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INTERNATIONAL TRADE
The total sums borrowed between 1900 and 1913 came to 2500
millions of dollars. By far the largest part came from Great Brit-
ain — not less than 1750 millions. The United States contrib-
uted 630 millions. An almost negligible remainder was lent by
Continental Europe. So markedly preponderant was the share of
the mother country that the case may be analyzed for most pur-
poses as if this were the only source, tho the extent and the
manner of American participation present some problems of their
own, to be considered in due time.
It is in accord with the previsions of theory that these great
borrowings led to complete reversal of the relation between com-
modity imports and exports. Instead of the previous excess of
exports, Canada came to have a heavy excess of imports. The
total excess of commodity imports during the 13 years was in round
numbers 1.3 billions. The excess of imports, it will be seen, was
less than the total of borrowings; a difference easily explained
in view of the various other payments from Canada to Great
Britain and other countries which were called for in the course of
the operations — for accumulating interest on the successive loans,
freight both on imports and on exports, and minor items such
as tourist expenses and banking and insurance commissions. The
details of the balance of payments we need not stop to analyze.
It is enough to note the salient change brought about by the
import of capital — a marked excess of commodity imports over
exports. That this change should ensue is not only in accord with
theory, but is confirmed, in the large, by the well-known experi-
ences of all borrowing and lending countries. So far there is
nothing noteworthy ; it is familiar experience that loans and repay-
ments of loans, interest remittances and the like, are in practise
effected mainly thru the movement of commodity imports and
exports. Much more instructive than this gross result are the
various concomitants of the process and especially the working of
the monetary mechanism.
The characteristics of the monetary system of Canada have
already been described. It is one in which the superstructure is
large in comparison with the gold basis, and in which therefore a
