The Great Depression: A Social Credit Solution Essay
The Great Depression: A Social Credit Solution
During the Great Depression of the 1930’s, money had become a huge issue. There never seemed to be enough money to go around, not allowing people to support themselves and purchase goods. However, there was a solution based on the theories of a Scottish engineer, Major Douglas. Douglas felt that capitalism was a wasteful economic system, and claimed that financial institutions such as banks had been hoarding money. This would have prevented customers from buying the abundance of goods that capitalism produced.
He also felt that the government should “release” money within the economy, so that citizens could spend it. This theory was known as “social credit”. William Aberhart, a radio preacher from Alberta, heard of this theory and began to publicise it on his weekly radio program, Voice of the Prairie. He was a shy man in private, but quite a colourful character. He could inspire thousands before the microphone, having a vast radio audience, and he used his program to spread his ideas of religion and politics.
The new political party had been born from the grassroots movement, with Aberhart as leader: the Social Credit party. The issue of there never being enough money to buy the goods available would simply be solved if there was more money circulated for people to spend. As well, sales would boom and industries would thrive. Aberhart officially established the Social Credit party in 1935 . He created the idea that suggested all citizens would own the natural resources of the province and be able to share in its prosperity.
Aberhart promised each citizen would receive a certificate, known as the Basic Dividend. Citizens were to receive $25 a month. This certificate was as good as money and could be used to buy food, shelter, and clothing, on top of an incoming salary. It became officially known as a “prosperity certificate” and unofficially called “funny money” . As a result, it would increase spending and stimulate the economy. This policy could not have come at a better time, considering that Alberta had almost 20% of its population on relief .
In 1935, Social Credit swept to power taking over 56 out of the 63 seats in Alberta Legislature snatching the United Farmers of Alberta from office. Aberhart as Premier continued to hold power of the leading party long after the Depression ended . Although Aberhart’s policy of the Dividend was very attractive to families in Alberta, considering many of whom had little or no cash, the party was unable to deliver on its promises. Once in power, reality confronted Premier Aberhart. There was not enough money in the vault to meet that month’s government payroll, let alone pay 400,000 people $25 in social credit.
Also, ideas about the control of banking and currencies were never permitted. These were federal matters in Canada, and Aberhart’s legislation was not allowed in the federal government . Instead, Social Credit became a party that defended the rights and freedoms of business and a free, uncontrolled economy. Although Aberhart’s solution had failed, he still had emerged as a politician willing to fight for his citizens through hard times. He remained Premier until 1943 when he died in office.
In conclusion, William Aberhart’s policy would have been the best choice to solve the issue during the Great Depression, because it would have had a huge impact on all of the negative aspects of life in that time period. Solving the money issue would have helped support the living situation and bring back industries to do well financially once again. Putting aside William Aberhart’s failures, this particular policy would have down well to change people’s viewpoints and boost their spirits in a time of need. He may have gone out with one goal in mind, but came out with another, having a free uncontrolled economy instead of controlling banks.
Subject: Great Depression,
University/College: University of Arkansas System
Type of paper: Thesis/Dissertation Chapter
Date: 27 September 2016
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