CANADIAN BANK'S VIEW

Evening Post, Volume CIX, Issue 100, 30 April 1930, Page 14

CANADIAN BANK'S VIEW

ACTUAL AND PAPER LOSSES

The Bank:of Nova Scotia, in reviewing the financial situation in the United States and Canada as it appeared on Ist April, remarked that the perplexities o£ the business situation had reacted unfavourably upon many countries, including Canada. ' "To deny the facts of th,e situation ■would be foolish; to form a judgment, at this stage, on the "..probable duration or extent of the business recession -would be premature. Our common task at present is) in the light of the knowledge now available, so to conduct our personal affairs as not to cause additional dislocation of business; to base pur conduct Tipbn reason, and not to be swayed by crowd psychology. "Those who have recently suflered actual losses have now no choice but to work hard and economise with a view to making them good. But the behaviour of those who have only suffered losses on paper, who are merely 'psychologically poor,' can do much to restore, or weaken confidence." RATIONAL EXPENDITURE. It is pointed out that in the highly organised markets of, to-day, where the demands of myriads of purchasers are, in effect, pooled and transmitted through sensitive -merchandising organisations to the great producing industries with their multitudes of employees, a comparatively small change in the purchasing habits of the individual may produce serious consequences. A slightly greater readiness to spend in a particular direction may provide the means of livelihood for numbers of- unemployed workers. A slight curtailment of expenditure in a-particular direction may result in numerous discharges. Though the private individual, as he spends his income, seldom pauses to reflect on the matter, the character of his spending is helping to .determine, often at quite remote distances, who shall and who ■shall not be employed. WORLD-WIDE INFLUENCES.\ "In Canada two large groups have, been unfortunate in the stock market decline of; October and November, last, suffering actual loss as a result' of the sale of securities previously held on an insufficient margin. Combination of a short crop, .delayed marketing and low prices, contracted farmers' purchasing power, causing delays in collections, arid enforced'economies in many-households, all resulting in unemployment. But the bank's adjusted ' index of employment was only 5 per- cent, below the high point of August, 1929. ' "Involving, as it must, discomfort for those with slender resources, and actual hardship for-some,, this is the most distressing feature of the situation. It is the result of economic influences that are world-wide and, -in the light of our present knowledge, unavoidable. Our own getion ought to be such as will tend to minimise these hardships; and we may reasonably believe that individual effort to .'this end will not be. without avail, though the results of the conduct of-indi-viduals are often impossible to trace."