We have examined in past issues our economic system, and noted:
(1) That, as a result of rich natural resources and a heritage of power-driven machines and semi-automatic factories, we live in an age of unparalleled physical abundance.
(2) That this abundance cannot reach the consumer without the use of "money".
(3) And that the creation and control of our money and financial credit rests in the hands of a private banking monopoly. Thus does control of the very life-blood of our national economy rest not with the producers or consumers, but with the controllers of finance. In our last two issues we quoted extensively from the statements of bankers and official commissions to prove this contention. We now examine some of the consequences of "orthodox finançe".
During the 1930's the Western world suffered (was blessed) with huge surpluses of every kind: cotton, fruit, pork, mutton, beef, coffee, milk, grain and fish. And at the same time we were enduring depression and abject poverty: Faced with this paradox of poverty amidst abundance, what did our politicians and economic and financial experts do?
Instead of devising methods of DISTRIBUTING our God-given abundance to those who needed it, they actually formulated schemes of restriction and destruction to remove the abundance. During these years:
The US destroyed fruit, killed and destroyed millions of hogs and cattle each year, and ploughed under cotton.
Canada left her fruit and farm products to rot for lack of markets, while farmers burned grain for fuel.
Brazil burned millions of bags of coffee each year.
Argentine destroyed tens of thousands of sheep.
England threw milk down the gutters and fish back into the sea.
France fined farmers for increasing acreage.
Denmark incinerated thousands of fine cattle.
It should be noted that this apparent surplus was not really 'overproduction', for how could we claim overproduction while millions were starving throughout the world, and tens of millions undernourished, cold and hungry! Rather was it a case of widespread UNDERCONSUMPTION.
It should also be noted that is was not for lack of transportation facilities that this abundance failed to reach the consumers. Indeed, railroads and trucking fleets were lying idle, and transportation workers unemployed. The one factor lacking was 'money' in the people's pocket. And rather than adjust our financial system to fit the facts of production and reflect the physical abundance in terms of finance, our 'leaders' destroyed the abundance while people begged for bread. Money was surely the master, not the servant.
People have been led to believe that this tragic situation, and anti-Christian policy, would never be tolerated by our 'leaders' again. But what are the facts?
TIME magazine, June 19, 1950 (just before the Korean war bailed us out of our economic difficulties by supplying a 'market') described the abundance in this mechanized America, a land of milk and honey beyond Moses' wildest dreams. But, said Time, perverse economics and expedient politics have transformed America's blessing of plenty into a "plague of plenty".
Food prices were too high to the consumer, yet America was spending or lending more than $11 million a day to keep them that way. There was more food than people could eat, yet at least 15 million Americans (and over a billion outside America) could not get enough to eat. One arm of the massive Department of Agriculture was feverishly shuffling schemes for limiting farm production, while another arm was busily showing farmers how to grow and produce more.
The US government was buying up this overabundance, and, in elevators, underground caves, giant refrigerators, vacated warehouses and empty hangars, had stored up:
516,242,531 bushels of wheat and corn — enough to fill a freight train stretching 11,679 miles, almost half way around the world at the equator.
3,600,000 bales of cotton — enough to loom 90 million bedsheets.
88,000,000 pounds of butter — enough to make 495 million cakes.
316,000,000 pounds of powdered milk enough to irrigate the Wheaties of all New York school children for several years to come.
And there was also stored up, mountains of cheese, soybeans, tobacco, dried fruit and peas, rosin, cottonseed meal and other products which no one would buy and the government could hardly give away — and more was piling up every day.
Government subsidies paid to farmers — paid for by the taxpayer, of course, kept consumer prices high. Thus the consumer was paying twice, once in high prices over the counter, and again in taxes to finance the 'farm supports' to keep the prices high!
U.S. NEWS & WORLD REPORT (Sept. 23/55) said:
"New Deal farm programs of the early '30s were not as drastic, from the standpoint of compulsion, as the farm programs that the Republican Administration finds itself enforcing today. Though wheat, corn and cotton were plowed under — and little pigs killed the program was voluntarily."
This authoritative US journal then goes on to describe the great 'problem' of surpluses and the vast governmental plans to restrict acreage and reduce production. Those who use the land and resources the Creator endowed them with to grow more than a certain quota of grain, for instance, will be fined and liable to jail.
This, my dear Canadians, is right in North America — not in 1935, but 1955!
And Canada's biggest domestic headache is Wheat — not a shortage, but a surplus.
Subsidizing production only aggravates the problem by raising prices to the consumer. We must start at the other end, and subsidize consumption. Let the Bank of Canada create financial credit to finance a program of price discounts or subsidies to bring the price of goods down to the consumer. This would stimulate consumption, which is the best remedy for surpluses; and it would increase consumption without in any way reducing the income of the producer.
This is the Social Credit approach.