Mr. Coyne again...

Due to the fact that considerable favorable attention is still being given Mr. Coyne's "Canadians must live within their means" speech, we should like to reproduce here an editorial from The Fundy Fisherman of January 27, 1960 in which the remarks of the Governor of the Bank of Canada receive a rather thorough going-over. The editorial is entitled, "Living Within A Strait-jacket"'.

Last week the governor of the Bank of Canada visited Winnipeg, no doubt at public expense, and gave an address in ambiguous words that, as Shakespeare might have said, were as full of sound as they were empty of meaning. The text of the governor's speech runs to 27 pages of "remarks". His listeners must have been weary indeed when the "remarks" came to an end.

It would be useless endeavour to comment on the whole address in a single editorial. First a translation of much mumbo-jumbo into a simple English is necessary. However, a short analysis of the apparent meaning may be in order.

The governor starts out as follows: There are three recognized major economic goals of modern states, economic growth, a high level of employment and a stable value for the currency.

These phrases are familiar. They appear in practically the same form on page 24 of the now famous Radcliffe Report on British monetary policy which was initiated by the United Kingdom government and handed down last August. Evidently the governor must be given credit for, at least, reading this informative document.

However, one thing that the governor appears to have missed in his reading of the Radcliffe Report was the recommendation to make the British government clearly responsible for any change in their bank rate, which was later confirmed by the government.

In Canada a jumping jack bank rate holds sway at the wish and will of the governor causing instability and non-confidence throughout the country every week.

As the financial commentator in the Toronto Globe and Mail has noted "rulers should rule". The government represents the people.

While the central bank operates the monetary machinery, it is for the government to say whether the machine is to be run fast or slow. That is the way it is in England.

Four years ago, when the tight money and high interest rate policy was inaugurated by the Bank of Canada we were told that too much money was chasing too few goods. We were told that we were going ahead too fast; we were working too hard, so to speak and should take it easy. We were told to rest on our oars for a while.

This of course, was at a time when there was practically no unemployment and the economy of the country was as sound as that of any country in the free world.

Mr. Coyne then introduced his tight money and his tigh and high interest rate policies, as we well remember. Today we are in a sorry mess. And today, Mr. Coyne tells us that we, the people are to blame for the consequences of his unfortunate and disastrous policies. In one way we are to blame but only for putting up with a program concieved in folly and administered in vacillation.

Since, when he instituted this policy, Mr. Coyne was obviously unable to visualize the sad consequences of four years in the future, what guarantee have we that his present exhortations are likely to prove in the result more successful? The spector of failure hangs over the governor's past actions and present advice.

His predictions have proven 100 per cent wrong. His edicts have thrown the economy into confusion. His administration has shown itself to be stumbling inept and indecisive. His results have been pathetic failure. His present speeches are an admission of failure, and of inability to either comprehend why he has failed, or why he must continue to fail. He is a man desperately trying to force the future into the mold of the past and, failing, is whining that it is all the fault of the people.

The loss of confidence in other parts of the world is a silent condemnation of the governor and of his shopworn and defeatist policies.

Mr. Coyne blames the people for wanting a decent standard of living. He blames business for wanting to expand and provide jobs. He blames governments for wanting to meet the needs of civilized live in the 1960's of the 20th century.

In effect, he says that if everyone was content to do nothing, spend nothing, eat nothing, wear nothing and construct nothing, he could solve his monetary problem.

An ironic remark in Mr. Coyne's address was "it is strange to recall that for a time after the war we (Canada) were a lender rather than a borrower..." It may be fitting to observe that during this period Mr. Coyne was not governor of the Bank of Canada.

While they are none so blind as those who will not see, it may yet be that someone may persuade the governor to examine his own responsibility for Canada's present sorry monetary mess.

As noted, when the governor decided that tight money and high interest rates were the proper way to ensure a prosperous Canada, the nation was already prosperous. There was no unemployment. Production was high and rising. The standard of living was improving. The nation's economic strength was very great and was growing.

Now, some four years later, after suffering the torture of tight money and high interest rates as decreed by the governor upon all citizens of Canada -supposedly as a cure-all for so-called economic ills - we find the governor in his Winnipeg remarks complaining that we are in rather a bad financial mess.

We are hoplessly in debt to foreign nations, he complains. We have been living beyond our means. It is all the fault of the people and so the people must curtail their spending, lower their standard of living and "save" more.

This means, of course, that he is advocating a slow-up in the economic growth of the country and he is advocating higher unemployment as a deliberate policy.

Obviously, while the governor quotes the sense of the Radcliffe Report in the introductory of his Winnipeg speech, he has not grasped its meaning. For the real objectives he sets for Canadians are absolutely opposite to those advocated in the Radcliffe Report.

If, as the governor says, Canadians have been living too well, living beyond their means for the past five years, and on a grand scale, then he appears to have just awakened to the fact. Surely he cannot overlook the point that he has himself been the dictator of the disastrous financial policies that have brought about this state of affairs.

In passing, it may be noted, that there are hundreds of thousands of Canadians in the ranks of the unemployed or those ground by living costs who legitimately challenge his claim that they are living too well. The governor perhaps, for educational purposes, should swap places with some Canadian citizens for a short spell.

He ought not try to put the blame upon the people now as he has in the past attempted to blame the chartered banks. The policies have been his. The sorry results are his. The blame should be his. The existence of the state of affairs that he admits in his Winnipeg speech is a resounding vote of no-confidence in his understanding of Canadian problems and his wisdom in devising effective remedies.