montial from the officers in charge as to the excellence of the food. Another point on which the C.P.R. deserves the thanks not only of the military, but also of the public, is the efficiency and celerity of its telegraph service, which has enabled us to keep track of every troop movement the moment a train was delivered to C.P.R. lines. Only those who have to do with troop movements realize what a relief such a service is, and the C.P.R. certainly has been perfect in its telegraphic arrangements."

The undertaking of the Company to provide employment to those who voluntarily enlisted for Overseas Service, has been lived up to; indeed many returning soldiers who were not originally in C.P.R. service have been taken on. The figures revised to the end of July are as follows:

:

NATIONAL FINANCE AND THE WAR

ANNUAL ADDRESSES AND REPORTS*

OF

THE BANK OF MONTREAL

Address
by Sir H.
Vincent
Meredith,
Bart.,
President

At a Special Meeting of the Shareholders of this Bank, held on 10th September, your permission was obtained to purchase the assets and assume the liabilities of the Bank of British North America. At that time the nature of the transaction and the terms of purchase were explained; these, I believe, are equitof the Bank. able as well as advantageous to both Banks. The amalgamation was completed on 12th October, 1918, but the combined balance sheet showing the new capital and rest and undivided profits cannot be prepared until after the expiration of four months from the date of taking over, as the agreement stipulated the shareholders of the Bank of British North America should have that period in which to elect whether they would accept cash or our shares in exchange for their holdings. Another matter that has engaged the attention of your Directors has been the distribution of profits. It was thought the term "bonus" was out of harmony with existing conditions. After giving the matter careful consideration, and having in view the fact that the earnings of the Bank for some years past have warranted the payment of the usual 10 per cent. dividend with an additional 2 per cent., it has been decided that the stock should be placed on a 12 per cent. basis, effective at the next dividend period.

A sum of $46,000 was donated to Patriotic and Red Cross Funds, and I know the action of your Directors in this connection has your approval. The business of the Bank has been well maintained during the year. In view of possible Government financing and the somewhat uncertain outlook at home and abroad, we have consistently set our faces against over-expansion, which is to be deprecated under existing conditions. While giving our customers all reasonable accommodation required, and taking up many new desirable accounts, we have maintained a strong liquid position, continuing a well-considered policy of the Bank; a policy which, in the past as now, has added materially to the stability as well as the credit of the Bank at home and abroad and of Canadian finance generally. Turning to British finance, two outstanding features during the year were: First, the success of the system of continuous borrowing

*Note. For History of the Bank see Supplement of The Canadian Annual Review for 1910; for preceding Reports and yearly addresses see Volumes 1911-17. This annual meeting was held Dec. 3rd, 1918.

by means of the 5 per cent. National War Bonds, which were made available to investors at all times on application. This plan yielded the huge sum of £1,200,000,000 from daily subscriptions and avoided the unsettling of the money market which invariably attended the placing of great War Loans. Notwithstanding this remarkable response of the investing public, deposits held by the banks in England are actually larger than a year ago. The second feature is the amalgamation of some of the more important banks in Great Britain, resulting in a closer co-operation between the Imperial Treasury and the banks in meeting and solving the financial problems with which the country was faced. The methods adopted by the United States Government in connection with war finance are so well known that it is unnecessary for me to make reference to them here, or to dwell upon the success which has attended the loans of that country.

The overwhelming success of Canada's Victory Loan, 1918, again evidences the loyal and patriotic spirit of our people and enables the Minister of Finance to extend material assistance, should it be required, to the Imperial or Allied Governments, in the interests of Canada's trade. The oversubscription of the Loan is an index of the sound financial condition of the country and of the ability of the people to cope with whatever situation may occur.

During the year under review the foreign trade of Canada has been on a descending scale. That trade amounted to $2,082,494,000 in the ten calendar months of last year to October 31st, while this year the value is, for the same period, $1,762,785,000. The decrease has occurred principally in the value of agricultural products and manufactures exported; in the case of the former, because of a less bountiful harvest, and of the latter, because of the completion of munition orders. The figures, however, reflect a trade immensely greater in value than in the pre-war period and indicate the source of the commercial prosperity the country has had. Taking the ten months' period, there was in 1917 an excess of exports over imports of $341,000,000, and in the corresponding period this year the excess is $242,360,000, a decline of a hundred million dollars, but the balance remained large, and while the export of munitions will shortly cease, that of agricultural products should be at least maintained and probably increased in the future. In the ten months' period, imports were $870,789,000 and exports $1,211,702,000 in 1917, as against imports of $760,212,000 and exports of $1,002,572,000 in the corresponding perid this year.

Business generally has been active and profitable, as banking accounts abundantly attest, note circulation, deposits and loans being unprecedentedly large. As an adequate supply of raw materials again becomes available, it is reasonable to expect an extension of manufacturing operations, and in the necessarily small stocks in merchants' hands there is assurance of a good demand for mill products, even though the expectation of a recession in prices may prompt caution in purchasing.