* .' MARcn 4.19s‘. Inflation. Fallacy FineNon-Partizan Speech EyBennett (costume from Page u . ,, m supply the requirements of the rural population. This comple- tmtary activity, by which the agricultural populsti on the one hand “d, an ever-in market with the development of our resourcel. m; an the other hand ever-increasing opportunity tn Purchase the pro- duct! of mill and factory, indicated I think the ideal development of our musty. it follows that a country so rich in resources as this, with forests minerals and farm lands, with this magnificent heritage o! mom“, with a population so small as m: and s quarter millions of mp1,, necessarily has an increasing quantity of products for exports- Hence 1t i; that, although with the ‘shrinkage of world trade we found a mat diminution in our exports, and sank to sixth place amongst the mum; countries of the world, I am happy to tell you that once more this young country of slightly more than ten millions of people occupies the proud place of fifth among the exporting countries of the world, ex- mgss only by Great Britain, the United States of America, France and That is a remarkable achievement. And it seems to me it (lei-many- for us to realize and recognize tonight, gathered in this [niglibhd W011 _ may, city. the sacrifices that the Canadian people have made ‘Magma, through the burdens imposed upon themselves and upon poe- m-ity, to make possible this achievement. Highways, railways and sea- alike by the Provinces and the Dominion have rendered ever-increasin! urvlce for the conduct of trade and commerce. Our railways indicate that at one time at least Canadians had an entirely erroneous view even our own importance. for when you contemplate what it means that the dim people was used for the purpose o! teeing against loss as fer as financing was concerned, rival enter ose function it was to complete with one another and. destroy you can understand something of the causes that contri- having a. deficit in railway operation! lust y"? gmountlfig to about seventy million dollars including indispensable capi- constructed wgys have been Our highways that trade may nourish. v llectlve credit of the Cu prises wh one mother, g huts to this country tal expenditure. THE RAILWAY PRQBLEM Gentlemen. there is no problem the magnitude of which is understood, that touches so closely the life of every Canadian, railway problem. involved, for in my iudgmsnt it is one of the clouds that overhaul: o! that problem, whatever it may b0. callin! I! ii the highest character, will be painfully brought about. I say liberalism-though with every But. may I point out. there is I out for the railway problem. made possible the result which now confronts us. that at least one of, the 870st Canadian National could neven that the three great agricultural should take stock of our common ~ adequate conclusions. ‘A we have hundreds of millions of n oug Grelt Ldkd! l-Iid 5t. Lawrence duds of millions of dollars. We in constructinl our highwlya. Montreal, Quebec, Halifax, Saint John; bade-cast and wast trade-realist" ‘ and west traffic. We have built these great railway systems, these great canal system-i. these great harbor works and terminal facilities for the promotion of vision and prescicnce of the Canadian people that they looked so far beyond the narrow confines trade which ranks filth amongst the exporting countries of the world. It is a tribute to our vision. but: on fiueother hand i0 has placed upon us an enormous burden, and the question must sometimes occur to nifliy of you business men whether or not the toll exacted from Wu i! 110% IP90"? "l" i!" "mm whim acute as the days part of what is involved in the steadily mounting, but I trust in reasonable time. steadily trade, and it is a striking commentary on the of the immediate day, that. in thh very year we have a have been achieved. That problem will become moro- IO by. with a clearer and fairer appreciation on your lessening railway deficits. ¢l cautious CBIDI‘! svsrsss But we have done something more than that. In the years past we ‘we built up a vast financial and credit system. It was not until 1871, as some of you may r law providing for the Canada in i058 provision was made for the l-Cilulufts in dollars and cents instead of in pounds. We have developed a system of publ power of dispsssionate criticism, to determine the Provision we have made meets Finance-How have we met it? We issue of paper money, which, as some of you w misc to pay on demand the amount indicated on u! Canada there shall. to the extent of fifty million dollars. be deposited in 95 per cent. in gold. And thereafter, 801d. Gentlemen, the mare issue are concerned and as I will hereafter develop, found importance. But when it comes to the issue of it ia ail-important what is behind the paper that we call money, The provision of our law that requires 25 per cent. up to "ill thereafter dollar for dollar in gold as coverage for the P5991‘ mimi- lwrhaps somewhat higher than modern experience and practice would die-ate as being necessary. I am “my. regardless of what the amount will"; M. will! Brice. Iwiiiuotgointoadisonsaiouoftbattqnilhi. tions that arise in every country that is‘ so , Runnable crop such as grain, the aecuri “rune-amena- ledaraiTreeaury. "ii wmee mum to onouinfrl would seem “Yflurba u readied regarding um matter. we mast ha" “W; iitbtef through so little as the I will not dwell upon it tonight, but I trust that every young Canadian will make himself familiar with it and understand what is greatest and dflrkesfl the future of this young Dominion. The solution does for qualities 01 that de- conildonce that we will find the solution. ‘they sometimes to blame the 'f‘hat should not. be done, except in so far as those who promoted the enterprises through our national Parliament But it will be recalled competin systems now merged in the have come into being but for the 100i provinces gave their guarantees to its securities-to the securities not only of one but o! two systems. So we responsibilities, east and west. with respect to the situation that now confronts us. I recommend it to ybui‘ hearty consideration and closest study. that you muyvarrivc at prover dollars invested in our railways. Waterways system we have hun- havs contributed many millions mere in all the terminal facilities at Vancouver. wharvea and harbors built by the taxpayers of this country to afford faculties for the transaction of that on tbs northern half of this Continent if we are to maintain our identity as a people it is absolutely essential that we should have and maintain common arteries of ell! scall, ‘that we passed a uniform value of the dollar, although in Old keeping of the public shillings and pence- ic finance that, while it is open to Wine uiticism, is in the main I thinbsatisfactory. At least it commarxis the admiration of people abroad, who are well able, by reason of their extent to which the the demands made upon it. Public have met it by providing for the ill have noted, is a ilro- its face. We have pro- vided for the issue of that under a metal coverage. In other wordfi. We have provided that when paper money has been issued by the Dominion 28 per cent. of the issue up 9° the public Treasury 811500-000 °l for every dollar issue, a dollar in o; pgpgg money, so far es we ourselves is not a matte of pro- paper money for "is rum» of liquidating and discharging international onus-sum. Ma told by those wail able to indie. by snkers and expert economists both hero and in Great Britain and in the United States, that a ac per cent. gold coverage m- the issue of raver be sufficient to mat Wei‘! damaiid um. urea-ism and practice have taught as liirly 9° but content nuraeii to expand trade we have "Me the provision which r have indicated in our currency lanai-tie"- {gpgaiy dependent lipflfl I ties of this country filly,“ ""0 and the banks may there obtain ism tender o. pijcuiiau to p1 of the Dominion, to enable them to fin- "i" and cam on the operations of export use. of burial and will»! “mummies. m the main that’ provision has been found satisfactory- Whetbsrornctitadeeadeeiytaanmpisseszqqntnibankitisnct to me that before Ill] the oluaeat was CHARLOTTETOWNCUARDIAN determine what h best for Ill. rather than what has been beef for other peoplei iu the world. (Applause). CANADIAN BANKING SYSTEM We". ii-imliil to the field of quasi-public and private finance, we have our great Willa. incorporated by the Parliament of c = , regu- lated under the provisions of the Federal statute known as the Bank Act. Under our Constitution banks and banking are dealt with solely by the Federal power, and in dealing with this subject regard must cyer be had to the fact that the banks are chartered for a period of ten years.- M the end of each 10-year period they seek renewals of their charters, lo that r-Ililmeni. representing the people, may be able in the light of Practice "if! fllilflriflwe i0 impose upon them such regulatory provisions as will ensure on the one hand that their deposits are being made avail- able ior loans to the public on fair and reasonable terms, while on the 0th!!!‘ ill-iii!‘ “ill- ihfl “Wiley o! depositors is safe-guarded in every roas- ohsbie way. Gentlemen, it is a matter of some pride to those charged Wli-hvfliiiliillbillty in these matters to know that the banks, during this period of stress and strain, have discharged with great satisfaction not only to their own customers but to this Dominion and all its citizens, the great responsibility that rests upon them. Sometimes there are com- Dlli-ni-B 001ml. the banks-why there are even complaints against the present Governmentl-but I want you gentlemen, whether or not ‘you are associated with financial institutions, please to remember this: tlIe capital o! banks is relatively small. Practically the whole of it will be found any day. with the reserve and surplus profits, in the till and in buildings and other assets that arc not available for lending to the public. The business of banking in this country is to receive deposits and lend them to those who can afford to borrow. Tonight I will, put this to some 01 you within sound of my voice, either in this room or elsewherel I ask you whether or not you believe your banker at any time in declining to make a. loan has done more than you would do with your own money in like circumstances. That is the test. For remember, the business of bank- ing in Canada is the business of safely investing in loans the deposits of the many. What would happen if you had bankers s0 disregarding their 011118061008 and responsibilities as to lend for three or ‘six lnonths, or for thirty days if you will, to customers who when the time has expired are unable to pay. Then you would have the frozen credits, then as a depos- itor your cheque would go to the bank and be dishonored. Then the doors of the bank would close, as happened nearly 4.000 banks in the United States during the last 18 months. Lientlemen, the business of ‘ hiring Is the preservationbf an equil- ibrium between time loans and time deposits, between demand loan; 3nd flmlnd deposits. and if a banker is so recreant to his trust and his res- ponsibilities to his depositors, as well as to his bank and the public as w lend money thoughtlessly or recklessly, if that is done on a sufficiently large scale, then it follows that when the moment comes that the de- positor demands as Js his right his money back it. cannot be obtained because it is tied up in a loan that is not and cannot be paid, I say these things tonight because I am speaking to an audience not all o! whom are trained financial men, as are many in this room, But I desire to make it abundantly clear that the people of this country should understand clearly that- a ‘ ' banks ls no friend clther qr theirs or of the community. The need of caution in making loans is of the highest importance, because if the depositors are to be paid on de~ mand there must be no careless loaning of their money. (Applause). And I repeat, it is a matter of pride and satisfaction that wherever the name oi this country is known-and it is known in every part of the globe-our banking system a regarded as being sound. I do not say there are not many improvements that may be made. that can be made, that will be made. But I do say that Canadians in this time of stress and strain and universal depression should rejoice in the fact that no depositor in a. Canadian bank has had to take his cheque back because it could not be honored, that no banks have closed their doors, and that in the smallest and most remote part of this Dominion there is usually a brunch of a great chartered bank that offers facilities to those living in these small places comparable with those afforded to you in this great City of-Toronto. (Applause). Now, gentlemen, the banks also issue paper money. The banks also enjoy a franchise, thc franchise of issuing their bills, their paper money. against their accumulated resources, and if the need should come, against the securities of the Dominion of Canada itself. Now this becomes im- portant in the light oi what I am presently to say. In i920 the Dominion had issued paper money up to $305,800,000 during the year, and the banks $220,800,000, making a total of $534,600,000. In the year 1920 that amount of paper money was outstanding, to serve the activities of the Canadian people, enable us to export our commodities in order to buy goods and to carry on this great business of trade and commerce. Last year the con- traction in trade had become s0 great by reason of universal conditions, not worse in Canada than elsewhere, that the Dominion issued only $165,870,000 of paper monies as its average, while the banks had an aver- age issue oi $l32.i66,000, or a total of $298,036,000 of paper money out- standing. Yeu see, as trade contracts paper money contracts automati- cally, having regard to the provisions of our Finance and L cy Acts which I mentioned a moment ago. So if we keep in mind those two things, our provision for Public finance, and our provisions through the regulation of our private efforts. through our banks and otherwise, you have what we call our credit struc- ture. Young men, you who are on the threshold of business life and arc facing and studying new conditions, I hope you realize that in these two combin d you have an almost ideal credit structure. Much remains yct to be done, but for a country so young, with a population s0 sparse and inhabiting an area. so great, there ls not in the long story of history a finer record of achievement with respect to the establishment of a credit and financial structure than is found in the combinat‘ of our public and private. arrangements to which in part f have just referred. lApplause). There are difficulties of course. Normally conditions go on from day to day, from month to month. from year to year, in a regular course, and "Dim us in this country obligations and rt-‘sponsibiiliies that we have rarely had to fa-co. Gentlemen. your Government is not entitled alone to the, credit for facing. them with courage, as you said, Mr. Chairman, but the iiiie courage of the Canadian PBODlc. their resourcefulness, their faith, their absolute confidence in their ultimate destiny made it. p08- sible for your Government to carry on under such conditions, and thus far to weather this terrible gale. And with your help, your sympathy and your assistance we shall continue to do so. MARKETING PROBLEMS Gentlemen, the great difficulties that confronted us, and confront us still, may be spoken of briefly as four in number. First, the difficulty in continuing to find markets abroad i9): our surplus products. Too fre- quently wc Canadians have been willing to produce without regard to distvibuztan. Take as examples newsprint and wheat. The consuming powcr of those who buy must be the determining factor where you produce for export. Here we have been producing thousands and thous- ands of additional tons 0i’ one and bushels of the other, regardless of the fact. that there is no one who can use the one or cat the other. The sluinkoge of markets arose out of the fact that the conditions to which I have alluded obtained in every part of the world, and every country was trying to sustain its own life by its own efforts, because ii had not the wherewithal to go abroad and buy. That is the reason why the price paid for wheat in some European countries is twice or three times as much as it can be bought for in Canada. Rather than go abroad and buy, upsetting their balance of trade, they found it desirable. by bonus and subsidy, to stimulate production within themselves of their rcquirvinenis for‘ the maintenance of their lives. I have not time tonight to dull further with that question; suiIlce it to say that the development of tliut sentiment, amongst all the nations of the world, whether it be old nations such as France or Germany, or newer countries, it mattered not. I everywhere you had the development of that spirit, and arising from it, whether through the raising of tariffs or otherwise, it was made just that much more difficult to sell Canadian products in the markets of ' those countries. Sometimes it amounted to prohibition. Then a second difficulty was in connection with our trade balance. i I am not going to discuss with learned men silbh as many ofyoli are, the question of our trade balance. But I point out this, as the Right Hon. Ramsay MacDonald said, addressing e. British audience some months ngo, the State is just like a private individual, if it keeps on buying more than it can pay for your after your it is perfectly certain that in the end it will be insolvent. And if a new countriy‘ or an old country keeps on buying more than it can sell, whether by visible or invisible exports it matters not, if it does this long enough it becomes insolvent. Therefore, if pos- sible a favorable trade balance must be created. Every nation, including Canada, realized that and lessened imports in order that, it might remain solvent; that. its financial integrity might. be maintained, and. its credit structure endure. We have done what we could to maintain the solvency of this country as far as our trade balances are concerned. (Applause). Gentlemen, I am not one of those who do not realize that it has brought inconvenience to many. You who have been engaged in the im- port business, I know how inconvenient it has been for you. Dc you think for a moment that a Government does these things for more sport? That we did not believe it. necessary. A favorable balance of over one hundred million for the year ended March, 1929, was converted into an nlanost equally large balance against us by March, 1930. This indicates something that he who runs might resdsnd understand. In the fall oi 1930, we imposed additional tariffs and additional restrictions, for the purpose of remedying that condition, and the result has been that at the end of last month this country had for the preceding twelvewnonths a favorable trade balance amounting to upward of fifty millions of dollars. (Applause). The third difficulty we cxpiwiellccd, one which I merely mention, was the failure to realize that increased production, instead of being helpful. might become harmful. In other words, over-production, with no market, might result ultimately in reduction of the price of products to an extent meaning disaster to the producer. The present wheat situation is an il- lustration. There was at the beginning of this crop year a. sufficient sur- plus of wheat in the world from the year before to supply the entire rc- ‘qulrements of the importing countries. That indicates the danger ct over-production. The other day those who are charged with preparing the agenda for the World Economic Conference said with respect to limi- tation of production that "Such an arrangement is of special importance in the case oi’ wheat, the cultivation of which represents the livelihood of a large proportion of mankind, and a bctinr level of prices could per- haps be maintained by regulation of production." So you have u realization by the world as large of a condition which was one of our difficulties in Canada. CURRENCY DEPRECIATION Another difficulty, of considerable importance to us all, was the de- preclation of currencies. When the pound sterling fell from $4.86 to $3310 ($3.30 in New York) and the currencies of all other European countries and of Japan fell to the level now obtaining, it created additional diffi- culties for the Canadian people. I will not stop to speak of the methods by which we endeavored to grapple with these difficulties, except that I would like to say a word with respect to the quwtion that arises out of the depreciated currencies. Sometimes I find suggestions from those who have given little study to the problem to the effect that all that is necessary for us to do in Canada is to embark upon a. policy of inflation. What does inflation mean? Nine out o1’ ten that I ask have no answer. except they say, you will have two dollars where you had only one before, Gentlemen, may I point this out to you; geographically, we are part of thaNorth American continent‘. Who by taking thought can add a cublt to his stature? Who by taking thought can change Canada from being a part of North America to being a part of Europe? Gentlemen, I invite you to remember that fundamental fact/that the Dominion of Canada geographically is part of the North American Continent. And it the gradual improvement necessary is made as the demand arises. But in the years just before i029 a speculative era came upon the world. reaching its climax in that year. In consequence of the war, we had dis- location of trade and commerce everywhere, on an enormous scale, and creation of debts on a scale previously undreamcd of in our wildest thoughts, yet by i028 we believed we had achieved at any rate a. fair measure of cess in overcoming the difficulties incident to the post wnr period, and had achieved almost a return to pre-wer conditions. But by the latter part of 1929 we realized that all was not well, and in 1930 it became worse. in i931 there were signs that the world was grop- pling with the difficulties and might overcome them. a Arid then Great Britain went off the gold standard. Great Britain did not go of! the gold standard because she wished to do so. The British Treasury borrowed two hundred million dollars from the United States and two hundred million dollars from Franco to protect her position and supported with all her power and might and courage the pound sterling. Any of you who wish to hear s dramatic story I suggest that some time when you are in London you go to once of the great joint stock banks or the old Bank of England, and if you have a irien! living who went through the experience of those days in September, have him tell you about it. I wonder if you can picture the sadness with which those men gathend together. This magnificent structure that had def-led almost every force brought to bear against it; that had challenged adversity world, "we cannot maintain our position. ‘the four hundred million we have borrowed with what we ourselves had, is gone: on trio mor-, row we must admit our inability to redeem in precious meta: of universal value our paper money." ed that moment. contract. is, in my 0001100. legitimate pride. R Wll i110 [$05006 Canada. it is so with respect w other parts of the world and as I dc velcp what r have to w. I think you will agree with me. ' at any me tboae wen ebb conditions that confronted u. u. 19x1 universal denrellifill. universal unemployment, universal Willllinvaatisation of conditions in our Mm country “it we may awe mentors be able u trade upon which the world lives. Also a psychological condition. ofmludiaciiofoonndeuos, 1 everywhere, was crumbling before their eyes. They had to say to the I have talked to one of those nisn and I recall his emotion as he recount- ’ Gentlemen, tradition, history, pride. flu-so are great things. In the development of this country I hope they play a not in- significant part. Pride in our achievements, pride in our integrity, pride in our willingness to at all times ‘meet our obligations in terms of our _That eveni- is past. But the affect upon this world has not yet lwm fully understood. N0 siugle- event that has happened in this Dominion since 1061 has had more far-reaching results upon our commercial lire. single-shall I say “IUIWF-Jh“ has overtaken shrinkage of a state suspicion. unrest everywhere. mt placed tion in cams, and do you know what they gives me no icy to remind you also that financially it ls in the same position. But frank recognition of a fact is absolutely essential if you a PAGE uv.a';;... the name of one of the gentlemen everyone would know it, I will not do: so, but he is the foremost banker in England. (Laughter). Well. I am Perfectly certain no two of you would guess the some man us being the‘ foremost banker in Canada, so how can you do it in England? Many would say Sir Joseph Idlavclie. many Sir Thomas ivlilic, and I see also. present Sir John Aircl and other very eminent bankers. This is what he said to me: "Mr. Bennett. in all the history of the "Wm Y0“ will find no record of inflation or departure from sound money by any country of its own volition as s. matter of deliberate choice. There, are two reasons why countries go oil sound money, two reasons only why they inflate their currency; one is because o! necessity from lack of sound currency and lhe other insolvency." We in this coilniiy ncilhcr require more currency nor are we in- _ solvent. (Applause). I Wlllll. to make that pPi-fccily clear. There has never been a time in recent yours in the history oi (Jsnudu when there was so much money available in the banks and financial institutions. Why? Because the very conditions that obtain in this country compel the bunks to be in a position to meet every demand oi’ their depositors, and they- cannot do that with loans to you or to me that cannot be paid at matur- ity. There is no shortage of currcnry. There has been a contraction ill bunk notes, in issues under the ii‘n::-.ncc Act, there is a continued sin-ink- 08B there. Wily? Because trade has languished throughout the world, Just the day before yesterday, it was reported that in the joint stock banks in London and in the Bank of Englnnd there is more money than in-the memory of man in recent years, ovw seven billion, if I rcirlcznbei- srlght; an almost unthinkable amount. So we have no necessity for inflation from the standpoint of lack of currency, Then as to the second ground. I do not desire tonight to mention countries, that would not be right. But study conditions in every country that has gone off the basis of sound money and you will find lhat where it was not due to shortage of currency it was lnsolvvlcy that compelled k action. When I say insolvency 1 mcun lllllbllliy to meet their Qbllgfltlolls unless they had recourse to some artificial means. I‘ will only say this further; one never should speak lightly in times like this of what chang- ed conditions may mean, but unless abnormal conditions obtain, unless something happens that cannot be foreseen, this country dare not depart from a sound money basis with such heavy nhiignlinns maturing this year in the United States of America. (Applause) Did it ever occur to you what would happen to the credit of this country, that how stands so high, ii we were to inflate our currency‘! ‘ What would happen to us in the United States, where our dollar is nowr a worth below ninety cents, if it were ivorth only fifty cents? who is going to pay that $266,124,100? Shall we default, or shall we maintain our _ proud credit position? Gentlemen, I need hardly say w‘ you that since September, 193i, there have been moments of the gravest anxiety to those responsible for the financial administration of this Dominion. But "" ‘ the natural resources of our country, particularly of this great Province,»- provided $65,000,000 of new gold last your, nmv “Tfliiil, enabling us to meet every obligation abroad in the terms of the contract to’ pay. NW (Applause). We have three kinds of those contracts; the promise to pay in Canada, the promise to pay in the United States, and the promise to pal‘ ‘l in either one or the other at the 0pil0n of the holder of the promise. All of you who cashed your coupons in Conrado, when they were payable at your option in the United States, instead of sending themtcblew York, please hold up your hands. (Laughter). But, gentlemen, I hope you gel! _ fully the implications involved. Do you realize who); would happen if you _ made the dollar of this country north 50 cents, when you have these international obligations to meet? I repeat that it does not make much difference what kind of money you use within Canada-that is our busl- ness. But international obligations have to be met in the terms that the creditor provides, and the creditor has said, "Gold coin of the United States o! America. of the current standard of weight. and fineness." l-ic lent the money, we made the contract, and we must pay accordingly 01' be ileiaultcrs. That is the issue. Can we deliberately inflate the currency of this country, knowing as we do that it will make our dollar, which is now worth say 90 cents in the United States, worth between 50 and 60 cont}. or possibly less? What would be the effect upon their Canadian invest- ments, representing approximately four billion dollars‘? They bough’. our securities because they had faith in the vxvltivn promise of this country and its institutions. Do you realize that in the United States of America the name of no country stands higher than that of this Dominion? Why? Because we have met every obligation 1n terms of our contract, suffer though we have in doing so. Gentlemen, when ‘people talk lightly of these things I ask you to remember what. the implications are, what lack of confidence means. Vvhat is credit? Con- fidence. I have shown you how our credit structure has been built up . by Public Act and private activities. Inflation would mean liquidtaion. Our bonds would be thrown upon the bargain counter. We would find our domestic market affected and would be coniprllcd Lo take what we could get for our securities. Confidence would be gone. And, with the departure of confidence, credit also. And with credit the country. I venture to spcak to you tonight about these matters in the“ serious terms because I conceive it to be my duty to do so. I would be recrcant to my trust if I did not endeavor to bring home to you the problems with which your Government has to deal, namely the main- tenance of the financial integrity of this Dominion and the strength of our financial structure. Gentlemen, there have been dark moments ‘ in (lie past. In days gone by there have been tlmcs when your public men, confronted with great issues, have had to make decisions that were difficult to make. 1t is so oven today. But they made them. By the sacrifice of those who have gone before, by their (iauntlcas courage and resourcefulness. we had a race of men that would not think of repudiation and a country that has maintained the confidence of the world in its credit structure. (Applause). Young men, I know you will not be unworthy of the past. Sometimes when I hour it said, "Well there will be more money in clrcillaiion." I suv, “What kind 0f money?" The answer I will give you is one that cnmu tn my hands last week. There has been meeting in Geneva during the lust few weeks s body of men whose responsibility was to prcpurc mi agenda for the Vvcrld Economic Conference. That Conference wall have to deal with problems that touch your life and mine, DQUIHISC nndcr cxlzviing conditions there is no part oi the world that is not our neighbor. A great Tact, which are going to deal with the problem that it raises. In this year of grace, the Dominion of Canada must meet in the United States of America’, Canada and Great Britain, for principal and interest on Dominion loans. direct and guaranteed, provincial loans, direct and guaranteed, loans of municipalities and a few public corporations, the enormous sum of $684,149,048. Of this $323,346,120 represents principal and $360,802,928 represents interest, You will note the interest alone is almost a million dollars per day, including Sundays and holidays. We have to provide this by renewals of our promissory notes or by payment. And of this vast sum there is due in the United States of America $266,124,100. 0i this sum $109,392,776 represents principal due this year and $56,131,324 interest. The obligations oi the Dominion due in the United states this year for principal and interest direct and guaranteed aggregate $108244,- 573. Similar obligations of the provinces amount to $70,600,073; of the fore Great Britain went off the gold sdandard, we always sold more goods to Great Britain than we bought" from her and there was a surplus available to pay was due the United States because we bought from them more sterling. _ INFLATION of them have it except to tell me to borrow perhaps fifty million of dol can exchange nnd so manipulate the for the dollar in terms of the pound. I have had recipes of that kin dollar to the pound. i say, from inveetigati iiberateiy, How municipaliilcs to $25,138,536 and of public corporations to $62,142,015. Let ‘me place the problem before you in another way. Our dollar is worth ic- day in the United States less than ninety cents, not because of its intrin- sic lack of worth, but because England went off the gold standard. Bo- our dollar was selling in New York at about psi", ninety-eight cents and a fraction. Why? Because in New York the balance that than we sold. But with the depreciation of the pound sterling our dollar suffered in terms of the pound. and since that day the measurement of the value of our dollar lins been in the terms of the dollar vnluc or the pound Now I am leaving aside the question as to how you ure going to nc- wmplish inflation .I have asked many men for the mechanics of it, none lure, and buy sterling and perhaps fifty million dollars and buy Ameri- two, as to maintain a stable value given mo, but ihrv have not said who is going to lcnd the money or pay - the- interest. Gentlemen, when you hear people talk about tying the which I made during the : last month abroad. we are making ourselves absurd. l use that term de- i\i'(’ you going to do it? I talked io the foremost authorities in Grvu Britain, discussed with them the question of‘ infla- told me? 1f I mentioned we sometimes forget, ls that modern science has made it, impossible for any one people to live an isolated lllf‘, 'l"lii:. is a world of neighbors. each is n neighbor of the other. lvhzit transpires in the most. remote part of this world tonight you will road of tomorrow morning. Per- haps you may hour it. on the rzuiio ioniglil, bulorc it lIflpDNlS if you are on the right side of the dayllnc. England sent to Geneva to settle this ugciidu. men of reputation to discuss the questions liivulvod with ihc rcprcsciiiniivcs of other countries. when the agenda was cnninlctorl the groups of questions that arc to bc considered were stated to box- ti) Settlement of intor-govcrnniolitul debts. I Wzk; ublo lu loll them in England the other night-and it ms with some pride-that we are the only coiuitry in the ivorld that was engaged in the war that loses by giving up reparations, because but if we give up lTplifillinllS we lo. 1- thirty m‘ forty millions at. least within ilic next low years. We do that. for llicpcilcc and safely of l mankind. But. we get. nothing, lhvrc 1S nothing to he forgiven us. ' (ill Greater freedom of international irmir. back and talk to you about tariffs). mpplnuso). iiil) Improvement oi‘ world prices, (iv) Financial and monetary uciion with a. view to suppression oi exchange control, the resumption of lending, umi the uliimuio stabilisa- of the Gold Standard Delegation of the lmuguc of Nations." words, the British Delegation ut this Cnuiorrricv saw the desirability. nay the necessity of having some medium oi oxchungv iliat has a like value runong all the nations there being only one, gold, - standard, for there can be no national trade while you have no uuilonn standard of vuluo in the units of currency in the scvcral countries. We ull know that. So this d Conference, that. is to mcct within the next few weeks in London, will deal with the problem of how wc can by nnitvzl effort svcurn thn stabilization of exchanges, bring about the rcstorsiioii.--nnt in the old my‘ in my pplfliOn, I am bound to say~of international trach- on n. sound money basis. Far be it from me to say that an nntlquv- worn-l... decided that m: should return to that. (Oral-tanned on page i4.) vvr have no iniov-goveriimciiial debts. .. <1 would like to come ' - tion of currencies. Under point iiv) the draft report govs nu lo say: "The ubjectivr ' must. be to secure the restoration of the gold stamdanl. as per mpol] "r In other .' 0i ilic world, am inicrilatiunal value, and 33 satisfactory mciliod of vniulilctliig inter» ~- - - method shall cMfinue, but there must be, in order that WONG-Vii?‘