U.S. GRIP OF CANADA.

Hawera Star, Volume XLVI, 22 January 1927, Page 7

U.S. GRIP OF CANADA.

CONTROL OF INDUSTRIES. TIMID BRITISH. INVESTORS. The following is the fifth of a. series of articles from Sit' Percival Phillips, special correspondent of the London Daily Mail, who is on a tour of investigation in Canada to describe for the. information of the British public the almost inexhaustible possibilities of that great Dominion and its future development. One aspect of the development or Canada, usually surprising and frequentlv disquieting to inquirers from Great Britain, is the dominant part played by American capital. Since the outbreak of the war. when British investment in the Dominion was three times as great as that of the United States, the latter has increased her holdings 276 per rent, and to-day her citizens have more money tied up in Canadian enterprises than in any other foreign conutry except Cuba. This steady influx of American capital is an expression of confidence in the future of Canada, and not, as superficial observers migflit conclude, a. sinister attempt to fetter _ her with chains of gold as a preliminary to annexation.

No political sentiment underlies the purchase of Canadian securities. The American banker and investor look northward with the cold, hard eye of business. They want profits. not provinces. Moreover, the underlying reason which nvompts this lavish outpouring ~F >...st-var wealth is confidence in the «i ability and honesty of Canada’s system of government as well as in the industrial resources of the Dominion. \ (dance at the conditions which nrevail in many parts of the United Mato, justifies the belief that her investment experts have not the same alddin>( faith in their own legislators and pillars of the Mate. PER. CENT AMERICAN.

The growth of American investment iu Canada lias in consequence been phenomenal, while Biitish investment has- remained almost stationary. Look at it this way: In 19J6 Americans held 17 per cent of the foreign investments in Canada; to-day they hold 53 per cent. Before the war Canadian capital requirements approximated £-50.000.000 annually. and the greater part was obtained in Great Britain. In 1910 81 •Kr out of Canadian securities were I Loosed of in that market. Since 1920 the bulk of new issues lias been fa Km care of on this continent.

American capital controls- the pulp hi inhering industries. If has more th-.-n £00.009.000 in pulp and paper, .uo-e than £-10.000.000 in mines. £BO.'VKt.O'V' in railways, and more than £190.009.000 in general industries. i bout 1209 American industries of •m-ioiis kinds have established branches ill the Dominion, and' more if'o iii contemplation. The Union Trust Company of Pittsburg. one of the largest organisations of the kind in the United States, wbi'-li has at its real head MV A. AA r . Mellon. Secretarv of the Treasury.

•-'■(■lit lv invited subscriiptions for some new Canadian bond issues oil behalf of the Canadian Pacifi • Railwav. the Gatineau Power Company, the Duke-Price Power Company, and Mi*> Canadian Steamship Company, tbe demand was. far greater than tbor could satisfy. I asked one investment banker from a manufacturing town in AY r is~ -onsin why his clients were so keen on Canadian investments. He said : “Because we in the United States believe in Riveting in any form of enterprise which means the development <>" power. AA’e look on Canada as being in future the- wealthiest uart of this continent.”

Du every side I have hoard Canadian bunkers and business men oxpress regret that American and not British capital lias secured the domimim position. fiL'hev realise tha,t Jieal- Britain is not in a position to in-.esi as heavily as before the war, yet they cannot- understand the apathy of her investors in recent .ears icgarding the possibilities in Canada, Bankers think that t-lic dearth of British capital may be due, at least in part, to the misfortunes of some uid-ly advised investors. If so, it should be known that proper precaution- will prevent the sinking of money in schemes which are either obvious! v fraudulent or unlikely to sin ceed. It i- an easy matter lor investors in Great Britain to safeguard themselves against being swindled by semi ing information from reputable Canadian banking and investment■oases. The peddling of doubtful seen li ties is an industry which will never die. but it can be forced out if -a prospective market, as Jacob Factor and his gang of American sharpers were forced out of England a few months ago. if investors tempted by “get rich” Canadian schemes will first satisfy themselves ol their soundness.