Zurich Herald, 1945-01-25, Page 3•
THE ,ROYAL BAN OF , CANADA
ANNUAL MEETING
Morris W. Wilson, President, says continued Canadian develop-
ment depends on world-wide system of trading based pn
international monetary and exchange stability. Urges
Canada be one of first to approve principles of Bretton
Woods Conference.
Sydney G. Dobson, Vice -President and General Manager', re-
ports total assets at all.time peak with year's increase
greatest in history of bank; southern branches in unique
position to facilitate Latin-American trade.
The vital importance to Can-
ada's future welfare of a healthy
foreign trade based on internation-
al rnoinetary and exchange stability
;Was. emphasized by Morris W. Wil -
jog, ,President of The Royal Bank
1f Canada at the bank's Annual
Meeting,
Canada owed her economic de-
t>lopment from earliest days, said
r,. Wilson, to foreign trade and
e level of pre-war export's would
lot only have to be maintained after
e,+ war, but actually expanded,
possibly to double their pre-war
vane, if Canada was to secure an
adequate national income.
FOREIGN TRADE PROBLEMS
"Normally we export consider-
ably more to Great Britain and
Other countries of the Empire than
ea import from them. On the other
hand; our imports from the United
States are usually in excess of our
'exports to that country. Under
normal exchange conditions it was
relatively simple to adjust this
Situation. Our sterling balances,
accumulated through exports to the
:Empire, were readily exchangeable
for U.S. dollars with which to pay
for what we purchased in the Un-
ited States.
"War -time experience, however,
has shown the difficulties which
arise when.this multilateral adjust-
ment of trade balances breaks
down. As a result. of the control
of sterling made necessary .by the
,war, Canada has been forced to
depend upon her own devices for
liquidation of British balances
through interest-free, loans, mutual
aid, and the repatriation of Can-
adian securities. We were also
forced to restrict purchases and
travel in the United States, in
order to reduce the demand for U.S.
dollars, thereby making it easier
for us to pay for essential imports.
If the world should be divided into
exclusive trading aCeas after the
war,. as is frequently suggested of
which one :night be based on sterl-
ing and another on the U.S. dollar,
Canada would be in a peculiarly
disadvantageous position since she
properly belongs in neither group.
Our membership in the British
Commonwealth of Nations, and the
coincidence that our unit of cur-
rency is named "dollar" as in the
United States, create an anomalous
situation, and obscure our true
position in the eyes of many. Be-
cause of these factors, and our own
selfish interests, we are compelled
to prefer a world-wide system of
trading. There is no altruism about
it.
CANNOT STAND ALONE
"If international- trade on the
broadest scale is not fully restored,
what can Canada do independently
to preserve her foreign markets?
There are certain obvious 'meas-
ures, notably' maintenance and im-
provement of the quality of our
exports, vigorous salesmanship, and
the acceptance of imports from
countries to which we export, up
to the limit either of their capacity
to sell to us, or of our ability to
absorb their products. These are
basic principles which Canada can
and should adopt, whatever the
rest of the world may do.
"What other alternatives will be
normally avialable to us? In the
first place, we might have to re-
strict our exports to the ability of
foreign markets to pay for our
products. Since many of our ma-
jor export commodities are produc-
ed on a scale out of all proportion
to our own consumption, the sub-
sequent unemployment of men and
resources, the agricultural depres-
sion, and the social problems which
would arise, would build up a load
that our economy and constitution
could not support. Secondly, Can-
ada :night provide credits to coun-
tries desiring to import goods on
a basis similar to the credits 'which
have been established during the
war, but with the hope of ultimate
repayment. Finally, we could sub-
sidize exports.
"Furthermore,, as I stated a year
ago, I believe it would be sound
policy for Canada not only to ex
tend liberal long-term credits to
countries who are actual or poten-
tial buyers of Canadian products,
but in special cases to make out-
right gifts of foods, raw material,
finished goods and machinery to
assist and hasten the rehabilitation
of such countries.
"Thus far could we go, independ-
ently of the policies of other pow-
ers. But a moment of consideration
will show how slight our hopes of
success would be without _ ter• -
national co-operation."
Mr. Wilson reviewed the fttinction
of gold as an international currency
prior to and after the ; last tear bu t
pointed out 'tinct the "gold stand-
ard" was never entirely automatic
in its operation. "The system could
:hover have been mantained,' he
Said, "without the unrivalled su-
premacy of the City of London in
the foreign exchange •and inter-
national investment markets,, the
degree of liquidity it maintained,
the great foreign loans it floated,
the willingness of Great ' Britain
to accept imports of goods and
services for payment on loans and
last but by no tneans least, the
knowledge and experience of the
great London banks and financial
houses.
r .
NATIONS FORSAKE RULES
In the second place, all countries
observed the code of economic
ethics set up by the gold standard.
Fundamental changes in this sys-
tem took place following the last
war, said Mr. Wilson, and the in-
ternational economic system, dis-
rupted by the war, remained out
of balance and . the disequilibrium
became intensified. Countries ceas-
ed to abide by the rules and no
longer sought to adjust their do-
mestic policies to the requirements
of the gold standard sjvstern and
with the breakdown 'and abandon-
ment of the standard in 1931, each
country set out on its own course.
"Instead of adjusting domestic
prices and production to the needs
of international exchange stability
and balanced payments on inter-
national account, countries began to.
manipulate exchange rates, as a
meansof increasing domestic and
foreign trade in order to maintain
employment at home. International
trade became disrupted, with every
country seeking to force its exports
on others, •but to reduce imports
to a minimum. Competitive ex-
change depreciation, higher and
higher tariffs on imports, quanti-
tative quotas and bulk purchases,
and similar measures, were utiliz-
ed by all countries in greater or
less degree. Well over a third of
total world trade was conducted
on a basis of crude barter. With
the collapse of the gold standard,
there disappeared the only oper-
ative system for the co-ordination
of national economic policies; in
its absence, sovereign countries,
acting independently and without
regard for the external repercus-
sions of their policies, inevitably
drifted toward international econ-
omic chaos."
Upon this chaos, said Mr. Wil-
son, had now been 'superimposed
the new disequilibrium of a second
World War. The great importing
countries including Great Britain
and those of 'Europe had suffered
devastation, destruction of their in-
dustrial machinery and, particularly
Great Britain, loss of overseas
markets. Other countries, notably
those of North America, had found
their industries and agriculture
greatly expanded. "In order to
maintain employment," said Mr.
Wilson, "it will be necessary for
these countries and particularly for
Canada,. to export to an extent
greater than was necessary even
before 1939."
BRETTON. WOODS
Mr. Wilson dealt at length with
the Bretton Woods Conference last
July when the experts of forty-
four countries sought to evolve a
system of international control of
foreign exchange . and investment
with a view to providing exchange
stability.' He readily admitted that
the Bretton Woods program was
no panacea for, post-war problems
but he pointed out ' that practical
businessmen were largely in agree-
ment with the Bretton Woods ex-
perts.' Meeting at. Rye, N.Y., last
November, businessmen from fifty-
two countries, including Canada,
recommended a Multilateral Trade
Convention for all countries to pro-
vide for the progressive lowering
of trade barriers; the elimination
of quotas and import embargoes;
the' abandonment of discriminatory
trade practices; the abandonment
of natioria%. sales and production
monopolies.
"It appears to me," said Mr.
Wilson, that the next step in pre-
paration for 'the general , resump-
tion of foreign trade after the war
must be discussions and agreement
between governments on commerc-
ial policy. If some standard of
commercial policy is not establish-
ed prior to the resumption of gen-
eral trading, we may see the con-
tinuance of the predatory practices
of the pre-war era.
"Canadian economic develop-
ment, in the future as in the past,
depends upon the maintenance and
development of international trade.
Monetary 'stability is one 'of the
prerequisites of international trade,
For Canada, therefore, monetary
stability. •i's' of paramount iinport-
ance, if we acknowledge these
premises, our course of action is
clear. We' + must innplemerit the
measures necessary to secure them,
I ,sincerely hope that Canada will
be one of the first to approve the
principles of the Bretton Woods
agreements, , leaving the Govern-
nett free to deal with natters of
detail in consultation and agree-
ment with the other countries con-
cerned,"
GENERAL MANAGER'S
ADDRESS
In presenting the Annual Balauce
• Sheet Sydney Gc'e' Dobson, Vice -
President and General Manager,
pointed out total assets were now
at the, record level of $1,790,251,802,
add that the increase in assets dur-
ing the year was the greatest in
the history of the bank. The liquid
position was exceedingly strong,
he said. Total Liquid Asset repre-
senting 81.62% of the bank's Lia-'
bilities to the Public. Noteworthy
was the increase in the number of
Deposit Account Customers which
now totaled 1,450,000. Profits for
the year after providing for Do-
minion dovernntent Taxes, amount-
ed to $3,82:1,182, art increase of
tlipasmi,
'ON TO BASTO'ONE;!'
Over field microphone, Lt: CoL
Creighton (Abe) Abrams, of Jack-
sonville, Fla., gives the order that
started the Third Army drive that
relieved the heroic 101st Airborne
Division garrison in Bastogne, Col.
Abrams commands the 4th Armored
Division's rescue spearhead.
ACTS IN GREECE
Following signing of truce be-
tween Greek ELAS forces and
the British Army, Gen. Nicholas
Plastiras, Greek premier,, is faced
with task of bringing orderout
of the political chaos that spark-
ed off 40 days of bloody civil
war. Besides premiership, he'
holds portfolios of War, Navy,
Air, Merchant Marine.
Mr. Dobson reported steady de-
velopment .of .the bank's foreign
business in the Caribbean and
South America. "The South Amer-
ican countries," he said, "are po-
tential purchasers of large quanti-
ties' of equipment of all kinds for
modernizing and expanding already
established manufacturing' facilities,
for developing new industries, and
carrying out public works programs.
A growing interest in Canada and
Canadian products is evident, and
• it is hoped that our manufacturers;
exporters, and importers will reci-
procate this interest. Our well-
placed branches are in a unique
position to offer assistance in the
development of trade between La-
tin America and Canada."
TRIBUTE TO STAFF
The General Manager reported
that the staff, not including 'those
in the armed services, now totalled
• 8,205. "In Canada 71% are young
women,' compared with only 21%
in 1939, While the more experienc-
ed officers have been under great
personal pressure, because of the
need to train and help inexper-
ienced newcomers, these new
members, of the staff have learned
quickly, fitted in readily, and per-
formed• splendidly the duties allot-
ted to then'. All of our officers
serve with a sense of public re-
sponsibility as well as of duty to
the bank. •
"Leave of absence for military
service has been granted to 2,255
of our officers since the war start-
ed, of whom 2,154 enlisted frons
Canadian branches. This is equal
to 74% of the Canadian male of-
ficers who were under 45 at the
war's outbreak."
Looking to the problems of the
post-war years, Mr. Dobson stated
that one of the bank's first con-
siderations would be the placing in
satisfactory positions of the mem-
bers of the staff who were serving
in the' various armed services. "This
natter," he said, "is foremost in
our minds and is being given care-
ful study. The affairs of customers
in many cases will undergo great
changes in the transition period
from war production to peacetime
needs. In this transition we shall
>e called upon to play an import-
ant part in assisting financially in
helping to bring about this change.
It may be necessary for us to revise
to some extent the existing practice
'of snaking loans for short terms
only, and in certain circumstances
to consider loans extending over a
period;, of two,, three, or five years
to meet changed conditions.
• "I ` am pot implying that we
should depart from our policy' of
prudent banking, but because. of our
large holdings of readily negotiable
Government securities, we may,
without risk. tie our liquidity, assist
:leserving borrowers with longer
term loans.
"Your bank is strong financially
and exceedingly well equipped to
handle post-war financing, and. we
shall consider it our patriotic duty
to play our full part in assisting
business generally in becoming re-
established."
WHY HOME FRONT MUST TIGHTEN UP
Everything expended on the War Fronts means just that much less for the Home Front, and the
promise of • 1945 is that combat expenditures, some of which are pictured above, will reach hith-
erto unimagined totals. CASUALTIES: Running at the rate of 1,500,000 a year, are expected to
increase as war's tempo speeds up. AMMUNITION: More than two tons of ammunition are fired
every minute of every day- at the Germans alone, with rate of fire increasing. TIRES: Life -spa
of tires in combat is often measured in minutes. As supply lines lengthen, tire requirements will
increase. GASOLINE: Combat reverses, resulting in loss of gas dumps, like that in photo; ever-
increasing mechanized strength and growing air forces, including such gas eaters as B -29s, the huge
new B -32s and other giants will use gas in unprecedented quantities. MECHANIZED EQUIPMENT:
Tanks, trucks, jeeps, ducks, tank destroyers, motorized artillery and other equipment are highly
expendable, as photo of Germans advancing past burning Allied half-track indicates. PLANES: As
enemy's defenses tighten up, plane replacements will be increased.
LST HEADS FOR SHORE AS LUZON IS INVADED
An LST, loaded with troops heads for a Lingayen beach as the invasion of Luzon got under way.
Floats for portable docks can be seen on the side of the landing ship. Other ships stand by, waiting to
send their troops ashore.
DISABLED VETERANS MAY DRIVE
Promise ' that servicemen Who have lost their legs will not be
deprived of the convenience and pleasure of auto driving is seen
in the fact that the two veterans in the photo above have just won
driver's licenses in Georgia. They learned to drive with artifical
limbs at Lawson General Hospital, Atlanta.. At left is a sergeant
of .the Georgia State Patrol, who supervised their successful road
tests.
JUST IN CASE
Advancing cautiously, his rifle held ready just in case it's a trick,
the Allied soldier at left approaems the body of a German in
a snow-covered farm pasture near Bastogne, Belgium.
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of Latin-American coffees.
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