l v i

- vaaoe- -

lGeorge Dreiw in his spirited opening campaign

_ for the current year. These reductions, he pointed

‘is reduced to get the estimated surplus of $87,500,000 for the current election year. To meet this year's higher expenditures,

c "There can be no other conclusion" says

' saucers" which have perturbed millions of peo-

selentiets should seriously consider them as "visi- ~' Marflosggests reel concern. In the

PAGE FOU_R i ' THE GUARDIAN

Burning Dally (lfnanclau ll Ill?) Author-Ian! an sievunrl (‘lain llgll, Poet Offlaa Department, Ottawa.

The lelrsnd liurerdiisn Publishing Ca. Illlur and Managing ' ‘ . J It Burl!!!- Aoaamlate llirlllae, Irisai Wallal.

"The Strongest Memory is Weaker Thae e the Weakest ink.”

TUESDAY, MAY 10, 1949

flliAllLOTTETOlVN,

fiiony Tax Reductions

One of many strong points made by Hon.

speech at The Forum last night had to do with the income tax reductions in the Aibbott budget

out, were possible only because of the excessive levies collected last year, and because the cur- rent year's revenues from additional indirect or hidden taxes are to be increased.

Hon. Mr. Abbott's last Budget speech arg-ued at length, if not convincingly, that by shifting the burden of taxation from one group to another the Government hoped to moderate the effects of cyclical movements in business activity. in one phase, when an inflationary trend is noted, personal income taxes should be hifli to discourage spending. That was last year. Now that Mr. Abbott's crystal ball foretells rc- assuring equilibrium between price trends and production, consumer spending is to be en- couraged, while the Treasury will rely on in- creased revenues from corporation taxes and indirect levies hidden in prices paid for goods and services.

The following figures, from a recent issue of the Globe and Mail, summarize the current and last ycar's Budget results. The figures are in millions of dollars, and those for i949 al- low for reduced revenue from personal income taxation:

1948-49 1949-50 Change

Revenue . . . . . $2,768 $2,477.5 Down $290.5 Expenditure , , 2,193 2,390 U-p 197 Surplus . . . .$ 575 $ 87.5 $487.5

lt will be noticed that the final figure in the above table, $487,500,000, may be arrived at in two ways from the other data. it is the spread between lower revenues and higher ex- penditures budgeted for this year; and it also is the amount by which the surplus of 1948-49

otter making a gift of $369,000,000 in income tax cuts to electors, the Budget can be balanc- ed only by increasing prospective reven-ues from hidden taxation; further, the cut in personal income taxes and the increase in hidden taxes are directly and mathematically reflected in the figure $487,500,000, which is the exact differ- ence between last year's swollen surplus and this year's more meagre one.

Regardless of the technicalities of Gov- ernment accounting, the fact is that taxes were over-collected in one year to make possible a lax cut in the next, although taxation in the form of hidden levies is actually increased.

The cyclical Budget theory advanced by tho Finance Mi-nister, therefore, means that over the two-year period there has been no-re- duction in taxation, but that, on the contrary, there has been on actual increase in taxation. And that increase is to be provided from the most noxious of all tax sources, the hidden levies such as sales and excise taxes which are hidden in prices which the consumer must pay for goods and services bought to maintain his home and his business.

The disbursement of $250,000,000 of re- lundcble personal income taxes collected in the war years is iust additional icing on this un- palatable cake. Repayment on the eve of a general election of these forced loans for two of the war years could be calculated to con- ceal the fact that the net result of our last two Budgets has been an increase in hidden taxa- tion. Moreover, if the collection of hidden taxes in the third fiscal year of the series, 1950-51, is not further and very substantially increased, a whopping deficit is in prospect.

the Globe and Mail, "than that Mr. Abbott's theory of cyclical changes in taxation is phony from beginning to end. The institution of the Budget has thus degenerated into a combina- tion of boodle-bcg for election purposes an-d a screen to conceal the basic fact that when a Government budgets higher expenditures it also m-ust budget for higher taxes—in'this case, taxes that are to be hidden in prices."

Those Flying Saucers

‘Ilse United States Air Force liq deeehd time and labor to investigations of those "flying

pla on this continent in the past two years, and now makes public some of its findings. ‘It has followed about 270 leads in the United States and Canada, and sought to trace the flight or arrival of innumerable flying discs. it has dis- covered that three pilots have met death during investigations of these phenomena.

' The notion that these missiles were of for- eign origin is "beingconside ed." The report has an amazing comment on this aspect of the discs: "but the reported performance .of the discs is so luperior to a thing we have yet approached in this country, at it is considered only on ac-. cideniol discovery of ‘a degree of novelty never before achieved’ could suffice to explain such devicesf’,

“The "llyin saucers" remain mysterious and iinenplaineilHlTie-y were not merely flgmants of the ima lnation, phanlvismol visions of unstable people. Sober inquiry on the spot has proved thgt many of the reports were fully eiiplainoble in simple and logical ‘terms. lot not all of thorn. Where there was smoke there was also firs. That

"-lhe'rlol' or rlrdiu a if." ml

Impressed iiy Difference

The Sf. John's Evening Telegram quotes Premier Jones as stating at the Newfoundland Liberal convention recently that in its nego- tiations with Ottawa the delegation from New- foundland had gained more from union than had Prince Edward Island, despite the older Pro- vince's repeated commissions to Ottawa. "He hinted," says the report, "that on the basis of what Newfoundland had received, he might ask for more for P. E. I. at the next Dominion-Pro- vincial conference." ‘

This is a good point to press home at Ot- iowa. lt is also a good answer to those who may be disposed to argue in the present Fed- eral election campaign that the Dominion Gov- ernment treated this Province "generously" in its tax agreement terms. That has been said frequently by Liberal spokesmen in the Legisla- ture; but Premier Jones knows better, especially since his visit to Newfoundland, after nearing other speakers describe the lavish treatment of Ottawa toward our new sister Province which was the theme of many complimentary remarks at the Liberal convention.

./ EDITORIAL NUI rs /,

The battle of the ballots is now on.

Great War l‘l in Europe ended this date 5.

"Liberals in a ‘hui-ry," and "Socialists in Low Gear," are one and the some; "Fellow Tra- vellers" as the Communists would descrire them.

U I U

The Musical Festival is away for another

year, leaving very pleasant memories of some-

thing attempted, something successfully done to the credit of all concerned. i I i

Progressive Conservative Leader George Drew having fired the first big gun of the elec- tion campaign here, Messrs. St. Laurent and Caldwell have an impressive mark to aim at.

There appears to be something wrong in C.P.'s itinerary forecasts. Though both Col. Drew's and Mr. Coldwell's organizations an- nounced the opening of their campaigns here scan-t attention to this tact was given by C.P.

U I ¥

The Junior Chamber of Commerce of Ca- nada has come up with a "gastronomic" map of Canada to lure the dollar spending tourist. Prince Edward Island is represented by Clam Chowder, Atlantic Style. That should certainly lure home at Ieastlslanders abroad.

The proposed development of the Brighton area discussed by the City Council last week must give some encouragement to the advocates of planned expansion. All too often it has been a case of individuals building first where they pleased and then expecting the city to supply the necessary services. _ *

The timing of the announcement by the Fisheries Prices Support Board that it would not buy this season's pack is to soy the least astonishing. To announce on the eve of a gen- eral election that o large body of voters is to be cast adrift financially is a political error that Mr. MacKenzie King would never have been guilty of. i i i

President Truman of U.S.A. born this date 1884. Began life as a dry-goods store-keeper, entered politics, then entered the army in World War I. Was elected to the Senate, then Vice-President in F. D. Roosevelt's govern- ment. Onthe death of the latter he automatical- ly become President and was returned iii a Democratic landslide for a second term in No-

vember last. i Q I

Recent tests made of the use of insecti- cides in keeping down ravages of insect pests on the total production bf a crop showed that soil Tnharbiting pests do far ma-re damage thaii for- merly believed. Ten years ago the bureau of entomology and plant quarantine of the U. S. Department of Agriculture estimated lossesrcaus- ed by some 60 or more important insects at about $1,500, millions annually. As the result cf new studies these losses are now placed at $4,000 mil- lions. "-

Mr. L/eo P. Mcisaac's transfer from the Pro- vincial Department of Agriculture to the Fed- eration of Agriculture, leaves the Department without a rained agriculturist to assist Profes- sor Walter Shaw in administration. lt was ex- pected that Mr. Creed, who graduates from Macdonald College this month would have been available, but Nova Scotio Department has of- fered him $750. per year more than our Pro- vincial Government was prepared to foot the bill for. Mr. Mclsaac is an exceptionally able official and the Federation is fortunate in ob- taining his services. . .

Guest of honour at a directors’ meeting of the Canadian Press in Toronto last week was Mr. Walter Thompson, public relations chief of rthe Canadian National Railways, who has com- pleted thirty-five years of service for the line. Mr. Thompson is known by newspaper” men across Canada for his competency and courtesy, and his long record in a post requiring all the tact of an ambassador and the ability of a first- class executive has been outstanding. May his by 'no means attentuated shadow never grow less. . . .

- ~ Premier Jones was certainly correct in tell- ing the Newfoundland Liberal Convention that their Province is being heated much more gen- erously by Ottawa than lias Prince Edward ls- iand. in the current fiscal year Federal expon- dltures in Newfoundland will exceed $559M,- , and revenues will not whittle down that "sinn recidrly. In ‘the first l2 years of union, lode transitional grants will total more than

,MO. The federal authority, too, has os-

mmgmiirfrw

“Lfi slmoil $3.0M” of Newfoundlandfi $72,@,-

coo pore an.

THE _GUARD1AN,_CHARLQTTETQYVN

its-fie...

Beneath the brittle frulted trees He takes his everlasting cue

A; old men do on sunny days

In lazy shadows at orosswa, . The porcelain branches never lack Dark leaves to shade his topping

back

Where the blue robe falls into wrinkles

Deeper than the sepia crinkles

Arbour the jawsthe angled eyes. Half-closed to savor the surprise Of fitfui little wknd; that blow From our. a century ego. His comfortable brown

COG! I10

spread In the brown duet. Pram over- heed

A brunch has put. within his reach Forever one immortal peach.

For hi4 indifferent fingertips

To raise to his lmmortll lips. . .

-Yel.zu. Gillespie in the New York

Old Charlottetown g (an r. a. l)

*

FREE TRADE WITH NJ.

In the House of Assembly, April 15. 1848. the following motion was adopted on the mating vote of Mir. Speaker, the ember- belng divided equally, 10-10, on the question: "Resolved, That all articles, the growth, produce or manufacture of the Province of New Brunswick, shall be allowed to be imported duty free into this Island provided that Province shell allow articles the growth, produce or manufac- ture of this Island, to be import- ed free of duty lrito the said Prov- ince of New Brunswick-spirituous liquors excepted."

"The Head Office Of A Bank"

(Monthly Review of the Bunk of Nova Scotio)

To most. Canadians “the bank" is the particular brunch bank with which hey deal whether it is a large ci branch or a small branch in n country town. It is the bran- ches of the chartered banks which accept the deposits, make the loans and provide ‘the other banking ser- vices for the public. But. as the cur- rent Monthly Review of the Bank of Nova Scotla points out. there is much more to a Canadian bank than is apparent to the customer at the brnnch- counter.

The Review deals with the activi- ties of the head offices and gives some idea of how the system and machinery behind the branch bank works. Among other things, Head Office pools the money deposited by the public in the branches irr order that it may be used to beat advantage andto ensure that there can be no such thing u a local shortage of lending funds. "Cuna- dians are no used to,thelr branch banking system that they seldom stop to think that the branch bnnk with which they deal is not‘ limited by local resources in its capacity to lend money nor is its position seriously affected by local misfor- tunes and dlffiriuities."

O O

Bank deposits are in total of course much iii excess of bunk loans and it is the task of Henri Office to invest this iurge surplus so es to maintain n balanced and sound structure of assets. Rome of the depositors‘ money line to he kept in the form of cash to meet day-to-day withdrawals. Over long years of experience the banks have found that if they keep around 10 per cent of their deposits in the form of cash and deposits with the Bank of Canada, they will linvc ample immediate resources to meet ihc public’: demands in good times and bad. Some of the deposits go into highly liquid assets, such as Treasury bills, nnd large amounts arc invested in comparatively short- term Government securities.

The cash and investment position of encii bank is scrutinized con- tinuously. Every day an estimate of the cash position and of the ratio of cash lo deposits is made. Once. ri week a more precise calculation is mndo, based on fuller returns from the branches, and once n month n complete return is com- piled. Guided by these dny-to-dny arid week-to-weelr estimates, which are remarkably close to the fnct, and armed with n thorough know- ledge of forthcoming redemption: of securities, repayments of loans. and expected new loans and secur- ity offerings, the Heed Office man- agement is constantly making the decisions required to maintain the cash position and to put surplus funds to work.

The Review devotes particular attention to the thorough system of internal inspection end to the two independent outside inspections which are a basic protection to de- positors. "There ie certainly no other business where more care is taken and few, if eny, which are subject to an equal degree of scrut- iny. Yet there are very good reasons why this should be so, for the benke hold the buik'of "the cosh resources o! the country end the public has a maJor interest in their strength spa ‘soizenoyi’

"r

Much of the work‘ of vlleall O!- fico is concerned with the supervis- ion at loam. pending money well.

~ which the Review describes es the

highest qualification of a banker, cells for a wide knowledge of busi- noes and business ', ‘_' . for-the capacity to see the essential points in the position of the bfifliWflyllftfl above ail for the ebtlity to fudge character. It is the aim of the area- lt departments" of the beaks to achieve eo-orairietee and balanced lending policies end to promote and develop the capacity to in! money effectively on the pert of the men irr the front agar.

loans withautprior apprbval varies with his breech. his experience, and

'thr~ foresight to establish branches

the locality where the business l:

tins-unimportant:- ‘ The meneeerfsalecetionsomelli >

ADDRESS,

sliihrtfiéfltfiii‘... - ween i~SAY "we ’

. Ar Presser

7?

- "Notes By

Possibly there may bo many pom pie who cannot understand why the discovery of crude oil end the prov- ing of an eetimated_600,000,0ti0 bar- rels of all reserves in the new oil fields of Alberta has created the necessity and the urgency for con- struction of e pipe line to transport the oli. The primary-reason can. not all be attributed to high rail- way freight rates, though that. is a big factor. The actual reason is that the discovery of the vast oil reservoirs of the Leduc and Red- water fields has brought about revolutionary changes in the oli industry in Canada, end in "effect revolutionary changes are already in progress iri the entire economy of the West. —— Moose Jaw Times- Herald.

If the hopes of a loader of the Victorian Order of Nurses are reel- ized, Winnipeg fathers should soon be in n position to get some expert advice on the approved methods of diaper folding and formula making. The Order is already providing such a course of instruction to fath- ero-to-be at Saskatoon end from ell ICCOUIILI it in going qver well, y“ addition to receiving instruction in 58b? care. the men are also given pointers lri care of the mother. EV!" IIOW. merry new fathers man- age to become reasonably profici- ent at the lrt of tending to the wants of a new baby and giving the mother a chance at some much-

the type of loan. Though ‘

do arise when a manager has to act quickly on a loan application which would normally be beyond his discretion, there is usually suf- ficient time to consider the credit thoroughly and when necessary ta submit the proposal to the regional office or Heed Office. Many buli- nessen operate on a line of credit which permits them to druw iip to e specified limit as they need the funds, and in such cases their credit needs are reviewed periodi-l caily by the manager and by the! xegllonal or Head Office credit offl-i c n s.

All of the banks which operate‘, across the country maintain region- al credit offices in addition to their Head Office credit departments. This he: the advantage of decen- trniizlng the task of credit review and guidance and of assuring closer‘ contact with Jeglonnl needs and! interests. Above n defined leveL. the regional office submits credit , applications to Head Office wherel they may be presented for decision at the daily credit meeting of ihel top officials. i The system of credit supervision is designed to use the full experi- ence of the bnrik in lending money and to bring to bear on u particular loan the general information which is relevant to making it. The seri- ior officials of the credit depart- ment, most of whom have had ion<z experience in lending money, have the greet. advantage of being abir: to appraise conditions in a par- tlcuinr industry or area both. froml the loan applications and reports‘ which came before them, arid from the general information contained in business reports from the brim- ches and from government and in- dustrial sources. Moreover, tlie sen. for credit officers and the general‘ management are continuously foi- lowing general business and mar- ket developments not only in Can- ada but in the United States and overseas. It is their Job to, keep perspective and to exercise a broad , guidance over the lending policy of the bank. , O O I I

Not the least of the activities of Head Office is that of planning l)l0ld. The ability of the banks to grow, to lend money, and to mnlri- tnln their competitive position wltli other banks and others credit and deposit institutions depends on their ability to attract deposits. Deposits go to the bank which of- fers the mast convenient arid the bent service. to the bank which has

or toenlnrge existing facilities in

developing. So, too, with loans. Thus a bank does not wait unlii tin: business is there to establish a new} branch. In growing areas new brnn- ‘ cheii often go in with the flrritl stores. They seldom pay their wny

for a few years but. if Head 0f-

fice'| Judgment is right, they soon- , er or inter become n sustaining part. of the organization. Competition is r the driving force. '

‘J. P. ilacfiierson 8r Son

is’: the‘ rm That Counts

IQ‘ Custom Built and