43 — Social
article of Louis Even, first published in the March 15, 1944 issue of
the Vers Demain Journal.)
is not uncommon to hear the following objection to Social Credit: “But
how will foreign trade be carried out with Social Credit money? How will
this money be accepted abroad?”
very simple answer: “The nature of Social Credit money would be
exactly the same as the nature of today's money. The same form and the
same kind of metal or paper, the same bookkeeping, and the same
transferring of debits and credits.”
the question falls apart. However, a few notions on foreign trade will
show that, under a Social Credit system, foreign trade would meet with
much less friction than under the present system, even if the Social
Credit system would exist only on one side of the border.
Imports and exports
trade consists of commercial trade going beyond the country's borders.
purchase coffee from Brazil, oranges from Florida or California, silk
from Japan, cotton from the United States, wine from France, cutlery
from England, is, for the Canadians, to import goods. It is foreign
trade. Imports are goods that come from abroad.
sell Canadian paper to New York, Canadian wheat to Europe, nickel to
Germany, aluminum to Japan, fish to Italy, bacon to England, is for
Canada to export goods. It is still foreign trade. Exports are goods
that are sent abroad.
trade is a sound activity. It is completely within the providential
order. God gave all of the earth to man. He put on earth all that is
needed for the material needs of the whole of humanity. But He did not
put all of these things into each small corner of the globe.
nations easily produce certain goods in plenty; others produce other
things better and plentifully. Therefore it is profitable for men of
different countries to trade their surpluses among themselves.
Products cross the borders
foreign trade, goods go from one country to another, in both directions,
just as, within our country, goods from towns go to the countryside, and
goods from the countryside go to towns.
the grocery store in your town or village, you can see, grouped
together, the products from towns and the products from the countryside.
at the same grocer's, you can also find things that come neither from
our countryside nor our towns. You will find rice from China, tea from
Sri Lanka, coffee from Brazil, bananas from the West Indies, books from
France, and still other things, from almost every country in the world.
They are there, it seems, as naturally as are the potatoes from the
you were to visit foreign countries, you would, of course, also find
there Canadian products. You would eat Canadian bacon in London; find
flour from Alberta in France's bakeries, fish from the Gaspe Peninsula
on Rome's tables, paper from the Province of Quebec in New York's large
Money does not cross the borders
would you find as easily Chinese, Japanese, Turkish, French, Italian
currency, or other kinds, in Canada's wallets and tills? Goods go across
borders, but money does not go across borders as goods do. This
demonstrates immediately that money has nothing to do with foreign
taste. It is the products, wherever they may be, which have to do with
consumers' tastes. One buys Chinese rice if one likes it, green tea from
Japan if one likes it; but one does not spend one minute worrying if the
Chinese yuan or the Japanese yen is made of gold, silver, paper, rubber,
figures, or hieroglyphics.
product is universal; but money is essentially an internal thing. A
country's monetary reform has nothing to do with tastes, ideas, or the
other countries' governments.
Goods paid for with goods
money does not cross the borders like goods do; and, in foreign trade,
goods are paid for with other goods or services. If they are not paid
for immediately, there is debt on one side, claim on the other, as when
a storekeeper sells on credit.
when a Canadian orders a rice cargo from China, he does not ship a wheat
cargo in payment. He goes to his bank and pays in Canadian currency, in
dollars. The banker delivers a credit instrument that the Chinese
merchant will exchange in his country for Chinese currency.
another Chinese merchant will buy a wheat cargo from another Canadian,
and will go to his own bank to effect his payment in Chinese currency.
The bank will send a bill of exchange to the Canadian who exported the
wheat, and the Canadian will be paid at home in Canadian dollars.
is eventually the wheat cargo shipped by one company that paid for the
rice cargo imported by another company.
The difficulties with foreign trade
exchanging of the bills of exchange is done in banks or brokerage
houses, and the preponderance of these bills of exchange, on one side or
the other, determines what one calls the foreign exchange rate.
trade between countries has nothing to do with the substance that the
money is made of in either country.
you think that the German who sells his merchandise to us, and who is
paid at home in German marks, wonders if one pays for it here in paper
money, or metal disks, or with a simple cheque drawn on a bank or a
credit union? There is not the least difficulty in this regard.
difficulties with foreign trade come, above all, from two things: 1. The
countries want to export more than they import; 2. The value of each
country's monetary unit is unstable in relation to itself.
The first difficulty is smoothed away
country, Canada for example, will want to exports goods for 2 billion
dollars; but it will try, through tariff barriers or otherwise, to limit
its imports to $1.5 billion. It wants to send abroad $500 million more
in goods than it receives. Not out of charity: it requests payment. But
it is reluctant to accept goods in payment, because it wants its
citizens to stay very busy, to have work that gives them wages to buy
the goods that are left.
Social Crediters have, for a long time, understood and denounced this
policy as being as absurd as it is unnatural. But as long as one
continues to link the right to goods to wages, as long as one does not
want to complement this right by dividends to raise it to the level of
offered production, one will continue to look abroad for purchasing
power which is lacking to the country's consumers; one will continue
selling abroad goods that the citizens need but cannot pay for. With
more exports than imports, one reduces the amount of goods in front of
the amount of money, instead of agreeing to increase the amount of money
in front of the products.
one respects the rule that wants no other source of purchasing power
than the personal contribution to production. Since all countries, until
now, have held to this rule, all have tried to export to others more
than they have imported from them. Hence are formed the economic
frictions that are harmful to foreign trade and that lead to political
frictions, with the tragic outcome of which we are aware.
Credit, by putting all the money needed into the country to buy all of
the country's production, makes this crazy fury disappear. A Social
Credit country is ready to export its surplus, and in return requests
the same surplus quantity from others. The population of a Social Credit
country has money to buy what is coming in with the money that would
have bought what is going out. And a foreign country is happy to find
this interaction with the Social Credit country.
Credit therefore makes the first cause of friction disappear in foreign
trade, at least in the country that adopts the Social Credit system;
trade between this country and all others is immediately facilitated and
second difficulty is smoothed away
second cause of friction in trade is the instability of the purchasing
value of money in one's own country.
foreign trade, a certain time elapses between the order and the payment
of the received merchandise. The price is agreed upon and the drafts are
drawn up at the same time as the order. For example, a French
businessman sells me Parisian goods for a value of 8,000 francs. I
accept a draft that will make me pay him, in six months' time, let us
say 200-Canadian dollars (the foreign exchange rate at the time of
in six months' time, the restriction of money has caused the dollar
value to go up, I will deprive myself of as much purchasing power in
paying $200 in six months' time as if I had paid $250 immediately, at
the time of purchase. It is an injustice that exporters and importers
always risk facing, with continual inflations and deflations of the
Credit, by always maintaining the money supply at the level of the
production volume, would maintain a much better stability in the value
of the Social Credit country's monetary unit.
tradesmen would know what the Canadian Social Credit dollar would
signify in six months or a year's time: It would still have the same
value as at the time of sale or purchase.
with a Social Credit nation would therefore be sought. Those who say
that Social Credit would be harmful to foreign trade say the exact
opposite of what is actually true. It is either because they are unaware
of what Social Credit is, or because they are unaware of what foreign