into Canada have long come from the United States, the 

 proportion being slightly in excess of two-thirds in the 

 last twelve-month period ending June 30, 1922. 



"A clear realization of the character of the national 

 consciousness of Canada is the first step toward an under- 

 standing of the international position and relationships of 

 the country. Whatever the technical term which may be 

 applied to the political status of Canada, in effect it is a 

 proud and vigorous nation, sure of its future, rejoicing in 

 its share in the leadership of the world, and also rejoicing 

 in its place as an intregal part of the British Empire. 



"Canada is in that stage of economic development 

 when population is small in relation to natural resources, 

 and when exports of raw materials must pay for imported 

 capital to develop them. In so far as Canada is a producer 

 of raw materials which the United States does not produce 

 in quantities sufficient for domestic consumption, this 

 country is a heavy buyer in the Canadian market. With 

 few notable exceptions, however, the -United States is a 

 heavy exporter of exactly those classes of raw materials 

 and food products which make up the bulk of Canadian 

 export trade. 



"Despite the growth of manufacturers, economically 

 speaking Canada is a new country, and the domestic 

 industries are not able to meet its rapidly expanding 

 requirements for manufactured goods, which constitute a 

 large proportion of Canadian imports. At the same time, 

 Canadian manufacturers have already proved themselves 

 able to market successfully a wide range of products in 

 overseas markets. This situation results primarily from 

 the fact that the main industrial areas are south-western 

 Quebec and south-eastern Ontario, and manufacturers 

 there are more advantageously placed in relation to mar- 

 kets outside of Canada than they are in relation to many 

 sections of the Canadian market, which can buy better 

 in the United States, the character of demand being prac- 

 tically identical in the two countries." 



Field for Investment 



"To-day Canada is probably the most favorable field 

 in the world for investment, comparable only with the 

 United States in the era of its most rapid physical develop- 

 ment, from the close of the Civil War to the opening of 

 the present century. Although, as is the case in all new 

 countries, capital must be sought beyond its borders, the 

 capital accumulation of Canada is very great. 



"Capital not supplied by Canadians has been secured 

 chiefly from investors in the United Kingdom and the 

 United States. From 1915 to 1921 Canadian governmental 

 and corporate securities amounting to $1,194,000,000 

 were floated in the United States. In addition to indus- 

 trial securities and Government Bonds, some United 

 States capital is invested in industrial undertakings not 

 represented by securities issues, and it seems probable 

 that the net total of United States investments in Canada 

 must now be as much as $1,500,000,000. 



" Both Canada and the United States possess the 

 incomparable advantages of having developed in the 

 period of modern transportation, with the result that 

 national-mindedness has extended the width of a continent. 

 This is one of the secrets of their greatness, and is the 

 basis of the outlook of their business men." 



Rivals Overseas 



"The two countries have identical standards of living 

 and methods of production, and there is no material 

 difference between their distance to the main markets. 

 Except as affected by climate, there is no marked differ- 

 ence in the character of the natural resources of the two 

 countries, or their products. In a general sense, their 

 development has been, and will continue to be, along 

 parallel lines, and in overseas markets they are rivals. 

 In so far as there is trade between the two countries in 

 products of a non-competitive character, proximity 

 makes each the cheapest source of supply for the 



other. A large part of the trade between them has its 

 origin in the same factors as those which cause goods to 

 move freely across the boundaries of contiguous states of 

 the United States and provinces of Canada." 



Developing Overseas Markets 



The effect of the Fordney Tariff, which was 

 awaited by Canada with a certain amount of 

 dread and apprehension, has been in certain 

 directions that of a blessing in disguise. In 

 throwing Canada back upon her own feet for 

 support it has developed greater independence 

 in the Dominion and spurred it on to greater 

 efforts to hold within the country the manu- 

 facture of certain products which previously 

 went abroad. The other effect has been to 

 divert the tide of products affected by the 

 tariff into other channels, and Canada has 

 sought again the overseas markets neglected 

 for so long. It is inevitable but that produce 

 other than the agricultural should to some ex- 

 tent be affected by the change. 



The necessity and inclination to seek new 

 markets, and above all to develop the British 

 market, came at a time most opportune and 

 auspicious. The manufacturer in the United 

 Kingdom, after the disturbances and dis- 

 organization of the war years and their after- 

 math, found himself gradually getting back to 

 more normal conditions and to a state where 

 he could satisfy the demands which might be 

 made upon him for products oi all kinds. He 

 was paving the way for a vigorous trade aggres- 

 sion in which the British Dominions were not 

 to be neglected. He came to meet Canada half- 

 way and sent delegations and representatives 

 to study the markets and report on conditions 

 and methods. This was doubly gratifying in 

 view of Canada's desire to develop overseas 

 markets and of the depreciated conditions of 

 sterling which had been the depressing feature 

 of Canadian finance for so long. 



Penetrating the European Market 



Canada has likewise, on her part, vigorously 

 entered into the development of the British 

 market, but is not confining her efforts to this, 

 but going extensively afield. She is penetrating 

 the European markets in a manner which 

 suggests a development of permanent profitable 

 trade. She has realized the wisdom of having 

 several smaller markets, rather than depending 

 to a large extent upon one large one, which by 

 a sudden change of policy may seriously dis- 

 rupt her business. Canada's trade with the 

 various countries of Europe has long been a 

 substantial and valuable one, but greater oppor- 

 tunities have continually been pointed out by 

 visitors abroad, and the Dominion is now going 

 systematically about investigating these and 

 exploiting them. 



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