Mr. Rodney Adamson (York West):
Mr. Speaker, I wish to make only two brief observations about the bill. The first is in connection with the bank's right to buy gold in coin or in bullion form, as of course it has the right to buy silver in coin or bullion form or, of course, nickel and copper coins.
I want to mention this because should an open bullion market be established in Canada, nothing would preclude the Bank of Canada from entering that market and buying either bullion or coin on the open market, just as at the present time it buys securities of the Dominion of Canada and I presume of
Bank of Canada Act
other nations. I do not know whether it buys United States securities, but I would imagine that it would at times buy shortterm American securities. So if a bullion market were established it would not mean that bullion gold would be hoarded, because of this provision of the Bank of Canada Act.
I want to make one further observation on the question of the definition of foreign exchange. Acceptable foreign exchange to the bank can be boiled down to currency convertible on demand at a fixed price into exportable gold. That is the sole qualification of a convertible currency. Let us assume that even if Russian rubles were freely convertible into gold at a fixed rate they would be acceptable as foreign exchange under the meaning of this act.
I think that shows more clearly than perhaps anything I could say the importance of the restoration by Canada of gold as a medium of exchange, and the facilitation of all measures by which currencies can be brought within this definition of acceptable foreign exchange as soon as possible, that is, convertible at a fixed rate into exportable gold.
I think that shows that gold is the one common denominator which is acceptable as a medium of convertibility. I would, as I shall on another occasion, urge that all possible steps be taken to bring gold out of the national hoards where it is now and use it as a measure to facilitate convertibility of all currencies. Canada in this regard is in a unique position to take the lead.
Topic: BANK OF CANADA ACT
Subtopic: AMENDMENTS RESPECTING MANAGEMENT, EXCHANGE, TO PERMIT SHORT TERM LOANS ON INSURED MORTGAGES, ETC.