Canadian War Finance and the Balance of Payments, 1914-18

Abstract

The primary purpose of this paper is to set out in some detail the writer's recently revised estimates of Canada's balance of international payments during the years of the last war. This is done in Part I, where a brief account is also given of the methods which have been followed in arriving at these estimates. In Part II some observations are made as to the part played in the war-time expansion of the volume of money in Canada by the external factors revealed in the balance of payments and by the methods of war finance.The information about a country's international economic transactions to which the term “balance of payments” is now usually applied, may be presented in a variety of forms and with much or little detail depending on the taste and particular purpose of the compiler. Official reports usually give at one place the credits, debits, and balance for each item, and group the items into a current and a capital “account.” They may or may not isolate monetary gold and short-term capital movements as a third group. As a basic form from which each user may rearrange the data as he wishes, this is satisfactory, provided ample details are given. In table I, however, the basic grouping is according to receipts, payments, and “balancing” items. Receipts and payments are then each grouped into current and capital “accounts.” From this information the reader may, if he wishes, make a table of the conventional form. Some of the group balances usually included in such a table are given in items 31-36.