> I don't know about the Soviet Union. However, there has been much
discussion
> lately from economic reform groups about the merits of borrowing from the
> Bank of Canada rather than from private lenders.
>
> As I understand it, the Bank of Canada would charge the government
interest
> comparable to a private bank. However, since the B of C is an agency of
the
> government, all that it earned in interest would go into the general
> revenues of the government, minus a small administration fee.
>
> Walter Stewart mentions this in a book published a few years ago (the
title
> of which escapes me), but for some reason our government seems to prefer
> enriching private or even foreign bankers.
>
> Victor Milne
It's not an idea which appeals to me at all. The preamble of the Bank of
Canada Act says that the role of the Bank "is to regulate credit and
currency in the best interests of the economic life of the nation, to
control and protect the external value of the national monetary unit and to
mitigate by its influence fluctuations in the general level of production,
trade, prices and employment, so far as may be possible within the scope of
monetary action, and generally to promote the economic and financial welfare
of Canada..." To do these things, it is absolutely vital that the Bank
remain at arms length from political influence. Government, like all
borrowers, must be subject to market tests. Making the Bank into the
government's money machine would, in my opinion, be an absolute disaster.
Ed Weick
