A FIGHT FOR LIFE!
My dear little Demus! you'll find it is true,
He behaves like a wretch and a villain to you . . .
--Aristophanes.
It was characteristic of John Kennedy to keep everlastingly at it. He
was used to hard things to do. In this life some men seem to get
rather more than their share of tacks in the boots and crumbs in bed!
But every time Fate knocked him down he just picked himself up again.
Always he got up and went at it once more--patiently, conscientiously,
smiling. Even Fate cannot beat a man like that and John Kennedy was a
hard fighter in a quiet way who did not know how to quit.
With four younger brothers and an equal number of younger sisters to
crowd up to the home table down there on the farm near Beaverton,
Ontario County, Ontario, it was advisable for the eldest son to work
out as a farm boy. He was thirteen years old when he first hired out
to a farmer for the summer and he was to receive twenty-four dollars
for the season. But the farmer had a hard time that year and at the
end of the summer--
"John," said the poor fellow with ill-concealed embarrassment, "I--I'm
afraid I can't pay you that money. But you know that big flock of
sheep down in the back pasture? Well, tell you what we'll do. Over at
Beaverton I've got an uncle who's a tailor. I can give you a suit of
full cloth of homespun and call it square," and though the boy wanted
the money for fifty things he had to take the homespun suit.
Three or four hobble-de-hoy years of it on the farms of the
neighborhood and young Kennedy literally took to the woods and drove
the rivers in Muskoka and Michigan as a lumberjack till he was a chunk
of whalebone in a red flannel shirt and corked boots and could pull the
whiskers out of a wild-cat! With varying success he fought the battle
of life and learned that many things glitter besides gold and that the
four-leafed clover in this life after all is a square deal between men.
The appeal of E. A. Partridge at the convention of the Manitoba Grain
Growers in 1906 therefore found John Kennedy feeling responsive. He
knew the unjust position in which the farmers were placed; for he was a
farmer himself--up in the Swan River Valley--and he was a delegate from
the Swan River Grain Growers' Association. The idea of forming a
farmers' commission company for handling the farmers' grain sounded
like a very satisfactory solution of a very unsatisfactory state of
affairs and he threw himself whole-heartedly into the campaign to sell
enough stock to obtain a charter.
Up in the newer part of the country, which was his own particular
territory, he found the farmers ready enough to listen; for they had
suffered up there from the evils at which the new movement was aiming.
He found also that the most interested members of his audiences were
men who could least afford to lose any money.
An effort was made to discredit the whole proposition as a political
move of the Conservative Party. Throughout the Swan River district,
the Dauphin district and all the way down to Neepawa the rumor spread
ahead of the meetings; so that the speakers were asked many pertinent
and impertinent questions, J. W. Robson, a Swan River farmer who was at
that time a Conservative Member of the Manitoba Legislature, was giving
his services free as a speaker on behalf of the proposed company; John
Kennedy was known to be a political supporter of J. W. Robson. One and
one make two; two and two sometimes make a fairly large-sized political
rumor. But Mr. Robson was a ready and convincing speaker who was known
to be a farmer first and last and Mr. Kennedy attributes the practical
results obtained as due largely to Mr. Robson's logic and sincerity.
Along in June Kennedy received a telegram from Winnipeg that startled
him. It contained the first intimation that difficulties were arising
at Ottawa to prevent the proposed farmers' company from getting their
charter. Taking the first train, he found on his arrival at Winnipeg
that Francis Graham and W. A. Robinson, the two committeemen who met
him, had not yet notified E. A. Partridge. A wire was despatched at
once to Sintaluta and the Chairman joined them by first train. For two
days the Board wrestled with this unexpected difficulty which
threatened to annihilate the company before it got started.
The application of the Organization Committee for a charter was refused
on the ground that the shares of a company with a capital of $250,000
could not be less than $100 each. Their solicitor tried in vain to
induce the Department to change its views, all canvassing to sell stock
being discontinued by the Committee in the meantime.
"Well, let 'em keep their charter if they want to," said Kennedy
finally. "This discussion's not getting us anywhere and if we can't
get a Dominion charter, why we can't get it."
"Guess you're right, John. We might as well quit and go on home."
"Who said anything about quitting?" Kennedy brought down his big fist
on the table with a thump. "We'll get a Manitoba charter. That's what
I mean."
The others shook their heads. A Provincial charter would be useless
for what they were proposing to do, they contended. Kennedy disagreed
so emphatically that he refused to stop arguing about it till at last
he and John Spencer were delegated to see the Manitoba authorities. In
the course of a few days the arrangements for a Provincial charter were
complete, and the Committee turned its attention to selling enough
stock to be ready for business by the middle of the following month.
By this time the harvest season was so near at hand that prompt action
was necessary if they were to do any business that fall. Under the
Manitoba charter the company could open for business with a provisional
directorate and as five members of the original committee were in
Winnipeg and available for quick action, it was decided to go ahead as
it would be impossible to hold a representative general meeting of the
shareholders before harvest and it was advisable in the interests of
the subscribers to take advantage of the opportunity to do business in
the meantime.
Provisional organization therefore was undertaken during the week of
the Winnipeg Industrial Exhibition, in a tent on the Fair grounds, and
July 26th was set as the date. When space was sought for the erection
of their sixteen-foot tent, however, they found themselves classed with
the "Sunflower Belles" and "Katzenjammer Castle" and it was only after
the payment of fifty dollars that permission was granted for the
erection of the tent. Here to the accompaniment of a raucous medley of
sounds--the beating of tom-toms, the ballyhooing of the sideshows, the
racket of the machinery exhibits and the cries of the peanut and
lemonade vendors--the farmers' trading company was organized with
provisional officers[1] and directorate in legal shape to start the
wheels in motion as a joint stock company.
But before actual business could begin a manager must be located who
knew all the ins and outs and ups and downs of the grain business; also
a seat upon the Winnipeg Grain Exchange must be purchased before the
farmers could enter the arena as dealers in grain. None of the
officers of the young company which was about to try its wings
overlooked the fact that nothing could be more foolhardy than for
farmers like themselves, direct from the green pastures, to attempt the
plunge they were about to take without proper guidance as to the depth
of the water and the set of the currents. They knew they were
embarking in a most intricate and difficult business and with so much
at stake on behalf of the whole farming population of Western Canada it
was necessary to place the helm in the hands of somebody who could
pilot them through the shoals. At best it promised to be a stormy
passage.
About the only man in sight for the position was Thomas Coulter, of the
Independent Grain Company. He had treated E. A. Partridge with more
consideration as the "Farmers' Representative" than most of the other
grain men and there was a possibility that he might be persuaded to
take the offer seriously. But on approaching him, Mr. Coulter did not
become excited over the prospect of managing a farmers' company in the
grain business; even he was not inclined to take too seriously the
effort of the farmers to do their own trading. How long would the
farmers stand behind the company in the face of the competition that
would be brought to bear? That was the question that bulged right out
in front; for, as everybody knew, farmers never had been able to hang
together very long when it came down to a matter of dollars and cents
in their individual pockets. Finally, however, he agreed that there
might be a fighting chance and accepted the management.
So far so good. But what about the seat on the Grain Exchange? The
price of it was $2,500. One thousand shares of the company's stock had
been disposed of with ten per cent. paid up and from the $2,500 thus
realized the expenses of organization had to be met, the charter paid
for, the legal fee and expenses at Ottawa in connection with the effort
to secure a Dominion charter, office rent, printing bills and what not.
"Which leaves us about $1,000 to buy a $2,500 seat and finance our
first business operations," said John Spencer with the look of a
worried Secretary-Treasurer.
"We'll have to issue a twenty per cent. call on subscribed stock,"
admitted the President reluctantly. "In the meantime I'll have to see
if some of the boys out at Sintaluta will go security for the fifteen
hundred. Thank heaven, these fellows down here think we're a hilarious
joke! The only chance we've got to get through the fence with this
thing is for them to keep right on laughing at us till we get our toes
in the sand!"
He wrote to Sintaluta, explaining the situation, and five of E. A.
Partridge's friends[2] at once responded by going to the bank with
their personal notes for the amount needed.
"With support like that we're going to win, boys," cried the President
proudly when the bank notified them that the money was available.
Financial arrangements were established with the Bank of British North
America and when a room had been rented on the top floor of the old
Tribune building and circulars sent broadcast among the farmers,
soliciting grain, the wheels began to turn.
The little office was opened for business on September 5th (1906). It
was so small that even two or three people got in each other's way,
though all they were doing was to watch the mails anxiously for the
first indications as to whether the farmers would stand behind the big
idea that was now put to the test. Then came the bill of lading for
the first carload of grain consigned to the new company, followed
quickly by the second, the third, fourth, fifth, sixth--two at a time,
three, ten, fifteen per day! Every foot of space in the little office
was a busy spot and the lone typewriter clickety-clacked on the
second-hand table with cheerful disregard of lunch hours. By the end
of the month the weekly receipts had risen to one hundred cars of grain.
It became necessary to move to a larger office and accommodation was
obtained in the Henderson Block. At the present rate, a whole floor
would be needed soon.
Over at the Grain Exchange some men were talking seriously. They were
talking about E. A. Partridge and they were not laughing. The
Secretary of the Exchange was instructed to write a letter.
Partridge hit the desk so hard that the paper-knife with which he had
sliced open that letter hopped to the floor.
"They're after us already!" he exploded.
It looked that way. The Company's seat on the Grain Exchange was held
in the name of the President and the letter summoned him to appear
before the Council of the Exchange to answer to a charge of having
sinned against the honor and "diginity" of that institution and of
violating its rules. A short time before the young company had issued
a circular setting forth their intention of dividing co-operatively
whatever profits were earned; in other words, the man sending the
larger amount of grain would receive the larger profits. This, the
Exchange claimed, was a violation of the strict rules of the Grain
Exchange and would have to be abandoned.
"You are virtually splitting the commission with the shipper," claimed
the Exchange, "and we can't allow that for a minute."
"It's up to you to prove I'm guilty, not up to me to come here and
commit myself," argued Partridge. "If you can find any profits that
have been distributed co-operatively by the Grain Growers' Grain
Company, go ahead. Nor have I sinned against your 'diginity'!" he
added, sarcastically taking advantage of the stenographer's error in
spelling. "For that matter, you've been digging into me ever since I
came on here!"
"You can't do any more business with our members till you change your
ways," declared the Exchange and forthwith, on October 25th, notice was
posted to all Exchange members that any of them found dealing with the
farmers' company would be penalized themselves.
Expelled from trading privileges! Practically boycotted! It was a
straight punch on the nose that threatened to put the young
organization out of business for the final count. Membership in the
Exchange was absolutely imperative if the farmers were to be in a
position to sell grain to exporters; they were not strong enough yet to
export direct to Old Country markets and all the exporters through whom
they were compelled to deal were members of the Exchange.
"The whole thing's just a pretext!" cried Partridge vehemently. "We
haven't got any by-law regarding distribution of profits
co-operatively; the only thing they've got to go on is that circular.
They're beginning to get scared of us and they see a chance to put us
out of business."
If this were the object, it looked as if it might be achieved in short
order. The grain was pouring in steadily by the carload and with no
buyer daring to deal with them in face of the mandate from the
Exchange, of which they were all members, the new company was in a
quandary to dispose of the incoming grain on a falling market. The
only thing they could do was to wait until they had sufficient of any
grade to make a shipment of from 8,000 to 10,000 bushels of that grade
and try to place it somewhere in the East. The Manager was sent east
hurriedly to see what connections he could establish while his office
assistant mailed letter after letter to eastern points in an endeavor
to work several contracts.
The farmers who shipped their grain to the new company were expecting
to receive seventy-five per cent. of an advance from the bank on their
bills of lading and a prompt remittance of the balance when the
Inspection Certificate and Outturn were in the hands of the Company.
With the grain piling up on their company day by day, it was not long
before the overdraft at the bank began to assume alarming proportions.
Luckily the Assistant Manager succeeded in making several sales in the
East, which eased away from the crisis which was shaping. It was quite
patent that it would have been suicide for the young trading
organization to notify the farmers to stop sending in business. They
dare not do that.
In desperation the President and Vice-President went to the Manitoba
Government and laid their case in full before the cabinet. Premier R.
P. Roblin (now Sir Rodmond Roblin) was very much surprised to learn the
facts.
"The Government certainly cannot countenance any such action on the
part of the grain dealers," he declared emphatically. "We cannot allow
them to boycott a company composed of farmers who have as much right to
sell grain as any other body of men."
Accordingly the Government set a time limit within which the Exchange
had the option of removing the ban against the farmers' company or of
losing their Provincial charter. In the meantime, however, this did
not obtain restoration of trading privileges, without which the
farmers' company could not do business with Exchange members except by
paying them the full commission of one cent per bushel.
The situation, therefore, was approaching a crisis rapidly. The
company was fortunate in having the friendship of their local bank
manager; but even he could not go on forever making advances on
consigned grain and there was some suspicion that letters were reaching
the head office of the bank in Montreal, advising that the quicker this
particular account was closed out the better off the bank would be.
Then one morning the local manager called on the Executive and his face
was grave.
"This is not the first time I've heard from the Head Office about this
account, as you know," he began at once, "but I'm afraid it's the last
call, gentlemen." He handed a letter to the President. "As you see, I
am instructed to close out your account at once unless further security
is forthcoming. I'm sorry; for I believe you've merely run into hard
luck in getting squared away. But--I'm not the bank, you understand."
"What do you want us to do? What can we do?" asked Partridge
anxiously. "This thing will straighten out, Mr. Machaffie. We're
getting the business. You know that. We're going to get back our
trading privileges and everything will be alright."
The banker shook his head slowly.
"I'm sorry, gentlemen. But do you know what your overdraft amounts to
now?"
"Three hundred and fifty-six thousand dollars," murmured the
Secretary-Treasurer.
"Exactly."
"What are we to do?"
"Before coming here I've been to see the Scottish Co-Operative
Wholesale Society about taking some of your wheat. Fisher is ready to
help you out if he finds he's not overstepping the rules of the
Exchange. I may be able to carry you along for a short time if you
three gentlemen, the Executive of your company, will give the bank your
personal bond without limit as to the amount. I have even gone so far
as to draw up the document for signature, if it meets with your
approval."
"What about that, Kennedy? Spencer?"
"Guess we've got to do it," nodded Kennedy.
"Looks like it," agreed Spencer.
"Then--down she goes!" decided Partridge, dipping his pen in the ink.
The others signed after him.
"That means we three go down with the ship," he remarked quietly after
the door had closed upon the bank manager. "I appreciate you two
fellows signing that thing." He got up and shook hands with each of
them in turn. "If bad gets worse and we go to smash----"
"It can't get worse and we're not going to smash," reassured the others.
But that remained to be seen. Although placing grain in the East was
robbing them of profits, it was the best that could be done to tide
things over. The three active officials were on the anxious seat from
morning till night. It had got down now to a question of meeting each
day's events as they came and frequently the lights blazed in the
little office till two and three in the morning while the provisional
officers raked the situation from every angle in an endeavor to
forecast the next day's difficulties and to prepare for them.
For three months the overdraft at the bank had averaged $275,000, due
almost entirely to the conditions resulting from the action of the
Exchange. It was useless to worry over the amount of interest which
this accommodation was costing and the profits which might have been
rolled up had things been different; the real worry was to keep going
at any cost. For, as the bank manager had intimated, the whole thing
was just hard luck rather than any unsoundness in the business. It was
a fine paradox that the more pronounced the success of the idea itself
became, the greater grew the danger of complete failure because of the
predicament! Death by wheat! An ironical fate indeed for a grain
company!
Upon investigation, the farmers' company discovered that their original
idea of distributing their profits co-operatively--as embodied in the
circular to which the Exchange had objected--was contrary to the
provisions of the Manitoba Joint Stock Companies' Act under which they
held their charter. Therefore the co-operative idea in connection with
profits was formally dropped by the Grain Growers' Grain Company. This
had been done at a directors' meeting on December 22nd (1906), when a
resolution had been passed, cancelling the proposal contained in the
objectionable circular.[3] But although the Exchange had been notified
immediately and repeated applications for reinstatement had been made,
the farmers' company was still struggling along in the throes of their
dilemma--proof positive, concluded the farmers, that the Grain Exchange
had used the co-operative suggestion as a mere pretext to oust the
Company from the field altogether.
In piled the wheat, car after car of it! A considerable portion of it
had been bought on track and farmers who had consigned their grain were
anxious, naturally, to have it disposed of without delay. With prices
going down and navigation on the point of closing, the best hopes of
the management became centred in getting a big shipment away to Buffalo
by boat. That would enable them to escape a big item in storage
charges and to place the grain in line for export at rates considerably
below the all-rail figures.
"With those bills of lading in the bank, we've no control of them and
the bank can do just about as it likes," reviewed the President one
night. "If they should come down on us to sell our wheat inside of
forty-eight hours--we're goners, boys! All that those fellows over at
the Exchange have got to do is to shove down the market thirty points
and our name is _mud_! The loss to the farmers who've shipped us their
grain will kill this movement and every one like it in the West for all
time to come. This company will be as dead as a doornail and so will
we financially as its bonded backers."
Kennedy was running a finger tentatively down the window-pane. It left
a streak in the forming frost.
"What I want to know is, how long ought it to take to load up this
whole boatload we're trying to move?"
"Oh, about seventeen hours or so."
"And how long have they been at it already? Five days, ain't it? And
she's not away yet! What d'you suppose that means?" he snapped. He
began to throw things into a grip. He made for the door.
"Where'n the mischief are you going, John?"
"Fort William--can just make the train if I hustle. The _J. P. Walsh_
gets out of that harbor with that wheat of ours, by Hickory!--if she
has to be chopped out with an axe!"
Two days later a telegram reached the little office:
_S.S. J. P. Walsh_ cleared to-day for Buffalo. Three hundred and ten
thousand bushels. Last boat out. KENNEDY.
[1] See Appendix--Par. 7.
[2] See Appendix--Par. 8.
[3] This resolution was confirmed at a meeting of the shareholders,
February 5th, 1907.