“Why,
of course! Just as in your country – or in any other part of the civilized world
for that matter. The degree of a country's civilization is always gauged by the
size of its debt to the bankers.”
14. The wolf devours the
lambs
“And that's a healthy monetary system, Mr. Oliver?”
“Gentlemen, all sound
money is based on gold, and it comes from the banks in the form of debts. The
national debt is a good thing. It keeps men from becoming too satisfied. It
subjugates governments to the supreme and ultimate wisdom, that which is
incarnate in bankers. As a banker, I am the torch of civilization here on your
little island. I will dictate your politics and regulate your standard of
living.”
“Mr. Oliver, we're simply
uneducated folks, but we don't want that kind of civilization here. We'll not
borrow another cent off of you. Sound money or not, we don't want any further
transactions with you.”
“Gentlemen, I deeply
regret this very ill-advised decision of yours. But if you break with me,
remember, I have your signatures. Repay me everything at once — capital and
interest.”
“But that's impossible,
sir. Even if we give you all the money on the island, we still won't be square
with you.”
“I can't help that. Did
you or did you not sign? Yes? Very well.
“By virtue of the sanctity
of contracts, I hereby seize your mortgaged property which was what you agreed
to at the time you were so happy to have my help. If you don't want to serve
willingly the supreme authority of money, then you'll obey by force. You'll
continue to exploit the island, but in my interests and under my conditions.
Now, get out! You'll get your orders
from me tomorrow.”
15. Control of the press
Oliver knew
that whoever controlled the nation's money, controlled the nation. But he knew
also that to maintain that control, it was necessary to keep the people in a
state of ignorance, and to distract them by a variety of means.
Oliver had observed that
of the five islanders, two were conservatives and three were liberals. That much
had evolved from their evening conversations, especially after they had fallen
into slavery. And between the conservatives and those who were liberals, there
was a constant friction.
On occasions, Harry, the
most neutral of the five, considering that all had the same needs and
aspirations, had suggested the union of the people to put pressure on the
authorities. Such a union, Oliver could not tolerate; it would mean the end of
his rule. No dictator, financial or otherwise, could stand before a people
united and educated.
Consequently, Oliver set
himself to foment, as much as possible, political strife between
them.
The refugee put his press
to work, turning out two weekly newspapers, “The Sun”, for the Liberals, and
“The Star”, for the Conservatives.
The general tenor of “The
Sun” was: “If you are no longer master, it is because of those traitorous
Conservatives who have sold out to big business.”
That of “The Star”: “The
ruinous state of business and the national debt can be traced directly to the
political responsibility of those unmentionable Liberals.”
16. A priceless bit of
floatsam
One day, Tom, the prospector, found on a small beach, hidden by tall
grass at one end of the island, a lifeboat, empty except for a trunk in good
condition lying in the bottom of it.
He opened the trunk. Among
the articles within, a sort of album caught his eye: “The First Year of Social
Credit”. Between the covers he found the first of a Social Credit
publication.
Curious, Tom sat down and
began to read the volume. His interest grew; his face lit up.
“Well, just look at this!”
he cried out loud. “This is something we should have known a long time
ago.”
“Money gets its value, not
from gold, but from the products which that money buys.
“Simply put, money should
be a sort of accountancy, credits passing from one account to another according
to purchases and sales. The sum total of money will depend upon the sum total of
production.
“Each time production
increases, there is a corresponding increase in the amount of money. Never at
any time should interest be paid on new money. Progress is marked, not by an
increase in the public debt, but by the issuance of an equal dividend to each
individual... Prices are adjusted to the general purchasing power by a
coefficient of prices. Social Credit...”
But Tom could no longer
contain himself. He got up and set off at a run, the book in his hands, to share
this glorious discovery with his four comrades.
17. Money — elementary
accounting
So Tom
became the teacher. He taught the others what he had learned from that God-sent
Social Credit publication.
“This,” he said, “is what
we can do without waiting for a banker and his keg of gold, nor without
underwriting a debt.
“I open an account in the
name of each one of you. In the right hand column are the credits which increase
your account; to the left are the debits which subtract from your
account.
“Each wants $200 to begin
with. Very well. We write $200 to the credit of each. Each immediately has
$200.
“Frank buys some goods
from Paul for $10. I deduct $10 from Frank, leaving him $190. I add $10 to Paul,
and he now has $210.
“Jim buys from Paul to the
amount of $8. I deduct from Jim $8, leaving him $192. Paul now has
$218.
“Paul buys wood from Frank
for $15. I deduct $15 from Paul, leaving $203. I add $15 to Frank's account, and
it goes back to $205.
“And so we continue; from
one account to another, in the same fashion that paper banknotes go from one
man's pocket to another's.
“If someone needs money to
expand production, we issue him the necessary amount of new credit. Once he has
sold his products, he repays the sum to the credit fund. The same with public
works; paid for by new credits.
“Likewise, each one's
account is periodically increased, but without taking credits from anyone, in
order that all may benefit from the progress society makes. That's the national
dividend. In this fashion, money becomes an instrument of service.”
18. The banker's despair
Everyone
understood. The members of this little community became Social Crediters. The
following day, Oliver, the banker, received a letter signed by the
five:
“Dear sir! Without the
slightest necessity you have plunged us into debt and exploited us. We don't
need you anymore to run our money system. From now on, we'll have all the money
we need without gold, debts, nor thieves. We are establishing, at once, the
system of Social Credit on the island. The national dividend is going to replace
the national debt.
“If you insist on being
repaid, we can repay you all the money you gave us. But not a cent more. You
cannot lay claim to that which you have not made.”
Oliver was in despair. His
empire was crumbling. His dreams shattered. What could he do? Arguments would be
futile. The five were now Social Crediters: money and credit were now not more
mysterious to them than they were to Oliver.
“Oh!” said Oliver. “These
men have been won to Social Credit! Their doctrine will spread far more quickly
than mine. Should I beg forgiveness? Become one of them? I, a financier and a
banker? Never! Rather, I shall try and put as much distance between them and me
as I can!”
19. The fraud unmasked
To protect themselves against any future claim by Oliver, our five
men decided to make him sign a document attesting that he again possessed all he
had when he first arrived on the island.
An inventory was taken;
the boat, the oars, the little press, and the famous barrel of gold.
Oliver had to reveal where
he had hidden the gold. Our boys hoisted it from the hole with considerably less
respect than the day they had unloaded it from the boat. Social Credit had
taught them to despise gold.
The prospector, who was
helping to lift the barrel, found it surprisingly light for gold. If the barrel
was full, he told the others, there was something in it besides gold.
The impetuous Frank didn't
waste a moment; a blow of the axe, and the contents of the barrel was
exposed.
Gold? Not so much as a
grain of it! Just rocks — plain, worthless rocks! Our men couldn't get over the
shock.
“Don't tell us that he
could bamboozle us to this extent!”
“Were we such muttonheads
as to go into raptures over the mere mention of gold?”
“Did we mortgage all of
our possessions for a few pieces of paper based on a few pounds of rocks? It's a
robbery, compounded with lies!”
“To think that we sulked
and almost hated one another all because of such a fraud! That
devil!”
Furious, Frank raised his
axe. In great haste, the banker has already taken flight towards the
forest.
20. Farewell to Salvation
Island
After the opening of the barrel, and the revelation of his
duplicity, nothing further was heard of Oliver.
Shortly after, a ship,
crusing off the normal navigation route, noticed signs of life on this uncharted
island, and cast anchor a short distance offshore.
The men learned that the
ship was en route to America. So they decided to take with them what they could
carry, and return to the United States.
Above all, they made sure
to take back with them the album, “The First Year of Social Credit”, which had
proven to be their salvation from the hands of the financier, Oliver, and which
had illumined their minds with an inextinguishable light.
All five solemnly promised
to get in touch with the management of this paper, once back in America, and to
become devoted and zealous apostles of the Cause of Social Credit in their
country.
From
parable to reality
A debt-money
system
The debt-money system introduced by Oliver
into the Salvation Island made the little community sink into financial debt in
proportion as it developed and enriched the island by its own work.
This is exactly what happens in our civilized
countries, is it not?
Canada of today is certainly richer, in real
wealth, than it was 50, 100 years ago, or in the pioneers' age. But compare the
national debt, the sum of all public debts of Canada today with this sum 50, 100
years, three centuries ago!
Yet the Canadians themselves produced this
enrichment by their labour and their know-how. Then why should they be
collectively indebted for the result of their own activities?
For example, consider the schools, the
municipal aqueducts, the bridges, roads and other fabrics of public character.
Who build them all? Builders of the country. Who supply them with the needed
materials? Manufacturers of the country. And how come they can be employed in
public works ? Because there are other kinds of workers who produce food,
clothes, shoes, who supply all the things and services required for the wants of
the constructors and manufacturers.
Thus the whole population of Canada by its
work of different kinds, produce all those developments. If we must obtain goods
from abroad, we send other goods abroad in counterpart of them.
Now, what do you see? Everywhere the citizens
are taxed to pay those schools, those hospitals, those bridges, roads and other
public works. The Canadians, as a collectivity, are thus compelled to pay what
they produce as a collectivity.
You pay much more than the double
price
And this is not all. The population is made
to pay more than the price of what it produced. Their own production — a real
enrichment — has become for the Canadians a debt burdened with interest. When
years add to years, the sum of the interests can equal or even exceed the amount
of the debt imposed by the system.
It happens that the population may have to
pay two, three times the cost of what its members produced.
In addition to the public debts, there are
industrial debts, also loaded with interests. They compel the manufacturers and
contractors to increase their prices beyond the cost of production, in order to
reimburse the capital and the interests; otherwise they would become insolvent,
bankrupt.
Both public and industrial debts are paid,
plus interest, by the Canadian population, to the financial system. We pay taxes
for the public debts, and a surplus of price for the industrial debts. Prices
are swelling while the purse is flattened by taxes.
A tyrannical system
These and many other facts are indicative of
a money system, a financial system which controls instead of being a servant; a
system to dominate the people — as Oliver dominated the fellows of the Island
before they rebelled.
And if the money masters refuse to lend, or
if they make their conditions unbearable for the public bodies or for the
manufacturers, what happens? It happens that the public bodies give up many
projects, no matter how urgent; and the manufacturers give up development or
production plans that would answer to real needs of Canadians. This is a cause
of unemployment. And those who still have something, or who earn a salary, must
be taxed to prevent the unemployed from starving completely.
Can you imagine a more tyrannical system,
with so baneful effects on every Canadian?
A bar to distribution
And this is not all. Not only the money
system indebts the producers, or paralyzes the production it refuses to finance,
but it is a wretched financial tool for the distribution of the goods.
Notwithstanding the fact that stores, shops
and warehouses are full, and that everything is at hand for an even greater
production, the distribution of the goods already produced is stinted.
You can obtain only what you can pay. In face
of an abundant production, there should be an abundance of purchasing power, of
money in the wallets of the people. Such is not the fact. The price of the
finished goods is always higher than the amount of money distributed as
purchasing power in the course of their production. This is inherent to the
accountancy of the present system of finance which has no mechanism to fill the
gap.
The capacity to pay is not made to equal the
capacity to produce. Finance and reality do not work at the same rate. Reality
means an abundance of goods easy to produce. Finance means a lacking money hard
to obtain.
To correct what is wicked
Thus the present money system is truly an
oppressive one, when it should be a system of service.
This does not mean that we must do away with
it, but we must correct it. The application of the financial principles known as
Social Credit would make this correction magnificently. (Do not confound Social
Credit with the political party which usurps that name while pursuing other ends
and practising an adverse policy.)
The principles of Social Credit, when
applied, would make the money system a servant instead of a master. They were
discovered and enunciated by a genius, C. H. Douglas (deceased in 1952). His
first writings on this subject were published in 1918.
Not a Political Party
The first idea that comes to the mind of too
many people living in Canada, when they hear the words Social Credit, is the
idea of a political party. But no. Social Credit is not a party, although there
was a party by that name. Social Credit is no more a party than Christianity is
a party, even if, in some countries you find political parties with such names
as Christian Democrats, Christian Party, Christian Center, etc. A political
party exists purposely to seek power, to be or strive to be the group that rules
the country.
Social Credit works in the very opposite way.
Social Credit will set the individual free; it will place the individual in a
situation where he can himself be the ruler of his own life. Social Credit will
thus distribute power to individuals not the power to boss their neighbours, but
the power to order the goods they want from the potential production of their
country.
Social Credit. Exact. Logical.
Humane
Social Credit considers realities. It refuses
to be hypnotized by the halo with which finance has been surrounded.
The economic realities are, on one hand, the
production; not only the existing production, but the production immediately
possible, the production capacity; and they are, on the other hand, the human
needs.
Social Credit gives priority to the realities
over the financial signs that are not realities, that must simply represent, and
faithfully represent, the realities.
Real credit and financial credit
This is why Social Credit makes a distinction
between real credit (a reality) and financial credit (a representation).
The word "credit" comes from the Latin word
"credere" and bears the idea of confidence. Even in everyday language, to give
credit to someone, is it not to indicate that we have confidence in him?
Social Credit calls real credit of a country
what really gives confidence in that country, confidence that one can live there
without too much difficulty. The real credit of a country is its production
capacity. It is its degree of possibility to produce and deliver the goods to
the needs.
And Social Credit affirms that financial
credit must be the exact representation of the real credit.
It is therefore the production capacity that
must determine the movement of finance. It is absolutely not for finance to
command, paralyze or limit the production capacity.
This is why Social Credit demands the
establishment of a credit office that would keep an account of national (or
provincial) credit. Any production, those of consumption goods and those of
capital goods, would then be entered as an increase of wealth. And all
consumptions (or destruction, or depreciation) would then be entered as a
decrease of wealth. The net increase in wealth would be production minus
consumption.
With very few and passing exceptions where a
country would live at the expense of another, the production of a country
surpasses its consumption. The country is becoming richer. It is therefore
absurd to say that it is going into debt. The public debt is an absurdity.
And when a country is getting richer, its
citizens must certainly draw advantage of it. This is what Social Credit
recognizes, when speaking of a dividend to all, instead of debts and taxes on
everyone.
Money without inflation
The present system is subject to inflation.
Inflation means rising prices.
When money cannot begin without, as today,
creating a debt, it is necessary that ways be found to draw from the public more
money than there was put into circulation, so as to refund the debt plus the
interest of the debt. Whence taxes, that are added to prices or that diminish
the purchasing power before the prices. Whence also increases of prices by
industrials, who must draw from the public only the money to pay for the
products, but also for the financial charges, the interests on the industrial
loans.
Social Credit would suppress this cancer,
this tumor upon the prices, since the production would be an increase of wealth,
and not an indebtedness.
And, Social Credit would lower the prices to
be paid by the buyers, since it would have the community pay only what it
consumes, and not all what it produces.
If, as an example, in the whole country, the
consumption was only equal to three quarters of the production, the buyers would
only pay, on any article bought by them, only three quarters of the accounting
price. The Credit Office would take care of compensating the retailer so that he
may recuperate all of his accounting price.
This means that the amounts of money included
in the prices, but not having reached the hands of the public, or directed
towards saving or investment, are not applied to the purchase of the production,
would be by the organism of credit replaced to the benefit of those who are in
need of the products. This would prevent the accumulation of products in the
face of needs. And the mechanism to do it would have the advantage of operating
with a decrease in prices, therefore in eliminating all possible inflation.
A dividend to everyone
The periodic dividend to everyone,
recommended by Social Credit, is also in conformity with the economic
realities.
The modern production, in fact, is more and
more the result of applied science, of inventions, of improvements in production
techniques, and of all these things that constitute a common good: an heritage
transmitted and increased from one generation to the other.
The modern production is less and less the result of individual labour.
Hoping to distribute the production only
through the reward of human labour, is therefore contrary to the facts. It is at
the same time impossible, for the money distributed as recompense for work can
never buy the production that contains other elements in its prices.
Seeking salary increases with decreases in
human labour, is also to change the meaning of the word salary. It is no more a
recompense for work; it is the inclusion in the salary of the hired persons of
what should be a dividend for all, since it is the fruit of progress and not of
labour. This deviation is a hindrance to the desired goal, since in becoming a
salary instead of remaining a dividend, these additional amounts go into the
prices.
Social Credit would distribute the dividend
to everyone, directly, without charging it to industry. It would truly raise
everyone's purchasing power.
Besides being the recognition of a very
productive community capital, this social dividend would at the same time be an
excellent way of satisfying the primitive destination of the earthly goods.
"Earth and its riches were created for all men" (Pius XII).
This is totally ignored by the present economic regime in its financial
technique of distribution.
Social Credit would thus directly establish
an adequate repartition of the goods of nature and of industry, instead of
leaving the task to the surgery of taxation, that amputates and grafts
continually, without ever healing the disease.
A share to each and everyone, guaranteed by
the dividend to each and everyone from birth till death; and this share should
be sufficient to at least insure what is necessary for life.
Louis Even’s book, “In This Age of Plenty”, was published in Polish in 1993 by Bishop Zigniew Jozef Kraszewski, then Vicar General of the Diocese of Warsaw-Prague, Poland. (Note: Bishop Kraszewski died on April 4, 2004.) Here is the translation from the preface to Louis Even’s book, written by Bishop Kraszewski:
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