Deposit in the Central Gold Reserves... Dominion and Provincial Government securities, not exceeding market value..... Canadian municipal securities and British, Foreign and Colonial public securities other than Canadian, not exceeding market value. Railway and other bonds, debentures and stocks, not exceeding market value...... Call and short (not exceeding thirty days) loans in Canada on stocks, debentures and bonds and other securities of a sufficient marketable value to cover......... Call and short (not exceeding thirty days) loans elsewhere than in Canada on stocks, debentures and bonds and other securities of a sufficient marketable value to cover. Other current loans and discounts in Canada (less rebate of interest) after making full $45,455,351.23 6,000,000.00 31,463,978.32 10,293,500.20 12,491,890.15 19,380,733.39 11,308,375.41 $136,393,828.70 provision for all bad and doubtful debts... $ 75,944,208.49 Other current loans and discounts elsewhere than in Canada (less rebate of interest) after making full provision for all bad and doubtful debts.... 19,732,839.27 AUDITORS' REPORT TO THE SHAREHOLDERS: We have examined the above General Statement of Liabilities and Assets as at December 31st, 1926, and compared it with the books at the Chief Office and with the certified returns from the Branches. The Bank's investments and cash on hand at the Chief Office and at the Toronto and Montreal Branches were verified by us at the close of business on December 31st, 1926. We have obtained all the information and explanations that we have required, and in our opinion the transactions of the Bank which have come under our notice have been within the powers of the Bank. We certify that in our opinion the above statement discloses the true condition of the Bank and is as shown by the books of the Bank. D. McK. MCCLELLAND, F.C.A., of Riddell, Stead, Graham & Auditors, Toronto, Canada, 15th January, 1927. DIRECTORS FOR 1927 G. S. Campbell, Esq., LL.D., Halifax, N.S. Hon. George Bryson, Fort Coulonge, Que. Hon. MacCallum Grant, Halifax, N.S. At a Meeting of the newly elected Directors held subsequently, Mr. G. S. Campbell was re-elected President and Mr. J. Walter Allison, Vice-President. QUICKENING BUSINESS ACTIVITIES ADDRESSES DELIVERED AT FIFTY-SECOND ANNUAL MEEETING Address by Mr. OF THE STANDARD BANK OF CANADA Arthur F. White, February 23rd, 1927 Turning to the Balance Sheet, we find no changes of importance, yet it reflects another year of steady growth in all departments. The total resources are over the $90,000,000 mark, and, for the first time in our history, the profits have exceeded the $800,000 figure. Realization of these important objectives prompts us to look forward to greater attainments in the future. So that you may be fully informed, Mr. McLeod will review the statement in detail. We have already proceeded sufficiently far into 1927 to realize that the optimism so widespread at the close of 1926 was fully justified. Conditions in Canada are generally sound and while there is over-production here and there, no real inflation is apparent. We are witnessing the curious anomaly of quickening business activities and the continuance of almost unprecedented ease in money. Many factors are contributing to this state of financial ease, not the least important being smaller inventories, quicker turnover and vastly improved transportation services. There is abundant capital at reasonable rates available for the enlargement of our commercial and industrial structure; no more favourable condition has existed for many years. On the other hand, a careful analysis reveals other phases of the situation which are capable of improvement. The real basis of our prosperity has been the healthy state of agriculture during the past two years. It is fair to assume, however, that heavy capital expenditure on the part of hydraulic-power, mining and pulp and paper developments have been an important factor as well. Perhaps this is not generally recognized and may be analogous in some degree to the favourable conditions of two decades ago, which were largely the result of immense capital outlays for railway expansion at that time. It is possible, therefore, that fundamentally we have not progressed to the extent that a superficial view would lead us to assume. It is an accepted principle that the expansion of agriculture depends mainly upon immigration, and unfortunately during 1926 improvement in that direction was disappointing. There are signs, however, that a change for the better is imminent. Our Steel industry capable of enormous possibilities-with its abundant development of railway tonnage, labour, buying power, etc.— continues in its deplorable state. It is impossible to discuss this important item, however, without, of necessity involving fiscal matters; therefore, we must content ourselves with having drawn attention to it. Nevertheless, the highly unsatisfactory condition in which we find this great basic industry deserves the thoughtful consideration of the people of Canada. In the commercial field the rapidly changing developments in business methods are of absorbing interest. Centralization proceeds apace, and under the ever-increasing pressure of over-head, efficiency is the order of the day. The Chain Store flourishes. Instalment buying has assumed tremendous proportions. Regretfully we view the slow but inevitable passing of the small merchant who fails to acquire newer methods. Wholesale and jobbing concerns are also affected by this movement, and are confronted with problems difficult of solution, while the public appears to be reaping some share of the benefit in cheaper commodities. Based upon the plentitude of money, investment conditions during 1926 were wonderfully satisfactory. Investors in the United States and abroad continue to regard Canadian securities most favourably, and to acquire them at a price commensurate with the high degree of credit they enjoy a status second only to that of our great neighbour to the South. This has forced the Canadian investor into the unique position of having to compete with the great money markets of the world for his own securities. In this way Canada has become a Creditor nation owning substantial funds with which to take advantage of the very generous terms on which foreign governments and corporations have found it necessary to borrow. The income from such investments forms an important and ever-increasing item in the so-called invisible balance of trade. It is fortunate that Canadian investors have been able to avail themselves of this opportunity, for already there are signs of a decrease in the volume of foreign borrowings. It is discernible even to-day that as foreign countries return to normal their own investors in turn repurchase the external loans issued during a period of stress. A report recently issued by one of the American Investment Services states that the German rediscount rate, which prevailed at 10% during 1924, is now 5%: in March 1924 the rediscount rate in Hungary was 18%-it is now 6%. In Norway the rediscount was 7% throughout 1924 and it is now 42%. These figures illustrate in a striking manner the improvement which is taking place abroad. Canadian Government and Provincial loans during 1926 continued in volume but were mainly for refunding purposes and represented no real addition to net indebtedness. Gratifying indeed is the recent pronouncement by the Minister of Finance in connection with the substantial reduction in our country's net debt during the last fiscal year. Stock Exchange activities have kept pace with the changes in the bond market. Not so long ago it was the popular conception that pronounced Stock Exchange movements were largely speculative in origin. To-day, notwithstanding the remarkable volume of transactions, brokers' and bankers' advances against stocks have not increased proportionately, the inference being that buying for investment account has been substantial and real. To-day the strong boxes of investors contain a goodly proportion of investment shares. This may presage future financing of our industrial companies by means of stock issues as against the present practice of capital obligations. This tendency is not without its advantages, providing, as it does, much greater flexibility. From the standpoint of the general development of our country, nothing gives greater promise and encouragement than the recently announced reduction in taxation. With every phase of our economic life taxation has a vital connection. Even a small reduction is accelerated and gives an impetus out of all proportion to its original significance. The present favourable fiscal condition of our country gives us every reason to expect still further lightening of the burden of taxation. In a very large measure the continued loyalty and efficiency of our staff have made possible this year's excellent results, and the Directors acknowledge with pleasure and appreciation this most satisfactory phase of the Bank's internal economy. Address by Mr. N. L. McLeod, Manager At our last Annual Meeting reference was made to the improvement in general business in evidence towards the close of the year. The Balance Sheet and Profit and Loss Statement in your hands to-day, being the 52nd Annual Report of this Bank, are sufficient proof that these favourable conditions have continued throughout 1926. There are many indications that lead us to believe that Canada has definitely passed through the post-war period of depression, and is well embarked on an era of prosperity. The reductions in Dominion taxation which became effective in 1926 have proved a welcome relief to business. The further reductions recently forecast will prove an additional encouragement towards the launching of new enterprises and increasing the present capacity of many old establishments. The Profit and Loss Account shows that our earning power has been greater. The profits for the year, after deducting expenses, interest on deposits, Provincial and Municipal taxes, and providing for bad debts, amount to $821,886, an increase of $48,063 over the previous year, and the highest in the history of the Bank. After disbursing four quarterly dividends at the rate of 12% per annum, making the usual appropriations for Federal Taxes, Officers' Pension Fund, and providing for all bad and doubtful debts, $317,736 is carried forward at credit of the account, as against $207,892 brought forward last year. Referring to the General Statement, you will observe an increase of $3,716,544 in the deposits, being an increase of 5%%. |