DEBT REPAYMENT

Evening Post, Volume CV, Issue 89, 14 April 1923, Page 20

DEBT REPAYMENT

SUGGESTION FROM A COMPANY CHAIRMAN

BUILDING UP A DOLLAR RESER.VE IN CANADA.

Presiding at the twenty-sixth annual general meeting of Bovril, Ltd., Six George Lawson Johnston congratulated the shareholders on the record results of the past year's trading, and on the strength of the- position the company had now attained, says the' "Daily Telegraph." The net profits were £305,709, or £56,603 more than for the previous year. ■■ Apparently the repayment of the war. debt to America was to be an important factor in their taxation, for the next sixty years, said the chairman, when dealing with tho annual report. When he saw them last year he had just returned from the States, and he mentioied to them how .seriously our debt position had been worsened owing to Congress having by law fixed the period of repayment and the interest. Th.6 most serious factor in the matter as now arranged ia that we must pay capital and interest .in United States dollars. It was generally admitted that the improvement ia exchange .from the British sovereign point of view during the iast year was not so much on account of an improved tr;ide balance, as on account of American purchases of, British securities. Such securities, if interest-bearing, must eventually mean still further sums going from this country to the United States. There could be little doubt, that. efforts to pay America by direct remittance would. turn exchange against us and seriously jncreasa tho number of pounds we should have to pay per annum, and, unfortunately, it would be just during our worst period of depression and bad trade that we should have to pay most pounds to buy the dollars. He would like to put forward _ a suggestion which might assist in this matter. It was that we should build up in Canada a reserve towards the payment of the American debt. The Canadian and United States dollar were not likely to vary ,seriously in' value, therefore any fund we could build up in the Dominion would be comparatively free from exchange fluctuations. Canada was capable of being developed at a much more rapid pace than the present capital and man-power at its disposal could develop it. Our Government could now 'borrow at a lower rate than it has been able to do for a good many years. If it could obtain grants of land from Can-' ada, it could "utilise, say, one. hundred million pounds in developing wheatareas, and probably certain industries in that Dominion; and this work, in conjunction with soms considerable emigration scheme of selected unemployed, should develop in Canada a reproductive asset that would, alter a while, annually supply dollars towards the payment to the States. Furthermore, • every bushel of wheat bo-.ight from Canada .instead of from the States would help to keep our exchange better with the latter. We might thus accelerate the pace at which Canada was growing strong, and at the same time build up an asset that would much reduce the burden of the American debt, and probably, in the process, some of the money we provided would purchase from our' manufacturers agricultural implements and other machinery, etc.