As the smoke cleared from the battlefields of Europe, the landscape had changed dramatically for Winnipeg, Manitoba and Prairie agriculture generally, particularly in the area of grain marketing.
While the Winnipeg Grain Exchange and the wheat futures market reopened in August 1920, the experience of farmers with the 1919 wheat board was positive and led to many farmers thinking a board had merit — particularly as grain prices collapsed in the first half of the 1920s due to the economic depression resulting from the end of the war.
Wheat prices fell to less than $1 a bushel and by 1922 Alberta and Saskatchewan farmers were calling for the re-establishment of a compulsory government wheat board. The division of powers between the federal government and the provinces resulted in both having to pass legislation.
The federal government passed legislation providing for a national wheat-marketing agency with the conditions that at least two provinces enact legislation to provide such an agency with certain powers and these provinces found people of the necessary experience and ability to manage the agency. Alberta and Saskatchewan promptly passed such legislation, however, then found they could not find people to manage the agency.
The final blow against the agency came in April 1923 when Manitoba refused to pass the necessary legislation allowing for an agency. With a compulsory board out of the question, Prairie farmers then turned to the idea of voluntary provincial wheat pools. By July 1923 organization of such pools was underway along with the organization of a Central Selling Agency to market for the provincial pools. The Alberta Wheat Pool was formed in 1923 along with the Saskatchewan Wheat Pool. What became Manitoba Pool Elevators formed in 1924.
The early 1920s were significant for Manitoba agriculture as a result of a number of developments. By 1920, it was recognized that the homestead era was over, the pool of undeveloped land in Manitoba that was suitable for agriculture was largely drained with the exception of some areas on the northern fringes of the cultivated area. Mixed farming became more prominent, a necessity because of the combination of collapsed grain prices and the reality that much Manitoba land by 1920 had been in grain production for over 20 years. The natural fertility of the soil was being exhausted and weeds were becoming a serious issue in many areas.
Mixed farming provided an agronomic reply to these issues, particularly for marginal areas which could be used as pasture. The Winnipeg stockyards had been built in 1913 providing a marketplace for animals. The Winnipeg slaughter industry continued to grow providing further markets for livestock.
The most interesting development was the appearance of the United Farmers of Manitoba (UFoM), a provincial political party. Farmers became convinced of direct political action during the last half of the First World War as a result of labour shortages, high prices for inputs, shortages of inputs, rail freight rates, railway bankruptcies, the demise of the Hudson Bay railway, construction of which had ended in 1917, and the end of the first CWB.
The UFoM was a party dedicated to being a “non-party” with the intention to represent the interests of its constituents, guard the interests of the farm and support any proposal the members felt right, no matter if another party made the proposal. In the 1920 provincial election, the UFoM took 13 seats. A political crisis in 1922 resulted in another election, the UFoM won 28 seats and formed government.
John Bracken was persuaded to become premier. UFoM instituted a program of strict economy as provincial debt had become burdensome as a result of spending during the boom years of 1890 to 1914. The Winnipeg “establishment” was pleased with the appearance of an economy-minded farm government at first but later was disenchanted when the government instituted an income tax on salaries over $40 a month.
Winnipeg, in general, became suspicious that the city was being “milked” to fund improvements outside the city limits. It is ironic that during this government’s first year it voted against the national wheat-marketing agency. While Bracken was in favour of the measure, he allowed a free vote on the issue and the UFoM MLAs voted their consciences. The UFoM later became known as the Progressive Party. Bracken remained as premier until 1943, with the party finally losing power in 1958. Economy and efficiency were the party’s pillars to the very end, even in the face of being known as hard hearted.
The mid- to late 1920s saw a return of decent prices for agricultural commodities. During this period mechanization of Manitoba farms continued onwards with tractors replacing horse traction and combines beginning to appear. The generally good economic conditions saw roads improved which reduced the isolation of many rural areas.
A subtle shift in this period, the full effects of which were not recognized for years, was the opening of Vancouver as a grain-exporting port resulting in grain beginning to flow west to export not east.
Manitoba had benefited from the eastward flow both due to its location and by being somewhat earlier in harvest than Saskatchewan and Alberta. The dream of a railway to Hudson Bay was resurrected and was completed to Churchill in 1929 with the port grain terminal being in operation by 1931.
However, the prosperity of the 1920s came to a sudden halt in 1929 as a result of a drought and the collapse of the stock market in October 1929, which in turn caused a crash in commodity prices including agricultural commodities. The drought of 1929 continued on through to 1932. These issues produced a dire situation all across Canada and Manitoba was not spared.
The cultivation practices of the time, plowing combined with summerfallow, resulted in giant dust storms all across the Prairies. Money in the hands of farmers became scarce. Horse traction made a comeback, as farmers could not afford fuel or repairs for tractors. Trucks were replaced by wagons. There was no money for repairs of any sort and buildings became shabby. Even telephone subscriptions declined significantly. In some areas, farmers removed engines from their cars to convert them to being pulled by horses. Farm foreclosures were common as was the writedown of farm debt held by dealers, machinery companies and other suppliers.
In marginal areas, farmers and their families often just left, anywhere else being better than starving where they were. While conditions improved marginally by 1935, life on the farm and elsewhere remained difficult until the outbreak of the Second World War in 1939. Even then it took some time before the Depression really ended. It was a long and terrible decade which came to be known as the Great Depression and scarred everyone who lived through it.
The depths of the Great Depression are illustrated by the wheat market and the events that led to the Canadian Wheat Board. The collapse of prices in 1929 caught the wheat pools and their Central Selling Agency. The Pools had set too high an initial price in mid-1929 for the 1929 crop. To make matters worse they had not hedged their grain on the futures market. The debt situation of the Pools became so dire that their respective provincial government stepped in and issued financial guarantees. The situation did not improve in 1930 and, in fact, became worse. The Pools and their bankers appealed to the federal government. The federal government agreed to support the Pools on the condition that a person in whom it had confidence was placed in charge of the Central Selling Agency. Their chosen candidate was John McFarland, formerly of the Alberta Pacific Grain Company, who also acted as a key adviser to Prime Minister R.B. Bennett on agriculture-related matters.
While McFarland was being appointed, wheat prices continued to decline. McFarland was in charge of liquidating the stocks of wheat held by the Pools at the time he was appointed, which he attempted to do. However, the decline in wheat prices led the government to expand his responsibilities to stabilizing wheat prices in order to relieve the pressure on Prairie farmers.
The result was that Central Selling Agency rather than selling off wheat, accumulated wheat in an attempt to shore up prices. The government attempted to address the price situation by signing a trade agreement with Great Britain that allowed Canadian wheat preferential treatment, however, this market was not large enough to take the entire Canadian crop. Other exporters dropped their prices to the point where British importers could afford their wheat, tariffs and all.
The government then promoted an International Wheat Agreement between major exporters of wheat and importers. To stabilize wheat prices, exporters would agree to limit exports by setting quotas for each exporting country. While an agreement was signed in 1933 between major exporters, it had no enforcement and was ignored when it was inconvenient to adhere to the agreement. By 1934, the agreement was seen to not be addressing the issues of poor prices and excessive supplies.
Domestically while the farmers liked the price stabilization aspect of the agreement, they disliked any implied notion that sales quotas would lead to acreage limits. As well, demands for a 1919 wheat board-type organization to control all grain sales were being made by a large percentage of farmers across the Prairies. The Central Selling Agency continued to accumulate wheat stocks to stabilize wheat prices and grew to a point where the financial issues involved were of serious concern to the federal government. The government decided rather than continue to provide temporary support to wheat farmers, it must act and in 1935, established a government organization, the Canadian Wheat Board (CWB), to administer the sales and handling of the Canadian wheat crop. The CWB was not a monopoly at this point and existed in conjunction with the private trade. It also did not have any responsibility for any grain other than wheat. However, the establishment of the CWB in 1935 points to the absolute nadir of Prairie farm fortunes in the 1930s, in that farmers were willing to accept significant government involvement in their business.
The situation remained poor through the late 1930s. A good Canadian harvest in 1938 combined with good harvests elsewhere and the threat of war in Europe resulted in wheat prices collapsing after a mild recovery beginning in 1936. Manitoba farms remained diversified in this period and the wheat situation merely increased pressure to diversify. In 1938 a sugar beet refinery began construction in Fort Garry with provincial assistance.
War broke out in 1939 and young men and women joined the Canadian Armed Forces, however, without the excitement that the beginning of the First World War had seen. War industries slowly ramped up absorbing more people. Economic conditions improved on farm, however, the farm sector was again plagued by labour shortages, lack of inputs and high prices for what they could get.
The 1930s resulted in machinery on farm generally being in poor condition by 1939. The war demands saw many Canadian farm machinery plants converted to war production. Shortages of foreign currency curtailed the ability of Canada to purchase U.S. machinery. Farmers mainly had to make do with the machinery they had in 1939, as worn as it may be.
The Winnipeg slaughter industry was of importance in meeting the needs of the Canadian Armed Forces and of the Allies. Manitoba livestock prices through the war were good. Wheat was an issue however, with the government accumulating large stocks at the lakehead, so large that several very large temporary storages were built there. The situation eased somewhat in 1943 as a result of a short U.S. wheat crop.