BEAUHARNOIS CORPORATION

Evening Star, Issue 21005, 20 January 1932, Page 9

BEAUHARNOIS CORPORATION

BANKS WITHHOLD LOANS AWAITING GOVERNMENT'S INTENTION Press Association—By Telegraph—Copyright. NEW YORK, January 18. (Received January 20, at 1 a.m.) The ‘ New York Herald—Tribune’s ’ Montreal correspondent reports that the banks, which are interested to the extent of 12,000,000 dollars in the Beauharnois Corporation, are withholding loans for the power company until the intention of the Canadian Government is known The banks for a month Rave been doing the financing for the Beauharnois Corporation on the basis of a tacit guaranty by the Government, t but further guarantiee apparently are , not forthcoming. It is understood that the block of stock represented in payment by the Beauharnois Corporation for sterling in the industrial company is to bo returned to the Treasury. It has been settled that Mr McDougall, Mr Henry, and Mr Sweezey shall retire from the board, but The membership of the new board is still undecided. [The affairs of the Beauharnois Power Corporation are under examination by a Select Committee of the Canadian House of Commons. The corporation obtained a concession for a power project on the St. Lawrence River to cost £15,000,000. _ The concession is alleged to be invalid because it was authorised by the Governor-in-Council and not by Parliament. It was claimed that only Parliament could grant concessions involving the diversion of water from a navigable river. It was also established that the project was not being carried out_ in accordance with the plans on which the concession was granted, for the president of the corporation admitted that he sought to divert into the company’s canal the whole of the overflow instead of the 40,000 cubic feet a second permitted in the concession. _ Another charge was that politicians improperly used influence to procure the concession, and that they were financially interested in the project. It was established that one Senator, who held an interest in the Beauharnois syndicate before the concession was granted, made a cash profit of £60,000 and received £200,000 worth of Beauharnois shares after the concession had been obtained. The public -hearing ended suddenly after an admission by the president of the corporation that he had arranged for contributions of nearly £200,000 of the corporation’s money to political funds,]