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Tom Monto

Alberta Farmers, government loans and Social Credit

Updated: Apr 25, 2021

1904 Federal election - Strathcona federal riding --

Colonel Gregory ran under the auspices of the Lacombe-based Farmers Association of Alberta. He spoke in favour of nationalization of the railways, protection for farmers and government loans to farmers. (Edmonton Bulletin, July 29, 1904)


Government loans, loans offered at lower interest rates than the private banks were demanding, was a major demand of farmers in those days when capital investment in pioneer farms was necessary.


W.L. Morton in his book The Progressive Party in Canada noted that in Alberta the difficulties of a debtor and agrarian frontier, aggravated by post-war deflation and the closing of the U.S. market to agricultural produce, were particularly acute. and the province's political culture had been influenced by the teaching of monetary reformers of the U.S. and Great Britain. (p. 185)


Alberta attracted immigration of reformers such as J.W. Leedy, former Populist governor of Kansas who took up a farm in Alberta in 1908. As governor, he had instituted a network of small rural banks, taking some power away from the private banks. (Grain Growers Guide, March 8, 1916)


Leedy "stumped" the province (giving speeches to rural gatherings from the tops of tree stumps) in the cause of cheap loans and local banks.


(At the time Leedy as governor was leading the crusade for cheap money in Kansas, there was a movement afoot in Canada in the name of the same cause. A 1898 publication Cheap Money for Farmers presented BC Premier Turner's call for mutual credit associations. And a bit later, the 1913 publication Cheaper Money for Agricultural Development in Saskatchewan. Speech by Premier Walter Scott also was published in pursuit of the same goal. The former is available for perusal on the CIHM website; the latter is merely listed in Peel's PP website.)


Calgary labourite minister Bill Irvine, later MP, also spoke on the need for monetary and bank reform. He was known to say that those who thought they could have social credit without socialism were just as wrong as those who thought they could have socialism without social credit. His newspapers The Nutcracker and The Alberta Non-Partisan introduced the theory that lack of purchasing power was what created under-consumption, an imbalance of supply and demand that caused depressions. (Morton, Prog. Party, p. 185-186)


C.W. Peterson, of Calgary's Farm and Ranch Review, also gave space in his paper for consideration of credit and money.


So-called soft money was also publicly endorsed by George Bevington. This self-taught financial expert and reformer was a force for monetary reform within the UFA in the 1910s and 1920s. He farmed just west of Edmonton. (Bevington Road in west Edmonton is named after him).


He carried on an important debate with a bankers' representative at the 1919 UFA convention. (UFA leader Henry Wise Wood was conservative in these matters. He authorized the UFA to publish and circulate the bankers' rep's statements but not Bevington's.) Later, Irvine as MP invited Bevington to give evidence to a Committee of the House of Commons on the issue.


Edmonton's leading photographer Ernest Brown also endorsed calls for money/banking reform. The small newspaper he published, The Glow-Worm, issued calls for change.


Liberal MLA Alwyn Bramley-Moore and other prominent reform-minded Albertans were part of a fact-finding commission on the issue. They reported that there was great need for the kind of low-interest loans that had been brought into use in New Zealand. New Zealand is now admired for its fair electoral system of proportional representation, but since the early 1900s it has been admired for its public services and its "gas-and-water" socialism - municipal ownership of services where required, but with no great Marxist ideological principle.


(Henry Marshall Tory authored the 1914 "Report of the Alberta commissioners on the American Commission for the Study of Agricultural Credit.". Tory, president of the UofA 1908-1928, is the namesake of a prominent building on the UofA campus.)


New Zealand's electoral system is Mixed Member Proportional. Recent moves have been made to bring in Single Transferable Voting at the city level, where MMP is not so practical.


Bramley-Moore died fighting in WWI.


He is best remembered for his 1911 book Canada and her Colonies, which Ted Byfield and others took up in the 1980s/90s as proof of their charge that Alberta was being ripped off by the federal government. (The book is available for reading on the Peel's Prairie Provinces website.)


But I happened to meet Alwyn's two daughters in the 1990s. By then they were very old. Both never married -- their sweethearts were killed in WWII.


They told me that Alwyn, if he had been still alive, would have complained of having his views mis-interpreted that way.


After all, Bramley-Moore was a reform-minded Liberal, not a pro-business Conservative.


Byfield and the others of course see the federal government as the threat to prosperity in the West, not U.S. oil corporations that skim off the most profitable resources and disappear again, leaving pollution and despair behind.


In Bramley-Moore's era, before Big Oil took over, it was the CPR and Eastern-based banks that exploited the West for their own profit, taking wealth out of the West for faraway use. (But his book Canada and Her Colonies appears not to mention farm loans or government credit. Perhaps only later did he realize the threat that corporations posed to the peaceful and rational development of the West.)


And of course, it was private banks that put money in the Conservative Party's electioneering fund while it over-charged farmers so it could pay big dividends to its stockholders.


New Zealand had shown the world that governments could economically provide low-interest loans to farmers with general betterment to society as a whole.


Bramley-Moore's cries for monetary reform and the general despair of hardworking farmers made receptive ears and minds to discussion of Social Credit in the 1920s. Calgary Labour MP William Irvine is credited with helping popularize Social Credit on the Prairies. As MP, he organized a committee to investigate banking practices. He invited testimony from Major C.H. Douglas, author of many books on Social Credit, George Bevington and a Neal East.


Neal East is described as "another Albertan reformer," according to author W.L. Morton. I don't know who this is. He may have been related to the East brothers -- Elisha and James -- who served on Edmonton's city council. One was a pro-labour Social Creditor; the other was a pro-SC labourite.


Irvine as MP warned of the need for reform and for proper government supervision of the private banks. The Liberal government took no action. The collapse of the Home Bank not long after proved the value of his warnings, when 60,000 struggling families lost their savings.


(Here's how it looked in 1924:

"Mayor Henderson arrived home to Fernie from Toronto where he had been as a special representative of the Home Bank depositors of Fernie and Blarimore [who lost all their savings in the collapse].

Henderson is somewhat optimistic about the final outcome of the controversy that is being carried on in the House of Commons and is confident that some measure of relief will be passed in the present session of the House.

He speaks glowingly of the fight being put up in behalf of the depositors by Mr. William Irvine, member for East Calgary." (Blairmore Enterprise, April 10, 1924)


See also the full-page excerpt from Irvine's House of Commons speech on the Home Bank fiasco in the April 17, 1924 Blairmore Enterprise.)


Irvine's fight showed the value of even a single Member standing up for a public cause. That kind of minority representation is the hallmark of proportional representation (just as majority representation is). Both are not consistently produced by our winner-take-all First past the post system. Without Irvine's voice, the Alberta depositors who lost their savings would have had no advocate in the House of Commons calling attention to their plight. Just as without Grant Notley's presence as sole NDP MLA in the Alberta Legislature from 1971 to 1982, there would have been no advocate in the Legislature to speak on behalf of Alberta workers and struggling farmers. FPTP did at least give those two seats, but the level of support for their respective parties should have given that section of the voters even more seats proportionally.


When the Great Depression caused the impoverishment of millions, and revealed the failing of the capitalist system, and of private control of credit, money and loans, the Social Credit movement took off.


William Irvine and Henry Spencer, also later an MP, worked together for monetary reform and establishment of Canadian Monetary Reform League in 1932. (info in Glenbow M-1157-24)


About that time, Calgary school principal and pulpit-pounder William Aberhart discovered the writing of Maurice Colburne and Major C.H. Douglas, became a convert to Social Credit and, Aberhart being Aberhart, founded his own group led by himself. Three years later Albertans elected the first Social Credit government in the world, with Aberhart as its premier.


There was also the Free Economy League of Canada of 1933. A file at the Glenbow (M-1157-48) contains suggestions for changes in Alberta’s economic system by using the Gessell economic system plus an example of a “currency” note that could be used. This system of stamped certificates was not part of Major C.H. Douglas's SC theories but became part of Aberhart's. The currency that Alberta printedwas of this type.


Aberhart's government found it was unable to reform private banks and federal money policies, so it printed its own money and started its own government-owned banks (today's ATB chain).


Aberhart and members of his recently-appointed cabinet were addressed by R. Rogers Smith on Alberta's ability to go it alone. Smith's evidence was later published in a 1937 booklet entitled Alberta has the Sovereign Right to Issue and Use its own Credit A Factual Examination of the Constitutional Problem.


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Other publications on the topic include:


M. Evanishyn A Provincial Bank. Solution for Present Crisis (circa 1921) published (distributed) by the People's Economic Educational Society, 9666 Jasper Avenue (This address is the Ernest Brown Block building. Ernest Brown, Edmonton's leading photographer, was a socialist and an ardent monetary reformer. He had come into dire financial straits in the WWI recession. By 1921 he was working as his own janitor in an ultimately-futile attempt to keep ownership of of his large building. At the same time he was lashing out at the capitalistic and monopolistic system that had thrust him and many other Alberta pioneers into poverty. His expose of the way the city government worked with large speculative firms to dispossess pioneers is described in the blog

https://montopedia.wixsite.com/montopedia/post/ernest-brown-called-out-machinations-of-edmonton-s-well-heeled)


A Twentieth Century Economic System (no author stated - the book notes "The author has decided to remain anonymous, in the hope that his fellow citizens will insist, on this occasion, on doing their own thinking and will consider these proposal on their merits, uninfluenced by the names and reputations of the protagonists on either side.") Date also unstated but post-WWII. Has much on "Effective Demand."

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The struggle of the SC government for economic justice is outlined in a four-part pamphlet series entitled Alberta 's Fight for Freedom. A History of Social Credit in Alberta, 1905-1947, by H.E. Nichols. The early years are presented as showing "the pioneering spirit of Alberta' foundation stock as reflected in various phases of endeavour." Nichols specifies the founding and growth of two early farm organizations - the Society of Equity and the Alberta Farmers Association, both "designed to protect the interests of the rural population."


In addition to Bevington and other farmer/reformers, Nichols wrote that "a small number of business and professional men, teachers and members of the clergy made up the group [known as] Monetary Reformers." (vol. 1, p. 7)


in the 1921 federal election, elected under the Progressive banner were "some of the ardent students of monetary reform, who later became known as the Ginger Group." The Ginger Group included William Irvine and Winnipeg minister J.S. Woodsworth. It also included most of the Farmer MPs elected in Alberta in 1921.


They fostered and led the HofC's investigation into banking practices and invited Bevington to give his evidence, a scathing criticism of how private bankers helped themselves and farmers and working families suffered. (See the published "Evidence before the Banking and Commerce Committee in 1923", perhaps available online).


Other HofC Banking committees investigated the private banks in 1928 and 1933, I think on the five-yearly renewal of the Banking Act.


Info on the findings of these Committees is in the Glenbow:

file M-1157-46 Banking Committee, House of Commons. — 1928. — Consists of report about improving the banking system, and synopsis of evidence given.

file M-1157-47 Royal Commission on Banking. — 1933. — Consists of submissions by the United Farmers of Alberta (UFA); mayor and council of Calgary; and group of professionals and businessmen of Calgary.


More to come....


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