For a decade and a half after 1897 a steady tide of population and capital set in toward Canada. In a new region such as the virgin plains of western Canada, the new and exten sive employment of labor and capital resulted in the most obvious prosperity and radical changes on the •face of nature. In planting the wilderness with the homes and busy trade centres of men, a lively market was created for all manner of wares for construction and consumption. Even the wilderness itself soon came to have a highly speculative value, whether in the gross, as prospective farms, or in detail as metropolitan city lots estimated at so much per foot. Thus the investment of one dollar in actual capital called into existence several other dollars of prospective value, and the real and imaginary were exchanged indiscrimi nately.
Again, the building of modern railroads into unexploited territory is like the letting out of water upon the thirsty earth. Even in the process of construction they irrigate the country with millions of wealth, producing large harvests of profit for contractors and the pur veyors of supplies. They afford markets for armies of workmen, and for all manner of machinery, implements and materials of con struction and equipment. When completed these agencies of transportation open the wilder ness to the home seeker, who, merely as home builder, furnishes them with employment for years, and, as town and city builders, for dec ades. Soon the speedy returns from agricul tural industry furnish the railroads with traffic; alike in the export of bountiful harvests and the import of the implements with which they are to be increased, and the myriad of miscel laneous supplies which the ingenuity of the modern trader brings to the door of the settler with actual or prospective crop returns.
All these features were strikingly realized in Canada between the years 1897 and 1913 and may be illustrated by some typical con crete facts. The immigration from the ad joining agricultural and industrial regions of the United States was very marked during this period. The annual immigration from the United States was but little over 2,000 in 1897 but it rose to 139,000 in 1913. During the same period, the annual immigration from Britain in creased from 11,000 in 1897 to 150,000 in 1913. The total annual immigration from all countries increased from 21,000 in 1897 to 402,000 in 1913. The British immigrants as a rule pre ferred settlement in the towns, while the Amer ican settlers preferred the farms, thus indi cating the life to which the respective- imrm had been accustomed before coming to Canada.
The natural effect of the modern tendency toward highly specialized production, as ap plicable to agriculture as to other industries, has enhanced the activities of urban life and reduced proportionately the occupations of rural life. Agricultural machinery and the supplies for the farmers' homes are now chiefly pro duced in the cities. The rural population of Canada, which amounted to 63 per cent in 1901, fell to 55 per cent in 1911. This decline was marked in all the older parts of the country and even in southern and central Manitoba where the earliest settlements had been made in the West.
The trade of Canada no less than its popula tion testified, not only to the rapidity of the development of the country between 1897 and 1913, but to the fact that this was largely due to the influx of immense volumes of foreign capital, which came almost entirely in the shape of goods and not in the form of money. Thus the total trade of the country, which had stagnated from 1875 to 1895, having increased barely 12 per cent in those 20 years, rose from $224000,000i in 1895 to $550,000,000 in 1906. In another eight years it had increased to $1,129, 000,000, in 1914. It then fell off some $9,000, 000 during the first year of the war, but, under the stimulus of war expenditure and munition supplies, rose to $1,447,000,000 in 1916.
Under the influence of the capital invest ment already referred to, the imports of the country rose much faster during the period of expansion than did the exports. Thus at the beginning of the period of expansion in 1897, the exports of the country exceeded the imports by $18,000,000 on a total trade of $257, 000,000. But by 1906 the imports had already exceeded the exports to the extent of $37, 000,000, and in 1913 the exports had reached an excess of $298,000,000. These excesses were completely offset by borrowings abroad, much the greater part being obtain( ?1 "a the London market. With the rapid fallii2, in 1913-14 in the supply of borrowed capital, with a corre sponding reduction in capital expenditure, there was a severe shrinkage in and a corresponding liberation for export of much Canadian produce hitherto purchased for use in the itself. This transition was greatly emphasized during the first year of the war, when British capital was practically entirely cut off for all but military service.