APRIL 6, 1934.

Chairman: M r . Claypool.

M a j o r DOUGLAS: Mr. Chairman, Mr. Prime Minister and Honoural~le Alrlmbers of this Legislative i\ssenlbly of Alberta.

In the first place I would like to thank you for your very kind reception nn(l to assure you that any service that I can render to you is freely a t your ~lisposal. Now I think in regard to this matter, although my kindly introducer mentioned you are broadly familiar with the conditions of our existing monotzrs -ystem, thnt it is necessary to go over that in order to emphasize certain points in regard to it which have to be continuously born in mind in regard to this matter, and the first thing I think to do is to bring into our consciousness certain propositions in regard to the economic system itself; that is to say the .-?stem by which we get bed, board, clothes and luxuries. S o w the first point to recognize is that the economic system exists primarily i o ~ the production and distribution of goocis and services. That is, it is t h e primary objective, and any other objective which rnay be introduced into i t is txtraneous. That is n matter which requires almost immediate attention in rcgartl to these matters, because you will very often hear it said that tll- priniary feature, let us say of the situation, is to deal with the unemployment p r o l ~ l e ~ i ~ . Now the unemployment problem is not in itself inherent as a n objecti1.e o f the economic system. I t is not the sort of thing you can take a s a n axiom t h s t ?he economic system is failing if it fails to provide employment. The perfect t~conomicsystem from the point of view from which I am taking the matter is one which provides no employment a t all, by which all the goods and services rvllich are recluired by individuals would drop into their laps a s bananas drop off the tree, or as sunshine reaches us in the morning. When you introduce a provision such as the provision of employment into our consideration of the problem a t the present time we in f a c t are perpetuating the original idea of the lnonetary system which was to distribute all the goods ant1 services which it produces or could be produced, quite irrespective of a n y effect except that they a r e produced. I want you to bear that aspect of the niatter very clearly in mind. When you introduce any measure for, let us say, the ratification of the existing monetary system or any other objective, than the distribution of goods and services, you a r e making the monetary system and the econonlic system a tool, a mechanism of policy. You a r e not dealing purely with economics. You a r e mixing economics u p with something which has nothing whatever fundamentally to do with the provision or distribution of goods and services. I am not saying the provision of employment is not a desirable thing. That is quite outside what I am saying. What I a m saying is the provision of employment is not fundamental to a n economic system. Let us examine the monetary system as it stands, as we know it, and in order to do that I think i t is necessary again to strip ourselves of a number of misconceptions. A great many of these misconceptions unquestionably arise from you can call, if you like, practical economics. You will hear money described as "a medium of exchange"; you may hear it described a s a storehouse of values, and a great many things of that kind.
M o n e y a Ticket


Now money is not any one of those things, although it is conceivable that from time to time it may take on, a s a sort of side issue, attributks which appear t o justify that description of it. Money is nothing whatever but a ticket

. ;.:.:rn which has nothing whatever to do with all these abstract descriptions of it such a s a medium of exchange, o r a storehouse of values o r a n y of these

other things. I t is a ticket system and nothing else. What the result of perverting and manipulating the ticket system may come t o be in such a way as i t seems to acquire these attributes, but if you will bear in Mind money is nothing but a ticket system you will save yourself a great deal of trouble by stripping your mind of pre-conceptions. Now to show you that money is nothing but a ticket system I think the best way is to go back very briefly to the origins of the money system and those origins a r e connected with something with which in the western part of Canada you should be very familiar. They a r e connected with cattle and grain as fundamental riches, wealth. I n the beginning of the money system a s we know i t the owner of capital was the chief owner of wealth, and he exchanged some of his cattle f o r grain, so he might feed the cattle he retained. The grain vendor was very often a n itinerant and i t was not always convenient f o r him to take away cattle a t the time and have t o drive them around t o his other customers, so he took from the vendor a leather disc which sometimes bore the head of a cow o r horse on it, and sometimes not. A t that point there were two absolutely vital things t o be recognized in connection with the monetary system. The first of these is that the origin of the money was a t the same place a s the ownership of the wealth; the man who owned the wealth issued the money. The money was nothing but a ticket, a s i t is fundamentally today nothing but a ticket f o r wealth in existence. Now you can easily see that a system like that would be open to abuse and that some bright fellow would very rapidly begin to produce discs of leather which were unrepresented by cattle and this is no doubt what took place. Now if you jump for some distance, some thousands of years, to the middle ages, you will find that the money makers, the owners of wealth, were the custodians of wealth, and that canie about in this way, that portable wealth was very largely gold and silver. I t was not recognized a s money until a comparatively late date, although coins of course, which were really tokens, were in existence from a very early age. Portable wealth was deposited with the goldsmith of the middle ages, and the goldsmiths were the custodians of this wealth, very largely because they had facilities f o r storing portable wealth in the form of safes and so forth and they issued receipts for the wealth that they stored. m o s e receipts were on parchment and were signed b y the goldsmith and i t came to be a habit to pay over these receipts in exchange for something that was received, some article of value, rather than draw out t h e gold plate and barter i t directly f o r the land o r other wealth which was required. Now a t that point another extremely importa n t change took place. These receipts which passed from hand to hand were the lineal ancestors of our modem bank notes. Your Canadian bank and dominion notes descend directly from those goldsmith's receipts, and the essential thing to notice is that those receipts were received as what you might call money, because of the signature of the goldsmith on the receipt and not because of the name of t h e owner of the wealth. Imperceptibly e s you might say, this money passed from the owner of the wealth to the custodian of the wealth. That was an absolutely vital transfer.
Development of Banks

Now the third change, which I think will conclude all that is necessary t o say on this subject, took place when the banks developed out of the goldsmith and people began t o deposit gold coin and so on with the banks, and they began to issue notes themselves, and ultimately we got a cheque system, which again was really nothing but a n extension, a very flexible extension, of the note idea, except that the man made out his own demand on his own receipt, and if the receipt was correct, it was honoured by the paying out of so many gold coins. The theory was that against all the notes which were out, and the cheques which were drawn, there was exactlv the same amount of what had come to be

There was always this amount of ~ I J ! < I regariiccl as the synibol of \vealrh-gold. coin o r gold in some form or another, recognized form, available a g : i i r ~ ~tile t legitimate drafts which could be made by custon~ers the banking systern ag.;ii~~.it of their "tleposits" as they came to be known. That is to say, in England tli,!re \\.:IS always supposed to be one gold sovereign against any cheque f o r ii'l \\ liici~n n s tlrawn, o r against a E3 note there would be five gold sovereigns s u p l ~ ~ ~ . ~ i i i y i:l existence. That itlea of course involved that, if everybody nithdreiv his ,il3po.;its thcy would all be paitl in gold and presunlably there would be no gold 18.i~i ~ 111,~ i bank, and the gold would be transferred to the people who hacl the 1.ig1it t>f calling upon cleposits. Now this theory was probably implicitly accepted by the public and tacitiy accepteci by the banking system, bilt was never expressly true in the past scv+~r:cl hundred years. As many generations of people have been only too veil ;.t\\:ii .:, on every occasion on which this right of cashing their deposits in g o l ~ lii-i3.sr : ~ c r ciscd, the system always failed and the banks either failed thenl.ir2lves 01. hall to resort to some measures which did not meet the premises of the pulbliq: c ~ > n tention that all deposits were payable in gold. That was provetl, of coui-;,., in August, 1914, when there was a run on the British banks, including t l Gank ~ ~ of England. There were 900 millions on deposit drawable by cheque, ansl 5,)lncthing over 200 millions \vere tlrawn within two o r three days. The n.llul~* < t111t o xoltl stocks in the country were exhausted a'ntl passed into the hands of t11,. c ; c ~ ~ era1 public, leaving pojsibly a t least six hundred millions of deposits ~ i ~ i t l~ l .i i .~* , ~ : j resented by a n y tangible assets whatever in hands of the bank, thus pmvinq that the banks again, as they had been doing even from the days of t l ~ cgolrlsmiths, issued more receipts than they possessed tangible wealth for. Now that was, of course, originally-and I say this quite dispa;;.ionarcly because it is working to the end of a practical result which is importa~lt-that was a system which originated in f r a u d ; it was a system which o r i ~ i ~ ~ n t by l cr the issue of more receipts than there were goltl coins, on thq assumption. which \\as generally true, that all the receipts would not be presented xt once for honouring. So long as the actual gold behind those deposits was not all rlrawn a t once, it was working perfectly successfully o r fairly successfully f o r quite a long time. I t didn't work when everybody exercised his legal right to draw this gold, but it became so recognized t h a t i t became the basis of banking and it is now, and although there has been in the past few years a good deal of discussion about the matter, the subject is now a dead issue. There is no q u e s t ~ o na t all about it that a right has been assumed by slow process (which I have been endeavol~ringto sketch), on the part of the banking system actually to issue new purchasing power by the process of issuing more receipts for wealth than the bank possesses the basis for. Now the question is that since that system up to certain point works, what is the basis on which these additional receipts are issued? There is no qucstion a t ajl, none whatever, that the basis on which those receipts a r e issued is the general wealth of the community, and they a r e issues of receipts, o r demands if you like, for payment by the geneml community, of real wealth, which tienlands only have value because of the existence of this real wealth. The real bvealth does not belong to the people who issue the receipts, although the receipt.; are issued as the property of the issuers and n o t a s the property of the owners of the real wealth f o r which they a r e a demand.

I hope you have grasped that because it lies a t the bottom of the soun(lncss of a n y radical amelioration of the existing financial system. You have now esisting a t the present time a state of affairs in which you have one set of peopl!.. tl-,e yer~eral community if you like, certainly the producing community, ~ h xre o ~ creating real wealth with the things that actually go to make a higher s t n n , l : ~ rofl living and the provision of bed, board and clothes. Those producers of ronl nm.alth can produce real wealth from now to Christmas but they cannot produ(.,! one penny of purchasing power, one cent of purchasing power. The pro(luction

IJIrctal wealth ant1 the production of purcnasing power arc t x o separate industries, and the production of purchasing power has become monopolizetl under a system which we loosely call the banking system. This purchasing powcr, which is actually created by this system, is issued to the public which produces the real wealth, not a s a gift, not a s the issue of tokens, to the producers of the real wealth-tokens which from the original beginnings of the money system belonged to the producers of real wealth and not to anybody else and were simply tokens of wealth-but those tokens which a r e in eKect p:lyments for real wealth produced by someone else a r e issued a s a Loan both to the actuai producers of the wealth and to the general public. I t is therefore implietl in this state of atfairs that all wealth belongs to the financial system, because only the financial system can issue the effective demand f o r the real wealth, an(l t l ~ a teffective ~ l e ~ n a nis d always issued a s a loan and not a s a gift.
Ownership of Wealth

Now that brings us to the necessity f o r considerinfi th,: o\r.nership of wealth in the n1oder11world the real ownerdnip, because cr:rtainly cthic:rlly, anrl in fact pragmatically on that rests the basis on which prolrer reform can be l~ased. Now you might a t first sight say, "if you follow the! lirie ol' arjiumerit you have becn pursuing, then quite obviously the people who ought to issue the money are the producers of wealth; that would take the money systcm back to whew it began, make it simply a token system, a ticket system." 'Chat would be quite true if the actual operators of the producing system in the motlern worlrl were the true producers, but they a r e not. That is quite in(iisputab1e. The future of the modern world, which you all admit without any explanation or tliscussion, is its immense protluctive capacity, so we have in fact changed from an sqr of scarcity into an age of real plenty. That is a change in no sense merely due to due to the population, in fact it is hardly a t all due t o population; it is a c h a l ~ g e of accumulated knowledge of technique of the use of po~ver, tonis, or organization and many other things descended t o this generation from the labours of our ancestors. The modem producer-not so much of course, the agricultural producer, although to some extent that is t r u e by the use of harvesters, ant1 gang plows and many other things, application of transportation a n d so forth--but taken over the whole world, the actual producer so calletl is more ant1 more the delegate of the general community, delegated a s you might say, to press the keys of an enormous productive machine which is over-whelminsly pffpctive a s a result of inherited knowledge and technique. You can prove that to yourselves if you consider the effectiveness a s producers of ten men, let us say in Detroit, and ten men on a desert island. What ten men on a desert island can do, is what they can do a s producers; what ten men can produce in a year in the way of wealth in Detroit is due to their value as producers plus their application of the heritage of civilization, and I suppose ten men in Detroit could probably produce ten thousand times a s much real wealth in a year as the same ten men on a desert island. The difference between that productivity is due not to their o~vn virtues but t o their inheritance of this technique of civilization. If you take your mind back axain to the original conception of the money system which was a token system issued b y the owners of wealth to facilitate the distribution of wealth, and you also bear in mind what I have just been saying that wealth in the modern world is overwhelmingly the result of the heritage of the general community, you will see that certainly from the ethical point of view and I think I can convince you very rapidly from the practical point of view, the owners of the money system are the owners of the wealth, and the owners of the wealth a r e the general community. They a r e the tenants f o r life of that heritage of civilization. Now that is of course merely, a s some people would say. a n ethical araument, and I quite agree u i t h those people that if it was not more than a pretty exercise in logic i t would not be of much importance. But a s a matter of fact. a s a result of this technique of production, we a r e reaching the point where actually a t the present time, and much more pretentiously. Tse a r e required to ~ n v i s a g c state of affairs which requires under the productive system a decreasa

ing percentage of the available population. That is because of the increasing perfection of these machines, and the fact that a decreasing number of operators are necessary to tap the keys of the machine, as you might say. Each one is increasing his out-put per head every year. For instance, working from entirely different premises, or rather along different lines, but from the same premises, I myself and those with me arrived a t the conclusion that by about 1940, if the rate of production increased in Great Britain only uniformly, and i t is quite likely to increase very rapidly by what we call acceleration, there would only be possible work in Great Britain for eight million out of about fourteen million available working population. Now I and those with me arrived a t that conclusion by one route. I happened to discuss the subject with Denis Burney the airship builder, and without my mentioning any figures, o r without his having any of my information available, he said, "Oh, we have been working on this, and we shall have six million unemployed in Great Britain by 1940 if we go on the way we have been doing and nothing is altered." Now that involves a new idea in regard to the monetary system or quite a new use, let us say. I t means we have a t any rate to prepare, if not actually to arrange (at the present time in the older countries we have to arrange, but perhaps in Canada you might merely have to prepare, I should not like to say definitely at the moment which one of those may be necessary), but you will have to arrange or prepare for the distribution of an increasing number of tickets which the goods for this machine of civilization can produce, without its being necessary for the receivers of these tickets to pass through the turn-stile of the factories, as you might say. I n other words you have got to get away from the idea that the only legitimate grounds for the receipt of goods and services is the doing of work. If you introduce any principle of that kind into your ideas, you contravene the first idea that I would endeavour to make clearer to you, that the objective of the producing system is to deliver and distribute goods and services; it is not to provide employment. And if you have, as you have, your best brains endeavouring to eliminate employment (because that is what the works manager means when he says, "I am reducing costs." He means "I am producing more goods with less labour,") and your best brains all over the world are endeavouring to do that, and you have to recognize the true meaning of that and to arrange for the distribution of goods and services, whether the labour of the community is required or whether it is not. The introduction of the labour of the community is merely a means to an end and when that end can be achieved without that labour, then you have to legislate for the distribution of the goods without worrying about that labour. By all means consider the use to be made of the services of the community, but do not force i t into the production system where is is not needed. That is the theoretical basis. I have now perhaps tried your patience sufficiently in regard to the existing state oE affairs.
Financial Powar in Hands of Few

I want to bring to your attention the second aspect of this matter. The situation has two quite separate aspects. One is the technical situation which I have been outlining, and the other is a situation which you may call either political or military, whichever you like, and that arises out of the fact that this monopoly of the ticket system which we technically term the monopoly of credit is the most far-reaching and valuable, if you like, instrument of power and policy which the world has ever known, that it is in the hands of a comparatively small body of individuals and organizations, and that they are quite obviously, if you like to put it that way, quite naturally, quite humanly, taking human nature as it is, not going to give up that monopoly unless they are made to give it up.
You realize that that aspect of the matter is quite separate to the technical aspect. You may be indisputably right about your technique; you may go to those individuals and say: "This is the situation: You are causing all the troubles in the world a t the present time practically by the monetary situation. Here is a perfectly good plan which will put this situation right," and you will I think be met, if not in so many words, a t least in effect, by the answer: "Yes, very

General Foch. So t h a t the problem from the practical point of view very largely resolves itself into-"What can you put forward which will a t any rate ameliorate the present state of affairs. so that i t will be a basis from which you can make a further attack upon the existing state of affairs?" I may say that I am just finishing a tour of the world on this subject. that is. a r e listened to in high financial places is in order that steps may be taken t o see that their views are not put into operation.mingly increasingly aware of the drastic necessity for dealing with the financial problem. practically incapable of discussing the existing monetary system. that there is nothin-g going on south of the line a t the present time which fundamentally contravenes the tenets of the existing financial system. They a r e always ready t o discuss the questions of financial inflation o r deflation. constitutionally. f o r reasons connected with the debt. and what can you put forward. because they make almost equally well by inflation o r deflation. that is t o say within the limits of the law. a t the present time ( I a m not speaking cynically. As a matter of f a c t the monetary system is supreme and in most cases ( and I am remembering where I a m speaking). The questions of inflation o r deflation in the ordinary way a r e questions f o r discussion with the financial people. and that was the contribution of the limited objective. The great stratcgian of the Great War. from which I have just come. and the monetary inquiry was. the large debt t o London. and i t is being met by a hardening opposition and determination on the part of the financial powers t h a t be. if you assume that you cannot finally tlispose of it. Laws. what we can do. and i t is impressed on me by the situation everywhere that the general population is bcco. . and in what way can you put it forward. but why should we change? We are not suffering. The theory of our modem democracy is that parliament is supreme and t h a t all powers rest with the democracy. always assuming that it is done by constitutional means. had one contribution t o military science to make." And there seems to be very little doubt a t the present time t h a t the only reason that people with.interesting. bearing these f a d s in mind. we a r e perfectly satisfied with the situation. might still be effective in regard to this matter. I do not say that nothing may go on b u t a t the present time I venture t o say there is nothing fundamental of t h a t kind going on now. The general public loses on both of them. had a monetary inquiry. perhaps a little more modem ideas about the financial system. it is simply a question of tactics. and I have very little doubt t h a t that is the sort of thing which will have t o be done in regard t3 thi3 matter. There is nothing fundamental about that and I should like to say with all the diplomatic consideration due t o a friendly and very adjacent great power. but as a matter of fact) laws bearing on the financial system a r e broadly speaking almost entirely laws f o r the protection of t h e financial system a s i t exists a t the present time. broadly speaking. In other words you a r e very largely in the position of a very ingenious general who sends all his plans to the opposing general anrl says: "Don't you think it would be a good idea if we do that. Now New Zealand. so that you can put i t through under the existirig circumstances. So that we have t o consider. is a t the present almost inevitably the tail which is wagged by the financial dog. Send me some more plans. There is one thing in which I think i t is possible that the law of Alberta as a province. so that there is no real objection to discussing whether more loans shall be issued or additional loans shall be recalled and mortgages foreclosed. or of the Dominion of Canada." and the opposing general says: "Thank you very much. Must Be Done Constitutionally I may say that in the realms of the abstract I have not the slightest objection t o revolutions or anything of that sort." Then he considers them with a view to seeing that they are not put into operation. against change in any fundamental aspect. f o r no reason which is a t all a fault of its own. but I a m perfectly convinced they are absolutely futile and impracticable under the present state of affairs. that in some way o r other we have t o get this matter done in existing circumstrinces. in most cases the parliamentary system. I will consider those too. let us say. the taking of one trench a t a time.

in many cases under a lien which never can be realize*. and will proceed a t no small r a t e to provide every individual with a stake in all undertakings in a way which is not a tax on other people. We will alIot those shares t o the individual so long as he is a naturalized or natural-born subject of New Zealand.I. and the figures under which these assets a r e held f o r balance sheet purposes." Broadly speaking. a n d will be ear-marked as not good security f o r loans and non-transferable. There is an enormous difference between the disclosed value of the assets either held by banks or held in lien b y banks. We will use that suspense account for proriding every individual of the population of Nem Zealand over 21. and a-e will go to the banks a n d say: 'Now you have the best possible precedent in the Bank of England f o r limiting dividends to 6%-which is the dividend invariably paid by that bank. we will not tax you even on those assets. Then we will ask you rc do this. We 1~ . with shares in pa3lic issues of debenture stocks or preference stocks which will be paid for o?lt of this suspense account. by the other suspension account t o which I referred. and we will take that power a s it stands. we will not take those assets from you. a n d we will make suggestions f o r the amelioration of the existing situation within the lines of the elcisting monecz1-Y system. yon will begin. without i t beine necessary for them to pass through the tnm-stiles of the factory.!.jonal. thus providing tho5e individuals a i t h the beginnings of a dividend share in all undertakings. Under those conditions you will immediately make i t possible f o r a number of producing organizations which a r e now moribund. and we will see how they work. a s we may say.our law-making powers limit your dividend to 6%. and we will transfer that monetized value to a suspense account. that it is within the power of monetization of real wealth that this power of credit lies. and which cannot meet their interest charges. and if you do not do i t we Nil1 ask you your reasons f o r your objecCI rn: we will ask you to make a return of the whole of your assets both real and n . to go back into production and employment And on the other hand. but we will merely ask you very kindly to exercise your exclusive rights of monetizing thnt value. T h e money which-is created by t h e New Zealand Reserve Bank for that purpose will be automatically retired by the payment of those overdraftsi on the well known p r i n c i ~ l ethat the repayment of a loan destroys a deposit. I n addition to chat we will go to the insurance companies and we will ask them f o r the same returns and we will monetize that return. 51. 'rithout having taxed anybody t o provide the purchasing power. we will apply to t h e retirement of the overdrafts and the loans of agricultural a n d other producing concerns. The difference of those values through the newly formed New Zealand Reserve Bank." Real Value of Bank Assets I may ray in digression that there is very little doubt that if we had any conception of the market price of the assets held by the financial institutions we should be very much surprised a t the real profits that they a r e making. but with the necessary purchasing power t o buy the productions of the country. Now certain institutions alone have the power of monetizing wealth. and where i t is found that the disclosed m:lrket value of pour assets is in excess of the value for which they a r e held f o r baiance sheet purposes. the suggestions were something like this ( a n d I shall have much pleasure in depositing a n actual copy with the prime minister for the use of this house): "We know quite wall that t h e core of this problem is in the disparity between the real wealth available a n d the monetization of that wealth. a t their market price a t the present time and a t t h e price a t which they :ire held on your balance sheet f o r the purpose of your annual balance sheet'.so that the line I took with New Zealand was this: "We will assume that the existing monetary system is perfect. That does not meet certain other difficulties which arise under these existing financial systems but it does directly focus the attention of the public upon that . so that these farmers and agriculturists who have become practically hopelessly in debt to financial institutions may have those overdrafts and loans retired without the taxation of anybody. K e 523-: YOUwill make this return.

Tools and other implements of production a r e not in themselves anything but the means to the production of consumable products. nxtl the tcols by which they a r e produced. our present organization. Our problem in Great Britain. I had most of their data. Tliat. in a few years' time. and I talked over the whole situation with them and I have met a t various times the chief consulting engineers of the Soviet government and so forth. sd f a r as I a m concerned. and that country is Russia. Now the administration of tools and so f o r t h i n t h e most conmprehensive sense of the word is. is the power of administration within this framework which is set down by the laws of the country. as I would put it. That is a pure fiction. and it does brins up in our opinion for p ~ ~ b i i c discussion this ciuejtion of the right to monetize. I am strongly in favour of leaving that where it is because I believe that the administration is better carried on under that system than under a n y system of which we have a n y knowledge. that their problem is a problem of production. but the extent t o which they shall be taxed and so forth. they have not got the things t o distribute. two o r three years ago. not a problem of scarcity. by that system. I was approached by the Soviet ambassador i n London t o see if I could render them any assistance in their situation. and to the e. existing real meaith. and the conditions under which they shall be used. and I say this again without having a n y bias in the matter. Now we have reached t h a t glut by this present system. Aberhart when he appeared before the committee a week or so ago. I feel confident.. not only a s t o the methods by which they shall be used. There is only one country in the world which is suffering from scarcity. Mr.locus of the diiliculti. MacLEOD: May I ask a question wkich was substantially put to Mr. because every country reserves to itself the right to make all sorts of rules. and I think the conclusive proof of thzt is that our present civilization. When that citadel falls ( a s it must fall. . I a m going t o put it now: Is it not true that the goods and services available in Caneda. Xs 3Iajor Douglas covered the grounds to which this question refers. than by a catastrophic shock) i t will undoubtedly involve certain measures f o r the control and reduction of prices. there is only one country i n the world in which you have absolutely u n i f o r n ~ and universal state administration o r production. I said that I could do nothing f o r them a t the present time. Canada and elsewh_ere is a problem of distribution. o r successive production. that those tools and other implements of production a r e his property. They a r e unquestionably under the personal administration of private individuals and the answering of that question in the form of yes o r no would of course depend entirely on what you mean by property. measures vvirh whicil I think you a r e all probably to some extent familiar in this house. What is really left to the individual under our present system. distributed and exchangeci a r e the personal property of private individuals? A. The problem of the present time. seems to me to be one way to attack this citadel of real wealth. but it is better perhaps that it should fall by successive staps. QUESTIONS A N D ANSWERS-MAJOR DOUGLAS Q. not to monetize.xtent t h a t departure has been made fram this present system there has been departure from the condition of glut. o r still more important. F o r instance. under existing conditions. But none of these theoretical objectives can be properly attained so long as this monopoly of credit remains unchanged. has been brought to its present pitch of glut. vested in the individual under the fiction. b u t simply look a t i t from the point of view of the engineer. We have either actually o r potentially more than we know what to do with and that situation has been brought about b y private administration of tools of prodcction with certain limitations imposed on them by the government. looked a t from the most orthodox point of view is a problem of glut. A short time ago. under our present system.

and therefore the poor have too little. . Q. Mr. Is it not true t h a t all governments have done so in the past. factory act legislation. .Q. . MATHESON: Do you consider that a n y government anywhere. and this is the orthodox theory upheld by the bankers ant1 the orthodox economists. If i t mere true that the wholel cause of the present difficulty is because the rich have too much money. Mr. and that ii entirely a question of finance. is under what we shoultl call.lr o f tlistributing a privately-produced product if the price is the same. in the world is the problem of the distribution of the product.. so I will not present the questions now. and never has the existing financial system worked so badly.s too iong hours. That i. Now if t h a t were true. We will be very much interesterl i r i knowing to what extent we in this province can apply this theory of sosi:ll credit. and if i t is. more especially in the last ten years? A. but that it is inequitably distributed and that therefore the poor are poor because the rich a r e rich. > I administration by which the goods were produced. . I rvould like t o develop your answer further by just saying what you have in mind when you mentioned the present system.i~.. it is not a question of administration a t all. just how much would be involved in your mind when you refer to the neecl of governments making regulations so that those goods can be distributed'? A. f o r steeply graduated taxation of the rich. I can answer that very shortly: No. Now one of these theories.+organization of the financial system a r e necessary. if not ethically. Absolutely. a t a n y rate practically ( i f there could be a difference between ethics and practical things). and the more steeply you graduated and the more you increased taxation. T h e other answer is. of course. MacLEOD: I do not think there a r e a n y further questions I could put t h n ~ would be greatly different from the ones that I have already stated. Do you readily recorrnize it is a defect in so f a r a s it fails to distribute the goods. These have nothinr in tliern. unil-1. and matters of that E n d . admitted. Q. steeply graduated taxation would obviously be the remedy.q address so far. t h a t there is not sufficient producing power even if i t were all pooled. I might perhaps amplify that. in. to do with the distribution of the product. l ' h r question of distribution is entirely wrapped up with the two factors of ~ I I I . There can be only two theories a t the present time a s to why the goods which a r e produced. I think. o r could be produced. Q. Now we know as a matter of fact t h a t never has taxation been so steep and so onero w .. but possibly Major Douglas has not come to the p n i n r where the questions would apply. The problem a t the present t i 1 1 1 . which I think is practical proof t h a t t h a t is not the answer.> say. Do you consider that we have reached the stage of diminishing returns in taxation ? A. I do not think that a n y government regulations other than a complete I. Yes I do.. and available purchasing power and is entirely separate from the metho(i . but I realize that Major Douglas has not come to that point in i1i. the more effective it would be and the better off the world would be. o u r present financial system can continue to administer the affairs of t i l e electorate without going progressively further into debt? A. there is ample justification. Mr. I t would only make it worse. Q. is that there is sufficient purchasing power distributed by those xoods. Where the legitimate field of government regulation of in(lustry corn. I n reqard to the tlistribution of goods. Major Douglas. to provide f o r the purchase of t h e products which a r e available. The fact is.l'. The dific~tlty of distributing a government-produced procluct is just as %reat as t1i. MacLEOD: Without going over the first question. cannot be bought. I think. that people should not work in an unhealtky atmospher?. and . an([ not i t < t b 4 . F4'oultl a n y policy of economy o r tariff reform correct this condition? A. I II:LL#> other'questions here.

of the people in Western Canada. in many cases his food provided f o r him in canteens. there was a feeling f o r the moment among wool growers that things were a good deal better. do you think? A. He is paid a certain -::n money. too. Are conditions in Australia back t o normal. but the indisputably correct theory about prices is that the price must ultimately be paid by the consumer. where the export trade of most other countries fell or remained practically stationery ( n o country in the world had ever registered a n increase of 53 per cent in one year in its export t r a d e ) . but I think I can assure you t h a t conditions in Australia a r e very f a r from being satisfactory to the Australians. f i l l the reduction. But even disregardin^ t h a t entirely. because J a p a n is becoming a large wool buyer and I think that the wool districts of England might take very considerable notice of what is going on there. in Great Britain. Well. The only thing that I can definitely see a n y sign of improvement about. of a general increased prosperity. his wages paid over in money a r e very little more than pocket money t o him. and i t is not what you might call the public opinion. I feel that strictly speaking I ought not to answer that question because i t is dealing with what you might call a friendly power. These statements are based first of all on a complete misapprehension as to how the Japanese worker is paid. or restriction. which is very little more of than pocket money. Now of course the answer seems to me. k! . Now in regard to the question of Japan. and what is the cause of the rapid increase in Japanese export trade? A. but beyond t h a t there is no s i c . I have been in Japan and I know numbers of Japanese and I a m fairly familiar with conditions there. You have just returned from the Antipodes. but it is not the orthodox theory. looked a t from their point of view. to anybody but a banker or economist. there can be no doubt about that. you a r e bound under orthodox arrangement to do t h a t a t the expense of the rest of the community.-2ustralia. and it was common cities I was not in Australia very long-they knonledge. but the question is where does that increased price come from? There is of course t h e alternative theory about this thing. is that it is due to the very poor standards of living of the Japanese and the very low wages. because. so that while i t may be possible to increase the prosperity of the farmer temporarily. The increase in the price of wheat does apparently f o r the moment increase the purchasing power of the wheat farmer. he is housed. of wheat production increase the purchasing power of the farmer. and you double t h e price of all articles f o r sale you halve the purchasing power. and as I say. in talking to A u s t r a l i a n s a l t h o u g h I spoke in several Australian agreed. let us say. She is subsidizing the export trade using the national credit f o r the purpose of providing the purchasing power o r subsidy. In the first place it is not true. Now there a r e two answers t o that. The orthodox explanation of the fact that Japanese export trade last year increased 5 3 per cent. Japan is out f o r the wool trade. They do not want many things that we regard as a high 87 . that the price of wool has risen. Q. I think there could be no doubt a t all about that.the reason for that is that the power of monetization of the wealth which is there is held by this monopoly to which I refer. and his pocket money is considerably greater than that of the equivalent workman. to show how ridiculous it is. either free o r a t a very small charge.:unes a r e provided f o r him. J a p a n is doing this almost unquestionably by what might be called the upside down use of m y views. Q. is to be that i t is not. which is incidentally very much linked up with wool. and as wool is a staple product of . and have the Australians made a wonderful recovery.:. the standard of living in J a p a n is very high. If you have a certain amount of purchasing power. the answer to that of course depends on whether it is possible t o increase the purchasing power generally of the community by raising prices. so by increasing the price of wheat you simply take more purchasing power off the consumer as a whole. having captured the cotton trade.

I have no doubt. but I mill say the direct labour charges on the production of rayon are less than three-quarters of one per cent of the total selling price of rayon. to provide s smoke screen. I have more o r less confidential information as to what the direct labour charges on rayon are. and in many cases exceuent social conditions of all kinds. I don't believe myself that the question of private ownership. . do you think the financial interests will impose a trusteeship on the western farmer. Has any central bank in any country solved the problem of want in the midst of abundance? I f so. Following that. But the essential point is in no way involved in the private ownership of the banks. very small). Q. Can we subsidize wheat and coal for export without going into debt? Would such action debase our money? A. is simply diverting the attention of the public from the main issue. similar to the one recently wished on Newfoundland. 1 Yes. and partly to give a comparatively small number of people. I think I should be merely entering into the realm of speculation on that and I would like to be excused. is a matter of any importance. it could be easily done. good food. do you know if the Bank of England is favourably disposed to the formation of a privately owned central bank in Canada and do you know-if two of their officials travelled with the MacmiIlan banking commission recently touring Canada? A. and how is it linked up with the other central banks of the world. one of the things in which Japan has made the most tremendous strides in completely displacing other countries is the rayon silk industry.standard of living. and she is doing it by supplying national credit to the export trade. Q. The only answer that I can give to the second part of the question is. Well. MATHESON: Following my question of a moment ago. The point is. Now what difference to the capture of the world's rayon trade does it make? If you double wages. for a bank to have any capital a t all. i t can make its own capital. when the wages are only three-quarters of one per cent of the selling charge? That sort of thing applies to a great many of the things which Japan has captured. and t o what extent is the poIicy of the country in which it exists completely dominated by outside interests? Q. apparently. the article of association almost expressly prevents it being possible f o r the private owners of the shares to dictate the policy. In your opinion is the increased upturn in world production due to the increased demand for armaments? -. when they need capital. but they have pleasant houses. No. I n fact. I a m surprised that it mas only two. I will not give you those figures. as I said a t Ottawa in 1923. I t id really not fundamentally necessary. I a m quite confident that' i t is the policy of the Bank of England to force central banks on every country everywhere. But the central banks which are being formed with such rapidity all over the world-I think there have been 28 formed since the war-are being provided with a capital. a share in the loot. good clothes and plenty of amusement. broadly speaking. o i a central bank. so that any discussion as to whether two o r three million dollars of shares in a central bank should be privately owned or publicly owned. Mr. so-called. Q. regarding going progressively further into debt. and was very much laughed at. and the policy which the bank carries out is not affected a t all by the ownership of a certain number of shares by the general public. or is this necessary under present conditions'? A. which is: What policy does the central bank pursue. Q. but in many cases a large number of people ( i n New Zealand. what policy the bank carries out. was i t privately owned? Private Ownership of Central Bank A. Quite apart from that.

Q. The best way of understanding what the speaker has referred t o a s the 'I. growing out of that. Mr. the theory that there is never put into circulation a sufficient amount of purchasing power. then to the portable wealth. Q. I think. So long a s the whole transac- . t h a t question of course is outside what I was speaking of this morning. "A Plus B" Theory Q. but they a r e frequently referred t o so we will assume that there a r e normal times) the deposits remained fairly constant. starting from the banks. so long as a charge is incurred 2nd liquidated inside that period of three weeks it can b e liquidated by that cycle of the flow of purchasing power. Therefore. you must have a right. My question is this. then to the tokens f o r cattle. They a r e distributed f o r wages and so forth and they come back t o t h e same source through the agency of price. the question of just price was discussed i to some extent. I a m coming t o this point. but my understanding is that. J u s t in what way would you use the undisclosed assets of banks and insurance companies to distribute purchasing power to the farmer. including governmental business. because of the powers which seen1 t o be resewed to the Dominion Government under the British North America Act. I would like if you would elucidate two things f o r the benefit of the committee. it would be extremely difficult. you took u s through a very interesting story of the development of money. starting from the non-portable wealth. referred to a s cattle. Now. it is purely a legal question and I a m not really competent to answer that. then to the receipt f o r that portable wealth. a large surplus or excess of receipts f o r the portable wealth upon . That is the way the existing financial system works.% plus B" theory is to look a t the matter in this way: The purchasing power of the general community is practically 98 per cent. that cycle takes. o r period of cycle through which this inoney which starts from the banks goes o u t through cost and comes back again to the banks through the agency of price. and secondly in what manner could we liquidate o u r provincial debt under social credit? -4. A. Well. and in Great Britain the average is somewhere i n the neighbourhood of around about three weeks. Mr. a s a first step. in Great Britain since the w a r they have reached around between 1 6 and 18 hundred millions of pounds. going out through costs a n d coming back again through prices. Now we have a s a matter of fact means of calculating that tiine. F o r instance. I think I should probably be more helpful in answering that question if this afternoon I actually read the proposds which mere made to the New Zealand government and then elaborate those to any extent that you like. Now all business in the world a t the present time is carried on on the theory of the balanced budget. Now we a r e very interested in your "A plus B" theory. b u t credit f o r other forms of wealth t h a t were deposited o r mortgaged t o t h e people who had t h e privilege of using credit.ivllich they were supposed to b e based. and personally I would very much like to hear you tell us a little more of that theory which I believe is basic t o the Douglas system. taken over all products. there must be a time that. You will realize that is not a technical question. can the province of Alberta f x a just price? A. CAMERON: When your proposals were discussed in this house before the committee about two weeks ago. Now there is quite obviously a circulation of those deposits through the agency of costs. t h a t t h a t excess of receipts was a necessary expansion of medium of exchange brought about by the industrial revolution and the tremendous increase in productivity of the industrial production system. CIBBS: Major Douglas. gold. and. but I have no objection whatever t o answering i t shortly. The actual deposits in banks under what a r e sometimes called "normal times" ( I don't know what normal times are. bank money. and t h a t i t eventually became not mere receipts f o r the portable wealth.

Of course the answer is simply one word. cannot be liquidated by a stream of purchasing power which does not increase in volume and which has a period of three weeks. f o r instance a t the end of a war. Yes. a r e most of the charges made i n respect of purchases from one organization t o another. Q. PATTINSON: Mr. and that answer is not the same a s t h e answer which would be given in the first place. and a s one way out of t h e present so-called depression that we a r e in. on a railway which was constructed a year. i t is without doubt. The question is. five o r ten years ago. 1935. and it can be shown. can we ever solve the paradox of want in the midst of plenty simply by doing away with plenty? A. There is equally no sense in having something existing f o r which nobody has a ticket. of which I am a convinced opponent. i t is. three years. where charges a r e still extant). The consequence is. Would the number of tickets be unlimited. having the situation in the world as i t is a t the present time. I think you will realize that that question is capable of two entirely separate answers. No. there is no difficulty involved in the prices and the costs being equal. of course on the basis of national wealth already created? O r would the first step be t o abolish certain taxes such a s the sales tax and so forth and the national dividend be commenced a f t e r the balahcing of. its tremendous facilities in regard t o water power. Q. I have a further question: Assuming that i t was decided t o put your system into force say on January l s t . but any item of cost which is outside that period of three weeks we will say cannot be liquidated by that stream of credit which is constantly i n circulation a t a period rate. that we a r e increasing debt continuously by normal operation of the banking system and the financial system a t the present time. My reason f o r asking that is many that criticize your scheme think that i t means unlimited credit and unlimited tickets t o be issued. Now we know there a r e a n increasing number of charges which originated from a period much anterior to three weeks. Q. you have a piling up of debt. a n d of course i t is that argument which is always brought up fof a dictatorship. Chairman. you have in many cases a diminution of purchasing power being eqilivalent t o the price of the . Mr. 1935. You could then do certain things which would be purely in line with the correct theory as t o how the thing ought to be done. or would that be regulated by t h e actual production of potential production of goods and services? A. "Your theory must be absurd because we know that there a r e periods in which purchasing power is in excess of the price of the goods for sale. But the other answer is what can you do. a s a matter of fact. what would be the first step? Would national dividend be paid each month a s from January l s t . I would like to ask one o r two questions. and one is in relation to the huge amount of talk that is being indulged in today on the necessity of restricting production in order t o enhance prices.tion of costs and prices is involved in a period of about three weeks." What people who say that forget is that we were piling up debt a t that time a t the rate of ten millions sterling a day and if i t can be shown. a n d I should place very high its natural suitability. otherwise we should not be increasing debt. and that is t h e situation. Is not Canada's richness i n natural products a factor in favour of adoption of your plan? A. the loss of revenue previously received from sale tax and so forth? A. Quite obviously there is n o sense in having a ticket f o r something that does not exist. and included in those charges. the answer t o be given in t h e second case . then t h a t is proof that we a r e not distributing purchasing power sufficient t o buy the goods f o r sale a t that time. txo years. we will say of three weeks.goods f o r sale. Q. but all such charges a s capital charges (for instance. The first answer would be what would happen if I were a n absolute dictator-which I have no desire to be. I t is fre~luently said.

You do not eat wheat. Many of you a r e interested in growing wheat. the use of power. which is primary t o the whole thing and matters of that kind. We hear ali over the world a great deal of the desirability of a co-operative commonwealth. We a r e in exactly the same gave this illustration in Vancouver three or four position a t present as this-I days ago-supposing you imagine that the population of Edmonton had to Mr. Q. that there is any country in the world a t the present time. There is no difficulty whatever in providing t h e world with a rationing system if you establish everywhere a complete dictatorship. I do not think there is any country in which it is a t all diflcult physically to provide the whole population with the highest possible standard of living that anybody could reasonably desire. you wear woollen clothes. it is possible t o provide f o r the general public a higher standard of living. I do not think. I n the westernized countries it is entirely a problem of distribution. I think. Unless steps are taken within a comparatively short time to readjust the financial system so that it will work.monetization of this central pool of wealth is in the hands of a monoply that we call the financial system. Q . a wool country. exchange their wealth with each other. and I propose to elaberate that this afternoon. a n d it constitutes the greatest danger with which the world is faced a t ' the present time. In order t o understand it. not Communist a t ail but another form of dictatorship. the consumers. Monetization of Wealth FARQUHARSON: Would you enlarge on the idea of the monetization of wealth? A.really involves what is the first trench of . quite a different thing. The old idea which is still prevalent i n the minds of a great many people is that people who work. A little consideration of the world that we all Live in will s h w you that that is not true. Now they do not. certainly no country operating under what one would call westernized conditions of mass production. I t is possible to deal with the material basis of the present problem. The monetization of wealth is a t the root of the whole of this problem. Has the relative condition of self-sustaining nations in the way of natural products anything t o do with industrial conditions and the hope of financial salvation ? A. The people who a r e engaged in it turn their product (which probably by itself is of no use in the form in which they make i t ) into a central p o l of wealth from which the individuals. draw by means of what economists call effective demand. the financial system as we know it will be swept away and we shall be faced everywhere with some form of dictatorship. it would not be any use of you exchanging wheat f o r wool. you do not wear wool. and I was just hinting a t that this morning. through the agencies of a dictatorship. but that involves a surrender of all those thing3 f o r which the AngloSaxon race has fought for a thousand years. Yes. leaving all powers in the hands of the dictator. and a problem of distribution can be only solved either b y a dictatorship o r a modified financial system. either Fascist or what is called Communist which is. There is no other sort of commonwealth existing a t the present time. Now the .he existing system that you can take in the direction you want t o go. I must take you back a little to the considemtion of the conditions under which modem wealth is produced. I s there any way to stop the erratic retreat in living standards except by changing our present method of distribution of goods and services created? A. We have a co-operative commonwealth. with one o r two exceptions. What we have not got is the proper means of drawing from that co-operative commonwealth which exists a t the present time beneath our very noses. and effective demand is simply tickets. in the strict sense. You do not e a t wheat. The central pool of wealth is there. Q. and a modern production system is a scientific system. . The whole productive system is a co-operative productive system. Now supposing that you have adjacent t o the wheat lands of Alberta . producers.

and endeavour t o take some action which would not go the whole way to deal with tile situation. EVIDENCE OF MAJOR DOUGLAS-(Continued) I think I said this morning t h a t it might be helpful if I read out to you the exact phrasing of t h e preliminary scheme which I put before the New Zealand legislature. 6 per cent per annum on the subscribed capital.eerns obvious that the position in New Zealand was such that for the moment New Zealand was t o some extent tied by its very great indebtedness to Europe. I t is the power of monetization of wealth. They make things. Supposing that all those goods and services that we tern1 tiie "standard of living" and "the means n of existence" and so forth. I t has nothing to do with the production of wealth. and t h a t is the thing with which you will have to grapple. but. completely outside that. it doesn't even mean to say that it has to be nationalized. we a r e the people who will make the terms on which the tickets a r e issued. over t o the individuals bvho need and want them. operated by individuals. they do not make one penny of the money which provides those thin-gs. No bank shall increase its capital in such a manner as to affect the gross amount of dividend distributed in respect of the business carried on in New Zealand. and the railway between Edmonton and Calgary has got into thm: nabit of only allottinq seats on a train on receipt of a ticket. ~necessity of life. the tickets a r e our property. Within three months from the enactment of this proposal every bank operating in New Zealand shall make a n exact return of its assets. "We a r e the only people who have the right to print and issue tickets f o r this journey between Edmonton and Calgary." Now that power of issuing tickets forms a valid claim on the real wealth. and we will make o u r own terms.get any distance a t all in solvine this problem of getting the goods which a r e purchased. a step from which further effective measures could be taken. They grow wheat. (Luncheon Adjournment. and shall not be used to impose a policy upon the public.travel to Calgary a s a n a b s o l u . they bake it into bread and so f o r t h . you have the drivers. We a r e not interested in whether there are enough trains.) AFTERNOON SESSION. t h a t is in the possession of this thing we can call the ticket office and I think you will see Lhat you cannot possibly really . you have everything necessary to transport the popalation of Edmonton t o Calgary just as often a s you want. except with the consent and through the agency of a legal enactment of the Dominion legislature. It does not mean to say that you have to operate the ticket office. From the enactment of these proposals. That is a question of policy t h a t the right number of tickets shall be issued. You have the track. specifying :ill . but would be a step in that direction. no bank in New Zealand shall distribute dividends either in or outside New Zealand in respect of operations carried on vithin t h e Dominion of more t h a n . That is a matter of public policy. be all involved in travelling from E ~ l ~ n o n t oto Calgary. APRIL 6. or whether i t is vitally necessary that the population should travel. you have the train. until you get control of the ticket office. but it says. or can be purchased. J u s t before doing that I would like to reiterate that it . This was the scheme t h a t was put forward bearing that situation in mind. 1934. Now the ticlrct office did not make the railways. The production of wealth is a physical process attained by machines with the aid of power. it does not operate the railway in any real sense of the word. yoti have a ticket office which has acquired the solc right to issue tickets. and that therefore i t would be necessary to take the situation a s it stood. What i t does mean is that you are going to lay down the conditions under which tickets shall be issued. you have the locomotive.

something which a t any rate may be considered a s wealth. as you might say. i t is used f o r the purpose of btiying goods and services which a r e provided by the general community so that the net results of the whole transaction is t h a t the Bank of England acquires a block of gold for nothing.t~. and that is gold. only i t is challenging the right t o appropriate this monetization. the price= p:lid. Such . is merely one branch of the financial system of which the banking system is another) there lie enormous quantities of wealth to which no money value has been allotted. and these proposals do not suggest taking away of the wealth itself. Now that represents simply unmonetized wealth. exactly where i t is. particularly the aspect which has t o do with the purchase of shares f o r the benefit of the general public. if indeed they do. When that draft is paid into the account of the purchaser of the gold. Bromnlee so that he may make whatever use of i t he desires. were held on the books of the bank a t figures ranging between 1 0 and 14.taterrrent shall include a sworn declaration of the market value of such assets (reads statement). I t only acquires monetary value by being linntletl over to some other institution which substitutes a piece of paper with a . I a m informed on fairly good authority that the very large quantities of w a r loans which were held by the joint stock banks in Great Britain a few years ago. a s many of you realize. which. leaving the actual ownership. and all other iinmovable property. We will take the view f o r the moment that gold is real wealth.-li:tl. b u t that is another matter. I propose to leave a copy of this with Mr.+cd by the bank. When the Bank of England buys gold it gets i t f o r nothing. the figures of the value of the various bank premises stood a t exactly the same figure when it had about 900 branches a s when i t had about three. I might say 5onlething about that too. together with furniture. t h a t has increased its branches in the past 20 years o r so from about three to something like 900 o r 1.:. Under the control of these two sets of organization. The gold which then comes into its own possession is the backing f o r this draft upon itself. The gold belongs criginallp to the people who mine it. dealings with the financial institutions exactly as they a r e a t present dealing with the general public. t h e actual physical wealth.. it gets it f o r nothing by t h e simple process of giving a cheque o r a draft upon itself f o r the market value of the gold.i<-. . but I should like to explain to you one o r two of the general principles underlying the idea of those schemes. builclings. ure will say. broadly speaking.ci and dcbctltu. and distributing it t o t h e public. aird t l l c l ~ r i c ! :-i ~ \vlricl~stock. The same thing is true practically of all financial institutions.000-1 a m not quite sure about the figure-but the number is very large anyway. apparently. Let us take the simplest form of what the orthodox economist and banker considers to be the only real wealth. and the figures of the market price. slrares ant1 clet~enturcsa r e held on the books of the bank t f o r tlrc purpose of the annual balance sheet. You have in that case the simplest instance of the monetization of wealth-the gold itself-the monetization of . consider what happens when a large financial institution such a s the Bank of England buys a n y form of real wealth. No doubt it is very difficult t o grasp the meaning of a proposal of this kind by listening to it being read.. fixtures and appliances in the bank's furniture. T h e same thing applies t o bank buildings. the banking system ant1 the insurance system (which latter. taking the gold and handing over a piece of paper which is a d r a f t upon itself. or f o r the price of a piece of paper. One of the greatest banks in France is t h e Societe Generale. When I last saw the figures of that particular bank. F o r instance. They simply provide f o r the taking away of the monetization power of that wealth. What a variation between the figures a t which those possessions a r e held f o r balance sheet purposes. I do not suppose anybody knows outside the auditors of the banks..es purclra. The general public aupplies to the people who have got that piece of paper t o the value of tlie figures a-ritten upon that piece of paper. if you like.. The same procedure shall be atlopled in regard to all real estate. from those institutions. which a t the present time is tacitly assumed to be the property of the banking system alone. were standing a t figures in the market of between 9 0 and 100. Now to make that aspect of the thing clearer.

on those securities a s long a s they hold them. and it is very interesting and I think it is quite sound.signature on it f o r the original gold. I \vould be extremely surprised if i t did. and it is generally assumed by people that there still must be a lot of money in the hands of the public. That is the only difference. the f a c t is t h a t the large financial institutions acquire all this property security f o r nothing by the simple process of writing a cheque upon themselves and taking over the security. the public shall get them f o r nothing. If they a r e debentures on work which has not yet been created you g e t a monetization o n something which has not yet been created. whereas the securities representing that wealth come quite automatically into the hands of the financial institutions. I t merely increaqes the number of shareholders and it provides that a n increasing number of shareholders shall have a recognition of their shares in the common hereditary that w e were speaking about this morning. a n d in t h a t case the Bank of England gets the gold. except because of the willingness of the gen. Well. Social Credit Bill There is a t the present time before congress in the United States a social credit bill.sonle careful consideration of the situation t o be a good first line of attack upon this monopoly of credit.ral public to supply goods and services f o r it. The original owners of the wealth lose the wealth. You will always find a perfectly gilt-edge security. secondly a definite stake in the country a n d interest in the carrying out of public works and matters of that kind. but it is a very instructive thing t o read and copies of i t can be easily obtained. first of all a certain amount of economic security. the separation of the ticket function from mere employment. without the nationalization of any business of any kind. of course. They then get four per cent. But the effect of that is to provide f o r the payment of dividends to a n increasing number of the public. Over-Subscribed Loan. That seems to me a f t e r . no matter how bad the times are. I should recommend it to the attention of all members of this legislature. I t has been reprinted in the "New English Weekly" of some recent date. I do not think that there is very much chance of a bill of that description going through a t one fell swoop. You will also notice t h a t these beginnings of the provisions of a national dividend. So t h a t what really happens is that the general public supplies goods and services against nothing but a piece of paper. you get a monetization on works which will be created in the future. Now the second half ( a m only sayiqg because of your great indulgence in giving me great latitude . That monetary value is of no value to them a t all. That is exactly what it amounts to. and the monetary value of t h a t is paid over to the actual contractors f o r the purposes of wages. as you may say. I have read t h a t bill over cursorily. o r whatever it may be. the "Central Electricity" or something of that sort. a slightly different situation in operation. I t is based on my own ideas. There you have. However. and the general public say in this case the concern which is carrying out the work gets the uJe of the money which was paid f o r the debentures. leaves the administration of the business exactly where.S. What is proposed a s the first step in regard t o these matters is that instead of the b a n h n g institutions and the other financial institutions getting those securities f o r nothing. the same thing being very largely t r u e of insurance companies. in other words. Now exactly the same process takes place when you have the issue of a large public loan such a s in Great Britain. through the very tangible method of holdinq shares.. and thirdly the provision of purchasing power outside the actual ticket pap office of the factory. and it contains various provisions f o r t h e just price and so forth. That is half of what I want t o say this afternoon.it was before. but they get the monetary value which is represented by a piece of paper. and salaries and things of that sort. The U. thus giving them almost immediately. I leave it to you to decide whether the banking institutions or the public have the greater right to get the security f o r nothing. is always over-subscribed.

of which they are undoubtedly the supreme repository (that is apparently what parliament undoubtedly is-a repository of the functions by which society is kept together) if they will turn around upon the various people who exercise certain functions in the state. a s it gets quite difficult and involved five. they would have been abandoned some time ago. and democracy is a method of electing members t h o u g h the agency of majority.in talking." I particularly rule out the revolutionary for reasons which I touched on this morning. certainly anything of such magnitude as this. The matter is very nearly capable of mathematical demonstration in this way: Supposing you take a series of questions of increasing intricacy and you then pick out men a t random in the streets of Edmonton representative of democracy. We will not do it until you say that you don't know. is. three. are the "revolutionary" and the "constitutional. Speaking of them a s majorities. We insist as representing what is quite truly and properly described as the sovereign power of the people that you shall work this system so that it delivers the goods. I believe. when it gets a little more difficult nine will get it right. "We are not going to tell you how certain things should be done. They know that they want a good dinner a t least once a day. it is not our business to tell you how certain things should be done. otherwise. notably in this case those who actually do manage the money system a t the present time. and when it gets a little more difficult eight will get it right. the things that they could do. when i t is a very simple question the ten will get it right. you are experts. Now. we wilI provide you with expert advice-there is lots of it about-and if you will not take the expert advice when it is offered to you we will put you out. Minorities in matters of this kind requiring special intelligence a r e invariably the only people who can be right. but if you don't know how. They are quite sound on the fact that they want a good dinner. broadly speaking. two and eventually one will get it right. Let Experts W o r k Out Details Now I believe if pressure is brought to bear on parliamentary representatives. For that reason I think it is a matter of great importance to grasp what are the possible functions of a parliamentary institution. Revolutionary Method Ruled Out . The more intricate the question is the more certainly it will be a minority that is right about it and the majority that is wrong about it. he is there as the representative of a mass desire. A parliamentary institution is based on what we call democracy. you assume that you a r e experts by running this money business. They do not know how to get it in many cases. and the things that they could not do. What is undoubtedly the case. four. because majorities feel. The majority in matters of detail. . they simply feel. we will provide you with expert advice when you say that you don't know. but under present conditions the constitutional method is the only method reasonably available t o get things of this kind done. If the world is driven into another great war by the existing financial system. and in t u n parliamentary representatives will turn around upon the functions of the commonwealth. and I think you know that my own desire is to assist everybody concerned in order to get this business straightened out. There is nothing in what I say which prevents any individual representative of democracy being an expert on anything a t all. they do not think. we should not see the methods of getting good dinners extant today. The two methods by which anything can be put through of a social nature. in matters of intelligence. I believe myself that parliamentary institutions have weakened their position very much by not realizing quite what are their legitimate functions. and you apply those ten questions of increasing difficulty to your selected ten men. but they are very nearly unsound as to the best method of getting i t . Now I think that is a very important matter to bear in mind as to the legitimate function of a democratically elected parliamentary body. is that as a representative of a majority he is not there as an expert. always wrong. and say to them. then anything may happen. as might quite reasonably and quite possibly be the case. Now if you do not know how to work your own system so that it will deliver the goods.

or anything that may be neces." Whether because whom the gods destroy they first send mad. and I am of course open to correction b y the legal talent here. GIBBS: How is it proposed to put the Douglas system into effect within a territorial unit that has no power to issue o r even to define legal money? To what extent would the social credit issued within such a unit differ from script. Mr. Q. That. makes the second half of what I had to say. They a r e simply pursuing a perfectly standardized scheme and nothing seems capable of deflecting .!ley do the job. Mr. You have. I t is not the slightest use as f a r as I can see going t o the financial people and saying: "This has t o be done because of the state of the world. not to put too fine a point upon it. the people running the money i. been reduced to the status of a parish council in regard to the most important matter which affects you in Alberta. really fall under the heading of what you might call politics or military strategy rather than technique." an11 they will see that you do not compose your oIvn business. J u s t so lonz a s one parliamentary body says it sliouid be tlone this way. questions of this character.^ have power to do or what power you can obtain. I n regard to Alberta.\vill not toierare a state of affairs tvh~ciiis p~. Toul. or f o r what reason.s nrl: justified i n saying. so that you can get to grips with it and g e t something done about it. Is it possible to establish a system of social credit i n ' a n y province under these conditions? If so. that. Aiberta's Position The obvious answer to it is to make the question smaller and smaller a n d smaller.lll~!: them a s a parliarnentai-y institution what they ought to do. they seem impervious to a n y argument of that kind.. You will realize from what I have been hammering a t a good part of the time I have been speaking. I t is quite a well-defined principle. gentlemen.. and i t has been pursued very skilfully. and how would the credit house avoid the necessity of havinq to redeem its credit issues in some form of money xhich it has no power to create ant1 which under present arranqemenbs i t xvould have to borrow? .ociucir!gsuch chaotic and t r a ~ i c .5 :o tell these people that the job has to be done znrl if necessary to relnovc ti:c:n or provide t!!em with advice. but I believe that parliarn~ntnr.IVe. conditiol~sin thc? world today as a r e being produced by this financial s y s t ~ ~ ..ary to Zee ti13t ... then we will be prepared to do something about it. i. please explain how? Q.A. busines. so that nothing can be done in regard to it unless you have a world conference. ROSS: Under the British Xol-th Xmerica .v the job should be done.e. "When you have composed your own difficulties and k n o ~ v ivliat you want. 1-ou hantl over the situation to the existing conlrollers of medit by :-. You have got to get a sanction in the political field t o bring to bear on this situation to get something done. because the people a r e starving in the midst of plenty.~jir. to penalize these institutions. So f a r as Alberta is concerned. That is only a part of a general policy which is being pursued with great skill on the part of the advisors of the financial system to make every question larger and larger ant1 larger. I take i t from the information that has been given me.y bodies make a great mistake in saying ho1. eventually leaving every question a world question. ant1 we all know what comes out of world conferences. I should say. When you tliscuss how it should be done you take the responsibility \vhich is not properly yours. In that x a y you place the responsibility fairly and absolutely \vhcr? it belongs. and another party Fays it niioultl be tlone another way. that these questions. They a r e simply a question of what yo.ict the provincij have no control over currency and banking. so that you have to get a bigger ant1 bigger conference before you can s e t anything done. if I may sting you into annoyance in this matter. that the first thing to do is to concentrate on the financial institutions and employ whatever powers you have got left. " That is where the focus of the trouble is. n ~ .. that all power over finance and banking a s such has been skilfully removed from the poxer of this house.

monopoly. depending on the extent to which i t is applied. Its financial results may be better a t the present time. We don't care how we make you feel it. which social credit constitutes not only a legal demand on goods and services t h a t a r e privately owned. there is no necessary relation whatever between t h e methods of administering the way in which goods a r e produced and the distribution of the products of t h a t production. "Such is the law. How can you go up to a bank manager or a bank director and sap. Could Do I t in Three Months Given the power. Singing sweet songs to these gsntlemen and putting up schemes of a n y kind is not going to do the job. I believe in existing . I made i t so. by our legislative powers. it may . Social credit from the technical point of view is simply t h e power to monetize real wealth. I think t h a t a question f o r you in this house with your knowledge of the laws of the country rather than f o r me. I do not believe t h a t t o call a committee meeting before anybody taps with a hammer is the way t o get many taps out of the hammer. but we have got you on the spot. "Look here. then the law should be changed so t h a t you can do it. if you do not do certain things. but we a r e going to make you feel it. and you can see t h a t quite clearly if you g r a s p t h e scheme that I put forward to New Zealand. The question is what power can you bring to bear in Alberta? Can you t a x them heavily? Can you place restriction on the carrying on of t h a t business? Those a r e questions not for me but for you. but I feel sure t h a t is the only method by which t h a t can be done. so t h a t you have to get same power of bringing these people to reason. if you won't listen to what we have to s a y about this sort of thing. a promise t o give in return a n equal value of goods and services? A. B u t you cannot do i t because you won't be allowed and it is your problem to find out how to get the power to p u t into operation a technically sound scheme. How is the system of production and distribution for private profit to be maintained intact and still permit t h e issue of social credit a s a free gift to potential consumers. S o you have to see what you can do to fight back and." If the law is not sufficient to permit you to put a good scheme f o r the benefit and protection of the public. I t is not personal. we a r e going t o make you feel it. We are going to impose on you these things and we will take them off x h e n you will do such and such. T h a t is very nearly a complete definition of social financial credit. I n the method of administering the production of wealth. There is no interference in t h a t scheme whatever with existing management.them from it. b u t also by implication a t a n y rate. f o r if it so happens t h a t you p u t up a scheme such a s my own or a n y other which traversed the existing financial system and i t happened to be legal-I don't think t h a t i t could be illegal because the situation has been so carefully surveyed-it would be made illegal within six months. Mr. forever outside the range of poverty. W e w a n t the power to monetize and distribute money t o be public property. a s I say. b u t we a r e going to locate you in the eyes of the public a s being the people who a r e causing this trouble. The power to monetize real wealth is now a . either I o r dozens of other people could provide you in three months with a scheme which would work perfectly and put Alberta. according t o what we a r e advised by our expert advisers. the questions a t stake a r e much too great for anything of t h a t kind. GIBBS: The second question presupposes the Douglas scheme being applied to a national soverign unit in which the difficulty referred to above need not occur. and in every possible way which is still left to us. and I do not see a n y particular sign t h a t a so-called nationalized administration is superior to private administration.management. I thing I answered t h a t question by reading to you the scheme for New Zealand. or Canada. we a r e going to put up something to bargain with. The situation was well sketched in "The Mikado" when i t is said." T h a t gentlemen seems to me to be a question very largely for you.

the purchasing power of your monetary unit goes up and therefore the purchasing power of that unit. but supposing you lon-ered the price level in Canada next week to ha!f hat i t is-we do not need to go into the methods required to do the lowering. you steal all the trade of Ontario under those conditions. so I am afraid that I cannot see the relation between t h a t question and the facts. This is a perfectly ordinary trade theory. If you have one price for a n article in Ontario and another in Alberta. if you will make it perfectly certain t h a t however the goods a r e produced. pru?er financial terms. and if you wiH put the financial side of the thing right. were to concentrate on the problem of seriously imposing penalties on the banks for the penalties t h a t they a r e imposing upon you.A. I don't think you have given the situation half the attention that i t deserves and I believe you could do it if you tried. Mr. The question would then arise as to what the effects of these higher interest rates on the dividends of the banks were. is a o r t h t r i c e as much. the result of lowering your price. b u t those a r e not questions of administration. . Mr. I a m not dogmatic about it. That is the international result of that state of affairs and it would be equally true if you had a system in operation in Alberta and not in Ontario. Would not that very greatly limit the ability of the province to enforce its nil1 on banks? . The international price of a monetary unit is governed by the internal price level. the ultimate essential. in other words. a r e fairly safe in leaving the question of administration of production. you can see the thing in this way: Supposing that today the Canadian dollar is Kued a t 6 ' 4 gold francs-I do not know what it is today. If you loaer the internal price level. I should be inclined to think that t h a t might be the direct result. I think you could achieve that. You do not require to place any restriction on inter-provincial trade. but arises out of the private control of the monetization value of real wealth. the provinces cannot place restrictions on inter-provincial trade. therefore the exchange rate behveen the Canadian dollar and the French franc drops from six to three. a n d that compensated price would result alnrays in a lower price in the area in which i t was in operation than in the area in which it F a s not in operation. There is nothing unorthodox about this. I believe. whatever the administration under which the goods a r e produced. The only result of that is you get a flood of buyers from outside the area where it is in operation into the area where it is in operation. yes. but simply imagine it lowered by half. Q. I don't quite see the relationship of those two parts of tilac question. I think that if your first-class brains-I a m saying this very f a r from anyyour first-class brains such a s you have in Western thing but ssriously-if Canada.eliminate what n-e call g r a f t . you. it may eliminate excessive profits and matters of that kind. they a r e questions of finance. Could your just price system work under these conditions? Please explain. Therefore. that is to say. I believe. where i t ii. legal and otherwise.imerica Act. ac any rate for the moment. LOVE: The privy council has decided the province cannot by legislation prevent a corporation having a Dominion charter from carrying on business in the province by any indirect exercise of its legislative powers. in other words. of a sound finance system is a conpensated price. If you look a t i t in the larger field of international trade. TVell. ROSS: Under rhe British North . the Canadian dollar. also goes up. in terms of exterhal monetary units. so that your exchange goes above par. the product \\-ill reach the public on proper t e r n s . but all I a m absolutely dogmatic about is tha: the present difficulty does not arise out of the so-called private adminiscration of the productive system. T h a t is exactly what is bound to happen. In other w o r k . and whether i t would be possible to tau such dividends so that you could get those higher interest rates back again. which is the unit through which Canadian produce is bought. Q. -4. Mow it is quite obvious that six gold francs will buy txvice as much in Canada nest week as they will this week.

?or a thousand years. cycles of bank loans are continually being created and cancelled? A. to be paid? 4 . not the wheat. Q. not of one individual. the right to express our opinions upon any subject whatever. presumably costs have been incurred and there are assets against the monetization which would take place along the lines I am suggesting. that is what I firmly believe that the Anglo-Saxon has been fighting for for a thousand years. Well. including mortgages. money which has been advanced on mortgage has generally been spent and has gone out into the general community. . is simply the monetization of a piece of real property. Mr. Q. PAYNE: How a r e private debts. There is one point of course that is very important about that. but of all individuals. of course. that the objective of all our social institutions is to further the interests of the individuals.<unlable goods which a r e for sale n1us. The answer is that the purchasi~ig power in the hands of the community should he equal to the prices of the consumable goods wilicl~a r e for sale. Now from the socinl credit point of view we say that no insdtution has any value whatever insofar as i t does not further the interest of the individual. Q." I s h a t a r e those tiiings'l :\. BOWLEN: Is it true that flea.t contain a corisiderable pronortion of capital charges.:ithout preventing our neighbor from also attaining the same result. that i t is the individual who is important. The things that we have fought for for a thousand years. which a r e being pursued for reasons wit11 which we could not agree and over which ure have no control. not the institution. I shouid say are. not the flour.e money has come from the financial institutions and obviously he should not be made to lose. Where the money has been provided by a private individual originally. that is all. JAMIESON: JIajor Douglas." Now I will take my courage in both hands and pursue that subject just a little further. The Italian Fascist code begins with the statement that the individual is nothing. i t is the field that is important.Q. but the mortgagee should be repaid the money n-hich he has advanced on mortgage from the general credit. but it is uncloubtedly summed up in the word "liberty. Col. and t h a t is. and while i t may not have been formulated in that form. That is a very cursory view of the situation. Mr. that the state is e v e w h i n g . Do you beiieve that the amount of purchasing power in t h e hands of the peop!e of a community should always equal the value of all the property in the cornmunicy? A. you said this iorenoon. society exists to further the interests of the individual. a mortgage. broaclly speaking. You hare a t the present time exactly the reverse philosophy being preached all over the world. the right to see that we h a w control of such matters a s education in its broadest form. The answer to that of course is quite short: yes. "LC'ithout surrendering the t h ~ n g sx e have fought for. the right to see that we are not plunged into adventures. and say t h a t the whole of what I have just been saying can be summed up in the fact or the desirability of the individual being free from undue control by the group. so t h a t the general community has a contra asset. The con. which is simply the monetization of the mortgage. and the right to see that w e are not hindered in the attainment of legitimate desires which can be attained ~. The individual does not exist to further the interests of society. or anything of that sort. and therefore the purchasing power in the hands of ths conununity has to sustain a considerable proportion of the capital ci~arges. national or otherwise.which have to be levied in respect to capital ~ h i c h has depreciated and on whici~interest payments are made. th. That is simply the same thing a s saying that it does not matter what you grow in a fieid.

Every country is urged to have a favourable balance of trade. At present you have t o have exports from a country. As to a n y political aspect of it. Well. but because as a rule you take every possible means of seeing that you don't get imports by putting a n import tariff on. that is what you get. That does not mean that you will not produce a surplus of things you do not physically want. Well. bits of banking paper. and those a r e the people who are operating these huge. be dealt with fairly shortly. I did not mean anything beyond what I said. The plants are all right. but when nearly every country is industrialized then i t is quite impossible f o r everybody t o export more than they import. they have simply a population which one generation ago were completely illiterate peasants. t o get the balanced flow out of those plants that is necessary. Thab is why international trade. that exist a t any rate in Europe. You have in Russia a state of affairs where f o r the last 15 years or so a large number of experts from the United States and elsewhere have been putting up the very best plants of various kinds. Now if there Rere only two o r three manufacturing countries in the world that is a workable proposition. RONNINC: Did Major Douglas this morning intend to convey the irnpression that Russia's inability to solve her problems of production thus f a r is due to public ownership and control of the means of production and distribution? -4. It is purchasing power that he wants. Speaking a3 an engineer I can explain the situation in this way.Q. That would be the case in . i t makes too great a hole in the production f o r the year and that appears t o be the actual situation in Russia. Q. I have done it myself. the question of international trade can. a population which has used skilled machinery and so forth. and that situation has undoubtedly been very considerably complicated by the fact that practically the only way in which Russia could be industrialized in the time in which she had t o do it was through a centralized government system of administration. added together. I said that Russia was the only lzrgc westernized area which had a production problem. If i t had been possible f o r individual enterprise to put up a lot of small plants which. That means it has got to export more goods than it imports. but that appears t o be the effect. not because you want the imports. Mr. That is summed up in the orthotlox theory that you must have what is called a favourable balance of trade. You don't g e t imports in return f o r those goods because you take care you do not by having a tariff to prevent them coming in. If the goods anci services produced in Canada a r e to be sold on the world's markels in competition with goods produced in other countries. I t is quite a different matter when you come t o operate those plants. But if you have got one of those big plants out of operation. You can provide the necessary purchasing power t o buy your own productions. how will state-regulated prices and wages affect the sale of Canadian goods against goods produced in countries without control of prices or wages? External Trade A. I have no views a t all. not goods. You export your surplus goods for bits of paper. delicate. I think. What he wants is t o give his gootls a w a y f o r nothing and get a bit of paper in exchange. You have t o export a large proportion of your goods in order that you may import little bits of paper i n order to buy the remaining goods in your country. but the operation of them is something else again. X sufficiently large force of engineers can utilize unskilled labour quite successfully in putting up very large plants. probably. There is no difficulty about that. The last thing that the manufacturer under present conditions wants is to get a fair exchange f o r his goods. interlocked plants and they a r e not operating them very successfully. I n Russia they have not got that population. would have had the same total output a s these large plants (which is very largely the question in Canada or Great Britain) even if two o r three of them were out of operation some of them would have been working. is breaking down. so-called. In some of the very large plants in the States and i n Germany they have two or three generations of skilled workmen.

MOYER: I n order to eliminate all questions of law. I t simply enables you to distribute the goods which are or can be produced. you can make any price for anything you like. and the elimination of waste and so forth. But it is quite obvious that the question is based on the idea that we have to have a very efficient economic system because there is only just enough to go around and if any of it is wasted. If they were distributed there would not be so much waste. your own credit. you cannot do anything. FARQUHARSON: If wealth is owned by certain people and those same people own the tickets to wealth. Q. The waste in the system of distribution is very largely due to the f a d that the goods are not distributed. real consumable w e a l ~ h a flow. let us assume the following question correctly states our legal position and that we cannot alter it: Can any provincial o r municipal body which cannot regulate or punish or prohibit the operation of a bank. not quite. but if you have no powers. then you could dispose of the whole of your surplus of wheat. and the people who own or create the tickets in respect to that flow of wealth do not own it. but all this insistence on the necessity for economy and thrift. Mr. if you have control of. only does certain things. is the idea of an age which ought to be past. What they do is to let out those tickets upon terms to the general public. what gives us the right t o issue further tickets or a duplication of tickets? A. any price which would enable you to get the market. and to get a definite application of your idea. You either hare to sell it in the world's markets a t a price which will cover the cost of production. and a t the same time see that your producers of wheat did not make a monetary loss. it is not a static thing a t all. of course. If you utilize. Q. perhaps. but the wealth is not owned by the people who create the tickets. Well that reminds me of the perfect gadget which would lay the fire and cook the breakfast and wait on the table. The only poss~blereply to a policy of that kind would be for the opposing countries who combat social credit to adopt that plan. is control or the power of sanction necessary to the operation of your plan? A. The goods and services which is we use from clay to day have to be consumed pretty nearly as fast as they are produced. or go into the hands of the banks. If you were able to make i t possible to sell your surplus in the world's markets a t any price suitable. I am not of course saying that waste can possibly be anything but undesirable. The wealth is coming into existence every moment. somebody will have to go without. Q. Now that is very f a r from being the case. without the producer of that particular thing making a monetary loss. Well. or very nearly. and in that way you can control your own export market. There is no difficulty . o r else your producers. I an1 not cluite sure that I thoroughly understand that question. Mr. then of course you cannot do anything. Cdrlacla at the prcsent time. My plan. I am not pursuing the question because I am not. The terms usually effect the creation of fresh wealth of various kinds commonly called capital wealth. carry out your system? I n other words. so called. be completely conversant with what powers you have.You obviously produce a great deal more wheat that you can possibly use a t the present time. eventually become bankrupt. If wealth is owned by certain people and those same people own the tickets to wealththey don't. but they come into existence in the hands of the financial system. I t can be done. and are being done by Japan a t the present time. lose money. and not in the hands of the public. I think the answer to that is obvious without asking it: If you have no power to do anything. I t is just as reasonable to talk about wasting sunshine during the 12 hours in which the sun is shining as it is to talk that way. as the phrase goes. and these two things are perfectly possible. Does your plan undertake to eliminate waste in the system of distribution? A. that is the whole point. that is where most of the waste comes in. and the tickets which will obtain that wealth also' come into existence as you might say every moment. The wealth is a flow. and cannot in the nature of things.

in another corresponds to what \ye term t h e national dii. I t is not :he slightest use trying to design a steam engine if you do not knoxv something a b o u t thermodiac dynamics.:hich i.o~c. t the sanic rclation thermodiac dynamics do t o t h c design of a stcan1 c:r~sin. if you had a financial system which reflected the facts: a n d you must have therefore.r n o t being cmployecl. control of trade and commerce ant1 which . One is a c o n ~ p e n s a t c ~ l the maill theoretical l ~ a s i s a n d the other is something ~ v h i c i ~ some fort11 o r . 011the other hand. most ~ n r ~ u e s t i o n a b lis a t r u e lowering of the price of the production of y a n y article. together with a compensated price to meet t h e o t h e r diffculty which w e have been esamining. a reflection of t h e facts. xvit!~oltt p u t t i n g every producer o u t of business. rules a n d regulations as. of thermotliac tlynamics find o u t anything a b o u t what a steam engine looklike. Your trouble there is t h a t he I.i.shall be dealt with a s well a s the question of tlie issuing of purchasing poxver. you have to have some method of dealinr with the f a c t t h a t t h e n u m h e r of units of man-hours p e r unit of production is f a l l i n r : the ratio is falling. Thosr t\\81 things are not schemes a t a l l . SIy books on the subject have been very largely tl~:\. You coultl not have a state of a f a i r s in which a country ivas said to be poor whilc all kinds of valuable goods were rottinx ant1 n o t being purchasrli a n d la11ol. what t h e existing financial system conspicuously fails to do. T h a t has nothing t o do with economics. so t h a t what yo11 want is a n extension of t h e dividend system t o meet that.0111pensated price provides f o r a continuous lowering of price.: m a k i n s a financial loss. T h a t means that you a r e going to employ less anrl IPS. b u t it is in no case necessary t h a t those P Y L L C L o :ch?nles should be followetl to the letter. Tiley bear a i l o ~ . i.in g2tting enough goods f o r everybody a n d it is n o t necessary to be too particular a b o u t little m a t t e r s of waste. a s the existing financial situ:ition works. is constantly falling a n u (the first requisite of a n y financial system is t h a t i t shall reflect the facts. cluite indisputably is cjlrtainly the question of pric. You c a t ~ n o tilnt*.. a n d one of the facts.. Theri: a r e not. we call it. I f you a r e goinc to use your industrial system a s a governmental system f o r t h e purpose of keeping people i n order. they a r e simply principles. MacLACHLAN: I s i t possible to obtain nlasitnum benefits of social credit without applying t h e complete technique. \ ~ tit~ ~ i look5 l ~ k e r coultl loolc like. b u t so f a r a s t h e economic production of goods is concerned you w a n t less and less of y o u r available population. Now the actual physical cost. I beliece those two things a r e probably essential. I do regard a s being probably 5ati-price. factor:: schemes two main principles.i~lcntls. but you could not frorii the iair. t h e cost i n energy on proctuction. You could not h a r e the paraclox so calloil of poverty amidst plenty... l~tiai down by you in your various written works on the subject? A. of course. Mr. T h a t ii. a n d I think it has t o be c o n ~ p e n s a t c dprice :I. a s to x . which is n o t its objective.ti to the explanation of certain principles. The first is t h a t thv c. 4. Q. So that I think t h e compensated price is required. -111 I have put forward in m y book is certain principles accompani?rl i n one o r t:vo instances by irhat you might call exemplary schemca to g i i e ~ O I I some sort of picture of the principles of how the thing worked. a n d i n particular has no jurisdiction over banking a n d currency. You h a r e to deal with t h a t by means of t h e compensated price. IVhat I do believe to be. a n y such rules a n d regulations laid tloi\-n in I I I ~l ~ c i u k ~ on the subject. f o r two reasons amongst several others. if you a r e n o i n r t o uzo i t f o r keeping people in order a n d keeping then1 busy t h a t is something el=? again. b u t the exact metho(is of applying t h e m can be varied t o almost a n y extent. a s f a r a s I can see. I think. of your available population on necessary protluction. T h a t is a fact. C a n a province which lacks fiscal autonomy. In order to meet t h a t you m u s t have distribution of purchasinz power which is n o t through the agency of wages a n d we k n o a exactly h o ~ r t h a t can be done a n d t h a t is through the agency of dividends. a continuous fall of pricc.

of course. "We must refer this thing to Lontlon. And in these financial questions. There is practically no room for discussion that the next war will~almost inevitably destroy what we know a.c:~ent you fro111 doing what you want. fnanc" trarle and conlmerce rests cntircly wit11 the Dominion govemnment. . There is no doubt whatever that the perfectly easily understood economic urge towards war comes primarily from the working of the financial system a t the present time because of this necessity f o r finding overseas markets in order to provide purchasing power from those overseas markets. but we must do this in conjunction with he Wall Street. IVe must do it through London. i t 2 5 . Since under the Canadian constitution contl-ol over banking. sirable that advoc:itcs r. the definite strategy of the existing financial powers is t o mnkc this a world so that no section of the world will ever be powerful enough to have it altered. There is very little doubt that the next war is only two or three years ahead unless something drastic is done t o prevent it. If you a r e willing to allow over-riding legislation to 11l. If it is v:e are going t o have the Act altered. what can you (lo to change that financial system. are you going to say. : it not ~ l c . the raising of the suicide curve. the "C3" population that we are protlucing in the slums and in the other unsatisfactory portions of the world a r e due directly to the financial system and if you look a t those sort of things really. but we a r e going to h a r e this thing done. be successful in t l ~ c FI~~ (2." and they \voultl say. \Yell. that if you have no po~vorsyoi. All the present poverty. An entirely unbiased report which is just issued has said that i t is.( of those questions I gave a short time ago. absolutely no point a t all.~. no.:. Crime D u e to Financial System There is no question that a t the present time practically 90 per cent of the crime in the \ ~ o r l dis directly due to the financial system.:. the snswer to tile ! I . "Ah. "We don't care whether this is in the British North ." Look a t the q u ~ s t i o n from a realistic point of view. certainly nothing in any schetne can possibly stop that situation. ni. 3 s i .America Act." There is absolutely no point a t which you are going to atop if you a r e going to surrender your liberty.?i. yes.octal credit centre their main etyurts upon the field? Dominion ratliel. ~ O L V hope to . all these questions a r e questions obviously of the same kind and have the name bearing and I do not think that I can add very much to ~vliatI said before. and I believe that if :on tackle it in that spirit you can do it. but we must do that in conjurlclion with the Bank of International Settlement. but you certainly are not likely to do i t by referring it to Ottawa. "We must refer this thing to Ottawa. all the present mental distress in business ant1 the suicides. .vincial . It is wholly a question as to whether in the last resort you say.-i~t:iilic anti I I V L I. The only question is. . or matters of that kind. -411 I can say in regard t o all these questions a b o ~ r -4lherta is that if you want to get anything done the best way to get it t tlone is to hegin a t home and find out how you can do it. \\-oultt not higher taxation result in unreasonable interest rates being i~nposetlin Alberta by the banking system? -1. we must not change the British North America Act. that is about what it amounts to." \vould be in effect.. ant1 if you have a written law which prevents you c h a n g i n ~ and you a r e going to be strictly law-abiding-that it is the logical consequence of saying you a r e going to do i t constitutionally- . b u t I feel fairly certain that Lhc logical result of saying. .f . And n-hen you get to J.I.: l . IVell. if not in words. cannot do anything. L'Oh. yes. LOVE: If our power to deal with banking provincially is limited to taxation.. Mr." We a r e so intorlocked wit11 the international finance system that we cannot do anything in Ottawa. than t i ? . application of your proposals:' : .ondon you wo~il(i toitl. "Ah.'' If you will not look a t the thing from that point of viem you xill ?imply find yourselves involved in the logical consequences of the fillancia1 n s t e m as it exists a t the present time. civilization. Q.

but the main point is whichever system of administration is t h e best is quite beside the present discussion. I a m simply giving you a talk on industrial administration. If you will give the necessary purchasing power t o the general population they will g e t goods. What i t does leave t o you a s a matter of fact is the power of getting out if you a r e lucky. whether you get the authority o r not. I do not believe even excepting the financier. ' Personally. which of those systems produce the best results. but I am perfectly certain there is no difRculty whatever in distributing socially privately-produced production. There is a great deal of straining over words in these matters. through the private administration of a large plant. The only question which arises in regard t o administration of production is which produces the best results? Whether production is privately produced. I t is more flexible. Q. without the law stepping in and saying how you shall produce it. I say this without any bias. the man who thinks that he owns it. and my considered opinion is that so-called private administration-I emphasize t h e word "so-called"-has it over government administration every time. I should hate that he should hear it. I have been employed by some of t h e largest companies in the world and I have also been 'in several government departments in Great Britain. The down-and-out is the man who suffers the physical penalties of the system. and there a r e many other things of t h a t kind. That is usually the terrible trouble in government departments. I am not by any means a serious sufferer personally. This is a problem which affects every business man just as much a s i t affects erery down-and-out. Mr. You cannot produce in any quantity any article. by selling your plant t o someone else who then becomes in f a c t another government functionary because he is governed by government restrictions just as you were. and very often the mental penalties a r e more severe than the physical penalties and he commits suicide. I think. I t is a much better system to let people work up. so that I know what I am talking about.in his particular piece of administration. i t is less liable t o lost motion. what restrictions you shall be under. I a m afraid I have not read Mr.then you have nothing else to do except to change those laws and I do not believe it is possible without a n absolutely united drive from all sections of the population. than to appoint that man by a n examination. so I tell you now in 1934 that before 1940 if you have not changed this financial system it will change and probably eliminate you. whether i t . and i t is a notorious difficulty. But the whole population. I have no doubt that the private system does seiect the best man for the job. but i t is a fact that there is no such thing as private production a t the present time. are under the awful curse of this mis-working and perverted financial system. assuming that in either case the product is distributed? Now which man takes the most interest . The only question is which system will be the best administrator f o r the job. There is less distance between the man who has t h e power and the man who has the knowledge. or as you might say nationally produced. or the man who is simply a functionary? As a matter of fact. Fred Henderson in one of his books show very definitely that the Douglas system involves social 01s-nership? A. You m n n o t g e t authority to do anything of importance until many months a f t e r i t has ceased t o be of importance. I have been on both sides of the fence. MacLEOD: Will not Major Douglas explain a little more clearly how we can administer wealth which is privately owned? Does not Mr. You will get a much better result by letting him work up than by putting him through a stiff examination on the theory of administration or something of that sort. how you shall use your plant. the business man the mental penalties. Henderson's book. what hours you shall work your men and so on. I am simply looking a t the matter from the point of view of a n engineer and just as I told them in Ottawa in 1923 exactly what was going to happen in 1928. Affects Whole Population This is not a problem of the down-and-out.

MacLACHLAN: Is the soundness or otherwise of your propoaals predicatetl upon the validity of the "A plus B" theory? -4. . he is only interested in getting his dividend. I notice that the banking system has concentrated on the "A plus B" theory because i t is a difficulb theory to make people understand. Now in this case that gives him the purchasing power required to get the goods from private protiuction but does n o t interfere with the administration. if they a r e not very familiar with the absolute processes of industry.. The so-called "A plus B" theory is a quite incontrovertkble description of the mechanism by which prices hecome too high f o r the general public t o buy. The soundness o r othenvise of m y proposals is predicated most tiefinitely o n the question of a monetized wealth. and m y proposals a r e predicated on the assumption that t h a t power does n o t properly reside where i t does a t the present time. You will notice in the scheme for New Zealand I confined my distribution of sharp. UI. (2. Either of then1 will deliver the goods on the presentation of the proper tickets ant1 you can distribute the purchasing power a n y way. ~v11t:ther is i l o m a g o v r r n ~ n e n t a it .sturc. and it is there t h a t the core of the whole trouble lies. it is no business of his how the business is r u n . to debentures and preference shares. I t is a well known convention in rcpartl to both those shares that so long a s the shareholder gets his tlividentl.i i i r u ~ n so-call~xiprivate shop o r stor<. and in my opinion that is a desirable state of affairs. by giving the general population shares in so-called private protluction h u t without interfering with the administration of that business a t all. by private production. Mr. but i t has nothing whatever to do with the fact that the actual creation of purchasing power is a monopoly of the banks.. which is a fixed dividend.

MacLACHLAN: Is there in existence any Douglas plan for Alberta drawn up with your authority o r approval? A. "The Douglas System of Economics". A. MAJOR DOUGLAS (RECALLED) CHAIRMAN: I have taken the liberty of returning to the members all of the questions that they handed in the other day that were not asked. Q. Q.parts. Chairman: Mr. Have you seen this pamphlet. GIBBS: I have three questions linked together and I would like to put one after another. 1934. Q. Yes. and we put i t in effect here. Mr. Q. you have probably had i t drawn to your attention. Hon. cannot possibly affect real wealth. Mr. Q. It is a ticketing transaction in earnings and no ticketing transaction can in itself affect real wealth. The answer to that is no. I. Did they accept this as a correct interpretation of the Douglas system? A. goods and services can circulate. Claypool. will be subject to public policies of general welfare . Do you know what its official opinion was? A. with a modification to the financial system. Q. I believe i t has. Q. I t was examined while I was abroad. Do you know whether the h n d o n secretariat has considered that pamphlet? . not a static performancewhere you have that flow damned up by the inability of the general public t o take off the wealth from the producing organizations. assuming that. I do not know the details. from my own knowledge. they did not. I was not present in England when it was examineJ. and if so when would that be done. alone. Q. then it is possible to a certain extent. a social credit scheme was applicable to Alberta. I am not familiar with its contents. I may say a t the beginning I heard the broadcast a f Major Douglas and read his speeches i n the paper. Q. You a r e not so much concerned in advocating any rigid plan as in urging us t o recapture complete constitutional and legal control over all the institutions that'sell currency or credit so that the issue of the tickets by means of which. would find i t quite impossible to answer that question. where you have the flow of wealth-and the production of wealth in the modern world is essentially a flow. and if it woultl not do that what would be a benefit to us? A. I do. The actual manipulation of the financial system i n itself. Do you regard i t a s a n interpretation of the DougIas scheme? A. But if you have a state of affairs which I believe to exist both in Alberta and elsewhere. that it can after a very limited period increase the actual rate of flow of wealth. would it increase the total amount of wealth we have annually to distribute among the people of Alberta. simply confining the thing to that manipulation. Are you the chairman of that body? A. I have seen it. They a r e rather in the form of a statement than questions. Yes. I have the general result of the examination. Q. and it is because I have read these somewhat carefully that I a m putting these questions. BAKER: I would like t o ask Major Douglas. Mr. No.if I might. of course. and are you familiar with its contents? A. They have refused to accept it as a n interpretation of your scheme? A.APRIL 10. Yes. I think the answer t o that' falls into two .

not questions of principle. can decided off its own bat. Q. Of course. which is in niy opinion quite incorrectly exercised by finance. The second question is this: You believe that any plan of financial reform must be based on (1) the right of all citizens of 21 years anit over to receive dividends fram the productivity of our industrial plant as a n inherent right. We ought to realize the position and choose to make that effort. If i t is not desirable that should be the case then all the efforts which we make t o diversify and increase production are misdirected effort. which is what in effect the financial system is. Q. you will realize you are reading something out of me which quite obviously I do not want to be bound by on short notice. and that is by controlling the use which is made of land. Then the question comes up of how are you tt going to prevent a n absolutely uninterrupted s a e of all sorts of production. but I see nothing fundamental t o object t o in what you say. will i t not be necessary for the producers of consumable goods to adhere t o a scientifically prepared annual plan-a production budget rather than a consumption budget as we have now? Control of Production . Once again f o r the purpose of clarifying what you say with which I am in general agreement. I should agree with that statement. It is a question of sovereign policy as to whether they have or have not. One of the ways is indicated in the model plan for Scotland. which is what might quite reasonably be expected to happen. subject to reading it carefully. The third question is this: In a system based upon having a $1. I think you cah go about that in several ways. I recognize a t once the extreme importance of that question. Q. Q. that of controlling production. I t is quite obviously not a question t o be decided by some secondary interest.00 ticket in the hands of a consumer for every dollar's worth of consumable goods. The question of age or the question of right a s far a s nationality is concerned are details t o be worked out.rather than to considerations of private profit. You see the difference? I t is quite certainly not something which some purely technical system. The question of whether the age is placed a t 2 1 or something of that kind-all these things are questions of expediency. but I have no very strong objection t o anything you say. You and I think the same to a tremendous extent and I think that is very encouraging to myself a t any rate. The fundamental principle is the people have an inherent and inherited right to participate in all dividends resulting from productivity? A. The first object obviously is to make the financial system reflect the facts of the production system. I could elaborate that a t some length. quite obviously ceases t o be effective. control being ascertained from almost every possible point of view. A. ( 2 ) the necessity of distributing the tickets of purchasing power in such quantities a s will correspond t o the price volume of consumable goods available and in such n way that they will actually be used in the purchase and consumption of these goods? A. That is the first statement ancl I would like it if Major Douglas would say yes or no to that? A. In other words. i t is desirable on the part of public policy in view of the age of plenty in which we live that there should be a distribution of national (lividends t o people a s an inherited right? A. the indirect . It is practicalIy impossible to produce anything without the use of . You have to have a direct control of production instead of indirect control a s you have a t present. Broadly speaking. When you do 'that the present function. 4 s f a r as the principle is concerned you believe these two principles are fundamental. I am not entirely in agreement with these statements as I am putting them down.

what you might call a scheme for discussion that has been put forward in regard to Scotland. but even assuming that is the case. At the present time the redemption of title is the application of a rubber stamp. We could put all our able-bodied men to work between the ages of 25 and 55. there is a clause which says that while no hinderance is placed on the arrangements for the transfer of land. plus payment of the tax. Should not this be our objective rather than the payment of national dividends? Should we not pay good wages. Mr. If your compensated price can handle that difficulty. because in that way certainly if you do not do it by slow and well thougkt out steps you tend immediately to a great deal of over-centralization. etc. would invariably produce a very rapid and probably devastating rise in prices in regard to goods. You will notice in the model scheme. YOUwould still have a fundamental difficulty to face with the large amount of purchasing power which would be released Releasing the nonmarketable goods. We would adopt. and i t might not be so suitable for a province like Alberta. every transfer of land has to be ratified through the land office. The compensated price. even if you use it for a factory site you want some land. There is no reason why that should not be the case. but I do not think what is very frequently called "packing" is the right way to do it. and I believe that can be done. but you have the principle. and also preserve the amenities of the country which is desirable a t the present time. pensions. but you can control the volume of production quite effectively by controlling the land. exists already.. A ~ l a n might be suitable for highly industrialized countries like Great Britain. In my opinion that is more likely to be a auitable method of controlling production than by issuing direct orders to producing organizations to produce just so much. which in Great Britain. good houses. Generally speaking then. modem conveniences on the fann. good superannuation. the goods a t any rate not bought specific&lly over the counter. You cannot g o straight ahead on a scheme of that sort under present conditions even if you had to do that sort of thing without interest. which we do a t the present time by public works. as no doubt here in Canada. but what happens when you give national dividends? A. Q. rather than national dividends? A. etc. undeveloped country. ENZENAUER: Can your social credit issued in the amount of tickets to equal the volume of goods a t a price be maintained a t that ratio while continuing to honour the priority claim on production held by capital aeditora ? 108 . Q. I think we can handle the difficulty in the same way. we suffer from no lack of worli to be done. Just the same thing. While we have a very efficient industrial plant. In spite of technocracy. your idea of the just price? . cutting off interest-free loans. complete educational facilities. One of the inherent difficulties of administrative control of large quantity is to prevent over-centralization. answering your question. This is my last question: This is a new. Q. some sort of direct control of production would probably be the result of means of this kind. bridges. I imagine. we are short of such things as paved roads. If on investigation it was found you wanted to apply the social credit of Alberta t o the development of the province of Alberta (and I might interlop+I think you want to leave a little to posterity). A. you still want to take very definite measures in regard to the price question. All this purchasing power we could put into circulation as a result of nonmarketable goods will not be very much in any year. and you would land yourself in a technical difficulty very rapidly if you plowed straight ahead on these lines. I should never think of traversing that statement. Q. there is no question but under the existing state of affairs you would b e running up a tremendous debt.land. Q.

MacLEOD: I n placing this matter before us the other day. the owner of the cattle distributed the payment. Q. and when they have purchased them with borrowed money they have either to dispose of these goods or the money they have borrowed forms a mortgage on their residua! assets and they go out of business. the man who is generally referred to a s the capitalist. broadly speaking. That is part of the proposition. that money is nothing but a ticket system. not they themselves. The question seems t o arise from the suggestion there is nothing tangible behind money. in the development of money power. if he is paid. Q. There a r e a great many things taken to be axiomatic that are not axiomatic. I t seems to me there could be no real authority in administration unless the control amounts to ownership. is only so overwhelming because of the failure to monetize a great deal of real wealth which exists. which is a quantitative not qualitative question. I n my conception of the modern production system the so-called capitalist. A. a t the present time these tickets are issued under the . and if cities who have nothing else but a limited taxing power should proceed to issue tickets I think very s o w his tickets would be called into serious question.' they simply produce them. There is no doubt he is always paid by the financial token. but the question is fundamental. We can easily deal with a n unreasonable rake-off. and who in the aggregate also have the purchasing power t o buy these goods. The banks of today. which is a quite separate process from the production of goods. If you had in a proper and scientific manner monetized the real wealth. will part with them when presented with tickets issued by the state? Producers Do Not O w n Their Product -. I wish I could understand~whatis involved in this administrator feature Najor Douglas so often speaks of. The question of the so-called owning of the means of production is of course the cause of a great deal of misunderstanding. that he would be delighted to part with goods for purchasing power created by anybody. i n answering this question. the potential wealth which exists a t the present time. He is paid in various forms for his services a s administrator. He is not in business t o keep goods but to exchange goods for purchasing power tokens to enable him t o keep on producing more goo&. is a n administrator and nothing else. While it is becoming increasingly momentous. What reason is there t o expect that the individuals who a t present own and control the goods that a r e for sale in Canada and the means by which they a r e produced. so there is no question a t all. Quite clearly the' sound and proper answer t o that question has t o be based on real figures. but when he is paid i t would generally be out of reserves of the so-called ordinary capital. but my general feeling is the question of debts. Major Douglas explained. and I think I was able to follow him fairly well. produce these goods with borrowed money. and then he explained wherein in the beginning of things. sometimes paid too much and sometimes undoubtedly paid much too little. the administrator of the production plant.is a t the present time. and the correct answer would have to be based on figures. Anyone who wishes tickets must have tickets. so I a m afraid the question is based on a misapprehension of what is the ease. They in most cases.A. but he is simply the administrator paid in some particular form. and to enable him to get a legitimate or a n unreasonable rake-off. I n t h e first place. Mr. During the last 10 or 12 years he generally has not been paid. They do not own these goods a t all. but the general answer is he would undoubtedly accept these terms. The only question is. There is just as much behind i t a s a t the present time. I do not agree that these people who own and control the goods have the purchasing power to buy these goods. and the insurance companies of today. even the debt question would be reduced to much greater proportions than it . are getting away with the use of social credit that does not belong to them. -4.

the real wealth of the unit so it can be freely exchanged. It has been estimated in this province the coal resources could supply the whole Dominion of Canada for the next two thousand years. I think I can do that very shortly. That is what i t does rest on. only h a value if there is something real on which this credit rests. I agree. even export coal into the United States where they also have more coal than they use. but from the standpoint of the function of productive wealth we would have to limit our estimate to that portion of coal we could sell in the markets of this province and outside markets from year to year? A. but in doing that you would increase the width of the generai field for the use of coal. That is. BROWNLEE: I think you suggested last night that a series of questions might be asked. . Q. They produce for saie and the moment they are unable to sell as we know quite well. we might. and I -rill take the liberty of asking a number of qrlestions to see whether I have fully understood you in your comments on Friday.newhip of effective demand. They do not produce for t h e ~ rown ownership. The next question is. which is complete proof that they do not own that production. can you sum up your definition of soda1 credit in one or two sentences for us so as clearly to indicate just what you mean by social credit? 8. Q. Q. You use the word "owned"? -4. Social credit in its essence is a correct estimate of the productive capacity of a given unit based upon that which is the real social credit of the unit. Q. Entirely. they go out of business. to any extent desirable. and therefore the effective demand. Absolutely. There seems to be no possibility of misunderstarding that. In the first place I understand. that your whole plan of social credit is based on your belief that constitutional methods are always to be preferred to revolutionary methods? -4.assumption that this demand is rested in. Therefore. Either internal or by proper arrangements externally. so far from being the exclusive right of some specialized organization. where we have a very definite constitution laid clown. but by proper use of your own credit in the world where proper use is not made of certain credit. and is owned by." that would not man the ultimate capacity to produce our natural resources but it must have some relation to available markets and the ability to sell the products on the markets avail~ble? A. You have somethimg which we call financial credit which can also be made to be the reflection of this real social credit. you could without difficulty command the markets of the world. It is not owned beceuse they pl. Major Douglas. and that I should say can be defined a s the power of monetizing. in a country Like Canada. Yes. but that would in t u r n only lead t o one thing. Q. we should follow the course of trying to change that constitution rather than embark upon any extreme measures of defying the constitution? -4. Q. Mr. Now that is quite obviously an assumption which. It does rest on the productive capacity of the unit. quite obviously belongs to that unit which has productive capacity. The production of a large producing undertaking is not owned by these individuals unless they buy it. the organization which issues the tickets. The protluct~onis not owned by the unit. Yes. to the actual oxners of the monopoly. they would quickly adopt measures which would still put them in competition with our coal? A. Q. The only thing involved is the question of on.otluce it. Referring to the term "productive wealth. by proper use of our own credit in Canada.

particularly the New Zealand scheme. money is taken and destroyed when the article to which it refers has bten delivered. The statement true. If that token is issued under the authority of the state. I t is presumed what he does is f to rush o f to the stores and spend it. So any scheme that starts out with the arbitrary idea that the state might issue the tickets to the extent of $26 or $50 or $100 a month to the individual is erroneclns because i t is not based upon any scientific measurement of our natural productive capacity and our available markets? A. From the standpoint of the state. supposing we did tomorrow issue tickets to the extent of so much per capita in this province. That. That is what happens a t the present time. then the state must have the wherewithal to. wheat o r coal? I n the last analysis. is based on the idea that whether we turn to the state. Q. if they refill through any source would they increase the stream of purchasing power going t o them. Q. I think. Supposing for the sake of argument. . They are issued just as money is a t present. it is limited by the consumptive power. The different schemea you have suggested. have all adopted the sociaTization of a e d i t that there comes a distinct limit to which any country can go? You then. In your suggestion of the use of tickets. Under the existing credit system? Thus when i t comes back. Q. we a r e still in the position that our productive wealth is measured by consumptive demand? In t h e last analysis y o w success in commanding markets is mainly putting to use your own credit. Q. that is right. Q. We are now told under the money system.A. It does automatically under the existing credit system. A. Suppose we take a unit such as Alberta.Q. Q. the supreme authority controls the financial destiny of the country and the Dominion? A. Absolute~y. Obviously they have. over 21. . i t will become a progressive effort t o increase that consumptive demand? Entirely. Do the stores become empty and fail to refill or don't they? If they refill by means of the factories behind the stores. That is right. A. Q. reach the limit. or assuming in your mind whether that will produce a priority problem on the supplying the producing organization you have in the country. The natural conception one can acquire. Q. each $500-1 am not saying it is possible.of course not. is subject to a certain amount of modification. A. dividends on products we have becomes limited to the reasonable avail~bilityof markets and the use of that natural resource. there was never anything to convey the idea that in a community such as Alberta we could issue these tickets to any extent'whatever regardless of our ability to find either markets o r increase consumption demand? A.cancel i t when i t finally comes back? . would i t not be essential for us as a state to have soine medium of clearing these tickets? They must come back to be cleared in some way. which broadly speaking is cancelled an purchase of commodities and returned to the place from which ib emanated. but take that amount. you gave to the people abiding in Alberta. But in the meantime. there must be some medium of honouring these tickets? A. This must be obviously'tme in the ultimate result when the various nations A. A. the banks. whatever i t may be. To get a clear idea of that imagine yourself t o issue to the available population a definite amount of increased pyrchasing power and seeing. the insurance companies or other persons to honour tickets. Q.

The original subscribed capital. is your limitation based on the original par value or market? A. May I elaborate that a little? If you do not limit the dividend. in fact t1. -4s I understand it. Do I understand by that ciuestion the subscribed capital? Q. Q. or an accounting of the value of the assets of the banks and the insurance companies of New Zealand? A. "We will a t once distribute these reserves. Would it not work out that those who hold at the present time their private wealth in the shape of bank shares. of existing values. Q. are written down to sums which do not in any way represent their original cost. Then when the difference is taken between the original or book value. Q.e majority. according to their market value. The original par value. 112 . Certain surpluses which have been earned. I believe i t t o be true-I have had i t stated to me on very good authority-that most of the war loan. of which a large amount was held by British banks of which the market value was anywhere from $100 to $105. it not true in the proper working out of the financial system these items are all taken into account in market value of shares of these banks a s listed on the exchange. I am going to give you a pragrnatical answer. stood on the books of the banks between 1 0 and 15that is writing down of assets and demonetizing of hidden reserves which the banks themselves can monetize a t any time to anybody else. Your suggestion is that the six per cent limitation is based upon the original capital of the banks of New Zealancl. That does not affect the capitalization. the fact that the banks return 3 % or 4 per cent is a n assumption on the part of the public that there are many hidden reserves or assets. I t is basd on that fact that f o r the purpose of retaining control of the situation. I understand you would take that difference out of shares account and distribute? A. not accurately but approximately? A Yes. Is. The dividend of the Bank of England is sin per cent. Q. the directors of the bank would meet together and say. Q. -4. then on the promulgation of any proposal of this kind. or the present capitalization. it is based upon a n assumption. or the present capitalization of the banks? A. would find these shares had greatly depreciated in value? You are distributing that wealth to those who a t the present time have none? A. No. Personally. Nay I ask a few questions about the New Zealand scheme without going into details. as represented on the balance sheet of the banks. I am sympathetic that the oank should be considered a public utility. Fiist of all you suggest limitation of the dividend which the banks of New Zealand can pay the shareholders to six per cent. That is true and a very reasonable comment. In Canada there is a great difference between the original subscribed par value of the shares of the banks and the present shares.Q. Is this a correct statement? Your plan in New Zealand is based upon the taking away of. what ever it may be. and pros ceed to pay about 500 per cent. values that have been created . certiin. Yes. or whatever the basis of the banks and insurance companies. Assuming that the original par value of the share was $100. Q. In the New Zealand scheme they are putting into effect a dividend limited to six per cent. I gave a n instance of that-I forget whether i t was here or not.in the interest of the few and distribute them generally in the interests of the people? A. and the average market price a t present is $200." Q.

it is only a healthy way on the assumption that you are not going t o pay your debts. takes away any vestige of power t manage. then is i t correct to suggest that our task becomes one of propaganda. i t becomes limited to the extent we can go on that program of borrowed money to pay interest? A. Q. a t Canada as a unit. Q. as a province. On the status quo. In as much as your argument presages we shall work by constitutional method. taken away the power to institute a system of social credit? A. that having regard t o the fact we are a new province. Nor . that it might be better for us to utilize our wealth in putting people to work to supply these things. and that is the power of a sovereign state.the policyholders. not even the shareholders of the banks or insurance companies. So that if a community. And pay interest. Again. They are absolutely dormant and unutilized reserves. is bound by the constitution which practically. Is your scheme in New Zealand based on the idea the hidden and undistributed wealth largely held by these institutions constitutes the greater part of the fiscal system of the banks and insurance companies? A. Q. Q. This may not seem to be a pertinent question. can obtain the tokens of money for the purpose of doing these things is by borrowing and increasing our capital debt. to that extent they are handicapped in trying to bring in a system of social credit? A. Looking . earned by the insurance company and also using this as a basis of distributing credit? A. your New Zealand scheme involves taking certain profits. Q. coming back to the idea of the sovereign state. Q. such as one of our Canadian provinces. Q. I think it desirable not to penalize anybody. and there is still a tremendous field for the development of those things we feel are necessary for a desirable standard of living. if the only way in which we. You have to be very careful. you would considerI would like t o get your opinion of this because i t is one on which I know there are differences of opinion-would you consider that the idea of the Dominion simply issuing new currency for the purpose of building public works is a method of carrying into effect in any way the idea of social credit? A. just to that extent the constitution has. But things may be thrust on y o a You are not a sovereign state. but i t arises from a question asked by Mr. according to the privy council decision. theoretically a t least. these major parts of our financial system. Dealing with the insurance companies. spbmit to things as they may be? A. Nor the policyholders? A. control. rather than as provinces. managing. and until we have done that fairly well.A. Yes. Q. Gibbs. and using what influence we can by constitutional methods to change that constitution. I agree absolutely. would you say that is a healthy way of proceeding? k Well. So that if we still maintain the idea we are going to pay our debts. Q. yes. in the meaning you attach to the word "profit" In that case the essence of the thing is you are distributing something which nobody gets a t the present time. I t would be absolutely catastrophic. discipline or penalize o thesc major institutions. I think. disciplining or penalizing these institutions that constitute the major part of the financial institutions. Would this be fair: Some of us a r e afraid that the extent that any community has not the power of controlling.

it might be possible for a sovereign state like Canacla to issue new currency to a certain point. or anyone else. Yes. that is.. but <here you have the price level based on the proposed price of the article. ~t of modernization. and only upon having these things before you. provided i t does not go beyond the point nhere it immediately would bring about rising prices? A. where there is a greater accumulation of undistributed wealth than in a new province where we have no banks. Inflation in the number of tokens not accompanied by a n increased demand is not necessarily inflation. GIBES: Slight I suggest as part of your question. Undoubtedly. . rather than immediate administrative effort? A. Major DOUGLAS! May I be altoired to answer? I once defined inflation as being anything the bankers did not want done. "We will have a little of it'oorselves. everybody says." Q. it is quite impossible to raise the amoune of tokens beyond the existing level without getting subsequently a raise of price. an increase in the number of monetary tokens accompani9d by a similar. than in Alberta. Is it a fair interpretation of your social credit ideas that the a b i l i : :W distribute wealth would probably be much greater in one of the older and more developed communities such as Ontario. Q. the position where they may be considered even fairly wealthy. even in a comparatively undeveloped country. could you.ment you have more money about. and particularly with respect to control of the major financial institutions such as banks and insurance companies. the thing. am I right in a~sumingthat you mould have to have before you for . Mr. In order to formulate a system of social credit for the province of A1Se:fa. lay down a sufficiently considered scheme of social credit in? the province? A. but there is a n accurate definition of it and that is. not what it will fetch. Q. no insurance companies. I should be obliged to agree with that. Of course I shop qualify that by saying that a good deal of the consumption of Alberta is the production of other communities and that you have t o monetize if possible whatever production you have in order t o obtain that production from elsewhere so that there is a pressing need. The whole situation aris. to get a bit closer.In in:h we ventory of the natural wealth of the province. Mr. You are in accord with that school of economists who believe unrestrained inflation is a disastrous thing to any country? A.. and very few people who have reached. and complete opportunity to study these. as well as a complete understanding of the constitutional limitations as between the Dominion and the province. BROWNLEE: I will leave you to ask that question. because the mo. We might come to this conclusion as the result of the whole study: Quite conceivably our task in this province is to try and change the existing s t r u c ture so as to get a greater control bver major financial institutions which may involve a period of propaganda and strategy. . A. Q.Q. I am obliged'to agree with that. BROWNLEE: Probably a more correct answer to my question \\-oultl t-. and very few corporations? Undoubtedly there are greater opportunities in a province such aOntario or Quebec.of the whole productive system. what is unrestrained inflation in a country with such tremendous potentialities of production? Mr.Isiderable study first a complete picture of our economic position a n . Q. both with respect to internal trade. produce. I should agree with that.. equal or greater increase in the general level of prices. That is true inflation.

The amount you mentioned in your price system. Q. Q. ynu are distributing the national dividend t o everybody who owns anything. of money a n increased and'unearned increment in that value? -A.i t l : ~ country to a n e a t e r extent? Do you agree with thnt? ( 2 .:iiI1i. What I do not believe is you can effectively distribute national dividend in any form without effectively dealing with price. Does that mean in Canada \vc will have as one means t o puiting in 3nch n scheme. That shovld be the objective. I do not agree with the obvious explanation. Q. does it not absolutely folloxv that a constant lonering of prices is giving lo the flon. You are distributing national rliri~len~la nnd you have the most effective xeapon by which you can remove the producer. i ~ cr:::. On the other hand you lower prices by the device of the compensated price. I do not see the sequence a t all of what you say. and other courrtries will have to diversify their industries 3 r d occugations \. He has a right just like anybody else to a dividend in the constantly increasing assets of the general community which he gets by lowering prices. either in intcrnnl or external markets and in view of the tremendou? increase in the productivity of industry and agriculture due to the exten:io:~ of the use of machinery and power. the object would continual lowering of prices? -4. The question arises whether he shall have that dividend from the use of production o r the use of capital? A. Q. but the minute you lower prices below the cost. You combine that with the distribution of national dividend directly in the form of additional purchasing power. Q. Let us say I am reminded of the Biblical story of our Saviour r h o gavc the talents t o the people and one man wrapped his in a napkin and put it away.ec:: L 1:ii- tions will ncees%arily be restrictcd to a greater and greater tlegrec to chose things that cannot economically be produced by themselves: A. In this case with that incrcese of price level the man who wrapped his talent in the napkin would have had the increase in value? A. and bearing in mind the measurement of the value of money is this purchasing power. The constant level of prices means with increased productivity the ability to constantly distribute the larger percentage of that t o those engaged in production. Will you define what you mean by "capital"? Q.Q. ROSS: Pursuing iel-tain i. and if you 6x prices you immediately remove all incentive to improve the process. most strongly. in other words. Does i mean ncccssarily to a consi~ierableextent the trade as bet:\. Mr. if you are not going to lower the price. you have a further decentralization of industry': A. You can distribute the national dividend by the single process of lowering prices below cost. And I understand that you were quite in favour of retention of private o\vnrrship of poverty. does this mean this country. I should like a t once t o take the discussion on to a slightly different plane without the introduction of any moral consideration whatever into this consideration. You can of course quite obviously distribute the national dividend in one or two or three ways. That would be rather the effect than the object. I do. you must if necessary raise the price and other rewards to those engaged in production ? A. I would say he has a right to that.laluiries ma-le by tlie Preniier in rcgard ro t h e 'vealth of the country being depenclent upon its ability to dispose of its surplus. You can remove him i r o n . by that lowering of price. because a man who produces an articlo by a bad process is just as well off ar a man who produced by a good process.

a t the present time. The major owners of the debt of the world do not want it settled in wheat. but to give the general community. I agree with you in that entirely. One difficulty regarding debts in this country is they are being asked to repay debts by means of production when it takes two or three times as much to pay the debt than it did a t the time i t was incurred. operation by the compensated price and he cannot possibly sell in competition. because the farmer has increasing cost? I am quite convinced. The only correct one is. and the proper function of money is not to interchange between those separate producers of wealth. Under those conditions. His wealth is. take wheat. From his point of view. Take the farmer. that would be. wheat is nothing whatever except something for which he exchanges purchasing power. that money is simply the means of t r a n s f e m n g real wealth from one person t o another. A. that purchasing power is lessened a t a n inverse rate. A Q. 1will t ~ k that view. with those in possession of the campensated price. in this province. The point of view that I have is that the function of money is no longer that of a medium of exchange. wealth is a central pool into which everybody is contributing. I take i t you are endeavouring to lower prices rather than stabilize prices? Absolutely. t o a very large extent it is pure abstraction. any wealth a t all. The major owners of the debts that we have are the financial institutions and the financial institutions do not take delivery or payment of it in wheat. and a number of such things. A. another way of paying that dividend. by whom the wealth is produced.Q.by synthetic purposes: that the wheat that the farmer grows does not produce any wealth a t all. No. We a r e looking a t the problem from a diametrically different point of view. Those things only become wealth by reason of the fact that somebody else produces roads. from his point of view. That is not the correct interpretation of money. wouldn't i t ? No. that money is a means of transfer for that transportation. Q. Your suggestion does not take into account the matter of debts. the necessary power to draw from the central pool of wealth. A. in other words. wheat? Q. A. that is exactly what i t is not. For instance. Q. On the contrary. as some people suggest. produces wealth. if the exchange possibility for his wheat for other things remains constant? That is what you are aiming a t ? A. if their purchasing power is falling all the time. He doesn't grow. from his point of view. A. that all wealth a t the present time is produced . A. and somebody else bakes the farmer's wheat. I believe. if he is left with the whole of his wheat on hand. if you had a slightly advancing price t o the means that everybody has. Unless they are obtaining a greater rate for their labour? They cannot be receiving that. From the world's point of view he does. but. I n other words. Q. So i t is impossible t o say that anyone. 116 . they do not want it settled in anything tangible a t all but merely want it settled in form of more monetary instruments. he has no wealth. You do not agree then that a great deal of the instability is due to the fluctuating price level? What is absolutely vital is the conflicting price level and not an absolutely equivalent fluctuation in the amount of purchasing power. You state it is like a ticket on the railway that enables you t o get transportae tion from one place to another. if you had a slightly advanced price level. except considered in the light of what everybody else is doing a t the present time. And. Q. Q. & A. to a large extent. that the manufacturer of motor cars does not produce any wealth a t all. No.

Then. a definition? Would you mind defining that again? If I understood you correctly. you mentioned a few moments ago. Q. time. what are the means of overcoming those obstaclcs. Q. then thc means to that objective a r e quite different to the questions of credit and so on. The first point is to obtain a conception of your objective. Well. and only the final thing. recognizing that both inflation and deflation are bad. Capt. under the Douglas social credit plan.Q. are both bad.A. 1 think. first of all. so credit will be handled in a little better way than it perhaps has been and may be. a deflation is not a deflation until it is nccornpu~~icd byA. I think I can see a t once what thc objection of the farmer to a central bank is. Have you any suggestions along that linc? A. The consequences a r e cluitc a seporatc ~nnttcr. And the final thing. you defined inflation of money a s only being inflntion when it is aecompanierl by an equivalent or hieher inflation of price. The third thing to find is the means available to you to remove the obstacle t o obtaining your objective. and doflirtion is exactly what I said i t was. They Q. of accompanied by the bankruptcy of the producer. thc second point is to determine what is preventing you from achieving your objective. it is something quitc different. Q. That has not. Yes. which would you define as the worst? A.. I mcan it is not forrnulatcd when you sny you want to relieve the unemployment prablem or anything of that sort. in considering that. been formulated. That reminrls me of asking which is the better of two rotten apples. 1 agree. in a practical way. Oh. the credit of the nation will be directly related to the wealth o r production of the nation? . what are the obstacles to attaining your objective. I could givc you strings of conscqucnccs of both inllation untl dellatio~i. broadly speaking. obtain for younclvcs a clear conception of your major objedivc in policy. I should want a clear definition of objective. Have you any suggestion. That is. for anything we can (lo in this province a t the present time? A. on the contrary. A further reduction of the number of monetary tokcns in circulution is not accomparricd ncccssarily by a further fall of prices. I t is not the slightest use considering a final plan until you have considered what is the objective. you have to consider what means t o apply t o remove that obstacle. A. a t the present. and. Q. I have. Q. Deflation is a reduction in the number of the tokcns of purchasing power which is accornponied by a fall of prices up to the ' point when the cost of production in reached. No. That is quite n ditrerent thing. but is accompanied by n r c d u c t i o ~ ~ production. is your plan to no put i t operation." . Many people in this country think that perhaps the first thing we should do is to have a differently organ- ized'central bank. but inflation is exactly what I said it was. and how t o go about it. after those things have been considered. Is i t not true that deflation adects your production. did you not. DAKIN: I s i t correct to assume that. And. I t is not the converse of inflation. If that is your objective. so f a r as I know. I have no doubt whatever that its private objective is to rivet the private financial systcm of Canada more firmly t o the international financial situation. Getting down to practical details of the matter. I think what I have just said is a camment on that. whereas inflution only affects the ti-ansfcrcncc of ownership of wealth? Isn't thut what dcflution is? A.Well. That is the direct sequence. I didn't define that. F o r instance. The answer to that is "Yes.

When an article is purchased for consumption. from the retailer to the wholesaler. and. but it is not in the least fundmentally necessary. A. under the banking system. The provision of funds a t the present time. please explain how our p r o d u c tion can escape [being influenced by world prices and world conditions a s a t present. a slight over-emphasis on the mere figures of finance. The maintenance of the dividend a t a permanent level can only possibly depend on the actual production of the country. and nothing has happened to the real wealth of the country. For instance. Quite obviously. therefore. but it is not fundamentally necessary that Canada. I t is a condition of the domination of the world by international finance a t the present time.' for the purposes of this calculation. supposing you take a bushel of wheat and you put it in a n elevator. in more or less direct relationship with the value of our products? In other words. then you want t o recall less money than you issue. is purely a bookkeeping transaction. does the dividentl also go up? A. and presents no difficulties. our wealth. That is to say. Your production woul~lgo up. unless you a r e going to assume that you are going to allow world prices to control your internal distribution of wealth. The recall of those funds is of course essentially a problem of making figures represent facts in evidence. nothing n. even a t the present time. Not in value. is the ease with nearly every country. Q. Mr. in actual fact. if you have the wealth of the country increasing continuously. even though it was not accon~paniedby the same plan elsewhere.Q. the idea that a balanced budget is a fundamentally and scientifically correct state of affairs is entirely fallacions. No. necessarily convey anything t o anybody. ant1 your general prosperity would go up. if wheat goes down in price. Q. Exports are a loss to the real wealth of the. including in the world production. or amount. which represents the net increase in the value of the wealth of the country. through the agency of prices. Q. from the wholesaler t o the producer. the money passes from the consumer to the retailer. so as to leave a balance. running all through this set of questions. Questlons of price are purely questions of figures on a ticket. imports a r e a gain. and. for the purposes of this calculation. I think. the wheat is exactly the same wheat as it n-as before. but not to other countries. in nine cases out of . Q. would not the dividends payable to individuals or families under the Douglas plan fluctuate in value or amount. should be dominated by international finance. The whole thing is nothing but a figure on paper. I think. If both of these questions a r e answered in the affirmative. except on the assumption that the country never gets any richer. will the divitlend also go down in value. exports. please explain what maintains the dividend a t a permanent level. or need not. and wheat goes up from 60 to 00 cents a bushel. of course. and if wheat goes up. broadly speaking. imports. BUCKLEY: How would you provide funds for national dividends? Could they be recovered by income tax? A. The provision of funds. The short answer to that is: No. and subtracting from the wealth of the country. presents no difficulty. A. or any other country. though very difficult to escape.hatever has happened to the wheat. Our production being infiuenced by world prices does not convey anything t o me. which is obviously a fallacy. country. and that is not a necessity. If the Douglas plan were applied to Canada. The creation of the recall is accomplished automatically. of course. There is. If question two is answered in the negative. be influenced by \vorld prices and world conditions pretty much as a t present? A. If question three is answered in the negative. as you realize. which. ~ o u l d not our production.

if yo4 take the balance ~ h e e t any prodncing company. the cash of deposited with the bank and that sort of thing. but you never write down the money assets. in the case of a national balance sheet. You must realize that those figures of real assets. on the asset side. shall be written down. I t merely diverts some of the pnrchasing power from the general public to the bondholder. on the same side of the balance sheet as the real physical assets. the capital assets. with money. and you put up a factory. for my own information. you will find. and they started t o issue curfency in England. although they are lumped together. You will find on the assets side. huildings. buildings and that sort of thing. Now you can. but i t is not the same thing. as if money and goods were the same thing-as if money and real wealth were the same thing. There is another way by which i t can be done.000 worth of stock. but they a r e not money. it is ultimately so. they are on opposite sides. and that disposes of quite a considerable amount of the money which is issued. Because i t does not increase the available purchasing power in the form of liquid money to any appreciable extent. Why not? A. Now you can write down those physical assets. and he insists that the real assets. which they are not. it is always insisted upon by your auditor. and that is. but the real assets. every balance sheet of a public company has to be audited by a public auditor. plant. that the figures attached to them in the halance sheet. according to your theory. Suppose you issne $10. You will find that. Now you can recall issues of purchasing power by a process something like this.ten. which is a perfectly legitimate procedure: Certainly in Great Britain. cash in bank and things of that sort. The assets. Well. on the assets side. which stand against the creation of the national debt. that the issuance of currency by the Dominion for public works would bring about inflation. and apply some of the issues of the money to re-transferring into cash the physical assets which are written down. and I have no doubt in Canada. debts receivable. which I think will probably form part of any workable scheme. wasn't the prosperity of the ordinary individual in the country much greater? 310 ' . write down the physical assets o f a company. are simply price tags attached to the things which are in the possession of t h e producing company. where it is automatically cancelled . When the war started. and made currency more plentiful. You ought to have a transfer back into purchasing power of those figures which are written down. Isn't the interest on interest-hearing bonds which double themselves every eight years or so. Money is supposed t o be indestrudible. You said. in answer t o the Premier. and do at the present time. you will find cash and real assets on opposite sides of the balance sheet. The cash creations of a nation a r e represented by national debt. fundamentally. and the physical assets: plant. Mr. the two things are not the same. which money represents. Q. in the balance sheet. from the producer t o the bank. You understand I am not supporting this. and your figures are written down. so f a r as there is such a thing a s a national balance sheet. capital? A. in a national balance sheet. but a t the same time. because you hare used your plant f o r the production of something which is sold to the public. with no base of gold. So.by the repayment of the loan. MATHESON: There is just one of your answers that I would like to clear up. Q. are the real assets of the country. Q. The physical process of depreciation takes place. are written down by a n auditor.

They want merely to take all they can get under any consideration-all that they want? if you like. it was. I agree with all that. of course. IVithdra\ving of credit and currency in the country. in order to keep that lag. you get into two difficulties straight away: You get into the difficulty that you decrease the . as a great expolting country. I can. I can imagine the inflation might work as a policy. we have been subjected for fire years to a process of cleflation. seeing that you said that inflation was something the bankers didn't want. I don't want t o be uncharitable-but the general behaviour is: "Let us always keep the general public in the literal possession of the bonds. but only while that lag is in operation." The bondholder. under that financial system. you have to i d a t e faster and faster and faster. so that. the price level overshoots the level of purchasing power and you get the opposite result. which wages.hidl he created the debt'. I don't t l ~ i l ~ k 1 am quite familiar with the line of argument that -011 are SI?. under those conditions. The general irnpression is that.. I cannot see. where general inflation can ever be an advantage. see quite well that there are quite a number of technical reasons why inflation can produce a temporary advantage. I answered a great deal of it in regard to the q ~ e s t i o nof the honourable member on my left. in addition to that. that. they are not paid in wheat. h constantly rising price ievel must of course be accompanied by a constant wrangle about wages and things of that sort. you do not require the production of the whole of the population a t any one time. and you decrease the purchasing power of the wages of those who are employed. because we recognize our inability t o deal with fundamentals in a country such a s this. but that does not answer my question. and keep the general public in debt. Would it be a sensible thing for Canada to do. would i t not be good for the general public? Value of Inllatioa A. which is the general public. I haven't got any great tenderness for the bankers. or. looking a t the question from a broad point of view. Yea. Well. There are two or three very obvious reasons for that. We are not looking a t this fundamentally. I don't think you need worry.which is something I agree with. One is that you get a distinct lag in the rise of prices behind increase of purchasing power. Q. but the real fact is that.. you have a real increase of purchasing power. to follow that course until the price level of the producer in the country gets illto some correct relation to the price level a t \. will be left in possession of the bond. But. In Canada. Q. but i t wau accompanied by a very rapid rise in prices. So that. if you stop for any time. As to the delusion that the debts are actually paid in wheat.' -4. follo~ringat this time. i t is certainly true in Great Britain and the United State-in times of peace. It is based on a continual crossing over in your mind between coat and purchasing power. the bonds will be paid off. and. and the consequence is that the debts created by the inflationary process have to be repaitl a t the rate of five to one. if the whole population were required t o produce the goods necessary for the use of the public. even if you raise the price of wheat to anything you like. Now. heavily penalized everybody who was not in receipt of constantly increasing I t set illto operation a most undesirable state of affairs. which is necessarily a n increasing number of people. so while that lag is in operation. and you deaease the purchasing power of those who are not employed immediately you begin to inflate. the very last thing that they want is to have the bond paid off.-4. but I don't think a sweeping assertion of that sort is necessary. in any case. That is beyond all question. because you raise prices. for the present moment. This may be quite unconsciouswe will say it is unconscious. d n d I might say that the very last thing that normally the real creators of the debts of the world-which are undoubtedly the financial institutions-the last thing they want is the repayment of the debts. except in time of war-nd I shouldn't be inclined t o wholly qualify this for Canada. the moment you begin t o decrease the purchasing pawer of those who a r e not employed in the producing process.

is changing every minute. That may be true. Well. which must export a great surplus. Yes. that price is a t present regulated by the Liverpool market. Is there any reason why inflation should be unrestrained? Could that not be regulated by the government of the country? A. I do not agree with inflation. but do you admit that we ern by inflation' raise the price of wheat in Canada? A. Q. If you merely raise the price of wheat in Canada. Of course. by saying that practically the whole increase in employment centres around the munitions area. Even temporarily? A. I would like to say. apparently. and a t the same time have a rising price level. where the number of men receiving wages is proportionately large-greater than in Canada? A. I agree with that. you want t o internally raise the price level by depreciating the purchasing price of the Canadian dollar. and we must have some inflationary process to do i t ? A. So. Q. that is true inflation. Q. then. A. If you will eliminate the word 'Linflation. M y answer t o that is that you ought not t o want to raise the price of wheat in Canada. I will answer that question quite shortly. the effect of that is that i t is only effective a s long as you a r e yourselves the only people who do it. which I have to do in a few moments. If you are asking only f o r a n increase in the price of wheat in Canada. I don't think so. Q. according to the definition. because the minute you raise the price of wheat in Canada by one cent above the world price. You either have to base your wages on a composite price level. but. What you ought t o do is to enable the producer of wheat in Canada to lower the price of wheat and at the same time make a proflt. just before I leave the chamber. the moment that you increase your money tokens. But is there not a difference between such a country as Canada. If a farm in Canada is worth five dollars at one time. Q. and you decrease the purchasing power of the wages of those who are employed. Q. Q. But they don't do i t ? A. which means that the wage level is increasing or decreasing. Q. Q . by any device a t all. to summarize it. and a r e not conditions there better a t the present time than they were say two years ago? A. I don't think so.'' and tell me that you don't want a rising price level. surely a t the time when the farm is worth five dollars in Canada. Q. the producer gets more f o r his wheat? A. the rest of the world will then buy wheat from other countries up to their producing level.purchasing power of those not employed. Mr. I don't say it is a desirable thing to do. without doubt. and therefore they draw less from the production system. it simply means you get less of the world's market for wheat. then you can do i t by compensated price. and only three a t another time. other things being equal. I n other words. They all do except the Canadians. If we wish t o raise the price of wheat in Canada. that I feel very indebted to . and you may take it for granted that there a r e quite enough people in the world who understand that trick. because your price will be hirher. everybody wants to do that a t the present time. or you have a great deal of industrial trouble. DUGCAN: Major Douglas. Q. then you get into a n almost endless discussion about world prices and so on. a n increase in circulation of currency. and a n industrial country such as Great Britain. so you get involved straight away into an unending wrangle as to what is the correct rate of wages. Then may I ask: I n Great Britain a t the present time ( I was over there last year) there is a n increase in employment. and taking things a s they are. but everybody is trying to do that.

Now you have told us very definitely that. with the single exception that i t takes away power. Duggan that he is a particular Conservative. having full regard t o the position we occupy. 9 Owing to your limited powers. and full respect of the other provinces in Canada. That. and so on. But. Yes. I see no reason why any reaso~able individual anywhere should be penalized by any such system. a t the moment. On the possession of those facts. But. if possible. And I can assure Mr. I mean to say that me must take full cognizance of our limited powers. I should say it is not a question that my . Q. theoretically. or four practical progressive steps in which eventually this system. beyond that. and I think we all agree that refonnation must take place. we naturally want to take advantage of any step that will contribute to remedying the situation. Q. and. I believe it would be possible to inaugurate progressive steps t o producz a result which. on account of our limited powers as a province. I a m devoting a great deal of attention at the present time to emphasizing that. and I would like to see those steps taken in a practical and progressive way. I think he has stated the situation quite clearly. I think you said that the citadel o f our present system should not be swept away with one cataclysm of cyclonic. We all recognize-even those of us who have the misfortune to be called Conservatives-we are all interested in the reform of our present financial system. but we a r e very practical people. would help us immeasurably. and theories relating to social credit. requires the consideration of accurate facts. I would like to know if you can suggest to us two. Duggan that he is i n good Tory company. . but I should not Like to be quoted as saying that that prevents it from going into operation. There can be no greater possible mistake than to assume thatthis is a class system. I think. You made one statement the other day. I gather from Mr. so that one step might be taken this year. under which we can make a substantial contribution to an improved financial position here. the application of your scheme would not work. of which I am not in possession a t the present time. and I don't know whether you can set this out f o r us. in very clear fashion. can be brought about. having accepted your statement as t o the difficulties before this province. which I do not Wink is beyond reasonable capacity. system would not work. but i t takes away power from those institutions which I think is very radically and very improperly used. not necessarily of the money or wealth. into operation.situation as we find ourselves. has the attention of all parties. I would like t o feel t h a t we have got a practical. f r o m m y point of view. Now. what we are primarily interested in a s a legislature is the application of any proven system. but you cannot put it.you f o r the statement you have made. as I see it. after all. but have a n objective. Now can you help us? A. I must say that. that more attention . with our present limited powers. in fact all over the world. because I am only generally familiar with the situation here. Now I am a Tory. force. vitally interested. is to the advantage of everybody. or something of that kind? A. Yes. to my theory by Conservatives i n Great Britain than by any other party. anci it does not make very much difference what our views are. What he asks me to do. Most of our time has been spent i n a general discussion of economic theories. a s f a r a s this legislature is concerned. of course. and another step next year and so on. our inquiry pretty well collapsed a t the end of the Premier's questioning-that is. I presume that is the interpretation? A. o r some improved system of social credit. in that. but we naturally want to move forward. Q. progressive programme. we wqnt to step forward in a practical way. and I have only been able to talk to you about generalities.is being paid. and the whole question. That suggests that it must be done by progressive steps. or three.

in that situation a s we find ourselves. I see no reason why any reasoxiable individual anywhere should be penalized by any such system. I believe it would be possible to inaugurate progressive steps to produc: a result which. And I can assure Mr. I should say it is not a cluestion that my . if possible. with the single exception that it takes away power. in very clear fashion. But. theoretically. a t the moment. and. but I should not like to be quoted as saying that that prevents it from going into operation. That. Yes. On the possession of those facts. Now can you help us? A. Now. to m y theory by Conservatives in Great Britain than by any other party. Q. we wqnt to step forward in a practical way. system would not work. I would like to know if you can suggest to us two. but we naturally want to move forward. with our present limited powers. . I must say that. so that one step might be taken this year. . and the whole question. as f a r as this legislature is concerned. I mean to say that we must take full cognizance of our limited powers. under which we can make a substantial contribution to an improved financial position here. what we are primarily interested in a s a legislature is the application of any proven system. and theories relating to social credit. Duggan that he is a particular Conservative. or four practical progressive steps in which eventually this system. or three. on account of our limited powers as a province. I am devoting a great deal of attention at the present time to emphasizing that. but we are very practical people. Q. would help us immeasurably. or something of that kind? A. can be brought about. from my point of view. We all recognize-even those of us who have the misfortune to be called Conservatives-we are all interested in the reform of our present financial system. You made one statement the other day. Q. I would like t o feel that we have got a practical. progressive programme. but you cannot put it. Duggan that he is i n good Tory company. . Most of our time has been spent i n a general discussion of economic theories.you f o r the statement you have made. after all. into operation. we naturally want to take advantage of any step that will contribute to remedying the situation. the application of your scheme would not work. I think you said that the citadel of our present system should not be swept away with one cataclysm of cyclonic. that more attention is being paid. . What he asks me to do. I think. having accepted your statement as to the difficulties before this prorince. and full respect of the other provinces in Canada. There can be no greater possible mistake than to assume thatthis is a class system. Now I am a Tory. and I don't know whether you can set this out for us. and I have only been able to talk to you about generalities. But. Yes. in fact all over the world. or some improved system of social credit. and i t does not make very much difference what our views are. 9 Owing to your limited powers. vitally interested. and so on. and another step next year and so on. which I do not think is beyond reasonable capacity. beyond that. our inquiry pretty well collapsed a t the end of the Premier's questioning-that is. not necessarily of the moaey or wealth. of which I am not in possession at the present time. has the attention of all parties. I gather from Mr. Now you have told us very definitely that. but have a n objective. force. having full regard to the position we occupy. and I would like to see those steps taken in a practical and progressive way. as I see it. because I am only generally familiar with the situation here. but it takes away power from those institutions which I think is very radically and very improperly used. That suggests that it must be done by progressive steps. requires the consideration of accurate facts. I presume that is the interpretation? A. is to the advantage of everybody. and I think we all agree that reformation must take place. I think he has stated the situation quite clearly. of course.

JAMIESON: There is just one question I wish t o ask Major Douglas. and in the older provinces there a r e many large and important institutions carrying on business. He has made i t very clear that. legal tender). and that has a publication committee. and. we have not gqne f a r along that line yet. W. we can hardly expect you t o set down a plan. I t would be exceedingly interesting to know if he has studied a the question a s t o whether the Dominion could put ~ u c h system into force in Canada. with a fuller study of the situation. fo start somewhere. Col. is sound. A. and where. that we might know that we were studying the system with your authority? A. technically speaking. Any publication that is recommended from that source. and therefore I think that you have to break into that vicious circle somewhere. I believe that final steps a r e a t present in~possible. what publications can be had. owing t o our constitutional Jimitations. Strand. except in so f a r as the Dominion may encroach thereon in dealing with certain specific subjects such as currency (and currency. Yes. and also created financial institutions with Dominion charters. for the reasons I have just stated. and that is that I have no reasonable grounds t o doubt that the best brains of the world. giving information regarding your system of a social credit. or would you state to us. and that is why it is necessary. to really formulate your objective. 2. in Canada means legal money. Aberhart. and the title is the Social Credit Secretariat. I ask this because of the fact that Mr. and the issue of paper money. Mr. MacLACHLAN: May I refer (back t o my previous question? It has been pointed out to me that I did not follow that t o its proper conclusion. and consequently administer. in pursuance of those powers. and can b e carefully read over. and has been submitted to the best authorities available. and bearing in mind that. currency. and be said to be either correct or incorrect. that Ottawa would have to refer i t t o London and London to Basle. under the interpretation placed upon the constitution by the judiciary committee of the privy council. LANC: Some reference was made to a pamphlet or pamph!ets published. progressive programme could be instituted?. the Dominion has created banks. and t o begin to move in that direction. There again I can only give a general answer. if a matter is referred from Alberta t o Ottawa. that some financial institations of considerable importance have been instituted i n this province. keeping in view that our constitutional act gives to the provinces the exclusive right to legisiate.but to realize what you are up against. a few days ago. and that. of which the address is 68 X Strect. In this province. that the general feeling that one lias is that. without a fuller knowledge of our general situation here. strictly speaking. for a very considerable period during the past. banks and banking. and I don't believe it is much more possible in Ottawa than it is in Alberta. Q. or something of that sort. and I believe the small locality is the place in which t o start to take some steps. before this com123 . Would you recommenrl to us. Mr. in his opinion. and there is a perfect fund of literature on this subject a t the present time: and every publication can be submitted to that committee. have been engaged in quietly erecting defences t o the international world moncy system. you may assume. I do. Then would i t be possible f o r the Dominion to put such a scheme into force? A. you think that a practical. but. as I think I said in public somewhere in Canada quite recently. but there is one thing t o be considered.C. I believe is possible even in Alberta. I believe. within the field of property and civil rights. We have a n organization in London. Q. M y own feeling is that one would possibly find that the beginning need not be by any means international in this matter. this province cannot take final action to introduce such a system of social credit.Q: I internret your answer to this effect: that. Q. but certainly not the final steps. the provinces must not take such steps as mill interfere with those companies carrying on their business in this province.

and he said that he felt sure that Mr. and the verdict of the publication committee was that i t was technically unsound. Q. She was then put under the tutelage of the League of Nations. A. I have some recollection of saying something like this: that I had no doubt that it served a very admirable purpose. and he told me of the most admirable work that Mr. I think I predicted exactly what would happen in regard t o that. Well I should say. After looking i t over. t o be put into effect in Scotland. dealt at some length with this question. In consequence of that. and the prices that Japan is able and does cluote in business in the world markets at the present time. Douglas. referring to the banking system. and my evidence is on record there. What is your objection to public ownership of the banking system? A. The Australian Commonwealth Bank waa a publicly owned state bank. but there haa been no 124 1 . Xberhart was doing." Those were his words. and say that that statement is incorrect? A. the scheme is not in operation there. only one experimental effort t o rest upon-there may be another. I have no recollection of the contents whatever. in Ottawa.' and told the man in general outline i t covers his principles. As there is no home rule in Scotland. I think. which was in operation in Austria f o r about two or three months. are not due sepecifically t o very low cost. he put on the outside his autograph: 'With kindest regards. and I think the very greatest credit is due to Mr. This pamphlet was presented to me. has. Monger. by Mr. WHITE: A little while ago. you mentioned that the central bank was riveted t o the international system. and wherever desirable. What did happen: A Canadian whose name was Monger came and saw me. and the results of that are now history. Mr. or was shown to me. BOWLEN: I would like to ask Major Douglas if his system is in operation now in any country. It was m y own opinion that you answered fully. in my opinion. It was in no sense a criticism or otherwise of the book. although I cannot speak so positively on that. but are primarily due to the use of a compensated price. in 1923. an operation of the compensated price. He has. that the question of so-called ownership has almost nothing to do with it. The question is: What is the policy which is pursued by that bank? Now the question as to whether you can get a publicly owned bank to carry out a policy in the general interests of the public. require home rule?. Another application of it. To be put into effect in Scotland. and not England. There was a very interestipg application. Mr.&tee. Mr. that you said. H. as I write my autograph in a great many places. In answer t o this question. he made this statement: "One of our group went to the old country. 1 Q. Aberhart would be very much gratified if I would sign it. That was one illustration of the operation of compensated price. and during that period Austria experienced the most tremendous boom that has ever taken place there. a n d interviewed Major Douglas and had a talk with him. her national credit to capture external markets in one industry after another. But there have been various applications. although her costs may be low. there has been PO change in the constitution. Q. is that s o ? A. Aberhart f o r that. not turning over the pages. is in the situation in Japan a t the present moment. but I don't know i G a n d that is the Australian Commonwealth Bank. not by me." Would you just answer again. I halip very little doubt that Japan is systematically applying. "It is not correct. so f a r as I know. as f a r as I can see. t o which I referred in the House of Commons at Ottawa in 1923. BROWNLEE: Does your scheme. wherever necessary. and I did sign it. even in hotel registers. That is the position. I understand that i t is in Scotland. under the circumstances for which it was designed. raised the query. I shouldn't like to state it in exactly that way. C. and so far a s I know may be that a t the present time. and we had a talk. and presented t o him this pamphlet. he has developed a most lively interest in this subject. broadly speaking. this booklet was submitted to the secretariat.

Mr. unless one was in possession of concrete facts. What I said was that one could only. requires a consideration of concrete facts. Well. And you would consider t h a t i t would be a more scientific method-some Matheson. Yes. to maintain the selling price a t the point that would be best calculated to induce a large amount of consumption? A. in discussion of these matters. although a socalled publicly owned bank. That is o n account of its objective. Q. A. Q. Q. you said that you didn't want to be mishderstood. but I shouldn't like to be quoted as having said that that would be the technical method by which i t would be done. with regard to the price of wheat. aside from the just price. and I have not so f a r given-those facts consideration. from the point of view of Alberta. The Commonwealth Bank. Would you then consider that a preliminary step toward the establishment of the social credit idea would be the elimination of this mass of constitutional difficulties. Q. before anything can be done? A. and have made i t very difficult for us to put into effect such new idem as have been outlined by you. SHIELDS: Relative to the questions that were put forward by Mr. a compensated price. when an experiment along that line is tried. in view of the constitutional set-up. and not the so-called ownership. The question of just what is the best to do. Q. Q. Absolutely. &ggan. plan along those lines would be a more scientific method than subsidizing export by depreciation of national currency? A. and a national bank.singie institution which has had more devastating effect. you outlined to us how. in the circumstances. deal in generalities. and I am very desirous. on the Australian peoble. Mr. for a number of years I have been very much interested in Major Douglas' principle of social credit. and I am asking this question because. during the past decade. has consistently worked in the interests of international financiers. I really cannot give you a flat answer to that. I got a n understanding of your thought in that regard to be that the just price of wheat would be a fair average return. The just price would not have. or would include that? I t would most unquestionably include that. I do. that there was something that Alberta could do. that i t should have everg possibility of success. working in conjunction with the joint stock banks of Australia. Q. A. I don't say before anything can be done. The gen125 . the financial powers have quietly succeeded in getting various civilized nations to formulate laws. of the difference between the just price and the sale price. Q. instead of i n the province? A. Q. RONNINC: Major Douglas. of course. possibly. No. the experiment would stand a greater chance of success if instituted in the Dominion. I t is not a n answer which ought to be given except on a n exact knowledge of all the facts. Then one other question. than the Commonwealth Bank. that would be in the national interest. and it would include. Would you consider that. of course? k That is on account of its objective. Would that be made up by compensation taken out of the national credit? I n all probability. I n reply to a question by Mr. -4nd that selling price. and the whole question is the objective. Did you subsequently make a statement of what could be done? A. but i t is quite possible that action along those lines might be very desirable. A. a n y relation to the market price of wheat? . That brings me t o the next question.

but we have quite a s . our most sincere appreciation for the courtesy and good nature which he has shown in meeting us and speaking to us. to extend to him. because those a r e the present real powers. for the major part. I t is not confined t o the Conservatives by any means. because they are the bondholders. have been busy building trenches around their privileges for quite a time. and it was initiated by the Tories. . the Conservatives are taking such an interest in this scheme of yours? A. and the serrice of that national debt requires taxation. according to your statement. The taxes. The PREMIER: BTr. but I am informed that it is very difficult indeed to find any record of that debate. I am sure we will remember f o r some time the visit that he . I shouldn't like to be put in the position of defending the Conservatives or anybody else. Have you seen that chart of his? A. I am glad to say. Now. in the event that he does not appear before the committee again. then the big manufacturer. The national debt is created by a technical process. if you can get a popular agitation against any particular section of the population. because it provides the taxes to serve those interests. Q . and I notice quite a strong feeling among the more conservative elements in Great Britain that they have been led by the nose for a very long time. No. and the national debts. or the people interested in maintaining and consening this financial system. No. that about 1790 or something of that sort. as a system. then the shop-keeper.Q. in order to take the purchasing power to the consumer and the return to the producer. Now what happens is this: that those people are taxed.era1 answer is that I do not think the Dominion is much less under the control of international finance than Alberta is. I t was shouing how the credit u-ould be established. as well a s in answering the questions put t o him by the various members. and so forth. GIBBS: You told us that the international bankers. Aberhart was here. and there is perhaps a very direct technical reason for that: The banking system. I don't think it is. The real history of the Cromwellian episode is really the introduction of finance from the low countries into England. go directly into the coffers of the financial system. But there is a very interesting fact. am sure that the Major must be somewhat I weary as the result of the discussion so f a r this morning. and if you will study the history of the last hundred years you will find that one section or the other has been the cause of all the trouble. WHITE: When Mr. the real history of the struggle between what we may call the power of the Crown and the power of the Bank of England. and so forth. A. I haven't seen it. but it is a fact that the Whig Party'in England has always been associated with finance. on behalf of the members. there was a debate in the British House of Commons which lasted for several years. is all in favour of a tax on anybody. who for four or five years attacked the Bank of England. He has to leave this afternoon-I believe. we have friends in all parties. he had quite a chart. and how i t would circulate in what he called the blood stream. on the seven o'clock Canadian National train. I don't want to raise any party feeling about the matter. over this thing. I would like to take this opportunity. except by very prolonged research. I t is rather a strain t o sit for two hours and a half and deal with these questions.Mr. Mr.many friends among what would normally perhaps be called the reactionary parties as we have in the most advanced parties. they are the people who create war. Chairn~an. dates from that time. will always be supported by high finance. Any popular cry against anything except financial institutions. and I am informed-I don't state this a s a fact. I was wondering if that was perhaps an explanation of the fact that. which inevitably in the first place puts i t into the hands of the financial authorities. first i t was the landowners. as a result of that agitation: Now who gets the taxes? The people who complain don't get the taxes. What kind of a chart was it? Q.

is it definite that the committee is of the opinion that it is not necessary to have any more sittings? I presume we have all the information that is necessary? Douglas.) HOADLEY: Before we adjourn. if I can be allowed it. Is that correct? I a m speaking only of Major (Agreed. Hon. and you can decide for yourselves whether o r not you would like t o have the house adjourn a little earlier this afternoon. express your appreciation of his courtesy in coming to us. o r you can decide just how you wish to follow up the inquiry that has so f a r taken place. (Applause. but I am sure the Major mould feel that he would like a little interval before continuing. you will have an opportunity of doing so. in order that. ) The CHAIRMAN: Then the committee will stand adjourned till ten o'clock tomorrow morning.) I would suggest that the committee remain for a while. and I am sure that our very best wishes go with him on his journey on through C a ~ a d a and back home. (Continued applause. if you still wish to propound any more questions. I think that will conclude the session this morning. a t least. This concluded the taking o f evidence on the Douglas plan. as f a r a s the Major is concerned. Mr. and I am sure you will. M a j o r DOUGLAS: I shorld very much like the afternoon off. as you have already.has paid to us. The PREMIER: Well. .