Ontario Bond Scandal

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.