was induced to make such unprofessional misrepresentations 
 respecting the bearing of well-known physical factors. 
 
RE MURRAY AND FLOOD REPORT 25 
 
 Power Supply for Port Arthur — Fort William 
 District Not Over-developed 
 
 Dealing with the Nipigon power development, Mr. Murray in his report 
 attempts to show that the Nipigon development should not have been con- 
 structed, and states: — 
 
 "In reviewing the situation, I am unable to escape the conclusion 
 that there were no economic grounds justifying the construction of the 
 Nipigon Works. The capacity developed on the Nipigon River, plus 
 that available from the Kaministikwia Power Company, provides the 
 people of the Thunder Bay district v/ith three horsepower per capita. 
 This is five times the per capita capacity of that available from all sources, 
 private or governmental, to the people on the Niagara System, and on 
 the basis of the ultimate proposed development for Nipigon and the 
 Queenston-Chippawa plant, then the amounts available per capita to 
 the Thunder Bay district will be nearly four times as great as that on the 
 Niagara System, When comparison is made of the industrial character 
 of these two territories, the over-development at Nipigon becomes appar- 
 ent. Over-development, of course, reflects gi-eatly into cost of power." 
 
 In the above quotation Mr. Murray contends that the Thunder Bay 
 district is over-developed as regards available power supply. To substantiate 
 his argument he compares the horsepower developed per capita in this district 
 with that in the older parts of the province of Ontario, even though the power 
 requirements of these districts are absolutely non-comparable. In making 
 his per capita comparison Mr. Murray fails to take into account certain 
 important factors. It is true that the per capita capacity provided and also 
 the per capita consumption are greater in the Thunder Bay district than in the 
 Niagara district. A true comparison of the industrial character of these 
 two territories, however, will not make apparent an over-development at 
 Nipigon, as Mr. Murray suggests, but on the contrary will actually justify 
 the provision for a greater per capita consumption in the Thunder Bay district. 
 
 In the Thunder Bay district the chief industries to which power is supplied 
 are pulp mills, paper mills and grain elevators. These utilize very large blocks 
 of power and employ a comparatively small number of men, whereas in the 
 older and more thickly settled parts of the Province, not only do the agricul- 
 tural workers constitute a large proportion of the population but the industries 
 using power are of a much more widely diversified nature and not nearly so 
 basic in character. These are the conditions which of necessity result in a 
 smaller use of power per capita in the Niagara district. 
 
 Kaministikwia Power Company Unablo to Supply Port Arthur 
 with Firm Power of More than 5,000 Horsepower 
 
 Mr. Murray on page 15 of his report states: 
 
 "Section 2 [3] of the contract which the Commission held with the 
 Kaministikwia Power Company shows that all power in excess of 6,000 
 horsepower would come to the Commission at $14.00 per horsepower 
 year, with the contract holding (Section G, page 144) for forty years." 
 
 and on page 144, referring to the terms of the origmal contract respecting 
 the cost of power delivered to Port Arthur by the Commission, he states: 
 
26 STATEMENT IN REFUTATION 
 
 "This feature of the contract gave the municipality of Port Arthur 
 a virtual guarantee that, for at least 10,000 horsepower the maximum 
 wholesale cost of power delivered by the Commission would not, during 
 the next ensuing forty years, exceed $17 per horsepower." 
 
 Now, under the contract which the Commission made with the Kaministi- 
 kwia Power Company the Company was bound to supply power up to a maxi- 
 mum of 5,000 horsepower and, provided the Kaministikwia Power Company 
 had the additional power available when required, this maximum amount 
 of 5,000 horsepower was to be increased to 10,000 horsepower or more. A 
 vital clause in the agreement between the Commission and the Kaministikwia 
 Power Company — but one which Mr. Murray found it convenient to omit 
 from his report, — reads as follows: 
 
 "If after the Commission has ordered 5,000 horse power a further 
 order is given and the Company has no power beyond 5,000 horse power 
 available, the Commission shall release the Company from all covenants 
 to furnish power over the said 5,000 horse power or procure the right 
 for the Company to develop the water power at Silver Falls, " 
 
 Had Mr. Murray quoted this paragraph he would have disclosed the fact 
 that the Commission had an effective option on only 5,000 horsepower of firm 
 power and not on "at least 10,000 horsepower," as Mr. Murray states in his 
 report. Under this contract, the only condition upon which the Kaministikwia 
 Power Company would give the Commission the right to take 10,000 horse- 
 power was that the Commission should "procure the right for the Company 
 to develop the water power at Silver Falls" — i.e. the Dog Lake site. To this 
 proposal, however, the municipalities absolutely refused to consent. 
 
 Kaministikwia Power Company Unable to Supply 
 the General Power Requirements of Port Arthur — 
 Fort William District 
 
 Mr. Murray represents that the Kaministikwia Power Company had 
 available sufficient power to meet the requirements of the entire district. This, 
 however, was far from being the case. In January 1921, the Fort William 
 Paper Company contracted for the larger portion of the surplus capacity of 
 the Kaministikwia Power Company and the latter Company was therefore 
 unable to consummate a contract desired by the Great Lakes Paper Company 
 for 10,000 horsepower, owing to the fact that all of the Power Company's 
 surplus power had been pledged, as indeed Mr. Murray in his report himself 
 admits when he states: 
 
 "However, the Great Lakes Pulp & Paper Company never entered 
 into a contract with the Commission for the purchase of power and as 
 late as 1920 was negotiating with the Kaministikwia Power Company 
 for a supply of power, which contract they were unable to consummate, 
 as the Kaministikwia Power Company, Ltd., meantime had contracted 
 with the Fort William Paper Company for the larger portion of its surplus 
 power; including that then being supplied to the Hydro at Port Arthur." 
 
 When it is remembered that, at this time, over 10,000 horsepower was 
 being delivered from the Nipigon plant to supply the requirements of the city 
 of Port Arthur and other consumers in the district, it is perfectly evident that 
 
RE MURRAY AND FLOOD REPORT 27 
 
 the power resources of the Kaministikwia Power Company were quite inad- 
 equate to meet the existent and future requirements of the Thunder Bay dis- 
 trict. Had the Commission depended upon the Kaministikwia Power Company 
 for a supply of power to the Thunder Bay district, there would have resulted an 
 early and serious shortage of power, and the resulting losses to the district 
 would have far outweighed the additional cost which was entailed by con- 
 structing the Nipigon plant at a time of high prices for material and labour. 
 
 Mr. Murray, in order to support his contention that the plant of the 
 Kaministikwia Power Company was adequate to supply the power demands 
 of the district, refers to the installed capacity as approximating 35,000 horse- 
 power. He states: 
 
 "On the other hand, investigation discloses that the Kaministikwia 
 Power Company, having a plant capacity of 35,000 horsepower at Kaka- 
 beka Falls in 1917, had available at that time 15,000 horsepower of excess 
 capacity which was not then contracted for, and in addition owned the 
 rights on the Kaministikwia River for other developments of a capacity 
 equally as large as that at Kakabeka Falls." 
 
 It is true that equipment for generating 35,000 horsepower is installed, 
 but owing to water supply, the continuous power of the Kaministikwia plant — 
 that is, the kind of power that is required by most of the basic industries, actual 
 and prospective, and in particular the pulp and paper industry — is limited 
 to about 16,000 horsepower. 
 
 The Dog Lake power site is the only other site on the Kaministikwia 
 river where power in excess of 3,000 horsepower could be developed. The 
 Kaministikwia Power Company does not own these water-power rights. 
 Mr. Murray's statement that the Company "owned the rights on the Kamin- 
 istikwia river for other developments of a capacity equally as large as that at 
 Kakabeka Falls," is therefore, absolutely incorrect. 
 
 Commission Ha« Published a Statement Respecting 
 Nipigon Power Development and Thunder Bay District 
 
 The Hydro-Electric Power Commission of Ontario has recently issued 
 an illustrated booklet entitled "The Nipigon Hydro-Electric Power Develop- 
 ment constructed and operated for the Municipalities of the Thunder Bay 
 District by the Hydro-Electric Power Commission of Ontario." This publi- 
 cation gives an historical survey of the events leading up to the decision of the 
 Commission to develop Nipigon power and deals also with the questions 
 of rates, consumption of electrical energy, power demands, and probable 
 future markets for power. A chapter is devoted to the "Advantages of the 
 Twin Cities," and in an Appendix a description is given of the physical and 
 other features of the Nipigon development. To users, and prospective users 
 of power in the Thunder Bay district the information given in this pamphlet 
 will prove of exceptional value; and, moreover, its contents constitute an 
 extended and irrefutable answer to Mr. Murray's statements respecting the 
 Nipigon development. 
 
28 STATEMENT IN REFUTATION 
 
 Although the publication just referred to shows how the pressing demands 
 for power became manifested, nevertheless, it is desirable here to demonstrate 
 the substantial nature of these demands by quoting a few authoritative state- 
 ments upon this important phase of the subject under discussion. 
 
 The Commission Decided to Proceed with Nipigon 
 Development after Receipt of Urgent Demands from 
 The Provincial Government and the Municipalities 
 
 The Hydro-Electric Power Commission at one time considered obtaining 
 additional power for the Thunder Bay district from a development on the 
 Kaministikwia river at Silver Falls — the Dog Lake site — where a maximum 
 of some 20,000 continuous horsepower is available. Before the development 
 of the Dog Lake site was started, however, the Provincial Government granted 
 certain large timber concessions in the Thunder Bay district on conditions 
 which demanded their early development. Such development would, of 
 necessity, involve the use of large blocks of power, 
 
 A number of urgent resolutions had been received from municipalities at 
 the Head of the Lakes pressing the Commission to develop sufficient power to 
 take care of the immediate requirements of the district. One of these res- 
 olutions from the City Council of Port Arthur, dated February 14th, 1918, 
 states: 
 
 "Be It Therefore REvSolved that this Council places before Sir 
 Adam Beck, the urgency of the power requirements of Port Arthur and 
 that he be asked to immediately and definitely decide upon the mosfr 
 feasible source of supply," 
 
 also, the Public Utilities Commission concludes: 
 
 "Be It Resolved, that the attention of the Hydro-Electric Power 
 Commission be again drawn to this very important question of future 
 power supply and the critical situation which is liable to develop," 
 
 On June 13th, 1918, and again on July 5th, communications were re- 
 ceived from the Mayor of Port Arthur pointing out the necessity for immed- 
 iately going ahead with the development of power for the cities of Port Arthur 
 and Fort William. 
 
 Thus the communication of the 13th June, 1918, states: 
 
 "Both Cities have placed themselves unreservedly in your hands, 
 and therefore, our hands are tied as to any further action, and the re- 
 sponsibility of furnishing us with power rests entirely with you 
 
 there will come a time when it will be too late to complete development 
 work and get Nipigon power delivered to us." 
 
 The Provincial Government also wrote the Commission on June 14th, 
 1918, emphasizing the urgent necessity of the Commission at once developing 
 sufficient power to take care of the government timber concessions granted 
 in the district. Premier Sir William Hearst's letter of this date also states 
 that 
 
RE MURRAY AND FLOOD REPORT 29 
 
 "the Government could not consider any plant for the development 
 of the water powers at Nipigon without provision being made to supply 
 the necessary powers required for the operation of the plants demanded 
 
 by the terms of the concessions in question I simply want to 
 
 point out, at the earliest possible moment, that no power development 
 at Nipigon could be considered that will not provide for the power require- 
 ments necessary for the development of the Nipigon Pulp Concessions." 
 
 Acting upon the numerous and urgent demands — of which those just 
 cited are typical — from the Municipalities and from the Provincial Govern- 
 ment, and taking into consideration, also, other factors including the physical 
 characteristics and capacities of the alternative pov/er sites, the Commission 
 decided not to undertake the Dog Lake development at that time but to proceed 
 with the Nipigon development, which possesses an ultimate capacity sufficient 
 not only to meet the immediate requirements of the district, but also to serve 
 for some time to take care of future needs. Thus the forehanded action on 
 the part of the Hydro-Electric Power Commission in developing the Nipigon 
 power site has secured to the Thunder Bay district an ample supply of power 
 at attractive rates, — the prime requisite for a healthy expansion of industrial 
 activities based upon the utilization of the natural resources of the district. 
 
 Mr. Murray Misleads Respecting Storage of Nipigon River 
 
 In his report Mr. Murray, by an unpardonable failure to emphasize 
 essential facts, belittles the power possibilities of the Nipigon river and espec- 
 ially the new power development at Cameron Falls. The comparison he 
 makes of the Nipigon river with the Kaministikwia river is simply absurd. 
 
 In the first place, Mr. Murray's presentation will mislead any who may 
 read his report and who may not be familiar with the true conditions. He 
 sets forth in a special quotation a statement from the Water Power Branch 
 of the Department of the Interior, Ottawa, as follows: 
 
 "No storage by artificial means is maintained 
 in the Nipigon watershed." 
 
 Mr. Murray then refers to certain features of the Kaministikwia river and 
 power development thereon and, along with other facts, states that the Dog 
 Lake storage has an area of 53 square miles. 
 
 The accompanying outline map shows Lake Nipigon, area 1530 square 
 miles, which constitutes the storage reservoir available to regulate the flow 
 for all power sites on the Nipigon river, and — inset to the same scale — Dog 
 lake, area 53 square miles, which is utilized as a storage reservoir for regulating 
 the flow of the Kaministikv/ia river. The map demonstrates very clearly 
 the relative magnitude of these two lakes. It is interesting to note how Mr. 
 Murray fails to reveal the great amount of storage behind the Nipigon River 
 development. It is true that a regulating dam is not maintained at lake Nipi- 
 gon because, owing to the exceptionally good natural regulating properties of 
 lake Nipigon, it is not necessary, as yet, to control the level and outflow from 
 the Lake. Provision for a dam when necessary, is, however, included in the 
 Commission's plans. 
 
30 
 
 STATEMENT IN REFUTATION 
 
 
 
 SCALE 
 
 4- 8 12 
 I I I I il I I i d MILES 
 
 OuTiiiNE Map showing Lake Nipigon, which constitutes the storage reser- 
 voir AVAILABLE TO REGULATE THE FLOW FOR ALL THE POWER SITES ON THE NiPIGON 
 
 River, and — inset to the same scale — Dog Lake, which is utilized as a storage 
 
 RESERVOIR FOR REGULATING THE FLOW OF THE KaMINISTIKWIA RiVER. 
 
 Area 
 
 Lake Nipigon 1530 square miles. 
 Dog Lake 53 S(<uare miles. 
 
 Estimated Storage 
 
 Lake Nipigon 4,896,000 acre feet 
 Dog Lake 547,000 acre feet 
 
 Mr, Murray refers pointedly to the Dog Lake storage but conveniently 
 pails to'emphasize the much greater storage of Laice Nipigon. 
 
RE MURRAY AND FLOOD REPORT 
 
 31 
 
 Advantages of the Nipigon River 
 
 The great advantage of the Nipigon river over the Kamininistikwia 
 river for power development, both from economic and engineering standpoints, 
 is revealed conclusively by the following tabulation of data relating to the 
 two streams. 
 
 TABLE 11 
 
 Comparison of Power Possibilities 
 Nipigon and Kaministikwia Rivers 
 
 Drainage 
 Area 
 
 Area 
 of Lake 
 
 Estimated 
 
 Depth of 
 
 Storage 
 
 Volume 
 of Storage 
 
 Mean 
 
 Dependable 
 
 Flow 
 
 Kaministikwia River 
 and Dog Lake 
 
 Nipigon River 
 and Nipigon Lake. 
 
 aq. miles 
 2,670 
 
 9,100 
 
 sq. miles 
 53 
 
 1,530 
 
 feet 
 16 
 
 acre feet 
 547,200 
 
 4,896,000 
 
 c.f.s 
 630* 
 
 6,500t 
 
 Power Sites 
 
 Site 
 
 Head 
 
 in 
 
 feet 
 
 Estimated Horsepower at load-factor of 
 
 
 100 per cent 
 
 75 per cent 
 
 50 per cent 
 
 Kaministikwia River 
 
 Kakabeka Falls 
 
 Dog Lake 
 
 178 
 340 
 
 16,000 
 19,500 
 
 35,500 
 
 21,300 
 26,000 
 
 47,300 
 
 32,000 
 39,000 
 
 71,000 
 
 Total 
 
 
 NiFiGON River 
 
 Cameron Falls 
 
 78 
 53 
 55 
 42 
 
 50,000 
 33,100 
 32,500 
 24,800 
 
 140,400 
 
 66,700 
 44,100 
 43,300 
 33,000 
 
 187,100 
 
 100,000 
 66,200 
 65,000 
 49,600 
 
 280,800 
 
 Alexander Landing... 
 Pine Portage 
 
 Virgin Falls 
 
 Total 
 
 
 •At Dog Lake site; the flow at Kakabeka Falls is 1,000 c.f.s. 
 fFor all sites on the Nipigon River. 
 
 NOTE: The Hydrometric data employed are based on the available records. The estimated capacities for all 
 undeveloped sites are based on 80 per cent efQciency. The estimated capacities for the Kaministikwia Power 
 Company's development at Kakabeka Falls are also based on 80 per cent eflSciency. The physical featur«i 
 of this plant include pipe lines in which there is considerable friction loss and also horizontal units which wer» 
 built some years ago and at a time when efflciencies obtainable were lower than at present. The Nipigon 
 plant is much more compact in design, and includes the most modern vertical-runner turbines. An eflJciency 
 of 87 per cent is used as a basis for the estimated capacities at Cameron Falls. 
 
 The above table emphasises the remarkable amount of storage available 
 on the Nipigon. The comparison also reveals the exceptional advantage of 
 the present Nipigon development at Cameron Falls, as well as the advantages 
 of the other power sites on the Nipigon river as compared with either the 
 
82 STATEMENT IN REFUTATION 
 
 Kakabeka Falls development of the Kaministikwia Power Company or with 
 the only other large power site on the Kaministikwia river, namely, the Dog 
 Lake site. 
 
 From the table presented it will be seen that the total drainage area of the 
 Nipigon river is nearly four times that of the Kaministikwia river. The area 
 of lake Nipigon is thirty times the area of Dog lake and the amount of potential 
 storage on lake Nipigon is approximately nine times that available on Dog 
 lake. The mean dependable flow obtainable on the Nipigon river is over 
 six times greater than that obtainable on the Kaministikwia river at Kakabeka 
 Falls. The aggregate ultimate power possibilities of the four large power sites 
 on the Nipigon river is about four times as great as that of the two large power 
 sites available on the Kaministikwia river. Why did not Mr. Murray, as an 
 engineer, set forth these facts, essential as they are to any such comparison 
 as he makes? 
 
 Any satisfactory power development in the Thunder Bay district must 
 of necessity be able to take care of high-load-factor, twenty-four-hour power 
 loads for large and basic industries such as pulp and paper mills, and must 
 take care also of the power requirements of the large grain elevators; it should 
 also be able to supply povv^er for the development of the mineral resources of 
 the district. For meeting such circumstances, the facts submitted respecting 
 the tvv^o rivers prove beyond question that the Commission's judgment in 
 choosing the Nipigon development was the only logical solution of the problem. 
 
 In accordance with the general experience of new hydro-electric power 
 plants for the development of new industries, it is of course to be expected, 
 during the period of construction and even for some time after the plant is 
 in operation — when the load on the plant is comparatively small — that the 
 actual cost per horsepower of power developed at the Nipigon plant will be 
 somewhat higher than the cost per horsepower of power as supplied to the 
 Commission under the original restricted contract with the Kaministikwia 
 Povi^er Company. Owing to the surplus which Port Arthur has been able 
 to accumulate under the prevailing rates for light and povv^er, it is not antici- 
 pated that it will be necessary — even during the period within which the load 
 is being built up — to increase the rates at which power and light are now being 
 supplied to consumers in Port Arthur. It is the belief of the Commission 
 that in the development of the natural resources of the district no factor will 
 prove more important than the ample supplies of hydro-electrical energy now 
 available at cost from the Municipalities' power development on the Nipigon 
 river. 
 
 From the foregoing brief review, it is seen how urgent vv^ere the demands 
 of the municipalities of the Thunder Bay district for large increases in their 
 supply of hydro-electrical energy. It is seen, also, how definite were the 
 expressed representations of the Provincial Government for sufficient power for 
 the pulp and paper industries, and in addition, it is seen how the judgment 
 
RE MURRAY AND FLOOD REPORT 33 
 
 of the Hydro-Electric Power Commission of Ontario, based as it is upon an 
 independent and comprehensive field survey of the power markets and other 
 governing factors, approved of the Nipigon development. Against the con- 
 sidered judgment of all the public authorities immediately interested, one has 
 simply the 'conclusion' of Mr. Murray as expressed in the first quotation 
 given in this discussion of his reference to the Nipigon development. When one 
 considers the ignorance manifested by Mr. Murray of the power problems at 
 the Head of the Lakes, it is remarkable that he should have displayed such 
 unusual assurance in expressing himself as he has done. As a matter of fact, 
 Mr. Murray's unprofessional handling of the engineering data relating to the 
 subject of storage on the Nipigon river, is, of itself, sufficient to discredit his 
 whole presentation. 
 
 Queenston-Chippawa Power Development 
 
 On behalf of the municipalities of the Niagara district, the Hydro-Electric 
 Power Commission has constructed what is known as the Queenston-Chippawa 
 Power Development for the utilization of the water power of the Niagara 
 river. This installation when completed will be the largest individual water 
 power development in the world. Previous power developments on the Niagara 
 river only utilized that portion of the total fall of the river which occurs in 
 the vicinity of the Falls, but the basic conception of the Queenston-Chippawa 
 development is the utilization of the greatest possible amount of the total 
 fall of the Niagara river between lake Erie and lake Ontario at the highest 
 possible efficiency. Of this total fall of 327 feet, 305 feet has actually been 
 made available as a working head at the Queenston power house. This 
 development, therefore, makes much more efficient use of the Niagara water 
 than is made by any other Niagara power plant. 
 
 The general scheme of development comprises an intake structure in 
 the Niagara river at Chippawa; the deepening and widening of the Welland 
 river between Chippav/a and Montrose, a distance of 4i^ miles; the con- 
 struction of a canal 8}4 miles long from Montrose to the forebay and screen- 
 house at a point on the cliff about a mile south of the village of Queenston; 
 and the construction and equipment of a power house in the gorge immediate- 
 ly below the forebay. 
 
 No doubt, Mr. Murray knew full well that it would be futile for him to 
 attempt to discredit the outstanding and well recognized engineering and other 
 advantages of the Queenston-Chippawa development; and consequently, 
 he has not undertaken to deal with this portion of the Commission's opera- 
 tions as he so unfairly does with the Nipigon development situated as it is 
 in a region comparatively little known as contrasted with the widely known 
 Niagara district. Mr. Murray, therefore, confines his attack on the Queenston- 
 Chippawa development chiefly to the publication of his 'opinion' that it 
 was not desirable to have gone ahead v/ith this project during the period of 
 the vv-ar, involving as it did, such high costs of labour and material. Mr. 
 Murray also contends that inasmuch as the cost of power to be generated 
 
34 STATEMENT IN REFUTATION 
 
 by this development will be substantially higher than anticipated, the ulti- 
 mate rates for electrical energy to the consumer will be so high as to con- 
 stitute a serious burden. 
 
 The Allied War Needs Were a Governing Factor 
 
 With respect to Mr. Murray's contention that it was not advisable to 
 have proceeded with the Queenston-Chippawa development, it may be definite- 
 ly recorded that Mr. Murray's "conjecture" given below: 
 
 "the Queenston-Chippawa development was prosecuted during that 
 period with little hope, I would conjecture, that power could be received 
 from it to help out the war load." 
 
 is absolutely incorrect. 
 
 Had Mr. Murray been living in the Dominion of Canada in 1917, he would 
 perhaps have been in a better position to realize that at that time it was utterly 
 impossible for human foresight to determine when the war would end, and 
 on the part of all interested there was advocated the policy that there should 
 be no slackening of any effort which would make towards the successful termin- 
 ation of hostilities. Every resource available to the citizens of Ontario was 
 being utilized in the production of munitions and other war supplies. The 
 outstanding problem in this great effort was the insufficient supply of power. 
 A Power Controller had been appointed by the Dominion Government and 
 under his orders the use of power for non-essential industries was being cur- 
 tailed, the amount of street-lighting was reduced, window lighting was pro- 
 hibited, and commercial industries either had their power cut off, or reduced 
 to a point which entailed great financial losses; in many cases almost com- 
 plete paralysis of business was experienced. At this period the Hydro- 
 Electric Power Commission was supplying power for the operation of over 
 360 plants manufacturing munitions and war supplies, and these plants were 
 using over 80 per cent of the entire power supply in the Niagara district. 
 
 Now, all information such as that just recorded was given to Mr. Murray 
 along with the other data relating to the activities of the Commission. It 
 is noteworthy, however, that Mr. Murray has seen fit to omit reference to 
 these exceptional conditions, because such reference would not have fitted 
 in with the general tenor of his report. During the war no such comment 
 as Mr. Murray now offers in his report would have been tolerated in any of 
 the countries of the Allies. 
 
 Growth of the Use of Hydro-Electrical Energy in the Niagara District 
 
 Apart from the phenomenal growth in power demand caused by the 
 utilization of electrical energy for the production of munitions and other war 
 supplies, and indeed long before the stimulation of power demand due to 
 the war was noticeable, there was a very remarkable growth in the increased 
 amounts of power being demanded by the municipalities of the Niagara sys- 
 tem served by the Hydro-Electric Power Commission. 
 
RE MURRAY AND FLOOD REPORT 
 
 35 
 
 The 100,000 horsepower originally contracted for by the Commission 
 was all absorbed within five years of the time the Commission first began 
 marketing power. The following table demonstrates the growth of hydro- 
 electric activities in the Niagara district: 
 
 table iii 
 
 Growth of the Use of Hydro-Electrical Power 
 
 IN THE Niagara District 
 
 
 
 
 
 Power Supplied 
 
 
 
 
 Total 
 
 to Municipalities: 
 
 
 Number of 
 
 Number of 
 
 Number of 
 
 and Customers of 
 
 Year 
 
 Municipalities 
 
 Townships 
 
 Consumers 
 
 the H.E.P.C* 
 
 1910 
 
 9 
 23 
 
 
 
 603 
 
 1911 
 
 
 18,072 
 
 1912 
 
 33 
 
 
 
 37,720 
 
 1913 
 
 40 
 
 "7 
 
 "52,245 
 
 50,478 
 
 1914 
 
 61 
 
 10 
 
 78,925 
 
 82,161 
 
 1915 
 
 83 
 
 15 
 
 99,495 
 
 106,154 
 
 1916 
 
 101 
 
 18 
 
 124,973 
 
 144,123 
 
 1917 
 
 111 
 
 24 
 
 140,178 
 
 239,761 
 
 1918 
 
 115 
 
 25 
 
 150,207 
 
 250,190 
 
 1919 
 
 118 
 
 26 
 
 174,989 
 
 264,872 
 
 1920 
 
 123 
 
 26 
 
 200,825 
 
 282,791 
 
 1921 
 
 127 
 
 34 
 
 218,292 
 
 317,837 
 
 1922 
 
 131 
 
 44 
 
 
 360,268 1 
 
 
 
 
 * December load, f June load. 
 
 Foreseeing the urgent demands for increased power, the Commission, 
 as early as 1912, was constrained to commence active arrangements for ob- 
 taining an additional supply of power to meet the requirements of the Niagara 
 district, and in 1914-15 an estimate was prepared which was submitted to 
 the Provincial Government with a request for authority to proceed with 
 the construction of the proposed Queenston-Chippawa plant. The plant 
 contemplated in this first estimate was to have a capacity of 100,000 horse- 
 power and this development under conditions of labour and material pre- 
 vailing at that time was estimated to cost $10,500,000. The Provincial 
 Government, however, did not approve of the Commission proceeding with 
 this early proposal, and it was not until 1916-17 that it did approve of the 
 project of constructing the Queenston-Chippawa development. 
 
 The plan then approved was for a larger development than that provided 
 for in the original estimate of 1915. It was now contemplated to develop 
 300,000 horsepower by means of a canal of suitable capacity. Two estimates 
 of cost for this capacity based on different methods of construction were 
 submitted. Using ordinary types of construction plant, the cost was es- 
 timated at $29,000,000 but if an improved type of plant were to be employed, 
 the cost was estimated at from $24,000,000 to $25,000,000. Both these 
 estimates were based on the low costs of labor and materials which prevailed 
 in 1916. At the time the estimates were made it was, of course, impossible 
 for anyone to foresee that before the work could be completed rates of wages 
 would have increased by over 125 per cent and unit costs of construction 
 materials by at least 100 per cent over the 1916 costs. Other items of in- 
 creased cost which could not have been foreseen were the duty, surtax and 
 
36 STATEMENT IN REFUTATION 
 
 exchange on the cost of material and equipment which had to be imported 
 from the United States, as, owing largely to war conditions, it could not be 
 obtained in Canada. 
 
 At the close of the war, special efforts were everywhere made to restore 
 industry to its normal basis. In Ontario, these efforts were so far successful 
 that the discontinued war loads were almost immediately re-absorbed, and 
 as early as 1919, the ever increasing demand for power in the Niagara system 
 made it evident that even a 300,000 horsepower development would only 
 suffice to meet the requirements for a relatively short period; on account 
 of this and other factors it was accordingly decided to provide for an esti- 
 mated capacity of 450,000 horsepower. This was to be accomplished by 
 deepening the power canal and lining it throughout with concrete. After 
 the work had been initiated and when the success of the improved methods 
 employed in the construction of the canal had been demonstrated, it became 
 apparent that the smoothness of finish of the concrete lining, and also the 
 superior alignment of the sides of the canal, would facilitate the carrying 
 of a larger volume of water than had originally been estimated. Subsequent 
 engineering examination and computation promises that an ultimate capacity 
 of some 550,000 to 600,000 horsepower will be available. 
 
 A Load Aggregating 150,000 Horsepower Awaited the 
 First Generators at the Queenston-Chippawa Plant 
 
 Above there are given data showing the rapid growth of the Commission's 
 Niagara system; a few particulars as to the load conditions under which the 
 first generators installed at Queenston have been put into service will here 
 be of interest. 
 
 The power requirements of the Niagara System are such that the Com- 
 mission some time ago was compelled to enter into day-to-day contracts 
 with private companies on both sides of the Niagara river for supplies of povv^er 
 aggregating 90,000 horsepower. The only circumstance which made it 
 possible to secure the temporary use of this power was that the loads on these 
 private plants were very much reduced owing to the commercial depression 
 at that time prevailing in the adjacent districts of New York State and On- 
 tario. Until the first two generating units were ready at the Queenston 
 power house, the Commission, therefore, was able fortunately to make day- 
 to-day contracts for the supply of the required power. Had the construc- 
 tion of the Queenston-Chippawa power project been delayed, it is not im- 
 probable that the Niagara system would have had to manage without some 
 90,000 to 150,000 horsepower, for so soon as customers holding contracts 
 for this power began to find uses for it under improving commercial conditions, 
 the private power companies would have had to cancel their contracts with 
 the Commission and allow the power previously contracted for to go to its 
 regular customers. 
 
 Lack of this large amount of power would have been a very serious matter 
 for Ontario. 
 
 The first generating unit of the Queenston-Chippawa plant was put into 
 
RE MURRAY AND FLOOD REPORT 37 
 
 commercial operation on February 1st, 1922, and since that time has been 
 carrying a load of about 60,000 horsepower; the second unit was started on 
 March 15th, 1922, and the two units are now carrying approximately 118,000 
 horsepower. 
 
 The above load has been put on these generators without taking any load 
 away from the other plants of the Commission and without carrying any part 
 of the 50,000 horsepower which is supplied to the Commission by the Canadian 
 Niagara Power Company. These conditions obtain in a period of commercial 
 depression and the very evident signs of trade revival which are now apparent 
 indicate clearly that the initial works of the Queenston-Chippawa Power 
 Development will be completed none too soon to cope with the power situ- 
 ation of the near future. 
 
 Mr. Murray Presents Estimates of the Cost of Niagara '^ 
 
 Power Based Upon His Own Hypotheses 
 
 Having attempted, in the manner above indicated, to discredit the Queen- 
 ston-Chippawa development on the basis of its having been begun and carried 
 forward under conditions of high cost of labour and material due to the Great 
 War, Mr. Murray next attempts to establish his contention that the resulting 
 cost of power from the Queenston-Chippawa development will be so high 
 as to be a serious burden upon the public receiving it. 
 
 In order to arrive at the cost of power from the Queenston-Chippawa 
 plant, Mr. Murray adopts his usual methods — methods, indeed, which corres- 
 pond to those already disclosed in the earlier portion of this discussion. That 
 is to say, v/hen Mr. Murray wishes to prove that the Commission exercises 
 "unlimited" authority, he misquotes and alters statutory verbiage in order 
 to suit his purpose; if fiats, having been granted, are a menace to his argument, 
 he boldly asserts that none have been granted; if storage facilities exist that 
 would invalidate his contentions, they must needs be discounted, and so on. 
 Similarly, in dealing with the cost of Queenston-Chippawa power, Mr. Murray 
 builds up high estimated costs by a process of inflation. If, for example, the 
 regular rate of interest, as paid by the Commission, of 5.75 per cent is too 
 low, Mr. Murray raises it to a conventional figure of his own, namely, to 
 8.15 per cent, and this, in one instance, has given him a fictitious increment 
 of cost of $1,652,500. Thus, Mr. Murray complacently employs figures 
 of cost according to his fancy. In no other manner could he deduce the high 
 costs per horsepower-year which he does. 
 
 In proceeding, it is well to refer to the manner in which Mr Murray in- 
 troduces his dissertation upon his high estimated costs for Niagara power. 
 In commencing, Mr. Murray postulates certain quantities of water to be 
 available under certain conditions. Then he says that with so much water 
 only so much power-producing equipment at Niagara could be operated. 
 Thus, for example, under one of his hypotheses, Mr. Murray states that 
 162,000 horsepower out of the 202,000 horsepower capacity of the Ontario 
 Power Company would have to be scrapped, because, says he, no water for 
 the production of power would, under certain conditions, be available to the 
 
38 STATEMENT IN REFUTATION 
 
 Ontario Power Company. Then, upon this hypothesis, Mr. Murray pro- 
 ceeds to make an estimate of the future cost of power to the municipalities 
 of the Niagara System. 
 
 It may be commented, that the diversion of water from the Niagara 
 river is covered by the International Boundary Waters Treaty of 1909 be- 
 tween Great Britain and the United States. Internationally, the inter- 
 pretation of the Treaty rests with the high contracting parties. Nationally, 
 the apportionment of the amount of water allotted to each country is a domes- 
 tic problem and concerns only that country which, in each particular case, 
 has the jurisdiction. Mr. Murray's views respecting the details of the manner 
 in which Niagara water may be apportioned under assumptions which he 
 himself has elected, are not concurred in by the Commission. There is no 
 need to discuss this aspect of the subject. However, it will not be amiss 
 to examine Mr. Murray's estimates of the cost of Niagara power based upon 
 his own assumptions and in the form in which he himself has chosen to present 
 them. If the fictitious and inflated character of costs deduced by the methods 
 he has employed be demonstrated, nothing further is required. 
 
 Such demonstration will now be given and, for purpose of illustration, 
 attention will be directed to Mr. Murray's presentation of the cost of power 
 from the Niagara river when the Queenston-Chippawa development has an 
 installed capacity of 575,000 horsepower and a load therefrom of 540,000 
 horsepower. With the exception of the interest charges for the Ontario Power 
 Company, which have been increased since 1920, all costs used as a basis 
 for checking the estimates under discussion are for the year 1920. As a 
 matter of fact, however, it is well to remember that the extreme costs of 
 labour and material for the year 1920 are already substantially lowered. Of 
 the ten items making up the cost of power from the two plants 
 there is not a single item which Mr. Murray has estimated cor- 
 rectly; his errors in the various items range from 20 to over 1,000 per 
 cent, and aggregate a total of over five million dollars. Furthermore, it will 
 be perceived that in nine of the ten items, Mr Murray's estimates are in ex- 
 cess of the correct figures, consequently they represent the future cost of 
 power to be a great deal higher than it actually will be. Some of Mr. Murray's 
 errors may be explained as simple carelessness — as, for example, when adding 
 up his items he has made an error of $30,000. When, however, two of his 
 "mistakes" are over a million and a half dollars each out of a corrected total 
 of only $7,200,000, the probability that such items have not wittingly been 
 inflated becomes very remote. Some of these discrepancies will now be 
 considered in detail. 
 
 Mr. Murray Absurdly Overestitnates the Renewal 
 Reserves of the Ontario Power Company 
 
 Mr. Murray's estimate of the renewal reserves required to be laid aside for 
 the Ontario Power Company's plant is simply absurd; it is more than ten 
 times too much. 
 
RE MURRAY AND FLOOD REPORT 39 
 
 The basic assumption on which Mr. Murray has made his estimate of 
 the cost of Niagara power is that the plant of the Ontario Power Company, 
 on account of lack of water which Mr. Murray proposes to use otherwise, 
 will be scrapped, with the exception of 40,000 horsepower held as stand-by. 
 In spite of this fact that 162,000 horsepower is thus to be scrapped under his 
 own assumption, Mr. Murray has included in his estimate a provision for 
 the reneival of this 162,000 horsepower of the scrapped plant, and allows the 
 absurd sum of $2,100,000 annually, in addition to a provision of $78,000 in 
 respect of the 40,000 horsepower which is to be retained. The annual amount 
 Mr. Murray has thus allowed for renewal of the superseded part of the plant 
 is enough to rebuild it entirely every three or four years, although under Mr. 
 Murray's assumption there is no intention to rebuild it at all. This $2,100,000 
 is, therefore, pure inflation — not a cent of it is needed even under Mr. Murray's 
 assumed conditions. 
 
 It is possible that Mr. Murray may have made this blunder through con- 
 fusion in his ov/n mind regarding the respective functions of renewal reserves, 
 of reserves for obsolescence, and of sinking fund or amortization reserves. 
 He endeavours to justify his estimate of $2,178,000 for "renewals" by saying: 
 
 "The obsolescent capacity must be amortized over a relatively 
 short period and a 9%* amortization rate has been used for this portion 
 of the investment, while for the balance of the capacity, the same rate 
 for renewals has been taken as was used by the Commission's engineers." 
 
 That Mr. Murray's expressed ideas on this subject are much confused — 
 whether wittingly or otherwise — is evident from the preceding quotation. 
 He is apparently endeavouring to excuse his absurd allowance of $2,100,000 
 for "renewals" on the ground that it is not all for renewals, but partly for 
 "amortization." The allowance, however, is seen to be all the more inde- 
 fensible if considered as amortization because Mr. Murray has separately 
 taken care of amortization by having provided an additional item of $512,000 
 in respect of sinking fund reserves on this very plant of which he is scrapping 
 the larger part. Moreover, inasmuch as $320,000 annually is ample to cover 
 the sinking fund requirements when due, Mr. Murray by providing $512,000 
 would in this item alone, be setting aside 50 per cent, more than is required. 
 
 The fallacy of Mr. Murray's argument quoted above is evident when it is 
 remembered that the only reason he assigns for shutting down the Ontario 
 Power Company's plant .is in order to develop approximately twice the power 
 with the same water by using it in the C^ueenston plant. The power, there- 
 fore, is not lost but doubled, and hence the value of the Ontario Power Com- 
 pany if its water is usedjn the Queenston-Chippawa development is really 
 greater than before. 
 
 Besides being unnecessary, the levying of such an extra charge of $2,100,- 
 000 against the cost of power would be extremely foolish and would result 
 in great injustice to power consumers. Mr. Murray thereby would add an 
 
 * Incidentally, it may be'^remarked that Mr. Murray has actually used not a 9°.' but over a 30% amortiz- 
 ation rate "for this portion of the investment." 
 
40 STATEMENT IN REFUTATION 
 
 unwarranted cost of nearly $5.00 per horsepower for about three years, 
 or until the whole value of the 162,000 horsepower of the plant he proposes 
 to scrap was amortized. Then the cost of power would drop, not by $5.00 
 alone, but also by the amount of the interest and sinking fund on that portion 
 of the capital costs amortized. 
 
 In any event, whether through confusion of his ideas or merely through 
 the desire to make the cost of power appear as high as possible, it is certain 
 that Mr. Murray's estimate, on this item alone, is more that $2,000,000 too 
 high. 
 
 Mr. Murray's General Inflation of Estimates 
 
 Six other items which Mr. Murray has unreasonably overestimated, 
 while less individually, nevertheless aggregate a very large amount in excess 
 of the correct figures. For instance, Mr. Murray apparently neglects the 
 fact that the costs of operation, etc., per horsepower are much smaller for a 
 very large and modern station like the Queenston station, and thus he un- 
 justifiably overestimates this item. Again, when the nature of the physical 
 installation at the Queenston-Chippawa development is considered, the re- 
 newal reserves for this plant are too high. In all, these six small items 
 are overestimated by about $1,500,000. One item only has been under- 
 estimated by Mr. Murray, but this was due to circumstances occuring after 
 he had assembled his data. However, for the underestimated item proper 
 allowance has been made. One item was nearly correct. 
 
 Mr. Murray's Gross Error Respecting the Interest 
 Charges Applicable to Queenston-Chippawa Development 
 
 Mr. Murray's calculation of interest charges on the Queenston-Chippawa 
 development forms a particularly flagrant instance of his general policy of 
 inflation of estimates. 
 
 The capital cost of the development is accepted by Mr. Murray as $69,- 
 000,000 and he estimates the annual interest charges thereon at $5,620,000. 
 By division it is evident that Mr. Murray has employed an interest rate of 
 8.15 per cent., but he carefully refrains from all mention of this fact. Mr. 
 Murray even admits, a few pages before, that the average rate of interest which 
 the Commission will pay on its borrowings is only 5.75 per cent., and he uses 
 that rate in calculating interest for his first estimate. The Commission has 
 never paid an interest rate even approaching 8.15 per cent. 
 
 Using the correct interest rate — 5.75 per cent. — it is found that the item 
 which Mr. Murray without the slightest justification states to be $5,620,000, 
 should be $3,967,500, and hence on this item alone Mr. Murray has inflated 
 his estimates by $1,652,500. 
 
 By such artifices as have just been described, Mr. Murray has estimated a 
 total annual production cost for power of $12,310,000 — as against a corrected total 
 even under his own assumptions, of $7,200,000. Thus he has overestimated the 
 cost of generation by $5,000,000 or 70 per cent. In addition, in calculating 
 the cost of power to the Niagara sj'-stem, he has underestimated the revenues 
 
RE MURRAY AND FLOOD REPORT 41 
 
 of the Ontario Pov/er Company from its own customers, and overestimated 
 the amount of power taken by them, and thereby increased the inflation of 
 his estimated cost of power to over 80 per cent. 
 
 Summing up Mr. Murray's handHng of this estimate, it is found that in 
 the first place he has based it on gratuitous assumptions, and then, without 
 justification, he has overestimated all the items of cost but two to a total ex- 
 tent of $5,000,000 or 70 per cent. He arrives at a figure of $25.60 per horse- 
 power per year, whereas a corrected estimate under his assumptions is only 
 $14.00 per horsepower per year. 
 
 It is unnecessary to deal specifically with Mr. Murray's other estimates, 
 because in general, his procedure involves similar hypothetical assumptions 
 of his own, as well as incorrect methods of dealing with estimated costs. In 
 his estimates, for example, of the cost of power to the municipalities of the 
 Niagara district at the busses of the generating plants at Niagara, when the 
 capacity of the Queenston-Chippawa plant is 275,000 horsepower, Mr. 
 Murray under different assumptions, arrives at estimated costs of $31.10, 
 $23.40, and $21.30 per horsepower-year, whereas had he rightly employed 
 the data available to him he must have arrived at an entirely different 
 conclusion. If a reserve capacity of 55,000 horsepower is maintained the cost 
 per horsepower of peak load will be approximately $18.00, while the cost 
 per horsepower of machine capacity will be about $15.50.* 
 
 In discussing these estimates of Mr. Murray's it must fully be appreciated 
 — as indeed, was emphasized above, — that the Commission does not accept 
 or concur in the assumptions upon which Mr. Murray predicates his estimates. 
 Mr. Murray himself apparently does not regard his assumptions as necessarily 
 stable, because he bases another estimate upon still different assumptions and 
 then concludes that the ultimate cost of Niagara power will only be $12.60 per 
 horsepower-year. It is the judgment of the Commission's engineers that the 
 ultimate cost of Niagara power will be substantially lower than even the 
 figure of $12.60 which Mr. Muiray supplies. 
 
 Even Under the Present Low Rates the Revenues of the 
 Municipalities, with but Few Exceptions, are Sufficient to 
 Meet all Charges on Queenston-Chippawa Development 
 
 Reverting again to the question of cost of Queenston-Chippawa power: 
 Mr. Murray makes the follov/ing statement in regard to the effects of the high 
 costs: 
 
 "I cannot escape the conclusion that the burden of 
 
 its" [Queenston-Chippawa development] "costs must now be felt in a 
 
 very material increase of cost to the municipalities of Ontario for many 
 
 years." 
 
 With the return to more nearly normal commercial conditions it is antici- 
 pated that during the year 1923 the load on the Queenston-Chippawa de- 
 velopment will reach a figure of from 200,000 to 250,000 horsepower. With 
 
 •Theae estimates relate only to the cost of power generated for the Niagara System. Mr. Murray does not take 
 into account the power purchased by the Commission from the Canadian Niagara Power Company. The price of this 
 power would reduce the average costs of power to the Niagara System below the estimates above presented, by at 
 least 50 cents per horsepower-year. Further, it may be commented that in all the above estimates there have been in- 
 cluded the full sinking fund charges for amortization of capital, which ordinarily are not levied for a period of years 
 after the commenoement of operation. For the first years, due to the deferment of sinking fund charges, the cost of 
 power will be over $1.50 per horsepower-year less than the estimates above presented, and including the 50 cents just 
 mentioned, the cost will be $2.00 less. 
 
42 STATEMENT IN REFUTATION 
 
 this load on the plant the average cost of generation of power for the Niagara 
 system will probably not be increased by more than $4.00 per horsepower- 
 year over the average cost of generating the power supplied to the Niagara 
 system in the year prior to the construction of the Queenston-Chippawa 
 development. The temporary increase of approximately $4.00 per horse- 
 power in the wholesale cost of generating power will not, in the majority 
 of the municipalities, necessitate any material mcrease in the rates to 
 consumers, as on the basis of the low rates charged in 1921 the average surplus 
 of the municipalities in the Niagara system for that year exceeded $4.00 per 
 horsepower. Moreover, the cost of power from the Queenston-Chippawa 
 plant when developing about 250,000 horsepower will be less than the 
 cost of purchased power available at lowest present prices now quoted from 
 the private companies at Niagara Falls. 
 
 The present situation may be summed up as follows: 
 
 Without the new development, the municipalities would now be ex- 
 periencing a power shortage of over 125,000 horsepower and it would be daily 
 increasing. 
 
 For such small amounts of power as the power companies have for sale, 
 the price demanded is higher than the cost will be for power from the Queenston- 
 Chippawa development with but the said load of 250,000 horsepower. 
 
 An increase in the cost of power was inevitable and to be expected on 
 account of the situation brought about by the War, but even this will be 
 minimized by means of the Queenston-Chippawa development. 
 
 Inasmuch as the Queenston-Chippawa plant will ultimately be developing 
 550,000 to 600,000 horsepower, there will, in addition to the initial develop- 
 ment of 275,000 horsepower, be some 300,000 horsepower eventually available 
 for future requirements. As this additional power is marketed, there will 
 result to the municipalities a continually decreasing average cost of power. 
 
 Consequently, in spite of Mr. Murray's assertion that the policy of con- 
 struction of the Queenston-Chippawa development was economically wrong, 
 it is obvious that it was, and is, the cheapest and best solution of Ontario's 
 power problem, as well as the only adequate one. In the majority of munici- 
 palities it will not be necessary, even temporarily, to increase materially the 
 retail rates. 
 
 From the foregoing comments upon Mr. Murray's discussion of the Queens- 
 ton-Chippawa development, it will be seen that he has no warrant for his 
 conclusion and all that is necessary for him to do in order to "escape the con- 
 clusion" — using his own expression — is to correct the blunders he has made. 
 
 Mr. Murray's Unproved Assertions Respecting Comparative 
 Power Costs in Various Districts 
 
 In the course of the discussion presented in the preceding pages, it has 
 been disclosed — to use Mr. Murray's expression — "beyond perad venture of 
 doubt" how imtrustworthy are Mr. Murray's methods of dealing with various 
 
RE MURRAY AND FLOOD REPORT 43 
 
 subjects essential to his report. It has been observed, how, by mis-statement, 
 misrepresentation, comparisons between non-comparable entities, garbling 
 of documentary data, inflation of costs, and by other like processes, Mr. 
 Murray in his report has sought to discredit the achievements of the hydro- 
 electrical undertaking of the municipalities of the province of Ontario. 
 
 There remains an important feature of the subject under discussion to 
 which the Hydro-Electric Power Commission desires to direct special atten- 
 tion, and that subject is the cost of electrical energy to the people of Ontario 
 as supplied through the operations of their Power Commission. Mr. Murray 
 devotes a portion of his report to such a discussion, and, generally speaking, 
 he draws conclusions to the effect that throughout certain districts which he 
 has selected in the state of New York, in the state of California and in the 
 province of Quebec, the privately-owned electric utilities are selling electrical 
 energy at less cost to the consumers than does the Hydro-Electric Power 
 Commission. 
 
 Mr. Murray opens his discussion by stating 
 
 "The cost for power to the people as a whole must be that of the 
 weighted average cost for energy delivered to the ultimate consumer." 
 
 Mr. Murray's conclusions, in so far as they relate to the cost to the con- 
 sumers of electrical energy supplied by the operations of the Hydro-Electric 
 Power Commission, are unreliable and cannot be accepted. Those who have 
 followed, in the previous part of the present discussion, the disclosure of Mr. 
 Murray's methods will have diffidence in accepting "weighted" costs if de- 
 termined by Mr. Murray according to the manner of "weighting" which he 
 has elsewhere employed. For example, it will be recalled, that although over 
 twenty-five fiats had been granted Mr. Murray found it convenient to lift 
 the "weight" and stated that to date no fiats had been granted; when statu- 
 tory verbiage did not support his contention, he again removed the "weight" 
 of certain words and put important statements out of balance; again, where 
 interest charges were too low for Mr. Murray, he "weighted" them to the ex- 
 tent of a million and a half dollars, and similarly, with respect to the cost of 
 power to the people, Mr. Miuray's "v/eighted average cost" has clumsily 
 been employed in order to create a fictitious basis of comparison. As a 
 means of discrediting the great Hydro undertaking, such methods have 
 truly been "weighed in the balances and found wanting." 
 
 Mr. Murray states: 
 
 "Unless all of the conditions surrounding published rates for the 
 several classes of service are known, the comparison of prices resulting 
 from these rates may be very misleading." 
 
 to which it may be added that, unless all of the essential factors employed by 
 Mr. Murray in making his comparisons of costs for the several districts he 
 compares are published, the absurdity of his comparisons cannot fully 
 be dealt with. 
 
 In his letter in reply to a request from the Chairman of the Hydro- 
 
44 STATEMENT IN RE:FUTATI0N 
 
 Electric Power Commission for data missing from his report, Mr. Murray has 
 explained that data received from certain private electric utilities have not 
 been published because they are "confidential." 
 
 In seeking to establish his contention that privately-operated electric com- 
 panies in the United States and in Canada are able to deliver power at lower rates 
 to the people than do municipally-operated electric utilities in Ontario, Mr. 
 Murray presents his comparison in respect to the costs of power in two main 
 divisions. First of all, he discusses relative costs appertaining to a wide- 
 spread or wholesale distribution of electrical energy by privately-owned 
 utilities in various districts which he has selected, and second, he makes com- 
 parisons of the costs of power to the peoples residing in certain cities in the 
 provinces of Ontario and Quebec, and in what Mr. Murray terms the Niagara 
 power district of the United States. 
 
 With regard to his treatment of the subject in its relationship to the 
 larger territorial sections, it should be understood that Mr. Murray has not 
 sufficiently defined his districts, nor the populations which he respectively 
 uses; he has not given proper summaries of the quantities of power involved, 
 nor shown how, for the respective districts, his quantities are determined. 
 In important instances, he has made comparisons between unlike units with 
 the result that his conclusions, based upon such premises, are necessarily 
 valueless and misleading. Time and again, Mr. Murray dogmatically asserts 
 that certain comparisons which he is making give results of such and such 
 percentages greater or less, as the case may be, than certain other quantities, 
 but he does not present the basic quantities themselves, with the consequence 
 that no one can tell how he arrives at his percentages. 
 
 By way of illustration of the vital significance of such omissions as have 
 just been cited, it may be recalled how in an earlier part of this Refutation 
 attention was drawn to the kind of comparison Mr. Murray is content to 
 make in the case of California compared with Ontario. It was then seen that 
 he had compared "that section of California analysed" — but which section was 
 in no sense described — with Hydro territory "other than the Niagara district," 
 and this latter he did not clearly differentiate. Similarly, when Mr. Murray 
 is dealing with "the section of Quebec taken for comparison with the govern- 
 ment electric utilities of Ontario," he states that the section involved in the 
 comparison "is located in the St. Lawrence Valley, extending from the city 
 of Quebec to the boundary between the province of Ontario and Quebec." 
 He, however, has not defined the other limits of the section and one is left in 
 doubt whether or not the valley on both sides of the St. Lawrence river is 
 included. Further, the confines of the territory employed in the state of 
 New York are not set forth. 
 
 Again, when Mr. Murray states in his report that 
 
 "In respect to the number of kilowatt hours served per capita, the 
 private companies in Quebec deliver 84% more than does the Hydro- 
 Electric Power Commission to its customers in Ontario." 
 
RE MURRAY AND FLOOD REPORT 45 
 
 he offers no explanation whatsoever of how he has derived such a percentage 
 nor does he, either in this or in any other instance, set forth to what extent 
 and in what manner he has, respectively, made use of the very large indi- 
 vidual blocks of power supplied for electro-chemical and other purposes by 
 private companies operating in the state of New York and in the province 
 of Quebec. It is pertinent here to emphasize the fact that one large privately- 
 owned company which, in 1920, generated a total of over 585,000,000 kilowatt- 
 hours, supplied more than 60 per cent of this energy to one power customer. 
 This represents for one of the private companies involved in Mr. Murray's 
 comparison, a load supplied to a single customer of not less than 60,000 horse- 
 power. If such large individual blocks of power supplied to one company 
 be only treated as though supplied to a single customer, to a per capita of one, 
 it is clear that per capita quantities deduced by the incorrect "v/eighting" of 
 such quantities could yield no truly significant conclusion. On the contrary 
 the deductions would be woefully misleading. 
 
 It is unnecessary to multiply illustrations. It certainly is not fitting in a 
 report claiming to be "impartial and exhaustive" that data respecting the 
 confines of districts employed in comparisons should be suppressed, that no 
 explanation should be given as to how total quantities of power generated or 
 supplied to customers have been determined, or as to what quantities have 
 been employed for the deduction of per capita units and so on. Mr. Murray's 
 methods, as exposed in the previous portion of this Refutation, amply justify 
 any one in refusing to accept his dogmatic assertions respecting the relative 
 cost of power. 
 
 It is definitely known that his representations are incorrect, but in view 
 of the fact that so many essential factors have been withheld and that other 
 data of the privately-owned companies have, according to Mr. Murray's state- 
 ment, been retained as "confidential," it is obvious that Mr. Murray's dis- 
 cussion of the comparative cost of power for the larger districts he selects is 
 unworthy of further attention. 
 
 Mr. Murray's comparison of the cost of electrical energy to the people 
 residing in certain cities in the provinces of Ontario and Quebec and in the 
 Niagara power district of the United States will next be considered. 
 
 Mr, Murray's Erroneous Comparison of Costs of Power 
 in the City of Buffalo and the City of Toronto 
 
 The criticism already made respecting the failure of Mr. Murray to present 
 the basic data necessary to any proper consideration of his statements relating 
 to the cost of power to the people in the various large districts, applies also to 
 the comparisons which Mr. Murray makes of the cost of pov/er in the large 
 cities to which he specially refers. 
 
 In only one instance, namely, in the case of his comparison of the city of 
 Buffalo with the city of Toronto, has it been possible to make an independent 
 investigation of the relative average cost of all the power sold to the people. 
 Even in the case of these cities, however, there are a number of conditions 
 which tend to unbalance the comparison. For example, Niagara power has 
 
46 STATEMENT IN REFUTATION 
 
 to be transmitted to Toronto over a distance four times greater than the dis- 
 tance over which Niagara power has to be transmitted to Buffalo. The 
 distributing company in Buffalo has no competition, whereas, in Toronto 
 there are two competitive operating systems. The effect of this competition is 
 that each of the electric systems in Toronto has had to erect, operate and main- 
 tain a separate distribution system for the city, but the total energy marketed 
 and the total revenue received are divided between the two systems; also 
 distribution in Toronto is more extensive than is the case in Buffalo. These 
 and other factors would naturally cause the cost of distribution per horsepower 
 or per kilowatt-hour to be higher in Toronto than would otherwise be the case. 
 Consequently, in having selected Toronto for comparison with Buffalo, Mr. 
 Murray has chosen a city where special conditions make the cost of local 
 distribution to the ultimate consumer relatively much higher than the cost 
 which appertains generally throughout the municipal hydro-electric under- 
 taking of the Province. 
 
 Notwithstanding the handicaps under which the Toronto Hydro-Electric 
 System operates as compared with the Buffalo General Electric Company, 
 it is demonstrable that the cost of electrical energy to the people served by the 
 Toronto Hydro System is less than the cost of electrical energy to the people 
 of Buffalo. 
 
 Upon examination, Mr. Murray's comparison of the "cost of power" 
 in the cities of Toronto and Buffalo is found to be very inaccurate. Mr. Mur- 
 ray's representation, that the cost of power in 1920 to the people of Buffalo 
 was 20 per cent less than in Toronto, cannot be substantiated, for, as a matter 
 of fact, the average cost of energy in Buffalo, in 1920, was actually higher than 
 in Toronto. Moreover, with the exception of certain specially favored, large 
 power consumers in Buffalo, the cost of electrical energy distributed in Toronto 
 is less than in Buffalo for every kind of service. 
 
 The artifice which Mr. Murray employs to obtain the fictitious results to 
 which he has given publicity, is to compare the "weighted average cost for 
 energy" in the two cities, but he uses different systems of weights for each city. 
 
 A fair and simple method by which to effect a reliable comparison of the 
 average cost of electrical energy in Toronto and in Buffalo is to ascertain the 
 total amounts which would be paid in the two cities combined; first, if all of 
 the energy sold in the two cities were charged at the average rates of the 
 Toronto Hydro-Electric System for each class of service, and second, if the 
 same energy were charged at the average rates of the Buffalo General Electric 
 Company for the same classes of service. By this method neither city can 
 have any advantage, because the total amount of energy under consideration 
 in each class is the total actually supplied in the two cities. Inasmuch as the 
 average rates at v/hich the energy is sold are, in each instance, applied to 
 precisely the same quantities of energy for the respective classes of service, 
 the totals will, of course, be representative of the average rates charged for the 
 total energy supplied. This method permits proper cognizance to be taken 
 of the different distributing costs applicable for various classes of service. In 
 
RE MURRAY AND FLOOD REPORT 
 
 47 
 
 Toronto, for example, the average rate per kilowatt-hour for lighting service 
 is about 2.22 cents, while the average rate for power service is 1.01 cents. 
 In Buffalo the average rate ranges from 3.73 cents for lighting to 0.76 cent 
 for power. Obviously, it is essential to take proper account of these differences 
 in rates, and this is accomplished by dealing individually with the respective 
 amounts of energy and average rates for each class of service, whether it be for 
 lighting, power, or municipal service. 
 
 Authentic data for making this comparison are available from the 
 latest published report (1922) of the Public Service Commission of the Second 
 District of the state of New York, which contains records for the city of Buffalo 
 for the year 1919,* — the last year published; and from the returns of the Toron- 
 to Hydro-Electric System for 1920, as checked by two independent audits. 
 In determining the average rates for the various classes of service, taxes have 
 not been deducted, because the amount ¥/hich the Toronto Municipal Treasury, 
 in 1920, saved on the cost of its municipal electric services was more than the 
 amount of taxes from which the Hydro system was exempted. A true com- 
 parison then of the average cost of all the electrical energy sold to the people 
 of Buffalo served by the Buffalo General Electric Company, and to the people 
 of Toronto served by the Toronto Hydro-Electric System, calculated at the 
 Toronto average costs for each class of energy and then at the Buffalo average 
 costs respectively for the same classes of energy is presented in the following 
 table : 
 
 TABLE IV 
 
 Average Cost of Electrical Energy in the 
 City of Toronto and in the City op Buffalo 
 
 Toronto Hydro-Electric System— Buffalo General Electric Company 
 
 Class of Service 
 
 Total 
 Kilowatt- 
 Hours 
 Toronto 
 and 
 Buffalo 
 
 Average Cost to the 
 People per Kilowatt- 
 Hour 
 
 Cost of all the Energy 
 
 Used by the People of 
 
 Toronto and Buffalo 
 
 
 Toronto 
 cents 
 
 Buffalo 
 
 cents 
 
 At Toronto 
 
 Average 
 
 Rates 
 
 At Buffalo 
 
 Average 
 
 Rates 
 
 Lighting 
 
 109,346,000 
 
 509,591,000 
 
 33,607,000 
 
 2.22 
 1.01 
 1.66 
 
 3.73 
 0.76 
 3.24 
 
 $2,427,000 
 $5,147,000 
 $ 558,000 
 
 $4,080,000 
 
 Power and Railway .... 
 
 $3,870,000 
 
 Municipal 
 
 $1,090,000 
 
 
 
 Totals 
 
 652,544,000 
 
 1.25 
 
 1.38 
 
 $8,132,000 
 
 $9,040,000 
 
 Averages 
 
 
 
 
 Total Omitting Railway 
 Power 
 
 571,480,000 
 
 1.26 
 0.16 
 
 1.52 
 
 
 
 $7,185,000 
 
 $8,710,000 
 
 Average Cost Omitting Rail- 
 way Power 
 
 
 Revenue Applied on Capital 
 Account 
 
 
 
 
 Net Average Cost of Energy 
 
 
 1.10 
 
 1.52 
 
 
 
 NOTE: Power used in Toronto (or municipal waterworks pumping has been included as "power" rather than as 
 "municipal service" since there is no corresponding item included in the municipal electric service supplied by the 
 Buffalo General Electric Company. 
 
 *Mr. Murray's comparison is for 1920 in both cities; as, however, his diagrams show that the cost of power in 
 Buffalo was higher in 1920 than in 1919, a comparison of Buffalo and Toronto prices, both in 1920, would give a rosult 
 •Ten more favorable to Toronto than the present comparison. 
 
48 STATEMENT IN REFUTATION 
 
 From the data presented in the foregoing table, it is seen that the cost 
 of electrical energy to consumers in Buffalo is not, as Mr. Murray alleges, 20 
 per cent lower than in Toronto, but the Buffalo costs are higher than those in 
 Toronto by at least 10 per cent. 
 
 The Toronto Hydro-Electric System for railway purposes only supplies 
 four small civic lines in scattered outlying parts of the city. The number of 
 kilowatt-hours sold in Buffalo for railway purposes is thirteen times greater 
 than that supplied by the Hydro-Electric System in Toronto. If, therefore, 
 the power sold for railways in both cities be eliminated — because of the non- 
 comparable extent and costs of this class of service — then, for all other classes 
 of consumers, the average cost of electrical energy in Buffalo becomes 21 per 
 cent higher than in Toronto. 
 
 As has previously been explained, the people of Toronto, in their rates for 
 electrical energy, are gradually paying for the cost of the installation required 
 for the service supplied them; and thus, in thirty years, they will own 
 their distributing system as well as a large share of the generating and 
 transmitting plant and equipment common to all the municipalities in the 
 system. This additional charge together with the surplus, in 1920, amount- 
 ed to over 1.6 mills per kilov/att-hour. This is essentially not a part of the 
 cost of power as usually understood, but constitutes an investment which still 
 belongs to the people, and will return dividends in the form of lower power 
 costs in the future. If this amount together with the non-comparable rail- 
 way power be excluded, then the cost of electrical energy in Buffalo is at 
 least 35 per cent higher than in Toronto. 
 
 From the comments just made, it is clear that in the only one of his 
 comparisons which Mr. Murray made it possible to check, namely, the relative 
 costs of electrical energy in Toronto and Buffalo, the facts are found to be the 
 reverse of what Mr. Murray has stated. Instead of being 20 per cent less 
 as Mr. Murray contends, the cost of electrical energy in Buffalo is a great 
 deal higher than in Toronto. 
 
 Discrimination in the City of Buffalo Against the Lighting Consumer 
 
 From the table on page 47, it appears that while in Buffalo the average 
 costs to the people per kilowatt-hour are higher for lighting and for municipal 
 services, yet the average rate paid per kilowatt-hour for power is lower in 
 Buffalo than in Toronto. The returns of the Buffalo General Electric Company 
 published by the New York State Public Service Commission, indicate that 
 marked discrimination is made in Buffalo in favor of the power consumers as 
 against the domestic and commercial lighting consumers, and even against 
 the city. 
 
 In Toronto, under Hydro administration the rates are calculated to con- 
 form, as nearly as possible, to the actual cost of serving each class of consumer. 
 Therefore, it is evident that in Buffalo the power consumers receive their 
 service at very close to cost, while the domestic and commercial consumers and 
 the city of Buffalo itself, appear to pay a great deal more than cost. This is 
 discrimination. Moreover, while on the average of kilowatt-hours the power 
 
RE MURRAY AND FLOOD REPORT 49 
 
 consumers pay very low rates — even lower than in Toronto, yet it can be 
 shown that even within the class of power consumers similar discrimination 
 occurs, — the great mass of power consumers, who take less than say 1,000 
 horsepower each, pajnng much higher rates than those paid by similar power 
 consumers in Toronto. This will be evident from the tables which follow, 
 giving actual bills for consumers of all classes in Toronto, recalculated 
 according to the published schedules of rates in Buffalo and other cities. 
 The high rates paid in Buffalo for small quantities of power are, however, 
 completely overshadowed in the average cost by a few very large power con- 
 sumers favored with exceptionally low rates. For instance, the low rates of a 
 single actual large power consumer in Buffalo lower the average cost per 
 kilowatt-hour by ten per cent, and the combined effect of the rates charged 
 to this and other large power consumers is to produce the average rate of 0.76 
 cents as shown in the table above. 
 
 It is therefore evident that not only are the costs of power to all consumers 
 on the average much higher in Buffalo than the corresponding average cost of 
 power in Toronto, but, v/ith the exception of a few specially favored very large 
 consumers of power, the average cost of electrical energy to the people is 
 much higher in Buffalo /or every class of service — whether it be domestic lighting, 
 commercial lighting, power or municipal services — than it is in Toronto under 
 the operation of the Toronto Hydro-Electric System. 
 
 Comparisons of Actual Bills to Ultimate Consumers in 
 Toronto, Hamilton, London, Montreal, Buffalo and Detroit 
 
 In spite of anything which Mr. Murray has said, or may say, the usual 
 way, and indeed the one which naturally appeals to the average citizen, of 
 determining how much his electrical service costs, is for him to consult his own 
 bills which regularly come in from those who supply the service. 
 
 In order to afford an opportunity of making comparisons upon a basis 
 of rates actually charged, there is below submitted a set of tables which show 
 the amounts which, respectively, have to be paid per annum for electric light 
 and power in the three large cities which Mr. Murray has mentioned, namely, 
 the cities of Toronto, Montreal and Buffalo. As interesting comparisons, there 
 have also been added the corresponding data for one other city in the United 
 States, — Detroit, and for the two cities of London and Hamilton in the prov- 
 ince of Ontario. 
 
60 
 
 STATEMENT IN REFUTATION 
 
 COMPARISONS OF YEARLY BILLS FOR ELECTRICITY 
 
 Calculated at the Rate Schedules in Force in the Cities of Toronto, Hamilton, London, 
 Montreal, Buffalo and Detroit in 1920 
 
 Actual Cases from Toronto Billing 
 
 TABLE V— DOMESTIC LIGHTING AND COOKING 
 
 Municipality 
 
 Toronto 
 
 Hamilton 
 
 London 
 
 Montreal 
 
 Buffalo 
 
 Detroit 
 
 
 Floor 
 
 Rooms 
 
 Yearly 
 
 Yearly 
 
 Yearly 
 
 Yearly 
 
 Yearly 
 
 Yearly 
 
 Yearly 
 
 Case 
 
 Area 
 
 Charged for 
 
 Kilowatt- 
 hours 
 
 Bill 
 
 Bill 
 
 Bill 
 
 Bill 
 
 Bill 
 
 Bill 
 
 
 
 
 
 $ c 
 
 $ c 
 
 $ C 
 
 $ C 
 
 $ C 
 
 $ C 
 
 1 
 
 1000 
 
 3 
 
 357 
 
 9.33 
 
 9.33 
 
 9.33 
 
 18.93 
 
 24.99 
 
 22.57 
 
 2 
 
 " 
 
 3 
 
 582 
 
 11.69 
 
 11.69 
 
 11.69 
 
 29.74 
 
 34.08 
 
 30.67 
 
 3 
 
 " 
 
 3 
 
 2313 
 
 27.30 
 
 27.30 
 
 27.30 
 
 69.49 
 
 135.72 
 
 92.99 
 
 4 
 
 1600 
 
 4 
 
 132 
 
 7.56 
 
 7.56 
 
 7.56 
 
 8.14 
 
 12.00 min. 
 
 16.63 
 
 5 
 
 " 
 
 4 
 
 373 
 
 11.99 
 
 11.99 
 
 11.99 
 
 19.70 
 
 25.72 
 
 26.39 
 
 6 
 
 " 
 
 4 
 
 5365 
 
 58.65 
 
 58.65 
 
 58.65 
 
 112.27 
 
 268.60 
 
 206.10 
 
 7 
 
 3000 
 
 5 
 
 430 
 
 17.44 
 
 17.44 
 
 17.44 
 
 22.44 
 
 30.10 
 
 31.68 
 
 8 
 
 " 
 
 5 
 
 1704 
 
 34.12 
 
 34.12 
 
 34.12 
 
 83.56 
 
 78.33 
 
 77.54 
 
 9 
 
 
 5 
 
 3005 
 
 45.97 
 
 45.97 
 
 45.97 
 
 76.87 
 
 174.20 
 
 124.38 
 
 TABLE VI— COMMERCIAL LIGHTING 
 
 Municipality 
 
 Toronto 
 
 Hamilton 
 
 London 
 
 Montreal 
 
 Buffalo 
 
 Detroit 
 
 
 Installed 
 
 Yearly 
 
 
 
 
 
 
 
 
 Capacity 
 
 Kilowatt- 
 
 Yearly 
 
 Yearly 
 
 Yearly 
 
 Yearly 
 
 Yearly 
 
 Yearly 
 
 Case 
 
 Kilowatts 
 
 hours 
 
 Bill 
 
 Bill 
 
 Bill 
 
 Bill 
 
 Bill 
 
 Bill 
 
 
 
 
 $ C 
 
 $ C 
 
 $ c 
 
 $ C 
 
 $ C 
 
 $ c 
 
 10 
 
 0.9 
 
 895 
 
 30.43 
 
 16.37 
 
 21.94 
 
 44.76 
 
 55.24 
 
 54.86 
 
 11 
 
 0.9 
 
 818 
 
 27.57 
 
 15.54 
 
 20.56 
 
 41.06 
 
 52.16 
 
 61.39 
 
 12 
 
 1 
 
 1,630 
 
 42.45 
 
 20.88 
 
 29.63 
 
 80.04 
 
 86.80 
 
 89.55 
 
 13 
 
 5 
 
 2.711 
 
 105.16 
 
 66.54 
 
 81.20 
 
 131.93 
 
 189.77 
 
 203.00 
 
 14 
 
 6.4 
 
 5,470 
 
 192.66 
 
 106.77 
 
 139.93 
 
 264.36 
 
 357.04 
 
 349.83 
 
 15 
 
 6 
 
 23,873 
 
 357.60 
 
 140.48 
 
 228.50 
 
 1147.70 
 
 811.70 
 
 936.17 
 
RE MURRAY AND FLOOD REPORT 
 TABLE VII— POWER SERVICE, SMALL LOADS 
 
 51 
 
 M 
 
 unicipality 
 
 Toronto 
 
 Hamilton 
 
 London 
 
 Montreal 
 
 BujBfalo 
 
 Detroit 
 
 Case"^; 
 
 Con- 
 nected 
 
 Load 
 Horse- 
 power 
 
 Yearly 
 Kilowatt- 
 hours 
 
 Yearly 
 Bill 
 
 Yearly 
 Bill 
 
 Yearly 
 Bill 
 
 Yearly 
 Bill 
 
 Yearly 
 Bill 
 
 Yearly 
 Bill 
 
 16 
 17 
 18 
 
 5 
 
 6.5 
 
 5 
 
 1,162 
 4,750 
 3,573 
 
 $ c 
 
 88.77 
 
 139.11 
 
 103.03 
 
 $ c 
 48.26 
 86.92 
 66.36 
 
 $ c 
 
 55.14 
 
 105.05 
 
 80.11 
 
 $ c 
 
 83.24 
 
 168.75 
 
 128.60 
 
 $ c 
 111.34 
 249.38 
 191.06 
 
 $ c 
 213.43 
 339.01 
 259.24 
 
 Case 
 
 Con- 
 nected 
 
 Load 
 Horse- 
 power 
 
 Yearly 
 
 Kilowatt- 
 hours 
 
 Per 
 Horse- 
 power 
 
 Per 
 
 Horse- 
 power 
 
 Per 
 Horse- 
 power 
 
 Per 
 Horse- 
 power 
 
 Per 
 
 Horse- 
 power 
 
 Per 
 Horse- 
 power 
 
 16 
 17 
 18 
 
 5 
 
 6.5 
 
 5 
 
 1,162 
 4,750 
 3,573 
 
 $ c 
 17.75 
 21.40 
 20.61 
 
 $ c 
 
 9.65 
 
 13.37 
 
 13.27 
 
 $ c 
 11.03 
 16.16 
 16.02 
 
 $ c 
 16.65 
 25.90 
 25.72 
 
 $ c 
 22.25 
 38.37 
 38.21 
 
 $ c 
 42.68 
 52.16 
 51.85 
 
 TABLE VIII— POWER SERVICE 
 
 Municipality 
 
 Toronto 
 
 Hamilton 
 
 London 
 
 Montreal 
 
 Buffalo 
 
 Detroit 
 
 
 Average 
 
 Yearly 
 
 
 
 
 
 
 
 Case 
 
 Demand 
 
 Kilo- 
 
 Yearly 
 
 Yearly 
 
 Yearly 
 
 Yearly 
 
 Yearly 
 
 Yearly 
 
 Horse- 
 
 watt- 
 
 Bill 
 
 Bill 
 
 Bill 
 
 Bill 
 
 Bill 
 
 Bill 
 
 
 power 
 
 hours 
 
 
 
 
 
 
 
 
 
 
 $ c 
 
 $ c 
 
 $ c 
 
 $ c 
 
 $ c 
 
 $ c 
 
 19 
 
 121.7 
 
 103,900 
 
 2,398.74 
 
 1,722.19 
 
 2,094.98 
 
 2,864.50 
 
 2,853.22 
 
 5,195.80 
 
 20 
 
 48.83 
 
 66,700 
 
 1,080.10 
 
 724.46 
 
 882.71 
 
 1,358.93 
 
 1,502.74 
 
 2,764.93 
 
 21 
 
 92.6 
 
 356,660 
 
 2,852.92 
 
 1,580.40 
 
 1,922.53 
 
 3,727.90 
 
 4,990.04 
 
 9,042.07 
 
 22 
 
 347.5 
 
 399,700 
 
 6,808.79 
 
 5,088.11 
 
 6,200.85 
 
 9,209.50 
 
 8,843.23 
 
 15,977.98 
 
 23 
 
 709.2 
 
 837,740 
 
 14,868.06 
 
 10,403.98 
 
 12,678.86 
 
 19,015.40 
 
 18,080.48 
 
 32,604.86 
 
 24 
 
 616.7 
 
 1,559,000 
 
 15,625.35 
 
 9,795.84 
 
 11,922.14 
 
 20,745.70 
 
 24,051.08 
 
 43,351.94 
 
 
 Average 
 
 Yearly 
 
 Per 
 
 Per 
 
 Per 
 
 Per 
 
 Per 
 
 Per 
 
 
 Demand 
 
 Kilo- 
 
 Horse- 
 
 Horse- 
 
 Horse- 
 
 Horse- 
 
 Horse- 
 
 Horse- 
 
 Case 
 
 Horse- 
 power 
 
 watt- 
 hours 
 
 power 
 
 power 
 
 power 
 
 power 
 
 power 
 
 power 
 
 
 
 
 $ c 
 
 $ c 
 
 $ c 
 
 $ c 
 
 $ c 
 
 $ c 
 
 19 
 
 121,7 
 
 103,900 
 
 19.71 
 
 14.15 
 
 17.21 
 
 23.54 
 
 23.44 
 
 42.69 
 
 20 
 
 48.83 
 
 66,700 
 
 22.12 
 
 14.84 
 
 18.08 
 
 27.83 
 
 30.77 
 
 56.62 
 
 21 
 
 92.6 
 
 356,660 
 
 30.81 
 
 17.06 
 
 20.76 
 
 40.26 
 
 53.89 
 
 97.65 
 
 22 
 
 347.5 
 
 399,700 
 
 19.59 
 
 14.64 
 
 17.84 
 
 26.50 
 
 25.45 
 
 45.98 
 
 23 
 
 709.2 
 
 837,740 
 
 20.96 
 
 14.67 
 
 17.87 
 
 26.81 
 
 25.49 
 
 45.97 
 
 24 
 
 616.7 
 
 1,559,000 
 
 25.43 
 
 15.88 
 
 19.33 
 
 33.64 
 
 39.00 
 
 70.30 
 
 The very great differences which exist in the amounts charged for the same 
 kind of service to the ordinary consumer in all classes, in the Ontario cities of 
 Toronto, Hamilton, and London, as compared with Montreal, Buffalo and 
 Detroit, are well brought out in the above tables. 
 
52 STATEMENT IN REFUTATION 
 
 By comparing the Toronto bills with the corresponding bills in Hamilton 
 and London, it will be seen that, on account of conditions which have already 
 been explained, Toronto consumers pay relatively higher rates than do the 
 consumers in Hamilton or London. Mr. Murray, therefore, selected for his 
 comparison a city which is far from representative of normal Hydro operation. 
 
 Comparing the bills in the Ontario cities with the corresponding bills in 
 Montreal, Buffalo and Detroit, the disparity in the costs of electrical service 
 is very evident. Almost without exception, the bills in Toronto, Hamilton and 
 London are lower than the bills for corresponding service in Montreal, Buffalo 
 and Detroit. From the preceding tabular data it is seen that the differences 
 between Hamilton bills and those in cities under private ownership, range 
 from 5 to 600 per cent in the case of Montreal, from 50 to 400 per cent in the 
 case of Buffalo, and from 75 to 500 per cent in the case of Detroit. 
 
 In the face of such facts as are illustrated by these tables of actual con- 
 sumers' bills, — and also by the table on page 47 — it is astonishing that Mr. 
 Murray should have failed to perceive the absurdity of denying the fact that 
 the cost of electrical energy to the people is lower in Ontario under municipal 
 ownership than it is in other places served by private electric utilities. Mr. 
 Murray's method of comparison simply produces fictitious results and inas- 
 much as he has employed the same method throughout his comparisons of the 
 cost of power, his other comparisons also may be dismissed as meaningless. 
 
 Conclusion 
 
 In entering upon this discussion of the true character of the "Murray 
 Report," it was charged that, in addition to misrepresenting the achievements 
 of the Hydro-Electric Power Commission of Ontario, Mr. Murray has made 
 grossly incorrect and misleading statements; he has garbled documentary and 
 other data and then employed them as premises from which to derive conclu- 
 sions; he has made pronouncements based upon comparisons so inadequate as to 
 be puerile; he has made charges which he fails to substantiate; he has ignored 
 important factors, even disregarding most pertinent engineering data; he has 
 seriously miscalculated the cost of Niagara power; he has omitted to describe 
 the confines of districts he discusses; he has not shown how summaries have 
 been derived; he has made comparisons between unlike units; with respect 
 to the costs of power, he has shown himself singularly lacking in the application 
 of engineering economics; and he has failed to supply data essential to the 
 integrity of the claim of reporting in an "exhaustive and impartial" manner. 
 In a word, it was charged that Mr. Murray had employed methods demonstra- 
 bly reprehensible and unprofessional. 
 
 This charge has now been substantiated by representative instances 
 selected from the mass of such material to be found in the "Murray Report." 
 The varied character and comprehensive range of the subjects specifically 
 dealt with is well disclosed by glancing over the table of Contents of this 
 Refutation. 
 
RE MURRAY AND FLOOD REPORT 53 
 
 When it is realized that over 300 municipalities have invested more than 
 $200,000,000 in their Hydro enterprise, and when one considers the great 
 value of the co-operative efforts which have resulted in the distribution of 
 electrical energy at cost to over 1,000,000 citizens, it is inexcusable that this 
 undertaking should be subjected to such an unwarranted attack as the 
 National Electric Light Association of New York has made through the 
 agency of the "Murray Report." In view of the special and widespread 
 publicity given to the "Murray Report," it became desirable to issue this 
 authoritative statement in reply. 
 
 Inasmuch as the "Murray Report" has been shown to be permeated by 
 misrepresentations and unjust statements, it is, after all, seen to be but one 
 more of those impotent attempts vv'hich, from time to time, have been made to 
 discredit the outstanding achievements of the co-operating hydro-electric 
 municipalities of the province of Ontario. 
 
Description of the Tables 
 
 i( Ontario and the Municipal 
 
 Explanation o 
 
 la CoLuuNs o: 
 
 Cotunm 1 — gives the names of tbe Municipalities now uni 
 Ihe Hydro-Electric Power Commission of Ontario for a supply o 
 generated at Niagara Falls, and the dates upon which each B 
 menced to receive this supply of power. 
 
 pality by the H>-dro-Electric Power Commission o( Ontario duri 
 
 rith the Comn 
 
 icipalities supplied from tl 
 and maintained by the 1 
 Muni dp all ties by means o 
 
 
 
 : Power Comm 
 
 e System during tbe 
 
 Column ♦— Gi 
 
 Municipalities. These pli 
 cipalities from thi 
 
 intained by the Muni- 
 
 ,nk Balance 
 
 Note:— Among other charj 
 to Municipalities includes 
 ac cording t 
 
 Cost of Power to the Commission as charged 
 
 levy (after the five-year exemption period 
 
 Commission Art) for Sinking Fund for the specific purpose 
 misaion's debt to tbe Provincial Government, and also in- 
 
 
 e Funds is reflected ai 
 
 h Municipality ii 
 
 aSyst 
 
 LIABILITIES 
 
 Column S— Gives the Municipalities'! lability ir 
 Po«er Commission's Plants. Th< 
 
 by the Commission in stations, lin 
 
 sion's Sinking Fund collected in 
 
 ePow. 
 
 i\ Deben 
 
 ig other charges 
 n the Power C( 
 e Hydro-Electr 
 e total of the si 
 
 
 iccumulat«d after having 
 t^entA, Sinking Fund, . 
 
 T Company of Niagar 
 
 li Municipal Eydio Utilities of the Nias 
 
 » IS— Total Reserv 
 
 Hydro-Electric Power Commission Balance Sheet 
 
 for the Period Ending December 31st, 1921 
 
 (Municipalities of 
 Niagara System) 
 
 SrX" 
 
 RESERVES 
 
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