Suchergebnisse

About eighteen months ago I had begun to fear that Canada might come out of the war with too low rather than too high a price level. I felt that if production and employment averaged little or no higher after the war than before it, and if prices were no higher than in 1944, the national money income would sink to the point where federal revenues would develop an enormous chronic deficit of, say, 30 to 50 per cent of current expenditures. Such might be the outcome, no matter how high the rates of taxation employed. Ultimately deficits of so great a size would lead to an expansion of bank credit and hence to a higher price level, but in the meantime the country would experience a demoralizing series of political and financial crises resembling those in France between 1920 and 1927. In the design of high policy I felt that care should be taken to avoid such an outcome, which would leave our political system and our social structure greatly weakened.

This study aims to measure the net investment or savings of individuals and enterprises in Canada. Two methods are available, the inventory or change of stocks method and the production or flow of goods method. The first compares the capital value of all durable goods at the beginning and end of the period in question, at constant prices, the difference being net saving or dissaving (inventories excepted). The sources for this approach consist of balance sheets and other data of the type used in making an estimate of national wealth. The second, the production or flow of goods method, utilizes records of retail sales of durable goods and, where sales data do not exist, figures of production, imports and exports, etc. From these sources the selling value of all durable goods sold or available to be sold, i.e. gross investment, is estimated. From gross investment is subtracted an estimate of the value of durable goods required to maintain existing capital intact. The remainder, which we shall call net investment or net saving (the additional adjective aggregate being taken for granted in both cases), represents the value of the net addition to the stock of durable goods.To the layman, net investment appears remote from net saving. It can be demonstrated, however, that it does not differ significantly from saving, at any rate for statistical purposes. By saving is meant excess of current income over current outgo. Current outgo is taken to include appropriate charges for depreciation but excludes repayment of debts. Saving or non-current outgo is defined to include many consumers' expenditures for capital goods, as indicated in Table I.

The Report of the Alberta Bondholders' Committee contains the most detailed application of Canadian national income figures yet published for purposes of argument. Owing to the difficulty of breaking down national figures for provincial purposes, and the important effect of small errors in the total income upon the residual "margin of income", the corrections presented below are of interest. Certain deductions from Alberta's income are made to avoid double counting (table I) while the value of "necessary expenses" is estimated with more care (table II).A detailed explanation and justification of the revised estimates of income in table I is given below in section B, and of table II within the table, and in section C. It is only fair to add that there is more room for difference of opinion in the interpretation of necessary expenses than in correcting estimates of income. More than statistical technique is involved, as there must also be some value judgments.

The slowness of the industrial recovery is gradually disclosing unmanageable situations in public finance. From the standpoint of public debt, countries engaged in the export of staples fall into three classes: (1) those where widespread default occurred in 1931 or 1932 on both public and private debt and where little or no resumption of debt service has occurred, such as most of the South American republics; (2) those where a critical position appeared early in the depression, followed by collective adjustment of internal debts and measures designed to maintain the level of prices, such as Australia and New Zealand; and (3) those where little or no public default or manipulation of debts, foreign exchange, or price levels has hitherto occurred, such as the Union of South Africa and Canada. Newfoundland occupies a curious position, more like that of European countries, having undergone a political as well as a financial reorganization. The Argentine occupies a position intermediate between groups (1) and (2).