People whom I won't name but who should know better say that the Prosperity Certificates that Aberhart 's government distributed after coming to power in 1935 were a failed experiment or even struck down by responsible government bodies. Some criticize him for breaking his promise to issue free money while almost at the same time saying when he did issue money it did no good.
Can you reasonably say that the government's distributing of $25 per month to each Albertan would merely create inflation while at the same time berating it for breaking its promise to give out $25 per month?
Aberhart did make that promise during the lead-up to the 1935 election although not that the payments would start right after the election but within 18 months of election.
His opponents - the Liberals, Conservatives, UFA and Labour - would have looked pretty silly in the lead-up to the 1935 election to stand up in front of crowds of homeless unemployed, struggling farmers and almost-broke business people and say that Aberhart's promised pay-outs would merely create inflation. Perhaps some did, Likely some newspapers took missives from local Chambers of Commerce and printed such information. People's response to such ivory-tower predictions is clearly shown in the history books - Social Credit swept to power, going from zero seats to vast majority control of the legislature.
SC candidates received a majority of votes (of first or later choices under the Alternative Voting used at the time) in all but one rural district. The only other opposition was elected through the very fair Single Transferable Voting system used in Edmonton and Calgary, where the Liberal and Conservative vote was not submerged under the SC juggernaut but allowed its fair share of representation at the district level.
Aberhart was seen as being on the side of the ordinary Alberta in a way that Brownlee ((and Reid's) UFA and the old-line Liberal and Conservative were not. Although his Social Credit proposals were poorly thought out and confusedly expressed, his personal leadership style was authoritarian and domineering, his religious dogmatism scringe-worthy in the present age, he was promising to free up money when it was extremely tight, to keep farm families on their farms, to take rights and privileges away from the powers that be and give Alberta working and farm families some degree of dignity and justice.
His government's issue of Prosperity Certificates was a part of this effort. Poorly-based criticisms of them are refuted below. They seem to arise less from knowledge of his intent or his government's problems or Depression realities than from cynicism against an odd government trying an unusual technique to address a situation faced by many that was so bad it is almost unimaginable today.
Firstly, we should applaud any government that works to address social problems by establishing a basic guaranteed income.
Secondly, the Prosperity Certificate was based on clear philosophical principle. All of us owe a great deal to the social capital that has been built up by generations of workers and thinkers before us and to the contributions made in the past and in the present by millions of other people. A way to show this is to ask if you were set loose in the woods with only a hatchet, how long would it take you to send your first email? Aberhart's government said as each Albertan was contributing to this great mass of wealth, each was due payment for their part of the whole. This taken far enough would have had the benefit of seeing that unemployment caused by technological change did not result in poverty. A very fair way to look at things.
Thirdly, those who disparage Aberhart's "funny money," saying for example, simply printing money and pumping it into the economy does nothing but trigger inflation, miss the reality of Depression realities. People did not have money. Sellers could not find buyers, not because people did not want to buy but because they did not have the money. Prices were shrinking, further reducing profits and wages. Inflation was the least of the worries. A little price stabilization or even inflation would not have been a bad thing. And I would like to see you go up to a hungry family buying bread with a government payout and tell them they are merely creating inflation.
Fourthly, some mix Aberhart's funny money with its attempt to regulate banks.
Some say Aberhart had no constitutional right to issue money. If Canada Tire has the right to issue its own money, how can you stop a provincial government from doing so? Even a couple Alberta municipalities issued their own currency in an effort to put purchasing power in the hands of impoverished consumers.
While a provincial government has the right to print its own money, Banks are constitutionally under federal jurisdiction and Aberhart was stopped in his first try at this. But he did not give up -- he encouraged credit unions as mentioned in the Servus ads on television today. He also created his own provincial bank. The Alberta Treasury Branches still operate today and are now the only public banks in North America that serve the public.
And people-oriented provincial government have found ways to regulate banks, at least their foreclosures on property. The United Farmer government that preceded Aberhart's government and the Tommy Douglas government in Saskatchewan, like Aberhart's, forced banks to take a lighter hand on throwing farm families and city dwellers out on the street. Under Aberhart's policies, many banks closed up their doors in rural areas of Alberta. Aberhart opened ATB offices in those communities and life carried on. We don't need private enterprise if government itself is enterprising.
Fifthly, it is even said that the funny money was "a sort of imaginary money replacement backed by thin air ...not real currency... retailers refused to accept them."
A. How can something you can touch be imaginary? Samples of prosperity certificates are still around in archives and home collections today. They are not imaginary.
B. What exactly backs up the currency we use today? Not gold or silver. Just general acceptance.
C. if large stones are recognized as currency in some South Sea islands, how is the funny money not real currency?
D. True that not all retailers accepted the currency but many did. Often in rural settings, money does not pass from consumers to retailers but between farm families. An economy is more than just exchanges between retailers and consumers. There are many accounts of passing the certificates among farmers, the oddness of the exchange, but not any perceived uselessness, making them memorable.
And some retailers did accept them. The late and lamented Army & Navy Stores advertized actively that they accepted the bills. Small-town shopkeepers also seemed happy to derive the benefit of selling goods for the bills. Bruce Allen Powe, author of The Aberhart Summer, did his thesis on Aberhart's financial policies. He proved that the Prosperity certificates did circulate and did allow the exchange of goods and services. Although he said many were eventually kept out of circulation as souvenirs. (His thesis available at the Legislature Library).
To be fair, Aberhart's Prosperity Certificates were flawed for reasons not identified by those who disparage them.
One had to affix a one-cent stamp to each dollar bill each week. These, as stamps do in dusty Alberta, sloughed off and came loose.
Also the government was cash-strapped and needed Canadian currency so refused to accept Prosperity certificates for payment of taxes. This seemed hypocritical but does not take away from the benefits many impoverished families received from the government's issuing of free money.
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