‘i

My a

~ p a UI-‘JJPPURTIJNITYGL

sir Charles Gordon gives lntcresflnk review of what chartered Canada are in; for the depositing, Never before uncmploymcn and direct relief loomed-so large as Advissbillty of Governments to g,“ market to effect lens term mim- than Governuwnt railws losses 00am"; greatest detdtrcnt Canada's my of‘! rqgovury,

-_--_____

wmancm-loinlll ‘ M - annual re

standard.

The 117th AnnunlGoneral Mcet- compared with coal or oil. If those ing of the Shareholders of the who arcprorie to criticise what is Bank of Montreal was held in the called the cspi

Board Room at- the Bank's Head- quarters _ THE PRESIDENT'S ADDRESS sir Charles Gordon, President, in

addressing the “areholders. said.

1n part : Gentlemen»-

The general statement of Bank roi- the out year. m!“ of

which have been distributed to this meeting, _wlll be presented to you in its details by the Gmsral Mall-ass and will, I hope, prove satisfac y.

observe that these are continuing in smaller figures than in times pust. The demand from comma

cial borrowers for bank loans is still at a comparatively low level, due to the fact that these custom-

crs are in large measure able tlggocfimfigxfzfi. Con,”

If! lalso in excess of last year and root lrly large. It ls en- , know that our farm- | ers as a whole. in better condi- 0

' the p nt volume of busi- {ifiglfsm thfiwn resources, with

the result. that a lsr proportion‘ we

0r the Bank's assets wish to see must perforce be invest- ed in high-grade securities.

1 gi ing m- u uidit and’ -li v grea q y Eréaar stre th in our position!“

must natura y be reflected in smaller profits. You will note how- ever tha. we have been able to earn

veiled for some time past

comfortable margin to be

lorward~to profit and loss. BANKING

the reduced dividend which has tgre- g wi s carried

The effect on the commercial banks of the banking legislation of the year will in the main be to lessen their earning power by the curtailment of their note circula- tion privileges and by the operation oi intcrcst-limitat n features, Any move which woul further curtail the earning power of our com- mercial banks would be highly un- wise. That our banks sho d be maintained in s sound position both in respect of the character of their

ssets and of their ieurning power s a matter of supreme importance to the country and particularly I may say to‘ every depositor. Depos- itors in our banks throughout tb

lat in the maintenance of a sound

make itself felt to that end.

Now that we are upon" the subject go banks and banking in Canada,

might touch upon a few points

artlcuiarly which I ‘should like to

ring to the attention of our own stockholders and depositors and also of the whole Domini . Such a mass of evidence has on pro- duced with regard to banks during the past year that it is a question whetheror not the public. or our own stockholders, have found time to read it, or, if they did resdtgi whether or not they conocntra on the most essential points. I

ould like, therefore, to present a

w figures which can be under- stood and carried away.

1. The total of assets under ad- ministration by our chartered banks s nearly three billions of dollars

2. In the blnks of Canada there arc some s, _ .000 depositors, our own bank ovcgdaduliilxoni t

3. Deposi ‘rgcev r g ll

ear some 837,000,000 in interest. ' 4. The interest which share- holders in the banks received was 12,000,000. T’ I think we may therefore con- Eider that this vast body of (rim- tors, which outnumber the D who voted at the last genera elec- tion in Canada, arc vitally inter- ested in the stmngthcnllll 01 0"! gunk: and the maintenance o

5F

he prefe

holders of the banks whilst those who have supplied csplf-ll 0! the banks, and who receive their dividends only after the 837.000.0011 to which I have referred have been paid, may bo considered as tho common shareholders.

in addition to this, it mtlst- be borne in mind that no shareholder of our. chartered banks can receive one cent of his capital invested in glelired ‘still allutlhc depositors have

en pa n .

Another matter which should be impressed ugon the Public is the nature of t e services which the banks are performing. In a country as vast as this, with towns an villages in remote districts. the value cf these services can hardly be estimated. Within reasonable distance of nearly every point in the West where a farmer br his grain to a country elevator, e can

et his s cashed or make

s deposit, s chartered bank. and he lmowsetliat when he wants

' back to

“i "“‘°...““ r.““‘“,;’§..%l“; a, so ,

h? m tarp-Either: has besnuthe case ars .

of theolbansjiainduzizaries $0.. which our business structure rests have shown progressive bettcrmentadur-

gbitghuulo i210 mori und 00nd . 0 . ' tlon, has" ri -- a re

‘ , illlv were . fart - at inure-electric WWII‘ svaikblclst mmnvatlvalv short

ylm sud st __a low

nun 0Fliu0urniAi~~lul Siliouc.

, W500i" civilians nesuuiicrs so v

AlllETll ruin wuiui our noon. i

035$ I AIUTHER ALWAYS UREIIS. " ‘ 0a ‘Iulininteguuptcdlytlfor mac forcibly the wlsdomrof- ‘nfii-Cw‘ “w”. m‘ “m” y s" '_ , reserving e right o! isdsmpticn

$00,000,000 I: 1032. ' _ amount the increase

, Recent evidence

cornmeal loans has halted and that the trend ins

“up! ft Z country mflzltughscteryr n’ Bu‘ e o . i

giuoneys not sly to be achieved upon

n

"year. and for fifteen dst

‘which connection it be

of free goods. the raw

domestic manufactures.

have kept pace with those of duti-' ble . The external com

talistic system would i look around in Canada and observe whet private initiative pilshirm everywhere. they w all fairness have to admit that it is dgini; its hill-Dart ln laying BIMW t

ue .. vey of our exicrnal Xborts over imports which 1930, has amounted The wdVBDtl-QBB of dargs favourable balance has been manifested in man least in maintain the Canadian do

GRIOULTURE

The harvest in Canada was

y. but; as a whole, about hatoflsst year wi the - vantages of somewhat h her prices. ,'I‘he wheat crop is In the matter oi profits you will?" 09° Wm l‘

external commerce is market found for Cansdi ducts in Empire countries, Ports to Empire countries in the six months ending September hav- lns been 8168000000 f 846 . or 87.6% over tho 1n 1933. while our ex- to foreign countries rose but

e the Western Provinces. audcxton- si lief measures will again be the farmers there.

RAH-WAYS I have in addresses to the share- holders in previous years mentioned our national problems

of which bears hcavi upon the oitirens of Canada. Na. I put aha railway question

Government will turn They have undoubtedly cflt to our Western arm- OTB. .

CONDPHONSBTW THE UNITED ited States the eilorts

‘ to st ula

business have continued past twelve mouths the outs and-

OI th - fills 0f 0kg mamas? annual dc

purposes but also for of public works and the develop- ment of natural resources. result there has been some upturn in usiness ted b th artf-

crea y cse ilcial means, but there has not as yet been any steady or sustained

ry. Sufficient time has elapsed to studyithe effects of the New Deal, and after sifting out the pr pa ,-onc comes f0 the conclusi ‘ economic experi- i! t to bri abo ‘tnd vi ‘:1! bimkin structurc anditistobeinane or ‘ ng usrc v expedtegd that their influence will of trade have not materially im- proved cdnditions. date been to bicreasc Govern- ment debt to unprecedented heights regiment industry. rcstric gains the currency, and mcrcsac

es.

The lowest semi-official estimate as to the number of those requir- ing relief within the United Stslu is iv.oo0.o00. and. unf number is incrc various schemes of he New Deal.

There are signs that the admin- lstratlon now realizes that large of public funds provide rai-y rélief, and that the roblem of unemployment solved permanently only by the en- couragement of private busin . stimulated by the prospect of mak- ing legitimate profits and iuiham- pered by too much Government m ad

' YMENT SITUATION '

aver before in the history of

Canada or the United States ,

problem of unemplo lnent and» petitive

direct relief loomed so l dues today In

essarytosccthesefl restore-

and the serious burden im "Pm "V! lllilflysrs of Canad . The co-operativs measures m-

aware, fallen far any adequate relief, the very immediate beneficial results can the present sys- ssr that other and more must be applied. vernment railway losses the biggestJeak in finances 811d the greatest deter to Cansdas financial reco

e delay in adopting effect-

fllliwe I have given you are part of” the evligilteince HAM; we some or sooner the betisr-atlfglrfilr r312 Way Problem on a scientific basis. remember thatioday

e‘ 8011118 Dominiolrhavc a very direct intcr-' that

the sources of raw gag-g dispensed with much cse materials to power

357017181185. automobiles,

P9 ys. Railways competing other can never succeed

y the throttling of oom- systems but by the elimin- f useless competition ' by . inelligent direction. the greatest problem that we have. first step is bad to face since the wsrrTbere were always some people who were regulation of all forms the United Dortation under s Federal Canada this fact did ‘IlWWPOTlBHOn Co not give the Governments very "W"! W1 1 mpch concern and no legislation of . 0f "if! Board of an immrtant character was ll

the co-ordination of our railways. A second st

unemployed, bu totes and th powers similar to those

Railway Com - a wider and $35.. e.

There

h - 50m I ill th t ‘.1! t I alga tbesrdeigold “fir: m o s , cm oyincn misnaln this doia-and other‘

Dominic Municipal sflslrs perutlve $620!!!! is now

an was havebeen taken toward o0 ti e extravagances which develo more prosperous times. menial expenditures, however.

Parll

go far in introducing social e ation of this nature.

en some twenty-Alive years and! many Acts of Psrlia shunt in GreatuBr-itsin the organ;

so effectively. It is ard wa of deal

determination to the

every form of government. .

Th task of balancing the Fed- budget is rendered difficult b l the cost of une by the war icgac

ons, and, v tional Railways deficits, the terns u charge of not less than $150,000,000. urea

dinary- ievonug of the Dominion Government in the seven months hi, offtbe current fiscal or 81st, last to have 000. an increascof 0086300.!!!» ove it still far Thero‘ was an the past over o events 810,000,000. covery however, amounted to

wt

n of government osc- llggtion it is to distribute to those! eral t ed.

Iiegisl deal with ‘this

whole subject will have to be-inider-

t e vsrnm ts

the United States

wise the problem will will be im

getlt ill c will not m?!“ backdoor M"! d EUROPE AND orurxr nnrrsnv In Europe the situa excess of revenue mouths have wl sued ost which have‘ not helped the re of “peace and proqlsrity. The san- l ‘ELK’? , L ' tolbiefly or. loans

Emmlmpfflilflflfillfi in _ _ mom

In Great Britain the situation cestfu infer-ting ooh in

fG-elnlndnt. "gourd. On

"kW: kldfifi" ‘”°‘"°“.°

the first nine Nil-lull a taxation-lit deserves; and It “l?

e m, - 9M tfld within th no: o: l ~ est-i’

4 rid crisnwrrirwwfl’

OSITIDII. .

portant vernrnsntal borrow

ion i-term for l. reason-

bi. .50.. $01.»... witlrthe l o th' loan itself‘ Ior some

term e . years this type o! flngxndfll

un snada and as a result wchsve many bor- rowc who would Kindly ‘ahead- van go of present favourable con- dit to re d

grass as pronounced

‘gther countries. Among the

reasons

we must count the fact that

we have not been so ready as have some others to seek a panacea in the control of industry or in eco- nomic experiments of one kind and another. In Great Britain. wiioss returning prosperity consti- tutes an inspiring object lesson. the people have made a united effort to promote business. In this single-

n‘ minded objective extraneous re-

forms and rlments have been side-trucked. ere “has been no attack on private initiative. The low point of the depression occur- red earlier in the United Kingdom than in Canada, and similarly, while recovery commenced in the United Kingdom during the sum- mer of 1932. it was dela ed in the case of Canada until e second gunner of 1933- It is s. reasonable cduction that the wisest course for us to follow is to give single- minded devotion to reviving busi- nes by the methods which emer- lsnoe has shown to be fundamen- tally sound and not to interfere with the improvement now under way by applying new and untried theories and enacting hampering legislation. - With respect to the outlook for the com)’: lylear, there are many reasons ' lIO justi! the hope for a continuation of he betterment which we have witnessed during the past year. In the first place, I would say that events arc cm ha- sizing how great is the nat onal asset we gossess in the good sense and the omogenoiu character of

ur ole.’I'h. asIhv ‘di- gategie eu. aem

t re is comforting statisti-

fisl wide-neg tacit} tlgggclovujdds are . an c-r- e once. 0003:3180 c

our resources are so large

and so varied that when one door

of opportunity closes another al- ways opens. It has truly been said

that Canada's salvation is that she

is still a land with a frontier. Once wheat and forest products were the important treasures of our soil. To

these are now added gold and the highly-important commercial met- als with which this ‘country is so lavishl endowed. I would be very

much appier if I could say that

marked improvement has also been shown in other countries, for the welfare of the individual is bound up in that of the whole. Canada is particularly susceptible to outside influence; we must not forget that as our position is largely that of an e

r, conditions in other

countries must have a. great bear- ing on conditions here. (Applause)

THE GENERAL MANAGERS‘ ADDRESS. Mr. W. A. Bog, as Joint General

Manager, read the Address of the Joint General Manage-rs, which was inn} part as follows:

r

. Chairman and Gentlemen: On behalf of M)‘. Dodds and my-

self I have the honour to present to you the one hundred and seven- teenth annual balance sheet of the Bank, from which you will see that the" strong tion of the Batik has been filly maintained

Important changes in the bal-

ange sheet figures are as follows :

Assets amount to

ur Total $759,100,000, compared with M08.- d a o

.000 W11‘ BE ~ Quick Assets. includlngmoétsllii so;

ai $491,200,000, represen of all liabilities to the public; of i, these assets actual cash amounts to 12.77% of such liabilities. Our large holdings of uici: Assets em- phasize the diflic ty of employing our money in commercial loans.

Investments, not exceeding mar- B ket value, amount to $318,000,000. practically unchanged from last year

0dr investments in Dominion

and Provincial Government secur- ities included in the above amount to $284,000,000. '

g “Current loans in Canada amount ,

230.800.4100, a decrease of s5.-

300000. Bank deposits now in ex- istence could readily finance n. vol- ume of trade substantially greater than that of today. However, until the tendency towards restrictive legislation upon business opera- tions is more clear-l defined, and until the uncertaint cs in the lipid of international relations have been removed and the opportunity for profitable employment of bor- rowed money becomes more ap- parent, business will probably show some reluctance to expand. We never lose sight of the fact that lending money for commercial pur-

cs is the backbone of our cam- nk DOW"; we are ready. and al-

ways have been to consider appli- cations for loans which fall the category cf prudent benkln risks. We have phssixed this feature in our advertisements in recent months in order to contro- vert a widespread misconception that there is a lack of banking credit. These advertisements did not announce a new policy, or even , the revival of a policy; they simply restated s policy from which the Bank h

as at no time d

namely, that of affording every reasonable accommodation to com- rncrclsl borrowers. We might add in this connection that the total of

authorised for our borrow-

ing customers is very la excess

rgcly in of the amount which they

have found that they can use to 08B advantage.

In valuing our assets. ample pro-

‘m vision has been madc foi’ all bad and doubtful debts and any dc- praclation of securities.

ts are slightly lower than

Prod those of tbs previous year: after deducting Dominion and Provincial Goavarnment ‘haxss they amount to

as compared with l3.-

cam ui ma

As a result of the lower interest

rites prevailing and the difliculty gf. koémpiovinv money ts l

by. other institutions re-

n and calving deposits reduced the rate of intarest. ‘ghtis action eshaluldhalailil; rec v ass governor n s iii t sir efforts to establish budget so brium and should also cori- trihvlc to Business recovcry. but in A illtslaiifi’! these objects it would be have illus- s mistake to lower tbs rate 0a

GUARDIAN ssvlnts deposits to the point of ti;

ootltaglng thrift. It is so portant that the rate s is on fifiimfi°m“°“li..“d“lfiiul°iw'““ of the investors of small and mod- erate means and thereby secure that wide distribution which ls so dcsiiable inLpublfli; financing; a: mus rs iigwaaglsain: carat”? cannot fall at cr country. CONDITIONS 1N CANADA At ‘our last Annual Meeting the illlfifllii‘ .’l“°§.£i‘iii.l“° ’°" o cer- tain mcasure of yrewvery bu: had supplied groimdivfor hope that the firscigzery ‘wotuld continueumin 108i. withstanding the tendency for con- sumption o _ to behind production. and also for

dfillwmaddicdue in l ve c c n , crease csu rs idly than c’ ction.

c r n psrtoiedulg l i tercsted in and the abllised

It does not appear pro le that satisfactory stabillzationbflzif t world's moneys can be achieved upon any other basis than a gold standard.

The Ottawa Agreements ve to Canada a much needed mar ct for

po to Great Britain-have beer. exceeding our imports from Great Brl by an increasing mafia. With respect to the United St s. although Canada's unfsvourabit-

anea on merchandise account was reduced from $3ll.000.000 In 1920- 90 to $44,000,000 in 1113-1-84, this trend ii new in process of being’ reversed. nrid the unilsvorable balance with the United Stains is rising rapidly as com- pared with last ycsr. This discount on the American dollar and the hi tariff against our arri- cirltura products impede the free flow of goods heroes tllc frontier to our dlsgdvsnfage.

BANKING LEGISLATION

The Act incorporating the Bank of Canada will opcraitc dually to re- duce , the long-ealab isbod privilege enjoyed by the char-tend bunks to issue notes. That function is to be undertaken more and more as time goes on by the new Bank. Meanwhile, the partlgl withdrawal of the circula- tion privilege will curtail till-e ser- vices as well us the cam-lug power of the chartered banks. The bunks have assisted immeasurably in the (1976101)- ment of Canada, particularly by open- ing branches in nearly every bgmlei lu the cfiuntry, As long as we could issue our own notes there was no un- productive tia-up of resources in till money at any of our branches. Bank hares up to the mount o! the Bank's capital require no cover; above that amoum they are fully covm-od by gold or legals, except that during the crop moving period some leeway is permit- ted. They are secured by s first lien on assets relatively huge.

Canadian bank not-eh are issued only as business activity requires and when the lair-mediums need is filled the notes flow hack to the banks and are re- deemed. This has prevented any in- fllltlcn of ills currency insofar as if is represented by bunk circulation. Business may st times be inflated and this in itself may create m: abnormal demand for currency. but this essentially different from tbs emis- sivm of notes not required by trade. The automatic features of the Canad- ian bunk note has bgen the subiect cf stinted prsino by banking autbortiel in tho Republic to the Souiih.