Catoctin clarion. [volume] (Mechanicstown, Md.) 1871-1940, 1921-03-17

cans ALREADY nave oh'o" SSe
Invested In Canada.
A recent feature of Canadian-Amer-
lean relations which has not aroused
much comment, but which may have
far-reaching influence, is the readiness
Of American investors to take q mort
gage on Canada and the complacence
Of Canadians in giving the mortgage
More ,than two-thirds OF the bond
borrowings by Canadians. .ost year
were plas>d in the Emitted States,
says TorcstQ dispatch to the New
York World. She remainder of the
cnpital was supplied by Canadians
themselves
NJ the Whole Story.
The anIunts are substantial. Total
bond isaes for railway improvements.
.JHDlic service corporations, private
Industry and municipal and provincial
governments were $31S,332, 200, of
which United States investors took
$2l4, l77,OOO These figures, impress
sive though they are. fail to tell the
whole story of the movement OF Amer
lean capital into Canada.
The situation that is being crea ed
10 entirely new and is result to
large extent Of postwar conditions
AS recently as 1910 the United States
took only 1 n per cent of Canada's bond
issues, aud before 1914 never bought
more than 20 per cent. In those pre-
war days Great Britain was the great
source of Canadian capital. AS the
war progressed outside capital was
shut off and for time Canada be-
came almost self-cOntained. Now that
borrowing has been resumed 1t Is to
New York and not to London that pill
grimages are being made.
Exchange rates have much to do
with this new development. When the
British pound Is worth only ST In
CaEada, and an American dollar Is
worth $i.15, we get In round figures
the following results: $500 in New
York money will buy Canadian bonds
with face value of $575, but 600 In
London money will buy Canadian
bonds of q face value of little more
than $500. If by the time the bonds
mature exchange returns to normal
the New York investor would gain $50
and the London investor would lose
like amount on the $500 investment.
Therefore 1t is not surprising that the
supply Of British capital is being cut
off.
British Capital Vanishing.
What Is happening In fresh issues
In the bond market where pledges are
of public or semi-public character
is happening also In renewals and In
more private transactions. There has
heen In the last year or two ire
mendous withdrawal of British cap
itai from Canada.
Here is case In point: A Scottish
loan company holds mortgage for
$2OO.OOO on manufacturers ware
house In Montreal. 1t happens to fall
due this month. Under ordinary cir
cumstances it would have been re-
Moved with an adjustment, If neces-
snry. OF the rate Of interest. But by
demanding that the mortgage be paid
of now. the Scottish company obtains
n premium of 10 or II per cent I'm
British money. And such a demand
Is therefore naturally made. If the
Montreal manufacturer cannot raise
the 100000 locally, he goes to New
York for It,
The same kind of thing is happen
Ing all over the country. One Of the
reasons given for the collapse or at
least postponement in Grant Morden's
big steel and ship merger, was that
the British investors in the enter
prise would have lost $5.O00,0O0 in ex-
change by sending money to Canada
At "the present time.
Another factor that is helping the
along Is the familiarity of
American investors with Canadian
and their obvious conf
ience In them.
The Daughters of the Empire are
waging an energetic warfare against
the showing Of American picture films
10 Canada and in favor Of the import
ing of the British product. They are
only one of the most super
fcial Of the manifestations of Ameri-
,an influence in Canada. II they want
70 get at the real problem they will
.ackle the infiltration Of American
,apital into Canadian industry as seen
n the purchasing of Canadian secur-
ties outlined In the foregoing, and in
he establishing Of branch factories of
American Industries.
Protection Evaded.
Protectionist politicians for 40 years
n Canada have urged the necessity
# keeping out American imports.
'Capadlan industry for the Canadian
people," Canada for Canadians"
Under Which Flag? have been some
'ariants Of the battle cry to which the
argument lent itself. Sometimes pro-
ectiOnists were asked II they would
,bject II American factories, barred q
~ the tariff, would establish branches
n Canada. Their reply Invariably
vas no, they would welcome them, for
hey would become Canadian and help
,uild up Canadian industry.
II Is doubtful, however, IL any one
oresaw the extent to which branch
actories would be established when
Iana da's development got well under
way. The tariff commission, sitting
ecently In Montreal, found 20
ranch factories where there were
our In 1900. In Toronto, Hamilton,
and other Ontario cities they
ound literally hundreds of American
oncerns attracted by the protection
4 the Canadian tariff. Ireland has It's