1870 – 1914
FIGURE 1 : Canada and US GDP per Capita ( in 1990 Geary-Khamis dollars ), 1870 – 1914
6,000
5,000
United States Canada
4,000
3,000
2,000
1,000
0
1870 1871 1872 1873 1874 1875 1876 1877 1878 1879 1880 1881 1882 1883 1884 1885 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 1896 1897 1898 1899 1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 1913 1914
Kobrak , Christopher and Joe Martin . Appendix 3.3 From Wall Street to Bay Street : The Origins and Evolution of American and Canadian Finance . Toronto : University of Toronto Press . 2018 . p . 289 .
less than in the United States . Mortgage and loan companies became much more important in Canada towards the end of the 19th century and the beginning of the 20th century because banks were prohibited from making mortgage loans , and the mortgage and loan companies were well capitalized and well managed with much of the capital coming from Scotland . Unlike in the United States , Canada did not have the same problems with trust companies for the simple reason that there weren ’ t many of them .
Turning from financial intermediation to business in general , the Bradstreet Company — the Cincinnati-based credit agency — reviewed failures in both countries . In 1908 in Canada , 0.14 % of companies failed , whereas in the United States the number was much higher at 0.94 %. There was a remarkable similarity in the reasons for failure in both countries ; the first was lack of capital , the second was incompetence and the third was fraud .
1896 to 1906
To understand the Stringency Crisis of 1907 , it is necessary to place it in context . Forty years earlier , Canada had come into being as a self-governing country in domestic matters . Two years later , the young Dominion acquired Rupert ’ s Land from the Hudson Bay Company . This increased Canada ’ s arable land by 140 million acres .
In 1878 , settlement of the Prairies became a priority , but the problem was that immigrants didn ’ t come , primarily because wheat prices were low . Indeed , as shown in Figure 1 , from 1870 to 1896 growth in GDP per capita was relatively slow in both the United States and Canada .
After 1896 , the long-awaited settlers began to arrive in Canada , with 21,216 arriving in 1897 . Two years later that figured more than doubled , with more immigrants coming from the United States than from the United Kingdom . Four years later the number of immigrants was nearly triple what it had been in 1899 , with the United States providing more than either the United Kingdom or “ other ” countries combined . By 1906 , the number was up to 189,064 . In the three-year period from 1904 to 1906 , the United Kingdom had surpassed the United States as the major source of immigrants . In 1907 , there was a decline in immigration but in 1913 , the last year before the war , over 400,000 immigrants arrived , a figure not seen again for 99 years .
Many of these immigrants headed for the Canadian Prairies , the wheat belt of Canada . In 1905 , Alberta and Saskatchewan — carved out of Rupert ’ s Land — joined Manitoba as Prairie Provinces . Amongst them population nearly doubled between 1901 and 1906 and in the next five-year period increased by two-thirds . From a standing start , the Prairies had 18 % of the total Canadian population .
The main occupation on the Prairies was farming . Suddenly where there had been hardly any farms there were more than 120,000 . The two main crops were spring wheat and oats . Spring wheat acreage increased from nearly two million acres in 1900 to nearly five million acres in 1906 , and production expanded from just under 25 million bushels to nearly 110 million bushels , all within a five-year period . By 1910 , the new Province of Saskatchewan was producing 50 % of all Canadian wheat , oats and barley . The number of prairie line elevators necessary to handle the grain also increased four-fold between 1901 and 1907 to over 12,000 . And storage capacity increased nearly three-fold to 36.6 million bushels .
With the great “ Wheat Boom ,” Canadians became ever more optimistic , to the point that in 1904 Prime Minister Sir
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