THE SHOWDOWN
It's scarcely in a body's power
Tae keep at times frae being sour
Tae see how things are shared.
--_Robert Burns_.
A fight was on between the elevator interests and the commission
merchants of the Winnipeg Grain Exchange--a fight for existence. For,
with the Commission Rule of the Exchange eliminated, those firms which
handled grain on a straight commission basis would be forced to meet
the competition of the elevator buyers and the chances were they would
be forced to handle grain at a loss; the best they could hope for would
be to cover their costs.
It will be remembered that this Commission Rule, established in 1899,
was that a charge of one cent commission per bushel should be made for
handling grain and that all members of the Exchange dealing in grain
must show that the price paid was the price at the terminal (Fort
William) less the freight and one cent per bushel commission. This
commission could be neither more nor less than one cent; for at that
time it was felt that business could not be done, offices maintained
and an efficient and reliable service given for less. It was a charge
which both farmers and grain men considered fair and reasonable.
The trouble in the Exchange started when the commission men claimed the
right to have country agents and to pay them on a commission basis of
one-quarter cent per bushel. The elevator companies were able to buy
at elevator points through their salaried representatives but the
commission men were prohibited from having country agents except on a
salary basis, and this they could not afford, handling grain on
commission.
For some years past there had been considerable dissatisfaction among
Exchange members in regard to the operation of the Commission rule,
doubt being entertained that all the members were keeping good faith in
the collection of the full commission charge of one cent to non-members
of the Exchange and one-half cent per bushel to members on country
consigned and purchased grain. Although the Council of the Exchange
had held many special meetings in an endeavor to find a remedy and to
investigate the charges, the results had not been very marked owing to
the difficulty of securing the evidence to support such charges.
This was given as a reason for the doing away with the one cent
commission restriction altogether for a trial period of one year.
Thereby the trade was put on a "free for all" basis, as the President
of the Exchange then in office pointed out. It meant that Exchange
members were "enabled to pay owners of grain in the country any price
they desired without regard to actual market values as regularly
established on the floor of the Exchange." It was the personal opinion
of the President that to preserve stable markets with uniformity and
discipline amongst Exchange members a commission rule was absolutely
necessary and he predicted that perhaps in a short while, after the
suspension of the Commission Rule had been given a fair trial, the
Exchange might see its way clear to rescind the suspension.
"Just so," nodded the commission men among themselves. "The logical
and certain result will be the weeding out of the commission men and
track buyers, who give practically the only element of competition that
exists in the trade! One of the curses of our Canadian commercialism
is the strong tendency to monopoly and this looks like an effort to
create an absolute elevator monopoly of the grain trade, which is the
staple industry of the country."
But if the small dealers on the Exchange were aroused, what about the
farmers' trading company? They did business on a commission basis only
and with the elevators offering to handle the farmers' grain for
nothing, or next door to it, what would happen? Would the farmer be
"unable to see past his nose," as was predicted? Would he forget the
conditions of the early days and grab for a present saving of five or
ten dollars per car? If the farmers did not stand together now, they
were licked! It was a showdown.
There was only one thing to do--take a referendum of the shareholders
as to the basis on which they wished the year's business handled. The
Board of Control of the Grain Growers' Grain Company therefore issued
the following circular letter, which was mailed to every farmer
shareholder:
"This matter we now bring to your notice is the most important yet.
"At a meeting of the Grain Exchange, held a few days ago, the
Commission Rule was suspended for a year. This means that there is no
fixed charge for handling grain, and any company or firm can, if they
wish, handle car lots for nothing. How did this come about? The
Elevator Companies did it with the aid of Bank Managers and other
Winnipeg men outside of the Grain Trade, who hold seats on the
Exchange, and voted with them. The intention of these Elevator
Companies is to handle all grain for 1/2c. per bushel or for nothing in
order to take it away from the Commission Men, who have no elevators,
and especially to keep it away from the Grain Growers' Grain Company.
"The Elevator Companies can handle farmers' cars for nothing and still
not lose anything. How? In four ways--
"1st. They all buy street grain and the immense profits they make on
this will make up for any loss they have in handling cars for nothing.
"2nd. The dockage they get on street grain and on car lots passed
through their elevators helps them.
"3rd. The charges on the cars loaded through their elevators helps
them.
"4th. When they get your car it is sent to their own terminal
elevator, and they earn the storage on it there which is very
profitable.
"The commission man, such as ourselves, has none of these things to
fall back on. His profit is what is left out of the cent a bushel
commission after all expenses such as rent, taxes, insurance, wages for
office help, telegrams, telephone, etc., are paid.
"The Elevator Combine know this. They know the weakness of the
commission dealers' position and the strength of their own, and knowing
it, deliberately cut out the commission and will offer to handle the
farmers' grain for nothing in order to put the only opposition they
have out of business. And mark you! this is aimed at our company more
than any other, though we believe they are after all commission
dealers. Some of them have said so. They want to kill us and they
think they have at last found a way. Their dodge is simple. By
handling cars for half a cent or nothing, they are going to bribe the
farmers and our own shareholders to send cars away from us, and by
keeping grain from us help to kill us and plant us that deep we shall
never come up again.
"In this way they hope to 'rule the roost' and get back the good old
days they had ten or twelve years ago.
"Can they succeed? It depends on the men who ship the grain. If they
support the combine by giving the elevators (or the commission houses
that work for the elevators under a different name) their cars, they
may soon expect to find themselves in a worse position than they have
ever been before.
"As a prominent commission man said the other day, 'The elevator
companies are asking the farmers to help at their own funeral.' It is
an anxious time for our own company. We have shown that with anything
like fair play it may succeed. We have been growing stronger and, we
believe, doing some good. Are our shareholders and friends going to
take the bribe that is meant to put us out of business? We hope and
believe not. For this reason we are taking a referendum vote of our
shareholders."
It was at this crisis that the _Grain Growers' Guide_ had an
opportunity of demonstrating its value to the farmers as a fighting
weapon. It seized the cudgels and waded right into the thick of the
controversy without fear or favor. It came out flat-footed in its
charges against the elevator interests and emphasized the warning of
the Company in language that carried no double meaning.
"We have no quarrel with the Winnipeg Grain Exchange as an Exchange,"
said the _Guide_. "It is a convenience for gathering reports from
other parts of the world, market conditions, and for drafting rules
that facilitate and simplify business dealings.
"As we have often pointed out, however, the Exchange is being used by
the Elevator Interests that seem to dominate it, to further their own
particular ends with the result that the nefarious methods of the
Elevator Trust bring suspicion and condemnation upon the Exchange and
its members.
"The demand for the Royal Grain Commission arose from the methods
pursued by the Elevator Companies in dealing with the farmers at
country points. The pooling of receipts at country points is not
forgotten by the farmers; heavy dockage and unfair grading and low
prices paid when the farmers were compelled to sell and could not help
themselves, are also not forgotten.
"Every injustice and disturbance in the trade that has taken place
since grain commenced to be marketed in Manitoba, can be traced to the
Elevator Monopoly.
"The farmers of this country owe nothing to the Elevator Trust and we
have confidence enough in them to believe that they will not be bought
over by them now. The Commission Men and Track Buyers certainly owe
nothing to this trust either. They have helped in the past to carry
the suspicion and sin arising from its methods and it commences to look
as if they were getting tired of carrying the load."
Column after column of such plain talk was given place in the _Guide_
week after week, together with reports of Grain Exchange proceedings,
interviews with commission men and elevator men, pronouncements of
Grain Exchange officials and comment upon pamphlets circulated amongst
the farmers by the North-West Grain Dealers' Association, etc.
Everything having a bearing upon the situation was brought to light and
analyzed. Letters from farmers throughout the country were published
as fast as they reached the editor's desk, and they were coming pretty
fast, about as fast as the mail could bring them.
They were reaching the office of the farmers' trading company by the
bagful. The Company had asked three definite questions of the farmers
in connection with the commission to be charged on grain shipped to the
Company--whether or not the old rate should be maintained in spite of
the action of the Exchange; whether the commission should be reduced;
whether the whole matter should be left to the discretion of the
directors. The letters poured in by the thousand and only two per
cent. of the farmers recommended any reduction in the rates; of the
remainder, seventy per cent. were in favor of the Company maintaining
the one cent commission and the other twenty-eight per cent. were
willing to abide by the decision of the directors.
The comments contained in some of these letters revealed strong
feeling. Many farmers were ready to pay two cents commission per
bushel if necessary, rather than sell to "the monopolies."
"I will pledge myself to ship every bushel of grain I grow to the
Farmers' Company," wrote one, "even though the directors found it
necessary to charge me five cents per bushel, coin."
"No, they cauna draw the blinds ower the daylights o' a Scotchman,"
assured one old son of the heather. "I am verra pleased to leave the
hale concern in your hands as I do believe you are thoroughly plumb and
always square."
With this encouragement the directors announced that they would
continue to charge a commission of one cent per bushel on wheat shipped
to them, just as if the Commission Rule had not been suspended by the
Exchange. Other commission merchants, they knew, intended to reduce
their charges to half a cent per bushel; the elevator men, they
expected, would handle the grain for the same and in many cases for
nothing in order to persuade the farmers to ship their way. It would
be a great temptation to many farmers who had been sitting on the
fence, shouting "Sic 'em!" but never lifting a little finger to help,
and it was to be expected that those with limited vision would ship
their grain where they could make the biggest saving at the time.
Notwithstanding, the directors believed that the majority of the
farmers would not prove one cent wise and many dollars foolish by
failing to realize what the future might hold in store if the elevators
succeeded in killing off competition. Finding that it was possible to
handle oats on a smaller margin, they made the farmers a gift reduction
of half a cent per bushel on oat shipments; otherwise the former rate
was sustained.
The wheat ripened. Harvesting began. The long grain trains commenced
to drag into Winnipeg across the miles of prairie. By the middle of
September the weekly receipts of the farmers' company were running to
744 cars. In 1907 they had handled about five per cent. of the crop
and seven and one-half per cent. of the 1908 crop; of the total number
of cars so far inspected in this year of "free for all" methods, the
Grain Growers' Grain Company handled about fifteen per cent.
When the end of the season brought the figures to a final total it was
found that the farmers' organization had handled well over sixteen
million bushels of farmers' grain. This was an increase over the
preceding year of nearly nine million bushels, or 114 per cent. It was
nearly one and one-half million bushels greater than all the previous
years of operation and represented one-eighth of all the grain
inspected during the year in Western Canada.