England, Canada and the Great War

by L. G. Desjardins

Any one merely hinting to the British saving public that the money invested in Canada was sent over to our shores for the object of creating a financial influence which would force the Dominion into costly wars, could not have adopted a more unwise course to destroy the best chances of the success of a loan. Canadian credit was of first class order, because the British investors knew our grand possibilities; because they were aware that Canada had always been a safe debtor, honouring with clock regularity her interest charges and the payment of maturing loans; because also, and in a very large measure, they realized that we were not in the same position of so many nations of the Old World, exposed to frequent warring necessities likely to exhaust our means and to jeopardize our bright prospects.

Confidence being the sound basis of good credit, we got all the money we wanted for all the purposes of our national economical development, the true interest of Canada and of Great Britain being equally well served by the financial intercourse between the wealthy mother-country and her progressive colony.

Canadian Financial Operations in the United States.

Our "Nationalists," so eager to discourage Canadian effort in the war, and, with this object, always prone to magnify German warlike achievements and the difficulties confronting the Allies, were rather nervous at the increasing prospects of the United States joining the Entente Nations. Their leader seized every opportunity to argue that they would be mistaken in doing so. During the weary months when the President of the neighbouring Republic was prudently feeling his way before taking the bold stand which he has ever since so brilliantly and bravely upheld, the "Nationalists", through successive ups and downs in their expectations, could scarcely help hiding their desire that the United States would not intervene in the struggle. Those of us who had not been moved by the horrors of the Belgian invasion, by the murder of so many innocent victims of teutonic savageness, by the brutal killing of Edith Cavell, by the Armenian massacres, by the wanton destruction of admirable works of Art, could not be expected to thrill at the barbarous sinking of the Lusitania, sending to the bottom of the ocean hundreds of American citizens of the neutral American Northern Republic. They were anxious that the Washington Government should condone the outrageous offence and all the subsequent ones perpetrated by the German submarines against our neighbours. How much they were dismayed at the sudden close of Mr. Wilson's apparent hesitation, and at the proud declaration of war from Washington to Berlin. Though rejoicing at it, they did not consider that the Russian bolsheviki's collapse could compensate for the additional military and financial resources the Allies were sure to derive from the United States participation in the war.

Canada having to borrow many millions to sustain her warlike effort, and the British money market being closed to further outside investments, had two sources left for her successful financial operations: her own market and that of the United States. The Washington Authorities had generously decided to help financially the European Allies in pressing need of money. The Ottawa Government, before making a grand appeal to the Canadian public, applied to Washington for a loan. Mr. Wilson's cabinet, however much they would have liked to meet the wishes of the Canadian Government, had to answer that, having such a large war expenditure to incur, and such big sums to collect to assist their less wealthy European associates in the struggle, they could not see their way to grant Canada's demand.

Acknowledging the value of the reasons given for not complying with their request, the Canadian Ministers then applied to Washington for the permission to negotiate a loan in the open American market. This was readily granted.

It was, of course, well understood that going in the open market, Canada, to secure the required sum of money, would have to pay the then current rate of interest increasing, as usual, in proportion to the increased pressure of the demand of funds.

It is utterly incredible—but still it is true—that Mr. Bourassa did denounce in his newspaper Le Devoir, the Ottawa Cabinet's action in borrowing money from the American saving public. In severe terms he blamed the Washington Authorities for not having lent millions to Canada at the low rate of interest they had agreed to accept from France and Italy. He asserted that this refusal on their part was a testimony of ill-will against the Dominion. And in the most violent terms he charged all those who favoured Canadian borrowings in the American market with being traitors selling their country to the United States.

It is hard to say whether the charge is not more ridiculous than contemptible. It is the repetition, in an aggravated form of absurdity, of the argument accusing the British investing capitalists to have had for their only object in lending us their money to help coercing Canada into the Imperial wars.

Was Mr. Bourassa ignorant of the fact that the building of the magnificent railway system of the United States, that their great industrial development, were due to the billions of British capital which for the last eighty years have flowed, in rolling waves, towards the shores of the Republic, invading, in the most peaceful and friendly way, her large territory, and drawing from its immense resources the greatest immeasurable accumulation of wealth ever created by the labour of man? I am not aware that any American writer ever ran the risk of being crushed by ridicule in accusing all the United States borrowers in the English market, governmental and others, of the hideous crime of selling their country to Great Britain. It would have been sheer madness to say so in the broad light of the marvellous economical progress of our neighbours. They knew very well that the billions of dollars invested by the British saving public for the development of their territorial riches, were producing returns much larger than the rate of interest paid to their British creditors.