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CANADA'S FINANCIAL CONDITION 109

 

Government, and particularly with a Minister of Finance exceptionally well acquainted with monetary problems, and were thus enabled to face with a good deal of equanimity the attacks made upon them by politicians and writers of little responsibility. A weaker government, particularly had there been an election pending, might have been tempted to make some concessions to the protesting elements, which were demanding all sorts of measures for the "relief " of business—a great increase in the circulating medium, the application of pressure to the banks to induce them to make more extensive loans, a government bank of re-discount, or even direct government assistance to borrowers who could not get support from the chartered banks, the prohibition of the lending of Canadian bank funds abroad, and many other nostrums. But the Government stood firm for sound and conservative finance; and with the advent (after a few months of war) of a temporary prosperity due to military expenditure and British and foreign munition orders, the noise of protest rapidly died down.

The chief source of embarrassment to Canada, in a financial sense, during the early days of the war, was the complete stoppage of the supply of British funds which had been rolling unceasingly into the country for many years. Some difficulty had already been felt, as noted above, during the year or eighteen months pre-ceding the war, when Canadian bonds, particularly the government-guaranteed bonds of new railways, of which a vast quantity had been authorized, became unsaleable at anything like the prices on which the promoters and legislators had calculated. But with the declaration of war the British Treasury put a veto on all offerings of new securities, whether of enterprises within the British Empire or without, with a few exceptions covered by special permits, and practically no British funds for capital investment have reached Canada since August 1914. This meant a tremendous dislocation of the industrial and financial fabric of Canada, which had been


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