PUBLIC BONDS OF FOREIGN ORIGIN 1. Canada; development of field.—It has been said that Canada is now, industrially, where the United States was in 1875. If this is so we may name certain features in which it is much better off than this country was then. It has not the unsound bank ing, the railway wrecking, and the defaulting of states and municipalities which characterized the United States in the seventies. The Dominion has an abun dance of free land of standard quality still unoc cupied. It has unmeasured forests and an immense variety of mineral resources, altho the supply is rather scattered. Before the European war Canada re ceived a steady stream of high-class British immigra tion and a supplementary stream of inflowing British capital. These are now cut off, but their loss is tem porarily compensated for by the special demands of Europe. Canadian trade in the latter part of 1916 was 25 per cent above the average of the last five years. The basic nature of Canadian industries, the excellent banking laws and strong banking organiza tion existing there, the availability of American cap ital in increasing quantities and the general conserva tism which marks the temper of the people, all com bine to insure a prosperous future.
Dominion bonds which, in 1912, were yielding per cent, yielded at the beginning of 1918, 6 per cent and upward.
An August 1916 quotation was as follows : 2. Canadian provinces.—The provinces of Canada may be divided into three classes. The conserv ative eastern division includes Quebec and On tario, the progressive Middle West is represented by Alberta and Saskatchewan, and the speculative Far West is typified by British Columbia. This classifi cation is very similar to that which would be made in comparing eastern and western states in the northern portion of the United States.
Taking Manitoba and Saskatchewan as types of that which is peculiar to Canada in comparison with our states in finance, we may begin by observing that the governments are sustained by revenues from the sale of lands and other sources and do not levy general direct taxes. With the recent falling off in
land receipts, due to the decrease of immigration, tem porary deficits have appeared.
There are two marked features in the expenditures of these provinces. The first is the loaning of their credit to aid in railway construction, railway bonds being guaranteed in exchange for mortgages taken on branch lines, bridges and terminals. No actual expenditure has ever been necessitated on account of these guarantees, and the branch lines are considered to be profitable properties. The second feature is the aid extended by the provinces to cooperative enter prises, such as elevator companies and creameries. These enterprises have been prosperous and have aided greatly in the development of agriculture. The provinces own their telephone systems and operate them at a small profit. It is altogether likely that in the near future there will be some form of finan cial aid extended to cooperative rural credit associa tions. In these ways the provinces have made their securities much like those of great land, railway, and public utility corporations. The per capita debts are high, but they seem justified by the need for markets and equipment, and the possibilities of growth.
The following is the essential portion of the cir cular prepared for the marketing of $5,475,000 of five-year 5 per cent gold debentures by the Province of Manitoba, February 1, 1915: In connection with the Telephone debt in the foregoing table, it is important to note that in addition to being self sustaining the Treasurer reports that there has been ac cumulated out of surplus Telephone revenues a reserve ac count amounting to $731,515 and that there is also on hand, of the monies raised for the purpose of extensions $573,598.
As part of its yearly revenue the Treasurer further re ports that the Province receives annually from the Dominion Government as interest upon Capital Account and various Statutory Allowances $1,406,204 and he states that this will increase from time to time as the population of the Province increases.