Loading...
HomeMy WebLinkAboutZurich Herald, 1953-01-22, Page 21 The Annual feeting Meetingof Shareholders ri R 1 a an B e � van z ' 0 Frame Exchange Rates, Lower Tariffs, Encouragement of Foreign Investment, Keys to Healthier Economy, Says President Urges dollar countries to remove excessive trade barriers and customs formalities, "Canada serves high moral purpose and 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- creased importance in the world was the main theme of the an- nual address of James Muir, Pre- ad.dent, at the Annual General Meeting of Shareholders of The Royal Bank of Canada. Self-in- terest and high moral purpose, he staid, lead in the ease of Canada 8o a common goal: the rehabilita- tion of the world economy. Reli- sauce on the free price system, he 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- saozed than cured," said Mr. Muir. "The most spectacular symptom le, of course, the so-called short- age of dollars' which still persists eeven 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 tllaat 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 free rate moves automatically to restore balance in the internation- al accounts. "I do not mean to say, nor have I 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 option, some problems will still am gin. "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- stacles 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- saess that lays our allies open to recurring dollar crises. Briefly, investment may provide relief in t?aree main ways: first, soft -cur- rency countries may concentrate their domestic investments en in- dustries producing dollar -earning oxports or producing goods which a&fherwise would have to be im- ported from the dollar area; sec- ond, dollar area countries may concentrate their foreign invest- ment 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 tos encourage • pri- vate investment in under -de- veloped countries is not to create another international lending eenas cy but to secure a general nation or reduction of the resent restrictions in these coun- tries on the repatriation of earn- ings, on the capitalization of earnings which are not or can - net be transferred, and on the effective control by its owners over equity capital when the ma- 2ority interest resides outside the sander -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 be easier if those countries adopt the short -run monetary and ex- change-rate policies I have al- ready discussed. 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 investment and thus create ai further improvement in the exehange position of these coun- tries. Nevertheless, the will must be there if healthy long -run in- vestment is to be encouraged; and no plan or assistance 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 hi 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' consumer 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- paymentof 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- toriee and et reduction Pr a welling 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. importaitt 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 sounder prosperity 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." er 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 on whether 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 greatly impressed With the dif- I Cana a General Manager Reports .Assets Over $2.6 .Billions T. li, 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 $2,691,456,873. This, he said, was a new high mark 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 approximately $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 our 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 divfdencl.,of $875,- 000 (at the rate of 25e per share) the bank transferred $3,000,000 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 faci- lities and surroundings. Some 275 benches were provided with new or improved premises, 18 new branches were opened, and a further seven are in the course of preparation. ROYAL BA.NIit ABROAD Mr. Atkinson reviewed the history of the bank's extensive organization abroad, pointing out that its growth had followed ac- • tual or potential channels for Canadian trade development. Of- fices were established only after a careful survey on the ground to ascertain whether the field was adequately banked, and if not, whether the bank could not only service Canada's export trade, but could contribute something worthwhile to the business com- munity in the particular country and operate on a reasonably pro- fitable basis. "The volume of business trans- acted by our foreign branches re • - mains very substantial indeed, and profitable. During the past year, our overseas chain has again demonetratea a�ttpxth as.az, -poreanf comple chit to our Can- adian, organization. Not only was this so from the standpoint of record earnings, but the contri- bution made in the direction of business to the Canadian field through contacts established abroad was well worth while. As has been said in our pub- lished reports of previous years, through our extensive overseas direct representation plus our world-wide relations with correspondent banks and the specialized departments we operate in Canada to aid traders, we are proud of the services we provide and also of the contribu- tion we make towards facilitating traders, the value of which can hardly be assessed in a nation which ranks third in world trade. PRAISE FOR STAFF "It is a daily occurrence in Head 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- eeer, 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. 1. 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." acuities still ahead of us. There is little excuse for gloom in a young country that even now stands confidently on the thres- hold of national greatness." STILL EIOPE Major Putney May took his daughter Patricia to the open- ing of a lavish Broadway musi- esat. To the prissy Major's em- barrassment, the show was rauc- ous 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't give up so early, Pop," the un- perturbed Pat assured hint. Maybe the second act will be liveli.er." Busy Hummingbird. The hovering hummingbird consumes about the same amount of energy as does a modern heli- copter, weight for weight, ac- cording to Dr. Oliver Pearson, in an article in The Scientific American. The hunYmingbird 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 at a faster' rate • than any other ,animal, Dr, Pearson said. The bird eats most of the day and is able to avert starva- tion during the night only be- cause he has the ability to hiber- nate then. No other bird can hi- bernate 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 home, the birds car- ried :medical reports to the dis- traught father. 8sttfiting Beauty—Lovely Maria Tamara Loewe, a 24 -year-old Moder-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 k already training in Lisbon bull rings. S'exe's a "Ready -Mix" you'll finei,';xeally worth while, with it ion 3 us ,j antry shelf you can turn scut ,brovinies—also crunchy cook- ies,and:. quick cake—in no time a all. You must add eggs and rarailla' to the mix, which also :comes In handy to use as the "`basis;. of a Fudge Sauce or cake filling, lt;ROWNYE MIX %iickest, easiest way to mix the 'dry ingredients is in a large paper' bag. a Sift into bag 4 c. sited all- purpose flour 4 esp. baking powder 4 tsp. salt P. Mix together 8 c. sugar 21 siftto edcocoa, 'e Pour into bag. Fold open end over, Grasp both ends and shake br ' u't -.forth. Pour into lakge::, bowl or dish pan. Cut in 2 c. shortening a Store, covered, in a cool place. Makes 16 c. mix—enough for 8 batches of brownies or 4 batches of cookies. B)Et0'P( NXES e Beat 2 eggs e" Add 1 tsp. vanilla 2 e. brownie mix • Blend, Mixture will not be smooth. iso Mix in % c. chopped nuts sa Spoon into greased 8 -inch square pan. is Bake in 350° oven 20 to 25 minutes, or until brownies pull away from sides of pan. Makes 16 bro vnies. BROWNIE QUICK CAKE. a Beat 3 egg yolks * Stir in 3 tblsp. a axilk 1 tsp. vanilla 2 c. brownie role 0 Beat until stiff ....3 egg whites * Fold into batter. • a Pour into greased, waxed-. ... .... ,,„.. paper -lined square pan (8x8x2 inches). as Bake in 350° oven 35 mintitee. BROWNIE BAKED ALASKA. 0 Make 1/ times brownie recipe. Pour into greased, 9 -inch square pan lined with waxed paper. 0 Bake in 350° oven 25 to 30 minutes. • Cool; cut in half. Use one half only. is Cover a board (1112 inch thick, and larger than cake) with three layers of brown paper for insul- ation. Put cake on the paper. 0 'neat 5 egg whites Add grad- ually % e. sugar Beat until smooth and glossy. 0 Tot cake with 2 (1 pt.) bricks peppermint stick ice cream (Ice ere should be fe solid, aril cake Shotdd. extend ? --f iel2 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 CRISFIES axl Beat 2 eggs an Stir in 2 tsp. vanilla 4 c. brownie arsix * Mix until well blended. 0 Drop by spoonfuls on greased cookie sheets. le Bake in 375° oven 8 to 10 minutes. Makes 4 dozen cookies. FUDGE SAUCE OR CAKE FILLING * Blend in saucepan 1 c. brownie mix ?! e. 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. elr " a riffs ow 1`u Increase Trade In his address at the Annual Meeting of Shareholders recent- ly Mr. James Muir, President of The Royal Bank of 'Canada had some interesting things to say about existing obstacles to for- eign. trade. Mr, Muir said, in part: "I 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 do not mean to say, nor have 31 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, im- 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 that now present unnecessary obstacles to overseas imports. Canada, especially has much to gain by reducing the preponder- ance of U.S. goods among her imports; 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 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. We should be proud of the part Canada has played in this return to economic sanity. And, since Canadianeconomic 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 alz 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 abroad." 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., tt. • i rtat> S jryrs aLra. %, „1 e,ri".ca, i 4 :`$ --A •1 '�i THE HOUSE OF 8EAGRAM MEN WHO TUNIC OF TOMORROW PRACTISE MODERA' lON TODAY www•ra�r.ie+,rnnu.i,yl.w..wwly.MMM�mw.+nwn.rnp,nkrm�+nnp.w..+caw+.ImwAb.hitla,dawwpa„sluWtYAf,u�M,MNe�Mv�+lw�,