Extracts from a speech by Mr. VICTOR QUELCH, Social Credit M. P., in the House of Commons, Ottawa, December 1, 1953:
BEFORE THE WAR: "NO MONEY!"
"It was during the years 1934 and 1935 that the Social Credit movement was born in Alberta.
"What was the situation at that time? We had in Canada half a million unemployed, a million persons on relief, and industry operating at less than 50 per cent of its capacity.
"It was a common thing in those days to hear people criticize industry for that situation. They said:'Why does industry not expand its production, employ the unemployed, put them to work and produce the goods that people require?'
"I do not think that was a fair criticism, because at that time industry was having a great deal of difficulty in disposing of even its limited production, and industry knew only too well that if it expanded its production, it would just have that much more goods left unsold.
"Therefore we emphasized the fact that the solution surely must be to expand the purchasing power of the people, so they could buy more goods, and as the demand for goods expanded, industry would be only too glad to employ more men, expand their production and satisfy the needs of the people.
"In 1939, the banking and commerce committee met and Mr. Towers, governor of the Bank of Canada, appeared before it... I asked Mr. Graham Towers if there was any reason why the Government could not issue $200 million in money for the purpose of putting the unemployed to work, to construct a number of national projects that were urgently needed. Mr. Towers replied to the effect that it might be done, but that it was a matter of government policy.
"In the House, we asked Mr. Dunning (Minister of Finance) the same question; and Mr. Dunning's reply was always the same: that the government could not start large-scale national projects because it had not the money. The only money the government had was what it could get from the people's pockets.
"And so, during those years, we continued to lack the services we needed, refused to go ahead with large-scale irrigation projects or to build roads, houses and various other things, merely because the Government insisted at that time that it did not have the money, and that the only money available to it was money it could get from the people's pockets...
"Then what happened? In 1939 war broke out... We had a complete change in the financial policy of the Government.
"Before the war, we could not get money to do this, that and the other thing. Yet within a very few weeks of the declaration of war, the Government got the chartered banks to create for its use $200 million in new money. The Minister of Finance of that day, Mr. Ilsley, in explaining the reason the Government had taken this action, stated in words to this effect:
« We want to expand our war effort as rapidly as possible. We have undeveloped resources. We have in this country unemployment. Therefore we have created this new money to put the unemployed to work and to develop our resources in order to expand our war effort as rapidly as possible. »
"The only comment I would make on that is this. If in a few weeks after the declaration of war, the Government could create money to put the unemployed to work, why could not the money have been created in exactly the same way before the war, in order to expand the peace effort and improve the conditions of the people who, during that period of time, suffered such dire poverty and destitution?
"It is interesting to note that during the war, we never once heard the Government, or any member on the Government side of the House, say we could not do this or that because we did not have the money.
"There were just two things taken into consideration during the war in connection with the building of ships and planes and the expanding of the army; that was whether or not we had the men and the material with which to do it. Provided we had the men and the material, there was no trouble at that time in finding the money. And during the war, the Government got the banking system to expand the money supply by over $4 billion in new money...
VICTOR QUELCH M.P