March 21, 1933

PRIVILEGE-MR. POULIOT

LIB

Jean-François Pouliot

Liberal

Mr. JEAN FRANCOIS POULIOT (Temis-couata):

Rising to a matter of privilege, Mr. Speaker, the Minister of Labour (Mr. Gordon) stated yesterday, as reported at page 3203 of Hansard:

If my recollection serves me correctly, and my hearing is right, the hon. member for Temiseouata directed his barrage against the province of Quebec.

The hearing of the hon. gentleman may be correct and his recollection may serve him correctly, but his understanding was very poor because I did not direct any barrage against my own province, which I love as much as my country and for which I am always fighting.

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THE BUDGET

ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE


Hon. EDGAR N. RHODES (Minister of Finance) moved: That Mr. Speaker do now leave the chair for the house to go into committee of ways and means. He said: Mr. Speaker, in moving that you do now leave the chair to enable the house to resolve itself into committee of ways and means to enable supply to be granted to His Majesty for the fiscal year ending March 31, 1934, it is proposed to discuss the year's financial operations under the five headings followed in the last budget, namely: 1. A short review of world economic conditions; 2. Canada's trade and commerce and financial conditions in Canada; 3. The financial operations and accounts of the dominion for the year ending March 31, 1933, and, as the fiscal year has not yet closed, the transactions still to take place have been estimated as closely as possible; 4. The estimated revenue and expenditure for the year 1933-34; 5. Ways and means to secure the revenue required to meet the estimated expenditure. World Economic Conditions When the budget was presented one year ago, a world financial storm of unprecedented severity was still in progress. It had started, you will recall, in Austria in the spring of 1931 and had passed from one country to another, crippling financial institutions and generally dislocating the machinery of finance and trade. Before the end of September, England had been forced off the gold standard and her example was soon followed by a score or more of other countries. With few exceptions, all countries felt it necessary to institute exchange controls or impose additional restrictions on trade, in order to protect the value of their currencies and to safeguard themselves against unfair competition arising out of depreciated exchanges. As a result of these conditions, the international exchange of goods tended to become more and more restricted; the world level of prices, particularly the prices of primary products and the staple exports of debtor countries, became subject to intolerable pressure ; and the forces making for declining business activity and increasing unemployment were reinforced. The United States was perhaps the last important country to feel the full force of the financial storm. During the winter of 193132, its banking system was subject to a double strain; foreign individuals and institutions with balances in the New York money market repatriated these balances or earmarked gold against them, while domestic depositors, distrustful of the solvency of their banking institutions, withdrew deposits. The inevitable result was the failure of thousands of small unit banks, heavy depreciation in the value of securities thrown upon the investment market, falling commodity prices and a The Budget-Mr. Rhodes vicious spiral of deflation. To counteract this movement, a program designed to create an expansion of credit was instituted, involving chiefly the formation of the Reconstruction Finance * Corporation, the liberalization of banking legislation and extensive open market purchases of government securities by the Federal Reserve banks. By midsummer the processes of disintegration appeared to have been effectively checked. Up to this period, world commodity prices had been falling and business activity steadily shrinking. Even in England, departure from the gold standard had brought only temporary inflation and the level of wholesale prices had been declining since November. In June or July, however, prices turned upward in both England and the United States, and industrial production showed a similar upswing. In June, the Lausanne conference, somewhat to the surprise of the world, reached a provisional settlement of the reparations problem. While the European nations made their acceptance of the agreement conditional upon similar action being taken by the United States with respect to war debts, this conference had all the promise of marking a real beginning of international co-operation, through which the hopeless tangle of reparations, debts, tariffs, armaments and unstable currencies might be solved by international action. In July-August, the Ottawa conference, to the accomplishments of which further reference will be made a little later, succeeded in effecting a measurable relaxation of trade restrictions within the huge trading area of the British Empire, and pointed the way to similar action on a broader scale. These developments in the international sphere created an atmosphere favourable to business recovery. During the summer also Great Britain carried through a highly successful conversion operation, reducing the rate of interest from 5 to 3i per cent on over two billion pounds of callable public debt. This was made possible by a condition of extraordinary ease in the money market, symbolized by successive reductions of the Bank of England rate from 6 to 2 per cent and by the sale of Treasury bills at the record low rate of f of one per cent. Somewhat similar conditions prevailed in other leading money markets of the world. In the security markets, prices rose rapidly, particularly for high-grade bonds. Low money rates are traditionally regarded as the chief prerequisite to and as the forerunner of business recovery. It was not unnatural therefore that confidence began to return. Indeed, the third quarter of 1932 was a period of noticeable improvement in world industry and in business sentiment. 53719-203£ But the improvement was not maintained, and since last October world trade, industrial production and. wholesale prices have once more tended downwards. In the renewal of the decline, the failure of the war debt negotiations has been an important, though not the sole, factor. During the last few weeks, there has been a recurrence of banking troubles in the great country to the south of us, and new clouds have appeared on the political horizon in Europe. On the significance of this banking crisis and these new political disturbances, it is not necessary for me to comment. But I do wish to warn against too gloomy an interpretation of current happenings. Events that may seem well-nigh disastrous in themselves may nevertheless be necessary to effect some of the radical changes in public attitudes and national policies which will make possible a fundamental and permanent solution of the difficulties which beset the world. There are those who decry the possibility of an international solution and who insist that we should seek remedies at home for present conditions. I do not wish to minimize the difficulties and delays which are involved in any program based on international agreement, or to overlook the plain duty which rests upon every nation to keep its own house in order and to strive to the utmost by domestic action to accelerate the processes of business recovery. However, one cannot fail to observe that the present crisis is international, both in its causes and its effects, and that the remedy must be sought in international understanding and co-operation. Slowly, but nevertheless surely, the world is approaching full realization of the fact that the day of national self-sufficiency is past, that an international disease can only be cured by an international remedy. Therefore, I look forward hopefully to the World Economic and Monetary conference which is expected to meet in London in the near future, and to which we propose to give our whole-hearted support. Members of this house have already had an opportunity of studying the agenda of that conference prepared by an able committee of experts. I am hopeful that on the basis of this agenda a program can be worked out for the relaxation of exchange controls and other excessive restrictions on international trade, for the stabilization of currencies, and for the stimulation of a rise in the world level of wholesale prices. The success of this conference assumes a prior or simultaneous settlement of the war debt question and some appeasement of political fears and rivalries as a result of progress in disarmament discussions The Budget-Mr. Rhodes



or otherwise. If these prerequisite conditions can be achieved, it should be possible to reach agreement upon a program which would be effective in restoring world confidence and initiating an early recovery of business activity. The world has this solution within its grasp and in my opinion there is no other short of prolonged and painful liquidation, if this indeed can be called a solution. Events are moving rapidly, driven by the urge of economic necessity. On this fact may rest the basis for a greater degree of optimism than has obtained in many months. As foreign trade plays a dominant role in Canada's economy, it follows that the world conditions which have just been outlined, have inevitably been reflected in business conditions within this country. The course of industrial production and the physical volume of business in Canada has followed very closely that of the other leading countries. Fortunately, since the first of the year, there has been a moderate improvement in wheat prices and those who are usually well-informed are hopeful that this improvement will be sustained. I do not need to emphasize that if this rise in wheat prices can be sustained and carried farther, no other single development could be of more importance in stimulating business recovery and reviving a spirit of confidence. Trade of Canada Reference has been made to the factors which have contributed to a further decline in world trade, including lower commodity prices, reduction in purchasing power of many of our principal markets due to unfavourable exchange conditions and the widespread application of import restrictions. It is a matter of satisfaction that relatively the position of Canada among the great trading nations has been so well maintained. In 1932, Canada again ranked fifth, after having been seventh in 1931. An examination of the statistics also reveals that the loss in dollar value of total trade in 1932 was proportionally not so great for Canada as for other important trading countries. The soundness of our financial policy, and the beneficial effect of trade agreements, particularly those concluded with empire countries, have contributed to this result. The following is a statement of Canada's foreign trade for the first eleven months of this fiscal year, as compared with the same period in 1931-32: Imports Exports- Canadian produce Foreign produce. . Total Trade of Canada (.000 omitted) Eleven months ended Feb. 29-1932 Eleven months ended Feb. 28-1933 Decrease. $ 521,056 $373,421 $147,635. 536,595 . 9,952 437,329 6,332 99,266 3,620. $1,067,603 $817,082 $250,521 It will be observed that the value of the exports of Canadian produce has declined to a lesser extent than the value of imports. Indeed, when the lower prices of the leading Canadian export commodities are taken into consideration, there will be found to have been very little reduction in the actual volume of exports. It is also noteworthy that, despite the unfavourable conditions which have prevailed, there has been a progressive improvement in the balance of trade. In the first eleven months of this fiscal year, ended February 28, the excess of exports over imports was $70,240,000 which is a remarkable showing as compared with a favourable balance of $25,490,000 in the corresponding period of the previous year, and a complete reversal of the position in the eleven months ended February 28, 1931, when our trade showed an unfavourable balance of $70,524,000. Comparative figures are as follows: Eleven months ended- February 28,1931. February 29, 1932 February 28, 1933 Trade of Canada (000 omitted) Imports .. .. $831,232 521,056 .. .. 373,421 Exports



Balance (-) $70,524 ( + ) 25,491 ( + ) 70,240 Although the tariff agreements arising out trade statistics, significant developments of of the Imperial Economic Conference have the utmost importance to our trade with been in force only a few months and their empire countries are indicated, advantages are not yet fully reflected in the



The Budget-Mr. Rhodes In tli!; ten months ended January, 1933, (the latest date for which trade statistics by countries are available), Canada's exports to various parts of the empire were slightly greater than in the same period in 1932, and to the United Kingdom had increased by some seven million dollars. In addition, the decline in empire imports was much less, relatively, than in respect of non-empire imports. Trade totals reflecting the interempire movement of goods are as follows: Inter-Empire Trade of Canada Ten months ended Imports from United Kingdom ¥ 87,509,816 Exports to United Kingdom 153,776,204Imports from British Empire 122,448,561Exports to British Empire 192,824,941 Ten months ended January 31,1933 $ 73,629,042 160,610,678 101,939,909 193,115,066 When expressed as percentages of total trade, these figures clearly indicate the trend towards increased trade with empire countries. In the ten months ended January 31, 1933, imports from the British Empire were 29-13 per cent of total trade, as compared with United Kingdom British Empire. United States.. Other countries. 25-23 per cent for the previous corresponding period. Exports to empire countries in the same period were 46-34 per cent of total trade, as compared with 37-84 per cent formerly. The percentage distribution of Canada's trade is shown in the following statement: Imports Exports Ten months ended Ten months ended January 31 January 31 1932 1933 1932 1933% % % %. 18.03 21.04 30.02 38.5429.13 37.84 46.34. 60.77 57.22 41.54 30.89. 14.00 13.65 20.62 22.77 In imports from the United Kingdom, the chief gains have been in textiles, coal, manufactures of iron and chemicals. So far as exports to the United Kingdom are concerned, important increases are being registered in many products of the farm, mine and factory. An increase has occurred! in both imports from and exports to Australia, the latter rising from $4,207,000 to $6,047,000. This improvement is especially gratifying to those interested in trade from the Pacific coast. A feature of the import trade has been the growing importance of the West Indies as a source of supply of semi-tropical fruits and vegetables. Considered in the light of world conditions, Canada's external trade has shown a reassuring stability which reflects not only the underlying productive capacity of the country, but also the energy and capacity of those engaged in production and trade. Financial Conditions in Canada It will be recalled that after Great Britain departed from the gold standard, the export of gold from Canada was prohibited except under license and the gold production of the mines was purchased by the government at the world price. This policy has been continued, and the receipt of the New York premium, which would, of course, have been obtainable by producers had they been permitted to export their gold freely, has undoubtedly contributed to the substantial expansion which has occurred in gold production. Next to South Africa, Canada is now the largest producer, having expanded her output from $16,000,000 in 1913 to $63,000,000 in 1932, succeeding the United States as the second largest producer. It is estimated that for the present calendar year our production will amount to $67,000,000. The importance of this industry lies not alone in the increasing employment it has given to labour, the profits which have been disbursed in dividends and the impetus given to domestic trade generally, but perhaps primarily at this time in the support which it has given to our exchanges and the national credit. This increased gold supply, available for export without weakening monetary gold reserves, taken in conjunction with the elimination in the past two years of a large unfavourable balance of trade and the substitution therefore of a favourable balance exceeding $70,000,000, has been most significant in relation to Canada's ability to meet, without undue strain, the burden of interest The Budget-Mr. Rhodes



and principal payable abroad. Without making a detailed presentation of the various items entering into Canada's balance sheet of international payments, it may be noted that current estimates of the position indicate that exports of goods, gold, and services, are sufficient to offset annual charges payable abroad and to leave a substantial balance for principal payments on account of external debts. This has been a most important factor in maintaining the high credit position of Canada in world markets. During the past year Canada was the only foreign country that was able to borrow in the public markets of the United States. This enviable position has been and can be held only by the maintenance of sound financial and monetary policies. Much has been heard in recent months about inflation. Some of the advantages claimed for inflation may seem alluring to industries harassed by falling prices and declining turnover. But let the sponsors of inflation never forget that apart from tlhe other difficulties and dangers involved in their program, one inevitable result would be a flight from our dollar, a withdrawal on a large scale of the capital invested by foreigners in this country in the form of securities and bank deposits. There are also to be considered internal reactions to any steps which might impair confidence in a country's currency. Against policies which might lead to such dangers, this government has resolutely set its face. The external value of the Canadian dollar, though showing greater fluctuations than are desirable for the normal conduct of international trade, has been maintained at a moderate discount in terms of the United States dollar. In October last, the rate rose to 6J per cent discount, and at no time during the past year was it depresesd to the level of December, 1931. There are some who advocate that our dollar should be tied to sterling at the old parity and still others who criticize what they mistakenly believe to be a policy of pegging our dollar in terms of New York. This is not the time to enter into a discussion of this broad and complicated question. Suffice it for me to say that our dollar has been allowed to find its own level and that as a result it has been fluctuating about half-way between t'he United States dollar and the English pound. In so doing it may be working out a not unsatisfactory compromise between those of our national interests which would be benefited by close and stable relations with sterling, and those on the other hand which would be seriously harmed by a heavy and fluctuating discount in terms of New York. [Mr. Rhodes.! The financial and monetary policies which have been followed have also contributed to the efficient working of our internal credit and investment facilities. In general the needs of industry, of crop-marketing agencies ana of public bodies harassed by falling revenues have been taken care of with admirable efficiency, particularly in view of emergency conditions and in the ligffit of the situation in many other countries. Canada is one of the few countries that has been able to retain a market for new long-term financing, and the volume of long-term capital issues which were floated in the domestic market last year is, I submit, a splendid tribute, not only to the efficiency of our investment and banking institutions, but also to the thrift of the Canadian people and the underlying strength of our economic position. Excluding shortterm and refunding loans, a total of $267,000,000 was raised. In passing, it is interesting to note that over $15,000,000 was secured by Canadian borrowers from the London market, three provinces and two municipalities selling their first sterling issues since 1914. The dead hand of past lavish expenditure and borrowing still weighs heavily upon all public bodies. While public revenues keep falling, debt charges persist and increase, consuming an ever-growing proportion of total current receipts. This whole problem of interest charges is now receiving the attention of the banking and commerce committee of this house. Without touching upon their field, may I say that the policy of this government is to keep the interest charges upon the public debt as low as possible by maintaining such financial policies as will enable us to raise new funds and convert maturing loans on the most economical basis. When the opportune moment arrives, we propose to offer a conversion loan to the public of this country. But it will be on a basis that will keep faith with investors and will not in any sense involve repudiation of existing contracts. Under such conditions, the issue can be made, it is believed, at a rate which will involve a substantial saving to the public treasury. May I refer also, at this time, to a matter which has received some attention in the public press, namely, the movement on the part of the banks and other financial institutions to reduce the interest rate on savings bank deposits. In my judgment this reduction is a necessary step if we are to reduce the interest rate on bank loans, on mortgages and on long-term bonds to a level where business recovery will be most effectively stimulated. I need not dwell upon the extent to which The Budget-Mr. Rhodes it will ease the burden of financing for all public bodies by enabling funds to be raised it lower rates. In this matter, therefore, the government is prepared to cooperate by reducing the rate of interest paid on postal savings deposits. Finally, I wish to refer to the contribution of the chartered banks to the orderly financing of our economic life. Under the impact of the severest financial storm that history records, our banking system has fully maintained its enviable reputation, meeting every demand upon it and retaining the fullest confidence of the public. The annual bank statements which have been issued recently indicate an exceptionally strong and liquid position, while the chief concern of our banks would appear to be the difficulty of finding satisfactory outlets for the investment of their surplus reserves. A bill has already been introduced in this house providing for the extension of existing bank charters until July 1, 1934. Before that date the periodic revision of the Bank Act will have taken place. Speaking in this house more than a year ago, the right hon. the Prime Minister, raised the question as to whether or not a central bank should be established in Canada. In recent months the question has been widely discussed, but it must be recognized that it is a highly technical matter, upon which conclusions should be reached only in the light of the fullest enquiry into all aspects of the problem. The government proposes, therefore, to appoint a royal commission to study the organization and working of our entire banking and monetary system, to consider the arguments for and against a central banking institution and to make recommendations for revising or supplementing our existing banking and monetary legislation. I need scarcely say that the endeavour will be made to secure a body of experts, wherever they may be found whose competence and whose freedom from bias will command the respect of every section of the Canadian public. The intention is that the commission should begin its investigation at an early date, should adjourn, if necessary, in order to consider its findings in the light of any recommendations that may be made by the World Monetary conference, and should submit a report which would become the basis for study by the banking and commerce committee at the next session of parliament. The brief reference which I have made to the financial situation in this country may well be a source of satisfaction to Canadians, having regard to world conditions. I do not overlook the darker elements in the picture- the low level of business activity, the shrinkage of trade, the pressure of low prices and of existing debts, the increase of unemployment and the various social costs which it involves. Nevertheless, it means much for the prospect of future recovery that as a nation Canada is able to take care of her foreign commitments without undue strain; that our financial structure continues intact and. our credit remains unimpaired in the markets of the world. Taxation Revenues 1932-33 The continuance of the decline in business activity and in commodity prices had the inevitable effect, in Canada as in other countries, of a continuing fall in public revenues. This was particularly marked in taxation revenue from which the dominion derives over 80 per cent of its total receipts. Of the major sources of taxation revenue, the income tax alone will yield the sum estimated. When the fiscal year ends on March 31st, income tax receipts, as now estimated, will approximate 862,000.000 as compared with an estimate of 160,000,000 and a yield during the previous fiscal year of $61,255,000. The customs tariff still ranks first as a contributor to the dominion treasury, but its yield of $72,000,000 for 1932-33 is substantially below the customs revenues of last year. This decline reflects, of course, the fall in commodity prices and the gradual shrinkage of international trade due in part to exchange restrictions and chaotic monetary conditions. The fall in excise duties, which are estimated to produce 838,594,000, was slightly less rapid than that in customs duties. Because of the increase in the rate from 4 per cent to 6 per cent, the sales tax again rose to third place in the list of revenue producers. Though the higher rate was not fully effective during the entire year, the return will exceed $58,000,000 and closely approach that of the income tax and the customs tariff. If to sales tax receipts we add the yield of the various other excise and miscellaneous taxes imposed by the Special War Revenue Act, we have a total estimated return of 885,432,000 or over 33 per cent of our total taxation revenue. The following table gives a comparative statement of the estimated receipts from taxes for the fiscal year now closing and the previous four years: The Budget-Mr. Rhodes



Taxation Revenues (000 omitted) 1928-29 1929-30 1930-31 1931-32 Estimated 1932-33Customs import duties $ $ $ $ $187,206 179,430 131,209 104,133 72,081Excise duties War Tax Revenues- 63,685 65,036 57,747 48,655 38,594Banks Trust and Loan Companies 1,243 8 1,408 1,429 1,390 1,350Insurance companies 895 74 74 12 805Delayed business profits 455 173 34 3 Income tax 59,422 69,021 71,048 61,255 62,000Sales tax Manufacturers', importation, stamp, 63,646 44,859 20,784 41,734 58,757transportation taxes, etc 19.3G1 18,550 13,951 17,872 24,520Total receipts from taxation 395,921 378,551 296,276 275,054 258,167 Public Service Revenues the mail of the various branches of the The sum of $52,709,932 will, it is estimated, be collected by way of revenues from the various public services. This is slightly larger than the corresponding figure for the previous year. The chief source under this head is the Post Office Department, the revenue of which is estimated at $31,129,243. This is slightly less than the estimate and less than the total for 1931-32. On the other hand, post office expenditures have been reduced more rapidly with the result that a deficit of $2,214,000 in 1931-32 has been turned into an expected net revenue of approximately $567,000 during the current year. The figures for post office receipts do not include any credit for handling public service free of charge, nor does the department's expenditure take into account disbursements made by Public Works and other departments on account of Post Office. The second largest item of public service revenues is interest on investments, representing interest on advances to harbour commissions, provinces, etc., and including the regular payments by Rou-mania on its loan. The total this year will exceed $11,500,000, as compared with $9,330,125 last year. Included in the total is the payment of $807,000 by the chartered banks for interest upon advances under the Finance Act. The corresponding payment last year was $360,247. A five-year comparison of non-tax revenues follows: Non-Tax Revenues Canada Grain Act Canada Gazette Canals Casual Chinese Revenue Dominion Lands Electricity Fines and forfeitures Fisheries Gas inspection Insurance inspection Interest on investments Marine Mariners' Fund Military college Miltary pensions revenue Ordnance lands Patent and copyright fees Penitentiaries Post Office Premium, discount and exchange Public works R.C.M.P. officers' pensions Superannuation fund Weights and measures _______Total non-tax revenues... 1928-29 1929-30 1930-31 1931-32 Estimated 1932-33$ $ S $ s2,992,540 2,047,207 2,179,047 1,484,826 1,437,49380,214 93,890 71,197 73,590 74,0001,230,333 1,043,647 1,026,671 976,845 806,2004,041,095 4,300,710 3,678,487 4,286,745 4,360,45418,224 14,345 21,996 10,059 9,8004,070,339 4,139,104 1,655,401 485,364 453,500563,964 546,957 632,151 402,189 299,797655,485 748,343 433,716 233,512 208,886109,300 110,724 73,937 40,519 37,72592,398 100,763 94,255 81,359 81,627131,626 138,780 148,942 149,902 159,91812,227,562 13,518,205 10,421,224 9,330,125 11,506,694182,810 184,637 199,000 191,905 178,557236,808 209,322 201,768 184,485 185,64620,204 19,820 19,882 20,045 20,116155,830 158,881 159,000 163,229 156,67624,830 30,277 29,384 14,250 15,000530,239 574,918 559,646 525,248 558,882178,449 181,024 183,288 166,111 101,83830,611,964 33,345,385 30,212,326 32,234,946 31,129,243501,592 458,390 501,610 301,108414,085 408,151 362,391 280,591 214,7816,373 81 6,471 5 6,357 14,787 9,703399,247 407,248 419,750 406,529 402,28859,475,592 62,787,204 53,291,426 51,757,161 52,709,932



The Budget-Mr. Rhodes Included in casual revenue in the above table is SI ,400,000 received from the sale of radio licences. This compares with $514,177 received during the previous year when the fee was $1 compared with the present $2. Special Receipts Special receipts were not as large as during either of the previous two years, primarily because nothing has been received on account of German reparations since the Hoover moratorium. From the Custodian of Enemy Property, however, there has been received $4,000,000, which has been taken into the accounts in part as an offset to the disbursements from the consolidated revenue fund in respect of compensation paid to civilians for damages sustained in the war. Summary of Revenues Adding special receipts to the returns from taxation and public service revenues, we reach a grand total revenue of $315,290,000, which is $18,549,000 less than the figure for the previous year. A comparison of revenues for the last five fiscal years is given in the following table: Summary of All Revenues (000 omitted) 1928-29 1929-30 1930-31 1931-32 Estimated 1932-33$ 395,921 59,476 $ 378,551 62,787 $ 296,276 53,291 $ 275,054 51,757 $ 258,107 52,710 455,397 5,476 441,338 4,771 349,567 6,622 326,811 7,028 310,817 4,473 460,873 446,109 356,189 3330839 315,290 Ordinary Expenditures 1932-33 The ordinary expenditures for the year are estimated at $364,425,000, which is $8,080,000 less than the figure for 1931-32. Whilst this expenditure is $130,000 more than was estimated, this slight increase must be considered in the light of the fact that after the budget estimate was made, supplementary estimates were passed, amounting to $7,644,000. By means of rigid control over expenditures, it was possible to effect a total saving of upwards of $12,000,000 from the total amounts voted by parliament. In previous budgets it has been customary to give a statement of ordinary expenditures by services. The following five-year summary is given on the basis of expenditures by departments (with sub-heads for the more important services), in the belief that this classification will be more serviceable. Statement by Departments of Expenditure for the Last Five Fiscal Years (000 omitted) Ordinary Account 1928-29 1929-30 1930-31 1931-32 Estimated 1932-33% 8,128 400 $ 10,245 402 10,119 416 10,212 *8,601436 390Chief Electoral Officer, including Elec- 75 46 2,256 343 145 64268 308 306 243Extemal Affairs including Office of the 749 897 928 994 875Finance- 124,990 121,566 121,290 121,151 134,971728 12,554 1,600 2,687 12,497 1,600 837 17,436 13,695 13,677Special Grants to Maritime Provinces.... 1,600 778 1,600 536 1,600 5312581,648 2.369 i, 545 2,006 1,476 1,405 1,330General Expenditure 1,794 1,845 2,018 The Budget-Mr. Rhodes



Statement by Departments of Expenditure for the Last Five Fiscal Years-Concluded (000 omitted) Ordinary account 1928-29 1929-30 1930-31 1931-32 Estimated 1932-33$ % $ $ %Fisheries 1,974 2,426 2,435 2,046 1,883Governor General's Secretary's Office 155 170 142 148 146Immigration and Colonization 2,950 3,094 2,588 2,200 1,769Indian Affairs 4,789 5,333 6,069 5,081 4,507Insurance 156 159 178 ISO 166Interior 7,787 8,490 8,104 4,647 3,576Justice 2,640 2,591 2,538 2,560 2,480Penitentiaries 1,808 2,561 3,237 2,737 3,039Labour 011 697 797 633 628Technical Education 1,152 413 391 283 300Old Age Pensions Legislation- 833 1,537 5,658 10,032 11,500House of Commons 1,652 1,690 1,786 2,061 2,261library of Parliament 74 74 76 81 66Senate 539 529 568 650 698Marine Canadian Radio Broadcasting Commission 7,514 8,944 8,030 7,262 6,443 250Mines and Geological Survey Movements of coal and Dominion Fuel 1,250 1,358 1,420 1,264 1,077Act National Defence- 23 56 514 721 1,271Militia service 11,044 11,033 10,953 9,700 8,808Naval service 1,836 3,013 3,598 3,043 2,422Air service 5,041 5,921 7,147 4,040 1,750Sundry services 1,753 1,925 1,928 1,347 1,085National Revenue (including Income Tax). Pensions and National Health- Treatment and after-care of returned 13,542 13,844 13,972 13,920 11,148soldiers 7,902 8,494 9,774 11,154 10,811Pension, war and military 41,095 40,032 45,541 48,249 44,500Health division 1,275 1,390 1,342 1,246 965Post Office 34,950 36,557 37,892 36,052 32,073Privy Council 59 58 54 53 51Public Archives 189 203 212 212 175Public Printing and Stationery 291 302 295 289 248Public Works [DOT] 18,685 19,819 25,453 17,648 13,983Railways and Canals 3,870 4,122 4,479 3,997 4,028Maritime Freight Rates Act 7,178 7,401 10,327 9,187 10,650Royal Canadian Mounted Police 2,800 3,100 3,192 3,488 6,245Secretary of State 426 454 479 483 460Soldier Settlement Board Trade and Commerce- 1,442 1,362 1,300 1,036 851Department 3,245 3,252 4,955 6,417 3,335Mail subsidies and steamship subventions 1,026 1,083 1,323 2,999 2,083Canada Grain Act 1,856 2,271 2,356 2,306 2,136Total ordinary expenditure 350,886 357,707 389,539 372,505 364,425 Premium, Discount and Exchange It will be noted that only the net balance of the above account is included in the figures. During this fiscal year, the expenditure for this purpose will, it is estimated, total $8,000,000. Of this amount, $7,962,000 represents premium paid on gold purchased by the mint, the balance representing exchange on sundry items. This expenditure was more than offset on the revenue side by credits totalling $8,301,000, resulting from the sale of New York funds acquired by the shipment of gold, the discount on sterling purchased to meet London requirements, and the discount on sterling securities purchased below par for sinking fund purposes. This makes a net revenue for the year of $301,000. The inclusion of the net balance only in the accounts avoids the undue inflation of revenue and expenditure arising primarily from the governmental policy of centralizing and controlling the purchase and export of gold.



The Budget Mr. Rhodes Capital Expenditures The amount voted for capital expenditure was $9,678,100, of which $9,123,000 will be spent. Last year the expenditures on capital account amounted to $16,980,000 and for the year 1930-31 the expenditure was $28,222,000. Classified on the usual three-fold basis, capital expenditures for the last five years are presented in the following table: Capital Expenditures (000 omitted) Estimated. 1928-29 1929-30 1930-31 1931-32 1932-33 Canals $13 Railways 6 Public Works 3 Total capital expenditures $22 .164 $ 9,324 $ 9.842 $ 3,299 $3,129,302 6,603 6,371 6,242 1,582,343 6.574 12,009 7,439 4,412,809 $22,561 $28,222 $16,980 $9,123 Special Expenditures . Special expenditures, it is estimated, will amount to $42,483,000. This represents a reduction of $12,993,000 from the previous year. The two chief items in this classification are wheat bonus and unemployment relief. The carry-over of wheat bonus paid during the current fiscal year is $1,826,260, making a total outlay on this account of $12,734,689- considerably larger than was at first contemplated due to the unexpectedly large crop of 1931. Unemployment Relief On unemployment relief, the total expenditure during the year will be $35,603,000, which is a larger amount than the current annual cost of relief due to the fact that there was carried over from the previous year a large expenditure in respect of the Dominion government's share of the cost of relief works, the accounts for which reached us for payment some time after the actual expenditures were incurred by the provinces and municipalities. The total amount paid in respect of commitments arising out of the 1931 act was $17,300,000. of which $12,400,000 was for the public works just mentioned. The amount paid in respect of commitments carried forward from the 1930 legislation was $553,400, and the payments under the Relief Act of 1932 are estimated at $17,749,600. The whole expenditure may be summarized as follows: Public wrorks $12,531,100 Direct relief (including Saskatchewan Relief Commission, $4,600,000) 19.630,280 Other expenditures, mainly Dominion projects 3,441,620



A comparative statement showing special expenditures during the last five fiscal years follows: Special Expenditures (000 omitted) - 1928-29 1929-30 1930-31 1931-32 Estimated 1932-33Adjustment of War Claims Cost of Loan Flotations Miscellaneous Charges Reparations- Claims for Compensation $ 120 11 2,056 $ 95 17 3,027 6,700 $ 110 193 2,955 500 4,432 $ 91 1,350 3,500 1,331 13,190 25,106 $ 72 1,551 3,165 266 553 17,300 17,750 1,826 10,908 8,599 Total Special Expenditures 2,187 9,839 16,789 55,476 42,483 The Budget-Mr. Rhodes



Loans to Provinces Loans by the Dominion government to provincial governments under authority of the Relief Act, after taking current repayments into account, amounted to 117,489,725. The loans carried forward from the previous fiscal year totalled $22,544,422, on account of which $2,000,000 was repaid during 1932-33. The total presently outstanding is therefore $38,034,147. Two provinces-Manitoba and British Columbia-were given temporary assistance in meeting maturities in New York, undertakings having been given that the loans by the dominion would be repaid from refunding issues in Canada. A portion of such loans has been repaid, as well as $2,000,000 by British Columbia on account of a similar loan made in the previous year, the result being that the loans to assist provinces to meet their New York obligations increased during the year by a net amount of $506,716. The prairie provinces, in the spring of 1932, granted assistance in the form of loans for seed grain and seeding operations to farmers in areas that had suffered from drought, and the Dominion government co-operated in this emergency measure by lending the provinces the required amounts, aggregating $6,740,000, on account of which $630,000 has been repaid, leaving $6,110,000 presently outstanding. The loans for other provincial purposes, mainly for the financing of public works and direct relief expenditures, totalled $8,873,009, of which amount $6,500,000 was assigned to the financing of provincial and municipal share of the cost of public works under the 1931 relief program, provision for which extended over into the present fiscal year. It will be remembered that in view of conditions existing in the western provinces, [DOT] the dominion then undertook not only to pay the agreed share of the cost, but also to assist the provinces in the financing of the balance. In all* these cases, the dominion made the loans only after the most pressing representations by the governments of the provinces concerned, and as a temporary measure until these provinces, admittedly subjected to far-reaching readjustments in their budgets, were afforded the time necessary to arrange the financing of their own obligations. A summary statement showing amounts of loans and the purposes for which they were authorized, follows: Loans, 1932-33 net outstanding Loans covering obligations maturing in New York Loans re assistance to farmers, including purchase of seed grain Loans for provincial purposes including public works and direct relief Total$ 1,944,130 $ 380.000 5,590,000 140.000 $ 2,632,580 2,134,338 1,700,000 2,406,091 $ 4,956,710 7,724,338 1,840,000 2,968,677 562,586 Loans, 1931-32 net outstanding Total outstanding 2,506,716 9,637,189 6,110,000 8,873,009 10,907,233 17,489,725 20,544,42212,143,905 6,110,000 19,780,242 38,034,147 Loans and Advances, Non-Active The final classification of expenditure consists of those advances to corporations which are non-interest-bearing and are regarded as non-active. They are charged as expenditures for the year and are not treated as assets in establishing the net debt of the Dominion. Steamship Companies Under the head " Canadian National Steamships," provision is made for the operations of the West Indies service and the Canadian Government Merchant Marine. There was an improvement in the operating results of the West Indies service in 1932. The cash outlay from the dominion treasury for the year's operations was $753,716; the corresponding figure for 1931 being $916,568. However, as $161,448 of the 1931 loss was not voted until the commencement of the current fiscal year, our accounts for 1932-33 will show total loans of $915,164 to the Canadian National (West Indies) Steamships. The operations of the Canadian Government Merchant Marine fleet have been subject to some curtailment and 13 vessels not in service were disposed of during the past year. The dominion treasury furnished $326,613 for The Budget-Mr. Rhodes 1932 operating loss but, on the other hand, received back from the company $2,624,000 as a credit to previous years' advances. Of the latter amount, $600,000 represented working capital released as a result of lower commodity prices and diminished fleet and $2,000,000, a surplus transferred from the company's insurance fund. This fund accumulated by reason of the fact that the annual charges for the cost of insurance were greater than the losses realized, and as the government has financed directly the whole cost of the merchant marine, it is appropriate that the surplus so accumulated should, particularly in view of the reduction which has been effected in the operations of the company, be now returned as a credit against the loans made by the government in previous years. Taking into consideration these refunds, the accounts for the year will show a credit under the classification " Canadian National Steamships" of $1,383,000. The other non-active advances include $500,000 to the Quebec harbour commission, $2,447,000 to the Canadian Pacific Railway Company to enable the company to keep its shops open and provide employment for labour and $395,000 for Montreal harbour bridge deficit. The net requirements for loans and advances non-active will therefore be $1,959,000, as shown in the following statement which gives comparisons also for the previous four years: Loans and Advances, Non-Active (000 omitted) - 1928-29 1929-30 1930-31 1931-32 Estimated 1932-33$ $ 2,933 2,491 2,821 17 $ $ $Loans to Canadian National Steamships... Loans to Quebec Harbour Commissioners.. 758 2,888 1,827 3,491 170 1,199 1,379 534 1,383 (cr) 500 395 2,447 Accounts carried as active assets transferred 10,000 13,646 8,262 5,488 3,112 1,959 Summary of Expenditures expenditures for the year amounted to $417,- Grouping the 1932-33 expenditures together 990,000 as compared with $448,073,000 in as in the following comparative table, it will 1931-32, a reduction of $30,000,000. be observed that the total of government Summary of Expenditures (000 omitted)



1928-29 1929-30 1930-31 1931-32 Estimated 1932-33$ 350,886 22,809 2,187 13,646 $ 357,707 22,561 9,839 8,262 $ 389,539 28,222 16,789 5,488 $ 372,505 16,980 55,476 3,112 $ 364,425 9,123 42,483 1,959 389,528 398,369 440,038 448,073 417,990 Canadian National Railways All of the money required for the Canadian National Railways in 1932 was provided from the dominion treasury. It is well-known that as regards the volume of railway traffic, the year was very disappointing. Taking the system as a whole gross operating revenues suffered a decline of 19 per cent or over $39,000,000 as compared with the previous year. Notwithstanding that the management paralleled this decrease of $39,000,000 in gross earnings by a reduction of 321G The Budget-Mr. Rhodes



$44,000,000 in operating expenses, the net financial result for the year, after absorbing fixed charges due the public and exchange premium, was only slightly more favourable than in 1931. The dominion was required to provide in cash $60,058,506 for deficits, as compared with $60,968,438 in the previous year. These figures are for the whole system, including eastern lines, and take no account of interest amounting to $35,500,000 accrued in the accounts of the railways, but not paid, on loans by the government to the company. In addition to provision for deficits, cash must also be furnished for debt retirement and capital expenditures. The former are, of course, fixed and uncontrollable. Capital expenditures, however, have been drastically curtailed, the net in 1932, after crediting equipment retirements, amounting to $799,158, as compared with a corresponding figure of $34,373,262 in 1931. The following statement gives a comparison of the financial requirements of the system for 1932, as compared with the budget estimates, and actual requirements in 1931: Canadian National Railways-Financial requirements' Actual 1932 Budget 1932 Actual 1931Deficit- System (ex. eastern lines) $ 53,422,661 6,635,845 $ 42,784,610 6,217,400 $ 52,255,676 8,712,762Eastern lines 60,058,506 799,158 11,510,178 49,002,010 7,033,738 11,681,652 60,968,438 34,373,262 10,041,691 4,226,030 Capital expenditures Debt retirement Discount on securities issued Less working capital available 72,367,842 4,231,997 67,717,400 109,609,420 633,155 Amount required 68,135,845 67,717,400 108,976,265 Of the total of $72,367,842 required by the railways in 1932, $4,231,977, it will be seen, was secured from the working capital funds of the company; the balance of $68,135,845 was furnished by the government-$6,635,845 by payment of the deficit on the eastern lines as a charge on the consolidated revenue fund, and $61,500,000 by loan to the company under authority of the Canadian National Railways Financing and Guarantee Acts, passed at the 1932 session. The whole of the amount authorized was paid. One of the recommendations of the Royal Commission on Railways and Transportation, to which effect is being given in the legislation now before parliament, is that sums which are required to meet deficits should be voted by parliament annually. To implement this recommendation, the government has submitted an estimate of $53,422,661 in respect of the income deficit of the system in 1932, (excluding the loss on eastern lines already provided for by vote). This amount will be credited against the loans of $61,500,000, above referred to, leaving a balance owing the government of $8,077,339, which will remain standing as an interest-bearing loan, repre- senting as it does outlay for capital account and debt reduction. At the same time, loans of $41,121,216 made by the government to the Canadian National Railway Company in the fiscal year 1931-32 in respect of railway operations in 1931, will be transferred from the category of active to non-active assets, as these also represent loans for deficits. They will be added to the $614,000,000 of non-active assets shown in the public accounts for loans to railway companies and for the purchase of capital stock. In so far as the accounts of the railway company are concerned, the ultimate treatment of government advances, prior to the year 1932, representing partly losses and partly capital expenditures, will be governed by the action of the proposed board of trustees to whom the control and management of the railways will be entrusted. The royal commission has recommended that the question of the capital structure of the system have the early attention of the board of trustees. It should be understood, however, that so far as the government's accounts are concerned, the effect of treating these railway advances The Budget-Mr. Rhodes as non-active assets, has already been to absorb them fully into the government debt. As at March 31, 1933, the funded debt of the Canadian National Railways due the public will amount to about $1,263,000,000, having been reduced by $11,000,000 in the past year. Qf the amount outstanding, $965,000,000 bears the guarantee of the dominion. The company has also been able to retire a temporary debt of $9,008,250, by the utilization of working capital released through reductions in stores and material accounts. This debt represented the construction cost of the Manitoba Northern railway, a branch line undertaken in 1927 and financed under authority of order in council by temporary bank loans. Harbour Commissions Advances to harbour commissions totalled $6,657,000, a considerable reduction from the previous year when upwards of $14,000,000 was loaned. For the most part, this sum represents capital cost of port developments inaugurated some years ago. A statement of the advances in 1932-33 and four previous years, and the total advances to date, is as follows: Advances to Harbour Commissions (000 omitted) 1928-29 1929-30 1930-31 1931-32 Estimated 1932-33$ $ $ $ $Chicoutimi 500 815 846 465 324Halifax 30 1,272 3,539 2,752 1,023M ontreal-Construction 1,370 4,336 2,291 1,412 614170 534 395189 56Quebec 2,888 2,821 3,491 1,379 500Saint John 602 1,711 1,094 5,764 2,581136 1,544 747 255Vancouver 1,596 345 2,802 809 9096,986 11,436 15,777 14,051 6,657 Advances to date Chicoutimi Halifax Montreal-Harbour.. Montreal-Bridge___ New Westminster___ Quebec Saint John-Harbour Three Rivers Vancouver 2,950 8,616 58,003 1,099 26,309 11,752 2,682 22,326 133,982 It has been the practice to carry these loans, with the exception of those for the Quebec commission and the Montreal harbour bridge deficit, as active assets, on the assumption that they represented1 capital works that would sustain the debt incurred for them. Clearly, that has not been the situation with respect to the Chicoutimi, Three Rivers, Halifax and Saint John commissions. Interest can be paid only because it is added to the construction cost. It is proposed to transfer the advances to these commissions totalling $26,000,000, to the non-active category at once, as the financial position of these commissions is anything but satisfactory. It may be observed that Sir Alexander Gibb's recommendations for the control and operation of national ports would, if put into effect, involve further adjustments in the manner of recording the expenditures which the government has made for their development. Canadian Farm Loan Board The dominion continued to purchase at par the board's 5 per cent bonds to the extent that loaning operations required. Bonds pin-chased amounted to $850,000 and a subscription of $70,650 was made to capital stock- 321? The Budget-Mr. Rhodes



The capital furnished from the dominion treasury for the operations of the board now aggregates $8,137,115, divided as follows: Initial capital $5,050,000 Purchase of bonds 2,650,000 Purchase of capital stock 437,115



Having presented the revenues and expenditures under the appropriate classifications, we are now in a position to indicate the met results of the dominion's accounts for the year. Minor adjustments have yet to be made before the accounts are closed, but the figures given are believed to approximate the final balances for the year. With ordinary expenditures totalling $364,- 425,000 and revenues of $310,817,000 it will be observed that the resulting deficit on ordinary account is $53,608,000. When the budget was brought down last year, it was expected that the taxation proposals then submitted would increase the receipts to such an extent that there would be at least a balancing of the budget on ordinary account. The actual expenditure, as has been indicated has closely approximated the estimate. The explanation for the deficiency on ordinary account is therefore found in the failure of the revenues to attain the expected yield due to falling prices and shrinkage in business activity. Special expenditures, including $37,400,000 for unemployment relief and wheat bonus, amounted to $42,483,000. If against this sum there is applied $4,473,000 received in special revenues, there remains a balance of special expenditures not provided from income, of $38,010,000. In addition there are the capital expenditures of $9,123,000 and net loans and advances non-active of $1,959,000. The resulting increase of debt on government operations for the year is therefore $102,700,000, as compared with a corresponding figure in the previous year of $114,234,000. To give effect to the assimilation in our accounts of the deficit of the Canadian National Railways, tihe increase in debt of $102,- 700,000 on government operations will be augmented, as previously referred to, by the addition of a special charge of $53,422,000, resulting in a total addition to the debt, after taking into consideration the year's operations both for government and the railways, of $156,122,000. In the balance sheet, effect will be given also to the transfer from active to mon-active assets of $41,000,000 of advances to the Canadian National Railways in 1931-32, and of $26,000,000 of loans to harbour commissions, as already referred to. Loan Flotations The dominion has been able to arrange for the orderly financing of all requirements during the year, including provision for maturing securities and the financing of the Canadian National Railways. External borrowings in 1932-33 were for the purpose of meeting maturing obligations in New York. An issue of one-year 4 per cent treasury notes dated October 1, 1932, for the amount of $60,000,000, was sold to a New York banking group at 99-28 and accrued interest. From the proceeds of this issue a 5 per cent temporary bank loan, then standing at $13,000,000 but originally negotiated in 1931 for $19,000,000, almost entirely for railway purposes, was paid off and the cash balances of the dominion held in New York were restored to the extent that they had been utilized in making periodic payments on account of this indebtedness. The other maturing Obligation paid from the proceeds of this sale was the issue of $40,000,000 two-year 4 per cent notes which fell due December 1, 1932. In Canada $85,000,000 was raised by the sale of treasury notes to the chartered banks. The first issue dated August 1, 1932, was for one year at 4J per cent and was sold at par and accrued interest. The other issue of two-year notes, dated November 1, 1932, was for $35,000,000 at 4 per cent and was sold at par and accrued interest. In addition, for temporary financing, $12,000,000 of 90-day 4 per cent treasury bills dated October 15, 1932, were sold to the banks at par. These were called for redemption on November 3. A public issue of securities was made in Canada at the end of October. The offering was for $80,000,000 4 per cent bonds dated October 15, 1932, divided into two maturities:-$25,000,000 of three-year bonds and $55,000,000 of twenty-year bonds. The three-year bonds were sold at 99-20 and interest, yielding 4-28 per cent; and the twenty-year bonds at 93-45 and interest, yielding 4£ per cent. The .three-year maturity was immediately over-subscribed about three times, and all subscriptions in excess of $25,000 were allotted on a percentage basis. The twenty-year maturity moved more slowly but the books were closed shortly before the date set with a slight over-subscription, the total amount of the issue being $56,191,000. The whole issue is payable in Canada only, and the twenty-year bonds axe subject to redemption at par after fifteen years. The sale of the 4 per cent loan of 1932 was in charge of a committee representing banks and investment houses, under the chairmanship of Sir Charles Gordon, president of the The Budget-Mr. Rhodes Bank of Montreal, and operated along lines similar to that employed in -the national service and conversion loans of 1931. The expense of raising the loan, including commissions, advertising, printing, and delivery of securities, was about three-quarters of one per cent. The proceeds of the issue were used for the purpose of paying off $34,449,950 of 5J per cent renewal loan bonds which remained outstanding after the conversion loan of 1931, and the balance of the proceeds was devoted to the general purposes of the government. It is well to record that with this issue new ground was broken and for the first time -there was offered for public subscription in Canada, a dominion security bearing a 4 per cent coupon. While this factor produced some sales resistance, notwithstanding that the yield to the investor on -the twenty-year maturity was actually 4? per cent, it speaks well not only for the organization which conducted the sale of the loan, but also for the responsiveness of investors to the prime security of Canada that the issue met with success. The direct -obligations of the dominion in the form of unmatured funded debt are listed in the following statement: Unmatured Funded Debt as of March 31, 1933, and Annual Interest Charges Date of maturity Rate Where payable Amount of loan Annual interest charges% $ cts. S cts.1933-Aug. 1 4 2 50,000,000 00 2,250,000 001 4 60,000,000 00 2,400,000 001 (a) 5£ 169,971,850 00 9,348,451 751 3| 23,467,206 27 821,352 22July 1 5 33,293,470 85 1,664,673 541 4 35,000,000 00 1,400,000 001 5| 226,138,350 00 12,437,609 251935-Aug. 1 (a) 5 Canada and New York... 874,000 00 43,700 004 25,000,000 00 1,000,000 001936-Feb. 1 40,000,000 00 1,800,000 0015 5 79,535,200 00 3,976,760 001937-Mar. 1 (a) 5 Canada and New York... 90,166,900 00 4,508,345 001 (a) 5£ 236,299,800 00 12,996,489 001 3 8,071,230 16 242,136 901 3 18,250,000 00 547,500 001 3 10,950,000 00 328,500 001 3 \ 15,056,006 66 526,960 231 4£ 75,000 000 00 3,375,000 0015 5 141,663,000 00 7,083,150 001943-Oct. 15 5 147,000,100 00 7,350,005 001944-Oct. 15 4a 50,000,000 00 2,250,000 001 4* 45,000,000 00 2,025,000 001947-Oct. 1 2| 4,888,185 64 122,204 641 3 \ 137,058,841 00 4,797,059 431 5 100,000,000 00 5,000,000 0015 4 56,191,000 00 2,247,640 001 4f 43,125,700 00 1,940,656 001957-Nov. 1 4 \ 37,523,200 00 1,688,544 001958-Nov. 1 (b) 4i 276,688,100 00 12,450,964 501 (c) 4 \ 285,771,800 00 12,859,731 001 4 93,926,666 66 3,757,066 671 4 100,000,000 00 4,000,000 002,715,910,607 24 127,239,499 13Payable in Canada Payable in Canada and New York Payable in New York Payable in London $ 2,013,201,570 85 91,040,900 00 300,000,000 00 311,668,136 39 74-13% 3-35 11-05 11-47Less bonds and stocks of the above loans held funds S 2,715,910,607 24 as sinking 100-00%(a) Tax free in Canada. $ 2,649,908,882 73 (b) Tax free to Nov. 1, 1933, 5j% to Nov. 1. 1933 (e) 51% to Nov. 1, 1934.



27ie Budget-Mr. Rhodes


March 21, 1933