1938: Alberta

Interim Program.

As 1938 came to a close, the Social Credit government of Premier William Aberhart entered a crucial stage. Provincial elections must be called for not later than Aug. 22, 1940. Although neither Social Credit nor the plan to give every citizen $25 a month in scrip has materialized. Premier Aberhart has risked his political future on what he calls his 'interim program.' This program was adopted after the Canadian Supreme Court, in a decision later upheld by the Privy Council, had ruled, on March 4, that three Alberta laws, the Credit Regulation Act, the Bank Taxation Act, and the Accurate News and Information Act, were unconstitutional. These three acts constituted the framework of the Social Credit program. Chief Justice Lyman Duff also handed down an opinion that the Social Credit Act, cornerstone of the structure, was beyond the jurisdiction of the province. A Securities Act imposing a 2 per cent tax on all first, second, and third mortgages, and a Home Owners' Security Act, both passed in 1938, were invalidated by the Dominion Government.

The interim plan of Premier Aberhart calls for the establishment of credit houses, or treasury branches, in all of the principal cities of the provinces. Citizens may deposit their money in these credit houses and receive vouchers in return for use in purchasing goods from such merchants as cooperate with the plan. If one-third of these vouchers are used for the purchase of goods made in Alberta, the Government agrees to give a $3 voucher bonus per $100 spent. It is hoped in this way greatly to stimulate the use of Alberta-made goods and natural resources. The Government also hopes that the plan will prove sufficiently popular as a half-way measure to enable it to call an early election and return the Social Credit party to power for another five years.

Critics of the Aberhart régime expect the interim program to fail as completely as the Government's early attempts to introduce Social Credit through issuance of flat money. They point out that Alberta has a trade turnover of some $150,000,000 yearly. If one-third of this were in Alberta-made goods and a 3 per cent bonus were paid on the entire amount, the Treasury would be compelled to pay out $4,500,000 each year, which is far beyond the capacity of a province already in default of many of its bonds. One factor operating in favor of the new credit houses is the fact that a number of branches of large Canadian banks were closed in early summer because of heavy taxation and difficult political conditions. Whether the credit houses will be trusted by the average citizen who refused to accept Aberhart's flat currency in the past remains to be seen. If they meet general approval. Aberhart will have control over the chief source of credit — bank deposits — without the regulation of the banks, which has been blocked by the Dominion Government and courts. The response thus far has been distinctly disappointing to the Social Credit leaders.

Politics.

The only test of the political popularity of the Aberhart régime during 1938 came on November 7 with the election of C. H. Tade, an Aberhart supporter, over C. J. R. Whiteley, Liberal, by a relatively close margin. It was the first by-election in a rural constituency which the Social Credit Government had been called upon to defend since its ascent to power in 1935. This victory was more than offset, however, by the setback suffered by the Social Credit party at the Saskatchewan elections in June. Premier Aberhart had laid much emphasis upon the necessity of spreading to other provinces if the party were to obtain sufficient power to introduce a genuine Social Credit program.

Premier Aberhart's long-standing feud with Lieutenant-Governor J. C. Bowen came to a head in the spring, when the Premier forced through an Order-in-Council compelling him to vacate the Government House. To avoid difficulty. Governor Bowen signed the order and vacated on May 10. In August the provincial government restored the Lieutenant-Governor's allowance for a secretary, chauffeur, and motor car, thus easing tension somewhat.

Economic Improvement.

It is generally agreed that the prospects of the Aberhart government in the forthcoming election depend largely upon economic conditions. After years of drought and hardship. Alberta enjoyed relatively good harvests in 1938, marred only by the damage done by a severe hailstorm in the north. As a result, unemployment was appreciably reduced. While a further improvement in business conditions may aid Aberhart by eliminating discontent, political observers feel that it would also reduce the popularity of panaceas such as those proposed by the Aberhart régime and would probably work for his overthrow.

Finances.

The provincial budget remained in balance by dint of an arbitrary cut in interest rates. Revenues for the fiscal year ending March 31, 1938, totaled $24,127,805 as against expenditures of $21,359,739. The over-all surplus, after deducting capital expenditures, was $1,083,494 as contrasted with $16,639,576 in the previous year. No provision was made for the sinking fund.