Evening star., 1947-12-14
TradeSlunD
Hits Canada
Costly u. S. Imports
Drain Dorninion's
Reserves
BY Brooks Mcclure

By Brooks Mcclure
Canada, which only two years
ago emerged from World War II
with a new show of economic
strength. today is attempting to re-
condition its entire commerce to
Keep from being forced out of world
trade, where the American dollar
is the medium of exchange.
Since November II the country
has been under an extensive con-
troll system. unprecedented in
peacetime, In what represents mostly
= lost investment in postwar Euro
pean recovery. The Canadian Par
lament has voted nearly 1886, ,000,-
600 in loans to the United Kingdom
and Western Europe since the war
but the result has been only q
severe drain Of precious American
dollars, with no prospect of an early
revival Of normal trade.
Gold Reserve Dwindled
Canada had hoped to get more
goods in Europe in exchange for
goods sent there, but instead 1t has
had to continue buying at an un-
diminished rate in the United
States, while the cost OF Imports
from here have risen 40 per cent
since June, 1916.
Because Of the foreign loans and
record Canadian purchases of Amer
lcan consumer goods and food since
the war the nations gold and dollar
reserves Of $1,500, 900 900 at the end
Of ls45 dwindled rapidly to $1,245,-
10000 In 1916 and then to $500 900, ;
900 in November of this year. 1t was
doubtful whether at this rate there
would have been dollars enough In
mid-1s4s to purchase steel and other
materials vital to Canadian industry
from the United States.
Therefore, Prime Minister w. L.
Mackenzie King put all the coun-
try's international trade under rigid
control to save dollars. Using spe-
cial budgetary powers to apply the
program Immediately, Mr.. King de-
creed:
l. An import ban on luxury items
such rs jewelry, candy, novelties,
typewriters, radios, refrigerators,
washing machines and furniture
and on automobiles for the time
being.
2. Quota restrictions on many
foods, including citrus fruits, potA-
toes, apples and onions AZ well as
ban on almost all out-of-season
fresh fruits, vegetables and canned
goods.
8 Quota restrictions also on
leather goods, shoes and finished
textiles.
4. A cut to $3.50 in the amount of
American currency Canadians may
take out Of the country while trav-
cling, except In special cases.
5. Special taxes up to rs per cent
on cars and Is per cent excise on
a wide range of consumer goods in
cluding cameras, radios, electrical
home appliances and oil burners to
discourage their purchase.
Parliament Debates Controls
The import quotas are applied to
purchases from all countries, but
the heavier restrictions are on
goods from the United States and
other so-called dollar countries
mostly In Latin America.
Although these and other restric-
tions in the program now are in
effect, they are not yet law. Parlia-
ment is debating the issue and will
decide whether to keep the controls.
Opponents argue that the move Is
"too late and too drastic" but there
is no indication Of the ANAL de-
cision.
Perhaps the most controversial
feature Of the program 50 far as the
United States is concerned is the
proposal that the Canadian gov
ernment "defray" the cost of extra
gold production for . three-year
period TO stimulate sales TO this
country at the standard rate OF
435 an ounce.
Finance Minister Douglas Abbott
who announced the program by
radio TO the Canadian people on
November II, cited the higher cost
Of gold mining and recommended
that 81 be paid by the government
for each hne ounce produced over
the output for the year ending June
30. 1947.
This bonus plan has been dis
cussed critically in the National Ad-
visory Council, a group which super
vises American economic policy, and
It is expected to arouse opposition
In the United States If Parliament
acts on it.
u. S, Officials Concerned
The official value of gold. 1t is
pointed out, is set at $35 an ounce
both by the United States Treasury
and the international Monetary
Fund, and Canadians would be get
ting $42 under the incentive drive
Whether this would be legal ap-
parently is a question, but in any
case Washington would have to con-
tend with American miners who
would object to getting a lower
price for their gold.
Secretary Of the Treasury Snyder
and Federal Reserve Board Chair
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