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The Seaforth News, 1953-01-22, Page 2The Annual Meeting of Shareholders The Royal Bank of Canada Free Exchange Rates, Lower T arif fs;G.neral Manager Encouragement of Foreign Investment, Keys to Healthier Economy, Says President Reports Assets Over Urges dollar countries to remove excessive trade barriers and customs formalities. "Canada serves high moral purpose an own self-interest by accepting her present-day responsibilities, Canada's dependence on the world economy, and her respon- sibility to it because of her in - Wrens ed importance in the world avas the main theme of the an - anal address of James Muir, Pre- sident, at the Annual General Meeting of Shareholders of The Royal Bank of Canada. Self-in- terest and high moral purpose, he said, lead in the case of Canada to a common goal: the rehabilita- tion of the world economy, Reli- ance on the free price system, be felt, is prerequisite to the re- moval of numerous obstacles to healthy world trade which exists today. "Unfortunately the world's eco- nomic ills are more easily diag- nosed than cured," said Mr. Muir. a "The most spectacular symptom is, of course, the so-called short- age of dollars which still persists seven years after the end of the Second World War. "'In international trade, goods must be paid for either in the exporter's currency or in funds that are freely convertible into that currency, The world chooses to buy goods and services from the United States and Canada at such a rate that, even with the multitude of restrictions imposed by the importing countries, dol- lar payments for imports exceed dollar earnings from exports by more than $5 billions per year, THE DOLLAR SHORTAGE "Exchange control can check the loss of dollar reserves for a time, but it does nothing to com- bat, indeed it may intensify, the underlying unbalance that causes the dollar drain. In contrast, a tree rate moves automatically to restore balance in the internation- al accounts. "I do not mean to say, nor have 3 ever said, that free exchange rates will solve the whole prob- lem; there is no simple solution, Nevertheless, it is surely unwise to forego the advantages of a free market merely because after its adoption, some problems will still remain, "In the short run, the dollar countries should act without de- lay to remove excessive tariff barriers and customs formalities that now present unnecessary ob- etacles to overseas imports. Can- ada, especially, has much to gain by reducing the preponder- ance of U.S. goods among her im- ports: and at the same time the release in this way of extra dol- lars to overseas countries would tend to reduce Canada's depen- dence on the U.S. export market. "In the long run, an invest- ment programme will be of the greatest importance in correcting the fundamental economic weak- ness that lays our allies open to recurring dollar crises. Briefly, investment may provide relief in three main ways: first, soft -cur- rency countries may concentrate their domestic investments on in- dustries producing dollar -earning exports or producing goods which -otherwise would have to be im- ported from the dollar area; sec- ond, dollar area countries may their foreign invest- s/tont in the same types of in- dustry; and third, the soft -cur- rency countries may make direct dollar -earning investments in the dollar area itself. PROBLEMS OF INVESTMENT "The way to encourage pri- vate investment in underde- veloped countries is not to create another international lending agency but to secure a general elimination or reduction of the present restrictions in these coun- tries on the repatriation of earn- ings, on the capitalization of earnings which are not or can- not be transferred, and on the effective control by its owners over equity capital when the ma- jority interest resides outside the ander-developed countries, "In the last analysis, interna- tional investment and economic development depend upon a change of heart in the under- developed countries themselves. I believe this change will he easier if those countries adopt the short -run monetary and ex- change-rate policies f have al- ready Any easing of the dollar shortage by these means will make it easier to transfer interest, dividends, and. capital sums out of these coun- tries; and the mere power to withdraw will in turn encourage new ,nvestment arid thus create a further improvement in the +'xchange position of these coun- tries. Nevertheless, the will must he there if healthy long -run in- vestment is to he encouraged; and r,n plan or a5lsiance programme "EASY" CREDIT CAN BE COSTLY TO CONSUMER Three devices, Mr. Muir said, had been available to correct the lull in business which had occurred early in 1952. These were tax reductions, price re- ductions, and easier credit terms. Despite some reduc- tions in excise taxes, the effect of the 1952-53 budget had been to impose a heavier over-all burden of taxation; price re- ductions, while they had oc- curred to some extent, played a relatively small part in the revival of trade which took place towards the halfway mark of 1952, It was the third device," he said, "that of easier credit terms, which was apparently chosen by business and gov- ernment as the means to re- store a stronger current of business activity. Consumer credit controls were abolish- ed on May 6th, 1952, and the voluntary restrictions on bank lending were removed, at the suggestion of the Bank of Can- ada, on May 20, 1952. We are experiencing the buoyant ef- fects of these decisions, In- deed, there is some evidence that the declin in activity has been over -corrected, and that inflation has again become a threat to the economy*, "So-called `easy' m consuer credit can be most costly both to the consumer and to the economy as a whole. The ef- fect on sales is immediate and gratifying to business; but re- payment of the debt by the public in the future may well result in an enforced reduc- tion in consumer spending on durable goods to a level quite as low and depressing as that which followed our pre -bud- get buying spree of 1951. If this reduction were to occur along with other deflationary factors, such as heavy inven- tories and a reduction or a levelling -off in armament ex- penditure, our present boom might seem, in retrospect, an unsound and temporary one. indeed the economic pattern today bears no little similari- ty to that of 1928 and 1929. Then, as in 1952, the expan- sion of consumer instalment credit played an important part in increasing sales and maintaining retail prices at a time when raw material prices were on a steady decline. The result then, as in 1952, could only be a concealed inflation with its attendant dangers. "I believe that a sounderprosperity in 1952 would have resulted from greater use of the two other corrective de- vices, namely tax and price re- ductions, These interact with and reinforce one another in promoting a healthy expan- sion; in other words, the ex- pansion they promote will not be based on the shifting sands of consumer credit." or investment institution can serve as a substitute, BASIS FOR OPTIMISM Mr. Muir concluded with an appeal to Canadians to exercise discretion when discussing Can- ada's prospects to their friends in other countries. "It may be pleasant," he said, "to have one's nation regarded highly abroad; but the boom psychology that prompts even small investors in other countries to rush into Can- adian securities should teach us caution. Both, our good repute and our long-term prosperity will be far safer if we do not over- sell Canada now; Let us then temper our private optimism with a little public caution, especially when we are talking to Canada's many friends abroad, "Canada made a valuable con- tribution to the revival of faith in the traditional price mechan- ism when she freed the dollar in September, 1950, and removed all exchange controls a little over a year later. In other countries there are legitimate differences of opinion onwhether or not the time has come to make a similar dash for freedom. But there is a surprising amount of agreement that ultimately this is what must be done. "Our country is young, its eco- nomic system is strong, and its capacity for growth will put our resources of imagination and en- terprise to a severe but welcome test. This is what we should re- member when we become too neatly impressed with the dif• $2.6 Billions T. H. Atkinson, General Man- ager, in reviewing the bank's 1952 report, stated that total assets of The Royal Bank of Canada have now reached the imposing total fo $2,091,456,873. This, he said, was a new high inark in Cana- dian banking history, and is the highest ever reported by any Canadian bank. Deposits likewise had reached record totals, said Mr. Atkinson, They, now stand at $2,527,510,437, an increase of a proximately $176,000,000 over the previous year, "This increase," said Mr. Atkinson, "reflects not only sub- stantially higher balances in the names of former clients but has been accompanied by a record - making number of new names on aur books. The. number of deposit accounts on the books of the bank now exceeds 2,250,000, an in- crease of well over 100,000 during the year." Mr. Atkinson reported profits for the year had increased $1,- 762,382 over the previous year. After providing for taxes, depre- ciation and dividends, including an additional dividend of $875,- 000 (at the rate of 250 per share) the bank transferred 43,000,000 to Reserve Fund, which now stands at $55,000,000. The bank's programme of im- provement. to branches, which has gone on steadily since the end of the war, continued during the year to provide the public and staff with modern, up-to-date facia titles and surroundings. Some 275 benches were provided with new or improved premises, 18 new branches were opened, and a 'rther seven are in the course preparation. ROYAL BANK ABROAD Mr. Atkinson reviewed the history of the bank's extensive organization abroad, pointing out that its - growth had followed ac- tualor potential channels for ane C adian trade development. Of- fices were established only after careful areful survey an the ground to ascertain whether the field was e ad quately banked, and if not, h w ether the bank could not only r se vice Canada's export trade, t bu could contribute something 0u w rthwhile to the business coni - m pity in the particular country an operate on a reasonably pro- fitable basis,toa "The volume of business trans- acted by our foreign branches re- mains very substantial indeed, andprofitable. During the past a ye r, our overseas chain has againmr demonstrated its worth as an im- portant complement to our Can- adianorganization, Not only was s thi so from the standpoint of rct record earnings, but the contri- bution ontri- bu 'on made in the direction of s bu iness to the Canadian field through contacts established abroad was well worth while. he As has been said in our pub- lished reports of previous years, through our extensive overseas direct representation s plu our world-wide relations h wit correspondent banks and the specialized departments we operate'in Canada to aid traders, we are proud of the services wev provide and also of the contribu- tionwe make towards facilitating d tra ers, the value of which can hardly be assessed in a nation c whl h ranks third in world trade. PRAISE FOR STAFF "It is a daily occurrence ind Hes Office to receive letters in- dicating that at one point or an other some member of the staff has gone out of his or her way to deal kindly and thoughtfully with the problems of a client. Public opinion of a bank is by and large the opinion held of in- dividual branches of the bank so that our reputation is largely de- pendent on the deportment and actions of branch personnel. That it is in good hands is amply evi- dent. "An expanding business inevit- ably places increased demands on the staff and in the past year we are well aware that at many points our officers have been faced with difficulties which at the moment may have seemed insurmountable. In no case, how- ever, was there the slightest evi- dence of a breakdown in service to the public and so, on behalf of the executive officers of the bank, I say a heartfelt "thank you" to the staff. In turn, on their behalf, I have no hesitation in assuring the directors and share- holders that the demands of the future will be met by the staff In the efficient, warm and friend- ly manner they have displayed in the past." Scuities still ahead of us. There. is - little excuse for gloom in a ,young country that even now stands eon fidently on the thres- hold of national greatness," S'T'ILL DOPE Major .Putney May took his daughter Patricia to the open- ing of a lavish Broadway musi- cal. To the prissy Major's em- barrassment, the show -was rauc tares and vulgar, Toward the end of act one,. he confessed to his daughter, "I'm sorry I brought you, Pat, This is not a show for a young lady like you." "Don' give up so early, Pop," the. un - ed perturb Pat assured hint. *Maybe the second act will be fivelier," Busy Hummingbird '1'he hovering buntmingbir•d conat.lrot-T. ,hour the same amount of energy es dryers a modern heli- copter, weiirht for .weight, ac- cording to Dr. Oliver Pearson, in an article in The Scicntifle -American. The hummingbird uses us 726 British thermal units of energy per pound per hour, he calculated. The helicopter uses 750 BTU per hour. The humming- bird • lives v s tt t a faster r ata than any other animal, 17i•. Pearson said. The bird eats most of the day and is able to avert starva- tion during -the night only he cause he has the ability to hiber- nate then, No other bird can hi• bcrnate-at night, Dr. Pearson re ported, A rancher's wife who hurried her boy to a San Diego hospital for an emergency appendectomy took along three homing pigeons, As there was no telephone at the ranch eh hoc e the birds car- ried arPied medical reports to the dis- traught father, Bullfighting Beauty—Lovely Maria Tamara Louwe, a 24 -year-old model from Johannesburg, is the latest addition to the short but distinguished list of lady bullfighters. Planning to compete in • the forthcoming bullfighting season in Portugal, she is already training in Lisbon bull rings, 'TABLE TALKS aY have AndDews, Here's a "Ready -Mix" you'll find really worth while, with it on your pantry shelf you can turn out brownies—also crunchy cook- ies and quick cake—in no time at all. You mut add eggs and vanilla to the mix, which also comes in handy to use as the basis of a Fudge Sauce or cake filling, BROWNIE MIX Quickest, easiest way to mix the dry ingredients Ls in a large paper bag. • Sift into bag 4 c. sifted all- purpose flour 4 tsp. baking powder 4 tsp. salt • Mix together 8 e, sugar 21 c. cocoa, sifted ' • Pour into bag. Fold open end over. Grasp both ends and shake back and forth. Pour into, large bowl or dish pan. • Cut in 2 • e. shortening • Store, covered, in a cool place. Makes 16 a-• mix—enough for 8 batches of brownies or 4 batches of cookies. BROWNIES • Beat - 2 eggs • Add . 1 tsp. vanilla 2 c. brownie mix • Blend. Mixture will not be smooth. • Mix in 2;3 c. chopped nuts • Spoon into greased 8 -inch square pan. • Bake in 350° oven 20 to 25 minutes, or until brownies pull away from sides of pan. Makes 16 brownies. BROWNIE QUICK CAKE • Beat 3 egg yolks • Stir in 3 tbisp. milk 1 tsp. vanilla 2 c. brownie mix • Beat until stiff ... 3 egg whites • Fold into batter, • Pour into greased, waxed - paper -lined square pan (8x8x2 inches). • Bake in 350° oven 35 minutes. BROWNIE BAKED ALASKA. • Make 11/2 times brownie recipe. Pour into greased, 9 -inch square pan lined with waxed paper. • Bake in 350° oven 25 ,to 30 minutes, - • Cool; cut in half. Use one half only. • Cover a board (11/2 inch thick, and larger than cake) with three layers of brown paper fey insul- ation. Put cake on the paper. • Add 5 egg whites grad- ually ths c. sugar • Beat until smooth and glossy. • Tel cake with 2 (1 pt.) bricks peppermint stick ice-cream (Ice cream should be frozen solid, and cake should extend 1 inch beyond the ice cream on all sides. See picture above.) • Spread meringue over cake and ice cream; cover completely so ice cream won't melt. * Bake in 450° oven 3 to 5 min- utes, or until meringue browns. Slice and serve at once. Serves 8. BROWNIE CRISPIES • Beat 2 eggs • Stir in 2 tsp. vanilla 4 c. brownie mix • Mix until well blended, • Drop by spoonfuls on greased cookie sheets. • Bake in 375° oven 8 to 10 minutes. Makes 4 dozen cookies, FUDGE SAUCE OR CAKE PILLING • Blend in saucepan 1 c. brownie mix �4 c. water • Cook until thick and smooth, stiring constantly, • Serve hot over ice cream, Or cool, and use as cake topping or as filling for 9 -inch layer cake. ,carer Tariffs To Increase ``rade In his address at the Annual iMMealing of Shareholders reeent- Iy Mr, Jainev Muir, President of '1'Ite. Royal Bank of Canada had some interesting things to say about existing obstacles to for- eign trade, Mr. Muir said, in pa'"1rt am no recent convert to- the view that free exchange rates are today prerequisite to inter- national monetary equilibrium. I have consistently urged ' this policy since January, 1950. I de. ,pot mean to say, nor have I ever said, that free exchange rates will solve the whole problem; there is no simple solution. Nev- ertheless, It is surely unwise to forego the advantages of a free market merely because, after its adoption, some problems will still remain, The greatest pos- sible reliance on the free price system, through a flexible mon- etary and exchange rate policy, is prerequisite to any final re- moval of exchange controls, ins - port restrictions, and other spe- cial obstacles to healthy world trade. "In the short run, the dollar countries should act without de- lay to. remove excessive tariff barriers and customs formalities .thatnow present unnecessary .db$iacles to overseas imports. • Calsada, especially has much to "•gain by reducing the preponder- ie-anent. of U.S, goods among her • :Imp irts; and at the same time the release in this• way of extra dollars to overseas countries would tend to reduce Canada's dependence on the U.S, export market. "In the long run, an invest- ment programme will be of the greatest importance in correcting the fundamental economic weak- ness that lays our allies open to recurring dollar crises. I think of this investment programme, not as an excuse for creating new and high-sounding international institutions, but as a campaign to reduce the absurd obstacles to investment which are nowhere so great as in those countries where capital is needed most. "Canada made a valuable eon- tribution to the revival of faith in the traditional price mechan- ism when she freed the dollar in September, 1950, and removed all exchange controls a little over a year later. We should be proud of the part Canada has played in this return to economic sanity, And, since Canadian economic expansion demands an expand- ing world economy, we should be grateful that, in general, the spirit of economic freedom seems likely more and more to become the spirit of the age, "Of course, so favourable an economic environment may have its disadvantages. It is pleasant to have one's nation regarded so highly abroad; but the boom psychology _that prompts even small investors in other countries to rush into Canadian securities should teach us caution. Both our good repute and our -long-term prosperity will be far safer if we do not oversell Canada now, Let us then temper our private op- timism with a little public cau- tion, especially when we are talk- ing to Canada's many friends Inroad." Nylon things should never be left standing in bluing water, Streaks and spots may gather in the garments. A bluing rinse is safe, however, if used properly, it should be very light because nylon fibres pick up the color quickly. The Fakir Couldn't Help Himself By WADE JONES NEA Staff Correspondent PARIS.—For the last ten years the fakir • Birman had lived in Paris, almost unknown, and al- most forgotten, manufacturing women's corsets. But back in the 30's, black - bearded and turbanned, he reign- ed richly here in a "palace" with Oriental furnishings, many mir- rors, shaded lights and a pool full of baby alligators. In the palace he set on e throne of oak and dispensed ad- vice for a price on l'amour and Is money to thousands,- including many Americans. And when he event out he drove a Mercedes- Benz. He -died violently the other day and many of those - who once flocked to him believe the change between the then and the novo, between the life 01 the turbanned fakir and that of the Corset maker, helped kill him * • The fakir was born as Charles Fosses, 52 years ago in the pro- vincial town of St, Etienne. At 32, he descended- on Paris end set up shop as a costumed fakir of which his version was a sort a1 combined fortune teller and lovelorn editor. At first he dealt almost exclu- sively with personal problems of his clients, handing out secrets, for happiness, particularly on af• fairs sof • the heart, When the national lottery was Fakir Birman: When a husband sued, his "cabinet fell." instituted in France in 1034, the fakir 131rman entered into a new and vastly more remunerative phase,. People began flocking to him Inc advice on the numbers, "My mail 'grew ell of a sud- den," lie once said. "Overnight my clients were more numerous. Only they spoke no more to me of dying love, but of indigestion Crum lottery livings that didn't y a a win," a Entertainers like Maurice Che- valier sang songs about him. this picture was used to sell lottery - tickets, He was on the radio, con- ducted a newspaper column, and appeared on movie screens and at the Tour de France, a bicycle race which is a French national event. By 1039, the fakir s lortune- telling factory employed 20 sec- . rotaries, 65 typists, and he had consoled and scanned the future rot 502,062 clients this own pre- cise figure) at 50 francs a head, or about $1.25. But in that same ;year the fakir predicted himself into trouble. The husband of one of his clients sued him and in the resultant court case, the fakir's bubble • burst. Or as the French put it, "His cabinet fell." - The fakir Birman made a few theatre appearances alter that, but his magic with the public was gone. In 1942 he set up the :*orsct making shop with his .vile, herself an established wo- mrun in the business. .They lived in a handsome apn'lnteht, with their workshop ir, the same building. l-3ut time fakir was never the same there- after, file liegan to be troubled With nightmares and the fear be , was losing hh mind, kle tried to c•onimii. suicide server,) times and he was Watch- ed closely. i3ut the other night he escaped f'r'om his wife, 'went into an adjoining room and hanged himself from a door with an ele r ctrl. cord, 1nh t e Rlbinent at his own greatest need, the man who had given hope to so many could give to himself none.