CONCERNING THE TERMINALS
I have but one lamp by which my feet are guided; and that is the lamp
of experience. I know no way of judging the future but by the
past.--_Patrick Henry_.
With the establishment of co-operative elevators for the storing of
grain at interior points the farmers of Western Canada launched out
upon the greatest experiment in co-operation this continent has seen.
The success of these elevators, owned and controlled by the farmers
themselves, in all probability would evolve the final phase of internal
storage in connection with the Canadian grain fields.
Co-incident with their agitation for government ownership of elevators
at country points, the farmers were urging upon the federal authorities
the desirability of government control and operation of terminal
storage facilities. It was not enough that the Provincial Governments
of the Prairie Provinces should protect the farmers within their
boundaries; for the terminal storage of grain was a part of the system
and the farmers contended that corporation control of the terminals by
grain dealers was leading to abuses and manipulations of the grain that
were not in the best interests of the country.
Grateful as they were, therefore, for the efforts to improve early
conditions by legislation, it was the opinion of the Grain Growers that
these contraventions of the Grain Act would be prevented only by
acquisition of the terminals by the Dominion Government. Mere
legislation and supervision by the Government would not provide an
effective remedy.
At the head of the lakes the grain passed out of the control of the
transportation companies into the hands of the grain dealers; it was
the only point in transit where it became subject to manipulation.
With the exception of those owned by the C. P. R., the terminal
elevators were operated by dealers, largely controlled by United States
concerns and managed by experts from across the line. It was
frequently charged that terminal operators forgot that they ought to be
warehousemen solely and sought profits outside those of legitimate
elevation and storage charges, although these authorized charges paid
ample return on capital investment. The farmers wanted this temptation
of handling and mixing grain at the terminals removed so that terminal
operators could not tamper with the grain while it was in their
custody. The claims of the Grain Growers that mixing was going on at
Fort William and Port Arthur were based upon the report of the Royal
Grain Commission which had investigated the grain trade in 1906-7.
The first definite step taken to lay these matters before the Dominion
Government was in the winter of 1908 after the formation of the
Inter-Provincial Council of Grain Growers' and Farmers' Associations.
At a meeting of these representatives of all the organized farmers it
was decided to send delegates to Ottawa. When these gentlemen reached
their destination in May, 1909, they found themselves face to face with
a large and active group of grain men, railway officials and bankers
who had gathered to take a hand in the interview with Sir Richard
Cartwright, then Minister of Trade and Commerce. Beyond some
concessions regarding special binning of grain, nothing came of this
trip apparently, although the Western farmers were supported strongly
by the Dominion Millers' Association.
A second memorandum was presented early in 1910 and the Grain Growers
were granted a very respectful hearing by the Government; for, while
the organized farmers represented but part of the farming constituency
in the West, they had the sympathy of the entire farming community
behind them in these requests. They went home, however, feeling the
need of concentrating their energies on organization if they were to
get actual action from politicians.
They had not much more than got home safely before something happened
which proved their assertions that all was not as it should be down on
the lake-front. Mr. C. C. Castle, Warehouse Commissioner, one day held
in his hand some official reports from the Inspection Department
concerning certain elevator concerns and compared the figures with the
returns made to the authorities by these concerns themselves. He shook
his head at the discrepancies and started an investigation. There were
three companies involved and after full evidence was taken legally
these three companies were prosecuted for returning untrue statements
and in the Police Court at Winnipeg they were fined a total of $5,550
by the Magistrate.
The next thing was the drafting of a Grain Bill which aimed to improve
certain matters. It was considered by the Senate and passed. It
reached the House of Commons and Hon. Frank Oliver took it by the
halter and led it about. Before anything could happen to it, however,
and the judges get a chance to study its good and bad points, July
(1911) came along and Parliament dissolved like a lump of sugar dropped
into a cup of tea and in the hub-bubbles of a general election
everything was _in statu quo_, as they say. And when the race was over
and the Party Nags back in their stalls, lo! new tenants were taking
their turn at sliding around on the polished Treasury Benches and
having a sun bath!
The new Minister of Trade and Commerce was Hon. George E. Foster. He
looked over the Grain Bill, passed his hand along its withers and
patted it on the rump. Then he sat down and made a copy of it,
idealizing it by injecting a few "betterments," then trotted it out for
inspection with tail and mane plaited and bells on its patent-leather
surcingle. He did not claim to be its real father--only its
foster-father. He introduced it to the House with a very lucid review
of the whole agitation for improvement in the Grain and Inspection Acts
since "Johnny" Millar, of Indian Head, Saskatchewan, handed in the
Royal Grain Commission report in 1907.
The new Government proposed to grant government control of terminal
elevators only on a limited and experimental scale. They wanted to
test out the principle by lease or construction of two or three
terminals at the head of the lakes before undertaking the financial
responsibility of handling the entire terminal system. Heretofore
there had been government supervision merely; but now for an experiment
there would be government operation as well while the management of the
remaining terminals would have to be satisfactory to the Government.
"The demand of the West is that the grain should not be manipulated at
the terminals," declared Mr. Foster. "It does not matter a pin as to
how that is brought about so that the thing itself is accomplished."
The new bill provided for sample markets and the farmers did not like
this unless the Government acquired the terminals as had been
requested. Owing to the grain blockade, due to car shortage, feeling
was running high in the West and the farmers eyed the new legislation
closely. They came upon a clause which startled them and in the row
that followed it looked at one time as if the new Bill would be led to
the boneyard and killed.
One of the proposals of the Government was the formation of a Board of
Grain Commissioners with wide discretionary powers. They would be made
responsible for the proper conduct of the entire grain trade and deal
with all matters pertaining thereto. They were to have the absolute
say-so in regard to car distribution and there was one clause that
threatened this protection for which the Western farmers had fought so
hard in earlier days.
At once consternation spread among the Grain Growers, their
apprehensions based upon bitter experience. They protested vehemently.
Letters, petitions and resolutions slid all over the official
Government desks and delegations followed to Ottawa. Not the organized
grain growers alone, but the whole Western farming element was up in
arms.
Nevertheless, the new Grain Bill passed the House of Commons and
browsed over to the Senate.
It was the farmers' last chance to stop it. R. McKenzie and J. S.
Wood, of the Manitoba Grain Growers; J. A. Maharg and F. W. Green, of
the Saskatchewan Grain Growers, and E. J. Fream, of the United Farmers
of Alberta--these practical men figuratively took off their coats and
waded in when they got in conference with Senate members. They
preferred to see the whole bill killed unless the objectionable clause
regarding car distribution were struck out; they saw the old-time
elevator abuses again becoming possible and quite nullifying the many
good features which the new legislation possessed.
The final upshot was that somewhat unexpectedly Hon. Senator Lougheed,
leader in the Upper House, withdrew the offending clause on behalf of
the Government, although the Government felt that the farmers were
unduly excited.
The new Board of Grain Commissioners was appointed without delay and
consisted of three men who understood Western conditions--W. D.
Staples, of Treherne, Manitoba; Frank E. Gibbs, of Fort William, and
Dr. Robert Magill, now Secretary of the Winnipeg Grain Exchange. Dr.
Magill was made Chief Grain Commissioner, for he had rendered excellent
services in the past and commanded the respect of the entire West.
The Board was not long in reaching the conclusion that if grain dealing
companies were to be eliminated from the business of owning and
operating terminal elevators, outright purchase and breaking of leases
would be necessary. The companies refused to lease to the Government
voluntarily on any terms which the Board could recommend. Some would
not lease on any terms whatever, claiming that to lease their terminals
would dislocate their whole system of interior elevators, involving a
loss of capital which had been invested legitimately. Apart from this,
the Board had its hands so full with other important things that
expropriation and all that it involved would claim their whole time and
energy to the neglect of other urgent matters.
Accordingly, the Grain Commissioners recommended that the Government
meet the immediate need of increased terminal facilities at the head of
the lakes by building a three-million-bushel elevator, thoroughly
equipped for storing, cleaning, drying and handling grain and with
provision for future extensions to a capacity of thirty million
bushels. They also approved of the Grain Growers' Grain Company
leasing one of the C. P. R. elevators. In this way both the Board and
the Grain Growers would gain first-hand knowledge of terminal elevator
conditions.
While formulating a policy for terminal elevators the Grain
Commissioners considered the need for terminal storage in the interior
as well as at the lakefront. The increase in the area of the grain
fields, particularly in Alberta, was straining the transportation
facilities to the limit and the construction of the Grand Trunk Pacific
promised to open up still more acreage. Railway rolling stock, railway
yard accommodations at Winnipeg and Fort William and elevator storage
were not keeping pace with the annual volume of new grain. The
Government Inspection Department was up to its eyes in grain, working
night and day during the rush season, while lake and ocean tonnage
likewise were inadequate. Even the eleven million bushels of extra
storage capacity being built at the lake at the time the Board was
considering the situation would soon fill and overflow. Congestion at
eastern transfer houses or terminal points was threatening, water
freight rates were up and the export market disturbed and there was no
reserve of storage capacity in Western Canada to meet emergencies. In
a wet season the drying plants at Fort William and Port Arthur were far
from adequate. Delayed inspection returns and terminal outturns, due
to the recurring car shortage, prevented the farmers from financing and
widened the spread between street and track prices as the close of
navigation approached.
Reviewing all this, the Grain Commissioners came to the conclusion that
it was time to consider seriously the erection of Government terminal
facilities nearer the grain fields. Especially in Alberta was the need
great for inspection and terminal storage to be nearer the producer.
It would relieve congestion, benefit the whole grain trade and provide
for the future possibility of alternate shipping routes via Hudson Bay
or the Panama Canal.
It was true that the Royal Grain Commission of 1906-7 had raised
objections to interior terminals and inspection, such as the extra
expense of handling, the extra loss to the grain in handling and
re-handling, the possibility of the railways solving the car shortage
problem, the difficulty of getting shippers to send their grain to such
elevators and so forth. But the Board considered that, in view of
other possible routes than the Eastern, these objections were not
strong enough to balance the benefits. Accordingly they recommended
the Government to take action, the elevators to be regarded as public
terminals in which mixing of grades would be forbidden.
While the farmers in all three Prairie Provinces were busy with these
vital matters, the Grain Growers' Grain Company meanwhile was wading
along through all the difficult seasons of car shortage, expanding its
usefulness and trying its best to give the maximum of service the while
it was reaching out into the export field in an experimental way.
Then, in 1911, a situation arose unexpectedly that caused turmoil among
the officers of the pioneer company and led to considerable anxiety
among the Grain Growers all over the West. For, through an excess of
zeal upon the part of an employee, the Grain Growers' Grain Company
suddenly found itself dragged into the maelstrom of "The Pit." It was
accused of trying to corner the oat market and was forced to fight for
very life.
So that at last it looked indeed as if Chance had delivered the farmers
into the hands of those who preferred to see them eliminated altogether
from the market.