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A ¢ minion, : . Britain To Test Ties Of Empire King's Brother To Go To Aus- tralial Next Year As Governor General Announecment that Xing George's younger brother, the Duke of Gloucester, will go to Australia next year as Governor- General of the Commonwealth has glven new {impetus in London to consideration of the Monarchy and its place in the future reconstruct. ed world. , The decision about the Duke of Gloucester does not concern Aus. tralia alone. It definitely. names next April as the time the Duke, who has lately been King George's chiet understudy, can leave Brit. ain. April 1s named because the- twentv-first of that month is Prin. cess Elizabeth's eighteenth birth. day, which is the earliest. the Duke can hand over to the Princess the responsibilities he has been shoul. dering until she came of age. As a girl she will attain her ma- Jority at 18 which means three vears less apprenticeship than it there had been a boy heir to the throne. It Is expected that Prin- cess Elizabeth will be created Duchess next April and immediate- ly hecome a member of the Council of Regency. That is the Britisly angle on the monarchy question, But now there is also a new British Empire anglo with the Duke of Gloucester about to become Australia's Governor General at one of the most crucial moments in the development of the Dritish Commonwealth. Will the Duke of Gloucester see a strengthening or loosening of the crown link between Australia and Britain? What will his own part be in the Empire's evolution? On the question of the Duke of Gloucester's going to Australia, the British today seem genuinely pleased that Australians are to have a member of the Royal I'am. fly. PROP GIRL Violet Falkum, Minneapolis, Minn., puts all her muscle into turning over the propeller of a SNJ training plane. She's a WA VE aviation machinist's mate, Over 40 Carriers Added To U.S. Navy The United States navy last week swung two punches at Jap- anese morale--the news that more than 40 aircraft carriers ~ have been added to the fleet and __ bled in the last | 3 that Japanese shipping is being sunk at the rate of a vessel a day. i This picture of strength in the Pacific came from Secretary Knox and a navy communique crediting United States subma- rines with nine more sinkings. The secrtary's report on -the size of the fleet disclosed that its numerical strength has been dou- monthse and "that the aft include re than two score carriers, probably including the baby carriers which have scored such notable triumphs over U-boats ir the Atlantic. In all oceans the United States now has 817 combat ships, Knox said. New construction also will make up-in the next two weeks the -21 ships lost in 1943, Canadian Troops Overseas Popular Popularity of Canadian troops overseas is seen by the fact that more than 41,000 have been in. vited to spend their furloughs at British homes, it was revealed, The attendance of British ci- vilians at concerts, uances, mov ies and other social affairs held in Canadian army recreational centrés has done much to cement this friendship, according to the report. British wives of Canadian servicemen are reported anxious to come to Canada after attend. ing lectures describing the Do- :~has, if anything, increased. More- ~_ tained. "other fields -- agriculture and |. war has food occupied so vitally " of the United Nations as it does * Canadian farmers have met, and --are continuing to meet; the chal< ---Bank-has-endeavoured--in--a spirit" , ing through our hands, have been Bankers On Transition From War To Pouce 3 Vital National Problems Discussed | by Bank of Montreal President George Ww. Spinney Gives "the Frank and Considered Opinion of a Banker" on Nationalization of Banking 126th ANNUAL MEETING Strongly Emphasizes Value of Victory Bonds Both. During War and After Problems of vital interest to Canadians in the transition from at the 126th annual meeting o C.M.G., president of the instit banking on which he gave wha the value of Victory Bonds in ible economy in attaining a high decent living standards. Following a presentation of the profit and loss statement of the bank, as already published, Mr, Spinney spoke as follows: "On the battle lines through. out the world, the past year has given us much cause for profound thankfulness. On the home front too the year has been one of achievement. But I think that any realistic view of the local scene must lead to the conclusion that the threat of inflation with all its attendant dislocation and hardship has in no way diminish- ed in the past twelve months but over, I do not think it too much to say that by reason of the very successes of the Allied forces, we in Canada are peculiarly vulner- able to the dangers of complac- ency with a consequentelaxation 'of our energi time when our full effdrts should be sus. In brief, 1 think we have a situation in_which it is neces. sary for Canddians to draw upon their reserves of sound common sense and their capacity for clear thinking and self-discipline. For it is at a time such as the present that these qualities, displayed by those at home, can have a telling effect on the duration of the struggle and on our ultimate ability to meet and to solve the problems of transition from war to peace. B "Much has been said, and right- ly Bo, concerning the spectacular wartime achievements of Cana- dian industry achievements which would not have been pos. sible but for the co-operation and untiring efforts of millions of Canadian workers who have brought to the task of war pro- duction the fullest measure of their energies and skill. I should also like to pay tribute to those responsible for no less remark- able accomplishments in two transportation. At no time in the important a place in the armoury at present. The manner in which lenge of vastly increased demands upon them, under extreme han. dicaps of shortage of help and scarcity of machinery, is deserv- ing of the praise and gratitude of the entire nation. I should like also to say a word corcerning the services rendered by our two great railroad systems. Despite scarcity of equipment and man- power, the railways are handling freight and passenger traffic in all-time record volume. The per- formance of such a task, under trying conditions of operation, and with relatively little incon- venience to shippers of .freight and to the travelling public, is an accomplishment of which the management. and operating per- sonnel of the railway systems may well be proud. THE WARTIME WORK OF THE BANK "I think. it would_be quite in order for me now to draw atten- 'tion to the manner in which your of service to meet the changing needs of a nation at war. There has been little change in the vol- ume of loans of both commercial and financial character, but in other directions the work has vastly expanded. Transactions in cheques and deposits, Victory Bonds and relative coupons, pour- '| immeasurably heavier than be- fore the war. Our safekeeping | facilities have been under a severe strain. We have already opened thousands of ration coupon accounts and handled coupons running | literally into hundreds of millions, || The ramifications of Foreign Ex- change control also have added to our responsibilities, It has been necessary to cope with these situ ations with a staff which, by rea. son of heavy enlistments, is seri. ously depleted in its experienced ranks, Of their diligence and loyalty the General Manager will | have something to say later on in this meeting, "In the year just closed, our acquisitions of Government secur. ities were on a reduced scale as compared with 'the preceding year, notwithstanding a substan- | speak on this | man of our Victor, | zation for a perio f Bank of Montreal shareholders yesterday Among the subjects he dealt with ution, war to peace were discussed by George W. Spinney, were nationalization. of t he described as "the frank and considered opinion of a banker", the war and 2 after, and the need for a healthy, vigorous and flex- and increasing productivity essential for full employment and > GEORGE W.. SPINNEY, C.M.G. President * ; debt, You will, I am sure, appre- a development we welcome, since it is a direct reflection of the national effort to control infla- tion by financing the war to the greatest possible extent by tax- ation and the sale of bonds to individuals and other non-bank investors." While the continued purchase of short term Govern- ment securities is a wartime duty which the Bank is glad to assume to the, extent required, we are at one with the Minister of Finance in his desire to see that the neces- sity for this expansionary type of financing is kept to the practical . minimum, "Nor has our attitude in this regard been merely one of passive agreement. For our whole organi- zation has focussed very special' attention upo:.. the matter of aid- "ing in the sale of Victory Bonds™ "and War Savings Certificates. I am proud of our record in these great national undertakings. By written word and oral persuasion we have done everything within our power to encourage deposit- ors in this Bank to use their funds to the utmost limit of their abil- ity in the purchase of Govern- ment securities and to pledge their incomes to the same end. But that is- not all. We have established low rates and special arrangements designed to direct these securities into our hands for safekeeping.' The significance of this service goes beyond the elimination of the obvious risks in keeping securities in one's own home, for we know from experi- ence that the investor who lodges his bonds at the bank for safe. keeping is thereby helped and encouraged to perpetuate his savings. VICTORY BONDS IN THE WAR AND AFTER : "You probably have read pub. lic statements recently that would imply that the banks and other large institutions have an interest in depriving the individual of his Victory Bonds in accordance with some deep-laid and sinister scheme oO concentration of wealth, Such statements, it seems to me, cannot be the result of a thoroughly informed and unbias- ed appraisal of the facts, First hand knowledge enables me to oint with some ominion Chair« Loan organi of two and.a half years, 1 was able to observe at close range the thoughtfal plannin, and tireless energy which the Banks, Trust and Loan companies, Insurance companies, Investment houses, together with all other responsible groups in the authority, As community, brought to bear in distributing Victory Bonds into the hands of small buyers and in endeavouring to have them kept there. The success which these efforts have attained can in some egree be - measured by the in: creasing number of individual sales which have been made in tial increase in the Government es Victory Loan campagins, In the First Loan of June, 1941, there ciate_my point-when I say this is were 968,259 subscriptions, In the Loan just closed, there were over 3,000,000 sales, or say one sale for every four persons in the Dominion, E "In my view the widest possible distribution of ' Victory Bonds in public hands, apart from its neces- sity under present conditions, has tremendous post-war significance. For if the national debt is dis- tributed among all sections of the community, the processes of re payment will be eased and facili. 'tated. Moreover, the reserve of purchasing power, built up to-day by hundreds of thousands of Canadians through the purchase of Victory Bonds, can play a very real and important part in stabil. izing the post-war economy and maintaining employment. _ know there have beén some fears expressed that there will be a rush on the part of individuals to. cash their bonds at the end of the war and that the impact of this spending power on goods, which for some time will be lime ited in supply, will give rise to an even greater danger of infla. tion than now exists, This.is a possibility 'I am not inclined to accept without reservation, for the desire to save and to provide for the future is a basic human instinct, and a habit which quick- y takes root. It-is true that in the pre-war years many peoples were either denied the opportun- ity, or lost the habit, of saving. During the war, saving has again: become possible, and is now not only considered respectable' but ~ has been -elevated to the position are enjoying for the first time only 'a reserve of savings can bring. . I suggest that the will to save can, in large measure, be projected into the post-war years if Canadians see to it that the act of saving continues to be respect- able and that the savings of the individual will be respected. THE INDIVIDUAL AND GOV- 'ERNMENTAL CONTROL "At this point I think it would be quite in order to make somes reference to the much 'discussed subject of nationalization of banking. For it seems to me that the frank and considered opinion of a banker, who like most other Canadian bankers has come up 'the hard way," is at least as worthy of a hearing as the views of ardent, exponents of theories of state ownership. Tet me say, : thérefore, as 'a banker, and as a Canadian who has the interests of his'country at heart, that I am at a loss to understand shat good object nationalization of banking would -achieve. Indeed I am con- vinced that such. a move' would be productive. of consequences gravely detrimental to the com- munity at large, 1 "To be more specific, I cannot see that under rationalization the many and varied banking serv- ices on which the entire business and commercial organization de- pends, and which everyone is in- clined to take for granted, would ciency and despatch than they are now. I find it difficult to believe that the individual in his dealings with a Government- owned Bank would have a greater assurance of privacy or personal attention to his particular prob- lems than he las at Present, May I say too that I can find no need 'for nationalization in order to place the nation's supply of money under governmental regulation, since the regulation of the money supply is a' function 'already per- formed by the Government-owned central bank, "Our position to-day {is that there are ten banks actively com- peting with each other for busi. ness; and I can assure you that this competition is real and in tensive, Under these circum. stances if an individual has rea son to believe that he is not being adequately served or that his prov posals have not recived due con. sideration by any one bank, there is nothiig to prevent him from going to another, I 'think it is safe to say that under our come 'petitive system a refusal of busi ness by several banks would prob. ably be sufficient evidence that the proposal was not one which, by any stretch of the imagination, of a patriotic duty. Many people . the feeling of independence which v ~be_ performed -with-greater -effi----|---- as labour eannot possibl .be more than a Strong Financial Statement Showing Record Resources Presented by. B. C. Gordner, General Manager og > BANK SERVING 1,200,000 CUSTOMERS : [4 Staff Now 58% Women ~ Relieving Many Men for Military Duty - With resources at the highest figure in the bank's history, the financial statement present- ed to Bank of Montreal shareholders yesterday by B, C. Gardner, general manager, reflected unprecedented strength and indicated the extent to which the institution was participating in > the nation's war effort. In submitting the 126th annual statement of the Bank, Mr, Gard- ner commented briefly as follows: "Our total assets now aggregate $1,313,065,000 as compared with $1,175,319,000 a year ago. Quick as- sets aggregate $1,036,610,000, or 83.81% of all liabilities to the pub. lle. "Notes of and deposits with the Bank of Canada amount to $119, 856,000 representing approximately 11.39% of all deposit liabilities in Canadian dollars, gia "Investments, not exceeding mar- ket value, carrled at $799,848,000, show an increase during the year of $115,701,000. This increase was mainly in our holdings of Dominion of Canada Deposit Certificates and other short-term obligations of the Dominion Government. Qur hold. - ings of Provincial and Munleipal securities show some further con. traction reflecting the lower bore rowing requirements of theses bo dies. "Current Loans and Discounts are little changed from the prove fous year-end figures. Our Com. mercial Loans continue to reflect the reduction fn inventories, the shortening of credit terms, the re duced activities of companies en- gaged In the financing of durable consumer goods, such as motor cars, the finactlvity of financial markets, and the reduction of pri. vate debt. ' 4 1 "In valuing our asséts, ample provision has been made for all bad and doubtful debts and for de- preciation of securities. BANK SERVICES "The services of the Bank have been maintained at a high level of efticlency in spite of the greatly increased volume of routine result. ing from wartime conditions. The rise in bank 'deposits has been ac. companied by a 'growth in the num. ber of Current and Savings Ace counts and we now provide banking facilities for about 1,200,000 cus. tomers under these headings. This increase has heen accompanied by an even greater growth in the vol- ume of transactions handled at our branches. "In the loaning field the Bank has supplied, with Government co- operation, the necessary funds to finance .operations of a character that would normally hardly qualify for banking assistance "In all of these operations we have little or no criticism from those who use our services and I should like to pay a tribute to our customers and to the public gen. erally for their - cheerful co-oper- atlon in these difficult times. BUSINESS ACTIVITY "The volume of Canadian bus« fness activity reached new peaks in the twelve months just closed. During the past five or six months, however, production has remalned steady at a high level and it seems reasonable to expect that the in. dex of gen®ral business in Canada could conform to good banking principles. "The alternative which the pro= onents of nationalization "offer n exchange for the present sys. tem of competitive banking is a banking monopoly under govern- mental control. Under such cir. cumstances once the borrowing requirements of a customer were denied, for any reason whatever, he would have no recourse ex- cept through the channels of spe- cial pleading or political influ- ence. IRE RAR TY "One of the most prominent roponents of nationalizd bank ng recently stated, as one of the points in its favour, that control of finance is a most essential step to control of the whole economy, With the truth of this statement as applied to nationalization of the banks I would most definitely agree, Set up a government monopoly of banking in Canada and the socialization of the rest of the economy would scarcely *'mopping-up operation." For if source of day-to-day credit ae- . commodation for Canadian indus. try and agriculture, the Canadian econ. will have already lost its independence regardless of the extent 'to which any field of en- deavour may 'continue to. retain the outwa: jbpatrante of free enterprise. This, I suggest, is a point that employees, as well as owners and .management, may Rotider; For if the Government, irectly or indire ctly, is to attain control of the entire productive t facilities of the country, sueh an important element in Production ope that the vast regimentation in. (Continued on following Page) . a governs . mental bureau becomes the only | B. C. GARDNER 'General Manager STAFF UNDER HEAVY WARTIME PRESSURE "By all standards the past year has not been an easy one for the Staff, who have. worked long hours and have performed their many and varied duties with courtesy, efficiency and despatch. I cannot speak too highly of their loyal services. The increased volume of routine plus special wartime duties have entailed many extra hours of work. Especially. are we mindful of the heavy pressure upon our Managers, Accountants and ° other senior officers who have had to train inexperienced em- ployees in the handling of rel- atively senlor posts, very often on short notice. We have been impressed with the way in which -our women clerks, both perm- anent and temporary, have risen to the occasion. They are doing splendid work and, without them, either we could not have carried on our full banking ser- vices or we would have heen . forced to ask for the deferment from military duty of some of our experienced personnel." - --B€: ner. at Bank of Montreal Annual Meeting. will not show, any sharp Increase in the immediate future. Baslc- ally, this reflects the fact that we ~have reached, for all practical pur. poses, a condition of full employ- ment of human and material re- sources. This does not mean that more intensive use of existing re- sources could not result in some . additions to our aggregate output, It does, however, suggest that for the duration of the. war at least, any very marked advance in one branch of industrial production {is likely to be at the expense of some other department of the economy. Already lack of manpower has af- » fected the output'of Canadian {nme dustries, such as gold mining, lumbering and newsprint. "The period of huge additions toe wartime manufacturing plants ape pears to be past, with consequent reduction in the level of construc. tion activity and the use of cone struction materials, On the other hand, the demand for raw maters fals for the new productive facile ities brought into being: --has Increased. Moreover, as the war progresses it brings changes in the requirements of the fighting forces which necessitate re-adjust. ment fn the employment of our industrial facilities, "With production and 'employ- "ment at a high level, retail trade has been very active but some signs of a moderate tapering off are In evidence. This fs in part a consequence of curtailed inventor« ies of consumers' goods, particus larly in the durable goods categorles, and is also: the result of restraining Influences of taxation _and the voluntary savings effort undertaken by the Canadian people. STAFF "Of our male staff, 629 of those of military age have volunteered for and are now on active service, This total includes a large number : not_subject to military call-up bee cause of their marital status, while a number of others have volunt ed but have been unable to qualify on medical grounds. In August, 1939, 649% of our staff were of. ticers, 30% stenographers and women clerks. and 6% messengers, To-day the figures are 379% officers, 589 _stenographers' and women clerks.and 6% messengers, I think "you will agree that this 1s an fm portant change in the composition of our staff, "We have been asked for and have loaned additional officers to the Government and. we are glad selves well in their new duties. "It is a source of Keen satisfad. tion "fo us that a number of our men now serviig their King and Country have won distinction and decorations on the field of battle. Ten members of our staff are list. ed as prisoners of war and ten are reported as missing. Our thoughts are with their relatives and friends and it is our earnest hope that the day is not far distant when they wilt be returned safely to their families. I have to record with deep regret that thirty-six sacrifice. Thelr mémory will ene rich the traditions of our service and our deepest sympathy goes out to their relatives and friends." - "I should mention that already we 'have given 'a great deal of thought and study to the question of reabsorbing our men now on Military Service and plans have heen prepared to enable us to fit them into their rightful places im our organization when they return. . It is our expectation that because of the duration of hostilities and their long absence from eclvillan life, members of our staff on active service may. require assistance in re-establishing themselves in cive lian life and we are, therefore, prepared to provide financial help where the need is clearly indicated. They may be assured of a warm welcome back to our; service. | CALLS FOR CLEAR THINKING || ON POST-WAR P "Underlying all the talking and - thinking about post-war planning which we hear 80 much of to-day {s the determination that out of this war there must come a better Canada; and that those who have fought and worked for victory must be as. sured of an opportunity as free and independent citizens to ob- tain and enjoy for themselves and thelr children the material benefits of the freedom they have Helped to defend. No one will deny that in the accomp- lishment of these purposes there will be a place for governmental . "measures wisely conceived and administered. But I suggest that tlie real basis for fall employ. ment And decent living stand. ards Is a high and increasing productivity that 'will be pos. sible only in a healthy, vigor 'ous und 'flexible economy, We shall 'be in great need of init fative, imagination and invent. "ive genius. And as we value our ° political freedom and our econ- omle 'future, we must guard against the doctrine that the, way to achieve the post-war objectives wo seek is to confine _ foroned or' 1bk of eléar _time and place, I had failed to the Canadian 'economy within the stralt-jacket of governmefit- al regulation,. ownership Jand control, Such a doctrine ignores political and economic realities as well as some of the persists ent 'frailties 'of hunian nature, and rests upon the assumption that government owtership' and control. are inherently 'right' and ftidividaal 'ownership and entérpribe iiherently 'wrong.' My hope would be that Canad. fans will never, through { i 3 ing, acquiesce 'In the creatl '0f An économie order in whi enterprise and initiative, and thé spur of competition, are re- garded as of little value and low reputation: : , "The whole subject is one of vital national importance and I am confident that you, as pros rietofs of the Bank, would feel hat it would have been remiss. on my part if at the state niy views. This séems to me to be 'a' proper time and a proper place." '3 x } George W. Spinney at Bank of Montreal Annual Meeting. to know they are acquitting them) of our men have pald the supréme EIA _ 7