FINANCE IN CANADA

Wanganui Chronicle, Volume 77, Issue 35, 10 February 1934, Page 10

FINANCE IN CANADA

PRAIRIE PREMIERS’ PLAN LOANS FOR PROVINCES EMPLOYMENT AND INSURANCE VANCOUVER, Dec. 20. The first conference of Premiers of Western Canada, which has just concluded its sittings in Victoria, is the genesis of a fighj 4 to be carried on by a united bloc of Provinces, west of tho Great Lakes, to secure better terms from finaneially-powerful, industrialised Eastern Canada. The leader of this new movement is the new Liberal Premier of British Columbia, Mr T. D. Pattullo, and ho is being ably seconded by the Premiers of the Canadian Prairie:—Mr Brownlee, of Albert, Mr Anderson, of Saskatchewan, and Mr Bracken, of Manitoba. The boom and crash period that ended in 1929 brought more hardship to the West, by virtue of its dependence on primary industries, whose roots lay in the soil. Prices pf farm produces, minerals, lumber, and fish “went on the toboggan.” Finance to keep them going was available, but at ruinous rates of interest. The Prairie Governments came to the aid of wheat when the price fell from a dollar and a-half to half a dollar a bushel, and, when their resources gave out, tho Federal Government saved Canada’s major primary industry. The remainder —minerals, lumber and fish —were tho victims of tariffs, competition by Japan and Russia, and the decline in buying that spread over the world during tho depression. Boom and Cheap Money. The era of boom and cheap money left their legacy of high interest rates and abnormal fixed charges. From 20 to 40 per cent, of public revenue is now needed to meet interest on public indebtedness. Such a hopeless outlook moved Mr Pattullo to cast longing eyes on the world’s financial centres, in the hope of converting the obligations of British Columbia to a lower interest. The need for consulting the Prairie Premiers on the ‘common problem of unemployment relief led to the plan being ramified into the wider field of refunding the debts of the whole of the West. This was but a step to concerted action, which stirred the conference to issue a Premiers’ Plan for Western Canada, on which the cooperation of the Government of Canada is now being sought.

Tho principal points of the plan are as follows: —(1) Conversion of the whole or part of the public debt of Western Canada at lower rates of interest; (2) loans for provinces, municipalities and industries, at cheaper than prevailing interest rates; (3) all-Canada scheme of contributory unemployment insurance, with the necessary amendment in the federal constitution; (4) a federal public works programme, based on the national credit —with Currency inflation, if it be found necessary; (5) federal responsibility for unmarried transient labour, until the benefits of insurance can take care of it. Inflation Opposed. The Dominion Prime Minister, Mr Bennett, has set his face, sternly and inexorably, against inflation, and may be expected to continue to frown on the proposal. But Mr Bennett’s outlook, in the federal sphere, has improved at a greater proportionate rate than that of the Western Provinces. Federal interest obligations in New York have been reduced, as the Canadian dollar has risen from a discount of 20 per cent, to par with the United States dollar. His obligations to the wheat stabilisation fund have vanished for the same reason.

Mr Bennett’s natural desire to help the younger, growing western Provinces will be enhanced by the establishment of a central bank by the House of Commons at Ottawa next session. He will then have the aid of an institution that can assume responsibility for currency and credit, with the agreeable prospect that all financing, federal and provincial, can be carried on by one authority, removed from party politics, backed by the nation’s resources.