New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-06-09
u. S. War Loan
Upsets Financial
Plans of Canada
Arrangements to Transfer
Securities from London to
New York Held Up
By s. ROY WEAVER
Toronto, June 8.


Toronto, June s.
PARTICIPATION OF the United States in
the war is having an effect on Canadian
finance almost the reverse of what was
anticipated. The situation not only Is
interesting at the present moment, but
also affords scope for speculation as to
Developments of the near future.
Temporarily at least, Canada is being
thrown almost entirely on It's own re-
sources, with the result that drastic
retrenchment policies are being en-
forced in many municipalities. The
ultimate effect may be to improve the
financial position of cities and towns
in the Dominion, by necessitating cur
tailment of capital expenditure, and to
develop further Canadian investment
power.
Mr.. Thomas Bradshaw, Commissioner
of Finance for Toronto, stated the
other day that the immediate outlook
for the marketing Of Canadian munich
pals was more unpromising than at
any period since the war began
United States investors, upon whom
the municipalities Of this country have
been placing steadily increasing de-
pendence, are not now buying foreign
issues of this class. On the other
hand, the Canadian bond market is ABB
solutely non-receptive at the present
time and a considerable quantity of the
last domestic war loan issued by the
Dominion government is still undi-
gested and in the hands Of the bond
houses. So unfavorable has been the
situation in both the United States and
Canada that Toronto, which requires
to borrow approximately 100000 this
year, has not attempted an offering
since last November.
The following table reveals the con-
dition of affairs during the last four
years in regard to the sale OF Cana
dian municipal securities:
Sold in Sold In
Sold in Great United
Year. Canada. Britain. States.
1913. S25,S50,65 S67,775,510 s22,135. $50
1914. 25,105,320 33,723,563 25,559,54S
1916. 34,052,677 None 32,455,396
1916. POSSESSES None 33,79s,74s
Public Enterprises Restricted
The aggregate Issue IN 1915 was $685.
1857, or less than one-half the
amount Of debentures issued in 1918,
which totalled s115,761,9 1923. The de-
crease has been steady and reflects the
retriction of public undertakings in
volving capital expenditure. The total
issues in 1917 will be lower than the
modest aggregate last year, but will
hardly be less than s50,000,000, for
capital obligations which must be met.
1t should be noted that the percentage
ratio of Canadian municipal debentures
sold in the United States to the entire
amount of the issues has increased
from 1912 in 1913 to 63.77 in 1916.
The small proportion marketed in
Canada last year is explained by do
mestc participation in the Dominion's
war loans, a factor which will be opera
tive during the current year and prob
ably until the end of the war.
At conservative estimate Canadian
municipalities will require to borrow
in the United States not less than $780,
100000 this year. The Liberty Loan
and uncertainty in connection with war
preparations and war finance have made
1t impossible for the present for Can
adam municipalities TO secure money in
New York. The situation doubtless
will improve so that the loans NAV be
had, although at prices somewhat
higher than those paid in 1915.
In the meantime, however, unnegoti-
ated capital obligations are accumulat-
ing. The closing of the American
money market to Canada is not only
checking public expenditure, but is also
checking building operations Of all
kinds. One compensation which NAV
result in permanent benefit is the in
creasing attention being given 10 the
form of Canadian municipal securities
for the United States market II NAV
not be long before the instalment de-
benture supersedes the sinking fund
debenture in the issues of most Can
adam cities and towns.
Plans Rudely Shattered
Plans for refunding Canadian bor-
rowings held in England by means of
loans foated in the United States have