In a period of sudden and fairly rapid change it sometimes requires a conscious effort to retain proportion and perspective. I have therefore resisted the obvious temptation to call my paper “New Resources and Their Effect on the Prairie Economy.” Such a title might suggest fundamental and far-reaching changes that could not be verified by an examination of current economic realities. Even more important perhaps it would tend to obscure great differences in the discovery and exploitation of new resources in the three Prairie Provinces, differences which are sharply reflected in varying rates of economic diversification and growth. Finally, it is important to perspective that the continuing contributions of older resources be accorded appropriate recognition. It would seem that proportion would be best ensured by starting with an evaluation of the older resources, moving on to an appraisal of the new, and concluding with an attempt to interpret present and possible future trends for the prairie economy as a whole. In such an approach, and at the risk of wearying my listeners, much of the analysis must be essentially quantitative in its nature.

This paper is to be considered as a prelude to the trip which the writer plans to make to the Labrador in July and August of this year (1953), with the help of the Fisheries Board and other friends. The trip is a continuation of one made around the coast of Newfoundland in 1952, including visits to Corner Brook, Grand Falls, and Buchans.

Few today would deny the necessity for subordinate legislation. The true business of Parliament remains the debate over the major principles of policy, but Parliament has neither the technical skill nor the time to process the mass of detailed regulation. Nevertheless, even with a sound division of function between Parliament and the departmental sources of delegated legislation, a serious problem remains. The initiative in the framing of public policy has passed to the bureaucracy, and machinery is required to ensure that bureaucratic legislation may receive the same debate, criticism, and review as ordinary legislation. The objective of administrative reform has been to safeguard the public against bureaucratic tyranny by three devices: (a) systematic publication of subordinate legislation; (b) opportunity for parliamentary review; and (c) continuance of judicial review of the scope of delegated authority.

In the United Kingdom, where these matters are more highly developed than under any other parliamentary system, the first two of these requirements are met by the Statutory Instruments Act, 1946, by various Statutory Instruments Regulations made thereunder, by the activity of the House of Commons Select Committee on Statutory Instruments, and through various techniques of parliamentary review.

Everyone expects the statistician to be the foe of easy generalization and glib phrases. Hardheadedness and a sceptical approach are occupational characteristics of those who spend their days measuring the world objectively. In talking to you about statistics of the balance of payments I am therefore going to stay on firm ground by discussing several recent developments in Canada's balance of payments and in the statistical tools which have been devised for observing them.

Balance of payments developments have close interrelationships with the internal economy, which, I feel, have never been satisfactorily elucidated. For those interested in studying them further there are two new statistical sources which will facilitate closer analysis. These are new reports soon to be published by the Dominion Bureau of Statistics showing quarterly statements of the national accounts and quarterly statements of the balance of payments in the post-war period. Quarterly statistics of this kind are comparatively new tools and consequently must be used with care, particularly when relationships between internal and external factors are being explored. A thorough knowledge of concepts, definitions, and sources is indispensable before even the obvious steps in comparison may be taken with confidence. Knowledge must also be acquired of the seasonal behaviour of the various series entering into these statistics, in order to distinguish the special and non-recurring from the seasonal. Frequent data on the monetary background published by the Bank of Canada also throw new light on related transactions.

In recent years Keynesian theory has been extended to the analysis of economic growth by the introduction of a relation between investment and productive capacity to supplement the Keynesian relation between investment and effective demand. Combination of the two relations permits the specification of an equilibrium rate of growth, defined as that rate of growth which maintains full employment of capacity. So far, however, except for some rather brief compients by Mr. Harrod, the development of this model has been largely confined to a closed economy. It is the purpose of this article to extend the model to a two-country international economy, and to deduce certain conclusions about equilibrium growth in such an economy. The analysis proceeds from consideration of an open economy, the rate of expansion of demand for whose exports is given, to consideration of a two-country closed system; and from the assumption that balance-of-payments equilibrium is preserved by international lending and borrowing (Part I) to the assumption that it is preserved by exchange rate adjustment (Part II). No attempt is made to deal with the stability of growth equilibrium and the results of departures from it; because of this, and because of the extremely simple assumptions on which the analysis is conducted, the conclusions derived are of limited practical application. Nevertheless, it is hoped that they may have some usefulness as a logical frame of reference for discussion of international growth problems.