THE HYDRO-ELECTRIC POWER QUESTION.

Address by Mr. Cecil B. Smith, C.E., Chairman of the HydroElectric Power Commission, Ontario, before the Empire Club of Canada, on December 27th, 1906.

Mr. Chairman and Gentlemen,

I assure you I consider it a great honour to be invited to address the Empire Club. It is a Club that I have known of and have been thinking of joining. I hope I will be given the opportunity of doing so. You have done me the honour of asking me to address you on a subject which, I suppose, may be considered to be of interest in some form or other to almost every citizen, and as I have been interested in the matter for a considerable number of years, I will endeavour to make some remarks which may perhaps be of interest and value to you at the present time. The question is of a somewhat controversial nature, and I do not think it would become either me or the Club that it should be treated in this manner, and, therefore, it appears best to leave the treatment in the form of either a history or a prophecy, and as a prophecy is rather a thankless task, I would prefer to treat the matter historically, leading up to the condition of the art or science of distributing electrical energy at the present moment.

As you are aware, the main sources of power that are of any value in commercial and industrial life are fuel and water. There are others, but they are not of commercial importance. In the earlier days, a hundred years ago, the use of fuel as applied to the development of power by steam was studied and brought into a commercial condition, and we have had for the last twenty-five years a gradual perfecting of this method of the use of power; that is, the steam engine was, practically speaking, perfected a long while ago. Since that time a great many improvements have been added from year

to year, until at the present time we may say that the steam engine method of producing power is practically standard and is as perfect as can be obtained, humanly speaking. At the same time in certain localities in the old lands and later in America, use was made of water power.

At the time water powers were first developed, it is evident that they must have been used only locally. That is, a small village or town sprang up in consequence of the use being made of a water power in grinding or in milling, or the various other purposes which come easily to your mind. This brings us up to a period of some twenty years ago, and then the scientists discovered something which I believe you do not yet fully realize. It is something which will enable the distribution of the people on the earth's surface to be considerably changed from what it was, and is going to be a very important factor. Some twenty years ago it was discovered that electric power could be transmitted over a wire and naturally it soon became demonstrated that it could be done in a commercial manner. First of all it was a plaything. At Frankfort they carried some power a short distance. That was the beginning. It is interesting that at that time, in that country, and at that place, there was developed probably to the greatest extent yet developed the method of rope drive. A water power of considerable size, some thousand horse power, generates power on one side of the Rhine and transmits to a large number of factories a considerable amount of power by wire rope; and there was the infant electrical idea springing into being almost in the same locality.

As soon as it became evident that large amounts of power could be distributed over considerable territory by electrical energy, it naturally passed out of the hand of the scientist, not entirely, but in this sense it passed into the hands of the sharp-witted financier. This was evidently the second stage. As soon as it became evident that this thing could be done, the brightest commercial minds of the country would naturally say to themselves, "Well, now, what use can we make of this in order to

make money! y?" There may have been many cases in which a person engaged in his own industry acquired a water power and devoted that only to his own industry, but the natural development beyond this point was that financial interests should study this matter from a financial point of view, and you have around you now evidence of the result. Mr. Chairman, I think it would be well to dwell for a moment on the importance of water powers to this Province, because, as you know, the Province of Ontario and the Province of Quebec are each dependent on a foreign supply of fuel. The wood supply is a thing which will disappear in time, in fact it has practically disappeared. We have to depend upon the United States for fuel-we have always to depend upon them for fuel, and, therefore, if we can develop some latent source of power in our Province, and create an asset in the Province and rid ourselves of the necessity of purchasing so much fuel from a neighbouring country, we will have done something which will form a stable basis for our industries for all time to come.

That is a point that I would like to have you consider, that this development of water powers, and the distribution of energy therefrom, is something which the industries can count upon, humanly speaking, forever; for, so long as the winds blow the atmosphere will ascend, and will have in it sources of power which can be used by man for his industries. It is a continuous cycle which a good Providence has provided for us. Fortunately the Power Commission has covered the Province fairly well, not entirely, but the figures of the present time would warrant this assertion that considering that the Niagara Falls, and the St. Lawrence River, and the Soo, and all other international or interprovincial waters, belong only one-half to Ontario, then we have available within the settled parts of the Province three and a half million horse power, and I think it is a safe estimate to say that there is nearly as much more in those portions of the Province which will later on become populated, so that you can see that you have available five or six million horse power rightfully be

longing to this Province; and I would say that that is based on the most unfavourable condition, which is what we speak of as the minimum or dry weather continuous flow, and I will explain in a moment how this can be augmented enormously so as to increase the value of these water powers.

I do not want to make an assertion which would be quoted, but merely as an illustration. We will suppose that water power as a whole can be supplied to the customers at, say, $25 per horse power per year, and that supply of power, by the present methods from steam, costs $35, just as an illustration. The conditions vary with every place-the cost of coal, the distance, water power, and thousands of other special and local considerations, but there is a large margin between the two, and a difference of $10 leads to what conclusion? That as these powers continue to be used, you have got an asset of $10 per horse-power, which you have to capitalize, that is $200 per horse-power latent and outside. of any investment, and if you multiply that by 31⁄2 million you have $700,000,000 as being latent at our doors at the present time, within the confines of the settled portions of this Province, to be made use of to operate and increase and to make stable forever our industries.

To refer to the use of electric energy for a city, for any city, this is a thought that is worth while dwelling on. Practically all of the uses to which electric energy is put are in themselves natural monopolies, a Street Railway, electric light for your house, for the street lighting, and for the various uses of power, necessitating distribution of the current by underground or overhead methods. These are evidently all natural monopolies, and a question always, to my mind, has been, given that that thing should be a natural monopoly, it ultimately will become so, and so the question is "Whose monopoly should it be?" As to the use of electric power-many of you here, no doubt, are more familiar with factory equipment than I am, many of you probably being owners of factories operating steam or electric motors. There is one thing certain, it has been demonstrated, that in