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Canada's future: More debt and bankruptcy... or financial reform and prosperity ?

on Saturday, 01 October 2005. Posted in Social Credit

On July 16, 2005, in Flesherton, Ontario, passed away a great Canadian, Mr. Ron Gostick, a great friend of our Movement, and advocate of Social Credit, after a long battle with cancer. He was two days short of his 87th birthday. For the past 59 years, he had been researching, writing, publishing (The Canadian Intelligence Service), lecturing in Canada and throughout the English-speaking world on the need for financial and economic reform in public policy. We offer our deepest sympathy to his wife, Wanda, and to his children.

In 2002, Mr. Gostick had published a 64 page booklet called CANADA'S FUTURE: More Debt and Bankruptcy?... or Financial Reform and Prosperity? which was expanded with two new sections in 2004 in a second edition now entitled Canada: Its Glorious Potential... and things I didn't learn in school. Here are large excerpts from this booklet, which of course quotes Clifford Hugh Douglas and Louis Even, the masters of the Social Credit philosophy:

by Ron Gostick

A financial bottleneck

For the last several years, our governments have been forced to cut back expenditures and budgets, and roll back staff and services in the field of education. Not because of any shortage of teachers, schools or supplies. Indeed, all the physical components essential for educating our young people have been present in abundance. The only element in short supply has been 'money' — 'financial credit.'

Likewise, respecting healthcare. A decade ago, before these cutbacks, we had no shortage of doctors, nurses, or other medical personnel; no shortage of hospitals (we were closing some!) or medical facilities. As a matter of fact, many of our young university trained personnel went seeking employment to the USA or abroad. But once again rollbacks and cutbacks in staff and services were imposed upon us, with resulting waiting lists. And once again, the only missing ingredient was a shortage of 'money' — funding. The bottleneck was purely financial.

What we must understand is that from a physical point of view, cutbacks in services and reduced living standards should be unnecessary and unacceptable in a resource-rich country such as Canada. After all, we're the richest country per capita in the world in natural resources, with an advanced and automated industrial machine which pours forth such an abundance of goods that we are often hard pressed to find enough foreign markets for our surpluses!

The creation and control of money

We're forever hearing – farmers, fishermen, businessmen, industrialists, professionals and general workers – talking about the money they are "making." A rather misleading statement, inasmuch as none of them, except bankers, actually "makes" money. They produce and provide goods and services, which they exchange for money. Indeed, anyone attempting to actually "make" money — whether coin, bills, or bad cheque — is likely to end up behind bars!

Perhaps the first thing we should do in this examination of the 'money' question is to define our terms.

'Money': What, precisely, is money?

Wealth – A Christian View, being the First Report of the Christian Doctrine of Wealth Committee of the Congregational Union of Scotland, presented in 1962, defined 'money' this way:

"The term 'money' may be used to describe any token or other device, with or without intrinsic value, that is acceptable as a claim or title to real wealth, that is to say, as purchasing power."

In other words,'money' may be defined simply as a 'claim' on goods or services — a 'claim' on real wealth, but not itself real wealth. Money is sometimes described as 'an exchange mechanism to facilitate the production and distribution of goods and services.'

Three kinds of money

We might note that there are three main kinds of money in general use:

1) Coins — that is, metal discs of silver, nickel, copper and alloys, of various design and denominations. These pass from hand to hand in transactions involving small amounts.

Note that gold coins which were extensively used many years ago have been replaced today by paper bills.

2) Bills — printed paper notes of convenient size with distinctive designs to indicate the various denominations.

Note that (1) and (2) are usually referred to as 'cash' or 'currency' — the terms used for tangible money which can be passed from hand to hand.

And 3) Deposit Currency or Credit — that is, a kind of money which does not exist in any tangible form, but consists of entries in bank ledgers which are transferred from one account to another by means of 'orders to pay' known as 'cheques' or, in recent years, 'credit card transfers.'

Basic principles

In discussing money and its function, there are a few of what I could call 'basic principles' that we should keep in mind, such as:

The purpose of society: To enable individuals in association to gain, by their co-operative efforts, results they desire which would be either more difficult or impossible to attain otherwise.

The purpose of the economic system: To deliver goods and services as, when, and where these are required.

The purpose of the monetary system: To facilitate the operation of the economic system in serving the purpose for which it exists.

We should keep in mind that our monetary system's performance must be judged by the extent to which it fulfills its purpose to the economic system to the satisfaction of society as a whole.

From poverty to war and prosperity!

During the 1930s, Canada, like so many other countries, suffered ten years of Great Depression and widespread poverty — not because of any shortage of production of goods and services, but because of a shortage of 'money', or 'claims' with which to exchange and buy the wealth we were producing. We lacked the purchasing power with which to claim that which we could produce in abundance. The goods were plentiful, and services available — but 'money' was scarce. And so we suffered poverty amidst plenty. What a travesty of common sense and justice! What an insult to a benevolent Creator!

And today, some may wonder how our grandparents managed to get out of that depression. Well, incredible as it sounds, the answer is: through war and destruction!

Graham Towers' revealing evidence

In 1939, Canada plunged into World War II. Many Canadians, including parliamentarians, wondered how we could possibly afford to wage war, when for ten years we couldn't find money to finance even a very meager peacetime existence.

But some of the answers came out when our federal Banking and Commerce Committee in 1939 called before it as a witness, Mr. Graham Towers, the Governor of the Bank of Canada. The Committee held 30 sittings, and its proceedings cover some 850 pages. Following are a few significant excerpts from Governor Towers' cross-examination before the Committee:

Question: But there is no question about it that banks create the medium of exchange?

Towers: That is right. That is what they are for... That is the banking business, just in the same way that a steel plant makes steel. (Page 287 of the Minutes of the Committee's Proceedings)

The manufacturing process consists of making a pen-and-ink or typewritten entry on a card or in a book. That is all. (pp. 76 and 238)

Each and every time a bank makes a loan (or purchases securities), new bank credit is created — new deposits — brand new money. (pp. 113 and 238)

Broadly speaking, all new money comes out of a bank in the form of loans. (p. 459)

Question: 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.

Question: ... as a matter of fact, they are not actually money but credit, bookkeeping accounts, which are used as a substitute for money?

Towers: Yes.

Question: Then we authorize the banks to issue a substitute for money?

Towers: Yes, I think that is a very fair statement of banking. (p.285)

Question: Ninety-five percent of all our volume of business is being done with what we call exchange of bank deposits — that is, simply bookkeeping entries in banks against which people write cheques?

Towers: I think that is a fair statement. (p. 223)

There are two or three more significant points made by Governor Towers which deserve our attention:

1) On page 455 of the Banking and Commerce Committee's Minutes, Mr. Towers makes this statement: "The banks cannot, of course, loan the money of their depositors."

In short, when you get a loan at the bank, the banker doesn't take anything from anyone else's account to loan to you. Rather, the bank actually creates the 'credit' or 'money' it lends you. It's brand new money created for you by way of a 'deposit in your account against which you can write cheques. The whole transaction is merely a bookkeeping entry, today made by a computer.

2) On page 394 of the Committee's Minutes, we find this exchange:

Question: Will you tell me why a Government with power to create money should give that power away to a private monopoly and then borrow that which parliament can create itself, back at interest, to the point of national bankruptcy?

Towers: ... Now, if Parliament wants to change the form of operating the banking system, then certainly that is within the power of Parliament.

3) Then, dealing with public and war financing, we have the following exchange:

Question: Will you agree with the statement that has been made, that banks lend by creating the means of payment?

Towers: Yes.

Question: ... so far as war is concerned, to defend the integrity of the nation, there will be no difficulty in raising the means of financing whatever those requirements may be?

Towers: The limit of the possibilities depends on men and materials.

Question: ... and where you have an abundance of men and materials you have no difficulty, under our present banking system, in putting forth the medium of exchange that is necessary to put the men and materials to work in defence of the realm?

Towers: That is right. (p. 649)

Question: Would you admit that anything physically possible and desirable can be made financially possible?

Towers: Certainly. (p. 771)

This testimony by Mr. Towers is most revealing and authoritative. And yet, 65 years later, many — probably most — of our parliamentarians and business and professional people know little if anything concerning banking and the creation of credit, the very lifeblood of our economy.

One observation in passing: We are not against the existence of banks. We need them in today's electronic society more than ever. We simply see the pressing need for some revision in banking policy and regulations, which would orient our banking system more towards service to community rather than obscenely greedy profits. After all, the product they're 'lending' isn't theirs; it's yours, and yours, and yours — the public's.

Make use of the Bank of Canada

Included in the Bank of Canada's mandate is the power to "make loans to the Government of Canada or the government of any province, but such loans outstanding at anyone time shall not, in the case of the Government of Canada, exceed one-third of (its) estimated revenue for its fiscal year, and shall not, in the case of a provincial government, exceed one-fourth of that government's estimated revenue for its fiscal year, and such loans shall be repaid before the end of the first-quarter after the end of the fiscal year of the government that has contracted the loan."

In other words, a good part of our Governments' short-term financial needs could be supplied by our Bank of Canada at a minimal service cost, with any profits going back into our public treasuries.

The Federal Government took advantage of this Bank of Canada mandate during World War II and the postwar reconstruction period, at great savings to the public treasury and Canadian taxpayers.

In 1974, the Bank of Canada held more than 20% of all Federal Government debt in the form of bonds and T-bills. That was the same as an interest-free loan from the Government to itself. In 1974, in concert with other central banks around the world, those in power changed the system... Today, the Bank of Canada only holds about 4% of our Federal Government debt.

My suggestion is that our Bank of Canada should exercise its mandate, and be used to its maximum potential in peacetime, as in wartime and postwar reconstruction, at great savings to the public treasury and Canadian taxpayers.

After all, it is no more inflationary for the Bank of Canada to create financial credit than it is for a private bank to create the same financial credit for a government, backed by the same public resources as collateral. But when our own Bank of Canada does it, the savings to the Government and taxpayers in interest costs are enormous.

This age of plenty

I hardly need to mention — I'm sure that every Canadian realizes — the vast and rich natural resources of our great land: the timber, minerals, oil, gas, grain, cattle, hydroelectric power, manufacturing, and so on and on. A benevolent Creator, and the industry and skills of our pioneer generations, have combined to make us fortunate Canadians, perhaps the physically richest people in the world, per capita.

However, these tremendous natural resources of ours, and skilled workforce and technological know-how, haven't always meant prosperity for all Canadians. Indeed, the whole of the 1930s we suffered a disastrous economic depression with widespread poverty on the one hand, while shops, warehouses and factories were glutted with goods people needed, but who had no purchasing power to buy. This ten-year depression was finally alleviated in 1939 by World War II.

War demonstrated our potential

Strange as it may seem, there's always money to wage war; and it's the performance of our country — our economy, and the character, dedication and productivity of our labour force — under the stress and exigencies of wartime, that gives us a glimpse of what a magnificent society and living standard is physically possible in times of peace, if only all sectors of our economic system are functioning anywhere close to their potential.

This point I've raised, that our economy seems to function better under wartime conditions than it does in peacetime, seems a bit of a paradox. To better understand this seeming anomaly, let's go back a bit to the last century.

In the years 1914 to 1918, Canada, like all the Commonwealth countries, was completely absorbed in World War I. With our then very small population, Canadians nevertheless made a huge contribution to the Allied war effort — not only in military personnel, but economically by producing food, clothing, armaments, ammunition, etc. And, needless to say, Canadians were fully employed back in those war years; business was humming and prosperity was the order of the day.

However, by the late 1920s, the economy was slowing down, and by 1929, the Great Depression of the '30s was setting in. And, as previously mentioned, for ten years Canada, and practically all the other industrialized nations, suffered widespread unemployment and poverty amidst plenty because of a shortage of purchasing power — money!

Then, in 1939, World War II began, and immediately our economy began to pick up; our long unemployment rolls began shrinking, and war industries and factories were sprouting up like mushrooms.

At the outset of World War II, our population was only 11 million, barely over one-third of our population today. Yet, with nearly a million of our finest and fittest in the armed services engaged in the destructive process of warfare, with almost another million working in war industries to produce the food and clothing of those in military service, and the guns, ammunition, vehicles, tanks, ships, planes, etc., they required — those back in our own country, reduced to those too young, too old or too poor in health for the armed service, were able to produce not only all the requirements of war, but all the consumer goods to provide a better standard of living than our population enjoyed for the ten years immediately prior to the war!

This almost miracle of creativity was possible because of two positive factors: First, the focus, unity, and dedication of the Canadian workforce and people. And, second, the fact that during wartime, the Government simply had to ensure that there was enough financial credit (money) created to make financially possible what was physically possible and essential to the war effort.

World War II revealed and confirmed two great truths or realities which we Canadians need to always remember, namely:

That over half a century ago, with almost 10% of our population in the armed services, almost another 10% producing armaments and weapons of war; and only those of working age who were too old or too impaired in health for military service, were left to produce the consumer goods requirements of our nation, they not only did that, but they raised the standard of living of a major segment of our people. And this, keep in mind, was before the high-tech microchip revolution of the past generation.

We might well ask: What fraction of our population today is needed, working full-time up to industry's potential, to provide the necessities of life for our Canadian people?

That, looking back a century in Canada, especially to the pre-WW II decade of the Great Depression, and to the post-War recessions, every one of them was caused by a scarcity of consumer purchasing power at that period of time, not by a scarcity of production and goods and services available on the market. In other words, it was a 'money' problem.

The words of testimony before a parliamentary committee in 1939 by Graham Towers, Governor of the Bank of Canada, confirmed the fact not only that money is created by banks, but, that providing a country has the physical resources and creative productive machinery, if there is a national determination to activate this potential by creating sufficient financial credit, there is no reason why our nation should hesitate to take the necessary financial action. He was saying, in reality, that what is physically possible can be made financially possible in our modern Canadian society with our vast natural, human and technological resources.

The 'under-employment' problem

For several decades past in this post-WW II era, we've had an 'unemployment' problem generally ranging between seven and ten percent of those seeking employment. The actual unemployment rate is probably somewhat higher, as many unemployed, unable to find work, eventually drop off the statistic charts. This has been a serious social/financial, problem going back to the early stages of our industrial revolution, but especially in the latter half of the last century, as industrial technology became increasingly automated. So, it's a condition that's not likely to go away, but indeed become more troubling unless appropriate adjustments are made in our financial and economic systems.

Our wartime experience of the 1940s should have warned us that this employment, or 'under-employment' condition, is here to stay — and on an escalating scale as we move deeper into the automated, high-tech revolution. After all, if we were able to draft nearly ten percent of our fittest workforce personnel into our armed services, and nearly another ten percent of our workforce into war industries, and yet produce enough consumer goods (food, clothing, and shelter) for our whole Canadian population while fully supporting our total war effort, that should have given us at least a glimpse of our potential productive capacity in peacetime. We should have realized that we were on the threshold of an age of escalating labour displacement by the power-driven automated machine, which would increasingly produce our people's required consumer goods with less and less than what we have long called 'full employment.'

Human labour a shrinking factor

There is a wealth of confirmation staring us in the face, if we need confirmation of this reality. One powerful example:

Jeremy Rifkin is President of the Foundation on Economic Trends in Washington, D.C., and author of a dozen books on economics, science, and technology. His scholarly tome titled The End of Work, published in the mid-1990s, meticulously documents and chronicles the shrinking labour factor in today's industrial world.

One of his examples is U.S. agriculture, from which we learn that:

In the early years of the 19th century, farming was the "quintessential occupation" engaging about 75% of the population. It was largely manual, with hoes and spades, horsedrawn carts and plows, etc.

About the mid-19th century, things began changing, with the advent of the McCormick reaper, the John Deere steel plow, the first tractor, etc. As a consequence, by about 1875 the proportion of the national labour force in agriculture had decreased to about 50%.

By 1900, it had decreased to less than 35%, by 1940 to 20%, and today, it has shrunk to about 3%!

Yet, today that 3% produces more than ever before. And what is more, this same pattern is now evident in all the major industries. The labour component in production is steadily shrinking, yet the volume of production is steadily rising — due, of course, to the displacement of manpower by machinepower, the displacement of human labour by the latest automated microchip technology.

The same pattern is obviously true of Canada and all advanced industrial societies.

What may our 'unemployment' figures be in another century?

I know that what Mr. Rifkin reveals is true, that it's part of reality. But at the same time, it does raise in my mind some rather fundamental questions, such as:

Is rising unemployment a curse, a deadly problem to be attacked by politicians and governments?

Or is rising unemployment — the displacement of human labour by machinepower — a blessing, a mark of progress?

These fundamental questions simply must be addressed — and as constructively as possible.

The Globe and Mail, Sept. 14, 1993, published a column with the following item, captioned "Trouble in Paradise." Here it is, in full:

"W. W. Leontief, 1973 Nobel laureate economist, (is) quoted in Policy Options magazine, July, 1993 (as follows):

"Adam and Eve enjoyed, before they were expelled from Paradise, a high standard of living without working. After their expulsion, they and their successors were condemned to eke out a miserable existence, working from dawn to dusk.

"The history of technological progress over the past 200 years is essentially the story of the human species working its way slowly and steadily back into Paradise. What would happen, however, if we suddenly found ourselves in it? With all the goods and services provided without work, no one would be gainfully employed. Being unemployed means receiving no wages. As a result, until appropriate new income policies were formulated to fit the changed technological conditions, everyone would starve in Paradise."

More $64-questions

It seems to me that we need to ask ourselves a few questions before coming to any final conclusions on this question of technology and work. Questions such as:

What is the alternative to using high technology, and thus creating unemployment?

The answer would be to scrap the inventions, the machines and appliances of the past centuries. Then ban all future research into technology, power generation, and any improvements in production which threaten to reduce human labour. Then, to prove our seriousness, scrap that electric toaster and coffee pot, that electric washer and power lawn mower. And don't forget your car, truck, and all those power tools. And that's just the beginning... because we'd be back long before the horse-and-buggy days.

But that, of course, would be nonsensical retrogression back towards a primitive state of existence with its back-breaking hardships and poverty, you say. Right! But we'd be guaranteed 'full employment' from dawn to dusk.

And another question:

What is the purpose of production? Is it to produce goods and services (real wealth), as efficiently and economically as possible? Or is it to create work and jobs — employment?

Because if it's to create work and employment, then we should scrap all labour-saving machines and devices, and produce as inefficiently as possible with the greatest amount of labour content. This, of course, would lead to high costs, bankruptcy — and no jobs! And rather short rations!

Therefore, when we examine the options or alternatives to utilizing to the full our marvelous high-tech industrial productive machine, the only answer is — No Way!

All must share benefits

Jeremy Rifkin, in his book already referred to, wisely notes that "Whether a utopian or dystopian future awaits us depends, to a great measure, on how the productivity gains of the Information Age are distributed."

In other words, for this high-tech revolution to become a blessing rather than a curse for mankind, it must share its labour-saving breakthrough and productive gains with the whole population, perhaps by way of a shorter workweek, a longer annual holiday, or earlier retirement — but with sufficient purchasing power to buy and enjoy the increasing production rolling off the assembly lines of our high-tech industrial machine. Thus, the goal would shift from 'full' employment to 'shared' employment.

What I'm affirming is that all segments of society should share in the gains and fruits of this present high-tech revolution — even the ones displaced by technology and whose labours are no longer required in production. Otherwise, the end result of our magnificent advancement in technology and production output could make the vast majority losers, and only an elitist minority winners. And just remember that when people can't buy, others can't sell. Only customers with purchasing power are good for business.

Our rich Canadian heritage

Our Canadian heritage — that is, the sum total of knowledge, understanding, spiritual values, social and cultural mores, law, etc. — handed down to our generation from countless past generations of our forefathers — is a priceless legacy too often little understood or appreciated. At least, until we begin to think and become aware of it.

We have in the foregoing pages mentioned our unmatched, vast natural resources — a gift from God. Our state-of-the-art hightech productive machine — a gift of bygone generations' work, research, and application of God's natural law. Indeed, the unprecedented abundance of production that rolls off our assembly lines today, together with our infrastructure of social services to meet almost every material need — a gift from our forefathers' study, research, labour, and innovation, handed down to us today.

Then there are the more intangible spiritual and social values handed down to us from the searching, experience, and trials and tribulations of countless generations again, a gift from our past. And all this is just a part of our heritage.

It has been estimated that over 95% of our present-day massive production power is the result of modern technology, with human labour — manpower — shrinking to less than a 5% factor. Just ponder this statement for a moment:

Going back millennia, our distant forefathers scraped out a primitive existence primarily with their hands and a few elementary 'inventions' for snaring fish, birds, and animals. And down the ages, natural resources were discovered, knowledge increased, and skills developed. And all this was passed on down to generation after generation as a free gift, part of their heritage — with each generation adding its increase in knowledge, understanding, inventions, skills, and productive power, to pass on to the next one. Out of this on-going development and expansion of heritage, over the centuries man invented the axe, the spade, the spear and bow-and-arrow, the wheel and wheelbarrow, and the primitive plough and the cart — and then the use of 'horse power' to pull the cart, the plough and the buggy. And each generation, with its increase in knowledge and power, was passing this expanding heritage on to their children and grandchildren. And a man with a horse-drawn single-share hand plough could cultivate countless times as much soil as he could with a spade. His productive power was thereby multiplied perhaps a hundredfold or more. Note that, at this point, the human labour (manpower) was perhaps a factor of less than 5% in the ploughing operation!

Fast forward. Then we finally come down the ages to 1705, less than 300 years ago, and Thomas Newcomen, an English engineer, invented a steam engine; and a few decades later, in 1765, the Scottish engineer, James Watt, greatly improved the Newcomen steam engine and the application of steam power. And this led to the development of the steam-engine-powered grain threshing machine, and the steam-engine-powered railway systems and steamship lines.

Then, in 1893, just over a century ago, Henry Ford made his first gasoline buggy, and by 1903, he founded the Ford Motor Company in Detroit. And by 1915, his company was producing gasoline-powered farm tractors. Thus we note that within a relatively short time, mankind's power of movement and travel was multiplied countless times; and his power to till the soil and produce food was multiplied almost beyond our comprehension.

However, the realization of the reality of this tremendous heritage gives rise to the question: "To whom does it rightly belong?"

Well, the Creator of our world and all its natural resources was God Himself. And the heritage with which we're blessed today is not the work of one person or class. It's the timeless accumulation of knowledge, research, discovery, innovation and application, by hundreds of generations of our forebears each utilizing and adding to their heritage, and passing it, augmented and enriched, on to the next generation. Let me repeat: "on to the next generation," — not on to just certain individuals, groups, or classes; but to all members of that new generation.

Heritage is our 'social capital'

The point I'm making is that in the case of every country, its heritage is its capital, but inasmuch as every member of that society has a fundamental right to his due portion of that heritage, then, by its very nature heritage is a 'social capital', from which every citizen has a right to receive a benefit — whether or not his labour is required, in the same way that a shareholder in a company is usually entitled to a dividend, whether or not he is employed by that company. It should be noted that while heritage is by far the major factor in today's society, including nearly everything we possess, it has been overlooked or deliberately ignored by nearly all economists and social reformers, with the notable exception of C.H. Douglas, the author of Social Credit. Yet, without the inclusion of this factor; it seems impossible to realistically address, let alone resolve, any of our present economic or financial problems.

Money the key to claim our heritage

Today, money is the key needed to gain access to our share of our national heritage.

Some individuals, recipients of bequests from affluent parents or grandparents, or from their own work and investment income, may have title to company shares, financial stocks or other capital goods, through which dividends and other benefits enable them to gain access to their share — and sometimes much more — of our national heritage. And at the present time, we find our country's heritage of 'social capital' largely in the hands of a relatively small minority of fortunate citizens and corporations (many of them international) at the expense of the heritage rightfully belonging to all Canadians. In short, the few are receiving the heritage rightfully belonging to the many. Both fundamental justice and social stability require that this situation be addressed and rectified.

This is a new factor for most of our readers, an entirely new perspective of society — a genuinely Christian perspective — wherein each of us has some rights and responsibilities, but also enjoys some of the fruits of our national heritage. However, this heritage factor is of such prime importance at this time because, without an understanding and appreciation of it, it's difficult to understand and visualize the nature and requirements of reform in our economic and financial policy essential if we are to open the door to the tremendous potential for prosperity and abundance in our great country this twenty-first century.

A great Canadian scholar and teacher, Louis Even, in whose honour the Louis Even Institute for Social Justice headquartered in Rougemont, Quebec, was named, addressed this heritage question in his lectures and writings on finance, economics and social questions several decades ago.

One of his writings was titled "A Sound and Effective Financial System" in which he was explaining the 'Social Credit financial proposals (which should not be confused or associated with politicians or parties using the 'Social Credit' name). Following are excerpts from Mr. Even's brochure:

"We said above, and we could never repeat it enough, that financial credit is, at birth, a property of all of society. It is so because it is based on the real credit, on the country's production capacity. This production capacity is made up, certainly in part, of work, of the competence of those who take part in production. But it is mainly made up, in an ever-increasing part, of other elements which are the property of all.

"There are, first of all, natural resources, which are not the production of any man; they are a gift from God, a free gift that must be at the service of all. There are also all the inventions made, developed, and transmitted from one generation to the next. It is the biggest production factor today. And no man can (rightfully) claim to be the sole owner of this progress, which is the fruit of many generations.

"No doubt that one needs men of our present times to make use of this progress — and they are entitled to a reward: they get it in remuneration wages, salaries, etc. But a capitalist who does not personally take part in the industry where he invested his capital is entitled, just the same, to a share of the result, because of his capital.

"Well, the biggest real capital of modern production is really the sum total of the discoveries, progressive inventions, which today give us more goods with less work. And since all human beings are, on an equal basis, coheirs of this immense capital which is ever increasing, all are entitled to a share in the fruits of production.

"The employee is entitled to this dividend and to his wage or salary. The unemployed person has no wage or salary, but is entitled to this dividend, which we call social, because it is the income from a social capital...

— "This is something new. But it seems logical."

"Yes indeed! And it is the most direct and concrete means to guarantee to every human being the exercise of his fundamental right to a share in the goods of the earth. Every person possesses this right not as an employee in production, but simply as a human being.

"In his broadcast of June 1, 1941, Pope Pius XII said: 'Every man, as a reason-gifted being, has from nature the fundamental right to make use of the material goods of the earth.' The Pope duly added: 'It is left to human will and to juridical forms of people to regulate more in detail the practical realization of this right.'.

"That is to say, it is up to the peoples themselves, through their laws and regulations, to choose the methods capable of allowing each man to exercise his right to a share in the earthly goods...."

Solving the problem of distribution

Mr. Even, mentioning the Social Credit proposal of a national dividend as an example, puts forward this idea as the key which would enable every citizen to claim access to their 'social capital' heritage.' This might require the Bank of Canada to play a somewhat more activist role in credit creation, as it did during World War II, greatly benefiting Canadians by saving billions of dollars in interest charges.

However, in addition to opening the door and making it possible for all Canadians to claim their rightful share of their 'social heritage', this dividend idea would also solve another increasingly serious present-day problem: an equitable distribution of the expanding mountain of goods pouring out of our factories and off our assembly lines.

The problem of production has been solved for generations in our industrialized countries. Goods have been plentiful, often in surplus supply, but money (purchasing power), except in wartime, has all too often been in short supply and inadequate to keep the Distributive/Consumption end of our economy up to our high-tech productive machine.

Therefore, a national dividend that would supplement other income, thereby increasing consumer purchasing power, would benefit not only the consuming public, but also be of great benefit to every aspect of the productive and business sections of our economy.

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