| Subject: | Re: [socialcredit] Elaboration--Re: Question for Martin | | Date: | Friday, November 19, 2004 00:50:28 (-0800) | | From: | Joe Thomson <thomsonhiyu @....ca>
|
(Martin Hattersley wrote:-) 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.
----------------------------------------------------------
Thanks for your reply, Martin. While I suppose hindsight is always 20/20,
and we of today can only go by what was recorded of the events of that
period, I personally think Douglas may well have been a far better
'politician' than perhaps he's ever been given credit for.
For it seems to me that had his advice been followed Social Credit would
have had the Banks 'between a rock and a hard place'. To refuse what he was
proposing, they would have had to make public the reason. And when that
proposal clearly didn't affect their 'cash position', nor leave them
'out-of pocket', (since they were to be fairly well compensated for the
services they were being asked to provide), nor bring Provincial
interference into the Federal realm of regulating the administration of
their business, what grounds could they have had for refusing?
For Douglas's proposal would surely have been a great benefit to reviving
the moribund Alberta economy, which in turn would have (supposedly) been of
great benefit to the Banks as well. That is, if one looks at it from the
perspective of a prospective increase in the actual financial services they
say they are there to provide as their primary reason for existence.
To turn down the proposal on the grounds that there wouldn't be enough
profit in it for them, or for some other lame excuse, at a time when other
business and farm profits were virtually non-existant, would have further
incensed an already largely hostile public against them. It would have been
proof positive of the anti-social nature of the existing "Monopoly of
Credit", and would they have wanted that to be further revealed?
I think when it's looked at from this angle, Aberhart, despite what were
probably the best of intentions, really 'blew it'. And it was Douglas who
understood the ''art of the practical" far better than he did.
-----------------------------------------------------------
>
(Martin)> 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 seem to recall one passage in "The Alberta Experiment" that seems to
indicate Douglas wasn't too enamoured of the "Credit House" idea, or think
it was particularly necessary. In any case, there's no doubt the Alberta
Treasury Branches proved to be a great boon to Alberta.
---------------------------------------------------------
(Martin) >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
> sale!
---------------------------------------------------------
I know what you mean, Martin. As one who has spent most of my adult life in
the sawmill and lumber business it always amazes me when I hear all the
hand-wringing about the ''inaffordability'' of housing being blamed on "the
high cost of lumber." I've often wondered what would the pundits would say
if they ever stopped to think that the average realty company commission now
exceeds the total price of all the lumber in most modern homes? (Hope
there'll be no objections to that little 'off-topic' interlude!)
Joe
----------------------------------------------------------
>
>
> 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 ?
> > Joe
> >
> >
> >
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