Let Us “Keep Our Tails Up!”

J. VERNON McKENZIE January 1 1924

Let Us “Keep Our Tails Up!”

J. VERNON McKENZIE January 1 1924

Let Us “Keep Our Tails Up!”

J. VERNON McKENZIE

WHEN conditions were just a little "jumpy," and there was a tendency toward a temporary discouragement that was not warranted by facts, there was a forceful, if inelegant, phrase used by members of the Royal Air Force: "Everything's all right; just 'keep your tail up!'"

This piquant phrase gained rapid currency, perhaps even more in England than in Canada, during the years from 1914 to 1918.; A

famous English var/g/g /gso iety actress appeared in a successful Revue “Tails Up.” The phrase came to have a connotation not only of courage but also of success.

Suppose we recall this phrase in 1924, as a message to Canadian business and professional men. Let us “Keep our tails up” not only for this year, but particularly as long as there are conditions which warrant a display of optimism and courage, and as

C 1919 '/92 9 Calendar, no! /f Ira/yea r,:/993, dveroge o//irsf -fen rnoafhs only J

long as there are men and women in Canada who are qualified to grasp the opportunities afforded.

As we face 1924, it naturally is a time for stock-taking. For three successive New Years, now, warning signals have been flown, “ca’canny” policies have been foremost, advocates of industrial and commercial expansion have been shoved aside: quite rightly, too. But we have achieved—and are achieving—certain things which warrant us, as intelligent optimists, in rather pluming ourselves on the fact that we are residents of Canada, citizens of one of the two most happily-situated nations in this troublous world.

An important test of a country’s prosperity is its productive economy: the increase of its output “per unit of energy and capital.” What indicates an increase in a nation’s productive economy? An increase in manufacture and the handling of goods in trade; in executive capacity and in inventiveness. The best reflection of this prosperity is the capacity to export. Canadians may justifiably preen themselves on the fact that this Dominien is to-day amongst the first four exporting countries.

Records for the first nine months of 1923 show an increase in exports from Canada to the value of approximately $250,000,000 moré than for the same period of 1922. In the same nine months Canada’s excess of exports over imports was almost $100,000,000.

In Days of Yore

IT IS interesting—and significant—to hark back to a

period in our history which to many may seem as remote as the Dark Ages—-barely a third of a century ago, 1890. Our total exports in that year were valued at $85,000,000, and of this amount manufactured goods represented but little more than $5,000,000—scarcely six per cent.

What is the situation to-day?

For the calendar year ending May, 1923, Canada’s exports aggregated $952,000,000, and of this amount totally manufactured goods formed approximately forty-two per cent., or $400,000,000. Including semimanufactured exports this figure would be increased to $495,000,000.

An amazing growth, indeed, both in actual volume as well as in percentages!

Some significant facts of Canada’s trade have been incorporated in the two charts appearing on this page. Number one shows the changes from year to year, since

1919, in the average declared value per month of Canadian exports and imports. It will be seen that in the past year both items have been increased; and inasmuch as this estimate is based, for 1923, on the first ten months only—thus omitting November and December, whose exports are always very heavy—we may conclude that the figures in the diagram aie, if anything, an understatement of the facts.

In any case, of course, the statistics of our external trade bear no comparison with the tremendous totals of

1920, when the average per month, both of exports and imports, was well in excess of $100,000,000. One of the minor drawbacks of the very heavy fall in prices, such as occurred in 1921, is the difficulty which >t occasions in all attempts to compare the trade of one year with that of another. With a view to meeting this difficulty, chart No. 2 has been prepared, in which the values of exports

and imports for each of these years are estimated at the Trices prevailing in 1922. This enables us to follow fairly closely the changes in the bulk or volume of trade, as distinguished from changes in its money value.

The resul; of this re-reckoning is—to say the least— —encouraging Our o„, ,aimports were almost,

if not quite,—on this basis—as large last year as in 1920; and our exports considerably larger. As compared with 1922, imports have increased in a marked degree, while exports a re about the same.

What should interest us chiefly, let us not forget, is the volume of imports. We do not consume our exports; for us they serve as a means of purchasing the goods produced abroad that

we do want to consume. Our consumption of imported goods has been very heavy; and we have every reason to believe that there has been a corresponding increase in the consumption of goods produced at home.

Our Orgy of Extravagance

MILDER term can justifiably be ^ applied in referring to the wanton expenditures of federal, provincial and municipal taxation authorities throughout the length and breadth of Canada. Believing that the time has come to call an immediate halt, MACLEAN’S has decided to give the people of Canada the amazing and startling facts which account for our ever-increasing debt charges—the weight which is to-day crushing Canadian industry and strangling initiative. Three articles by Grattan O’Leary, the bestinformed and most pungent of Ottawa’s press gallery resident correspondents, will appear in the January 15, February 1, and February 15 issues: ‘Ottawa’s Orgy of Extravagance.” These will be followed by other articles, describing the same question from municipal view-points.

And what of the future? What do we hear from informed prophets?

H. R. Poussette, director of the Commercial Intelligence Serv ce, Ottawa, and a man who is extraordinarily well-informed in regard to the ramifications of our foreign trade, as he has served in the capacity of “trade scout” in several foreign lands, has made a

carefully-considered, ¡OÍD /9 so

albeit rather remarkable, prognostication.

He believes that within the next decade, by 193 i, Canada’s export of manufactured goods will have grown o at least $700,000,000 and possibly even to $1,000,000/00.

Mr. Poussette, by the way, has wagered a suit of clothes and a hat that the first figure will be reached, and a hat and a suit of clothes on his second forecast.

Sublime faith, indeed!

“I am only a poor Civil Servant,” he remarks, “and a hat and a suit of clothes would mean a good deal to me.”

Why should Canadians be vitally interested in our rapidly-growing export business? Permit Thomas Morton

export manager of the Western Canada Flour Mills, to answer:

“One reason is that it brings about a lowering of costs in this country. I would put in a plea for export business on the ground that it keeps our mills and factories in full operation. By doing so, prices are lowered to the home consumer and employees are given a chance to get more work during the year.”

Export More Manufactured Goods

A DIVERSIFICATION of our exports will place us on C*an even more stable economic basis. Ablow to any one or two lines of manufactured exports would not, then, be such a serious matter. A readjustment of our industrial activities and capacities so that we can turn more of our raw materials—of which we have been, in many instances, all too prodigal—into manufactured goods will also be a long commercial stride forward.

If we can export in large quantities goods which are not raw materials, but goods which represent “not merely the fruits of the earth in any sense, 01 the products of the soil, but which represent the skill, knowledge, energy, enterprise and labor of the country,” we will have a double advantage, because we will have taken what nature gives and added thereto the product of ingenuity. We may do much in exploiting our own natural resources, instead of shipping them out of the country to enable an alien to reap the profits. On this principle may be builded the proper foundation for a nation’s prosperity.

Are We “Resource Conscious”?

'T'HERE are many evidences that Canadians rapidly are becoming “resource conscious” and ihat they are less inclined than formerly to permit factories to be built up in other countries on the foundation of Canadian raw materials. On this question, R. W. Dalton, senior British Trade Commissioner for Canada, reports:

“There is a tendency now to promote as far as economic conditions will permit (he complete and final manufacture in the Dominion of Canadian raw material. There have been suggestions of embargo on the export of certain key materials, and further artificial methods of preventing the loss of national income through the export of nonmanufactured raw materials may be worked out in the futuie. Such an attitude on the part of Canada, when implemented by the necessary legislation, will provide still further inducement to American and British manufacturers to budd their factories in Canada near the supplies of raw material and thus to employ Canadian workmen and Canadian materials, and add to the investment in Canadian enterprises.”

Growth of Paper Industry

ONE of Canada’s greatest natural resources is, of course, her forest wealth. The pulp and paper industry has advanced, within a decade, with almost incredible leaps and bounds—yet so sanely and so steadily that no charge of mushroom growth can be brought.

Canada’s exports of pulp and paper have grown with the industry. The figures showing the growth of pulp and paper exports added together are as follows:

1912..................... $ 8,975,000 1917 ..................... 46,476,000 1922 ..................... 105,458,295 1923 ..................... 122,554,439

Exports of paper have shown similar growth.

In 1912, they were $3,881,000; in 1917, $26,072,000; in 1922, $69,533,418; and in 1923, $79,567,941.

Pulp exports have been as follows: 1912, $5,094,000; 1917,$20,404,000; 1922, $35,924,877; 1923, $42,986,948.

To

Lead U. 1924

S. In

CANADIAN newsprint mills now have an average productive capacity Qf about 4,000 tons a day—-a figure that could be reached the year round. The average of all the newsprint mills in the United States is barely ten per cent, in excess of this figure—4,400 tons a day.

New machines, to increase output, are being installed in both countries and, considering only machines definitely planned and financed, and in most instances actually under construction, these will permit of additions of about 200 tons a day to the United States’ output of newsprint, and of about 650 tons a day for Canada. Thus, before the end of the present year, Canada definitely will have assumed front rank on this continent in the production of newsprint, the estimated daily output being:

Canada................4,665 tons United States . . .•........4,600 ”

It may be pointed out that the 4,665 tons will be probable actual production, as the capacity of the Canadian mills will be in excess of 5,000 tons a day.

Truly, something about which we may justifiably “keep our tails up!”

. It is conservatively estimated that more than $400,000,000 is invested in the pulpand paper industry in Canada. The latest figures procurable are for 1922. The Dominion Bureau of Statistics has prepared the following graphic table showing the growth in this industry in a period of eleven years, and the amount invested by provinces:

1911 1922 British Columbia None $32,763,965 Ontario........ 17,786,888 133,749,364 Quebec......... 32,590,986 191,514,809 New Brunswick. 2,675,059 16,310,952 Nova Scotia.... 644,000 6,667,234 $53,696,933 $381,006,324

/CANADA is on the threshold of "remarkable developments in the exploitation of her mineral resources. As a most excellent report of the Munes Branch of the Department of Mines, Ottawa, says:

“The importance of mineral resources in the economic structure of a nation has been vastly magnified in modern times, and has given rise to the axiom that coal and iron are the basis of industrial strength and progress. To coal and iron must now be added petroleum. In the possession of these three essentials of modern civilization, the continent of North America stands pre-eminent amongst the world’s geographical areas. Canada, occupying the northern half of North America, shares in the possession of enormous resources of coal, in large resources of low grade iron ores which are already on the verge of successful commercial exploitation, and, it is confidently hoped, in great potential resources in oil.”

The Dominion of Canada is the woild’s principal source of niekel, asbestos and cobalt and has taken her place as an important producer of gold, silver, copper, lead, zinc and a number of the rare metals. Each year sees added new mineral districts of vast potential value. At the beginning of this century the total value of our metallic and non-metallic mineral production was barely $60,000,000, representing the value per capita of $12. The latest procurable figures are for 1922 and the Dominion Bureau of Statistics marks these as a “preliminary estimate.” This table shows the following figures for the annual value of mineral production:

WOO.................. $ 64,420,000

1914 .................. 128,860,000

1919 .................. 176,690,000

1922 .................. 183,630,000

Fisheries and Finance

YAUR fishery production trebled, roughly, from 1900.

to 1918, and since that year has dropped back somewhat, after the war-time peak, both in quantity and monetary value. Official figures show that our fisheries were responsible for the following additions to our national material wealth:

1901.................. $25,737,000

1918.................. 60,000,000

1921 ................. 34,931,000

There are several facts about our financial condition', particularly in regard to the amount of liquid capital available, which are definitely and constructively Optimistic. The most menacing fact in this connection is of course the orgy of extravagance which bas been maintained, not only by Ottawa but by our various provincial and municipal governments. But that is another story, shortly to be told in a series of startling articles in MacLean’s.

At a moment when nervousness was rife and the table 'talk of the Canadian business man was frankly pessimistic, the Hon. W. S. Fielding, Finance Minister, disregarded the advice of those who thought they “knew

better,” went into the Canadian market for a very large refunding loan—and in little more than a week triumphantly came back with more than $200,000,000!

The Financial Post estimates that $152,000,000 is left over from the bonds and dividends distributed and this sum is thus a direct increase in our national liquid wealth.

A surplus of $152,000,000 for investing and spending!

Figures showing the dividend and bond interest payments for 1922 and 1923 are amazing in their .magnitude: 1922 dividends are $117,389,358; bond interest $160,420,496, with a total of $277, -809,854. The 1923 figures are dividends $134,502,365, bond interest $218,104,113, with a total of $352,606,478.

Canada’s wheat c op has a significance of which all the world is aware. Canadian farmers will profit more greatly as a result of our tremendous wheat production, when some of our most important customers recover from the verge of bankruptcy—if not from actual bankruptcy. But the figures of our production—both in regard to yield and value—are distinct sign-posts along the road of prosperity.

In 1913 eur Wheat ctod tótáÜed 23Í,717,000 bushels, valued at $156,402,000; in 192$ this had grown to 399,786,400 bushels, valüéd át $339,410,000. Estimated wheat production for 1923 shows the amazing figure—more than double that of ten years ago—of 479,761,000 bushels, but the estimated value has dropped somewhat, for reasons that are known to everyone, to $321,352,000.

The value of our total agricultural production (crops) for 1913, 1922 and 1923—the latter year, of course, estimated—is:

A PERTINENT NEW YEAR’S QUERY

By BERTON BRALEY

You say your taxes are too high,

But do you vote?

About extravagance you sigh,

But do you vote?

How long, you wail, must we endure This state of things which keeps us poor? How long! I do not know, I’m sure;

But do you vote?

The lights are bad, the streets a mess;

But do you vote?

Your indignation you express,

But do you vote?

You say the bosses rule the show,

That graft is reaching high and low,

And doubtless all you say is so,

But—do you vote?

You growl at rotten politics,

But do you vote?

You howl at bosses and their tricks,

But do you vote?

You say, oh Decent Citizen,

(We’ve heard you, time and time again) “We want things run by Business men!” But—do you vote ?

Unless you do (I wonder, DO you?)

You’ve got just what is coming to you!

From “Forbes”

(Copyright, 1923, NEA Service, Inc.)

Production Value

bushels

1913 ................... 909,426,370 $552,771,500

1922 ............................ 962,616,200

1923 ............................ 899,258,700* *

*The amount of grain-hay is not included here, as at the time this article was written the quantity had not yet been determined ; the 1922 grain-faay crop was valued at more than £20,000,000.

Demand deposits in the banks, savings deposits and money in circulation have all advanced amazingly since 1913, to take our comparative example exactly a decade ago. Demand deposits are shown as follows:

1913 1922 1923

$384,446,046 $531,491,428 $549,706,081

Savings deposits have shown an even greater jump, indicated by the following figures: 1913, $625,803,150; 1922, $1,156,442,453; 1923, $1,141,130,278.

Our circulation has shown a continually healthy “throbbing” and has grown from $119,497,321 in 1913, to $178,623,690 in 1922 and to $185,495,429 in 1923.

Vo/ume of Cmp /oi/menf in Co nodo . /920-/926.

The gross and net earnings of our two railways, the Canadian Pacific and the Canadian National, have shown similar healthy growth. For the ten months ending October 31, 1923, the C. P. R. gross earnings were $150,023,974, compared with $145,578,910 for the corresponding period in 1922. The Canadian National Railways—also for the ten mqnth§_^hew gross earnings of $204,392,115, compared with $185,137,258. For both railways it is forecast that the final net earnings figures for 1923 will show a very marked improvement as compared with 1922, particularly in the case of the Canadian National.

Unemployment Decreases

Y^HART number three (on this page) depicts the fluc'k-J tuations of employment in Canada, as reported to the federal Department of Labor by from five to six thousand employers, who represent between them almost every branch of productive activity save agriculture, the most important of them all. This chart has been prepared by Gilbert E. Jackson, of the Department of Political Science, University of Toronto.

It will be seen that a marked growth has occurred in the volume of employment, which reinforces any conclusion that we may base on the growth in the volume of imports. The condition of 1920, when for many months there was practically no sign of unemployment, and when the ranks of industry were temporarily swollen by workers from the farms, have not, indeed, been duplicated. On the other hand there is no doubt that, for the first time in nearly three years, the productive energies of the country were fully employed during most of 1923.

The dotted line on this chart is a projection of the labor market in 1924. Professor Jackson says that it is not, however, a prophecy. Conditions of employment in 1924 may be better than those indicated on the chart; possibly they may not be so good. What the dotted line does represent is this: If we may speak of the average of the changes in preceding years as in some sense “the normal,” then it is a projection of what conditions of employment will be, if the “normal” seasonal movement occurs in the Spring. By comparison of the published index of the Labor Department, as it appears in the month before us, with the projection plotted here, it should be possible in the spring months to foretell what is the promise of the coming Summer.

Apart altogether from the possible usefulness of the dotted line as a criterion of the future, the chart of past employment conditions bears witness to the same rapid recovery from industrial depression as was also visible in the trend of the volume of trade. All of the charts which accompany this article represent 1923 as a year of solid achievement.

Let us close with a significant statement from the studied and considered announcement of a nationallyknown financier. Sir Vincent Meredith, Bart., president of the Bank of Montreal, in addressing the shareholders a few days ago, said:

“I regard the state of trade in Canada as having improved during the year. Statistical evidence supports this conclusion. Bank clearings, railway receipts,foreign commerce have all increased. Stability of commodity prices has been a favorable factor encouraging confidence and inducing freer buying. The substantial decrease in unemployment, which has virtually reached the zero mark, is an unerring sign of better business.’ ’

After reading the, perhaps, rather dry facts and figures recorded above, don’t you think it is good advice for 1924—and after:

“Let us ‘Keep our tails up!’ ”