Volume 2 - ElectricCanadian.com

THE BANK DURING THE WAR 341volume. The era of rising prices, high wages, and productionon a large and organized scale, in which capital was thenecessary factor, had definitely set in. It may rightly besaid that Canada for the first time since Confederation beganto realize her full powers. For decades she had been borrowingfrom the investors of the Motherland, but in 1916 the positionbegan to be reversed. The enormous war expenditures ofGreat Britain had rendered it impossible for that country tocontinue as a lending nation, or to pay cash for her purchasesabroad. The great contracts which helped to keep the wheelsof industry and commerce moving in Canada were obtainedas a result of credits extended to the Government of GreatBritain. It was only natural that this radical change in therelations between the two countries should be marked bycorresponding changes in both the commercial and the financialaffairs of Canada. The change in financial relationship wasfacilitated by the comparative ease of the money-market inthis country. The large scale of the war operations called fora corresponding scale of financial operations, and relativelyvery large sums were advanced by The Canadian Bank ofCommerce to both Dominion and Imperial Governmentsfor war purposes. These advances took the form ofpurchases of treasury bills, and in the case of the DominionGovernment were usually made in anticipation of the issue ofthe various Canadian War Loans, from the proceeds of whichthey were retired from time to time. It was the just boastof the Government that the subscriptions to the variousCanadian War Loans came from the pockets of the peoplethemselves, and not directly out of the coffers of the banks,thus leaving the resources of the latter available for thepurposes of agriculture and commerce. Of course, the depositsof the banks were depleted for the time being, but it wassurprising to note in how short a time the money came backto them again.The money advanced to the Imperial Government in 1916was used for the purpose of buying Canadian wheat. With