|Subject:||Re: [socialcredit] Elaboration--Re: Question for Martin|
|Date:||Thursday, November 18, 2004 16:57:46 (-0700)|
|From:||martinh <martinh @....net>
|In reply to:||Message 296 (written by Joe Thomson)|
I think the reply Aberhart would give to Douglas's suggestion of getting a
Bank to cooperate in issuing "credit" in this rather unconventional manner
is that this would be interfering with Federal laws on Banking - as well
as the fact that the bankers would be unlikely to cooperate with such a
suggestion, as undermining the whole way in which the banking system
operates. Politics is "the art of the practical", and Douglas was a better
engineer than politician.
The idea of creating "credit houses" in the end became the Provincial
Treasury Branch system, still highly respected throughout the Province. I
believe it was a thoroughly successful Provincial experiment, along with
the fostering of Credit Unions - even if in each case, the credit created
still was by way of loan. One spin off of thess institutions was that they
provided effective competition to the banks, so breaking their monopoly as
credit suppliers to the people and government of the Province. I still
remember the dismay caused to my bank manager - indeed his sense of
betrayal - when at the height of high (18%) interest in the early 1980's,
I financed purchase of a number of dictating machines for my office at 6%
(less patronage discount) through the Social Credit "Progressive Savings
and Credit Union Ltd."
Something like the way realtors behave when you sell your house by private
Martin Hattersley: 1970-10123-99 St.
Edmonton, Alberta, Canada T5J 3H1
On Tue, 16 Nov 2004, Joe Thomson wrote:
> Bill Ryan has asked me to elaborate on this part of my question to Martin:~
> "Douglas seemed to be of the opinion that the
> Provinces, while constitutionally unable to issue
> their own 'currency', very definitely controlled
> their own 'credit'."
> Previously Martin had written:~ "Almost from the moment of Aberhart's election, there was disagreement
> between himself and Douglas as to the political course to be taken,
> arising from the difficulty that Aberhart had no constitutional powers
> over banking and currency, such legislation being disallowed, and the
> Douglas schemes requiring such powers." (emphasis mine.)
> I think the record seems to show that Douglas, himself, didn't propose anything that indicated he was unaware of the limitations to Provincial powers. It will be remembered that prior to the Aberhart Social Credit government's election, Douglas had been engaged as "Reconstruction Advisor" to the Government of Alberta by the United Farmers of Alberta Party that then formed the government. And he made his 'First Interim Report" to that government.
> In that report, Douglas stated, " The power of printing legal tender money, or that which passes as money, undoubtedly belongs to the Dominion, and has now been delegated to the Bank of Canada. But it cannot be contended that this disposes of the question, since, if it did, banks would be prohibited from issuing cheques, which quite unquestionably pass as money, and are not Dominion or Bank of Canada documents."
> "Further than this, matters of property and Civil Rights are the exclusive domain of the Provincial Government, and it is difficult to contend that it is not a Civil Right for an individual to write an order upon himself calling for the delivery of a portion of his property. Such an order is effective demand. Further than this, the Provinces are specifically granted the right to raise loans upon the sole credit of the Province. Such loans are raised in money or credit instruments, and have to be repaid in money or credit instruments, and the interest paid upon them has to be paid by credit instruments. Therefore, if it be contended that the Provinces have no power to issue credit instruments, the phrase "the sole credit of the Province" has no financial meaning, although it may have a realistic meaning."
> A little further in that Report, Douglas goes on to say, " It is clear, and all experience confirms this view, that if credit instruments can be issued under the sanction of the constituted legal authority, in this case the Province, no difficulty arises in obtaining their universal acceptance within the range of the jurisdiction of the governing body."
> And it seems that the 'credit instrument' he was referring to was a type of 'cheque'. For his first advice to Aberhart, which Aberhart chose to ignore, was for the Alberta Government to seek a 'creation of credit' from a chartered Bank on behalf of the Province which would be the property of the Government, not a 'loan'. And which would be accessible by specially marked 'cheques', which couldn't be 'cashed' in the ordinary sense, only deposited in the issuing bank. For its services that Bank would be paid a one time fee for the 'credit creation', and further fees as necessary for additional bookkeeping to administer it The special cheques themselves were to be popularised by giving them a 5% premium in payment of taxes, thereby encouraging their exchange for regular cheques payable at any other bank without restriction.
> Now it is a very interesting speculation whether this would have avoided all the difficulties that the Aberhart government found itself beset with when it chose to go a different route. And also whether such a scheme would have actually worked, had one of the chartered Banks actually been approached and agreed to co-operate.
> But back to my original question. Douglas contends, in a later letter to Aberhart, "As I see it, the raising of Loans by the Provinces without protest by the Federal Government in the past was an admission that the Provinces controlled their real credit, and a denial of their right to issue financial credit is a denial of their right to do their own bookkeeping."
> Now there seems to be no doubt that Provinces can raise loans on the ''sole credit of the Province'' still. Even abroad, since much Provincial Government financing has been raised in New York, or London. Nor is there any doubt they can do their own bookkeeping. And even, as BC's WAC Bennett did by shifting direct Provincial debt into 'contingent liabilities', establish their own accounting conventions. So was any of the Alberta 'Social Credit' legislation that was disallowed or declared unconstitutional by the Supreme Court done so on grounds other than that of Provincial interference with Banking administration and policy, an exclusive Federal purview? In other words, if there was no legislative impingement into areas of Federal jurisdiction, and the public of a Province agreed to it, is there any LEGAL constraint preventing the development of Provincial ''Social Credit" using Provincially issued 'credit instruments' somewhat in the manner Douglas originally had
in mind ?
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