CRISIS IS OVER

Poverty Bay Herald, Volume LX, Issue 17977, 3 January 1933, Page 4

CRISIS IS OVER

SAYS CANADIAN BANKER GRAVE PROBLEMS, HOWEVER, AHEAD 'TORONTO, Nov. 18. In a careful and exhaustive review of Canadian financial conditions made at the time of his re-election as president of the Canadian Bankers’ Association, Air. ,T. R. 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 Sta'-cs. there were definite signs of greater industrial activity. “The lowest' point of the depression,” he said, “seems actually to have been roached in June. Conditions now are perceptibly better than they were. ’ ’ But Air. McLeod hedged about his optimism with a warning against undue confidence. One 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 not 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 tho need of some general tariff readjustment, the removal of exchange restrictions, and action on these urgent, matters could not be postponed merely because business was better than in Juno last. Air. McLeod discussed various other topics of financial concern. He looked for the outcome of tho Imperial Economic Conference to givo 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 bo dealt with decisively. Ho discussed proposals for the establishment in Canada of a central bank, and while taking no definite stand at this time,, pointed: out its limitations within the special circumstances 01. this country. INCREASE IN TAXATION Finally Mr. McLeod dealt with Lin a-

tion on the basis of disconcerting facts and comparisons. He told his fello-w bankers that recent research undertaken by the University of Toronto showed that whereas in 1928 out of every dollar of Canadian income no less than .121 cents was collected through federal, provincial and municipal taxation, in 1931 the figure, had risen to 18.1 cents, an increase of 45 per cent. Moreover the deadweight burden of debt charges had changed for the worse, from the standpoint of the taxpayer. Taking thb aggregate of interest on non self-supporting capital expenditures, together with Government liabilities through Canadian Na-tional-Railway deficits, and regarding this aggregate as "burdensome debt," ho found that in 1928 these charges amounted to 3 per cent, of the national income and absorbed 24 per cent, of all revenue from taxation. In 1931 these charges had grown to GJ por 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, ho mentioned, budgets were not being balanced, new debts were incurred. Tho remedy was, of course, simple in words and difficult in plication— drastic economies in Government services of all sorts.