"Oh, him!" laughed his partner as he saw who was indicated. "Only that gazabo from Sintaluta who's been nosing around lately. Some hayseeds out the line sent him down here to learn the grain business. They believe that all wheat's No. 1 Hard, all grain buyers are thieves, and that hell's to be divided equally between the railways and the milling companies!"

"So that's the guy, eh?—that's that man Partridge!"



[1] The new name of Rat Portage is Kenora (Ontario).

[2] See Appendix—Par. 2.

[3] See Appendix—Par. 8.



CHAPTER V

"THE HOUSE WITH THE CLOSED SHUTTERS"

Knock, knock, knock! Who's there, i' the name of Beelzebub? Here's a farmer . . .—Macbeth.

When wheat ceased to be grown for local needs and overflowed upon the markets of the world, becoming a factor in finance, arenas where its destiny was decided were established in the large centres of trade. In these basins of commerce the never-ending flow concentrated and wheeled for a short space before in re-directed currents it rolled on its way to ocean ports. Here, according to the novelists, frantic men were sucked into the golden eddies, their cries strangled and their fate forgotten even as they were engulfed by the Leviathan with which they adventured; or they emerged with eyes bloodshot, voices gone and clothes torn, successful speculators of a day. Perhaps the general reader is more familiar with these mad scenes of "The Pit," as the trading floor is called, than with the steadily turning marketing machinery of which they are but a penumbra.

The modern grain exchange is much more than a mere roulette wheel for the speculator. Its real purpose is to provide a centre for the legitimate trader. It is a great information bureau of world happenings where every item of news concerning the wheat in any way is gathered and classified—drouth, rain, frost, rust, locusts, hail, Hessian fly, monsoon or chinch bug. In every corner of the earth where the wheat streams take their rise, from green blade to brown head the progress of the crop is recorded and the prospects forecasted—on the steppes of Russia, the pampas of the Argentine, the valley of the San Joaquin, the prairies of Western Canada and the Dakotas, the fields of India, Iowa, Illinois and Kansas. Good news, bad news, the movements of ships, the prices on the corn exchanges of London and Liverpool, at Chicago, on the bourses of Paris, Antwerp and Amsterdam—all are listed. With such a Timepiece of International Exchange ticking out the doings of nations, both buyer and seller can know what prices will govern their dealings. In office or farmhouse an ear to a telephone is all that is necessary.

A grain exchange, then, is the market-place where grain dealers meet to secure information and maintain regulations for the prompt performance of contracts. The exchange organization does not deal in grain, but has for its sole purpose the protection of those who do and the facilitating of transactions; in other words, it is on the ground to see that the grain trade is carried on in an honest and capable manner and to punish offenders against proper business ethics and established rules.

Its membership is composed of grain dealers doing business in the exchange's territory—milling companies, exporting companies, line elevator companies as well as independent dealers and "commission men." Besides seeking a supply of wheat to keep their mills busy for the season, the milling companies sell wheat. It is the business of the exporters to make shipment to other countries. Wheat is sold to exporters and millers by the elevator companies, who are interested in running as much grain as possible through their elevators at country points. The chief business of independent dealers is to handle wheat that stands "on track," ready for shipment, either buying outright from the farmer or handling it for him on a commission basis.

The "commission man" is in an especially good position to do a clean-cut business. He assumes no burden of large capital investment and operating expense, as do the elevator companies. His chief need is a line of credit at a bank and from this he pays advances to his clients, his security being the bills of lading of wheat consigned to him. He does not need to buy or sell on his own account and, unlike the exporter, he does not have to risk changes in freight rates or in prices or make deliveries by given dates. As for the satisfactory milling quality of the crop—that is something for the miller to worry over. In order to do business it is necessary only for the commission man to be a member of the exchange and to obey its rules.

For a long time Winnipeg has been known as the greatest primary wheat market in the world. That means that a greater volume of new wheat, direct from the producer, passes through the Winnipeg market than anywhere else, not even excepting Chicago where the first grain exchange to reach international development was established in 1848. The Winnipeg market is fed by the vast wheat area of Western Canada and frequently between two and three million bushels of wheat go through Winnipeg in a single day. During the rush season sixty or seventy cars of wheat leave Winnipeg for the East every twenty minutes of every twenty-four hours. The freight boats on the lakes load 460,000 bushels in three-and-a-half hours.[1]

It is interesting to note that nowhere else in the world is a great public grain market like the Winnipeg market found located four hundred miles away from the storage point where grain dealt in is kept for sale delivery. Geographically Fort William and Port Arthur at the head of the great lakes water route would provide the natural delivery point for Western grain which has been routed eastward[2] and there the location of the exchange might be looked for logically. It so happens, however, that the eastern edge of the vast grain fields lies four hundred miles west of the twin harbors, the country between not being adapted for farming, and to avoid the delay of mail transit and to operate the trading effectively it was necessary to locate the exchange at Winnipeg, the great metropolitan railway centre where the incoming grain concentrated.

In Western Canada the grain is stored in bulk by grades, thereby cheapening handling cost. Unlike most countries—which sell grain on sample—Western Canadian grain has been sold by grade. The inspection and grading of wheat, therefore, is a very important factor in the grain trade of Canada and is in full charge of Dominion Government officials. Upon their verdict depends the price per bushel which will be paid for any shipment of grain, market quotations varying for different grades; whether stored, sold at home or sold abroad their certificate of grade brands that particular wheat throughout. The huge river of grain flows in upon them unceasingly; at times the inspectors have to work at top speed to avoid being engulfed. The variety of Nature's response to the growing conditions in changing seasons must not confuse them from year to year; but with sharpened senses and sound judgment they must steer a sure course through the multiplicity of grades and grade subdivisions.

The thoroughness of the system adopted by the Grain Inspection Department is shown by description of the work done at Winnipeg. Offices and staffs in charge of deputy inspectors are maintained in the different railway yards. They work in shifts night and day; for during the mad seventy-or-so days in which the Western crop stampedes for the lakefront there is no let-up to the in-rolling wheat-bins which come swaying and grinding in over the rails like beads on a string—the endless rosary of harvest thanksgiving. Wheat samples must be obtained from each car and no train can be moved until a placard has been placed at the end of it, reading: "Grain Inspectors have finished this train." A fifty-car train can be sampled in about an hour and a half, which is comfortable time for a change of engines and crews.

The sampling gangs work with all the precision of gun crews—each man with a particular thing to do. One goes down the train, opening car doors and leaving an empty sample bag in each car. Running up a short ladder, the sampler climbs over the top of the inner door, which extends above the "load line"; the standard sampler which he uses is a cylindrical brass rod, so constructed that when it is "stabbed" to the bottom of the car the grain which fills it is a correct sample of wheat at every depth. Seven such samples are procured from different sections of the car, and the track foreman, standing on a ladder, watches these poured onto a cloth with an eye to detecting evidence of "plugging" with an inferior quality of grain; these seven samples having been mixed thoroughly, a canvas bag is filled from the result and the two-and-one-half pounds which it will hold become the official sample. The rest of the mixture is dumped back and the car resealed.

The foreman has filled out a sample ticket with car number, date, load line, initials of sampler and any other notations necessary—such as leakages, etc. His own name is stamped on the back of the ticket, which goes into the sample sack. Copies of the way bills with full information as to all cars, shipping points, consignees or advisees and destinations are obtained from the railway yard office and these, together with the samples, are sent twice a day to the Chief Grain Inspector's office at the Grain Exchange.

Here the samples are inspected and graded in a room with special lighting facilities. The grading is done only in broad daylight. The quality of the grain, its condition and the admixtures are determined respectively by judgment of hand and eye, by elaborate mechanical moisture tests and by a sieving and weighing process. The whole sample is examined closely for color, plumpness, weight, etc., in order to fix its grade as No. 1 Hard, No. 1 Northern, 2 Northern, 3 Northern; 1 Hard and 1 Northern must weigh at least sixty pounds, 2 Northern fifty-eight pounds, and so on. Grades below these are set by the Grain Standards Board. Damp or wet grain is marked "No Grade," which means that it is considered unfit for storing and therefore has a lower market value. Grain which is heated or bin-burnt is "condemned." If it is unsound, musty, dirty, smutty, sprouted or badly mixed with other grain, etc., it is "rejected." Grain which, because of weather or other conditions, cannot be included in the grades provided by statute is given a "commercial grade."

It will be seen at once that here is work requiring great nicety of judgment and that long experience is necessary to enable the grader to reach his decisions quickly and accurately. When the grading is completed the sample is placed in a small tin box and filed systematically; it is supposed to remain thus stored until there is no longer the possibility of a demand for re-inspection and finally the samples are sacked and sold to the miller with the highest bid, the money being paid to the Dominion Government.

Grade certificates, bearing the Chief Grain Inspector's signature, are issued for each shipment and sent at once to the elevator company, miller or commission agent to whom the car is consigned. These grade certificates, together with the weight certificate and the bill of lading, make the grain negotiable on the market; the dealer does not see the actual grain, merely handling these papers.

If dissatisfaction with grade or dockage arises, the owner of the grain or his agent can obtain re-inspection at the office of the Chief Grain Inspector free of charge, and, if still dissatisfied, appeal can be made to the Survey Board. This is a board of twelve men; the governing rules and regulations are established by the Grain Commission. Six members are recommended by the Winnipeg Board of Trade and two each by the Minister of Agriculture in each of the three prairie provinces.[3] The verdict of the Survey Board is final.

Now, back in 1905 the machinery for moving the crop upon its way was little understood by the average Western Canadian farmer. The wheels went around, gave a click and away went his wheat; but in approaching it all with the idea of understanding everything he was in the position of the small boy examining the works of a watch to see how it told the time. He felt that he ought to understand what went on down at Winnipeg; for of course where there were so many rules and regulations to be broken there must be "funny work." It was the natural suspicion of the man who lived much to himself in the quiet spaces, who could not believe that grain dealers could be honest and build palatial residences in Winnipeg while his own toil in producing the grain was rewarded with a living only. It looked as if the roost was being robbed and with his newborn initiative he wanted to find out how it was done and who was doing it.

The satisfactory manner in which things are conducted in the grain trade to-day is the result of long experience and gradual improvement of conditions. It must be remembered that in the earlier days the trade was not so well organized for efficiency and in 1905 when E. A. Partridge began to probe for "plugging" he had a big job on his hands, especially in view of the fact that he was treated for the most part as a meddler who was not entitled to reliable information.

There are two ways of reaching a conclusion—one by approaching it logically on facts laid down; the other by jumping to it across a yawning lack of detail. At the end of his month of investigation the farmer's scout had a regular rag-bag of material out of which to fashion a patchwork report. A grain man might have condemned it as a "crazy quilt" because bits of high color obtruded inharmoniously. But if here and there an end was short or a bit of information on the bias, it was because the "Farmers' Representative" had not been treated with sufficient frankness. He had to make the best of the materials allowed him and his natural tendency to bright-colored metaphor may have been quickened. He hit out straight from the shoulder in all sincerity at conditions as they appeared to him.

He thought he saw five companies controlling the exporting business, and also their margin of profit, so that they were able to keep out smaller dealers who might have the temerity and the necessary capital to try exporting on their own account. He saw the smaller dealers in turn stem-winding their prices by those of the exporters, controlling the prices paid for street and track wheat throughout the country; thereby, he reasoned, it became possible to set special prices at any given point by the simple expedient of wiring the necessary instructions to the operator at that point to pinch independent competition. He saw elevator companies cutting their charges at certain points to kill off competition from "farmers' elevators" which sold to independent dealers. All this he was sure he saw.

The sampling appeared to be carried on in a systematic and satisfactory manner. The grading, too, appeared to be uniform enough as regarded the standard grades; but in the item of color there seemed just cause for complaint. Lack of color, a trifling number of imperfectly formed kernels or the suspicion of a wrinkle on the bran apparently doomed a sample to low grade no matter how heavy and flinty the wheat might be.

This seemed scarcely fair to Partridge, who bore in mind that the sunny seasons of past years had been succeeded by cloudier ones, the dry autumns by wet ones and that with stacking discontinued and much of the farmers' wheat left long in stock, bleaching was bound to follow. So that if the Chief Grain Inspector were a "crank on color," he should remember that beauty was only skin deep.

The fracture and microscopic and weighing tests seemed to be the only reasonable tests which could be applied quickly; the milling test was the only one which was absolutely correct. Any rapid eye test which pretended to determine whether there was sixty-one per cent. or fifty-nine per cent. of Red Fife wheat in a given sample struck the Farmers' Representative as farcical; yet this was sufficient to make the difference of a grade and sometimes a difference of seven cents per bushel in the price obtained.

The whim of the Inspector likewise decided how many lean berries in a plump sample would disqualify it for "plump" classification and how many mature or defective berries among sound wheat, would disqualify it from being classed as "sound." With a single concocted sample as a basis of judgment Partridge considered that the grading of the lower grades often was very unjust to the producer, especially to the owners of plump frosted wheat; the process of concocting the basic sample was very interesting; but the result was "a nightmare."

W. H. Gaddes, who had preceded him to Winnipeg, agreed with him in this. Also, Mr. Gaddes denounced the Survey Board at that time as unsatisfactory in its composition, open to suspicion in its findings and in practice—so far as outsiders' wheat was concerned—simply a machine to register confirmation of the Inspector's previous grading.

It was Partridge's belief that "many a fraud perpetrated in a line elevator" was added to the "iniquities" of the Inspector, in whose personal integrity he had every confidence. For this reason he was inclined to be lenient with the hard-working and conscientious officials of the Government. Nevertheless, it appeared wise that a farmers' special agent be maintained permanently at Winnipeg to safeguard the interests of the farmers, especially if certain powers were allotted to him under the Inspection Act.

In making his report to the Territorial Grain Growers' Association Partridge went into the whole situation as he saw it and particularly was he outspoken in regard to "that House with the Closed Shutters," as he called the Winnipeg Grain and Produce Exchange. In fact, his gas attack upon the Exchange was ablaze with the fires of hostility.

And for the use of his reckless language Partridge was to be called to account in due course.



[1] Although only about ten per cent. of the arable area in Western Canada is under cultivation there are already 3,500 country elevators. Terminal elevators at the head of the lakes with a storage capacity of forty-four million bushels and interior Government terminals with ten and one-half million bushels capacity are overflowing already. Wheat exports of Canada have increased from 2,284,702 bushels in 1867 to 157,745,469 bushels in 1916. Per capita Canada has more railway mileage than any country in the world.

[2] In early days nearly all grain was routed eastward via Winnipeg; but with the development of the grain trade and the opening of the Panama Canal some Western Canadian grain travels west and south. Facilities for inspection and grading have been established at Calgary, Superior, Duluth, Saskatoon, Moose Jaw, Medicine Hat and Vancouver.

[3] In 1905 three members of the Survey Board were recommended by the Winnipeg Board of Trade and three each by the respective Departments of Agriculture in the three Prairie Provinces.



CHAPTER VI

ON A CARD IN THE WINDOW OF WILSON'S OLD STORE

. . . Is it vain to hope The sons of such a land will climb and grope Along the undiscovered ways of life, And neither seek nor be found shunning strife, But ever, beckoned by a high ideal, Press onward, upward, till they make it real; With feet sure planted on their native sod, And will and aspirations linked with God? —Robert J. C. Stead.

Ideas grow. The particular idea which now began to occupy the thoughts of E. A. Partridge to the exclusion of everything else was a big idea to begin with; but it kept on growing so rapidly that it soon became an obsession.

Why couldn't the farmers themselves form a company to undertake the marketing of their own wheat? That was the idea. If a thousand farmers got together in control of ten million bushels of wheat and sold through a single accredited agency, they would be in the same position exactly as a single person who owned ten million bushels. If the owner of ten thousand bushels was able to make a better bargain than the owner of one thousand, what about the owner of ten million bushels?

"Would the owner of ten million bushels peddle his wheat by the wagonload at the local shipping point or by the carload in Winnipeg?" mused Partridge. "Would he pay one hundred thousand dollars to a commission man to sell his wheat, with perhaps a nice rake-off to an exporter, who turns it over at a profit by selling it to a British dealer, who blends it and makes a good living by selling the blend to a British miller?"

His pencil travelled swiftly on the back of an envelope.

"Would he pay one hundred and seventy-five thousand dollars to the line elevator and stand a dockage of one hundred thousand bushels in addition? Would he pay the terminal elevator seventy-five thousand dollars' worth of screenings? Would he pay two and one-half million dollars for transportation when 'by a little method known to large exporters' he could save one and a quarter million dollars out of this item?

"You just bet he wouldn't!" concluded this man Partridge. "And supposing we had ten thousand farmers in one company and each farmer produced, on an average, five thousand bushels of wheat—that would put the company in control of the sale of fifty million bushels, not ten! Why, there's the answer to the whole blame thing—so simple we've been stepping right over it!"

Pools, mergers, combines, trusts and monopolies were but various forms of the same co-operative principle acting within narrow limits to the benefit of the co-operatives and the prejudices of the outsiders. The remedy lay not in legislative penalties against co-operation but in the practice of co-operation on a large scale by the people. That would provide the most powerful weapon of defence against financial buccaneering. Universally employed, it would bring about an industrial millennium!

But this was dreaming, of course. None knew better than E. A. Partridge that if even a small part of it was to come true, there lay immediately ahead a great educational campaign. Ignorance and suspicion would require to be routed. It would be difficult to convince some farmers that his motives were unselfish. Others would be opposed to the idea of a farmers' trading company in the belief that it would wreck the Association. "We must keep our organization non-partizan, non-political and non-trading" had been the slogan from the first.

Nothing daunted by the difficulties which loomed in the foreground, Partridge obtained permission from his Territorial associates to tell the central Manitoba Grain Growers' Association the result of his investigations at Winnipeg. The Manitoba convention was about to be held at Brandon and on his way back home he remained over to address the delegates. They listened carefully to what he had to say; but when he began to urge the necessity of the farmers themselves going into trading in grain his fire and enthusiasm caused more excitement where he was standing on the platform than in the audience. The best he could do by his earnestness was to create sufficient interest for a committee[1] to be appointed with instructions to investigate the possibilities of the scheme and report at the next annual convention of the Manitoba Grain Growers' Association.

On arrival at Sintaluta, however, he succeeded in stirring up his neighbors to the proper pitch of enthusiasm. They knew him at Sintaluta, listened to him seriously, and the leaders of the little community shook hands on the idea of organizing, in the form of a joint stock company, "a scheme for the co-operative marketing of grain by farmers."

When he made his report of the Winnipeg investigations at the annual convention of the Territorial Grain Growers' Association at Moose Jaw he found that while the principle which he advocated was favorably received—just as it had been in Manitoba—many farmers drew back distrustfully from the idea of "going into business." Their experience with business in the past had not been of a nature to instill confidence in such a venture and if the enterprise failed, they feared it would discredit the Association. There was a strong prejudice against any Association director or officer being closely identified with such a propaganda.

Back to Sintaluta went E. A. Partridge. A public meeting was called to discuss the situation. It was to be held in the Town Hall on January 27th (1906) and in preparation for it a preliminary meeting was held in the sitting-room of the hotel and a committee[2] appointed to prepare a synopsis of what was to be done.

This synopsis was presented to the thirty farmers who gathered in the Town Hall and a lengthy resolution was passed unanimously, setting forth the aims and objects of the prospective trading company. Everybody present undertook to subscribe for shares.

Justification for what they were attempting was found in "the widespread discontent existing among the grain growers of the West with conditions governing the marketing of their grain." It was pointed out also that the isolation of farmers from each other, their distance from the secondary and ultimate markets and their ignorance of the details of the grain business—that these things rendered them individually liable to suffer grave injustices, even without their knowledge and certainly without hope of remedy by individual efforts. The scientific selling of wheat was just as important to the farmer as the scientific growing of it and this scientific knowledge could be obtained only by actually engaging in the business at some important commercial centre where the methods of successful operators could be studied.

There was every reason to believe that a scheme which limited its activities at first to acquiring a seat on the Grain Exchange and doing a straight commission business, or at most a commission and track-buying business—that such a co-operative scheme stood an excellent chance of success. Without much financial risk, it should prove immediately profitable, afford protection from crooked practices and at the same time the shareholders could gain an insight into the whole grain business and thereby equip themselves for greater enterprises; it would not be long before they would be in a position to deal intelligently with their problems and pertaining legislation. Besides all this there was the possible piling up of a surplus revenue, over and above dividends, which could be turned to good account in uncovering conditions in Eastern Canadian and European markets and learning the best ways to meet those conditions.

For these reasons the grain growers of Sintaluta, Saskatchewan, went on record at this meeting in the little Town Hall as heartily recommending the formation of a joint stock company which was to be composed wholly of farmers and to be known as "The Grain Growers' Grain Company, Limited," with shares at twenty-five dollars each. It was stipulated that no one person could hold more than four shares, that even these were not to be transferable except by vote at annual meeting, and that no man could have more than one vote at annual meetings. With this single far-sighted stroke the possibility of control passing into the hands of any clique was removed.

In furtherance of the plans set forth a committee[3] was named to take charge of the preliminary organization work until relieved by the election of a provisional directorate at an organization meeting which it was hoped to hold at Brandon the following March. This committee was authorized to conduct a campaign for subscriptions in the meantime, printed receipts to be issued for the same.

Such was the scheme to which the farmers of Sintaluta subscribed to a man. Two hundred shares at Sintaluta to begin with and Sintaluta only one point in the West! The Committee went to work with enthusiasm. Ten dollars was spent in printing a prospectus. E. A. Partridge got a card and blocked out on it: GRAIN GROWERS' GRAIN COMPANY. This he hung in the window of Wilson's old store at Sintaluta, where a dollar was paid for the use of a desk. Here in the evenings would assemble William Hall, Al Quigley, William Bonner and E. A. Partridge to send out circulars and keep the pot boiling till enough funds were on hand to let Quigley out canvassing on board wages.

On February 28th the Manitoba Grain Growers' Association held their 1906 convention and as chairman of the committee appointed the year before to report upon the matter, E. A. Partridge again urged the advisability of establishing a company to handle the farmers' grain. By this time the plan had taken more definite shape and he pressed the claims of the proposed commission company with such logic and eloquence that besides having the committee's report adopted by the Association unanimously, he secured the interest of quite a few delegates. There was, nevertheless, much adverse criticism, not a little apathy and some levity.

"Let's hold a meeting of our own," suggested someone. The word was passed for all who were interested to meet in the council chamber of the Brandon Town Hall. Between twenty and thirty farmers attended this meeting and the plans of the Sintaluta men for a co-operative trading company were approved. It was decided to meet at the Leland Hotel in Winnipeg some time in March or April to formulate plans for an active campaign.

For two days those in attendance at this second meeting discussed the details of the undertaking. A great many different views were expressed, not all of them favorable. There were those who objected to the chosen name of the prospective company as being a handicap upon the Association movement in case the venture failed. The Sintaluta provisional directorate was allowed to stand and the canvassing committee was enlarged to include a number of Manitoba men who were to take the field for a stock canvass.

That stock-selling campaign will dodder through to the Final Memory of those who took part in it. The man who stood on the street-corner and offered ten-dollar gold-pieces for a dollar had no harder task. Blood from stones! Milk from dry cows! Although ten per cent. on each share was all the cash that was asked apparently some farmers were so hard up that if yarn were selling at five cents per mile, they couldn't buy enough of it to make a pair of mitts for a doodlebug!

"If you take four shares," admitted Al Quigley at his meetings, "I can't guarantee that you're not losing four times $2.50, which is ten dollars. But you lose that much when you draw a load of wheat up to the elevator anyway," he argued. "You might just as well let another ten go to see what's become of the first ten!"

"Huh!" grunted a skeptical farmer after one of E. A. Partridge's meetings. "This here thing's just a scheme for Partridge to feather his nest! You bet he didn't get any o' my money," he bragged. "Did he get you, Pete?"

"He did, Ben, an' I'll tell you why. This thing'll probably go bust; but I put a hundred into it. Supposin' I put a hundred in a horse an' he dies on me. Same thing, ain't it? I got to have horses to do farmin' an' I just go an' buy another one. I figure it's worth takin' a hundred-dollar chance on this thing to try her out."

Up in the northern part of Manitoba was one man who was meeting with pretty fair success. His name was Kennedy and his friends who knew him best called him "Honest John." His plan was simple—to start talking, talk for awhile, then keep right on talking.

"For God's sake, Kennedy, if $2.50 will stop you talking, here it is! We're sleepy!"

Then he would stop talking.

One by one the original canvassers dropped out of the field till almost the only one left besides E. A. Partridge was this hard-talking enthusiast up in the Swan River country who wound himself up for the night and tired them out—but got the money!



[1] See Appendix—Par. 4.

[2] See Appendix—Par. 5.

[3] See Appendix—Par. 6.



CHAPTER VII

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.



CHAPTER VIII

A KNOCK ON THE DOOR

Every man is worth just as much as the things are worth about which he is concerned.—Marcus Aurelius.

That big shipment to Buffalo, along with several others which were placed in the East with the market recovering, relieved the situation greatly. Also, the Scottish Co-Operative Wholesale Society's Winnipeg office decided to stand by the farmers' co-operative marketing venture and risked disapproval to buy some of the young company's wheat; not only that, but the farmers' company was allowed the regular commission of one cent per bushel on the purchase and the cheque paid in to the bank amounted to $58,298. This friendly co-operation the farmers were not quick to forget and they still speak of it with gratitude.

It began to look as if the struggling farmers' agency might worry through the winter after all. The strain of the past few months had told upon the men at the head of the young organization and especially upon the provisional President, who felt keenly the responsibilities of his office. Of a sensitive, high-strung temperament, E. A. Partridge suffered reaction to such a degree that at times he became almost despondent.

He began to talk of resigning. He felt that he had done quite a lot in getting things under way and that the hard fight which the farmers would have to wage before the trading company was established permanently would be carried on more successfully by a younger man. So frequently had his motives been questioned by suspicious farmers at organization meetings that he thought it would be better for the company if he occupied a less prominent place in the conduct of its affairs. The idea seemed to be prevalent that the organizers were enthusiastic for direct financial reasons. "Those fellows are talking for what they are going to get out of it," was an open accusation at times—a misconception so unjust that on several occasions Partridge had refuted it by pledging to resign from the presidency as soon as the company was on its feet.

"You men keep saying how much I've got out of this," he reproved in disheartened tones. "Gentlemen, I'll admit that I've got a little silver out of this. But it isn't in my pocket; it's in my hair!"

Partridge had no respect for a "quitter," however. He did not propose to take it easy until the farmers' agency did get into proper running order. Although his associates tried to dissuade him altogether from the course he had planned, the best he would promise was to remain at his post until the first annual meeting.

Immediately preceding the annual convention of the Manitoba Grain Growers' Association at Brandon in February a general meeting of Grain Growers' Grain Company shareholders was held with about two hundred represented. Until now the company had been operating under a provisional directorate only and it was the purpose of the meeting to complete organization. Since opening for business the shareholders had practically doubled in number and over 1,500,000 bushels of farmers' grain had been handled by their own agency, its ability to dispose of wheat at good figures being demonstrated in spite of deprivation of trading privileges on the Exchange. Putting a conservative estimate upon the holdings of the farmers' venture into co-operative marketing, its paid-up capital remained intact, its organization expenses paid—including the membership on the Grain Exchange—and there still was left a respectable margin of profit. To this showing the shareholders responded by electing the provisional directorate as directors for the balance of the year, adding two[1] to their number, while the same officers were left in charge.

In connection with the directorate it was pointed out that it might be better to have the trading company's directorate independent of the Association's directorate. The suggestion came from a tall young man who had a habit of thinking before he spoke and it was but one of many practical ideas which he had thrown out at the meeting.

"That young chap, Crerar, of Russell—makings of an able man there, Ed," commented the re-elected Vice-president later. "Know anything about him?"

"I know his father better than I do him," nodded the President thoughtfully. "I met his father in the old Patron movement years ago. I've got a great respect for his attitude of mind towards moral and economic questions. I like that young man's views, Kennedy; he seems to have a grasp of what this movement could accomplish—of the aims that might be served beyond the commercial side of it. In short, he seems to be somewhat of a student of economics and he has the education—used to be a school-teacher, I believe."

"Remember when I went up to Russell, during their Fair in October, to tell them what the Exchange was trying to do to us? Well, he was at the meeting and came over to my room at the hotel afterward," remarked Kennedy. "That's how interested he was. We had quite a talk over the whole situation. Told me he had an arrangement to buy grain for Graves & Reilly, besides running the Farmers' Elevator at Russell, and he offered to ship us all the grain that wasn't consigned to his firm. We've got quite a few carloads from him during the season."

"If there were only a few more elevator operators like him!" sighed Partridge. "When I was up there last July, selling stock, only eight men turned out," he recalled. "Crerar was one of them. I sold four shares. Crerar bought one. Say, he'd be a good man to have on the next directorate. How would it be if I wrote him a letter about it?"

But "Alex." Crerar laid that letter aside and promptly forgot it; he did not take it seriously enough to answer it. If there was anything he could do to help along a thing in which he believed as thoroughly as he believed in the grain growers' movement and the farmers' agency he was more than willing to do it; but executive offices, he felt, were for older and more experienced men than he.

As manager of an elevator in his home town, as buyer for a grain firm and as a farmer himself he had had opportunities for studying the situation from many angles. From the first he had followed the organization of the farmers with much interest and sympathy. He could not forget his own early experiences in marketing grain when the elevators offered him fifty-nine cents per bushel, nineteen cents under the price at the terminal at the time. The freight rate on his No. 1 Northern wheat he knew to be only nine cents per bushel and when he was docked a bushel and a half to a load of fifty bushels on top of it all he had been aroused to protest.

A protest from young Crerar was no mild and bashful affair, either. It was big-fisted with vigor. But when, with characteristic spirit, he had pointed out the injustice of the price offered and the dockage taken—the elevator man, quite calmly, had told him to go to the devil!

"There's no use going to the other elevators, for you're all alike," said young Crerar hotly.

"Then take your damned grain home again!" grinned the elevator operator insolently.

So the young farmer was compelled to sell his first wheat for what he could get. He was prepared to pay three cents per bushel on the spread, that being a reasonable charge; but although plenty of cars were available at the time, the spread cost him ten cents, a direct loss of seven cents per bushel. Besides this he was forced to see between twenty-five and thirty bushels out of every thousand appropriated for dockage, no matter how clean the wheat might be. That was in 1902.

It was hard to forget that kind of treatment. And when, later on, young Crerar accepted an offer of $75 per month to manage a Farmers' Elevator at Russell he bore his own experience in mind and extended every possible consideration to the farmers who came to him. The elevator company, as a company, did not buy grain; but as representative of Graves & Reilly, a Winnipeg firm, he bought odd lots and for this service received an extra fifty dollars per month.

Financially, it was better than teaching school. He had made ten dollars the first summer he taught school and to earn it he had walked three miles and a half each morning after milking the cows at home, arriving at the school soaking wet with dew from wading in the long prairie grass. And even at that, the trustees had wanted a "cheaper" teacher! A woman, they thought, might do it cheaper.

The young schoolmaster objected so earnestly, however, that the argument was dropped. He needed this money to assist in a plan for attending the Collegiate at Portage la Prairie. He taught the school so well that after studying Latin at Manitoba College in 1899, the trustees were glad to get him back the following year at a salary of $35 per month.

But milking cows at home night and morning and teaching school in between was not an exciting life at best for a young fellow ambitious to go farming. So at last he acquired a quarter-section of Hudson Bay Company land near Russell and took to "baching it" in a little frame shack.

In the fall some lumber was required for buildings and it so happened that along came an old chap with a proposition to put in a portable sawmill on a timber limit up in the Riding Mountains nearby. The old man meant business alright; he had the engine within ten miles of its destination before he was overtaken and the whole machine seized for debt. It looked as if the thousands of logs which the residents of the district had taken out for the expected mill had been piled up to no purpose. Crerar, however, succeeded in making a deal for the engine and, with a couple of partners, began sawing up logs. The little sawmill proved so useful that he ran it for four winters. When finally it was burned down no attempt was made to rebuild. Its owner was entering wider fields of activity.

After meeting Partridge and Kennedy his interest in the affairs of the farmers' little trading concern was quickened. He was much impressed with the fact that here were men so devoted to an idea—so profound in their belief that it was the right idea—that its advancement was their first and only thought at all times. Alex. Crerar liked that. If a thing were worth attempting at all, it was worth every concentration of effort. What these men were trying to accomplish appealed to him as a big thing, a bigger thing than most of the farmers yet realized, and it deserved all the help he could give it. The little agency was in the thick of a fight against tremendous odds and that, too, had its appeal; for to a natural born fighter the odds meant merely a bigger fight, a bigger triumph.

Accordingly, the young man lost no opportunity to boost things along. He was able to consign many carloads of grain in a season. If an idea occurred to him that he thought might be of service he sat down and wrote a letter, offering the suggestion on the chance that it might prove useful to the Executive. He did everything he could to build up the Company's business in the Russell district and when he returned home from the shareholders' organization meeting he kept right on sending in business, offering helpful suggestions and saying a good word when possible.

As the weeks went by and it became more apparent that they would wind up their first year's business satisfactorily, E. A. Partridge decided definitely that he would not accept another term as President. There were several good men available to succeed him; but he could not get it out of his head that the one man for the tasks ahead was the young fellow up at Russell. When he went there in June to speak at a Grain Growers' picnic he drew Crerar aside for an hour's chat, found out why he had not answered the letter suggesting that he play a more active part, and liked him all the better for his modesty.

Without saying anything of what he had in mind he returned to Winnipeg and sent the Vice-President to Russell to size up the situation quietly. When Kennedy got back he agreed with the President's choice of a successor.

The Company was holding its first annual meeting on July 16th and care was taken that the unsuspecting Crerar was on hand. The Vice-president button-holed him, explaining that he was wanted on the Board of Directors and in spite of his protest the President himself nominated him and he was elected promptly.

But when at the directors' meeting that night the President told the Board that he had been looking around for a young man to take charge and that T. A. Crerar was the man—when everybody present nodded approval, the man from Russell was speechless. If they had asked him to pack his grip and leave at once for Japan to interview the Mikado, he could not have been more completely surprised.

"Why, gentlemen" he objected, "I don't know anything about managing this company! I could not undertake it."

"What is the next order of business?" asked E. A. Partridge.

The shareholders were almost as much surprised as the newcomer himself when the name of the new president was announced. Many of them had never heard of T. A. Crerar. Had the young president-elect been able to see what lay ahead of him—

But, fortunately or unfortunately, that is one thing which is denied to every human being.



[1] See Appendix—Par. 7.



CHAPTER IX

THE GRAIN EXCHANGE AGAIN

"How many tables, Janet, are there in the Law?"

"Indeed, sir, I canna just be certain; but I think there's ane in the foreroom, ane in the back room an' anither upstairs." —Scotch Wit and Humor (Howe).

The efforts of the elevator faction of the Winnipeg Grain and Produce Exchange, apparently to choke to death the Grain Growers' Grain Company, had awakened the farmers of the West to a fuller realization of the trading company's importance to the whole farmers' movement. The Grain Growers of the three prairie provinces had been watching things closely and they did not propose to let matters take their course unchallenged. A second Royal Commission had been appointed by the Dominion Government in 1906, under the chairmanship of John Millar, Indian Head, Saskatchewan, to probe conditions in the grain trade and the farmers felt that certain evidence which had been taken by this Commission at Winnipeg justified their claims that they were the victims of a combine.

In the latter part of November (1906) the President of the Manitoba Grain Growers' Association, D. W. McCuaig, laid formal charges against three members of the Winnipeg Grain and Produce Exchange—charges of conspiring in restraint of trade—and when these gentlemen appeared in the Police Court it was evident that the Exchange intended to fight the case every inch of the way. The farmers discovered that the legal talent of Winnipeg had been cornered; for of the twenty lawyers to whom their solicitor, R. A. Bonnar, K.C., could turn for assistance in the prosecution every one appeared to have been retained by the defendants. The case involved such wide investigation that such assistance was imperative and finally the Grain Growers secured the services of ex-Premier F. W. G. Haultain,[1] of Saskatchewan.

The preliminary hearing in the Police Court proved to be most interesting and at times developed considerable heat among the battling legal lights. The defendants and their friends were so confident that commitment for trial would not be forthcoming at all that when the Magistrate decided that he was justified in so ordering, the grain men were shocked somewhat rudely out of their complacency.

Following up this preliminary victory, the Manitoba Grain Growers turned to the Manitoba Government and demanded that the charter under which the Grain Exchange operated be amended in certain particulars. The deputation from the Grain Growers met the Committee on Agriculture, the House being in session, and asked that the powers of the charter be limited so that business would be conducted on an equitable basis between buyer and producer. They asked that the Exchange be allowed to set no limit as to the number of persons who might enjoy its privileges, the question of the reputability of such persons to be decided by a majority of the members and that a seat purchased for the use of any firm or corporation should entitle that firm to the privileges of the Exchange even though registration of membership was under the name of an individual; also that the right to membership should include the right to delegate the trading powers to anyone in the employ of the firm or corporation.

The Grain Growers also asked that arbitrary interference with the business methods employed by individual firms or corporations and inquisitional inquiry into such be prohibited; also that the penalties and disabilities against those breaking the common rules and the maximum-price rule be abolished; that the right to define the eligibility of a person as an employee or fix a limit to salary in any way be denied; also that the expulsion of no member should be considered final until assented to by the Minister of Agriculture and that all by-laws should receive the assent of the Lieutenant-Governor in Council before becoming legal and binding.

The farmers asked that the Government have full access to the minute books, papers and accounts of the Grain Exchange and that provision be made for the public to have free access to a gallery overlooking the trading room during the sessions of the Exchange so that the transactions occurring might be observed and the prices disseminated through the public press. They further wished to see gambling in futures made a criminal offence.

Roderick McKenzie, Secretary of the Manitoba Association, told how the existing Grain Exchange had about three hundred members, of whom one hundred were active and fifty-seven of these active members represented the elevator interests. He said that the interests of the fifty-seven were looked after by twelve elevator men in the Exchange and that these twelve men agreed so well that they allowed one of their number to send out the price which should be paid for wheat for the day.

The Committee on Agriculture promised to consider the requests and later, when they met to do so, members of the Grain Exchange attended in force to present their side of the case. They claimed that a great deal of the trouble existing between the producer and the Grain Exchange was due to misconception of the Exchange's methods of action. The Exchange was only a factor in the grain business and under their charter they were allowed to make by-laws and regulations, these being necessary in such an intricate business as handling grain.

The wiring of prices to country points was done by the North-West Grain Dealers' Association, which had nothing to do with the Exchange but was a distinct and separate organization for the purpose of running elevators at country points as cheaply as possible. The highest possible prices were quoted and the plan was merely to avoid duplicate wiring.

The grain men claimed that it was impossible to handle the wheat of the country unless futures were allowed while to carry on its business properly the Exchange must have the power to say who should be members and otherwise to regulate its business. If the producer was getting full value for his wheat why should the Grain Exchange be interfered with?

The Exchange was willing that its membership should be extended. Their books always would be open to Government inspection in future and they would also repeal the rule regarding track-buyers' salaries. The press was already admitted and it would be found that when the new building which the Exchange was erecting was completed there would be a gallery for the use of the public during trading hours.

If the Legislature were to amend the charter, declared the Exchange's spokesman, the Exchange would demand that the charter be cancelled in toto and a receiver appointed to distribute the assets. The Exchange was tired of being branded thieves and robbers and they should be let alone to do their business. If this were not satisfactory, then they wished to be put out of business altogether.

The Grain Growers protested that it was not their desire to have the charter cancelled. They were not blind to the usefulness of the Exchange if it were properly managed and all they asked was that this organization be compelled to do what was right. The reason the Exchange had admitted the Grain Growers' Grain Company, the farmers claimed, was so that they could have it under discipline, being afraid of a combination of farmers in the interests of the producer. The farmers had lost confidence in the manipulations of the Exchange and wanted official protection.

The question of declaring deals in futures to be a criminal offence was outside provincial jurisdiction and the farmers withdrew that part of the request. They wished everything else to stand, however.

At this juncture a recommendation was made that a conference be held between the Government, the Grain Growers, the Exchange, reeves of municipalities, bankers, railroads, etc., for discussion of everything pertaining to the handling of wheat, including amendments to the Grain Exchange charter. The idea appealed to the Premier and before the Committee he pledged that the resolutions passed at the proposed conference would be converted into legislation.

After adopting the Agricultural Committee's report the Government did not act independently regarding the suggested charter amendments, as the farmers had hoped they would; instead, the whole thing was shelved, pending the suggested conference. When this conference was held in the latter part of February, however, the Government was duly impressed by the earnestness of the Grain Growers. Many strong speeches were made, including one powerful arraignment by J. W. Scallion, of Virden, whose energetic leadership had earned him the title: "Father of all the Grain Growers." The Government promised to amend the Exchange charter at the next session of the Legislature.

The activity of the Manitoba Grain Growers' Association was putting a new face upon the struggle of the Grain Growers' Grain Company for the restoration of their trading privileges on the floor of the Exchange. It demonstrated that the farmers could act in concert if occasion arose and that the Grain Growers' Associations were in accord with the principles for which the farmers' trading company was fighting. When, therefore, the Manitoba Association took a hand in the matter by officially urging the Manitoba Government to assist in restoring the Company to its former position on the Exchange in order that it could enjoy the rights of the seat for which it had paid, the Government was forced to take action.

It is doubtful if a Minister of the Crown in Manitoba ever had been called upon to make a more remarkable official statement than that which now appeared in print in connection with this matter. In the absence of Hon. R. P. Roblin it became the duty of the Acting-Premier to make it. Hon. Robert Rogers, then Minister of Public Works in the Manitoba Government, was the official head of the Government in the Premier's absence and in the Winnipeg Telegram of April 4th, 1907, the statement appeared as follows:

"The action of the Council of the Winnipeg Grain Exchange in refusing trading privileges to the Grain Growers' Grain Company is regarded by the Government as an arbitrary exercise of the powers conferred upon them (the Exchange) through their charter from the Legislative Assembly of Manitoba, and unless remedied by the Exchange, the Government will call the Legislature together during the present month for the purpose of remedying the conditions by Legislative amendments."

On April 15th the farmers' trading company was admitted once more to the full privileges of their seat on the Exchange.

The case against the three members of the Grain Exchange, who had been indicted under Section 498 of the Criminal Code, came to trial in the Assize Court a week later, on April 22nd, before Judge Phippen. It was now a matter for Crown prosecution and under direction of the Attorney-General, R. A. Bonnar, K.C., proceeded vigorously. The Grain Growers claimed that the Exchange had rules and regulations which had been carried out in restraint of trade and that in combination with the North-West Grain Dealers' Association there had been a practice of restricting the price to be paid for grain to certain daily figures, sent out by the parties conspiring.

Also, they expected to show that there had been a combine in existence between the elevator companies so that there was no competition in the buying of grain at certain points while there was an agreement that only a certain amount of street wheat would be received at the various elevators, the whole thing amounting to the restriction of wheat buying within certain limits fixed by the combination of the buyers who belonged to the combine—this to the consequent barring out of the small buyer from the trade. The latter, the Grain Growers argued, was prevented from buying by the rule which called for the payment of a salary to track buyers and prohibited the hiring of men on commission; there were points where the quantity of grain offered for sale was too limited to justify the payment of a fifty-dollar salary to the buyer.

Another point of complaint was that the Grain Exchange membership was restricted to three hundred, the members having agreed among themselves that no more seats be added although all present seats were sold and many more might be sold to eligible citizens.

Also, claimed the prosecution, there was a practical boycott of expelled members in that the members of the Exchange were forbidden to deal with expelled members; it was practically impossible to do business in grain in Western Canada unless connected with the Grain Exchange, one firm having experienced this difficulty.

The rule which barred the purchasing of grain on track during the hours of trading on the Exchange was, they would endeavor to show, an act in restraint of trade and the three men under indictment, the prosecution hoped to prove, had been active in the enactment of the alleged illegal by-laws of the Grain Exchange.

Prior to the enactment of these obnoxious laws of the Exchange the farmers had been sought by the buyers, whereas since the rules had been established the farmer must seek the purchaser. While the prices given out were fixed by the Grain Exchange in what was claimed to be open competition, the prosecution intended to show that it was a gambling transaction pure and simple, the price-fixing being nothing more than the guess of the men who acted for their own gain.

The trial lasted for a month, during which time a great many witnesses were examined—grain men and farmers—and the whole grain trade reviewed. The array of legal talent for the defence was very imposing and the case attracted much attention because, aside from its interest to the grain trade and the farming population, it promised to test the particular and somewhat obscure section of the Criminal Code under which the indictment was laid. At one stage of the proceedings the tension in court became so high and witnesses so unwilling that upon reproval by the court regarding his examination, leading counsel for the Grain Growers picked up his bag and walked out in protest, willing to risk punishment for the breach of etiquette rather than remain. After the Grain Growers' executive and counsel had conferred with the Government, however, the Grain Growers' counsel was prevailed upon to resume the case.

The finding of the court did not come as much of a surprise; for it was apparent before the trial ended that the section of the Code was considered ambiguous by the presiding Judge. The latter held that all restraints suggested by the evidence were agreed to, whether justifiably or not, as business regulations and before finding the defendants guilty these restraints must appear to be "undue," according to his reading of the section. It was necessary to respect the right of a particular trade or business or of a particular class of traders to protect their property by regulations and agreements so long as the public interests were not thereby "unduly" impaired; to the Judge's mind there was no question that the public had not been unduly affected.

After reviewing the case the Judge held that the gravamen of the whole charge hung upon the Commission Rule of the Exchange—that one cent commission per bushel should be made in handling grain; so that the price paid would be the price at the terminal (Fort William) less the freight and one cent per bushel commission, neither more nor less. Witnesses agreed that this was the lowest profit on which the business could live. Fort William prices were the highest the world's markets could justify. Owing to the presence in the statute of the word, "unduly," therefore, the Judge could not find the defendants guilty.

The Grain Growers were much dissatisfied with the decision; for they believed that they had adduced evidence to support their case and did not relish losing it on a technicality. Appeal was made, therefore; but the appeal court upheld the judgment of the assize court.

Apparently, deduced the farmers, this meant that men could conspire to create monopolies by driving all competitors out of business so long as they did not do it out of pure malice—so long as they justified it on the grounds of "personal interest"—so long as the things they did were not "malicious restraints, unconnected with any business relations of the accused!" In other words, if men merely conspired to advance their own business interests they committed no offence under the then existing law; to be liable to punishment they must be actuated by malice.

So that all the turmoil and talk, court proceedings and conferences, deputations and denunciations, evidence and evasions—all the excitement of the past few months practically left conditions just where they were. For the amendments to the Grain Exchange charter would not materialize till the Legislature met again next year.

But there was one spot where the clouds had rifted and the light shone through. The Grain Growers' Grain Company had won back its place on the Exchange. More and more the farmers began to pin their faith to their little fighting trading company "at the front." It appeared to be the concentration point for the fire of enemy guns. In all probability hostilities would break out anew, but the men in charge were good men—loyal and determined; they could be relied upon to take a full-sized whack at every difficulty which raised its head.