DURING the past two weeks the business outlook has completely changed. The building of a connection for shell orders from the United States came suddenly, like a dazzling flash of sunlight through gathering clouds. Prior to this the outlook was not in any sense gloomy, but business men who looked ahead were anticipating a gradual slackening of public buying power, drifting into the first stages of industrial readjustment.
This viewpoint has been swept away by the glad tidings from Washington. Uncle Sam needs shells, and needs them faster than his own factories can turn them out Canada has plants equipped for the immediate production of munitions, plants which would close down when orders from England stopped. So Uncle Sam has affirmed his intention of sending orders across the border in sufficient volume to keep those plants busy and the wheels of industry generally humming. The first announcement of this new development having an official ring about it was to the effect that initial orders would reach a total of $50,000,000.
It has since developed that this announcement was extremely moderate. It seems almost certain that the orders to be placed in Canada will run to $500,000,000 and perhaps more. This total will include orders for goods other than shells — clothing, woolen goods, marine supplies, etc.
It means that the period of industrial activity which came about through the orders placed in Canada by Great Britain is entering a new phase. It may prove to be a more strenuous period than the first. With compulsory service further depleting the ranks of labor and orders pouring in to keep all factories running overtime, it is certain that industrial activity is bound to be more complete and feverish than before. Wages will remain high, buying power will be undiminished, if not actually increased. The country will continue to enjoy war prosperity to the fullest degree.
All this it means and more. It is impossible to underestimate the importance of the news. The filling of our munition factories with American orders will react back to all branches of business and keep us working at even higher pressure than before. It will intensify the labor situation and make the demand for men even more insistent. It will still further deplete supplies. Almost inevitably it will tend to keep the prices of things up unless the Government is able to find some means of regulating prices, which is, to put it mildly, doubtful.
The situation, therefore, calls very clearly for a new viewpoint on the part of the people of Canada. The time for storing up resources against the day when re-
adjustment starts has been renewed. We are being presented with a lengthened opportunity to save, to prepare, to conserve in every direction. It is a golden opportunity; and the individual who neglects it will some day realize the fullness of his folly and the extent of his treachery to national duty. But more on that elsewhere.
The placing of American orders coincides with the harvesting of a splendid crop. Providence has been generous to Canada. Not only is the total yield large, but the quality is extremely good. At the close of September the wheat in the terminals at Port Arthur and Fort William showed 87% of contract grade as compared with 49% in 1916. No less than 76% was of the two highest grades, No.
1 Hard and No. 1 Northern, as compared with 22% last-year. This means big prices for the grain growers.
Unquestionably it has been a splendid year for the Western farmer. He has harvested a large and high-grade crop in a year when prices are “kicking the beam.’’ The result is a degree of prosperity on the prairies that will soon manifest itself in many directions. Exaggerated stories of profits which have been made come from many sources, but it is certain that there is a measure of truth in some of them. It is practically certain that in some cases enough has been made on the crops this year to pay off the indebtedness on some heavily-encumbered farms.
The same applies in some degree to the Eastern farmer. It has been a splendid year for the agriculturist in almost all sections. Add prosperity On the farms to the industrial activity of the cities and the result is Prosperity. That word sums up the prospects for the coming winter.
Financially things are not as promising, for money is certain to continue tight. The ever increasing demands for war expenditures eat up the available supplies and, though most of it filters back finally into circulation, the process is a slow one and roundabout. Industry is demanding more and more financing and the average business requires considerably more capital to operate on than ever before, owing to the higher wages paid and the very much augmented price of goods. Retailers, for instance, have to invest twice as much money in stocks. The result of this situation is that capital expenditures are being curtailed. Municipalities are postponing improvement work, because of the difficulty of floating debentures and the high interest rates that must be paid.
The September bank statement showed that the savings deposits continue to grow. The total was $966,000,000. When the war started the total was $650,000,000. The surplus, as the Financial Post points
out, would provide double the amount of lite war loan which is being floated.
Some lines of business have been upset by the fear of changes and regulations to be imposed by the Food Controller. That some restrictions are necessary is recognized, but the present uncertainty is harmful to business and it is very much to be hoped that, after the elections, a definite policy will be formulated by the Government. There are formidable, almost insurmountable, difficulties in the way of fixing prices or in restricting certain forms of manufacture, difficulties that have to do with supply and demand, maintenance of employment and protection of capital. Any programme decided upon should be very carefully considered from every angle. A definite policy would at any rate do away with the dangerous uncertainty which is felt at present.
This, however, is a comparatively small factor which is almost completely lost sight of in the general industrial prosperity which prevails. It is felt in the foodstuffs industry most directly but in some other lines as well.
The chief difficulty under which the average manufacturer suffers to-day is that involved in getting labor and material. A piano manufacturer was bewailing the fact the other day that he was getting farther behind with his orders because his skilled help was being requisitioned for service in the aviation camps. The skilled work in wiring needed in connection with flying camps can best be done by men with experience in piano making, with the result that the factories are drawn upon continuously. This is but one case in many. Practically every branch of industry suffers directly in some such way.
This, after all, is a minor difficulty and Canadians have a great deal to be thankful for. The outlook is so bright that such troubles seem very small.
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