Winnipeg Free Press

Winnipeg Free Press (Newspaper) - June 17, 1968, Winnipeg, Manitoba M.1 monday june 17, 1968 finance by Sheldon Bowles the continued strength of the Bond Market during the first two weeks of june has raised the possibility that the ceiling on mortgages insured under the National housing act will be lowered to 8% per the present 9vs per cent on july 1. The Nha rate is set 2% per cent above the average yield on Long term government of Canada Bonds As reported on the four wednesdays proceeding the quarterly setting of the rate. On april 1 the rate was increased to 9% from the 8% per cent set Jan. 1 and the next review of the rate will be july 1. Most prospective homeowners however won t no Tice much difference. When the rate was raised to 9 % per cent lenders found Borrower resistance set in at about nine per cent. The result has been that most Nha mortgages approved recently in the Winnipeg area have been in the 8% to nine per cent Range. A look at the kind of interest being paid on an loan with nine per cent interest gives an indication of Why Borrower resistance sets in. Just to pay the interest charges on the loan the first year would require payments of More than a month. With average taxes for Nha borrowers running about on a National average and a monthly pay ment of set by the Nha less than a month would be applied to the loan itself. Interest charges on the loan for the first year would total More than As Well As the High interest rate charges the rate also deters new homeowners because the Central mortgage and housing corporation the housing Agency of the Federal government is unlikely to approve a guaranteed loan if monthly charges exceed 27 per cent of the Borrower s income., in order to qualify for an mortgage the prospective Borrower would have to have an income of at least a year. By the time the Homeowner had paid off his mortgage his Home would have Cost him the result of paying a total of a year for 25 years. With borrowers becoming More and More aware of interest charges mortgage lenders Are not surprised when prospective customers balk at the thought of paying a year for 25 years just to pay off an mortgage. The difference of two percentage Points can make quite a difference Here. Last year at this time mortgages could be a. Ranged at seven per cent the maximum Nha rate at that time. At seven per cent the. Monthly payments on an mortgage came to including principal interest and taxes. To qualify for the loan the Borrower would have needed a salary of and the total Cost of paying off the mortgage at the end of 25 years would have been the present High mortgage rate is partly the result of High interest general and partly the result of a new formula for setting the Nha rate introduced by the government last. September. Before the september setting of the Nha rate last year the rate had been set at-iy2 per cent above the average yield on Long term Canada Bonds As reported on the four wednesdays preceding the setting Date. Under the new formula introduced last september the spread Between the government Long term Bonds and the mortgage rate was increased to 2% per cent. By keeping such a Large spread Between the Bonds and mortgages the Federal government is hopeful of attracting More private funds into the mortgage mar Ket As the government has Cut Back to million from million the. Funds available through Chc for private housing while calling for a boost in housing starts to this year. German banker says 6we have to assume . Will do right by j. A. Livingston Zurich Switzerland special this is a message o Congress not from the gnomes that supposedly reside and cause ebbs and flows n International Confidence but rom sober hopeful Bankers businessmen and government officials in Frankfurt Bonn Bern and of course Zurich. It s raise Only in that Way will the United states demonstrate that t Means to Stop stuffing the Central Banks of Europe with unwanted dollars. Whether diplomatically phrased or impatiently out spoken the message is unmistakable. Here it is in direct quotes Otmar Emminger a director the German Bundesbank Frankfurt one of the architects of the special drawing rights agreement at Stockholm we Lave to assume that the United. States will do the right tilings until All Hope is gone. Will americans take the measures to restore Confidence the Dollar is not overvalued n spite of wage Price and Cost increases in the last 18 months. To devalue the Dollar would open a Pandora s Box which no responsible Central banker vants to Deal with. It would be a far greater problem than that which now confronts the . A Clear tendency toward improvement in the . Bal Ance of payments p o s i t i o necessary. Then Confidence in the Dollar and the International monetary system would in Franz Josef Tro vain director of the economics department of the Deutsche Bank Frankfurt largest commercial Bank in Germany we Trust the Dollar. Basically it is the strongest currency because the . Is the strongest nation in resources. We recognize that you have special burdens the Vietnam War foreign Aid and capital exports investing abroad. However the . Bears a special responsibility for inter National economic development and International monetary stability. It is quite Clear in Europe that without a Cut in Federal expenditures and an increase in taxes the present International monetary difficulties can t be Kurt Richebacher general manager of the foreign depart ment Dresdner Bank Frank Furt second largest in Ger Many the . Is Messing up the world. Every country has to accept the rules of the game to expand or slow. Down according to its balance of in Central Bank coffers. France and Gold and very Little else. Other Industrial nations hold Large number of dollars. Central Bank reserves b sold j dollars including some Sterling sources Federal Reserve International monetary fund Swihar 4 3 a . A a. Living Ion payments position. America is not yet remedying its budgetary deficit. It is relying on monetary policy. And it is forcing up interest rates All Over the John p. Mccardle vice president for european operations Honeywell inc., Frank Furt european businessmen Are worried that the . Will not Correct its balance of payments deficit and that will cause a crisis. We have had to give up one project a merger because of . Controls. We could not be sure of the Guenther Harkortt German Deputy Secretary of state for foreign Trade and development Bonn All we can to is wait and see. We want to do everything we Caa to help the United states. We Are following an expansionist policy for internal reasons. This is Good for the Dollar and the Pound. The crucial question is what is Congress going to Bruno Muller vice director of the ministry of finance Bern my personal opinion is that there Are reservations about the Dollar. I would t buy dollars at the moment because i would t sleep quietly. I would do it later if the balance of payments deficit were better. Oliree stages Are necessary first a reduction in the deficit second equilibrium third a Small surplus. Then you could sleep nights with dollars in your Alfred Hartmann general manager Union Bank Zurich largest commercial Bank in Switzerland things Are out of the hands of the Central Banks. The situation is fragile. Invest ors forced the abandonment of the Gold Pool. Now the urgency is to restore Confidence because things can go out of control. Europeans Are disappointed. The. . Government has not Cut expenditures sufficiently and the president has not been Able to get through Congress a tax increase which has been obviously necessary for a Long time. And so we doubt that the . Is Able to balance its payments and we wonder if it is willing. The Dollar is still considered to be one of the strongest currencies. It is foolish to think it is overvalued. Devaluation of the Dollar is a nonsense. Other european countries can t allow it for competitive reasons. We Are sitting in an Ameri can boat and it s Edwin stopper president of the Swiss National Banff Zur Ich we Are not in a Comfort a b 1 e monetary environment. These Are times of financial tension. I can t predict what will happen to the Dollar. I am not a Prophet. Is our wish and our Hope that the Dollar remains the leading currency. The . Balance of payments deficit has gone on too Long. As a result there Are too Many dollars and holdings of dollars Are regarded As a loan to the most powerful country in the world. If the . Were to Demon Strate that it can reduce substantially its deficit prob Lem would change and attitudes would change. Now the . Is regarded As a debtor country because of its persistent deficit. A surplus once or twice would be excellent. Even a reduction in the deficit would be useful. It would cause to think that the Dollar once again would be scarce. The Dollar once again would become Desir Able. And if the . Then ran a deficit the leading country would be extending credit in people s minds instead of and How do europeans feel the . Can demonstrate its earnestness its intention in two words raise taxes. Consumer spending lifts Canadian Economy by Ken Smith Jana Ian press business editor continued strength in con Sumer spending is buying up he Canadian Economy. Without it the Over All performance in the first half would probably be spotty despite some outstanding statistics produced in such areas As exports. The Maclean Hunter research Bureau reported last week that in the first Quarter retail Trade was u p 8.1 per cent to from the previous year. Although detailed statistics Are lacking for the second Quarter Early indications Are that the Sharp increase in consumer spending had been carried on. A Bright spot in the retail picture was the 8.4-per-cent gain in motor vehicle sales to the Bureau reported. Another was the 9.2-per-cent increase in department store sales to although part of the gains were eaten up by higher prices together they showed that people freely. With Are ready to spend the continuing lag in capital investment and efforts especially on the Federal level to contain government spending the consumer surge is taking up what otherwise into increasing could Slack develop in the Economy generally. There were indications of a slight downturn in activity in March but the Canadian association of purchasing agents reported that it appeared to have picked up again in april. The association said 30 per cent of its members reported higher bookings of new orders in april than in the previous month while Only 17. Per cent said business was off. About -32 per cent reported higher compared with 13 per cent telling of a fall-off., per cent telling of a fall off. Elsewhere business news was mixed. Ottawa reported that unemployment Rose last 4.9 per cent on a month to seasonally adjusted basis the highest for any month in four years. Although there was an in crease in the size of the work Force of almost front a year ago the labor Force grew in the same period by As a result there were persons listed As out of work last month More than a year ago. On the More cheerful Side the Dominion Bureau of statistics reported that exports for the first five months of this year Rose 17.6 per cent from last year. Last month s foreign sales were Worth up 13.3 per cent from May 1967. Much of the improved first half of this year. It put total payments up two per cent torn last year and a gain of 11 per cent from in 1966. Mormance in the first per. Five months of this year came about because of a 26.5-per-cent gain in sales to the United states to the Toronto brokerage House of j. R. Timmins and co reported that dividend payments by Canadian corporations reached record Levels in the weekly metals review new York a an explosion that blew up a Bridge in Zambia and temporarily Dislo management specialist Aims to put Clairton in Black Stellarton . Up a business executive from the new wave of International management specialists Aims to turn troubled Clairton sound corp. Into a Money maker. J. W. Will Mangels 42, new president of the Canadian elec tronic firm is. A Tough minded expert in coaching manufacturing companies into profitable performances. As a member of the International management consultant firm of Mckinsey and co. Inc. Of new York he roamed Indus trial United states Canada and Britain trouble shooting for Large corporations in financial or production difficulties. When Winchester Western division of Olin Mathieson Chemi Cal corp. Of new Haven conn., ran into troubles similar to Clairton a or. Mangels was a member of an executive team brought in to give the Diversi fied manufacturing company new direction. He was vice president in charge of business development six years later when the. Call came from Clairton. It was an exciting pros he said in an interview. The Challenge was too Good to he was already on the Job As managing director when his appointment As Clairton presi Dent was announced in May. In three crowded months of flying visits Between Clairton s Toronto Headquarters and its on the Stanfield team Eric Stefan soil Selkirk he exudes Calm Confidence and a sort of dogged determination. Not flashy but Winnipeg free press vote progressive conservative even acre manufacturing Plant Ere he has made extensive Hanges in the company. He introduced rigorous Cost controls installed programming systems or All major products and licked a new executive team. Ironically Clairton s pro Ems arose because until recent a it has been so successful or. Mangels said. Founded 10 years ago by Eter Munk a 38-year-old elec sonics Engineer and his part Ner David Gilmour a designer Lair one emerged from a tiny Oronto engineering shop to compete with Large companies marketing High Quality stereo monographs. To expand production Anc enter the growing International Market for color television Blair tone in 1966 built its huge Plant Here. Industries estates Ltd., the Nova Scotia town development corporation helped it become established. But the Standard Market fore cast that North american would buy a vast number o color to sets in 1966 a wrong. Clairton could not Sel enough of its color to production and on total sales of More than tile company lost what happened to Clairton happens to most High growt or. Mangels said As they grow an increasing Complex organizational Struc Ture is needed to run them. The management techniques tha work Well i a Small compan won t always do the Job in Large corporation he said. The company expects Thi year s sales to be near close to last year s Fig ure and to solidify this position As a base on which to build. Ated movement of Copper from landlocked Central african country resulted in higher Coper prices on the London Metal change this week. Zambia produced tons f Copper last year. Its principal customers Are Britain Japan est Germany Italy and Ranee. A smaller amount is but to the United states. In the us. Copper Industry Domestic brass Mills reported Jicome order volume As fair to Ood says the american Metal Tarket the daily newspaper of he Metal working Industry. Delivery Lead times for most Opper brass and wire Mill products continued to improve it some buyers were reported till exerting pressure of sup pliers to Speed up deliveries Crucible steel corp., a. Major Peci Alty steel concern said it Viu offer discounts on Flat rolled stainless steel if Price cutting Onti aues beyond july 31. Sources have said that . Steel corp. Is offering discounts f up to 20 per cent to some distributors of stainless steel products in the Chicago area on bulk orders of 100 tons or More. steel has declined comment. Major metals prices c o p p e cents Pound delivered foreign 50.86 cents nominal new York. Cents a Pound York 12.80 cents St. Louis. Cents a Pound East St. Louis 14 cents new York. Cents a Pound unalloyed ingots delivered. Cents a Pound electrolytic cathodes port col Orne ont. Argus corp. Ltd., pre 62v2 cents pref. 65 Cert class b pref. Cents All Ai gust 1 record july 11. Class pref. 14 cents common cents both sept. 2, record jul .31. Dividends Dominion dairies Ltd., Corn Mon 20 cents july 12, Recor june 28. First National Bank 50 cent . Funds aug. 1, record jul 3. Hughes Owens co. Ltd., Clas a 20 cents class b 10 cents pref. 40 cents All july 15, rec Ord june 15. National Trust co. Ltd., com Mon 16 cents july 2, Recor june. 13. Selkirk holdings Ltd., class cents june 28, record Jun 14. P. L. Robertson. Manufacturing co. Ltd., 1st pref. 30 cent. July 1, record june 20. An ounce new Ork 248 Pence London. At major reason for the improvement was an increase in payments by As Banks to institutions such from last year. Utilities paid out compared Willi and miscellaneous Industrial companies against payments from raining companies dipped to from in 1967. The investors group appointments h. Young the investors group announces the appointment of q. C. W. Binford As assistant manager of the securities division which is responsible for about billion in securities investments. A. W. Harrison has been appointed portfolio manager of investors International Mutual fund Ltd., with assets under management of about million. N. H. Young has been appointed portfolio manager of provident Mutual fund Ltd., with assets of about million and the newly formed provident Stock fund Ltd. Subscribe now invest in a new Manitoba Enterprise growing to beat 70 new cruise ship on Lake Winnipeg in 69 Lake Winnipeg navigation Ltd. New Issue of 6% non cumulative preferred sh4res and common shares now issued to the Public in units of 90 preferred shares and 10 common shares at per unit. An 800-ton, 3-deck steel hulled luxury cruise and freight ship is to be in service in 1969, serving Winnipeg Selkirk and Lake Winnipeg ports. The ship will provide summer cruises and excursions for tourists and Manitoban As Well As fall Hunting trips. During the Winter its 80 Cabins. Dining room convention and recreation facilities will turn it into a unique first class Winter resort at a downtown Winnipeg location. A Bonus cruise or excursion is offered to investors who participate in this new Manitoba venture. Tor a copy of the prospectus fill in and mail the Coupon below to Lake Winnipeg navigation Ltd. Or Telephone 775-7120. To Lake Winnipeg navigation Ltd 800 Portage ave., Winnipeg please Send me a copy of your prospectus and other information. Address ;