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Mr. Coyne is fooling no one !

on Friday, 01 January 1960. Posted in Social Credit

On November 16, 1959, Mr. James E. Coyne, President of the Bank of Canada, delivered a speech before the Canadian Club of Montreal on the subject, "Money and Growth". The newspaper, The Fundy Fisherman, published in St. John, N.B. devoted one full page to an editorial on Mr. Coyne's address in its issue of December 2, 1959. With the kind indulgence of the Fundy Fisherman's publishers we would like to quote large segments of the editorial as follows. The subtitles are ours.

Only the usurers profit

On November 16th Mr. James E. Coyne, President of the Bank of Canada, delivered a speech before the Canadian Club of Montreal on the subject "Money and Growth." The speech was printed in advance and copies went to most media of publicity in the nation. Yet it was poorly reported — this in spite of the fact that the high interest and tight money people for whom Mr. Coyne's policies are designed, have enormous influence, with most information media. The influence is at the pocketbook — rather than mental level — but it is exceeding powerful.

After reading and re-reading Mr. Coyne's address it is not hard to understand why it went up like the proverbial "lead balloon". The fact is that the Governor of the Bank of Canada devoted 24 carefully printed pages to saying "maybe." It was said forcefully, despite many a clever qualification, but it adds up to nothing! In effect, Mr. Coyne says tight money and high interest rates are there to stay — they are good for usury and what's good for usury is good for the country. The "maybe" is with respect to the effects of the policies. Mr. Coyne doesn't know. He does know that tight money and high interest rates are good for usury and he hopes the rest of us will get a benefit somewhere along the line.

That, of course, is less the fault of Mr. Coyne than of the product he is selling. In arguing in favor of tight money and high interest rates there is and can be no argument advanced that common sense and observation will not immediately refute. And, one thing stands out like neon on a dark night — the usurers fatten and the people suffer.

Working people, will differ with Coyne

The remarks made by the Governor of the Bank of Canada before the Canadian Club in Montreal recently, and sent out to the press, are hardly worth comment. The grave monetary problems that beset our country — and which seriously affect every man, woman and child in Canada — were either ignored by Mr. Coyne or were referred to in roundabout fashion with high sounding words and phrases that held little or no meaning.

At the start of his address the Governor said that the aim of the Bank of Canada is the economic growth of the country. Well, if he believes that turning on and off the money tap — as he has been doing over the last four years and changing the interest rate about every week stimulates economic growth he will find few, if any, of those who are working long and hard to develop the great resources of Canada who would agree with him. These are the people who produce the real wealth from the land, sea and forest that gives our country the fruits Mr. Coyne talks about with such nice words as economic enjoyments, a rising standard of living, more leisure, etc.

Letting our children foot the bill

The governor states that the value of the great conversion loan should not be underestimated, and also claims credit for this and for the way deficits were financed.

The taxpayers of Canada certainly owe no medals to the Governor of the Bank of Canada for these obnoxious transactions — a bow of crepe would be more in order.

He did not state that the extra interest on the conversion loan will be a billion and a quarter dollars, aside from which the loan demoralized the entire bond market. All bonds went down in price some 15 to 20 points, including the conversion bonds referred to and investors, lost billions of dollars.

The governor seems to think that passing our present deficits and debts along to the next generation without the wherewithal to pay on the other side of the ledger — is sound finance. Most people would call it rather a discreditable kind of finance.

Those who come after us will have their own taxes, and other costs of living to pay, without us unloading our liabilities on their young shoulders.

The governor probably has not read what President Eisenhower had to say recently about this sort of finance. We quote: "I got the idea it would be a good thing for me to write a letter to my own grandson and try to tell him that he should stop supporting me. I would like to get over the idea to the younger generation the people that are 30, 40, or 50 years younger than we are and say whatever we add to the national debt, one single more dolar, you are helping to support me because I am living on debt I am passing on to you. You are the one to pick up the tab."

This is the view of a gentleman who holds the highest political position in the free world. Evidently those who are directing our monetary policy in Canada should get their thinking straight and not continue to try to hoodwink the people by propaganda speeches.

The Bank of Canada policy of tight money and high interest rates has forced provinces, municipalities, cities etc., to go to a foreign nation to borrow billions and mortgage the heritage our forefathers left us in order to educate our youth and take care of our sick; build our roads, bridges, etc. We are even asking our children to pay for their own education for they will be taking our place when this bonded indebtedness comes due and it will have to be paid cash on the barrel head.

They will pick up the tab as the president has said!

Does the governor want to take credit for this shady kind of finance which the policies of his bank are responsible for?

Credit restriction strangles growth

In referring to the tight money crisis that took place last August when the chartered banks were forced into a loan freeze by the Bank of Canada, the governor treated the serious situation, that was known and felt by every man, woman and child, in a very light manner. He said one should not exaggerate and that the August crisis was exaggerated and over dramatized in various reports — usually second or third hand — in public discussion. In other words in his view, it was a lot of gossip. Surely he doesn't want the people to swallow such evasive propaganda?

The thousands of citizens, who could not get money even by offering as collateral the bonds the governor takes so much credit for are witnesses to a monetary crisis to which the people of this country should never have been subjected. The Bank of Canada alone was responsible for one of the most serious money crises in the history of the nation.

Those in ivory towers have the nerve to treat this lightly. Do they think that the people who are working hard and long to develop the country are children?

Domestic saving is mentioned in the remarks of Mr. Coyne as being too small for our development needs. What the governor evidently refers to is paper savings, or book entry saving. That is chiefly the saving of other peoples debts, which are simply cross-entries for loans. It is like taking in one another's washing as regards increasing the real wealth of our country.

Canada can only become wealthy and strong through the production which is obtained by the maximum development of our great natural resources. This means full employment for labour and management.

It is elementary that such a condition cannot be achieved when the builders of our country are being hampered year in and year out by a tight money policy. When the facts are obtained it is clear that the cost of such money is about the highest of any nation in the free world.

Tight money does not mean prosperity

To pretend that this mighty nation is too weak to finance its, daily needs and necessary services without sinking itself into a mire of bonded debt to a foreign country is an absolute insult to the common sense of our citizens.

A far better salesman that Mr. Coyne would find it hard to make such bitter medicine palatable to the people who are suffering from it's effects.

To argue that tight money brings prosperity, cuts the cost of living, helps create full employment etc., is to insult the intelligence of the people and to enter a public plea of guilty to a charge of either incompetence or of timeserving on behalf of debt speculators.

The fact that so many are still prepared — even as their standards of living fall and their jobs disappear — to put some credence in the dogma of tight money and high interest rates is itself a fascinating commentary on the eternal gullibility of mankind.

In the widely-read Telegraph-Journal of Saint John on Wednesday, November 25, 1959 there was on page five an eight-column banner head line reading. "Good Business Conditions Credited to Tight Money Policy." Underneath was an interview with Norman J. Alexander who is President of the Investment Dealers' Association of Canada. Mr. Alexander's reaction to tight money and high interest rates is as predictable as a cat's reaction to cream.

In the same issue of The Telegraph-Journal, on page three is a two column headline which reads "Housing Construction Drops Across Country". This story points out, among other signs of the "prosperity" and "good business conditions" brought about by tight money that in our province of New Brunswick there were 1,403 housing starts in the first nine months of 1959. For the same period there were 2,152 starts. Evidently. Mr. Alexander's version of prosperity is somewhat different from that which the housing industry — and most citizens would be inclined to accept.

Mr. Coyne, obviously, believes that Mr. Alexander has the correct outlook, and that the more business slows down, the higher prosperity rises.

And, on the point of housing the people of Canada have been deeply shocked by the death of a child in Newfoundland, the victim of an attack by rats. The conditions under which this family were living are appalling — representing the deepest depths of privation and bad housing. Unfortunately, as all know, slum conditions are not unique to Newfoundland. They can be found in all cities. In Saint John, the best authorities, for example say that 4,000 houses are unfit for habitation (but they are inhabited), and that another 4,000 are sub-standard. Saint John is by no means alone in this distinction.

Yet we are told that prosperity is so great that the time has come to give the suffering usurers a break. The time has come for a massive transfer of wealth from the poor to the rich — through the uniquely efficient device of tight money and high interest rates. The useful work of the nation is not essential — it is more desirable that financial manipulation be brought to an exact science.

We read that it is difficult to provide homes at Gagetown for returning servicemen because of tight money and lack of financing. While we read this tragic excuse for lack of ability, we witness the rise of palatial new buildings for The Bank of Canada. Evidently again, palaces for the Bank of Canada are much more important than decent homes for citizens.

An ironic historian will one day point out that Canada in an Alice in Wonderland phase of its development turned its back on national growth and organized its economy for maximum benefit to usury. In that strange era Canadians decided that they could not afford to build enough decent homes for the nation's people, because in that weird era all the energies of Canadians were devoted to the raising of money to pay usurous interest rates to kind hearted moneylenders.

The Fundy Fisherman, Dec. 2, 1959

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