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Memorandum of the Institute of Political Action

on Wednesday, 01 June 1955. Posted in Social Credit

On the occasion of the federal-provincial meeting in Ottawa on April 26, to prepare the agenda for the next Federal-Provincial Conference, the Institute of Political Action submitted the following memorandum to the representatives of the ten Provinces:

Where is the source of the difficulties?

There is apparently no quarrel between the Federal Government and the Provincial Governments as to the distribution of legislative powers provided by the British North America Act of 1867.

It would seem that Provincial Governments meet with no physical difficulty carrying out programs coming under their jurisdiction. No Provincial Government seems to complain that the Federal Government draws so heavily upon the material resources and manpower of Canada that there is not enough of either left available for provincial services and development.

Contractors, manufacturers, farmers, transportation facilities — the producing system of Canada, generally — are eagerly looking for orders, whether such orders emanate from the Federal Government, from some Provincial Government, from other public bodies or from individuals.

But, if the productive power is plentiful enough to answer readily all public or private orders for goods and services, not so the financial means to pay for them.

There is no parity between the physical possibilities and the financial availabilities. And this is a source of difficulty for all public bodies as well as for individuals.

The conflicts between Federal and Provincial Governments arise where the scarcity occurs — not in the field of realities, but in the field of finance.

If whatever is physically possible were made financially possible, there would be no ground for a feud, since the production system shows no physical difficulty filling all orders, wherever they come from.

What compels an organized community possessed of legislative authority — a sovereign nation or an autonomous province — to restrict the utilization of its enormous producing power to bounds set by financial restraints? Should it not be the other way — the financial mechanism adjusted to the physical possibilities?

Finance should reflect facts

Whatever be the accepted nature or form of money or credit instruments, a money system is, fundamentally, a bookkeeping system. Finance is, or should be, a mere reflection in figures of the physical facts of production and consumption.

A financial mechanism thus geared to economic facts would supply new credits at the rate of new production, and would recall credits at the rate of consumption.

This would eliminate the purely financial problems, collectively speaking, leaving only production problems. But the latter can be easily dealt with by our modern producing system, if unhampered by financial restrictions.

The end of fiscal disputes

With finance made subservient to physical possibilities, the present taxation set-up could be abrogated and a new mode of public finance introduced, to work smoothly for all parties, federal or provincial.

The same producing system is tapped for all demands, whether public or private, whether federal or provincial. And the same citizens have to liquidate the total cost of goods and services supplied, in whatever field. There is, then, inherently no reason for quarrelling, as long as one government does not interfere with the jurisdiction of another, if the financial system is kept in agreement with the producing system.

An appropriate financial mechanism — which might very well be the Bank of Canada on a national scale, or some institution of the Provincial Treasury on a provincial scale — would supply the credits necessary to finance all new production, whether public or private, at the rate, time and place where such production is made. And the same financial mechanism would act to recall the credits at the rate of consumption or depreciation of wealth of all kinds. This latter operation could be effected by a proper adjustment (not pegging) of prices at the retail end.

Sound principles, which should govern a financial system sufficiently flexible to reflect facts and meet economic conditions as they develop, have been enunciated by C. H. Douglas, under the name of “Economic Democracy”, better known afterwards under the appellation of “Social Credit”. The name, however, matters little. And while the principles are applicable anywhere, the rules and regulations to apply them must be designed according to the political set-up and the social policy of each country.

Federally or provincially?

The Institute of Political Action holds that the representatives of the ten Provinces, meeting at Ottawa on April 26, should insist on placing on the agenda of the coming Federal-Provincial Conference, due later this year, the establishment in Canada of an adequate mechanism, so designed that whatever is physically possibly shall be made financially possible, without inflation and without indebtedness to any private institution.

In case of non-proceeding by the Federal Government, we urge each Provincial Government to take such initiative within its own province. We cannot believe that provinces agreed to enter into a federation, except for a common advantage — surely not to be paralysed in the face of unused productive potential, or to obligate themselves to debt as a condition for utilizing their natural resources and manpower.

The Provinces are specifically granted the "right to raise loans upon the sole credit of the Province" (B.N.A. Act). This is recognition of the possession of credit by the Province. And the Province can surely design some mechanism to make use of that which belongs to it, without having to pay a license for it to any individual or any private institution.


Following the Federal-Provincial meeting, we received a report from Ottawa that a member of the "Social Credit" delegation representing British Columbia was Carl Goldenberg, of Montreal.

Mr. Goldenberg was an adviser of the former B.C. coalition government, whose financial policies were prime targets of B.C. Social Crediters in the last two provincial elections.

Our Ottawa report states that British Columbia's Montreal adviser "acted as a barrier between us (Institute of Political Action) and the Hon. Bennett," Premier of B.C.." He barred us from seeing the Premier and pocketed our Memorandum, which must never have reached Bennett."

Social Credit is aimed at breaking the power of International Finance over the lives of people and nations. Mr. Goldenberg may be a brilliant lawyer, but we wonder if he was not in the wrong corner in this fight. Social Credit is pledged to oppose all anti-Christian policies and to pursue a policy based squarely upon the principles of Christ. When a government is pledged to work towards a society based upon the teachings of Christ, one would think that advisers would be retained who believed in Him, n'est-ce pas, Mr. Bennett?

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