, revolving some 011,000,000 less m‘ hey did when

, taxes , citizsn

glliction in Savings Bonk inmost. Ljthasc ;. Rquiremen ts. u, AGRICULTURE

‘that

v

DEg-mivinvn v, was " _ "f...

,{|r- CANADA WILLFBEALANCE HER B

uiEET

COUNTRY NEED BE‘ SECOND TO NO OTHER . COUNTRY IN PROGRESS AND WELL BEING

BANK 0F MONTREAL-‘ANNUAL MEETING

. i" CW1“ Gordon, President, deals with major problems“ that must be wit-ed in Canada before connLy canmalo

progress. Supplies

mwmung data showing enormom ooatsiocoontry. of national

_ -- system. Must he end digpllolflflll of service - Points .. o

tnuiaher-egueeeii-areeei-n

greatest uni-cow“-

1mm Dodfll. Joint General runner, mun Bank during put year —~Pointa out change _ Canada- Inshis thatburden of taxation has grown

tion of Bank of

to ~ competition and cot that handling. of " Government matter of the

n

made throlllll iii-unr-

“, s, point where it consumes 215111 and enter-

prise mid d1. r ment in buslnem hak taken place. .

fi-

am Ann General met- m3“; 1th, Bankutilf Monti-en was

ious handicap asiormerly. The ap, which on the basis of 1936 prees

1,010, in the Board Boom at the ‘was as at as 669611 the Bank's Headquarters. worst -of de on, in 10 , has On the motion of Mr. H. R. been reduced 12% or there-

d. Sir Charles Gordon ETETET?” requested to take the

aboutsrthst is to sa , the agricul- turistis still at a 1 % disadvant-

chair. . age when compared with his posi- sh- Charles Gordon, ‘ President, tion in 1026 but is vervmuch bet- in addressing the shareholders, ter off than he wastwo years ago. said in Part: He inlay-ting more for his products run PRESIDINTS Annnsss Ind '90" - WW Ind Gentlemen -You have before Ibllitv meet hi? ovglhead ax- ’ nses roport one s. r.

1'0" ‘he “m” °t u” Dutch“ o‘ peAs the ygar 1082 wzs grinade

~ B k. to ther with the - filly stlltem l? and statemengelbl the profit an dioss account for the £1531; ear ending October 81st. I trust at the results of the year's

ordinary con banking business in Canada during the past year. The roiits for the yea: have proved s ficient to pro- vide for payment’ of dividends on the reduced scale which has pre- veiled for some time past, but the margin has been a smell one. The earnings of your Bank are now feeling the effect of the transfer to the Bank oi Canada of iurictiims which our commercial banks for- merly exercised and they also are being influenced b the ower rate of interest obtains le upon invest- ment in high-grade securities in which yfzur BankLivias had to em- ploy an noted-sin! larger repor- tion of its assets owin to l: of b demand ior commcrcla loans. 'I'his latter consideration has resulted in our piesentl ,, to you a balance sheet of unusual strength in which there is maintained, in rhaps {renter degree than we woud have iked, the traditional] strong liquid position of your Ban‘- TRADE AND INDUSTRY

The year under review was not marked by events oi high import- ance in the realm of commerce at home or abroad. Pr ss In trade recovery in Canada continued but in less definite degree than in 1064 and in a, general way it can be said that the gains oi that period were consolidated, in some 1n- stances enlarged.

FOREIGN TRADE

meznorable bythe moire Agrewaents, so 1086 is‘ si slized

b a

Uynited States. It'weli may be that an assurance oi tariff stability in the commerce of the two countries

during the least advantage Certain‘ ‘

terocurse with all much to be desired always provid- ed the intercourse rests on fair and mutually advant as I dis

for the most pert h . tatingiy upward, . although

mo mon n cu ths. U d bted til been a noticeable imyprovemnt in usinem since the decision adverse l0 the N-RA. was rendered tl some

some of the unde the economic situat Will you pardon me if I refer to the fact that we had a ection on October 14th? That elec- tion, as you know, was the occasion

'I‘radc

ade agreement wi the

this period will prove not to be derived. commercial in-

oountries is

us terms, posed _to- lieve does recently concluded t e United States. In the Unitedltatos the trend during the past year as been hetsri- e vement would seemtohsve ath- decided momentum in rgcent has sen

nt, particularly-

Court in May last Never- helem, an unusually otracted session of Ccngressand advent

of much new leglllslation. the merits of which t in disp served to retard somewhat c ete -return whlc cial

are s ute, have that of confidence

would have been so benefi- w- business recovery.

ECONOMIC SITUATION IN , . OANADA Now, gentlemen, let us look at rlyiug factors in on in Canada.

general el-

The forei n trade oi Canada. has §§ ‘nib. c \ gggloztglfrperxprusla} made a stri g recovery from the We” puty and” m“, mdhndun

low point reached in March, i033. In the twelve months to October 31st nst this commerce had a 11358000000 compared ivjrfr $903,000,000 in the corres- pcllfliiig period of 1933, an increase of $355,000,000 in the short space

Its results have a profound bearl on our economic problems, and may say at once, thatJhe general reaction, both in this country and abroad h

most favourable.

quite frankly, . as been The reasons for this favourable

I i ‘ . . Hr-‘Pgrs lirasv the subject of gfy"§nuf,"mlf°¥uf°“nd°fl-°mfglj dml-‘siic "W- m!" “milled tioned that one of tmmbiead in w ‘~35’ ma" Wm“ buku“ h“ influences at that time was ythg P-“md 3°!“ Frag? m gmw" “L” fact that thislcountr had not un- Iflir O E 50 5 0

111g 11:11 distrilirbing litical nd- ‘m ‘my m“ ‘°°"'1 °’ °°'

cncies, and the use w ich it will be

however pub- abic to make oi future opportun- no opinion h“ been n‘ ' m” itiss will depend very largely upon mbedjy m, ‘dvmcy ofuflmmy

its freedom from bureaucratic in- ierference and wholly unnecessary restrictions. I hold no brief for those who m eng o in unethi- cal commercla practoes and have no inclination to deiend them, but

such measures . b and

1118B

cliques actions, an undou dlythe

f ogress of oin- recove - Er ed by this develop-ymenvtiultdxfvt fcrtunatel propagen a, iii-whatever form it

for Canada, socialist

they cannot represent more than agptgnd’ w" ‘many repudiated e

a fractional minority and it would a be a grave injustice if Canadian Jslncss as a whole which has earned a. high reputation over a long period o years, should be ceri- uiized for the offences oi a few. INTEREST RATES AND TAXATION.

During recent months we have hoard a good deal about ca. ltalists and capitalism, and capitalgm has been subject to a great deal oi criticism. I have alwa s been at a less to know Just wha a capitalist is, To my mind, any person who lms been wise enough to save a iiiiic mone to tide him over a icrlod of ilibess or emergency must

reckoned as a. capitalist, as for theiime being he must live on his capital. I do not think we want to

and I was sorr to see on bank de its cut from three ‘lifrdcerétl to wo. Thils’, however, was on er ne y pressure 0f the Government and the Cen- lral Bank for lower rates on Gov- ernment loans. As a matter of iect, the Dominion of Canada has been borrowing money in some oases at rates which stand comparison with the rates at which the British Government has been borrowing London. These low rate-s have insulted in a drastic cutting down "is 90min oi the ohsrrered banks. which ave been furor-d to reduce their rates to depositors. Based on the results oi the Bank 0i Montreal, it means that the de- positors in all Canadian banlu are

Mmum than t

m? s: titiree per cent In s. sense uc on ma," re as a

form of concealed Emotion. r think

that the sooner the public is edu-

cited to these fscts, the better.

fltil. “til. "“‘ “t2?” 5.32%

n ma w are psidodirectiy or not, no his sham

' ‘mush such hidden taxes as a re-

" may be bu

ma“ 1mm ed in ev

d-v-w-a-yrggi

c harvest in Canada ed _ oi i084, and. taken as a whole, gfl-cs of field and farm produc We been 111%“. The l 274,000, 000 were

Fl".

1v be m m, ‘ t farmer}: przdtrfits lbfthgqeot

"I 0cm editi- ‘0 numbing ti‘

v5

ity of ‘poo? unmistakab e lshicn their an‘? to the two-party system which

served us so we in and their distrust ofindlviduag“ of pa on times by agitating for ‘the estab- lishment of some der oi societ

power make it independent of an ests seeking to hold theba tnce of pom between the Government in

together, these two develo lave had an inoalcuisble ei- ect on m: restoration oi confidence

cvnw..., 3a"? ‘ e- well-being of this osmiiws moon mosuuss

mull

wit! m‘ t

lls by an immense major- , who showed in ' adher-

t or rties‘ h so ‘ ht-to italise

dxtroess uigicldentcalto the

the

visionary new or- ’ in whiz? bean are o e coun an e the pie would be regi- by s:_~.t.-. 1 rank this iepudim. n of fantastic and- Utopian experiments

as the 5G0 111190 t t d6 1 t ragga-Ea sincetlhgnOttawfioxg-‘rg-

and thro h the connec- ur 011k has In 0th-

it’ has immensely en- ‘ the prestige oi the Domin-

ion abroad.

A second reason for the favor-

abfe reaction to the, results oi the election is the fact that the Gov- ernment ‘which has succeeded to

has ch ori ill su smal tyalsnap

e official Oppodtion. Taken ems

in mediate Outlook Ind in thG

i ultima destiny oi this great Do-

I-look with hope to

the new Ooavernment w justify out confidence. Certs inent since tion as the‘ present Cover-went to

inly. no Govern- Coniederation has d in such a str posi-

ugh ‘such measures as vindicated to be neces-

llsvi“ our.

' ‘Ill “C. SUI palkhl r a airs” “t? - trio-wag» llbtiom-wlgfi

' of, _ tional es -wltM\it ‘éllnlbatinl

8181.‘. '°~“°"" PM“ c» M-

with arguments as to what cannot

done to remedy the ruinous "uation that exists with regard to them and yet the Canadian Na- tional Railways is still aliowed to plunge us into debt. During the p ten years the guaranteed debt of the Canadian National Rail- ways has increased $405,000,000. gran to cover deficits have amounted to $153,000,000, while un- Bald interest upon loans from the

minion Government in- creased $320,000,000, an aggregate addition of 5881000000 to rect and indirect debt of the Do- minion. Moreover, I am credibly informed that adequate provision is not being made for depreciation and that this will eventually mean further large expenditures.

The Canadian Pacific Railway, which is one of the great trans- portation systems of the world. formerly paid its common and preferred shareholders each year about $40,000,000, which, by the way, was a very moderate inter- est on their investment. These pay- ments have been discontinued, due portly to business conditions but also to the fact that the system has been competing with a railway which is receiving money from the Federal treasury in generous sums that. by an easy process oi book- keeping, are added to the Federal debt. The Canadian Pacific does earn its bond interest and pay its taxes, and therefore is ,an asset and not a liability to the country. If the Canadian Pacific were

that it formerly paid, it would be contributing, in addition to the taxes it now pays, an annual in- come tax to the Federal Govern- ment oi about 86.000000, and there would be the further income tax to be received from nationals owning the shares,

What can be done, and what must be clone, is to put an end to the- uttery unwarranted competi- tion and duplication of services by our two great railway systems. In this connection I repeat what I said last year, namely, that m1]. ways today face ‘extraordinary competition from other means oi transportation. and that railways competing against ench other In the ruinous way that ours do can never succeed in adopting a. com- mon policy to meet these other forms of competition. More than ever it is necessary to coordinate all forms of transportation, not by the throttling oi competitive systems, but by the elimination oi useless competition by means of intelligent direction. A first step is the oc-ordination of our railways. A second step is the regulation of all forms of transportation under a. Federal Board of Transportation Commissioners vest/rd with powers simhar to those oi ‘the Board of Railway Commissioners. but on a golfer and more comprehensive

H .

In respect to unemployment, still a most serious factor in our situ- flflflh. the cure of course waits upon a. more complete revival in our trade. Meanwhile; I am glad to note that the Government is pledged to vigorous action in re- spect to the problem of relief with a_view ending the chaotic con- ditions which are bringing ruin to our provinces and municipalities. Relief, of course, there must be for every person who through no fault of his own is unable to earn s livelihood, but relicf must be re- cognized as u national problem to be dealt with under centralized control,

Our huge carry-ave; oi wheat constitutes another o t lems on which we have been sur- felted with arguments as to what cannr‘. be clone. There can be no sound basis for p~osperity in West- ern Canada until thst problem is solved, nor will recovery in the rest of the Dominion get Into its proper stride until then. Manv in- dustries depend on the flow of new wealth into this country in ex- change ior wheat, and part nf the set-back of our railways is due to the effect of the stoppage oi the wheat traffic in which so much of their expensive equipment was formerly employed. What we have to do is to sell our wheat, not hold it. and sell it within the crop vear. There is no other way out. Every day that passes during which we have done no business in the world's whvt market is a day lost for us and a day gained for a. com- petitor who hss sold his whcrrt by reason of the fact that our or!" has been out of line with world markets. With so miiny countries now committed to the yiolicy of supplying their nwn domestic needs and oi being independent as for as possible in the mntter of food, we are left with orartlcaTlv only one dmportnnt market. namely, that of Great Britain. This i< the market to cultivate and not to throttle.

There has been a slight change for the bstt=r in the pulp norl pacer situation, inns-much as the newsprint tonnage which the mil's have been uhle in secure has in- creased considerably. Taken as a whole, however. the situation is very disappointing. Here we have one of our great natural resources in the shape of our forests being depleted at s. rapjd rate for the benefit of newspapers in North America and other parts of th- worid who desire to secure their newsprint at less than cost. The capital invested in the pacer busi- ness in Canada is estimated at about $555,000,000, and we may as- sume that this takes only bonds and preferred stock into account, excluding the common sto~k, as no doubt much of it was water in the first nlacr. 1t would be fair to suppose. therefore. that under nor- mal conditions this huge invest- ment should bvinr in. in the wav oi interest on ‘bonds and-d vidends on preferred stock. some I25 000,000 per annum. Instead, however. of producing p. sum approximatin". this, the industry shows no_ profit at all. the result hein that few, if any, of these cnmpsn es are mak- ing g contribution to the Federal income tax, as companies: and further, ‘e who should be re- ceiving ond interest and divid- ends ore also making no contribu- tion because of the non-receipt of this income. It would be a fair es- timate to sav tha‘ the Fflicrll Government is lasing six to seven million dollars a year on. this one i dustry. You may ask why "ill should go on. 1t will, so on lust so ion as new s can continue to guy their ms risl. at less than “at, ms our forests ‘will go on

disappear-ins. We are someiim-"r

told that this is a provincial mat-

W-Ullvleratomewbesied- /

earning and paying the dlvidendsiocui but

he prob-

eral matter of the greatest im- portance.

NATIONAL FINANCES

All the matters mentioned lead in- evitably to the consideration OI 0i" ustionsl finances, for if, in deulilll, with these problems, the line oi lent resistance la followed by our IBVBII!‘ uientul authorities, than we Ill)’ 0!’ poet further increases in our debt und taxation, und a outinuouoe of deficits in our- irutiousl budget, with ultimate destruction of the national credit. Our debt has Brown at l Dro- dlgious rate and there seems to’ be no end to new borrowings. 1‘he bonded indebtedness, direct or in- direct, of our Dominion, Provincial anti Municipal Governments now amounts to approximately $6,500,000,- 000. '1‘ a figiho nun i ecu 1| . . than 3,500,000,000 during the put five years, that is,‘ at tbs rufo u. 8800.000 00 per aunum. A large art of the total is payable as to princ si and interest outside oi Cauadd. ‘wh h presents an added complication. lu- dced, tho situation ll that we as I nation have to send abroad ior inter- est commitments alone 3000.000 over-y working day of the year. In this. re- spect Canada's position as a debtor is much more complex than either that of the United States or Great Britain, whoso- gu- indebtedness is largely to their own nationals.

Closely related to the national fin- ances is the question of provincial sud municipal financing. Just II municipal finsncln has complicated tho problems ports ning to rcvincisl fveasuries, ac has provincia ing complicated the problems par- ing to the national treasury since the Dominion uv nt has again and again bud to come to the assist- ance of certain provinces. The situ- utlun has become so serious that it .s now imperative that some form of control and supervision shall be set up over the financial commitments hoth cf provinces_ond of municipal- flies, since therc arc no longer of of national concern. Not only must the machinery be provided for such control and supervision. but it is most desirable at the sumo time ic have a clear definition of the le- spectiva spheres of municipal. W0- vlnclal and federal taxation. At the present time the utmost confusion prevails in this respect and addition- ui complications are ever arising, with duplication and multiplication of iuxatlou.

In concluding 1 would like to em- phasize tbc fact that one of the rnulor planks in tho platform of the party which has succeeded to power was tho definite and emphatic promise to balance the budget. it will be se- uicrubered that the balancing of tho nntlonal budget was laid down an the prerequisite to recovery h! "l" Nntlonul Government in Great Brit- ain, find 1t a umttcv uf common knorvioilgc that not, only was this object fulfilled hut that its fulfilment bus cauuoil Grout Britain to lend the ivorlil in the return to prosperity. We are entitled to look for a smilsr ful- filment of a simliur objective by tho new (toverpmo st Ottawa, and 1 have no hesitation whatever in say- ing that ith an early achievement of that ob cot, Canada. assuming iii: no exterior problems arise to compli- cate hen outlook, need ho second to no other- country in progress and material well-being. (AIIDIIIIIIL)

THE GENERAL MANAGERS‘ ADDRESS

Mr, Jackson Dodfll, as Joint Gen- eral Manager, read the address of the Joint General Managers, which was in part as follows:

Mr. Chairman and Gentlemen:

Ou behalf of Mn Bog and myself 1 hnvc the honour to present to you tho 118th annual biilunco sbect of the

Brink.

Important changes in the figures are as follows:

Our total‘ assets amount to 8102.- 800,000, compared with $750,100,000 a

your ago. Quick assets, including ossb, total $.‘r.'ili,~l00.000, representing 7451i pot

vent. oi all liabilities to the public. 'l‘hls [icrcentugc is higher than ne- cossary for nor-mill requirements, and is n result of the reduced demand for loans for commercial purposes. Cash holdings and balance in Bank of Cunndu m. $82,000,001! rcpros-nt 11.60 per cont. 01.1111 liabilities tu _(|l\.‘ public. limit-r fbo tormsi of the ll-inl- hi’ Cunndn Act we were compelled to liunrl over uur- r-nil.» ;,-. |il Cnnerin on the opening of that in- stitution. iforrnnl protest was lodged ngulnst accepting tho statutory vnluo 820.0718 per iino ounce, on the grounds that the gold was held as protection ngulnst. liabilities and contingencies clscwiiero than in Canada, \\'lii‘l~.i it lind a market vuluc of about $215 per ‘flue ounce. Our protest was in vain and on 11th Mnrch last wo turned in nil our gold hcld in (Jnunrlu. By order in council duicd 20th April it was directed that 40 per cont. of the uuiuunt should bo iloonlcd as having been hold by us against liabilities elsewhere than in ilunnrla and the Brink of Canada was authorized by the Exchange Fund Act 1930 to dc- tcrmluo mid pay over tlic appreciation on that sum of gold 0t tho current innrket price. This rvus flul receiver] by us in July aurl act ssi e for the apecific purpose for which nil our gold hud been held, iramsly, ns protection ngainut foreign liabilities and con- tingencies elsewhere than in Canada, Tho gold holdings of your Bank played an important, and at times a vital, part over ibo course of a cen- lury, in stabilizing tho value of Can- ada's dollar and in supporting the crcilit abroad of the country at large. During tho past year the average cull loan rnio in London was % 0T 1 per cont. anti in New York 3/0 oi one per cent-not sufficient to cover 0D- uraling omits. it is essential to our oprrotious in facilitating our custom- ors’ fnrolgn business, to meet foreign deposit liabilities and for reserve pur-