HIGH FINANCE: Social Credit in Buffalo

In the days of Technocracy, a retired Scottish engineer named Major Clifton Hugh Douglas, having long sensed a bankers’ plot to keep buying power out of motion, brought his Social Credit movement to North America. Its theory—that the State should credit “National Dividends” to its citizens to increase their buying power—was intriguing enough to carry Alberta’s provincial election in 1935. Fortnight ago in Buffalo, N. Y., a practical reformer launched a version of Social Credit that would have sent Major Douglas staggering to a neutral corner.

Up to a Buffalo Negro car washer sidled a stranger, asked him point-blank if he wanted $231. Said the Negro: “I’m on the legit, boss. I ain’t looking for no racket.” Nevertheless he was lured to the downtown office of the National Depository of America. The U. S., explained the Depository, has $30,000,000,000 in idle, i.e. “decirculated,” currency. It also has 130,000,000 people. This works out to $231 for each of them. To get yours, all you have to do is pay $1 a month to the National Depository of America. For this you get a mandate to act as if you already had the $231. You are entitled to write checks up to $231 which the National Depository will “credit” by allowing anyone getting your check to deposit it, to start another account at the Depository—provided he starts paying $1 a month too.

The Negro paid his dollar. Then he took his “checkbook” to the nearest liquor store, which promptly called the Better Business Bureau, set Manager Gordon Smith investigating. The National Depository of America, he found, is the brain child of Frank O’Hearn, a former Toronto broker. Since 1932 his avocation has been economic theorizing. Its culmination is the National Depository, whose purpose is to “bring permanent prosperity to America.” Its details he guards with crusty jealousy. After all, says O’Hearn, it took him eight years to figure out the scheme, so he doesn’t expect anybody to grasp it in half an hour.

By last week Frank O’Hearn’s eight years seemed to have gone for naught. Buffalo newspapers refused to carry a deposit advertisement. Panicky Buffalo merchants who had accepted National Depository “checks” scrambled to get back goods or cash. The New York State Banking Department Examiners moved in to investigate. While Frank O’Hearn’s son and chief helper, Douglas, sought to splice the parting strands of his father’s dream, Father Frank was kept from re-entering the U. S. after a weekend in Toronto. Reason: the Better Business Bureau tipped off the U. S. Immigration Service that he might have violated the law by going to Buffalo on a visitor’s pass, starting a business venture. O’Hearn appealed. Insisting that the National Depository was no business venture but a “nonprofit” philanthropy, he offered to take in the U. S. Government as a partner. Latest students of the O’Hearn plan: reformers from the Attorney General’s office.