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Even if it can be borne, the fortuitous gain to the creditor of 40 to 48 per cent in general purchasing power above what he contracted for appears to be a grave injustice. Moreover, such fixed charges, except as they are reduced by bankruptcy and re-organization, are not being adjusted by the normal corrective processes which falling prices are supposed to set in motion. Indeed it seems that new disequilibria are created almost as rapidly as old maladjustments are corrected and the paralysis of business enterprise with profit margins uncertain or nonexistent continues. Trade languishes and unemployment persists or tends to become aggravated. One of the most important effects of the fall in prices is the increased burden of the fixed charges payable on our Governmental and private obligations held abroad, chiefly in the United States and the United Kingdom. Canada is an important debtor country; on January 1, 1932, total British and foreign investments in Canada were estimated at 6-4 billion dollars, against which is an offsetting Canadian investment abroad of 1-8 billion dollars. A careful compilation of the amounts we will have to pay abroad during the fiscal year ending March 31, 1933, indicates a total of $362,000,000, or over a million dollars a day (exclusive of Sundays). Of this total, $233,000,000 represents interest and $129,000,000 represents maturing principal. Moreover, declining commodity prices have greatly increased the drain of this interest and amortization bill upon our national production. As one dollar to-day will purchase at wholesale 48 per cent more than it did in 1929, the real burden of the service charges on these foreign obligations has increased from $362,000,000 to $535,750,000. It is true that there would be some offset because of the fact that these commitments include interest and principal payable to Canadian nationals who will exercise the privilege of cashing their coupons and bonds in New York when the terms of the security allow that alternative. Such payments will eventually come back to Canada. It is estimated that possibly from 25 to 50 million dollars will return to this Dominion. (There is a wide range to this estimate because it is impossible to estimate with precision). This leaves a net balance of service charges payable abroad amounting to from $310,000,000 to $340,000,000 which in terms of the 1929 dollar would be equivalent to from $460,000,000 to $500,000,000. The total value of our wheat and wheat flour exports in the record year 1929 was $494,000,000; in the fiscal year ended last March it had fallen to $135,000,000. From another angle these obligations abroad are of major significance in the consideration of Canada's monetary policies. Most of them are payable in New York or optionally in Canada and New York or Canada, London and New York. Where such options exist, the premium on New York funds makes it practically inevitable that payment should be demanded in New York funds. This means that during the year ended next March a maximum of over $279,000,000 will be payable in the United States. England's going off the gold standard was followed by a drastic decline in the price of our dollar on the New York market. The effect which this action by England had on Canada is difficult to exaggerate. It has resulted in a struggle to maintain the national integrity. It was necessary for us to increase customs duties not for the purpose of protection, but to maintain the balance of our national position. We had either to face bankruptcy or restrict imports. At one time, our dollar fell as low as 75 cents in the New York market. To-day the premium on New York funds is only 14 or 15 per cent, but even with this premium the increased burden to the individual corporation or government of servicing these foreign loans is obviously a heavy one. It is equally clear that the depreciation of the Canadian dollar and the fluctuations in New York exchange increase the difficulty of refunding old loans and floating new issues in the American market. This is particularly important in view of the fact that since the war the United States has been our chief source of capital imports. Of the 6-4 billions of foreign investments in Canada referred to above, over 3-9 billions or nearly 62 per cent are owned in the United States, and only 2-2 billions or 34 per cent in the United Kingdom. From 1924 to 1931, the United States absorbed over 41 per cent of the public issues of Canadian bonds, whereas the United Kingdom's purchases averaged less than 2 per cent of the total as compared with approximately 75 per cent before the war. At the end of 1931, Canadian banks had 83 million dollars loaned on call in New York and over 100 million dollars in bank balances in that market. Under present conditions, therefore, the relationship of our dollar to the American dollar is bound to be of great significance to Canada.