Volume 2 - ElectricCanadian.com

1901 TO 1914 237instructed that the highest prevailing rate of interest was tobe charged on all such advances, and they were warned ofthe certainty of extreme stringency in the following autumn.In July the managers were instructed that under no circumstanceswere they to permit advances to run beyond theauthorized limits without reference to head office. In Augustefforts were made to advance the minimum rate of discounton accounts of the highest grade to six per cent., a coursealready adopted by at least one important competitor. Theattention of managers was further drawn to the fact that thecontinued expansion of business in Canada and the abnormalincrease in the unfavourable balance of foreign trade indicatedthat it was clearly time for a slowing down of business activityin this country.The autumn of 1907 was a very anxious time for bankerseverywhere. Towards the end of October the branches wereadvised that there had been no improvement in monetaryconditions in Canada. The old arguments as to the necessityof keeping loans within certain limits were recapitulated, andthis warning was followed by another circular of informationas to the monetary troubles which then prevailedYork and other American financial centres. In view of thesituation the branches were instructed to send all Americancurrency direct to the New York agents, because the latter hadin Newdifficulty, under the new clearing-house regulations, in procuringcurrency for remittances to outside points. They werealso instructed to cross drafts on San Francisco, payablethrough the clearing-house of that city, in order that currencymight not be demanded for them over the counter. OnNovember 5, advices were sent out that currency was at apremium of from two to three per cent, in New York, and onthis date the instructions which had been issued with regard todrafts on San Francisco were made applicable also to those onSeattle. On November 7, it became necessary to instruct thebranches to accept, for collection only, cheques and drafts onpoints in the United States where the bank had no direct