Hon. Mitchell Sharp (Minister of Finance):

Mr. Speaker, it might assist the house if I were to report briefly on week end developments involving international financial arrangements.

The house will, I am sure, welcome the decisions announced yesterday in Washington by the governors of the central banks contributing to the gold pool. The governors supported the policy of the United States government in continuing to buy and sell gold at the existing price of $35 an ounce in transactions with monetary authorities. They expressed the belief that henceforth officially held gold should be used only to effect transfers among monetary authorities, and therefore they decided no longer to supply gold to the London market or any other gold market. They stated that as the existing stock of monetary gold is sufficient in view of the prospective establishment of the facility for special drawing rights, they no longer feel it necessary to buy gold from the market. They agreed that henceforth they will not sell gold to monetary authorities to replace gold sold in private markets.

The governors of the central banks contributing to the gold pool invited the co-operation by other central banks in the policies they had agreed on. The governor of the Bank of Canada has promised his co-operation, and I have assured him of the support of the government in this regard.

Further to strengthen the international monetary system, the federal reserve board of the United States announced yesterday an increase of U.S. $2,275 million in its "swap network" with other central banks and the Bank for International Settlements. The governor of the Bank of Canada announced that as part of this arrangement the reciprocal credit facility between the Bank of Canada and the federal reserve system has been increased from U.S. $750 million to U.S. $1,000 million.

With the leave of the house I wish to table two press releases I issued last night, and one issued last night by the governor of the Bank of Canada, as well as the communique of the gold pool issued in Washington, to which they refer.

Mr. Speaker:

Order. Does the minister have leave to table these documents?

Agreed.

Mr. Lewis:

Print them in Hansard.

Mr. Sharp:

Mr. Speaker, it has been suggested that these releases might be printed in Hansard, and this might be convenient to the house.

Mr. Speaker:

Is this agreed?

Agreed.

[Editor's Note: For texts of documents referred to above, see appendix.]

Hon. Robert L. Stanfield (Leader of the Opposition):

Mr. Speaker, I know we are all pleased with the progress that was made over the week end by the various central banks meeting in Washington with regard to quietening down the international monetary crisis, and it is most interesting to hear the report of the Minister of Finance with regard to the measures that have been taken.

However, I think it is very clear from what the Minister of Finance has said, and from what has been stated publicly, that the measures so far taken, that is with respect to the problem of gold, will not of themselves supply the degree of international liquidity required to support the growing volume of international trade, and these measures must be followed by other measures such as increased drawing rights from the I.M.F. or something of that sort.

I hope the countries of the world, the Minister of Finance and the governor of the central bank will put to good use the time available to them, and I simply express the hope that the government of Canada will give every possible support to measures being considered for a further increase in international liquidity.

7712 COMMONS

Report on International Developments

Mr. Colin Cameron (Nanaimo-Cowichan-The Islands):

Mr. Speaker, I am sure all of us felt a certain relief that some at least temporary measure had been evolved. I stress the word temporary because I see, as I am sure a great many other people can see, some difficulties in maintaining the two price system as a permanent feature in the international monetary system.

[DOT] (2:40 p.m.)

However, it has bought time and I would hope the world monetary authorities will press forward with plans and proposals for the establishment of a new unit of international exchange which will once and for all relieve us of the incubus of gold that has been rather strangling the world for some centuries now.

Mr. R. N. Thompson (Red Deer):

Mr. Speaker, we would like to add our satisfaction over the fact that at least for the time being the price of gold has been steadied. I should hope the Minister of Finance would regard this as a temporary measure in the realization that there can be no relief to the problems of international liquidity or stability in so far as international settlements are concerned until some new approach can be initiated more in line with the need to meet world trading pressures. I would hope that in the next few months, which I believe is all the time that can normally be expected, some new base of international settlement can be arrived at.

Right Hon. L. B. Pearson (Prime Minister):

Mr. Speaker, I should like to table a communication addressed to the premier of Nova Scotia dated March 8 in respect of the steel industry in Cape Breton.

Mr. Speaker:

Has the right hon. Prime Minister leave to table this document?

Agreed.

Right Hon. L. B. Pearson (Prime Minister):

Mr. Speaker, I should also like to table a communication addressed to the premier of Quebec with regard to educational broadcasting.

DEBATES March 18, 19S8