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BACKSTORY: Remembering Louis Rasminsky

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Louis Rasminsky BANK OF CANADA PHOTO
Louis Rasminsky BANK OF CANADA PHOTO

The photographs of Prime Minister Justin Trudeau’s new cabinet that show men and women of diverse religions, ethnic groups and backgrounds is yet another example of how much Canada has changed during the past five decades.

Fifty-four years ago, John Diefenbaker’s cabinet members were white Protestant and Catholic middle-aged men. The one exception was Ellen Fairclough, the first woman Canadian cabinet minister. There was also Michael Starr, the first Canadian cabinet minister of Ukrainian descent.

That’s the way it had always been in Ottawa. Women and ethnic minorities, including Jews, were few and far between in positions of power in government or the bureaucracy. Though by the 1950s several provinces had passed progressive human rights legislation, eliminating blatant discrimination like anti-Semitic property covenants, the upper echelons of Canadian society generally remained closed to anyone but members of the country’s Anglo establishment.

In 1961, however, Diefenbaker made one truly enlightening appointment. He selected Louis Rasminsky, a brilliant Jewish banking and finance expert, as the third governor of the Bank of Canada, a position he held until 1973.

READ: Emerson Swift Mahon – Canada’s first black Jew

The Diefenbaker government had been embroiled in a nasty public feud over monetary policy with Rasminsky’s predecessor, James Coyne, who had resigned. Rasminsky was the deputy governor and Canada’s key player on the International Monetary Fund. He was the obvious person to replace Coyne. Still, in an era when there were no Jewish executives at Canada’s chartered banks, when restrictions on hiring Jews in various professions persisted, and when social clubs had gentile-only membership rules, Rasminsky’s appointment was fairly remarkable.

Rasminsky, who died in 1998 at the age of 90, was born in Montreal. His father’s family had its roots in Poland and his mother came from a prominent Jewish family in St. Catherines, Ont. As a young man, Lou, as he was called, was a committed Zionist and involved with Young Judaea. The Rasminskys moved to Toronto, and in 1925 Lou graduated from Harbord Collegiate. A stellar student, he was his class valedictorian. He continued his education at the University of Toronto. When he did not win a graduate scholarship to Cambridge, one of his professors convinced a wealthy member of the Toronto Jewish community to create a new scholarship. Owing to that financial support, Rasminsky was able to study at the London School of Economics, an opportunity that changed his life.

In 1930, when he was only 22 years old, he beat out 300 other candidates and was hired by the League of Nations as an economist. As he later told the story, upon receiving the appointment he cabled his girlfriend, Lyla Rotenberg, in Toronto: “Have accepted job League of Nations at 13,700 Swiss francs [per year]. Will you marry me?” She answered: “What is the exchange rate of the Swiss franc?” The couple soon married, though their son, Michael Rasminsky, has said that this oft-repeated anecdote is “apocryphal.”

Rasminsky eventually left Geneva and joined the nascent Bank of Canada in 1939. While Rasminsky was a star at the bank, particularly after World War II when he played a key role in establishing a viable international monetary system, his ascension to the position of governor was repeatedly blocked because of anti-Semitism. As his biographer, Bruce Muirhead, has noted, in the early 1950s, MPs asked in the House of Commons “Why it was that a Polish Jew was considered fit to manage the country’s foreign exchange?” And in official circles, it was known that the chartered banks did not want a Jew as head of the Bank of Canada. That prejudice held until Diefenbaker became prime minister.

Rasminsky insisted that the country’s monetary policy was ultimately the responsibility of the federal government, a significant clarification of the relationship between the government and the bank. Rasminsky tried to adhere to the “Keynesian prescription of maintaining low interest rates to promote job growth.” Near the end of his tenure in the volatile early 1970s, he was compelled to set interest rates higher.

Charming with a great sense of humour, Louis Rasminsky was, Muirhead has written, “a man of honesty, integrity, and purpose” and arguably the most “humanitarian” central banker Canada has ever had. 


Historian Allan Levine’s most recent book is Toronto: Biography of a City.