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surmount on cm IsPacked no Elie barrio Examiner lava oi Published by Cnnhdlln Newslilpflrl Ltd 16 vBlyfiBid ducal Baltic Cumin PAGE FOUR son slams Bank President Outlines Necessity Avoid Inflation in addressing the 142nd annual meet ing of the Bank of Montreals sharehold ers President Arnold Hart noted that monetary and financial conditions in Canada have been very much in the fore front of public discussion and concern in the past year Let me attempt to describe concisely and hope objectively the current facts of life in the Canadian banking business Mr Hart said The story must begin with certain events in 1958 which in large measure gave rise to the tight money sit uation in 1959 in 12 months in the end of October 1958 the central bank permitted sub stantial increase of the order of sreuo million or 14 lnthe Canadian money supply think it is generally accepted that this was far greater degree of monetary expansion than could be justl fied as stimulus to business recovery Moreover and this point needs emphasis the monetary expansion in that period did not spring from any increase in the demand for bank loans for there was none On the contrary it resulted almost entirely from the chartered banks being enabled to take up an increase of nearly $1300 million in the direct and guaran teed funded debt of the federal govern ment at time when the investing public outside the banks showed no disposition to acquire by purchase of bonds the ad ditions in the federal debt Since October 1958 official monetary policy has taken another sharp turn The central bank has operated to keep the money supply on virtual plateau In the same period howeyer the business recov ery has brought with it demands for bank credit from borrowers large and small in all lines of endeavour and in all parts of the country The banks have re sponded to this need by increasing their Canadian loans of all kinds including mortgages under the National Housing Act by some $1300 million or 22 in the 12 monthsended October 31 1959 The Bank of Montreals loans in Canada have risen in this period by more than $300 million or 25 But the consequences of expanding loans were inevitable With the money supply being held level the shattered banks could let their loans rise only if they were willing and able to dispose of other assets in an approximately equiva lent amount In practical terms this has meant for all banks the sale of large blocks of government securities for most of the year in an unreceptivc market at progressively lower prices and hence at rising rate of capital loss Since October 1958 the banks have reduced their holdings of Government of Canada bonds by over billion dollars nearly as much as they bought in the preceding 12 months need not labor the point that apart entirely from the loss factor there comes time when the dictates of ordinary prudent banking policy will not permit any further disinvestmont in gov ernment securities It clearly follows that when this point is reached well run bank has no alternative but to make an effort to check further significant ad ditions to its loan portfolio And for the banking system generally that point was apparently reached in the late summer of the present year No banker likes to say no to credit worthy applicant but with broad limiting forces at work over which the banks have no control such an answer may on oc casion be the only answer that can be given Nor is it very reasonable to expect customer who under more normal cir cumstances would have no difficulty whatever in obtaining his credit require ments to be very happy when told that existing monetary pressure makes it nec essary to put his request aside for time Monetary stability and the price stabil ity we have experienced for this year have already paid some very solid divi dends For one thing inflationary psy chology has abated For another within the past 12 months the Canadian public outside the banks have acquired over $2 billion of government debt at time when the increase in the debt has been only about $600 million This is the re verse of thesituation last year when the increase in the debt was perforce being Qe THE PERVERSITY OI WINTER All the dreaded winter troubles des cended on the world at the close of 1959 Ice storm broke down hydro wires and interrupted telephonic communications Many lives were lost in accidents attri buted to iihe winter weather and UNO Who was faced with the prospect of snow shovelilng With the dawn of new year Winter with the perversity of woman showed her other side Adorned in all her finery she dazzled the eye with her beauty Ice encrusted trees sparkled like diamonds in the brilliant sunshine against the background of clear blue winter sky Who could fail to forget the tribulations of winter amid so much splendor Examiner Photo Canadas Stciture Grews In Red Cross League Work WINNIPEG CP Canadas stature among 111394 nations comprising the League of Red Cross Societies is growing steadily says John MacAulay taken up by the banks and thus adding of Winni cg board chairman of to the money supply rfurore is further constructive development without which monetary efforts as such would have proved unavaillng namely the fact that this year the federal governments cash budget clppears to be moving towards inlt stead of away from position oflbalancc Another bout of inflation is something that this country as trading nation just cannot aiiford Canada is doing busi nears1 tgooey in an increasingly coinpedtive wen DonePost Office Postmaster Tom Kerr and his staff at Barrie Post Office have eamod every bodys praise for the splendid manner in which they handled the Christmas rush of mail Several tons of parcels letters and cards were cleared although this often entailed all day and night working to bring it about There is great deal ofemotion con cealedln mail bags love letters dunning letters ponderosities greetings invita tions assignations letters addressed to Sir Madam Darling Sweetheart Ducky Dearest and sometimes perfumed notes from youthful writers so much in love The sorting of all this and its delivery was done with smiles of welcome from the post office staff and by polite post men eager to serve We record it with pleasure and con gratulate Mr Kerr and the members of his staff for Job well done Opinions of Other Newspapers PILOIS ONGBEAT LAKES Ottawa Citizen difference of opinion between Ottawa and Washington on the compulsory use of pilots on ocean going ships on the Great Lakes has existed for some time but the Canadian poinl of view seems to be making an impression at last on the US State Department The issue is whether pilots should be compulsory throughout theGreat Lakesst Lawrence Seaway or only in narrow waters harbors and other restricted areas Canada favors the limited use of pilots The US Coast Guard however stands behind de mands by the US pilots association for compul sory use throughout the internal waterway Leg islation is pending before both Parliament and Congress that is to say there are two measures in conflict with each other but passage has been defelred pending further consultation between the Canadian and US governments The Canadian view is reasonable one and If is to be hoped it prevails Ottawa argues rightly that the US plan would boost shipping Paragrapugauyspeaking All that glitters is not gold and this is particularly true afathe alleged gol den years Tillie barrio Examiner skiingnewness aauy Bundaye and statutory auuam exceptsi xwaus barium and oebuu Mania wanna insiders Manager NEVILLE semen Mandug calm gonna suntan Advertising MinEly JOHN nuance circulation Annalee Subscription nll our Dy comer lilo weekly page yeu Sélagln copy Hymnu in crude ear man three men ml Outside Clncdl last year Offices 425 University Ave Tororitcfufl Cattlert Siroet Montreal 1125 West Georgia Strut Vancouver amen of the Canadian if illhell Association The Curling lg Pond Ptib Audit Bureau of dtrculofloru The Canadian Frau is exclusively entitled to use for refiubliceuon of all now etchI in one ted to if right of republicflan or Insole diloltebéi lvboreln on also reserved rumnuns Number baron1 Adv ram hm um Wurstrm Id will ample of the man who for her ll ornrhn Assoc ma mu nr Win and device ioaaincm pupam therein steam do much to discourageforelgn vesabla from using the Seaway The American argument is that foreign masters are unaccustomed to navi gation in the Great Lakes and thatpllois are re quired for safety purposes This argument has hem sharply assailed by some visiting ship cep Tbe Canadian plan would require masters of overseasvessels to obtain certificate showing that they understand the rules of the road in these internal waters and are fully qualified to take their vessels over the open lakes without pilot beingsabcard In narrow waters services of pilot would be obligatory That should be PERJURY INDECENCY Victoria Times Manufactured evidence and perjury are com mun ingredients of the indecency which accom panies divorce proceedings so frequently in Care ado today Whatpurposo is being served by re taming such system Man can comparatively quickly do anything he can imaginehe can do says pseudophilosopher Not so For many years man has been imagining he could cure common cold The university group discussed con vergenceof the purturbatlon solution to the problem of transverse vibration of beam resting on an elastic foundation Frees Report This vibration of course is abouthalf way between shimmy and wobble lt The present whereabouts isnt known lstmas gave his wife deed to cemetery lot Seen on movie theatre marquee Hole Kiss Pockets under eyes accruing Come from midnight televiawing Many person has hole in the head throughwhich what enters endear goes out the other In tholIeadl It Started With the wcrl humanitarian organiza lion The 64yearold former farm boy who has become leading lawyer businessman and patron of the arts is the first Canadian to hold this highest office in the International Red Cross organiza tion He points to his election last Sepiember at Athens as evi dence of Canadas growing pres tige gt My appointment as chairman was not personaltribute he said in an interview It was tribute in the status and stature of the Canadian Red Cross in the eyes of the other member na tions SKILLED ARBITER But the modest appraisal omits Merence to the ability of the stemmannered pipe making lawyer as aidlled arbiter in ex plosive issues that have threat ened to carry the cold war be tween East and West into the league His reputation as an efficient chairman siems partly from his knowledge of International Red Cross regulations and insistence that they be followed After he had succeeded in keeping politi cal tensions out of the lath inter national conference at Toronto in 1952 the Soviet delegate Gen Nikolai Slavic said he wasftou barsb too legal Mr Macaulay locks every inch lawyer or maybe business man He is conservative dresser favoring suits of dark blue or grey complete with vest lie is of medium build with re ceding grey hair He speaks in lowpitchedal mostgrulfvoice and weighs his words carefully Frequently be gestlculates with his hands or his everpresent pipe However he takes cigaret now and then at party and an occasional grink but naver during the 20 YEARS SERVICE Allis appointment to the two year term as chairman of the leaguean organization that co ordinates the efforts of 84 nations to speed aid to the needy infime of disasterclimaxes 20 years of voluntary Red Cross work John Alexander MacAulay was born May 28 1895 near Morden Man 78 mllessouthwesi of Win nipeg The sixth of seven child ren be attended local public and high schools Later he studied at home and passed examinations for arts and law degrees at the Claim Soviet Subs Around Australia BRISBANE Australia AP Soviet submarines often cruise in Pacific areas north of Australia and duck for cover when Sighted JAdmiral Sir rIcrald Gladstone said Sunday night i2 commander in chief of Britains Royal Naval Far East station arrived here in the frigate Alert after cruise to New Zea it isbot uncommon for navy filers to sight Soviet submarines on the surface he said They submerge immediately whan their crews see the plane ldo notknowwhy After all mean highwaysare frec roads Thcjr presence can an University of Manitoba and Man itoba Law School He was called to the Manitoba Bar in 1919 on his return from Eliyear bitch with the Cann dian Army Medical Corps Aplt pointed kings counsel in 1931 be since has become senior part per in the Winnipeg law firm of Alidns MacAulay Mallet Dick son flinch andMcGavin lie was president of the Caric dlan Bar Association in 195354 WIDE INTERESTS Mr MaeAulay is president of two financial firms General As sets Limited and Western Assets Limited chairman of Maniioba Sugar Company Limited vire president of Canada Safeway Limited Great West Life Assur ance Company and the Bank of Montreal and director of several other firms His Red Cross work started with the Manitoba branch at the cpenlng of the Second World War when volunteer workers were asked for He served as Manl toba president in 194647 and headed th Central Canadian council in 195051 In 1951 be was asked to serve as chairman oftbe international conference at Torontolbs first to be attended by delegates fro Communist nations ills control of conference ses sions won grudging respect from rlhe Russian delegates as they bowed to his rulings keeping the meetings lree of politicalsqueb bles BEADED COMMISSIONS The reputation was enhanced in 1957 when he served as cbair man of two commissions during the 19th international conference at New Delhi lie successfully prevented walkout by Communist dele gates by dodging the issue of Chinas official representation On the heated sessions be com mented The chairmans rul ings were observed badto be politeWe were all Red Cross people But had to be firm too case Mr MacAuisy warned the Hungarian delegates speaking out of order Wben they bought um an been played six aliases and lived in six liked them be said PLAYED KEY ROLE Elia common interests in the Red Crass and art led in 1953 to his playing part latbe return of some Polish art treasures to Poland after they had been stored in Canada since the See and World War Asked during Red Cross visit to Poland to seek their return be arranged meeting in Canada between Polishofficials and the Bank of Montreal in whose it two vaults half the art works were stored This started the ma chinery whichcventualiy saw the works reiumed to Poland Besides art bis pastimes in clude spending as much time as pOSslblc at my summer home at Lac du Bonnet At this re sort 50 miles northeast of Win nipeg he walks four miles day swims and boats lie and his wife Phyllis have son John Blair who graduates in law here next year and daughter Carol Joan who lsdc ing secretarial work in Toronto PHOTO EDITORS MacAulay beadchoulden issued $69 DINNER FOR CHURCHILL MONACO HananSir Win sion Churchill was guest Sunday night at small intimate dinner in his hoaor given by Lord Beaverbraok Canadian born British newspaper magnate at his Villa Capcncina at Cap dAli entire French Riviera The for mer British prime minister ap peering in excellent health or réived Saturday for winter boil At anotherpoint in the confer persistedheswltched off their microphones DEALS WITH POLICY His new position deals mainly with league policy Administra tlon is handled by 72member secretariat at Geneva headquar ters which be expecis to visit tvvice year His duties here take about days from his busy weekly schedule Mr MacAulays chief diver sion is art collection of oil paintings is rated among theiin est in Canada It consists of about half Canadian artists and baifPrencli impressionists With few British works collected over period of an years Despite his interest in art Mr MaeAulay neither draws nor paints fie declines to estrmaie the value on his collectionone estimate was $500000A and he says he has no favorites among the works gt BIBLE THOUGHT Lord make his path straight éMafihew 33 memoonum Prepaid the to the Consistent Christiab living pre does not couripares the way for Christ tinge MUNICH West Germany AP Mimicbmihc symbol of become of clandestine resistance muti lCorinna union in Iron Main Smooth it fun loving uuflce the old Bavarian cl of beer hello and art gall locum willI cloak and intrigue udquarten tau corm tenpiu and anti Communist raiderground movements Munich lay bi Western intelligence official like the periscope of giant submarine packed with agents peeringover the Iron Curtain and eyeing each other with suspicion At least three unexplained deaths in iha put five can in cluding that of the egendory Ukrainian freedom fighter Siepen Benders are attributed by police to the silent underground war between East and Wm Tight iipped men usually in groups of three to five carrying mm and propaganda are fre quently slipping out of the city on secret missions info their Red ruled bomeinads UNTOLD PUBLICATIONS lbey return if they dowitb information that is processed and fed into untold number of publi callous that are sold around the world and help finance the relu geee underground activities Tire Communist countries claim Munich is the recruiting centre for agents spying on behalf of the United States intelligence Soviet counter agents are in the city tao spying on spies and refugees andWesteraen have no doubt picking off the leaders of the underground movements new and then Occasionally couatorspy is exposed We iurn them over to Gannon police says Russian refugee German police who havent re ceived many of them are in clined to doubt it Uaderground Munich is world of lease secrecy Men rarely talk about themselves or their work No one wants his name iluned One refugee leader em apartments Peeping Over Iron Curtain There are 31000 registered ref ugees in Munich They are grouped in no orglaiutlcax They are united in the fight Iguth communism But there are bitter political and ethnic dif ferences helmet the Allies There are riuuioae who want in reestablish the cum restore Other strive for Russian re public and yet another group has strong socialist ideals while will being violently obliSovlet The same applies to the Poles Slovslu Romanians Hungarians Bulgarian Albn lacs and the Yugoslavl subdi vided into Serbs Creel and Slog vnou Nearly all the lit refuge groups bead uartored in Munich are re lo have ceath with their countrymen on the other side of the Iron Curtain Some will talk about it privately Mair wont much too much at humanism curve The organisation of Russian Solidarirf MS in one of the few which will admit smuggling men through the Iron Curtain lo siders lay Hungarian refugeee are the molt active in keeslng up contacts in their bomelan The actual dispatch of agent into Communist countries is nec euorlly one of the bestkept lec rcts of the silent war Parachuting them in from sin plum is said on good authority to have ceased some time ago largely dueta the greater vigil once of the Red air forces and twheir improved rider spotting duI ces Land routes now are the only underground link between the free and Communist Worldsand even these channels have become tighter and more dangerous The correspondent talked io several refugees who walked all the way from Munich to destina tions behind the Iron Curtain and later returned We walked 47 days biking by night and sleeping in secret hide ouls by day said one Ukrainian lle laid he has made the trlp Czechoslovakia to the Ukraine three times most re cently in 1951 Despooate Dictator Promotes Crisis To Steve By DAVE ushers clawn Preu scan Writer growing number of observers has swung over to the belief that the new tension around Iraq is the picture of desperate diets for promoting an artificial crisis to stave off real one at home Iraqs current conflict with neighboring iron over an issue that most thought was settled 20 years ago probably will blow over without serious shooting But it is the latest in series of events that can be interpreled as deliberate attempt by Iraqi Premier Abdel Karim Kassem to lose friends abroad in bid to influence people at home CRUCIAL DAY The crucial day for Kassem is Jon otbe date he promisedgto restore nonnal political activ ity in Iraq It may be that by provoking an atmosphere of ori sis Kareem hopes to justify re tention of real control in his own hands The Iraqi premier long ago sacrificed any possibility of better relations with his Arab neighbors King Husseins Jordan and President Nassers United Arab Republic of Egypt and Syria The result was that be becama the focal point of one of the most vicious propaganda battles ever Off Trouble waged by Arab brother against brother More and more Kassem relied on Conununisls to help under write his power The Communist motive undoubtedly is to keep the premier in power until the time is ripe for them to take over it normal political activity is restored next week the way would be cleared fora constitu tional takeover by the Reds Their highly organized cadres throughout the country could al most certainly be relied on to engineer Communist victory through the polls ARMY DWIDED The National Democratsth strongest opposition to the Com gt munlsLsare firmly entrenched in Kassems cabinet but are viewed as extremely week at the popular level The army too is reported to be divided Kessem may at least for little while be seeking ways to play nneside against the other until way can be found out of the impasse But some Middle Eastern as parts how question whether Kass sem is capable of maintaining such delicate manoeuvres liie impression given is that the st tempt to shoot him down lnitbr Baghdad streets and his sub sequent convslescence seriously1 shook his selfconfldence nerve and strength of will