Passing of the Parasites
Fungus Growth of Canadian Prosperity Being Annihilated and Healthier Progress Imminent—Signs of Renewed Activity in National Expansion
NOT VERY many months ago some enterprising journalists in New York, and some others in London, all probably inspired from the same source, succeeded in disseminating predictions of an extraordinary financial crash that was about to take place in Canada. To reproduce the actual prophecies is not necessary. Some of the less wary and perhaps more ignorant of the alarmists actually stated that conditions were in a very parlous condition. When positive statements are made they can be dealt with but it is very hard to waylay a prophecy and take its life away before the date of its maturity. When, however, those who stated that calamitous conditions prevailed they were immediately attacked and, generally speaking, the truth was established* But the investor is influenced by statements whether true or false. He became very nervous and was disinclined to send to Canada as much money as be previously had done. He became inquisitive.
For so doing Canada owes him no grudge. If anything will stand the utmost investigation it is the ability of Canada to make good on every dollar that has been legitimately invested, or handled with ordinary horse sense, in the development of her natural resources.
Despite this greater caution and despite all the prophecies of calamity investors from abroad have sent to Canada this year more money than usual. Only about once in the past decade has the purse of the foreigner been opened wider than during the course of the present year. The stories of calamity and the prophecies of impending credit collapse have nevertheless proved expensive. They have made it necessary for the Canadian borrower to pay more for his money* When the investor loses confidence it means that he believes he is taking more risk and very properly he wants a higher return on his money. That he will get on the money he sent this year as compared with the return on the money he sent at any time during the past decadeAll the additional rate he imposes on the borrower is not due to the screeching of calamity howlers, those constitutionally of the “Calamity Jane” type and those whose motives were not wholly disinterested. Some of it, and that proportion need not be regretted, is due to the extraordinary demand for capital which has been steadily developing during the past few years. That development was dealt with in the clearest possible way by Lord Milner, whose address was published at length in a recent issue of The Financial Post.
We might here give a little attention to what actually resulted from the howl
sent up by alarmists, and also tc the substance of their alarms. The most effective was that with regard to the exceptional adverse balance of trade which the records of the Dominion showed, and the next in importance was the claim that real estate prices in the entire Dominion were inflated to a phenomenal degree. As to the first, the real significance of the trade figures has become thoroughly understood by the great body of investors. It has been dealt with previously in these columns by the writer, and need not be the subject of further comment. It is now generally understood that Canada has been sinking a very great sum of money annually in fixed capital and the development that has followed has been such as to be termed by one British authority “the great economic fact of the decade.” It would be futile to again catalogue the main facts of development actually accomplished and of development still in progress. Immense sums are being expended on capital account, and the aggregate volume is such as to fully and satisfactorily explain the proportion by which Canada’s imports exceeds her exports.
No Real Estate Snaps As to real estate it may be remarked that after all the worst prophecies there has not yet been any serious deflation. A prominent investor from Britain—or more accurately, a considerable investor and particularly shrewd one—passed through Eastern Canada on his way back from the Pacific coast. He was very much disappointed. Like many others in Canada, the United States, and the United Kingdom, he had heard that the prices were tumbling, and that in so far as real estate at “the Coast” was concerned, the bottom, generally speaking, had fallen out of things. This is the time to buy when everybody wants to sell or has to sell. But this investor found that he had been misinformed. It was quite true that every house in Vancouver was not occupied, and1 that several thousand people had left that city until times brightened upBut as to buying good property at low prices, he found there was no one willing to letgo, except at a good price. The same thing can he said of other cities in Canada. This calls to mind a paragraph which I marked in a Montreal newspaper which contained an interview with a banker at Vancouver. Bankers, it ought to be remembered, are the class on which much blame has been heaped. They are the men, according to quite a number of Canadians and some Britishers, who are to blame for tight money. They are not generally credited with being optimists.
But, as a matter of fact, they are. Sometimes it is their duty to tell their customers that things do not look very well, and it is time to go carefully. This advice is often called “putting a damper on things.” In the flood-tide of growth men do not like to be curbed. It is the time when caution is most necessary. Vancouver, in common with other Canadian cities, had to steady her course. Her pace had to be checked, and after a rush of immigration, and a scramble for wealth along an easy route, not by wealth-producing so much as by wealth-filching, things had to be set in order. The result is one of the very best indications of the return to Canada of better times. I can find no better way of describing the hopeful changes taking place in Vancouver than by reproducing the clipping from a Montreal paper to which I have referred :
“I do not share in the pessimism which is said to pervade financial circles in Vancouver. Conditions are, on the whole, fairly satisfactory. Three classes have been hard hit by the prevailing financial stress, and the city will be better off without any of them. The first is the small commission agentThis class is like birds of prey who go from one place to another wherever they think some easy money is to be picked up. Many of them have left the city, going to Los Angeles, San Diego and other cities to the south where they think business will be better. The second class is the small merchant who took advantage of the keen competition among wholesalers and the building boom and started up in business in the outskirts of the city. Many of them had no capital to start with, and when the wholesalers began to restrict credit and demand cash they closed up. The third class is the arch-real-estate speculator, many of them from Eastern Canada, and the rest from across the border. When the slump came in real estate they were hard hit, and many of them have closed their offices, which consisted of a typewriter and a desk, and have gone away. The city is better without them, but these men have cried down the city abroad, and their empty offices are regarded as a sign of hard times, while as a matter of fact they should be regarded as the reverse.”
Earned the Nation’s Thanks If the higher rate for money which Canada has now to pay, and if the “Calamity Janes” of the journals were the cause of Vancouver getting rid of so many undesirables, they are entitled to the gratitude of the nation. The element with which the Vancouver banker is so well acquainted are the parasites of prosperity, and kill it if they get too much of their own way. In the fall of the present year I witnessed in Toronto a gang of men, under the direction of a learned looking gentleman with eye-glasses and a scientific mien, handling long instruments with which they were removing a kind of fungus growth on chestnut trees. That parasitical
growth was very prevalent in the fall, and to preserve the trees it was necessary to remove it. The explanation the tree doctor gave to me was to that effect. When our cities, or the entire Dominion, strike a gait that cannot be maintained healthfully, the first symptoms are the parasitical growths which the Vancouver banker so well describes. As parasites arrest healthy growth of the chestnut trees in question, so did the parasites in Vancouver arrest the healthy growth of that city. A halt had to be called to force out the undesirables, and they left with a screech that was heard in all quarters of the globe.
We do not desire to be understood as conveying the impression that Vancouver is the only city to be benefited by the arrest and annihilation of parasitical elements. All over the Dominion the mis-directed activity of commission gathering and “scientific salesmanship” is being curtailed and “cut out-” What is being realized more clearly every day is that if we have something to sell, the selling generally takes care of itself. For instance, a few farmers got together to handle their own wheat in the West, and they are doing it at less cost to themselves than previously. These toilers got a little weary of the burden of carrying on their backs too many “commission gatherers.” The distribution end of the country’s business is too heavily weighted by experts. Too many are engaged in filching fortunes out of what producers are producing, and too many have been making fortunes out of what the farmers, and other producers will produce. Every deceptive device of “scientific salesmanship” has beenused to picture what will be produced and what Canada will be in order to sell. For this the soil was good when labor was scarce and money was easy. Parasites of the kind we have mentioned cannot now live under changed conditions. Rid of the incubus of so much “raking-off” commissions and charges on capital before it gets into actual productive work, and of the produce of the capital when it is employed, the country ought to soon pick up some paces in its progress. Against the ravages of the fungus growth it ought to protect itself. The memory of much victimization, the weariness of the continuous monthly payments being made by the wage-earners on town lot and other credit purchases will last for some years. Against the wiles of the “scientific salesman” that memory, as long as it lasts, will be some protection. The elimination of so many non-producers from Canadian cities has not done the country any real harm. When they could no longer gather in easy money they decried the country. Some damage they did, but compensated the Dominion to some extent by leaving it.
Real Healthy Business in Canada
There are other signs of greater prosperity than that of the elimination of certain parasitical elementsThe sturdy constitution and richly endowed framework of this great Canadian youthfulness is being purged of some of the complaints of infancy. From nothing more
serious have we been suffering. Inherently there was nothing wrong. All the time the country has been prosperous. But it is going to be more prosperous. To count up the signs pointing towards better times is too long a task to be done thoroughly here. It will be dealt with but briefly.
Already I have referred to the success of certain movements among the farmers to apply business principles to the handling of tlieir crops. They have formed their co-operative organizations, and through these they will require two things : experience in business and increased marketing efficiency. The first is by far the most important. It will result in greater production of wealth and a better standard of rural life. Between the necessary distributing machinery of tlie country and the producing classes there will grow up through co-operation a better feeling. Friction will be eliminated, and if the co-operative movement does no more than this it will have been well worth while. Nothing will allay the discontent aroused by impractical idealists so well as actual experience in reducing the ideal to practice. When, however, the great producing communities in the Dominion feel that they are part of the distributing machinery; that they have their hand on the controlling lever, they will enter more heartily into the business of producing.
Without, however, the aid of co-operation before it took practical form, the increase in the volume of production within the Dominion was very marked. Other great agencies will be applied to that business with greater effect in the course of a year or two; I refer to the pending completion of two great railway systems across the continent. These two lines have been absorbing the attention, and the money also, of very powerful groups of British capitalistsAs soon as the lines are laid across the continent and are put into working order, these great forces will be able to turn their attention to the making of business. No matter how good the land may be through which a line will pass it will not be worth anything to the railway company unless it is being farmed or exploited. The great task before the railway companies will therefore be the procuring of settlers to locate on lands adjacent to their lines. Not only that, but these railroads and the capitalists at the back of them will be very anxious to turn to account the stores of ore that lay near to tlieir tracks, and the stores of timber and other natural resources of which too much can hardly be said. What may the country reasonably expect from a group of men who are able to project and carry over the continent a railway system? When the same energies are tnrned to the development of business they are going to leave their mark on the development of the country. Up to the present time the greatest force in the building up of the Dominion has been the Canadian Pacific. Not only did the men at the back of this line finance the building of it, but they have also been instrumental in financing other industries that brought business to the line. Between the BartlUof Montreal and the Canadian Pacific Railway
Co. there is understood to be a very intimate relationship. That Bank, it will be noticed, has done much for the basic industries of the country. Directors of the Bank of Montreal and those of the Canadian Pacific are to be found on the boards of many companies that direct much traffic to the C.P.R. When, therefore, the Canadian Northern group and that of the Grand Trunk are relieved somewhat from the strain of railway building, they will turn their attention to the development of traffic, and the result will he very much greater prosperity in the Dominion.
The directorates of both these companies will, in the course of a very short time, be in a position to give their attention to the work of traffic building. Already there are not lacking evidences of some work being done in that particular line. When, however, these roads can pick up traffic almost anywhere in the Dominion and carry it out of the Dominion without having to hand it over to a competitor, they will get busy and aid materially in developing the country’s industries.
In the space at the disposal of the writer at the present time but one more subject can be referred to, and that is the development of mining that is taking place^ In the Northern Ontario camps there is continued productiveness, and the industry may he said to be only starting in British Columbia. Labor appears to have lapsed into a more reasonable mood. It is the great trouble in British Columbia, and any progress there is dependent upon it. Uncertainty with regard to it has kept British Columbia backward for some time, but now a more steady volume of labor is procurable, and there is good reason to look forward to an improvement in this respect in the future. Wages as high as those common during the past few years are impossible. There will have to be some readjustment. High prices, which have justified high wages, will have to come down. Relatively Canadian prices and Canadian wages are higher than elsewhere, and in consequence they will totter and fall as the wind is let out of the foundation on which they have been reared. When the readjustment of wages and prices is effected there will be another march forward in Canada which will make the next decade equally as striking as the one marked at its conclusion by the prevailing depression.
His Stock in Trade
Upper-cut.—A little boy, seeing a gentleman in the street, placed himself in a convenient place to speak with him; when the gentleman came up the boy pulled off his hat, held it out to the gentleman, and begged for a few cents.
“Money!” said the gentleman, “you had better ask for manners than money.”
“I asked,” said the boy, “for what I thought you had the most of.”—Life.