CHAPTER 19 CANADA As was remarked in a preceding chapter, Canada has a monetary system of the sensitive type, and may therefore be expected to show in its international trade a quick response to changing conditions. It happens that during the first decade of the present century the conditions affecting its trade did change greatly and conspicuously. The events of that decade have a quite unusual interest for the theory and practice of international trade. The interest does not arise from the scale of the operations, or from anything unique in their general character. Canada was (and remains) a country of moderate size, with a population well under 10 millions during the period under consideration (7.2 millions in 1911). Her people then went thru a stage of rapid economic growth, due to the opening of the far Northwest and its unexpected and extraordinary development. There was a boom quite of the familiar type — rapid settlement of the new country, extravagant speculation in land and in securities, great extension of railways and allied enterprises. Feverish bursts of this kind are familiar in the history of new countries, and particularly familiar in the closely similar experiences of the United States. In its more overt aspects, the episode presents little that is new to the econo- mist. But it has a special pertinence for the present inquiry because of one circumstance: a single influence — namely, bor- rowing on a great scale — was affecting the international trade of the country, and the modifications caused by this influence can be traced with quite unusual accuracy. I state the case somewhat too strongly in saying that the one influence alone was in opera~ tion; there were others, beside that of the great borrowings; but this last preponderated so enormously that the others could have 299