What of Social Credit?

H. NAPIER MOORE January 15 1936

What of Social Credit?

H. NAPIER MOORE January 15 1936

What of Social Credit?



THE DAY after fifty-four per cent of the voting population of Alberta put William Aberhart and his Social Credit party into office, some of the forty-six per cent who had not voted for basic dividends went to their banks and transferred their savings accounts outside the province, mainly to Vancouver.

A week or two went by, during which the new premier announced emphatically that application of his theories would entail no measures of a confiscatory nature. The movement of savings stopped.

But local business generally was not only sceptical about Social Credit, it was jittery. So were two Eastern concerns which had been planning plant expansions in Alberta. They decided to defer their plans. Three-quarters of a million dollars that would have been expended in Alberta during the next few months are still in the bank.

Mr. Aberhart was undoubtedly conscious of the prevalence of jitters. He lost no time in explaining that Social Credit must wait until his Government had straightened out Alberta’s financial situation and established the security of the investor. He travelled East and told the bankers and business leaders of Toronto and Montreal that he hoped for their co-operation. They received him with courtesy, questioned him closely on his theories, and felt that it was a pity that so well-meaning a man was doomed to ultimate disappointment.

He went to Ottawa to borrow and from Mr. Bennett secured $2,250,000 to carry on until the end of October. And he got R. J. Magor, capable business doctor and a member of the commission which straightened out Newfoundland’s confused affairs, to go out to Edmonton to make a survey of Alberta’s finances and report on how its budget could be balanced.

Meanwhile, the members of Alberta’s Social Credit Government had not had time to become accustomed to walking in and out of the Edmonton legislative building and being called Honorable, when the Dominion election campaign started in earnest.

Into this campaign went the Social Credit League with all its organization and with an enthusiasm so uncurbed as to be indiscreet.

To finance candidates, money was needed. Very well, ask for it. But in the asking there was little finesse. The League, in fact, wiggled a bludgeon.

On October 1 last, from the Calgary office of the Alberta Social Credit League, there went forth a circular letter addressed to various business concerns. It announced that “The Alberta Social Credit League has considered it advis-

able that our Provincial Government should have representation in the Federal Parliament,” and it frankly solicited donations to finance Social Credit candidates in the Dominion election.

A number of the business men so addressed were of the opinion that a member of the Dominion Parliament is supposed to represent his constituents and not the leader of a new dogma. Moreover, it was not their policy to contribute to political party funds. They wrote and said so.

In reply they got this neat little billet doux:

“Dear Sir: Yours of-to hand. Referring to our

letter of October 1st, we beg to draw to your attention that we have not circulated that letter excepting to those who have had the privilege of doing business with our Government in the past. We trust that you will reconsider this matter in this case.

Yours truly,

Herbert A. Webster, Secretary, Provincial Organization, Alberta Social Credit League.”

This letter went not only to Alberta firms. It was received by a Toronto publisher who in the past has sold textbooks to the Alberta Government. He construed the letter as an implied threat—you either give or you don’t sell—and he put it in the wastebasket.

F. Anderson, M.L.A., Social Credit organizer for the Dominion, repudiated Secretary Webster’s letter. But there is supporting evidence that the League used an implied boycott threat to extract funds. The manager of a Calgaryowned chain store and three independent retailers in different parts of the province admitted to me that they had donated foodstuffs and cash because they “couldn’t afford not to.”

With funds, with the extraordinarily efficient organization referred to in the previous article, seventeen Social Credit candidates captured seats in the Dominion election, snowing under seasoned campaigners for the old parties.

Civic Defeats

AFTER the Provincial and Federal fields, what next?The municipal field. In November, Calgary was to elect its mayor. The Social Credit League marshalled its forces and into the field put W. R. Herbert as its candidate against Mayor Andrew Davison. There were two other contestants: Alderman F. J. White, Labor, and Fred Peat, Independent.

On November 20, with the citizens turning in a record vote, Mayor Davison was returned. The vote was so close that a third count was necessary. But, in spite of its organization, Social Credit was beaten. In December it was beaten again in municipal elections in Medicine Hat, Red Deer and Wetaskiwin.

Has the tide turned?

It is difficult to draw conclusions from civic elections, but it is an old saw that governments begin to die the day they are born. And several things have happened to switch the views of many who were, in the beginning, at least willing to give Aberhart the benefit of the doubt.

Addressing a teachers’ convention a week or two before the Calgary election, Mr. Aberhart, who is Minister of Education as well as Premier, told them that “it would be to their interest to teach Social Credit in the schools.” By many that was regarded as a threat. By others as a flagrant attempt to force the views of a political party upon teachers and scholars alike.

Moreover, Aberhart’s frequently expressed desire that Social Credit textbooks be used in the schools has aroused, the ire of the Roman Catholic church.

He has stepped sharply on the toes of a number of newspapers by taking from them large amounts of revenue derived from liquor advertising. Commencing February 1 next, all liquor advertising in Alberta, whether it be in daily and weekly newspapers, on billboards or over the radio, must stop.

And his recent statements that he has not yet had time to think about Social Credit have added fuel to the impatience of those who, rightly or wrongly, believed that basic dividends were to be dealt with immediately. Already in various parts of the province protest meetings are being held, resolutions demanding application of basic dividends are being passed, and marches on the Capital discussed.

Cutting Costs

BALANCING his inaction in the matter of Social Credit, Premier Aberhart and his Cabinet have shown no lack of action in other matters of administration. Meeting almost daily, they have made earnest efforts to eliminate overlapping and waste and to reduce expenditures, with a view to balancing the budget.

Departments have been merged. High salaries have been reduced. Jobs regarded as “soft” have been abolished. Staffs are required to be at their desks on time and to work a full day. “No loitering” is the rule in the administrative buildings.

The Dominion Government is to be asked, if it hasn’t already been asked, to permit its income-tax collection department to take over the collection of Alberta’s provincial income tax. It is estimated that a saving of $50,000 to $60,000 could be achieved each year by the switch.

Attempts will be made to refund the Province’s debt of some $155,000,000 at lower interest rates.

The Premier himself has urged the Association of Municipal Districts to find ways of cutting costs. He has stated flatly that Alberta has no need of 10,000 school trustees, 3,000 school secretaries and 3.000 audits.

He has made preliminary moves to bring into operation a

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system of merchandising codes—agreements on prices and spreads. As from the first of this year, all wholesale and retail merchants in the province will be licensed by the Government.

If Mr. Aberhart had never spawned Social Credit, had he been elected on a conventional platform, it is altogether likely that at this moment he would be regarded by the most conservative of people as having made a good, sound beginning.

But it was Social Credit that put him in. He cannot escape the consequences of his promises.

An Interview

HOW does he himself feel about the progress he has made? This is how he felt on Armistice Day when I talked with him in his suite at the Palliser Hotel in Calgary. It was the second time I had met him. And be it said that he is not a difficult man to meet. He is courteous and patient, even when you disagree with him. And the cares of office had not diminished his sense ofhumor.

A few minutes before I called on him, a newspaper acquaintance had phoned to announce that Premier King and President Roosevelt had signed the Canada-U.S. trade treaty. I opened my conversation with Mr. Aberhart by telling him that.

He said: “Mr. Moore, it had to happen. Both Mr. King and Mr. Roosevelt had to sign that treaty. There was a Guiding Hand back of it. Haven’t you noticed that whenever the affairs of a people reach a state of chaos beyond human power to straighten, suddenly a way is opened?”

I said: “Do you feel that way about the situation in Alberta?”

“I do,” he replied. “No civilized country can go on seeing people suffer from lack of food, lack of clothing, lack of shelter, when others are living amidst plenty.”

“Then,” I said, “you still think that you can bring about Social Credit dividends?” “Certainly.”

“Within the period you mentioned— eighteen months?”

Mr. Aberhart shook his head doubtfully. “I can’t tell when. We had no idea when we came into power that the finances of this Province were in such a mess. Our first objective must be the straightening out of that mess. We have got to restore the credit of Alberta and balance our budget. We cannot establish a new system on a rotten foundation.”

Loans Not For Social Credit

I SAID: “To do that, you will be asking for additional loans. Do you think that the Dominion, the other Provinces, the banks and financial interests, and the investors are going to be willing to advance Alberta more money, when they are convinced that in Social Credit you are basing your hopes on unworkable principles?” “What has Social Credit got to do with it?” he asked. “It ought to be clearly understood that what we hope to borrow will not be used for Social Credit at all. It will be used to straighten out the present financial position of the Province. In other words, we shall be strengthening the security of those who have invested previous moneys in this Province.

“But, if we strengthen the security of the mortgage holders, so to speak, isn’t it only fair that in exchange they should give us a lower rate of interest? I feel that we ought to be able to save between $3,000,000 and $4,000,000 in interest through refunding arrangements. For our part, we’ll save several millions more by eliminating duplication, overlapping and waste in the administration of Alberta’s affairs.”

I said: “Supposing that you have your budget balanced, and everything is set for the application of Social Credit, To be able

to credit some 400,000 people with $25 each per month, you will need $10,000,000 a month. Your total income from all sources is probably around $15,000,000 a month. Out of that you have to pay all your expenses of government, all your fixed charges, all your interest on loans. Just how are you going to raise the money?”

“By levies.”

“Progressive levies such as you describe in your Manual,” I continued, “will increase the cost of goods, increase the cost of living—”

“I say,” interrupted Mr. Aberhart, “that the cost of living will decrease. Today I was talking to a meeting of retailers. (It was the Calgary Retail Merchants Association, headed by A. C. MacKay, organizer for H. H. Stevens in the last Dominion election). I said to them: ‘Gentlemen, if I increase purchasing power so that you can clear your shelves of goods in half the time, if I can double your turnover, wouldn’t you be willing to cut your spread?’ Some of those men told me, ‘Yes, by a third.’ Any business man will tell you that the more he sells the cheaper he can sell. We can cut the cost of living, not increase it.”

“But, for the sake of argument,” I said, “suppose it doesn’t work out that way. What’s to stop people buying the products of other Provinces at cheaper prices? As I readthe B.N.A.Act, you can’t impose a duty or tax on goods from another Province. ’ ’ “Who says so?” enquired Mr. Aberhart. “It’s done every day. Let me tell you something. If I’m going on a trip into British Columbia and I put a five-gallon can of extra gas in the back of the car, when I get to the border what happens? They stop me and charge me the amount of B.C.’s gasoline tax. Why, they can even make me buy a license to travel in B.C. if I’m on a business trip. What’s that but an impost on imported goods?”

My next question was: “Do you plan to put into effect an increased income tax?”

“I guess I’ll have to,” was the reply. “What about property taxes?”

“The whole system of taxation is wrong, of course,” answered the Premier. “The present basis of property taxation isn’t right. Taxes should be based on what people produce on their property.”

“Mr. Aberhart,” I said. “In Toronto you told me that you could take me into places in Alberta where the people had had nothing to eat but gophers. Since coming here I have asked five insurance loan inspectors who travel every section of this Province if they have seen any evidence of such appalling distress. I have asked the same question of two relief officials. They tell me that they have never seen any evidence that would substantiate that statement; that even if there have been such cases there need not have been, because they could have secured food from the relief authorities.”

“They must be blind,” said the Premier. “Why, I heard of a case at Blind River where young children had to be kept in bed because they hadn’t any clothes to wear. Ladies from the I.O.D.E. in a near-by town went there and saw the conditions for themselves.”

I said: “But about these people you

claim have to eat gophers. Where are they? And why don’t they go on relief?”

Said Mr. Aberhart: “The I.O.D.E. will give you particulars. As for relief, 1 maintain that people can’t live on the amount they get under relief.”

That was as far as I could get.

I said: “You are familiar with certain

things that are being said about you. Do you mind if I ask you some rather blunt questions?”

“Go ahead,” he said. “I know that all kinds of false stories are being spread. Why should newspapers print them? I just can’t understand why they should print them.” “People have told me that in the legisla-

live buildings all female employees were ordered to stop using rouge and lipstick and to wear high necks and goodness knows what,” 1 told him.

‘‘That is false. It’s silly. No such orders or suggestions were given.”

“It is said that you have been utterly ruthless in firing employees of the previous Government; that you have booted out, with a few hours notice, civil servants who were within a year or two of superannuation. What about that?”

“Utterly false. We are eliminating what we consider to be unnecessary positions, and reducing what we consider to be unnecessarily high salaries. But there has been no ruthlessness.”

“You are satisfied with the progress you have made so far?”


“The problems are tougher than you thought?”

He laughed. “Yes.”

“But you still think that you can put over Social Credit in a province that isn’t an isolated entity?”

“Yes. But we shall need co-operation. Surely people will co-operate. They must see that other people can’t be left to starve in the midst of plenty.”

Five minutes later. I saw Premier Aberhart striding toward the Edmonton train with all the jauntiness of a man who hasn’t a care in the world.

Is Aberhart Sincere?

TS THE MAN sincere?

4 In his concern over the plight of the unfortunate, yes.

As to his conviction that he can do what he has promised to do? At the outset, undoubtedly. Now, it is difficult to tell. In small matters he seems to have reached the “I never said it” stage. In December he told an Ottawa church congregation that the press had been unfair to him; that the Canadian Press had stated he had received threatening letters. Said Aberhart: “I

never had any threatening letters. Not one.” Yet, in November in a Sunday radio broadcast, he not only announced that he had received a threatening letter but he read it. To say the least, it’s a bit confusing.

He cannot say that he never promised that Social Credit would work. But he has stressed recently that no beginning can be made with it until the finances of Alberta are put on an even keel. As Premier he knows that the $165,000,000 debt of his Province, and its operating deficits, cannot be taken care of “out of the point of a fountain pen.”

The debt situation cannot be cleared up in eighteen months. It is doubtful whether the operating budget can be balanced in that period.

Supposing that in this Mr. Aberhart sees an alibi for the non-establishment of the promised dividends, what of the people who voted for Social Credit?

Are they going to shrug their shoulders, say “Oh, well,” wait for the next election and vote Conservative or Liberal? Or, embittered by frustration, are they going to cause trouble, see red and vote red?

There is a fair-sized communist vote already in the mining areas of Alberta. The danger is that failure of Social Credit will add materially to it.

Supposing that the impossible happened, that tomorrow Alberta is on an even financial keel, could Social Credit, as expounded in the Manual, be put into effect?

The type of man who has had years of experience in running a business, in providing money for a weekly payroll; the man who has dealt with outside trade and is familiar with exchange and credit and the things that affect them, says that SocialCreditors have yet to supply reasonable or logical assurance that it could. And the arguments of this type of man cannot be dismissed with the much used answer that he “don’t understand,” or that he is apathetic toward the misfortunes of others.

The soundest of Social Credit’s critics are

far from being callous in the matter of human

suffering. They will admit that the present systems have failed to abolish it. But they claim to know their history. And they are sure that the proponents of Social Credit have failed satisfactorily to supply specific answers to specific questions.

They say that, stripped to nakedness, Basic Dividends started with irredeemable certificates and irredeemable certificates are fiat money. They say that no fiat currency has ever succeeded in producing anything but inflation followed by collapse. That attempts to prevent inflation by redemption of such certificates must of necessity involve taxation beyond the capacity of a Province to bear. They say that Premier Aberhart is pitting his high-school experience against the experience of the world’s best-trained economists. That no bank ever created or can create a cent of credit from nothing.

Even the impatient rural supporters of Social Credit are now asking, “Why, if Social Credit certificates are just as good as money, can’t you settle this debt problem; why can’t you pay us in Canadian currency?’

It is not the purpose of this writer to set forth in detail all the arguments that have been used, and will be used, to riddle the Social Credit Manual. It is simply to do a job of straight reporting; to set down facts that can be substantiated, and to deduce from them certain probabilities.

Of those probabilities there is this outstanding one. Those who are being asked, and who will be asked, to lend actual cash to Alberta, to refund its loans, to underwrite its debts, to invest in the development of its resources, are bound to be chary of so doing when the Government of that Province is committed, by pre-election promises, to an experiment regarded by those same sources as being doomed to failure.

Mr. Aberhart hopes that the Dominion Government will lend him money. The Dominion Government hasn’t any money of its own. What it lends it must obtain by general taxation, involving all Provinces, or by borrowing. Its Minister of Finance knows that while it is asserted that Social Credit is not to be financed on borrowed money, the credit not only of Alberta but of the Dominion as a whole is bound to be affected, in the mind of the taxpayer or lender, by the introduction of untried economic policies.

Mr. Aberhart hopes that the chartered banks will co-operate by handling Social Credit payments and bookkeeping. No banker I have yet met considers there is the remotest possibility of that happening.

To administer his scheme, Mr. Aberhart would require Provincial machinery of such magnitude as to add burdensome costs. To make sure that every recipient was abiding by the rules as to purchase of goods, etc., he would need proportionately as many sleuths and inspectors as were used in the attempt to impose Prohibition upon the United States.

Application of levies upon goods imported from other Provinces would at once provoke court actions that would be long drawn out and costly.

In a recent speech on freedom and tolerance, McGill’s new Principal Morgan said that it must always be borne in mind that there was a possibility that one dissenter among a thousand people might be right and the 99)9 wrong. And I think it was Anatole France who said that any martyr who allowed himself to be burned at the stake for a principle was too presumptuous, because he might be wrong.

If in a Province that cannot be an isolated entity, Mr. Aberhart can during his term of office overcome all the obstacles enumerated above and confound his critics by an accomplished fact, he will do more than revolutionize economics in Alberta. He will revolutionize economics throughout the world.

Which would be a miracle. And the world being what it is. and people being what they are, there is still a lot of doubt as to the possibility of miracles happening.