We note that Federal Minister of Finance, the Hon. Walter Harris, estimated the gross national product of Canada for 1955 at more than $26 billion. There being some 15 million people in Canada, this works out at between 1700 and 1800 dollars, worth of goods and services for every mạn, woman and child in Canada.
An "average" family of five might therefore expect an income or purchasing power of nearly $9,000 last year. How many "average" families got it? And that is precisely why unsaleable surpluses glut the market in everything from wheat to TV sets — there is a vast gap between total prices and effective demand or purchasing power.
The orthodox approach to this problem is to just do nothing. After all, eventually programs of restricted production or destruction, or war, look after the surpluses!
The socialist approach is to nationalize (confiscate) the productive machine which created the surplus, and impose an economy based on governmental controls, regulations and restrictions. This, in practice, weakens initiative and enterprise, and kills the goose that laid the golden egg, as it were. More controls, and less production, in other words.
The Social Credit approach is to welcome abundance, and, instead of restricting or destroying, balancing purchasing power with production so that the Consumer may be in a position to claim and enjoy all desired goods and services capable of being produced. And private, competitive enterprise seems best equipped to produce abundance. By guaranteeing full consumption, not only the consumer, but also the producer and business man, will benefit.
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Speaking of "tickets"
"Concerning these little things we dignify with the name of pound notes, dollar bills, marks, francs, and so forth, we hypnotise ourselves into believing they are something marvellous and have a great many mystical properties, and that they are the medium of exchange and the storehouse of value and all sorts of wonderful things, in books on money and economics.
"They are none of these things at all. They are little bits of paper printed with ink. When you go into a railway station and you exchange a thin, and, if it is clean, a crackly bit of paper, for a thicker and not so neatly printed bit of paper; you call it buying a railway ticket with money. You are exchanging a bank ticket for a railway ticket, that is all.
"It is in that power to issue bank tickets, those crackly little things which we have all become hypnotised about and which we regard as being so wonderful, that we accept as a reasonable statement when we see thousands out of work and hundreds of machines idle and bad roads and many things of that kind, when we say: 'Oh yes, it is a pity, but we cannot do it because there is no money.' In other words, there are not any bits of paper with ink on them."
C. H. Douglas.
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Western Business and Industry, in its July '55 issue, carries a lengthy article on "Social Credit." Included under the heading "What A Real Social Credit Government Would Do" are these items:
- "Take over control of credit in the country... at the same time, abolish the lending functions of banks except in cases where the government consider a loan undesirable...".
- Set up a system of press and radio censorship...
- Fix wage rates.
- Set up legislation "forcing every man and woman between certain ages to work."
"In short," concludes the article, "true Social Credit philosophy requires a completely controlled economy."
So now we know what "Social Credit" would do! We pity those who are so unfamiliar with the subject that they might have taken these pronouncements of the author, Mr. L. J. Thompson, seriously. Those acquainted with Social Credit policy will recognize this article as not only inaccurate in many respects, but saturated with absurd falsehoods. For instance:
- Social Credit policy does not envisage government "taking over control of credit." Today our people's credit is "taken over" and "controlled" by everyone but those to whom it rightfully belongs. For generations Monopoly, private or governmental, has been filching and "controlling" our credit, until today it has become a political weapon. Social Credit is interested in restoring to the individual access to, and control of, his own credit. The financial proposals of C. H. Douglas are designed to this end.
- Social Credit policy would not prevent banks or other institutions or individuals from lending their reserves. Permitting banks to manufacture or create 'money' or 'financial credit' against another's real wealth and then charge interest is quite another matter. Under a Social Credit financial policy it is inconceivable that governments would borrow financial credit — figures from private banks which create it against the real wealth and resources of the community or nation in the first place. No community or nation should have to pay usury for the privilege of using its own credit.
- It is today that we have a system hidden as it may be — of radio and press censorship. Anyone doubting this statement would be well advised to send a dollar to "The Canadian Intelligence Service," Flesherton, Ontario, and ask for their booklet on ADL press and radio censorship and a few of their recent reports. Then ask yourself why the vital information with which you will be supplied never appears in the press or over the radio. Social Crediters wish a free press and radio — free to tell the whole truth.
- The statement that Social Credit would fix wage rates is without foundation in truth. Wage rates are matters concerning employee and employer. Under a Social Credit policy, the "price discount" would lower prices to the consumer and thus increase the purchasing power of his dollar; and the national dividend would supplement his wages or salary.
- The statement that Social Credit policy is to force "every man and woman between certain ages to work" and implement a "completely controlled economy" is staggering, I'm sure, to any Social Crediter. Because Social Crediters are probably the only group today who do NOT advocate "full employment"; who welcome every labour-saving invention to free the individual from work; who demand full freedom for every individual to choose or refuse, to contract out of any group, organization, or proposition. Social Credit policy is designed to free our economy from artificial "control" — whether it be imposed by government or any other monopoly. An economy truly free and reflecting the physical facts is the objective of Social Credit. God's Natural Law, not Caesar's edicts, attracts, Social Crediters.
We should not even comment on this absurd article carried by Western Business and Industry, were it not that this publication carries weight in business circles. We feel it our duty at least to keep the record straight.
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Deeper and Deeper into Debt
This continent enjoys unprecedented 'prosperity'. Now, if we cannot pay our way during the most prosperous time, what about the others!
U. S. News & World Report (Jan. 13) gives these revealing figures on U.S. debt:
During 1955 alone installment Credit (Debt) rose 5 BILLION dollars in the US. In the last ten years this type of debt has risen from less than 3 billion to 27 billions.
During 1955 mortgage debt rose 10 BILLION dollars in a ten-month period.
In the first 10 months of 1955 the public borrowed 15 billion dollars to buy cars — 45 per cent more than in the same period of 1954.
Average debt on a new car is now $2,200
In short, during a year of unprecedented 'prosperity' Americans are unable, financially to make ends meet. As a matter of fact, this period of unprecedented 'prosperity' is a period of unprecedented debt-contracting. The more they produce, the more they go into debt. The greater the production, the larger the gap between purchasing-power and prices.
Rather powerful confirmation of the Social Credit contention, isn't it!
Well, Americans are now 27 billion in debt on installment buying alone (buying this year production with next year's income). That comes to about $170 for every man, woman and child in the US — or nearly $680 a family of four. And while they try to pay it off next year, with compound interest, next year's production piles up and further complicates matters.
US News reports: "As Government moved to check the credit boom, auto sales are slowing." In other words, under the present financial system which bases everything on debt, any restriction placed upon 'deficit financing' or debt-contracting would immediately result in aggravating the shortage of purchasing power and slowing demand and consumption — which in turn would mean lay-offs, and further reduced purchasing power. Ultimately, this chain reaction leads to depression.
So, the only other course under the present system is to go further into debt. All of which means more interest charges and trouble in the future.
In our July, 1955, issue we gave the corresponding figures for Canada, which showed the average Canadian to be in about the same squeeze as his U. S. counterpart.
This present system of finance is based upon debt. And debt today means interest and taxation tomorrow — and more trouble the day after. The physical facts of this country, the statistics and financial statements, all attest to the ugly truth that our present system of debt finance does not distribute adequately the full product of this power age.