Delphi Complete Works of Stephen Leacock, page 681
The whole province seems more or less bedded on minerals and oil. No one yet knows how great may be the latent resources of Alberta, how usable the coal of its foothills, the natural gas of its valleys, the oil buried below its plains. But in the general sense there is no doubt of the vastness of its unused heritage. If the Social Credit theory is based on the collective rights of the people to their common heritage, it is well grounded in Alberta.
The climate of the province is humane. There is bitter cold, hard and piercing and dry, fit to split the thermometer, but it is tempered by the soft spring wind and the early rains that blow from beyond the mountains, and wipe away the snows with the April tears of repentence.
Till the Canadian Pacific woke the West from silence, Alberta was a part of the vast, romantic and unknown West. Lieutenant Butler (Sir William Butler) crossed it in 1871 as Mungo Park might have crossed Africa. Its emptiness was inconceivable. “One may wander,” he wrote, “five hundred miles without seeing a human being or an animal larger than a wolf.”
With the railway the West opened up. With the nineteenth century it opened wide up. Here was a country where agriculture moved on a chequerboard, where ten-horse teams hauled ten-furrowed plows in fields so big that they disappeared over the horizon; a country where wheat was threshed before it was even dry. “The Granary of the Empire, Free Homes for Millions, God bless the Royal Family” — so ran the legend of the Arch at the Diamond Jubilee of 1897. After the turn of the century all the world poured in, — Germans, Ukrainians, a polyglot multitude mixed with an “American invasion” that moved from the deserted farms of Kansas like Mormons on the march. Even the Royal Family came. The Prince of Wales took a ranch.
Thus grew Alberta, or rather thus was Alberta raised like a circus tent in the shouting years before the War. Hand in hand with Saskatchewan it became a province in 1905, and from then until the Great War all was prosperity, advance, confidence with a braggart sense of unlimited greatness still to come. Even the War was expected to be only an interruption. It was expected that after Alberta had licked Germany the same procession of rushing immigration, roaring transport and mechanized farming would go clattering forward. Indeed it tried to. For many years after the war, the situation was full of hope and confidence. The census of 1921 showed a population of 588,000 with two twin rising cities, Calgary and Edmonton of about 60,000 each. The province shared to the full in the delusive hope of Empire settlement, of tidal immigration, of an unlimited world market of wheat. The public debt stood, in 1919, only at $34,000,000. Municipalities borrowed with ease in double-handfuls and paid on the nail in gold in New York. But with each successive year the clouds gathered. Immigration slackened and dried up at the source. Without immigration the railways could not function. Empty town-sites with miles of new side-walks looked out over empty sidings and empty sheds. The frame was too big for the picture. It fell out.
Hence Alberta went broke about two years ago. The post war wheat boom had lifted it away up and the depression threw it down and broke it. The old political parties vanished. Even the “United Farmers” looked too old fashioned.
The total public debt of Alberta, just before the famous Social Credit election of August 22, 1935, stood at about $150,000,000: before the War (1910) it had stood at $14,000,000, and even after the War, as already said, at only $34,000,000, in 1919. The Provincial current deficit for the three months before the election was nearly $1,000,000. What had been rich farms and magnificent ranches were overwhelmed in mortgage debts. Prices for farm produce had fallen beyond belief. Five years of drought had withered the grain and dried up the water supply. The dust blew where once the grain had waved. The people were weary of depression, worn out with debt and wistful for prosperity.
It was then fully realized for the first time how one-sided is the economic structure of the West, in older Canada, the pioneer lived on his own: he settled depression with an axe, was his own butcher and baker and what he hadn’t got he went without. His diversion was whiskey at 50 cents a gallon, and fighting in a tavern. As a motor car he had a buck-board and for a radio he talked to himself in the barnyard. Economically, you might hit him hard, but you couldn’t knock him out. But in the new West all was different. Farming had run overwhelmingly to one specialized industry, raising wheat on vast flat plains where machinery came into its own. The farmer no longer fed himself, never saw a hen and had for his barnyard a corrugated iron grain elevator.
No wonder that new winds of doctrine blew over the empty prairie. Theory lives best in a vacuum. Hence the increasing vogue of all sort of new theories of money, credit and social reconstruction. The doctrines of Major Douglas and others that filtered in under the name of “Social Credit” made an instant hit. The word “credit” was enough by itself.
In moments of national emergency a prophet is always raised up. In Alberta the provincial election of 1935 saw the raising up of a prophet whose name was William Aberhart and whose word was Social Credit and whose gospel a little handbook to be had at a cost of ten cents.
The Aberhart doctrine, or rather the doctrine of Social Credit in general, like all “people’s doctrines”, has something in it. It is based on the undeniable idea that no one of us brought anything into the world with us. Each of us has his natural claim to a share. We are, as it were, the joint heirs of a great estate, whereas our present social order dispossesses ninety-nine to instal one. We may imagine that, in a general way, of all the wealth produced in a year, a certain part is due to the original heritage, and each of us has the right to that whether we work or not. Rich or poor, wise or stupid, lazy or energetic — that much is ours. Call it, if you like, $25 a month.
The moment was specially fortunate for such a doctrine. The cry for people’s money had led the Dominion Government to establish a central bank, the Bank of Canada, and the West had been disappointed with it. The Alberta farmer understood that the business of a central bank was to lend money to anybody who felt he needed it. When he saw that it did not do that, he looked for quicker action.
There is a charming little French story which tells of a little Parisian boy, smitten with fever and delirium, calling for Boom-Boom, a clown whom he had seen at the Winter Circus. In despair they buy him a toy clown. But he cries still, “That’s not Boom-Boom”. Then they get the real clown to come — the real clown in private life, a grave, dignified gentleman; and still the child calls, “That’s not Boom-Boom”. The clown, a true artist at heart exclaims, “He’s right!” and disappears and returns in his clown suit, his cap and tassels, his mouth painted to the size of a letter-box. The child claps his hands with joy and shouts “Boom-Boom” and is saved.
So with Alberta. Sick with adversity, feverish with anxiety, it called out for “people’s money”, for “cash-for-everybody”, for “Boom-Boom”. The Government of Canada fetched to the bedside the Central Bank. But the sick province took one look at the stately form of the Governor of the Bank and cried out “That’s not Boom-Boom”! So then the election of 1935 brought Social Credit and the Rev. Mr. Aberhart, and the province rescued from its despair shouted “Boom-Boom, that’s Boom-Boom”!
Mr. Aberhart’s doctrine, in other words, was in its basis a theory of industrial society, such as philosophers have discussed ever since Plato.
But Mr. Aberhart had no intention of setting about his social credit attack with the slow approach, the sapping and mining, of the economic theorist. He proposed to use the axe. He proposed to swing it as did the famous Jack of the Beanstalk when he brought down the whole growth of the plant and with it the evil giant who had plagued his existence. Mr. Aberhart’s “evil giant” was the Eastern Moneylender, and down he must come.
In other words he proposed to solve the insolvable problem of Alberta debt by hammering it out of existence; putting the axe to it: as Carrie Nation put the axe to the Kansas saloons and the English suffragettes to the House of Commons. It is what has come to be called “direct action” and it works like a charm.
The Alberta debt was a jigsaw puzzle that wouldn’t fit. So Mr. Aberhart proposed to smash it. It was a contract that could not be paid, so Mr. Aberhart proposed to blot it out with tears: an oath that could not be kept: Mr. Aberhart would remove it with prayer.
Mr. Aberhart knew by instinct that the greatest ally that man can have is not physical power but the power of the spirit: the greatest force in politics is “religion”, the super-self that ceases to reason and fights in ecstasy. It has been always so. Normans who prayed the night before Hastings defeated Saxons who drank. Mohammed conquered his world with the single sentence “Allah illa Allah, — God is great”. Cromwell found that he must have men whose “hearts were in the cause”, and he gathered his iron men with Bibles under their breast-plates.
So came forth Mr. Aberhart as to a crusade, denouncing the Money Power. “In Canada,” he proclaimed, “money gets too much and man too little.” It was like Mr. Bryan’s America crucified on its cross of gold. Put it into simple language to mean that money borrowed at boom prices and paying its full interest in the pit of depression, no longer stands for a fair bargain, — and the idea is reasonable enough. Say it with prayers and it is overwhelming.
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There were great expectations and grave forebodings on the triumphant election of the Social Credit. It is said that many of the plainer people in the towns called next morning for their “social dividend” of twenty-five dollars. As for Mr. Aberhart, he found himself in the typically British situation, as old as Queen Anne, of being suddenly changed from opposition to office and having to “make good”. Fortunately there is also a British precedent as to what to do, namely, to do nothing. Mr. Aberhart announced that he must take “time to think”, a need he had never announced before. He began to show a strong desire to consult people, to visit Father Couglin, his “opposite number” in the United States, to send over to England for Major Douglas, the parent of Social Credit, and to go to Ottawa, the Mecca of the provincial politician. Meantime it was announced that it would take at least eighteen months to get the “social dividend” in working order.
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The “eighteen months” of Mr. Aberhart, — a phrase destined, I should think, to become historic, — have come and gone this spring of 1937. Mr. Aberhart has publicly announced the obvious fact that he has not yet been able to initiate the Social Credit system. On this his political enemies raised a shout that the thing was impossible and called on him to get out: and his political supporters and various English advisers tell him that the thing is easy, and shout to him to go on with it. Mr. Aberhart, knowing himself now to be a fact and everybody else a theory, sits tight. If we can’t have Social Credit, he says in effect, — let us have something else just as good. His peculiar “bulge” on the situation, — or is it “edge” they call it, — is that there is no party anywhere, in Alberta or near it, that would dare to propose to put back Alberta debt where it was.
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Meanwhile the moment is ripe for outside people of fair mind to ask just what has been done during the Social Credit regime. Of Social Credit itself there has been absolutely and literally nothing. The Act put on the statute book under the name of an “Act to Provide the People of Alberta with Additional Credit” (September 1936) is only a sort of emergency loan act. The registration (beginning August 10, 1936) of resident citizens entitled to the benefit of “dividends” was conditioned on the signing of a “covenant”. The pledges included “accepting Alberta credit and cooperating on production and prices”, in other words “letting the government run a man’s farm” and are not such as people on farms are apt to tolerate in North America. The government is welcome to run the mortgage; not the farm. So the pretentious “registration” and the “dividends” and the “covenant” have amounted to nothing and never will. The credit statute can be used as an act for making approved loans, — as has been done elsewhere for nearly half a century under Allotment Acts, Land Purchasers Act and such.
With that has come the really large step, — chief sin or chief merit of the regime, as you like it, — of the legislative reduction of debt by forced conversion. All the world knows in general terms what was done. The Provincial Securities Interest Act (June 1, 1936) cut the interest on the public obligations of Alberta and obligations guaranteed by the province to a new schedule of interest running at about half of the contracted interest (4.89 percent, to 2.50).
Moreover a Municipal Securities Act empowered all municipalities in the province to cut their interest to a flat 3 per cent. A few did; the larger ones not yet. The Reduction and Settlement of Debt Act (September 1936) provided that in the case of all “old debts” (those prior to July 1, 1932) all payments hitherto made as interest should count as a repayment of principal and the balance left, if any, be payable in instalments in ten years without further interest. On debts since July 1, 1932, the maximum interest was put at 5 per cent., and paid beyond that to count as repayment of principal.
Finally the government issued the Alberta Prosperity Certificate, a bright little imitation of paper money lacking only “legal tender”, a body without a soul.
The Prosperity Certificate has now pretty well run its course, or at any rate its first course. Let us look back a minute, — before talking of the debt and see what happened to it.
The Alberta “Prosperity Certificates” were made up to look like “stage money”, plentifully sprinkled with dollar marks and a framework of future dates on the back. They were issued by the Government and handed out as unemployment relief and in various other ways. In order to give them “velocity” in circulation they were made too hot to hold: the possessor must refresh them every Wednesday by gumming on its proper space a stamp that costs two per cent. of the certificate. They were not, and are not, “legal tender”, but the Government announced that it would redeem them at intervals for “all and sundry” — and added “for good and sufficient reasons”. As between citizens, anyone could, and can, take them as a payment if he wishes. In many places the first batch “sold” like hot cakes — as souvenirs. After that circulation became restricted. The post office (that is the Dominion Government) refused them; so did all railroad, express, telegraph, insurance and similar companies. Theatres and moving-picture houses did not take them. Country storekeepers accepted them readily for purchases; but they would accept a French assignat of 1789 or a George Washington continental dollar of 1778 rather than not make a sale. Nearly all big stores refused them: the bigger the store, the firmer the refusal. Companies of other provinces, unless feverishly eager for business, refused them entirely, or took only a percentage. But the unemployed, not looking a gift certificate on the back, reached out for them. Meanwhile the courts began “to sit” on them. A court at Edmonton (open to appeal) issued an injunction forbidding the city to accept them from the province as its unemployment subsidy. The province replied with a validating Act.
But the court never needs to pursue its processes and appeals to the end, for the government, having decided to redeem the certificates has cashed in so many (viz. $295,791 out of $325,644, as reported on Jan. 1, 1937) that the rest offer no problem, — amounting only to $29,853. Proceeds from stamp sales were $20,652. Finally, legislation of April 1937 ended their existence.
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The public debt is a different matter of which the end is not yet, not by a long way. The Supreme Court of Alberta has declared, in two judgments of February 1937, that the province has no power to lower interest. The province answered with a “moratorium” and with a new statute of April 1937 cutting the principal of debts instead of the interest. This is just as easy to rule out. It is only a matter of words.
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In summarizing and judging the existing situation, one may say, first, that in all these matters of the disputes, denunciations and recriminations of parties, it is better for us in Canada if we try to see not the harm but the good in one another: not to denounce but to comprehend. In every great movement that enlists the sympathy of thousands of disinterested persons there must be an element of right. So it must be, not with Social Credit, but with the Social Credit movement in the West. Social Credit in the sense of economic theory is mere wind, words and nothing else. It creates a vague ideal of “purchasing power” and wishes that everybody might have lots of it. So do I. I’d buy a new Fedora hat with it this morning. The demand that “purchasing power” must be given to the people means nothing more than that the people ought to be better off, and that society is all wrong till they are. All sensible people think that. But there is no way to make an act of the legislature to sprinkle all the people with “purchasing power” as you sprinkle a lawn with a hose.
All that, I propose to examine in the next chapter. In that sense Social Credit is not only dead but still-born: not only failed but never started.
As to the Prosperity Certificates, the only advantage of their issue was that the expedient saved for the time being that much additional borrowing. The disadvantage is that the episode further impaired Alberta credit and leaves the temptation to make more issues.
The debt reduction acts must remain in suspense until the Privy Council decides on them, — in 1938 or later. As is usual with decisions turning on the interpretation of economic and fiscal powers under a federal constitution, the Court can decide either way. You can argue that the power must belong only to the Dominion because the Dominion has control of interest (B.N.A. Act 1867 (91)): or that it belongs to the province because the province has sole control of “proper and civil rights within the province” (same statute (92)). The one clause is misty in meaning: the other is a dense fog. You can grope as you like, argue and choose as you want. It’s just like splitting a straw, — equally easy north and south or east and west. Anybody familiar with the American cases, the Income Tax Case in Grover Cleveland’s time, the Insular Tax cases, the hundred and one Interstate Commerce and Trust cases and now the famous Gold Acts and the NRA and the other cases, — knows how easily judges can disagree, what mountains of argument can be piled up, what years of delay may elapse over matters that common sense could settle with a pen and ink in five minutes. Or compare, if one will, the recent Privy Council decision invalidating the labour and wages legislation of the Dominion Parliament of 1935. ‘Heads or tails’ would do as well.
