One really has to wonder about about dumbing down and
“idiocracy”. How does it happen and who is promoting
it, given explicit and official information to the
contrary? The Fed’s booklet on Modern Money Mechanics
has already been noted. Another source that makes the
same public information as old as most of us is
testimony to a Parliamentary committee by the Governor
of the Bank of Canada in 1939.
The context of that testimony is germane to the
subject matter of this forum.
The Bank of Canada was inaugurated 1935, a few weeks
prior to a general election in which the government
was decisively rejected and the new Parliament
included several members with a strong interest in
monetary reform. These included not only an almost
full slate of Social Credit members from Alberta (all
but two) and Gerald McGeer , a Liberal from Vancouver
who was influential with Mackenzie King, the returning
Prime Minister. By the time of that election, McGeer
was already famous internationally among monetary
reformers as author of The Conquest of Poverty and his
interpretation of Lincoln’s papers (which showed up
soon thereafter in a document published by the U.S.
Senate as a courtesy to one of its former members who
had participated in drafting legislation that founded
the Federal Reserve System).
Graham Towers had been recruited from the Canadian
banking community to head the new central bank, which
was originally owned by a consortium of banks. The
new government affirmed the creation, and in 1938
moved to nationalize it, acquiring all of the shares
from the original owners. At the end of that year,
officers of the Bank prepared an annual report for the
new owner. Receipt of it was acknowledged formally in
the House of Commons in February of 1939 and referred
to the Committee on Banking and Commerce for review
and recommendations. The Committee was called
together to begin its task on March 8 and reported
back on June 1, 1939. (The Eighth Report of that
Committee) The Minutes of Proceedings and Evidence
Respecting the Bank of Canada runs to 858 pages in 25
volumes, recording the proceedings of thirty sessions.
The expert witnesses were Graham Towers and Clifford
Clark, Deputy Minister of Finance. Most of the
content of the minutes is the grilling of Towers by
committee members, the most aggressive of which were
McGeer and a couple of Social Crediters. The occasion
was significant at least symbolically because as owner
of the Bank, the Government now had a direct interest
in the conduct of monetary policy. Certainly the
Committee took that as their task and bored right into
the subject.
As the first witness, Clark provided descriptive and
quantitative details about the Canadian money supply
and its development in decades prior to 1935. That
didn’t take long, and then Towers took the chair to
explain the field of credit and the role of banks and
banking. It is my impression from having read about
half of the minutes (painfully, on poor quality
microfiche) they should be made accessible more widely
as a virtual textbook of money and banking
fundamentals as they used to be.
Some exchanges between committee and Towers that bear
directly on the Test Question at issue:
Page 223
Question from Landeryou (SC from Lethbridge):
Ninety-five percent of all our volume of business is
being done with what we call exchange of bank deposits
—— that is, simply book-keeping entries in banks
against which people write cheques ?"
Towers: I think that is a fair statement."
Page 285
Question from McGeer: When you allow the merchant
banking system to issue bank deposits —— with the
practice of using cheques —— you virtually allow the
banks to issue an effective substitute for money, do
you not ?"
Towers: The bank deposits are actually money in that
sense."
Page 287
Question from McGeer: But there is no question about
it, that banks create that medium of exchange ? [I.e.
bank deposits]
Towers: That is right. That is what they are for.
McGeer: And they issue that medium of exchange when
they purchase securities or make loans?
Towers: That is the banking business, just in the way
that a steel plant makes steel.
One of the infrequently heard members
(McKinley)observes on p. 400 that “McGeer and the
social credit people are circling around ‘debt-free
money’”.
McGeer affirmed that his purpose was to persuade the
Committee that there is a costless (or at least lower
cost) way of mustering the money (finance) to get men
and materials into operation for important productive
activities. A question he kept coming back to: Why
should a government with the power to create money
give that power away to a private monopoly? And
especially, why should it then borrow from the banks
and pay interest?
Towers’ response to foregoing question: “Parliament
can change the way the banking system operates if it
wishes to do so.”
[Another researcher has excerpted the following:
The Canadian Constitution, Section 91 under Powers of
Parliament states:
"... the exclusive Legislative Authority of the
Parliament of Canada extends to all Matters coming
within the Classes of Subjects next hereinafter
enumerated; that is to say, —— ...
14. Currency and Coinage.
15. Banking, Incorporations of Banks, and the Issue of
Paper Money."]
I have copied below some comments about the 1939
hearings from a biography of Graham Towers written to
acknowledge his contributions as the 50th anniversary
of the inauguration of the Bank was approaching. The
author was a well-established Ottawa figure who had
worked directly with Towers in another context, and he
was given access to Bank staff and records for
research on the book. The tone of veneration in the
pages quoted are fully consistent with what I heard of
Towers from senior officers who had worked under him,
when I was an employee in the Bank in 1965 and 66. The
comments about the quality of Towers' performance in
the 1939 hearings are supported fully by my own
impression from the Minutes, before opening the
biography. The comments about McGeer are also fully
consistent with what I have learned about him and his
influence in the money reform literature over the past
few years.
Pages that follow are reproduced from the 1986 book by
Douglas H. Fullerton, Graham Towers and His Times
(Toronto: McClelland and Stewart). Pages 88 to 93.
The depression broadened interest in central banking
among students and businessmen, and the number of the
initiated gradually increased. Canada's continuing
economic troubles also created a new group that was
skeptical about all aspects of the conventional
approach to money creation. As Towers noted in a
speech to Queen's University students, the phrase
"sound money" came to be almost a form of reproach.
Towers argued that this attitude came about partly
because "during the worst years of the deflation, many
who should have known better deprecated any attempt to
improve the situation by monetary measures. 'No
tinkering with the currency! Sound money!' These were
their slogans. And so the very words have come to be
associated with the policy of reaction."
Towers had three particularly long appearances before
parliamentary committees, one in 1939, one in 1944,
and another in 1954. In 1939 he appeared before the
Commons Standing Committee on Banking and Commerce,
which had a principal goal of educating members of
Parliament and the public about the Bank. In his
appearances before the committee, Towers was soon
drawn into battle with monetary dissidents and
self-styled reformers, particularly those of the
Social Credit persuasion. He had already had
confrontations in private meetings with Premier
William Aberhart of Alberta, but at the 1939 hearings
he took on any member with questions to ask about the
workings of the monetary system - and there were many.
Towers' performance through the several months of
hearings was a tour de force. Bruce Hutchison
describes the scene vividly in The Far Side of the
Street. Gerald McGeer, a Liberal from Vancouver, had
begun as "an ignorant boilermaker” but made himself "a
King's Council, a Biblical soothsayer, a scourge of
Canadian politics, a piercing thorn in Mackenzie
King's side." Hutchison says McGeer "stumbled by
accident on the science of money. Inflamed by the
discovery, he perfected a fool-proof monetary system
of his own" - mostly based on the state spending more
money, but exercising direct control over all levels
of the economy. Hutchison's own "economic illiteracy"
led him to become an "unpaid press agent and
travelling companion" to McGeer - "a third-rate
Boswell to a second-rate Johnson." McGeer won a seat
in the 1935 general election as a Liberal. As soon as
he arrived in Ottawa, he made himself a pest about
monetary matters. He filled the pages of hearings on
banking with his unorthodox monetary views; he
cross-examined all the witnesses, and often tied them
in knots. That is, until 1939, when he confronted
Graham Towers. As Hutchison noted: Hour after hour,
day after day, [Towers] answered Gerry [McGeer], the
prosecutor, in such perfect diction that it could have
been published verbatim as a book. Gerry used his
blustering questions like a club. Towers' thrusts were
delivered with a rapier. A western giant and an
eastern giant-killer had met in death grapple while
the committee watched in admiring stupefaction but
without comprehension.
In 1949, F.C. Mears of the Montreal Gazette had this
to say about Towers' skill as witness: Most people who
have seen and heard Graham Towers in action agree he
conducts himself as a splendidly groomed human
machine. His parliamentary performances won't be
forgotten. The times he has appeared before the
banking committees of House and Senate, always in an
atmosphere heavily charged with political controversy,
if not acrimony, the Governor of the Bank of Canada
has been exceedingly effective. Back in 1939, when the
Bank of Canada was only four years old, he was obliged
not only to explain but also actually to defend the
institution. The rapid fire of questions and answers
on fairly intricate monetary questions, the magnitude
of the issues involved, and the prominence of the man
on the stand, made it mighty hard for party whips to
hold a quorum in the House. Towers could never be
trapped into exhibiting heat, could never be caught
off base. At the same time he had to be nimble and
quick, for there were legislators who had done a lot
of homework on the banking problems. With those who
really sought enlightening replies on the true
inwardness of the Bank of Canada, on what it could do
and what it could not do, Towers had no difficulty. .
. . There was dignity, there was an apparently
inexhaustible resourcefulness, a flash of good humour
when the moment required it, sometimes the measured
reply, never a retreat. The long duration of these
appearances, the wide variation in the quality of the
questioning, the repetitiveness in the answers, and
the perennially difficult problem of dealing with
half-truths and misconceptions required enormous
concentration and patience, and Towers found it a
wearisome business. What helped sustain him was his
recognition that most of the questioning was inspired
by the government's failure to deal satisfactorily
with the problems of the depression. As he noted, the
arguments of dissidents were "in reality, criticisms
of bad times; of unemployment and poverty; and it must
not be said that I believe in bad times simply because
I do not believe they can be eradicated by monetary
juggling." An even stronger motivation for standing up
under extended parliamentary committee fire without
bridling was Towers' compulsive drive to straighten
out his questioners, to tell the truth as he saw it,
to counter charges with the best arguments he could
muster. He accepted this task as almost a holy
commitment. He worked at it; if his replies were to
have an impact, then they had to be simple and clear
and without holes. It was Towers the educator at his
best.
--- Richard Cook <rickycook21@hotmail.com> wrote:
> It's part of the official dumbing-down educational
> policy. Check out the movie "Idiocracy."
>
> >From: "Keith Wilde" <keithwilde@sympatico.ca>
> >Reply-To: socialcredit@elistas.com
> >To: <socialcredit@elistas.com>
> >Subject: Re: [socialcredit] U.S. Economics Test
> >Date: Thu, 9 Aug 2007 22:49:09 -0400
> >
> >The sinister aspect is the possibility that these
> high school teachers do believe that one of these is
the right answer. That means someone told them so.
Who?
|
Re: [socialcredit]
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