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Canada's Gold Holdings Increased
By the end of 1945, Canada’s holdings of gold and U.S. dollars had increased to US$1,508 million from only US$187.6 million at the end of 1941. (https://www.bankofcanada.ca/wp-content/uploads/2010/07/dollar_book.pdf) (https://canadagold.ca/wp-content/uploads/2022/03/gold-bullion-Canada-vancouver.jpeg) -
True Value of the Canadian Dollar $
By 1945, the “True” value of the Canadian dollar. The Bank of Canada maintained that, given the “limited use” of in convertible Canadian dollars and the small size of the market, prices were not necessarily an accurate reflection of sentiment towards the Canadian dollar
(https://www.bankofcanada.ca/wp-content/uploads/2010/07/dollar_book.pdf)
(https://cdn.corporatefinanceinstitute.com/assets/canadian-dollar-cad.jpeg) -
Super Vision of Banking (UK)
In 1946, the bank was brought into pubic ownership. The formal head of the Bank is the Chancellor of the Exchequer although, within the staff of the Bank, the Governor is the chief official.
(https://publications.gc.ca/collections/collection_2014/bcp-pco/CP32-51-1986-4-eng.pdf)
(https://images.pexels.com/photos/968299/pexels-photo-968299.jpeg?cs=srgb&dl=pexels-vectors-icon-355704-968299.jpg&fm=jpg) -
Canadian Dollar Revalued
With expectations of continued capital inflows, the Canadian dollar was revalued upwards by roughly 9 per cent against both the U.S. dollar and the pound sterling on 5 July 1946. (https://www.bankofcanada.ca/wp-content/uploads/2010/07/dollar_book.pdf) (https://cdn.mos.cms.futurecdn.net/fmPyvKDQniaggTVvioCcj7.jpg) -
The devaluation of 1946
Interestingly, when the official rate was
finally revalued on 5 July 1946, the in convertible
Canadian dollar, while also appreciating, did not
move up the whole amount. The free rate slowly weakened over the next few years, foreshadowing the devaluation of the official rate in September 1949.
(https://www.bankofcanada.ca/wp-content/uploads/2010/07/dollar_book.pdf)
(https://cdn.corporatefinanceinstitute.com/assets/devaluation-1024x741.jpeg) -
Suspension of U.S. Dollars...
The provision of U.S. dollars for Canadian direct investment abroad was also virtually suspended. Even with the intensification of exchange controls, Canada’s gold and U.S. dollar holdings declined to US$501.7 million by the end of 1947. (https://www.bankofcanada.ca/wp-content/uploads/2010/07/dollar_book.pdf) -
World Bank
On February 23, 1947, John J. McCloy as the Bank’s second President marked the start of true operations in the World Bank. The Bank was soon embarked on the preparation and execution of an important series of reconstruction loans to countries of Western Europe.
(https://documents.worldbank.org/en/publication/documents-reports/documentdetail/434131467990972593/the-world-bank-s-first-loan-may-9-1947)
(https://worldbank.emuseum.com/internal/media/dispatcher/765/full) -
Foreign Exchange Reserves Declination
Foreign exchange reserves declined from a total of $1,638.7 million to $814.2 million, with a low of $461 million on December 17, 1947, just after extensive direct controls on imports were introduced. The high rate of domestic capital and the strong influence of American prices were the main factors responsible for this.
(https://www.jstor.org/stable/j.cttq47h9)
(https://www.rochesterrealestateblog.com/wp-content/uploads/2015/08/Common-Issues-With-A-Bank-Appraisal-In-Real-Estate.png) -
Canadian Trade Balance Improvement
Canada’s trade deficit with the United States narrowed, and the U.S. Export-Import Bank established a sizable U.S.-dollar line of credit. Canada’s trade balance with other countries improve. By the end of 1948, Canada’s holdings of gold and U.S. dollars had doubled to US$997.8 million. (https://www.bankofcanada.ca/wp-content/uploads/2010/07/dollar_book.pdf) (https://dutchuncles.in/wp-content/uploads/2021/02/Feature-image_Balance-of-Trade-jpg-1920x750.jpg) -
The Case of the Frozen Bank Accounts of 1948
On June 20, 1948, a month after the termination of the British Mandate for Palestine, the new government of the new state of Israel ordered all the commercial banks operating within its territory to freeze the accounts of all their Arab Palestinian customers and to stop all transactions on all Arab accounts.
(https://www.belfercenter.org/event/history-money-palestine-case-frozen-bank-accounts-1948)
(https://www.dailypost.net/media/imgAll/2023September/account-frozen-20240928100544.gif) -
Milton Friedman's Argument
In a 1948 University of Chicago
debate with Donald Gordon, Deputy Governor of
the Bank of Canada, Milton Friedman(economist) argued that there was no particular reason why a small market should necessarily lead to a distorted price.
(https://www.bankofcanada.ca/wp-content/uploads/2010/07/dollar_book.pdf)
(https://www.cato.org/sites/cato.org/files/styles/aside_mobile/public/social-images/friedman.jpgitok=9awjHo1v)
