In the following report, a strategic overview is laid out with the explicit purpose to inform and activate leading citizens and policy makers towards the strategy needed to re-align our nation from the shackles of the British Empire’s collapsing monetarist system, towards the new paradigm exemplified by the BRICS and China’s New Silk Road. The full program for the New Silk Road which this report is meant to compliment can be found in the 2014 EIR Special Report The New Silk Road Becomes the World Landbridge and the accompanying 2015 The US Joins the New Silk Road 38 page report.
This re-alignment is necessary not only to reconstruct our self destroyed physical economic base, but to lift humanity out of British geopolitics, and closed system thinking which is driving victim nations within NATO towards a thermonuclear world war.
The editors of the Canadian Patriot are proud to present the following report as a blueprint for the survival not only of Canada, but of all humanity. Our report begins with the presentation of several strategic mega projects which will allow us to return to the path of pro-scientific and technological progress which was abandoned during the post John F. Kennedy era of “post industrialism” and “consumerism”. We end our report with several economic measures which must be adopted in harmony with the United States beginning with the restoration of Canada’s Glass-Steagall law (aka: “Four Pillars”), and the re-activation of the Bank of Canada as an instrument of Hamiltonian credit generation.
1. Join the BRICS and the New International Economic System
A new global paradigm has arisen on this planet centered on the outlook of scientific and technological progress, rather than monetary doctrines which has so long plagued the collapsing Western world. This new paradigm has grown out of the seeds planted and nurtured by over 40 years of global work by American Economist and Statesman Lyndon H. LaRouche, who has been at the forefront of the international program for this system since his first presidential campaign in 1976.
This new paradigm has been best exemplified by the China-led inter-civilisational New Silk Road program, Russia’s Trans Eurasian Development Belt, India’s Mars program, China’sHelium-3 Lunar Mining Program and Russia’s Strategic Defence of Earth against asteroid threats. These visionary projects for the next hundred years of development are not only the direct outgrowth of international LaRouche organization, but are a total contrast from the vision-less collapsing Trans-Atlantic monetary system governed by the Anglo Dutch financial oligarchy.
The first thing Canada must do, along with our American and European allies is join the BRICS (Brazil, Russia, India, China and South Africa), whose leadership is opening the door for a new kind of development through a “win-win” cooperation among nations based on the highest discoverable principles of the universe and their effects on increasing the energy flux density of the human species.
In this spirit, Canada’s most direct role in joining this process of optimistic development is by accepting the China/Russian offer to bridge Asian and American continents by constructing the long awaited Bering Strait tunnel. This project has already begun with the New Silk Road development corridor in Eurasia, the Silk Road Fund, Asian Infrastructure Investment Bank (AIIB), New Development Bank and the newly announced $248 billion Beijing-Moscow high speed rail line through Kazakhstan. Russia and China over the past years have made it clear that they support connecting this program to North America through the Bering Strait beginning with Russia’s August 2007 offers and amplified by China’s offers in May 2014. This project would not only involve the completion of the long overdue 2280 km Alaska-Canada rail line begun by BC’s great Premier W.A.C. Bennett during his 1952-72 leadership of B.C., but would extend into Alberta and on towards the east coast of Canada, and also down through the United States in several branches creating millions of jobs, new industries and opening up the Arctic in ways never before imagined.
Similar China-sponsored trans-continental rail and water projects such as the Trans Continental Rail corridor from Brazil to Chile, and the Nicaraguan Canal are already creating a field of development which will make the long overdue rail connection through Panama finally a reality.
LaRouche On The Record: A New International Economic Order
For over four decades, physical economist Lyndon LaRouche has provided the intellectual and political leadership in the fight for a new international economic order for the planet, for the purpose of ending the historic imperial control of monetarism and unleashing mankind’s creative powers as a species.
The profound impact of LaRouche’s intellectual leadership is clearly reflected in the current actions being taken by the BRICS nations and others to create a new global financial architecture and strategic alliance among nations, with the recent establishment of the New Development Bank (NDB) and related developments.
A partial timeline of LaRouche’s role in leading the fight for a new international economic order is chronicled below:
PLANNING THE PRESENT STARTS FROM THE FUTURE
In a strained world looming on the brink of collapse and thermonuclear war on the one hand, and a new paradigm of mutual development and peaceful co-existence on the other, Canada’s close geographical relationship to both the United States and Russia provides an ideal opportunity to act as a bridge uniting two parts of the world around advanced scientific, cultural and nation building endeavors centering around such programs as space science, nuclear energy, and arctic development. The lynchpin for these programs cumulatively driven by the World Landbridge (expressing itself as the “New Silk Road” program of China already under construction), remains a centuries long program called the Bering Strait Rail Tunnel, has been heralded by Lyndon LaRouche for over three decades as beacon of hope for world peace.
What would accepting the Russia/China offer to build it entail for Canada? What will be reactivated within our nation building history which Canadians have forgotten during 40+ years of post industrial rot?
First and foremost, this New Silk Road program would mean abandoning the post-industrial system that replaced the 1945-1971 policy scientific and technological growth. The 40 year cage of oil exploitation for global geopolitical manipulation under the post 1971 “petro dollar” has created a speculative instability within the entire world which has resulted in Canada’s near implosion recent years culminating in the meltdown of the Alberta “oil economy”.
The Bering Strait Development Corridor demands a systemic top down evaluation of Canada’s potential, not merely as a resource exporter, but as a driver of fundamental scientific progress in order to increase the energy flux density of humanity as a whole. Our frontiers obviously are found by pressing on the boundaries of human knowledge, in the atomic field on the immeasurably small, and in the space field on the immeasurably large. Geographically, the boundaries determining the last frontiers of earth are established by the Arctic.
Before proceeding to the most optimal choices of least action pathways and projects available for Canada within the context of a new emerging paradigm, it is important to take a brief inventory of the nature of the phyisical economy that we are dealing with. On a geographic level, The layout of Canada’s development has to take into account the three fundamental zones:
1) Urban- Industrial where 80% of our population is located,
2) Rural to the end of the tree line in the mid Canada corridor and
3) Arctic where less than 1% of Canadians live
As the 2011 Lpac paper “Arctic development and Self Developing Systems” and accompanying video “Breaking the Ice on Arctic Development” makes clear: True nation building must begin with the most underdeveloped region as the driver (the Arctic), which will then permit the mobilization of resources in order to “leapfrog” older technologies towards the cutting edge high energy flux density
2. THE BERING STRAIT TUNNEL & ALASKA-CANADA RAIL CORRIDOR
The cornerstone of the World Landbridge, of which the Russian and Chinese led New Silk Road and New Trans-Eurasian development are vital components, is the construction of the Bering Strait Tunnel running from Russia to Alaska. Canada’s vital contribution to this international project necessitates the completion of 1800 km of unbuilt rail, preferably high speed, from British Columbia, through the Yukon and into Alaska.
The Alaska-Canada rail connector, with the construction of a development corridor extending 80 km on each side of the railroad, can transform the region in its entirety. Power lines, fiber-optic lines, and where necessary, freshwater pipes would be encased within the corridor. Cities, population, manufacturing, and scientific agriculture would be fertilized and harvested in this corridor as well. The Arctic North’s nearby abundant, but largely untapped, mineral and raw material resources would be made accessible, by rail link, out of the frigid ground for rational use in the Arctic North and the world.
This top down approach to rail creation sets the necessary foundation upon which any competent plan to reconstruct Canada’s dilapidated municipal and interprovincial transportation infrastructure must rest. Magnetic Levitation trains connecting all major cities from Vancouver to the Maritimes would also provide a positive driver for nation building in tandem with a revived American and Mexican transportation strategy.
Were this program to be built, not only would countless productive jobs be created for the next generation, but a new breath of life for Canada and the world would result as an era of unbounded cooperation and creative discovery would necessarily result.
From 1952- 1972, BC’s great Premier W.A.C. Bennett fought a hard fought battle to ensure that British Columbia would finally become more than a colonial underdeveloped region as its British rulers had long condemned of her. Bennett was convinced that the opening up of the arctic and the industrial boom of British Columbia were possible if a policy of state directed investment into capital intensive infrastructure, social programs, and industrialization were made the focus of the national purpose.
Bennett’s clashes with the technocrats in Ottawa beginning with the sabotage operation against the Columbia River Treaty and continuing beyond the ouster of Diefenbaker in 1963 instilled Bennett’s resolve to use the vast powers of the Province over its economy to nationalize BC Power Corporation and create new BC-run institutions such as the Bank of British Columbia to execute his grand design. Bennett’s struggle to develop BC was also made possible through his association with John F. Kennedy who sided with Bennett over Ottawa’s civil service in regards to the Columbia River Treaty.
Using revenues generated from the Columbia River treaty, Bennett was able to invest in a vast rail expansion process that continued through the 1960s which opened up development corridors in previously inhospitable regions of the great north. While these projects were begun based upon the exploitation of fossil fuel, lumber and other raw materials, the creation of manufacturing industries had soon begun to appear with permanent cities in the Peace River region.
Alaska-British Columbia-Yukon conferences through this period were instrumental in advancing Bennett’s vision for an eventual connection between BC’s rail system and that of Alaska. Due to the sabotage of the rail system by W.A.C. Bennett’s son Bill Bennett, the great Canada-Alaska rail connection became forever known as the “rail to nowhere” ending in Dease Lake.
Completing Bennett’s rail vision in the 21st century is a necessary component to the Bering Strait Rail Corridor program proposed by the governments of Russia and China which will advance transportation corridors all the way from the Eurasian New Silk Road through the Siberian development belt and into the Americas connecting down into the west coast and New York. The Alaska-Canada rail connection is one of the greatest projects in the Americas and involves the 1800 Km construction of rail between Dease Lake and into the Yukon and Alaska.
3. ARCTIC DEVELOPMENT
Ultimately, the opening up of the Arctic as the new frontier of human development requires that Canada learn from Russia’s current commitment to build the new nuclear powered domed city of Umka on the island of Kotelny only 1000 km from the North Pole. In order to meet the challenge of housing over 5000 workers and their families in the harsh arctic climate which requires internal climate control, waste evaporation, internal agricultural capacities and reliable energy, Russian designers have used the International Space as their model. This ISS design is important since the Arctic will play a vital role in the investigation of cosmic radiation, a galactic (and intergalactic) phenomenon driving both the evolution of the living and non-living material on the earth.
This model “city of the future” echoes back to the planned domed city of Frobisher Bay, Nunavut which Prime Minister John Diefenbaker had committed to build as an integral component of his 1958 “Northern Vision” campaign. Frobisher Bay’s design as produced by the Department of Public Works announced a domed city, encircled by 12 large towers housing 4500 workers and families connected by an underground network of tunnels. In order to ensure that this city were truly one of the future, recreation facilities, shopping centers and other amenities were included to ensure that the comfort of Toronto would be something accessible even in the Arctic.
Ultimately, Diefenbaker`s Northern Vision which incorporated a bold “Roads to Resources”, and frontier science program was to be funded by a re-chartered Bank of Canada. Diefenbaker’s brilliant financing approach took a page from Alexander Hamilton and Lincoln’s Greenback system which involved public bonds issued by Canada’s National Bank in order to connect both old maturing WW2 Victory Bonds as well as new bonds directed towards Canada’s development. Diefenbaker’s vision for a true national credit system was encapsulated in his 1958 radio announcement:
This, the largest financial project in our history, offers an opportunity to all holders of victory bonds which were purchased as an act of patriotic faith during the war years, to re-invest them for the greater development of greater Canada. These monies that were advanced during the days of war, and which contributed to the victory, we now ask to be made available to speed the pace of peaceful progress and the program of national development… The action we are taking will make it possible for our nation to embark on a new era of peacetime prosperity far and beyond anything we have ever known.”
While this National Credit and Northern Vision program was sabotaged by a coordinated operation from London, Diefenbaker’s strategy is just as applicable today as it was in 1958.
Today Frobisher Bay plan remains the paragon of northern development, and complements the multi trillion dollar development policy of the Trans Eurasian Belt Development which Russian Railways President Vladimir Yakunin described on March 23 2015, must be an “inter-state, inter-civilization, project. It should be an alternative to the current (neo-liberal) model, which has caused a systemic crisis. The project should be turned into a world ‘future zone’, and it must be based on leading, not catching, technologies.”
Today, Russia’s Trans Eurasian Belt Development is fully integrated into China’s “One Belt, One Road” program (aka: The New Silk Road), and provides a model upon which the Northern Vision can be re-awoken bringing Canada into alignment with the BRICS on arctic development, space and nuclear research.
4. MID-CANADA DEVELOPMENT CORRIDOR
While this program was rejected by the Liberal Government of 1969, which chose at that time to move Canada into a “post-industrial” paradigm, it has, since 2002 made a comeback under the sponsorship of former Liberal MP Rick Lalibertee and groups of patriotic citizens around the leadership of Architect John van Nostrand.
Although General Richard Romer’s 1967 design is presented within a false closed system paradigm of “resources exploitation”, it is based upon a notion of permanent cities which would endure long after the original mineral which induced the town’s creation is tapped. Within the context of the global New Silk Road, and Canada’s arctic development strategy which necessarily blossoms from our participation in the Bering Strait tunnel, this program provides a valuable pathway for durable growth and is a far cry from the “temporary camp” model at the heart of the Alberta Tar sands in Fort McMurray.
The original 1967 blueprint introduces a concept of permanent development in order to populate and integrate Canada’s resource rich north with the rest of the nation. The original design sat upon a 4000 km rail track from Labrador through the northern provinces and into the Yukon which can naturally harmonize into the Alaska-Canada rail corridor and ultimately the Bering Strait rail connection which must drive this process. Under such a grand vision the Mid-Canada Development Corridor is a vital concept to revive once again.
5. NUCLEAR POWER
It is no exaggeration to say that without an intensive expansion of next generation nuclear fission, with an intention to break through on thernonuclear fusion at the soonest possible time, then not only could no great project in Canada ever be brought into being, but not even currently mediocre levels of production and potential relative population density be maintained. High energy flux density energy sources such as atomic power provides a clear gateway towards true wealth creation and was understood clearly by such Canadian nation builders as John Diefenbaker, CD Howe, W.A.C. Bennett, Jean Lesage and Daniel Johnson Sr. as the only viable way to build our nation.
Driving Arctic development at home, while reconstructing our lost infrastructure and manufacturing capabilities can only occur if we look at the global community with new eyes and recognize our most valuable technological contribution towards the new paradigm of development is also to be found in this field. Currently, Canada’s energy basket is heavily reliant on Hydro power, Coal, Natural gas and Nuclear. That distribution must break from fossil fuels, and especially government-subsidized “green” energies, and into advanced 3rd and 4th generation nuclear with emphasis on cutting edge technologies.
As BRICS nations are vectoring their entire development strategy around a vigorous pursuit of nuclear energy, with over 70% of global nuclear energy development occurring in the BRICS nations or their allies, Canada must use its advanced nuclear technology to immediately begin to assist our global allies from India, China, Africa and America in everything from nuclear desalination to industrial nuclear power production. The Malthusian moratorium on nuclear energy pushed by Prince Philip, Maurice Strong, the Club of Rome and the 1001 Club since 1968 must now come to an end.
5.1 GO FOR FUSION
Lastly, as the bubble of Canada’s resource extraction economy pops with the end of the shale boom, a vital change is needed now for not only Alberta, but all of Canada to survive into the coming decades.
A jewel exists in Canada’s province of Alberta more precious than all the oil in the province. This jewel is located in the Alberta Fusion Energy Program (AFEP), affiliated with the Alberta Council of Technologies (ABCtech). Although this highly underfunded program is not yet at the forefront of Canadian energy policy, ABCtech under the leadership of Dr. Allan Offenburger, led an assessment team in 2014 to explore major fusion programs around the world and invited international fusion researchers to the Alberta Energy Forum in the Autumn of 2014 to present this bold potential to the political and business community.
The Alberta Fusion Program serves as a model for all other provinces which desperately need to participate in this cutting edge technology. Other provinces which had formerly had ambitious fusion programs such as Quebec’s Tokamak at Varennes (cancelled for budgetary reasons in 1998) must therefore be revived as well as the federal Fusion Energy Canada program which had been shut down at that same time. Alongside revived provincial and federal fusion programs working with the world nuclear community, Canada’s universities must be united and reformed around the same endeavour. Currently, only 7 universities have active fusion research programs, but this must expand in quantity and quality coordinated with the private sector such as the British Columbia-based General Fusion Inc., under the umbrella of a reformed National Reseach Council (NRC) and re-nationalized Atomic Energy Canada Ltd. (AECL) following the model of Canada’s “Minister of Everything” C.D. Howe from 1945-1958.
Given the fact that next-generation nuclear fission, breakthroughs in Fusion and mining Helium-3 on the moon are at the center of China’s economic policy and is the basis of the now globally-established BRICS alliance, adopting such a pro-fusion outlook for Canada’s energy policy would immediately propel Canada out of its backwardness as a raw materials exporter and into a pro-industrial dynamic centered on true anti-entropic global development.
The System of the BRICS and the Ongoing Transformation of the World– Interview with Ramtanu Maitra
CRC Bulletin Jan. 2015: World at a Cross Roads: A BRICS-led Nuclear Renaissance or a War of Extinction
7. The Historical Problem of “Canadian development” Which Must be Corrected
The biggest problem with the Bennett design, Diefenbaker’s vision and Rohmer’s plan, is that they are all couched in the closed false nationalist matrix of “Canada first, we’ll see what happens after we build it second”. Compare that to the 2007 LaRouche speech to Canadians at the Canada and the Coming Eurasian World Conference regarding how we have to re-conceptualize our sovereignty around the Treaty of Westphalia and the global system of mutual interest being created:
If we love mankind, and can love the benefit given to the other nation, what are doing that’s good for them? If we can think in those terms, then we will get away from the dog-eat-dog tendency which we’ve seen again, lately, and get back to the idea that we are not animals; we do not breed progeny. We develop human beings, and we hope that the next generation will have a life better than ours, because we’ve made that improvement possible.”
Acting on this highest level of sovereignty means breaking the sacred cow established with Sir John A. Macdonald’s CPR rail programs that rooted our tradition of great projects deeply within a British geopolitical agenda keeping us only strong enough to not be absorbed by the American System or influenced by the Russians. In the new era that is now being shaped by the future orientation led by the BRICS leadership and Lyndon LaRouche, this tragic colonial mentality and false sense of Canadian nationalism must end.
FUNDING THE RENAISSANCE
Adopting a System of Hamiltonian Credit and Joining the BRICS
What Canada must do at this point is to adopt a program of Hamiltonian Economics as the basis for credit generation. Hamiltonian economics involves first wiping all of the fictitious, gambling debt off the record of government obligations and to then issue long term, low interest rate credit through a national bank towards key projects and policies that improve the nation’s productive powers in alliance with other nations.
The first step to doing that is by reinstating ‘Glass-Steagall’ both in the USA, Europe and also Canada. Such a momentum towards Glass-Steagall banking reform and national banking does in fact exist in Canada and must now become the central demand of all municipalities, provinces, unions and citizens to free their nations from the destructive effects of 40+ years of zero growth, post-industrial economics. During these past 50 years, Canada’s increasingly speculative-debt based economy rose from $27 billion in 1974 towards an astonishing $615 billion today… with no physical progress to show for it. It is for this reason, that “growth” can no longer be permitted to be defined in merely monetary terms, but rather physical-scientific terms.
With such emergency measures in place both in the USA, Europe and across the Commonwealth, nations will be liberated from the shackles of speculative debt, and will then become capable of participating with BRICS nations in mutual development under the framework of a new global economic architecture centered around the principles which American statesman Lyndon LaRouche laid out in his “Four Laws to Save the USA”.
1. RESTORE GLASS-STEAGALL
In 1933, Franklin Roosevelt reined in the Wall Street money power using the powers of the nation in order to force a principled separation between the fraudulent investment banking functions which had been directed towards unbridled speculation throughout the 1930s, and legitimate commercial banking. This reform was instrumental in not only creating the moral and physical preconditions of the New Deal, but the defeat of Wall Street-sponsored fascism.
In the post WW2 world, FDR’s Glass-Steagall bank regulation ensured that the law of profit was always bounded to the physical economic realities of the nation states operating within the framework of the Bretton Woods system. In Canada, this policy took the form of a regulation known as the Four Pillars, taken down in a series of waves beginning in 1987 in order to make way for NAFTA which resulted not only in the destruction of much of the productive powers of North America, but ushered in a consolidation of financial power into a few monopolies while unleashing a speculative bubble that has now reached the end of its existence beginning with the creation of the 2008 system of “bail-out”.
Estimates are that the current magnitude of outstanding derivatives claims accumulated as a product of speculative financial practices, now measures in the hundreds of trillions of dollars, perhaps reaching even to quadrillions. Even when compared to the current nominal global GDP, estimated at around $70 trillion, it becomes immediately apparent that this debt can never be paid. The vast majority of these outstanding claims are of a purely speculative character, with absolutely no connection to legitimate, necessary, productive economic activity. To continue to bail out this vast bubble of gambling obligations on the back of a collapsed and rapidly shrinking real economy, would be to create, rapidly, Weimar-style hyperinflation on a global scale, and an economic crisis of Dark Age proportions.
“The Triple Curve” was first presented by Mr. LaRouche at a conference at the Vatican in 1995. The version seen above is the third in a series, and functions as a heuristic device to describe the generalized collapse function of the world economy since 1971 and the collapse of the system which will be triggered by the activation of the global bail-in program. The only way to stem the further collapse of the system is by using a Glass-Steagall standard to reorganize the transatlantic economy such that the monetary and financial aggregates of the economy conform to an increase in the physical economic input-output of the system, versus a decrease.
In contradiction to popular mythology which has maintained that conservative Canadian banking “culture” rendered Bay Street immune to the corruption and speculation rampant amongst the rest of the world, the reality is that Canada’s big 6 banks are hopelessly exposed to the derivatives bubble (to the tune of over $31.5 trillion). Not only this, but the vast predatory lending rampant in the Canadian culture has created an unparalleled consumer debt bomb and housing bomb which has driven Canadian Canada to the brink of a financial meltdown. This means that citizens, leading labour and other officials must demand that our government participate in a Global Glass-Steagall separation, as called for by the Committee for the Republic of Canada since 2012, and endorsed by the City of Burnaby, BC as well as over 145 leading unions.
Bring back the separation between the commercial banks who are responsible for protecting the population’s savings and pensions for their directed purpose of serving as credit to grow society. Such a separation will act as a firewall to protect the people’s credit from being controlled and looted by investment banks under the control of international bankers, and serve the people, rather than people being forced to hopelessly serve the Gods of Lucre.
If Glass-Steagall Were Passed Today
*Immediately, the international Anglo-Dutch financial empire will be forced into bankruptcy. This will happen as they have proven themselves of having no means of bailing out their own bankrupt system as the failure of government bail-outs have proven, and the incoming bail-in chillingly fore-warns. In this situation, if banks cannot force nations to pay for their losses, by intimidating them into imposing bone crushing austerity to draw more blood from the population and its production, then they are bankrupt. This international system of investment banking currently depends on the looting of nations and the denial of industrial and scientific progress, to keep their speculative casino going. Were a nation to take up actions to put up safe-guards to prevent this, the empire would not be able to do anything to stop them.
Now the looting has reached a point of total unbridled fascism; the obligations these institutions are required to pay is such that the kind of looting and austerity demanded reaches a point where it can only be done by intentional genocide of nations and their people, to keep their casino system afloat. The financial oligarchy who runs this system will go to any lengths necessary to try and preserve their system, as the many tragedies in history have shown, including mass starvation and wars, including the launching of nuclear war, as the deadly specter hangs over civilization now. The real question is: Do the representatives and citizens of Canada have the moral courage to act and join with the International LaRouche Movement to cancel the empire’s dead system? *
2. NATIONAL BANKING & THE CREDIT SYSTEM
The world as a whole, especially the trans-Atlantic region, is presently at the brink of a global collapse which will transform all forms of nominal money of every nation into a state of worthlessness on all of the world’s international markets. In short, a general, global break-down-crisis, which is hitting the trans-Atlantic world most immediately, but will, soon after that, swallow the entirety of this planet.
For this situation, there is only one remedy. That remedy is the immediate application of the strict 1933 standard for a Glass-Steagall application among a concert of some leading nations of the world, joined together with the United States, to establish a solid network of national commercial banking systems operating according to such a strict rule.
It has now become a life or death question for Canadians, Europeans and most of the world to guaranty that the United States’ Congress, through encouragements from the world’s major nations, will vote in favour of H.R. 129 or S. 1282 as early as possible and that this enactment of a return to Glass-Steagall in Washington, D.C. would be followed by the passage of similar legislation in all G8 countries.
The Canadian Patriot’s mobilization to activate the Bank of Canada after a Glass-Steagall reorganization of the economy, must be informed by the American Hamiltonian banking experience, as our system has never fully functioned as a sovereign credit system. While still being used to provide federal and provincial loans for industrial and infrastructural development from its nationalization in 1937 until 1974, the Bank largely operated under an accounting system without being tied to a national mission.
Canada’s two closest experiences with a Credit system were to be found from 1939-1945 via the system of Victory Bonds issued for the winning of World War 2, and again as the 1958 attempt by Conservative Prime Minister John Diefenbaker to create a conversion loan in order to re-tie maturing Victory bonds into newly issued “development bonds” tied to his “Northern Vision” policy. While the Victory bond system was discontinued in favour of a monetarist/Keynesian system after the war, the bank was still instrumental in providing loans to the government which were used to construct such nation building programs which blossomed until the 1960s.
The Diefenbaker “conversion loan” program was sabotaged by the British-run operation that led to Diefenbaker’s firing of the Bank of Canada’s Governor, James Coyne in 1960 under a national scandal that laid the seeds of Diefenbaker’s later downfall. By 1974, the Bank’s role in providing loans was given to the Big 6 Canadian Banks in conjunction with the destruction of the fixed exchange rate mechanism of the 1945-71 Bretton Woods System. This shift in paradigm from a pro-development to a pro-consumer model of society deregulated the world economy, unleashing a speculative economy of predatory debt, which has resulted in a Canadian debt bubble explosion from $28 billion in 1974 to over $600 billion today. In order for Canada to proceed into the 21st century, renewal of the Bank must necessarily occur under a new Hamiltonian charter such that large emissions of project-specific productive credit may occur.
These emissions would necessarily far outpace article 18 of the Bank of Canada’s charter* which stipulate that Bank of Canada loans be contained to within 1/3 the fiscal year revenue for the Federal Government (or 1/4 for the provincial governments), and that repayments to the bank occur within six months.
The physical economic demands faced by Canada and the world now far outpace the limits which those accounting rules impose upon our bank. We present here the history and developments that blossomed around the world out of the Hamiltonian Credit System, as a call towards a restoration of such a system and in hopes of inspiring nations around the world to commit themselves to the principles underlying a policy of productive public credit.
“Once a nation parts with the control of its currency and credit, it matters not who makes the nation’s laws. Usury, once in control, will wreck any nation. Until the control of the issue of currency and credit is restored to government and recognized as its most conspicuous and sacred responsibility, all talk of the sovereignty of Parliament and of democracy is idle and futile.”
-Prime Minister William Lyon Mackenzie King, upon nationalizing the Bank of Canada in 1937
Hamilton’s Credit System
The U.S. credit system is not merely a well-regulated currency where credit is available through banks, instead, the total organization of economy, banks, the currency and investments, are all geared toward growth. According to the first act of Congress following his first Report on Public Credit, no debt of the government was to be handled as a self-evident, monetary debt, but was tied together with a future income related to increases in productivity, regulated and facilitated by the Bank.
Hamilton viewed the currency not as wealth itself, but the constitutional responsibility of government to facilitate the scientific ingenuity and spirit of enterprise. In Hamilton’s Report on Manufactures, he laid down the essential principle of economy as a physical system of productivity. The primary measure of value is not capital, but the mental powers which increase the productive powers of labor, and thus increase the value of capital through increasing productivity and production. The determination of the value of goods, of labor, and of production is therefore those increases or decreases in the rates of productivity.
The lesson that governments in crisis need to learn today is that Hamilton’s action of turning monetary debts into credit debts in the immediate aftermath of the Revolutionary War, became more valuable to the growth of the economy, than if the full monetary debt had been forgiven.
Only with the establishment of a global credit system will mankind be given an honest chance to reach his full potential as a creative force in the universe, and defeat the imperial, monetarist interests that have forced much of the planet’s population into the bestial conditions of life today.
Hamilton’s action of turning monetary debts into credit debts… became more valuable to the growth of the economy than if the full monetary debt had been forgiven.