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FINANCIAL MEASURES   127

Another event at the outbreak of the war, which, while not caused by any Government order, was undoubtedly the result of a direct understanding between the stock exchange authorities, the bankers and the Minister of Finance, was the closing on August 1st, 1914, of all the stock exchanges of the country. Investment business, so far as the public offering and purchase of securities was concerned, was petrified for a period of six months, while for some time thereafter no trans-actions through a stock exchange broker were permitted except above a certain prescribed minimum price for each listed security. While this suspension of business was ordered by the authorities of the stock exchanges, it was the banks, with their loans of some sixty-eight millions of dollars advanced "on call" in Canada, who really controlled the situation. Had they insisted upon recalling any of these loans, there would have been nothing for it but to allow the holders to sell their securities, and in the resultant panic the banks would undoubtedly have been compelled to take over a large proportion of the stocks which they held as security. Rather than do this, they continued their loans indefinitely, being aided in doing so by the special powers conferred upon them by the Minister of Finance, which relieved them from the necessity of converting such assets into cash, and it is a striking proof of the ability of Canadian industrial and other corporations to withstand the utmost shocks of a world war, that within a few months of the reopening of the exchanges practically every one of the listed stocks was selling freely at prices not far below, and usually above, those established in the hasty marking-down process which took place between the first signs of the world-war and the closing of the ex-changes. Not a single stock exchange insolvency occurred which could in any sense be attributed to the war, and it is safe to say that the banks did not lose a penny as the result of their policy of forebearance and of confidence in the resilient and recuperative powers of Canada.


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