Date Published:
September 2006

Documents de l’histoire du Québec / Quebec History Documents

Natural Gas Scandal [1958]

"Gas Attack"

SCANDAL AT QUEBEC NATURAL GAS CORPORATION, screamed the red-inked head-lines in Montreal's Le Devoir: SIX DU­PLESSIS MINISTERS IMPLICATED. Thus billed as a major political exposé, a series of stories in Le Devoir last week made the province's hottest reading; cautious citizens buried their copies of Le Devoir inside more innocuous newspapers—and clucked with shock at what they saw. Le Devoir happily stepped up its press run from 30,000 to 50,000.

What Le Devoir told was how the pro­moters and shareholders of Quebec Nat­ural Gas Corp. piled up paper profits of more than $20 million when the corpora­tion's 800,000 class A shares (par value: $10) and 540,000 class B shares (issue price: $8) advanced to a market value of $25 a share. Among the stockholders who shared these handsome profits, reported Le Devoir, were provincial ministers whose official decisions had notably con­tributed to Quebec Natural Gas's alluring prospects; they had approved the deal by which the company bought the Montreal gas-distribution facilities of the provin­cially owned Quebec Hydro.

A Look at the Record.

Le Devoir be­gan to take a pointed interest in Quebec Natural Gas Corp.'s affairs when its vet­eran legislative reporter, Pierre LaPorte, bought one share of stock in the company and wangled a look at the stockholder records. There he encountered some fa­miliar names. Labor Minister Antonio Barrette was down for 250 units; (1) as­suming that he had paid the standard issue price for his units, Barrette could have sold out at the peak of the market for a profit of $15.000. Four other cabinet officers and Onésime Gagnon, finance min­ister until last January and now lieuten­ant governor of Quebec, were registered as owners of smaller blocks of stock and debentures.

By Le Devoir's tally, the ministers could have made a maximum profit of $37,000 had they sold out at the peak of the market. But when compared with the six-figure profits hauled in by Ontario Mines Minister Philip Kelly from the Northern Ontario Natural Gas Co. (TIME. May 19), the Quebec ministers' gains were penny-ante deals.

Above the Battle.

Premier Maurice Duplessis refused at first to discuss Le Devoir's charges except to deny that he personally had owned any Quebec Natu­ral Gas stock, and to remark sadly that he could no more silence Le Devoir's ac­cusations "than one can prevent a dog from urinating on a church." He would bring no slander charges against the newspaper, he shouted at a Le Devoir report­er, only "because you could plead insanity —and make it stick."

But after sensing the public's fascinated interest in the case, Duplessis decided to enter a more detailed rejoinder. At a press conference, the premier pointed out that the stockholdings of his ministers represented "only a tiny part of the shares put on the market." Said he: "I have en­dured with much patience the numerous libels that Le Devoir has aimed at me. I will ask the courts to obtain justice and to make the truth explode." Seemingly of little interest to Duplessis: any conflict between the ministers' interests as stock-holders and their obligations as public officials.

(1) A unit consisted of one $100 debenture plus four shares of common stock and sold originally for $140. The market value of the debentures and shares rose to $200, has since settled back to $184.

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Source: “Gas Attack”, Time Magazine (Canada), Vol. LXXI, No 26 (June 30 1958): pp. 9-10