Volume 2 - ElectricCanadian.com

CHAPTER VI.THE BANK DURING THE WAR.The latter half of the year 1914 will long be rememberedas a nightmare by Canadian bankers. The effect of theoutbreak of war on the operations of finance was instantaneousand deadly. The universal conflict, although long predicted,came with a suddenness that left the world temporarilystunned, and the delicate machinery of international bankingceased over-night to function. The cardinal difficulty lay inthe suspension of all communication by cable, so that, exceptin the case of New York, it was impossible to find out theconditions existing in the financial centres of the world, or tolearn what steps were being taken to re-establish financial order.Even London was cut off from all telegraphic communicationwith the continent of Europe on August 2. In Canada it wasknown that a moratorium had been proclaimed in England,but as to its terms, or what kinds of business were affected,even the Government and the banks in this country were forsome time quite in the dark.So far as the domestic situation was concerned all indicationsin the latter part of July pointed to the early advent ofa period of financial depression, and the country was illpreparedto meet a crisis of any kind. Canada had just come tothe end of an era of rapid expansion, accompanied by theinevitable recrudescence of speculation in real estate. Afterwardsthe war was blamed for many things which were inreality the logical outcome of this state of affairs. The outlookimmediately before Canada was thus by no means rosy fromthe standpoint of the banker, even had the European situationcontinued normal.A crisis was, however, maturing in Europe with whirlwindrapidity, which reduced all purely domestic apprehensions to