Bullish Billions

When Admiral Corp. of Chicago as signed its go-getting young (29) purchas ing agent Vincent Barreca to establish a Canadian radio-manufacturing subsidiary in 1946, office space was hard to find.

Barreca moved into one end of a dusty Toronto warehouse, scrounged an orange crate to sit on and went to work with a skimpy capital allotment of $50,000.

Within a month after he got into production, demand for his radio sets was so heavy that he converted the shop wash room into working space. In March 1949 Barreca began turning out television sets, despite the fact that Canada has no TV stations. He gambled shrewdly that he could sell to Canadians within range of transmitters in U.S. border cities such as Detroit and Buffalo.

Success Story. By last week, when Bar reca formally opened a new $500,000 plant at Port Credit, Ont., Canadian Admiral had sold more than 16,000 TV sets and was the nation's biggest television manu- facturer. For 1950, its sales totaled $5,000,000 (up 92% from 1949), net prof its $308,000 (up 123%). The Port Credit plant, a shiny brick-and-glass structure on the mud flats, is turning out sets at a rate of 25,000 a year, and Barreca is ready to hike that to 50,000 on short notice. The first Canadian TV station goes on the air at Toronto next fall.

Admiral's success story is no isolated wonder. Since the end of World War II, specialized U.S. investments in Canada have become commonplace--wholly aside from such widely known developments as Alberta oil, Labrador iron and Quebec titanium. Last week, for example, Canadian Steel Improvement Ltd., owned by a Cleveland company, announced plans to produce jet engine compressor blades for the R.C.A.F. in a $2,000,000 plant near Toronto.

Industrial Frontier. In 1950 alone, U.S. companies invested $167 million in Canadian subsidiaries; some 30 new subsidiaries were established, bringing the total to more than 2,200. In addition, U.S. citizens invested $363 million in Canadian-owned enterprises last year. Altogether, U.S. interests in Canada today come to nearly $7 billion--33% of all U.S. foreign investments. Americans directly control at least 25% of Canadian manufacturing industry. And they own major chunks of most of the Dominion's greatest industrial mammoths. Since 1944 for example, U.S. ownership of voting stock in the Canadian Pacific Railway has climbed from 15.4% to 34-i%.

What is the explanation? For one thing, the Canadian government eagerly encourages U.S. capital. Provincial governments vie with each other in offering attractive tax concessions. Canada's labor force is first-rate, its wage scales are lower, its raw materials often cheaper, its markets growing. Most important, however, U.S. business has recognized that Canada is still a great industrial frontier. Says General Motors President Charles E. Wilson (whose company is currently spending $30 million to expand its Canadian operations): "This is a vast storehouse of mineral and agricultural wealth waiting for further development . . . G.M. is bullish on Canada."

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