"Prosperity Certificates" Alberta's Debt Free Currency in the Great Depression
On August 22, 1935 the electorate went to the polls in massive numbers and voted Social Credit, giving them 56 of 63 seats in the Alberta legislative. In the great depression, William Aberhart felt that the solution would be for Alberta to take control of its own monetary system and get money flowing again to stimulate the economy. He proposed that every person in Alberta, man, women or child, should get $25 a month and if the Federal Government could not or would not help in this plan then Alberta should issue its own form of script "prosperity certificates" and go it alone.
Canadian politician and the seventh Premier of Alberta William Aberhart, also known as "Bible Bill" for his outspoken Baptist views, was the founder and first leader of the Alberta Social Credit Party, which believed the Great Depression was caused by ordinary people not having enough to spend. Aberhart told his followers. "You remain in the depression because of a shortage of purchasing power imposed by the banking system," "Social Credit offers you the remedy. If you have not suffered enough, it is your God-given right to suffer more. But if you wish to elect your own representatives to implement the remedy, this is your only way out." The depression is caused by not enough currency circulating to keep the economy strong. During his premiership, Aberhart campaigned for and instituted several anti-poverty and debt relief programs one of which was Alberta's Properity Certificates.
Aberhart had a first believed he could promote these ideas on his radio show and through his congregation but quickly realized that he would have to take direct political action himself. He made an attempt to convince the United Farmers of Alberta, the party in power in Alberta, to adopt his "social credit" policy but they refused. He then decided to form and support a Social Credit Party which would run against the U.F.A. in an upcoming Provincial election. The incumbent United Farmers of Alberta government was not willing to implement the more drastic policies that the Albertan electorate demanded.
Aberhart told his followers. "You remain in the depression because of a shortage of purchasing power imposed by the banking system," "Social Credit offers you the remedy. If you have not suffered enough, it is your God-given right to suffer more. But if you wish to elect your own representatives to implement the remedy, this is your only way out." The depression is caused by not enough currency circulating to keep the economy strong.
Once in power, political reality confronted Premier Aberhart. There wasn't enough money in the treasury to meet that month's government payroll, let alone pay 400,000 people $25 each in social credit. Aberhart immediately began to execute all of his plans and have Alberta print its own money. The certificates were not issued to the general public as Aberhart had promised in his election platform but instead "prosperity certificates" were used to pay only the Provincial employees beginning in August 1936. The amount of certificates in circulation was $239,391 (around $9 million in current dollars). A major issue was finding a retailer who would accept the unusual currency, the government itself would not accept the prosperity certificates for payment of taxes. By mid September 1937 60% of the certificates had ceased to circulate.
Prosperity Certificates Issued 1936-1937
Once Alberta began to print and distribute their own money or script, the supreme courts intervened and declared that the certificates weren't legal tender and ruled that monetary powers did not lay with the Provincial governments and that Alberta could not print it's own money. After the supreme court’s decision, even the beer stores, which were owned by the province, wouldn't accept them.
The actions of primer Alberhart was denounced in the press as dictatorial. Alberhat’s reply was "The spirit of Christ has gripped me," Aberhart responded. "I am only seeking to feed, clothe and shelter starving people. If that is what you call a dictator then I am one." Aberhart's government did successfully establish the Alberta Treasury Branches (ATB Financial), a government-owned financial institution to provide an alternative to existing banks, which continues to operate as a Crown corporation of the Alberta government.