Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-01-18
.CANAD|ANF |NANCES
MAY Be INCREASED
Short-Term Loan Forecast
to Offset UnfavorabIe
Trade Balance.
BY JOHN F. SINCLAIR.
l Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, January 18.-When
asked the Hon. Charles A. Dunning
Canadian minister of finance, why
Canada temporarily left the gold stand
ard, he replied:
"Canada's position on the gold stand
ard remains the same today as in past
years. No change has taken place dur
ing the last six months"
Apparently the confusion regarding
Canada's position arose in overlooking
the Canadian statute of 1915, which
authorized the issuance of $4,000, O0O
of currency without gold reserve.
If these notes are not taken into con-
sideration, Canada has more gold re-
serve than is required under the law.
On November 80 last the Canadian
finance department issued a statement
showing that the total of Dominion
notes outstanding amounted to SILL
$4,000. while the gold held in the
treasury vaults at that time amounted
to $62 1927, 000-over 80 per cent gold
reserve.
While it is technically true that
meet the statutory requirements, the
1915 statute makes a joke of the gold
standard theory.
1t is expected that the Canadian gov
eminent will solve this situation short
ly by placing a short-term loan in
New York to liquidate the temporary
adverse balance caused at the present
time in a large way by the great
amount of wheat still in storage in
Canada, waiting for a favorable world
price.
Canada is likely to meet this prob
lem very soon because the adverse rate
OF exchange. which has been as high
as 2 per cent. is real burden on Ca
madam imports.
Think of increasing expenses $4,000
600 month! That's about what Gov.
Roosevelt of New York has suggested
to the New York Legislature for the
next fiscal year, beginning July /.
He asks for a total of $3l1 1913 900,
as against last years total of 1884,
$4,000.
In a word, the State of New York
spends more money than the States
of Iowa, Kansas, Minnesota, Oregon.
North Carolina. South Carolina, Ken
lucky North Dakota, South Dakota,
Montana, Georgia and Florida COM
bined.
Yes, and in addition, we can add
the total expenses of the States of
Massachusetts, New Jersey, Ohio and
Indiana to the States mentioned before.
Quite a State-this New York!
States expenditures are growing. For
20 years New York has spent every year
a greater amount than the year before.
The one exception was when Gov. Mil
Ter carved the 1921 budget down $lO,-
5000 below the totals for 1920.
But nearly every other State reports
the same condition. Yes, the price of
government comes high.
One hears at times the remark, "Why
develop foreign trade? Let's look after
the home trade and forget the foreign
countries
But the record of the merchandise
exports for the year just closed shows
that the United States sent abroad
$5,248, 483,0 900 of exports, an increase
of $l2o, 1877 900 over the year 1928.
This is the heaviest export for any
year since 1920.
Now the imports, which as every one
knows. are used to square the account
of the exports sold abroad. total 81, 400
634 600, an increase of 5000, 100 900 over
the records of 1928 This, too, is the
heaviest figure since 1926.
The balance of trade. therefore, In
favor of the United States amounts to
$847, 849 900. as against little over
81 ,000, 900 900 in 1923.
Now how do these nations pay the
surplus amount of imports over exports?
Such debts have to be paid, just like
any other debt.
A nation can pay such adverse bal
ance" debtssby sending gold. by borrow
ing money, by selling service charges,
by sending its goods, or by combina-
ton Of all these.
1t will be many years before the
United States will get away from loan
ing money to Europe and the rest of the
world.
This much is shown by the record of
our foreign trade during the past 10
years.
The three industries - automobile,
building and ailroads-consume about
so per cent of the total annual produc-
ton of steel
Steel ingot production is expected to
be about 5000 900 tons less in 1880 than
in 1929. At least half of this decline is
attributable to the decreased activity in
automobiles, building and railroads.
AS farm income on the whole Is down
about per cent over the preceding
year, the outlook for sales in the field
of grain implements is not particularly
optimistic.
May and June of last year were the
big months in the steel business, where
the ingot production was running prac-
tically 100 per cent capacity. This
year. from the present outlook, the
peak operations during the Spring
might move up to 80 per cent, but the
earnings of the steel companies, as it
looks now, will compare more closely
to 1925 and 1927, rather than with
those made in 1925, 1923 and 1929.
The stock market, naturally has dis
counted to a considerable extent such
conditions, but many stocks, based on
the big board figures, are still plenty
high enough.
We were talking, business man and
/, about the frequent occurrence of
price cutting of commodities. When
stocks are large and orders dwindling,
the tendency is to cut prices in order
to dispose of the goods. Then be ready
for the next consignment soon to ar
rive. A turnover-even at a loss!
Its always been so. Many men fear
the future and want to clean up, even
at loss. Some men make it a prac-
tice in business. They never seem to
get fixed price. They do not under
stand enough about auditing to know
what a fair price is for their products.
and as result, they find themselves
eventually out of business" COM
mented my friend.
But what is fair price?" I asked.
What is fair price for one mer-
is matter of good merchandising and
manufacturing. But a good executive
will always find what a fair price
should be and fix it accordingly"
I think it is Ebert Hubbard, who
made this statement:
There is nothing made under the
sun, but what some one will make it
little worse, and charge little less. :"
That seems to be the philosophy of a
lot of people in the world.
Copyright, 1890, by North American News
paper AIji9nce)