Austerity

This week the people of Canada got the bad news about the dollar-shortage disease.

To stop the buying spree which has been eating up the Dominion's reserves of U.S. dollars, the import of hundreds of items was abruptly cut off. Outstanding examples: radios, refrigerators, typewriters, washing machines, furniture, automobiles. (In the case of autos, the ban is temporary.) For countless other items, import quotas are established. Among them: textiles (cut to one-third of the last twelve months' imports), oranges, lemons, grapefruit, clocks, watches, toys, sporting goods.

Equally drastic was the Government's restriction of travel by Canadian citizens in the U.S.--just when northern snows make many Canadians yearn for Florida sun. Henceforth a Canadian may spend no more than $150 a year on trips to the U.S.

To make sure that Canadian steel will be fully used in essential industry, the Government slapped heavy excise taxes on domestically made steel and auto parts. The only segment of Canadian industry that found the financial medicine palatable was the gold-mining business. Since gold is instantly convertible into U.S. dollars, the Government decreed a bonus of $7 an ounce for gold producers.

Canada's Government, well aware that its austerity schedule would be hard to take, used two of its most persuasive radio voices to sell the regimen to the people. Prime Minister Mackenzie King, speaking from London, outlined the crisis in general terms. Finance Minister Douglas Abbott followed him on the air from Ottawa with the details.

There was one item of good news with the bad. Canada, which went through World War II without a foreign loan, will get a $300 million loan from the U.S. The Export-Import Bank will furnish it, if private financing is impracticable. But another $300 million must come from the savings in consumers' goods from the U.S. Devaluation of the Canadian dollar--often rumored--was "considered and rejected," said Abbott.

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