Among the several inductive studies of the international transfer mechanism, Professor Viner's investigation of Canada's foreign borrowings in the period 1900–13 has provided the most convincing substantiation of the classical price-specie-flow mechanism. Yet, on the theoretical level, the neo-Keynesian theory of international trade now makes it difficult to accept the classical view of the transfer process as a complete explanation. And, on the empirical level, the availability of more comprehensive statistics and further research in Canada's economic history now allow us to understand in greater detail the forces of economic growth which were particularly strong in Canada during the years of foreign borrowing. Should we not therefore attempt to supplement Professor Viner's study by recognizing the relevance of income analysis and the historical context of economic development?

To place Professor Viner's study in this wider frame of analysis is the objective of this paper. Section one briefly recalls the conclusions of Professor Viner's investigation. The second section establishes some significant features of Canada's economic development, while the final section relates these features to the operation of the transfer mechanism and revises Professor Viner's interpretation.

Contemporary industry and society have brought major changes to the economic and social life of the Indians of British Columbia. Most tribal cultures were built upon a simple small-scale base. The tribal band was typically small and closely knit with personal relationships; the individual's status and role were clearly defined, and his activities regulated by tradition. Hunting, fishing, and gathering supplied a livelihood. Equipment and techniques were generally simple and static. Most of the output was for the local community's own use: only a small fraction was bartered for the products of other groups.

The new economic system and the way of life associated with it is almost the direct antithesis of the tribal system outlined above. Today the Indian is involved in a large-scale and increasingly complex system of production and distribution, characterized by dynamic, rapidly changing techniques, a steadily increasing use of automatic power-driven machinery, and a growing production for national or international markets rather than for local use. As worker or producer he has, with few exceptions, lost his direct ownership of, or control over, his means of production. Relationships, defined increasingly by the market rather than by custom, have become more impersonal.

Comparatively few Indians have managed to derive full advantage from the new way of life. Tribal cultures have been disorganized or destroyed, and with them has gone the whole structure of role and status that made life meaningful for individuals. Indians have faced formidable difficulties in acquiring the economic incentives of the white man's culture, and the equipment and techniques with which to meet them. The result has been, in all too many cases, deterioration of morale, apathy, and economic dependency. Indians have become a marginal labour group in many areas: living on reservations, depending upon the government for a large part of their subsistence, and employed only casually in unskilled or menial jobs of a type that other workers avoid.

Shortly after the outbreak of war in 1939 foreign exchange control was imposed to maintain exchange stability and to conserve Canada's reserves and prospective receipts of foreign exchange so that they might be used in the first instance for purposes deemed to be in the national interest. An ancillary objective related to war financing was to prevent the demoralization of Canadian securities markets through panic sales by non-residents in moments of crisis. While the control was directed essentially against exports of capital by residents and non-residents, the instruments of control applied equally to current and capital transactions and the power given to the Board of regulating current transactions was exercised restrictively on occasion, notably in the case of travel. Of necessity the machinery of control was elaborate because it had to be all-embracing but it rested on five basic rules: (1) Permits were required for payments by residents to non-residents. (2) Permits were required for the export of funds by travellers. (3) Permits were required for change of status from resident to non-resident. (4) Residents were required to sell to an authorized dealer all foreign exchange accruing to them. (5) Payment in an appropriate manner and in a currency designated by the Board was required for exports of goods, services, and securities, and for anything of value transferred from a resident to a non-resident whether in Canada or abroad.

In the United States the chief concern of unionists has been the conduct of industrial negotiations, but in New Zealand and Australia the significant achievements of workers, almost without exception, have been gained through political action. Around the turn of the century, students of labour movements were led by the successes of Australasian workers to speculate about the different roads which workers had taken there and in the United States. As its general political and economic features became familiar, particularly such prominent ones as factory codes and arbitration procedures, political unionism ceased to be a curious phenomenon, and students turned their eyes elsewhere. In so doing, they lost sight of the subterranean forces and directing currents which have turned the energies of workers toward politics.

Historically, the similarity between the United States and New Zealand is arresting. Both were frontier countries with fluid institutions and expanding economies, although New Zealand had no moving frontier as had the United States. Both were settled from England and inherited English legal and cultural traditions. Both early developed democratic political processes, and both were characterized by a high standard of living for workingmen as a result of the natural scarcity of labour typical of inaccessible and virgin countries. In both countries, the land offered an alternative to wage-earning which favoured social as well as occupational mobility. Both countries lacked the stratification of a traditional aristocracy. In both countries, extension of the franchise placed the political weapon in the hands of the people. The analogy is more than historical: today New Zealand and the United States are generally acknowledged to be among the leading nations of the world in terms of plane of living. What, then, explains the development in the United States of a system of collective bargaining by workers with their employers, and the growth in New Zealand of a system of bargaining vis-à-vis the state?

A comparison of international capital flows which are occurring today to economically undeveloped areas, with similar international investment in economic development which occurred prior to World War I is almost inevitable and indeed has often been made more or less explicitly. The obvious differences between the two periods lie in the proportion of private capital in the total of international investment in undeveloped areas, and in the pace of economic development then and now. Capital flowing to undeveloped areas today is preponderantly from public bodies: various agencies of the United States Government, the International Bank for Reconstruction and Development, or the United Nations. By contrast, international capital invested in economic development prior to World War I was exclusively from private sources. Then, too, the areas which were developed prior to 1914 experienced within a decade tremendous increases in population of 30 to 50 per cent and increases in the output of their major industries of 200 to 400 per cent. The purpose of this paper is to examine the role of private enterprise and initiative in the international investment in undeveloped areas in the period from 1875 to 1914 and the reasons for the relatively unimportant position of private international capital in economic development today.

This, one of the extremely limited number of full-length studies devoted exclusively to resale price maintenance in Great Britain, is a doctoral thesis submitted to the University of Amsterdam. The author, apparently trained in economics at British universities, also claims a “connection with the trade in branded consumer goods” lasting “for a number of years.” In his introduction, Dr. Kuipers expresses particular dissatisfaction with the theoretical analyses advanced by British economists, which, he claims, are inadequately supported by “facts.” His own analysis he believes to be sufficiently comprehensive to enable him to derive a formula, “the adoption of which … would provide an adequate solution to the problem [of resale price maintenance] in Great Britain under present conditions” (p. 3). The degree to which other economists will recognize this ambitious claim will depend on whether they accept Kuipers' analysis of what “the problem” of resale price maintenance is and, for those who do, whether they also believe that his particular scheme is desirable and administratively feasible.

The volume is divided into two parts: the first deals in a general way with the legal and economic aspects of resale price maintenance in Great Britain and lays the basis for Dr. Kuipers' policy recommendations; the second part deals with the nature and extent of price maintenance in the British grocery trade. Although more than one hundred pages are devoted to the latter section, the empirical data upon which the statistical analysis is based are very sketchy. Dr. Kuipers is not unaware of this weakness but he considers the results “generally accurate” and “sufficiently near the mark.” Whether or not one agrees with this assessment, there can be little question that Dr. Kuipers has achieved as much as an individual investigator, working unassisted, could hope to do.