The Half-Billion Touch

Canada cast up its accounts for half a year's trade with the U.S. and the figures were shocking. June shipments of $175 million had boosted the half-year import total to $981 million. Against this, Canada had sold only $482 million worth of goods to the U.S. The staggering adverse balance of almost half a billion in U.S. dollars made a big dent in the Dominion's war-hoarded reserves, even though hard-pressed Britain helped out by paying Canada in U.S. dollars for $220 million worth of food. The Bank of Canada's Graham Towers, who knows, was not telling how many U.S. dollars Canada had left, but at this rate the year-end balance of $1,250,000,000 would not last long.

Government officials and financiers once again went over the possible courses of action. Devaluation of the Canadian dollar would step up the intake of U.S. dollars, but it would also boost the Canadian cost of living, so that was out. Canada might sell more to the U.S., but it could never sell enough to close the gap. She could hope for European purchases, to be paid for in dollars, if the "Marshall approach" got under way. But that was a matter beyond Canada's control. The remaining alternatives were a U.S. loan, or a cut in U.S. imports.

Last week Canada was thinking quietly but hard about a loan of half a billion dollars as the best defense against U.S. dollar depletion. So long as Canadians generally believe that they can get U.S. dollars for business or travel, they are not likely to start a run on the Dominion's depleted supply. But if they should decide that the stock was dangerously low, they could start a run by stepping up their orders of U.S. goods, and getting U.S. dollars from Canadian banks to pay the bills. Ottawa's view is that with a half-billion loan in the kitty, Canadian businessmen would not start the run, and little of the loan would have to be used.

But if the loan cannot be had, or fails to do the trick, the Government may have to restrict imports from the U.S.

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