60 years had passed since the BNA, and this was a different economy. The National Policy dramatically increased prairie populations, and when Depression hit, the prairies, in particular, could not manage social relief, and, along with other provinces, asked for federal aid. Federal politicians believed free markets would rebalance themselves, and refused assistance. Liberal Prime Minister William Lyon Mackenzie King refused to attempt relief, claiming it would endanger the national budget. Conservative Prime Minister Richard Bedford Bennett declared that provinces should reduce wasteful spending. Laissez-faire ideology underpinned the policies of Liberals and Conservatives alike. Provinces became disgruntled, relationships with Ottawa became strained, and so it was that the crisis of capitalism triggered a crisis of federalism. "Here was the proof that the [political economy] built by the businessman and the old party politician was defective. The men who had presided over the construction of a complex modern civilization apparently did not know how to keep it running smoothly." Moralism, intellectualism, and elitism: foundations of the LSR In November 1930, the problems of political economy were the focus of discussion for a group of "radically minded [professors]", organized by the University of Toronto historian Frank Underhill. At the same time in Montreal, the legal scholar F. R. Scott was preparing a book examining the same problems. In August 1931, the two men met and discovered they had developed a similar analysis; instability and depression were born of a capitalistic political economy, and any permanent solution would be born of democratic socialism. Underhill proposed the formation of a research organization, styled after the British Fabians, modified to suit Canada. The organization's ideas would be spread in two ways; directly into the public mind through local associations and literature, and directly into government through an institution of intellectual elites that politicians could requisition to perform research and recommend policy. Scott agreed. Underhill also believed a socialist political party would shortly appear, and that there "should be a group of intellectuals that could provide the new party with a coherent platform." The men returned home, and Underhill established a group in Toronto while Scott did the same in Montreal. These groups shared one important belief; that the objective study of social science yielded an inescapable conclusion: scientific socialism. Theirs was a scholarly disposition, and shared intellectualism aroused an elitist camaraderie. Educational distinction provided the group with a sense they were distinguished from the public