September 25, 1945 (20th Parliament, 1st Session)


John Horne Blackmore

Social Credit

Mr. J. H. BLACKMORE (Lethbridge):

Mr. Speaker, either this parliament will discover and apply a solution to the dismaying problems confronting the Anglo-Saxon world, or it will fail to discover and apply that solution. Either this parliament will redeem democracy and parliamentary governments generally from the siloughi of despond and contempt into which they are rapidly descending all over the world, or it will drag still deeper into the mire the reputation of parliament. The matter rests in the hands of members of this parliament.
There is in this parliament I am sure a knowledge of how to obtain a solution of the prohlems of the world. If the government would call together the representatives of the various parties in a round table conference in a non-political manner and1 discuss earnestly for whatsoever time was necessary this matter of a solution, I am confident that a solution could be found. .
We shall never be able to find a solution by sneering at each other's ideas as did the hon. member for Winnipeg South Centre (Mr.
Maybank) the other night when he referred to Social Credit as funny money. We shall never do it by indulging in outbursts of fantastic misrepresentations as did the hon. member for Montmagny-L'Islet (Mr. Lesage) last night, or in bursting forth into ecstatic paeans of glorification of the present obviously hopeless orthodox system of finance, as did the Minister of Agriculture (Mr. Gardiner) last night in his otherwise excellent speech. We may be able to find a solution by approaching the situation with humility and a disposition to be open-minded, to consider and weigh and assess the value of the various arguments as did the hon. member for Grey North (Mr. Case) on September 21. At that time the hon. member said as recorded on page 369 of Hansard:
-I do not think Canada, of all countries in the world, is in a position to give leadership in monetary reform. We produce a tremendous volume of goods in this country, and we must find a market for tnem in the markets of the world.
Mr. Kuhl: How about the home market?
Mr. Case: The home market could never
consume the amount of goods we produce, because we produce enough for 50,000,000 people. The productive capacity of this nation during the war absolutely staggers human imagination. If those with whom we seek to trade were to discover that we were using a monetary base which resulted in subsidizing our goods to the detriment of their standard of living, I am sure they would soon find means of applying dumping duties or an embargo to prevent us from finding our way to their market. The whole matter is greatly involved. I am glad that there are those who have the courage to come forward with these ideas. I like to think of myself as being a student of monetary reform -sometimes I think our system should be reformed-but I have yet to be convinced that Social Credit policies will fit in with our plan of world affairs.
The hon. member's words indicate a somewhat sincere desire to know something about social credit, why it is called social credit and the basis of facts upon which it founds its philosophy. What is its philosophy? What is the basis of fact upon which it founds its technique? What is the technique which social credit proposes? How shall social credit deal with the great problems which confront us at the present time, the great phenomena such as the surpluses in Canada and- in other nations-wheat for example-and the deficiencies in other nations, such as are found in a country like Jamaica; inflation or boom, deflation or depression; monopolies and cartels; foreign investments in Canada which upset our trade balances or balances of payment; Canadian investments abroad; international debt and adverse trade balances; international commercial rivalry or trade wars? How would

The Address-Mr. Blackmore
social credit enable Canada to sell her goods on the world markets? How would Canada protect her economy against foreign goods seeking to enter her market in competition with Canadian goods? Would she use the tariff under social credit, or exchange control, or quotas, or embargoes, or just how would she proceed under social credit? How would Canada attain monetary stabilization, first of all in Canada and then internationally?
What is social credit's attitude toward international trade? What is social credit's attitude toward the Atlantic charter? What is social credit's attitude toward war, its causes and the remedy for those causes and provision against war? What is the social credit attitude toward the British commonwealth and the empire? What is the social credit attitude toward world organizations such as were attempted in San Francisco? What is the social credit attitude toward the world as it is to-day? How do they interpret the world? Why is it we have people pitted against each other in great organizations ready to fly at each other's throats? Is Canada of all countries in the world in a position to give leadership into social credit? These seem to be some of the major questions in the mind of the hon. member for Grey North.
These questions are all fair and reasonable, and they require to be answered. Any sound economic system ought to be able to answer them. The proposals necessary to answer them should be definite, consistent, realistic and logical. Can social credit answer these thirteen questions definitely, consistently, realistically and logically? If it can, and to the extent to which it can, then social credit has a valid claim to careful consideration as the possible technique to be used in establishing a new world order of freedom from want and fear, together with freedom of speech, worship and choice.
Can social credit answer these questions with definiteness, consistency, realism and logic? Let us see. Consider, first, the meaning of social credit, the first question the hon. member wanted to get clear in his mind. The credit of a nation is like the credit of an individual. It is of three kinds. There is the credit of honour, whether or not a man's word is any good, and this applies also to nations. There is the credit which means the ability to produce and deliver goods as, when and where required. This is called the real credit of the individual and it is the real credit of a people. Finally there is the financial credit, which means the ability of the individual or the ability of a nation to produce as, when and where required, money, which is a quite different thing.
Social Crediters maintain that the financial credit of a nation should reflect the real credit of the nation and correspond to it. They believe that when there are more goods and services on a nation's markets than the consumers of that nation are financially able to buy, then the people's representatives in parliament should lay down a financial policy under which a national finance commission or authority would create and distribute scientifically to the people money tokens or dollars enough to enable those so-called surplus goods and services to be bought and consumed by the people of the country in so far as the people can use them, or perhaps by the peoples of other countries in so far as the people of this country cannot use them. Under such a policy the national money authority would render available to all the people of our nation their real credit, the goods and services they produce. The social credit movement favours rendering the people's real credit social through the creation and use of financial credit to represent or correspond to that real credit, that is, the creation of enough tokens or dollars to make it possible to distribute to all consumers in Canada that portion of our goods and services which otherwise would be wasted.
One of the great faults we have to find with the members in this house who undertake to criticize or sneer at social credit is this simple fact-they never do take the trouble to find out what social credit claims to be, and consequently they have not the slightest idea what they are criticizing. So they make the most idiotic statements and say the most stupid things, simply because they do not know what it is. I have made that completely clear. I have given the facts concerning the social credit concept.
What is the basis of fact upon which social credit philosophy is founded? First, we as a people and as a world have solved the problem of production. That is, we have now got to a position in this world where mankind can produce more goods than mankind is at present able to buy. Consequently there are more goods than mankind is at present able to sell, and this is one of the major causes of depressions and war.
Second, machines have displaced men so that production has increased and jobs have decreased, and consequently wages have decreased, the result being that there is ever present a deficiency of purchasing power in the hands of the people which renders it quite impossible for them to buy the goods which they are able to produce in normal

The Address-Mr. Blackmore

The Address-Mr. Blackmore
so that there is no scarcity of goods of any kind, you cannot have a rise in price, consequently you cannot have inflation, no matter how much money you bring into circulation; for the people will be able to buy all the goods they want, and will certainly call for no more. This is one of the great truths which must be learned by this parliament and by this generation if it is to solve the problems which confront it. Inflation is a rise in price which results from scarcity of goods. It has nothing to do with money in this modem age.
How do you overcome inflation? The first thing is to see that you have an abundance of production of all kinds so that, no matter how much people want to buy of coal and milk and cream and cheese and sugar and a thousand other things, there will be always more than they require, and prices will not rise. Such a condition can certainly be brought about in a land of abundance like ours.
Next, look after your prices. Social credit has a technique which we call the compensated discount. It means this, that the financial authority, the monetary authority, pays part of the price of goods. For example, if a pair of shoes is being sold for S5 and it is deemed advisable in the interests of Canada that these shoes shall sell at $-4 a pair, the financial authority will pay one of the dollars, enabling the consumer to buy at S4. This device brings the price down, and it can be used in the national economy all over the country. The only limit beyond which it cannot go is the amount of goods and services you have in the country: those are what make you rich and strong. This compensated discount, if applied throughout the economy of the country, will completely prevent inflation. Furthermore, credit can be and should be regulated, and would be, under a social credit regime. Finally, if necessary, if some difficulty should arise, such as a great crop failure, say of apples or something of that sort, we would have to ration that particular commodity.
What would social credit do about deflation? First of all, what is deflation? Deflation is a fall in price. Why a fall in price? Because there are more goods on the market than there is money coming into the markets to buy goods with; consequently there is a glut of goods and the prices of goods go down. Under the law of supply and demand that will always tend to happen. The present government has already introduced a system of floors under prices, which indicates that they are already beginning to see the light. Social credit will introduce floors under prices, and the^ money required will be paid from the national credit without new taxation or debt.

So floors under prices and floors under wages will be maintained, and credit will be regulated. If the banks fear to lend and begin to draw in loans, the government comes in with an agency through which it begins to lend until the banks are encouraged to go forward. Thus deflation would be checked.
Fifth, monopolies. Social credit first of all believes it can control any monopoly for the simple reason that it has control of price. All it needs to do is to tell monopoly it will not give it the advantage of price, and I think that any monopoly with any sense will come into line. If monopoly chooses to be disobedient-"uncooperative" is the word we like to use-it becomes very easy for the government monetary authority to advance money to private companies to establish businesses,-say, to produce aluminium, or whatever it happens to be; and with government bonuses and assistances that little company could cut into the markets of that big monopoly and utterly destroy it, and it would be impossible for that monopoly to avoid it. There is no need for the government to take over the monopoly and thus have a government monopoly.
Now as to the matter of cartels. There is only one really safe solution to the problem of cartels, and that is to make the country as nearly as possible self-sufficient. In this day of remarkable scientific advancement, of the development of plastics and the like, together with the vast resources which we possess, we can become very nearly self sufficient. If there were difficulties with a few cartels we would probably have to resort to some sort of international agreement, but the general attack would be as I have described it.
With respect to foreign investments in Canada, these cause a great deal of difficulty. There is altogether too much foreign capital investment in Canada. Social credit would make it the government's business to see that these great interests which have investments in Canada were encouraged to sell. The government could lend money to private interests to buy these people out and send them home with their money. That can be done, and it is going to be done; it will -have to be done. Mexico had to resort to that device in 1938 with respect to United States interests in her oil industry. It will be found as the days go by that it will be necessary for that device to be applied generally throughout the world, otherwise how can a nation govern itself, when it cannot be master in its own house?
With respect to Canadian investments abroad, such investments would not be encouraged by social credit, for the simple reason that Canadian investments abroad

The Address-Mr. Blackmore
would be unwelcome, just as foreign investments in Canada would be unwelcome. Some people will say-and I can almost see my Conservative friends thinking it-"We had to have foreign capital come in to develop this country." Yes; that was done when you still thought that you had to have money come in from outside. But we have learned that we can create our own money; we have no further need at all of foreign capital coming in.
What would we do with international debt? First, it must be agreed that any debt should be payed in goods and services, which is the only way such debts can be paid. The sooner all nations come to realize this, the better. Today the United States is rapidly coming to a realization of this truth in her arrangements with Great Britain. AIL nations will have to realize that international debt must be paid with goods and services. Then we would stimulate our own production, and we would lower our own prices in Canada by the method of the compensated discount, which would encourage people to buy Canadian instead of buying foreign; that would enable us to have a favourable trade balance. It should not be difficult at all in a country like Canada. In fact it would not be difficult if we were using a social credit system.
What shall we do about international commercial rivalry? This is one of the problems in the mind of the member for Grey North, who asked that question with, great sincerity. He is much troubled about how Canada would get her goods into foreign countries. Well, Mr. Speaker, the day has to come when we must realize that we must not force our goods into a foreign market in competition with other people's goods or in competition with the goods of that country in its own market. If we persist in so forcing our goods we shall disrupt the economy of the country concerned and begin to sow the seeds of war.
All wars are the result of hot commercial rivalries-successful commercial rivalries. That principle was definitely enunciated by Woodrow Wilson, who was one of the men who in their time knew these things. Social Credit- would trade not on a competitive basis but on a mutual aid basis. If we are financing mutual aid to various nations, why should those nations not finance mutual aid to us? If we can provide them with the things that they are unable to produce, why should they not provide us with the things that we ourselves are unable to produce? Surely they should not hesitate to do that, and I am certain, that- they would not. Imagine Britain refusing to send us good's which we cannot produce in return for
goods that we have sent to her which she could not produce! It is not conceivable; neither would it be conceivable in the case of Australia, New Zealand or any other country under intelligent government.
And so we would trade not on a competitive basis but on a mutual aid basis. We would trade the goods we have, such as aluminum, copper, wood pulp, lumber, the products of wheat, salt fish, sugar, rubber, machinery and all sorts of things which we are able to produce. We would trade all these commodities for such products as bananas, oranges and other things we need from abroad.
There would be no attempt to "blast our way" into the world's markets in any shape or form. We could reduce our price-as the member for Grey North conceived we would -by means of a subsidy, to enable other nations to buy our goods, but we would not force those goods on those nations. We saw an illustration of this concept in operation in the statement on wheat which the Minister of Trade and Commerce (Mr. MacKinnon) gave to the house recently. He pointed out definitely that we must keep the price of wheat down so that the British people could buy it. Under social credit that could be done with any commodity. If a nation wanted to buy our goods we could bring down the price of the goods by a subsidy to producers so that other nations could buy those goods without reducing the price received by farmers and other producers. That could be done on a world-wide scale, especially by a nation as fortunately endowed as Canada is.
The tremendous difference between bringing down your price-may I impress this upon the hon. member for Grey North-so as to enable other nations to buy, and bringing down your price in order to force your goods upon other nations, is a difference that must be apparent to all. The first is a blessing; the second is a curse which must result in war.
How would social credit protect Canada's economy against foreign goods-by using tariff, exchange control, quotas and embargoes? Each of these could be used, but the social credit technique is that of price discounting. If goods were coming from a foreign country underselling ours by fifteen or twenty cents per unit, all we would have to do would be to subsidize our own producers to bring down our own price to enable that article to be sold under the goods coming in. That can be done and has been done; I could point to plenty of instances in which it has been done. We need have no use of a tariff. If we could not get along without one we might

The Address

Mr. Blackmore
have to have one, and we would use it only under those circumstances; but there is no need of one, so far as I can see.
How would social credit attain monetary stabilization? First, in Canada, it would lower the price structure by subsidies to producers or compensated discount to consumers. The lower the price structure in a country, the higher the value of that country's dollar, which means that by means of the compensated price you can raise the value of your dollar in the world to any desired standard. That is the technique we would use, in that way stabilizing our own dollar, so that we would know exactly what it would be worth, and everyone else would also know. In a similar way the other nations could do the same thing. We would have to agree on prices. Social credit is absolutely opposed to having any fund, such as the Bretton Woods agreement envisages, set up with the power to dictate to a nation how its money shall be managed. What a nation shall do with its money is that nation's business and nobody else's. If they do not choose to trade with us, that is their lookout; we will get along anyhow.
The next question is, what is social credit's attitude to international trade. I have already stated that social credit is prepared to trade with any nation on a mutually advantageous basis. It will trade what others need for the things which Canada needs.
What is our attitude to the Atlantic charter? Social credit is the only known system on the face of the earth under which the Atlantic charter can be established so that there can actually be freedom from want and fear among the nations of the earth and all the earth's peoples. I defy any economist anywhere in the world to show any other system whereby that can be done. The only system under which it is possible is social credit.
What is our attitude to war? We hold that the cause of war is economic; it is fear and want. The system of mutual aid which I have indicated would entirely remove fear and want and thus remove in a large measure the cause of war. We would trade through a mutual aid arrangement instead of having competition, and thus go far towards removing the cause of war. And if after that there were still people who wanted to fight-we!!, there is only one thing to do and that is to see that our walls are strong. Social credit would see that that was the case, and it has taken that attitude ever since coming into public life. We would see that we had a

strong economy, strong armaments, strong and healthy people, well educated, strong through exercise and strong in morale.
What is our attitude to the British commonwealth and the empire? We believe that the British commonwealth is the greatest and most dependable guarantee of freedom of every kind thus far developed in the world. The greatest demonstration of democratic strength, through decentralization, is found in the commonwealth. We favour full understanding and wise cooperation with the British peoples. We insist that local sovereignty be completely and unchallengeablv guaranteed. We insist that Canada, while being daughter in her mother's house, shall be mistress in her own, with all that term implies. We believe that, with respect to the British peoples, united we stand, divided we fall.
The British have a great responsibility to discharge in the world, and the British commonwealth, on a social credit basis, could withstand any enemy on earth or any combination of enemies. No combination could then destroy it politically or economically.
We favour putting the British empire and British commonwealth on a social credit basis, and then, under God, going forth facing the future without wavering. The British commonwealth can be economically self-sufficient.
What is the social credit attitude to world organization? We are ready to cooperate. We are ready to discharge our full responsibility. But we are not willing to surrender our sovereignty to any international or other external force on earth.
What is the social credit interpretation of the world situation? It accepts God, it accepts Jesus Christ, it believes that there is a struggle between the powers of righteousness and the powers of evil -waging in the world to-day. Evil is forever seeking to enslave men, to centralize power and destroy men's freedom, politically, economically and financially. Good is with equal determination struggling to free men and to guarantee their freedom, politically, economically and financially.
The powers of evil are headed up by certain international bodies or powers. Among those powers we consider international finance to be one of the foremost.
Is Canada fitted to take the lead in the social credit movement in the world? The member for Grey North asked that question, and it was a good one. Let us see: Canada is rich in resources. She has very varied resources, almost inexhaustible resources, and she could be almost completely self-sufficient. She has industrial equipment of a very high order, and industrial skills coming out of this

The Address-Mr. Harkness
war of first-rate quality. She has administrative skill of the first order. She has scientists of high quality, as witness the great developments in plastics on a commercial scale. She has hundreds of thousands of people already enlightened in social credit, and hundreds of thousands more much interested in it, as the hon. member for Grey North indicated1 the other day. Her people believe in individual enterprise; her people are a freedom-loving people, very brave and dreaded in war. She is a part of the British commonwealth of nations and is therefore protected through that association. She is a part of the North American continent and derives protection from that relation.
She is eager to find a solution to the economic difficulties which confront her; she is eager to find a solution to the problem of war; she is fearful of failure. Where could you possibly find a nation more admirably fitted, apparently more designed and destined by Almighty God, to take the lead in the world in the solution of the world's economic problems? I commend the whole system of social credit to the most earnest consideration of all hon. members in the house and of all the people in the country as the only means whereby we can emerge from the old order of doubt, insecurity, irregularity, injustice and war, into the new order where there shall be actually guaranteed freedom from want and fear, and where people will be able to enjoy freedom of religion, of speech and of choice.

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