Alberta’s Rockefeller Coups, Part 2: Who Would Do This To Themselves?
Former Premier of Alberta between 1943 to 1968, Ernest Manning. Image Credit: Government of Alberta.
Written by: Regan Boychuk
Author’s note: At the end of the First Cold War, Canada tried to make the polluter pay. This resulted in the United States launching an unknown, but successful coup in Alberta over the course of 1991-92. And the results of that coup are the single biggest threat to a liveable future.
This will look at the secret January 17, 1991 ‘no-lookback’ deal over oilfield cleanup, the December 5, 1992 selection of Ralph Klein as the leader of Alberta’s governing party, and the April 9, 2003 US recognition of Alberta’s oilsands as “bankable” reserves.
Editor’s note: This series was originally published on Capital As Power. There are now three parts to this series.
Who Would Do This To Themselves?
Two men have been supreme in creating the modern world: Rockefeller and Bismarck. One in economics, the other in politics, refuted the liberal dream of universal happiness through individual competition, substituting monopoly and the corporate state, or at least movements towards them. [1]
— Bertrand Russell 1934
Ernest Manning’s father left a wealthy British market town where an Anglo-Saxon king and a French Tudor queen are entombed to become a farm labourer in Manitoba. Ernest’s mother stayed behind to ‘continue working as a live-in lady’s maid at a stately home near Piccadilly Circus in London’ until George Manning established the family’s first homestead in eastern Saskatchewan. [2]
Only occasionally attending Methodist church as a child, Manning considered himself a nominal Christian at best. But a 14-year-old Ernest mail-ordered a $1,750 CAD 30-foot radio tower (2022-dollar value), apparently because he liked to read Popular Mechanics and the Sear’s catalogue. It took Ernie another few months to scratch together the customs duty on his big investment from Chicago, but ‘the fire-and-brimstone radio broadcasts from a forty-seven-year-old Calgary high-school principal and self-taught Bible scholar’ it beamed in are supposed to have changed Ernie’s life. Barely two years after taking delivery of his radio tower, a 17-year old Ernest bought a suit from the Sears catalogue again, took the train to Calgary to meet ‘Bible Bill’ Aberhart, and returned to Saskatchewan to listen to Aberhart crowd-source $1.1 million CAD (2022-dollar value) over the spring and summer of 1927 to build a bible college in Calgary. Ernest Manning would be its first student that fall, taken in as the son-they-never-had by the Aberhart family the following year, would be the school’s first graduate, and soon after Aberhart’s “Echo” on the radio as the Great Depression set in. [3]
Manning would disown the Aberhart family just as he had the family he left behind in Saskatchewan, but not before guiding Aberhart to adopt the ill-fitting political philosophy of social credit (which Ernest Manning’s son Preston derides as a mixture of “pre-Keynesian economics, social resentment, and untutored hope”) and riding political discontent and scandalous accusations during the Great Depression into provincial government on August 22, 1935. At 26, Ernest Manning was the youngest cabinet minister in the British Empire, and when Aberhart died in 1943, Manning succeeded him as premier until retiring after 33 years in legislature in 1968. Ernest Manning’s first order of business in 1935 and throughout was to entice outside capital to invest in Alberta oil, but his sly creation of Savings & Loan (S&L)-style “state credit houses” would also prove to be of great consequence in 2003. [4]
On November 22, 1938, Manning established Alberta’s new oil and gas regulator as above the law and the province ceased to be a democracy. Oil wore an American crown here and Manning bowed to it. In 1936, Alberta had become ‘Canada’s first, and only, province to default on a principle debt payment.’ What’s more, ‘Alberta’s provincial government was committed to thwarting the claims of finance capital.’ Manning had tapped the US-born Nathan Tanner as energy minister, who cabled Washington, DC asking for recommendations from the US Department of the Interior. The head of Alberta’s first real regulator was American William Knode from the Texas Railroad Commission. After a special session of the legislature, the new Oil and Gas Resources Conservation Act was revised to give the regulator ‘remarkably wide-ranging authority’, ‘not obliged to hold hearings or to give reasons for its decisions.’ [5]
Shortly afterwards, Manning, Aberhart, Tanner, and Knode spent an unexplained month in Britain. The pretense was raising money for investment in Alberta oil, but with Alberta still in default to international creditors and war clouds looming over Europe, there was no hope of raising British capital. Instead, in hindsight, the trip to London looks like the transfer of Alberta (and Palestine? Australia?) from the royal British empire to the Rockefellers’ private empire. A new British Colonial secretary was appointed briefly on November 22, 1942, who asked the Canadian government whether it endorsed the idea of ‘Parent States’ after WWII. The Canadian government did endorse the idea – small wonder that Prime Minister Mackenzie King received a $1.3 million CAD dollar gift from his best-friend-for-decades, John D. Rockefeller Jr., upon his retirement. Having exchanged secret messages for decades, the Rockefeller Foundation also gave $1.3 million CAD to arrange Mackenzie King’s papers for publication. [6]
The first acts of Manning’s new regulator slashed Alberta oil production by more than 60 per cent in the fall of 1938, prompting a Royal Commission and that special session of the legislature. The Chief Justice of Alberta’s Supreme Court, Alexander McGillivray, led the commission. Justice McGillivray’s sage advice fell on deaf ears and McGillivray died of a heart attack at the age of 56 the year his report was published by Imperial Oil in Calgary. The first American head of the Alberta regulator had returned to Washington after his trip to London, leaving the position empty for more than a year. American Robert Allen eventually replaced Knode, but also left abruptly in the summer of 1941, this time “to advise the US government on growing oil supply and distribution problems”.
“At first, it was considered that Allen was on loan to the US government, but it soon became apparent that he would not be returning to Alberta [either].” [7]
In hindsight, the August 1941 Atlantic Conference between the US and UK (signed amid great secrecy off the coast of Newfoundland) also takes on new significance. Roosevelt’s soft support for eventual decolonization was being outmaneuvered by the Rockefeller faction of US politics, and inviting both the president’s sons to the secret Canadian flotilla is likely to have given others a chance to solidify the transfer of Alberta (and Palestine? Australia?) from UK to US monarchs. Just before the Rockefellers first foisted ‘conservation’ on the US state through the President’s Federal Oil Conservation Board in December 1924, the oil industry warned New York Times readers against any increase in drilling activities. Cities Service head Henry Doherty said, “If we do not get our house in order sooner or later some one else will attempt to do it with a stick of dynamite or an axe.” It was just before the Atlantic Charter secured the unique ‘special relationship’ between the US and the UK that Alberta’s first commercial bitumen production began. It was shortly after the Atlantic Charter that Abasand Oils was destroyed by fire. In case anyone thought that was an accident, it burned down again very shortly after Abasand had been rebuilt with federal money to help meet wartime demand. The second fire convinced Ottawa to retreat from 30 years of research, leaving bitumen development to Manning. [8]
By April 1943, Aberhart was too worn out to perform his duties as Alberta premier. Diagnosed with liver cirrhosis usually associated with alcohol abuse, no one ever implied Aberhart had a drinking problem. (At this same moment, across the Atlantic, a British colonial official remarked without elaborating about how the US notion of ‘independence’ was nominal at best. “The Americans are quite ready to make their dependencies politically ‘independent’ while economically bound hand and foot to them and see no inconsistency in this.”) A month later, Premier Aberhart’s liver failed, he slipped into a coma, and he died before Manning had arrived by train. It was only after Aberhart’s death that creditors would meet with the Alberta government. The plan to exit bankruptcy evolved in an unusual way: ‘Clearly this was a plan that had the involvement and backing of the Dominion Government, the Bank of Canada, and representatives of domestic and foreign bondholders and knowledge of its existence limited to only a few key players in the Alberta government.’ [9]
And in case there were any doubts left about lightning striking Abasand twice or if Alberta’s Chief Justice had died of natural causes in 1940, the first real Albertan in charge of the oil and gas regulator died of a heart attack just four days after signing a very smart deal with Imperial Oil nemesis Shell, who’d discovered Alberta’s biggest gas field at Jumping Pound in 1944 and by 1945 was ready to develop the field cooperatively as a single unit – the supposed industry ideal. Like Rockefeller Sr’s early opposition to the pipeline, Dr. Edward Boomer’s October 1945 ‘heart attack’ suggests there is something more than efficiency driving the Rockefeller machine. [10]
With the Chief Justice knocked off, the premier dead, the war with bankers over, the feds scared off, an uppity local regulator put six feet under, and WWII ending with rapidly growing demand for petroleum, Alberta was finally ready to be incorporated into the global supply system coordinated by ‘the Seven Sisters cartel’, as Enrico Mattei coined Big Oil. Alberta’s first big oil gusher, February 1947’s Leduc #1 was carefully planned, blowing-in to a crowd of hundreds. A ‘surplus’ WWII refinery in Alaska was purchased from the Pentagon for a song, dismantled, and trucked to Edmonton for the Leduc field, with a pipeline to Imperial Oil’s Ontario refineries also following before long. (Manning’s energy minister Tanner exited politics through the revolving door in 1952 ‘to make his fortune in oil and gas, notably as the first president of Trans-Canada Pipelines; [in 1979, he was] a senior Elder in the Mormon Church hierarchy in Salt Lake City, Utah …’) [11]
In early 1948, Manning was not yet in complete control or did not prevent the populist impulses of his Social Credit party implementing a royalty bonus program that saw Imperial getting outbid for parcels by independents willing to give the province 50 per cent or more in extra royalties. Within days of the second sale under the new royalty bonus program, the Atlantic #3 well in Imperial’s field blew out for six months – through an entire provincial election campaign – until royalties were legislatively capped at 16.67 per cent and the royalty bonus program was not just cancelled, but the second sale was redone under new cap. In case anyone on earth didn’t get the message, just as the first relief well began pumping water to finally snuff out the Atlantic #3 blowout, it caught fire, burning apocalyptically for almost a week. It remains Canada’s largest onshore oil spill, but is missing from the Alberta Energy Regulator’s spill database. The environmental terrorism of Atlantic #3 also settled the question of liability for such ‘accidents’: settled out of court, the driller (who’s name still graces Calgary’s professional football stadium) merely had to pay for the cleanup with revenue from oil recovered from the spill. The Atlantic #3 crisis also marked the moment when Manning asserted dictatorial control of the Social Credit party that had been led by Aberhart. [12]
Figure: A blowout at Atlantic #3 in 1948.
The Manning’s Rockefeller dictatorship in Alberta culminated in the scheme unveiled as a fait accompli on the 1959 anniversary of Leduc #1 (and the British retreat from Palestine): a nuclear blast in Fort McMurray to double the world’s oil reserves in an instant. The insane scheme was approved at every level of the provincial, federal, and US governments. There were no hearings or environmental studies, the oversight committee was toothless by design. The Rockefellers were only denied the status of the world’s first trillionaires by Canadian Prime Minister Diefenbaker, who used the anti-nuclear movement as the excuse for protecting Alberta and everyone else. Under President Kennedy, the Rockefellers coup’d Diefenbaker in 1963 to pave the way for the Vietnam war-assisting-war-criminal, Canadian Prime Minister Lester Pearson.[13]
When US imperial state planners spoke of oil reserves on a scale to “constitute a stupendous source of strategic power, and one of the greatest material prizes in world history”, they refer to Saudi Arabia, but they mean Alberta.[14]
The US in Saudi Arabia enjoyed nowhere near the control the Rockefellers had over Alberta reserves and profits + rents. There is a perfectly Alberta-shaped hole in the history of the planning for post-WWII. Because Alberta was already in the back pocket of the architects of that New World Order.
Pre-war imperial arrogance lived on in the new hegemon. When the Rockefellers launched the career of the ever-loyal future secretary of state Henry Kissinger in 1958, advisor to a half-dozen presidents and Kissinger’s guide at Harvard, Professor William Elliot called for more “good colonialism” selling “colonial peoples” on the idea their resources are a “trust for the world”: “tribal chieftains … claim[ing] absolute power over resources … is evidently absurd”. Energy regulation has been profoundly corrupted by capture since inception, but it reached its zenith in Alberta. From November 1938 until August 1971, the regulator was explicitly above the law. Alberta’s democratic interlude, 1971-1991, threatened all that. Naturally, Rockefeller academics and economists responded. University of Chicago economists George Stigler and Richard Posner invented the strawman of ‘public regulation theory’ out of whole cloth, publishing in a virtually-in-house journal a few months before the end of the gold standard. [15]
The Rockefellers’ grand scheme of financializing entire oilfields had been thwarted in 1959, but the August 1971 US ending of the international gold standard presented another opportunity. Lucky for everyone else, the election of Peter Lougheed as premier of Alberta two weeks later robbed the Rockefellers of control of a provincial savings & loan to begin mortgaging entire oil fields. The Rockefellers had to settle for using American S&Ls centered around more piecemeal US oil reserves in California and Texas, crimes that landed a thousand banking executives in prison (back when there was such a thing as regulation). As the documentary series The Con details, one of the S&L scammers stayed out of jail to found the sub-prime mortgage industry in the 1990s. [16]
There is a direct connection between the occupation of Iraq and the sub-prime mortgage predation that soon after ravaged America: It was all part of the Rockefellers’ ultimate scheme being realized in Alberta.
As late as 2003, Alberta’s proven bitumen reserves still stood at only three billion barrels. The day US Marines pulled down that statue in Baghdad, the US Energy Secretary informed Alberta it now had an extra 175 billion barrels of proven oil reserves in Fort McMurray. Six months later, the recommendations of a 1998 Alberta oil & gas taskforce became National Instrument 51-101: Standards of Disclosure for Oil and Gas Activities in September 2003. NI 51-101 is a hoax that allows reserves to be used as legal collateral by licensees, regardless of cleanup costs, ability to develop, or profitability. In less than a year, the FBI was reporting an epidemic of mortgage fraud by lenders. The Con also details the mortgage foreclosure fraud that cheated tens of millions of Americans, and at that same moment, the Rockefellers pulled the trigger on a little-known (to put it mildly) clause of the 1913 Federal Reserve Act that allowed them to take the final step to domestic monarchy: The illegal use of FRA 13(3) in 2009 took the Rockefellers from printing new money using other peoples’ oil as collateral to simply printing $29 trillion straight from the US Federal Reserve and handing it to Wall Street. [17]
These are the main sources of global financial instability/imbalance and the seemingly endless supply of bad loans for oil & gas & bitumen Ponzi’s in North America.
Rockefellers and the damage of private ownership of natural resources
Two weeks before the infamous April 1914 Ludlow Massacre ushered in the ferocious first wave of reaction against burgeoning political democracy, John D. Rockefeller Jr. appeared before a congressional investigating committee defending his opposition to collective bargaining. Asked by the committee chairman if he would maintain his opposition “if it costs all your property and kills all your employees?” Rockefeller answered, “It is a great principle.” The same logic remains at the heart of the Rockefellers private empire through today. Canada’s longest-serving prime minister was Rockefeller Jr’s BFF, but was aghast at the scale of wealth being transferred into private hands. Mackenzie King wanted better for Canada, but his compromises with the Rockefellers betrayed those aspirations. What Mackenzie King confided in his diary as he toured the Colorado coal fields on behalf of the Rockefeller Foundation in 1915 has not yet come to pass, but still could at any moment:
The only defense there can be for private ownership in natural resources is the corruption incident to government ownership and the check which would be placed on development if the possibility of reaping large fortunes did not exist as an inducement for the investment of private savings. Were men honest and actuated by a sense of duty in their personal relations, private ownership in natural resources would not last for a day. It is because men know that human nature is as weak as it is that they feel obliged to penalize themselves by permitting a sort of natural selection in the matter of cupidity and daring to determine who are to be the controllers and possessors of great wealth as against its real owners, the people as a whole. [18]
But there is more than hope. As dark as the above truths are, there also happens to be nearly certain to be another chance for democracy in Alberta soon. The world’s greatest crime is set to cure itself next spring, if only Canadians are able to pressure Alberta’s New Democratic Party leadership to pursue the province’s interests at the expense of the Rockefellers.
In the course of preparing for the greatest crime in history, the Rockefellers blessed Alberta with our own (almost) bank: ATB Financial. As Lenin advised not long after Ludlow:
Capitalism has created an accounting apparatus in the shape of the banks, syndicates, postal service, consumers’ societies, and office employees’ unions. Without big banks socialism would be impossible. The big banks are the ‘state apparatus’ which we need to bring about socialism, and which we take ready-made from capitalism; our task here is merely to lop off what capitalistically mutilates this excellent apparatus, to make it even bigger, even more democratic, even more comprehensive. Quantity will be transformed into quality. A single State Bank, the biggest of the big, with branches in every rural district, in every factory, will constitute as much as nine-tenths of the socialist apparatus. This will be country wide book-keeping, country-wide accounting of the production and distribution of goods, this will be, so to speak, something in the nature of the skeleton of socialist society. We can ‘lay hold of’ and ‘set in motion’ this ‘state apparatus’ (which is not fully a state apparatus under capitalism, but which will be so with us, under socialism) at one stroke, by a single decree, because the actual work of book-keeping, control, registering, accounting and counting is performed by employees, the majority of whom themselves lead a proletarian or semi-proletarian existence. [19]
Ernest Manning faked social credit (along with everything else) to get elected during the Great Depression, but there is a genuine and extremely pertinent thread of logic to public banking and debt jubilees in an age of financial and climate crisis. Ernest Manning’s political opponents brought the British founder of Social Credit to Alberta to assess the situation in 1937, where a Social Credit government was failing to live up to its name. His advice remains tantalizing in its potential. Our greatest obstacles remain our own imaginations:
I do not suggest that the financial interests in their turn have not the power to inflict damage upon Alberta but I do not believe that that power, if seriously challenged, is anything so great as it is popularly supposed to be. Nor do I think that the condition of affairs in Alberta would be very much worse, except possibly for a very short time, if such ill-advised action upon the part of the financial authorities were put to the test. The financial system is essentially a system of black magic and one of the best protections against black magic is not to believe in it. [20]
References
1. Russell 1934 p. 357
Russell 1934 Bertrand Russell Freedom and Organization, 1814-1914 [1934] New York: Routledge 2001↩︎
2. E Hyde 1946 p. 521 (US foreign policy on oil reserves); Encyclopaedia Britannica Bury St. Edmunds; Magna Carta 2014; Russell 1934 pp. 357-59 & Handlin 1955 (Rockefeller Sr’s character); Taylor 2019 pp.12-13, 51-52 (Imperial takeover by Rockefellers); Spaulding 1993 pp. 68-71 (early Rockefeller spending in Canada); Patnaik & Patnaik 2021 pp. 113-20, 126-27 (imperialism: ‘appropriating surplus without any quid pro quo’)
Hyde 1946 Charles Cheney Hyde “Protection by the United States of American-owned property in war-stricken areas” Columbia Law Review v46#4 (July 1946): 519-32
p. 521: “‘In the early twenties the United States Government strongly urged that American oil interests expand abroad and develop adequate reserves …With the strong diplomatic backing of their government, American operators embarked on exploratory efforts in many parts of the world.’ The interest of the United States in the matter was revealed by Mr. Kellogg, Secretary of State, in a communication to the Secretary of the Navy, June 29, 1928, when he said:
“The Department of State in connection with rendering assistance and support to American companies seeking or operating petroleum concessions abroad, is constantly seeking the recognition and practical application by foreign governments of the policy of the open door and equality of commercial opportunity. It is obvious that such a policy can be followed only as long as the United States accords to nationals of foreign countries treatment similar to that sought by this Government for its nationals abroad. …
“In view of the extent of our probable future dependence upon foreign reserves of petroleum, the importance of keeping the Government of the United States in a position consistently to support and assist American interests will, I am sure, be appreciated. Accordingly, I consider it important that no action be taken in the United States discriminating against foreign interests as such in the oil industry.””
Encyclopaedia Britannica “Bury St. Edmunds” in Encyclopaedia Britannica: A dictionary of arts, sciences, literature and general information [1768-71] 11th edn (New York: Cambridge University 1910): 868
p. 868: “BURY ST EDMUNDS, a market town … 87 m. N.E. by N. from London by the Great Eastern railway. Pop. (1901)16,255. It is pleasantly situated on a gentle eminence, in a fertile and richly cultivated district. The tower or church-gate, one of the finest specimens of early Norman architecture in England. … St Mary’s church … was erected in the earlier part of the 15th century, and contains the tomb of Mary Tudor, queen of Louis XII of France. … All these splendid structures, fronting one of the main streets in succession, form, even without the abbey church, a remarkable memorial of the wealth of the foundation. …
… Bury St Edmunds (Beodricesworth, St Edmund’s Bury) … was one of the royal towns of the Saxons. Sigebert, king of the East Angles, founded a monastery here about 633, which in 903 became the burial place of King Edmund, who was slain by the Danes about 870, and owed most of its early celebrity to the reputed miracles performed at the shrine of the martyr king. … There was formerly a large woollen trade.”
Magna Carta 2014 “History of the Magna Carta: 800 years of liberty: Bury St. Edmunds” Magna Carta Trust (2014)
“Bury St Edmunds has a pivotal role in the history of Magna Carta. One chronicler relates that in 1214 a group of Barons met in St. Edmunds Abbey Church and swore an oath to compel King John to accept The Charter of Liberties, a proclamation of Henry I. It was the direct precursor to Magna Carta a year later.”
Russell 1934 Bertrand Russell Freedom and Organization, 1814-1914 [1934] New York: Routledge 2001
pp. 357-59: “[John D. Rockefller Sr’s] father kept his occupation a secret: he was, in fact, an itinerant pill-doctor. …”Dr. William A. Rockefeller, the Celebrated Cancer Specialist” … was often in trouble with the police, and on one occasion the farm was sold for debt; owing to his escapades, the family had to make frequent moves. He was very proud of his shrewdness, and would boast of his skill in outwitting people. “He trained me in practical ways,” said his son John. “He was engaged in different enterprises and he used to tell me about these things and he taught me the principles and methods of business.” The father’s own description of his teaching the “principles” of business is simpler: “I cheat my boys every chance I get. I want to make ’em sharp. I trade with the boys and skin ’em every time I can. I want to make ’em sharp.”
… Poverty, frequent moves, his mother’s unhappiness, and the neighbours’ hostility must have made a deep impression upon him as a child. Although he could be bold in business, he always feared the crowd, and sought secrecy instinctively, even when it served no purpose. The timid man who wants power is a very definite type. Louis XI, Charles V, and Philip II are instances: pious, cunning, unscrupulous, industrious, and retiring. But power, for Rockefeller, could only be obtained through money.”
Handlin 1955 Oscar Handlin “Capitalism, power, and the historians: An essay review” New England Quarterly v28#1 (March 1955): 99-107
pp. 99-102: ” Capitalism and the Historians. By T. S. Ashton, Louis Hacker, F. A. Hayek, W. H. Hutt, and Bertrand de Jouvenal. Edited with an Introduction by F. A. Hayek. (Chicago: The University of Chicago Press. 1954. Pp. viii, 188. $3.00.)
Study in Power. John D. Rockefeller Industrialist and Philanthropist. By Allan Nevins. (New York: Charles Scribner’s Sons. 1953. 2 vols. Pp. xviii, 441, xii, 501. $10.00.)
The volume of essays edited by Professor Hayek is a disgraceful performance. That occasional grains of truth are scattered through it does not diminish the essentially misleading character of the whole. The thesis of the book is clearly set forth by the editor. “A socialist interpretation of history … has governed political thinking for the last two or three generations.” Essential to that interpretation was “the legend of the deterioration of the position of the working classes in consequence of the rise of ‘capitalism.’” That legend was propagated by an academic conspiracy on the part of the socialists who controlled the teaching of history so that it required “exceptional independence of mind for a young scholar” to resist the pressure of anti-capitalist opinion.
This amazing charge has not a shred of substance to it. Whether the position of the working classes rose or fell as a consequence of the development of capitalism is a complex question, and one with which it is not necessary to deal here. More to the point is the evidence for the accusation that historians in their anti-capitalist zeal presented the issue unfairly.
… Enough for the logic of this vicious little book. But a word as to its significance. Given the climate of ideas of the early months of 1954 when this volume was published, no scholar could view with equanimity its irresponsible and false assertions that a whole generation of historians was anti-capitalist. Fortunately, these essays are likely to have little effect. Few capitalists fear they are thus threatened; and anyone who wishes seriously to examine the status and attitudes of the historical profession will learn those are al- together middle-class in complexion. That is why the essayists must be either embarrassingly silent as to who the anti-capitalist historians are or must resort to the outrageous distortions of Dean Hacker.”
pp. 102-6: “As always, Professor Nevins is meticulously careful in his use of sources, his efforts at accuracy are obvious, and his judgments are fair-minded and temperate. On points of detail he is thoroughly reliable; it is only on the large, important issues involving interpretation that he goes astray.
In these matters, the work is essentially apologetic. Professor Nevins does not distort his evidence, and on occasions he will even render a verdict against his hero. But the author nevertheless feels himself deeply involved in the defense of his subject, so deeply that he flinches at every aspersion on Rockefeller or his family (e.g., I, 4). …
Yet it is difficult to discover through these two long volumes a satisfactory definition of the nature of his achievement. He was not an innovator. Nor did he have the vision to anticipate long-term economic development. …
We would not know from Professor Nevins’ account, for instance, that the heart of the Standard Oil enterprise was its consistent and continuing illegality through the whole period of Rockefeller’s active connection with it. Through these decades, it profited always from preferential transportation rates which were sometimes though not always of critical importance in its growth (e.g., I, 249). Now, the conspiring to secure such exceptional treatment, whether in the form of rebates or otherwise, was not merely a matter of bad manners or of abstract ethics, as Professor Nevins incorrectly implies, it was a crime (I, 267). The law had made it so, even before it supplied the means for governmental review of rates. The railroads and other carriers involved were quasi-public bodies, chartered by the states and endowed with extraordinary powers, under certain limitations, among which was the rule that they extend equal non-discriminatory treatment to all those they served. The fact that the machinery of enforcement was weak and the provisions for redress imperfect did not make these rules any less binding as law.
Furthermore, the Standard Oil in its growth early took a path that involved illegal forms of consolidation. Aversion to monopoly was not simply an amiable quirk of the American temperament, as Professor Nevins casually describes it (e.g., i, 297; II, 155); it was aversion to a crime. For conspiracy to effect a monopoly in restraint of trade was illegal long before the Sherman Act. Statutes in the states derived from the common law were as old as the Republic. Yet Rockefeller’s tactics, repeatedly resorted to, consistently flouted the law in the furtherance of the interests of his own enterprise (i, 253 365, 366; II, 58, 335).
Thus the combination of transportation and refining activities was itself in the nature of a conspiracy, as the reaction to the development of the pipe line graphically illustrated. As a refiner, Standard Oil should have welcomed the appearance of a device which enabled it to lower costs. It did not, because the new means of transportation threatened to deprive it of advantages it enjoyed over the remaining independent refiners. It met the new situation by encouraging the railroads in a rate war to destroy the pipe lines (i, 237). When that failed, it attempted to eliminate the independents served by the pipe lines, and only as a last resort acquired a pipe-line system of its own which it later used against the independents (I, 298 ff, 345 ff).
The illegality of these combinations was plainly known to all those involved in them. … When the courts had the opportunity to pass upon the combination, they did not hesitate to find it criminal. Hence the eagerness of the Standard Oil to deprive the courts of that opportunity. Hence also the evasiveness of officials in testimony, their perjury, the destruction of records, the secrecy of proceedings, and the inability to reply to attack (e.g., I, 304, 305, 307, 386; I, 133 ff, 230 ff). All these tactics were not simply poor public relations as Professor Nevins considers them; they were rather the necessary response of men whose activities could not stand judicial scrutiny (i, 179, 210; II, 148).
The heart of the problem-how this truly religious and by his own lights honest man could for decades break the law of the land evades Professor Nevins. His full energies go rather to the elaboration of an intricate web of justifications for Rockefeller’s actions.
… For Professor Nevins … the ultimate justification for the Standard Oil tactics is that of efficiency. … The question is never confronted squarely. Yet there is occasional evidence, as in the resistance to such innovations as the pipe line, that efficiency was not the end or purpose of such combinations.”
Taylor 2019 Graham D. Taylor Imperial Standard: Imperial Oil, Exxon, and the Canadian oil industry from 1880 Calgary: University of Calgary 2019
pp.12-13, 51-52: “Ironically, Imperial had been established to be Canada’s defender against the sprawling tentacles of the Standard Oil”octopus” in the 1880s. … The Liberals in Canada systematically dismantled the protectionist measures that had shielded Imperial from the Americans. By the end of 1898 Imperial’s owners capitulated and the Standard Trust acquired control of a majority of the shares.
… [an agreement] of sweeping proportions … was quickly worked out … [in April 1898. It] … was a remarkably generous takeover (for [Imperial Oil] shareholders), which prevented many lawsuits from outsiders and criticism from the Canadian press. As usual, Standard had achieved its objective secretly.”
Spaulding 1993 William B. Spaulding “Why Rockefeller supported medical education in Canada: The William Lyon Mackenzie King connection” Canadian Bulletin of Medical History v10#1 (Spring 1993): 67-76
pp. 68-69: “Gates realized that Rockefeller [Sr.] was supporting Baptist causes with no master plan to guide the donations. To correct this, Gates introduced his”principles of scientific giving” which Rockefeller used as a guide to charitable support.
… One must agree with Howard S. Berliner, who pointed out, on the basis of the scant evidence available, that Rockefeller “had absolutely no idea what scientific medicine was nor did he care.””
p. 70: “In 1903, the New York State legislature authorized the incorporation of Rockefeller’s General Education Board, limiting its mandate to the distribution of funds to educational and research organizations within the United States. From the outset the Board was prevented by law from supporting endeavors in countries such as Canada.
… John D. Rockefeller, Jr. made a lifelong, full-time career of managing the disposition of the charitable funds donated by his father. After an apprenticeship with Frederick Gates, the son became convinced that Gates’s plan to support medicine was worthy of strong support. The two worked harmoniously together, the son being the faithful intermediary between the salesman Gates and the senior Rockefeller. John D., Jr., who served on the General Education Board from its first days, helped it become highly influential in supporting first general education, and then medical education and research. Deeply trusted by his revered father, whom he consulted about all major decisions, John D., Jr. soon became the major Rockefeller voice in determining how the family millions should be used to best effect. The elder Rockefeller, who had retired from active business in the 1890s, was in his sixties when his son took the helm.”
p. 71: “In 1913 Rockefeller used more of his fortune, $50 million worth of Standard Oil shares, to establish the Rockefeller Foundation. This important step expanded the scope of support beyond the limits of the activities of the General Education Board which were confined to the United States by statute. The new funds were used largely to support preventive medicine and medical education on a world-wide scale. The establishment of the Foundation allowed countries like Canada to become beneficiaries.”
Patnaik & Patnaik 2021 Utsa Patnaik and Prabhat Patnaik Capital and Imperialism: Theory, history, and the present New York: Monthly Review 2021
pp. 113-20, 126-27: “Of all the different regimes that capitalism has built to overcome the problems it would face if it were indeed a closed and self-contained system, the ideal one from its point of view has been colonialism. …
… colonial possessions fulfilled several functions … they provided primary commodities for metropolitan capitalism; they provided these primary commodities gratis, as the counterpart of the economic surplus appropriated by the metropolitan economy …
The two main instruments used by the imperial powers in their colonies were capturing the colonial markets and appropriating a part of the surplus without any quid pro quo. Capturing colonial markets often required breaking down the natural economy …
Likewise, the appropriation of surplus took different forms, depending upon what had existed earlier. …
These two instruments were independent of each other but additive of their effects. They were independent in the sense that the extraction of surplus by the colonial rulers predated the quest for markets by the metropolis, which really began in the early nineteenth century and proceeded on its own trajectory. …
… The reason why the drain of surplus is not easily comprehended is that the balance of payments must always balance. … How then can we talk of “unrequited exports” from the colony? …
Conventional accounting obfuscates the drain for two distinct reasons. First, it is incapable of capturing the concept of an economic surplus. …
Second, conventional accounting is incapable of grasping that the purpose of colonialism is to extract this surplus; hence, to offset the surplus against the services rendered in the process of extracting it constitutes a supreme irony. It is like refusing to recognize the existence of an extortion racket on the grounds that the extortion money that is paid constitutes only the payment for the services of those who have come to collect the extortion money.
There is … a fundamental difference between a country’s experience after being colonized and all preceding experience. Not only is the surplus not spent on domestic goods as was the case earlier, thus giving rise to economic regression in the colonial economy, in the sense of a shrinking of the level of macroeconomic activity, but the colonial regime’s raison d’être lies in extracting the maximum amount of surplus. It does not simply take away some pre-set magnitude of surplus but adjusts its demands to whatever is available for it to take. …
The “drain of surplus,” in other words, did not just mean a replacement of the old set of surplus extractors by a new set, namely the old imperial regime by the new regime of metropolitan capitalism. … The colony did not witness a continuation of surplus appropriation as it had earlier. Rather, it became an appendage to another economy, which was never the case earlier. It is not surprising that modern mass poverty … arose for the first time in the third world economies only after they were colonized.
… There is a common misconception that the third world has always been afflicted by poverty, because of its low labor productivity that has continued to this day because it has not benefitted from the Industrial Revolution as the advanced capitalist world has done. … This conception is flawed in at least three important senses. … first … countries that did not develop capitalism could nonetheless have done so in emulation of the West, and ushered in an industrial revolution of their own as did Japan, the only major Asian country that escaped the tentacles of colonialism. What stood in the way of the backward economies developing their own “capitalism from above” through state initiatives, as in Japan, was colonialism itself …
Second, the impact of colonialism was actually to reduce the per capita incomes in the colonized countries and dependencies. … Hence the picture of all countries starting from a more or less similar situation and some forging ahead while others stayed where they were is wrong: those who forged ahead have the others a kick backwards.
Third, there is a fundamental difference between poverty that existed earlier and modern poverty that is associated with capitalism. Modern poverty is not just material deprivation; it involves … the loss of rights, even customary rights … and they creation of a reserve army of labor so that employment becomes uncertain on a daily basis—all these give a particular poignancy to poverty that did not exist earlier. This modern mass poverty is the legacy of the impact of metropolitan capitalism upon the third world.”
3. Brennan 2008 pp. 1-7 (Rosetown to Calgary), 11-15 (Ernest “The Echo” Manning)
Brennan 2008 Brian Brennan The Good Steward: The Ernest C. Manning story Calgary: Fifth House 2008
pp. 1-7: “His early life was shaped in Rosetown [post office founded 1907; village established 1909; town incorporated 1910], an isolated Saskatchewan hamlet where the wind never stopped blowing … Back in 1909, it was little more than a motley collection of clapboard shacks on a dirt main street flanked by two grain elevators. That’s when Manning’s father, George Henry Manning, a thirty-seven-year-old immigrant [at age 22] from the market town of Bury St. Edmunds in West Suffolk, England, filed sight unseen a homestead six kilometres southwest of the rural settlement.
Before arriving in Rosetown, George Manning had worked as a farm labourer in southern Manitoba and in southeastern Saskatchewan, where he established his first homestead [near Carnduff]. He told his future wife, twenty-four-year-old Elizabeth Mara (Bessie) Dixon of Kent that he would send for her when he settled. In the meantime, he encouraged her to continue working as a live-in lady’s maid at a stately home near Piccadilly Circus in London.
… Locals remembered Ernie as a happy-go-lucky youngster with a boyish sense of humour and a penchant for practical joking—in stark contrast to his later solemn image as a preacher and politician.
… Ernie’s favourite publications after Popular Mechanics were the mail-order catalogues from Simpson’s, Montgomery Ward, and Sears Roebuck that gave him ideas for other things he might spend his money on. In the fall of 1924, after a productive season of harvesting work, he sent a $103 [$1,747.57 in 2022$ at the age 14?] money order to Sears Roebuck in Chicago to buy a three-tube Philco radio receiver complete with dry-cell batteries, gooseneck loudspeaker, and nine-metre stranded-wire aerial. … the Rosetown postmaster was holding was holding the equipment pending payment of customs duty. Ernie finally took delivery of the equipment pending payment of customs duty on 24 December 1924, just as the postmaster was about to put it up for sale. …
The radio proved to be a fateful acquisition. If he was looking for direction in his life, Ernie found it in a religious broadcast featuring the fire-and-brimstone voice of William Aberhart, a forty-seven-year-old Calgary high-school principal and self-taught Bible scholar …
… To the seventeen-year-old Ernie Manning, Aberhart’s preaching was a revelation. Although he occasionally attended Methodist Church in Rosetown with his family, Manning considered himself little more than a nominal Christian at best. … “He brought about a complete transformation in my life,” said Manning. “My interests changed, my outlook on life changed. …” …
In February 1927, when there was little work to do around the farm, Ernie donned an ill-fitting suit purchased from the mail-order catalogue and rode the CPR train to Calgary to introduce himself to Aberhart. … Throughout the spring and summer of 1927, he listened to the radio on Sundays when Aberhart spoke of his plans to build a Bible college in downtown Calgary.
Aberhart raised a total of sixty-five thousand dollars for the construction of his college [$1.1 million in 2022$] … In the fall of 1927 he announced over CFCN that the school would open on 30 October. … When Ernest Manning heard the news, he felt called … He left the farm, moved to Calgary, and was the first of thirty-five students to enrol when the Bible Institute opened. …
… Ernest Manning used the proceeds from the harvesting he and his brothers did for their neighbours in Rosetown to pay for his first term’s room and board … After that he accepted an invitation to live with the Aberharts—William and his wife Jessie—in a ground-floor suite adjoining the garage of their newly built … hillside home … in Calgary’s Mission district. The Aberharts had two adult daughters older than Manning … but no sons. William … said in later years that he soon came to regard his young student as the sone he never had.”
pp. 11-15: “In his last year as a student, Manning also taught as a volunteer at the Institute. … In April 1930, at age twenty-one, Manning became the Institute’s first graduate. Three months later, Aberhart headed off to Halfmoon Bay, fifty kilometres north of Vancouver on British Columbia’s Sunshine Coast, for his annual summer holiday … He asked Manning to mind the house for him and fill in for him on the radio. From that point on, they were a team. …
Manning worked as Aberhart’s full-time assistant, running the Institute as secretary-manager and sharing the radio broadcasts … Aberhart started purchasing airtime on CFCN in 1930 …
On air Manning mimicked Aberhart’s delivery so effectively that he became known as “The Echo.” “I picked up many of his mannerisms,” Manning recalled. “…Yet, I think I’m quite truthful in saying that our personalities were fundamentally different. We were different types of people altogether. But in the public eye I reflected a great deal of what they were accustomed to from him.”
… In the summer of 1932, Aberhart underwent a political conversion that has become legendary in Alberta history. … During a trip to Edmonton … Aberhart found what he saw as the solution to Alberta’s economic problems in a book … by a British stage actor … Unemployment or War offered a summation of the radical monetary reform theories developed by England’s Major Clifford Douglas. …
… Social credit, he decided, was exactly what the people of Alberta needed to save themselves from the economic hardship caused by Eastern bankers and financiers.
… the philosophy of social credit, which Preston Manning has described as a mixture of “pre-Keynesian economics, social resentment, and untutored hope.””
4. Manning 2011 pp. 2-3 (youngest minister); Richards & Pratt 1979 pp. 78-80 (‘entice outside capital’); Brennan 2008 pp. 28-29 (Aberhart distaste for Bankers’ Money), 56-69 (state credit houses)
Manning 2011 Preston Manning and Peter McKenzie-Brown Interview transcript Petroleum History Society Oil Sands Oral History Project (21 October 2011): 20pp footer:
“Sponsors of The Oil Sands Oral History Project include the Alberta Historical Resources Foundation, Athabasca Oil Sands Corp., Canadian Natural Resources Limited, Canadian Oil Sands Limited, Connacher Oil and Gas Limited, Imperial Oil Limited, MEG Energy Corp., Nexen Inc., Suncor Energy and Syncrude Canada.”
pp. 2-3: “… there had to be some solution to the Depression, and so [Aberhart] picked up this social credit idea that was circulating at that time in England and started to talk about it on his radio program, half of it was now religious, the other half was, what’s the answer to the problems of the Depression. And of course, out of that came some study groups who ended up deciding to run candidates in the 1935 Provincial Election in Alberta, on this social credit idea … sort of a ‘Poor Man’s Keynesian Economics.’ … Aberhart was not in favour of these study groups going into politics. He saw himself as an educator but they ran candidates. Anyway, my father ran as one of these first candidates, he got himself elected …
… I think he was 26 or something like that. He ended up being the youngest cabinet minister in the British Empire at that time and of course, in the 1935 election, Albertans threw every last member of the government out of the house and put in these new people. My father said the only thing that you had to be able to assure the electorate in 1935 was that you’d never set foot in the legislature before, and that was enough to qualify you. So he ended up then in the government because Aberhart was called upon to run himself and become the Premier. And then when Aberhart died in 1943, my father succeeded him and was Premier right up until he retired in 1968.”
Richards & Pratt 1979 John Richards and Larry Pratt Prairie Capitalism: Power and influence in the new west Toronto: McClelland & Stewart 1979
pp. 78-80: “From the date of their landslide victory in 1935, Social Credit’s leadership made it clear that the radical thrust of their right populist movement was not directed at the oil industry. In the desperate economic circumstances of the great depression, with Alberta deeply in debt, Social Credit was eager to entice outside capital into the search for oil. Premier Aberhart telegraphed assurances to the financial press and the oil trade bulletins that the province intended to give every incentive to risk capital.
In 1936 Aberhart appointed Nathan Eldon Tanner to be Minister of … Mines and Minerals … More than any other Alberta politician, including Ernest Manning, Tanner was the real author of the province’s regulatory system for oil and gas. … Tanner put in place most of the complex administrative apparatus … before leaving politics in 1952 to make his fortune in oil and gas, notably as the first president of Trans-Canada Pipelines; today [1979] he is a senior Elder in the Mormon Church hierarchy in Salt Lake City, Utah …
A conservative small businessman as well as former Mormon bishop and high school principal at Cardston, Alberta … Tanner’s department imported officials from the Texas Railroad Commission and other U.S. agencies to supervise the creation of Alberta’s Oil and Gas Conservation Board and to devise schemes for reducing the wastage of oil and gas in the Turner Valley. … While much of the legislation was incrementally amended and revised, and some new mechanisms were introduced after 1947 in response to the pressures of expansion, it was, as we have seen, in the late 1930s that the basis of the regulatory structure was conceived and passed into law. Profoundly conservative in its emphasis upon property rights and strongly influenced by the regulatory tradition of the southwest United States, much of this structure persists today and is now deeply imbedded in the statutes of Alberta and in the corpus of Canadian oil and gas law.
To some Social Credit supporters Nathan Tanner’s campaign to attract development money to Alberta was nothing short of betrayal. Standard Oil was about as popular among prairie populists as the CPR or any other outside monopoly. … One of Aberhart’s admirers protested … “… If outside interests can come in and make big profits why can’t we operate them ourselves and keep the money here?””
Brennan 2008 Brian Brennan The Good Steward: The Ernest C. Manning story Calgary: Fifth House 2008
pp. 28-29: “Aberhart, with his distaste for what he called”bankers’ money,” was not about to accept any of Douglas’s suggestions that might involve dealing with Eastern financial institutions. Instead he travelled to Ottawa and asked Prime Minister R.B. Bennett, a fellow Calgarian who had publicly expressed his support for Social Credit (though privately he suggested that Albertans were “sacrificing their judgement to their emotions”), for a federal loan of $18 million. Bennett agreed to give just $2.5 million, which he said should be enough to prevent Alberta from declaring bankruptcy prior to the upcoming October federal election. In return, Aberhart assured Bennett that a federal Social Credit candidate would not oppose him in Calgary.
… Bennett kept his seat in the 1935 election but his party lost the election to Mackenzie King’s Liberals. They undertook to lend Alberta enough money to pay off a $3 million bond issue due to mature on 1 December. King warned there would be no more funds forthcoming after that until Aberhart agreed to put Alberta under the jurisdiction of the Canada Loans Council, which supervised provincial borrowing. This Aberhart refused to do …”
pp. 56-59: “On 4 March 1938, the Supreme Court of Canada struck down all the statues passed by the provincial legislature in the name of social credit, including the bank licensing act … Aberhart, who fully expected the Supreme Court reversal, announced that his government would appeal the decision to the British Privy Council, then Canada’s court of last resort. …
Ernest Manning, the loyal disciple who never criticized Aberhart’s policies, always defended the bank licensing act … as [a] reasonable piece[] of legislation. …
One piece of social-credit legislation not challenged in the courts or disallowed by the federal government was the 1936 Act providing for the establishment of what were first called “state credit houses”—provincial savings and loan institutions that would eventually become an established feature of Alberta’s financial life. These were the institutions through which the long-promised twenty-five-dollar dividends were to be paid whenever the government could eventually afford them. They started opening in 1938 … as branches of the provincial treasury department that had the power to issue “non-negotiable transfer vouchers” as a form of purchasing credit. Nowhere in the legislation was the word “bank.” In fact, one of the existing charter banks, the Imperial Bank of Canada, was appointed to act as the agent and financial backer for the Treasury Branches so that they would not violate the federal government’s jurisdiction over banking and currency.”
… when the first cabinet ministers and then the civil servants agreed to accept a quarter of their salaries in Treasury Branch vouchers, public resistance began to soften. …
… Because they posed no threat to the major chartered banks, which tolerated them as an anomaly—a weak Western cousin, as it were—the Treasury Branches never had to face a constitutional challenge until the 1960s. … both the Alberta Appeals Court and the Supreme Court of Canada implied but did not definitively rule that the Treasury Branches were unconstitutional. Thirty years later, in 1997, the original 1938 Treasury Branch legislation was repealed, and the Branches became a provincial Crown corporation operating under the name of ATB Financial. By 2003, ATB Financial—North America’s only state-owned retain financial institution—was proudly promoting itself as Canada’s eighth-largest commercial bank, with 276 branches and $13.2 billion in assets. Nobody seemed inclined by then to press the point in the courts that, according to the [1982] Canadian constitution, the Parliament of Canada still had exclusive control over “all matters relating to banking and incorporation of banks.”
5. O Ascah 1999 pp. 142-43 (brain trust w/ latest economic theories), 148 (default), 53, 129 (unsympathetic feds), 140-41 (Bank of Canada & chartered banks closer); Tribe 2021 pp. 5, 31, 34, 31n37, 304-05n, 195, 331, 334-35, 34, 312-13 (Rockefeller founding of economics) & De Vroey 1975(transition from classical to neoclassical economics); Breen 1993 pp. lviii-lxii (FOCB-NIRA), 104-7 (Aberhart’s patriotism), 106-9 (Manning taps Tanner), 110-11, 116 (AB production curtailed), 118-29 (Tanner telegraphs DC), 154, 143, 129, 134-41, 157-58, 145-47 (‘effectively shielded from legal challenge’); Oil and Gas Resources Conservation Act 1938 s.44 + s.46, pp. 13-14
Ascah 1999 Robert L. Ascah Politics and Debt: The Dominion, the banks and Alberta’s Social Credit Edmonton: University of Alberta 1999
pp. 142-43, 148, 53, 129, 140-41: “Canada’s dependence on international capital markets changed significantly after the Great War. From a situation of utmost dependence on London for capital, the Dominion Government was, in effect, reliant on Toronto and Montreal financial institutions and wealthy individuals. The Dominion’s foreign borrowing shifted away from London to New York as the Dominion tapped the US dollar market for relatively modest sums. (See Appendix B.) …
Canada’s evolution as a nation independent from the United Kingdom was not only a political one, it was also financial. As the Dominion organized to become financially self-sufficient, its financial interests were in a sense domesticated. Domestic investment dealers, such as A.E. Ames and Wood Gundy, assumed a bigger role. The whole controversy at the time of the Bank of Canada’s establishment—that this institution was part of conspiracy to put Canada under imperial domination—reinforced Canadians’ desire to work outside the control of London.
During the Depression, the financial apparatus of the Dominion was modernized. Ottawa was able to attract a brain trust of remarkable public servants, principally educated at graduate schools in the United Kingdom or the United States, and equipped with the latest economic and financial theories. This nucleus gave the Dominion a new energy and intelligence to address complex financial and economic problems. This team of public servants oversaw the establishment of a central bank, the isolation of the Alberta Social Credit administration, a very successful wartime debt management program, and a new set of financial institutions such as the Canada Mortgage and Housing Corporation.
… On April 1, 1936, Alberta was Canada’s first, and only, province to default on a principle debt payment. In this unusual case of a default, the interests of a government debtor and institutional creditors clashed. The Dominion government recognized the importance of meeting the expectations of finance capital but Alberta’s provincial government was committed to thwarting the claims of finance capital. …
… Following Alberta’s default, the Dominion was unsympathetic to assisting Alberta financially until it made restitution with holders of bonds in default. It was only after Aberhart’s death and Provincial Treasurer Solon Low’s departure for Ottawa that representatives from Wood Gundy and The First Boston Corporation met with Premier Ernest Manning, Deputy Provincial Treasurer Frank Percival and the Provincial Auditor Keith Huckvale, to work out a debt reorganization plan. On June 6, 1945, the Alberta Cabinet passed Order-in-Council 925/45 that outlined the government’s debt reorganization program.
… The Alberta aberration teaches us lessons about the nature of public debts and the importance of good debt management. First of all, the crisis of Alberta public finance demonstrates the dangers to the issuer of the optional-payment bond and more generally the special difficulties of foreign borrowing. …
The conditions for Alberta’s default included objective financial circumstances but also subjective factors such as feelings of alienation and victimization wrought by finance capital and conflicts with the Dominion over financial sovereignty. …
After analysing the initiatives taken by the Province and the reaction of the chartered banks to these measures, the protection of the Dominion’s credit standing could only be served by Alberta’s default. The great fear that Social Credit would spread like a prairie fire was implicit in many editorials and communiques by bankers, lawyers and Dominion officials. The Dominion concluded that Alberta, which had moved too far in interfering with federal prerogatives, should be cut adrift in order for the Dominion to maintain credibility with the international and domestic financial communities.
The default also served to build a close working relationship between the new Bank of Canada governor and the chartered banks. This close co-operation preserved the constitutional authority of the Dominion in the sphere of banking, credit, currency and interest.”
Tribe 2021 Keith Tribe Constructing Economic Science: The invention of a discipline 1850-1950 New York: Oxford University 2021
pp. 5, 31, 34, 31n37, 304-05n, 195, 331, 334-35, 34, 312-13: “The discipline of economics was long in the making, but the reason it eventually became a discipline was owed to international changes in schooling and university towards the end of the nineteenth century.
… by the turn of the century organized benefaction on the part of philanthropic foundations began to displace individual generosity. Chief among these were the General Education Board founded in 1902 with $1 million from Rockefeller.
… The emergence of the department as the basic element of university organization for teaching and research is therefore directly related to the development of specialization as the typical form for training new researchers and for the advancement of knowledge. By the 1890s this organization form had become established in the United States, most notably in the systematic foundation of whole departments in Rockefeller’s University of Chicago. … many of them established journals that were immediately recognized at an international level.
… there was a strong tendency by the 1930s for LSE [London School of Economics] economists to presume that reality ought to conform to theory. This attitude was exemplified by Lionel Robbin’s The Great Depression (1934), which argued that governments could do nothing to mitigate unemployment and that prosperity would return only if the market were permitted to work without hindrance. This was likewise the view of Friedrich Hayek, who was recruited to the LSE in 1931.
… When Cannan retired in 1926, Beveridge initially favoured appointing Ralph Howtrey to the vacancy; but the School had received a grant from the Laura Spelman Rockefeller Fund that made it possible both to convert Cannan’s part-time post into a full-time one, and look further afield for a candidate. In the spring of 1926, Beveridge offered the post to Allyn Young of Harvard, who after prolonged negotiations accepted for a term of three years in January 1927.
… Robbins had gained a First in the BSc (Econ) in 1923, then after a period as a research assistant to Beveridge been appointed for the 1924-25 as a temporary lecturer at New College Oxford, standing in for Harold Salvesen, who went to the United States on a Rockefeller grant. He returned in the autumn of 1925 to LSE as an assistant lecturer with a relatively light teaching load, and was then promoted to a full lectureship in June 1926 in response to moves to recruit him to Cambridge.
… Allyn Young died in March 1929, and Beveridge, seeking to plug the gap in teaching that this created, first persuaded Robbins to take over economic theory classes running up to the June examinations, and then in May decided to invite Robbins to return to a ‘junior’ professorship at LSE.
… using Rockefeller money to signal the international standing of the School in the developing field of economics … Student demand for such an apparently wide-ranging programme did not yet exist … taken together, these factors are suggestive of hasty improvisation, more of a concern to make a point than to make a change.
… Hayek’s account of the School up to the mid-1940s makes very clear that after 1920 this altered into a fulltime model for both staff and students, with school-leavers coming to predominate among the student intake. … By the later 1940s economics was at last becoming a popular subject to study, and the LSE was perceived as central to such study.
… the strategic advantage enjoyed by the LSE within the organisation of British higher education [at the center of empire] meant that the postwar expansion of the social sciences would extend its reach yet further. And of course, the 1963 landmark study of the future of higher education in Britain would be headed by its professor of economics, Lionel Robbins.”
De Vroey 1975 Michel De Vroey “The transition from classical to neoclassical economics: A scientific revolution” Journal of Economic Issues v9#3 (September 1975): 415-39
Breen 1993 David H. Breen Alberta’s Petroleum Industry and the Conservation Board Edmonton: University of Alberta and the Energy Resources Conservation Board 1993
pp. lviii-lxii: “To check the pattern of discovery, followed by frantic development, flush production and great waste, then sharp decline, Texas passed a general waste prevention statute in 1919 that gave wide regulatory powers to the Railroad Commission and became the basis of subsequent statewide oil and gas regulation.
The next phase of regulatory development was greatly shaped by the ideas and advocacy of Henry L. Doherty … who “enjoyed his role as the intellectual of the petroleum industry” … Doherty is recognized as one of the fathers of modern conservation practice. … A director of the American Petroleum Institute (API), he decided to first take his reform ideas to his fellow directors … The API reception was less than enthusiastic … Unable to convince the directors of the Institute, Doherty called upon his friend Calvin Coolidge at the White House in the fall of 1924. Also urging the president to give special attention to the conservation to petroleum resources was Secretary of the Interior Hubert Work … Prompted by Doherty, Work and his own concern about national security needs, Coolidge created the Federal Oil Conservation Board (FOCB) in December 1924. This action by the president had the extremely important effect of identifying petroleum conservation as a matter of national concern, and it greatly stimulated discussion and research in petroleum problems.
The FOCB was composed of the secretaries of war, the navy, the interior and commerce. …
Between 1926 and 1933, the FOCB issued a series of reports to the president urging the promotion of uniform state conservation regulations consistent with the principles of reservoir mechanics. Unit operation was presented as the ideal. … In its final report in 1932, the Board presented a specific proposal for an interstate compact that would permit a state-federal agency to forecast demand and allocate production quotas to producing states. …
By the time of the FOCB’s final report, the situation facing the oil producers and the oil-producing states was desperate. … A dramatic new surge of production commenced just as the impact of the Great Depression and declining demand had begun to be felt. … In Texas, … Governor Sterling had been compelled in August 1931 to declare martial law and send the National Guard into the East Texas oilfield to protect life and property as producing oil wells were shut down. A similar situation saw troops sent into the Oklahoma City field.
In this desperate environment, prejudice against federal participation eased, and the prospect of a joint federal-state conservation board along the lines suggested by the FOCB appeared bright. With the election of Franklin D. Roosevelt in November 1932, however, the FOCB became defunct, the compact idea was dropped, and the problems of the petroleum industry were approached in a different manner. … far-reaching and unprecedented system of import restriction, minimum prices, administration approval of new reservoir development plans, limitation of domestic production to total demand less imports … Secretary of the Interior Harold Ickes was anxious to go even further, and to have the oil industry declared a public utility and regulated accordingly. …
By the end of 1933, many oilmen rated [Roosevelt’s] Oil Code a great success: production had been cut back, prices had firmed and begun to move upward, and the industry showed signs of stabilizing. …
… In June 1935, the Supreme Court declared the entire [National Industrial Recovery Act ] unconstitutional, which meant the end of the Oil Code. … it was also apparent that there was strong opposition to any direct federal regulatory role among a large segment of the industry, especially in Texas. Federal control of production and distribution of petroleum promised to be a Herculean task fraught with political hazards.
Roosevelt was not inclined therefore to challenge the initiative already taken by several of the large oil-producing states. Governor … James Allred of Texas … was unalterably opposed to the principle of conservation regulation for the purpose of price control. Allred would consider only the matter of preventing physical waste, and this he believed was solely the business of the State of Texas. Prepared to concede to federal regulation of some form of hot oil law and restriction of foreign oil imports, he would not countenance any further participation. Allred proposed therefore an interstate compact that would promote the standardization of state conservation laws.
… patterned essentially on the Texas proposal … Congress formally ratified the agreement, establishing the “Interstate Compact to Conserve Oil and Gas” on 27 August 1935.”
pp. 104-7: “… Aberhart looked upon the matter as a politician … who had solemnly pledged to end”poverty in the midst of plenty,” Aberhart was not prepared to chance any measure that could put development at risk. His inclination in this direction was strengthened by his bias in favour of the “little man.” The cry of the small producers, that quotas would benefit the big operators, especially Imperial Oil, at their expense, seems to have weighed heavily. Aberhart saw the big eastern banks holding Alberta in bondage, and it was not hard for him to see the Toronto-based Imperial Oil Company in the same light.
Differences between the premier and his minister of lands and mines remained irreconcilable. When he learned in late December that Ross was planning to shut certain Turner Valley gas wells, Aberhart asked for and received his resignation.
… previously at the Edmonton district Social Credit convention … Delegates had censured C.C. Ross, the former minister of lands and mines, and passed a resolution declaring that “outside capital was not required” and “should not be allowed to participate” in the development of Alberta’s resources.”
pp. 106-9: “Late one evening, just before Christmas, [Nathan] Tanner was awakened by a telephone call from the premier. Aberhart wanted to know if Tanner would accept an unidentified cabinet position … followed several days later by a wire asking Tanner to come to Edmonton”as expeditiously as possible” to assume the position of minister of lands and mines.
… Born in Salt Lake City, Utah, in 1898, Tanner grew up in the staunchly Mormon community of Cardston, just 17 miles north of the Alberta-Montana border. …
… The new minister … had no previous connection with the petroleum industry or, for that matter, any other business enterprise. … he nonetheless began his term as minister of lands and mines with one advantage that Ross had never been able to claim. This was the complete confidence of both the premier and Ernest Manning, his most trusted disciple. Tanner was also inheriting a department that had the singular distinction of not being in utter destitution and totally dependent upon the near-bankrupt provincial treasury.
… throughout the winter and spring of 1937 … the evidence of the growing interest of eastern Canadian capital remained the focus of press, public and government attention … At a banquet organized by the Oil and Gas Association of Alberta to introduce Tanner to the industry, the minister assured his audience that it was “going to be one of the greatest development years in the history of the province,” that he did not “favour numerous investigations into the oil industry,” and that the policy of his department “would be to protect investors as far as possible.” … The assembled oil men were reassured, especially by Tanner’s implied message that he would be guided in his actions by the professional staff in his department rather than by some of the more extreme anti-business elements within the Social Credit caucus. Dr. Link, Imperial Oil’s chief geologist, was quick to second Tanner’s wise decision to discuss oil problems with such able members of his staff as “‘Charlie’ Dingman, Grant Spratt and Vernon Taylor,” and he pronounced the minister “OK.” Dr. R.J. Manion, a former federal minister of railways, and engineer-businessman Major-General G.B. Hughes, both of whom had travelled from Toronto so that they could use the meeting to announce a half-million dollar six-well drilling program, declared themselves favourably impressed with Tanner. They advised members of the oil industry “to co-operate, regardless of political opinions, with a man who was evidently sincere and determined to do his best.””
pp. 110-11: “As spring turned to summer [in 1937] … At Turner Valley, the wasteful flaring of natural gas continued unabated, and the press continued to chronicle the successful completion of additional oil wells. Increasingly, Turner Valley appeared as an oasis of prosperity in the otherwise bleak economic landscape.
Albertans and Turner Valley operators were jolted into reality in early September when Imperial Oil and the British American Oil Company announced simultaneously a sharp reduction in the price their refineries would pay for crude. … The price decrease underlined dramatically that the petroleum industry in Alberta had entered a new phase. Production had moved well beyond what the local market could absorb, and Alberta passed from the status of importer to exporter of oil.
… Although officials of Imperial Oil and British American, the major refiners of Turner Valley crude oil, proclaimed that prorationing was now in effect, independent oil companies countered with a statement saying that they had not agreed to prorationing at the meeting with Tanner. … They concluded: “The absurdity of proration being necessary with a daily production of ten thousand barrels should be apparent when it is realized that this amount is but a fraction of the daily Canadian requirements, the balance being imported and a considerable amount coming from Montana.””
p. 116: “It was the”New Year’s message” of J.H. McLeod, president of Royalite Oil Company, and the resultant howl from Turner Valley crude oil producers, that finally jolted the Social Credit government to act. On 4 January 1938, McLeod announced that the price announced that the price of Montana crude had collapsed, that there was now no recognized posted price, and that distress prices were in effect. “Consequently,” McLeod declared, “certain steps must be taken to assure Turner Valley of its market on the prairies.” … The next day, the Calgary Herald reported that … an all-out “crude war” threatened.
Ten days later, N.E. Tanner announced that conservation legislation would be introduced at the forthcoming session of the Alberta Legislature. … In his desire to consult closely with the operators, Tanner was following the practice established from the first by the Department of the Interior’s Petroleum and Natural Gas Division and later followed by the United Farmers of Alberta. Once adopted by Tanner, the emphasis on consultation with the industry on conservation matters also remained characteristic of Tanner’s Social Credit successors [under Manning].”
pp. 118-29: “On March 17 [1938], [Tanner] telegraphed J.W. Finch, director of the Bureau of Mines in the Department of the Interior in Washington, to … ask the director if he would recommend the names of competent petroleum engineers experienced in this area who might be prepared to come to Alberta. From the list of names submitted, Tanner selected the firm”Parker, Foran, Knode & Boatright,” a group of consulting engineers in Austin, Texas, who had been influential, Finch explained, in the formulation of conservation legislation in Texas. … Before establishing his own consulting firm, Parker had headed the Texas Railroad Commission for 26 years … Unavailable himself, Parker recommended his colleague, W.F. Knode. … [whose] father owned a torpedo company that “shot wells” to improve oil flow, and … got his first oilfield job at the age of eight. … he worked for various companies in … northern Oklahoma … Kansas, New Mexico and Venezuela. Employed by Shell Oil in west Texas in the Late 1920s, Knode was on hand to observe the formation of the Central Proration Committee by independent operators in that region. …
… If a new conservation authority was not to suffer the fate of the Turner Valley Gas Conservation Board [ended by Supreme Court in October 1933], it was necessary that the Canadian Parliament pass an appropriate amendment to the 1929 Natural Resources Transfer Agreement. … Thus, on the day that Tanner’s telegram went out to W.F. Knode in Corpus Christi, Texas, another telegram was on its way to Ottawa from Tanner’s deputy minister. This second telegram expressed the Aberhart government’s anxiety that the Transfer Agreement amendment of the Alberta Legislature was nearing its end. Prime Minister Mackenzie King, however, was little inclined to take any action for the convenience of the Alberta premier.
… The Oil and Gas Conservation Act assented to 8 April 1938 was necessarily restricted by a clause stating that the Act would only come into force on a day proclaimed by the lieutenant-governor-in-council after Parliament had ratified the agreement reached on March 5.
… Alberta legislators were not reticent about granting the Board sufficient power to effect its purpose. The Board was given the right to summon witnesses, to issue commissions, and to take evidence outside the province, and in its hearings it was to be governed by its own rules of conduct rather than being bound by the technical rules of legal evidence. A decision by the Board upon any question of fact or law within its jurisdiction was binding; no Board order, decision or proceeding could be appealed. Finally, no officer or employee of the Board was personally liable for actions carried out under the authority of the Act. The panoply of powers vested upon the commissioners, especially the denial of right of appeal, seems at first glance to stand in contradiction to the democratic impulses traditionally ascribed to agrarian reformers. …
… Although it took the Aberhart government several years to establish the Conservation Board, this is explained mainly by the internal conflict that preoccupied the party through most of the period and not by any apparent division in cabinet regarding the appropriate type of administrative authority required in Turner Valley. … Social Credit would emerge as the ardent champion of laissez-faire free enterprise, it never lost the strong authoritarian streak that characterized the party’s founders and its first years in office.
… the Board was also given the power to determine the amount of crude required to supply prevailing market demand.
So that it might have access to the information necessary to discharge its duties at all times, and to undertake whatever investigation it might see fit, the Board was given the coercive power of inquiry common to a court of law. … For its part, the Board was not obliged to hold hearings or to give reasons for its decisions.
As if to demonstrate the strength of the government’s determination that its new Board should not in any way be thwarted in the pursuit of its assigned objectives, the section of the Act conferring powers with respect to conservation was concluded with a clause conveying to the Board a remarkably wide-ranging authority
to prescribe rules and regulations as to the production, transportation, distribution, or use of all or any petroleum products, and the uses which may be made thereof or the amount which may be produced transported or used, either generally or at any area specified well or wells and for any specified purpose.
A separate section provided that every order or regulation that the Board might make would have the same force as if it had been an integral part of the Conservation Act … punishable on summary conviction by a fine of up to $2,000 and costs, plus $500 for each day … default continued.
Having decided to remove the most important elements of petroleum industry regulation from the Department of Lands and Mines to an independent board beyond the immediate reach of the government, the Social Credit government found it easy to decide that the cost of its operation … should be obtained through an annual assessment upon every producing well in the province.
… While the foundation statutes of Social Credit monetary reform were being finally and decisively beaten down by the federal government in the courts through the spring and early summer of 1938, Alberta was demonstrating its displeasure by [cutting off heat] … forcing … the lieutenant-governor … to vacate Government House. The Aberhart government also retaliated by rejecting Prime Minister Mackenzie King’s request for Alberta’s permission to amend the British North American Act so that Ottawa would have authority to institute a national unemployment insurance scheme.
Embittered federal-provincial relations was not the only obstacle. The anticipated resistance of some of the smaller Turner Valley operators was even stronger and more widespread than expected. The hostile naphtha producers … were joined by the local independent refiner Leon L. Plotkins … all charging that their activities were going to be curtailed mainly for the benefit of Imperial Oil.”
pp. 154, 143, 129, 134-41, 157-58, 145-47: “The most striking and commonly noted characteristic of the petroleum industry in North America is its domination by a handful of corporate giants that include some of the world’s most profitable corporations. … The integrated corporation usually has coordinated control over every stage of the oil flow and a potential profit centre in each of the four sectors. … John D. Rockefeller, the first of the great oil barons, was quick to realize the advantage to be gained through the control of refining and transporting … their dominance is readily apparent … The Alberta government in 1938 selected W.F. Knode [”followed the oil business all my life, and was a ‘roustabout’ for the Standard Oil at $2.00 a day when I was about 16”], a petroleum engineer who had experience with the equivalent Texas agency, the Texas Railroad Commission, as chairman for its newly formed Conservation Board. … Knode was succeeded after a short interval by R.E. Allen, another American petroleum engineer.
… The industry … in the late autumn of 1938 was composed of approximately 60 producing companies, five with refining operations. By far the dominant company was Imperial Oil Limited. It was the major refiner, and its subsidiary, Royalite Oil Company, with 28 wells, was the largest oil and natural gas producer. … It was pointed out by several of the smaller producers that the Royalite Oil Company (Imperial) was drilling a large number of wells, and since it was impossible for them to keep up with Royalite’s drilling pace, the allowable production from their wells would be cut back in favour of the new wells as long as the total allowable field production was not increased. … The anticipated resistance of some of the smaller Turner Valley operators was even stronger and more widespread than expected. The hostile naphtha producers … were joined by the most vocal independent refiner Leon L. Plotkins … as well as many of the smaller crude oil producers, all charging that their activities were going to be curtailed mainly for the benefit of Imperial Oil. …
… The Board’s first explicit conservation measure came on August 4 in the form of an order to prevent excessive drilling. … This order was important not only as the first direct step in the long-awaited conservation program for Turner Valley but also for establishing an important precedent in administrative process. The well-spacing order … By stating explicitly that any decision regarding such an application would be preceded by a hearing of interested parties, the Board’s first order initiated a process that had not been prescribed in either the Oil and Gas Wells Act, 1931 or the Oil and Gas Conservation Act, 1938 but would become a central feature of the Board’s regulatory approach.
While the collection of data upon which to base an acceptable proration order frantically continued, … the Board had to work with the existing system of production control that Imperial had imposed upon the Turner Valley field in September 1937 … It was generally accepted by all parties that such an approach was inequitable and deficient on technical grounds. Crude oil producers anxiously awaited release from what was essentially a buyers’ proration plan in favour of the Board’s neutral and more technically sophisticated approach to proration. …
… The Board’s long anticipated proration schedules were presented on August 31. … 28,363 barrels per day …
… On September 21, when it was necessary for the Board to adjust the field allocation down to 22,000 barrels per day to help reduce the volume of oil that had accumulated in storage, there seemed little reason for alarm; however, the third proration order, presented on October 18, and calling for a reduction in field production to 14,500 barrels, was greeted with shock. The spreading gloom became evident when, eight days later, a new Board order called for a reduction to 11,500 barrels per day. Not only had prorated production been cut back by nearly two-thirds in the space of three months, but also five new producing wells had come on stream to compete for a share of the sharply diminished allowable field production. Most threatened were the smaller independent crude oil producers …
… By mid-October, the Alberta government realized that it had a full-fledged crisis on its hands … reflected in the response of the Calgary Herald to the Speech from the Throne opening the Legislature. Stretched across the front page was the headline “Gov’t Plans Drastic Valley Control, Even Own ‘Police’ to Enforce Orders.”
… The Social Credit government’s response was twofold. First, Provincial Secretary E.C. Manning announced that Mr. Justice A.A. McGillivray of the Supreme Court of Alberta had been appointed to chair a royal commission that would conduct a thorough investigation of the production, refining, transportation and marketing of petroleum and petroleum products in Alberta. … Second, Premier Aberhart announced that his government intended to hold a special fall sitting of the Alberta Legislature, so that the Oil and Gas Conservation Act could be reconsidered.
… in a late-evening session on 21 November 1938, a compromise was hammered out and consented to by all but two of the companies or interests represented. … Although section 44, which denied appeal to the court regarding any “action, decision, and order of the Board,” was almost universally condemned, Tanner and Manning held firm. …
… On 22 November 1938, the Oil and Gas Resources Conservation Act became law. Apart from the fundamental change that came through denial of the right of appeal, and the substantial reshaping of the compensation section, the other changes were minor. …
… The Petroleum and Natural Gas Conservation Board met for the first time under the revised Act on 30 November 1938. … Board Order No. 1 called for a total field production of 12,500 barrels of oil per day and listed each well’s allowable share.
… Opinion that the new Alberta legislation went to extreme lengths was not confined only to the smaller Turner Valley producers and certain members of the legal fraternity. T.G. Madgwick, the senior technical advisor to the federal Department of Mines and Resources, when called upon to review the newest Alberta Conservation Act, observed that section Nos. 44 and 46 … seemed “to place the acts of the Board beyond the Courts and yet empower it to expropriate property … and to conscript the employees of the concern,” were “little short of dictatorial.” …
For [American and founding chair of the new Alberta regulator] William Knode … and Nathan Tanner … they had achieved their central objective, Alberta’s Petroleum and Natural Gas Conservation Board was now effectively shielded from the possibility of legal challenge. In managing this, they provided a foundation of authority that progenitor agencies in the United States had never possessed.”
Oil and Gas Resources Conservation Act 1938 An Act for the Conservation of the Oil and Gas Resources of the Province of Alberta 2nd session of 8th Alberta Legislature (assented 22 November 1938): 18pp
s.44 + s.46, pp. 13-14:
6. Breen 1993 pp. 701n24 (admiralty), 164-65 (financial pages), 701n25 (German interest unfounded), 165-67 (won’t hesitate to use police powers); Louis 1978 pp. 3-5, 211-13, 218-21 (Mackenzie King goes along), 225, 244, 247 (Apr’43 Eastwood minutes), 251-53, 463-64 (UK Yalta debate), 475-83 (US Yalta debate), 548-50 (US imperialism at forefront); Wikipedia 1939 royal tour of Canada; Collier & Horowitz 1976 pp. 127-28n, 119, 129n (Mackenzie King)
** Breen 1993** David H. Breen Alberta’s Petroleum Industry and the Conservation Board Edmonton: University of Alberta and the Energy Resources Conservation Board 1993
pp. 701n24, 164-65, 701n25, 165-67: “The British Admiralty had monitored oil developments in Alberta since 1906. … From late 1937, the financial pages of London newspapers began to report on Turner Valley developments, and various British parliamentarians, including Prime Minister Neville Chamberlain, began to receive letters advising that, given the importance and vulnerability of the nation’s oil supply, Great Britain should be looking closely at an attractive new source of supply developing”within the Empire” at Turner Valley. In August 1938, Air Marshal Sir Edwards Ellington visited the Turner Valley oilfield and spoke of Britain’s need for increased supplies of aviation fuel. Interest quickened even further after a press report—originating in Berlin in mid-September—claimed that German capitalists were planning to build a pipeline from Alberta and would accept crude oil in payment. … It was determined later than the alleged interest of the German corporation “Tropicorp” was unfounded, but this did little to slow the momentum of interest … By early October, as the momentum of interest continued to build, various London financial houses began to show enthusiasm for a Turner Valley pipeline project. …The really crucial question on everyone’s mind was what was the extent of Turner Valley’s proven oil reserves. It seemed appropriate therefore to send to London an official delegation that could offer authoritative information. …
Chasing the old dream of attracting British investment capital, Tanner and his party departed for the United Kingdom on 2 April 1939. Just before the Canadian delegation was due to arrive, representatives from the Admiralty, the Air Ministry and the Petroleum Department met with colleagues in the Dominion Office to coordinate the position of the British government. The chairman of the meeting, W. Bankes-Amery of the Dominion Office, set the tone of the discussion with his opening remarks. He observed that any consideration of the Alberta oilfields as a possible source of emergency supply had to be tempered with the realization that “any addition to United Kingdom purchases from Canada at such a time would raise almost insuperable exchange difficulties.” The well-informed director of the Petroleum Department pointed out that the Canadian delegation was not coming primarily to obtain backing from the British government, but rather to interest the financial community in the industry and to obtain capital there. But even this was not acceptable. Bankes-Amery pointed out that “in the present circumstances the Treasury would not want to see more sterling going to Canada” and that strong objections would likely be raised. …”no hope should be held out to them of government financial assistance for development and that, so far as possible, they should be encouraged rather to seek capital in Canada than in the City.” The obstacles to be overcome were more formidable than Tanner could have imagined.
… There followed a vigorous, four-week schedule of meetings with officials from government ministries, parliamentarians, oil companies, financial houses and private investors. … The importance of the role being played by Alberta’s new Conservation Board to ensure that the province’s oilfields would achieve maximum recovery was also pointed out. It was stressed that the powers of the Alberta Board were “a good deal stronger than the average in the United States.” Stating that “the Mounted Police have already been out several times in order to close down wells of producers who were not observing the Act,” the delegation sought to emphasize that these were powers that the Board would not hesitate to use. …
… The Alberta delegation returned to Canada well pleased, believing that they had accomplished their objectives.”
Louis 1978 William Roger Louis Imperialism at Bay: The United States and the decolonization of the British empire, 1941-1945 New York: Oxford University 1978
pp. 3-5, 211-13, 218-21, 225, 244, 247, 251-53, 463-64, 475-83, 548-50: “this book is concerned generally with the nature of imperialism and specifically with the conflicting colonial aims of the British Empire and the United States. As in earlier times, ‘imperialism’ was popularly believed to be the exploitation of the non-western world. During the First World War, Woodrow Wilson identified the struggle for overseas markets and raw materials as a cause of war. At American insistence, the former German colonies and parts of the Ottoman Empire were not annexed as colonies but administered as mandated territories under the League of Nations. They were held as a ‘sacred trust of civilization’. During the Second World War, Franklin D. Roosevelt viewed the continued existence of the colonial empires as a possible cause of future wars. He favoured the eventual independence of the colonies. Again at American insistence, the mandates of the League of Nations became trust territories under the United Nations and the system was expanded to include enemy colonial territories of Japan and Italy. The anti-colonial attitude of the United States gave powerful impetus to the decolonization of the European colonial empires, which is one of the great transformations of our age.2
2 For the best survey, see Rudolph von Albertini, Decolonization: The administration and future of the colonies, 1919-1960 (New York, 1971).
… Franklin D. Roosevelt also belonged to the epoch of the great European colonial empires and he held essentially the same outlook as Wilson two decades earlier. He also was a gradualist. He foresaw the possible independence of colonial peoples only after a period of tutelage by the ‘parent’ states. … Nevertheless he was quite certain that independence should be the ultimate goal for the colonies generally. In studying the ‘colonial question’ during the war, Roosevelt and many other Americans increasingly believed that the principles of self-determination would work in favour of the creation of the European colonial empires. Though he did not foresee the fragmentation that would occur in the period of decolonization, Roosevelt should be regarded as one of the fathers of the post-war world of politically independent nations.
Winston S. Churchill held the extreme view among Englishmen that the future world order would be based in large measure on the power, prosperity, and prestige of the British Empire, as it had in the nineteenth century. His ideas often reflected the experience … when he had spent his formative years in India, in the campaign in Africa against the Mahdi, and in the Boer War. He had witnessed, in his view, the benefits of peace and progress conferred by England … Now, during the Second World War, Churchill as Prime Minister faced the supreme challenge of collaborating not only with the leaders of South Africa, Australia, New Zealand, and Canada, but also the United States and other allied powers. Churchill is remembered, above all, as a great champion of the [white] English-speaking world. But it is equally important to bear in mind that he was a British Imperialist. Though Churchill was not an especially creative or forward-looking colonial statesman …
… On the 22nd of November 1942 Oliver Stanley became Colonial Secretary. Lord Samuel, commenting on the rapid change-over and Cranborne’s quick end of office, aptly quoted, ‘They have their exits and their entrances, and one man in his time plays many parts.’ … On the question of trusteeship his part was traditional. … From Churchill’s point of view he could be relied upon to hold the line. … Among his Cabinet colleagues, Stanley was not especially forceful, in part because of a certain diffidence of character. … In resisting international trusteeship, he was Churchill’s man.
… On the 5th of December 1942 Stanley, Attlee, Eden, and Cranborne (now Lord Privy Seal) submitted a memorandum to the War Cabinet on the need to counteract American criticism of British colonial policy. … They recommended a declaration on colonial policy which would reaffirm traditional British goals and ‘would keep the initiative in our hands’ … they hoped to commit the Americans in a public statement to the paternalistic principle of ‘Parent States’. If the Americans would agree that colonial administration was the responsibility of the parent state directly concerned, then the British would be willing to discuss the practical application of the concept to regions such as South-East Asia.6 …
6 In explanation of the special consideration given to this region, the memorandum reads: ‘South-Eastern Asia is in many ways a special case, since (a) it has been almost entirely occupied by Japan; (b) common defence in that area is more urgent than it is in other Colonial areas; (c) it is an area in which the United States have practical experience of Colonial administration.’ ‘Colonial Policy’, 5 Dec. 1942, W.P. (42) 544, CAB 66/31; CO 323/1858; DO 35/1014/WR8/12; FO 371/31527.
… On the 26th of December Lord Hailey met with Roosevelt and briefly discussed schemes for regional commissions … the President evidently had not given much thought to the project for a colonial declaration, but he ‘casually observed’ that he did not think the phrase ‘backwards peoples’ a happy one, ‘nor did he much like the phraseology “parent States”’. Churchill was next told that in fact the Secretary of State had mentioned the phrase “Parent States” to the British Ambassador without first reaching agreement about it with the President. … To this Churchill erupted … ‘Please note how very informal and insecure is the foundation on which the “Parent States” policy is being elaborated.’
In the meantime the Dominions had begun to respond. …
… The Canadian government felt ‘hesitant’ about venturing an opinion since Canada possessed no colonies. Nevertheless Canada had a deep interest in the issue because of the effect it would have on Anglo-American relations. … the Canadians cautioned against putting too much emphasis on post-war defence. On another issue of substance, the Canadians argued that the ‘Parent States’ should prove their seriousness about trusteeship by making the colonies more ‘international’. … The Canadians were willing to go along with the idea of ‘Parent States’.
… While the British aimed at obtaining a declaration that would reaffirm the status of the British Empire as a ‘Parent State’ and perhaps terminate the mandates system, the Americans were working towards an entirely different objective. In the winter and spring of 1943 it became increasingly clear to the British that colonial independence was the explicit American goal. …
… The Colonial Secretary himself was aghast that the subject of national independence for the colonies should even be broached. Ultimately the project came to an end in 1943 because Stanley proved inflexible. …
… The Colonial Office took a far more cataclysmic view [than the Foreign Office of a March 1943 draft US declaration on national independence]. With caustic irony Christopher Eastwood remarked that, though the word ‘independence’ occurred in the document no less than nineteen times, the Americans were in fact attempting to establish as sort of informal empire. ‘Independence is a political catchword which has no real meaning apart from economics. The Americans are quite ready to make their dependencies politically “independent” while economically bound hand and foot to them and see no inconsistency in this.’ Though he did not pursue this line of reasoning, he clearly expressed what he believed would be the result of American enthusiasm for independence:
[W]hatever the exact meaning, this emphasis throughout on independence implies the hope for the future lies in a great multiplication of small national sovereignties. Personally, I think this idea is disastrous. …
– Minutes by Eastwood, 21 Apr. 1943, CO 323/1858/9057B
Thus the official directly supervising the trusteeship issue in the Colonial Office believed that the United States and Britain were fundamentally at odds. Nevertheless he did not regard the matter quite so seriously as some of his colleagues. …
… The Colonial Secretary now wanted to see the project dropped entirely. Having initially hoped to see the Americans merely espouse the concept of ‘Parent States’, he had witnessed Hull’s attempt to transform the project into what he regarded as a muddled plan to liquidate the British Empire by trusteeship. …
… The colonial negotiations might have developed entirely differently had Cranborne remained Colonial Secretary. As events transpired, Stanley stood at the helm of British colonial policy and steered a course away from Anglo-American collaboration and towards freedom of British action. … it is clear that in 1943 Stanley preferred a British rather than an Anglo-American course and deliberately chose to ignore signals from the Americans and from his colleagues.
… THE AFTERMATH OF YALTA: LONDON
The colonial consequences of the Yalta accord were not as sharply apparent at the time as they are in retrospect. … The Colonial Office learned of the trusteeship formula with exasperated dismay. Aggrieved that important colonial business had been transacted without even consulting them, the Colonial Office’s officials again confirmed their own view that the spirit of appeasement lingered on in the Foreign Office. Now the Americans were being placated by giving away on issues that vitally touched the Colonial Empire.
Precisely how did the American trusteeship schemes threaten British colonial rule? … The more immediate answer is the Colonial Office’s loss of momentum as a result of Yalta. … there is some truth in the view that the British post-war colonial vision died at Yalta. In any event the Colonial Office henceforth adopted a defensive but by no means passive posture.
…THE AFTERMATH OF YALTA: WASHINGTON
… It is indeed the legalistic flavour of morality that distinguishes the American debate from the British. In London the discussions were remarkable for straightforward concern with British power and the integrity of the British Empire. …
… The debate was none the less just as intense as in British circles. …It is noteworthy that only in the last months of the war did the Secretaries of State, War, and Navy actually meet together to attempt to shape a common policy. … The President’s death on the 12th of April 1945—at the very time the trusteeship controversy reached its peak—transformed the situation and caused the Secretaries of State, War, and Navy to arrange their own compromise. Until then it was open bureaucratic warfare.
… Shortly before and after the Yalta conference, the confrontation occurred in a newly created inter-departmental Committee on Dependent Areas. The Departments established this body of high-ranking officials in part to settle the unfinished business on a complicated problem.
… [future Supreme Court Justice Abe] Fortas sat on the committee for Interior. State Department members included Nelson Rockefeller (at this time Assistant Secretary) … [who] had never before been involved in trusteeship affairs … [and] knew nothing about the scope of the trusteeship proposals. …
Mr. Rockefeller said that he did not see how trusteeship could be applied to any island on which we would have military bases. He did not see how it would be possible to maintain such bases if the members of any international organization body could wander about and discover their secrets. Admiral Willson commented that this was exactly the view of the Joint Chiefs of Staff, which felt that special provision had to be made for islands in which we had special security interests.
… the minutes of the committee are of considerable interest for the meaning of Yalta; and they also reveal the workings of the American government at this particular time. … It was during the meetings of the inter-departmental Dependent Areas Committee in February 1945, however, that the concept of the ‘strategic trust’ emerged in the form that found its way into the United Nations Charter.
… It was Abe Fortas who played the key part in attempting to reconcile the two parties. Since he represented the Department of the Interior, his stand is also significant as revealing the American attitude towards dependent peoples under the jurisdiction of the United States. He did not fear visiting missions of an international organization, provided they would not be ‘inquisitional’. … he responded entirely sympathetically to the demands of the Joint Chiefs for military security. Fortas therefore tried to find middle ground between the State Department and military positions. … His solution was to accept the demands of the military representatives but to make them, in his phrase, more ‘palatable’ to the world at large by reconciling them to humane principles of trusteeship. … ’The plain fact’, Fortas stated, was that their trusteeship scheme ‘did not place strategic areas under any real trusteeship system.’ The committee members would provide ‘an elastic escape clause’ whereby the American military could do anything they wanted. How could this be justified, or, to repeat Fortas’s phrase, made more palatable to the American public? He provided a simple argument. It was the same argument that ran through the debates on the defence of the British Empire since the late nineteenth century. The case had to be made, not on the grounds of national security, but on grounds of world security. ‘There was’, according to Fortas, “an important basic principle involved here. …’ … On the 2nd of March Fortas made this plea.
… These reservations were being made in the interest of world security rather than our own security … what was good for us was good for the world. … these strategic areas … were to be operated in the interest of world security and for the security of everyone. Only on this ground could these reservations be justified.
… At least the inter-departmental Committee on Dependent Areas clarified the central problem. In Fortas’s clear-cut words, this was the status of a strategic territory within a trusteeship system. … In March 1945 however it appeared that this dedicated labour would be fruitless. The Secretaries of War and Navy, Henry L. Stimson and James Forrestal, rebelled against the idea of trusteeship itself. Stimson’s first blast had in fact occurred shortly before Yalta. In a well-known memorandum to the Secretary of State, he developed what might be called the Stimson doctrine of ‘strategic outpost’. … Here is Stimson’s classic formulation of the problem:
Acquisition of them [the Japanese mandated islands] by the United States does not represent an attempt at colonization or exploitation. Instead it is merely the acquisition by the United States of the necessary bases for the defense of the security of the Pacific for the future world.
To serve such a purpose they must belong to the United States with absolute power to rule and fortify them. They are not colonies; they are outposts, and their acquisition is appropriate under the general doctrine of self-defense by the power which guarantees the safety of that area of the world.
With that judgement the Secretary of the Navy whole-heartedly concurred. As Stimson recorded in his diary—with words that proved true for the entire episode—‘Jim Forrestal proved to be a very vigorous supported of my views.’
… STRATEGIC SECURITY AND THE COLONIAL SITUATION IN 1945
‘It is not only in Europe that we are likely to have our troubles!’ wrote a Foreign Office official in January 1945.1
1 M.E. Dening to Sterndale Bennett, 17 Jan. 1945, FO 371/46325.
… ’If they were not so ham-fisted in their conduct of international affairs, this might be all to the good. …
… At present American imperialism is in the forefront in the conduct of affairs in the Far East, and not only is there a tendency to elbow us out but there is also [a] smearing campaign …
… Dening was accurate in saying that the Americans wished to alter the ‘equilibrium’ in Asia. They did not want a return to the pre-war status quo.”
Wikipedia 1939 royal tour of Canada
George VI and Mackenzie King in London, May 1937. While in London, Mackenzie King brought up the monarch taking a royal tour of Canada.
“The 1939 royal tour of Canada by King George VI and Queen Elizabeth was undertaken in the build-up to World War II as a way to emphasise the links between Britain and the Dominion of Canada. The royal tour lasted from 17 May to 15 June, covering every Canadian province, the Dominion of Newfoundland, and a few days in the United States. …
… It was the first visit by a reigning monarch of Canada and also the first time a Canadian monarch had set foot in the United States. …
… Governor General Lord Tweedsmuir, in an effort to foster Canadian identity, conceived of a royal tour by the country’s monarchs …
… Prime Minister Mackenzie King, while in London for the coronation in May 1937, formally consulted with the King on the matter.
Elizabeth’s mother had died in 1938 …
… 7 June 1939 … George VI and Mackenzie King departed Canada to conduct a state visit to the United States. … George VI and Mackenzie King’s return from the United States on 12 June.
… the royal couple arrived in Quebec City for their tour of Canada …
The king and queen took up residence at La Citadelle, where the King performed his first official tasks, amongst which was the acceptance of the credentials of Daniel Calhoun Roper as the American envoy to Canada.
… For Mackenzie King, this assertion of Canada’s status as a kingdom independent of Britain was a key motive behind the organization of the tour …
Another factor, however, was public relations; the presence of the King and Queen, in both Canada and the United States, was calculated to shore up sympathy for Britain in anticipation of hostilities with Nazi Germany.
Elizabeth told Canadian Prime Minister William Lyon Mackenzie King, “that tour made us”, and she returned to Canada frequently both on official tours and privately.”
Collier & Horowitz 1976 Peter Collier and David Horowitz The Rockefellers: An American dynasty [1976] New York: Signet, 1977
pp. 127-28n, 119, 129n: “[Mackenzie King] was always available to Rockefeller, yet he declined offers to become a permanent employee. … In 1919, King returned to his homeland and picked up the pieces of what had seemed a ruined political career. He was elected leader of the Liberal party, and in 1921 became Prime Minister of Canada, a position he would hold for all but five of the years until his retirement in 1948. As a token of his affection for King, Junior sent him a gift of $100,000 [1.3 million in 2022$] when he left the government and had the Rockefeller Foundation provide another [$1.3M] to help King prepare his private papers and diaries for publication.’
7. Breen 1993 pp. 170-72 (well acquainted), 187 (only substantive review ever), 191 (oil controller), 186-87 (untimely death at 56), 199 (Allen left); McGillivray & Lipsett 1940 pp. 248-51; Taylor 2019 p. 131 (scholar mischaracterizing McGillivray report)
Breen 1993 David H. Breen Alberta’s Petroleum Industry and the Conservation Board Edmonton: University of Alberta and the Energy Resources Conservation Board 1993
pp. 170-72, 187, 191: “McGillivray was well-acquainted with the petroleum industry in Alberta. He had practiced law in the province since 1907, and from his vantage point on the bench of the Alberta Supreme Court after 1931, he had heard many of the more important cases relating to the industry, including the famous Spooner Oils Ltd. v. Turner Valley Gas Conservation Board. He was also well known in political circles, having been leader of the Conservative party in Alberta Legislature from 1926 to 1929. …
To bolster their own expertise and to ensure that they had the best available technical opinion to set against the varied evidence that they expected to receive from industry, [Commission counsel from the Attorney General’s office, J.J.] Frawley was sent to the United States to find “men entirely independent of the industry, who yet could speak with a voice of authority concerning the industry, men whose reputations as petroleum experts [was] international and whose integrity [could not] be called into question. The three individuals who Frawley persuaded to come to Alberta greatly influenced the shape of the Commission’s eventual report.” …
… The Commission’s review and findings regarding conservation practice in Alberta are worthy of particular consideration, not only because there were central to the evaluation of production and pricing with the commission was specifically charged but also because they emerged from the only substantive review of the Conservation Board that has ever been undertaken.
… For nearly a year, the Board had been without a chairman. …Through the spring of 1940 … Possession of the McGillivray Commission’s exhaustive report did little to arrest the indecision and drift in Edmonton.
… In the spring of 1940, the realization had finally dawned upon Ottawa politicians and military leaders that the war was going to be long and that the Allies were much more dependent upon Canadian material resources than initially forecast. … George Cottrelle, a former Toronto banker and the chairman of Union Gas was appointed oil controller. His potential power was awesome. … his task was to manage the nation’s fuel supply.”
pp. 186-87, 199: “When presented to Albertans in April 1940, the report of the McGillivray Commission attracted little more than passing attention. Much of what the Commission had to say had been anticipated. … Although more cynical Albertans might have wondered about the coincidence, the retail price of gasoline dropped during the course of the inquiry and eased the pressure upon the Aberhart government. Interest had also largely dissipated in other matters raised by McGillivray. Although Albertans had closely followed the early stages of the commission inquiry, they had become preoccupied with events in Europe by the spring of 1940. …
… For all its efforts, and despite its thorough assessment of the petroleum industry in the province, the impact of the McGillivray Commission was modest. Events, at first beyond and then within Alberta’s borders, conspired to submerge its influence during the following decade. McGillivray’s untimely death in 1940 at 56 removed the one individual who might have reminded Albertans of the Commission’s findings. … hastening the removal of the pioneer oilmen … Their last important battle was fought [and lost] before the McGillivray Commission.
… a unique [June 1941] Board order … Entitled “The Conservation of Petroleum Resources,” Order No. 63 formally presented the Board’s conservation philosophy … Having clearly articulated his concern about the situation in Turner Valley to the Alberta government and having issued his conservation commandments, [Alberta’s second American chair of the o&g regulator after >year vacancy, American Robert] Allen left the province for Washington to advise the US government on growing oil supply and distribution problems. At first, it was considered that Allen was on loan to the US government, but it soon became apparent that he would not be returning to Alberta.”
McGillivray & Lipsett 1940 A.A. McGillivray and L.R. Lipsett Alberta’s Oil Industry: The report of a Royal Commission appointed by the Government of the Province of Alberta under the Public Inquiries Act to inquire into matters connected with petroleum and petroleum products Calgary: Imperial Oil 1940
( pp. 248-51: “We think the following points may be emphasized in connection with what we have said on the subject of Conservation and Proration in Alberta.
1. That the ideal in Conservation is attained only under unit operation. …
4. That in a field of divided ownership Conservation cannot as a practical matter be disassociated from the idea of economic equilibrium and the idea of equity. …
6. That a legislative enactment in respect to Conservation and Proration should give recognition to the following:
(a) That a Conservation and Proration body should not be given unlimited power …
(e) That provision should be made by the Legislature that everyone who may be prejudicially affected by an order of the Board shall have opportunity of being heard before that order be made. …
(g) That the Legislature should provide that the rulings of the Board should be the subject of appeal to the courts …
(i) That the rules of procedure leading to such an appeal should be provided for. …
12. That the government, as guardians of the public interest, should keep a watchful eye upon the activities of the industry in all its branches.
13. That this may best be done by reconstituting the present Conservation and Proration Board, by providing for its freedom from political interference, by providing for its close contact with industry, and by providing for performance by the Board of the following added duties over and above those that have to do with Conservation and Proration: …
(c) That from this starting point the Board should accumulate, preserve and produce on request, any data as to the Turner Valley oil field and as to any other part of the Province, which can reasonably be expected to be of interest to those directly or indirectly concerned with the petroleum industry.
(d) That the Board should be required to be at all times fully informed as to every branch of the petroleum industry …
(g) That the Board be required to be familiar with the cost and profit performance and the price spreads in respect of all branches of the industry. …
(i) That the Board should be required to be informed and able to report upon tax evasion”
Taylor 2019 Graham D. Taylor Imperial Standard: Imperial Oil, Exxon, and the Canadian oil industry from 1880 Calgary: University of Calgary 2019
ix + back-cover blurbs: “This is not an”official” history of Imperial Oil Ltd. I received no financial support from Imperial Oil, Exxon/Mobil or any of their affiliates … I have used material that is available to any researcher.”
“… a triumph.” – Mira Wilkins, Florida International University
“… authoritative historical study … a study of significance” – Geoffrey Jones, Harvard
“… a ground-breaking contribution” – David Breen, UBC
p. 131: “Meanwhile the government announced the formation of a provincial royal commission to be chaired by Justice A.A. McGillivray of the Alberta Supreme Court. The McGillivray Commission … asserted that the conservation board’s power should be restricted to”proration and conservation .””
8. IDoSOH n.d. + Dowd 2011 + Zinn 1980 ch16 (Atlantic Charter); NYT 20/11/24 (“dynamite or axe”); Breen 1993 pp. 441-43 (Abasand v1 + v2)
DoSOH n.d. US Department of State “The Atlantic Conference & Charter, 1941” in Office of the Historian Milestones in the History of US Diplomatic Relations: 1937-1945 online
“The meeting had been called in response to the geopolitical situation in Europe by mid-1941. Although Great Britain had been spared from a German invasion in the fall of 1940 and, with the passage of the US Lend Lease Act in March 1941, was assured U.S. material support, by the end of May, German forces had inflicted humiliating defeats upon British, Greek, and, Yugoslav forces in the Balkans and were threatening to overrun Egypt and close off the Suez Canal, thereby restricting British access to its possessions in India. When the Germans invaded the Soviet Union on June 22, 1941, few policymakers in Washington or London believed that the Soviets would be able to resist the Nazi onslaught for more than six weeks. While the British Government focused its efforts on dealing with the Germans in Europe, they were also concerned that Japan might take advantage of the situation to seize British, French, and Dutch territories in Southeast Asia.
Churchill and Roosevelt met on August 9 and 10, 1941 aboard the U.S.S. Augusta in Placentia Bay, Newfoundland, to discuss their respective war aims for the Second World War and to outline a postwar international system. The Charter they drafted included eight “common principles” that the United States and Great Britain would be committed to supporting in the postwar world. Both countries agreed not to seek territorial expansion; to seek the liberalization of international trade; to establish freedom of the seas, and international labor, economic, and welfare standards. Most importantly, both the United States and Great Britain were committed to supporting the restoration of self-governments for all countries that had been occupied during the war and allowing all peoples to choose their own form of government.
While the meeting was successful in drafting these aims, it failed to produce the desired results for either leader. …
… Nevertheless, Churchill realized that the joint declaration was the most he could accomplish during the conference. While the United States would remain neutral, the declaration would raise the morale of the British public and, most importantly, bind the United States closer to Great Britain. Therefore, when Churchill forwarded the text of the declaration to his Cabinet on August 11, he warned them that would it be “imprudent” to raise unnecessary difficulties. The Cabinet followed Churchill’s recommendation and approved the Charter.
While the Atlantic Charter of August 1941 was not a binding treaty, it was, nonetheless, significant for several reasons. First, it publicly affirmed the sense of solidarity between the U.S. and Great Britain against Axis aggression. Second, it laid out President Roosevelt’s Wilsonian-vision for the postwar world; one that would be characterized by freer exchanges of trade, self-determination, disarmament, and collective security. Finally, the Charter ultimately did serve as an inspiration for colonial subjects throughout the Third World, from Algeria to Vietnam, as they fought for independence.”
Dowd 2011 Fraser Institute senior fellow Alan W. Dowd “A world worth fighting for: The power and promise of the Atlantic Charter, 70 years old and still relevant” American Legion Magazine v170#2 (August 2011): 20-28
“one of the most consequential summits in history …
… One of those destroyers joining the Augusta was the USS Mayrant, which happened to carry FDR’s son, Franklin, a Navy ensign who was “completely surprised when he found, on coming on board, that he was to report to the commander-in-chief of the Navy himself,” FDR later recalled. FDR’s other son, Elliott, also joined the flotilla, which gathered off Newfoundland.
… First and foremost, FDR and Churchill sought no territorial gain. This stood in stark contrast not only to past conflicts but also to what their enemies and their chief ally sought. After all, Nazi Germany, Imperial Japan and Soviet Russia gobbled up territory from the outset of the war.
FDR and Churchill also vowed “no territorial changes that do not accord with the freely expressed wishes of the peoples concerned” and endorsed “the right of all peoples to choose the form of government under which they will live.”
… Twenty-two other nations eventually signed on to FDR and Churchill’s declaration of peace.
… it was during the Atlantic Conference that FDR quietly pulled the plug on American isolationism. … Thus was born what Churchill later called the “special relationship.” … the relationship between America and Britain blossomed into something arguably without any historical precedent.
… Immediately after his summit with FDR, Churchill told the House of Commons that Britain and the United States “will have to be somewhat mixed up together in some of their affairs for mutual and general advantage.” He envisioned joint military bases, “common study of potential dangers,” and “interchange of officers and cadets.” He even mused about “common citizenship” for Americans and Brits.
Washington and London never got quite that far, but they did create a “Combined Chiefs of Staff” during the war.
Although the two partners have had occasional disagreements—Suez and Vietnam come to mind—they have been nearly inseparable in navigating the postwar world: the Berlin Airlift was an Anglo-American operation; Britain and America built NATO and continue to hold it together; they defended Korea at the beginning of the Cold War, liberated Kuwait at the end and faced down Moscow in the years between; they stabilized the Balkans, disarmed Iraq and toppled Saddam Hussein; and today, these brother nations are dismantling al Qaeda, rebuilding Afghanistan, giving Libya a chance at “a better future,” and riding out what Foaud Ajami calls the Arab world’s “storm wave of freedom.”
… Regrettably, not every nation has embraced the rule of law, self-government and free trade—all principles enshrined in the Charter. FDR and Churchill were not so idealistic as to think they could perfect mankind or remedy the world’s ills with a piece of paper.”
Zinn 1980 Howard Zinn “A people’s war?” ch16 in A People’s History of the United States: 1492-present (New York: Harper & Row 1980)
“One of the judges in the Tokyo War Crimes Trial after World War II, Radhabinod Pal, dissented from the general verdicts against Japanese officials and argued that the United States had clearly provoked the war with Japan and expected Japan to act. Richard Minear (Victors’ Justice) sums up Pal’s view of the embargoes on scrap iron and oil, that”these measures were a clear and potent threat to Japan’s very existence.” The records show that a White House conference two weeks before Pearl Harbor anticipated a war and discussed how it should be justified.
A State Department memorandum on Japanese expansion, a year before Pearl Harbor, did not talk of the independence of China or the principle of self-determination. It said:
… our general diplomatic and strategic position would be considerably weakened-by our loss of Chinese, Indian and South Seas markets (and by our loss of much of the Japanese market for our goods, as Japan would become more and more self-sufficient) as well as by insurmountable restrictions upon our access to the rubber, tin, jute, and other vital materials of the Asian and Oceanic regions.
Once joined with England and Russia in the war (Germany and Italy declared war on the United States right after Pearl Harbor), did the behavior of the United States show that her war aims were humanitarian, or centered on power and profit? Was she fighting the war to end the control by some nations over others or to make sure the controlling nations were friends of the United States? In August 1941, Roosevelt and Churchill met off the coast of Newfoundland and released to the world the Atlantic Charter, setting forth noble goals for the postwar world, saying their countries “seek no aggrandizement, territorial or other,” and that they respected “the right of all peoples to choose the form of government under which they will live.” The Charter was celebrated as declaring the right of nations to self-determination.
Two weeks before the Atlantic Charter, however, the US Acting Secretary of State, Sumner Welles, had assured the French government that they could keep their empire intact after the end of the war: “This Government, mindful of its traditional friendship for France, has deeply sympathized with the desire of the French people to maintain their territories and to preserve them intact.” The Department of Defense history of Vietnam (The Pentagon Papers) itself pointed to what it called an “ambivalent” policy toward Indochina, noting that “in the Atlantic Charter and other pronouncements, the US proclaimed support for national self-determination and independence” but also “early in the war repeatedly expressed or implied to the French an intention to restore to France its overseas empire after the war.”
In late 1942, Roosevelt’s personal representative assured French General Henri Giraud: “It is thoroughly understood that French sovereignty will be re-established as soon as possible throughout all the territory, metropolitan or colonial, over which flew the French flag in 1939.” (These pages, like the others in the Pentagon Papers, are marked “TOP SECRET-Sensitive.”) By 1945 the “ambivalent” attitude was gone. In May, Truman assured the French he did not question her “sovereignty over Indochina.” That fall, the United States urged Nationalist China, put temporarily in charge of the northern part of Indochina by the Potsdam Conference, to turn it over to the French, despite the obvious desire of the Vietnamese for independence.
That was a favor for the French government. But what about the United States’ own imperial ambitions during the war? What about the “aggrandizement, territorial or other” that Roosevelt had renounced in the Atlantic Charter?”
NYT 20/11/24 “Oil conservation urged by Doherty” New York Times (20 November 1924): 38
‘Henry L. Doherty of New York, head of Cities Service organization, addressing the National Petroleum Marketers’ Association annual meeting here today said the whole industry is in a bad way and the public, not knowing enough about it to insist on its correction, “will pay for eternity,” the price of the industry’s wasted natural resources, its demoralization and its increasing competition.
… “Oil and gas belongs to the man who can capture it, and this means that we have absolutely no control over our production. Discovery of an oil pool results in a frenzied effort to exhaust it as rapidly as possible, without regard to the market. If we do not get our house in order sooner or later some one else will attempt to do it with a stick of dynamite or an axe. … Oil producers are diseased with optimism. Any increase in drilling activities should be discouraged by everybody.”
… The object of Mr. Doherty’s address was to urge the industry to make such changes in the basic methods of producing crude oil that the raw product would not be dumped onto the market in an amount larger than the market’s ability to absorb it. He urged that the “industry stimulate every oil company” to develop as fast as possible the utilization of oil and to secure the widest possible application for every use which is developed. He asked that support, encouragement and assistance be given to inventors and manufacturers of oil-burning apparatus.’
Breen 1993 David H. Breen Alberta’s Petroleum Industry and the Conservation Board Edmonton: University of Alberta and the Energy Resources Conservation Board 1993
pp. 441-43: “The first successful commercial activity in the oil sands began in the late 1920s with R.C. Fitzsimmons and his International Bitumen Company … Between 1930 and 1937, Fitzsimmons … intermittently produced roofing tar and eventually some oil from the separated bitumen … Based on the technical foundation established by petroleum engineer James McClave at a prototype hot water separation plant in Denver … After a series of design adjustments and the building of a small refinery, operations on a regular basis began in May 1941. In November, the separation plant was destroyed by fire …
… This hint of Abasand’s potential, plus the emerging wartime shortage of petroleum products, combined to arouse federal interest, which led to the restructuring of Abasand Oils as a joint government and privately owned enterprise. Constructed largely with federal money, the rebuilt separation plant and refinery started intermittent trial runs in December 1944. Operations seemed promising, but on 16 June 1945 the plant was razed once again. Minister of Reconstruction C.D. Howe assessed the situation and concluded that a new plant should not be built at government expense … In late 1946, what remained of Abasand’s assets, mainly its oil-sand leasehold, were returned to its private shareholders.
This left the initiative with the provincial government, and it was not an unwelcome prospect. … The Alberta government had already moved, we before the second Abasand fire, to bolster the province’s position in the oil sands with its own government-supported enterprise.”
9. Brennan 2008 pp. 69-72; Ascah 1999 pp. 129-31; Louis 1978 p. 247 (‘independent’ while ‘bound hand & foot’)
Brennan 2008 Brian Brennan The Good Steward: The Ernest C. Manning story Calgary: Fifth House 2008
pp. 69-72: “By April 1943, Aberhart was worn out, constantly tired, and no longer able to fulfill official engagements. His doctor told him he should take a prolonged rest. … he told MLA Alfred Hooke,”Alf, I did not know a man could feal as weak as I do and still walk around. I am looking forward to a little rest at the coast.” He and Jessie left Edmonton by train on 18 April. … When they reached Vancouver … Protesting loudly, because he detested hospitals, Aberhart entered Vancouver General Hospital for a clinical examination. He was diagnosed with cirrhosis of the liver, a condition usually linked to chronic alcoholism but … Nobody has ever suggested that Aberhart had a problem with alcohol. …
Aberhart discharged himself from the hospital after a week … A month later, he took a turn for the worse. He went back into the hospital where he was told he could survive only with weekly intravenous treatments … and he resigned himself to death. …
On 22 May, Aberhart’s kidneys failed and he slipped into a coma. The public was told that his doctors had given up all hope for his recovery. … He died early Sunday morning, 23 May …
Aberhart was buried at Burnaby’s Forest Lawn Cemetery after Jessie told the media she wanted it that way, “We were too unhappy in Alberta,” she said.
… Manning cut off contact with Jessie and her daughters after delivering the eulogy for Aberhart. He did not even attend Jessie’s funeral when she died in Calgary in 1966. This particularly upset daughter Ola, who expressed her bitterness in an interview with John Barr in 1970: “We had taken him into our home and made him part of our family, yet we never heard from him after my father died.” In the same way that Manning had distanced himself from his family in Saskatchewan after moving from Rosetown to Calgary in 1927, he distanced himself from Aberhart’s family after his mentor died. None of Aberhart’s family ever learned the reason why.”
Ascah 1999 Robert L. Ascah Politics and Debt: The Dominion, the banks, and Alberta’s Social Credit Edmonton: University of Alberta 1999
pp. 129-31: “It was only after Aberhart’s death … that representatives from Wood Gundy and The First Boston Corporation met with Premier Ernest Manning … to work out a debt reorganization plan. On June 6, 1945, the Alberta Cabinet passed Order-in-Council 925/45 that outlined the government’s debt reorganization program.
Significantly, this program was two-pronged, the first included revising the existing financial arrangements and taxation agreements between Alberta and the Dominion, the second aspect dealt with curing the 1936 default. …
The transaction evolved in an unusual way. Without the concurrence of the Legislative Assembly, the government agreed on a reorganization program to be put to bondholders. According to the Order-in-Council of June 1945, once the Dominion had passed its Order … and sufficient bonds were deposited with the province to justify proceeding with the Debt Reorganization program, the Provincial Treasurer was authorized to make an offer to the holders of outstanding bonds and debentures (including those in default) and Alberta savings certificates (excluding bonds of Alberta and Great Waterways Railway Company). The offer was submitted to the minister of Finance of Canada and published in the Alberta Gazette and deemed to be in effect upon its publication in the Gazette.
It is remarkable that such a plan was undertaken without the consent of the Legislature although the Order tersely noted that a special session of the Legislature was called “…to legalize and validate the Order.” Clearly this was a plan that had the involvement and backing of the Dominion Government, the Bank of Canada, and representatives of domestic and foreign bondholders and knowledge of its existence limited to only a few key players in the Alberta government. Indeed, there were sanctions against trading in Alberta bonds then in default … Understandably governments were concerned with a possible scandal where insiders bought up cheap Alberta bonds, which would rise dramatically in value once the debt reorganization plan was made public.
… On July 17, 1945 Order-in-Council 1168/45 was passed. This Order authorized the publication of the Debt Reorganization Offer, which served as an offering circular to the holders of outstanding provincial and provincially guaranteed securities. …
This complex refinancing was eventually authorized under The Provincial Debt Reorganization Act assented to on July 26, 1945. By March of 1946 only $3.2 million of unmatured debentures remained outstanding. In 1947 Moody’s revised Alberta’s credit rating from Baa from Ba. In 1952, Alberta’s rating was raised to A. Thus Alberta had returned to the international capital markets. The war with the “money power” was over.”
Louis 1978 William Roger Louis Imperialism at Bay: The United States and the decolonization of the British empire, 1941-1945 New York: Oxford University 1978
p. 247: “The Colonial Office took a far more cataclysmic view [than the Foreign Office of a March 1943 draft US declaration on national independence]. With caustic irony Christopher Eastwood remarked that, though the word ‘independence’ occurred in the document no less than nineteen times, the Americans were in fact attempting to establish as sort of informal empire. ‘Independence is a political catchword which has no real meaning apart from economics. The Americans are quite ready to make their dependencies politically “independent” while economically bound hand and foot to them and see no inconsistency in this.’ Though he did not pursue this line of reasoning, he clearly expressed what he believed would be the result of American enthusiasm for independence:
[W]hatever the exact meaning, this emphasis throughout on independence implies the hope for the future lies in a great multiplication of small national sovereignties. Personally, I think this idea is disastrous. …
– Minutes by Eastwood, 21 Apr. 1943, CO 323/1858/9057B
Thus the official directly supervising the trusteeship issue in the Colonial Office believed that the United States and Britain were fundamentally at odds. Nevertheless he did not regard the matter quite so seriously as some of his colleagues. …”
10. Breen 1993 pp. 227-29 (Dr. Boomer); Handlin 1955 p. 106 (‘efficiency’)
Breen 1993 David H. Breen Alberta’s Petroleum Industry and the Conservation Board Edmonton: University of Alberta and the Energy Resources Conservation Board 1993
pp. 228-29: “Discovered in 1944 by the Shell Oil Company of Canada, a relative newcomer to the Alberta drilling scene, the Jumping Pound gas field … By the spring of 1945, it was apparent that Jumping Pound might be the largest gas field yet discovered in Alberta, thus bringing Shell and the Conservation Board together to discuss eventual production arrangements. Both parties were attracted to the idea of operating the entire prospective field area identified by Shell’s seismograph studies as a simple unit. To this end, the Board made known its support of Shell’s efforts to consolidate and merge the petroleum and natural gas rights of all those who had an interest in the field. …
This first unit agreement in Alberta set the precedent of joint participation and co-operative development, an ideal that promised an escape from the endless controversy and wasteful practice that had attended development in Turner Valley. It offered an example and a formula that were fitting tributes to Shell Oil Company and particularly to Board Chairman Dr. Edward Boomer, who died of a heart attack just four days after the agreement was announced.
Boomer’s passing was mourned by the academic community, who recognized the loss of one of Canada’s outstanding research scientists, and by the petroleum industry which had come to appreciate the extent of his technical knowledge. … With Boomer’s death, the Alberta government had lost a chairman who had begun to make the Conservation Board an effective presence province wide, not just in Turner Valley.”
pp. 227-29: “Another part of Boomer’s effort to establish a stronger presence outside Turner Valley was the Conservation Board’s continuing endeavour to enforce 40-acre well spacing. … When California Standard and Pacific Petroleums requested that Boomer and his colleagues allow 20-acre spacing in a portion of the small Princess oilfield, the Board agreed.
… Of the various measures carried forward and initiated during Boomer’s administration, perhaps the most important was the promotion and approval of an agreement to operate the province’s newest and most promising gas field in a unitized fashion. Discovered in 1944 by the Shell oil Company of Canada, a relative newcomer to the Alberta exploration scene … By the spring of 1945, it was apparent that Jump Pound might be the largest gas field yet discovered in Alberta, thus bringing Shell and the Conservation Board together to discuss eventual production arrangements. Both parties were attracted to the idea of operating the entire prospective field area identified by Shell’s seismograph studies as a simple unit. … [On 23 October 1945], the Board was happy to … issue “Pool Permit No. I” to the Shell Oil Company as operator of the “Jumping Pound Unit Agreement.”
This first unit agreement in Alberta set the precedent of joint participation and co-operative development, an ideal that promised an escape from the endless controversy and wasteful practice that had attended development in Turner Valley. It offered an example and a formula that were fitting tributes to Shell Oil Company and particularly to Board Chairman Dr. Edward Boomer, who died of a heart attack [27 October 1945] just four days after the agreement was announced.”
Handlin 1955 Oscar Handlin “Capitalism, power, and the historians: An essay review” New England Quarterly v28#1 (March 1955): 99-107
p. 106: “For Professor Nevins … the ultimate justification for the Standard Oil tactics is that of efficiency. … The question is never confronted squarely. Yet there is occasional evidence, as in the resistance to such innovations as the pipe line, that efficiency was not the end or purpose of such combinations.”
11. Brennan 2008 pp. 88-91; Taylor 2019 pp. 144-45, 149, 140, 195, 169-70; Elkins 2018 p. 81 (liberal imperial authoritarianism) + Elkins 2022 pp. 435-39 (coincidental timing with UK retreat from Palestine?); Richards & Pratt 1979 pp. 78-79 (Tanner); Shaffer 1980 pp.252-53 (‘only industrialized capitalist country’), 255 (‘retard rather than expand’), 259-60 (‘terms more favourable to large oil co’s’)
Brennan 2008 Brian Brennan The Good Steward: The Ernest C. Manning story Calgary: Fifth House 2008
pp. 88-91: “The discoveries at Leduc, Redwater, and elsewhere left the Manning administration with two choices to be made regarding the future development of Alberta’s newly expanding oil and gas resources. The first was to let the American companies continue … reaping the … rewards … The second was to go the Saskatchewan CCF route and develop an Alberta based industry, using either a government-owned oil company or a government-controlled public-private partnership. …
Public ownership of the oil industry was also a non-starter as far as Manning was concerned … For Manning and his administration, the most sensible solution was to let the Americans keep taking …
Because he was keen to assure the Americans that Alberta was a safe place to invest, and that the province’s trade unions would not cause them any grief, Manning took steps in 1948 to keep the unions in check … introduced sweeping amendments to the Alberta Labour Act that union leaders denounced as “draconian.” One provision made strikes illegal while conciliation or arbitration was ongoing. A second … permitted employers to fire the striking employees. A third ruled that any attempt to organize a workforce required the consent of the employer. …
The province’s unions were virtually unanimous in their opposition to the government’s 1948 rewrite of the Alberta Labour Act. However, they opted not to make a big stink about it during the 1948 provincial election campaign. That left Manning free to create what labour historian Alvin Finkel has described as an “increasingly reactionary climate for labour relations in the province without political penalty.” …
… Manning did say in later years that he would have preferred to see Canadian rather than American companies developing Alberta’s oil and gas resources. But Central Canada’s investment houses had shown no interest in diverting risk capital to Western Canada for exploration and development either before or after the Second World War. Nor, during the time of economic uncertainty immediately before the war, had British industrialists shown any interest in investing. That left Alberta with no one to turn to except the Americans …
… The big Leduc oil strike of 1947 was one post-war event that cleared the way for Premier Ernest Manning and his Social Credit administration to stop pursuing the policy of unorthodox monetary reforms that they once believed were the only solution to Alberta’s economic problems. The expulsion of the anti-Semitic Douglasites from the Social Credit movement was another.”
Taylor 2019 Graham D. Taylor Imperial Standard: Imperial Oil, Exxon, and the Canadian oil industry from 1880 Calgary: University of Calgary 2019
pp. 144-45, 149, 140, 195, 169-70: “A crucial meeting in … the quest for oil in Alberta … took place on April 19, 1946, attended by the major geologists from both companies including Link, Hopkins, Haider, and Weeks. They mapped out an ambitious strategy that would cover a range of potential western Canadian sites, but focused on an area in Alberta around Edmonton that they regarded as the most likely to yield good results. Seismic studies of the 25,000 square mile area were ordered for the search, a novelty for Alberta at that time—seismographic research had been pioneered … for Jersey Standard in the 1930s and was now being applied to their other affiliates.
Imperial’s accounts of the steps that led to the Leduc discovery imply that it was carefully planned and executed … the initial drilling was intended to penetrate … at about 4,000 feet … most of the big oil discoveries to follow in Alberta went to … more than 5,000 feet … by early February 1947, Imperial managers felt confident that a strike was imminent and set the date for the public unveiling of their success for February 13, 1947.
… Leduc #3 at 5,380 feet also proved a gusher. In the following year Imperial discovered another field, larger than Leduc, at Redwater … which ultimately held 800 million barrels of recoverable oil.
… In 1947 Imperial Oil purchased the Whitehorse refinery, which had cost $22.5 million (USD) to build for $1 million; it then dismantled the refinery and shipped it to Edmonton at a cost of $9 million to be rebuilt as the refinery for the Leduc oil field.
… By 1949, with the development of the Redwater oil field, it was clear that a regulatory system developed primarily for … the Turner Valley needed to be revised
… The decade after the Leduc discovery had truly been a “golden age” for Imperial Oil. The company had invested more than $1 billion (CAD) in its expansion between 1950 and 1959, but the returns had been substantial. The book value of shareholders’ investment rose [$373] million (CAD) in that period; dividends amounted to $283 million (CAD), representing 55 per cent of earnings after taxes.”
Elkins 2018 Caroline Elkins “The ‘moral effect’ of legalized lawlessness: Violence in Britain’s twentieth-century empire” Historical Reflections v44#1 (Spring 2018): 78-90
p. 81: “In the case of Palestine, and indeed much of the twentieth-century Anglo-colonial world, British liberalism gave rise to a framework of permissible norms and logics of violence in empire that myriad scholars often misunderstand, if they examine it at all. When Steven Pinker suggests that violence was on the decline and humanitarianism on the rise in the twentieth century, he offers the myth of British imperial benevolence an academic fillip that can scarcely withstand empirical scrutiny. Pinker ignores copious amounts of historical evidence, including countless files documenting Britain’s creation and deployment of violent repression in 1930s Palestine and elsewhere in the empire, not to mention the lived experiences of hundreds of millions of black and brown people, some of whom offer detailed accounts of systematic violence throughout the twentieth-century British imperial world, through memoirs, appeals to British and international commissions, letters to Colonial Office, newspaper articles, and other sources.
… Liberal imperialism, the twinned birthing of liberalism and imperialism in the nineteenth century, gave rise to liberal authoritarianism. This ideology, which underpinned Britain’s civilizing mission, took form in various enabling legal scaffoldings, including the evolution of martial law into emergency regulations, or statutory martial law, as well as the parallel consolidation of military doctrine and law around the issues of force. These reinforcing processes unfolded from the turn of the nineteenth century and continued through the interwar period and into the era of decolonization after World War II.”
Elkins 2022 Caroline Elkins Legacy of Violence: A history of the British empire New York: Knopf 2022
pp. 435-39: “The winter of 1947, the harshest in sixty years, took other tolls. The shortening of days were frigid, January reaching record low temperatures and bringing blizzards and snowdrifts that blocked roads and railways, cutting off dangerously low coal stocks from reaching electric power stations. Energy disruptions left homes unbearably cold and shut down industries, leaving as many as 4 million Britons unemployed. Animals froze in the fields or starved, and vegetables froze in the ground. Television was suspended, radio broadcasts were limited, and newspapers were reduced in size. Minister of Fuel and Power Emanuel Shinwell, having received multiple death threats, was under police guard. Labour’s polling numbers, already eroding, had the party three to four points ahead of the Conservatives; by spring it was an even split. In the midst of the freeze, Shinwell admitted to shockingly low coal stocks, and the government tried to feed its people snoek, an inexpensive South African fish that was so unpalatable, it was eventually ground into cat food. The crisis was not an act of God, but the inactivity of Emmanuel [sic] [Shinwell],” Conservative stalwart Lord Swinton proclaimed. Swinton’s party didn’t need the empire to hammer at Labour’s incompetence, but India and Palestine left the government’s flanks exposed, which Conservatives ruthlessly exploited.
On February 14, 1947, the sun hadn’t shone on Britain for nearly two weeks. Atlee’s cabinet bundled up and trudged through snowdrifts to convene at 10 Downing Street. They had already decided, but not yet announced, Britain’s retreat the Raj by June 1948. But Palestine’s future remained unresolved. …
Foreign Secretary Bevin remained mired in an Arab-Zionist impasse, having convened another set of negotiations in London earlier in the year in the hope of finding some resolution. Bevin was balancing an immensely complicated set of plans and issues, as were the Arabs, Zionists, and with greater intensity and intrigue in the postwar years, the Americans. British statemen agreed that Palestine’s future could not be solved without Truman’s input, the American Zionist lobby was thought too influential, and Britain needed continuing American financial support to recover from the war. …
… In light of Anglo-American friction, it was miraculous that a proposal, called the Morrison-Grady Plan, was agreed on and ready for a series of Arab-Zionist meetings in London during the fall of 1946. … The Americans refused to commit to boots on the ground to enforce the plan and rejected joint trusteeship with Britain. By the end of the negotiations over the Morrison-Grady plan, even Truman was exhausted by the Zionist lobby …
Truman thought, as did Chaim Weizmann, that the plan was a precursor to a Jewish state in Palestine. …
That Bevin thought he could quixotically broker a deal in London against a backdrop of reprisals and counterreprisals in Palestine and the cabinet’s January 1947 green-lighting of full military force to suppress the Zionist insurgency is eyebrow raising. The London conference was a bust, confirming Arab and Zionist entrenched positions and Bevin’s diplomatic paralysis. …
On that frigid February 14 day in Downing Street’s cabinet room, Bevin and Colonial Secretary Creech Jones made the case for going to the United Nations. They advised Attlee and other British ministers that the Arabs and Jews were opposed to UN interference, and if Britain “now announced our firm intention” to do so, “this might bring [the Arabs and Jews] to a more reasonable frame of mind,” according to Bevin. The General Assembly wouldn’t sit for another seven months, so there was plenty of time to let the weight of Britain’s threat take effect. The cabinet had previously considered such a move but dismissed it as “extremely embarrassing.” Bevin assured his fellow ministers that Britain was not legally required to “enforce whatever solution the United Nations might approve.
Conflicted hope raised the cabinet’s despairing mood. Bevin’s recommendation was approved, and on February 18, two days before Attlee announced to Parliament Britain’s timetable for leaving India, Bevin delivered the news about Palestine”
Richards & Pratt 1979 John Richards and Larry Pratt Prairie Capitalism: Power and influence in the new west Toronto: McClelland & Stewart 1979
pp. 78-79: “In 1936 Aberhart appointed Nathan Eldon Tanner to be Minister of … Mines and Minerals … More than any other Alberta politician, including Ernest Manning, Tanner was the real author of the province’s regulatory system for oil and gas. … Tanner put in place most of the complex administrative apparatus … before leaving politics in 1952 to make his fortune in oil and gas, notably as the first president of Trans-Canada Pipelines; today [1979] he is a senior Elder in the Mormon Church hierarchy in Salt Lake City, Utah … It was Tanner who visited England in search of developmental capital and who toured the oil-producing states of the American southwest in the late 1930s to study their methods … Tanner’s department imported officials from the Texas Railroad Commission and other U.S. agencies to supervise the creation of Alberta’s Oil and Gas Conservation Board … Tanner launched a vigorous campaign to stimulate the search for Alberta’s oil and gas.
… The pattern of development established under Nathan Tanner in the first months of Social Credit rule laid the foundations for the growth of the province’s oil industry after Leduc [a decade later].”
Shaffer 1980 Former energy economist with Walter J. Levy and then University of Alberta Professor Edward Shaffer “Class and oil in Alberta” in Petter Nore and Terisa Turner (eds.) Oil and Class Struggle (London: Zed 1980): 252-71
pp. 252-53, 255, 259-60: “Canada is the only industrialized capitalist country which has sufficient oi and other forms of energy to meet its needs. Most of its conventional crude oil, natural gas, tar sands, heavy oils, and a substantial part of its coal are in the Province of Alberta. Alberta today is the”Texas of Canada”, providing the country with the most of its oil requirements.
… Its population of 2 million is approximately the same as Libya’s. In 1977 it produced slightly more than one million barrels of conventional crude oil per day, an amount greater than such countries as Algeria, Mexico, Oman and Qatar. …
… In 1941, when the last census before the discovery of oil was taken, 49 per cent of Alberta’s labour force was still engaged in agriculture. … In contrast, only 20 per cent of the labour force was so engaged in the rest of Canada. … In 1971 … agriculture accounted for only 13 per cent of Alberta’s labour force, but almost one-fifth of the force in the rest of the Prairies.
… Oil, it would seem, has retarded rather than expanded industrialization in Alberta. …
… the Social Credit government, which was in power when Imperial Oil, the Canadian subsidiary of Exxon, found oil in 1947, welcomed both the discovery and its exploitation by American-owned companies. It viewed the development of a foreign-financed oil industry as a means of ending Alberta’s domination by Eastern Canada.
Fortunately for the Socreds, the institutional and political arrangements of Canada enabled them to give active encouragement to the oil companies. …
Despite its free enterprise philosophy, the Socred government chose to retain … Province ownership of mineral rights lying under 81 per cent of its territory … It did so because, among other things, it would be able to set the terms of entry in the oil industry. These terms were more favourable to the large than to the small oil companies. Many of the latter, it should be pointed out, were locally owned. As a result of this policy, the major oil companies now control most of Alberta’s reserves and production. In 1977, for instance, six of the major international oil companies produced almost 50 per cent of Canada’s crude oil and gas liquids.
The entrance of the international oil companies ended the dominance by the Eastern Canadian bourgeoisie. American monopolies replaced Canadian ones as the kingpins of the economy. In addition, the leading role of the oil companies unquestionably hampered the industrialization of the province.
Nowhere in the oil extraction areas of the world have the international oil companies fostered industrialization. There are many reasons for this. First, these companies prefer to build their processing facilities in areas where a market already exists. … The establishment of refineries in the market areas increases the bargaining power of the oil companies vis-à-vis the crude producing areas. … By keeping refineries outside the political jurisdiction of the crude oil areas, the oil companies can effectively cut these areas off from world markets by refusing to refine their oil.
… Another factor is that oil companies do not look with favour at the development of an independent manufacturing base in areas where they have extensive holdings. Such a base challenges the dominant position of these companies. Furthermore, it can generate a militant industrial proletariat, which could undermine ‘political stability’.”
12. I Breen 1993 pp. 280, 270-72, 717-18n91, 276-277, 280-84, 285-87; ERCB 2013 pp. 40-41 (photos); Timoney 2021 pp. 124, 119, 123, 135-36
Breen 1993 David H. Breen Alberta’s Petroleum Industry and the Conservation Board Edmonton: University of Alberta and the Energy Resources Conservation Board 1993
pp. 280, 270-72, 717-18n91, 276-277: “In January 1948, when the government altered its competitive bidding system for crown reserve leasehold to allow bidders to offer a royalty bonus in addition to the formerly required cash bonus … The industry’s worst fears seemed confirmed by the results of the first sale of petroleum rights under the new formula. For the first two 40-acre Leduc parcels, the government accepted the tender of New York investor Renzo Falco, who offered a cash sum of $10,000 plus a royalty bonus of 58.5% over the royalty ordinarily payable [16.67 + 58.5 = 75.17% of production] on crown leases. The second parcel went to Saskatchewan Federated Co-Operatives of Saskatoon for $10,000 and a 50% royalty bonus. …
… In the pre-dawn darkness of March 8, the Atlantic Oil Company’s third well in the Leduc field roared out of control. … a terrific surge of pressure shot a 150-foot gusher of oil, gas and drilling mud up through the drill pipe. … Miniature geysers of mud, oil and gas began to erupt out of hundreds of craters in a wide radius around the drill hole. …
The blowout and its publicity only dramatized the already controversial presence of Frank McMahon’s Atlantic Oil Co. in the Leduc oil play. … In 1947, he learned somehow that one of thew leaseholds in the heart of the discovery area had been obtained from a family where there were competing claims of title. McMahon won the race to the owner who the superior claim, and with a cash offer of $175,000 and 25,000 company shares he snatched from Imperial one of the most promising quarter sections in the discovery township. The manner of McMahon’s arrival on the Leduc oil scene might have coloured the minds of some of the key players who watched Atlantic try to deal with the disaster.
… As owner of 80% of the fields production, Imperial Oil … From the outset, … had monitored control efforts closely at Atlantic No. 3 and had consistently lent whatever material assistance was required. … especially since Premier Manning and his colleagues were contemplating an election call that would have to be announced within a few weeks … Following discussions with Imperial Oil on May 11, the Conservation Board directed wells in the Leduc field to cease production at 8am May 13. When, for obvious reasons, the Atlantic Company was unable to stop production from its No. 3 well, the Conservation Board directed that, by authority granted under section 46 of the Oil and Gas Conservation Act, it was assuming control of Atlantic No. 3. … Only by shutting in the field could Imperial Oil’s pipeline system be made available for clearing the growing lake of oil … an estimated 50 million cubic feet of gas and 10,000 barrels of crude oil daily …
… the Board also announced that it had retained the services of V.J. (Tip) Moroney, Imperial Oil’s western Canadian operations manager, to supervise operations at the well until it was brought under control. … Tip Moroney was a Standard Oil of New Jersey career man, and had been with the company since 1926 …
… In his book, Atlantic No. 3, Aubrey Kerr suggests that the Board was dilatory, that belated and effective action came only after the government, under pressure from Imperial Oil, signalled to the Conservation Board that it was time to take more forceful action. …
… With Moroney directing efforts at Atlantic No. 3, Imperial was seen to be in charge, and public confidence began to lift. … The now muted concern about Atlantic No. 3 came just in time for the Alberta government … With an election called for August 18, Premier Manning and N.E. Tanner were busy enough … without having to address awkward questions about the six-month-old Atlantic No. 3 blowout.
… On September 5, Board Chairman Ian McKinnon arrived for the critical and long-awaited moment. … Moroney’s … men had just started pumping water down the relief well when Atlantic No. 3 caught fire. McKinnon, who had stayed up all night with Moroney at the wellsite, was on hand to witness the huge fireball that engulfed everything at once. From acres of burning oil and gas, flames shot 700 feet in the air. The blaze could be seen from 20 miles away, and soon a pall of black smoke stretched for nearly 100 miles across central Alberta. What caused the fire remains conjecture … On September 10, the fire was quenched, but not before pictures of the inferno had made the front pages of newspapers throughout Europe and North America.”
pp. 280-84: “Warning that such”unrealistic” royalties would deter most substantial outside investors, oilmen began a much more aggressive campaign to win the government to its point of view. In March, after discussions with the industry, the government accepted to the request to set a royalty ceiling that it was bound not to exceed [16.67%]. …
On May 4, the Department of Lands and Mines held its second sale of crown leasehold under the bonus royalty system. … Only four tenders were submitted, all for one parcel. … The industry’s boycott intended to warn Alberta’s Social Credit government … Impressed by the boycott and fearful that US investment might be jeopardized, the government quickly changed course. It was announced that on May 25 the … leases would be reoffered on a straight cash bonus basis.
… The first weeks of May 1948 represent, if not a turning point, at least an important shift in Social Credit’s approach to the petroleum industry. First, the government backed away from the royalty bonus idea; then, a few days later, its Conservation Board moved decisively to deal with the Atlantic No. 3 crisis. … After about May 7 … the government had made its decision to abandon the bonus royalty system …
The first weeks of May also confirmed the theme of the coming provincial election. Social Credit proposed to rally Albertans in the fight against socialism. … In the campaign, the [official opposition] CCF continued its offensive against the Social Credit government’s petroleum policy. CCF leader Elmer Roper … promised Albertans that, if elected, his party would “break the ironclad monopoly position” of Imperial Oil by retaining 50% of oil production for sale by the province. … Social Credit confronted directly, although the emphasis was less on policy than on the more general “evil” of socialism. …
… Albertans proved receptive to the message.”
pp. 285-87: “With the election over, the government and the Conservation Board moved quickly to tidy up the Atlantic No. 3 mess. … A new uncertainty, however, emerged from the background. The critical issue was that of liability. … It was anticipated that the unknown, but presumed, substantial cost of extinguishing the well would be charged against the Atlantic Oil Company and that the company would suffer some kind of penalty for overproduction. It was also presumed that there might be royalty claims from freehold owners of the wellsite, that there would be claims by farmers for surface damage, that operators, forced to restrict production, would seek compensation, and that other operators would bring forward the complex question of damage caused to a common reservoir.
Anxious to deal with matters outside the courtroom, in early October 1948 the Atlantic Oil Company expeditiously submitted to the Conservation Board a memorandum that the company hoped might provide the basis of a negotiated settlement among the involved parties. … Atlantic presented an opening proposal, supported by an assertion of “the absence of any negligence or misconduct” on its part. … Atlantic even went so far as to suggest that there was at least one positive side to the disaster, by pointing out that the experience and information gained would reduce the risk of a future accident. …
… Although the Mercury-Leduc No. 1 blowout of November 15 was brought under control in just four and a half days, it served to remind that decisions made regarding the settlement at Atlantic No. 3 would be recognized as precedents. …
… After some debate, it was concluded that $100,000 would be set aside for each of the two nearest wells … The Conservation Board was directed to retain in the trust fund a sufficient amount to ensure that all the costs that had accrued in bringing the well under control could be paid … including the cost of any investigations or conservation measures that the Board might deem necessary. The arrangement reached at the January 26 meeting was then confirmed and reinforced by a special act of the Alberta Legislature. Assented to on 29 March 1949, the Atlantic Claims Act assured the Conservation Board of whatever additional powers it might need to carry out the terms and the intent of the agreement.…
The Atlantic Claims Act brought to a close what had been a long ordeal of the Alberta government and for Board Chairman Ian McKinnon.”
ERCB 2013 Gordon Jaremko Steward: 75 years of Alberta energy regulation Alberta Energy Resources Conservation Board 2013: 192pp
Timoney 2021 Kevin P. Timoney Hidden Scourge: Exposing the truth about fossil fuel industry spills Montreal: McGill University 2021
pp. 124, 119, 123: “Frank McMahon, who acquired the lease under questionable circumstances, and whose company was responsible for the disaster, became a millionaire as a result of the blowout … Craters bubbled with oil and gas for six months until the blowout caught fire in September 1948. … In the United States, Atlantic No. 3 would be a Superfund Site. In Alberta, it’s a historic site. … Interestingly, the site of the”2005 After” photograph in the regulator history … is not of the wellsite; it’s a photo of an area about 620m northwest of the well site. … Imperial Oil … decided to construct a pipeline through the local cemetery to carry the oil from the blowout. When word got out, a priest accompanied by local farmers armed with shovels, picks, axes, and pitchforks confronted Imperial Oil … Imperial relented and routed the pipeline to avoid the cemetery.”
pp. 135-36: “Shockingly, the two largest releases in Canadian history, both from Alberta, are missing from the regulator’s database (the saline blowout at Peace River Oils #1 and crude oil blowout Atlantic No. 3). … Environmental information and monitoring of abandoned wells are inadequate. The human health and climate changing effects of leakage from [plugged] wells have been underestimated. …
… Viewed as a whole, the regulator’s data misinform on all aspects relevant to the impacts of spills be they spill and recovery volumes, per cent recovery, spill locations, effects on habitat and wildlife, the occurrence of spills in sensitive areas, spill footprints, and the causes of spills. Then there is the information that is simply missing, characterized by thousands of spills with blank data fields, spills of unknown substances, spills by unnamed companies, and spills onto land whose owners are unknown. Then there are the thousands of missing spills and tens of thousands of spills that lie outside the jurisdiction of the regulator.
The regulator’s data have been cobbled together over the years from unverified information supplied by industry. In short, it’s a mess. In a way, it’s worse than having no information because the regulator’s data provide the appearance of monitoring without the substance.
… history teaches us to be vigilant to the danger signs … today in Alberta the danger signs are … spills hidden from view, poor regulatory oversight, failure to gather credible data, and failure or refusal to provide the public with complete and accurate information. A social organization composed of industry, regulators, and politicians united by financial interests excluded the public from participation in protecting their health and their environment. We are repeating those same mistakes today across a broad swath of North America. We have created a vast minefield where millions of people must live with the spectre of contaminated sites and abandoned wells. Meanwhile, those responsible sit safely behind a firewall.”
13. Manning 2011 pp. 10-11; Breen 1993 pp. 440-43 (early gov research), 432-40 (oil glut & US nuclear proposal), 443-56 (‘well before second Abasand fire’ to Suncor); Oil and Gas Resources Conservation Act 1938 s.2(c), p. 1 (petroleum does include bituminous shale); GoA (n.d.); Carrigy 1963; Boyko 2016 pp. 287, 290 (Rockefeller coup against Diefenbaker); Engler 2017 also citing Chomsky 2012 (Pearson as war criminal)
Manning 2011 Preston Manning and Peter McKenzie-Brown Interview transcript Petroleum History Society Oil Sands Oral History Project (21 October 2011): 20pp
pp. 10-11: “[Preston Manning:]Or maybe … before you get on to that, just when you mentioned earlier about the earlier [bitumen] applications. One of the most peculiar ones was that Atlantic Richfield proposal to detonate a nuclear device. That was a little bit different technology than Karl Clark’s hot water process.
… apparently Atlantic Richfield had this proposal to detonate a low grade nuclear device at the base of the oil sands and the theory was that it would melt the sand and create a silicon bubble and the oil would run to the bottom in the middle of the bubble, and then you would drill down through the bubble and take out the oil.
… PMB: Now I had the privilege of talking to your father about this, in around 1986 or ’87 and I asked him about this specifically, and he said that, at one stage, everything had been approved. The Federal Government approved it, the Provincial Government approved it. … The American Atomic Energy Commission had agreed to provide the device, and the thing was basically ready to go. … And when I spoke to your father about it, he specifically said that public attitudes, public opinions had really turned against atomic weaponry. So this was around the period 1960.”
Breen 1993 David H. Breen Alberta’s Petroleum Industry and the Conservation Board Edmonton: University of Alberta and the Energy Resources Conservation Board 1993
pp. 440-43, 432-40, 443-56: “For over 30 years, government-sponsored research had been trying to develop a viable oil-sand separation technology that would permit commercial development of the McMurray oil sands. Known to be one of the world’s two great bitumen deposits … hinterland science on a shoestring budget … estimated [Alberta’s] to contain upwards of 800 billion barrels of oil. …
The first extensive research on McMurray oil-sand reserves and extraction was carried out between 1913 and 1916 by Sidney C. Ells, a geologist with the Mines Branch of the federal Department of the Interior. Ells’s interest in the oil sands was taken up in 1920 by what became the Research Council of Alberta. Supported by council funding, Karl A. Clark began the search for an extraction technology and for uses for bitumen. In 1924, Clark and his associates constructed in north Edmonton Dunvegan railyards the first pilot separation plant to test their laboratory conclusions. A refined version of their hot water separation process was tested at a second plant built in 1929 … near Fort McMurray. The first successful commercial activity in the oil sands began in the late 1920s with R.C. Fitzsimmons and his International Bitumen Company at Bitumount … [in] 1937 … his company collapsed. The second significant commercial extraction attempt, that of Abasand Oils Ltd., began about the time International Bitumen began to fade. … After a series of design adjustments and the building of a small refiner, operation on a regular basis began in May 1941. In November, the separation plant was destroyed by fire, but … This hint of Abasand’s potential, plus the emerging wartime shortage of petroleum products, combined to arouse federal interest, which led to the reconstructing of Abasand Oils as a joint government and privately owned enterprise. Constructed largely with federal money, the rebuilt separation plant and refinery started intermittent trial runs in December 1944. Operations seemed promising, but on 16 June 1945 the plant was razed again. [J.D. Rockefeller Jr’s BFF since 1914, Canadian Prime Minister Mackenzie King’s] Minister of Reconstruction C.D. Howe assessed the situation and concluded that a new plant should not be built at government expense since the wartime emergency was over. In late 1946, what remained of Abasand’s assets, mainly its oil-sand leasehold, were returned to its private shareholders.
This left initiative with the provincial government, and it was not an unwelcome prospect. …
… THE 1957 PRORATION PLAN
The complexity of the task facing the Board was daunting. A need to revise the existing proration plan was clear enough, for the economic allowance was too generous and the attractive pay-out encouraged the drilling of unnecessary wells (in a constant or declining market about the only way to gain market share was to drill a new well that, under the plan, had a guaranteed economic allowable production). …
… By October, the production from many wells was already at or near their economic allowable. … In November, the Board was compelled to cut provincial daily allowable production by a further 20,000 barrels. Oil in Canada’s November 4 headline, “Alberta Hits the Skids,” captured the prevailing mood. …
The emerging consensus in the industry that there was little prospect for relief brought forth an urgent letter from Board Chairman McKinnon to Premier Manning. … most alarming was McKinnon’s report that the US Pacific Northwest and California market, the part of the US market that had been thought most secure, was also vulnerable. The Board chairman disclosed that he had met recently with Walter Levy, the former head of the oil division of the US Marshall Plan and one of the petroleum industry’s most highly regarded consultants, who was in Alberta preparing a market analysis … Levy had pointed out that the US companies, who were the main importers and refiners on the US West Coast, also controlled vast supplies of Middle East crude oil. Levy anticipated that they would begin shipping oil to the West Coast, and thus Canadian crude currently moving into the region could expect stiff competition. Moreover, according to Levy, Alberta producers could not realistically look to the Montreal area as a replacement market, since imported Venezuelan and Middle East crude oil had too much of a price advantage. Still worse, Levy’s analysis indicated that, unless there was an emergency, like the Suez Crisis, the outlook for the next decade was dull. Alberta would not likely be able to market more than 50% of its potential production.
McKinnon suggested that Manning seek a meeting with the federal government to discuss Alberta’s position. …
The nature and speed of Manning’s response is a mark of the province’s concern. … Within a few weeks of receiving the Conservation Board assessment, Premier Manning and Chairman McKinnon were in the capital to discuss the “grave situation of national concern” with Prime Minister John Diefenbaker and Minister of Finance Donald Fleming. Manning … he took the initiative himself to arrange a meeting with senior officials of the major oil companies. …invitations … Advised … a select group of 13 presidents or senior vice presidents of the major oil companies assembled in Toronto, on 19 December 1945 … “the luncheon and discussions will be held in private and no publicity of any kind is intended” … Manning’s purpose was to express at the highest level Alberta’s deep concern about the rapid decline in crude oil production in the hope that he might elicit some kind of remedial response. … Imperial Oil’s view was shared by all … The presidents, in their comments and subsequent letters to the Alberta premier … Imperial recommended that Manning concentrate his efforts, first on pressing for the exemption of Canadian oil form the US import duties, and second on encouraging the growth in the demand for Alberta crude in this important market.
How Manning evaluated … Imperial’s executive vice-president … W.O. Twaits … response is not revealed in his papers. … However the Alberta premier chose to credit Imperial’s advice … Manning also found out that none of the invited companies was prepared to offer any adjustment in either their production or their purchases elsewhere on the continent or in the world to help relieve Alberta’s plight.
Premier Manning was more successful in his attempt to press the federal government to act in the province’s favour. …
On … just the second day of his government’s first parliamentary session, Diefenbaker announced the formation of a royal commission to enquire into and to make recommendations on a broad range of energy matters … the Royal Commission was just organized as the Alberta crude oil market began to collapse and Manning came to seek Ottawa’s assistance. …
As Alberta waited, its situation grew more desperate by the week. By December it was apparent that a major new oilfield had been discovered in the Swan Hills north of Edmonton and that there would soon be dozens of new producing wells to add to those with which the declining market had to be shared. Then, Albertans learned that the Eisenhower administration had dismissed the “strenuous arguments” put forward by Canada’s ambassador …
PROJECT OILSAND
In the midst of this glom, it was not the hoped-for notice of a new market that miraculously appeared, rather it was notice that the miracle of modern science might dramatically increase the province’s oil glut. After gaining tentative approval of the US Congress Atomic Energy Commission, representatives of the Los Angeles-based Richfield Oil Corporation appeared in Edmonton in June 1958 with a proposal to detonate a nuclear device in Alberta’s northern oil sands. Code-named “Project Cauldron,” the scheme … was an “experiment in the peaceful use of nuclear energy as an aid in producing oil from the McMurray oil sands buried too deeply to permit economic extraction of oil by mining methods.” … It was expected that the resulting explosion would create a 230-foot-wide cavity, into which would drain several million cubic feet of oil released by the explosion’s tremendous heat. Also, it was claimed that there would be no radioactive fallout since the explosion would be contained underground. …
Even the province was awash in oil, [the] unusual … vision generated great interest in the Alberta capital. For over 30 years, government-sponsored research had been trying to develop a viable oil-sand separation technology that would permit commercial development of the McMurray oil sands. … But this was hinterland science on a shoestring budget. …
… The Alberta government had already moved, well before the second Abasand fire, to bolster the province’s position in the oil sands with its own government-supported enterprise. In December 1944, it entered into a joint partnership with … the corporate successor of R.C. Fitzsimmons’ International Bitumen. … A board of trustees, composed of cabinet ministers W.A. Fallow and N.E. Tanner, and Lloyd Champion from Oil Sands Ltd., was appointed to supervise the construction and operation of the plant. Designed by Born Engineering of Tulsa, Oklahoma, construction of the plant was completed in September 1947, but not before several transfusions of additional government money. … Full-fledged tests of what was now a government-owned operation were carried on through 1949. … the board of trustees engaged Sidney Blair, formerly one of Karl Clark’s Alberta Research Council assistants, to conduct a thorough evaluation to resolve the critical question of the commercial feasibility of existing oil-sands technology.
Blair’s positive report was completed in December 1950. It concluded that bitumen could be “processed by established methods.” … Blair estimated that the per barrel cost of mining, separation, refining and delivery to the Great Lakes would total $3.10. He cautioned, however, that further testing at the Bitumont plant was required before industry was likely to be convinced. In the interval, he recommended holding a public conference to … alert the scientific community and the petroleum industry to the current state of oil-sands technology. … To lend positive encouragement to oil-sands development, Minister of Mines and Minerals N.E. Tanner took the opportunity afforded by the conference to announce a new and much more attractive bituminous sands lease policy. …
Beyond achieving its immediate purpose of bringing key industry representatives up-to-date on current oil-sands technology and development regulations, the impact of the conference was limited. Partly, this had to do with the release of a second report on the oil sands, which stood as a negative backdrop to the conference proceedings. Prepared by Dr. D.A. Howes for Anglo-Iranian Oil (later British Petroleum), this report concluded that oil production from Alberta’s bituminous oil sands would not be economic and was unlikely to be in the near future. Howe’s estimates of mining, separation and refining costs were much higher … Although the merits of either estimate could be debated, one thing was clear, oil produced from the sands was going to be expensive relative to conventional oil.
… Alberta kept the Bitumont operation going on an experimental basis until 1955, and private interests continued modest test-drilling programs. In late 1954, Oil Sands Ltd. was re-formed as Great Canadian Oil Sands, and the new company acquired Oil Sands’ primary asset, bituminous sands lease No. 14 … Great Canadian also struck an agreement with Abasand Oils Ltd., Canadian Oil Companies Ltd. and Sun oil Company of Philadelphia, thereby acquiring access to bituminous lease No. 4.
Once the corporate reorganization was complete, Great Canadian initiated discussions regarding oil-sands development with the Alberta government. …
In addition to consideration within his own department of Mines and Minerals, Premier Manning took Great Canadian’s proposal to the Conservation Board and to the oil and gas community for consideration. Discussion with the Board followed an earlier consultation regarding the question of the Board’s jurisdiction in the matter of oil-sands recovery. Although the Board had not yet been involved with oil-sands development, it was concluded that the definition of “oil” in the Conservation Act would include oil contained in the oil sands, that recovery by well was covered in the existing regulations, and that, if the oil were produced by other means, the Board had clear authority to establish the regulations necessary to control operations.41 …
41 PAA, Premiers’ Papers, Reel 154, f1630, “Oil Sands (Bituminous Sands)” [no date]. Reference is to ss. 3 (c) and 16 of the Oil and Gas Resources Conservation Act, 1950.
The hostile attitude of the conventional industry to the Great Canadian scheme was conveyed by the Canadian Petroleum Association (CPA), which formed a special committee with instructions to “prepare a vigorous brief protesting the applicant’s submission.” Despite the CPA’s strong objection, Manning pressed ahead … with the passage of the Bituminous Sands Act by the Alberta Legislature in April 1955. … From this point, the government waited in anticipation …
This was the situation when the Richfield Oil Corporation appeared in June 1958. The old dream of oil-sands development was rekindled despite the current oil glut. …
Richfield’s proposal roused [the regulator who] was quick to take the initiative on the province’s behalf. … [Regulator chair] Govier … offered to call together senior civil servants from the relevant departments and agencies to examine the proposal … [though] “there was no reason not to approve the pilot test provided that the Conservation Board … was completely satisfied …”
… Expressing his own feelings, Govier concluded that, with the joint technical committee’s presence to ensure that the proper precautions were taken, there was “nothing to be lost and much to be gained from the proposed test.”
In early 1959, Richfield Oil’s proposal was presented to Premier Manning and his cabinet. … The enthusiastic comment by Dr. John Convey, director of the Mines Branch of the Department of Mines and Technical Surveys, that the atomic blast, if successful, would “at a single stroke double the world’s petroleum reserves” was interpreted by the Calgary Herald to mean that an “Oil-Sands Atom blast” was virtually certain. … Finally, to stem the rampant speculation, the Alberta government called a press conference for February 13. The press conference was carefully organized and hosted by Alberta’s Minister of Economic Affairs A.R. Patrick. …
… Just as the Joint Committee set about preparing its report, the prime minister appointed a new secretary for external affairs. Howard Green was a deeply committed advocate of nuclear disarmament … it was clearly out of the question for Ottawa to give its blessing to Project Oilsands. As this became apparent, the Conservation Board saw little use in preparing a formal report for the Alberta cabinet on a controversial issue, the future of which had been already decided at the federal level. …
The premier’s disappointment might have been eased by the coincidence that, as the hope for Project Oilsand began to ebb, the promise of an earlier oil-sands venture returned. …
… Anticipating the GCOS application, and given that it had already assigned to the Board the special responsibility for evaluating Richfield’s proposed oil-sands project, the government that the 1960 spring session of the Legislature moved to regularize the assessment of oil-sands proposals. A special oil-sands section was added to the Oil and Gas Conservation Act, requiring all applications for experimental work in the oil sands to be heard by the Conservation Board. The last phase in the work that Karl Clark had begun 40 years before and the first round in J. Howard’s last great project began before the Conservation Board in June 1960.
… Intervenors at the hearing, including Cities Service, Richfield and Imperial, were critical of almost every facet of the GCOS proposal. …
The Board’s report was submitted to the Alberta cabinet in November 1960; it offered a mixed assessment … [and] the Board’s overall doubt about the project’s economic feasibility.
… More importantly, the Board’s November report signalled a larger truth regarding the oil sands. The sands existed on the high cost outer margin of world oil. Hence, even more than in the case of conventional Alberta crude oil, the ebb and flow of development would continue to exhibit the erratic pattern that marked the paramount influence of unpredictable outside forces.”
Oil and Gas Resources Conservation Act 1938 An Act for the Conservation of the Oil and Gas Resources of the Province of Alberta 2nd session of 8th Alberta Legislature (assented 22 November 1938): 18pp
s.2(c), p. 1: “‘Petroleum’ … does not include coal or bituminous shales or other stratified deposits from which oil can be extracted by destructive distillation;”
GoA (n.d.) Alberta’s Energy Resources Heritage Alberta Culture and Tourism (no date)
’Project Oilsand’: “The director of the Mines Branch of the Department of Mines and Technical Surveys predicted that a successful blast would”double the world’s petroleum reserves.” Delegates were identified, and committees formed. Tests were undertaken, and data gathered. Reports were written, and assurances about radiation, groundwater contamination and seismic effects were given. Even the project’s name was changed to “Project Oilsand” in an effort to allay public fears. Nonetheless, the proposal was quashed.
Public pressure for an international ban on nuclear testing had been mounting. Both Canada’s prime minister, John Diefenbaker, and his newly appointed federal secretary of state for external affairs, Howard Green, were aligned with this effort. The death knell for Project Oilsand was given in April 1962 when Green announced in a speech to Parliament, “Canada is opposed to nuclear tests. Period.” With that, Project Oilsand was abandoned. Nevertheless, Natland presented the proposal at the Second Athabasca Oil Sands Conference in 1963, and his paper was included in the accompanying publication, Athabasca Oil Sands—The Karl Clark Volume. He was even granted a US patent on the proposed process in 1970. In 1976, the idea was resurrected by Phoenix Canada Oil as “Project Athabaska.” That, too, went nowhere. Operation Plowshare was eventually cancelled in 1977 due to public opposition and lack of Congressional support.”
’The Second Athabasca Oil Sands Conference’: “Karl Clark retired from the University of Alberta in 1954, at the age of sixty-five, but he continued to play a role in the development of the oil sands as a part-time employee of the Research Council of Alberta (RCA) and as a consultant. After 1958 he worked closely with Great Canadian Oil Sands Ltd. to develop their separation process and bring their test plant at Tar Island on stream. He was still active in 1962, and his colleagues at the RCA decided that the most fitting tribute they could pay to the pioneer research work of Dr. K. A. Clark on the 75th anniversary of his birthday [in 1963] would be to present him with a volume of papers, written by fellow scientists, on the subject of the Athabasca Oil Sands.
In due course, a conference was held at the Northern Alberta Jubilee Auditorium in Edmonton in October 1963, with over 430 delegates attending. Twenty papers were presented over the course of two days, covering a wide spectrum of topics, from geology through the excavation, extraction and processing of the oil sands. M. L. Natland of Richfield Oil Corporation of Los Angeles delivered the last and perhaps most controversial presentation of the conference. It was a filmstrip entitled “Project Oilsand.” His narration described his proposal to use a subterranean nuclear explosion to extract bitumen from the oil sands.
Clark was the guest of honour at the conference banquet, where he was presented with a copy of The K.A. Clark Volume: a collection of papers on the Athabasca Oil Sands presented to K.A. Clark on the 75th anniversary of his birthday by his long-time friend and colleague, Sidney Blair.”
Carrigy 1963 M.A. Carrigy (ed.) The K.A. Clark Volume: A collection of papers on the Athabasca oil sands presented to K.A. Clark on the 75th anniversary of his birthday Edmonton: Research Council of Alberta Information Series #45 (October 1963): 248pp
Boyko 2016 John Boyko Cold Fire: Kennedy’s Northern Front Toronto: Alfred A. Knopf 2016
pp. 287, 290: “For their part, journalists and scholars tried to make sense of what had just transpired. Their understanding was coloured by the publication of … Renegade in Power: The Diefenbaker Years … written by Maclean’s magazine columnist Peter C. Newman and published in October 1963. It was based on interviews with politicians, bureaucrats, and other reporters. Rich in anecdotes, rumours, and insider scoops, it was the first Canadian book of its kind and became a runaway bestseller. A vicious and scathing attack on Diefenbaker as a leader and a man, Renegade in Power derided his actions, questioned his motives, and trivialized his accomplishments. Somewhat lost in the flinging mud were the ideas he championed, the Canada he envisioned, and the nationalist option he proposed.
… Diefenbaker was not promoting an end to Canadian internationalism, but a re-evaluation of national self-interest as a determining factor in the pursuit of the country’s priorities. He was not demanding an end to America’s leadership in the Western alliance or continental defence, but the respect accorded a partner. He was not suggesting a withdrawal of American investment from Canada, but greater autonomy in determining the country’s economic future. Flaws in Diefenbaker’s character and leadership are undeniable. … But Diefenbaker’s failings and ultimate failure to convince enough Canadians to share his nationalist vision does not subtract from its legitimacy or value.
… Diefenbaker wanted more for Canada, and he fought Kennedy and Canadians who wanted less.”
Engler 2017 Yves Engler “It’s time to rename the Lester B. Pearson International Airport” Rabble.ca (30 August 2017)
“In the foreword to my book Noam Chomsky argues that Pearson abetted war crimes by having Canadian International Control Commission (ICC) officials deliver U.S. bombing threats to the North Vietnamese leadership in 1964. As prime minister, Pearson also had ICC officials spy on North Vietnam for Washington, approved chemical weapon (Agent Orange, Purple and Blue) testing in Canada, ramped up weapons sales to the U.S. and provided various other forms of support to Washington’s violence in Indochina.
A decade and a half earlier Pearson aggressively promoted Canadian participation in another conflict that left millions dead. He threatened to quit as external minister if Canada failed to deploy ground troops to Korea. Ultimately, 27,000 Canadian troops fought in the 1950–53 UN “police action” that left up to four million dead. At one point the U.S.-led forces only stopped bombing the north of the country when they determined no building over one story was still standing.
Pearson had a hand in many other unjust policies. During the 1947 UN negotiations over the British Mandate of Palestine Pearson disregarded the interests of the indigenous Palestinian population. He also played an important role in the creation of NATO, describing its 1949 formation as the “most important thing I participated in.” In the 1950s he backed CIA coups in Iran and Guatemala as well as the violent suppression of independence struggles in Algeria, Kenya and elsewhere. As Prime Minister in the mid 1960s, Pearson brought nuclear tipped Bomarc missiles to Canada, supported the U.S. invasion of the Dominican Republic and military coup against Ghana’s president Kwame Nkrumah.”
Chomsky 2012 Noam Chomsky “Foreword” to Yves Engler Lester Pearson’s Peacekeeping: The truth may hurt (Halifax: Fernwood & RED 2012)↩︎
14. W Merriam 1945
Merriam 1945 Chief of the Division of Near Eastern Affairs Gordon Merriam “Draft memorandum to President Truman” (early August 1945) annex to “Memorandum by the Under Secretary of State (Acheson) to the Secretary of State” 890.50/10-945 (9 October 1945) in Foreign Relations of the United States: Diplomatic papers, 1945 v8 The Near East and Africa (Washington: USGPO 1969): 45-48
pp. 45, 47: ” In Saudi Arabia, where the oil resources constitute a stupendous source of strategic power, and one of the greatest material prizes in world history, a concession covering this oil is nominally in American control. …
… The British publicly and officially admit that they are no longer able to keep the Middle East in order without our help. We are inclined to believe that a policy of inactivity or “drift” on our part will result in a progressive deterioration of the influence of democratic civilization in the Near East.”
15. Elliot 1958 pp. 455, 458 cited in Vitalis 2020 pp. 47-48; Hantke-Domas 2003(fraud of public interest regulation ‘theory’); Stigler 1971; Posner 1974
Vitalis 2020 Robert Vitalis Oilcraft: The myths of scarcity and security that haunt US energy policy Stanford: Stanford University 2020
pp. 47-48: “Harvard government professor William Yandell Elliot, patron of future Secretary of State Henry Kissinger, among a legion of other defense intellectuals, argued that by sanctioning the nationalization [of the Suez Canal by Egypt in 1956],
liberal circles [had] created the greatest possible threat to … resources vital to large and advanced populations. … If tribal chieftains, like the rulers of Kuwait, Bahrain, Trucial Oman, or the Yemen should claim absolute power over resources on which the whole of the western Europe depends for its industrial life-blook, it is evidently absurd to apply a concept as absolute as that of sovereign right without juridical or moral limit.
… Elliott called for more “good colonialism” and for NATO countries to step in for the United Nations as trustee powers, while selling “colonial peoples” on the idea that the resources of the countries they inhabit are a “trust for the world.””
Elliot 1958 William Y. Elliot “Colonialism: Freedom and responsibility” in Robert Strausz-Hupé and Harry Hazard (eds.) The Idea of Colonialism (New York: Praeger 1958): 445, 458
Hantke-Domas 2003 Michael Hantke-Domas “The public interest theory of regulation: Non-existence or misinterpretation?” European Journal of Law and Economics v15#2 (March 2003): 165-94
pp. 165-66: “Microeconomic literature teaches of the existence of two contending theories of regulation. … the Chicago theory … George Stigler {Stigler 1971,”The theory of economic regulation”} … initiated a new theory … (known as well as the Economic Theory of Regulation). … Richard Posner {Posner 1974, “Theories of economic regulation”}, fellow of the Chicago School, was the first academic to attribute the traditional rationale for regulation at the time to a theory based on the concept of public interest.
… Ensuing authors … none of them has ascribed the formation of the theory to anyone else. All these authors have seen the theory as a normative analysis presented as positive theory. This characterisation of the so-called Public Interest Theory has been the standard account given by microeconomic textbooks.
This paper delves into law, politics, and academic writing to discover the originators, if any, of that theory. … This paper focuses on the Progressive Era and the New Deal years of American history, especially prolific historical periods in regulatory initiatives. Despite both the law and politics supporting regulation in the public interest, none of their claims creates a specific theory of regulation.
After reviewing law, politics, and academic writing, one can conclude that no author has claimed intellectual ascendancy over the so-called Public Interest Theory, nor have they mentioned any author or supporter of it. From this evidence, one can conclude that the Public Interest Theory does not have any known origin; consequently, it does not exist as such. The evidence collected from academic writings shows that scholars identify the Public Interest Theory with the welfare economics conception of market failures (monopoly, public goods, asymmetry of information, and externalities). Despite there being some similarity, the characterisation is not identical because the concept of public interest is apparently absent from the concept of market failure.
The Public Interest Theory has two acceptable concepts. The first, embraced by Stigler (1971) and Posner (1974), explains that regulation seeks the protection and benefit of the public at large. The second, developed by ensuing academics, defines it as a system of ideas, which proposes that when market fails economic regulation should be imposed in order to maximise social welfare.”
p. 169: “… in the time of Allnutt the idea of price regulation could have been extended by analogy to other situations where services were not provided on a basis of ‘reasonableness’ and ‘moderation.’ Thus, Hale’s argument could have been extended from monopolies to any other activity; as public interest was nothing more than society’s stake in its own benefit. Historically, the Common Law and the judiciary have shaped the content of these two concepts.”
pp. 169-70: “Regulation of trade and its implications for property rights in the time of Allnutt was not a topic much discussed by either courts or academics. However, it is possible to derive a criterion to be followed by the court to limit property: (a) there is a government licence; (b) this licence creates a monopoly or grants the privilege to exploit a natural one; (c) the beneficiary of the licence is a private entity; and (d) the economic activity is for the benefit of the public.
Where private property is, by the consent of the owner, invested with a public interest or privilege for the benefit of the public, the owner can no longer deal with it as private property only, but must hold it subject to the rights of the public in the exercise of that public interest or privilege conferred for their benefit (Allnutt, p. 527).
It is interesting to note that if entrepreneurs are granted Parliamentary licences to run businesses affected with public interest, and insofar as they are requesting it, then they are accepting the limitations imposed over the rights granted. Essentially, entrepreneurs are giving up part of their rights (jus privatum) thus enduring limitations to their exercise (by the expedient of jus publicum).
The influence of Allnutt in the way Britain regulates economic activity has not been studied so far.”
p. 170: “Although the bearer of public interest is the whole community, only regulators and judiciary understand what the public interest is. By analogy, the argument of Lord Hale is interpreted here as defining public interest as the interest of society in being served ‘reasonably’ and with ‘moderation.’ On one hand, this is a licensee’s duty, but in addition, it is the duty of the regulator to realise it as far as it is their mandate to achieve society’s interests. On other hand, the judiciary is called to determine what public interest is in case a dispute arises between a company and a regulator. Traditionally, the English judiciary has restrained itself from intervening unless the regulator has exceeded its mandate. This is called ultra vires rule. Clearly, the ultra vires rule imposes an obstacle to review the action of a regulator. Nonetheless, since the middle of the 1980s, British jurisprudence has moved toward the protection of individuals and the control of power, which is a leap forward from the ultra vires rule.”
pp. 171-72: “The [US] Supreme Court gave the first interpretation of public interest. In dealing with the scope of government powers to regulate private economic activity and private property rights the court established that: (a) regulation was a power inherent in government through the principle of sovereignty; (b) the government was allowed to regulate on those activities vested with public interest; (c) and its exercise through police powers was justly limited by the due process of law.
… In 1876, the Supreme Court formulated the first approach. In Munn v. Illinois, the Court decided a case about the unlawful operation of a grain elevator and warehouse because a licence was not taken out to provide the service, and additionally it was charging rates higher than the stated in the Illinois Regulate Public Warehouses and the Warehousing and Inspection of Grain acts of 1871. The Supreme Court accepted regulation on the ground that property rights were not supreme and absolute in the Constitution when the effects of their enjoyment had a public consequence. The individual, in the reasoning of the Court, was granting an interest to the community at large. Hence, and because it was in the public good, the individual had to submit it to the control of the public. …
… A definitive precedent appeared with Nebbia v. New York. This was a case concerning the failure by a grocer to observe a fixed price established by the New York Milk Control Board in 1933. The phrase ‘affected with public interest’ was understood to be equivalent to ‘subject to the exercise of police power’ (p. 533). Justice Roberts elaborated the argument about regulation. He stated that the Supreme Court tradition recognised that government inherently has an unquestionable power to promote general welfare. Thus, the Fourteenth Amendment allowed government regulation for the public welfare, but had to accomplish the end by methods consistent with due process (Killian and Costello, 1996).
[T]he guaranty of due process, as has often been held, demands only that the law shall not be unreasonable, arbitrary, or capricious, and that the means selected shall have a real and substantial relation to the object sought to be attained. It results that a regulation valid for one sort of business, or in given circumstances, may be invalid for another sort, or for the same business under other circumstances, because the reasonableness of each regulation depends upon the relevant facts (Nebbia, p. 525).”
pp. 182-85: “The main problem with Posner’s exposition, independently of the soundness of his criticisms, is that he oddly chose two assumptions from a non-existent theory and developed his criticisms at his own pace. Those assumptions were ill-presented in contrast to the refinement of his counter- arguments.
Articles written after Posner … repeated Posner’s and Stigler’s characterisation of public interest in regulation. They assumed the existence of a ‘theory’ that had some assumptions. Nevertheless, these authors did not mention either the origins of public interest, or its authors, or its premises, or even predictions made by it.
… In 1981, Paul Joskow and Roger Noll reinforced Posner’s assumption of the connection between the idea of market failures and the Public Interest Theory. … Joskow and Noll did not provide empirical evidence or cite any author supporting their conclusion or the Public Interest Theory.
… No reference to any author to whom to adjudicate the Public Interest Theory is given by Viscusi, Vernon, and Harrington Jr. Similarly, the authors do not prove the connection between net welfare gain and the idea of public interest. …
… It is important to note that the market failure element is recurrent in the description given by the authors. Nevertheless, there is no reference to welfare economists at all. The authors reviewed a reformulation of the ‘theory,’ that essentially is a repetition of Posner’s work (1974) and Joskow’s and Noll’s work (1981).
… Aranson’s assumption that public interest is a subdivision of welfare economics is un- supported by any evidence. For example, Aranson does not show how the idea of public interest is linked to the idea of Pareto-optimality. … Aranson’s argument of the connection between welfare economics and public interest is weak. This weakness is extensive in the work of Joskow and Noll (1981) and Viscusi, Vernon, and Harrington (1995) as they earlier adopted the same approach.”
Stigler 1971 George J. Stigler “The theory of regulation” Bell Journal of Economics and Management Science v2#1 (Spring 1971): 3-21
Posner 1974 Richard A. Posner “Theories of economic regulation” Bell Journal of Economics and Management Science v5#2 (Autumn 1974): 335-58↩︎
16. NACLA 1976(Rockefeller banking); Hudson 2021 pp. 321-46 (end of gold standard); CBC Archive 1971(1971 AB election); Black 2013(S&L debacle); The Con 2020(one that got away); Houston Post 10/6/90 + Brewton 1992(mafia links); Prados 2008(Iraq invasion); Herndon 2017(sub-prime predation)
NACLA 1976 “The genesis of Chase: In the beginning there was oil …” NACLA Report on the Americas v10#4 (April 1976): 3-4, 38
p. 3: “After securing a virtual monopoly of the oil industry in the 1870s, John D. Rockefeller Sr. needed a vehicle for investing and managing the enormous profits accumulated by his oil companies. Originally the Standard Oil Co. itself served as a bank and coordinating center for his financial power. Then in the 1890s Rockefeller turned to the City Bank (predecessor of today’s Citibank) to invest his surplus and gain control of corporations in other industries. But he had to contend with other powerful interests in City Bank. Thus, in 1911, he acquired a controlling interest in Equitable Trust Co., a predecessor of today’s Chase Manhattan Bank, to build a center of financial power in which he would have a more dominant voice.
The Rockefellers’ development of their Equitable Trust holding into today’s giant Chase Manhattan Corp., through mergers and acquisitions, provides a clear case study of the growth of finance capital. The 400-fold expansion in assets from $98 million in 1912 to some $42 billion today was accomplished primarily through the conglomeration of over 100 other banks and bank-related companies. The highlights of this monopolization process were the 1930 merger of Equitable Trust and Chase National Bank and the 1955 merger of Chase National with the Bank of Manhattan to form the Chase Manhattan Bank. The 1930 merger alone combined banks which had previously brought together the assets of 42 formerly existing banks.
Once the possibility for mergers among the New York City banks had been virtually exhausted in the early 1960s, Chase and the other major banks began looking for other ways to expand. Outside of foreign expansion (discussed separately in this issue) there are two main avenues of expansion which the bank has followed: diversification of activities and domestic geographic expansion. Chase’s expansion in both areas coincided with a major effort by the nation’s largest banks to circumvent the bank reform legislation of the 1930s. These reforms were enacted to eliminate several of the more glaring abuses of banking power which contributed to the stock market crash of 1929, the subsequent bank collapse, and the Depression.”
p. 3: “One reform embodied in the Banking Act of 1933 (the Glass-Steagall Act) established the principle of the separation of the”suppliers of money” (banks) from the “users of money” (commerce). Banks were barred from holding stock in corporations and were required to give up their securities underwriting and brokerage affiliates. Under intense lobbying by big banks, Congress and federal regulatory authorities in the 1960s handed down a series of regulations and rulings which opened broad new areas for bank expansion. These regulations culminated in the amendments to the Bank Holding Company Act in 1970 and the subsequent Federal Reserve Board rulings interpreting this legislation. In order to take advantage of the new possibilities, most large banks reorganized in the late 1960s to become subsidiaries of one bank holding companies. The holding companies then embarked on acquisitions drives into the field of banking-related financial services.
In 1969 Chase, for example, created the Chase Manhattan Corp., a one bank holding company, which holds all the stock in the bank. The Chase holding company then began acquiring companies, most notably in the following areas: mortgage banking, computer time sharing, and factoring. (“A factoring company purchases accounts receivable from businesses at a discount and undertakes the collection of the accounts.”) The holding company failed in its initial bids to acquire a large consumer finance company and a leasing company, though it intends to pursue similar acquisitions in the future. In addition, the bank has made a major effort to expand its retail banking services to small depositors and borrowers – an expansion from its original emphasis on wholesale, or corporate lending and financial services.”
p. 4: “Chase’s Housing Investment Corp. subsidiary in Florida … gives it a mortgage banking presence in the country’s fastest growing state. The bank-managed Chase Manhattan Mortgage and Realty Trust – though currently a major loser for the bank – lends to real estate projects throughout the country.
… Exactly what form the big US banks’ nationwide expansion and monopolization will take remains to be seen. What is clear is that the major bankers are actively, though quietly, pursuing this goal. The bankers’ expectations were recently capsulized by the financial editor of the San Francisco Chronicle after meeting with William S. Ogden, a Chase executive vice president and a member of its seven man management committee: “… the day may come, he suspects, when there’ll be maybe 50 U.S. banks, not 15,000.” Chase plans to be one of the 50.
Today, 65 years after John D. Rockefeller, Sr. bought into one of Chase’s predecessor banks, the Rockefellers still play a dominant role in the bank. According to the authors of a recent bestseller on the family, The Rockefellers, “… the bank … is increasingly the cornerstone of the family’s financial power and influence.” David Rockefeller is the bank’s chairman and largest single stockholder and when his shares are added to the other Rockefeller family holdings, those of the family’s close allies, and the shares held by Chase’s management-controlled profit-sharing plan, they give the family firm control over the direction of the bank.
A testament to their influence is the fact that David Rockefeller remains as Chairman of the bank despite being widely considered a poor manager and despite the fact that under his six year leadership Chase has suffered significantly in comparison to its chief rival, Citibank. When, in the midst of the bank’s continued poor performance in 1972, David fired Chase president Herbert Patterson, Business Week judged it “… a stunning move by Rockefeller – indeed a brutal one by the standards of big business …” Reflecting the general feeling of the financial community, one Wall Street veteran observed: “Somebody had to take the rap and it wasn’t going to be the guy who owns the bank.””
Hudson 2021 Michael Hudson Super Imperialism: The economic strategy of American empire [1971] updated 3rd edn. Dresden: Institute for the Study of Long-term Economic Trends 2021
pp. 321-46: “Since 1914 the world has been no stranger to the financing of one nation’s war with other nations’ funds. War debts among the Allies of World War I were of this character. There is therefore nothing basically surprising in US military actions in Korea, South Vietnam, Cambodia and Laos having been financed by borrowing from other foreign countries. But there are remarkably novel aspects to this transfer of the costs of US aggression to other peoples. The fundamental difference between the American method of financing its wars by way of other nations’ central banks and the ways in which nations financed their wars in the past lies in the structure of the US-sponsored world monetary system. The United States does not run into debt in the conventional sense of the term. It does not borrow abroad under the kind of contractual conditions that it had imposed upon the Allied Powers in World War I, except in very limited instances. Its military simply spends dollars into the world economy, creating floating dollar-debts that it does everything that it can to avoid paying.
… Politically, Germany would do nothing to oppose the US war in Asia regardless of its cost, a stance assumed also by Britain. France not only opposed the war, on grounds of historical stupidity as much as on the moral issues involved, but actively showed its opposition to it by drawing down the US monetary gold stock. This was a positive act to counter America’s striving for world hegemony. It was in fact the only act of opposition by any Western power. It is hardly too much to say that France effectively thwarted those hegemonic ambitions, and contributed to the transformation of the United States from a dictator of the direction of Europe’s evolution to a beggar at the doors of Europe’s central banks – but an aggressive beggar, to be sure.
… [By 1964] the war in Southeast Asia threatened to reverse the flow of financial power, despite the buildup of long term assets abroad by US private investors. This danger to American hegemony prompted US monetary officials to take the lead in restructuring the world monetary system.
With the world’s gold threatening to return to Europe, the United States saw its financial control dwindling. Gold, American strategists recognized, was indeed power. If US gold were flowing out, the basis of world financial power must be changed in order to maintain US diplomatic and financial control. US monetary strategists therefore attempted to shift the basis of financial power away from gold toward debt, and more specifically away from the creditor-oriented rules of international finance that the United States had voiced at Bretton Woods to the debtor-oriented proposals it had repudiated when they were put forth by Keynes in 1943.
… Financing [the war’s balance-of-payments] deficit proved to be beyond the ability of US exporters and foreign investors to cover, so novel new sources of payment inflows had to be found. … In 1966, Chase Manhattan was asked to set up branches in the Caribbean to attract … hot money. As the bank’s balance-of-payments economist, I was asked to calculate the magnitude of how much might become available if the Unites States became “the new Switzerland” by making itself safe for the hot money of the world’s highly liquid criminal class, kleptocrats and crooked heads of state.
… In 1966 a State Department employee who had joined Chase asked for my opinion of a memorandum outlining the plan for US international banks to establish offshore branches in island enclaves hospital to the world’s hot money …
… the Government invited Chase to attract international flight capital by placing its services at the disposal of the existing and prospective patrons of dictators, drug dealers, criminals and even Cold War adversaries. The inflow became a bonanza in the 1990s as Boris Yeltsin’s kleptocracy and other post-Soviet elites sent their takings abroad.
The world is still suffering from this desperate partial solution to America’s military payments deficit. It is not an unintended consequence, as far as US Cold Warriors and the large international banks were concerned, whose flight-capital havens proved to be highly profitable although globally destructive.
… By the late 1960s the United States was well on the way to making America the leading haven for the world’s flight capital. The major American accounting firms, law firms and investment advisors soon got into the business of advising corporations and wealthy clients how to set up offshore bank accounts in the name of paper companies. Citibank, Chase and others established or expanded operations for their “private banking” subsidiaries offering “confidentiality” to clients ranging from Latin American politicians to Russia’s kleptocrats in the 1990s. Not only would this attract foreign flight money, it would help keep at home the substantial sums that US tax evaders were sending abroad.
But hot-money inflows only partially ameliorated the US balance-of-payments deficit cause by its foreign military spending. …
… Collapse of the Gold Pool gave way to a two-tiered pricing system for gold. … All constraints were thereupon removed from US economic prolificacy, but the world was not yet ready to repudiate the IMF and the rest of the American creations that had grown to represent the world order. …
… Effectively speaking, not only had the United States compelled the other nations of the West to pay for the overseas costs of the US war in Asia, it has accomplished something of far greater significance. Those overseas military costs had become the central banking assets of the non-US members of the IMF. Whatever they might desire, the central banks of Europe had no choice but to continue to accept the paper dollar equivalents annually created as the domestic and overseas deficits of the United States increased. Otherwise the whole shaky structure of the world monetary system would collapse. America had succeeded in forcing other countries to pay for its wars regardless of their choice in the matter. This was something never before accomplished by any nation in history.
… The United States was now [1971] the single largest inter-governmental debtor, reversing its interwar position as the world’s great inter-governmental creditor.
… This reversal nullified the constraints compelling equilibrium implicit in the gold-exchange standard. It became possible for a single nation, the United States, to export its inflation by settling its payments deficit with paper instead of gold. There was no limit to US ability to print paper or create new credit, despite the visible limit to its gold stock. The United States gave notice that it henceforth would act vis-à-vis the world without economic constraints, and the world would have to accommodate itself to this fact and indeed, facilitate it.”
CBC Archive 1971 “Alberta election 1971: Peter Lougheed grabs the torch” CBC Archives (1971): 2min27s
The Con 2020 Eric Vaughan, Patrick Lovell and Adam Bronfman The Con: The truth behind the largest criminal conspiracy in American history (2020): 5pts
Houston Post 10/6/90 Pete Brewton “D.C. bank swept up in intrigue funds Channeled to North account” Houston Post (10 June 1990): A1ff
’Although Palmer National remains solvent and has not been the target of any known criminal investigations, its history provides direct evidence of a connection between organized crime and the intelligence community in the operation of a federally insured financial institution.
Since February, The Houston Post has reported on evidence pointing to a possible link between organized crime and the CIA in the failure of 25 financial institutions, whose demise could eventually cost taxpayers $75 billion.
In the case of Palmer National, The Post has learned that it was listed on a 1985 report by the Comptroller of the Currency as one of 12 national banks under the possible influence or control of Louisiana organized crime associate Herman K. Beebe Sr.
Among The Post’s other findings:
Palmer National lent money to individuals and organizations that were involved in covert aid to the Nicaraguan Contra rebels.
Money was channeled through Palmer National to a Swiss bank account used by White House aide Oliver North to provide military assistance to the Contras.
Palmer National co-founder Stefan Halper helped set up North’s legal defense fund. Halper’s name appears in the final entry of North’s White House journal under the heading, “Legal Defense Fund.”
Palmer National held a $250,000 note on a California beach house that was used by organized crime associates and figured in the criminal convictions of two S&L figures.
… Beebe was the hidden power behind a number of failed Texas savings and loans, including Vernon Savings in Dallas, State Savings of Lubbock and Continental Savings in Houston. Beebe pleaded guilty to fraud involving a loan at State Savings and served 10 months of a one-year sentence in federal prison.
The patrician McLean, son of a wealthy Shreveport oilman and educated at prep school in Lawrenceville, N.J., and Harvard, seemed an unlikely match with Beebe. But “they were tight, real close. They’ve been tight for a long time,” said Joe Cage, U.S. attorney for the Western District of Louisiana.
… Some problems developed with a $1 million loan Beebe’s insurance company, Savings Life, had made on a house in Solana Beach, Calif. This loan involved his associate Don Dixon, who owned Vernon Savings.
Dixon knew that Beebe was getting into legal trouble. So in November 1984, Dixon had the loan transferred from Savings Life to McLean’s Paris Savings, with $250,000 of the balance going to Palmer. In 1986, Paris Savings filed a lawsuit because the loan was in default.
The Solana Beach property gained notoriety because it was used as a party house by a number of S&L executives with ties to Beebe. The house figured into the criminal convictions of Dallas developer Jack D. Atkinson and former Vernon president Patrick G. King.
Atkinson, who borrowed more than $100 million from Vernon, was sentenced to one year in prison for diverting Vernon loan proceeds to rent payments on the house.
And King was convicted of using Vernon money to provide prostitutes who entertained Vernon customers, officers and a state S&L regulator at the Solana Beach house. This was in March 1985 when Palmer had the $250,000 loan participation on the house.
… After Beebe got into legal trouble in late 1984, Dixon and Palmer Bank, and other businessmen and companies, tried to distance themselves from him. But for years before, Beebe had known ties to organized crime. Not only did he have numerous connections to New Orleans Mafia boss Carlos Marcello, he had associations with Mafia families in New York and California.
According to present and former law enforcement officials, private investigators and other published reports, Beebe had a number of connections to Marcello, including mutual interests in nursing homes and Holiday Inns, mutual interests in the Teamsters Union, contact between Beebe and one of Marcello’s personal attorneys, Phillip E. Smith, and loans from Beebe-controlled banks to Marcello and his associates.
U.S. Attorney Cage said he believes Beebe got a lot of his money and power from the Teamsters, which was controlled by Mafia families in the Midwest, but had strong ties to Marcello.
Beebe had a home in the La Costa resort near San Diego, which was built by the mob with Teamsters money. Beebe also did business with one of the former La Costa general partners, Edward “Fast Eddie” Susalla and his son Scott Susalla, who pleaded guilty to possession of cocaine in 1985 in one of the largest drug busts in Southern California history.
In 1976 the Dallas Morning News reported that investigators had uncovered evidence that Bossier Bank & Trust was used as a conduit for profits skimmed out of mob-controlled casinos in Las Vegas. Bossier Bank sued the paper for libel, but later dropped the suit after investigators turned up other ties from Beebe to organized crime.
Former law enforcement officials told The Post that Beebe had been involved in a scheme in the early 1970s to smuggle weapons and explosives to anti-Castro Cubans in Mexico. A South Texas rancher and an associate of the Gambino Mafia family in New York were arrested in the scheme, and some of the explosives were later traced back to a warehouse in Shreveport allegedly owned by Beebe.’
Brewton 1992 Pete Brewton The Mafia, CIA & George Bush: The untold story of America’s greatest financial debacle New York: S.P.I. 1992
cover blurbs: “Corruption, greed and abuse of power in the nation’s highest office; The book that Simon & Schuster signed up but wouldn’t publish!”
Prados 2008 John Prados “PR push for Iraq war preceded intelligence findings” National Security Archive Electronic Briefing Book #254 (22 August 2008)
’The documents suggest that the public relations push for war came before the intelligence analysis, which then conformed to public positions taken by Pentagon and White House officials. For example, a July 2002 draft of the “White Paper” ultimately issued by the CIA in October 2002 actually pre-dated the National Intelligence Estimate that the paper purportedly summarized, but which Congress did not insist on until September 2002.
A similar comparison between a declassified draft and the final version of the British government’s “White Paper” on Iraq weapons of mass destruction adds to evidence that the two nations colluded in the effort to build public support for the invasion of Iraq. Dr. Prados concludes that the new evidence tends to support charges raised by former White House press secretary Scott McClellan and by the Senate Select Committee on Intelligence in its long-delayed June 2008 “Phase II” report on politicization of intelligence.’
Herndon 2017 Thomas Herndon “Liar’s Loans, mortgage fraud, and the Great Recession” University of Massachusetts Amherst Political Economy Research Institute Working Paper #440 (August 2017): 31pp↩︎
17. NYT 18/6/3 + G&M 26/1/8 (175B bbls proven 9/3/3); OSC 2003 pt4.2(1)(a)(iii) + pt5.6, pp. 8-9 (NI 51-101); CNN 17/9/4 (mortgage fraud epidemic); Felkerson 2011(US FRA 13(3))
NYT 18/6/3 Jeff Gerth “Canada builds a large oil estimate on sand” New York Times (18 June 2003): W1ff
’This year’s rankings of oil reserves included a surprise that grabbed the attention of some industry experts: Canada had leaped into second place, increasing its reserves from 5 billion barrels to 180 billion barrels.
… One expert who seized on the Canadian numbers was Daniel Yergin, the author of “The Prize,” a respected history of the oil industry.
Canada’s jump could have had important implications for President Bush’s quest to reduce American dependence on unstable oil suppliers: the 175 billion barrels represent more than 50 years worth of American consumer gasoline consumption.
“Although almost completely overlooked, something very important has just happened,” Dr. Yergin told a Senate committee in April, namely, “a significant decline in the Persian Gulf’s share of total world oil reserves,” the first such decline in 60 years.
… The new Canadian estimate, which was greatly increased by counting so much of the oil sands as reserves for the first time, grew out of a 1999 study by the Alberta Energy and Utilities Board.
Andy Burrowes, a board official, said that estimate was based on “a lot of guesswork.” It will be revised next year after a more rigorous examination.
The number was not adopted by private or governmental rankings until late last year, when the Oil and Gas Journal, at the urging of the Canadian Association of Petroleum Producers, included it in its annual listing of world oil and gas reserves. That, in turn, led the Energy Information Administration, the independent analytical arm of the United States Energy Department, to adopt the figure.
… In “The Prize,” Dr. Yergin pointed out how the lack of “timely, credible, reliable, widely accepted data” was a significant cause of oil price spikes in 1979.
… “I favor more transparency on oil data,” said the Saudi oil minister, Ali al-Naimi, in an interview in Riyadh earlier this year, adding that “we need better data on production and supply.”
But Mr. Naimi demurred when asked whether Saudi Arabia would publish production data field by field, which oil experts say would shed light on how fast Saudi Arabia’s oil reserves, the world’s largest, are being depleted.
“I’m not in favor,” he said. “It allows you to figure out reserves.”
… Marilyn Radler, the journalist responsible for the listing in the Oil and Gas Journal, said she included the 175 billion barrels in oil sands reserves estimate, which originates with the Alberta Energy and Utilities Board, after the Canadian Association of Petroleum Producers endorsed it.
“CAPP presented the figure to me,” Ms. Radler said in an e-mail message, and “CAPP uses this estimate and considers it to accurately represent the volume that is recoverable using current technology and present and anticipated economic conditions.”
Gregory Stringham, CAPP’s vice president, said, “We were pushing for it to be used,” and “Now that it is there, it’s more real.”
Cal Hill, the executive manager of the Alberta energy board’s resources branch, said a new, more authoritative estimate would be completed next year. The 175 billion “likely is in the ball park,” he said, “but it doesn’t meet the strict definition of a reserve.”
Harry Jung, the chairman of the reserves definition committee for the Canadian Institute of Mining, Metallurgy and Petroleum, said that “the Alberta Energy and Utilities Board is talking about resources, not reserves” because “you can’t classify future projects without any immediate plans for development as a reserve.”’
G&M 26/1/8 Erin Anderssen, Shawn McCarthy and Eric Reguly “An empire from a tub of goo: How did the quest to retrieve the treasure hidden beneath huge swaths of northern Alberta go from fool’s errand to monumentous payoff?” Globe and Mail (26 January 2008): F1, F4ff
F1: ‘In five years, Alberta’s oil sands have vaulted from potential boondoggle to economic miracle. The grand scale of the project and the vast sums of money involved have sparked a fundamental shift in the state of the nation.’
pp. F4ff: ’Murray Smith remembers what happened on the morning of April 9, 2003, the way other Canadians remember Paul Henderson’s miracle goal against the Russians. For Mr. Smith, then Alberta’s energy minister, the big score was a letter from his federal counterpart south of the border. It was about the oil sands – a resource that had long been underestimated at home and almost ignored internationally. No more, U.S. energy secretary Spencer Abraham wrote. From now on, when the Americans talked oil, they would be counting the reserves sitting beneath the forests of northern Alberta.
Mr. Smith had grown up among the oil rigs of central Alberta and bought his first share in an oil company when he was 11 by collecting his older brother’s beer bottles. He had also spent much of his adult life in the oil patch and understood more than most the significance of Mr. Abraham’s message. The endorsement from the world’s hungriest oil consumer was like winning an Oscar. Keen to reduce its dependence on the Middle East, the U.S. was officially acknowledging for the first time that the tarry mud around Fort McMurray could be turned into gasoline, diesel and heating fuel at a profit.
The world finally was acknowledging what Albertans had been saying for decades: that their oil sands rival any source of crude on Earth. “If you took all the oil in the south of the United States and all the oil in Alaska and all the oil in Mexico,” Mr. Smith points out, “it doesn’t hold a candle to Alberta.”
With rising prices and prospects of a Mideast war prompting concerns about the security of the U.S. supply, media giants from CBS’s 60 Minutes and The New York Times flocked to the tale of an oil bonanza so close to home. Enthusiasts outnumbered the skeptics and the phrase “second only to Saudi Arabia” went from speculation to conventional wisdom. Alberta had become a bankable star in the global oil game.
… It didn’t hurt that 9/11 and the looming war in the Middle East made the Americans keen to demonstrate that they were not entirely beholden to Mideast crude. Peter Tertzakian, chief energy economist for Calgary’s ARC Financial and author of A Thousand Barrels a Second, says there is “no question” that the new reserve estimate “was a catalyst for comforting the Americans.”
Spencer Abraham, now a political consultant in Washington, agrees – although he insists the decision that led to his 2003 letter to Mr. Smith “was not my call” as energy secretary. Rather, a semi-independent agency within his department crunched the numbers to ensure that politics played no part. “It was a very objectively determined conclusion,” he contends, acknowledging that his vote of confidence in Alberta’s resources “helped send a signal” to investors to take another look at the area.
It also signalled that the world was not running out of oil, Mr. Abraham adds. Even better: “When you have all the geopolitical uncertainties that the world of energy faces, it’s great to have greater sources that are not only nearby, but also part of a country and government with whom the United States feels such closeness and affection.”’
OSC 2003 Ontario Securities Commission National Instrument 51-101: Standards of Disclosure for Oil and Gas Activities Bulletin v26#6615 (26 September 2003): 72pp
pt4.2 ‘Requirements for Disclosed Reserves Data’ pp. 8-9:
”(1) A reporting issuer shall ensure that estimates of reserves or future net revenue contained in a document filed with the securities regulatory authority under this Instrument satisfy the following requirements:
(a) the estimates shall be
(i) prepared or audited by a qualified reserves evaluator or auditor;
(ii) prepared or audited in accordance with the COGE Handbook; and
(iii) estimated assuming that development of each property in respect of which the estimate is made will occur, without regard to the likely availability to the reporting issuer of funding required for that development;
(b) for the purpose of determining whether reserves should be attributed to a particular undrilled property, reasonably estimated future abandonment and reclamation costs related to the property shall be taken into account; and
(c) aggregate future net revenue shall be estimated deducting
(i) reasonably estimated future well abandonment costs; and
(ii) future income tax expenses …”
pt5 ‘Requirements Applicable to All Disclosure’ p. 9:
“5.6 Future Net Revenue Not Fair Value – Disclosure of an estimate of future net revenue, whether calculated without discount or using a discount rate, shall include a statement to the effect that the estimated values disclosed do not represent fair market value.”
CNN 17/9/4 Terry Frieden “FBI warns of mortgage fraud ‘epidemic’” CNN (17 September 2004)
’Rampant fraud in the mortgage industry has increased so sharply that the FBI warned Friday of an “epidemic” of financial crimes which, if not curtailed, could become “the next S&L crisis.”
Assistant FBI Director Chris Swecker said the booming mortgage market, fueled by low interest rates and soaring home values, has attracted unscrupulous professionals and criminal groups whose fraudulent activities could cause multibillion-dollar losses to financial institutions.
“It has the potential to be an epidemic,” said Swecker, who heads the Criminal Division at FBI headquarters in Washington. “We think we can prevent a problem that could have as much impact as the S&L crisis,” he said.’
Felkerson 2011 James Felkerson “$29,000,000,000,000: A detailed look at the Fed’s bailout by funding facility and recipient” Levy Economics Institute Working Paper #698 (December 2011): 36pp↩︎
18. Gitelman 1988 pp. 14-15, 21 (Rockefeller Jr), 137-38, 31n6 (Mackenzie King); Carey 1997 pp. 18, 20-21, 12-13, 18-31 (‘growth of corporate propaganda’)
Gitelman 1988 Howard M. Gitelman Legacy of the Ludlow Massacre: A chapter in American industrial relations Philadelphia: University of Philadelphia 1988
pp. 14-15, 21: “… When Rockefeller [Jr.] appeared before a congressional investigating committee on April 6, 1914, he supported the open shop as the main line of his defense:
The Chairman. And you will do that if it costs all your property and kills all your employees?
Mr. Rockefeller. It is a great principle.
The Chairman. And you would do that rather than recognize the right of men to collective bargaining? Is that what I understand?
Mr. Rockefeller. No sir. Rather than allow outside people to come in and interfere with employees who are thoroughly satisfied with their labor conditions—it was upon a similar principle that the War of the Revolution was carried out. It is a great national issue of the most vital kind.
Rockefeller’s defense of the open shop was as conventional and derivative as most of his views.
… He blindly approved of the actions of the Colorado managers, actions about which he had only their word, because they pursued a course consistent with his father’s opposition to unionization. Had the officers chosen to embrace the United Mine Workers, he might have found it expedient to get rid of them. For all of his talk of the appropriate delegation of authority, he found it harder still to be crossed, especially when his father had taken a stand. … Lacking originality either in his ideas or in his person, his name alone conferred distinction on him.”
pp. 137-38: “On his [post-Ludlow Massacre] visit to the C.F. & I. camp at Morley [Colorado], King was taken underground to witness how coal was mined. … That evening, in the safety and comfort of his hotel room, he reflected on the experience from the perspective of a student of society:
“One could not help feeling as one looked at the huge seams of coal that this wealth of nature was never intended to be privately owned, but was intended in reality for society as a whole. The only defense there can be for private ownership in natural resources is the corruption incident to government ownership and the check which would be placed on development if the possibility of reaping large fortunes did not exist as an inducement for the investment of private savings. Were men honest and actuated by a sense of duty in their personal relations, private ownership in natural resources would not last for a day. It is because men know that human nature is as weak as it is that they feel obliged to penalize themselves by permitting a sort of natural selection in the matter of cupidity and daring to determine who are to be the controllers and possessors of great wealth as against its real owners, the people as a whole.”
{W.L.M.K. Diary, 4/27/15. W.L.M.K. Papers, Series J13, pp. G2539, 566}
So much for John D. Rockefeller, Senior!”
p. 31n6: “The King papers have been reorganized since my use of them.”
Carey 1997 Alex Carey Taking the Risk Out of Democracy: Corporate propaganda versus freedom and liberty Andrew Lohrey (ed.) Urbana: University of Illinois 1997
p. 18: “The twentieth century has been characterized by three developments of great political importance: the growth of democracy, the growth of corporate power, and the growth of corporate propaganda as a means of protecting corporate power against democracy.
There have been two principal aspects to the growth of democracy in this century: the extension of popular franchise (i.e., the right to vote) and the growth of the union movement. … American corporations have met this threat by learning to use propaganda, both inside and outside the corporation, as an effective weapon for managing governments and public opinion.”
pp. 20-21: “By ‘propaganda’ I refer to communications where the form and content is selected with the single-minded purpose of bringing some target audience to adopt attitudes and beliefs chosen in advance by the sponsors of the communications. ‘Propaganda’ so defined is to be contrasted with ‘education’. Here, at least ideally, the purpose is to encourage critical enquiry and to open minds to arguments for and against any particular conclusion but one. Of course, in daily life, mixed or ‘impure’ cases predominate. But when dealing, as in this study, with the work of public relations and propaganda professionals it is usually possible to apply the distinction without difficulty. … it remains, as ever, an axiom of conventional wisdom that the use of propaganda as a means of social and ideological control is distinctive of totalitarian regimes. Yet the most minimal exercise of common sense would suggest a different view: that propaganda is likely to play at least as important a part in democratic societies (where the existing distribution of power and privilege is vulnerable to quite limited changes in popular opinion) as in authoritarian societies (where it is not). It is arguable that the success of business propaganda in persuading us, for so long, that we are free from propaganda is one of the most significant propaganda achievements of the twentieth century.”
pp. 12-13: “Contrary to common assumptions, propaganda plays an important role—and certainly a more covert and sophisticated role—in technologically advanced democratic societies, where the maintenance of the existing power and privileges are vulnerable to popular opinion. … [the first modern analyst of propaganda, democrat Harold Lasswell’s PhD thesis, Propaganda Techniques in World War I justified] ‘democratic propaganda’ … ‘to bamboozle and seduce in the name of the public good. Preserve the majority convention but dictate to the majority! … It is to be expected that governments will rely increasingly upon the professional propagandists for advice and aid. … It is the new dynamic of {a} society … {where} more can be won by illusion than by coercion’ {Lasswell [1927]: 4-5, 34} … Lasswell’s justification … indicates a complacency wholly at variance with democratic values but in tune with the interests of private enterprise.”
pp. 18-31: “Corporate propaganda directed … to the public at large, has two main objectives: to identify free-enterprise system in popular consciousness with every cherished value, and to identify interventionist governments and strong unions (the only agencies capable of checking the complete domination of society by the corporations) with tyranny, oppression and even subversion. The techniques used to achieve these results are variously called ‘public relations’, ‘corporate communications’ and ‘economic education’.
Corporate propaganda directed … to employees of the corporation itself, has the purpose of weakening the links between union members and their unions. … From the beginning of the century large-scale, professionally organized campaigns have been a key feature of the political activities of American business.
The use of these tactics to defend business interests against the mass-based power of popular governments and of the labour movement has had large institutional — hence enduring — consequences for American society. Their long-continued use has brought into being a vast complex of institutions which specialize in propaganda and related social science research. This complex of institutions has been created expressly for the purpose of monitoring public opinion and managing it within ideological confines acceptable to American business.
For fifty years US business, alone in the world, made great progress towards the ideal of a propaganda-managed democracy. Since about 1970 business in other countries has begun to adopt the American model. … This … carries a profound threat to the traditionally egalitarian values … to … democratic institutions and … [the] union movement in particular.
… American business recognized long ago the political potential of the fact that it has a large proportion of the voting public within its own walls, as a captive audience for ‘corporate communications’, on every working day of the year.
… Two limitations should be recognized which affect the argument and evidence of this study. The first concerns the paucity of earlier work in the field on which to build, the second the nature of the evidence available. … Readers will vary in their judgement about how far the evidence produced justifies a firm conclusion that Western societies face a serious threat from business propaganda to the integrity of their democratic systems. However I believe most people will recognize, at least, the profound importance of the questions raised and the urgency of the need for an end to their long neglect.
… Between 1880 and 1920 in the United Kingdom and the United States the franchise was extended from around 10-15 percent of the populace to 40 or 50 percent (Lippman 1955:39-40). Graham Wallas and A.L. Lowell, leading students of democracy in Britain and the United States, warned as early as 1909 of the likely consequences of this development. Popular election, they agreed, ‘may work fairly well as long as those questions are not raised which cause the holders of wealth and power’ to make the full use of their resources. But should they do so, ‘there is so much skill to be bought, and the art of using skill for production of emotion and opinion has so advanced that the whole condition of political contests would be changed for the future’ (Lowell 1926:43).
Four years later, in 1913, a committee of the US Congress was established to investigate the mass dissemination of propaganda by the National Association of Manufacturers (NAM), the leading business organization of the time, for the purpose of influencing legislation by influencing public opinion. The committee appears to have been no little awed by the apparent ambitions of the NAM for meeting the challenge of its interests from popular democracy by controlling public opinion.
… The committee’s report coincided with the beginning of World War I, during which the Allied governments expended unprecedented resources on the development and dissemination of propaganda to heighten patriotism and hatred. Propaganda became a science and a profession. … The campaign produced within six months so intense an anti-German hysteria as to permanently impress American business (and Adolf Hitler, among others) with the potential of large-scale propaganda to control public opinion.
Walter Lippman, the eminent journalist, and Edward Bernays, a nephew of Sigmond Freud, served with [US President Woodrow] Wilson’s propaganda organization. Bernays led the transfer of wartime propaganda skills to business’s peacetime problems of coping with democracy. When the war ended, Bernays (1952:87) later wrote, business ‘realized that the great public could now be harnessed to their cause as it had been harnessed during the war to the national cause, and the same methods could do the job’.
The test of this expectation was not long in coming. When the war ended there was a confrontation between American business and labour. Business was determined to roll back the limited union gains made under wartime conditions. The confrontation culminated in the Great Steel Strike of 1919. The central issue of the strike was, in the words of Samuel Gompers, ‘the right of wage earners … to bargain collectively’ (Murray 1955:149). At the outset public opinion favoured the strikers, who worked an 84-hour week under notoriously bad conditions.
Five days after the strike began the Steel Corporation launched a campaign of full-page advertisements which urged the strikers to return to work, denounced their leaders as ‘trying to establish the red rule of anarchy and bolshevism’ and the strike as ‘un-American’, and even suggested that ‘the Huns had a hand in fomenting the strike’ (Commission of Inquiry 1921: 97, 99). … Historian Robert Murray … (1955: 17) sums up the consequences for the entire American society: ‘the Great Red Scare soon subsided, but not before the forces of reaction … achieved their goal. Civil liberties were left prostrate, the labour movement was badly mauled, the position of capital was greatly enhanced, and complete antipathy towards reform was enthroned.’
Meanwhile in Europe, where a similar progressive period was not cut off by a propaganda assault on public opinion, a different result ensued. …
During the 1920s American intellectuals, reflecting on wartime and postwar experience, believed that democracy had reached a crisis. ‘The manufacture of consent … was supposed to have died out with the appearance of democracy’, Walter Lippman (1932: 248-9) wrote. ‘But it has not died out. It has, in fact, improved enormously in technique … Under the impact of propaganda, it is not longer possible … to believe in the original dogma of democracy’, that is, that it necessarily reflects the popular will in any significant way. Reviewing the experience of World War I, Professor Harold Lasswell, the leading American student of propaganda for the next fifty years, reached similar conclusions. In 1927 he warned that with the decline of the authority of the crown, church and social class, and the rise of egalitarianism generally, propaganda had become the principal method of social control. ‘If the mass will be free of chains of iron’, he concluded mordantly, ‘it must accept chains of silver. If it will not love, honour and obey, it must not expect to escape seduction’ (Lasswell 1971:222).
… Throughout the 1920s, American business had no more problems with democracy or trade unions. However … By 1934 American business, led by the NAM, had oriented itself for a massive campaign to recapture public opinion. ‘Public policies in our democracy are eventually a reflection of public opinion’, the NAM warned its members, so public opinion must be reshaped ‘if we are to avoid disaster’ (Cleveland 1947:232-4). A nationwide assault on public opinion was rapidly co-ordinated. … But while the Depression lasted, even the resources of business and its Red scare tactics could not rapidly prevail. As late as 1938 the NAM’s board of directors, in a curiously Marxist formulation, still found the ‘hazard facing industrialists’ to be ‘the newly realized political power of the masses’. It warned that unless their thinking was directed, ‘we are headed for adversity’ (ibid.:62).
The following year the La Follette Committee, a committee of the US Senate which had been established to investigate violations of the rights of labour, incidentally exposed the extraordinary scale of businesses assault on public opinion. Of the NAM in particular, the committee reported that it
Blanketed the country with a propaganda which in technique has relied upon indirection of meaning, and in presentation of secrecy and deception. Radio speeches, public meetings, news, cartoons, editorials, advertising, motion pictures and many other artifices of propaganda have not, in most instances, disclosed to the public their origin within the Associations. (US Congress 1939: 218)
In the same year Lasswell (1939:357), referring to the ‘tremendous campaign’ that had been conducted by business, concluded that ‘for better or worse’ the future of business ‘is bound up with propaganda’. Meantime public relations techniques for combating unions has also made progress.
Until the passage of the Wagner Act in 1935, which required management to bargain with representatives of labour, unions had few rights, and attempts to organize workers were commonly met with violence and intimidation. After the Wagner Act the industrialists sought, in the words of the La Follette Committee, ‘a new alignment of forces’. That is, they sought, through propaganda and other means, to arouse and organize the public at large ‘to do labour on industry’s behalf what the individual employer himself could no longer do legally’ (Auerbach 1966:136-7). This tactic, it was reported at the time, ‘envisages a public opinion aroused to the point where it will not tolerate the often outrageous use of force by police or vigilantes to break a strike’ (Chapman 1939:43-7).
… The La Follette Committee summed up the propaganda tactics of the NAM in the 1930s as follows:
The leaders of the association resorted to ‘education’ as they had in … 1912-1921 … They asked not what the weakness and abuse of the economic structure had been and how they could be corrected, but instead paid millions to tell the public that nothing was wrong and that grave dangers lurked in the proposed remedies … The association also considered its propaganda material an effective weapon in the fight against labour unions. (cited in Tedlow 1976:42)
… In the 1930s industrial relations were first conducted through campaigns of direct violence and intimidation, with a protective screen of public relations activities. In the final stage, after the war, the emphasis shifted almost wholly to public relations. …
During World War II it was necessary for American business to curb its 1930s campaigns, which sought to arouse public anxiety about the Roosevelt administration carrying the country towards communism or fascism. In the last year of the war, however, American business, and the NAM in particular, geared up, as it had after World War I, to beat back both government intervention and the growing power of unions. Beginning in 1945, the postwar conservative assault on public opinion revived the two dominant themes of the 1930s campaigns: identification of the traditional American free-enterprise system with social harmony, freedom, democracy, the family, the church, and patriotism; and identification of all government regulation of the affairs of business, and all liberals who supported such ‘interference’, with communism and subversion.
The postwar triumph of corporate propaganda
It is impossible, at less than book length, to describe adequately the propaganda onslaught by which, at the cost of the McCarthy period, business first beat back the unions with the Taft-Hartley Act and then secured a shift in conservatism in American politics similar to shift which followed its campaigns of 1912-20. I shall, however, provide an indicative sampling.
… American business’s pre- and postwar assaults on public opinion had a double objective: to turn the public against the Democratic administration of Roosevelt and Truman and their liberal supporters, and to turn it against the growing power of the trade union movement that resulted from the Wagner Act of 1935.”
19. Lenin 1917; Marxist.orgCan the Bolsheviks Retain State Power?; Hudson 2022bn14
Lenin 1917 Vladimir I. Lenin “Can the Bolsheviks retain state power?” Prosveshcheniye [Education] #1-2 (14 October 1917) trans. Yuri Sdobnikov and George Hanna in George Hanna (ed.) Collected Works v26 (Moscow: Progress 1972): 87-136
Marxist.org Can the Bolsheviks Retain State Power?
“Written at Vyborg in late September-October 1 (14), 1917. First published in the magazine Prosveshcheniye (Education) No. 1-2 for October 1917. Prosveshcheniye, a monthly Bolshevik theoretical journal legally published in Petersburg from December 1911 to June 1914. It had a peak circulation of 5,000. It was put out on Lenin’s suggestion, and contained contributions from Vorovsky, Ulyanova-Yelizarova, Krupskaya, Olminsky and others. Gorky edited the belle lettres section. Lenin directed its policy from Paris and then from Cracow and Poronin; he edited some of the articles and kept up a regular correspondence with members of the editorial board. The magazine reported on the working-class struggle at the time of the new revolutionary upsurge; it popularised Bolshevik slogans in the electoral campaign for the Fourth Duma and opposed revisionism and centrism in the parties of the Second International. It had a great part to play in educating forward-looking workers in Russia in the Marxist international spirit. On the eve of the First World War, in June 1914 it was closed down by the tsarist government, and resumed publication in the autumn of 1917, but only one double issue was put out.”
Hudson 2022b Michael Hudson “The destiny of civilization: An interview with Michael Hudson on economic development, rentierism, debt, China” Naked Capitalism (4 November 2022)
n14: “V.I. Lenin, Can the Bolsheviks Retain State Power? (October 1, 1917), available online at https://www.marxists.org/archive/lenin/works/1917/oct/01.htm:”Capitalism has created an accounting apparatus in the shape of the banks, syndicates, postal service, consumers’ societies, and office employees’ unions. Without big banks socialism would be impossible. The big banks are the ‘state apparatus’ which we need to bring about socialism, and which we take ready-made from capitalism; our task here is merely to lop off what capitalistically mutilates this excellent apparatus, to make it even bigger, even more democratic, even more comprehensive. Quantity will be transformed into quality. A single State Bank, the biggest of the big, with branches in every rural district, in every factory, will constitute as much as nine-tenths of the socialist apparatus. This will be country wide book-keeping, country-wide accounting of the production and distribution of goods, this will be, so to speak, something in the nature of the skeleton of socialist society. We can ‘lay hold of’ and ‘set in motion’ this ‘state apparatus’ (which is not fully a state apparatus under capitalism, but which will be so with us, under socialism) at one stroke, by a single decree, because the actual work of book-keeping, control, registering, accounting and counting is performed by employees, the majority of whom themselves lead a proletarian or semi-proletarian existence.””
20. Hudson 2022a; Hudson 2018; Douglas 1937 p. 95 cited in Ascah 1999 p. 53; Byrne 1984 pp. –
Hudson 2022a Michael Hudson The Destiny of Civilization: Finance capitalism, industrial capitalism or socialism Dresden: Institute for the Study of Long-term Economic Trends (ISLET) 2022
Hudson 2018 Michael Hudson … and forgive them their debts: Lending, foreclosure and redemption from Bronze Age finance to the Jubilee year* Desden: Institute for the Study of Long-term Economic Trends (ISLET) 2018
Ascah 1999 Robert L. Ascah Politics and Debt: The Dominion, the banks, and Alberta’s Social Credit Edmonton: University of Alberta 1999
Douglas 1937 Major Clifford H. Douglas The Alberta Experiment: An interim survey London: Eyre & Spottiswood 1937
Byrne 1984 L.D. Byrne “A background picture” in Clifford H. Douglas The Alberta Experiment: An interim survey 2nd edn. (Unley: Veritas 1984): 5-11
“In Canada during the late Twenties and early Thirties Social Credit found support in Alberta more than elsewhere in the country – possibly because of the influence of the American monetary reform ideas which had penetrated from South of the Border. The spearhead of the Alberta adherents were the”Ginger Group” of the United Farmers Members of Parliament. And in Ottawa they had the support of The Ottawa Citizen while in the West The Western Producer provided increasing support for the Douglas idea.
… Single-handed [Aberhart] began to mobilize support for his newfound economic doctrine. Unfortunately, in an effort to simplify Douglas and (as he hoped he was doing) apply his ideas to Alberta conditions, he distorted them both technically and in broad policies.
… The results of Aberhartʼs crusade were crowned with success. In a very few months he had enthusiastic and wide support throughout Alberta.
At first he had no intention of entering the political field. With evidence of the support he had mobilized, he first approached the United Farmersʼ Government. Unable to get any assurances from them that they would take action to introduce Social Credit, he approached both opposition parties. Getting equally evasive answers from these, he took off his gloves to do political battle. In subsequent broadcasts he told his supporters to get ready to enter the political field and enter their own candidates in the forthcoming election. He began organizing in earnest.
The United Farmers Government, deeply concerned by reports of the spectacularly large and enthusiastic meetings Aberhart was getting throughout Alberta, hurriedly invited Douglas – who was then in New Zealand – to visit Alberta on his way back to England. No doubt the United Farmersʼ Cabinet hoped to discredit Aberhart by bringing Douglas to give evidence before the Legislative Assembly because by this time the divergences in Aberhartʼs and Douglasʼs views had become general knowledge. The effect of Douglasʼs visit was to give an impetus to Social Credit support in Alberta – and within a matter of weeks it became all too evident that the U.F.A. Government was in trouble.
Douglas was in Norway at the invitation of the King and the Government when the U.F.A. Cabinet, in a last attempt to stave off political disaster, invited him back to Alberta as their economic advisor. He accepted and during his stay studiously avoided getting involved in Albertan politics. He presented an interim report to the Government, leaving the Province the same day. In the election which followed, not a single U.F.A. member was elected and the party disappeared from the Albertan political scene.
… Aberhart had a smattering of knowledge of the financial analysis and remedial proposals of Social Credit. What he did not understand was that Social Credit is not a plan or scheme of monetary reform, but “the policy of a philosophy” of which the financial proposals are but one means to an end. The result was that in subsequent correspondence with Douglas – a full record of which is to be found in Douglasʼs book The Alberta Experiment – Aberhart found himself at loggerheads with him; they were just not getting through to each other.
To proceed, in his anxiety to get financial aid, Aberhart went to Ottawa to seek their assistance in obtaining a desperately needed loan. In consideration of the loan he sought he agreed to appoint Mr. Robert Magor, darling of the Eastern financial interests, as financial and economic advisor to the Government on the recommendation of the Governor of the Bank of Canada. Mr. Magorʼs sponsors could have but one objective, to discredit Social Credit and bring down the government committed to initiate that policy – on which we on the Social Credit Secretariat in London had been given inside information. After warning Aberhart of this, Douglas resigned as Economic Advisor to the Alberta Government.
The measures adopted at the instigation of Mr. Magor – dismissal of civil servants, a steep increase in income tax, the suspension of bond interest – brought the Government into such odium with the general public, both within and outside Alberta, that it led to a revolt by those members of the Legislative Assembly who realized the Government was pursuing a policy diametrically opposed to Social Credit and that this repudiation of Douglas had led to his resignation. The upshot was that the Cabinet was faced with an impasse within the Government caucus – the pro-Douglas members refusing to vote the money supply to enable the government to carry on. This was referred to as “the insurgency” and led to both sides agreeing to an arrangement under which a board of caucus members acceptable to all was set up to advise the Government on matters of Social Credit policy. Its first act, on which the Caucus insisted, was to send the Chairman to England to invite Douglas to Alberta.
Douglasʼs response to this invitation was that, over the previous two years, the Alberta Government had done just about everything to discredit itself and Social Credit. Before he could agree to get involved again, he would want a first-hand report of the facts. He therefore recommended that the Government invite him, or his nominees, to visit the Province for a preliminary study of the situation. This was accepted by Mr. G. F. Powell, a business efficiency expert from London, and Mr. A. L. Gibson, a Chartered Accountant from Sheffield, were nominated by Douglas for the mission. At the last minute Arthur Gibson was subpoenaed to give evidence in a Crown income tax prosecution. This led to me obtaining five weeksʼ leave of absence from my work to take his place.
Powell preceded me to Alberta. …
… I went back to England with a pressing request by the Alberta Government to take up employment as their economic advisor. In my absence my colleague Powell was arrested on what I am satisfied was a trumped-up charge of defamatory libel. I returned to Alberta to take up my appointment with the Government and shortly afterwards, following a farcical trial before judge without jury, Powell was sentenced to six monthsʼ imprisonment and ordered to be deported. After serving three months, he was released. He died shortly after returning to England from the effects of his experience.
When I first came out, Mr. Aberhart was inclined to treat me with natural suspicion. However, I gradually gained his confidence and we became firm friends. I found him to be a man of complete integrity with deep and sincere religious convictions. He had a boyish, mischievous sense of humor which he combined with an utter fearlessness in clashing head-on with his opponents. From early 1938 until his death in May 1943. I worked closely with Aberhart as advisor and confidant, so I got to know him intimately. …
In 1939 when their Majesties King George and Queen Elizabeth visited Canada, it was due mostly to the devoted and meticulous way in which Aberhart personally organized all the details of the Alberta visit that it was such an outstanding success. …
… in May 1943, William Aberhart died … There was no question who was to succeed him. Ernest Manning had worked with Aberhart in the Prophetic Bible Institute in Calgary during the latterʼs pre-Social Credit days – he campaigned with him during the pre-1935 Social Credit landslide election victory – he had been a member of all Aberhartʼs Cabinets from the time the Party had assumed office – and he was recognized as being his obvious successor. On assuming office Manning, in a broadcast to the people of Alberta, vowed that as long as he and his colleagues had anything to do with the Government of Alberta, they would continue to strive for the furtherance of those policies and objectives associated with Social Credit for which they had fought so vigorously under Aberhart. However in the following year a subtle change of Government policy became apparent. In 1945 I was asked to organize the Department of Economic Affairs and became its first Deputy Minister. The purpose of the Department was supposedly to initiate and recommend to the Cabinet through the Minister policies for their consideration and to coordinate the implementation of these by the respective Departments responsible.
However, for some time the Government had been pursuing policies in conflict with those of Social Credit and this led to a growing deterioration in the attitude of some Cabinet Members toward me – hardly calculated to inspire the degree of mutual confidence desirable in the responsibilities I had to assume. This culminated in the submission by me of a report drawing the Governmentʼs attention to their departure from the policy to which they were committed and in the furtherance of which I was supposed to submit recommendations through to my Minister. The upshot was a demand for my resignation. The Minister of education, who supported my report, was dismissed by the Premier. This action was accompanied by the liquidation of the Social Credit Board. Over the years which followed, the pursuit of Social Credit policy was abandoned. However, with buoyant revenues from oil leases and royalties, the Government concentrated on providing “good government” within the limitations of the established financial and political systems and for all practical purposes was indistinguishable from an orthodox conservative party tinged with socialism. It was bound to be only a question of time before this was generally recognized by the Alberta electorate, and if an acceptable alternative was offered to them, they would reject the Social Credit Government as that Government had rejected Social Credit.
This occurred in the election of September, 1971 – after a nominal Social Credit Government had been in office continuously for 34 years, for over 20 years of which they had studiously avoided furthering Social Credit policy.”
Editor’s note: The Canada Files is the country's only news outlet focused on Canadian foreign policy. We've provided critical investigations & hard-hitting analysis on Canadian foreign policy since 2019, and need your support.
Please consider setting up a monthly or annual donation through Donorbox.
Aidan Jonah is the Editor-in-Chief of The Canada Files, a socialist, anti-imperialist news outlet founded in 2019. Jonah has broken numerous stories, including how the Canadian Armed Forces trained neo-Nazi "journalist" Roman Protasevich while he was with the Azov Battalion, and how a CIA front group (the NED) funded the group (URAP) which drove the "Uyghur genocide" vote in parliament to pass this February. Jonah recently wrote a report for the 48th session of the UN Human Rights Council, held in September 2021.
More Articles
