wrote:- ) Aberhart may well have attracted ridicule from the
or the discomforted for his stamped money.
the citizens of Worgle in Austria,
most certainly did not.
effects of their enlightened actions were there
all to see. In fact so successful were they that
drew down the wrath of their respective Central
(Private ) banks, as a contravention of their monopoly
replies:- ) Aberhart, and political
party ‘Social Credit’ everywhere, attracted lasting ridicule for imposing
that “Gesellist” based ideology. Which has precious little in common with ‘real’ Social
Credit. And that well-deserved
ridicule came from
people who were far from ‘ignorant’, or ones, (bankers), supposedly
‘discomforted’ in the manner you infer, Ken.
anything is clear, that whole episode is a perfect demonstration of the folly of
any ‘politician’ elected to ‘represent’ the ‘common
will’ believing he has been selected for his ‘uncommon intelligence’
in deciding what detailed ‘technique’ could best be used to achieve
an objective. Rather than concentrating on his proper
purview, clearly describing the ‘results’ that are desired by his
is for the ‘tecnician’.
when the ‘elected politician’ can generally demonstrate neither the technical training nor detail knowledge
necessary to determine the ‘means’ to the desired ‘end’.
Additionally, in the case of Premier Aberhart, there
is little doubt he initially
understood neither the ‘philosophy’ nor the ‘principles’
behind the ‘policy’ called ‘social credit’.
is believed that Aberhart, on becoming Alberta Premier,
and after failing to avail himself almost completely of Douglas’s many recommendations
and advice; details the “Government” of Alberta had hired him as “Chief
Reconstruction Advisor” to provide, (to the point where Douglas sought
early release from the two year contract
retaining his services), was influenced by the earlier, seemingly successful
issue of ‘scrip’ by the town of Raymond, as a temporary ‘cure’
for the then prevailing shortage of ‘money’. And
later, the additional hired advice of a ‘Gesellist’,
E S. Woodward, induced him to go the ‘Prosperity Certificate’
town of Raymond,
initially in an effort to keep their school open in the cash-strapped days of
the Depression when its residents couldn’t pay their taxes, resorted to
issuing ‘scrip’. This local ‘paper’
came to serve the same purpose of the then unavailable ‘banknotes’ comprising
official Canadian currency. But only because
the whole town was willing to ‘accept’ this scrip as a Canadian ‘money’
substitute. Taxes to the Town itself,
and municipal water bills, could be paid in it.
And those working for that municipality, teachers,
etc., would ‘accept’ it as their wages.
(Rather than being laid off, and getting nothing.) Local
commerce, which would have otherwise been more seriously impacted by the nation
wide ‘contraction of credit’ still manifesting itself
in a local ‘cash’ shortage, was able to carry on using this ‘scrip’.
Which was always ‘backed’ by local ‘goods
and services’. The entire scheme rested on the ‘faith’
Raymond’s residents had that they could overcome their problems. Aberhart came to
believe this success could be emulated on a larger scale, to restore ‘trade’
in the Province as a whole, ‘backed’ by its ‘resources’. All it took was ‘faith’.
the ‘faith’ that worked in Raymond on a limited, local
basis was not so certain to work on a larger scale. In a more complex, broader economy. The Alberta Government was basically ‘broke’;
it had no accumulated ‘foreign (Canadian, or any other national) exchange
reserves’ to purchase imports; there was no indication the Banks would
accept ‘Provincial’ scrip, (especially after the Aberhart Government had already defaulted on Provincial
bonds), and there was no indication any ‘wholesalers’ bringing in
goods from out-of-Province would accept it either.
had earlier advised how the prevailing shortage of money in circulation could
be alleviated using a system of ‘cheques’ drawn on ‘a
creation of credit’ administered by the Banks in a way that would not
have affected their operations or ‘cash reserves’. While still enabling
restoration of adequate ‘effective demand’, and also simultaneously
establishing a very important principle as to the public ‘ownership’
Aberhart had obviously not understood the concept, and/or
rejected the underlying importance of it out of hand. Instead, after Douglas
had ceased to issue advice to him (that was seldom followed in any case), he proposed to issue his Government’s own ‘money’
in the form of ‘Prosperity Certificates’. And to ensure this Provincial ‘scrip’
would ‘circulate’ and be used to ‘stimulate trade’, he followed the inane Gesellist
proposal of putting a tax on it of 1% per week.
Which had to be paid, if it could be paid, in already
short Canadian currency. This was
a necessary expense each week the ‘Certificate’ was held to
maintain its ‘par value’, and accomplished by buying another ‘stamp’
each week to affix to it.
‘problems’ with this proposal should be quite obvious. First, there
is no scope using this type of ‘disappearing money’ for any ‘savings’
or ‘investment’. It’s
a ‘hot potato’. It has to be
spent quickly or it loses its purchasing power. Hardly a ‘cure’
in any area already suffering a ‘shortage of purchasing power’.
to get any business to ‘accept’ them at all, the ‘Certificates’
needed to be ‘backed’ by Canadian currency. For which they could be exchanged after a
certain period had elapsed. ‘Resources’ just wouldn’t do in
the middle of a Depression.
the ‘Certificates’ couldn’t be used to make liquor purchases
at Alberta Government Liquor Stores, (virtually ensuring their unpopularity
with a great many who might’ve been otherwise more favourably disposed to
them!, nor could they be used to pay any Alberta Provincial taxes, except the
many ‘Social Credit’ Alberta MLAs and
Cabinet Ministers were reluctant to accept them even in ‘partial’
payment of their salaries. (Such a ‘public’ demonstration of ‘faith’
that didn’t go un-noticed!)
and probably the most serious problem of all, ‘consumers’ deeply resented
having to pay the ‘stamp tax’. And who could blame them?
Rather than being the popular precursor to Aberhart’s more comprehensive, but apparently also hugely
flawed form of ‘Alberta’
Social Credit, well over half the first issue of “Prosperity Certificates”
were cashed in for Canadian currency at the earliest possible moment. Only a minute fraction were
ever re-issued. It was an ill-conceived,
(though no doubt well-intentioned), scheme right from the start. And has had the lasting effect of making the ‘political’
name ‘Social Credit’ synonomous with “funny
money” ever since.