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Reactions inserted:
william_b_ryan@yahoo.com wrote:
There may be scanners
that can read microfiches
directly. While that is technically feasible, I
doubt
that they are readily available.
Perhaps the easiest way is to print
from the
microfiches, then scan from the printed document page
by page into a
form suitable for OCR. I am assuming
that the microfiche readers have printing
capability.
The archive does offer a photcopy service but it has to be ordered
and takes quite a long time--as well as being more expensive than making a CD for
oneself.
It depends very much on the quality of the printed
document. At the
very least the OCR'd document is
going to need a lot of editing, a
labor-intensive
process.
It may be more effective to
transcribe the text from
the printed pages. Since I am a very fast typist,
I
often find that transcribing is better and faster for
me than OCR'ing then
editing. Regardless, I think it
would be worth it to put this valuable archive
into
the public domain.
What I might do, if I were you, is print out all
eight
hundred and some pages at the library, then hire
someone or pay a transcribing
service to type them out
into a word processor like Word.
-
A good idea, but
expensive. I need to work on getting someone to give me a contract to get the
stuff into print, but that will depend on coming up with a persuasive argument to
the right potential funder.
At the end of the document, you write: "As a
veteran
British banker and theorist put it recently, banks
create money *for
their customers*, not for
themselves."
Is that Geoffrey Gardiner?
Yes.
I don't agree entirely
with how it is put.
If we define
money as deposits transferable by check
or electronically, banks control
completely the
crediting and debiting of deposits to customer
accounts.
Most
net increases to aggregate customer accounts
derive from loans, the purchase of
securities by the
banks, etc.
But banks also credit customer accounts when
they
write checks for the payment of salaries, wages,
dividends including
interest paid to depositors, and
ordinary business expenses.
-----------------original message--------------------
The attachment does
not bear directly on the question
about William Chant, but the content points
toward an
archive that may have some interest here. My
mini-essay describes a
marathon encounter between the
governor of the newly nationalized Bank of Canada
and
several MPs of reformist persuasion, including
several
Social Crediters and especially Gerry McGeer from
Vancouver.
I would
like to make that archive more widely
accessible, but am unaware of an easily
available
technology for doing it. As the essay notes, the
archive is difficult
to read. I have copied a
substantial quantity onto a CD, but don't know how
to
get a microfiche sheet pasted into an optical
character reader software so
that I can edit. Can
anyone help me?
Keith
-------------------------------------------------------
Keith's
attachment:
A Monetary Education for MPs
Keith Wilde
A Parliamentary document
from 1939 may be the most
illuminating exposition of fundamental money
and
banking principles and operations that I have
encountered. It is the
*Minutes and Proceedings of
the Select Standing Committee on Banking and
Commerce,
Eighth Session*. A few contextual details add
significance to the
proceedings:
The Bank of Canada opened in March of 1935, under a
Conservative government.
In August of 1935, Albertans
elected a full slate of members from the newly
formed
Social Credit party. Then a federal election in
October defeated the
Conservatives and elected 171
Liberals. Only 39 Conservatives were returned.
The
Social Credit party had 17 of its candidates elected,
15 from Alberta and 2
from Saskatchewan. The CCF won
7 seats. The new government nationalized the Bank
in
1938, buying all of its shares from the private banks
that were its original
owners. Early in 1939, the
Bank submitted its annual report to the new owner,
and
on February 20, 1939 the report was referred to the
Standing Committee on
Banking and Commerce. The
Committee was convened to begin its task on March
8
and reported back on June 1, 1939. *The Minutes of
Proceedings and Evidence
Respecting the Bank of
Canada* runs to 858 pages in 25 volumes,
recording the
proceedings of thirty sessions. Most of the content
appears to
have been generated through interrogation
by members of the principal witness,
Bank Governor
Graham Towers.
Two decades of turbulence in monetary thought
The
1930's had been a period of exceptional popular
interest in monetary policy. Not
only was the Great
Depression a potent motivator; groundwork for concern
had been
building on the inside and the outside of
financial institutions since the end of
the Great War.
Economic impacts of the War stimulated the thinking
not only of
J.M. Keynes (*Economic Consequences of the
Peace*, *Treatise on Money*, and
finally *The General
Theory of Employment, Interest and Money*) but also of
C.H.
Douglas, founder of Social Credit, who made
extensive appearances as expert
witness in this same
House of Commons Committee in 1923 and in a committee
of the
Alberta legislature in 1934. Meanwhile,
Graham
Towers was on a fast track of learning and influence
within Canadian and
international banking circles,
with a special interest in the purposes and
functions
of central banking. The Great Depression intensified
a focus on
monetary issues that had been building
since the post-war depression. And one of
those
captivated by the subject was Gerald McGeer of
Vancouver, who was elected
as a Liberal MP in 1935.
As a B.C. legislator and mayor of Vancouver he
had
already associated himself prominently with monetary
and banking issues,
notably with a critique of the
Royal Commission on Banking and Currency in
1933,
headed by Lord MacMillan to address the Depression
conditions and
particularly the advisability of a
central bank. By the time he was sent to
Ottawa as an
MP, McGeer had completed a book on monetary policy,
*The Conquest of
Poverty*, that became instantaneously
influential among monetary reformers
in
English-speaking countries, not under McGeer's own
name but rather as words
attributed to Abraham
Lincoln. (This confusion has been explained
previously in
issues of ER.) Given this context, the
rather electric quality of the
Proceedings should be
no surprise. (And the moment passed. Within a few
months
Canada was at war, an election had increased
the government's majority, the
Social Credit presence
had shrunken to 10 MPs, and a commitment to
fiscal
policies to maintain full employment had taken the
wind out of monetary
reform.)
Fishing for concessions
The expert witnesses were Graham Towers and
Clifford
Clark, Deputy Minister of Finance. Most of the
content of the minutes
is the grilling of Towers by
committee members, the most aggressive of which
were
McGeer and a couple of Social Crediters. Towers
appears to have been present to
answer questions
through the whole of it, as was Clifford Clark,
Deputy
Minister of Finance for most of it. The Minister,
Charles Dunning was
also present on many occasions.
As the first witness, Clark provided descriptive
and
quantitative details about the Canadian currency and
its development in
decades prior to 1935. That didn't
take long, and then Towers took the chair to
explain
the field of credit and the role of banks and banking.
It is my
impression from having read about half of the
minutes (painfully, on poor quality
microfiche) that
they should be made accessible more widely as a
virtual textbook
of money and banking fundamentals as
they used to be. I went to the National
Archives to
consult these Proceedings in order to verify some
statements
attributed elsewhere to Towers. I did find
them, and noticed that they had been
elicited by a
Social Credit member and by McGeer, as follows:
Page 223
Question
from Landeryou (SC from Lethbridge):
"Ninety-five percent
of all our volume of business is
being done with what we call exchange of bank
deposits
-- that is, simply book-keeping entries in banks
against which people
write cheques ?"
Towers: "I think that is a fair statement."
Page 285
Question
from McGeer: "When you allow the merchant
banking system to issue bank deposits
-- with the
practice of using cheques -- you virtually allow the
banks to issue
an effective substitute for money, do
you not ?"
Towers: "The bank deposits are
actually money in that
sense."
Page 287
Question from McGeer: "But there is no
question about
it, that banks create that medium of exchange ?" [I.e.
bank
deposits]
Towers: "That is right. That is what they are for."
McGeer: "And they
issue that medium of exchange when
they purchase securities or make
loans?"
Towers: "That is the banking business, just in the way
that a steel plant
makes steel."
One of the infrequently heard
members observes on p.
400 that "McGeer and the social credit people
are
circling around 'debt-free money'". McGeer affirmed
that his purpose was to
persuade the Committee that
there is a costless (or at least lower cost) way
of
mustering the money (finance) to get men and materials
into operation for
important productive activities.
(Towers freely acknowledged that although an
"easy
monetary policy" had been in place for several years,
there was still
plenty of under-employed labor and
materials. He defined "easy money" as no need
to
impose bank rate restrictions or cash reserve
requirements on banks-they had
plenty.) McGeer kept
returning nonetheless to this question: Why should
a
government with the power to create money give that
power away to a private
monopoly? And especially, why
should it then borrow from the banks and pay
interest?
Towers' response: "Parliament can change the way the
banking system
operates if it wishes to do so." This
point is confirmed and illuminated in
the following
research note provided by the publisher of a
now-defunct money
reform newsletter:-
"The Government of Canada has constitutional right to
create
100% of the nation's money supply.
"The Canadian Constitution, Section 91 under
Powers of
Parliament states:
"'... the exclusive Legislative Authority of
the
Parliament of Canada extends to all Matters coming
within the Classes of
Subjects next hereinafter
enumerated; that is to say, -- ...
14. Currency and
Coinage.
15. Banking, Incorporations of Banks, and the Issue of
Paper
Money.'"
-
The unwavering Towers
The physical difficulties of reading the
microfiche
version of the Proceedings prompted me to consult the
biography of
Graham Towers, commissioned to celebrate
his contribution as the fiftieth
anniversary of the
Bank approached. The author, Douglas
Fullerton, was a
well-established Ottawa figure who had worked directly
with
Towers in non-Bank contexts, and he was given
access to Bank staff and records
for research on the
book. The tone of quoted passages from his book is
fully
consistent with what I heard of Towers from
senior officers who had worked under
him, when I was
an employee of the Bank in 1965 and 66. And comments
about the
performance of both Towers and McGeer are
supported by my own impressions from
the 1939 hearings
before I had opened the biography.
From *Graham Towers and
His Times* (Toronto:
McClelland and Stewart, 1986) Pages 88 to 93.
"The
depression broadened interest in central banking
among students and businessmen,
and the number of the
initiated gradually increased. Canada's continuing
economic
troubles also created a new group that was
skeptical about all aspects of the
conventional
approach to money creation. As Towers noted in
a
speech to Queen's University students, the phrase
"sound money" came to be
almost a form of
reproach...In 1939 he appeared before the Commons
Standing
Committee on Banking and Commerce, which had
a principal goal of educating
members of Parliament
and the public about the Bank. In his appearances
before
the committee, Towers was soon drawn into
battle with monetary dissidents and
self-styled
reformers, particularly those of the Social
Credit
persuasion...
"Bruce Hutchison describes the scene vividly in The
Far
Side of the Street. Gerald McGeer...had begun as
"an ignorant boilermaker" but
made himself "a King's
Council, a Biblical soothsayer, a scourge of
Canadian
politics, a piercing thorn in Mackenzie King's side."
Hutchison says
McGeer "stumbled by accident on the
science of money. Inflamed by the discovery,
he
perfected a fool-proof monetary system of his
own"...Hutchison's own "economic
illiteracy" led
him
to become an "unpaid press agent and travelling
companion" to McGeer - "a
third-rate Boswell to a
second-rate Johnson."...As soon as [McGeer] arrived
in
Ottawa, he made himself a pest about monetary matters.
He filled the pages of
hearings on banking with his
unorthodox monetary views; he cross-examined all
the
witnesses, and often tied them in knots. That is,
until 1939, when he confronted
Graham Towers. As
Hutchison noted: Hour after hour, day after day,
[Towers]
answered Gerry [McGeer], the prosecutor, in
such perfect diction that it could
have been published
verbatim as a book. Gerry used his blustering
questions like
a club. Towers' thrusts were delivered
with a rapier. A western giant and an
eastern
giant-killer had met in death grapple while the
committee watched in
admiring stupefaction but without
comprehension.
"In 1949, F.C. Mears of the
Montreal Gazette had this
to say...: [Graham Towers]
parliamentary performances
won't be forgotten. The times he has appeared
before
the banking committees of House and Senate, always in
an atmosphere heavily
charged with political
controversy, if not acrimony, the Governor of the Bank
of
Canada has been exceedingly effective. Back in
1939, when the Bank of Canada was
only four years old,
he was obliged not only to explain but also actually
to
defend the institution. The rapid fire of questions
and answers on fairly
intricate monetary questions,
the magnitude of the issues involved, and
the
prominence of the man on the stand, made it mighty
hard for party whips to
hold a quorum in the House.
Towers could never be trapped into exhibiting
heat,
could never be caught off base. At the same time he
had to be nimble and
quick, for there were legislators
who had done a lot of homework on the
banking
problems...There was dignity, there was an apparently
inexhaustible
resourcefulness, a flash of good humour
when the moment required it, sometimes
the measured
reply, never a retreat. The long duration of these
appearances, the
wide variation in the quality of the
questioning, the repetitiveness in the
answers, and
the perennially difficult problem of dealing with
half-truths and
misconceptions required enormous
concentration and patience...What helped sustain
him
was his recognition that most of the questioning was
inspired by the
government's failure to deal
satisfactorily with the problems of
the
depression...An even stronger motivation for standing
up under extended
parliamentary committee fire without
bridling was Towers' compulsive drive to
straighten
out his questioners, to tell the truth as he saw it,
to counter
charges with the best arguments he could
muster. He accepted this task as almost
a holy
commitment. He worked at it; if his replies were to
have an impact, then
they had
to be simple and clear
and without holes. It was Towers the educator at
his
best."
-
Towers' principal response, in my reading thus far, to
the
complaint that a government with sovereign power
of monetary policy should have
given it to a private
monopoly, was that banks didn't simply have a key to
the
candy store. He continually stressed that when
banks create deposits they are
creating a liability
for themselves which they then have to protect
themselves
against in some way. The promissory note
of the borrower is only part of it;
they buy other
assets as well, using cash from depositors and credits
transferred
from other institutions. As a veteran
British banker and theorist put it
recently, banks
create money *for their customers*, not for
themselves.
-
____________________________________________________________________________________
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