The first of these to threaten was on the way.



[1] Now Chief Justice Haultain.



CHAPTER X

PRINTERS' INK

The fewer the voices on the side of truth, the more distinct and strong must be your own.—Channing.

As the farmers saw it, there was no reason in the world why the bank should do what it did. The Company had closed its first year with net profits sufficient to declare a seven per cent. cash dividend and the profits would have been augmented greatly had it not been for the heavy interest payments which accrued on the unusual overdrafts imposed by special conditions. In spite of their extremely limited resources and the handicaps forced upon them, the volume of business transacted had exceeded $1,700,000 during the first ten months that the farmers had been in business; their paid-up capital had been approximately eleven thousand dollars of which over seven thousand had been required for organization outlay. The number of shareholders had nearly doubled during the ten months and everything was pointing to rapid advancement. The Company had been a good customer of the bank, which had received about $10,000 in interest. The security offered for their line of credit was unquestioned.

Yet the new directors had scarcely settled into place for the approaching busy season before, without warning, the bank notified them that they wished to close out the account.

When men set themselves up in business they expect to have to compete for their share of trade. The farmers did not expect to find their path lined with other grain dealers cheering them forward and waving their hats. They expected competition of the keenest. What they could not anticipate, however, was the lengths to which the fight might go or the methods that might be adopted to put their Agency out of business altogether.

Hitherto the grain grower had been in the background when it came to marketing and handling grain. He was away out in the country somewhere—busy plowing, busy seeding, busy harvesting, busy something-or-other. He was a Farm Hand who so "tuckered himself out" during daylight that he was glad to pry off his wrinkled boots and lie down when it got dark in order to yank them on again, when the rooster crowed at dawn, for the purpose of "tuckering himself out" all over again. It was true that without him there would have been no grain to handle; equally true that without the grain dealers the farmer would have been in difficulty if he tried to hunt up individual consumers to buy his wheat. The farmer interfering in the established grain trade was something new and it was not to be supposed that when the surprise of it wore off things were not liable to happen.

The farmer was quick to infer that the action of the bank in cutting off the trading company's credit without apparent cause was another move of the opposing forces. It was so palpably a vital spot at which to strike.

This time, however, the threatening cloud evaporated almost as soon as it appeared. The manager, W. H. Machaffie, resigned and assumed the management of another bank. He was a far-sighted financier, Mr. Machaffie, and almost the first account he sought for the Home Bank was that of the Grain Growers' Grain Company. The Home Bank was new in the West and in the East it had been an old loan company without big capitalistic interests, its funds being derived mostly from small depositors; but while at that time it was not among the wealthiest banking institutions of the country, it was quite able to supply full credit facilities.

The opportunity for the farmers' company and the young bank to get together to mutual advantage was too good to be overlooked. Under the banking laws of Canada valuable special privileges are granted in view of the important part which the banks play in the country's development. Government returns indicate that the greater part of the business done by banks is carried on upon their deposits. If the working people and the farmers, as is generally accepted, form the majority of these depositors of money in banks, then were not many loans which went to monopolistic interests being used against the very people who furnished the money? If the farmers could acquire stock in a bank of their own, would they not be in a position to finance their own requirements rather than those of corporations which might be obtaining unreasonable profits from the people at large? Such an investment would be safe and productive at the same time that it strengthened the farmers' hands in their effort to do their own trading.

With all this in view the directors of the Grain Growers' Grain Company made a heavy investment in Home Bank stock and were appointed sole brokers to sell a large block of the bank's stock to Western farmers, working men and merchants. On the sale of this they were to receive a commission which would, they expected, be enough to cover the expense of placing the stock. As the business expanded the Company would be assured of an extended line of credit as it was needed.

And the business certainly was expanding. Although the prospects for the new crop were not as bright as they had been the year before, a substantial increase in the amount of grain they would handle—owing to the increase in the number of shareholders—was anticipated by the management. They were not prepared, however, for the heavy volume that poured in upon them when the crop began to move; it was double that of their first season and the office staff was hard pressed to keep pace with the rising work. There now seemed no reason to believe that the success of the farmers' venture was any longer in doubt so far as the commercial side of it was concerned.

But the President and directors had in mind a much broader objective. It was not enough that the farmer should receive a few more cents per bushel for his grain.

"We must bear clearly in mind," warned T. A. Crerar, "that there are still those interests who would delight in nothing more than in our failure and destruction. A great many improvements require yet to be made in our system of handling grain. The struggle for the bringing about of those reforms is not by any means accomplished. As a great class of farmers, composing the most important factor in the progress and development of our country, we must learn the lesson that we must organize and work together to secure those legislative and economic reforms necessary to well-being. In the day of our prosperity we must not forget that there are yet many wrongs to be righted and that true happiness and success in life cannot be measured by the wealth we acquire. In the mad, debasing struggle for material riches and pleasure, which is so characteristic of our age, we often neglect and let go to decay the finer and higher side of our nature and lose thereby that power of sympathy with our fellows which finds expression in lending them a helping hand and in helping in every good work which tends to increase human happiness and lessen human misery. In keeping this in view we keep in mind that high ideal which will make our organization not alone a material success but also a factor in changing those conditions which now tend to stifle the best that is in humanity."

An important step towards the upholding of these ideals was now taken by the directors. The President and the Vice-President happened to be in a little printshop one day, looking over the proof of a pamphlet which the Company was about to issue, when the former picked up a little school journal which was just off the press for the Teachers' Association.

"Why can't we get out a little journal like that?" he wondered. "It would be a great help to our whole movement."

About this time the Company was approached by a Winnipeg farm paper which devoted a page to the doings of the grain growers.

"If you'll help us to get subscriptions amongst the farmers," said the publisher, "we'll devote more space still to the doings of the grain growers."

"But why should we build up another man's paper for him?" argued the President. "Why can't we get out a journal for ourselves?"

The idea grew more insistent the longer it was entertained, and although at first E. A. Partridge, who was on the directorate, was opposed to such a venture, he finally agreed that it would be of untold assistance to the farmers if they had a paper of their own to voice their ideals. The logical editor for the new undertaking was E. A. Partridge, of course, and accordingly he began to gather material for the first issue of a paper, to be called the Grain Growers' Guide.

Partridge had a few ideas of his own that had lived with him for a long time. On occasion he had introduced some of them to his friends with characteristic eloquence and the eloquence of E. A. Partridge on a favorite theme was something worth listening to; also, he gave his auditors much to think about and sometimes got completely beyond their depth. It was then that some of them were forced to shake their heads at theories which appeared to them to be so idealistic that their practical consummation belonged to a future generation.

In connection with this new paper it was Partridge's idea to issue it as a weekly and as the official organ of the grain growers' trading company instead of the grain growers' movement as a whole. He thought, too, that it would be advisable to join hands with The Voice, which was the organ of the Labor unions. The President and the other officers could not agree that any of these was wise at the start; it would be better, they thought, to creep before trying to walk, to issue the paper as a monthly at first and to have it the official organ of the Grain Growers' Associations rather than the trading company alone.

This failure of his associates to see the wisdom of his plan to amalgamate with the organ of the Labor unions was a great disappointment to Partridge; for he had been working towards this consummation for some time, devoutly wished it and considered the time opportune for such a move. He believed it to be of vital importance to "the Cause" and its future. In October he had met with an unfortunate accident, having fallen from his binder and so injured his foot in the machinery that amputation was necessary; he was in no condition to undertake new and arduous duties in organizing a publishing proposition as he was still suffering greatly from his injury. On the verge of a nervous breakdown, it required only the upsetting of the plans he had cherished to make him give up altogether and he resigned the editorship of the new magazine after getting out the first number.

"I'm too irritable to get along with anybody in an office," he declared. "I know I'm impatient and all that, boys. You'd better send for McKenzie to come in from Brandon and edit the paper."

This suggestion of his editorial successor seemed to the others to be a good one; for Roderick McKenzie had been Secretary of the Manitoba Grain Growers' Association from the first and had been a prime mover in its activities as well as wielding considerable influence in the other two prairie provinces where he was well known and appreciated. He was well posted, McKenzie.

So the Vice-President wired him to come down to Winnipeg at once.

Yes, he was well posted in the farming business, Rod. McKenzie. He had learned it in the timber country before he took to it in the land of long grass. At eleven years of age he was plowing with a yoke of oxen on the stump lands of Huron, helping his father to scratch a living out of the bush farm for a family of nine and between whiles attending a little log schoolhouse, going on cedar-gum expeditions, getting lost in the bush and indulging in other pioneer pastimes.

Along in 1877, when people were talking a lot about Dakota as a farming country, McKenzie took a notion to go West; but he preferred to stay under the British flag and Winnipeg was his objective. A friend of his was running a flour-mill at Gladstone (then called Palestine), Manitoba, and young McKenzie decided to take a little walk out that way to visit him. It was a wade, rather than a walk! It was the year the country was flooded and during the first thirty days after his arrival he could count only three consecutive days without rain. In places the water was up to his hips and when he reached the flour-mill there was four feet of water inside of it.

Such conditions were abnormal, of course, and due to lack of settlement and drainage. After helping to build the first railway through the country Roderick McKenzie eventually located his farm near Brandon and so far as the rich land and the climate were concerned he was entirely satisfied.

Not so with the early marketing of his grain, though. He disposed of two loads of wheat at one of the elevators in Brandon one day and was given a grade and price which he considered fair enough. When he came in with two more loads of the same kind of wheat next day, however, the elevator man told him that he had sent a sample to Winnipeg and found out that it was not grading the grade he had given him the day before.

"The train service wouldn't allow of such fast work, sir," said Roderick McKenzie. "I suppose you sent it by wire!" He picked up the reins. "That five cents a bushel you want me to give you looks just as good in my pocket as in yours."

So he drove up town where the other buyers were and three of them looked at the wheat but refused to give a price for it. One of them was a son of the first elevator man to whom he had gone and, said he:

"The Old Man gave you a knockdown for it, didn't he?"

"Yes, but——"

"Well, we're not going to bid against him and if you want to sell it at all, haul it back to him."

As there was nothing else he could do under the conditions that prevailed, McKenzie was forced to pocket his loss without recourse.

With such experiences it is scarcely necessary to say that when the grain growers' movement started in Manitoba Roderick McKenzie occupied a front seat. He was singled out at once for a place on the platform and was elected Secretary of the Brandon branch of the Association. At the annual convention of the Manitoba locals he was made Secretary of the Provincial Association, a position which he filled until 1916, when he became Secretary of the Canadian Council of Agriculture.

His activities in the interests of the Association have made him a well-known figure in many circles. From the first he had been very much in favor of the farmers' trading company and only the restrictions of his official position with the Association had prevented him from taking a more prominent part in its affairs. As it was, the benefit of his experience was frequently sought.

McKenzie was plowing in the field when the boy from the telegraph office reached him with John Kennedy's message.

"They don't say what they want me for; but I guess I'm wanted or they wouldn't send a telegram—Haw! Back you!" And like Cincinnatus at the call of the State in the "brave days of old," McKenzie unhitched the horses and leaving the plow where it stood, made for the house, packed his grip and caught the next train for Winnipeg.

John Kennedy met him at the station.

"What's wrong?" demanded the Secretary of the Manitoba Grain Growers' Association at once. "I came right along as soon as I got your wire, Kennedy. What's up now?"

"The editor of the Grain Growers' Guide. Partridge wants you to take his place."

"ME? Why, I never edited anything in my life!" cried McKenzie, standing stock still on the platform.

"Pshaw! Come along," laughed Kennedy reassuringly. "You'll be alright. It ain't hard to do."



CHAPTER XI

FROM THE RED RIVER VALLEY TO THE FOOTHILLS

It ain't the guns or armament nor the funds that they can pay, But the close co-operation that makes them win the day; It ain't the individual, nor the army as a whole, But the everlastin' team-work of every bloomin' soul! —Kipling.

At one of the early grain growers' conventions it had been voiced as an ideal that there were three things which the farmers' movement needed—first, a trading company to sell their products (with ultimately, it might be, the cheaper distribution of farm supplies); second, a bank in which they could own stock; third, a paper that would publish the farmers' views. So that if the new Executive of the Company had done little else than break ground for better financial arrangements and a farmers' own paper, their record for the year would have shown progress.

But when the second annual meeting of the Company was held they were able to show that the volume of farmers' grain handled was almost five million bushels, double that of the first year, while the net profits amounted to over thirty thousand dollars. The number of farmer shareholders had increased to nearly three thousand with applications on file for another twelve hundred and a steady awakening of interest among the farmers was to be noticed all over the West. All this in spite of the general shortage of money, a reduced total crop yield and the keenest competition from rival grain interests.

It had been apparent to the directors that if the business grew as conditions seemed to warrant it doing, it would require to be highly organized. Bit by bit the service to the farmer was being widened. For instance, the nucleus of a Claims Department had been established during the year; for under the laws governing the Canadian railway companies the latter were required to deliver to terminal elevators the amount of grain a farmer loaded into a car and to leave the car in a suitable condition to receive grain. The official weights at the terminal were unquestioned and if a farmer could furnish reasonable evidence of the quantity of grain he had loaded, any leakage in transit would furnish a claim case against the railway. During six months the farmers' company had collected for its shippers nearly two thousand dollars in such claims, a beginning sufficient to illustrate that the Company was destined to serve the farmers in many practical ways if they would only stand behind it.

IF the farmers would stand behind it! But would they? It was a question which was forever popping up to obscure the future. Many tongues were busy with inuendo to belittle what the farmers had accomplished already and to befog their efforts to advance still farther. At every shipping point in the West industrious little mallets were knocking away on the Xylophone of Doubt, all playing the same tune: "Just Kiss Yourself Good-Bye!" No farmers' business organization ever had been a success in the past and none ever could be. This new trading venture was going to go off with a loud bang one of these fine days and every farmer who had shipped grain to it would stand a first-class chance of losing it. You betcha! The Grain Growers' Associations mightn't be so bad; yes, they'd done some good. But this concern in the grain business—run by a few men, wasn't it? Well, say, does a cat go by a saucer of cream without taking a lick? "Farmers' company" they called it, eh? Go and tell it to your grandmother!

The worst of it was that in many localities were farmers who believed this very suggestion already—that the Company belonged to the men at the head of its affairs. Discouraged by past failures and without much respect for the dignity of their occupation, their attitude towards the Company was almost automatic. That it was a great co-operative movement of their class, designed to improve economic and social conditions, was something quite out of their grasp. And upon these strings, already out of tune, elevator men strummed diligently in an effort to create discord.

From the first it had been like that. Friends who would speak a good word for the struggling venture at the time it was most needed were about as scarce as horns on a horse. On the other hand the organizers ran across "the knockers" at every turn. A traveller for one of the milling companies, for instance, happened to get into conversation on the train with E. A. Partridge one day. The latter was a stranger to him and he naturally supposed he was talking to "just a farmer." The subject of conversation was the grain trade and this traveller began to make a few remarks about the "little grain company" that had started up.

"What about that company?" asked Partridge with visible interest. "I've heard a lot about it."

"Oh, it's just a little dinky affair," laughed the traveller. "They've got a little office about ten feet square and they actually have a typewriter! They get a car or two a month. Don't amount to anything."

For a full hour he kept the chutes open and filled his interested auditor with all the latest brands of misrepresentation and ridicule. He explained why it was that the farmers' effort was nothing but a joke and how foolish it would be for any farmer to send business to it. He was a good salesman, this traveller, and he was sure he had "sold" this rather intelligent hayseed when he got to the end of his talk and his station was called.

"I've really enjoyed this," assured Partridge gratefully. "As a farmer I'm naturally interested in that sort of thing, you know, and I've got a particular interest in that little grain company. My name is Partridge and I only want to say——"

But the traveller had grabbed his club bag and was off down the aisle as fast as he could go. Salesmanship is punctuated by "psychological moments" and good salesmen always know when to leave. He did not look around. His ears were very red.

It was funny. No, it wasn't, either! Lies about the Company, thought the then President, would travel a thousand miles before the Truth could get its boots on! It was not a matter for amusement at all.

As the "little dinky affair" became a competitor of increasing strength in the grain trade the efforts of a section of the grain men, particularly the elevator interests, to discredit it among the farmers became more and more marked. While the farmers' company was not openly attacked, influences nevertheless were constantly at work to undermine in roundabout ways. The elevator men were in a strong position to fight hard and they pressed every advantage. At practically every shipping point they had agents whose business it was to secure shipments of grain in car lots as well as buying on street. Many of these men were very popular locally and as individuals were good fellows, well liked by their farmer friends. A rebate on the charges for loading grain through an elevator or the mere fact that letting the elevator have it saved the bother of writing a letter—these were excellent inducements to the unthinking farmer, and when added to this was the element of personal acquaintance with the buyer, it was hard to refuse.

For your farmer is a man of simple code. He is not versed in subterfuge and diplomacy. He takes words at their face value, unless he distrusts you, just as he hands them out himself. He lives a clean, honest life and earns his money. If in some cases his viewpoint is narrowed by treading much in the same furrows, it is at least an honest viewpoint in which he really believes. And one of the things in which the average farmer prides himself is that he will "never go back on a friend." Even a red Indian would not do that!

In selling to the elevator these same farmers probably had no intention of unfriendliness to the farmers' trading company. They hoped to see it succeed but did not appreciate their individual responsibility in the matter or realize that while their own personal defection represented a loss to the Company of just one shipment, the loss became vital when multiplied many times all along the line. And the Company had no agent on the ground to argue this out, face to face.

Although many requests for the appointment of such local agents reached the office, the directors decided that it would be poor policy as it would mean appointing agents everywhere and abuses might develop. It would be easy under such a system for an impression to get abroad that favoritism was being shown in appointments; jealousies and disappointments might be the result. On the other hand, one of the greatest sources of strength which the Company could foster would be a sense of individual responsibility among its farmer shareholders—each shareholder an agent for his own grain and that of his non-member neighbors, each doing his part to keep down the handling cost of his grain and build up his own company. In the meantime it were better to lose some grain than run the risk of disrupting the whole movement—to let the elevators enjoy their advantage until it became a nullity by education of the farmer himself.

Such educational work was already a regular part of the routine. Pamphlets and circulars were issued from time to time, dealing with prevailing conditions, advocating amendments to the Grain Act, etc., and explaining the need for government ownership of elevators. The feeling that the Provincial governments should acquire and operate all storage facilities in the way of elevators and warehouses was spreading rapidly among farmers and business men.

In the second year the Grain Growers' Grain Company began to export several small shipments, more for the sake of the experience than anything else. A very extensive line of credit was necessary to go into the export business and, until the arrangement with the Home Bank developed this, their hands were tied in the matter of exporting for themselves. Their third year in business, though, found their financial relations so improved that they were able to do a considerable and profitable business in the exporting of grain, thereby advancing definitely towards one objective which the farmers had had from the first. Most of the grain which the Company handled in this way was sold to exporters in the Eastern States and in Eastern Canada, this method being found more satisfactory than selling direct to buyers in the Old Country at this time.

In spite of everything, therefore, things were swinging the farmers' way. The whole Farmers' Movement was expanding, solidifying, particularly in Alberta, which for so long had been primarily a cattle country. Grain production was now increasing rapidly in this Province of the Foothills and Chinooks and the future shipment of Alberta grain to the Pacific Coast and thence via the new Panama Canal route was a live topic. Owing to special conditions prevailing in the farthest west of the three Prairie Provinces the Grain Growers' movement there did not solidify until 1909 into its final cohesion under the name, "United Farmers of Alberta."

Prior to this the farmers of Alberta had been organized into two groups—the Canadian Society of Equity and the Alberta Farmers' Association. The first had its beginnings among some farmers from the United States—mostly from Nebraska and Dakota—who settled near Edmonton and who in their former home had been members of the American Society of Equity. These farmers in 1904-5 organized some branches of the American Society after arrival in the new land and, becoming ambitious, formed the Canadian Society of Equity with the idea of owning and controlling their own flour and lumber mills and what not. For this Purpose they got together a concern called "The Canadian Society of Equity, Limited," and bought a timber limit, so called. They secured shareholders in all parts of Alberta and the concern went to smash in 1907, this unfortunate failure making doubly shy those farmers who had been bitten.

Meanwhile, in 1905, the members of the local branch of the American Society of equity which had been established at Clover Bar had reached the conclusion that the work of the Society did not meet the requirements of conditions in Alberta and that it was not desirable to have the farmers of the province organized into two camps—the Society of Equity on one hand and the Alberta branches of the Territorial Grain Growers' Association on the other. Especially now that the Territories were to be established into the Provinces of Saskatchewan and Alberta, it was desirable that reorganization and a change of name take place. Accordingly the Clover Bar branch of the American Society of Equity and the Strathcona branch of the Territorial Grain Growers' Association got their heads together on a proposal to amalgamate into one farmers' organization under the name, Alberta Farmers' Association.

Under the impression that this was a veiled scheme of the Grain Growers to swallow their organization whole, the Society of Equity turned down the idea of amalgamation. The Clover Bar farmers withdrew from the Society and joined the Strathcona Grain Growers in forming the nucleus of a provincial farmers' association as planned.

Owing to the mixed nature of Alberta's agricultural population and to the general distrust of farmers' organizations the new Alberta Farmers' Association faced a difficult situation. But the principles laid down by their leaders were so fair, so sane and broad-minded, that in two years the Association became an influence in almost every line of trade in the province. They organized a very successful seed fair, a feature of which was a meeting to discuss improvement of the market for live stock, especially hogs; this resulted in the appointment of a Pork Commission. At their convention in 1906 the Association took stand on such important matters as the special grading of Alberta Hard Winter Wheat, the establishment of a terminal elevator at the Pacific Coast, of a pork-packing and beef-chilling plant by the Provincial Government, etc. In the discussion of everything affecting the welfare of the farmers the Association played an important part and it was at their request that the Provincial Government sent an agent to investigate the markets of British Columbia with the idea of closer relations.

A second attempt to amalgamate with the Canadian Society of Equity, which had succeeded the American Society, had fallen through and there were still two farmers' organizations in the Province of Alberta. However, with the progress being made with the Provincial Government in connection with the pork-packing and beef-chilling plant and with the Dominion Government in regard to government ownership of terminal elevators, the farmers as a whole began to see the need of closer union. Such wide measures as a system of government-owned internal elevators were bringing the farmers of all three Western provinces into closer conference and in 1908 the feeling in favor of amalgamation of all Alberta farmers into one organization began to crystallize.

Finally in September a conference was held between representatives of the Alberta Farmers' Association and the Canadian Society of Equity. The constitution drafted at this conference was submitted to the annual conventions of both bodies at Edmonton on January 13th, 1909. The following morning the delegates of the Canadian Society of Equity marched from their hall to the convention of the Alberta Farmers' Association and amid great cheers the two became one under the name, United Farmers of Alberta, with "Equity" as their motto, and with a strong coalition directorate.[1]

Until now each of the organizations had had its separate official organ; but on amalgamation these were dropped and the Grain Growers' Guide adopted as the official organ for Alberta. First published under the auspices of the Manitoba Grain Growers' Association, the Guide now represented the farmers' movement in all three provinces. The wisdom of its establishment was being proved steadily. Its circulation was gathering momentum with every issue. It was now coming out as a weekly and its pages were filled with valuable information for the farmer on every subject dealing with the marketing of his produce. Also it was proving a wonderful educator on such large questions as government ownership of elevators, the tariff, control of public service corporations and so forth. The farmer was getting information which he had never been able to obtain before and he was getting it without distortion, uncolored by convenient imagination, plain as Fact itself.

An up-to-date printing plant had been installed to print the Guide and do a general job-printing business, and this was organized as a separate company under the name of the "Public Press, Limited."

In addition to all the difficulties which usually attend the building of a publishing enterprise to success, the farmers' own journal had to face many more which were due to the special nature of its policies. Manufacturers who disapproved of its attitude on the tariff, for instance, refused for a long while to use its advertising columns. Each year as the Guide's struggle went on there was an annual deficit and had it not been for the grants with which the Grain Growers' Grain Company came to its rescue, the paper must have gone under. For this financial assistance the farmers' trading company got no return except the satisfaction of knowing that the money could not be spent to better advantage in the interests of Western farmers.

With the rapid developments in Alberta and the probable future shipment of Alberta grain via the Panama Canal route, branch offices were being opened at Calgary by Winnipeg grain dealers. Not to be behind in the matter of service, the farmers' company followed suit. A Seed Branch Department to supply good seed grain was another improvement in service and the farmers by this time were taking a keen interest in their trading organization.

When the third annual meeting came around, there was no longer any doubt that a farmers' business organization could succeed—that this venture of the Grain Growers was not going to go off with a loud bang—at least, not yet.

But, as the President remarked, it seemed that they had no more than touched the fringe of what remained to be accomplished. One of the immediate questions pressing for solution, he considered, was government ownership of elevators.

"Our Company's experience has demonstrated completely," he said, "that our grain marketing conditions can never reach a proper basis as long as the elevators necessary for that marketing are allowed to remain in private hands for private gain. The Grain Growers' Associations are the one thing above everything else that stands between the farmer and the power of merciless corporations. They have undoubtedly been the greatest shield this Company has had since its organization; they have helped the Company to prove, far beyond any question of doubt, the advantages of co-operation."

And what had the elevator men to say about all this? Surely these farmers were becoming a menace! At the present rate of speed another three years would see them in control of the grain business and was that good for the grain business? Was it good for the farmer? The elevator men did not think so.

Strangely enough, they were not worrying greatly about government ownership. They were more interested in the fact that the volume of grain which had flowed so faithfully all these years was being split up by all these commission men—these hangers-on who invested little or no capital but necked right up to the profits of the trade as if they owned the whole business!

Trouble was brewing on the Winnipeg Grain Exchange—had been for some time.

Then one day word reached the office of the Grain Growers' Grain Company that by a majority vote the Grain Exchange had suspended, for a period of one year, the Commission Rule under which grain was handled.

Thus did things come to a showdown.



[1] See Appendix—Par. 10.



CHAPTER XII

THE SHOWDOWN

It's scarcely in a body's power Tae keep at times frae being sour Tae see how things are shared. —Robert Burns.

A fight was on between the elevator interests and the commission merchants of the Winnipeg Grain Exchange—a fight for existence. For, with the Commission Rule of the Exchange eliminated, those firms which handled grain on a straight commission basis would be forced to meet the competition of the elevator buyers and the chances were they would be forced to handle grain at a loss; the best they could hope for would be to cover their costs.

It will be remembered that this Commission Rule, established in 1899, was that a charge of one cent commission per bushel should be made for handling grain and that all members of the Exchange dealing in grain must show that the price paid was the price at the terminal (Fort William) less the freight and one cent per bushel commission. This commission could be neither more nor less than one cent; for at that time it was felt that business could not be done, offices maintained and an efficient and reliable service given for less. It was a charge which both farmers and grain men considered fair and reasonable.

The trouble in the Exchange started when the commission men claimed the right to have country agents and to pay them on a commission basis of one-quarter cent per bushel. The elevator companies were able to buy at elevator points through their salaried representatives but the commission men were prohibited from having country agents except on a salary basis, and this they could not afford, handling grain on commission.

For some years past there had been considerable dissatisfaction among Exchange members in regard to the operation of the Commission rule, doubt being entertained that all the members were keeping good faith in the collection of the full commission charge of one cent to non-members of the Exchange and one-half cent per bushel to members on country consigned and purchased grain. Although the Council of the Exchange had held many special meetings in an endeavor to find a remedy and to investigate the charges, the results had not been very marked owing to the difficulty of securing the evidence to support such charges.

This was given as a reason for the doing away with the one cent commission restriction altogether for a trial period of one year. Thereby the trade was put on a "free for all" basis, as the President of the Exchange then in office pointed out. It meant that Exchange members were "enabled to pay owners of grain in the country any price they desired without regard to actual market values as regularly established on the floor of the Exchange." It was the personal opinion of the President that to preserve stable markets with uniformity and discipline amongst Exchange members a commission rule was absolutely necessary and he predicted that perhaps in a short while, after the suspension of the Commission Rule had been given a fair trial, the Exchange might see its way clear to rescind the suspension.

"Just so," nodded the commission men among themselves. "The logical and certain result will be the weeding out of the commission men and track buyers, who give practically the only element of competition that exists in the trade! One of the curses of our Canadian commercialism is the strong tendency to monopoly and this looks like an effort to create an absolute elevator monopoly of the grain trade, which is the staple industry of the country."

But if the small dealers on the Exchange were aroused, what about the farmers' trading company? They did business on a commission basis only and with the elevators offering to handle the farmers' grain for nothing, or next door to it, what would happen? Would the farmer be "unable to see past his nose," as was predicted? Would he forget the conditions of the early days and grab for a present saving of five or ten dollars per car? If the farmers did not stand together now, they were licked! It was a showdown.

There was only one thing to do—take a referendum of the shareholders as to the basis on which they wished the year's business handled. The Board of Control of the Grain Growers' Grain Company therefore issued the following circular letter, which was mailed to every farmer shareholder:

"This matter we now bring to your notice is the most important yet.

"At a meeting of the Grain Exchange, held a few days ago, the Commission Rule was suspended for a year. This means that there is no fixed charge for handling grain, and any company or firm can, if they wish, handle car lots for nothing. How did this come about? The Elevator Companies did it with the aid of Bank Managers and other Winnipeg men outside of the Grain Trade, who hold seats on the Exchange, and voted with them. The intention of these Elevator Companies is to handle all grain for 1/2c. per bushel or for nothing in order to take it away from the Commission Men, who have no elevators, and especially to keep it away from the Grain Growers' Grain Company.

"The Elevator Companies can handle farmers' cars for nothing and still not lose anything. How? In four ways—

"1st. They all buy street grain and the immense profits they make on this will make up for any loss they have in handling cars for nothing.

"2nd. The dockage they get on street grain and on car lots passed through their elevators helps them.

"3rd. The charges on the cars loaded through their elevators helps them.

"4th. When they get your car it is sent to their own terminal elevator, and they earn the storage on it there which is very profitable.

"The commission man, such as ourselves, has none of these things to fall back on. His profit is what is left out of the cent a bushel commission after all expenses such as rent, taxes, insurance, wages for office help, telegrams, telephone, etc., are paid.

"The Elevator Combine know this. They know the weakness of the commission dealers' position and the strength of their own, and knowing it, deliberately cut out the commission and will offer to handle the farmers' grain for nothing in order to put the only opposition they have out of business. And mark you! this is aimed at our company more than any other, though we believe they are after all commission dealers. Some of them have said so. They want to kill us and they think they have at last found a way. Their dodge is simple. By handling cars for half a cent or nothing, they are going to bribe the farmers and our own shareholders to send cars away from us, and by keeping grain from us help to kill us and plant us that deep we shall never come up again.

"In this way they hope to 'rule the roost' and get back the good old days they had ten or twelve years ago.

"Can they succeed? It depends on the men who ship the grain. If they support the combine by giving the elevators (or the commission houses that work for the elevators under a different name) their cars, they may soon expect to find themselves in a worse position than they have ever been before.

"As a prominent commission man said the other day, 'The elevator companies are asking the farmers to help at their own funeral.' It is an anxious time for our own company. We have shown that with anything like fair play it may succeed. We have been growing stronger and, we believe, doing some good. Are our shareholders and friends going to take the bribe that is meant to put us out of business? We hope and believe not. For this reason we are taking a referendum vote of our shareholders."

It was at this crisis that the Grain Growers' Guide had an opportunity of demonstrating its value to the farmers as a fighting weapon. It seized the cudgels and waded right into the thick of the controversy without fear or favor. It came out flat-footed in its charges against the elevator interests and emphasized the warning of the Company in language that carried no double meaning.

"We have no quarrel with the Winnipeg Grain Exchange as an Exchange," said the Guide. "It is a convenience for gathering reports from other parts of the world, market conditions, and for drafting rules that facilitate and simplify business dealings.

"As we have often pointed out, however, the Exchange is being used by the Elevator Interests that seem to dominate it, to further their own particular ends with the result that the nefarious methods of the Elevator Trust bring suspicion and condemnation upon the Exchange and its members.

"The demand for the Royal Grain Commission arose from the methods pursued by the Elevator Companies in dealing with the farmers at country points. The pooling of receipts at country points is not forgotten by the farmers; heavy dockage and unfair grading and low prices paid when the farmers were compelled to sell and could not help themselves, are also not forgotten.

"Every injustice and disturbance in the trade that has taken place since grain commenced to be marketed in Manitoba, can be traced to the Elevator Monopoly.

"The farmers of this country owe nothing to the Elevator Trust and we have confidence enough in them to believe that they will not be bought over by them now. The Commission Men and Track Buyers certainly owe nothing to this trust either. They have helped in the past to carry the suspicion and sin arising from its methods and it commences to look as if they were getting tired of carrying the load."

Column after column of such plain talk was given place in the Guide week after week, together with reports of Grain Exchange proceedings, interviews with commission men and elevator men, pronouncements of Grain Exchange officials and comment upon pamphlets circulated amongst the farmers by the North-West Grain Dealers' Association, etc. Everything having a bearing upon the situation was brought to light and analyzed. Letters from farmers throughout the country were published as fast as they reached the editor's desk, and they were coming pretty fast, about as fast as the mail could bring them.

They were reaching the office of the farmers' trading company by the bagful. The Company had asked three definite questions of the farmers in connection with the commission to be charged on grain shipped to the Company—whether or not the old rate should be maintained in spite of the action of the Exchange; whether the commission should be reduced; whether the whole matter should be left to the discretion of the directors. The letters poured in by the thousand and only two per cent. of the farmers recommended any reduction in the rates; of the remainder, seventy per cent. were in favor of the Company maintaining the one cent commission and the other twenty-eight per cent. were willing to abide by the decision of the directors.

The comments contained in some of these letters revealed strong feeling. Many farmers were ready to pay two cents commission per bushel if necessary, rather than sell to "the monopolies."

"I will pledge myself to ship every bushel of grain I grow to the Farmers' Company," wrote one, "even though the directors found it necessary to charge me five cents per bushel, coin."

"No, they cauna draw the blinds ower the daylights o' a Scotchman," assured one old son of the heather. "I am verra pleased to leave the hale concern in your hands as I do believe you are thoroughly plumb and always square."

With this encouragement the directors announced that they would continue to charge a commission of one cent per bushel on wheat shipped to them, just as if the Commission Rule had not been suspended by the Exchange. Other commission merchants, they knew, intended to reduce their charges to half a cent per bushel; the elevator men, they expected, would handle the grain for the same and in many cases for nothing in order to persuade the farmers to ship their way. It would be a great temptation to many farmers who had been sitting on the fence, shouting "Sic 'em!" but never lifting a little finger to help, and it was to be expected that those with limited vision would ship their grain where they could make the biggest saving at the time.

Notwithstanding, the directors believed that the majority of the farmers would not prove one cent wise and many dollars foolish by failing to realize what the future might hold in store if the elevators succeeded in killing off competition. Finding that it was possible to handle oats on a smaller margin, they made the farmers a gift reduction of half a cent per bushel on oat shipments; otherwise the former rate was sustained.

The wheat ripened. Harvesting began. The long grain trains commenced to drag into Winnipeg across the miles of prairie. By the middle of September the weekly receipts of the farmers' company were running to 744 cars. In 1907 they had handled about five per cent. of the crop and seven and one-half per cent. of the 1908 crop; of the total number of cars so far inspected in this year of "free for all" methods, the Grain Growers' Grain Company handled about fifteen per cent.

When the end of the season brought the figures to a final total it was found that the farmers' organization had handled well over sixteen million bushels of farmers' grain. This was an increase over the preceding year of nearly nine million bushels, or 114 per cent. It was nearly one and one-half million bushels greater than all the previous years of operation and represented one-eighth of all the grain inspected during the year in Western Canada.



CHAPTER XIII

THE MYSTERIOUS MR. "OBSERVER"

Observation tells me that you have a little reddish mold adhering to your instep. . . . So much is observation. The rest is deduction. —Sherlock Holmes. Sign of Four (Doyle).

In Prehistoric Days, when one man hied himself from his cave to impress his ideas upon another the persuasion used took the form of a wallop on the head with a stone axe. It was the age of Individual Opinion. But as Man hewed his way upward along Time's tangled trails personal opinions began to jog along together in groups, creating Force. With the growth of populations and the invention of printing this power was called Public Opinion and experience soon taught the folly of ignoring it.

In the course of human aspiration Somebody who had a Bright Mind got the notion that in order to get his own way without fighting the crowd all he had to do was to educate the "Great Common Pee-pul" to his way of thinking and by sowing enough seed in public places up would come whatever kind of crop he wanted. Thus, by making Public Opinion himself he would avoid the hazard of opposing it. The name of this Sagacious Pioneer of Special Privilege who manufactured the first carload of Public Opinion is lost to posterity; all that is known about him is that he was a close student of the Art of concealing Artifice by Artlessness and therefore wore gum rubbers on his feet and carried around a lot of Presents to give away.

It is quite possible to direct the thought of Tom-Dick-and-Harry. A skillful orator can swing a crowd from laughter to anger and back again. The politician who prepares a speech for a set occasion builds his periods for applause with every confidence. But it was to the public prints that they who sought the manufacture of Public Opinion were in the habit of turning.

There has always been something very convincing about "cold print." The little boy believes that the cow really did jump over the moon; for isn't it right there in the nursery book with a picture of her doing it? And despite the disillusionments of an accelerated age many readers still cherish an old-time faith in their favorite newspaper—a faith which is a relic of the days when the freedom of the press was a new and sacred heritage and the public bought the paper to learn what Joseph Howe, George Brown, Franklin, Greeley or Dana thought about things. This period gave place gradually to the great modern newspaper, the product in some cases of a publishing company so "limited" that it thought mostly in terms of dollars and cents and political preferments.

When the cub reporter rushed in to his city editor with eyes sparkling he cried out enthusiastically:

"Gee, I've got a peach of a story! Old John Smith's daughter's eloped with the chauffeur. She's a movie fan and——"

But it did not get into the paper for the very good reason that "Old John" was the proprietor of the big departmental store which took a full-page advertisement in every issue the year around. The editor would have used it soon enough, but—the business office—!

Then there was the theatrical press-agent, a regular caller with his advance notices and free electros of coming attractions, his press passes.

"Give us a chance, old man," he pleaded, perhaps laying down a good cigar. "Say, that was a rotten roast you handed us last week."

"Yes, and it was a rotten show!" the editor would retort. "I saw it myself."

The telephone rings, maybe—the business office again.

"The Blank Theatre have doubled their space with us, Charlie. Go easy on 'em for awhile, will you?"

The floor around the editor's desk was scuffed by the timid boots of the man who wanted his name kept out of the paper and the sure tread of the corporation representative who wanted his company's name mentioned on every possible occasion. Business interests, railway corporations, financial institutions—many of these had a regular department for the purpose of supplying "news" to the press. Some American railroads finally took to owning a string of papers outright, directly or indirectly, and one big Trust went so far as to control a telegraphic news service.

In fact, to such a pass did things come in the United States that the exploitation of the press became a menace to public interest and a law was passed, requiring every publication to register the name of its proprietor; in the case of corporate ownerships the names of the shareholders had to be filed and the actual owners of stock held in trust had to be named also. This information had to be printed in every issue and the penalties for suppression or falsification were drastic.

No such law was passed in Canada, although the reflection of the situation in the United States cast high lights and shadows across the northern boundary. Partizan politics were rife in Canada and too often have party "organs" and "subsidies" dampered down the fires of independence in the past. A few journals, however, even in the days before the great changes of the War, placed a jealous guard upon their absolute freedom from trammelling influences and to-day they reap the reward of public confidence.

While not a newspaper, the Grain Growers' Guide was a highly specialized journal for the Western farmer, aiming frankly at educating him to be the owner of his land, his produce, his self-respect and his franchise; to make him self-thinking and self-reliant and to defend him from unjust slurs.

The editorial responsibility of carrying out such a programme in the face of existing conditions required a well chosen staff. In Roderick McKenzie, then Secretary of the Manitoba Grain Growers' Association, the farmers had an editor upon whose viewpoint they could depend; for he was one of themselves. But lacking practical experience in newspaper work, it was necessary to secure an Associate Editor who would figure largely in the practical management of the publication. McKenzie was finding that his duties as Secretary of the Association were becoming too heavy for him to attempt editorial services as well; so that not long after the appointment of an Associate Editor he decided to devote his whole time to his official duties.

In its selection of a young man to take hold the Guide was fortunate. George Fisher Chipman was not only a very practical newspaper man to meet the immediate needs of the young journal, but he was capable of expanding rapidly with his opportunities. Well versed in the economic problems of the day, he was known already in many magazine offices as a reliable contributor upon current topics. He was well poised and, as legislative reporter for the Manitoba Free Press, Chipman had made something of a reputation for himself on both sides of the political fence as a man who endeavored to be fair and who upheld at all times the traditional honor of the press.

By training and inclination Chipman was in complete sympathy with the Farmers' Movement in Western Canada. Away east, in the Valley of Evangeline, near Grand Pre, Nova Scotia, he was brought up on a farm, learning the farmers' viewpoint as afterwards he came to know that of the big men in the cities. He believed in co-operation, his father having been a leader in every farmers' organization in Nova Scotia for more than twenty years.

It was not long before the young editor's influence made itself manifest in the official paper of the Western farmers. He saw many ways of improving it and organizing it for the widest possible service in its field. Editorially he believed in calling a spade a spade and, being free from political restrictions, Chipman did not hesitate to "get after" politicians of all stripes whenever their actions seemed to provide fit subject for criticism.

By the time the Commission Rule difficulty arose the Guide had increased its weekly circulation by many thousands. The new editor seized the opportunity for "active service" and waged an effective campaign. The Grain Exchange finally restored the One-Cent Commission Rule and never since has it been dropped.

Meanwhile, however, hostilities broke out anew in an unexpected direction. They took the form of "letters" to the press and they began to appear in five papers which were published in Winnipeg—two newspapers and three farm journals. Concealing his identity under the nom-de-plume, "Observer," the writer attacked the Grain Growers' Grain Company and the men at the head of it. Declaring himself to be a farmer, Mr. "Observer" endeavored to discredit the farmers' trading organization by casting suspicion upon its motives and methods of business. As letter followed letter it became evident that the object in view was to stir up discontent among the farmers with the way their own agency was being conducted.

After issuing a single, dignified and convincing refutation of these attacks, the Company ignored the anonymous enemy. But the gauntlet was picked up by the Grain Growers' Guide. It lay right at the editor's feet. Chipman recognized a direct challenge and did not propose to drop the matter with a denial in the columns of his paper—even with a dozen denials. His old reportorial instinct was aroused. Who was this mysterious "Observer"? Why was he going to so much trouble as to launch a systematic campaign? One thing was certain—he was NOT a farmer!

All good newspaper reporters have two qualifications well developed; they are able to recognize news values—having "a nose for news," it is called—and they are able to run down a "story" with the instinct of a detective. G. P. Chipman had been a good reporter—a good police reporter particularly. He had the detective's instinct and it did not take him long to recognize that he was facing a situation which could be uncovered only by detective work.

In the first place, he reasoned, the letters were too cleverly written—so cleverly, in fact, that they could be the product of a professional writer only, most likely a Winnipeg man. This narrowed the search at once. By process of elimination the list of possible "Observers" was soon reduced to a few names. It was an easy matter to verify the suspicion that the "letters" were paid for at advertising rates and the question uppermost became: "Who are the greatest beneficiaries of these attacks?"

"The elevator interests, of course!" was Chipman's answer to his own question. He began to make progress in his investigations and before long he became very much interested in an office which happened to be located in the Merchant's Bank Building, Winnipeg. Here a certain bright newspaper man with some farming experience had taken to business as a "Financial Agent"—telephone, stenographer and all the rest of the equipment.

So sure was Chipman that he was on the right track in following this clue that finally he shut the door of his private office and wrote up the whole story of the "deal" which he expected to have been made between certain elevator men and this clever editorial writer who knew so much about money that he had opened up a Financial Agency. With the whole "exposure" ready for publication and the photograph of the "suspect" handy in a drawer of the desk, Chipman asked the "Financial Agent" to call at the Guide office.

"Thought you might like to look over that copy before we use it," explained the editor casually when his visitor's pipe was going well. He handed the write-up across his desk. "I want to be fair and there might be something——"

There decidedly was!—a number of things, in fact! Not the least of them was the utter surprise of the pseudo Financial Agent. He did not attempt to deny the truth of the statements made for publication.

According to the story which he told the editor of the Guide, it had been the original intention to have these "letters to the press" signed by leading elevator men themselves; but when it was decided to hire an expert press agent to mould public opinion in such a way as to offset the "onesidedness" of the farmers' movement, none of the elevator men cared to assume the publicity. The name, "Observer," would do just as well. A committee was organized to direct and supervise the work of the press agent and the chairman of this committee conducted the negotiations with the newspaper man who was to undertake the preparation of the "letters" and other material.

By the terms of his contract the press agent was to be paid in equal monthly instalments at the rate of $4,000 per year, with a contract for two years. For this he was to write letters which would turn public opinion against this Grain Growers' Grain Company, which was getting so much of the farmers' grain, and minimize the growth of sentiment in favor of government ownership of internal and terminal elevators. These communications he was to have published in the various papers of Winnipeg and the West. Such was the story.

The better to conceal the wires beneath this publicity campaign and the identity of the writer, Mr. "Observer" opened his office as a Financial Agency and became a subscriber to the Grain Growers' Guide—one paper, of course, which could not be approached for the purpose in view. It was necessary, nevertheless, to clip and file the Guide very carefully for reference; hence the subscription.

The space used by the "correspondence" was paid for at regular advertising rates. The advertising bill each week amounted to about $150. But one factor in the success of the plan had been overlooked—the influence of the Guide. No sooner had the official paper of the Grain Growers pointed out the situation to its readers and suggested that papers which accepted material antagonistic to the farmers' cause were no friends of the farmers—no sooner was this pointed out than letters began to arrive in batches at the offices of all the papers which were publishing the "Observer" attacks. Most of these letters cancelled subscriptions and so fast did they begin to come that one after another the papers refused to publish any more "Observations," paid for or not.

For unknown reasons it was decided to call off the attempt to create public opinion against government ownership of elevators and with the letters aimed at the farmers' trading activities being refused publication, the employers of "Observer" had no further work for him to do.

As they were still paying his interesting salary each month, they offered him $1,500 to tear up his contract, he said. But with more than a year and a half still to run—over $6,000 coming to him—Mr. "Observer" had a certain affection for that contract. Fifteen hundred dollars? Pooh, pooh! He would settle for—well, say So-Much.

"You're talking through your hat!" scoffed his employers in effect.

"It's a six-thousand-dollar hat!" smiled "Observer" pleasantly.

"Well, we won't pay any such lump sum as you say," virtually declared his employers, not so pleasantly.

"Just as you wish, gentlemen. I'll wait, then, and draw my salary—$333.33 1/3 every month, according to contract. I know you don't want me to sue for it; because we'd have to air the whole thing in the courts and there would be a lot of publicity. So we'll just let her toddle along and no hard feelings."

He got his money.

The alleged attempt of these elevator men, whether with or without the sanction of their associates, to make public opinion by means of the "Observer" letters began in the fall of 1909. It lasted but a few weeks.



CHAPTER XIV

THE INTERNAL ELEVATOR CAMPAIGN

What constitutes a state? . . . Men who their duties know, But know their rights, and knowing, dare maintain. —Sir William Jones. Ode after Alcaeus.

Now, about this Government Ownership of Elevators. The Grain Growers had had it in mind right along. The elevators were the contact points between the farmer and the marketing machinery; therefore if his fingers got pinched it was here that he bled. Complaints of injustice in the matter of weights, dockage, grades and prices colored the conversation of farmers in many parts of the country and, rightly or wrongly, many farmers were profoundly dissatisfied with existing conditions at initial elevators. These elevators provided the only avenue by which grain could be disposed of quickly if transportation facilities were not fully adequate. It seemed to the farmers, therefore, that the only way to avoid monopolistic abuses was for the provincial governments to own and operate a system of internal storage elevators and for the Dominion authorities to own and operate the terminals. The elevators, declared the farmers, should be a public utility and not in private hands.

This feeling first found definite expression in a request by the Manitoba Grain Growers prior to the Manitoba elections in 1907. The Manitoba Government declined to act on the request of the Grain Growers alone, but called a conference of municipal reeves and others interested. This conference was held in June and urgently requested the Manitoba Government to acquire and operate a complete system of storage elevators throughout the province, as asked for by the Grain Growers. Nothing was done at the first session of the renewed government, however.

Meanwhile the Grain Growers were circularizing the three Prairie Provinces on the need for a government system of elevators and at the annual conventions of the organized farmers in Manitoba, Saskatchewan and Alberta in 1908 strong endorsement of the idea was made. An "Inter-Provincial Council of Grain Growers' and Farmers' Associations" [1] had been created, and this body urged the several executives to wait upon their respective governments and try to obtain definite action.

At the suggestion of Premier Roblin, of Manitoba, a conference of the three premiers was arranged through the Secretary of the Inter-Provincial Council. It was the hope of the farmers that this might lead to uniform legislation, introducing government ownership of the elevators, and that the three provincial governments would join in an appeal to the Dominion Government for co-operation. In each province the whole subject had been dealt with exhaustively in the text prepared by the Grain Growers—the conditions making a government system of elevators necessary, how it could be created and the practicability of its operation, the question of financing and the beneficial results that would follow. It was the idea of the farmers that the provinces would purchase existing storage houses at a fair valuation, issuing government bonds to finance the undertaking and build new elevators where needed.

The provincial Premiers met at Regina on May 4th, 1908, talked over the matter, then sent for George Langley, M.P.P., one of the directors of the Saskatchewan Grain Growers' Association who occupied a seat in the Saskatchewan Legislature. They appointed Mr. Langley as a sort of ambassador in their negotiations with the Grain Growers' representatives, sending him to the Inter-Provincial Council to present verbally a couple of alternative propositions—that the Railways should be asked to build loading elevators with storage bins or that the management of the elevators should be taken away from the present owners and profits limited while the farmers' organizations became responsible for grades, weights, etc.

Back came the Grain Growers with a document which repeated their former demands and amplified their argument. They claimed that they were entitled to what they were asking if only because the farmers formed the major part of the population and their demands could be granted without placing any tax upon the remainder of the people. They requested a conference with the three Premiers to go into the matter in detail.

Not until November 4th, 1908, did this conference take place in Regina. When they did get together the Premiers were not posted well enough on details to promise anything more definite than that they would consult their colleagues and make reply in due course.

It was the end of January, 1909, before the Inter-Provincial Council had an official reply. The Premiers pointed to grave and complicated questions which stood in the way of granting what the farmers were asking. Constitutional difficulties, financial difficulties, legislative difficulties—all were set forth in a lengthy and well written memorandum. The British North America Act would have to be amended to grant the provinces authority to create an absolute monopoly without which success would not be assured. In short, there was such a tangle of overlapping jurisdictions, public interest in trade and commerce, federal rights, railway rights and so on that the Premiers could not see their way clear at all in spite of their great desire to help the farmers at all times.

The Grain Growers passed the document to their legal adviser and R. A. Bonnar, K.C., gave them his opinion in writing. That opinion was very complete, very authoritative, and poked so many holes in the "constitutional difficulties" that the farmers could see their way much more clearly than the Premiers, to whom they made dignified rejoinder. They handed on the holes while they were at it in the hope that the heads of the three Provincial Governments could take a peek through the "difficulties" for themselves and see just how clear the way really was after all.

The Provincial Premiers, however, took the step which logically followed their reply to the farmers. Resolutions were introduced in the Alberta and Manitoba Legislatures that His Excellency the Governor-in-Council be memorialized in regard to the elevator question and asked to provide government ownership and operation or to have the necessary powers to deal with the matter conferred upon the provinces.

Thus things rode until December 14th, 1909, when the Committee on Agriculture in the Saskatchewan Legislative Assembly recommended the appointment of a commission to make searching enquiry into the subject of government control and operation of the internal elevators as asked for by the Saskatchewan Grain Growers' Association.

Two days later, at the annual convention of the Manitoba Grain Growers, Hon. George Coldwell announced for the Manitoba Government that they had accepted the principle of establishing a line of internal elevators as a public utility, owned by the public and operated for the public. So unexpectedly did this good news come that the farmers were amazed at their own success. They had fought for it long and earnestly and victory meant a very great deal; but it had seemed still beyond reach.

In the case of Manitoba it only remained now to get together and thresh out the details. A strong committee was appointed to conduct negotiations with the Government and there was prepared a memorandum of the plan which the farmers recommended the Government to follow. This was presented on January 5th, 1910.

The Government and the Grain Growers then each got ready a bill for consideration by the Legislature. Many conferences took place. The Government refused the farmers' bill and the farmers did not approve of the Government's proposals. While leaving full financial control in the hands of the Government, the Grain Growers demanded that the operation of the elevators be undertaken by an absolutely independent commission without any political affiliations whatsoever; it was provided also that no officer of the Grain Growers could act on this commission. The Government did not deem it wise to let control of the managing commission out of its hands. So negotiations were broken off.

The Manitoba Government now prepared a new bill, but did not remove the features to which the farmers were objecting. This bill was passed and the Government voted $50,000 for initial expenses and $2,000,000 for acquiring elevators. Beyond a weak protest from the North-West Grain Dealers' Association the elevator owners had not shown much excitement over the situation. While the Manitoba Grain Growers were not satisfied that the Government plan would work out successfully and therefore refused to assume responsibility in connection with it, they were ready nevertheless to lend their best co-operation to the Manitoba Elevator Commission when it got into action.

In the Province of Saskatchewan an altogether different plan was evolved in due course. The investigating commission, appointed February 28th, 1910, consisted of three well qualified men—George Langley, M.P.P.; F. W. Green, Secretary of the Saskatchewan Grain Growers' Association; Professor Robert Magill, of Dalhousie University, Nova Scotia, the latter acting as chairman. The commission held sittings at many points in Saskatchewan, taking evidence from a large number of farmers, went to Winnipeg to meet representatives of elevator companies, the Exchange and Government officials, and also visited several American cities. Their final report, consisting of 188 typewritten pages, was handed to the Saskatchewan Government on October 31st, 1910.

In addition to the comprehensive scheme outlined by the Saskatchewan Grain Growers many different suggestions were considered by the commission, such as government ownership and operation, state aided Farmers' Elevators, municipal elevators and various modifications of these plans. All, however, were discarded by the commission in favor of an experiment in co-operative ownership and management by the farmers themselves, assisted financially by the Provincial Government.

The scheme presented by the executive of the Saskatchewan Grain Growers' Association appeared to be unworkable because it overstepped mere public ownership and operation of initial elevators to include methods of sampling, grading before shipment, bank and government loans, features outside the power of a provincial legislature. The schemes of municipal and district elevators, while appealing to local loyalty for patronage, did not secure the farmers' direct pecuniary interest to make the elevators successful in the face of competition. As to the Manitoba plan, the commission were unanimous in advising against it in view of the financial risk and the disadvantages of political influences which would tend to make themselves felt.

Instead, therefore, of a plan aiming at ownership of initial elevators by the State and management by the Government of the day, the commission recommended ownership and management by the growers of grain. Such a co-operative scheme would aim equally well at removing initial storage from the ownership of companies interested in grain trading—would recognize as promptly the feeling of injustice in the minds of many farmers—would seek just as fully to create marketing conditions which would give the farmer satisfaction and confidence. While both the Manitoba scheme and the proposed co-operative scheme involved financial aid by the State, the commission saw reason to believe that with control and management in the hands of the farmers themselves many of the risks and limitations of other plans would be avoided.

It is to be noted that in reporting upon general conditions in the grain trade of Canada in 1910 the Saskatchewan Elevator Commission pointed out the great change which had taken place since 1900. One factor in this had been the construction of new transcontinental lines and thousands of miles of branch railway lines together with a great increase in car supply and a more efficient and cheaper system of transportation. Again, the use of loading-platforms had introduced real competition with the elevators, almost fifteen million bushels of the 1908-09 crop in Western Canada having been shipped direct by the farmers. The development of co-operation among the farmers through the Grain Growers' Associations had led to much advantageous legislation, while Farmers' Elevators and Public Weigh Scales had had a salutary effect at many shipping points. The organization of the Grain Growers' Grain Company as a farmers' own selling agency likewise had exerted a wide influence for good all over the West, enabling the farmers to obtain first-hand information about existing methods of dealing in grain. Finally, the protection afforded by the Manitoba Grain Act was not to be questioned; for while it was impossible to draft any Act which would prevent all the abuses alleged, it had been the means of providing many weapons of defence for the farmer and unfamiliarity with these provisions by individual farmers was scarcely to be blamed upon the Act itself.

The improvement in conditions, compared with earlier years, was recognized by most of the farmers appearing before the commission and many of them had no personal complaint to make in regard to weights, grades or prices. They were advocates of provincial ownership not so much on their own behalf as upon behalf of settlers in newer districts. The commission, therefore, while not saying that there were no cases of sharp practice or no grounds for dissatisfaction, were impressed by the fact that however powerless farmers had been in earlier days they were now in a very different position. The strong feeling which many farmers had against the line elevator companies was based upon experiences of rank injustice and bitter recollections of the past; for this the elevator people could blame nobody but themselves. But the factors enumerated undoubtedly had improved the situation from the farmers' standpoint and it only remained to strengthen these factors to give the farmer complete control in the matter of initial storage.

The commission were unanimous in recommending co-operative organization of the farmers as the probable solution of the situation in Saskatchewan. They suggested the enactment of special legislation to provide for the financing of the undertaking by the farmers themselves, assisted by a government loan. That is, the farmers surrounding a point where an elevator was needed would subscribe the total amount of capital necessary to build it, paying fifteen per cent. in cash, the crop acreage of the shareholders at that point to total not less than 2,000 acres for each 10,000 bushels capacity of the proposed elevator; these conditions fulfilled, the government would advance the remaining eighty-five per cent. of the subscribed capital in the form of a loan, repayable in twenty equal annual instalments of principal and interest, first mortgage security. The commission also suggested that the responsibility of preliminary organization be thrown upon the farmers themselves by appointing the executive of the Saskatchewan Grain Growers' Association as provisional directors of the new grain handling organization.

When the matter came before the Saskatchewan Legislature the annual convention of the Saskatchewan Association was being held at Regina and the farmers declared themselves ready to assume responsibility and go ahead. A bill was introduced by the Government, embodying the recommendations of the Commission, and the Act incorporating The Saskatchewan Co-Operative Elevator Company, Limited, was assented to on March 14th, 1911.

Because of the unusual financial arrangements with the Provincial Government the capital stock was not set at a fixed amount but left subject to change from time to time by the Government. In order to protect the credit of the Province the Government thus was able to control the amount of stock the company could issue and thereby the amount of money the Government might be called upon to advance for the construction or purchase of elevators. Shares were placed at $50 each, available for farmers only, and a limit was set upon individual holdings.

It was provided that each local unit would have a local board of management and appoint delegates to an annual meeting where a Central Board of Management would be elected. The company was empowered not only to own and operate elevators and buy and sell grain, but to own and operate lumber yards, deal in coal and other commodities and "do all things incidental to the production, storing and marketing of grain."

By June 16th, 1911, the Provisional Directors[1] were able to call the first annual meeting of the new organization, having fulfilled the requirement of the Act that twenty-five "locals" be first organized, and by July 6th—the date of the general meeting at Moose Jaw—an additional twenty-one "locals" were ready. Thus they were able to start with forty-six units, representing $405,050 capitalization with 8,101 shares held by 2,580 shareholders.

The newly-elected directors[2] proceeded forthwith to let contracts for forty new elevators, standard type of thirty and forty thousand bushels capacity with cleaning machinery and special bins. Six existing elevators were purchased.

The Grain Growers' Grain Company agreed to act as selling agents for this new baby sister and wide-spread interest became manifest as the Grain Growers took another step into commercial circles.



[1] See Appendix—Par. 8.

[2] See Appendix—Par. 12.

[3] See Appendix—Par. 12.



CHAPTER XV

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.