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•9 .» V » > * *- A t :V * •r > THE ROiYAL BANK OF CANADA ANNUAL MEETING <y : â€" Morris W. Wilson, President, says continued Canadian develop* roent depends on world-wide system of trading based on international monetary and exchange stability. Urges Canada be one of first to approve principles of Brelton Woods Conference. 'ON TO BASTOGNE!' Sydney G. Dobson, Vice-President and General Manager, re- ports total assets at all-time peak with year's increase greatest in history of bank; southern branches in unique position to facilitate Latin-American trade. The vital importance to Can- ada's future welfare of a healthy foreign trade based on internation- al monetary and exchange stability was emphasized by Morris W. Wil- son, President of The Royal Bank of Canada at the bank's Annual Meeting. Canada owed her economic de- volopment from earliest days, said 'njilr. Wilson, to foreign trade and ^c level of^e-war exports would ncft only havifto be maintained after the war, but actually expanded, possibly to double their pre-war value, if Canada was to secure an adequate na^nal income. FOREIGN TRADE PROBLEMS "Normally we export consider- ably more to Great Britain and other countries of the Empire than we import from them. On the other hand, our imports from the United States are usually in excess of our exports to that country. Under normal exchange conditions it was relatively simple to adjust this situation. Our sterling balances, accumulated through exports to the Empire, were readily exchangeable for U.S. dollars with which to pay for what we purchased in the Un- ited Stales. "War-time experience, however, has shown the difficulties which arise when this multilateral adjust- ment of trade balances breaks down. As a result of the control of sterling made necessary by the war, Canada has' been forced to depend upon her own devices for liquidation of British balances, through interest-free loans, mutual aid, and the repatriation of Can- adian securities. We were also forced to restrict purchases and travel in the United States, in order to reduce the demand for U.S. dollars, thereby making it easier for us to pay for essential imports. If the world should be divided into exclusive trading areas after the war, as is frequently suggested of which one might be based on sterl- ing and another on the U.S. dollar, Canada would be in a peculiarly disadvantageous position since she properly belongs in neither group. Our membership in the British Commonwealth of Nations, and the coincidence that our unit of cur- rency is named "dollar" as in the United States, create an anomalous situation, and obscure our true -position in the eyes of many. Be- cause of these factors, and our own selfish interests, we are compelled to prefer a world-wide system of trading. There is no altruism about it. CANNOT STAND ALONE "If international trade on the broadest scale is not fully restored, what can Canada do independently to preserve her foreign markets? There are certain obvious meas- ures, notably maintenance and im- provement of the quahty of our exports, vigorous salesmanship, and the acceptance of imports from countries to which we export, up to the limit either of their capacity to sell to us, or of our ability to absorb their products. These are basic principles which Canada can and should adopt, whatever the rest of the world may do. "What other alternatives will be normally avialable to us? In the first place, we might have to re- strict our exports to the ability of foreign markets to pay for ' our products. Since many of our ma- jor export commodities ate produc- •ed on a scale out of all proportion to our own consumption, the sub- sequent unemployment of men and resources, the agricultural depres- sion, and the social problems which would arise, would build up a load that our economy and constitution could not support. Secondly, Can- ada might provide credits to coun- tries desiring to import goods on a basis similar to the credits which have been established during the war, but with the hope of ultimate repayment. Finally, we could sub- sidize exports. "Furthermore, as I stated a year ago, 'I believe it would be sound policy for Canada not only to ex- tend liberal long-term credits to countries who are actual or poten- tial buyers of Canadian products, but in special cases to make^ out- right gifts of foods, raw material, finished goods and machinery to assist and hasten the rehabilitation of such countries. "Thus far could we go, independ- â- ently of the policies of other pow- ers. But a moment of consideration will show how slight our hopes of success would be without inter- national co-operation.' Mr. Wilson reviewed the function of gold as an international currency prior to and after the last war but pointed out that the "gold stand- ard" was never entirely automatic in its operation. "The system could jiever have been mantained," he said, "without the unrivalled su- premacy of the City of London in t!ie foreign e.xchange and intcr- natioual investment markets, the degree of liquidity it maintained, the great foreign loans it floated, the willingness of Great Britain to accept imports of goods and services for payment on loans and last but by no means least, the knowledge and experience of ths s;reat London banks and financial aouses. NATIONS FORSAKE RULES in the second place, all countries observed the code of economic ethics set up by the gold standard. Fundamental changes in this sys- tem took place following the last war, said Mr. Wilson, and the in- ternational economic system, dis- rupted by the war, remained out of balance and the disequilibrium became intensified. Countries ceas- ed to abide by the rules and no longer sought to adjust their do- mestic policies to the requirements of the gold standard system and with the breakdown and abandon- ment of the standard in I9;il, each country set out on its own course "Instead of adjusting domestic prices and production to the needs of international exchange stability and balanced payments on inter- national account, countries began to manipulate exchange rates, as • means of increasing domestic and foreign trade in order to maintain employment at home. International trade became disrupted, with every country seeking to force its exports on others, but to reduce imports to a minimum. Competitive ex- change depreciation, higher and higher tariffs on imports, quanti- tative quotas and bulk purchases, and similar measures, were utiliz- ed by all countries in greater or less degree. Well over a third of total world trade was conducted on a basis of crude barter. With the collapse of the gold standard, there disappeared the only oper- ative system for the co-ordination of national economic policies; in its absence, sovereign countries, acting independently and without regard for the external repercus- sions of their policies, inevitably drifted toward international econ- omic chaos." Upon this chaos, said Mr. Wil- son, had now been superimposed the new disequihbrium of a second World War. The great importing countries including Great Britain and those of Europe had suffered devastation, destruction of their in- dustrial machinery and, particularly Great Britain, loss of overseas markets. Other countries, notably those of North America, had found their industries and agriculture greatly expanded. "In order to maintain employment," said Mr. Wilson, "it will be necessary for these countries and particularly for Canada, to- e.xport to an extent greater than was necessary even before 1939." BRETTON WOODS Mr. Wilson dealt at length with the Bretton Woods Conference last July when the experts of forty- four countries sought to evolve a system of international control of foreign exchange and investment with a view to providing exchange stabiUty. He readily admitted that the Bretton Woods program was no panacea for post-war problem* but he pointed out that practical businessmen were largely in agree- ment with the Bretton Woods ex- perts. Meeting at Rye, N.Y., last November, businessmen from fifty- two countries, including Canada, recommended a Multilateral Trade Convention for all countries to pro- vide for the progressive lowering of trade barriers; the elimination of quotas and import embargoes; the abandonment of discriminatory trade practices; the abandonment of national sales and production monopolies. "It appears to me," said Mr. Wilson, "that the next step in pre- paration for the general resump- tion of foreign trade after the war must be discussions and agreement between governments on commerc- ial policy. If some standard of commercial policy is not establish- ed prior to the resumption of gen- eral trading, we may see the con- tinuance ot tlie predatory practices of the pre-war era. "Canadian economic develop- ment, in the future as in the past, depends upon the maintenance ana developnu-nt of international trade. Monclaiv stability is one of the prerequi>a(.s of international trade. For (. aiuida, therefore, monetary stabili.y is of paramount import- ance, ii we acknowledge these premise.^, our course of action is clear. \s c must implement the measures nc'cssary to secure them. I sincerely hope that Canada will be one of the first to approve the principles of the Bretton Woods agreements, leaving the Govern- ment free to deal with matters of detail in consultation and agree- ment with the other countries con- cerned." GENERAL MANAGER'S ADDRESS In presenting the Annual Balance Sheet Sydney G. Uobsoii, Vice- President and General Manager, pointed out total assets were now at the record level of $1,790,251,80», and that the increase in assets dur- ing the year was the greatest in the history of the bank. The liquid position was exceedingly strong, he said. Total Liquid Asset repre- senting 81.63% of the bank's Lia- bilities to the Public. Noteworthy was the increase in the number of Deposit Account Customers which now totaled 1,450,000. Profits for the year, after providing for Do- minion Government Taxe5, amount- ed to 13,831,183, an increase of Over field microphone, Lt.-CoL Creighton (Abe) Abrams, of Jack- sonville, Fla., gives the order that started the 'Third Army drive that relieved the heroic 101st Airborne Division garrison in Bastogne. CoL Abrams coimnands the 4th Armored Division's rescue spearhead. ACTS IN GREECE V/HY HOME FRONT MUST TIGHTEN UP ♦- Following signing of truce be- tween Greek ELAS forces and the British Army, Gen. Nicholas Plastiras, Greek premier, is faced with task of bringing order out of the political chaos that spark- ed off 40 days of bloody civil war. Besides premiership, he holds portfolios of War, Navy, Air, Merchant Marine. Mr. Dobson reported steady de- velopment _ of the bank's foreign business in the Caribbean and South America. "The South .\mer- ican countries," he said, "are po- tential purchasers of large quanti- ties of equipment of all kinds for modernizing and expanding already established manufacturing facilities, for developing new industries, and carrying out public works programs. A growing interest in Caiiada and Canadian products is evident, and it is hoped that our raanaiacturers, exporters, and importers will reci- procate this interest. Our well- placed branches are in a unique position to offer assistance in the development of trade between La- tin America and Canada." TRIBUTE TO STAFF Tiie General Manager reported that the staff, not including those in the armed services, now totalled 8,205. "In Canada 71% are young women, compared with only 21% in 1939. While the more experienc- ed officers have been under great personal pressure, because of the need to train and help inexper- ienced newcomers, these new members of the staff have learned quickly, fitted in readil>, and per- formed splendidly the duties allot- ted to them. .\\\ of our officers serve with a sense of public re- sponsibility as well as of duty to the bank. "Leave of absence for military service has been granted to 2,35S of our officers since the war start- ed, of whom 3,1S4 enlisted from Canadian branches. This is equal to 74% of the Canadian male of- ficers who were under 45 at the war's outbreak.' Looking to the problems of the post-war years, Mr. Dobson stated that one of the bank's first con- siderations would be the placing in satisfactory positions of the mem- bers of the staff who were serving in the various armed services. "Thii matter," he said, "is foremost in our minds and is being given care- ful study. The affairs of customers in many cases will undergo great changes in the transition period from war production to peacetime needs. In this transition we shall je called upon to play an import- ant part in assisting financially in helping to bring about this change. It may be necessary for uj to revise to some extent the existing practice of making loans for short terms only, and in certain circumstances to consider loans extending oi'er a period of two, three, or five years to meet changed conditions, "I am not implying that we should depart from our policy of prudent banking, but because of our large holdings of readily negotiable llovcrnyient securities, we may, without risk <p our liquidity, assist leserving borrowers with longer term loans. "Vour bank is strong financially and exceedingly well equipped to handle post-war fhiancing, and we shall consider it our patriotic duty to play our full part in assisting business generally in becoming re- established," l^p^^ fej C^ ^^^^ Amfnunitcon Everything expended on the War Fronts means just that much less for the Home Front, and the promise of 1945 is that combat expenditures, some of which are pictured above, will reach hith- erto unimagined totals. CASUALTIES: Running at the rate of 1,300,000 a year, are expected to increase as war's tempo speeds up. AMMUNITION: Mors than two tons of ammunition are fired every minute of every day at the Germans alone, with rats of fire increasing. TIRES: Life-span of tires in combat is often measured in minutes, Ag suppljr lines lengthen, tire requirements will increase. GASOLINE: Combat reverses, resulting in loss of gas dtmips, like that in photo; ever- increasing mechanized strength and growing air forces, including such gas eaters as B-29s, the huge new B-S2S and other giants will use gas in unprecedented quantities. MECHANIZED EQUIPMENT: Tanks, trucks, jeeps, ducks, tank destroyers, motorized artillery and other equipment are highly expendable, as photo of Germans advancing past burning Allied half-track indicates. PLANES: As enemy's defenses tighten up, plane replacements will be increased. LST HEADS FOR SHORE AS LUZON IS INVADED An LST, loaded with troops heads for a Lingayen beach as the invasion of Luzon got imder way. Floats for portable dociis can be seen on the side of the landing ship. Other ships stand by, waiting to send their troops ashore. DISABLED VETERANS MAY DRIVE MANY THANKS go to wives and mothers who serve Maxwell House I Yes, Canadian families love the delicious, satisfying flavor of this superb blend of Latin-American coffees. r. HEAD COLDS ACHES-PAINS go f AST Promise that servictmcn who have lost their legs will not be deprived of the convenience and pleasure of auto driving is seen in the fact that the two veterans in the photo above have just won driver's licenses in Georgia. They learned to drive with artifical limbs at Lawson General Hospital, Atlanta. At left is a sergeant of the Georgia State Patrol, who supervised their successful road tests. JUST IN CASE Ad%c::,ing cautiously, his rifle held ready just in case it's a trick, the Allied soldier at left ar.y re ; l"e bot'y of a German in a snow-covered farm pasture n.ir i-a.ic^.ie, Belgium. BUCKLEY'S CINNAMATIO CAPSULES This grond prescription give* yotr the benefit of not ONE but FOUR.- proven pain-relievina cold-d^:; pelling ingredienti. 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