Evening star., 1946-07-06
Canadians Peg Dollar
To Fend Off Threats
From u. ). Price Rises
Four-Point Program
Tightening Economic
Controls Is Announced
BY tho As.ociused Press

BY tho Associated Press
OTTAWA, July 6.-The Cana
dian government, in a four point
program designed to combat the
threat of RISING prices in the
United States and to ease the
pressures of imitation. has peggec
the Canadian dollar at par with
the United States dollar anc
strengthened Canada's price
control structure.
Finance Minister J. L. Ilsley who
outlined the program to the House
of Commons last night in a sur.
prise announcement in which hi
referred to the recent abandon.
ment of price control in the United
States, said he hoped the new
measures would go a long way
toward insulating Canada against
unfavorable external conditions anc
easing the infiationary pressures
which now are 50 strong"
HenceforWard, banks and other
authorized agents of the Exchange
Control Board will buy American
dollars at 81 in Canadian funds, in
stead of at S110, and will sell at
81 .00h2, in stead of at s1.1Ol2. Sim
ilarly. the buying price for pounds
sterling is fixed at $402 instead O!
SAB, and the selling price at S4.O4
instead of $4.45. The new rates
became effective at 7 pm. las,
night.
Canadian Firms Lose.
This means that Canadian firms
holding American dollars-such as
hotels. cafes and the tourist trade
will suffer loss Of 10 cents on every
dollar they are holding and Ameri.
can tourists will get only a dollar.
worth for their dollar, instead O.
$ll0 worth.
American investments in Canada
now worth approximately IS ,0O0, ,000,.
600, are worth half billion more
than yesterday.
The price OF newsprint, Canada :.
biggest export to the United States
probably will be increased. 1t is
now SGT ton delivered in New York
payable in American currency. This
formerly meant $3.50 in Canadian
money to the manufacturers, but
now it means $67.
The government is expected tc
permit an increase in the price tc
make up the difference. Newsprin,
sales in the United States now rur
at approximately 5000, 900, 900 a year
The other three steps in the pro.
gram were:
l. Establishment of a long list O,
goods and services which will re.
main subject to price control, in.
Guiding virtually all household
articles.
Subsidies Retained.
2. Retention of the principles o.
price control on domestic products
coupled with more stringent pric,
control on imported products.
3. Retention of subsidy payments
Mr.. Ilsley acknowledged that re,
cent developments in the Unitee
States were major factors in adop
ton of Canada's new program.
Perhaps the greatest threat tt
the stability of prices in Canaos
comes from the rise in prices in tn,
United States. and to lesser ey
tent, in other countries. The rres
ent position with respect to the fu
ture Of price control in the United
States is confused and uncertain.
the Finance Minister asserted.
Prices in the United State
have been rising steadily for som
time and are already at substantial
above the Canadian level when com
pared to the normal or prewar posi-
ton.
In view of the strong Commercial
ties between this country and tn
United States. this trend has nat
urally exercised an increasingl
strong upward pressure upon Cana
dian costs and prices, which we hav
sought to resist or neutralize as bes
we could"
He cited figures showing that re
tail prices and the cost of living in
dex in the United States by May hat
increased 80 per cent over the ieve
of August, 1889, while the CANADIAN
increase was 2l per cent.