The Wheat Pool
"No longer does the farmer deem himself a man ill-starred by fate, for he knows that in the wheat pool he has achieved what wise men declared was impossible”
W. A. IRWIN
IN THE two preceding articles of this series an attempt was made to describe the Canadian wheat pool in terms of its physical extent, its historical background, its manner of organization, its personnel, and its method of carrying on the business of selling rather more than half the Canadian wheat crop.
It was shown, for instance, that the pool is a highly centralized commercial organism sprung from an agrarian democracy embracing 133,000 grain growers scattered over three provinces. It was shown that this commercial organism has become the veritable colossus of the international wheat trade by virtue of its control of the output of 25,000 square miles of prairie wheatlands, its ownership of the world’s largest system of grain elevators, its annual 'turnover of upwards of $300000,000, and its merchandizing to a score of countries of an annual volume of grain greater by far, in the aggregate, than that controlled by any other single agency in any country.
There can be no gainsaying the monumental character of these external evidences of the pool’s creative achievement. The immediate question, however, and the subject of this article is: What about results?
Monument building aside, has the pool been of economic advantage to the individual farmer? To the prairie farmers as a group? To the West as a whole? Has it been to the advantage, or otherwise, of the West in the psychological sense? More important still, has the pool reached its zenith? Is it still on the rise or is it already entering into the decline predicted by its enemies almost daily? And, finally, apart from the mere question of waxing or waning strength, what may be expected from the pool in the future?
Old System Yielded Huge Profits
U^F NECESSITY, any discussion of the economic results of the pool must be prefaced by a clear understanding of its objectives and the possible means by which it might seek to approach those objectives. First of all, let it be understood that the pool’s primary economic goal is the increasing of the monetary return to the farmer from the sale of grain. You hear a good deal about its endeavors to stabilize prices and eliminate speculation in grain, but, in the final analysis, these are of secondary importance in eomparison with the desire of the farmer to secure more money for his wheat.
That being so, what are the possible means of approach to this goal?
Speaking broadly, there are only three: lowering the cost of production or increasing the quality or yield without increasing the cost, which amounts to the same thing; reducing costs and middlemen’s profits between the producer and the consumer; or increasing the price paid by the consumer. That’s stating the problem in extremely elementary terms but one has to be elementary in dealing with such an institution as the pool to avoid getting hopelessly tangled in a snarl of facts.
The first mentioned we can ignore here, as the pool is primarily concerned not with production but with marketing. Of late, its management has paid some attention to production problems, but any efforts made in this direction have been too limited in their scope and of too short duration, as yet, to have any general effect on the economic return to the pool farmer.
When it comes to the effort to reduce marketing margins, however, there is an altogether different story to tell, for therein lies one of the pool’s most significant achievements. Under the old system of competitive marketing by privately owned grain companies, the system which still functions so far as non-pool grain is concerned, the farmer’s grain passes through the hands of a series of middlemen before it reaches the ultimate purchaser. The number varies, usually being greater in the case of export grain than in the case of grain disposed of in the domestic market. For instance, wheat sold for export may pass through the hands of a line elevator company, a commission broker, a terminal elevator company, a lake shipper, an export broker and an export shipper. But whatever the number, each takes his shaving of profit in addition to the charge for his services, before passing the grain on to the next.
Largely as a result of three factors, the governmental regulation of handling charges, the competition of farmers’ joint stock companies which preceded the pool, and intensive competition within the grain trade itself, profits earned by middlemen have been materially narrowed, but in the aggregate they still represent a very considerable toll on the farmer’s grain. In some cases they have been enormous. Original shareholders who invested $7.50 in the Saskatchewan Co-operative Elevator Company in 1912, for example, secured a return of $155.84 when the “Co-op” was sold to the Saskatchewan Pool in 1927, a capital increase of more than 1900 per cent in fifteen years. This happened to be a farmers’ company but its method of operation was no different from that of any other company in the grain trade.
Central’s Overhead a Quarter Cent Per Bushel
NOW, let us see what happens under the pool system. In the case of grain sold direct by the pool to importing countries—the amount coming under this category varies anywhere from fifty to seventy-five per cent of the pool’s handlings in any given year—the middlemen’s profits all go back to the original producer. In the case of grain sold at some intermediate stage, the gain to the producer may be relatively less, but so far as all pool transactions are concerned there is only one middleman, namely the pool itself, and it operates on a non-profit basis. In other words, the pool simply takes the farmer’s grain, sells it wherever it can get the best price, and returns the proceeds to the farmer less the actual costs of handling, transportation and selling. This in itself tends to increase the return to the original producer, as I shall indicate in more detail in a moment. But more than that, the pool, by reason of the immense volume of sales, is able to take advantage of all the economies that can be effected by large-scale handling and centralized management. Furthermore, by reason of its method of operation it can eliminate certain selling costs altogether; that of “hedging,” to quote one instance.
Of course, these advantages might be nullified entirely if the actual costs of operating the pool machinery were more than the corresponding costs on grain sold independently, but the figures do not suggest that this is so. Last year, for instance, the gross administrative overhead on the selling by the central pool of 222,000,000 bushels of wheat worked out at one quarter of a cent per bushel. The net cost, taking into consideration the profits earned by pool branch selling offices, was actually only one sixteenth of a cent per bushel. In other words the retention by the pool for the grower of the middleman’s profit represented by the excess earnings of branch selling offices cut this particular cost in four.
Coming down from the central pool to the provincials, the administrative overhead in the Alberta, Saskatchewan and Manitoba pools was .366 cents, .5 cents, and .661 cents, respectively. The total net costs, including interest, storage, administration and operating expenses were 2 % cents in the case of central, and .466 cents, 1.4 cents and .959 cents for the provinces, in the order named.
In the light of what has been said concerning the extent and complexity of the operations of the pool as a whole, I think it is reasonable to suggest that these figures are almost as extraordinary as the pool itself.
Nor do they tell the whole story, for there is still to be considered the direct return to the individual pool member from the pool elevator system.
Pool “street” wheat—that is, wheat sold directly on delivery at the country elevator, representing in the aggregate about fifty per cent of the total deliveries—pays a country elevator charge of five cents a bushel when it is handled through non-pool elevators. In the case of pool elevators the charge is four cents. That means an initial saving of one cent a bushel on a very considerable portion of the pool crop. And despite the lower charge, despite the fact that the pool elevator system still requires large amounts of money for a continued rapid expansion, the system is already paying dividends. To be specific:
Last year, the Saskatchewan pool farmers received a patronage dividend of IK cents a bushel on every bushel of wheat delivered through pool elevators. The Alberta pool farmers fared even better with a similar dividend of three and a half to four cents a bushel— middlemen’s profits, if you will, which, when compared with the cost figures already quoted, indicate why 133,000 pool farmers are confirmed believers in the ownership of their own grain-handling facilities. In Saskatchewan, elevator dividends more than met provincial pool costs, while in Alberta the dividend actually exceeded the combined per bushel -costs of the central and provincial pools. In passing, perhaps I should explain the omission of similar figures from Manitoba by saying that in that province the distribution of elevator profits is local rather than general; hence no general statement can be made.
Since the inception of the pool elevator system, more than $4,600,000 has been returned to pool farmers by way of successive patronage dividends—dividends which, had there been no pool, would have accrued to the owners of elevators. More than that, the individual pool members in proportion as they have delivered grain to the pool, still retain title to $21,310,000 of elevator and commercial reserves on which they receive an annual interest payment of six per cent, over and above the payments made in the form of dividends. This in itself represents a return of more than $1,200,000 a year which under the non-pool system would go to the lenders of money for elevator construction. Under the pool system it goes to the farmer by reason of the fact that he is his own lender.
Limitations of space forbid any attempt to delve deeper into the details of the means by which the pool is able to reduce marketing margins and take advantage of the economies of large-scale handling; nor is it possible to go into a detailed comparison of the average prices received by pool and non-pool farmers. Suffice to say with regard to the latter, that a comparison between the actual return to the pool farmer on the first six standard grades of wheat and the “weighted” averages of prices paid by the trade on similar grades of non-pool street wheat during the last crop year, shows a margin in favor of the pool of anywhere from 1^cents per bushel on Number Five wheat at a 22-cent Fort William freight rate point in Saskatchewan to 9J^ cents on Number One Northern at a corresponding point in Alberta. Furthermore, the relative “spreads”—in other words, the discounts due to depreciated quality—on the lower grades of wheat also reveal an advantage to the pool farmer. On “tough” wheat alone—that is, wheat with an excess of moisture—the pool discount was from two to four cents less than the trade street discount; a by no means inconsiderable factor when it is remembered that 180,000,000 bushels of the 1927-28 western wheat crop were graded “tough.”
Stated in cents per bushel, these figures may not seem to be particularly impressive. In the aggregate, however, they mean millions. And in the aggregate, they go a long way toward explaining why the pool membership has increased from 91,195 in 1924 to 133,000 in 1929.
Pool Largest Factor in Grain Trade
'T'HUS far we have been considering only the results of the effort of the pool to increase the return to the farmer by reducing the marketing margins between the producer and the ultimate purchaser. There still remains the question of whether or not the pool can make more money for the farmer by increasing the price to the consumer. In other words, can the pool raise the world price of wheat? And apart from general world price levels, can it secure a higher price for the Canadian wheat grower than that received by wheat growers in other countries?
As it happens, there are almost as many answers to those questions as there are individuals interested in answering them. Some enthusiasts from Australia have gone so far as to say that the pool has enhanced prices as much as twenty-five cents a bushel. Critics of the pool, on the other hand, point to the general price decline which commenced in May, 1928, and declare that the pool has utterly failed in one of its major purposes, that of stabilizing price levels for the benefit of the farmer. Unfortunately, nobody can offer categorical proof, because it is obviously impossible for anyone to compare the trend of world prices since the pool came into existence with the trend as it would have been had there been no pool. There is evidence, however, to indicate that neither of the extremists is right and that the truth lies somewhere between.
At the outset, it can be stated categorically that excluding the Weatherman to whose dictates all makers of wheat prices sooner or later have to bow, the pool is the largest single factor in the world grain trade. Although Canada produces only about twelve per cent of the world’s wheat supply, the Dominion exports nearly twice as much wheat as any other country. Last year, for instance, this country contributed forty per cent of all the wheat entering into international trade. Of this, the pool controls not less than half. Last year, to give the specific figures, international trade in wheat totalled 828,000,000 bushels, while the pool’s total handlings were 222,000,000. In actual fact, the pool controls anywhere from a fifth to a fourth of the total world’s exportable surplus. And, as the United States farmer has been discovering to his sorrow of late, the volume of exportable surplus has a good deal to do with determining the price of wheat. Obviously, any agency that controls only a fifth or a quarter cannot hope to determine what the price will be; but, equally obviously, any agency that does control such a proportion must of necessity exert some appreciable influence on the market. And that is about as far as one can go so far as the pool’s influence on the general price level is concerned. To use the words of A. J. McPhail, its president: “About all one can say is that the pool does exert a stabilizing influence upward.” How great this influence is when measured in terms of cents per bushel, it is impossible to say.
It would be futile, moreover, to argue that this “upward stabilizing influence” can be magnified to anything approaching monopoly control over general prices levels. In the last analysis, the world price will be determined by the relation between the supply of wheat and the demand for wheat; and the pool, at best, can only influence the trend and not establish it, a fact which is amply attested by the record of world production and pool prices during the years since the pool’s formation. This record is shown by the table on a following page.
Speaking broadly, the figures illustrate the fact that if the world crop is low, prices in Canada as elsewhere tend to be high; if the crop is a large one the tendency is for prices to go down, unless there is a corresponding increase in the demand. It is worth noting, however, that although the 192526 crop was nearly 400,000,000 bushels larger than the crop of 1923-24, the pool price for the former year was forty-four cents more per bushel than for the latter. Undoubtedly, conditions of demand had a great deal to do with this, but it is not without significance that the pool was five times as powerful in 1925 as it was in 1923.
This year, that is the current crop year of 1928-29, world production has been at least 200,000,000 bushels more than in 1927-28, being, in fact, the largest in history, and that fact explains the current lower levels of wheat prices.
World Wheat Production,
excluding China, in
millions of bushels
for No. 1
*The 1923 price was for the Alberta pool only as Saskatchewan and Manitoba did not commence operations until the following year.
The Results of Ordinary Marketing
SO MUCH for the pool’s relation to world prices. When it comes to gauging its influence on the Canadian wheat markets, one can be much more definite without danger of mis-statement. Thanks to the pool, panic selling with tumbling prices resulting in huge losses to the farmer, has been reduced to the.minimum. As in the past, the prairie farmers still deliver anywhere from sixty to seventy per cent of their grain during September, October and November. But it is no longer “dumped” in a frantic effort of scores of thousands of individual sellers to get the best possible price before the rapidly increasing supplies force the price down. In November of the last crop year, for instance, the pool received 57,000,000 bushels of wheat. During the same month it sold only 25,000,000 bushels. In the following March when receipts were only 8,200,000 bushels, it sold 25,600,000 bushels. In other words, the pool follows a policy of orderly marketing, distributing its sales throughout the year as demand arises, and not in accordance with the pressure of supplies. Furthermore, because of its control over half the crop, it can, and does, feed the Winnipeg market in such a way as to keep the Winnipeg price in line with world prices. If the Winnipeg price shows a tendency to fall off, the pool reduces its Winnipeg sales and concentrates on sales overseas. If somebody starts a bull movement on the Winnipeg Exchange, the pool increases its sales on that exchange and thereby prevents prices from getting out of hand.
Thus is explained that “stabilizing of prices” which I mentioned earlier as being one of the secondary economic objectives of the pool. And thus is explained the fact that speculation in grain is not as widespread or as profitable as it used to be. More than two years ago, Arthur Cutten, who is reputed to have made a fabulous fortune in the Chicago wheat pit, announced that he was through with speculating in wheat because of the stabilizing control exercised by the pool. And today, if you take the trouble to look around the Winnipeg financial district, you’ll see that some of the shrewdest of the brokers are devoting more and more of their attention to mining stocks and less and less to grain.
Still another curious corollary of this stabilizing influence is the effect it has had on the non-pool farmer. It has, in fact, made thousands of non-pool growers avowed supporters of the pool. They recognize that a stable price is to their advantage in selling their grain independently, thank the pool for it, and say it would be a sorry day for the West if the pool were ever to go out of existence.
The Pool and the Price “Flop” of Last May
"K/fORE generally: there is a growing LVL appreciation throughout the West that the pool, upon occasion, can maintain Canadian wheat prices at a level somewhat above those prevailing in other markets, even discounting differentials due to differences in quality.
In May last, to cite a notable example, there was a great hullabaloo in Eastern Canadian newspapers about the flooding of the British market by low-priced Argentine wheat and a simultaneous block of both United States and Canadian wheat at lower lake ports and on the Atlantic seaboard. The concurrent ballyhoo over the farm relief. legislation then before the United States Congress aided in advertising to the world that North America was “long” on wheat, and prices both at Chicago and Winnipeg nose-dived. Enemies of the pool gleefully pointed to the event as proof positive that the pool exercised no control over prices. Such critics overlooked the fact, however, that the Chicago price led the decline and did not stop until it reached 93 cents, whereas the Winnipeg price did not go below $1.04. At the moment of writing, Chicago May wheat is selling around $1.01 and Winnipeg around $1.13. In view of the fact that before the advent of the pool it was not unusual to see Winnipeg selling wheat at lower levels than Chicago, it is not surprising that even the non-pool farmers bless the pool in time of trouble. Incidentally, the present disparity between the price levels in the two countries is a striking commentary on the relative merits of the tariff and co-operative marketing as panaceas for the grain growers’ ills, for the United States wheat producer, ironically enough, is still “protected” against his Canadian competitor by a tariff of forty-two cents a bushel.
Farmers’ Borrowings Reduced
APART altogether from prices and the
^ net return to the grower, co-operative marketing has had an extraordinarily far-reaching effect on Western business conditions generally. In the second article of this series I described how the pool distributes its returns from the sale of grain to its members throughout the year by making an initial payment ondelivery to the country elevator, a second payment before seeding in March, a third in July before the harvest and a fourth after the close of the pool year. Under the old system of unorganized marketing, the average grower secured his year’s ineome in one lump, usually in the autumn. Out of this he had to meet his bank loans, and very often discharge of this obligation left him with only a limited amount of money to carry over until the spring. This meant that by the time seeding came around he had to tie himself to the bank again for more funds to finance his new crop, and by the time of harvest a second loan was in order. In other words, speaking broadly, the farmer was continually financing himself on the prospects of the crop to come and paying tribute to the banks for the privilege of so doing.
Under the pool system of payments, on the other hand, the grower approximates a condition where he is able to operate more or less on a cash basis. The spring payment helps him with the cost of seeding and the July payment with the cost of harvest. Instead of having ready cash only once a year, he knows the feel of earned money four times a year. And as this applies to more than half the grain growers in the West, it has resulted in a decided speeding up of business generally. More than any other factor, this probably explains why urban opinion in the West, outside Winnipeg where Grain Exchange influence still dominates, is almost solidly pro-pool. To quote one typical opinion, that of George S. Jarvis, of Saskatoon, a . member of the Canadian Credit Men’s Trust Association:
“From the loan companies’ point of view the farmer has been placed in a more favorable position. Payments from the pool are made at seasons of the year which enable the farmers to purchase equipment more or less on a cash basis, rather than on the customary long-term basis . . . The system of marketing under the pool has the effect of placing business on a more solid basis by giving the farmer money spread over the year. This is having the effect of increasing cash sales and enabling merchants to operate at lower costs.”
One might be excused for thinking that the banks might view with disfavor the cutting down of loans to individual farmers, but, as it happens, the contrary is the case, as the banks take the long view. To quote Sir John Aird, president of the Canadian Bank of Commerce:
“The change ("installment payment by the pool) makes for more orderly financing on the farmer’s part and is in this respect beneficial. Any loss which the banks thus experience will undoubtedly be more than made up to them in the long run by the increased prosperity of their customers.”
In other words, orderly marketing has brought in its train orderly financing; and to the farmer belong the honor and glory.
Still another far-reaching result of the pool’s method of operation is the reversal it has wrought in the usual relations between capital and a big business. I have already pointed out in a preceding article how a two-cent-per-bushel deduction on all pool grain goes into elevator reserves and a one per cent deduction into commercial reserves. These deductions already have built up a total pool reserve of $21,310,000. Most of this is invested in the pool’s elevator plant. In one sense, the pool farmers might be said to be the capitalists who have built this plant out of what amounts to small compulsory savings from current income. But the astonishing feature of the method they have employed is the fact that contribution of capital carries with it no control of the business thus created. Ownership and management of the pool elevator systems are vested in the pools as such. Control of the pools, in turn, is vested in the individual farmers on a one-man one-vote basis. No matter how much of his capital a pool farmer may have invested in the reserves, he has no more control over his own capital than his least wealthy pool member. In other words, the pool is ruled by men and not by money, and capital . has become a hired agent rather than a master. Even in the pool itself, the implications of this development are only dimly understood. What it may mean in the future no one can say, but it already is making a new man of the western grain grower.
Pool Making Science Its Servant
T SHALL try to describe this new man in -*• more detail later, but, for the moment, I want to touch on still another of his significant contributions to the life of the West. As a result of the pool’s success in the application of scientific marketing methods, the pool farmer has gained a remarkable insight into the need for scientific approach to all his problems, marketing and otherwise. As a result the pool already has its own statistical service, its own research department. Realizing the extent of the economic waste from the use of poor quality seed, it now is carrying on a campaign throughout the West for the use of registered seed and is even assuming some of the financial obligations in connection with its distribution. At the moment it is installing in its new head-office building at Winnipeg one of the most completely equipped grain research laboratories on the continent. For a year or more it has been co-operating with the National Research Council in an investigation into the milling values of low grade wheat. As a result, the farmer already is pressing for more scientific grading of all Canadian wheat. And if I don’t miss my guess, he’ll get it.
In fact, when it comes to appreciation of the potential value of scientific research as applied to grain growing generally, the pool, upon occasion, has been one jump ahead of government itself. Last year, for instance, when attention was drawn to the danger of disruption of the rust research being conducted at Winnipeg by reason of the inadequacy of the salaries paid the researchers, the pool offered to supplement the official salaries by amounts sufficient to bring them in line with the scale prevailing 'for corresponding work in the United States. The government declined with thanks, but largely as a result of this prompting, a federal commission headed by E. W. Beatty, president of the C.P.R., now is investigating the whole question of adequate remuneration for scientific technicians in all the governmental services.
Of such are the works of the new farmer.
A Titanic Battle Over Wheat
AND what of the future? In the past -^*-many a farmers’ co-operative has waxed and waned and finaliy passed out of the picture with none to mourn its going. Is history to repeat itself in the case of the pool? If so, how soon? If not, what next?
To begin with, it must not be forgotten that the pool is an ideal as well as an achievement. And so long as that ideal retains its vitality there is little danger that achievement will dwindle.
Furthermore, it must be remembered that in a very real sense the pool represents the fruits of a struggle—a titanic struggle between the organized grain trade on the one hand and the organized farmers on the other. And ideals have the habit of thriving on conflict. For that reason I advance the somewhat paradoxical prediction that so long as the struggle continues the pool will flourish.
I wish there was space to describe in some detail the picturesque phases of this battle over wheat. Day in and day out it rages from Great Lakes to the Rockies; in the press, over the radio, and in countless personal encounters. Every day at noon the Winnipeg Grain Exchange station is on the air with information and argument; every day the Manitoba pool retaliates in kind over the Manitoba Government station at Winnipeg. The Saskatchewan pool has its own broadcasting studio tied in with two stations; the Alberta pool is on the air at least once a week. Outside Winnipeg most of the press is pro-pool, but the pool does not depend on support from without. Each of the three provincials has its own house organ, either owned outright or subsidized. Each has its own circulating library, and, believe me, those libraries do circulate. This summer, the Saskatchewan pool is carrying the campaign of education one stage farther by organizing a summer school at Regina for the study of co-operative theory.
The net result of all this bombardment and counter-bombardment is to make the West continually pool-conscious; conscious not only of the astounding success of the pool as a business controlled by the farmer for the farmer, but conscious also of the pool ideal. And therein lies one of the pool’s greatest sources of strength. It has become a Big Business, but not a day passes without the farmer being reminded that it still is a Big Business with a soul. Against such a combination purely commercial propaganda is but a broken reed.
Not that the pool is having everything its own way. Far from it. Just now it is approaching the crucial stage in one of the most vital phases of the conflict; to wit, the struggle for domination of the elevator business of the West.
In its initial stages, the pool, of necessity, was concerned primarily with the creating of marketing machinery. This task completed, it turned inevitably to the acquisition of its own elevator plant. That brought it into direct conflict with the elevator interests which, so long as the pool functioned solely as a merchant, had remained more or less passive. Thus far it has achieved ownership of one-third of all the country elevators between the Rockies and the Great Lakes. Its avowed intention now is to extend its plant to the point where it will take care of all its handlings. That will involve ownership of half the elevator plant in the West, probably more. And that in turn, will lead logically to consolidation of the independent elevator system, resulting in intensified competition for the pool. In fact, the trend toward mergers among the independents is already in evidence. This year, five of the smaller companies united, and further amalgamations may be expected.
There are those who argue that this strengthening of the position of the independents will prove a serious obstacle to further extension of the pool plant, but I doubt the validity of this contention. Because of its very size the pool is in a much stronger position than any of its rivals to meet intensified competition in a field where large scale operation is the primary basis of success.
Such being the case, what are the ultimate limits of the pool’s expansion?
That is an extremely difficult question to answer. At best any answer is a guess, but the pool leaders themselves place the maximum membership of a voluntary pool at about seventy-five per cent of the wheat producers of the three prairie provinces. That would involve a total membership of about 180,000 and a wheat turnover in a good year of somewhere around 350,000,000 bushels. This year, the total turnover will probably run close to 250,000,000 bushels. So, gigantic as the pool already is, there is still considerable room for growth.
Gambling Versus Price Insurance
ANYONE who knows the mentality of the prairie grain grower realizes that a hundred per cent control by a voluntary pool is out of the question. There will always be a considerable percentage of the growers who will prefer to market their grain independently. Once within the pool the farmer knows that by no manner of means can he hope to secure the peak price of the year for his wheat, for the obvious reason that the pool price is an average based on the day to day prices throughout the year. As a matter of fact, regarded in this light, the pool is simply a gigantic price insurance scheme which guarantees the individual grower against the possibility of having to take a price below the average. But there are farmers, as there are individuals in other occupations, who are gamblers by instinct. Such infinitely prefer the chance of “beating the game” to the limitations of an insurance policy. Whether or not they gain or lose in the long run is for themselves to decide, but gain or lose, they are not potential members of the pool—that is, not unless they lose too often.
Questions of future growth and individual temperament aside, however, the mere fact that the pool does function on the basis of an average gives it a stability and a strength comparable, in some respects, to the stability common to all competently managed insurance companies. Given reasonably adequate management—and the pool can afford to hire the best brains in its field—this one feature makes it as nearly fool-proof as any commercial machine can be. For that reason and because of the tremendously potent vitalizing effect of the ideal on which the whole structure is based, the possibility of the pool being destroyed by attack from without is extremely remote. In fact, Hon. R. B. Bennett, leader of the Conservative Party in Canada, who incidentally has been an ardent pool supporter since its inception, has declared publicly that it will never be destroyed from without. And most independent observers who have studied the pool agree with that opinion.
THERE is always the danger, however, that destruction may come from within. It must not be forgotten that the powerful emotional forces, of which the pool is but the outward symbol, still exist. For the time being they are finding release in the constructive channels offered by further expansion of the pool. Whether or not they will ever be diverted into destructive channels depends very largely on the common sense of the farmer himself. Rash leadership, it is true, might precipitate an explosion that would end no one knows where, but at the moment there is no indication of such a possibility. Most of the pool leaders are thinking about ten years ahead but being practical men and constructive thinkers— their constructive abilities are amply evidenced by the present achievements of the pool—there is no danger of their attempting to reach the moon in one jump.
On the other hand, as might be expected in an association of men who are looking forward and not backward—the pool has its Left Wing to the pressure of which pool leadership is continually subjected. In the long run, so long as the Left doesn’t get out of hand, this will probably be a good thing for the leadership, for there will be small chance of its going “stale.” This condition, however, is not without its dangers to the pool itself.
For instance, there now is on foot in Saskatchewan a fairly strong movement for a compulsory pool. Its advocates argue that as the pool has been a good thing for fifty to sixty per cent of the farmers of the West, its benefits should be extended to include all. To that end they are seeking to commit the pool to a policy which would involve asking the government for legislation making the pool the only grain handling concern in the three prairie provinces. “We’ll force the non-pool growers to deliver to the pool and in the end they’ll have to become members,” they say. Which gives rise to the extraordinary spectacle of a group of co-operators trying to advance their cause by making co-operation compulsory. Although most of them do not seem to realize it, they are arguing for the destruction of the very basis on which the pool has been built.
Should the advocates of this curious doctrine gain control of the pool, disruption would be inevitable, as the present pool leaders are unalterably opposed to it. They realize that no government could force a quarter of the farming population of the West into an organization controlled by the other threequarters without having a government represented in the management. And that would mean the end of farmers, control of the farmers’ product which has been the great rallying cry of the pool since the crusade was launched in Alberta back in 1923.
As it happens, so far as this particular tempest is concerned, I am writing in advance of the event which will decide the issue. This article will not be published until July 1 and the Saskatchewan pool convention at which the debate will be settled will be held during the week of June 18. Furthermore, Aaron Sapiro, who has been leading the agitation for compulsion, is to speak at five meetings in Saskatchewan during the week of June 25. I believe too firmly in the innate common sense of the Western grain grower, however, to have much doubt about the final outcome, and for that reason I wouldn’t advise the placing of any bets on the “compulsory co-operationists.”
Beyond the immediate future no man can prophesy with certainty, but there still remain several potential developments of the pool that at least should be indicated. Believing that he has solved his marketing problem on the basis of co-operation with his fellows, many a pool farmer already is asking himself the question: “Why not an extension of the co-operative principle to other phases of grain handling?” Already there has been talk of the pool entering the flour milling business, of the possibility of the pool financing itself through its own bank, of the possibility of its operating its own ships on the Great Lakes, but, as yet, such considerations have not got beyond the stage of theorizing. In the long run, there may be development in these and other similar directions, but for some time to come all the resources of the pool, immense as they are, will be required for the extension of its elevator plant.
“No Longer the Plowman, but a Man oi World Vision”
AND a word in conclusion:
However one may regard the pool in theory, whatever one may think of its future, there is no question of its achievement in fact. Were it to dissolve into thin air tomorrow, it would still remain in the memory of man as one of the world’s greatest monuments to the co-operative ideal.
But greater even than the monument is the change that the pool has wrought on its creator, the psychological revolution that it has wrought in the mind of the farmer himself.
No longer can he be caricatured as a sod-busting hayseed with straw in his whiskers. No longer is he a man with an inferiority complex. No longer does he regard government as a cow to be milked whenever opportunity offers. No longer does he deem himself a man ill-starred by fate, for he knows that by his own might and the might of his fellows he has achieved what wise men declared was impossible.
Of his own volition and by his own strength he has created the most gigantic institution of its kind on the face of the globe. And he knows it.
Having gone into business, he has become the director of his nation’s Biggest Business. And he knows it.
Through the colossus of his own begetting he wields a power that literally is stupendous. And he knows it.
In short, the success of the pool as an instrument of self-help has given its master an immensely enlarged outlook on life. It has given him new knowledge, a new sense of responsibility; has changed his relations with other classes in the state. Having created the biggest business, the pool farmer no longer fears all Big Business. And business, big and little, no longer can look down on the farmer, for the farmer has won place among the great powers of the world about him.
No longer is his horizon bounded by his own acres. He sees himself as the builder of the greatest granary known to history; as the possessor of skyscrapers filled with his own employees; as the guiding hand behind the clatter of typewriters and calculators and adding machines and all the paraphernalia of modern business, in a dozen distant cities. He sees himself as the master of argosies that sail the seven seas; as the genius of a machine whose power is felt to the uttermost limits of the habitable earth. He is no longer the plowman, but a man of world vision.
And in the effect of that vision on the dreamer himself lies the most significant contribution of the Canadian Wheat Pool to the nation which brought it forth.