of investment and manners of development which pre- 

 viously did not seem to appeal to them. 



The situation for some time has been that, strictly, 

 there has been no such thing as surplus British capital, 

 whilst conditions have seriously militated against such 

 crossing the Atlantic in the event of its being available. 

 The situation, as it is developing at the present time, is 

 merely the resumption of an interest, from necessity, long 

 dormant, an awakening to the new dawning of opportunity. 



Previous to the outbreak of the Great War, capital 

 invested in Canadian enterprise and development was 

 largely British. Next in order came that of the United 

 States. Conditions of the war and immediate post-war 

 eras worked to the exclusion of British capital and the 

 advantage of that from the United States. At the begin- 

 ning of 1920 the total American investment in Canada 

 was variously estimated from 1,250,000,000 of dollars to 

 1,600,000,000, and British capital about double this. The 

 tendency had been to increase American investments in 

 Canada and for British investments to decrease by reason 

 of home demands and the costliness of remitting British 

 funds to Canada under the prevailing exchange rates. 



British and U.S. Investment 



Speaking in the Federal Legislature towards the middle 

 of the present year, Sir Lomer Gouin stated that England 

 had invested in Canada two and a half billions of dollars 

 and the United States nearly two billions. Thus is evi- 

 denced the activity in the movement of capital from across 

 the international line which has prevailed of recent years 

 and which, since the war, has probably been the most 

 pronounced and outstandiug feature in the financial and 

 development phases of Canadian existence. 



Resumed interest in the Canadian field for investment 

 became evident during the past winter, when promoters of 

 th^ Northern Manitoba mineral belt and other of Canada's 

 mineral areas met with astonishing success in their endea- 

 vors in the British Isles to secure funds for the exploitation 

 and development of those fields. As a result there is much 

 British capital engaged in Canadian mining work this 

 summer, especially in Northern Manitoba, which field 

 was absorbing capital almost exclusively American and 

 Canadian. Since the opening of Spring, English capital 

 has financed a pioneering prospecting venture into Ungava 

 which is to proceed until the fall of the year. A party of 

 British mining experts has formed a basis in the Lake 

 Chibougamau country, operating under the guidance of a 

 Canadian engineer, and will thoroughly explore that 

 country with a view to active development. 



Since the beginning of the year the Dominion has been 

 visited by many representatives of British manufacturing 

 and financial interests, at the pinnacle of which came the 

 tour of the party of the Federation of British Industries, 

 anxious to improve trade relations between the Mother- 

 land and Canada and more effectively meet United States 

 competition in this country. The wholesale seizure of 

 British trade by American interests in the war years and 

 the subsequent period of trade upheaval in England has 

 opened the eyes of British business men to the opportuni- 

 ties they are letting slip and the serious inroads on trade, 

 at one time purely British, other countries are making. 



British Plants to Locate in Canada 



England has hitherto failed to adequately meet this 

 competition largely because it did not possess a suf- 

 ficiently clear comprehension of American and Canadian 

 business methods and did not have the same weapons to 



engage in the trade war. For instance, the United States 

 method of attack has been through locating branch 

 factories of the parent American plants on Canadian soil, 

 thus securing all the advantages of a Canadian incorpora- 

 tion. The unqualified success of the first of the concerns to 

 undertake this expansion has resulted in a surprising 

 multiplication. In 1920 there were more than seven 

 hundred branches of United States industries in Canada 

 and many have been added since then, several, in fact, in 

 the present year. 



It is apparent that hitherto British manufacturers 

 have not had a deep enough sense of the advisability, 

 indeed necessity, of thus branching out if they are effici- 

 ently and effectively going to meet competition. The 

 Department of Trade and Commerce recently undertook 

 an educational campaign with the direct object of forcing 

 British manufacturers to recognize the urgent necessity of 

 locating branches of their activities in Canada if they 

 were to retain their hold on the overseas market, and 

 issued a very handsome, comprehensive, illustrated 

 booklet, " Canada as a Field for British Branch Industries." 

 The campaign would seem to be having the desired effect, 

 for, almost immediately, four British industrial concerns 

 gave definite intimation that they intended location in 

 Canada, whilst many others are reported to be considering 

 it and in correspondence with the Department. 



Following this came the announcement that an English 

 motor car concern is to pioneer the movement of British 

 car manufacturing in Canada by establishing a branch in 

 Canada to compete with the American cars now made and 

 sold here. The firm, which manufactures one of the best 

 known English small cars, will build an assembling plant 

 at first, and should this prove successful engage in the 

 complete manufacture. This is a particularly gratifying 

 move, for, though the automobile industry in Canada is one 

 which has of late years exhibited unusual activity and 

 exceptional development, United States firms have been 

 entirely responsible for the energy shown, and this will be 

 the first British rival to compete with them in manufacture. 



U.S. Industrial Interest in Canada 



There is little doubt but that with the first establish- 

 ments located successfully the number of plants will swell, 

 as did those from the United States, as British manu- 

 facturers come to realize the enormous benefits of manu- 

 facturing in Canada and achieve a more even balance be- 

 tween British and American houses prosecuting their 

 activities in the Dominion. 



From all indications it is beyond conjecture that 

 voluminous placements of British capital in various 

 phases of Canadian development will take place in the 

 near future, and that the movement will expand with the 

 progress of time and the brightening of conditions. The 

 rise of sterling, the prospect of rosier economic times, the 

 realization of the necessity of meeting competition on the 

 ground of the opponent, are all combining to centre in 

 Canada an interest which wavered merely from force of 

 circumstances. 



There is no reason to suppose that United States 

 interest in Canada will ever decline the tendency would 

 certainly seem to be for this to increase so that with 

 capital coming, in addition, in substantial amounts from 

 the British Isles and vicing with that from across the 

 border, Canada should prosper exceedingly from the 

 business rivalry and experience a period of development 

 surpassing anything she has hitherto known. 



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