Canada's own mines is more than sufficient to furnish the annual increment in the banking reserve." FLUCTUATIONS OF RESERVE, 1906-1909. Charts V and VI (on the opposite page) show the fluctuations of the reserve during the four years 1906-1909; also changes in the amount of net liabilities. It will be noted that as a rule the total reserve (Chart V) moved up and down with changes in net liabilities, increasing greatly as the liabilities grew after the middle of 1908. Chart VI shows that the ratio of reserves to liabilities rose rapidly during the last half of 1908, when business was quiet and funds were accumulating. The ratio was nearly constant throughout 1909, but showed a downward tendency toward the end of the year, on account, doubtless, of renewed business activity in Canada. By reference to Chart II (see page 48) the reader will note that during these three years there were great monthly fluctuations in the item "call loans" elsewhere, and a remarkable increase in 1908 and 1909. The gain in call loans in the spring and summer of 1907 doubtless reflected the Canadian bankers' desire to take advantage of the high rates of interest current in New York City. At the same time the Canadian banks were reducing their current loans in Canada, as is shown graphically on Chart I (page 48). The sharp decline in call loans in September and October, a The banks quote sterling exchange in the terms of the old par of exchange, according to which the sovereign was worth, in Spanish dollars, $4.449. The present par ($4.8665) is about 91⁄2 per cent above the "old par." There is some ground for suspicion that the Canadian banks preserve the antiquated par because a sixteenth added to 91⁄2 per cent means a bigger profit than when added to $4.8665. |