New-York tribune., 1920-12-23

| while there does not appear to H.
any cause for apprehension, there is
every reason for the exercise of the
utmost measure of caution.
Happily, Canada is we'll buttressed
on many sides, and the exercise ~
prudence and sagacity should enable
her to meet the shock of fallino
prices, restricted credits and defated
currency, without serious imna;r-
ment of her commercial and financial
vitality"
General Managers Address
Sir Frederick Williams-Taylor
the General Manager, in his address
to shareholders, said in part
"AS comparisons are constantly
made between Canada and the
United States, owing to general sim
ilarity III conditions, one ANOMALY
attracts special attention. viz. thar
with credit restriction as acute here
as it IS across the line, the price of
money is materially lower in the Do
minion.
This condition, in days Of world.
wide high interest rates, has attract
ed much attention in other countries
and is regarded as a tribute to Can
ada's good banking system. The one
disadvantage of this cheap money
condition is that persons on fixed in
comes derived from investments face
the higher cost of living, including
income tax, with little increase in
revenue. As everyone knows. the
connection between the price Of
money and the yield on investments
is of the closest.
Credit Situation
with reference to current loans
in Canada, your directors have felt
lmpeIled for many months past. in
the banks and the country's best in
terests, to follow the policy found
essential in every other country and
keep within bounds our advances to
merchants and manufacturers. This
policy is III accordance with the
views Of the Dominion government,
and has been followed more or less
closely by all Canadian banks.
Suffering From Exchange Rate
Canada is still suffering from the
sings and arrows of outrageous for
tune in the premium on New York
funds, which continues an ever-pres
ent factor in our banking and com
mercial activities.
when this condition will disap-
pear one cannot venture to predict.
certainly not while the trade bal
ances run SO heavily against Canada.
Undoubtedly, relief would come were
we to borrow abroad in large volume
by way of public loans, but that
would be merely & palliative, not
remedy. In addition to this, the con
version rate of sterling precludes
loans in London, while, in the United
States, interest rates are penalizing.
The advantage gained in bringing
capital from New York in the pre-
MUM on American funds is offset BY
the loss in providing interest
thereon.
What is wanted is rigid econo-
mics in the purchase Of non-essen-
tials abroad, with an increase in our
own exports.
'It would then be only question
of time when investment capital
would pour into this country of op-
portunities, and the full value Of the
Canadian dollar be restored.
Strong Faith in Future
"In glancing through the published
reports Of our annual meetings Of
the past hundred years and more,
one cannot but be struck by the re-
current warnings regarding the
commercial, financial and economic
outlook sounded by our predecessors
III Office.
Equally impressive is the undevi-
atingly sustained faith expressed in
Canada's future, and in her ability
to win safely through these periods
of imitation and depression WHICH
every country must meet and under
go from time to time, particularly
every yo',ng country. That faith is
stronger to-day than ever before.
Il might add that, in my opinion.
we have never faced banking and
business situation requiring more
delicate handling"