J. HERBERT HODGINS October 15 1926


J. HERBERT HODGINS October 15 1926




STABILITY of government has been established; the one prize Canada drew from the grab-bag.”

Thus the Winnipeg Tribune epitomizes Canada’s election aftermath.

We have heard a good deal about stability. The pre-election cry was for a vote which would bring stability and now, with a reasonable degree of unanimity, the press of the country, mirroring public opinion, agrees that the September vote brought the Dominion the much desired political element.

“Business men, Grit and Tory, feel relieved,” says The Financial Post, which adds, “Even the disappointed ones know that more stable conditions are what was needed, needed even more than either a Liberal or Conservative administration was needed.”

Given stability of government, then, what may be expected of business?

There can be no denying that the indecisive vote of 1925 added to the prevalent business hesitation; a hesitation from which we are just now emerging by the sheer force of an international economic upturn which has carried Canada forward, even as the wash of the tide will carry an exhausted swimmer.

“With stability assured, and the uncertainties that followed the elections of last year done away with,” the Toronto Daily Star tell us, “it is now possible for the people of Canada to get down to business and go ahead for the next four years.” And again, “Whatever the adverse influence of a political campaign upon business-—and that which ended on September 14 was inconsiderable—it has ceased to be,” says the business summary of the Bank of Montreal. “The incoming Government has secured a majority sufficient for its purpose—one giving reasonable assurance of stability during the ordinary term of office and a factor favoring continued improvement in trade.”

Politics and Business

JUST what part did business play in winning the election? Well at least it may be said that the Robb budget was a material element. The London Free Press considers the Robb budget “played a big part ... it was a popular budget; it cut taxes and reduced the price of automobiles; people could see where it put money into their pockets.” Then, as the London Advertiser points out, “relief in taxation is beneficial to the individual, but it also has an important bearing upon industry. It is just as essential for manufacturing as for farming, mining, lumbering and fishing that the burden of taxation shall be as light as possible.”

Similarly, The Financial Post, viewing the election result from the spectacles of the average business man sums up: “Other speakers ventured forth with impertinent promises, with meaningless and beclouding technicalities, with hot shot and slander, with all sorts of political tricks, some old, some new. Mr. Robb, almost alone, talked tax reduction, the subject that made Coolidge the most powerful president—at home—in a generation, and gave Mellon—the essence of financial autocracy—the popular goodwill usually accorded only to silver-tongued prophets of the “peepul.” That is what all Canada wanted; assurance of relief from the pressing burden of taxation. Mr. Meighen and his friends declined to promise it. The Liberals’ financial genius did. Is this the secret of the result?”

These views crystallize what has been

written since the campaign, by many editors. Thus it may be accepted that the business slant weighed substantially.

The Business Future

UNCERTAINTIES of politics temporarily removed, what of business prospects?

Basically the Dominion appears in a strong position. As the monthly letter of the Royal Bank of Canada expresses it, “the general course of business has been satisfactory in practically all branches and give much assurance as to the substantial ! soundness of its foundations.” Which ought to cheer our business men, and all individuals who are dependent upon the upturn of general business—-and whojisn’t?

The West particularly appears on the threshold of better days. E. W. Beatty, president of the C.P.R., lately has added his testimony to the reports of greatly increased progress and confidence in western Canada, thus complementing similar confidence expressed by Sir. Fred| erick Williams-Taylor, general manager of the Bank of Montreal.

“More important even than the C.P.R. president’s testimony to the prosperity and buoyant faith of the West,” in the opinion of the Montreal Financial Times, “is his declaration that there has not at j any previous time in Canada been such a widespread demand for effective immij gration measures.” The Financial Times points out that “Mr. Beatty has the distinction of being one of the country’s | few practical economists who upheld the doctrine of immigration all through the bewildered and puzzled years immediately j following the close of the war. In those ! days the average Canadian, contemplating a world torn asunder by seemingly inevitable and ineradicable racial hatred, was too ready to conclude that the only safety for his country lay in keeping out of it all but those of the racial stocks with ¡ which it was already chiefly peopled; and, at the same time, the average Canadian worker, finding in the post war disorganization of his country all too little oppor( tunity of employment, was apt to see in j every immigrant merely a potential competitor for the existing jobs, rather than a creator of new and wider industrial activity. Commonsense appears to have at last prevailed over both of these errors; and better still, the conditions which make for satisfactory immigration, namely a well-based and well-distributed prosperity in the present and a quiet confidence in the future, are once again in evidence in almost every part of Canada.”

Factors ol Progress

WHAT are the factors making for actual business progress?

To begin with there is the crop. Canada will harvest a 400,000,000 wheat crop which is a reduction of less than 12,000,[ 000 bushels from last year. Such a crop, at anything like the prices expected, should j rehabilitate the agrarian community. Trade, East and West, is opening brilliantly, with every expectation that the closing quarter of the year will establish the healthiest record of recent years. Railroad traffic reflects the sounder situation and the new buying power which is developing. For instance, car loadings to September 2nd, register 2,026,915, an increase of twelve per cent, over the figures for the similar period of 1925. As to passenger traffic, the gross revenue returns of both of our Canadian roads are j some indicación, but a more immediate

indication is to be found, daily, as the trans-Canada trains load in Montreal. By chance, I watched these trains on two recent nights. I was amazed at the volume of passenger business rolling up. There seemed an unending stream of men, women, and children pulling out for the West; and this particular traffic had no relation to the harvest movement, for which sufficient men were not available this year, though the railroads issued plea after plea for more help.

Then there is the matter of our foreign trade, which continues to expand!

At the end of July our twelve month’s exports totalled $1,343,900,000,an increase of 83 per cent. In the same period our imports of $969,000,000 represented an increase of 18 per cent. In other words we have a five per cent, more favorable balance this year.

Another significant index exists in our lessened business mortality. Defaulted liabilities for the first seven months, $15,546,000, were actually upwards of three million less than in 1925, and greatly below those of the three preceding years. Bank note circulation and clearings both point fair. Pulp and paper mills are working to 97 per cent, capacity and mineral production is holding up well.

What of Ottawa?

THIS, then, in a few words, pictures the general business situation. What will Ottawa do with it?

The incoming Premier “has a great opportunity,” in the mind of the Hamilton Herald. “Mr. King will now have a free hand, he will be free to frame his

policies with a view solely to what he believes to be the welfare of the whole country.” Or as the Montreal Gazette expresses it. “They have given Mr. King his opportunity; it is for him to make the most of it for Canada.”

Accepting the same basis, Bernard K. Sandwell, F.R.S.C., offers Mr. King interesting suggestions. “Relieved from the necessity for spectacular interference with the tariff for the purchase of agricultural votes, Mr. King can, and we believe will,” says Mr. Sandwell, “leave that delicate economic implement to be readjusted only on the suggestions of his Tariff Commission and only for wellestablished reasons. He ca,n, and we believe will, establish an aggressive and well co-ordinated immigration policy. He can, in certain directions, pursue a larger measure of economy in government expenditure, although in this respect his hands are partly tied by pledges to the more extravagant elements of our population. He can diminish the unreasonably heavy burden of taxation upon invested capital—which results chiefly in increasing the cost of goods and services to the consumer and partly in preventing capital from going where it is needed. He can leave the transportation system of this country in the hands of its very competent administrators, subject to the regulation of the Railway Commission and free from all political interference.

“If Mr. King does these things, to the fullest extent of his powers, we imagine that he may reasonably count upon a very considerable further tenancy of the premiership. The country is all set for a period of prosperity.”