WHEAT IN WESTERN CANADA 131 



western Canada each year is usually about $100,000,000. 

 This vast sum is required for seasonal use only and could 

 not therefore be provided profitably by the grain trade. 

 It costs from $7,000 to $12,000 to build a country ele- 

 vator which will hold 30,000 bushels of wheat. If the 

 price of wheat in the country were 75 cents per bushel, it 

 would require $22,500 to pay for enough to fill a single 

 elevator. Moreover, an elevator usually is filled for a 

 part of the year only. If an elevator company were obliged 

 to maintain a fund of $22,500 per elevator all the year 

 round, so as to fill each elevator for part of a year only, 

 this capital would be badly employed and would yield a 

 very poor rate of interest : it could be more profitably spent 

 in some other business. Similarly, commission merchants 

 and track buyers cannot afford to keep capital in large 

 sums available for mere seasonal use. It is therefore ob- 

 vious that the grain trade is unable to finance the crop 

 movement without external aid. 



Credit is the commodity of banks, and the business of 

 providing credit for financing the crops therefore naturally 

 falls to these institutions. The banks collect small de- 

 posits from a large number of people and then lend out the 

 money so accumulated to those who require it for carrying 

 on trade and commerce. The depositors receive from the 

 banks a certain rate of interest and the borrowers are 

 charged by the banks a higher rate of interest. The sum 

 gained by the difference in rates of interest serves to pay 

 the expenses of the banks and to ensure a profit upon their 

 operations. At the same time, the money which the banks 

 handle, is made to work both for the depositors and the 

 borrowers. When the money is needed to buy the grain 

 as it leaves the farms, the banks make temporary loans to 

 the elevator companies, the commission merchants, and the 



