----- Original Message -----
Sent: Friday, April 07, 2006 11:50 PM
Subject:
[socialcredit] "Funny Money" ~ Joe replies to Ken
(Ken
wrote:- ) Aberhart may well have
attracted ridicule from the
ignorant,
or the discomforted for his stamped money.
but
the citizens of Worgle in Austria,
and
Shwanenkirchen
in Bavaria
most certainly did not.
The
effects of their enlightened actions were there
for
all to see. In fact so successful were they that
it
drew down the wrath of their respective Central
(Private
) banks, as a contravention of their monopoly
rights
:-(((
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(Joe
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.
If
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 constituents. ‘Technique’ is for the
‘tecnician’.
Especially
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’.
It
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’ route.
The
Alberta
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’.
But
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.
Douglas
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’ of credit.
But
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.
The
‘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’.
Second,
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.
Third,
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
sales tax.
Fourth,
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!)
Fifth,
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.
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