Volume 2 - ElectricCanadian.com

318 HISTORY OF THE BANKirrespective of distance, but varying between one and fiveguineas per cent, according to the probability of a Germannaval attack. On August 12, for instance, the rate was fourand a hah* guineas per cent. This arrangement at that timeapplied only to vessels of a certain standard flying the Britishflag; it came into force on August 5 and did not cover priorsailings. 1 Branches in the United States were instructed toarrange war risk insurance throughreliable brokers in thatcountry.Another thing which tended to relieve the situation wasa cable message from the London manager that he would beable to take care of all outstanding branch drafts on Continentalbanks. By August 14 conditions appeared to besettling down somewhat, and the branches were advisedthatthey might discontinue advising the head office of the issueof drafts in excess of $10,000, a rule which had been laid downa fortnight previously when the financial outlook was verydark.In many of the instructions given to the branches at thisperiod the head office was guided by information received bycable from the London office, on which fell in a large degreethe strain of dealing with the emergency created by the crisis.All sorts of new problems were hourly arising, especially inconnection with the British moratorium and European business.The proclamations prohibiting trading with the enemypresented immediate difficulties for all banks doing businesswith the Continent. During the first week of the war theLondon office was, for this reason, obliged to refuse paymentlThe step thus taken bythe British Government was vital to the interestsof many others besides the British consumer, and ranks with the financial plansdescribed a few pages further on as evidence of the bold and far-seeing measuresadopted by the clear-headed leaders of Great Britain at the outset of the war. Mr.J. W, Flavelle (now Sir Joseph Flavelle, Bart.), as one of those most heavily interestedat the time in the movement of Canadian food-products to the Motherland, was oneof the first Canadians to obtain authentic information as to the marine insuranceplan, and a memorandum drawn up by him on the subject was of great service toCanadian bankers. The text is reprinted in Appendix III, as a record of how agreat problem was solved.