Optional payment bonds are a distinctive feature of the Canadian debt structure and give rise to a set of conditions quite peculiar to the Canadian economy.

As to the facts, it may be said that a very considerable proportion of Canada's federal, provincial, municipal, and corporate indebtedness has been issued with principal and interest payable at the holder's option in either or both London and New York funds as well as in Canadian currency. A smaller amount is payable in London only and in New York only. The proportionate distribution of Canadian public issues according to payment feature is estimated, very approximately, as follows:

Something over 55 per cent, of Canada's bonded indebtedness, therefore, has an external payment feature in some form or other.

These combinations of payment feature are the consequence of several rather clearly defined phases of our economic development. The historical aspects of our capital imports constitute a study in itself beyond the scope of this article. Suffice it to say that most of our “Canada and London” and “London only” debt was acquired in the years from 1900 to 1913, a period in which we were absorbing outside capital at a more rapid rate than any other capital-importing nation and depending for our requirements almost solely on the London money market.