Mr. Arthur Duperron was for years the oneman brain trust on the executive of the Montreal Tramway's Co. And when this Company became a municipal concern, Mr. Duperron became head executive and general-manager of the new set-up, The Montreal Transport Commission. No other individual can inform us better than Mr. Duperron on the Subway as planned by this Commission.
Not all Montrealers are convinced that a subway is an appropriate and efficient solution to the ever-increasing problem of transportation and traffic in their city. But all will have to foot the bill if the subway is built. They are, therefore, all interested in knowing what the construction of the subway would cost.
Mr. Duperron answered this question, at least in part, some time ago, in a speech before the League of Proprietors of Montreal.
The subway would not be completed all at once. A first North-South line would be put in operation, to run under St. Denis Street, between Cremazie and Craig Streets. Others would follow later on. The figures given by Mr. Duperron cover only the first section.
This part of the subway would cost 87 million dollars. To this would be added, of course, the rolling equipment, estimated at 30 more million. But this rolling equipment would be paid by the customers, the price of the fares taking care of it. So that only the 87 million dollars for the construction would weigh on the taxpayers.
Now, 87 million dollars, for just one section of the subway, is surely a large sum. But Mr. Duperron explains that it could be met by a loan at 41/2 per cent per annum, refundable over 50 years. So that the annual payment, for both principal and interest, would mean only (!) $4,400,000.
Put this way before his audience, the explanation seemed to assuage their fears.
Had they taken a pencil and a scrap of paper, or asked a schoolboy to make a mental calculation for them, they would have obtained another picture of the price to be paid for the subway.
$4,400,000 turned in year after year, for fifty years; this amounts exactly to a total of 220 million dollars.
Mr. Duperron might as well have said to his hearers:
This first section of the subway will cost 87 million dollars, but you will have to pay 220 million dollars for it.
This would be serving truth, instead of fiction, to the taxpayers. Some might have stood up and asked: “Why pay 220 when the cost is 87?“
Yes, why, indead?
And who will receive those 220 million dollars? Will they be paid to the builders of the subway to the people who supply their genius, their labour or the material? — By no means.
Taking the figures given by Mr. Duperron as a reliable estimate of the cost of building this first section of the subway, the total amount of money distributed in salaries, wages, profits, and in payment for the material, will be no more than 87 million dollars.
And yet the population of Montreal will pay in the years to come, 220 million dollars, not for the maintenance, but just for the original construction.
Who will get the 220 million, if the builders receive only 87 million?
It will go to a group of people who will not have turned a shovelful of earth, or shed a drop of sweat, or contributed an ounce of material, to the construction of the subway.
The people who toil will get, at the most, 87 million dollars. The people who just write figures in a ledger, as a permit for the others to work, will get 220 million dollars.
The permit to work costs the community the difference between the two sums. The permit to work costs more than one and a half times as much as the labour and material put together!
How can a man dare submit as acceptable this mode of financing a public project? And how can an association representing the individuals called upon to pay for it, listen to such a statement, without any one in the audience bouncing to his feet with indignation? What is the use of such a League of Proprietors?
Why agree to pay 220 million dollars after being told that it costs only 87 million dollars?
Many complaints are heard about the prices we have to pay the grocer, or the butcher, or the producers, for things procured from them. But we silently accept the burden of paying money by the hundreds of millions of dollars to people who supply nothing at all!
This is only one illustration, among thousands, of how a fraudulent system of finance puts the producers of wealth into debt to the producers of nothing.
All public debts federal, provincial, municipal — bear evidence to this monumental swindling, for swindling it is.
We build roads, bridges, schools, hospitals, out of materials and with labour supplied by the population. The food, clothes, and other needs of the builders are also supplied by the work of the population. But then, we pay for years the roads, bridges, schools, hospitals, to a set of people who have done nothing to put them up.
We fight and win wars — and then we pay them for decades to the same gang of people, who did not produce a bullet, did not touch a gun, did not shed one drop of blood to help win the war.
— What would Montrealers have to pay for their subway under a Social Credit financial system?
— According to the estimate produced by Mr Duperron, the financial cost would be 87 million. But we need not raise 87 million in taxation to pay for it.
Money is no physical entity. It is just bookkeeping. And if finance would — as it should — reflect the facts, then:
"All new production would be financed by new cash credits; and these cash credits would be recalled only in ratio of general depreciation to general appreciation.” (Douglas.)
The producers of the subway would be paid 87 million dollars, in new credits for this new production. Then the population would be charged, by the recall of credits, less than 87 million, instead of more as is the case today. The Montrealers would not pay the financial cost, but only the real cost, which is the price of the consumption incurred to produce. This would be paying the "just" price, the exact price.
A community must be made to pay for what it consumes, and not for what it produces. And yet the producers have to be paid for what they produce.
This means that the community, the consumers, must pay less than the financial cost of production; but the difference must be compensated to the producers, by some appropriate means. This is a financial matter — a matter of figures in a ledger.
The present financial system has no mechanism of the kind. Social Credit would have. The adjustment implies a mere financial operation, a book-keeping operation. Social Crediters call it the adjusted price, or the compensated price.
This adjustment would not be made arbitrarily, nor through the will of any government or of any individual. It would be the mathematical ratio of two sets of statistical figures: the estimate of consumption of all kinds over a given period, and the estimate of production of all kinds over the same period. Using the first set as a numerator, and the second set as a denominator, the fraction obtained shows the ratio of consumption (depreciation) to production (appreciation).
If this ratio is, say, 3/4 or 75 per cent, then the price to be paid for any product, by any consumer should be only 75 per cent of the financial price. The balance, 25 per cent should be compensated for, to the producer, (or seller), by a National Credit Office whose function is to make finance reflect facts.
This is somewhat technical for the average reader. But, keeping in mind that, in a correct financial system, financial credit would flow out at the rate of production and would flow back at the rate of consumption, it is easy to understand that less would be recalled than issued, production being normally larger than consumption. A community can and does produce more than it consumes; but it cannot very well consume more than it produces. Therefore, Montrealers would pay less than 87 million dollars for a subway costing, financially, 87 million dollars.
Compare this with the system which makes them pay 220 million dollars for a financial cost of 87 million dollars.
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