In this paper certain statistical and theoretical problems connected with changes in the level of real wages will be examined. In the first place, information is presented which deals with recent trends in real wages in the United States and in Great Britain. Next, there follows a more or less sketchy treatment of the conventional theory of distribution—this, to provide the analytical tools for the interpretation of these movements. Finally, the significance of these various determinants of the level of real wages is discussed, in the light of statistical and descriptive material to be presented in this paper.

It must be noted at the outset that no very careful treatment is accorded the British material. For the purposes of this survey, the British experience—which was perhaps “normal” in some vague sense—is used as a basis for comparison and contrast with the distinctly “abnormal” American experience. The statistical data presented deal only with the six-year period beginning with 1932 and ending in January, 1938. Prior to the earlier date (1932) adequate information about wages and hours of work in the United States was not available. In any case, even six years, if studied by months, provide quite a wealth of statistical data—enough at least for a preliminary survey such as this.

The subject of the investigation has been the changes in real hourly earnings. This was decided upon for reasons of convenience and not because it was supposed that such an index offered the most significant measure of change in the workers' income. Very probably, most of us would feel that changes in the purchasing power of weekly or annual earnings, or even of working-life earnings, would more satisfactorily measure such alterations. But it is difficult to establish such indices, and the concepts they measure are not so amenable to theoretical treatment.

The economic sphere of influence of the St. Lawrence region contracted after 1821 owing to the pressure of competition in the fur trade from Hudson Bay. Withdrawal from the light, highly valuable staple, fur, was accompanied by increasing concentration on a staple of a bulky character, namely, timber. Settlement emerged with the timber trade especially in Upper Canada. Settlement and wheat exports were stimulated by the steamship and necessitated improvement of the St. Lawrence by canals and railways. The opening of the Erie Canal in 1825 increased the urgency for improved navigation on the St. Lawrence, if Montreal were to compete effectively with New York. The pressure of geography, a small population, a lack of capital, and competition from the United States involved governmental support. Economic development was, therefore, inextricably linked to political growth to achieve this objective. Government construction of canals was handicapped by the division of the provinces, and contributed to the demands for union. The Act of Union of 1840 as a broader political base for expansion of public debt involved control of taxation, and responsible government. Disintegration of the old Colonial System in the abolition of the Corn Laws in 1846 and the Navigation Acts in 1849 was accompanied by the emergence of control over tariffs as an essential device for acquiring revenue. The tariff became vital to the improvement of the St. Lawrence and the introduction of capital on a large scale by the government. The privilege of determining the course of economic development was accompanied by the problem of meeting the costs involved.

This is an account of the issue of dated stamp scrip in Alberta in 1936. The data were gathered a year later, and the scantiness of the information then available has resulted in important gaps which cannot be filled. But for several reasons it has seemed desirable to attempt a description and explanation of what happened. First, there is general interest in the actions of the present Alberta government, the only Social Credit government which has been elected to office in any country. The second reason is the paradox that the Social Credit government's first monetary innovation was not the installation of Social Credit, but the adoption of a rival monetary reform, the dated stamp money of Gesell. Thirdly, the interest of many people, including the monetary theorists, J. M. Keynes and Irving Fisher, in the economic ideas of Gesell seems to make an investigation of the Alberta episode worth while, even though Gesell's device was not introduced in exactly the manner he would have adopted. Fourthly, the prevalence in our time of many types of movements for monetary reform calls for as much documentation as possible of what is actually done. Finally, the economic problems of the Prairie Provinces are persistent enough to justify a record and analysis of each type of solution which is offered.

To administer the Canadian Income Tax Law, Canada is divided into nineteen districts. The districts are irregular in shape and of different areas. Their shape was influenced by the desire to have a district follow the railway lines. Recognition was given also to the main centres and provinces. In the beginning, sub-offices were required to serve the people, but experience has shown that they are not a necessity and most of them have been closed. The districts have remained unchanged for about ten years. Each is in charge of an inspector directly responsible to Ottawa.

The amount of the revenue collected in each district is not a true criterion of the wealth of the particular district. Some small districts have the head office of a few large corporations in them. The district of London, Ontario, for instance, has in it such companies as the Ford Motor Car and Imperial Oil. Their income is derived from world-wide sources. Consequently on a revenue collection basis the district appears to have more wealth in it than it really has. It is the same with Toronto and Montreal.

Usually a company files and pays its tax in the district where it has its head office, although the business of the company may be located in some other district. For example, the mines of northern Ontario are located in the Ottawa district but their corporate head offices are in Toronto, so they file and pay their taxes there. There is not any compulsion to pay in any particular district. Districts are established for the convenience of the public and returns can be filed in the district most convenient for the taxpayer.

The Dominion Government is by long odds the most complicated, and in most respects the largest, administrative enterprise in this country. Its activities cover a wider scope and show a greater variety than those of any other Canadian business or organization. Its employees, including regular and fluctuating staffs, number about 65,000 persons, of whom 53,000 are scattered throughout the country in various centres outside the seat of government. Its pay-roll exceeds $77,000,000 annually. Its annual revenue now aggregates over half a billion dollars and its total cash turnover amounts to over one and a half billion dollars. Unfortunately in these hard years its expenditures may exceed the first-named figure of revenue receipts by a comfortable—or rather uncomfortable—margin. In collecting these revenues and making these expenditures it receives and deposits some 675,000 bank drafts for a total of $700,000,000; issues three and a half to four million cheques each year, totalling around one and a half billion dollars; pays $45,000,000 in pensions direct to 95,000 individual pensioners; and redeems 4,300,000 interest coupons. On the average, each working day it sells 70,000 money orders and postal notes. It buys, refines, and sells in the world's markets practically all the new output of our gold mines and this, as well as other factors, necessitates important operations in foreign exchange. Its financing activities constitute the most important factor in the investment markets. During the last five years it has floated for new cash requirements and for refunding purposes, in Canada, London, and New York, securities aggregating over two and a quarter billion dollars—not including guaranteed Canadian National Railways obligations which would add another $235,000,000 to the total, or Dominion Treasury bills which are sold in the amount of 25 or 30 million dollars every fortnight to redeem maturing issues of a similar amount.

The first part of this paper is given over to a discussion of definitions, terminology, and objectives in income analysis. The second part deals with methods and sources of material in the study of cash income. The third part describes some results obtained to date in this work. “Agricultural income” is defined as the value of goods and services produced on farms which become available during a given period for consumption or investment, after providing for the maintenance and replacement of goods and services employed in production. Since the national income is the final test of the state of economic activity, it is essential that the national income data be as complete and accurate as possible. The completeness and accuracy of the national income estimate are dependent upon the completeness and accuracy of the estimates for the various industries. The income from agriculture should, therefore, be carefully appraised. The second main objective in measuring agricultural income is to enable a comparison of changes in the well-being of those engaged in farming with changes in the well-being of those engaged in other industries. These objectives constitute the important reasons for undertaking income analysis. The measurements of individual farm returns, such as labour income, labour earnings, or variations of gross or net income, are commonly used in studying the efficiency of management in the farm business. For this purpose they are very useful, but their field of service is definitely limited.

Structurally, one of the principal contrasts in Canadian banking between 1914 and 1938 is to be found in the accessibility of cash. In 1914 cash was available to a bank only in the same way that it was available to any other business concern which wished to avoid borrowing. A bank had access to cash only by disposal of its own assets and a change in the cash position of the system was almost wholly represented by a corresponding change in metallic reserves. Both an individual bank and the banking system had to be self-reliant as far as the maintenance of an adequate cash position was concerned, and for this purpose nest eggs were maintained at home or abroad. In 1938 cash is available to a bank, not only by the orthodox redistribution of its assets, but also by its access to the lending and rediscount facilities of the Bank of Canada. Moreover, cash may be forced on the banking system by definite action of the central bank, and changes in the cash reserves no longer correspond to changes in the gold holdings of the financial organization. In brief, the passing years have brought Canadian banks around to a point where an individual bank need no longer be wholly dependent upon its own resources for an adequate cash reserve and where the aggregate reserves of the system are not dependent upon the accessibility of metallic reserves.