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�,