THE ALBERTA BONDS

Press, Volume LXXII, Issue 21867, 21 August 1936, Page 8

THE ALBERTA BONDS

TO THE EDITOB Of THE PRESS. Sir,—l find the following in the “New York Times” Magazine of May 10, “There is evidence . . that a monetary experiment—though not social credit —will be tried in Alberta this summer. It is an adaptation of an experiment tried out in 1933 by W. A. Fallow, now Minister for Public Works in the Alberta-Government, but then Mayor of Vermillion, an Alberta village. His scheme is to be repeated in connexion with an ambitious road-building programme “Mr Fallow, a small, lean man, with a ready twinkle in his eyes, recalls what he did in Vermillion. T printed 5000 dollars’ worth of postdated cheques,’ he said, ‘They were in one dollar and two dollar denominations. and dated a year ahead. I actually issued only 1300 dollars since they moved so fast that they circulated right in our own municipal office eight times in four months. They came back in payment of taxes, bills for electric current, and for the other, utilities the municipality controlled.* When ordinary money was coming in fast we drew the cheques out of circulation and vice versa “ was a managed currency on a small* scale and it was certainly “hot money,” although covered with actual cash which meanwhile drew interest in a savings account. That year for the first time we did not need any advance from the banks, and you should have seen my friend the banker scratch his head. The cheques that did not come back to us were never presented for payment.’ “If the adoption o: this plan is successful it is to be expanded to cover all government expenditure and perhaps cover private business as well. Th* Government will issue in payment of its construction bills scrip which will be taxable at the rale of 2 per cent, a week, the tax to be paid by purchasing and affixing stamps. At the end of a year the scrip will be withdrawn,-by which time its users will have paid ’over to the Government for its use 104 per cent, of its value. The scrip will thus have been redeemed and an additional 4 per cent, paid to meet the cost of administration.” As we how know this scheme is in operation and the Associated Chambers of Commerce have tried to get the Supreme Court to declare it illegal, on the grounds that Absrhart is ; issuing “money.” I see in the “Abertan” of June 13, page 2, that according to Section 138 of the Federal Bank Act, provinces are allowed to issue such bonds. Similar schemes have been worked successfully in Austria and Germany in the last few years, but have all been squashed by the banks. The present Alberta scheme is the idea of Gesell.

Social creditors the world over claim that the two cent tax leaves you just where you were and that no new purchasing power is introduced by these bonds. As the stamps are issued by .the Alberta Government and the money collected by their sale is used to re und the last holders of the bonds on redemption, it is merely shifting / money from one pocket to another’ and' the circulation of the bonds undoubtedly is an addition to the province’s purchasing power. By the way, the bonds will circulate for two years, not one. I hope' Messrs Bray, Davie, and others will criticise and take note that the Alberta Government gets the roads made for nothing.—Yours, etc., TRUTHSEEKER. August 20. 1936.