– Social Credit
As soon as C. H. Douglas published his first writings
on Social Credit, the Financiers did everything they could to silence or
distort Douglas's doctrine, for they knew that Social Credit would put
an end to their control over the creation of money. When Louis Even
began diffusing Social Credit in French Canada in 1935, one of the
accusations peddled by the Financiers was that Social Credit was
Socialism, or Communism. But in 1939, the Roman Catholic Bishops of the
Province of Quebec appointed nine theologians to examine the Social
Credit system in the eyes of the social doctrine of the Catholic Church,
and give an opinion as to whether it was tainted with Socialism or
Communism. After considerable deliberation, the nine theologians found
that Social Credit was not tainted with Socialism nor Communism, and was
worthy of close attention.
Here is the translation of the full text of the
theologians, reproduced from the November 15, 1939 issue of the Montreal
weekly “La Semaine Religieuse” (The Religious Week):
of the study commission
readers will be interested to read the conclusions reached, after a
serious study of the arguments presented from both sides, by the
Commission charged by the Bishops of Quebec to examine, from the
Catholic doctrine viewpoint, the Social Credit system, and especially to
determine if it is tainted with the Socialism and Communism condemned by
the Catholic Church.
Commission, presided over by Father Joseph P. Archambault, S.J., also
included: Msgr. Wilfrid LeBon, P.D., Canon Cyrille Gagnon, Canon J.
Alfred Chamberland, Father Philippe Perrier, Father Arthur Deschênes,
Father Jean-Baptiste Desrosiers, P.S.S., Father Charles-Omer Garant, and
Father Louis Chagnon, S.J.
The Commission first delimited the field of its study.
There is no question here of the economic or political aspect, that is
to say, of the value of this theory from the economic viewpoint, and of
the practical application of the Social Credit system in a country. The
members of the Commission recognize they do not have any competence in
these fields; besides, the Church does not have to pronounce herself in
favour or against matters “for which she has neither the equipment nor
the mission”, as Pope Pius XI wrote. (Cf. Encyclical Quadragesimo Anno.)
There is no question here either of approving this doctrine on behalf of
the Church, since the Church “has never, on the social and economic
field, presented any specific technical system, which besides is not her
role.” (Cf. Encyclical Divini Redemptoris, n. 34.)
The only question studied here is the following: Is the Social Credit
doctrine, in its basic principles, tainted with the Socialism and
Communism condemned by the Catholic Church? And if so, should this
doctrine be regarded by Catholics as a doctrine that cannot be admitted
The State, as it is mentioned in the present report, is considered in
abstracto, regardless of the contingencies it may entail.
The Commission defines Socialism, and notes what characterizes this
doctrine in the light of Quadragesimo Anno:
Suppression of private property;
Control of economic life by the State, in defiance of freedom and
The Commission then worded in propositions the basic principles of
aim of the Social Credit monetary doctrine is to give to all and each
member of society freedom and economic security which the economic and
social organism can secure. To that end, instead of reducing production
to the level of the purchasing power through the destruction of goods or
restrictions on work, Social Credit wants to increase the purchasing
power to the level of the productive capacity of goods.”
It proposes to that end:
The State must take back the control of the issuance of money and
credit. It will exercise it through an independent commission possessing
the required authority to reach its end.
The material resources of the nation, represented by production,
constitute the base of money and
At any time, the issue of money and credit must be based on the movement
of production, in such a way that a sound balance is constantly kept
between production and consumption. This balance is ensured, at least
partly, through a discount, of which the rate would necessarily vary
with the fluctuations of production.
The present economic system, thanks to the many discoveries and
inventions that favour it, produces an unexpected abundance of goods,
while at the same time reducing the need for human labour, therefore
creating permanent unemployment. An important part of the population is
thus deprived of any power to purchase goods made for it, and not only
for a few individuals or groups. So that all may have a share of the
cultural inheritance bequeathed by their forefathers, Social Credit
proposes a dividend, of which the amount is determined by the quantity
of goods to be consumed. This dividend will be given to every citizen,
whether he has other sources of income or not.
Now, one must see if there is any taint of Socialism in the propositions
Concerning Paragraph I:
This proposition does not seem to include any Socialist principle, nor
consequently be contrary to the social doctrine of the Church. This
affirmation is based on the following passages of the Encyclical Letter Quadragesimo
“There are certain categories of goods for which one can maintain with reason that they must be reserved to the collectivity when they come to confer such an economic power that it cannot, without danger to the common good, be left to the care of private individuals.”
the Encyclical goes on: “In the
first place, then, it is patent that in our days not alone is wealth
accumulated, but immense power and despotic
economic domination is concentrated in the hands of a few,
and that those few are frequently not
the owners, but only the trustees and directors of invested funds,
who administer them at their good pleasure.
“This power becomes particularly
irresistible when exercised by those who, because they
hold and control money, are able also to govern credit and determine its
allotment, for that reason supplying, so to speak, the
lifeblood to the entire economic body, and grasping, as it were, in
their hands the very soul of production, so that no one dare breathe
against their will.”
want to change such a situation is therefore not contrary to the social
doctrine of the Church. It is true though that by entrusting to the
State the control of money and credit, the State is given considerable
influence over the economic life of the nation, an influence equal to
that presently exercised by the banks, for their own profit, but this
way of doing things does not entail, in itself, any Socialism.
being, in the Social Credit system, only a means of exchange, of which
the issuance is strictly regulated by the statistics of production,
private property therefore remains intact; moreover, the allotment of
money and credit could even perhaps be less determined by those who
control it. To reserve for the community (the control of) money and
credit is therefore not against the social doctrine of the Church.
Thomas Aquinas says it implicitly, in his Summa
Theologica (Ethica, Volume 5, Lesson 4), when he asserts that
it belongs to distributive justice — which, as it is known, is the
concern of the State — to distribute common goods, including money, to
all those who are part of the civil community.
fact, money and credit have been, in the past, under the control of the
State in several countries, including the Pontifical States; and they
are still so in the Vatican. So it would be difficult to see in this
proposition a Socialist principle.
Concerning Paragraph II:
The fact that money and credit are based on production, on national
material resources, seems to entail no Socialist character. The base of
money is a purely conventional and technical matter.
the present discussion, this point is agreed to in principle by several
Concerning Paragraph III:
The principle of a balance to be kept between production and consumption
is sound. In a truly humane and well-ordered economy, the aim of
production is consumption, and the latter must ordinarily use up the
former — at least when production is made, as it should be, to answer
for the discount, of which the principle is admitted and even currently
practiced in industry and trade, it is only a means to realize this
balance; it allows the consumers to get the goods they need at a lower
cost, without any loss for the producers.
that the Commission does not express an opinion on the necessity of a
discount caused by a gap which, according to the Social Credit system,
exists between production and consumption. But if such a gap does exist,
to want to fill it through a discount cannot be considered as a measure
tainted with Socialism.
Concerning Paragraph IV:
The principle of the dividend is also reconcilable with the social
doctrine of the Church; besides, it can be compared to the State's power
to grant money. The Commission does not see why it would be necessary
for the State to own capital goods to pay this dividend; presently —
although in an opposite sense — the power to tax, which the State
possesses in view of the common good, entails this note even more so,
and yet it is admitted. The same affirmation applies to the Social
Credit discount: both are based on the principle of the discount in a
cooperative system. Besides, cooperation is held in high esteem in
only control of production and consumption that is necessary for the
implementation of Social Credit is the control of statistics, which
determines the issue of money and credit. Statistics cannot be
considered as a real control or a constraint upon individual freedom; it
is only a method of collecting information. The Commission cannot admit
that statistical control requires the socialization of production, or
that it is tainted with Socialism or Communism.
The Commission therefore answers in the
negative to the question: “Is Social Credit tainted with Socialism?”
The Commission cannot see how the basic principles of the Social Credit
system, as explained above, could be condemned on behalf of the
Church and of her social doctrine.
The Commission nevertheless wants to remind Catholics that Social Credit
— of which the purely economic or political aspect was not judged here
— remains only a monetary reform, and that what is most important, is
a reform of institutions, through the combination of people who practice
the same trade into
vocational groups, and moral renovation, according to Pope Pius XI's
of some objections
Commission also studied some of the objections usually put forward
against the preceding conclusion.
The control of money and credit necessarily entails the control of
production, until its eventual socialization.
Answer: The control of money and credit does not take away from private
individuals nor corporations the ownership of tools and capital goods,
even if it can imply, to some extent, an indirect control of this
production. This indirect control which, at least usually, must be
exercised in view of the common good, does not have any Socialist
character, just as the rational control of production by the banks could
be called individual liberalism.
The dividend encourages idleness.
Answer: The State will not issue money or credit according to its wishes, but
according to the requirements expressed by the statistics of production,
which is intimately linked to the work of the citizens. It is most
likely that some will refuse to work; but one should not think that the
dividend will automatically support everyone forever. For even though
the dividend may, at first, be quite big to fill the gap between
production and consumption, a continuous increase in production, due to
an equivalent increase in work, will be required to maintain the
dividend at the same level.
the Social Crediters should not lay too much stress on the dividend,
especially on the permanent basic dividend, which is not essential for
the system; but the principle in itself cannot be condemned.
The dividend, and even the discount, will deprive the workers of their
wages, and the producers, of their profits.
Answer: This could be true, to some extent, and always in an indirect way, if
there was actually no gap between production and consumption. But the
Social Credit system is precisely based on this gap: it is a question
that is purely economic and technical. From this, the dividend cannot be
condemned on behalf of the social doctrine of the Church. Besides, it
seems that a gap actually exists between the cost of some production —
fisheries, natural resources, etc. — and the price of consumption.
At first sight, one sentence of Douglas inspires some doubt: “The
dividend shall progressively displace wages and salaries”. (Warning
Democracy, p. 34.)
Answer: In Douglas's works, the word “dividend” does not always have the
same meaning. Douglas foresees here an entirely cooperative economic
system. Then it is easy to understand that the cooperative workers are
paid no longer with salaries, but with dividends. In this case, they
are, in a way, the very owners of the production system.
replacement of wages by dividends cannot therefore be considered as
being contrary to the social doctrine of the Church; all the more so
since the Pope (Pius XI) himself, in Quadragesimo
Anno, admits the legitimacy of an order in which the contract
of partnership would correct, as far as possible, the wage-contract.
Cooperation is a form of contract of partnership, in which the dividend
tends to replace wages normally and progressively.
are the words of Pius XI: “And
first of all, those who hold that the wage-contract is essentially
unjust, and that in its place must be introduced the contract of
partnership, are certainly in error. They do a grave injury to Our
Predecessor (Leo XIII), whose Encyclical (Rerum Novarum) not only admits this
contract, but devotes much space to its determination according to the
principles of justice. In the present state of human society, however,
We deem it advisable that the wage-contract should, when possible, be
modified somewhat by
a contract of partnership, as is already being tried in
various ways to the no small gain both of the wage-earners and of the
employers. In this way wage-earners are made sharers in some sort in the
ownership, or the management, of the profits.”
is true that it is difficult to imagine a cooperative system that has
reached such an extent that every wage would disappear, to be replaced
by dividends only; however, this does not make the hypothesis erroneous.
Moreover, the Commission wants to point out that some expressions of
Douglas, on this issue, are rather confused. However, this seems to be
his thought, according to the Social Credit leaders.
objections cannot, in the opinion of the Commission, invalidate the
previous judgement, formulated from a Catholic social point of view. Let
us add that a deeper study of this system, from a purely economic
viewpoint, is essential, because of the importance of the issue