There'll Always Be a Canada

After six withering years of superexpensive war, Britain could no longer, as before 1939, buy some $400 million worth of goods from Canada every year. Canada, a country that lives by exporting, stood to lose her best customer. Indirectly, Britain's finances posed a worrisome problem to the U.S. too: if Canadians could not sell to Britain, Canada would not be able to buy over $400 million worth of goods annually from the U.S., as she had done before the war. What it all added up to was this: unless Britain got money somewhere, all three nations would suffer.

Last week, while the U.S. Congress higglehaggled over a proposed $3.75 billion loan to the British (see INTERNATIONAL), the Dominion agreed to lend Britain a billion and a quarter dollars as soon as the Parliaments of both countries ratified the deal. Terms: repayment in 50 years, at 2% interest, beginning in 1951. In addition, Canada canceled a whopping British debt: $425,000,000 incurred when Canada housed and trained British flyers during the war under the Commonwealth Air Training Plan. Moreover, Canada agreed to settle, for $150,000,000, all big & little "known & unknown" claims that resulted from an intermeshed war effort.

The loan that Canada's 12,000,000 people were now granting to the mother country was bigger, in terms of lender's capacity, than the proposed U.S. loan. Furthermore, it would saddle the Canadian taxpayer with a sizable new burden: he would have to pay all the interest himself, some $30,000,000 a year, until 1951; after that he would have to pay an estimated $12,000,000 a year interest (because Canada would borrow the money from banks at about 3%, lend it to Britain at 2%).

But it was by no means a one-way deal. Said Britain's Sir Wilfrid Griffin Eady, who spent a month in Ottawa negotiating the loan: almost all the money will be spent in Canada, principally on foods and manufactured goods. Knowing that, practically all Canadians approved the loan; some thought its terms could even have been more generous.

In Montreal, the Daily Star commented: "This loan [means] work and wages for Canadian workers and profits for our manufacturers." Le Canada added: "It pays to be generous!"

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