James Coyne
James Elliott Coyne was a significant figure in Canadian economic history, born on July 17, 1910, in Winnipeg. He pursued his education at notable institutions, including Ridley College and the University of Manitoba, before earning degrees in jurisprudence and civil law from Oxford University. During World War II, Coyne served in the Royal Canadian Air Force, after which he began his distinguished career at the Bank of Canada in 1938. Rising through the ranks, he became the bank's governor in 1955, a role in which he was known for advocating tight fiscal policies and managing inflation, leading to a notable rise in interest rates.
Coyne's tenure was marked by conflicts with the government, particularly during the "Coyne Crisis," where his disagreements with Prime Minister John Diefenbaker culminated in a public battle over his resignation. This strife ultimately highlighted the importance of central bank independence in Canada. Coyne's refusal to resign under government pressure and the subsequent legislative debate solidified the Bank of Canada's autonomy from political influence, an enduring legacy in central banking practices. In his personal life, Coyne married artist Meribeth Stobie Riley and had two children, living to the age of 102 before passing away in 2012.
Subject Terms
James Coyne
Governor of the Bank of Canada
- Born: July 17, 1910
- Birthplace: Winnipeg, Manitoba
- Died: October 12, 2012
- Place of death: Winnipeg, Manitoba
Contribution: James Coyne served as the second governor of the Bank of Canada from 1955 to 1961. He is remembered primarily for what is known as the Coyne Affair or the Coyne Crisis, a controversial dispute with Prime Minister John Diefenbaker and Finance Minister Donald Fleming over economic policy. Because of the affair, Coyne was named the Canadian Newsmaker of the Year for 1961 by the Canadian Press.
Early Life and Education
James Elliott Coyne was born in Winnipeg on July 17, 1910, to Edna and James Coyne. He attended Ridley College, a private boarding school, and graduated from the University of Manitoba in 1931. Coyne then studied at Oxford University, where he received a bachelor’s degree in jurisprudence and a bachelor of civil law in 1934. During World War II, Coyne served in the Royal Canadian Air Force (RCAF).
Economic Career
Coyne began working as a researcher at the Bank of Canada in 1938, three years after it was created. He then worked at the Central Mortgage Bank and the Foreign Exchange Control Board, as well as the Wartime Prices and Trade Board. He was also employed at the Canadian embassy in Washington, DC.
Returning to the Bank of Canada after his service in World War II, Coyne became executive assistant to the bank’s first governor, Graham Towers, in 1944. He was also securities adviser from 1946 to 1949 and served as deputy governor from 1950 to 1954. Coyne eventually succeeded Towers as governor and president of the Industrial Development Bank in 1955, a position he held until his resignation in 1961.
During Coyne’s governorship, the Bank of Canada became increasingly influential in the Canadian economy and had a prominent role in managing inflation; Coyne’s governorship saw a record rise in interest rates. Coyne’s economic views often came into conflict with those of the government and mainstream economists. He made many speeches about Canadian economic policy, arguing that the country needed to tighten its spending.
Coyne is most remembered for the Coyne Crisis, during which these conflicts with government officials and economists reached a public climax. Having clashed with Prime Minister John Diefenbaker’s Progressive Conservative government, Coyne was asked by Finance Minister Donald Fleming to resign in May 1961, seven months ahead of the end of his term of office as bank governor. Coyne, however, refused to submit his resignation, asserting that the integrity of the bank, as well as his personal integrity, demanded that he continue as governor according to the terms of the office rather than the will of the government, which he saw as having a lesser claim in the matter.
In response, the Diefenbaker administration submitted a bill to the House of Commons declaring the position of the governor vacant—in essence firing Coyne through the legislature. Following a bitter debate that garnered national attention, the bill went to the Senate, where it was defeated by a Liberal majority. In July 1961, Coyne decided to resign, having had his name cleared by the legislative debates.
Despite his resignation and the ongoing controversy of some of his economic views, Coyne emerged from the affair with his reputation intact. Some observers felt that the affair weakened the government and had a detrimental effect on federal elections the following year. Perhaps most significantly, the Coyne Crisis resulted in the lasting independence of the Bank of Canada, which has been shielded from political influence since these events. The role of central bank governors as independent—and often oppositional—voices within national politics worldwide is to some extent modeled on the Coyne precedent.
Personal Life
Coyne married a young widow and artist, Meribeth Stobie Riley, in Winnipeg on June 26, 1957. In addition to Riley’s three children from her first marriage, the couple had two children, Andrew and Susan. In 2012, Coyne was invested with the Order of Manitoba. Later that year, on October 12, he died in Winnipeg at the age of 102. At the time of his death, he had eleven grandchildren and four great-grandchildren.
Bibliography
Macfarlane, Daniel. “The Value of a ‘Coyne’: The Diefenbaker Government and the 1961 Coyne Affair.” Past Imperfect 14 (2008): 120-42. Print.
Martin, Sandra. “James Coyne: A Father, Rhodes Scholar and Bank of Canada Governor.” Globe and Mail. Globe and Mail, 13 Oct. 2012. Web. 1 Aug. 2013.
Olive, David. “Centenarian James Coyne’s Legacy Endures.” Toronto Star. Toronto Star, 17 July 2010. Web. 1 Aug. 2013.
Powell, James. The Bank of Canada of James Elliott Coyne: Challenges, Confrontation, and Change. Montreal: McGill-Queen’s UP, 2009. Print.
Rollason, Kevin. “‘A Man of the Highest Principle.’” Winnipeg Free Press. Winnipeg Free Press, 14 Oct. 2012. Web. 1 Aug. 2013.
Siklos, Pierre L. “Revisiting the Coyne Affair: A Singular Event That Changed the Course of Canadian Monetary History.” Canadian Journal of Economics 43.3 (2010): 994−1015. Print.
Sinclair, Gordon, Jr. “The Man Who Refused to Go Quietly.” Winnipeg Free Press. Winnipeg Free Press, 17 July 2010. Web. 1 Aug. 2013.