THERE are new factors entering into the business situation in Canada but the outlook remains the same. Business is good, although there are some evidences of a tendency toward reconstruction. For instance, it seems certain that in most lines there is hardly as much business being done now as there was a year ago. This is due more than anything else to the amount of money invested in the war loan. People who contracted to pay so much per week or so much per month have simply had to draw in on personal and household expenditures. When it is figured that hundreds of thousands of people are buying war bonds on this basis it will be seen that a certain measure of retrenchment has become pretty generally necessary. Of course, this money stays in Canada and ultimately will come back into circulation, and the situation it has created will cure itself. There are other factors contributing to the slackening of business, the chief one being shortage of materials. This is beyond cure and will continue so until after the war.
The slowing up process in business is very slight, however, and can be attributed to the fact that the manufacturers are facing most unprecedentedly trying conditions. There is no evidence of hollowness. Business could be immediately speeded up if the facilities for increased manufacture were available. The groundwork for business activity is still as solid as ever. The making of munitions, which has become the pivotal industry, is going to continue. No official statement has been made recently from Ottawa but the impression gathered there is that activity in munition making is assured for some considerable time yet. British orders may fall off—it is certain that they will fall off considerably in some lines and cease entirely in others—owing to tonnage difficulties chiefly. Whatever diminution there may be from this source, however, will be more than made up for by increased orders from the United States. Uncle Sam has decided to make use of our capacity up here for the rapid production of war supplies.
With a continuation of war orders assured it will be seen that business cannot fail but remain healthy. The deterrent factors already noted are not sufficient to effect any marked change.
SIR Robert Borden’s visit to Washington and New York has stirred up considerable comment. It is generally understood that he went to confer with the United States Government with a view to improving our balance of trade with the United States and our position with reference to exchange. At first it was rumored that he would attempt to negotiate a loan but this suggestion was abandoned in favor of the idea that he
would suggest an embargo on certain American goods coming into Canada. The latter suggestion seems based on sound grounds and, from all information available, it can be stated very definitely that the matter is under consideration. Necessarily, the matter would be proceeded writh cautiously and, in concert with the trade authorities at Washington. Under no circumstances could anything be done to arpuse antagonism among American business men. If any embargoes were placed the lines selected would be possible of classification under the head of “luxuries.” Just what effect such action would have on trade in Canada is problematical but certainly it would serve to keep more money at home.
It is interesting to note, in this connection, that the committee appointed at Washington to determine the industries that are essential and those that are nonessential have been forced to the conclusion that there are no industries which can be termed non-essential. When they came to look into the fabric of business they found that it consisted of a multitude of industries closely co-related and built up by an overlapping system. To summarily stop a certain number of these industries was, they found, impossible. No industry could be stopped without hurting, directly or indirectly, a great number of other lines of business. In fact, they found that business was built on the principle of a brick wall. If bricks were plucked out from a wall indiscriminately here and there, the wall would be seriously weakened and probably crumble up in short order.
The conclusion reached was that conditions would right themselves. As conditions change certain lines of business will be affected. If, for instance, money became generally scarce in the United States as a result of war conditions, certain industries, which on any arbitrary division, would to-day be classed as nonessential, would automatically be forced to contract operations and in some cases to stop. This, it is contended, is the only way that the stoppage of non-essential industries can be operated without giving business generally a serious body
UNQUESTIONABLY at the present time Canadian manufacturers have a magnificent opportunity to improve their hold on the home market and it is gratifying to state that in most lines they are gripping the opportunity and making the most of it. It consists, of course, in the fact that supplies from abroad cannot now be obtained and demand has literally come knocking at the door of the home manufacturer. Take, just for instance, the matter of men’s hats. There has always been a good demand for Canadian made hats but the market in the higher priced lines was so
completely taken up by the old-established Continental and American makes — Christys, Borsalinos, Stetsons and Mallorys—that the Canadian manufacturer necessarily turned out the cheaper grades. To-day the home maker is putting out an article that compares with the most expensive hat imported from abroad. They have been literally forced into the raising of their standards by the fact that hats from abroad have been procurable for the Canadian market in very limited quantities only. The American makers are too busy with Government war orders to pay much attonattention to the Canadian field now. The U.S. army ordered 1,500,000 sombrero hats and the manufacturers have been almost at their wits’ ends to meet this demand. It is said, for instance, that there is not enough fur of the variety needed for these hats obtainable on the markets of the world. In all probability the difficulty is one of tonnage rather than of supply. The fact remains, however, that American hat people are not able to do much on the Canadian market.
This rule applies to a more or less extent to all lines. The home manufacturer is finding it necessary to supply all grades of demand and in many cases is finding it possible for the first time to get a firm grip on the best trade. The higher priced, best quality goods from outside are not reaching the market and the home manufacturer is filling in with improved lines of his own. He has the opportunity, therefore, to consolidate his gains, to “dig himself in” and make good his newly acquired position against the onslaughts which will come later.
Several years ago there was a certain firm with headquarters in the United States doing a big business in Canada. The last time they sent a travelling representative over he spent six weeks in Canada and went back with orders for $40,000. To-day this firm fills only such orders in Canada as are forced on them and the home manufacturers are taking up the trade as far as they can in view of the shortage of materials faced. They are offering as good a line at a slightly better figure. Nor in this particular case does the tariff account for the ability of the home factories to accomplish this. The duty on the finished article is 42% per cent., and all the raw material has to be imported into Canada on a 40 per cent, duty basis..
“ƒ fear,” said Lloyd George—and we lacked the comprehension to grasp what he spoke of — “/ fear the disciplined people behind the German army, the rationed family and the determination of those at home to stand and starve so that their fighting men may be fed—/ fear it more than the Imperial army itself."
Even now the effort in Britain to make the food hold out means little to the majority of Canadians. ]Ve read in a detached kind of way that the nation is now on rations. What is it that puts a whole free people of 40,000,000 on measured meals? Why cannot they have a “second helping" if they can pay for it? We do it in Canada; in fact, some in Canada, thanks to British money paid over for shells, are doing it to-day where they never did it before.
Food control is not charity ; it is war. The Allies have a right to demand it. They have a right to resent the offer of only what is “left over." Canadians must get the right ethics of war-time Food Control.
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