The New Age – June 29, 1933 – No. 2129 – Vol. LIII. – Pages 104- 105

The Douglas Cure for the Economic ills.

By Gorham Munson.

Part 2

[Mr. Munson, well-known American literary critic, in now the American representative of The New English Weekly.]

[This article is produced, with acknowledgements, from Current History (New York), May, 1933. – ED.]


            The second chapter of the Social Credit movement in England may be dated from 1922 to 1930. Mr. Orage passed most of his time in America as an expositor of the self-development school of psychology established by G. I. Gurdjieff at Fontainebleau. Major Douglas lectured and wrote two additional books: The Control and Distribution of Production (1922) and Social Credit (1924). Arthur assumed the editorship of THE NEW AGE. Under him it continued its advocacy of Social Credit, but its circulation fell away and it shrank in size. A few other Social Credit periodicals managed to exist, and a number of books and pamphlets were published, probably the best of these being This Age of Plenty by C. Marshall Hattersley. One other thing should be included in the record of this, the second stage of Social Credit as a movement. In 1927 the Kibbo Kift (a Cheshire word meaning “strength”) adopted Social Credit as its economic program. Previously, the Kibbo Kift had been a post-war youth movement in England devoted to camping, handicraft and world peace, but without a definite economic objective.

The third, and the most rosy, chapter of Social Credit opens in 1930 with the appearance of Major Douglas before Lord Macmillan’s Committee on Finance and Industry. This was important recognition, and since then the ideas of Major Douglas have come to the fore in circles of intelligent discussion. The Social Credit press in England has expanded. The Front Line, the organ of the Kibbo Kift, Purpose, a quarterly edited by W. T. Symons and Philip Mairet, and the British Crusader, published at Coventry, are examples. Furthermore, Mr. Orage has returned to London and thrown himself into the battle with a new paper, The New English Weekly.

             The Kibbo Kift has added colour. In association with the Legion of the Unemployed organized by George Hickling of Coventry, they have become known as the Green Shirts. They stand for discipline and action, take Fascist and Communist groups as models in respect of discipline. They hold street corner meetings and appeal directly to the working class, signalizing their fraternity with the workers by marching as a uniformed unit in the hunger march on London. The leader of the Kibbo Kift, John Hargreave, is a forceful, vivid personality. However, there is disposition on the part of many Social Credit adherents to regard the Kibbo Kift as the Boy Scouts movement.

            The recent rapid spread of the Douglas ideas in England, however, is due to the Marquis of Tavistock, who is the head of the National Credit Movement. He has succeeded in inducing a number of credit-reformers to join hands on certain issues whereon they are agreed, and the meetings he has organised have been well attended. Over 10,000 Englishmen, among them some of England’s keenest brains are convinced that Social Credit is the only way out of the present difficulties, and they have the comfort of knowing that their scheme has been studied by the British Treasury and the Bank of England for possible emergency use.

In Scotland, apart from a weak Scottish nationalist movement which has become friendly toward the Douglas proposals, the principal event has been the publication in the Glasgow Evening Times (March 11, 1932) of the Scheme for Scotland drafted by Major Douglas and the discussion and the well-attended lectures that ensued. In South Africa there are Social Credit groups, and the subject gets into the Press, but here again the movement is weak. In Canada, particularly in the farming region of Alberta, there is an active Social Credit party, and they have actually succeeded in electing members of Parliament.


For the pyrotechnics of Social Credit, however, we must go well around the globe to New Zealand and Australia. There are no less than sixteen Social Credit members in the New Zealand Parliament, and for their leader they have a remarkable orator, Captain Rushworth. “Given the chance to apply Social Credit to New Zealand,” he declared in a recent speech, “I will guarantee to establish prosperity within three months, with a shooting-party as the penalty for failure. I stake my life on the remedy.” There are three Social Credit papers in New Zealand: Farming First, with the motto, “More goods for Less Money”; God’s Own Country (and the Devil’s Own Mess), and Plain Talk.


In Australia there are now a thousand Douglas Credit Societies and over one hundred thousand solid supporters – a high number when we consider the population of Australia. Australia in fact made an early start when in 1921 Professor Irvine, holding the economics chair in the University of Sydney, set Major Douglas’s Economic Democracy as the text-book for honours in economics, and when in 1922 E. Jerdan gave twenty-five lectures on Social Credit to the Sydney University tutorial classes. From these academic beginnings the movement grew slowly and then with a rush in recent years, during the battle between Premier Lang of New South Wales and the banks. Its leading weekly, The New Era, has a circulation of seventeen thousand; lecture audiences number up to two thousand; radio talks occur with frequency. Even the economic advisor of the Commonwealth bank, Professor Copland, has publically debated on Social Credit and pamphleteered against it. On the other hand, the New South Wales Government has recently promised to make an official inquiry into the subject.

Even higher hopes for the adoption of Social Credit are placed on President de Valera of the Irish Free State. It has been known, for several years that he was studying the Social Credit scheme, but what he thought of it no one knew. Now, Social Credit thinkers see in his recent policy of economic self-sufficiency signs of gravitation toward the principles of Major Douglas. “Mr. de Valera,” Mr. Orage recently wrote, “is the first Prime Minister in all history who understands the principles of Social Credit and shares its economic ideals. And he is not the man, we believe, to shirk the responsibility or miss the occasion for making a momentous contribution to the world’s peace and progress.”


In the United States the movement is still very young. Of the six or seven American groups the most active are the New Economics Group of New York and the San Francisco group organised by Dr. T. Addis of the Stanford University Medical School. The New York group has issued a pamphlet, Financial Freedom for Americans, modelled on Samual Adam’s idea of a committee of correspondence, and it has prepared a plan for the State of New Jersey, which has been submitted to New Jersey officials and the Chambers of Commerce of that State.

Major Douglas’s central ideas cannot be put into melodramatic language or simple slogans, such as usually inspire popular revolutionary movements. He claims to be a technician, asserts that there is a technical flaw in the price system and prescribes a technical remedy. Furthermore, he himself has played no ogranising part in the whole movement here described. He is officially connected with none of its papers or societies and holds himself aloof from political propaganda. If the British government should in desperation call on him, he would advise the following steps be taken: (1) The setting up of the national credit account, (2) the distribution of national dividends to all, and (3) the institution of the scientific price calculus. The first step would enable the community to convert its real credit into financial credit. Major Douglas claims that now financial credit should but does not reflect real credit (defined as the correct estimate of a nation’s ability to deliver goods and services as, when and where required). The second step looks toward the supersession of the wage system by dividends based on an unclaimed cultural legacy, the “state of the industrial arts,” Veblen called it. The third step involves the scientific regulation of price in accordance with the physical realities of production and consumption.


What Major Douglas contemplates is a bookkeeping revolution which will, he claims, expand the volume of money and lower prices simultaneously. No confiscation, no expropriation, no “nationalising” of the banks, no class war, no political revolution is proposed – nothing but the transforming of finance from a veil to an accurate mirror of industrial facts. And the consequence of this bookkeeping revolution? According to his enthusiastic followers, it will inaugurate the “Age of Economic Democracy” marked by the distribution of plenty and leisure. The chief objection they encounter is that the Douglas prophecy is too good to come true.


A very interesting Utopian novel could be written showing concretely the working of the Douglas scheme. It would describe the United States, Inc., in which each citizen was a shareholder, receiving a national industrial dividend, computed according to the real wealth of the nation. Armed with this free purchasing power, he would visit the shops for his cigarettes, magazines, shoes, food; he would meet his obligations to landlord and telephone company; he would seek places of recreation – and everywhere he would encounter reduced prices for consumers’ goods, the prices, let us say, being one-half of what they had been and the reduction being calculated by discovering the ratio of total consumption in the previous accounting period and total production. Thus, not only would the shareholder-citizen have more money but at the same time, because of lowered prices, it would go much farther.


The retailer would perhaps at first find the lowered price perplexing and disturbing. But his goods would be moving at a much-quickened rate out of his shop, and behold! When he deposited the sales receipts at his bank, the bank marked up his deposits to twice what he put in and charged the national credit account. He would be making more profit because he would be selling more goods at a faster rate. The wholesaler would be flooded with orders; the wheels would turn. If our novelist had a robust sense of life and genuine delight in merriment, he might make much of this picture of a society governed by the new principle adequate purchasing power for all and the devil take the reckless, setting it in contrast with the drab novels picturing society debased by the working principle of insufficient purchasing power for the community and the devil take the hindmost. He might be applauded for this gift of fantasy – but the persons in the movement described in this article stoutly maintain that his fantasy can become actuality.


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