l RUAKXJ- 1944' FEB _._ THE CIiARI-OTFETUWQ_QUARDIAN _g____ Say LA. McLeod, President, and H.D. Burns, THE BANK OF __, s .H.-q-.-..~ ._,, a: lIsii-s ‘firs... ' General Manager, at 1 nova scor CANADIAN BANKS HAVE MEASURED UP T0 THEIR RESPONSIBILITIES IN PEACE AND m WAR 12th Annual Meeting IA gating down of’ taxes will stimulate peacetime activities. gimme?‘ ‘flat-g; ilfiflilit-y at full gillifisnufhs world is in the midst of tin; government and business must co-operate to achieve K18?” l-zlloiéllfl hag guqtgelklryglll; r c ffnfnmou ‘Ziwullwg d’ high level of post-war employment. a taiillaempkjriizsai in pelcletime will “No cgu," h" l, “In; r J. A. McLeod, in his ‘ _ ' . . . . . " my ' Inhilmvm u" '85:: than Canada in an effective inter- Mdrcs; m tbs Shareholders at Halifax {filxsttmriigtzduction forlcivihan and tive and we "e Y. . payylm“, moummey-lsitsmlhrThgghayalcter of oitir February ..nd, spoke as follows. . . "ices ayai ablotncivilians. any pflgg go when w, mchmns the P ll" I ,6 QQPMI Y °“ bvidcncc of restriction is lobe found in tcmporarysacrifice of inanyof ourri hts a” such that w? must mamlm" m" Mnbllized for Total War decreased employment in a number of as individusjg w, do M, welcfime expand our foreign trade in order tc j, “On tho military fronts tiie past jeear , h te in improvemen in ill: lhcrlluiicscxiilf fliogUnited Nations. Since the battle of Stalingrad our llua- sian Ally has driven relentlessly west- ward until now she has pressed the hnrilcr of Poland, a_ll the time ivcaring t‘l(Il\'|\ and destroying the Nazi war machine. Chinn. as held fast in the mmth year of her_ heroic stru glo .. against the Jap a iuvailcrz An _at m; liL-l, thc vn war-makin capacity of the British Conimonwcult i and the Fnitcd States has been reflected in dc- cisive events on the battlefronts from the Mediterranean to the_Soutli_Seas, in the waters of the Atlantic and in the air over Europe. In this fifth year of the war, the most significant develop- mcnt is thcfactthatthe UnitedNatioiis, and especially the continent _o_f North America, are now truly mobilized for total war, as is evidenced by the growth in the fighting services and y the gigantic output of arms and war materials which seals the doom of the Axis Poircrs." Remarkable Production Record “Canada's part in this achievement l5 nna of ivhich we are justly proud. During tho ast year, in addition to her military c ort, she brought into full production agrcat and divcrsifie lnrma- nicnts industry, she increase even further her already large shipments of fcoilatnfls overseas, an provided huge quantities of esscntjal metals and other bade products for the war programmes of the United Stntcs and Great Britain. Perhaps we have noiv become almost immune to an appreciation oftheastru- noniicalfigurcs oi war, particulnrl when reading those_ of the United totes. Nevertheless, if’ we stop to think of it, we can scarcely fail to_ recognize the significance of a furthcr increase during 1941i of inorc than three-quarters of a billion ilollars 1n the value of Canada's eutpiit of the finished implements 0f war, to a total of about $2 800 millions -:i figure almost three and s. half times as grcnt as that for 1041." Exports Reflect ltlagiiiludc of 'ar Effort “Anot hcr impressive indication of the scope of the economic effort is the cnnrmciis expansion in our exports- arms to tho battlcfronts war materials to the industries of eur Allies, and food and a variety of needed commodities to llritain, the United States, rind other bnitcil Nations. In 1943, Canadian cinorls amounted tn $3,000 millions, S900 millions more than in 1942. The rnngnitinlc uf this figure is brought home when we remember that prior to the. u-ar, in 1938, our ex orts were S850 millions and that. cvcnt en we were the fifth trailing nutiiiii of the \\'0l'l(l. T0- ilay uc are the third, exceeded only bv the Lnitcd States and Great Britain." Railroads do Outstanding 10b “In addition to the achievements of our ncw wnr industries, our basic and lung-established industries have given a good account of themselves. Older capital equipment, and n working force in inanv crises depleted by the urgent demands of the armed serviccs and war industry, have been fullv and effectively" utilircil. This is particularly true of agriculture and the railways. It. is also truc of‘ runny other industries among irhiclnasthcGencralMiuiagcrsaccount. of tho Bank's wartime operations will show, may properly be included bank- ing. The railways are an outstandin Fiitmfllt! of what. has been achieved through increasingly cflicicnt use of equipment to which it has been im- qio-siblq to add in anything like the iroportion of the wartime rise in traffic. .1 hus, last year, though there was little c-apansion over 1942 in the number of curs loaded, there was ‘a considerable furl hcr growth in thc tonnage of freight lmnlcil and cycn inorcin ton-niilea—tho inensurc which takes into account the lcngthcf haul, The President of the lanadian National Railways recent! lprovidcrl an even more remarkab e illustration when he stated that the _is-din: of l9-t3, which vras nearly two and a. half times that of 1017 in ton- inilrs of freight and two and a third times as great in assengcr miles, was hagullcd with 17 ,0 fewer locomotives 10.0 5°“? "fight cars, and onl 6% more passenger cars than in 101 ." Farmers’ Achievement Truly Great “'l'hc story of agricultural production ls even more notable, when account is taken of the basic character" " of arming. With a severely reduced work- 8 force-—the numbe of male workers "l filled in farming is some 25% lesa I'd“? than prior to the war-—the armors of Canada have raised their Production b more than one-third over lire-war love . They have raised their "llliwt by enough to meet greatly ea- IAYBQd export needs‘ to cover special wartime requirements such as those of "to armed forces in Canada ship's aim". prisoners o war and so_'on; and Ha!!!)sweller a oval of civilian pen- ‘lthsn before t s vréanr. isnldtrtlrilul; great achievement and, though Jflther has helped to make it possible i ‘hid and lon _work on the part of flit; inraier and is family, together with fillitmglvfid methods, have yielded their 1 \ ‘Flvlllans Well Fed and Clollaed be , the require- rion-war branches of manufacturing and in trade. It is also to be seen in afurthcr contraction of private building and, of course, in the increasing scarcity of some consumers‘ goods as distributors’ inventories have been drawn down and not adequately replaced. Bub when all such develo meats arc given their due weighh-anrlmost of us have a. tendency to over-em ihasizs the shortages that we personally have rncnnntcrcd-csn anyone doubt t hat. Canadians linve been fortunatc" 'l'hc fact is that the level of civilian consumption was not much lower in 1943 than 1942. Though rationing and certain specific shortages have necessitated moderate chan es in the food habits of some citizens, am. dinns have been wcll fed-on the average better fcd than ever before. The other necessaries of life have generally been available in adequate quantities, together with n. modicum of conveaien ces and luxuries which would seem great to the people of Britain and unbelievably bountiful to the coplcs of ti“ war-torn countries of “uropc sia.’ Inflation Ileld lu Check "We may also count among our blessings the fact. that. the prices of foods rind services have generally been ll‘l(l within reasonable bounds, that inflation has not developed with all the inaldistributiim and conflict to which it inevitably gives rise. This is s. great advantage, and one that Canada. has enjoyed to a. greater degree cvcn than most other ciruutrics ivhich have made serious efforts at price control. The wartime increase iii tho Canadian cost- of-liviiig index has been held to slightly nvcr 18%. In the past year, when inflationary pressures were still increas- ing, the rise nus held to only 2%. In the United States. the wartime rise has been 26 b"; and in Great Britain it works out to 289T}. One has only to look back to the inflation of the last war to realize how much better off we have been in the present struggle-—the advance of 18"}. in this ivar compares with a. cor- responding incrcose in 1014-18 of 58%." Battle of Inflation Not Yet Won “It is ivell to remember, however, that the threat of sharply rising riccs and. living costs is still serious an is in danger o being accentuated by over- conlitlencc engendered by the success of price control to (late and by the marked improvement. in the war ncivs. This is no time to relax our efforts. The revcntion of inflation will continue to lielp us to sustain tho war clTort, and later to dcal effectively ivithproblcms of transition to peace. While it will not solvc nll of our |lOSb-‘i\‘ill' problems, it will provide an atmosphere and n. back- ground without. which an orderly and effective transition of tlis economic structure would be out of the question." Problems Involved in Relnving Controls “Canada, like the llniteil States, is uowreacliiiigastagt- in hcrivareconomy where some shortages are becoming, less acute than formerly. The rent en- deavours that have been ma e to en- large supplies of metals, for example, have borne fruit au that now, iii sonic. instances, there is enough to meet all critical needs and to leave a certain amount available for civilian purposes. I would not suggest that we are on_ tho verge of a general casing of civilian supply. The paper shortage baa re- ccntlv become more stringent. Food supp ies are nnt apt to become more plentiful for some time, Cflififllflll)" in view of international relief require- ments, and in agriculture and forestry in particular the shortage of manpower remains acute. But here and there arc some signs of rclicf, and problems in- volvcd in the relaxation or removal of controls are beginning to arise while we aro still in the midst of a. full war effort." Favour Orderly Removal of Restrictions "All of the wart ime controls were im- posed to deiiheithcr with iartieulur shortages, or with the gcncra shortage of oods in _rclntioa to purchasing power. In this latter category are i_n- cluded the price ceiling, an the special measures of war finance. It seems evident that wartime controls should lac removed as the shortages they were ilesigned to combat are IClICVNI and overcome. A few specific controls have been relaxed alrc . Many others may well be relax before the auri- render of eur enemies, while still others may be needed for vnryin riods after the close of hostilities. or example, the relief drain on our fopd supplies m-y. an" the I I 0 seine kinds of food rationing. Further- more, it is possible that the threat of inflation ma remain for some time after the fig ting has stflllllcd N"? l" such circumstances pncoyontrol might be one of the last to be entirely removed. 1t seems to me that the emergency controls should be removed when the sins ricy has _ an that any wartime controls which the Canadian poopls Il1l¥d0ll|f8 to perpetuate shoulid ' arhrimeatasnewmsasures. Socialism Not The Answer to Full Employment "Thgrg l; today a great deal of dis- cussion about the importance of full As was to expected Iientl of the war in 1043 continued to employment after tlis war. No y is". rag "lysine-mm; "_is rcgimentatioa but we do accept. it— political, economic, and social. Shall we be repared to pay the some price for ful employment when the war is over? Shal we have the saine unity of view’! There are alresd divergent opinions m! to how full emp oyment can be approached in the postwar period. fhcro is the view that _he_ stats should do the job through socialization of in- dustry and trade. On the other hand, thcro is the more realistic o inion, that private enterprise shoul and can achieve the greatest possible measure of pro ress, the state confining itself to suc _ of assistance or restraint as experience has shown to be desirable. To approach f ul-l employment overn- ment and free enterprise will ave to play complementary and not conflictin roles. For if Canadians fail to wor together and waste their strength in social conflict, there will be no hope of attaining the better society which is ilesiredrwe shall get the sort of ost- war society which we deserve. f we do some hard thinkin now as to the ways and means of ac 'eving full em- ployment we shall have s reasonable chance of approaching our objective." Urge In Build and Take Risks, Natural to Free Men "I do not wish to suggest that government has a small part to play in the transition to peace. Its role is s. vital one. There is the major task of providing a greater measure of social security which, in addition to its direct advantages, would have some influence in checking economic depressions. There istlicjobofmaintainingsuchs ' ‘ion of trade and industry as may be re uired to protect the public interest. ‘here is the whole sphere of monetary and financial policy. There is the matter 0f providing emergency employment in the transition period through public ivorks and other means. 'l‘hcro is the complex and essential job of determin- ing our trading and exchange relation- ships with other countries. beve all, there is tho job of helping to provide conditions in which individual initiative can best. do the vast work of production and devclopmen‘ f which it is capable, and which indeed is-an absolute essen- tial to our post-ivar welfare. But the point. is that. government can only help, and it will he ahlo to hclp only if it is motivated by an informed and active public opinion. Basically we must depend upon those qualities of resource- f ulness and self-reliance that have al- ways been characteristic of the Cana- dian people. The desire to im rove one/s lot. the urge to build an eon- struct, the willingness to take risks, these are qualities csscntinl to economic progress and natural to free citizens. Need for Agreement on Mouetn y Stnlilliutlon “In the international sphere, there has hccu an increasing amount ef thought and discussion directed to post-ivar reconstruction. One of the most important developments is 1I.'| the field of monetary stsbihzation. I_do not wish to attempt here any evaluation of the merits of the particular plans ‘iftlllflifid by the monetary ex rts of i'itain,the UnitedStates and anada. Indeed, ' seems to me unfortunate that cm hasis has been so largely upon di creaces in detail rather than upon the fundament ‘ roblsms with which all three of the p ans are designed to co . These planssro designed to provide for the countries of the world sufficient resources of foreiign exchange _with which to start the ow of international trade after the war; to establish a means of dete ' ' the exchange rates at which the flow shall _be re- started and of achieving and maintaip- ing a maximum degree of stability in rates over the longer term; and to set up what is csseritially _a short-term international credit machinery desi ne_d to meet short-term maladjustmen 111' the accounts of the ‘ "' nations and to provide time and technical assistance to make adjustments of a morafunda- mental nature. The necessity of achieving these ends in some wa is obvious to all who remember the 'fii- culties and chaos of the thirties-—the losses of international liquidity sufiercd by some countries, the instabihty_of exchange rates and the increasing attemptsjo solve these problems ‘ v ‘ ‘ ‘ ‘monetaryandcredit bargaining.” Should Reduce Trade Barriers "Agreement as to monetary stabilisa- tion would be one very important step toward reviving international trade ln an ‘ of _ ' and free- dom. Other steps wilf also be necessary, among which perhaps the most un- p01 taut is agreement as to commercial licy. Though the necessities of war ave temporanl pushed aside some of the barriers to trade, the whole ma» ehinery of trade ‘ " remains. Unless plans are made soon to reduce and eliminate trade burners, we _may find that the channels of international commerce are again clogged when the war is over. The announcement before the end of the war of plans designed to reduce im iuients to trade would be a positive aid to reeonvsrsion. Further- more, tlis chances of reaching agree- ment on such matters are probably much better today than they will be ii lave alsatigfacgory standard of living. e co ossa vo ume of our trade toda is no measure of what it may be whsh the war s ever. Then, instead of an anlimiteil. demand for industrial pro- ucta an: raw materials we shall have to meet keen competitiiin particular] in those spheres of production to whic war has added so much additional capacity-capacity for beyond the bounds of any foreseeable domestic market. The fullest attention should be given, and given soon, both by busi- ness a_nd by government to seeking and planning for opportunities for post-war trade Need for Positive Immigration Policy “Consideration must also be given to the subject of immigration. There is a r r misconception in Europe and Asia that Canada with a population of only twelve millions makes poor use of her igantio area. The fact that so mucli of the Dominica's lands are be- 'ond the northern fringe of effective uman settlement. is not alwa s ap- preciated. Yet when this act is re- gnizcd, can anyone believe that Canada with her vast natural resources of land, timber, and minerals could not support a larger population? Since the beginning of the thirties, when like other countries under the influence of the depression, we adopted n negative att-ituc c toward immi ration, little thought and study has been given to this problem. The benefits of immigra- tion from a. Canadian stand oint. seem to have been almost ovcrloo ed. I am satisfied that thcro are real possibilities or‘ selective immigration and that our policy in this regard may have a very important bcarin noinic welfare. '1‘ llS is surely a. subject on which Canada should have a posi- tive and constructive rolicy, for men and woincii of the right. typo are the greatest asscts of a nation and there will be multitudes wishing to leave, or already uprooted from, the lands of their birth when this conflict is over. Farm Population Needs Replenishment “Another matter of great importance to our post-ivar welfare is tlis main- tcnance of o. healthy and growing agri- cultural community. In large measure this is an international problem, as all those who have followed the prices of wheat, or for that matter, of hogs or steers, know full ‘well. In this regard, it. is encouraginito note that a serious attempt is new ein made to develop the means and the wi lfor consideration of agricultural clicies on an inter- national basis. or Canada, a prosper- ous and active agriculture is essential to economic progress and to a well balanced economy. In my opinion, Canadian agriculture has by no means reached its full potentialities of‘ develo meat. The war has inevitably cause a very serious drain of population from to a degree of industrial dcvelo meat, some of which it may not prove easible to sustain. Replenishment of the farm population after the war will help to restore a better balance between agri- culture and industry and should make a significant contribution to the solution of our economic problems." Banks Have Measured up to Responsibilities “Before concluding I must refer to that section of current political and osal of nationalization ef t io banks. ‘ith the General Manager, who will have more to say on this subject, I am convinced that the banks are perform- ing their functions effectively and with a. proper sense of their res onsibiliti to the Canadian public. t is worth remembering that nearly ten years ago a Royal Commission on banking and currency int ' ’ criticisms then being made of Canadian banking prac- tice and theory and avs the banks a clean bill of hcalth._ t the conclusion of the hearings Sir Charles Addis, b of the C ' ' and afore- most British banker regarded the presentation of the banks’ case as worth? of the following comments: ‘ am proud of my profession. You have been subjected to e searching questionnaire and ou have given us a straight reply. ou have refuted one b one t e many ill-informed and, may add _ia some cases, malicious charges which have been levelled at the banks, and you have done so with a dig- nity and with_a moderation, and with a frank sincerity which com- pols conviction. I believe that 'our document will stand historical as a “ ‘ of tho f‘ _Ban ing System and if this Commission, in my judgment, _has _done nothin more than elicit this response would not altogether have foiled in the task allotted to it.’ You will remember that as arcsult of its studies tho Commission did recom- mend the creation o_f _s central bank with aview to ‘ the‘: ‘ of monster policy and exercising con- trol over t e_volumo of credit. That recommendati was carried outb the Government, but strangely enoiig the banks continue to be arged with the misuse of powers over credit which have believe that the other arguments used to on our future eco- in the land and at the same time has led C economic thought; sponsorin the pro- P05 been centralized in the bands of the u Bank of Canada since its inception. I e justif nationalisation of tJis banksare o? yill-Ioundsd. Wbantlieaetlvitlas o thebaaksareapinoonsideredb a public committee, as they will be _w_ en the Bank Act comes up for revision, 1 am satisfied that. tlis verdict will be essentially the some as that brought own ten years age." General Manager's Address After revlewln the Bank's Annual Statement, Mr. .D. Bplrns, Qeperal would ha been ' d t Ions to drvise oi: s olilrlhbfildeflwubk- Two Big Jobs . "The additional work taken on by the banks as a direct. result of the war is both substantial and varied. One of the firltéaimpéahrgaint new 'obl was tart o _ trol_' a.rd in the extensiire system Sf ftlfelgutefiliian ieeirlitri: which the war necessi a . 1 , gltdttffhlilfig, aria-iii; eilzsuftn dipdnllli; "Reverting to the subject of tbs refundable portion of the excess profits tax, to which I e reference when reviewin the Bank's statement, l should like to make the general observa- tion that while the Government is not obhgated foxy such 'on until two years after a end the war, earlier repayment would often be most helpful in the process of reoonversion from war to peace. While the Bank is not directly concerned, some businesses will av_o very sulistant’ ‘ expenses of a capital nature, and I can think of no more appropriate use to which the excess profit refunds could be put than to stimulate and assist the re-est-sblicb- merit of industry in peacetime pursuits. It is scarcely ne to add that the prompt removal of the excess profits tax assoon as the emergency has p will be a most important factor in bringing about a revival of private in- vcstment and enter rise. No single act by Government will do more to stimu- late a. return to peacetime activities, for, while the excess profits tax is an appropriate war measure, delay or doubt concerning its removal would leave a most formidable barrier in the way of new investment and en rise. And let us remember that removal of the excess profits tax and reduction in the minimum effective rate of the corporate income tax does not involve anything like the loss in government revenues which might appear at first sight. Tax on wt, ‘ represent _ removed from the productive an distributive machinery before they ch the hands of the shareholders and wners. ‘If such taxes are rem “ and owered it means that more taxes will collected from the final reci ients of income t' a‘ the persona income tax which when equitably enforced, is considered to be the fairest means of obtaining government revenues." Nationalization Proposal Discussed “Nationalization Lof banking has re; ‘ o II agent-Wis‘ ‘ m, Corporate Tax Problems ftlbllttuflrezuitgglvfnscmelslslv im- to the _ d the baadlin and com letion of tbs various requi forms. n the early stages numerous problems were encountered but it was not long until the new rc ulations were functioning smoothly. ork in connec- tion with the sale of Gove. ‘obli s- t1 fi:._____i It o ‘eaciaad above all the llllllté to ju_ character. The aim of each anadian bank is, and always has 5W1. to develop and train men to laud money successfully and useful! . Iend- ing money is the bread and gutter of the banks, and any bank unable to do sqeffectively would atagnate. It is axiomatic that when loans increase the banks‘ earnia are higher and that when the sci-ease their ings shrink. T s comparatively low rate of return on investments is a werful added incentive to keep up an expand loans. No bank camafiord to adopt a casual or eloof attitude toward its leading business, _for it must face eon- tinuous competition both from other banks and from other financi tions. The penalty of undue _JA_QE._UYIFZ ...._ lav MEMORIAM .Ml. roam aoaaar noes In the early m m5 Novembe 3rd, 1H5, fully awn atnls ham Rlliéejl, MzliJohurzfiobvrt. of the Lateyelgdiiald Dlfitsfifltl! Marirsrlgt Mficiéfiodultoss. . oss v 115' old homestead aiid 1 we on tho loss of a good customer or a poten- l ‘ h‘ ‘ he tions to the public has been anot er of the important and continuing war- time duties of the banks. The great majority of suhscri tions to Victory Loans are handled by the banks, in- cluding rcgistration as to principal and distribution of the bonds themselves through the branches. This creates an enormous peak load of *‘ ‘ i‘ " work at the flotation of each loan, and is accompanied by the fullest effort on the part of the banks to further the sale 0:‘ such obligations. 1n this respect, I should like to say that the banks regard the furthsranre of the sale of Victory Bonds and Wai- Savings Cer- tificates as one of their greatest responsi- bilities/Pherearenpbetterinvestments. They “speed the victory,” which is the absolute essential of our f ulure welfare. As s. protection against inflation they aid the post-war transitiomAnd they provide the utmost in security for the purchaser." Other Wartime Services Show Flexibility of Banking System “Among the other special wartime work of the banks is the continuous sale of War Savin Certificates and Stamps, both of whic are now availablcrover the counter. Ration coupon banking is another ma‘or wartimeservice. Throu h the use of the banks’ facilities t e Government has been able to make s. substantial saving of manpower and money in connecti m with the handhn of ration coupons, some 50 million o which may enter circulation every week. Ration coupon banking has reduced the number of operations inci- dental to the circulation of these coupons and has relieved the Govern- ment of the detailed work of receiving cently ‘ a , , discussion. Mr. McLeod has already touched on this matter and has ex- pressed his thoughts in regard to the res cctive places of government and ividual ente rise in the ,. ‘ economy. With iin I would emphasize the importance of encouraging and utilizing to the full the vast construc- tive power of individual initiativeas one of the chief implements in building a. better post-war society. Individual initiative in the economic as well as_in the political sphere is an essential _in- gredient of_the_ democratic _way of hfe. Nationalization of banking or any other service or industry is not an end in itself. Its justification e_r lack of "ustification lies in its potential results. et me review the facts as I see them." Volume of Credit Eflecllvely l‘ " ’ by Gov “la the first place, those who advo- crito nationalization frequently stress the desirability of overnment control of money o ti because financial matters are so important in theeccnomic welfare of the nation. The desirability of such control is not questioned today: it is already in existence and function- ing smoothly. The Brink of Canada, which is entirely owned by the Govern- ment, controls the cash reserves of the Chartered Banks, and I can assure you that it_is a close _a.ud efiective control. By tins means it exercises the sole authority over the volume of credit in anada. In short, the ultimate power to expand or contract the volume of credit is not wasted in the Chartered Banks but in a_ government-owned aul’ oration which is c by statute wit the duty of directing monetary policy in the best interests of the nation. Although current events have provoked a wide public intorestjn and study of monetary mlpehcy, which, of course, is highlydcsi s, unfortunately, the impression still rsists that the chartered banks wie d a power over credit, which, in fact, they do not sass. “Furthermore, the functions and powers of the_ Chartered Banks are clearly defined ll_1 The Bank Act. That typicall Canadian piece of 1e islation —the ritish, for_ example, ve no special body of legislation for banks as such-specifies what the banks may do as well as what the may not do. Every ten years The ank Act comes up for revisiou_when it isjthoroughly considered section by section by the elected representatives of the Can peo le and amended as may seem de- sira le in the light of experience or b " "'" The Act thus establishes the manner in which Cana- dians belicve that banks should p in their country." Banks Rise to Wartime Responsibilities “In the second lace, it should be om hasizcd that _t e banks haye not fai ed to give their full and active co- operation to the central bank and to t sGovernmentincarryingoutnational policy. This has been amply demon- strated during the past four critical years, not only by the direct financing of war industry and governrn , but also by the variety of new and complex ‘ ’ ' ' ks which the banks have taken on in a spirit of whole- hearted oo-operation. For this the Canadian banks expect no special credit; it was their clear duty an responsibilit , and had the failed to respond to t e call of war t ere would be reason for censure indeed. _But. in all fairness it should be recognized that they have r "' ’ splendidly, and have done everything within their power to further the prosecution of the war. As a banker it II a aource_of satisfaction to me that the Canadian banking system has proveii sufficiently flexible and stron to assume new and nt tasks an to rforin them ciently at a time w en manpower has been scarce and alternative means sdranfi d resultant direct loss to the bank. To and checking them, aswell as of keelping the yindiviilual ‘ .' h again, the distribution of milk and butterfat subsidies is made through the banks, involving a largo addition to the work of some Branches. I might meri- tion a number of other wartime ser- vices, such as the work for the Custodian of Enemy Property in respect to the accounts and assets of enemy aliens, or the vast increase in banking services for the Government. I have probably said enou b to ' ‘ ‘ the tremendous volume o direct wartime work that the banks have been able to perform. This record shows how fully the banks have measured u to their wartime responsibilities. t should be added that they have dono this at a time when they have been handicapped by the loss of experienced male personnel and the necessity of training many in- experienced, though willing, women as ,_‘ ‘ To give you some im- ression of the scope of this problem. Imay say that in 1938, the last full year prior to the outbreak of the war, some 80% of the Bank's staff were page ‘workers while today the figure is 4 s. co s Present System Safeguards Deposiiors “In war as in peace, the banks have continued to be mindful of their basic Wasibilitiea to the Canadian peo 1e, ch I light enumerate as the profs t-lon of their depositors the providing of bank credit to all credft-worthyapph- cants, and ‘generally tho provision of efficient an effective banking service. The prompt and full repayment of any bank deposit is taken for sated in this country where there has n no failure for two decades-a fact which is of prime importance in the IIIBIII- tenance of confidence in our social and economic structure. The Canadian banks number on their lodgers more than 5 million deposit accounts belong- ing to people in every walk of hfsand in every income level, and to businesses and institutions. These people regard their deposits as cash and in cod cheques against bank deposits are the principal means of payment in this countr . It is small wonder then that The enk Acli_ and the_ tradition of Canadian banking practice lay rest emphasis on the protection o the de oaiter. Because of this responsi- hility the banks have never been per- mitted to make mortgage investments and have generally confined their lend- incggctivitam to the relatively short-term Banks are Anxious to Loan Money "Now let me say a word about bank lending. Some of the proponents of ationalization suggest t iat the banks are unduly conservative and sometimes unreasonable in their attitude toward prospective borrowers. make no claim that the banks are infallible. There are some (11,000 bank managers across the Dominion and now _and ein mistakes are made; Sometimes t e manager may bo unduly ca‘. ss. On a matter of judgment (and lendin can_naver be ueed to a. echanics basis) one may_ not _alwi_iys weigh correctl _ the considerations involved- the app icant's proposal, hisrccord and his cter, his security, if any, and so on. But do not imagine that the mistakes are allon the side of undue caution. There is the other extreme- of too-free extension of credit with cite and harp on s. few instances of refusal of credit duo to undue caution, or, on the other side, lack of prudence on the artof bsnkpfiicialsin making loans, oes not constitute an indictment of bank lending generally. ‘The fact is that the lcndin of money _is a difficult and_highly ski ed occupation, and the ability to do it intcl igémtly is the highest attribute of tho anker. It is not an exact ariencc and cannot be learned from a text-book. Itinvolvcs a knowled _of business practice and of the con tions peculiar to the locahty. som ' , 5°25! ovanssas i imsw was mgr-rm w o“ emu m mum a hnmusuaeming interest-lac or 1n- "nm “IE!” w‘ x “tom” Mend: will re d m" 111%" from ljourvnusband met at the hllns Th?!’ mo“ i? nligeill wnghlllllaflm Th‘ "m"?! ‘New! l" the “mi the message hfe mm m. h." hi but l know friends MaeNelll for that 1i 1d m - ab?!‘ mu n North Wilt-shire Women's institute. “Md recently by is h n‘ in“ I "w m' creme a word of ' H8. hills and “m. e a ‘t n10 n1:- m- "mmmi, was held at the home of Mrs. Wm~ Y M Keiisl n P of" m’ ‘if fr"? iruldyssis iron moss mowers Wm * on " safaewiili‘ akktéldarfb send Ovsdv- In the “WM s‘ "w m‘ n, taiwa’ aka‘ i2 ii: o iiisifi rsonslly iths vresldem presided and mo? vm th Cards to two bereaved sldwt the Vlce-Prflldeltf P'°“‘d°°~ we '1' llilrs. CassleyL ' '11.“ W “ell ura veil: trul ' . mectlns was opened 1n the usual Iimlllvea In one of the districts Al"? m8 "K111" mull‘! u“ N‘ lir m" mflltly i had tho m ° i‘ i. ‘i-‘ox. wav. Mlnutee a isst meeting read Also all articles rsrkas mrts or committees Wm Ive"- isfi,“ "was your husband mm‘ l ia- ec- nh receiver! or and unmoved. Uflilnftlbes a ov s are to oe handed in The Red or: commlltee re- “ of Decanter. He was on m‘ air-am one. e1 ‘r l ren lier husband ed were: Rusleo stat-Mum within the weekimd packed at Mrs ported the following wort: com- iin‘ “m his mu n, °“ ' ‘ ” rf° c sel m stated inst a Miss Rose minim isimi- Fltanfngs on Tlillrldlw atria Mew- eluted for the veu-aa aullts. 11 l e imam“ I "It! th Ieli . ‘ I ' ' aired its name Mrs nest Mellie and Mrs 01a! bers are asked to oass 1n article's l "men's socks. 1 army scarf,‘ few ‘m! he mes for that Mr. Ealston as ‘id Rasrswv-anmn . r t‘ .0 - v I fi w“: “Hy w", 1 fir?“ ‘M ‘"4 Mfg ti?" iifiri and on hunfmr" speuoflsinriur c.‘ Cavendish sick-Mrs a sirnpssn oreiiiixiisvi Ftll-nfllciifngl-OO reccivwl a‘. ' rs chlhlrr fr; all" mi" Blinds H ad" t- gnliadfllgrps dtlstililtnnlt was sirrelyland Mrs. Green. Cavendish school- this meeting. ' I j .- ‘1 - -] llfffifsy- ll I aln the . w ' ' V with a re- Mrs. Lorna Neill and Blanche ch was served and meeting Horns. Aitci" tic husucss we I011 and lookxflt. 0dr‘! H. ‘a l fflon‘ Wyaud. IQ} h oloasn Iltb the National Anthem. lcomplete-il the meeting closed with- ' in; “aanmrsafrsra. was served bv the cons-times as- sisted by the hostess. STOURBRIDGE. England-JG?) - Elr Re n'.\i'l Bennett. vice- chancellor o the Pi-tmrisc League. nation-wiry (‘onsewatlvc- party organisation m Britain. died here recently. He was 72_ and had been egrsrliclatea with the league since CsuarlaTs 230 n: u ril employ- ment olflce= will be ct lucstlmnlilc ""'~ l‘\ fliitlliiz stilt-tel.“ jobs ln from war to peacetime production. “than; a 4 _ . r is t pubhc‘s basic protection and advantage under a competitive system-factors which would no lon er exist in a. nationalized system. ‘hero should be no illusion as to the kccnness of com- petition. Failure to meet what the customer regards as a legitimate dc- mand often leads him to change his L ' " ' he will g0 ‘ " the banking system to a. trust company or to a finance company or insurance company, all of which have money to lend _i_n their articular spheres of activity. A good account may be easily lost and if a hank does not meet current competition it has small chance of holding its position and maintaining its profits." Competition Versus Monopoly “Competition ensures a fair and reasonable hearing for prospective borrowers. Competition ensures ood and efiicient banking service. Ban ing practice and tradition ensure safety for the depositor and privacy in the cus- tomer s personal affairs. Existing uv ‘ regulation and control en- sure a consider ’ ‘ _y and e 't olicy sensitive to the country's chang- ing needs as determined by the national authorities. As matters stand today the public interest is protected both bj government regulation and control, b3 competition and by banking practice and tradition. Nationalization of the banks would remove the V913! im ortant element of competition an su stituto e. government monopoly. What efiect it would have on banking practice and privacy in the customer's affairs is a matter for conjecture. However benevo- lent and well-intcntioned such a menqpoly mightbe, the Canadian public woul have to accept its decisions and would have no recourse except through the ballot-box or political influence. I cannot believe that this would b0 an improvement over the existing state of things where the Government exercises supervision and control over monetary po icy generally, but leaves the par- ticular _ conduct of banking to ten competing banks." War EEort of llie United Slalel “In the year 'ust ast our good neighbours, the States, ave succeeded in ‘ ' g much of their vast potential power into actual fightiri power, with rmults for the cause o rcedom which are apparent for all to see. Their arms are moving to every battlefront of the world and their fight- ing meu are glaying a great and vital part both in t e war against Japan and in that against Germany. The strength of the armed services of the United States is new reported to be 10,000,000 and the peak is not yet reached. The war expenditure of our ne" bbour is estimated to be in the neigli urhood of $90 billions in the current fiscal year and the estimates recently released place it at approximately the same level in the coming fiscal oer. he ac- complishments of the nited States are an inspiration to the free world, just as they spell disaster to fie mad aspira- tiens of those who would destroy us.” ‘IX-flute to fie Stal "In closing I wish to pay tribute to the loyal men and women of our staff who zealously, but without ostentation, have measured up l0 s lendidly to the extraordinary de thrust upon them by the war. he loss of experi- enced personnel to the Armed Forces has been n serious handica which has - only been overcome by a. iglily com- mendable devetion to duty on t e part of our senior officers in training of new personnel as well as in tlis exten- sion of their normal duties, and the earnest application of new recruits- for the most part oung women-Jo new and strange tas s. Durinfitbe past year 151 members of the Ban ‘s staff joined the Armed Forces and we new have 851 of our oung men and 18 of our young women in the Services. our male stsfi of military age 59.4% is now in the Armed Forces. I am proud to report that three of our officcrs, in addition to the one mentioned a year :50 have been awarded the Distinguish Flying ross. At the lust Annual Meeting we re- ported that since the outbrea of war eleven of our men had been killed on active service, four had died in Canada, four were missin and three were prisoners of war. t is with profound regret that I have new to re ort. that during the past year sixteen o our men were reported killed on active service overseas (including three who h previously been reported missing), that six more were missing and that one was I aria-aha: of ivtu. A’. the end of 1N3 therefore, the Bank'u Honour Roll showed 840 men and 18 young women on active service, 27 men killed on active service, 4 died in Canada, 7 missin , 4 prisonersmfxnr, making a. total o 900. To the gallant "oung men and women in the Armed rvices we all wish a safe return to their homes with tlis assurance that a warm wal- come awaits their return to duty with us. To the families of those who have made the supremo sacrifice we tender our sincere and heartfelt sympathy. Our total stat! numbers 3,014. This ls an increase _of 181 for the year, regresented entirely by young women w om we have taken on our emergency stab’. We have now_1,753 women in our service compared with 1,384 a year ago and 487 at the outbreak of war. o these men and women, and for the part they pla in Canada's wartime econ- omy is us our full appreciation, which I we come the opportunity to new pub- liely acknowledge."- TmTiiZF-C-iiiiiin Raret. Mlrjs. Oscar deceased were bearers were: Louis overseas with the first Contlngen ' Faloonwood Hospital a r Arm-lo Shore. fi early a s33; m: al inatitu. “Y 3'5"‘- "t b"! V .- i, mufinslways be sauna in all mo- to mourn his and four sons. Sgt. Donald t’). If?! I. Highlanders ln B. C»: Elliot Can- adian Army, England; Malwlm and Robert at heme. two sistnrp JIJIB. Mrs. Rice. California; Maj-- Jnwy s A Musstnau. New . . . .; one sister, , Wilson Dre-deceased hlm. Sea-vices were conducted bv hi] P8500!‘ REV- E- C. Evans assisted 17y Rev. W. B. McPliall of Belle River United Church. Favorite hymns qf "The lord's M; Shepherd." Forever with the Low and 'I'he Sweet Bye and Bye. Pall- Ross. Al der Compton. Charles Icons, M. Beaten. J. R. Ross and Wiii. Martln. He was laid to rest. in the family pllot 1n Belfast Cemetery so await t e Resurrection morn. 2 3 n (Patriot please copy.) In Memoriam sea‘. ALI-aim norm Mr. William Dunn o! Elmemld has lust received the sad news that his nephew Sgt. Alfred Dunn oi! 1d had died or wounds re- the war and after training some time 1n Woodstock. N. B. went Llanndian t. His is a ijecoriljrrhic hath no man than he who will 1w down his lite ior another. Sergcanll Dunn was one of the most congen- lal and unassmni He was a true friend and had I. kind word and a cheerful counten- ance for every one and he leaves host of friends amoru all classes was the son of the late Joseph Dunn and the late Mary Jones and lied the misfortune of boy's best friend hi Mot-her at the of young men. 105mg I. slx years and his father and one sister Mrs. Wilfred shield Rose Valley. P. E. 1., and two ha brothers. Johnle ln Italy and Maur- lce Somewhere 1n England. A bro- ther James Dunn whose health zoke clown while training for i g Arnw. a. few months s20 the Charlottetown Hospital. _ The sympathy of a lame circle 113i’ friends gees out to the bereaved fl ‘Y. ABGYLIJ SHORE AND VICINITY Mr. and Mm. Donald IvIGCPIIB-IL Argyle Shore spent a few days guest; of Mr. and Mrs. Aubrey MacPhall. North River. Argyle Shore School ls cro- nesslru satisfactorily under the cabs-tile mans/serpent o! Ivtlss Rita. MaeKay. m". W. A. Seller of the staff lies return _ to his duties after spending a few clays with his wife and family. Mr. and Mrs. J. A. MacDouzall have received a cable from their son Lloyd of Merchant Marine an- nouncing his safe arrival. Mr. John MacKlriley. Nort River. was s recent vLait/or to M a and Mrs. Waldron Seller- Mrs. Foster MaoPhail. Amide Shore. has returned after Seendiril‘ a few days with her parents Mr. and Mrs. Good. OOIIWHII. Mr. Neil Campbell. Elmwood. w scent visitor to D§able an Mr. Neil Meebeuttall and Mr- Abner Caxripbell ware visitors the city. In Memoriam MRS. ANGUS MacUONALD The death sock ell-c M Rha- Baker Memorial HOSPHH- BWWIN Mass“ on Jan. 30m of Stirah Murchison Macaonala 9 Beecher Road. Brookliiis. Mass, wile of Angus Alexander Macdmalc. aired 59_ The late M45 MactZ-siinld was n hter of Peter Murchison and. Iii Inla. Gaunt-bell of’ Prince Dd- wsrd Island. Death was caused by cerebral hemorrhage. The funeral service; to be held Feb. 3rd ln Clarendon Ell‘ Presby- terian Cliurr.lt_ Pewtlcr House Boulevard. Scmerville. Ivlass. 1n- terment in Lliinwoed Cemetery. Weston. Mass Surviving members of the fam- fly are sisters - Mrs. Gerard Hop- klns. Bar Harbor, Maine; l1l€CP< Mrs. George P. St: nc. U. S. Alr Force; brothers — John A. Murdilson Sydney. 118.; Simeon A. Murchison. Murdock Murchi- son. Vancouver; Joseoh Murchison, Canadian Arm‘. TORONTO SCHOOL rt of “fiimmn School" fol Rape the month of January. Grade IX-I, Anita Dolren: l, Marie Crockett. Grade VIL-l. Ines Dolron; I; Mona Gallant. G e VIZ-l. Jennie Dolron: I Valcrtc Blacquiere: Atllwi Delron - Grade V.—1. Arnold Gallant; I; Raymond Ga . Grade IV.—I. Hazel Del . Grade IL-l. fiederl Die- aulere Grade I.-No tests. ~ Years Ago tBy The Canadian Press) FEB. 3. HMO-Gannon bombers 1 raided shipping on Brltefn‘s cast. .coast. Italy announced plans to i double its alr s rcnzth during 1940. - Brltlsli War Secretary Stanley dc- , clarrd that tlic ivni" mus“. 51o on difficult period cf conversion , until Germany's military powci- was ended- Pcrfect attendances-Anita Defies-p Inez Dali-on. Jennie Dolmn. Ron d ,Pcters. Eric Peters. Hazel Dolron. Maynard Gallant. Lorlna Peters. Irene l; iieettc. Agnes tron. Teacher-Helen Gallant. "Ilnrnzolovmcnt Insurance l: a rlwlce to ornteet the \'-"‘l‘l{lt1" man "lien r!- ;= unemployed" - R. P Hartley. K C.. Maritime Region- at aupertntendent.