Evening star., 1931-12-12
CANADIAN BANKING
CONDITIONS SOUND
Necessity for CurtaiIing Pub
lie Expenses Stressed
by FinanCierS.
special Disnatch Id The star-

MONTREAL. December 12-Grave
warnings to Federal, provincial and
municipal authorities as TO the neces-
sity for curtailing public expenditures,
and the statement that Canada's large
foreign obligations are factors that
1end to prevent an early return Of the
Canadian d-llar to par. were con-
tanned in the speeches OF Sir Charles
Gordon, president, and Jackson Dodds,
general manager at the annual meet
ing of the Bank Of Montreal
At the S7me time comment was made
on the inherent strength being ex-
hibited by Canada in the face of world
depression, especially in regard TO the
banking structure of the country,
Sir Charles referred to the absence
In Canada of some of the more serious
problems confronting other nations and
both executives spoke hopefully OF the
future, though making it quite plain
that a return to prosperity in Canada
was conditional on an improvement IN
the international situation.
Confidence Needed.
Sir Charles. while declining to
prophesy as to the immediate outlook,
said that, taking the long view, There
is every reason tJ look forward with
confidence to emerging stronger and
more prosperous than ever from the
conditions that now prevail
Mr.. DoddS remarked: 1T would be
rash indeed t0 speak with assurance
of the prospects 1f the coming year,
but it is surely permissible 10 say IhaJ
when international confidence and CO.
operation are restored and commerce
in consequence improves, CANADA VIII
be among the first to benefit
Sir Charles Gordon in presenting the
annual report to the shareholders, spoke
Of the severe recession which had peeh
experienced by business generally
Throughout the Dominion during the
wear. He made particular reference 10
farming, mining and neWsprlnt manu-
facture, remarking in regard TO the laI-
ter that there was reason TO DeIleNe tllat
q better condition was being ushereo IN
by the profit arising from the premium
on New York funds and from consollda-
ton of companies for the purpose OF
reducing overhead expense and ehectlng
more economical distribution OF the
product. He said events had brought
into strong relief a situation which IN
anv case would sooner or later nave
called for drastic remedial measures,
namely the destructive competition be-
tween the two great railway systems
settlement of which on satisfactory
and permanent basis was, he declared,
an aDSoluUE lltCtSSltg AOl IAiC ANVAAN w."
being of the country.
Jackson Dodds. Joint general man
ager, said that Canada. being dependent
primarily on the products Of the farm,
forest, mines and fisheries, and being
one of the largest exporters per capita
in the world, had suffered severely
from the dislocation Of international
trade.
Referring to the fact that the down
ward movement of commodity prices
had reached record levels during the
year, he SAID:
we know from recent economic his
tory in the United States something OF
the importance of a central bank in
maintaining a stable price level. An
examination of the course Of business
from 1921. the years of postwar depreS-
sion, TO 1928, the crest of their period
of prosperity, and the collapse OF the
stock market boom in 1929, reveals that
while a central bank may assist in
controlling the amount of money avail
able, its judgment is not infallible, nor
can it force individuals or institutions
TO use money wisely"
Public Expenditures.
Remarking that we in Canada should
be thankful that we are as well of as
We are, he declared thsre was no gain
saying. the TACT that business had been
at an extremely low ebb, and added:
" The situation can only be aggra
waited by continuing to pile up more and
more federal, provincial and municipal
debts. individuals who appreciate the
need for economy in their own expendi-
lures, and are striving to get out OF
debt, are too prone, paradoxically, to
condone and encourage public outlays
of borrowed money, ignoring the fact
that it must in the end be repaid by
themselves.
There is a definite limit beyond
which public expenditure cannot pro-
ceed with safety. even when the object
Is to create temporary employment In
this country that limit is now in sight
A halt must be called to mounting ex-
penditureS-indeed, has been called in
some cases. The burden of taxation
eats up capital resources. saps energy
and enterprise, and creates still further
unemployment"