Winnipeg Free Press

Winnipeg Free Press (Newspaper) - June 18, 1969, Winnipeg, Manitoba Winnipeg free press wednesday june 18, 1969 finance business wrap up textile Appeal heard Ottawa up the Canadian textiles Institute heard an Appeal for North american quotas on imported textiles in the event that National agree ments cannot be reached to curb the flow of textiles from a burgeoning world Industry. Charles f. Myers jr., president of the american textile manufacturers Institute told a management conference of the Canadian Institute that some Low Cost nations notably Japan exercise extremely poor judgment in concentrating the bulk of their exports of certain textile items in United states and Canadian or. Myers said Strong United states government efforts Are currently being made to arrange meetings with these countries to secure International arrangements which would bring orderly growth to our textile if these negotiations fail he said it will be essential and urgent that our government do what Ever is necessary to resolve this problem even to acting unilaterally through quota bigger role predicted Victoria a prediction of an Ever increasing role played by government in financial affairs and a plea for accountants to play a watch dog role in the Stock Market were heard at the annual meeting of the British Columbia Institute of chartered accountants. A special study prepared for the convention by j. R. Petrie a Montreal consulting economist said comprehensive government planning will be a Way of life in 2000 in All the plea for accountants to help control the exploding growth of Stock Market investment was made by John a. Van Luven president of the Van Couver Stock Exchange. To borrow Edmonton up Alberta government Tele has been authorized by the provincial Cabinet to borrow for construction and to retire debentures coming due. The Money is to be borrowed on United states markets at eight per cent interest. Record earnings reported Calgary hydrocarbons Ltd. Had consolidated net earnings of or 96 cents a share in the first Quarter of 1969, the highest in the Calgary based company s history. An interim report said the 1969 figures com pared with consolidated earnings of or 71 cents a share in the first Quarter of 1968. Cash flows from operations improved 35 per cent to a record the results were achieved from Gross revenues of which Rose .41 per cent Over the realized in the three months ended March 31, 1968. The higher Revenue reflected the company s entry into the gasoline marketing Field unusually cold weather experienced in the company s propane distribution area in Western Canada and economies realized from operating efficiencies introduced in 1968. Bank of Montreal restricting Loans banking and investment companies in the United states and Europe took a look at Mani Toba this week. Pictured Are part of the group of 43 at Thompson Airport monday shortly before heading for Al in f Ion to end the six Day stay in the province. The group flew by chartered aircraft tuesday to the Northwest territories and will return to the . Later this week via British Columbia. Manitoba enters Multi currency Mart Toronto up the Bank of Montreal said tuesday it is refusing consumer Loans to customers who cannot get them at other Banks because of the cur rent shortage of Money. Several other Banks said they have reduced their consumer loan advertising in a move to restrict credit and hold Down prices. E. A. Royce senior vice pres ident of the Bank of Montreal for Ontario said his Bank has decided it must look after its own customers first. If someone comes from the Royal Bank and tells us he can t get a loan there Well Tell him it s just too he said. For other customers we have instructed our branches to ration credit. Each has been Given a quota of How much to lend although this quota will vary from Branch to the Canadian Imperial Bank of Commerce has removed its red convertible loan posters from most branches and a Royal Bank of Canada spokes Man said his Bank has with drawn its energetic Advertis ing of consumer Loans. I the Bank of Nova Scotia said it has not started a loan ration ing program although it will probably be More difficult for Large borrowers to get Money simply because demand exceeds Supply. Eight chartered Banks raised their prime lending rate to eight per cent from 7vz this week and the Toi onto Dominion Bank in creased its prime rate to per cent from the in creases followed the Bank of Canada s Lead last week in in creasing its rate to Ivy per cent from seven in an attempt to Brake the upward Cost spiral in the Economy. However no changes in con Sumer loan rates have yet been announced by the Banks. These Are generally dealt with in a separate loan department and Are made at Between 11 and 12--per-cent annual interest. Manitoba has become the first North american Bor rower to get Money from a unique european currency Pool in which 17 different currencies Are involved. Finance minister Gurney Evans said that just Over million in Canadian funds were borrowed in a 20-year debenture Issue dated june 17, 1969. An interest Coupon of seven per cent at an Issue Price of 97 per cent will bring an effective yield to investors of 7.19 per cent. This compares with the present rate for 20-year Bonds on the Canadian maker of nearly 8vi per cent. The Money be used for Manitoba Hydro develop ments was arranged through a consortium of underwriters headed by Krediet Bank . Of Luxem Bourg. Or. Evans said Manitoba which has been quietly studying this source of capital was fortunate enough to get a comparatively Good slice of the units of account Money. He said the Supply was limited with Only about million per month to lend anywhere in the world. Manitoba he said got in on the ground floor insofar As North american borrowers were concerned and the consortium has informed the province it will be Given a preferred Posi Tion in the line of borrowers when it plans on re entering this Money Market next Winter. The finance minister said a queue is forming from Many parts of the world to enter this unusual Market. The most unique feature of the loan said or. Evans was it reduced substantially the risk of Exchange rate changes in individual currencies. This european currency Pool through its units of account system gives considerable stability to re payments. Under the formula if All 17 currencies change from their official International monetary fund values with a notable swing in one direction then repayments will be based on that. A minimum of two thirds of the different currencies must swing in one direction before changes Are made in repayments. If two thirds swing up wards then repayment will be increased to the level of the currency showing the smallest Rise. For example if the deutschmark vent up 12 per cent and the greek drachma went up the least of All say two per cent the repayment increase would be based on the two per cent Rise. Similarly if two thirds of the 17 currencies declined in value the decreased re payment would be pegged to the one currency showing the smallest drop. This said or. Evans gave Broad Protection to both Borrower and Lender compared with borrowing through a single currency where greater fluctuations could occur. The minister said that the Day his Deputy Stuart Anderson arranged the seven per cent loan euro dollars were being Lent at per cent on 30 Day terms. Or. Evans said this action was one of several to broaden Manitoba s capital base. The province he said needed capital to grow on. Borrowings were aimed at meeting the needs of its self supporting operations such As the Hydro and Telephone system where interest was paid and Capi Tal repaid out of earnings not taxes. Such he said made possible new industries new jobs and new wealth with a Broad ened tax base for the province. Or. Evans said he had determined several years ago that the Supply of capital would be one of Manitoba s main problems. For the past two years a strengthened Effort to establish Manitoba credit in the world s capital markets has been undertaken. Last year Manitoba made its first German loan at favourable or. Evans noted paying less than the Federal government did. As Well in 1967 or. Evans went to the securities Exchange commission Washington to pave the Way for the first Public Issue in history of Manitoba Bonds in the . This was followed by addresses by or. Evans to groups of leading investors in new York Chicago and san Francisco As a prelude to the million Public Issue which was sold in two Days. A later loan of million was obtained through the same Channel. Or. Evans said these Loans were arranged by the province s financial agents in the . Made up of the . Subsidiary of the Canadian investment firm of Wood Gundy securities limited and the leading . Firm of Drexel Harri Man Ripley. These two firms on their own behalf arranged for.43 senior investment representatives of insurance companies pension funds and Banks to visit Manitoba in the past few Days. Their local itinerary was prepared by Manitoba s finance department. The group principally from the ., with representatives from England France the Netherlands and Switzerland flew to the Kettle rapids Hydro project on the Nelson River june 15. They were guests of the Manitoba government for dinner that evening and visited Thompson june 16. After an overnight stay in flin flon the group proceeded to Saskatchewan the Northwest territories and British Columbia. Nearly half of the group s six Day Canadian tour was spent in Manitoba. Or. Evans said this close and continuing arrangement was beneficial in providing leading investors with a first hand look at Manitoba development and its Poten tial. 17.5. Auto ads under fire los Angeles special advertising is the latest facet of the Auto Industry to come under attack by . Governmental officials. The Federal Trade com Mission is preparing for hearings in september on Price advertising As used by both manufacturers and dealers. In California the attorney general s office has for the first time filed a suit claiming misleading Adver Tising against an Auto manufacturer. The office had filed several suits against dealers. Both announcements come when Auto companies Are using More Price and com Parison advertising. The High number of unsold new cars in dealer hands and a less than spectacular level of Auto sales Are spurring these get Tough Advertis ing approaches the Etc hearings will actually cover More than just Price advertising Al though that particular approach will be under special scrutiny. The timing of the hearings is sure to give them publicity september is the month automakers announce prices of their new models and prices this year As in the past three years Are expected to Rise. Etc will try to determine new legislation is required to prevent mislead ing advertising by Auto makers. They la look into five Basic areas do advertised prices include All the charges applicable to the Model being sold Are ads claiming the current Model year car is less expensive than last year s Model misleading be cause of the selection of options used in the compar Ison Are new car prices falsely lowered by deleting some Standard equipment ate Price increases caused by warranty reductions hidden from the pub Lic Are suggested retail prices inflated so dealers can allow higher Trade in allowances in the California Case the attorney general s action last week charging Chrysler corp. With misleading advertising is significant be cause it demonstrates we re expanding our Hor said Miles j. Rubin senior assistant attorney general. The add materials come from the manufacturers so they Bear the ultimate he continued. The Chrysler suit filed in Superior court by attorney general Thomas c. Lynch claimed that the automaker advertised its Sunbeam Al Pine it for monthly pay ments of when in fact the complaint alleges a Down payment of a pro x i m a t e by and monthly payments of approximately for 36 months Are required. The complaint said the advertisement in question was headlined. Sporty Al Pine it with automatic transmission a according to or. Lynch a big meet Here the society of Industrial accountants of Canada an association of manage ment accountants from business and Industry across the country is holding its annual National conference in Winnipeg next week. E. H. Orpin conference chairman says 240 Mem Bers of the society Are expected to attend the june 23 to 25 meeting at hotel fort Garry plus 120 wives. Members of the society usually Are key personnel who have taken the association s five year course of instruction leading to the professional designation of registered Indus trial accountant. Many Are company managers. Conference theme this year is focus on the management speakers include prof. P. C. Briant director of the school of Commerce at Mcgill University d. V Fowke senior partner with Hickling Johnston Ltd., a Toronto firm of Industrial psychologists Stewart d. H. Thomas assistant comptroller of Canadian National railways in Montreal j. E. Cooke head of the depart ment of administration at the University of Saskatchewan and Lloyd e. Par Ker with the management sciences and technical applications division of ism s Field systems Centre in Toronto. The conference combines a lecture series with an an Nual meeting to be held the afternoon of june 25. National president is Darryl Campbell of Vancouver. Footnote explained that the monthly payment figure was based on manufacturer s suggested retail Price for Sunbeam Alpine it 2 door Hardtop East coast p.o.e., with Down 36 monthly payments. Inter est dealer preparation and destination charges state and local taxes and other optional equipment sex the defendant knew and should have known at the time that such representation was untrue and mis or. Lynch said. By use of such representation in connection with the _ conduct of its business the defendant intended to deceive induce and mislead members of the Public into purchasing its motor a Chrysler spokesman notes that the advertise ment in question was a National and and that it is still running in other parts of the country. He said the figures in the and had been checked out and were accurate As explained in the footnote. Wheat exports increase wheat exports in the week ended june 11 were bushels above the previous weeks total reports the Board of Grain commissioners. In a weekly statement the Board said exports totalled bushels compared with the previous week and the same week a year ago. Visible stocks of Canadian wheat totalled bushels an increase of Over the previous week. Farmers marketing of wheat totalled bushels greater than the previous week and the same week a year ago. Other Grain exports with the previous week s total in brackets Oats nil Barley nil Rye nil flaxseed rape seed Farmers marketing of other grains Oats Barley Rye flaxseed rapeseed visible supplies of other grains Oats Barley Rye flaxseed rapeseed shipments from country ele v a tors wheat Oats Barley Rye flaxseed rape seed Lakehead stocks of All grains totalled bushels an increase Over the previous week s total of bushels. On business by Douglas h. Fullerton Benson theory Okay but will it work Edgar Benson s budget like most budgets has received mixed reviews. I feel a bit ambivalent about it myself i applaud the new initiatives he has adopted to try to curb inflation but i have my doubts about How effective they will be. First a word of Praise about the form of the speech. It was Short and the language More direct and Freer from jargon than usual. The boys Are really learning to communicate. If you doubt me look Back at or. Fleming s Long winded and turgid budgetary ser Mons of a decade or so ago. Brevity and clarity Are of course Only the sauce that goes with the meat what of the Content no one can effectively Challenge or. B e n s o n s diagnosis that inflation is our no. 1 problem nor his objective in striving to produce the first respect Able budgetary surplus in Over a decade. When the economic pot is boiling one does t add to the heat by running the government at a deficit. This is conventional wis Dom but unlike Many such strictures it still is sup ported by almost All of the economic Community Here or elsewhere. If there Are Haws in the budget they most Likely reside in the individual and s e elective anti inflationary measures proposed not in the general direction of budget policy. Or. Benson suggests that since the extent of inflation varies markedly from Reg Ion to Region the program should if possible hit particularly those areas where inflationary pressure is strongest. Hence the proposed de ferment of depreciation allowances on commercial buildings put in place up to tie end of in cities of Over in Ontario Al Berta and . He Hopes that this will ease the pressure on construction resources and divert More of them into housing and Industrial use and possibly also help to slow the incredible recent surge of 10 per cent to 15 per cent a year in construction wages. I like the theory but i Don t think the scheme will have much Impact. Will a builder with his plans drawn up and with his labor costs rising at 10 per cent or More a year wait until 1971 to avoid a live per cent annual penalty on his in come tax a few May but most will Likely assume that continuing inflation imposes greater costs on the Man j who Waits. Now if the penalty on such construction had been a bit rougher say a 10 per cent excise tax on materials or a special 10 per cent wage tax then we might see More results. Still the concept of differential regional taxation has now been sanctioned and will probably be More j extensively used in future. We might even Sec special Low tax rates on residents or businesses in the slow growth areas such As the Mari times designed to supplement the array of pro Grams a v a i 1 a b 1 c from or. Marc h a n d s new department. How will the wealthier areas react Aye there s the rub As for or. Benson s Tariff cuts they too make sense both in terms of lowering prices and in their regional Impact most protected manufacturing lies in Cen trial Canada. This p o w r f it 1 Anli inflationary weapon has never really been used in this Way before because have preferred to save our Tariff reductions Tor use in bargaining with other coun tries for culs in their tariffs. Yet it is difficult to think of a Way of bringing prices Down faster than to expose our manufacturers to greater import Competition. The tourist exemptions Contri Bute to this same goal. Maybe we should use the Tariff instrument with even More vigor although undeniably it would have Little Impact on the service and construction segment of the Economy from which much of the inflationary Rise in prices seems to be currently j derived. The tax on air travel is a user tax pure and simple and will help defray the costs of running our air ports. Apart from it and the retention of the three per cent surtax on income the budget contained Little else of note. Clearly it is not a budget to Send anyone into rap Tures and even a supporter of the Overall anti inflationary approach cannot help but wonder about its effectiveness. Is not our inflation now largely beyond the control of either fiscal or monetary policy and linked to institutional forces which can Only be controlled by direct action on prices wages and investment if i take a pessimistic View of tie Impact of the budget i must admit that the Medicine or. Benson prescribes is right by All tie conventional standards that he did try some new gimmicks and that his speech was Short and Clear. Let s give him a a plus or even a a minus for Effort ;