Social Credit vs. Social Debt

There are today, in the realm of finance, two opposing policies: social credit and social debt. The latter is supported by both oldline parties, by the socialists and communists, and by the financially-controlled press. Social Credit is gaining the support of more and more serious-minded Canadians who are making a study of the strange paradox: prosperity accompanies war and destruction, while genuine peace is accompanied by economic stress.

That we may have a clearer picture of the financial principles of, and the philosophy underlying, Social Credit, let us consider the present system of finance based upon debt, interest and oppressive taxation.

Manitoba's parliament buildings

After the First World War, the Province of Manitoba built a fine set of parliament buildings. And therein lies a story, financially speaking.

The Hon. Stuart Garson, Federal Minister of Justice (reportedly slated for the Finance Ministry!), and former Provincial Treasurer of Manitoba, gave these figures to that province's legislature in 1938:

Manitoba's parliament buildings originally cost .................... $9,400,000

Manitoba had already paid on them.................................... $9,600,000

But still owed on them...................................................... $8,600,000

In short, the people of Manitoba had already paid for their parliament buildings once, and started paying for them a second time, financially. But still they owed nearly as much as they cost in the first place.

Mr. Garson was unable to say when they would finally be paid off, if ever. But the Winnipeg Tribune calculated that of the rate of repayment during the preceding 17 years, they would be clear by 2442 A. D. — just another mere 504 years — with interest every one of those years. Just imagine the final cost!

You see, although those hardy and industrious Manitobans probably used their own timber, cement, material and labour which they possessed right in their own province, the financial policy under which they laboured would not permit them to use their resources until they first borrowed, from private banks and financial institutions, the financial credit corresponding to their own real credit. It was their own credit, of course, which they were actually borrowing. But the right to ‘monetize' this credit has been usurped by a private financial system.

Thus the people of Manitoba must pay for their parliament buildings over and over again. In this manner mounting debt and oppressive taxation has become the outstanding characteristic of all governments operating under orthodox debt finance.

Uncle Sam pays up, too

The ordinary, working, tax-paying citizen across the line is taken for a ride, financially, just as we are. The U.S. is under the same financial system. The May, 1949, issue of the Reader's Digest relates this story:

Back in the 1860's Borough fathers decreed a new road for what is now Central Avenue — a plank road. The fathers sold bonds for that plank road at seven percent interest. The plank road rotted away and Central Avenue had to be paved. It probably has been repaved many times since. But today, long after the plank road is forgotten, the City of New York is still paying seven percent interest until the bonds are retired — in the year 2147!

That plank road originally cost $390,000. When the last bond is retired, it will have cost the people three million dollars.

And Old Quebec

We may have different languages and customs, but you can be sure that we are all labouring under the same debt system of finance. The House of Rothschild made sure of that centuries ago when its founder said: "Permit me to issue and control the money a nation and I care not who makes its laws."

In 1929 the Montreal Harbour Commission built up a bridge across the St. Lawrence River at a cost of $19,000,000 It was financed by the sale of government bonds bearing 5 percent interest, and maturing in 1969. The interest amounts to $950,000 annually and, by 1969, the interest alone on this bridge will have cost the people $38,000,000 — twice the original cost of the bridge — and the bonds will still be unredeemed. There is simply no relationship between real cost (labour and material consumed in the construction) and financial cost. The people who did not turn a shovelful of sod or contribute one pound of material will collect twice as much as the people who supplied the material and did the work!

Social Debt

Thus we see that every time we wish to build a bridge, a highway, post office, city hall, school or hospital, we must first sell bonds and go into debt, which results in the interest cost alone being more than the actual cost of construction. Just think of the taxes this system demands!

In other words, every time we wish to apply labour to material and add to the material wealth of our community or province or country today, we must first add to our financial debt, interest charges... and then taxes.

This, truly, is a system of Social Debt.

Social Credit

Social Crediters maintain that it is utter nonsense that every time we wish to build a road or school, or in any way add to the wealth of the community, we must first go into debt and be burdened down for generations with interest and taxes. Social Crediters believe in paying for improvements — but paying only once.

By paying for a road or bridge or school once, instead of three of four times over in interest, then for the same expenditure we can enjoy three or four times the improvements.

Under a Social Credit financial policy, when a community or province wished to utilize its resources, materials and labour, to build or construct or enrich the Community, the necessary financial credit would be made available, without sinking the people in debt to a private monopoly which had to be repaid many times over. An independent, non-political credit commission would be charged with the responsibility of making financially possible that which is physically possible.

In other words, Social Credit stands for just plain, old-fashioned, common sense.