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IN ONE respect, and perhaps in one respect alone, the declarations of war at the end of July and the beginning of August, 1914, found Canada reason-ably well prepared. The financial condition of the community, so far as it could be adjusted by the regulation of credit by the chartered banks, was adjusted for a time of crisis; and the work was so thoroughly done that when the crisis came the disturbance to all kinds of business activity was less than might have been expected. The service which was performed for Canada, and for the Empire, by the great bankers of the Dominion during 1913 and 1914 was not properly appreciated at the time, but in the clear light of history it will stand out as a remarkable instance of insight and courage.

In 1912 credit in Canada was greatly over-extended. The country was at the climax of a period of extraordinary expansion. Population and capital had been pouring in for more than a decade in an ever-increasing flood, yet neither population nor capital seemed adequate for the host of new enterprises which were being undertaken on every hand. Expansion had been so rapid in every species of trade and industry that it was impossible to secure new fixed capital sufficient to carry on the enlarged business, and merchants and manufacturers alike were leaning heavily upon the banks for the financing of transactions which they should have looked after them-selves. Intimations of danger were already perceptible, and during 1913 these intimations became much more apparent. Canadian securities, which had been snapped up with avidity by British investors for years past, though still readily taken, were more closely scrutinized, and several enterprises, railroad, municipal, and industrial,


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