Q.-I understand that to make money more readily available you buy government bonds?
Q.-I see by your balance sheet dated December 31, 1953 that, apart from government bonds and fixed capital, your assets are only about $90 million?
Q.-Supposing that in order to reach a certain objective you had to buy for more than $90 million worth of government bonds, how would you go about paying the amount in excess of $90 million which you would not have and which you had to pay immediately?
A.-In answering this question I might invite the criticism of Mr. Low on the one side and Mr. Macdonnell on the other, for we would pay the additional government bonds by crediting the amount in our books, namely to the deposit account of chartered banks. Whether or not we purchase the bonds from the banks is immaterial, this procedure can be repeated indefinitely.
Q.-Indefinitely. I thought so, but in an emergency would you not simply make a new issue of money? I suppose you would only have to make a book entry and then pay the bonds, thereby increasing the amount of money in circulation?
A.-Any book entry increasing chartered banks' deposits actually constitutes a new money issue.
Q.-That is creating money, is it not?
Is that plain enough, Mr. Chairman? Creating money with one stroke of the pen. You see how easy it is for chartered banks to obtain money. Should they lack any, the Bank of Canada will even be so generous as to make deposits for them. Then, the chartered banks will only have to multiply the
said deposit, which did not cost them a penny, to lend the whole amount to the people. It is as simple as that.
But, it is precisely that operation that the financiers have always withheld from the people. And Mr. Cannon continues:
Q.-During your testimony, you said that there is no limit to the amount of money which can be issued at any time?
A.-That is right.
Where is the control of the Bank of Canada, Mr. Chairman? Do you not think that it would be a good thing to set a limit? Here it is the chairman of the committee, mind you -it is the chairman of the committee who comes to the rescue of the governor of the Bank of Canada, short of arguments. Besides, the same thing occurs all through those inquiries, when the big shots are in danger, when the representatives of the people attempt to know more about the limits set by big finance. Listen to the last answer of the chairman of that time.
[DOT] (8:20 p.m.)
We already have fully discussed that matter.
That is the real shield of the present financial myth. The truth must not be revealed. Therefore, what is the part played by that chairman? I ask you. Is he not there to guarantee the freedom to both parties or to provide only the security of the big financiers? It is for you to decide. As for me, I have only read the evidence. It is strange anyway. And the saddest part of it is that these actions from the chairman occur on many occasions. For example, on page 128, when Mr. Tucker was questioning Mr. Towers:
Mr. Towers, you still hesitate at this time to tell us whether it was wise or not on the part of the federal government in the early thirties to deliberately let the deficits accumulate to make up for the purchasing power which was no more in the hands of the people?
Topic: SITTING SUSPENDED
Subtopic: SITTING RESUMED