THE SITUATION
In Canadian Trade and Finance
(From Reports of the Union Bank)
THE Canadian official record shows that the increase of wholesale prices of all commodities reached in May, 1920, over the average prices of the year 1913, was 163 per cent, and that, as between the figures for May and December, a decline of almost fifteen per cent. was recorded. The decline was especially noticeable in the prices for grains, fresh vegetables, breadstuffs, tea, coffee and sugar; certain items in the textile group–cotton, silks and jutes, also show declines.
Canada’s Volume of Trade Increases Half Billion
Notwithstanding the fact that an adverse balance will be shown for the first time since the outbreak of the war, the year 1920 was a record one so far as the total trade of Canada is concerned. Statistics for the twelve months ending October, 1920 (the latest figures available), show that the total volume of trade amounted to $2,603,423,987, an increase of $500,000,000 as compared with the previous twelve months’ period. The unfortunate feature, however, is the excess of imports amounting to more than seventy-five million dollars, which compares with a favorable balance of about three hundred and fifty millions for the twelve months ending October, 1919. Practically the whole of the half billion dollar increase in the total volume of trade is due to the growth of our imports for our export increase amounted to approximately only eleven million dollars. The important feature of the statistics is the record of our buying and selling with the United Kingdom and the United States. Compared with last year, our imports from the United Kingdom have increased to the extent of nearly one hundred fifty millions.
Canadian Banking System Demonstrates Merit
On account of the fact that practically all the business of Canada is transacted through its banks, the Canadian Banking System enjoys a unique position compared with the systems of other countries, and accordingly the statement of the Chartered Banks of Canada for the year ending October, 1920, reflects better than any other medium, the actual business condition of this country.
LOADING the boats at an H.B.C. inland post. The start of a long journey to the great auction market in London.
Banks Curtailed Credit to Stabilize Business
Much has been said and written in criticism of the policy of the banks in curtailing credit, but there is not the least doubt that the present comparatively favorable condition of Canada is due in good part to the continuous pressure that has been exercised by the banks, throughout the year, to restrict advances.
Notwithstanding this effort on the part of the banks, current loans are higher by three hundred million dollars than they were a year ago. If a conservative policy had not been adopted, the increase in loans would have been considerably greater; as it stands, the increase is balanced by a corresponding decrease in holdings of Government securities, acquired originally in connection with the Dominion and Imperial Governments’ war financing, and now redeemed.
