THE INTERNAL ELEVATOR CAMPAIGN
What constitutes a state? . . .
Men who their duties know,
But know their rights, and knowing, dare maintain.
--_Sir William Jones._
_Ode after Alcaeus._
Now, about this Government Ownership of Elevators. The Grain Growers
had had it in mind right along. The elevators were the contact points
between the farmer and the marketing machinery; therefore if his
fingers got pinched it was here that he bled. Complaints of injustice
in the matter of weights, dockage, grades and prices colored the
conversation of farmers in many parts of the country and, rightly or
wrongly, many farmers were profoundly dissatisfied with existing
conditions at initial elevators. These elevators provided the only
avenue by which grain could be disposed of quickly if transportation
facilities were not fully adequate. It seemed to the farmers,
therefore, that the only way to avoid monopolistic abuses was for the
provincial governments to own and operate a system of internal storage
elevators and for the Dominion authorities to own and operate the
terminals. The elevators, declared the farmers, should be a public
utility and not in private hands.
This feeling first found definite expression in a request by the
Manitoba Grain Growers prior to the Manitoba elections in 1907. The
Manitoba Government declined to act on the request of the Grain Growers
alone, but called a conference of municipal reeves and others
interested. This conference was held in June and urgently requested
the Manitoba Government to acquire and operate a complete system of
storage elevators throughout the province, as asked for by the Grain
Growers. Nothing was done at the first session of the renewed
government, however.
Meanwhile the Grain Growers were circularizing the three Prairie
Provinces on the need for a government system of elevators and at the
annual conventions of the organized farmers in Manitoba, Saskatchewan
and Alberta in 1908 strong endorsement of the idea was made. An
"Inter-Provincial Council of Grain Growers' and Farmers' Associations"
[1] had been created, and this body urged the several executives to
wait upon their respective governments and try to obtain definite
action.
At the suggestion of Premier Roblin, of Manitoba, a conference of the
three premiers was arranged through the Secretary of the
Inter-Provincial Council. It was the hope of the farmers that this
might lead to uniform legislation, introducing government ownership of
the elevators, and that the three provincial governments would join in
an appeal to the Dominion Government for co-operation. In each
province the whole subject had been dealt with exhaustively in the text
prepared by the Grain Growers--the conditions making a government
system of elevators necessary, how it could be created and the
practicability of its operation, the question of financing and the
beneficial results that would follow. It was the idea of the farmers
that the provinces would purchase existing storage houses at a fair
valuation, issuing government bonds to finance the undertaking and
build new elevators where needed.
The provincial Premiers met at Regina on May 4th, 1908, talked over the
matter, then sent for George Langley, M.P.P., one of the directors of
the Saskatchewan Grain Growers' Association who occupied a seat in the
Saskatchewan Legislature. They appointed Mr. Langley as a sort of
ambassador in their negotiations with the Grain Growers'
representatives, sending him to the Inter-Provincial Council to present
verbally a couple of alternative propositions--that the Railways should
be asked to build loading elevators with storage bins or that the
management of the elevators should be taken away from the present
owners and profits limited while the farmers' organizations became
responsible for grades, weights, etc.
Back came the Grain Growers with a document which repeated their former
demands and amplified their argument. They claimed that they were
entitled to what they were asking if only because the farmers formed
the major part of the population and their demands could be granted
without placing any tax upon the remainder of the people. They
requested a conference with the three Premiers to go into the matter in
detail.
Not until November 4th, 1908, did this conference take place in Regina.
When they did get together the Premiers were not posted well enough on
details to promise anything more definite than that they would consult
their colleagues and make reply in due course.
It was the end of January, 1909, before the Inter-Provincial Council
had an official reply. The Premiers pointed to grave and complicated
questions which stood in the way of granting what the farmers were
asking. Constitutional difficulties, financial difficulties,
legislative difficulties--all were set forth in a lengthy and well
written memorandum. The British North America Act would have to be
amended to grant the provinces authority to create an absolute monopoly
without which success would not be assured. In short, there was such a
tangle of overlapping jurisdictions, public interest in trade and
commerce, federal rights, railway rights and so on that the Premiers
could not see their way clear at all in spite of their great desire to
help the farmers at all times.
The Grain Growers passed the document to their legal adviser and R. A.
Bonnar, K.C., gave them his opinion in writing. That opinion was very
complete, very authoritative, and poked so many holes in the
"constitutional difficulties" that the farmers could see their way much
more clearly than the Premiers, to whom they made dignified rejoinder.
They handed on the holes while they were at it in the hope that the
heads of the three Provincial Governments could take a peek through the
"difficulties" for themselves and see just how clear the way really was
after all.
The Provincial Premiers, however, took the step which logically
followed their reply to the farmers. Resolutions were introduced in
the Alberta and Manitoba Legislatures that His Excellency the
Governor-in-Council be memorialized in regard to the elevator question
and asked to provide government ownership and operation or to have the
necessary powers to deal with the matter conferred upon the provinces.
Thus things rode until December 14th, 1909, when the Committee on
Agriculture in the Saskatchewan Legislative Assembly recommended the
appointment of a commission to make searching enquiry into the subject
of government control and operation of the internal elevators as asked
for by the Saskatchewan Grain Growers' Association.
Two days later, at the annual convention of the Manitoba Grain Growers,
Hon. George Coldwell announced for the Manitoba Government that they
had accepted the principle of establishing a line of internal elevators
as a public utility, owned by the public and operated for the public.
So unexpectedly did this good news come that the farmers were amazed at
their own success. They had fought for it long and earnestly and
victory meant a very great deal; but it had seemed still beyond reach.
In the case of Manitoba it only remained now to get together and thresh
out the details. A strong committee was appointed to conduct
negotiations with the Government and there was prepared a memorandum of
the plan which the farmers recommended the Government to follow. This
was presented on January 5th, 1910.
The Government and the Grain Growers then each got ready a bill for
consideration by the Legislature. Many conferences took place. The
Government refused the farmers' bill and the farmers did not approve of
the Government's proposals. While leaving full financial control in
the hands of the Government, the Grain Growers demanded that the
operation of the elevators be undertaken by an absolutely independent
commission without any political affiliations whatsoever; it was
provided also that no officer of the Grain Growers could act on this
commission. The Government did not deem it wise to let control of the
managing commission out of its hands. So negotiations were broken off.
The Manitoba Government now prepared a new bill, but did not remove the
features to which the farmers were objecting. This bill was passed and
the Government voted $50,000 for initial expenses and $2,000,000 for
acquiring elevators. Beyond a weak protest from the North-West Grain
Dealers' Association the elevator owners had not shown much excitement
over the situation. While the Manitoba Grain Growers were not
satisfied that the Government plan would work out successfully and
therefore refused to assume responsibility in connection with it, they
were ready nevertheless to lend their best co-operation to the Manitoba
Elevator Commission when it got into action.
In the Province of Saskatchewan an altogether different plan was
evolved in due course. The investigating commission, appointed
February 28th, 1910, consisted of three well qualified men--George
Langley, M.P.P.; F. W. Green, Secretary of the Saskatchewan Grain
Growers' Association; Professor Robert Magill, of Dalhousie University,
Nova Scotia, the latter acting as chairman. The commission held
sittings at many points in Saskatchewan, taking evidence from a large
number of farmers, went to Winnipeg to meet representatives of elevator
companies, the Exchange and Government officials, and also visited
several American cities. Their final report, consisting of 188
typewritten pages, was handed to the Saskatchewan Government on October
31st, 1910.
In addition to the comprehensive scheme outlined by the Saskatchewan
Grain Growers many different suggestions were considered by the
commission, such as government ownership and operation, state aided
Farmers' Elevators, municipal elevators and various modifications of
these plans. All, however, were discarded by the commission in favor
of an experiment in co-operative ownership and management by the
farmers themselves, assisted financially by the Provincial Government.
The scheme presented by the executive of the Saskatchewan Grain
Growers' Association appeared to be unworkable because it overstepped
mere public ownership and operation of initial elevators to include
methods of sampling, grading before shipment, bank and government
loans, features outside the power of a provincial legislature. The
schemes of municipal and district elevators, while appealing to local
loyalty for patronage, did not secure the farmers' direct pecuniary
interest to make the elevators successful in the face of competition.
As to the Manitoba plan, the commission were unanimous in advising
against it in view of the financial risk and the disadvantages of
political influences which would tend to make themselves felt.
Instead, therefore, of a plan aiming at ownership of initial elevators
by the State and management by the Government of the day, the
commission recommended ownership and management by the growers of
grain. Such a co-operative scheme would aim equally well at removing
initial storage from the ownership of companies interested in grain
trading--would recognize as promptly the feeling of injustice in the
minds of many farmers--would seek just as fully to create marketing
conditions which would give the farmer satisfaction and confidence.
While both the Manitoba scheme and the proposed co-operative scheme
involved financial aid by the State, the commission saw reason to
believe that with control and management in the hands of the farmers
themselves many of the risks and limitations of other plans would be
avoided.
It is to be noted that in reporting upon general conditions in the
grain trade of Canada in 1910 the Saskatchewan Elevator Commission
pointed out the great change which had taken place since 1900. One
factor in this had been the construction of new transcontinental lines
and thousands of miles of branch railway lines together with a great
increase in car supply and a more efficient and cheaper system of
transportation. Again, the use of loading-platforms had introduced
real competition with the elevators, almost fifteen million bushels of
the 1908-09 crop in Western Canada having been shipped direct by the
farmers. The development of co-operation among the farmers through the
Grain Growers' Associations had led to much advantageous legislation,
while Farmers' Elevators and Public Weigh Scales had had a salutary
effect at many shipping points. The organization of the Grain Growers'
Grain Company as a farmers' own selling agency likewise had exerted a
wide influence for good all over the West, enabling the farmers to
obtain first-hand information about existing methods of dealing in
grain. Finally, the protection afforded by the Manitoba Grain Act was
not to be questioned; for while it was impossible to draft any Act
which would prevent all the abuses alleged, it had been the means of
providing many weapons of defence for the farmer and unfamiliarity with
these provisions by individual farmers was scarcely to be blamed upon
the Act itself.
The improvement in conditions, compared with earlier years, was
recognized by most of the farmers appearing before the commission and
many of them had no personal complaint to make in regard to weights,
grades or prices. They were advocates of provincial ownership not so
much on their own behalf as upon behalf of settlers in newer districts.
The commission, therefore, while not saying that there were no cases of
sharp practice or no grounds for dissatisfaction, were impressed by the
fact that however powerless farmers had been in earlier days they were
now in a very different position. The strong feeling which many
farmers had against the line elevator companies was based upon
experiences of rank injustice and bitter recollections of the past; for
this the elevator people could blame nobody but themselves. But the
factors enumerated undoubtedly had improved the situation from the
farmers' standpoint and it only remained to strengthen these factors to
give the farmer complete control in the matter of initial storage.
The commission were unanimous in recommending co-operative organization
of the farmers as the probable solution of the situation in
Saskatchewan. They suggested the enactment of special legislation to
provide for the financing of the undertaking by the farmers themselves,
assisted by a government loan. That is, the farmers surrounding a
point where an elevator was needed would subscribe the total amount of
capital necessary to build it, paying fifteen per cent. in cash, the
crop acreage of the shareholders at that point to total not less than
2,000 acres for each 10,000 bushels capacity of the proposed elevator;
these conditions fulfilled, the government would advance the remaining
eighty-five per cent. of the subscribed capital in the form of a loan,
repayable in twenty equal annual instalments of principal and interest,
first mortgage security. The commission also suggested that the
responsibility of preliminary organization be thrown upon the farmers
themselves by appointing the executive of the Saskatchewan Grain
Growers' Association as provisional directors of the new grain handling
organization.
When the matter came before the Saskatchewan Legislature the annual
convention of the Saskatchewan Association was being held at Regina and
the farmers declared themselves ready to assume responsibility and go
ahead. A bill was introduced by the Government, embodying the
recommendations of the Commission, and the Act incorporating The
Saskatchewan Co-Operative Elevator Company, Limited, was assented to on
March 14th, 1911.
Because of the unusual financial arrangements with the Provincial
Government the capital stock was not set at a fixed amount but left
subject to change from time to time by the Government. In order to
protect the credit of the Province the Government thus was able to
control the amount of stock the company could issue and thereby the
amount of money the Government might be called upon to advance for the
construction or purchase of elevators. Shares were placed at $50 each,
available for farmers only, and a limit was set upon individual
holdings.
It was provided that each local unit would have a local board of
management and appoint delegates to an annual meeting where a Central
Board of Management would be elected. The company was empowered not
only to own and operate elevators and buy and sell grain, but to own
and operate lumber yards, deal in coal and other commodities and "do
all things incidental to the production, storing and marketing of
grain."
By June 16th, 1911, the Provisional Directors[1] were able to call the
first annual meeting of the new organization, having fulfilled the
requirement of the Act that twenty-five "locals" be first organized,
and by July 6th--the date of the general meeting at Moose Jaw--an
additional twenty-one "locals" were ready. Thus they were able to
start with forty-six units, representing $405,050 capitalization with
8,101 shares held by 2,580 shareholders.
The newly-elected directors[2] proceeded forthwith to let contracts for
forty new elevators, standard type of thirty and forty thousand bushels
capacity with cleaning machinery and special bins. Six existing
elevators were purchased.
The Grain Growers' Grain Company agreed to act as selling agents for
this new baby sister and wide-spread interest became manifest as the
Grain Growers took another step into commercial circles.
[1] See Appendix--Par. 8.
[2] See Appendix--Par. 12.
[3] See Appendix--Par. 12.