ore unem Mons. he mountain | tribes eT the Philli- &S a scant 50 years ago, Was possible for a person Sell hiraself into slavery ‘Pay off a debt. Receiv- : the full amount in ad- Ce, the tribesman would le the debt, use the bal- “€ for a final fling at sure, and spend the Of his life in slavery Ing for his good time. Cu may tihnk this is a t custom.” a Manitoba Versity professor wrote to yf oronto Star recently. does it really differ Much from what Can- a been doing for the Ive years? For we have h going into debt to other Ties at the rate of more ae ‘D billion per year.” aa debt is the result of ing OD investment coming anada, most of it from Nited States. IS is the point made . Clarence I. Barber in . of five articles writ- a the Toronto Star. A Re economist of the . Of the Dominion Bureau tistics, Barber is regard- 8n- authority on mone- policy ‘and unemploy- Ut he is not the only one ic about the rate at et We are selling ourselv- bondage to the United Sequently the ‘same con- 4S recently been ex- by representatives *xchanges, by the Fin- Ost, and by Peter C. , in an article in Magazine titled, Went Wrone With Adar» oS a PICTURE €wman and Barber cm picture of Cana- = in the past five 8S done so badly,” as- €wman, “that its un- Ment rate exceeded eae other industrial- hie -Of in the world.” is Sharply contrasted dozen years bcfore be When London’s authori- inancial Times com- — awed envy: “Tne World appears to be in *'spiracy to find more faye uses for Canada’s Tesources.” oa are in the grip of €rity program. Cana- {Do pee hard currency is Ugh at its lower rate ly international bank to € have dropped from _*ighth place in the per capita trade. 8S replaced us as hog tY with the second- Standard of living. 957, almost 12,000 firms have gone loy the “many” i °r the present cat- State of affairs, IN. both Newman and Barber finally put their fingers on the main culprit —- the grow- ing U.S, domination of tae Canadian economy. “Canadians have been sub- jected to so much propagan- da about the desirability oi foreign investment that they fail to realize capital inflows can be harmful too,” writes Barber. “In fact, an excess inflow of foreign funds over the past few years has im- posed enormous losses on the Canadian economy.” One of these was the prem- ium on the Canadian dollar (six percent in 1957), which hampered our export indust- ries and subjected our dom- estic manufacturers to sev- ere import competition. The result of this was an increase in unemployment, a slowdown in the rate of Can- ada’s economic growth, and income losses of billions ‘out dollars. % It is an ironic twist, writ- es Barber, that ‘“‘many Cana- dians have been unemployed when they could have been producing some of the goods we have been borrowing money abroad to pay fore : Illustrating how foreign in- vestment shapes the economy, Barber points out that U.S. firms in Canada do very little research, and this prevents them from win- ning a competitive edge in the struggle for markets. In many cases, these subsidia- ries cannot export to U.S, mar- kets nor to other market outside Canada. All this adds up to a chronic balance of payments deficit which in 1957 reached a record of $1.5 billion. In order to cover this deficit, greater foreign investment. was encouraged, which, as Newman explains in Maclean’s, ‘Jeaves us in a unique economic trap.” “The investments made here by foreign investors now earn dividends and interest of nearly three quarters of a billion dollars a year which are sent out of the Magazine Section ployed than any ofher. industrialized nation.... 12,000 Sonbkedisites since 1957... .. Balance of payments deficits... Growing U.S. control... HAT’S WRONG WITH OUR ECONOMY? 9% Unemployment up... Unemployed as % of work force. 7% 5% 3% Lose ped JULY ’62 - 6.5%— . « Productivity down Per capita GNP in 1949 dolfars, 1,600 1,500 1400 1956 - $1,480 1,300 Lt} Lt 63 ‘54°55 ‘56 'S7 '58 ‘5D ‘60 ‘bl 1961 - $1,430 “62 pete! As tucguaoed 2 SPH Gt ecuntry. And the only way we can afford this outflow of funds is to keep encouraging more in- vestment dollars to come in.” The economic trap Newman warns us of is that ‘‘in order to raise the foreign funds, we must keep selling more and more of the assets we still possess.” Prof. Barber estimates _ this outflow of profits to be $600 million a year, and says this is a return of only three percent on investment. If the return on in- vestment should rise to six per- cent, the annual flow of profits out of the country would be more than $1 billion. WHAT’S OTTAWA DOING? What is the government doing to face up to the situation? Its short-term measures are the tem- porary import duties and tourist restrictions, says Barber. Its long-term aim is to rely on the lower exchange rate and on trade promotion projects recently outlined by Trade Minister Hees. Barber argues that the meas- ures adopted by the government are insufficient. ‘It is time,” he declares, ‘‘we threw away our capital import crutch.’ He points out to his readers . that the financial resources need- ed for the development of our country can be found at home. For example, total savings of all Canadians from 1947 to 1952 were large enough to pay for all our capital investment. Given a government willing to NONE OF THOSE RADICAL IDEAS outa You! | /GeT Your Feet RACK ON THE take the necessary steps, Cana- dians could have financed the de- velopment of their own country. But it must be noted also that Barber dates the present crisis back only to 1957 — which curi- ously enough, coincides with the time the Conservatives were elected to power. What he fails to point out (and perhaps this is no accident) is that the groundwork for our pre- sent troubles was laid by the Liberal Party in policies followed since the end of the Second World war. As early as 1947, the Commun- ist Party warned against the policy of economic with the United States, which was being charted and implemented by the Liberal Party. The aim of this policy was to transform Canada into a supplier of raw materials in its military buildup against the Soviet Union. ° The Communist Party warned that this policy would lead +o the loss of Canada’s economic and political soveignty. The Diefenbaker government was elected in 1957 largely be- cause of Diefenbaker’s ‘hints at promises to change this policy. Insead, however, the Conserva- tives continued the sell-out to the United States. Now, more and more Canadi- ans are beginning to see where the present road ends. Even some of those connected with financial interests here are cautiously suggesting ‘‘more Canadian par- ticipation in U.S.-controlled in- dustry in this country as a way out. : YANKEE CONTEMPT But the contempt the Yanks have for these aspiring’ Canadi- an junior partners was revealed in a brief presented by the Mont- real and Toronto stock exchanges to the Royal Commission on Banking and Finance. According to a Financial Post report, “attempts by Canada’s stock exchange authorities to en- courage foreign companies to sell shares in their Canadian invest- ors aren't meeting with much success. “Many foreign parents have given a cold shoulder to the idea, and stock-exchange officials are not too optimistic this attitutde will change — particularly for U.S. parents where advantages of material control outweigh pol- itical considerations.”’ The report adds that of 94 of the largest foreign corporations in Canada, 30 didn’t even reply to letters from the stock ex- integration: Oct. 12, 1962—PACIFIC TRIBUNE—Page 5 changes, 63 rejected the proposal outright, and only one said it would make equity participation available to Canadians. This attitude by the U.S. giants here simply underlines that no step short of nationalization of. foreign-controlled industry here can free us of the U.S. domina- tion of our country. All those who are spokesmen in one way or another for Cana- dian business, including Peter C. Newman and Prof. Barber, stud- iously avoid any discussion of this proposition. Because of this, although they assail the present policies of the government, they have little to offer as an altern. ative to austerity. NATIONALIZATION Nationalization of U.S.-control- led industry in Canada is part of the program advanced by the Communist Party. It points out that more than 50 per cent of Canadian manufacturing is for- eign-controlled. In specific indus- tries, such as petroleum, rubber, auto, etc., foreign control is much greater. In a message to the Canadian people after its 17th national con- vention, the Communist Party declared: “We must repatriate our great industries and natural resources, take them out of the hands of the U.S. corporations and restore them to the hands of Canadians. “The nationalization of the great U.S.-owned industries and the reclamation of the vast nat- ural resources now in the hands of U.S. corporations are first steps that can lead to the build- ing up of our own manufactur- ing industries, reduce unempoly- ment, raise living standards, and enable us to trade freely with all countries: of the wari” x Just where and how Canadians work At the time of Confederation, about one-half of Canada’s work- ers were employed in agriculture and about one-sixth each in manufacturing and service indus- tries. By the end of World War II agriculture employed only about 25. percent, manufacturing a little more than 25 percent and Service industries 40 percent. In 1960 workers in agriculture were down to 12 percent work. ers in manufacturing remained about 25 percent, while those in service industries rose to 52 per- cent.