CRISIS PAST

Evening Post, Volume CXV, Issue 24, 30 January 1933, Page 9

CRISIS PAST

A CANADIAN OPINION

HOPE FOR THE FUTURE

In an. exhaustive review of Canadian financial conditions made at the time of "his re-election as president of the Canadian Bankers' Association, Mr. J. A. McLeod, general manager of the Bank of Nova Scotia, declared he believed the worst of the financial crisis had passed, and that, both in Canada and the United States, there were definite signs of greater industrial activity. But Mr. McLeod hedged about his optimism with a warning against undue confidence. "We could not be sure," he said, "that the sustained recovery so long, awaited was actually under way." The factors principally responsible for the depression were still active, and, being of international origin and scope, did pot respond to local remedial measures. The pressing problem of war debts remained unsettled, and until some solution for it was found there could be no assurance of complete recovery. Added to this factor was the need of some general tariff readjustment, tho removal of exchange restrictions, etc. Mr. McLeod discussed various other topics of financial concern. He looked for the outcome of the Imperial Economic Conference to give an effective stimulus to Empire trade, and regarded it as a forerunner of the World Economic Conference which must effect a settlement of great outstanding international problems. He pointed out that the railway problem in Canada was a very serious one, and must be dealt with decisively. He discussed proposals for establishment in Canada of a central bank, and while taking no definite stand at'this time, pointed out its limitations within the special circumstances of Canada. THE TAXATION BURDEN. _ Finally Mr. McLeod dealt with taxation on the basis of disconcerting facts and comparisons. Ho told his fellowbankers that recent research undertaken by the University of Toronto showed that whereas in 1923 out of every dollar of Canadian income no less than 12} cents was collected through Federal, provincial, and municipal taxation, in 1031 the figure had risen to 18.1 cents, an increase of 45 per cent. Moreover tho deadweight burden of debt charges had changed for the worse, from tho standpoint of the taxpayer. Taking the aggregate of interest on non-self-supporting capital expenditure, through Canadian National Railway deficits, and regarding this aggregate as "burdensome debt," he found that in 1928 these charges amounted to .3 per cent, of the national income and absorbed ."4 per cent, of all revenue from taxation:* In 1931 these charges had grown to 6. per cent, of all income and absorbed more than 35 per cent, of the proceeds of taxation. Mr. McLeod' called these statistics "startling and depressing," and yet, he mentioned, Budgets were not being balanced, new debts wero incurred. Tho remedy was, of course, siniplo in. words and difficult in application—drastic economies in Government services of all sorts.