These Days__: The Canadian Dollar
CANADA experienced a record population growth during the 1950s, resulting since 1955 in larger imports</br></br>Although imports exceeded exports, the Canadian dollar rose to the highest pre mium in history, accord ing to William Mc- tained inflow of capital from abroad, mostly long-term in character, has been more than sufficient to offset the trade deficit; under the Canadian policy of letting the exchange rate fluctuate freely, in response to demand and supply on the exchange market, this inflow has boosted the value of the Canadian dollar in the foreign-pxchange market.Û</br></br>In a word, the rise of the Canadian dollar was due to the large influx of American and other capital for investment in Canadian companies; the sale of Canadian securities in the New York market, including fraudulent Canadian mining securities. To show the dimensions of these investments, principally American, between October 1955 and March 1957, net direct investments amounted to Canadian S639 million; net new security issues amounted to Canadian $701 million; trade in outstanding securities amounted to Canadian $300 million; other capital flows amounted to Canadian $390 million. Also, Canada increased its official holdings of gold and U. S. dollars by Canadian $16 million.</br></br>Canada, which resembles the movement of European money into the United States subsequent to the Civil War, came from the United States.</br></br>. . After the Korean boom, there were significant tax reductions for fiscal years 1953-54 and 1955-56. The tax reductions for 1953-54 consisted mainly in eliminating a surchaiÛªge' on individual income taxes and a reduction in the corporate profits tax. Similar but small reductions characterized the rate changes for 1955-56, introduced when the extent and timing of the economic recovery was still unknown. For 1957-58, there were smaller cuts in indirect taxes, reducing aggregate tax revenues by about 1 per cent and still leaving an increased budget surplus.Û