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In 2 Sections
ESTABLISHED 1S39
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■
IB
M
^1^ BL B B
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Sectnn
MB
B
v^JtliiUJN 1v^JLl
Reg. U. S. Pat. Office
Convention Number
New York, N.
Y., Thursday, June 22, 1950
Pttet 30 Certs
»
ESTABLISHED 1S39
In 2 Sections
-
Section 2
"The Commercial w
inancial
Chronicle
Reg. U. S. Pat. Office
invention Number
New
York, N. Y., Thursday, June 22, 1950
Price 30
Cents
a
Copy
THE
2
COMMERCIAL and FINANCIAL
Thursday,
CHRONICLE
Downtown Montreal grows
areas
were
upward with new tall buildings. Surrounding
municipalities grow outward—further and further into what
fields—new streets of houses, new industrial districts.
and
Today,
QUEBEC
on
homes
and
the Island of Montreal alone, there are some 65,000 more
1,800 more factories than in 1939. Meanwhile, in the rich
mining districts of Northwestern Quebec which we serve, activities are
expanding rapidly.
New
customers
demand
electricity, and old customers
use
more
than
they did.
To
-Hifdro-Qwbec
supply them — these old and new customers — Hydro-Quebec is ac¬
tively pursuing a vast expansion programme for the creation of more
electricity and its ever-wider distribution.
June
22, 1950
c
Conve Hon
Number
THE
COMMERCIAL
and
FINANCIAL CHRONICLE
c
DEALERS' ASSOCIATION
gmS':g^g
of Canada
OFFICERS 1950 -1951
HONORARY
PRESIDENT
HONORARY
PRESIDENT
VICE-PRESIDENT
VICE-PRESIDENT
c
Peter Kilburn
J. A. Gairdner
Greenshields
&
Co.,
Inc., Montreal
VICE-PRESIDENT
Gairdner & Co.,
Toronto
VICE-PRESIDENT
Co.,
Ltd.,
F. J.
VICE-PRESIDENT
Gingras
H. R. Farnsworth
Royal Securities
Corporation, Ltd.,
Royal Securities
Corporation Ltd.,
Calgary
Rene-T.
TO
F. L.
SECRETARY-
HONORARY
TREASURER
TREASURER
&
VICE-PRESIDENT
Vancouver
EXECUTIVE
PRESIDENT
Brennan
Company Limited,
St. John, N. B.
Montreal
VICE-PRESIDENT
Montreal
Ltd., Toronto
ASSISTANT
F. J. Brennan
Ryan
L. G. Beaubien &
Leclerc Inc.
Gerard
G. F. W. Burns
Burns Bros. & Denton
THE
Gerald G.
Ltd.,
Glasgow
Hammond
Nanton,
Ltd.,
Winnipeg
DIRECTOR
OF
EDUCATION
m
•HP
#
I
5
i
I
I
Joseph W. G. Clark
Investment
Assn.,
1
3
Dealers'
Toronto
J. A.
Kingsmill
Investment
Assn.,
Dealers
Toronto
(i
-m'
I
I
R. G. McCulloch
Osier,
S&f
C. L. Gundy
H. L. Gassard
Wood, Gundy & Co.,
Ltd., Toronto
Investment Dealers'
Assn.,
Montreal
&
FINANCIAL CHRONICLE
THE COMMERCIAL and
don't propose
I
statistical
this time but
figures will indicate the
and strength
alysis
at
dian
our
Vice-President, A. E.
health
dustry's
had
again
budg¬
tax
Notes
taxes.
calendar
1949
in
the
expenditures
year
aro k
In
ihin«
pro
t
more
thar
don't make a
p
mately
charge
broke
go
the
on
a:
of
,;
1,1 J1!
our
->fit,
,!
I
.
we
um'
beeom.
other
which
the
k,
system
Ignorance breeds'
distrust
tools
suspi
tJl l
are
"fellovMravenS
fostering
knowledge through
intelligent educational and
p*
relations
efforts, business
make a splendid
contribution
to"
ward the preservation
Stresses Canada's stake in preserving
capital account.
on
we
State
of
democracy and free enterprise throughout world.
$284
_
spend
and
offset by rise
decline in Canadian corporations' financing,
some
surplus
for
—
taxation
of
some
a
etary
*
and strength in Canadian
Sees high government expenditures causing some concern, and
dangerously dose to dampening incentives, but calls attention to
relief in 10% credit on dividends applied against personal income
economy.
Gov¬
Canada
banker, in reviewing recent economic and financial de¬
velopments in Canada, points out factors in health
in
this regard.
The
,.,rt
are be»
h"sh.about the
-
if
Canadian investment
con¬
ernment
re
There should be
we
in¬
tribution
Association of Canada
Ames & Co. Limited, Toronto
President, The Investment Dealers'
economy
and
ago, I am glad to
ing fruit.
Cana¬
the
of
'
an¬
few
a
B. RIDLEY*
By JOHN
to give you an
financial
22
in Sound Shape!
Canadian Economy
extensive
Thursday, .iune
life, including
01 our
way
free enter.
our
|
prise system.
million
against $640
Dividends
in
million
all shares are paid
on
already
1948. The sur¬
felt the weight of corporation inplus
with
funds
from
other come taxes. Only confusion could
sources permitted
a reduction of have resulted from any differentiover $600 million in the outstand¬
ation. Presumably, this is just a
John
domestic
ing
funded
B.
The
debt.
of
out
Ridley
start
profits that have
the elimination of the in-
on
only public borrowings during the
iquitous double taxation
by the Canadian Government
$100 million in the United
States for refunding and the sale
porate profits.
year
of
to
for further relief in this
press
million Canada Savings field. The risks and responsibiliof
which
$140
million ties involved in enterprising inare
sometimes
great.
through Payroll
Savings. vestment
$293
Bonds,
were
The payroll
Savings organization
again supervised by Invest¬
was
Dealers whose
ment
in
small
no
efforts
were
responsible
measure
It
is only
that an
offsetting profit possibility should
sense
common
be available
as
incentive. Our
an
the combined efforts of those stal-
950,000 individuals purchased
Canada Savings Bonds during the
wart, venturesome Canadians
year.
gence,
outstanding
success.
High Government expenditures
continue
to
cause
some
concern.
The Minister of Finance forecasts
a
budget surplus for the
current
of only $20 million and ex¬
sum of
year
penditures of the colossal
$2,410
million,
of
those
almost equal to
previous year. Fur¬
the
ther relief from the
levels
severe
of taxation it appears must come
from reduced
effort
expenditures. Every
to
bring this about should
Taxation has been
dangerously close to the point of
be encouraged.
dampening incentives
essential
so
further
to
development of our
resources.
Some expendi¬
great
ture
is
so-called
on
undoubtedly
demand for
social
services
justified
but
a
increased burdens in
who, through hard work, intelli-
imagination and thrift have
natural
idle
converted
to
important
raised the
As the
resources
and
use
thereby
living standards of all.
savings of the people are
widely dispersed than
more
ever
The heavily
should not be
only
attitude
a
that
the
State
owes
a living. The State can
only properly serve the citizens
everyone
individual
the
pay
the
costs
baby
bonuses,
struction
costs
in
in
result
debt
in
con-
instances
some
out of proportion to the value of
services
facilities.
and
Corporation bond and stock fi-
nancing,
the
on
other
hand,
ifoTraultlns^Zoubt from^an"t
development in Canada is in rela-
non-contributory pensions without tively early stages and a
stantial
capital
test, social medicine, etc.
expansion
gram is in
»
Dividend Tax Reductions
sub-
sensible
extension
dends
shares of Canadian tax-
on
paying
credit
to
all
divi¬
corporations of the 10%
against
personal
income
taxes. Your Executive
,,
attention
Finance
the
of
the
borrowing figures
fiest, there
in
was
again
expenditures
unfairness
of
the
on
an
sug-
increase
capital account
"figures M^excl™ hMof
and Maintenance exDendi
markable
repair
Place in such
place in sucn
think,
was
an
bringing
re¬
the
Pessimism
A year
important
about
of
In
an
ago,
business
has
some
were
conditions
fearful
then
pre-
have been of
development.
by Mr. Ridley at 34th An¬
Meeting of The Investment Dealers'
of
Canada, Seigniory
Montebello, Can., June 7, 1950.
fast
recession
late
in
1948
which
commenced
largely to
inventory adjust-
appears
an
ment
♦Address
was
Club,
Curtain.
How
rpbe extent 0f the devalua-
^ion,
however,
much
was
more
substantial than prognostications
suggested. In that it assists "soft"
enough
tragic
that
some
are
midst and
the very freedoms
use
traitors in
our
cherish to sabotage our treas¬
we
ured
10 CATtt
heritage. The known Com¬
sidious
tries
ill
senseless souls
owing to existing price
discrepancies between "soft" currenCy and "hard" currency coun-
pected
be
if the
rotten philosophy of Communism
could be kept behind the Iron
munist
be handled.
can
influence
Their in¬
others
on
is
ill ii
harder to cope with.
Gentlemen,
that
is
trial.
on
plishments
^
Its
5MAtt
m
should recognize
enterprise system
we
free
our
Its
material
sffSSa
accom¬
apparent to
are
spiritual
currency exports to North Amer-
us
tenets—freedom
all
of
PLANT
should be
5ITE5
special
,
i?Lm£rvrSSJra
¥, Programme
U~
conceived
P.
?
yS a
y
°
" and
ln
expof.t1s1
rf g aa
}1
*as, anh£?plS ?d and dlfflcult
sad
Patience and
"2 Ln
f
Cantankerous
trols
character. The position has
reversed itself. Since the middle
of
1949
production
has national
income.
has
risen
This
should
perse-
th?
n
WOrld trade in which Western
Eu™pe pIays an essential part,
,.,nada;! economic activity is
influenced by conditions
P the world.
This is
S
?as* Bu(*get
t?
Minister of FiPaP^
ni°W+ °niy
hours
h
S?
+° ,B°mbay; J5
hours from Toronto to London; 36
.
•
bureaucratic
be
enlightened
con¬
eliminated.
Un¬
and
unfortunately
leadership
too
fre¬
subversive
ls
J?a^' *™Provement
™ ,uc,
from
tralia.
Under such conditions isois a thing of the
past
Vancouver
to
Aus-
lationism
In
one
respect
wofld eonditP;®ats
yF "
Struggle between twfide!
?• ngleS T3 devel°Ping- The Eng-
as
reces-
sian
has
years
never
had
The Rug_
it
cannot
recognize it and refuses to countenance it. The
English-speaking
world's
It
philosophy is
permits
with
God fearing
and
ship by every
encourages worman in accordance
his
own
religious beliefs
Communism is a form of
uglv
atheistic materialism
Democracv
is based
on
MA rket dm*
^n.1Jed
+0Inn, S1J
*
over
Canada's
Association
change
on
'little llsh"{spea^g world has struggled
?r'f«Ught for and Preserved freedom for
8qq
verv
vailing in the United States. The
nual
9.1%
would
It
ex-
ataosnhere
atmosphere.
change. Senior shares have played
and are playing a substantial
part
in providing needed
capital for
further
dollars
Sept 19>
on
by
hSTvio^tft ?S
of
shares. Our submission in this
in
This
S.
cur-
FOx
tions.
quently
unbalances
that
nroductive
partnership,
great
Capital,
Management
one
of
and
Labor.
Neither
of these three should be
guilty
vilifying utterances concerning
the other. Reasonable
compromise
and successful negotiations
should
oersist
tion
toward
of
peaceful
a
natural
solu¬
differences
of
opinion.
Otherwise, comfort is
given to the Communists and there
small break in the
dyke
protecting freedom which, if not
oromptly repaired, can become
occurs
a
dangerous.
A real appreciation of the
other
fellow's problems is the best
way
to
assure
that attitude of
good
neighborliness
working
the sacredness of
the
out
so
necessary
in
peacefully and sat¬
isfactorily
the
many
problems
sensitive democratic sys¬
tem. Business for
many years was
facing
a
too
a
tures
gard, I
of U.
Canada
20.
their
of
by 30 5%
and
King-
countries
^rrnvrv—t: aTghfs g-s Asr-ssra- E
rgaaSins$t'T30150llmmionni1n91948S
original suggestion that this apply
only to dividends on common
factor
value
terms
K
United
other
Committee
Minister
new
hours
,
promptly and forcefully drew to
the
rencies in
gept.
the
many
the
__the n
no opposition; it has
regard for compromise and no
u
pro-
prospect.
As these
The only tax relief of note since
last Annual Meeting was the
reduCed
in-
an
means
our
and
for
in
an
orderly
Municipalities particularly should scrutinize their capital
is
of
which
dom
cared
willing and rehabilitation and extension exdesirous of shouldering citizen¬ penditures
so
necessary
in the
ship responsibilities. We should nostwar period passing their peak.
The outstanding exception to this
constantly be reminded that it is
the people, not Governments, that was the petroleum industry where
if
the
was
international exchange rate struc-
manner.
new
security
waste but breeds an
in
event
5
curity.
social
important
international finance
^ure
it brooks
is
no
comprehension of honest negotia¬
most
.
crease
Overdone
The
,
called upon to provide funds for
further experiments in social se¬
is not
and
tianium
_
expenditures carefully. High
prevalent.
at
speech and of the press, religious
constructive, at
be preserved as
freedom,
preservation
of
the
ieas^ temporarily. It should tend
sanctity of the home and of in¬
courage the many new savers to j-0
replace some of our excessive
dividual rights—are
follow the
lead of their
courvastly more
u. S. dollar purchases with inimportant. All these are worth
ageous
and
enterprising
fore- creased ones from the
sterling
bearers.
working and fighting for. I be¬
area
and Western Europe and
lieve that sometimes an apprecia¬
Provincial and municipal govthereby might improve our techtion of sensible compromise and
•ernments continue to have sub- niCal
foreign payment problem,
reasonable
stantial borrowing
negotiation essential
requirements. However,
only if it leads to ultifor the preservation of free en¬
for capital account which resulted
mate free convertibility of curin a net increase in Provincial and
terprise is sadly lacking. Competi¬
rencies will it be of lasting benetion in a democracy is the "snice
Provincial-guaranteed bonds dur- fh to Canada.
of life," but it can and should be
ing 1949 of $140 million and in
tt.L
,,
TT
.,
friendly.
Those
who
municipal debentures of $18 milset
cla^s
tr4T.f,jftTn haxTfx L?.
®
lion. These and refunding needs
against class should be despised.
all
too
resources
new
ore.
;
must
incentives to en-
were
burdened taxpayer
of
petroleum,
as
possibilities
profit
before,
direction seems particularly
inopportune. A "robbing Peter to
pay Paul" attitude is sometimes
this
development
such
country has become great through 1949
Some
for the
is
of
undoubtedly the impor- through sensible negotiations. The
tant influence of discovery and hateful thing about Communism
iron
cor-
on
of
gence was
strenuously
We should continue
were
God-given right
was not individual's
reflected similarly in economic ac- self-determination. Its strength
tivity in Canada. One of the main its respect for the necessity
reasons for this unusual diver- reasonable compromise arrived
sion in the United States
prone to hide its light under
bushel. The other fellow's nrob-
lem
can't
be
appreciated without
Manitoba, Canada s Centra
the Department o
Industry and Commerce main¬
tains a complete consulting an
advisory service to all manuta •
In
Province,
considering expansion.
research
statistics .. •
turers
Market
continuing inventories ot plan
sites
lists of manufacturers
.
.
.
suitable for
latest
of
onJM
comprising Western '-a
from the Great Lakes t
Rockies.
done in
efforts.
professional
gent
tional
attention
and
grammes.
try's
educational
commended
relations
and
work
spreading this
through
to be
good
efforts
for
business
25-49|
ment 171
oublic
the intelli-
Many
business
associations
to
are
educa¬
relations
this
copy,/1"®
awareness
investment
in
free
being
and
given
public
The
is
a
your
letterhead to Depar
gratifying that business is
showing a keen awareness
and
tirr:je
,
For
on
is
this
economic survey
"Manitoba—and
the V/ester"
Market" presents details
extensive and wealthy ^
information being read¬
ily available.
It
nro-
indus¬
directibn
started in real earnest five
years
license
asking/
The
accurate
now
contract or
arrangements . .. available s
agents ... all yours for the
INDUSTRY and
LEGISLATIVE
WINNIPEG
C0M_,
BUIlDjl
MANITOBA
|
Convent'
Number
on
THE
COMMERCIAL
and FINANCIAL
CHRONICLE
In Attendance at I.D.A.C. Convention
CAYLEY, A. B.
AGLa^Mr&
Af|:l.toes&Co,Ltd.,
Toronto
of America,
«■
.
&
Co., Ltd.,
'
Co., Ltd.,
Toronto
Associa-
Boston
Calvin Bullock
v
Co., Ltd.,
Limited,
GASSARD, H. L.
A. E. Ames &
Montreal
ertl, e. c.
"Financial Times," Montreal
Investment
Co., Ltd.,
tion of
.
A. M. Kidder &
Associa¬
Canadian
Co., Montreal
Alliance
Corp., Ltd.*
Montreal
FRANCIS, FRANK
"Montreal
Montreal
evans, wi j. s.
Gazette," Montreal
GELINAS, L.
Geoffrion, Robert & Gelinas,
Montreal
FRASER, G. LYALL
Guildhall Securities Ltd.,
Montreal
James Richardson & Sons,
Dealers'
Canada, Montreal
GEE, II. W.
FITZPATRICK, F. M.
'
\
CHOAT, J. E.
bagnall, e. m.
jp j. Brennan & Co., Dta.,
FISHER, PAUL
&
evans, f. o.
McLeod, Young, Weir & Co.,
CHIPPINDALE, ALAN
.Montreal
Crawford, Toronto
edmonds, o. r.
Walwyn Fisher
Toronto
W. C. Pitfield &
rabbjtt, g. m.
Biggar &
Cayley
Toronto
CHALMERS, L. P.
•
.
Afo^EdSABankers
tion
Bartlett,
Co, Ltd, Toronto
Western
City Co., Ltd.,
GENDRON, J.
Vancouver
"Toronto
J. T. Gendron Inc., Quebec
•
CLARK, J. W. G.
Charlottetown
Investment
baker, R. D.
James
farnsworth,
tion of
Richardson & Sons,
Dealers'
Associa¬
Canada, Toronto
Calvin Bullock
baker, t. h.
Milner, Ross
Calgary
Co., Ltd., Toronto
Canadian Dow Jones &
Bank of
GILMORE, J. D.
Canada, Ottawa
Dominion Securities
GAIRDNER, J. A.
Deacon Findley
Ltd., Toronto
Montreal
GINGRAS, G.
Rene T. Leclerc
GAIRDNER, J. S.
Ltd., Toronto
Coyne & Co.,
Gairdner &
Co., Ltd., Toronto
Peter
fisher, a. p.
Collier, Norris & Quinlan,
Ltd., Montreal
GARDINER, G. R.
Walwyn, Fisher & Co., Ltd.,
D.
Curry & Co.,
Winnipeg
George R. Gardiner Ltd.,
Toronto
Inc., Montreal
GLASGOW, E. E.
Montreal
COLLIER, W. T. K.
Corp., Ltd.,
Toronto
findley, j. r.
Wood, Gundy & Co., Ltd.,
bawden, h. n.
Dominion Securities Corp., Ltd.
Co.,
Toronto
Gairdner & Co.,
COLE, J. N, /
& Co., Ltd.,
A. E. Ames &
GILL, W. B.
-
Montreal
& Co., Toronto
Wood, Gundy
Royal Securities Corp., Ltd.,
favreau, v.
Credit Interprovincial
Ltd.,
Limited,
New York
BARRY, G. A
FULLERTON, C. G.
GAMMELL, II. G.
CLARK, R. E.
Winnipeg
ii. r.
Toronto
Continued
.
on
page
26
Toronto
COLVEY, D.
beaubien, a. s.
L. J. Beaubien & Co., Ltd.,
Montreal
Canadian Dow Jones & Co.,
Montreal
COPLAND, R. A.
beaubien, j.
Oldfield
Beaubien & Co., Ltd.,
Montreal
L. J.
bel anger,
Kirby
The shaded
&
area
rep¬
resents ancient sea
Gardner,
beds
extending
Winnipeg
from
the
from
Gulf of Mexico to the
Arctic
COX, M. D.
r.
source
Greenshields & Co.,
Belanger, Inc., Montreal
Inc.,
gas
Toronto
Ocean,
the
of many oil and
wells in the United
States and Canada.
bell,n.b.
ancient
COX, Stanley
Bell, Gouinlock & Co., Ltd.,
Bankers Bond
Toronto
Corp., Ltd.,
Toronto
benham, h. a.
Royal Securities Corp., Ltd.,
Winnipeg
sea
COYNE, B. L.
Deacon
beds***
Findley Coyne Ltd.,
Toronto
beves, g.e.
Calvin Bullock Limited,
a
CRAIG, R. H.
Montreal
Craig, Ballantyne & Co., Ltd.,
bird, h. j.
growing
Montreal
H. J. Bird & Co., Vancouver
Industry!
CROOKSTON, J. I.
blackmore, r.
Nesbitt, Thomson & Co., Ltd.,
"Globe & Mail," Toronto
bootiie, a. e.
Toronto
CUNDILL, J. P.
;
Bell, Gouinlock & Co., Ltd.,
Craig, Ballantyne & Co., Ltd.,
Toronto
Montreal
borrie, w. j.
Pemberton
CURRIE, D. W.
&
Son
Vancouvei
Ltd., Vancouver
Goulding, Rose & Co., Ltd.,
Toronto
boyer, j. u.
DALTON, W. T.
Canadian Bankers Association,
R.
Montreal
Montreal
brennan, f. j.
F. J. Brennan &
A. Daly
& Co., Ltd.,
DATTELS, D. R.
Dattels & Co., Ltd., Kitchener
Co., Ltd.,
• ••
Saint John
broderick, w.
Gardiner, Wardrop,
Ltd., Toronto
DAVY, J.
Dominion Securities Corp., Ltd.,
McBride
now a
is found
DAWSON, Dudley
bull, r. o.
Dudley Dawson Ltd., Montreal
the
Gairdner & Co., Ltd., Toronto
DEVLIN, W. T.
bullock,
Dow Jones &
h.
Calvin Bullock Limited,
New York
Co., New York
.
t
and
DINGLE, H. H.
Ltd.,
Wood, Gundy & Co.,
Lord & Lady
Vancouver
the
DINNICK, J. S.
c. f. w.
Burns Bros. &
Denton, Toronto
C. D.
Pemberton
&
Vancouver,
Ltd., Vancouver
campbell,
r. b.
or any
of the
numerous
food
other demands
developed through
helpful services of The Canadian Bank of Commerce.
There
are
nearly 100 branches of this Bank in the Western oil
area.
Royal Securities Corp.,
Ltd.,
The
DOW, D.J.
o
^
T
+
,
Co., Ltd.,
Canadian Bank
DOWNES, W. L.
„
castledine,
casteldine,
Kippen & Co., Inc.,
Montreal
DRURY, D. K.
R. D. Steers &
Head Office: Toronto
Co., Ottawa
allan
*• S.
Castledine & Co., Ltd.,
Ottawa
Nearly 600 Branches Across Canada and in
DUROCHER, L.
Belanger, Inc.,
NEW YORK
Montreal
SEATTLE
•
PORTLAND, ORE.
•
SAN FRANCISCO
LONDON, ENG. AND THE WEST INDIES
v. s.
vi s. Castledine
Jttawa
...
commodities in this market—can be
or
Co., Ltd., Montreal
Mackellar Securities Ltd.,
Toronto
:
or
...
of Char¬
Accountants, Halifax
Nesbitt, Thomson &
Montreal'
cas SIDY, F. C.
.
supplying derricks and drilling apparatus
Dominion Association
Montreal
&
—
& Co.,
•.
Bell Telephone
Co., Toronto
Casgrain
the oil fields of Western Canada.
DOUGLAS, J.
w. a.
casgrain,
to
Toronto
tered
i. l.
ft. A. Daly &
Co., Ltd., Toronto
canning,
McLeod, Young, Weir
DOANE, H. R.
Son
to
spot-light shifts northward from the develop¬
clothing for*oil workers
for services
London, England
CAMPBELL,
The
in Texas and Oklahoma
New business
Toronto
Guildhall Securities Ltd.,
Montreal
V
burns,
Circle.
...
DINGLE, D. B.
r. c.
BURGHLEY,
economy
along ancient seabeds that stretch from the Gulf of Mexico
Arctic
ments
Wood, Gundy & Co., Ltd.,
bulman,
vital force in Canada's
Toronto
&
Co., Ltd.,
DYMENT, W. A.
Burns Bros &
Toronto
Denton Ltd.,
.........
,*v • •
•
LOS ANGELES
Canadian
about
asked
been
have
I
banking
to
Banking
speak
investment
business
on
ours,
I
versa.
am
asked to touch
the
on
"prob¬
of
lem"
pres¬
ent and future
in
invest-
the
As
I
the
number
one
problem
c
tion between banks and investment
thoughtful
is that
banks
other
he
must sions of the Bank Act, have sought
know that he can get his money to embody in it every safeguard
when he wants it. This confidence that sensible men could devise to
is the very foundation of our fi¬ protect the depositor.
cardinal
investmyntJ.
mindedness
U.
Boyer
all
Canadians; getting them seized of
among
in the dividends and rewards
from
development
of Canada's
the seeming leth¬
argy of money-savers in respect
of
these
opportunities for gain
the
is
bold
a
chal¬
lenge which warrants serious
study.
•
I shall limit
myself to speaking
only as a banker.
First, let me
appeal for a clear understanding
of the differing relationships. The
relationship between the issuer
and the buyer of a share, a bond
or
a
debenture is the relationship
reluctant to invest with prudence.
of vendor and
purchaser; and the
contractual finality of the investor
parting with his money in return
for a security is clearly under¬
Banking
for
is
a
business
It is subject to
solute.
depositor
a
Upon the other hand, the rela¬
We
looks
market.
to
We
ourselves
money
owe
depositor and
his
him
his
must—and
his family,
a
to
bond
or
plant
to
a
outlook
vestment
do—keep
crop,
common
address
ada's
Annual
Montebello, Quebec, June 8,
sale
for
the
to
public.
the
discuss
to
need
time have we any quar¬
no
in
banks did
par'
not
underwriting
econ"
has
changed
it
all
essential
their
that
for
and
banks
to
securities depart¬
manned
by experts, to in¬
portfolios and
also to be able to buy and sell
for
customers anywhere from coast
to
for their
vest
own
coast.
Canadian
Banks
in
Underwriting
Syndicates
and
money
buy
or
in
legislators,
different
seven
1950.
a
bank's
by
law
Bank
over
and
and
Act.
in
par¬
Can¬
the years,
parliaments,
different
in¬
generally
civil
Banks
Not
Do
ly from
Recommend
and
decennial
in
revi¬
the investment dealers and cannot
be
regarded as an attack
upon
their field.
world
first
the
banker,
that
how
matter
individual,
as an
should
Canadians
may
standing;
have
get
worth-while
venture-promotions
countrymen, and in
we
their
own
own
country,
a
bank Will not
actually recommend to
that
he
put
his
money
a
person
into
any
particular stock, bond or venture
the
one
exception
being
Take
the
has not grown
been
bank
will
of
go
Canada
out
of
issues.
its
The
way
to
make all information available to
1914,
at
important has been the coopera¬
tion of
to
coast to coast and with their
first
the
of
lions
only $1,555 million and invest¬
ments
then less than 7%
were
In
assets.
had
and
$3*/2
now
our
in¬
to
$1,540
asets had
grown
grown
our
tion
million
$8,839
$4,453
at
189%
and
What
than in
greater
Canadians today, and helps
the marketing of so great a vol¬
ume
of
government, municipal,
pre¬
bank
corporate and industrial issues.
been
has
happening in
deposits, assets and invest¬
Primarily the function of a
Canada's
economy.
in
terms
of
economy
has
product, from about $4 billion in
1914 to about $16 billion estimated
for
1950.
Canada
has
become
highly
industrialized.
Physical
volume
of
has
cash
*
ing,
as
ex¬
Take
business,
movement
of goods and services; but it is
not in keeping with sound bank¬
of
production,
manufacturing and the
poses
national
gross
panded
production
tremendously.
Greenshields & Co
farm income
Underwriters and Distributors
Members Montreal Stock
to
of
The Toronto Stock
too
as
an
indicator;
it grew from
$700 million in 1939
$2,456 million inl949.
Highlight of/ this picture is of
the
facility, imagination
course
and skill with which business and
manufacturing
institutions,
and
not less our democratic system or
way of life, effected the postwar
reconversion
and
the
expansion
since. And in that picture we must
all
recognize
vestors,
the
the
work
of
courage
to
When
gage
in
the
in¬
vestment field is two-fold in char¬
acter. First the
investing
own
account
scribed;
and
and
which
second,
I
on
have
the
selling for customers.
fund
to
bonds, debentures, or stoc
suited __-r m
requirements.
customers'
rects
his
customer
our
de¬
buying
There
He a'
to thc;e w
specialize in getting the PU^1C,,
long-term morry—we
furnish the
investment dealers.
Your
function
dealers is one of
in
the economy
money
participation
business.
customer
—whichever is best
the
Bank
a
long-term
needs
money
system.
Toronto
finds
money or
capital expendi¬
tures, he encourages his customer
to float a capital issue—firs; mort¬
who
managed, well-regulated banking
Sherbrooke
do help your
bank
a
in¬
dealers and the immeasurable ad¬
vantage of a sound, resilient, well-
Quebec
Canadians have known it,
long-term loans a habit.
make
But banks
investment
of
bank
provide working capital and
other short-term money for pur¬
is to
ments is typical of the rest of the
risen
and
among
1950
1939.
war
force.
exists
vestment- mindedness
Our
31,
the major selling
activity of the banks
definitely helped to lay the broad,
base for whatever degree of in-
our
million.
March
mil¬
customers,
interesting of bank customers
the
42.9%. It
was
50%. Today our assets
over
at
assets
was
The
billion. The ratio of in¬
investments
were
of
1939, at the start
second world war,
of
furnished a
readymade medium of approach
and distribution for the great vol¬
umes
of victory bonds that the
country had to issue—of which
the investment dealers' organiza¬
bank assets amounted
investments
d'Armes, Montreal
two interests, for the
our
together
put
start
the
world war,
stand
Montreal Curb Market
prosperity.
second World War to realize how
greater investment market of'to¬
amounted to $105 million. Con¬ day chiefly resulted from that co¬
trast that with the $4% billion operation.
During the war the
I have mentioned as of today. In banks, with their branches from
is
Exchange
Exchange
to
One has only to look back at the
—
Dominion
sustained high level of national
yet.
banks
under¬
a high degree of investment
activity—which is so necessary to
the total securities investments of
all*
mutual
efforts
ing
Nevertheless
maturing rapidly.
a bird's-eye view: In 1914
are
by
investment
cooperative
the public wellbeing in maintain¬
full
on
of
and ours
of great assistance to"
to
in
and
been
your
feel
vestments to
507 Place
marked
and
income and
million
-
banks
have
dealers
a
stature
was es¬
underwriting
By and large, the relationships
between
its
infancy. It
various
your
large amounts.
in
to
Canadian Security Issues
the
to
,a
strongly
that
strength of the banks
sential
Canadian investment market was
No
vestments
Greenshields & Co Inc
substantial
so
the
war
Underwriting became
underwriting groups realized that
At the
great wars.
two
the
of
end
Investments
The advent of the banks
into
underwriting
syndicates
came
about really at the instigation of
large¬
recent growth. It stems
a
of the
time
syndi
But the growth of the
ments
the investment market in Canada
total
Ottawa
s-uriti^
establish
Compared with older countries,
is
of their
are,
embedded
large,
pay
by Mr.
Boyer at the
Meeting of the Investment
Dealers' Association of Canada, Seigniory
Club,
a
upon
ticularly in the
*An
34th
not
reasons.
that
sure
his
share.
a
Restrictions
him his
when he wants it. And, of
ready
get
can
money.
bank—not
do
enacted
when he needs it, whether to feed
bank, is that of creditor and
debtor.
He
a
At
no
bank
securities
I
considered
limitations,
with the aim of making
Responsibilities
tionship between
calling
intelligent and calculated riskscope is not ab¬
legislative
his
Thus,
tered
taking—but the
stood.
Bankers'
recommendations.
from
1
sec,
ienart
—
resources.
await
him form
his own judgment, but the law
holds many a pitfall to deter one
help
institution but a char¬
rel with the wisdom of parlia¬
(with a few excep¬
ments. We must observe the rules
tions provided in other specific
and principles laid down for us,
heavily in securities. Our hold¬ legislation) may legally call itself
even, at times, at the expense of
a
provision which is
ings have to be predominantly a bank
criticisms or misunderstandings—
short-term, to maintain the liquid¬ sometimes honored in the breach,
which we try, individually and
ity that enables us to meet any though rather generally in the
collectively, to remove by public
ordinary—or even extraordinary observance. And no persons out¬
information and by our efforts in
—demands of depositors.
side of banks, under
the Bank
the field of public relations.
The grand total of investments Act or kindred legislation, may
With all
of the foregoing in
in
securities
by
all
chartered call themselves bankers.
(The
banks
added
together, stood at Bank of Canada Act is an exam¬ view, it is noteworthy that our
investments are nearly $4V2 bil¬
$4,453 million at March 31 this ple of the kindred legislation I
lion.
It is true, these investments
year.
That is equal to 50.4% of mean.)
v:'
are most largely
short-term, but
the total assets of all the chartered
The Bank Act prohibits a char¬
none will deny that our contribu¬
banks.
tered bank from using or per¬
tion to stability in the short-term
While bank investments must
mitting the use of its name in any market is
important to you and to
be governed by prudence, these
prospectus or newspaper adver¬ the
public interest, in the longfigures prove that banks are not tisements
offering shares or other term market.
agine a Canada without it!
In
practice, banks do invest
ly
overcome
importance,
nancial structure. Just try to im¬
opportunities to participate in
sound ventures, so that Canadians
themselves will share more wide¬
the
which
that
At
ticipate
made
to
worlfl
usually by the 'eneni
placing the order,'drect
manager
cates.
customer,
trv
he/
done
was
in?
T
co;
Canadian bank
no
,
:.s Zl~
ities experts or securities
ments.
Purchase
of
dealers.
the
hni„
!
Up to the end of the fir
War
omy
stimulating
To
business in the
*
£,.°
actually have gre
investment
than
'
ume
men,
of
n«
by the trading departmer
various banks. Upon
the
think the
figures estab
revealing that Canadian banks now have more
hallenging
all
Bankers' Association
from recommending investments to cli¬
ents, though they now may maintain security trading departments. Notes
advent of Canadian banks into underwriting syndicates and lauds coopera¬
it,
see
quite substantial han<
investments in the latter
dians, but points out banks refrain
field.
t
m e n
195q
is
than one-half of their assets
invested in securities, prominent Canadian banker points out these invest¬
ments must be of short-term and liquid character, under Canadian banking
laws. Stresses need of stimulating investment-mindedness among all Cana¬
In
vice-
and
June ?
;
BOYER*
President, The Canadian
as
Thursday,
CHRONICLE
Related to Investmen
as
By J. U.
related to
investment—about the bearing of
the
and FINANCIAL
COMMERCIAL
THE
6
finding
investment
new
lot
it
profitably em
to go wherever
usefully and
The
of
as
high imp act
of this coo it, y
investment
^
^
,
y
dealer ser
link betW^o
^
small investor and the larg-^
cje
rower, with the bank as
the
essential
Continued on P
vention Number
C(
THE
COMMERCIAL
and FINANCIAL
CHRONICLE
Solving Anglo-Canadian Problems
Introductory
By THE RT. HON. LORD
BURGHLEY, K.C.M.G.*
first place I would like
the
t
IViy interest
! pnada
is
laat of my
position as a
Director of
one of the
"Big F iv e"
British banks.
of
place,
also more
David Lord Burghley
with, affection for, and
Canada. For the last 50
years we
have owned a cattle
ranch in B. C., and for nearly 20
of them my brother has been out
there managing it. And now there
friends
the
dollar
to
wash.
surely
into
It
therefore,
is,
me
today.
being
in
held
in
international
which
Toronto,
is
because
mainly about
trade
UmTtSh iinlrl/riS
0
7
trade
particular.
in
No country is
important, to learn
ficient
splendid fibre
tants
way
to
for
the
standard
ing
an
lm-
longer common,
at the
It
inhabi-
resources,
capital she
and
back
her
bu^.
the
up
sons
to
hpln
,
well
as
most
^problems1113the6
vastly
world
com-
shortage
r
Dollar
a
se510I?d world ™ar'
it
as
then known. This
was
that
Canada's
were
exports
to
paid for with
Today
,J
,
we
all
■
.
know
.
too
as
taken place. Canada's large
sur-
plus of sales to the sterling area,
gtates has figured prominently in
which
sufficient
in
1949
to
was
offset
than
more
Canada's
de-
know
see
there
ing pattern
aeainst
such
Alas,
fear
I
resulted in
age
to
not
it must have tered
immensity of dam¬ -be a disaster if the fund of
individuals
which
their
and
indeed
makes
us
sad.
We
cannot
I
and
be
put to
am
here
today
have
great
a
good use
that
sure
and
from
this
same
fundamental
is
that
have
we
wards life and that
the
approach to¬
can speak
we
frankly to each other without
in
any way lessening
pur mutual
affection and respect. In this dif¬
ficult world how fortunate we are
this.
valuable
-
-
each
contribution,
the economic
welfare
•
covery
of the world
To
this
do
but
to initiate
old
to
it
new
not
immediate
other's
may
as
a
which, by past standards, may ap¬
to be overr-bold.
>
Anglo-Canadian Cooperation
in the Past
■
Great problems face
and we
all
are
solutions.
us today,
searching for the
In
this
rush
of
everyday affairs, alas, I think
we
Really to understand a problem
and find the right solution it is
of immense
help to know the
the
previous
311 find that
we
have too little
practice, and therefore I hope you
time to look out into the
far fu¬
will forgive
me
if, for a few
ture. It is all
too
easy
to be
moments, I paint it into the prob¬
diverted into the
sidestreams
temporary
factors
believe that
they
river of
and
are
come
that
of
to
alone
no
when
paid in currencies which
doubt
freely
exchanged
for
carry
:%v
We have not I
fear been guilta
the U.K.
during these past
of
adding to these cji-
lin!*8 ns' for instance
If
answer lie m
Canadian exports from
line area to the
I can fully
yuuevstand how exasperated
many
Canada
the
u| a
snort.?n
isnSTn
which
bv
the
worid wide
Change in the Pattern of
World Trade
be
can
The
long-term
answer
marked improvement in
first quarter of this
1904
and
Australia in
1907. Thus the system
preference
was- •.
of-imperial
from
built... up
V y <r' / ,
Burghley at the ^Canadian action.
bealt
'a
Meeting of the Investment V Or to take a more recent exCluh Y
!s?c!at'on
Canada, Seigniory
,Ub>
Canada did not, hesitate to
Montehello, Quebec,. June 8, 1950.
Y«ddr?sf.ky **ord
Municipal
Public Utility and Industrial Securities
Dominion-wide service, with offices at:
Montreal, Que.
Toronto, Ont.
Quebec, Que.
Ottawa, Ont.
Halifax, N. S.
Hamilton, Ont.
Saint John, N. B.
Winnipeg, Man.
Charlottetown, P. E. I.
Calgary, Alta.
St. John's, Nfld.
Vancouver, B. C.
Wire connections: Montreal—-Toronto—New York
Correspondents in Bermuda and the
■
I
Royal Securities Corporation Limited
244 St. James St. W.
330
be
the
her trade
Bay Street
Montreal
Toronto
H Arbour 3121
ADelaide 7104
year, Canada's
Continued
an
in
Can-
deficit with the U.S.A. during the
introducing new methods — to
imperial preference as
Africa
to
ada's problem then may not
found in this way. In spite of
mention
example, it was Canada who in
gave
Great Britain trade
preference, followed in turn by
New * Zealand • in
1903,
South
iof
dniiar
world-wide dollar
find
backward
1897
ster-
h!w
the woridmarket.a
?
been
the
heYtf"
could
0f hersurplus of
British West Indies
has
figure
diverting
TtTa
look back we do not
we
that
this
does the
American
Canadian Government,
lem picture..
in
can
safely,to the great ocean of full
Prosperity and contentment.-
years
background .!and
main
wise, long-sighted states¬
manship which
us
34tK
trade with the USA
be necessary
pear
in
Obviously
re¬
judgments and to take risks
vear
reducing
whole.
methods, to revise
to
ef-
somewhat
and
,
ew
thing
it and I have
have it in their power to make a
very
advantages, both material
non-material,
that
spring
g
look like being
ex¬
conspicu^
Can-
sales
present
up
features of their relationship,
ous
only to
ess
"the
now,
Canada
have always been such
those
true
in
Britain, with that mutual
cooperation and goodwill which
Commonwealth family, and among
in
successful
perience accumulated in the past
.
the
Can-
^
splendid
Great
advantage not given to all people
in the
world, namely that of
being members of the British
out
your
many years,
that
an
^
no
only to be shat¬
by two world wars. It will
over
only nationally but also
many
homes,
odds.
tremendous
of
during 1949
forts in the U S A
well
they
built
that
have
cans
was
say
,
that fundamental changes
the dislocation of the world trad-
which
^
shortage
gallant struggle which the people
up
from
70%
United States.
my knowledge of them the Ameri- ficit with the U.S.A., cannot be
putting
UgA
Empire primary producers to the
background and basis of them all is
been
fact that,
court
to
have
imports
some
ada's total imports. Behind these
percentage figures is the signifi-
dollars derived from sales by the
■
±
quadrilateral trad
Great Britain
Great Britain, the United
good
cover
^
the rest of the British Em-
meant
lacking. I will
a moment.
forgetting that,
a
while
cant
anxiously the course of this dread¬
ful disaster at Winnipeg and the
these
ports,
U.S.A.
ada's adverse trading balance with
Problem
Dollar Problem
„
^nd
to be termed,
,
not
is
the
Canada
plays —and must play
pire,
Today we still have the
the "know-how," as
am
future
million, although it is but fair
•
revert to thls ln
I
time, and
lng ararngements, the other two
participants being Great Britain
and
^ cap^al is
Canada's
a
in
.
natural
by the application of
their knowldge gained from similar developments throughout the
come
truth
period by the investment of
This, however, is not so simple
T°re
an
.? j31. ij
i mi? as ^ seems. For Canada can hardAnm+erican. caPltal » Canada. The jy expect the U.S.A. to absorb her
traLaUanbc YXrikTral trad- ^Uge tugrlcultural1. surPlus- Nor
a
for
fu
?
P
° .PG1J up th^se Yast resources,
?0t
Pi th! labor of their
hands but
world.
present
moment
the development of Canada. From
nations.
area
to
sent
saying, that
of
—a
vitai
However, the well-known quadri- part in Canada's economy, but she
}ateral trading system provided cannot go on importing to the full
the ™eaJ?s.JbyJ S*, ~he fa,p from the U.S.A. unless the U.S.A.
couM be bridged. Part of Canada s is prepared to accept Canadian
2? 1
iCu Tv!S .cover,ed °,ve^ goods inpayment,
sure
Britain
Canada?s
of
element
*rior to
'
provided canital for the
deveSent
experience has
with
sterling
following
her pdrt
be said, and there is
•
Great
through an expandother countries.
trade
years.
been
past
men,
overriding all others is the "dollar
problem," which is by no
means confined to European and
have
the
no
factor
a
present time.
may
considerable
the
is it
nor
The dollar §aP ls a Problem of
which we in Great Britain now
have first-hand knowledge. But
this Problem has been with Canada throughout the whole 80-odd
years of her history as a nation.
distant
more
the
The
represent the
a
breadth
of
and
the
at
of
onpor-
am
common
factor—convertibility—is, alas,
in
problem which faces
at
attacked.
country in the long
most generous ges¬
tures in helping us in our hour
of need
during these past few
We
in
.
are
of any
Unfortunately, international trade
today is beset with problems, and
your
immediate
must be
run
very
the
and
proved
people.
entirely self-suf-
an
stand
plicated by
of dollars.
problems of
General E?
in
miss
vision which will
not, I
be lacking when the
the
what I have to say is
enormously appreciative we
are
examples
manifestation
of
future
Fair
never
These
\
Trade
only one-twentieth
a
exports to the U.S.A. account for
about 50% of Canada's total ex-
the
one-
tunity of reminding them.
inappropriate
is perhaps not
is
in Britain I
out
come
be
that of the U. S. A., and Canada's
population is only 14 million as
against 146 million. I realize you
may have heard this
before, but
For
will
ternatiomd
happy too to have
on be¬
half of all of us in Great Britain,
of
the
It
the chance of telling you,
how
Canada
among
ideas
our
was
with
sterling sur¬
means of bring¬
US.A. It has been estimated, for
instance, that at the present time
Canada
remembered
that the Canadian loan
faced
a
plus, but has no
ing the two together. The
imports from
very different
trade and financial positions with
third the size of the U. S.
loan,
whereas the national income of
countries,
that my talk to you Should coincide with the Third Canadian In-
only the
magnificent production job which
you were doing but also, perhaps
am
put
this
can
is
and
countries
represented
a
contribution towards
especially
Canada
deficit
will continue to play an important
part in her future. But the two
postwar line
a
which
recovery;
pool, to be torn at
result
with
seeing for myself not
I
I
this spirit that I ask you to bear
during the war,
in Charge of overseas
myself of the
two
our
discussed.
in
xi_
and vitality of your
to
best
supplies of aircraft in the United
Kingdom, I paid many visits to
Canada and had the opportunity
for
is
credit
and
cast aside realized when it is
best solution
common
war
magnificent
then, among
fair-minded, sensible people, the
tie, for a company
Chairman has set
up a business in Halifax to make
electronic instruments and ap¬
what is more
half-hour
?0U
and
yet a further
which I am
of
u?
and that the
great tie
while I was
next
future between
belief in,
paratus.
In addition,
the
of
posing to do is to put before you
the views of an ordinary
person
who believes that there is a great
always had a
has
during the
thoughts, however irritating
may be, for all I am pro-
they
personal.
family
Mv
of
space
W°u
such
banks
are always interested in Canada, but mine is
come to the aid of Great Britain
v°h have °+r(?ers ^ ^ substantial gifts and loans
£
taken
which
frequently without
adeexplanation
But for the
quate
British
•°^erft!ie cancella-
lo nt
tne U.K.
frnm
m
Directors
all the
All
of
excess
U.S.A.
Thus
confined
not
is
be converted into dollars to
meet
cannot
the
Urges reduced purchases from U. S. and increased im¬
ports from United Kingdom as well as
Canadian investments in sterling
area.
Stresses Canada s importance to
British Commonwealth of Nations.
gre-s,
to
that
area
the United States.
Con-
Anrual
heavy exports
sterling
at your
spf;.: x
dollars to meet Canada's debts to
Prominent British industrialist and
statesman, in reviewing problems faced
by Canada and Britain, lays Canada's "dollar
problem" to
deeply grateful I
am
to you for the high honor
wh h you have done me in invitiig me to
con ; over and
in'' 11 you how
on
page
12
Thursday,
CHRONICLE
THE COMMERCIAL and FINANCIAL
8
June 22;
95o
Oil and Canada's Future
As
as
as
north
travels
one
west
or
Edmonton,
th roughout
is
dealt
with by a new
brand
of
pio¬
neering.
gave
de¬
Canada's
of
leading oil
points out importance of
concern
it
scribe
m e
da's
has
an
in
lies just above our northern
border.
as
chanized
To achieve the
forecast
for
century
began
people
mechanical
have
must
of
and forests
snows
sources
It
in aircraft.
light and heat to remote
mining and lumbering communi¬
ties through the use of Dieselpowered
generating plants.
It
makes
possible the farming of
grain and other crops on a wide
and profitable scale.
The land
now yields its wealth to man in
direct proportion to the way he is
able to take advantage of the pos¬
sibilities of this new pioneering.
What conquers today's physical
frontier, of course, is an extension
brings
of the mechanical force that also
brings
This
about
force
energy
is
industrial growth.
impossible without
fuels—energy
from
that
her
of
fuels
beginning
in
supplies
Cali¬
from
its
This meant that Canada,
in
States
world's
the
capita
per
income of her farmers have
than
portant
ment
tripled.
to
is
long-range
the
discoveries
fact
that
This lack of crude oil has
long
spurred
first
was
drilled in
The
as
try is largely determined by the
country's geographical nature.
Canada
is
beginning
The search for oil in any coun¬
borders,
to
get
the
that will give her the Canada is divided into four main
fully to develop these re¬ geographical regions, two of
energy
means
The
ticularly needs this energy to keep
on
growing industrially and to
push back her physical frontiers.
There aren't many people there.
Only about 13,000,000 people live
in Canada today—an area that is
going to
has
come,
in large
measure,
petroleum and natural gas.
*An
of
address
Chamber
New
York,
by
of
Mr.
Hewetson
of
Commerce
New
States is
never
York
the
City,
before
State
June
had
own.
enough
crude
oil
Mexico,
Ontario
mostly
from
Illinois
fields,
the
was
supplied
Mid-Continent
but
aptly
and
described
below
It is in the
as
Hudson's
Canadian Shield that
that
panse
runs
northward from
the Gulf of Mexico.
locked in these sands
are
Plains.' Albr
generally been discovi
underground stratum
Interior Plains
rocks that drip
are
natural gas as
over
Over the years, enough
found in this area to
were
justify
continued
You
probably heard of the
have
exploration.
oil finds in 1920 at Norman Wells
in the far north.
Earlier, oil had
also been discovered in the south¬
part
ern
"Plains.
of
This
Prairie
prov¬
Most
of
the
oil
in
United
at Turner Val¬
all
i
tlm
t
J
like
a
nature is g0in«
Alberta as well
over
as in
Manitoba
ani
British Columbia.
Oil is coming from the
Interior
Plains region of Canada at a
rate
that is more than
sufficient
to
take
of
care
the
surrounding
mechanized agricultural area.
We
that
assume
there
underneath
of
care
these
Canadian
The promising
is enough oil
plains to take
needs
in time
territory that
may
eventually yield petroleum is ac¬
tually larger in area than our own
five leading oil producing states
Texas,
Oklahoma,
Louisiana
Kansas—combined!
Some geologists feel it is not
un¬
reasonable to
expect that the oil
coming from this region will be
in excess of 5 billion barrels. If
this should
to pass by
1958,
oil
production
come
Canadian
crude
could amply meet Canada's total
consumption.
I should like to stress the
that it is
point
competitive oil indus¬
a
try that will make this production
possible
in
achieved
the
leum
Canada, just as it
discovery of petro¬
there.
companies
hundreds
More
of
of
than
various
for
Plains.
There
oil
33
are
oil
are now
the
on
40
sizes, plus
individuals,
looking
Interior
refineries
operating in Canada, owned by 17
This healthy,
competitive setup promises to de¬
different companies.
liver abundant amounts of energy
for new Canadian needs, just as
it
gary.
States.
But for about 25 years after the
Norman Wells discovery, Cana¬
dian
companies
with
met
mind, the investment of time
arid
money
with
period
represents
return
no
oil.
all
I
over
I
affiliated
a
the world to find
the
Standard
drilled 134 dry holes
;
Oil
is
chances
to
for
unnecessary
point out
Implications of Canadian Oil
can
only begin to see. Of
immediate importance, of course,
is the fact that oil products are
we
on
available
the Inte¬
lower
had
we
succeeded
day,
and
I
think
parts of Canada at
than before. And
has
now
of
her
substantial
Canada
own,
millions of dollars
last year alone by replacing pe¬
troleum imports.
saved
one
many
Then, too, there is the
balance to be considered.
many
do,
too.
The actual
sound of Imperial Leduc Number
economic
Canada s
industry is largely cen¬
tered in an area whose financial
new
blowing in
was carried on a
Canadian broadcast¬
nation-wide
she
production
I well remember the excitement
Canadians
in
prices
because
freezing February day.
One
it
sure
many
Canadian oil.
in
The finding
heart¬
warming rumble of oil being re¬
leased from its geological prison
that
come
investment
desirability of carefully examin¬
ing each investment offering.
rior Plains before the great,
of
inevi¬
of great new sup¬
me to
emphasize this plies of oil under Canada's Inte¬
Imperial Oil Limited, rior Plains holds implications that
with
us
United
the
the speculative
perfect element in these ventures and the
Company (New Jersey), spent on
?n average about a million dollars
a year
during these 25 years. It
told
in
along with such dis¬
goes
am
me
going to take the lib¬
erty of speaking of one instance
example.
here
coveries have
-for
am
familiar to
doing
With the expansion that
over
example of pioneer spirit and of
private capital has shoul¬
dered
is
tably
little
in the Interior Plains. To
success
the risks
oil
long depended upon one
crop—wheat.
The income from
health
ing company hook-up to all the
provinces. People in every part
of the country heard the
surge
•-
-mp
more
of
ley, not far from the City of Cal¬
my
the
Interior
Canada's
was
this
the
the
in
holes
from
rushes
fields
the
on
places where campers can
light and cook
it
north
Farther
nil
a
>d in
the
Saskatchewan,
economically ex-
not yet
are
tractable.
ground.
It has been
Three years ago, for
1,
1950.
of her
crude oil
the Canadian Shield.
much
The
lying around
Bay like a
big, stone bib. This area is highly
Canada Lacked Oil Reserves
mineralized, containing gold, sil¬
Until the present time, Canada ver, nickel, copper and uranium.
from
were
Almost in the mid¬
encouraging.
oil and
are
others.
large deposits of high-grade iron
ore
have
recently been found.
example, 92% of her petroleum
inhabited by fewer people than
The second biggest geographical
requirements were imported, most
live in the State of New York. of the oil coming from the United area is called, as in the United
States, the Interior Plains.
In¬
Most of the population is confined States.
The East Coast obtained
cluding the Arctic Plains, it is an
to a narrow, 300-mile wide strip its needs chiefly from the Gulf of
extension of the great flat ex¬
larger than the United
the
as to
oil might be found
ir
California and
prom¬
region
this
in
oil
of
external
the
Certainly
ises
bigger than the
first, largest, and
geologically oldest region is called
which
sources.
on
—
Oil Discoveries in Canada
sands, probably the largest single
reservoir
of
petroleum in the
world.
Billions
of
barrels of
as
from
own
producing fields.
find rich
it has in the United
intensively
ore
that oil hunters in Canada
always been hopeful that
under the plains they, too, would
have
dle lie the famous Athabaska tar
States.
her
These
region.
central
flat,
long and, in proportion, as
have added to the country's long
list of raw materials.
And now,
within
this
On¬
search for oil in Canada has gone
on
new
iron
oil well
tario, not in Pennsylvania.
develop¬
vast
valuable
of
im¬
More
of Wyoming,
all in
fields
old
the
and
Colorado and Montana are
reason
;
Canadian companies to
looking for deposits
of
growth.
Since the years just be¬ keep
In fact, Canadians
fore the war, the gross value of petroleum.
her industrial production and the claim with some justice that the
more
The
Plains.
fields, the Mid-Continent fields
of Oklahoma, Kansas and Illinois,
for this purpose.
earnest, I believe Canada is en¬
her
period
of
greatest
gross
in the In¬
Gulf Coast
States has been found
terior
h,
Gi^
hunters, th.'
cient coral-reef formation,
"odav
an
intensified
search for
plains, largely covering the beds
of ancient seas, continue north¬
ward without any regard to na¬
tional borders.
It is for this
energy
which will help
Canadians push back their phys¬
ical
and
industrial frontiers
is
man
im¬
£e
geological age cak
Devonian, and usually in
consumption of petroleum, was
spending more
dollars for oil
than for any other commodity.
In
1947, about $207 million was spent
tering
to greatly multiply
his own physical efforts.
Canada is a country that par¬
permits
United
which ranks second to the United
energy
own
the
Columbia
fornia.
enormous
at their dis¬
posal. Until now, Canadians have
transpor¬
accomplished industrial and pio¬
tation.
neering miracles largely with im¬
This kind of pioneering takes
ported fuels. But with production
prospectors
over
the
northern
Hewetson
H. H.
and
power
Mid-
other
ported
its
that
in
British
States.
this
when
means
from
fields
Continent
growth that was
Canada
oil
drew
'mi
Interior
fields
inces
that
pioneering. It
depends heav¬
ily on the use
of
in a rough
prairie City c
Besides bearing V
tangible clue
a
more
You
might
the
monton.
increased
domestic oil supplies to Canada in not only providing more and cheaper fuel
and power, but in diversifying Canada's resources and extending frontiers of
Canada's industries.
Says Canada is in position to reap benefits of increasing
oil supplies, but warns exploration for new oil fields is highly speculative.
Head
Western
Canada
lying
faith of the oil
general
being
Imperial Oil Limited
Chairman of the Board,
frontier
in
Leduc,
around
HEWETSON*
By H. H.
the old frontier
we know it stands pretty much
it did years ago.
But the
from
oil will do much to level
out the
discrepancies that were so appa¬
boom-or-bust
be seeing m
the
well,
a
greater Alberta—rich with her agricul¬
future for Canada.
/
tural crops, oil, natural gas,a™J
While companies were
mapping coal—is the birth of a mnaern
ayd drilling in their search for Texas. While I will not go so tar
oil, the potential physical and in¬ as to suggest that Texas ir :> 0
dustrial growth of Canada had to overshadowed by Alberta, neve and rush of oil
coming
heralding
i
up
rent
in
through days.
the
What
old
we may
In spite of ample
supplies theless in the days to come west¬
through imports, the expense of ern Canada will be a ve/J J™
u°ing liquid energy in more re¬ portant factor in the supply
wait.
CALVIN
507
BULLOCK, LTD.
Place
Montreal
D'Armes
1, Quebec
mote
that
areas was an
had
the
to
country
veloped.
AH this
be
extra
handicap continent.
overcome
could
be
before
fully
de¬
A
.
a
great
vast and
tied country like
began to change in 1947.
Shortly^ after the
discovery at
came those
:n
.
problem of c0UJ;/'
relatively sparser -
Canada is
ing the oil from where it is
duced to where it will be
*
_
1
^
of consof
Woodbend, Redwater and increasing supplies, the v-- A
Golden Spike—these
Continued on paQ- 1
fields, like
*
year>
Under the
4
pressure
Convention Number
THE COMMERCIAL
and FINANCIAL CHRONICLE
Mutual Funds and the Business Executive
<
(mutual fund) companies
'uch
By JOHN C. ROGERS*
media for the investment in
the national economy
of a sub¬
stantial part of the national savan
President, J. C. Rogers
unc
int
Investment
(4),
fa)
M)
Com-
growth of mutual
recent years has made
this prophecy seem
an under¬
statement.
Approximately one
dealer, in explaining investment qualifications of Mutual
The rapid
three
billion
income and
hundred
North
American
dollars
have
been
placed
safety,
D
John
C.
16th Ana
shrug¬
ged off by the business executive
"something for the little fellow
who doesn't know how to run his
own affairs."
Obviously, figures
as
large investors have found
this medium attractive as well.
many
Mutual Fund Is
of
executives in all walks
and finance is
There is instead a
industry
limited.
eral
feeling
that
around
"We've
of,
race-track
twenties."
very
gen¬
is
This
an
un¬
be
to
the
for
'consider the mutual fund not
only
attracting the
smaller investors' capital into the
for
means
a
equity markets, but also
as a new
class of investment medium
com¬
peting with bonds, preferreds and
for his
commons
A
attention.
own
mutual fund
is
in
reality
a
constantly supervised investment
account.
Participation in a group
of securities is
continuously avail¬
able to investors through the pur¬
chase
mutual
of
("units
of
fund
shares
beneficial
interest"),
at a price
equal to the net worth
per unit (plus
commission) on the
day of purchase.
in
the market
curities
h
1 d
e
Any fluctuation
values
the
of
se¬
by the fund is
reflected in the net worth per
unit, and participants may with¬
*
draw their investment interest on
any business day, without penalty
or
charge.
Virtually all income
received from the invested assets
of the fund is
distributed pro
to the
rata
(or units of bene¬
interest). The fund tries to
shares
ficial
do for the
investor what he would
do for himself if he had the
time,
experience
and
capital
available.
an
Stocks
mon
his
set
own
Possiblv
of
investors know that
u r e s
mat
these
*n
features
balance
A
Bank
are
and
quently in conflict.
.•
f^-ety and liquidity,
of
rarely
are
is
but
tops
e»
-
in
low,in
from the "Quarterly Review
of the School of Business
r.atlon' The University of West<»tario, London, Ont., Canada.
..T5^n?erC-e
A,
fre¬
For example:
Account
'a
Hiah
~
Hrario
let
arc
the
rwfow
appeal
may
buTitwasafter
making
analysis that the original
of
mutual
tempted to create
™b£n °
°.f defense
concerned with
holders
value.
attractive
funds
u
u
out to shareholders something
85%
of
well-known
Thirdly,
a
reasonable
delay.
a
Funds
increasing capital
The
for
sum
the
future
enough
investment
it should be regarded as a "marathon."
No short-term spectacular
to
results should be
dustrial
Stock
Exchange
Average
6
b Gilt-Edged
The very
diversification of
against such
chaser
of
an
safety factor of
that
$17,090
slice of
nnn*
are
die
Illdue
10
ue
a^_ mutual funds
score
high
in
quiaixy
an
•
i™6 va*ue °*,rea£y
allowed;
treasury bills,
with other results he should
. .
with
(3%, 1966)
Savings Bank at V/2%
34,333
..
the
It
rejoice in
All mutual funds make
tice of paying out
more
a
a
is
human
successful
must
Canadian
look
at
over-all
income account, but this is not the
general practice.
In the United
the net worth
per
share
The Income Opportunities of
investors
to
in
are
interested
in
true mutual
Security values
xncome«
rise
and
„.p
rnnnoir
V,,,+
moi'nl,r
issuer to
mainta^ °r
income payable
on
Komnco
nf
the
security,
solid
fund
in
—
r
-
a
,
is less likely t0 8° dry than
single stream."
a
record
—
«i._.
of
There
mutual
a
no
fund
order
the
is built
principle of diversification, and is thus provided
with many sources of income. "A
river that is fed by many tribu-
thTsecmitv taries
increase the
the
account
and flow of the
envious of the position of our
upon
-r-
into
take
the
to
time
bank"
"demand
are
-
i
rru
easy.
There is, however,
Continued
ever
QUOTED IN AMERICAN FUNDS
depos¬
available for withdrawal at
their net worth at any time.
It is
this guarantee against being
"frozen in" that is the basic dif¬
est
OUR DIRECT PRIVATE WIRE
It is by far the strong¬
point in favor of their use as
investment
an
year.
medium.
SYSTEM COVERS ALL
INCLUDING
THE
WESTERN
OIL
re¬
CENTERS
CALGARY
OF
AND
EDMONTON
$67 million from
over
investors
MARKETS
Last-
American mutual funds
purchased
CANADIAN
with
no
disturbance
whatsoever.
Every day, at the close of the
stock
exchanges, the clerical
a
fund—
Compute
the
gross
value
of
v
■■
investments,
(2)
(3)
deduct any
W. C. Pitfield &
add to this figure the cash on
hand plus other credits,
*
(4) and
thus
30
liabilities,
arrive
at
the
BROAD
Co., Inc.
NEW
STREET
YORK
net
worth of the whole fund.
(5) By simply dividing this total
net worth by the number of
shares outstanding, they get
the net asset value per
other people for its
will
pay
own
shares until a new valu¬
ation
is
comptued
the
next
day.
All
the
assets
of
a
Teletype
Phone
NY
HAnover 2-9251
1-1979
share.
(6) This is the price that the fund
fund
are
Montreal
Cornwall
Halifax
Toronto
Moncton
Edmonton
Calgary
„
a
—
•
i_
simple
P'an which is frequently referred
dollar avera8ln8- I£ an
its"
twenties.
is
buy or sell common
stocks as a class, the investor must
resist the very pessimism or optimism of the majority of his
companion investors, and perhaps
do the opposite; this is not always
CANADIAN SECURITIES
ference between mutual funds and
the investment trusts of the late
which
to
their
value
of
security markets,
-
any
asset
timing
determine
Can¬
redeem
com-
purchases in relation to the ebb
practice is due to necessity only,
however, and the American funds
Canadian funds in this respect.
„
business day at full
without penalty
or
charge. In other words, monies
deposited in this form of "invest¬
on
are
puted.
less than 3%.
four mutual funds
results
daily, when the figures depicting
account to
of less than % of
1%; savings ac¬
counts, 1%%; government bonds,
undertake
"whistling
past the graveyard" practice, but
of
return
a
to
«,
the shareholders.
fun^ still makes
transfer
nature
so
his
and to try to forget the bad ones.
The management of a mutual
prac-
than 85%
fund is not allowed this
a
do
of
investments
0f their net investment income to
One
If
comparison
....
whole balance
account.
66,666
as a
investment account.
30^549
io corporation BondsIIZIZIIIIII
Dominion
of
Canada
Bonds
- •
-----
are
liquidity should be toe
can be seen by the
price usually placed upon it:
e.g.,
bank current accounts, no interest
ment
units
fund
he wishes to make
Referring back to our initial their realized capital gains in the
analysis, we have seen form of special dividends. This
All
marketability
net
The pur¬
mutual
(with
,rec.ent po11 of °Yer 2®° realized capital gains
.
first requisite of any form of in-
shares
militates
assets
event.
should regard his acquisition
In¬
Stocks
Preferreds
anticipated
through the purchase of mutual
funds.
Must Invest In
20 Toronto
At
made to he
Partly because of the supply
wisherto7nnvev 01 money< but mainly because of
What he
All
"good" rat¬
The Profit Potential of Mutual
To Obtain $1,000 Yearly You
—
share-
are spread over the entire
Mutual Funds
finannVr
"Investments
i"VC3UUClHS
ada
income.
annual
net
are
table will be of interest:
A
was
men¬
funds
m¥tual f"nd shares states where there is a capital
ln order to evaluate the potenC°"f°r gainsJ^ the fU"?S are *}?°
duties of the capital growth facborrowing purposes.
quired to pay out a portion of tor, it is obviously necessary to
oil
The Importance of Liquidity
sold'"
As
mutual
all
+
at
pnmWno
,
stable
a
branch bank managers, when the
P°mt of liquidity was clarified, all
classes of investors.
said
id
fund.
above,
of money for
rather than immediate income, capital growth is too often reHowever, behind this desire to garded by the
over-eager investor
increase capital is the object of as a "sprint" whereas in reality
other
and
of
vaIue-
would combine all
features and still be
and
available to
all
basic
A
quantity of
depend¬
of
course,
still
af"dr°f ?n?dUCe therincome desired In
connection,
the following
rh
is continuous full pub-
highly liquid securities
investment
an
mpdiiirv-i whirh umiiici
medium which
four
reader
forefmin**
well-known facts
an
rw
valnec
the
the funds'
really only four basic
of
any
investment,
Sfound which all other qualifica¬
tions
revolve: liquidity, income,
Profit and
safety. They also know
teat
quality,
,
Individual
(1)
Investment
All astute
there are
pay
conditions. The fund's first line this
market
,
individual
the
tioned
capital gains
primarily
a
tax, many investors
i??-* a,re caused by fears of which will be great
•
bonds
again without profit
freedom
redeem
are quite good
no tilPe1ili the ulast 25 years has
safety, but weak on liquidity ? mutual fund been embarrassed
and only moderate for income—^ .7 its charter guarantee to redeem
very low, if any, profit potential.
shares in full at net asset
workers of
The Four Factors in
•
Canada, where
reigns in respect to
/w* the ^vestment bank" by
^ rg,f number of shareholders, building
been
executive
as
by virtue of this
In
Preferred Stocks
before
realistic attitude, and it would
worthwhile
negotiable
for
with the investment trusts of the
late
,
and
danger
the remote possiblity of a
lowing for
designers
in
funds by
^
potential.
such
Canada, knowledge of
essential features of mutual
the
,/r
cash
and
in safety> quite high in country. Fourthly, similar to
quite low in income, hank savings account, all funds
very minor in profit have
"panic hedge clauses" al-
pedantic,
a
li-
the
to
Mutual funds have
again
and
that
this nature must indicate
Here
in
As
the investment policies
on
ssu?
liquidity,
of
mutual funds should not be
What
i
.
?-re K1.?
leading Canadian
mutual fund shows that net assets
were increased 74.46% in 1949.
This snowballing acceptance of
of
restricted
High Grade Corporation Bonds
Rogers
day.
The
.
but
income
dol¬
nual Report
„
_
potential.
is one
income.
over
licity on its operations. Secondly
erately high in safety, low in all funds maintain
some position
liquidity, quite good in terms of in government
flow,
continuing at
an
accelerat¬
this
per
slightly
Read Estate Mortgages are mod-
rent estimate
of
fac* the guarantee to
shares is unquestionable in
Also, there is no actual
*rom
quidity, low in income, and lacking in profit potential
cur¬
lars
very
Life Insurance (for investment
only) is unquestionably high in
investment"
since
1940,
ing rate,
million
very
ity, but low in income and
minor in profit potential.
these
"media
for
of
are
highly rated for safety and liquid-
in
the
Bonds
dealt
ing for the income factor.
composed
securities,
Government
million
and
in profit poten-
zero
xial«
the foregoing has
of
income, this is, of
ent
economic progress.
funds in
dividend
principally with the reliability of
Funds, analyzes factors in sound investment, such as
Liquidity, Income Return,
Profit Potential, and Safety. Describes
different kinds of Mutual Funds and
lists
qualities of each for various types of investors. Extols Canada's
(1940), 76th U. S.
panes
Act
Congress.
its
interrupted
payments.
All
Canadian securities
have a vital effect
i the
flow of such savings
the capital marketsSec.
and may
inc
having
Limited
Co.
&
Saint John
Vancouver
Ottawa
London, Eng.
on
page
22
COMMERCIAL and FINANCIAL
THE
10
C. L. Gundy, Wood, Gundy & Company, Limited, Toronto;
Ralph D. Baker, James Richardson & Sons, Winnipeg,
Man.; Lord Burghley, London; John Ridley, A. E. Ames
Co.
far
discovered,
the
and
of
their
has been
for
their
own
"T h
n
e
a
em-
ploy their capitals, would not only
load
^
an
an
whieh
which
antWitv
authority
be trusted to
John T. Hackett
and
where
so
be
presumption
address by Mr. Hackett
investment Dealers' Associa-
from
Club,
of
Canada, Seignory
bello, Que., June 8, 1950.
which
or
safelv
salely
Senate
would
ing
South and
still
were
to
be
'
•
'
1
govern-
■
*
.
the
advance
despite warning, there
and
in
three
genera¬
breathless
a
population,
knowledge.
been
Doctrine
on
of
space
tions, there has been
•
The
wealth
period has
revolutionary.
Mankind
sible
to
has
keep
ventions.
All
found
it
abreast
impos¬
of his in¬
Parliamentary Gov¬
ernment, with its checks and its
no-
substantial
controls
enough
in the
to
in ouf
projected years after the
War, has given too much legisla-
tion,
The fact is, the world has been
moving
rapidly.
1834,
upon
ernment.
DEALERS
He
ier.
IN
In
November,
the dismissal from of-
was
He
sent for
a
gov-
then in Rome,
was
by
express
cour-
Peel arrived in London
journey in the
same
some
type of
bide, drawn by horses,
PUBLIC UTILITY AND INDUSTRIAL
same
BONDS AND SHARES
in
the
For
manners
has
inadequate to the tasks
that lay before
it.
The truth,
which is now more evident, is
that military dictatorship has been
the most lasting method of ruling
or
ceed the life
of
roads, in the
over
same
ve-
the
number
days and hours that the Em-
peror
We
Hadrian
had
made
of
even
ex-
single individ-
a
in
read
the
newspapers
0ther day that all of the thir-
teen
surviving
Grand
more
veterans
cf
years
old
vears
has
more
Yet
than
other
any
yielded to
the
Rule
parj. 0f the human family was liv-
jng
as
^ had
far gast
as
far
was
always lived.
stiH
removed
Europe
as
the planet.
The
if
in
it
West
higher
of
of
was
enduring
and
in
yet
time,
our
The genius of
principles endure.
people has expressed itself by
our
perpetual
to old prin¬
recurrence
still
ciples and of the gradual contri¬
of
forms within
new
which
old
action of these
the
secure
doing, our ancestors have
so
dividual
C2.
*
LIMITED
1
AND
.•••
•
-
Government, Municipal, Corporation,
Commissions, Parishes and Fabriques,
NOTRE DAME
STREET, WEST
is best
autonomous,
clear-sighted.
"Times"
1
newspaper
editorial the other
said
day:
presents itself
organizations, it
f a s c i n a ri n g
"When authority
in
the
guise
of
develops charms,
\v
•*
an
enough
221
Freedom
by multiplicity ot or¬
are
The
School
i
Forum.
r:
in
Religious Institutions;
this
objective
taking part
ganizations that
■
Province of QUEBEC
SECURITIES
common
independent and
•'
Specialists in Securities
Originating in the
INVESTMENT
dignity of the
the
a
to all the Associations
preserved
DEALERS
■
—
their
of the in¬
freedom
and
individual
in
UNDERWRITERS
inc.
con¬
Change has been rapid, even
revolutionary
dignity—the
L. G. BEAUBIEN
Room 802
great
preserved their freedom and
215 St. James Street West, Montreal 1, P. Q.
|]
I
to
The
Change is the characteristic of
life.
By
Members Investment Dealers Ass'n of Canada
Placements
fail.
anticipates the ad¬
principles.
CRAIG, BALLANTYNE 4 CO. LTD.
de
dangerous
more
stantly changing.
to
Societe
Law
justment
vance
i
and
Government
another
were
far
The
closed world,
thought from
a
direct and cruel
more
principles, something that is
period in the history of the world,
a hundred years
ago, the greater
of
have
safest refuge for humanity when
the
such
methods
Democracy
Autocracy is the easiest and
ways.
forms
completely
peoples.
cumbersome
Parliamentary
are
changed the conditions of human
existence
The
the
Army of the Republic
than 100
civilized
relatively
short period.- It doesn't
Melbourne, Sir Rob- ]ast 100
days later, having completed the
GOVERNMENT, MUNICIPAL,
earlier.
years
A hlmdred years is a
some
ert Peel was asked to form
CANADIAN
change
no
the doctrine o{ Emer_
Qwn;
gency,
fancy
find the state exercis-
1,700
nearly 2,000 years, there had been
completely banished in many methods of travel. Since then,
countries a"d somewhat curtailed distance has been annihilated,
«ce of Lord
DISTRIBUTORS AND
journey
of the less attractive ual.
who had folly and features of authoritarianism.
as
themselves fit to exercise it."
we
trade
The Rule of Law has also been
Monte-
Yet,
in
and investment.
un-
assume
could
could
dangerous
men
most
but
Council
no
whatever
t-
a
attention,
necessary
^
with
themselves
~~*Extract
the
'
•
Urges investment industry resist this tendency threatening
they ought to
manner
hands of
before
empty.
seemed
what
tempt to direct private people in
tion
and
Africa
balances and deliberate
ways,
who
should
»
J||P1P;
states-
m
•
individual freedom.
Adam Smith
that:
'
much legislation based not upon Rule of Law, but
JHH
own
said
e
too
of Emergency.
MB*'
and
reward.
?
mental interference with private investment, points out,
energies
account
Central
Adam Smith's warning against
■
letting
them engage
on
■
:
,
civil law,
and
their
■
of
criminal
the
.<■■■/'"
.
of
limits
the
unknown
.
In
Prominent Canadian jurist, quoting
within
free,
Emergency
so
richer,
that
is
19^
discovered.
method,
making
of
;
Limited, Vancouver
Past President, Canadian Bar Association
'
world
Vancouver
By JOHN T. HACKETT, K.C.*
poverty. By
most fruitful
the
Toronto,
Doctrine of
vs.
record of mankind
has been one of great
far
Limited,
June £
Montreal; Donovan N. Knight, Wood, Gundy &
Company
Ltd., Winnipeg; Wilfred J. Borrie, Pemberton & Son
President of the Investment
Canada, addressing annual meet¬
ing; J. A. Kingsmill, Investment Dealers Association of
Canada, Toronto; Peter Kilburn, Greenshields & Co., Inc.,
&
Dealers Association of
Rule of Law
The general
Thursday,
CHRONICLE
'
of
free
to
convert
people
into
commu
total!
ities
-iah
cfofpc "
S
'
231 St. James Street W.
.MONTREAL
'
Telephone HArbour 7287-8
MONTREAL
Ej
|
|j
Quebec
.
-
Ottawa
'iV^h'Hyaclnthfc
Paris
-•
-
-
v
/'^Trols
Rivieres
Shawlnlgan Palls V.
Brussels
;.v
V'
It
behooves
the
Association
Dealers'
Invent
and
with all talent and energy this tendfor
Freedom
is indivisible
guests
to
resist
without it, we
perish.
-ir
-1
Oj
Convention Number
THE COMMERCIAL and
FINANCIAL CHRONICLE
Anderson & Company, Toronto; Charles Burns, Burns Bros. &
Toronto; W. J. McClellan, Wood, Gundy & Company, Limited,
Col. W. H. Watson,
Denton, Limited,
•:*•
11
W.
T. Dalton, R. A. Daly Co. Limited, Montreal; James Douglas, Royal Securities
Corporation Ltd., Montreal; Gerald A. Barry, Wood Gundy Corporation Limited,
Toronto; Mrs. Charles Burns
-
Montreal
Common Problems of Trust Companies and Investment Dealers
I need to elab¬
honor it is to be
1 don'x suppose
the
orate
on
asked
to be
By HENRY E. LANGFORD*
fore
Dealers' Asso-
at the Investment
Langford, speaking
meeting. Your
on
mutual
and trust companies in
concerns
of investment dealers and
gage
representing
sighted and vigorous development of Canadian
it does the
inter-
people
e
s
t
e
in
d
and
of
users
capital
to
de¬
our
na¬
needed
velop
tural
resources
build
and
to
our
public
Henry E. Langford
and
business
of
financial
whole
the
men,
work
the
business. J Without
structure
we
as
know it would not continue. You
are
the lubricant between the
capital
capital
and
users
sup¬
pliers and, like any other lubri¬
cant,
you
play
an
absolutely
essential part in keeping the ma¬
chine functioning.
On behalf of
the
Dominion
vestments
and In¬
Mortgage
whom
Association,
I
represent, I wish to say how much
I
appreciate
the
opportunity
which you have given to me to
come and
take part in the dis¬
cussions this morning.
This
brings up
the dilemma with
which
I
know
that
came
find
I
am
to me to
You
faced.
invitation
kind
the
speak here because
of the office which I hold.
:v."■'
$275 million and two bilaccounts, and the loan
companies, $275 million. I think
it would be fair to say from these
figures
that our
members
are
probably amongst your best customers, and I have no doubt that
account
lion in trust
course,
speaking
necessarily
association
Our
some
eral
the
years ago
reasons
was
that
no
of
formation
that
ceive in
assist
for
also
are
and
we
be¬
endorse
lication.]
Probably
doubt led to
matter,
your
associations
own,
like
yours
and
ours
confined to the trust and loan
field, leaving Mr. Guy to deal
with the position of the life cornpanies. I believe he will discuss
the
effects
of
the
proposed
find it necessary to make repre- changes in the investment clauses
sentations from time to time to
..
_AT1.
government bodies, not in order
or
our
all
us
voluntary
any
tween
the
the
of
the
ciations
members
is
friction.
outstanding
fea¬
current relations
the
A
of
our
complete
of life companies now before the
to
those which have short histories.
Our inter-relationship is
just as fortunate, in that it has
no incidents to report or comment
This lack of major problems
on.
to
discuss, while it does make it
somewhat difficult for a speaker
when looking for an interesting
topic, yet it does tell far better
than
I
healthy
tween
can
of
the
and
sound
day-by-day dealings
our
members.
is worthy of
is
a
comment because it
relationship that does not
always
exist
between
the
seller
and buyer of other commodities,
Continued
on page
^ y
_«««
henceforth primarily from my experience as a trust company man.
companies, however, in
of their
the
in
themselves
business, find
possession
for
of As I have already indicated, Mr.
eventually Harry Guy who will follow me
which they
money ror
Look to the North
...
myself and not for the association.
INVESTMENT
This is particularly
important to
the next
speaker on your program will be
the fine representative of the life
emphasize,
because
Keeping up-to-date
OPPORTUNITIES
insurance
companies of Canada.
These life companies constitute
the majority interest in the Do¬
minion Mortgage and Investments
Association,
the
nerve
our
to
if I had
attempt to speak for
and probably
association,
I
would
find
pulling at my coat
tails.
As you may know, the Do¬
minion Mortgage and Investments
Association has a membership of
Harry
Guy
life
insurance
companies,
16
trust companies and 11 loan com-
on
You'll find
a
our
ance
2
companies,
trust
$4,286
companies
address
by
Mr-
insur¬
on
monthly Business Review
Our Canada-wide
help. It brings you a clear analy¬
of Canada's economic developments,
sis
detailed
surveys
Langford
at
of our Canadian or
our Head Office in
U.
S.
branches,
or
disposal.
Nesbitt, Thomson
Montreal.
& COMPANY,
Bank
of
Montreal
rani
Resources over
355 St.
LIMITED
James Street West, Montreal
Canada's First Bank
rot mumuMMn
UNITED STATES
New
York, 64 Wall
San
St.
OFFICES:
Chicago, 27 S. La Salle St.
Francisco, 333
California St.
the
K* li AJlnual Meeting of the Investment
pf »er® Association of Canada, Seigniory
b,
Montebello, Quebec, June 8, 1950.
Underwriting, Trading and Invest¬
ment Services are at your
To receive this regu¬
larly, write to any
billion^;
company
DISTRIBUTORS
of industrial and com¬
mercial conditions.
companies use figures which remund us of a Dominion Budget,
life
UNDERWRITERS
great
p.'n*es- .Tire total assets which
ap administered by our member
namely, the Canadian
CANADA?
$2,000,000,000
—
more
than 500 branches spanning Canada
be¬
I think this
looked in the mass of detail being
considered by government offi-
business, in order to
in solving our com-
problems. Perhaps the only cials when drafting taxation and
feature of the Dominion other measures.
Mortgage and Investments Asso..
-;
ciation is the binding together of
Relations with IDAC
the
three types
of business as
Before turning to the current
indicated, and which three types relations between the individual
all offer widely varying services members of our two associations,
to the public.
All loan, trust or j should say that I will be talking
course
has
are
unique
insurance
of
lack
famous historian
mon
the
be¬
asso¬
said, that the happiest countries
receive any preferred treat- Dominion Parliament.
On this
trade group.
We act as a repre- ment, but at least to receive question of investment powers, it
sentative of a group of companies equitable treatment and see to it wm he sufficient on behalf of the
and we come together to pool the that the special problems relating loan
trugt companles to state
information which we each re- to our businesses are not overfor
Parliament
concerned
are
[Editor's Note: Mr. Guy spoke
extemporaneously and no record
of his remarks was made for pub¬
trust
common
have to account to others.
It is and who is the head of the Life
the
common
problems
arising Officers Association, will speak to
from the investment
of these you on the investment problems
funds in bonds, stocks, mortgages of his companies. From now on,
or other securities that constitute therefore,
my
remarks will be
formed
for the same gen-
How¬
when I do speak, I am, of
ever,
com¬
against extravagance by Canadian municipalities.
the problems of our association,
utilities,
Also, I think it is fair and accurperforms probably one of the most this was one of the factors which ate to say that under our present
important functions
in modern entered into your kind invitation, system of political development,
:■
Tells of trust
Advocates establishment of open bond market in Toronto
and Montreal, and warns
suppliers
they
in this respect.
ture
funds in Ontario.
bringing
together
the
the
economy.
investment problems and enactment of law permitting
pany
mort¬
Canada, stresses coordinated policy for far-
association,
as
as
amendments
generally what Mr. Guy will say
Mr.
ciation annual
,
far
so
similar
of the speakers
one
you,
that
President, The Dominion Mortgage & Investments Association
BRANCHES IN THE PRINCIPAL CITIES OF CANADA
18
D.
FINANCIAL
THE COMMERCIAL and
12
Morrison, Royal Securities Corporation
E.
from
page
Hodgson, C. J. Hodgson & Co., Montreal; Gerard Gingras, Rene T. Leclerc, Inc.
Montreal; Reginald D. Steers, R. D. Steers & Co., Ottawa
Lord Burghley
solution is not easy. It
may in¬
the Canadian public sup¬ ably lead to growing trade dis¬
crimination, and more and more volve a re-orientation of Angloregional and bilateral arrange¬ Canadian trade, and a measure of
During the war years British
ments.
These cannot fail to be present inconvenience, but in the
goods were inevitably denied to
restrictionist in effect.
In such long run it is the only practical
the Canadian market and, willysolution so far
nilly, Canada became more de¬
pendent on the U.S.A. for many
manufactured
Canada's dollar gap would
be bridged and at the same time
Britain's problems would be eased.
Moreover, it would seem to be in
Canada's
long-term interest to
If Canada's dollar gap cannot be
buy more from Great Britain and
closed by an increased level of the
sterling area in order to safe¬
exports to the U.S.A. the only guard her own future exports to
alternative open to her would ap¬
these countries. This is not just a
pear to be to reduce dependence
paper transaction. It is a very real
on her imports from the U.S.A.,
surpluses coincide too closely with
U. S. surpluses to inspire confi¬
dence in the prospect of a per¬
manent solution along these lines.
in this way that
the solution will be found. Thus it
15
20% of Canada's imports from
has been estimated that if only
to
the U.S.A. could be obtained from
Great
Britain
sterling
the
and
area,
two-way responsibility. We have
make
to
the right
as
what you want, and
quality and
as
of
cheaply
possible, while you can help by
facilitating the entry of the goods,
articles which had
Canadian Securities
of
more
we
must look for
the
New
Great
Britain
some
50%
than is being bought by the
So again I would like to
Sydney, N. S.
t-
Saint John, N. B.
contributions
to
the
solution,
of
•
Moncton, N. B.
Underwriters and Distributors
Quebec Municipal, Religious
a
fur¬
possibility-—the
essence
livery dates
But
may
have left
a
lot
easing, if not
the
to
will find that from now, on these
will
dollar
the
problem
think
in
terms
of
tend
to
be
the
Unless
means
of
she must
ing
up a
Canada
can
find
to
avail if the
that
develop markets while, at the
time, exploiting the natural
advantages of the country.
In
the
sphere
Great
still play a part al¬
latter
can
no position to
capital invest¬
the former scale.
But
though she is in
ment
bridging her dollar gap
the
inevitably go on build¬
deficit with the U. S. A.
no
same
resume
some
successful economy.
a
expansion do not exist. Therefore,
it is essential to take every step
Britain
The Role of Overseas Investment
of
expansion is of
markets for the products of
exception
rather than the rule.
of the greatest
Canada
can
one
that
would be to develop an automatic
tendency
Branches
Halifax, N. S.
emphasize that
make
York, Toronto and Maritime Provinces
yet mentioned
investment
overseas of part of the
Canadian
surplus with the non-dollar world.
roughly one-tenth of tion and other defects of market¬
U.S.A., Canada buys ing may still occur, I think you
U.S.A.
Direct private wires with
put forward.
I have not
ther
placed in jeopardy.
cooperation. That this will to be desired. But the lesson is
be forthcoming is, I believe, evi¬ being learned and, although ex¬
dent from the fact that, with a amples of poor selling organiza¬
from
BUILDING
of
markets would
your
population
BANK
be
maintenance
overseas
of the Canadian consumer and de¬
But in all this
that
MONTREAL, QUE.
the
situation
a
Canada's
The
Dollar
Export Board in
formerly been purchased from the
Great Britain and the Dollar-Ster¬
U.K. There is no doubt that, as
ling Trade Board in Canada, and Just as in the past investment by
a result, the
Canadian market is
other bodies, are working to bring Great Britain opened up markets
now a very much harder nut for
the
sale
of
British goods
about a realignment of trade on for
British exporters to crack.
We
the basis I have outlined. There throughout the world, so now the
have to compete with a country
is a growing realization in both mantle has fallen on Canada and
which has established itself in
countries that in closer coopera¬ there is a great opportunity for
the Canadian market and has built
tion lies the key to a solution of her, by investment in the under¬
up an effective marketing system the
major part of the problems developed areas and in the United
geared to Canadian requirements.
besetting the two countries, but Kingdom and the rest of the ster¬
I
am
confident, however, that with the
approaching end of the ling area, to open up markets for
Great Britain has it in her power
Marshall
Aid
program time
is Canadian exports.
to compete and win in quality,
On the other hand, there is no
very short.
price and service. Moreover, Can¬
There has been a tendency in country in the world which af¬
ada is a market which is vital
some quarters to magnify points fords
greater opportunity than
to Great Britain. It is gradually
of
friction
in
Anglo-Canadian Canada herself, with her unlim¬
becoming more widely recognized trade relations and to ignore the ited natural resources and unlim¬
that developments going on in
solid progress made toward the ited possibilities of power devel¬
Canada today afford unrivalled
common
with
her
increasing
goal. British manufac¬ opment,
opportunities for the United King¬ turers may not always have
ap¬ population, and her stability of
dom exporters to establish a per¬
preciated the special requirements government, all of which are the
manent market.
ROYAL
1950
porting their purchase.
Problems
it may be
•:
and by
7
Solving the Anglo-Canadian
and
2
Bond Corporation Limited, Toronto; J. Archibald
Charles L. McCutcheon, Bankers
Ltd., Toronto; Douglas B. Weldon,
London, Ont.; Roy W. Robertson, hard, Robertson & Co.,
Ltd., London, Ont.; William D. McAlpine, Brawley, Cathers & Company, Toronto;
George R. Gardiner, Gardiner, Watson & Company, Toronto
Midland Securities Limited,
Continued
Thursday, June
CHRONICLE
overseas
on
workers
technical
are
skill
is
the
there, and
Given
there.
encouragement, assisted passages,
help in settlement, opportunity to
It is a truism to
immigrate as a family unit (this
say that a large tled in the same
way as the ster¬
would involve accepting a propor¬
increase in shipments from the
ling area one will have to be with
tion of older immigrants, but they
sterling area and the other ERP you if the
present pattern con¬
need not necessarily be a liability
countries to North America is a
tinues. On the other hand, Can¬
basic factor in the
bridging of the ada will find that her exports to on the Canadian economy) there
is no doubt that there would be
dollar gap.
Until this gap has the
sterling area and the rest of
been bridged there can be
considerable response. Even with¬
no
the world cannot be maintained
out any special inducements, tne
question of a return to a multi¬ because those
countries have no
lateral
postwar
emigration
from tne
system of world trade, means of
paying for them. There
and failure to do so will
United Kingdom has been greater
inevit¬ lies our mutual
problem.
The
to Canada than to other parts 01
the Commonwealth.
Of course, it
what Great Britain
can
provide.
year by year, and at some stage
the account will have to be set¬
to negotiate
authorities for a
relaxation of the stringent rf Sta¬
tions on the amount of capital t
be taken out of the country by
the individual emigrant, m or
would
be
necessary
with the British
and
Corporate Securities
Underwriters and Dealers
IN
Canadian
and
Government^ Municipal
to
encourage
the family
umt
and to enable the as
worker to bring his savings
move,
Corporation Securities
.
him, but the long-term advantage
to Great Britain should .enable
some
mutually satisfactoi
RENE T. LECLERC
Incorporee
MONTREAL
rangement to be
DUDLEY DAWSON LIMITED
Members Investment
Dealers Assn.
of
Canada
negotiated.
growing sir®11-;,
industry, the broadening \
base upon which her. wee.
built up and from which ^
come
is deprived, are 01
importance
to
Great ECanada's
considerable s%;
development of braner,
There
the
is
j!
is
.^e
^
of
Convention Number
THE COMMERCIAL
and FINANCIAL
CHRONICLE
Pepall, Bell, Gouinlock & Co., Montreal; Dudley
Dudley Dawson Limited, Montreal; Wm. T.
Collier, Collier, Norris & Quinlan, Ltd., Montreal
W. P-
Armitage, Coffin & Burr, Incorporated, Boston,
Mass.; Murray Hanson, General Counsel of the Invest¬
ment Bankers Association
of America, Washington, D. C.;
John Ridley, A. E. Ames & Co.
Limited, Toronto
industry in Canada, and
industrialist is coming
British
realize this.
But to
any
overcome
the obstacles of lack of
capital
lic
on
Canadian
the possibility
of a shortage of skilled workers
oh the other, calls for the close
co-operation of the British and
the one hand, and
Governments.
Canadian
Here
Banking
than their continued
in
vention
markets.
the
For
inter¬
a
special deals government trading
may be justifiable. In other cases
all
it
too
frequently
to
appears
friction without any corre¬
cause
sponding
dealer.
A
world's
trading
few—very few—
economic
advantages.
exchanges
Free markets and free
or
great deal of venture capital
It is important in this situation
only
year
Canadian
United
with
compared
18%
1935-39.
years
parallel
of
merchandise
from the
came
11%
total
imports
Kingdom,
in
the
Thus the
five
trading
adjustments I have outlined rep¬
resent, in effect, little more than
a
return to prewar arrangements
on
considerably increased turn¬
a
and I understand have
over,
al¬
ready receive the blessing in prin¬
ciple
of
your
government.
If
carried
out
would
successfully
they
only almost entirely
not
the Canadian trade deficit
remove
with the United
States, but would
extent
each other
to
whatever
they^can in their
More¬
over, by solving that part of the
dollar problem that affects Can¬
ada
and
the
sterling
and of
bank.
the risks
course
The
his
individual
own
have
return
been
taken
toward
a
to
difficulties
of
other
many
countries.
which
find
we
re¬
own
of venture money from Canadian
into
savers
Canadian
good
ven¬
this:
say
in
situation
in
ourselves
is required. We do well
con¬
stantly to remind ourselves that
it is
fatally easy to ignore the
wider
issues
pressure
of
at
stake
under
the
day-to-day events.
thinking and far-sighted,
courageous leadership have never
needed.
them, the distant
row of an
perous
can
But
suredly
the
not
does
Canadian
and
less
more pros¬
troubled
world
become the reality of today,
and when
the
aoventure
comes
saga
to
rnznly believe that
JL'2 other members
L
>mmonwealth
of
of this great
be
written
Canada
I
Nations,
cX? traditional
as
in
way, will be re¬
having played a great
M worthy part.
corded
of the modern
States of America.
United
cumstances is to
sale
in
the
thereof
or
be
United
to herein
are
construed
States
of
being offered in Canada, but not in
circular is not, and under no cir¬
an offering of any of this issue for
This
as,
America
or
the
territories
or
possessions
an offering to
any resident of the United States or
tation therein of an offer to
buy any of this issue.
a
solici¬
in the
discussing, it is his right to risk
it
participation in the bolder risks—
and in the dividends that
now
so
not
by marily"; I did not go so far as to
say "exclusively."
overlooked
be
I have no formula.
After you,
deal¬
distribution of with your accustomed integrity,
sound issues.
They make avail¬ set up the securities issues so as
able the utmost information, en¬ to give a fair show to the investor
Banks do join investment
and help in the
ers
of
their
investment
one
dealers
another;
so
and
Banks
own.
sound
a
run
for
perhaps part of the
his
money,
answer
Commonwealth
International Corporation
lies
limited
complement in the field of public information
far as large issues
the other.
Your
and
Is there not
public relations.
(a
mutual
represent
bank
a
terminology
Our
at
aspect
loans
of
of
a
$100
we
tered to the sheer technical finan¬
cial description of the bonds.
the
is
jargon of the trade.
warmed your
advertising
emotion
of
fires
while thing
consisted
So it is
interest to
coop¬
problem of getting
work
may
(a
to
my
of
the
fund)
knowl¬
quality.
human
Perhaps Canadians could
benefit
Offerings
are
made by
means
the prospectuses which
of
are
available upon request.
recasting of the approach
a
that
in
mutual
is
ordinarily made to
them
offering issues.
You, yourselves, to my knowl¬
opening I stated a problem:
Canadian
individuals to set their own money
to
Canada Ltd.
language of term and yield.
the
individuals against ap¬ by
mutual
of
humanity, not merely in
erate.
the
at the
Leverage Fond
patriotism
talked int terms of free¬
proved stocks and bonds.
In
up
You
dom and
$230 million
than
our
and
That
Nearly $60 million was to edge, latterly has taken on some¬
of loans to
to
not fet¬
were
and you
other financial institutions,
more
selling
were
Of this amount
commodation to brokers and bond
before.
technical
of
we
million was ac¬
Sept. 30, 1949.
than
When
dealings Victory Bonds
these
welcome
earnings.
more
fund)
things ordinarily couched in the
industry has many day-to¬ frigid
day dealings with banks. I should finance?
and
of the British
some
techniques in the art of expression.
is
wideawake investors elsewhere.
granted
dream of tomor¬
immensely
referred
the
so
that they themselves
gain the advantages
and re¬
edge, have launched a substantial
basic
educational program.
in
the
long
run
cannot
foster and to stimulate
Investment Distributors Limited
It is
well conceived, commendable, and
fail to
Canadian
or
and to your public informa¬
generally,
we are
dealers—25% higher than a year Bank advertising,
Clear
been more
The shares
cur¬
by study¬
applying
largely go outside—is primarily,
share in and benefit by his coun¬ as I see it, a problem for the
try's development, the opportun¬ investment dealer who offers the
ities which offer gain will as¬ issues. You will note I said "pri¬
If
tures.
today,
nothing will be gained by half- financial character amounted to
measures.
A bold program exe¬ nearly $400 million —more than
cuted with vigor and
thorough¬ 16% of our total loan portfolio—
ness
well
perhaps
himself; and it must be avail¬
spective fields—by informing the able at his will. His savings con¬
individual
and
increasing
his stitute the primary pool of ven¬
awareness—to influence the flow ture capital.
How to enlist his
acknowledge that
Finally, I would
dealing with the
be
tion
area,
convertibility of ster¬
ling which, in turn, would ease
the
may
and
your
adapting to the advertising of is¬
in the
money
the are concerned, neither of us could opportunity
for warmer,
more
first—and most vital—step might
get along so satisfactorily without simple, human expression of those
well
it
ing
—
If it is to be risked
ments
areas.
be that inexperience,
bolder ventures of the kind
abling individuals to form judg¬ and
non-dollar
may
adventure.
taining markets for Canadian
ports to
It
—
also go a long way toward main¬
ex¬
answer—but
to
and
resources
Solution of that problem is not
easy.
master of
that investment dealers and banks
it is not the whole of
add
Canadian wealth.
of
Investment Dealers
course
while to
worth
rent educational efforts,
sues,
Canada could have.
sharing in the develop¬
Canadian
its
Joint Activities of Banks and
to the altar of restrictionism.
Last
of
fears at
of strength that you,
source
we, or
Of
velopments, for mining develop¬ lack of information, absence of
ments and for the great capital adequate appeal to the imagina¬
programs
already indicated this tion, or perhaps a "play-it-safe"
toward
year, for the expansion of indus¬ trend
securitiy, militate
against the fascinations, the prof¬
try, utilities and construction.
not prove to be outworn shib¬
boleths,
despite
the
obeisance
made by so many postwar plan¬
Concluding Remarks
wards of
no
well-informed pub¬
a
opinion; indeed a well-informed
the
ment
is going to be needed now; more
is going to be needed for oil de¬
may
ners
reliance for the investment
some
time of
single
a
mate
J. Ernest Savard, Savard, Hodgson & Co., Inc.,
Montreal; Stan Kimber, A. E. Ames & Co., Montreal
public opinion is the most helpful
And Investments
is
legitimate field for government
action; certainly far more legiti¬
real;
understanding. I have
the British
to
John N. Cole, Wood
Gundy Corporation Limited, Mont¬
Albert G.
B. Dawson,
K.
13
Montreal 1, p.q. Canada
THE
14
Thursday,
COMMERCIAL and FINANCIAL CHRONICLE
E. Douglas Huycke, Bache & Co., Toronto; Jack Young, Dominion Securities Corpn.
Limited, Toronto; Arthur B. Cayley, Bartlett, Cayley & Company, Limited, Toronto
W.
D.
Rose &
Currie, Goulding,
June 22.
950
David R. Dattels, Dattels &
Thomson & McKinnon, Toronto
Co., Ltd., Toronto;
Company Limited, Kitchener, Ont.; James T. Troyer,
Mutual Interests of Accountants and Investment Dealers
Chartered
vestment
accountants
dealers have
a
Reporting
President, Dominion Association of Chartered Accountants
interest in the present and future
financial stability of the country.
This
Prominent Canadian accountant,
fre¬
quently
finds
them
some
business
for
common
interest in nation's financial
operate to educate
integrity in financial reporting, and
as
or
purpose
happens
in
ence
investment dealers to
urges
and
enterprise must be supported.
a
vestment
of world leadh
i
p
financial
in
reporting.
Without
financing would
be possible.
The misconcep¬
tions on the part of the general
yet
public
use
Harvey Doane
,
dealers
and
An
In¬
chartered
their influ¬
of
chartered
accountants
can
economically
and industrially, and our people
enjoy a standard of living com¬
the size of business
to
business
operations.
During
century it was the un¬
usual corporation which provided
the
public.
our
are
undoubtedly caused in
large measure by the lack of
information provided in respect
full statements to investors
important requisite for the
continuation of
as
profits
a
both
of life is play their part.
Several surveys
accountants have both made an a clear understanding by the citi¬ which have been made from time
zens
of the country as to why to time show consistently that the
important contribution to the de¬
velopment of the corporate form the capitalistic system does pro¬ average man on the street feels
position
s
neces¬
this basis modern
co¬
has
Canada
attained
r
they should
says
Advocates truthfulness and
of profits.
having corporations give simple,
businesses
generally.
e
stability,
public in economic advantages of capitalist system and in
knowledge of true nature and
particular
often
investment
not
wel¬
of
and
sity for truthfulness and integrity
holding Accountants and Investment Deal¬
co¬
the
fare
have
ers
operating
for
Accountants
dealers both recognize the
common
interest
Truthfulness in Financial
By HARVEY R. DOANE*
in¬
and
common
way
last
useful
any
information to its
even today this
shareholders, and
indifferent
attitude
shareholders exists in
ters.
*
Vy-
towards
some
quar¬
(
*
In all phases of public responsi¬
that the net profits of corporations
living and the place of profits run anywhere from 10 to 30% of bility we see an increasing aware¬
ness
of
the
welfare of the
for
service in this field if the in that system.
While our first reaction
Unless the people sales.
parable only with that of our
have
a
clear
understanding of may be that "it would be nice if community' as a whole-and in
powerful neighbor to the south. corporate entity is to continue its
financial reporting this has been
these points, we may lose our it were
true," our second thought
We
both
believe
this favorable important role in our economic
over
the
years
by
system. However, the corporation present way of life by default. The will probably be that this in¬ reflected
condition
to
be
possible
only
must not be permitted to abuse its development of this understand¬ accurate
opinion stems from a changes in the Companies Acts
under the form of business econ¬
which require higher and higher
privileges and it must be pre¬ ing and faith in our financial vague impression that the cor¬
omy called capitalism and implicit
standards of reporting to share¬
institutions
cannot
be
accom¬
poration is taking more than its
in this belief is a faith in the pared to accept its own share of
It is generally recog¬
plished by any one interested fair share out of the consumer's holders.
tenet of the importance of profits responsibility.
On the other hand, the nized today, however, that even
There are certain groups in this group, but we must each be pre¬ dollar.
as a form of incentive and in the
the Companies Act, 1934, Canada,
pared
to
make
a
contribution average man's
conception of a fair
necessity of continuing adequate country, as in the United States
does not require a company to
and Great Britain, who are deter¬ through whatever means is avail¬ profit which business should re¬
profits if the corporate form of
able to us.
ceive is significantly greater than give sufficient information on cer¬
business enterprise is to survive. mined to destroy our way of life
tain matters or to such a degree
profits have ever been in modern
The level of business economy and who believe the capitalistic
Educate Public on Nature or
that the shareholders can be said
form of economy and profits to
as we know it today would not be
times.
It should be possible to
Profits
to
be
fully or adequately in¬
be something evil. Unfortunately,
possible without the limited lia¬
develop an awareness of the sig¬ formed.
The lack of knowledge
these groups are aided not only
by the
bility form of business institution,
general public as to the size of nificance of profits as an incentive
If it is generally believed that
and if that high level is to be by people who think it fashion¬
able to attack the capitalistic sys¬ corporate profits points up one for the promotion and establish¬ more information should be given,
maintained, the corporate form of
of the main avenues
tem, but by supporters of our way
along which ment of business enterprises this could be forced by extensive
amendments to the various Acts
of life who, by thoughtless action we may well
*An address by Mr. Doane before the
concentrate our ef¬ which will result in
34th
of
enterprise and they must con¬
tinue to accept their
Annual Meeting of the Investment
Canada, Seigniory
Club, Montebello, Quebec, June 8, 1950.
indifference,
or
Dealers' Association of
ground for
responsibility
provide
criticism.
valid
vide the highest possible standard
of
forts at
the
continuing
education, and in
investment
dealers
this field
and
the
improvement in
our
standards of
living.
governing financial reporting,
perhaps along the line that has
been followed in the United
States
the Securities and Ex¬
change Commission, but I do not
think
that
the
most desirable
through
problem.
re¬
quire the establishment of som
agency to decide what information
must be provided to shareholder
and the public, but it wooId ais
of
means
Collier Norris
Quinlan
&
Savard, Hodgson & Co., inc.
Members of The Investment Dealers
MEMBERS
MONTREAL
STOCK
MONTREAL
Association of Canada
EXCHANGE
CURB
MARKET
INVESTMENT DEALERS
276 St. James
Street W., Montreal
QUEBEC
—
Plateau 9501
JOHNS, P. Q.
Quinlan
Limited
Montreal
507 Place d'Armes
HArbour 2201
Bankers
Hart
&
how the
in
information shouia
compiled.
This suggests fur¬
ther governmental interference
business
and
I think you
be
Association
of Canada
The Montreal Curb
Market
of America
Toronto
320 Bay
Street
WAverley 2984
*™St- ,ames Street
W- Montreal-Plateau 9501
SHSTBf00KE
ST.
JOHNS,
P. Q,
TROIS-RIVIERES
The mam
circumstances
the
_
comi>
surnoi
each
individual :<p-P'
entity are usually in on-;
® nt
other
from
significantly
those of
>!-;;Lilar
apparently
corporations and, to ma ^
fairs, a
leeway
order
to
^
.
their fmar ; ^ of
considerable a-.:;, in
must be
"facts
marshal pertim.-*
reporting
of
Continued on i -9?
I
_
wu?
ing
or
STOCK BROKERS
have
with me that we
jection, however, is that
operations today are so
that
Exchange
Investment Dealers Association
Investment
Savard
Members of.
The Montreal Stock
MEMBERS
The
and,
much of that now.
&
it should
some case,
would have "to go so far as to w■ "
agree
Collier Norris
the
have to indicate how
cate
TROIS-RIVIERES
solving
only does such a course
provided
SHERBROOKE
ST.
Not
Convention Number
THE COMMERCIAL and
FINANCIAL CHRONICLE
Chalmers, W. C. Pitfield & Company Ltd., Toronto; Robert A.
Jarvis, McLeod
Weir & Company Limited, Toronto; Murray D. Cox, Greenshields & Co'
Toronto; J. E. Choat, James Richardson & Sons, Toronto; Telfer R. Hanson
L. P.
15
J. Louis
Young,
&
Goulding, Rose & Co., Toronto
Levesque, Credit Inter provincial, Ltd., Montreal; Y. Levesque, N. P. Levesque
Levesque, Montreal; Howard W. Hunter, Fairclough & Company,
Ltd., Toronto;
Gaston
Thibodeau, Credit Interprovincial, Ltd., Montreal; Rodolphe Casgrain,
Casgrain & Co., Ltd., Montreal
High Production and Employment Featured 1949 Canadian Economy
During 1949 the Canadian econ¬
Gross national
output estimated at $16 billion with
was characterized by high
production and employment. For
omy
the
year
inflationary
pressures
ist
of
product
no
the
to
most
obvious
lies
in
soft
of
1949
000,000
compared
with
$638,in the first 11 months
of 1948 while
imports were $287,000,000 in the first 11 months of
1949 compared with $275,000,000
from population growth.
in
spot
foreign
trade.
Here, improvement in the Euro¬
domestic
pean
supply,
combined
with the dollar difficulties of the
sterling
Foreign Trade
in the first 11 months of 1948.
1948.
Canadian exports are now run¬
ning
at
a
lower
1948, and for the
figure
than
in
whole,
small decline in volume
a
year as a
is ex¬
raises serious prob¬
pected. In 1949, Canada's current
exports, par¬ account surplus with all countries
ticularly of agricultural produce. will be
considerably less than the
It is impossible to judge the ex¬
$453,000,000 surpluses of
1948,
tent of the
setback this may give largely because of the substantial
lems
to
area,
for
Canada's
the Canadian economy.
Look¬
ing beyond the immediate future,
however, this unfavorable influ¬
ence
at
will be offset to
least
some
extent
by the increasing indus¬
increase
in
imports
from
United States.
States
which
HON. C. D. HOWE
Minister of Trade and Commerce
Dominion
of
growth
assures
a
of
exports
were
to
greater domestic
imports
States
time merchan¬
from
increased
$1,646,000,000
United
the
$1,801,000,000 in
United
when
balance
States
is
invisible
interest
and
The
with
even
items
the
greater
such
dividends and
as
000,000
and $107,000,000, respec¬
tively, for the first 11 months of
over
since
of
the
unfavor¬
trade
was
more
with
set by favorable balances with the
United
Kingdom and other
in
These latter favor¬
balances
provided "Canada
able
with United States
dollars, except
Continued
on
page
Members Investment Dealers
Ass'n
of
Canada
GOVERNMENT, MUNICIPAL
AND CORPORATION SECURITIES
•
Montreal
8623
real
terms.
Unemployment at the end
October, although somewhat
above 1948 levels, was less than
Robertson &
of
3% of the civilian labor force.
In
that
pressures
MAJOR & COMPANY
the
inflationary
reflected
were
the rising prices of
Montreal
in
Stock
were
in any
appraisal of
much
to
TORONTO
Brokerage facilities exclusively for
SECURITY DEALERS and Institutional
Montreal
OTTAWA
Investors
the economic
Royal Bank Building
situation. This is no longer true.
Postwar shortages, which contrib¬
so
Market
Plateau 3971
longer apparent in the latter part
For the past two or three
short-run supply conditions
have been a major consideration
Exchange
Stock Exchange
266 Notre Dame St. West
no
years
Curb
Exchange
Montreal Curb Market
1948
of 1949.
uted
Montreal Stock
The Toronto
Montreal
Morgan
Members
Members
general,
price
MONTREAL
increases
during the period 1946-48, have
to a
large extent disappeared and
Telephone
—
Underwriters and Distributors
Marquette 8671
the influence of deferred demand
has
abated.
Longer
-
and
run
GOVERNMENT, MUNICIPAL
Jiore normal factors, particularly
from
the demand side, must now
be given
greater weight in assess¬
ing / the
inherent
strengths
or
weaknesses of the Canadian econ¬
omy.
Since 1922
A
demand
seems
firm.
Personal in¬
have continued to increase
throughout the
year.
Government
expenditure
dency
is rising.
Any ten¬
capital investment to
because of' the need for
for
decline
greater
selectivity in business
pansion seems
by projected
Utility and Industrial Issues
in CANADIAN
BONDS
STOCKS
Government
Bank & Insurance
Industrial
Industrial
Real
expansion in the oil
And Western Canada
by
Y?
C8»
the
"Canada,
Dominion
department
of
Investment Dealers'
1950,"
Bureau
Trade
Ottawa, Ont., Canada.
Inc.
Direct Private
Wire between
LAncaster 9241
Association of Canada
St. James St., W.,
Montreal
LANCASTER 5101
of
and
Interprovincial Limitee
Investment Dealers
Kippen & Company,
Members
from
Credit
Oils
210 Notre Dame Street West, Montreal, P. Q.
Imperial Bank Bldg., 610
^erce,
Utility
Mining Shares
Estate
likely to be offset
iron-mining industries and in
B„r-euri,nt?d
Public
Public Utility
ex¬
housing.
Cnr
0r
Public
Service for
BROKERS and DEALERS
comes
aim
"
Complete Oyer-the-Counter
At the end of the
year domestic
over¬
countries.
seas
Morgan, Kempf & Robertson Ltd.
CANADIAN
MonfrM*, Tomato and
Ott^
the
than off¬
show
and
1948
dollars
266 Notre Dame St. West
Canada
$16,000,000,000
increase
some
States
tour¬
Plateau
exceed
decline in Cana¬
no
from able balance
first
11 United States
the first 11 months of 1949.
unfavorable
was
holdings of gold and United
markedly
in
months of 1948 to
the
da's
the
$1,344,000,000
and exports of non-monetary gold
$126,000,000 for the first 11 months
population
of
1949 compared with $1,353,-
market.
dise
same
the
trialization of Canada and by the
continuing
At the
'
Merchandise
United
into
exports
Kingdom
were
United
There
The
demand
taken
are
Merchandise
$655,000,000 in the first 11 months
situation arising out of dollar difficulties of
sterling area, but remedy is seen in
increasing industrialization of Canada and expanding domestic market that
comes
expenditure
account.
longer apparent. Exploitation of new oil fields and new iron
mining
developments give promise of continued Prosperity. Soft spot lies in
foreign trade
whole, the gross
will" probably
a
as
•national
1948
OTTAWA, Ont.
QUEBEC, P. Q.
MONCTON, N. B.
20
THE COMMERCIAL and
16
Hal
Joseph W. G. Clark, Executive Secretary,
Investment Dealers Association oj Canada
Murphy,
Thursday, June
FINANCIAL CHRONICLE
Commercial and Financial Chronicle, New York City; C, B. Irwin,
Ltd., Calgary; J. Paul Guite, Credit Inter provincial, Ltd.
Arnold G. Plaxton,
Carlile & McCarthy,
^ ^
Intercity Securities
Corporation Limited, Toronto
Montreal
I.D.A.C. Executive Committees
McCULLOCH,
Dominion Executive
KILBURN, PETER
Greenshields
&
FARNSWORTH, H. R.
Co., Inc.
Royal Securities Corpn., Ltd.
Calgary
Montreal
3RENNAN, F. J.
F.
J.
Brennan
G.
R.
Osier, Hammond & Nanton,
Ltd., Winnipeg
Committee
Co., Ltd.
Royal Securities Corpn., Ltd.
Saint John
Halifax
ROSS, G. A.
Rene-T. Leclerc
Montreal
;
Central District
Nesbitt, Thomson & Co., Ltd.
Saint John
Burns Bros.
BURNS, C. F.
BRENNAN, F. J.
&
(Chairman)
Ltd.
MacMURRAY, J. A.
Eastern Securities
Co., Ltd.
BELL, H.
W.
Charlottetown
RAMSAY, G. W.
Public
Utility &. Industrial
Stocks & Bonds
1891
York
New
Other
Stock
Exchange and
115 BROADWAY
105 WEST ADAMS ST.
New York 6, N. Y.
Chicago 3, 111.
Tel.:
BA
Tel.: CE 6-8900
7-0100
Direct Wire
to
Greenshields & Co., Montreal
and Milner, Ross & Co., Toronto
Sons
Melady, Sellers & Co., Ltd.
Winnipeg
Alberta District
Matthews &
Co., Toronto
MacKEEN, D. W.
Royal Securities Corpn., Ltd.
Clement, Guimont, Inc.
Quebec
Ottawa
FARNSWORTH, H. R. (Chmn.)
Royal Securities Corpn., Ltd.
Calgary
HUGHES, F. N.
James Richardson & Sons
Edmonton
McLELLAND, W. J.
COLE, J. N.
Wood, Gundy & Co., Ltd.
Gundy Corpn., Limited
Guildhall
&
THOMAS, G. N.
Co., Ltd.
LACE, F. D.
Co., Ltd.
Toronto
A. E. Ames &
7
Co., Ltd.
Toronto
Securities, Ltd.
YOUNG, N. D.
Montreal
Dominion Securities
GORDON, A. S.
Royal Securities Corpn., Ltd.
Western District
GRENIER, J. N. E.
McCULLOCH, R. G. (Chairman)
Osier, Hammond & Nanton,
Ltd., Winnipeg
Grenier, Ruel & Cie, Inc.
Quebec
C. L. Jackson & Co.,
Edmonton
Toole, Peet Investments, Ltd.
Calgary
MORGAN, R. T.
Corpn.,
Ltd., Toronto
Montreal
JACKSON, W. C.
MacKEEN, H. D.
SPRAGGE, W. P.
EVANS, W. J. S.
Richardson
Winnipeg
Fairclough & Co., Ltd., Toronto
Montreal
Principal Exchanges
James
:
HUNTER, H. W.
Montreal
BEAUBIEN, A. S.
L. G. Beaubien &
Toronto
London
GINGRAS, GERARD (Chairm'n)
Rene-T. Leclerc Inc.,
STEPHENS, S. C.
A. E. Ames &
Eastern District
Wood
MEMBERS
Lightcap Securities, Ltd.
Winnipeg
HUGHES, J. O.
Stanbury & Co., Ltd, Halifax
CLEMENT, HENRI
ESTABLISHED
LIGHTCAP, J. S.
Co., Ltd.
Bankers Bond Corpn., Ltd.
Montreal
goodbody & Co.
&
DEANS, M. C.
Stanbury & Co., Ltd.
Saint John
STANBURY, H. N.
Mining
Pitfield
C.
Toronto
I
Canadian Oil,
Wood, Gundy & Co., Ltd.
Winnipeg
Co., Toronto
CHALMERS, L. P.
Royal Securities Corpn., Ltd.
American Markets in
KNIGHT, D. N.
B.
W. C. Harris &
PATON, J. R.
We Maintain
Houston, Willoughby & Co,
Ltd., Regina
Ltd., Toronto
Saint John
Toronto
HOUSTON, W. M.
McLeod, Young, Weir & Co.
F. J. Brennan & Co.,
Denton, Ltd.
Denton, Ltd.
Winnipeg
BACKUS, H. S.
John's
Saint John
Bros.
Burns Bros. &
Ltd.
Toronto
Cornell, Macgillivray, Ltd.
St.
& Denton,
Oldfield, Kirby & Gardner,
Ltd., Winnipeg
IIALL, E. O. W.
BURNS, C. F. W. (Chairman)
MacGILLIVRAY, H. DARROCH
Maritime District
Inc., Montreal
COPLAND, R. A.
Collier, Norris & Quinlan, Ltd.
Gundy Corp., Ltd.
Halifax
Royal Securites Corpn., Ltd.
Winnipeg
Montreal
-
GRIFFIN, H. S.
Wood
BENHAM, H. A.
Nesbitt, Thomson & Co., Ltd.
Co., Ltd.
Vancouver
GINGRAS, GERARD
Burns
Eastern Securities
HAMM, GEORGE P.
GLASGOW, F. L.
&
NESBITT, A. D.
COLWELL, R. M.
Wood, Gundy & Co., Ltd.
Edmonton
NEWTON, D. C.
Dominion Securities Corpn.,
Ltd., Calgary
TANNER, C. R.
Tanner & Co.,
CANADIAN STOCKS
Orders executed
on
Ltd., Calgary
TURNEY, A. H.
James Richardson & Sons
Calgary
all Canadian Exchanges
CANADIAN
CANADIAN STOCKS
SECURITIES
Traded in United States Funds
Pacific District
GLASGOW, F. L. (Chairman)
Royal Securities Corpn., hia.
Vancouver
BLAIR, K. S.
James Richardson & Sons
Vancouver
♦
BROWN, W. T.
Odium
CHARLES KING & CO.
Investments,
Brown
Ltd., Vancouver
Members:
New
York Stock Exchange
New
York Curb Exchange
Montreal Stock Exchange
Montreal Curb Market
Toronto Stock Exchange
Bache & Co.
Founded 1879
MEMBERS NEW
61 Broadway
•
New York 6, N. Y.
Teletype NY 1-142
Royal Bank Bldg.
Aldred Bldg.
Toronto, Ontario
LEADING
36 WALL
Montreal, Quebec
DIRECT
NEW YORK
PRIVATE WIRES
—
TORONTO
YORK
STOCK
STOCK
AND
AND
OTHER
EXCHANGES
MONTREAL
EDGELL,
Co., ua.
R. H.
Yorkshire
ST., NEW YORK 5, N. Y.
DIgby 4-3600
,
Securities,
STAR
BUILDING, TORONTO, ONTARIO
Waverley
4871
,,
,
^a.
Victoria
McDERMID, D.
C.
McD'ermid, Miller &
CONNECT
—
Wood, Gundy &
Vancouver
EXCHANGE
COMMODITY
DINGLE, H. H.
id,
-
Ltd., Vancouver
SHERWOOD, G. D.
McMahon and
Vancouver
Burns, -<
imited
Convention Number
The commercial and
financial chronicle
Kilburn, Greenshields & Co. Inc., Montreal; C. L. Gundy, Wood, Gundy & Co.,
limited, Toronto; Wilfred J. Borrie, Pemberton & Son Vancouver Limited, Vancouver'
B. C.; A. D. Nesbitt, Nesbitt, Thomson & Company, Limited, Montreal
Peter
Mrs. John
17
Ridley; Lord Burghley, London, England; Mrs. Peter Kilburn; John B.
Ridley, A. E. Ames & Co. Limited, Toronto; Lady Burghley; Peter Kilburn,
Greenshields & Co. Inc.,
Continued from page 14
In
the
annual
report of
Montreal
the
have
I
mentioned
only
few
a
company's affairs the investment
dealer
Mutual Interests of Accountants
And Investment Dealers
items of information which I feel
you
tion
of
comparative
disclosure
such
which will not be annual reports, and in many in¬ should not be expected to ex¬
too susceptible
of misinterpreta- stances significant strides have press an opinion on a pro forma
been made in providing informa¬ balance sheet unless the
tation.
respons¬
In my
opinion, the best way to
reporting is to
bring about proper
educate
investors
and
seek
to
tion
beyond
the
strict
legal
requirements to their sharehold¬
Some
ers.
attractive
reports
to
the
are
very
ible
firm
parties have entered
commitment
the transactions
on
into
zation should give
which would be
out information
to its
competitors, but there is lit¬
doubt that most companies
tle
could
provide
information
done.
is
shareholder
A
pective
more
than
shareholder
or
pros¬
should
have
sufficient information available to
him
to
him
allow
make
to
an
informed opinion as to the state of
the
in
in respect of
which the pro
eye
that
manner
a
can
In
be
any
prospectus, the
presen¬
claim
he
that
was
nancial
statements
of
the
bare
minimum legal requirements is all
that the shareholder is entitled to
receive.
this
In
the
case
share¬
holder gets the shell, but not
auditor.
The
is in
a
tion
and
the making
investment
dealer
particularly delicate posi¬
has
sure
a
real
interest
that this
meat.
This objective applies not only
to financial information
provided
prospectuses, but also
the
to
The
annual financial statements.
investment dealer who is fulfilling
his role in the community is in¬
terested not only in the
flotation of
successful
particular issue, but
a
he must also
with
concerned
be
the development and maintenance
of
a
market for the particular se¬
curities
already
sold.
This
re¬
sponsibility will include providing
information and service to all
Persons
who
through his actions
have acquired
an
interest in the
securities.
Dealer
issued
search.
effectively
1
No.
"A
was
Dis¬
Financial
of
Standards
of
Annual
in
closure
in
fact
part of
the shareholders' equity.
In
Canada,
provide
This is
sales.
sary
one
essentials if
uation
of
a
of
a
as
the
to
neces¬
eval¬
proper
company's
is to be made, and
the
other
considerable
ment.
information
prospects
it would
appear
hand
and
can
with the
cial affairs
they
the
of
Mercantile
this
the
jnvesting public
anee of
a
co-operate
taken
in
step
first
a
will
persuade
tions
that
the
the
education
profit
of
the
and
motive
of concerns
increased
with
the impor-
reedom of enterprise in
hor lie
system.
^ number
if
is
still
improve¬
the
In¬
Chartered
efforts
to
their
Association
countants
continue
best
of
Ac¬
their
the corpora¬
contribution
make toward the fight
can
does
or
Securities and Exchange Commis¬
system
sion
corporations
in
the
United
States,
and
in
apparently has had few ill effects,
is
not
if any, upon the status and opera¬
adoption
in¬
tions
disclosure,
of
the
companies
making
such disclosures.
a
impressing
and
only
that
possible
of
in¬
those
suggesting
stances in which financial report¬
we
ing, to be informative and
to
have
would
minimum
go
of
the
Bulletin No. 2,
"A Statement of Minimum
Which
of
Professional
of
Prospectuses" set out certain
aspects of the auditor's
corporation bonds and corporation shares.
With head office in Toronto, branches
to
Victoria in Canada
well
as
Stand¬
Practice
Apply in Respect
Should
and
the
requirements
Companies Act.
ards
useful,
beyond
organization is engaged in the under¬
writing and distribution of Canadian government, municipal
responsi¬
Direct
wire
connections
as
are
located from Halifax
in London,
between
New
England.
York, Toronto and
Montreal.
Stock
Exchange orders executed.
financial
the
sale of securities.
into
going
Without
detail,
I
with
can
attention
our eco-
giv-
are
to
their
co-operate
usefully
public ac¬
presentation of
Incorporated
14 Wall Street
New York 5, N.Y.
the independent
statements
In the
in
a
prospectus,
forma statements
These
investment
the
wherein
Wood, Gundy & Co.,
can
be
are
pro
King Street West, Toronto 1
Branch Offices in
often used.
Montreal, Winnipeg, Vancouver, Ottawa, Hamilton, London, Ont., Kitchener,
misinter¬
Regina, Edmonton, New Westminster, Victoria, Halifax and London, Eng.
readily
carefully pre¬
pared, enter the field of prophecy,
rather than remaining in the field
of factual reporting.
The auditor
preted and, if not
Head Office—36
upon
the
education
through
standards
the
of
will be achieving
worthwhile purpose.
Canadian Securities
Established in 1905, our
such
wider
was
independent would like to mention one or two
concerns
as to
that
the
in
and
Companies,"
bulletin
both dealing, thus countant.
are
assisting in
there
for
room
feel
I
Canada
they
to
this( regard, but
seldom vestment Dealers'
companies
any
on
Statements of Manufacturing and
Public accountant in
promoting points
adequate disclosure of the finan¬ dealer
.
Bulletin
Statement
reporting in connection with
investment dealer is in
Position where he
tog
reserves and re¬
are
recognizing
are
responsibility in
by the Committee on
and
Auditing Re¬
extremely important in
Should
Cooperate
whom
liability
which
made
share¬
It is very gratifying
bility which were deemed to be
Investment
The
ters
Accounting
misled.
in
between
as
be
corporation
that many of the companies
and in Canada
reserves,
differentiation of reserves
serves
to
holders.
note
should
agree
capable
affairs and, sup¬
happen either intentionally
The Dominion Association of
plementing that with whatever
advertently.
other information can be obtained, Chartered Accountants is attempt¬
make his own reasoned estimate ing to promote more useful and
informative financial reports
as to the worth of the particular
securities. If this is done, no per¬ through the medium of bulletins
on accounting and auditing mat¬
son will be in the position at a
company's
later date to
inventory
as
reserves
will
available
readily understood and that is tation
of information should not that shareholders should be given against
socialism
and
govern¬
of proper interpretation.
As you know, ment-controlled
business
is
by
Other companies, however, feel be such as to be a misinterpreta¬ this information.
that a voluminous eye-catching tion of the financial information this information must be disclosed educating the public in respect
adequate
presently report with disclosures in the fi¬ reported on by the independent by all companies reporting to the to the advantages of our economic
useful comfort
a
formation
the
to¬
statements,
of
a
and give a forma statements are based, and
full
picture of the company's there should be reasonable assur¬
curate information concerning the
financial affairs of the companies operations and the prospects as ance that the position of the com¬
the directors see them, in addition pany will in fact resemble that
in which they are interested. This
to providing factual financial in¬ shown by the statements.
is not to suggest that any organi¬
management to give full and ac¬
influence
encouraging the presenta¬
full
the
in the manner
his
use
can
wards
18
C. Cassidy, Mackellar Securities, Ltd., Toronto; Barry German, Greenshields
Co., Ottawa, Ont.; S. R. Mackellar, Mackellar Securities, Ltd., Toronto, Ont.;
H. L. Petrie, Jennings, Petrie &
Co., Ltd., London, Ont.
Frank
&
Continued
from
i95()
Johnston, G. E. Leslie & Co., Montreal; Stanley Cox, Bankers Bond Corporation
Reed
Limited, Toronto; George McCain, G. E. Leslie & Co., Montreal; J, A. Leddy
,MacTier & Co., Limited, Montreal
'
.
Continued
except the important one of a do¬
source
of
hydrocarbon
8
page
Thursday, June &.
CHRONICLE
THE COMMERCIAL and FINANCIAL
from
11
page
mestic
fuels.
Oil and Canada's Future
more
provincial Pipeline is
rior, Wis., at the head of the Great
Superior, lake tank¬ those areas will be able to get
ers will
carry it to oil refineries ample amounts of petroleum prod¬
in Ontario and, as supplies become ucts under advantageous economic
increasingly available, a demand conditions.
Furthermore,
these
United
readily
develop
in
Canadian
States.
larger stocks of domestically pro¬
the
duced
crude
and
refined
products will
interests
of
country
one
stimulation
of
trade.
In
when hemispheric
be available for the work of con¬
is
vital to world
States because
quering the frontier in the
economic ties
it
remote
may
be
refined
in
the
United
as time goes along
be to both countries' ad¬
vantage— economically and
tance from
sources
This movement of crude
the
Prairie
It
greater dis¬
a
Provinces
across
will
is
my
own
benefits of the
on
ulti¬
opinion that the
oil discoveries
new
the Interior Plains will
throughout Canada
more
spread
quickly
is
mately bring about the mechani¬ than
generally:; realized.
zation of the regions between the Through its rapid mechanized de¬
well and the farthermost refinery.
velopment
If crude oil
of this
be delivered com-
can
petitivelv to refineries in South¬ ideal
ern
Ontario,
cities
like
it
is
plain
Regina
or
that
during
to
in these benefits.
Winnipeg, the
fully
She
blessings
oil
has
an
utilize
had
all
mechanization
of
are
these
of extreme im¬
is
It
comforting to
example, that as the
found, and
pipelines
we on
with
a
and
as
her wells,
refineries
this continent
greater
tion.
the first half
century, Canada is in
position
are
peace,
are
tion
Companies
And Investment Dealers
expand
provided
measure of protec¬
I am later on
think
Thus, Canadian oil may be
-
for
ers
and
self-improve¬
the
not
growth of
unrest amongst the members
any
of
mutual
are
group with
our
in which
way
business.
mirable
To
respect to the
you
carry
on
your
repeat, it is an ad¬
commentary on both the
concerned
does
Sometimes, how¬
there has not been the in¬
ever,
terest in the affairs of the debtor
appoint
tionships which
It is also
•
equipped to
.
*'
of the
American way of life.
execute
■
orders
on
all Canadian Stock
Exchanges.
Incorporated
between the two groups.
happy basis.
,
ous
es¬
'
North
bodies
government
tion
Other
and
both.
us
I
in the
operation
am
taxa¬
on
matters
which
mittee
future
our
co¬
along this and similar
lines should be
even
is
we
obvious
that
Problems in Trust Company Field
1
inclined to
greater.
have
It
large
a
There is
field
interests.
association
understood
and
ers,
that between the two sides of
a
It
is
our
common
VANCOUVER
MONTREAL
LONDON, ENG.
there
shall be a far-sighted and
vigorous development of our Ca¬
nadian
economy in all its aspects.
For this
reason, we should both
consider whether it is not to our
mutual
advantage to have
a
com¬
no
problems of
particularly great import which
might fall within this class, but
there
we
minor
are
companies
larger segment
of
-
one
For example, the posi¬
trust companies as
the
WINNIPEG
other
case where closer
coopera¬
tion would be useful
arises when
a
security
reason
of
of
such
gets
into
default.
cases
on
trouble
by
The handling
behalf
of
cor¬
than
the
do
the
of
(
a much
financial
occupy
trust compa¬
the
in the ap¬
to in¬
difference
proach of trust companies
occasionally
vestment problems is
in
We
overlooked.
the
trus
companies when dealing withi tn
question of buying and selling
securities, have as many sePara ,
accounts for which to buy an
sell
we
as
have
separate estates
buying an
account, m
other words, each separate esta
must have
its own investment
policy based on its separate ne
well as
and trusts, as
selling for our own
The trustee side of our
problems which
might well discuss with
for trust companies
I suspect for the
investment
dealers.
I think we could work
out some better
way of handling
this problem in the future.
An¬
VICTORIA
occasionally find mis¬
by investment deal¬
that
is
an
adequate
life
nies,
that
concern
nor
Affiliates in:
TORONTO
matter in the trust
the members of our
We
factory either
Fifty Congress Street, Boston 9
one
which
understanding of the basic rela¬
are
both composed of business tionship between the trust com¬
pany as trustee and its benefici¬
concerns which offer services to
Insurance companies,
the public, and these services are aries.
devoted primarily to the proper banks and loan companies, when
use
of the capital resources be¬ they are buying or selling securi¬
ties, have basically only one ac¬
longing to that public.
As
a
count
so
far
as
investment is
matter of fact, you of
course, as
the sellers and we as the buyers, concerned, that is to say, they buy
Obviously, this
but it does seem to me that our for themselves.
cooperation in all matters affect¬ simplifies the problem of buying
Because
ing securities should be as close and selling securities.
common
sub-agents in the recent Dominion
Loan, was not particularly satis¬
Telephone WOrth 4-2400
standing
concern
another.
Street, New York 5
a
cussions
mutual and
a
tion
Two Wall
to
ciations have joined from time to
*
moment there are
A. E. Ames & Co.
members
In the past our respective asso¬
such
on
approach to any of the prob¬
lems which will
undoubtedly con¬
front us in the future.
At the
Inquiries Are Invited
each association
see
through which com¬
any
problem of mutual
could be clarified by dis¬
are
mon
Your
Personally, I
committee
exist
do
Matters of Common Concern
:'
one
responsible
a
dealer.
investment dealers that the rela¬
organization has actively engaged since its foundation in
<
from
expect
investment
world
''
municipality that
company or
would
would like to
as
.
when such trouble
develop.
trust and loan companies and the
think that
underwriting and distributing Canadian Government, Provin¬
cial, Municipal and Corporate Securities.
we
ideas
coin.
Our
past
ment
peoples, providing its contribution
1950
the
In
have had great help and coopera¬
tion from most of the underwrit¬
number of
1889
association.
our
might
study, these
suggestions are offered strictly as
you
affect
Canadian Securities
porate investors, fortunately now
very rare, is
a responsibility oi
time in submitting briefs to vari¬
;
the maintenance
men¬
some
sential to the future of democratic
to
going to
items in current prac¬
tice which we in the trust business
these
strength
Canadian oil industry progresses,
as
additional reserves of crude
Increasing Oil Supplies
of supply.
for
know,
Canada in Position to Use
,
crude with each other rather than
so
portance.
geo¬
graphically—to in effect exchange
haul oil to markets
more
parts of Canada.
auto¬
matically helps the other, lead¬
ing as it does to a greater ex¬
change of goods and the general
days
made
Problems of Trust
-
gener¬
for
Lakes.. From
could
~
the
fields to Supe¬
the Alberta
pace.
that Americans
ally realize that what benefits
prairies, conditions are ideal Canada also benefits us: We are
the permanent development bound
together by so many eco¬
of refining centers. Customers in nomic ties that to advance the While
construction. This will take crude
from
that
less than half that distance across
under
now
accelerated
think
I
has
she
Canada should expand at
source,
a
that
Now
business
in total than tr
ourselves.
Trustee
allow a trust
c^mpa
is much larger
ing
for
will
or
not
any
_
other trustee for
j
ter, to buy securities for itself
later on to sell them to
it is tnistee
this, L *• .
be held to guarantee the . t
in the hands of the estate
is to say, the estate
iich
tates for which
trustee were
benefit
the
_
to do
of
any
profit
might arise by reason of
vestment, but the trustee
have
any
to
reimburse
the
loss. ' I think you
3
in" I
;^jorj
Sflv^ily
wilU
Contention Number
THE
COMMERCIAL
and
FINANCIAL CHRONICLE
John C. Rogers, J. C. Rogers & Company, Limited, Montreal; D. Arnold
Skelly A M
Kidder & Co., Burlington, Vt.; G. M. Babbitt, Biggar &
Crawford, Toronto;'
J. G.
appreciate that this is not
sition in which
trustee
a
po¬
a
cares
to
This means, therefore,
that when any investment is of¬
find itself.
to
fered
trust
the
problems arising as to whether or
company
investment
the
not
a
will
chased and in what
much
very
be
pur¬
quantity,
complex
more
they are in the case of
are
than
sister
our
concerns..
If
occasionally you find a trust
company buying and selling the
same
security at the same time,
or
taking delivery of a block of
bonds in many relatively small
pieces, remember we are dealing
for many individuals whose in¬
vestment needs
differ materially,
and I
hope that we will have your
comprehension and understanding
of the
Robert
Clark, Calvin Bullock, New York City; Harry J. Bird, H. J. Bird & Company,
Ltd., Vancouver; H. H. Dingle, Wood, Gundy & Co., Vancouver; J. M.
McConnell,
Nesbitt, Thomson & Company, Limited, Montreal
Goldie, Cochrane, Murray & Co., Ltd., Toronto
after
a
great deal of study of the
treyid in the United States
what
known
are
as
toward
trust
common
funds, we made representations
last spring to the Ontario
Legis¬
of
the estate
in
any
not prejudiced
is where the
are
This
way.
present practice of private
quota¬
tions for bonds does cause us
some
embarrassment. We
buy
through a member
exchange at any time
lature, and at its last session
legislation was passed authorizing
and sell stocks
of the stock
the establishment of
because
can
funds
in
lation
Ontario.
is
trust
common
Similar legis¬
currently
before
the
Parliament of Canada at the pres¬
These common trust
ent session.
ber
know that that
we
will
get the
price for
current
mem¬
market
us
which, while it may
fluctuate from day to day or hour
to hour, yet at
any given moment
funds, when established, will en¬
able a trust company to lump or
record.
join together funds from
bonds.
number
of
estates
and
a
to
large
make
single purchases or sales of stocks
or bonds in large blocks in ap¬
propriate cases for such common
trust
funds instead of for
individual estate account.
special problems with
each
Separate funds will, of course,
is
a
matter
of
This
publicity and of
is
not
the
in
case
As you know, there are
quotations at different rates,
maybe only a few cents, but when
dealing with a substantial block
recent
issues.
new
occasions,
as
On
you
many
know,
a
its
regulations.
whether or not to acquire securi¬
ties.
It is sometimes
the
for
there
impossible
typical branch office of a
Canadian trust
company with sev¬
eral
hundred estate accounts, to
determine whether or not to
buy
for each of those
accounts before
the books for the issue are
closed.
The situation of each
individual
account
to
as
in
ac¬
cordance with its own powers or
proposed buyer only has a matter
of hours in which to
decide on
a
invested
assets
This machinery has
itself
proven
United
States.
trust
common
now
are
beneficial
very
Some
funds
very
of
in
the
established
large in total
to many mil¬
lions.
This will possibly open a
new avenue for you men for busi¬
ness
with our trust companies.
running
holdings
We hope
it will.
occur.
It
if
public
market
and
established
is
a
bond
a
never
them
on
occurs
to
me
were
lished for bonds and it
been
considered
stocks,
men
in
the
whether
by
past
gentle¬
you
I
and
doubt
might find much
you
interest
the
on
not the convenience to
trust companies would be of suf¬
ficient importance to
his money
establishment
who
or
justify the
of
such
again in the future.
However, there
reason
which I will
a
is
market
another
advance, and
beneficiaries
consents
in
a
co-executors have to be con¬
sidered before a decision can be
or
often
in putting some of
in corporate and mu¬
nicipal bonds.
do
Even those
reached,
and
see
that
a
be
allowed
you
will, therefore,
reasonable
to
the
time must
trustee
in
cerned.
ers
might feel freer to buy certain
corporate issues if
we
that the quotation given to
knew there
and
by
us
any one
investment dealer is
nec¬
conscientious invest¬
a
to
be helpful
to
you
was
a
known
as
"the average investor."
for bonds of all kinds.
The average investor has some
idea of the operations of the stock
Current
bought and sold publicly in that
way, but the average man does
tual
selves, but does waste time for
the second investment dealer.
If
not know how
where
quotes
more
we
of
obtaining
find that
we
these
can
advantageously with
deal
an
in¬
an
corporate
bonds
therefore,
often
are
to what extent
or
investment
in
municipal
is
liquid,
refuses
or
Trend
in
Municipal
■4': Finance
two quotes when making a deal.
This not only takes time for our¬
result
eliminating the type
administrative diffi¬
culty which I mentioned as in¬
which to make
up its mind.
Re¬
member, the trustee always has
to be able to
justify
.
There is another matter of
and
concern
that
to
all
would
we
is
the
of
like
us
and
help
current
and, municipal finance.
to
buy
taxes
and
trend
yent™ad.e, to the
common
BONDS
investcourt and to
every
beneficiaries
on
as
long
as
it remains
the books of the
estate.
not
We
are
complaining about the posi¬
tion m
which
out
we
the
do
we
find ourselves,
think that
sometimes
investment dealers might give
least as long to look at their
us as
a? they themselves often
a
on
continue
page
STOCKS
large
hope that some of these
trust funds will be in
operation before your next meet¬
ing, and I am sure that when they
are, they will improve and expe¬
dite the handling of our mutual
investment problems and, what is
more important, enable us both to
pass on some
whose
benefit to the people
we administer.
money
before
e
making up their
buy it in the first place.
Alter
all, we are going to have
he issue on
our books a lot
longer
.
I
one.
handling
in
than you
Open Bond Market
Stock orders executed
Exchanges,
matter
Another
business
trust
which we in
think might
Common Trust Funds
way,
and
before
a
drop-
this topic of the
multiplicity
you win be inter-
c.
1 think, to learn that the
terns arising from the buying
ornM
an.
enrL*
rnmU
ijn
'
„
in
•
>
g
r:e
the Montreal and Toronto Stock
net New York markets quoted
on
request.
DIRECT
PRIVATE
WIRES
CONNECT
OUR
YORK, TORONTO AND MONTREAL OFFICES
BELL
SYSTEM
TELETYPE
NY
1-702-3
open
an
Where
Montreal.
trust
this
effects
companies arises as follows.
I
of
think
all
it
Dominion Securities
RP0RATI02T
trust
this problem for investment dealer and so on. fnis
I mentioned, you policy has, of course, to be subject
f of great assistance. We to the qualification that in so
toust field are
doing this: doing the fundamental interests
to solve
fthough, as
*5
ac-
on
bond market in
at least the cities of Toronto and
ment of
is general practice
companies when ad¬
our ministering an estate, to employ
the agents usually employed by
own
ls to say, we do not of the deceased in his lifetime, such
expect
solicitor,
insurance
agent,
the
investment as
.tor individual
fr,,;;ts ls being tackled by
PJ:^°mPanies from our
•
or
NEW
by you, would be
reconsideration of the establish¬
well be studied
P
maintained in all classes of Canadian external
and internal bond issues.
Canada
the
are.
Needed in
Markets
Philadelphia
40
EXCHANGE
PLACE, NEW YORK 5
London, En?.
Calgary
Toronto
Montreal
Telephone WHitehall 4-8161
in
Municipal
expenditures
Continued
securities of this nature by reason
mu¬
your
number of small accounts one by
evitable
some
A bond mar¬
community generally ket with its constant publicity
stimulating general interest and day-to-day sales, might in
trading in bonds.
We have the
opinion
of
some
people,
all heard of that nebulous figure
greatly expand the public demand
market and knows that stocks
a
they could be sold at
in
ment officer has to obtain at least
as
public market available at
This will also go a long
,
us
something about
the workings of investment deal¬
yield for the widows
way towards
of delay and
of
know
a
better
aver¬
investor
age
children whose money is con¬
and
of
more
part of the
much more diversity in the in¬
vesting of balances for the smaller
estates and that this will result
availability of cash,
well
was
We know that
will give us
investment powers,
suitability of
the proposed
investment for the
that
estab¬
known that bonds could be bought
and sold in the same manner as
trust funds
common
be
should
market, this s o r t of problem
would disappear.
I know this has
time in the future.
have
of
need
were
realize
which
ing
continue to
there
fear that he will
might
Therefore;
estate will
each
to
embarrassment
If
recognized
able
the
that
dis¬
some
of the
his
in
and
rent mania for speed in the
plac¬
the
lifetime,
occasioned.
not
was
market
essarily the best which we could
obtain for the estate at that time.
legal type
for
and
who
by the deceased
important, and we cannot,
therefore, be sure when we are
either buying or selling securities
this is
cretionary type of investment, so
investment
of
dealer
retained
that is in the opinion of many of
us the existence of such a bond
which we find ourselves faced.
One way in which this
difficulty
does arise
specifically is the cur¬
be maintained for the
vestment
Winnipeg
Halifax
Vancouver
Ottawa
Victoria
20
THE
20
J.
jrom
page
June
jggg
Canning, Bell Telephone Co. of Canada, Toronto; Frank E. Hall, Hall Securities
Limited, Vancouver; N. A. Mitchell, Harrison & Company, Ltd.; Toronto;
'
George N. Thomas, Melady, Sellers & Co., Ltd., Winnipeg
W. A.
Reg. Findley, F. H. Deacon & Co., Toronto; H. C. Howard, Nesbitt, Thomson &
Company, Limited, Montreal; Benson L. Coyne, Deacon Findley Coyne Limited,
Toronto; E. G. Percival, Harrison & Company, Ltd., Toronto
Continued
Thursday,
CHRONICLE
FINANCIAL
COMMERCIAL and
nicipalities proceed with even a
part of the plans which they have
projected, there will be further
Problems of Trust Companies
And Investment Dealers
Continued, from page 15
substantial increases in the future.
19
High Production and Employment
Because the total of
is
somewhat
municipal debt
than before
lower
the war, and because it now bears
a lesser interest rate than it did at
Featured 1949 Canadian
Economy
that
tition of this transfer of cost from
the
the '30s.
present moment there is little evi¬
palities have saved by shifting of
certain costs to the provinces has
been
municipal taxes
are
too
burdensome, there is real danger
in
these trends
for
the
future
ince
or
the Dominion to
assume
a
of their financial burdens.
I will admit at once that provin¬
part
cial-municipal financial relations
need
readjustment,
financial situation
in which
themselves
respect
their
to
For
example, few people realize
provinces in general have
that the
doubled
to
the subsidies
municipalities
mu¬
with
ability
to
raise funds and the services which
they find themselves called upon
to perform, are not satisfactory.
However, the experience of recent
and grants
the
between
1939 and 1949, and most of
years
this help was given by the prov¬
inces to the municipalities for the
the understanding
purpose and on
that it would
the burden
ease
and that the real estate taxes.
nicipalities find
both
spent by them in other- di¬
rections.
if
they continue.
Municipal bodies
are doing little to hold
expendi¬
tures in check and are looking to
someone
else, usually the prov¬
As
you
on
and I
and
everyone else know, munici¬
pal taxes have, however, gone up
A further repe¬
instead of down.
municipalities
inces
without
•
to
any
the prov¬
consequent
saving to the ultimate taxpayer,
shows that the mere as¬ would be to the advantage of
sumption by the province of cer¬
nobody. Where this situation di¬
tain municipal costs is not the
rectly affects you and ourselves
years
This
answer.
panied
by
a
determination
municipal
has
on
bodies
expenditures
to
be
accom¬
willingness
in
the
to
and
of
part
hold
check.
a
their
Up
to
investors
as
municipal
as
you
is
in
the
field
Municipal
debt.
of
debt
all know was much higher
before
the
war
than
at
but it has started to rise
present,
again for
anything which the munici¬ the last three years, and if
now,
for the part
financed by the $120,- these countries, and the competi¬
000,000 borrowed by the United tive position of Canadian mer¬
Kingdom from Canada under the chandise was further weakened by
terms of the United Kingdom Fi¬ devaluation, except as regards the
nancial Agreement Act of 1946. United
States.
Fortunately the
Canada's
market
has
absorbed
holdings of gold and domestic
so.
The present tax income of
United States dollars rose from much of this production and the
municipalities is very large, but
$998,000,000 at the end of 1948 to general strength of Canadian and
if it is analyzed you will find that
United States demand continues j
it is very largely earmarked for $1,117,000,000 at the end of 1949.
Nevertheless as long as overseas in some measure to offset the de- !
other specific purposes such as
currencies are not freely conver¬ cline in overseas markets.
relief, increases in wages for fire¬
tible into United States dollars,
At the close
men,
police and so on.
Under
Jof 1949 imports
Canada is faced with the very real
remain high because of high levels
these conditions, therefore,
any
problem of redressing this lack of of
further increase in municipal debt
employment' and-income and
balance
in her
trade
with the
the needs of capital expansion.
can be just as burdensome to the
United
States
and
the
United
Exports, on the other hand, suffer
municipal taxpayer as was the
Kingdom.
both from the shortage of dollars
larger debt of years past which
It
is too early to assess the overeas and more normal condi¬
led to the
dence that
steadily upward and while at the
time, there is a tendency on
the part of many to assume that
the debt can be expanded to a
large extent without any danger
to
the
stability
of
municipal
finance.
This is not necessarily
mu-
unhappy conditions of
effects of devaluation of the pound
sterling and other currencies on
municipal the direction and extent of
world
councils and other bodies charged
trade and particularly on Cana¬
with responsibility for the
dian exports. Despite the devalu¬
finances of municipalities/ to set
ation of the Canadian dollar by
an example of economy in admin¬
approximately 10%, sterling de¬
istration.
If they do not, trouble
valuation has raised the price of
in a financial way is very apt to
Canadian
We would like to
happen
in
see
future.
the
I
think
that corporate investors are
going
to
be increasingly
conscious of
these present trends in assessing
the values of securities which you
will offer and, you, the invest¬
ment
dealers,
can
be
of
great
agricultural
produce
tions of supply in world
Moreover, despite
factors
such
ductions
and
continue
nerable part of our export trade.
At time of writing, the full extent
of the United
tracts
it
for
Kingdom food
1950
clear
seems
is
not
that
con¬
known but
some
reduc¬
Consequently the bi¬
the future.
obstacles
large and vul¬
gradual tariff re¬
removal of trade
barriers, multilateral trading with
free convertibility of currencies
seems still to be some distance in
lateral
this
widespread
the
as
markets.
favorable
endorsement of
abroad and has created additional
for
some
aspects of Canadian
tance.
of
therefore
exports
second, to
direction of trade so
to maintain the volume of
relative to imports, and,
correct
the
assistance in giving of your wis¬
tion in both prices and quantities
that
dom and
will
with the United Kingdom
guidance to the financial
take
place.
officials of municipal bodies when
Goodwin Harris
&
Company
agricultural
they
countries declined
come
to
you
to discuss cap¬
ital problems and
proposed issues.
cause
of
Canadian
exports
to
non-
overseas
during 1949 be¬
trade
great impor¬
problem of Canadian
twofold: first,
The
is
trade
be
to
both
the
unfavorable
United
balance
,
States
minish.
balance
and the
favorable
will
the
with
to di¬
tend
,
,
the dollar difficulties of
Capital Expansion
.
Early
STOCK BROKERS AND BOND DEALERS
level of
in
1949
expectation of a record
private capital formation
now seems to have been
fully justified.
The value
of new
building and engineering construc¬
tion rose substantially and bus ness
MEMBERS,
and
McLeod,Young,Weir & Company
THE TORONTO
LIMITED
STOCK EXCHANGE
Members of The Investment Dealers' Association of Canada
,
CANADIAN
COMMODITY EXCHANGE
i
——
year as a whole
investment expe ditures on plant, equipment, a
housing will be more than
levels.
the
For
it appears that
higher than for 1948. ;
INC.
DEALERS IN ALL
THE INVESTMENT DEALERS' ASSOCIATION OF
CANADA
purchases of new machinery
equipment were also at nighe
CANADIAN SECURITIES
A
creased
1949
was
part
construction
the
house-building
Direct
347
Bay Street
Toronto
1, AD. 9041
private wire to
185 North Front Street
The First Boston
Sarnia, Ont., Tel. 3630
Stock orders executed
Montreal and
Corporation, New York
on
all
Exchanges
Head Office
I
PRIVATE WIRES
50
Branch Offices:
King Street West, Toronto, Canada
Montreal, Ottawa, Winnipeg, Hamilton, London, New York
Correspondents in London, England
.
of .the in¬
activity
result of the recor
substantial
program.
^
95,000 new units were com¬
pleted during the year, lnclu^
the net increase from convert•
than
In- 1948, 81,000 units were <
pleted.
By the end of the
™
*
if the peak in _ struction costs had been reai
•
There was a general incre^ ;V.1c.
the supply of
Canadi^n0^fiD; 2nt
tured machinery and e(*uP-\
appeared
as
and factory
shipments were
Convention Number
Dingle, Wood, Gundy & Co., Toronto;
B.
D.
THE COMMERCIAL and
FINANCIAL CHRONICLE
Frank
B.
Poutney, Houston, Willoughby & Co., Ltd., Regina, Sask.;
F. E.
Griffin, Greenshields & Co. Inc., Montreal
types of machinery were up about
15%.
Sales of farm machinery
George Beves, Calvin Bullock, Ltd., Montreal; John
Graham, John Graham & Company, Limited, Ottawa;
Henry H. Rath, Thomson & Co., Montreal
The labor force increased in 1949
and
although there
was
some
in¬
higher than in 1948. crease in unemployment, the em¬
The
value
of
farm
machinery ployed labor force was larger than
shipments by Canadian manufac¬ the year before. The October sur¬
turers was about 30% higher than vey shows a total civilian labor
much
were
1948
in
and imports
50% higher than the year before.
Net addition to
inventories, an¬
other form of business
investment,
off
fell
sharply during the year,
industry and consumer pipe¬
as
lines
were
tories
invento¬
farm
(excluding
ries) increased by about $200,000,000
in
1949
in
increase
of
the
with
contrast
$700,000,000
1948.
in
The
physical
output/of
manu¬
facturing establishments was
slightly
for
greater
first
the
months of 1949 than for the
11
com¬
parable period of 1948, and about
93%
the
above
Shortages
still
1935-39
persist
in
level.
few
a
lines, notably motor vehicles ard
construction materials, but
some
in
general
production
full
the end of the
war
since
has produced a
much better balance between sup¬
ply and demand at current prices.
In mining the most significant
development was the expansion of
Alberta's
would remain at 1948 levels.
outlook
than domestic demand.
Farm
for
vestment
increased
in
1950
The
public
in¬
centers
mainly
around developments which are
taking place in connection with
downward trend.
and
weekly wage in eight leading in¬
dustries was $43.78 on Nov.
1,
1949, compared with $42.15 at the
advance
same
time in
1948.
still high, they were gradu¬
ally coming into adjustment and
inflationary situation of the
postwar years abated. The cost-
of-living index
was
1
wavered
food,
Dec.
Retail prices for
of
the
defense, the construction
Trans-Canada
Highway,
government
plans
assist
to
however, showed a slight with the servicing of land for
although
declines
for housing and the promotion
of
items
some
the
of
noticeable at the
were
construction
The price level during 1949 re¬
mained fairly stable. While prices
were
ucts
end
Prices
Building and
The
total
expenditure ot the
prices de¬ Federal Government for the first
year.
material
clined somewhat in the latter half
of the
housing projects.
year.
nine
months
of
the
year
ending
161.5
on
31, 1950, was $1,537,000,000,
$191,000,000 or 14% over
the
correspoding period of the
Attention in recent years has
fiscal year.
Increased
been focused on the use of the previous
defense spending accounted for
government budget as a balancewheel of the economy, to take $77,000,000 of this increase, and
payments to Newfoundland under
up the slack in employment dur¬
the accession agreement, higher
ing times of falling national in¬
old-age
come
through y increased public family allowances and
pensions, and the effects of gen¬
investment, and to act as a deter¬
rent to inflation in times of boom erally higher price levels of all
operations
explain
by taxing away surplus spending government
about
require¬
ments
have
provincial
revenue
is
tentions
these
items
are
dependent
on
municipal
to
at
Wholesale prices declined dur¬
reserves
1,000,000,000 ing the year for fishery products,
barrels. At the present time ac¬ furs,
livestock,
cotton
fabrics,
tual
scrap
iron,
production is perhaps not lumber, wood-pulp,
more than half this current capac¬
copper, lead and zinc.
Many of
and
information
place Alberta's known oil
approximately
intervened.
current
both
plus is only $90,000,000.
with
At
the
levels,
regard
and expenditure
lacking, but the forecast of in¬
for the first nine months will not
be maintained since
become
very
much
expenditures
heavier
to¬
In addi¬
tion, the Federal Government
sumed
1949-50.
Money
Supply:
The average
supply of Canada for the
money
first nine months of 1949
proximately
the
same
5%
period of 1948.
to the value of goods
produced, the
in
Canada
decline since
ap¬
for
Relative
and services
of
means
has
was
that
above
shown
payment
a
definite
1946.
Bond Prices and Interest Rates'
Government
of
Canada
prices remained
early months of
1949
bond
in
steady
the
but
began
to move upward in July. Between
July and December the price of
the
longest
bonds
term
(maturing
creased from
to
an
Victory Loan
in
1966)
in¬
average
of 101.12
of 102.65 with the
yield declining from 2.89%
to
2.73%.
:
•,,,
an
average
-
.
„
Chartered Bank
Loans and In¬
vestments:
Average- charteredholdings of Federal, pro¬
vincial and municipal government
securities
during
the
first
10
bank
months
of
1949
increased by
proximately 8% over
period of 1948. At the
volume
the
of
indicated
as
the
have
not
Development
been
time,
same
commercial
loans
by month-end
aver¬
increased by 11% to $2,350,000,000 as at Oct. 31, 1949. These
ages
increases
are
slightly over-stated
due to the inclusion of Newfound¬
land in the 1949 figures.
wards the close of the fiscal year.
ment
Although the net Federal Gov¬
loans
securities
as
and
Govern¬
commercial
proportions of the total
beginning of 1949 ernment debt was reduced in 1948- assets of chartered banks held
by
indicated that municipal capital 1949
the
large surplus
of
steady at the 1948 ratios of ap¬
investment would show a moder¬ $596,000,000, a reduction on this
proximately 43 and 25%, respec¬
ate increase over 1948, and that scale will not take place during
provincial capital investment 1949-50 since the estimated sur¬ tively.
at the
.
completed.
extensive
the
of
iron-ore deposits near the QuebecLabrador boundary is soon to be¬
This program has important
implications for Canadian indus¬
trial
the
•
In addition, it supplies an
immediate stimulus in the way of
The wheat crop is estimated at
or
produc¬
of
oats
dropped by 12%,
barley by 22% and rye by 60%
from 1948.
Inspected slaughter¬
lower;
■'
Corporation
/
and
Securities.
Member:
*
•
■
26,000,000
bushels less than the 1948 crop.
The harvest of coarse grains was
considerably
'
Corporation Bonds
capital investment.
bushels
^ '
Government, Municipal and
States.
367,000,000
Government, Municipal
of
growth, particularly because
gradual depletion of the
Mesabi
deposits in the United
of
Underwriters and Dealers in
Underwriters and Distributors
gin.
The Investment Dealers'
Enquiries invited
Association
of Canada
the
tion
ings of cattle
quite
hog
as
and calves
high this
slaughterings
were
year as
not
HARRISON & COMPANY
LIMITED
last and
declined
13%.
The production of milk and butter
in 1949 was relatively unchanged
from last year
The favorable employment situ¬
ation during 1949 is indicative of
the tempo of economic activity.
66
KING
ap¬
same
sorbs
kets
as¬
$72,000,000 of the sterling
of
Newfoundland
during
debt
March
Finances
159.6 on Jan.
1, while the
general
wholesale
price
index
showed a slight decline. The main
reason for this opposite tendency
was that sensitive wholesale prices
had reached their peak earlier and
most of the balance.
had begun to decline at the be¬ power.
Federal revenues in the first
ginning of the year, while retail
Since a high level of consump¬
nine months of the fiscal year
prices, previously restrained by
tion,
income,
employment
and
1949-50 were down noticeably to
regulation, continued to rise slow¬ production
was
maintained
in
$1,836,000,000 as compared with
ly.
The services such as rents,
1949, public investment, which is
street-car fares and hospital fees
the corner-stone of counter-cycli¬ $1,956,000,000 in the previous fis¬
were
coming into line with the cal budgeting, has not been called cal period. This represents a de¬
general price level in 1949. Toward upon to play its compensatory cline of approximately 6% and
is the result of substantial reduc¬
the end of 1948, rent control had
role.
The 1949 budget indicated
tions in the personal income tax
been removed from all dwellings
that the policy of the Federal
becoming vacant, and in Novem¬ Government was to defer its con¬ rate, and the abolition of indirect
ber, 1949, rental regulations were struction program except where taxes on many articles and ser¬
vices. The surplus of $300,000,000
further modified
by - permitting defense or other essential
and
oil production and the
proving of large oil reserves for
future development.
Apart from
the impetus given to the economy
by the capital investment in this
industry, rapidly increasing pro¬
increases of 18 and 22% on unduction has reduced imports of oil
heated and
heated accommoda¬
from the United States, and re¬
duced our need for United States tions, respectively, subject to ex¬
dollars.
Conservative
estimates isting leases.
ity since the prairie market ab¬
only about 60,000 barrels a
day and pipelines to other mar¬
that the price decline
so
be attributed to world rather
ment of less than 3%. The average
5,200,000 with unemploy¬
the
Production and Employment
McKibbin, Bank of Canadi, Ottawa; Hugh A.
Royal Securities Corp. Ltd., Winnipeg;
H. G. Gammell, Bank of Canada, Ottawa
Benham,
markets
can
national
of
Business inven¬
filled.
R. B.
trading conditions in international
prices of agricultural prod¬
during the year,
without any noticeable upward or
almost force
were
21
STREET WEST, TORONTO 1,
Gairdner &
Company Limited
320 Bay
CANADA
St., Toronto
ELgin 2301
Telephone: WAverley 1891
Montreal
Quebec City
Kitchener
Hamilton
Kingston
22
Orville Edmonds, Walwyn, Fisher &
Co., Limited, To¬
ronto; Frank G. Weller, Wisener and Company, Limited.
Toronto; Allan P. ("Dutch") Fisher, Walwyn, Fisher
from
MacMurray, Eastern Securities Co., Ltd., St. John
B.; Harry D. Scully, Eastern Securities Co., Ltd.'
Fredericton, N. B.; Allan V. Castledine and Victor S.'
N.
Castledine, V. S. Castledine & Co., Limited, Ottawa, Ont.
our
earlier
are safer than
appraisal of other new funds may be expected on
the Canadian market in the com¬
hundred safer than 10. forms of investment, we have:
No one could deny that there is
Mutual funds are good for safe¬ ing year.
All funds possess the basic
less chance of loss—other things
ty, high in liquidity, good for
being equal—in owning shares of income and quite good for profit features of redemption of shares
at full net asset value, continuous
a
fund based, for instance, on a
potential.
.y,/..'.
cross-section of well-known bank
offering o,f new shares at a price
Substantiating our analysis is
is that 10 securities
9
page
i95o
James
N. Knight, Wood, Gundy & Company, Ltd.,
Winnipeg; P. J. Anderson, A. E. Ames & Co., Toronto;
Harry Gassard, Investment Dealers Association, Montreal
Donovan
Co., Limited, Toronto
Continued
Thursday, June
22,
CHRONICLE
and FINANCIAL
COMMERCIAL
THE
one,
Mutual Funds and the
a
...
Business Executive
or
insurance
or
steel
than
stocks
in
investor will adhere to
simply owning one of such
stocks directly.
A fund based on
just as medical men
lawyers occasionally come to a large number of bonds obviously
amount of dollars' worth of a se¬ the
wrong conclusions.")
For ex¬ gives more protection to an in¬
curity, he will obviously get the ample, a $40,000 mistake on a vestor than just one or two even
of
consistently
program
a
buying
fixed
a
most number of units when their
price
is
lowest and the fewest
number of units for the same dol¬
lar
when
amount
the
price is
Further study will show
highest.
managers,
and
$2,000,000 fund would represent a
loss equivalent to 2% of the
assets,
leaving
98%
to
recover
the loss.
tion
be
working
to
new
of
With the addi¬
capital bringing the
up to $8,000,000, the 2% of
assets shrinks to V2 of 1%, leav¬
that his average cost will always
be lower than the average price
fund
of the
ing
units.
If the industrial growth of this
99V2%
of
the
capital
increased fund working to
of the
recover
country is going to continue, then
the V2 of 1% loss.
the
The National Association of In¬
vestment Companies (U. S.) has
unbiased
judgment
the
of
management of the fund in main¬
taining
the stocks of promising
companies in its portfolio, will,
over
the
period
a
investor
capital growth
current
phase
of years, provide
with
an
eventual
regardless
of
the
the
of
market
in
which he makes his initial invest¬
ment.
compiled
composite
ance
figures
showing
the
perform¬
management
of its member companies for
the years 1941 through 1948.
The
figures show a gain for these in¬
vestment
companies
particular
years
of
for
these
about
60%.
This compares with a gain of
ap¬
One
very
important factor
assisting the management of a
mutual fund is the constantly re¬
curring addition of new capital to
the fund at varying phases of the
security markets, providing the
management
with
the
"where¬
withal" to take advantage of the
proximately 40% for Moody's 200
Common Stock Index.
->lso
themselves.
has
This
son
with
counts
other
investment
ac¬
with fixed dollar value
investments.
+he percentage losses of past mis¬
takes in relation to the gross asset
ments
dilutionary
value of the fund.
made
are
effect
("Honest mis¬
by mutual fund
two
in
most
important
supervise his investment in
set up
achieving safety in
an
investment are, of course, diversi¬
fication and continuous
supervi¬
sion. The theory of diversification
would seem
larger meas¬
a
of
ure
well
a
plus
of
Fortunately for the stock ex¬
changes, there is never unanimity
of opinion on either the quality of
individual stocks
in
ner
the best
man¬
invest
or
which
one's
to
money—fortunately, because there
would then be
have
It is only
trade.
no
natural, therefore,
fund managements
that
two
no
likely to
are
exactly the same objectives
in their investment policies.
available."
On the Canadian scene, we now
Recent articles in such publica¬
mutual fund. The statistics,
have
basic
three
the
of
types
Saturday Night, Time, and Col¬ vestment desires of the conserva¬
lier's, have all excitedly hailed tive, the middle of the road, and
the advent of mutual funds as the the aggressive types of accounts.
answer to the problem of reaching
These types of funds are popu¬
the huge untapped pool of re¬ larly known as "Balanced," "Di¬
distributed capital in the hands versified Stock" and "Leverage"
investors.
All
pensioners
have
days
from
discovered
prewar
to
their
chagrin that safety of numbers of
dollars
is
not
only factor to
be taken into consideration in the
assessment of the
a
safety, of an in¬
They have learned that
dollar bill is measured only by
can buy at a given time.
what it
They have
shrink
its buying
40%
in
power
the past
10
On the other hand, during
years.
this
seen
some
same
Fortune, Business Week,
as
of the "little fellow."
decade, holders of
trend of their dividend income
has kept pace with the advance in
over-emphasized.
The busi¬
executive, however, should
have a knowledge of the con¬
markets,
tions
struction of funds and their merits
ferreds,
to
Quality
enable
endorse
,
him
their
ket value of sound
mar¬
stocks
common
increased during this period.
fourth
factor,
safety,
Reviewing
sake of
the
above
for
the
funds in
Low-Priced Preferreds,
Commons,
Low-Pncea
Commons, etc., and in industiy
funds such
ical
use
for larger accounts.
funds
class
way
stocks and
sent
Televisioi
even
Canada where
diversification within an
have been referred to
industry is not possible; so
of investment in the
tunately for the length of
that bonds, preferred article, only the basic
Qt
Previously in
a
Steel shares, Chem¬
and
sub-classifications are un
Such
Mutual Funds
as
as
shares,
shares
The Different Kinds of
tual
High
funds,
their
this
This
little far-fetched
four such funds
as
likely to develop in
article
stocks
common
classes.
across
Four Factors
including mutual
use
conscientiously
to the "little
may
there
in
this
mu¬
repre <
seem
are
a
only
country
currently operating.
The classi¬
fication is, however, fully jusified
again be considered "good."
Summarizing the
to
of
Grade Pre-
available in the form
are
Bonds
security
sub-classifica¬
further
capitalist" and also to understand
same
Moreover, the
this
In the United
funds respectively.
States, with the broader
com¬
averaging better than
year, but also the upward
living costs.
meet the in¬
to
be
stocks have not only received
a
designed
of funds in this connection cannot
return
41/2%
The value
funds
ness
the
the rating of mutual funds should
Canada
investor
value
assets and continuous supervision.
sifting of advice from hundreds
of pertinent sources, are far be¬
yond the capacities of individual
On
Members of The Investment Dealers' Association of
an
asset
diversification
tions
has
Mackellar Securities Limited
to offer
well-managed
a
company
net
on
commissions,
the investigational field trips, the
mon
ele¬
is diversifica¬
company
investment
.
a
The
a
Investment Bankers' Associa¬
the
tion of America:
protection of principal,
tion,
another
is
continuous,
reliability of income, marketabilexperienced
supervision.
The
ty, and reasonable opportunity for
layman has little conception of
appreciation, combined
.
.
than
the
extensive management
ma¬
any other general class of security
chinery that is employed to
or
Safety in Investment
factor
on
takes
vestment
a re¬
on
"The shares of
basic principle of an in¬
one
vestment.
different opportunities which
oresent
If
quotation from
investment companies
given at the recent convention of
port
higher-grade bonds.
The
profit potential of a
mutual fund investment is
quite
good when measured in compari¬
based
the following
the border where there
adequate
four
the
anonymity
funds will be
purpose^
Cai a
referred to as A,
C and D.
Fund B
is the
«
and is
is the oldest
A
Fund
-
•_
,
"Balanced Fund."
are
approximately 90 different funds.
Moreover, the Canadian picture
is changing
rapidly, and several
For the
be discussed.
.
,
a
largest and is
Fund.
C is the second larg
"Diversified Stock Fund.
D is the newest and is a
"Diversified Stock
Fund
and is
jf
a
Fund
"Leverage Fund."
Dealers in Government and Corporation Bonds
Balanced
UNDERWRITERS AND DEALERS
A
scribed as
'
.
National Distributors in Canada for
.;V:'■
IN
.
CANADIAN
/■■
■
Balanced
Mutual
Open-End
in
MELINDA
ST.
PHONE
ADELAIDE
4911
Members
80
TORONTO 1
its
of
The
KING STREET WEST
TORONTO
10%
nor
NOTRE
DAME
STREET
MONTREAL
20%
than
.
.
■
preferreids'.!l
more than
^
t
nor
^
facto, neve:
than 70% in
and
ipso
35%
Investment Dealers' Association
of Canada
266
mjestn.-n^
fund migb
of ne
more than
latitude in bonds
similarly in
Daly Co.
limited
25-27
ns
flexible p:r P
preferreds and com...
portfolio of
For example, one
than
a.
be de¬
fho=en^ f of
to a
of bonds,
Fund
R.
fund
maintaining
a
A
a
Funds
fund may
adheres
ment
GOVERNMENT, MUNICIPAL
AND CORPORATION
SECURITIES
Corporate Investors Limited
balanced
nor more
mons.
The
WEST
.
.
following
from the
literature: of
balanced
p
I
is
fund:
a
;nn
Q"
Funa^
Fund
.
Convention Number
THE COMMERCIAL
and FINANCIAL
CHRONICLE
Dominion Securities Corpn. Limited,
Nixon, Dominion Securities Corpn.
Limited, Montreal; R. E. Haldenby, Dominion Securities
Corpn. Limited, Montreal
Little,
D.
G.
Toronto; Stanley E.
icy
the
and
in
percentage
The
judgment of the management
to the relative merits of each
prevailing
under
class
Such
stances.
a
circum¬
permits
stability.
program
relative
provides valuable pur¬
also
chasing
a
of
measure
This
power
whicn
may
be
to acquire additional
stocks in periods when
drawn upon
common
declining prices may have made
them increasingly attractive; con¬
versely, it permits switching into
additional
shares
preferred
or
bonds when the financial outlook
is obscure."
From
fund:
risk
American
an
"Balancing
balanced
safety against
against high
income
low
—
income—and
growth
possibilities
against stability of principal, is a
task which,
if skilfully accom¬
plished, fulfills the purposes of a
prudent ipvestment.
In reality a
"balanced fund" is essentially the
type of fund in which an investor
could, with confidence, place his
entire savings.
For, instead of
representing
represents
a
kind of security, it
complete investment
a
The popularity of the conserva¬
balanced funds is in direct
tive
relation to the investing public's
attitude toward the stock market;
hence in 1947 most net capital
raised by the balanced funds,
but in 1948 and 1949 the
common
stock funds went into the lead in
Diversified Common Stock Funds
A
diversified
is
Its investment pol¬
primarily
prudent
assets
& Co.,
Montreal; W. Hart
Smith, Hart Smith & Co., New York City; John
Sydie
Sydie, Sutherland & Driscoll, Ltd., Edmonton, Alta.; Eric
D. B. Kippen, Kippen &
Company, Inc., Montreal; Walter
L. Downes, Kippen &
Company, Inc., Montreal
with
concerned
distribution
of
justments to changing conditions
in the years ahead."
its
The word
stocks within each industry.
The
its in¬
plied to
stability portion of
used for
portfolio rarely attains
financial
magnitude although management
"leverage" when
investments
many,
vestment
permit full exercise of
judgment in this connection.
Its
simplicity and constancy of
policy probably accounts for its
analysts,
unfamiliar to the
popularity.
Fund
investor.
age
ploys
the
been
years
but
ap¬
by
is
tion
the
says
aver¬
launched at the
in
its
title,
was
beginning of this
since that time its inter¬
year and
misinterpretation
and
in its prospectus:
investment
of
policy
securities
therefor
.
.
.
result.
Income
leverage
is
the
company is to primary purpose of Fund D and
portfolio securities capital leverage is the interesting
which, from time to time, appear corollary.
Income leverage is, in fact, the
to be attractive from an invest¬
policy of the
select
the
common
basic
and
stock
simplest
must
constantly
be
ap¬
praised to determine the amount
for the
a
freedom
of
decision
the short-term nature
due
to
of its bor¬
rowings.
"Leverage
capital
is
of
when
feasible
a
large
the
favorable
rates
for
rienced
rate
interest
of
in order to
.
.
conditions.
those
the
To
of
solution
future
problems, Fund C
will continue to bring the same
sound investment principles it has
epiployed in the past—careful ini¬
tial selection of portfolio securi¬
of
interest
bank
the
of
shareholders'
Canadian
A
dends.
bank accepts loans to
it
which
from
pays
zero
to
It
to
it
the
to
be
technical aids
.
.
' providing
of
"The
accentuated
an
net
holders'
worth
Fund
ad-
D
under
its
abused
often
so
by
fund
.
.
.
with
all
safeguards
and
the
of
movement
the
of
share¬
accentuate
can
movement
shares.
This
of
the
the
upward
common
accentuated
move¬
ment will, of course, operate on
the down side unless the effect of
leverage is then reduced
in direct
relation to the degree of leverage
applied. This presents interesting
results in the form of capital lev¬
the portfolio
erage.
of
or
elimi¬
nated."
participation
It is because of the possible ef¬
Example: Effects of
and of
crease,
a
25%
a
value of two funds,
1
without
Fund
and No. 2 Fund
1
Fund
Fund
lever¬
age:
$1,000
2
leverage
with 20%
25%
No.
25%
;
Decrease
1,000
20%
leverage
$1,250
$750
;
200
$1,200
1,500
900
200
200
$1,300
$700
Deduct lev.
ranging
re-
Continued
on
page
24
borrowing
restricted by its charter,
money at a low rate of in¬
rents
Cochran,
wide list
average rate, and
the difference for its
BRAWLEY, CATHERS & COMPANY
higher
tially
thus
Cochran,
a
sound securities at a substan¬
of
earns
shareholders.
Income leverage
is also present
capitalization of any indus¬
trial
company
which
includes
bonds, bank loans, or preferred
stocks.
A prominent public util¬
in the
Murray €> Co
Murray <3 Hay
Limited
for example, is
employing about 50%
leverage.
(Fund D is restricted
by its charter to a maximum of
33%% leverage and at time of
writing is employing about 15%.)
This public utility is allowed to
ity
Underwriters
of Canadian
Municipal
and distributors
Toronto Stoch Exchange.,
Government,
and Corporation
Orders executed
for cash
Securities
earn
8%
on
In contrast with the
are
Dominion
Bank
Building
Toronto \,
Canada
-
MUNICIPAL
-
CORPORATION
SECURITIES
which
stable in value although non-
liquid, and whose bond leverage
on a long-term basis, the man¬
is
agement of Fund D
liquid assets whose
CANADIAN
BANK
OF
COMMERCE
ADELAIDE
5821
public util¬
ity company, the assets of
ADelaide 9161
GOVERNMENT
its assets so that by
hiring money through the medium
of bonds at about 3V4% it is able
to
earn
the difference of 4%%
for its shareholders.
only
CANADIAN
company,
presently
Members
has highly
fluctuating
in¬
$1,000 shareholder capital each
—No.
Increase
No.
25%
decrease in
powers,
terest and invests it in
a
rectly under management control
price
divi¬
then
a
in the manage¬
should be com¬
money
advantages
that
diversification among loans this money to others at a
many
industries and companies; higher rate of interest-and thus
continuous
supervision by an earns the difference in these two
experienced staff of investment rates for its shareholders.
.
sub¬
by expe¬
fund, at the same time
which has provides a facility (leverage) di¬
chartered
interest
1% %.
of this
ment.
itself in the
deposits on
customers'
of
form
principle
been
ing of money." :
The fluctuating nature of the
fund's widely
diversified assets
the
mar¬
mutual
wide
specialists
has
rent
past nine years have been it out at a
higher rate.
Outside
extremely interesting test pe¬ of the commissions and charges
Certainly the future for
sundry services rendered, in¬
years will also witness changing
come leverage is the main source
.
sound
ment
essential to the long-term invest¬
in
with
management
as
investment
management
available
causes
mature view
a
simply the hiring of money at one
"The
riod.
takes
The
people whose desires for capital
gains overcame their better judg¬
ment
standpoint.
A balance is basis of the banking system of
fects of this capital leverage that
count r y
and
elsewhere
sought between adequate income this
many people bring up the obvious
throughout the world.
It is
and appreciation possibilities."
From the literature of Fund C:
buying.
ject and does not consider that
then be borrowed at
can
utilized
gin
of
number
people is combined in the fund,
money
and odious comparison
pletely shunned simply because it
From the prospectus of Fund D:
still
of the
ears
by investors and security sales¬
of the men alike has been wide and
company seeks to permit a degree varied.
§
of management freedom sufficient
Discussion of "leverage" should
to obtain balanced diversification be divided into two parts—lever¬
and to take advantage of invest¬ age on income, and leverage on
ment opportunities both as to time capital values; otherwise; confu¬
of objectives is
of purchase or sale and the selec¬ sion
bound to
"Tne
Canada, Toronto
value
of
Fund D, which em¬
term
pretation
B
has
many
powers
very
Godin, Societe de Placements, Inc., Montreal;
Beaubien, L. G. Beaubien & Co., Limited, Mont¬
real; Jack Kingsmill, Investment Dealers Association of
Andrew
leverage it is prudent to" em¬
ploy. Management has the facility
Leverage Funds
common
price
Hubert
of
according to industry and
the selection of the best
ties;
sales.
fund
is
V. Barry Smith, Hart Smith
an
program."
was
form of fund.
each
is varied in accordance with
class
as
i.e.,
common
preferred
stocks.
the
securities;
of
classes
three
bonds,
23
TORONTO
BUILDING
THE
24
Charles
jrom
Thursday,
CHRONICLE
June
£2, i^gg
& Co., Ltd., Montreal; Ralph Blackmore, "Globe &
H. H. Mackay
Plumpton, Nesbitt, Thomson
Mail," Toronto; D. L. Howes, W. C. Harris & Company, Ltd., Toronto;
W. C. Pitfield & Company, Ltd., Montreal
companies
insurance
23
page
K. E.
F. B.
Goodeve, F. B. Ashplant & Co., New York City; Mrs. John Ridley;
Ashplant, F. B. Ashplant & Co., New York City; John P. Crysdale,
Gairdner and Company, Limited, Toronto
Continued
FINANCIAL
COMMERCIAL and
invest
may
for Possibly
sacrifices
daily
made
who
other corporations
some
like
build
for the sake of keeping up
father's annuity.
Unhappily the
would
sarily qualify under the Insurance
Funds A, C and D offer dis¬
postwar inflation came along, so
that: "It is true father got his
cause
provisions for large sub¬
scriptions. Funds, A, B and C are,
in the opinion of counsel, legal
is also true that it the answer.
was paid to him in full according
Wealthy Individuals: A com¬
to the contract.
But by the time mentary on the probate oi the
he
collected
it, the purchasing estate of the late Franklin D.
up
of their total assets in
to 3%
which
securities
Mutual Funds and the
do
not
neces¬
Act.
count
Business Executive
investments for insurance compa¬
years
this
of
to
nature,
involved.
up
but
Mutual
accounts
hesitate be¬
risks
the
of
and
funds
expenses
may be
It
annuity.
"Despite broad
the priced unit investment possessing nies registered under the Cana¬ power of money had so changed Roosevelt says:
that the long thrift of the years diversification, however, the tax
determination of the degree of strength through the diversifica¬ dian and British Insurance Com¬
proved negligible in its results. appraisal
revealed
a
weakness
leverage
to be applied at any tion of completely liquid assets; panies' Act (1932) as amended.
approach
Management
is
time
to
appraise
the
to
stability
growth quality of its assets in
the light of the current economic
or
outlook, and then within the re¬
strictions of its charter increase or
its
decrease
borrowings
From the
to
the
of the shareholder.
best advantage
prospectus of Fund D:
"Leverage takes the place of se¬
lection
of
speculative
securities.
borrowed for
investment in fundamentally
Money
sound
tive
judiciously
securities, not the specula¬
individual
of
nature
rent
Father celebrated the coming due
in keeping
income
rate
with the cur¬
equities;
capital
on
Trust
of the
its
charter;
trative
shares, and contin¬
supervision
by
full-time
the
to
tremendous, the propor¬
so
licity.
securi¬
vestor. Low unit cost and constant
seek."
availability
combined create
In Summary
Shares
a
mutual
of beneficial interest in
fund
represent
a
low-
all sorts of extra commissions and
two factors which
are
costs.
wide variety of
a
own
versification
of assets in the form of
to
invest.
A
will
years
whose
"dollar
carried
program
In Canada'*
Capital
share.
over
eligible
under
is
Your
Party?"
torial
always
Savings
of
Pay
the title of
was
the
Funds:
on
Montreal
for
an
a
edi¬
"Gazette"
price paid
(4-2-50).' It reminded readers of
the
rule
are
famous
story of the German
whereby family at the time of World War I
John Grahami- Since 1919
CANADA
are
and
>
—
:
I j
I
i
When you require information
n ■ i|
on
Securities
our
service.
Consult
us—we
or
at
are
Private
GREENSIIIELDS
Tel. 2-5318 |'
others
are
out their programs.
carry
of
vestments
The in¬
these pension funds
should not be controlled
solely by
managers whose investment train¬
ing has been of the "Dollar Lia¬
variety.
Common
stock
equities furnish the only readily
liquid income bearing investments
which
be
can
in
pace
expected
to
reasonable
any
dollar.
J
their
GOODBODY
&
Wire
&
Service
keep
features
of
mutual
to
the
managers of
pension funds who recognize the
need for a portion of their funds
to
be
in
equities.
trustees who
to:
torn in their
are
(a)
possible, and (b) avoid
through incurring
criticism
supply, income, liquidity, and
supervision
inherent
in
explain the prefer¬
many trustees have
for this investment
medium.
CO.—MONTREAL
'
that
Corporation Reserves:
Many
large Canadian corporations have
built
Members:
The Toronto Stock
&
Exchange
and The Investment Dealers* Association
330 BAY STREET
Hamilton
Brantford
Co.
up
substantial
the
investment
equities in recognition
income tax provision that
there is
no
tax
one
on
the dividends
taxable Canadian
corporation from another."
TORONTO
Brampton
of
received by
of Canada
Windsor
16
some
were
investors
cause
less
securiiies
buy worth¬
never
securities, it follows that tney
became worthless while
owned.
of course, indicates a
lack
of
adequate
supervision
which is often characteristic of
"This,
is available at a very mod¬
ever,
erate
in
'cost'
the
on
securities
terms
which
of losses
become
val¬
negligible."
ueless, the amount is
individuals who main¬
Even those
tain
compared
when
and
cost;
to
follow
find these
features attractive:
staff of their own to
a
their investments may
fund
mutual
(1) ability to acquire a cross-sec¬
tion of the stock market in one
chases); (2) ability to liquidate a
cross-section of the stock market
in
sale
one
from
(3) relief
requirements in
operation;
accounting
connection with dozens
of dividend
reports, etc.,
the event of succession
liability for Federal ana
(4)
in
who
are
the
Those
successful employ capable
(albeit expensive)
out
them from devoting the
same
staffs to carry
investment
princi¬
ples followed by the mutual
fungls.
time nec¬
to properly manage an in¬
vestment account constitute a typ
essary
investor
of
benefit il"
to
likely
rectly by the use of mutual func"Investing by whimsy—which i
to say
upon
that
invests erljr
hunches, supeis -
a man
his own
tions,
tell
fallacies, w
insufficient or
financial
others
so
accounts in
jNiilner, Ross
there
which had become worthless. Be¬
duties,
colleges,
homes
and
hospitals, for the Province in which the
libraries, clubs, lodges, cemeteries, estate is domiciled, only.
etc.—these organizations
usually
Professional Men: Doctors, den¬
have a conscientious
group of pub¬
tists, clergymen, lawyers and ai
lic spirited citizens on their boards
others
whose
activities prevent
ence
CO.—NEW YORK
most of which represented
well-situated companies,
sues,
sound,
cheques, proxies, tax
Eleemosynary Institutions: Re¬
ligious organizations, schools and
constant
to
such lists of investments.
the many individual is¬
purchase (three funds in Canada
purchasing value of the allow discounts for large pur¬
The
values
uous
you.
Among
degree
funds, recited above, demonstrate
any
Oil
many
em¬
ploying established institutions to
mutual funds
& Company Limited
^8S, Sparks St.
are
undue risks with the
capital. The
salient features of
safety, contin¬
your
help
can
while
funds
own
revenue as
or aham
Direct
I
complete facilities
small,
which is fairly typicial of a great
establishing pen¬
sion funds for their
employees. the investment accounts of people
Some companies are assuming the
who are busily engaged in other
investment management of their
activities. Such supervision, how¬
proudly
today
furnish their re¬
spective institutions with as much
quotations
Canadian Industrial, Mining
any
Security,
John
or
North America
seriously."
very
tions, both large and
of
Securities and Service
Municipal & Corporation
fantastic.
and
Hundreds of Canadian corpora¬
desires
Government
in
declining
declining
with the
funds
four
the
"Will
the
P en si
extreme
was
small trust bility"
are
Corporation
investment
an
cost
All
cash
averaging"
lower than the average
per
new
out
ensure
average
constant
major problems,
mutual funds shares may be a
very logical solution.
steady growth
own
of
funds, where management and di¬
Insurance Companies: A charac¬
of their investment prob¬
their
and
For the
supervision.
teristic
is
selection
careful
purpose.
Take for insance:
lems
use
makes more acute the
necessity for wide diversification,
purchase enabling the
investor to adopt a program suit¬
able to his
the
Furthermore,
equities
methods of
War
But the fact is that money values
rapidly.
grow
Who Should Buy Mutual Funds?
able only in equities. Just as with
ties, is relied upon to give the
Here
then
is
an
investment an individual
greater-than-average velocity in
account, it is almost
medium worthy of the attention
price movement and the greaterimpossible to adequately diversify
of every kind and class of in¬
a
small trust without incurring
than-average income which many
investors
annuity by holding a family
party. The whole proceeds of his
annuity just paid the bill.
No
will continue
The other side
of the tax squeeze in the shape
of low interest rates is creating
a need for the higher yields avail¬
to
spotlight of pub¬
healthy
investment problems.
tion of small trusts
constantly subject
are
and
income and succession duty-
With
taxes
management whose performances
and results
particularly grave adminis¬
sents
additional
uous
of his
by people of smaller means, while doubt the decline of
money values
welcomed by the companies, pre¬
in Germany after the First World
self-liquidating clause
a constant supply
in
of
ex¬
cellent services of trust companies
industry; ready marketability be¬
cause
ever-
the
of
acceptance
widening
growth through ownership inter¬
est of a cross-section of national
The
Companies:
erroneous
score
we
failings,
other
of
not
mental—is
or
as
him,
information—or u^on
"The
success
ability
to
.
of the
vestment fund is
the
uncoinp
so
often think.
.
.
make cold,
unemotional
lated,
.
nautus^ in
based
decisioi
-
carefully ^e
means the i ^
judgments based on
veloped facts.
ference
come
and
lost
in
an
invest
^
makes si ;
one which
e
a forest of ui
which
program
progress
It
between
Convention Number
THE
COMMERCIAL
and. FINANCIAL
CHRONICLE
.i
Head, Mills, Spence & Co. Limited, Toronto; R. K. Wright, Mills, Spence & Co.
Limited, Toronto; N. B. Bell, Bell, Gouinlock & Company, Limited,
Toronto;
Allan E. Boothe, Bell, Gouinlock &
Company, Limited, Toronto
C. W.
from
(Extracts
tainty."
"The
Prudent Investor.")
Branch
Bank Managers: A few
years ago
the Investment Dealers'
Association
of
Canada
public opinion poll
a
conducted
the ques¬
of where people preferred
for investment advice. High¬
tion
to go
on
(e) Periodically share certificates,
registered in his name, may be
rill
choice of his stock
lent cash value.
sified
are
closely identified. The events ana
psychological phases of the first
investment
in
common
stocks with horse-racing, roulette
and other forms of gambling,
During the Second World War,
half of that
20th Century that the whole accent of
governmetal
Victory Loan campaigns
belongs to Canada" have led us and
industrial
counsel
to
the
in
ence
Montreal; Robt. H. Craig, Craig, Ballantyne & Co., Ltd., Montreal
Economic and social factors
Wartime experi¬
James
Ltd.,
Chairman of theaftermath
built
up
a
"never
Massachusetts
Investors again" attitude that
frankly clas-
Tnwt.
its equiva¬
or
Fraser, Western City Company, Ltd., Vancouver; H. J. Vidricaire,
Richardson & Sons, Montreal; John P.
Cundill, Craig, Ballantyne & Co.,
Griswold,
Board,
delivered to the employee, (f) In
the event that an employee leaves
the company, he may be ^iven the
G. Lyall
listory,
have
we
wealth
our
redistributed
ipto
unenterprisi: g
hands made sterile by the very
width of its distribution.
Let
be
us
realistic
redistribution
of
taken place.
about
wealth
this
that
has
It is wishful think¬
ing that any popularly elected
shown that no other means
up to an impasse in our economic "little man" was on
security. Nine government is ever going to do
securing subscriptions from a
bank manager because of his rep¬
development which may be finally Victory Loan
campaigns, preach- anything about eliminating the
portion of the Canadian broken
utation for integrity and experi¬ large
by the advent of the pub- ing security, plus several different measures which were—and still
public can ever compete with the lie
ence in money matters.
However,
recognition of the merits of social measures along the same are—responsible.
Nor
are
they
most
Canadian
banks
expressly Payroll Savings Plan. The fluc¬ mutual funds.
line, have done their job a little going to restore the old distribu¬
tuation of share values, implied
forbid their managers
to select
tion.
If the capital is widely dis¬
In the first decade with wealth ^00
,£?r
Juture develop- tributed in small
stock investments for their clients endorsation by company manage¬
in the hands of the relatively
amounts, then it
few,
^"ls country.
because of the obvious dangers in ment of any particular fund, atti¬
is
est in favor was the local
branch
has
of
accepting this form of responsibil¬
ity. Despite this situation, people
do and will continue
to
seek
ad¬
vice from their bank manager.
respect
to
mutual
fund
equity
In
investments,
shares
eliminate
to
large extent the hazards of
a
lection
of
of the
cause
referred
who
individual
to
takes
se¬
stocks
be¬
diversification often
above.
time
Any
out
to
of
tude
other
objections
is
ment
"little
stock
limb"
but
answer¬
re¬
in
of
the
the
foreign
United
employees into
with a direct
carry
capitalistic
when
campaigns. Then
of the
"I fail to
avoid
time
see
how
being
but
country
on."
in
T.
goes
as
a
General
on
a
most
the
regards the selection of
individual issues.
pros¬
period
^e^inS of having sinned; and fi-
the worship of security, is
the economic story of Canada up
° jj® opening of the second half
of Our Century,
It is now time to preach secondemnation; yet look around curity in terms of the Bible story
of Cana-
world as
Atkinson,
Canadians at that time. There
H.
Manager, Royal Bank of
no
dearth
then.
"Sharing
the great
'20s—a
.
of the three servants and the
da's great industries of today owe talents — the
bad servant who
their imaginative conception and spent his in riotous living — the
initial
capital to the spirit of cautious one who put his away in
Canada.
as
Victory Loan
and consider how many
(Canada)
we
the
to
of
was
"li^le capitalists"
#
Unhappily, their exploita-
up
,.
that rarely, if ever, gets anything
Economic Implications
of Mutual Funds
can
forced
came
progress
The
development
was
own
largely
was
for
she
out her
undertaken
were
capital
States
capital
system.
study the
out
all
P0 money; then mtroducon *° investments; followed byrelied on. In the war-torn 'teens, irresponsible and bad leadership
Canada broke away from her de- on
.Y?e methods of investing in
pendence on England
and
the equities; next financial loss and a
ventures
great
several
convinced
making
self-interest
banker
equities
"going
are
capitalists"
of
not
really
of
value
perous
and
and
able, and the question really
ing the purchase of mutual funds
by his clients he
is
in
effect
merely agreeing to the purchase
common
unions
solves itself into whether manage¬
construction of mutual funds will
recognize the fact that in approv¬
class
the
a
safe
one
but
static
place—and
the
wYio invested his wisely and
...
_.
_
■
.,
.
to the seekers of that capi¬
create economic methods
tal
to
for
reaching it.
Such
must
methods, to be successful,
recognize the lessons of the
past
five
decades.
capitalists"
have
fore;
are
they
minded, and
that
crop
cated.
The
been
not
many
will
of
are
to
a
on
the
the
radio
purpose
trained
edu¬
speeches, arti¬
will
without
not
an
representatives
them up.
new
be
cles, ani advertising in the
or
be¬
enterpreneur
have
Convention
"little
bitten
press
achieve
army
to
of
follow
Such representatives in
turn must be rewarded
,
financially.
of
the tion and encouragement to regard mPd it many times. Whicn Probably the greatest social con¬
country can far better be achieved common stocks as speculative trad- °ne was the "good and faithful tribution of
the capitalistic system
Young Executives: A good rule by making it more practicable for ing
means, rather than as part- servant"?
Which
one
achieved of a financial nature
has been life
of thumb as to what
proportion of an increased proportion of the nership participation in the dereai «ecuritv?
an individual's
insurance—but salesmen are still
account should be population to acquire an interest
velopment of industry, led to the
defensive (bonds, etc.) and what
proportion aggressive (equities) is
to take his
age as representing
the percentage for the defensive
portion; i.e., at age 39, his account
might be 39% defensive and 61%
aggressive.
Every $1,000 can be
divided into $400 of Canada Sav¬
Bonds
ings
and
$600" of
mutual
-
the
-
wealth
in the business of the country;
other words, to become
themselves.
an
to
owner,
If the worker
it
will
open
in finarcial stampede of 1929 and the
capitalists resultant chaos
al
is
his
o
eyes
in
equities.
increases
As
his
through financial
Payroll
a
Savings:
"Oh!
not
themselves
that
were
to
fallacies put forward by
blame, but rather the manner in
'something-for-nothing' boys which
they
were
traded
that
who
cream
the
economic
for political use,
caused
under the
would
skim
The
the
hangover
'30s
Faced
for
with
the
development
needed
to sell it.
Mutual
Mutual Fund
greatest
capital
need
in
funds
characteristics
have
Continued
our
all
on
of
to
necessary
and
period
the
of
the
remorseful
We
offer
a
complete statistical and analytical
service to individuals and institutions.
prog¬
in
Surely
revival of this headache
to
employers!"
years
Maybe not—but 20
few top life insurance
ago
salesmen thought that
group in¬
be successfully
The question is
entirely one
surance could
sold.
oi
whether
e
"the
candle."
A COMPLETE FINANCIAL SERVICE
ever
game
Some
connection
are
mechanics
is
worth
points in this
We offer
WATT & WATT
6-8
complete facilities and
personalized service regarding
investment
and
JORDAN STREET
TORONTO
are
The
underwriting.
simple,
(a) The
acquiring an ownership
Virtue of
interest
recited later.
in
e.itolled
to
industrial
the
Canada
employees,
MEMBERS
is
(b)
^nployees are then invited to in¬
nate what weekly or monthly
Burns Bros.e-Denton
S ^row^ tyPe savings plan,
'
emPlQyer makes a gross
Purchase of shares of a fund each
gyday representing the total
ount of
<
)
The
employer
employee subscriptions.
shares
are
registered
held
"in
by
the
trust."
Exchange
Investment Dealers'
LIMITED
Association of Canada
Winnipeg Grain Exchange
Cable Address:
C\
u
Established 1908
Investment Securities
eductions they wish to set aside
r
Toronto Stock
WATTWATT
TORONTO
-
MONTREAL
-
WINNIPEG
Telephone
AD. 7151
the
pro-
page
fiasco.
capital
ress, additions may be made
their proper
proportions.
not
was
early '30s.
the common
the
the
funds, with the $600 being a slice guise of the Welfare State." Mer¬ early
of a
large, continuously super¬
vised, widely diversified, invest¬
ment
it
Surely
stocks
The Social Contribution of the
the
of
26
THE
26
Gairdner, and R. O. Bull, all of
Allman, John P. Crysdale, John S.
E. J.
and Company
salesman
and to
vast
GLASGOW, F. L.
Royal Securities Corp., Ltd.,
"little capitalist" with a
a
provide
sums
Vancouver
the
suitable vehicle to sell,
give
to
a means
GODIN, F. H.
Societe de Placements, Inc.,
of raising
in the
investment
for
equity markets. "The more capi¬
talist-investors, the stronger the
Montreal
of the world's dif¬
/■;
v;jf
"0"
Toronto
of
poll
Association of Canada, the second
highest
counsel
rating
went
the
the business executive.
he
that
should
be
employer—
It follows
F. B.
New York
familiar with
to
find
able to
be
others;
to
many
Montreal
Saxon,
Economics
Professor of
Yale
University,
at
Corp. Ltd.,
Co., Ltd.,
Ottawa
diversification
tific
and
GRIFFIN, F. E.
Greenshields & Co., Inc.,
merely another sound investment
medium for the
Montreal
they are the
available to him
large or small, but
medium
only
GUITE, J. P.
Credit
which offers both maximum bene¬
Interprovincial Ltd.,
risks of modern
from
the
many
Carlile &
Dominick Corp. of Canada,
Co., Toronto
Montreal
McCarthy, Calgary
LABATT, R. R.
Cochran, Murray & Co., Ltd.,
Hamilton
JACKSON, L. S.
Toronto
L. S. Jackson &
Co., Ltd.,
LANGEVIN, HERVE
Montreal
V
Lajoie, Robitaille & Cie Lmt.,
Montreal
JAFFRAY, P.
HEAD, C. W.
Dominion Securities
Mills, Spence & Co., Ltd.,
Corp., Ltd.,
LANGFORD, H. E.
Toronto
Dom.
Toronto
Investments]
&
Mort.
Association, Toronto
JARVIS, R. A.
HEWARD, C.JT.
McLeod,
HICKSON, E. E.
A. E. Ames &
C. J.
Wood, Gundy & Co., Ltd.
Young, Weir
&
Co.,
Wills, Bickle & Co., Toronto
JOHNSON, G. G.
Hodgson & Co., Ltd.,
A. E. Ames &
Montreal
LANGSTAFF, T. A. K.
A. E. Ames &
Toronto
JENNISON, G. L.
Co., Ltd., Ottawa
Co., Ltd.,
MacDougall &
;
MacDougall,
Montreal
LEDDY, J. A.
Co., Ltd.,
MacTier &
,.
Montreal |
Co., Ltd.,
LEVESQUE, J. L.
HOLLENBONE, B. C.
Stanbury & Co., Halifax
JOHNSTON, R. R.
G. E. Leslie & Co., Montreal
HOWARD, H. C.
Nesbitt, Thomson
Stocks
-
Bonds
-
Grain
JOYCE, J. H.
&
Co., Ltd.,
Oils
-
Mines
-
Commodities
"The
Montreal
Financial Post," Toronto
Credit
Interprovincial Ltd.,
Montreal
LITTLE, G. D.
■
Dominion Securities
Corp., Ltd..
Toronto
KEMPF, J. B.
HOWARD, R. P.
Gairdner & Co., Ltd., Montreal
Morgan, Kempf & Robertson,
Montreal
MACKELLAR, S. R.
Mackellar
Securities Ltd.,.
Toronto
MACKENZIE, W. S.
MEMBERS
Offices at:
Montreal Stock
.
A
COMPLETE INVESTMENT SERVICE
Exchange
Eastern
Calgary Stock Exchange
Vancouver Stock Exchange
Victoria
Calgary
Winnipeg Stock Exchange
Winnipeg Grain Exchange
Canadian Commodity Exchange Inc.
Edmonton
Regina
Saskatoon
The
Moose Jaw
Investment Dealers' Association
LIMITED
Kenora
Kingston
IlZ'uTZl
MAJOR, G. C.
.
Canadian Alliance
Ltd.,
Co.L
Ltd.
Montreal
Members
The Investment
Dealers Association of Canada
MARTIN, I. A.
Royal
Portage la Prairie
Swift Current
Securities Co.,
Saint John
of Canada
Investment Bankers Association of America
Lethbridge
INTERCITY SECURITIES CORPORATION
Ltd.
Montreal
MacMURRAY, J. A.
Montreal Curb Market
Vancouver
^
& Co
Nesbitt, Thomson
The Toronto Stock Exchange
W innipeg
Toronto |
LEDAIN, V. A. B.
Montreal
Toronto
society."
Goodwin Harris &
IRWIN, C. B.
HODGSON, J. A.
GUNDY, C. L.
protection
Montreal
KUHNER, M. R. W.
tion, Washington
Montreal
fits from its investment and maxi¬
mum
Canadian Bankers Association,
Co., Toronto
INNES, P. E.
MacTier & Co., Ltd., Montreal
investor,
average
KNOWLES, V.
Bache &
Associa¬
Bankers
-
Grenier, Ruel & Cie Inc.,
Quebec
constant
Wood, Gundy & Co., Ltd.,
Winnipeg
V. S. Castledine & Co., Ottawa
GRENIER, J. N. E.
expert supervision, then the openended mutual companies are not
Kippen & Co., Inc., Montreal
KNiGHT, D. N.
HUYCKE, E. D.
HAY, GEORGE
"If it is admitted that the cardi¬
principles of prudent invest¬
ment are careful selection, scien¬
KIPPEN, E. D. B.
Goulding, Rose & Co., Ltd.,
GRAHAM, JOHN
nal
Montreal
Toronto
Chronicle," New York
Associa¬
tion, Toronto
-
Cochran, Murray & Co., Ltd.,
HANSON, T. R.
John Graham &
Co., Ltd.,
HUTCHISON, R. T.
Vancouver
Investment
Waterloo Bond
this, in part;
says
Hall Securities Limited,
Dealers'
Investment
W. C. Pitfield &
Fairclough & Co., Ltd., Toronto
HALL, F. E.
HANSON, MURRAY
GRAHAM, C. T.
Kitchener
Glenn
O.
Fairclough & Co., Ltd., Toronto
KINGSMILL, J. A.
HUNTER, HOWARD
"Commercial & Financial
Royal Securities Corp., Ltd.,
himself.
.
HALDENBY, R. E.
Dominion Securities Corp., Ltd..
Ltd.,
KING, C. G.
Montreal
HAND, KEN
give counsel
probably, too, he will
features attractive to
A. E. Ames & Co.,
Montreal
Royal Securities Corp., Ltd.,
Hagar Investments Ltd.,
Ashplant & Co.,
GORDON, A. S.
this "modern way of investing" in
order
Star," Montreal
GOODEVE, CHARLES W.
investment
for
to
"Montreal
KIMBER, S.
Toronto
Montreal
Co., Inc.
Montreal
Toronto
Brawley, Cathers & Co.,
GOLDSMITH, J. H.
Dealers'
Investment
the
opinion
Peter Greenshields &
Co., Ltd.,
W. C. Harris &
HOYT, C. G.
HACKETT, J. T.
Canadian Bar Association,
Montreal
the
H
KILBURN, Mr. & Mrs.
HOWES, D. L.
HUNT, A. D.
GOLDIE, J. G.
Cochran, Murray & Co., Ltd.
to
Toronto; J. D. Gilmore, Toronto; and J
Limited
Victoria
Conclusion
back
1950
I.D.A.C. Convention
GUY, H. L.
Canadian Life Ins., Off. Assoc.,
Waterloo
HAGAR, J. D.
Weir & Co.
McLeod, Young,
Ltd., Montreal
ficulties."
Referring
2r
Toronto, Dominion Securities Corpn.
HUGHES, J. R.
GODWIN, C. E.
nation, and the less likely it will
be to succumb to the 'isms' now
causing most
Ottawa; Peter Jaffray,
Davy,
In Attendance at
Business Executive
investment,
I. Matheson,
Limited, Toronto
Mutual Funds and the
sound
A.
Gairdner
Thursday, June
CHRONICLE
FINANCIAL
Continued from page 5
Continued jrom page 25
vide the
COMMERCIAL and
Securities Corp.,
.fd.,
Montreal
James Richardson & Sons
ESTABLISHED
367 MAIN STREET
—
ADELAIDE 5801
direct private wires
MATHESON, A. I.
Dominion Securities coOttawa
WINNIPEG. CANADA
Offices from Montreal to Victoria connected by our own
TORONTO
1857
WALTER F. WILSON
EDMUND J. McDONNELL
ARNOLD G. PLAXTON
McALPINE, W. D.
Brawley, Cathers
Toronto
&
~
Ltd
THE
Convention Number
E.
COMMERCIAL and
FINANCIAL CHRONICLE
Manning Bagnall, F. J. Brennan & Co., Ltd., Charlottetown, P. E. I.; E. R. Pope,
Milner, Ross & Co., Toronto; Robert Ouimet, Dudley Dawson Limited, Montreal;
Frank J. Brennan, F. J. Brennan & Co., Ltd., St. John, N. B.
McCAIN, G. E. A.
G. E. Leslie & Co., Montreal
PIPER, W. J.
A. E. Ames & Co., Ltd.,
Montreal; S. G. Stanford, Guildhall
Securities, Ltd., Montreal; W. G. Pavey, W. C. Pitfield & Co., Ltd., Montreal;
George N. Thomas, Melady, Sellers & Co., Ltd., Winnipeg
Montreal
McCONNELL, J. E.
Nesbitt, Thomson & Co., Ltd.,
William J. S. Evans, Guildhall
Securities, Ltd.,
SAVARD, Mr. & Mrs. J. E.
Savard, Hodgson & Co. Inc.,
Montreal
PLAXTON, A. G.
SCULLY, H. D.
McCuaig Bros. Inc., Montreal
Fredericton
Co., Ltd.,
SIPHERD, L. W.
Nesbitt, Thomson & Co., Ltd.,
&
University of Western Ontario,
Montreal
McCULLOCH, R. G.
Osier, Hammond
Ltd., Winnipeg
PLUMPTON, K. E.
London
Nanton,
POPE, E. R.
McCUTCHEON, C. L.
Bankers Bond Corp.,
Ltd.,
Toronto
McEACHERN, R. A.
"The Financial Post," Toronto
A. M. Kidder &
POUTNEY, F. B.
Wills, Bickle & Co., Toronto
SMITH, V. BARRY
Hart Smith & Co., Ltd.,
RATH, H. H.
McGUIGAN, F.
Co., Montreal
SLIPP, C. R.
Houston, Willoughby & Co.,
Regina
Thomson & Co., Montreal
Montreal
READ, T. B.
Bank of Canada,
Ottawa
Hart Smith & Co., Ltd.,
Montreal
.
RHUDE, FORBES
McLELLAND, w. J.
Wood, Gundy & Co., Ltd.,
Toronto
SPRAGGE, W. P.
"Canadian Press," Toronto
A. E. Ames & Co.,
RIDLEY, Mr. & Mrs. J. B.
A. E. Ames &
MITCHELL, N. A.
Harrison & Co., Toronto
Co., Ltd., Toronto
G. E. Leslie &
Thomson & McKinnon, Toronto
Co., Halifax
WIGHTMAN, L. M.
Gouldmg, Rose & Co., Ltd.,
Toronto
Savard, Hodgson & Co., Inc.,
Montreal
WILKINS, G. C.
Mead & Co., Montreal
VIDRICAIRE, H. J.
James Richardson & Sons,
WILSON, J.
Montreal
A. E. Ames & Co., Ltd., Toronto
WARDROP, J. A.
WRIGHT, R. K.
Mills, Spence & Co., Ltd.,
Toronto
WATSON, W. H.
Anderson & Co., Toronto
WOOD, J. M. D.
Fry & Company, Toronto
—
WATT, CLYDE T.
Eastern Securities Co., Ltd.,
YOUNG, N. D.
Dominion Securities Corp., LtdToronto
Saint John
STANFORD, S. G.
Guildhall Securities Ltd.,
Montreal
Morgan, Kempf & Robertson,
Morgan, Kempf & Robertson,
Ltd., Toronto
STANBURY, H. N.
Stanbury & Co., Halifax
ROBERTSON, R.
MORGAN, W. E.
WHITE, W. T.
TROYER, J. T.
Toronto
SMITH, W. HART
Thomas B. Read & Co.,
Vancouver
McKIBBIN, R. B.
WELLER, F. G.
Wisener & Co., Ltd., Toronto
"Investment Dealers' Digest,"
New York
Gardiner, Wardrop, McBride,
Angus, Stonehouse & Baldwin,
Toronto
Midland Securities Corp., Ltd.,
London
Ltd.,
TRUDEAU, R. N.
SKELLY, D. A.
Milner, Ross & Co., Toronto
WELDON, D. B.
W. C. Pitfield & Co.,
TRIGGER, RAYMOND
Eastern Securities
Toronto
McCUAIG, H. R.
TORREY, A. S.
Montreal
Intercity Securities Corp., Ltd.,
Montreal
27
Montreal
BONDS
Montreal
R. D. Steers &
Isard, Robertson & Co., Ltd.,
MORRISON, D. E.
Royal Securities Corp., Ltd.,
A. E. Ames &
Goodwin Harris & Co.,
Royal Securities Corp., Ltd.,
"Commercial and Financial
Montreal
LIMITED
STEWART, J. M.
A. E. Ames & Co., Ltd., Toronto
ROGERS, J. C.
NESBITT, A. D.
Nesbitt, Thomson & Co., Ltd.,
j* r. Meggeson & Co.
Toronto
Montreal
J. C.
SHARES
STEWART, G. C.
Lajoie, Robitaille & Cie Lmt.,
Chronicle," New York
Co., Ltd.,
Hamilton
Toronto
ROBITAILLE, S. H.
murphy, h. e.
UNLISTED INDUSTRIAL
STEINER, R. N.
ROBINSON, P. L.
Montreal
Co., Ottawa
London
Toronto
MULQUEEN, E. F.
Mills, Spence & Co., Ltd.,
and
STEERS, R. D.
ROBERTSON, R. W.
Rogers & Co., Ltd.,
ROYAL
BANK
—
BUILDING
TORONTO
Montreal
SYDIE, J. E.
Sydie, Sutherland
Ltd., Edmonton ■;
ROSE, F. M.
Dow Jones & Co., New
York
&
Driscoll
ESTABLISHED 1921
MEMBERS:
THE
INVESTMENT
DEALERS ASSOCIATION
OF CANADA
NEVILLE, H.
Gairdner & Co., Montreal
THIBODEAU, G.
ROSS, D. G.
Milner, Ross & Co., Ltd.,
Dominion Securities Corp., Ltd.,
Montreal
Credit
Toronto
NIXON, S.E.
Montreal
THOMAS, G. N.
ROSS, G. ALLEN
Melady, Sellers & Co., Ltd.,
Winnipeg
Collier, Norris & Quinlan Ltd.,
OSLER, G. S.
Interprovincial Ltd.,
Montreal
Dealers in
Osier & Hammond, Toronto
oshguy, J.
Provincial
Casgrain & Co., Limited,
Montreal
Canadian Government
p. w.
Mills, Spence & Co. Limited
»
ORBORNE, J. R.
Nesbitt, Thomson
& Co.,
MUNICIPAL
GOVERNMENT,
and
D. W.
Canadian Alliance Corp., Ltd.,
Montreal
pavey,
w. g.
w. C. Pitfield &
Co., Ltd.,
Corporation
CANADIAN
Ltd.,
Toronto
PARTRIDGE,
Municipal and
CORPORATION
25
KING ST.
Securities
BONDS
WEST
TORONTO
MONTREAL
ELGIN
1341
idland Securities
WINNIPEG
923-385
PLATEAU 8751
LIMITED
Montreal
1
PtPALL, W. P.
fell, Gouinlock & Co., Ltd.,
Montreal
Milner, Spence & Co.
MEMBERS OP
pe3cival,
I
THE TORONTO
e. g.
arrison & Co.,
Ltd., Toronto
STOCK EXCHANGE
25 KING
ST. WEST
TORONTO
bxe, h, l.
ELGIN
f-nnings, Petrie
London
& Co., Ltd.,
1341
Members of the Investment Dealers
50 KING
STREET, W.
TORONTO, ONT.
ADELAIDE
1385
Association of Canada
HURON & ERIE BLDG.
LONDON, ONT.
M ETCALP 4500
28
THE COMMERCIAL
and
FINANCIAL
Ontario
Thursday,
CHRONICLE
Hydro
forges ahead!
11
NEW POWER PLANTS-OVER
1,600,000 HP!
A
rising level of industrial activity, a rapid increase in commercial and domestic loads,
widespread extensions to rural service in Ontario have brought about a very large
growth in the use of electrical energy.
and
To
meet
this increased demand and
to
provide for future requirements, The Hydrolarge scale expansion
Electric Power Commission of Ontario has well under way a
and
development program. A total of 11 new power projects
will add to Ontario's
than 1,200,000 kilowatts (over 1,600,000 horsepower). Of
this amount 162,500 kw (217,500 HP) is now
being delivered to Hydro consumers
from 4 completed
projects. A further 400,000 kw (536,500 HP) will become
power
supply
more
available in 1950 and the balance in 1951 and 1952.
The Commission is also
engaged in
a
frequency-conversion program in
a
section of the
province,
This
to
huge two-fold
the
program will enable the Commission to provide still better service
industries, farms and homes of Ontario, contributing to a high standard of
living and helping
to
maintain production
at
THE HYDRO-ELECTRIC POWER
peak levels.
COMMISSION OF ONTARIO
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