Economy Jitters

After surging up a powerful 23% in two years, Canada's gross national product is beginning to falter. G.N.P. for the second quarter of 1957 was just even with the first-quarter rate in dollars (but down a fraction in real terms), and government economists think third-quarter figures will show a further fractional setback. The leveling off of Canada's long-lived boom last week sent jitters from Toronto's Bay Street to Alberta's unseasonably snowbound prairies.

In one day on the Toronto Stock Exchange, the indexes for base-metal stocks, golds and uraniums all plunged to their lowest levels since 1954; the industrial index hit a 2 1/2-year low. Next day bargain hunters swept into the market and share prices staged the biggest rise in the exchange's history, but the steam soon went out of the buying wave. As in the U.S., where Wall Street had a similar case of the shakes (see BUSINESS), prices seesawed indecisively for the rest of the week. Shares listed on the exchange lost $5 billion in paper values since the market's June peak.

Some of Canada's key industries felt a painful squeeze. Automobile sales for the first eight months of the year were off 6%. Newsprint production declined in September and was expected to dip further in the final quarter; higher production costs had trimmed paper-company profits by 20% to 30%. In prospering Alberta, a slump in both domestic and export sales of crude oil cut scheduled November production to the lowest rate in 2 1/2 years. Drilling was off, and one drilling contractor reported: "One third of our rigs are down and the others are not making any money." And prairie farmers counted their losses in millions of dollars when early storms dumped a foot of snow on fields of unharvested wheat and sugar beets.

In Ottawa the Conservative government hastily warmed up some economic remedies. Immigration slowed to a trickle; only employable men and women with needed skills found it easy to get visas. The Labor Department stepped up its campaign to encourage winter construction ; fatter pension checks would soon go out to the aged and war veterans; and government cash advances on stored grain would help tide many a prairie farmer through a cold winter. Even so, economists privately gloomed that unemployment this winter would almost surely exceed the postwar high of 401,000, might reach 600,000, or 10% of the labor force.

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