[SHORTT] PRESIDENTIAL ADDRESS 71 
goods and the obtaining of ultimate payment for them. Naturally, 
as Cartwright forecasted, the prices for imports were high and the 
returns for native products were low. As a result, just before the 
outbreak of the War of 1812, Canadian retail merchants and farmers 
found themselves heavily in debt to the wholesale merchants, while 
they, in turn, were under constant pressure from their creditors in 
Britain and elsewhere. 
The outbreak of the war with the United States soon changed the 
whole economic aspect of the country. Once more an extensive 
cash market was established in Canada. No longer did the only 
saleable staples consist of wheat, timber, and potash. Every form of 
food and military supplies found a local market from Quebec to De- 
troit at war prices. Transportation of every kind and all forms of 
service for man and beast of burden were in constant demand at rates 
not dreamt of for many years. Payments were at first made in cash, 
but it was difficult and risky to make such payments throughout the 
wilderness of Upper Canada. Moreover, beyond the limited local 
needs of the farmers and villagers, the holding of metallic currency 
was an embarrassment to the settlers. The famous “army bills” 
were, therefore, devised to meet the peculiar needs of both army con- 
tractors and the inhabitants. Once it was found that these bills 
were freely accepted by the local and wholesale merchants, who, in 
turn, found them promptly met in cash or bills of exchange on Britain, 
they were readily welcomed by the settlers, especially in the cities and 
the British settlements of Upper Canada, and the volume issued rapidly 
developed. The effect on trade was marvelous. Everything was 
saleable. Prices were high and yet everyone had money with which to 
buy. Long outstanding debts were being paid off in every direction 
and the wholesale merchants found money pouring in upon them in 
unprecedented volume. Numerous fortunes, large for those days, were 
amassed in York, Kingston, Montreal, and Quebec. Naturally, under 
so rapid a change from hard times and penurious living to prosperity 
and ready money, extravagance, luxury, and dissipation soon mani- 
fested themselves and, once established, did not disappear with the 
close of the war, which involved an immediate curtailment of British 
expendittfre in the colony. 
The exchanges, which from 1813 to 1815 had been heavily in 
favour of Canada, soon passed to the other extreme on account of the 
great consumption of high priced foreign luxuries, many of which were 
imported, especially to Western Canada, through the United States. 
In consequence, the surplus Canadian cash passed rapidly to the 
United States, and within eighteen months of the close of the war the 
less provident elements of the population, who had imagined that an 
