Actual gain in cash position of Canadian foreign trade 

 is stronger by $150,000,000 than 12 months ago. Both 

 exports and bank clearings have declined less than our own. 



Land values have happily escaped most of the inflation 

 which carried wheat on the ground from 70 and 80 cents 

 a bushel to $2 and $3. Pessimism, faithfully portrayed 

 by commercial reviews, in their New Year's greetings, has, 

 as was human, run riot in western mercantile centres. The 

 fundamentals, calling for more industry in compilation, 

 have been neglected. 



Grain production is of record size. At the lowest prices 

 since 1915 the farmer receives more real value of all kinds 

 out of those prices than wheat boards could ever bring to 

 him. Land values at least have not to undergo the 

 sharper wrenches of deflation. 



Immigration sets in. Building revives and building 

 costs decline. Production increases. Where is the out- 

 look better or as good ? 



A Field For British Industries 



Under the title "Canada a Field for British 

 Branch Industries," the Commercial Intelli- 

 gence Service of the Dominion Department of 

 Trade and Commerce has issued an attractive 

 pamphlet, outlining in a comprehensive manner 

 the advantages accruing to British manufac- 

 turerslocating in Canada. The booklet, compiled 

 by Mr. P. W. Cook, Junior Trade Commissioner, 

 assisted by officials of the Natural Resources, 

 Intelligence and Water Power Branches of the 

 Department of the Interior, the Departments 

 .of Labor and Secretary of State, etc., fills a long- 

 felt want; we propose to publish monthly 

 (with permission) selected chapters. 



The following is a general review of the 

 publication which, clearly printed on good stock, 

 well illustrated by half-tones, graphs, maps and 

 diagrams, should be read with interest by every 

 progressive, British business man. 



To appreciate the present condition of Canadian in- 

 dustries, one must look back a little and trace their devel- 

 opment in the last few decades. Broadly speaking our 

 present industries are of very recent growth, a growth which 

 may be said to have commenced about 1896. Prior to 

 that date Canada could not justifiably be called an in- 

 dustrial country, as agriculture constituted by far the 

 greatest proportion of her total production. However, 

 during the last thirty years her industries have increased 

 tremendously. As an American writer put it in a small, 

 but very intelligent handbook on the Dominion of Canada, 

 published by the Bankers' Trust Company of New York, 

 "The _ combination of cheap power, favourable living 

 conditions for labour, and good labour markets, is rapidly 

 transforming Canada from a country which a few years ago 

 was almost wholly agricultural, to one in which the manu- 

 facturing interests are of great and growing importance." 



In illustration of the truth of this statement it may be 

 pointed out that in round figures the total value of in- 

 dustrial production, that is to say of manufactured pro- 

 ducts, increased from $368,000,000 in 1890, to $3,015,000,- 

 000 in 1917, or nearly 1000 per cent, an increase which one 

 might seek far to find equalled. In 1913, manufactured 

 products constituted 13 per cent of Canada's total exports; 

 at the Armistice they constituted 42 per cent. For the 

 first time the very great natural resources of the Dominion 

 are being properly exploited. Our water-power is being 

 utilized as it should, and the many inherent conditions which 

 favour manufacture are being wisely made use of. Ad- 

 ditional factors which have helped this expansion are the 

 very recent exploitation of Western Canada, the general 

 increase in the population, the development of our export 



markets, particularly those fostered by our preferential 

 tariffs, and lastly, but by no means least, the influx of 

 foreign capital. 



Attractions for Foreign Investor 



It is inevitable that the exploitation of a new, exceed- 

 ingly large country, such as Canada, rich in resources 

 and under-populated, should attract the foreign investor; 

 fortunately so, because in its first industrial expansion no 

 country can supply its own financial needs. 



Prior to the war, Germany, France and Great Britain 

 supplied capital by the purchase of bonds and debentures. 

 The United States, keenly alive to the future of Canadian 

 development, were not slow to do more than this, namely, 

 to establish in Canada a very great number of branch in- 

 dustries. It is, of course, the obvious and natural thing 

 for them to do. Our resources, which are very similar to 

 those of the Northern United States, are far less developed 

 and will undoubtedly last very much longer one has only 

 to consider the timber situation in the States to-day and 

 in addition the establishment of a plant on the Canadian 

 side of the line at once assures the American manufacturer, 

 not only the benefits of our growing home market, but the 

 enjoyment of our Inter-Empire preference. 



In brief, the investment of European capital has been 

 chiefly in banks, railways and public utilities; that of the 

 United States in productive industries. 



What then is the industrial situation in Canada to-day, 

 as regards the capital by which it is being developed ? 

 To determine this point the Commercial Intelligence 

 Service of the Department of Trade and Commerce exam- 

 ined the returns of the Industrial Census for the last fiscal 

 year for which they were available, namely, 1918; that is 

 to say, the statements of all companies in Canada, from 

 those which own and exploit our natural resources, such as 

 timber or minerals, to the smallest manufacturer of clothes- 

 pegs or collar-buttons. 



Ownership of Canadian Industrial Investment 



In these returns the ownership of each bond and share 

 of stock is stated. It was, therefore, possible to sub- 

 divide the total industrial investment in Canada into four 

 groups, that 'owned in Canada; that owned in the United 

 States; that owned in Great Britain, and that owned else- 

 where. 



The result was found to be that 56 per cent was in the 

 hands of Canadian investors, 35 per cent in the hands of 

 United States investors, less than 9 per cent in Great Brit- 

 ain and about 1 per cent elsewhere. Similar analyses by 

 specific groups of industries showed even more remark- 

 able results. 



The United States controlled from a comparatively 

 small percentage of the flour industry, to more than 99 

 per cent of the artificial abrasive industry, an industry by 

 no means small and of growing importance. Some of the 

 actual figures were as follows: pulp and paper about 26%; 

 agricultural implements, an industry which we prided 

 ourselves as being peculiarly Canadian, 31%; electrical 

 appliances 49%; meat packing 41%; rubber 51%; paints 

 and varnish 47%; proprietary medicines 86%; car con- 

 struction 59%; drugs and light chemicals 27%; condensed 

 milk 40%; petroleum 53%; automobiles and automobile 

 accessories about 70%. 



The United Kingdom figures are comparatively insig- 

 nificant. With the exception of the building and drug in- 

 dustries, in which Great Britain owns 45% and 37%, re- 

 spectively, the British interest ranges from .04 to about 

 10%, and is as has been said, in total less than 9%. 



In view of the development of the past two years, these 

 1918 figures are exceedingly conservative; for in 1919 and 

 1920, in Toronto alone, there were established forty-six 

 new United States industries, four British and eighteen 

 Canadian.* 



Canada Controls Approximately 40% 



It will probably be found, when the 1921 figures are 

 available, that the percentage of our industrial capital con- 

 trolled by the United States is not less than 50% ; that by 



47 



