It is to be noted that in reporting upon general conditions in the grain trade of Canada in 1910 the Saskatchewan Elevator Commission pointed out the great change which had taken place since 1900. One factor in this had been the construction of new transcontinental lines and thousands of miles of branch railway lines together with a great increase in car supply and a more efficient and cheaper system of transportation. Again, the use of loading-platforms had introduced real competition with the elevators, almost fifteen million bushels of the 1908-09 crop in Western Canada having been shipped direct by the farmers. The development of co-operation among the farmers through the Grain Growers' Associations had led to much advantageous legislation, while Farmers' Elevators and Public Weigh Scales had had a salutary effect at many shipping points. The organization of the Grain Growers' Grain Company as a farmers' own selling agency likewise had exerted a wide influence for good all over the West, enabling the farmers to obtain first-hand information about existing methods of dealing in grain. Finally, the protection afforded by the Manitoba Grain Act was not to be questioned; for while it was impossible to draft any Act which would prevent all the abuses alleged, it had been the means of providing many weapons of defence for the farmer and unfamiliarity with these provisions by individual farmers was scarcely to be blamed upon the Act itself.
The improvement in conditions, compared with earlier years, was recognized by most of the farmers appearing before the commission and many of them had no personal complaint to make in regard to weights, grades or prices. They were advocates of provincial ownership not so much on their own behalf as upon behalf of settlers in newer districts. The commission, therefore, while not saying that there were no cases of sharp practice or no grounds for dissatisfaction, were impressed by the fact that however powerless farmers had been in earlier days they were now in a very different position. The strong feeling which many farmers had against the line elevator companies was based upon experiences of rank injustice and bitter recollections of the past; for this the elevator people could blame nobody but themselves. But the factors enumerated undoubtedly had improved the situation from the farmers' standpoint and it only remained to strengthen these factors to give the farmer complete control in the matter of initial storage.
The commission were unanimous in recommending co-operative organization of the farmers as the probable solution of the situation in Saskatchewan. They suggested the enactment of special legislation to provide for the financing of the undertaking by the farmers themselves, assisted by a government loan. That is, the farmers surrounding a point where an elevator was needed would subscribe the total amount of capital necessary to build it, paying fifteen per cent. in cash, the crop acreage of the shareholders at that point to total not less than 2,000 acres for each 10,000 bushels capacity of the proposed elevator; these conditions fulfilled, the government would advance the remaining eighty-five per cent. of the subscribed capital in the form of a loan, repayable in twenty equal annual instalments of principal and interest, first mortgage security. The commission also suggested that the responsibility of preliminary organization be thrown upon the farmers themselves by appointing the executive of the Saskatchewan Grain Growers' Association as provisional directors of the new grain handling organization.
When the matter came before the Saskatchewan Legislature the annual convention of the Saskatchewan Association was being held at Regina and the farmers declared themselves ready to assume responsibility and go ahead. A bill was introduced by the Government, embodying the recommendations of the Commission, and the Act incorporating The Saskatchewan Co-Operative Elevator Company, Limited, was assented to on March 14th, 1911.
Because of the unusual financial arrangements with the Provincial Government the capital stock was not set at a fixed amount but left subject to change from time to time by the Government. In order to protect the credit of the Province the Government thus was able to control the amount of stock the company could issue and thereby the amount of money the Government might be called upon to advance for the construction or purchase of elevators. Shares were placed at $50 each, available for farmers only, and a limit was set upon individual holdings.
It was provided that each local unit would have a local board of management and appoint delegates to an annual meeting where a Central Board of Management would be elected. The company was empowered not only to own and operate elevators and buy and sell grain, but to own and operate lumber yards, deal in coal and other commodities and "do all things incidental to the production, storing and marketing of grain."
By June 16th, 1911, the Provisional Directors[1] were able to call the first annual meeting of the new organization, having fulfilled the requirement of the Act that twenty-five "locals" be first organized, and by July 6th—the date of the general meeting at Moose Jaw—an additional twenty-one "locals" were ready. Thus they were able to start with forty-six units, representing $405,050 capitalization with 8,101 shares held by 2,580 shareholders.
The newly-elected directors[2] proceeded forthwith to let contracts for forty new elevators, standard type of thirty and forty thousand bushels capacity with cleaning machinery and special bins. Six existing elevators were purchased.
The Grain Growers' Grain Company agreed to act as selling agents for this new baby sister and wide-spread interest became manifest as the Grain Growers took another step into commercial circles.
[1] See Appendix—Par. 8.