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.t confLrence between the A.,der:.1 .ieserve ord certain representatives of the .J.anadian citLtion held in the ofeice of the Joveri.or t 1 1 L:! - ondau, Cctober :111er, .Zr. !)elno,Mr. i1li, ecretary. Jain, Jr. 2resent also,r. .11)ert 'trauss, representin tl 'try Dertr.ent. _Present :1.1.co: of .:ontreal, ,an'y -ir Vincent incj ,;a117er, .;aradi4n :,:ank of .Ymnerce, .ir nadian Back of ._;or.lnerce, ir Join in, Pease, oyal _aril'. of Janada, alls7ers ?reLident Zr.Laarence oert,in Jnion E4r.k of Jz..n4d a. Lcotia. of r. _dchardson, ;r. Pea.L;e stated. that thc urlmse of the intervie that of t,ttinL-; the difficulties of carryinz out the proposed .purch%se of 2.,anaVtan ',Ylleat on behalf of the British governnent ander the eircstances produced bu the present ,7;old embar(,o. It wz.A.s necessary that the Jdian rct..zrn of their funds 7ct from time to time or they "could not turn of cchan.L;e had recently declined fro round". ,A10 coarse par to one percent on New York from Janadian points. If the Board could release a small amount of2;old it would stabilize exchan(3e. The anadian bankers wanted .50,000,000 r(leased for this purpose. This amount aould not be retained in •:anada but wo.ad be sent beck because the Jancadians had an b-lance. Thereupon nfavorable trade r. Pease filed with the Board 4 state- ment as follows: 01: ULITEDST4.21i4'1.;LIBUO oL 02 GUILD. The relation between the cost of ::ea York funds in 1. :ontreal and gold imports to Janada from the United and.s;old e:,Torts from ,anada to the United :,-tates is fairly constant. Taking the year 1913 'or e:ea-Tle, in the first three months of the year :,ew York fa-is reached a premium that period, of 3/32, 5/64 and 5/64 respectively to correct this somewhat unusual premium, appro::11,ately .7.,0J0,000 more gold. coin and ,"old bullion was eaorted. from .;-mda to the United 1-..tatec than a. imported from the 'United L,tatcs to ,;anada. This bro,,at down the rate in the. months immediately succeed1h,3. Towards the close of that year (1913) Lew York funds went to a discount in ::ontreal in the last three months of W64, 6/64 and 3/64 resrectively. The imports of gold from United L;tatcs to Januda in e;:cess of exy,orts of coin and bullion from janada was in conseLoence apDroxitn-tely In the first three months of 1914 Lew York funds were constantly at a pre!Iiim in 1:ontrea1, the maximwn each month being 5/64. The result W4F that there was an e..-,ort from L;anada of ;old coin and bullion to the United ;.;tats, chiefly coin, in excess of counter ship:Aents of approximately -46,000,000. Jonin2; to the :,-4r period, in the latter part of York 2..za,lo dent to 4 2 discoant and for zst, 1914, and 7/C: 0eptember and uctober the ma:_imam discoant .as 1 respectively. The conseiience wz..1 th..t ..teb :J1t,00J,030 r-ore r2old sas ir-.port(d from the -Tufted orted. into Janatia than there aas of 'old coin and H: , fairly be dl• Une conclusion may, the 2. the tabulations on v'hich the foreci that when the cost of 7::ow York finds in from normal it has forthaith been corre,.. in t' 1,he inport or exort of :;old, .as the ox,!se may be. • 7 ?rom the total of the t.,:aalations of ,-;old i7norts la• from, and exports of :old to, the 7nited states hcreith Fabmitted it 12 clear that ;,nada is the dr.)tor nation in the ordinary coarse of basineEs to the 7nit(a 0tat(s. The fi:areb for the six and, three-qir,rterl- years be ,innin.2; JanAary, 1911, and eadIn,_; :_eptcruer 33th, 1917, are as follows: from ,anada of billion prodice ..1ort1.3 of the mines of Janada 9L,067,555 hports of old coin and foreign ballion 61,770,646 01 of gold from the 7nited -7z.Aes to ,Janada d:Irin;; the like period nada to tie L_J.0 of Told exports from imports 7nited 0tates over gold: 174,10,LO1 120, .219 5,j,754,QCL :..,11acla'b adverse trade balance with the United '..tatcs 4. 'or the three years beginning -1,;ast, 1914, .and endin,•r;; Jaly , the c:..1c it is ob0Ist, 1917, is 794,64„5O. This bell-1 g a:.1.yo ;old will flow trade adjastcd in other inless vioas tkn.t as the fires for 12tates jz5t the -hilted anadto back from mentioned in "0" conclisively years and six threelaarters the ordin. .ry coarse of the throa_;:h '2anada, aords show. In other C.,tatt: and United gold to the lo5in; constantly basiress is exchange to Ajut importations tc-,porary arc there even if only what not StatE5 gets united run the rates, in the long State::, United The it. bit more with temporarily back comes thereCere, need not fear a release of -old to . 5. If there is no ix.port of _pia pemittud and -,— 'ork funds 2,0 to a substantial discount it will of coA:.. euct seriously on the trade with the 'hilted Litates,'1r aiing the inportation into Junada of 7nited states raterials and supplies. r'o a corresponding etent, trade coeditions in the 'Tilted ,,.tcs v1ill be hampered and there will be in conse,aenee a very material reduction in the commerce between the two countries on necessaries fro: the aur standpoint. Janada's food stuffs will not be imported at a substantial loss due to adverse exchange. Under the present conditions J_nada as well as the 6. United 14tates have a common object, the successful prosecation of the aar. JJ.1 the resources and'aetivities of both countries are alike pledged to that end. In order that there may be the fullest use made of the resoares of Jazda in the contest it is absolately necessary that the business of supplying munitiol,, the eiaipment and provisioning of troops be not int, .fered with because of crippled trade rel-tions with the Tnited :.;tates. If these relations are hampered, to tit e;:tent will the contributions of Canada be lessened and the burden upon other allies increased. Discussion of the statement followed and tile fact was brought out that only during the wheat nlovin2; period is gold needed. 4t that time it is needed in order to enable the banks to obtain dominion notes on the present basis of reserve reLlairements behind such notes. Pease called especial attention to the fact that the cause of the trouble was found in the fact that there had recently been lar,;e accumulations of balances in New York. He said the note circulation had increased. in Canada about - 60,000,000 since tae beginning of' the 1ropean ;ar and ";overnment notes about creased 44)X,000,000. 0,000,000. Deposit liabilities had in- The total /14.;,Anadian bank note circula- tion was now :;177,000,000, against which .60,000,000 „;old vas held in the -krauts. The so called "excess note icsae" (part of the •177,000,000 referred to) is .00,000,000. r. Jarbirg called attention to the fact that the whole parlose of current financing is that of simply getting a maximum strength through joint action and producin;s tilos greatest results for the benefit of ,t11. Sir Edmund ::alker replied that the real problem at present is that of furnishing a small amount of gold for the purroce of stabili;:ing a very great trade between the 7nited States and one of its best customers. Governor 7,J.rding asked how far the nadian bankers could go in issuing notes on their present resources. :Ir. Pease replied that this depended upon the amount in the tills of the banks. Sir Vincent naredith said the c;an- to hear of any proposition the . adian Bankers would be ;.1.,ad Board might have to offer. 7o use 7. 2. currency in ,..1.1ada at the present tire would, however, be resented by the population or else maid cause -lam. LIiller inquired ,,hether anyone represented the 519 Gt 'UrVI4zIT-7117n :C'a07(1,37 .pauJruVp72 OZUGJO.T1100 01U. gr7T 41r ourld pAT1-,7;u...4 aulus uudr apTcaP 01. OC * 6" 477 uTn2r ;oolli 0; papaS-3 snp. ;T uuT srosTp J.0au,T •9161 .eirf oaujpq JO 'JO 00c'000'g7t uargoa u; 2uToaJ2r suTITpnurc 0q 01 (lu 000 ' ' -1)044IIL:aod oq PIrcals 000 1.r0'Po.r0s'A oq 'arid OW 1q3Jo1im cIi 1.17't0. pasuduad oruaj 'PoILT U3114srp, Vi3UUJ1A0t UnIVUUrn 0114 ju st..„91.A ati; SuTvr4s lurpuna0 POW /447 0114;', ' ; Jo4-4-171:1 041 1110 3140:.', 04 ao1oT 1414 $10 pourluv aqq.Jq poSamlo snP. eo;;Tugur, ov; ;IN; polidaa zuxçj pur - uuTuTvloc, o ju ao;sTuIrl aou-euTj .3 4
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