James Elliott Coyne (July 17, 1910 – October 12, 2012) was a Canadian economist who served as the second governor of the Bank of Canada, from 1955 to 1961, succeeding Graham Towers. During his time in office, he had a much-publicized debate with Prime Minister John Diefenbaker, a debate often referred to as the "Coyne Affair" (or sometimes the "Coyne Crisis"), which led to his resignation and, eventually, to greater central-bank independence in Canada.
Life and career
Coyne was born in Winnipeg, Manitoba, the son of Edna Margaret ( Elliott) and James Bowes Coyne, a judge at the Manitoba Court of Appeal, who was co-prosecutor of the men accused of seditious conspiracy in the Winnipeg General Strike of 1919. His grandfather was lawyer and historian James Henry Coyne. Coyne graduated from Ridley College in St. Catharines, Ontario in 1925, and had conferred upon him a BA in 1931 from the University of Manitoba. He studied at Oxford University as a Rhodes Scholar, playing for the Oxford University Ice Hockey Club, and in 1934 received a B.A. Jurisprudence and BCL. During World War II, he served in the Royal Canadian Air Force.
From 1944 to 1949, Coyne was executive assistant to Graham Towers at the Bank of Canada and from 1950 until 1954 was Deputy Governor. He was appointed Governor in 1955, resigned in 1961, and was succeeded by Louis Rasminsky.
He was the father of journalist Andrew Coyne and actress and playwright Susan Coyne, and stepfather of Sanford Riley, Patrick Riley and Nancy Riley.
Matters came to a head when Coyne raised his own pension to $25,000, which Diefenbaker deemed excessive when he himself had no entitlement to one. The PC majority in the House of Commons passed a bill declaring his position vacant, but the Liberal-controlled Senate rejected it. Nevertheless, Coyne resigned the next day. For his role in this controversy, the Canadian Press named him Canadian Newsmaker of the Year in 1961.
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While all this may be true, it is a misleading account. It has left out the request made by the Diefenbaker government that the BoC lower the pegged value of the dollar ($1.05 US) to .925. It also makes the pension discrepancy an issue which it was not. Nor was the fiscal spending of the government as reported above the issue. Because Coyne refused the government request two events took place. Coyne resigned and the Bank of Canada Act was revised to ensure that the Finance Minister would have the authority to meet with the Governor and the Board of the Bank of Canada and, in the event that they did not come to an agreement, would provide written direction to the Governor and post that in the Canada Gazette. A reference to a Toronto Star article by Alan Barnes on August 2, 1998 describes the issue and the Liberal opposition to the devaluation by terming the devalued dollar the Diefenbuck. Here is the link to the article. http://www.ggower.com/dief/text/star2.shtml. For another account of the issue here is a link. http://www.bankofcanada.ca/wp-content/uploads/2010/07/1962-70.pdf
The following is the amendment to the Bank of Canada Act. http://laws-lois.justice.gc.ca/eng/acts/B-2/page-3.html#h-6
14 (1) The Minister and the Governor shall consult regularly on monetary policy and on its relation to general economic policy.
Marginal note: Minister’s directive
(2) If, notwithstanding the consultations provided for in subsection (1), there should emerge a difference of opinion between the Minister and the Bank concerning the monetary policy to be followed, the Minister may, after consultation with the Governor and with the approval of the Governor in Council, give to the Governor a written directive concerning monetary policy, in specific terms and applicable for a specified period, and the Bank shall comply with that directive.
Marginal note: Publication and report
(3) A directive given under this section shall be published forthwith in the Canada Gazette and shall be laid before Parliament within fifteen days after the giving thereof, or, if Parliament is not then sitting, on any of the first fifteen days next thereafter that either House of Parliament is sitting.
R.S., c. B-2, s. 14.
For further documentation, it is worth reviewing the politics of the day and the actions of the press in response to the Liberal outrage. Following is a link to the Star article in 1998 describing the earlier events. 14 (1) The Minister and the Governor shall consult regularly on monetary policy and on its relation to general economic policy.
Marginal note: Minister’s directive
(2) If, notwithstanding the consultations provided for in subsection (1), there should emerge a difference of opinion between the Minister and the Bank concerning the monetary policy to be followed, the Minister may, after consultation with the Governor and with the approval of the Governor in Council, give to the Governor a written directive concerning monetary policy, in specific terms and applicable for a specified period, and the Bank shall comply with that directive.
Marginal note: Publication and report
(3) A directive given under this section shall be published forthwith in the Canada Gazette and shall be laid before Parliament within fifteen days after the giving thereof, or, if Parliament is not then sitting, on any of the first fifteen days next thereafter that either House of Parliament is sitting.
R.S., c. B-2, s. 14.
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Honours
- He was given the Honorary degree of Doctor of Laws from the University of Manitoba in 1961.
- He was awarded the Canadian version of the Queen Elizabeth II Diamond Jubilee Medal in 2012
- He was appointed a member of the Order of Manitoba in 2012. Coyne died in Winnipeg on October 12, 2012.