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Lethbridge Herald, The (Newspaper) - June 22, 1974, Lethbridge, Alberta Bank cards build business TORONTO (CP) Master Charge, the latest-arriving bank credit card in Canada, has challenged the older Chargex system and is estab- lishing itself in an expanding share of the business. How much more the bank card business can grow is open to question but Master Charge has managed in less than a year to exert signifi- cant competitive pressure on Chargex. The new card was in- troduced last year by the Montreal-based Bank of Mon- treal and Provincial Bank of Canada. It arrived on the scene after the Bank of Mon- treal decided the entry fee for Chargex was prohibitive Chargex, six years old, was established by the Canadian Imperial Bank of Commerce and Toronto-Dominion Bank, both of Toronto, and the Royal Bank of Canada and Banque Canadienne Nationale, both of Montreal. The Bank of Nova Scotia, based in Halifax, join- ed in March, 1973 By April 1 this year Master Charge had signed about 000 retail outlets in Canada. This compared with slightly more than for Char- gex. However, Chargex is far ahead in number of card hold- ers with more than four mil- lion compared with about 000 for Master Card, which first became available to customers late last fall. HAPPY WITH PROGRESS "We've done very said R. H. Call, manager of marketing and sales for the Master Charge division of the Bank of Montreal. By Oct. 31, the bank's fiscal year-end he predicted Master Charge might be in the hands of more than one million holders Chargex is welcoming the competition "We hope the entry of another charge card will create market said J.P. Jones, marketing manager for Toronto Domi- nion Bank. He said only about 25 to 33 per cent of those finan- cially eligible actually have a Chargex card. Last year, the Chargex plan had total sales volume of million, up 84 per cent over 1972 The 1972 increase was 50 per cent over 1971 Both Mr. Jones and Mr. Call believe changing consumer at- titudes, rather than inflation, are attracting people to charge cards. They like to think of the cards as a "pay- ment system" rather than bank credit. "Chargex is actually not in- tended for use exclusively as a credit card but rather as a method of said Mr. Jones. Bank card purchases at million are still only a small portion of total retail sales that reached billion in 1973. Chargex and Master Charge operate essentially the same way. Chargex is linked with Bank Amencard on a fran- chise basis while Master Charge is administered by the Interbank Card Association, a non-profit group of banks formed to provide and ex- change credit cards around the world. Participating banks in both systems make money on both the card holder and mer- chant The holder is charged an annual rate of 18 per cent for any balance outstanding 25 days after billing. Merchant payments range from two to 5.5 per cent on sales for Master Charge and two to 5.75 per cent for Chargex, de- pending on volume. Experience in the United States showed that about 48 per cent of credit card hold- ers carry two cards. The Interbank group has member banks in Europe, Asia and North and South America. Paper firms hike price Saturday, Junt 22, 1974 THE LETHBRIDGE HERALD-29 Office furniture manufacturing thrives in Alberta All aboard for Alaska substations are loaded aboard a barge is Seattle. Montreal engineers win Alaska power contract VANCOUVER (CP) Mac- millan Bloedel, Canadian Cellulose, and Canadian Forest Products Ltd. an- nounced Thursday price increases effective July 1 in the price of bleached kraft pulp the top grade of pulp. Macmillan Bloedell will raise its price to from a ton, U.S. funds, or to from a ton; in Cana- dian funds. Canadian Cellulose's current price is also a ton, U.S. funds. Most producers raised their prices by a ton on Jan. 1 and another a ton on April 1 this year following increases totalling a ton in 1973. MONTREAL (CP) A Montreal engineering firm has won two awards for an electricity system that is powering the "oil rush" on the north slope of Alaska. The awards, jointly spon- sored by the Association of Consulting Engineers of Canada and Canadian Con- sulting Engineer magazine, went to the Shawinigan Porridge power fires generator DUNEDIN. N.Z. (CP) A rolled oats company here is using porridge power to beat the country's electricity- crisis. The company, which manu- factures a big percentage of the rolled oats eaten in New Zealand as porridge, uses the husks from the oats to fire a ELECTION OF OFFICERS steampowered generator for its electricity. At times the generator pro- duces more power than the company needs and this is fed into the national grid to help ease the country's power shortage. The company needs 140 kilo- watts each hour of its working day to run milling and rolling machines. Thousands of tons of oats go through the machines to make products ranging from porridge to baby foods. About a quarter of the oats are dis- carded as husks. Each month this adds up to several hundred tons of husks. Company engineers devised the scheme in which the dis- carded husks are carried by pipe to a hopper in the boiler room and then fed into the burner where the husks' high oil content gives off an intense flame. The boiler thus not only pro- vides steam for the generator but also heats the ovens in which Uie oats are roasted. It is estimated that the sys- tem provides the company with about 90 per cent of its electricity solves the waste disposal problem of Uie husks. H. H. Smith Ltd. Broker Home Office Phone Engineering Co. Ltd. for an assignment at the Prudhoe Bay oil field of B. P. Alaska Inc The kilowatt system, big enough to light a city of is located 250 miles within the Arctic Circle. Shawinigan said it is "by far the largest ever attempted so far north, and is building it. the engineers had to solve problems never before en- countered." Designed to operate in the most hostile of environments, the project consists of a gas turbine-operated power plant, a 69.000 volt, 36-mile tran- smission system and eight centrally-controlled sub- stations. Each group of wells in the BP Alaska fields will feed oil Present market opportunity good to one of six gathering centres, at which gas mixed with the oil is separated From each centre, the oil will be collected at a main pumping station where it will be sent down the Alyeska Pipeline to Valdez, Alaska, for shipment. The gas will be fed to a cen- tral compressor station, from which it will initially be re-in- jected into the oil field and eventually sent south by pipe- line. The awards were made in the electrical category for the power system as a whole and .in the civil category for the design of the substations. EDMONTON (CP) This city is fast becoming the key area in Western Canada for of- fice furniture manufacture, and executives say the climate for the business is changing. The major outlets are Supe- rior Steel Desk (Mfg.) Ltd., formed in 1967 and the leader in this field, and Wescab Furniture Mfg. Co. Ltd., an old Edmonton firm which shifted into office furniture about six months ago. It was previously known as Western School Furniture. Wescab has remained in the school-furniture business and also manufactures aluminum doors and windows for the housing trade. Although both firms manufacture the same product they operate differently and approach their markets from different view- points. Ed Cumiskey, general man- ager of Superior Steel and one of three founders, likes the Al- berta economy because of its healthy business climate and says Edmonton is a better location than Calgary because of greater opportunities for subcontracting He says that in the past, firms in the West were forced to do everything themselves because there were no small, specialized plants like ihose to which central Canadian furni- ture manufacturers farm out much of their work. Western firms were forced to put their entire operation primarily un- der one 'roof. EYE ON FUTURE But this situation is changing, with Edmonton able now to support small, specialized shops, and Wescab president Terry Sulyma says that with more farming-out his company can devote more time to longer-range developments, design and marketing. Both major firms, which compete from the Lakehead west to Vancouver Island and north to the Arctic, are look- ing at the U.S. Pacific Northwest as a potential market Despite a 17-per-cent import duty on office fur- niture, the Seattle-Portland and California markets look attractive for the future Wescab is the top manufac- turer of school furniture in its market area but finds this market contracting and so has started to concentrate more on office furniture. Olympic committee formed MONTREAL (CP) The organizing committee for the 1976 Olympics has appointed a threeman committee of volunteers to help judge applications for licensing and merchandising contracts in- volving use of the Olympic symbol "The reason for the eval- uation team is that when you are dealing with licensees there is always the possibility of complaints about favoritism." said Gerry Snyder, revenue vice- president for the organizing committee. "We chose three men who are impartial to look at everything on a neutral basis." he said in an interview Monday. The team includes: P. Ray- mond Belisle. director of the Montreal municipal supply de- partment: Jacques Dupuis. executive vice-president of the Montreal Stock Exchange, and James McCaig. regional assistant general manager of the Bank of Nova Scotia. The committee's licensing program will sell rights to use the Olympic symbol on such items as ashtrays, jewellry. clothing and souvenirs By WENDY ROSEN The CANADIAN PRESS The chance for rewards in the stock market has never been greater than now, says Cochran Murray Ltd. of To- ronto. The investment firm says in a market letter that fears of a recession or depression are misguided. If a slowdown oc- curs, it will be because of a shortage of supplies and not because of a reduction in de- mand. The cheapest, safest, most liquid investment most people could get involved in is listed common stock, it suggests. The Toronto Stock Ex- change's industrial index av- erage growth since 1966 has been about 45 per cent. This compares to inflation of 35 per cent and a gain in gross national product of 40 per cent during the same period. The industrial index meas- ures stock prices, which in turn measures worth. A stock's worth reflects earn- ings per share and dividend yield. Cochran Murray says these factors have lagged and a slow lag means better value. Examining earnings yields is a more revealing method of evaluating worth than earn- ings and earnings multiples, the company says. If, for in- stance, a stock is selling at 20 times earnings, the earnings yield is five per cent; at 10 times, the yield is 10 per cent. In 1966. the earnings yield at the market low was 7.5 per cent. At the same time, Coch- ran Murray says, long-term Government of Canada bonds yielded about six per cent. At the end of 1973. the earnings yield of stock comprising the Toronto exchange industrial index was 7.9 per cent while long Canadas were 7.75 per cent. Today, the index has an ear- nings yield of 9.95 per cent and long Canadas 8.81 per cent. But earnings yields, Coch- ran Murray says, mean noth- ing unless translated into divi- dends. The company believes dividends will rise in an effort by corporate management to lure investors back into equities. Midland Doherty Ltd. agrees that there are some outstanding opportunities available in high-yielding equities but the company stresses bonds are good buys. It says investors should not be dissuaded from purchasing equity securities because of lower pre-tax yields offered on them in comparison to fixed-income securities. Cana- dian investors in 'all tax brackets, the company says, can receive considerable tax advantages from dividends not available on interest in- come. This is because of the dividend tax credit applicable to that form of income but not to interest payments. The net after-tax income from dividends paid by Cana- dian corporations, Midland says, can be equivalent to a bond paying a significantly higher coupon rate. Here is the percentage bond yield required to return the same after-tax income based on 1973 federal and provincial income taxes for Ontario resi- dents- Dividends Bonds 5 6.8 6 8.2 7 9.5 8 10.9 9 12.2 The company says results may vary slightly in other provinces. Rail 4best way' to move people New computer Robert Horwood, president of Compute) Sysiems Ltd. Ottawa, explains the workings of the company's new megabyte IBM system '370 model 168 computer with staff Pat CoJwiJe and Karl Zrtter. The company now has the computer capacity to handle more than S13-mi1lion of business annually compared with its previous 812-miHion of business. OTTAWA (CP) Rail is probably the best way to move people over short inter-city distances such as the Toronto- Montreal run, says Malcolm Armstrong, chairman of the federal Transport Develop- ment Agency. Mr. Armstrong said this week in a telephone interview from Montreal that the economics of transport must be investigated to find the most efficient way of moving passengers. The agency is a research and development arm of the federal transport department and has its headquarters in Montreal. "When you come to shorter distances of 300 to 350 miles, rail is probably the correct way of moving people." he said. There now is a strong de- mand for air service on short inter-city routes because rail service is poor by comparison, with trains infrequent, slow and sometimes uncomfor- table. Mr. Armstrong said air pas- sengers do not pay the full price of their journeys on short trips. Some airlines say that ticket revenue does not pay for operating costs on short runs. In addition, there are the costs of operating transport department airports, only par- tially recovered from airlines. An over-all look at transport may well show that economic- ally it would be wiser if rail handled the bulk of passenger traffic on short routes, he said The transport agency- had been created to study such issues Outlining possible develop- ments. Mr Armstrong pic- tured a series of short, high- speed rail services linking cities across Canada. Air ser- vice would remain the main long-distance transport system, but people would stall be able Jo get across the country by rail. Air carriers would compete with trains on short distances hut the service on these runs would probably decline he-cause airlines could no longer afford to operate as grandly on short routes For a larger share of inter- city passenger traffic, rail service must be improved, he said. The CNR Turbo and the LRC (light, rapid, comfor- table) train under develop- ment by a consortium including Alcan and MLW- Worthington have good poten- tial, he said. The LRC will be able to travel up to 125 miles an hour, aided by a suspension system that enables it to take curves at faster speeds. There would probably have to be another development in conventional trains before planners could consider introducing such trains as magnetic levitation vehicles in the late 1980s. With trains running rapidly and leaving once every hour, passengers could turn to rail in large numbers. Schwartz Agencies (1972) Ltd. ROYCLELAND M.L.S. Sales Rep. May Roy wo" the Salesman-of-the- Month award m May lor the second fomh m a -ow for the Lethbncae Real Estate Board The is here aid mortgage monev is hot and ou- Action lean to solve tie problems and continue as the too MLS Sales volume Agency in the area To obtain results call the Action learn at 328-3331 3000 SQUARE FEET FOR RENT Downtown Commercial Space Phone 328-1520 or (1-3 Year Term) GUARANTEED SAVINGS CERTIFICATES Interest payable monthly, quarterly, semi-annually or compounded to maturity. Member Canada 'nsu-a- re C- can purchase Olympic coins FARMERS MERCHANTS TRUST Phone 328-5548 309 7tfi Street S., Icthbrldge ;