Wednesday, March 17, 2010

Saskatchewan: Shrewd Socialism

Time Magazine
July 29, 1946

The sudden revaluation of the Canadian dollar caught most capitalistic speculators unawares. But not Saskatchewan socialists. Last week CCF's Provincial Treasurer Clarence M. Fines told how the province had cleaned up close to a quarter-million dollars on revaluation.

About a year ago, Treasurer Fines had to pay off a Saskatchewan bond issue of $2,250,000. As the issue had been floated in the U.S., he had to pay in U.S. dollars, then worth 10% more than Canadian dollars. After sending the check to Saskatchewan's New York banker, Fines decided that the Canadian dollar would ultimately be worth as much as that of the U.S.

So Treasurer Fines shrewdly ordered the banker not to cash the check, instead to borrow enough U.S. dollars on it to pay off the bonds. If the Canadian dollar stayed put, the gamble would cost only the interest on the New York loan.

Last week, Treasurer Fines totted up the profits on his gamble. Gross: $247,500 Net (less $16,875 interest due on the loan): $230,625.

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