Manitoba History: A “Tragic Muddle” and a “Cooperative Success”: an Account of Two Elevator Experiments in Manitoba, 1906-1928
by John Everitt
The present day United Grain Growers Limited (UGG) says its main purposes are “to handle, merchandise and store grain in western Canada,” and it emphasizes that country elevators “perform an essential function in [the] movement of grain.”  But the Grain Growers’ Grain Company (the direct predecessor of the UGG) was not conceived as an elevator operation, and in fact originally it “had nothing to do with elevators ...; its trade was carried on with those who shipped direct in cars from a flat warehouse or loading platform.”  The entry of the Grain Growers’ Grain Company (GGG Co.) into the grain elevator section of the grain trade was to a large extent a result of a set of fortuitous circumstances beginning with what the UGG’s historian has termed a “Manitoba Fiasco” and ending a few years later with what a Wheat Pools writer has called a “victory for producers’ cooperation as against the theory of state management.” 
The purpose of this paper is to study the circumstances surrounding what Boyd has called the “two elevator experiments in Manitoba,”  and to show the significance of those experiments to the Grain Growers’ Grain Company. The first experiment, began in 1910, was public ownership, while the second and more successful departure involved the transfer in 1912 of the government owned elevator system to the farmer owned GGG Co. (UGG after 1917), leading to its rise as an elevator-owning organization. The focus of the study will be the period between 1906 and 1928. The former date marks the beginning of the GGG Co. The latter marks the time by which an “entire society”on the prairieshad been “organized to facilitate” the “production of wheat for export.”  Somewhat coincidentally, 1928 was also the date by which the UGG had acquired the last of the elevators that had previously been owned by the Manitoba Government and operated by the government’s Manitoba Elevator commission (MEC).
“The prairie west,” as Friesen has demonstrated, “was intended to be Canada’s settlement frontier,” and the process of settlement was so successful that by the late 1920s the “wheat economy” was “firmly established.”  Unfortunately, this state of affairs was not achieved without a considerable amount of dissent particularly on the part of the farmers. As a consequence, the prairie farmer was commonly pitted against the government or against monopolies (or perceived monopolies) of private companies involved in finance, marketing, and transportation.  These struggles reflected the farmers’ view of themselves as located at the bottom of the rural economic pyramid, not only in terms of the annual wheat production process, but also in terms of their share of the financial returns from this system. This discontent was caused in large part by the manner in which growth had occurred in the grain trade.
One of the early objectives of the major participants in the western grain trade was the improvement of the systems of grain storage and transportation to market. The policies of the CPR (and later other railway companies such as the Northern Pacific, Canadian Northern, and Great Northern) encouraged the widespread construction of elevators, and the growth of companies that were large enough and sufficiently well financed to be able to operate “lines” of elevators along the railroads.  The lack of competition at many delivery points on the railways resulted in part from the way the system grew, because only a few companies or individuals had the capital to build, and because too few farmers were established in many areas to sustain a variety of elevators at a single station. But it was also believed to be a result of “backroom” agreements between railway companies and elevator operators, and between the major elevator operators themselves. Even those writers who have been most supportive of the private grain dealers admit that this viewpoint had some basis in fact.  Not surprisingly this caused considerable dissatisfaction among the farmers.
Action was not slow in coming, for the farmer of Manitoba has exhibited a long history of involvement with agricultural reform movements during the late nineteenth and early twentieth centuries. As with so many other innovations of the era, many of their reformist ideas were introduced into the province from outside sources, especially in the United States and Ontario. Thus the Farmers’ Alliance and the Patrons of Industry which absorbed it were strongly supported in Manitoba in the late nineteenth century, although they did not survive disastrous political involvements. 
Eventually the protests of farmers led to the Manitoba Grain Act of 1900. Despite this legislation the farmers suffered because the statute simply caused the elevator firms to “close ranks and combine more effectively for their own protection.”  They did this by forming, in 1901, an organization called the North-West Elevator Association which was closely linked to the Winnipeg Grain Exchange (known as the “House with Closed Shutters” by the farmers) which had been incorporated in 1891. This Association controlled more than two-thirds of the elevators on the prairies and, the farmers believed, operated as a monopoly to the detriment of producers.  Through the Association the line elevator companies were able to collectively lower the price paid to the farmer for his grain, and in addition, when car shortages developed, as they did as early as 1901, the railways gave the elevator companies preference over farmers who wished to load their own cars or ship from flat warehouses.  Other “ill practices” allegedly pursued by the line elevator companies included “the taking of heavy dockage, the giving of light weight, misgrading the farmers’ grain sold on street or graded into store, failure to provide cleaning apparatus, changing the identity of the farmers’ special binned grain, declining to allot space for special binning and refusing to ship grain to owner’s order, even when storage charges are tended. 
These problems meant that further government intervention was deemed necessary in later years, but they also led “to the beginnings of effective organization by prairies farmers and ... [to] ... the principal phases in the struggle for farmer-control of the western wheat trade.”  One major consequence of this struggle was the formation of the Grain Growers’ Grain Company in 1906 on cooperative lines as a commission agent. This marked a new departure for the prairie grain trade.  A second consequence was the organization of Grain Growers’ Associations in each of the prairie provinces which “generally brought pressure to bear upon the provincial governments to embark upon [a] policy of government ownership with respect to the grain trade.” 
The call for the public ownership of services was by no means peculiar to Manitoba, nor to the farmers of this province, but was rather one facet of a movement that was Canada-wide and gaining in strength, and was symbolized by Borden’s support of federal ownership of a transcontinental railway in his 1904 election campaign.  A willingness to use the state to develop and control the economy was particularly characteristic of the Conservative party. One researcher has suggested that this willingness is a distinguishing feature of Canadian political culture, although the validity of this conclusion has been doubted by others.  Certainly, however, the municipal ownership of facilities such as water, hydro-electric power, and telephones could be found in at least Ontario, New Brunswick, and British Columbia. But as of 1905 there had been “little practical progress” toward such goals in Manitoba, other than the Roblin government’s leasing of the Northern Pacific’s railway lines in Manitobawhich were immediately subleased to the privately owned Canadian Northern Railway. In addition, there was still considerable opposition in the province to the concept of public ownership. 
A breakthrough came, however, with the establishment of the Manitoba Government Telephone system in 1906 which “gave the movement for government elevators its initial impetus.”  The farmers’ cause was also aided by the fact that public ownership of elevators became a significant political issue at a critical and turbulent period in Manitoba politics, and was at different times endorsed by both Liberals and Conservatives.  The culmination of the struggle was the formation in 1910 of the Manitoba Elevator Commission (MEC). This entity was the second government owned utility in the province, and it was designed to compete with the established line elevators which were in the hands of the private interests. The formation of the MEC can thus be seen as result of a complex political and philosophical process that was affecting many aspects of Canadian life in the early twentieth centuryalthough in this particular instance the decision in favour of public ownership appeared to be based as much on pragmatic as philosophical grounds. The MEC was significant, however, as it provided an initial model for the non-private ownership of grain elevators that was to be of considerable educational value to the other prairie provincial governments as well as to the various farmer-owned organizations that soon came to dominate the Canadian grain trade. The Commission was also important as the MEC system of elevators was soon leased to the Grain Growers’ Grain Company.
The establishment of the MEC did not mark a totally new departure in elevator ownership, as farmer owned elevators had been established on the prairies at least twenty years before. But the Manitoba Government elevators did significantly increase the scale of non-private ownership. In 1900 only 6% of the prairie elevators were owned by the farmers who used them and these were all locally owned and operated. By 1916, however, this proportion had risen to 16%, and by 1928 it exceeded one thirdand these elevators were mostly owned by regional companies. This trend continued in subsequent years, with 74% of the licensed elevators in Canada being owned by the three Pools and the United Grain Growers (UGG) in 1987 (See Table One).
The growth in farmer ownership of elevators was a major outcome of the dissatisfaction felt by many of the farmers with the system of private ownership that prevailed in the late nineteenth and early twentieth centuries. This discontent originally led to the operation of locally owned “Farmers’ Elevators Companies” that operated one elevator at one station. These had been established “at various points in the Province at least as early as 1890 and probably earlier.”  The Patrons of Industry also entered the elevator business with five of their elevators being built in Manitoba by the fall of 1892 and others being completed at later dates. The Farmers’ elevators (and probably those of the Patrons) were, however, joint-stock companies and were owned and operated by the local farmers rather than being organized on a cooperative basis.  Although some of these locally-owned operations were financially successful, many were failures due to poor management as well as unfair competition from the line elevator companies. It was clear that this concept was not the solution to the farmer’s problems. 
In part as a result of the lack of success of these locally operated companies, the Grain Growers’ Grain Company was formed in 1906, as a philosophical descendent of the movements of the 1890s. Indeed, the founder and first president of the GGG Co., E. A. Partridge, had been an active member of the Patrons of Industry at least as early as 1894 and he continued this interest in the operations of the grain trade in the following decade, acting as a Director of the Grain Growers until 1912. Almost from the start this company demanded the government ownership of elevators as the essential element for curing the perceived ills of the grain trade. Basically it was believed that if a monopoly was inevitable, a government monopoly was preferable. 
The most complete statement of this set of demands was the “Partridge Plan,” conceived by Partridge, which was presented to the 1908 convention of the Manitoba Grain Growers’ Association (MGGA), and was endorsed by this body.  In this document Partridge detailed the problems with the grain trade that in his mind made government ownership of an elevator system necessary. He also suggested how such a network might be set up, and posited the results of such a system in operation. In the same year, the Interprovincial Council of Grain Growers’ and Farmers’ Associations gave special consideration to the subject and urged the provincial associations to lobby their respective governments. In fact a general endorsement of the Partridge Plan was registered at the three provincial conventions of farmers in 1908. Also in 1908 a conference of the three provincial premiers considered the demands but nothing came of it, because a prairie-wide government monopoly would have been very expensive, would have caused philosophical problems for many people, and might have raised constitutional difficulties. 
As a common inter-provincial policy had not proved possible, individual provincial schemes were pursued. In 1910 Saskatchewan appointed an Elevator Commission to study the problem and its recommendation that a “farmer-owned and operated cooperative elevator system, in which the government would provide a major financial assistance” was followed.  The Saskatchewan Cooperative Elevator Company Limited was formed in 1911. In Alberta a similar path was followed in 1913 and the Alberta Farmers’ Cooperative Elevator Company was set up. 
Prior to these more cautious approaches, however, the Conservative Roblin government in Manitoba “launched out by itself upon a scheme of government ownership.”  It did so much to the surprise of many, including the Premier of Saskatchewan and many of the members of the Grain Growers themselves.  Although the demands were basically the same in all three provinces, the response in Manitoba was unique. A complete monopoly of elevator ownership with “sufficient storage to provide growers at each shipping point with the desired facilities under public operation” was regarded as desirable by the farmers and feasible by the government,  although as will be shown, such exclusive control never came about.
The Manitoba decision to buy and operate a system of government owned elevators had been precipitated by the demands of the Manitoba Grain Growers Association. In February 1909 they had presented “a monster petition, signed by 10,000 farmers, asking the government to establish a line of elevators to be operated by an independent commission.”  This initiative had been followed up in a meeting between Premier Roblin and the board of directors (of the GGG Co.) later in the same year. It is probably true, however, that the decision had been influenced by the result of a by-election at Birtle, in which a Liberal-Manitoba Grain Growers Association candidate was elected, apparently mainly on the issue of government ownership of elevators.  This had been important because a provincial election was expected for 1910.
In any case G. R. Coldwell, a member of the Roblin cabinet, had announced at a meeting of the Manitoba Grain Growers’ Association in late 1909 that the government had decided to establish a line of elevators as a public utility.  The Manitoba Elevator Act that became law on March 15th, 1910,  however, diverged from the farmers’ scheme in a number of major points, despite the objections of a deputation from the GGG Co. when the government proposals were first announced. The personnel of the Manitoba Elevator Commission that was set up by the Act was also contentious and thus both the wording of the Act and the composition of the Commission meant that the full support of the farmers was never behind the government scheme. These two problems are worthy of separate discussion.
The objections to the composition of the Commission centered around the appointment and/or dismissal of its members. The Manitoba Grain Growers Association had suggested that a member of the Commission should be removable from office only “by a two-thirds vote of the legislature or by the decision of the provincial Court of Appeal.”  However, the Act of 1910 established a Commission consisting of three people appointed by the government and “removable from their respective offices by order of the Lieutenant-Governor-in-Council,” which meant that they were directly responsible to the government, not to the legislature. Thus, in essence the cabinet rather than the legislature was to control the composition of the Commission, in order to be in accordance with what the government believed to be the principle of “ministerial responsibility.” The objections of the farmers were not to the quality of the Commissioners. Although the GGG Co. had pushed for the appointment of “two practical grain men and one experienced elevator builder” it is possible that the selected Commissioners were “the three best men that [could] be found for the work.” The problem was that the Commission was seen as “entirely subject to the government and, therefore [it could not] be independent.” 
The Commission was appointed in May 1910. The three Commissioners were sworn in and D.W. McCuaig officially was made Chairman later in the same month. McCuaig was a well known farmer who had a long history of involvement with farmers’ causes and organizations. He had been a President of the Patrons of Industry in the 1890s and had served as President of the Manitoba Grain Growers’ Association since 1905 following two years as a director of that organization. He was also, however, described by the Manitoba Free Press as a “trusty and pliant friend of the Roblin government.”  Despite this drawback, getting McCuaig to be Chairman of the Commission was an astute move by the government as it could have the effect of seeming to place the responsibility for the success or failure of the scheme upon the Grain Growers themselves. The board of directors of the MGGA opposed his appointment because they did not want to be so closely identified with the MEC. They believed that McCuaig could not fulfill both posts, and it should be noted that in a self-denying ordinance the boardincluding McCuaighad previously voted to exclude themselves from consideration for the positions as Commissioners. They were unsuccessful in preventing McCuaig from accepting the chairmanship of the MEC, but their pressure did convince him to resign as President of the MGGA. 
One of the two other Commissioners, Mr. W. C. Graham, was Manager of the Farmers’ Mutual Hail Insurance Company, and along with McCuaig was described by the Manitoba Free Press as a keen Conservative politician who had taken “an active part in all recent political contests.”  He had previously been secretary of the Patrons of Industry and had been prominent in the grain trade in Portage la Prairie. After the collapse of the Patrons he purchased a seat on the Winnipeg Grain and Produce Exchange which he kept for two years before joining the insurance company. Graham resigned as Commissioner on Aug. 31st, 1912 although by this time the involvement of the MEC in the Manitoba grain trade was all but over. Commissioner F. B. Maclennan, the third appointee, had by far the most experience in the grain trade, having been involved in it since 1890, and having been a grain merchant since 1898. Even the Manitoba Free Press, usually no supporter of Roblin government appointees, acknowledged that he was an “expert grain man,” and his pay was the highest of the three Commissionerspresumably in recognition of this expertise. Maclennan resigned in March 1911 after the “Liberal opposition scored a notable triumph” in the Legislature and had the salaries of the Commissioners cut.  McCuaig and Graham received relatively small reductions of sixteen and twenty per cent respectively, but Maclennan’s pay was cut in half and he resigned forthwith.  Both Graham and Maclennan had been on a list of four nominees submitted by the MGGA to the government. 
The grain growers disagreement with the main body of the Act can be seen in three significant points. First, the acquisition and construction of elevators was placed under the Minister of Public Works rather than the Commission. This provision was criticized as tending to involve political considerations in purchase agreements, and the subsequent pattern of acquisition lent some credence to this argument,  despite the fact that the Minister of Public Works, Hon. Robert Rogers, “stated publicly that the commission ... would be independent in reality and that the control exercised by the government would be but a necessary formality.”  Certainly the political order of the time allowed for an army of “provincial bagmen” whose patronage positions were considered by manyincluding Rogersto be “the lifeblood of political existence,”  and the government purchase of the elevators could help provide work for members of this army. Although Rogers was Minister of Public Works only until 1911 (when he began using his provincial “resources” on behalf of the federal government) his tenure did cover the purchase of the elevator system and his ministerial policies may well have been continued by his successor, another long-term government member, Hon. Colin Campbell. Campbell’s successor in 1913, Dr. W. H. Montague, was later implicated in a major scandal that caused the downfall of the Conservative government.  It is clear that the skepticism of the farmers towards the Ministry of Public Works was well founded.
A second part of the Act which the farmers disagreed was the decree that where the Commission and the owner of an elevator were unable to agree on a purchase price the proceedings of the Manitoba Expropriation Act were to be used to determine a valuation. This meant, in effect, that a “judge of the court” was left to appoint the third arbitrator. The GGG Co. believed that this third person would most likely be “some corporation manager or financial man” and thus probably would be more in favour of the elevator owning interests.  Their fears were apparently borne out because after the first few elevators were acquired by the Commission (using a process of negotiation) the Minister of Public Works tended to go the route of arbitration. Only 15 of the 164 original elevators were purchased as a result of negotiation.  The valuator appointed “to the elevator commission and on whose recommendation as to value many elevators were bought” was formerly “with the Ogilvies” and certainly did not appear to decide against the interests of the line elevator companies in his judgements.  This purchasing process may have fallen somewhat short of political corruption, but certainly it did not exhibit the lack of bias that the farmers had hoped for.
The farmers’ third criticism of the Act was that it “contained a local option provision whereby no purchase, lease, or construction of an elevator would be undertaken by the Commission, unless it had previously a petition to do so, signed by at least sixty per cent of the growers contributary to such proposed elevator. In the case of elevators to be constructed, a pledge of patronage was also required from the Petitioners.”  This meant that the committed farmers had to conduct campaigns in each localityand in some cases the validity of the petitions was questioned and in others the petitions were returned for more names before the Commission accepted them. The government’s desire to buy or build only where there was a local demand was, perhaps, understandable, but it was not carried throughat least if the pattern of subsequent acquisitions is anything to go by. In addition no penalties were added for failure to live up to the patronage pledge, and thus the farmers’ support, even for newly constructed elevators, could not be ensured.
Following their appointment, the Commissioners pre-pared petition forms and sent these, on request, “to various districts throughout the Province where grain producers had expressed a desire for a Government system of elevators.”  Between the appointment of the Commission and the beginning of movement of the 1910 crop, requests for petition forms were received from 240 stationswhich was 80% of the roughly 300 grain shipping points in the province. This could be taken as an indication that the farmer demand for government elevators was fairly widespread and the secretary/treasurer of the GGG Company argued that in general the farming community was behind the plan. There were, however, some regions where the scheme was not well liked, apparently “on the ground that government owned elevators would become part of the political machinery.”  For instance the government inspector in the Hartney area (in the southwest corner of the province) “got rather a cool reception” and noted that Manitoba Government elevators were “not popular at this point. 
By January 1911, 200 completed petitions had been submittedover 83% of the total number of requestsand 154 elevators had been purchased. The details of the selection process are unclear. They may, however, have been related to the costs of the elevators at different points, and the perceived genuineness of the petition. Each petition was checked by “special agents” in order to make sure that the 60 per cent rule was followed and that the petitions had been properly filled out. These agents were also responsible for ascertaining the capacity of the elevator required and selecting sites (where new elevators were requested). Inspectors appointed by the Commission checked “all elevators throughout the Province which were likely to be offered for sale.” This latter choice was apparently made as a result of meeting with the line elevator owners. The inspectors gathered a lot of valuable data, although their advice was often ignored. 
In the final analysis the elevators purchased were located at only 85 stations (under one third of the provincial total) and this caused a number of problems (See Table Two). First it meant that many farmers who asked for a government elevator did not get one, and second it indicated a tremendous amount of duplication with even three, four, and, at one place five government elevators purchased at one shipping point.  In addition to this poor distribution of elevator purchases there was also a series of difficulties that arose from the choice of “houses” that were bought by the Commission.
Some of the grain elevators were poorly located, and others were in bad condition as a result of being old and/or inefficient. For instance the elevator at Rea, on the Grand Trunk Pacific (GTP) Line was quite new (built in 1908) and was described by the inspector in 1910 as “a first class elevator in good condition.” But he also pointed out that there do “not appear to be very good roads to this place, directly west the road is not travelled at all on account of a big marsh.” Rea (the “R” on the GTP’s alphabet line) was not well located with regard to the surrounding farmland and its initial catchment area was soon lost to better located stations on other lines. It was only intermittently operated and the elevator had disappeared from the landscape by 1932. It would appear that the Atlas Elevator Company (one of the top ten in 1911) realized that it had made a mistake when it built at Rea, and sold its elevator to the MEC when it got a chance (at the high rate of nearly 23 cents per bushel of capacity). Rea is a good, but by no means the only example of a poor location.
An example of the purchase of an elevator in poor condition was the North Star elevator at Myrtle. The original MEC inspector was not impressed with the structure, stating that “this elevator is poorly constructed and has been let go to rack. It probably had one coat of paint when built and none sincelumber in the crib is good, otherwise it needs repairing nearly everywhere.” Despite this, the elevator, built in 1902, was sold to the MEC for 23.6 cents per bushel capacity. Interestingly an even older building at Myrtle was bought at the same time from the Winnipeg Elevator Company for the even higher price of 29.0 cents per bushel capacity. It was apparently never used before being dismantled and moved over seventy kilometers to Rossendale. Perhaps more interestingly the local farmers’ petition asked the MEC to buy the Myrtle Farmers’ Elevator but the Commission only offered $4,000.00 under the negotiation process (11.4 cents per bushel capacity) and the farmers decided to continue in business. The elevator was eventually sold to the GGG Co.who had leased it from 1912 to 1915for $5,500.00 cash, approximately 15.7 cents per bushel. 
There were in fact many cases where the inspectors’ reports were all but ignored. At Crystal City four elevators were purchased; one was operated during the first year (MEC) and two subsequently (GGG Co.). Here the Northern elevator had a poor foundation and had been described as “bad all through,” and the Dow Cereal and Milling Company elevator “would require a lot of work.” These two elevators were never used and were dismantled in 1916 (to be reassembled as one unit at Clearwater, the next station down the line). One structure purchased at Griswold “show[ed] signs of age” in 1910 and was dismantled and moved two years later; it had never been used. One of the four at Ninga gave the inspector the impression that “the whole outfit is certainly poor” and it was eventually sold to the United Grain Growers for scrap in 1917 for $150.00. The four elevators at Ninga were never operated simultaneously.
The problems of the system could be detailed at much greater length but it is perhaps enough to indicate that the GGG Co. only used 135 of the MEC elevators when it took over the system. Indeed, 48 of the elevators in the government system were subsequently demolished by the MEC or GGG Co. (UGG) and there were numerous complaints about those that were used. In many cases extensive renovations were necessary to keep the elevators in operation and many of the structures were eventually sold for a (sometimes heavy) loss. For example, the MEC “Northern” elevator at Nesbitt was built in 1895. It was sold to the MEC in 1910 as a 30,000 bushel elevator but both an inspection and subsequent use proved it to hold only 26,000 bushels. Over $7,000 in repairs and renovations were needed on this structure over the years, including $5,222 in 1911 (more than its 1910 purchase price of $5,035.00) in order to put it “into good working condition.” It was eventually sold to the UGG in 1926 for $2,000.00.
It would appear that, to say the least, good judgement had not been used in the original purchasing and that the suggestion of political considerations being involved in the purchase of elevators could not be dismissed. McCuaig attempted to justify this pattern of purchase by arguing that “we must own every elevator at every point or the ... system will not succeed and the elevators will not pay.” In addition he asserted that a lack of local monopolies would enable the private companies to destroy the government system, and that “in some places” the milling companies had prevented the “government man” from competing by giving “track prices for street wheat.”  Although the truth of McCuaig’s statement was already apparent, so was the fact that the MEC could never own every elevator, and that its sporadic pattern of purchasing was bleeding the Commission of valuable capital without leading to a defensible system of elevators.
The number of elevators in the system continually fluctuatedwhich has led to a variety of figures being used by different authors to summarize the pattern (See Table Three). In addition to the “original” 164, two more “used” elevators were purchased (in 1911). Forty petitions were received for the construction of new elevators, and twelve were granted. Ten new elevators were begun in 1910 and two more were built in 1912. Unfortunately for the MEC even this policy was not free of criticism, with George Langley, an MPP for Saskatchewan and a member of the Saskatchewan Elevator Commission, saying after an interview with the Commissioners that he believed that the construction of new elevators was also a result of “political, purely political, necessarily political” processes. He alleged that the lumber for the new elevators was bought through middlemen who were friends of the government and thus “$200,000 to $250,000 (was) deliberately stolen out of the public treasury.”  No more brand-new elevators were built after 1912 although petitions continued to be received, and elevators were constructed at 29 other stations partly out of new materials and partly out of the dismantled remains of other MEC elevators (See Table Four). For instance in 1917 the “Oakville Winnipeg” elevator, which had only a capacity of about 14,000 bushels and poor machinery, was torn down as a result of a petition of “84 resident Farmers of that District.” Its replacement, a 30,000 bushel structure, was built from new materials in addition to salvaged wood from the old elevator and from the “Letellier Winnipeg” elevator, which was also dismantled in 1917 with its remains being transported nearly one hundred kilometres to Oakville. 
As some were added to the MEC system others were deleted. Elevators were burned, dismantled (the first by at least 1912perhaps as early as 1910!), and sold (See Table Five). In total the Commission owned 207 elevators at 112 different stations during its tenure. Some, but not all of these elevators were repainted with a government insignia. Thus the “Virden Farmers’ Elevator” became the “Manitoba Government Elevator No. 1,” but others remained in their original colours until they were purchased from the MEC in later years. However, as late as 1927 when the last of the Commission’s elevators sold, the written records continued to refer to these structures as the “Napinka Dominion” or the “Ridgeville Canadian” elevator, with the terminology “Government owned” being reserved for MEC constructed structures. Clearly, after the initial period of ownership, the government elevators were neither operated as, nor regarded as, a separate system.
The total capital investment for the first year of operation alone totalled over 1 million dollars and although this was only half of what had been budgeted by the Roblin government, the allegations that the money was poorly spent told against the Commission almost immediately. Despite early criticism, however, the Commission argued that the system had been “well patronized” considering its late start in the season, and that its operation “was very satisfactory.” The Commissioners believed that the elevator system was “destined to inspire absolute confidence and retain the patronage of the grain producers of the Province.” It was consequently deemed “a success.”  Unfortunately for the MEC neither the facts nor subsequent historical analyses have agreed with their boosterish statements.
It was almost inevitable that the elevators would be over-priced in this sellers’ market but the purchasing methods employed made the situation worse than it might have been. In 1910 there were fewer than 700 elevators in the province and the Commission bought a quarter of these and surveyed another 20 per cent with a view to purchase. Of the remaining elevators some 200 were owned by the milling companies and were not for sale. These companies had found that “a line of interior elevators of our own [is] a necessary adjunct to the business” as it allowed the selection “of grain of suitable quality for [their] milling requirements” in the most efficient manner possible.  Thus the MEC was in the market for at least sixty per cent of the potentially available provincial elevators and the prices paid reflected this position. The average price for the fifteen elevators acquired by direct negotiation was 12.24 per bushel capacity, whereas the price for those purchased by arbitration averaged over 20 cents per busheland these were the ones bought at a later time and almost exclusively from the line elevator companies. The negotiated purchases were nearly all from farmers’ companies, or private owners with one or a few elevators. “It is evident that the purchase of elevators by arbitration increased the initial investment, and put a heavy burden of fixed charges on the project from the beginning.” 
As indicated above, a number of the elevators purchased by the Commission were superfluous or unsuitable and the overall distribution was a poor reflection of the farmers’ demands. Only 97 of the Commission’s 174 elevators were in use during the whole of the first season, and some were never operated. An examination of the previous owners indicates that over half of the purchases were made from four major elevator companies. The Commission bought twenty-four elevators from the Winnipeg Elevator Company which sold the balance of its holdings (also in 1910) to the Canadian Elevator Company.  Eighteen elevators were obtained directly from the Canadian Elevator Company, twenty-five from the Northern Elevator Company, and nineteen from the Dominion Elevator Company (See Table Six). It is unlikely that these companies sold their best elevators and the accusation of the day that these were the ‘culls’ of the system appears to be accurate.
At least 60 per cent of the elevators purchased from the Northern Elevator Co. had been built before 1900 with the oldest being constructed in 1888. Over half of the Dominion elevators had been built before the turn of the century with one dating back to 1887. The Winnipeg and Canadian elevators were slightly newer, but may have been located at poorer points or been superfluous to these companies’ needs after amalgamation. The Northern elevator chain had been put together by Nicholas Bawlf in 1893 as an amalgamation of the holdings of a number of important grain men. It had been sold in 1909 to the Peavey interests of the United States, and the 1910 sales to the MEC undoubtedly represented those elevators that were excessive to the new owners’ needs. The literature indicates that the major elevator owners did not vociferously object to the MEC.  It can be seen that one of the reasons why this was the case was that Commission purchases proved quite beneficial in the short run to some of the major line elevator companies.
“From start to finish the government’s scheme was a tragic muddle” and the financial results of the MEC proved to be disastrous.  A large deficit was recorded in 1910-11 as revenue covered only 55 per cent of operating and fixed charges.  In addition no new major sources of revenue were envisaged, and funds accruing from the sales of elevators were placed into a “Replacement Trust” account where they were used to finance the increasing costs of maintenance of the aging system. There were fluctuations over the years, with some seasons showing a surplus, but the Commission was never profitable. When the final accounting was completed in 1928 the accumulated deficit of the MEC was $172,697.41 in the Operating account and some $1,159,884.67 in the Debenture account. Assets of $454,446.01 meant that the total loss on the Manitoba Government elevator system to 1928 had reached $878,118.07.  As all of the elevators had been disposed of by this date there was no hope of further income to offset this deficit.
Premier Roblin blamed the early losses on the “infidelity of the farmers.” The charge had some validity. As W. L. Morton suggests, “it seemed that while farmers desired the check which the Government Elevators imposed on private companies, they were not prepared to patronize them exclusively. This disposition may have been increased by criticism of the government systems by the Liberals and the Grain Growers,  and was not reduced by McCuaig’s pleas for the farmers to use the MEC elevators. 
This “disposition” is not altogether surprising. First of all, not all farmers believed in the concept of the MEC, and in fact only 7000 people belonged to the Manitoba Grain Growers’ Association in 1909 whereas the number of occupied farms was much higher36,141 in the 1906 census.  Second, the process through which the elevators were purchased was suspect, as indicated already. Third, the existence of the MEC elevators meant that (often for the first time) competition existed at many elevator points, and consequently the line elevator companies reduced their prices. 
The Grain Growers “were not disposed to shoulder the blame” for the disappointing showing of the MEC.  Instead they censured the government for having created a poor system, for having operated it poorly, and above all for not having followed the farmers’ guidelines. They believed that it was the government’s course of action that led to many of the difficulties. No doubt they were right. The system of elevators was operated unwisely. The government elevators were set up as storage and handling facilitiesnot to act as grain merchantsand, it was argued, by a line elevator company director amongst others, that this could never lead to a commercial profit.  The reason for the decision to use the elevators only as warehouses is not entirely clear, but can probably be explained in two ways. The first is a philosophical point, for the farmers had for years believed that they had been exploited by the line elevator companies and saw no reason to hand over their potential profits to the government, any more than they wished this money to settle into private hands. Second, the system, as originally designed, would have had a monopoly on the handling of the farmer’s wheat, and the history of local farmers’ elevators had shown that if patronage was great enough, profits from grain sales were not necessary in order to make a profitor at least to prevent a loss. Unfortunately the MEC’s storage and handling enterprise when coupled with its pattern of elevator purchases, meant that the government system enjoyed neither a monopoly nor competitive equality with line companies. 
This handling of grain on a warehousing-basis-only meant that the MEC was confined to an uneconomic section of the business. To be economic as grain handling enterprises only, the government elevators would have needed to have processed three or four times their capacity in a year and during the 1910-11 season less than two times the capacity of the elevators (on average) was received. For instance, in Shoal Lake, the five elevators purchased had a capacity of over 150,000 bushels. One was not operated during the 1910-11 season. In total 32,663 bushels were processed by the four elevators used by the MECabout one fifth of their capacity. Others were more successfulone at Miami processed nearly five times its capacity. Unfortunately three other MEC elevators lay idle at Miami at the same time. In addition, there seemed little chance that this situation would improve significantly in the future. The line elevator companies, however, could “supplement their storage earnings with their profits on street purchases and their selling commissions. Where they owned terminal elevators as well, the country houses could be operated primarily as ‘feeders’ and the main profit be derived from terminal storage charges, and from merchandising, with or without ‘mixing’.” Still less was the government system in a position to compete with the milling companies, whose elevators “were virtually unaffected by the government expropriation proceedings.” 
The ambivalent position of the MEC, set up to provide service to farmers as opposed to realize a profit was demonstrated in a number of ways, but the use of the elevator facilities themselves provides a nice illustration of the Commissioners’ position. In late 1910 each elevator agent was instructed “to inform all farmers and owners of the grain that they are at liberty to use the Government plat-form scales in your elevator free of charge, if any time they wish to check their weights when about to sell or store grain in any other elevator.”  Such actions were philosophically laudable and perhaps useful as one means of gaining a farmer’s support of the MEC, but they did not contribute to the short-term profitability of the elevator system.
An additional difficulty was that patronage entered into the appointment of elevator agents despite the fact that the Grain Growers had stressed that “the employees and inspectors in charge of the elevators would require to be men of honesty and character.”  As a consequence, the individuals hired were not necessarily competent nor popular with the local farmersan essential for a successful elevator. Many of these problems were acknowledged by McCuaig at the Grain Growers Convention of 1911,  and the Minutes of the MEC are full of instructions to operators on “precautions against frost,” “how to handle flax,” “cooper cars,” and prevent “over-shipments”the latter being a serious problem and a major money loser in the MEC’s operations.  Such instructions should not have been necessary for experienced men but undoubtedly were for people appointed upon political rather than technical grounds.
Lastly the system of government elevators was aimed at “special binning.” This meant that farmers would be able to identify their grain but also that maximum utilization of elevator storage capacity was not possible as it would have been under a “graded storage” system. The provision for special binning had been a theme in the farmers’ demands for some time because it provided a mechanism for farmers to avoid some of the ways in which elevator agents and companies could cheat them.  Thus the “Farmers” elevators purchased by the MEC had averaged some twenty-three bins per elevator, whereas the private elevators purchased had averaged only eight. The MEC elevators built after 1915 (at least) used a set of GGG Co. plans for a “Standard Elevator” that included some nineteen bins of variable size. Such structures were more expensive than those with fewer bins, however, and may have had the short run effect of giving another edge to the line elevator companies.
For many reasons, then, the Manitoba government’s elevator system was a failure. The result was that on September 1st, 1912, the system was leased from the Manitoba Government by the Grain Growers’ Grain Co. The first elevator experiment by the government was over but a second was just beginning. Despite better offers by a group of local grain dealers in 1912, by the Smith-Murphy company in 1915, and by Minneapolis interests in 1916, the system continued to be leased to the UGG (the successor of the GGG Co.) until the late 1920s when the last of the elevators were sold. 
The Grain Growers had had, at best, mixed feelings about the failure of the MEC, because the GGG Co. “felt that in the Manitoba government’s difficulty lay its opportunity.” Due to changing conditions in the grain trade, in particular increasingly successful competition by the private elevator companies coupled with a falling off of farmer use of the GGG Co. simply for philosophical reasons, the company began to realize that without elevators it was at a serious disadvantage. As the government had “wished to drop an unfortunate experiment as quickly as possible,” and the GGG Co. felt it “must acquire elevators,” both sides had been in a mood to bargain. 
From 1912 on, elevators were sold (with the GGG Co./UGG having first refusal) to private companies with the last being “privatized” in 1927.  Significantly, this process enabled the farmer-company to get its own system of elevators on a pay-as-you-go basis which was beneficial to both parties involved.  The mortgages on the 1924 purchases, for instance, were spread over a ten year period being finally paid off in 1934. The first year of operation of the system by the GGG Co. resulted in a loss of $30,000 on the elevator operations (although an overall profit of $170,000 was recorded for the company), but after that the operation proved profitable and successful. 
Clearly the MEC was an object lesson in political corruption and in how not to go about setting up a government utility. But in addition to this negative value its existence did have a number of significant positive consequences. Its history of operations provided valuable data on the actual operation of publicly owned elevators, and consequently was of considerable utility to those examining the possibilities of government ownership in all three prairie provinces. Thus the experiment indirectly showed the value of the alternative to government ownership, namely the cooperative ownership of elevators by the farmers, and boosted this concept over that of elevators as a public utility. Although the failure of the MEC did not cause the governments of Alberta and Saskatchewan to switch to the idea of cooperation in ownershipthey had “a different political philosophy” from the Roblin government and had never been convinced by the public utility arguments” it did give this concept much greater credence. As Mackintosh remarked, “It is not to be wondered at ... that such defects of the Manitoba project as were then apparent should be of considerable influence in shaping the recommendations of the [Saskatchewan Elevator] Commission.” The Manitoba Free Press put it more strongly, calling the MEC “Manitoba’s Horrible Example” and suggesting that the poor working of the Commission was the main reason the Saskatchewan Government chose the path that it did. 
The difficulties of the MEC also indicated the need for greater prudence in dealing with the elevator issue than the Manitoba government had exhibited. In Colquette’s words the Manitoba Elevator Commission “cured the Organized Farmers of the obsession that government ownership of elevators was the panacea for their grain marketing ills.”  The subsequent actions of the other prairie provincial governments showed that it was still possible to give government funds and credit toward farmer ownership of elevators, without having to have government ownership per se.
The failure of the MEC helped the GGG Co. (UGG) considerably by giving the latter company an opportunity to go “into the elevator business” on terms it could handle.  Although by 1910 this company was quite well established in the grain trade, it did not have the capital to go into elevator ownership on a large scale. In addition, and as President Crerar acknowledged in 1911, times were changing and the Grain Growers could no longer expect to keep the support of the farmers simply on philosophical grounds.  There had to be a monetary incentive as well. The line elevator companies’ experience had made it clear that financial success in the grain trade came from vertical as well as horizontal integration, and the leasing arrangement with the MEC enabled the Grain Growers to compete on more favourable, if not equal, terms with these private dealers much sooner than would otherwise have been possible. After a lengthy discussion at the 1912 Annual Meeting “the shareholders gave the Directors the green light” and the government elevators were leased.  In 1911 the Grain Growers had no elevators, but by 1916 due to their successful “adjustment to the circumstances” of the previous five years,  they were the fourth largest elevator operating company on the prairiesfollowing the Saskatchewan Cooperative Elevator Company (formed in 1911), Ogilvie Flour Mills, and the Alberta Pacific Grain Company.
In the succeeding years the UGG was clearly concerned with the building-up of an efficient system of elevatorsnot just a collection of structures as had apparently been the case with the MEC. Thus some of the government elevators were used and later purchased, whereas others were ignored. A number of the buildings were dismantled and some were extensively remodelled. In a few instances the UGG also acquired other sites at stations with government elevators before purchasing the MEC building; perhaps this was a means of bargaining with the Commission for a better price. At some places the UGG built or bought another elevator rather than purchase the MEC “house,” presumably because of the poor condition of the government elevator. In some instances the site leases had never been transferred to the MEC after purchase from the private operators nearly fifteen years earlier, and in others the government apparently had no lease on the elevator site at all. When the government’s elevators were purchased their sites were carefully surveyed in order to obtain the lowest possible lease price; the UGG were to pay on a commercial (frontage foot) basis, rather than at a flat fee.  The operations of the Manitoba Elevator Commission had never been as efficient and economic as they might have been, but this was not to be the situation when the UGG took over.
Today the UGG is the third largest company after the Pools of Saskatchewan and Alberta, and ahead of that of Manitoba. Its chances of success were significantly boosted when it picked up grain handling facilities from the MEC. The official historian of the UGG calls the Manitoba Elevator Commission a “fiasco” in the history of the grain trade and Fowke goes further in making the “fiasco” “unqualified.”  This author believes that such a designation is too unkind, and that although the Manitoba Elevator Act was not the short term success the Commissioners believed it to be in 1911, it did, in the long run, have major positive effects upon the Canadian grain trade, the prairie farmers, and in particular the United Grain Growers. As Boyd suggests, by rescuing “the floundering government elevator system” the UGG “added another chapter to the story of cooperative progress on the Canadian prairies.” 
I would like to acknowledge the help of Mr. Don Fraser, now retired but previously Assistant to the President of the UGG. Mr. Fraser made a considerable amount of information on the MEC available to me, and also has prepared excellent histories of each of the UGG locals, which were of considerable value in this research. In addition Don passed on information on the UGG elevator system acquired by him during his many years with the company. I would also like to thank the staff at the Manitoba Archives who helped me with photo-graphic, cartographic, and particularly documentary evidence on the Manitoba Elevator Commission. Finally I would like to thank the Canadian Plains Research Centre and Brandon University Research Committee that supplied funds towards this research project, and Brandon University, California State University at Fullerton, and UCLA which supplied facilities to aid in the production of this paper. Donna Everitt is acknowledged for her help with data collection and for commenting upon an earlier draft of this paper. Two anonymous reviewers and Gerald Friesen are also thanked for their valuable comments on the manuscript.
3. R. D. Colquette, The First Fifty Years: A history of the United Grain Growers Limited (Winnipeg: The Public Press, 1957), p. 91; Boyd, New Breaking, p. 63.
8. C. F. Wilson, A Century of Canadian Grain (Saskatoon: Western Producer Prairie Books, 1978), pp. 13-18. Groups of elevators under common ownership came to be known as “line elevators” because they were usually located along a single “line” of railway, with the companies owning them being called “line elevator companies.” See Vernon C. Fowke, The National Policy and the Wheat Economy (Toronto: University of Toronto Press, 1957), p. 107. This terminology was never applied to farmer-owned, or cooperative elevators, although it has been used to describe the elevators owned by the major flour millers such as the Ogilvie Company and the Lake of the Woods Milling Company.
15. W. T. Easterbrook and H. G. J. Aitken, Canadian Economic History (Toronto: Macmillan, 1956), p. 499.
16. D. A. MacGibbon, The Canadian Grain Trade (Toronto: Macmillan, 1932), p. 48; Allan Levine, “The Voice of the Canadian Grain Trade: A History of the Winnipeg Grain Exchange to 1943,” (Ph.D. thesis, University of Toronto, 1984), p. 125.
19. Gad Horowitz, Canadian Labour in Politics (Toronto: University of Toronto Press, 1968), p. 10; Kenneth C. Dewar, “Toryism and Public Ownership in Canada: A Comment,” Canadian Historical Review 64 (Sept. 1983).
20. Eyler, “Public Ownership and Politics,” pp. 8-11, 29; H. V. Nelles, “Public Ownership of Electrical Utilities in Manitoba and Ontario, 1906-30,” Canadian Historical Review 57 (December 1976), pp. 464-465.
23. Brian R. McCutcheon, “The Patrons of Industry in Manitoba, 1890-1898,” Transactions of the Historical and Scientific Society of Manitoba, series III, number 22 (1965-66), pp. 7-25.
24. Ibid., p. 16.
25. Macintosh, Agricultural Cooperation, pp. 17-18. Most Farmers’ Elevator Companies were farmer owned but some (such as the Roland Farmers’ Elevator Company which later became part of the Winnipeg Elevator Company) were private firms hoping to capitalize on the name. See D. Fraser (ed.), History of the United Grain Growers Local 214: Myrtle - Roland Manitoba (Winnipeg: UGG offprint, no date), p. 2. Most of the Patrons of Industry elevators were themselves called “Farmers” elevators although the one built at Boissevain in 1892 was named the “Patrons Elevator Company.”
26. Hopkins Moorhouse, Deep Furrows (Toronto and Winnipeg: George J. McLeod, 1918), p. 169; H. S. Patton, Grain Growers’ Cooperation in Western Canada (Cambridge, Mass.: Harvard University Press, 1928), p. 81.
27. The Partridge Plan was published as an appendix to the MGGA Annual Report and Proceedings 1908. Its full title was “Provincial Ownership and Operation of a System of Line Elevators.” A copy is available in the Provincial Archives of Manitoba.
37. The official title was “An Act respecting a System of Government Grain Elevators,” 10 Edw. VII (1910), Chapter 27. Minor amendments were made in 1912 (Chapter 26) and 1917 (Chapter 38). See Patton, Grain Growers’ Cooperation, p. 450.
44. McCuaig was originally offered $5000 per annum. This was raised to $6000 when he was made Chairman and after friction occurred when Maclennan refused to accept less than $8000 per year. Graham was given an annual salary of $5000. After the reductions the Commissioners were to receive $5000, $4000, and $4000 respectively (see FP, 10 March, 1911, p. 1, 13 March, 1911, p. 3). The Liberal success in this maneuver was said to reflect the fact that the Hon. Robert Rogers, the Minister of Public Works who was responsible for the MEC, was losing interest in provincial matters due to a “thirst for high honours” federally (see FP, 14 March, 1911, p. 16). It was unusual for Rogers to be so easily beaten.
46. For instance, the Gretna “Long and Chambers” elevator was purchased “just before” the 1910 election for $3,250 without a preliminary petition being obtained from the area’s farmers. The FP, implying a political pay-off, was convinced that this elevatornot operated since 1909would “be a white elephant” (see 15 August, 1910, p. 20). This belief was borne out as the MEC did not operate the elevator and it was dismantled by the GGG Co. in 1913 and moved to Durban.
52. FP, 31 March, 1911, p. 9. According to this source, the “valuator,” F. G. Simpson was also rumoured at one time to be the top candidate to replace F. B. Maclennan on the Commission. In fact, Maclennan was never replaced and the Commission continued to run with only two members.
58. In this latter case, Shoal Lake, in west central Manitoba, five elevators were purchased from five different companies. The MEC operated four of these during the first year of its lifetime but by 1913 only three were being operatedthe other two being dismantled by 1920. The remaining three were torn down in 1921, 1928, and 1933 with the 1928 unit being rebuilt on a new site and operated until 1983. In a similar case study at Ninga, four were purchased, one of which was never used before being dismantled. By 1915 only one of the elevators at Ninga was being used.
62. It was, of course, still cheaper to buy used elevators than build new ones. In addition such purchases had the benefit of removing much of the competition at many stations. The new elevators built by the MEC cost approximately 28 cents per bushel to construct and the figure would have been higher if an all-out building campaign had taken place, as the consequent increase in demand for scarce building materials would undoubtedly have caused a rise in their price. The Dominion Warehouse Commissioner had estimated the cost of new construction at 21 cents per bushel. See Maclntosh, Agricultural Cooperation, p. 40.
70. These figures from the Archives of the MEC differ quite markedly in some places from those published elsewhere which were based upon newspaper stories, and which also, perhaps, referred to slightly different time periods. As Mackintosh states “In the confused state of the Provincial Accounts it is impossible to be accurate.” See Agricultural Cooperation, p. 39.
82. Overshipment was the putting of more grain into a rail car than the storage tickets called for. Line elevator companies, which also bought and sold grain, could more easily correct such mistakes by elevator operators than could the MEC which had no control over the grain once it left the elevator. The minutes of the MEC make a number of references to this point e.g. October 19th, 1910, and November 12th, 1910.
83. The MEC (and later the GGG Co.) was at a handicap because the elevators purchased usually did not have the facilities for special binning and thus were operated less efficiently as their existing bins were rarely filled to capacity. The newly built elevators, and most of those owned later by the Saskatchewan and Alberta cooperatives were designed to offer these facilities. By the early 1920s special binning had become a major feature of the Saskatchewan Company (55-75 per cent of grain) and the UGG (60-65 per cent). See Mackintosh, Agricultural Cooperation, p. 82.
84. FP, 22 July, 1912, p. 1; Patton, Grain Growers Cooperation, pp. 95-96. There was some criticism of the lease, as private firms had offered a higher rental than the GGG Co. The “administration, however, could not venture to return the elevators to the line companies in the face of aroused opinion.” (See Mackintosh, Agricultural Cooperation, p. 45). Interestingly in May 1924, the Railway Commissioner (who had taken over control of the MEC from the Department of Public Works in 1917) offered the elevators to Washburn Crosby of Minneapolis (as well as other non-Manitoba interests) but found this company uninterested (Papers of the Manitoba Elevator Commission 1908-31).
86. Most of the sales of the MEC elevators took place from 1924-1927, but some were sold as early at 1912. In 1916, for instance, the Dominion Elevator Co. bought two elevators - one of which this company had sold to the MEC in 1910. After repairs and depreciation the Manitoba Government lost $2,637 on this latter deal.
87. The Manitoba Government leased its elevators to the GGG Co. (UGG) but this company did not want to use all of the system. Where possible the remainder were leased to other companies (although some were never operated at all).
96. The Manitoba Government had “had arrangements with the Canadian National Railways whereby they paid a flat rental rate of $10 for each elevator regardless of the size of the site.” The railways charged the different elevator companies, including the UGG, on the basis of $10.00 plus 20 cents per foot in excess of one hundred feet. As the UGG felt that they did not “require more than one hundred feet for an elevator” they had the properties carefully surveyed and reduced in size wherever possible. (See United Grain Growers company collection, papers of the Manitoba Elevator Commission), 23 October 1934.
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