THE INTERNAL ELEVATOR CAMPAIGN

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” 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 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 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.