In the year 1939, MacKenzie King was the Prime Minister of Canada. What did he do during that year? He ordered the printing house to print him some money.
Let me point out, however, that MacKenzie King acted just as foolishly as did his predecessors during the ten-year period of 1929 to 1939. For ten years we underwent the terrible Depression; this was before World War II was declared. It makes no difference whether you are Liberal or Conservative, Democrat or Republican, because they are all the same. There were no changes under Bennett, the previous Canadian Prime Minister who was in office from 1930 to 1935. And when Mackenzie King became Prime Minister in 1935, he repeated, just as his predecessor did, that he had no money to give the unemployed people some work. However, it was MacKenzie King who declared war in September of 1939. Let me point out that the whole country had been living the Depression for ten years. People did not have any money. The Canadian government had no money to help the people, and it was even worse in provinces and municipalities.
So there was no money anywhere, but in spite of that MacKenzie King hurled Canada into World War II. He did not ask for our permission before he declared war, because if he had asked for that permission I, for one, would have submitted my objections. But he did not request for permission from anybody, he simply declared war and that was when it started.
To fight a war one needs money and a lot of money at that. It cost billions of dollars to fight the Second World War, but MacKenzie King declared a war even without money. How was he able to enter into such an expensive war without money? It is very simple. For that occasion he exercised his sole right as the sovereign of the country. In a sense, because of his action what he actually said was: "Even when people are dying right and left, I could not care less. When it comes to sending people into war; one needs money." He then said to the bankers: "I want 80 million dollars," and he received the 80 million within minutes.
The banks create money
How did the bankers produce the money for MacKenzie King? Did the banker go up north and start digging in the ground for gold? Not at all! Did he go to a print shop to have the pieces of paper printed out? Not at all! He did not have to follow those channels.
So what he do? It is very simple; he took his big book (called a ledger) and wrote the figures inside it. (If you ever become rich enough to go to the bank, you will see that the bank has many big books called ledgers.) When you are at the counter, the clerk writes everything down on a small piece of paper, but you do not really see him do the job. At the back of the bank an accountant will open a big book and write down that you are depositing money, which he will then add to your credit. If you came to withdraw money, he will write it down and remove the amount from your credit balance.
Now on that day MacKenzie King did not bring money to the bank. Not at all! He did not have any money, but came to the bank to get some. Even so, the banker wrote down 80 million dollars to his credit just the same.
When you go to the bank and deposit twenty dollars into your account, the banker records the twenty to your credit in your bankbook. If you do not bring any money to the bank, the banker will not record anything into his bankbook. You must bring the banker money, if you wish the banker to record anything to your credit.
Nevertheless in 1939, MacKenzie King did not bring any money to the bank, but requested a loan instead. What did the banker do, did he acquiesce to his request? He simply manufactured the money required; he took out his pen and recorded to the credit of the Dominion of Canada the sum of 80 million dollars. And how did the banker do that? He took his pen and wrote down into his ledger an 8, a 0, and six other zeros, then a period and two other zeros for the cents. That equals 80 million dollars.
That did not take too much of the banker’s time, now did it? Right away MacKenzie King was able to convert the unemployed into fighting soldiers for the beginning of World War II. Those who had been given layoff notices the day before were "drafted" by the Federal Government; the army went and enlisted them all into the military service for the beginning of the Second World War.
Who created that money to begin the butchery of the Second World War? The chartered banks did. But who creates the money in the country? There are people who do not know the answer to this question.
When I was young, I never asked who created the money for the country. When I started school, they taught me what money is used for. They never explained to us students where money came from, however. I was told in France they use francs as money, and in America they use the dollar. I was told that money is the same as a coined franc that weighs about 5 grams, for example. Today they would say that that money was based on gold during that time, but it is no longer based on gold today.
What is money? It is simply a piece of paper bearing the signature from the Bank of Canada. Alternatively, it is credit recorded into a bankbook. We were never taught these things at the time, so we did not know how money came into being.
There were people that thought that money was something like the stars, the moon, and the sun. There is a sun, a moon, and many stars. No-one can put one more or less of these stars and planets into our skies. One sends up little Sputniks and other satellites into the sky, but that does not change the number of stars or planets, because one cannot change that number. And when it comes to money, many people think that it is a similar state of affairs.
Nevertheless, I can assure you that Adam and Eve did not come out of the Garden of Eden with a bag of money for the rest of mankind saying: "the amount of money in this bag has been allotted by God and this amount is immutable until the end of the world." No. They did not bring one cent with them, and yet there is money in circulation today.
There is no second creation taking place. Money was not created by God. It is a man-made invention: it is man who decided to create money in various forms. Things have changed over the centuries: we made use of all types of materials to make and coin money. For example, money at one time took the form of shells, in certain countries. Today in Canada, what constitutes money or legal tender? It is metal coins (like the Loonies — Canadian one-dollar coins that were introduced in 1987 – or the Toonies – Canadian 2-dollar coins, introduced in 1996) with which one is familiar with today and credit-figures recorded into bankbooks.
When municipal councils, school boards, governments, or big industrialists borrow money from the bank today, what does the banker do? He simply extends credit to them by recording it into his ledger book. After this he records the amount into their individual bankbooks, just as if they were bringing money to the bank. However, they are coming to get money from the bank; they are not bringing money to the bank. The bank records those figures, and they can now draw cheques on this credit. It is not more complicated than that.
This proves that modern money, especially credit-money that is recorded into the bank’s ledgers – is the easiest thing in the world to create. One must admit that it takes much more labour to raise a child or even animals. It takes much more labour to raise pigs, calves, and other animals than it does to make or create money. Nevertheless, one hears that there are farmers in distress at this moment. Why? There are even richer people than you who are in distress, and they raise pigs for the market.
Some farmers have 500, 600, 700 pigs on their farms. They are told to raise pigs, as they will sell very well. Even today they are having a tough time because before they can sell those pigs, they must fatten them up. To fatten them up one must purchase grain. Therefore, to pay for the pigs’ food one must have money. They will get the money once they sell the pigs, but they do not have the money to fatten them up now. It is a prerequisite that they must fatten them up before they can sell them, but they do not have the necessary money to do that immediately.
In such a situation what do they normally do? They proceed to their local bank or credit union, where they borrow the necessary money that they will pay back in two or three months’ time; or maybe just after the sale of their pigs on the market. They receive the money; purchase the grain for the pigs and all is well.
But today, the banker says "NO!" to their loan requests. The bank has no available credit for any loans today. You see why, dear friends? There is a credit crunch today. Because of these credit restrictions the bank cannot make any loans. With these words the banker is really saying to the borrowers: "We will reduce credit and your pigs will remain thin." Why? What is different today than yesterday? Why are the bankers reducing credit today? The meat of the pigs is as good today as it was yesterday. The pigs are eating as well today as they ate yesterday, and we are able to feed them. The people want to purchase the pigs because they require as much meat today as they did before. What is going on? Ah! The credit has been squeezed, you see.
The bankers are penalizing people, so they are the reason that the pigs will remain thin. That is the reason that today farmers have abandoned raising pigs. If the farmer has employees working for him, they will be sent home. This sad state of affairs does not stop at just the farm, but affects all manufacturers and workers who are given their layoff notices because the products are not selling anymore. That is because the people lack money or producers lack money to pay their employees before they can sell their products.
They cannot get credit from the bank anymore because the bank tells them: "Your credit line has been considerably reduced. You need 20,000 dollars to pay for materials and your employees before you can sell your products. Now your credit line has been reduced to zero," the banker says to you. "You’re on your own." Whatever will I do? "Well, sell your products," the banker retorts. However, the products are yet in an unfinished state, and one needs money to do that. "Ah! Well there is nothing I can do about that," the banker retorts. Credit has been squeezed, you see.
The banker says to you: "You are not alone, dear sir. Everybody is in the same boat." On top of that there are people unemployed, so people are suffering. "Whatever will become of us?" people are saying.
Some people talk about inflation, but the inflation is most certainly not in our wallets. What do we mean by inflation? The word inflation means to make bigger, to inflate. When you blow into a balloon, you inflate it and make it bigger. Puncturing (deflating) the balloon is the opposite. When a balloon bursts, it deflates. Well, let me tell you, my dear friends, that your wallets are much more in a state of deflation than in a state of inflation today, is that not right?
Governments, stop serving the bankers, and serve the people!
Those who tell us today: "There is inflation, there is too much money in circulation and we must reduce the volume, increase taxes and reduce credit to production so that the banks can reduce credit; all because there is too much money in circulation.
In this particular domain many people are off-track and are not at all in tune with reality. When money or credit is available, take a good look around, there is development everywhere. However, when there is no more money or credit available and when the banker squeezes credit, see how all developments stop in the producing sectors. When production stops, people are given their layoff notices and they will suffer in their homes. All of these things take place because of the lack of money.
If MacKenzie King knew how to have money created for the war in 1939, why is it that the present Prime Minister cannot have money created today? In 1959 (when this speech was given), Diefenbaker was Canada’s Prime Minister. He said then: "The fault lies with the Bank of Canada and the chartered banks. It is not the government’s fault." Are the chartered banks above the governments in our country? Are we living under a banking dictatorship or in a democracy in Canada today? Is our Prime Minister the leader of a democratic society or the puppet of a banking dictatorship?
Where is the problem?
If you want to talk about the way money is created; the problem is not in the manufacturing of money. There is a problem, however, in the decision-making process of those who are in command. The problem and crime lies in their heads. The problem does not lie in the technique of money, but lies precisely in the philosophy of these few people. They want to remain public dictators and continue unjustly penalizing the people for their own selfish gain. That is the "only" problem! And that is what we must change.
Creating money is easy. Money must be created to serve production and families. The products must reach all families and the establishment of a Social Credit financial system will do just that.
I will show you right now, how a Social Credit system would accomplish this goal and why it is such a great liberation. It is useless to talk about a crusade against such and such a dictator. Talk to me about a crusade against the banking dictatorship that lies in our own country! Now that would be a worthwhile Crusade!
If I were to talk to trade unions I would say to them, your employer is in the same boat that you all are in, he cannot create dollars any more than you can. He is also forced to go and borrow money from the bank. Rather than declaring war against your employer, why not make war against the dictatorship that is unjustly penalizing you and your employer? Now, that would be a smart and effective move on your part!
It is worthless to form trade unions, a union of this or that. That is only to make people run after a "will-o’-the-wisp" and in the meantime, the worst financial dictatorship is crushing us.
Some people say we must join the unions, form trade unions, cooperatives, credit unions etc… All those things are subject to the same money dictatorship. First of all, why not inform and rise up people against the money dictatorship? Why not use your energy for that task? Why not enter all together into the Social Credit Movement? Why not enter into a union of the electors and citizens to fight as one army against this banking dictatorship; I assure you that it will change the face of our country.