Read about it...
Back
Rural grain elevators — farmers wanted grain prices posted at each rail siding delivery point
Jan 31, 2013

 

by Bruce Cherney (part 3)
John M. Egan, the general superintendent for the Canadian Pacific Railway (CPR) in Winnipeg, wrote the membership of the Manitoba Farmers’ Union on August 29, 1884, explaining the railway’s grain storage policy at delivery points alongside its tracks. Since the province’s farmers felt they weren’t receiving a fair price for their wheat, they wanted the option of building cheaper flat warehouses alongside existing elevators to store their grain while it awaited shipment to the Lakehead. But it seems that Egan was merely playing for time when he mentioned the possibility of more flat warehouses being erected, as the CPR’s policy continued to favour the building of wooden grain elevators by private companies. 
Farmers did build a few elevators in Manitoba by forming joint-stock companies, which were not based on the farmers’ co-operative model that later arose on the prairies. In effect, the farmers were shareholders in the private company they formed to erect an elevator to serve their own area. But by 1900, only six per cent of prairie elevators were locally owned and operated by the farmers who used them. The first true co-operative elevator in Manitoba was not built until 1925 in Roblin.
Egan indirectly acknowledged the CPR’s policy when he wrote to the farmers’ union that A.W. Ogilvie was prepared to store their grain in his elevators and offer them five-cents more per bushel at Port Arthur (now part of Thunder Bay) than what they could obtain at Duluth, Minnesota, for the same grade of wheat. 
“I considered at the time, and am still of the same opinion, that this concession was worth more to the members of the Farmers’ Union  than if we allowed them to place warehouses along the side tracks from one end of the line to the other,” continued Egan. “...I trust that you will consider this matter well, for should Mr. Ogilvie be requested again to allow the erection of flat warehouses at stations where he has elevators, he may withdraw the offer he has made and placed in writing.”
But was it really a fair offer?
According to the Manitoba History article, The Flour Milling Industry in Manitoba Since 1870, by John Everitt and Roberta Kempthorne of Brandon University (Autumn 1993): “As a matter of policy, the Ogilvie company attempted to keep secret its prices, which apparently varied from place to place, even on the same date. A furor erupted in the fall of 1884 when a CPR telegraph agent released information to the newspapers on the prices Ogilvie was offering. In the same year the company’s buyers were found to be offering prices lower than those agreed upon in the rebate agreement and the CPR had to step in to rectify the situation. (Egan tried to address the uproar in his letter to the farmers’ union by promising to post grain prices at every station along the route to the Lakehead). 
“The Ogilvie company, and later the other large milling companies, were also criticized because they were believed large enough to be able to affect the overall price of grain, which led to Manitoba farmers receiving a lower price for their wheat. Basically, the argument was that the large millers were able to ‘cull’ the better grades of wheat by the use of their own elevator lines, and by ‘somehow selecting the best car lots’ collected by other elevator owners, before they were able to reach the market. Thus, the average grade marketed elsewhere was lower, and the average wheat price, based upon overall sales, was lower. This lower price was received by the farmers.
“This accusation was, of course, difficult to substantiate, although the fact that up to 1889 ‘Mr. Ogilvie (had) purchased more than half of all the wheat grown in Manitoba and the North-West Territories’ gave some credence to it. In addition, the large millers were accused of spreading false reports about crops in order to lower prices, and of exploiting the grading system for wheat in order to buy the grain at prices below true value ... This was particularly a problem at points where Ogilvie Milling had the only elevator, and in some instances (e.g., at Manitou in 1884) led to the local farmers building their own elevator. As competition increased in the late 1880s and early 1890s, however, the specific criticism of the Ogilvie company seems to have disappeared, although ‘the large western milling companies’ were still subject to attack two decades later.”
Following a bumper crop in 1887, the CPR also came under attack. Farmers believed a “wheat (grain) blockade” had been implemented by the railway. It was a blockade brought about more by poor planning and management rather than intent. Still, westerners believed that the Montreal-based company had intentionally instituted the grain blockade to retain its monopoly on rail lines in Western Canada and to reap greater profits.
When the year 1888 began, the railway failed to provide enough boxcars to ship grain east, so wheat sat piled up at sidings in the open air, got wet when the spring arrived and then began to rot. With the glut wheat on the market and the supply of boxcars limited, grain buyers ceased purchasing grain. Elevators that were able to get boxcars for eastward shipments of grain were quickly refilled once emptied. The result was a drop in wheat prices.
“Farmers who have brought their loads thirty, forty, and fifty miles, to market, are turned back disappointed, without the money in which their labors are entitled,” was the message in a February 1, 1888, Free Press editorial, which blamed the blockade on the CPR’s monopoly clause with the federal government that prevented the establishment of more branch lines and thus railway competition in the province. The federal government had consistently used the 20-year monopoly clause, which prevented the construction of any lines south of its main trans-continental line, to disallow railways chartered by the Manitoba government.
The editorial called the monopoly an “abominable curse which has been thrust upon the people,” and claimed there was more than enough business to “satisfy the greed” of the CPR, if the monopoly came to an end and other railways were allowed to compete in Western Canada.
The Winnipeg Board of Trade (forerunner of the Winnipeg Chamber of Commerce) grew concerned about the worsening implications of the grain blockade. Like the grain growers, its members were losing money. A bountiful harvest, which should have been a boon to city businesses and rural farmers and merchants, had turned into a financial disaster for all.
The board released a report on February 4, 1888, which stated: “Grain dealers are suffering on account of having to carry large stocks of grain in warehouse — the supply of cars being totally inadequate to materially reduce the stocks on hand. It is reported as being almost the rule for grain shippers to decline orders from eastern houses, or millers, for ‘short  date’ shipments, and no guarantees can be given for dates of delivery.”
It was estimated that city grain dealers were forced to store grain valued at $1 million.
The board then passed a resolution, which was later endorsed by the Brandon Board of Trade, calling upon the Canadian government to end the CPR monopoly and allow other railways to compete by building lines in the province.
A letter from William Whyte, the general superintendent for the CPR in Winnipeg, published in the February 6, Free Press, claimed the real facts about the “wheat blockade” had not been revealed to the public. Whyte said  he had instructed CPR agents at all stations to report the amount of wheat on hand, when railcars were short and when farmers were unable to unload their grain.
According to the reports from the agents, the only “inconveniences” were on the Pembina section west of Manitou, which resulted from the “want” of elevators. If complaints were arising it was because unloading wheat from wagons and sleighs into railcars was a slow process, claimed Whyte.
“The reason of there not being more elevators in the province is no doubt the same as the reason for this company not having sufficient cars and engines to move the wheat as fast as it is offered for shipment; and that is the exceptionally large harvest, which will, when the whole crop has been shipped, be found to be about four times greater than the previous year.”
Whyte said when the extent of the harvest became known, the company began building and leasing more train engines. And if the weather had not been severe around the north slope of Lake Superior in December and January, “there would, I am confident, have been no trouble in supplying all the cars required and promptly transporting them when loaded to their objective.”
The CPR was also in the process of erecting a “warehouse” in conjunction with a British syndicate “at Fort William capable of three quarters of a million bushels in order to allow the farmers to market their grain.”
Yet, by his own admission, the CPR was only supplying 40 cars to 46 points in the province, and that 100,000 bushels of wheat was still awaiting shipment.
Charles Napier Bell, the secretary of the Winnipeg Board of Trade, said his sources — wholesalers, implement dealers and leading men in communities across the province — disputed the findings of the CPR. He claimed railroad employees were threatening grain dealers and rural merchants to keep them quiet about the worsening situation.
“The CPR (employees) have it in their power to commercially kill any merchant or grain dealer, and that is why the grain dealers have refrained from appearing in the matter” (Brandon Weekly Sun, February 23, 1888).
Even Eastern Canadian newspapers began to criticize the CPR and its methods. The Montreal Witness on February 17 declared that William Cornelius Van Horne, the president of the CPR, was using swagger and bluff to answer the complaints of the Winnipeg Board of Trade.
A commentary in the newspaper expressed the opinion that: “The Canadian Pacific company’s reply to the complaint of the Winnipeg Board of Trade declaring the reports of the shortage of cars to be a gross exaggeration is an interesting effort to make the best of a very bad case ...
“There are on the Montreal Corn Exchange men who ordered shipments from Winnipeg in the end of November, two months and a half ago, and they have not received the stuff yet. The grain dealers and millers of Montreal, as well as all connected with Manitoba in business ways, whether ‘Conservative’ or ‘Liberal,’ know the truth regarding the railway situation in the Northwest. They know that there has simply been an utter breakdown in the transportation service and that nothing but the abolition of (the) monopoly will meet the requirements of the situation.”
Similar to those based in Winnipeg, rural merchants were also suffering the effects of the blockade. At Glenboro, merchants reported stockpiling wheat outside their stores and on the street that couldn’t be sold. The same merchants were told by farmers that they would settle their store accounts when they were able to sell their wheat.
(Next week: part 4)