Volume 2 - ElectricCanadian.com

314 HISTORY OF THE BANKand disturb the operations of the bank for some months afterthe war broke out was its heavyinterest in the sea-borneexports of Canada. To grasp one of the acute problemsthat confronted the managers of a large number of its branchesat this time, it must be remembered that not for several monthsdid the British Navy gain that mastery of the seas which alonemade commercial intercourse with other parts of the worldpossible. Throughout the last five months of 1914, thepossibility of a catastrophe from German naval activity wasby no means remote, and was ever present in the minds ofCanadian bankers, on whom the exporting classes necessarilydepended for financial support.A series of circulars issued by The Canadian Bank ofCommerce to its branch managers during the ten days afterthe declaration of war indicates the caution with which it wasnecessary to proceed at this time. A circular of August 4outlined the decisions reached by the Minister of Finance atthe conference with Canadian bankers at Ottawa on thepreceding day. These provided, first, for the issuance ofDominion notes, in case of need, against securities depositedby the banks and approved by the Minister of Finance.In order to conserve the Canadian gold supply against demandsfrom foreign sources, the banks were authorized to makepayments in bank-notes until further notice, instead of ingold or Dominion notes. This was the course adopted inGreat Britain and in most other countries. Settlements at theclearing-houses, however, continued to be made in Dominionnotes. A further temporary measure permitted the charteredbanks to issue excess note circulation to an amountnot exceeding fifteen per cent, of paid-up capital and rest orreserve fund. It was also announced that the Governmentwas prepared to give all possible assistance to prevent anyavoidable unsettling of business. The efforts of the Canadianbankers at the hurried conference of August 3 had been directedtowards obtaining an ample supply of readily available currencywithout impairing the existing resources of the banks, and it