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Toronto Telegram
July 13, 1961
In 1961 the struggling government of Canadian prime minister John Diefenbaker became embroiled in a disagreement over economic policy with James Coyne, governor of the Bank of Canada. Coyne, a trade protectionist, argued that Canada’s expanding trade deficit would lead to economic and political domination by other countries, including the United States. Finance Minister Donald Fleming submitted a bill to Parliament asking for Coyne’s dismissal. On July 13 a Senate committee ruled that he was not guilty of misconduct. Coyne submitted his resignation shortly after the ruling.
By Ken MacTaggart, Telegram Staff Reporter
Ottawa — The Senate today dared the Government to bring on its reform.
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The Liberal - dominated banking committee voted 19-7 against the bill to oust Bank of Canada governor James Coyne.
The recommendation is certain to mean that the Senate as a whole will reject the measure when it meets later today.
The 50-man committee went beyond mere refusal to okay the firing of the 51-year-old governor — it passed a resolution that 'he did not misconduct himself in office.'
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Mrs. Coyne, the governor's lovely blonde wife who had sat through all the committee hearings, walked across the room after adjournment and shook hands with a number of senators.
She declined comment with a wave of the hand when approached by reporters.
Mr. Coyne was not at today's session.
When the Senate acts, the bill will be dead because the Conservative-dominated Commons has no constitutional authority to overrule it.
Meanwhile, the governor is waiting in the wings with resignation in hand (it is reported to be a document of 2,600 words).
He is expected to submit it before the day is out.
Mr. Coyne starts receiving his controversial $25,000-a-year pension the moment he leaves the central bank.
He has no intention of surrendering the $12,500 boost about which, the Cabinet contends, he neglected to tell them.
During his long years of service with the bank, the governor has contributed to the pension and the bylaw covering the boost has been passed and published in the Canada Gazette.
When the committee vote on the bill came, fiery Jean Francois Poullot, veteran Quebecker whose record shows he has voted against his party many times — aligned himself with the majority.
He keynoted the vote with his charge that if to be guided by his conscience meant the end for him, he would vote for that end.
Sen. David Croll (Lib., Ont.) then moved that Coyne be cleared of any suspicions and this carried 16-6.
Veteran Liberal Senator T. A. Crerar declared this latter motion unnecessary, holding that it was sufficient to deny the Government effort to dismiss Coyne, but Opposition leader Ross Macdonald (Lib Ont.) said that the country and Government should know the reason why the committee acted.
As a result, Mr. Crerar voted against the Croll motion.
Senator Pouloit—who also considered the Croll motion unnecessary—added amid an uproar of laughter that he would support a rider to the vote if it proposed that the Government bill be 'consigned to the waste-basket.'
As the main speaker of the final session of the Coyne circus, Mr. Pouliot said that he had never been prouder of the Senate than now.
'This became the final court of this land for a man to be given justice after an authoritarian administration sought to destroy him and his reputation to hide its shameful treatment of him,' he said.
'Without cause shown, without reasons given, it tries to dismiss a servant who had a duty to perform and sought to perform it.
'This has been shameful. I wouldn't touch this piece of legislation with my hands because I would sully myself.
'Never has the Senate stood so high in public respect as it does now. As to the threats that if we do our duty we will be reformed, that the end will come, I say my conscience will guide me. Let the Senate show its courage.
'It has risen above the House of Commons in its respect for justice and fair play.'
Mr. Coyne had defended himself gallantly, fearlessly and courageously. He had not fought for personal interests but for principles. Any man of honor would have acted in the same way.
'He wanted to defend his name and that of his family and his children. I find it beautiful.
'The honor of Mr. Coyne means more than any electoral success because it is forever.'
Mrs. Coyne never took her eyes off Senator Pouliot during his impassioned speech.
Senator Aseltine, as Government leader, sought to pour oil on the turbulent waters when he asked without passion for serious consideration of the facts.
The committee had wandered afield, he said. It had assumed, because the Bank of Canada Act used the expression, that the governor could be removed from office only for 'misbehavior.'
This was not so, he asserted.
Parliament could pass legislation superseding that act and that was now before the Senate committee.
'Parliament is not bound by any legislation of which it was the author,' he said.
'This bill charges no misbehavior. It declares an office vacant and the reason is obvious, the failure of a public official to accept or agree with Government policy. But is Coyne alone to judge if he was right and the Government wrong?'
Senator Aseltine said 'Incompatibility is grounds for divorce' and the bill served only to divorce Mr. Coyne from the bank.
This brought Sen. Crerar to his feet in violent denunciation of this proposal.
The late Viscount Bennett, he said, had created the present Bank of Canada for the specific purpose of creating two authorities, one in monetary direction, the other fiscal and economic policy which remains in the hands of the Minister of Finance. But to protect the former, the legislation clearly sought to protect the bank from political interference.
This fact, he said, could not be dismissed by 'discursive speeches of the Minister of Finance nor the pious declamations of the Prime Minister.'
The only (and he repeated only) reason for dismissal of the governor could be for misbehavior.
And, he said, this should be shown if justice and honesty in government were to continue. Otherwise a dominant party in parliament could ride roughshod over all existing legislation.
Senator Leon Methot (PC [Progressive Conservatives], Quebec) was given the floor, though not a member of the 50-member committee.
He said Mr. Coyne had started a campaign to 'destroy' Mr. Fleming, but the Government had had the courage to correct the situation.
Even the opposition in the Commons had said that Mr. Coyne must go.
Now Liberal senators were saying he should stay.
'No, no,' several senators interjected.
Senator Methot said the committee had been turned into a 'magistrate's court' or a 'wrestling arena' to find out whether Mr. Coyne was a better man than Mr. Fleming.
But the governor's honor was not in question.
'I have sympathy for Mr Coyne and his family . . . even if this is a sad case, Mr. Coyne must go.'
The Conservatives now were shedding 'crocodile tears' for Mr. Coyne after insulting him, retorted Senator Crerar.
Yesterday the drama ranged from the sublime of Coyne's emotional departure from a hushed committee room to the ridiculous of a personality-swapping brawl.
Early amendments and riders to the legislation were withdrawn as the senators became more clearly defined in their stands that Coyne was or was not a victim of political persecution or should or should not be branded as an unfaithful servant of Canada.
By the time adjournment came, long after the regular adjournment hour, it was clear that the overwhelming Liberal majority had decided to support him fully.
When Mr. Coyne ended his 14-hour case against the Government, his wife, caught in a crowd of tourists, rushed after him and flung her arms around him.
Together they walked the several blocks to the Bank of Canada he heads.
In the swan song of his marathon stand before the committee the governor asked for rejection of the Government's bill to fire him, 'so I can hold up my head' as a man of honor.
However, in a voice charged with emotion, he said that a verdict of 'not guilty' by the Senate would not prevent him from voluntarily quitting his $50,000-a-year post.
A verdict of 'guilty' would mark him for life as a man declared unfit by the highest court of the land to hold such an important office of Parliament, said the governor as tears welled in his eyes.
His voice was hardly audible at the end. A hushed silence gripped the committee. Over against a wall a woman spectator sobbed.
It could have been Mrs Maribeth Coyne, the attractive 33-year-old wife, who attended the entire hearing.
The dramatic move caught senators by surprise.
Mr. Coyne wound up his summation, gathered up his papers, and slipped through the door before they had realized what had happened.
The committee was stunned for a moment, then came alive.
'Governor,' shouted Senator Crerar, 'wait a moment. Mr. Coyne, Mr. Coyne, wait.'
But the governor had gone.
Crerar and opposition leader Ross Macdonald then led the demand that any amendment that Coyne had betrayed his trust, must be eliminated. The issue was clear, they claimed, Coyne had been wronged or he had not.
This resulted in withdrawal of amendments moved by Senator Croll and Arthur Roebuck (Lib. Ont.).
The first had specified that no misbehavior or misconduct by Coyne had been found before the request for his resignation by Finance Minister Fleming on May 30.
The second had added the facetious finding that the office of Minister of Finance was equally vacant.
From no Conservative senator came any claim that Coyne had misconducted himself to such a degree that 'misbehavior', the criterion contained in the bank's constitution defining grounds for his removal, had been revealed.
But, they insisted, it was apparent for months that he had been at issue with Government policy; therefore, they said, he should go.
The extent to which the exchanges of opinion went were shown when Chairman H. K. Hugessen (Lib., Que.), known as the Senate's most courtly member, ruled G. S. Thorvaldson (PC, Man.) out of order, read rule 46 which bars personal remarks, and commented, 'I trust that future remarks here will be on a higher level than those.'
From Sen. William Brunt (PC, Ont.) came the most reasoned and restrained presentation of the Government case.
No one, he said, accepted that any misbehavior was shown by Mr. Coyne.
But there had developed a wide difference between him and Minister of Finance Fleming.
The country could not follow two masters; its economic life must be based on a clearly defined pattern. Then, he said, one must withdraw from the picture.
'The minister is elected representative of the people, the man chosen to do that job,' said Mr. Brunt. 'Mr. Coyne, an appointed official must go. I am not criticizing Mr. Coyne or his ability when I say this. I do say that all this could have been avoided, and should have been avoided, if he had gone to the minister when he saw this widening difference between them and said he could not accept Government policy and offered his resignation. I submit that therein he failed.'
Against this came the remarks of Sen. Croll who spoke first after Coyne had ended his dramatic appeal.
'Honorable senators,' said Sen. Croll, 'we have just witnessed a tragic incident, a historic moment. We have watched a man conduct himself as we all would wish we could at some time.
'Clearly, courageously and convincingly he placed his case before us, and not one person came before us to deny him.'
Senator Croll said Mr. Coyne 'is a fighter, he's my kind of man and I'm going to stand by him.'
The committee must act, he said, so that the governor 'can walk out of here the kind of man he really is.'
Sen. Crerar's stand was unexepectedly passionate.
He said that no one could water down his position by accepting any amendment.
'Are we to put a stigma on this man for all future time?' asked Senator Crerar.
'Are we to blindfold him, tie his hands behind his back and march him to execution for acting wholly within the ambit of his responsibilities and duties?'
When Sen. Macdonald followed him with a similar demand, the lines began drawing sharply.
Sen. Thorvaldson accused the Liberals of having throttled other senators.
He described Sen. Roebuck as 'exuding partisan untruths' and the Senate as having been dragged to its darkest hour by permitting Coyne to appear.
Source: Copyright 1961, Sun Media Corporation. Unauthorized reproduction prohibited
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