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James Coyne (http://www.bankofcanada.ca/)
James Coyne (http://www.bankofcanada.ca/)

James Coyne: A father, Rhodes scholar and Bank of Canada governor Add to ...

Later, Mr. Coyne was sent to Washington as the first financial attaché in the Canadian embassy, where he helped draft the secret Hyde Park Agreement covering the commercial and financial collaboration between Canada and the United States and their mutual relations with the United Kingdom. With the war fuelling inflation in Canada, Mr. King established the Wartime Prices and Trade Board to clamp down on spiralling costs. Donald Gordon, then deputy governor of the Bank of Canada was named chairman of the Board. Mr. Coyne returned to Canada as his assistant and later was promoted to deputy chairman of the Board, a senior appointment, especially for a man barely into his 30s.

Mr. Coyne wanted to join the Royal Canadian Air Force and finally persuaded his employers to release him for military service in 1942. He qualified as a pilot, earning top marks in his class, but was considered too old for combat. Frustratingly for him, he spent the war standing duty as a security guard at the Portage la Prairie air force base.

By contrast, his younger brother, Jack, (also a Rhodes Scholar, a lawyer and a pilot in the RCAF) was awarded the Distinguished Flying Cross for skill, courage and resolution in bombing missions off the coast of Norway against German shipping, and his sister, Sally, trained recruits and later worked in an administrative capacity at RCAF headquarters.

He returned to the Bank of Canada in 1944, as executive assistant to Graham Towers, the first governor of the Bank of Canada. Six years later, he was appointed deputy governor and then, on Jan. 1, 1955, he succeeded Mr. Towers as governor of the Bank and president of the Industrial Development Bank.

George Freeman, who rose through the ranks of the bank to deputy governor before he retired in 1982, was a clerk in the research department when Mr. Coyne was governor. Describing his boss as brilliant, Mr. Freeman wrote in the anniversary issue of Bank Notes that he “conducted all his own research, although he listened to what we said” and he quickly established himself as “a take-charge kind of guy because he had the ideas, and the drive, and the imagination.” On the other hand, Mr. Coyne had a “combative personal style,” he “didn’t suffer fools gladly” and he “made his points aggressively, where others might have been more diplomatic.”

Aside from his domineering personality, Mr. Coyne was both an ardent nationalist and a prudent spender, as befits somebody who came of age during the Depression. His salary as head of the Bank was $50,000, or $13,000 more than the prime minister of the day earned, but Mr. Coyne still favoured cardboard luggage, $3.95 vest-pocket watches and, when he travelled, packed his own iron to press his suits, according to Mr. Newman’s 1963 account in Renegade in Power: the Diefenbaker Years.

After a decade of Depression and six years of wartime restrictions, Mr. Coyne was concerned about the economic growth rate of the country (in terms of population, productivity and investment). In a speech to the Empire Club a little more than a year into his tenure as bank czar, Mr. Coyne warned that “investment has for several years exceeded saving in Canada” and pointed out that the “deficiency” was being made up by importing an excess of goods over exports and an inflow of foreign capital.

Two momentous events occurred the following year that would change the course of Mr. Coyne’s career and his life. On June 21, 1957, Mr. Diefenbaker was sworn in as prime minister of a minority Progressive Conservative government, having ousted the long-term Liberals. Five days later, at the age of 47, Mr. Coyne married Meribeth Riley, a Winnipeg widow, 17 years his junior who had three children under the age of seven, Sanford (Sandy), now a financial executive, Patrick, now a lawyer, and Nancy, now a music scholar and former lawyer. “He was a wonderful father – not overtly emotional, but very, very interested and concerned,” Sandy Riley said. “We were very lucky that he was the man my mother ended up with,” Mr. Riley said. “He got us at a very early age and we imprinted.” Susan (a writer and an actor) was born a year later and Andrew followed in 1960.

Mr. Diefenbaker went back to the electorate in 1958 and won the biggest parliamentary majority in Canadian history at that time. Mr. Coyne began to get into trouble with a series of speeches during the election campaign in which he said that Canadians were living beyond their means, a theme that undermined a Conservative campaign assertion that tight money under the previous Liberal government had dried up economic expansion.

Late in 1959, Mr. Coyne’s speeches urged that the flow of U.S. capital into Canada should be slowed so Canadians would have more control over their economy. Mr. Fleming said the governor’s speeches contained “strong political overtones.” Mr. Fleming, the finance minister, said the government could not “continue to stand idly by when the governor is espousing policies which [do not conform] with the public interest.”

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