Full text of Commercial and Financial Chronicle : July 13, 1961 : Investment Dealers' Association of Canada Convention, Vol. 194, No. 6072, Section 2

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The Commercial and Financial Chronicle

2

DEALERS'
OF

.

.

Thursday, July 13, 1961

ASSOCIATION

CANADA

45TH

ANNUAL

JASPER

PARK

PRESIDENT

Arthur J. Milner
Mills, Spence & Co.,
Limited, Toronto

MEETING
LODGE

VICE-PRESIDENT

David S.

Beatty

Burns Bros. &

•

•

•

JUNE

VICE-PRESIDENT

22-25,

D. J,

K. M. Johnston

Langill

W. C. Pitfield &

Wood, Gundy &
Company Limited,
Calgary

VICE-PRESIDENT

1961

VICE-PRESIDENT

VICE-PRESIDENT

Toronto

Officers

.

VICE-PRESIDENT

Denton

Limited,

Company, Limited,
Winnipeg

1961-1962




W.M.Reay
Nesbitt, Thomson
and

Company,
Limited, Montreal

J. William Ritchie

Ross Wilson

Eastern Securities

A. E. Ames & Co.

Company Limited,

Limited, Vancouver

Halifax

HONORARY

HONORARY

HONORARY

SECRETARY

MANAGING

PRESIDENT

VICE-PRESIDENT

TREASURER

EMERITUS

DIRECTOR

J. A. Kingsmill

Harry L. Gassard

0

J.

Charles L. Gundy

John R. Hughes

Wood, Gundy &

Royal Securities

The Investment

The Investment

Company Limited,

Royal Securities
Corporation

Corporation

Dealers' Association

Dealers' Association

Toronto

Limited, Montreal

Limited, Montreal

of Canada

of Canada

Edgar Hill

■

N

"

Volume

194

Number

6072

.

.

The Commercial and Financial Chronicle

.

Canada's Economic Problems
Are Readily Solvable

terly growth trend, and the year's

that

total

There

The

fourth

postwar economic
expansionist
wave
began
to
wobble in the second quarter of
I960, when GNP showed its first
decline

By Eric S. Morse/' Vice-Chairman, W. C. Pitfield & Co., Limited,
Montreal, Canada; Retiring President, Investment Dealers'

to

as

whether

his

since

1957.

of

government has

has

or

the

fourth

quarter

Capital expenditures de¬

clined

last

Retail

Association of Canada
Uncertain

7% ahead of 1958.

was

sales

did

year—so

flattened

exports.
Cor¬

out.

poration profits dropped by some
6%.
Unemployment rose sharp¬

not damaged

financial

ly to record postwar highs.

further

seasonally adjusted index of in¬
dustrial production in July, 1960

relations with foreign investors, Mr. Morse urges nothing
be done to discourage any capital inflow vital to future

development. The investment dealers' spokesman calls for
mented
into

effort

to

channel

the

of

more

increased

aug¬

for

Nevertheless

In placing the

facts of Canada's

perspective, the investment banker notes:
ments is
at

are

within

work;

(1)

the emergence

of

significant

a

in

few

Canadians

the

economic

business

o r

The

set¬

find

opinion

an

some

o

d i f f i

in

out-

f

c

on

the

ulties

interna¬

tional
o

f

payments;
finally,
how

Eric S. Morse

to

Invest ment

make

can

contribution
these

the

to

difficulties

significant

a

of

solution

by

stimulating

saving, and by channeling it into
effective

forms

investment.

of

It is indeed unfortunate that the

There

have

lous

been

in

four

postwar expansion.

came

in

1949,

cyclical

Canada's

fabu¬

ing

out

of

The first

Late

out.

was

situation

and

inflow

ance

was

the result of

resource

development in this country by
foreign corporations seeking longterm
supplies of low- cost raw
materials. The impact of this new
cessitated

of

was

such

than

since

it

at

Balance of Payments Problem
Not Too Bad

Returning

opening
Naturally,

international balance of pay¬

payments

This

has

the

of

been the

marked

in the

7%

1961

over

of
than 11%.

result, largely,

increase

labor force which
than

quarter

more

was

up

first

in

by

the

more

quarter

cern

has

been

magnitude
account deficit,

it

situation.

net

Our

of

indebtedness and

of merchandise

the first quarter of 1960.

about
this current
is not a new

expressed

the

now

international

deficit

account

on

are

non-

smaller

was

third post¬

economic indicators in

moving sideways
declines.

earlier

brief

like

But,

not

made in 1959.

1958

were

showing mod¬

or

recessions,

and

the

two

one

this

There

cation.

is

still

shortage of skilled
many industries.
We

are

now

a

1960 it

was

less than $150 million.

first

quarter of this year
There
are,
I
think,, good reasons to expect a
trade surplus which will help to
finance the growing deficit on the
nominal.

non-merchandise balance of pay¬
ments items.
Frankly, I believe
that

so-called balance of pay¬

our

ments

problem

is

well

Continued

relative to GNP than during

on

within
page

distinct

personnel

in

FIRST

confronted with the

paradox of high unemployment—

relatively
depressed

the
'30s

IN CANADA

highest since the
— at
a time when

was

employment, national production,
exports, personal income, capital
Business generally and consumer expenditures are at
near

or

cycle

of

sig¬

record levels.

iNf

I venture

to

predict
that
unemployment
nificant
expansion.
Major ele¬ will be a continuing problem be¬
ments in the 1959 resurgence were cause of automation and general
a
major capital expenditure out¬ change in the character of the Ca¬
a

10%

a

5%

increase
increase

in
in

nadian

exports
To

domestic

our

retail trade.

Gross National Prod¬

uct in 1959 showed

a

strong

quar¬

economy.

the present
economy in proper
place

w/

state

IiNVHMINI

of

perspec¬

tive, I think that we should re¬
examine
the
underlying forces

Incorporated 1932

OPPORTUNITIES IN CANADA

Calvin

Bullock, Ltd.

507 Place D'Armes
Our

facilities

industrial
suitable

can

be

of valuable

assistance

to

those

interested

in

Montreal

the

development of Canada and of benefit to investors in selecting
through which to participate in Canada's assured

investments

growth.




FIRST
Nesbitt, Thomson and Company,

IN THE UNITED STATES

Limited
Members of The Investment Dealers' Association of Canada

Head Office: 355 St. James Street W., Montreal
Branches in the

principal Cities of Canada

Nesbitt, Thomson & Co.
Members Montreal Stock

Exchange

Canadian Stock

—

Toronto Stock Exchange

Exchange

Nesbitt, Thomson and Company, Inc.
25 Broad Street,
140 Federal Street,

Direct

New

New York 4, N. Y.
Boston, Massachusetts

wire connections between

York, Montreal, Toronto, Ottawa, Hamilton, Kitchener,

London

(OnL), Winnipeg, Calgary and Vancouver.

our

dar year 1959 the deficit had fall¬
to less than $400 million.
In

Recovery

severe.

another

underwent

and

well satisfied. That

it

1957

a

interruption of our economy's
growth was in course. Most of the

lay,

restrictions

in

of

en

was

first

balance

tween mid-1956 and mid-1957

it

the

the

merchandise trade deficit was just
under $900 million.
In the calen¬

based on
ent yardstick, was

unemployed countries was $1,270 million last
Canada's pres¬ year, most of which was on non7% of the labor merchandise items. Although con¬

to

situation,

I think that
an examination of our commodity
trade position is re-assuring.
Be¬

the

In

Un¬

has been overstressed.

In

averaged

War

or

mining and smelting indus¬
is foreign - controlled.
The
and political
import¬
of this situation in my view

the annual average of

it

Warld

new

economic

ne¬

im¬
levels

and

the

decade of the century.
our

that

immigration
capital goods

position has reflected the
however, this most ^recent read¬
justment period has been consid¬ heavy capital inflow.
The balance of payments deficit
erably more spectacular than the
earlier periods.
During last year on current account with other

1961

neither

Of course, a price
must be paid for the inflow of
capital that has enabled this coun¬

tries

ments

force.

of

view that the present

is

manageable.

Developments
abroad
exerted
major influences on our postwar
expansion.
Much of the capital

greater

unemployment,

period between 1900

outbreak

accelerated

war

aris¬

wartime

became pretty

run

when the pent-up

demand for consumer goods

of

of the

the

It is my

greatest

booms

fully apparent that

est

long-awaited Federal Budget has
not yet been made known to us—
as perhaps these comments might
be somewhat more enlightening.

interruptions

terms

and
II.

try
to
achieve
unprecedented
prosperity and high standards of
living.
Part of the price is the
foreign control of so much of
before World War I and substan¬ Canada's
productive
capacity.
tially larger than in the United Most recent figures show that
States and in western Europe in more than half of the manufac¬
the same period.
turing, petroleum and natural gas,

ports

In

most

of Moreover, a large number of the
unemployed are young and un¬
all through 1956 and carried over skilled
persons
who have
not
into 1957.
Then its steam began
completed secondary school edu¬
this

of

tempo

economic

all

and,

Dealers

came

brief and it

was

Sharp recovery followed in

The

balance

indicate

It

ever

Rise in Unemployment

persons,

1955,
sparked
by
the
greatest
capital spending program in the
nation's history.
It was also ac¬
companied by a sharp increase in
export trade.

arising out of
our

1954.

mild.

give

selves;

war-

inspired and artificial boom

ting in which
we

the

from

at work than

were

inflow
since
World War II.
Each period of
expansion in those years shows
capital investment accounting for
an ever larger proportion of Gross
National Product. During the pe¬
riod 1956-57 total capital invest¬
ment provided more than 27% of
GNP, the largest, relatively, since
capital

services continued to rise.

resources.

letdown

had

of

investment

recession

ada's basic

outline the

to

as

put us where we are.
have been three successive

waves

before. Personal income and per¬
sonal expenditures on goods and

against housing and

(it was more of a pause
problems which have plagued the than a recession) was terminated
Canadian
economy
in
recent abruptly by the outbreak of the
years. To give the picture, as I Korean War in 1950 which caused
an
see
inflationary spiral of world
it, I will
demand for virtually all of Can¬
endeavor first
a

been

not

forecasters

some

as

post¬

Despite
the
slowing
down,
national
production
in¬
creased by 3.2% in 1960.
More

(3) utmost need to rectify lagging productivity.

with

deal

to

decline

has

fourth

predicted.

the balance of pay¬

relative importance of business investment as

like

serious

in

manageable bounds and that self-correcting forces
(2)

social capital needs;
would

problem

this

recession

war

example it sets when it should provide the leadership

greater savings.

the lowest in 17 months.

was

income

investments, and flays the Federal Government's deficit financing

for the poor

I

an

personal

The

have

Incorporated 1952
Calvin Bullock, Ltd.
One Wall Street
New York

8

The Commercial and Financial

Chronicle

.

.

Thursday, July 13, 1961

.

4

The Columbia River

Project

findings

the

on

eminent

of

sultants and I hope

and gas for our

con¬

will be ready

for submission to the Government

of British Columbia in August. At

Shrum,* O.B.E., M.M., E.D., M.A., Ph.D.,
Board

By Dean Gordon M.

as

Chairman of the Energy Board

but
As

a

submitted

be

in

of 1907;

projects. The

energy

castigates the burning up of irreplaceable resources when

being wasted; denies

enforced; and
foresees utilization in southern B. C. and expanding California mar¬
kets. Mr. Shrum compares hydro, thermal and nuclear power, which
term

he

contracts

recapturable

for

expects will be competitive in 10 years, and urges
delay in this hydro-electric project.
the

quite understandable that
Canadian investment dealers and
others, should be interested
in
large scale hydro-electric develop¬

It

is

ments.

In

comparison

vestments of

was

energy and no

first

so

Canada's share of the
is approximately $450
problems associated
the financing of the project
of

dollars. If the

Columbia

with

well rival some of the engi¬
neering problems connected with
building the highest rock-filled
dam ever attempted by engineers.

by

Canada it will

only
the

not

one

important subject for
discussion not only for those of
us
who live in British Columbia
but for Canadians from coast to

largest

trial

is

This

of

single indus¬
ever

The

may

Treaty

projects

an

this
by Ca¬
paper is in no sense a preview of
nadians, but
the largest single hydro-electric the B. C. Energy Board's forth¬
project ever developed by any coming report on the Columbia.
nation. The total expenditure for The Board's report will be based
Cordon M. Shrum

I

important

should

emphasize

that

based

upon

other commodity is
to our well-being.
living

of

standard

The

is

civilization

Our

in

any

by its
per
capita energy consumption.
This
per
capita amount varies
from 3,000 kilowatts per day in
country

some

tries

be measured

can

the

of

underveloped

coun¬

150,000 in the more

to

vanced

ad¬

of 50

nations. This factor

fair measure of the
range in the standard of living
throughout the world. It might
also be noted that one-quarter of

is

pretty

a

the

coast.

under¬

taken

cerned

we

almost

living

are

is
a

really a gigantic reactor
nuclear fusion process to

world's

four-fifths
and

population consumes
world's

the

of

energy

fortunate enough to be

we are

included in this one-quarter.

One

that sooner or later
the
other three-quarters of the
world's people will demand their
assume

may

billion

coal,

use

we

oil

growth and can therefore
predict our energy needs at any
time during the next 50 years.
We have about an 8% annual in¬
crease which means a doubling of
our

Un¬

of

industrial

There

gas

grind

gradually

Estimates vary regard¬

ing

our

reserves

and

the

time

fossil

of

which

elapse
The most

a

all

the

is

rate

the

which the

at

which

upon

of

standard

their

final

analysis

it

living.

as

is

Cost
a

very

usually looked
important factor

attitude

this

cannot

is

Our

depend

upon

en¬

fossil

fuels

but

3%

as

4%

or

an

important

of the

over-all

cost.

Only in the case of electro¬
chemical or electro-metallurgical
industries
is the
power
cost a
real determining factor in respect

anxiety about our future

supply has been lessened
to some extent by the develop¬
ment of nuclear energy. The use

location.

to

This

latter

type

uses

the rest of the Province combined.

Relative Power

Costs

It

might be helpful to have a
look at the relative cost of hydro,

the main reason that the develop¬
consumption, ment of nuclear energy is the
coal, petroleum most important scientific advance

nuclear

and

thermal

Continued

power.
on

page

organization underwrites,

777 BRNK

securities of the

CANADIAN GOVERNMENT

helps

tax

PROVINCES

through

steer

you

problems

CO

MUNICIPALITIES

If you are a

and

Canada, you will face the same kind of
taxation

CORPORATIONS

businessman with interests in

problems

do in the U.S.A.

as you

Knowing the facts on taxes that affect your
interests

will

do

much

help

to

you

make

profitable decisions. The information you
need

clearly defined in

is

a

free booklet

offered to you

by The Bank of Nova Scotia.
It's called The Canadian Business Guide—
revised edition of the memorandum

the

Harriman

Ripley & Co.

Income Taxes. Just fill

coupon

to receive your

The Bank of Nova Scotia,

in and mail the

free

copy

New York

of this

Agency, 37 Wall Street, N.Y.

Gentlemen:
Please send

helpful Scotiabank booklet.

Incorporated

Underwriters and Distributors

new

on

me a

63 Wall Street,
BOSTON

•

CHICAGO
CLEVELAND

*

PHILIP




'

•
•

London

PHILADELPHIA
•

•

SAN FRANCISCO

I

ERLANGE11S LIMITED

:

Address..

BRNK

Company Name-

THE BRNK OF

NOVR SCOTIR

READING

Correspondents:

HILL, HIGGINSON,

booklet

of Capital Issues

New York 5, N. Y.

DETROIT

free copy of your newly-revised

—Canadian Business Guide.

Name

Position
New York Agency:

37 Wall Street.

Representative: Board of Trade Bldg.
St. West, Toronto.
London Offices: 24-26 Walbrook, E.C.4;

Chicago

General Office: 44 King

11

Waterloo Place, S.W.I.

!

of

prodigious amounts
of electrical energy. In B. C. the
plants at Trail and Kitimat use
as
much electrical energy as all

industry

only about 4%

distributes and deals in

of

it is usually only

about

when.
All this

cost

consideration

not a
exhaust
merely
of

of whether we shall

our

the

not

of the world's energy
we

be

electric power is

the

really

case

industries

most

in

raise
In

Today

represents

becoming more and more im¬

but

under¬

will

countries

developed

Diminishing

sun.

although reliability is

sources

also

energy

our

or

choice from these various poten¬

tial

has come of atomic fuels will extend our
only by reserves by a factor of at least 10.
If the fusion process can be con¬
means of agriculture and by har¬
nessing hydro-electric power are trolled and energy produced from
we able to capture a minute part
heavy hydrogen then physicists
of the sun's energy. With the ex¬ have solved man's energy require¬
ception of hydro-electric power ments for all the time. This is
cally

uranium

estimate I have seen tirely justified. In the case of an
is 25 years and the most optimistic
automobile we accept a high cost
250
years.
The most important for energy in order to have more
unknown factor in these estimates comfort and convenience. In
fact,

Up to the present time practi¬
from

of

fission

perhaps by the fusion proc¬
ess. Cost and convenience will be
the chief considerations in making

energy

Fuels

sources

pessimistic

fair share of the available energy.
Fossil

older

even

fuels portant.

may

before their exhaustion.

much

potential

are many

the

from

other large scale

will

a

for B. C.—coal, oil, gas,
hydro and perhaps nuclear energy

of energy can be found our

halt.

has

economy.

of energy

no

a

she

although

exhausted. If

to

requirements about every nine
This is about the same rate
increase
as
Great
Britain

years.

and
day these supplies will be

civilization

fairly

tion

our reserves

source

British

easily determined. We know our
present consumption, its rate of
increase and our rate of popula¬

up

some

in

quirements of B. C. can be

pro¬

or

not

The future energy re¬

Columbia.

using

are

needs

meet
only

can

particularly

and

ada

years!

When
we

must

we

throughout the world but in Can¬

using

helium from hydrogen.

duce

that

immediate

our

away

but

prospects

certain

make

carried

be

not

future

by

fortunately, our sun, which is only
a
second rate star, is gradually
power is just one form of energy,
an
inexpensive and convenient running down and will probably
have a useful life of only 10 to 20
form.

$178

Lawrence

million.

initiate

Canada's share of

Columbia

of

ratified

only of the

waterway

phase

millions, even

is

eventually be taken over by
physicists. Physicists are the
experts on all forms of energy
and to a physicist hydro-electric

may

$300 million for power and
million for navigation. The

St.

so

must

We

far as energy is con¬

quently

C.'s Energy Needs

B.

not

are

being produced today except on
an
insignificant scale and conse¬

years

the

section

Canadian

the

They

billions,

there be no

completed Columbia project will
be of the order
of $1.5 billion.

require in-

River

be

cannot

power

19th century and the

fuels

these

and, so far as poten¬
to mankind is con¬

insignificance.

Un¬

formed millions of years ago.

fortunately,

benefit

cerned,
space
exploration by
comparison
fades
almost
into

represent captured sunlight trans¬
formed and deposited in the outer
crust of the earth since it was

chemists

ahead with either the Columbia or Peace,

there is this enormous, available water power

dealing with

one

tial

supply of energy.
really fossil fuels which

are

of this century, the entirely on our capital reserves.
It is interesting to note that the
pre-empted matter as
their own special interest and left earth receives in four days from
energy for the physicists. For a the sun more energy than all our
long time the chemists had the reserves including atomic fuels.
better of the bargain, for matter Unfortunately, very little of this
seemed to be the more important daily quota of energy can be cap¬
subject. However, during and since tured and utilized. Actually this
World War II energy has been the enormous amount of energy which
much more important concept and the earth receives is only about
now
since matter can be trans¬ one billionth of the total energy
formed into energy all chemistry radiated from the sun. The latter
early

Board's financial and engineering report is
Mr. Shrum sees little doubt that

expert calls for the repeal of the
anachronistic, self-defeating Electricity and Fluids Exportation Act
both,

or

divisions,

During the

August and

British Columbia will go

physicist. Physical science
roughly divided into two

matter and the other with energy.

plant in British Columbia at an estimated Canadian cost of
$1 to $1.5 billion compared to $478 million share of the St. Lawrence
power

to

a

be

main

for the building of the world's largest single hydro-electric

waterway. The Energy

as

can

physicist and not as the Energy Board's Chairman Mr. Shrum

presses

shall be identified not

this time, I

F.R.S.C., Chairman of the British Columbia Energy

of all times

These

—

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:

for

;

In
10

Volume 194

Number

6072

.

The Commercial and Financial Chronicle

.

.

immediate

Some Built-in Defects in

Canada's Financial System
By W. Earle McLaughlin*, President, The Royal Bank
of Canada,
Montreal, Quebec

impact of monetary
policy, directed at the money sup¬
ply so defined, is entirely upon
the chartered
banks, and other
depositories are affected only in¬
directly, if at all.
The

which
the

Singled out
the

are

to

fundamental

as

near-banks'

defects

in

Canada's

deposit currency rise

chartered-banks

and

the

danger

as

this

various
I

near-banks

have

referred

,

financial

not

poses

only

to

or

all

imagined,

which

imposed

assets

an

investigation

title

My

calls

"built-in

to

operations

some

d

f

t

They are built
they are fundamental

s

but

also

f

only

near-banks.

of

If, for example, the Bank of Can¬

Canada's? ada wishes

in

system.

because
e c

banking

attention

defects"

financial
in
e

of

it

serves

to

market.

open

contract

sells

cash

securities

re¬

in

the

Should these securi¬

structure

ties be bought by a bank, there is
a
direct debit to that bank's ac¬

which

count

o

not

are

due to

human

hence

and

the

in

error

with the

Bank

reduction

a

them, he issues

of

our

account with his

on

the part of

the

the

chartered

and

banks, the in¬

reserves

vestment deal¬
or

in

the

ever,

the

on

sible

bank

on

has

of

Canada

control; they

not limited by law to a maxi¬

disadvantage,

completely

be¬

of its

cash

"create"

credit

ing services is narrower than that
provided by a chartered bank, but
they are not precluded by law
from
extending this range.
In
fact, the only difference between
their deposit operation and that
of

the

chartered

banks

gives

are

not considered part

of the money supply even

control.

can

lending rate of 6%, which
them a significant advan¬

mum

is

that,

though

they

are

sense

that chartered bank deposits

are

I

"money"

in

the

same

money.

various

loss

suggesting that these

near-banks

"draining

sense

from

the
of

a

chartered
bank

are

away"

in

banks.

customer

some

deposits
to

The

this

kind of competition reduces char¬
tered bank deposits of one type:

deposits

owned

by

the

general

unlike the chartered banks, these

public, but it increases chartered

institutions

bank

stringent

are

not subject to the

regulation

which

the

Bank Act and the Bank of Canada

deposits of another type: de¬

posits owned by trust companies,
credit

the

growth

unions,

or

of

the

chartered

has become smaller.
Should this
trend continue at the present
rate,
Canada

may in time approach the
a noted British finan¬

stage which

cial expert foresees for the U. K.

where, on some still distant day,
credit created by near-banks
may
displace ordinary bank deposits,
just as over the last century bank
deposits

not

am

of

banking system its share of the
total supply of deposit
currency

notes

as

have
the

displaced
bank¬
principal part of the

supply. Under these con¬
ditions chartered bank deposits in

money

Canada would, like their U. K.
counterparts (clearing bank de¬
posits) "become the small change
of

the monetary system!"

Banks Must Meet the Challenge

Under these conditions, too-, the
implications for chartered-bank
lending operations would be at

other near-banks.

Continued

cheque on his
bank, and when

Canada

reduced.

are

of

and

cash

But,

—

glaring

what I

only
they

as

consider pos¬

to correct them.
been

on

page

reduced

cash

Conversely,
by the

securities

the pro¬

reverses

increases

chartered-

reserves.

because

the

of

the

8%

mini¬

cash-reserve

under

requirement
Act, to control

Bank

these cash reserves is to control
chartered-bank deposits. The total
money

said, and much

has been

is

chartered-bank

mum

not

concentrate

means

Much

W. Earle McLaughlin

re¬

defects

are—but

of

hence

cedure

money
How-

will

Bank

The rapid growth of deposits in
near-banks, whatever the source,
has, in fact, meant that in spite

a

Bank of Canada

any

my

marks

Bank

purchase

a

entities

market.

fixed percentage of

is cleared by the Bank
Canada, his bank's deposit with

of

authorities, the

ers,

posits of near-banks have risen.
have

their deposits in the form of cash
reserves which in turn are subject
to

Nevertheless, it is clear that in
this process, while chartered bank
deposits are unchanged, the de¬

the check

monetary

other

Canada,

Should anyone else buy

reserves.

administration

system

of

own

Near-banks

on

chartered-bank loan rates of interest. The banker
hopes the recently
announced plan to set up a Royal Commission will allow not

a

not

liabilities

the

by purchasing assets in return for
deposit liabilities subject to check.
Beyond this their range of bank¬

ceiling

to maintain

do

collective

have

trol.

6%

near-banks

tage in the interest rates they can
pay on deposits; and moreover, as
I pointed out earlier, their deposit

not

yond their

removing the

Interest Rate Advantage
These

are

posits in the money supply and subjecting them to some
type of—
to be explored—reserve
requirements under Bank of Canada's con¬
recommends

char¬

do

but, also, to effective monetary control. Mr.
McLaughlin absolves monetary managers from responsibility for
this, and recommends legislative changes placing near-banks' de¬

also

Canada's

upon

unique to the chartered banks, of
having the total value of their

the

chartered-banks

He

impose

tered banking system.

are supposed in the
popu¬
lar mind to be the exclusive
prop¬
erty of the chartered banks. They

system

competitive threat

a

advantages, real

to

have

Act

supply,

as

have

we

seen,

consists of notes and coin in cir¬
culation plus the chartered banks'

written, concerning
independence; Canadian deposit liabilities. Since
it, in the years that the Bank of Canada is the sole
have passed since the end of the issuer of notes and the sole dis¬
second world war. I do not wish tributor of coin, even though these
more

economic

Canada's
or

lack

to

thresh

intend

of

this old

over

instead

straw.

concentrate

to

I
on

prerequisite to that inde¬
pendence—a prerequisite which I
believe has received little recogni¬
one

in

tion

the

immense,

often

and

stimulating, literature on this vital
subject. I refer to our need for
a

financial structure which is not

only eminently sound and reason¬
ably efficient but one that works
smoothly in its short-run adapta¬
tion

the

to

the day.
control

economic

climate

of

For reasons beyond the
of

of us,

any

we

do not

have this degree of flexibility now,
but

it is

and very

easily within our reach;
moderate legislative re¬
it

forms would make

in most

a

policy in

Monetary

fact.
as

Western

this money supply is de¬
by the monetary authorities

Canada

as

the total amount of chartered-

bank

deposits

rency

plus Bank of Canada notes

Canadian

in

cur¬

and Canadian coin in the hands of

the

public.
part of this
is

far

By

or

sum-

the greater
almost 90%,

of chartered-bank

in the form

supply,

market
operations the Bank of
Canada controls the active part of

the money supply,
of bank
deposits,

lows

that

the

i.e. the volume
it clearly fol¬

supply

money

of

Canada, as here defined- is com¬
pletely responsive to Bank of

Securities Markets

Canada policy.

"Money-Supply Substitutes"
So

far
the role
of monetary
policy would seem to be straight¬
forward enough. But, as the cliche
has

it,

world.

we

live

And

one

of

changes

in

portant

in

changing

a

the most

recent

to suit every

im¬

years

has been the development of what

Canada,

democracies, de¬
rives its power from the control
by the central bank of the supply
of
money
in the economy.
In
fined

passive elements in the money
and since, through open-

are

might
the

real

side

called

"money-supply

thing

the

but

entirely

out¬

definition

official

and

completely outside direct centralbank

control.

For the most part
money-supply
substitutes
take the form of deposits with
checking privileges in Trust Com¬
panies, Caisses Populaires, Credit

these

Unions
which

and

I

similar

shall

lump

institutions

together

in

the simple descriptive term "nearbanks." Since 1934 when the Bank
of

deposit liabilities.

be

substitutes" almost identical with

Canada

Act

established

our

central

Bank

of

Canada's

Role

Against their deposit liabilities
averaged
the

riod

over a

reserve-base pe¬

chartered

banks

are

re¬

quired under the Bank Act to hold
8%
cash reserves.
In
addition,
under
Bank

an

of

with the
effective May

arrangement

Canada,

1956 the chartered banks maintain
a

further minimum of 7%

ondary

reserves

Securities of the United States

This is

State, Municipal, Revenue and Housing

bank, these near-bank de¬
posit-receiving institutions have
enjoyed a period of rapid growth.

in

sec¬

consisting of Gov¬

especially true of the de¬
business
done
by Credit
Unions, Caises Populaires, Trust
Companies, and inl a sense also by
posit

finance companies and small loan
companies. But perhaps we should
also

day-to-day

loans to money-

The

Bank

of

Canada

has

com¬

chartered-bank
cash
reserves,
which consist of
chartered-bank deposits with the
Bank of Canada plus their aver¬
age holdings of Bank of Canada
notes in the reserve-base period.
plete control

over




the

certain

street and in effect

rary
In

market dealers.

in

category of
organi¬
zations that borrow money on the

ernment of Canada Treasury bills
and

include

near-banks

other

accept tempo¬

of this

change in the

true nature of the money

the

classic

definition

is

hered to and the money

supply,

still

ad¬

supply

posit currency existing outside the
banks.

Securities

of

As

a

result, the

The

FIRST BOSTON
CORPORATION

Industrial, Public Utility and

Railroad

Corporations

Bank Stocks

15 Broad St.

Casualty, Fire and Life Insurance

Boston

•

NEW YORK 5

Pittsburgh

•

Chicago

DIgby 4-1515
Philadelphia

Company Stocks
San Francisco

Cleveland

Acceptances

Securities of the International Bank for
Reconstruction and

Development

IInfhruti'ifer

zliltrilulof

Qjfaier

Canadian Securities

as

officially defined excludes all de¬

chartered

Agencies

Bonds, Preferred and Common Stocks

Bankers'

deposits.
spite

Government and its

External Dollar Securities

■Snveatment
Sfemritied

13

The Commercial and Financial Chronicle

6

.

.

Thursday, July 13, 1961

.

—the

Canada's Economic Outlook
By Marvin W. Farrell,* Manager, Economic Research Department,
Steel Company

The

of Canada, Ltd., Hamilton, Canada

population and the present
are small by com¬
parison. There are about 18 mil¬
lion
people compared with 182
million in the United States, while
the comparison of Gross National
Product is 36 billions

Canadian

is viewed

economy

as

having solid strength despite its

present period of slowed economic growth. Mr. Farrell
in

1961

as

Western

in

directly dependent

on

sees

here in the

recovery

Europe and, therefore, he describes the short

run

pect as moderately strong with greater strength reserved

longer

Canada's

future.

run

the two-fold need for

underlying

problem

improved exports and

is

pros¬

as

the

to

and EFTA without improved entry to our markets, and caution that

rivals

the deployment of domestic savings to replace corporate borrowing

from

abroad

merely shift the problem of capital

may

In

discussing

business

the

and

financial prospects for Canada, I
suffer from the disadvantage of

being
of

close to

so

the

crossflows

Canadian

affairs

inflow to

not be

clear to

me

has not been

resources

or

as

rich

a

as

as

in the United

States, though in forest products,
metals
and natural gas, and in
tages

the

substantial in the

are

as

To

as

nation

develop

as

have

mar¬

industrial

an

to the discern¬

industrial

ing

chinery, and technologies. Where
our resources are rich, and when

outside

observer.

I

propose

to

we

consider the

subject
the

d

and

Canadian

some

lar

outlook;

mestic

in

the

short-term

and

General

Setting of Canada's
Economic Development

The main obj ective of Canadian

economic development is
courage

the

use

of

our

the

scale

industries

M. w. Farrell

finally some major
issues in the longer run Canadian
prospects.
The

gain

large

lopment;
particu¬

problems

to

access

world

primarily in the processing of nat¬
ural resource products—can estab¬
lish units for very large markets,

under
three

ev e

ready

markets, the efficient industries—

headings: the
general setting
of

have

to en¬
national

and to

full

advantage

volumes.

are

Where

of
our

oriented to the do¬

market, and

are

relatively

lightly exposed to the competition
of imports, they must
develop
their efficiency in smaller units
for

the

small

domestic

market.

Finally where our industries must
share the market with a substan¬
tial

or

rising flow of direct import

competition,

the

disadvantage of
almost

the small market may be

overwhelming.
Although Canada

covers a great
employ a grow¬
ing labor force at a high and area on the map — greater than
continental United States I believe
rising standard of living.
resources

1946-60,

the

population

In

recent

industrial

the

years

expansion

has

been

at

much faster rate than the gen¬
eration
of
savings
in
Canada.

investment

during

the

1950s at annual levels between 22
to 27%

of the G.N.P. has been far

beyond

the

combination

of

savings and corporate earn¬
ings.
To
finance
the
national
growth there have been heavy

borrowings by the sale of bonds
in the United States by all levels
of government. There has been

relatively little corporate borrow¬
ing in the United States, but there
direct

great deal of American

a

investment

in

Canadian

enterprises, plus

many

tures

owned

initiated,

nanced

from

the

new

ven¬

and

United

fi¬

States.

Foreign investment in Canada is
around

now

$18.5 billion—most of

it American. This is

the

value

of

the

half of

over

G.N.P.

in

Canada

be

can

thankful,
so

Ltd.

L.

F.

BROWN, W. TOM*
Oldum Brown

Montreal

Vancouver

ANNETT, W. S.
Investment Dealers' Association

Investments Ltd.

BUKER, O. E.*
Richardson

James

Toronto

&

BURGESS, H. T.*
C.

Winnipeg

H.

& Co. Ltd.

Burgess

Toronto

BARKER, A. J.
Thomas B. Read

BONGARD,

Co. Ltd.

Bongard

Vancouver

Bros.

& Denton Ltd.

BURLEY,

Toronto

Montreal

Nesbitt, Thomson & Co. Ltd.
Calgary

Bartlett, Cayley

& Co. Ltd.

CARLILE, R. C.*

Toronto

Carlile

Ames

&

McCarthy Ltd.

Calgary
Co.

&

Ltd.

CARPENTER, P. H.*

Toronto

James Richardson & Sons
Edmonton

W. J.

Pemberton Securities Ltd.

CATER, ARCHIE H.*

Vancouver

Royal Securities Corp. Ltd.
Vancouver

BRADBURY, T. J.*

Brawley, Cathers & Co.

OPERATOR

Toronto

Canadian

Broadcasting

years.

of the

cases

obvious

Nesbitt, Thomson & Co. Ltd.
Calgary

CHILCOTT, R. A.*
C.

M.

Oliver

&

Co.

Brault & Chaput
Montreal

CHIPPINDALE, ALAN*
Calvin

Bullock

Ltd.

Montreal

BRAZILL, JOHN

Nesbitt, Thomson & Co. Ltd.

CHOAT, J. E.*

Toronto

Burns Bros. & Denton Ltd.
Toronto

BRENNAN, F. J.
Brennan &

Co. Ltd.

CLARK,

Saint John

G.

Wood, Gundy & Co. Ltd.
BROOKES, ROY

R.*
Securities Corp.

Royal

Calgary
Ltd.
CLARKE, DON*

Edmonton

Fry
Mr.

and

&

Co.

Ltd.

Toronto

Mrs.

Some
an

iron-ore

industry
in
QuebecLabrador, a petroleum and natural
gas industry in the four Western
provinces,
nickel
in
Manitoba,
uranium, new aluminum smelters,
railways to serve the mines, new
pulp and newsprint mills, and a
greatly
expanded
variety
and
capacity

in

manufacturing

and

construction.
The

governments

of

Continued

Canada

on

Underwriters and Dealers in

15

page

Canadian Securities

Canadian
Published

Dominick Corporation

Twice Weekly

of

Canada

The COMMERCIAL and
360

Investment Securities

FINANCIAL

ST. JAMES STREET WEST

CHRONICLE

MONTREAL

Reg. U. S. Patent Office
WILLIAM

DANA

B.

Park

25

COMPANY,

Place, New York 7,

REctor 2-9570

1961

1889

CLAUDE
WILLIAM

D.

to

Publishers
N. Y.

private wire with

9576

SEIBERT, President

DANA

GEORGE J.

SEIBERT,

Treasurer

Dominick

MORRISSEY, Editor

Thursday, July

Every Thursday (general news and ad¬
vertising issue) and every Monday (com¬
plete statistical issue — market quotation

corporation news,

records,

A. E. Ames & Co.

and

state

Other

Chicago

city

Office:

111.

3,

bank

135

Dominion

14

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STREET.

Members

South

(Telephone

La

Salle

STate

St.,

New York Stock

Exchange

American Stock

2-0613).

Exchange

Incorporated
Copyright 1961 by William B. Dana

Two Wall

Street, Xew York 5

Company
Reentered

Canadian

Montreal

Calgary

Vancouver

other

Canadian

Victoria

Cities




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.

Febru¬

Subscriptions in United
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Members
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York, N. Y., under the Act of March 8, 1879.

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of

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NEW YORK

clearings,

etc.)

news,

&

1961

13,

fluctuations

remittances

in

for

advertisements

York

funds.

Ltd.

Vancouver

BRAULT, P. H.*

re¬

are

Corp.

Winnipeg

BRANDRETH, J. M.

J.

C. JR.*

CALDER, ROSS

BECK, GEO. H.*

F.

CHESTER

New York

L. G. Beaubien & Co. Ltd.

BORRIE,

P.

Bache & Co.

BEAUBIEN, ANDREW S.

E.

R.

Co.

Toronto

BEATTY, D. S.*
Burns

G.

&

into productive de¬

came

Sons

Calgary

AUSTEN, J. F.*
Nesbitt, Thomson & Co. Ltd.

in

many

velopment in recent
more

ALMOND,

^Denotes

respects, that

sources

Co.

&

Toronto

our

highest year, 1960.
many

Gairdner

Co.

per¬

sonal

has been

&

Toronto

A.

of

pace

a

Capital

Bache

BLAIN, F. A.*

Industrial Output Outraces
Savings' Pace

to

import many
materials, much ma¬

we

in

sharply, particularly in the younger
age brackets. As long as employ¬
ment
was
expanding
the fast
growing population was easily ab¬
sorbed into jobs. The population
growth has been so rapid that the
nation needs a fast expansion of
industry and employment to keep
unemployment down to accept¬
ably low levels.

of the world.

kets

happenings
may

broad

simple or
distribution of

The

matter.

easy

national

been

not

certain farm products our advan¬

that
of

some

has

This

was

and the labor force have increased

mortgage and government bonds.
Introduction

population

barely 12 million people. Through
a concerted immigration program
which brought two million ar¬

feeling in Canada that it is being closed out of ECM

BROWN, JOHN H.*

ACKERMAN, ARTHUR J.*

Investment Dealers' Association

1945 the Canadian

sion-modernization of medium-sized firms. The economist calls atten¬
tion

in

forts to encourage rapid develop¬
ment of resources. At the end of

funds for the expan¬

new

billion

505

The government and peoples of
Canada have made ambitious ef¬

for the

depicted

around

annually in

United States.

S. and

U.

to

Canada

recovery

Attended the Convention

size of markets

Toronto Stock

Exchange

Volume

A.

CLARKE,

J.

194

Number

6072

Ltd.
Vancouver

Ltd.

&

Mrs. M. R. W.

Brennan

&

Kuhner, Dominick Corporation of Canada, Montreal; F. J. Brennan,
Company, Ltd., St. John; Robert A. White, Bongard & Company, Toronto

Investment Dealers' Association
Toronto

Toronto

GRAHAM, JOHN JR.*

Toronto

Bell, Gouinlock & Co. Ltd.
Winnipeg

COULTER, J. M.*

Ross, Knowles
Tillsonburg

&

Co.

Ltd.

GRAHAM,

Morgan, Ostiguy & Hudon Ltd.
Montreal

Toronto

George Cross News Letter

&

Sons

GRAY, W. S.*

GREEY, J. G.*

Vancouver

Wood,
P.

&

Doherty Roadhouse & Co.
Calgary

CROSS, GEORGE B.

S.*

Gundy

& Company

Limited

Crysdale Ltd.

Toronto

Toronto

GREGG, Arthur E.*

DALY, R. A. JR.*

McLeod, Young, Weir &
Company Limited

Daly & Co. Ltd.

Toronto.

Findley Coyne Ltd.

Montreal

The

GUNDY, C. L.

Bankers Bond Corp. Ltd.

Limited, Montreal

DLOUHY, DOMINIK*
Bienvenu

F.*

HADLEY

Lagueux & DesRochers Ltee.
Quebec

planning

Nesbitt, Thomson & Co. Ltd.

work

Vancouver

trust

HANSON, MURRAY

Ltee.

Investment Bankers Association

Montreal

of America

J.*

Corp. Ltd.
Hanson, Richardson & Co. Ltd.
Toronto

Toronto

A.

Oldfield, Kirby & Gardner

Ltd.

Winnipeg

E.

Ames

&

Co.

offices in

James

Richardson

Prince

& Sons

Albert

McLeod, Young, Weir & Co.

a

Ltd.

Toronto

EBBELS W. D.*

HILL, J.

Houston, Willoughby & Co. Ltd.
Regina
EDWARDS,

J.

C.*

Matthews

&

Co.

Ltd.

are

so

preserve

provide.
when

you

dealing with

are
one

dealing with the

of the world's great

companies. Sun Life maintains 150 branch

key cities in Canada and the United States,

wide variety

from coast to coast. With

of up-to-date policy plans, and with

highly qualified representatives, Sun Life is in
tion

EDGAR

to

the

the dollars which

offer the very

a

posi¬

finest in life insurance service.

Royal Securities Corp. Ltd.
Montreal

HILL,

Toronto

can

with agency representation

HILBORN, ROSS*

DUNSTAN, J. R.*

estate needs dollars that

attending death and

remember,

life insurance

Ltd.

Calgary

every

immediately available to meet death taxes and

Sun Life, you are

HERMAN, H. G.*

DUNLOP, W. S.*

can

providing the client with the best

other assets of the estate. These

And

Toronto

Annett & Co. Ltd.

in

possible advice. For

Daly, Harvey & Cooper

A. W.*

officer

life insurance

HARVEY, D. R. C.*

Edmonton

y., ;■■■

man's estate, the lite insurance agent

other expenses

HANSON, TELFER R.*

M.*
M. Duggan Investments Ltd.
ERIC

a

closely with the lawyer, the accountant and the

will be

Washington

Royal Securities
Calgary

SQDSO QDBB
IS EXPERT, TOO!

Toronto

T.

Dominion Securities Corporation,

Gundy & Co. Ltd.

Wood,

Toronto

DESROCHERS, PIERRE*

DUNCAN,

Matheson,

McLeod, Young, Weir & Co. Ltd.

DEANS, M. C.*

DUGGAN,

Ian

GRILLS, R. M.*

Toronto

E.

Mrs.

Montreal

DEACON, F. C.*

Maison

&

GRIFFIN, F. E.*
Greenshields Inc.

Credit Interprovincial Inc.
Montreal

Deacon

Mr.

Edmonton

DAVID, MICHEL A.*

DORAN,

Richardson

Winnipeg

Nesbitt, Thomson & Co. Ltd.

Mason

GRAY, H. A.*
James

CROOKSTON, J. IAN*

CRYSDALE,

C.*

R.

Osier, Hammond & Nanton Ltd.
Winnipeg

CREVIER, L. J.*

D.

F. J.

Bell, Gouinlock & Co. Ltd.

McLeod, Young, Weir & Co.

La

Mr.

C.

GOUINLOCK, R. W. JR.*

CORSON, R. R.*

A.

W.

Toronto

Montreal

R.

Morse,

Chronicle

GOLDRING, WARREN*
Fry & Co. Ltd.

DOUGLAS*

Canadian Dow Jones Ltd.

y'

The Commercial and Financial

.

GASSARD, H. L *

McDermid, Miller & McDermid

COLVEY,

.

Milner, Mills, Spence & Co. Limited, Toronto; Eric
Pitfield & Company, Limited, Montreal

P.*

W.

.

W. F.*

Annett & Co. Ltd.
Toronto

i

ERTL, EDWARD C.
The Financial Times
Montreal

HODGINS, A. F.*

Greenshields Inc.
Toronto

GARRETT, W. LLOYD*
Maison Bienvenu Ltee.

Montreal
♦Denotes

Mr.

Provincial Treasurer, Alberta
Edmonton

FARRILL, F. B.*

La

HINMAN, HON. E. W.

Osier, Hammond & Nanton Ltd.
Calgary
HOLTBY, P. N.*

Doherty Roadhouse & Co.

SUN LIFE ASSURANCE COMPANY

Toronto
and

Mrs.




Continued

on

page

16

OF CANADA
Head

Office: Montreal

The Commercial

and, Financial

Chronicle

.

.

.

Thursday, July 13, 1961

8

Gassard, Investment

Harry

W.

Dealers Association of Canada, Toronto; Mr.
& Company, Limited, Montreal

&

Mrs.

Eric

&

Mr.

Morse,

Mrs.

Arthur J. Ackerman, Bache
Limited, Montreal; Mr. &

over

Canada's Economic Problems

the

past five years has not
the economic benefits

resulted in

have been expected.
of the great increase
in productive capacity, our rate of
output has slowed down. Further¬

that

might

Regardless

Are

Readily Solvable

Continued from page 3

Self-correct¬
ing forces are already at work.
Accompanying the decline in our

manageable bounds.

was

deficit

trade

there
in¬

marked drop in capital

a

The downward
trend has continued through the
first quarter
of 1961 when net
inflow on capital from transac¬

flow

last

of

tions

year.

portfolio

less than half of

securities was

the figure a year

earlier.
has

decline

emerged
in

a

signifi¬

relative

the

im¬

investment. Since
1957, which was the all-time high
of capital investment, total busi¬
ness and government capital out¬
of

portance

lays have
ishing

accounted for a dimin¬

share

of

the

national

in recent years has
surplus

ment program

substantial

in

resulted

productive capacity in many in¬
dustries.

For example,

five years

industry

in the past

capacity in the cement

has

increased

been

by

capacity for petroleum re¬

90%;

is

fining

is

primary

50%;

by

up

aluminum

There

cant

output.
The official estimate of
capital expenditures for 1961 is
$8.3 billion, compared with $8.7
billion in 1957. The heavy invest¬

33%;

up

to maintain our

ore,

for

and

labor

ness

the

of

investment

$25

business

management

am

not

will

be

new

a

capital

it

may

have

implying

significant

Rather,

we

to¬

serious¬

problem.

of the

pattern

Unfortunately,

competitive posi¬

gether to face up to the

seems

others.

Productivity Lagging

we are

in

have also occurred in iron

utilities, steel, chemicals and

if

world markets—this ac¬
centuates the urgency of the need
tion

The Canadian

sociation reports

make

news¬

Marked in¬

capital re¬
Last year our total
domestic
capital formation was
about $7 billion, leaving a short¬
age of over $1 billion that had to

quirements.

decline.

survey.

cannot continue

This

our

creases

output has

World.

I

print is up by 25%.

to

to meet our

necessary

may be expected
Profit margins have
fallen and the rate of return on
both sales
and invested capital
has been falling for some time.

sector

business

Manufacturers' As¬ be imported.
We are fully aware of the sharp
that profits as a
debate over the pros and cons of
of sales in Canada's
shown a declining rate of increase percentage
our international balance of pay¬
manufacturing industry last year
and is lagging behind that in Eu¬
ments
position, and the allega¬
were
the lowest recorded in the
rope, even although we have had
tion
that Canadians have been
13 years during which the Asso¬
the greatest
relative capital in¬
ciation has conducted its annual living beyond their means. During
vestment
program
in the Free
my term of office I have tried to
man-hour

per

more,

merchandise

W. C. Pitfield & Company,
Co., New York

& Co., Toronto; Eric Morse,
Mrs. Chet Burley, Bache &

C. Pitfield

that

there

decline in

requirements.

likely that the

more

"Social Capital"

on

Since

productive

least
present, investment in the

billion

capacity than we can use, at

capital

for the

number

dians

In

ing housing and social capital at
35%.
This year the official esti¬
mate is 55% for business and 45%

government

Conceivably
ment

could

vestment

the

because

ture,

the

been

has

gone

in¬

the spade work of

at

compar¬

have

Canadians

years

invest¬

foreseeable fu¬

done,

less

or

saved

really "living

reveals that we are

Since 1926 our income

up."

has

sixfold—our savings on
other hand have only quad¬

the

up

From this you

rupled.

will see a

wide gap.

expanding our productive capac¬
ity

more

roughly an average of 7 % of their
net disposable income.
An ex¬
amination of the trend, however,

it

outstrip business

in

35

capital.

social

and

housing

are

key

of other industrial¬
ized countries.
Over a period of

investment
ac¬
counted for 65% of the total leav¬

for

a

to those

able

business

1957

the

that

felt

I

were

nation I

relatively larger

already apparent.

The trend is

that domestic
issue. In a
of addresses across the
tried to make the point
savings habits of Cana¬

ago,

savings

investment program.

sector of the

When

year

greater emphasis is
being placed on "social
capital."
In
short, capital
re¬
quirements of governments at all
levels
will continue to
expand
Relatively

contribution to this
I assumed office a

some

issue.

already

and to occupy a

be changed.

built

Emphasis

More Foreign

Capital Needed

least for
industry

Our

present.

lenge

has

a

real chal¬

of promoting

form

in the

capital
$8 bil¬ personal savings and channeling
them
into
sound
investments.
turn to the

Assuming future overall

requirements in excess of
lion

a

I now

year,

problem of the source
is abundantly
dians

have

willing)

to

of funds. It
Cana¬

clear that we

been unable

(or un¬

generate the savings

There

is

savings

tapped.

a

substantial

potential

that

personal

could

do, the less

dependent we will be

Specializing in

Ontario

of

Province

and

Hydro

Electric

Power

Commission

of Ontario

BONDS
•

>

Mason & Crysdale
LIMITED
Loaded Ore Cars in the

Canadian National

Railway Yards at Atikokan
Members:
The Investment

Producers

of High-Qualitymeet Exacting
Iron Ore to

Requirements in the U. S.

Dealers" Association of Canada
•

302 BAY STREET

and Canadian Steel Industries

TORONTO 1
EMPIRE 6-8961

STEEP ROCK IRON
Mines, Plants,




and Head Office

—

MINES LIMITED

Steep Rock Lake,

Ontario, Canada

Peter S.

Bellman H. Mason

Marie D. Saunders

be

The better the job we

Crysdale

Volume

Mr. &

194

Mrs. Tim Beatty,

foreign capital.

on

Number 6072

.

.

The Commercial and Financial

.

But it will not

small, in the aggregate
investment could be sub¬

be

may

their

Canadians, unlike their forebearers, seem to be increasingly

stantial.

to

prone

rather

spend

Thrift

seems

outmoded.

the

state has conditioned

habits.

than

to

to have become

Perhaps

welfare

spending

our

At any rate, we

are

now

spending income before it is even
earned.
The prevailing merchan¬
dising philosophy of "no down
payment" and "go now — pay
later"
and
live
on
your
credit
cards has, in my opinion, danger¬
ous economic implications.
I have indicated earlier that
are

of

the

In the last three years

net new

issues of Federal provincial, mu¬

nicipal

have averaged
Net

$2.4 billion

savings

personal

$1.6

billion

But

the

in

the

see

it,

and

member

dreds

job

of

investors

period.

our

in

about

apathy.

not, of

There

our

self-interest.

own

intensi¬

of

hun¬

potential

Canada who

are

not

securities

or

pure

Although their resources

'50s.

more

moder¬

Public

roar¬

on

siderably

de¬

months
in

of

form

savings

personal

Most of them

and not

likely

ment

a

small

are

to

will

$10,000

should

wards.

It

some

of

be

this

capital into

signs that we

There

this

in

are many

experienc¬

the first

in

this

any

not

yet

domestic

future

our

develop¬

not

already

we

damaged
with

relations
If

Canada

tion

the

of

have, to

ever

gets

the

degree,

financial

our

foreign

changing

game

any

investors.

the

reputa¬

rules

after

has started, the conse¬

savings,

I

the

doubt

if the Federal Government is pro¬

viding

the

required.

being

financial

We,

exhorted
our

officially

the

financing.

the

at

government

continuing

a

are

live

to

while

means,

time

same

leadership

individuals,

as

pur¬

of

program

Instead of the

not

there

deficit of

$300 million.

some

considered

the

opinion

deficit

this

tionary.

be

as

much

Such

have
on

$1 billion.

massive
most

a

our

as

In¬

well

Finally,
place

deficits

ernment

for

new

era

In

disrupts

bond

the

own

there

revival.

I
a

I

This

recovery

can

house
be

all

and

in
real

order

Canadians

build

their

confidence—and
can

get

efficient

and

Inquiries welcomed from institutional
investors and dealers

Inc

TORONTO
Street, New York 5

I

THE

Telephone: WHitehall 3-9525

INVESTMENT DEALERS' ASSOCIATION
OF

TORONTO

Ill

Em

3-8103

MONTREAL

MONTREAL
Uh

1-0111

k $




Teletype: NY 1-3708

CANADA
Canadian

'■'i

\V,Y.V<V.V«Vt

•

Affiliate: Greenshields & Co Inc—Business established 1910

TORONTO

QUEBEC

OTTAWA

WINNIPEG

Invest¬

with

our

use.

by Mr. Morse before the
Annual Meeting of the Investment Deal¬
ers' Association of Canada, Jasper,
Al¬
berta, June 23, 1961.

Canadian Securities

MEMBERS

to
in¬

savings

we

on

to

effective

address

mm

64 Wall

that

job of directing these savings to¬

will prob¬

(N.Y.)

so

leadership

not,

Greenshields & Co

ex¬

the

major

ANDERSON & COMPANY LIMITED

only

put

has

A

during

that

em¬

Pi

sharply

hope

retail

do

market

by

will endeavor to

will

crease

with

*An

must

con¬

financing.

sincere

encourage

ward

capital

appre¬

the

prices

of deficit

conclusion,

press

impact

requirements of the Federal Gov¬

cause

evidenced

fluctuating
this

The huge

unfortunate

capital market.

it

as

ment Dealers

Federal

This

fidence in the Canadian economy.

its

will

year

cash deficit could

It tends to

dis¬

that the

trying

hension and weaken investor

government

be not less than $700 million.

deed, the

a

been
means.

the

It is

of

cerning financial people
budgetary

be

to

appears

by other

cap¬

which

only factor involved.
Massive deficit financing is infla¬

forecast surplus in the fiscal year

1960-61,

has

government
curtail

is

demonstrating

anticipate

marked

however,
boom.

to

to

remain

Exports

although

are

or

respect

situation

a

situation has improved

considerably.

sales

the capital inflow that is

vital

Financing

markets,

other Cana¬

foreign

period of

continued to increase and the

strong

dis¬

into

construction

outlook is good. Labor income

ployment

to

some

borrowers

were

year

same

overall

further

nothing

er

ing another upturn in our econ¬

The

It is

opportunity

success

ahead of the

Canada.

hoped that the government
do

courage
so

discourage

to

ment. Time alone will tell wheth¬

are now

of

be

part,

securities.

I feel that that the

venture is good.

up¬

possible to

portfolio

considerable

and

Baby

apparently designed,

borrowing outside

to

recent

inevitably force

to

In

deficit

are some¬

in

in¬

grave

very

ital

sues

at

amounting

1960.

was

in

be

Deplores Deficit

foreign investment

of invest¬

least

said

Vancouver;

dian

December's

about

source

thing like 80,000 of these accounts

for

been

But there

capital.

high-grade

has

could

mar¬

investment

broader

Canada.

Budget

Chilcott, C. M. Oliver & Company, Limited,
P. Bongard, Bongard <£ Company, Toronto

R.

deed.

within

Much

in

the

Robert

quences

confidence

strong, if the stock

appears

posit in Canadian chartered banks

47%

have

ably be gradual and

base.

More than $7 billion are

months

are

pro¬

be in conflict with

course,

educa¬

is

be

investment

four

investing either because of ignor¬
ance

and

Mrs.

Gordon

ate than the situation in the

ing

&

it should help materially to ket is any indication of how
our
domestic
savings— people are thinking.
My point is
thereby lessening our dependance
that in reviving economy it should
on foreign funds.
Broadening our
be possible to accomplish a con¬
distribution
of
securities would

As I

education pro¬

thousands

saving

Housing starts

expanded by individual
firms.

ing

Mr.

gram,
boost

omy.

narrowed

strides

should

it

gram—but
fied

be

Important

made in

been

averaged

conditions.

major

our

a year.

same

could

gap

under favorable

tional.

securities

corporate

and

to plan a systematic and continu¬

channel

development

larger projects.

our

they could be taught

accounts.

savings to meet all of our capital
requirements. It seems apparent
that we shall continue to require
further amounts of foreign capital
for

If

we

not able to generate adequate

particularly

9

Burns Bros. & Denton, Ltd., Toronto; Mr. & Mrs. J. E. Cheat,
Burns Bros. & Denton Ltd, Toronto

be easy.

save.

Chronicle

SHERBROOKE

LONDON

10

Mr.

&

Mrs.

The Commercial and Financial Chronicle

J.

Ross

F.

J.

Oborne,

Brennan

&

Nesbitt, Thomson and Company, Limited, Montreal; G.
Company, Limited, St. John; Mr. & Mrs. John Penny,
Royal Securities Corporation, Toronto

of

The Columbia River Project
Continued from page
the

of

case

capital

terest

4

hydro there

transmission but there

are

costs. Nuclear power also

mission

cost

is

usually

can

the

load

low

case

the

as

located

be

There

center.

cost in the

no

fuel

has high

although the trans¬

capital costs

than

plants

to

close
is

fuel

a

of nuclear power

but it is low—we hope it

mill

will not

kwh.
Thermal power — generated from
coal, oil or gas — has a much
lower capital cost for the instal¬
lations than either hydro or nu¬
clear plants. The transmission cost
be

is

more

low

for the

nuclear

fairly

one

same

plants

large

item

Thermal

plants
deriving a

been

per

as

there

for

in

is

reason

but

hydro and thermal units
more or less competitive

and

generation

for

costs

a

fuel

cost.

have
recently
cost advantage

also from the

their large capital

on

expenditures. The net result is that

large

are

rates

Peace

River

which will be

It

is

that

At

the

nuclear

same

projects

time

hydro

are

being

handicapped by the increasing in¬

com¬

poten¬

pointing out
large units —

very

The

—

is

network

absorb

so

can

nomic

large
other

increments

are developed.
important eco¬

for

reasons

of

developing

a

Columbia,

may be of the order of 30
million kw. of which at the pres¬
ent time we have developed about

10%.
sion

Improvements in high ten¬
transmission
power

ters

in

run-off

B.

C.

the
the

to

effect

transmission

all

cen¬

the

or

U. S. A. At the present time

it is

economies

of

power

in

from

Peace River

by using 500,000
to 600,000 volts on the lines. Even
higher voltages may be used in
the

future

and

no

tually be possible.

the

make

available at load

variation

for

will

Southern

current

time

Clearwater,

tial

provincial grid. These include the
in

Peace,

the rivers farther north such

proposed

or

Chaput,

in B.

C. for the next 30 years. In
the case of other commodities we
would

ing

immediately think of shar¬
surplus

our
or

with

our

transmission

doubt

direct

will

even¬

exporting

power,

provided

market

for

which

is

used. In fact
to

now

Oceans

It

which

resource

and

it.

one

cannot

wasted

if

are

and

do

we

"I

the

which

not

petro

ploited

as
quickly as possible,
chiefly because of technical prog¬

valuable

own

and

our

help

present

export

of

could

pro¬

stations

country

in

by burning
place.

considering the establishment or expansion of a Canadian sub¬
sidiary often wish to investigate the possibility of raising
additional capital through the sale of bonds, debentures or
shares in Canada. Our organization, with over
fifty years'
experience in the underwriting and distribution of Canadian
securities,

can

I

a

we

can

raw
never

ma¬

tries'

re¬

may

have

some

of

in

thus

Western

selecting Canadian securities frequently desire advice
specialists in this field. The experience and
facilities of our organization, with offices across Canada and in
London, New York and Chicago, are always available upon
or

Canadians

are

built.

No

Europe

has

that
a

of the necessities

Most

of life.

tinental

resources.

remarkable figures and

Norway

future

as

'

power."
of

the

an

could

countries

of

&

Co.

Investment Dealers' Association
of Canada

Exchange

Wood, Gundy & Co., Inc.
Wall

Street, New York 5
CANADIAN
Afiliated

with

GOVERNMENT-MUNICIPAL-CORPORATION

Wood, Gundy & Company Limited
Head
36

Montreal




SECURITIES

Office

King Street West, Toronto, Canada

Winnipeg

Ottawa

Vancouver

Kitchener-

Halifax

Regina

Quebec

Edmonton

London

Calgary

Hamilton

CANADIAN

BANK

OF

COMMERCE

Victoria
EMPIRE

London, Eng.

3-5821

New York
TORONTO

of

J■

Members

T or onto Stock

have

exporter

con¬

Europe have large scale

Brawley, Cathers

request.

40

for

hydro¬

—

and assistance from

the

return

new

total waterpower

These

conservationist who

generations

than
is

as
Norway. With only 1% of the
OEEC countries' total
population,
Norway has 20% of these coun¬

show
some obligation to conserve
irreplaceable resources so that quite

future

not

hydro¬

such large water power resources

feels
our

do

of

be of assistance.

Private Investors
holding

which
am

valuable

up

terials

and

perfectly
foreign capital

the

electric

energy from water power and at
the same time produce our
energy

Company Executives—

it

secured

hydro¬

yield

Norway's

rate

But

is economic folly.
would go even further and
say
it is
morally wrong to waste the

electric power

I

to

production

that

from

unused

sea

made

development
rate.

be

power

a

resources

faster

a

is

Probably

economic

permit

to waste

rivers by

be

field,
pity to

power

it

into the

run

could

conceivable

Personally I feel that
the

it

electric

oil,

hibiting

nuclear

because

employment.

uranium.

of

water

power

energy produced from water pow¬
er. It is
exactly the same as elec¬
trical energy produced from

the energy

also

when

using any of
the water. There is
nothing mys¬
terious or unique about electrical

or

the

but

do this without

gas

in

ress

see

flowing in a river can produce
only power and, furthermore, it
can

of

crux

waterpower
until
about the year 2000.
Waterpower
is our asset that should be ex¬

chemical products. Water

-

the

say.

exploitable

day will be
for

to

to

present rate we shall not have
harnessed
all
the
economically

Pacific

not

some

materials

raw

come

want

I

Norway is
developing its waterpower faster
than ever before, but even at the

get paid
for it. One can present far better
arguments against the export of oil
or gas.
These are irreplaceable re¬
sources

what

now

what

store

is

is

of power:

exporting it

Arctic

but

it

something the same
Norway—we both have
populations and abundant

small

a

renewable

a

we

we

the

is

in

as

hydro-power.
Trygve Lie, the
Chairman
of
Norway's
Energy
Board, has to say about the export

argu¬

find

is

C.

position

Here

surplus

can

Cites Norway's Position
B.

unused resources of

neigh¬
foreign

exporting it to a
are really no

against

Montreal; Mr. & Mrs. Lionel
Mrs. Paul H. Brault,

&

Montreal

more hydro-electric
potential than we can use

ments

the Liard, Nass and Yukon. It
estimated that the total poten¬

This underlines the

grid

The

Homathko,

Fraser,

this

necessity for a
that the province

Enormous

B. C. is enormous. There are many
sources

Thursday, July 13, 1961

We have far
power

bors

hydro-electric potential of

200,000-400,000 kw or even more—
of hydro, nuclear or thermal in¬
stallations give low cost power.

are

and

our

worthwhile

only

when they

fuels.

of

many

tial hydro sources.

&

market. There

as

power

various

deficiences.

and

900,000 kw steam tur¬
plant burning gas from the
a

There

of

rivers, the need for standby
provide for failures of
generators or transmission lines,
variations in peak loads and in
general the possibility of smooth¬
ing out seasonal surpluses and

Potential

.

W. Ostiguy,
Morgan, Ostiguy & Hudon, Ltd.,
Morgan, Ostiguy & Hudon, Ltd., Montreal; Mr.

our

Hydro

.

P.

service to

the B. C. Electric Co. is currently

petitive with

J.

Brault

building
bine

Mrs.

cost

hydro, thermal and nuclear should
in many areas—including British
Columbia—be competitive sources
for electric power. In Vancouver

the

surplus

on a

&

Crevier,

basis and within 10 years all three

gradual increase in
efficiency of the boilers and from
current

are now

Mr.

Howard,

Reg.

.

BUILDING

r
Volume

Hal

194

Number

6072

.

.

The Commercial and Financial Chronicle

.

Murphy, Commercial <ft Financial Chronicle, New York; Curtis Murphy; Mr. & Mrs. Douglas
Colvey, Canadian Dow Jones, Ltd., Montreal; Frank Rose, Dow Jones & Co., New York City

electrical interconnections for the

0.3

import

almost

and

export

of

electric

Great Britain and France

power.

mill

and

just completing a submarine
cable at a cost of $15 million for
this purpose. For the first five
years
Great Britain expects to
import power and then when she
has completed proposed new
atomic plants with pumped stor¬
age
she expects to reverse the
flow and export power to the

on

Continent

this cable.

over

Yugoslavia is developing all her
hydro-electric power sources as

rapidly as possible and arranging
to pay off the cost of the develop¬
ments by selling power to
her
neighbors. She now has five in¬
ternational electrical interconnec¬
tions and is

negotiating for three

The countries include Aus¬

more.

tria, Italy, Greece, Hungary, Ger¬
many and Switzerland. Southern
Rhodesia

has

recently completed
hydro-electric installations

large

and has made

long-term contracts
export to the Congo.
Roadblocks

B.

argue

the

in

it

1955

and

is

It

War I when

Ontario

a

power

we

are

Canadian

difficulty
the

export

the

yearly

contract

owned

utilities

Quebec

should

instead.

a

year

power

today

power

At

thermal

that

time

rupted

on

exported

a

C.

40

ferent

design and

plant and thus

no

years

are

under

ago,

today, should restrict
development.

be

inter¬

look

towards

12 months' notice. The

than

the

the

surely

make
do it.

should

A.

able

be

to

satisfactory agreement to
Unfortunately with the pos¬
<a

sible exception of thermal
from
Alberta
and
some
power

power

hydro

from Manitoba there is

other Province in

Canada

no

with

a

large exportable surplus of power
close

to

a

good

market.

her

hydro

-

her

power.

hydro-electric

come

sooner

current

situation

or

and

the

this

development of

most

our

Issue

valuable

ques¬
one

natural

of

re¬

is of too vital importance
to become a political issue. Neither
sources

should

it

be

emotional

nor

tude.

It

approached

in

an

anti-American atti¬

seems

logical

to

suggest

export of electric power
be permitted without export
tax,
that

and

the

National

Board be asked to

to

powers

the

Energy

its present
determine
that
use

amounts

proposed are really
surplus for the locations and pe¬
riods suggested. This might enable
B. C. to sell, not waste its tre¬

sites

because hydro-electric power like

plants

or

The export
must

power

later and with

difficult

tion of the

Political

Columbia

mendous surplus. I say might here

electric

thermal

new

a

our

unemployment
problem

of in¬

any

other export commodity must

meet the

competition in price. The

price

export

sufficient

to

then

Almond,

the

Columbia River Treaty
be invalid for it not only
provides for the export of Can¬
ada's share of downstream bene¬
may

Ontario

import coal from the United States
for

Not

now.

Laurie

would

have

warrant

the

to

be

invest¬

fits

but it
also
provides
gradual reduction of these

benefits
titled.

to

which

When

Mica

Creek

From

1982

this

on

at

creases

cannot be enforced I should

like to

was

Unfortunately, due to
the

on

hydro

have probably already lost

We

wish

an

at

example, the plutonium plant
Hanford

will

probably be

future

to

800,000 kw. to this market dur¬

ing the next

10

However,

years.

to

market

a

in California

replace oil and gas
Continued

now
on

STOCKS

rather

past.

Markets

maintained in all classes of Canadian external

MEMBERS:

and internal bond issues.

MONTREAL

STOCK
STOCK

EXCHANGE

/

EXCHANGE

CANADIAN

Stock orders executed

Exchanges,
DIRECT

the Montreal and Toronto Stock

on

net New York markets quoted

or

PRIVATE

WIRES

CALGARY,

TO

TORONTO, MONTREAL,

VANCOUVER,

BELL SYSTEM

MORGAN, OSTIGUY & HUD0N LTD.
MEMBERS:
INVESTMENT

DEALERS'

ASSOCIATION

OF

VICTORIA

TELETYPE

NY

AND

OTTAWA, WINNIPEG.
HALIFAX

1-702-3

Associate Member

American

Stock

Exchange

Boston

JAMES ST. WEST




CANADA

40

EXCHANGE

Halifax

PLACE,

NEW

YORK

5

Telephone WHitehall 4-8161

Ottawa

Calgary

MONTREAL,

request.

Dominion Securities Corporation

CANADA
London, Eng.

500 ST.

on

Canadian

Affiliate

and

—

Member

Canadian

Stock

Toronto, Montreal
Exchanges

being

page

of

MORGAN & CO. LTD.

au¬

thorized and will be supplying
up

a

BONDS

we

good

part of the market in the Pacific

point out that if this is true

to

a

Northwest for Canadian
power, As

In

indus¬

ban

our

export

power

over

those

our

to

Canada after many years.

not

lest

de¬

rate

212,000 kw. in year 2010. The
Treaty thus provides for the U. S.
to recapture power delivered to

for electrical
energy

power

en¬

amount

term

recapturable

is

storage

uniform

a

there does appear to be

for

a

is completed in 1970 these benefits
amount to 1,310,000 kw
capacity.

ment. To those who maintain that

contracts

for

power

Canada

entirely dif¬

from

trial

Limitee, Montreal;
Canada, Montreal

no

physicists.

that took place

conditions

of

competitive

concerned

supply

might

was

power

dream of the
we

to

there

at

power

a

that

reduce

Conditions

Bienvenu

Association

world-trade

our

British

In

entirely different from

are

basis. It takes

community could accept
of

On¬

in

creasing

La Maison

Dealers

that the

S.

U.

of

controversy

years

to

the

develop atomic

its profitable export
and claimed that other

that

be

able

the time is

to terminate

ex¬

and

been

nearly fully developed must either

B.

cannot

have

with

tario Power Co. itself did not wish

Dlouhy,

determine, there 1 is no parallel
any place
in the world, where
any nation has declined to take
advantage of an opportunity to
export a surplus of hydro-electric
energy. Surely if France and Ger¬
many or Yugoslavia and its neigh¬
bors, Hungary and Italy can make
arrangements to export surplus
hydro-electric power, two such
friendly nations as Canada and

largely by United States interests
—to
privately owned U. S. A.
companies in N. Y. State. The On¬

opment of electrical energy knows

build

that

was

the privately

by

was

even

to

to

Dominik

Investment

I

as

Mrs.

&

owned Ontario Power Co.—owned

Anyone familiar with the devel¬

five

wished

time

prices and atomic

year

to a
and the

contract. The main

that

at

in

power

Government

terminate the

World

resources

1907 which limits any

to

be

company

in N. Y. State

company

also imposes a 0.3 mill export tax.

a

oil

difficulties

during

selling

was

1917.

on

for

could

that

argued

encountered

were

Act of

four

it

years,

However,

application

exports

energy

any

considered by the Federal Power
Commission.

and

a

54

repealed

was

their

to

on

that Westcoast Trans¬

gas so

mission's

tario

ports

for

books

should not be changed.

development
by the
Electricity and Fluids Exportation

handicapped in
of
our
hydro

tax

Mr.

contract

C.

Columbia

export

commodity. Some seem to
that since this Act has been

far

So

an

handicap
know, Canada does

I

as

an

privately

British

In

in

far

put

other

also

is

tax

export

insurmountable

so

not

are

to

11

T oronto

Montreal

Winnipeg
Vancouver
Victoria

12

Financial Chronicle

The Commercial and

.

.

Thursday, July 13, 1961

.

12

Mr.

&

Mr.

Turney, Locke, Gray &

Mrs. Allan

Company, Limited, Calgary; Mr. & Mrs.

&

Hanson, Richardson

Hanson,

Telfer

Mrs.

George E. B.

B.

Thomas

Read Company,

& Co., Ltd., Toronto; Jack Barker,
Ltd.,

Vancouver

Ormonde, Thomson & McKinnon, Toronto

Treaty

at

lation

should make ar¬
immediately to sell
all
or
part of our downstream
benefits at least until our market

the

we

is too

present

B.

or

concen¬

C. must

spend $450 million

Columbia
Although $90 mil¬
lion may be a mere pittance for
arguments in favor of proceeding
the U. S., $450 million in compari¬
stalled and amortized before A. E.
can
absorb
this energy, which with the Columbia.
Continued from page 11
son represents
a gigantic under¬
becomes
too
competitive.
The will be at least three and prob¬
The downstream benefits have
burned to produce electric power.
taking for Canada. There is also
building of these plants would be ably seven years. I visualize that been
greatly
over-rated.
Most the
I should add that some of this gas
marketing problem. When the
the most certain and direct way to
eventually we might build in B. C. people seem to think that since we first unit is
is from B. C., sold to the Pacific
completed the U. S.
ensure
the future prosperity of thermal plants, using our abun¬
appear to be getting something for
Gas and Electric Co. at a floor
has an
assured market for the
B. C. We would produce an im¬
dant supplies of coal, oil or gas,
nothing from the Americans we
resultant power, whereas in the
price of approximately 22 cents mediate
improvement in employ¬ and transmit the power to Cali¬ should grab for them. The idea
per 1,000 cf. whereas the corre¬
early stages we in B. C. cannot
ment and business activity with fornia
over
the lines used for that these benefits are free has

The Columbia River Project

sponding wholesale floor price in
Vancouver is 32 cents. The Cali¬
fornia market for electrical energy
should

be

an

and

expanding

the commencement of

tized

a

construction

when the plants were amor¬

and

B.

would

C.

have

low-cost

power to stimulate industrial ac¬
The annual load tivity. We might be able to sell

profitable one.

increment in this one

state is over

to the U. S. at the

beginning about

which is
$25 million worth of energy per
about half of B. C.'s present total
year and by the end of 20 years
installation for domestic and in¬
this annual revenue could reach
dustrial use other than the two
$200 million. This amount would
large electro-chemical and metal¬
be comparable with our total for¬
lurgical plants.
one

As

Trygve Lie has

nomic

and

pointed out

would

arguments for getting our%

hydro-electric plants in B: C. in-"

U.

S.

greatly

A.

I

our

with

the

would suggest that in

accordance with the

provisions of

development.

build

fected

C.

B.

rather

oil

gas,

materials.
I

pros

and

of the

cons

as

C.

Chairman of the
Energy Board I expect to
to live with this treaty. It

might be easy to criticize some of
its provisions but then one must
bear in mind that this is a bi¬

agreement and neither side

obtained everything it wanted.

time

\

and

Peace

indebted

to

Columbia.

the

Whatever happens I

think Canada

the

Peace

River

Development Co. and the

Power

Government of B. C. for speeding
up

WALL ST

the negotiations on the Colum¬

bia. In fact they were
to

both

signed

such

an

wonder

phase the two projects.
feasibility of either project
greatly improved by as¬
surance that surplus power could
be exported. We might for a pe¬

The

could be

to

Two

Wall Street

will

most

Headquarters for

line

have

uninformed

would

of Wall Street and Broadway, you

Canada's First Bank, an organization

a

help

and

open

in

up

the

north

that this would be

good thing for B. C. as its popu¬

heavy

Oliver

to

Vancouver

the

from the difficult

there

Ottawa

fundamental

.

differ¬

between the Canadian

position.

S.

U.

In

are

the

and

first

Canada must complete

storage basins

the various

within the schedule

laid down in the

Treaty or incur

penalties up to $237,400 per month.
Furthermore, the U. S. has a
new

total

expenditure of approximately

$90 million whereas

Canada and/

service

as

required

by the Treaty.
The Energy

which

important
ences

transmission

between

and

Board's report will

be submitted in

after

months

August, about six

the

signing

320
We

to t mum omdtm

Bank

op

of

Montreal

BRANCHES IN ALL TEN

PROVINCES

time for

unreasonable

an

amination

of

the

NEW YORK: Two Wall St.

Board

850 BRANCHES IN CANADA, UNITED




a

and

single

largest

undertakings

ever

contemplated in Canada. It would
not
to

prudent to be committed

be

an

expenditure of this magni¬

tude without first

sound.

making certain

project was economically

that the

In

any

case,

there

is

•

of Trade

Vancouver

California St.
Building, 141 West Jackson Blvd.

SAN FRANCISCO: 333

STATES, GREAT BRITAIN AND

EUROPE

•

RESOURCES OVER $3 BILLION

Gompany Limited
Canada ;

complete service for corporate financing
enquiries from dealers invited.

Private

Gairdner &

Company Inc.

60 Wall Street,

Dealers' Association

New York

of Canada
All Major Canadian
Stock Exchanges

Toronto
London

Calgary
Montreal

no

necessity for a crash program as

Affiliate
Members:

ex¬

an

financial

engineering aspects of one of the

Bay Street, Toronto,

The Investment

Headquarters: Halifax, Toronto, Winnipeg, Calgary,

CHICAGO:

Canada.

04*4aU'd 'piftdt '£**6 0*4dt~U~ 0*4*t

T

District

provide

in

the

of

Treaty. This does not seem to be

helping U. S. businessmen operate

Gairdner %

the

of nearly

S.

$2 million per year for a standby

ratification.

completed

be

to

U.

which

north of the
border for 100 years. Through this Agency, a $3-billion
organization with 850 branches across Canada stands
ready to serve you. You are invited to call—or write.

has been

be

that developing the Peace

country

will find
headquarters for information on Canadian business oppor¬
tunities. Two Wall Street is the address of the New York
Agency of

will

defer the

long transmission

a

payment to the

persons

arrangements

Victoria

engineer¬

which

down¬

and would make unnecessary

Columbia place there are no penalty clauses
be feasible and both applicable to the U. S. whereas

power

from

our

the Colum¬

from

would

capital cost of

why B. C. has not already

financial

parts of the world. One can

argue

Canadian Information
At the comer

give

sell all

years

benefits

This

bia.

effective when
it. Some quite

ratifies
but

Aside altogether

speeded up

low-cost compared with power

of

riod

ing. Both the Peace and
appear

have

what might

be done to

signed the Columbia
and the U. S. has
and ratified it. The

given its approval for

extent that the treaty

finally got ahead of the

see

each in

We

area.

Treaty will become

comparing the two projects

a

very

to determine

from

power

also been asked to

stream

Treaty

of

Vancouver

U. S. and Canada

sincere

spend

the

Fundamental Differences Between

Canada has

has

Board

Energy

asked to evaluate the feasi¬

cost

the

month to the average

15 cents per

C.

and Peace—and

bia

householder.

River

of the benefits.

share

our

B.

bility of the two projects—Colum¬

little effect
B. C. light bills. It has been
produce

Canada

—the

is

to

good deal of

One could

been

Have to

estimated that at best it may mean

River Treaty. As
have

The

spend $450 million to get them.
Actually, the amount of energy
involved and the cost when de¬
livered in Vancouver will be such
upon

the
Columbia

do not propose to discuss

absorb

our

our

hardly be free when we

and uranium —
and export the electricity
than
to export the raw

coal,

—

of
also good

thinking and af¬
judgment. They can

influenced

It would surely be to the
advantage of Canada to process
and up-grade these raw materials

lateral

BROADWAY

the Province. There are

power.

B.

improve

payments

of

balance

sound eco¬

Norway, there are

products exports to the U. S. A.

est

Benefits

on

plants for the export of

nuclear

million kw. per year,

Economic

for

hydro power. We might even

the first phase of the

trated in the southwest corner

rangements

Edmonton

Halifax

Hamilton

Kingston

New York

Ottawa

Quebec

Vancouver

Kitchener

Winnipeg

4
Volume

Mr.

194

Number

6072

B. C. has no market for any

Further,

short delay in
the ratification date gives time to
complete the preliminary engi¬
neering studies and thus improves
our
position in respect to the
penalty

clauses

the

time

a

as

of

they

all

will

C.

be

Either

hydro

is

one

the

the

one

world.

time in

The

part

cost

of

Continued from page 5

in loans and
a

problem

selves.
tion

These
leled

massive

are

and

unparal¬

deposits is primarily
the banks them¬

They must show imagina¬
initiative

and

fate

worse

come

if

they

viz., to be¬
repositories for sav¬

as

schemes

and

a

funds

of

source

a

proposed by Ottawa

supported

by

government

I know that the

banks

are

able

let alone 1.6 million people of one

to

Province.

and I shall not therefore dwell at

ployment

ensure

em¬

and industrial activity

in B. C. for the next 20 years

prosperity

for

many

and

decades

to

come.

In

projects
we

the

sometimes

I

British
most

and

think

Columbians

optimistic,

courageous

that

must

be

imaginative

people

in

the

world today.
♦An

meet

the

state

length

of

affairs

challenge;

the

on

money

a

given

contraction of total

or

expenditure.

When

ary

trend,

policy

pressure

not

on

shared

the

by

is

in

which, in

an

them

ap¬

from present trends to face
the next

over

century

Instead, I shall concentrate
immediate
chartered
the very

Canadian
Under

danger,
banks

as

not

an

or so.
on

to

such

existence of

but

on

the

policy

exactly

volume

which

banks

near-banks

of

loan

have

can

and

to

restrict

continue

in

total

bond

market

deposit

The greater the

tral

bank

achieve

correspond¬

ex¬

or

down,

be

achieved

reflected

put

becomes.

over

Thus,

either

and

up
vs.

deposits is

directly in reduced effi¬

ciency of the central bank's
trol

to

efficient

chartered-bank

loans

.

bank

no

.

any

in

Canada

take,

loan

or

interest

shall

or

any

exceeding 6%

is

in

rate

per

OFFICE

•

con¬

The 6%

loan

Securities

Funds transferred anywhere

the

efficiency of monetary policy.
First,

it

prevents

alone among financial

public

or

private, from

Continued

2 BROADWAY

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NEW YORK 4, NEW YORK

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Apply any branch, or through our Securities Departments in

Regina, Vancouver, New York, London and Paris.

Burns Bros. & Denton Ltd.
Members: The Investment Dealers'

The Canadian Stock Exchange

Over 1,000 branches

throughout Canada,

the Caribbean area and South America




EXCEED

4

BILLION DOLLARS

Association

of Canada

Direct Wire Service To:

Toronto

ASSETS

Winnipeg
Ottawa

Vancouver
Montreal

banks,

charging
con¬

ditions when the general level of

Burns Bros. & Denton, inc.

Ltd.

the

institutions,

rates consonant with market

total money expenditure.

Exchange

on

on

Underwriters and distributors of Canadian Securities

Members: The Toronto Stock

the

banks, both of which reduce the

as

Burns Bros. & Company

by

terest has two main effects

in the world

Montreal, Toronto, Ottawa, Winnipeg, Calgary, Edmonton,

no

rate of

in¬

to

Safekeeping services provided

and

or

of

the

accepted and delivered

discount

rates

an

Stock and bond orders executed

of

ceiling thus imposed

chartered bank

relative to chartered-bank

MONTREAL

charge,

recoverable

OF CANADA
HEAD

for,

annum

near-banks

THE ROYAL BANK

respect

payable

exact any rate of

effective

system,

present

in

advance

stipulate

reserve or

discount

cen¬

forth

less

distortion,

of

".
of

bank."

effort the

the

policy

relative

lows:

higher rate of interest

given change in money

a

monetary
the

given increase

can

is

must

expenditure,

near-bank

credit

given result, and the

a

Impaired

the

Conversely, when monetary pol¬
a

central-bank

Efficiency of Monetary Policy

con¬

In other

pansion.

icy is expansive,

of

efficiency of monetary
policy is further compounded by
the built-in rigidity imposed on
the chartered banks by Section 91
of the Bank Act.
The operative
part of this section reads as fol¬

A

same.

ingly increased.

is

loans and deposits at a time when
the

the

open-market operations is needed

deposit-receiving

central bank.

banks

on

The effect

efficiency of central-bank
is

larger

ar¬

an

effect

tion in the

monetary policy.
the

deposit-currency
grows

chartered

this too has

distorting

the market for credit.

the

words, under these conditions, the

sad

ad¬

and

would

Like the

re¬

heavy

institutions outside the direct
trol of the

than

inflation¬

an

results

it

cash

risk of undesirable side effects in

monetary

strictive, to combat

process

mittedly extreme view, might

address

by Mr. Shrum before the
Annual
Meeting
of
the
Investment
Dealers'
Association
of
Canada, Jasper,
Alberta, June 23, 1961.

long-run

greater

any

pear

contemplating these gigantic

about

guarantees.

undertakings for any nation,

They will

bring

case,

bitrary

This wholly unnecessary reduc¬

greater increase in

a

chartered-bank

to achieve

to

are

than death:

mere

used

expansion

for

avoid what must be for bankers

for

billion.

$1

only through

vigorous to

ever

Chippindale, Calvin Bullock, Ltd., Montreal; Mrs. J. D. Winslow, Woodstock;
MacMurray, Eastern Securities Company, Liniited, St. John

Mrs. James

otherwise be called for.

this point that resisting this trend

$1.5 billion dollars whereas the
about

&

Canada's Financial System

to

be

Alan

former

ings

will

Mr.

Some Built-in Defects in

the Columbia project will be close

Peace

Mrs.

that

single

any

total

&

deposits, monetary policy, directed
at chartered-bank deposits only,
has to become progressively more

with
projects.

largest

Mr.

Burley, Jr.,

least equally severe. But I would
like to say most emphatically at

ahead

electric development

-

attempted at
of

going

if not both of these

one

C.

of

date

ratification

the Treaty by both countries.
There is little doubt but
B.

Mrs. Chester

&

13

down¬

stream benefits before 1965 at the

from

.The Commercial and Financial Chronicle

.

Mrs. Arthur J. Ackerman, Bache & Co.,
Toronto; Mr.
Bache & Co., New York City

&

earliest.

.

New York

Hamilton

on

page

14

The Commercial and Financial Chronicle

14

J.

G.

Greey,

Wood,

Columbia

Gundy & Company, Ltd., Toronto; Dr. Gordon M. Shrum, Chairman of
Energy Board, University of British Columbia, Vancouver; G. Clark,
Wood, Gundy & Company, Limited, Calgary

My

Some Built-in Defects in
tight

banks can restrain
borrowers only through arbitrary
rationing forced by the overall

interest rates

money,

(and lenders' costs)
high; second, and equally if not
restriction of the money supply;
more
important, it prevents the
bank from paying higher interest they are not allowed to raise, con¬
sistent with market conditions, the
rates on savings deposits
when
indicated
by conditions
in the price of bank credit and thereby
secure an efficient, fair and eco¬
market for credit.
is

nomic

Thus, the ceiling tends still fur¬
reduce

to

share

of

the

definition

supply

from

the

in

world

the

nomic reality.

the

of

deposits, to combat

eco¬

lack

case,

rigid

ceiling

interest

on

rates

efficiency of
an

even

First
rates

come

in

held
was

of
I

taken

to

really im¬

built-in

that

ensure

we

do

defects

a

statement

any

the

measures

full

and

ef¬

fective functioning of the market
for credit and to improve the ef¬

money supply deposits in
unions, caisses populaires,
companies, finance compa¬
and
any
other near-banks.
means that these institutions,
the chartered banks, would
to maintain reserves subject

designed
In

follow the

market

held

a

1959—

to

principle that

any

ex¬

regulation should

be

minimum, and, where
that regulation should

possible,
actually be reduced.

obliges the banks to resort to

the

I

necessarily clumsy, and highly
unpopular,
device
of
arbitrary
credit rationing;
second, it pre¬
vents the banks from implement¬
ing, as efficiently as they other¬
wise could, the stated or implied
policy of the Bank of Canada.
With the ceiling, in periods of

This
like
have

to control
I

two proposals to make,
both of which have been devised

with this principle fully in mind.
I advance them with all due def¬
become

in the hope that they

confidence

study

is

I

could

the

is

reserve

with

say

best.

Further

required

before

be

made.

selection

can

wise

a

Quite

frankly,

I do not know, for ex¬
whether reserves should
be held against near-bank deposits

ample,

sion and

may

early action in these im¬
portant matters.

R. A. Daly & Company

there

or

chartered

banks

near-bank

that the

be

may

loans.

Or, it
should

reserves

be a combination of the two; that
is, they should be applied against
both
deposits and
loans under
some
formula, or even against
deposits for one type of near-bank
and
against
loans
for
another

type.
There is, too, the very important

question: what form should
bank

reserves

take?

and

government,

Corporation

near-

again
I do not
reserves

ment of Canada

obligations placed
with some depository such as the
central
bank,
or
whether they
should take the form of minimum

deposits with the chartered banks.
Let
last

hasten to

me

is

suggestion

selfish

any

add

not

deposits

does

for

explained

I

reason.

that this

made
in

not

near-

reduce

chartered

bank deposits.
calling for near-banks
to maintain special reserves with
the chartered banks only changes
the ownership of Ithe deposits but

deposits in the chartered bank¬

Flexible Reserves

take,

municipal

the

form

Bank

the

able

be

directly

by

tions-

Securities

reserves

it

as

Canada

of

to

•

control

open-market
can

the

cash

will
them

opera¬
reserves

of

Private Wires

to

on

all

by

Exchanges

chartered

the

Bank

the

or

STREET

WEST

1010

TORONTO

HALL

HILL

MONTREAL

EMpire 4-4441




BEAVER

banks.

be

of

total

the

in

the

market

bond

or

with

amount of regu¬

amend¬
revision of the
Bank Act in 1964, Section 91 of
that Act which, as I have pointed
out, provides that chartered banks
may not charge more than 6% on
loans.
I would

ing

suggest that, if the ceil¬
It

flexible.

appropriate

number

bank

market.

the

points

of

is

However,

we

ible

the

would

efficiency

greatly increase
flexibility of

and

enabling the
to
reflect, as the near-banks have
always been able to do, both in
monetary policy by
chartered

their

at long last,

banks,

loan

rates

and

the

in

rates

interest

they pay on savings
and other time deposits, any gen¬
eral

the
any

tightness or relative ease in
money
supply that may at
time be dictated by events
imposed by the Bank
of

Canada.

These

reserve

re¬

present system of

open-market operations, which is

I

have

whole
serves

banking system as
classically defined but of all those
institutions

plied

matter

that

the

near-bank

re¬

said

of

same

of

our

applies to other aspects

monetary

structure.

banking

and

Because I feel

these matters,

I

am

the

cause.

strongly

heartened

to

I

as

which

I

have

ap¬

"near-bank"

term

be¬

have

already pointed

out, these institutions

increasing but

are

playing

an

unrecognized
part in the vital

and uncontrolled

monetary

and banking structure
the Canadian
economy.

of

The
in

Fathers

their

of

Confederation,

wisdom,

have

that in the vital matter
and

decreed
of banks

banking, the national interest,

and not the
presumed interest of
various occupational and
regional
groups, must reign supreme.
It
is then in this national

interest,

broadest

term,

and

truest

sense

that I appeal here

for action to restore to

our mone¬

tary authorities their rightful and
necessary power to
control the
total supply of
money in all its
and not
merely that

forms
of

part

the

pens,

the
of

total

at

form

This

supply which hap¬
given time, to take

any
of the

Canada's
is

deposit liabilities

chartered
time

a

of

banks.

decision

for

Canada.
Some of the most important de¬
cisions that have to be made
today
are in that
broad, and to a sur¬

prising degree in Canada un¬
claimed, realm of monetary and
fiscal policy. The most
important
thing, of course, is simply the will,
on
the
part of our fiscal and
monetary managers to move de¬
cisively to correct, so far as fiscal
and monetary policy can
correct,

the

present

slack

in

output

and

employment.

But given the will,
must also have effective fiscal

we

and monetary
machinery to im¬
plement policy. I believe that a
move along the lines I have
sug¬
gested herein will ensure that the

authorities

requires further study and

the

on

already

Study

While

I

wisdom of

Problem Subject of Royal

Canada.

frame of reference the
operations
not only of the

signal,

ceiling preferably, or a flex¬
ceiling such as I have de¬

of

are not yet
would urge that the
commission's
powers
should
be
broad
enough to take into its

the

by bank rate or otherwise, indi¬
cating the central bank's inten¬
tions in monetary policy).

scribed.

The brief reference in

Bank

known,

that

would still be without any

No

the

in

higher. (For this purpose I may
remark, parenthetically, our pres¬
ent floating bank rate would be
ideal because of the way it re¬
flects

this

its terms of reference

of

whichever

rate,

that

experienced

for

could,

example, be set at the present rate
of 6% or at a rate of, say. some
above

hope

the

it should

all,

at

retained

is

made

be

per¬

quirements could then be co-ordi¬
our

re¬

the next

at

would

secretariat.

lation in the economy by

ing,

One

stature and independence of
view,
backed by a strong,

an

reduce the total

near-banks would

deposit liabilities.

with

correspondingly

Commission
reserve

changes in near-bank

nated

be

would,

required to keep against their

loans

UNiversity 1-9751

London

Control

Canada

lowering the

centage which
KING

same

second proposal is, in line
sound principle, simply to

My

therefore, have to operate by rais¬

New York and Montreal

ing
44

of

effects

sion.

commission would be composed of
of
the
most
distinguished

men

and

the

At

contraction

or

would

and

Orders executed

credit.

in

the

time, the broader impact of mone¬
tary policy would have the effect
of greatly increasing its efficiency;
smaller operations would be re¬
quired to effect any given expan¬

Here

further study is needed.
know
whether
these

not
canadian

for

announcement

de¬

posit-receiving institutions, in the
market

recent

Budget that the government
plans to set up a Royal Commis¬

to

a

supply of credit, and undesirable

ing system.

dealers

to

or

the

other

result,
distortion,

As

no

unfavorable

favorable

of

and

be

duced.

of

Whatever

underwriters

would

by

Budget
indicated
that
the
commission would not be restrict¬
ed in its investigations to the
op¬
erations of the chartered banks

policy of credit expansion by the
monetary authorities.

total

of

of Canada
Exchange

today, to the
alone; and the
be true of any future
is

banks

sion

does not increase the overall total

The Toronto Stock

squeeze

it

of America

the

near-

of these

some

Likewise,

The Investment Dealers' Association

as

would

same

side

overall

Members

reserve

the impact of any
would be
spread over all deposit-receiving
and lending institutions and not

banks, reserves should be held not
against deposits but against the

bank

Limited

the

pecu¬

whether, because of the

or

basis for further discus¬

a

which

scheme

single

no

should be in the" form of govern¬

have

erence,

by the Bank of Canada.

provide

can

Thursday, July 13, 1961

.

Association

way

credit

confined,

earlier that the increase

in

this

future

chartered

nies

affect

to

Bankers

position of the chartered banks.

trust

ficiency of monetary policy should

below

in

these

believe

of

case

the

begin with
broad principle.

tension

the

to

me

lending

the

the

liar nature of

financial system?

our

Let

maximum

when

are

in

I

correct

to

the

decreases

direct fashion.

more

rate—this
it

also

pressure—

portant point: what should

enough, but the
chartered-bank

monetary policy

of

Now

of the total supply of
credit, namely chartered-bank de¬
posits, which the central bank has
the legal power to control, and
thereby correspondingly reduces
the efficiency of monetary policy.
is bad

inflationary
savings.

of the real

How to Correct the Problem

part

All this

one

of

causes

it tends to
reduce the relative importance of
that

policy

monetary base, on which that pol¬
icy operates, to include as part
of

of Investment

scarce

available; nor are they
able to use price, in the form of
higher interest paid on savings

money

of

all

among

supply

In other words, as

previous

distribution

classes of borrowers of the

chartered

total

deposits in
the economy and serves still fur¬
ther, therefore, to remove our of¬
ficial

is that we
efficiency of mone¬
by broadening the

proposal

the

.

Morse, W. C. Pitfield & Company Limited, Montreal, President of Investment Dealers Association
of
Canada;
George A. Newton, G. H.
Walker & Co., St. Louis, Mo.,

credit

Continued from page 13

banks'

first

tary

Eric

President

increase

Canada's Financial System

ther

British

.

in

action,

can

can

and

monetary

be made

effective

that

economy

our

enjoy prosperity and growth

within
of

fiscal and

our

our

traditional

framework

political and economic freedom.
*An

fore

address

the

ment

Jasper,

Annual

Dealers'

Alberta,

by Mr. McLaughlin be¬
Meeting of The Invest¬
Association

June

24,

of

1961.

Canada,

Volume 194

Number 6072

.

.

The Commercial and Financial Chronicle

.

15

i

Reed

Johnston, G. E. Leslie & Co., Montreal; Mr. & Mrs. J. C.
Edwards, Matthews A Company
Limited, Toronto; Mr. & Mrs. Donald I. Webb, Merrill
Lynch, Pierce, Fenner A Smith Incorporated,
Toronto; Mr. & Mrs. Ted Percival, Merrill Lynch, Pierce, Fenner A Smith
Incorporated, Toronto

Canada's Economic Outlook
Continued from page

have

in

6

turn

spent a great deal
of public
taxes and borrowings
toward
improving Canada's ca¬
pacity, e.g. the St. Lawrence Sea¬
way, public power projects, high¬

streets,

ways,

So much for the general
setting.
Some troubles have appeared in

this

As

long as world markets are
buoyant, the Canadian economy
has functioned at a high level of

activity,

employment
and living standards. If there is
a halt in the expansion
of world
mand,

or

American

even

situation

the

in

de¬

Canada

becomes vulnerable. The situation

The

complicated by the generally
capacity situation now
existing across Canadian industry.
With the work force
at

increasing
steady rate, when the
industries turn into sta¬

slow

a

of

the labor

tries.
to

When

growth,

postwar

shift

into

construc¬

supporting indus¬

Canada

settles

restrained

such

from

proportion

In

1960

rate

industrial

of

have

labor will

Canada

to

and

heavy

experienced

percentage decline from the
peak

in

the

G.N.P.

mild recession. Some

the economy were

Salaries

and

pre¬

it

was

sectors

of

barely touched.

wages

increased

in

quarter.

Rent, interest and miscellaneous
investment income quickly recov¬

15%

ered

came

di¬

com¬

modity exports.
On

similar theme Canada has

a

commodity

imports,
which have exceeded commodity
exports every year since 1953. For
a
country with a foreign debt
equal to half of the Gross National
Product and with relatively minor

foreign investments itself, it might
be expected that Canada would
have a surplus of exports over
imports to pay for the borrowed
or
invested foreign capital. This
has

not

been

the

the

slight

a

as

case

flow

in

recent

elsewhere. Personal

never

into

reached

a

new

producing plants

economy included the following:
corporation profits- residential

construction, heavy construction,
new
machinery and equipment,
durable goods manufacturing out¬
put, freight car loadings and in¬
ventory liquidation in manufac¬
turing. Government expenditures

niques and skills has been made
in that Canada is frequently
not regarded as a completely for¬
eign country. In addition, Canada
has maintained a fairly respect¬
able reputation for decent treat¬
ment of foreign investment.

easy

So,

peak

was

7.9%

.

capital, tech¬

on

appear

the surface, Canada might
an envi¬

to have enjoyed

able

position in having developed
a rising standard of living, a
rapid
expansion of population, and very
impressive expansion in forestry,
mining

and

metallurgical

in December. On

construction




was

unemployed. The
unemploy¬
construction, mining

most serious pockets of
ment were in

the

recession

was

Short-Term

Outlook

The next question is the prob¬
able nature,
strength and inci¬
dence of the shorter term busi¬
ness

in

recovery
One of the

Canada.

major indicators of

the present year is the

anticipated
capital expenditures by industry,
and

commerce

latest

government.

taken

survey

in

The

October,

modest increase in

a

total

spending.
spent on basic

More

would

be

construction, less
on
machinery
and
equipment.
Manufacturing and transportation
anticipated lower capital outlays.
Governments, fuel and power, and
housing expected to spend more.
With

recovery in business op¬
since October there may
heavier capital spending by
a

be

private

industry

1961

as

ad¬

There

are

scattered

housing

indications

the companion
appliances and
home

of

and

these

ma¬

in which

Un¬

be

exports

we

wouldn't have
have

no

Given

Pressing Problem

an import
problem
with, because we would

deal

of

means

free

One

and

even

dian

New

of

more

a

funds for the expansion and
of

the

medium-

sized

Canadian

tions.

Many of these firms in

cent

years

American

Canada will have to keep open its
access
to world markets for its
low cost exports as a means of

dian

the

have

corpora¬

sold

principals

to

or

are

a

funds

that
for

half

or

very

be raised abroad. If this

have

duction

rate

industry has had

December

its

growth in Canada will

Canada

case,

en¬

may

find that

1960.

heavy capital expenditures.
An important policy question in
the prevailing sensitive climate of

it

is

a

financial

can

Western

market

now

regions have become strong

ital

tenders for capital.

Canada may

have

prices

could

Some

raised

observers

siderable
be

be

feel

amount

of

internally.
that

a

funds

con¬

could

sales of

internally by bonds or
equities. The likely result

would

be

supply

of

to

the

pay

higher

sibly

more

secured

limited

capital

than by equity

and

circumstance

from

personal

mortgages

ernment bonds to

savings

and

may

equities, and to

risk-seeking

shift the problem to another area

and

have to be

results

ventures.
on

Distributors!?

of

Government,

Municipal,

presence

Public

Utility,

Religious

Industrial

Institution

and

Securities

is

being closed out of the Euro¬
Common Market, the Euro¬
pean Free Trade Area, and with¬
out serious prospect of a similar
pean

accommodation into United States

markets.

liquidation in manufacturing was
at its greatest severity in the steel
consuming trades. The primary
steel industry was spared the full
impact of the decline in domestic

strong and certain pressure in
sight to develop a strong, sus¬
tained recovery which would give
us an early resumption of a good

consumption by its ability to
the

ter

export

trade

on

a

en¬

scale

without previous parallel. The de¬
cline in steel consuming inven¬
tories

was

January,
omy
to

as

a

still continuing through

1961,

though

whole had

the

swung

econ¬

back

accumulation of business

inventories.

In

any

case

there is

a

considerable opinion that there is
no

rate of economic

elimination

of

mc.

growth, and the

the

serious

unem¬

MONTREAL

ployment that is the most worri¬
some

fact

in

the

short-run

set¬

ting.

Looking

further

ahead

there

factors that are encour¬
aging for Canada.
Whether we
are

many

admit it freely or not our major
link
with
the
outside
trading
world is

by

way

of the most effi¬

QUEBEC

TROIS- RIVIERES

its

Pos¬

financing. In this

the

Continued

a

recovery.

in

of

vestment may be less inclined

gov¬

Underwriters

con¬

by the sale of debt rather

domestically-generated

corporate
away

divert

to

competition for free funds.

raised

recession, but there is a
good deal of reservation, or lack
of
firm
conviction,
about
the
probable strength of the business

especially coal — and durable
goods manufacturing.
Inventory

that

Europe, Japan and other

shallow

Perhaps it is the discomforting
of a high level of un¬
employment, perhaps the wide¬
spread feeling that in every area
of
domestic production capacity
is adequate—even ^generous, per¬
haps it is the feeling that Canada

new

financial nationalism in Canada is
whether the full amount of cap¬

and

Perhaps

a

situation has arisen in the Ameri¬

tail

pro¬

characteristic of recovery from

to

the

were

a

low

November

of

of

eco¬

encouraging sign. The

Canadian steel

to

Cana¬

more

expansion

guide the recent ad¬
in the Canadian exchanges

good recovery from

re¬

out

holding companies.

Suppose

ex¬

owned

proper

vances

Funds

pressing and

problems in the Cana¬
is the raising of

modernization

machinery
items based on servicing the re¬
source
industries, could be very
competitive
on
world
markets.

nomic

the

economy

new

some

generating new growth and
pansion.
Any major resumption of

of

difficult

buying imports.
to American,

access

European and even Asiatic mar¬
kets,
many
Canadian
forestry,
metallic, and petrochemical prod¬
ucts

foreign bororwing would

needed.

—

proc¬

petroleum and natural gas,
and
general
manufacturing.

esses,

of

mainly
on
construction,
heavy
industry and on unemployment.

is

high level.

The weak spots in the Canadian

active

The importation of

in the fourth quarter. The

covery

weakened, particularly on furnishings are moving in rather
Commodity exports slow fashion. If the stock market

labor force

equip¬

ment and other
sary

second

the third quarter, with a
good re¬

consumption expenditures in total fields

specialties neces¬
for developing the resources

machinery,

only for the
quarter, then increased in

had

we

services.

a
seasonally unadjusted basis the
peak unemployment was in midFebruary 1961 when 11.3% of the

industrial

to

that

conditions

highest levels in 20 years. The
of seasonally adjusted unemployment

Accompanying
the inflow
capital have been large imports
of

The G.N.P. declined

vances.

of

decade.

business

less

decrease.
Farmers' income increased in
spite

imported increased in 1960, partially because
capital has kept rolling in. We of anti-recession spending. One
have not yet, on balance, had to of the most disturbing features
pay
for the large investments throughout 1960 was the steady
made
in
Canada
in
the
past growth in unemployment to the
years

weak

cient export—oriented, raw
terials—processing industries.

peak at¬
tained in the first quarter of 1960.

of

rectly from the proceeds of

substantial

from

recession might be
mild decline from

a

timism

labor and the many new additions
to the work force. Last year about

of Canada's G.N.P.

as

1960 forecast
a

moderate recession from which it
is now
recovering. In terms of
vious

rather

a

down

construction to other occupations.

each

unemployed

force

more

a

able

the

abnormal

an

tion and similar

a

absorb

of

booms, and the abnormally high
of capital investment
have

export
bility or recession, the domesti¬
cally oriented industries are not
to

succession

diverted

The 1960-61
described

incidence

rate

is

abundant

shall deal

of the difficulties

some

Recent Difficulties

water,

ernment services.

demand

with

of recent months.

sewage,
education and other familiar gov¬

industrial

Garden of Eden. I

now

Mr. & Mrs. A. M. Rutherford, W. C. Pitfield A Company
Limited, Calgary; Mr. & Mrs. William S.
Gray, Doherty Roadhouse A Co., Calgary; Mr. & Mrs. D. J. Langill, W. C. Pitfield
A Company
Limited, Winnipeg

MONCTON

in¬
to

Foreign
page

16

16

Mr.

&

Mrs.

The Commercial and Financial Chronicle

K.

S. Langfeldt, W. C. Pitfield & Company, Limited, Edmonton; Mr. & Mrs.
George
Knowles, Ross, Knowles & Co., Ltd., Toronto; Mr. & Mrs. James Coulter,
Ross, Knowles & Co., Ltd., Toronto

C.

will

Canada's Economic Outlook

be

West

debt is likely to be less stimulat¬

additional

necessity

the interest

of

meeting

regularly rather than
forwarding

postponable

of

divi¬

dends.

in

the

American

tax

on

natural

gas,

restrain

may

vigorous investment in Canadian
crude

tures,

oil

States

natural

and

well

as

areas.

Changes

particularly tax
depletion in crude oil

more

in

as

gas

some

ven¬

Continued from page 7

other

The decisions of the United

Congress

on

this

matter

is

issue

run

again a vigorous immigration pol¬
icy to increase the size of the
domestic
the

market.
is

answer

for the short
to

the

skills

Canada.

I

that

believe

that

immigration

will be limited

run

that

in

scarce

are

Large scale immigration

cannot be considered until

unem¬

ployment is reduced to low levels.
Then
immigration will be en¬
couraged.
Can

Canada

retrain

the

unem¬

and direct the technical
training of the young toward the

ployed,

industries
chances

Harris & Partners Inc.

of

competitive strength
trading areas that

sooner

later will

or

have

join? This suggestion might
a
slow-working solution to
the problem of unemployment be¬
ing highest among the untrained
and the unskilled, but over a time
period it would upgrade the pro¬
ductivity of labor. Canadian in¬
dustry in the meantime has the
responsibility of holding wage in¬
seem

Affiliated with

Harris & Partners Limited

of

an

in

a

more

Canadian Broadcasting Corp.

KINGSMILL,

Ltd.

HOWARD,
F.

J.

G.

&

Co.

Ltd.

KIPPEN, W. BRUCE*

John

Kippen

Co.

&

Inc.

Montreal

HUDSON, W. S.*

Brink, Hudson & Lefever Ltd.
Vancouver

KNOWLES,

G.

C.*

Ross, Knowles & Co. Ltd.

HUNT, THOS. H.

Toronto

Ringland, Meredith & Co. Ltd.
Lethbridge
JOHNSTON,

KORZENIOWSKI, MRS. L.
Investment Dealers' Association

K. M.*

Toronto

Wood, Gundy & Co. Ltd.
Calgary

KUHNER, M. R. W.*
Dominick Corp. of Canada
Montreal

JOHNSTON, R. REED
G. E. Leslie & Co.

Montreal

LANGFELDT, K.
W.

KANIA, Dr. J. E.
Pemberton

Securities

Ltd.

C.

Pitfield

S.*

&

Co. Ltd.

Edmonton

Vancouver

LANGILL, D. J.*

KAY, R. F.

W. C. Pitfield & Co. Ltd.

Nesbitt, Thomson & Co. Ltd.

Winnipeg

Edmonton

LAUBER, R. C *

KENT, G. P. S.*
Dominion

Securities

A.

(Alberta)

Ltd.

E.

Osier

Co.

Ltd.

Toronto

LAWSON,

Calgary

obvious needs

advancing industrial nation

A.

Toronto

R.

Brennan

Saint

J.

Investment Dealers' Association

Toronto

D.

G.*

Moss, Lawson & Co. Ltd.
*

Denotes

Mr.

and

Toronto

Mrs.

competit/ive/ world is initia¬

efficiency.
and the
group of the public and
governments, will have to main¬
tive,

progress,
and
Canadian
industry,

129

St. James Street W.

Montreal

52

broader

Cornhill

London

1

E.

C.

3

tain

efficient

plant

equip¬

and

ment, and a favorable climate to¬
ward
innovation, initiative, and
high productivity levels.
On

whole, the Canadian
has solid strength, but is
through
a
period
of

economy

slowed

high levels

peared

&

Company Limited

as a

marketable

The Investment Dealers' Association of Canada

Street, New York 5

has

WOrth 2-0805

ap¬

Canada is

rich

many

resources

and

a

and

Canadian

business

initiative.

Established 1903

to

situa¬

the

In

Affiliates:

ROYAL SECURITIES CORPORATION LIMITED

stable

favorable

climate

tion of 1961 it is

-

capital invest¬

political

Member

ROYAL SECURITIES INC.
Two Wall

major short-run prob¬

with

endowed

keyed

industry

of

For the long-run

lem.

Annett

With

plant

unemployment

ment,

I INVISTMINTS 1

growth.

industrial

force,

construction

and
to

economic

labor

our

Canadian Bonds and Stocks

the

passing

unlikely that the

Underwriters and Distributors

internal conditions in Canada will

generate

CANADIAN GOVERNMENT AND CORPORATE SECURITIES

recoveries
West

and

129 St. James Street West,

Toronto, Ontario.

Montreal, Quebec.

Empire 3-7361

Victor 4-4451

ANNETT

PARTNERS

LIMITED

a

in

sus¬

It is to

American

the




Member:

Principal Canadian Stock Exchanges

economies

European

ports

of

our

Our assessment

growth.

economic

is that the short-

prospect is moderately strong,

with

greater

strength

for

the

longer-run future.
Member Toronto Stock

ROYAL SECURITIES COMPANY

that Canada will look for the sup¬

run

Affiliated with

themselves

tained business recovery.
the

220 Bay Street,

by

fourth

address
annual

Industrial

by Mr. Farrell before the
conference of

Conference

244 St. James Street
14 offices

Exchange.
♦An

Royal

Winnipeg

Equitable Securities Canada

not

injure the employment prospects.
One of the

Yonge Street, Toronto 1

will

which

levels

to

creases

Hill,

KERR, JOHN

HOVEY, W. N.*

to

Street, New York 5

Tel. WHitehall 4-0731

55

best

the

stand

in the broader

Canada

15 Broad

which

Thursday, July 13, 1961

Attended the Convention

has been invested with
low short-run returns of
longer

.

Canadian

money

Another

.

Hovey, Equitable Securities Canada, Limited, Toronto;
Edgar
Corporation, Limited, Montreal; Mr. & Mrs. Alan Chippindale,
Calvin Bullock Limited, Montreal

American

whether Canada should undertake

and

the

the

in

much

aries, and
changes

is

watched

profit and dividends.

direct

There

William

policies on retained earnings in
wholly-owned Canadian subsidi¬

ing to the Canadian economy than
foreign
equity
ownership
or
investment.

Mrs.

&

Securities

where

very

Continued from page 15

Mr.

.

the

National

Board, N. Y. C.

West, Montreal 1, Canada

serving investors throughout Canada

Volume

Mr.

194

Mrs. John

&

LECLERC,

Number

6072

Leclerc, Incorporee

C.

GERARD*

M.

A.

Kidder

&

MAYHEW,

Inc.

W.*

H.

Vancouver

LEWIS, J. M.*
Equitable Securities Canada

Sydie, Meredith & Co. Ltd.

RITCHIE, J. W.*

Wood, Gundy & Co. Ltd.

Co.

Ltd.

Calvin

Collier, Norris & Quinlan

Osier, Hammond & Nanton Ltd.
Calgary

Limited

Bullock Ltd.

Montreal

MEMBERS

ROSE, FRANCIS M.

MILLS, JOHN*

Dow

Mills, Spence &

Co. Ltd.

Jones

New

THE

INVESTMENT

York

Co.

&

Inc.

DEALER'S

ASSOCIATION

OP

CANADA

MONTREAL STOCK EXCHANGE
CANADIAN

STOCK

EXCHANGE

RUSSELL, K. G.*

Mills, Spence & Co. Ltd.

E.

Ames

Co.

&

Ltd.

Toronto

C.*

Burns Bros. & Denton Ltd.

LIVINGSTON, J. B.*

Cochran, Murray &

Co. Ltd.

Toronto

Winnipeg
C.

Pitfield

Vancouver

Calgary

New

Financial

and

Securities

Co.

Ltd.

McARTHUR, JACK*

St.

Securities

The Globe

Co.

Ltd.

ROSS*

M.*

W.

Montreal

McCONNELL,

K.*

R.

McConnell &

Co. Ltd.

C.*

McDERMID, D.

&

Co. Ltd.

Ltd.

OSTIGUY,

P.

J.

W.*

J.

PENNY,

Canada

A.

S.*

Royal Bank of Canada

Montreal

S.*

PERCIVAL, E. G.*
Merrill

Fenner

Inc.

J. H. Whittome & Co. Ltd.

W.

M.*

McLeod, Young, Weir & Co.
Ltd.

Montreal

Toronto

Mr.

Digest

IAN*

and




Mrs.

affiliate, W. C

maintain private wire con¬

branches coast-to-coast in Canada.

inquiries will be dealt with promptly. Please
inquiries to:

W. C. Pitfield

SMITH, PETER*
E.

Leslie

& Co.

30 Broad

STODGELL, S. J.*

8CCo., Inc.

Street, New York

Telephone: HAnover 2-9250

RICHARDSON, G.
Richardson

B.*
& Co.

Kingston

Corp. Ltd.

Carlile

W.

&

R.*

W. C. Pitfield 8C

McCarthy Ltd.

RINGLAND,

Company

LIMITED
Mtmbtrs ofthe Investment Dealers' Association of Canada

TETRAULT, A.*
G. B.

Securities

we

or

address

Vancouver

Toronto

York

Montreal

our

New York

our

Hall Securities Ltd.

Fry & Co. Ltd.

MARCUSSON, P. A.

Dominion

Inc.,

Calgary
TAYLOR, W. D.*

,

REID, W. G.*

MATHESON,

Orders

SMITH, BRUCE*

TAPRELL,

Nesbitt, Thomson & Co. Ltd.

A.*

Dealers'

Sons

long-standing record of

financing of Canadian public utility,
natural resource
corporations.

From the offices of

nections with
&

always available through

Toronto

REAY,

Investment

SMITH, A.*
James Richardson

a

Walwyn, Stodgell & Co. Ltd.

Duncan

Ltd.

Vancouver

B.

the

Pitfield & Co.,

Montreal

PIERS, C. R. F.

Co.

in

industrial and

SHRUM, Dr. GORDON M.

G.

Securities Ltd.

MALKIN, H. L.*

organization which has

success

Kelowna

Pierce,

Lynch,

Smith

Toronto

Vancouver

ready accdss to

Okanagan Investments Ltd.

&

McQUAID, W.

this

Toronto

Toronto

Mclaughlin, w. earle*

Such data and information is

Vancouver

Royal Securities Corp. Ltd.

Ottawa

essential to have

SHAW, D. BRUCE*

University of British Columbia

Wood, Gundy & Co. Ltd.
Winnipeg

Toronto

McKIBBIN, RALPH B.

so

fact about Canadian securities.

every current

Toronto

PARKER, Harold*

Gairdner & Co. Ltd.

prospects of Canada are com¬

greater and greater interest on the

why American Banks/Brokers, Dealers and

Institutions find it

Ltd.

Partners

Gairdner & Co. Ltd.

Montreal

Mcdonald, f. j.*

That is

SENNETT, D. M.*
&

a

part of American investors.

SHAW, H. V.*

Morgan, Ostiguy & Hudon Ltd.

-

current and future

Toronto

Toronto

McDermid, Miller & McDermid

MALLON,

M.*

McKinnon

&

7he

A. E. Ames & Co. Ltd.

B *

G. E.

Thomson

&

K.

Toronto

Wood, Gundy
Winnipeg
ORMONDE,

Toronto

Gairdner

Corp. Ltd.

manding yearly

SEDGEWICK,

Harris

O'HARA, R.*

Pemberton

Securities

Montreal

Nesbitt, Thomson & Co. Ltd.

W.*

Toronto

of

CANADA'S PROGRESS

W. C. Pitfield & Co. Ltd.

C.

Step with

and Mail

Toronto

Montreal

OBORNE, J.

Midland Securities Corpn. Ltd.

Vancouver

In

Toronto

SCOTT,

Louis

Collier, Norris & Quinlan Ltd.

Vancouver

McBRIDE,

Corp. Ltd.

Edmonton

Dominion

McAVITY, J. M.*

♦Denotes

Dominion

America

NORRIS, JOHN H.*
&

M.*

SCOTT, JAMES*

of

Star

Pitfield

E.

Toronto

Toronto

C.

D.

Nesbitt, Thomson & Co. Ltd.

SCHWEITZER, MRS. D.
Court Reporter

NEWTON, GEORGE A.*
Investment Bankers Association

Toronto

SCHAEFER,

Toronto

Cochran, Murray & Co. Ltd.

Saint John

Toronto

Ltd.

SCHULTZ, JOHN D.*
Post

NEWMAN, M. F.*
JAMES*

320 Bay St.

Montreal

Co.

Toronto^

Montreal

Eastern

&

York

Financial

The

Greenshields Inc.

MacMURRAY,

Pitfield

Montreal

NANKIVELL, NEVILLE J.

MacKEEN, R. W.*

C.

Vancouver

Chronicle

Toole, Peet Investments Ltd.

W.

Samis & Co. Ltd.

MURPHY, H. E.
Commercial

MacKEEN, H. D.

507 Place d'Armes

RUTHERFORD, A. M.*

SAMIS, J. C *
Co. Ltd.

&

Montreal

Nesbitt, Thomson & Co. Ltd.

& Co.

Ltd.

Calgary

MORSE, ERIC S.*
W.

MACKEE, J. L.*

McLeod, Young, Weir
Vancouver

MOORE, J.

Toronto

New

Securities

RODOMAR, DOUGLASS V.

MILNER, A. J.*

LIPSIT, E. C.*

The

Eastern

Halifax

Toronto

Ltd.
Vancouver

Bank

Mrs. Ken Johnston, Wood, Gundy & Company
Limited, Calgary; Gerry Clark, Wood, Gundy <ft
Company Limited, Calgary; C. L. Gundy, Wood, Gundy <ft Company Limited, Toronto

Edmonton

MEREDITH, T. W.*

Brink, Hudson & Lefever Ltd.

W.

&

Harris & Partners Ltd.

Kitchener

LEFEVER,

The

Mr.

RITCHIE, D. M.

E.*

L.

17

Mr. & Mrs. Pat Shaw,

MEDLAND, C. E.*
Co.

Toronto

A.

The Commercial and Financial Chronicle

Toronto

Montreal

LEE,

.

H. Brown, Gairdner & Company Limited, Toronto;
Gairdner & Company Limited, Toronto

JEAN-CLAUDE*

Rene-T.

.

.

J. K.

Ringland, Meredith & Co. Ltd.
Lethbridge

Burns Bros.

Montreal

& Denton Ltd.

Quebec

Montreal

THOMPSON, A. G.*
James Richardson &

Hamilton
Calgary

Sons

Victoria

Vancouver

Continued

•

on

page

18

•

Halifax

•

Kitchener

•

•

•

Edmonton
•

Toronto

•

Sault Ste. Marie

New York

London, England

Saint John

•

Cornwall

•

Medicine Hat
•

Moncton

•

Ottawa

•

•

•

Winnipeg

Vancouver

Kingston, Jamaica

Brussels

•

Geneva

Che Commercial and Financial Chronicle

Gordon

Richardson, G. R. Richardson <fi Company, Kingston, Ont.; Mr. & Mrs. John Norris,
Collier, Norris & Quintan, Ltd., Montreal

Attended the Convention
C.

TORREY, A. S.*
W.

R.

C.

Pitfield

&

Co.

Ltd.

Montreal

Nesbitt, Thomson & Co. Ltd.

Greenshields

Inc.

Graham,

M.

Lewis, Equitable Securities Canada, Limited, Toronto;
Duncan, Annett <ft Company, Ltd., Toronto

WITHERS, MICHAEL*

Armstrong

Securities

&

Mrs.

Allan

YOUNG, GEORGE W.*
Dominion Securities Corp. Ltd.

Wood, Gundy & Co. Ltd.

Ltd.

Mr.

7

Toronto

Toronto

D.

Merrill

I.*

Lynch,

Pierce,

Fenner

Smith Inc.

Wood,

Gundy

&

Co.

Ltd.

Vancouver

Locke, Gray & Co. Ltd.
Calgary
WALKER, W. S.

W.*

WEBB,

WEST, J. J.*

TURNEY, A. H.*

Ltd.

Vancouver

TINGLEY, H.

John

Thursday, July 13, 1961

Toronto

Toronto

THOMSON, W. E.*
Securities

Mrs.

VALOIS, LOUIS H.*

&

TREBELL, F. D.*

Halifax

Pemberton

&

.

Montreal

Continued from page 17

THOMPSON,

Mr.

.

.

Wood, Gundy & Co. Ltd.

Investment Dealers' Association

Montreal

Toronto

BELL, GOUINLOCK & COMPANY

WHITE, ROBERT A.

LIMITED

Bongard & Co.
Toronto

ESTABLISHED

1920

WILLIAMS, E. J.*
James Richardson

Sons

&

44 KING STREET

Winnipeg
WILLIAMS, L. B.*

WEST, TORONTO

Hagar Investments Ltd.
Victoria

UNDERWRITERS AND DISTRIBUTORS OF

WILLIAMS, V. B.*
C. M. Oliver

& Co. Ltd.

CANADIAN

GOVERNMENT, MUNICIPAL

Vancouver

A

Copy of

our

monthly

WILLIS, B. G.*
Greenshields Inc.

AND CORPORATE SECURITIES

Toronto

Investor's Digest

WILKINS, D. J.*
Fry & Co. Ltd.

AFFILIATES

Toronto

is

available

on

request

BELL, GOUINLOCK & CO.

WILSON, ROSS*
A.

E.

Ames

&

Co.

Vancouver

74

WINSLOW, MRS. J. D.

WILLS, BICKLE & COMPANY
MEMBERS

THE

44

King

Street

West

DEALERS'

Members

Montreal

New York

Stock

Montreal

Winslow & Winslow Ltd.

OF

TORONTO STOCK

INVESTMENT

LIMITED

Trinity Place

Woodstock

LIMITED

THE

LEGGAT, BELL, GOUINLOCK

INCORPORATED

Ltd.

EXCHANGE

ASSOCIATION

OF CANADA

368-3081

Toronto

1

James Richardson & Sons
Established 1857

Members
FOUNDED

All Major Canadian Stock

i

1885

and

Commodity Exchanges

The Investment Dealers' Association of Canada

BROKERS

VANCOUVER

CALGARY

•

PRINCE GEORGE

in

listed, unlisted securities

MOOSE JAW

GALT

•

•

EDMONTON

MEDICINE HAT

SWIFT CURRENT

•
•

LEAMINGTON

•

•

•

WINNIPEG

•

LETHBRIDGE

BRANDON
SIMCOE

•

•

•

KENORA

CHATHAM

TORONTO

•

REGINA
•

•

•

MONTREAL

•

SASKATOON

KINGSTON
WINDSOR

•

•

•

VICTORIA

•

PRINCE ALBERT

KITCHENER

•

LONDON

LONDON, ENGLAND

and commodities in the
United States and Canada

THOMSON & MSKINNON
2
CHICAGO

43

.

Affiliate

Broadway, New York 4
INDIANAPOLIS

TORONTO

James Richardson

offices in the United States and Canada

MEMBERS NEW YORK STOCK EXCHANGE AND OTHER PRINCIPAL
7
SECURITY AND COMMODITY EXCHANGES




V

&

Sons, Inc.

Investment Securities
14

WALL

STREET, NEW YORK 5

Telephone:

DIgby 9-2850

Exchange

Volume

Number

194

6072

.

.

.

The Commercial and Financial Chronicle

19

CANADIAN and OVERSEAS

SECURITIES
We maintain trading and research facilities

in Canadian

and Overseas securities.

PANY

Established

LIMITED

1886

MEMBERS
TORONTO
THE

Orders

Evelyn Bradbury; Mr. & Mrs. Thomas Bradbury, Brawley, Cathers & Company,

STOCK

EXCHANGE

INVESTMENT DEALERS' ASSOCIATION

executed

on

Private wire to

all

OF CANADA

exchanges

New York

Toronto

11 Jordan Street

Cable:

TORONTO

RELSO

—

our

Telex: 02-2095

—

SECURITIES

CANADIAN
We

EMpire 6-8871

75th year

specialize in servicing dealers by obtaining

placing blocks of Canadian listed or over-the-counter

or

securities.

Our
on

Trading Department maintains firm

able for all

Mr.

&

Mrs.

Richard

Lauber,

A.

E.

Osier

Company,

Ltd.,

markets

listed and unlisted issues in U. S. funds and is avail¬

types of dealer transactions.

DEPARTMENT

TRADING

Toronto

EMpire 6-5831
TELEX 02-2461

WISENER,

COMPANY

MACKELLAR AND
LIMITED

MEMBERS

MEMBERS
THE

INVESTMENT

ASSOCIATION

THE TORONTO STOCK EXCHANGE

DEALERS

OF CANADA

220 Bay Street,

Mr.

&

Mrs.

Mait

Newman,

Murray & Co., Ltd., Toronto; Eric Morse, W. C. Pitfield
Charles L. Gundy, Wood, Gundy & Company, Limited, Toronto

Cochran,

Company Limited, Montreal;

Toronto 1, Canada

<fi

McLeod,Young,Weir & Company
LIMITED

50 KING STREET

WEST, TORONTO, CANADA

Montreal Ottawa Winnipeg London Vancouver
Hamilton Calgary Kitchener

&

_

MillSfi
W

Co.

1®®*

tlS

New York

Sp®

C.«.^^s*cm^vobk6,nx

Quebec

Sherbrooke Windsor Edmonton

l-D-A

bboadway

OF

Complete Facilities
for

Underwriting, Distributing and

Limited

Trading Government, Municipal and

Corporation Securities

>.Unor-




(Aerobe'. Toronto Slock
'°.hkontO
bet»

< *
E*d>an9

CANADA

•

Stock orders executed
on

all Exchanges

The Commercial and Financial Chronicle

20

.

.

.

Thursday, July 13, 1961

Ramsay Securities Co. Limited
Members
Investment Dealers' Association

197

BAY

of Canada

STREET, TORONTO

Telephone EMpire 3-2078

Mr.

&

Mrs.

Frank

Mr.

&

Mrs.

Peter

McDonald, Gairdner & Company Limited, Toronto; Mr.
Nesbitt, Thomson and Company Limited, Toronto

&

Mrs. J.

I. Crookston,

L. G. BEAUBIEN * C°
LIMITED

UNDERWRITERS

DEALERS

AND

Specialists in Securities Originating in the
Province

of QUEBEC

Government, Municipal, Corporation,
School Commissions, Parishes and

Fabriques,

Religious Institutions.
WEST

221 NOTRE DAME STREET,

MONTREAL 1
Quebec

Trois-Rivieres

Underwriters

.

.

Geneva

Distributors

.

.

Government of Canada Bonds

Provincial and

Sorel

Chicoutimi

Brussels

Paris

i

Shawinigan

St. Hyacinthe

Sherbrooke

Ottawa

.

.

Dealers

Crysdale,

Mason & Crysdale Limited, Toronto; Mr.
Cochran, Murray & Co., Limited, Toronto

&

Mrs. John

B.

Livingston,

Treasury Bills

Municipal Debentures

Corporate Bonds and Shares
Prime

Acceptance and Commercial Paper

EQUITABLE SECURITIES CANADA LIMITED
Member of The Investment Dealers' Association

of Canada

EQUITABLE BROKERS LIMITED
Member

of The Toronto Stock Exchange
Head Office

60 Yonge

Street, Toronto, Canada

MONTREAL

U. S.
Direct

KITCHENER

HAMILTON

Subsidiary: Equisec Canada Inc.

private wire with Goldman, Sachs & Co., New York

Mr.

&

Mrs. B. A.

Mr. & Mrs.

Mallon, McLeod, Young, Weir & Company, Limited, Toronto;
Tony Corson, McLeod, Young, Weir & Company, Limited Toronto

CANADA—
Service

on

all Securities

When you

require information

Canadian

Industrial, Mining

research and

1

trading facilities
Monthly Bulletin

or

quotations

on

on any

Oil security,

or
are

our

at your disposal.

Request

Ross, Knowles & Co. Ltd.
Members: The Toronto Stock Exchange
and The Investment Dealers' Association
25 ADELAIDE

Hamilton

STREET

Brantford
London




WEST

Brampton

of Canada

TORONTO, CANADA

Sudbury

Sarnia

"Windsor

Niagara Falls, Ont.
Mr.

& Mrs. Michael

Grills, McLeod, Young, Weir <& Company, Limited, Montreal; Douglass Rodomar,
Calvin Bullock, Ltd., Montreal

Volume

194

Number

6072
*

.

.

.

The

Commercial and Financial Chronicle

21

i

C. H. BURGESS & COMPANY, LIMITED
DEALERS

IN

INVESTMENT
SINCE

Members

Toronto Stock

Investment Dealers'

255 Bay St., Toronto

SECURITIES

1909

Exchange

Assn.

of Canada

EMpire 4-8471

•

Branch—Brantford, Ontario

Mr.

&

Mrs.

Roy

B. Brookes, Royal Securities Corporation, Ltd., Edmonton; Mrs.
Calgary; John Penny, Royal Securities Corporation, Ltd., Toronto

Ervie

J.

Doran,

MATTHtWS

6-

COMPANY

LIMITED

Established

1909

Members:

X

Toronto Stoek

Exchange

Investment Dealers' Association of

220

Bay Street
Direct

Mr. & Mrs. C. W.

Toronto, Ontario

Connections with

New

Canada

EMpire 4-5191

York and

Montreal

McBride, Midland Securities Corporation, Limited, Toronto; Mr. & Mrs.
Ed Williams, James Richardson &
Sons, Winnipeg

nU&COMpAtiy

„tC0N
i

L

MmUrs /nhtslmenl
GowBaonf,

181

Bill

Walker,

James

Investment Dealers Association of Canada, Toronto; Mr. & Mrs. Paul
& Sons, Edmonton; Mr. & Mrs. Olin Buker, James Richardson &

Richardson

BAY

COrM'

'<***"
m

i

e o

r

DialerV Association of Canada

Municipal and Corporation

STREET,

Bonds

TORONTO

1,

CANADA

H. Carpenter,
Sons, Calgary

Walwyn, Stodgell

Co.

&

Limited
Members:

Toronto Stock

Exchange
Winnipeg Stock Exchange
The Investment Dealers' Association of Canada
The

I

STOCK ORDERS

44 KING

EXECUTED ON ALL EXCHANGES

STREET

WEST, TORONTO

EMpire 4-1131
WINDSOR

Mr. &

Mrs.

Arthur

Torrey, W. C. Pitfield & Company Limited, Montreal; Kenneth Sedgewick,
& Company Limited, Montreal; Mrs. D. Bruce Shaw, Toronto

Pitfield




W. C.

WINNIPEG

HAMILTON

CORNWALL

PORT HOPE

The Commercial and Financial Chronicle

22

"V

•

FOR

.

.

.

Thursday, July 13, 1961

YOUR INVESTMENTS
IN THE WEST

carlile & McCarthy
LIMITED
Over

30

Years

in

Western

Canada

MEMBERS

INVESTMENT DEALERS ASSOC.

THE

OF CANADA
Direct

Private

Wires

All

To

Leading Exchanges

Offices:

Calgary

—

Edmonton

Vancouver

—

—

Victoria

|

Mr.

&

Mrs.

Bud

Willis,

Mr.

&

Greenshields Incorporated, Toronto; Mrs. Bryce Farrill,
Frank Trebell, Greenshields Incorporated, Toronto

Toronto;

Mrs.

KERNAGHAN & CO. LIMITED
INVESTMENT SECURITIES

2nd Floor, 67

Richmond St. W., TORONTO, EM. 4-4256

Specialists in Special Situations.

thomson kernaghan & co. ltd
Members The Toronto Stock

Mr.

Exchange

&

Mrs.

R.

K.

McConnell, McConnell

& Company, Ltd.,

Toronto

KIRPEN & COMPANY INC.
Established 1922
Members
Montreal Stock

Canadian Stock Exchange

Exchange

The Investment Dealers' Association of Canada
607 St. James Street West

MONTREAL

Telex: Montreal 01-2440

Telephone: UNiversity 6-2463
Stock orders executed

Direct

on

all Canadian Exchanges

private wire

—

Mr.

&

Mrs. Jean

Leclerc, Rene T. Leclerc, Incorporee, Montreal; Mr. &
Graham Armstrong Securities Ltd., Montreal

Mrs. Louis H. Valois,

Toronto

A COMPLETE TRADING SERVICE FOR DEALERS

& BROKERS IN CANADIAN BONDS AND STOCKS

OVER-THE-COUNTER STOCKS.

ALL

—

INQUIRIES INVITED-

John

Rene T. Leclerc, Incorporee

Sydie,

Sydie

Sutherland & Ritchie, Ltd., Edmonton;
Carlisle & McCarthy Ltd., Calgary

W.

Rees

Taprell,

Investment Dealers

Member of
The Investment Dealers'

{Association

of Canada

Rene T. Leclerc Co.
Members of

Montreal Stock Exchange
and
Canadian Stock Exchange

132

St. James




Street, West, Montreal

Mr.

&

Mrs. D. E. M.

Schaefer, Nesbitt, Thomson and Company Limited, Toronto; Mrs. Ian Crookston,
Ross Calder, Nesbitt, Thomson and Company Ltd., Calgary

Toronto;

Volume

194

Number

6072

.

.

.

The Commercial and Financial Chronicle

23

Canadian Government and

Corporation Securities

S$icAa/<</dc/i
4

King Street West

&£

&

Toronto

•

Telephone EMpire 2-6121

affiliate of

T. A. Richardson & Co.
Mr. &

Mrs. S. J.

Members The Toronto Stock

Stodgell, Walwyn, Stodgell & Co., Limited, Windsor; Mr. & Mrs. M. R. W. Kuchner,
Dominick Corporation
of Canada, Montreal

Exchange

Dealers in

Government Bonds

SAUNDERS, CAMERON LIMITED
FIFTY-FIVE YONGE
Mr.

&

Mrs.

Robert

Mrs.

TORONTO

Graham, Osier, Hammond & Nanton, Limited, Winnipeg;
Meredith, Calgary; Mrs. Donald Webb, Toronto

STREET

1, CANADA

Thomas

EMPIRE

6-8601

Cochran, Murray 8

Co.

Limited

,

Government, Municipal
and

Corporation Securities
•

Mr.

&

Mrs.

John

Kenneth

M. McAvity, W. C. Pitfield & Company, Limited,
Vancouver;
Sedgewick, W. C. Pitfield & Company, Limited, Montreal

M.

Cochran. Murray 8
Limited

Hay

Members of the

Toronto Stock Exchange
Dominion Bank

Bldg., Toronto, Telephone EM. 3-9161

Hamilton

London

Kitchonor

Midland Securities Corpn.
Mr.

&

Mrs. D. M.

Limited

Sennett, Harris & Partners Limited, Toronto; Mr. & Mrs. Robert W.
Jr., Bell, Gouinlock & Company, Limited,
Toronto

Gouinlock,

Members

The

Investment

Dealers'

Association

Canadian Government,
and

TORONTO

STE.

Municipal

Corporation Securities

LONDON

SAULT

of Canada

MONTREAL

MARIE

SARNIA

ST.

HAMILTON

THOMAS

KITCHENER

BRANTFORD

Affiliated with
The Midland

Company Limited

Members: Toronto Stock Exchange
Montreal Stock

Exchange
Canadian Stock Exchange

Mrs.

James




MacMurray,

St.

John,

N.

B.;

Mrs.

Jim

Edwards,

Toronto

Midland Canadian Corporation
2 Wall Street
New York 5, N.Y.




»-

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