A portrait of the stock exchange president who gets the business partly by giving the business to whatever he disagrees with — especially Social Credit



A portrait of the stock exchange president who gets the business partly by giving the business to whatever he disagrees with — especially Social Credit



A portrait of the stock exchange president who gets the business partly by giving the business to whatever he disagrees with — especially Social Credit


THE MOST UNPREDICTABLE FACTOR in the recent election was the critical Quebec vote. In the last three weeks of the campaign most pollsters and political scientists cut back their estimates of Social Credit strength from as high as fifty to something close to the eighteen seats the Créditistes actually won. From all possible reasons for the party’s drastic last-minute decline, Réal Caouette on election night singled out as the chief agent of his downfall Eric Kierans, president of the Montreal and Canadian Stock Exchanges, whom he accused of being in the pay of the communists. Kierans, a capitalist by conviction as well as profession, said mildly, "I think he's a little upset.’'

Before he launched a vigorous one-man campaign against what he calls the “economic nonsense” of Social Credit in February, most people outside Quebec had scarcely heard of Kierans. Although his part in turning back, the tide of Social Credit can't be precisely measured, some observers think his intervention changed the whole character of Caouette’s campaign. They say that Caouette, deflected by Kierans from his positive, evangelical crusade of 1962, took a defensive position in which he revealed himself as a somewhat vindictive politician rather than the apostle of a new economic faith, and this undoubtedly cost him votes. Kierans opened the eyes of FrenchCanadian businessmen who reacted by pouring funds into Liberal committee rooms, and he may have helped to prod Premier Jean Lesage into throwing his weight into the campaign.

Four days before the election Kierans told a Toronto audience, “I'm all out of controversial things to say,” but nobody expects him to stay that way. Of his many talents — as economist, businessman, professor, administrator — none is more highly developed than his genius for controversy. He stirs responses ranging from admiration through amused affection to indignation, but no or.e is indifferent to him. André Laurendeau, editor of Le Devoir, calls him, “the least conservative businessman I have ever met," and novelist Hugh MacLennan says, “He’s the brightest thing that’s come into Montreal." A management consultant says. “You follow his progress because he’s a weathervane,” and one of the members of his own stock exchange complains testily, “Mr. Kierans is a university professor who doesn't know anything about the stock market.” Introducing head table guests at a recent dinner in Montreal, investment dealer J. P. Ostiguy asked his listeners not to applaud between introductions. They obeyed until Kierans’ turn, when they burst into a two-minute ovation.

In his three years as president of the two Montreal exchanges (the Canadian Stock Exchange shares the Montreal exchange’s staff but has its own board of management, trading floor and separate list of more speculative stocks), he has never allowed the conventions of the financial community to restrict his freewheeling style. Beyond the fact that he wears

a blue suit, drives a grey Cadillac and has been president of the eminently respectable Montreal Amateur Athletic Association, Kierans fails to conform to any preconception of president of the MSE. He lives quietly in the Montreal community of Hampstead with his wife, his son who has just taken his master's degree from the University of Chicago, and his daughter who is still at McGill. You would expect him to be an English or Scots Canadian, probably heir to one of the nineteenth - century Montreal fortunes that brought the exchange into existence. Kierans is an Irish Canadian and what money he has he made himself.

You'd expect him to have a profound sense of the Importance of capital, the mystique of high finance. Kierans cares so little about cash for its own sake that he left the business world as soon as he was making a comfortable living, and went back to college. You'd expect him to conduct business exclusively in English, as Montreal financiers have been doing for a hundred years. Having learned French in a crash program of private instruction, records and diligent reading of the French-language papers, Kierans speaks to French Canadians in their own language and has just begun to write his own speeches in French instead of having them translated from English. You would expect him to cultivate discretion to the point of inapproachability. Kierans will talk to anybody, any time.

The fact that the presidency of an exchange is a new kind of job gives Kierans a good deal of latitude. Until 1956, when both Montreal and Toronto followed the lead of the New York Stock Exchange and hired a full-time salaried president, the exchanges were run by committees of members. Montreal's first president, Henry G. Norman, had been an accountant and diplomat; Kierans is emphatically neither. General Howard D. Graham, former army chief of staff who now heads the Toronto exchange, helps direct its internal affairs;

Kierans, who can't stand routine, leaves virtually all administration to his subordinates.

As he explains, “My job is to appear for the stock exchange in public and to persuade people to use it. I'm trying to take an institution and bring it into line with the present.”

This sounds orthodox enough until you realize that the institution, staid and predominantly Anglo-Saxon, has little in common with the rising tide of French - Canadian nationalism and new economic awareness. The investment dealers who hired Kierans trust his judgment, but they sometimes wish he wouldn’t rock the boat so violently. A broker told me, “There’s no doubt that the fellow is dedicated, but whether his impact on the affairs of the exchange is good or bad remains to be seen.

Getting up on a public platform and blasting off at Social Credit doesn’t help us to reassure investors. A financier’s job is looking after people’s money.”

Kierans’ key speech, an address to members of the Club Richelieu at Chicoutimi on February 27, was no rabid denunciation but a lucid and closely reasoned exposition of the fallacies in Social Credit economic theory. If you print more money in order to pay social dividends and cancel debt, Kierans explained, you rob the Canadian dollar of any real value, render

government bonds w .he Canadian businessman ir of a child

offering Monopoly id foreigners

armed with genuine currency, ^..’employment, depression and economic chaos .would result, he said, if anyone tried to put the Social Credit monetary system into practice.

The only inflammatory thing about the speech was the fact that Kicrans made it. Caouette countered with a vilification of Kierans as a “shark of high finance” with a personal salary of $150,000 (Kierans makes less than $50,000). Caouette told a Montreal Star reporter, “1 only wish Kierans would make statements like that in Quebec City and eastend Montreal.” Some of Kierans' colleagues feared he had made one speech too many already. but after some early huffing in St. James Street, opinion in English-speaking Montreal began to swing in behind Kierans. As the Gazette pointed out, “If Kierans hadn’t done it, who would?’’ André Laurendeau of Le Devoir told me, “He made a good target because of his function but he was very courageous to express his opinion. He’s a healthy influence for the province.”

Within three weeks, colleges, labor unions and all three of the other political parties asked for thirty-seven thousand copies of the Chicoutimi speech to distribute across the country. 1 heard rumors that the Liberals had been first disturbed by Kierans’ intervention, then gratified when, on the weekend following the speech, money began to come in from unexpected sources including French-Canadian businessmen. Quebec Liberals who criticized the inept early campaign were relieved when Premier Lesage at last plunged into the campaign in mid-March by urging his province to vote a stable Liberal government into Ottawa. In a speech to Laval students a month earlier, Kierans had declared that Lesage must take a strong hand in federal affairs. Unless Lesage could persuade Ottawa to lower tariffs and taxes, the economic regeneration he planned for Quebec would be impossible.

Why did Kierans speak out? People who know him well are convinced that he acted less from any desire for private or political advantage than from a sense of public responsibility plus an unquenchable urge to fight dragons. Though the Chicoutimi speech was effectively timed, it wasn’t just an impulsive foray into the arena on the eve of election. He had been quietly gathering material since October, waiting for a chance to deliver it in the heart of Social Credit country.

He says, “You can’t just roll over and play dead all your life. You owe it to people to tell them what your own position is. For another thing, reporters told me I helped them to ask Caouette more pointed questions, and this broadened the area of doubt. Now the results arc in. I’m very pleased that some of Social Credit's teeth have been pulled.”

Kierans believes that the real danger of Social Credit lies not in the possibility that the party might someday have the power to put its monetary theory into practice, but in the much stronger possibility that it may be used as a hammer to break up Confederation.

Kierans, a natural rebel and a devout Roman Catholic, is highly sensitive to the shifting feel-

ings of French Canadians. He says, “Most of the disenchantment in this province is very soundly based. Separatism is openly discussed, and now that it’s achieved respectability it’s a lot more dangerous. Social Credit here is simply a protest vote bolstered by a lot of extravagant promises. If you want to get all the advantages out of a separatist threat and still don’t want to separate, what better to do than vote Créditiste? On the brink of separation you can draw back and say you were confused by Social Credit monetary policy and didn't understand what you were voting for.” The ideas come tumbling out as he stoops forward earnestly. “Meanwhile the Créditistes will come back from Ottawa complaining that they can't keep their promises because they can't get anywhere with the federal government. They’ll take over the separatist movement and then it will be wildly dangerous. They have an orator in Caouette. a theorist in Grégoire, an organizer in Marcoux — and this is all they need.”

To French Canadians the fact that le président de la hoarse has thrown himself wholeheartedly behind their aspirations still seems almost incredible. The stock exchange has always been a stronghold of the Anglo-Saxons whom Gérard Pelletier, editor of La Presse, calls, “the emigrants of the interior.” Pelletier says, “They live here but they don't belong here. They like our restaurants and pretty women but they’re disgusted by our politics. The remarkable thing about Eric Kierans is that he feels interested in. and responsible for, the affairs of Quebec in the same way that we do. He’s a non-conformist who refuses to fall in line with the big interests.”

Kierans is convinced that Quebec’s salvation lies in economic revival, in such things as transatlantic trade, the development of industries like steel, and the education of young French Canadians not only able but determined to shape federal and provincial policies. At Laval last February he told commerce students that Quebec should be sending to Ottawa not ministers of justice but ministers of finance and trade and commerce. At the University of Montreal, where he teaches economics, he quietly gives his salary to a bursary for French Canadian students in economics.

Even his pronouncements on national policy are, according to Kierans’ admittedly broad interpretation of his job, directly related to the revitalization of Montreal’s stock exchange. Some Montreal brokers w'ish he hadn't been so outspoken in his criticism of the way Conservatives handled the Coyne affair and carped over the Common Market, but they allow that his repeated demands for freer trade, lower taxes and the abandonment of protective tariffs for weak industries are reasonable enough.

He still wants Britain and eventually even Canada to join the Common Market as the first step toward an Atlantic trading community in which Canada would be forced to produce raw and manufactured materials at competitive prices for a w'orld market. He says, “At this stage economic union with Europe makes more sense than economic union with the United States. American research is paving the way for more and more synthetic substitutes for the natural resources we’ve been selling them. The

development of the lower St. Lawrence and Quebec depends on increasing trade between Europe and Canada.”

Kicrans also has to work at the everyday part of his job. rebuilding the eroded Montreal exchanges. In recent years Toronto has handled almost seventy percent of Canada's stock exchange transactions. (Although the average value of each share traded in Montreal is double the Toronto figure.)

Since Kierans took over the MSE and CSF. in April. 1960. their combined share of the nation's business has stayed about the same but their trading has increased from less than four hundred million dollars in I960 to more than eight hundred million in 1962.

Kierans' rebuilding campaign for the Montreal exchange has included e n c o u r a g i n g French Canadians to put their money in equities. instead of their more accustomed bonds and mortgages, with such inducements as a monthly payment plan for buying shares on time, which Toronto considers too risky for investors and too expensive for brokers to service. This and other Kierans innovations have stirred almost as much opposition from the more conservative Montreal brokerage houses as from Toronto. But some of Kierans’ critics admit that it’s not so much the things he does they dislike, as the impulsive, provocative way he does them. One of them says, “He has more ideas than follow-through and some of the things he makes an issue of just aren't worth it. He enjoys trouble and he courts it.”

His admirers feel that his flair for drama is an important part of his real contribution, the creation of an atmosphere in which the exchange can w'ork with the new Quebec instead of pulling against it. A young financier told me, “Naturally the old mossbacks don’t like being told that the exchange is no longer a private club, but Kierans is making them readier to accept changes when they do come.”

Since his arrival Kierans has reshuffled the exchange staff to bring in bright men in their twenties and early thirties, most of them university graduates, many of them French Canadian. all of them Kierans’ passionate partisans. They told me, “He’s dynamic,” or “He’s wonderful, there’s no other word. What does he do? He doesn't do anything, that’s just it. He lets you get on with your owm job.”

Kierans has been exercising his peculiar talent for organization since 1945, when he formed a company called Canadian Adhesives which he still owns. As he got more and more interested in business problems, he left the glue business to itself and began graduate studies in economics at McGill. He later became lecturer and subsequently dean of commerce. His seven-year stint as dean was sometimes stormy but he won his chief battle against businessmen who wanted the commerce course changed from a fairly broad general education to a technical sales training.

People who marvel at Kicrans' ability to move smoothly from one kind of job to another naturally wonder when he'll switch to government.

“Interested in politics?” he says reflectively. “Right now I don’t think so. But if a challenge presented itself I don't know what I'd do.” Then, from the president of a stock exchange, a statement at once preposterous and characteristically honest: "I’m forty-nine, and 1 don’t want to spend the next fifteen years just making money.” ★