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108   DAYS OF PREPARATION

had only been reduced to $933,000,000, or $24,000,000 less than the maximum; but to a greater extent than usual these were not ordinary loans of commerce but advances to semi-governmental and railway enterprises, and the real reduction in the banking funds invested in current commerce and industry in Canada was much greater than appeared on the surface. In any case, the object had been attained; capital expenditure had been checked, trade and speculation had been reduced; the accumulation of excessive stocks of merchandise in the hands of manufacturers, wholesalers, and retailers had been discouraged, thus preventing the tying up of capital in an unrealizable form; and the country had been made to realize that expansion could not proceed indefinitely at the rate of the past five or six years. Many enterprises which were not of an immediately productive character, especially those of municipal and provincial governments, were set aside for the time being, upon the urgent representations of the banks that funds could not possibly be provided for them. Everybody had been induced to make an effort to round up the debts due to him—a task which had been greatly neglected during the years of easy credit,—and the statement that Canadians were living on what they owed to one another had come to be materially less true.

In all this the bankers, through their control of the machinery of credit, were the predominating factor. The Canadian banking system places great power in the hands of a few head-office chiefs, whose instructions must be carried out by thousands of branch managers all over the country; the system may have its defects, but it is exceptionally efficient when it comes to dealing with general conditions, or preparing for an emergency which can be foreseen by the experts but is not likely to be apprehended by the man who manages the branch in Mariposa, Ont., or Poplar Plains, Sask. In their readjustment work the great bankers were strongly supported by a close understanding with the Dominion


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