* * * • CANADA STILL PROSPEROUS' securities
have is odd but an unpleasant fact that Canadian sec_urities have declined even more precipitately than either Wall Street or London stocks from the peak levels of the late spring. Part of the trouble has been the " thinness " of the markets in Montreal and Toronto, by which I mean the lack of any cushion of investment resistance to speculative unloading. There is no doubt that Canadian industrials appealed 'very strongly to the more speculative type of buyer both in London and the United States early this year. The slump in the home market and Wall Street .was, therefore, bound to bring heavy sales of Canadian stocks. On a rough survey of leading common shares in Canada, I estimate that the average decline from the year's highest prices has not been less than 6o per cent., and in most cases quotations are now close to the year's lows.
The mere fact that prices have fallen sharply is never a sufficient reason in itself why shares should be bought, but a decline on this scale does seem excessive in relation to Canada's trade. Taking Canadian industry as a whole, production and employment continue around to per cent. above last year ; exports up to the end of September were 19 per cent. up and imports 3o per cent. Mineral production has risen 15 per cent. and construction contracts awarded for the first nine months show an improvement of 4o per cent.. While it is true that in the long run a depressed United States would involve Canada in a recession, these facts are nevertheless impressive in relation to the current level of stock market quotations. As Canadian common stocks are lower on an earnings-yield basis than comparable stocks on Wall Street, it seems to me that they will afford more scope for recovery whenever tangible evidence appears that American business is getting back intc its stride.
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