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Envisages Expansion in Many Lines of Business — Urges Keeping Costs Down” to Mitigate Deflation Process Later

bearing on Canada, Huutly R. Drummond, president of the Bank of i at the 122ml annual meeting of shareholders yesterday, voiced in the imeritial unity of the Canadian people and confidence in

Tins CHARLOTTETOWN _ GUARDIAN .

llluntly lirummcnd Sees Canada United, Strong in Emergency

122ml ANNUAL MEETING

of the present world situation in its

that might lie ahead.

million but more particularly to the Prarie Province, where. in contrast to recent years, the wheat crop is unsusually lar e and of uh- usually high quality. us, Canada has very large supplies of the food products which the Allied and ileu- iral nations will need and the buy- ing power of the agricultural com- munity from their sale will help the general business of the coun- try. In addition to this, with the impact of war conditions, we have nlaliy industries which will hone. fit directly from orders for war SPPPUEE, 8nd We have the prospec- tively important development of Canada as the aviation training centre of the British Empire.

"It will thus be seen that on the material side Canada may expect to be better qualified than most countries to meet the inevitable consequences o.’ war, and an added consideration in this respect is the foresight and sagacity of England in providing for the continued

lars for British expenditure here in war supplies.

“Great Britain has drastically in- creased taxavto provide for war needs and. with normal income tax. becoming effective in May next, of 37 1-2 per cent on all incomes over

I-IUNTLY R. DRUMMOND

£285, everyone there is sharing the burden. It is high time that. Can- ada should follow this txample. True. we have add-ed a surtrix of 20 per cent to our income tax. bu: the vast bulk of the incc-me of Can- adians is still only lightly taxed. An extension of the income tax.

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9 5-8

5 1-8 38 1'1

7 8-4 l7 7-8 16 28

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3?: BANK or MONTREALS 28 3-4 47 3-4 21 1-2 21 40 3-4 i3 2'2 ,1 M While emphasizing the gravity l0 7-8 l0 7 7-8 i?» i-gi ‘hflr ability w weather" the storms 45 1.? we SW10 i1 united country in 1a m“ waifilmrt. declared Ml". Drum- 25 b2 mond. It remains for us to bring 7 14 ‘he full BT-Yeflflt-h of a united Cali- 8 14 ‘ ada to the work of prosecuting the 30 b2 Wat’ to a successful conclusion 36 34 i While at the slime time keeping oili 71 ‘fit-airs so in hand that we may en- n ,ter the readjusiliients of post-war l7 |00lll1lE10lls _8s free 0i inflation as 25 Hipossible. with debts at the milli- 5 3-4 glnilrhgkrgtéssibie and with morale un- gg "I am confident that just as we 2 3_8 have entered as a unified Canada

lgihtouthe fiery ordeabof war, s10 we

a emerge, aria lOIIOllE.‘ at lear‘.

but more mature in thought arid as-

Eléirit? 5?“§‘i.’°r“i’u§l°"€‘“ "S “

r i ornmon-

wealtli of Nations to the great des-

tiny which undoubtedly awaits this country." .

Close DAt the gutsctdof his adairesfj), lvllr.

rum-men ma e re erencc tie

42 late Sir Charles Gordon, who. until

92 his death last July, had held the

l2 presidency of the Bank of Montreal

21.7 for twelve years. Many of those

8 years. said the new pres1deilt.wcre l9 fraught with new nild perplexing .23 problems, but through them. he c-b-

109 served, "Sir Charles exercised his 12 b2 tigkilljigtlingstilnflltngnce ‘inn the affairs of 1014 n vii wisdom and

8 b2 courage and he left the Bank 11 stronger andsafcr than at uuv 49 b2 tiwalénilibstlliltzmtlgixilk repected him

qgl) ability; \\'c loved him for 215 c , and his example remains 35 as an inspiration to us all, r craze“ u. e vacan. w my en ea- ”? 1_2 your. assured of the support of a 16 loyal and devoted staff. to continue 8B those policies which he so careful- 23 lv follow-ed and to maintain the 175 high traditions oi the Bank of 49 M Montreal. 26 BANICS FINANCIAL POSITION

3 NEVER STRONGER 2g 34 In referring to the Bank's finan- 5 7,3 ciai condition, the president ob-

325 served. “It has always been the a . _

‘*1 8311f’ Qhviiiiraiti‘ ‘Soitfifl “i? ‘a counts. and I can say with full con-

5 éidence that the aifiairs obi your 53 arr were never in a sronger 15 position. _

22 gEleren years 0E0d—ll'lf1928 — w en Sir Charles Gol" on lrst pre-

l; 1.3 sided at an annual meeting of the 49 Bank, we had total loans of $40,- 31-; 000.000. In 1938 there vv'ei'eth$25&- 135 000,000. In thfi same period e - _ vestments of the Bank had risen

1i 2.1 from $110,000,000 to $440,000,000. 24,5 This change from a preponderance

7 of loans to a preponderance of 321-4 investments coincides ~ with the 31 3-4 growth of spending by govern- 32 merits which has been facilitated 45 1.2 by cheap money policies universal- 3 lv adopted by all central govern- 13 merits. As a resilltbof this tendency,

215 ‘the earnings of anks became so 35 reduced that the banks had to re- 36 dues dividends and later were 127 1-2 forced to cdut in half the interest 700 paid to epositors on savings.

13 1-2 Thus, wlitile governlnienis ligvgtbceil '75 enabled. o incur icavier e s at 300 lower interest cost, it is largely 4,25 at thteo expense of depositors and 233 nves rs.

441-4 “Sometimes we hear criticism of a5 aankilrgeg prdfitsmngt dtlifrlibil so? to 66 es ofour suonsuyou 128 cantesiect from ‘fillet statement pt-e- 56 sen o ou ia on average o- 125 tal assets ythrough our fiscal year 80 of $90I,0tl0,000, the earnin s oftltlhe

8 Bank were $3,462,000. n 0 er 26 1-2 words. on each $100 of assets the 78 1-2 earnings were but 3B cents.

4 1-8 “Tumingthto the tbuslifiss goodi- 86 ons of e couirry, . rurn- 155 mond said that up to the end of 110 August business activity hail beer. 23 1-2 following a course similar to. but 29 somewhat in advance of, that 0i 20g 1-2 19388-108 l h iiati ' h b

“ r ear es on,’ e o -

3 served, "an yencouraging advance 35 appeared in the spring. followed by 190 a ividcnintg improvement during 435 the summer monéllls. As a geucrnl 229 indication of the esree oi lIllpl‘0V(’- 190 .ment over last year, our exports 130 Ifor the first eight months of the 209 year exceeded the corresponding 34 i938 figures by the substantial ll margin of 10 per cent; and indus- 119 trial employment was approaching

9 the post-diepresslon peak levels 40 mad-my m i937. True, problems I20 connected with public finance, nig- 120 m-avawd by a longperiod ofre‘. cf 350 expenditure, were perplexing tn an 7° unexamplcd degree. but. notwith- 39 standing this, I am convinced that 5 hart the situation in Europe coil-

5 34 tinucd to justify the hopes aroused 1'15 tat Munich. recovery in Cnllacin

5 14 would have prccccdcd continuously.

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Q 553 Esasésseséaagz _

6 1-2

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N. Y. Stock Montrea loc __._ (Canadian ht) luck] Clans “an (Canadian hell Am c and 9‘ 33 B u T, Am Gas El 2 1-8 35M“; m '1' 31%“ 10g i? BHWK n Am e1 -‘ Am Water u 3-4 3,0 POW" a ‘m F” P‘ 2 1'8 Cad‘ Oememt Anaconda 3i 5-9 11 n

Aichison as a-s C“ °r

Bait Ohio s g9“ g" 1%

Baldwin Loco 1'1 3-8 ca“ l"

an Ind Al A 3.8021119)? as i a C" P“ a v .

Beth Steel 32 1.2 Can Biielmfllip

ch“ °m° ' c Msaih lt

Chrysler 37 3-4 Dfitfs e

Con Oil 23 3-0 D 5°81 PM

Comnlollwea i 3-8 om B‘)? e

C011 EdLsoli 30 1-8 g?“ Sig“

Curt Wright A — Dom {wan

Elcc AutdLite 3a 1-4 D "A °

he 3.1-; his: c.

Geri]: rbegds 4e a-a mime“

Gen Motors 53 7-8 Han} midi"

GGMiflCll 20 1-8 Ho“ $33“

Goodfvcar Tire 7-8 ERPNHKWI

33.15.35 ilk. Ca: '- ggk Pgyoggi

Int Tel Tel a 3-8 M e H L‘

Knlncczlit 3B 7-8 3559f,’ REIT?‘

Mont Ward 54 a-a M¢C° °"

N Y Cvllxt m 1g 745 Mil POW?!‘

Nct Am Co 22 5-3 N“ B"? c

lvh Pacific a s-a "at 5f,“ i"

psiillhiOliilb 1 7-9 Niiligécam

Penn R R 22 3-4 Que . W"

t on. 39 H; Shaivlnigan Phil M is L , c m Pa: a 58 it ure i o - ‘

Radio Corp 6 5' ca“,

burs Roe Co 80 WP? Es“ Sid Oil J '

S‘i_‘(le C01‘) 9 3-4

Texas Corp 45 United Air 4g g-g _ 4 7:3 (Canadian Press) U21 ':i Gus Imp SEIOKIEONTO. Des- 6- U s R" bb" - c

U S St} C(ol 69 Aiderniiic

u <5 Ind Al 22 3-4 Amm Gold Vriiladium a4 l-z Ana Con Warner- Bros 3 7-8 Arntfleid West Union 26 l-E A0110?

West Elix- lll 3-4 Bagainac Woolivonli -— Bhiliififld

lgease ‘Metal att e i Montreal Curb Mi- Bobjo Bralorne -—-— Broiilan (Canadian Pres!) Brotvn Oil

Stocks (‘Ion Buff Arik Abitibi Com Cal Ednl Abitibl Pld 3-8 Calmont Asbestos 25 3-4 Cdh Mal B A Oil — Cent Pat Beauharnois 6 Cent- Pore Bathurst A i4 1-2 Chem Res Can Vlckcrs '7 1-2 Chester Dom Tar 6 1-4 Comwea-lth Don A l0 Coniarum Fraser 19 Con Smel Fraser V T O 20 7-8 Davies Ford A - Denison

Imp Oil I6 Dome Oil

Int Pete 23 5-8 Duquesne Price Com 20 1-8 East Crest Price Pfd 68 East Mal

Eldlggado Fa n Francoeur New York Curb oily-gy- Go e Golgalé 1 —--— G0. age - (Canadian Press) Gold Gil-tie Stocks Close Giandoro Am cyan B sl a-a Gunner 0°14 Am Gas Else s’! 5-8 I-Ialcrow Am Super Power 3-8 Hard Rock Brown Co Pfd 26 3-4 l-Iarker Cities Service 4 7-8 i-IolllriZf-‘l’ El Bond shire a LHome 011 Gulf Oil Corp 30 3-4 Home-Vi Humble Oil 83 1-4 HOW?!’ Lockheed Air 31 1-2 Hud B83’ M!!! Ni!!! i-lud a a-4 inspire Pant Oil 5 IInt hiokel iii act) a Jellicoe - GRAIN is" Kirk I-Iud Kirk Lake .___._ Lake Shore CHICAGO. Dec. 6——(AP)—The IL-‘figqggd

‘wheat. pit had to absorb heavy Latch profit-taking today as all futures Lime L L, climbed to new seasonal highs and Macassa

reached the best prices in about MucI-cod two years. wggo

Wheat cilised ls-a-l s-4 higher, Mgmty"

‘Dec 07 1-2-3-8, May 9a e-a-a-al; Mcxeme

Corli l-B lower to 1-2 higher, Dec Mcwaigcrs 54 5-8-43-4, May 55 1-2; Oats iin- Min Corp changed to 3-8 higher. Moneta _

WINNIPEG Dec, 6—(CP)—Mix- lxil/Itlfihb K14‘

ed tmdirig shunted wheat fixtures Ng-mda prices along an irregular path on Norgold Winnipeg grain exchange today Nonneiai

Quotations were up nearly a cent OBrien

at one stage but profit-taking Okalta

crept in to leave them 1-2-3-8 Omeglg, w

cent higher. Dec at 79 1-2. May 33 ggamf‘

3-4-7-8. Jly B5—85 1-8 cents. . Pam“,

-_ - --- - -- - ---------- Partaneéi Paymas er Perron Gold Pick CIOW i Pioneer a. Powell-l Pram er Preston For common gtoyzxlliatg Udtllilry ‘sort Bu“ Ant "°° Sand Rim‘ senator Stilt?’ e Sigma siscoe Sladen Slagepebakd S Steep R0 straw Lake sturgeon Sud Basin Sullivan D o Y Bylviinlte Teck H0811 Texas Corp Need Money 50pm“ c Upper Ca-n u i! $50 $500 " k200i... Wcstflank Wood Cad W I nd mono to pa oi; hills, to ypurehas: w“ HM“ 'ri§§§?ri"$'-'¢§'i'ihiim§r"i§' UNLISTED any useful purpose Km, Town No embarrassing ques- Mandy ‘tilons to borrower or en- fiitxigmgc orsers. GENERAL FINANCE EASTERN LIMITED Bank; Phillip’! Building Grafton Street ___._.. Charlottetown. P, II. I- (camellia Pull Look for Confidential Loan Rfmln Sign Canada Ulfiee noun ace-ea fgmgfi" Saturday 9.00-6.00 my“ i _ fiVl i

With the outbreak cf war, we were. of course. immediately confronted with a completely altered situa- tion." ’ CANADA WELL PREPARED FOR WAR EFFORT

The circumstances which led to the outbreak of war, and to Can- ada's inevitable participation, call for no comment. for they are pres- ent in everirbodys mind, the presi- dent observed. "But." he cou- tinued, “it is relevant to a TCVIPW of our business to point out that War clouds had been gathering for so long and so obviously that. we were not unprepared for the shock when it came. Tiler-e was no repeti- tiOn of the financial crisis of i914. There was even a certain business stimulus in the prospect of in- creased demand for our products, magnified somewhat by the rela- tivey low level of forward com- mitmeiits which exist/rd in many sections of business owing to pre- vious uncertainty."

Of outstanding importance at tliLq juncture, lic said, was the fact ‘that Canada entered u n the war

period with one of t e best all- round crops in the history of the country. "This," he stated. "applies ts practically new pert of the Do-

Importance of Regarding Government Controls as Temporary Expedicnts

Touching upon the various govcrilincnial regiraiions llfipilstd on IZZIUJ slid finance since the outbreak of rm; mend, Balhk of Montreal president, told shareholders ye» these restrictions should be regarded n5 tillilpflfafy expedielits and not in any sense as being of permanent character".

“As a contribution to the maintenance of business on standard- ized levcls." said Mr. Drummond, “it is interesting to note the great, measure of controlwhich the Canadian Government has assumed for the better stabilizing of supply and prices and, therefore, for the more efficient prosecution of the war. clude IJITJVISIOII’ for a regulation of prices and distribution, for the regulation of imports and exports. and. through a Foreign Ex- change Control Board. for a form of control by which withdrawal of oigiéltahlfrotn thin lgomiriionl isflforbidden. h

115 08s n5 u 1011s. nc u our banks. ave co-o rate

the fullest extent in these measutizgs. De d w R0 0n 1960!?! here to the effect that these controls are a restricting influence in business and that forbidding the with drawai of capitnl from Caniadia. undoubtedly has discouraged the int/crest in this (‘hunt-Ty oi citizens of other lands who. having invested their money in Canada, now find themselves unable to withdraw it.

In any C086. it is important that all the control regulations Ehflhld be reftflflled as a temporary expedienbto meet an extra- ordinary situation. and that they Should be abolished at the earliest possible moment Otherwise. We shall find ourselves saddled with a self-perpetuating autocratic bureaucracy contrary to the true basis 0f democracy for which we are now fighting. The Romans had the Til-m ideh 1Y1 U115 respect-in a. time of war thev called Cincinnatus front the plough to be their dictator and after the enemy had been glgeffig-grdn the dictatorship was at once abolishodl and lie returned to

rday that

These mts-asures in-

It is only meet. however, to

supiiy o! many commodities at normal prices.

"If Canada's role in the war is to be largely as a source of supply to Great Britain, then we should see to it that there shall be no ex- cessive profits. Our aim should be a. fair price for wheat and other .l pzoducts and a fair price for manufactures in which the Govern- ment will have the full support of business and labour, to prevent a vicious spiral such as that in which the cost of living and wage rates endlessly pursued each other in the last war.

"By keeping costs down asmuch as is possible, we will keep domes- tic trade moving and, after the war, this policy will mitigate the pain- ful process of deflating prices and ivages which is the inevitable sc- quciice of an undue rise."

In referring io conditions in Great Britain B/nd France, the presi- dent, commented. "It is generally felt that the first months of the war have been satisfactory for the

lies. Britain's war services, her financial machinery, and the unity of her peoples at home and abroad are all felt to be vastly superior to what they were iii 1914, and the country looks forward with deter- mination, calmness and confi- deuce."

Mr. Drumimond felt that the wide- spread indications of the deep sym- pathy of the majority of the people of thc United States with the al- lied cause had been particularly" heartening to the people of Great Britain and France, and "not less so to Canadians.” -

"As elsewhere." he observed, “business in the United States has been continually under the shadow of the European situation, but des- pite the recurrent crises abroad. a forward movement occurred during the summer. with marked accelera- tion in certain lines following the outbreak of war, Thereupon there were sharp advances in prices of almost nll commodities. but bllsi- ncss leaders have shown them- wlves keenly alive to the dangers of speculative commitments and ru- nid advances in the price level and following the initial upswingmorc

stabilizing influences have pre- vfillcd." "PAY AS YOU GO" IN PUBLIC

FINANCE

In discussing the tax situation. ihe president said, “Taxation, fol- lowing public debts-Dominion and Provincial -— today seven billion dollars, ten years ago four and onc- half billion dollars has been steadily mountfn-z for many lfehY-i- and with the heavy expense of war a further increase in thc Dominion field seems inevitable. With theex- PAIISiOII of business and of our fav- curable balance of trade which may be expected as a result of war- time demand for our natural re- sources and manufactured prod- ucts, Quf pollcge, as far as practi- cable, should to pay as W! 80 and, as far as we can. to rdDM-Ylhifl Canadian indebtedness abroad. The Government has already taken the hm; step wwam this latter desir- able object by arranging t0 revolt a sterling loan out of funds ad- vanced in London by the British Government to whom in turn our

()0 metfes dvnced an a“ Wm "their-Zu- dol-

even at a mucll lu\v~el' rate than that in Great Britain, would pro- duce many millions in Canada and be a barrier against the ‘inflation inherent iii a policy of borrowing.

“But it is in reducing expendi- ture iii noli-eseniinls that oilr Government can give a lead p, Canadians. Sectional needs should no longer be given first place, nor should our rarway problem. with its cost to the country of a hundred million dollars per aiinuim, be left unsolved."

In his concluding remarks. and Queen, the Crown to many of us. was Just a word the true sig- nificance bf which was little rea- lv..*<i_ When, however. we saw this perfectly human and charming royal couple and heard them speak Drummond said that a period of trial such as that upon which the country had IlOW (‘lllf .:l must prove either a time of tilstiilegra- Lion or of the strengthening of the moral fibre of a nation.

JACKSON DODDS

“In ihc last your." he oil-sewed- "Cnnadn may be said to have found itself nnrl to have reached matur- itv its b, nation. Since then wc have experienced many vicissitudes. in the midst o which we have nt limes leaned toward sectional in- tclests. forgetting the national good. The tide in this direction has now tunied and we face the word a more united nation than ever.

“Two events. in my mind closely connected. haw/e served to empha- size the things that unite us. One i5 the visit of our beloved Kfnfl "nil Queen and the other is the 5PM’- of broad Ciinadianism to which our French-speaking compatriots have given such notable expression. Pie- vlous to the cornin of our King to us in our own anguagc. WM‘- ther that be English or French.

Showing an increase of nearly

a record not only in the annals of the history of Canadian banking as

Mr. Dodds pointed out that for the first time in the history of the bank the items in the balance sheet this War amounted to over a thous- and million uollars. BCSICQS the T600111 figure Cf $025,000,000 in us- seis. the statement which he pre- sented showcd deposits by the pub- lic totaallnig $914,000,000, which uisu constituted a record.

Ill referring to the profits for the year which. amounting to $3.- 452000. had shown a moderate in- crease oi $64,009. the general man- ager commented on the taxes paid by the bank. Those paid to the Dominion and to the Provinces. lie said, totalled $1,198,000, and were equal to over 4i per cent of the dividend paid to the bank's share- holders. Iie pointed out that, in addition. the 0'13 branches of the institution paid municipal taxes amounting to a substantial sum.