For almost a century the management of the monetary system has been entrusted in blind faith and absolute confidence to bankers and financiers.  Their management has ended in more disastrous failure than those opposed to the English Bank Act of 1844 ever dared to predict.

Necessity now compels us to abandon banker management and to resort to national administration of public credit and national regulation and supervision of the monetary system.

In the restoration of these prerogative powers to responsible government lies the way of establishing Democracy in the place of the oligarchical rule that banker dominion over government and trade now maintains.

By such changes, the elected representatives of the people will become the masters of the economic blood-stream of the nation, and responsible government as an expression of Christian Democracy can be maintained.

No one has any right to say that the establishment of such a Democracy cannot or will not produce both progress and prosperity until it has been given the same trial that banker rule by banker management of the monetary system has enjoyed.

Responsible government must now destroy banker rule, or banker mismanagement of public credit will destroy responsible government and the civilization that brought it into being.


4812 Belmont Avenue,
Vancouver, B.C.,
Friday, September 8th, 1933.

Gerald Grattan McGeer
January 6, 1888 August 11, 1947

Raised :  1926/05/25
Prince Arthur Lodge No. 82

Source :  Grand Lodge of BC and Yukon records.
Gerald G. McGeer, K.C.
Barrister and Solicitor
Cable Address :  McGeer

September 5th, 1933.

The Vancouver, New Westminster and District
Trades and Labour Council,
529 Beatty Street,
Vancouver, B.C.

Attention of Mr. Percy Bengough, Secretary.

Dear Sirs :

IN pursuance of the instructions contained in your letter of the 10th August, I appeared before the Royal Commission on Banking, Currency and Economy at its sittings held at the Court House in this City on the 16th ult.

In the short time at my disposal it was not possible to present a closely reasoned brief upon the many phases of the monetary and economic situation with which organized labour is definitely concerned.

The indecent haste with which the Commission is proceeding indicates that it will prove to be nothing but a mere repetition of the episodic manoeuvres that always have characterized the actions of credit dealers, successors to the moneychangers of old, when about to induce Parliament to pass or revise bad laws that will prove pernicious to posterity.

In addressing a properly constituted, impartial tribunal charged with the great responsibilities that this Commission has undertaken, all will agree that both fact and argument should be presented in restrained language, advancing plain reason and simple logic.  There is, however, a proper time and place in advocacy for appeal, conciliation, argument and denunciation.  Upon this occasion I determined that the course most likely to produce results beneficial to labour called for an evangelical bombardment of invective directed at the private money system with which the majority of the members of the Commission are actively associated, and in which they have a profit-seeking and proprietary interest.  In my opinion it would have been useless to present any scheme of national banking or planned economy to such a group.

The Commission consists of :

The Right Honourable Lord Macmillan, P.C., K.C., a man who has risen from the humble position of a Scottish ministers son, and who is now steeped in the tradition of institutionality that has generously bestowed upon him some of the highest honours in the gift of an aristocracy that is based upon money power.

The Honourable J.E. Brownlee, K.C., lawyer premier of the Alberta farmer government.  Sir Charles Addis, K.C.M.G., a Director of the Bank of England, an institution whose monetary policy has brought Great Britain and every other nation, including Canada, which has attempted to follow it, into a veritable chaos of unemployment and bankruptcy.

Sir Thomas White, P.C., K.C.M.G., Vice-President of the Canadian Bank of Commerce, and Canadian war-time Minister of Finance, under whose ministry war-time rates of interest charged to government for credit loans were increased by 50%, while, as an added inducement to credit dealers to plunder a nation at war, Victory Bonds carrying 5½% were issued free from taxation.  He was Minister in 1914 when $10,000,000 of Dominion legal tender currency notes were issued unsecured by gold and paid out on account of the Canadian Northern Railway, the bankrupt undertaking of MacKenzie & Mann.

Beaudry Leman, B.Sc., C.E., General Manager Le Banque Canadienne Nationale, was formerly President of the Canadian Bankers Association.  Mr. Leman is reported, in an extract from The Organizer, Vol. XII, No. 3, Page 39, as stating on November 16th last to a meeting of the Purchasing Agents Association :

A symptom of that disorderly metabolism may be found in the attempt to maintain high wage rates and reduce the number of working hours.  I suggest reverting to a twelve or fourteen-hour day of labour.

Now while it is quite true that on the following day this bald statement was denied and qualified, the correction clearly indicated Mr. Lemans adherence to the outworn theory of banker management under which bankers, by lowering interest rates and encouraging borrowers to accept credit loans repayable in money, create booms of prosperity.  And then, by raising interest rates and withdrawing and withholding credit from circulation, precipitate depression crises.

This theory compendiously described as bank rate policy permits the banker to profit by loaning the people credit when they do not need it and to take their securities away from them by demanding repayment in money which the borrowers cannot secure for the simple reason that it does not exist.

In describing the effect of this policy on business and wage-earners, the Macmillan Commission report says :

Its efficacy depends upon reducing business profits and increasing unemployment up to whatever figure is necessary to cause business men either to decrease their cost by additional economies or to insist on and their workers to accept a reduction in wages.  (Section 221.)

In view of the fact that our railways, the largest employers of Canadian labour, are at the present time demanding that a substantial section of their employees accept a further cut of 10% in their wages, and at the same time the government is encouraging the raising in the level of the prices of necessities, the attitude of the members of the Commission to bank rate policy is of public interest.

Lord Macmillans attitude may, I think, be properly inferred from the language used in describing a theory of trade management employed by bankers which involves the reduction of business profits, the increase in the hours of labour, the reduction of wages and the increase in unemployment, which is contained in Section 218 of the report of which he is the author.  It reads :

Bank rate policy . . . is a most delicate and beautiful instrument for the purpose.

I am afraid that wage-earners, from whose ranks the army of the unemployed has been developed, will find difficulty in agreeing with this conclusion.

Labour, industry, commerce and academic economy are not represented on the Commission.  It is a bankers court of enquiry.  The destiny of the nation, the well-being of the people and the general standard of living are placed within the power and under the control of men engaged in a business that prevents them from acting with freedom in the public service.  The plain fact is that the government has entrusted the standard of living of the people to the care of the very men that the government should have guarded the people against.

No provision has been made to provide the people with Counsel for the purpose of protecting the interests of the public.

In view of the power to establish facts and to propose changes in our Canadian banking and currency laws, now vested in Lord Macmillan, I think there are certain matters relating to his public service in Great Britain with which you should be acquainted.

As the Right Honourable H.P. Macmillan, K.C., he was Chairman of a Royal Commission appointed on the 5th day of November, 1929, by the British government :

to enquire into banking, finance and credit, paying regard to the factors, both internal and external, which govern their operation, and to make representations calculated to enable these agencies to promote the development of trade and commerce and the employment of labour.

The Committee, consisting of bankers, business men, industrialists, economists and representatives of labour, filed their report on June 23rd, 1931.  For his service the Chairman was apparently appointed to the Peerage along with Philip Snowden, who was responsible for his appointment and who is now the most outspoken champion of the Bank of England, Montagu Norman and the gold standard.

In a reservation to the report filed by Sir Thomas Allen and Mr. Ernest Bevin, the following disconcerting statement is made :

We also desire to point out that the Committee decided to examine monetary policy only on the basis of the gold standard and, therefore, no alternative was examined or discussed.

This decision of the majority members of the Committee, unsound in law, satisfied the desire of and served effectively the private money system which secures its power and profit from the shortage of money that the gold standard deception maintains.  No matter what the national situation was, there was no good reason why an alternative basis should not have been fully considered.

Within three months of the filing of the report, the policy of allowing the Bank of England, as a private profit-seeking corporation, to manage the monetary and trade policies of Great Britain, which Lord Macmillan and a majority of the Committee endorsed, had reduced Great Britain to a state of bankruptcy.  England was forced to abandon payment in gold, but she has not yet repudiated the private management of public credit, nor has she abandoned the gold standard insofar as it denies to government the right to issue national currency and public credit free of interest charge, and compels the government to pay an unnecessary toll of interest to bankers for the public credit now used to finance public enterprise.

That is the outstanding feature of the gold standard money system from a bankers point of view, and the part to which the public, unfortunately, give the least attention.

Canada, Great Britain and the United States still maintain this feature of the gold standard.  Certainly the Bank of England has not changed the attitude with which it dominated the Macmillan Committee in 1931.  It was openly associated with the gold standard group which wrecked the economic conference recently abandoned in London.

There is no good reason for believing that Lord Macmillan in Canada in 1933 will repudiate Lord Macmillan in England in 1931 by disagreeing with his colleague Sir Charles Addis who, as a Director of the Bank of England, is now one of the officiating priests in the High Cathedral of Usury.

It is difficult to believe that Lord Macmillan and Sir Charles Addis were selected by the Right Honourable Mr. Bennett for any other reason than that their views on fiscal policy coincide with those of Mr. Bennett, who is reported to have publicly stated as recently as September 1st the following :

The monetary committee of the World Economic Conference accomplished a tremendous amount of good.  It reaffirmed gold as the only satisfactory medium of exchange . . . It was also agreed that paper money must have a backing of metal reserves . . . Canadas national life depends on the maintenance of her position as a great exporting nation and therefore this country cannot experiment with shorter hours of work and higher rates of pay.

Apparently Mr. Bennett, at the time of Lord Macmillans selection, had fallen completely under the spell of the men in London who were conspiring to enslave mankind with a gold standard money system.  He is willing to permit international credit dealers to do to the Canadian wage earner and wealth producer what President Roosevelt definitely refused to permit them to do to the wage earners and wealth producers in the United States.

Under such circumstances the appointment of Lord Macmillan, Sir Charles Addis, Sir Thomas White and Mr. Leman to investigate the Canadian monetary system should be viewed by all wage earners, business men and wealth producers with fear and grave misgiving.

In the face of the charge made by men in every walk of life that the existing economic disaster is due in substantial measure to the mismanagement of the banking system by banking authorities, this Commission, consisting of bankers and a safe chairman from the bankers point of view, offers a unique example of a group of men conducting an investigation in respect of matters wherein the conduct of some of the members of the Commission should properly be the subject of enquiry.  If the charge were made that this Commission might be likened to a thieves kitchen court, in which the wrong-doers were both upon the Bench and in the Jury box, I do not see how it could be successfully refuted.

This Commission stands condemned under the ancient truth that propounds this economic postulate :

When the lucrative profession of usury becomes likewise a post of honour, the State is ruined and the people are doomed to the wretchedness of destitution.

I cannot see how this Commission can be expected to even consider the establishment of a national banking system empowered to manage public credit, other than to find ways and means of condemning it.

I cannot see how bankers can investigate their own mismanagement.

Nor can I see how this Commission can investigate the management of national currency and public credit during the time that Sir Thomas White (formerly connected with the financial groups closely associated with MacKenzie & Mann and the Canadian Bank of Commerce) was Minister of Finance.

It is impossible to believe that Sir Thomas White and Mr. Leman can, with any degree of comfortable safety, conduct a searching enquiry into the credit peregrinations of Sir Herbert Holt as President of the Royal Bank of Canada ;  nor are they likely to disclose the more than significant relations that exist between finance and industry when so prominent an industrialist as Sir Charles Gordon presides over the destinies of the textile industry and the Bank of Montreal.

There is not the least prospect of this Commission investigating and disclosing the truth in detail of the transaction last November wherein the government advanced to the banks $35,000,000 in Dominion legal tender notes by making a double shuffle of Dominion 4% notes, bank credit and legal tender currency notes.  At the time the issue was made the Prime Minister declared that :

It was in accordance with the idea that the easing of money is highly desirable in the interest of business recovery,

indicating that credit was tight and would be loosened up.

The confusion that was engendered when Mr. M.W. Wilson, as Manager of the Royal Bank at its last annual meeting, declared :

At no time during the present depression has it been necessary to withhold bank credit for commercial purposes when proper security was offered,

will no doubt remain undisturbed.

The attitude of this Commission in Canada to the great problem of public management of public credit will be identical with the attitude taken by Lord Macmillan and the majority of the members of his Commission in 1931.  It will not even be considered.

It would be a great mistake to permit the public to believe that Lord Macmillan is either representative of the progressive thought of commercial Great Britain or that he was in any way a contributor to those sections of the Macmillan report that are now worthy of consideration.

In less than two short years passing events have proven the main report, the only part with which Lord Macmillan was associated, to be unsound, impracticable, wholly in error in its interpretation of established fact, and wrong in every detail where the anticipation of future possibilities was assumed.

That commercial Great Britain is no longer willing to accept blindly the blind and misguided leadership of the Bank of England and the author of the Macmillan report is now definitely indicated.  As recently as July 20th of the present year I received a letter from the Secretary of the Empires most representative commercial and industrial organization, the London Chamber of Commerce, in which he said :

I think we all owe a very great debt of gratitude to the American President for having defeated the conspiracy at the Economic Conference to get the world back on to gold.  I agree with you, however, that unless he appropriates the national credit in order to give the people of the States the necessary purchasing power to enjoy the vast abundance of real wealth which is at their disposition, his domestic policy must in the long run fail.

This view is by no means the personal view of Mr. A. deV. Leigh, the Secretary.  It is expressive of the viewpoint of the Chamber as presented from time to time by the writing and addresses of Lord Melchett, its President, and the views that appear in its official publication, the London Chamber of Commerce Journal.

In the July, 1933 issue of its official publication, that great organization of Great Britains industrial leaders repudiates the policy of the Bank of England and the recorded views of Lord Macmillan and Mr. Bennett in these plain and unmistakable statements :

Having evaded recognition of the root cause of the trouble, which, as has been consistently stated by the London Chamber of Commerce for the last eighteen months, is a vicious monetary system, the Conference will now concentrate upon trying to mitigate effects.  The problems of tariffs, exchange restrictions and quotas, cannot be solved until the monetary system has been reformed, nor can prices be raised and stabilized.  There is about as much chance, with the restoration of the old monetary system in sight, of inducing the nations to modify their tariffs or exchange restrictions, as there would be of persuading, by argument, a drowning man to leave go of a lifebuoy.  He must first be lifted out of the water, lifebuoy and all, and then finding himself safely seated in a boat he will begin to wonder why he is hanging on to the lifebuoy and will voluntarily let go of it.

That the conventions of the International Gold Standard are so fundamentally opposed to modern social and economic conditions that no government could, even if it wished, give effect to them, must be evident to anyone who is prepared to recognize that he is living in the Twentieth, and not in the Nineteenth Century.

The International Gold Standard system is an anachronism in the Twentieth Century ;  it can never again function, but as its high priests still hold sway over the nations and regard it as sacrilegious even to discuss alternative systems, there appears nothing for it but to await the further inevitable collapse of the structure built upon it.

In the face of this conclusion expressing the opinion of unbiased and unquestionable authority, the appointment of Lord Macmillan, a Director of the Bank of England, and two Canadian bankers, to find Canadas way out of depression might well bring the people to a realization of Mr. Bennetts public warning :

Nothing but the Grace of God can save us in this crisis.

Well, there is little likelihood of God responding to the prayers of a people whose accepted rulers repudiate the economic implications of Divine statute by resting the political economy of the nation upon a foundation of usury, greed and guile.  We are headed for danger and we may come to know in tragic experience the real meaning of the expression :

The iron heel of ruthless oppression.

In appearing before the Commission in Vancouver I stated :

The Macmillan Committee Minority Report

THE Macmillan Committees report will be recognized by historians as an epochal monument in the records that mark the ordered progress of the evolution of enlightenment.

I believe this to be true because the minority members of the Committee were skilful enough and sufficiently wise to write in to the main report qualifications and findings of fact and to lay down specific recommendations, from which can be drawn a plan of fiscal and economic reconstruction and policy that will satisfy the needs of twentieth century progress.  Everything and more than Roosevelts Brain Trust has yet attempted was considered and proposed.

What I think should be treated as the report of the minority of the Macmillan Committee, with which Lord Macmillan is not associated, contains a definite scheme of national management of public credit, the deliberate regulation of domestic and international trade and the use of public credit as the means of financing public enterprise, social service and an improvement in the general standard of living.

My conclusion in this regard is based upon the following extracts which I believe correctly summarize the conclusions that the minority, consisting of J. Maynard Keynes, Reginald McKenna, Sir Thomas Allen, Ernest Bevin, J. Frater Taylor, A.A.G. Tulloch and Sir Walter Raine, would now agree upon and present as the minority findings, if the report were being written today :


(1) The Bank of England ought to be transformed into a public corporation.  (Page 240.)

(2) The monetary system must be a managed system, operated by individuals placed in a position of unchallengeable independence.  (Section 280.)

The acceptance of these conclusions would completely destroy the bankers monopoly of public credit management for private gain.  Public service and private profit do not go together.


(3) The vicious circle is now complete.  The decline of new enterprise has reacted adversely on profits and prices, and the low level of prices stands in the way of new enterprise.  It is for this reason that some of us think that in the domestic field it may be necessary to invoke governmental enterprise to break the vicious circle.  (Section 316.)

(4) The best hope of a remedy lies in a monetary policy designed to increase the volume of purchasing power.  (Page 190.)

(5) It is not necessary that the volume of note issue (a fortiori, or the creation and issue of national bank credit) should continue to be regulated as it is now by reference to the amount of gold held in reserve.  (Section 148.)

(6) Since the bankers as a whole under banking practice maintain a cash proportion of deposits of roughly 10% of the cash held in reserve (i.e., legal tender paper money borrowed from the Bank of England or the Department of Finance in Canada) the bulk of the bank deposits arise out of the actions of the banks themselves, for by granting loans, allowing overdrafts and purchasing securities, a bank creates a credit in its books which is treated as the equivalent of a deposit of money.  (Sections 71 to 74 inclusive.)

(7) The theory that governmental expenditure in the promotion of public enterprise and social service is restricted by the accumulated savings available for investment is erroneous.  When governments distribute wages by financing public enterprise with national currency and credit, the volume of capital for investment is increased.  (Section 47 of Addendum I, Page 203, and Section 24 of main report.)

(8) If governments pursue an inflationary policy, i.e., meet expenditures not out of revenue, but by the issue of paper currency (or the creation of credit in a national banking system), forces are set in motion increasing profits and wages and additional spending arises.  (Section 24.)

During the war period the bank deposits in Great Britain rose from less than 1,000,000,000 to more than 2,000,000,000.  In the United States they were increased from $18,000,000,000 to $37,000,000,000, and in Canada the increase was from less than $1,000,000,000 to $2,400,000,000.  Our prosperity continued until this enormous increase in purchasing power was withdrawn from circulation by interest and profits allocated to capital.

The fact that the total accumulation of money wealth alleged to be on deposit in the banks in 1914 was increased by more than 100 per cent during the period of war when wealth in the form of life and property was being destroyed proves that the creation of purchasing power upon which progress depends is an independent economic function of the government.  The fact that the credits were created in private banks does not affect this conclusion in any way because the banks themselves are the creatures of the government, taking their right to operate from the charters issued under the banking laws.  They are merely exercising a delegated authority of government.

By nationalizing the management of the issue and circulation of national currency and public credit, the government becomes possessed of the economic organization from which may be secured an inexhaustible supply of governmental purchasing power.  This purchasing power can be used to finance progress and eliminate unemployment, by advancing the intellectual and cultural tone of public opinion and the health and contentment of the people.

Governments, by paying national spending power out for public enterprise and social service that improve the outlook and contentment of the people as a whole, are investing public credit in the best reserve that can be developed for the purpose of maintaining the stability of government and the economic stability of the social system.  It is in this power of government to create and issue its own purchasing power that we find the way to extend to mankind the enjoyment of the standard of living that an age of plenty warrants.

The adoption of these conclusions of the minority members of the Macmillan Committee would deny to the banker the right to create purchasing power in the bankers books by the mere stroke of a pen, but it would open the way to the conquest of poverty.

That conclusion is axiomatic.  Surely, what the banker has been able to do with the manipulation of credit for the banker and the financier can be done for the benefit of the people and the State.

The lucrative business of converting public credit into private bank credit and loaning it at interest to the government at the expense of the tax-payer as a private bankers monopoly would be eliminated, and the use of public credit as the means of financing twentieth century progress would be restored to responsible government.  Taxes other than regulatory would, like the gold standard, become relics of the illiterate past.

Public credit would become the economic blood-stream of the social system, and the going concern activity of human progress would take the place of gold as the security for the value of all wealth, real and representative, including gold, silver, paper currency and credit in the banking institutions.

By these findings of fact, the members of the Committee responsible for them have shown the way by which the purely artificial shortage of buying power can be overcome simply by eliminating the impossible money and credit cost that the private money system imposes upon the circulation of credit as the purchasing power of government and commerce.  They point to the way that will serve our greatest necessity, namely that of financing both government and progress.  By changing the administration of public credit from a private profit-making privilege to a public trust, the spending power of government can be increased and the buying power of the consumer can be sustained.


(9) Gold reserves are held today solely to meet temporary deficiencies in the balance of international payments.  (Section 340.)

(10) The circulating media consists overwhelmingly of paper money and bank deposits.  It is this volume of purchasing power which directly affects the price level and not the amount of gold which may be held in reserve.  (Section 45.)

(11)  There is nothing inherently impractical in the exercise of the governments power to deliberately control the price level.  We should be ready to attempt the task and to gain experience by practice.  (Section 210.)

(12)  International trade can and should be regulated and controlled by deliberate management.  (Section 41, Addendum I, Page 201.)

Here we find the sacred power of gold repudiated and a common-sense recognition of the necessity of setting up a system of regulated trade and planned economy under which the people can maintain a system of properly balanced government.

The minority members of the Committee, in addition to these specific qualifications and conclusions, fully discussed the possibility of eliminating unemployment in Great Britain by State-aided industrial activity ;  the promotion of public enterprises such as the electrification of the entire railway system ;  the reclamation of land by drainage ;  and the rebuilding of the slum areas in cities.  Their proposals were directed to breaking the depression by finding the means of distributing wages.

Recognizing that there could be no substitute for the weekly pay cheque that provides the necessities and meagre comforts of the workers humble home, they tried to get Lord Macmillan and his associates to recommend a programme more far-reaching than that which Roosevelt has inaugurated.  They were unsuccessful in this attempt.  They failed in their attempt to establish that the maintenance of the right of men and women to living wages is a more sacred responsibility of government than is the right of the usurer to the collection of interest, now nothing but the wages of book-keeping entries, because of banker opposition.

The distinguished English economist, Mr. J. Maynard Keynes, the minority leader on the Committee, recently effectively summarized the attitude of the minority by saying :

Let us rebuild our market within the area we control and by State action enforce a decent level of wage standards.  To do this, we must reorganize our whole economy, develop our resources to the full and maintain armed forces, not for conquest but only for the adequate defence of a peaceful Commonwealth.

Upon such a scheme the nations of the Empire can co-operate with advantage to all.  Under it the Empire can meet successfully the competition of Russia, Japan, United States, and the gold block nations headed by France.  But it would be ridiculous to expect that Lord Macmillans present colleagues would request of him (or that he would agree if they did) that he swallow his own report of 1931 and adopt as his report for Canada the findings of the minority of the British Committee.  If there were the least danger of his following any such course, you may rest assured that he never would have been appointed.

It is therefore, in my opinion, futile to go to this Commission for relief.  I think that Labour bodies throughout Canada should take up the fight for monetary reform and that they should be prepared to place their representations before Parliament when the Bank Act comes up for its delayed decennial revision in the coming Session of Parliament.

I enclose resolution which I think should be passed by all Labour organizations in Canada, for presentation to Members of Parliament, the Senate and members of the Provincial Legislative Assemblies.

I also enclose the outline of a plan for Canada based largely upon the minority report of the Macmillan Committee, proposing the establishment of a national banking system, planned economy and managed domestic and international trade which would not only take us out of the present depression but which would give us some measure of permanent security and economic stability in the future.

I also enclose an outline of the arguments which I think justify the plan and which are sufficient to support the proposed resolution.

May I take this opportunity of expressing my appreciation to you for the confidence you have extended to me by placing in my hands the conduct of the presentation of your views on matters of such vital importance to organized labour and to the wage earners of this and every other part of the Dominion of Canada ?

Yours very truly,



THAT the Canadian Parliament and the Legislative Assemblies of the various provinces of the Dominion be requested to co-operate in establishing a national banking system, a judicious scheme of taxation and a plan of domestic and international trade regulation for the purpose of permitting the Canadian people to enjoy in safety, peace and security the progressive rise in the standard of living that can be sustained by the properly directed application of the citizens energy and intelligence to the nations resources and her possibilities in the realm of international trade.


EDUCATION, by improving the practical and cultural advantage for all classes of people, has established an ever increasing demand for all manner of goods and services.

Science, serving industry and commerce, while eliminating the need for human wage-earning energy, has established the means of supplying all such demands with comparative ease.

Our existing monetary system has failed to maintain in active circulation the volume of medium of exchange required to permit available supply to satisfy existing demand.

In a hopeless and vain endeavour to reduce costs of production so that industry could survive in the face of a declining volume of purchasing power resulting from the elimination of wages and the demand of capital for profit and interest, we have been pursuing a course which instead of closing the breach has actually widened it into chasm proportions.

As a result, we have now two real problems to solve, and they are :

(1) To provide the means of keeping all those whom industry and commerce can profitably employ engaged earning wages.

(2) To provide wages and buying power for those whom modern industry and commerce do not need.

In a word, our real problem is to find a way to finance unemployment into the leisure of progress that should be the natural complement of an age of plenty produced by superior intelligence.

Having passed suddenly out of the era of scarcity when the search for necessities blinded us to everything but an accumulation of buying power wealth, we now find ourselves lost in a jungle of nauseating impotency, and wandering in a mystifying dilemma simply because abundant supply is prevented from satisfying an equally abundant demand by a selfish and preposterous mismanagement of public credit.  A complete change in that management must come ;  otherwise, our civilization will be destroyed by the weirdest of all anomalies, viz., that we have educated ourselves into a state where we can create an abundance with ease, and yet we are not sufficiently intelligent to employ the means at our disposal to make serviceable but a small portion of what is available.  Uneducated savages, following the impossible teachings of witch doctors, might suffer in that way.  But it is impossible to believe that an enlightened people will long endure so patent a monstrosity.

In rehabilitating our economic structure, we are compelled to attack the problem as a whole, and we must recognize that the keystone of the economic structure is to be found in the national administration of public credit.

If all we had to do was to solve the problem of providing wages for those whom industry and commerce can employ, Roosevelts administration of the N.I.R.A. would be sufficient, but that is not enough.  President Roosevelt on March 4th was like a man who owned an oil well and a refinery, who had been given an automobile pointed in the right direction on a down-hill grade, with an empty gas tank, a broken steering gear and flat tires.  Incidentally, he had no money and the automobile was mortgaged to the limit.  Now he has fixed the steering gear, pumped up the tires, jumped aboard and loosened the brakes and has moved off in an ecstacy of wholly unjustifiable satisfaction.  When he comes to the foot of the hill, and he appears to be almost there by now, he will find that he must fill the gas tank.  Without any money to buy with, increasing the existing mortgage on the automobile that cannot now be paid, even if it could be done, will not relieve the situation.  Surely intelligence would suggest that he use his own gasoline.  By the same reasoning, the government should use its power to create and issue money and credit.

Unless Roosevelt nationalizes the Federal Reserve banking system and uses the power of the American government to do what Lincoln did during the Civil War and what the bankers were permitted by the governments to do during the recent war, viz., to create the purchasing power of government necessary to put the people to work to save the nation, the N.I.R.A. policy will take the United States into the worst economic calamity that it has ever experienced.

To some this analogous illustration of the economic organization may appear to be somewhat overdrawn, but the fact is that the analogy is fairly complete.  A social system operating under planned economy must operate as an organization equipped with the supply of purchasing power and the means of effectively distributing it.  It must move in a progressive state, properly equipped with a steering organization and the regulatory power that prevents it from moving too slow or too fast, or falling to pieces.  And further, an automobile cannot run without fuel and a social system cannot operate without buying power.

Our advancement in the science of civil government and popular education, coupled with our technological progress in the realms of trade, finance and taxation, places the permanent solution of this problem well within the limits of practical possibility.

The fiction that national currency must be redeemable in gold was finally killed in the British House of Commons when, in 1925, the Gold Standard Act, suspended in 1914, was changed and under the new Act the Bank of England legal tender note, the pound sterling, ceased to be convertible into gold, thus proving that the government can create money independent of gold.  Legal tender money and the purchasing power medium of exchange, whether it be money or credit transferred by cheque, is therefore a creature of law and its creation and circulation constitute the exercise of a supreme prerogative power of governmental authority.

Now that men are sufficiently emancipated from illiteracy to read, write and understand the rudiments of arithmetic, we are able to escape the limitations that a shortage of money of intrinsic value imposes.

We have already adopted the general use of token currency and bank credit transferred by cheque, neither of which is redeemable in gold or money of intrinsic value.

By adopting the use of token currency issued under the currency laws of the nation and bank credit transferred by cheque, we are now able to use an accounting system under which the shortage of money that past ages suffered from need no longer be a retarding characteristic of the progress of civilization.

The mountain of public and private debt that has developed under banker rule during the last 100 years is slowly forcing upon popular opinion a complete change of attitude to economic theories that have long been treated as sacred dogmas of sound monetary policy.

The proposition that there was safety in banker management of the monetary system and the theory that governments could not to the advantage of the general community issue national currency and credit free of interest charge for the purpose of financing public enterprise are now openly questioned.

Once these great fallacies are so recognized the public will soon demand that government take over the credit machinery and provide the purchasing power medium of exchange necessary to finance progress.

Then there need be no unemployment and there need be no involuntary destitution.  Government will have at its disposal the means of financing the progress that will provide work for everyone.  This is true because for the same reason that a man possessed of money can invest it in education, health and the amenities that add to individual contentment ;  governments with power to issue token currency and public credit, through a national banking system, can invest that spending power of government in the promotion of all the public enterprises and social services now necessary to eliminate unemployment and to promote the wisdom, health any contentment of the people.

We will soon learn that a reserve of human intelligence, health and contentment will provide a better security for the nations purchasing power wealth than was ever supplied by gold.  All argument to the contrary merely serves to delay the progress and prosperity now possible.

We are poor and bankrupt simply because a shortage of purchasing power in active circulation has been designedly developed by a vicious monetary system.  But the system that has caused the disaster has also developed the possible remedy.

We have perfected the technique of substituting credit for gold and money in the realm of capital.  We have perfected the technique of substituting a credit system based on accounting for a money system based on gold. We have developed the science of levying and collecting taxes to the point where we can now appropriate to the treasury of the State all manner of real and representative wealth.


To overcome the artificial shortage of purchasing power and to escape the bankruptcy that the equally artificial load of interest-bearing debts has developed, we must correlate these two great economic forcesthe power to issue and circulate national currency and public credit as the medium of exchange and the power of government to levy and collect taxesso that the continuous circulation of an adequate volume of consumers pursing power can permit available and realizable supply to satisfy existing and possible demand.

We must abandon the false ideas that national currency and the public credit purchasing power medium of exchange, like money of fixed intrinsic value, can only be issued against some form of fixed and endurable wealth or that upon issue it must be subject to a bankers toll of interest or that it must be redeemable in gold or some other tangible form of real wealth.  Such theories are unsound in economy and were invented solely for the purpose of aiding the usurer in his desire to accumulate the wealth of others by using money and credit as instruments of appropriation.

The shortage of consumers buying power and the languishing circulation of the existing volume are purely artificial.  Now that money debts are no longer redeemable in gold, national token currency and national bank credit can be issued and circulated as the life stream of the social system, serving it in much the same way that water properly provided in supply and intelligently regulated in distribution serves an irrigated area.


Necessity compels us to recognize that public credit used as the purchasing power of government and as consumers buying power must be issued and circulated by the government through the social system and back to the government by taxation and deposit, leaving in the possession and to the use of the people the amount required to advance progress and the general standard of living.  In this way public credit, which belongs to the people, can be used to aid in the production and consumption of wealth.  This is the only practical way by which an enlightened civilization can effect the division of labour and intelligence that is necessary to the creation and distribution of the abundance of wealth that an educated people can produce and use.  Therefore, the circulation of credit purchasing power constitutes the very foundation of an enlightened nations economic stability.  As a sacred trust and over-riding responsibility, its administration by government stands first in all the duties that responsible government must assume.  It is second to nonenot even to the administration of justice and the maintenance of order.

Anyone can imagine the chaos that would ensue if our judges, who are the managers and administrators of our system of justice, were permitted, with the approval of public opinion, to reap unlimited private gain in the dispensation of law.  The identical chaos that would develop under such circumstances now appears in the realm of economy for the simple reason that we have farmed out to a profit-making monopoly the management of public credit which now constitutes the economic blood-stream of the social system.

The present monetary system based upon the theory that public credit must be converted into private bank credit which the banker issues and loans at interest repayable in money, violates the elementary principles of reason and common sense.  The financiers who could ever use judiciously so extraordinary a power to accumulate the wealth of others never have and never will be born.  We must change that system or perish.

We have reached the stage, when an era of conscious and deliberate management must succeed the era of ruthless competition and unbridled plunder that has prevailed ;  in other words, we stand in need as never before of a definite national policy that will rise superior to the power of predatory monopoly in finance, industry and commerce.  We are now at the parting of the ways.  We are experiencing a natural period of adjustment during which we can, if courage and wisdom do not desert us, effect changes that will usher in an era of peace and plenty that will constitute a period of progress and prosperity, the like of which humanity has never dreamed of enjoying.


THAT, then, are the essential requirements in the management of money, credit and trade that will give us some measure of a sound and stable economy and some semblance of permanent prosperity ?  They may, I believe, be enumerated as follows :


(a) A national banking system empowered to manage gold and silver reserves for the purpose of settling international balances, to mint coins, issue national currency notes and bank credit independent of metal reserves and free from interest charges for the purpose of financing all public enterprise and social service, to assist in the promotion of domestic and international trade, and equipped to maintain deposit and chequing accounts for public and private accommodation.

N.B.By changing the issue and circulation of national currency and the conversion of public credit into purchasing power from a privilege of private monopoly to a public utility, the disastrous cost of interest now incurred in financing governmental enterprise by borrowing private bank credit and private finances can be eliminated.

By changing the regulation and control of the circulation of money and credit purchasing power from a bankers licence to a public trust, we can, through the maintenance of an adequate volume of consumers purchasing power, avoid the movements of the credit cycle and the evils of inflation and deflation.

The adoption of a national banking system does not mean that the mismanagement of public credit by private enterprise will be followed by the public management of private finance.  It does mean, however, that the issue and management of public credit and finance will be restored to the government as the trustee of the people, where it properly should be.  The private banker can carry on under proper regulation the legitimate business of the merchant banker, namely that of financing private enterprise with his own and his depositors funds.  But he cannot issue private bank credit as the purchasing power of bankers.  That is a profit-making privilege that belongs to the people.  It is part of the public domain which no government has the right to hand over to a private monopoly.


(b) A department of taxation empowered to levy taxes for the purpose of preventing the circulation of purchasing power from centralizing in the possession of the few or losing its medium of exchange value by virtue of excessive accumulation.

N.B.A government that develops a national banking system can do away with all but regulatory taxation.  Governments exercising for the benefit of the nation and the people their prerogative right to issue and circulate national currency and national bank credit do not need to borrow either private bank credit or private finance.  That burden to the taxpayer can be dispensed with.  What then will be the security for the national bank credits that will accumulate ?  Exactly the same, only better, security than today secures the accumulation of bank credits in the private banks.  The going concern value of the assets that constitute the wealth of the nation offers a better security than that which the bankers now hold as security for the depositors money wealth.  What will take the place of government interest-bearing bonds as a means of safe investment for accumulated savings ?  A vastly-increased opportunity to invest in all manner of industrial and commercial activities engaged in supplying the demands of an educated people, adequately supplied with wages, superannuation allowances, pensions and social service accommodation.

The taxes available to achieve the continuity of circulation of purchasing power are now well developed.  They are income and excess profit taxes, probate fees and succession duties, licence and excise fees and the general sales tax.  By the judicious application of these taxes, the volume and the continuity of the circulation of purchasing power can be maintained at whatever level is desired.  The standard of living can be raised and wages can be distributed to men working whatever hours a day are necessary.  Confiscatory taxation will become, like the gold standard, a barbarous relic of the illiterate past.


(c) A department of economic control and regulation empowered to keep prices, wages, investment, production and distribution of wealth within the bounds of reason and judicious requirements.

N.B.Now that the fallacy that gold can function as an automatic regulator of currency values and prices is exposed and in view of the fact that no one has yet been able to produce a currency formula under which the circulation of purchasing power can be made an automatic, self-regulating operation, there is no way other than that of direct and deliberate control by which the depression of glut and actual over-production can be avoided. The ease with which an abundance can now be produced compels the establishment of regulatory authority ;  otherwise, education and progress must end in a chaos of confusion.


(d) A department of international trade and credit possessed of managerial and regulatory authority and empowered to keep international buying and international selling in reasonable equilibrium and empowered to purchase all exportable surpluses with Canadian credits at Canadian prices, and to promote international trade by barter, sale and purchase, to liquidate foreign debts and assist international traders.

N.B.Only in this way can international trade balances be kept within the limits which are settleable out of available gold and silver reserves.  This is the only practical substitute for the futile attempt that has been made to manage international trade by tariffs, dump duties, embargoes, trade agreements, the fluctuation of international exchange under the gold standard, and war.

The price of wheat can be fixed at the same price for the Canadian farmer that the government of France has now fixed for the French farmer, namely $1.55 a bushel.  With the price of wheat as the base, the price of lumber, metal, and all other exportable commodities, manufactured or raw, can be fixed.  To that base price the level of wages and prices in the realm of domestic trade and commerce can be related.  The proceeds of international sales effected in trade carried on by private enterprise on a much more certain basis than that which exists today can be used to liquidate foreign debts and the cost of foreign goods and services.

The means of exchanging goods in foreign trade by barter would be available.  Canadian buying power abroad would be more stable and secure than it is under the present system.

International trade could be developed without the risk of disrupting the price level at home.  National economic independence can be maintained, but instead of isolation being the result, the opportunity to increase international trade will only be limited by the willingness of other nations to buy outright or to exchange goods in trade.  International trade would cease to be war ;  it would become a matter of exchange.  No, it is not free trade, but it is better still; it is intelligent trade.


In a nation such as Canada with nine separate provinces, sub-national banks must be established in each province, working with a provincial department of taxation and a provincial board of economic control.  Credits could thus be supplied to provincial and local governmental authority and the progress sand development of the nation could proceed under a budgeted plan co-ordinated and maintained by the co-operation of national and provincial authorities so that no one section would advance at the expense of any other.


This policy of nationally-managed public credit, taxation, domestic and international trade may be likened to the operation of an irrigation system.  (See Diagram, Page 29.)

The operation of an irrigation system involves the land to be irrigated, a permanent supply of water and the means of controlling and regulating the distribution of water throughout the irrigation system.  The land can then be worked to produce the crop which justifies the operation.

The operation of a human social organization involves the community of interest, based primarily upon the productive power of land to which is added the power of human intelligence to subjugate the resources and the elements of nature in the creation and distribution of wealth, and the advancement of social progress.

The creation and maintenance of the supply of purchasing power medium of exchange by which labour and intelligence are divided, function in the social system in much the same way that water functions in an irrigated area.  The permanent supply must be established.  The continuity of distribution must be assured.  If the effective circulation of the purchasing power medium of exchange fails, the social system will decline in productive activity in much the same way that crops will die in an irrigated area if the supply of water fails.

Too much water or too much medium of exchange will produce similar results.  The supply in both cases must be properly regulated.  In an irrigation system water will run away.  In a social system, however, the medium of exchange accumulates.  For this reason, in a social system the governments power to levy taxes must be asserted to prevent the social system being flooded with purchasing power credit.  By a judicious use of the governments power to levy and collect taxes, public credit can be used as the purchasing power of government to eliminate unemployment, want and destitution, for the promotion of public enterprise and social service without injuring the purchasing value of the existing volume of purchasing power wealth in circulation.  In this way the consumers purchasing power stream can be effectively maintained.

By establishing the means of using public credit as the source of supply of purchasing power and the means of regulating its distribution and circulation, the social organization will be equipped with the machinery by which the going concern activity of the whole community can be maintained.  It is in this power, properly exercised, to maintain the going concern activity of the social system that an effective substitute for gold as the security of the purchasing power value of the medium of exchange is found.

In maintaining a stable, going concern activity, public credit purchasing power is thus used to sustain not only its own value but the value of all other forms of real and representative wealth.  Existing and possible demand can effectively be served by existing and possible supply.  The law of supply and demand can thus serve the opportunity of the community to enjoy a progressive rise in the standard of living.

During the war we learned that there was no difficulty in creating whatever volume of purchasing power was necessary to keep men and women at work in war enterprise.  Unfortunately, bankers and financiers who controlled the supply and distribution of credit purchasing power served themselves by diverting public credit into the area that produced interest-bearing debts, with the result that the area that produces work, goods and the needs of the human family is now suffering from a purely artificial shortage due to bad management.

As long as we allow bankers to regulate the distribution of purchasing power, we can expect their particular section of the community to flourish at the expense of all the rest, but by their action they have taught us the possibility of using credit purchasing power in the service of the community as a whole.


We have learned that we can use credit borrowed at interest from the books of a private banking system for the purpose of distributing wages to men and women engaged in war.  Obviously, if we can do this with credits borrowed at interest, we can secure the same result if the credits are created without interest.


The theory that there is a fixed loan fund available to finance investment which is limited to the accumulated savings of the people is no longer tenable.

The fact that Canadian bank deposits could increase during the war period, when both life and property were being destroyed, by $1,300,000,000, an amount which exceeded the total of bank deposits accumulated from the beginning of the settlement of Canada up to 1914 by more than 131 per cent., proves that theory to be unsound.  If we eliminate the interest cost of bank credit, the war enterprise was the most lucrative venture in which we ever indulged.  And that is exactly what the war on poverty should and would be if we were not blinded by the guile of usury.

All must now agree that a national government, by setting up its own banking machinery and issuing its own credit and token currency free from interest charges, can adopt a real and effective means of reducing the cost of war.  It is therefore quite apparent that public credit and token currency issued through a national banking system without interest charge can be used as the means of lightening the burden of the taxpayer, increasing the spending power of government and the purchasing power of the consumer.

No sane individual with power to issue his own money and credit would ever dream of financing either his business or social enterprise by borrowing money and credit from someone else.  Much less would he ever borrow at interest to the point of bankruptcy and then starve for want of buying power which he had the power to create.


No sound government in this age of intellectual and technological efficiency with power to mint at the prevailing price of silver, legal tender dollars costing less than 20 cents apiece, is justified in borrowing credit dollars from a private monopoly at interest.  Surely, no one can justify as sound the practice of governmental borrowing at interest of credit from a private monopoly when the government has the power to set up a national banking system through which can be issued paper currency and bank credit more valuable as purchasing power medium of exchange than that which is issued by private bankers.

The perfection of the technique of substituting credit for money has emancipated mankind from any but an artificial shortage of consumers buying power.


With the establishment of a national banking system and economic organization, such as I have outlined, the task of developing the nations wealth, liquidating existing debts, keeping the standard of living in the agricultural communities in line with that enjoyed in commercial and industrial centres, and the problem of maintaining the standard of living of those engaged in producing for foreign markets on the same level as that enjoyed by those engaged in domestic trade under planned economy would cease to be insoluble problems.


The problem of promoting his enterprise and social service, the pursuit of wisdom and culture, the protection of health, the elimination of unemployment, the reduction of hours of labour without loss of wages, the dispensation of justice, the enforcement of law, the maintenance of the circulation of consumers purchasing power, the development of international trade and the maintenance of the going concern activity of the social system would be matters of practical administration.

The depression could be broken at once.  Credits could be placed at the disposal of national government departments, the provincial and civic government authorities, and our public utility corporations, with which a programme of needed and useful work could be inaugurated that would put every Canadian now unemployed at work.  In the meantime the organization of the departments of taxation, economic regulation and trade management could be proceeded with.  By using credit borrowed at interest to prosecute the war, we learned that we can use credit issued free of interest to promote the wealth-producing enterprise of progress.  Anyone who argues to the contrary is serving no useful purpose.

The wages so put in circulation would react on general trade immediately.  Values and prices would respond normally to normal and proper levels.  The value of the assets of banks, insurance companies, mortgage companies and loan associations, investments in real estate and all manner of industrial and commercial enterprise would be rehabilitated.  The consumers buying power and the ability of men to meet their legitimate and just obligations would be re-established.

Railway earnings would increase and normal activity in all domestic channels would form a true basis for real progress.

Our domestic trade is our greatest concern; it is ridiculous to say that a country such as Canada is not self-supporting.  Our foreign trade, export and import goods included, has never amounted to more than 5 per cent of total trade.  There never was and never will come a time when we were or will be unable to exchange our surplus supplies of grain and farm produce, minerals, forest products and other exportable commodities for a sufficiency of the products of other lands necessary to maintain Canadian industry and commerce.

The nature and abundance of our natural resource wealth precludes any other conclusion.  Of course our international trade is both important and essential to an improvement in our standard of living, but it must be managed in such a way that it does not from time to time disrupt our internal economy.  That can be done. Bank deposits would increase, but they would have to increase by $800,000,000 before they would be restored to their 1929 level.  That increase would take care of Canadas employment problem for a good many years to come.  Under a managed system of credit and trade, bank deposits would be safer than they ever were before, because real wealth would be increased proportionately and going concern values would be maintained and stabilized much more effectively than they are today.  If the depositors wished to convert their savings into legal tender cash, gold or foreign exchange, every facility that now exists and more would he available to serve such desire.  To fear such a programme or to condemn it on the ground that it is inflationary would be similar, if I may use Sir Josiah Stamps illustration, to accusing a man of running the risk of a reckless alpinist simply because he was caught walking up the steps of the basement of his own home.

In a country such as Canada where there is an abundance of needed work available, the elimination of unemployment does not need to wait until the departments of taxation, economic control and international trade and credit management are perfected.  There is ample opportunity to put the unemployed to work while the organization of these departments is being developed.  The unparalleled and unmoral wastage of human intelligence, energy and character now apparent on every hand should not and cannot be allowed to continue.  The war on poverty can and should be commenced at once by putting the unemployed to work.


THE changes in economic outlook and in the exercise of governmental authority here proposed may appear to be sweeping and radical innovations, but they are not out of line with the twentieth century innovations that have definitely appeared in the realms of industry, commerce and social service.  I believe they are merely the actual necessities that must be developed to bring our financial and economic machinery up to date.


We cannot advance in this age of steam, electricity, aeroplanes and radios if we allow bankers to manage the wealth of the nation by rules and practices that were born in the days of ox-cart transportation.


By delegating the management of the money system to bankers as a private profit-making monopoly, we have established the banker as the actual ruler of the people.  By this foolish and ridiculous course we have converted our boast of freedom as the boon of responsible government into a mockery and a glittering delusion.  Instead of being safe in the pursuit of necessities we starve in the midst of abundance.

We are suffering because we have repudiated Divine statute.  Instead of heeding the warnings of the altruistic philosophers throughout the ages, persecution and death have been their only reward.

When Christ was upon the earth, He saw the publicani and the money-changers, acting as profitseeking intermediaries between the people and the rulers of Church and State.  These original racketeers were the prototypes of our modern bankers, financiers and credit dealers.  Knowing that covetousness and the love of money were the root cause of civilizations economic troubles, Christ denounced the collection of taxes by the publicani, money-changing in the Temple by the money-changers and our modern practice of banker management of the monetary system by declaring :

No man can serve two masters ;  for either he will hate the one and love the other, or else he will hold to the one and despise the other.  Ye cannot serve God and mammon.

In His desire to establish this truth as a part of the permanent record of the economy of Christian philosophy, Christ deliberately invited death by crucifixion as the penalty of a false charge of treason that was laid as a result of a conspiracy instigated by the money-changers whom He drove from the Temple at the end of a whip.

We have reversed Christs teachings; we have driven Christ out of the temple of government and put the money-changers in charge.  Therein lies the fundamental weakness in the economic system that has brought a mammon-worshipping civilization to disaster.  Peace will never come on earth until the lesson that Christ taught with the sacrifice of His life is accepted as the fundamental guide in establishing and maintaining the management of the monetary system.  The right to participate in other than a fixed monetary reward must be divorced from the management of national currency and public credit.


There is abundant proof that the creation and maintenance of the organization necessary to administer national credit and planned economy is no longer beyond the science of civil government that this age enjoys.


The men who collect the present enormous levy of taxation, excise and customs duties, once the profit-making monopoly of the publicans of old and the farmers of the revenue;  the officials who operate the postal service, not so long ago the lucrative privilege of private contractors ;  the judges who administer justice which before Magna Charta was delayed, denied and sold just as it is today in China ;  and the army of public servants who administer education, workmens compensation, pension boards and a host of other public services are all appointed under the authority of elected representatives of the people.  It is a matter of real satisfaction to Canadians that they can say in truth that with rare exceptions our public officials are above and beyond the seductive temptation of private gain and equally free from the evil influence of corrupt political desire.

Once we set up public offices, public opinion will compel a definite measure of honesty and efficiency on the part of those charged with the responsibility of administering the public service provided.  We are safe in that conclusion because we can base it on actual experience.

Public opinion that can remove a Mayor of New York from office, put a Secretary of the Interior of the government of the United States in the penitentiary, compel an investigation into the Canadian Customs administration and expose the Beauharnois scandal can be relied upon to protect the, administration of a national banking system.

The record of our public officials proves that men drawn from our universities, banking officials, public administrators, business executives and the ranks of organized labour can be safely entrusted with all the great duties and responsibilities that are involved in the successful administration of national credit and planned economy.  They must be given a position of unchallengeable independence and be provided with all the facilities necessary to their work.  That can be done.


The adoption of a system of economic control in the departments of finance, commerce, industry and social service does not involve the adoption of the ideas of either Socialism or Communism.

In this crowded and increasingly competitive debt and tax-burdened world, it is necessary for the same reason that we have been forced to adopt a system of regulating and controlling traffic in our modern cities, upon our public highways and in the administration of our transportation and radio systems.  It is necessary to prevent the disaster of confusion and traffic-jamming in our modern channels of trade.

Intelligent people rightly fear the brutal discipline of class dictatorship that has attended every attempt to establish an equal division in the realm of wealth.  They also fear the loss of individual enterprise that has always attended the attempt of bureaucracy to develop progress by regimentation.

But no matter how much we fear the injudicious exercise of authority by government, we we should not be blinded to the fact that our communal existence is now dependent upon our ability to manage our institutions of finance and general trade.  We must be prepared to anticipate that the possibilities of such deliberate control should steadily increase ;  and that we should forward these ends to the best of our power by being ready to attempt the task and to gain experience by practice.


Temporary and illusionary relief from the present depression can be secured by the various methods of uncontrolled and semi-controlled inflation that have been inaugurated in Germany, Italy, France, Great Britain and the United States.  Such periods of prosperity are bound to be followed by a recurrence of depression which will come more rapidly and more disastrously than that which came in 1929.  The credit cycle of boom and depression will continue to be the outstanding characteristic of our civilization until we recognize the necessity of establishing and perfecting the deliberate control and regulation of the issue and circulation of purchasing power, the creation and distribution of wealth, the elimination of unemployment, the promotion of education and the elevation of the standard of living as the most conspicuous responsibilities of government.

No matter how much one is intrigued into the realm of metaphysics by the cabalistic jargon of the orthodox economist or confused by the bewildering contradictions of the monetary doctrinaire, economic realities establish these conclusions as inescapable :

(1) When wage-distributing enterprise maintains the masses in gainful employment, whether it be in time of war or peace, prosperity exists.

(2) When wage-distributing activity ceases and the masses become unemployed, no matter how much money or credit exists, prosperity ceases, prices fall, incomes decline, taxes increase, starvation appears, crime and hoodlumism become rampant and revolution threatens.

(3) In an advanced civilization where realizable supply can be maintained in excess of possible consumption, the value of wealth, both real and representative, is in large measure dependant upon the exercise by government of its power to maintain progress by the judicious regulation of the circulation of buying power, the production of wealth and international trade.

A government that fails to assume and to assert intelligently its responsibility in regard to these fundamentals cannot fulfil the greatest of all its obligations, viz., that of maintaining the normal progress of the political economy of the nation.

If we are to avoid the calamity of class strife, of wage wars and taxpayers revolutions, we must not depend upon any particular ism, but upon our ability to manage the means we have at our disposal that, properly used, can and will establish a world of peace and plenty.

Once we establish a sane monetary system managed by an authority properly organized, we can safely leave the progress of civilization in the hands of our educators who, guided by the altruistic philosophy which emanates from the Supreme Being Who is the Architect of the Universe, will then have the facility and the power to emancipate mankind from ignorance as well as illiteracy.

Then and not till then will Peace on earth for men of goodwill establish the right to dwell in safety under their own vine and fig tree for all who are worthy of such a blessing.

In this great work let us not be deterred by the magnitude of the task or the difficulties that the problems present in perspective.  Let us start well.  We can then go forward in faith and courage that our God-guided resolution to end well will succeed.


In the evolution of economic enlightenment mankind has moved through many eras.  Commencing as individuals the members of the human family, living alone, secured their living from nature.  In time, they learned to live together and communal life began.  With the progress of intelligence, division of labour grew into trade by barter which was followed by trade based upon the use of a medium of exchange.


The crude media of exchange evolved into money.  Money was finally perfected to be a thing of definite form and of fixed intrinsic value.  With the advent of money, men learned that it could be used as an instrument of appropriation and a storehouse of wealth, and the evil of usury was discovered.

In the unceasing struggle between altruistic philosophy and self-interest, usury has proven to be the most effective instrument that has ever been used to thwart progress by subjugating the well-being of the majority to the comfort and convenience of the minority.


With the gradual emancipation of men from illiteracy instruments of credit began to take the place of the money medium of exchange.  Goldsmiths receipts for gold evolved into promises to pay gold on demand, and paper bank-note currency was born.

With the advent of the recognition of the power to use credits in an accounting system as the means of consummating monetary transactions, the use of the cheque came into being and silver, gold and money rapidly receded into the background of the monetary system.


We now use token currency of no intrinsic value in the form of metal coins and bank-notes for all current out-of-pocket expenditures.  In the vast bulk of our monetary transactions we use neither money nor token currency, but employ cheques transferring statements of account in bankers books which are fraudulently represented to the public by bankers as actual deposits of money.  They are merely book-keeping entries secured by a portion of the nations real wealth that constitute unpayable money debts in the form of promises on the part of private bankers to pay money to alleged depositors far in excess of that which the banker holds or can possibly secure.


These conclusions are now placed beyond dispute.  For example, in 1929 the monetary transactions of the people of Canada consummated by cheque totalled $46,000,000,000.  Here are the statistics that disclose the real situation :

Gold Reserves,      Legal Tender Money,   Bank Deposits
1929.....$78,000,000 $250,000,000 $2,696,000,000

This accumulation of alleged bank deposits proves that the banker by his own actions contradicts his violent opposition to the use of national currency upon the ground that all paper currency or other substitute for sound money must be redeemable in gold.  He knows that he cannot redeem his money debts to depositors in either money or gold.  But no one, certainly no banker, ever questions the purchasing power value of a cheque drawn upon a bank that holds a credit in favour of the drawer of the cheque.  The fiction that the purchasing power medium of exchange must be redeemable in gold ;  the oft-repeated story of the deliberate and designed inflation of the German mark which was resorted to as a means of liquidating German debts payable in marks ;  the bankers studied misrepresentation that bank loans and bank deposits consist of money and the universal chorus that chants unceasingly, Keep the government out of banking, represent in part the well-considered propaganda by which the private money system is operated for the express purpose of permitting a highly organized and astute monopoly to profit by exploiting human credulity and pursuing to the limit the egregious principle of selling short.

The modern banking system is based upon a gigantic fraud.  The banker actually represents and holds out to both borrowers and depositors that he deals in money, lending his own and depositors money.  In law, his liability to pay his depositors is an obligation to pay in legal tender cash.  In Canada legal tender notes are redeemable in gold.  In 1929 the Canadian bankers liability to depositors therefore exceeded the monetary gold reserves by $2,500,000,000.  The mere fact that the depositors may never ask the bankers to fulfil their obligations is no answer in law to a misrepresentation made with intention to deceive for private gain.

Let us suppose that a stockbroker had collected commissions on the sale and purchase of $2,500,000,000 worth of stock that never existed and his clients suddenly awakened to the fact that the stock credited to them in the stockbrokers books was fictitious.  It would be no answer for the stockbroker to say that he did not expect his clients would ask him to deliver the stock in specie.  Now, change the picture.  Put the banker in the position of the broker and change the commodity dealt in from share certificates to legal tender money and let the depositors take the place of the stockbrokers clients.  Then let the depositors ask for their money, and the fraud will be exposed.  But instead of sending the banker to gaol, the government comes to his rescue with an issue of legal tender currency, or worse still, it appoints a group of bankers to inquire into the knowledge the people possess with respect to finance and banking.  As a result, both bank and banker escape investigation.  Such a group of bankers are now preparing recommendations to Parliament upon which the banking and currency laws will be extended and revised.

The banker actually finances the business of banking by printing bank-notes and issuing bank credits, neither of which is secured by gold.  The banker actually enjoys the privilege of creating his own purchasing power by using a printing press and by the manipulation of a book-keeping system.  The banker has actually found the way to create purchasing power out of nothing.  That he issues his credit purchasing power upon the security of the assets purchased or deposited by borrowers does not detract in the least from the truth of this conclusion.


The nationalization of money instead of being a benefit to the State is actually maintained and used for the purpose of perfecting a pure scheme of profit-making credit manipulation, operated for the benefit of a blind and dangerous monopoly.  Under such a system it is little wonder that the successful bankers and their close associates have grown richer and fewer while the poor have grown poorer and more numerous.  Under this system we have established a civilization of drones and paupers.

This gives us the unqualified, plain and simple explanation of the bankers actual dominion over commerce, industry and government.  The so-called gold standard sound money system constitutes the boldest and most sweeping swindle ever recorded in any age.  Under the bad management of usury gone mad, civilization is wrecked and our only hope of recovery lies in the establishment of a national banking system.

It is in such facts that we find the explanation of the extraordinary record established in 1929 by our Canadian banks.  With a paid-up capital of $144,000,000, they had financed bank loans and the purchase of interest-earning bonds and other liquid assets to the value of $2,723,000,000 by creating book-keeping entries, called bank deposits to the value of $2,696,000,000 at a time when the gold reserves were less than $100,000,000, and the total value of Canadian money in circulation was less than $250,000,000.  The ancient idea that bank deposits are redeemable in either gold or money is obviously a pure fiction.

Although the public have remained unconscious of what was taking place during the last 100 years, the sound money system has been deliberately converted by credit dealers, successors to the money-changers, into a monstrous credit racket, a racket that lives by the promotion of war and the maintenance of weak, pliant and corrupt government.  Thus is it assured of the passage of laws that serve expediency and prove disastrous to the wage-earner, the taxpayer and all but the holders of credit power and class A interest-bearing bonds.

In the development of the racket of substituting credit for money as the means of profiting by usury, the age-old doctrine that the purchasing power medium of exchange, i.e., money, was a creature of law which could only be minted and issued for circulation on a gold basis under the prerogative power of national government was not disturbed.


The men who established the existing monetary system by securing the passage of the Bank Act of England in 1844 cleverly used that doctrine and the publics desire for sound money to their enormous gain.  They conceived the idea of using the nationalization of money for the purpose of maintaining a money shortage.  In the course of time this was accomplished by reducing the legal tender value of silver and copper coins to a nominal amount; by restricting the issue of national full legal tender paper currency to a percentage of the monetary gold reserves available; and by withdrawing gold coins from circulation.  By freezing the issue of national money to gold, the laws passed by Parliament at the instigation of bankers created a situation under which a shortage of money was assured, thereby compelling government, corporation and individual to use a substitute for money.


The only substitute available existed in the form of credits created in the books of the private banking system.  The banker, knowing from actual experience that depositors generally would never ask for their deposits in money, proceeded to create deposits by making loans of credit, charging interest for money that did not exist and was never used.  Here is a simple illustration of how the credit racket is worked.

Mr. A. calls upon the bank for the loan of $100.  Upon the hypothecation of ample security the loan is granted.  But the banker does not advance his own or a depositors money.  He enters a credit in the books of the bank in favour of Mr. A for $100, which he facetiously calls a bank deposit.  Against this deposit Mr. A may issue cheques which the banker is compelled to pay, if required, in money.  But again the banker knows from actual experience that the receivers of cheques will not demand payment in money.  The banker safely anticipates that the payee will deposit the cheque and accept a transfer of credit from Mr. As account to his, and no money whatever is required to complete the transaction.  A new deposit is thus created and so on ad infinitum.  (See Macmillan Report, Sections 71 to 75.)

Bank credit transferred by cheque now circulates from person to person and from one generation to another in such volume that its redemption in gold or money is a positive impossibility, but its circulation is in result identical with that of a silver 50 cent piece, worth only 8 cents in silver, and not redeemable, as a matter of law, in anything.

By using bank-note printing press currency and bank credit transferred by cheque over and over in what the banker calls the velocity of circulation, the bankers fiction of money has been pyramided into a veritable mountain of public and private interest bearing debt, totalling $9,500,000,000 in Canada, of which $3,250,000,000 is payable abroad in gold.  The tragedy of debt inflation is set out in a diagram on page 30.

In Great Britain where the racket was originated, the interest-bearing public and private debts total more than $80,000,000,000, while in the United States under the Federal reserve system, which was largely copied from Great Britain, the total is more than $178,000,000,000.

Some day the people will come to understand this credit racket that the banker operates in the name of sound money, and when they doGod help the banker.


The anomalous nature of the present situation lies in the fact that all gold standard governments have induced their own bankruptcy by borrowing private finance issued by the private money system as bank credit on the security of legal tender cash issued as an expression of the governments prerogative authority to create and issue money.

Our department of finance, exercising one of the powers enjoyed by Central Banks patterned after the Bank of England, issues Dominion legal tender notes redeemable in gold, which are loaned to the private banks at interest in the vicinity of 3 per cent.  This the banker calls cash and treats as the reserve basis for the issue of bank credit.  Varying with the conditions of the times, the banker then issues bank credit from 5 to 15 times the value of his legal tender cash on hand with which he finances loans and buys and finances government interest-bearing bonds and any other form of liquid assets producing interest or profit.

The idea that a government should issue national legal tender cash to a private banker at 3 per cent and then permit the bankers to issue on that reserve bank credit on the average of ten times its value, and compel the taxpayers of national, provincial and municipal governments to pay from 3½ to 6½ per cent for bank credit to finance all governmental activity reduces our world to the topsy-turvy level of the Land of the Mad Hatter.  Such an absurdity is beyond the comprehension of intelligence, but its acceptance as sane and sound economy is nevertheless a fact.


In Canada where our banks are permitted to print and issue private bank-note currency unsecured by gold up to the value of their paid-up capital, Dominion legal tender cash is mainly confined to the settlement of inter-bank balances that arise when cheques deposited fail to cancel the cheques drawn upon one or more of the banks in the system.

On two occasions our government has been forced to abandon the gold standard and issue Dominion notes to avoid the calamity of a major bank collapse once in 1914 when $26,000,000 was issued, and again in the present crisis, when $35,000,000 was handed to the banks by a double shuffle of Dominion interest-bearing notes and Dominion currency notes.  Thus is the worst racket ever devised to plunder the people of their wealth maintained by the exercise of the governments power to issue and circulate national currency.


The financial operations of the war period opened our eyes to the fact that the banker-managed gold standard private money system is a pure sham and a fraud.  We financed the war with book-keeping entries.  We issued tax-free interestbearing bonds to induce credit profiteers to issue bank credit to finance the army at $1.10 a day, and to induce war profiteers to invest profits secured by plundering the nation to save the nation for Democracy.  Ironic, yes, but true.  We are now paying the price of our folly.  During the war period, the funded interest-bearing debt payable in Canada rose from less than $100,000,000 in 1914 to $2,066,000,000 in 1920.  During the same period the issue of private bank notes rose from $104,000,000 to $228,000,000, and bank deposits rose from $1,142,000,000 to $2,445,000,000.  During the same period our national debt payable in London declined and our total national borrowing in New York was less than $200,000,000.

Since the war ended, the Canadian taxpayers have paid out on account of interest on our national debt the sum of $1,900,000,000, and our national debt is as great as it was when the war ended.  The inflation of credit debts during the war period and rise and fall of bank deposits that attended the rise and fall of prosperity are shown on page 31.

The bankruptcy of government, corporation and individual that was inevitable under the excessive money and credit cost that the private money system imposes is here.  In 1931 the cost of national, provincial and municipal government in Canada exceeded the total income of the Canadian people assessed for income taxation purposes by $100,000,000.  In many cases almost 50 per cent of the taxes collected by local governments is required for interest and sinking fund charges on public debt, and the situation is steadily growing worse instead of better.

A management of the monetary system that served the people so badly and usury so extravagantly, deliberately invited repudiation by flouting the inexorable laws of necessity.


Our prosperity in the post-war period was due to the increased volume of purchasing power that was created in financing the war.  The depression came because the accumulating power of interest on debts which were chargeable to the wealth of the nation withdrew those credits from circulation and shifted credit wealth from the consuming and spending class to the lending and investing class.  This withdrawal of credit from circulation was intensified by the return to the gold standard and the intensive investment of capital in all manner of profit-seeking enterprise.

By examining the foundations of our monetary system and the methods and practices we have used to finance government, industry, commerce, progress and war, we find the cause of the existing depression and the practical and possible remedies that are available.  Let us leave theory and speculation aside for a moment and deal with facts.  We have tried to finance progress by pyramiding credit into interest-bearing debts, a system that can be proven to be an absurdity by simple arithmetic.


Let me illustrate that proposition with a concrete example.  Recently the City of Vancouver constructed a bridge costing $2,500,000.  It was financed by borrowing $2,500,000 on 40-year 5 per cent bonds.  If national credit issued through a national bank had been used, $2,500,000 in national credit would have been put in circulation, paying for the cost of the material and labour that the completed bridge represented.  The books would have balanced.  Credit to the value of the real wealth created would have been put in circulation.  By borrowing credit on 40-year bonds at 5 per cent, the cost of the bridge is increased to $7,500,000.  The taxpayers are called upon to find from some unknown source $5,000,000 to pay for the cost of financing the cost of the bridge ;  in other words, the lender of credit puts one unit into circulation and takes out three.

This process of taking out more from circulation than goes in is the outstanding menace of usury upon which our private money system is based.  That fundamental menace to national and social stability can only be removed by the national management of public credit.

If we understand this proposition correctly, we cannot escape the conclusion that, in time, under the bankers theories of gold standard sound money the entire wealth of the nation will be transferred to the lenders of credit with the result that the going concern activity of civilization will be destroyed for the want of the circulation of purchasing power.  That is our plight today.  Such a system has proven unsound for everyone, including the bankers.  Under their application of the folly of Midas, they have converted everything into unpayable interest-bearing debt, with the result that all wealth-producing activity is stagnating in the strangling grip of the dead hand of blind greed.

When we realize that it is in this impossible way that we have tried to finance war, all governmental activity, social progress and the means of producing and distributing wealth, it is not difficult to understand why our hope of unending expansion crashed into a tail-spin from which, under the existing monetary system, there is no way of escape.  We are whirling to disaster.  A change to a new system of more effective management of credit must come or we are doomed to a period of unparalleled disturbance and unthinkable strife.


Now people do say that bank dividends to bank shareholders do not disclose any such lucrative activity as the possible manipulation of credit I have outlined indicates.  But they have never had the opportunity of examining the actual gross cost that the operation of the nine individual Canadian banking organizations of the private banking system imposes upon our social order.  We do know, however, that money and credit cost imposed by the banker is now the root evil of our trouble.  If the people ever learned what the cost of issuing and circulating the medium of exchange under banker management actually amounts to, the private monopoly of banking would not last twenty-four hours.

The public have never been allowed to examine the private profits of our banking leaders and their associates, gained largely through credit manipulation.  But investigations in the United States of recent date give some indication of what they are.  The great profits of the credit system do not go to the bank shareholders, but to men like the Morgans, Mellons, Holts and Wood Gundys, who enjoy the power of rule by credit control.  The information disclosing their activities, profits and possession of wealth would be forthcoming only under a most careful and efficient investigation.  The reputed wealth of certain bankers and well-known groups indicates that the profits of our credit barons are not to be considered as being in the same class as bank shareholders dividends.


While there has been much idle talk of the soundness of the Canadian banking system, there is little in reality to justify it.  Under banker management our unpayable load of interest-bearing debt has now accumulated at home with disastrous results, and we are, as a matter of fact, the most heavily indebted country in the world to foreign creditors.

Much has been said about the loss of bank deposits in the United States, but the fact is that between 1929 and 1933 American bank deposits declined from $53,000,000,000 to $41,000,000,000, or a drop of 23 per cent, while in Canada, bank deposits, during the same period, fell from $2,600,000,000 to $1,800,000,000, or a fall of 31 per cent.

In contrasting the bank failures in the United States with the absence of failures in Canada, the public completely overlook the fact that the only reason our banks in Canada have remained sound is because the people have never asked for their money.  Had they done so, they would have found the Canadian banker to be just as short of money as was the banker in the United States.  Were it not for the direct aid extended by our government to the banking system, it might have collapsed on more than one occasion during the present period of depression.

The economic chaos that now surrounds us proves that there is no hope for relief in any policy that is limited to bolstering up the private money system.

The twentieth century holocaust of war, plunder, false progress and mammon worship should offer ample explanation of the reason why the fear and condemnation of usury by the leaders of Church and State up to three centuries ago was neither casual nor incidental.  They treated it as a fundamental evil which, if tolerated at all, would end in the disruption of progress and in the destruction of civilization.  History vindicates their wisdom.


It is in the vain attempt to finance progress with a private money system based upon usury that we find the real reason for the mismanagement of money and credit that the Royal Bank of Canada in February, 1932, frankly confessed to be the cause of our present troubles, when it stated officially to its clientele :

The present depression is usually explained in terms of extravagance, over-production, excessive tariff barriers, etc.  In varying degrees these, as well as other contributing factors, produced situations which were essentially unsound; but, speaking generally, the controlling influence has been the mismanagement of money and credit.  The average price level is determined by the relation of goods and services rendered to the volume of the money supply, and the disastrous fall in the general price level would not have occurred had the supply of money been properly regulated.


This letter of the Royal Bank of Canada raises the real issue to be settled :

Who should control the supply of purchasing power now based upon public credit upon which the economic life of the nation depends ?

Who should be responsible for the regulation of its issue and circulation ?

Surely the mismanagement of the monetary system by private bankers, proving that they cannot resist the temptation to satisfy mans uncontrollable desire for boundless wealth and unchallengeable power, denies to the guild of usury which now owns and operates the private money system any right to favourable consideration.

The managers of the supply and circulation of purchasing power, whether it be money, token currency or credit, or a combination of all three, must be men paid adequately for their services, and who are responsible to the State and the people as administrators of a sacred trust.  They must accept the high responsibility that the trust involves, with the knowledge that failure upon their part to act honestly and conscientiously will involve removal from office in public disgrace, and the imposition of the penalties that are inflicted upon those who are guilty of the heinous offence of treason.  There are plenty of men able, ready and willing to accept the work under such restrictions.


The barrier that now blocks the way to progress is the misguided management of public credit by the private money system.  We must wipe out that twentieth century anomaly in much the same, way and for the same reason that we wiped out toll gates and private management of public roads and highways in the nineteenth, and establish in its place national maintenance, control and regulation of the issue and circulation of public credit as the means of supplying the capital now required.


A credit swindle set up in the days of the Rothschilds dominion in Europe has been allowed to operate until it established the bankruptcy of a civilization that was intelligent enough to use electricity as a means of communication and transportation, to conquer time, space, disease, illiteracy and starvation.

Unemployment and privation today are the result of the operation of the mother of all rackets that was set up in England nearly a century ago.  It could not go on forever.  The feast of Belshazzar is over.  The hand of doom has appeared.  The message on the wall has been written.  Men and women under the guidance of God in every nation are responsible to the call :

Come out of her, my people, that ye be not partakers of her sins and that ye receive not of her plagues.

Babylon, the corrupter of men and nations, the great evil of usury and mammon worship is about to fall and in her will be found the blood of prophets and of saints and of all that were slain upon the earth.

So long as we allow the management of the monetary system to remain under the control of men who are not gods, but usurers, who were known of old as the wolves of society, we must expect chaos and bloody strife.  By putting dominion in the hands of such men we repudiate God and invite the wretched slavery, privation and misery of popular sin.


We are now emerging from the jungle of chaos that banker management of credit as an instrument of appropriation has developed in a world of unparalleled social opportunity.  We are now moving through the frontier of national management of credit and the deliberate control and regulation of trade.

The national management of public credit and the deliberate regulation of trade are the immediate and inevitable steps now to be taken if the ordered progress of civilization is to continue.  These steps can now be taken with safety.


Governments with power to issue their own credit and token currency need not limit the investment of public credit in wage-distributing enterprise and social service to the ability of the taxpayer to redeem in money, interest-bearing debts created by borrowing private credit and finance manufactured by the mere stroke of a pen in the books of our private banking monopoly.

A national banking system can issue the same money and credit that is now in common use.  There need be no shortage of consumers buying power.  Therefore there need be no involuntary unemployment.  There need be no misappropriation of the taxpayers wealth.  That is clear.

By bankrupting civilization with bankers notes and private bank credit the private money system has proven the possibility and the necessity of using national bank money and credit as governmental purchasing power.

The general use of the cheque transferring private bank credit as a substitute for money in the realm of capital proves that national currency and credit can and should be issued upon an employment basis and against the security of the going concern activity that a rising standard of living is bound to sustain.  Such a standard is sounder than gold for the simple reason that human values are more valuable in reality than are material things.

Common sense and plain reason declare that national purchasing power, currency and credit can and should be issued and circulated for the purpose of equating the regulated production and consumption of usable and consumable wealth ;  and that the value of all wealth, real and representative, including gold, money and credit can only be sustained by the going concern activity of the social system.  The circulation of purchasing power is therefore our key problem.


Our monetary system is anything but sound.  When examined from the point of view of the government of the people, it actually smacks of the kind of economy one would expect to emanate from a lunatic asylum.  But great credit is due to the bankers and credit dealers for the skill and ingenuity that they have displayed in fooling so effectively both governments and public.  Theirs is, in truth, the guile of the devil that has been the mainstay of the age-old business of usury and money-changing.


We had to learn this plain and simple truth in the school of bitter experience.  Despite warning after warning by wise and good men in every age, we refused to heed till disaster came.

Well, there is at least some consolation in the fact that the fundamental teachings of Christian Democracy are still unsullied.  We are now at the point predicted by Plato, who prophesied that Democracy would emerge from the oligarchical rule of money power as the result of the oppression of the people by men who profited by lending at interest.

The exalted liberalism of Christian philosophy cannot be condemned because it has never been tried.  The promise that it provides the means of using and replenishing natures wealth and resources to the end that men may live a life of greater abundance will never be fulfilled until governments recognize that the medium of exchange, whether it be money or credit, is the servant of men and not the master of civilization.

When we establish that rule as a foundational postulate of economic philosophy and practise it by maintaining the wages of men above the wages of money, we will have no difficulty in accepting the teaching of Christian liberalism as the guide of government in its work of controlling and regulating the stability and progress of the social system.  Government established under such circumstances would not seek to subjugate the individual to the rule of regimentation, but by regulating the opportunity of all and by offering the moral guidance that persuades and develops a desire for proper direction of human effort, measures of enlarging freedom and liberty would become the accepted and established order.  Such a government would aim at facilitating the exercise of political power to the end that the public mind and the intellectual tone of society would be raised.  It would seek to refine the intercourse of private life and to purify the national taste ;  to give enlargement and sobriety to the worthy ideas of the age and at supplying true principles as the foundation of public opinion and positive objectives as the guide of popular aspiration.

The demand of enlightened opinion for the greatest good to the greatest number without unrighteously restricting mans natural and normal desire to enjoy a full and proper measure of liberty and freedom in the pursuit of-individual activity could be supplied.  Our educational institutions would become the pride of government and the priceless heritage of posterity.

If we are to enjoy the rich and abundant fruits that education has made possible, we must use the facilities that education has established as the means of creating and distributing the riches at our disposal.  We must also look to wider education as the means of maintaining order and progress in an age of plenty.

In the course of time the system of more equitably distributing national income will be perfected.  Under proper economic research the crude plan that I have outlined will be improved.

Proposals such as are now advanced by Keynes and Douglas in England, the followers of Silvio Geysel of Germany, directed to establish an automatic self-regulating currency and social credit, and the various plans to do away with price and profit, may be perfected to the point where they will achieve all their proponents promise.  But, in the meantime, we must get started.  The work of experimentation that has been proceeding with success in Russia and Sweden, where national management of currency and credit are recognized as essential to twentieth century progress, has advanced sufficiently to warrant our attacking, without further delay, the problem of dissipating the gloom of depression by replacing the anxious hopelessness of unemployment with the happy optimism of human industry, fairly requited and intelligently employed.  We must put the people to work at the millions of jobs that are crying for the service of wage-earners in every part of the nation.  The plan I have proposed will do that.  If we start with it, we can depend upon the intelligence of the future to improve it and to establish something better in its place.