Mr. BLACKMORE:

Mr. DUNNING:

The answer to that question is very important.

Mr. BLACKMORE:

Very true. But the big question is this: Did the amount of money they could have created depend upon the gold that they happened to have, or the goods and services they could produce and deliver?

Mr. DUNNING:

It does not depend on either.

Mr. BLACKMORE:

It depends in fact on the exchanges, on the use for the money. Is not that so? I wish that hon. gentleman had remained here; I have forgotten his name and constituency. Those questions will be answered before we get through. Now, the value of the money, or the amount of money which a community can have, depends upon the exchanges. Observe that the man did not have to have a tag until he wanted to exchange a cow for grain, but as soon as he wished to effect that exchange he had to have a tag. The more such exchanges he had to make the more tags he had to have. And that holds true with the country. This is an abstruse and intangible problem, difficult to predict and measure, I grant. Up to the present men simply do not know how to measure it; we grant that. But it is certain that there is a relation between the number of exchanges to be effected in the country and the amount of money the country can use. The question is: How many exchanges will the people of Canada make with each other if they are given a chance? Upon the answer to that question depends the amount of money Canada can have, and whether or not the government of Canada back in those war days could have created $160,000,000 instead of $16,000,000, and still have had sound money. Let me hasten to say that I do not wish to have any of the statements I make taken and interpreted in a broad way; it is impossible, as all hon. members know, and as the Minister of Finance knows very well, to make a statement without having plenty of time to qualify it.

Mr. DUNNING:

That is frequently true of the hon. member's quotations.

Mr. BLACKMORE:

Exactly so. I have exerted all the intelligence, ability and industry that I possess in reading these books with the most minute care to make sure that the interpretation I have put upon the quotations is correct according to the meaning of the author. And I tell hon. members where they are found in order that they may read for themselves. Read the books through and see

whether you agree with the author. I can get no other meaning from what they say than that which I give here.

I have here two other quotations, one from Sir Norman Angell, and one from Sir Basil Blackett's book, Planned Money, pages 103 and 106, which bear out the statement that the amount of money that a country can have depends on its exchanges.

Having covered the question of what gives value to money, let us turn to another question which is fundamental to social credit. I am sure some hon. members will be surprised to hear that social credit stands for king-created money, money created by the sovereign, by the crown. That is just a ready way of expressing the thought. It is crown-created or government-created money. At the risk of boring the house I wish to review for a few minutes the history of English money. Let us go back into the past and see what they did in ancient times and whether when the king created money it caused inflation. Were the kings able to regulate the money, and did they do so? I found some very enlightening books on this question, from which I am drawing the information which I now give to the house.

Edward III was the first king who commenced to manage English money. In 1346 he reduced the penny from twenty-two grains troy of silver to twenty grains. Hon. members would say that he debased the coinage. But it did not work that way. In 1351 he issued a new penny containing eighteen grains. His reason was that he knew the country needed more money, and apparently the only silver they had was what was in their coins, so that new coins were made containing a smaller amount of silver.

Mr. REID:

The hon. member is wrong;

he did it to make a profit for himself.

Mr. BLACKMORE:

I am glad the hon. member is so free to challenge my statements.

Mr. REID:

I can prove it.

Mr. BLACKMORE:

I refer my hon. friend to The Breakdown of Money, pages 41 and 43; he will find much enlightenment there. Henry IV in 1412 reduced the penny to fifteen grains. Thorold Rogers in his History of Agriculture and Prices says that there was no rise in prices. Now, that is significant. There is a case where the amount of money was increased and the actual value in the money decreased, but there was no fall in prices. Why? Because the productiveness of the country had increased meanwhile, and the country really needed more money. Edward IV in 1464 reduced the penny to twelve grains, and prices remained absolutely stable. Henry

Use of Canada's Financial Resources

VIII debased the money in 1542-this is what the hon. member for New Westminster (Mr. Reid) had in mind; he did it to make a profit.

Mr. REID:

So did the others, every one of them.

Mr. BLACKMORE:

Mr. DUNNING:

No, no.

Mr. BLACKMORE:

I am glad the Minister of Finance is so confident that that is not so.

Mr. DUNNING:

I do not think anyone in Canada contends that the money created by the government of this country is not good money, and I do not think our educational system in any part of the country teaches such a thing. I think that is incorrect.

Mr. BLACKMORE:

Our educational system and our propaganda do contend, though, that if the government creates a dollar bill it is inflation.

Mr. DUNNING:

No, no.

Mr. BLACKMORE:

I am delighted to hear the minister say that, because when we have been contending for state money the answer has been that it will cause inflation.

Mr. DUNNING:

We have state money. You have some in your pocket; I have some too. I wish I had more of it. Of course it is state money.