B.C. RIDES OUT THE STORM

CHARLES LUGRIN SHAW April 1 1926

B.C. RIDES OUT THE STORM

CHARLES LUGRIN SHAW April 1 1926

B.C. RIDES OUT THE STORM

CHARLES LUGRIN SHAW

HE WAS driving a ramshackle wagon hauled by a brokendown horse, and poverty and hardship were written on the faces of the scrawny woman who sat beside him and the ragged youngsters who stared out from among an accumulation of furniture. But he smiled and there was an eager flash in his eyes.

“Headin’ north, ain’t I?” he drawled. obliged. Happy? Sure thing, neighbor. Reckon I’ll cross the B.C. border to-morrow; going to ranch up thar.”

He was poor, perhaps, in the world’s goods, but he was young and evidently ambitious and when he told us something of his experience we knew that he belonged to the pioneer breed. He declared he was going to make good in B.C. and we wished him luck. He was a real farmer, too; knew cattle, but— “Plumb near dried out down south,” he went on. “Drought three years with no let-up—played hell with the whole country. They tell me that up in B.C. you can count on rain for sure and that the price of land and taxes are kind of reasonable. Gosh, look at that green grass thar! This must be close to God’s country. Who wouldn’t be happy?” Then there was the man in the shining black limousine. He drew whiffs from a long cigar while he spoke, and he was just as enthusiastic about the green grass and the climate as the man in the ramshackle wagon. He was enthusiastic because he saw the glitter of gold as well as the sheen of the sun on the green grass and the mountains. He realized that scenery and climate in this competitive era have market value.

“The eyes of the wise are on the West,” he said with a smile. “It used to be California. Now it’s Florida. Just wait a bit and you’ll see the good times hit the Pacific Northwest with a bang. Prosperity is coming to B.C. in a big way; no one can stop it. Too many things in its favor.”

Borrowing at Home

'T'HE man in the limousine was a booster, just as the man in the rumbling cart was. Each

In this article a British Columbian explains why the British Columbian thinks he's the luckiest person in Canada.

presented a sidelight that is characteristic of what is going on in British Columbia to-day. The province is winning new citizens belonging to all walks of life and, with their coming, there is being built a new and deeprooted optimism. It isn’t just typical, western optimism either. There is something more solid about it than that. B.C.’s optimism isn’t merely a matter of verbal ecstasy, but of confident, aggressive action.

For instance, something happened recently in British Columbia which a few years ago would have been regarded as impossible. A public utilities concern found it needed more money to carry on and decided to negotiate a bond issue of half a million dollars. There were two unheard-of features about this transaction. In the first place, the company ignored outside markets and put the bonds on sale in British Columbia. In the second place, the issue was over-subscribed in a day.

That deal made financial history in British Columbia. It was the first of its kind. Brokers are quite certain that it will not be the last. Indeed, British Columbia manufacturers and financial men are quite happy about it. They believe it signifies a tendency on the part of business houses in their part of Canada to depend more on themselves and their own community’s resources than in the past.

Deals like this are giving British Columbians a reliance in their own country that many of them used to lack. British Columbians are seeing the wisdom of earning dividends on their own money instead of paying dividends into the treasuries of corporations financed entirely by people thousands of miles away.

In British Columbia, as elsewhere in Canada, there has been complaint about backward business conditions. Conditions, after all, haven’t been so bad out in B.C., everything considered. True, the basic industry of lumbering has been quiet, and the wave of industrial depression did not leave the west coast untouched. But even the pessimists cannot ignore such signs as these:

Vancouver is experiencing the biggest building boom in its history with contracts in hand totalling over $13,000,000; the amount of capital held by loan and mortgage companies for investment on reasonable security is greater than for the past decade; people are meeting their obligations more readily; individual bank accounts are twelve per cent, higher than last year; unemployment is negligible; fewer business failures are being reported than

during the last four years; liabilities have decreased by fifty per cent., and the number of industrial establishments has increased from 1,007 in 1916 to 3,566.

In other words, business is very fair, in spite of the grumbling.

Vancouver Becomes Grain Por;

THERE have been disappointments for those who banked on a continued rise in the volume of grain shipped through Vancouver, but now it appears that the grain trade through that port will soon exceed the wildest dreams of the optimists—largely as a result of the Railway Commission’s recent order equalizing freight rates to the west coast. Vancouver’s sudden rise to prominence as a grain port is undoubtedly the most significant transportation development of the past decade in Canada. Three years ago records for volume of tonnage passing through Vancouver were being shattered so continuously that everyone expected the golden stream of wheat to go on forever. The crop of 1924 turned out to be light, however, and there was a consequent decline in wheat shipments through that port. Many people were disheartened—until they realized that nothing is so uncertain as the swing of the trade pendulum.

Now, everything is on the upturn again, not only in wheat shipments but in other producers of prosperity. Shipments of 1925 wheat broke all records. The Vancouver harbor board has just paid $2,500,000 for waterfrontage on which to build new piers. Victoria is now building a million-dollar grain elevator of its own, and up in the north Prince Rupert is erecting an even bigger one to accommodate the wheat brought out over the northern line of the Canadian National.

Where is all this wheat going to? Most of it is going through the Panama Canal to the same markets served by the Great Lakes route. Some of it is going to the Far East, British Columbia’s best and biggest trade prospect. Practically none of this wheat is grown in B.C. The farmers of the province do not benefit directly through all the fuss about grain shipments, but the movement brings shipping to B.C. ports that would not come

otherwise; it brings money in the form of payment for supplies, stevedoring, storage and dockage, and creates business for related industries.

The Boom That Broke

FOR some reason or other the impression seems to have become general in certain quarters that British Columbia is overburdened with debt; that she is just a few steps ahead of her creditors.

Everyone who knows the province at all remembers the great wave of optimism that swept across it, as well as the other western provinces, during the few years before the war, carrying in its wake vast schemes for expansion in almost every direction—expensive schemes, many of them, and, in the light of subsequent events, extravagant. The province was leaping ahead in those days at a phenomenal gait. There was a real estate boom on and this was not confined to B.C.. either. Land prices were skyrocketing and new industries were becoming established in such numbers that some people wondered whether the country could digest them all. Money was easily made, speculation was rife, and indulgence in luxuries extended from the bottom strata to the top. Everyone seemed to think the grand old boom would go on booming for eternity and exchanged his bank savings for a title to a corner lot or something of that sort and then went joyriding on the assumption that the corner lot would foot the bill. Cities and municipalities fell victims to the spending mania and borrowed money to build development works that in some cases would meet the demands of thirty years ahead. Self-satisfied aldermen rubbed their hands and remarked that posterity would be very glad to pay the final cost. Posterity, you see, would embrace so many people, such wealthy and generous people.

Yes, it sounded very nice then but when depression came to British Columbia it came with a wallop that left an impress for years.

There were exceptions, but, on the rank and file, the war had a paralyzing effect, and British Columbia, with its greatest per capita contribution of manpower, felt the full weight of the blow. Land values collapsed. Development projects that had already cost millions were suddenly abandoned, for capital was required for war purposes. The men marched off to war, leaving farms idle, mines unworked and business disorganized.

British Columbia, as a whole, was slow to recover. The province was very young, scarcely developed at all in a relative sense. It was just beginning to build for itself a permanent abiding place for posterity when hostilities broke, and the deadening sequel of four years of war seemingly brought the whole structure down in a crazy heap. Everything seemed to go wrong when the soldiers came home, and the hope that the empty valleys and struggling cities would suddenly be filled with the new settlers and citizens was realized only to a partial degree. Thousands of ex-soldiers and others did go to the coast then, obeying the same natural impulse that is drawing people there to-day; but, because they couldn’t find a good job and salary waiting for them, they drifted on to California. There are thousands of them down there still, with their hearts still in B.C., awaiting their chance to return from the land of everlasting sun and sagebrush to the country they still call their own—the country of snow-topped mountains, big timber and blue seas, where people really live.

Unfortunately the long depression and its inevitable accompaniments became the groundwork for propaganda stories—some wilful and some well intentioned but none the less vicious—to the effect that British Columbia had shot its bolt and must wait a long time for the return of good times.

The Real Debt Situation

WHAT is the real debt situation in B.C.? It might be imagined that the question of debt would be about the gloomiest subject that could be discussed in the presence of a B.C. cabinet minister. Actually, it is just the reverse; for if there is one thing the government prides itself upon it is the condition of its debt.

“Yes, we still hear occasionally those predictions of bankruptcy,” says Hon. J. D. MacLean, Minister of Finance. “They are not so frequent as they used to be, though. The truth is sinking in.

“Our gross debt is approximately $S0.000,000, and I'll admit that it is a large amount. But the mere sum of the debt is relatively unimportant. The important thing is

our ability to pay, and on that score we aren’t worrying in the slightest.

“The simple fact is that no other province in Canada is making anything like the effort we are to pay off its debt,” added Dr. MacLean. “British Columbia is still in the pioneer stage and it’s only natural that big borrowings would have to be made. The country needs to be opened up and we can’t build roads, bridges and railways and schools by a touch of the magic wand. But with all our borrowings the debt of the province is but ten per cent, of the combined debt of all the provinces. And here is the big difference: our sinking fund—that is, the amount laid aside for retirement of that debt — is fifty per cent, of the total sinking fund for all the provinces. Most provinces lay aside only one-half of one per cent, each year as sinking fund. We lay aside sufficient to liquidate the entire debt at maturity of the loan. That, to my mind, is the fundamental reason for optimism so far as government finances are concerned.”

But, important and fundamental as this provision for debt retirement really is, there is another aspect of this financial question that is even more important. It is all very well to quote figures showing that the debt is going to be paid. More to the point is: How?

“We are really very fortunate,” said Dr. MacLean, when the question was put to him. “In the first place royalty fees and revenues from natural resources more than take care of the debt charges of the province.

“The fairest way to figure the whole thing out is to segregate our net debt from the gross. Our revenue-producing debt, which is supposed to be self-supporting, when deducted from the gross, leaves a net debt of $41,600,000. This, then, is the amount which we must prepare to pay off by direct taxation, and it represents a per capita debt of $76.60.

“Too burdensome? Look at the province’s natural

resources before attempting to answer that. We have natural resources in which all the people in the province are interested to the extent of no less than $700,000,000— roughly $1,350 per head. These resources include merchantable timber, unalienated agricultural lands and permanent public buildings. They take no account of grazing lands, of coal and minerals, of an assessed valuation for taxation amounting to $810,000,000; nor of water power. With resources of $1,350, the taxpayer is a poor manager indeed who cannot meet a debt of $70.60. My own view of it is that British Columbia is not only solvent but is in the best financial position of any province in Canada.”

By and large, the basic facts of the financial situation in the province west of the Rockies are such as to spring the trap from under the alarmist predictions of bankruptcy. Whoever heard of anyone going into receiver’s hands when he had so much wealth he didn’t know what to do with it?

That is precisely the position of B.C. No province is more richly supplied than British Columbia is with raw materials awaiting the magic touch of man and machinery to convert them into dollars. To be specific, B.C. stands at the top among the provinces in the production of zinc, copper, lumber and fish: second in the production of gold, silver, general mineral output, and fruit; third in the output of paper and paper pulp and in general industrial activity. Not a bad record for a province which a little more than twenty-five years ago was regarded as hardly worth considering in Canada’s economic scheme!

The Most Serious Problem

' I 'HE province’s most serious problem hinges on the fact that the facilities for liquidating her immense natural wealth are hopelessly inadequate. British Col-

umbia still has to face all the trying problems of a new country still in the pioneering stage. The rugged contour of the country—vast stretches of mountain range crisscrossed by mighty rivers—makes colonization so costly that comparison with other new provinces in this respect is out of the question.

In fifty years the province has been forced to spend $60,000,000 on the construction of over 16,000 miles of roads, trails and bridges, to say nothing of upkeep. The initial cost of these projects was just twenty times more per mile than it is in the prairie provinces. All this explains, in part, why B.C. has had to borrow to keep going.

Like the rest of Canada, British Columbia suffers more from lack of population than anything else. The combined areas of the states of Washington, Oregon, Idaho and Montana are barely more than the area of B.C., but the population of those states is almost seven times that of B.C. The United Kingdom, Belgium, Holland, Switzerland, Denmark and Sweden could be packed neatly within B.C.’s borders with plenty of room to spare, yet B.C.’s population would have to be multiplied over a hundred times to approach that of these seven countries.

But recital of these troublesome problems should not obscure the vision of the advancement really being made by British Columbia towards genuinely substantial security in an economic sense. B.C. is in a position to profit from many of the pioneering blunders of the past. The immigration tide has commenced to turn her way. New capital is being offered for her development. The long fight for equal freight rates is being won and that in itself, is bringing about an enormous trade revival.

British Columbians who have been through the province’s dizzy experiences with booms and slumps can afford to smile at the past and regard the future eagerly. Their ship has been through rough weather but a clear sky lies ahead. They have ridden out the storm.