It will be remembered that this Commission Rule, established in 1899, was that a charge of one cent commission per bushel should be made for handling grain and that all members of the Exchange dealing in grain must show that the price paid was the price at the terminal (Fort William) less the freight and one cent per bushel commission. This commission could be neither more nor less than one cent; for at that time it was felt that business could not be done, offices maintained and an efficient and reliable service given for less. It was a charge which both farmers and grain men considered fair and reasonable.
The trouble in the Exchange started when the commission men claimed the right to have country agents and to pay them on a commission basis of one-quarter cent per bushel. The elevator companies were able to buy at elevator points through their salaried representatives but the commission men were prohibited from having country agents except on a salary basis, and this they could not afford, handling grain on commission.
For some years past there had been considerable dissatisfaction among Exchange members in regard to the operation of the Commission rule, doubt being entertained that all the members were keeping good faith in the collection of the full commission charge of one cent to non-members of the Exchange and one-half cent per bushel to members on country consigned and purchased grain. Although the Council of the Exchange had held many special meetings in an endeavor to find a remedy and to investigate the charges, the results had not been very marked owing to the difficulty of securing the evidence to support such charges.
This was given as a reason for the doing away with the one cent commission restriction altogether for a trial period of one year. Thereby the trade was put on a "free for all" basis, as the President of the Exchange then in office pointed out. It meant that Exchange members were "enabled to pay owners of grain in the country any price they desired without regard to actual market values as regularly established on the floor of the Exchange." It was the personal opinion of the President that to preserve stable markets with uniformity and discipline amongst Exchange members a commission rule was absolutely necessary and he predicted that perhaps in a short while, after the suspension of the Commission Rule had been given a fair trial, the Exchange might see its way clear to rescind the suspension.
"Just so," nodded the commission men among themselves. "The logical and certain result will be the weeding out of the commission men and track buyers, who give practically the only element of competition that exists in the trade! One of the curses of our Canadian commercialism is the strong tendency to monopoly and this looks like an effort to create an absolute elevator monopoly of the grain trade, which is the staple industry of the country."
But if the small dealers on the Exchange were aroused, what about the farmers' trading company? They did business on a commission basis only and with the elevators offering to handle the farmers' grain for nothing, or next door to it, what would happen? Would the farmer be "unable to see past his nose," as was predicted? Would he forget the conditions of the early days and grab for a present saving of five or ten dollars per car? If the farmers did not stand together now, they were licked! It was a showdown.
There was only one thing to do—take a referendum of the shareholders as to the basis on which they wished the year's business handled. The Board of Control of the Grain Growers' Grain Company therefore issued the following circular letter, which was mailed to every farmer shareholder:
"This matter we now bring to your notice is the most important yet.
"At a meeting of the Grain Exchange, held a few days ago, the Commission Rule was suspended for a year. This means that there is no fixed charge for handling grain, and any company or firm can, if they wish, handle car lots for nothing. How did this come about? The Elevator Companies did it with the aid of Bank Managers and other Winnipeg men outside of the Grain Trade, who hold seats on the Exchange, and voted with them. The intention of these Elevator Companies is to handle all grain for 1/2c. per bushel or for nothing in order to take it away from the Commission Men, who have no elevators, and especially to keep it away from the Grain Growers' Grain Company.
"The Elevator Companies can handle farmers' cars for nothing and still not lose anything. How? In four ways—