CANADA'S FINANCIAL CONDITION 107
which had been commenced in the confident expectation of securing capital from Great Britain were finding them-selves in an embarrassing position. A boom in land values of city properties was showing signs of collapse. Economists were worrying because of the enormous excess of imports over exports, largely the result of the amount of new foreign capital in process of being spent in the country.
In July, 1913, the proportion of liquid reserves to liabilities in the Canadian chartered banks sank below twenty-one per cent., a level which it had not reached since the equally expansive days of 1907. The current loans of the banks, loans advanced for a longer period than thirty days, amounted in September of that year (when the crop movement was added to the ordinary requirements of trade) to $957,000,000.1 But the forces of retrenchment were even then at work. The instant that crop-moving was completed, the reserve ratio rose above twenty-four per cent., and by February of the following year it was twenty-six per cent., while the volume of loans was slowly but steadily cut down. This work was carried on in the face of violent criticism from would-be borrowers, speculators, advocates of a larger paper currency, and easy-money theorists generally, so that for nearly two years the bankers were the most unpopular class in the community, and were blamed for every discomfort resulting from the collapse of the land boom, the lack of new foreign capital in ever-increasing amount, the curtailment of railway construction, the crop shortages, and many other things of which they were equally guiltless. So difficult was the process of loan reduction that even by July 31, 1914, on the eve of the entry of the British Empire into the war, the total of current loans of the Canadian banks
1Financial Times analysis of Monthly Return of Canadian Chartered Banks. This figure includes all classes of loans made by the chartered banks (current loans and discounts in and out of Canada, loans to governments and municipalities, and overdue loans) with the exception of call and short (less than thirty days) loans in and out of Canada.