Ontario Bond Scandal
Encyclopedia
The Ontario Bond Scandal was a scandal
that hit the government of Ontario
in the early 1920s.
Ontario had been governed by the United Farmers of Ontario
of Ernest C. Drury since 1919. In 1922 a scandal broke out over the purchase of government bonds. It seemed that Peter Smith, the Ontario Treasurer, had given a close friend of his, Andrew Pepall, lucrative payments to travel to London
to secure better financing for Ontario's debt. The original outrage was that Pepall had been paid the then large sum of eighty dollars per day for the trip, in which he did hardly any actual work.
The scandal escalated, however, when it was discovered that a portion of the commission for the bond contracts had found its way into Smith's bank account. Andrew Pepall's firm, owned by Aemilius Jarvis
had earned some 130,000 pounds in profit from the arrangements, and these profits had been divided among Pepall, Smith and Jarvis. The scandal played an important role in the fall of the UFO government in 1923.
The next year Jarvis and Smith went on trial. Also charged were Jarvis's son and Andrew Pepall's brother Harry Pepall who were accused of playing a minor role in the affair. The verdicts were handed out on October 24, 1924. Jarvis and Smith were both found guilty of conspiracy to defraud the government. Jarvis was sentenced to six months in prison, Smith received three years. (The Globe, Sat., Oct. 25,1924) They were each fined 600,000 dollars, then the largest fines ever demanded in the British Empire
. Jarvis Jr. and Harry Pepall were found not guilty. Andrew Pepall had fled to California
. At that time conspiracy was not an extraditable offense, and he could only be brought back to Canada to face charges of theft and bribery. He was found not guilty of these in late 1925.
Scandal
A scandal is a widely publicized allegation or set of allegations that damages the reputation of an institution, individual or creed...
that hit the government of Ontario
Ontario
Ontario is a province of Canada, located in east-central Canada. It is Canada's most populous province and second largest in total area. It is home to the nation's most populous city, Toronto, and the nation's capital, Ottawa....
in the early 1920s.
Ontario had been governed by the United Farmers of Ontario
United Farmers of Ontario
The United Farmers of Ontario was a political party in Ontario, Canada. It was the Ontario provincial branch of the United Farmers movement of the early part of the 20th century.- Foundation and rise :...
of Ernest C. Drury since 1919. In 1922 a scandal broke out over the purchase of government bonds. It seemed that Peter Smith, the Ontario Treasurer, had given a close friend of his, Andrew Pepall, lucrative payments to travel to London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
to secure better financing for Ontario's debt. The original outrage was that Pepall had been paid the then large sum of eighty dollars per day for the trip, in which he did hardly any actual work.
The scandal escalated, however, when it was discovered that a portion of the commission for the bond contracts had found its way into Smith's bank account. Andrew Pepall's firm, owned by Aemilius Jarvis
Aemilius Jarvis
Edward Aemilius Jarvis was a Canadian businessman and sailor.-Career and Military Service:A member of a prominent Toronto family, Jarvis apprenticed as a banker, and eventually became president of the Trader's Bank of Canada. Jarvis founded the Steel Company of Canada...
had earned some 130,000 pounds in profit from the arrangements, and these profits had been divided among Pepall, Smith and Jarvis. The scandal played an important role in the fall of the UFO government in 1923.
The next year Jarvis and Smith went on trial. Also charged were Jarvis's son and Andrew Pepall's brother Harry Pepall who were accused of playing a minor role in the affair. The verdicts were handed out on October 24, 1924. Jarvis and Smith were both found guilty of conspiracy to defraud the government. Jarvis was sentenced to six months in prison, Smith received three years. (The Globe, Sat., Oct. 25,1924) They were each fined 600,000 dollars, then the largest fines ever demanded in the British Empire
British Empire
The British Empire comprised the dominions, colonies, protectorates, mandates and other territories ruled or administered by the United Kingdom. It originated with the overseas colonies and trading posts established by England in the late 16th and early 17th centuries. At its height, it was the...
. Jarvis Jr. and Harry Pepall were found not guilty. Andrew Pepall had fled to California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
. At that time conspiracy was not an extraditable offense, and he could only be brought back to Canada to face charges of theft and bribery. He was found not guilty of these in late 1925.