-~

, .

BANKING .. 1.V!) COJlat/weF

317

24~25 GEORGE V.

CHAP. 43

An Act, to incOl'llOrate the Bank of Canada

r Assented to 8rd Juli], 1.984.1 \i\THERI!iAS it is d~sirabJc to establish a central bank in Canada Preamble.

to rcaulnto credit and currency III the best mterests of the ecollolllie life of the nation, to control and protect the external value o~ the national monetary unit and to mitigate by its influence fluctuations in the gonenll level of pt'odudicm, t mdc, priccs and crrploymcnt, so faJ' 11$ may be possible within the :3eope of moneta]'.'>' ac 101". and gC'lwl'tllly to promote the economic and finaneinl welfare of (h. Dominion: Th('l'nfore, His lVIajcsty, b? find with the advice and consent of the Senatc find House of Commons of Canada, enacts as follows: __

SHOHT 'l'I1'U:

1. This Act may be eiled n.' tho llan}: 0/ Canad« Act. Short titi~.

INTI.;nPHET.\TION

2. In this Aet unless the rontext othel'wi;;e l'cquil'e,~:--._ Deilnitionu.

(a) ., Bonn) of Dil·('doJ'.~" or "Bonnl" means the Board of "Honrd of

Direetm's of the Bank of Canada; Dil'eetors."

(b) "ehnrtCl'('(1 hank" means a bank to which the Bank Act, Chartered

app ;;(,8; Bank."

(C) "Dit'pctor" means n llH'lllbcr of the Board of Dircetors "lJireetor." other than the Governor 01' the Deputy Governor or the

member Hding in virtue of the authority con ferrcd by $uhscrtion two of scctionfive of this Act; 193G, c. 22, s. 2.

(d) "Dominion lIoj:f'$" rncnns nO{C.5 payable to bearer on "Dominion drmand, is:-nwrl and otltstnnrlinp:, which imnwdintely prior notes."

to the dny Oil which tile Bauk of Canada was :H1thorized to ('oB1ll1(mc(. bllsjne~1s con,,(ilu(er/ It direct liability of the Dominion of Canada; 19:W. c. 22. i;. 2.

(0) "Con'rnor ,. means the Gov('I'IlOI' oj the Bank of Canada "0(1"('1'1101'." or the person :Icling for him pursuant to the provisions of

this Ae-tj 1936, c. 22. s. 2.

(f) "nJinister" means the Ministcr of Finance; "~Iiniste!'."

(0) (t notes" means notes of the Bank of Canada pavablo to "Xotes."

hearcr on demand and intended for circulation, 'T' .

. . In' r« I' Canada- I ,eCCl\'cr

(h) "nce-cIVCI' Genl'l'aJ " mean" tIC C(,Cl\'('1' uCIlCl'a 0/ .ana a; Gelleral."

(n "f he Bank II means til!' Bnnk of Canada; "The Bank."

(j) "Treasurv Board 'I means thc T"c!l$ul'v Board as ('onstituted ''Treasllry

by the Dcpart.nlf'nt of Financc and Treasury Board Act. HOIll'd."

31$

STANDIXG COMM1TTBl(

r;)! In \r Juu i' i.,'1. '1'[

! ,1! In an.I the [)(

:\

l'lw Hank (':(II)$~~tHtt'J.

a. (J j Thoro shall he l'~!nhli~h('d H bunk to Iw l'ullrd Ow Btl nk of C'nlladn.

(2) Tltp Bank j" find ~hnll cont inuo In he a hody polit ic nnd <"n'nlle, wau, c. 22, s, a.

fie) n.- 1 In' f au f hcn'li\' t [ UlC' OPjll:(l\'ii

H. (l'l Governor si of seven "I," find ,\sf{stn Go\'Cl'llOl' in

(21 'I'll ( OOVCI'IlOl' .. ;J) OOHlTlCH' in the dil'f:ctc,l'S

falEx( Govl'mol', D subjeet to tl salarlc::; tl;, Ii rel11UIWI'H lion by r(>fC'l'('J)ce

(4) '1'])1' Depl.ity GO\'( eligible for J'!

(5) 'rlJe Governor SIHi behavioul',

9. (J) T Council sh:'d1 terms of thrc'c that thc,]'(' shn director holdii fi.lbs('ction shn day of Fcbl'llll which he \\'::5 '

(2) In the shall, witli tlJ qualifier] ])('1'."0: c. J2, s, 5,

(3) III th, shall hu\·e· on:

(4) The eli be eJigible for J

10. 0) Ti tions: hut. no p0 officer orc'mnlo as a din'cior' w

Bl)rly pol~ti(' at.;[

l'tirpor,i tt,

Bl'alil'h(~s aad

,t II i Tho hl'nd ollico of the Bank shall he in the ('it~· of Ottawa. (2) 'I'h!, Bank 1lI:1~' ('stahlish hl'anchc;; aud Hg()!l('i(>.~ find appoint ng\'llt,.; in Callada ~ll)fl nl;1~' also, with ibp nppl'o\'nl of tilt, GO\'(,l'l1O)' in Council, cst ahlisl, hl'nn('lll''; awl nppnint acents olsewhoi-o than in Canada,

S. (t i The Hunk shall h(' under tho mllnngemrnt of :1 130:11'<1 of Dirt'eiol's ('()mp()~ed of a G(w('I'tlOI', n J)epllt~· (10\'(:1'1101' and eleven dirl'dol'~ appointed in tH'I'ordnnce with the provisions of this Act. Tln'l'e mav abo II(' an A,;si~t:1nt Drjlllty GO\'0]'l\Ol' who shall not as 511e1. b" n mcmbo» of the Hoard. W38. c. 42. s. :~.

(2) Tn :ldditioll to til<' 1\Jembcrs of thc Bnard as cOIl§titutc(/ by subi'cctiun one of lbif' :<cC'!i(lll, tbe Dc'pllty Minister of Finnnce or. in e:1;';(' of his absence 01' incnnaeilv at anv time, such other officer of the Dl'lJal'!ment of Finance ~., t1;e l\Iini~jcl' may nominate for the t im« b(,itl~. shnll be, I\\' virtue of his office or cd such nomination, n~ the ease llln~' he, a lllr'llll>C'r of t ho Board, but shall not have the right to vote.

6, (l) Tho GO\'('1'1101' and Deputy Governor shall be men of prnvon flnnneinl cxpl'l'icn('{' and each shall devote the whole of his tinlL' to tho duties of his oflice.

(2) No ]1(,I':<on shnll hold offic« as Go\'e1'l101' or Deputy Governor 0]' .. \:,:~i"iallt Depllt~· GO\'('1'1101', who.--

fa) is not a Brit ish ;';ilh,icct: 01'

(b) is a member of ('ithel' House of Parliament 01' of a Provincial Legislatul'e: or

(c) is t'lllployrd in any capacitv in the public service of Canada 01' of any PI'O\'illCC of Canada 01' holds any office or position for which anv salary 01' other remuneration is payable out of publie l1JOlJ("y~: OJ'

(el) is a director. officer or employee of any other bank or fiIlHlleial institution or has an interest as a shareholder in any other bank or finnucinl instituiion ; 01' 0936, c. 22, 5. 5,) , 'c) hns l'eaehr-d the age of seventv-flvo years.

B,:"ard of d~rl't't(!rs.

J)p,~u:r ~bllistl;l' to h,· lHUllhc'1' of Ik",rd.

Governor lind f),'puly GO\·t~nH}J'.

l"'!SOtis d~~lua;itit-:,d ffJf appointments.

Powo rs of Governor.

~!AN',\GF.:l\U~Nl'

s , (1) The GO\'C'l'Ilor of the Bank shall be the chief executive ofheel' and shall on behalf of the Board have the dircction and control of the husill("'s of tht' Bank with authority to act in connection with the condu(,t of the JllI"ines~ 'Of the Bank j~ z:]l matters which are not by this Art 01' by the by-la",:,; ui the Bank ':jlceifically reserved to be done b~' the Board or by the Executive Committee. 1938, c. 42, s. '1.

l)utic~ of Deput}' GOY~l'nor~.

(2) The Deput~· GoVCl'llOI' and the Assistant Deputy Governor shall IWI'fC!'lll such duties as arc n~"ign0(1 by the Board.

iwn, oint :'1101' 1 in

! of Wtl \ct.

as

by 01" . of

the

on, the

of hls

lor

ial

da on ut

or ly

:0 D1 :h It o )

"J

\vhntcYt"r i. :n::.;t ~'~"Lnh:l. r!it

(\~t,~rl' i~-c :t I! t1 )i.' P'-' ~\-i- r-. ~i ~ j ~.l n 1; \

..

i ·t} in t}jfo (\.!. [i!!~i. !;1-'( ~,~

r)i'p!'~\' (;"\'[ nit!!' l,i rj;j~i! i , r J );::-j"'~f-n-:'"~ ~.l:al: i\:ItLf1rl;J;(' t hr: ~:'\<~rl,~~f-;ty of

~\~::.:\~~-ant })\" 1-;:'\" (_I(~\'tT;;i;r ft. , ~, 11-\ - ), ...... li .-- n-.']r f t o ft;_j-;-~'l'fHH'

act a~- {-!If ~:_~"~:I'!·tunr \~-~, !!I' ~ !L(- iJ'_-H;"~' 'h'!j[ ~;/:,':,;;;;'I-'~f,'i!''''; ~:~~~,_", !i/lt-~i-j-:~l'i I\n.~'(! ;\/,\t~_}:)~~~:f~~1Y

aurhorh v til fLit ~L"'"_ C;I_J'-;r-:'r)<~' ;'1'1' ~i H-,." f~Jl!· !'_HHlth without

t hi" 'l~-Pll:il'P{ll of ~ \', {Ii-"'f-l"r, .,11 {

I. I\.. (! t - ,>, i "'-, - __ ---" .. -", ';

8. i 1'1 The Co',"1':" ,,', , .. {;(\'.,.. awl ,\ '.<je! unt lknllt\' '/""'''1'" d

Governor :-.,-!inll ('neJi 1 h.- H;qi;JiL~Jc fL" L~ >;?;~~'-[{-r PI'!i\'jdpd f(l1' H tcrJ'n "ih, v .

of seven \'('ill'''; 01' in U.." c,·' :~" (.,i\" rnor. Dcnutv Governor

and '\"";'''1'11'' 1 ),,' ,"'" {"'.,'" .: ',' ,'.' ' .. ,,]", ..•...• ' ;, ,(,· .... '1'.' •. ·.1 I ,'I." 1 .. h ('.

0'1. -\ .. ,_---,1_,- -\ 4, . _0- -.: i "',' _.1 - " __ : > , _ _ __ _ _

Gonrnorin Counci] nr.v ,i, "'1; .. ..r.

(21 Tho first Gf!".n,'l 1), l' Governor ~hnll hr' ttl . Governor ill Couwi! ;,nd 'L. ',' the directors wit]. Ul(' :1)'1'1""::"

(;. ':"'L"; :H! ,\,~i.,q ant lJc/,uly·\pr."';" UWIjI ';-,"j.,. , .. l'il] b(, fixe!l hv the ",' ll,·"t

.. , ~- - - • '-;, - (i{H·{-'riH.ll'

:"':1li'nr .. dH1i1 he IIlndi' by [i"!'\1iY,,;,d

l;"\'u·r:,.r ill Council. A"':~""JlI,

(3', FXf'('pt .'", ""0\' ,." x: : subsection tllf; .,-:,,;,II·ies .

GOVerll·Ol' 'j,)(,Pld ~:. dr:\'("',"("· " hl \', ',' '.\" . T)(')ilh' COH'l'llOI' slwll. s:ubjec't t;) Olt· ·~;'l'l':".\';.J";'i: ,j~'(. 'C;,,·.':n,~;-,:':n ('c;;l'!wil. rr-ceivo SHe'll salaries as the din,: or, fn::: ,::::-. '" 'i,n'- .ii'tel'lllill{', b;lt no such rcmuuerntion sLall I 'c' in 1li(- f":',n ,:, comnnssron f!l' be cOlllputed

by l'ef(-renee tn t liP jlll'nll!>:' f,r ,. .-of ; b· Bank.

('11 The Governor t:l' .:

Deputy Gon'Il.,'q' "h~dl on 'L" eJip;ible for l'C'-nl'pointlllf'llt.

(5) '1'];\' fic'Yl'l'nor, D,i";!,Y r;"'·'Tl;.;,!, and Assist aut Denulv C"",illi.)11

G J'J I I ' ! 1 "1 of_If tunH'{l_

'O\'f'l'llOl' s ]:\. e!w.! ,il,jn ,,;]1('(' } ,1' : j,(' :liol'f';;ai( term (mint: gOOf

behaviour

~l~ C;(}y(rnnr and the Assistant H'-·~ili);lOjUt-· rx:,;r:; (I;' their klT1F of Omte he l!'.'I,L,

9., (] )Th('~:Iil,!\"j':!"Y:,th :1.", n:\i'l:",,:al 1)1, the G(!\'Cr~lOl' in 1J;ld{)r~, Council shall a,~ 01 tlli' nl'~l «(;,r o: :'Ilarc/1 11l eacn year appoint for

terms. of tlll'('C' yf':ll'''; (':11':; ;! ,;,dlk: • .':,: number of directors to provide

that there shnl] br' C!c\'C!i dll't'('h'!'-: Provided. however, that evcrv

director holrlillf.!: o:n, .. :l! ;h(, ,blt' 01 the coininc into force of this

s uhscction :::kdl continuo :!' n di:'uwr lip to ana including Ole last

day of February ill the ~'(':l!' for \l,,' expiration of the term of office fOl'

whicl, he \\'IiS elected or appointed, 1938, c. 42, s. 5,

(2) In t!Jf' ('Yen! of :1 \':It':''IH'Y runonzst ill(' directors the l\linl"t('r VUta:l;Y, shall. ~rith the :I!'1"l'd\':d PI th~' (;oy(rnol' in Council, appoint a qualified person to hold (Itll(·c for the remainder of the term, ]938,

(,,42. ;0, 5,

(3) In the 1!':ln~:H',lOll ,.;' the husines, of the Bank each director Votes. shall kl\'e one YO(C. 1\l38. c. '12. s 5.

i,n The dircei OI'S ,,!til II (Ill the oxni rn (jon of their terms of office -'by be re-

be eligible foJ' re-appointment, H)38, r', 42, s. 5, apnoin ted.

10. (I) Tho din'rtol',~ shall he ~f'kderl from diversified occuna- :'!"ledjon of tions: but no IWI'HIIl shall Ill' .. lil.dh/r for appointment who is n director. directors. officer 0]' cmplovoe of a dlftl'i('l'rd bank, and nnv person appointed

as a director who is :1 shareholder of n chartered hank shal] divest

319

STANDI,YO C()M.lflTTHk'

lnlllH'il of ()\\'IH'J'"hin Ill' Iii,· .. linn'" within thl'rc moo ill"; oi ihc date ilf hi" 1l1l!!(.ilHlllCllt 'and ~hall !lot tllPl'(';lftrr during the fl'nn of' his OH"T b\';· ;il] ildl'h·'! .• i'hl' direr:!\' 01' 111dil'C'('th< n.; n silal'l'llOldel'

'" '>I"" i 1-, -I' I !j'')':' , .j') " t'; ,

~n a t ~\t.l'l ,·\.tll\, .0_-1.)(', t. __ ~ __ . 1.

I:?\ :\n I";',-Oll :;Lall Iii; nppoiHiP,j, or shall continue to hold oflioe n"" a dirt"('t~l]' \\"bo:--

j" Hill n Bl'itj"h ~iJhi('!'t ordin:uitv resident ill Cnnndn: or

b UlIl'h',,'\,d ill any 'e:lp;!I'ilY ill dH' J111blie ,,(']'\"i('(' of Canada (11' (ll anv />1'0\']111'[' of (':\lInd:), (II' h()ld~ nn: ofJir'c' or p08ition {Ol' wbieh any ~:llary (11' other l'I'lIltllwJ'Htiun is pavabl« out of public 1ll00H'Y~; provided, hm\'('\"('r, t hnt n director may pf'l'i'ol'ln (('lltpol'nry :;('1'\'i('(':, for tho Gon:rnlllent of Canada or any province for whicl: h{' mnv be reimbursed actual living nnd It't\\'dling expenses: or

has )'c:ll'lied till' ngr of sc\'cnty-fh'e yenrs. ]938, e. 42, s. 6,

Ht-UH)\'td it' Pf-Pit~lL('Ht;~· i!h .• ';lp'i~ ;,"Hath.i

I;)) If any din'e/or, in tIl(' opinion of til(' Board, becomes pl'l'I11!lnvnt ly inr'n pneil It trd, Ill' Ill:!," be' removed ftoll)· office bv resolutioll llf till' BOllrd appro\'f'd by the Governor in Council. 1938, e. ·12, s, O.

11. The din'i.'!ol's shall ho cntitled to roccivo for attendance at director,,' meeting". and oxccutiv« ('olmnitte(' Ilwetings, such fees as mar Ill' fixed by tllr by-laws of tho Bunk. but the aggregate amount Ilf tIll' fpc,; pair] to all dh'prtors. C'xeil1:<iv(' of expenses, shall not exceed t\V(,llty thousand dollars in any yen!'. 1938, c. 42, s, 7.

] 2. The 00\'('1'n01' shall be Chnirman of the Board of Directors. lnan, c. 22, s. 8.

!)~!T'~':.rl~·-S~ ~t'Oc:-,.

EXIXTTiVE CO;\L\IITTEE

C"btitHtiL>l, 13, (1) Thcn' shall be an Exccutivo Committee of thc Board, 0/ Ex,':util'o consist ing of t h!' GOVcl'I1or, the Depu t~· (;0\'('l'1101' and one director tHlll!lH!l'<·. selected by the Board,

DC'f:'n!r )Bn~~tt'r to Ii(' tnf'tuhl'r {':- t;Xl~,·tlt ivo {·~,.tnmit! t;('.

Hatf' of dii'i'nH!H a:.d redis .. "'-'''Ht.

(2) In additiqn to the ::\[C'll1bcl's of the Exccutive Committee as consti I U[(,t! b~' sub;e('f ion one of Ihis section, the Deputy Minister of Fiw1lll'c 01" ill cnse of his t\ bsenco Or ineapacit.y at any time, such other ofllccr of tile Departnwnt of Finance as the l'dinistcr may

norninnt.- f01' the t imu being shnll be hv virtue of his office 01' of such nomination, as the ease may be, a member of the Executive Committee, but shall not have tll" right to vote,

j:jl The Ex('('uii\'e CommiUee si.all be competent to deal with nnv mati!')' wit hin the competence of the Board but everv decision of the: eOlllll1ittc(' shall be SUbmitted to the Board at its next meeting.

(41 Except when the Board is in session the Executive Committee shall deknninc the minimulll mtes at which the Bank is prepared to discount 01' l'ediseot1!lt bill" or to make ndVallteS and the Bank shall lit a ll t.imes make public the rates at which it is prepared to discount 01' I'uliscmmt bills or tomake Ild\'ances,

(5) The EwcntiYe Committee shall keep full minutes of its proceedings, which shall be sdbmitted to the BOUl'd at its next meeting.

14" (J) The Governr.o, or in the event of his absence or incapacity the DqlUty Governor .mly, shill! have power to veto any action or decision of the B(>~d'd of Directors or of the Executive Committee,

Gon:rnor·,s '·t"to.

"

and jf til as tho ('I wl'jtinge to lhe~ G 1 naoJ c. :

(2) inform til question, CoullciL

I

15. I emp]o:"('1/ neces:5f<ry.

(2) I who at th, the Civil shall be a receiving ii

(3) A: of this sec Chill8C1'vi, Statutes of provisions , one year a during sue) SupCl:anllua contriblitp j of subseetio the date of employee hi Act shall be of the said \' by reason ~f said benefit:" of the Bank

(4) Vr contributor t mny estnblis

(i)

Supcram his heco scheme I' veil:' frol shall firs shall be Bank: OJ

(ii) '"aid Sup, in the Ci: the purr» such SCI'\, Act. Tl«

; of tht' dute , term of his I slult't'lw!dot'

;l1ln.ra; or

\' Ill' Canada e 01' position Ivnble out of tt'l'ctor may t of Carmela used actual

c. 42, s. 6. 'd, becomes J office by unoil. 1938,

tendance at uch fees as nte amount

not. exceed

[ Directors,

the Board, 1C director

nmittee as ifjnister of Lime, such ister may 01' of such Executive

•

deal with !cclslon of

meeting.

:ommittec epnred to ank shall

discount

es of its meeting,

capacity ictiorr Or mmittee,

•

and if (hi" yetn PC'sel' lw ('x!l'('iscd, !ll(' GO\'t'1'1l01' 01' Depllty Go\'crnpr, To he' as t,lw ease muv LJr', fChall \\'Hhin ~t'n'n r!l1\'S inform tlw ;\[jJ]j"t(,I' in :;qbmtttt'dto

.. t' . . '} , , ' . I "I \ I ' ,', I II I ' I t, ,,\ "I '1<11'

WI'I.lllg 01 t \(' ('JI'('Ull}"UlIl('PS nIh t If' .\lIllst('r smu ~lt.mllt t l(' veto i'd',)JlIl('11.

to thp (tow'mol' in COlll)cil who mnv conflrm or disallow tho veto,

I03G, e, 22. s, 9. .

(2) Any dil'trio!' 01' 111('mb!'I' of t ho Exe('nUw COll1rnitteemH~' \'H'\\, of inform till' ,\Jinbte!' in \l'l'itilH; of hi" view of Ow lletinn 01' decision in d""'('101' or qucstion, ",hieh \'ie\\' shall also be tl'an$lniUed to the Govcl'nor ill :lil'~I"hl'l'of Council. Hl3G. c. 22, s. 9, Exccuti\'c.

B.\XK STAFF

15. i 1) Such ot hel' oflicers, c]el'l;" and rrnployPt's may be Oilker;; (HId cmpJtr"c'd as in till' opinion of the EX(1eUli\'c COll1mittrc may be t'llll'l"reeij, n£!ceSsal'Y.

(2) In the CflSC of otIiC'el's, clerks and t'mployees of the Bank Sal;lries, who at the date of appointment \\'('rt' ofliccrs. clerks 01' employees of

the Civil Se)'vice of Cnnada, Hl(' salaries to be paid by tho Bank

shall be at l·ates not less than 1 hc' rates which sueh pcrsons were receiving in the Civil SCl'vi('C',

(3) Any otTIrcl', clerk 01' ('lllploycl' mentioned in SUbsection two COlJtl'iI~lJto,. of this section who was a contributor undu' the provisions of the :IIldtll' ~,jPcr.

C· 'l S' . o . 1 I 'f. 'I I)' ",llluabon

' WI, , ill'V1CO 01lprranllllntwIi .: ct, (' wIlt('!' twenty-.oUl' 01 t lC \C'\'I~t~(J Act may

St,atutes of Canuda, J 927. ma v continuc as a cOlltl'il.H1to]' undel' tho continuo f

., ftl .. ~ '. \ .. 'J '1' )!"I'IIl~lltsor

Pl'OVlSlOnS 0 . ie sal\! '- Upel'UnlllJarlOJ] .' rr ror a P('l'loo: not excecc mg "Il~' .I'e"I>'.

one YCUl' aftcr tho dntc of his npnoint)1)rnt hv tile Bank. and shnl] B,,"l\ to

durin g such perior! cont in,"" .1";. ;·o~ t ci?" doni '. o tho C'i ,B S"',:iro fi':.' :;:~:,~~t SUPCl'lll1111W,tlOl1 Fund ann l!ii.' Hanl{ shall Gtlrlng the saId penoel

Cont)'il)lite to the said Y,'llnd " ,'1'1,',-' ~ln'('l"'j't ';;"lh;""t tn ,),(' '1rl'1\'j';:j'(11'" ..\,jjl/"tment

'.' "". 1', ". '. ", .... :., ": ...• '~'" I - ".- "" atcnd

of subsectIOn four 01 tillS ""'('I ion, fir lht' rxp;l'atwn OJ one ?C'IlI' atter {of rear,

the date of the appointment by tIll" Bank of :1l1'" 81:("]) offirC'J', rl('t'k or "qbjcd.tQ employee his hClJefit~ undpl' the pro\'1"io:1" of ,he 58),; SllPfrannuation l'i~,I,lt';(~I~ Act, shall be ealeulatrd and (lPtrnninhl ti~ of l (Ii th(. ('x;lil'ation <.l •• , ,

of the snid YCfIl' a~ !f he ha;1 nt !hnr. tim~ ."(::11',": fr~'l!) tl:.(' Cj\'ij'S(':~\'ice

by reason of ahohtwll of his 011]('(·. ;n Wille!; (':Fe ::'f' '.'1:,1',';;n:':'l1t (1! the

8nid benrfits "hall bl' deferT(")lmiI ~tlch til):r :15 :k k:1WS :i;e 5f'lTice

of the Bunk.

(4) Upon the !'nid o 11k ['1'. or ,.,.;.;~~~'(:~~~in:, ~ ~~~lo~f

contributor to 01' pal'tirip:1Jll in :1'1:, pt';:~;m: ""'" "'" B".lk When

m:tY,establish he may elect eit.her- h, b~("me8

('1."n:ribHtor

(i) to ha\"e hi" holt"l;'" 1l:1'](~ ]'?:-,';::lc:::' ,:;: :hf' s:-,id ;" ll~",k

Superannuation Art en k'nlt: tl\; lied ,~.: ..... :::::.~ :;5 :;: :;,t' "'::1>: of }:~n,~lon

11)'<: 1'''eOl111'1)(r o "t"l'j'!')"h'l"w ••.. ",. ',<,-' ":''''''',' :.' ', "'P;;;"]J ':,~.4~r,

'~.'c., ,'" n < .. , ,t, , .. ',<. .• : .L .... , :(" .• t. ),,'l,L.S

"ch('lnl' wIdell the n'1l1k mnv ,";;'" .... ". ",\":_.,,:..,,, of ,me ('.,!eulHled nt

)'(,11:' from the dM(: of t: ':q~;·,~:i:1::;':·:·: ,~'; ~,:.,':'~"~;,i-:'~'~~!;i(';;c~:(~rl;~,t~,~;Li!

shall first occur in which (:1:'( : Y::::,,!1' :':' ::',\ :""id bcnc'Rt8:"'nlt/"ibutor

~~~tb~,:leI"TCd "ntil such ii,,,,, c" L, ','.ow, 'he' ",,.yi,·c· of the f:~".:';

(ii ) to waive his right ;0 til]\' p<1\';11rn, ('f bCl)c'iit under the 'Yai\'erof

'I c, . .. \ ' I .. '. . ) , . -l f . rich ts under

falC ,:>llpCl'annnatlClll .: f'i an. in lr:M cast' nis peTlC>(. 0 servien Sllpptannua-

in the Civil Service sha]] he' COllntul :1:' servico with the Bank for t ion Ad. the purposes of the 13:1nk'" ]Wni'i"ll :'l'hplll(' to the extent that Prr,iod in such sPITier would h.'l\'(' ('olll1ted und!'!, the said Superannuation ~lVlJ. , to Act. The GoVC'rnol' ill COllilt'il !lnd the Bank mny enter into an b:~;;~;ted.

321

;\g'!'clmwnt iis'tO ;UWH1ot In bt' I~a H.1 tu l\;'l\knn :l....:~~Hn!ptit,1i "I Iqhdit~"

P;trOu'ut.

lIgn'I'lIit'lit it,; III !Ii!' ;l111!lUnt. to he paid in rhl' Ilauk with I'Cfpfrl)C(? Iu till' a~~lInlptl')n hy tlte Hank of linhilily uudor its pension "e1I1I1W witl! 1'('''1'1'('( in the ~nid p!'l'iod of H'I'\'ice :n t!Jp Civil :-i('("\'i('p. Thl' :\1I1lJ",!r'1' 111:1)' 1))1,\' I Ill' amoulJt agreed upon out of nlly Illl:ll'propl:iatl'd llilill(',\'S in tlie Cunsolidated Revenue Fund, whie'I! sha ll he· )'('1:111'11,·" as n jJnyllH'llt: Irom the ,.,aid Slll)(,l'nnnlln~ t iuu Fund, nnd l lu: Balik sha]] pny the said amount into its Pen-ion Fund.

I:» Th« CP\'('I'nOI' in Counoil mnv make such rogulution» as mav bl' ,/t'I'IlIPd n(','ps~nl'." tn gh'l' ('/'feC'{ in UIP pI'ovisiotls of subsections ! 1m'!' and Iour of this H'C! ion,

(U) The BOHl'd mav hy hv-luw e"tnblislt a pension fund fol' the nflin'\'s, dl')'k" and ('lllJlln~'C(,B of Ihe Bank nnd t heir dopenrlents, ~lIld mn v pOllll'iblltt· In il ou I or Ihe funds of the Bank, and such pension 'fllncl shall h(, ill\'('~tf'd in securities in whieh a trust eOlnpnllY mnv invest under Ole TI'I1:-:1 Cnlllpnni(\~ Act,

16. EYel'Y dirl'eiol', ullkr'I', clr-rk find !'ll1plnycr of the Bank shall h\'l'ol'(' (,lltl'I'ing' upon his dlllil'o' take hefol'P a ,Justice of the Pracc or n Cnrnllli~"inl)(>l' 1'(1/' r:d.:illg' nllidn\'H". an ont h of fidelity and secrecy in (Jw Iorm Ill'<'S(')'ihcd in SdH'dule A to tllis Ad,

Pension Iuud,

Oath of d:!"Pl'!()1'3 n n.l MatI'.

,'.\ PIT\!. .vxn :-ll!.\HEi'o

('"pitaL ]7. (I) The capital of lite Bank shnll ho five million dollars hilt

mnv be illC'I'I'Hsl'd from time to time pursuant to a resolution passed hy I he Board ofDil'('(dol'~ and n pprovod . b~' 1 he Governor in Council and lrv the Pnrlinment of Cunndn, 1938, c. 42, s, 8.

Shares, (2) The ('apilnl shall be divided into one hundred thousand

sharl'~ of tho Pili' value of fifty dollars each, which "lIn11 be issued to the Minj,~tel' to be held bv him on hchalf of the Dominion of Canada,

1 n;)8, c. 42, s. 8, '

~eKi~t?rl'd,. (;~) The ,,11:1],(,1' issurxl to tho Minister shall be registowl by the ;ll~I~I!(:U1ster,q Bank in hi.'; name ill the books of the Bank ~IC Ottaw». 19:38, (" 42,;,;,8,

Ex"halle;e 17,\, (l ) The Minister "hall, (1", of thc date of the eoming into

"j',;hal'(>s, Iorco of this subsection, ('x('hange OIlO hundred thousand Class (, 13"

"lime" or the Bank out or the (;nr hundrcd and two thousand Class " B " shares of the Bank tht'll lipId bv him Ior one hundred thousand shares of tltC' capital of til(> Bank !lu'thol'ized to heisslled by section ;"('\'(,ll(el'lI of t liis Act and the ,,:lid one hundred thousand Class It B "

~hal'l''' of [Itt' Ballk so l'x"llangc,l ",;,,,11 forthwith be cancelled. 1938, c ~!:!, s. 9,

(2) 'I'll!' Bank shall on the dnle of the coming into force of this ;;:ub~!'('tlnn ]lny [0 end I holder of Class "A" sharos of the Bank the sum of flfh'-ninc dollars anr! twenty cent for oaeh Class "A" share rrgi~lf'l'!'d j'n hi,., name at til!' rlnst' o'r IJllf'inf!:'s on the fifteenth rlav of

,hily. 10:38, to.(crllwl' with t!lf' amount of dividends accrued to the rlato of the coming into fOl'ce of this sllb~cetion and all Class HA" sharr-s of tho Bank shn ll \)p deemed 10 be eancelled as of the date of the coming into force of this subsection, 1938, e. 42, s. 9,

(3'1 The Minister "hall ns of the date of the coming into foree of this subsection reimburse the Bank the amount by which payments mark by the Bank to the holder;.; of Class "j\" shnl'()S, ('xcluding any nmount paid by way of dividend. exceed the par value of such shares and such J'f'imblll';oellh'llt shall be effected by surrendering to the Bank

Pl'j"t, to be !laid I-or th!'~ ''-At, sh.uos.

2\!illister to reirnhu rso the Bank,

for 1\fj

dol

in

tWIJ

sub the hUll l\fi!

(.

1

7S02&

mk with r\'f\'\,('rtce ti!lrkr its !Wu"lon 'V it" ;:'1 t!tn Civil c!;I'N·d upnn ont of \t RC\'('IHW Fund, fait! SupeTann\l:\~

amount into its

'j,;nlntion;; as mav n,.: of "'llh:<cl'tiO!lH

,ion Iuud for the il(·il' depel1rlents, Bank, and such 11 trust company

If the Bank shall , of th e Peace or 'lity and scercey

illion dollars but esolution passed ['1'1101' in Council

ndred thousand in II bo issued to nion of Canada,

~gii'tCl'cd by the 'tsss. e. '12, ;s. S.

he cnminz into mr! CIa:',,' ({ 13 " thousand Class ndrcr] thOlc;-;[tnd -ucd bv section md cLss "B " mrcIlcd. 1 !J38,

;0 fol'cc of this

the Bank the lass "A" share ftccnth dav of u.crued to' the all Class "A" of the date of . 9.

iT into force of iich payments excluding any of such shares ~ to the Bank

tOl' ('ancelll\tion t wo t housaml of the Clfl8H Ii B " shm'os }]('III by the l\'liU\st('I' haying the IIggl'egi\le ~jl1!' value of one i'Ui1dmd th()wmnd dollars and b~' pnying to the Bank out of any ImnppI'Opl'inte</ llHHlOYS in the Consolidllt('d Revenue Fund the (11111l of oight hundred and

twent·r t honsnnd doll nrs. 1038, c. 42, s, 9. .

(4) The Bunk shnll, on the date of the comillg into Ioree of this Hank ttl subsection, pny 10 tho Mini81t~I' on bohnl f of the Dominion of Canada, lill~i 1«(;~d~()tl tho amount of dividends accmod lip to j he said dale upon ! he one ;IJlnl~ Olipl.'l hundrod and two tlicusnnd Closs" B " shares of the Bank held bv the "U" shares.

IHiniste,' as of the said date, 1938, c. 42, s.D. '

) 8. Repealed. 1938, c. 42, s. 10,

19. Repealed, 1938, c. 42, s. 11.

20. Rcpcn/t'd, 1936, c. 22, s. 12.

Ill'SIXESS AXil POWEll;:; 0[0' TIlE lIA~J\

1

21. (1) The Bank nHI~'

(a) buy and sell gold, silver, nickel nnd bronze coin and gold Coil! and

find silver bu Ilion; bullion.

(b) effect transfers of funds by telegram, letter or other method gxchnngc. of communication, nnd buy nnd sell transfers effected by

such means, trade acceptance:", bankers' acceptances, bankers'

draf'ts and bills of exchnngc drawn in or on places outside of

Canada and ha\'ing a maturity not exceeding ninety days, excluding days of grace, from the date of acquisition by the

Bank ; 1936, c. 22. s. 13.

(e) buy and sell 01' rediscount short, to I'm securities issued or Investments

gual'nntecd by the Dominion of Canndn 01' any province, .

ha,,:ng a mntul'Hy not. cxc('etiing two years from the date of

aequif;ition by the Bank;

(d) buy and sell securities iss lied 01' gual'nuteed by the Dominion Halik may of Canada or any province, having a maturity exceeding two buy ~n~ Bell years from the date of acquisition by the Bank, hut the~o~~n;in~'ial Bank shall at no time hold securities not maturing within ~ecuritjes: ,,\'0 years haying a Pat' value in excess of fifty PCI' cent of

its outstanding note issue and deposit liabilitios, nor shall

the Bank at nny time hold securities not maturing within

ten years of It par value in excess of five times the amount

of the paid-up capital and rest fund of the Bank; 1938,

c. 42, s. 12.

(e) huv and sell short term securities issued bv the United Kingdom, any British Dominion, the Unit'ed States of Americn, or France, having a maturity not. exceeding six months from the date of acquisition by the Bank;

(f) buy and sell securities issued by the United Kingdom or the Securities United Stares of Amcrica having a maturity exceeding six :;~ i1%U.K.

months from the date of acquisition by "the Bank, but the ..

Bank shall at no time hold such securities of a par value in

excess of one-half of the amount of the paid-up capital of the

Bank; 1938, c. 42, s. 12.

(g) buy and sell or rcdiscollnt bills of exchnnge and promissory Discounts. notes endorsed by a chartered bank drawn 01' issued in connection with the production or marketing of goods, wares

78028--6

Loans and a!l\'i\nCCil,

Open market oncrn lions,

Deposits,

illnl nH'I'('hnndi~t: as del1ncd inT'llc ./J(J1Ii.: Act, exccpthtg those lU<'lIti<lll('d ill plu'ngr:wh .},) of this aubseetion, and having n Uinturitr not (,Xr'cmJill1!; niuct~, dny~" Nidudillg dll~'s of grl\CC, hom t,he dnt.c of IIc(l\1i(11tio(l by tho Bonk; 1936, e, 22, a 13.

CM hll~' nllt! 1;'1'11 or rcdiseoun! hills of ('xchnnge and promissory 1\01\':; endcll'sed hy n rhlll'll'l'Cll hunk, drawn 0;' Issued in <!Onllel'tion with til<' produetion ur marketing of products of ngl'Jeltlitll'l', tho forest, the qunrry and mine, 01' tile sen, lukes and rivors, as defined in '{'be Bank Act, and having a mntHl'lty not exceeding one hundred and eighty days excluding dnys of grnco from the dote of aequisition b~' the Bank:

Providod that the Bank mav by regulntion limit to a pcrccntugo of its totn) nfls('ts' til(; amount of such paper hnving a lllulUl'ity in excess of ninety days excluding days of gl'lH'(' but, not. exceeding one hundred find eighty clays excluding dfl~'s of grace, from the unto of acquisition by the Bunk:

(i) mak« loam; 01' ndvancos fO!' periods not exceeding six months to ehmh't,(·t1 banks 01' to hanks incOI'porn.[cti under the Qaebec SavillOS Blinks it ct 011 the pledge 01' hypothecation of the f()\'cgoing classes of s('clIl'ities, bills of exchange or pl'olllissol'Y notes, or of Canadlau municipal securities, or of seeurit ies Issued by n school corporation 01' parish trustees, 01' of securities issued pursuant to the statutes of a province mnJdllg provision fOI' the payment thereof and the interest thereon by tho provinoo, 01' of gold 01' silver coin 01' bullion, <

01' documents of title relating thereto; <

(j) make loans 0\' advances Ior periods not exceeding six months to the Dominion Government 01' the government of any province on the pledge 01' hypothccntion of readily marketable securities issued 01' guaranteed by the Dominion of Canada or any province:

(k) make loans to the Dominion Government 01' the government of any province, but such loans outstanding at fillY one time shall not. in the case of the Dominion Government, exceed one-third of the e:;timafed revenue of such government for its fiscnl yen 1', and shall not in the case of nny provincial government exceed one-fourt h of such gove: .nnont's estimated revenue for its fiscal ycnr ; and such loans shall be repaid before' the end of the first quarter after the end of the fiscal yenr of such governmfnt;

(l) for the purpose of its OrK'~ market, operations, buy find sell in the open market from or to any person, either in or outside of Canada, securities, cable transfers, bankers' acceptances, and bills of exchange of the kinds and maturities defined in, and subject to the limitations, if any, contained in, paragraphs (b), (c), (d), (e), (0) lind (II) of this subsection with or without the endorsement of a chartered bank;

(m.) accept from the Dominion Government 01' the government of any province or from any chartered bank 01' from any bank incorporatod under the Quebec Savings Banks Act deposits which shall not bear interest;

(n) open accounts in a central hank in any other country 01' in the Bank for International Settlements and act as agent, depository 01' correspondent of such other central banks or the Bank for International Settlements;

,

(~Ji MIll Ill'O ('ml Blll1

(]i) do UpfJ Act

(2) The nJlY warehou clwrtcl'cd br collatm'nJ S(I pl'ornisl.lol'Y I next procedi: find remedv {'xel'ci:wd I;y

22. The
(a) cngn
whm
(b) PUI'C
the
tllc ~
(c) lend
izllln
cluin
cncla
of f
SUC!I
'. pl'!wi
(ell mak.
(e) accen
c!C'!XJf
(f) allow
notes
bv OJ
make
more
promi 1

23. (1) Tl Canada withn: by agreement.: of any provinc

(2) The I shall act. as ag interest and PI' the public debi

(3) The BE any cheque d1'2 cashing or neg! the payment of any cheque dr: department th:

Revenue Fund, 78028-ff~

rting thQ~~ l ba\'itl~; ~. i~t gtMQ'.

22,. $, la,

~0mi~~Ol?Y l:'iilUed til 'OutHrt<\ (~r t1('!\, l!\lH;~\ !w,\'ll1g It C}l(;,luding itL' Bank: nit to t'\ en paper ~ dews of ltj- 'days

m by the

x months !llIel' the tbe,~nHon flange or ies, or of tn::::tees. province

interest , bullion,

, months of any il'ketnble Canada

cmment me time • exceed nent for cvincial ttimated ! repaid he flscal

nnd sell outside ptances, ined in, agraphs with or

rnment .m any

ks Act

'1 or in , agent,

banks

,

(o) :wquil'l.' h~' pun'hasc orlNISc and hold I'Nll til' jmmovnhJe n!'ill ""I;tli), pl"Olll'rty ftw the fWhud 111'(' nllll o('cllpntioll ",.( the Blink in fOl\lH'l'Iltlll with its hIlSillt'l:'ll lUll I suU flild dlslJv:,(, of tho

SllIUe:

dOluiv odwl' bunking busirw$;; inei(kl1lnl to 01' COIlli\'fjlh'lllilll Jt.i'it!en!,.1 \1110n 'the provisions of this At'! and nOI. pl'ohibi(N! by this I" \\W~. Art. 1930, c. 22, s, 1~),

(2) The Bank lUll)' IH'quil'c. from nny clulI'{el'Ni bank i)JHI ilold\PJuh<lti(11l anv WIII'l'hoH:W I'll'dpl bill (If lading and other S(l<'llI'itv held II\' such "I (".ilJu,tlJn!l

I ' 1"1' . .' .', ,. '. ' 'a . I' ,;<'('urltW$.

C mricl'ed uan c pursuant to the provrsions of The Banl: ..lei, u.s

coil atern i s('!'urity,£OI' I he )'clm),Jllcut of any bill of cxchango or promissory note ncquirod by flIP Bank under tLc provislnns of tht' next Pl'cc('dinl~ subS('etiOll; and till' Blink IUlly ['XCl'ti$(' every right and I'cmody in l'(l$llCt't of such ('ollnternJ security (IS could hnvo been c:-'crrist'd by the clll1l'(,I'('<I bunk aforesaid.

22. (a)

The Bank shall not, except ns anthorizod by this Act, bl'r~l!!ihit~d

)' Ii . I I' n51.H'H9.

engage 01' invo n (ll'CCt Interest 111 any trnr c o!' >II !'1Il ess

whnfsoevm';

purehaso its OWn stock 01' the shares of any oth£'1' hank except the Bunk (OJ' Intcrnntionnl Scttlemcnts 01' make loans upon

the s('ClII'itv thereof':

(c) lend 01' make advances upon the security of any real 0)' immovahln properly; provided that, in the event, of any claims of the Bunk being in the opinion of the Board Cl1Cinllgcl'cd. the Dank may secure itself 011 nny l'cfd propel'ty of the drbtol' 0)' any other person liable and may fH'qUlI'O

such property, which shall, however, be resold as soon as practieablo thrl'caftt'I';

make loans 01' ndvnneos without, security ;

ncec)lt deposits for n fl:,~)d term or pay interest on any moneys deposited with tho Bank;

(f) allow the renewal of maturing bills of cxchllngc, promissory notes 01' other similar document" purchased 01' discounted bv 01' pledged to the Bank; provided that the BoaJ'(1 may make regulations authorizing in special circumstanccs not more than one renewal of any such bill of exchange, promissory note 01' other document,

(b)

(d) (r)

1

23. (I) The Bank shall act as fiscal rtgent of the Government of Piscal ap;cnt

C 1· itl LId bi t t tl ' , f thi A t of Dominion anar a \\'1. rout C largo an , su Ject fo ,10 provisions 0 liS /:..C" GO\'crlllllent

by agreement, may also act as banker 01' fiscalngent of the governmont and of

of any provinoo. provinces.

(2) The Bank, if and when reql:ired hv the Minister so to do, To manaze shall act. as agent for the Government of Cimada in the payment of public debt. interest and principal and generally in respect of the management of

the public debt of Canada,

(3) The Bank shall not make any charge for cashing or negotiating Dominion any cheque drawn on the Receiver General or on his account, or for Government cashing or negotiating any other instr~ment issued as authority for b~e~~id ~~ the payment of money out of the Consolidated Revenue Fund, or upon negotiated any cheque drawn in favour of the Government of Canada 01' any at par, department thereof and tendered for deposit in the Consolidated

Revenue Fund. 1936, c. 22, s, 14.

78028-6~

31'S

3.?6

An-an,:,·· IIh'Hlti frH' jR~U'.~.

).','1'111.111<1 ULt!.'f:t;,

~~, torn ,,1' ,1"LH",,1 H!'H''<i,

Palnnt-~~~t in ;,);.1.

Power h) :;U;;;Ih_~nd.

nlJd~'mvtj\tn of outstandin~ notes.

STANDlsa COM surre»

NOl'fJ 18SUE

:~,t. l l) On and aft!'I' the dav on which the Bunk Is flIlP,of'ized 10 ('OIIlIlH'Il!'1' business lhp nnnk sh~lll. except as provided in '1'711; Bunl:

A('[. hnn' tllP sole )'I!(ht 10 i);SIW nn!e" 1,.:~'nIJl(' to hearer (HI demand nlHI inh'iH!t~d fi)J' ('(\'('1I1;I;i,,1\ in ('lIl1mln nnrl may. ;-ubjed .tn the pnJ\'L~lon.,; of soct ion t \\'('111 y-,.ix of fhi,; ;\('1. i";;I1(~ such notes to nny am(lUIIL ~!lI'h lI(11\'S ~)tnJl hi' kg;nl h'lIdt'l·. nnd ~hnll he the first chnrge 111'''11 thl' :l.:' ..... j" of IiiI' Bank.

• 2 \ It "'ha II b !ll(' tint v of t he hank to make adequate fllTHngcIll!'!!!" 1'01' [h(· i"~'\!f' of'its 1I0t;~" ;,1 it" head oilier and al· its branch offices :l11d :uw!H'ip" ill Canada. nnd In "upply Bueh note" as required for c'irl'IIJa!ion ill Cnnndn.

la, :\0(1':' of the Bunk shall h(· ill such denominntions and shall hl' priut I'd nml "i~lH'd 01' ol horwis« oxccutcd a:' the (;0\'(')'1101' in Council :,hal; hy I'PgllJatitlll dUl'l'llli)H'. Hl:W. c. 22. i', If>.

\.11Th" form and IIlnlcl'inl of the notes "hall be subject to Hl'pt'Il\'a1 h~' til<' Minister ; Prflvitlpd. however, that each said note ,,1I:d I h.· pril' j ·;,d in both the English and tho French languages. * Wall. I'. 22 .. ':i. l5.

(ill The Bank sl~:lll not re-ii'Hlf' notes which arc torn, partially ddlll'('d 01' "oiled and provision mav be murlo by the Bank fur the di"illil'(,j inn and steriliantion of notos before re-issue.

Hl·:nE~II'T lOX OF ~OTE"

25. (1) The Bank shall sell gold til any person who makes demnn.l thel'd(lJ' at ill!' head (l111('e of the Bank and tenders the purchase prier in legal kndel'. but only in the form of bill'S containing aplll'()ximnt('l~' four hundred O\\TJCf'f' of iin(' gold.

12i Tile 00\'('1'1101' in Council, froin time to time and for such pcrind a,.; he Illay deem dosimhlo, may suspend the operation of the next precNling subsection and remove such suspension,

I:n Repcaled. 1936, c. 22, s. 16.

(·11 On and nftcl' 1/)(' day Oil which the Bank is authorized to t'OlJllllelll'e business the Bank ~hall he responsible for the redemption of all Dominion notes then issu "'I and outstanding and such notes shall lw :llld continue to he legal tender,

• Subsection 2 of section 1.5 of chapter 22 of the statutes of 1036 rca~9 as follows:

(2) .\:; .<o.In n~ prnct.icnblo nftl't: the coming into foree IIf this Act. euch note !If til!' Bank shall lie printe,! in both Ow English and the French . languages; Pr<J\,j,!"d. 110\\'('\'('1. that any such 1Iote printo.l before th» corning into force of. this Ad and issl!('d th('!'('aftel' and .1ny such IW(C thcrctoiol'e issued shall neverthck",; be a va li d and hilHj!:;g obligation of the Bank.

,

,

(5) l~! (6) H!

26. (1 provided, HubiJitieti.

(2j TJ conslat of I Bank equal notes and d

(a) si I PI" sui sil

(0) fnl

(iJ dollars Oil dcm of Eng for Int the cur

(ii 0)' the i three n

(ij;

davs, l':

Bnnk, dollars Oll dem

less am' lial Kingdom. j currency js into export '.1

** S(i(·tiiJn &QC'1 ions t1F'('l"1. follows:

It 16.:

,

arc repon and inter: three and Stlhsl~d ion

as r..fol'C!said I

(31 C the MiniHI (a) g (b) s

a: (e) Ii!

C(

c: to tIm alii, Uncle)' the

(6) T this };(l;d:j, Consol ida; and intr-rr Fund.

is tUltivll'iaeci in ~'lv 15{mk ;(';U'('l' on ,lmmmd ,~Hhl('ct,t() the Hell nnte" to anv It:' tlw fll'st ch(U'gc

rh:quntu !lrru_llgc. il;:, ImuH'h ()tlh'c~ :I:" requircd for

IHHinns and shall vernor in Council

II he subject to each said note meh languages."

e torn, PQ1'tiall~' 110 Bank Ior the ll(' •

son ~dlO lllllkcs ind tenders the . btu's containing

1(' and for such merntion (If the m.

(' authorized to the redemption and such notes

,

of 1036 reads as

Ilis Act, ench note ~~n~neh . JUllguagcs;. ling into force of ,$,,('d sllillJ never-

(0) HepclIll'd. 19:{G, o, 22, s. 16, ttl) l{cpenlcd."* ]1)36; c. 22, s, 16

lII%,EH\'I';S

.26, (1) 'I'ho Bunk shall nhnl"il maintain a l'OSCH'W\ liS hel't'inn!tol' H\'~l'm', provided, as p~N'mity ngldn~t. its outstanding notes HPd deposit

IinblliticB, .

(2) Tho "('i;(','\,O 1'('<j1liJ"('d by Od~ scelion to be nudntnillcd shall "H,,~cn'c" consiat of gold coin lind hullio» in the Ulll'cstl'ided O\\'11('I':<hip ()f the dofiued. Bank equal to an nmountuot Il'SK than twcutv-tivn lWI' centum nf tho

notes and de]lof'\t, linbilitics nfOl'(>~aid; and lllay in ndditiou iucludo

((I) si 1 \,(,1' bullion l'l'IJt'i\'C'd from the .Mini:!tel' unde» Ow next pl'(!('cding; section 01' pII!'e!lai;cd under tho authorit« of subsection Iour :,('1'1'01', valued at the market price of the nne :-:i I \'('1' content thpl'('(lf: and

(b) fOl'l'ign ('x('hange whic]: shull 1I1('an:- "Foreign

'- ... . exchange."

0) balances in pounds f',terlillg, United States of Amorien

dollars and ('UI'I'('I)('ips which by law and in fact are convertible 011 demand ai. a fixed priec into' exportuble gold, held in tho Bank of England, the Fe<ll'l'nl H('s(,I'\'c Bnnk of New York, the Bank f'or J nU'I'))" ional Settlements 01' H central hank in any countrv the currencv of which i!; convert ihlo ail hereinbcfore described; ,

(ii) trc'asury bills or other obligations of the United Kingdom 01' the United Stutes of Amcl'iell having a maturity not exceeding three months from the date of acquisition by the Bank;

(iii) bills of exchange haying a maturity not exceeding ninety days, excluding dnys of grace, from the date of acquisition bv the Bank, p.iyahlo ill pounds sterling. United States of America dollars 01' in a cnrrt-ncv which bv law and in Inct is convertible on demnnrl fit a fixed pi'iee into exportable gold,

less any liahilifir-s of the Bank payable in the currency of the United Kingdom, the Tnitcd States of America, or any vcountry whose currency j.;; by law nnd in Inet convcr! ihl« on demand at a fixed price into exportable gold, 1931\ c. 22, s. 17,

.. S.,l'ti(,n sixtor-n of chnptr-r 22 of tho stn t ut es of 1!l31l which rep('uJetl Bub. sc-dions thrr-». HI"(' uud ~ix M S(·c-ti(HI lwontv-flvn elf tho principal Act reads ns follows:

"16, Subsections throe, five aIH! six of section twenty-five of the an lrl Act arc reponlod : Provided. however, thnt the authority to pay the principal of and interest on "N'm'ilies issuer] to the Balik under the aforesaid subsectlnn-, three and six shnll continue."

Sllh~('dio!ls liJ],l'e au.l six of sect ion twenty-five of the pr inci pal Act repealed ad ;~fc)l'{'said l'(IHtl as follfHts:

(3) On the day on which the Bank is authorized to commence business the Minister shall trnnsfer to the Rank

(a) gold held h; the Minister for redemption of Dominion no/<¥<;

(b) silver held IW the Minister for redemption of Dominion notes valued at tho market pr-ice of the hne silver cout.ont thereof;

(e) securities of the Dominion of Canada bearing inter{'st at tbrno PCI' centum )lCI' annum, puyuhle half-yearly and hnv :ng a maturity not exeeerl ing five vcars, valued at par;

to the amount of Dominion notes outstal)(lingon that day, except notes issued under the authority of the Pinaucc Act,

(G) The Minister. for the purposes of paragraph (e) of suhsoct ion t lirce of this ser-tiou, is author izr-rl to issue seeuritics under- the provisions of Ph '1 COllsolitiaicd RCP«III1C all/I A llriil Act, 111111, and payment of the ru'ineipa! of and intorost on such sceuri tios shall be made out of the COItBOlidated Revenue Fllnd.

327

1\'W<"t ~v ... \;p At t he 1',~qUI'st in writ ing of the Honrd, iLl' GOVI}!'IHll' in ~~ilr::,1.'rY~ t'nUJldi Ill:)y slIspelld flip operation of thiS section insnfm' as it l'l;'quil'l.~$ r~'l'Iir\,!IWllL Iht' Bank 10 mnlntain n I'('!'('ITO of gold equal to an amount not less

than {WI'llIy-fi\,p per vr-ntum of its l\t)lt'$ and dqlosit lin hili t ios, Sue!) sU::;Pt'lision ~h:ll1 he fOl' such pfriod 1101 pXI'('('llinp: $iXI~' t!n~'s ;1.S may he :<pt'ldlll'd h~' Ill(' COWI'lUlI' in Counr-ll, bill Oil the flll,tllel' )'equest ill Wdnll!! fir thp Bo:ml mav Ill' ('xiI'wier! from time tn time ffll' fmther Ill'I'!O(f~ not ('x"el'ding :'ix'~' dn~'" oach. provi.lcd, however, Ihn! no ",\11'1; 'lI"IWll"inn "lin II contiuu« for :1 peri.1d longe'I' 1 ha n 01\1' vcnr wit hnut tho' s:ltll'lioll of Purliamcnt.

d) '1'1", Bunk shall during til!' \"t':II'~ Hlai" Ifl:W and 1987 !Hll'l'h:I"<' nnrl h<lld 11l'\\'IY~!IIil\('d C~:lll:,dinil "i!\'1'1' as and when l'<'quil'od "" ttl do II,\' th(, :\linii'It'l' hut tilt' Bunk ,,!till! 1)(,\'('" ht' roquirod to pllrdla~p :\1\\1'(, t han 1.1171 $0:2 fine ounces in allY venr,

1!I:,.q·:nn: OF ('lI.\HTI:llIm H\XKs

lh'';N,',' 27. f 1) En'n' ('harlc,t'I',1 hank "hnll mainluin :1 ('(''':I'I'\'P of not

~., !It'. lP~" Ihnu Iivo p(,,: centum of ''lu'h of its deposit liabilities as arc

1lI31Iltaah',j I·J' (' I' I '1·' .. I .J. . . 1 II "I I'

h."('l.;lrtt'rhl pay;) It.' lIl:1nH'dan I OJ ars, alII sue \'P';{'!,\,p "Ill ('011":1:< .. 0 11

bunks. dl'II(I;.;i! with 11!t' Bunk and (.1' 1101,'s of tho Bank held by such hank

I !las. c. 42, s. la.

eila I'tl're,1 ha!lk~ti) make

rvt urus.

1034. c, 24,

Ba~~$ of teS(ll'\'(' of chnrtvro.l hanks

(21 For [ht' pt1l'PM('" of thi~ "1'('li(lIl, cvcrv dlllrtpl'l'd hank shall mn kr- a 1','IU1'n to the Bnuk to 1)(' i:it!lwd In' thl' dlil'! accountant or ;It,tin\: dlivi' accountnm <In" hv !lIP g"lIt't'nl ill:\Il:~':('I' 01' nding aenern l lllntl:ig(,1' nf ~Ilrl: hank. ~ho\\:in~ tilt' amount o( :'11('11 of its ;I{'po~it. liubilit io ... :1 ... nrc pa~'ajJk ill !':lll:tdi:tn do]hl''': and also the :11110unt of it,: d{'l'p~it with till' Bnnk :mll tit" :lllinunl nf tilp notes of tho Bank hold hv ~1I('h hank, :lI t Iw ('nd of oach iuridicul lin" of i Ill' 1110111 h last p;'cr('dilll! till' dnt .. .u th!' return. and'~hnwing rOt: til(' mouth tll(' dailv :1\'(']':1gl' :llllllunt 01 -uch d('po~it li:ihilitip,; and of it" dpIH';;if with the Bank and of til(' rntb, (I! Ill!' Bank Ileid hv such hank. Sur-h return shnll hi' dt'linJ'Pd or transmit ted to tho Bailk nl tho ;'[\]11(' t ime as the rerum to the :llini~t('J', 1'\1 1':'1Inn 1 to section one hundred and twelve pf The Bank Art, is tJ':1nsmittod or rlelivcrod. ]938, c. 42, s. 13,

,:jl The dailv :lWI'H,[!(' amount of such of it.s tlppo;;i! liahiliti(',:: a- ;11'(' pnvuhl» ill Cnr,ndi:1n dnll:t],,, fur <':lell ('ha1'i('I'{'d bank "hall be tilt' !>n~i . .:; or' dd('!'lllining- til(' amount nf the 1'(,,,1'1,\,(, to lw maintained hy sud] b:1J'k dlll'illl! t lu- mont h 11('XI following /lIP month in which

:'1; .. 11 return \\';13 made, 1938, c. 42, 8, 13, '

i-!) If all~' ell:1l'tel'f'd bank kllll"';ngl~' makr-s default ill coruplving with the l'Pqui1'('mmts of t his section, it ,.;:ll:111 he lin hlo to n pcnnlty :1, tilt· I'nte' 0f 1('11 pr'l' ('pntulll 1)('1' annum of til(' n mount of dcflciencv f\ll' ('aell day on which tIH'l't' is a deflcicncv in the HI1Wunt of the 1'(';:(>I'\'(' ll1:1il;tailH'd hv tho chartered hank. [[~1fl surh pena ltv shall be payablt, to thl' 13:l11k and recoverable bv it by civil action,

I;») Fo1' flit' purpose of this section t he In!<Jl('('( 01' G!'lwl'al of Banks "hall nnnnn llv make such ill~pL'ction of tlte books, accounts and IIlH'lII11P])t:, of (~\.('I'\' e!!mf!'l'('d hank as he may dcem neeessarv 01' I'XllPdient for tln- plirpo;<r of "ati"i~'ing himself that the return required hy ~lIb,,{'rtion two of this section is correct. and shall ccrtify to the Bank whether in his opinion til(' said return is correct, and every ('linrtl'n'd hank shall frJn· ilw Inspector Gencrnl HCCC:'S to the books, lll'COlllli" and documents of the bank Ior such purpose; and if the Ino<pc('tor C('lwr:11 is ()b~tl'l)('tcd 0]' delayed in making the inspection.

t1)(11')) (10UVH) dtlTing

H Insllfii( JlJ.l~'nl(' ehnrJl' Oil HH' pnYPH' mny b

17 A ct i'h Iorm II hank n ;;ueh ill snti~r~·

211 B:111k j gold ('I

(2 requiro Bank n by sucl Counci to I'llfo ]'eAlwd

29. 01' df']H sect ion thi,:: :\c estnblis

.',

an, and bul section incrcaso ruonet.a 1 Rccf'iyc IIO\\'('\'('J in the c: eight, if the tim liahilitir :=:11:1]] be

1

31. provisio deprecia

1

0\11 ~>Iul\'hw(td bank slmH Ll(; f!uihv of nil otfellCl' and llnhlo nil Stl)IHlllH'V con\'it~tioll to :t nne of ot\c-'hlln<!t'('d dnHl1l'g f(W {':\rh nm! ('\'('1'\' (io.,during wldt'h the obstruction 01' dd:lY continues. maU, e. 22, s: 18. '

it)) In Ow ~'\'t'nl of the IW01Wl'(Y find n~s()ts of Ihe Bnnk boing (hwcrUIll('n~ in:::umeient to pay its (h,hl,;: aml 1\ a hili ti os , and if lhe Bonk SI}Sj)OIlds ~ .. al·an!"c, p:lynWlll of any 01' ils Jinhilitii'';. I he t/('pll;.;H tHilt/e hel'l'lmdrl' by (Ivery

t'lIHI'fe!'l'd hank is hen,ln' !!:tI!ll'l1llll'rd. :md tlli' fjowl'Hol' in Connell,

on th(~ 1'('{'OllltlWlHlatioll 'of 1I11·:\Iini,.:tl'I' of FllJi111('P "lwl! nC',(wiz('

pn~'I'll'llt Oil! of til!' CO/l,:olidnh'd HpnnllCFUl1rl of 1311('11 1llt'1;''',) ns

mny b~' lH'N':'snry to i!llpl~'IIl(,llt. sueh gll:ll'nnlf'("

l i) EWIT bank in('ol')lOl'alptl under tho (Jllcba Sarhut« Hanks S'H'~)(lC Ad shall ll1f1ii)lnill ngnin:"i il s deplFit linbili!i(';,; such 1'f'''('I'\:l'~ in the il~i~:\~~~S form of notes 01' the Bank 01' depn::ils with the Bank or n ('lIartpl'l'll

hank as mnv he ri!'t'!llNI In lit· f:IlOieient hv Ihe Bank aml shall furnish

--lIt'l! infonnnliolJ :IS may bl' )','quirf'd hy til{' Hank from nlll(' to timo to

sntisfy it that sitch n'':I'ITI'" m'(' ':0 Illn!ntnhH'd, "

~l' HHtXllEII 0\,' cor.n

28. IIJ E,'('I'\' ('hnl'l(,I'('" hank shall, 011 tilt' duv Oil which the Chartered Bank j,: :H1thorizp;1 in l'lHlIlll!'lH'e business, trnnsf'er in tilt' 13:1111.: nil hanks to Ih,li\"(~r

gold coin 01' bullion owned :,'1<1 hold hy it. in Canada, ).:o!tl held,

(2) The (;O\'Pl'lWl' in Counr-il rnny from time to time thereafter Power to require en'I'~' I'h:lI'l('rerl hank 01' (\'I'I'~' other 1)('1':;011 to tl'[lilsfel' to the ''lIf(l~'cC this Bank nnv 01' nil gold coin 01' bullion held in Cunnda which is owned rl'(jlllrl'lllent, by such chnrtorod hunk or h:: such 0111('1' porson ; and tho GOVC'l'llor in

Council mny authorize all nH':l.~1ll'(>" deemed IH'('ei'l'al'~' 01' expedient

to C'llfol'('c nnv 1'\1('11 transfer and to impose and 1'('('0\'(,1' pen:1ltle~ in

j'('''pe('/ of :-II'\" Iwglcct or refusal to make any tl':111:"j'et' so required,

"ALl:ATlOX ('F GOLD

29. \\'h(>I1('\",'1' gold is sold bv, trnnsfcrrod to, hold as 1'('$eI'Vo by, \'alilatioll oi 01' dl·po:-:ited wit 11 t he Bank 11\lI'8\1:1n', to subscct ions one 01' three of 1;01.1.

sert ion t"'('nt~'-fh'e, section twenty-six, 01' section twenty-eight of

t hi" Act, tho vnluo of the snid p:olr! sha II be computed on the hasis

ci't:1bli"IH'd ];~' the Currency Act nt tl-e date of the relevant transaction,

:10. An~' proflts rcsulting 1'1'0111 the sale by the Bank of gold coin Djsposit.ion nile! bullion tl'nni'fel'l'ed to the Bank pursuant to subsection thrce of Off prOfits,'

, fi ' Iv-ei If}' \ t f . rom sa es.

section twenty- 1\'C, OJ' section twon .y-cig It 0 this J C I 01' rom an

ineroas« ill tilt' value of such go!d resulting from any change in the monetary standard of Canada, shall be paid by the Bank to the

Receiver General 1'01' the Consolidated Revenue Fund: Provided,

howovor, that the aforesnirl provisions of this section shall not apply

in the case of gold t)'unsfel'l'pd tinder subsection one of section twenty-

eight. if the Govcrnor in Council is satisfied that the said gold was at

the time of the transfer being held by a chartered bank against

liabilities elsewhere than in Canada, and in such case the said profit

shall belong 10 the chartered bank.

PROFITS OF THE BANK

3]. The Bank shall establish a rest fund and after making such Rest fund, provision as fhc Board thinks proper for bad and doubtful debts, depreciation in assets, pension funds and all such matters as are

AUJIT

"\Plh)illl' 32. (II FOI' the PIll'I)()H' oi auditing Ihe aff'nirs of tho Bonk. the :~rl~)'~dil<"", (;o\'('I'IWI' ill COUl\('i1 "hall. on t);l' roconuuondation of the Minister, nor lnu-r than Jauuarv tliil't,\'-fil':<t each vear, appoint two auditors, ('ligibJ!' to h(, appointed 11:' auditors of :l chartered bank. but no person "hall be I'ligihie for appoiuunont if 1)(' 01' any member of his [hill has

IWeJ\ auditor Ior 1\\'0 Sll('(,l's,.:in' years during the three next preceding yvnrs. .I flaG. e. 22. s. 20.

f:2 j If n IlY vncancv occurs in the oflleo of auditor of the Bank, noticp t h('l'eoi' shn II forthwit h he ginn hv the Bank to the Minister who ihoroupon shall appoint some other auditor eligible to be :lppointc'd a" ;1Il auditor of a rhal'tereri bank to SCITe until Jnnuary t hirtv-Iir-r next following, 1936, c. 22, s. 20,

I~{) XU dircctrn- 0)' officer of the Bank and no member of a firm of auditor" (If which n director is a member shall be eligible for :tp)lllintllJelll as an auditor. 1936, e. 22, s. 20.

\ {I The l\linj~tf'l' may from time to time require the nllditol'~ to 1'(')10t'l 10 him upon the nrlcquacy of the procedure adopted by the Bank 1()!' flit' protection of its creditors or shal'rholdrl's and as to the "uflieit'lJf'Y of j heir 0\\,11 proceduJ't, in auditing the affairs of the Bank; and the Ministor may. nt hi" dis('l,:ion. cnlnrge or extend the scope of tho audit or direct that any other procedure be ostablished 01' that any other examination be made hy the auditors a" the public interest may seem to require, 1936, c. 22, s, 20.

(\'p:es of (M :\ copv (If cverv report made bv the auditor" to the Bank I'l'),;>rt.s to be under this section shall be tr:1n~tnittrd to the 7\Tinistcr by the auditor;; ~:?\~j~';,'r. :It the same time as such report is transmitted to t.he· Bank. 1936~

c. 22, s, 20.

})(,l'SnHS who may

not net.

H{'rh'rts t o )Iinist.:>r.

Week]" statement of a~.;,;et~ 'Illd Hah:Ht-!cs.

PI'()lwr1~' IW(I\"ideil rOt' h~' hllnks and Mh'I' tkdliJ'iinf! an IlnH)IlU(. <,qual to Iour nnd oue-hnlf IWI' l'f'nillll) of the pnid .. up {'npHlli whit'h mny he uiili;t{'d 1\11' Ih~' pnynWnI of cHHmlllliy(. divldcnds at fI. rato of four and OIw-lwH IH'I' centum pH UIU)IlIll, pnynhle hfllf~;n'nrJy. the :l:'I;I'l'lailh'd surplus a\':l\lnhle from the operations M till' Hank Ihll'ing ('twit liumwial ),r't\I' shall he :lppllNI byUlC BO:1rd as follows:

ia I H tlw \'\';;1 Innd of lil(' Bank is less than !lw paid-up capital, uno-third of slIi'hiClll'plllS shnl] 1\(· nlloe!\ted 10 Ow rest. inn!l and t hI' 1'(·,..idIH' "hzl 1I1H' paid In the. Heeelw'l' General find pl:whl 10 Illl' credit oi til\' Consolidatod Revenue Fund:

Ib) If til\' n'~t fund j,; not h'~i' than til(> paid-up eHpital but is l{'~~ than (wtel' Ihe paid-up capital, (me-tenth of such smplus ;ohall hI' alJoNIlf'(/ to Ill!' rest fund and the residue sh.nll he pnid tn !lIP Hpf'eiw'I' (;('I1('I'HI find pltH'pd In tbe I'l'l'dH of the Cotl,onlidn\{'d HewlIlle Fund:

iel fi the !'P,",' fund )-: lint I('~:~ than !wit'e the paid-up capi!al, !1It' whol(' of slldl i:'lII'plll~ :ohall he paid to the' Reeei\'('l' CI'Ilt'ml and pbwf'd 10 the (')'I'clil of the CotlsolidntC'd Revenue Fund. HlaS, c. 42, s. 14,

Ill: tll dil

sll-:

I'C! c

.'

At

OJ'

193

sha fisc Ass Ace pre; 01' J rcq:

GO\' and rcc(' Pari foul' then

r

Go\'( of fl guilt marc

RE1TRXS

33. (l) The Bank shall as soon as practicable after the dose of business on l\' eduosdav of each week, make up and transmit to the Minister in I:", Iorm of Schedule C to this Art a statement of its assets and liabilities as at the close of business on that day,

any i FUI'Sl deliv same indie: years

ttc C'qUftl nm\' be o~ 'Co\!r tv the ',iming

\2) A {'OIlY \11' i.>V\'l'Y Sllt'h siairlll('nt ~1i:t1J be pllbr';'l'diu till' U('xt i'1.hn{alj"ll, SHl'c('('ding is(<llll of tho (.'Wl(lIla (iCltr(((':,

(3) Till} Billlk :~hall 1I1so HS :'0011 11$ prnrth'nbh' Mtl'!' tho dose of WI,!,!;!y

'I H,lsinc":s (iil W{'dlH'sti:W of oaeh week. mnke up and t ransmit, to the "i"h'n!NI~ (If 1\linlsit'I'1i slllt(,IlWIlI o'r tho amount (If ils Hoh's in eirruletlon on (':lell :.\~'I'~·Ij't\~';. bu~ilH';';$ dllY liming the pl'f'{'P!ling seven dny poriod.

(.J! TIll' Bfmk shnll ou or Iwf(wf' the sevon]] .. dav of ouch month ~r\l"ll>l,\'

k I', 'I ", '1" 'I' " .', I I I {" i ~lal"III"llt

mil o up nn. (J'II11S11H, to t In ,\ !lush'\' III tIn 10I'1ll or DC 1('( II e .. o of """WI",

this AN n stntemcnt of its :W$('{S nnd lin hili tips on the In!'1( business auillinhiii,

day of the j>j'<'t'edillg month, th'~.

(i) ].;\'(,I'y ret l! rn roqu i !'cd u ndc)' the next III'p{'edlllg su h$('('Uol1 1l'1dill';; t jO!l1l shall be fH'('ompnniNI by cI('<'lnl'llIiIl11S whicl. shall he 11 Pfllt of the

return. anrl the drr!lIratiotlii shall Ill' in tho form scot forth in f\phcdllll' :-<,,11.,.111,,' c. C to this Ad, and shall he :;igncd by the Chid AN'l)ulllnnt or bv the

Acting Chid Accountnut, and 'by UW'Oonrnor 01' the Deputy Govemo»

01' the ASiib,tani Dl'plIty OO\'CI'lltW, H)3G, c. 22, s, 21.

((3) The 00\'(')'110]' in Council mnv from lime to time ns ho deems Powers to

necessary, amend till' form of S('IH'dlile C to this Act. ' 11111(%1.

0:1pitnt H tund ,ttl and Inti;

but is HH'phl$ ImH be of t lli'

'apital. i'c(,h,'('r evenue

lk, the nistor, ditors, nerson III hns ~eding

:l·t t I) Till' ti~t'al Will' of the Blink shall be the calendar vcar, 1"i~('al.\'t,"I'.

19a5, e. ~12, s, 15, ' .

(2) \\'i(hin six \\'('('1\" af'tor the end of each fiscal yenr, thr Bank C"rUtlN!

I 11' . , ') 1'1'" , f ' ' "f 'I Hal"flu'llt of

S 111 transmi! to tIl' 1\ 111181('1' II statement 0 Its aceounts or tie a {,,,O II II I." 10

fiscnl year. signed by tll(' 00\'1'1'1101' or the Deputy Governor 01' the ~rini~! .. I'. Assistnnt Deputv GoWI'l1Ol' and thr Chief Accountant or Ading Chief Accountant of the Bank, and ccrfiflod b~' the auditors in the form

prescribed b~' tho by-Iaws or the Bank, togeth('l' with such sumnuu-v

01' report h:, t he Governor as he mil" deem desirable' 0]' [IS may be C;"""I'IIOl":;

requircd hy the Minister. 1938, e. 42, " 15, I'I'PIII' I,

(3) A (Op), of the a('('ollnh so signer] and certified and of the Stal"IIICnt.

Govel'nOl"s report shall be forthwith Illlbli,.;iJed in the Canada Gaultt', n,l~d r<'non In

I if I)' . I " 1 'I 'I' f I f 'I (, ,IZL'! t I'.

anr 1 >1\]' IUnwnt IS t icn "II ting, S \HI wi! un ourtcon ( ays a tor t 1('

receipt thereof b~' the Ministor be laid before PI1l'limn('nt, 0]' if Parliament is not sil l ing, it shall be laid brfore Parliamnn] within fOUl'iecn r1ay;~ after the COl11ll1rncrl11ent of the next ensuing session

thereof. 1938, c. 42, s. 15.

35. Hepenlrd. 1938, c. 42, s. 16.

36. Repealed. 1938, c. 42, s. 17.

Bnnk, nister :0 he nuary

firm c ior

II'" to " the n the :ank; 'cope that

eJ'rst

r

OFFE ..... CES A x n ]'E)L\LTlES

:}7. Every person who holds office 0'1' continues to hold office as a n,!,dilll{ GOWrJ101', Deputy GoYcl'Ilor. Assistant Deputy Governor or director ~:~~j~)I~ll:1l of the Bank, knowing that he is not C'iigiblc for such office, shall be' .~, ie. guiltv of an indictntJ!e offence and linGle to imprisonmcnt for not

InOI'£' than thrcr yea:" and not jess tlirm three months,

Iank itors :936,

e of thr sets

38. Evc!T dircctrn-, officcr 01' auditor of the Bank who verifies VCl'if,l";llg' anv statrnlC'nt'. accOlIn.t ,01' list required to be furnished to the l'v!inistcl' ;;;'l~~,.st~te. pursuant to the PI'O\'lSlOllS of this Art, or who has to cia with the account dclinring or transmitting- of the same to the Minister, knowing the or list. same to be false in any material particular, shall be guilty of an indictable offencc and liable to imprisonment for not more than five

years and not less than six months.

331

33l

Tr,lIl'" lait-lin.:-

~t~~t ial~e ~L\(mlH'.lt

CtlHt!\h ""ltt\-lUQ£ A,'t

39,J\~lY olUc('l' of a (~lt(u,t<'l"cti bonk who transmits any statomellt 10 the :M,inistl'1' pursunntto the provlsions of this Act or who hns to dl)with J1l'el)ntillg 01' tnllli5l11iLiing the same to tIw Minister knowing lit(' 8IHnC 10 bet false in IHlY material pnrtieuln», shall he guilty (If an indiclnble on'mllln and liable to imprisonment fot' not more than two Y('lIl'$ HlHI lwf IN,S than three months.

I, "',

faithfully, execute anr (Wllllollce c pl'ojvn'ly 1'('

I fUl'tJ: to be conn information such PCl'S{)l belonging t business -of

:W. Anv olIicel' of till' Bnnk 0\' anv office» of n chartered bunk 0\' :\IIY (1(11('\' P~I'S(l1l who fails 0\' omits t1) comp):,>,' with nny provision or 1111,; Ad sl1:1.11 1)(' glliliy of an offenre and. unless otherwise provided hv this Art. shall b» liable on S\lltlIl1H1'V conviction to a finn of not less I hnn nne hundror! dollars and not more than five hundred dollars.

l.1QCIII,\TW:-\ on wrxmxo-tn:

lll",):nm.'y -IL No statute relating to the insolvency 01' winding-lip of any lIllol wimlin,.:. corporation shall applv 10 the Bank and in no case shall tho affairs of 11:'. the Bank lw \\"ound' up 11IIIc"s Parliament so provides: Provided,

however, t hat if provision is made fol' winding up the Bank the notes o( the Bank outstanding shall be the first charge upon the assets. lU:lS, e. -12, s .. 18.

OH(;,\XIZATIO:\ EXPE:\SES

PWIlh'l)tuf 42. :\11 moncvs rcquirorl Io bo expended in connection with the e xpensos of Ol'~;lllizntion of till' Bank before the dav on which the Bank is oraan izut iou at;t horizr-d to eommenco business not exceeding one hundred thousand

dollars, 01' ill connect ion with the issue of increased capital stock, shall he pni.l out of nnv uuapproprintod moneys in the Consolidated Revenue Fund, and shall k recovcrnblc from the Bank as a debt due to the CI'OWll at a 11\' time after the Bank has been authorized to conunr-nco business. '

By-laws.

JlY~J.AWS

,1:{, (1) The Board, with the approval of the Governor in Connell. mnv make hy-Inws not repugnant to the provisions of this Ad with I'l'sped. to

((d tho declaration and payment, of dividends;

III 'I the calling of meetings of the Board and of the Executive Commit tee and what number of persons shall constitute a quorum in each case, and how questions considered at such meetings sha II be detcnc 'ned;

(c) the fees of directors and the duties and conduct of officers, clerks and employees of the Bank:

(d) the form of the annual statement of accounts; and

(e) generally as to the management and disposition of the stock, property and undcntakings of the Bank;

and may amend or repeal such by-laws. 1938, c. 42, s. 19,

(2) Every by-law and every amendment or repeal thereof shall take-effect when published in t.he Canada Gazelle. 1938, c. 42, s, 19~

r

t.it:-t anY stntcment ,\(;'t Qf' wbo hils. to llHni;'ltf!l' kU(lWing (\U he: g.uilt~· of no mere than. two

dHll'tel't:d bankoe

, ,. . ~

lInn), provrsiou Q.

Jthm'wisc provided I) it nne of 1I0t less mudred dollars,

wiudiug-up of any shall the nffnil'S of rovidcs :Proyided, .he Bank the notes ~ upon the assets.

mnection with the hich tho Bank is

hundred thousand isod capital stock, 1 the Consolidated ~nnk as n debt due icon authcrizcd to

the GOYCJ'llOI' in provisions of this

l of the Executive shall constitute a considered at such

.onduct of officers,

nts: and

sition of the stock,

r

42, s, 19.

epeal thereof shall [938, c. 42, s. J9.

scnl~DrI.E A

I •. , ....•. , , do soJt.mnly swea!' that, I will

inithfullYI truly and to tho best of my judgment, skill I'lnd l1bility. t'X('cutc and perform the duties required of me as II dh'f'ctQl' (o.rJic(!l' or cmplo.ltcc a.s the case may be) of the Bank of Carwla andwhlch I11'OIH)I'ly relate to any ollioe or position in tho said Bank hold hy me,

I Iurthcr solemnly S\\'OHI' that I will not communicate or nllow (0 . be (,OhllltUnlcnt('d to any person not legally entitled t.h("rl't.() any inft1l'mntiOIl relating to tile alTail's of the Hunk, neil' will I allow uny such person to inspert or have MN:SS to any books 01' documents belonging to 01' in the possession of tho Bank and relating to the business of the Bank.

ST:l.\'/.JIXO OOMJIl'l''tR/~

Scm~()tJ(.l') 0

Stntement Qf Assets and Liahllitics

M fit l 10

app and

TAMIrt.(l'lllS-- ~ • , ~1"-¢el1 ;\i<SI~T;;-~ r~--'~'--rl

t,' ~~=,~T,·,"i:.u~!~~. :;~: ::::::: ,I II \~~~;~I;I::~:~~ nil'! bul- I I

.. , X,m:,l IN CillOUI.AT10N... ji 11011 , • • •••••••• I

4. DEN\~IT!l- '! Silver bullion .....

(0) }).O,I:'i,Il~p,nGO"., I II SU'rlil1l'P1mlU.S.A. I" I

I'\IIIIHH..... •.••• I' dollars ..

(71) Provincin l , ,I Oth,),r Curreucloa, i I,

O<",ernnwnts ! I, 01 ,,:(nllltrH1S 011 'I I

(r) CIH1.l'tel'CII II n golil standlll''' -'

banks • • ,1,'1 I

(el) Other . . 'I'olal .

II 2. SCIISIIlI,\RV COIN ••••••••• 3. Btu.s J)rsOOUNTED ••••• , ••

I ~. A\l\'ANCt:S '1'0--

I (a) Dominion Gov-

II ment ......•

(II) Provincial 'j

Ii Govurnmonts ••

" (c) Chnrt ercd and ,

II Saviugs Ban.l.ts .•• ', ••••• 1

I Total .•.

I

,.
I{ f!
_~r~
<',.;
tit
(0
1),
Ill(
bc'
au
ba
of
df'i
wi:
by
('n
thE
h~'
ag: Tolnl •.••.••.••.••

1>. S'!NOllY LIMIlt.lTIES PAY' AlitI'. IN Sn:I/.LINo. U.S.A .

• \NO FOltnON OOI,n CUll-

R~:Nt'ms .••••••••••.•.••

',M,., Ornzn r """,tt"". "

I

I

i

Total. . . ......•..... \'

:: :~;,~l~:::::::!:~:~~:~:::::::: I I

I---'j-

TOT.\I •••••••.••••••• it I

5. BII.r.S BOUGIIT IN OPEN

M.MlIn:r, NOT INCLUIJING 'l'1H:ASUfty BIl.J~'l ••••••••••

.. I

I

6, INn:"nn::n-s- ...

(II) Dominion and Provincia! GovI'l'Ulllent short term sccuri-

tics ..... , ..

(b) Other Dominion anti Provincinl GO\'ernrnont SCCUI'-

itios .

(c) Other securi-

ties .

1

for

lien

t

. ~~:,t)() of Net }{escryc (Hem J of Assets ]('$S Item 5 of Liahillt ios} to Notes and Deposit

Liabilit ios: per centum.

I declare that, the foregoing return is correct according to the books of the Bank;

Chief Accountant.

I declare that the foregoing return is to the best of my knowledge and belief correct, and shows truly and clearly the financial position of the Bank, as required by section thirty-three of the Bank of Canada Act.

Ott.awn, this day of , 19

P.C.2870 dated No\', 12,]936.

Governor,

not. a~g

eposit

,

1

f the

leIier

C, as

(';\AII m)wnn:s

flO. (1\ Thr- hank ~ltnll hold ill DOllliniclH I1(He~ !Jot h'~" thll (\\,11

rtlrt7t-~ I-)(jl' tL~nhl1H of Ott1 (!H~h I'p~pl'\'e~ \\"hh·h it hH~ JII (;:\nndu~ rl~'~i't'\'~'~_ ill

' Dominl'~h

. tH)h·~.

(2) Thr :\lil1i~11'1' shnl] lIlak!' ":lIdl IlIT:lllg(·IIIPlli"; 11.- HI'P IH'C(,:'~ HHppi,I' .. 1

"HI',\' IOJ' f'II"lIl'jn!.!; t lu dl'li\'('r\, of Dominion noh''': (0 unv bank ill nomini .. " ('XI'It:lIlgp 1'01' 1l11l'qui\';tll'nl t1rilOllllt of gold ('nit! lawfully'('ulTC'llt nt 'H".,.<. the ~e\'('I'al hl',lI1I'li n/liePt, of Ihl' l)ppm'lllH'm of Fiuuneo {.:'tllhliI'Jwd

rOl' tho l'{'dPlllpt ion of Dom inion lint (',.: under t hI' provisions of till'

Dom inion .v ott's :11'1,

\:n ~lwh 1)01",.; ,;hall he )'t'd('('lllabl!' III 1111\' of Ihl' hrnnch ofli('('" 1l.'d"1l1pli ... 1.

menlioned ill ~llb"t'!'I inn i \\'0 hel'('of. '

1,·0 Tho next 1 h,'('t' 11I'(,(,pding sUb~t('li()n" of this section "hoI! i.illli1<'.'i be I'l'p~'aled 011 nnd from tit!" tint!' 011 whieh the Bunk of Clll1adn j" ::l!~:::~~U;:::, nuthorizcrl to ('OlllllIPlle(' bIlWW,,":. and on and nttcr that date the

hank shall 1I1nint nln n )'('''(','\'(, which shall. suhjeet, to the provisions

of till' Boul: of ('fllwr/a Ad, !)t' IlOI k"" thnn fin' Pt'l' centum of H"

(I('I)O:o:il, liabilitip:, within CHllada and whicl: shall eonsist of n dppo:,it

with the Bank (If Cnuarln. und nf no((':; of till' Bank of Canada Iwld

bv the bnnk : and t.lu- bunk "hall also mn intnin wit]: the Bank 01

c';lllndn or e1"pwlH:'l'(, adequaie ],('':(,1'\,(,,, agaill"t linbilirio« elsewhor«

than in Canada, and furnish such infoJ'lll:nioll ns may be 1'<'<l1Iil'('<I

hv the :\lini"[(,I' Irom t im« to lime to sat if'v hill! that -uch r('~('I'\'('"

again:,t external linhilit ir« rt1't' ,.0 11laintaine('1. n.s., C', 12, 8, GO, nm.

no, (J 1 The bank may ii'~lIe and J'(·-i"~llt.' it" note;: payable to I"u<!of

be1ll'f'l' on domand and intpnri('r1 1'(11' eireulation: Provided that IWlt'S.

fa) 1 Ill' bank shull 1I0t, dlll'ill,~ any poriod of suspension of pay- (' r «vis», mont of it" liabilities, i":'II(' 01' 1'('-i~~l1e any of its note;:; lind

(b) 'if, aftt'1' any such su-pons ion , t he bank resumes business withou: th« consent in writing of the curator, hereillaftel' provirlorl I'm', it "hall 1101 issue OJ' rcissu« any of its notes until authorized by the TI'P;I:<lI1'Y BOHrd so to do,

121 Xu such \lote shall be for a SUIH h's:; than five dnllars, or ;:;il.OI'

Ior :lIly sum which i" not a multipk- of fivl' dollnrs, niuh.iplos.

;;3') Exccpt :I;: hereinafter pruvirler], the total amount of the Amount no{p:, of a hank ill rirculntion at any t imc shall not ('xcccd the limit .. ,!. aggl'egn to 0 f

ud t lu- amount of tile unimpn irr-r] paid up capital of the hank; and

fb) tho amount. of current gold coin and of Dorniuion notes held for tlw hank in the central gold reserves hereinafter montioner],

(4) The Association may, with the approval of the Minister, Appointappoint three trustees and the Minister may appoint a fourth trustee, mont of and the trustees :'0 nppolntod shall receive such amounts in gold trllstN",

('oill ;uid Dominioll Ilo(e", 01' ('it!H'i", It" nny bank mlly desiro from tiUll' 10 Hnw 10 d('p!l~it with th('m: amI slwh mUQullbs 80 dopusltor] an' horoin "erel'I"cd to as "routrnl g<)Jd l't':il'l'W'S" and shall he held alld III-all wilh in l\('j'fwd!IIl('!' with IIII' I1I'O\'I;-lou,; of this Act.

fill TIl\' Aii::-Iwint ion mnv make by-laws, J'ules lind 1'<'I:~lIlt\t.iollS lInd"I' I'I'IHioll Oil I.' Jllmd"l'd ;illd t\\,PI11y-folll' 'of this Ad. l'e,:;peding till' (,ul'lod~· Iilld IllnrHl~i<'llwlit of tho eoutral gold I'P:;('I'\'(':, ami tho ClllTyiHg out of the pl'o\'h.j()lIs of this At! l't'lating (0 s\leh I'('S('I'\'\'",

(II) WIIt'Il and ,II long as the amount of uol('!' or It bank in eil'l'lil;tliOIl ill exec;.;:; of its unilllpHiI'('d paid-up enpit.nl is less than til(' HlilOltlll dl'pnsil('d hy it ill till' ('(·nll'n! gold J'('~l'I'\'('!", til!' I.'X('('.';$ of thl' ml\Ollill so dt'lltlsit('d shnll belong (0 the bank HS its pl'oj)ert,y,

Hnd tht· hank llluy Ilppl~.' 10 Oil' trtlst('c,.; ful' II return of the cxeess :

In!"(. uicnt iouud, ulld upon )'('('('i\'ing from the bunk It stntoment signed by the chief uceountuu], :lud by the g'cll('ml lIltlllagt'1' or other principul ofliocr II('XI ill :tulllo)'ity in the InHnag('lllcnt of tho affairs of till' bank al Oil' t im« the !"latelHellt is signed, lind othcrwis« in the Iurtn /lI'o\'ided by ~:lid by.lav's, rules 01' 1'{'gulatioHB, sett ing fo)'tll to the· Ill'!"t of til!' infol'lllution nud belief of these OmCNS tlWllllOtlllt. of til!' notl':; (If the bunk in cireulntion on tho date of such statement, tilp tl'lIl'kl's i<lIali rvturn till' wholo 0\' IHut of the d{'po~it, of tho hank. as the ('n~e may be,

WHh<ir;lwaL (71 On ami from the date when such statement is transmitted

by 1'(;gi,,:tcl'cd po!'! 01' t!('li\'('I'(,d to tho trustoos, tho amount, applied lot' shall, Ior the PII1'POI'(, of the statement to be mnda by the trustees to the nlini,,(t'I' lillI/PI' slIb"petioll nine of this section, and (01' the IHII'}lO:<(' of Nih'l1lntillg 11i(' total HlllOlln( of liJealltiloJ'iz('d 110/1' cireul:ltinn of till' hank, b{· deemed to hnvn been wit hdrawn from the

{'Plllral gold I'P:<P!'\'('S' find shall not. ho taken into account in such stnlt'llH'llt 1101' ill('llIdl'd ill such caleulnt'ioll,

(8) Should till' total :lIl1(HIIlt. of tho notes of tho bunk in circulaUnt; lx- found, bv /,('a:::Ol) of such withdrawal. to be in excess of the circular ion of till' bunk authorized by this Act the bank :;h&11 not 1)(' tlC'('Illl'd to ho 1'e1('n~('d or rclicvr«] fl'0111 any of the PI'IlIlIt iI'S imposed hv this :\('( Ior ei)'Plllarion of the nolcs of a bank in t'XCC8$ of the lIinollllt authorized by this Art.

!H) The trustees shall prepare and transmit by l'('gi~tt'l'('d post 01' dclivor to the l\lilJistp;' within the lil'$t tw('nty days of each month It statement signor] by thorn showing the iunolli1t on each jUl'id>al dnv of till' pr('('e<iing Illootll of the dqH1!'it. of each bank in Illu central gold l'e",PI'Vl'S and not. WHhdl'a\\,1I 01' de(>med to be withdrawn under the pl'ovisions of this section,

(W) The l\[ini:::tt'r <hall. from t imo to t imo, and not Jess Irequently'than twice in each year, cause an inspeetioll and audit of the gold coin and Dominion notes held by the trustees to be made by offic(,I's of the Dcpartruour of Financt',

(11) It shall be the duty of such oHicc]'s

la) to in~p('('t, and :If'eC'rlain the amount of gold coin and Dominion lIo(es held by tile trll;;(c(':; for the respective bani:s at. tltl' (Lite of inspection: and

(bJ to nsccrtnin from the hooks and ae('oullt8, documonts and vouchers 'of the trustees the amounts of gold coin and Dominion Hotes held by the trustees for the respective banks at lilly preceding date named by the Minister,

l~~~L') \'-~"'s:_ '.

Ib~,-!aw~ n·l'l~dlnJ.:,

Ex,,>.,s..;:

fh~iH '~H silt h·~U !~a! }!-~'i'hi f\.'~(' 1'\C~ .. ~c

=,raf('UII'Hl te hi' ~('Jit !f) Jliuislel'.

J nsp(~{'"t iOIl .m.l audit ofg'uhl coin nnr] not r-s.

])a rt iruia rs nl in~rlt"~'liOJl.

\ , ~. J.
\
I • ( cein il nWnlB fJ'(JJnl sn"y fj

o this ;\, plIid b to cull in 1'Nh paymo of this

(I· As:-!()(;j/, tu nil ( appoinl ollie£' 0 vucan(':

(Il appoillt to the ' shall be rule 01' :

(10

say, fro and inol tlte sn id cireula ti fifteell r rest or J l' ct lJI' 11 11 prcecdin

(17)

section, been ma authorit., being, 81;~ to t.lle ?vI

(18) l'del'red interest t per annu of its TIC interest. 1"1

(19) ister shov day durin

(20) tw(~nty-eil and shaH of the ret f 0 I'm set J ehicfarccc director tJ other prin aliairs of

rc frOIn ~'pn"it{'d fW hefd

tbi.liOtis '1){'(}tIltg tnt! the

'1 l .t
.. ,
I ank in ,,; than :f~(i,~-~ nf °iwrty,

tt);ee,s:-; ;;,igncd r prinairs of in the 11th to mOllnt emcnt, III the

niued pplied ustees if the !' cirn the

sHch

zircu'ss of ll not nused f the

post each cneh bank vith-

fret, of lade

and mns

and 00- nks

(12) J ... ~\'or~' such oflh~(ll.' Slll.lll h.:wc a I'.ight (If .tl. ee.{·sB .. t. () the r;old P\lw"r, "I'

• I 1-·- . a.. - .. - I I I I ) I lIt I -. IH~'_~i'H:ltlr!

eom IUH}OI~lml(ln note::; III ( nne to t lC)()(.\S HIll Oe()OUll s, «)(at- "IIl!'!'l"

nWllts and \'(Hldwr$ 0( the tl'w<te(l8, and shnll be (,lItitled to require

froHl til(> II'US(N'$ such illfOl'lHution IIml explanation 118 mlly be IWe('.s~

Sl\l'y for the p('I'fOl'lUIll1{,O of his clutio;,;,

(131 Should the bunt, hccomo illsolV('n( within (,ht' meaning of Wlwu hank

I . I ." I I II I II I iUHlIh',mt.

t lis Act, t 1t'IlUJOllut. held 10i Jt. in l ie nmtra go l l'eS(,I'V('i; B III )0

paid by till' tnll"tl'(':'\ to the liquidator 01' other IWI'liOIl enliUt'd h~' Jaw

to l'olh'pt Itml rceoive Ihe 1l:<15('is of the bank and :-lIall be applied

in I'Nlce.lling Ow notes or such bunk in (~il'{,1I1HUOIl 01' ill making the jln)'nwnt. to tbc· :\1 illJstel' roquirod by soetion ono hundred and si)o;lt'en

of this AN nnd 1'01' 110 01111'1' IHII'I)O~c,

(4) Wllf'lI II VHrllney ill tlw office of n tI'lISt('C appointed by the Y,!,'nlli,1' in \ '.. '. I·'·' I III· . .. j t. ,,111"(1 of '-U:'Hl("lltloll occurs, ly 1'l'~lgnntlO/J, (Olltd Ill' (J IPI' cuuso, It u'ustce (I'''~''''

to fill tilt' VIH'llllCy slHtll, :;uujeet. to the appl'ovnl of thl' j\linistcl', be . " uppoinled by the th:l;(Jelntioll; and when it VIH'Il11C,Y occurs ill the

Offj(ll' of II tl'lIstee hpp::lnter/ by tho Minister, the trustee to fill \.he

vucanoy shall be nppointcli by the .M inistcr.

(15) The 1'(,lIlUll('l'uiio',l of trustees, including that of the trustee H"II1I1IH'l'a-

t ion of nppointcd by the 1\lini8[(',', and nil charges and expenses jllcidcntnl tl'll~t"""

to tIll' establlshmcnt nnd ll.:dllfennnec of the contrnl gold rcserves,

shall he 1>0I'!l(' by till' :\ssoeialioll :I:; the A:;'''~I('illtioll muv, hv by-law,

mil' or l'rgILinti()n detcnuin», .. '. .

1,16,1 During the usual seasnn of 1l10Vilig the {,I'OPS. that. is to Additi'"';ll say, 1'1'011\ and ineillding tite first day of Septembcl' in any year to ;1~~,!:,y,:~II~tll and illC'luding till' last tiny of F()lll'IIHI'Y next ensuing, in urldit ion to t'1'OP",

the said amount of !lotes hereinbefore authol'ized to be issued for ('ir('ulntion, the bank may issue its notes to an amount not exceeding

fifteen pel' centum of the combitwt\ unimpaired paid-up capital and

rest (It' I'CS('I'V') fund of the bank as stated in the statutory monthly

returll lllade by the blink to the Ministi.'!' for the month immediately

pr{'ceding t,hat in which the additional amount is issuer],

(17) Whellow!', under the nut,hol'ily of tho next. pl'f.'t'cding sub- \'O{ !('(' of section, the issue of an additional amount, of ~iOt~'s oft he bank has i~~;:.;~ iouul been llHllle. the gencl'lll manager, 01' other prllleljl:ll officer next. in authority ,11 the manngellH'nt, of the affairs of t,he bank for the t.ime

being, shall forthwith give llo(j(,P rhcrcnf by I'Pgistel'pd letter addl't'~sed

to the n-linister and to the president. of tho As~o('intion.

(I8) While its notes in cil'Nrintion arc in excess of the aggl'cgatc Inte1't,st on referred to in ~lJ.b~eeti(}n thl'ee of t his section, the bank "hall pay i~I,~~~,twIIIlI inkrcst to the Minister at. such I'[I(C', not CX('C'celing fivo J1('r centum ssue.

pCI' annum, ·as is fixed by t.he O,wel'llol' in Council, on thc amount

of it.s notes in cil'(}ulation in cxee&=; from day to day; and the

interest, so paid shall form part of tho Consolidated HC'venue FUlld.

(19) A return shall be made and ~(,lIt by the bank to the Min- HC'!!l1'1l by ister showing t.he amnll1t of its notes in eil'C'ulntion for each juridical hank. day dmingallY month,

(20) Such return shall be rnadn up nnd sent. within the first TillIe nrul twentY-eight daysaft-er the last day of the month next preceding fonll of and ihaH· be accompanied by dcc~al'ations which shall be a part 1'<'(111'11, of the return Hnd the return and well dceillJ'nt.ion shall be in the

form set forth in Schedule I to this Art., and shall be signed by the Sil!lIatul'cs chief accountant, and by the president 01' a vjce~pl'esidellt or tlhe !licl'eto. director then ncting as president, and by the genel'n.J JIlanager 01'

other principal officer next in authority in t,he management of tho

affairs of the bank at the time at. which the decl'al'ation is signed:

33&

H~'~"';l: Ii!~:l.jr;-,i,j~'~·S., ;{·i-S . .;.. I" lhL

)J'IXilH'nll f'q·'!;:.dh1ii

VIr,·,: ,,:' rt-'liTldlllll til' illlpall'lllt'itt of cnnit n l.

('i », u;a t j;)11 l<Si'\\ ilt'n'

I hun in ('allad,,_

Hard .. c tun HlI'lleill:!

bu .... jtH':-;~. t fI be ~ubkcl In [-Ili~

Ht';'! iun.

l.i;-dli!it.\" of sh n .. (~. h():tit,!,~.

Pr'I\'i"j'l!I lor l'l'~i II\'L ion.

"Shareholder" rl t'Ji 11("1.

PrMidpd, hO\\'C'\'CI',t hat (.he GO\'(,I'llOI' in COlwell ",hgll have l)(lll"('l' frrnu tlnJ(' 10 thor to make such IlIlH'nd-lllt'llls nnd additions t.o the itt'!ll~ required to be ::!'i fOl'th ill Ow said 8elwdlllc, nil ,}w may deem I'XIWdil'lli.

Ii l. (II Subst'd ions UII'l'!, t l) l'i~ddepn, both inclusivo, of the nexf PI'I'('('ding ",pelion shall 1Jl' rPlwaird on and from tlte dny Oil wilieh Ill\' Hank of (':toad:l is atdlwl'izl'dto corumorrc« business.

121 X()t\\'lth~tnlldilJg anything ('(lntain('d ill the noxt p),(,('N!ing '['('linl!. nil and aftl'I' t he day on which the Hank of C'lllllHla is t1l1thol'iZi'd to 1'llIlllIl('IH't' l)ll"ill('~'-" t hI' nmximum (\11101111: of nul rs of n bank ill ('iI'l'ul:t1 ion at nnv tiltH' shnll not ('x('C'cd the nmount.of Ole uuimpni!'!'d paid-lIJl ('Hpitnl or the bank on the said dn~' 011 which the ilnnk Ill' (':lIlndn i,: :I lit 1I(lJ'iz('d 10 corumonco business, und on thr. lil'''' dB." of ,J!lnU(\I')'in ear'lt year for 11 period of f1w' ycnrs rom- 1Ill'llC'in!!; on the first dav of .l anunrv ninet'('('ll hundred and UliJ'lv-six the ~nid 11I(IXillltl"'l, ~lta.fl Ill' 1'(,<1\1('('1'1 by five 1>('1' ('('IlIIlHl and OJ; the lil':'t rla.'- of JaIl1l111',\' in car-h yenr f'or n period of the years ('0111- 11I(')H'ill!!; on the Ilrst day of .Innuarv ninrkCl1 hundred and forty-one till' sni~l maximum shalt' b(' rcduoodhy ten I'U' centum and thel';'after until Parlinmcnt. furthor cnncl.s, the amount. of notes of a bank in ['ir('ul:lliOIl shnll not. ('x('('('d twcntv-fivo PPI' centum of til{' amnunt or the 1Il1impail'cr] paid-up cnpitnl of t·lIr hank, Tn the event of any f'('dul'(·ioll nr impairment of Vhc paid-up capital, tllP maximum amount of notr-s of rho bank which mav be incil'C'ulatiotl shall be reduced to thp amount- which would 11l1~'e been authorized if tho reduetiO'I1 Ill' ililpairlllPnt. aforesaid lind occurred on t.he day Oil whiol, tlhe Bank of Canada "'as 1Iuthor!zrd to commence business.

I~r) Tho next preceding sub,,('ction shnl] not operate to Iimi! Vhe a!l11lllrit~, of Hlr bank to ii'f'w' notes under I he provisions of OlP next su('cl'cding 8cetioll of this Ad, prnvirll'd that the totnl amount nft.hc notes \,'hif'h mHY br- ill rirculatinn in CmUl(k\ and elsewhere "hall not in any eil'l'ull)stnlll'(,;;: ('x('('cr] thp amount of t.hr iill.impail'rrl' paid-l1p capital ofthc bank.

(4', Tnt hI' easp of a bank autlIOl'i;wd to r(;lllllWner business after the day On which [ihis section comes into force, the SHirl bank shall Ill' subject. to the provisions of this:cet.ionasif it. had been authorizod to commcneo business 011 the day on whicl. this section comes into (lJ)(·l'ntioll.

]:\'SOLVENCY

125. (1 -} In t.he event of LLe propert.y and as-sets 'of the bank Iwin£!; insuffir-ion t to pay its debts and liabilit.ip;;, e:wh shareholder of tile bank sl.a l l be lin hh- for rh e dcficienev tll nn amount equal to till' par value of the shares hold by him, in .adition to any amount not paid up on such shares.

(2) On and from the davon which the Bank of Canada is nuthorized to commence business tho liabilitv of a shar0holrler of a hank under this section, in addit-ion to any :amomlt not. paid up on his !"h a res , shall not. exceed that proportionor the pal' value of the f'hat'r:' hrld bv him which the amount of notes which H1(' .bank is authorized In' 'thi~ Ad to have in circulation in Canada hears to the paid -up capital of the bank.

(:3) CI Shareholder," within the meaning of bhis section, shan include an undisclosed prin('ipa.Jand, to the ext.ent.of his interest, n cestui que trust, on whose behalf or for wboRcbencfit shares ih the capit'al stock of the bank arehold, R.S., e. 12, s. 125, am,

HOUSE Ol~ COMMONS

STANDING COMMITTEE

BANKING AND COMMERCE

MINUTES OF PROCEEDINGS A ND EVIDENCE

Respecting the

WITNESS:

Mr. Graham Ford Towers. Governor of the Bank of Canada

OTTAW,\

.r. o, 1''\'''I·:~L\l1(JIo:. Ul31.

PHlNTEH TO '1'111,; KING'Il MOST j'XCELLj'::-';'I' :lL\Jr;;S1'\' 1939

MINUTES OF PROCEEDINGS

'l'UUUS));\ r,~Mny .j,m39,

The SlnndillJ.{ CommiHel' (1) Blinking nnd Commerc(! nwt HI, 11 u'eloek n.m., the Chitinllnn, MI', 1\fool'o, presiding .

.1I"lIIbtr,'! pn."tllt ::\1('''''1'5, Bnker. ('1"111'1' ()'ol'hSlm/HlfU), f'!(':\\'(,I'J)I':wh .. mnn, DOlllwlly, Dublw. FOlltailW, Hill) Howard .• I aqUN;, Kirk, Laol'oix (!Jccmcc), 1,Hndt'I'ynll, Leduc •. ~I:wdonnJd (/Jralll/ol'd City) I 1\1 <:O(,CI', Moore, Hos,,: (St. Paul's), :3((',"('11:-:, '1'11;\'101' (Nanaimo) I Tuckm-, Vion, Wnrd,

In nfiCluianco; .;\11'. Graham Ford Towers, GOVl!I'HOI' of tlw Bank of Qnnnd:,. EX(lmill:Hion of 1'It-. '1'0\\'('1-$ was continued.

1\1(':3'11'.';. CI('anl' nnd :\[('0('('1' slIbltlil(cd qlwslinns 10 hI' IJl'illted in lhis tiny's Pl'ol:(\{'dill~$ and :ms\\'('I'l't/ by 1'1J'. TO\\'{,I'!' ill dut' ('O\ll'S("

1'11'. 'fOWI'I'S sublllilled illfOl'l1Htlioll 1'('que~Ii'd at !II!- l;t,,( ,dUillg by several lllcmlll'r", 01' lite COlllmiileo (See Ali]J(mdi;r; a,l").

It Will; agreed that MI'. Towers add to this day's P!'(w('cciings l'C.jel'CIJeOS to pngei; of the cvidcneo where mav be found certain infol'mation l'IKlw'sled during the course of to-day's examination, and alrendv dealt with by Mr. TOWf!I'S in previous stutcmon]s to tho Comlllittec, (Sec APJ)<'Iulia: "B"), '

At 1.05 p.m, the Committee adjourned until to-mort'ow, Friday, at, 11 o'clock n.m.

n, AnSJ~NAUUr,

Cl.rt. 0/ lite Committee.

7SI6S-fJ

MINUTES OF EVIDENCE

:\Iny ·t, waH.

The Standing COllllllitU't' on Bunking nnd C'OI1l11H'I'l't' Ill!'! at II a.tu. Tht!

Chnirninn, :;\11'. W. H. .'Iool'f', presided.

The CHAlIL\I,.\X: '\'1' hnvo II quorum, g('Jltll'llll'lI.

In attcndanc«, :\h. CHAU,.\:\I Foun TOWEIlf-;, (;un'l'Ilol' of t]H' Balik llf Canada,

Th« CH"\IH~L\N: :\11'. :-itl'vl'ns. you ha\'(' the Iloor.

Hon. ,MI'. 81'1;\'1';:\8: Well, 1\11'. Chnil'l1ltln,I have a numln.r of questions to ask when the opportunity nrises, but do I lllHlel'i'tand t luu it is tlle---

'I'ho CH.\lH~IAX: I have just, spoken to Mr. ~\I('C;t'l'I'.

:\11'. :;\fcCh:E1c What MI'. Moorr: said to !lIC, :;\11'. St(,\,(,Il~, \\'(\'S tlmt. ~'(}11 wanted to ask foul' 01' fivr: questions this morning. I am ill the midst of my examination. ::Vly difficult.y is I haw <I) go to the public accounts committee and I thought I could get. through hl'l't' to-day.

Hen. ::\II'. STE\'E:\S: J think possibly it would be better to let Mr. McGeeI' finish,

Mr. HO\\,AIW: Why not take halt' all hour and go to yuur other committee?

1\[1'. DEACIDL\;o.;: The trouble is, if you take half all hour it, won't. be through by that t imo.

Mr. :i\JcGr·;r.:n: The Oldy thing about it is I cunnnt. be h(,I'(' nUl'I', I think, to-day. :i\J~' time will be taken up by till' other l'olllll1i.ttC'(, b('(':m;':c we are getting into senora I important. lII:tttC'l'f' here. r thought that if 1 finiplled my examinat.ion here ('\,(,1'y mcmbrr of the cOlllmittee would ha.\,pthe basic facts of our lllondary system before him and in his questions cnulr] make usc of these basic facts as he got'" along.

Mr. Ih:ACIDL\X: Is MI'. 1\1('G('(')' going to lak(' the whole day'?

Mr. LA;o.;nEHYor. If he docs it will savo 1I~ asking a 101 of questions, ;l~ he is really cO\'{,l'ing the same ground.

:\11'. Vnex: I should like to make whn] T think is H constructiv« remark.

I ani addl'cssing mvsclf to Mr. MeGeeI', who is an eminent lawvor. r am quite oonfldont 'that' he will take my remarks ill good part. It. SC:ClllS io me that. what would be desirable to san' time as well as obtaining his nbjrdive would he to put 011 tho record the fads, awl limit himself, as \Y(' do in COllI'!, to asking: questions Oil fad". When the fad" nrc Oil the rccorrl we can then den'lop the nrgument. It seems to me that we art- slipping lier« like \YC do in court. It is diffi('ult to do otherwise. Sometimes in court, and \H: havo clone it here. \YC leave the line of question- to cuter into a stutcmr-nt. niade DB questions of policy. J mnl«. thtsl' remarks in a most. fricndly way, hoping they will be useful.

The CrL\lR~IAx: Thank you. All right, Mr. J\JeG('{'I'.

)fr. :\JCGEEH: I had that suggestion from. Colonel Vicn ~'r'~:tcrday, and it, is quite in line with what is my own dC'sire. TIll' questions IhM. r proposr. to base on these C'l1aetlll{'nts that I am putting on the record will givc the history of OUl' ball k i nc enaotmunts.

MINUTES OF EVIDENCE

:\Jay 4, Ulan,

TIlt' Standing C(lIlllllill\'P Oil BUllion/.( mnl Conunr-re« 1111'1 lit II a.m, The Chalnuau. ;\11', \\" H. :>tlmll'l\ presided. '

Tho ('11,\111:'1,\;<\: \\'{' huvo H quonun, gl'lItlellwll.

In HlluUirlllC'I'.' ..\11-. GHAlIA:'1 .FOUl> Towens, GIl\'('I'IlOl' of I hI' Bnuk (If Cnn Il,tin ,

Thl' CI!AIH~[A:,\: "\11,, HI ('\'('IIS. you huvo tlw 11001'.

Hon . .:'Ill'. S'I'I,:n:Ns: Well, MI'. Chninnnn, I htw<, a lltllllim' of ql!estl(IIIS tn fisk whl'l1 t he oPJ1(JI'tllllity nrises, but do I IIlHit'I's\und that it is the~." .. -

The CIUlIl:\L\N: I have just. spoken 10 ..\1,,, .:'Ilc{l(!(','.

;\h-. ..\IcCirmu: Whnt, ..\1 r , ~\, "(' said to me, "\h. ::;11'\'('11':, W:lS tha.!, vou

wanted to ask fo I II' 01' five !}lH'stIV this IIlol'lJing. J am ill Ih(' midst, of 'my ('xHminnlioll. My diHil'ulty is I han to go to the publi!' H.('(,Ollnts ('omll1i((('(~ and I thought J noulrl gt'l through h('I'(' tn-dav.

Hon. :'lIt-. STl~n:~:-;: I think possibly it would he hct tvr to let 1TI" Mc<;('('J' finish.

MI'. How.vnu: Why 110t· take half un hour and go io your ot lror rommittoo?

..\lI'. DEACID1A:,\: Tho trouble i:" i r you tnl\!' hal filii hnu I' it \rOll'! btl through by thnt t im«.

MI'. l\IcGI,:r,:n: The only thing about it is I cunnot be hpJ'(' IIftl'l', I think, to-day, lVly t in«. will lw taken It]! h~' t he other f'(lIrlllliuc'{' bl'(':llI:'<' we lire getting into ';<'\'('1';11 impor'tnllt. mattpl''; here. I thought that if I fini~h('d my ('xHlllinnt.ioll here overv member of the l'olllnJittt·(, would han tll(' hasi« fact::! of our monetrn-y S~'''('I;1 before him and in his questions C'ould II1nl\(' til'\' of tbps!.' basic facts as he goes alonll'.

2''''. lh:ACIl:\IAN: Is ;\11'. 1\1('(;(,(,1' going to lake tIl(' whol« r/:t~.,? 1II'.LAxTlEH\·or: If h(' dol'i' it will >'nn' us n,::king :t lot of qll!':<t ion", as he is really covering the same ground.

A It'. Vnsx : I should like to mul«- what I think i" a ('on,,[I'lleti\'(' remark. r Hill addl'p,,:,:ing; mvsr-l] (0 Mr. MeGe('!', who is all eminent 1:1\\,),<'1'. I am quite confident thut. )1(' will take my remarks ill good part. It ~C('lli"tll me that, what would he desimbk 10 "an' time as well as obtaining hi" object ivo would be (0 put. Oil the 1'('(:0)'(1 the f'acts, and limit himself, 11" We do in court, to asking <l1I('8Ii911:; on fad:;. WIl('n tho fa.d:; nrc on thc rcr-orr] WC' cun then develop the argument. It seems [0 me that wc HI'(~ slipping here like we do in court. It is diffieul] to do otlwl'\\'iH'. SOllletimes in courr, and wr: have "'JllC it here, we lenn' thr- line of questions to enter info a i'tntl'lll('l1L made .m questions of polity. I make I hp,,(, remarks ill a. most, friendly \ray, hoping they will he lI:<cful.

The CILHJDIAN: Thallk you. All right, Ivfto. AleCC'er.

:\11', .}fcGEEIC I had that suggestion Irom Colonel Vien ~'('tMl'day, and it. is quite in line with what is my own desiro. The questions i 11M T propose t.o base on these cnaebmonts that I am putting on the record will gin the history of our banking enactments,

#11 Jh. Jte(lCCt:

(~, WI' W('I'(~ dp;llillg lit lilo ('10:'1' of Insl ('\'pnillj,\ with subseetion (4) of

.'ill Iii till' Hnnk A"L i'lwptpr 2,1 nf till' SUI! 11 If 5 'of Canada, lO:ll, l'ntitk'r!

All :\i'l BI';-opr\,tillJ.{ Banl\~ :lnd Banking, I think WP got to the pointwJI('I'O we WITi' .H;;!'\1!"~in~ wlw!lll'1' 01' not thel'j' Wilt' an~' nlhl'!' ;luthority in Ill(' Bank Ad, IIIwn wldl'" till' hank!! ('1luld I""lln dpp.l,d!';:1,;1 subsriuuo for IlJOIH'~'; and r~ho\tld ilkI' hI draw ~'()\II' IltH'minl! !II, fir~!' ill;\! i! i" dWI form of dt'po:;it which is n:t'et'j'('d In ill "p,'lioll i·I 01 thp ~1:I!'~liihlll j"!llllllith'I' ri'pOlt. This 1'('1)01'1, says:

"UIt' bulk of ,j,,'po"IH Hl'i;-1' otH of rh .. at'l!<lll of 11)(, hanks thl'ml'!'lve>" for by gl':lIHinr.r joan;;, nllo\\'ing monov to ht• dl':lwn nil uu {werdmft of purl'lwi'ing 1:'('('Udli,,>, n h.mk ,'1'1':11('" a !Tnlit in il" hO\lk~, which j,.; rill' pqui\':dent of 1\ (/NlO~i!. 'j

, I t hink vou will :lan'I' th:l! ",111'11 t lu- hank lake>' n !!:O\'('rnlnPllL securitv and t'x('ilnllg(::' t i ltd for:l dl'po:,,J lit dnn; ilH'I't':"',(' ! h. hnuk is dcposit, 1ll01H'Y iiI ":n'lIlntjnll'.'·· A. It dot's iIWI'Pi\:<l' 1111' bnuk', df'pnsl, -, otli('f' thill~$ Iwill~ equal.

Q. (J1I;~idp oi "1'('li[\1\ ,1. tlnu tYIl!' of lOltllllll i-, I submit, not ~lW('ifl('[dJj' :lulliol'iz('d h~' :In.\"·· .. A, Ai' I ~nid .u Olll' 1;1-'[ llll'f'till/!, I dn nut ngJ'I'1' with that ill'l'lil/iil' I think that the 1l1l11WI'\\1l.<: $('!'liOB:- of tIll' Bank Aet which uivo the banks power III huy gO\,\,!'III111'l1 t bonds, '(l mako :ld\,Il11l'P;: and t.o Il('('{~pt d!'ih)"it~, I'OIl\'t',\', nlltlu'ally-,-.it Iwin!! (lIp Bank Ad-·\\'hat the btlsin(\~.s of bnnk iug is.

l~, ,,',,:1. ill [IllY event: outsidr nf 01(';:(' f,!'1'lll'l'al 110\\'('1';<, thaI' if' no spcrifle a::!li.11·i!y (0 i~~'I\' a bnnk ,kpn,:ii u,; a mcnns Ilf purchasing 5ccmitY'?-A. I do lint :If[l\\[' with tlJl' \\'O!'d .. i~,~IH'," 1 think when the banks make a loan they credit the :\('('01\11(. of tlte depositor. He may 1('1\\'c that, with the bank, 01' he 1I1:1Y w it lulrn w it. 1 think that the Bnnk At-t as n I\'hole,,-p('l'hnps this j" 011 t in- "mint'!' :\ f(\()Ii~h l'l'mtl!'k--r1pa15 wil h Ihl' bll;,:i!H'''s of banking, and pnrt of tiH' hll~illl'''':' of banking is l'efcl'1'0d It) in th0 Mnemillan report.

Q, The point I hav« :"lll'citir-nlly in mind 11t·!·c is whether or not thoro is :In~' leg:~ 1:1 t i\'t' nut hOl'i(~' all! horiz ing t ho hank, 10 11I11'('h(\$(' :'(,(' urit ies by i!ll'l'l':l"inl\" rill'il' !l101l('Y ji:lhilil~' tn the depositol's'). __ :\, TIlt' lcgj"lati\'(. tlut.hol'ity ('(}\'(>I'S ihl' bll:,iJl(':'s of blinking, Th« t~·pc of thi!lg you llH'lltioll is pan, of the IHhhl(>~:i oi banking': ! cnnnot !Hld anything to that.

Hun. :'.[1', STEn:xs: \\'hat about seetiolls 88 and 89?

:\[1', :\IC(;EEIC j do !lot think 0](·\· authorizo that. I mean. that is mv own interpretatio!l "I It. ..\r~· illtclVI'('tHtir;n of it would be thnt !'('('Iions 8'8 ~iil(1 81:l ~luth'l/'iz(' the t akinu of s('clII'itic·8. do t hev not? But the point that I hllve in mind i" rl](,,.;(' W'Il('!:al jll'O\'isioll:" apply tl; t ln- hank capih(l and thry apply to rhr- l!IOll(,~'" (11l dq)()~it which arc not treated by the bank itself incrcasing dt'l)(l:iit" :i," :1 liH':ili~ of )JlII'eha:;ing securit ir:" or making 10Hns 01' financing ,"'l'r'draft",

['I!hmil thprf' :\1'(' threc more forms of eapiLd !lvnilable to tbe banks.

There i~ its paid-in 1':lpitaJ, plus its right to issue rno/hY on t.he lWI'f'entages pl'o\'idl'd unde!' t ln- net now up to the value of the unimpaired capital. There i,· th(,11 ri!e d('po~itol':'. tl,c people who plaC'c money which they OW11 with the hank. on dC'jH);'ii. Tho» there is anothpr form which the banks exercise of ill<'l'('a:,ing j heir (kplJ~jt-" as n means of IlnHncing loans, pUI'chnsing ~ecUl'ities :md financing o\'l'l'drafU;. ::\0\\', you segl'('gate these thl'('e pO\\'('!'s of finance, I am "uhmitting (hM with the exception of SUbsection (4) of section 59 there is no l('gj"htiw ('nndnwnt which authol'iz('s the banks to employ tha: kind of capital. ..\11'. 1\l\\'{'r,,' answer to that is that YOl1 must infer t.hat that power is given to them h,\' i'('ading the Bank Act as appl~'ing to thc husiness of banking, --A. It i" not. of ('0 U!'S c , a unilateral power, I do not, distinguish between the two types 01 dcposi; you mention, the one which is brought to the bank in the Iorm of leWd tl'ndl'J' e:t;,;h OJ' any other form of (;epoi'it' the bank may have, It is .alwnys fi voluntary actlo» of the depositor which leaves that deposit on

r:\I" n rah.un }"»'<I '/"""(,I'S,]

thel of Ll Sur,): n:vls unile

I whetl bank whic: ('11 try I do'

( the d UJlOJl which

(, COllin: tradir dccep

(,

<, power any I an al') parlin would

H Aiay 1 them I to my bank 1

.M the ha

H M has ~l your n transar

H( M: and th

1 _ .•

na ving

and wi deposit entry j

He Ml public total 111 of morn of Q'11!rj of the I arc dea

1\11'

IMNl{ING liN!) COMMEUCI,'

'film Of 9:H, t'tllitJed lit WIH'l't, Wt~ if' Unnk At't HId t should ,it whith fA !'t'POtt, snys;

lor 'II\' pur!'il:1sing F,d('nt 01' Ii

tho books of tho bnnk, and briugs it to the bnllk; it is ahntysvoJunl(U'y l\et,lon of I,he depcsitcr, The Bank AClitself flllthol'iz0!l the bnnk to l'{l<!oivQ deposits. Sllrlily I would be right. in nSinuning thnt durillg the (lOtlI'SC of l:h(l vill'iOt!.' nwisfQ\ls of the Bank Art its provisions wore p:v,sod by n 11ll.1'limHcnt which lUl!it'l'stood the business or bunking,

Q, I am Hot cl'iticizing the IJlt·NlOds l'mpll)yod, WhnL I am gutting at is whether 01' not there is lilly h'gislal,ivl' en:WlIlH'n(' spedllr'nliy nllthol'i;~ing thl) banks to pUl'ehasc securities, government bonds, by lllerely wl'iting an en!.ry I which is the equivalent of the purchase price ill their books and enJling tehut <'tlt,t'y n, deposit ·?--A. If it is not a tlt'posit" then I am '.'llmpl,·!dy oll' (he track, I do not· know what it is,

Q. or course, ns 1 said before, Uw only t.y[)e of deposit. tilere is ill that is the deposif, of gO\'':I'tlnwllt, security with the bunk lind .tbo d('lhlsit of the ink upon the barker's books which ('rentc's the deposit.-A, Th[lt is, the money which you have in your savings account, for example, is not a deposit?

Q, \\"t,n. I should like to go iuto that Inter. What, I Hill givillg to the conlll\i~tl't' is i.he stalemcnt. that the whole process Involves the pl'\\cticc of h'nding short in money aud l!'adillg ,long in credit liabilities.--A, That is a very deceptive an:t1ogy, Hlld 1 find it confusing.

Q. 1 think probably i~ is n IlwUe]' of argument lator OI1.--A, I see .

Q. But if thoro is any other suction specifically authorizing that USe of power, 1 have not been able to lind it in the Bank Act, If you know of any I should like to know it'?-A. It would not be proper' for illC to enter into an argument on legal matters, !\II', ::\1('Oe('l'. I SUppose that the act passed by parliamcnt should be eOlllllwnl{'d on by UIO law officers of the CI'()Wll, They would be the propel' people to comment on that.

Hon, 1\11', STEVg!\S: Mr. McGeer, would you not IT,ctthnt in section 7;''1?

May I just intC'I'jcct one l!uggesfinn to you? If 1 go into tho bank and tender them my note fOJ a loan which they Hl'ecpt, and then they place the proceeds to my credit, you crcato It deposit there, but is not the real transaction here: the bank has bought my paper which is, under section 75, within their power'?

lUI', JHcGErm: Wh:,t I am submiuing is thoro arc three ways by which the banks can buy that note.

Hon, Mr. STEVENS: Is not that what they do actually?

1\·11'. IHcGEER: I do not think that is what they do. For instance, if the bank has a paid-up cap!tal of $1,000,000 and you walk into the bank and you give your note and gJt a f1,rt of that $1,000,000 of paid-up capital, then it is a clear transaction,

Hnn, Mr. STEVENS: I am not saying that.

'Mr, MCGEER: There is another way by which the bank can buy that note, and that is by using depositors' money, Now, there is a third way, without having access or without employing any portion of the bank's paid-up capital, and without going to any depositor's account and employing a portion of the depositor's money, the bank has another means. It simply writes a deposit entry in the books,

Hon, Mr. Sn:n:xs: I agrce with all that.

Mr. MCGEER: As a result of that. you have the banks representing to the public that they have on deposit a very much greater sum of money than the total money in cxistence in the whole country, and far in excess of any amount of money that could be issued on bhe total volume of bank reserves in the form of gold [wid under the aet. I quite agree that section 75 deals with the powers of the banks to loan and purehaso securities, but the assumption is that they arc dealing with their own captial and money actually on deposit,

MI'. HOWARD: The depositors' money? '

'm H'('tlrity t moue\' in 'Ping: ('(iua1. spedfle-ally I' wit 11 that. '11 I!h-{' the

to accopt • _H6blC·SS of

no specific ?--A. Ido loan they mk, or lIe t his is 011 HI part of

it 11101'(' is with:s by authorit),

an of the

, mv own 18 :ind 89 [ have in

apply to !1cl'casing financing

.e banks. I~{'entages I, There with the (:l'cise of 'PClll'ities

finance, therc is kind of [JOwcr is banking. cecn the .: in the y have. iosit On

, J • .: '. ~ "', • "i '

. ... ."1 1 '\..

~ - - . " .

• " '- ' ", J '"': ( •

, .

341

T\i r,';hlhHolhnt 8l"PliOll tlHlt Ih,:)y hU\'f:UW IlO\\'\'r In ,x'('l'Ort "\',,U'IH h) liu:ull'P IU1Wi' 'I lid lnlli~;:i:ljml!" it' ~ullwlhiug(hl!t I ennc'l'! ini (-rpr«,'j nUm.l 0\ Uw In w, I 11lIlY!),o~'nth'dywrollg "!)!)\)I II. l\Iulnll I w:mlhi 10 j!('1 rrnm :.\lr. 10wOI'''' WHS. III IHldulOn priWiliinlJ~. iii I hef{' any :-p('dfle f'!ll\tIIlWllt lUll hOl'iting Uw

NOll)!' Hl llHH1(· hv IhojWl:hl In C1HllldJ

AI ['('Ill).!'! wb () f OWl'('P 11m!.

~h', TOWtH,,: I would snv this, that in ~\'tli\ll) 15 ull YOU find thai lite h:lllk" fin' mIIiH\I'h~\.'d In ('lH!.a\!,: ill and c':tn" Oil such business II;': lW\·ltliJ)~ I{l tIl(! ll\\"itwi'''' "I' IWllkin!!. 0:mv, I hn i Im,;im'i'~ i,l hanldng j,,: ('lll'riNI on in Canada ahd \" ,';u'I'it'd nn hi everv count I'V ill t Ii(' \\'ol'ld :tllli has I)(,C'JI curried on fur II lWl'inl\ 1'1 hUlHln'd" of ~'I';;l';l, '1'" :i"1'lIIllll' that l':tl'li:mll'nl In its "lIrioni' revisions of lilt' Bank A('I hml no ('(JIlI'l'plion oj' I h« j.u-ill1!"" of banking, an nssumpt ion whioh I wouhlnot mnko,

1: q, TJ

liil .\tl', .lfdh,/':

Q. I nll\~' It'll you. :\I! .. "l'O\\'!'I'S, ilnu vou can mSUIlW that t'OITI'C'tly hN'lw"e t() IHlU1\' lillhH" 1111'1\. ilWludillt! ministers of Iin:lIl1'('. it hns hecome a mark of SOphiHi'p:lt:Oll In l'H.V: "I dn 11\;i know anYlhillit ahout !lankin!! 01' UWIl('Y." One millidet· of Iin:m('1' hnldk dN·I;l!'vt! that 1)('(':\\1,,, Ill' did not know Hnvthin!.! n.hout fimllw(', bnnldnt!; ill' IIHHin', We could n~"!IIll(' from that thnt he would make n gnnd minister (;( flnuner-, .

:\(,,, l..\:\IlEIlVOF: Henr, IWnI'.

~ It". TO\\'EH';: 011 I he 01 JWl' ltn nd.--

:\Jr, :\kGI:EIl: Don't run a\\'a,\" with ill(' ilkf1-,:\11', Ilow.um: And Ill' did,

:\Ir. ::\ld;":I·:n: WI' went lIlillions dpt'lwl' into the hole of debt af'tor 11(' got ih"!'r than WI' WPI'l' befort' he ~tlll't(·d. If that i" n good minister of financo then J think it 11)11", 1)(' duo to the point of view from whioh yon are looking at, it. If you nrc looking at it from till' point of view of the tnxpavcr it is disastrous: if yon art' looking at it from tlu: point. of view (If the debt holder, of course, he wa~ :l good minister of fiIHII}{,C,

:,\11', TO\\,EI1~: (In tilt' OIlH'I' h.uul, :IPJl:llTllrl~' till' hll,"illl""'~ nt' banking lias ht'l'ollw :\ new ide:l to vuriou- pt'nph, ill tilt' 1:1>t fl'1\' Y('HI':'; it has ('0111(' nvcr t!j('!lI with a I'll"", ~o ;il ",p(':lk, and I -houl.l think that ill a good many eHH'S the infurmat inn has not bCl'n ]lI'OI){,I'ly assimilntod,

.It.i

Nfl -'Jr . .llt(/or:

Q. As a lllatte!' (If iati. von will ag]'('('. will you not , th;ll in uverv country in ih{' \\'01'101 t lu- qur--t ion !I:' fil1:11W,' :1' :1 11:1\101la1 peli('y ;:' lI11d('1' investigation and has Ix-cn unrlor o;perillH'lIiation !'it)' 1'01' 1I1e' Iast. lmndr'::'d Y('flI'S, rmd that dllrinl! t Ill' ]a='! I W('Il!Y ~'!':I r----

Hon . .\11'. 8TI':\"I::-;,.;: FiflC,tll,

•

of I w('11 poli vhrn llI1('j nttH aut! pew pnsi

Do :\'011 1'( jlurli'nmf'll! Illl1nagC'd r: jJl'}](h'Il!'(, v resources a

Do yo a" \\'(,IT /l) met in Ott. it, WHi< lair j)l'ogl':t nunc of rnonev : would l)(~t :

Q. SO of line if v Q. B~' q. Is I AII~tl'111ia, might sny ?

nil st-. J[cOUI':

Q. From HII2 WIH'll the Federal Hf'H't'H' Act cnme into hC'ing it.Jras been fi mntu'" of ill\'p:,tigntion and pulili« $t.udy h~' banking and COIl1JnCn'C' commit {('PS all uvr-r till' world=-A. 1 would sav 01(' verv wide~!)l'el1d eharad{'t' of the interest. alld f !Hrcflll'P t he ~t udv, cia ('" most ~p('t';fkally l\.om 1930,

Q, You an' aware that right at. thc PI'Ci'l'ntt·jme the govcrnorlllld the directors of thr- Icdcrnl 1'('$('1'\'(' ;:;ys(cmha\'r mnde n report to Congress that they believe thf' whole banking Iaws and svstcm of the United 86a(e8 should lw 1'('('onsidf'l'ed and rovnnrpod for tlhc benefit of the United States?-A. Reconsidered. Yh'. [11 1""':1lllpillg tlJ('~' arc thinking p:lrti('ulnl'ly of their internal orgunisutien and (.h(, clash of vurious authoril.ios in t he country, Th« rc'colllJl)C'Ilfln-

[:.\fl".(: [""ham Fort! Tuwers.]

B/)

(J. AIOI lishing n 13 countrv the -A. }>ro\'iej

Q, Do:

I think tha Q, Isu't Q. Ol! I -A. There rather than Q. No,

Thcre have

~~~JH~~: t,\;t I htmt rtl,oH

till'

UA.\'KJNO .;INO ('(H/.lI(Wf'H timl \$ nlso p:J\'tly hased 011. tim idol\ Ihnt vlIdou$. pWjl!l$ah; \\'hld,1 hllv:'. llyNl nUHIf' by I)('oph' who an: inil>l"('il\('d ill llIo\)('Ylllath'r" $h<mld III' lHV(';,<tl!EllH.,t Ihllpc t.imt IIH')' go nh(\1H1 with it·, i)(,I';tui"t' nlmost. all nil' PI'f1POi'!\I$ !'Illl III' found in. C:ll~:\(ln, so tho I't'~ml~ (If \.Iwil' illY('$t·iv;ntinn would he lu·1pfnl !t,we.

q. Ami )'(!\l will ilgl't'e wit·h Mw hnsi\' filltling of lhe :\1H('ndllllll ('(lI11mH IN' l'{"ptll"t whi!'h \\'(1::; tilNI in lO:H, whill, i'1~\h\S this in $.('d10n 280, 011 page HI) of Ow fl'po,'t :~~>

HOII, :\h', 8'n;n::,\s: The Hl'ilish I'ppor!?

tiw ,UHf wilt! (1); n inn:' 'Iiou

Uy .lit. MeOt('/':

Q, The Ihit·i$h 1'('I)(lI't. I nil) quot ing from i'l'('l ion 280 :«."

III The nW!1('!H\'\' svstcm of Hd" counlrv must 1)(' n IlHlIlll!.tNI system.

It is 1I0! advisnhlu, 01: ill~It'l'd PI'l\dil':thh·, 10' l'pg:lI'd Oil I' 11 HllH' UI 1': , syi'!t'1ll as all nutcmntic I'~'$ll'm. grinding out tll(' dght. result hy 1,11t' ollf'l'ntion of nnlurnl 1'01'('(':; nidod by 1\ ft'\\' maxims of f,!:l'Il('I'Hl nppli('ulioll a;,;1 .'dlll{' wl'II'\\'Ol'n 1'111(,,: or thumb. TIl!' owjOJ' Ilbj('(·li\'p,:. of II ,~I1\IJHI Jll(lllf't:tr~' )lol!l'j'-I'or (,X!lmp]", Ow llmill«'IlHlH'(' of t he parity (If tho fm'(·j!!}) oxt'hnnv;PI' wifhollt.nnn('('(';':':<lIl'Y disturbuneo In dOIll('~ti(' husiness, t.he avoid- 111\('(" of the credit. eycl<', m\d lIu' stllhilit~, of t,h(' prieo 1('\'1'1--(':1111101. Ill' nttainorl ('x('ellt by Ule COllst'lInt (,)\(,I'ri:,!' 'of kno\\']edg(" judgm('nt, and nuthoritv, by iudividunls )11:1I'<,d in a posil ion of 1I11t'hallell,!.(('nblt' indoIwudl'IH'(' with groat 1'{'SOll1'('('SHnd (','C'ry (('C'hnkai device lit II1('i,' disI )O~ i t,i nn,

Do \'011 l'ppal·1 nnv OUl!')' instance ill 111(' liistorv (If British finnncc where a pnrli"allwlltnl')' (,OIillnitlee rC(,Plmncnd('d the Il('(:d for th(' (,,,t.abliJ'llling of n mnnngod elll'I'C)H'Y system under the control of men of 1I1lt'hnllr'ngpabl{' indr)(,111101)(,(, who \\'('1'(> going to dl) the tiling,: IIU'11IiOJwcI hy the (')\('I'('i,,(' 01' gl'(';ll 1'(':"otll'('I'i' nnd every technicnl ndviee at, their disposit ion'?

Do you ('\'(:1' remember in Bvitish fill tI 11 c',' such swooping 1'C'{,Ollllm')HlntioIlS n" were made by the monctnry emnmittr-o of the IIllIH'!'inl ('(Jllf('I'PIlI'(' which lilt'! in OttnwH in 19:32, ('(Jllfhlled ill the ('Ol1f('I'(,I1{'(' of Loudon ill J!Ja:l. where it \\':1", laid dO\\'I1 that each of the Brit isl: Empi!'!' nnt ions shuuli] invoke a progrnmmo of nut ionnl moneturv poli('y whicl. would crcnto all alli:'1dHll!'(' of money and low rall'~ of illt('T('''t'?'~~·A, No. I han' IW\'PI' =<lIg:g('~t[.d that .I would not agree with that.

Q. 80 that \\"h('11 we ('0111(' to the work of this conunitt«. we nrc nut (Jill of line if we seek to imp: ovo our llIon('ial'Y :'~':"trlll'?---A, Certuinly not.

Q. By "I urlv, and di~('ll:,~i()1l wit 11 liJl' proper' nut hority '?~A. Cr-rt u inly not. Q. Is not that what is h(·jng done ill Great. Britain, tho Vni(('d 8tat('~, A ust rn lin, New Zealand a nd a II the 0111(,1' conn trh';;, of t 11(' d('I1(()('I'n(,j(,:, we might say '?-A , Quito.

HI,.\, , or One mnt

~nt rlen If

•

['11 nof

By Mr. 'J.'I!(·krr:

(l, Along that Lilt'; ,10 von think that the parliament of Canada ill cst.ablishing n Bank Ad rcn lizcd that it WH>:: gi\';ng to til(' chartered banks of tile countrv the right in tll(> long 1'1111 to i"sl.w the nulk of the moncv of the countrv ? --1\, }>I'O\'irletf the rh'po:"itn;:" wishe.l ,to lcav, lite mOIl£'Y 011 d('po:"it with them.

Q, Do you think it was realized at Ilia! time, isn't this n new d('\"('lopll1ent.

I think that if' ::n.-A, 'No,

Q, Isn't that what .MI'. :\1('(;ef'I' is gcttinr; at?-A. Oh, no,

Q. (In f he banking system and dep0i'its whereby money could be crca ted '? -A, There have been many J'l'\'i:,;ioJJ>: of the Bank Ad ,.:inC'e t he use of cheques

ratite!' than notes. '

Q, No, no; I mean it ii' a devclopnv'nt within the last fifty ycnl'~7.--A.

Thoro have been many r('\'i,.:ions of I he Bank Act within the la"t. fifty vcnrs.

ie il.t !d

1- ll~

Q, 1 llW;lIl, that wus not ('l·i,.dll:lll.,' IIII' ilJklHi{ln?~-A.~Inn;r pnople nowa,Ll~'" :;PI't':Il' Iii Ill' l'pulidpllt that, IIil'Y can ~jwak Itll' tht' fathers of confedcmfilm. I lUll lwl (l1H' of thorn.

)h-, FWTOIC AI any I'HtP, :\11'. To\\'l'l'~, I think it must be granted thnt. 1 hi" l'I;>:il! whid. WH:' d"'i'll I n thr-m lin!'. I umod UHf to be the right. to issue U\·'lwy. :n,,1 I dt! mH think it wa~ (,I'PI' intended to gin' tlwl l'igllL

HIj .lit-. J[CUffT:

(~, I jlH pm 11Ii" IW!Ill'l' vou. it i": Ill!' -tau-mcnt of the federal reserve b",m! which IVa" I runsmi t !t'd ; \I till' c'l!:dl'III:11l of till: conuuitteo on bunking :illd l'O)IIIlWn'(' ill 1111' ;-\('11:11(' :il1d tilt' lIj!!I~1' oi Hr'!)!'e"Plllniin'..; l\'C'Olllfl1!'!Hlillg 1·'HH;I,\,,.~i"n;t1 :"tllt!:' of tht lllOlwt:II'Y 1ll!',,:-,lIl'{'!'. 1 think it. is also of intpl'et'l! it_, 11"'; lu-rr-,

:\p\\\'ith,.[antiinl! t ho inherent limitnt.ions upun till' influence of lHolll'lnn' ruul l'I't'dir ncrion nn l'I'(I1101llil' rnndil.ions, 111(1 bOHl'd is COIl\"ill\'t·'( ;,( tilP illlPOI'I!UH'C' .. I "11<"11 a rt iun nr. certain t imos, and feels .. ! l'nn;rh- t Ill' l1l'('('~~ih' ,.I 1111 \'iug 1111' mvchunism of 111011('( nrv and bankin~ {:"illl'O! nnd :'UI)Pl'\'j;cioll ai all time- ill condition (0 'i'tliletioll ef~ IITtiwly ill lite publi« inn-rest,

III ib unnunl .'{'pm·! 1'01' !!laS Ill!' board pointed OUI that. OUl' pn':;1'1l1 ~~',:kll1 oJ regulation aml supervision OWl' 1ll00WY find banking, nut wir Ii,.\ andillg tunny imprcvcnu-nt ; lllndt, in recent. years, is still ddt'!'l in" in 111:11\.\' I't'."lll'('t,:,

Yon :11'l' :IL-11 awnr« that tIH'Y pointed out that although they had nil abundnnen 0: Iii., ,ql)lpi~' pi 1111111(';'; in tho ('l1in'l\ SI;Il('~ that th('Y wcr« not for ':OIlIC reason fir ut lu-r ~I'l'll1illl!!~' nblc t o l!('1 th.u 1ll0lH'y into cireulntion on a productive hnsis and nil n hn"b that \\'011111 a~,i"t !!lling ('(1111'('1'11 activit v ill that countrv, ,..:" thaI while rlll'i r laws mnv he ~llll\(;wha( dil)"'l'('nl frow' (1111'S their mnj(w pl'(\b"'ll1~ al'(' idl'lHiea!h' the ~:lIll{', an' (!H'Y not '!-A, Oh, J would snv l.il;lt

iht"I'I' :1)'1' quilt' lIInI pl'ia'l \,:'I'i:ltiill\~.· ,

(l, Y(';':?_~o;\, Ihoc;IIH' of rho (·t'oI10111ie ('h:ll'llf'tl'J' of the l'nitod Statl's, Q', But all the j1l'(lhll'llli' of hankil\~~-Ih(' :11>1111.1:11)('(' of IlJ01Wy :\1\1\"1 lack ni cireula: iOIl-·--b common I (I hot h ~y~1 crus to-duv ?~A, Y os, although the n'a~llll" lila" bo difCt'I'l'lll.

(~" I quitr- ngt'l'I': hut in anv event thl' thing that \\'(' are all agreed upon i" that we "lll.l\dd "IT" to find ~OllH' 11101'(' effective \\':lY of controlling and ,'!H nilling the elHII inuirv of ('ir!'lIlat ion of the medium of exchange in the '""':('1':11 ~l'lldlll'l' of t lu- 1l:ltiPIl'!-,\, Lxnmining. as you suggostod the othcd::y, til(' 1't':HIIl" wh~' 1II('I'r is surh a problem at the present. time, and perhaps taking int I) (,1I1l~idt'l':tt ion t hut t hp",c 1'1';1:'011:' mav he non-mouctnrv. If they turn Ollt t (I lw \:,Hl-IllOl}(,I:1 I'~' ]1(,I'k. p~ it llJi:..d1l b~· import ant to ;:hidy matters

01 :1 non-muncturv ('h:lr:ll'IC'I', •

Q, (luite "0, but if tIH'!'l' :11'1' somo monetnry Inct ors whieh nrc there cstabn",bil1:~.Jhi" pr(lhklll-if l\'t' find lill'I'(' aro 1l0IH1WI1('t:lI'Y Iactors they must, bc

de:dr wit h ill :'nnw other tribunal. I n5~uJl1c'?-A, yc~" .

(J, :\,,"', t lu- other "l·('tion~ PI tlte Brink Aet that deal with this particular nuun-r an' "('\'ti\lll~ iiO and (il and ~l'('t ion 125, :-:;(,(,tions 60 and 61 deal with thc mcrrlu.n: lWllk 11<11(' issuo. and section 125 deal:; with the liability on the per('I~nt :H!.(,~ '!---:L ,\nd I hen 1 he'f'(' i" ~(,l'tion 95 whirl! authorizes the bank to receive (I .. ,):;_;! _

, ! l;.- ~ITi ion g,): 1\'(']1. t kit ie' must lv dealing wit II persons unable to rOI1- : r.u-r : hut I Hlt':tll, all the deposit provisions arc in the gc. eral powers of ~eer,ion 78·?~ .. \ l·e_~.

r.~, I II-:\,' dpaiing with that 5lJ much as I was dealing with the money

;':;~tH.' ]lOW['!'-, 1'''\1 ,,('(', whar I hnv« dirccted this examination to, Mr. Towers, 'Ir. r: t .dum Fiord TnWt'r:i.]

L~

Ike 1$H 1:;;, thnt thaI i$ 1111\\.-,( Ill!' nul hi 118? c~,

Q.

nuder 1 d('))l.1'] t

Q.

lo tran d('poi;'IU Cuuune

q.

would ~.

Q,

securiti:

Q, Q,

here; b\ wnu If! iJ

Q, I iug abo take" bl !'upply j

q, t thai inc Q, J t lio lola A, Y("" ,

q, .. with t.ll( nuthoriz, Bank A< these pm hv-;;;eeti(

. Q,?

Act resp: )\o\\',tl](' for any J Domini.n M in istcr such 11('('1 there is ('XP01'fS I exchange Act. 1'5' ImI over produced to exa .nu qualifJcd

~f 01,. quoted 111

?\II'.

. lIon, 1938 whit

nowu:(lUfl'dc\'R~

nt~~d thctt. hI issue

II n'.~('r\'(> I htlUking UlIWudhli! I intl'l"('H

hreuee of rl is connnd iecis ud bank. ieuou of-

that 0111' banking, , is still

bundanee ne reason roduetivc

eouutry. ,it' mnjor s:,y that

Stutes. d~-~· ~\ Iaek

nigh the

eed upon ling and l' in the he othe:

perhaps If they matters

1'(' estabmust be

articular with the the perl receive

to (,OIlrwers of

's money -Towers,

is Ill!:' mllIW\, that ('()l)ll'S from tho Currcncv Ael, the 111(111('''' that. (IOJn(,,' from the Hank c{ Cauada At't, nm] the money O;nt eornes frllll) (llC Hank At't; th~~t is, thnt we nllow the hmlks 10 ('j'edli, ;tl)tl ill:"!!\: dep(I:lits as till',," do, nnd that. is the :;')\H'I't' of thn mouoy snpply I'm' the nation. I tho\lght.wo ngrNld (Ii. tha!.--~UH: nul !IIlI'it" of 11H' CUlT('II('Y Ai't I:; for IIII' issue or :;uhsidllll'v f'(lin.

lhe iHlI hndtr nl' UIC Hunk of Cnnnrin :\('1 i" l'or I hI' i$$II(' of (he Bnnk' of Caundll billi'?~-·A. ):'Hl agree with lhat, don't, YOll?--A, '1'1"').

Q. Alld. 01' ('0111'1'0. Inking n df'IWsit from anindi vidual dt'!'I' lint Neale utuler (hi" ;\('t n new supply of mOlwy.·~A. "'hnt Ionn wnuh] the llldividllld depo:;i t t n Iw 't

Q, 1<'01' insltlllf'P1 if 1 had 1I ilqlo.;;itin the Bunk of COlllllll'lTl.' and !luridI'd 10 lransfer Ihut deposit to {he Hoyn! Bunk of ClIllutin I would inl~iT'n:'je '16.;:' deposits ill the Hoy:!l Bank of Canada and ,i(>('I'!'w5e fl,e deposits in tlie Bunk of ComH)(,I'('e'?~A, Yes.

Q. But I would not inCI'('nso!hc Slim tnt,1I of lllOIWY at. all'?~-A. How would you J~l'l your dt'po;;it. ill til(' HIm!.: (If ('OlllllH'l'I,(' ill Iho Ii]'"" plu{'p';

Q. I takP it I might have got it a:-l Ihe result or loan" 1'01' Uw purchase of ~eclll'itil'i' 01' lillHllcing o\'erdl'llft7l'?--A. Yes,

(J, C»O digging gold out 01'1111.' gI'OUHd'~-A. 1'05,

Q, Or po:'sibly as 1 thought. the transfer of wealth from abroad 10 a brink here: hut as I understand you io say on t.hat I am nut correct: I thought that would innense the deposits ill Canada by that pl'ocess'!--A. No, you coulrl not.

Q, Of course, 1 WHS aPPUI'C'llUy wrong on thalc-···if 1 Hill. WhaL I am talking nhollt is illt'rc:lsing the ~upply of mOlley. I menu, r hat, the gOVU'llIlH'nl takes bullion into the mint nnd turns (>tIL monev and Ihat increases the moncv

supply if 5011](,( hing is not withdrawn ill proportiol1'?-A. Yes. '

Q. ~illlilarly \\'h(,11 you purcha-» gold am! issue Balik of Callada notes that ill!'!'elb(,s t·he 1l101H'Y slIJlply.--.\ Yes.

Q. It' bunks discount bonds, make loans, 01' allnw O\'cl'I!;'af(s by increasing I he tohll volume of their deposits, it in("r(,:1~e8 the monny supplv II" \\'ell'?A. Yr:"

Q. And these Ientures of the B!lI1k AN I run now dealing \\'itll h:l\'e to do with t·he increase in the money 8upply; and as I stated, t.I:l' l'C'C'[iOIli; that auUlOl'izl' t.hal· arc sections 50, tiO nnd (n, and the general pl'O\'i:5ions oi the Bank Act nuthorising till: banks to calTY on a banking business in the Ionn tilt's!' powers HI'(' set out t.hel'e,?---A. I say that without having made any sectionby-section cxnminal inn of the Bank Act, of course,

Q, Now, the other cnaetllll'llt. which a reflection of modern Limos is the Act I'(':"pe('(ing the CXpOIT of gold, ehaptel' 3:~ of the Statutes of Canada of 1932. Now, that Act amhoriz('s the Govcrnnr in Council to prohibit from time to time for any period the export of gold whether ill the Iorm of coin 01' bullion from the Dominion of Canada except in such cnses as may be deemed dcsirahle by the :Hinbtt'r of Finance and under Iieellec to be issued by him, provided that. no such licence shall be issued to other than a Canadian chartered bank; and then there is the genera! power in section 3, for the Govcmor ill Council to deny exports n!togl,thel'; and then there is the general power in section 4 of the exchange regulation, as the C;0\,C1'l101' in Council sees fit to ':arry out under this Art. I submit that t-hat Act vit·tually gins to the government- of Canada con- 11'01 over gold produced in the Dominion, control over the 1l10YC'1lI{'nt of gold produced in the Domini(ln'?-~A, I wonder. Mr. MeGee!', if I am the best person to exa.nino on that? I do not kI10w.1'(,l.'lIap;; the Finance Department is best qualified to give their illterpretatiol1 of that statute'?

~·rOj,. ]\[1'. Sn;n~xs; There is an amending Act deleting tho proviso that you quoted under section 2, whieh probably ought to be put on the record.

MI', l\JcCh:EH: What is that'?

HOIl. ,:\11-. Sn:n:Ns: I sav. thorn is an amending Act which was passed in ]938 which should also be on'the record, '

346

STANo/xa COMJI1J'TEN

;\11'. :\!cC,n:n: nil, \'\,';, buttlt\' result of timt j~ only to make it· tighter, it (tppllp;" to tin.' Bank or' Cnunrln. 1'011 snv t hnt you are not }l1'l'\HlI'NI to say ;ulything nbuut that PHl'tieu.lnr :\I't.

By st-. J[('tinT:

(2, :'Ilig;ht I nsk you this qut-st ion : :t" a tnntt or of Iact ill uerunl banking pnH'tll'l' is It )lot true t hnt ill ol'('ration till' government is in runt rol of the movemont ot' g,.Jd pl'udu('t'cI ill Cnnudu ?,--;\. The gO\'cI'llIlH'nt buys gold from the lHilll'" nndt-r :Ill HlT:tngl'lll('l1t with thVlll in n.'sp('('l to prices, and so on and so \'()l'th. Therefol't', it would 1)(' t ruv to ,n~' (hat the ]ll'lH'tiet' in the lust few years h:t" hel')] for t lu- mine- to sell their guld tll the govcrnmcnt.

Q. Whid, l't'ally mcnns t hnt ill prnct irc to-rlnv the govcrmuont i~ in virtual ('ollt\'lIl III till' .. ituai ion : i-u't that ('1)1'I'('('t '~-,~;\ [do not know: if the minos rio not wish tn ~f'H t lu-ir Qldd, nf ('lllll'~(·. i ln-v lH'I'd HoI do ~O. .\rhat would Then

happl'n I do not !;no\\,.'· . ,

t~, I ~t'l', \\'\'11 now, we liu v« cirtuin cuust itut ionul liuiit at ions ill O\lJ' BJ'iti~h ;\urth Auurir a .-\1'1 whicl: in alI ruuur-v matters, banking mutters, interest IIHltt('I'~, {'Ul'I'l'IH'Y tunt n-rs, l'l''''I'r\''.'~ to tIll' exclusive jurisdiction to the Parliament uI C:Ill:ltla till' righ: of kgi~\nt ivr enact mont. In UilH'1' words, 110 uuthority ill t 'alladn ot lu-r than til(' Pm-li.um-ut III Canndu run Il'gi"lat(' with respect to II HI nov , !1:lllkin!.(, intou-st. ('1111'('1)('\', or Canadian monvv mut tcrs.c-A. That is 111\' U'lltlvl'.'tHndilll': of it. I would'lIlUl'h ,,()()111'1' t nl«: vour \\'01'11 for it than mv Il\~'n, \11'. \[['(;1'(:1'. ThpJ'(' :m' other authurit it« \\·It,; do take ~a\'illg" deposit's and ,\I'('ide what iutvrest tlll'Y ~h()ltld pn~' on 111('.11, nf course.

{l. 1 am rut her inclined t o think that i" n dnubtful exercise of a provincial Po\\'('r: hUII'l'\'('I'. I Ill:l}' he \\T(lng about that, but t hc actual fact~ arc that bankintt, currcncv and int orr-st ratc:' art' within that '?-A. Yes.

, (2.\il\~·, do('" not that pIaN' :l dil'l'l'! responsibility on parliament to supply t lu- nnr inn ill iH national a~pl'(·t". ill it" pmvinciul n~Jl('et, in its municipal aspect, and in il~ privnrc individu«] :t~I)(,('I,~-that i-. including «orpornt ions-c-the respon:::ihility of finding :1 nu-dium of ('C\t'li:lllgl' lH'('('.;"ar~' to -u-t ain i he going concern :H,ti\'ity of tilt' I\:lti{)n·~~,\. I should mnkc whnt is perhaps n better statement of t hnt ; i.e .. it. is the responsihility of parliament. to see that. the country is provided wit h till' \JC',;t finanl'iai mcclmni-m that tile wit of mnn can devise.

Q. You, in t h« light of that. would not object to this as u sound statement (11' public polif'Y: in till' mal tor of banking anrl tlll:tlH'e credit is a public matter nor (If intorr-t III bunker- onlv hut Ill' din'l't l'OIl('('1'll ttl the ;\\'('I'al':t' citizl'lI. It is 11l'('e"";\l'~' to ('''tahli~h a PI'Op~, '1" f'i\IHituted national bank to perform the function" (If rl'c\i':('Ollllt and the (,OU1I,t! 1':' ('UITl'IH'~' issue construed in terms of public Ill'(,d. A ('('Iltl':ti bank is J1('('l''''<lr~' 10 deil'r:l1ilil' the -u]>p!y of CUlT('ll(,Y in relnt inn (0 the d()!lll'~ti('. sorial and inrlu-t i-in l requirement» of the Canadian people, and a l-o to tlp:!1 wit]: till' probk-m Ill' intoruut ionnl commerce and exchange. c\ ud. "P!'t:'li Illy, tli(' currr-ncv i- su« should be const rued ill term- of public need, i,[!t po,.:"ih\P privutr- grain. \\')1('11 the gOI'l'l'nlllcllt hands over to a private ill"titlltillq that i~ the creation of pruliamcnt t h« supreme power in the matter of Iu..: .cial plllicy, ill t ho matte)' of control of socinl credit and the issue of eurroucv. pru-linmcnt \,[l~~l'~ :111 it~ po\H'r~ to a private institution and allows it \0 go it- \\':1~' leaving ]1;1rli:lIl1('111 :to' the reproscntntiv« of the people in a pn~iti()n \\,11(')'(' OIlf'("lIch n hank is established aud free to Pl11':'IlC its own (,0111"e pnrli.uncn: IlO longer would han' any right of control over it,?-A. \YI\O~e evidence j,: t hnt '?

linn, :'Ill'. STl·:n:xs: What. i" that, some statement you are rending?

.\11'. :\!c(;U':H: Tid" is just a statement of public policy which I am offering tn you, kt 11- say, as my own.

::\11'. 'J'O\H:ns: Oh.

·Mr. Me(

II now an Ill) l\1J'.Tow :'Ill'. '\IcC Hun. Mr. ::\11'. Mc(

to suv: o nr !' t not ~\'h() mak

Sot)1C' 110 I ::\lr. McC

of the issue n HOIl.).]r. l'!r. rvlcC Hon. :.'IT 1'. :\11'. McC

maint aincd ))1 rcsponsibi Ii tJ: idle nne! Iutih

Hon, ivII'. :,\11'. Tt:c:

•

JJ!J 1

Q. I take has the exclu and in so Iai do it, rcgulati parliament sh do not think i that I must I as best I can

Q, Yes. tha t there is : and credit in of possible pi would have t( need" and "p

Q. Well, that public l1{ mont, the nee and other loc commerce an who areentit of a sound sy paper money

Q. Pcrso! it was with }: existed in the I do want to because we h like to see de

1\11'. .LAN Mr. Tow definite form an answer.

IJANIOSG ,tNI) CO.l/;lllWCB

347

Mr. :\lcGt':EH: You will gt't the sourro of it in till£' time, but I ani offering

it. now us my own.

l\I 1\ TO\\,EIt;~: Y os.

:.\lr. ),ICnl':EI~: But it comes Irom a fairly high authnri t y. HOll. :\11', STE\'E);~: I thnught vuu \\"('I'(' reading from ,t hook.

".'Ill'. :'£CGEEH: No, just from notes of my OWIl. Now, the policy goes on to say: 01)('(' till' nation parts with the cuntrulof it s 1'\lI'I'l'lll'~' lind fT('dil it lIlatleJ'~ not who makes the nation's laws.

Some hon. :.\IE:\IllEW';: Hear, !te;\I'.

".'Ill,. ;\IcGEER: Usury once in control will wreck any nation until the control

of the issuu of eurrouev and «rt-dit i~ maintained by the govcnuncnt->

Hon. :.rl'. S'l'En:xs: I" that rho :'\I:li':'lill:1ll J'('jHIJ't'?

:.\11'. :.\IcGEER: No, it is an interpolation of a report on a like basis. Hon. :.\11'. STE\'EXS: I beg your pardon.

:'\Ir, :.\lcGlmn: 'Until the control of the issue of CUl'ITneV and ('redit is maintained h~' tho govornmeut and re('ognized a~ its most conspicuous and ~,wt'('ll responsibility, all talk of the sovereignty of pnrliamcnt and of democr-acy is idle and futile.

Hun. Mr. Sricvrcxs ; That fellow seems to know what he is talking about. Mr. TrcKER: It is good.

•

B!/ MI'. i.lIcGeer:

Q. I take it that as a general proposition under the constitution parliament has the exclusive jurisdiction, power to deal with the creation, with the issue, and in so Iar as monetary action or bank control or government control can do it, regulation of speculation: that with respect to the policy I han outlined parliament should be the instrument of control; do you agree with that,?-A, I do not think it is for me to express views on what parliament should do. I think that I must limit myself, and within the extent of my knowledge, to answering as best I can questions of Iact,

Q. Yes, Well, you will agree with this as Governor of the Bank of Canada, that there is a line of cleavage between the two propositions of issuing currency and credit in terms of public need, and issuing currency and credit in terms of possible private gain'?-'--A. Again, I come back to a question of Iact, and I would have to have a definition thee of what is meant by the terms of "public need" and "private gain."

Q. 'IV ell, for instance, without going into any great detail, I would say that public need a's expressed in Canada would be the need of a uaticr+ 1 government, the needs of provincial governments, the needs of municipal governments and other local authorities, the needs of those engaged in Canadian trade and commerce and industry, external as well as internal, and the needs of those who are entitled to be taken care of through the medium of the administration of a sound system of 'social service.~A, Do you define these needs as needs for paper money?

Q. Personally, Mr. Towers, I would not care ·how they were financed, whether it was with paper money or metal money or a system of bank deposits which existed in the farm of book-keepingaccounts. I do not care what form it is, but I do want. to know,as a public man in Canada, why we cannot do the things because we have not got the money, that every member of parliament would like to see done in the dominion.

nil'. LANDERYOU: Hear, hear.

Mr. TOWERS: The proposition would have to be put to me in a much more definite form before it would be possible for me or any human being to make an answer. If the proposition is that the expenditure for requirements of all

348

,\S(iV('nHH('~lt" :-;honld ]1(1 provided by the issuoof addlt.ionalcredit, then the: ~1l1y nusW('(' l 1':111 gin' to dm( prupos it iou i~ 1I1w wliil'li hit" In'l'll :tll'eHd~' made, Now, UX'I.'fb pr(lpvrly ddlllNi :11'0 l)('\'d~ which the public, including government, wnukl only W;\I\\ to be filled provided that it was in the bl'~! interests of the etnlntry'"~~:'"

Hil MI' . .lIeGecr:

q. We all agree, Mr. Tower«. tli:n then' arc (Til'S for ddvnet'~-- -A. Mr. :'leC;ll'l'.l tlu not. think th~ll 1 am lint' t n ~:ly that there {In' no gl'('at needs around thi" {'(\lIIHl'~', I think that the only thing ihn; I can express an opinion 011 w<inld he some definite proposal that t hoso needs should be filled in such and such H W~\y: and again, it would nor lw within ln~' power to determine ultimately ,,\l\dhr t luv \H'I'C' fillod in t lint wnv ill' in SIHl1l' other wav, but onlv to express such "pin;('1;" ;\, 1":111 :.lI(!Ul tl:e I',,'u!t Ill' d!llll\C ,hi" "I' lh;\t tlIill~. '

t~, Well, liUI\', .Vlill ],:1111\\'--- ..... \. 1 :till nb~l,]utd~' luun-strung. 80 to speak,

111 tl'\,inl.': ti) ,kill witl. !':tli('l'nli;i.,,,.

(~. \'0\1 know :\1r.·:\!:\lTim'l' !::('('ll"<)'~;\' I dn,

Q, \ It' lh., i','lkl':d l'l'~('l'\'" b.mk inz "y~!('nl of !lIp United Sta(cs?·-A. Yes. (~. ] Ie- h"ltb reht i \'l'ly t ln. ~:i1lll' pn~it ion ill t ht' 1'I1il cd St a tcs ns you hold

III lh., 1 )"ll1il,l,,!\pf (':llInd:I'?"''''\' Y I'."; ,

Q, I)", Y(lll follt'l\' the pl'ueh'din~:~ of th(' 1"d('1'1Il n-sorvc system at ull'?:\. A~ muvn :1" I (':111.

q, Hn'('mly Ill' nppc:t)'('d Iwic,l'l' the banking and commerce committee of thl' .vnu: i,,:tl, :-:,ll:i!,', (>11 lridav. \1:11'.-]121[1:. :'II:,\' 1 iu-t -ubmit III v ou II ~t:ltenW1I1 "hie1; J;C' ll1:i.]l' t o (11:I( (,('llllllittu'. \>"(':11.1;(, I' should like t;) nsk your opiuion :L" \ .. \\'111'I11cl' 01' not t hc -.un« situntion docs not apply in Cal{uc!fl. !Thi~ j:-; \\·L~d he ~:-l~·A:---

Tmplovmout :\!ld It:lt il.n:d income ,kPI'I1ft not merely on the volume of llWllC'\' ill 1':\i~ttllC'(' hut :ti~n 0]) ! he \i"l' \ hat is made of this money, To-d:~' 'IH' Iln\'l' l:i1'!2'o.' holdill\::~ 01 idle deposits and C'U1TC']]('y which, 'jf put t(l 11"(' 1,:' tlil' {I1\'lIe']',;, would employ all 011]' ,,'01'];;e1'8 and would ]11'0- dUl'l' ;. nat innn l i nC011ll' :Hkqll:l \(' 1'01' :: I'C'll"Onil blo dcgrco of prosperity.

'Vi' ('('!'inilliy 1I:t\'(' :t l:i!':2T' \'O]UllW of idle credit and currcnrv in Canada. have

we \)11\ ',' .,', yc~.

(!. xv.. ':-1:::11::' !.:,l·,' :\ !::1'[:1' \"'.lllll, ,,;' 1l11"llll,111:·I·d in C:\n:I,1:-:.--.\, That

Q, ,\(,(,(,,',li11\" In your i:lSi ,1;\[lrn('.-:t uucuiplovmont in Cannrla is ['gain ;~~ilt"'d~:rll\~l\\\l\il:l;'l'~lt\':n;ip:;;:':\tOI ih. 1(\'\\'1>1 point in the depression. if' it not?--

:'Ih, How.vn»: It i~ not ,,'cry 1':\1' 1'1'(1111 it: it is serious.

:\lr. Towt.ns : It j" serious.

BU .1/)" JJcUcu:

(). T \\-\~~dd ~< .. \' th:-:' in h ',:!i :;1--<:111!-'1.<:.- .\. "Tel :::( C'C,l1CUl' 111 it s existence. (~, \Yr' cnu t<d~c :t million n~ a round figure?

Hnn, :'Ilr. ~T1:\'E~;~: On relief',

:\[1'. ::\IcCn:n: (111 relief'. And knowing the provincial situation and the g(,l1CT;'] d('eiin('of public work, (hilt has taken place all over Canada, we can look fOl'\Y:!1'd to a H'I'r i'Cl'iOU8 situation.

:\Tr. Towi.ns: I do not ~\IppOS(, there is anyone in this room who would den v j hu t tlic situni ion is unsntisfnctorv ; but ii I may say something here, it i; the gen<'rnl ]ll'llCtiec of people who urge monetary reform-v-I could name :1 name \I'hii'll ;, wi-ll known ill C:llliidn, a!llwu!?:h 1:(' do('~ not lin' in Canada, who is one of t\w,(' people. Hie book" have n wry strong appeal and it has gh'::I~'~ teemed to me that one of the reasons for that is that anyone can agree

'with 99 jWl' toW those stnt('.)ll(>l)t" dCf31rnbte?":t\o, moment wlion II Hwneilll'Y way,

n 11'cndy'stl'OI}g 1 but I do liny thll ing for opin'jon:,:,

•

B1/ Mr.

Q, I will ('01 with 0'1(' of tho with. W!tnt I HI Ierlorul reserve I morco eonnuitto. addressing now,bad.

Q. No; wha in the United 8(:

A. Yes, it is bad Q. ;\O\\'. he

The ( 111011ey suj opposite f. (,,,pry pos private ell funds, idl(

Do you approve conclusion , a sin who believe in :

Q. That is, expenditure won rlClT]()(T:1CY; i:; tl everyone": own :

'Q. Whilt dl; upon for advice me for adviee in

Q, On the f corned, -:\0\\'." privn.tc inclustry he nn Ill'('c~"ity thought. \\'lJicJt' s wi th wha t we c

1\11'. BOWAR

'j

By u-.

Q, I am .lcn whether 0]' not tJ think the duty 0 prad.icC's of t;1l2 regard to diftere procedure.

Q. Or how t.onclvisc the go depression ('oure!

Jnly ~(\w. IN.lt.

the

•

.:\11'. lund , on and tdy

ucss

oak,

res. iold

: of ~"Lte-

'OU!' lela.

umc :H'Y· I. if nn·ity.

'hat

rain

'J_

nee. 'j
the
can
mId
ere,
ime
uln,
has
;ree R·INKING ANI) COJU/BRCE

with un pel' cent of what he says, because. roughly 01) 1)(>1' cent is devoted to these statements: "Do vou wan; pOVl'l't~, j do you think that unemployment is desirable?" No, no! All nloug tho line YOIl agree with him until that la~t moment when he comes to saying how he would \,PlIlO\'() the problem in a monetary wav, Now, J nm sure that nothing you cun say will inorcnse my nlt'Nuly'stI'O})g under.standing of the ul1sntisf,'lrtory situation in the OOllntrj;; but I do say thnt it would be des irn bit, if questioning could be limited to asking for opinions, fOI' what t 1I('Y may be worth, on some spcciflc PI'0]105(\1.

By JJr. McGeeI':

Q, I will tome to thnt right 1I0W. I want (0 expln in that I Hill nut dealing with one of those glib agitators who says HI) pCI' <'('IlL of what. I con agree with. What I tim putting before you is 1\ slut omout made by the head of the fcdornl res C' I'\'(' banking system ill the United 8t:lI<''': to the' banking and ('0111- morco comrnit tr-o of the Sounto, which is a slmilnr body to the OIJ(' you arc nrldrcssing now.i-A. In which nil hl' is stating 1"0 fa,' is tha] the situation is bad.

Q. No; what I rPMI to you is this: docs not the situation described by him in the United States reflect n somewhat similar condition existing in Canada '?A. Yes, it. is bad in both places.

Q. ::\01\'. he goes on to say:-

The crucial question therefore is how to make the existing ahunrlant motley supply function more effectively. On this question thoro arc two opposite schools of thought. I belong to the school that, 1)('li('\·(''' that every possihlc oncourugerncnt should be ginn to privat« indtst: \ and private enterprise for profitable cmplovmenr of the grent 8Ul'] , 1 idle funds, idle men and idle resources which we haw in this coun 1'\' : o-dny.

Do you approve of 1\11'. Eccles' ccnclusiou i-c-A. It is a sk\ten1('nt,trdl~' [\ conclusion, a slntcmont of views with which no one could disagree except those who believe in It. different form of aovcrnmcnt.

Q, That. is, anybody who belie~:es in relieving lhat situation by public expenditure would be those who would be prepared to risk the desl ructinn of dcrnocmev ; is that right?-A, I think that is something which can be left to evervonc's own judgment;

Q. Whnt do Y011 think about it; you are the man (hat we nrc depending upon for advice in tlH'5e maltcrs.-A, I do not think you nrc dcpcntling upon

me for ad\'iee in regard tf' interpretation of ':\fr. Eccles' statement. '.

Q. On the solution 01 the problems, as far a, mone-tary Inctors arc concorned. ;\0\\', what Mr. Eccles savs Jiero is that, he belicvcs we should induce private inc!us1.ry to put its money' to work, and if they did that there would be 1111 l1I'('C~.;ily rill' gll\'C'n!llH'IJ!:iI ,pc'nding. .:\11\\-, t hero is :!lIilU!f'l' school of thought which snvs govornrnont spending should take the lead. I am dcalinn with -\\'hat we can do in a monetary way-- ~

Mr. How.vnn: Docs he give any suggcsl ions ?

Bll .MI', McGee)':

Q. I am dr'nlill.O: with tlli~ thin)! OIlC' at n rime. Cnn Y01l tell me 1l0\\' as to whether or not t hosr: who believe ill puhlicspending as the means of-- -A. I think the duty of a cl'ntrnhQflllk is to operate in accordance with the laws and praeticos of the country in Khieh it is located. and not to express opinions in regard to different systems of government or different methods of government procedure.

Q. Or how to finance out of depression? Y all say it, is not your business to advise the government. of this Dominion as to how the finance problems of depression could he met and solvod i-i-A. If the govcrnmenbrlceidrs that it will

350

pro('I>ed wit·h :\ ('('l'lnin amount. of ('x!ll'uditlll'(' it, (,p),l.ninly would beour flln~'li{)l1 tu 0::\,\' !ht'lll such advieo as we could in regard to how they could manage It ..

" Q. But as io whether 01' not. bhoy should embarkupon a program of public slwndillg. as to wlwtl.lCl' or l:ot .. they should il~{,I'~'Me the 'nm~u\l't of. currency and ('I'l'tii!. in eireulntion, 01' III ISSliP. you say It ts no part. OJ vour duty; but tIll' Bank of Canada has constituted you------ -.\. I would say that only [\, bank ~l\lrl'rillg from delusions of grnndour would embark on somothing t.hat padinlllt'llt <Iii! not speciflcnlly deleg,nlc to it.

l~. \\"(' will note the delusions of grandeur. However. we will go on, This j" \\'hal, :'lr, Eccles says is tho nltcrnutivc to th!' propnsit.iou: he says to the 1'l'I)I'('~('Ill:lti\'('" of t ho 'p('opk of t lu- Cnill'd ~latl's:--

However. I believe t·hilt when private ont.erpnso is unable or unwillin!!: to do :::n,' government should help to put this idle mOIlPY

Th.u i~. to inve-r ir s mnney to ('I'('n((' going-concern nctivitv->

, . , govcrnmcnt should ])('1]1 to put. this idle money, some of the ten million of unemployed nne! idle fH('ili,t,ips to work in non-competitive socially and economically desirable public activities, including the building of roads -chools, hu-pit a ls, public housing. ct«. This, of course, should he done as efficiently as possiblo rmd in a way that will stimulate and supplement private activity.

Do ~'OU agree with that,?-A. I cannot express any opinion on that, Mr. Mcfleer.

Q. Expenditures for t h(,:,(' purpo:"e:, I'm Iarrn honcfits and for adequate br-nefit s for (Ill' aged wi ll iJl('l't'H:'p t ho l'lT('('ti\'c demnnd for thc output of industry and thus not. only sustain existing im'cstments but provide profitable outlets for investment in new enterprise.

A. Everyl.hing t,hat. I am able to say in regard to activities of that character is already on till' rvcord, not n~ a specific roconuncndatiuu of what government should do, of course. I do not beliovo it is my place to make such a. recornmcndat ion, but only to set, forth as well as we can some of (.]1(' pros and cons.

Q. He goes on to ;;:flY:--

This would increase the national iucomo and the federal revenue n nd thus ultimately bring about a balanced budget, which we 'all desire,

1\0\\', lie winds up that stutcrncnt by saying:-

'V1J('n 0\11' product in capacity is in excess of current demand, as it. is to-day, it, does nor make sense to me to expect that a reduction in the demand originating from government activities is going to lead the makers of agricultural implements, the railroads, the automobile manufacturers, the textile industry. or, for that matter, any other industry, to enlarge plant capucitv, increase production and thus furnish employment.

If the buying power of millions of people on W.P.A. rolls or in public construction, or in shipyards and aeroplane facic!'ies is reduced, Iclo not sec how we can expert more houses to be built ami more capital expenditures to take place.

-:\'0"", I want to put this proposition to you, The United States, a neighbouring nation, suffering from problems of economic depression which have cont inued since 1929 and which are similar to our own, has the head of its banking system recommend to Congress first, that they should do everything they can to induce private industry to move into a development. which will result in general expansion of all mining, all private trade, industry and commerce; then, if they are unable or unwilling to do that, which he admits they are, in the United States, and which we know, as a matter of Iact, is the situation in Canada, he says the government must undertake a program of social services, a program

[Mr. Graham Ford Towers.]

of publi: money j tho buyi

}VIl'. Mr. has not f nune i al governm gross en that hal question

1\11', 'fill". pointed. 0('01101111 of poli('~

Mr. governu country what t'll this COl! as advis for 11E ( policy ( to speal thing w

Q,

pursued for the or shall implioai ant pro wliat it

:Mr because

1\'11' the nat the hou the ine:

Mr IvIr Where hOUEe ( informs

:Ml mittee to final central payiniS our VIC on an more 0

7816&-

ll' fUl1l'tiOll mage it.

1 of public C eurt:t'tlcy

duty; Qllt )at on Iv 'n. t.hing thnt

) on. This avs to the

01' uu will-

of the ten -ompctitive the buildof course, 1 stimulate

r. :\1 cGeer. ir adequate the output IUt provide

~ character ~overnlllent 1 a recommd cons.

'al revenue 'all desire.

nand. as it .tion 'in the the makers tuf'acturcrs,

to enlarge ent.

)l' in public d, Ido not al expendi-

neighbourhave conits banking they can to ; in general len) if they the United Canada, he a prog't'i!!l

BANK1NO AND cosiuenct:

of public construction and a program of issuing into circulation the amount of money thnt will ercale a demand for goods nnd services through the increase in tho buying power of the consumers gcncrnlly.

Mr. L:\N\)EHYOU: Hear, hear.

Mr. VmN: Arc we not trending on the ground of government policy, and has not. the govemor of the bank stated time and again that with respect to the financial situation he is the advisor of the government, but with l'e~IH'ct, to government policy, tile govcrnlllent themselves must determine it. What progress can we make ill this particular investigation if we simply emhnl'k on lines that have just been developed and which have boou developed in tho course of questions on government policy'?

Mr. BAKEH: Heal', honr.

MI'. LANDEHYOC: I believe that :\[1'. 1'0\\'('1'8 himself in his radio address pointed out that the policy of n central bank 1:-: to issue money in tenus of the e('0110111ie needs of Canada. :\: ow, surely t ]wy must issue t hut a long some lines

or policy? .

MI'. TOWEllS: The Iinancinl needs will vary, of course, in accordance with governmental 01' private activity and with the volume of production in the country. In each country, I suppose, the central bank people must determine what their proper course is in respect to things which they may say or do. In this country I believe, rightly or wrongly, that while we may ami should act, as advisors, ",IWIl so requested by the government, it would be quite improper for us to say in the country or even in a pru-luuneutnry committee, what the policy of government should be. While it is not perhaps quite propel' for me to speak of what the view of parlinmcnt might be, I should think that it is 1\ thing which would be resented by parliament.

By Mr. Ltuuleruou:

Q. You say that parliament is solely responsible for the financial policies pursued in the Dominion of Canada '?·-A. I say that parliament is rcsporsible for the exercise of governmental powers, and for deciding on what they shall or shall not do. In the event of their deciding a certain thing, which has financial implications, they may ask advice in regard to bow best tn deal with the resultant problem, but certainly I think it. is far from our function to tell parliament. what it should or should not do.

11r.l'v1cGElm: I should like to deal, if I may, with Colonel Vien's objection, because I think he is entirely wrong.

Mr JAQn:s: ~.1:r. Chairman, I want to make one remark. Knowing that the nature of the financial reforms 01' any financial proposition we bring up in the house of commons is met with the remark of the Minister of Finance that the inexorable laws of finance come into the picture--

IVIr. TOWERS: Excuse me, 111'. Jaques.

Mr . .JAQUES: We are told here it is due to the policy of the government.

Where are we to find it? I cannot get an answer. If we are wrong in. the house of commons and we are wrong here, where are we going to get the infonnation?

Mr. TOWERS: MI'. Jaques, I said that at an earlier meeting of this committee the question was raised, why would it not be possible for government to finance all its expenditure by obtaining additional issues of credit from the central bank? Perhaps not. only financing its current, expenditures but also paying off its bonds. Now, there is a specific proposition. We have expressed 0111' views on that proposition; but. I do not feel that I should express opinions on an entirely different, one which is, why should not the government spend more on this or that? That is a question of government policy.

7816&-2

351

.';TANDIXG (,OMJllTTRE

~Ir . .JAQt'ES: realize Mr. Towers' position. Hut I should like to know

I!U\\" if we art' going to make any real progress, where nrc we going to get. the am W! '1', from?

Mr. lIUW;\HIl: \\'h!'ll ?Ill'. ::\\t·U('l't' !.!'.I'h t hrounl: I should like to have a

minute to dbel1"~ that \'('l'Y qll('~tifJll.' .

::\11'. ::\!cC;E!·;n: I am going to dl':\1 with the objoct ion rnised by Colonel Vir-n \(I mv ex.uuiu.uiou. Tho Bank nl (':lllad:l \\':1:< ('na<'ll'd Iollowing an ill\·(·"llgntioll b~' t h(' l\ I ai' l\ \ illi.m r-ouuui 1(('(', (11' t Ii(' Ba nk of Canada lcgisln t ion was l'!latter! following that report.

:'1\1'. Towrn«: Y('s.

I J1 trj' SUI ap: l'aJ

WI t.hi \VI

H,II st, st.c..».

l~. ;\nd t1w B:lnk of Canada (':IIlH' into being as a ]'('"ult or t he :ll'cpptanec

(Ii tho~(' r('('1I11l\ll\'l!\!ation,;, Thi- j, the j'('cnlll11lt'ndntion of the Mnc Millun

conunit t ev tikd ill lU:~,l. That io' ('(I\'I'I'('t, i" it not '!-A. Yes.

lJ. :\,,\\', :tlllllng the ]'(':1":011, gin'n Ior tIl(' (':,tnbli,lllllf'lIt of tht' Bank (If (':Ill;!' Ll \\'l'I'l' llll"t': ,-,.

j f w« -urvov tilt' t';trdin:d 1ll\l\1l't:ll')' problems \\'liieL face the t'ulladi:lll pen]!ll' in common wit hall other pl'opllo~ to-day, we are irnmcdiah'ly ('(l1lfrulltcd with :l mult it udo of diflicult and intricntc questions.

And t lu-n it (,1111111(,I':lt('" thorn.

To what ('xtcnl and througl: what orgnnizations should the volume (If' credit and of ('lIITC]Jl'Y be rr-gulated ?

That surclv do.ils with not only the inst it ut ious through which it goes, but the amount i hn t i..: going to Ill' pill out, doc's it not':-A. No doubt.

Q. On what hodv should lip t l!t, priJll:(I'~' respon . ..:ibility for maint nininz th(' external st ahilitv or the count rvs curreucv ? To what institutionC may the uovcmmeur (',' the day Ill(;~t -uitablv turn Ior informed and jmpnrt iul :1t1\i\'c Oil IllltllL'l''': of Jln;lIlci:d policv? '

A. ,\(I\'i('(' on mn ttvr- uf financial policv.

Q, What we arl' dealing wil l. here to-day is Iinuncial policy, In other wurrl», ~h:tll w« haw a financial policy thal depend" upon private expenditures or <hul l we have n pulicv of publi« spending?

Mr. VIEX: In answer to that. :\11'. Chairman. I would point out tiJat Illy ubjc-ct iou was taken when my Iriour! Mr. ~ll:G('('r was reading a statement made in COllgI'C . ..::,; by Mnrriner Eccles defending t h« 'V.P,A. which is part of 1 he new deal. If \YC decide to C~U1 blish the new deal in this country, it is certrun lv a government pulicy. Once t he IF'\\' deal is established it will be for 1 he f tl HIll' ial ndvisors of the go\'cl'lltnent to dr tcrmine the financial ways lllld ruvans of coping with the situation created by the new deal; therefore I suggest when .:\11'. ,:\1 cGecr puts to the governor 01 ~he bank a question drawing a parallel between the situation in Cnnada and the situation arising in .the United Stntes as a result of the opcrat ion of t.he W.P,A., I say he is embarking not 011 the financial ways and mC:lI1" to meet the situation which will arise if and when the government has adoptee! such a policy, but with the ; ·ulicy itself.

::\11'. BAKEn: Yes.

Mr. VIE1\': Therefore I suggest, with due rrect and due regard for Mr.

McGec':'s ability, and I have followed with a great deal of interest, and much admiration for his ability, his development of a lot of subjects and all gratitude for the information that. he has put on this record, and of which we shall .all make abundant use, On the other hand, we have to make some progress.

[Mr. Graham Ford Towors.]

Gl' me to OlJ

ye: jll'( we elu j)l'l 1)('1 mE a.g; bo sp:

•
fe]
til
hn
co
st:
st:
fel
N,
co lJilNI<.lNG AND COMMEHC/-J

353

knew t the

I am not suggesting that lVII', l\JeOeer hampcrod our progress, fal' from it; but. trying to eo-operate with the chairman and mombors of this eommil.tee I would suggest that we should draw the lim" H8 Mr. 'Towers has 1'0 eminently and aptly stated. He said, when 1 Hill nskr-d to advise the govcnuent how they can best seol~ (heir financinl l'cquin'llHmts I nm in my sphere of propel' uctivity, When you touch till' question of government policy, shoulrl the government do this, or do that, or do the {)UH'I' thing, it is a question for pmliament to decide, 'Vo have covered that ground twenty times Irom the beginning. I am simply respectfully suggesting to you, Mr. Chnirman, thut we should draw the line somewhere! as thc vovcmor has pnintcd out time and again, between governruout policv and fmancial WHY" and means.

AI r . .L\Qn:~: Mr. Chainunn. we should t I'\' rho linr or German in fla tion.

It seems to mo this j:,: n eHH' of irrosist.ihle Iorccmoct.iug an iunuovable mass.

i\Ir. Howxun: ?\o,

.:'.11' .. JAQl'I';S: A~ I :'aid bdol'l', 1 think we should try till' line then of Gorman inflation. Thur j" g()\·(,l'11111Cllt. policv. It, i" a (':1:'(' or' lin irresistible Iorce meeting an immnvuble mass; it is a stnlomnte. Whatever we propose is said to be impossible by the laws of Iinance, and WIH'll we put it up to the gOV(,1'1I01' on the luws of Iinuncc. we nrc told it is government policy.

1\11' .. I\[CGEER: Mr. Chairman, this parliament has been sit.ting for four years. This pnrharucnt is supporting a govcrnmen; that. was elected upon the promise to establish a new monetary system under which currency and credit were to be issued in terms of public need to serve the social, economic and in" dustrial needs d the people of the Dominion of Canuda, and not in terms of private gaiil. We wen' to achieve that great accomplislnucnt for the Cnnadinn people through the medium of a Bank of Cnnada that would be mall ned by mer. who arc competent to advise the government on fiscal policy. Let me quote again from this report, and when gcntl('ll1('n ":H~' that J am not. within the proper bounds of examination of the witness, I am not speaking out of the book, I am speaking from the vr-ry record upon which this great reform was based.

On page G3 is a quotation, and I should like to rend it. It i" from the Canadian Maomillan report. It puts the Iull responsibility for advising on whether there shall be public spending of not, upon the governor of the Bank of Canada. It says i->

It is manifest. Imwever, that tbc regulation of the volume of credit is an important factor in influencing the level of economic activity, and therefore of prices and this is one of the cardinal tasks of a central bank.

\11'. Vn:x : We are not, denying that.

Mr. :;V(cGEI·:a: Just a moment. I allowed you to interfere twice-

Mr. Vncx : MI'. Chairman, 1 do not know that any criticism of Illy interference can be directed to me by Mr. Mcflecr.

Mr. BAKEIC I object to the word "interference."

Mr. VlEN: Because I did not, interfere. In the first place, I have not abused the time of the committee since the inception of our sittings. I believed that I had touched a matter of great importance with respect ;'0 the expedition of the committee's business,

111'. McGEER: I thought the hon. gentleman raised an objection, and I started to reply to it. He interrupted before I had completed Illy reply. I started to make' a reply again and I found a similar interruption coming. I feel that if the hon. gentleman will listen to me he possibly may agree with me, Now with regard to the suggestion that I have abused the privilege of the coml~ittee members of this house-

Mr. VIEN: I never said that. 78168'--Zi

iloncl g an II t ion

tauce
l illan
lk of
the
nunc-
tions,
ilume
It the
nain-
inst i"
inned
other
iturcs
titat
nnent
lrt. of
it IS
ill be •
ways
ore 1
estion
rising
he IS
which
h the
:M.r.
much
grati-
sha.ll
gress, 354

STAND/NO COMJ(IT'l'EB

Mr. l\IcCiEEu: I appeared hero before the eommiltcc on banking Hull commore« ill HKH rcconuucuding the l'slah1i"llllwlIl of :l nationally owned public bank,

:'\1'. ';11:;-;: 1 should like to (,OIT('C\ n statement of fact. I never said to (lit, commitlee that Mr. I\l('C;('Ci' had abused the time of the committee. I ~'illlpl~' lrkd to muke n point of objection witl; respect to the line of questions und invost ignl iou» Ihnl he had enr!'i('d on, 1 11<'\'('1' snid that he had abusod-«

~ll'. ~1c(;I':l:It; TIIl'II I :1111 \',}I'Y (,(\nd that] misinterpreted you there,

~I1', ('U:\\'I,:n: 1 t liiuk :'\11', \\('(;('('1' ~llllllid be allowed to answer Colonel \,i['1\';; objl'l'tioll.

\11'. \'H::-;::\iay 1 :':1,\' in thai I'\'~p\,l't WC' han a lwavs the privilege of l'tHTt'ctill" whn: \\'(' ('olt"idcl' a wroru; ~t:\tl'IlI('l1t or Inct: Mr. MeCeel' said that Ill' th(luc~~t I ~:tid that hI' had :11>11::'(:;[ (ill' t iuu- of the committee. I never made any sueh sUl!gl'~lioll, 1 ~illlJliy dn.w Ih(' auention of the chnirmau to the line oi qU('dilill~,

.'IiI' . .'I!c'CI:UC \\'ell,1 am wry glad to llI'C(']lt that.

\ II', Tv« KEll: B v t hcsc ()hkel ions members can prevent any coherent

cxplunatinn lH'il,g m:lli" at- unv ti;lll'.

:'III'. \}C(;ITH: .'III'. Chuinuan, 1 want to carry through here with the Mncmilhu: I'(P(lrL t.he Act, upon which the Bank of Canadu was formed; it cunics :l~ its preamble this ~tat(,ll1ellt:-

\\11('1'(':1::: it i~ desirable to establish a central bank in Canada to rpuulalv l'l'l'tiit and currcncv ill the best interests of t.he economic life of t h'(~ 11 a t ion, t o con trol an(! protect t he external value of the national munct arv unit and to mit iuaic bv its influence fluctuations in the gl'IH'r:tl l('\"(,l of produet ion, (i'aeie, prices and employment, so far as may he i'll:,~ibl(' wit hi» the scope of monetary action, and generally to prol!W[C the economic and financial welfare of the Dominion: Therefore

We enacted this law. :\0\\', what I am pulling to you is this, the straight proposit inn macle by Man-incr Eecles as head of the federal reserve system, in which lie makes this proposition: when private industry and private capital pus~es~t'd 01 nbuudunt financial resources either cannot or will not invest to increase omplovrucnt., then the government must resort to a policy of )ublic investment in social services and general public works to stimulate internal activity.

I\1r. R\l(]cH: That is a question of government policy.

By Mr, Mctlcer :

Q, What I want to ask Mr. Towers is this: do ,~rlllC!ilions similar to those enunciated by Mr. Eccles as existing in the United States obtain ill the Dominion of Canada to-day','-.-A. In the Macmillan commit tee report to which you 'referred a few minutes ago there is a statement which, speaking from memory, tum something like this: To whom can the government of the day turn for

advice Oil matters of financial policy? Lthink that statement and the implication", of it are perfectly all right. It did not say: To whom can the government of the day turn for determination of their financial policy? The questions which you raise, and which were one of the subjects of Mr. Eccles' remarks, arc specifically questions of government policy. I do not feel that it is right or proper for me to say what I think government policy should be.

Q, Let me put this question to you: do you think that the conditions that obtain in Canada now are somewhat similar to the conditions that obtain in the United Slalcs,?-A, If it is sought to draw from that analogy any comment on Mr. Eccles' remarks, I cannot make it. As we have already said on various

[Mr, Graham Ford 'I'owcrs.]

o C.l'flsi on! reasons i Unl"llijsf:

Q,1

countrie ..

Q.l

eoun t riel o.. illdi\'idu

ct· ,

either \1' ploymen think it, that, is (

q,

will lim' and the tion of ~

q. is this: turc on lation, : monee That is on it" cnormoi cerned, able in vcars n ~\'hich J expendi Veil" or

" Q.

erumcn the we: not. be mind, [ in a fc shon leI i ts ('Ill] ,y (' ('[1]

Q, Q, Q,

the gel found,

omrblie

1 to 1 ions )d-~·

onel

o of that, nude

line

-ront

tho I; it

a to fe of ionnl

tho may pro- 1101'0-

aight 11, in .pital fit to ublic ernul

j,j
those
imon
you
nory,
n for
ilica-
vern-
ques-
ccles'
iat it
that
n the
nt on
irious IMNl{lNG ANI) COMM1?lWK

355

ocoasious, tho conditions in both countries are unslItisf(\ot.ol',Y: v.hother the fci)SOI1S nrc tho same QI' not we did no~ sl1Y, but \\"0 ngl'ccd that. they wore both unsal isf aotorv,

Q. We can agree, 1 i hink, that there hi widespread uncmploymonf in both

(lounh·i(·s'?·~A. Undouhlcdl«.

Q. We can agree t.ht\t thoro is an nbundance o[ idle money in both

(·O\m(l'ics?-A. Yell.

q. "'0 can :lgl'C(, that ill Ihc pOii~(,si;ion of private corpornt ions nnd private individuals there is an nbundanee of idle monev?·--A. Yes.

Q. And we oun ngroe thnt in both elllllltri~'" prlv.uo e:tpil:tl and iudustry either will not 01' cannot make the inv('st.ll1cnL nccossnrv to relieve tIll' uuemploymcut situation, 1 think wccnn agree on that· f:ld, can we not '!~A. I think it. wnukl be 1110)'(' prnfituhlo, of course, if wr. (~()lIld urulnrsl anrl something that. is diflleult, (0 umlerstuud. l t is this: why this luck 1I1 upport uuitv ?

Q. \\'dl. if WI.' (':111 ngl'()(' 011 the fad lh:lt they either call nut. or will not, we will have a start. We han' had tho depression with 115 now fur nino long ycare, and the uucmploymcnt ligures, tlH' il1l'I'(':I:-'111g debt figures and the gL'IH'l'al situution or sl.nguution in t'xpnn,.:ioll i" 11\0:-'[ di:,tUl'i>illg, at 1('aO'\, i" it nlll?-·A. YL'''. it· is,

q. What. :\JI'. Eccles says, as head of the fed!'ral reserve banking system

is this: he believes that if the govcnuncnt will launch a program of cxpcndi-

turo on social services and on public works, that money will be put in circulation, increasing the buying power and inducing private enterprisL' to COI11- monee and rc-cst.nblish its own nctivities. Do you agree with thnt?-A. That is n question of govornmental policy, and I !'('ally cannot express a view

on it" We know the spending ouurpnign in the United States has been on an eHOl'mOIlS scale; we know that in !:i(J fat' as the Canadian govcrmucnts arc concorned, their cxpcnrlitures have been such and such n Iiguro ; these are avail-

able in the public accounts. We know that timing the course of the last ten years tromcndous ddi(·it,.; h:\H' 1)('('11 iru-urrcd , no dOllbt wit II t hr idea,; ill mind which ::\11'. Eccles inentioucd. Now, for me to go Iurtlier and say that the - ... oxponditurcs should he such and such, and on such and sHeh objectives next

year or the year af'ter. is a hurdle which I do not feel I call take.

Q. I am not going to nsk you to do that. I wonld say that if tile government can find sume useful practical field of investment that will improve the wculth of Canada and the consumers' buying POWcl' in Canada, would it. not. be advisable for n government to Iollow that COl1l'"t!?--A. That is, to my mind, almost too simple a question, but one which I can answer very readily in a few words. ":oule! we not all agree that it i~ desirable that government should do thincs which would be of goncrnl benefit to the country and increase its omplovmcnt, a '1(1 thereby be of advantage to the country as a whole'? We can all agree with that.

Q. Now, you are acquainted with Mr. Beaudry Lcman't=-A. Yes.

Q. He was a member of the Macmillan Canadian committee-c-A. Yes. Q. Yon arc convcrsaut, wilh the report which he filed as an addendum to

the gonpral report '?Uo you recall hi" stating these things: they are to be found on page OG of the report, section 4. He Rays:-

Sufficient stress has not been laid upon the factors of national recovery, far more dependable and permanent than the temporary nrlvnntngcs 0:' oxpurt tude' of raw l\lat('ri:d~ (II' f(lQ[LbdT~. Oulside markets for our surplus specialized production of certain commodities should unquestionably be sought, hut. it. should always be borne in mind that world markets arc unreliable and a source of constantly rocun-ing disappointment. Rightly or wrongly, but. as a matter of fact,the countries of the world are economically becoming more and more nationalistic, Arc we to await the belated results of international conferences between bankers, that mayor may not, in the ncar or remote future, rostore international exchanges and trade, or shall we endeavour to

356

S1'.H'DlWi COMMI7TEII'

bulld lip as rapidly and :1" soundly :I~ possible OUI' own domestic market ? Paragraphs Nos, :24:3 and 244 should be rend and studied in the light of the l'ffret. that world lll'i('('s have had (1) the value of Held Ol'OpS.

A. I slwllld 1)(' t-;i:\(l If the ('OlllIllJltt'(' ('nlll'd Xlr, Leman before it and asked for till' E-IWt'iiic thoughts undortying 111(':'(' gouorulit ics,

Q, :\1l'a:,\II'('s calculntcd 10 dc\'t·!op intrn-imperial co-operation or imperial lllo1H'lnry CO-P!H'I':ttioll, :l~ :,l'l furl II ill paragraph No, 211, should !lot 1)(' dC'w1o]led b('yond the "('()PC of providing ample facilities fur till' illt('l'('h:lIlgl' of gOIHI" :Inc! ~('l·\'i('('~. unless the ponpl« of Canada unrlorst and nnd decide. ill full knowledge of the consequences, that ('10:'1' lIiOll('tHl'Y cu-opcrul ion may !road to ('105(' economic association, which ill turn is a sh'p t owunls common political action:

Th« I'riLi('i~1)) will douht lr-ss he offered that t h« Iorogoiug observat ious :11'(' limitl'd to l'('"pl'\'ntin!li' (If a nozntivc nature and do not eOI1- \:I;n '1l!.!!.!(,.;dpIL": (If :1 ('(Jll~!rH<,ti\'I' 1'11:11':;('1('1', II -houl.l. 1101\'('\'('1', 1)(' h(l]'l1(' ill mind t hat the covt-nuncut of Canada sonuht J'('commCIHlntions 11'(11\1 :t uroun of men. f{l;'lllf'd into a commission. and not from its individunl liwlllf'er",

\\,ilb lhi~ qunlificni ion :\11', Leman g,,(',,; t his far, docs be not , and declares that Canada (':11I1l1it \\'i"l'l~' dqWlld upon inti-runt iunal t rudc, and that it should not (lPPt'llti UPOli int rn-unporin l t rndv. and l'l'('ommend;: a course of internal devolopmont '~,\, At (lilt' "lng(' PI' t lrv remarks it could be said he recommends ('('I)lJ,)mil' nal ionn li-m in Cunndu : :It :1111!thu' ,'(age he l'('('og:nizt's the importnJH'C (If f,'I'f'ign trade', Whel'(' t11<' bulnnec lies it is impossibl« to sav from n'ading t lu-so romarks.

Q, But in :In~' ('n'ni. whn t h(' <11"'- ~:ty i~ this. thaI t he important thing Ior C:ili:,.,!:t to tI" I': til iIH'I'C'!I"C' it, dOIlH'''tic' m:trkct'?-A, Ah, t hn: is splendid. hut he dill''' not ":1~' how,

(~, Tha: i- om"' (If the jU\F tll:11 \\'t' Ii:il'(' hl'fol'l' ll~,-':\, Yr-s.

(~, "'U\! 1<1 ~'(\\I !ig'I'l'\' wit II 1 hi,.: proposit ion: suppus« that C::tn:tt!a launched on :t IW('QT:tm lIf cxpcnrlitur« for national ,lPfC'lH'(', do you think l hat would iurir. 1\'" • Ill' d,l1l1",tic' 1Il:1rkl't in C:mllll:\'?""·A, On balaucc?

Q, III :lIi~" \\':\\'','."-.\, r would -lty t hru t h« thing would operate "'lll1C\\'hat a lou.: til('~I' line:', rh.u in an ('11<1(':\\'11\11' of lli:)l kind-l withdraw that, 1)(,(,:H1~c it j," not a -uhjcr-t iln \\'!,icli olh' :'!)!ll\ld -pc-ak cxtcmpornncous lv. 1)\' nt ka:'t I :11"11 .u it C:l]ldhJe (If t1ilill:' 'll, l would ":(1(1:1<'1' pi lint ll) OIlC lit' t he inc-mnra ncla th.r: w(' put O!1 1'1'('nrr! ,!t:l' d,,:1i- wit h t 1i:11 :1- (':tjlltl,l~' :1" In' rnn. If T nl.t cmpt od ttl p~tr:tpllra~(· J \\'Illild -;i!llpl~· ('(jllfu..:{· ,li(' ('tlllJ!lljltC'£,.

(), I ~il"l1id lik« \,,111 to ('i;"ck tli(':'(' li!':l1],('-, I worked t lu-:u out , and I

\York"d ~!lt·in lJllt i'ridl; iuf.umru ion. ;--:u;-)r>lj('(.l "llH' by- ~h(> Bureau nr Stali~tie.;.:. I \\",,:dd ':1\' t L'I\ in·da\', 1lll,ft-\Il'ing our cmunurru iv« 1':1 •. DI'S \)('1\':('('11 this nation :(lld :!:c ("nil,',! l\'in!,:,i'lI11, that is 't:tkill~ Oltl: ('llllip:II'ati\'(' po"ition of population, nl u.u ioun l ,kIll. ()f 1l:llillf1lti iJH,!;]tJP, pl' atrumulntr-cl hank (kpllsits :tnc! money \\'cnltl}, and )'(",I!!j'(',," of wealth. Ill' pa~t ('Xjll'lldit:il',,-. of arlvanrr-s. or value of :1:',,(,;:, wit hin 1]1\' nni io n. PI' volum« of iutr-rnnt innal 11':Hle, if \\'c in Canada were -pending 1111 (kit-neT, mcasurcrl in t erms (If t hoso comparisons. un tho same h:l,i~ that tlie t"nitl'<l Ki ngdum is i'IWnding:, instead of "Jl('1Hling' $G3,OOO,OOO t hi- ),(:11', \\'(' \\'11111<1 hc' "lwlHlin!': more than 8500,000,000, The proposition that 1 Hm pl1 t t j 11;>; t n ~'OU i~ t his: i r wo launched on all adequate prozrnm of clef euce a" (IPtf'l'llllll('d hv 111(' dcff'IlCl' p()li('~' of th(' l 'nitod I\.ingclOlll, the expenditures invnlvr-d wuuld in('J'(':FP employment in tho domestic market in Canada, Do :'il11 :t!.!TC''' wir h t hat ?--A, I hnvr- put eWl'ythillg; I can think of on that subject 111 n memorandum.

Q, You will gpt it from the re('ord'?-A, Yes.

h: m

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p

11 )1

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s

B t f

BANKING ANI) COMMEm'{~

nt'~HQ ittill''' died in th~ tidd Cl'\.1pS.

,1 askl.'d for

q. At the moment 1 want to draw yO\1\' attention to the statement Iun.dp by the Minister of }\'innnC(\ in his budget speuel; l'ef(,l'rin~ to 'how CnIHH\a\; trade might be improved. You will lind it invHansard of April 2;') nt page 3398, and he says this:~

For! unntolv, also, business pros-pests for bot h tho U nited States and the United Kingdom for the current fiscal year nrc such as to justify high hopes for a substantial expansion in the sale of OUl' expo)'t; eummfHlitjl's tn those two grcat markets. Business in Great Britaln has been improving in recent months am! under the revitalized re-nrnnuncnt program it should continue to improve hrx-ause that enuutry ~ti\l has unemplovod resources avnilablc for oxnunsiun.

Now, ill your me.uoruudum which you will )11'(']1111'<'-- ---A. Whil'h we have prepared.

Q. \\"l'll then, \YlJen?--A. It. is 011 ill!' record.

Q. It' the :'Ilini~t('\" of Finalll'l' ill hi,: posit ion H" :1\1\'1-\'1' on our budget situation cun I ell \IS that I lu: vast ro-annnmeut program is ~oing to inCl'{'HR<' and improve business ('Oll(litioll~ ill·the l'llitedKingliolll whv will :'lll'h a progr.in: not. produce ('he sruno rcsu It 1'01' Canada ?-A. Is t lint a question, 111'. l\J ('Gee!''?

Q. Ye~.-A. I can only refer you back to t.he mcmorunda which'] have already placed Oil record.

Q. I do not wish you to deal with the political economy of it, I want. you to speak as the Governor of the Bank of Canada in relation to the financial situation.c -A. I lllll pcil'ting out that Lhnve already said all I kucw on that. subject, or could usefully say.

Q. If you want to ICHve it. at that it is all righL·~:\. In other words, the answer to the implicntion of that question is nlrondy 01\ the record. It would take a few minutes to find the varioussections of the record where it will be found, but it is tIH'l'C'.

Hon. :\11'. STEVE~S: Woulri you mind indicating which statement it is ill. 1'1'11'. TOWERS: \\'e will find that for vou in a moment. As soon as we have found the various part s cunr.crncd we wif! indicate them.

I)ctntioll (J\' \ :Xu. 211, ill' faei lities

of Canada NWCS, that association,

19 observe- 10 not, eon- 10\\'('\'('1'. be unendutions nn its indi-

eclarcs that

should not .rnal devol'ccommcnds [he import) say from

ill thing Ior 1kndid: but

la launched t Ita t would

l' ~.':nl'\\-h:1t uu . bocnuse (\J' :t t least 1111 <mora ucla I ;\lH'mptl'd

By JIr. JlcGccr:

Q. While you are looking that up I would like to know vour opinion of the effect of a !'C;ll'lw"nent Jll'(l~r:un on C':ll1:tth. \'0\\ Hl'P aware, I suppn-c. in your studies of the resources (if this nation that Canada is a producer of (he metals required for armament .lovolopmcnt whu-h whil» undeveloped make \18 one of the most srl l-r ont ni ncd countries of the world?---:\. ?\lc-l:ds required for nrmaments-c-I should imagine so.

Q. That is, we hun undeveloped, according to OUl' reports of 0\11" departmcnt 01 rnincs, abundant supplies of iron ore, we 1][1\'(' '-1Ft resources of copper, and nickel: and zinc and lead. upon wl.ich 'Y(' as yd. h:1V(' nnthuilt a metal industry. We hnvc the means 'of 'setting tip n motalIndustry that. would permit us to take Iroin our mineral resources all the metals that would go into anna.mcnts, ships, aud all that is roqui: cd ; till' nnly thing we lack ie' t.lic place for men to go II) work; builrliup Canadian metals into Canadian tools of trade and Canadian instruments or dl'f('IH'C. An' we not :I" tile result, of Dill' rninernl wealth in n much better position to develop a mctr.l industry that will produce tools and machines of peace and defence thad is Croat Britain?

Mr. L\XDERYOL:: Hear, hear.

Mr. Towrcns: Is it suggested that the reasons why there arc not these industries in Canada are monetary reasons?

IVIr. L\NDERYOU: YCE'.

out. a n.l I

Int.ist it-s. I t.h i- nation population. :l!Id 1ll0lWY (If value c;r [[lIada were 1 the same sea.oeunoo nsirion that I of ddcllCl' xpcndi Lures inada. Do hat subject

357

358

S1'A,NDlNG COMMJ'l'7'BS

13/1 ill!-. McC/ctl·;

Q. Now, j\l:'t n moment: I was Hl'!(uing another question, nnd I was asking yon that if WI' lnunchcd on It program of public expense on defence would we} not t'xpe('\ to have nil 111)1)1'0\'l'1I1('1I1 In the d0111(,;':\ it' market lind the employment situation in till' Domillio·l)· of CUllHda,?-A. I lwg; yOU1' pardon, 1\11', 1\lcG('ol', I \\'H" trying to" lind tlH'~(' 11\("1101'Ulldn.

Q. Yos. I suicl. if woInum-hcd Oil n prugrnm of dcveloping nrmaments f'or Canadian dpf('lI('f' would we 1101 improve till' dOllll':,Lic markets in Canndn find !lH' l'1I1pl"~'lllt'l\t situnlioll,!--A. The possibilit ies and the limitations. of aotivitics 111 t lmt k inrl !Ju\'(' nl1'('nd~' been, so r~\1' ns I Hill enpablo of dealing with them, dc'all wuh in Ih\' \':U'iOlh': sor-t ions of tIll' n'('Nt! of which I shall huvo the page nllIl\l,n,.: Iur YOII in dul' ('0111';0;('.

(~. \'''\1 ;lid not denl ~pl'('in('nll~' with tht' :-tatf'lllC'nt of the Minister of Fin:tIH'\' 111:l! ~lI('h a P]'og1':lll1 w(luliln'FlIll ill improved employment. and business j·pl'ditillll-': in (;I'\'l1t Britain; nl~r1 i lu: tllin~ I jllliltt('(1 out. was this) thnt because d I'm numerous 11\ i 111'1":) I rcsourrrs ill Cnnada we [\1'{' in a better position to take nrlv« lit a[!:\' {I f (Ill' upJlllrl unity '\1' hidl t'xi~I" through present day domnnds for dl'\lll"in' iu-t runu-nts than i~ C;n':d Britain. Till,)'(·f'H'C', my proposition to you is, t lmt ii il \W'I'(' right for the :\'ini~tt,l' of Finauco to .sny it was guod Ior Great Ih-imin, t1WI1 ii must he 11l1wII 11101'(' ri!!ht to ~ay thal it would he even better Ior tlL' Dlllllinilllt of ('nnnda: do vou disugrcr: with t1lflt'?-·A. The possibilities ill (lwl (,()H1H'I'liol1 nnd t lu: lunitnt iuns whirh C:\Ilada face'S hav(' been dealt wilh "P 1:11' :1:" [ :11\1 (·:tpable of dl'nling: with thom in this mcmornnrlum.

(r \"('r~' \\"(·11. 'I'h.u i~ vnur :111.-\\'('1' tl' l!tat. Then, I wnnr to deal with unoilu-r j\1"I,hlt"lll. You :11"(' nwnro (If til(' vnriuus Iactors in international trade, :In' you 1101 '?-_.-.\. I 11l'1'\' ~Il. ill n !!"IIl'l'al \\ ... :.

Q. \lIlt' of t ho most import n n! il"'IIIo' ill our intornntionnl trade picture to-day is 11 Invour.ihh- return (In hnl.uu-c Iroin t ho tOll1"i~t track; is thnt right,?-A. Yes. (l. YO\! :It"l' aware t lint i his "I1ltlltr:; 11:!J)Ilei)": to lie ;llo11U; "ide' '~f the United ."tat.c> ,,"hi,·" P0":":I''':'',·'' rhe 1:11'1,':('''( populut i..» of l'(juiP1H'd motor Iourisf s of any u.u ion in t 11(' world '?---:\. Y (.~.

Q.YIl\l fin' awnrc t hn t IhI· l:lO.nOrJ.noo p""pk in the l.'nitcd Slall'~ han rouvh!v ;~O.()(JO.O(JO :llltomnlJilf'''':---.\. \'('0.

Q: That us ('Oltlp:\I"l'd wit}: n similar population in number of Germany, Franl"\" uud England, Illf,1 tIll'.'.' h.iv« fin' i inu-s lIlt' nutomobilos that are possessed in t"""(' t hroc r::nrojll'f1l1 l'lllllliri(>'?--,\. I do not rocnl l the figure", but I. would 1I0t 1,(' -urprist«].

(~. )'1111 :II'C' f1],'0 awar« that \\'P )'('i·l,j\"(· and 11:I\-e rcr-civcd f'or the last l111IlJIH"l' oi" VI:!1"."" an :1\"('I"H'.':P net ret urn on tourist tratil' of $150.000,0(;J in

round fi~!:tt;·(·>:---.\. Yl'"'. .

U. Un vou know 1,1 am' form of intcmal iunnl trade that is .morc valuable t lmn th' tOl;ri:'t tnHlP?-'\. '1\'0.

Q. It i..: a trade' tlint hrin~,~ Lhe ("OIFU!lWr of vour ;::llods lI"it·11 his for~ign ('xchange right lO your hnmr whore he consumes 'both goods mid fo,l'1'\'i('('s?-

A. )'("~.

, Q. His PxpC'llditl\rl"~ of mnncv create ]:('\\' money wealth in tlie ('ountry'?\. \\'c can buv muro from abroad.

q, Bll\, nt'(I"P from abroad. nne! in that say we devolop more act.ivities at

hCllIH'.-A Y('.~. .

Q. SO that. the tourist trade .as far as Canada is concerned to-day is OUl' must. imporl.nut anrl lhc most valuable item in inl.crnntional trade?-K. There arc i'rob:lhl~' 011(' 01' two othn important. items, such ·ns gold.

Q. We don't bot as much out, of gold?

The CIL\m~L\x: Is your figure t.hl' net. figure? :\f r. :l\Ic(;EJ-:R : Net, yes.

1Mr. Gr"halll Fon! Tower-«]

'rllt! Ivll'. said thnt .

Ii

Q,'I'l

ooonomlc stni,isticE : and thov is contain agree with estimates and tho it lVII'. Tnwei our tourisl rea'! asset, improved trade posi

Q. NI make a sf 1.,0 mo. I c tourist. trn of $200.00 where nbc 4 per cent tiug to yc is t.here 11 do two tl tracle?--A ("ourse,as Dominion

Q. Dr spen~ling I prOVJJ1C'cs Q. v. to continu

Q. I. $'10,000,00 he more t notwithsta gntions.

Mr. I lvIr. }' Dcveloprn Hlat. 1,l1('Y with their is this: w Scotia, in Quebec: i Cohnnbia

Mr, I Mr. ] centres of opening 11]

]h1Nl(JNG ANI) OOMMJt:JWE

359

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at
our
iere 'rheCUA1RMAN: 'faking out our expenditures?

Mr. McGmDJt: Yes, t;hQ 1$>150,000,000 is .'\ct. figure, 1 .. 11'. Ohainnan, I

said that I eut bhe estimato down to It flgure t.h'\t I know is safe.

By Mr. McOee)'.'

Q. There was a survey marie by bhe Royal Hank of Canad« in 'which the economic- dcparnuont or the Roval Bank of Cunn.ln \\"('11[, into our dcpurtmeut statistics and made It very dose oxamlnation of the compiling of Infonnntion find Lhey gave their approval III it. That- i, a \'('1'~' intore-ting survey and it is contained in the November, 19a5, lett-PI' of the Il oyal Bank of Canada, I ngreo withmy friend when he says that we could not ~:1Y dcfinitclv from 1.h(,80 estimates the di"{'i'('te amount. of 0111' prufits. but \1'(' dr' know from tho sl at isl ics and t.ho information that, it. is enormously valunbl«. What T wan(. to gc-t. at, Mr. TOWel'S. is thi~: if we ('ould invest. III unr: v in Canada which would increase OUI' tourisl, trudo would not. we be successful 'in ]Jutting pC'ople to work creating real assets in tho Dominion of Canada t.hnt. would result not, only in bhc improved internal conditions but. an actual improvement in the intcrnnt.iona! brado posit.ion?-A, Yes,

Q, Now, I put this flguro to you: there arc eerl.ain vucn in Canada who make a study of this trude and one distinguished lorulor lif transportation snid to me, I do not. soc why with proper development. we sho.ild not incronso 0111' tourist. trade to $500,000,000 a year; and he added the remark t.hat t.l1C increusc of $200,000,000 0\,('1' and above and beyond the $30[),(}OO.rno which is some. where about tho figure of to-day, would pay intorosf on an investment at 4 per cenf of five thousand million dollars, Now, Mr. Towers. what 1 run put. ting tLl you as a prncl.ieal banker, the head of the Bank or r::1llnila, is this: is i.here not a Held of opportunity for Canadian developmon]. there Chat. will do two things, improve our domestic market and imprnve OUl' international .tracle,?-A, That is the assumption on which we have been ~~oing; and, of (,Olll'se,as you will recall, the various provinces and 10 nvcrtuin (,X[('1It, the Dominion government havo been basing their ati \'i f ios on t hat thought,

Q. Do you know how much money the Drmin-nn gr.vcrtlnH'nt has been spending on various 'highways'1-A. I do not ]'cI':111. I do recall thnt various provinces have spent a good deal.

Q. You know t.hat, t.he various provinces have now exhausted their power to continue these I .rograms ,?-A, I rio not knnw that.

Q. I can tell you that in the Province of Ontario they hayc spent $40,000,000 last, yen!'; but the total avnilnble expenditure this Y(,:1l' will not be 11101'C than $0,000,000 and possibly coneidornhlv loss than t ha t., .ind that. is notwitlrst.anding [1 necessary increase in gasolcnc taxes to financo extended obli .. gations. That is the situation in Ontario, and I will troll you tnOl'e~-

1\11', Howxnn: The situation in Quebec is "\\",:)]''3(',

1\11', McGElm: One of the representatives of the Department of Highway Development in the Province of Ont.ario stated that:o complete thi~ program Hwt, they have under way to equip Ontario with tourisl.highwnys would take, with their financial resources, some 81 years (0 finish. Now, \\"hat I put to you is this: we have great. tourist resources andattractions in Cape Breton, in Nova Scotia, in New Brunswick, in Primp Edward I~JaJl(I.allcl in the Province of Quebec; in Ontario, in Manitoba, in Saskatchewan, in Alborta vmd in British Columbia.

1\-11', LANDEHY01.': Heal', hear.

Mr. McGElm: There arc innumerable (,n;lOl'tullities to build highways to centres of natural wonder and beauty, There is more work crying to be done opening up our tourist attractions with highways, improve OUl' camping grounds,

STA.VIH.\'G COM.HJ'I"I'l?8

lWf\ulifYlng eouutry und cities, thall (11<'1'1' is nny po:;sihility of finding ei III or eqnipnwnl. or labour to build in C(mnda. Would it not in your opinion be good business fer ill(' ~()\'('rnn\('nt of til(' Dominion that has the powur to create an issue of 1lI11H'Y under its laws to bring about H scheme or co-operntlon between our IIll'I'I'h:1l1\ hanks, \lUI' Bunk or (':llladn, 0111' Dnminion govPI'llHH'nt, OUI' PI'Ovinciul ann munlviunl nuthorit ies, to lh« ('!HI thnl We' could finance' II I'l'nl C!llulclillll jlrogram of tourist nUm('\ ion nnd t\r'nolopnwnt'?

SOllie hun. ,\lnull':1l8: Hear. hour.

;"11'. '1\I\\TII;;. 'y~'1)1' implicnt inu thpJ'(' I'; thnt. quito apart from the desirability of lli(' I'XIH'IHli!IlI'l', thl' thillg to do is to finnuco them hy incroasing the volume of mont-y?

\11'. \ld:11:11: Yl'''.

\11'. TO\\'I':Il";: :'\o\\'. 11H'l'e I" Oil till' ll1l'lllOralltll1ll1 on n'eord all till' views that I ('Puld ('XPI'\'"'' III 1'l'gtlJ'(ilo that qut-st iou of finnncing glJ\'(,I'llIlH·nt. oxpendi-

llln'~ h~' I lu i"~\Il' of l'IIITt'IH'y,

\11'. ~Id :rn~: Y(',:.

\11'. T()\\TH'';; II (';111,011'11\11', . \w \'l'I1H'llllwn',J that th:i! i" 1\11\ till' onlv wnv of Iiu.uu-inu i.';\l\·I'I'IIIlIi'llt I'X(H'llililllJ'('" ill C'XI'l''''' 01 1'(,\,1'1)1)(',. It is pos"il;1l' I'm' CO\'('l'lIllll'Ht tu l:lkt' (1\"'1' th\' ,:l\'il1U:- "I' tllP p(lIpk tor 1Iw-(' pllrpll"('~, and (hat. is in fact ill a 11ll':I"lIIT till' \\'a~' in which Ih{'~' han' In-on bllrn)\\'ill~ 1lI01H'y. I can l'Xpn'':': lIpinion,.; as to the pl'(Ihablt, result of Iinnucinp; by tht' i,,";I1(' of eurrcney->

\\1'. l\\d.:Enc T did not say h~· an issue of l'urrPII(,Y· 1\11'. Towuus: Wl'Il. by lilt' j";<I\(' of ('I'('<lit then.

\\1'. l\1,.{in·:B::'\u, I said, h.\· bringillg into l'l)-npel'ati\,l' agreeltlcnt. the mcrr-huut h.rnks. l lu- B:lllk or Cu n.ul«, til(' go\'('!'nllwllt of Cnnadn, and th(' provincial nuthorit ios.

Mr. TOWI':HS: Well, T do not know what. that means. I assume that questions dircctv.l to 11)(' iuusl han' i'ometlling to do with tho financial end of it.

:'TI'. -;\IcGEI·:n: I don't \I':illt YOII to ~ay thHt I slIgt(l'i'I,'d it could be done by till' i,,:'\I(' of 1'1l1T('lIl'~·. which T '!id nul snv : ll('(':ltl~r' 1 am quilt' aware of the implication thnt romcs from that , that tinder 0111' pro.sent law that would mean :1!1 i~"IH' of Bank nf Can:lda hills which would rr-sult ill an inflationary condition in bank (kp{i~it,.;. But whu! I urn :-<:lying to you is that under our exisllngsystem we (':111 by (1\11' morr-hnul hank" ngrr'cing to discount g(lYernmcntal securities at. n !';llt' of in! ('1'(,,,( to 1)(' ngl'l'l'<\ upon bC'lWI'PIl the g()\'(,l'Illl1ent, the Bank of Canada and (Ii(' movehnut hn nks, whiel; woulr! in tlH' terms of the empire monetary ('{llllmit((,t:" report, \)[' ns low as pn-siblo ; nnd T :1111 "Ilgg('~lillg to you that ""ith [Iud npjl(ll'lllnit~· we hnvc hr-Iorc 110' would it not bt, advisable to inaugurate through lIJ('~(' r-hn nnr-ls tho investment of unt.ionnl en·dit and provincial credit nnd n 111I1 ic il':t I ('I'('ili t t lin t would result in improving employment in Canada nncl ('(l'IIl'I':t1 conditiol1" tlirollLdlUllt the Dominion of Cnuadn and our internntiOllf{1 11':1(\" bnLIl(,c a- well.'

Mr. l\)\\THS: The same thing euuld he nccolllpli,hcd by borrO\\'ing the S:lV-

iugs of [11(' p('ople,

\TI'. \TcCiE1m: Vcrv we-ll then. \\'1' come back to Marriner Eccles' proposition, t.nat if the puhlic cannot or will not make it possible tn have that iuvcstrucrrt thr-n should the g(lVCI'llJlH'llt not undertake a lead and bring it about through

gon'rlllnPllhtl financial )lolil'Y.

Mr. TOWElts: T do not think that WHS Marriner Erell'S' proposition, That is a differcnt story. He Wit" ~ayillg that if private capit.al docs 1I0t embark on capital -development then the go\'('rnmcnt. should jump into tho picture and grcatlv increase its expe.'Hliturc's. He did not go on to show how he thought the government should finance this increaser] expenditure. He did not say

[?lfr. (Ira luuu Ford Tnwcrs.]

whethcr hi in tho cou said he Io rt'

1\1)'. 1\ did want I doubt othe I understa results in I the Hallie cxiel.ing it! the volume mont of pt of {'ollfil/C'1l medium of Canndian ' private im at the pres

1\JI'. '1'1 ullv. if I n end of to-r ill Iormatioi

/

13:

Q. XU idle and it lt1U])(:Y to nation al Lr t hat would determine i

(~, Yc., both i'01' HI whether 01' mcnt that there woul go vcrnrucn I any other corned, it Therefore prcsuma 11]'

Q. Or"

in Great TIl rc-nrmamci that Gn'at. Letter.

Q. I tl prcscn t ti II twe ty-Iivc that.

1\11'. Cr Tceol'cl. 1 concludes i: is: In view employ pre the employ; works of H And rnv sr financecl?

Omlor , goq~l ttc nn tween l' pro\ t'NIl

dcsirllg tho

views pendi-

IV wav lile for that is

I can

'nt, the nd the

estions

e (lone

of the I mean ndition system it'lei' at. nnk of

moncm that igurate : credit ~annda ntcrna-

he snv-

osition, -stmcnt .hrough

That iark on tro and thought rot say

BANK/NO AS/) CONMJiJRCE

361

,

whether he thought it should he through the cxpanslon of currcuoy and (,l'c(iit in the country or wlwtlJ('\' it should be by bOl'l'owillg private savings. As r said before, 1 cannot CXl\rCSS Hny opinion on the level of government, expenditures.

Mr. ~lcGElm: 1 lak<' it from !'cnding vour roports \'Cry ('nrnflllly"-nnd I dhJ want to go into that· with the members of thc couuniut-c, and I have )1() doubt other members of the conunittce want to deal \\'ilh it in the :'IIlIH' \\'II\'I understand your momorandum to snv t.his: if govcrnuu-nl.al oxpcnditure l'OSU!t,; in the produet ion of either 1l1l1)('('(':;S:lI'), 01' unsalcablc products nnd if at. the same time govc I'll III en tal cxpcndit me results in il\('I'C:18111)..'; surpluses of existing idle (:UI'I'l'IH'Y Hl\d credit und if those cxpcudituros result in increasing the volume or debt to the point. of making t axal.iun mol') burdensome and payment of public debt, more impossihlc, t lu-n Ill(' 1'(,~1I1t would bl' t he d('~!l'udi(lll ofcunlidonc« ill tht' couut rv nL largo and ill t hc {'II1'l'PIH'Y vnluo or till' nation's medium of exelumgc. and ilia! in 1mll wil! result ill a I'Hlssibie flight from Che Canadian dollar and a gl'llf'I'al luck of eunlldemo und l'ullrnge on tlJl! part. of private investors and :t gITlI!('1' collapse of lhe l'l'ol1ollli{' structure t.han exists at the present lime.

Mr. 'I'owuns: I am :"Ot'J'y, Xl r. .:\leOo('l', I cnnnot deal with that. Iucidontally, if I mnv have the permission of the committee I would put duwu aL. the end of to-day's record the ref('l'l'Il\'es to tbe vuriuus paw's whcro I think (his information may be found.

I

By u-. McGeeI':

Q. ~ow we come back to the Marriner Eccles' proposiuun ; 11 mOIH:)' is idle and it is not going to be cmployt«] and (.he government steps ill and puts money to work in new employment, creating nell' wealth, improving international trade and improving the employment situation, then J 011 would say that would be a saic iuvcstrncut for national l'I'edit,?--·A, Yes, it i,; cusy Lo determine llll! principle, hut sometimes hard 10 apply it.

Q, Yes. Then II'haL we as purliamcutnrians have to do in thi,; matter, both for armnmcnt expeutliturus lind tourist trade cxpeuditurcs, is ,to determine whether or not the employment. which would be thereby provided, lhe investmcut that thoro would be de\'e]ojlcd, and the consumers buying P')\\'C'l' that there would be created, would be a result that would 1101 ('U1Ill1 unless the government L(iilk that net ion, 01' a better result than any that would rC~lllt from any other action ,?---A. 1 take it that :::0 tal' as HI'IIlHI1lC:lIt expenditures nrc eoncorned, it is !I!'\,CJ' contended that more productive things could not be dUIIO, Thcrc luro armament expenditures should be determined by the g;oVCl'lIlllcnt presumably in the interests of det'cn('c--whieh, of course, is quitr: ],,,:'lllHl me,

Q. Of course, you will ngrl'l' with Mr. Dunning's stntcmcm t hut. " !Ju::;;nes'; ill Great Britain has ber-n improving; ill recent months and lind!')' till' revitalized re-armament program it should continue to improve ;''!-A. He did not suggest that Grcat. Britain could Hot lurve dune something else which might I,ave been better.

Q. I think we arc all agreed that in the light of world conditions at the present time democrucy Ims to be reasonably well armed for the next ten or twe: ty-five years at least '1-1\, I am epccificnllynot expressing an opinion on that.

Mr. CLEAVER: I have two short questions which I would like to put On the record. 1 flo not expect answers to them to-clay, kit before this committee concludes ils work I would like to have all answer to them. My first question is: In view of present day actual conditions do you nob think that in. order to employ present idle hboul' the government. of Canada should enter the field of the employment ofIabour by the construction of non-rcvcnue-proclucing public works 0[' such a nature as would not be in competition with private ellterpri::;e? And Illy second question is: HoI\' in your opinion could this work best be fin an ced ?

Tlif: ('1\;\11\:\1,\>; What is you\' plrn~l\I'e as to ndjourument, more partlou-

];\r!\', with l'l'spl'd () our uext. llH'nlng? The Governo:' (~1r, TOWC\'8) just lni,31'lIls HW thaI he Ins a wry he!wy artNl1O(Jn's work.

~lr, \lrGt:Ul: 1 would like to tol\(, ar\YHntnge of this opportunity to place two q\lt'~tll1ll" on the r('('orr\ to which I would like to have nnswcrs at the uex; :-;\ttinit of our ('!II1l111it IPP, or as elll'ly as mny be convenient. My

qHI'S110n" :\1'1'>-'

I, "');:\1. PU\\TI'Ci \\'('J'[' \'(',~{('d in 1 n 1 the hnuks

Ihl til\' Xl iuistr-r llf Fin:II]('(', and i (' i 1 ht' (:u\'('l'nnl' ill ('11\111\,i1.

I

l:N.FOJ

and h:I\'(' lWt'1l trall,fer!'!'.! t o th(' Bank of Canada?

.J What ptl\\'L'I'~ \H'l'l' I'Pllkl'l'I'd h~' k~i:-d:ltjlln or urlkl'-in-('oul1eil to the

Ibnl, pi (':1n:III:1 and wcr" ttOl pn·\'i(ill'l~' \,('~t('d in

\11 i the hanks

1/' I till' :\lini~tl,'r pf Fiunnc«. .unl I 'I thl' C:lIY('I'Il"r in t 'ounr-i],

,\,j.; luI' ," I'lIru!.' :\l1~\\'('1'~ [nr IU) (/)} Cr') ll1 cue]: question.

'dr. '\\>\\l,Ii": {If ,'{lm,';l', 1 li:i\'(' 10 rcply 10 t.ho-« by ~:Iying that they nrc kg:d 11\:,,1,,1" \1'1111'1! I i.l.i uk ~Ii(l\lld 1>1' I'cj'I'1Tl'd 10 th(' !:t\\, ()f1i('('r:, or ihl' crown. :\lr,:\\C<;Luc [illI,lt'l':'lnnd ih:lt your l'('pl~' is t hat the Bank of Canada Iwt 1.:(\'\1\;':: :1 lvg:il dCP:Il'IIl\(,ll\ ",'

:\ I r. '\\>\\TI>: '1'11:11, i~ not 111;" rr-ply.

\11'. :\\r(;UH: ,--]1(11 h:t\'ing ;1 kg:tI dl'p:trl111C'11\. and ha\'ing its legal work dnlle' h~' the IJ(llJ:\rtlrlcnt ot IJU~t 1('t"'-·--

\11'. '!'O\\'I:n,,: );p, mv rr-nlv ie, ih:d t hov art' Jr.!.'::11 mnttors relatino; to i li" jHl\\(,l':' {II ! hI' gO\'l'l'U;\lCn\' :'uld of \lIt' (;"]\'('1'1\(11' i'll Council prior icl- tho l':'t:lhli . -huuu! pi tllC'lhnk III (':111flll:1. :11Id :1"; such I dn not think thnl. we nrc the' ;Qlp1'Opri:Jtl' ]1('oplc (0 mnkc t lrosc n:plif'"'

:\11'. '1'('('1\11:: Do I UIl(h'l':,t:l11d that vou wil] lw able to deal with the CJtli'~ti";b :l"kt'd by :\11'. Dnnnl'll~' at om n;('\'iing tomorrow morning?

'\\:-, 'J'c)\\'LH:< 'y\,~,

*G

INTEH

'1'}'(l(/')It 1)(0;

Comma De

Commo De

INTEl

Till' ('Olllllliilt'I' ;1,J.iolll'lll'd :t1 1 :0;') 1I'('](wj; 1'.111. to 11)('('i again to-morrow, \I:i:: ·1:11, In;)!), :tIll o'cltH'k n.m.

D

JeU~ lu~t

1935 1936

Deposi tors' balunccs .. .. .. .. .. .. 22.5 22.0

Currcntintcrcst rate 2.00%

BANJ(lNG AN]) COMMERCe

APPENOIX ~'A"

," to s nt, My

INFOHl\lATlON Sl'IDIlTTED BY :\IH, TO\\"lmS AT THE lU:QUEST OF }\\ E:'IBEHS 01"'1'11 E CO:\I:\II'rTEE

]h:QtT~TEIl BY :\in.!'Ioom:

Uniter! l\illw{oll/

Uolrl HcoS( 1'1'(8" (f til' 0\1 ll('('~ ) :\hl"eh :3L;~8

J m.oonooo

S(·pt. :m.38 ml,OOO.OOO

De('. :Hiat 28,000.000

I the

• Gold held by Bank of Eng:lan(1 iuul Exchange Eqllaliwlioll Arc-oun!.

]hxn~E;::'TF]) BY :\1 It. 1\ leU n:n

INTEHEST BEAlUNG On. S .. \VINGS DEPOSITS OF CEHTAIN ADSTHALIAN lL\NKS (~lillinll or £:\.)

1036

19:31

J\):n IS9.0

']'radiIlY Ruuke->

Deposits bon ring interest (Dec. quurter)

Oomlllollll"culih ;'o!(lI'ill!ls 11<111"'--

Depositors' hnluu-cs ami interest (Dec. :n)

Oommml1l'calth Ballk-

DCPORits bearing inl crust" (ex, Govt.)

(Dec. quu rt.o r) , .

li8.8 "" 179.8

1\)2.1

~'F are ·OWl!. .nadn

12i.:I

132.5

140.4

28.3

26.2

work

* Other than GOI·Cl"llIlH'IIt.; includes dcposit« of sayings banks and quusi-govt, bodies

INTEREST HATES ON I"''l'ERT~S']' BEARING on SAVINGS DEPOSITS IN AUS'l'IULIA

19 to II the e arc

Dec(·mbcr.1938 2.00%

:! . f}O(/~J 2.i5'ih 3.00%

:l'radillg Banlcs=-

'I'hrco month , " , .. , .

Six months " .. .. .. .. " ., .. ., .. ., .. .. ..

Twelve months , , , ..

Two ycurs .. .. .. .. .. " .. .. .. .. .. .. ,. .. .. .. .. ..

Oommollwealth S,,!'iIl08 Bank--

Up to £500 .

£501 to £1,300 ., ..

Oommoll'wcalfo; Bank-

'I'h reo months .... , .... ,

Six months ., ., .. .. .. ., .. .. .. .. .. .. ..

;l:wc!l'c months .. ., ., .. .. .. .. .. ., .. .. ., ., ..

I'wo years , , , , .

2.00% 2 .50(;~ 2.75<;0 3.00%

h the

2.00r;:~ 1.75(;'0

i)TOW,

UNITED KINGDOM POb'!' OFFICE SAVINGS BANKS

(Millions of t: Sterling) 1934 1935 354.8 3(}O.3

]936 432.4

1937 470.5

1938 508.8 (Nov.)

Depositors' bulunecs .. .,

Current interest ratc 2.50%

REQUEST1<:D BY 1\'IR. LAWSON

CANADIAN POST OFFICE SAVINGS BANK DEPOSITS

(Millions of Dollars)

March 31 1937 21.9

1938 22.6

1039 23.1

363

1038

107.7

110.8

l'lldn 81 (1.01111 (l\l'r ;:;111.('('(1 ..

1.;'0% 1.00%

STANDING (,OMJfl1''l'EE

HEQn~&TT';D In: 1llt. Vn;~ oxrxmo S,Wl:\(;;4 OFFICES

LiahJ1ili,'s-

Df!PPHihll'~' hnlnncp:; .. H('~('r\"l\ ••

:!~,a n.a

:12.1l 0.:1

H137 1038
37.7 40.a
0.:1 n.:!
:\8.(\ -lo.n FUllds {\II .lnpo.":'it with Ontario GO\'l'rV1l\('nt ill

('1\,1l 01\ hall,l and in banks .

,,\";-\.1\111ts l'd'pj\'nblc· ,. . .

(IHilt,' lU1'llltlll'(' and VqUipllH'lIt ,

'21. D :~ I .3 aO.n :Hl.·!
0,7 1.11 1.1l J .J
0.1 I) .1 (I I n. I
~~.U a2.a a~ .0 40.0 APPENDIX "'B'!

HEFrmE)\CES

The follo\\'ing P:lgC" of (he printed 1'('('()I'([ arc illdic;ltc(j hy MI'. Towers for rC'i'Pl'(,lH'C wit h ro-pcct to information roquostod Irnm him during the course of thi" dav 's proceedings, viz.: Pages 61, 88. H8-151. 202.

SESSlON 1939 HOUSE OF COMMONS

STANDING COMMITTEE

ON

BANKING AND CQ'MMERCE

MINUTES OF PROCEEDINGS AND EVIDENCE

Respecting the

WITNESS:

MrGraham Ford Towers, Governor of the Bank of Canada

OTTAWA

.1. O. PATENAUDE. 1.8.0,

PRINTER TO nm KING'S MOST EXCICLLENT MAJESTY 1939

MINUTES OF PROCEEDINGS

'1'11\' Slnnt\illg Cmmnit u-c 1111 Bnnkillt'; aiul ('Olllllll't'(·(, IIII'I :It \\ ,,\\tH'k a.in ..

till' Chail'lllHn,l\·lr. l\\lHII'I', pl'l·~idillg. .

JI ('1/1/)(1'8 fltrs(,lIt: l\ll'~~r~. Bakl'r, <. 'lark ! rOI'I .. -Su nburu ], C!t-:\\·{,l'.

Donohmnu. Dnnucllv. Duhuv, Font nine. l l ill, .Jafj\ll'".hill\'·:V', Kirk. Lnrruix t Bcaucc}, 1,:lIHll"'Y(l;I, I.(,dlll', :\1:\("\01\:11,\ (Brlll/I/urd (·ifyi.i'lld:,'t'l'. l\\:\~'hcw, 1\1001'(', Plnxtou, H(I:", (.0..;1. Paul«), Stl'\,l'n~, Taylor (Sulu/i/!UJ), Tur-kr-r, "ic'n,

\V oodswort h,

[lIllllo/l{(1I/('(: l\II', Graham Ford Tnwcrs, Go\,('rllor of th,· Bank Ill' C':lll:ldn,

After ('on,,\<I(,l'il1[,'; private hill«, tli(' COllllllitl\'(' j'(':'\lIl~('d ilK ('oll"iill'rntion of The Ht-port of the Bank of Canada.

In n nswcr to questions asked on April 28 hv Mr. ])(l!l1H'lly,l'.\r. To\\'('l's rear] a statement. on various activili('" of th(' Bank of Cunndn. Ill: abo suhmil ted t hc following "tntcllll'lll:":

(ul EsLinwte of new cosh altl'illlllabJe to Iormut ion uf Brmk of Canada for year 1\)38 (Sec Appendix "A");

(b) St atcment showing division of ('ost \)('1\\'('('11 Iunrtione previously ]1CI'formed by tho Government, and new Iunct ions based on Bank's profit and loss for 1938 (SCl' Appendix "B") ;

(e) Estimate of effed on Dominion Govcrntucnt cust s nri~illg Irom [01'111[\tion of Bank of Canada (Sec Appendix "C").

Examinatioll 0". Mr. Towers was continued.

At 1.05 p.m., the Committee adjourned until 4 o'cluck.

AFTERNOON SITI'ING

Clark (York-Sunbnry), Cleaver, Hushion, J aques, Kinley, Lacroix, Mcfleer, Moore, Ross (8t. Pau.F8),

111 embers present: Messrs. Baker, Dcachman, Donnelly, Dubuc, Fontaine, (Bcouce), Macdonald (Bran tjonl City), Stevens, Taylor (Nanai1no), Vien.

7'1'11'. Towers filed correspondence exchanged between himself and IVIr. C. 8.

Walters, Controller of Finance for the Province of Ontario, regarding the purchase of Treasury Bills (Sec Appendix "D").

Examination of Mr. Towers was continued until 6.05 p.m. when the Committee adjourned until to-morrow, Saturday, at 11 o'clock a.m.

H. ARSENAULT,

Clerk of the Committee.

i8261-1;

MINUTES OF EVIDENCE

FHlIlAY, :\Iny s, IB:m.

TIll' ::4tHndill~ Cnnunit tv« (Ill Banking and ('OlllllH'l'('{' mr-t at 11 u'rlock n.m.

The C'hail'lll:lll,:\lt'. w. II. :\\OOl'P. presided.

In 111/(11(/(1/1('(: \11'. (;I'Hli:tlll Ford T(J\\"('I'~, (;m'('I'lIOl' 01 th(' Bunk of

Canada.

'I'h« (~IIAIlL\[A~: (lPllt lomcn, Ihe gO\'('l'll()1' of t Ill' bank hns :<IJl1lC' lln,-\\'('I'i' to quest ions asked by \I 1'. Donm-llv.

:'11', Towrus: M 1', Chuinunn :llld gl'llt h'IlIl'I1, \\,1]('11 :\ II', Donncl Iy put curtain questions last Friday hl' pnintr-d out Ihnl all pnrti('~ ill tho house had hccn in Iavour of a cont rul bnnk , and T hnvo l',( douht Ill' would ngre(' thnt at the time' of Iormatinn of t he bank 0)('1'(' ,,'HS a \\'idl's[Jl'cad nnt ional interest in the ]H'W institution. I think w o r-ould ~a~' that 11]('1'(' was public i,:te!'!'st of thl' hosl kind. Dr, Douuellv wunt 011 to sav that HS a puhli« man he wn~ contiuun llv being asked t hrouahnnl t lu- country whnt till' central bank did and how it justified its «xisl cuco, r.nd tlull \if' WHS at ~('a so Inr a~ an 11l1":\\'l'I' to those questions was «oncr-mcd.

[ know 1'1'0111 nxnoricnc« that I h('I'(' i~ a great deal in whnt he suirl ; in fad, I know the absolute corrct-titudc of ",;l11t he suid. and we fullv realize t lu- dosirnbility of public undurstnnding of t he bank's PHIT)OS('~ and (undi()II~, )[O\\'(,\'{'1', the commit too will understand, 1 think, !lInt it is hv no tnonus easy to get the dl'~il'('d results. For ('XHlllph" r do not think it w;1\I1d he right 1\;1' us to embark on all ndvcrt isiru; crunpnign. A great dual of speech-making; would take too much time Irom other work, ',lI1e1 in unv event, that kind of thing i" N\~ily overdone, What We' 11:1\''-' done hll~ IWC'll limited to some explanatory speeches in vnrious parts of tho country, some rarlio addresses, and the publicati.m of information in our annual reports, Fir"t of all t1)('8(' report" \\'('1'(' ndrlrcsscd to the sluux-hnlders: and last year for the first time th« report \"it,: nrldrosscd to the minister of finnnce. lVIay I say that in relation to the subject I have been discussing, 1 think the meetings of this commil.ter-, and the record of thps(' meetings are of great importance. The attitude of members of parliament toward" the \'('!l(ral bank-perhaps 1 might say the atmosphere in which t hc bank's affair" arc rliscussr-d-c-is likclv to be one of tho major factors detr'rll1illing it" "tanding and prestige in tile country. 1 think the bank need have no hesitation in asking for the wholo-heartod support of public men. Disagreements in ],egard to its pnlicy may arise; but I hope that such disagr(,C'Illl'nts will never take a form whirl, will damage this public. institution which parliament has crente.l to serve tl.e national interest. r believe that a good central bank is an asset to any country. But there is certainly IlO room for doubt that a poorly operated ('('niml bank, or one whic]: is constantly the er-ntrc of strife, is H public liability of the WOJ's! kind.

The primary function of a central bank is the control of commercial banks' r-ash reserves, and the most important change introduced by the establishment of the Bank of Canada was the transfer of control over those cash reserves wl.ich arc the mnjor f'act or in determining banking policy-a poin; which I think I need not labour after the discussions whicli have taken place ill this

committee. '

:'r"q' t , :\l:,n,f; I L 1\1;);\ till' tln!\' un wllil'll \H~ Plll'lll·tl OHI' doors for II ";1",-,, I i" .j. 'In: ni, III tlt>"I'l'l!Ilil'lIt, t hruuah the Lk\,:I1'1 uu-nl \If Fiua nee, was ;i'r 1 :" l~'H" pi 1(';~;d-ll'n\"1' dnlllilllllll tl()it,~ wlIieh coustitutcd p;d':,"n "I ti", ":I,l! 1'\"('1'\'(', .,1' lilt' IH\nkitll~ svstr-ui, and III additioll n-,!li tt'nH-'lit..; 01 thl' puidit· (tlr f'lHTt'lIl'y: nr' :31. nud ~\2 dpHotllina-

• ,n :lH' tn:i H~"'~l l!I' t'xtt-llt. I!i:;~':- dt;\\innln~l1ioll";. 'rla\ (~hal·lt·l'td banks

,j ,,' 'IW' \, ~:d \('IHkr ('iI,li 1"'''1'1'\'\', ill til\' f,Q'111 ,'l \,"lIld, iH11 \\'11('11 Cunadn

;i" 1';: ~L'.· J,,:,,,dd ·~:upbiril ::nd \t:t' i;~l\"(, hCt'n lilY tlil' t',ni((:::t:ll1dard ~qllH) t\\'(lnt~~,':\!_ ':;l: In.: :.Ii!' 1:1,1 ')\i:'l'!1]' III' :: \'\'I:111l'Y, ·dll lumk s had IlO ]Irndi(:al

.:tt,', v.n-v ne: Ii"" ,1Z" ;'f Itn-it' ~"i<l 1:,,\d:I'q!~, '-:ll'iatiun'; in IL(' amount

~_:~- ;':;< rt-",,!\·c . -". l!H'l"\'!i!l'('. chit'lh' d!'iH'lltif·d 1,11 ('ll:lll~i':_~ in tIlt' nu.ount ot

d\'Hi~! LI'~ .'-... in [ :a'11' pd~~C':--sion.' ,

r I ),'n:i:l:ll11 ~i"I"; _\('1 !,nl\'i.i,',j ill I' n I'l'!'lain fldu.-inrv i,~tH i.e.. 1l1'\.:W!;x l;~' 'l'uil', ;1 lillliH'.j j"l(i "ll \ h,' b:l~i~ PI' :1 st:llul jH·l't'l'HtagC of _~!~~d !.;:_!'k~~;;:: ~!nd funhtT ~~"IlC~ ~!·,'ut'(-II h~' ~~Idd. dui!al' fell' .lollnr. "F01' n

:n:ilT t'l y\'a::> pr:»: \1.1H);{·l tIn ))pl;!ln;i,ll lllllP i . .,;:~u(' wus ('{}ll:-:lSU:\nth~ at j'1' \>t-~: i- iil\' In:i:\ilnllln hlllil l~rij\·!dt'·d nn'-\."· 11\1,' l rominiun ~Ot('S 'Act. l ' t'" "", •• ";,,','Inli'( :\11('1"', till' [CI'\'I'1TIlII('II! 1::\;\ pral'! i(,:I!ly no power to 'Vary

l\;', j,f d;qtl~nilln LIlli.; i ..... 11 i ';0: \\1' i~~ (\\\'11 vol.t inn. {ix('('nl by a:-;kin'v:

i', ":,::,':: i.' \L:ll:~' Ill(' b~i,i:I::lllL In (\(!i,'I' \\'{lrd~. it had l\rnf'ti('nlh- 11;; p; \" IT ! I ,';:;\\- i l«: j':1",1I l'I.''';f'r\'r''' I.H' 1 Li' ,'h:lrtC'l'('d h:lnk:, or to prevent an

" <r:dd, t'til~lr:l;"~lqt 1;1 lhn~i' l'('~\'r\'j,'''; if tli\" puhlie\:: hnlding:--: 01 110t(15 ;:-' :-,;; "':t'--Il.

,\,,' W')" :];!'\~ Iii''] up In Olh' fir Ill. 1;1".;1 rurid monct nrv ~\-,;l('l!F of i]1('

\\"ilr:'L (,q' (;ni' f:'IC"rll!" t!l\' T"jn:'inf'l' .-\('1. T'n.h-r tilt' 111'(l\'1~lnn~ (If this

\l'l :Li ' i·{nl~.! htll,],'-'\\" di'!ninlnn r:(llt'~ 1r\l111 the ~{I\"t'l'nnh'nl an.] illf'l'C'!l~l\

:""\1' ";1':' ,'. ,,'\'\"'0, I ),\1Jlini"ll 11,,11'" i-,:!,'c! 1[11.]1'1' 1iif' 11,\,111" (If 111(' Finance ~\t'.r \\ ,,;'",; 1l\J( i t'qll~n d in ij~l\'r' :In:" :"'l,(',·'l!ic" gldd rf;~('r\-(' bneking.

lr.uu iJ; point of view or t lu- tl)lI1!try n . -c ~1 \\'h.-)It: t lu-rr- \\'I'1'V flinT major ";i' \;i: :,'c',- ... ·n :-, lli'...~- 11lHili !L! F"ll~l!~i-i' .\1'1 til d!tp:trt lji(' nf'(·C';:'"<\!'~' nt'\lhl1it~~

\ I ~ Fin:tll('(' .\i't hnrrll\yinu::-,: \\,('1" rl! v. l' 11:it'l:dl-11 id lit, (;i :l IH'l'lll:lll('lIt

"1' ,,'\'.11'( ll1i-P''l'11l:lllI'lIt \'!t;\]'ill'kr: :11l.! ',: :t '"~ III I':tl iIlII'I'O\'I'IIIl'lll ill ll\l~il1l'~~ i':lll..,i,d :t dl'll1~dll! i'or mor« "n;:,;·I!.--.:t dl'111:1nd \\Chi{·h lni~lIt p(,l'~i~t fill' HlJIH\ tune '". ('\"l1,l". ,.r :1'pt!'1Ii:11I1111 ,'11:11':11'\1']' Iiii' rill:llIl'I' :\('1 wn- 1il11 Illl' ]11'1'1)('1' ~lltl1'('(' ,'1 "ll:'\H~' I Ill1d :111 '\;1111]1'" (II' ,1,11'11 :1 ,j"IIi:l1ld :'1 t lu- l'I'I'Il!'d (If till' la-t f('w .';'':11'-, I>','\\'"n F!J,nl:l!'~', I!n.-), ::1111 Ik\,('llilwl' 1\';';:-\, til!' lol:d art i v« 110tl' ('il','uia:i"n in (':111:,,1:; iIWl't':IH'<! ;-::t):J !,llilli(!I\', l i ti r t ' '!I:tj!ll' P'Il'linn (Ii' 111:11 ,j1'Il1:tlld h~td !uHi 1n In' llJ('t 11~' illl' U~T III' d~lJlllnilin llut,·~·:~...: 11 \\'puld h~t\'l' lI11d('1' t lic ,,1,( 'y""'lli 1\'1' \\'''1 Ii .I 11:1\'(·11::<1:, l umk i ni; "illlC1', '" ,,( :111 1,'\l\'('IIII'jy dl,lInli(l1wl'v

I " \' ' "I I ' '

","Il':\t'I, r. ,P', :"·,:rI::I,'I\'(,\" 1::.\,,' \"\1)1([ I\i:ll ':11, ,- "''1'(' :tilll"': );'1'111:11\1'1111,\'

ilHI!·,li;'L-'il i .• til!' d!lllli!L(lll ',::li\-vl'l1llil'Ht. \1,Y g'ql''';''; 1~ th:l1 t lu- :ll.,tuul Ihl:-:ilil.lt1

,,-.,iui!! h:t\'i' In.T!! ,!i{·\\·lH·l ... • iH't\\'('i'l! lh.-:-:~· t w.. cxt rt mc - l lu: I i;a\'l' no

:. ':;1 '.,! ,f) '-;l:~,' !i :11 lid' PI\"'; ilj \"'!:Iil,[ l,:t\'i ~H!'ll ~1!1 i.'\tl'l'llIi·!~· uu-nt.is-

1...,1 'r;,! o..,'('il!\;l :-'Tj-:d 1\ ,,-:\~' tlii-: il "~! ";'i,"lli!!l l!I'.-<rald" Iii ("1l('11111':t03'

i."\ll" ,,~ IL'lt \\;i 1111 \\; \ ;Ii)' ;h!, ~~~\i\>l'l'llllH l:~ ii,! i L! i l« ]!I\11U1i\'i'. It i...-:

ir;:' "ill t\J'f'pl~(lL If,) IiI 1;\l, !'i1!il1,1 Ii \11' Bt·l111;ci\' . ..:. ;ll'~:lill ill :\p\'{'1111li'1'

i,l J~;'L: 1dll rli'l";\I:tr!td iii! ll:qd~ 11l !HIJTii\\ :<-L~) ilil!!lt!ll< ulJd,-r d'i! FiuHIH'('

\~'i \, ';\ 'l'1 «:> :i\'!(J\',\' \\':i,'" t' a~','\)\i !dl'~li;n~~ 1)1.'" }1I1!'lll):--.t' \1,;\'..' !}fli'll In hlln

r~\}l f! \-t·~·'· ! '; ~,u<' :J i ;!1 'II! ,1'li ,:1 i III i·d':f> 11;:11'1)

'L ff' j;!!!t \11 id, d jiL~' ).- Iii ;) i'!J!il";! j';iP}{ 1 h, 11,:':1!} ,'irl .! ("IILtd;\

IhL! Q'ijil:;i1L!' ',n!~

\\'1.1'1' Ll~; r II .~~ l!T< i~l !

!'!ilild l:·d··,i.' !!I~ nnl~i~Ui\'('

-~\ 11111 \\~Iijl'h \\'-"1"_ ned

•

to hn'\'p lH)p'n~Ol !J1I'11\ f'~:\'r('jt.nd ( lion (\1' 1';\1'1'1 v- n ~1!111 101:11 01' III l't';'IHl)1!.'j hll~ for npl\liud if lJ('l'I'~ .. vision of t his d\ nnsw.-r to til:)! (

J ;'11 mrun ri.7,1 ing ihnt under II po\ie,'.' or thif (', th« ('\i~l mn pl'c~L'nt "Y':(('l1I 1 flt'xihilit v.

til ;1H'ak i n~ were pr('viol1:,ly 111'1\\- rukvn 0\'(') Fil;n1ll't', but ~i! of ('an:lf:n ill 1 t II IIH' 1l1al1agf'l been porf'orrncd the 51 afT of \\11

vcur [l~U.

. '\';irninp; \LI

bank clltt''' now bl'mldl~' ;.:peak i1 ck',l'tCl't,t! ballk .111~t llPt'll dj~{'l chartvrcd bank; Iho cI'llll'nl b:lll' issues. This w: hnndl.-s (lIp gel' gO\'l'rnll1Cllt ';< f I (;~j:ti>li~)lI11(,1l1 1 i III I JUrt a nee,

The third tI(J('", nuw tlwl ::-:ly ! lIP gov<"l'n!

In u nswrr:

Ihnl thr- cr-nt r: nnl po~~ihh' 'II I ~1l:tll n;' r, 1\,

Till' luu.k l::(1\','1'l1lnf'lII. ,

j'(" \" '(' I I f) j,.,,: 1>:II'Hllt" 111(' III ~i\'('n i.o th!.' 12:( vv i tl' "1'('\ I ri! v !::'1'I1l\ .;n)' L pl'f'ljIL~ ll!f' ill1' 1 ,";]!l! ~ i., ~" t II

\YLilc J !!

11 <II \\'\,~J -1\-' 11 :'l'HI i ;!~\\c LlJll \<phlll'l(" ul" ('1"('1 !Hd ill n1'1l1 I'::

rs lor " WflS

tluted rd.i uon '·UlIIWballks aumln

yonr n~o.

Turning t u till' ":('('lI1HI part of tht· qll('~tion, il::lt is. what work :\t,' ,'(,lllr:il

bank dol':' now t hut t hc f'11:It't('J'(,d ]1:U!l.;, did 11l1'1l11'l'h', I ~11(\lIld Il"i:;( (ill I 1 tint. bl'(l:"ll~' ~pl'aking, Ihe c.-ntrnl hank was 110t ~('\ IIp'tii dll :tlly '\\'0),]( i luu the ehnrt!'l'I'd banks did Innncrly. It \\'a,.: cTcn!t,r! 1'01' I III' l'l11'P'I~('" \\·hi('h I l.nvo jlL-t h('('JJ di,t'l1""ilw:, l t i~ t rur- ILnt till' 11('\\' l('~~bJ:dion providr-d t.ha: the churtr-rcrl hunks' note i,,:':H(' righh shoulrl grndl1nll~' II(' j'(,du('cd, \Yhil'll llli':llli thnl the ("'!llral bank's HOllo" would gl'adunlly t nkv llu- plat'" of lilt' ch:trlt'j'(,d blllJ!,j issuc-. This wus It qll\'~t ion or \!1,li(':', It i" abo II'I\(' I h:t\ I hI' ('('nil ,II hnnk lIO\\' handles t hr: g(I\"I'l'Illlll'J\t'!" bu."im''';; ill foreign \,xc!l:lI1i!(', :lilt! l](lld- pnt'i (If the gOVl'J'lllllCnt';: deposit h.ilnnccs. Bllt IIH'~(, two chnngt'': WI'I'I' im:idl'iJl:d to the e:,tnhli,,,llIlll'llt of it er-nt ral bank, and lilT 1101 ill ill!'Ill'('I\'I'~ 1Jl:tlICh IIi' mnjor

import nncc.

Thu I Ii i I'd pn ,01 of t l.c questioll was all cuqu ilY :l::' to whu t t h« "Ulll';d bank

'1,1('" lIU\\' t h.u. \HI~ not dllIH' Ionnvrlv hv lli(' tr(':i~lll'\' huar-l ,-p,'rl1:1o" 1 might

~:~\' tIl" lW\TI'IlIJIl'lIl ,(II' Ihl' chal'tt'I'(';1 h:'tnki', '

, III :lll,\\'('I'illl.'. tile fir~1 pal't Ilr \)1', 1)(IJ)I1(,lly\ (j111>liul1, I lin.vc ]Joilll"d out 11:<11 Ihl' ('('Illral l.unk i l'("Wl!l~i!tI,' fur lllllnc\nl'," poli('~' ill :1 \yay ",hit'h wns not pn.;,ihlt, uurhr l lu- (lId ~y"\('lJl. Thi~ 1" t lu- c!i:\II:.:e of g1'('n\l,.:1 ill\I\('1'I:lnl:.', [ c!Jall I,\!' 1', n~ hridly :1:' I can, 10 ot lu.r Ill'\\' fl'atUI'l'~,

'I'l«. hank :J('t~ 11': (Ii,' fin:llll'ial .ulvi-ur Hnd li"enl a!C:nll of lh,' dnm!dioll :~m"'lTIlll!'II!. :\lJWll!~~t ntlJl'I' l h iuu . it III1H (pn,li-l' n.lvire til lli(' gO\'I'I'IlII1l'1l1 ill I'I'-I'd'i t I) >-\1(" (If rioll1inillll L(!I\'[ 1'1111111\1 dirt'l't or l',unl'!llli ('I'd l'):lll~,nlld it, li~II'lrll('~ 11,,' lllt'('\Jr,111('al npt'l'nlln!l" ClilllIl'['I,',j with -uch i~'"'!jI'". If thl' arl vicc (d\','1l If> l l«: UiI\,! J"I1li II'IJ I j" In 111' [tiln" ad\'il .... tl " l.n nk Illliei han· ci(j~p ['oldar'! witl' sU'lll'il\' 1I1!J1'1\1'1;' I!rdb iii ('!lllnd:l :tll,l :I\;I":"!' .u«] IIHUd a::'n, I need I:!'nll~' -r.v, 'lul\'(' 1)("'111(' UII it~ .;;I:dl \\1:0 arr' CHI'flhl,' of lIpji!:ti.-ill:r awl interpJ'ctjliL~ il,,. ini'lll'lil:ltj"!l 11.1\' nlua iu. \\", 1'1\(,1':11" :1 -""lIri!i('~ d('pa"lllwili \I'hleh

L,;;" in f·,J,>l ma nu ain tUllfil! '\\lili Hl;ll'kcl-' 11l ('~!li:HI~1 t,\'pl'~e fll1lnHc' of tltl' d av.

\\·!till' ( f!;;' nil I ill' "HiliI'd of nur 1',,1:di''1I- Il'ilil I!,(, .lmuinion. I ,\:nllid ntld j!:nf \\'!, P:!'IU n D'L~itJun tOo In:lkl' lUitn~ 1,,-1 i.hf' :;fl\::'~ ilili"';-d rtorn !:1l1l1 io rnue, nil! i 11\(' <1"11[' ';;(1' TI", prim II\" (I!l)l,;jun I'! :IIi\, ("'liI!':dh:lllk j! In ""1111'01 11)(' \'0 tll,j(- qf rn,dii lind tn '«lUll' ,"<\i I'nl ~q' {;\l1Tt;rji'~: \ ill fhe ('i.Hlnt r_'/ n,nd lltJ'onld on 1.1('. nnd i.:: no . rp~:-I_rd(cd "l11ild~' iL"-' ;\ _ ... I-II1~'('t' 'of ~Ilpply (d' tl;f' rll'H_L~' rcq1l1rccl

lUNJ(lNG ASI) ('C)JIMI·.'J(C'H

•

to h:l\'(' hccn some quC'~ti(ln :'\s 10 till' tI,'g\'\>e 01 "'IlP"l'yjsioll ",hiI'll Ill(' gj)\,\,l'II~ nu-nt. l'x!'l'('i;';(ld n\,PI' 10:1n" under the Finnncc AI'!. Lnm not rnisiru; unv q\\CSLion of sntd~' t)f sueh loans. hul. I haw ill mind lhl' ~"'llt'rnl dl'cc( wliieh ill!' sum \(I(nl or \;ol'l'owing;.; wuulrl pl'I.lIlul'l' U1\ ill" hankuu; S\·,.:j!'l)\. \Vbo wns responsible for ~('dl\p; thut ('xP:1Ii~iOIl did Hoi 12:(1 t,,() far:' tlU\! !'hn'lc; \\','1'1' nppliN( if lW(:(,S;;HI'Y; and whnt vvidl'Ill'I' 1,< Ihe1'(' tillti :!lJ~'llll(, ,xl'l'l'i,;pd ~\1p''I"vision of this el1ni'nr'lel' l'f'lntl·d 10 P;PIWl'fd banking policv? I do no! know the :11\;';\\"1' t othut quest ion, nnd 1 rlouhl. if nnV0I1I' d(w~,

l ,:Ullllllnl"izl; lilY 11Il~\\'('r i () t 11(' lil'sl pni'! of Dr. Dounclly's qlll'~1 ion by say" ing lhilt under till' old svstom JlD 011l' nut horit v W:l> j'(""p(ln~ihl{' 1'111' dJl' l\\lllWIl\I'\' polie;, (If tilL: (,(Jlllltl'~';' nnd if :\n~'()l\(' h:ltl 1;("'1\ i'tCI";IJ,,\hlc tllf' inflexihility ';1 tll(' ('>;i"t;n~; lll:H'bilwI'Y wuuh] haw (il'd till' il:tnd" "I' Ih:d uut luu-it v. 'The present "ysll'1ll pln('!'i' 1'1'''Jl(\Il"ibility (Ill t lu- ('I'ni:':ll h.mk ;tlill 111'(1\",1\,'" illl' f':1'l·nt

flexibili: v,

In ;pcakinl,': Ill' lho duti(,3 \\'II\('h :11'(' jll'l'flll'lllU\ II\' tilL' 1'['n!l':tl hUIl\; \\'\I\('h

\\'1'1'1' proviouslv Iwrfnl'll1cc\ by til(' ~(I\'('l'nlllt'nL I ,,!J·.lItld :Id.! Ihat WC' h:l\'!: not {inl~' i akcn 0\'1'1' tht· upr-rnt iorr- of the ('I\ITI'1\('~' "'"\'ijlln (If iii" 1)"'P:Il'tllll'lIl of' Finuuuc. bUI "inel' ::\1:11'1'11 :~1"t. H);)S, nr\' :11'1\11['; :1' n~:\'lll Iur till' ~1I\'\'rtln1l'IJI of (':tIl!H;a ill the ]lay mcu l tlf intcrr-st nml prilH'ip:d :Ind gl'Ill.'J':J\I.\·' ill 1'('''1)('('1 to tIll' lIIH Il:I g('UH' 11 I Ill' thl' pulilu: II<'I)\. of Cnn.uln. This latin fll!H'lillli 11:11\ lx-ou nerf'ormcd ltv tht- I()all~ and illh'I'(,~t hl':llil'h "I' till' I l'jl:lrllill'lll <ii'Fin:Il\(T, the starr or which joined till' ~('l'\'i('t' of t IH' Balik of ('!lllacla n IiI \ ',. ovr-r :1

~~t'Ht \- ... tl'ti(;al mou nt lint ot

-i.e .. :l\!;l' of For a ulv at " '"\et. ) ynt'V

:I"kil1~ !1y 1\~;

'nt an

notes

(If i ~\(' Df -;hi:-:

nuuu-c

111~tJ (it' ~j!}lEty

nan!'Ht ll:-:UH':~~ it' 1 lInt·

-ourcc I:-:t fc\v ~t f' t'i ril'l! Hi lli t 1,,1' i he ~ .onarv tIll. -n t 1 ~\' 'licit iOI! ! \'" no

\'{':tIitH'1'

; Urn nee tn lilHI

367

368

STA,\' J)/ sa COM.u J'J'1'J~'B

!,~' (\ t!U\'('l'IlIIWl!l. Tl'lIlportll'Y r('quil'l')lH'1l1~ oi it govcrmncnt, however, can be ~lIpplh'd. ]ll'(l\'iril'd lil(' amount» involved are nut so large thut ccntrul bank tll'llun would l'allH~ di:'tuI'IHIlHT:' in markers.

\\llik 1 urn on till' -uhject 01' n-lat inns wilh gOYl'l'lllll('IH I f('cl I should nunt iuu (lUI' [lll"ilioll in l't'''lwt't to provinces. Our ,\ct says that:-

'l'h« hank shall a!'t I\~ fi~('al ag;l'llt of the government of Canada wit liuut ('ilnqJ:I', and, ,-llbjl'l't to lilt' provisions of this A('\, by agreement Illay ulso 11('1 H~' bankl'l' \II' fiscn l agl'lll of t hc gO\'I')'ll1l1(,llt of any province.

It Ii:!, l u-rn , alld is. OUl' vip\\, that :l n-hu ionship wit h n province should be ('!lIen'.! into on t lu: lIndl'l':,tandilig t luu it would 1)(' of a ront inuing churactcr ,ut'll :t~ wuuld nonually hl' I)('("l\('d fur t lu- bn nk to tll'quil'\' that full knowledge IIi' :\-I'I'\'\'ill('\..''' p,,~iti()1l which wou ld ('ll:lb)(' it to give tho province the best !"('I'\'il'l' \11 which it i.; t'apnbl!' ill till' matter (If vxpcrt n(iYit,t' nnd frank opinions. TIl(, 1'('!'lIl:llll'll('Y (If tlt(' al'l'Hl1gl'lI11'nl, i-, (If course, a matte]' of intention at the t inu- It b illili:lIl,d, aml 1 dll 110\ ~llgg('~t thut. (here slrould Ill' a. binding contract Irruu \\'biel! ru-it.lu-r ~idl' r-ould withdraw. :\01' wnuld a province be precluded Irotu 1':\lT~'ilig .ucouuts wit ': UJ' borrowing from its IH'('::'l'nt bankers.

If a rclut iouship of such a cit a 1':1 et er were ostublishcd, t he bank could \If'riOI'Ill for n pI ovincial govormuvnt much t he ~allll' kind (If services HS it undertab,,; Inr tlie duminion gll\'t'l'lllllC'llt, 1 ~llOlIld add that 1I0 province has ever I'l'\]\1(,;;t('d t lu- Bauk of Canada t n al'! for it ill this way,

'I'lu: l'xiH('Ii('(' (if H ccut ru l bank---tu runtinue with cortain new Icaturcs-> ha,"' !lIndl' it pll~~ihlc- t o d('\'C'1op n uca-urv bill market in Canada, One of the adnllllHf!('~ of this dcvr-lojuncnt lin" hl'C';\ 1 hat the dominion government has \)('('11 abl\' to 1>01'1'0\\' 011 t.n-asurv hill~ at \'PIT low rates, hut I dn not I'cgal'd t his m lvn nt n uc :I, the' must importnnt uno. 'l\!OI'l' import ant is the fact'tha.t thl' ('h:nH'l'l'd hanks I!an' ill tr('a"lIl'~' hill~ a fOl'lll of liquid socond-Iine cash 1'(':-('1'\'('" CndC'1' the' old ,;",,1('111 the hank" had to t urn t o the ;\('\\' York call lou n market t n find flH'ilitl(,'; Iur hnldin~ II l('~('n'r' of this typo. :-:lI('h facilities n n: 1\(\\\' pr()\'idl,d at luuur-.

\\'l' I'PI'I':l((' n f'orr-ign l'xelwllgp ill'partllH'llt \\'hieh handle: the dominion gOI'('l'llllll'nt's ('xclilingl' business ---11 large business as you may imngine-c-and which i" nhlt- to k(,('p us in ('10:'1' cont act wit h development in exchange markets.

Uu:: I'c"(,:ll'ch d('pal'tllll'llt i, coust itutcd t n supplv \1" -wirh the best avn ilablc i nf'orma t.ion un mu t t ors l'l'.ln(('d (n government finaucc. private finance. domestic and extr-mn l trade, and mnuv uther lhim~" which 1 need not rccit o here,

The fact Iha(, (11('1'(' i~ -a ('('ntral hank in Canada makes it p()~~ib1(' to <[chir'\'(' co-npcrn t iun wu.h til!' ('I'11tI'1I1 banks in 01111'1' countries. There is much whir-h r-an lx: dOlll' in t lit' way of intcrehaugr: of information, Business conrlilinn:, in a I'()lllltl'~'\ main mnrk ct s h:l\'(':111 import ant bearing Oil riollH'"tie trade, .\ cr-nt ru l hank which cnutr-nt cd itself wil l: a kncm,;"l(~(' of horne affairs and nuncd :I hlind ('~'l' to d('VP]Opllll'll(S r-lsowherc. wuukl not. 1)(' fulfH1ing its duty tn it:, OWIl I)('ople, 'ih« rrnt rn l hanks of nt hcr countries ennst itute an excellent :,;nll'l'(' (If inform.rt ion. Th(;~' cn n (If!l'n provide fnc(;; rather than surmises. ('o-Ilp('ratiwl al(ln~ (11(':,(, lin " is lhc]'l'fol'(' oxt rcmelv helpful, and can be d('\'l,j()p('dll~' :11'l'Hngl'lIl1'n! l)('t\\'('('11 ccnt ra l hank~, Obvionslv, rn-npernt.ion on n nv 1Il:lh,1' of hiuh pn1iC'~' must 1)(' dit'tntl'd bv tlu- views of the g()\'('I'J1111ell(~ of Illl' 1'()II'.lll'i('~ f'Onf'l'rllt'd,

The la~t point which I wnuld ilk!' tn mr-ntiun (,OlH'('l'Il;< crntral banking :H'ti\'iti('~ of n 1-(1'111'I'al character. In "j)('aking of (hj,,~\'('ry hl'idly-T will not try \n <\(,fill(' ('x:wtly (ll(' things in which a central bank might interest itself. One mi.tht :,a~' r-ithor that nothing i~ till' bank's business, 01' that everything is iu I)\l"il,"~" Tht- bunk musl t rv to maintain a reasonable balance in that l'f'~PP(,t. ;1 ;.:llOlild not ontcrtnin till' thought IhaL it shoulr] hnve a finger in ('\'('l'~' pi", L'II it ('prlnillly must fll'gkd no opportuniv 10 make suggestions or [;in a 1,'1:<1 ,;11('11 its kll()wh,dge of a situat ion gi\'('O' it rvason to believe that

fSt1'.,.UI'Hh;\TIl Fill'il TOWLl'i',-)

SlI(,h 1I til be v and lit d('('pl~' mohili:

~)'PS~ it that \l hl'ing I trv to I ruent , intclli; thing t of t hi, ('ulll£' fin.' eq

FI (ion HI (11('1'(' 1 thi~ rt wil h t such ~I it \\' n,

F we fi( funct i: 1)('('11 II ment. 1111\,(' j we to{ I hO"l' The (' iously nssist: t iuns : f actur out C might put tir at t li: notes qll('~ti govcr: ment

1 That last \ Now, dcpnr P1'O\'11 only that I mont. made OIlI)' lion, a cos'

flANKING AXn COMJllWCl\'

369

:\H be bank

such action would be in the public interest. Its <"l()"t'~t connection is lil.,('I~' to \)(' with thl' financial notivities of its mnrkct-v-wit l: tlll' uporut ion of tl)(' s\(wk and bond markets liS \\'1'11 I\S with tll(' business of tht' conunorrinl h:1nl,:" It i~ (\(>('ply in\('\'l's\('d in t hc muchlncry by whir-h th(' ~a\'in\.':~ of t lu: Jll'ul'k !tIT mnbilixod nud i 1\ \'I'S [(0\1 , Moreover. it ('1ll11l0\ fail to 1)(, l'O\1I'I'l'lll'd wit It Ill!' prof,tl'(':-;S lind dl'H,1o)lllwnt of indu-u'v ill f,t('lH'rnl. I I' I hI' hank ha~ \'l'n~(ln t o h\'li.,\'(' that unsound dcvolopment« are tuking pint'!', 01' \ln~ntiFJ:~"'ory Il\'n('(i('p~ nrc hoing fulh)\wd in allY impurtunt .lcpnrtmcut of tIll' ('all:uli:lll ('('t)I1(!Il1~', it 1l111~t h'y l u find nn nppnrl uni l v to IlIH!;,l' ~llg:gl':.:\i(]I1S \\'hi('h wi]] brim' abollt nil illlJl\'o\'('mont. I do not :.:llggp,.:( for II 11I()llIPl1t t hut t h« er-nt rnl hank Iws ~11!lf'rhlllllilll intt-lligeneo, but n ('('ntl'al bank i;.; ill a lwtt!'1' p(l~itiun tu :H'('(lllll,li~11 ~(\1lH'thing than any individual cnn bv, Nnturallv, f;\I('('Csfd'1I1 proscrut ion of mtivit ios of this dlametel' rkp('IHI" on !'XI)(II'il'lH'(' und tll\' wisdom und pl'l'~ti}.';(' \\'1 Iil'l I como with it. Il l-consulcrcd action, or an nttl'lupt to ('(1\'('), too ",ide a Iiold. nre equally fatnl.

Further points rniscd hy questions b~' I )1', Donnelly 1'('I:I\('d to ('1Ft or oporntion nnd certuin other f('all1l'('"' of tho bank's ur-l ivit.ie», and ill pal'tie'ulal' I think thoro was a desire to gain "onll' idl'a us to what OIl(' might ('nIl the m-w f'nst~ or this nlntivclv nt-w institution, I hnvc hvl'!' a st n t cmcnt whi(,1t in duo (,DIlI'''I', with t1\(' pr-rmission of tho ('oll1mitlpl', I will put on ih(' l'f'('ol'd, which cont ni ns such an ostimnt«, but J would like to add sonu: ('xplanat()r~' I'l'\l1al'k~ as to how it was made 11]),

First of all, we tonk the total amount of 0111' op(']'ntill~ ('hal'~(,~, From t luu we deducted the ('o~t", ilH'II1'1'('d in operuting dcpnrtments Whil'h ]l('l'fol'lll('d Iunct ions prr-viuusl y performed by Ihe gO\'{'l'1lll1l'llt. "'e know t luu if t lu-rt- had been no Bank (If Canada, t"PH.' Iunet.ions would "till he pcrfo1'llll'd by tIll.' gO\'('l'nmcnt. \VI' 1\1,(J\\' also that om eo~t" of operation arc no higher than they w!luld have 1)(,!'11 under the old l'l'ginlC', III these various ('n~l''', a~ a matter of fad, we tonk 0\'(')' the staff Irom the dl'pal'tlll('nb in which th!')' were located. :\011', t.hos« total chnrges f',1' the year 1938 \\'('1'(' $1.7;'>0,000, spe:lkillg in round figU1'(,~, The expenses attributable to Iunct ions taken over from t h« gO\'l'),Il\II('nt prvviously, perf 01'1 II od bv the currency division of the Dcpartmen: of Fi n11 W'(' and assistant )'('('('i\'(')':, gcnornl throughout Canada, 1 1111\'(' divided into two ,-('('tions: tho first amount, ~(j():3,OOO represents amounts paid out for I he I\lHllIIIacturc of bank notes and Ior their transport.ation by (,XJlI'('t'~ or 1'(J~t t hruugh(Jut Canada; the· .thcr costs of opnrutiou of that department \\,PI'{' $;~(j5,O()O, I might explain that that, dcparln.cnt, in addition to handling all till' work of putting out new notes during the l'O\lI'~1' of thl' year, of iuak ing thr-m nvn ilahlo at the tell agcl1cic>' throughout t he country, and of l'l'dl'l'lIling and dC'"tl'oying notes which become unfit Ior lls('----ill addition to that work th!' dl'partnH'lIt in question has tIll' (,\1,;(od~' of our gold st or-ks, it hn" the Pll:,t()(ly of t lu- dominion gOVl'1'11llll'llt bond )'('>,['1'\'C5 and socuritio» of other kind", and i~ also tll(, departmcnt which handles the wurk of dealing with subsidinrv coins.

The sccnnd cost 1 han' he]'!' is the mHl1agl'nW[)t (,f I he public dobt division.

That work which \\,11:-: pr(,I'iously being d01H' hy the gov('l'nllli'nt 11'r' took over last war. That it' $H)J ,(lOO, and the tot.a l of those two divisions 1~ $1,220,()OO, Now, from this I arrive at tIle fad thnt the expense din'ctl:> nt u-ibutnblo to 11(,\\' departmcn ts and thl' direct i,1g executive of the bank, ('Xl' huli ng t axes paid to provinces and municipalities is $439,000. Theil I take the profits which could only ha vc 1)['('11 obtained from operation of the' new (J1'g;anizHti()ll~lct 1lH' ~ay that those profits do not im.hnle any interest or .liscoun: on anv of tlu- investmcnt s of the bank nor do lhov include II1[el'(,,;( nn mlvnlwC's wlueh we may have mndr- to ('/wl'tt'l'f'd hnllk,,--th('~r W(,I'l' lH'gligihl(' in any rvcut. Th(,y inelutle only p\'nfit~ wh icl: (,()IIIt! not huve becn CHI'lIl'd under th(' old Iorm of organi"ilt ion. Such profit", for (ill' year 19:~8 \\'('1'(: $24:3,184,71), i tl\('r(>('o\'(' arrive at a cost of new Iunetinns of $HHj,(mO,84 for the year HI38, In 19:36 a I t he annual

[.Mr. U ra h a III Font 'I'owuis.]

mada cment vinco.

hi be rurt ('t' d(>(l~e , best nions, It the ntraot 'hIded

could mdor, ever

11I'C":of the It lias rcunrd t 'that , efl"h k {'nil -i Ii t ios

ninion --and irkets, tilable mestic

hie to

much con.Iitrade, 's and , rlutv ~C'llel{t -miscs. an be ion on 'I1t" of

inking T will itself. ling is il that

g('J' 11l -st ions I! that

370

Ilit,t'lilw uf ~lnm'hnldt'r,; I l!lade nu (,,,,timnll' nil a ~il\lilnl' hnsi-; III thaI \'(,HI' J fiU.'II'l''[ t hat till' l'\l~\ Ill' now ()~)('l':ltillll~ Jlt't wn - :dHlltl ;-;:2i:i,O()(): but [ ,'XI;l'C';H,d :l'I' \:,111(' at 111.,; i im« Ih:11 :1' \'I':\I'~ \1"111 on !ll' ('\'~I \lllult! Ill' I'Vd\l('l,d, It lIn:' b""ll I'vdllCnl in I\m.; 10 $ltHi~OOll odd, I r-x pt'\' \ it will II!' 1'\\1'111(')' l'l'dll('('r\ ill \!lim uurl ~uh~l·q\ll·nl Y(':\l'~,

(."Ialellllill (/l',l)I(/I'I~ liS .1 FJlllldi.r "A ")

I 1m,'" IWI'I' n t'('t'OIHl ~lt\II'II11'IlI, hili Iwi"I\'(' PI'(Jl'l'cdillg io thnt. may 1 \:Ik(, [\ru 1,'1' I],IT(' minuu» 01 till' l'IIIIlIUiitN,''' t imr: to mrntirn: I ho \'UlIiIlH' of \'\,\\:;ill of \"11' OIH'I':lIinIH, to \I'y to giu' ~\lll)(, idi-n at lcn-L of Iho ehul'nr!l\1' {It "Ill' l'llllLilH' Iunct ions, \l'lIi('11 unt nrullv hnv« a \)\'I\1'ill),; on 1)\1\' ('o~L of Op('I'n\it>l\, P,rliap", t hc III ot' I impori nul f,\:tllll'(\ is l his: under the nld rq.!;illll' and under 11:1' Dominiuu ?\()h'~ A('! t lu- :ll'Ii\'\' r-irrulatinn (If dominion Ilotc>:'lh:il i~ 1':n'111nti(l1l ill (ll(' lland" of tile' publi("'II'!1c; in In:n $:{O.ooo,oon, In HI;IS ul!\' :",! i vr- ('ll'l'ul:! I lull 1I':l~ $107 ,OUO.O()(), J 11 (I[ II('\' words, there is more IIt:ili ;\ I 1'1 'hll11L( pf (b\' lho;ul'(' of ~il'li\,·'('il'l·u\atinll, ?\O\\'. thaI nrt.ivr: r-irculntion ll: .. J:I'(' h:1- :1 \,e,'n' il11porlllnl h"tlring 011 t lu- volume of wurk. T,tlrg(' rlr-nominu .. li"n il"lt'" 'shieh'l'p"l ill Illl' Iwnd~ of (li(' bank" rr.quirn litt lo in l hc form of t r:l11,p"n:1I 'i'!ll: iluv ~l:l)' I ltl'l't' n l'lllg lime n:: t11('~' an' not being nctivcly i:-, .i . :h'1( l,lll' lilly do not I'I''1uir(' ill he rc,j('(,ll1l,d l'I'I'CpI{'ntly and nrw

II\l:C~ i~"!I"'l.

Tlu- ~1t'li\'(' ciroulnl ion is nci ivo frillll our point or yicl\' in «vcrv sense

Ill' II:e l\'r:Il, 'I'h« volume of 111:11 \\'ork :1": cOlllparl'd witl: ]0:,\4 i1:IS more (han 11'11.11'.1, .111,,1 :1" n n illdi(,:t1iOll T lli:I~' ":1~' that ll){' 11111 l1\>C I' of new notes printed ill I!);:~ \\;1:" :t lit t l« 11\'('1' .-t,~.OUO,()OO, That is t lic number of notes. rather thall dtdbl' n n iou n]'. The number of nld nnl cs rlC'fir(l\'(,d wns '17,DOO,nOO, The 1\t'\\' ~lIj,,'idiilr~' {'uin issued by 0\\1' various agent,.:' (0 till' chnrtcrcrl hnuks, :li::<Hln\"d til ~Lt8:LOOO, In terms of smnll ('(lin,": Ihnt rr-prostnl.s n \lretly "uj;~l:tlllj:;] amount., 'Tlu: smuol h nnrl lI\utilale,1 ('(lil1~ j'(,r\('elllC'd. including wi: ];dr;\\I;\! of tht' I:tl'gl' 1 ('C'1l1 bronze ('Oill, 111l10UIlI('d to 11.888.000 piec('"

The ,'h':ll'ill~ items whirl! \\'(' handled tot nlll'd n~~,()()(). to n \'n1\1(, of ~OIllC- 111in!! {!\'P!' :31.nOO.OoO,O()O, D\lI'ing 1\):18 iI,:mo,ooo coupons \\'(']'c paid, :i:~O.OOO 11;[('11'"j .. h,t'k" Oil .lominion L(()\,(,l'1l1l1('11[ houds wor« issur-rl. honds \" a value I,f :32;),',,()(]O,OOO, C'xdmin' of'tl'etls\lI'\' hills, \\'C'],(' rcdecnlcd 01' eonvcrtod , and hC'lnl"; Il'llll"!'Cl'I'(·d and cxchnugod to a' value of :tol05,OOO,Oon, During tho (,OUl'~C "f till'-l' 11':lIFn('tiol1~ ":(l II lI' ol0.00() 1('[«,1''': of inquiry or instruction wt-rc received .uul :111~I'.'I'I'('11. I 1I1ftY ,,:t~' in "Iwaking of the oporat ions of 0111' socurities '(eptlrtlllclll. thnl wo mnintniu ]'!'PITsl'lltali\'('" in bot h Mont rcn! nnd Toronto fill' !'(':I~(lllS whirh the commilto« will naturallv undcrslnnd. n ('(Jl1"tnnt. minute 1'\ minut« r-ornurl iou with Ot tnwn I;: in ('ff('('l, Om purrhnsos and sales of bond..: ill IIII' uuuk r-t. durirur 1 n:38 nmountcd to about ';:;20a.OOD.DOO, Our trans:lI'lillll~ in tl'l'a"ul'Y hills '\\'ilh tilt' market. in the same year wore about sizunon.ono. ,\~. l'('gal'd~ our ('xe\tam:C' departmcnt. I en]; onlv say there "t hn t rl«: turnover l'11lJS inl o a good man)' hundreds of million» of dollars en('h

\'(':\1',

, The number of OIl1' st:lff i~ 3;'i9. of which about 2ifi roprcscnt staff per-

f"l'lnimo: t h(, Iunr+ious ]I\'C'\'i()I1~I~' porf'orrned l.y l\Jel':o\'C'l'Illllr'nt, and some 8,J )'('1'l'I'-"l1i t lu- adcliiinn~ cnusr-rl In' (Ll' ol'l'::tni7.alinn (If tlio Bank of Canarla.

\' {,lIllll' lIn\\' in (he ~('('rllld "tn'll'll}('nt, 'which T ~li:t11 abo. with the' commil tel"" lH'lllli:,:'ioll, put on the rccorr]. This :::U\tl'lIll'llt hl'ill~" in the lig\ll'es "f our 11>1:1\ C'nrnil1!.';:", 1'011 will ]'('111<'111])('1' that ill (he earlie]' statement I rdl'1'l'!,d '\11\\' t o lh(\,,(' cal nill'!s which wore of an ni>"'olllte\Y IH'W vnrietv. and r p'ltl1:n:d(,'i :111 int('I'I''<t Oil ili\'(·"lnwnts or intcl'(,,.:t Illl nd~'an('es til ('h:~d(,I'f'[l hank-. Tho t ol nl of UI(J~(' two itcrus. ill(c>l'f'~t Oil i nvr st moul s anrl ndvnnces to "/;1;1'1('1'('.[ hnnL:,,-!II(' lnttvr :1I11011llt llCin~ 1l('u:\igiblC'-,in 19:~8 was $4,3:'6,446,64, 'I'll' "~:l'lll,,('" [lltriill1!:11J1,' to fl1netinn" tnkr-n 0\'('1' from thp gov(,1'1l11lC'nL in

~fl- (;lal1;\tIl I"~'rll TI)\\"t'!":-:-,1

:w{'(lrdnnn' wi $] ,22ll.7n8A7: los" ill tld" pll 0\'('1' I)f ~ih'('1 lll'kin;;l Bald, l1g,'!'{'IIH'IlI, J (II di! that .u \tl"~, 'I'll!' i (II (':11'11 i nu- I lint ! I h"I; d,'dl1ct III 1lH'1~' t~1 DIU I ion in n"~l'l; $2 ,iOn .87>1.41 ,

T lin \'e 1 i o n IJ 11('''( iou of $1 J fi,O(}O,OI e:O\'(']']lIllf'nt 1 \"(' had take: point niH ih:1 tion a~ (iii' fi ~i t 1I:l \ inn :t~ i han' hnppr-n :1 more 1':1\'(]\ 1 shou ltl ,~;," J'(:fl('d~ t lie :-, t.o a minor P: tend \ () ('xag;l

But rct t t(J t lu .uuniu That i~ i he bonds.

So\\,. I Tlll's(' a 1'(' n figu]'c~ I am actua I costs 1 add as \\,1 go v C' l'1l111l' n t.

BU

Q, .\nd IJ:1\'c lux-n 11 \\'i 1\ "('(' in govurmut nt ehnl't.!;t:"; wh: tlii~ 'gl'll,'" II 011 (hi", ll:tsi and ~o Iort] t.Jj('l'(' \\'a:, :1 dc· ('omp:ll'(" ()rgn nizcd.

I 1 hi Illi a f urtlu-r fI :\\('(;('(']' It:; it over 1111 t i

" I
,
",,\
l~l A
in
Il
'#
I
ni
'(PI'
'ra-
Ind
:,-.~.-
In
tore
ion
ua-
t of
.cly
III'W
'IVC
han
nted
thor
The
I1k:3,
otty
Llin~
nne-
1.000
n lue
and
llll':'('
'inc!
-itios
'onto
mu te
~s of
rnns-
ihout
there
('neh
]1(']'-
some
narln.
cum-
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!(i,54 ,
nt In ILLY t: I ;\'0 A S II ('O,ll M »uc H

:H'('(H'Il!tlll'(' wilh t ho PI'\'\')O\1;; :::tn!ellH'lli thut I hnve put on illP l'f'eonl Me $1.280.7:;8.'17: taXI'S. $Sn,\JOS:21: loss Oil silver bullion, !:n:3;'"i,7ilO, 18, I put thai loss ill Ihi~ ptlrlil'lIlnl' tWl'lillll of lhis stn(l'n,{,lll hcenll:-<l' of t lu: fnl'1 (lint tnking 0\'('[" !If silvr-r \\'n,; a dilly impusrrl upon U~ by the gOV(,l'llllH'1lt unrh-r the lll'i[!imd lsuuk or C:lIlHdn Ad to enrrv mit, the terms of thl' London silver agl:['I'IlH'lIl. l lud "'I' not gOIle' into opc'rnLiull lhl' gO\'l'l'llll\['nt woulrl h:l\'l' had to dn Ihat 111lll I ('i'tinlHIl' tl\(' gn\'(,l'nll1l'llt unturnllv \\ollld h:1\"(' t nkr-n tlli~ It!~". TIll' lot:d of lh('~l' ill'nl:" i~·$l+I\),nIJ,:m. 'I':I].;;nl2: tllilt Irum till' illtc]"(,>'t ('al'llilll~S Illnt I ha\'!' u lrvndv nl('ntiol\l'd till'\'{' i~ If'l'l :\1\ nmoun! of 82 ,\)(Hi ,!J:lt;.2:i , I 111"11' dl'dl1d tlH' 1'0,;( of till' lH'\Y ft'l1H'tillll~ to Wllil,lt I lIn\'(' nlr<':ld\' 1'l'i'l'l'I'C(l, l\:(JJ('!," :SIHI\'(H10,84 alit! 1 rind that t li(']'(' i~ n bal:llJ('(' nvuilnblo 1'01: lkpn'!'i:l" t iun ill n-suls. for J'("l'r\'c~. dividends and P:IYIIII'nt" t o g:O\'I'I'IlIlH'rd totnlling

S2,70P,8HAl,

(.;';'!lIil IIII'll! appCO)'8 ([8 ApW/IIli.r "B'")

I have 1I0\\" a third n nd la,'t ,tnt(,1Ill'1l1 \\"llil'll \\":1" 111:\,[1' lip ill 1"'~]lIJIlSC to n quost ion Cl,,]'::('d b:-' :'Ill', Tuekcr ill whil,11 II(' !'d('l'l'l,rj III (hi' "'II('I'iali,":":\1I' of S11fi.OOO,OllO ill bond . .:, ~\ 1)('1' l'I,'nL bonds, \yhil'li \\"iF rkliwl't'd \0 II~ b)' till' gn\'('l'llll\l'lIt at til(' till)!' \\"(' ('Umlll('lHTt/ (Jjwr:dililF l o halanc(' II linhililY \\'lii('h \n' hud tukcn over I'llI' I'U\VlIlptlOll of I lu: old dominion nou: i"~ilI" I ~hl\tlrl point nut (hal l his st ntr-mrnt tlU('" nnt \'(,!](,('] :l,": a('('lIl'Hle!\' tlH' "!IflI1l';I' in lln~il inn :\~ tll(' fir:,t (Jill' which I put on tIl<' l'l'COl'C1. 11 1lI'('I~"';l'il~' rUII:' l;a('k \0 the situatiun :l~ it \\":l~ in 1!);3.1 without making nlhl\\'[ln('v:, fur diIJI'I"('1\1 rhin~;,..: 111:IL han' hnppcnr-rl "in('(' t lu-n, It "hll\\'~ f'rum tltp point of "il'\\' of ~(IJ\'('rnn\(,l\t n more J'a\'(JlIl'ahlP jlo"itioll than tIH' fil'"t "tnl('ll\C'llt I put UI\ \hl' 1'1'1'01';\, But I shuul.I ,..;," in till' l'lllllillittc(' r thillkthc' Iirst ,.:la\ClIll'n\ ruall v mort: ,H'('mal,'l\" refl('('l~ tile "'Illation, and 1 "hall :Jiso'ndd Lhnt whil« tliat Iir-t ;1:lll'llll'lllill\'lliw;j to a minnr extent till' mnking or t'~\illl:llc''', 1111' k,,,i,, llpllll whieh it j" 1I\a;\e wil! tend to l'xngg:cl':ll(' the new ('lJ~r" r.u hcr than lI11(\t-I'-c-C'tilllatp t lu-m.

But returning [I) this ])1"('::'('11\ st atcnu:nl . t ho illlen"t 011 ~~ ]lC], (Till bonds to the' runount of something OW!' )t;IHj,OOO,OOO i'''1H' i; :JpjJ]'OXilll:tII'!~' ~~;U;)O,()()(), That i" till' alilount which i~ hl'ing paid annually !J~' till' t!U\"'I'IlIl11nl on tht:

bouds.

;\o\y, I deduct the old government ['o~t" II':lll~r('l'l'cd to Bank of Cunndn.

These are nut the figlll'es wliic'h 1 inontionor! in the first ~t nll'll1l'nt. These figures I am 110\\' using nrc, [V \\"\'1\ :1.i' we hnv« been able tu obtain them, tlie neln:il costs in the In;H .. :~;j ~'pal' to gm'('l'l1ll1cnt. Those total some sm)9,O()O, and ] add as \\"(']1 the 10"" on silver bullion which would uuvo bCT!1 bnJ"lw I)), the

go \'t' I' nmcn t.

B!I JIr, TU!Jlor:

U, And Wilicll "liolll.! hn vo lieI'll h()ril!' hv thl' g(}\"('I'I1111f'llt'?~-,\, It. would have ill"l'll had till' Bank of Canada not bV1'1l 'l;'~l\1li7,l;d, V 1'''' , Anr] 1 find, ,Ii' yon wil! ql' in the :'t:II('llll'nt wliil'h will be on til;' I'l'('()rcl.' the ['T()~~ new '('o:-,t; to gU\'l'l'Illlll'llt :111 inn II t to ~;2,37I)"J;)5; t hn i is. ('l)~! of :,nll'I'('~I'or $:~,4ijU.40!). less chnl'g('" which g(l\'('Fllll\l'llr would hnvc hilt! to heal' of ;Sl,OOO,OOO "riel, kaving thi~,cl:ro," new co"t of $2,:375,4:";;), I' find thai the prull( (If IIIl' hauk , working on lili" h:l,.;j" (Jill,", !pl'l\l;{C, :!V!lilal'](' f(lr dl')lr""inl ion. pavmcnt l() ~o':el'llll1ent and ~l) Iurtl», whuh I have jll'l'viously ["('cil['!1, \\'n~ S<~.410,O'lli, In other ,,"on!::;, t111'1'l' \\,:1" an illlpro\'('nll'ni in tl)(' U;O\"l'r1111lC'lIt'~ po"it ion of S::{,!'OOO in I hnt year ,t, ('ulll])f\l"l,d wit h \\'hal it would [urvr- ln-rn h:lIl llll' l snuk ol Callnda not. lWl'11

fll'gnni7,(,(1.

(,"!afel/uIII (U!jJlt!rs !l8 1I1!jiilltii,r "1."'),

] 1 hink thai thai is n l! ] hnvr- 11(']'(' ill till' IOI'lIl pf ,-talt'lllt'll\";, '['her" \I'll'; n iurrhcr (Jlj('~Ii()n rni"l,d by :'ll',.'lIr{:c'('\, 01ll' Dr t wo 111l'C'lill~' :\'ill, hut if :'11', l\lc(l(,('1' has 11'1"[, as 1 Ill'li('\"l' he ha~, lll'rli:qJ": \11'. Chuumnn, I klll hel tel' hold

it 0\"1'1' until n i:\ll'r t im«.

371

3.72

ST.,I.\' [)I NO ('OM.lIITTI\'/~

n!1 Jf r. Dcucluuan:

Q, There 111'(' Iwo or threo ql1l':'t\on,; I ~lwllld like to usk. (lnt' i~ ill ('011- Ill't'llllll with ('xrhnn!.'Y, \)IH'" dIP Bank or Cnllatin opt 1'01' the g:o\'Vl'l1I\\('llt (i\\'\wd pnl\l('I'(\(,s, a,;, for 111,.;1 nnco, thf' c,>:,n" in t'lllll\l,(,tioll wn h lIlt, Illll'('hn~e (It {'Xl'h:ll1l!:p'!---,\, Yr-s, 1 think ('nt:l'd,v, 1 Hili not ah"llllll('I~' cortuiu but we would, I 1ll'11\'\,l', "hllll';! ont lrelv luuul]« it Oil IlI'hnl!' III Ill!' l2:O\'('l'llIlH'n\

Q, I )01''' vour net inn lur t IiI' .lominiuu !,(O\'l'l'llll)(,llt Hlld ; Ill' c,~ .R. .»)' nuv ut\WI' ~11\'\'I'IIIl11'llt ]lI'<lIll'1'11I'" n", 1'(11' instnnco. t ho ~tl':llll"lli]l'" cnuhlo :'{Ill til ~l'('lm' ('vllf\ll~(' at n IlI'III'l' pric(' thnn it wuuhl Il:l\'(' \lhtnilll'd if thev \\'\'1'(' opnHling H'pal'all'ly'?--:\, TIt(, ~(II'('l'nn\('n(, of ('!)lIJ'H', \l('I'HU:'(' of t h« Irut that it huv., tl\,' gllid aml "hip, it abroad, hus foreign ,'xi'hanf,!;" :I,; n J'(':'I,t1t tll' dIO"\" slIiplll('nt~, Th« .unoun: (If t hnt is ~lItlil'i(,llt (0 "lljl]lI~' all (Ill' J'('qUI1Tlll -nt- 01 rill' !.!o\'!'I'nlJll'nt t lu- natipnal rnilwuv s and til\' (J(lIn ol'eanir,;tli()l1>' (1\'\\ Y(lU

mention. and ,:till Ivan' the ~U\'l'l'l1111~'nt with ('X('liU1H.((' to' :,('11. '

(~, :-;0 you art' ,:\,lIing ','xl'hi\n~I,,~('lIillg C'Hni\;li:Jl1 ('WIi:llHH', Cana(Ii:\i; dollal''''!----,\, ()r ,,('llinl2: P,S, dollars. slin l] \I'f' "/I',

(~, Yes, ('x:lctly, 'The other quost iun I wnntod t n n"k wus in l'l'gal'd to the t rcasury bill" mnrket oj' whic]; yuu spukc, Dnes tIll' bank fuuct inu In the pur('II:H' of pruviuei«] t rcnsurv bill", or lias that mnrkct d(,Yl'llIjil'd to any l'xtl'lHI?~A, :-;n Iar. I think Ull!' mav "a), that so far :\:' provincial treasury bills nrc ('011- el'l'lH'd t lu-v HIT hold ulmost cniirolv by the chartered bank",

l~, Hy' tilt' \'!J:l1'(l'l'l'd banks rat'her'thall by tho ccnt rul bllnk,?--A, Yes,

(~, There i~ IlIll' qucst iun 1 want to ask you and it consists (If a -tntcmcnt whic]: \I'a" pub lislu«! n ~hnrt timo ngo, ]I' I can 1'('ad t hc "t:lt<'lllC'nt jll'l'haW it will mnk e tlit' point clr-a r. The st at orucnt was made from tho evirle!}('(' t hat e:lJIH' lip \)t'1\11'(, till' puhli« H('(,Ollllt" couunitt cc. and was in tilt' evidence of 1\11'. Chusu-r '\\'alt('ro', .md I'l'p<lrtl'd in t hc Ot tnwn ('itizen on t ho dati' of April 2,Hli :llHI rl'all~ n" roll(l\\,~:-

:'dr, \\'altl'l'~ told Leopold ~Ia('n\ll:ty that CoV('rnol' Grnhum T'I\\'('r~ III :'ILly, Jn3,-) , tolcl him (lit' Bank of Canada " would never buy Oni ario t rcusury hi lls (';\('1'1)( as an open nmrkc: transaction.' at till' same timo \11', \\':111('1':' lJt.rlar('d till' cout rn! hank wa-, buying the bills or r , snnio of t lu- wr-st crn provinces.' whos c credit 11(' did {H;t think I\,ai' equal to I hat, of Ontario,

:\0\\-, t hn t i" t lio It-ad that is f,!;in'n on tlll' front pa)2;p and if I turn 01'l'1' on the Iuurt h pa!!I' of thc' sumo day I lind t.his:-

:\11', \\'altl'l'~ was usk od II'h\' IHI trnrk-rs \I'(,I'C' ca llr-d lor Ontario ncasurv bilk a.lrhuuuh the' dOllliliion (,ll\'Cl'lIl11(,lIt d()('" cn ll "tieL tenders. H(, ~ai;l th\'I'I' Ir:t~ 11(')t such a rlomand for the provincial t n-nsu.v notes.

l t t hcn go('~ on to suv >--

In H):3;i, Craham TUII'l'I'~, Governor of th(' Bank of Canada came to Torunt o am l ill t.ho pl'('~(,ll('(' of Mr. Nixon and Highwavs Minister T. B, :\jI'Qm'-tetl agrl'ed to buv Ontario trell:'Ill'Y bilk A week Inter, :'-Ii', '\\'alt('I'~ ~ajd,:\lr. Towers told him" the bank of Canada would 11l'I'Cr huv Ontario trcasurv hills <'x('('pt as n n open market transaction." "'itness said 11(' holiovcd tlit' Hank of Canada did buy trcasurv bills of "~()me (If the '.1'1':'\('1'11 provinces." Asked whether he thouuhtfhc Bank of Canada should buv the Ontario sccurit ics, he said, "I ccrtninlv think it ~IIO\t\d, I don't bt'iien' thov'vo supported tho province tIE' they ~h()lIld,"

~(1W, what I wn nt to g<'l at ill regard to that is, what, i~ the basis or the hank's nctiou in a mnt t.er of that kind? Dnes it buy t.rcasury hills of the provinces, or hns it offered (0 buy treasury hills of any province, or what was its action in regard to this specific matter rcf('lTed to lieI'P'?-A Yes, In so far as Mr. ,"Va 1 U'I'" , "tntel11l'nt conveyed the tlIought (1i:1! we had nr~rc('d to buy certain

Drr. Graham Fort! 'l'owor s.]

hi ll~ and IHtl He brought I ill 1)('('(')))1)('1' unnlicut ion i TIll' hank, oj it' it cHll po~ whicl: WC' h( oulv t hiru; v h()\~'l','('r, 'wi; or :1 provin: j~IJ(ll'(' it, T him t lu- lust ('opil'~ of r h: of the Ont1l1 ('(lll\'('Jlic'llt ( nut ,)('('111' III

~('('undl in tli(' 1lH'J1l1 :;OI11('t Ii ill!.!: () the domiuiu financial JlO of what th: speak. in 11 ('qually ('l<!~ ]11'(1)('1' a""l:' till' word, : 1\'1l uld \.)(' II r-unr-ernncl , i similur cha think that t I t has 1)('('11

] I' a pr ship as W(' province tIl

I t hinl advantage

all. In ('11

al !eli tiona I exp la iru-d ( the 11:O\'('l'11 example, y borrowings onl v j L(' il vineial gov mill' hav« loan on th [(1'(' repaid the ca~(' ( $lO,OOO,O()( w{' were i! 1,,-,t '1" W(

';l~' th~'ll1ai loan type, unrlcr whi following n mat erial

I-
,t
{'
T
~'
II
T
It
'l'
) r
ill
t l i
u-
l'>
I-
II
it
H
)1'
I'il
rs
)()
,e,
of
~I t
Ill'
II)
'S.
'~.
,
Ill'
('1'
21\
('1'
it -
of
Jk
ilk
L n
" ~
,
C'3,
on
[,.
lin bills and had Intel' gone back 011 that agl'ct'llll'llt, til(' siutomcnt is not correct. He brought IIHlt point. up ut the \)ollliuioll-Pl'ovill('inl ('{)llfeI'C'Il('l' hl'l'(' in Uttnwa III OP('l'luiJel', l\):.)l) , I answered ill very definite and t'tltl'gurieni tl'l'I11S t.hnt. the uuplicnt ion ill that ~tnt('nlcnt· was not ('0 rrcc t , nnd he t heu dropped the suhjoct, Thv bunk, 0[' course, should b« earl'i'ul, 1 t hink, nut (0 omburk on l'olltrOVl'l'sies, it' it cuu pos:,ihly nvoir] it. titat,'llll'lltO' mn y be ll11ult' ill til\' ('lll.lnt!'y about. us which W(' boliovo art' iucorrcct; ( think ill t ho nrdinarv l'()l\r~l' of oveut s the ollly thing In' can do is to "it tight, n nd saw wood. In this particular "lIS(" 11(1\\'('\'('1', whvrc tile suucmcnt wn" made lu-Iorr t ill' public !let'Oull!.' ('OII1I\\lltcl' of a provincin l leg,itdatlll'l' by a lligil civil ~{,I'Vnllt, I di.l Hut ft'cl that we could i~ntll'l' it. I hnve \)('('11 ill CllITt'~P()lld('Ilt'(' with Xl r. \\'alt\'r,;, I tinnily ,\Tote him t lu: lust letter 1\ short t.ime ago und sn id to him that. I prol)(N'd \(1 sond ropios of the I'OlTC:<IHHllll'IH'(' til t.hc r-hnirmn n of the public :u'('uunh ('ulilll1jrlc(' of the Ontario leuislaturc. to ask him to lav it holorc the commit.lee at. the (itA rnnvouicn! uppoitunity, \I'hich I n""\1I1I('. :i~ thl' \egi~l1\tll\'(, has PI'Ol'lIglll'tl, will not uccur unt il next. vcar.

~l'l'(l\ldly, in rl'p;;Il'r\ to our relations with the provinces ill genrrn l, I have

in till' memorandun: whir-l: I laid lx-Iorc the conunitte« (hi" ll;()rning indicated :'llllll'thing of t ho ehnrncter whir]: we f('e! thev should take, OUl' ('OIllH,(,ti()1l with thl' dominion gO\'('l'nllH'nt are Jl('(,l't'sarily I.'PI')' close, \Yc ar(' aware of their finnncia l posit ion Irom day to da~' find Irom mouth to 1l101l1h; II'(' are aware of what t hcir requirements art' likc.IJ' to be; we luck no iniurmatiun, 0 to "peak, ill that I'l'SPl'l'I, and unless our rrlnt.ionship with a province could be ('quall~' 1'10:':1',1 think that we would 1)(' int-npnhlc of giving t hem pl'op{'r advice, ]11'011('1' nssistaucc I think that what I might ('nil, if the committee will fOl'gi\,'e tlu- \YOI'd, n hn.lf'-hakcd Iorin Ill' rolationship, a sort. of touch and gu affair, wnu lrl Ill' not only bad for till' hank, it would he abo had for the province concerned, hornusc with t h« rclatiun~ltip hn H-baked , the iulvirr- might be of a similnr character, \\'{' have alway, exprc",,\,tl that view t n provuux-s, and 1 think that thoro shnuld be lid doubt that all provir.{'es understand t hnt situation, It hn~ been gone over again and again,

If a proviucc decided to Iorm or to propose to us to form such a relation~hip "" \\'(' have with the dominion government, then 1 think I\'C' cou ld do Ior a provinrc t Ill' .typc of thing we do Inr tile dominiun.

I think that 'in the (,lH,I),' days t hcre was SOIlIC thought that the main advantage would be to :,ell us bills 01' (0 borrow from U~, nud that would be all. In either Iorm, such it relationship \\'a~ simply expected to provide an additional buyer of pruvincia l obligations. ]ll'obahiy at very low rates. I have ('xplaim'c\ to various provinces t hnt. that form of approach II'<JUld h(' bad for the gm'f'rnlllents of the countrv. and bad for the countrv as a whole, For oxample, you might find that 'at anyone' time the sum total of provincial borrowings from banks is not far 1'1'0111 $100,000,000, I include in that not only t l.e items of chartered bank statements whir-l: read, "advanc('!' tn provincial gowrnmcnt.'3," but also provincial trousury hill holdings which the hanks may have and which are very often simply loam in another Innn. For us to loan on that st-ale and deal with t.hl' fluctuations involved as loan" of that size are ropa id and at a later date' taken out again is, I think impossible. It is the ca~l' that if an individual province wanted tomporarv accomrnndntion of $10,000,000 or $1.5,000,000 pending nn issue OJ' something of that kind, and if, we \\'('1'(' irs main bankers and financial advisors, \I'C' could do that for them ,\:l.ct as we do for the dominion gCl\'('rnrnent.; but to r-onsidei It central bank as the main source or supplynf provincial funds, (,\'ol'l1tho~(' required of a hank loan type, involves, I think, a failure to rC'('ogtlize the necessary limitations under which we work, 0111' main concern is the gell('ral «ont rol of el'eclit, and following from that, the cash position of the banks, Whnt. that position is has a mntoria l effect on tile socutitics' market, and it might be, and in Iaet I think

373

374

it \\'Plt!d lli' th\' l'HH' t lun it \\'1' vlIlhar\,ed lou rn::ldy U1\ IOllning; t o pl'uvinees., it \\ll\lld \t'lill 1" upset t lu: ::;l'CUl'ilil'<' ll!\ll'k\'l. TIll' ~l'l'\Il'ities market. is 01 ~~reat import n m'l' I \l pi \,\'i Ill'\.''; , \)('('" usc tlte)' lta vr, 1\' i I h the .lourinlon ~(l\"('l'llll)Pllt, hil\i(.n,~ of 'l'('uri\it'~ outsl.uuliug. Any dlsturbunco of the securities market \\'(\\ll,l iuurh Illun' i huu ulr~l'I n;~y ad\'~\ll\ngl: g,\illl'd through tl'lllj)Ol'al'Y loans

\)1 IliUl[el',ltl' "\1.(,,

.\" 1 ~,\id ill t!l\' llll'lllllrnlldllill tlii" lIJ()~ilH;, nu prov ,,'C' hu s ever n,'l\<·d

ll~ t', lIel ill tlt'll \':I]l'Il'lt~·, .\{I\\, I 'I'an (lilly '('>:PI'('"'; plll'l,ly per,,:ollal views H~ 1(1 ILt. r\,:l~(lll [II(' Ihnl. I huvo uu \,\'id,'I\\'I' tu o'lipport llio::,{' vicws ; lli('.\' arc 1I1~' «wu. I Iw:it'\'L' !l Pl'Jlyil\l'(' \\'Plild li""it:ltl' III nsk us 1,0 ]ll'rful'lI\ u ny such i'Ulll'lillll luI' Ih"111. I rhink in IIII' iil'''t plan':1 Ilru\,il\('(' i~ liable \0 ;'1Iy this: tili,. klllk j" \'l'I'~' l'lu:,('ly ('Ollll('l'lld wu l: t!lt' dllJlliniull ~~n\,l.'l'll111cnt., If we ask dii' had; III :\('1 i\~ our main hanker :Iud :1~ our Iinuuciu l ud visor, tluu lIlUY \1\1',111 Il,at till' dumiuiou g.lIH'l'Iltlll'llt wi]] abo know all about our affuirs ; an;' l'1'l'1l it' \1\', tite pl'ovil1l'ial u!liei,d", kl\()\I' l'llOUg.it (11' i hc su uation, to l'C'nlir,{' that. Ihat i~ 1101 tht' (':l~l', nnrl that till' bunk ill ll!'!'onl:\ll('(' with its statute is pt'l'I'H1'I,d 10 Ujll'l'HIl' hOlJ('~Lly and illljJal'lially \Iilh prov iucvs, how cnn we get. iUIU til(' 11l'ad, of \lUI' jl('uple t 11:11 wha: \1'1,' arl' .loing II('J'(' is not SO III l' Iorm of putting oursi-lvcs inro the hand" of the ccntrn l authority,? I ncod not. explain til tld" cuuunit t cc t1l:11 n thlluglil uf t luu kind hns mouning in vm-ious sect ions

ut I Itt, l'Pllnll'V,

~('{'(\ndly: if tll{,~' di,,1'('gllt'ded thl' point to which I have just. referred they

migh! think along those lines: they might. ~.\y, well, as the bank is not going tn provide us I\'illt large amount" of fund" at In\\' rutes. HS its main function " ill iH' advice and a~~i~lanl'e of nnothor eharac(er, how good is the advice ; is il worth while laking it? That 1 cannot answer, sonu-oue else will have to do t hul., TIll'Y might go one step further and say, wr-l], if the advice is good, it Illight 1)(' at times too good, Had we not better continue a~ we arc? 'Ye have a number of strings to our bow, we can play one chartered bank against another if n('['{',~al'~', r do not say that in the sense that something l\'J'ong is done, 1 -uv it in the sonso of competitive b:1l'gaining, where one bank 01' market syndieatl' will bargain against another. Perhaps provinces might. think that. prorlur-os the best. result. for l hr-m rather than leaning too much on the advice of or eonncct.iou with anv one institution,

I fl111 not sugg('sting'i!'l «11Y way, shape or form thnt these ideas, which are

purely imagination on my pr -t, if they wen' prcsen! in the heads of provinces would be in any way wrong Ideas. They might be the type of idea that would come into the heads of provincial people wondering what was best to do in the interests of their own province,

By The Cltl:if:f1llan:

Q. l\Iny I interrupt there to ask you what is [~lC relation between the Commonwealth Bank and the state banks in Australia'l-A, In most cases the Commouwcalth Bank is the main banker; but, of course, the situat.ion there IS perhaps a verv special one because of the existence of the loan council.

Q. You mean the loan council formed by co-opernt.ionhetw('en the 00111- monwcallh and the statc;;'?·~A, Between the Commonwealth and the states. It has cl'l'trnli;l,ed financing for the Commonwealth and for the st.atcs, so that the state" do not in the ordinary course of events do their finnminp; indepen-

dently,

BUMI'. ])cnchm(1l!:

Q. Would that feeling 1)(' present wil h the provincial governments if the nnuk wcr« a privately owned institution instead of a go\'('rnll1c'nt owned institutllln,?-A, I should "ny, H:-: Mr. P;,tll'hmnn knows, I am using my imagination in l'('SpN't ttl the feeling of the provinces. No pruviucc has ever sairl this to me,

'f~ll'. (;l'aham Fon\ Tower: 1

1 dn not HlllW l'X! tillll ill'l"i or noi ,

Q,

not : I hl

q,

at.titutll' lllC1'einl tll be II \.l('('l\USl' and thr t!ln,! th to huvr bank n and th interest cash rc which i mont d have t A~ a 1'i bnnk~ other chartci a smal would I thinl to the

Q

prohal a lear a tho: they b[1l~k~ just II

(

natur it USt rough OVC1' natui

(

thing into Is tll

1\) tit idea gent

By Mr. T~i.ckl'r:

Q. I would like to ask a couple of questions which Mr. Tower" could probably deal with a! our next meeting. The very Inct tlwt once yO\1 make a loan to the dominion government you increase your C[l~:' n;;;P\'V('S brought tip a thought in my mind as to whether there is not a po;;si'hilil:r of setting up, as they have in the Bank of England, two separate accounts for the chartered banks, one which would be regarded as a cash reserve and the other would be just an ordinary deposit nceount'?-A. There is none in the Bank of England.

Q. I understand that the Bank of England takes deposits of an ordinary nature as well as op,~rating fI" a central bauk=+A. Those arc the deposit" which it used to have when it, was a commercial bank. The amount now, I think, is roughly thirty million pounds. The teudcncy is for those dcposits to go down over a period of years, because the bank is not taking any new aecounts of that nature and they are allowing the old ones to run off as people die.

Q. We might deal with that situation by introciueillg 'clInt same sort of

thing in regard to the govel'lll1lent. I do not want. to take up the time to go Into that !lOW. The other thin)!; 11:1" l'l'gnrd to the April statistical summary,

Is that summary out yd?-A. Y ('S.

Q. Apparently what I had in mind at the time 1 asked that it be furnished

1;) th(' eOllllnittee--pcrhap:o the ('olllmiUc(' did not ngl'ee with me-but I had the idea that if the banking and commerce committee were going to follow intelligently what the Bank of Canada is doing the members should receive that

N.\.YKISG :IS/) ('()J/.\II~/U.'J';

375

1 lip nnt knuw whether WI' qU(':<UOll lie rnis('" iunkos any dill'I'l'l'lWf' !il' nut , To some l':\I('llt tlli' dilll(,ltlty would exist ~llllply lH'\'au~l' of our \'\'l',\' ('\l1H' r-onncct ion \I\'\'(' :tlld uur Ill'l':-:('l11'f' ill Ottawa; wlut lu-r it would IlIH!,(' n major ditTl'l'(,Jlcl'

ur not . 1 ('}\nnul \(·IL

t

n!l J{r, M un/olia/r1:

Q. TI\l' pl'l)\'inf'('~ did not Ink\' adv:l1l1il)!\' (If tlle h:tllk'?·--.\. :\11, tlll'~' did

!lut; tlll'Y hay\' ni-vr-r :I,,\,(,d u" ut uuv t imc.

us: ask nay lU\~1 hat

By .111'. Ihuc/lll/ulI:

Q. l s lin' 1'(' !\ll~' dill('\'('Il!'I' hd\\'l'('l1 yO\1\' p(l~iti(ln ir. rq.!;:tl'd l(l Ill' your nt.lllude l owurds till' PI'OVilll'(''; in borrowing; and thl' nil itn,!" wluch (lip cornmercinl banks would lwld ttl u borrower? In l()anin~ l o til(' )l1'l.Vil11'C'S you wuu: to lw n~~l1\,l'd thaI th(' prllvi1J('C' i~ solvl'nl-·-that 1\ i" :l sulvr-u. hOlTll\\'I'r---:1nd beellllsl' of t hat you rlesir« tlint till' 1'l'\ntiol1:,ltip which would l'xiA \wl wccu yon and ill(' province ns its advisor shuuld he mort: or ll'''~ a cnntinuous (lll(,; is not thnt the po"ition,?··-A. That is trill', hut OV('I' nnd nllll\'l' I hut w(' would haw to have ('onsideration,; in 0111' mind with r('~p('cl to lending; whidl Wl' ehartl'l'cc\ bank need not huve. ("~hartcl'l'd hank \cndinp; is a matter of its OWIl interest and that of the bOrl'owl'l'-lwlwccn itself ami the borrowcr+-we have thut interest and 0\'('1' and above that we rcnlizc that our actions will chnngc the cnsh 1'(':;('1'\,('8 of the whole bnnkin~ system. It is the type of thing, for oxuuiplc, which unc will sec nl. till' time of income tux pnynwnts. If the dominiun gOVl'rnmont deposited all those tax ]lUYll'l'nts in their nccount with us, the bank" would have their cash reserves budlv cut : in faet a terrific situution would ensue. As a result a large portion of t'IIO"I) income l.nx payments arc I'eriepw,itcd in the banks to nvuirl thut dimC'ulty. The effect of a loan to a province is on the other side. For the time being that would ~w('ll Ihc cash reserves of the chartered banks; it. would rut them down when the loan is rcpuycd. l f done on a small scale it dor-s not make Il1IH'h difference. but if doncnn a large ::,enle it would create constant fluctuations in the banking structure, flnctnations which, I think, would disturb the securities market" and would actually be n penalty to the guvernments of the country, dominion, municipal and provincial.

~ 1:0

geL \ of lain ions

.hey Cling lion

~; 1S ) do t it

U1YC .thor 101le. .rket that lvice

\ arc inccs 'ould 1 the

I the ~ t he there

~'omtares. that epen-

i the stituration (I lll('.

,-tatbtil'al s\UIIIlHII'Y riuht nlong a~ n mutter of l'(I\lI'~\',~~A. 1f thov han' not t'l'l'('\n.d iI, it i" Pili· Ifu\lt. III'(,(\\'I"\, Ill!' names of :llllhl' members :In,'lIll tl\l' li~t. \~, WI' haw not i'('('tiwd il.~':\, 1 will elH'f'\, lip on it.

lr ,\Ilotl:\'t' pllinl i, Illty Iltl' tl'l'nolll'Y hill yit'ld in Ill\' i'nitl'd :-\Ial,(':' is ~tl ttilH,h !U\I'('t' t hun it i~ iu ('nunda: II'ily llll'~' cuu (lblaill ihr-m r-lu-npcr in the l'nlu,d ;-;1:lI['~ thall I\'l' (':111 he\'\"!

'I'll\' \',ll1\llIil liT :ldjUlI\'llvd to lll('t't :II 4 u'rlnck .

III 1Il/,l/dlllie,: \11', C;IL\II,\~I VUllll TOWEllc-, ( l uvcrnur of lite' Bunk of C':lllad:l.

The CIl,\ll\i\I,\~: Thi- mnruing ill I'l,\ily to a qlll'~\i()n :\~k\'d hy \11'. Dl':l('Iimn n, 111\' gIIH't'll()1' uf tilt' hank mude ('l't'taill st nl onu-nts a,; t o ]1nlH't'~ lhnt lind hCl'll filtd with t ho puhlic ucrouni s ('01l111lill('I' of t hc prnvince.

:\11'. TOWEll:";: L{'t1t'I'~ l'x('hHngl'd wiil: Xl r, \\'altl'r~ I"Iii('h I pl'Opo;.;etl 10 send t o tlit' puhli .. , :\I'('(lunt~ conunittvv.

Tlj(' ('11,\11\:\1.\:,\: I wouhl ::,uggc"q, :,ub.icl'l to lht' wi]! of tllC' connuit.tce, (If ('Olll'St', t hnt it 111ight hl' as well to huv« that ('OlTl':'I)()Jl(it'Il('(' filvd with us,

Hun. \11'. :-'Tl·:n::,\,,: It i" a ~(Hlli idl'H,

Tho CtL\IH;lIA:,\: Further, I would :mgg('~t that the f.(1lY('l'llOr now OJ' ut souu: appropriate t imc 1'l,latl' more particularly t h« lI('gotiation":, if any. that WI'I'l' r-nrriod on 1)(,t'\'('('l1 tilt' gOv('l'l10r and thl' oflicinls at Tnrour o H": to the 1'\ll'ch:I~(' of their ~('(,llJ'iti('~ by' thc Bunk of Canada,

:'[1', Towuns: :'[1'. Chairman, I wi]! "cnd over for (,o]li\'~ of t h« (,()ITI'::'polld('11<'1' n nrl will huvc t hem here ill t ime to plan' then: Oil the rl'cord nt this meeting. :\la~- I",ay that had this bl'l'll (he ('11:'(' of 1'00Tl'~pond('n(,I' with :t, ('\iclIt in the fOI'IlI of n province. dl'aling wit h t he elil'nt's business, I would have nskerl the cumruit tcc not t o prl'''~ the rcql1l'"t for fllillf( of dO(,Ul1ll'nti:', and would have ~t1t!;g('st('d that t.hev 11'('],(' written in til(' course of business between banker and eli~;nt, and to filL' thl'lll would be ('1'('nlinp: an unfortunate procedcnt. Of course, [ am not prc,,~ing that ill this instance, in view or the fad that thi" has become a public' runtt cr in Ontrmo. I think the sit.untiun i~ diffel'ent, and therefore I do not ruise that point on this occasion.

\\,irh reference to the chnirmans suggl':::liull that, perhaps there might be

some further Ioaturc of the mutter which should llt' mentioned, in connection with the llC'gotJatww' which took plar(' in 1935, lIlay I say that that will be verv fully shown in the (,()l'n'~pOl](I('n('c. I can only add that] did go to scc \11'. Hepburn and various others in 'Toronto in ~Iny of 1935; but after explaining a~ best I could the gem'nd position of the central bank ill relation to provincinl financing, and strl'~~i;lg the fad that what was neel'~"al'y in such :l C:l~t' wns the i nt cut ion of initiating a elo~e rdationi'hip, I said that. advice and :l"siH:lu('e uf an ndvisorv kind was perhaps the hp~t thing that the bank hall to offer to nuy gOH'l'llllll'llt. 1 then left the situntion as it was for them 10 think over. and at the same t ime promised that n roprcsont ative of the bank --in fad it turned out to be Mr. lICllder~oIl--shoultl go there to inform himself ill rC'gard tu their finnn{'ial pusit ion so far as he could in a short space of time. so that if the~- should dc,il'c to "llgge~t to \IS that a closer relationship "houl<1 be formed, \I'C' would 1)(' prq>ar('d in a preliminary way, at lcast., to give that roqucst proper ('onsidcration. Mr. Henderson did go and did inform himse-lf n~ wel! as he could in the course (If the clay he spent there about

[Mr, Graham F()}'(\ TO\H'I'B,]

•

t!IP agHi: 1.H'l' :l f(> 11

ndj() Iuun 1(,11

go\'(' 1lI 1;'\ 11\11 ('

('1'1111 n Ii' lilt,

inn ! I jon:

III V II \(''-'<\ :1 III Illgil 1I.'llii

gO\'t Hai I

lilllli

leg!! ligh t luu ubli

tIll':

"

to the

JS get :\n I nk

to

otl

If till'\' !tn\'(' nUl t's an.,' \11\ tIl\' list.

11tl'<\ ;-\tntc,; i" ';0 II dwnpn III the

of Ihl' Hank of

'd hv :\11'. lkflch) pn'[H'I':i t lint had

PI'OjHbt'd t!l ~l'IHl

the onnnuit.t l't" of ·d with us,

.cruor now OJ' at iOI1":. if unv , that i'oronto tl:" to the

.1 r t lIl' ('o1T('''pondI'd at this meeting, th :l elicut in the Ie! han' asked the

and woulr] have twcon banker and cdeut. Of course, It thi" has become nnd therefore I do

):3 t.hcre might be red. in connection thnt. that will be It I did go to see but after explainnk in relation to nccessarv in such

said tl;at. advice Ill£! thnt the bank :; Tt was for them tativc of the bank

to inform himself a shnrt spac« of closer relationship \'. at Ieast, to give ) . and did inform spent there about

..

the umin Ieuturc- of \lit! current posil.ion. At a later elate 1 went back and lignin expluincd our position. Xo(!ling furl hur c.unc I1'1Hll tll\'H' dist'ussioI)s, bccuuso till' pruvinre 1]('\,('1' 1'('CllH'"h·d \18 to net ill the only way in \Yhieh we felt cupnblc til' Heling.

\11'. Dox xicr.i.v: Mr. Chninnan. (hi~ morning just iii; we were about [0 .uljouru, :\11'. Lktl('ltl11Hn put H question to \11', Towers with 1'l'gl11'd tn tho linall('ing of (hI' Cunndian :\atioJ1al Ii ailwnvs. I wnndrr if\lr, Towcl'::' could tvll us \I'hY it i~ thaI til!' Cmuulinn ::\:tli0J11;1 Ruilwav bonds and th« dominion gU\'l'mlllc];t bonds, hot h of whicl: nrt' gtllll'nn\(·\'d.· have a diffcl'l'nl rate' of IIlll·I'l'sl·.' \\·!tv is it tll:11 till' Cnnrulinn :\nti(llwl H:lilll":\\' IlI1lids alwavs CHITY

much higlu-r i;II('I'(',;1 t huu Iltl' gOVPI'IIIIl!'1I1 1)(1I1l1<:' ..

\11'. '!'U\\'EH:-;: Th« d iJl\,I'I']H'{' in mnrket vuluo h('[\u'pn t h« dOl11 in ion go\" l'rnPIl'nt dil'('l·t ohlizat ious .uul I he gtllll':tntl'l'd ones is perhaps on the surface a little hurd til «xplniu. Ouc might believe that onl' WOldt! Ill' :IS good as the othl'r---in fal'l t lu-v nlr: in Ihl' end. \\'(·11. t hc difT!'l'c]H'P in viold ill the iuurkct i" u;.;lt:lll~' I'lf (;1' L per tTIlt. L ani Inking tlie fairly IOllg-i('J'1!l obligat ions. 1 mu not "peaking Iron: \he book (If course. If t1H' rlorninion gov('l'llnunt oilJig:ltioll yidd~ S:I~' 2·H5 you may lind tho ('anndian:\ntiollal gunraulC'('d 1IIIl' v ields of ;).(};-); il I~ ;l-IlI:l11 diCft'!'('IH'(', but il cxi-r». I t hink it i~ mainlv :t IIlal'l,('(' matter, which 1 lind diilil'llit to explain in n way whicl: would ;,('('{;1 logicaL It i.; a 111:\1'1-;:('( ft.dil1g on t hi' suhjcrt; t hero arc certain ut.lu-r feaLlllTs whir-l: till ('111('1' into it. however. 011(' is 0" 1 ]'('('nll it, that Ihe dominion gO\'l'rnnH'lll oblignt inn-, al(' I'Wlllpt fl'o!!1 t ru nsfcr t axos ; Canadian Natlonal HaillnlY Olll'~ arc not.

•

By Mr. Kinle!l:

q, T~ it a fad thaI. h'('all~l' the Canadian :\nLioJlnl Railway's head office is in Quebec, the province of (2u(·I)('(' claims :,ucr'('SSiOlI duties on the Canadian gel mixed up if T t ricd to :-cay (·xadly what they arc. I do know discussion Xutionnl Railwuv bonds'?-A. Thoro arc some difficulties there: but I would

! 'lkcs place f!'Ol1I' time to time ill regard to that Ioaturc. .

The CUAllDL\X: ::',ll', ::'IIcOe8r, do you wish to go on?

::'IIr. DL\C1L\L\:\: Before Mr. ::'11(:0('('1' begin~, 1 should like to make a Stlgge~1 ion wit h which I think you will be good enough to agree, We havo listened to l\Ir. :\IcCC'l'l' now fIJI' severn] days, and I-nne! I feel certain many of the others-would like to hcarf'rrnn some other members of the committee. I am

71i251--·2

J]y JIr. !{illicl/:

t~, But succession duties n~ \\'('\1'.'--.\. :\0 . .ill~t (lie (ran~rt'r (ax, When IH1Ild" an' sold-·-

D.lI Hon. l1r,8Ic/'ell;:;:

Q. Wnuld not the fad, I hal berm!' I Ill' gllv('l'nllll'nt guaruntco can be 11J1Idl' cffl'etivl' 111 ('n~l' t her« was a ddaulL t hvrc would have to be certain leg:t! 1I1!ttter~oh"en·('d. which might cause sonic delay and that might. in the light (If ~:IY" I\"(·\· ... Y(lrk ~l'~,urity ~! Ill' a ~ligllt Objl'Cli<1lJ ?--A. 1 dare say that C?lt(']'S mt.o it, :'11'. :-:>tcv('ns. It]s ll:-uall:-' tlie case that H guarHnteed

obli(.(ntioll--- '

ell. 01 any kind?,--,\. In tiny private or public gunrantcod obligation, th{'~' will usually sell slightly off Iroin the direct OIl(,S.

B!I st-, Dcachnuui:

Q, \\,ith regard to the dominion g;()V(~rt1rnl'nt bonds, they have first. recourse to til" govcrnmcnt.; in till' ('a~(' of the niilwuv bonds tlruir nr~L recourse is to the railway and then to till' go\'('rnmcnt?-A. Yes.

377

378

nut ~}ll'nkillg: Or \\li,~ iuau cr a~ Inr H~ I am \'011('('1'11('1, pU'I'onnlly, hl'!'UllH' 1 ha~'e n'ry [v\\' 11\1('::'[IUll::' l.o a~k; hut I han' lisll'1Ied III ;'Ill', LnlldcI,l'llll, lind you will !T(':t it t \ral [ a~I,('d SOli\(' qlll'~tI(\lI~ 01 him. 1 .ui: vcry anxiou« to II!'\ :\11', I.:ll\<kl'yu\l'~ l'l'pli\'" 011 wll:!t lit' \\'IHIlI! likl' III dn :ll'i'Ol'di1lg' to his ~!ll'inl C rvrl it· pL'il\\ ol I'll'''', HI' \\":1" SIH'nki1l2' nlld lli-:tiill!! with llint nuu tvr \\'11('11 ?dr. '\1~{:l'C'l' t(l(,k it out uihis hn nds al\tI 1\"I'llt oil w.i l: till' ('x:11l1il1:ltiIl11 . .l ~hllidd :11"(1 like to 11\ :11' t'I'0I11 ~Il'. ;-;'{'\·!'II". Il'iih \1\111111 I do !lilt :lhnll':' :1!!1'l'1', hut. who 11:\': hrought, uiu ,lllll,' p"il"~ \'1'1\111 t iuu: 1(1 tilll(' ill I"l'~":lrd t o 'l\llllH'lary 11lattl'1''' on \rbieb I ~h(lilid like to hl'nr lli~ 11101'1' dltaikd ,":pltll1:ttiOIl. I t l.ink in fnil'lH'~" to Iht' re:'\ (Ie till' l'UII\llIitt('1' till'IT llUldlt III Ill' un ll\ljllll't\lniiY t(l heur r ru III t hnsc. and without di!T''I'l'1l1i:llill\~ 11(1\\'('('11 tilt'H' U:Cllt\l'IlIt'1I I 11:1\'(' Illl'lIlilllll'd and (lthel's, ~Ul\lI' (lth,l'~ who IlIiglll lik« to ",,\.: HIli'", qlll·diOIl". '1'\ll'l'l'i'(lrl' Illy su~gl';'tion is lktl ~IL :,\1('(:1'('1' Ill' g(lild l'Il()\lgh 10 gil'l' t lu-m t hr- (lPIHll'I\ll1il~' t o f'1ll'nk, and tlu-n if 1111'1'(' i" any t inu 11'i't thl' h:dnlH'(' of it, ('"IIlt! Ill' gin'n to Xl r. :,\ld:('I.'I'.

~Il' . .I\]:\LEY; Let (;cITY gil Oil.

~Ir. :\lCGI':E1C I. 1l1:1\' snv , ).11'. C!t:lil'lll:lll. with l'('\'el'l'I1<'(' 10 ~1r.Dl'n('I\ll)nn's rcmu rks thnt I hnvo diH:lI;,,,\:d till' ~1le:e:("li()11 that Ill' mnkes with ot\1el' members 01 th., conunitt.vv, and if 1 \llld(,l'~tan;1 it (·<lI'I'l'(·lly. the ('nJ1S('IlS\lS or opinion was that Illy lint' of ql!(,~tionilll:: should hI' fullowed out, and tit!'y would prefer to put their ~t:\I('llll'nt~ after lhe i'a('h 1 was sed.;ing \'·~.L brought out.

).11'. ])1.;.\Cll:-.tA:>:: III tliru cusc, I should like to ask the cOIlllllitlee to give judgmcut. upon that, and if necessary 1 would move thaI the other lllem\wt's have nu opportunity to hl' honrd. [!\Ill :l"king (his mattC'rof ),11'. IVleGeer mort ns n eOll1'(esy ((1 till' !'('~t of t ho members of the commit tee than anything cb('. He t ool; till' place of ~lr. Lnndervou when :\11'. Lundcryou wns speaking, nnd lias nssumcrl that t h« ot ho.: members would prr-Icr to hem' himself to 1.\11'. Landcrvou and the nt hers. 1 think il!p!'(' ought- to he eCl'tain definite limitations. \\,p 11:1"(' Iimitnticns in t hc House of Comuious. limitation (0 a forty minute spcoch. and if the committees arc to be l'lll1:"litutl'(1 so that one man sl{all speak [or till' cut ire ~l's"ion, then it is indl'cd a very ])('eulilll' presentation of the arglll1l"nt so far, at. least as I am ('o1)ce1'11('(1.

Tilt? Clr.\lH~IAl\: If J might make n "ugg('~tion, ::\11'. ::\1eGcer has stated that he can complc. (' his oxammation this nf'tcmoon. If he eomplctes his examination this af'tcrnuon we will j11'o('l't'd in the way you suggest.

)11'. Ih:AcIDIA?-;: We have heard Mr. MeGeer with regard to thaL suggestion. .:'.~ I rcr-u l] it, quite ('Iearly, 11<' took the po~ition when he took Mr. Lnndcrynu's place in the pro('c('dim;s that he then proposed to go on and spend a very short time on it. If :'\\1'. )lcC;l'el' is to go on, my suggestion is that perhaps the secretary of the rnmmil t ee slroulrl notifv nnv of us who have other business to do and who mighi want to go on with other work or go into the house, and then we

could come in after this examination is finished. '

)11'. )lcGE1.:n: Anvbodv who wn nts to do Clat can do it.

)'lr. })E,\C!DI.I;\: Again I submit it should be left tn the judgment of the

('ommiU('l'.

Mr. l\ICCEEIC 1 have not boon herr- for at least four (If the committee

meet ing~ at a II.

Mr. DEACIDL\;\: TIH'n. )f'·. Chairman, 1 mow that we give the 0ppor-

{unity to other memhcrs of tIll' l'"Olmnith'(' to be heard, and after that we can gi\'e ')11'. ~r('Ch'('r an opportunity to r-muplcl o his ex:tminntion.

:"11'. CLEAVE1\: I have a ~uggc~ti()n to make. In view of vour comment that :'\11'. ~J('Gl'('1' has inrliC'at('~t' that he will eoruplctc his examination this afternoon. 1 would l"u[.':[!:('s\ to M1'. De:wlllnan that. he do not press his motion.

~1r. KINLEY: Hear, hear.

The CIL\lHMAN: I think the motion should not, be pressed, Mr. Deaehman.

[Mr. Gl'nham Ford Tower~.)

~lr. n \11'. ,I, til gi \'l' nn: !Ill)' •

'I'll< t ~\ II'. IJ TiT ('

~ II (ll II d I) u ( montnrv.

~[r. ,I We hav« Ii in nil!' r,:ru' add!"!':':' till Ill' It-It nf,!,; have thi"

'1'111' C i\h. L 1\ IS. [S{ (0 present

i'dI'. ;\ mittcc, I l 1 am IWPI plimented docsn 't lik

1'1'11'. r The ( )) r. ] Mr. t The ( I'll 1". 1

and I thir at the san

Mr.l lines of jl The ( man is no

1

Q. A: that wou' abundnnt in fierl,mg the otbe;; mcnt mal will he Ic missioner

Dol'S it 11 in Canal

< ' ••

If I '.. ~ "

, , . "~

;w-., . .

. ' ,

~i =, >~ ...• '

I> l .,'

• t _'-<C

l htlW ,\U wil] ('[Mr,

Cn'l\it

,l{'lkel' like to It'OUUhl rliiei, 1 11Il' rest ,C', n uti

otlH:l'sj 0;\ iou is ak , find .~el'e.

('lIll1:1n'S ucmbers lion was Irefer to

to give members

I\lcGcCl' i1nytbing .pnaking, [ to M I' , litations, ,. minute a 11 spC'uk n of the

atcd that unination

llggcstion, ndervou's -ory short spel'etarv o do an~1 I then we

.nt of the

committee

he opporat. we can

, ('omnH'llt ration this motion.

Deachman,

Mr. rh:Wll~lA:\: T should likr tn h(,:II' other ~1H':1ki'!" Ilr-L

:\11'. ,1,\Q\'1>: \\'illt ITU:lrd In .\11', l.mulorvuu, HUl\' I ~;I\' he d(l('~ 11.1\ illll'lHi to gi\'l' any plnu to Ihis I;ol\\lnitt<'l', for t lu- ':1'1'." ,11Up\" I'I':'IH'II dial hI' hn~ no1

lillY·

'rl\l' ('IlA!H).I.\,\: He ~;\id hI' h.ul. '\11'. LUllt!I'I'\'Pl! .-:Iid hi' had n pllll1,

:\\1'. Ih:\('I!\\\'\: YI'~,

T\" ('I[\III,L\'\: I I:l'ard tIll' ot lur nlgill ill t ln: )(lllI-t' "I ('''1I11111lJ:c' litnl \'nll should 11\It ~:ty t hat a mnu \dl~ :111 \1111 rut h, Tllnl i,: 1111 1·I'(\nl. il j, nut p:lI:iin\1\('111 n ry,

:'.11', ,I.\<IIT,";: I think til(' 1'(\lil!llitlt'I' Inimlllil'l',nollil ti\l' u-nu !lInt hI' uso.l. 'Ve hnvo a gl'lll'l'nl srlu-mo. but no 1'1:111. ,\~ a uuu u-r lit' f:II'!. it \\':1,'" nrrnllgvd in (lUI' group t luit Mr. Lalldl'],y\l~1 \l'a,; III IH'I·UP.\' IIlld lmvt- tilt· fir:'1 ('1111111'1' to nddl'l'~~ Iht' t-ouuuit t cc. illid hI' i.< 111'\\' t hrouuh. :llld I :llil III (':11'1'\' oil fJ'(l1l1 wllt,I'(' Ill' Idt ofr; hut at til(' sumo tillll' it \\'n~ ngn'·I·d, I think. that J\II",I'I[(,(;I'I'l' ,:hould han' this ulu-ruoon h) ll11i"h h is ex.uuinu! ion.

The CIL\lHI\IA:-:: Mr. jkal'hmnn, do you withdraw your mnt ion ?

Mr. DE.\CI\L\t\: If I have no ~e(,(llIdl'l' for mv nuit inn 1 will lcnvr it whr-ro it is. I still hold to 1ll~' uriginal ('()I\\'il'tion; (lI:i(, it. is not a fail' pl't·"(,l1tatiOll to present one mail's point of view to the committee.

I'I\I', l\ICGl·:l·:Il; 1 am not PI'I';'('llting OIlC nuui's point of V]('\\' in the NJlIImit teo, I am trying to Hs"i:::L the committee to get thl' hnsic Iacts 1)('1'01'(' them. J am hnpp~' to "H~' Ihnt a good number of th!' couuuu lr-« have 11I'I'sflllally ('OlHplimcntod me on tho prcscntntinn I have made, ami I am SUIT~' Mr. Duachmun doesn't Eke it,

11,'11'. DEAClIl\f.\N; I have hoard complimcuts to yourself by yourself.

The CAfHl\L\:,: Order.

Mr. DEAClL\IAN: But I have r.ot heard thnso ol hor comp limen!», Mr. 1IcGEEn: I suppose you would not want to,

The CHAIRMAN: Order.

Mr. KINLEY; Thoro seems to be two lines of thought bdot'(, the eOlllmittee and I think 1\11'. ~IcGcer represents one of Lheru. 1 do nut agree wilh huubut, at the same time, if he has anything to offer, I think we should try to heal' it. 1'1'11', DEACll".IAN: Would Mr. Kinley tell us wha], would happen to tho other lines of thought if it took an equal length of time to express thew?

The CllA[HMAN: I think, lVII', :MrGeer, you had better ~.r(Jc('ed, MI'. Dcachman is not pressing his resolution.

'.

By MI', McGee/':

Q, At t he last meeting J wns dealing with the problem of finding some use that would serve in 11 practical way the need of Canada for lllOI1('Y out. of this abundant supply that we have. J think uvcryun« II' Canada i" iutorcstod in finr'rng some way to put a portion of that abundant. supply to work, I dealt the other- day with defence, and I should like to draw your attention to H "latemont marl!' bv the' Minister of National Defence to the Davis Commission. It will be fOllncf in the report, of that corumissiuu's finding at page 1 L The COHl-

missioner says :---

During his testimony thl' minister said:-

I may say very definitely that the plan of gOVl'l'lllllellt (\\\'IHTship as such lias never been definitely abandoned; it has just been postponed IW(,Huse of the' financial stringency which wns particularly embarrassing to the Minister of National Defence.

Does it no! seem S(l!llCwhat pnl'adnxieal that we should hnvo a supply l,f money in Canada m('flflll'cd, as w(' have mou-urcd it. at some ten thousand million

,',d;VH ll;:.' it HeW tTli \\;t~ U\lhi.! it' h, Ib\Wl'C<l in :.nd (hill. thaI IlI'W ,j'n was '!IrllH~\rliy thnit-iuJ~ Yhx' i n<! t~ llf1,~n of ~J-\\"c-rHlUt-HtH 1 pnw·l·~· to ron .. . U-a' ~-·irt~nt~nu. i~';;l.hi ~Htd 4'ltT\11n~ 11.1-n pf 111i' lHt'flhnn of \l~l·hange

}ie,',l l1i't I'r\nlH' U:.ill, I 11,' h" \ inli 11,:,1 II'!' \\'i1'f' going

;t!(;,I'l, h' HJ('ll;Y, 11<'\! tty tind ,!t-\.Pi1:nn ;(wi 111 \('11.1)1 11I:,'l 1\1'111 , b~' lh:u :1 (wttf'l' al1d 1I1,'n' "ll,lallwd !',n'\i\:;ll\,n "f lh· uu-diuu: (If .,"\('!il11lgu

! ninl\l! Whnt I \\:tlli III point <1\" In :1',,\1 1, dj)~: WI' :qlpah'l)tly haw'

,t H,pply: \Ii' bo\'( ,k-IIl'Hinll and llIW]!l\>l"~'lli'nt f:will!! \':h(: uppOI'-: "d:'[", :','1 ",q'''''!\iI'I:n (';Ilt:l.li,\\\ den I"i'll",n\. I'llI' 11;:'t;Ul(T, t ]u: ,Jlllm~l\'r (~I ',""'1,;" \\'\.,' aI" Ik~tr,,\,,',l t l.rouuh (\,,' ['11\\\1\' \(1 "limili:\\(' \"",,! ,':'"",;lllW' m this

; "Uill\'\' :- :t n\'i\i\.!: ~i;:t\lw t,I thl' "huh, adlni'li:'\l'ntioll (Ii 11:i, 1I:11ioll, ' Thnt is pnh' ,.il" 1\('111 ' 'S(' .In »ot n!'('d to il\1\1(11't an~' 1l1:jl,'rial~, \VI' Ita\'" an abnnd:<1\(:" l<l idle l:\ho\\j', ;l1ld vr-t , fill' S(lIlH' I'(':l~\lll. WI' (':\\11J('( E:ld 111\' lil\':~n;:, oj pntting hth(lul' ,Ill.! llIatl'd:d jllg('tiH'1' til mnl«: our hiL';h\\'a:,~ :,aft' a~ain::t Ih,' dcstrucli',H vl [uuuau lill :\"~\'. i" lloNl' !HI \\'n~' by whi. 1I II'l' (':tli finnuce public outerprj", 1\\' \\'a~' ll~' \\hkh \n' (':In I'Xl'J'(';'I' runt rul thut will \'l'lluc(' (h cost of moruv t .. gd\'\'l'1l111l'llh tlnd prnvulo 111(' llH'dilllll uj ('xehnll!;c thnt g:o\'l'rnments iuu-t ha\'(' to piu men a\ work 01\ lll:ttl'l'i:!l~ III prrulurt: thing:~ that fire nppded alld \\'unlt \\'hii(' wit hiu t he ll:lti(ln?'--.\, T think tllat ql\e~ti()n hns come up \.('11>:" in \'aritlil" \\':l~'~ lind that in f'lTI,(,t. :lIth011gh von mnv not quite agre0 w;tl: dii~ 1111',1\(1<101 11Itlting it. it ~i)lIIlH'lTd dowll, in 1':1('\ Hhll()~t al,lihc qtlcstinns Ihat !l:l\'" 1'01111: \\P in (11(' ('(l\ll1liitk(' have :oill1l1l('I'('I\ d()\\'I1. In this: h therC' no ('I'~\l{'~" \\':1\' ill whil'h tht',,(, tI,ing", ('nil 1)(' don«? ;\0\\', I han' Iuilcd to find a

\,(1,1 k-~ \\';I~', '

q, ,\1\' righI, let inc put this propu,ilion \0 YOl1, On vour (1\\']1 ovidcnce it.

i~ now "~I:lhblH'd that lhl' moncv of Canada i~ ,I e\'eallllT (If the laws of

C'an:;,h'? -A. Y\,:"

(J. '1 'I:ll pnrli:1\1i('nt d()l'~, b)' cn:wting laws, pnJ\'idC' the IlWa118 of creating,

]""l1il1g and, ill a 1IH':I"UIT, controllinz and 1'l'gul:tting rho ci!'eulaliol1 of Canadian mour". TII:!l j, eorred?-A, The .unount : 11ardh' til(' ('ireulatiPl1,

t~, Thi' amount. All right. \\,ill YIlt! t('[11I1\: \\'lly n gm'C'\,Ll1wnt wit h power III ('1'('111(' lllOil!';,' "ho\\I<I g::n' thn( \lm\'\'r t\\\'ay to a pri\,:\(c' llH1J10pol)' nl1r1 then InlTll'.I' that \\'hieh p~111ial1j('nt can crente it sr-lf bal'k at intvrc-I to the pOInt of na(j.llm! b:lllkrllpt('y, herauso. if WI' (':lnl1o( fillntH'(, the things that nrc 1l(('t'ssnl'Y it lW:ltl" t hnt t his nati.1ll (,Hnnot 11\('(', il:' current ()blig:tti(lll~, Bu\ we will e1ill,il\~ttl' t hc qUl'stiflli of hankruptcy and \('a\'(' tIll' question: Why should a gO\'('n\llICllt wit h ))1\11'('1' 1(1 rn':lte 1)1\11\1':-' ])O\TO\\' that money at inte'\'cst?-A, 1'1'l'''\Illltll>1y il d"l''' ,,(I ]'I'I':lll:'(' it \\':tnl~ to gil'(' tlie pcoplt' a medium of exrhange wilh whi-'l( Ih\'~' wi]] he '"ntii'ficcl, :\O\\', ~p(,:lking of borrowing that ;1,1(HH'Y, we \'\'alize "1 (,(jHr-C' 111;11 t\}\' ;1'lHH\I1t \\'1111'11 i~ paid pl'O\'idl's part of the operating ('IISh "I' llie h.mks and :'(lllie interest 011 dl'i!\"'it:c, ;\o\\', if parliament wants to (h:\lI~1' t h. ;',:'1]1 of 111,('rntillg t lu- banking sy"u-,' then cort ainlv that is within the P(\\\'l'\' of I'tlrliallWlti, ~"('(,(Il1t!l~', if pnrliumcut ,!('cider\ ikll it would proceed witl! ~I\('\l and -uch all ('xpl'nciii\11'1> by means of legi~lating for au increase' in tlli' no\(" i,,",\1,"(\\'0 !>lllldn,d, fi\'1' huntln,d, :I billion dnll:ll'~,,":rhcrc nrC' no limit atioll~ on l'arii:lllH'ni: it ('\llIldrlo ~n, I would not lw here to :cay that pnrliamcnt mu-t not do ihis. Thai wO\lld he' foolish, Parliament «nu do as it sees fit. I I'nll I'xpn's:, (ll'inioJl' for whnt the)' mny be worth on till' rC;,lIlts of an)' given

llH'thod (If finnlH'ing,

Q, I I'll I the q'\lI'~lit;]l 1\1 you: If I a" an individual had the power to create

1lIOI!('Y, do :'011 think that I would ('\'pr gi\'c that power away and then borrow kil'\.; I hat !)\ill}('Y \\'hich I could {,!,1':1tc at i itcrest, wit bout being eompletely lnl'ki\lQ if' nn v 1lll(jC!':'!tll1I1ing of ~tll\nd business pl'in('ip1c;:'?~-A, If you thought

it \\';1, llHil'l' p!'"fii:lhll' nnrl more C'fferti\'(' to do "0, 1 darcsay :'-'0\1 would, "

Q, C,\ll vou ('(ltH'eiw of anywav l,~' which 1, as an individual with power 10 f'1'catl' moncv. would Qin it awuv and then hmrow it back at interest which

~:MT. Graham 1{()rd "Cowers,]

\\01.11.1 lwmwT 11Hll'rt'nl frol\l \\' 1 Ht I 11 entH' 'i \

qli 1 Iii I

\, Y,nlrel'\.- ,'(! q. Yt·~, ill \k ('j,Am thaI 11\t1J)1'\' b fUlictio!l tll~ Ihj(

it'!

;\II', :'1\1'(; rhut \'I'I'Y fill! :,11'. C1.AH 1<:,t'eping'? ?vIl'.l\J cC 'rc]\\'\'rsl vi(·\\':,

13,1/ J

Q, \\'liil(, it? W(' :ill k: interest ru te::' gethcr nne! sa at it bv f('il'l much i\;. anv

Q, Whi~j operating eXl Q. And' keep alive.

Q, Doy -A, I shoub because the unpopular st

Q. YCi'?

By q, And The C:J )11', KJ The C, -:\II',1\.1

litt!r> hn nks 1\Ir. Tc wav n nd sa not be tl'lli

B)

Q, ':\0 the instil U "tanding Y A, It if' t n on paying

Q, 1\ spenking ( all well,

78251-3~

l

By M». Cleaver:

(~. And almo;:t all unt('n:t1)ll' ~L1g:gC'"tion?

The Cll,\m~IA);; How man)' years did you ask for?

'\11'. KT:-\LI';Y: (;0 back 25 vr-urs.

The CllAIH~(A:-::: How many banks have biled in that time?

Mr. 1\.1:-::1.1-:1': There huvo been some, there W;lS the' Horne Bank, and LlIC Iitt l« hank>' in Nova Scotia nil got squeezed out.

:.\11'. Towrcus.: I sl1ggf'i't tha t most people would answer t.hat in the popular way and say that large profits had been made. I could not say that. I would not be telling the truth if I did -n~' il. ~o. th,:y have not.

395

•

\\(llthl Ill' more p\,oHt:.!· .r til llW'!··-.\. III' ('nl\r~\'. whnt 111\ illdl\'idu:d Inil!iI\ do i~ I\H'lo\'('1l1 ll'llHl wha t n \!:,t'TI'IlHH')lt 1\llght do. 11('\';llb" lilt' l;O\'l'l'llllll·nt HPt,:: 1II

whu; it ,'ow'l·in'..; til hc' llil' Ilational inwl'I';,I. .

Q It' t dhl that, I "\lltl !lnd 1l1~·"pli \o!t<kd lip \\itb 1l1l1'Uy;thlt, (\l-lIt,..,:\.

h ~'''Hl' -nk \'ol'nliulI, uu.« r this n~~;llll\ptillil, Oil\' of t'l'\'Hling money"

\~, Y('s, :Hlt! (':m'yil1g (lH \l1~' nonnal nl'ti\'iIY·

\Ir. ('UHIC :'Ilig:ll! I Inl!'ITUpt Mr. )\,.( ;'I'I"? :'III', :'111'( h'I'r -tuu«. 1 IwlioV('. 11Int 1Il00H'\' b ('('l'all'd h,' II\!' 11:11\\,' hv H-Y,\('lIl IIi hlli,\d'l'\·'linu:. h t\lll the ~·lI.:I('t inn oi' h,)lI\.; b,t'ping t (I l't'('())'(\ t ran~'tt('1 iou-? I I do('~ 1\111 1'1:(';\ \I' III00l1'Y, does

• t ,

;\\1'. ~\IC<;I.:t-:ll: 1 think if you will n-ud the record. 1\11'. '1'0\\'('1':' answpred

thn t \'('I'Y fully.

M1' CUH\,: Your i(\ea is that thl' b:lnk('l'~ 111:1\,(' !II0l\l'Y by " "~'i"tel1l of b(111k~

h('pil1g'~

).1 1'. i\lcGr;;:H: As 1 suv, the ],('('01'11 i:-: qui le ('omp\d (' wit h l'l'~l)('el to Mr.

Towel'S' views 1)1\ ti'llt.

)

J3y si« Kinley:

q. \Vhi\!' \\'t' nrt: (Ill t his qUl'i'tiOll (1\ lllt('l'I'~I, \11' 'I'owors, who r\c\('rmines

it? \\'(, :111 know there is :t 7 11(']' ocnt limit, but it' thl'l'l' II mnnopoly ('(JIlt-rol of interest rutvs in Canada? How is it detennill('(i, by tlll bank" just g;etting togethcr and saying this will bethe rutc, or is there any way thnt thvy must arrive at, it by scientific proe('s~?-A, I would say that. it i" a question of sUl'yival as

much H" Hnything else.

Q. What do you IlWHn by ~ll\'\'i\'a]'~--A. Survind in j',·latioll to meeting

operating ('xp('n~e:-;, -

Q. And ihci. r:ltl' is detcrmined ,on t hut th('y make n prof'lt'?--A. :-:'0 lhey tan

keep alive.

Q, Do you think ill thr Iast fifty yCHI':' they have mad!' an abnormal profit?

.-A. I should thu.k that a great many people would try to avoid that question because the suggestion that the b:I111\." have not made large profibs is u most

unpopular !3ugG;('stion.

Q, Yes?-A. 1 could not.

;, n

rn

~f

'Y ill

a i\.

ge

ve

ng to iin 'eel in t:1- mt

I

'en

By Mr, McK1:nlcu:

O. Now. just for a moment, it seems to me that in the last tell years that

the il;stitUTi(ll~S of t his ('(Jlll1ll'Y t hnt h-ive c'Jllsi8tently made money', notwithstanding vnur [llJ~wcr, ban' 11('('11 the h.'Hmial institutions of the countryi-> A. It is true, if you put it on that basis. th~lt· the banks have been able to carry

Oll paving cliyid(>nc!~.

Q. Not only the hanks but, the trust companies as \ycll?-A. vVe were

speaking of the banks, I do not know the situation wi~h respect: to o.t,h.ers at all well. It is true the banks have been able to r ontinue paymg dIVIdends

78251-3~

ate ·ow ely glit

wer iieh

396

\\ """il' \,\:1"\'~ ludu-Hi", \\<1\'<' !lll\' Whrth'f tl>,,1 i, dl'fir:\h\i' (\1' \\\11 }\\II~\ lw ,I ti;;,l"!' ", ''l,;n:!ll:' It \' trW' Ihnt if tillY h:\d bel'll Itln'c,d III e\ltn)".ntl' dividn)lb

,. I 1:;,':, " •• ;ll"i di-lllri>nU('I' in It)\' muul- 1,1 \1,,' pCPI'I\',

ThIn'" :\1\ ill\i'1\--:"\: :Jlll"iI\! :1.,' \""'1'> ,,: ;\.,- ",·\llltl\, Il!:d till' blinks

"i I:" (',null:'\' :llT \'I'\'V "lj'ilIlU, :I\lil ll,nl i:, \',TV .1('-i1':lh\,")·.\, y('~,

U. ,\:,d il.t\' l'llJit1'lll die: ~ll\lnlion',' ,\:tt·1' ;t\l. it iII:'! l'(\nl('~ dtl\\'n to the'

"q. _\ :'11' "I' tll<' ·ill,jlvidun\. it i- II t hinu \W1W(,t'1l 111(' :;1l<1 mv h:lnkN, whet II('\' :;" tLlnk- I :1111 10 [(t:\ till' \11um'\' or \\'Ilctljl'l' ill' tl!il1k~ l\i:d I :;lll nut to get it'?- .. -

.\. yj'~' '

l~ ~U\\, th:d tllldillll',hip i" di-tillt,t!y ill hi, h:llld-'?,-,\, \'('S, and tl1<'11

thi'n' \\\1111.1 \)1' 1111' qlli : ion :1" t., \\'IIl'1hcl' with u-u hnnk-: is thC'l'(' ~\lm('i('nt l'Ol11l"'liti(\l\'J :--:ll (\1:;1 j' t,m' will nPI l'J'n\'ide :'(\\11' J'cquil'('llH'llb you may go

to :,]HI\lWl' with :,,'l',\' 1'],\1:'1)('('\ of fi\lin).': t hrm.

q Tlwn' j, 'I\(' t\',ili~ ahout \Ill' ballk" \h()\l~lt, tlif'Y ll('\'C1' quarrel, at

le:l:'\ not ill til' oPCll: llit':' \,1'(']) \hing~ It, thC'1l13Clw;. ill runt regard, they (,0- pj'''l':d,' ~d Ii ,~t ill ~II f'\l' ;',~ tLings of that \,inll a 1'\' con('t'1'1lC'(1. I think there i~ "t\\Ujll ,i1i.lIl. :111.t t lui ' it is gUild !lllsini'':';, ,\1\)'Plll' who h,li' " goofl business dnr~ n." 11<1';\ 1,(, \\"ll'l':', it j- (hi' (111(' Wili\ i- .ill-\ ('11 IL(' \lilrd('1'li11l' ()f ';O\\'l'lll'y

that \vtlrrif;~'.

'1'1 ... ('J1\\\Dl 1:\: Thov lli.l not quar1't'l. bill t\icy h;HI tlifTl'l'l'llCC;:; of opinion bdtll'l' lhis i'lln)111i1tr'l' hst v cur.

:'\1', l\I:\LEY: v-. 11\11{)1\',

H II .1! 1', J 1 c( ; ( 1'7' :

Q, ~n\\'. the po int t kit :'Ir,Kin Ivy nt i.;ct\ Ulerc i~ the wry is~ue that we

thrl'~hl'll out 1 tIW\H!:\l1 in tht' ln~t olect iou. t hnt. illstcnd of lcavinu the hankers in l'(ll:1rol w(' w('n' 'going to tran,.:fl']' t his t'Plltr(ll of tile i~~lll' DC etl]'rcne\' for puhlic lH'P;)" frOlll \l'll' h;lllkcr~ to t hc gOV('1'll111 (,llt, ;\O\\', you do ('x('rei~e '''0111('

l'I\l1t;',,\ in t\){' Dank of Canndn?--A, Yes,

q, \0 \ \\::,1<'1'01:;:1;( i\ vru r ('t"lind 1..;~ .\, QU:lntit:lti\'c, you m:t:hi sav ,

q. Yeo', vour ("'11\\,,,1, \\'l'l't !1l\ilinci\ to II, by Xl r. Dunning, I think, on t wo ti'IY,,",';;' ",":1-;(,11 .: :\:. !l"\lC(' t'!' Comlllnn,::, aurl 1 think he gn\'c us the staren:.":' ,1,::' • he :ilt': ',.1[\ tli i'I'lltl'(ll \\':1' lirst :,hl'll\1gh tho B:i11k (')1 C':lll:lil.t·~ POl\'C'l' til lix dc,' ,':l!t' "i :n1<'I'I-\ :Il \\'111"1\ tiH' n:mk ui' C:l11nd:t lo:111crl legal (('nller cash t.tl dit' 111>'1','1::\1\1 h:illk-: I" ":I:tl riu:llt'}, .. ;\, 111('i';t'nt:.ll~'. the illll)Ortanee of the h:\1:k 1:1:<,' lit'!\: 'n ,l,i:, ""\lll\!'\' all11 111,1,..1 (lthel' ('(JllntriC'~, (,(,I'lainh' in th(' l."nited Sun" :(".1 .u lk l':illl'll l(ill\, . .lom. ha~ lwen neglie;il;\e during the last four \'('"r~, It He:IY ht""\lllt' inqp,r<:li;t "('n1l.' lill1l' in th(~ futlll't' i(~hank~ need to lHi! \'11\\': \,111 fur \ \1<' l.i-: iuur :'(':\r~ hl'I':l1\~[' \1f t lie (,;1-\' 11lUlH')' poJiey it ~ecm('ll \11 \)[" 11' lilill\'I"""Il'\' t" v.uv t\i(' \"tnt.:. rut c ()I illt' l'nitC'd Kingdom, the \ ']111,'.\ :-'::", .. , ,,1' C:ll\:;t!:t: 11 I <.'l'('le<I'(', iT. may L left (Jut 01 ('()ll~id(;l~!ltion 1'01'

the· t~nH' b(-,ln~,

Q, Y .. -". ;1_ :1 m:I\\('r of fnc't, on the ;c(;.:n1 \'(':,('1'\'e minimum 0111' hanks have

on t!il1;,.it '"I' lIW!'I' (':I"h t hnn rhr:v l'l,qui;'\' to in('l'c:t~C their hnnk rlcP():,its'> ,A. ()n' \,' 1'(':'1"1'\'(': [ \\(\lllt\ 3lt~' tl,:1\ in Iact :, J'(':'Cl'H of between 0 and 10

i"\' I,,'ll: i" :1'.1' pr''l11'l' ,Il](' \\'ith \\'11i('11 they :,hoHld wnrk ,

(~_ ,\ pl'I'l'Cl' :_,m'?-.\, When p~lr!i:111l(,lit fixes [1 rate of 5 and the hank~

:;ri)iU;li';:-" "i'l! :n :l1h\-:I\' "11' h:l\'l' dccided to rais tl1:11 rute to 10, who controls \he :,"'\1\::-'\: P:n\i,iIllU;\ fi:"cd rhe leg:11 minimum, Parliament never said 10

iJ' b:id>--y,'\l \\'1:,) i::I,\'l' bu'u t']lc\'t\\in::: in the p:Ft 011 ahout a 9 or 10 pel' "~ill' has ,L,'ul.! l'l,dul'c t hal to t he lcual minimum, ;\0 :"\Jeh thought w as in thi':!' ll\;nd~ Thrl' i- ;11H1lhc]' :'~p('n til the m:ttler, if t he hnnk s ('otdd operate ,'1\ :\ n'~('!"\'(' «: ;:. p'!' ('('n, it \\ould 11\(';111 that our earnings n~:,(';" \,'t)u\c\ be just

; ,

1 n~t: n.uen >'':':'-

(!, .\_ .: l!':"!i.'l i)!' f:If'L what j1:1rli:lll!PJlt 11:)1\ in it~ lllind--and I happened

I,' lw \,ry l'll,~C'1y in Illlli'h with jla1'li:mH'llt ;\1. that time-\\'f\S that thel'r was

[Xl r. Gralull1 Ford 1'0,,"(''''''']

"

l.;

~{1111g ttl 1)1' Jt 1'( with lWW iU\'('~1 ('(lll:ldl\"· .. ·;\. ( lile 111~\ [uur Y(

l!, Hi;.:ili', (';lll!ldn ttHln\'

Q, \\'ill ):,

lI11'l'('h:ll1t lHw\' ad, V{iU 110t t, be d'i~('l(l;;illg: t the B:m], of C

:'11', :.!cG ;\11', Cu:,\' )'11', 1\.1:-':J :'11', )'lcC

By j1

(~, When Bank of Can: bank, and eo fixes for hort hnvo inguenC'

Q, 1 am ~\lmcicn t am rcquil'(,llll'llt~ A. EX(,\l~c 111 llll'ct.ing or \ cash bv buv

Q,. I a'll

J1O\\'('\,('L

Q, W118 loan of Ban Canada bill from memo: 19a5 would

fIon, ::'I ;,11', M·

13] Q, :'1 r individual Q, We the Bank (

Q, An that form di::«'losirH! that it SJ1i

(~, Su couple of Q, '1'1 would hal

Q, I of puhlic that ~ol't the point

to In" ~:l n'~,--rVt H'it-Uh8HHH p)'nd-1H'~'«} .ah!.l \v~.~d\! p"rindUH h~!Hk~ h) t'xpand Wilh hny ltl\"'!UhIJi~ ,', iki ~ \\"" Wnll!d !i;i\"\ " t,\I'lwr;d r;\"1\':d 'n:' I'I"'''P' dt~· ill t ',oUld;,'~ :\. \ l~' h'lIr"I, I h(·y l",w texpmHkd \'I·ry jll\;\lly durin;! till' IIiU\,,'i\' 01 ~ hi' !a~t four y{·~t!~:-;.

l~, l{hdH~ _.\r~' the }tanl",., hp~Tn\\'in~ tetra I h;nd\'l' c~t~h :'rpHi tin' l-:'!lnt{ of {·;Huni .. 10-01;\\'1·,\. ::--;'L

Q. wm ::"11 III\, a ~latn11\'ld 01 lhl' hank halulwl',; Ib: 1-. \',p'h "f tlli'

BWTI·h:m: h:HiI" borrm\ln\!. fl'O!ll I lot' Balll~ of ('HlIH.!a :;lllq' wa:r!···A, I would lI;::k yuu Hot (0 ili'('~" !hal qIKl'li"Il. '\lr, :\11'(;1'1'1', b"!':HI-c I think Iha! i; \\dllld he di,.dH:"illj.! 1101' hu"ltll"" of a dielH ill a way ",hidl Illig!;! '('rillu'!~' Jlh'judiC'l' !II<' H:'llk IIf Clil1ada'~ OPI'I":Ilioll",

.\11". :\td ;um: :\,i riuhr.

~II' ('I,KWt:IC (j V(' \I" t 111' yt:II'l~' tot also Uw)'(' can Ill' 1\0 uiJj('('lioll till hn I. :'\lr. KI;<;I.EY: l lnw alll>\ll market transnctions"

'11\ :\kC;FI:U: l um I'lHlling ((1 thar in n minute,

By .1!l-. MeGu') .. '

\~. \rIll'!! you ,,:'~. n~ lin' 1'\·",,11 {ifillt' ('nsy lI\lHl(,~' polity adnp((~d by 1 ht' Bunk (If Canndu thoro hal' bl'I'II no IIP!·d fol' hOl'!'O\ring 011 tho p:lrt of IlII'ITl!:II11 hunk" :md ('nl1~('qm'lltly II') operntion In influ('Ii~;(, Ihe 1':111' i II(' Halik of ('nll:lda fix,:" itll' lmrrowinu- ·>;\ . .111 ,.0 1;11' a" 11\1'.1'.:1111, rarv is runvcrm-d. Bllt WI' !'U\'(' influonced rllt('~ verv '!l\>ull" in other W:\VS.

Q. I am talkilli! :lb.·1l11 till' hnnk raIl' .. Ii j,: iW(,:lU"(' you have supplied :1 ,cullidl.'ilt mnouut of ('a~h '\(1 I hat Ill(' bunks huv« t heir 1'(';'('1'\"(\ ]p!!al knd('J' n-quirr-mcnts fur "(I mnny months in our existence without paving :11l~' illl{'l't'S\-~· A. EXI'II,,(' nil', )11' . .\1,,( h,tl'; we \\,(,11111\'('/' that point. in ddnil either fit the last mt<l"t il1l,~ 1.11' !II(' one Iwfor(', lind it sho\\'l' in IIw record: we did inercuse their 1'!I~h by lmying nrlditional :\;."""", for til(' IIlU,,( p:l1'! additional :'<N'llriti,'s,

l~, t am talkill:; nbnut the bunk ral('.--A. I am not !:llking about it, however.

Q. Wklt ,,"ali PHII' revenue, yOU!' intcresf ('hal'ges mndc to hanks for tho ;n:1II of B:lIIk IIr C:II1:I1I:I hill" durinu the last lIm'!' !H' Iour \'N\I''' 1--:\. Bank of Cannrla hill,,···«d i'nml'l', we don', loan Ilir banks in that 'l,mll; hili >'p('akilJ)! (rom II H'1fI urv I would ":IV thnt tho in:,'I'I':H on amounts hIllT(I\\'i:d hv h:IIII\!' ill

W:~8 would 1\, uround 812.000. .

HIm. )It -, ;;;n:n::-:,;;: .\light I intvrjocr ? )11', )lcC~:~;II: Y('''.

n" Il on . Xl r. :"(U"(1I.,:

ll. :\11'. '1'11\\'1'\''', YOII (Ibjf'('!('d [ust 1I0W to "Iatinl! what borrowines til(' individual hank", have made iWIIl tho nank of Canada '?-:\. Y (''';.

(~. \\'eli in thei r monthly rorms there is n 1'0 lunu I showing advances from tho Bunk of C:l!Hlda·!~A. Yes,

ll. Allli it "lIm\·". of !'OIll'H', a blank, \\'('11 now. IIH' fntt {hat. under t.lu- law that ( .. rm i",i""Hed and lIu·y an- houlld to show it , what ohjer-t inn if' t!l\'l'f' ill dbwln"in~ i!'?~A, Would you not think, ::\JT, R({'wl1:'. that then' is thf' pla(·(, th:1! il shouhl be di"('(o:,,c',I'?

Q- Rllre!\".-~;\_ Fill' oxamph .. ""PP<l"(' It hank 1101'1'1'\\'('(( I'm' :I Jwrind of a ('I,uplp of \\'('{'1." then' j" 110 provisiun in I he law which "'0111«1-

tJ,Thii' j" a pnbli:"lwd return ltlllli(' til tlte Department IIf Iinauer-. 'Yc would Il;i\\,' to ,'ali OJ', Clark" on 1!1:'t.·~.\. Yrs,

Q, I thought Own" mig;.! 111' :,OJlW objection to gdting it, bill it i" a matter 0;' pI/hiit' not'onL \YhM I Hill l.wning (It is t ln- law appnrent lv ant icipau-d that Ihal Hi!'l ,,,' illfnl'm:alioll wa.; propel" informatie.: to gin· !O the public. That j" the point I mn drawing In ynnr aH,'ntlon.-A. That j" true.

#{t .lIt . .1(/'(;(/1":

I~ Wi' wi]] gH ihal 11'11111 till' Pt'j1nrIHlPllt 111' Finaneo through nt' Clarke :'.·,'1\\1,..· it j ... II manor of plIhlil' l'I'I'Ol'd, I will 1I'1I\"(' that. Then, I }.f\VC this (';lIldll"inll; I h,1I in "0 im' HI' til\' hank 1'1\\\' oi till' Bank oi Canada j,: ('nlwrrnod it i,·, not tI!wrath'\· a,. II t,H'tol' of \'01111'111 :I! Iht' pl'e;'t'ul tillll"?"·,,A. Jkellll1i" of (Il(' I'm'\ that t lu- 11111111'1:11')' poliey liIt:< 1-1('('11 OtH' of oxpnnsion, und inlen':,\· rates, j.{t'lwral illh'I'I'~1 1':\1"", un' \'('1'\' nuu-h heluw bunk rate.

(~. W,'l!, in lIny 1'\'C'11I, it '1:< not n Iru-Iur of ('ouil'l1l to·dnr,!--,A. No, noither III Canndn, nil' t 'nitI'd ~tah':'. the {'nilI'd Kingdom )tOI' ill "nnw ether countries.

Q. Xow IIIP 01111'1' 1'1\('\""" Ilf cnnt rul al't' in till' open market operation: thnt j". hll,\'illll: alltl :<l'lIinu: ,,,' 3I't'urilit':<'!--A. YI'':. 01' 01111'1' 11",:('1",

{l, 0 r other H"sl'!s'! ?\('w. wlu-n you hH~' "(>I'uriti!':< >'011 pay in Bank of Cnuml:) cnsh ',' .;\. Y vs.

q Wit h I ht' rvsult tlml I hnt Bunk of Cnnadu ('ush gIll'S into Ow posscssinn of !Ill- nn-n-hnnt hanks uu.l im'I'PII:'I'" tlwi!' 1'1':«'1'\"['" und their pOW!'I' to extend UWIl' bank rkpn"its'!,,~-;\, Yes.

Q, :\ow, wli.'n III{' banks 11:1\,1' n surplus of rush 1'('"t'I'\'i'S oil deposit O\'CI' Hnd aho\'(' t lu-ir 1'I'(ll1l!'I'IIWIltS,,, ... _·A. 011 cit'po,;H with II". I hat is,

Q. On d('llO~il with IiiI' Brill}, of CUllada'?·· -A, VI'':.

Q. And you 1'1'11 St'(\UI'ilit'''. would not !lit' I'(',:ull he an increase, u surplus 1"\'$('1'\'(' hank .h'jHl"it,: 01' thl' ruerehnn! hanks with til!' Bank of Canada '?~A, ?\Ol when \\'1'.;,.11. WhplI W(' ,.;,,11 rlwy I' .. .lueo their 1'\':',(', 'v 1'". \\'111'11 we buy it~ in,"n-n"'('\o;; rlu-ir rtl.'pr\"\'~.

l~. J menu, I 1"'\,("',.\,1/ il ?·A, IiI; \'1''', dnl! i,; right.

Q. I IIwd" :l mistake what I mean 10 :,ny \\':1:' ,\'111'11 you buy you put eash nut allli it sooner 01' 1:\[(01' find" it,.; wa~' into the po":"p",,ioll of the mcrehant bank .. :In.l iIH'I'('H."'" t lu-ir 1'1':'('1'\'('" of I':i"h :md ttin'': them thl' power to ilH'I'('HSe their loans nlhl ill\'p:<lllwn\.< hy im'n':I"iul! their hank dl'ptl"it,.;,-~·~A, They illt"I'P:\"l' ! ln-ir IO:lIl" 01' :11\',',.;11111'111 alld that (l1'Ot!\II'I'" nn iucrvaso in deposits,

(l· Xuw, when Ihal romlition (,xi""" wlu-n- bunks han' more (,:\,.1\ to soil than lIw,V 1I('l'd III servie« Ii wit' cxis I itl\~ hank .1!'po:<il'" would not the result of ihru Imlltl'h 411 ~'OIII' 11\\'1) mnrkctlng Op"I':!lioll III crely I'(',mlt in an inerens« of Ill!' dl'p""i! of Bnnk of Canada rush that thl' Blink of Canada }wld 1\11' mcrchnnt !"m!i:s'!, .. -A. 'I'll!' np!'r:lIiulI, ill lit ... fir,.:!. insraneo. ns vou have poiutcdnuf, that I":, ! III' njli'1':I1 ion !II' huvim; nddit ionnl :'1'('I\I'i1l('". do('" i1WI"C'lI:w t he total of the l'iltll'II'l'pd bank- (':1,,11 1'''''''1"\'1'. '''''l'pn..;!' 111:11 hefore WI' 1\0 a certain onerntion !h\'ir !'('''UTI'" wt-n- III pt'1' rr-nt :Iud that :IlkI' Ihp o\lI'I':Irillll thl'~' 11lC'I'I'1I"!"I! to II lwr 'T!lt-··J alii making: rarln-r ;. l:lI'!!I" jump t hr-rr-, hat I am just doing that fpr Il!II'PO"'('~ !Ii illl,,,' 1':11 iun, TIll' 1',-,.1'1'\',,0' had ht'l'1l1O )1('1' ('Pili against df'p",:il,,; Ih".'1· ur .. nnw 11 P('I' "I'm, In Ihl' ol'dimu'y ('0\11'':(' of events the hank, will then look fOl' 1'1'/,,,11 lllan" 01' Invostnu-nts nn.. ~u!d to their :I';l'let" ill that form. iIHT!'a"im: ~ In' ,h'!Hhil linhilit il.·" at I hI' "allW I imc: "0 i hat hy that 111'0('('":,, whik- tlw sum IIllal of /'!I:,h 1'('111:1111"; 11a, ,:;tlll!' , the ratio nnturrvilv C'l1l111ge,:; and'I\" :l n'~lilt 01 t heir ('~;palldillg operation.; i he ratio will go baek ;10\\,11 again from 1/ /lI'l' "j'nt in 10 P('" cent.

!iii MI'. 1\ in ["!! :

(l· But 11m! "qwlldc' upon Ill!' :d,ilil~' of til(' imlustrie» of tho countrv to ah"'I!'b til(' lIl"IIf'Y'?~';\' It 1\('IWlld" Oil the ahility of the banks to buy investliI""'" 01' in make loans.

(l- But llif'y will /lnt make loan" unless tlwy are ;:oulld'!,,,-A, No.

N!! st». u-c.«.

Q. ~o th:l! if IIII')" han' go! lip to the point where tiwy have got bank depo .. il" io h'!I!!"~ ~A. \\'('11, t!wy do 110/ lend tlu-ir dcposit s, of ('0 lII'})(, ,

r:~h~. t j:fah~Hn F'.,nl Towvr». r

t "

'1

t

Q. Wi bilit;i(~s'?~, q. T,l Q. \\,1 or Cunarln iuu: !llP dt WI'\' of Ill! t1w'r ('flllll!

. q. ¥l:

{~. I i soun·t'''·~ll they have. 'Q, All an' not n v huvo tunx

Q. WI illCfeHSill11' they ('an'l as vou :,:n :'eait·, IHW;l fme.' whnt that bas l» in this 1'0\'

Mr. (

Jj

Q, If mont bond the Hlan-} banks \\'/'1'1 to have tl Decem bel', CUlTNJt pt S80 l,O(JO ,01 han' aLo

1

n

Q, HI i ucrcas« Ii Most of tl Dec em her $806 J)(JO Jl1 ]936, HIHI place was purchase (

n Q, Til Q, '1'11 at the (mel mont.

Q. w economic Increasing mcrce and Mdlc{'r. n

~-

IJ,tVA'ISt: ,-IX/) C()JIJI/:'/W/(

399

t

\1· W('II, thaI tilt'.\' ('(\II !lnmll't' )HIn'hnsl'" hy il\l'l'pn,;jllg their (h'llI)i>il IiahUit1c,s't-A. Yes,

(~, To tlw p\lIIlie lit lar~I'?·--A. Yes,

q. \\'!I(»I UH'Y h!l\'(' got up to that point. 11 u- 11 t h.· Iurt hl'l' i"stw of Bank \II Canada rush to iIWl'(':\l'P !l1I·il' l'I)';I'I'\'I'~ will HlPI'd" hav« till' PlTC'l't of inereasing the dVjlll"i! of I'n,,!. with till' Bank of Canada ~Yillt 110 m-w (\I'jjvity in the wny uf itH'rt'a~ing IlHwing'?··"A. You menu I hat I hI' hanks Hl'l' HI n poinl, ",lwI'!! tIll'\' ('1\111101 lind uddltiounl i\l\'p>5tllll'nIR to buv 01' loans to make?

. Q. YCii.··-A. Thn] would he tho (':tH', But'it hn,< III'V\',' hnppened so fur,

(.l. I HIli infOl'llwt!--ulld 1 hour it 1'\'('I'ywheJ'e 011 (,\'PI'Y day from bunking SOlll't'l·,,·-thai the bankurs hnvo an ubundanco of IIHlIWV to Ipwl?~~A. Indeed

they have. '

• (.J, And that the rcusnn why I iwy I\l'P not 1t'IHling it j" tlwt good 1>01'1'0\\'('1'8 arc 1I0! uvnilablo. \\'1\('11 vcu hav. that ~illlnllnn---~ --·A. That IS wily the banks

have turned to invn~t\Uenis. .

Q .. \\'lwl! ~'nu hnve Ihllt, situntiou existing, 1I\l'1l there i~. 110 advalltage in increasing the hank cash 1'(':'('1'\'(':';, beeuuse OI(,Y have nlreudv got 1ll00'(" than III{'Y can us('·?-·~A, The nd\'l\lItngo during the last \111'('(' 01' 1'0\11' YNO'S has b('('Il, {IS you SH)', not ill the direction of enabling them tn inrrvnse their IOHns 011 nny 1'1'111(·, bwuuse Ihl'~' sny Ull'Y hnve ))01, been nble (0 lilld good hIllTo\\'('I':;, 'I'hcrcfore, whnt IIH'Y han' done i" to inm'p:l;;p thei r invesunonrs very gl,\,ntly; and tim! has been a major Inctur in J'('lhH'in~t the ('!lSt. of public' and 'lI'i\'nle fill:uwing ill this l'OUIIl!'y timing the lust row yCal'S. ' .

Mr. CU:,\\'EII: At II J'('lilH'pd iJlI(~I'('"t 1':111',

By Mr. McGecl':

Q. If you issue new ensh, the banks 111'(' in a position to buy 1ll00'(, governmont bllll(h;'!-~A, 0,' 011 oernsion 10 lIH1k., ndrlit.ionnl 101111:<, 1"0\' example, take tlu' w:m-w:Js perind. You will lind in 19:J(i tlw tutul sceurity hnldilig,: {If tlio bmlks WPI'(, Sl.a~H ,(lOU,OO!); I hut j,: I lip :\\'('I'i\f.W dul'illg (hc· year. I do !lot happen to han' th{~ December figure here at the IllOnH'1l1. EX('WH' me, I 11a\'\', III December, man. the ;;('('llI'ily holding,: of the hanks were $1.384.000,000; their current public loans wel'(, ${}75.000,OOO, To-day the (,III'I'{'nt public loans at't' S801,OOO.O{)O. in increase of <;;~":(i,OOO.OOO. nuring thnt period their Sl'('lll'jt.ici; have lito im"'C'IlH'd to It certnin extent.

By JJr. Clenucr:

Q. How much i:< the increase of :'I('('ul'itic:; over the sumo period 1-:\. The illl'I'l';t;.;(· of securities is from S1.38,l,()()O,OOO to $1 .489,OOO,OOO~S105,OOO,OOO . . :\10;-:/ of that incrcnso has taken pli\('(, in the fil'"t three months of this year, At DCI'emlwl' In". tlu- soruritios W(,J'e $1.4n3.000.000; the loans al that time W(,I'I.' $806JJOO.OOO. But it j" the ('lUll' that in the t\nl-Y(,.~ll' period bel ween D!'('('mLC'l', 19:m. lind December, W:J8. the inercasc in the ehnrtered hank cash which took plm·p was HJOre 11;«,11 in the financing of arlditinnnl loans thnu it was in the purchase of nrldi tional securities.

lJy Mr. McGeei':

Q, Then it started to fnll'?~A. \yhil'h "j artod to fall'!

Q. Th« Joan:;'!-A. 2\;'0. The 10Hns HI the ('Ild of December were 880£),000,000; at the end of ::\Im'eh they WI'I'{, S801 ,ooo,oon. That is, roughly, a seasonal movement,

Q. Wbat 1 wanted to get at. was this: Due to conditions of the w.;cerai economie sitnntion. the opcu znarkct operation of buying is not effective in im:rl'llsing bank Ionns for general ccnnon.ie developments in the private commeree and iudustrv of the nntioll'?-A. That is not what the record shows. Mr. :\'1('0('(,1', ns I li:w~ just been quoting.

~oo

IJ Wba! I Hll\~.'''t 10 \'oll j, till." Il)al all ill' th\·~t· lOnlj,~ poult! hn\'(' boen ::':i,i, . .\ :\l:t\ I ":IV ,h'i-. Iha! if ~h(!'\' had hq'n )]\1 itH'l'f':t"1' ill lhf' banks' ,:,~h ~'"dY, ~ilH;' Ih'\,~'l!lht')" 1\I;~Ii. It i~ pl'nlwbly IIii' \,lIH···-lIUd I think eel'.

l/w (';1:'" th:H Ihn~p lnnll~ \Vlluld h:I\',· h"l'll IlI:Hk in n nv «vent.

Yo,lh,,1 Ih· :1('111;;1 i'~'I\' pf Balik nf {'H!i;"la t:;i"h wn~ nOI the

:nt!ltt·Il<'IHt:· ial·!!'r:'·.·.\. Thp,;,' 1\l1tH- \\,,"It! 1111\'(' b('1'11 lImd\' ill lin" "\'I'IH; but \\ha~ wUllidha\Thuppt'lH'd in Ihal I'i!~l' would bn\'(' 1H'I'1l liIal lll"INld of the h;d[i\ - vinu j,nudl\ ~Ollll' :Iddil IUlIa I "'('1' u I'll ir-s, tIll'\' "'nuld ad uallv have hnd !,\ ,..II a i:dl' :i1IlU'dIH III :-(Tul'illl", I .. IT'!U('I' iln-ir pnj'lfnlio., Thnl l.i:ll1k ""l!illg, ;;- ,'mJiI':bkd Will! "'111'11 huv.inu u- t lu-v did~·-dl(' lIil1'(,),('III'(' will Ill' 11('lw('('.11 :h,·,' two .'Xll'l'!lH'i', ~" hi' :;'" II it· 1Il:1I1~,:' i" ("'ll1'f'nl('./<··· would. 1 i'hllllld think, h;, ,',. had a di~l inrt infhwrH'1' on illl ('Ihl 1':i!I''' nil pnhli(' lUll! Iwi\,Hk ubliga t inns.

t~, 1",'(',,\, :::PIIW in'opl\' Illj~!IH say iI nrtuallv would hav« hl'PIl h('llel'I :0111 Ih'~ rwn'''':trily "IH' pI rhom: I am Hilt "XPI'I'''~:lll! a 11,\' opillion.i:' interest t:l\,' on ;,;nWnil!Wlll :m!! ~IH1I't-t('1'll) ohliuntions hud gone Ill',

1~.1t l'!',.hnhl,'· would 1111\,1' 11('l'Il Iww'l' if (hI' bank .. had tukr-n :iOIlW oftheir !.'lll!-!t'TlIl ~n'Hri !l,'~ '?.\, Tlu-y lia \'t· Ant jll:I(';i('a n,\' none,

Q, Pra!'li!':dl~' no Illllg-I!'I'lll H'\·Ul'itit·" at :111:'-··:\. Xn, PI';lI'lil':Il!~' nom', Q, In any ('\'i'HI. it would 1lIl'l'ply han- meant tho transfer of tile earnings 01 !I."", ""','uri\\,> In t h.· I'mllillg~ nf :,onwliOd~· who would have exchanged It ~:n·iH!! ... :WI'illll',: d('lHI:<i! for tluu :'(·l'll1'it~,. if they had gone 10. t hc pllhli(''!.~'~A, That b 11'111', II would, nf C'(lIII',o{" haw' :ldd('d somethiuu to tho ditlkultiC'A of j.:'IW"I'\lHH·nl~ In Ilnnncing , and ~1;\,I'rlllll\'lIl" wouhl Jilin' ilad to P:l~' somewhat mor«. Thl'l'p lll:l~' 111' :l!')!.\IIlH'nt~ on hilI h ~id(·:, IIi' to 111(' heltel' policv,

Tlu- ('11.\11(:\1.\:>;: fh'llll"!li('I\, it. j" -ix \1'1'1(1('1.. I i'IHluld like' to ask the IIl'ini"B HI' lh .. j'''11I11I111:'1' a" In liII djll~ tu-morrow. ~I!', :-;It.'\'('II'' and :\11'. ,J:H!lWS :11'4' wiiiill;! 10 :tHt'nl!.

,\11'. KI:->LI:Y: '1'1,,· lHllkl' Bltt'l" hHIHlIT!I\\' "",riling :mol aiternol1ll. ::\Jr. ('I.L\HIC :\Ial,,' j, d\'w'lI n'\,h,",k.

::\11' . .I.\\1IT:-;: Th:H i~ ;11!n'\·:.hl(, 10 lilt'.

TIll' « 'il.\!IOI vx: I { 'IV ,":l\l j:!!'l ;\ qanl'lIll1, Wi' ~h;dl nWf'{ hH IWlT,' 1\\' morning ; who Wald It· :llkll;! llH' l:"I0·+ ":111 allt'Hd it. Tilt, 1;011:'(' \\,;1,., meeting this ~i ft l~rrHfOII~

{~. :\1 Stl'\'I'l1~ I 10 Mh'!, U,; 1 (J tl If )) intt'l'est t

Q, 1 tnont ,-.~A. on tll(' mr

Q. '1'1 Q. AI Q, W

I wns Bug Silt t om (111 I

TIll' o'clock.

The 4 {Hh,ntll

:\11'. :;\1«< in:u: I ,.lB'ld,l lik« 10 han- nit pl'ivih'!!(' of ('ompk'ling my exam;1;;\1 lim "ll tli;il 'pH'"lioli pf "Oli! rill at :'I)IIl(' 1:11('1' I imc,

"flit' ('1I.\I11,\I.\:';: \\'1' wil] finj,.:j, if now.

)Ir. I\J~u:\; Bd'.!I'l' Wl' adjourn. 1 wi,,!; In snv t hut ::\ll', :;\IeC('(,l' and the nIdi: !lif'IL 11'1', put lip a ruu IlW II I "",hi,'1l "~'lJwd to <'lrde arotuul what I" known ;1" "ddj,'-f.,(,(· lllIllWY", H('n' i., a question OWl j", being put up to 111'

b,\' 1'''''1'1" ill iii' (·WlIlll'y. :-'III'P0:'('! In' Canadian 1\:1\ ionn] Hailw:l~' wanted SIOO.O!IOJIIJO 1"-IlIPl'l'oW, wnntr«] hl pay nl)' :t dphi !If 8100,000.000, and tilt,)' (~;ijuc 10 \"'ll awl ... :tid. "Her« al'(' ou:- hruul-. '1'111':"(' lin' til{' bonds (If the Canadian X~~iinlwl lbihmy", You 1:11\\, IlwlH in till' Bank of Cunnda (lud YOII i",,!w your ",hidl j" 'imt'l'l'-I fn'(' money, :md pa~' tip their hills fill' that IHOIipy." il. \nmld 1)(, \\'!.I! if YUH eould It'll H" at the II('XI meeting '\'hM would hap-

pn, :( we lrl!'d III J" Ih(· Cnnudiau X;\lion:d debt by depositing bonds with "w, :wd a",king: i\'!' ;;dllt! Canadian money to pay out.

::\k TII\n:H";: ,\,;imibr I hinu, I I hink , i" on I ln- n!-lIrd; hut I "lwuld like /1, k.pk ;It it und "I.'f' whet Ill'r. in d,e light (If yUUI' quos ion. what is already tlWI'C ~lm:dd Iw I'xp:llld(·d or whctlu-r !Wrh;\JF 1 ('(lllld refer buck to it.

~Il'. KI:\/.I:\-: Yt·". It i", a «U(·."11011 tiwi i:;: lx-ing asked.

:\11'. Tp\\f:!i.'-': f! i .. :1 In,,[')Il;Hilig thought. :1" a nuu u-r of faet.. )'If. (;~ ;d":~tn~ r"~~rd T(w';,"(.r·;,~,1

1

l

401

hI:.," \i\nk$/ : (clT~

tiw hut II tiH' t hnd 'lUng, :WN'.n

\link. tinns, li'i'htcrcst

t

nfl J[I\ .1l('(/(U':

Q, JII'. Tow('",., 1 \\olll!r,1' II, ill til(' lil-'ilt \If the inlnrtllatinl1 "'hil'h ..'IlL $u·\'('o,;. l'r()dtH'~'d, ~'nu nHlld not :tlTUIl!1,\' 'hrmw,h '"t' Lh'jlMlull'lllnf Finallt(' In gh'(, H>' n >,fat('I\lPllt til' till' 11l1!'I'O\\'jnn" 01 ilH' bunks 1I~ (he;' hilll h('I'11 1'('llll'lH'!1 to the Ikpnl'tllH'lll. of Fi1laH1'1' ~inn' tlw Hank or C:lIlHda uptmed, with flt'.) interest that h.ts \)('<'11 pnid for ,.,wh l\r'I'I'(lwill!,!"'/"":\. \\'1'11" ... ,.

Q, I 111"1111, I nm ,Ill:'! Hll·\}~I'"Jing,thul YUH 1'IIlHihi :1I'f!ltlJ.W 1'.1 /.\t'I (hai ~!nt('. nWIIL~·":\. "'lllll till' gO\'PI'llllwnt would han· would hi' j1lH dill"\' fi,!!;ul'l'" $lIn\\"11 on thl' monthly return.

Q, The niol1thly return would be IUI·d?~·-.\. Yos. (l· And the nnnunl SIIIWml'nt ?-·-A. )'1.'".

Q. Wl' haw not gol tllp fn('ilili('"in thi': ('nll)milln' for doillg (hnt., so whnt I W11g suggestin!; wns that yuu might :U'r:nl!~I' with 111(\ dt')lllrlnH'fll, 10 gN 11" fl s(nt(>ml·nt.~-A, We will do Ih:1I 0\11',:(')\'(':',

The Cn.\1lt:\IA:-\: W(, "hall adjourn until IIHll!HTOW morning nt ('1('.\'('11 o'clock,

The ('OHlllliltt'" ntijow'lll'cl at 11;(1,) p.m .. In meet ngnin on Sallll'd:ty. }\fay 6th, nl 11 n.m,

their

ne, ninc.'~, :('(f 'f, '~A.

~$ oi wlHlt

: the Iftm'~

mm-

!he \'har (\ Uti nted

'I

1

:tlIu:~ <fhm

~-OUi' !';'t. " lItJ.li\'l!h

like

't,'!'c

1;~TI\l,\n,: of ~E\\" VIIS!'" ;\'ITHIiWT.\IlU: TO FOlUI.\TfO:\ OF IL\XI\ Ill<' 1\\:\.\IlAhl/l YE,\H J\i;18

" • ~ • • 0, < _ ••• "

kHi!'i. ;;,keH !'\'~'r {r.,m nh'

hr Cut'rNli''\" Il:\"~l'!ll ,ild Gt'lh'Lt~ tht~!u~h';l~~ -,--;ifi;Ff,a'

,,!, bH:ns II, IHUI,,; :13

i' Cltl3.:l3il 40 ao.'i.1l30 13

..~.--.~- '$i,O:.Hl.lt15 53

'" 191,(102 04

;H~ rlhuh:;hh .. tt) h,·W il'"Jql'hlh-hts a Hoi d ll*'lf,~jU~ ~~X,'t·nl i\'~~ ~)j" 1i.1uk

C''''''''''!''h!~'';lXl''S-~ ...... t~,.,~ •••• ~, .~.~ .... ~. ~,_ •• " •• ~ " •• ;,~~ •••• ~~~~~ ••

"',-,uI;! ,,'nJy ~l}t \--~" het"u ~)It~~, ~:h"'!1 1 hh;Hj~ h "-_~~~(;,ra: ~'~n ~~f ! !It' th~W {.tr_;.!'lh~ .. ~a a ~on ~ (in~ "~Xt"hhll',!i lllh·h;.~t n~l ~ h\:~~~' Uh~tit_s ttl' ad nUii'/~H hi d~a 1~t.:n'~d hnuk$)

431)$15 60 :?l:},HH 1il

..•••.... , ••.••..•. ,~ l!l(UltlO lH

;"hh·.~th--"~; !"~ ~-h;H'h~r~l;.! h::l~ik~ ! :lh?- tlu~~r :HUnaul i~

.. , '" ". . .. • .. , '''" M,3!llLHU at

~-;'\'1;'r ~"h'~U !h~· (;;',H~~;'flH.hHa ;J~

, " .. "', " ... $L2:W:iOil ~7

""' -........ S!l,!l(l$ 11

1;1; ... ,111 IS :U!l~ 5:1

l,Illl.IHl 3t1 $2,!'!00.535 25 HIO;IlIiO 8~

-~~,~,.!",.~ ,,,E k~~~ :;!jj ;1-~"'~<~,,,,",. (,~" rnt~-·n~,~;,~. ~Ih!~h~ud~ ~g:ijd liI;:i~\'nh->jr~t~ .......... ···· .... ···· .... "t2.700.!l.-141

lfH'ti~-: i~f h4,if.~~ilh_,.,-~" !,," ~-~ ~ljJ~:~nt~n S':-IjiiH! ~.h-o ~rui'k,"r ~~ lHuIJh".';: ~'~f Pn_wh:~«IiHCi> ~-IHd X~_'·'!.\· ~'Q"i:~ ~~-" f_;-l!iJ1',.--~ n~nwHt

J J~tto:~h~tr ~~I~~.j

;\1;" L

P Jt"iio';j r .. ~ ~ ~ ," _ ~ i).t"?i§l!-L< (J~d n~-~~--(~.ne!lh~t~t t!.~-ll:it J"~~;~n~~:.~{'-d "''!'~;':H-- ~

i;" "J4"ia;i~ ;~i'

~ij '- ;l~:~ f;j~r

!"' li';"I~ ',,( (";~'l,i;; di~o"ihHtDnl! ll.'iludh., ""'~'("rHt j~a! ·Cor·'f"!im~'-\· '". "-""-'." G(~R~~!'lo~ll (.Jln~_,~,~ ~ ~~ i~~t_, .. I'.~~t ')!"':-llild_

.!,OH,O;H

l'llO.lUJO 22!l.(WIl 1:15.740

hrt':·!.\,· i' ~,~it tall n~~'"t~rnn~fi~n«" 0 " I'H'~it ll!:lllk ·Jf c.m,,,hl J!)3ii .. d~·'i.-idk;n(i.i,f p;~id '(i'~ J~Ii.!ih!Jj{"

$2,;150.0-16 IW.O~1j)

~2,3'W.455

$ 34,591

('upy

C. 8, \\'.\1 COll[1 J

Dt'!ll' :\11', I no!

Publie .\1' .~ald:-·",

TO! '1'.1 ~Ir.

mus it ilPj)(:a!'i'

III r Iii (ion'J'Il11Wl and Iinnn«: wo J'rndi'l' pOMd hdol I his j,jPll'i\('

the provln inurke; up, :idyi:,!'" of GOV(,I'llIJH't:

Will v thaI YOU!"

Copy

Jk:Jr : until tn-11m Gammell. ~. {j,"id('n{;(~ ~ji

( A.X

t

I

(\m\\~p"IH!t'llt·1' ,'xl'han!!I'd IWI\\\"'II :\11' U. F. T"w,'I'~ nwl ~lr, C. s, W;d!~.I'''' ('0111)"011('1' of Fillalli'(', 1\'" (1:1I :il'io

( 'opy

B.\XK or {'\N.\ln

C, :4. \\'.\I.n~1I8! Esq.,

Cnnt roth·" of Finlllwcs, Pl\r1~!~nwnt Huilding,:i!

l'orouro, OIlHIl'W,

J)NU' ~Ir, \\'AI.'I'fo:Il8·

I IHllil'l' thnt tlw Caundinn Prr;,:: Dispatch ("tln'I'inl!; the tn(wtiug (lfthc Puillic ;\"('01111(:< ('nlHllliu l'l' oi Ill(' Om Hl'in J."!!i:d:ltlll"l: I'epnn., y.nl :I", ltaYinl.: ~~tlid :-..-

In 19(1;3 Omiwlll '1'0\\'(-"", (;11\"1'1'110)' of IIii' Ibllk !II Canadn. j'HIU(' to Tmo!lln awl in Ihl' lW('Sl'Ill'C of :\fr. Nixon :Ill! 1 Higl!wlIYS Mini"lm' T. B. ;\1l'QtWSIt'1I :11£1'1'(,41 to buy 0111:11'10 1'1'1'11:'111')" Bills, :\ week later, ?\lr, \\'nitel';oJ "lii,l. ~h. Towers told him .. , 'I'he Balik of Canada would Il\'\'\,!, huy nnl nriu Treasury Hills ('xe('pt 'n:! an OJ!t'll mmkN u':m;-;rteliulI."

nm~1 1lI,""UllH' (lint )'011 iw\"n been iJlNU'l'N'liy I"('porled n~ Ihe :oil.IIh'Il11Hlt. liS

it :lf1P"'lIt:" :l !JO\'C' b nut I rut .

Iu III(' di"l'u,..,~iiln which wok plnrr in ~I;I~' ]fJ:J5. I ,..,t:H~'d. ihllt if fit(' Um','mml'!H (If Ollllirio ,II-toldI'd ttl II:'!\: tIll,' Bank IIi C:wn!!u 10 net :Ii it" I!"nhl' and linmll'inl tllh'!Sl·!'--·in other words, HI pl'rinrlll~el'\'h'('i' ::imil:ir h) tho,:\' wldcii WP n'll,jPI' ,ill' Dt"llinifm UlJn'nml\'IlI····~1 w!luld lit' J.tl:ld in by :lily "::11'11 1'1'0- jw:\"llwfm't om' Ho:ml. I nlw pointed out 'lwl if W(' Ii:!;! !HI rt'iali'lIi8ilip oi Ihi~ dwnwwr wHit Ih" Onvi'l'IlIIwm Hi Omnl'lo ,mr df':dlll~ii in lin' ~I'l'ilrilk;;, <,. the province wduM IHtllll':llIy lit' ,Ii-I ermined by till' 1Il';;!'''ii~ ii·:" of !iur oJwn marke: IIlwl':lIhm". Xo pmpo;,ai .hllt wr "hOtll.1 :1(,( IIi" h.IIIIH'I' lind nllandui mh'i"wr n( ! Ill' Pn.n·i!w(' of Ontnrio has ('n'l" Ill'!'1i 111:1<1(, III U'" hv Ihe I'Hwilll'lnl

GnYil'mltlf·:H. '

Will YlIlI Jli('lI:if !hl\'i"c IIW hy wleg:I':un will.'! her 1 nm right ill ;lii'.i;umillg tlml ,"lwr n'm:Hk~ W('I'(' im"I>JTt'ctiy H'pnr!t',l

Yours truly,

G, F. TOWEHS.

Oxrxmo ()FFln: Of Tin: ('O:\,TIIOI.u:n OF F'X,\:-;CI:;; TOIl!)XT(I, :\pl'ii 20, 1939.

DF;U' ),jr, Towsus: Bn'<HFI' oj liw pressuro wllrk. T have h""n tillable

unt iJ to-day to en'lI I'('wi your id tcr Ilf Aprii :lbl ii, svut to me by )11'. H. G. Gmmm:ll, YOIII':';!·tllrHie" HI'}U'(·"t'IH:ltin· here. For your iuiol'llliHion I quote t>\'idl'm',' giW'll lwf",'(, ilw Puhlie AI~l'illm!" Clmilliiut'!':~-

BlI Han. Mr. Xi.ron:

Q. Did Ilw B:mk of C:m:ul:: tn'!' huy till}' Ontnrio Tn';Ii'llI'Y Bill.~·!--.\, :Xo.,

1('1 !JOII, JJr. Jl(l('lw/.:y.

fl .. Why ;/0 yon no! 11,,(" ill!' Bank of (';I !l:~da in your fin:lIwiai flp('nnimF'!-·-A, W~· Iri!'11 an UlH'!".

403

(i

,

r---~ .' ~ 1

I, \L:

"on :,\ 111 W:l;; ~h Urnlwm Towo-" i~llllh'

"linH,": ~I: Ikplmrn 1m.; !n huv Pruvine«

rna .• my H;;;~ ~ I han· 1"'\";\,,", ~ I j:iumw(' Coin-

;,~ lin ;,W;, I ' ,"ad "'I', :\i:vm \\ ;\" ~h"Qul'-~ttl'n',~,

HBed~~h_-- .ttn~ t::-i'~ ... ~t_~\\"J~ ro Iusi u :-,.'.~hd ~HI:tifr~c"-·-~~lr; Tnwers

. . J~:d,!. ., \rllm nb,jlH t T)'\'a~IHT Uills," tmd lit'

',r;n !<I'll' I H"iH!N',,"n up 11(');: wNk'" tlwl IhlHh'l'JWIl e;ww miNi 'Will, ;md ! la' IWXI w\,tk I Imp" :;,..;;·Ii(ttd !~H~ lH {"ona.' diin\"H n~. ~ hf' l(ifJY:l! lind lit' IJw~ It. Bililk of (':lII:ill:1 ~ hI" p!W"~II('f' !i~ (lhl :Irh. lXI'I'lil a~- nn

~t~~t_f U!d'-f-~ hnn. I ~:(W

\\;vlu~d J~I"\'._"~ hH~\, ~rr[~t~Hry J~H~~~

Lnl,',· ,'Ii in !!!:' j·virk,w'" I Wa~ :hl,pi if Jim" I'nr ~', IIIH'IW'! live mnllN',

Th,' :~ ;P' i,,!low!>

lIu /1"11. ,111', .l!tu'l!ll/a.!I:

{J, You Imn' H,-Vel' 111'('111"11 "I' IIII' :"ul.j,·,'1 wit" :.\1:'. Towers or Ih(!

B:wk,,( em!;!;!n I'll;lf\:·, .. ~;\, :\'''. bm I han- uWIlIi,mNI it to :\11-.

I humin:.:.

Q.~rh:~~:inn III' ~ay.:,-~,\. ,I.. '-aj.i Ilml JI!' ·lj.j 11<" ill I prll'r\- will. IJ:H~l~ p~ (:H~n~'a :la :lIn..

I~. \rpil, 11)1'\" .. WI! it, do dw\' nm ? ,'A \""". twllthe U('\'('I'IHnenl '.11\~ ~dll,.\~;'~\~?'o I ~fl~~~ .'\~f ;;;~ L~- ir,t~~H rn I "ai~i\ 0

You H with :\IL J)mmhltt nnd III" ;to':dd that ill:" would

III'! wid, )k "1'13\\(-1'< m:W:'!!I'IIWm ii! til(' HIIIlI. IIi f'nnad:t ?~.

1,1· )lid ~'''!l ;~ l:il(T wilh).tr. 'I'IIWI·I''''·?,,~A .• lust in fI !'om~

Hthh~d-~ .~Ut·i~ :t~ Ihi~~

Q. Whn, \'kw did ~Ir. 'I'OW('I"" (-XP!h.i"?'--/\' \r,'11. )ok T'1WI'l'S !l!nk liw ;.I:md tlw~ r ;"'~ wi~w""11 nwl tlW! i'i did not pmmise w"lild hu\" dw T"":'-Hl'Y [hd".

n Ynll ' Ill' 1m.! IIwh'nd;f'1l dw-- ~~,\, If!' did, lind

1\\,;,.:\'1 t ';lhinH 1"'111"01 him!lll' j!'llol8r:!hl{, )k Xixon and

Hm,nlll'lIh!,· )1r.~~kQm·,.!t'n··-·in Xlr, n"pIHII'Il'" OnhT.

Q. lrlH'n hi' W:i~ IWI'" ill .lmH'. W;Vt'· ..•. ,,\. Y"i',:\llIY 01' June.

Q. H« ·!lIlII·.1 I!W! :', :lll'llli'lH ~'.;\. I h' ;c:uid I mil'lIIl(h''''''{OiJli him,

In lili., !'.'mw('!;'m h: mI' ";1\" ,h,:H I Imd ll'n!O'!lnillJ oi JIll"ntinnillg thl' th,' p,,!i!i,' ,\,','n~mi" Commilii'I' \Ilk" qlll'''lIlilli' w('r(, put In me

W Ilw rlnu I .!!IP/;:·

~ .. m<' f,u'" ill ,-,m!h u ,'lh'll v, .:1: ;iii..: husin ... '" !'It!ll<l m".'~11ll1(' flnd I lakr n~~~h-_~rtuuhY of lnennnni~l1~ th(~Ju: OH~\~ are h.~ follows:

r. !'iii :\In~: -l, H!:-~5, I \~'n'lf .Hm 1'('!!;;I'''ill~ Tn'll~UI'Y Bills (If tlw Pl'iwinrc ~I.:O-: io~h.H\":-> : "'''cec

Tonmlo.)lay 4. 1935, nUl! f:m,-~; fUn din'('lhi h~' rlw HOllO!!: lbl(' til(' Prime :Minister :md Pn,dndal ')'!'!'w''Hn'" h. wrir» you in n·.~ll!'d ro TI'('llmry Bill" of P!'!I,'Jun' nf Omm'i".

),'.1 I :.1, (1. .\llnid(T 011 ~Ijwn my IdlFi

;3, UJ tUlll ?(-Hth th(· HwUI "{'Hll ~'OUi of tJHj !H'l

oflb.'. lho; Ill! l'ell U \',,1

5, N( me aud II whit-}l I d Ilit! Tn'a,,;

ti, 'I'll Jl,llr('jill~!'d IIVlll'UlTf jlolii'Y III' t

1\O!H(It,.' ;Hi iwti Wiry lilt' 1

In 11 I

l't'~J)Oll~it)11 BIWk of C in"llllll lOll, ",hoillrl In' 1 tli!' Btlnk ; tOHddm~ 11 ['nH'ilw(' 0 Himk of ('1 l'l'''P'lll''''lhi Ii jf: ch_tt_IH·!d I

{'OHmer to Bi'i tilt, nnr ]lnl~t (-"xt'rr

~11r-f·iv

~'_,di-·i,,-

{''''jid:llulyt cenr of lh Bank of Ci long HS :,'OlJ

\

:\0 !T'II!~' iii \l:ri;mJ,': W;i;~ ,'n'd,,"!'

:t On :'\1;1\' 8. lOa;), I wn.!;.' In IHlI,wm ~"m 'hI' IIwww',lhh, l'riw,'

),lil)i~h.'i· M f)~llnri" !~!"n!bllw,1 Ilk' ;8pPt,imClwm ITi> ''0''(' \'io~U aiud"

ma ::',litilldny. ,\III.\' I~, ;H Ii :L1n,. U,!\'li$!.ilE Tilll~'. YWI

my Ii'll,,!' n:~ j!tlY I:J,

!t fIll )Ius IS. 19:J;i. yrlu ktlH I npPuluUIH"m, md nk'

mid 1'1I1!l!' III hi" (':lllitH" awl ~ In- \\.Tih'r ill ),11', H.'niluml','; "m,',.

thi' m'Wt'I' of 1IIII"'hnJ'iuj! Tn':h''HOY nm" ',\';1." Itij';j'fj'''f:! Y"QI"dd I

l'!'lld )'liur IIlllIi Ih,wl";';'''!1 up hl im"I'\"il.'W liit' t!w

~lf till' pm\'hH'!' :1iI!! II" IIlId!!"1 'lt~ .

. 1. Sluwliv :if!!'" Ih,' ilH;'I'dew «n :\Inv IS, m;;.1, iI,'ll<iN';4,'Il :i!len,k¥! :11 Ll\' nlfil'''. HOI'1lI .~", :iSL Pmlimmnt BUildill\.:", liW! Wit" ~h'l'll . .11 Ii", iuf"!'!llH!l"jl hi' !"'qll(".",il',l

5. NUl long :111"1" 1\1;" H"mlt'I';o'fm'" yi...il WlU I\Y'I"" ill Tnnm~" :m.i ld"nl~"w.! me nml lIf.kt'd'nH' tfl NIH to ~('(' YOU n~ \'Ii!Ii· !"@W ill 1111" Hoval )ork'll(,!!'I, whh'h .f dhl. wlw/l you ;UJW"lIli'!! illt IIw,' lie(' Blmk of ('HIW"ht wl'"I" I!OI,i.llY nit' Tn'""m'Y Bm· ~,f Ilh~ I'nwlIwI' (if nUlnri.(,

ti. Tlh',H:mk III' Clwmln 1m,; u,,' frilll! :lwl d;iE!' I;p. HI !lit' 'H'e~!"IH,UllW jJllf('h:a-!"d ( r nm lin' P!'nVi!ilT Ill' Oii~Hl'lll unv TI'WI';OU'\' Bm.; n~w ~HH!.i'l1 Ihl' T~i.·U"!UI'r 1'1 ill!' PI"I!\'I!II'f' Wit lilll' 10 ,:.tiw" ;mv iw!it',:idnn a" to wlwdwr fJil.' "I' llw H:mk inwal'd,~ dh' Plu\'im'I' 1'1 (hei:ll'hi h:HI !.i-I'H

XiiIII' ~!f Ilw alwt,\, fill'l" ('Unl tw ;'i1H'i'h,,(ullv dmllf'uge,1 ;md !iWY iwiil'lllt 11,," .,Uilwli} hI" tlu- B:ml, of Cmml!:i (mnmll! llw1in"wil'l" l'r;I\'l!w;' of I Iii'" 1"1.111;1,'),.

Wh.\" IIw Ik.nl ill tilis Mtilwll' pll"'~t'" my !'!lmpl'd~(,Il"ioll.

III :! mwh'~1 wav I 1111\'(' 1.'(1\'('11 I'O!110 NJw.hk·r;'uoli In II,,' fundil!lI:l awl till' ,,( a "-"11""111 1I:;"k and I mhmit fm' vuur (·;;lhidtT:ilim. !hm, • .11(' Ihmk 0; CHllmi:1 "lioilid !!i~'c Inkd!'l',;,ldl! r.., !III' ,-iwrl,:n'" hanks and tI:,. fiualwial

Ol~; ;-OIW!IT dllrilll,t Ih':~r jlTiH~ lillK'';; Rill' m!i;wk I.e Ill<' B;wl.:

II(~ ht·i,dnl:md iti' ;"dnlhm~ with !I,,: pr,j\'!Ih'i:d ~il\'t:I'mm'm" IwrllIlHIlflU,.; !h.· B;mk "h!luld nhnn'" he I"(-ndv 'n .~i\"t, i'\·mpalll"Ii.. l'oul"iolc'niioll !II InaUe!'" hl!whiul! aii!' wdfan' ;d nuv :m;' Ill! ' m,' di""rimilJ:uiHt(' tI;;;tin,,' ! lit' Pm\'l!i"(' !,f Onllido. :I'" hll,c' dw Balli. lif Cmwda, .\ hI'!" nll, Illl' !wopf~, own Ihl' lbnk nf ( ;:111': [1.(' FI',II-nil (:,,\"'lWIIi'W ngH ill I h· lin:; 1 aliI' ,iw l'I',';P .. ,bihiiilY {!II' IIII' p"HI',\" ,d tilt' Hank TrlH':tiw Balik 'll' C'awHI:I, h~'''w(mf', i" d~'1 wlIh Ihm','r.; and gri'al fIHlhm·i,y. bUl WildWH'I' ih Ilo!il'), nw,') ("Imlll\''\" W lilt IlI'M inIIcTl':-L;. 1.11 lilr w,linn Ill' of Oil£' 01 lia' l'rovilll'r';; !.illl! make ilP Ih.· IlHlioli. II ... Gon'nHW'll. (whil'h ;" aiw:!\';, H""" ilw Balik of Call1l,b I

Il;u;.;t !'\U'I it" :mthnril),. . .

Smf'iy II j;; IW! in till' interest (II I lus i''''1lI1 ry ns a wllOlf' ! hal Ollt" jiI'O\'int(L~_ p::'I'N'iidl,\' til!' Pnwine(! whoso eiliu"Ih' puv iudw !lll:ll ;lll:l'~'::j;; Jj('al'ly fifty j1(:!' ('.mt Hf th(, Il;HllW\ 1;:,.", W .~;I\' I" tlw world! liH "!:lHr:1I Btwk of Canada wi!! lint PIII'{-!UW' il,. Tn'a"lII;~' HiIl~ or 01 her obligation", :\~ long ;15 your Bnnk pl"l'"i . .;I.; in aU~[~ld!', In\\" ";\11 we ('x/we; \t! Ilwke a united

( ~", \fAl:fER:-:, ;,l

I, ;... \\,,\1.1 nl,":, E,'q".

or l"im~ewl''', P:~dhmWlii Bllfil«lhil.':'.

T,;nIHh" .

OK,\11 MIL \\',\I,llm'<., ... · I

~'Mr'!~IU)' ~'''m In'! ~,~' April 2ii1h :mdim,'(' ~"ueliu n'\'I!'wNl

'\bl,~' .1. W;j,;. 1 Ilwl II'Sfdf ,mllf'hlllti:llJy I !u n, ,"nmml'!)('illJ,t 011 rJl'lgo :3

"j ~"'~!l' kn'.I'. a Ii "'I'lin\" II Iwth~t mllh''''''''1lidlllj.!

p .. h;h'!i "til tim! I Imil «'nl'«'fuliy I'Xp!:uiIWd ilm dwnH'h'l' 01 I'tllll'.:

wllid; w," IHlilin 11:1\'1' with i I'I"IWim'f' \Inial'll}, nnd Umt the l'("'prm.

'nl' nn! nm'''lb\lir.! Ihal ~Qlhkl"¢ 1,,\' with Prm"ilwinl C;Iwt'nmwnt I'Hiler

lil:m with nm:lt:h,t1\, ' ,

'nIh U\o •. liIh·:lliont llnl!',L I II!!!!',", with wm!" olUllim' of ll\','IlLK, In

mn lin!" :r.m ,lid 11<" Iqw:i! Ilw il:jh'n;NH \\ hh·h· uPIHmn'i! ill yom' l't~ilI1Irk~

1" lw I'llhli,' .\"1"'11111,,, Cnmmilh',' h. alit, dr.-d Ihlit ill .\Iny III' Waii 1 hnd ngl'cad "I' Ih., Bunk ,,' (':w:ilh 10 lim' l'mvilw\' nf Oni:hl'ifl T"\'I\iHU'\, Blll~ :Hlt~ Imek un !lml nlotn'!'~li\'I;L Till;: :Wlti'!iwnl iii IW! Iii 'fIiWol'l!un{'c Ynu will 1'1'1';\;1 !II:!! :II 11. .; HWt'iilu;:; 1,1 d,(· D(.milllml.Pmviucial Ii! ()lImn! nil I }«'I'pmlll'l' n. H/:JIl. \'1111 IiW",' nH,' ",nnH' :dlt'gIHi(HI. I

WIl ;IfJ;wl~im! 11'"11'111 1111 !'Xlnwl inmi IiI\' pn'n;\.,Jil1~~" of Iii(' Dmuilliull-Prm'ilwifil Cnmmiltt'l' \'jinlmmllf! my n'l'l~' III ~'mh" ~lnh·w'.'IlL 011 Ilwl w'eHl-'illH 1 poilli:vd "1.11 iii !iii' mill' 1 ddilll!,· !\'J'm,; 11m! 11m" 11("1'11 nu umh:rlnkillg by \Iii to buy Bm,: hi f,w!. ll'J"lI~f.!""linH 01 1m mHh'I'I:lkil)~, You ,ll'oI'P,:d tht: 1mbjt'cL

At i!ll' !ina' ,,f !l!\' d"i! III Tnnm!i1 in :\I:~y. ma5.[ (·xplnhwd tI.l' ehar,WIN III Ii n'l:ui"n~hil" whit!! IIII' Hlmk pI C:.uw'dll ("(mid have Willi PI'(!\'inccs, ;ami poilHPd hili Ihal. nn I he Imsi" III' "'11th :! !"Piatiull>'!.ip Ihe Bank of Canada l'IUlld IWI'i'(lrm 1'01' it pl'O\'ilwilil ~O\'l'nmH'Bl HilII'll !l(' snme kind of S{'I'\'i{'(.,c as it lmd,'l'!;dil'o' (0" IIII' nominion C:on"t'lHlll'lll, Tho Slli';t' i'1I1ljr'(·!. WHS dp:dt with :,; liw I ),mlini,m-PnwiIH'i:il euuf,'l"f'lw,' ill Ju:m, wlu-n ynu W{'T(' IW(3('nL It W/h ilH'lH in;w.! in my annunl m"I1'('''", HI >,h:m·lw1d(·I"" illl\l:ii; :md I also dis,·,'··· •• i m ~"I,;::: h wi! II ..... u whn; v .. 11 lnmd. wi; h 1m' in Toronto On April :?:t. W:I8. It I.' illll'O""'III!,: I!wl 1111'1'(' li!mllhl III' :wy mi"und(~!'i'j:mdillg in regard ~" nm' l.u ... inolL H Ii- :.' iii IIW' "I nlHj!ly lido! OpiUlillI llial :1 l'd:ltion"hip which if no ,·lnii'l" Il,:m ! lial mainlailwd wit h 01 her I1fI11k" and im'(':-tor..; would b« of nn !'I'I'Willwni h"lwlit [n :1 pn,~"ilwl', nIH! I" !lot in ;w{'ord:lIl(,f' wilh till! objects for whieh Ihe Balik W.!" ('f\"nt('d, III [";wl. if til(' Bank had cusuul loaning 1'£:- 1m of Ihi" killd with II province. or a nnmhor of provinocs. the'j;!) iii everv n'lIHiI1 10 bclievr tluu tllf' inll'l"(·"r:< (If Ilw public nrnl it", gOVl'!'llIiwnLs wmlid ill' pl'l'jwlh-!"d 1':1111\'1' thall advauer-d.

From a no: .. lilH~ <1f your II'He!' it might he imugined thaI the Hank of Canada Iwd IWHi 01 no :'('1"\'11-(' 10 Ihe Provine« of On/m'jo. T beliovo !hnt in fad the 1110111'1;11'.\' P' Plll'~lI!'d durill,!! :IJ(' j;bl {(.\\, ~'(":ir" lia~ bl'I1(·fju'd the Provinco

II

1

4 ln
:11
r 1'1'
i 4 Hi
III
JIi
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U1
oi
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l,
y<,
Ill'
fn
in i

';~~#1tl~ r'{itht!t

In f~t~~"k'$

~~~~~::~

~ 'i~f.Jt_il

hmet' indltl n, [ ;!wh,l int{~d i buy

nees. rHHlr~

~l'fit with

r

4

It

" ~

(H~-...

\pril enrd hieb t' of ('Nt

{~ jE NIts

ada the i,l€'(,

!~f Ol~~nd~~ mmy HIiliU :611\' am«il\' III

()f .)ij!HlhnhliU n""t';'cmWlul: ;m«( I m::!k~

Ihimin!'''H':' h{u'l'mrillJ! ,ul,1 ncfm,dilIJ,:, Oi~~"n'in' ~'h'r.IUtn~ rt"J':'Jt'tWI',i' II:I\,!: h!;'l'n jim,,!, hI "\Wi"~I",'

¢~f (hH:lrij'J mtiil W !iI,· w!hll'ht II mm!"

pr«wiBwin! ,h-hu,

l"li~I"'';~ ni\'! 111"0' li I ,L'I Q~"" !'nuy,','1

umil! IQW,"U em! !'~ H N'PlH:!l J,'ill!{ b ~(, ~U"'W'(" !m\' Dhh'n'i\ !'4Ih'~ it l'!'lntlillS OH,' ('H~,', m·w'i'¢h."i(''';:;" 11m! (ll!llldn l~li" U~;I'! tiw W:!l' ~lJi "m'll ,I i'Oli{!y for :1 Dmmiwl' III' V('1U""",

in lilt, pt:hul!im;\h' y'W':IY. in. pm!.

'rliF uUilml" i,»f ilw Hmnu, ~u"{mM hi' ~~Ilpjlli. tW,! with

!il(' l'l'~wlrwi:lll1m'(·!'muh"Ii!". nmm!m!f, Uw B;wl, ~JwHid nhn\y" hr' H'IHiy

h' gh<!' "YUIIPII t hNtt· 1"nnsldl'!';H ~WI In i1m n l"t..; wpl fn fP of

nny lUll! :llllll'(wilwl"~" lam 1111' Prm'in('j' ()Wnl'ln,

11~I:;Y("C with tlil" shl(.t'UWliL bill ihw !iwn. ij" 1111

.J.IlliJl'l'IIUt'llII)' III!HII' I hal I 1I"))m,k" lii"m'imiIWiij'"

Olllnrin m' I'hown i\sl'if In III' iilliiH.·I'\"nL U" unw !"O!i! I'm\'.

!r~h.l it:~ ~lf:nijH~' Q~~'h~h \\'u,h \"~~~L V{h~~if~ yf~fjn V!~~i\" ~~,;t¥~"

i~w 1I Im~hH'''l'i rd:ninll"hill Wli" 111:11 mmh· inl 1\1:")'. Htt), wilPIl ynu hi 1.11\' "!!Ill(' "'nm"m'r Bill",

III Ill(' m'ili!wr\' ('lIm'St. id o('\'!"nl~ dw B;wl, d(w~ ~IH! «mlmi'k on I 1',,(,1, illlW('\'{'!". til;!! ill!' I!nj¥wi"jhh· fm' us hI J~IWi'i' a "1'!~nll!,,'l!1 \~'Uf;l ('f<J~W'\,S il1("nmpJI.'If' :wd ili:w{~nr:II(' in(I'~'lIwuiOh 'il !III' Pub!k '\"f'!iWI!" ('mnmHh" of 11 Provincial l.t·gii<billi'('. wli("n"I;(,1I II ,,,In!NIWU! i" mad!' in':,. ei\"iI !'<!.'!"'ilflt (l('I'lIl'yiIlI~ til\' I"I\"PI 1111\ f 1111, /,P,;II hm ,II li,'pmy PI""\'IIH'I:I i Tl"'i~"lin'r, I II 'nn'Jill ri!';·lIIn"W'I(·\''''. J lm»piN' III H'IHU tKll'ii'l" uf Imr j'IWI""'ll'!II'!UWI' HI Ill(! Ch,linnnn 1)( illI' Pllbli(' AN-mllH,. (';'mln~lhT, IIml n-qw'~i hill,i h' !'bl'I' !lIn:;. !I'(\('r;.' lJi'~

f(in- IIH' Cllmmilil';' :i! liw npPN!!wilY,

Y 11111'''' ! I'ul~'.

Iur i hi.' :;~h~j,ff'flinh UH' Ptn,:i!l('(' {If Wi.' h~n',! hll'!'11 tile ~ i!~ u,,' illvikd us

EXTHACT FHO:\I THE PEH.\IA:\,J·::,\T C«(\i\IITTEE !I:\ FIXA:\('L\L <H'ESTh "f.; OF TilE I>n~HXrn;\-PHn\'I:\CL.\1. nINFI':HE:\CE.

OTTA \VA. DEC E)'WEB !I, lI!I:m,

)lr. TUWUI"': "( Ihillk l~ i, "I~T d,'~irahll' iudl'l'd lhal !ief' fir", !'oill: you bm!l~hl lip. '\11', Wahl'''''' flfou!d h:n:e iJN'1I hrouglii lip ill :I !{;II.IH"in~ lik« this; nwl .m! olll~' dn I !:ikl' II in good "pid!, hul I mn "'T,\' gl:,d ilHh'd rluu i: has !'UUI(: i!ll"w;ml. I \'1'1';1.' w!'11 renwmht,j" ~wp. ,"ifil" I paid !.n 'foro'lto in '\1:1.",,1'1' W:J;;, On !Iw m·"""illll iiI [Ill' fir", 1Il1""'.in1!",<.Ild Ilwl h; Ilw I irn s» ~ l.« oriciunl mi",,,wkrilawIiHg: :;m:'!\ wlll'll lilt· \':11'1011" 'm,1d .. i,·"" WI"!"(' :Wf'~!'!'l illJh. Br.p. IHlm"" n!lh·l'~·l ,Ihl m~' h(·..;! In lim Ihw 1l1i.' prnl"dm' 1'11:11':\1'(1'1"": 'ell!" I'dal iOIl;"hip IWhn("li III{' ('('Ill!':ll Bllnl;: awl till" PI"U\'ilHT, "!<lIlt! linr« \'I'r~' .·;iJilil:ir 10 tlw:,f' whidu J lmvo i .. llmn·" ln~d;j~"_ illdh';Hill:,l !h:H if would II(' \'I'I~' diflieuil, \'(,I'y mHir':,il"nhlf'. if 01\- Balik W,'I'(, h. ('nnw in on ow O(,(";I"jOIl -implv "" a jllln'l!:li'f-I' off/mil' bill:" all>! then JIliN ('owp:wy and havr- HO l'fmtilllling n'iatiollihil' which would l'I'all.\" pial'" i, in Ih,,' pll.-iiillll of ha\'illg lila!. du"e financiul ('ollfnd which :' Ih'"ir:lble wh«"11 tlw Central Bank g1,,"" info n thing- III all. .\i' I j<ay. I did Iii,' 1)('<1 10 ('xplain dml :1;'; ,,!t-m'ly :." I {·(mld. I n'!rwmil!'I' 11m! the PrI'Hlif'l' n:I"\.' kludlv in\"ill'd HI{' In IIIII!·I». awl ;1" \\"1.' !!;Ol inio Ii.(- ear in driv« down ill U!,:J\iw! J;:dwani I ;.;aid 10 him it W:I." r:dlaT n hard joh of ('::pl:mHlioIL {'(lining

Ihp hhi(' like Ilwl. Hili I I .ll'it OiH! n,H' of illI' Bank of C:mada',; 2T<';1Il'i't I rnuhlr« would b,· w ('~:pbi!l !l~!' !If'I', ""i: ;('~ ui ih ~il!l;! r ion \'('1'"11,, diP j)rm"i/H'(';{

,qJp,H'rnt!>' wht~i ~~h'l' ymt advil·\'.,hul UUI n 1\11'. H r )\1111'11 in :III't' IWtl id!lds 01 d:mm ronr~ inih!.' tt hI' fdlow who it .. " A. J'(~m(_Tk " remark mit' tlml q'i!llld not hw,'{,' IweH

;~W:u n' Iii!' ililJilieid loll" or Uw ex-

:-;ij', u'(';!""!~i't'.( II" I hM amusiua 1'~'lIlI\r",1 \,.",101 i!:!\(, IWFIi ii' 1ll1"lm~h'I'SI;Hlliilll.!:,

i.\' ""~I iwmw w\'m liP frol,; I hI" Bank alld hml a tonk nt the n~~UI'n$,

~1" ~ in' Iii,," I nITti"Dilli, (HI PI' ,,, ~'!'!' \11'. Hepburn hy al'l;nn~w~

l''''"IlK. I ~ila! b· hU'H d\·,.dli!"\~. awl ~11',W;lh{'I''' Hud :'\11'. Sixnn vorv

r:,!lw duwn I" 'l.:" inHI'i. ,U" hI' ~a\'". .\ II r was llhh' II.! !Ill OWil W;lli 1<) niW::H'1' Wh'H i had Nlhi l.n'\"inu~iY,,\HUi;l'iy, tim I WI' W('I'I' open hi H IH'ilrHl);i~

;.,!, Upi' ,I '''"mi!Hllll;! reluriouship, WI:' ("nIHwt· Iw ill Ih(' position of inviting iy lll'glll;! IH'Ii\"IlI"I'" lil mal,(' IIH' of om fuviu:,;, lim J indic·atnl. f;\:\hi"ll I kul("w I: II\\' , liu;II';lIth :I jH"ojm"lIiol1 would 1·1't·!~in"'N·Y

Ill; 1;;;"1" iI!' :1 ~,'mp'H'a!'y !I':IIl"~H'nol1'I donut

:\lr:dr Wd~ l'plilly HOI 1'1';1 'nHfm' lilt, ('(,1l11'l1l

i ~ Il~~HI~ ~(II .;~~nh

SESS rON 1.939 HOOSE os COMMONS

,STANDING COMMITTr~E

BANKING AND COMMERCE

-_ .. - .. _--_.

MINU"fES OF PROCEEDINGS AND EVIDENCE

Respecting the

BAl'lK OF CANADA

SATURDAY, MAY- 6; 'f9'3"9 .:

WITNESS:

Mr. Graham Ford Towers, Governor of the Bank of Canada

OT'rAWA

r, O. PATENAUDE. r.8.0.

PRINTER 'I'O THn: KING'S MOST EXCBLLENTMAJESTY 1~39

MINU'fl;i;S OP PROCI~I£DrNGS

'I'ht ~I.mdil'(( ('":ml,l,,,,,, "'1 H;wldn~ nud CUUHlW!T',' niH :~i J. o'dtwk a.m, ChairmmL 1.11', ~flwn\ lm'~idillg. '

,iI, ml",\< . fi"(.~' nl:M.'.,,,:'s, Bnkor •. ('lark (r (J1'l;~Slmlmt!l), l)(~ndHmm, lil,mlh,lly, Ihlll,"" FHllluilH", ,111«111(''-, Kink) ', Lacroix I/:rlllwd, LtUIIIN'YOH, )h'(H'(', Hn"", 181. P(wf,,'I. 811'\'1'11"', Ta,v!tw iX"mdlml), Tudtl'l". Wm'rI,

II! Ill" mlltlll't,' \1 I', n~":ihmll FI'1'.1 '1'(IWI'I'':, (;" ,"i'rtlf')' nf I!w Bank or Canndn, Ex:mdll:1I "n oi;\h. 'I\'W('I." was eonfinuorl.

.\11'. T"\\·'T~ Iii,-" f! ahmwal~in I'illS'WC:I' III qll! "tlfili$ asked nt. Ow last siUing 11\' .\11'. :\11·/;,'('1' Hnol :\h. Kinlev, 11" W:lS> ordered lila! tlw::'1! sl:llenltml:'< b(?hlt'nl'~

]~~-~~':nf"! in I {h,y~~ .-~\~hh~JH-~l-<

Ai '1.10 p.m. II a' ('omml!l!"I' ndjmll'lIl'oi 1I!Hi! \Iom!a).', :\1:lY R iiI., 11 n'cloek n.m, will! I ill' IIIHil'r."lamilm; liwt )h. TOWIl't.C would then bl' cxamiued hv Mr.

DuwiJlll:i'1 ("limn'l! hy )h: .Iaqlw", .

H. AH::.:EXAn:l'.

Clcrl: o,f the COUlllliUcc,

Boo H: t3i" C't»M\Wz,;;-; H'!a!m~n

).In),' H, W;u)"

Tiw :-:hmdill~ Cnmmiun, 1m li;wkiH#! !Iud {'nm!llen'!' ml'! ;11 II lUIi., Tilt':

CIi:NuniwII, ~h', \\\ II., ~Inm'i" II!V",i!h,~t

'I'll\' ('JLHIL\I,\:\: nNDUh'IIWtti. t :-'!'I" Ii flUim'UIiL Til,' (l"vl.'miJr of 1111' B:mk (if Cmmdfib: !u·t'(', ,\11'. $h'\'('Il~, ).'nQi linn- !tOW I.' qUI'1'linlll',

Bon, ~JI\ .... . . W"n.:'\k, ('lwurm/tiIl.1 mny :-:ny IIw! .IIHIV~'lwt'lll"iihllg !lpn- Imli{,lill~' fm' quill" :! !nll~ (hili.' !i~h'Hil!j.:; W IIu- I'xllwinnlhm of)\1!-. Tmn'l's mill IIIlJiI'j'l'inlinJ,:: iii lin«'",mlll" iimt' Ilw ,!.n"'II' 1m! i!'IWI' Imd j'iJlII'h'J:i), wlt II whi('h he ml~w\'r\'d nil til(' \'U"U'Y "Wii'llll IWI! "i\wpln: '!III'"linn", IIl1il Iw\'(' IJl'l'Il din'('!('d hi him, filiI! l would liIH' Ii! :IO'''W',' .\Ii'. TmH'I':, Iha! in n~,· qlll">,lIulI", I um :thou! In;,,,,, I «in wi:,h IO:H'niil JlllllilllJ' him ill IIII' IIwl,w:lni Jlil"in ilJ\.f doinl~ other tlutn (·xt·rd"lll.!! Iii" !'l'\'Ilg,niz('d flilwlhm" m, IIII' (hn'I'I"IHw oj" lilt' H~lIlk of ('mlll<lll, Alld I wnlllli liI,p ah'(I I" l~,\' I hi" dowll. if von will kN'1I iI ill min" :1'" IIi(' ilWllll'. shall I "ny, of lIlly 1IU(';<lioiw J :/,,!.; IIml ihlll is, IIw IllIupllftioll III' nur "xi.:'ling muchiuerv fill' 1111' hIllHIliIl.U' IIi" ,'n"di! ami m«llwilllT mal £I-I'" In til<" 11\'\\' lind pre"\'111 ,by "('II))nllli(' "llIIriilioll". 'flint iii lilt' iIHl'Il~hl in lilY mind, HI lltnt IIln~' lidp ~k '1'\1\\'(-1" 11('1'11111''' \0 UlII!"!'"umd til!' lirifl of tht' qlll':-;liww 1 Hl'!k; mHI J 1I","m'\' hill! 01 lid", ILIII , Hm Iml l'!'(-ldIiA ill any IIf llil';,i' I/UI'i4hm" to Ipml him lip :lIIy hliwi HII",\', I nm l'!-:dly n"kill~ them ill Ii \'try iiillN'j'" wuy.

Nil 11011. JJr. ,'{i,nn,<;:

Q. :\" /I Im"j" Inl' \\'Iml 1 "hull later 11:;,1\ mlJ,thl 1 jll,,1 1':IlTy ~Il". Ttlw('!'" huck ,! lillY 01' i \\'0 ruu] n-miml him "I 1IIIIIIi,,;;ioll" whieh f I hink will Iii' n~I'('('(1 10 wlil;"lll unv diflh'lll!y. ~.jl'. '1'11\\'1'1':', \'0\1 t1i:'!'('('d IIII' othr-r duv, I think, OWl l'IlUliilimv rn CUlm":! 'und lhf l'nitt'ti ;.:iHt';" \\'('1'" (HI' Irom :<ati",r;u·!Ol'\·'},.A. "oJ'.

Q. I think WI' ('1111 IllS llin! down, und I ~nllwl' alsn from !ll!' nij)<w('I's !lwl YOII ~II\'(' thnt YOII lal\\' IIII' po"ilion IIWI 1"'0111 IS!)O 10 1020 W'IH'l'IIlly :,!wakinj,( might II!' dl':H'I"ihNI :II" a Ih.'I'illll th;lf fnnllln'd lilt, dd)[ol' clni's?~~A.Y('$, It may IlIIn' 11('('11 a fl'\\, ~\'('III''' ant'I' 1890, but wlIgh/y that.

Q. I am HWI'dy spl'lIkilJ/.!; in g('lwnt! IC:I'llll".~~A. Y(.".

Q. And ill tlH' period fmlll 1929 to file 1H'(',,('ul,l9aO, ill H gell c, I'll I way it. has lx-en 1It!"(!I·"(· In the ,h-hlol' 1'I11>,,,?,,-.'\, YI'i'.

Q. \roHld rml Hg'J'('(' 111;11 the l"wiuf,t (0 tlH' alivel':'(! )lll:,ili(ln of lilt' <iditOl' 1'111':<1' lIn:, now gmw 100 fllr?~,A. I think if ""'t> ~(,IH'l':dly "(,togni;wd f hal jl fwd gUll!' II11H-1! tllO fat, :II til!' d('plh of the i\l'pl'e""ioll find tlw low point (If tlw I'l'jee kvd;; in vnriou» ('O·HII .. ies, That thmlght was ohviollsly ill tlw minds of those who \\'PI'i.' 1lI till' ('nnfl'l"('Il!'e 111'1'(' ill Otluwn ill 1032 anrl at the world ('('ol1mnic l'onf('I'!'II('r' tli(' Y('IlJ' nne!'; and that the damage has been fully remedied, so to speak. II" yet, I don't think anyone feels that. it has,

Q. XU, I think W(' eould probably get along bette!' if wo could agr('ethat !o-dny (,OIl1litinn,.; lire such a~ heal' too heavily 011 the debtor dllSW~S?'-A, Yos, awl I;crhap::, I mirth I add thcro that in l'Jl('aking of the position or the debtor «'1:1:<;; both in Ih(' l'lIriiel' yl':m.: which W(' nrent.ionerl and in the later years, I have partieularly in mind 111(' eountrios producing primary materials and food sl uffs,

Q. SIIPPOi'C' W{' Own limit it to Canada?-A. Yes.

409

n n!inllni~' n\)~n '\';;'~~~QM :'H~H'j' h\j':;, 'A, rl"'~,

~n~ ,t{c'n-'\" hW·U}l~~'.li . - ~_IjUillt"., t-i j3~h\" ~4(i,a ~;iija~

U,Unit' ::~~;;:;:t(~nD~li)" ((Jlf tt)u~." ~~~Hniji ,;~:' t:'~lQjl~ij~U~~ ~u_:o\: a, I ~~~S'i< ~y;~.-~

,f~',,,;!,,;UOll «li':;ij«,,~'""!IU~~i ~~'n~,! n1! w'i,mdlttimh' f~~ *'

~\'fii'tOlnUiUjJnl)li~_'J Ul:~-1}Y·-DRbl;tlijlf",~"'\p. _\ .. !t~\,~ ij~Uq~ Q';:,\-U_lf"nni( fth~f\ij

i[\iI!W- ~ llB~"~>'~"

r!hl_\!~l\!\ IfR~i"',~" ~lW'~ i]~)'I~y l~:d~ PWl\hh~41~uy ij~i!~

~;rij" ~\ll) q ~~II ;"-n.~ppt\~,, tr ~~~'H ",' ~ H:~ ~-~ ~~;_I-,,~y"~

(} .. \"~l!-~~~d yil\j~1 ~~~:r-~"i!" O_)h~lJ.fi dijil"~"~" h ,..nH u !~~d '-'~,~~lh ~li!i\' da~nnft,~ h~n ~ h«l

i_~td:.~~--~.jH)-' tL~'d~H~ ~~~ ;:U:);'l;-~."'r. tR' r~~~-h.rnttl!~, ~-t Uli~~nfi~:~ij~ ~"{!'~b'lU~~-'~~~ntl:~·- ;-\,. lu W'fJ,~'P4~f" ~n ~h~~ ~~.-ill~'~ ~ll~; ~\l"~" ~~t.·\~~,,~ I(~~ H~;~~~~;' ti~ll~uj~»n" pruu~u~try ~~i'F.finijU-~~!I~i!'h~ ~~""< t ~~ii~ ~~u~~ -"-:!t_"[" ~~iJ~~1 n~nD.H'~aty ~'l~LI'>,,~~ d~U"~;'f,d_ ~~~l~~~~~~ I(.!~ tt~ij!\~ u~ti ~ij"tt'; ~~"\'\"i Hf ~~~!ili.~~" ~~~Ii!iQtlnH~~~~H«_i\"!'-~ 'h~~\

~_h!"" «p~\il\ll~tO-V n~ ~~ .. ~ln~~-- ~~~~:;8 ~r!j; qh~-,' !t~\hcMij~ lh:1l U~~H~~'~!n~)\"

wlj~'I'!WI'au1j qn' dd!11 it ht" hdpfHI IiI

~tia nh~~ \\-~tiy iief r:~n..,h¥':;; Ii§f ~~H'~ff~ 't·G~trijERfiln~h~h-'.~~ hH~

t ~W' :""l uti'! ~'!\I"d,,·u, p!' d.l,' h:iOfi hH H U' J,\·bl h'll,~hip

hi-- ~~'.!~~"~~ri; \\ ~~

"~~-~~ ~"u °3:;~ ~:~~;,

~~~~~ ~L~d h:~\«~ L~~;; ~~~ijV~· t}~~,

I",,;;.L "\~:~.:';,:: iWl' \);::');'";:::'l:~:

\~'~:;~ n~'~"If_ ~~~ ~bf' j~~ ~t"~ ,,~f (~:!~~"'~f

~~-~" f·'~H~~L,'4.;L~ .,-~ k~:;~~~ _\~' .~~~_ .. " .~~' h ~ti"i.~_;',~ !_~H--;ii:t ~f:;_~'~~" __ ~1-~";'_ ~d ~:~

n'c~;:~l\!"1'~" ~T;;an~ ~~~P' ~«~;:td h1ir ,h·'I~r ~l\HqiJ":-l",~,!q-. !hf"n ~g p~~~·'t~~H~ u_~l! ~h~~ d~Hn~i:}Y ~-;""

:~~,-~~~ h~H a ~'ijH!Y.

I· ;I"'il' :W\' :~";:,m m ~'.'m· !h.~;1 ,';\11 II!' 1;lkt'il lrv !III' lhmk ,,1

:1; \"11 wl~ l~ ." .. mWI'H·j,,! ":IIlk", which l.rnHld I'XIHHI Ih·"h:lhh:

~~~q~H<ri~~: ;-- ,,\. "rh~c-;It~ :t'!!~dh h i~ a qnt*~dou {H~ nu !uHplt: iUpp~y

jn~ i·d:~ ~i!i!':!H! ;il"~i~:~~!jh\ 5rla~ H~,",X~ ~h"p !-., to u~_~ !nnd~~ thnt ~ir~·(tliL

:IW 1"Hliill'~ 101 Ih:IL, ,\. Tiw U\O "11'1:1 1'\' alHlwd!i~'" rnn oulv tnko

~~t ~.ihp ---~.·¥"n~~~! mu-: h~- LtkcH h.t ii \\'ho ~~cf'! nppnfnini!1t\~ rn~,~

I ;';i~ ~"m;! h' ::I!,'rj,':·! :\ qlh'~li:m !~n'I' whl~·ll. may 1:1I!",~nll 10 l'LI!' i~n ~ ~a-- §Ha,n tT \\.(~ h~~\~t_~ ht·~"I~ t·~u~·qdt~l·aH!.~ hut it ha'i ~,HJJt (~!h~(~t i(nY\\·~ly~. ~\-~'kn ~,;·:~~~ ... ·~~h r ;~ ~~,:\'>~;h~t· (n l¥H~J"t"a-~l" ;h ... o i~~~j;-\' hy the ~U\"'i~rn:lif"nt uf ~~Y-:~-~.~ry L~-;~ .. ' ~h:~~ ;"'. mnk ~I ~a!":!!i~~" l l .... t' of tin;, :l"t~;\~Ul"y hiH :rH,thnd~j-~~-,--~~~\~ Xu, r "~~~ H".-" ~'._i~_;~J\ [.!~~~: \rnllh! ,.,~'-r\~(" uuy j .. ,:~~,!,:\ .... r-, ·r!ltl: :Utlh~lHn p~-'._~""~IHI~~ i~.~-l_i("!l i..;

d.J.uill;!Jhlll. \\ ",:., . :ilt' lInl puh" .. ;d willl"1I ~jww t'X;Wl!Y the distribu-

:j,,!: «: Ii '>,' hi:\,. :ha; !1l0"1" whi."h 1m' III ;ill' howl!", til' h:tlll,~ and til<' !!.'IH'!'al

;!Ild ; h.>·, iL ; lw l.:ond" Ilf !lit' B:mk ill C:uwda. ;1, 1m,; ulwnvs hi'l'lI !lH' '";,-\' ll;", lim PI lb· ;.,l;d i~"III' IIIl' Bank of (',mlllia lw~ IW\'II n' suhstuurial !"':.!I'T Ii ,hi' i";al :l!I1W.l1lI W:I,o In II\' ~n·IHI.\· iW"n'H:,pd I WIlIild I'Xpu't to :'t'l' :; m:lrl",d j'h;llH!I' in dw ".,~1. 111'1':111-(' I think !h,' hal1k~ aud lilt' pU;'l:{. han' iI:'i'lI~' ;wH all ilH' hil:~ Ilwy want <II ]In'''''11! I'll I ",',

1..2 Wd!, yO!! IIi ('11111'2"1' know that ill (in":I\' Britain :1".1'1 HI'I' ."'·l\wlhillj.{ 11\'('1' ,i;.d,! lmwh'(,,: millinn 1111111111 .. of In'a"m~" hill,,'?~A, ;\'" u mutter (·f iact, ;\ n';,\' IWIi,Ii "malicl' :l:ml!lIl! than lh:ll in \1\1' nmrket. )1:\11\' of (II(' hill" are in

i!~!\:I"mml'IH ikP:II'! IIWI1I". :I" n 111:11[('1' fli Iuet. .

Q. Y p:,. I ulld,·r"I;lIld.~:\" I eouhl ~N, I i hink. not ah,;ohHt'iy (,Ul'J'('C't figure:' hm fni r h· \.toud gU(,i'"I:" in n',x:ml til the amount which is in the hands of ! Iw m:1! kr-r ;1':;1 wh.;I(;. !'xI'l!id!lH! 1 Ill' Hawk Iii Emdand and gO\'CrnIHCIlt.

t!l'p;lnlHl'JlI,;, ., ",

(l· :-:IIPI'""imr y,m im'h:·!t, Imly ;1"'''1' in goV!'rtWIC'Hl dl'!lm·t:m·lIb. i':111 you ;m 1, .. nnm1!' ,If; 1w :~mO!tm: ,mbl~mdiug.'!-A" l can tl':; tu do I hat.

-,! r. (~~'ah~i~U F~lllt· .. I T,,~1j,\-!i.~I"~"~

,~~~~ \'.i '~j,:(¥-~_n h

n

-'i,

1 :

f)

o,,_~; !r-r

nH ~1 l' nnd 1. j

q pninl

~ !n- ~j i

P:'j'l !)" .'on;'d nL')h .. !;

q bill II lH'!'('!I;

q (J pl'olJa ;\ WIll ,'11111'\') :;\., f:1I 1 hp d~ t l'la! -

l; _gil wh other pn-',,-I

I., up ill urcat. or 011 f \!ll 1'(' you 11

<,

JlH lilh n-rt'jT Ow jl the 1.'1 circul <i1'lIla!

FLy'

"~a.y~ ,,,,},t-

it: htn ~J~~i; "ldj ~~~ ~ hT'

·f' p~"-j ''''iv~H ~~d~ ,~lL~'~-~':'I'~

la li~ h:;"'~ir ;"HyW;l~>, t'nnl":~t iJ§ :>~-.\. X'l

j,~";H{">1i ~~ tii~lribH-

hp('n i;a,; 'd'l~,t ;nH b~; ~l~t h'J ~~~~<'

-~':HHq

{>if f al~i.1; :t J~~ ,:~re in

~: (~nlT(~(~~ hands O! .vernment

~~\i)lU uK ~l1li'Jld)n"ft~ ,."q'l~U':~'''~'-,~\" ~~',tJ" :\D~lll!1 ~1;~: ~~ ~;t1!,':ltU ~;('r lL~,n\ :riH,j~ 14!1.n~!':'~'''''iC~~ nutll;~tth" l~s n !In(\:, l"!-nqY~'I!ijJn~ f:!i"~'lMbl(1i!iJ1!/!j~~'.Q '!~il~ ,i"~11~q]jf;'

,," -'

l: ~\)":;f, t !ir.,.Iil~\: ..

t: l

)- ~UP'"nl\~~~t, ~

:ml .1~{<~l H'b",Y !1;fiR"! ;l'nQ~nl' 'S~."

« r, Hll".~ \'!.'-~~~4'+i 'i.r'::n-_~· i g--'!"..-

FIPf!\"~"~'\\""~ ~.I01; ~~h~\-.\-- ~-~~;'~" ~~ii~,'-;j;i~"" _, lrh;;!~ L'<,

~ttt(~H RP"~fiH~'-~:~~llW'r:t\i'»UUb~ __ \~ \r~"ut \\:jnt"~~ I!~~q' 1i~';"~}131iIfjl!j/,,!!~-\-,? ij;l'

~t.u~-"I~n.:;; ~ HY~~"ll\llldt\" a~n_>' ~,,-,'o,H~" ~U~-F)i~rUUij~j'-q~~ ~l)f ~h~~

nhno~" :m' ,;;!Iwr 1i~"p:I~"imNlti" w~uh'h lw,·',,, h~',~, ~i\'fH j'N\!.\l11

~utt"UI! \r~nh ~'~"~nij"~ n~~~IJ d hb

~~Bd '~~-..~ ii' ~Qi!~ ~~f Jf.~~hu~r'il-'_~ ~ h '~~'''-Hr:~

:u ~\<Ci~_IC'lu~ ~,\'~" d~~ IU~~~ ~'~~1~~n~:t ~H ~h~_'i ~4dHH;~r\' ~~;; ":''-\, :\H. ~1nd I

I~~~' nh~\i ~,~:f,~ilt~., ~ij» ~~~ : hq~ ~~ ~H;S"" h~~ ~~~~~~ ~h~~

;U]d SiJ;~ ~n~D ;UUUU ~ __ f\j ~\\!n h~ .

~ hit" h~.',fQ~n_t ,,,"on

f-~~"~htln.~l\-' ~lltn~ili .i:- ;~bl_.TInft~,p~~I"!~ij~H- .f~ti.u,~t(!~;"_ hl __ h'::P~_:'~~_ hl_hdl ,i ~

., Q. (lmk "0. hul \\'nlh.-ml h:n-m;: lin' h~'!JU"'''~ !wwn·,'uu. wOllid "!HI t'i'll-

·;drr im: (. ':m:'i!:1 willi 8l;''i:i,OOnjlUlJ ill trru-urv IJm~' Il11H ' had :lli

tt!l H b:H 11,1"11 in (,fed Uri! nin '! ' ,A, I'rnlmhlv H<li. ,"mlp:H';lh!,'

,m :Q ;, In~i~, I u ;';111,:. hi mind u '''' h»Til,h h ni' d~4' I "HH.!nil In;ld~.<

in~Y! ~Hn~~Hni ~~n" t~\~~ijn n,~~,~ ..... ~T')\ ~ h~<l·P. ~ hat_

h Wllu:d Ii" I'Bnql:m~h:,'.

(J~ Ihll YHf;J df~ 1~Ii,hl l IR' vk-w t h:H \'dl1 hal'p ~~ ... n~~~:! \\"~"n ~~H ld ~ hi'

!miH! .,f ~;\nll',,!i\!1i oi 11'\'H"m'y hjJl,,·?,·~.\. Prcrty ,n'!:' )"1·... I lll(' ~hou!.! 'think n{ 'iH"~~f fl~n!-i~ ~\\OH p~.~ni,;: ul \o\p\V~ ~rhf' Hr"*-~ ~);!H' i,,,, ~~~ ~t ~ij"~"Pf~d ~!nt" ~~~~ ... -h l'(C_~\'f\~t' ;"~!r Ill!' 1l:B1l1,~. Ilhilli. :1!)ln""'HI t:III" !lml !Ill' d,:ln:md inuu !Ie;.! pnllH !Ii ,'i"w i· p~~~"ny \\'I~n iHh~~L I t hink h h· ;'H~ f:~~i~ ~ha~ thr" ~n\"fTnnH")~L i:" ~t ~d d{'~il'@-"!, nm:.i ~1i'"I'.aH' ;Ii<' ;ilmmUL lim 1.l.l'lIld i hiuk liH\' hv ;\11'.",'1 iH~ Ill!' ,'O-l :';lir!\'

aF~h'~'i:lliv~ , . .

Q. ])11 ~'nll think il i:" J!o:<,.ihh· In -11'\"1,11111 :I hill market ill t ':III:ld:t·!~·\, A ilm mm'I'I;L Cli enur-e, 11:1" I wu \'HIiIHlI:1I !!1Il": (IIH'. !'wlllw'l'l'i" I hill", h:lnk('j">IWl'\'Pi:HlI'I'" Mill ~I\ i,H'1 h.

ll. (~lIill' ':u",,·,,\. ;\ ml till' other, !!H\'I'!'11I1H'nl n',·a"m~' hi 1I~,

{l, I.JUlt(· ~I! •. '"~:\, A~ 1'(,;,'(111'11:: illt· !'omlll(·!'dni erul 01 it. I dn nnl'n' all.\' III'olmhi Iii h-~ of d'·,·I.·iupiHV;";IWIl II 111:11'1\\'\ in (':lIIad:t ill ,Itt, visihk- nuuro. A ~ a mal It .. iii 1':11'1, I hat llI:wkd has aImn:,! Ili~appf':lI'I·t1 in );0 Iar :I:' r.ondou i" \'nll'·"I"II\>'\. arnl Ill!' .Ib(·wmt markr-t I:: survivinz on ~!I\"t'nlllwlH I r(':t~HlT hill-. S" far ;I" IIw ~'XH'II"inll Ill' I he .!!O\'PI'nIHI"!H ! \'(,;,"111'\' flill uutrki-t i~ j'lilH'i'I'!Il'<! ...• I!I!' ./I'\'(·I"PIW'H! n( 11111-1'1'''' ill it hy lWIIP!t- oi!W': Il!lIn IWI1I\",·_-[ ~h\1llhl think ! !,al -uvh 11111-1'1' .. 1 wnuk] 11(,\'plop j( till' nues \\'t'l'l' hi~l\('r,

ll, \\'111'11 Y"II,;-I1Y "higher," han' you in mind allY poilll to which tht·~' mic.,dH u .. wlwn· tIH'\' would induce tilt' exlcnsion of 'Ill' trI'U,;-UI'\' hill market '!--~,\. \\\,11. 01111"1' lliin!!" '1)I·jlll!: equnl=-whieh they \'(,I'Y ~ddom an··_:[ would suy thai III rill' !m'~('Il! time it !':HI'lIi J ill'l" cent would aUrar'! quiu- :t i,,\\' utiwl' lwopl'l into them.

(~. Yf'i'?~A, But if utlli'l" rate:'. iucludina hauk d.·po;;it I':lh· .... hail gone III' ill ! he Interval. thou til(' ',>f("C'I (If I !WI' \'('111 II'(":I"III'.\' bill,: would no! Ill' "" gn'aL BIIL:\,: mittt('I'': "Innl~. it is ~('lwl'aJh' til(' (':("1' Illal I host' other 1 han hank" ;11' "m'''('!w,: Illar hold fro',ll ('hdll'lo twenty million dollars !II bills, till' lat \('1' figlll'(' Iwing not usunl nnd distinctly high. En-II at PI'('''('111 levels then> j,: what vou might call a 11111111-,.1 interest in Dominion hills.

. Q.'Ul·gnnling tllr amount. or tlie quantity Ill' ('llIT!'IWY ill the hand" of Ilw nllhlil'~l am not talkinv ,,0\1: about this monov u,: it lin" lx-en ;'III eonunonlv i"(,f!'l'n·d to in the emnmil!('('. hilt I am talking ~Ihollt f'1I1'1'l'IH'V in the hand .. (;i till' plIhli!'-i:; thoro any nrhitrary method ndilpH"\ hr tll(' B:ink of Canada or lil" ('IlIHllwn·i.d hank" that dotorminos tlw quantity of 1II01H'Y that ... hould he in l'il"!'lIln!ioll in till' hand .. of iiI(' ImbliC"?--A. );0, That dt'jlf'J]lJ,; puruly on the demands of t he puhli«,

(.p .. Y'~ll .:in· ~~WIIII\ 1 mill "'iII'f', Ilwt C':lnlll~1i1 hl.t' II SlIutlljq'I'lwl' (';\pHll !WIOIW(

tIl< cmmJ" Ill! Ii", public- limn 11;11' diJwl' Ihl:' l'J~iH'li ,":1:\1(''"' (in'lH

I :\ni~H;dill:»··;~A, y.' .... 'I'lw fhtm'I'f thurI hnn' h"rt, ,;;hIlWiu!,\'

~h, ,,·:\~ftl"t'tW\·~' !.Imt iluh'~ nnd ('Uhl'~-llll IIfit' hilllil"'('f til(" "uhli,' hlnll'hlU~

.. I >t'!'('i11lwr m hi". P{'i' NIIJld:1 "ibmn Clm:ukt. $21; Australin, $2(i;

; Hm! ('nilell l';:ifl!(d"IIl, $H,

Ink,· !iii' t'lIih,d ~!I\h',,', lID,·, ['lIih,d l\in~lIom Ollrl C'lwlldn UII'y:n'I' JII<lIhably IIml"\' (','mplIl'llhh' .Ihmlml~· 1Jl1i('!'<'" . J nm qlWHlmi WllilolU d('''lriug tl' j.:iji intn \'1'1'>" grnll liNnil. hili I\' iilU,.O'HI .. P:II,,·ipk, If !'!lilt·,1 SnlH'", 111'('" ~H1 pI'!' ('lIpI!:t 111111 U!"I'al Brituin $41. yml faid=~~,<:\, $,j-l.

(l· SH: ;wd (':111:1'1:, 1m' illlly$21. dou' il iii I' 0/'('\11' til ~'O\l \11:\1 Ih\"H' may lh ,"WIlt" WI'Y .!t·linlt." 1'1'11-<1'11 I.w ptrhnp:< JIm" III till' \'/Uwc' {If 1111' dt'pl'('y;<ion ill CaItll!ia'?«-:\, I think IInI ill .hll! ;«'H"., hN'lIftlsi' 1 think liwt IIIl' amount ,~, W·Ii's !n II", h.lllds of Ihl' Jlllblki~ :l l'i'~HIt of various Ihill~" :tUII nut till' nm~,' III :W~· I hill!!. 1"01' pxnmpl(", I nh lhe r niied $laH':, wlwn' it j,. $d2 1\('1'

I, b true 111m VlIl'iutioll:O: in volume (If busiuoss HIHI ill 1('\"(.) of priN'$ ntU~I' dmugl':'; lnu it I:' IlIoH' tllillu" which (':m~(' the dlllng(' ill till' 110(1' "irrllia::"il 1':\1 h.·!' rhnn til(' nol!' 1'i!"":ilati'lIl Nm~ill~ till' I'hm1!((' in business,

(,J. Yf''''!':\' Again lilt' lack of !tWill hnnldtl/l: f:lI'ilili('$ mnkes n lllil(Pl'inl .iiffn,'!H'p. FlInlh'I'IIHH'(', /I db<il'I' Ull I hI' p:m of fIlH·igIWI':" to hold notes of a "\'l'Wlll t'Ii!llHI'\' will 11:11111'1111\' i'llUf(, lIB im'I"':lFP in th" ('in'lIlation, Till' Uniu-d

~o (HI' ':1' I know, hU\'\'IH'\"l')' h"('11 :lhlp In fit!w'p mil 110\\' rnunv (If UlC'ir :w:,·,. :U'" in II~\' 1I!Ul'id., of tlwi!' OWII houndll r ies. blli the amount is u!l~Ii1lJhwtlh' '1;IH:llliin!: /lnd ill "('('(,II! Illollth~, of ('OIU'"I'. hal' h(,PII ill('I'(>u~i!l~ quito llI:ll'k('dl~:. Thl' .It'malld 1'01' L'nitnl ~1I11l'F hills ill Em'OIl(> IIOW is lm'g(' lind th« business pi I'ellinj: them is Iwing done Oil U gl'(,:li ;;rak'; and the amount of notes of tho (",diP!! h:illl.'.dnm wllith wuulr] hi' fOlllld in 1!O:tI'.I" on tlie ('olHim'llt j:-: :lhm vel'"

lnn.!'c', ' .

t~. But if von ell bad '.'iu!!t \,Nn' . .: 01' mOI'(', \'!l1I will find virtuullv lilt' "nnw laid .. lit di!rl'n:'IH'1' '1)('[\\'l'('1) (:nlllida, Un'llI Britaill Hnd the {"nited' BUIll''':; :'0 tilat !Ill' IIniUI "~"I make ahout Ihe demand I.,\\" h(,p:tu:'n of disturbed conditions. (tI!, {' ni: ;'d i't :it l'f curroncv lind stcrliug would not nppl~' to the figim' "f. sav, d:r!H "I' tvn vears ago?--·A. I would hnw· to look up pl'e~1929 flgurcs. I think d:t:!'!· ha~ heel! :l rnnu-rinl di/I<'I'l'IH'<' in tIl(' {'nlt('d Swtc:;;.

1'''11. :\/t-. :-''1'1:\,)::,\:-:; J Ii:.\'(' tho fiplJ"(" !:<'!'P /!oin/! b.u-k 10 1021. YOIl "poke pI IH28 ",. lilZ!!. The n!!IlJ'(~ fill' Ihr· PI'I' ('apila (·il'!'tllatioll ill till' hands of the publi .. ill dnll;.:'" in lb, {'llitul :-<r::tr" an' a foll(l\\",,:-.~

l!l:!J .. J !12:!. , l\l2;{, . 10;;1,1 .. I fl:!.'i. , ] H:?(L . 10:"7 .. 1HZi' .. W29., In:$O. , I f):11 , , JH:.12 .. J9:~:~, . 19~H .. 19::)5 .. W3li. . W37 ..

34.;)3 :3a .a2 3·1.7n 3-1,08 33.40 a~{ .82 3a,7() 32.93 31,.')0 29.;35 ;30,88 :38. (i(J ,W,OG 3n.74 3G,39 40.85 4l.7i

Q.11 hl'f WI!Ul 1 l'nitt·ej :-:'1 I think y ('NH it in

(.t. Y hallll~ (If . would it I

Q. I

t iOlj:-,-thal that, 1\1r. of the thi from iIHT(

Q. 'n a matter

;Urr" 'rrnom; i~ IIw r~jitt;.d

llim. lfr.. Tha! i~.

U!IW ~:.mil'· p!"D"n«l,1 1m" ;1'"

it C,rnlHbl r:fo f (tn, mH~~I;m(' rit:rin $c! 1,

W2L, H)2~~" , Hl2:t., l!l:?t 1025 .. 1020 .. 11l:?7, • 1028. , HI:!!!. : wan., JO;n" . lOa:? • Hma .. W:H .. I!l:m. , HJ:m .. Hlar. ,

Fi'I' ('H!lada "!Illilar figure ... i\lI' !il<" "amp pl'rinri :Ill' ;~" HI:?!. . 1022 .. 102a .. Hl2·1, . Hl25 .. HJ:!t! .. Hl27 .. 1::128 .. 1029 .. 1 {);m , . W:H .. Hm2 .. l!la;{. , Ilia .... 1 !l:~t), . l!):~f) .. Wal, ,

Nl/ /1M/, .1/1'. Sh/'IIi,~:

Q. It i" "ll-HI' 111m nfl!" that p",'jnd Ilwrl' \\";1" :I \'er.v ",l!:u'P 11('(\\'('('11 IIIl' IlIlH'1I1l1 of c'lIITf'lh;\' ill "in'ublinn in III!' Iwnd" of thcpuhti« ill the Uuitr-! :-ifllll'i', ('annda and (;I·('nt Britain. I.e! hW IIO\\' pur:'Ut' tbt ill ihi" W;j~'. I think .v01\ ;.nid in your ("'ii/t'lll'£' that wiwlI th!' "a"h 1'1'''('1'''(, rn~!' nhm'(" 10 IWI' ('('ul it indlwC'rI IIw hanks In irwl'('n,zl' ;0(111;<',--"\ . And iuvrstmem-.

Q. Y('~. 1 will ('Olll!' til lIlt' ditl'('I'f'Il!i:d in :I moment. H ('111'1'(111';\' in Ilw hands of thn publir \\'('1'(' ilWI'(':,,,('d, the (·X(·(,-',.. would tf'wl to !'C'i III n 10 thebunks, would il not'?"'-A. Yes.

Q. I mean, tlmt ii' verv urH'" the fr%'01l givelJ for not iIH'r('a;:ing 1':1'1'11111- tjmi~thnt nil it would do is llow hack to 11:(· banks. You \\'null! ngnl' with that. :\11'. TOW{'I'$, would \,()1I';'~.:\. I think that you might !:'flj' that th:1l ji' OJw of tilp thing:' whir-I. j" IU('m.inl1(·!.1 :I~ a "C'qlwlle(' of events which would follow fromincreasing tilt' nIlHIU/H in IIH' hands of til(' public.

Q.Ttw term ",,('qlallC'(' C!' ('\'('nlF" iS:I Hltlc' (llm'un', is it not'? j" it not a matter of fnct=-shnll r :,ay n mal tu of ('XPCl'if'fH'f',-"th:ct the inf'I'("l!'(' of

·I~ {l 4(1,0 :u·tn ;i):U) :r; 2 :m.{, :tl).,H ;m.l :tj .u :,;u al .. 1 il,a~8

:la.li a·I.1 :~7U~ :IS.H ·12. ;>-;

(I nut tlu~,.$42 per o( pri(T\% ~hii' iWW l(~~~~ ..

matPl'lal Oh:~ of n 11' t'nl!('d , (.f their !{mhlNlh' Il:Ukl'dh: .

!mj;ilH'~';; es of Iii(' '1.11'0 "('I)'

Ill. ;·1 2:1.48 22.:.H 21.{';4 ~~I IH 21.IiZ 21.7X 11, fa IUil;i 17 71 HUH HUiO ili,lm 17.72 IS.S'; 20 . .J.f

• !It- :',iIlW {a t{.li,ti: ~'O ,miilinll",

{if! snv,

I Ildlik

:U l'poke i:" m the

;",-tfi.,H ~t;\;~'H' [t\f~~fib4"~ -\.

n n ~~ ';_~~li:-:\ll ~0;,u ~-\i" U \L,~" a ii"hil ~t\"M~~')~ Q.1!f ::~ ~lj~-g~_

~~, ~ ~L hli t;:\n~~r,n(\~ ~ ~~I\~llnl!.?:l}

y~". "2Q nIH' ;,;, l ~~I,' I iw 'm"TI':I"~" ln ! ~wH' 1'~I"'io

hUbl ~ilh' hu IW\'I' ml~um,r:,·n··hl.,d" !i':!( j'l wh~H I am :i .. l\iu~~, I mil ;",'d~-

.;< "(,,;, U:wl".'<\, q'l:h"ll,

;m{;~~r h' i<~W ~iml 111 nnw b~'1 kli ,",'an; "1' more ·,,:IY nlt<'I'~\

,', y -v-rvm ,,( C~:fllm~iI n~llwu' ~fi'l1;\;'il h~hi tlH' I.m wllt·n·

~¥~~\l~ \\:;'B~l f~i!r ~;-(l'qnr,~,t~-<. f~lIr ~~»~Hu-~- niih~~r !haa h(~UB~: fin~ :",~~Ih~n~ of

I ~r:,:I\' lH" ,h:III"TI!U',' ,\. I.!" II'" think it i~ 1)""l'ihi,· In "Xl'r,·~~ :l niH wn nw~ nDfi! .. pilli~httl ,'nl Ilml 1!\'I':m~l' it ul·tllly ill'~'.,<,,"~ ;,91< :,H;-W.,!" ~'.l d,:~ 'i:~' ~I :,.D.: lIn\,,":i hnmi"ll m;Hm~x.I'I·" hi'l'll :!Nin· ('IHlli\!h ~~. ~rn li\r{\)r~ !

" ,'11 \',1'}' ldlld:y PPdh'd liw .i,mL I "ay, h. :I qlDf';:.~i,m vlml I would

;":1\'" \;,11\\"'.' j;",\aU;! hI :t-k, I 1\!31))',\ l~",w h' put II. hH! wi! h~HI! !h'l'iril!~ '" ~:;'." ":)'dW,, ~;\a!! WI' Imi II ,hI,; W:lV; \','1!l'" m,l'."'~''',I\' rwonrv, rwentv-Iivc .'1' :L;.~H .\';\l"" :.;;;" l"al,y 'hI>!" man;I';Y;'~ wonhl unrke h;;':n" un liH' pl'I',"ntllll ehar;Fi.'; ,,'; lw j,"n','w.,l' \., a l!i'fah,t "Xh"m 1l:lm l!il'" d" I!!~d:l\', \rnnld \'011 au-n"\'

'\(i~; !b;,·!,~·,\. I dn nut Im·,w wlH'lIwi' t "iHIM'Il!' IIIlL .. .'

!I Lit i!- 1,,11 II ulIllllwr wnv : l dn nut want 10 ask YIlU nnvthinu that i'i ',;", :;.,.;,;;h1{', \r"il2,! v .. 11 Nm"id.:.' il :1 1";11,. ,tall,'llW'1I1 to ;i;i\· :1I;:i·b:ml;.; nn' tn~ ,·.,Pall:r:i! "\"I'I!!I 10 ;1 !af!!!'!' d("l.':rp;' 1111\1\ IIw\- W('I'"" 1':1\', IWI':lI\'~ :1~' ;". ~:';;'Y'~';';!l"; :mo'! A. ;\l!:dll I am h:mdh':llljwd liH'n' 'hn:IHl~{' t'wn:< Hnl 'in

~ ~;~ ~~~~!!~.,.;~ ,l)f it «\t~("nt Y~i1,~(~ pr rhirtv vvnrs :H!f'~

I h:hl Ii I,,! "i !'l(.,,'rh"I1,:\· 1II\·,,,,;If. Iwl on flip hauklue NH!. "It illl ,-1111. T.d 1101' 1\111 ILl" '!lh'~"d":i \0 YOH thou. .\Ir. tuwrl':<: Haw in 11\1' Hank Iii Cunmln. or I" 1i11'1'I' In v •• m' lHlmdt',IUt' 1'(,I'onl" . IIi I.i !'ilH:I\I'l":t1 thaI till' bnuks Iwltl m~ajll"t (';mmwn'ia! .1111 and I do not know any way UI makinu "IH'II a thill)!

'q~~ ~ -n:~ ~~~ iYp~\" 0

, I.l. W"IIM \"I;H think it :I .k",irahle tlilllg III :IIM 101 IIi(' monthlv hank iOlalp-

,ll~'l;!' :mn!;H'r ('''''(''Ill!l ,,; Il!\" I:u'gl' li"j 111M nrc ah·,·mly there whidi ,,:ouhl 1':111:'\' d,(·:~, !" d:~!·h,~t' UIt' mnount; (II '''nllah>ntl loans ht,hl 1Ij!;lln"t borrowines? ~~:\. I old :w[ IhlHk l,t wmll',1 it-II 1II11l'i1,)1L :;:t!'\'NI~, nnd, of eO II 1">'(', it would "in\'ol\'P ~~H i'!U~!(Y~ n~g~U~ vntt:tHP 01 work.

II ;"1111""';' w!' I.d\!' a h~'l'pthtit'lli pllj<ilinn in this, If, Ior instnuec=-I Hill !l''l~;I;':;Il;c I L,:.t ! hi,. ii' !lit' t:li'l',,",,·I'1(' hauk. .. an' ('XIWI ill!!; :I large amount of 1'01- :alH:IL"':t\', "'1'1'1' Ill' f",IIl' times the amount of iill' IUIlIl. it would !in\'!' a tondQW'· !I' i ;i, m. : In' onlinarv connnerelal ('n,.lil uf tilt' countrv. would it not'?-:\" y,.;" :1~!hn!ll!J! T think till" {'ll"l''; wlwl'!- YOH lind that ('nllatf'rnl is insisted IIpnn ;u ;(,:\'Ihiu;! ~aw that margin are qIlHl'l'an·. anti that n'lT Iew people euuld

:~!YIlr<1 it. .

Q. Tnm makluz no statement. on it: thnt iii It hvpotheticnl question. Let me ;m! ;wi,ilwr one. This if not hypot}wtii':ll. it I;: practical. Would it, be within Y"lW ,,0\""1"" :nul :,;lir I'lldll" IF j!()\'l'I'lHlI' of till' Hank 01 Canada to asecrtaln just ~n wiml i'xh'nl. !'flllM",:';i' ,,!'l'lIl'il\' is to-rlav heir! against borrowincs by comllIl"rdal m.:! in!)!l"lri!d jil'IIl;:?~"';\' T think' it wOllki Ill' Yen' difficlilt t~) draw :mnhllli! Irom r irat , )11'. S"('\,(·n". n .:::C('JH;: In lUI' that tho situntion (':\n he .I!':,"rihni in I hi;: war: 1'111'1'(' i;: no question hut that the banks nrc tcrrihlv k"I'1i {fl 21:1 ad,lliion:l! loans, It j;: their livelihnorl to do so, and they badly wed

~ n 1 hr ;~,p-p-rn in ~Lt~t

;tp-d id"'H ~

~';" f~_~~<;--hl:~ hr;

\\'F ;\1'" H~pHl hf'-n_' ::U-id t hl ,";llli" h~}~dnr-_c-~, I 1 n f~.4 -J' r:.,;-h-~

Il, I I h uf nn~ 1,\-'hnl! f:in.liwlll I!ll~ l .. a ll"". h

{l, <;,,,,

pill t i'i" "jl I \\,'f~ ('~UH;1 ,t n

nil' "pt'niH! (':llw;ia, \\' rOlla.! l!iflll' Irruu I !,\. J,:,

,

,

\\'a~ iHit.Tjn!~ di:--Ptt~-t' 01 11

. IJ. :\(1\1

il 1" :il~d I were, un.k-r Ilia rket , Ht , and. i' rhl-; n Yf~ry im Ii ('H~-';-' f1i' a ('1 \\'o1{;'l hn\~f'

(l. \Yr·! f:;·"lnr ilf ,Ifon'HI to Iii tltruH:dl ili!' alld;, dl'111 wit hom 11111 1>111'11. thl' l! marker whi (,HI'\'I' that 1 variou« ('1m dad 101' it 1, i II(' Iii!,,!!" fd Irom dw im in film: In ; 1 think ill 1 from rho 1'1' <ill not I loin mH)ii" \,xtu

~~""'H\";~' ftt" ~~~:\r"""

~ th!lt i~ " iH'~ l\.~·

~ 1\"("n I ~~ "" n.~' n~Jt hl

L h~11 nH ~: tln't~~ ,to r('~~or~t,~ innH~rf!i(t! 1 a thing

nk "hil!'~ d.i i":.HI,~t}, n ~~ Of! .~ ~.~.<.A ~ I iH\~O!\'l~

.'I'~~l nm it f~f ~fg)l~ n tpn~!~ nnt'?~,~~A, tNI nptm *~ {'ould

f

t

Lr't lHf' }C ;;\'iihin rtnin just hy eornio drat"

n (';In II('

~ ferrihh: tdiy m'f'~!

, n,,'I""«"'i'(" lhlqlniil~ u~; h. liq,' Wth'~r,\

W~'R H I ~"~'\' ~I~j Ih;t ;~!M ~II)) I" lin;,lnu :InlS '~";\l ~!"

ilO n':nliy tJl~ il~l!nl, wlikh i, nw SQ!h,jw'fi anmHQ.":r' ij\n" qml' ili~,"H"~iq,n,

h:mk~ ~n" :\ who)!!'. nl' ii" i hdr umm,ll\r.'l'i, am! "iI"w ,mm,"it'ln~ ,.1' Wiiaq nlW mi~M i':li~ ;I U\"j,,,,qm'lhh· dc'I,? ;\1',' !lw;,' h", I .~ Th:ll wit! 1.(, :1 qlw~1 km "I' illh·ili\l:,'IWP in 'lpl"':ln~;,i lin I

• ';0) III l<il!'lIl., in wi,iI'li Ilw I i~ ;\PP!'(ij~lr'J1!'!L If 'lUI'

limn''. apIH'ln,;nll.ij IIw Ii,,), b hl:.:l·ly 1<1 \'t· mhl'l" il,\c,4»~mlhh' til:m if

nmw':ilh'c"c"

,\,":',lIlIh'I'''II;' :mol iiI h·B'''',. III HBW~ wlu-n hmi(" :\i"{' qmd>il,;r

~ whidl hv d",l\nil hili :11'.: I im,':" of ~m",' I'l'. if Ill!' \tor,l

n'~lw' I'~ !i"" W!H'" I , t;nom", llwrt' 111:1.\'11\' a fl'31I!,.;wv I,' <q,;wl"wh !ill' prilld,"B; w,' :11'1' inll'iH i,'nh~;.: wil II ~i"i':ih"'i" ,'immUA', hl'I':HI"" fif IIW'i' :!IT' "'";'liulll lmd !OMl~.

:m.u I 1111"1'1' :\1'1" l"m"l1lm!" to Im11, lInt"1' 1,",'111, (Ihviouslv, 111:11 Idwl .'1'

I "all h" ,1\'1'1"11.'111'. nml l dil lInl im!!!:!\·"t I iu' •• " I.: ("\'\'1" in:,li!i~':iI hm ('if 1':1,,11 lm;,hlL~c, But durinu lillw,l nl "PI'\' ~i':iIl lwo!H~ 1161'1''' \':nuld III' n H'lloil'!W\' I,. (."'1' i";·k" .. , 10"''' In a ~!n';ijh"l' ndl:lil Ihnulf l>r~!lii" w,'n~ rmm' "111i~f;ii"hWr· "

Q. I thin] e. :\11"_ "1'''\\'1"1''', you 1.:1\"- pal ,\"n!lr nIH!"!' nn p~"dml''' llw crux ,,{ OIl!" wi:nh· truuhl« :1I jl", lW~''''''l!! rimr-, Th· h;lh"~ ,hi dleim. :I" a l1mHH' O! fm!. I!mt I ht'\' 1;:\\',. nn almi,>lal1!'!' d 1l111'W\' Ill' l:wHtIi.'". ,.,hall I "ilX. (nr makin't I.·:\n". Imi thut dl',;imlilf'"'''liw\" 11"(' II:!; ,nul'll" ,h·"iI':illl!,"" \., rl'''.

Q. ···d""inlhlr- lmm" :l!"\' linl,' :\\":li!:IIII«', J wnndr-r if J !'olild diun·,." In pilI IH" ~iliWlhlli til YIlII, mid :11-!:!l1I lIilt iii 1I ('!'Ilk:d way Iml l";HIH'l" III "" t' j; \\'1' ,':ml!d II lid 0111' wnv >lilt !Ii !hi" dii"OIW:L Iii 1\l2!) nr w:m, 111 IiIHI lwrind <II' IIII' "P"llit,'! 0" IIII' d,'p'",·",,,ioll, tlu-n- \I'pi"!' /I In "!!I" 1;111111,,·1' !Ii ":!\\'~!!dll,, ii, ';I"\-rn e;1I\:\<I,L W!WH dll' "Iuillp 1';11111' :lll'1 IIIP l:illill!( "rf ill huildiuu, ;llId" •• !On. d!!')' i'oHnd 11Helll~!'l","" with 1·IlII~i,kj·:Ihh· im"I'IIIOl'l!'" and ian:" loa!l~" iH"~t 01 dwm from II ii' h:ml.:" :\uw, wi!IHHi! \'l'lIh'izimt I1w hank" lir"a\'illt~ Ihal IIii'll' ;11':1,,:, \\":ij;-.. oljtTnH·,. n2" u( !H·r\ri~ .. l1H~ f~~.~1 \\~:l~ I h'"I·~· \\'H."; ~HUH' P1·'1·-;.o~Hn· pHI n~i t !lP!H H·I d),'!ll'~i' !I! ill\'!'IlI\!dl'~ awl ll'luld:1l1' hnnk III;lll~'? A. Tlml I" I nil",

i.l. x .. w, it j" :11,." t ruo. J think you w '!I"I"" al h·:\!-1. I lWPJI"ll :0 1,:;0',\

i! i" :n:dl think prnlm IIh' it ,'all II!' :11'1'1'1" ,'d"o" 1i:!1 1l,;W\' III lIlt',;' n"l!','n:~ werv. llll! lor ! H .. IH'!,,,,,lI!',,, 'IOI',""d 10 ",,-II IIwll' 'lIynl: u;-i,,·, dH'l'C' l!d!;~ nn -.rnn:.;: murk.-t. :iI ,'j'IT i,,\\" 1l!'h,,,,,'?A. \\,pll. I 1':111 0111\' spr-uk from mv "WII l'\ill'rif"!W;' :01,[,;' ,b, pa;'!ir,q!a'l' Ill'll! you mention it \n'" , :t ""ry 1~l!·Il·h:1' p:.;p,ril.;H'1' and n ",'!'Y llllimnll' 0111'. Ai'i;',· fill' smoke nil 1'l'-:lI'pd :1\\,:1\' I I'Hlllln! reeull nuv I':l~i' ."i· 11 '-11"1111111'1' who ,,:lid III IIH', "If nnly WI' Iw.1 JH:ld 11\""1' nlll' "lOPI\" w',· \\'0"'' I '11\ ';'.' IU'!'11 11i-' II'!' uri."

tL \\' p! l. I hat may Ill' 11'11(" hilI II ... 1l!'l'iu, I \\";\' :i I'l'd I)' hlll~ !lIW ior :!llY i"I'I'H' of ilm! kind 10 i';J!PI' ill, Bill IIH' point I alii mak inu i. lilnl liwy WI'I'I' ron"-'! til liqui,hr.· nlld IllI'Y did liquhlure n t low pl'i,·,,~. -:,'ry luw Pl'il"''', Thvn Ihl"ll:.~b till' al'li\'ilY of till' gO\,'l'l'I III WII I or Ill!' ('!lim!"), 1II:0'k!'H WI'!'!.' illlprp"l'd alii I ".!t'umrlll (',:IlW ior lumber. Tlw·'I' ";',\'~Jllil! inst inulun« found tlwl!l",·jn," withour fUlld" thnt would bl'idgp tlie :mp 11"1\\'('1:11 1111' (akin~ (II log:" nut of the 1m"!.. Ill!' munufacturin« or 1111" IIIIllIII'!' mill II", dl'li\'('I'\' or' tlu-m to tlw IW\\, uuirket which Wa" npr-n II! tll!'IIl"-~':\' I had nut l'!'alizl,,'1 tluu, In t hr- vurinus ('",,(," lltal I am Ihiilkilll! 01. awl I r-un onlv ,~p('ak from my n\\'11 «xperiouce, th,variou« NlIH'el'll," who had liqllidatl'd lll!"~.' "1\11'1;:,, in 1U3H and 11)31 \\'('1'1' rather gk,(! III it II\' 19:J2 IW(':!II:'P I hen i lu-v ,'ould go ill and cut 1';.,·,,11 lone lumber on 11i(' ba .. j" or" II ,'('IT Ipw ('0"( III' opi-rnrion. and couhl t11f'1I profit. an;' did prnliL Irom the iruprovr«! d"IlHl/lil an.l ri-ing pl'ic'e:' whirh eamc, "peaking from memory, ill rime hi absorb t lu- 19a2 ,'nL In tho",,, ('/li;(';;: thai I am "Iw:tkinl,!; of. the cut. I think in 19:32 and l'i'rl;linl~' ill IH3:J and 1934, \":1" ,,It'P1II'cI lip \'("T mntr-rinlly [rom ilw Iln"'l'dilll!; Yi'm'~ ;llld operators W{'J'(' ([bll' to get 1111' funds to 1\0 that. I do nil! think t luu Ill(' donumd inl' Canadiau lumber ill tho;.:\' vours wa~ to any

mnjor ['.\11.'111 1I11'::lli"nNI hy l'!':\"llll of luck of :,upplr. '

N,;" tt!l!~"rQ" W:u", nUll" hnlliMl:!)I~ ~~«lIinP~~ "In hQ l!nr"'a'~h"lnU, !mtt ~I. \'nW til!' 1',X'n'{W~ Tjlwhftn~l,t~)!""nlilil!'ftliU iUB [nUg"i~Unnl~'\Q" m~h!'lkq'L Ih:"g Uln Jail, r'::tiRUW W:'Uhlfl,\'

i!h ur!fl:tH'k~"t,

t}, H",~\'~"\C.«"~,,, I «hi m]tt Wi~ffC hI! }!U"U unllll' £u,ij(,h" (i'm"Ut, \riml 1 w'ln~h,qi h'lff,d :1,1 \\I,':,il~ tcH,.; T!m~ ~"'IQ:li r,ti ~'u·t, ~\iin~"h' [Uu." ll»):;mk:, «lli~th1 14a Im\'I" 1»1'('11, illi.lJ t ,;;<t}'.

Ui»w;~r,,!' bhhw' .>';uw'mi!! u'ulwili;mi,"<'"l. W!WiI

U', juu ,vlt~, iii Iii:., illii'fi n!Ii,~! I!/win" 1"(li!lajh'nu! !nl I!w fm'm «it nn~n'l!hWY qh~, h:\Hi>~ "n~llil u" im'\"u', um,I.,c' a!m",\' ~'iuT'~Um1'hmq'i"~" l"ny, I'RI/(';' ,,( l'i'!!1Ih"nu~:B,-"A" I «hhl" !il\'Y .Iid nil ~i ~g'NIl mati," nil", " I '!l~!~ml'h'llly" ! iwrl' WI'H"~~'Wi" I,!wnuh'l'f whp WH'I" wil'l"j Q"m~n ~"ilm.

iifl~ Ib, pn'IToiiilj! PPI'ii;;i U~u;il ~lw)' w,uuDYI! ~lIH'\' . \1 ~m!h'l~h~", l'f"I'HH'

IY'j'mi'''' I" iV,,!I~llh" I,!u"i!w~f qllUli r!lli" "q'.d~" I!ijq',)." "';WI~d hhY," !ii,,'" In 1m,'!'

~) i,H ~"~"!)~~"""~-'--,- ~;rja tt!llSli Ii if" nH~':"; ~b~ ~~n ~u·,·,- ... ("t'inlU, I know ({~f ,~qlJtu,," ~n.ja~ \\~~-~I~p ~'''l!'' j" Ih,' r,,~l,.i ;:-;:nak" ;';ml,,,, ill !«'wuu" :H'ij"'b" IDW hlitdt'f awl U\'r

h"!«'r;il~""1a "I' nh'ttl r n·f· ~!mQ m!Vflr:l~iillL :\Jr.

I ·h U~m' II", H:ltrui. III ('~mmbl""!*'>1\!'l'alill!!

!;IH!~k· "~!I""II,! waldfl ;l ... iHl:llii~il Ill' th:utt kiwi ;;wi "bmld

,;'" !" n'''lnU';\1'''llili :I i"~~Hdillnn of IIn:1I Id~».L< .. ;\, '1'111'1"1" Wpn'

?n~~.ia~ ~"a""~ .. " ~h~~~I-L 'ld op~·'·~"~H~\j!'·~ ~n~h.~: '"' ("'Uih~D.I ~(:~h~..; h:u»k..;; uf thn(

":W', I :W, IH!Jkior: ,,( "lH' n'" '\\'1' '"l"T'" wlwn" liw\" WI."r'I' h;~,lh" !;.,! m. with c:"':,,!i~dl 11;11<1., :md W,'I'I' ."Uij'!:.;,:,'d !h ,I ",'iT \'j;mt,',II'; (~iI:~fiT'1 "with Cal\;,oIi:1lI !';'lll..· '1'1,."\' lIWl"'"I .. !i' !!; .. m:i,! il '" ,ml,1 I" .. III'''' II, Ihll'I"'I' iiII'll" Iww nllt'l'll'I"l::' l,v i"I'n'!Il! Ibli. I::!" "!!,:O':,h f'''lW!''rll,'; :m"j nhn:iillil,;! lin;\lw,'- 'fn,m I :":\h" ha!~k~, Th:'1 i .. wil;n ,"l'jJ 1111,1;'1.1 ,"ull II 'IW'''lh'll Ill' IwrN'nalilil'~

'c'! 1"'!'''''lml dim"'lhw .. n,II'l"iI!l: i',I" II,," ,,;j1u:uilm, r;,!luT IlwlI '''HKlhiU:I: :'.~J~~'~~~ rp tl~~" _~!~ IH"r~e] p~-hH·ip;~_- ... 'n{ h:~nh~j!~,L

(t I ,h:dl n,,! I'UlHW liml ill 1'1 1"'11 y~~11 will :1;11'1',- Ihal.IH')1 ,I ""B.I'!inll

'!j. iI~ whi,'i~ I ,,1:110101 iI., "IH!lwl'mifill IWI\\'('PH Iii!' nnlilwl'.\" {'nlH~

,".;'d 11;;.:,1-; .. ;01<1 Ii"" BallI; .d C:IIllid:i Ii' ""I' fha! a lipid "f 111:11 kiml j~ ?"l"\'"d,

( !"!l "f 'h:~! ,'lmnw\I'r, I .;m'pn~~·. ('1111 ,'Iily ,flTdnp OnT :i !wl'ind

", \";n'~ F"R' ,'x:'mplt'. if nllp IWlml !II'''' ! hf'r!' Wn" :\ \'I'!y f"'Il~id('I":ih:;, m'nl ;"" "!';'~11 wt!nili!l"'1, :ml! i: "l'l'lIh'd "II I'~amill:iliun pf ~lwl'illi' ('II"", :Ii"l ;Ill' "'i·k~ h:n\1 n·1 "'('!',' "III'''' whi("h h:lllk.; I'nnld rl':.~II11:lhk I II" I'XlH'('1 (.d I" I «kc. ! L· n~ I ! Lid, ,hal would IF' :i illll" "uhj,·\·! fill' tll,",'u""l •• i: h(" WH'1l III!' B;H:k"f «b~d~:~d.a =~U~! <o,-'KilUH" of 'IH~ hHI:\-idual hn1aii~~

I,~, .111'-' t,ll 11m! p"im, j" it II lail' IIl'lJ~ !o_"." Ih:lJ ~n:my ('!llIlIill'rdal "lllli'·n;" in,hHl'hd aw! l'!iwl'wi:,l', iwn' :1" .! "('''1111 ui lIa' ,j"pJ'P';"ilill found t:II'm·;,'n" ".fkr·',\"(·nd n'II!"" nf '/{'/In':,,,,hlll in ;, ;IIJ"'ilil!!! whiTt' 'I!('~' did no! have ,·"lb1·'nd lim! wwlld !'('I!,.,ilil!f' :,,:ni .. f:tI'fH'\' {'ullah"nti in a bank (0" an :\fl,':011'1, ~,,-;\, (II' Wl"l'!'llOi ill :! Jlu"it ion ;t'" a l!llill~ \'lllll'PITJ which t 1;(. hnnk 'h'H~;,! ('lwilll'l! it III IIwk!' l!('lwml IHh':lllt'e",

(J, Tha! i~ kH'pin!! ill mind Wh:it yuu "lIid n I!lUIIWl1f :lJ!1I lIwt ill I imos ,.; ,~; l'n··~hm dll' :H'I"ra~p Ii/mkinu :U'" iuu inn Ilnrur:liir i" :1 lin I!' 1lJ!)l'e (':HII iOII~ r'l:m iii liml'" pf :II'tidl\", Xuw hll\'illlX dWI in mind. dOt,,, 1101 Ih,' Ilo"il!oll nf !!w d'I'IImwn"i:d IIIWI:I!\\"!'r, indu .. ! ria! Ill' (1Ihel'wj,:'(·, 11IlWIln( 10 Oll{' oi a ,.! ;i!'''IIl:HI' wlu-ro hI' !";mllo! hn'ak 11\\':1\' from it: he 1ll1I,,! cit her Ih'Hr int 0 ('OIIlp!,,,," h:lIlknlpl('~' and go 0\11 Ilf hu~iilt';;". which i;.: 1'('[111." what htls hapP!'lwd will! :1 i!J"('IH many, 01" III' must find somo other WHY of I!(,tting mouey ? And i~ it Hot just ill thai !j(,ld that we might work out , shall T ;.::t~., :'OIlW new 1llf'lhwi .. f ad:tptint! nur m1whirwr."-usillg my own phrn;':('oloAy,-or wlaplilJi! OUl' bankina marhincrv 10 111("('1 0111' Iwmil'(·:IH'llto;. (f; thc!'c not a fi(,lel 1IH'J'(' tim!

mighl Iw (l('('upi(·d'? '

-'fl-. Ih:.\cll;\L\x: Is 111:11 lW! I'll ;H'!'Olillf of tlll' hO(l!IJ"'! ~ '\iL r~_n~Lahj Vg-!lnl T."\.t~-~- .. _~

of In{ lfl t~~l

h~:i -U,

rjnt~r.':' 'nn~ lJJ fHH' \1 !~~}l!H ~ I :<I,i

milL

tn 1'Hl t hi'- ~h pn~~ ~:

~-.:\ ?> f ~ 1 t~f {hi

W;i,. ii fun lc

U hallkii

('uiih' o

~

nHf!lt>~\ W!' q, fi,wnd Ill<' ,,'a

~riH h~ thai ti \vho p: {itt, :"ttl 11<' din',

q.

tratiPIl

~rnUhq llJ~; ti;-,

vou ha' (Jf "'ha ('O-OllU' ilwn' j, e nit !'II tak(' OJ l1Wl'{, tl that th Ihn! Iii eapiwL rapJlC'd ('qllit~' I

~:-;<:rpt)rt cI:th,iy

~u

t '''If''', \\~~lt::t~

mnnr ~ -r ·tH_n~ ~"-~tHV(\; h~~ \~~~

\\~~,"[l,; thai W1!!\ ,,/;:m

ef-r-{~..., f~~~:?ln lit ~i"~

"nH1"" \;-·~-'it

crjt-~~-l 1~~~~"J I

iH ~ .. ~o~ J~.{I",-

nnk

f

H"'l)i. lk ~~II;,\"t~:s ;') mil ~ I",~'UIU,~ n~» "k',~~n w'i,il wlmq i" q",'I~I"

),11'" Tnwnlj\,(: i uilillk In Ill![' f~~',M \'f1iUU UAwbh~iml, 111',,1 ,»0' :dt Ihl'l'" )" lhl" Ik'M {,r: hll:(m"\\'M~'ill .Iu Ihlq D",my mm'«': «h,m :I l""lt",!n",uh~q: lm"ilw"~ ri~k 1md wMdii ;:1"'[iD wmvld l'xlw~'1 Hu~" Kmnk,. nil, "~iij!plly, T~J'ln ~hl'I'(' i,e' ,\ fm'llnt'i' ll,'loi "~!' l,l::tm", whl«'h ,1H','· $UU'd\'w!mt m!iI"l' i:'li"I,,,' (ilim 1111I1'HmL If 11~~'Il" \\:.11" ""uwlhillJ.t :,1 !,.VIl!;Q" lm"'~i,«! ,m, will. ti i:~b' "pin'n! ~;)f 1',iIVUi'illil,i" II~H".' ! W'1 loail.::hu ~li' ~~ipplli";1 h,,~' IJw M),wl\::", It i" ill l!u" ,wl'l!mi i"lh';~~I»D"~' !~ml i!iH!'I',,, il,' ,I '''iwdlai q'.bn!~n 'ffl ('~11ur,~1ll!f :iUI!1 jllliAuwm" "I'lwll illW NHl l.!!1 UiHl) "HiL :!Iln! 1\'''1' "n" i"~l wlwr,' hililb ah' l,h"i'iU~h' lin! "mil,tbh" h:mk Imm~, ;\"uki!l~' ,,&11"1, ~!Oaw \nm!-I u'l'nih' nw:w !lwt ~ilW, W:I"~~li·llg.jnIH IIi,' !m"i,m'''''';m~il:nldnn!.!!:'~11 lilt' hU¥ilh'''''',d-.k" "TIIl'H' tin' I"al'il,~l «"I lW 11li1:\'hlmul 01" iii", uhlliuy hi q,hU"un i"!~iiQy umlwy ~" lill' \'I!111 Im'Il11\ '1'<.1." U t~· !'a"l; 'ii :t Imnh"b' liJlI"U';ahw HWiu lu,; vuu I,WIHDIIIU',L I Jr' pnBiml!!\' 11;,,1 ~I mm" mllY hIm' IIml:! I'jmpil' lillll!!,allMI' 'wml', :Iml hpi'.mud 1l11!:lin ,i li"\'IW" I" I'il! " n'l"I:1i1i limit ;Iml Ill' i.'dl iue AIH~'h'l !II' ~t'!lh'IlIl\\'r Ih:l~ till' OIwinni.: iil,

Ilt'X! "~':,~pll \\':1"' .~t~,'h tin:!1 if hi' 1"lmM !lllt,· nm "III' million 1'1'1'1 lw wUlI.!d ,I" pn'; i;y w('1i nn it. HilI In' dil! Illi! !nln'l" ,dtr l"'i~h «'I' ~lil»ph,'~, iI." iwd I!i~ I'x!i,'riHIR'(" :HJd I:i" mm"iPiIlN'),. J{ th,' h:illk :'<UI'Il!iI"d lil\' i"miD'I' aUinH1l1 of ",;,,,iu n flllig·I'.1 fIJI' IiiI" JlIl)'IlWW or Wn),tb, :m«l"Hppli.,,, :iIll! IIi! ~T 1111 OH''';I\\''iH:! III tlH" imlllwl' ill IIII' 1\ll!iiWi!l~ !"/ii'il1'l!. :111«1 if Ill" Imol IWI nm 1m" :my Iron"! .. Ill: ,HT"'ml III \\'\":UIWI" 01" 111111"1" ,'1";;""11 ... lind IIII' lIIad'l'l Ilw !(lII,,'will~ W,l;> :1l1 riulu, ("","I'\'I hin!~ Willi II , III' :111 rizht. Bm if :!Un M!I~ Weill \qulI\! !Ill' f!I!! !'j,.~ \Hiuld f:llf ,m Ib' h:wk; Ill' Im.1 iWlliim: In I"'li!!:i!mll' ill :my"w'" In",.

lIu Iii", . .lIt. 811'1'1'11,.,:

q. ). .. !!wn· :IlIYlhiIlJ.t that Ill(' Bunk 01 Cau:Hlu, in "'»'illwl'm!O!l w"h !Iw b:mkillg ".\''''11'111, mn till hI ~('I'\'!' jll,.1 ~u(~11 II ('11111 ing:l'!II'Y II:" l"at:}~o~oA, ; II (Ii;n i::hc whnt vou Il\'t'd i" n $lIPP!" of ('(J II it v JlWIW\", WIU'IIII.'I' thlll enu III' ~lmHld

Omk i!"i!lH 'llIIh!h's'illl't'{''', I ~k; 11111 kl:'''':, .

(1 .. Ther« j" a lu"",1 (nJ' it, nwl Ilwl'c i" 1I1l!, :lpp:n'I'II!i~" HUh'" !Ii that 1''IIIi;y llil'rh'y :/\':' ii:lhlt·, \rIm I [ am lI'ying III ~\'I "'!, ~lIn'I~' liw!"\' flHH hI' ~omd hili\.! WI' nill Ih, II" II !'III11IU'\", with Ihi", !,fI"!'UI IIHU,hilwn' WI' have. Iwok/II!! lllld IiwlIH"iai. ('W! enn Iw "0' Ul"gltllizl'rI a" 'III ~{'''\'I' "III'1! :; 1IIIi'PU:"I"!" .A, II IIw.\" ;W Iii" I'a.",', of I'I"U-~('. tlun ill IIlI' ('il'(lIIIII:o!f:m('('" ",hidl YOIl llll.'n!illll, thll'I' whn "rili !.a\',· j'Pl"!;liu l'l;';OIlI'{'t'", !Ii tlu-ir own lI'ft will ('lIlllm:illd Ill!' :liidHiowd I'n'di!. !1m! I iwy will iIWI'l';lit' /il('it' "1l1'I'm iUrI" um] !In ! Ii!' 11!1"iw'",,,, it"a dli!! t lu- OHn \'ih~1 I';, :101 {'III III 11:1 WI dw 11"1""''';11'\' !'i""nm'{'('", without Im",ill,'''''. In lhal ":("'", ;1 ... '!1m 10I:t! III I Ill.' Im,.im'",. dOll<: may hi' till' '::11111', hu: iL~ di"lrilJlJli'll; In".\" "," diffl'I\'IIl,

'l, I think WI' IIm'(' III :!llmit it j,,, 11011. "\fl", '1"'\\"1"'''. iU"";tU"" II-ill:; 1111' ill;r--

I rMil'll :\1:', ..\1('(;1.'('" ~an'. WI' know I hat \\"\, have IHllldl'('!/" of ilwu"ands out of ";od, lin' willill~' III wllI'k; we know {h:1I WI' hnv« 1'1'''0111"''1'::' :lllIl"o Oil, Xow, W(' :1;'1' 1'1'" brilll!l!w:, tlw:<p I. Wn 1111.'(·,111"1'. J run llOl"rt'kin~ I" !!o hac'k 0\"'1' tlw ,bm he ·"I.l\"'l"l'd. btH ill it" mor. minute awl pl':H"1 it':iI way i! -('I'lil" lo hh' 1;""',, 1:- :tun'lII il":iI Ihal can hr' ,Iwll': :md what I wish, of j'Wlr"I'o.-and

n'lI Iw\'!: n'l\"O!llIhl" wdl :m';"'(,I"('1! it·-,-i" if IIni tli \'hwidMp Irrun \"011 a "i:Ilf'II1I'llt ;,f what eun hr' duiw. at INI:4 \\"1: 1ll:1\''!I'j hdo!"!- vou tlip d,."it:abilil\' oi ,.lImp 1"i!-lIp('i'm;III1,-~A, Tlu'I'(' han' 1>"'"11 1I11;'lIIP':' el"t·\\'h,:n· 10 go jnln Illal field \\"1)(,1'/' th!''l'!'i~ more than til(' normal h;mkl!!;! risk, J (':HI thin!.\: of an t-xnmp] .. ill tho rnl!p,1 glut!'." where one 01' more Ill'gaiih:atiolls were ;:ettlP fO!' that liul'jlo:;e io fak!' nn louns ,11;\[ were not bud from II,,· ",tar' hI/I which 1'1l1Ti('d a~ood deal IlHW1' rlmn the normal banking risk. Till').' 11%.\'(' 1101 iUlInd in the l'niied 8ta(('" 1/i:H Ih(T enn 10:'111 \'t'IT much 011 that busls, I think what tliov 11:1\'(' found j", Iliac Ih(: nepd,.; more .;jfrm than not 111"(' 011('" callifl!( for plln: risk of equitv Nilliml. I think that, in the Golled Sfnh'~ they have found thC'lllst.",(,:, h::lJldi'e;'lpPl'il hy an illnhilil~' in various ('a~!'" tn induct, individual", to put up that pure t'fJlli!,Y risk.

nml IHi Hl~m mu,ij Hmn, l~ii u" lima, lh~' U"!I\ •• f lwyyby"G' lju 1":"ftH"nu ( h~whl!" ;!~ niJllhbn,.n~

\\--~Ull_~~«! 5~_~~lll~'-~a~ii~u ,"_' ,_"

~ija.. hiuk. hy na PX~'tiU~UQHnnn n~

\::\"Uil"f"" ,!nh"ml'nl wntlhl h., n'n'

iWl /tom Hit\! I .. HI:ia, .

CmwoUu 1i,h'alli"('d tIe ij

a f('u;;~ in t-;a"'h~l"D~

b~iH~§" ~~:' i\r~» ij~e· ~#U"1I,"1" h~u'ijij\~~ ~r~~q" lumln-r HH-~rl"h=UH~ ij

!itl'll' 'hwk :11 $2;1, II I .. ::;;:.m, $1.1, $l:! awl $Ht \rIWll !hl'.'" ~;l\l'p('c1

;1 f:dl' ~br!'d bank I'n~h'ni C:lll:ldn ~:ti«l lhlll tilt' lumber would go

$111, n,m', vou Ihin!. the f:w! !!lIIt till' Imlf-hi!!hiH :I'l\ ill'

j\Hn'w\' (;H"j'll« ':wml~l W:I~ liquid:!:",! HI 11l'ie!' hi d,(, (':I"I"I'Hlu;lrkn

~d~~~ i_~~tIr~'-~i ~~:Hl":~ tnark(~f ahd "..{t fnrth~ I~~H~ tlh~ p~'i~'(C dO\\"H ~p it

'·'\l" '"U"" \\,di!l :-1I1)\"j' i'i'''lli lu·d:l\"! "A .. I tin 11m Ihink al!,""w" ,';,n \":Ikl' .~ ,', .. !hd:, -!:nnm'IH nil Ih:n. ~Ir. Lm·r~,b;.

I I !d;,k I will Hwk,' uIW. I ml! a wit III',' In II. I hav ... nw! kwi;u';l

~. m llw 1I"~:"1l nllil'" who ,,,id Ihzn II! HI:m Ih,ll' ndnliilT!, Oil :1 {'(Train

;'H,,·',';,! "1 hnulu-r \\,'\'" \\\', r :'.!!I, :1011 dw\" did IHlI "HI"I' :1 d:mmo,·~n:ll·dilll llw~-' ::J~~~~;k iiJ~' ~h'Fn-n~H"< ~rJ~~"y \r~~B'j·~1 th(~ir !n;~~t~·,y. aLl.1 ~~Hi ilHa! llf~u~~Hr~t't· \\'H';' Uthit;l'

~ !! tnn .uf !n~~{"; l hH~'q'o ·rh~· ~t:o>:t·d hi ~_~d dO\\;H Ln I BaO

"", ",:m. II", In:nk,! pl:n' :n ! ;111.1 8:.!O in I!I:II. III IUa2 ill{'

\\'~~~ a·~ "n~,\' :~~ $Ir,. in l~-taa :t,.,; in'" n .. ' Sin. a~a! tn-dn\& \\'e nrc still 5uri(.t·in~ :n.n,. do:n, !nn,,'d. li'Ylld:ninn hnpi.,.,,",\ upon rl ... lmll.l!": !I1("'+mllL~ .~iY. th~. ~~H'1"~"hH;d h:lhl,~ ui (1\H:~.I~L J Inul,(, tu;n ~ta(eUH"HL J hp liI"H'e ;-..tart."li. (0 _~!(J

;di i"r IU:-;:L n Ii" h· a uvr HH~ J.uB~ nf I iu' Hquitiat ~nn '\~:t-~- «ver. uml In..,day wr";t;"~' -~n""j"pd~ d in (·).Iaininr.:' n prit·t· pi 811. ,,"hh·jj j •• , ~~ni ~rj jl';~~ than d!t' prlf.(i :~¥ !P2n nf iu2L HHd ~i i~ ;HH :"-l"IHu;!' :n :f In;,<~ 1o l!H' HHlnHfHe~ln~f~r. 1 \!\~a!'tl to ""~~"~~ :,~ i:;;,~' HH"l'rh:dH hid'l\. ... I_~~" (~nHad:~ !h:" t hi- fnn·pd n(H:ida~jnn h:t~ ;~'trdb:

"Hilinl ill<' ('all:h!1ali illdll~! 1'\' in ('n"h'l"n ('(muda. I think that some of the lHnnL.r~· lwn· a1'l" \,iltH'''~I''' ,'" IiWL TI,;~ \Va" fnn'pd (In rlu- Auicricun murkot ,,! ":,~l It n C:uwd::. and fOI'!'"d I,~' (·:\11:11 •. ··11 lumk-. :md i( ha ... Pill til!' lumlu-r Lu"",:~~~,,,,~ ~d t·:t~~prn t ';tll: .. la in ~'H~h :! ~l~dt' of :dl"ai)"-~ lL:t1 tIl(· lunliH'J' H!t}' •. hnn! .... ,,,,.dd ""; l"';;;;l"L Thp:, .. who lian' n·~tml('d ill 111;:;3 \\'('1'1' Iho~l: who \\'('1'4' allll' ~n t~1~f. ~dH ~Hnnn:!!!C Inuu 111 •. ·· t!n\'PJ'IU,H:rH for ~jnH·t i("ftll\" norlrinc. Different n,,jw';d ',iwil' "Iliilll'a~(· p:iI-,':' 1"'''111 S2.1iO !Il a:; low :I" 'tin tu Il'y to ... -lal' Ii:., hu-ine--. '1'10" liu k- III:!II in tilt' bu"h \\"" (·:ll'llin;.: not HI1H'!, more thim t.1l ITIiI" in lfIaa. I understand YOIII' sl atemcnt to ho that in 19aa some "In' "I.li- III llml"':1 1i,,1 .. proli!. I dn iii!! ,'ailllw! :1 I'm!it. I ('nll thnr "Pf'{,llial;'.n \d~h Ila' \H'o\'inl'(": timber J'i~hl,: and labour sturvat inn.

\11'. L,\:'\J)EI!YOl': :-,l:I\'l'!'Y,

f; if 1/ (III .• 11 r, SII/', lis:

I:' '''1\\'('\'1.'1', Iii: .. will illll"i"a:,' Ih., p"itll, .\11'. T!I\I'('r~, namely Ihal llJf'l'e " a tid.! ill ('nIHII'I'doll with the relation of indusf ry to filltllH"P wliicb requires <ndr ill thr- lit:bf oi' modorn ('II11dilifllh, and what I Ill!! !Hlpin;: j~ titat ln-Ior« ~df. (;ndWIH FUhl Towr-r-c.]

In

luittT$ (,Ti;lin

m:m ;2 tlui'~ring : th(,

!~~~n {\. \\7~<~

f the ~trkl~t [~nl~pr

, :lhl .. 't'n'lIt ry tn innr{j some (~Hln-

then' UlW" ('(01'1,'

WI;' I'«mlpl~'h" a hI' lhu,~ I"m~mnjlli\" WI." lIP!\' )H"n~m!hinu

;111,11 ill «Iml NllW, UI'I 11W n'l"f("I' \'\:1)' hriHij~' \'.1 11 qUh4iull

WI;;' II\' 11:1\"" n~UH unv n't'l!nL :wd if \'1\11 Iw\'l'

iu rm~ l'lIIt ~'\m ,.,upply liw n·I'I\b'~1. ili\Hnu~ ianl::: 'g iw 11':',,1""; lfoijin ('lIwull:an

;~i' !'~»mp:ln'jl wHh :11111 f:liilll'I'" iu "!nwrh':ill~Ytll'm nlld

.';~''''II'm·[,<'''\' I" lill'l'I' am' sueh

f' I hiuk liUlI till :111 empi eouhl Ill' D!w~h,' IUl!\'! ""!I'll li,j!;\ll""" ,\,

«Jni," wlwl Iw!h~!I wouk] Y«lIi~IIIIJ!'h't?

Q. Well. I imauine h" Ill' useful lit 1111 ii uHl~lt! hI \,0\'('1' "olllc;wiwl'(' 1l!'~'olHl HI20 ,)l Hl2S til' HJ21.' A. J.m'"p,.; io tleliu"illln<'!

11· Y\',,,", "A. '\'!'" :-:UPPiN' WI' lulH' it II"Om 1!l:!1i III Ul:Ur!

(J. 'I'luu would Ill' all ri~dBI. YOH wnu!d a~(II"'. ~Ir. '1\1\\'1'1''; think

~wn·d 1111" from your "lall'lm'lll YI'"i\"!'.!:IY·'·llw! lmuh'rll Ilmd~H" haw' hl",'il und uuhni:mt'NI. l Ihink 111\'1'\' b nn qw'"liull IIhnu! 11m: ? .. -A. VI''' .

. tJ. ,\ nd Ilm! II ii' n'l:llillll"hip of l!l'odm'\ iOI! t I) """,lllllpnOll i" prl"'"llliy out

oi lmlalln·';··A. III rvrtuln ('(ilHm(I!lil W:"

(~, ! ,,1"',1111 ;<:oy e:lJl:Il'ily 01 PI"OdW'lioiL •. A, Yt''''; ill :'oUlI' ('OHlIHOdidi'" Illl' ITlm'on of PI'odlii'lhm ~o ('(.u"mllpli:m l" nut til imialll't', alld in .dh(·L" l.n,!! ll!'u-

dilH ion ,mol ('OIl;;lIIlijil inn an' low. '

(~, :\ •• w, wfillid you :i!!I"I'!' IIwl IIIP ITl'anon III IW\\, l'nl'd:a.~inl!' pO\\'\'I' i, ,jl'-:I';,hh,; Iw\'\'I' 11lhul how. rut' IIIP 11I!l1II1'Ill'!,,\, \'!hloullll'div,

I.J. \r"Hhl you n!,n lI\n'CT Ilml il i" l'o,.~ihh' W plall fol' ;md d\·\-dpp :-w,h a !,lllpn.cai? LII 1111' Iil1i~h 1111' «IlP"'lioli ill lid,; W:IY, IWi':!U:o'(' 1 a!H!l'ip::11' whal will run 'hl'illl!!ll ynur mind, \\ ould you aho lH~l'n' thnt it j" p"~,,ihl!' to plnn fill' and (h~\'i'lnp such n IH'OptlSnl Of iii it III be 1.'ll 10 ihe ips!' di.ril of "hal! J ,.ny ."0-,':1 lied 1~"OI\oI1lif' la \\':' ?··~,A, TI;{'III'<'Iil·nlly. OIW must n 1 wayi' say. 1 I hlnk, Ow j il i.- po""ihl .. In pian, Of ('11111';;(', you loa \'I' III l'\'I'I!Ul!iz(' uuu ill 1!l:ddn!X p!:IIl" \'011 have 10 mnke er-rt.ain nssumptions as well. The enormous dilllnultv nOW;!;I:!)'" i- In 1m"\\' wluu (II!' I',.lilll:llt·,. 1'111' t It 1'1'\' til' rolli', 01' li\'(' ill' (I'll .\'(';Il"~ !'rPIl! lllOW ",\iIl'lId Iii', )fu,.t 011(' ussuuu- a continuntion of ccunomie nutionnlism Pl' IInj; il j .. a"~I.lllll'l~· \';1:\1 111 know t hnt .

l~, \\'I'l!, H~Wjll 1 do lint wi-h 10 dig!'('"'' intn ,ddt· Ijlil'~, T!«- t'('on,'mil' Imli"lIali,.m j;; tlll'rt"!-~-<,\, Y(,,,,

q, II \'" not ::olll(,thin~ thai WI' ran (,h41o,,1' whether it is 01' lint; jt is t!il'l'I'.--.\, Yh',

'~, Xow, and I think this b n \'('l'y apl illl['I',1<'l'Iiol1, ~llll!lld Hilt \\'(' ~(,,'k tn ad:tltl iI'!I'''I'I\'('~ ill tili" ('IHIII(I'\' to 1111'''(' Il!'W f:wiOl'''?--'-'\, If vnu :1':"1J1llf' 11;;11 ,';'p';':lnll' nat iounlisn» allli hv that 1 nu-an Ilti,. ":(,llIi-\\';l1' ~talt' 'il: which wcfin-l "Hr"dn'<,·i~ Ilt'n- for gnool,'tlH'll ~'!I1l han' to do t liat. But of ('0111'"(,, Xlr. ;-;;t!'\'('n", I mn thillkjn~ there of plans whlr-h would involvo n ell:lll~l' of vocation pf lww' "':1""(''' of the Canadian people,

{~, Tb;., In;i\' he HFC'(''':':ln''! ':\, I! lII!!\' he, if thl' )11'1"('1'11 \\'lIrid "IaH' of .. F,li·-.- "''''';'''1,,,' 1'1 ,,"wI il \\,1I1I1d bp if til(' Tll'l'-f'Il{ wur-lr] -;'iIl' itf "n"lil'~ is i;,'!:,,'~ ,<,,;;~::' h,n', of' ('(;;11''';', it dn;'~ ill\'l)]":(' 1';lfll~l:i'111" /'(""p(I;I~iio)iiity to ~!I ':;Il't'iH'j wid! in, \':t:lhl~' \'1'1',\' ('xpi'!l"i\'" l'f'\'nlJlrin~~ of our (,f'flIlOmi('''ll'lI''{1l1'1' OIl iI,at """!llIIplillll, If t ln- ussumpt.iou j" wrmu; in t ln- ('PIII':',' ill' :t few Y('!!I'" t.im«. t lu-u. of cuursr-, tlte c-h!tllge:' which 0111' ha:, lll:HlP ill the intcrvnl an- If!l'g('ly waster] OIH'~.

Q, :\11', T'owr-rs, I don't think T could :I 1'1'1 hI' vou of holdin~ the view tha!

IIII' t!;ill~ 10 do is Hit (lal. nnrl wait fol' the turn of Ill(' whor-l: Ihnt is not what vuu :In' iruplying, if' U'?--A, Xo, I would say that in nny way which one j'cH,';"lIahh' ('ollid thil! a ;';tal'! mil.dl! be made in th" S('IW: in whir-l: ~'(1l1 an' :'lwaldlll! 'without grandimw :tiIi'IIlP':' In f'('\':lIII]1- I do nnt nSf' "gl'anr1io~(''' in ;t h:j(l",'n,"', I shoulrl h:l\'(' 11,.:('(1 unut hcr wonl. I shouldsnv t, major P::l11:' " to n-vnmp tlil' (':\H:ttlian ('('Ollolny, Blli major eh:lll,!,(l''' b:bPd on ill!' PJ·(·~(,11l. "dale rtf wlodd nlrai!'~ wU!I!d ]'('pn'o'!'I\, :111 d'fi!l't :tnd a 1'I"'II(IlI~ibili!y whir-l: would Ill' awI-rllv diHi/'ll!! 10 I,,).; .. , alld involve I Hill afraid, joo, t he ;t('('('ptali!'l' of !l lowe]' "tand:il'd of living hr-ro , whir-h In' ilopf' will 1)(' unnecessary.

(~, H~'!!1i'('mbl("Q", '\h,'I'~H\'t'l'",. I mwli';h: II HIIVmll$(' 1«11' Ihi:" lkaf' iIi iiw :~>i'¥P";HHm l!" unr K'~i\\~ illg mlwilam'I';,-"fialmll'i:li nmdniJwf,Y, lotiw ~W\\\'

ft\''<''H"~mw i·jmlii~ ilm~: wil II \:ihidn w~, I'ulllnmh:d D!(»wmI1\W, l''lm~i"lill~ tIt'

1!I«hh'!rllti! ~IIHm:Hhm, !ll Imrdw:;luli~I;i(lW"1' lUlll ;r<\;' !lIL

X~~,\,,, nlm! !;;; edit I h:l\'l' iu mitt!!" I.H us pml'I'('d, WI,mid »1 ill' wist, (n lfHTNI'W

n'''rfH'',,, ::lltid ",(I \111'1"'11>:'1' Ih~' ;l\":\illlhh, IV;;l'I'\'('$ :wil rhus flhlmhllt'

,II' iuonev In iwhu,tH"v?",,:\, I! wlm!.1 liol Ill' 111'('\'1"$1\1'\' 1il tilh, ~~Ji~\'

pmp,j\\, ~ 0' iIWI'M"'" I iii.' n'!~i'n'\'",~. "l"t'lm~(' OWn,,- i~ e1m;;hh'I',t!;Jt.

ff'lIlli ;my ilWI'f'W'I' ill IJ!'I~i' 1'1"~N'\'('f; lmd Ilun IW!j(,:,,, \Of ,'om'H" ie.

I,i'I'1I ,,,!lj"H·d dUI'iIll!( ,hI' h" four "('HI'!! ;Ilmt of !Hlding hI

!hl' ,qii"Jmu! .. I' h:mk 1':1,,11 1'('''''"1'\'1''' "lwVi", with i.hc l:\"!£uh Ihllt hllukl'i have j'JClm mU/l:I' !·'m~hUH pn.'fllm"t' tn t'\p:md Uiw.,>,· rin' ~·t'lli'" j)IlBt. The nflHlIInt Ill' HI ,·,miIHI'!-ela! !n:Wi fWIll I iwi.' low h'Yt·; ill W3ti~·'m'. Wht'IH:\'l'i' it Wa"

h". !"'<'H ,,~' ID.' HH';III", 1:0").11' :mil ! hl'u'I'lm'p I hi,' IIHI,jM 1'(ii'(i"lu 11K' {he l."xllltn"hm In tnlH' pla(·(·in Ihe Ionu q.f ivWI'Nt",e,", ill ill\,t'ii'lllWIII~,

(~. W now, rl'i(-!Tin~ 10 111(' ,'xp:w:,illii in !'oUHlH'n'i:d lmmf, You "('i'HI!

liw !i.l!IIl">' !lmr I u~I'd III :tl'pe!"'1i in !Ill,' iWtls('.[ w\mld lik\. just 1(1 11m tlie$v

lwf"n' vuu, IWl'tm",· I ! hink !l11.'V III'(' n dtnl fm'wl' ill (his whlll., hUsilltlS$, 111 HI:!1i ~'''!IiI''H'II'I;1l iWIIl:, \\"('1'(' $u8a.ixm,nno; ill 1928 Ilwy run up W $1,221,. (1011,001\; ill l\J:H lIlt'\' \\'l'I't" SI,HLUOU,(}UIl: ill lOaH tIll'\' wore $701.000,(100; :wd ill mas. Ih'l'I'lIIhl:,' 1:\ .. 1. Ilu,y WI" 1'1' ~r;;H,(JO(),(JOO,'I'h(';' 1111 ve gmw lip lilll(,!'. "'\ I Ii:!\"!, fl!l" Ikl'('IIlIIl·t la:'l 8800,OO(),()UO.

(J, \\"dl, it /lilly II!' IIWl I am 1101 quite up to d:lI(' lilt'fl', illIlnybi~ that I ['HI, '!:" XOW!Ii!n'!' liglll'(', '10\\"(-"",,', yuu li:iy it W:I" $800,OOO,{JOO in D('('l'llllwl'? ' ,\. \ ;',~.

(l· Xow, I ht' !·OI"'(·.sPOlldiu!:\ li~III'('" fill' inn's! 111('111 ill j~II\·t"'I'IlIlU'llt IIIItHI", IWt' ;11("1': in W:W. S:i2·Ulllf)JJOO: in 1028, $;i:N.OOf),O(JO: in 19:H, $:ma.otJo,(J(J(); ill lII;m, $I.O!i7.IlIJO,O(JO; in HJ::!S, Sl.l:J7.00Il,U{JO; amI I think in IIddilitll1 It) !hnt 8I,I:l7.llIIO,U!lO. 81;');1.11011,000 ni Irt':i~lIn' bm:!?~"A. Xu, ill mill' fi~ui't, of 81.1;"7,000,000 ;!11' IIT':I:'II!','- hilb :II'l' il1l'hidl'd; ;I lid. of ('0111',1(', til;' h:lnk~'.lid nil; b,ld all ilf <Itt' $1;i;i.OOt),no/),

IJ, \rt• \1m lei 'if ;,!,n ut IIIItI. ,\ liltll' \\'hilt· ng,1) you IISf'.1 II renn, lIlld 1 ,,,- i,·".l yon Il-'rd if l'l'pi'a: ('dly, III:H :,,; 1':! .. i1 l'I':'I.'I'\'!,'5 im'!'t'aJ'P then ! he h:mk.s ··,k I!l\T-l!IWlii,.: Ill' !'OIli!lIl'I""inl !1l:iIl~?"',\, Y(."

tl, \\',,:! nnw, wlrllOlIl ~Ililll.! illl" iL wit:!! wu- riw ,'IIlI"(' of this "harp iunC'luw fH'lwt"n I!J:U :lnd W:W,;1 pit,k-up 0)1' ifHT.":!:"., !If m'l'l' SIiOO,OOO.OOOiu tlw holding" .. r ;.:n\'U'llllll'll! hnrll,l·, ill !hal !,(·rind'.' A. I l,"\";'n', gOI jll~t lill' t'X:W! d:t!t'''''

It Inl!l;n it i" ~;mlj,ooo.(j(Jn nlld ill Wad i! j" SI.O!17.ono.noo. It b 1'I':ill~' ab, $700,000.000 pI ;111 il!l'!'(':,,,,, ill /:',ldiul!" cd publi.· ,;('('\iI';t IP,', :lnd Ih('l't' \\':1" a ""r:("p'mdlll!! f;d! III' a!HIlt: ::q;iO.OIlOJIOll h l'OIllUl('!"'ial lnall".«.:\. Till' fall ill '· ... num-r. :;\; !':,n-, I"., ''''illg- :!~ !:II'P' :,:' Ihl' ilHTI'H.s1' in J!P\','I'IlUlt'lIt ,'("'UI'Hil''',

I}, XU, "!If ,h,,,!'t· \\':1:' a \'pry dp('ided f:dl?-A, Yes.

0, \""w. lIl/uld \'flil ,":n' [1;:11 ,h:1t i IHTI'a:«' i PI ~O""I'llm('1I1 i 11\'(':" ilWlIl" of 8700,(100,0(", Wi!, til:!: In lin: {:Wi ilia! IllI-rl, 1\':15 1101 ':\\';tilablt' in Can:lda d('sil" :ih!I' "illll!ll,'I'i'i:d !"lW,? A. Y,_,

I}, \rhoih"! ,\, \rl' ,'pHi!' ;1:1,·1. tllI'n' to! tlw qll{'~ilnl1 n.; 10 \\,!it'!lW!' Iller£' I\"'n' :ortH' ",iiii-!! ,-h"uld han' 111"'11 llIlHH.d!t de,il'ahlr. :!wl \\'1')'1' not. That i~ a qWA (Oll uf judl!llH'IH; !.uti" ~o fa/' a~ till' dt, .• irr- 10 111:;].;(' ('PlllJJlt'l"('ia! 1"HIl~ j .. i·~ni.·! nH'd. til{.· dt'~i:-t· b:l~ hcen II;en~~

(I, :'\'i\\', h,! U,. put it !hi~ wav : \\'01111<1 vou ~:!~' thaI IlWl't' \\'a" :il,,!' all :,h'C!I:'p ni In:ll1"' : hat miglH h.rvr- whir !'ea:'IJIl;;I,!c "af!'/" Ill'en made to \\':\IT:11l1 ILl' >',\[1 ('hing- of invr-st lIIl'lHln' an ill<"n':t"(' of 8700,Ofio.ooO'!-. A. I think that

mu-: !!:tW' lWl'1I the j'a"t', '

O. \r,.II, it j,,; dillie'lilt 1'01' 1111' 10 a!!I'('(' with vuu Ihn·.~--A, Wi-II. the onlv 1I'!t\' i~l II'II'id, nlW toull! get down 'n th:~t. I'ould lllHkt' "UI"(' \\'ith j'('''pcd to that. i" through I hl' in\'("" igatioll of "11('1 IIir' ('a-('~

,\11'. r; I'i.llilll) FIJr.1 T!'\\' .. rs.]

rww ,g. n; 1- ~HL

HI

''',t~

ill Illy

Illilli~ I ~,f nih'~~h,~!~ ill Hl!" Im~ wh;~! I :1l1J !H'in~

10 !'mplmih", j~ I rhiuk il i· !lff;md.mw!i~'ijl :.wl .,( \'!I;d iln,;nn-

mWI': In 1111' !I\'''I' Il:mn" an' ! lmd I d~illk a!l·impnn:HIL III 'HIH"1' word~,

J Ihill),! "II" ,W\' ~ :'1: j','l".,'p" 10 -w.:\" ,';11 WhYilh'h I, ..tWill-H'

nd I nrn 1101 ;1 wn" Imd 01' !rowi. 11m" W:W Of lin' 01111'1"'-

II 1'11;1 u,,; 1m.! 1'1 wnul" lift,· In 'upon )'1'11 l .. lil;l!

iii' ""/HI' "I'I".\" ddli~i"'''il!n~lIld ;W"'Wvr I., dn~ p"ollnmi,' p!!('lhmH'lIll11.

h .. ,,;tu<>,. i! i , H.I! 11,,'1'1" Ill" It'·~ dmll ;m F(','IlHlllh" ph"llP!lH'lh'Il, to illY miud. ~., . .\, Tli' an"\i','l" j .. 11,,1 f.1I' 10 ""d., Dad!!::; t h"~.,, ,'I"m-", Pi\ r! il"lIh!'lv II", j':ll"Iiel' nm'''· nd ... d"~,,, !hll :illPk "" 111111'11 hi Ii"" wid-W;:a; ,,';":1\1;17 p'Ti;!d. hut Pill', !j,'lIbdy '01 ;/", "arli,'!' '!':':!l'''"IIH- WI'\" mi';nL~i;ld .. rv'!:d" ,,f iHli.ilh'"'' :lilt! 1111- hij!/u h·,'d 01 IlIu'mpll'Yllwm WH'" n.;; ;mil Iwddnl! (ill' /( low If-v(,l of ,'mmlwr, hll I"all"'. AI l!".;UIl,' ! inu-, ! hI' ",nw' f;WI"I',. w,'r .. Ilmkilll! ;0;' lnnw .:';;IH'I'l'ImWIiI .klll-Ih.. Tlw .,ddilh,n-< In! ,,::,.11 I·.·.~('!T'·' ,ii' : la, li;wk,. :iJld tlw '-OIHf'qllt"!1I I'x/mll"!!!!! iii HII'll' 111\-(':"1 IiH.'!It Lo!dltlJ!.:, """n IlIiij",· I: ... tol'" nl:,hlilll!: liwgm'Pl"mIH'IH': In h\lITOW dH~ 1!H'I1I';; !'''qliin',J It. 1"I00'n' dr"li..)I i. ;ml! I,. II11'N m;ltul'illg lnall!' nil 11 \'('1',\' lo\\' illll'l"('''1 1I:.;.;i;:, ThH!. poii('Y, Ill' course, lifts ill\"oin«l Mh'I'iIi!"I''' Ior nHlIl~' pl'opl", hilt I think ow' w"" jll.,::nll"d ill (,xlwding UW/Ii IWr':m"v of Ill" po.·d! illn ill "'hiI'll ~il\'('nil!H'lIb f"l1 wi t iWIJI,,('h','" during Ihc!'p YNIL", :Illr! hnallfC of rlH' gPIIPl':iI !'I'ollomil' j'in'ulll"! alW(':, or the times,

Q, ',"pll. now, would il III' :Hh'j"a hi .. 1'01' r 11(' !,!O\'U'nm('nt. 01' fill' CnU:HlaI will 1(,:1 \"i' illi' gJI\'('I"IIIIII"1l1 1!!;I,c~to ":PI·k )'OIlW loan:< nhl'lJlld Iii low rates of illlt'lhi )'"nWI' rhnn put tlii" 1)111'111'11 OIl lin' CUlllldinn Imllk" whidl is olH"iollf;ly in lH'n·-~$70().(lI)O,OOn of 11 jump in II mnt tor of three or fow' yl':I 1'" in 0111' bIHlJ(S :IIOIw-\\,ollld it no! Ill' Iwllt'l', 01" wnuld it Hill he ndvj"ahll', to sP('k fOJ" !onn;.: nlll'/lIH!'?'>',A. Xo, J tin IIO! think ':0; h('(';lII':(', II" n mni(f'1' of [ .. nt, eiJ'['um"[HlH'f'5 \\'1'1'(' "Ill'll !lwi unt onlv did \\'(' nul IIh·d to J}(IITOW :dwwtdhuj WI' han' been nillp III hrill!! h:lI'k a hi uf "l'l'lIl'illl',", pn'\'lnll~ly IH'ld nlmmti; and IIw iuereaso in ditll'iI"lwl banks hnJrlillg:' hns not tukr-n away Irom their po"sibililie:' for financing eonum-rclal h';Hlfl, wlrieh they 11111:;( de",il'(' 10 do, 1)('1':111)':<' whnt they ('iIl'1J on government iwcuJ'itil's-natul'ally I hnven't got. accurate figure>; 1)('1'01"(' IIlc-.-is something like an avorage of 2 Pl'!' cent: find naturnlly they nrc trenwlldol1!'ly keen to gpt Ionus at a higher rate than that.

Q, ¥e:;. J gatl.or that yon would agree that there is au abundance of !'l'edit in Canada'!-,\, For conuucreinl loans'!

Q, For comnu-rcinl !O:tll""?~,\" I would go flll'tlH'I', I would i'ny th('/'c is an int!'n:"!' P"("S';III'(' and desiro all the purl of hanks to get commerelnl loans, Now, whether that carrie>; as far as you would wish, whether (hal is necompanied by

t (

f

1~'~.itlirNiWPU~f' ill C~m\Hh~ i~b W2(l, l~l ~'N,a"i' ;IJ~\), WN'{'

W,' Nul hI h;~n' ill i"!ilmlm"u"thd 10:1111'

, in W;I1' $\l:s,a:,UUn,(~.ln,

:\II" m>l 111Haiomhk m' !I') !If lll:w" us br biad,

HmOI'O' ,j! WI' ~w\'\' o~wul(' >'Iim,' ~l1"""I'i, Tht,y ~Il ttl:!i,

u in,1I» 1H:!7",>~,A, !no 10:17 mil' m:rUa"uhnmd kmm; ;WHllIUIH,d In whiii.' in (kh,l\t"l III mas 11;\,'\' W('I·,,$l·l\,i.{,IUUJllltt Tinn! h, .a I,{·,hm-

IWll j'~ iii t\l-VII"~dlm;11 • ')OIU will n memhor Ilmt H'i21

\\'11;' "In" !II hngl" W('~h'I'1l l"tt"jIP~,

\1 YP,c",\, :\l:ilwi;waHlI'. uw"lmlin!;, millillj,~ iii Hl27, ;$;~2li.O(J(WOU; IIOW $~:l;WlllJ.II01I,

q, 'fha! 11' $lIIll.1l1Ul,mm .k,wl! iii li\ll,; .. uw da~"ilil':llhIH.,,~A. In IIH'I'('IIIII\f\"w $11I1UHI(UlllO In $l;H,OOU.IIllO,

Wi'll. :\ lr. Towor-. ,iIlRl" "on lllillh ! 100:'1' :':'1' !"iHtll('lwin),t \.0 till'

k' ,11 .lIb (",mi'1 I do WI! think Owl till' fiwm'" ill

(J~.' Ii lI'a II , I he fl!rt~.1 h:Hllw",l' 1I~'ll'('~ dhwh,~\'; I hal lal:llmf,wHu'in;; nnrl ill,hll'lnnl Ill. iii " an' dliWIi $1~IU.mJll,tlUU, Nnw. 1 iI,,~mll~' timl :l portion of !lwt is ,.1m- III "('nnin Ill!"!!" hlolll>'tl'll',c wi,kh <In liwi!' .~Wn Imlikhl)~ by buying 1 :J~n'l' with IhaL···A. AIlII. 1111 « , iiII' Imip uml pup·.,\" illdu"II'Y. l pre,.mlh' il j" ",'1 imnowill!( 111':11"1,\' Ill' IIHh'H II.;' it did II! IIi!' 1\127 IwdmL

Q. Bw WI' "hollhi nut Il\' ill n ~I at Ie pniililm. We mll,,1 I'm !'ly ,"-xllI-!"! i<OIlW prngl"t.'~" IWI\\'\-<"u l!I2T 1m.! 1\I:4R Why. llw nu-re illt'i"';;"'t' in !lw Jlf'l'lIlntlulI would "Imw "nllW pnl;::l'''~''', alld yl'l mmmf:lI'lUrill~ 1";i1I:t' un' down ill thut lwl'iol\ lIy $1!'IOJIIIU,nHO.·,,\, ~I:IImfm'ulI'iu~ IIl1ill" an- dA\1l SIO()~(I0U,O(JO.

:M!". Ib!am:hwlndin;,:: mining,

:,\lL Town,,,; \",-;' , W!wl't' 1,,:111:' :11\' nor l:u'l£'t'in lilly ('\'\'Hl, uml never hnve IWi:!!.

JlH 11011 • .III', .",,''1'11/.;:

t~. And y •• a; "OHlIIWl'l'illl lo:m", tll'o: down ~.mil'lhill~ uvvr $!OO,OOO,O()(), are 1I1l'\' not '!-~,A. \\"dl. fhii i:, 11 H·(·thm III lilt' lolnl !'uumwr.'ia! limn 1il£'II!V,

, (~ . .! IlH'HIi. Illl' m;'lTh;lIdi,,.i!l~.··:\. :\lat'iwll;ij"iu!! loan" lin' down $li(i,~ OOll.IIUO,

1,1, l t ~"I'IlI" 10 uu-, j!H 'aldllllc :;~ ;\ ",holt' Ilw~i' !1j!lIn·,. I han' given, Ibat Ih:H I'm'l alil!H,.;lwHi<! iw a I'h;dlni~t' '" Ihl' banking "Y"('111 of Canada u:; indiceting tim! IIwl'( is "ollwilting radii'idly wnmg;,-;\. II ",('em:' to 111(' thnt Ilw ",IHmld iw ill 'ill' "I hpJ' din-,'l inn. Surd)' if tln-ro lin' jwopie who

\':11\ Hi" lJ:lllk eredu ;'!HI who an' iwil\l~ hampered by t ln- 1/II'k it i~ 1'0,.,.;\;1,· w gd '.ml" h ·,It" I'll t husr- Iwoplt·, :'11 to "lwak, lind invest Q. Investigate them. Yt'''. J,; then- mj\'rhill~ lx-irur dono 10 invcstinat« or "'Tk 101" them? I thiuk YOU al'(' riglil in 'what' YOU i'~IY.--:\. But YOII ilH\'e

to ;!yt Lold (,( tbe 111'01'1('. \\,ill"l'(' i':ill ;:011 lilld ,h;'IIl'? '

Nfl Jlr, Boker:

Q. You i':ly "t)IO:.(' people", Whai do you nu-nn by "those pC'opl('''?-~-,A, Till' lwopl!' who 1I\,!il'\'(! Ow;.: should he getting: bank credit hilt find themselves Ii;w,pprtd hy IIII' liu-k of il. If one l'onld hear )!'OlJI those people if OIl(' could im'('i,igale tho;"(, ('11:'("1'. OJW would get It I'm' more praetieal idea (if the ('Hit-Hey Ii!' oliwl'wi"l' til(' bunking ::;y:<tl"/Il thnn by thinking of it ill general terms and all ;1 result of I ilo1'l- lig;nI'P" we 11:1\'(' been discussing.

Mr. B.\I'EJI: Xi;IY I nsk :\lr, St('n-Hi' this «ucstion: Would liJ" words "those people" which 'OUI' friend l\fr. Towers has used include people like the ""('ono!nry manufneturnu; inilw4rle"'!

PIL Gnlhalll For" Towct'll.]

Iln)L ;\Jr, T \h. H

hnd~'

.thHL ;\11' H ~h.T .\lr, B Jif"1. ;\

J'i: q. h l

f~tHlaHprt~i!t~ fiftll l.t! lTd.

ytHr H (,-pt"t q. It',

nil

(J. Wlf) i"H v. $200.W (~n~~"r~t\ttnl 1:

$200.000,00( Q. \'1',,' d('!'rPHH' .Ii~:

I,l· )",

r heir dCl Hl~i from ~2im,O

Q. Y('~', II "II'O!i!! inrl ment tflfTl' I ,'WIld be. /0

Q, I ill; fa!' mill'!' d'; til ;\ lllfll!(T tlw hanks a be.

Q. Y 1111 "\,,.;1('111 in ! jilt !W'('llWIII OJ' to curn 1 t lu-v an' H.~ oj ([Ollbt wh U J1( 1m';; t ion H I «nt in'l)" eml (·OlJl':H.t'(~ FO t prai"nl'?

(2. YF:'? thor. j;: muel OlW'., l('dh i nb 1!' It) form g:{·~jnL

Q. Ld

"IHlrag;e.

HHlfnNmin~ Imd !UF'! ;,J" of .h'lt 1"

[, i: 'i:\, lm~'h,';

"-,,.j.l'<':fc~ ,;~. __ ... - .~

in~ln"4ry~ 1 preilN'hnL

lwht "'XiW~"1 $ClnW !kl~ul;~!'liHl' W~HIId n l!l:n ptr)(JI! hy

SlU(),Ono,(.KIO. 1m: in!JB n~Hr(~~

:iTt' dn\\ n ,$li(j,~

h:~\~t') fd\-~"H~ ;!UH In of ('!HUHta I\li wm~ In HI" IIWI (ic Ur(~ p{"uph~ \\~hu

it;; Ill" I.wi;; Hl hl ~Pl';lk. ;lnd

H~ H) in \"(~~H-h.nH t, ,\, Hut yut! fa!!\'t

"'"e iwm)l~,"'}~~,\

t- find' d!~'m;eh:(;~

.pic. if ml(; ('OHM '11 of Ihe l'fliNH'Y t;ral. t.(~rijn:; and :1$,

~'<JlJl,j nil: won!s : people like the

Hmo, :\11\ ~Ilil"."iy, ,\11' T~lwm<~: l'n"hmll!['illy.

~\h, B,Hum:\\\mh! OW\, .IM :~pp!,\' ill ~

Iji~d,\" ~·h«;

Hun, ,\11\ Likely.

:,\,11'. HAKEn: II would tw':,a IIwm mw'p \!mll lInI,d!!!dy dH\ ill IIOY ,'p!Hh)jl :\11". 'fOWI-:II:,: )'I'£"

,\h' B,IH:H: Ii i~ I IW«'pk' I lhitlk WI' ;m gtl!ing OIL

lh'll. ~h'. STtn:x;<\; Yt':',

IJu Jk V,qimc;

t.J- 11' liuot a (;11'1 Inr liw 1:,,,, 1'''111' «'1' lin' y\·:m~ awl I mn "'lwnldllA of hllllllwl't'i:1I 1001iV '. lit b:wIH'I''; iw \"f~ n"'\('.~ jll"U!'!il'li Ii~' 1'\'o'Y "OIllIlH'I'eill! Ii"1II in 1"',1111'\' :IIHnwlly 1"1' Ullmmlt ilf IIdp Ihe~' IWI'I!I'!l from IiI!' Imnk".(.\'twy y,'al" 11 .'!'l'taili 111'(114)1"11(; .. ?",,;\. I WIll' nul nWtill' III' Ih11(.

(l, I. \':111 ~\h'" ,\'011 l,m'l iI'HI:II' i':I~l',~. 1)('(':111,,(> )'011 wanted !lH'm"~A. YI'iL

t

/III lilli" .lfr .. -:"'I'i!I;i:

(1· "'lint would hI' tin' 1'("1'1111 if iiII' H/mk ,,1' C:m:H!a W\'I'I' In pun.lillH!'. ":1)" $2flIlJIO(}JlIIfl of II!!',,\, J!,m'pu'll!lwnl hOIllI" from IIII' f'lml'I(')'Pi! "allk~? Whllt dr!'/'I would 111:11 hll\'!"!··,·A, The (,11:11'("1'1'11 hnllk,,' rf\"h would ilh'I'(';I"" b~' S200,Onn.oou,

Q, Y\,,,';',,,A. Alld !hdr :'''''1'1" in I iii' Iorm of gm'('I'IlIlWI1I hfJIul" \\'(;11111 rlN'n'mij' II\" tt:lOll.O(l{l,(lOO,

{J. y.,,'~c~~;\. You wOII!d 11.('11 !lnrl Ih:!1 n! till' iiI'S' "'al!(' of tilt' 1"UIl!'iil'iioll IIII'll' 111"11/'':11': Wi'I'!, Ill!' "!Imp:,,: hi·ron'. litH their i'a~h would havo gllll(' lip frlllll S:li;O,1I110.U(I(l III $4.10,000,0011

(!. Yl',,',·· .. ·A. Th:H would, shnll T "ay, pu-h 1111' halll'~~'~H! h·;I,..L ~in' IlW/H n "'imu~ Jlldm'!'lIWIII 10 In' alld (jnd nddililllwi loan". if Ih\·\, tould: 1Iit' induce- 1111'111 ,IH'IV hdlli!:.1 I hillk: WI ~l'f':Ht'I' (ban now 11,,1';(11:'1' it ; .... 1tH :\" :t(,lI!{' n" if,

,'mdd be, in fat: :I" 1'11,,11 i~ ('f!lWC'!'IJ(',!. ..

Q. I imaulno, if r IIlhdi! illh'!'j!"'i, Ih:1I if that \\"('1''' dOlH'. t lrorr- would hf' far mun' {·n'orl mnde In HII'I ,hi", I'bi" ,'f hllrnm'PI''' 11m! ;\11'. Bakl'l' "C'ff'l'l'f'd 10 a 1l1lHIIUlL :1ft0'!·,·'\, I I!O nUl think ,.0; IW('lw"(' II .. · p.'('':HII'" IlIldpl' wliieh Ill!' hnnks are IlPt'I':I1illg ill that n'~III'('1 j", I think. ,iu,,! :1:< lnjpu,,(' ns it ('Imld 1)('.

Q. '1'011 IF"'IIIl!' t lmr Iwilling: HUll'!' cnn lx- dOll(' with OUI' PI'f'''PllI hnnking "y~!l'm in Iii:\! 1'I'''Pt'd·;).~:\. XIl. nn! lH"'('I':':U'ily, I ;on,\' rhnt ~o fal' :I,.. tIl!' iuducr-ment of II liouid llo,.:Hioll, the inuhilitv to ('1\1'11 IllOIH'\' in inq'"IIlWHli' or !II enrn ilion' til:in n';',\' IiUI(,~-Hj fat, :I'" idi {!IIl,.,!· PI'(';;"W'P;; nre ('(!ll('('l'Iwd (iii',\' :11"1' :;" ~!I'('ai ;\0:; till'~' ('1111 lx-, We: I';W then :\"~IIl1W. without any q!l(';;lioli Iii douln whntuver, lh:H, the IiI'I'il'l' II' gd romnu-reial JUHni' j,: iniell"'t', That is unquestionably :l i:I!'L Xow (Ill' haJiuw{' of Ihl' question which ~'''U mi,,(. if' "lIlin-l,\' ('1111)1'111'1'" ill thi" OIH' point: L~ that. rlosire uC'f'llmpani('ll by dilliei('nt ('nm':l1-W :'0 Uwl the npprnisnl of a rcasnnnhle banking risk is a ,gPIH'I'OIl" ap-

pnli.:,,\'? .

Q- yp,,'?~A, There iii the only f}lw;:tioll 10 decide. .My view W01l1d hl' that UWI<' I';; much more likeliltoud of being ah]« In decide that if only OIl(' 1'11111(1 Ife! nn(:", teeth into spceifie C:l:W:; In j'l~'(·stignte·~mll('h mort likelihood of bf'j~lg nhl\' In form an opinion ill lIil1l w:)~· than in any nnw}' way that could he ",og- 1!bclNL

• <1. LN Ii:' :W,.U1ne, for the ;<,11,(' of this discussion, that there i:-: a lack of

-ourngo.

~~~;~t nUi!" lt~Hni\ lilli' ("-~ur"~frqij~« ~~li' n-\\u:;,~'t;1 ~ij'lil U ~ll~~tt \'~{~lI!,\Uij!L~. ~ij.~.;<-i~ll

l.w !h~' )'lr, \"i:~~·l.hi l·;{· ~1-'i-'-i:t11.11 I{ y,

1":;1>0;'(", pr,,,l,

"dJ~d '!;\·t1uj~

~~I!'·\\"(;'·:""'<tt~:':,'· ~"'ill;;,~r~~~'i~-'~ .~~ II'P

: i~i! \"':in·c~~\;. ~~ Hll~~ ",~!dd in ~B \\~~~~-. Un nn~~(' h~H~~\;'':

,r;w a r;';I~'::;:::tl;!::~"' ~;,i,.\~'~;~;l';:~'l lT~!~yn:~w!~ ~~~::;H;:\ ~':~~~:,: ::~\!::i. ::11::

~~\-'I\_- ~·~ne~;;iL w'~ll"'~"'" "" ~rhij~B ~ he ~~u";~'u,,,·.;,'iua~ l~)

I~;(.F :' ~ \-'~~i~f ~h·~ll"';:h~"" ~ hill !!;i)jn~ ffij~~ n ~~f~ In~li:""i..; ~~f ~-"~i~i(~~~ ~. hnl

l;!1w h;wk· '!Wll .':l~\ '·;.In, we ;Ii,' nn; "h;on j'!mr"pillu,IH, \~'\' 1;;>-~..,·~' ~;~~. ~ljf;~~ ~uH~~~h rr-k, ~~~~~.4. vn,h Jrn~Hn~~ b~-' Hi .Ht~ ~ "pp", t H·.". ~iJtrnr-d·h-~""" ~,,:~ n~nn\i-);''''[ ~"~"j'l~~~n 1~fi':"<t'"' q~H tU~~·~ .~~~~d("~"" tiH~n y~~u ~;.~'i~~~~ ;\'hrrr,~ \"~'ijf,l ~h \\'iui,'uhu"f' ~~~~~u ~HI n~J\' i.,.; h~~hhHn~e: and If il

\\T:~:; "~,l,':~: i'i r "; h\!(i~!~\i~·:,n.? ;l;:u!~ l::;i~:;:'~~~:.i\l;i~· .. ~~:~:;~;:~:~ ,:;'II;,h !!::t~'~~~ !'ll" 1"

h~l \'~f. ~~~H1~."~\" ij~~,T'i." tiJ'f811HHt t).UUU hr!tiH~,~h~"~ in t~~u,;Hi:t:l

Q, y, Ii ill" 11 <'""" .gohL

tJ., .I1n q, 'I"; f~nHH!' f~~~ U-t~f'H~Jj~lhl~ 110\\', i,~ wn

{,I, ,1!1' I n Ii!, wid ..

j;;( ,. ~ ~i<\' ~l rl~ ~h ~\\. n un\,"! ~,~l'V :t~iOtr.~- .. ·· ... ,,_.-\. Y' ~;;,~o

~.~~ ~b~' ~"La'ns"~~l'-'~i h:~h~i':"'u ~~fh'T euH~~Hh~d~on

Hn~ t:n~ l hi t lu- pnrpth.

II, I Ii $la hin;nll

~~. rl·nt'i·~tqi

~"~~r~. HtH UiD~:' \~·-t,~"f,~ :n in';'U"Ui"i ~_'·\·~'TV ~~il--aH(i'!i~ lutaHit::'i~~' ln

ar)~~.~~~~ ~n !-~'~'~~-lrt h~ ~i~~ in ~.o ni~~~ :i!P u~~U aHd -urvr-v hl~ tr ~and then

h~ ~i~,·:;t ~hf" ~~Ia~""t"~ "i Jnan..: Ih:ti~ Hn~ ~h'~h'li>d ~;H pnru l»f~~Tu\\-._~i·~

\\',-r'{ ~;n~ h~A~u;! ~:tti'ilh"i,i i8Y riu- h!~·al hrntn"iH··~. :\~.'\~('~" mind \\"h~'~iH~!" ~lH~Y

~\--~"n'" ~~i~ ~iI:~~:~ !t! !h. Ui !l~P!~!"' t.n \\L:a~ ~hlt' r~eqliirrt Un"H~~ :i.B" :~Hd let d~('fU

:r .. in Ih:IL (';,;:1.1 Ilwi II!: ,hllW':<~i\. h w"HI.i lI.lt Iw " pily"h'ul

I~. \r, q, j In

t":\ pl·c"'.., ~i~} !H'1.inH hv ~ \~:ill he ~·h11 :tHY opir-iuf

'1, I it' \rid~ L~f; ij :nHb,!'itif" hi'll::: ~l;,,( , till' t rUI"!in :~ ft"'" \\ {-~_·i\ Ii,' t11d li !! Lt'IHT t i • Ii·;

Q, :\!l luld-;;hiliry find :1,. "\\:1 Iliad;\'! Ii! :

t . • ~

tnrrr iHH'!~~'l

(i, \'01

return to ii (~, AI. : (~, ::'1.1.1 (}, {lit,'

~·--i\. ;\11,

q. \rOIl di,.(,,,,,,,.Jj/l! ;,

value .ill":! 01 Q, Tlil on t i~p .·onH!

Q. \e..;'} W(I,.: "/JiPIWd

:~dd lJH~~ fun. ht ~~ ~~i;;'l!,.'~J- f~'H h~ 11 ~hun Id unt a hraueh hank nr n. :, h~nd~ :H~d ~ :ij!'\" .""t"nn~"r.~·.! aU ~"".~~'T lb~< (·nUhn·y--~-- h{, lh(:i jn~·~lho~~ ~h~-~~n;!h \\·b~~~h l!:f," H:dHr~" ~q' lht" hU~1nt"~:~ :nul ~h(· ,~L:~ra\·~t"r of ~ia~ peoI11(~ Hi ~ h!~~ i~HH~aU;.H~~¥ y l.,.; rt"i1i1 Th"d ~ n i ~i" ("("utra! h~":HI (~nh"t.,,~~,,·,,-,,·~-;\ .. "\ .. ~~

(.~~ ~\rh; na~'ht !h.'n-" HO~ to h,., in all nf lh(~,~t~ t·ij·~nn'al hanl~ onh'p'~='"'~"'Hn" t~ni~"'I"iHH nrlv ~"~l:UIU~"!. ~hroHuh :t. YnH"',"'---~a\~ HhfH~hl\~ hn:I!\~;...~,''''' nf lia'- Iinnnclnl aH~.~ t"~·~H~ti'~~·'i~i- ~·~~Ih!:dnh~ ~,f ~'~u~h ~ ('iiH1UHBi-!ity~ \V'nuhl d~:H lhj{ ht~ hclprul-« in ia,·;' vitul, I thiuk ? ,\. I':'';'TVI til ill\' ,o,!I:!"!H llim illl\' n.;;!tl «luuin rho inf, \>n~~:H h1H iu 8.H IH~r tKny~~

I,~. \\'bat ,'till'I' \\'Hy"·?-'~-A. 110\\,. d'I', then a~:lin L" :1 :'lii!~\·"tioll diZI! I ~hn,~~~t ~ti\(" to ("()n.~i~.lt~L

l~, \\"h:\! orher way,,'; Fur instnnec. ,.1:11 istieully '?--.\. Y (',:,

t~, YUH must knew-s-und I ('\'rl:!iB!~' think it my~,H···'\ltal til(" da!J;!,('1' ill r\;j", day "n..l Ul!(' j" rhnt we lalit, ~"IH'I':l1 "{ad~ii('~ awl-:wly them f'llld-bhlodtdlv j!b! ;I"' ~~a!i"til'~. bur w,' dn lin' j.!Pl W till" \"t'ry natur« oi UK,." economic nrol)-

h'm~, AnvwuvvI ';l!;'::~\·"1 111m ItlHlll.~--,\. Y.·~, .

Q. ;.:;!\\" t .. hall h;i;<'('11 on. H"tl,'ning m~aill to gulrl, I lIan· II few questions. t;,.h! h tu-duy trcnted n:" :'1 conunoditv, i" it HoI '?.-.\, It is defined :l:" a com:livdi~~' in till' 11l'!.du('illg: eountrios und j" :1 ('PHllliodity until it got into the bankina ,;V,.,I(,II1.

Q,J);, rilll think \\"1' arc laking til!' full advnntaee of OUJ' !!;llid resources IH' cxport ing it ns :t commodity :1:< W,' clo'!--:\" Y('~; I think that \~;t' arc makine dll! /np"l udvnntnae oi it if: ,h:u form. '"

Q. Wait a II1IJlUll'~llllt ill Ihm form. Do Inn think we an' lll:lkin!! the maximum lIO'f' of 0111' gold rr=ourrcs in tho way \\"C' havo 11:,<,1\ tlli,'lll'!-A, Ye<r do. . )11'. lir;,ham Ford Towers,]

II, Uf"'~;'m niu]w;:" ~'n' ij':i~'ij.'~ ;;u~M~",! t,," «,nnu" '£~Qfi~'.1 "'h»i'k~ ill ullil," ;:liqillaH!ilniJl ,"I ,$:m"Ut~lU!,{ln,

Q ltiml" ,l!~l'" liUi' Uh"'~M,'ij"a "~~'lj!~M i/H" \', 1")

~.l:~'-- tt Ihlff; tr\l,t"~;'(ilol, n-~ ~f li~ij_\~~,"Il,·t'-R:':~ii n g-~I\ inn~~_' t~ i ~ R';:fi'-!"~ (L~~-'-":

h~\: fr[{;,.y;, f,_~r 'l' II wt;,t

!,lij! iq HI f'~_"~~~ ~~{ ~~U=r' ~\-, ~ f;~~ll~li~

~~~'!; B~i1,\i~ ~\l"U\ W,· n'J,[d

'-~~~ :-"'HnB~~- "rr~~~~~~ij~_n'" ~lf'j ~ r'~~n-.

'\:,'t a~~!i~'!~~ ~ I~,;a~ ijli~1~eh

t;~\"', .. t~i"~ ",tL \\'""

Q., Jill! \W' :Hf' H"~ (l· '1"~ n

~"~'lmB'y, i hw,~tl.. \,",

~ ~- ~ ~lH~'i~"~ ~ l d ~

:m·,um in dHI'f"~" Till' m,r

h~:>r

h"t lhr~H :thy~h"uJ_

JUIW, is Il,m' prH!,\

(J .. "h~ ... u :~~;~-~~~; $1«; S:.i i .. : ~~;H-~-~nj~U~-';\~'"d 011' HHhic

hI III' wllhdnHl!l :11 ;;!O\" HOIph.\<,"., Tim! i, In,,':' .\. I !m,'!,

nH~ i!-~~~ ~ ~~~ ~h~~ ~~:~H··"',-. J_II~na ~(j'= H:"< j~?y~ fnl"

lh\~ p~~~"P~~-"-'~~ ~§[. :H--~~~~:Ut"iuL i~ ~~ ~ij1\Hu·~ld~;~ ~Mf lh~·' nnJr'f ~~f s:~ ~.d~iunL

'-l~ I iH~~if":·"~~~!~~~ ~ft 1·:><' ,~ih¥»HU $:; hii:~P~L, \v,,--i~~~e~~ H:i~"~~~t"'" ~~~~fiU ~~H_"h,'; J:~ ~~h~'H(

SI;l hiUi\l8:~ \\-~~H_h 1j~L :o.-h;d~ I ~~~\~~ ~-rn~7~'~i! t,~ntiilt~' 0'\ :\~l>~ UU~\! ~un·_ .... ~-u~~"~ ~~; ri~~~~ ~!Htd

:J'i." j~tO~h-,,~oh"d !~ ~U~ «"~ih-.':~~ ~~H d~~c P:""~"f~,,"~'-'" pf ~ ~j~-h' ii,~t~~k_",,"

.» \\.~,'-~ ;,~ ;~ -~',' ~~~t~~~~~'li1~rr~:;::~"" '.O-~f-.~. ,_"_~ \ "-" ..

"I" "j' "."'"",;', •• :,:.'.," , '. ,", . " , .,: r-,

'-v.~ -~~ 0 z--_ nl~(ib~""'n ~ tr-~li~i~~J ~\"~~~~ ~'~an:;, iO

cxp.·~_--:-","" ~~h a'" ~n d~~ ~~n! !t~ qn- u~' "'-ntB~~

}"-~?H tHU! in

wi'; hl\nk hi--, 1_ht~

W rwnp!c

:ij~~f a~H \\--iii ;IIIY

~ h~ ~-~H.~~.~~~ ~~~\;' H~'

h;~L"l d I

n'~o~o·;m,1 ti tin ~H~i~a l

:~tPb(HOh~,"-,,: ~~ r;p~,~i d~··:¥ n( ~"t~h~~"~~U ;,~ :IH I:~~~~'") «-jr :iH-

helat::;· - ... i~~~~ ~'-~,~- ~;~;d t~~H:l ~\< ~-\~ :~ ~,:f=~q, r ~\If .. ~\hilr\t~"~N;

till' O\':I"!/l'\'. Hh'd ! .. ,,1'1 {"nit liw dl'w;~ pf IIii' ;!,hliill;~lr;di"ll .. Ii i

" ~ ~ " ~ . ~",

:~ h'·\ ~\'~'~-"i~'''' ~~?,!o ~H ;~ ~~,~!~,t H~ ·:Id~~('-h

",-.! ~~ ij ~ .,

!~~~""d ~~;~t@ ~'"

n~-~~~~y ~B'n~' ~~ fnL~d

,'; /,,7.:::; !;~':, ;~~

• , (hh,j, iR \\-nq!d h~:i

;Hl~;J"r iu ~!,~ );_~d(~~ iJ ~,~ U(;S prou-

,

htc.~,t~.-,~~;~ ;pg 'h~n J~"'~~T (n!" i;~~'-JC

Q. All riehr : I WI'''" yml ,,11 IhaL \rlml would you think lIi IIw

;!~!\~~ .... -~~hulily P~ .~ofH~I~:~- ~~ f'!'T~:~h~ .~g::u!U~ :~~~d ~

(~,,,.~~ u , ,~'I,"-~. m..rk. __ ~ in nt:.~-.,.~-~· 'i-t.·,~~.·-·~.,."~,__ ¥~'I-" li~"!i·,,",""f'· .', •• ' f l.! ' .. 'd; •.. " •.••.

t~~';$,,_. ·~¥~i~~.,l,"'--_, " ~,. '1<.:" f ;_:.'.!~.<~.:~;; .<

B~;~_d,;;u"~ u~ ::p!~I~~»· ,.\. I n~~ Bpi' ~h»Hh~ \\ Jtj"!w-r p~"npEI('- u--d! \t~·::td L:~ ~'arr,,\' it- i!J

th~'h" pt~vk~"~~< ~ n~~\'~; rt~-;'--'~."r h~"~_ H :,·«"Pt:·~~~~HH'~' in dnin~' ~-o iu (~nnada.

fl· X~'i ~~~ ( :n~;gg~a.- -~\~ .\~ :~ Ht:; ~(T ~H" fa,·t~ I do nor think 1hr·y· \\'j!i .. ver

~~t~' UfU t B t! ;n J":lH.d:;Hd,

I~. ;\1 I'n"!n; ;1;1' i!"ld i- i!l!I~: I!Hll'ikd ill 82;1.11110 illt:'I1I<'.-.\. $H,fJOi/, 11· ;~H.(lIJO ;H~"r~'!,,\, \""_,

f.r Ilh\'iolj--h' il i" w·, "I' a 'Y' ' r !II:!! nHlId lu- handled hI :'!H.ill qll:mtJl i(''''?

··-A. :\p, '

Q. \rull!.j ~"'!I Iloin!;: il :"h·j,,:,hl.,. 1m' in,;lan('!', to j":'H,', ~:t~'. IJIH' ounce di~!''''''n('i 'I" Wnw'y, Iml :1 dj~" I hal U"oHidll(' Oil" uunr-c. i kit would h:lY(' its Y[lhlP ju,4 till' ,-;WII' ~I;: nil iU!{nl '?~·~A. To ('neoUJ':l~I' hom'ding. you nrenn?

Q. To ('IWpnrn~p h"lIr.iilll! O!' dl";IPl't':Il"IIW(' OJ' ('Xll!ll·t"?-",,;\, "'('iI. of eOll!';:(, 011 Ii,i' j'oll!irwlH, il~('n' \\';1 . .;0 IiiI' ~";H" Y(':l!'~ a ('oIL'id!'nlbh· t\('lISfllld fllj"f!:old ('oill. (l. \I'<!~"'\' ;\.: II nmtu-r of i;;'":'..;!wh gold .'oill :I" t hrrr- wa"ill Canada wa~ ;hipPI'd unT 10 Ill!' ollwr .. i,k (ur thnt PUl'po,oP. TIl!'-!' thing,.: eil:mg(',

nestions. , ,\ eomhHO the

i"~"~T~ar{'(~~ t making

kin!! tht~ ((';.c. I ",tl,

jjtiD!i)jnh~ ~ij,; ntl~;t~3'~'-1 ~Jjr ~i(':'";_~_: ~ ~~~_~r~_"

lWl'nlwlH! tl~li"~~;J;"; '"-~.ll~B~~'·'k'!. jj~~~,: i~1!nU~)"~ t"~H~i i~~h_<\ nl!!ll ij ~-~~~_~ '2~ ~H:;~A~-""',

\, v., ;~. \\

~,,~ ~tl ~··q-~~~_n~

~:,~.~-. ~ih!j~·T"l\\'~"·-~'~s;... FtOl~

Hi;:!. ',~ hf 11;'n"k "1,'! ~,

.\ ,\ J~~lli!'<-.~ !\'\_"~'~-y >'-~~f;'~" \;,. ::~:n"~ij ~ h~\

~~ ~"~~ ~ p~,\~\~~.,;. "i'~~" L~~-:, h~.·~c~~ It~~d~~cd Hnd

LJ~o'" :~~l,~ iinU:1iJ j~_..., ~Ir;~\~ q~~~'\'rrt~ ~~lj ~L~-

" -";l .,. ,.~;,-. """~'" •...• " ... P .. ' .. • ~~.,.'"., ... ,.,.,~~ .. , •. -"fI.::'" ",', - -_.\. 'l~~"';"'-"!.'"i.'"

~~(,~ ~~~,;~;r.,'i;'!.;: ~"_ ,," d .'> ~~ ~. ""-,

_ ... p~_-~_~~~iiiU _~"~~~H:_'~~~_~~: !ij'~~L

~\ ~~~-~ ~~~-.~- ~~_ ~~~~.;", ~~r b):~~~:»

'" ~,_~_;i?~;~ \._ I ~i~1 ~~~~~ ~\~'~,~~\.~.--., ~\J,~- ', ,~~~-\-'~"R~~'

h~ ~~r, ~~l~ u<\~~~~~;'~;"~~~~~!i~~ ili~' ~~ n~'n~'Ez:t~~· n~ ~~.~~~n~

\1/ ~~ h p?~!>~, _I ~'1'_n i~ JH~\~~' V~~OH!d .\<Il11 iiI,,,- '1'1

\"';'~~r",~ h.n 1 :un ;},_o.!ne~~ ~~ Jf:H ~ h(~ pr:~ij'~f h·r; ~~~~~ h H~ ~"~l~~ !uul ~~h~kn~~n~

:;oUHH \\':

t:_. t;:;t!

hn~TH\\'t'r": f~'i Ther« ~_!ni f>~'f Q. ),1 q.t t},;\< i, Ynu n.uT~·i~ \\'1

irhn \\~n,.; nk~" iu\·hn!loH tn

~~';--~"~i ~"'~~i~;~ -~ Ij,d!~d ~-~""H~" ~~a..;; i~;j,1 a daa&a~'iu;!

" .. \., I ',";1,,1 -«" . 'H i "'1 "nll:nwii.' pnim of ~~ ;:L<3~t~,;, ~~~:~[ "~~'~"r",~ d~~;~~-'''~!~~;·~;~'~'- d-'~,~:~. ':~'~~r~ -A'~_~t'f; h:HL I \\'"uuid .,:~'._~ ~""'_~~ "~'~t ~d ~~~y \\"~~:n ~"-rra"~·! ~r L,:i~1 oH ;L- :~t~!::~;-~~ \'~~hHnj· of IH!::-~-hh~i$"

ijJ. \\ ~ ~~l~J \~;t; ~L~;;~_! ~o\'~,!~';.; VnH~' I r~H !t~,~: ;-;!:;~iiHId n hf!J1H! h~-~Ut_!

~;, ~'-~~f~~o_ - ~dg ~~~- \-',~ '~~i~~ ~~... ~\~~~-:r ;i' ~"l ~bd~··~~~"~L:~· ~~~"h~_~~~ ~\. Fnl!n ~hF ~~ij.!":ll

~ ~\- i ~~"' ; ~~~~~~-':i. ~n;~~ ':.\-'h~-ot·f' I ~F,attd on ti~!~L hii~ p,~r~"-oHany- l would

nil

(~. I)" \' Ilwir ilwq IJ:u lill~' had {';..;al: hHt 1 :l~ I ,..;:n ~Hh~Uthf tnt l:j difJidf~;ft ~l hun

s " -,

~.-~\ ~,o;. ~~ ~~~~~r~:::t~" dt·hL

-:' I ~~.¥ ~~"~ ~!n~d\ U~:t\ ~.;; !~ ~tt··;.;,:a~ [ill- .. ": ~~ 1 :~1idl; Hpt"Hi it inort~ as au

;';;':','\:,;:, ",,~ ;,',L nX,; ;;". h1l.,,::~':"l:II;:n\' ;md:',,; ::l!I~::.;:'ii':'I;:I;:~:l:;;\.~\,I~('l:~lr:

'b ,;l;L~';·~ .;:l~\;,I,~Wi" I h:;'~"',,:H; t:,~i'~·il":;I,J':;:i~\:;;:.;t ::,h~~\;;~,:;;::!:,~a i::n"I(:::'I~illll::\:!\" 1~~iY~

_>";'~~ ~~~f, ?,.~ ;t'; ~!~f= ~-.-n~~~;:-~~~· i~~~~f: ~.~L!'::~iH ~-,~,~~: ;~"'~f-:"'~ ann ~"i" h:t!:UH'~_" \\;~;~ the-re :;: :::'\" "',";y. ;,H,[ ~., "H, T1H~' pm "m ;\ hHH!y million ddllar hllnd i~:,!\('. with-

._::YV,_ ~~~ ~~d ~_h~"~'~-';~";!i~f~ and ~''"~'t. ~~~p hu,,-hH":-::'; '"OYt'Tt,tl with a hniHh,~d

~;~-h~ ~~~t -p \"' @ eo t-' "~~ ~- -" 'rf~u~d \-nU (·i~H~~dfr that \YH": H dt~~ir:ih!t_~

,: •• L;':':.\, I; i~ \";:ih:';' :;'"10';;;:,; ;;;,::~',i;'!l , .. :lw:,,'r withou: exnminnrion. 11l1I. OIl

~ ~.~' !.;:v.,;: .... ~;~: ,;\c--L~t~b Ypu ~Hn i~ ~ h dii'·~·- :H~K ~,~:-'."!n a~ I jtilU_~-Ji f hp ehnrucrr-r of the ",~~~;J 'i ··~iat p~~·~,un'.

'-), [r ~~; ~;~T ;lyphl .... hn~;d_~ ~hnH!d Hot hp i~,;o"lU"d :H!!a:H~i l,!'o!uh\"jlL .nvcutorv

:,.;.1 :.H. ;, •• ,., .. or' d::n kiB,I·.'_~_,\. Thall" !l pi'CHY hi'u:ul :'laH'JJWHt blil

I ~ ~~:~J-( L~,'r~' >,: ~,..-~-jHh"~ hin!! ill it ,

\~._ \I~\" ,~_~~~! YpH l·on.~if-!{"r t~. :ul\~~~abh' ~o limit hnnd nr IHortg!tg-e (·hnl'f.{(·~ tn~ '~'\' ., '","','."'1""," ,.f .\." fix,·,! ·I",·'t'l~ I "" !llll ("In' what j1PQ'Ul"!"I' liftv 0"

~;~,~:;.;i. ;'c;:;~t=.-.\.·l-~'l:inl~ it i', ~'!"l): d:mg('l'OHi' ~(' try ;(l h'u;"I:\t;: ~;;ll!:l' 'gllO,'1

jlld~II;('n; or Ii!lalwial prupriory ill ,',1';'-" lik .. thnr. It j" much Iwu('r if om; cau w,n'k or: ;n~ ,":H it- ;,,","!I'lI! awl !wbi{·w' :1 "tami:ll'I! oi jUd!!IIWllt and a iinanrlai IWIJpr;,'!y "hidl will ·mak,· unfortunate l''''~l'llii!)lJ,; just :\:' rare ,,:' possihh-,

~lr" Gr:diiHH FVhi T~n\:l'r·_.; __ 1

By,

Q, Ilia\' :tll/ljnd'l,I' II) snv Ihat !IH' II P:{P('I'·!~·-··c\. ); 1.il" Pflfl!;:!: 11': :

(J. In 11;: (2. Thai hnnldu(.( """I I

Q.'W'hHt

to till' "il'din ;chTjjlH;:'?'~":\ , hc('all~(' it j",",~

Q, -.~;, 'I' ('m bHlTH"" v III hH:"j" it wnilld Iour Of fin· Y ur ts to C;w:;,!

1. n:u ~~~~t h~H 1 :HH

H H~f~r-(~ :~~ ~Hl ."',\, i1 ;,. pai'~ rr~(4r ~ {~ :~:l (~(~k;. ~~.nt"k h~!~h, ;~nd

r~t H(!f-~>U luB~,;HH;'~" \\ ;~i lh~:'rt~ 111Ht a~f-:Ht\. n~HhlF lfit.IJ ;~. ~_H~ni!f;~J

hm. 'Hi ~~£~r!tttt:r ~-~i thc

h'ri~t i~~\~('nhH~~" i ,~t:~~f~.H~-eHI but

;Hlt' ("h;Ho~~,,~ to, [~:#t~~t!~j;,. Ii fty O~ ~l \1 t~ t"i t IH~r .gfiO~ I I'! I !'r i ( nne hU! ~n~!i;i ~~ linancial pn~i>:ihlt.'"~

~ _. II:

wun

1m,·!.. I h~~\~," \'r~Huhl vou lik«, Th:d

~;;IW;: 111!::C!' "

fJ,1 '

I~nn'~_\\"'{"r}i frij!if~il

in ;r'~-~H!~~~(~~ inu ii_li~~f'~]~'T;j"~1 :~~~ ~hnp~ ·;",~h~~-"~'·:'<--~· t\'~--' \vpuhl

" ~ii~" ,-.;\~~" •• -

I ! Ii b

I,,·

! ~rl.(~~~~_~ :In" i'~~_e9"~ ~du ~\-,.~~ H~ ~"~.,,,,: ~~~" B JF~' 1-'~UBi·\ <" \t~~

'J, )/ll'! 1\., .\.'\'''.

IT~!'iy H!-l n~~~ 1,.

t) -;\- ... ~~ Uu~~U~~u~ ILIj~'· PPLk"~I~h_" ~t 1~80 I~Ji~g!~~'-d rphl!l~ ~~ ... l'~ntt:,,~~''-\I \r~HJhl

)'''11 :~~~r;.,' t.: illl "ian! ,!',\,", ~1;iHk ill!,imhly I1ml if I WH:··,;.r;w,:;;,: 11; \\'i~n \\~a~ Hkll"J~~ h$ h:u\'-., H nlw--{'d ~-~~g" tU~"~"f~ig ~!1H ~!i_ ;~·~i-~j ... ~;~!~~ 'in' ,~:t~~~h'" f tt':o!lhl ~p~'H,;';'tj :H'i hi\'i!;lIlill! i'l !In-.mw ;1 !I,m" oiri'/'lm',

Hu .1/1 r. !';in/uf,'

{J~ Ilu vnn ~J~~I~I\ l~f~'Tu~~..t ~n~\" ;-"-~h~1t ~U~ ~~h-~~'~~'~rA lHlifTff~tr fl'''-''H

Ilwb' ;'W"l ";mk·'? II i" 11;.· ~i'.!.~\. I .1" .,01 h"aH

~~hy h:~d .~X:HHph··~ ll~f I h:H \\~j~ I Jgp 't,~ur,.,;:~_~ !l§f d~~, ~~n.:l yp.,;~r~ itt r:~lh:Hht~

lilli, ~j';; I ,c1,Y. Hl,\' pl'r,;"md Pl'I'!"'! "'WI' \nad" II!" I illlG if I 'Ii Iw'<','

"1Ii;";'Ulial I woqhl IInl lIP ;1 h:wi.' dh!','lo,r Wdllld {"I'(

«Iimd.·w ;Ilinm if • W1"II'.

B,II l l on . .lId". 8/'nll-':

Q. I II:! \"I' .in",; I WI! I!l<'l',· '!~H,,'I inll'" 10 ""k lwhm' .l "'II limn!. J T«:lliy Sml!;t :llm!n~!izl' ill line ""I!lwiUi'" !il!" !,~kin~! III' ;'11 uun-h iii!!!', \\\'II!.i)1 Iw Iuir 1.11 1";1'.' lima !ii" primM'\" Imwdoll uf:l ,'nWlBwn'ialll~"HIi; i" hI 1,'1\' :!lId ,I'll ",mmwrl'iai p;;pl'r?" -, \" XII. I \\:!lIlld ""/,\' il ~nl" hi mali,' ""nlRlwl"l'i.d illai,.:. :wd I will hwhuje til!' J!lllwr ,I" a P;O'I oj it ,

Q, Tn llwl,,' ""illIllHI"i;l! in:m,,'!,:\. Y"""

<1. Tln:H 1 .. ! ill' {ml'" it'll al' a h:mldnj:! .'r"!!'ilf!·~ ,\, ,'I{ :l "oIlI!lH""'inl

Imll!dli:r~\'''ll'nL

Q, 'flint j" ).'!i!II' ,"iN\' !"'I!nrding Ii,!' .h'J!n'~·i;!Ii!l1l (.f lb· C:IIlHdi:Hl dollnr III tlw "'li'rliHf! !n'd. 'I!'. !I rill! like. I!l(' iWt',!dll~ of the C'mwtiiandollar with ';'I'rlill""-"~,\ \\',"1 \h "'~1'\'1'1l" I WKJllld 11,,1;: ,\Inu IV t Hi !il'I';;:, that qllf'"Uon

I;N':HI~7: it i~"':'" ... ,.'. .',

(1· -··i, ,!ub'liml oS ~1H'pnmH'nt pnliey. J -hull !lI,1 d;1 it; I do not wish to cmlllln-a;;;;;; vou ,,"mill \'nll~:IY rhnt Ii lin' C:m:Hlian dollar W"I'I' 011 a t"1('riiu" Im:,j$ it wntl!d han-IiII' ;;.· .. ult i(l-d:n-. and \wHllll have 1.:111 IIi!' n',mlt ill tlic' Iii;;:

Iour 01" fin' Y";'II':-r, ill' ilwn-;;"iug (II' ~lllpn'('iMing til!' value of 0111' primary pl'iid~ ud", to C':umlii:m Ixpm'!(·r,,?-·-A, In most of Ill(' IW4 four fII' fin' p'nr" it WOII\:;

«'''.'~.n! '";~!:~,',n:_ ;;!(:~".'" ~~~ ~)lnJl(

'!'j'" 2~-;:.~\l ~k-'!!~~,,{~ ""~t·,! li;:~~:" b,\ .. ";! l!~ ;fH~. t~

~ 1\>k'i~ hh~·gl~~r lint nm~j'd t n 1 ': lit' Hf \jJ~fl iirrHH~ ry'

\- I" !k,

~~k~.~~i ~~ V~',-,'.> $tHbqh.,

, ~' "'. f,,~t

H#~l;., $';-;' ~'y~;~- i~P'~:~!~ i' ~ H:S~~"

H';::~m)tii

ft~~HH1H lJ!" H~~'-; O~Hl l~'- Ii .1.

Lhnf 1'--hHHhi hI; j~ni'i~r~.iH~~~1~i 1-H

:\'{J\\' ~ ~i1~.'!) l'Hb\ !,v ,\If t ~r;n \\'1 o~d~. pl~H:' :Hud ~ hr' ~.il biT i'\', I'll!

'J

!<-htijH~~l ~ nl\t, i~l _"",rf~ \\-L,~tt t~iP~ J

;t~r~~'uh HlT.d ~ '\i on hn~iiH".~~ :!ll n~(~. I du nnJ :

"XIH'I'h'IW(' ?Ii lH'~;-;ln;dL d ~}f ltv !\~U dfl'A~L ,'ruIn !h'!~~:!. itH enHr:;~y, _I n;· r(''''rni jt Ht] in'

~r!H'n; :d'~' i.H"~>:~.n ... t· f}f ~ h~'

~d ~-~~~.~~q;(!!~~ ~:ij]::~~ U~~;:~~]i: ~~~.~~~

~M'~ i"g~~[I~·);n.~ft ~~~~~~ I h!n:o~.;,

~~~!~ ut:,,,, .-~.... h.~ d'~~~" ~.(jl

"~'" njii;ii:;~,il,·q~ ~'-"" ~~.~~tn(·:~:"< (P~

"i;:":"h.·";;:~'1 :;:.;~'!;, !;ii::'~;1, i;

,,9 1 r \~'-'~'i~r ~i;~L')~ (~- ~*~, f~~,'! -. ~~ ~tn H~d.\rtuL~~~:<y htl

L~~~J";r :~ '<."" q;~ -'<- ;!~ f·~'n;~~·;/"t~~~n \\~;dj. :\1:". :-:t("\·f'U.~· ~U~-

: n~~ ~n:~ h{·· l\:-fUntt elf course. that is too big

--~':">'~,'c 11bi~d~ L".~~q~ hi- nH~:~,~;·ou-t!a. \~(.r~rl!~p(~t

." ~,,~~"a\<"~ ;'t::d :~:!'-:tn-~ ~bnn~tl h(, d('YJ..:(~.l whereby nusriC~, ~;.~-~- >:L~,i,. !H~"!~~el.! dn"~\'TL \ra-' ba\'!· h:td ihp fX}1pri-

~ h~, j~u~~;~'~ iJnp!'~:il,~( n~~'-!H phu:. \\"t,; dijnH~lH t lintb \\ ~~..: ~!-~~d ~!~ d~i!' !~H~i~~' fh:H ilil-n~ \\«'r(' enormous " \\'i" -L:~,~,' i";nt.! lL~;d ihH(~ '~:l~ .~ho"rli ~h(·n.~ were ,,> :,U,";l;;""r! ;,:;;1 rl,l-n' i~ l,'~" dim(,lilt~· by 1mB};.;,:

':,\-,·:"kl·~f ...;~-·par{~tt"iy. But thp_"~,, qlH;~tipn~ nr« too

IIt,t,.· an' !Ill' I )a\~· hi dF!d ~vi wi: h IH:t!l~~ rn 1 aud ,j:at i;.; \\<Ji to=dnv. :\Iny to i lit", ]1.:u;k 11: for ~ !!f- ~.~n\·Fr"I !HanHfaf"fnl'ln".t ton!", i ht'Ll pr whii-h ttH"Y ~Jn 1ll\(-11111 h,yi)":!I! , Xn'~ ,I-I" a j!i~l ~l~·.jnlJ n\'inqlOilil"c whi will, Oil [1:(' II:

, ,

Oil :\ "nimH oa,

1I1WlH1l1o\, nu-n lE'n' ill ;JIl!' ~L H'''''ioll, and I 01 goY.('rnllH"B; more P";ld", ;iI expro-« ion 0 f (

:\ 11', !,.\CIl' ~}i~~ l~,'ik(~r in may 1)(' :II: J'i1! liqilidatioll whi hI:': illfhwl r::,

e- ;~~~'~',~~ ."";-~~n~'hy

~,l_'~~ ~ h~- h~~Hl-\;i,!C;,:

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th~~ ~ri,,'nq •. :.n

~ HHo

~f .. '~ ~ :;~t ~h:H i!;«-" urtdn::: of \"~.-~rret-,'t < 1-1 !~d t h(~ IH!Ul not,

, " ~. .

\\ '~h h l'" u~(~

., f f(;-~-.,;·r- ... _ \'"(" !hH.1 (hat the p(~reeritag:e i:;

l;,OW',\'. WI' must !"(·IlH'lll!J('l". nnd tiH'Y :11"(;

1'.',11

\\'-Q"; ~unir'n~~ ~~»nli~_~~-t ~~'l'! t{I~~~QH with, :\.Ir" ~~~"\il"tl~;~

RW!H ~'" ~L II

~uf ,~.(,i~\"~.~U''t'llgnf'RD~ i("iHUM,';t"W'IL h I fi~~.#~ ~.,;~y /'~~~ fr«~ ij ~"" hn,,! OI! U b,', B~~III, «orr ( ,m;.q;ij.

It

a.~d ~d:",o :-~ wuut Hi01H"V h» "~nT\~

r! 1m" J,n'H t; I.:!; Iii' hil; not I'WI::.

:U,~~_'\' I dij~ unl :U"'~i"pt lh~~t ",!:a!~,oHn"'H a~ aiL I jij:I\"ft- Y~·~H-~ ~H~d\'!~ IHv.~hH<-:--~

""lw!'l"m't-, ~Iy II:!'" l;lHitlll IIiI' 1<1 h\'!iI'Y" !1m! if lwy!l;ing' tlit' \lu,,:In"i~HHiL~ fh:ltt i~ ~~~~_" tu\O~'T:"~.(;· !aa:ori- inn !HH~"h te!iHn"~H!('~ "rh:~r i- wlu-re Ill' f'''i! dOWIL '1'1", fail dl'!" ilI;U \""~'W Ifnm Lwk "i I·"qr;"~,y; it ,'pllH':, fnlilU ba!,n: tq~n ("nHnd~'Hl ~ ~'~dl {'~4' r'a~!~n~ia~HL ~ri~M'J".·fnn' i~ n~ Bnt. front IZH·k uf 1".m':I:.;',". I n··t'll! II,,,!. 1"'I"dallr ~ili'T I. 1m·; lW'1i :!.II':\1 I'!PlnIH"lH';', r r'~"'"~"!H i~ pU h~;;bnlf UI n~ h~,t~ ha"'~u-f''''~'iH'n.

"rlao~~l~ art· nd~~'i;' pOlBLs I I!a\~,f in mind. hu: I (·:n~unf tUf"Hj lntl 1 ln-in L~'r,o lHj\\~ h~"\':~U""~~ Ht' {'hi! J~uUL I J'~~nk vr~~ ha Vl' had ~t \~l'rv ili~ Fr'i';-.i ~~('-";"';Hn ld-da v.

I'h~!'~' :U·'(" ~,iu· ~,,;;r~R pnhi'~ J r.huuhl iikt~ 10 "'~E~~).·~~, H!;d ~ :tn' tlit' ~Hit~'";' I .. !iuidd

H!\l' !Il 11,·:11 with. '1'1", lir-( h:l~ w do willi 1 .. :0;- 1" ltun-, awl rljl' "l'ho!ld

\\"iih !na:~", ~n ~naBnf;H~~ ~l~dn~~r) -. ~rhni i~ \\'h{T~ \\·f" ;1~\ ;,,-Hff~"~·:U:.!lp=dHV Hn~! I I';; i~ f;aH~iu~ .. ~ ~a' d"l-rihlp pi'nhh·IH of HIH'Hap:i'YH~f'~n : l;nt, w« h:fV'ti h~"'HH::·o )'h~y' .";:l~\ B~ !H~> 0piniun, ~ Ja'''''o nn- !~n1 qlh''';: iq~~t..; \\"h!~+~ .... h(·IHld h.' P1il ~,. i.!H~ I~at~k ~!( (·~·~~ntl!:l f ~~i"\" tJ~(-y af(" (!'h'..,;~illn..; tji" t!"·o\·-·rrHlH~n! l~oii.;y< 1"1. j:~ fni" ~ht"' :!j!\·cr3~;Hr'ul. hl l"PU:UJ:tHo BUUh'!";oo: in ~lu~b n wav bv their poH(·v t luu IIi:ldHl: tH"~ iHdn.",c ri~'" :~ nd :_t~·,·ir·nh kind iHdu~t ri,";-: are ;HH ~on ~: ha..;:i"'i ~ h~d ,;vill In;d~~" i h~"I_) pr~~H~ ahl,". ..,n 1 h;t~ hi I. Itt, y~":tl'-': :d~!·tHI ! in':" n~ay il~(·" t hr f·UIU':t.!!t' w·h:¥'h t b~·~\~ po:-\..;~',,; ... to ~'d nJH·!~d and dl~V('Jop thoir indu:-:·t I"i,'.~ tllHi .. {n!~I.lnH· t.ht~ mKmpl"YilWW f"Hiil wilid; WI' :m' ;'11 ffl'l'ing.

:'\0"\\"" I :'"h:dl h·:~~~-~· d~;H pnilH j . .,;q i h~!i j :-.jl:d] I:nt ; t dd ... ! inlt' t!t~·i iur»

:1 di~';I,"i!1H ;I. In how h ""q!;! II(' tlnlH', I \\nuld l't\~IWi"(!lII~' HI:.!t:!'-1 flii,,: III(' \"i~~~\'pn~;H'" \,·hie-ii V/!"' ha\~i·· h~ttl t'xpn~ .... ~r(1 I)(-'-i." an_' \~it;'YpO!H~'" \-;hi,-jt (":In h." d!':i.11 will. pll IIii' h;L-i~ 'If :!nWriHW'IH pnli('~' if Oil!" indu-rra f can be I'''! ahli~lwd fiU ;~ ;oi:P~!lHi ha~i .. au~f tH~Ti.·uHun· :1."'; wr-ll, \\"(0 wou'r h:·i\"(i; :'"'t uHirh 1 rouhl.- :thortt unr-mplnyuu-u]. "fila! i . ., IIiY lunnhl« npiniH1L ~r)H·~p PH11;t ~ \\,('!'t' br!.~u;.dd out helT in !HIP ~lHJI" ,~(·,,'inJJ f,f tlri- romruit lr-». Thi"' ha" IW('ll :1 llHH int\'rr .. iinl!; i"(·""jun, and I d .. 1101 ihillk auvthine has hPl'll :"air! tlUll wa" to the :ll1n(J\';\IW~-' oi !!nn'l'fllW'IlI" ('('n!<ulIIi"a I id;'a,: 01' nnvt himr 1,1"". I ('o\lld bring out 'a lot III lin' p"in,", !.!Ii j will k:l\'e Ihe~e two pr',inl';; with til(' couunitteo asmy humble ('xpn',; . ..;;oll \If opinion.

:\11', i.Wl{OIX: '[L Chairman. 1 "llOllld like' /.0 suv ilia! 1 differ Irom

~k B;,k,'r m n-:.:;ml 10 the sil u.rt inn of forcer] liquidat ion. III "OlJW linr-: thal

mav h(' al: right, but in n primurv imlu:,(I'Y :-'\I('h n;; Ute lumber business. the Iiquidntion whil'" WI' had in 19:m did liM ill the ('Iltl hrinu boncf I tnt hi' lumberill~ imil,;<H-;", The result hns been nil bad. and i he provinces have been put

; ~·:Ur!:~ {~t;} hi.~ v ";·Hnt .: bll"i-

e \r·~~n: b~lnk~~ r~~ tOil

iurrud ;1 h~u[ u;;,- tt rt',;-~_nh_ V}~'

1',:U-1 q'nn t",Hl::Hi,~

'I

:\'IL'\;\h' I.\~'nnf;:, .. ,~.~- ~!i'·n~ .. :\:;!1!l--~~ ~IT"u~ -~tlH~~ ~ )~~ti~r-~.li~ \r~-;

t··, ~~~'\,jB~i!, ~H\":-~).~ rXjmiJl~L It bdw,; 15

~n_'¥~--,._~- "tt-, ~ :;-;.\\~,'ng:~~ l~l! ~tl~~~ (J;_~p~" pr'ovhutJj{~::-~ .rU";p

:--~:'~~p.<:\'~_~~~~., :-~l);:" $L~::'; :~ ~'~~t'i;~.. U~~-~i~:'i ~'g.qr n In"~-~ \\~hieh

!~~J". 1;0 " ,m.! iw !,;H Tlw n'Hlh of fill'

; . ~r'~ ;~ n ~ t h ~~ t \l,"(~_ n r~_~

'>0', •. " "" ",'1f llt'.·, 1 Y':}l" \',"w\H fnn'NI

~l)"~H~~~~ ;~Hf°:' ~~~~';_H-, ~id p~~" ,"<-~¥,_,. gh~~tt :'"'n f~o' ~t'"'- U ·'HB~h(~1" industrv

,1''';, ,!pm dt~' . «;,f \,;~',\' ;~' W:I" n!~' W,j'~,1 Ildn~ nw.! ~'''Hld Im\"\.

I'rin- \';.,,- d·" tn", m W;;fl I lW! i';l/ild not lHnlw

;,;'\''1. i;'~, ,\'; lila!! h;'ld,~ ,tn',' \,";1, t., "b!:lill m"DH'Y In !,Pl"mii Iht'1Il to

,'I'" 'd " ;0 "n':"!'!WI' ni pC C:m;\.b h •• wi ...

I I 'Il\W'.L\\: ;-;;,:.'1 w, .umii ,\1-

\1 L IiI: \' n \! vx: TI:.o';,- n!'!' 'OIl" ~lJ" :d lik .. in ;1.1,:. awl

[hij'-l" I ";\ :~Lj !i.:l _~qn_L~_'r f'X:Hn~n~; :\h'~ ~rH\'r~·T';'~ -'rh~~ ... ~~ inH~ hu\"f" :1 dh·f~.·t h{~ar'-

~n:[ ~~;. ~·j';n ~ ~ t{~n n! ~ I r. ~h"\'{ -L e: 9 :dJd I L~~ t~~t_·_, hli do wir h t he del' line in

~··nndfH';--'O' ;;~ '~J~'!l'.. t ..... it- ~}H"'~]_}~i' hl HH·~I:,,-n~·I!.~ d~!~ ~"X:!I'!~f Hi' tht" d(~('Hnt~ \\'hh~h \\~;l~

d~~i' ~,,~ 1 !>- ihT~i~h" in t • P'·~i·fl ~d lHH1Hlf:1rnU'("d art n-..: IO~~ iB-~t alH·(~ SI );U In'!!,- !!"ill"~: ,,, lin:lw·,'I!,;m nil n'm wlwa!'! Timl j" nne (1'Ih'linll. Ili-~,\ ~~f j! \\-:~- .. dn~-' ~p ~;n' d~,.,,:~~ ~< i~'-i"'~H'-"'~;ln'!~ ,Hg' ~di~v hea':ln><i' ~)a~v

\\--~; L~~ i,_",d., "t ~ ~,'. ,~.l\j.~ ~~,.n~ :li:~,,'., •. i~~"·,~.!,lIl~: •. 1 :.~h~:_,i~~ !lj!~.,~-,·.!,.'"}!!:.i,.i .,',.':\)' f~ "a rt"d ti~p ~-t i~n u !\"Uf upon i iU;,Ul 'fJ 'rh n t l~

',' " ,~, <- ~~ r ' ~ ~ tlux-«: lI"w lIl'lI'a wa~ dllf' to (·W!l.l!l'S (If

i~' i'i-jlii!~'Tt~J'~~i~ 11~i";;!';-i'·~"'·) ~r!i;~t;..,!n ..;.(\~ 1 ~!l--p t lu- ("'t~t· of h'I'fi("Pl'Y .... [t)hh;;

.\! ,.n.';,;),,:'i;;'!!"';;'11T,!::;'j, ;"" !'PL.:";' 'h:;.;'i,~ ;:";"'ni.j':i'n',' ,~, l"Il!: !i!lJj~':; "i,d', rr L:l~ lJ"W h;"(I"W :t In:lf!i-1' III i/,:I,\'IH' "Iii' :tHlI!liI "" ~('~~, You have '\Yi<~;'i- tiH~~'''' fhi" !qnln\·,,~ .. bi a ~~":H' in . ...:tf-;td or' 1!~rtT :i-~ n ~\V~'l":: 111 11H~ old dny~.

\!? "~'LFY: 'rLa1 ~ ... ·"'!!Hit· !;i;'hn\"tT.

~..il :(iJI{iiij~ tt n lt~ ~~~~-';--~~:\L;-';'~ ~ 1J.i1 q"i(ij~_q~~~ h;:~~I;~~ r~~l)'

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.\h. !luliL\L\X: "i. indn'd. hili lkll l~ \\":::\1 \'011\' eilain-:-tol'l' tries to do; c s . tL;~[ in ia."!L"'nr.' i~(i· "":nH: h,;:~t~:-'rl":~;~i !Hc~;Y-l"'-:·.! d~~· 1\\"11 ~hf'IT' \vnllld he !.,~~ n'ipnr~'~:;l-~~~ Hf f'pniJn';!-('~~d l·:j~q~a~. :li" "';~H!1' Ihin~ :#pplyinr-! all !hru~~'..df h[i~hH·":~ \\'Il!dd It''ad n'" h~ o,·.-L:d i~ 'I~rllif·d •• l::n~d to mouth buvina." friL~~ p n.v tLird jtqt_-"'\:ii!~: :~n,i ,lu" (il-~rn· : Hoi-.-: if \\~a~ IiH:ntinl;-(!d IP-d;,y. :;1ld I i hiuk jJt'rliap" \[1', T(I\\q- .. wil! adlnil i- it true, thOll:!h I run not unin,t! 101 :!·~nlll" lhal; [ wi!l :t'! him ili:lk" it ~!.:\I(·IlH'm llpOh !hai. It is snid that Ihi'n' :- IH-W !linn' "'lliknl'\' fl'!' th., luuiks to !'j'n"i.!(,!' !'Olla:.'r:ll rather than !'!;:tr:kh'r ill r!'~:1!'d i., Ihl' l';:1!l" I" t!tal not ,1i1P \e'l a dllll1!!cd idea in regard to I h, ,;tfT. ·dm'''~ oi 1""111 !":,(,,,,'! '" \' would lin vr- lH'f'lI t rouu-mlnuslv shocked a few yl'ar~ :u,:,; :Ii till- i.h-a of Iorcorl liquidal JOIl of mnr: gagf';<, But it has taken place ill till' !)i','\'iw'l' oi Ontario :ind thrnuahnut t lu- Dominion in the Iorm of the FaraH'r~' Cn·dilo,,~' Hdil·i ;\('1. "ha~'n["JI taken pintl' in 011(' of OUJ' provinces at [,':1':1. w!wl'!-hy unilalr-rnl net inn t!h'~' hnv« "illlpl~' cut the interest rate upon the h011d" and :." the validitv of tllf' 1'lllllr:H't IwcolllPl! lc'~" F:l(,I'C'd will not the bankers, :I" :t mat tvr of fad" turn to HTlll'ity rnlhcr than character. because char;WItT, I"'('au-,' d,:ll":lf'\('r lou" h'~~ valur- and' j" 11111 wort lt :I" much :I": it \\';i" fOl'll1- !'I'ly'? 'I'hat is ttl!' fnlll'll! quosl ion. I should like to leave those' question with YOII, hut you may ntHWPI" them now if you cnre to do so, or wait until our next mor-t lng;.

TIt!' ('1I,\IIl\L\S: It i" I ,,'r-!cwk. Shall wr- ndjourn until \1!llIda~' al ] l? \Ir, i)eHe!lIl1nn hi!"; til" !I 001" 011 \[ollday,

,\It". 1;1' .. 10',,11 1">1'01 T""'.·,".I

:ll!~\n

x l'ni-H! Huuk

I'~"m",i', i" ("n,nH;\P~: "',"~I i~lii~i"W ~" l!MI mlih'~""!;Wdillt'l,

~k .1 1 InmU hi

,me ,m iii !,OI!' !WU;<\'

Tlw ("Inm:'ln:: ~\H .d 11", !lHW

"h",lh:"'I!\L.'\:\: Ilaif :W l.our,

Tlu- ('!I\W:';I\:\: ,)61 .\!mjJb~'

NIRwi nil lim!"!

~rh~" t_~IL\H{~lA;\: ~H fal~ H~ lilt\; ~sh:dn~~au L..; «'~~IH"'l'r~ri~:"d,

.\k ih:"'lo,L\!'\: I ":!II~d Ihl'''O;1h I.y lh:,~ lh ... , if I ",wn ,il II o"'!o('k lind if ,\11\ T;!wl'l'''' ~m~W\,I" :;n' 11,,1 lliO h'II};',

Th., ('11,\111'1\:-': I I hink ynu nil! ~:ddy "~'U!il 'In d .. u ,\11, .• L\:HT~: .\Iilhday·~

~~~k .. nud I't Iw;lI'in

\V~l;ii 'j' SLim

lun IIf Ill(' ,'ollHllii II'!',

::'01111' lIoll,.\h,\llIIm><: Y("".

TIll' t'U,\IIl,\U:-': Tlml i,. III!!' uwi;'r"l;wdim::, YOll will :[\1 (Ill :H I:! 0\,10101;: (111 .\lnlHlay morning.

\1 r, "1'0\\"1:1:": l\!olon- III'" «onuuit h'p w!inHrn.:. \\"P'lld i! lw ~;n h'l':wu 'I'\' 10

.\Jr. 1,11111,,\' if I p1;wl',1 (III ,It" l'l'tlOn! my :1Il'\~'!'1' 10 hi, qm .. i lon of ill\' 411);"1" i!ay'!

.\11'. 1\I:O:U:Y; (;i\'(' IIW :I !'opy I,,·day,

~Ir '1'1)\\,1:11:;; r:lmll , lan"l it over IIlHiI~rl\l\llay'?

.\11'. Kixt.nv: Lshouhl likr- to ltuvc II i-"ilY l'i~dl! 11I1\\', I !I.1llk 1 know tho ;Hl~\n-! ..

)11', TOWEll"; TIll'1I I shnll 1'1:11'" llii th!- n-!'Imi an :l1i"\Wl' In :l qUf':,lion r:ti~l'i!1 hv ~Ir'. ~.I{'(':('t·l· ill ),('~llP':1 10 nil' t"h:Il'lel'l'd hnnks a.\n\lwf'~ from the BUill. 01' ('lIll:Hl:t ;1"; "\10\\'11 011' I il(' I'd 11m of dWl'lpl'l'" hunks to ih .. dWllinion gO\,\'l'Ilt1wnt.

ltH!t~,~ nf ~ ~l~-~rl\~ .. ~ ]lrh-_~ U m lin\'", ;\ !Ill:;".

~ hl .rh); mIt! !w net nl] nrvinu." ni i, ~!~t;d am not lid thni :1' than l!'t(nl to r 1\ few 11 niul'c

of the evinces e upon not the o char, fOl"mm with til' next

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~< ;\1 t, 1'1;;1 l\jr, TOWl

.\1) eJ)\'l"Y m:Hll"ll in wbitbnlif'\'(' I'dCl'lil1 an'l'I,h

AI

,

l)t!{'(';;.~a: l'ClHT i, VOIUllH'

'fh, becll (11 ,Ii(' HlW OWI'O w and 8i>

Th been t h ('tlITI')1\" 111('1'(' "': 01 ell)"!'t llIt'1l L~ 1 wliieh ] of this

I I dept'lld rho reel HC'1tl'jlil tb' 13m

T!l(' C1H i\,Ionda~' I\lOl'L

The comn at 11 a.rn.

"'.':

&~ ~ '- ~ "
--
/" -' Z Z - /'
.~ Dh .. Graham Ford Towers.]

).l\ .. KI"i.t\\; Ynu may pUI my :111,,\\,,'\' ill n$ well. lh', Towuus:

TilE EFFECT:-; UF rsix« AX I XCIU·:.\,'-;E JX 'I'll E rUl.r:'l E ()F ('I'IutE::\t'Y '1'(1 HEIH:E:\l ;\1.\'IT1:IX(, ;-:!-:t'I'HITIEB

f

.\1r.!\illh,y 1':IiSI'd ilit' qIH,,,tioll ut y~,~!t'l'd;I~"" IlHTI!II~ a~' 1,1 \\hal I'fll'('(': !lil'!'" Illi~hl il\' 1'1'0111 Il"ill~ I ill' j"'-llc of {'!llT'-IIC'.\' 10 IIl"el ~"(,\lrit>· matu=it ics. 'I'ln- 1I1I"W('I' lil thi" qHl'''''I!,lI dqwl1.!:-' "plln 111i' ":!'I'UI!I:'I:UH'I'" ill whil'll such a !l'alJ~a('linll nt'PUrl't'li and U(lOIl I ht, umuunt 1 !! \'01 \'1'<1 , 1 111'11('\',· I 1':111 Ill'''! (1.,:11 wil h ill(' vurious .1"11\'1'1" fir Ili!' pruhlem hy .'('!\·ning 10 "e('lion~ tI!' mcmornuda !'UIHlJitln{ al nreviuus Illl'!'lill!.!~ which

:11'1' 1'('1';\':1111 it) this que,..!iol1, ~ , ,

At 11-;1". a l·tllT('"polldin~ illl'l't':I~e in Iht' volume of lllfllW~' IIlU"t nl'I'l'S'''Hl'il~' follow all I'XPHIl~illll ill III(' \"uIUIIU' of curreur-v. It' 11.1' ,'UI'- 1'{'lIe\, i:.;slI('" is !t'r,wl tend"I' Ill!'!'!' 11\;1\' h\' n \1'11 In Oll!' ('"p:lll~illl1 ill tlte \'Illuim' of monov ;1II ! he hll,.:j" of it!l'I'(';I~l'd hnuks' ,'a~h 1'1 '''i'l'\'!'-,

Tit!' ~i'IIl'l'a'l ('Ih'{'!,; of all t':\p:l11~ion ill till' \,,,111111(' PI' IllOltl'.\' han' ber-n outlined on !lng('" sa und 8.1 of the minutes urul Pl'(\('('cdin!!::" If IIII' amount (If expansion were i'IlUUglt 10 rc .. ult ill ('ul'n'IlI'Y d(']ll'!'{'iai ion tht,l'(, would he certain other results which me 1'l'!I'I'l'l'd i tl 011 \I;\g",.: 8.1 find Sfi of the 1'(,('0],(1.

The gcnernl erred,,.; which :11'(' menl iont-rl ill tlll':'(' l'eI"I'l-Jl('e:-; huvo been those \\'hidl I would ('xpe('(~ to ()('('\II' if diP additional amount (If ('UI'I'I'I\I',\' \\'('1'(' 1H'I'mit ted to Pl'rfol'll1 lite u-ual Iuuot ious. If, however, Ih('l'(: Wl'I'I' an aUl'lIlpt 1\) uout ra liz« tile: 1'I'f,'!:1 or all ilH'I'I'UH: ill I Ii(· vulumc of l'III'1'Pll(',v by "Pille :,neil IIwa,.;lIl't' :1.:' HIO })(,I' eent. ('a~h 1'\',,("1'\'(' requirellli'll!~ 1'01' I he chartered banks, t her: would he' cort ain olhel' 1'('".111 ~ to which 1 have drawn ar tcnt inn ill pagl',~ HJ8 and II)\) of tlH' Pl'ul'l'C'din'~;; of t his Commit! cc.

I belip\'c thai till' imporinnt (,(1'('('t" of a transaction of this kind depend upon the amount involved and at !endnlll ('il'elln1:'laIH~f':, bccnuse the technique involved in el'entin~ tlre additional currcucy by retiring' ~f'(,UI'iti('" is much lhl' same in {'n't'et as the present "y"tull 1111(1<·1' whiel: t lu- Bank of Cnnudn buys sccuritlos in order to expand cnsh 1'(':'('1'\'\'",

Tho CI[,\(IDL\X: '1 fir eommittco stands ndjouruod until ] 1 0'(')0('1,: 011 l\Iouday morning,

The committco adjourned at 1,]() p.m. tn mer.t again Oil l\lunday, :?\Jay 8, at 11 a.m,

tU~SSrQN 1939 HOUSE ()F COMA10NS

STANDING COM:MITTgI~

BANKING AND COlVIMERCE

MINUTES OF PROCEEDINGS AND EVIDENCE

Respecting the

BANK

WITNESS:

Mr. Graham Ford Towers, Governor of the Bank of Canada

01'TAWA

J. O. PATEKAUDB. 1.S.0.

PflJ:'<TER TO THE l{INO'S MOST llXCEIA,ENT ;\fMEST\'

,

MINUTES OF PI~OCEg])J NGS

Till' XI:llldill~ C"liillIilh"I' on BtlnldllU lind COIHIIH'I"~'." nu-t ;ri II 0',,1,,1'1, :UlL. tia" Ch:drm:HL~ll'. l\lmll'l\ ;m'.idlll:.: .

.IT.'mIJlT.'? In'/,#iil: 1\li',SH'l". Hal,,·r. C'illl'k ,rod:-s"wbufl/l, D,';whmllll.

Dounclly, DllhlH'. l!ow:II'Ii •• I;UIIW>'. l\iII l\,,V. Kirk. L:md"j'You, Lf'dul", l\1"C:i'HI'. l\tanill, :\1(11\1'(\ Sh'wn>" Tucker. W:ml. Wnod"wllrlh.

111 allclldmll" " ;'\ .... Ol"llilllln hII'd 'l\)wl'l"s, (;0\'1'1"1111\" "f I hf' Bank of C':lIwdll. In lill"Wt'l' In II que>,Uon n"IH'd by l\!t" 1)1':u'hrn:HI at Ihl' 1:1:'1. :-,iUing. l\h. '1\1\\,\1'" I'toad .. I't:llt'llH'lll 011 the reasons for Ilw deeline in banks' l'OIlIIIWI'(.tn! loans.

Examinnrion of Mr. Towers Wf\S continued.

At 1.05 the Committco adjoumcd until tomorrow, Tuesduy, nt, 11 o'clock

n.m.

R. AHSgNAUr:l',

Cleric of lite Committee.

~""ft9moiO(!,' 'm W, i I :\)qi.;r,""

U!I .'Ii' Dhwlumw,:

l~ ~tt. C!wirm~w. Wiwh \~, !!'u l"'~11 " i

II!lt'J'Ij,'R", III )'IL, in 1'\J,';;QU"d 10 !lw ,~,,,dl!w in \,!,,ljmuu,· i»!' ''''I~Tn!! Imm~

nud I !I,~ 1101 I'll':'!! Ilw \'X:I«'[ ,!n"¢h'~" Iml tln-

Uw dl'<'lim' mit diW W nl:uw' l·x"'!!1 h, nil' «IN'HII!' lei iiUf' prll"" :'.1:1\' {

PW('!·~'" ,fI' :'11"'W'·I";'

tJ. YIN," ,A .. I h~in' "'mw ",,,I,'" Iut'!"I" ill n'w,m! h' tl,," f«mr"H'\ .d IIw

(IUt'f!hm,

(l· ,\ It l"i~hL WI :liH'wl, ,A. Y"q wm n'l1lt'mlwl' ,h:n tiu,' tl~w~Ii,," mt'1H i01WIl,

tir.til .,f IlII. lilt' t,m'N Ill' I iu.' ,h""liw' iH Ilw h'v~'l; next till" d!\~hi' fur liquidHy;

thh',lly" pij:;tiibh~ l'iHmgi"'; ill Im.,;im'H and, l"iII"l hi\" ;,11\' 1'11\'ei which

anxiotv ill r('~:inl i" Ih,' fllHihm'lD! mi,~hi !I:!V(' 11(,.( Ill! l"I!I'!j\\iil~

tln!i I,':mlinll;, '"

Q,y(,;,'"~A. My m.l'W'.T ne~ .. mm'uiw.! am,,1 !a'l'ic,'",a!"i!y ill I'l'nai~, ~'Tliolk (.f i! (II it'll"t ill' ill' 1. H!'," l1!t'lI!"r;d d'IU,wll'L It h-' imp41."sihl('. J t billk. 10 I'al('i!I:Hp lmw much Ill' !lop In!! in !'nwnwI'!'i:iI h:wk lfmll" h fhw Iii "iH'I. or ilw \',Hltlil" , " .' whit'li \\'('1',' ,'!Wr:Uh'f' dHriw4Uw IWlhl!1 III !lw d,·,·filw, All ilWI NllI hi' !h!lw h' hlillllil'lIh' "wi \,,;H;mH i':lI"lm"i lor knuwu r;';HIIl" Imh! hanhnd WI np!wf'I'I.Ii>h· 1'1)'1'\'( llii Ihl" "ohmw of !''PuHllwn"i:,1 Imm"',

Th!, rOW I'!' pdi'!' ., wllk!! I" fh,,' f:H'anr "~I~;l!i"'lnl 1/,\' ,\1 L I kadnllall

,m''';,''''IH'',IlY Iw::, 111'1'11 all illl!.ml;ml n'tbnn Inl' H "millin' ;Wiolwt qf !";:Wlwn'iH! P:~I~1 '-8f h:u~-"_;i:~ ~~«i·~~Hn@·l·_~: nn~ for 1h«i! PH&'TW~,~:~~ fid thrn!H·jut! d~p "!H •• al! of il!lhVl ry, ""hll IO\n.'f prj"", nil" r';I!W' \'uhmw of hn""lli.ory )"('1'1::'1"1'1;1", :1:,waiUrT .!"lim' im'I'''Hlwlll nml liwH"foR'l' I"!"(.lmhl ... ".,~ lI,ed bank ("r!l,<i~ ~ II f •

[)~U~i.~l! thf1 \~t":~rf \\"JJ'"R~ ~«,~n("r,:d nfQ1ir~I\" \\~af; '·~.HHnH"

Hl;U)·aa imd li!l:'TI" WI'l'I' !,,·b, il '\~ OPlmi"tm,il if,," 1,,1' pmfHahh' ('Xjl;m~iflH

IIi ino/II"I rinl !'leI,ilwj itm, II mnnv li~'HhaU:lim"d :I ""1'\' liquid wm'kin~

('npil:ll "LI'" Hoi pl"lliH:d;~(, :ft\"'ml.'': for inn'"lrn;"lli tlw~' paid 011'

b:wk !"alli> :wd huih-np ",,'h hit 'I'lli'D'" wen: .. t!w!' fil'm~, !If course, whi"11 \wn,' nll:,hll .. W \\"-;111;"1' 11", llmnwi:d i'ri"i", UlJ,:I""j"'f",j '<lui hwl to ilWrI:'!IH: {lid!' hmTHwing::, fl'roIll rh,· hank. Till' n:~lIl1" of Ihi,,:,iIHaHoll upon til\' ,'(Hlr,,(' uf b,mk In;<lI" dHrill~ J!M,I~ I!J;IS. iUln' bl'I'li I\\",,-Iulli. Fir~'. finllf which ;,11 ;lim"\ It IlI,,'llfm Hi 1i(l'lidhy Itt I H}:U)·:tJ h:.IW' 1M'" nhk 10 nlHnwe :\ ('on"idel'ab!e dczree (If l"N'I'V(,IT WI! flf "WI\ ,"u"l 1'.',oO!.,n'('.:, will",;:l I'N·Wlr~.' to til!' hanks. ::keom!ly. 'ilupru\"t'IH('nI ill im"illt"" ('mhiH pennill('i mnuy 01 Ow (inn)'; width w··"~' 1"01"1'('.1 I .. ilwn':I~1' tlwk hank loan;: in m;m-3:~ 10 repay tlmi'C 1111- vmwp" mH Id UWI" l·HrI!ill.!!'~ ;l L:m';n' n"I!IllW of IllwriltimH, Tn~('!h{'l'. flw,,!' two t;!i"tl.r:' WI'J'{' hi n large !"):II'lH H""llIIllHibl!, f,w!h" "nihll": c' ("onml!;l'e!Hl

loans 1'1 ri·'!" HEW," quit·kly :md II/ H extent durin!! W:ti :38.

435

~ .• ~n ~ h~,; -~ H H;t l~ ilnH H~ ~_iji ~~'!lIElf~ rnii."Lt",

1 Lij_ ,~,~ n ~tf'~~ n~ 'rot 1.1l! U h~i ~_ t~~

~~ ~£ f~l~~1~H~ f~f hnp~~rl:~~lt(~

~~~,~,\~;-t ~~ qIun~~~i~:-~( ~ ~l"': .:\Ju" ..

f~'T~ ~:~J~H~~r~~~~ i! h~i' pn~;;4'ihh~

id. a ,,( L" !·!:d. i";l!~ ~~u.,,;i'm h"~'~':.!:;il~I,~ t~~';:;li!'i,\I:iy~: t lH~ efr~Tt {~f n t!t'<(,iiHHC' in

p~;' :~ i~~:~7~nu h",'~;':n;·'"'(-" ~ h~~~i~ h~dnnf't"

,~:-dgh" ~,,:" d;-~'· ]~~~/I'HI_~:"ry :n~~i ":riB n..cqa~~:,~ Hnt

h~, d~_'-'L~< :~~~,_~H~ ~ ~jn~~f ld -t!('(

in ~~~p JH~'~un" 11~:..;: (Ju]rr~~~ n ph-~,-~,· o( work ; "XH'n~l\'(' h", .. ,I •• h('~'. lil!'f'\lIlgS

~-~f ~And.: ~ ~~) pr~"i~f _ ~ tr~:~~ n~ f~(l(~H

1!~' !'~"f~T:~·d l{l! f~~!-- !~H~''''~ipn nf : t . ~;Tt'-~H"T ,of

\""':~~ I~~_C;~~', r~~!'·.L Your n_-p:y h~ '~;::d ~ :i~' n·;-:d1

,,<: ',;; ::"'. :,/:;~:: ,f':;.I~I.:;);/';:.l~, \'I},~·;:!l!J;,.l:")!h;i;~.l:,c J;:!'~;~

jo! D'~~\" ~~j~~ '~\. ·,-~.,r~·r-~>( '" frn!u nn

Pr: {'"g-,r"; l~l:>~~C~""';~;Y: n \r;g~H \"{~Udl

><'~ ~~~"r :~t\~~ s , i-..; f.(.c-;irit~~."

:;~ ~- .\~ hnf ~H~ makes this

t~~_in~el~~U~~ '''''fi;lliS to n~an\ :i,;trug'~de with nature.' wh.eh dis-

IHwr111 1 \l rn \11 H \'f'f(;11H

,~!£rVl-'r-.nH_H'n~!i, r}l, Hnn'CUIT\'nt

f~, "fh.(H' ;_-+t t.iH-~ Yf-_;~ r hiJdlc lfHl1.(".lV f--t~rrt.;tt :)~-.(i,. "rJH~ ~c,~lr!· $HL:Jt!:iJmu 1 )}1

~ 1. ,_

{l$ l~' ,,:.; ~ ;.~~ ;~~lfTt';,

l~ujn uf ! h{, l~i_ln~rnrr~'-i:-l

;:~;;<~':l~~( X:~nll\\

:UH tni\hH~.- H~.V lli thing \v'~!{'h f'~la'li 11int it j:- ntt.:; ... H.l! h~t\~(, ht'{'H ':i ;11 d{

Q. Thn! 1" <! thnt l't~!l'k'i iOB \\ -A. Ye·".

(1~ 'I'hc ad \'Pj

TIll' C!L\W;\l )'1r. J)iWID:

S!,aH\~.

Th« ('li.\ill\l

LJ!I st». fl. "rJ;('rr- i~' ! ~itt1;diun \Yhit~h t_:;bd r~"fldH}d hi !_

~- ~- ~<;Y I \\::dd tiHjr~s, "x!~Fn

f,!~ If ~~~ t';~~:.1 II I";,.. j";

J!)' 'l'II'~:""I:L! ';'L".

t_ '_. ~ 1 '.' ~_ a '- d' ,.

thar. llii"4H'{-t it·::lf:i

'-l. l~rH nl~r~' ti:d?~.\. )', <. it ;

\\'a~ ~t lorn:· i .n~';-:;i,l li .. jHd1!l~ Y_~i_~( ;.ti!!1

count rl~~"': 1;Ylnvn ; C01U'if'. ~d~d vn1en and tiH~lr n;fJ_ in:La ~trnn~:ly' i11 Itl~?11_A

tlt! ";"',1"""

~'i-nt~· t~H!~ 'Oft, tn

r~.','t-~.~cfJ{~, t,". t ~~~HJ

ml("I~U r:ilh~"i" w.nlh n'hn('~:mil"\" (iU' blil!'Q"lWi:j"S to mnw «in ~ll~rln !,Ul liw Ii," .. j,r.iml ,l,n lin," t~i'lmn1I"'!'U;l! h:ml,,'[\ ml.,l

"{'ra;liil~ :i;lp!i.":ll»Il' h» tlw Hl;~1 w'l,\"h

i':U!~ amd

1»':1, ! hi' ij o~ :al !Qwm"y, :l1'I',U'tUmt in i" $:!,·mil,nO{l,(J(lit '1'11;,1 wwaM !ll' "ppl\,l\i~

.,::~~!'mdl~ ,d tlw hliiulu, ill Hi!' "em' wal Hllh'Hllh:d in im'lwh'B ;\!"n lH~1 lilt, u{lkd .wi NIWhll'::' :,uam Nnp!~jy(',1 HI • IlIl ,If I 1'1'1' (:tHI nil lIi(~ )'i'$,

ill't'l'llumouut

n

c

uf [!h;'

Lonllill\.t 111 Ii fnml !II(' l'Llodpdilit HHlr~al l:}. ~n ~"nw ndvrnturous :,'pi!,l!, NJ1tld

(txtt'~~!nf·~V n~~ l·fl~\r ~ V~:i)~1

Y>lll'!.·~.( Xn. .,

Till" IH!'llilH!,'" \Ii HI~!\I Wd',' :$2S,UllfU1UU "" fl.;t:lin"t SHI,OO!),OOO III HI;~I. I

am I niv lhnm~" 11")111 I Cmwdn vr-ar book, agam, yml lwil :smne-

thili~.~ ;'mll,'d 1111$ "pii'lt of Ihh'PIII'!H'I', £t. would III' trp, .. would il uut ,

. ~il:!i I·iw 1~1'IW!';lh, >!Ii 111111111'(" like gi·lh.'n\I~' in an army, nwl'

bn, IIlHI :1 Hn ~(' Imiih'''y?~A.Yt\;;.

Q. Tim! lsml!li!wl' !':ilH"Tlml b i'1'!'lmps I 1':IlHI'. In "nnw ('xtt'uL of

thnt n·"lrll'/ioll which M.', :-;\e\"lm" dlsl'u.i";i·d Ill!' miH'!' lI:lv ill !'I'mml to 101\11"?

-··A. \\'.". ' ,

(,~, TIll" :,tln·lltHnm" "'pirit Wn;< J~mw Iw(·:mq· of pnwll!'IIl 1l!'1.!,:< .. iiy .. ~

Trw ('n.\!iI;\L\x: \\"mild lilH Ih!' word "cuuriuus" Iw IWHI.·,· UWI! "!wldd,y"? "\ILI h:M'JI\L\x: ,\ ,'.mdHillll .d p:wil'~ J think. pn'\'nllpt! ill tilt' l;nilt,d

Ny .11(. n'Odll,IfHl:

'1. Th,·r.· i. .. p!'ril:W" :iIlollwl' !':.I""'. II yun (\xplnl"\> it iml b,·r. The pHllieky ~i! Hill inn wh il'i! "Xi;'clf'll ill till: l 'nil ('o! :,-r:d ,'''' In:IY have her-n i'alTi"d 10 C:!ll:\da ;;~~«~ n.·.··ni~~pd in d~p f~X'-'l~(~i of a t"("!'Ldu :nHuH;,l fif fi~HUion n:'n~nn:~b!c nnd('r fh~.c ~~in-~:n~..;r!~IH·p,,;. "rhzt!~k~ ftHO th~' t:"or~·~,,(~~jou. :\I!'. t "h:drnHl!~~

X~"'%~; i ~O~··;~H~ tf5 ("nHit" in n~(, other pt};.,ii_inJL hi it not irm- 1i:t,d hf·T(~ are

nH~H··~ \\'h~"z' :on h~ nC.·f·~~:lry?.--~·-~;\" '~(';oo.:.

t}u i: ~':;,<¥'r ~n ~··hi'"""k !! hn,.rn !!~~n] !n f~lH'~'k ;t ·~)-··-~A~ It il'5.

f·r I f ~ ~q.'. ~~~'·n ~ r~d h~'~ Hk.... ~'nH iJ h;t ~:c fun"f"_~~'t.~n ! h~· t"on~H i inn \\'Jd{"h H!'O""~ Hl

H);!!I, !'u,dd LaW ,,1wl·I.;;':I II if bd "Wl'l!'" ill Ifl:?-I':'·-A. I would ~ay

~ at h·~i""; @ t~d!Heth~n~ ('~h~dt! j!:~\~~" h~·~~H d(ll~H~ if thuy" ::nntcd

.!~ [~~H o~~~~p f~~'~ r~·;~eL~'~·1 ~hntin ItJ~n w n- uur, li~IHid:lnf1n t:3~H~H-

thd~!-·,·~",,\~Y·(',~·\. h \\.~;l>·" aud uur- nf t1H" IH!ij(il" (·h:~ng'PF whi r- h look pItH-P, of course, U~il'O_~~P iiH~~~~~ 1 P !"O !~u.) in(·!nding JB:!8 ftlP l!n:!l-d Stnlj~'; h~Hl been

~~~:~~i ~·u!n~, rtbn~;ul: Juud JJH.iH. up a gJ"f"atly en 1:' i'!~ed Vi'-url,! trade,

:~..;: t;~c· ~H ~ hO:-;j" \·:t~~ ·~\·'f!\; i>x1H' .. "ndt:,d in tiv' v: <Oti$.

C';)Hnu".i~';>- ~Yhi~·~h r,"'~'''~'·'h.''~fi ; Tl.ev \Yf"l(i nnt :dl IO;ttl~· (0 ~!O'<iTnHlent~~ of

. ",'ounl rit'" widdl l'I"er·ired thpm", I mean mJ\'.'rnnknf" and i~;'id JlPf~l·~ .g(Jili~ on fot" ~Onl{' )~c:tr~9 If f!ot gnill~ quite stronuly in W:~;). ::W! Hl2G. 1!)2j' :md HI:?8 wr-r» n';I!':', 'fia'l! tlni lllt!lling

fH&ii\-hy w.r-. ~}!"':~f~~. ~p~";~k~, J.~. cut olr :jnn!l~t O~~'t'T"

,1!1" 'nw"u' _ \\'Hl' 11<1'Y p'M.»!'

t":~H";;. ttb-~" Wt'!'." h WII"', • !.uly ImrOy due

~u~,'n' w"'" i'1··rh~,p,. n ~rn'lI! H·,ali~'ln(\!l :it IIMI

kRI ~>h;,n WlM, Ilml [1\(. W:lYt nl' fIH'I"H-

h~ij~i \:.!-~trt~' -"~T) f:u~ ft ~~gdij ]nh"fi"fi'''''U n~iQ'-_t- '\~~"n" v\~ry hi~dL

"rn!:' ~ ~-'!!.-~;~f!U U~jt-'n~nr~\~ ~ ,l" iii i!"'~ '""~~l

nt~d~ ~~~~~L \t~~':'" i,~" ~~~TI~<t ,\ __ l~ ~~~,'I:\" i,j~~\'t· h:}'1,~~k iaij IU2,sr, ()f f'fnur,.:\'.

il' 1I!:.!!l 1\;.' 'hf!, ,~~ Hr ~;~;mwl" .. (I\J:!S 1 I!dl'!.: " 101ll'IIP.!

"rL~~~ hn~'~~t;H (l~d ;~ ~~i~ ;o-;:ij,:-h :"~ e- ", n~Ti"~-:~n: ~n!" ~.~~Ul";; f(~f n~~\~ i;hHf~

t'np-" IJlI~alf:hQ: li;~_ \\ h:\~H~~ ~'''''~~h-''~' fpr ~'nnr.i;!n h-hdiHt!' :11- :Iny

\~~-<- lh~f,"n :H :~ H r-of ~~h~~" ~~nd \\'~~~e!ij I"Orrf1i\\'~"r~ f'ouhl

~H~"~n~~ tha; ah~t! r.\'p"" J'~h-~H'_~~~- \\'~H', ("ag BH' hy ~hf" h]tF!]'~{~

H, Jh, 1J •• ll'lllmm:

-J J- ;;~~"~LI!'~ ;Lar" ~~~;~L L:d~~~ ~'~~L~,:' "-p~ ,j'"'L~d~\',_ ~~f~[ .. \'(hi~"h '{"'xi;·~h~~i h~ that

~~H;~"" ~::" ~h~' n· .. Ht,- i~~Y! ~~~~, ~ ~~~ i~~';n~~~n ~B ahtit {"{~fnnHnv uf tlap

('~HH!~ ·ral\,;.~ !-~J~" I!~:\~~~t~; nH~ ~"",,~,,'~h!~,~:,!~p.~'h; ~1f ij~Iidil:""rit·~, \\"hh'~Ji u~DJd.,"!: nonuul

i·,,!~,nH'ii~ "'"l,>' lin! »,,~! iI, c)" t";;,;,·; ;-:':1;,'" hm whit,!. ",mId j'xi,.\ unlv

1 "e ,\,,, '<;'~',D"'.'·' .\ I w.iuhi !ind i! ,Iillh'ult til lH,ilil

,\;\>'! ~ll.h,.~ry \\1..1',. tioal BII! I! j. 1l'li!' I!!:il Ila' I''/lIJnn!l1I:<

h,~~· ~H'~ ~vit~~ ~o~.i ~lc~,\'."d ~,,_, 1 \"{~~"~' ~.'J'·\~jt! ly. ,(fll~:d ~p{"(~Hla""

%:~¥'~~; \\,n"" ~!d~ p:~u~, Bot nhly ih ~,~ut" ~m;;j ~ b~~~ :d:lii in l't,~:tl estate.

I~< I~'i;:"<\' I! Wi." "d!l~ th;:\Bn·,j l .. ;;11 '1i!'!'BHIH~,~'Xh'lil, hy ('red!,!. Thnt

,"r, ,'/'" ~ H'-',~t~ H"';ii,·d n~ n:~ n;, ,'" ,,'~\' ~,o "'!i \';. ip nuv !Zi 1: H flu': h(-r he,\' l",,~\h~:~ or

~-'~>i·d- I~·~d·~ p; t! \\~:~ ... ht',iHi.! ~P~'u~H hy ~Hd~;<d~ial~' :t~ lJar( of tln-ir pruJit-i< ~l'lu~r('

\~'a~ ~-~ ~:~~ .. ~'. I'nt~,:~-r "i/~ h~~fh ,:p~3~d unlv lu- nf a 1l~nUh,rHJ"\"

~'~,a:';w"~' ;,:; u; wt·i.-!, w;,. hWll,'! hi 1.:.\'" ""IT ~P\'('I't;I'I'lwl:-

~,.~~~ .. ~~~;,!~,,,, ~~~. hn""~!~L":7"'

\1. h Jj:"'~~n~d nHI"\' Itt' P~~~T(~J·~~ d !ijY a pr~.r("~~',~ ... n~' ~h"l!ntiun~!~,,,~,;\~ '·t.~~b

lfi '~~dTy nit ~~a Hh" 1_~'\~«1 tht':1 (~xi .... {,jn.c would simnlv ! h, ,';l:.w:d! ;-!llPHl!"l,'I"~'""'\' Tllai Will!!;! 1.;',,:., :Hld r ... ~;~~~n"d ~ tH" ~-~ ;u!!~" «la"\' rf"a~lh(~d in iH2H. .'\ ~"dllt'"'~~i~,"!~~.i.@~f- ~,~,~v~~r~~A:_~'d BH~~~~f'~~H~lH ~\'~~~ a ~nK'\~i5:.t;!«·~ \rh~'~rJH"t· it ~·'.:·d !no ~!,;~~"-,;it~"S \<~~~ ~ ,,+-l~ ~aLd \\'(,'-Ht ~H(t far. ;\ia'~h!"~~ H ~~ulIl~'J J~a\~ff" h~'TB ,--"iOpPt"ti :H an F;[!~~~~g .':~'~;;:!" !L:n~ i~ \~'-~~'" ,,;'~('ppt'd i~~ of i"pur:,,-('. n JHntlPl" hi" opinion,

t~" ~n ~;:-'~l~ :~~ 1~":;,,,,,~ ~~ l~~~d ~n i!U~\f~ pla.'~· ~n a (iI{"rt:~iu eX~~~n!~ :tB~1 l!a~ onlv ~~<~ t1d;:~~L i't"~~~:d~> ;~;: H-~ac aBiHd~ \Vn?i:i! h~' \\'iH."~ht_·r tHHlt'~r ihi< iblP~'~U"'" \vtlj,"h '~' a ~'"L h~,'~"an ... ~: i~, had l ~".-~" ~ ~~I hl::L i~ J~;~~'! h':~ f:di :. ~·'Hl...-:jd';n.-hlt! di,,""!H1H~~'q~:t~"'fht:~ r:",. ~hd i~ t;;:~ iijO !:~r:"'- -A. 'Y~-~~

X;"'\" I WI,!", \., :,·k ';"q ;, 'pw.,i;,,, PI' iw« ill l'f';!.anl ill rhe liikl'lItin!l !If ~HHi ~~qn''-"n;i~y ri,''-;!U~=~~~dH''''" 'You pn!h:~hly I\no\\~ of )Ir~ J'L (L lfa\\4irey~;o; lkj"f,k~~J· ~\ ·~'r:H i\rf ~~s' (~.o~~[r:d ,B:n~kiH:t"·:)

n Y".,_ .. -A. Y.~"

Th« ql d\'i'fi'~' l'ntll; v 1.111 ,\ '. !'I'/'vif'1

~l jilt, PCI

Q.

J WHlH at 1 ttt. : . . t I I

'\'

pfHH' :2:

(l· :\1 ! x IJ

"-rh~ ,~-" ~,'>o pH,'" g \-u~ ihort~ \\'-hit"L I ~hnuhl likv t@J n'nd dt<a nng' wirh dH.~ vcrv

, ",:.1 nn ";:iPmb;.' 'Iwi w!,id. had hnn h!'OH~ht Ill' by :\1 t',

'l.

illg ~~'! opinion !i'\'e)' \ 1, opinion 1)1' dV"l eircurn-

(~ tin« .~~ higl.cr ! (}.

. t I:; th. ", !Wl1.1. a:Li"'h may "';;'111' iI~ 1':""lli! n'!!lIlntinn Ill!'illl~h Il':ilb

d~~p!~' "~~i'~:~ 4";~tU-~ H~ "-"ih.~H n ile~l"iT!, ra~ ,Pt;~;';HHI~!U nnlnn~ t ruders (,hut ~ hev ~'~:u~nq~ J.H'· indH~~~,·d tn hurro\\". t, )rdH~;lri1~-:. in {trd\.~r I" hriu!.!' a.hout fl '"!1!la;w:inn II( I.'ft-.!i!, lin' imlik,. mu-: lake Iht-iti\'I' :;;ii"~ to <11';(,1' tradel'l';

I~nrn~\ltin!! ..

Y"n 1';n;IH', ;;11,:. po.cllin' :,Iq'" 1(1 eompe] IIII:n h. 1>01'1'0\\,':--;\. :\0. ';'JI',. r~';:~?~~wl~ FOld Tii)l\"t~T'¥'"l

(~" IJiG! iu nmy IWPiOl'!1 u

,." W1I;Wt<lm;lhi,' "ll~,H",Wb'" and t'~:lin~B":~~~~ h.~n ~~I

A Th~al j" Il'uW\

Wh~"n I dWI'\' i~ 11 hI hi' :1 pl~'1 wl.,. «an IpilN I II I S!).'I :\ nd I SOU. q!lt'lI! ly ;'.u hi J 11'1 f~1H

I:hu ! ~":H~"~ ;~~~,~ ~Hf-n;~"ly I o~.H\\-:;rd (·~P~Y~:,,'~ .. n~H~ H~" I h~'

;w.! t iii I, h! !Jon""

!wl'm:d .l'n!l"I'~~ h~' whid. h'\~TnW Hi! pay IIi<"

;'j'!llwmi!' Oil'! ,,"II\' !.'" ,'Iwd.",," :md a

uf Hl!Ili\'V in ! 1\;' !'~:'''IH ""Ii 'I' III mow"\"

"x!'hml),t(: iOl' ;'!lmllh.dii k" aud HT\'i!'h<. .

tr ~ ~ h~~ ThH,'

RU~4.~nq'-y ~n~.rk~~~ .\n, lIlw

V HUi!~h" ij~ ]nltn't~

I •

::'<-~'«~~n-i:g~;;«~~~u ":.tu·~~-~It"'\· _', _ft:Lo\:rr:'~~

!nfiU~~h~~" ill ~ ~H- LUIHh~U ~U~.HH~y ~narkl"~ i"~\--~

~~f l ht~ urHt:tl flnly i1niJit

Till' qll!'~!ilJn I Wlllih'" 10 iL4; yon w".; Ihb: \\'(; han' :11\\"11)'$ hpnrd dmilH! a ih·PI'.'""in!i t luu it Wa,; Iii., H'Mi', r pi I!mlwy nW! WI!" e:ilhtllj! ilil' dl·lll,.',~.i"n. In ITali!\" it ::< Ih'l, IHTlIl'diul! 1;\ lili~; II i" nil' n ,,1=01\;1:11 of IlhHW\' ill IIw hnnkhut :\·,,,h'WI :t!,t" of IIWIWY I'tn'l'l'd iWl11 day 1.11 duv ill I'xdwn:!f' inr I"·!l!lltlwlilh." :Illd

H'l"\'il'l·~. ' "

:\k L;\;\UEltYm: ThaI j" d~~hL Til;;!;" pmdw"im~ pm\i'1' ill IIII' hall.!;. of lin' P!'lIpl\~,

rh('jrt~ MjjQ( 't~tlt'Tp,

UN J!I\ IhaehJ1/!lII:

Q. Tlh' art iI·,,· ,'ollliu1I('s:

The d.,dim· in ImITU\\'i/ll! IlIf'HII:" n .kdith' ill lllWllh'" :llld ill ,j"W;lWI. and lilt' tit-dine in .lflll:W,f Oil!\" makes IIi(' Im,).·!'" ilIOn' n'lw'lant 10 !l(!lTIlW. Thr-r« is :1 d"adlni'k whit.,!' erm III"! hI' broken hy jllj('i·tim~ lIi!lli('Y uuo IIw i'y$I\'IH.

I want I., ('ollsidt'I' ihnt 1'01' 11 IIWIn(,lIt 01' two, \\'t. have nn ea-v !HOW'\' llnlin'

!It !ll.· pre:'('1iL rime? That j" f"OIT"('l, is it ll(lt~--A. Y,>s.· ,

Q. Tlit'l"i' i~ ;111 :lhwHimu-., of hank moucv, :I!'('onlinf,! 10 ,\'IIUl' l'\'id"WT ill!

PH;!" 272, whit-I! make-s 11\:\1 quito (,It'ar:,,···A, Yes.

Q, You a.fel'n·" 10 nn nerual nbundunre COl' the JW{'$('IlL and futurr-? ~h. L\;o.im:'IlYoc Tlml is, ill ilH' hanks?

.:\[1', Ih;\qL\l.\s: h dIP him.!" oi til(' banks.

\'j'I",

:\1 r,

By Jfr. Deal'll/mill:

Q. ('puld WI.' nnw ),t:till :mylhiHj! Irma pumping IlIOl'(' money into the bankiug "'Yi'!(·m'!···A. 11l t'xpn'''''lng :lily opiniuns so faJ' I liave limited them to ,!pinion .. Ih In 1he "iuwii"l1 In datf'. Xflt knowing conditions as they may be {l\'('r I h'e' \,,;111'51' oi ti", nr-xt !'ollpll' of :n'nr" I would not care to express n definite opinion " c ,,, w! .. ,dwl' :1 further iller('H!'e in bank deposits would or would not hi' .k",imhle. I 'Hd,·!· '· .. -rtnin circumstnneos I think it would be; UJHk'r other

(tin"illll:" mwt" if hi"!.' no useful cllcct,

(l r WHi' n.ff'n;llg' pnnif'lliarly tn the situntinn ns it, exists at tho present tinw." "A. ;\" it ('xi,.t~ !JIlW, I do not think that had deposits been somewhat higlw!' [hal! !Ill',\" nre nnw it would han' had any beneficial effeet 011 business.

{; On f voluun. of IHWl'm\'ing?-~·A. 01' on the volume of borrowing,

:1.",... lH a

il I ~;!W\lild liko no l'XlihHOi~imb o[ Unb:

N~],,' tiH\ ['!Uih':i! hnnk has tht, IH)lWI!'R' of «"I'I",a1hl.~~ mmwy. If iI. ehoeses

;ij~;W'I~ «If !m}" ~,;hl«t it lnHJlnJllli" !''In'N,,,·ptmih!HI~ !il~hiW 111111 lis

WiH:,!iol'I' mlh's m' ,hlpi1'"iq:;;. nro !IWlI(;,)". II 1~;Hl, for ~'X;',lHI}It\ hI.}'

",n."luH in fi!w !i!W!i mtH'i"'L liH'H·hy l'r(,tii.ill!~ d\"i~'I:<itf\ wliidn

h, hlmk" wi! h wid!'!' nl!·"plh'r~ of IlW*>UIHll'it;",,, hnvc

~ouh('1 ~uH~~r ij'-i~ti_-"'~A ~--~_-"~'r\G ""' ,""~.';n:~it-~~ ,iij~~jj! tfj~"Q"~~~~il~ ~pq}jn;;

I).",,, liw ~'''r'k lHl;Hnm "'."¥Irln." u \ \Yo' 'T !o '\Hh~

sn \i'-ft,~-,~t~_h, ~~nu~,U~~u \\'h:~~"tti ~~rr ~~ij'n ~'~"~u; ~-~';5~:!~nli" h~~' ;h.i !i"~U~r ~jI;iJ:;:~'~!I·it" "JHT-l

h\'u:~k nif _~~ r:~~ }~II-T ~ ~~;1'!n ---~ ~Tn~ ~'-L~~r~lf'~ '1-1'

11. Y~'!i ~':lh'd ! n",

:~~~\'- ~~\:~~h c ~'-frf~"~ ~;U ~ I!~X~ij~UllJ:"

!i-'f~rnH~~'T;~~~;l~ ~~~S~!~:oi~ no, It unh,dd l"iI'-·Q;;;1

Nil .111', '/"'11'1,.1':

,~ I ~UH!~~;~;'"'-h~i',d ypq Iii ;!'=~uy ,h:~~ 1f )-~~q ~Ht"rt-~h;-~-'\I~ ~t~- tiJ:tt~~l>i:~ r~ _~i~r\"i";- ."-uh"" ","-~,~'~~:J;~d:y h \\"~~nh! L~jVl~ h:av~~ tlji" ~ ff~~~;.~ ~?,~~ th~,' h{tnl\:~ of n-~~-~ir ~"nn$"'" a~f'~"f'it~1 ~(fal~~~ ,ipfiuin-'t\\ - ,-"\~ 'i.\~~ hlT~IH~r' 1 nj]rd~ ,hi.' n~., fl~"..;-rr~" ~~~J n~p p~~l't Ii>.: ~l.' "ald~::o' It~ in(-~=~(~:_i~(io 1 h(~il" ~"ouuBPa"~-~i~4t ~~J:li_U~ 1 ... :- H~ji\~\;" :i-';; ]H~{~Uit.f,~ a""'- It ;u~~~

f:il! 111'.

0, Thai 10:; wil:l! I W:WI ... ! \'I'li ,,, mlw:l :1'.:0, Ihal y .. ,; had IW \'i>hlr"j

nn'l i!1!" I·xp:\n.~i!,a n!" j'WlHiil"!'\:lal "ndii II\" Ihi" j·h:lr!i'l'p,! h:wi:,".' -A. I think t hf-r~' ~~ !i r!~~.,",nH~":'-·r·.t :HHhn~ t!HoT~·" f think ~ ! h!~l !in f~xpan~ipH (-~f t hp ['!D;H'h"l'«od h:inl,-~~ t~a~h dc.ht HO\\~ ""(Hl!d n".:o-Hi1 ~n an ~hrl'-~ta~p in n~f~ir {nh-,I oj' Innu~ alHI l:l\'cl'llmIlL< :illd !'pn~I'fI'W lv in dwh' , Bill I think Ih;n IIwir dt-,.jl'l' ("\'T-n :h-~\V !_o .",xpand i heir ~liH1Ut'~",~ia I h~!lH'" \'" ~qrjJ ,hal :t f~~\lHl(!t- he irH~rt~n~{"fL it f'=~aH~;~ hp H~:~dp nH~r(" lUh"~n~t".

(l. "rh~·'r.-;i'f~!"P~ :-'l'" I n~I{.j,ci vou r!'p,"at.·-dh~ J,,'fCil"i_'~ t here i.~ nd \\'i\ v in whieh \rEf" ~·a~~ '~:IU<oip !lU hH'n'a~iI" ~H f'~'fHHfH'r('i:t1 !n:~n.;.; in ("n!lHIH·n·~:ll h:lnki~ fn"'flav·"='~,-""" ;\D l~~~~ -';'Hn~1Y dH" f"';~:-' .. !~ 'hi~: "rh.,y f':~nn~H HH·rplR_.;,;ti, UI("ir ("H1UIH{~rf~~~!! fOHllH"

~il';~~'~'" ~ eUnn nnd hOITn\\'(~r:::.

nfli/r. I .• ind, 1"11111:

(!. \rhy \\"!P !V!~ ! h"lTn'\~ \i~~. -:\1,". 'l~Vt:: Jl'hp ;n!~\\·iT wa~~ h;n~~~ t'n ... :~ ~~ \\" .. "HJ~'! !~pt t"f" .. q!, h" ":~:L~~,' ~ !~~-. h;nd~<~ L:~"~'(' n

i i' "Oil ilH'l"(':w'd dw\'"llllllf' f ~~~-, 'f.~o!ntnt" f~f pnl,t!t" !H:1H~ 1 q .. ~(~~"ld~r! to dn fhnt tp-",day.

! ;~~!-"~! in :,!-.'"t 'i~nt from you h .. "{ore,

:u, ~, !Ty .. Xlr. Tucker li 1 misun.lcrstoo. YOII.

f"! i:!,"r\\~:""~'" ... ~ micht !!),·t ~-l uek. 1 n l"f'!ranl ~'{i~d dH"ir bontt~ to ti!f' B:n-~'k r,f

. ~,

::--::HHPd (

!p\'r r~d i '<,

A. J! did no! in~ v Il':;l h~' ~Hyill~~ 111;\1 the l hat_ l-'~ hy corporur ion houri

1;';$11(\0, hnt 1'1', \,~,

Hm at tit! Hoi \'pjmlH

!\J 1 :1\J i )11

;-;kll,l'1lH

l',,\qT~, n llllh'h iudivlrh

:'11

t2· meut 1;,

ilH'H':l~f th,' i'i',\i 10 lha! ('Ulll"tal ruuut I'll hi illI'l't· Jln~il ion fllh! ot!; It'lid In dppn· •• i wind til

·~i·n_""t.; t I'

c-on1 !Hn~ inc ~..;- d 4-1d r,:'l ;<'~TH-"nd! Hi 1,,:- aLY;

I ( i;

llwn ,.,iI tlir{f'r!'t~l

(1 '

-v

'\ I r,

I). 1 ti;_l!ld~ ;n' 1 h~<\' ~snuld h ~l':j:i" 1 , ht'~L~~ ;-\-,

~~:tH~~ t'H! ( i.hink ~~Jri {~rt·ii! lH~ ,a~$i:1

!way lm':q~ h\"t;4~ mid ilwn' Iwl~»I"«I !llI'lblll(' ill Nlm(' In II dl'eisimo It) hmTfi'Nj ("("I'U;hiIUh' ilw nmmmi iUWllh'u"li Ue; n::~ijh~ smul].

Q, Tim! h PI","~'i,dy 1116' P4liuu! Wijbi;th ~k ibnwhry HD;lkr" hl'i'\:;

nlwu,m~ly, hl.IWI'\'I'I' huh'ill"!' 1 lim 'II' hog ••

r"w~'r~ U":W 1I;'\'t'T Iw lwd Til:!! InilijM nnh' nt/'ln' if

,»I! ~"I'nli<'mh' :wi h:tid hi'T'H ~h'wnl.'I\'~';llW !\"II'lit

hm'hiWf)'i will h" iwliwl'" hi ("<lim" f,'I"Wal',L

BUI! ;11 d" .. pl'I'~t'litt 111111' IW.! UWIt'!"Pi,(,,.Uli \'owiiol"ul' ,III' f,WH :m' Ilwi Hw), d" not !'wm" fln!'wm'd 10 anv marked (")d.('/1L :H1;! Ill,,! i ... lilt) n'n~nn lor Ihl' low \"I.llulIIl" 1,1 bU"IIl('~,~' I'NI:!~'(

~il', L.\~limnol: ('!llilil W/' htil\'~' Ii,,· 1"1':1",111 hw Illl'i!' Id~Wiai!n' 11' hmTow'f

:\k IkAnnu~: 1 alii In .h':d with I ill :~ fl"w IIHUJh'HI~"

~k 'l'l'I'IOJC I wlmd"l' iI" "fr, '1'0\';1'1''; n~ro'l"~ wilh '\If {}t'lldmWIl'" i'Hit SI.:tlnm·lil, Tlwl'I' Wal" lin answer.

:.\11 .. T(nn:lls: V,,:,. I :i~I""I' witl: Ih:IL t n';~lJIIll" ii I'o"("r''; 10 prl\'lij" 1101'. 1" •• \\,1"1'':, PII hli I' Iml'!'!lWel'l" lu iiII' form 0;" U\)\'('i'lmWIII." ha\'p hN'!J bmTH\\'in\.t !Ill Il Will'll l:iI'Ut'!' ~1'Hk BIUI I Ihillk :\11, /);·;u'!nm:w Wile" rd'\'lTill!! In illl' jll'i\';I1(1 imlh'ldHal :'IIIt! \'(IIilJi:mh'" aml, 011 11m I, h:l"j", It", wil II it, '

)11 .. lkwlI~I.\;';: C'IlIlIllIP"l"ia! IJm'I'IIWU'" Irmu U'OIi ill WI'..a a I hanks,

By .Iii .. DnW/IIIUm:

Q, :\"W, i WIlli I In know if lhr-re is allY all('nmnn~ tn I ilL" elm a j.';O\'I'I'U-

IlU"n! hy puillie "i'('lIding I:!k,' up !lw ,,,III!'i( 01' I hi" l;tr,k (II IlO!:Towill~ mul 1 h!l~ im'n'n~(' h!l",ilH'~" mill al"o 1"lllllllli'!'"i"J hl!nowiil!~" fnun lilt' bunk-? Wlwt is !lit' n'~uh nf f'XllI'l'ielH'll ill l'(!~~:tl'd 10 IlHit·!·o~A_ 1 think tlie l'XIll'l'if'Ilt,p ill ,'egaI'd In that i:- Ihni gn\'!'I'mW"I!J"lwlhiing :llId ,l.:il\"'I'1III WIII d('fi.-iii' illl'l'I':(;I\' UtH!!')' dr~ ('IIllI"lmU't'!' '''Ih'iu Ii:" wm'llwmiml, Tha! II:!" IU'I'itt Ilk ('XIWri!'IH't' III \';lriolifl !'mmll'i~·,·, Thl'Y ilH'r:;:I~1' no 111:1111'" whl'llH't, I! j" II" :I l't'""l! of :1 d"fiuill- pial! 10 iIllT('1I"(, !!ov\'!'mll('l1l ,,!wHdill!! 1"'1' PUlllp pdon/Ill! IHlrpH,.,·,., "I' wlll,lIwl' il. i" 1\ pn,;Jt ion ill whit'l! ~W"('i'llml'II!" lind I h·III"I·ln·,,, plal-j'd hN':m,'\' of l'I'H"f iW~'lIll'ub; nil.! (JIll!:!, lli'l'('i:<ill"" oi 11m! kimI.Wh:ll,·vI'1' IIII' pnlh·y involved, nil' dl.tlc;!..; If'wi 101 ilH'!'('n,.(,. r think lJ.nj iI j~ fail' 10 ,,:IV IIml 111111(,1' 1';!JIdit nl il)!vni(' ;!('PI'I'""hlli I hal :ZO\'P\'lllIiPlli bntTowin!,'( and ,.'pl-IHlin;! dill"" help 10 I ('mi."!', j he wind In d,p ,·hol'll !;tlllil. ~pi'::kill!':' of lit,- IWoP!" :o~ ;; wll .. i" . .I .. "" hdp ill Ih:;t, ".'!b.· Ii· hridg!' d,p ;!nfl. Tlwr,' IJl:IY .dH'1l Iw :!l'gwlH-n!.; in 1n':nH)' of a pall inl !"nIHhu~n!ion of ihnt pnlir'Y"\~f"n \\-hil·f~: na~ !H~(~~-'~~,i~: .. ~ ~:-< lHH~o :U·Ui« ... if the ~p(pHd"",

i.; f;!t\\'~~rd~ tldu!!,~ \rJ~;(·h d«cnnitt'iv ,·~i=T!~''".~-II;tJ1 (hl· f<~'O!HnHY: hui I

~:n ~>f~ ~nnk ~,~:¥~- I,\~ aH\~ :'dl'~'t{"h Hf ih.,· i!~n~p!b}:dinH (':lH j?fH,,::~o.;~;HH~ 1h:if

id ;h;j~ ,,'hn~::!e;p~,~ dn{O~: rt:"n~f(\~~' t ("~nJ";p fd i ln- lronhlt· or tb;d ~i f':!l1

~h;~H a ~";~HP--!.!.:IP Hudror a ii' :""\'''it"Ld nf ~n1.·(·rpllH:nt

~ h:u» _:1";; ;, nnllv -~;] 1'-liniL~f'f' p.~h·"d~' '~pfHl'

n~1"n :-tu'("·1v i[ In t':nT\~ j;h~" 0p3j~~"~H;!'~\" in/H"t ~Hif' ~h:l~" ~~; .. !~

dHr[~n',d f~H'!n n~" ~o\~pn:'fH-t"nt.

Q. 11:" iI IWfn p,,,mnhi(: in [Ii(' United SL:':'~? vlr. TfC!;!:';: WillI! i~ lil:lt'?

I !;;:nti~1' ;'[(';1 lif 1'''~-:;:-r:;:1~'~I:,\:H;~~d~;I/{~:~H~!:? (of m:I'{l'i~IL~'tt~:'" i;f\/tt;;:l'iil~'ill:.~

\\' pw\; jill! I hey Cxp('!HIHnrt"-,, fif L!ia1 1j!"f-"'-n~H·1.J!V k(~p~. 1 L~- P] f1"Pl!1

III bnlr~l,:q;~.' . -: s .... .,,,

in fun

!n nw Ih:m

"" "I" l In ,\ hal

~l~.h\$ thtUl -:IY W:1U:1

i'r" l'", , '"

~H'II' Wi"Bwnl.

dr I \\ ani ! .. :.~k

\\:k .. i\Tllh,~! :W!I! !a'f q\W'~ 1n puhli« that lIlt,' dd ~·q-'pul

.;;L~n in (-~:t~jHd:, iH li~:I{ ne~p~~j"L ;n !,'III'" wi:!: 11.,· l'arIl1U"~ ill t!ll~ lH'o\':m'\' of Olllm'j'J I think

ynu ~ h:d h: Yf"l~,\~ -li?'-I hH'L

-'h, 1h:""IDL\X: TIll' 1li1l\'UIWlH 11>\\;11'11,.: til(" Ih·,dn' (III' 4n'al.,/, ('Cilll1H1)j' in h:wdHlljr (of puh!h' nlYall'" {rolll NH' ('lld nf Ill{' eounl.ry til lhi! other, whlel: fs

'" , I " ',. "'1 (" ' " 'j 1 ' I

,·nmlwHmg',lin!.IT IIlI' "H:<'U!u,.I;UH'P'. h H nnt, ,\ I'" uurman : WHIlI to l'eUf

fn~ ~-x~ r:H~; i rnIHI.~~rd B~u iour-

:\11', rkWH :,\L\:\: I .uu qUill in)! 11""11 I.ord BIIII"lir. I IIIll IHII quito i'UI'C t'( !l ... daH', h;n I I hink i. w;;~ l""{"l'e ! hI' wnr, ,IUd it I'e:l;/" ::IS follow:>:--_

;'\;; ! it\' b rhu- HI :lw .h'''ire of Ihi" H(llI~I' to :uneliul'tltc the

".wi:!! il<·~ilinH nnd \" ('HlT:: O!;! ~I'fa! 1"\'1'101'111,.. ,all till' 1'01'('(,11 of p"ll! :1'1,; Ii . lnm,·W':d,:t, :I,," pin riol h· fOI'I·4':i~~!ll<.ln' ill !he direc;n;d !hH uf d~lninl~hiHg t~~q)('ndiuil~(~_~

Xow, !h:d lIn;' while !'xpan~ioll W;I- i:,hl!C 1'1:11"1' ill !I". l·xp<'ndilllJ'o'': !ll Enginnd lip 10 I h" ,illW "f Ill'; W:U·. Tlu-n- i.; ow- ',!I' "III'!; 1I1In-1" I \\';illL i (/ ITad au.] I hi.~ is fnun f J~,yd (;~-'dtu~'-~ :u:d i.; :i..:: f;,H~-,\\~,,:

Til!' idl';l 1 h;;: pH!;!!,· "1H-!ioiiHg: may l!H·lf ('rc;lIe the illl·!.'lIU'" which ,: , .. III' "!HT;,.! >on :11',,-(,; fnwtilicmloll \\;'i now d(!(.'lUhl jJ!Ji;:sibhl ~ •• i.h~> ~~;Ut··_~: fHvn jHH"j,fl;

.. n ; ax l:i lik« :ill' ~Iln. I! dr:l\H up ihl' HI()j"UII'(~ from lhl' feu, and ""Hd~ it !lnd, Hi ! .,' ;'prm III r;dn to ,,"me other pan of tilt' world's ,~uri:H·l·. ~.

Tlw.:(· :[1 :':',. 11"0'11) :; l"tY1n\ of a hnok in The EI'(JII(i/l!f.~I. Tb(, jl .. i!lt i

'W:HH iq i'Urne !n :~ i:f~'" vfJud Y(-Jll·(·':-::(':~i~ Iht· pUnt"," of expansion, \\"hi(.h "'\~a:; n

poli r- y \', in a IllTJ,;'! of :ldn'ntll\'(', ~\'llt'n p;'oplc were g(lil;~ Ior-

ward. 1m,. II/Tn ;~ I·h\Tk in t luu., fruln what ever cnuso, and ,t should

fl.lllo\\' h'.l!i!';dly ; kIt WI.' will arri vc at a Iwrio;{ in which j he 'flOliti!'ian \\'110 ndYne:H(-~ ft"unn!t!y wil] (1IH'P mure he duo, popular 111:1n.

Thl'('IL\lIL\I,.\,,: Onei' more II(' (,jpcled. .\[r.l>1:,\OIDI:\);; Ye::

1~11'. GI',ilwltl V'Jn! T('w!:'r~J

q

ill t\'1ll of 1;X1-i

'f

\~ l't"!U\'l 1 ax\.,.' , mont I lll'olmJ illlpnn aud re {'lIl't'iui

( ~. of IIii'

(~. of Ill!' Cf'rt uir: not Inn IIf npp dolt-i'lii it \VOH spend (

Q.

"-~-'"I go whivh i thom it lhil'rI Ii

:\ I.; money x 1.1 inv off] Til(> th

:\11 .\lJ

arc IH':;

Q.

I think 1 Jl'il'(, k thnt i_

\\'11 jeil moneta

(l·

am awn ill 1 he 1 moneta I evidene the no;,

q.

Jfr. Tn1

~ lH:!H':

qnt'",,, ",hlil' !, I

:hink

liHH)" tit is I't'nd

Hu:~ l5 of

;tlll! if is

rich ibllJ

[1 I

By Mr. Deuclmmn:

Q, 0(1 you ,"HVP"'~'!" lh:u iJ'\ withiu!h(' hnUlIlI" of pnhihilhy, 1\11.1 oot I'\:('li hI ITmU!I' Iltnlj{'$, .\k ·1\jw(·t'~·:,,'·"·,A, I think tlw l'0I111HIIII'\' Ii;,,, 11 iwui'l' t\PPIli'Il'lIlly

lir t.'xpn'~.;;ill~ nn npiHion on ! hut 111:\11 hnv«.

Tin' C'!UmM,.\\:: Or l'xppl"h'IH'ill),! f lw n','1IIL

l.;y .lIr. /)illdlllllOl:

1.1, ;\llOi!w;' Imilll I wallh-a! 10 ask b III:,,: would hllll~i't ddielt" Hpplil'd 10 lax 1\"\!lll'ui!m pmn' dll--kll! '! By IhaL I Ilh'all w\' wiluid n'IIW W\:('". i,'IllHUIllPI'$' tnxes, l!11i1 a!'\'\'Pl HII IIllhahuu,,'"1 hlHh~('1 n~ ll!:l,ttin"l IIw idea 01 \'!'\'ll! iu~ l'mploy~ nWlIt by "Iwndill~ 11111111')' and allowil1,'4 il III iw "PI'1I1 on puhli .. \\'''I·J;~ whid: \\'!'I'P 1H'!lh:thly IIllI wi! hill tilt" I'ollfhws (If yum' deflui IiOIl, I hilt 1", I hey wllllld 1'01 imlll',w{' nil' nntiunn] I'l'flllomy, ,\ lij!.h I it IInl he Iwill'!' 10 :WI'\,pt lmlh!\~1 ddidl lUld remit la:-;I'~'!'" ,\, I ,,1"HI!d lik« ill rhink 11m! qlh'~lioll ""iT and mak .. iI 11101';' (':m'ful 11Il:'W{'1' than I vnn I'il~hi h,'I'I' :11111 nnw.

Q, 11 i" trtu-, :\11', '1'11\\'1'1:" i" il IIOI!. Ilia! 1I .kpl'i,,:,11l1! j" "imply :l "ol\,.;tl'idioll nf dll' eonsunu-rs' illl·lml('·:'··~A, rt':',

{}. Tlwfl, would it lint hI' w(wl h whil« to consider lilt' ilit'll of I'XllHll;;ioll of 1111' l'nll,;lIInl'l'~' Im'PlI1I' n" :I 1'i'lIl1'd~' fOI" dl'p"('''",ion? A. r(,~, I think t hilt ill certain ,',,'\'lIIw<luII('('$ I hnt poliey :YOII :;1I:tgt'::t 11ft,.; merit. I "tippo:;!' that- .. -I Hili 1101 maldnc thi!' I\S II Iiunl answer hilt ruther us thinking aloud about t ho method III' :111111'011('" to IIII' 1111:'\\'(,'" whi(,1t I "lwilid like \0 nlilk(',~-ynll would have to delormine ill(' ('xl!'nt tu which 111011('), 1\'1'1 in the hand:: of !lw people, with whom it wunld hI' !(·rt Ihl'O\l1-(1I IIII' J·(·rJw·linll ill IIIXI:::, wus mom'), which ( h('~' would spend eillll'" 1'111' ('OIl$Ullifll inti \!'Illid" Ill' 1'01' "Hpil:.1 dl"\'('lopnwnl [1111'1111$(,,,,.

Q. The O\'c'!'IIIl!tuwing Iaetor which r think would also have In 1)(' dt>U'I'I11l!wd ··~I go h:H'k to YlIlII' rcrerenco til construction of public works, of publi« ufiliti('l'; whieh improve !Ill' nntionnl ineomc=-I think it would be rnthcr dillleult 10 lo('af(~ IIII'm :I~ far :\:< nur C'('(jnmll~' is eoueerned, but Umt. is only n passing; Ilwllgh!. Th« third ullcrnativo would h('~

:\11'. ~Idh:Im: ''1'1111 moun dillil'uH til Iota!!· things Oil which We could spend mOJl('Y In improve conditions ?

, :\1", J)K\CW\l,\:\: I won't pnt('" into un argument now, but that \\'0111d he my oO'hand opinion Oil that, We mav be able to discuss it at some nilwl' time'. 'flw l1th'l! nlt<'l'llative is this

:\ Ir. Tn.'I\EH: Whut nbnut Ihc' tourist trade?

,\11", DE.\CH~L\:-;: I c-uld deal with that too, but time is going 011 and we :11'1' m-arin« the end of the session.

JJ!I MI'. Dwchll/ull:

Q, :\111.% we pay more attention to the nOll-monetary factors? Yon have, I think alrundv "Xlll'!',,:'er! tl1l' idea that 1Il00lei:u'Y action Ior the rcstorntion of lwit'£' len-I,; hus gOlll' about II" raj' as it. ('(Iuld go. Would you say, therefore, rhnt i~llightlll' wi-« poli!·)" (0 (:oll"idt'1' more carefully the non-monetary f:wtol'S which H':'rriel the H\ 0\'1' II 1<'11 i of good,. and sel'\'ic(,i'?~-A. I think th« nonmonetary Iaetors aI'\' by fa!' the most i1l1jlol'lnnt.

(1· At the preBClIl tlllle'?-A. Yes. And I make that statement, so Iar as I am :I'.\':1I'i', in TIn sense as an alihi. 1 believe that it is the case. and I think that ill the Pni!rd State" also where Ior a time they laid such tremendous stress on lllonetHl'~' f(l('(OI';', that they too nrc coming to'realir.c more and more, and the evidences of it nrc strewn on the p:tges of the American record these days, that the nou-nmnetury raelol':' in thr-ir pI'"hleln al'(' tlu- one" of major import.ance.

q, Now I want to speak for a moment about the balance of payment, )[1', '1'0\\,('1''', YIII1 will 1'('1'1111 that in the statornont of Sir Arthur Salter, l'cferl'il1~

H'i ~} ~~!:~D ~"·il';;H '\·~_~r .. ~·~ )\~_~W-"

:h!I:. when

>'i' ~ ~:~~~'nL'~ Pr,~'I- ~l--\ t

IX' "''1'".1 "l'i,'" 1"".,1' 1\1·:1·,· •.• 1"1;.",1 ",',,;,

-, , ~H~ I -.- ~-~, i,.· I"", ~ ~ .~ ,i" ~1".U~

:h,·;, r"~111!", nn :l,ln'r~c h:tlam'(' "f paynlt'n:~,

!ii.· inkrllHI pi'll'>'

~\i" nt PL~'iq- • 'W~' ItlHY

t'-xPHud~ ~ Cn~t,~·t i~

- "I ilw

impn!'h m',< :\1l1':li·I,·,l, nnd

>. wj, n :;... 1"'''1'10· ,oJ \Y , llwn. I" a klHklH',Y

h~\\-:~rd~ ~~d\"'r"'f- b;da!ii'l' of p2~yUH·-H~:...; fl"L:d i~ Ud" '{-nd of II a;; qthltHlil.ln~ $.0

;;,:- '" ~Ir l luwt n-v I" ""lW'TIl\-,!.

:\"w. I \\;illl 'h' pn:n~ !iU: iLl- (ni;;:.r , ;ill'! ". ;,,;1; ~'nll your

"POll n \\,l;;'ll 11.;11 !lapi'!'n", I j" ~l";W!l :! ;"lId"liC'Y in monctnry.

~ :'J~d pnnt~t'ai .'f!'nrt~,;: fn ."OITt ... 1 tL~- hahnuO('. :~nd Ihi'~·~'fort' :(~tain to ("tun..,

prt,~-, l~~~H";~BH,-;r_o;;ilfh·(Hn .. nhd hring :t t.,tHh·ncy 1(\\V:!fd~ a furlhp_~ li_~.djh·l\ing of lw.!;,\, Jllld ftH-!!",!, re~ll'i.,tipn of J1llrdln'ili~ IH!\\!'r. b Ihal \'PlT('I'I'?

,\ I r. To \\T HI" : 11 (' i" a~"lmliH;': H 1':1 ~I'. I :'UPP">'I'. wb-!';- a ('OUIlI l"y has been pr"sr.·~"ill>!:'" I':\~I Ihat iI Itm' !!'" "UI nf lilH' will. orlu-rs : thnt whal lin" taken pi;" .. , i" !in! a g"Ill'nd Ik\'l-JnplIlI'llt lit l'!'odll4'lion :twl c'oll:'lIlnlJlinll around the wndd. !lut I'll{' l\'!WI'(, in an individual vouut ry , 1'01' ('Pl'lain "peeillJ reasons, t1wy art~ n\-i!i;.! h"yond lin'if" illl-oBIt'. ~o 10 ~pt:ak.

U:i .1/1'. IJiachmilli:

t I I f ~:uwl':il dt'\'l'!0PI'H'1l1 had tal'I'!! pia'., a!'p(qlHl IiI(- world it would not. ~ .. In:~\tTi::li~' :111'1'1'\ 1111' hal:llWt· ni paynl!'Il'i<" -A. ::\n_

t,. r:d!'!Till~ 1II1l!'[' p.;l'tit'lIlarly 10 thaI. rdl.! it W:\" 10 thew' condit ions which :-:ir A!-tl,ur :-;:dh'r din'('h'd tIll' HI'gllllH'lll :11"11, ill pan irular C'Olllltrit'>' of EUI'OJw wiH'rt, ti.t-i r l'I'OIlOIllV had I'e;(ehl'd \'ondi! ions of ,,: ruin. t hcv had diflieultv in ni:d"'lll~_ their pa~yl~'nt:' alld ill ('OIl:"P!jlH'Il!'(' they 1'(':,ol'll'd' to t'mbargol''''' and !'!,·trll'tlon~.- :\. \\-".

tl- Alid tlta 1 IlII'! I,(,!' incrensr-d tll(' depression, dC'cl'f'fli'cd production and consumption, uud tlH'rd(Jl'(' fended towards inteHi'ifying the dcprcssion.c-A, Yes,

(~. \Y!'II. I think I urn coming to thl' p(Jml where I want. to IHI\,(' your opinif>!l in l'l'Eard to a !'I'llll'd.'" for th:.t. We shall l'te whr-n we (,OIlW in it. "'0 Ju,d frdlu you a ~of;·\\· day ... :igO (hI. ~~;l%I'nH-nt r luu th!> pu~it-ion of fhe Canadian dn!br \\:t- tl.i:-: flil' (';iIladiall dnllar ,,-;'" at its Il:lturn! Ip\'t·] due to it,.; t.rndo p(l~:nnn. That W:", I think .. \'(1111' all~\\'(·r·.'-··-.\. Th.u it,; 1('\,,' WH." dictated by ""ppl,\' Mid dl'llland «u I hI' 11I1l1'kl'1.

lr That would bl' it:' IUd·ll'allcH'l'?--.-:\. Yes,

tr:;\)\\, 1Il~' que,,! ion, :lnd [ :1Ju not :It n 1\ i'1I1'(- of myself in this, anti so I wnnt blp. r" nnt rln- lo!!ical nnd ('OI'I'('('II('\,el of thr- mOllctary uni\.---the dollar or til,· fnllw or ,!)(, pound OJ' all~·thing e(,.:('----tlw \('\'(·1 which it reaches from its IWIUl':d tradilW posit.ion? Tire "Hille line of conduet , in other words, which you han- (·al"d!'.! out lwn- lrv ullowimr tll( dollar to reach iti' normnl level due to it .s tTadins p,,~i;inll. \l'1l'll(!' hI' till' ,"rojlC'1' ('om~!' for l'\·(·rybofl)·'?---A. I think that \\'('l:ld h~· ihe ";:.~C' nine times out of ten. I would not sny thnt it must always m'('I'~,nnfY Ii!' tlw e;l~('.

Q. ":t'II, t ln-n, would this hI' right, Mr. Towers: that if we were to measure your (·ap;t!·itv ns C.W{,I'IWI' "I' i Iw Bank ,':' (':ill:ldn,,·- - A. Oh, pl('n;:{' do not. [~J r, Graham Ford Towcrs.]

t!rh'l uf f'J~

ill 11 Ii I! ilHI j.: \'1 TV SO iii

~!tjVt·J' {'fluId hiuhl: d.;liai which

I'('tgUf4

Ill;d I oth(iJ' not 1;: l'l'a~nl

C

-v

ill en A. Yf q

t!lIwrg

q

wrong it inv, that i. of t h« the pt· nus d::

wns rt done i

q would that r: dour- ; ('iale i 10"j f'i not h;;

o

own c :-OUt'll l otli"r !

,V~_lltr !:try, !'nm~ 1l:: !If

IIt'Nt :Ikcii till:

Ihey

hidl !'QIW r -In am!

nud Yes, 'our We lian ';HIe

by

o I liar

ilS ron its hat tyi>

'Ire

tl Itt ",h~l.ilj.i nWtQ~mtd!lv "(.w' ~Bij~im·v hI

Ikf!'i~~~' n~mtym1 \\\\"'r;'~' PliH! yon;!' hmll! 1!!1i ni;, ..

!J~ ;:w~~n"Y", w~~w .\

~~- ~ i~~~, ~ n;f':; \t~~~_'-'l~ q$~~r Wn.II'!; 'Hl~hl III hi' 1"I'1"I"I'h',L' ~h T!OU,nl: Yn\u

H 11m\' Hoi,,' ,cuH'ly"

,\Ii' TOWUi}<: I w"" Ihiul;d"'~ '"

~tnd B~~~r ~ t 'igU~'- !h'ttIB~nH'HU

if il \\:1" lor IIi!' 111'1\"1\ w"HhL H' yilU "'~'Y. he IwipiniL

I. ... i";\\' h'·

UN "JI', /).Iwhmoll:

~J, '1':11\ .. , !!lI' in,;lmw.\ lid. "x:ullpk,: WI' lOll.! 11 bi'~" IlH'i\"mT of pl'lJ"jlerit," in tlu- ~i nlo'" III W:.ri I do IWI";:OW wb\! I i(ldo!"" w"r,' Liml \':11I",'d Uwi. liltHl!{h I Iw:ml I )t" ~11I';;:':"w \'''pn',.:; hii' opiniun ill rl'g:mi (n Ilwl. ;uhl WI' l!li~;hl \'Ny rnllli!:' lm\'p siuiilar nmdi!ioll,. Ih,\,plop 11i'1'i'. uml if II !'lIul;l h(' !lIlwn~ •. 'd ,." lim! !Iii' Bank "f ":lIwd;u :n 1""""!lI'!:dlnll Willi II.,· l'"lh'Y of Ilw l Iomiuiou gll\,!'I'IIl\WlIl awl !ill' PI'\)\"IIU'('". lind ill('id~'lHally with thl'lwupl!,. :I" a whnh., 1'IIIIId Ilwk., (hill!!" Inon' :d\ln~ a j!ood deal lIW!'1." I'wifiir, Ihell I think IIw! is highly (il'l'il'nhlt'in ~o lar :I" 1i1!1I is !'OIHTI'!H'!l; hHI I \'\11;11' 10 lid" p •• iut : if (I\I!' dllli:u' falk naturully it iall" to I'orl'('('l :l l'oHdililm whieh oughl 10 I,., l'''rn'l'kd, whil'll j" a b'('''lum'I' 10 mh','l':'t· balanre oj "'ad(· 01' 10 <"PIIW otlll'!' ('llIHIHillll in rt>g:1I'I1 to mil' 1lIn1H'!:iI'y >'-">'hlll'; A. Thai \\,;;\lld Iw t rur- \''''''<'1)( III 50 f!ll' as ... and J won'! :ll'pl,\' t hi. 111':', ~';jl'ily !<. (';Ill.11 I .. , Wi.' have "('I'll thnt It:I,I'jlt'1l in nUw!' !'omHi'ib !iil'r,' Illh:hl llt' ,,In'UIlHa!l'''''' \\hl'l'" ! Ill' ('III'l't'IH'V idi in \'allw IInl by fl'"""n pf an~' :11'1\1::: \"""Ihllnil' dn'd"pllKlll within I (';,lIntf,'" lml IJY n-a-nn n:' Hi:rht IIhWl'!lWII! nf ,,:tpilnl. Tltlll \'I'lIIh' illli' I'i':llly :1 ditfi.'!TlJl "ak!~OfY,

ll· You would hnn' ttl il1l11gine rat.her Iw('ullar {'owlilion,.: r.lI· t !.:tl !lJ(,xj'H ill Cnnuda, though it lIIi)!,hl in :inn\(' violent "h:Ill)!\' ill our polili(':d ." wh';), ':'" .\. Y 1'''; \'011 would II:! \'t. 10 imnuino I'll Ih(T 1I1l11"'W:l c'IlIHIi1ion",

(l, III lilal {,.1st, WI' an' d(,:l'ling with un ('nl('I'~I·IH'.\' situnt iou and t!wrdOl'" l'llwrgt'!H'Y 111(':1:'111'(',. ill opera t ion III ight 1)(' 1I,'c·t·i'~ary ?····A, Y l':',

Q. 1 am making t hi" :,ugge"t ion, alld I alii not :'111'(' "'1.)('tll('I' I am l'igln or wrong, Whell it i;! 1'01'('(·11 io fall throughdirect polit icul 01' cent ral hall], acrion. it involve, dnngcns. ('I'I)IlOHIIt', Iinnneinl alld pulit ir-n], which ought to lw :\\'lIith'd; that i>" (here j" 111(' dang!'1' in the movement, in the cliJ'('('( action (If the lowering of the value of our trudiug unit fol' the purpose or some specific Plll'lJOH' whit'll the people may havr- in \'iew'?-.\, There is no question Ihat the!'!' Hre i!T'IIWIH1- OWl dangel'S. involved, I tlo not recall any (,:liiC', unless 011(' can "ay lha! there WHi' tI ('H:'l' ill tb(, Vnlterl 81at('i', I do llOI rocnl] nnv {'a"l'~ \\'11('1'(' thai hus hcen

done iii just the form wliiel: you montion. .

Q. WI' rlr-nlt the nllu'l' day with the hypolltcii(':il (':1>(' of wluu O'Honry would ICI'IIl :I hypodermicul (':I"e. \VI' dealt tll(· ntlw!' day with t he "\I~l-te''ljon that our dollar i'houlcl h:1Y(' been nllh'd with the pound. Suppose Ihftt were dun«: suppose we let our (((111m', Ol' (!trollgh mOJH~tal'~' (H'!iOIl ('HUSl'd it 10 .!t.p)'('cinte ill value until it \\':1:: of till' snme \'ahl(' :li' tho pound, WI' would t.lu-n have 10"(' :,hrin, of the main <:;1\1;<<, for which \H' creniod tbe ('('l\ll'al bank. 'V(' would not h;;;'(' t he cnn t 1'01 ot" om OWl} eurrencv '?,,~~·A. If we Jinkerl-

t;J, Ii we linked it with the pound we would ('I',Ii'(' 10 haw control 01 our 0\\'1\ {'IIlT('!l('\,'!-A, Y(';" Wp would, I think tilt' cirelillbUmc'l'" of Canada are :"ih'h Ihal we eanuot conecrve of (1\11' !Infinite!,\' linking our ('\I]'\'('II1'y with any other one C'lll'l'CI1('Y,

I::n~" ~N'~ W'IIUI!(lhU~PII~ wllni«"iu l)n'«;'GI~ha l1ib,m~ t!m t'kn iihU,4m)!'nt,

m'«' ~"!r.nu«"'~'ll"hw,t .~ Ihinnk un WillUIiM Iw ~::d(', hI :tiWI7 HUll! it W;i3 ~)U~n nu\\~'til iij,!~i~m\ ~~nlil WI' «"ltiHm~, :~b!l\:lld!.ln

pm~,,~,«" iNn 1»1' I"i'filh"iill i);;Ulk

\lit .. Tr"!iUm W~, h~w," fii!)iU h~","u IHI('il\i~ ::m.rallini':; ;~i«mg tt!wt iiln{' :UWq!l"lling

lit, TtlWf'I .... , !«! l'lmh"~,i tr lit, \';;1 ~Ii'!" "Ii "Gal' d,n!!m'"

I !hhlk 1 m"" t.s !Tnlnd hani, Wltl;

«.'1 .hAbu' L, u l,mj:(-u'l"lIn nll"ah' IIm.u!!'h

1",'!I~dl' ,.f t,h'hll'''li.'' mOlwlan' p.,iil"~':, nlml. ;wainl! Willi'll IllvuJln'd ;'pN'IIi1;

wi~ il nnv IJ«lwr 1"lIn;'IDl'\' i:;;; ~ilmwtt ijyuh~ which l!lihl 1I1'I't"",":Il'ily 1m Il

~llhi!~ ~ «~~.; «~~ _~;ll!\~~'t'dH~~~~JUt. p~~h~IO\~~ ~ ~

vim hi -uv ! iml \,«,Ui hmi ,ak~"11 1m i"i!I\",~"iim" :11"1 illn hv the ill :lli\' wnv tU"1 :ul)'"",u" I Iw ioU'l'i!.w IXi'!mllm' qahW oi' Olll" dllllHI','

,,\ ':O~ dm! 'd,au "Ih .. ,"" 1Ii.1 :upply hl ,j;'liIi"?'IiI' 1I1\'!wlm")' pnlil.y"

1,,0, I ml.i~'fd.'nd ynll in ~:Iy I IInl you Jmd lIill dOll\' nlly: hiu~ ~iIWt" ,\'(\\1 have lr·;nnWf of liw Imnk :II nll. You !I:\\'" Ill' VIlU 11:1\"(' nut, ?\h, n'~;li'hmnll is 'Q?'~ilwill'" Iilal your IHlIiI'ylw.?' hn'!lliml !If 1"11111'111 of tlw ('Xl l'l'Iln I value or the " I ;'111 POlhl illt! 11m UiWI I mhhT~!o,," Irrun you lim! YIIU had dUlW liillhing l.~ ;dIn': IIII' i');h"I"II,,1 \':1 hl\',·~·,\. 'Vhal t moam Wa:' I his: Ii ii' donw", it." JlIIlIW\:U'Y

,'VI"I' a "1'1"1",1 of YI':II''' will Inuluubwdly hnn' :111 ('iTt"I'I. WI Ill!' value (If ('!1ITlll«'Y !l;:\li~,J,ln!.(~I('nu ('11\,('1. 0\11' poli,'~' 11:1" hHm ntH' Of('Xl1lul!'lIm 'Now, n!i .·;iwr !hillJ!l' IWIli~ (''Iunl. thut would il'11I1 to lower IIIl' value (If 1111' !"U!T('ll<'Y .'\' •. '1" a !'!'rind .. i )'<':U'';.

tl· Thai Wa" 1I1i! "II' II1II'JII.lI'(, of H:e,,",A, :Nut m'I·l'#nl'lI~·. 110. H, III till' same W:W :1" om- 1'i!llIlll'~' i". 1 1111':> '11m', :1 J!llli('Y or lh:d ki .. ,!. 01111'1' ('Ollllll'lel' are doing !Iii' 1':1111(' I hilll! Ii! an l'qwil ('Xllmt. "11'11 IIw relative 1t'\'I'I~ of till' various CUl'!<'!li'h'~ IIm~' )lilt change,

n!l .ll r .. Dcnclnnan;

<1, Thai 1$ lite ",ituaillm In·no':. A. \Vbl vou hnd ill mind Willi sp('(·j fie Mll\'ily ill IIH' I':Wllllllj!l' nmrkot In dml1~{' rI,,· j'x!"lmng;(' \'111111"1

II!I .tlr. Turlccr:

Q. on. Ill!, I lnu] in mind 1111' l'IIIJlillll(lUf' j""'lw of 1/101'(' and more cash 11',.,,1'\'\'" iii IiII' hunks "'lilt'll would I"Hll,,(' till' corning inf!, f'xi::t('lwe oj ilion' lind tuorr IIlmwy III III!' count r.v. which would I'm I!'!' II l'i~1' in ~!'lIel'nl \ r-v«] of PI'jCt'S, w!iil"1!. "I' ('oUr"f" wouhl Itnn' n !{'Ilrlell!'\' 10 It 1\\'('" tlw vuluc or om rlullnr as e!>'!ll;:tl:"d \:'ill\ t lu- !'1I1'I:I'III',\" 01 other (·ou;lll'h'".-· A. I ,,('Po lind that. it' till' p()li(~y whwl! Ha" !;('\'Il Pllr~lIh L

Q, Tim! i" '1111' (,II,pet of till' poliey, and if :lllylhiw! could be rlnn« along Ilwt 1111(',0- ,~,>A. Thai is till' poli('y which, in fad, has iF'Nl pursued: but at ! hI' ·~nl1W lillI!' ;;j'n"l':ll nt her "mmtri\'s hnve lnx-n pursuing poii('j{,s of a similar kind so thai if you all mnreh lit the same ~p('!'d you do. not W·[ YPIY far from pudl .. nw!",

Q. 'Yon should march ;t lillie i:l"l('r.-~~:\. YOIl mean brenk into a run?

Ny u-. Dcachmon.:

fl· AI ll'u"l the result has been this, the dollar has remained practically on 1("\'1'1 wirh Ihe (·tllT(·tH'), (If the United Slah's, and it was practically tho same in it£' relation ns it hns been Ior some 61110?--:\. Yes.

Q. )Ir. Clmirman. I han' lint finishod with mv examination, It, is 12 ,,'e!n,'lc

Till' Cl!.\lU:\tAx: ,ViII YOII 1('! XTr. Drnchmnn finish, XIr, Jaques? )lr. Grllhflm l~Ol'd Towers.]

M IlHi~.li .! (Hiler 1 hdid"l' hurUl \

I

Tl, :'1 i 1\11 :\1 j

i\lJ

lH\\,!' III 'I'll Hwl :\[ I

Q, AIr. ell point 01

Q,

ufter u» (If Caw, ·,A, Y\

<l, borrow) Ill'oduet I inn

q.

tim{' 1)U/ the volu Should to raise VOlt unh':Hne a ill \'OUI' ib whut

Q.

"Iall/ilm w« [':!Jl ... :tme Ii] Sllltinu- 1 hut. 1<\\

fOl'lll 0 f C:lllndt! fore ill I mudl Ja fa \'(JlI1'H I

fl'

(Lapaeity

lhe jH><'Ji I wadf thai Pi> iI, OJ.H'J'i i'om('u;'? f1':11lH' :ll

tim H~M{~f

ill h, , tim

bing tiny (~ ni inw, :fiC,Y

nnw (ling: cur-

fllih und

lifT

on in

12

M,l', Jh\J\(HUU,\)S;: I nluhnh ! hlHI biiH!L~r In(lt I 8Iqll(il'll pnmuhw illnl I W{.lliid fiUPl!U;!;:ill RH t2 I~\~'it!tk" I ::Hnmdd lila' !o ~(~Il\'\' i!w nmHI'I' n,l»\\ .mlltnl,('H, HII1+MI)Q I\d,~'i' !im~', It:ii I !~l{)mi;ii'll~k .'mpU"*l lialnl 1 wllu~i[i , liunmg:h III 1.2 n'{'hwk. 1 b(,hK:'~!(" 1 Ajl~n!M ~wp mlw on ((!nal~U' In gh:<e him qhil" hour Umt 1 PI'iHlII.H"J, Nt! iUIHm wm hI" d[))!w~I' Inn,' Ik,; I 11m ,'Vhu"u'gIW", ill Ili','uldull';: into WhH~ i Im,,(' tu

h • t';m im\"(' il!;nni:t:"ium hi IU~U Whl'IU lw is Utn'<JII),(h it, wiil quit\;'

10 I~W,

"fiw j'lL\m~IAN; 1# thnt ~lijn;,flH'llity 10 lin' ('I'IDIIUifi(lw?

.\10'. HOW,\lm: I I.'mlgnntuluie Y€oU «»IB quit wlwll you $11111 you wouh],

.\Ii'" ,L\\~m~: 1 would I':HIH'r :\11-. Lhm<"iuilillll tonk nil Uw time lit. \\'l\lllii, .\k DJ;M"H:\!A;\;: All dght .

.\1)'. ,J,\{ll~I~": I ;UII willillg III ~it la'n' until this iiuH' m'~l yenr S~j hm!~ ItS I havo an ilPI'III'llIlllty to pul illY len;>\' to 1Ill' ('1)lIIl11il H't'.

The CIiMH~L\X: Theil, 1$ it Ih(, Im""I''''limdili~ Ilml .\11', !kat'lllllun Ilni;<ht,:> mill 1\11" .Jnqrws fullows?

NU Jlr, Dcochnum:

q. I Jilin' one Iliiter qm,;~lion ill fpg:ml to ImlUlH'(~ of trado" TIJ S:lVI' time, )h', Chairman, I am going III tHal{' it dogmnlillullYI then h:L .\11'. Tuwel's give his polm or view.

Q. (I, \fl' iul\'(' III pl'(1~tml n Iavnurnblu baluneo (If JlnYlH1'1l1 'I'hnt is,

illtm' Inn'ling 1111 nm' obligntions ulH"lmd there is n 1'11111 nvailablo 1'01' rcpnit'iHtioll of CUllndi:11l ohligaliulI:$ held abroad, 01' Ior invcsunnnt IIhnmd. Is t hat. eorrcct '? -,··A, Yes.

Q, \2' 0111' !':lpm'ily 10 ('01l$111111' is our cUPflcity to produce (leaving out borrowing, of "OUl":<{') II/" :<t.al,ing it :tllolhel' wny, which is more 1H'IHIl'utc--Olll' 1~fl)(!Uttion pill:> hllpOI'I,; It$,~ ('XPOI'til equals (he 11Il1Ounf nvailablo for eonsumpIlIm!-·:\. ie8,

Q. (:!) Con:<umpliol1 ill Canada is nt a relatively low level, Is it wise at a ihlll' ,,11th IH Ihi;; Iht'llIlgh tilltuwilll OJ' llHlI1l'tl1l'Y control hI l"('iill'iCllo this extent, IIw \'"llIllle of plIl'dw:<ing power 01 cit 11('1' ('01l8111llCl' gomh; 0\' eupi t III ('0 III modit ics '? Should we PHY olY f('WCI' 11('/)1" dUl'ing I! period of depr'C'si'ion 01' should We LI'Y to mise th!' :-;illntial'd of living of OUl' own pcopl("?~-:\, ] think I see the point you :m,' til'h'ing at, MI", Deaclnnan, lind I think I should like (0 have time to Iramo 1111 :111:<\\'(;1", To help me 10 do 80, may I inquire if tho ulldcl'1ying thought in y01l1' mind is this, that Ih(' repntrintion of foreign debt which is taking place is what YOU lIIi~dll tall nn evidclI(,() of H low level of activitv in this country?

Q, f Hill pldting' rather in I.h:~. way: this is a t,inlc of 1'{'latively' low H:IIIII:II'.i.~, ;lwl it 1'('1'1115 (0 me a J':nlwr i;lnlllgc and anomnlous po;,iliou in which WI' ("HII have nUlIH'\' avnilnlrl« to buy buck 01\1' obligations nbroad while at the ,'arne t imr- \", ha\"~' not Ill!' lIlnlll'Y io put our O\\'u',wopll' to work. I Hill not "tating : hat H~ a crit icism of thp banking system ; it might he Ilscal 01' HH)I1CiHI'Y, hUI [Inm! to f'xpl,)l'c rhut lind see if we cannot bring these surpluses in the funu of ('OH.HIfIWhlp gO(1(I:<,-~:\, [1\ fad, !lIP low level of capital development in {':IIl:u/:ti,: II f~H·tor ill tile 50-eullet! Iavournbln balancc of payments, and therefnl'l" in I!w rcpatriation 01 debt. 1f capital development was laking place on a much 1:ll'gtl, "eale nnturully onewouh] find imports a good deal larger and the l:lnmrnb!(. bnlnnc« less,

t! Ye", quite, but it IlW:\IlS '-his ns I sec it, that people with the financial ('np:wity arr- Ihe I)('ople :1 t the present time who buy in their obligations, whereas till' I)(:l'pl(' of the Dominion ,,f Canada arc OIl a very low standard of living, and I wnnT to know if OUr Iavourablr, balance of trade is a calculated policy .for ! lwt i~jjpl)~e'! I want to know if our monetary attitude has anylhing to do with it, ojH'rnrioll of 0111' cenlral bank, Or whether the cause of this lies in other Sntll'l'l'i;'? That I:; Ihe quest inn I should like to a~k.-A, I should like to try to fr:llll(' :1Il :l/li;lI'el' to that question,

frlNlfi, IkH~~I~

il'f l!ilrli~Y 01 pdc\'?"~-A, 1 W,"" hil\"" i'niR ;ijw! W,Wl

nWmtHI anrl 1:Ik,· it it!'!l

pi;H'c?·"A. om :1 qm .. stion of priee,

~~ ttf~ Q y;;~' B~'xt i~ ~"nl l\"t' n a «~i>~trfs to ~hill f(!;nltn 84\skii,frhc;;.

.~",!u :"~' I":\! !tllwh' dH1ii",11I i!i

i~ l.<~;rtawiv luw, and ihe f:lI:t HUH I'll!' nwrliH ;""1" "111':\1 lm'\'("lll:i :-::,,:,kuadh'w:1H from

': •. _\ I ••.. _ .. ,_ .. i._, .•. ,_ .•. , •. \.r.~:,.·.l '.' ..••..•.. ,.1,',.",", , ...• _.,._. ! -w :.,. n :,'1',' ,. I' .. ,_ .... ,..... 111'1 \\yl'l~ 1 h~

~"~~,, '. ; ~ .... ,,"" ',' l" :.~ , ,c pf f lH~:~r:o in n~~aa"~j ~n a~!l'.H"IHttu.ni

fH' l;7~' :'. y,,~. I, IH'(!\'i!w".d :-::I~k:H'·I:r·W:U1 YP!';':U;; '!he 1"('$1 of Canada

o,'~;" ~~~~, ri_'_";: jH~ 1_H(' \\"iH';,L YOU ~nY.

Q, ~p, ::" f:n :i" ! hal r;al'tieul:u' hrn,) j.; !'''Ht"d'!l('IL the prilll1lfY alld essential ;~ l:{I\ 1I1"il!'\:I l'Y dl(1 IJ)!l" 11I'\':tIl~I' you lw ve explailiNI I (; us IlOW that the l'ru ... ·,. .. of .. djIHiuf,! th,· 1'1':1'(' levels hNWH'll, lilly, the level of manulaotured and ~h\' Ip\',,! df f~lnH pnHhlt'i"': l-o nn~ within t ln- (YHHrn~ vi nh\f:H'~:~ry .;'~·~\~Ih·f< 1: tlt:ty ht·ip. htn if. i~ Uf~' within if"" (;.on~t'HJ?--~ -A. Xo.

(~" ~q :h that t"a~(" 1~ l-t"qnlnl:;" n()n-H1oH(:~:try nf'Uon O~· ~Oln(: kin«. ~~)j' u d,all\!(' ill \ :mil.lIo1« 0; tb' !wppli', 01', :I .. Lin YW:\I1~ -Ollg!:1 III haw: it, n IW\~' ~~~"tna~~H>bL'_~d whicl: \\nu:d J'P;ld. ~~ "rhuu ~hal!- not IdB, Hot {~Vl"n ~hv uciahh;nIL" ;-0:" .h:d HWI'" bal':,,!, n" I"'l\\\'('ll nations i~ extromelv diflieul], 'und vou m;;\' :n::nw !I;:n [lin!:!':, :1l1d -:1\' lil:i! more hibli,::':d :I'!rt'l,illl'llIii between '\WO na~':,,!:,, ; .. "Illy :i I'ar:;,\; ~"ltilH'n' of t ho prohlelll alld that Wl' In',;,! II hrundcning "ill ,,: :1", !j,';d nf tr;ld{' i,\' lllul;il:II('!'a! :H'lidll'!~A. t"niOl'tun:Heh-, the other HH-ibd~ whip;, .\'011 lIllllli"il nt'\' ext !'I'nlll.' illdllt·i(·nt find an f'xpelisi\'(' way of ~r\'!nu: t(~ do aLp inh~ a.~ (~pl'tnnllV ha:: found CliL

' <} The !.J:Il'\ t:r system wuuld Ill' curriod on wi I lion t I he 11:'<' of money hut it \\"(.uld !HI! alter t 11\' 1H'('d :"1' money 1\,: {he noco Ior exchange is still there, de,:pite ;i;" udopt ion of till' bane!' "y"telll,?-A. "'s,

Q, ;3 .. t hat t:lking :\fr. Landcrvou :1", ;111 example, because he was sj)('akillg (If !'PHi ,ht' Or/HI' day. and his position with regard to the Sask:uchewan Iannor, and :\h\lr:(;('~'!' i" oxuct ly th« same, tlt(,~· are all salesmen lind they aJ'C tQ'ing 1.0 \!;l'\ !l :liarkt'! lor a certain cnmmodiry, and in the case of the bankers, the comIlwlii ': thev nrc trvin;:; \0 market is IIl(Hl(:v'?-A, Yes.

(i. .\11<.1 "H'Y n;1d rliHit'lIlty ill marketing it. because of conditions which exist ,JtH-id" (hi' monr-t m-v field'!~~:\, 1 think (hat is true,

r.l. 1 haw' oniy 'IWO 01' throe more questions to ask and one arises out of a It'!lr'r which I receiver] :,omc(ime ago delliing with tho amount of Bank of Enzland HOlt-, in circuhu ion. 1 would apj)J'eciatc'It if you would let me have at"volll' convcnionco the circulation of Bank of EnglUlld notes and currency notes. 'You know the di~rilJdion between the two? The old Bradbm}"s.-A, y(:,,; I think the old Br:u!hury,:, n'rl:\ inlv r 0 HI!' extent t h,H till')" are outstanding, arc included in till' figures of the Bank of England notes.

r)( r. G raham Ford Towers.]

{J, 'l'lw frJ)w Hili jU;'l 1\ HjilHW hnllk~ tif

1)1' lmhlk Nn ill Ihp If'lh'l' lHli.lli,' I'nHTj! -·~A. Till' ell:

. .

UH~ vrU~~dtr~

nmourn (·qUi! I hp"'"t~ d,_~p~t~i! 01l\'!WL ill II (0 'wldi'll I hn cent. 1 dn no

Q, II iii;

~h. L,\~ bank» {'nuld

:\l! .. l)g: bt'(;;nm' it i~

'\11', To, $1,G2':J.O()O,OOI tho hnl1k~ hI' by diO)',' ;ttl vi

Uy Q. SO fill

A. II dOl''; nu Q, And \ Q. CC!lW Q. Wha!

thcv noi '!·-~A 0\' In ,,0 Iur a difficult. I U

Q: 2·a4j in Canada, 1 cent. 195;; Ion Q, \Vhilt Stale,. in'iww Q. Suh,ie!

JJ!l ;~

Q, Sllh,il'! Q. Thnt recollection if;

liy J Q. And« Q. But it 7S!i1f.>-2&

\. 1

; anT

t~- ,~t

" •. \,

i~ hI: th~lr

tht: li!"{t! ada

lila! till' ired

: l\ ltC\" gl:~ y'OU t)~\-"M

f a ind ml' '011 lht' led

n !i~~" 1i'~ lmv(" nBw iUiil:!I~l'i;}~ ',Ill «hI'! H~IIUU~ 11U B~U11bilii

uli1ph';. nnn «'Ili"R"uQbinnmn iDuUJ25, 'im nUw in!"';'I. d:n.ll: h\ia!,wanu~'\ I!h~'

B~itl!~ f~i J':ni~d!:lmi K'h"'''ln~,~~'i«ilb, ~\"ittun ~ hr(" q'utr'I"ijahai,ntla ~»i

\,allr'H'tu~',~' ,".(~mmu;t};l"\lllll'i'f; dm'ill~ dmu~ '~"lilidu Y"'lln minlY

tIJut~,·u" Y~:'M~. a ;tlillmul.,! m~!." till !Rl:ilW'~il1lhil!Y !ill [»f "mlwl!uil,~ I ,i~"~i~' h~ Im~k nil~

t\~" Till." !ll'XI «n~wsU hlll.1 '.. . m.\~

ij'n'~ilm "mm'mw hi dw l"rh:j'L i ~im ~i'fu!iillll! ~a hii !qm\' kw

jnl~~. ::\1 m""Ull1l'IlIL Th~"il'" I", ~,I ,U;!!U!i!(I,.C!llU hi duo ;"''''''Imh "f M hWI'.'lmut

h:ml~", lIn C'UWdll. :u . hu! portion ,II' whi:rlu i>l:i\';lllnb!~ 1m' Ow ihllHH'i!_t~ of puhlh' \"tlh'nH'i~"':H ..... limn 2 IWI'n.'llLTiu:u W,D", ~iw"I"h·;dlW.!'I. ~:l11HlliJgt'd ill ulH" , l I""dnd, lim! my f,lw"llIm i5,\~m!gl (il!" iii'HlHl';t !'flhi~' mnw:y(m' pllblit" t'm~"rpl"i.~i" ill 21l."I·('(,nl,'m!:Ill!Wi· alit" !ltl'iiliwl 01 nil' him!.", umi,ij ~~', whv1 ~.~:\, Till',:mll i.lf $L!I:,1;JtUHO.nOO in sa n~"("(jUII!:< is, of course, Hie 1U'0iwr1y of llw vnl"i"!I" ''''plt·hol'''. Thr banks Imrtllhl"lidy ill hili,,!' IIml . . . an mlllllUH ,·qnal 10 tlil" ,,;will.!l';-: um! (k'lwm!~ ill'll!lShc". HUll Ihe iudh+hwl", who liWI\ I l!tTij);<il" \":Hi. di i'OVW';(!. lonn Uwm !,; liIl' j,tO\'Hmlwlnl. iW H~ :mp!JH' iJ;.' Imyin1~. in Ih(, I'lhl' of ~(I\'('I"III11,'IH biW!·owhl!!,., ~;m"i,'rlmwlll .. Imml..;" Tlw ('XlmH to wiuif'8! !lm"I' dl'PO:,i!UI':i an' wmill~ hi f,my }!n\"\'nmw:~i IJlmd,~ at 2 !W!' emil. I lin no! know.

Q, II j,< !':lIlwl' IimilNI?··-A. I tbink it is n'l'y limiiNl.

:\11-. L\:\lllmnlu::Mr, 1),'III'IIIIUIII. ,nd Will inlNld h-" mn'\" ilw idp" 111m (ht'

hank»! i'IUlhl \I~,' j hl' pl'{lpll':;' $II\'irlg",'! . ,

)h", Ih;,\\'II)I,\X: Nil, I am l:1impi>' ;;lalin!; Ihis qlll""!inn II:' 1 r('teiv('d h, bCealll'l' il l:i n ('OIlIIIWIl (I'w::lion l'(·('<'in·d hy lUIlJly members,

:\11-. .Tmn:!ls: T think rhnt nit' question is inilpil'NI hy IIi(' !hUHt~hl thn\ $1,U23,O(JUjlJ(J(J j:; an UliUmllt avnilnblo hy the bunks III lend, WIWI'{,II';, of ,'OHr"e, the banks IWVi' :lln-ndy lounod and im'(~i'h'd Iha amount. whioh is I'('pn""'ll\ed by thosr- i!:I vi ngi' d('pw'i( s,

BJ! Mr, Deaehman:

Q. SU Iar liS 111(' mun \\ ho hus 1'11111('), 10 invest is COIl(~('l'llNl al 2 pm' !'{'III •. _ ~"_

A, II dnt'!'! HIll illl ract liln saving:; dt:po!!Hor.

Q. Ami weuld nil' even in Englnnd?-A, No. Q. Consols lll'l' highcl' thnn Ihat ?--·A . .,Mnch.

Q, Whnt nilnu! Ih,> priel' oi' United 8tarl'); bOlHI,,; tlwy are tax (roe, nrC' tlwy lllll'?··-A. They III'P lax free, ill "(I fm' 115 the em'pm'nikm tax is {'(llle('l'Iwd ur in ",I (m' II'" tilt' 1l11l"n,,11 !:IX is ('ml('(~l'm'd, and il makes the ('omp:Il'i::on I'nllwl' dillie'lIl!.1 think till-i!' long-term IlOnd;; ''1'11 tn .vii-hi 2':N IWI' cent.

1.2; :l·a" per cent as IIguinl!l what ill C'nlllHln'!-···A, As ngainst, say, B 1)('1' cent in Canada. I have II lig:Jf<' 01', 3·0n which is ImsNI on the average of t.ll(' 3 per eem HI;};) 101m nnd t!m .~!. Hlb6 101m.

Q. Whni. \\':1;< the Amcl'iean ligul'c'?·-A. 2':H, and it is based on the United Stntt'" I n}(1"IJ~'y 2~ issue, dill" J 9()(t

Q. Subject to ('x('mplillll'!~A Suhject to oxcmptton, yes,

IJy u-. 'l'uckcl':

Q. Buhj('['l 10 whlt('?~A. Income tax (~XNnption.

Q. That is, redel'lll income lax or both federal and pl'(n·jllc.ial?~A, My recollcetkm is federal and stare.

By Mr. Dvbuc;

Q. Anduxompt fl'lIIli whal?~A, Exempt from tho normal tax.

Q. But ill C;lIlnrla Ih(·,\' han' 10 pay both i"·t!t'l"al and pl'Oyjneia!?-A. Yes. 1S~70-2J

,.150

STANDING COMJfI1'7'EE

lIy MI'. Deaclunun :

q. I shuulrl now like to dc'al with ono or two !l'.H':'tioIlS bJ'oup:ht up by .:'I1r, ':\1l'(~('Cr. III 19~~S tile- n.u ionnl ilH'()ml' was ;j;·\!HlO.OOOJIOO, nud HH4 it was ~'2 .(HlO.OOO,O()O. Hd ween H114 nn.l 1938 We' Ita vc an inc rcasc in LlH' iuu.oual

incnmo of $1,800,O()O.UOO.-A. Y('S.

Q. Tho debt of the Dominion in ]938 \\,[1" placed at $6,071.000,000. and in

lU14 at 8S;r:l.GOOOOO. 'I'll!' addition to the debt since 19B, therefurC', hn.s becn $t}.2c)S,QOO.OOO. A~~Ulllin~J vuur intr-rest rate is 41'('1' [,(,1;1. thai would mean nu nddition:d interest c\:nrp:c to the people of Canada ()r $209.520,000. ;\o\\', the qm"qil'" i~ t hi- : In yOLI' opini()n i~ that debt uny hanler for us to ('any than tilt' d('ht of 1\114? !n other word». if vuu wvrc l':ll1:l(h \\,!)\lld vnu ~() hack to t hc [)Id income or Iakc tJH. $1.800.000,(100 and pn:>' the debt ('h:1rg('~'? There is

;1l1 ilH'J'('n~('d income of $1,800,000.000.

:'I1r. HOW.\lm: On?

\,lr,lh;.\CIHI.\:\: An incrrnsc in \\ip national ill('OIlW IH'tWPf'll 191'1 and 1938

of $1 ,SOO.OO{) ,000, and nn income in till' (!r-bt ('llnr[,;l' of $20!).520,OOO.

The C:ll.\lIDL\:\: Annual debt ('harge'!

:111'. JhACH:\l.\;-';: Yf'f, annual debt rhnq.(l', so 1':1l' a~ the I~ll\lini()n is {,011- ccrned n nd the pro\'incc" and the nnmir ipalit il·~. 1 all! just poi\lting out mcrelv the deb! loan in order to measure what we have done.

:\1 r. L.\;';lJEHYOl:: What about the gl1arantcl'd debt,;?

Xl r. DE.\CH~L\;';: It includes all debts, according to this ,;\:lleillent.

l\Ir.:\lcC :EEIC That dul'': not include that.

Hun. :-'11'. S'n:VE:\S: The il1('onl(, is the inl'onll' of rdl thl' pL'()plc or Canada.

:-'Ir. Dr;·\Cll:\L\:\: Yes.

Hou. :\11'. Sn:n::\s: That i" rdll'ctct\ not onlv in the innea::l' in tll,- three

hrnnchcs of I'ublie debl. it is also refit·deLl ill the ii\(,!'L'a~e in corporal!' del)t.

:-'lr. Lh;,\lIDlA:\: Yes. but on thl' qUl'~ti(lll of y\l\lr l'lJrporatr- debt it if I'l'PI'Csont.cd n lso in YOU!' incrca'" in income.

TIll' OUIl'I: point is t h.u gOYl'I'IIIlll'nt ('xpcndil\l]'('8 ,,'crt' $1,120.000.000 in

lHaS nnd in \914 they were S:10G,000.OOO.

The 1014 l)cr('l'ntap:l' of ('xpl'lldi\urt· to income was 11·8 per cent 1n 1938 it

wus :~;)'04 pel' cent. noes thaL incrca,'!'d debt not represent to [' large extent t~\l' t •• hang!' frolll :l rclat i\,l'l~' ap:rieultural state oi ('('l)nolll)" where uur pxpendilure upon public works and public ut.ilitics and services was not so gl'r.il~ ti~ il more urball l'1I1l11\lunit~' 1Y11l'rC ('\jlcnditurc::' upon these thing" !lrc mur u larger, and r('lll'(,~l'nt not ,,0 mucl: an indication of extra\'ugance as an inrlirar.inn (;1' a ehan,f.';C' ill till' c(,()llumic life uf ( lu: PC()I)k of Can:llla,?·--A. A. change in the r-uu('cptiOll of gU\,I'l'llmcnta.1 re~pon:'iibilitie" for the provision of various things.

That i~ the llI::.;OI' Iucl.or. plus the war.

q. \Yc haw addpd (,(·rtain :-,e1'\'iccs \\'bich [ormrnlv were paid by the

('(Jl1Illlllllilic~ thC11l,,('l\'c~. Tak o old age pen~ion"', where \',!, looked art('\' U\l1' fatlil'l':O and 1110tl1('I''': and nowa.lavs it i,:, placed upon the govcmmcut ; there is a l'h:1'llgc in t\lat ]'cFl'c'ct ,?-·-A. That is the major cl[nnge, or c\lf1llges of that t vpc.

Q,Thc ntlH'r it('lll is this: If the HK\8 income had been ns high as 192!), thut nl\\lllIC' of p('rc('ntnge wou III han' dccliucd to 20 per cent, so that I am ,l"king is nut I he t'llt uri- ur our ll:lti!lllnl prllgl'l'.'s dl'jWnrll'nt UPOll the increase of the nutioual income rntllC'l' t.hrm upon a reduction of nn.tionnl expcnditlll'e?--A. Y('«, T think that if; cNlainl)' the case. The illlpact of national expC'ndit1ll'l' on tlH' ('conomY, of rourse. miw in!l\lC'J1CP the degrce of inercasc ill the nationnl incnm«.

q. '011, quite, T \\,0\.;1<1 ccrtainly ~[ly it docs. A~ far as our develoPll1cnt g{)('~ in the Iuture w« will probably increase that CXlll'IHlillll'e. but. (h» qllestion is do we gl'lvnlllP for tho expenditure? Is it an expenditure which improves our

national ('COl]!lll1y?--A. Yes.

1:\11'. (: rn hn m Fonl '[0\\'''\'".1

Q. TIH're i:, one cUF~ing the ccntral J ccntral bank has not

Q. That will ('OIl to ~afCgllnnl that (,0: contrnl bunk nutburil some wuv bv which tc~ gin' tileD; a \wttel abc) what must. be eI[ :1]rl vXPCllEiyc type 0 difficult to control t greater \lllrh'rs\andin is highl:-' dc::,irabk. found any wavs nrul think the: nttuude 0 the c('ntral bank, wi

BU tto« 11

Q. HefClTing \e :1llC':,:,tiOll :l": to the c increased debt and war debl increase a --.A. The war debt been H VCl'Y substan proviucia.l 'and l11\1l1 up of various entl'] !l0W('!' for examp]cser-ial ])11 I'P 0 0'('13.

By Mr. L

Q. H has bcci loans, that inrlustri: give' 11" the rcn son ---A. Prosumnblv jl 0; profitably cmpl(

T\lr. }lOWAIW:

By Mr. j

Q. Lack of eo flrc nuturnllv ('1111\ l'l'(,:I~l'rl j1I'IHlue\inl1 t.ll(']'(' i- t lie UUlt'I' : ~pC'cjfl(':dly t o b.u throuuh till' ~nll' n If lll(~ out\uul, for e\j1cnd i t urv.l )l'(, n \I new m:1('hill('r~' PI'

Q. Thel't' i~ I pl'ndu('(~ t!H':-' :111" is ill l'Xf't"~: of tlil enpncily point of expendiLure going g('\ along bct lcr.

q. ~\[I' . .T nqu: attention of the (. l\H:1l1(1}'i' I hi' ut hC'1 ('onfl'l'C:lll'(' (If :1[;

p by :\11'. 4 it was national

10. and ill

has [WCll \lId moau ;.; ow, t ht' HlT\" than II \;~\('k to

Thl're is

and 1938

un IS COI\iut 11H'1'l'1~'

.eut.

Df Canada.

1 the three C' debt.

it is 1'CPI'C-

,000.000 in

in H):38 it arge ext cnt .ur expclldigreat. tli fl iucu lnrucr. i('ati(lll l;f a ill the ('01\-

ious things.

aid bv the ,ct afLl:r (lUI' mt.; there is if thaL typc. 1S 1929. thal I am a~king rease 01 the l'c?c--A. Yes, lit ure 011 tho onal i11('0l1lC'. lopment gocs . c: uost.inn is Improves 0\11'

nAVKl.VO AN]) COM :il1~IWE

Q. Thoro i" 011C other it.em I should like to ask you. 'Ve haw been discussing the central bank and its work, its future and cvcrythlllg clso. Tht' cenlrnl bank has not yet reached a testilH! time. has it?·-A. No.

Q. That will com~' in a lime of boom. "'=s (here Hnyihillg which ('ollld be r1111w to snf('u:lI[lrd that coudit iuu or must we leave it ont irelv to the wis.lom of tho c('lltral' bnnk nllthmities and to the intelligence of tho p~()ple? I mean, is there some wav by which Iurt hcr (,illeatinnal work could be clone among the people to gin' them a lwttC'l' ('onn'ph)\) of \yhat must 1ll' dnne by the ccutrnl hank and also what must be douc bv themselves. l.Wl':l1l8e, if you have a highly emotional ..nd «xpensivc type of people tending towards speculative eX(:C'5t'es ;t will be more difficult to ('ontrol tilt' llHmdar\' ,,\'Sklll bv the ('('nLra\ bank?-A. I think II grrater \lnderstanding of ('('ntral'b~ll~k adi\'ities nnrlmonclal'Y matters ill gCllt:ra! is highly desirablv .. , But so fnr IF we (lm~d\'l'" nre cunccrned we hnve not found any wavs [lnt! moans of doing a grr-at denl of wor]; along those lines. I think the attitude of public )11('11. of husiness. of tile people generally towards the ('('ntral bank, w il] be an importnnt factor in what it if able to do.

Bu tt,« Mr. 8tevens:

Q. Hefcrring to the qur-st inu Mr. J)caelllnnn nskcd just bdmc his bEt q.icstion as to the change in the t.ype of p('Ollomy in Canada and its relation to in('rl,,\~('d debt and expcnditure, was that not largrly dill' to the trcH1l'nd01F' WHI' debt increase anti the unique IllHI11WI' in which that money wns expended? .--A. The war debt increase aCC')\l11ts for a portion. But, of COUI'H', there has been a verv ,ulJ':'(nnti;t\ in(']'(';[:'(' in till' debt nost war. if Olll' t akos ;.1 Dominion. pro\'ineial'and municipal debts. the building 'up of various services, the b11ihling up of vnrious entcl'j1ri':'l'!'-and by cnt('rprises, of course. 1 might. meau hydro power for pxample-and, finullv, ill these later years, the inc\ll'rl'nr:e of debt for

sncia I purpnsos.

By Mr. Lunrleryoll:

Q. H has beon pointed nut that there hns boon :l decline in cnmmcrrial loans. that industrial borrowers nrc reluctant. to borrow 111(1)(,\'; could ::\11'. Towers gin' us thl' 1'(':1"on Ior t he rellldantT to borrow money f1'on~ f'oJlllllt:l'rial hauks? --A. Pn';:urnnbly people who may think of borrowing cannot ;';C'C' ways nnd means 01 pl'nfitably employing the funds: thcreforc, they do not borrow.

1\11'. HO\\'Al.ll1: Lack of ronfirlemc.

By ]I! r. Lunderuou:

q. Lack u] conflcll'll('e ,11 thr' I'll t111'e , as my hn11Clllrnble friPIlCl puts it. They a1't' nnturu llv ('ull\'('r~al1t with mnrkc-t rnlldition~ and t ho v know th:lt with inr1'c:t,,('d pn)(i\lctinn th('~' crumot s('11 their g(locl~; is that nottho J'('asnn,?-·-A. Then the'll' i~ (he oUIPr fC'ntlll'l' whirl! lips into that but. whir-l. Iwr\laps docs not Hpp1y ~pl'('ifi(.:t1ly to hank borrowing, the borrowing which a corporation might do throup:11 the ,:ale of il.~ ~t(l('k 01' iinnds to :i1l[(111'(' a prll~l'{lIn Ill! capiiftl :lCcount. If the outlook fill' tIll' Iul uro i~ rnthcr oh~'I'\lI,(, t lu-v ",ill iH'~il 1'\(' to incur that e:o.:pc-nrli!ulT .1H'('IlII:'P tlH'~' do not know \\'Ii('tll('l' the)' wi ll }»: nblc to o1>('I'ato the new ma('hilll'l'~' p\'()filnhl~' in Y('nl'~ to {'OIl1('.

(~. Th(.]'!' j, litlle rr'n~()ll til {·.,P:lllrl their {'npita] whr-n IIiey cannot se.l the

pro{;1l('b thev aln'arly have: Ihnt i~ tlu: jJoinL·--A. If their ]>r(,o'('nt capacity is is ;i~ ('X('(':''' or lheir J'('quirC'Ill(,l1t,o t hel'(' wuuhl bl' no rca;;rlll 10 (.xpanr! from the l'apneity point of vie\\' alone. Sometimes in these eases you willfillrl r:apital expd,dilUI'l' ~oini~ OIl l.o improve the llIethod or output.;:{· a;; 10 ennhlo them to

g('( along better.

Q.MI' . .Inques bas permitted me to lake oneor two minutes to bring to the

attenti()ll of tile {'Ollllllitt.('(' llie i'YIlc;p~is of (lie report Irorn which T qllotf'd Irom memory tlie utlwl' dn~'. This is frolll the procecdings of the fourth intC'rnationnl ('ollfcrf'l1cf' or :lgricllltJll'nl N'(lllOrni~l~, At. Andrews, Seotlnnd, lQ;36.

STAS[)JS(; ('O.1/,\lltl'FH

The ('IL\!H:>l.',\: B~' whom?

TIll', !..\,\lll:HYOt:: Oxford Uuivcrsity l'r('''~, Humphrey Milford, H.l37 , 523 pages and uuhx, :(" cont:lillcd in 'l'!« Ecououi»: Allnalist, n ],('\'icw of fH';l'ic1l1tural bminL'~-' iC~Uf'd hi-llllll\llily liv ,h' :\:c,l'i(:uilur:i1 Fi'Ulllllll\"" Bl'fllll'h, Department uf,\U:l'il'ultul't" ()IW\I':I, jlubli"h,',1 I):' :lutj"lril\' of till' l lonournhlc .l nmes G. Cardillvl' Xlinist cr oj' Agril'lillllrc. 'There :lIT two pugcs onlv. I would not (':1]'(' 10 )'(':111 Ii nil int o the rctort!, nllhulIgh 1 should like to have it in there.

'I'll(' quot.uion i~ a~ \ol1()\\,s;,- .

l'ruhklll': lif cousumpt ion of :tgrit'liltlll'al prndllct~ \\,('1'(' dealt with hv L 1', C:llhcnrt. prof(,,,,ul' of pLYoiulog:,. university of (;la:::go\\" who

: 1'1,:;,('<1 the prnidl'111- from ti,l' JlUI ritl;lIl:tl ur [ll1Y"i[dll,~i(':tl :'tnntlp()int. and hy H, B, F()lTt's\,'J', Uni\')T~i\ \' ('t,jit-go.' of \\':d('~, \I'!If) :\u:\cket! die ]ll'llblcm II:tlJl1 111l' \'l'tl\l\llllie jlilini ,.( "'Inl', '1'110"1' I:\killg j1:\1'l in the di~I'1\"sion illC'!lldl'ri F, I .. :\lnl'illluu:::1. ,\:;"I1':t;;:1 l lon-i-. l.ou.l.m : F. II. ,,1. Llovd, >\Jm],('[ ~Lll'p]~' ('''11111111;",.1.'.11'''\]\: F, \1)11 Bu!o\\" int('\'lIntiollal Labour (lJil''i.', (;l'lll'Y:\: ! I;1Zl'l \..:, :-:, il'l,,'j';I'I~, BlI!'e:1U "1'1 \t.i1\(' Et'(lIWlllil's, \\":I;o:hinglt>JI, ll.l ',: \1, K. 1'\"111:(·\\,1:",,,1 H,<I:tl'l'h In,-li(\I\(', :-:t:ll1l'O!'d l-nii'eJ''Oity, l'::L l'l'I1!:I: :tll,l:-:, :-:l'lilnirli, {'l1i\'('!'-I\\' 11:' ('r:lt'l)I\', i\,j,lllti. The general kC'li11i( !'XIl]"'''C!',j n ,i'l' di-"Ci--il!ll \1':1-' ,;1 liIc nt,(,d iur illl'J'C'a':l'd cousumpli'H1 t""L 1'1'0111 i l«: '-;'(lI:ip,·iJl' iii -"l\'ing till' :Hrri,'u!tur:d marketing 1'1'<1]11[111 .ui.] "mlll lilt' ",;;,,:,·u:i,:ti ]\l!i11 1 ill' virw. :'11(':(11" l'on,:idl'l'cr\ for hringing t his .ihout ilit'lud.;I: ill iu,'n::-"d 1'(':11 pU1Th:l~ing power for the In:I:'~-(';-:; t2i d(I('l'f.:l:-::i,(1 ('l);-:t~: 1:3! :::1H';:t n)t·:t:-:\lrC'~.

\I'1:i('h I 'lllo\l'cl i'j'()1\l ll1('l1Hlr)' :1" I had read (',Hilt! 1 illl! th' 1'1>1 "fit un Ihe' rC'cord? I

T Hk'(' :II I' (hI' \hl'(,(, JlOi11t~ lIWlll v. '!'lc C(">/i""iJ(' ,\/iIiIlI",1 do 1lO'UPI'(I-(' it i" Jl('lw~":try, Til" ('11.\11\\1.\:;: 1 dnuhl il>;:\ t,t'{'::lI..;' \;'(1'" :11,(, "nllW (plf'~jioJl'; t hat other ]11<'1111",1':' uf 1111' ctHl1llli;t,,(, \\'1I111d lik,' to pIll on the rccord,

~\\J', 1 .. .,,\I>I:I;\t<1': 1 ,\i()u\,j like :lllIltl\('1' tlllpOJ'\\lllity to question Mr. Towel'S, but 1 wil l II':I\'(' it.

The ('ll\II:\I\:;: T!\I' IIwlt'l':'t:tllding \\'II~ that :\11', .l aques would proceed,

By ,lIr, Tucker :

Q, There \\':\:' j u-L (lIlt' t lunu t11:;( I should like to l1:H(' nil answer OH, not now, but I ,!H'liltl like tn h:I\'(' ::\11'. T()I\,I'J':' gi\T his ('onsidered opinion on this n m t t rr. It ie' :'(llll\'llliliC'; til v .: hit,!! 1 think he must have gi\'('l1 :1 lot of thought ill \'it'II' (Ii' tl1(' !:tel that tIlt, hulk of 11 it' monev of tht country is to be found ill b.ml: t].'jlll-iis :111,[ t iuu the bulk of tilc:,l' hnnk clcpof'it>< arc really regarded hy l1l:tllY 11('(lpl(' :1:' ill\'I',-(I11('Il(" tilPl'c])y tangling up till' quest ion vo l investJ1\I'II(,: wit h moricv. 1l:1~ th,'l'I' hccn anv thought given to anv system of unIHngling !ll:ll fl':I1'lll'f' of our t'I"lIl;'llli,' 0<"11'111 1\~ili('I;' 11\ li\11('o Il;u~l cause wrong c"!leith-rat i(\n~ tu ]11'('\,:lil ill I'cg:\l'd to llll' 11:"1' of morrcy? (iliC' 0[' the things that hn s lll"'lIrrl',j it) uu: i~ th' fa!'l tl::\1 ,I r.rx (1Il 1>:1l1k deposits of, ;:a~' ~1 of 1 per l'cnt,jH'l' mon (11 w.iuld (':1\1:'1' h.mk dq )I),i i" t U «nee more bC('()llil' monev instcad or Iwing 1'C'I!::\l'clll.! ne ill\'C'dnll'l1k. 1 do not want an :11\:';\\'('1' now because I think it j,,"lI\l\'lilillg 111 II'itil'll 1'llil-idel',ltitll1 shO\lld \)(' gin'n. that instend of permitting hnuk s to 1()\\'('1' their intvrost rail'S we should permit a tax on bank

dr-posit-.

13./1 JIr. McGee)':

Q, TIll', Chairman, therl' WHS one question I should like to ask arising out

of :'.,[1'. DC'at'lllllnn's l'xmninalinn, if T may be p"l'mitted to put it?

The C1L\lU,IA,\: We prnpcscd lhat l\IJ', .Iuquos should go on fit 12 o'clock. 1\11'. J,\qt:ES: J r l\ll',l\JcOc('\' wnnts to ask a question now, I am agreeable. The ('11\m~lA,\: All right,

JJL

q, TIll', spending at l'(lsulto; in tl mente ill Olll ncnt impro miuht han hu:c,s. \\'11:1 t be on thing; expr('~s{'( 1 "

Q. I ,,' :-;takl1lent

far trrn

a 1'(' \1' i ll unp to : 011 '''it pro: ::;un alll

res:

Tliat has

Q, Al of 1l101lC'Y their bnul whom t.hc scalc, i.c.

Q, 0 Q. S( obtain~ t( q, '1'

of \Jo pll PI'

('11

fir

\,1 Now, as has been that vioi G1'(,:1t B only to r

. Q,!

whirl! I The \11', The

to me, 1 that h('

523 lltural unenb Irs G. lei not

there.

I with __ , who

It. and rnblem -ussion Lloyd, .nbour Wflsh-crsitv , c!:cncr~l isumprkctiue; red fo'r [01' the

dread ird? 1

l othel'

l'owers,

ou, not on this thought e found egarcled

investof nne wronz

19S that )[ 1 per

instead 'cause 1 ,{l'nd of )11 bnnk

sing out

o'clock. 'cable.

BA.VJ\JXG AXD ('O,1L1IERCE

By Mr. JlcGeer:

Q. Mr. Towers, you renall that 1\11'. Dcachman sugge5tcd to you that public spending at this particulnr time would not probably produce any sntisf'actory results in the way of increasing bank loans 01' bringing about a general improvement in our CCOllol11y'?~A. I think his statement wns along the lines of a pormnncnt impl'OVl'l1wnt in the gCl1l'1'al economy with whatever rCf:u\tant effect that might. have Oil bank loam. In curlier meetings in ~pl'1\killg of public expenditures, what I have st atr-d is that to have fl pormuncntlv gou,] effect Ihvy ~houl(l be on things which strengthen the economy as a whole. j\l I', Dcuclnnnu may have exprosscd souie vie-ws Oil t.hnt p.ut.irulnr point.

Q. I shciuld like to draw your nt.tcntion (0 the Bl'iti"h ?llnc'\Iillan Report

statement in regard to that at page 136, reading fr0111 lilt' middle of the page:

ypry ]0\\' rates of discount prevail, it is true, u lrcady, but have so far failed to bring about the transfer of money from short-term to longterm loans. The main pruct icn l nb,,(n('\to \v!ti('l! wr: ::'el' ill tuc way of a resumption of long-tcrm investment is Lhe shortage of acceptable and willing borrowers for the purpose of new enterpri:,c. clue to tile general unpndittlhlC'nc5s of industry. The task is, therefore, a double one; partly to nttJ'Hc(borroweri' of nnquest ioncd stnmling by a lo-v r;\I.e of interest on long-tcl'm loans, partly to inoronse the "l1pply of nttrnctivc 10Hns. YFith the first end in view. central banks might use their influence to promote eonilden{'(' in the duratiou of low 8hc;;t-tcl'ln rates und to ]1C1'"Hade the member banks of their svstcm to reduce the rate of interest .allo\\'l'd on dejl()"i'> .. 'fi a" to di~rnn],;lgC' til(' public Irom \vilhholding their 1'(,,,0111'('(''' from the investment market.

That. has been clolle?---A. Yes.

Q. And that situation obtains in Canada to-clay; thnt is, there i::, plenty of mont-y ill the banks and plenty of rr sourccs upon whir-l: the hanks can increase their bunk c!cposit~, but. there is not available the type of IH)1'l'o\\'Cl' thtough whom the bank" care to invest by making bank loan~'?---.\. Y('~, on an increasing scale, i.o., sufflcic'nt to raise the sum total of loam.

Q. On an increasing senle?~A, Yes.

Q. SO that the situation dc,:cl'il)('(l by the :\Tac?lIillan committee really

obtuins to-dnv in Canada'?,-:\. Yes.

Q. Tile I:Cport goes on:

The grcatest difficulty, however, whir-h we foresee is the fulfilment of til<' ~e('()nd i nsk, namely, to rcmcdv the shortage of .Icfinitely SOllI1d borrowers fur the purpose of lWW entcrpri~e. The vicious circle is C01l1- plctc. The decline of new enterprise has ronctcd ndvcrscly on profits and prier-s. and the 10\\' 1(,\''\ of profits and ]lriel's stands in theway .ofucw cntC'l']lrisC'. It is for (\11S renson th:lt sonic of us think that in the dOlllestic field it may be necessary to invoke govc l'11111Cn tal enterprise to break the

vicious circle.

Now. as a matter of Ind, whether it li~l~ bern ~uee('sdul OJ' not, public sp('ndin~

has been 1'(,~()l·tecl lo ill (lie rllitccl State:'. G1'f'nr· Britain and Canarla to break that viuiol1s eil'ele'!-f\. In Ole United Stnles in pnrticu'nr, in Canada, yes; in G1'(,:I1. Britain, until 111(' rearll1amcnt program camp along, it. was rpsot,tcd to

onlv to a moderate extent.

. Q. And now it lias been ]'e~(',·t('(l to very cxtensively?--A. For reasons

whic]: I ~l1ppo~e nrc other than economic.

TIll' CHATlW.\N: Mr . Jnqucs.

)11', r..lc:Ch;E]C \11'. .I aquos has gin>n way to me, '\11'. Chairman.

The C'lIAlH\L\X: Please CX('U~(, 11](' just :1 minul c. ]\11' . .Inqucs has spoken to me, I think. after C\'(' 1')' s('~:,irll1 for the 1:1~J th1'(,(' 01' 1'0111' s('~~i()ns and stated that he harl not had all opportunity of presenting his cnse. Mr. Jnqucsgnvo

153

451

ST,I.YDISG CClJlJJITTEE

w av to von fll]' Ihe purpose of n "1)('C'ifie question. ,Ye hac! an nrrnngcment at IIi(" l:IS1'l'illilllitlt'c mp(·ting that "\11". .laqucs would proceed,

:'II]' \JcCU':H: I was just through, Xl r. Chairman, if vou had remained qu i l't .

Th« ClIAIH\\'\,\': \Yr- liarl ;\l1 nrrnn[!Cll1enl thnt Xl r. Jnqucs was to go on at 12 oclork. 11 i, liOIY half p:1H 12, 1 "illll,1y want to gin' every person an (q\p\\rlUllil~' til l':\I']'e~3 his opinion and have a part in this examination.

:\11'. ,l.\(llTS: :\11'- Cliaimian. I shoild like to add my npprociation of 1\1r, Tll\H"1'~' 111!f:lijing good humour ill this examination, 1 shall say nothing to milk it. :llId I -hou kl like' t o helic'\"(' that whru ever questions I may put are put in t lu- int r-ro-t s uf the country at larue,

Xl.r. T(l\n:BS: I am sure of that. :\1l'. Jaques,

\\ r. hQll:": :\()\\' , \\'t' hold n different viewpoint frum perhaps the majority «f l1:e ]".(!\>1(' PI' t lu- ruunt rv, Thcs« views. :1:0 a rule, an' not readily accepted; hu: 1 t hink that t he l';L'IlCT:tl st n i« of nut 011]\' this count rv but- of the world at l!ll'ge j.: -ur-h t hftf it ;!tould inc line el'n)'l)(lcl): to open thell' mind" to new ideas an,] tl! he wi lliru; to admit that there is something radically wrong with the world. [do not' \\'i~h to discuss :111:, particular phase of industry 0'1' any ]13.1't.icular pnrt of Cnnrula or PH'1l Cnnnrln it st-lf', 1H'(,:l\l~(, all industrv in every countrv. :lp!':lrrnt]~', i" in the "fllllt' condition. Before I begin there fire 011(' or 1\\'(1 Cl\l('.:ti(ln~ I ,hl\dd lik o to ask :'Ill'. To\YC'r~. He answered them but I did not q;litc" un.lcrst.aud the answers which he gave,

n!1 elf)' . Jaqucs:

Q. TIl!' fir.:! quest ion is this. You mentioned. if T remember rightly, that it l"Oq the hank" :} 1'('1' ce-nt t.o loan IllOl1('~'·.'-·A. I think EO, 80 Iar :1':'1,,1 can guess, thai i- the total cost of their operation!".

Q. Tlm'l' por cent on cvcrv dollar wlrich they loan: is that right?-A, Three jll'r ('ent on snv ; their total a~~et" (1]' liabilities, whichever you curt- to take, In other worr]«. if :1 hank wrrr- the . .:izl' of ;::lY $lllO,OOO,OOO of ns"cts and $100,000,000 (>1' linbili: i(':-, it" npcl':tting ('XPl'l1S('" and cost, for interest pnvmcnts to depositors ri~ld lIO,\ would lw in the neighbourhood of 3 PC'l' rent on 8100,000,000,

n!l xt-. Kill/C)!:

Q \Y"uld t hnt inc ln.l« (Ill' intcrrst thl'~' ]la~' on borrowed money to their de]1o<iior.:':,,,,,:\.. Y(':-" it rlor-s. n nd the opcrat iug expr nditurr-s. :\Iy opinion would 1)1'. :lIld ft" 1 h:1H' snid hr-Iorc it is n gll(';':;:, it is not based on fizurcs which have heel) compilod. l lit' opornt in!.! ex llf'nrli t urc= would he in th(' lH';gh bourhood of 2 per cr-nt and i111('1'("t. nowndnys avrrazcs 1 ))('1' cent.

Q, " wns part

h an' lint Q. \1 Q. ;.; Q. I

them.-:\ 'What the certain H odd. :\( quite bc~ idle, in \' depositor savmgs t corporati have no

Q, ~ banks ,,'J trying to it. out in

Q. ~

thr i);llll Whv do Ol t'he pr be ('ithe deposit [ COllC'Cl'nC than ha'

Q. r

A. If al thr rc w: han' 110

Q. : would I svst om , l;ranell doposi t~ mean sc to (he, bet \\'('e11 wi 11 do

n.11 Jrr, Tucker:

Q. I 1t;w(' !nl"(!otten whot hor ~'n\l ~aid t hat iur-lu.lcd all 1",(] dC'btp or lo~~e3? --":\. :\0. it dlW~ nol .

n)1 .1"', Kin/I)!:

Q. Dews it include allowauccs for 1>:1(1 (ll-hU::-'\. :\0, it cl()('~ not. In other \\'lwd~, thaI i~ :3 pCI' ('Pllt (111 the opt-rnting and inlPl'P:,t co."! side. On the cnming ,idl' t1l(')' \\1'1l1d hnvc to t rv to gr't 3 pel' {,pnt to balance these costs. find somej hing more 1(11' t l.c p1'O\·i.:i(lll of l'l'-l'l'\'l" Ior hnrl debt- and for pavmcnt of divitlf'nds.

Q, nil vou iur ludc in that tho r-ost of plant , for inst nncc, the buildings that (h('~' I'll! up nll OVC'I' Canada and which nre valued very low in their statements? _A. It would mrludo the ('xpellH';': of l'lH'r;ttillg I hose. hcrding and lighting (11(''11, Q. Tk construct.ing of them? The)' construct so many a ~·eaJ'?-,~A. 1\0. Q. That i~ capital cost ?~A, Yes.

'''II'. Craham Ford 'I'owe rs.]

Q,

C~lll:ldi;

Q, Q.

;\. I 11 ,1

(~. sion '?--

Q.

my ind

BANKING ANDCOJ[JlFRCl','

,!,:cmcnt at

By si« Jaques:

Q. Why do the banks encourage s~wingsi-A, \Vell, I would aS51111!e that was part of the banks business. Perhaps that I is the "Tong answer. Perhaps 1 haw not seen whn; you are driving at, NIl'. J~q\l(,~.

Q. Well, the point is that they do not loah those sa\'ings?-A. The banks'!

Q.~o.·-·-A. Oh, yes.

Q_ I understood you to say thcv could not loan what. dill not belong to them.-A. T11(' banks, cannot, of course, loan the money of their depositors. What the banks have done is to make loans and invost meuts which result in n certain sum total of deposits. In respect to snvings thnt amount is Sl,nOO,Ooo,OOO odd. ).."O\Y, what the dcposil ors xlo with _ these savings is something which is quit e beyond the control of the banks. The depositors can lonvc the savings idle. in which case there is no turnover. Thev then rest in the banks. Or the depositor can, if he chooses, spend it on consumption goods. If it is a pure savings account. he i,- uulike ly to do that; 01' he can buy government bonds, corporation bonds, any investment of t hat kind t hat he liked; but the banks haw no control O\'C'r what the depositor does with his money.

remained

o go on at person an ion.

ion of Mr. nothing to .ut are put

.c majority . accepted; .e world at

new iclcns ~ with the r any par)' in every are one or I but I did

By MI'. Landeruou:

Q. Why do they encourage them to :':tH' and put their savings in the banks when they do not 10n11 the people's savings? That is what Mr . Jaques is trying to get at?--A. You mean that the banks should encourage people to take it- out in the form of cash?

Q_ What is their purpose in encouraging people' to place their savings in the banks, on which they receive ]-1 per cent, which is a cost to the banks? \\ hy do t1:('y encourage them to e10 that if the banks do 110t loan the savings ot tIl(' ])eoplc':--A. If they \\'CH' not on deposit in a savings account they would be either withdrawn ill [hc form of cash (II' t hcv woul.! be Iuu nd in rlcmnnd deposit accounts, J\O\Y, as n matter of Iact, so ftir ns the banks as a whole are concerned, thev ,,\'CHIld na 1 urn lIy prefer to hu vo t he mouey lin depm:it rather than have it wifl-rlrnwn ir, legal tender cash.

Q. The ],PHS()n is that we have the usc of cash in the expansion of ('r('dit?~ A. If nil rloposits wore withdr-awn in the form of legal tr-udor cash, of course, there would be no banking system as we know it to-day nne! the banks would hav« no assets ill the form of loans or bonds.

Q. Became they would han no cash to create creclit?~A. Because depositor'S would haw withdrnwu their deposits in the form of cash, and 110 banking sF(ell1 "mit [1:' we know 110\\' could have been built up; but while the individual bl'.'llH'h manngor \\'ill,qllite properly, try to encourage a person to build up dcp(l~its in hi~ savings account with that particular branch. became it docs menu something to that individual branch manager, it docs not mean anything to the sum total of d('po~it- ;\~ a \\"\Jnlr; so 0lH' kl" vcry (lfU'n to disi.inguish bctwocn tho type of things that an individual branch manager quill' properly will do as contrnstcd with the situation of the banking system as a whole.

srht lv that (em; guess,

'-··A. Three o take. In IOO ,000 ,000 ) depositors 00.

C'Y to their ll~ion would which have irhood of 2

t. In other thecnrninz , Hnd sn1l1r'~ payment of

fly si« Jaques:

Q. \Y(,I1. ] forget the figure:" but J'o\lghl~' :i'1.200.000,OOO- --A. The total Cn nndia n d('p()"it~ are $2,500,000,000 approxiiunl olv.

q. Savings deposits?-A. Savings deposits about, $1,660,000,000.

Q, :Ao\\' is it fail' to say that all of these savings depo;.:ils are true snvings?A. In .\;, sense that thov are thrift accounts,

Q. Well, in this wny: are they available for investment in capital cxpansion'?---A. Yes, tliey arc, If the depositors wish to use them in that form.

Q. For instance. if ] han anv bnlanco ldt over when I leave Ottawa from my indemnity. I will put. it in the hank in a savings account.Z-c-A. Yes.

ildincs that statements? thtiug thorn. ·,?-A.- No.

·155

455

STANDING COMJIl1'TEE

Q. \V\Iile that is in a savings deposit, it is not a saving in the true sense, bCC:lU:,C 1 intend to live on tha\ until I come down here again. I believe there is a largc pcrcrnlage of those so-called sayings in the same category as mine

\\'ould 1)('.

The CIT.\!H'.L\:-;:: 1::; not that what a 5:wings is? Is that not the nature of

sHvine:, ih(" (1(,:,ire for hlture usc?

Mr .. lAQtTS: -What I \Yollld call n true i'a\'il\g~ would be a sum of money

whicl: :I ha\'e set nside and whioh I do not intcud to lise in tbe immediate future, or :It lrast I do not intend to usc it for my living expenses. I have set that :\,;i<1(' for t ho P1Jr"OS(' or inveEtmcnt, and 1 think that a great deal of those ;,o-rnlkd ;::l'\i11l,'::' nrc l1]('rely mOHt·y" which arc dcpositr,l into a savings ac'Count

rather than in r, currcnt account.

Xlr. TO\\THS: There is JiO doubt a fair amount of that, yes.

J3!1 .III'. JOI]1{(S:

Q. 1 think there i".--A. I think the b:lnk~ nrc trying to get what you might

call til!' adi,·c cit\-in('.s nccount,;----llial is tll(' ones ill which there are a fair number of chequl's, a;Hl if the account is not really a savings account, but in\.ended for cxpenditure,:, you wil! fwd n Humber of Cheqlles issued on it-I thi:ik that th(~' try, ill various ensc~. to get t110~C moved into currcnt accounts, fcclinf,': that (liey really arc of a current account character rather than true

savillC:~ necOllllL",

ci. -:\o\\' thi:, is a qHe~tilln thnt h:1:' been asked and an:3werecl many times,

but 1 have a rr-ason for n~king il. Yon haH' agreed that banks do create money? --A. Thov. bv their aetivitipo; in makine: lO:lllS and investments create liabilities for jh('m:(.jy;'~. They create liabiliti(,~' in the form of deposits,

Q. And h:; buying: ,:ccnritic'.",?--A. l'.:-' llIak.ing: illY('stmC'llto in ~r-l'urities or

hv Hwbng lonns.

. q. '1';,\1 will ag:ree \I'jt11 the :,tntL-nH-nt that has been made that banks lend

b:' creating the lllC':lllS of P:l)'llIClit': --- ,\. Y (!~. 1 think tb:lt is right, but the u\lH'l' W:ly of pUltilig it, 1 think, is jll,t as good.

(1. \Yhy is it , t hcn, ;.,11'. '1\]\\"('1':', i hnt. the- hanks have gone to such pains in

jill' 1';>;': t o hide- that f\1ndullll'llt:d fad·~--A. Well, I do not know t hnt they have \>('1'1\ :11 paill:' ttl bide it. I think th:lt an individual b:~nk might wish to cmpha';,'I.( that ,(1 iar us it i~ Cll11CC,\,llCd, that proC'css docs not seem to operate-if I :U\. Il<,t m:lkinp; too ('onf\1ocll a ~t:tt('nwJlt. An individual hank , when it makes :1 ](),I11 or 111:tkc, an inn-stlllC111. mi:,rht find, of course, that a portion of the rC'~ltlLdlt dl')H1sit is t nk cn :t\Yay Iroiu it in the form of cash, taken to another

1l:1Ilk,

nil Mr. LandentoJ(:

l~. l s it \lOI for t his reason, a lot of the officials in t.he branch banks do not u)IIkr"tand hO'.1 bankil1:,r Opl!ra\('~ ns a \I'hole, so they make these statements? nn l1Ull\\l'IllI8 (l('1'H"i"l\.- tl!l'y hnve "aid t hut lhcy lend j)cIJple's savings, and that ! lilY L:t\'l' (.:\~h \;chiJll all t\cpn:oits, and all such trash as thaL.-A. The subject i,,'n \'uy ('olliplic-ntct\ llIlt' in i\- ":lri,lu- :t-jll'l'i:' nround the couul ry.

n u JJr. Jaques:

q, That IYIHlld not apply to the bank. You nrc refl'rrilE'; to a branch, but

not to tlll' banks :1S a \\'bolc.-A-. Well, encb individual bank, of course, has to rCllll'm\)cr that if it is making loans or investments Iastcr than some other

bnnk~, it will be losing cash to other banks,

Q. Ye~':-:\.. So t,hat I think in an effort to distinguish between the indi-

vidual banks in tll:1\ rc~pc('l :1' di"Lll(,\ from the banking"y~t('n1 as a \\'holo :\11<1 ttl <lennl' ('karly the individual hank's limiUltillns in }'('~pc('l to adding to its n~''l'ts :lnd dcpu~its, there has Iwell prl'ld)ly sotue !:tek 01 dnrity in respect

t o l he \\hole mb,iecl.

1\11'. Ur,)11;)])) Ford 1'o\\,0n;.1

Q. T

the new

.J ackson 11lO"t vigl Mc.Kcnn [ was one <

was SPl\:1 is ill .( he has, of r-. thing. I loans HW mon e.\' 0 meuis.

of the de

Q.l poor pol arc susni that th\' until ~OJ which ii peol11c s deal of ( a clear desirabli

Q.

entry, 0 Cannd:1 the wav

Q.'

mont 11 cqui,'al 'I'll pen ant

Q. that th IS an l'

Q.

'1'1 Jaques

:r\1

Q

broke wook . loan. hi"to": can p Angus t.hink. up an

se, ere ine

of

ney late set lOse runt

light

fair ~ init--I

unts, true

imes, mey? lli ties

ies or

, lend It the

Ill1S 111 r have mplia~-if I makes of the mother

do not monts? ,ld that subject

ieh, but , has to re other

he india whole lding to I respect

BANKING AND COMM HRCE

457

Q, That factor was very strongly denied in this eOlllmittec in IH3'1 when the new Bank Act w as bei'ng dis(;u~5ed, I remember the statemcnt of :-'11'. .Iacksou Dodds. l~en('ral mauaacr of the Bank of :-'lonLreal. He denied in a mosl vigorous 'w;;y that assel:i.iofl, and he said that the only objeeL of Mr. l\lcKclllla's sbaLemcnL w as to advertise the Midland Bank. 1 remember that was one of his stat<'llwnts. And he also sni.l that he ,\Ilyl\'l\y, and I sllppose he was spe:Jking for the Bank of :'Iuntreal, did loan their depo~ito1'5' money. It is in the blue book of the proceedings of this committee in 19;H.-~A. There has, of [,1l11l'5e, been great miwndl'rstanding on all Eid('~ ill r('~p('d to the whole thing, It is true ihat the abilit y of a bank or of the banking system t.u have loans and investments, depends on the willmgucss of depositors to leave their money on deposit; so the Clluntl'l'pnrt of the dCjlo~it,s i~ till' loans and investments. In that sense you mighL say that it represents an investment or a loan

of the depositors' money.

Q, 1 do not wish to go into that; I merely wished to say that that has been

poor policy on the part of the banks, because there arc 11m\" many people who are su.-piciollS, and furthermore it has confused the general public into believing that there is just so much money in the world fine! there cannot be any more until ~(llYlcone saves, so the idea l!lwt 1110ney can be created for any purpose which is dQ6irahlc seems lobe resented by many pc[)ple, and a great muuy people ~l'l'lll incapable of believing il.--A. 1 H!!:rH: that t.here Iii> houu :t good deal of confusion, and that conlusionhas been unf'ortuuu+c ; the development of a clear unLlcr3tnncling commenced many ye-ars ngo wouhl have been most

desirable.

By Mr. Landcryov,:

Q, It has been denied that a bank could create money by a fountain pen entry, or by an orilinarv pen n nrl ink entry, It was rlonied nil +hrough western Canada ill a campaign earricd on by bank clerks ami mallagc·r".---·A. Very oflon the w av in which the statement was made was a wrong one,

Q." \\'ell, t,IUll may be true. They may not hHY~' elnrificd it. Tile statemenL has been denied .hat the hanks could by pen and ink entry create the

eCjuinllcnl llr money in their books.

The CIL\lH:\IA~: That is the \\"n." you make conuncts, \11', Landrryou, by

pen and ink,

By Mr. Landcruou:

Q. The Jloint is, it was denicd+-A. It very of Len carries the implication

that the banks arc somcho',Y or nnothcr C'l'l'nting assets for thClll:,d\'l's; thut it

is an CBSY gnme, so to speak.

Q. In fad, they d().~"A, No. they do not; thev ('reate n linbility.

The Cll.\lH:lI.\~: Mr. Jaques has tl:v floor, I am trying to protect Mr.

Jaques.

1\11'. L'\~llEnYOu: All right.

By Afr. Jaques:

Q. What led me (0 make that remark \\':I~ this: 1 remember when th' war broke out-thnt wns the Cr(':!t \\'ar~-l W:lS fanning at the time, and within n wC'ek of its outbreak I 'Will intu the lucal bnnk and asked the mannger for a loan. He cnid, "Wlint Ior?" I :;nid, "Well, here is a European war ant! unless history is not to be followed there will be n demand for e:'eryth~ng which ",,:e can )11'od\1('('." He snid. "W('ll, vou cannot jlroduce' ;\llytlllng this yea!'; It is August; it is too late." T E'aid. '''-:\0, I was not thinking of this ycnr; 1 was thinking of next VCHl'. 1 cn n. with some m01H')' get. a grc'at deal of land broken up nne! put it inl'o crop next Y('Hr," Tile answer I got W:1S, "Why, the war \vill

STANDlXC COMMiTTEE

be 0\,('1' in six months: thoro is not onough money in the world to finance it.' W« allknow the war did not cease for wan! of money. nne! the next one will not he pr('wlItccl b)' want of it, either, You mentioned the ot.hor day that a royal onmrnission-c-] think in Ireland. if 1 renu-mber rir;htlv-A. Yes.

. Q. Dealing witl; tile theories which I undcrst.and nre known as social

(,l'edit·· -1\, Yeo'.

Q. If 1 am not mistaken thcv arc known as social ('l'edit, and you said

that the «omnussion condemned t hr-m :b being falln('iol1~?--A. Yes.

(r Yon are nwnre thatthcre was n minmit)· report which stated that they \\"('1'(' in l'lliire ngreclllcnt with those iclca~?-·-A. No. I wns not.

Q. As n matter of fad, there was, and T should like to observe Oil that loo, 1 hat if you ~('[ up a oommission r'01111' serl of brewers and distillers and their :I~l'nls to examine the benefit:' of tr'mlwrnnee, you won't get very much l()gic.--.\. :'II)' r('eoll('('\io11 is--a1tl1ough 1 should not speak for Ireland-that 1liere was a vr-rv large' ('OInmi::~i()n whir'li H'prc:'('nterl ('on~idcrable diversity of interests. However, I cannot sav who t hcv were,

Q. Xu\\" 1 should like 10 1'(,'f('1' to the . word "orthodox". Speaking; of the

word "orthodox" 1 have n list of orthodox lulicfs. and t hev are as follows: 111:11'I1i11('" ('1'c:dl' jobs: public debt is infl:ltiClllm')< private clebt. healthy and sound. Wi' must bn lancc 0\11' budgets: :111;\ to-day that we 1l111~t tighten our lnlt-. ,Ve eli"l it before :\11d we ean do it agnin. The unorthorlox beliefs are (lint debt i" not workable. nnrl that 1l1(lJ[('Y i" a public utility, that a growing ('('on011lY cnunot Iullnw a balanced budget and that the only sound Jl}OIlCY is

debt-free 1I1tJnc~'.

Xl r. Ih;.\(,II~lA::\: Whnt do you mean b)' "deht-free mOJ1('Y"?

Mr. JAQn:s: ~lone)' which is nut distributed in the form of n debt. }'III'. Ih:Acll:\L\,,: ',"ol1ld vou r-xpla in how it call ill' done'?

:'IIr, ,TAQF1':S: Ilow it elm be done'?

M]'. ])1':;\(,J1:IL\" : Yes.

Mr .. J.\Qn:s: In n Iinnncinl sense? I wouhl rather postpone that 11nlil--

:'III'. DV.\CIl,\L''': Wchnvc had (Jill' postpoll(,lllcnt nlroudy. l\II'. Lnndoryou

postponed his ]'('I1H'dy,

l\Jr. L\:\JJEHYO\": Xu\\", I have 11<'\"('1' been [1,k('<1 that question. I think that. is :lh~()ll1t('I~' unfair. 1 r v ou n"kcr\ 11W, I would answer YOII. That question has never b(,(,ll put tn 111e. [llfl\'c never hccn :lsker\ what debt-free money is. If vou [I,;], me 1 will nm;\YCI' you.

:'Ill'. 1);:,\('11:1[,\,,: I lwg your pardon. I was referring to the proposal where you ~:lid ynu had n plan til r,ffcr nnd ,,'('1'(' going to give us a solution of our

di!lic111tiL'c',

MI'. L.':--:I\l:HY01': Pnrclon me. ?dl'. Chairmau, hut t.hnt stntement is absolutvlv C1'1'Cl11(,()]l". 1 1)('\"('1' offl'1'('d the hun. member 11 solution .J]' told him that \Yr;\lld ,l.(iv(' him n «ilut iou.

Mr., ])1-:\('11">\.\": T" 1],(' r-nmmi l tee.

Mr. TO\\EHS: P('rl1:1]1" 1 llIightil1st intcl',il'cl here that, of course, there is some 82Ji()0,OOO.OOO of (kbt-frc(' money in Canada to-day.

?Ill'. DE.\CH~L\X: Debt-free?

l\lr. TO\\'EHS: Yes. absolutelv.

By Mr I aque«:

q. ls it not n la('( thnt all I11lllwy originates as :1 eroat ion of the hnnks nnd is only iss\t('ri through industry aSH dl'ht?-A. The Inct remains, of C'()UI'Sl', that thc dcpo,;j(or:, of Canarla 0\\,11 :'(111)(' 82.;')00.000.000 in bank deposits to-day which arc entire]:; free from debt. so far as they are concerned.

plr.Grahnm Ford Towers.}

Q. But form of an Q. The depositors, Q. It 0 body?

Hi!

Q. Not Q. Del Q. Th(

1Jl the Iorm

Q. w-

are ('OI1(,CI'1 depo-i tors : earns them

l\1r. T is concernc

B Q. J t if there if' owed by ('

Q. An annlvsis t1 sulfie ieu! i1 Ot'S; but, ( creel its of

Q. L(, all dobts regard as and oblig:

Q. IV all debts I must sa each othe

Q. I nut of SOl dcnds, an dons was took a ql say that driving n answer I

Q. II ton b)" },

OIl W( all th

,'0 it." (' will that a

social

t they

n that 1'8 and much I-that sity of

of tho ollows: iy and en our cf s are jr()Wlll.g ouey 1S

bt.

11til-nrlcryou

ink that, tion has ,is. If

11 where 1 of our

is nbsolim that

there 18

inks and l'~e, that 1Y which

R41VJ(ING AND COJl.JI EIWE

Q. But they only came into existence so far as they arc concerned in the form of an investment on which interest had to be paid ?-A. Yes,

Q. Therefore they arc not debt-free lllo!lcy?-A. Interest is not paid by the depositors, though.

Q. It. only came into l'xi"lclll'l' Oll the basis of inll';'c4 1)1ing paid by some-

body?

B!j u-. Me/leer:

Q. Not debt-frce in so far as the banks are r-oncerued, is it?-A.?\'o. Q. Debt-claim 1lI00H'Y a~ far as t he banks nrc COIlC('1'l1ccl?-A. Yes.

Q. There i~ such a thing as debt-free money. and that is national currency in the form of subsidiary eoins?--A. And bank dopcsits,

Q. Well, of course, bank deposits arc debt-cbim money as far flo' ilic hanks are concemcd. The ~ub"iclia\'\' coin is debt-free 1II01](,Y.---:\. 80 far as bunk dcp(J'-;itors arc l'onr'C'l'lH'd rhov h'nn 82.500.000,000 whicl: j~ not only deht-frl'e but earns them a certain amount (If interest.

1Ir. TccKI;1c ~Ir. Jaques i~ talking of debt-free 1l101ll'Y in so far as the state is concerned. It does not have to pay any interest after the monov is issued,

H!J JIr. J tiqucs:

Q, I tried to show any debt, of course, requires a cl'editor and a dr-btor. 80 if there if' $2,000.000,000 whirh is owned by pertain people in Canada it is also owed by crrt.ain other people?-A. Yes.

Q. And since the bank; arc: the ~'Olll'ce~ of that money thou in the last analvsis the banks must be the OIVIH'l'S of all (jpbl?-A. Oh. no. The hauks own suffi~ient in the 1'01'111 of investments and loans to be able to rcpav their dcpo"itors ; but, of C'Olll'SC', that only represents a small port.ion of the lotal debts and

credits of the country.

Q. Lot me put it this wav: since that money has \)('cn born as a debt, if all debts were rrpaid tl.crc would not be any money?--A. Monr~' 1 would regard as a medium of cxchang«, and quite rlistinr-t irom the phrasing of debts

and obligations in terms of monev-e-

Q. 'Well, what we call money, or what we use as money is n debt. and if all debts \\'l'IT repaid we would have no money. J think that is ('orl'l'('l?~A. I must say that I do 'lot Icliow that. Would not debts he marked off against. each other in that r-ase? T do not quite follow what that implies.

Q. I have hcl'(' a quarter, which :It. tho present time I 0\\,11; but that. came out of somebody':' taxes which he paid on his wag1'8 0)' his salary or hi~ dividends, and that monoy whieh was \1s('(1 to pay those wages 01' ~alnril'~ or dividens was borrowed from the hanks for that purpose 01' sOlllcbml,'v' sOltlc\\'h('l'e took a quarter to a bank. I think that has been admiHed?-·A.i'\o. I must say that I apologize. T have got tremendollsly cunfused as to \I'hat we are driving at. If there might be some question to which 1 might Iormulat o an

answer I would get along better.

Q. Here is n statement contained in the congl'ct',ional record ul. Wa~hing-

ton by ::\J1'. Binderup, He says:

Yes truly truth is strancer than flct.iou, We are ba~illg our money on the l;eoJlI~'~ debts. If wo" pny OUl' debts. OUl' 11101\('Y di~llp]lCal''', n.nel w will all gn broke. And if wp do not pay OUl' debts, the shoriff tnkcs all We' haw and we will also go hrokc ; so, in principlP. it morcly means that we arc damned if we do and damned if we don't.

459

460

STANDING COMJflTTEE

(

•

::\0\\', you mentioned the veloeity~A. I think when I go over the record of to-dny's procedings that I had better try to put down something in respect to tilat, ifit meets with your approval. I'\lI' . .JluFC~?

Q.Oh. quite, y('~. I do not expect YOll to answer any question that you

do not. understand.

Thr- CUAIR"r AX: It. is 1 o'clock. When shall we meet again? I understand that some of the members would like to be in the house this afternoon.

The Connnittr o adjourned at 1 p.m, to meet again on Tuesday, May 9, at 11 a.in.

[MI'. Graham Ford Towers.)