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10 THE OSHAWA TIMES, Saturday, June 17, 1961 Coyne Controversy Puts Spot On Bank OTTAWA (CP) -- This week's Coyne controversy has thrown the spotlight of publicity on the Bank of Canada, an institution which controls the country's life- blood--money. The clash between Bank Gov- ernor James E. Coyne and Fi- nance Minister Fleming has, if nothing else, drawn public at- tention to the role and powers of the country's central bank. The debate in the country and in Parliament, by the time it is ended, likely will have| ive way and resign. clarified some of those powers and created a wider understand- ing of what the bank is all about. The man in the street knows the central bank as the agency that issued the dollar bill in his pocket, and Governor Coyne as one of the two bank officials whose signatures are on the bill. The other is Deputy Governor J. R. Beattie, He probably doesn't fully ap- preciate, however, that the cen- tral bank's operations may ul- timately be the deciding factor in whether he can get a loan "during good behavior." The issue has never before arisen. The bank has had only one other governor, Graham Towers, who held office for 20 years and left in 1954 on his own initiative. The generally accepted the- ory, supported by statements of Mr. Towers in 1954 and Mr. Coyne this week, is that in the event of an outright clash of pol- icy between bank and govern- ment, the governor would have DENIES POLICY RIFT sign. He has denied Mr. Flem- ing's statement that there are deep-seated differencs in pol- icy between them. The executive committee, which meets more requently than the board of directors, is made up of the governor, dep- uty governor and one director. The deputy finance minister also sits on the committee as an ex- officio member without voting powers, as he does on the full board. from his chartered bank--or, in- deed, whether his employer can get a loan that might mean the continuation of his job. The Bank of Canada's main role lies in deciding monetary policy -- in effect, the money supply. It does this mainly by buying and selling bonds and other securities in the market. DETERMINES RESERVES When it buys, the result is to} increase the cash reserves of| the chartered banks on deposit with the Bank of Canada. When weekly on its assets and liabil-|pMartin, it sells, the reserves are re-| duced. And the size of a bank's| reserves determin how much] money it can lend to the public, The size of a bank's reserves also are affected by how much| currency it holds. But the amount of currency in circula- | tion, too, is decided by the| Bank of Canada. And the man whose hand has man board of directors ap-| pointed by the government. The dispute over the central bank's powers, and who has fi-| nal responsibility for them, has| gone on for years. The Bank of Canada Act makes the bank ultimately an- swerable to Parliament. But where does the government come in? In the Commons, the oppostiion argues that the government must bear responsibility for the bank's monetary policy. In a major speech last Feb- ruary, Finance Minister Flem- ing denied this and said the bank is directly responsible to Parliament, not to the govern- ment. VIEW DIFFERED | The governor has power to veto actions of the board of ex- ecutive committee. But the Bank of Canada Act also specifies certain powers of {the cabinet in bank affairs. Any veto by the governor, for in- |stance, must be reported to the {cabinet which can disallow his |action. The finance minister, with |cabinet approval, appoints the 12 directors. And the minister can keep close tabs on bank op- erations--it must report to him ities and notes in circulation. The cabinet also has power to amend or set aside certain bylaws of the bank's board of directors. net--for terms of seven years) Mr, Coyne has refused to re-| Bylaws over which it has this power are those dealing with the calling and conduct of meetings of the board and executive com- mittee, the fees of directors, the duties of the bank's offic- ers and employees, and 'the management and disposition of the stock, property and under- takings of the bank." All these bylaws must be referred to the cabinet. This provision is involved in tion 16 months ago in increas- ling the special pension avail- |able to the governor. Mr. Fleming said he didn't hear of this action until this spring and that Mr. Coyne was at fault in not reporting it to cabinet. Mr. Coyne said a legal opin- {ion by the deputy justice min- |ister said the pension bylaw was |not among those which required cabinet approval. The government has given no indication yet whether it will disallow the pension bylaw. St. Catharines Win Over Hillcrests ST. CATHARINES (CP)--St. |Catharines A t hletics, scoring |eight goals in the third period, | defeated Brooklin Hillcrests 13-8 lin an Ontario Lacrosse Asso- | ciation Senior A game Friday | night. Scoring for St. Catharines were Ron Powless, Jake Bom- berry, Gary Moore and Gary Carr, with two each and Skee- ter Mower, Ron Roy, Chuck | Ted Howe and Don |Carr, with singletons. Glen Louton scored three, Cy {Coombs and Charlie Grandy two each and Bill Hall one for | Brooklin. Christian, Jew roe mes ane Vigil Exchange TORONTO (CP) -- The Cana- dian Council of Christians and Jews announced Friday inter- provincial exchange visits of two weeks between 550 Ontario and Quebec students will begin July The Ontario students will live for two weeks in the homes of French - Canadian members of the exchange in 15 Quebec com- munities. Then the French-Ca- nadians will join them in 15 On- tario communities for another two weeks. The Quebec communities are Montreal, Quebec, Chicoutimi, Granby, Trois-Rivieres, Shawin- ligan, Alma, Ste. Anne de Belle- |vue, Drummondville, Sorel, Vic- |toriaville and Valleyfield. | The Ontario students are from | Toronto, Oshawa, Kitchener, Ha- milton, Guelph, Stratford, Sar- nia, Brantford, Welland, Kings- ton, Niagara Falls, Peterbor- ough, St. Catharines, Chatham and Windsor. The project--known as Inter- community Visits--is sponc<nred by the Canadian Cor ... of Christians and Jews and Visites Interprovinciales. Its aim is to {develop understanding between {Canadians in Ontario and Que- Jonquiere, Kenogami, Arvida,l bec and foster bilingualism. In 1956, as opposition finan-| Gas Company Raps Examiner cial critic, Mr. Fleming said the | finance minister "has a very | direct responsibility because the action taken by the Bank of] Canada in this respect (mon-| etary policy) surely has a direct WASHINGTON (AP) -- The | That rim would import gas influence on the whole field of New York State Natural Gas|from- Canada, a proposal Pur- action and on the whole field of | responsibility of the government | in relation to fiscal matters." Corporation took exception Fri- day to a recommendation by a |due said would conserve domes- tic supplies. |power c¢ 0 mmissioner examiner] New York State Natural the dispute over the board's ac-| PONTIAC built with a view to value with mere for you from every angle | Winds It's high, wide and extra deep for a full view of the road ahead and it's safety laminated for your utmost pro- tection. Pontiac boasts of Canada's most powerful pas- senger car Six --the famous Strato-Six--and a wide range of vigorous V8's! | Distinctive Twin. Grille. § It highlights Pontiac's perfectly propor- tioned style--adding one more element to that individuality exclusive to Pontiac. Pontiac's spaciousinteriors give you full-sized con- venience for all-day driving comfort. Now, in the decision an-|that a rival firm--the St. Law- wants to sell gas to the Niagara nouned Wednesday by Mr, rence Gas Company, a subsidi- Mohawk Power Corp., Syracuse, Fleming to seek parliamentary|ary of Consumers Gas Com-|N.Y., for resale in a three- action to dismiss the governor, pany of Toronto--be permitted (county northern New York area, the government has taken the|to provide natural gas service including Ogdensburg and Mas- responsibility of deciding to change the bank's top manage- ment. Parliament's decision on the dismissal move will set a prece- dent on how a governor can be removed. Legislation governing the cen- tral bank says simply that the governor and deputy governor "shall be appointed by the di- rectors with the approval of the governor-in-council" -- the cab- Martin Says Voodoo Worse | INTERPRETING THE NEWS Than Arrow MILTON (CP)--Liberal Com- mons member Paul Martin charged Friday night that the United States - designed F101B Voodoo jet interceptors aren't Arrow jet scuttled ago by the government. Prime Minister Diefenbaker . announced this week that Can- ada will receive 66 Voodoos to in northern New York. | The action automatically sends the case to the Federal Power Commission for review. | Lawyers for New York State Natural, of Pittsburgh, Pa., re- {ferred to two of the conclusions reached by examiner Howell {Purdue as absurd and an at- {tempt to reverse established |commission policy. | Purdue recommended last {month for the second time that |the commission permit St. Law- {rence Gas, Ogdensburg, N.Y., to |provide natural gas service in the Ogdensburg-Massena area. sena. [} Lawyers for New York State {Natural said the commission has never permitted imports of |gas when domestic supplies are |available. | "This is not only a completely {new approach to the importa- {tion question but, we submit, is an attempt by the examiner to reverse the established commis- {sion policy on this subject," New York State Natural said of fPurdue's conclusion that St. {Lawrence has a more reliable (gas supply than New York State Natural. UK. --=European By ALAN HARVEY Canadian Press Staff Writer Gallons of ink have been spilled in recent weeks about ' : Britain's relations with Europe News Misleading as good as the Canadian - built| two years Treaty of Rome contains some 250 rules touching virtually ev- |ery human activity from agri- culture to trade unionism. | {DAMNED EITHER WAY re-equip RCAF squadrons in --Yet somehow the result is mis" pe arguments on both sides Canada now flying the CF-100 which Mr. Martin said "is so] The irresistible impression|those leading. is one of you are |are compelling. It times when slow that it can't even catch a emerges that Britain is on the/damned if you do and damned commercial airliner let alone in- verge of deciding whether to|if you don't. tercept Russian bombers. Mr. Martin, MP for Essex East, told a Liberal rally here that the Voodoo is being ac- quired to do the job the Arrow CF-105 was designed for and yet it is "not in a class with the AVRO Arrow which was the best interceptor in the Western world." "Furthermore, the Arrow, de- signed especially for Canadian conditions, had an all-weather capacity not available in the Voodoo." join Europe. Some influential voices have even implied that a |positive decision has already {been taken. In fact, no decision has been |taken; the government still has la fair distance to go before {making up its mind. | The government is embarking on a detailed study of all the {implications of British member- |ship in the European Economic Community. The object is to | clarify the British position in preparation for negotiations--if [negotiations are possible -- with | On the one hand, joining the European club seems part of the {inevitable course of history, an irreversible process. On the other, opponents stress | the dangers -- of low - paid {Italians swamping the British labor market, of predominantly Roman Catholic countries domi- |nating Protestant Britain, of |"foreign" Communists playing {an influential role in the pro- {jected European parliament, A Labor foreign affairs ex- pert, Denis Healey, warns that A decade in Canadian aero-ithe six nations of EEC who|in the European setup Britain nautics was scuttled overnight, sizned the Treaty of Rome in|Would have about as much po- said Mr. Martin, and thousands|narch. 1957. litical influence as Quebec or were put out of work. | No Hamlet sicklied o'er with|California. Now, two years later, the gov-/the pale cast of thought has| So Prime Minister Macmillan ernment finds itself in the posi- ever faced a trickier or tougher|takes his time. There is little tion of having to acquire a less problem. 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