Saskatchewan Co-operative Elevator Company (SCEC)

The SCEC, established in 1911, was an important farmer-owned enterprise in the early years of the province's agricultural development. It was a partnership between farmers and the provincial government: the province provided financing, and close connections were kept between provincial politics and the leadership of the co-operative. The SCEC built a province-wide network of farmer-owned grain elevators that were later taken over by Saskatchewan Wheat Pool (SWP) and formed the nucleus of the Pool's elevator system. The province formed the SCEC in response to years of complaints and agitation by farmers about what they saw as unfairness and lack of genuine competition among the existing “line” elevator companies. Two important impulses in shaping the SCEC were Sintaluta farmer E.A. Partridge, a farmer activist, and Walter Scott, Saskatchewan's first Premier.

Partridge had long advocated government ownership of elevators, a position he promoted in speeches and writings and which became known as the “Partridge Plan” of 1908. The idea of government ownership was too radical for government leaders: although the Manitoba government gave in to pressure and purchased elevators in 1910 (not successfully), in Saskatchewan Premier Scott engineered a Royal Commission on Elevators which in 1910 recommended co-operative ownership by farmers instead of government ownership. In line with Scott's intentions and the commission report, the SCEC was incorporated in 1911 by special legislation. Farmers had to pay only $7.50 for a $50 share in the new company. The balance - 85% of the capital needed - was a government-guaranteed loan to be repaid out of earnings.

The Saskatchewan approach served as the model, in organizational and financial terms, for the Alberta Farmers' Co-operative Elevator Company, created in 1913.

In its first year the SCEC built forty elevators and leased six more; in 1912 it built ninety-three. By 1916 the SCEC had over 190 elevators in operation; by 1917, 230. With 318 licensed elevators in 1920, SCEC had edged out United Grain Growers (UGG) to become the operator of the largest elevator system in the prairies. Its network grew to over 400 in the mid-1920s. The elevator co-op remained closely connected, ideologically and personally, to the governing Liberal Party and to the Saskatchewan Grain Growers' Association (SGGA). Three men, in particular, epitomized the intertwined elites of these bodies: for more than a decade, John A. Maharg was president of both the SGGA and the SCEC, in 1921 simultaneously serving as provincial Minister of Agriculture in the Liberal government; meanwhile, Charles A. Dunning, first manager of the SCEC, went on to become Premier of Saskatchewan; and J.B. Musselman, autocratic secretary of the SGGA and another influential Liberal, found refuge in a post in the SCEC under Maharg when reformists drove him out of office in the SGGA. These close ties to the government drew criticism from farmers who were not Liberals, and from those who were purists regarding the co-operative principle of political neutrality. Activist farmers also saw the co-op as too conservative: too content to remain an elevator company, too timid in challenging the wider marketing system, and too aloof from members. Its directors were elected at a large central meeting instead of in country districts; it did not pay patronage refunds, which is considered a key co-operative principle; moreover, the company did not bring the returns that farmers had hoped for.

Discontent came to a head following the organization of Saskatchewan Wheat Pool in 1923-24: the pool (together with its counterparts in Manitoba and Alberta) represented a new vision of central selling and orderly marketing. But now the pool needed elevators through which to move its grain, and the SCEC was noticeably reluctant to aid it. The SCEC proved so difficult to win over that pool organizers decided to reach agreements with private elevator companies first; frictions continued, and in 1925 the pool began building its own elevators and submitted a proposal to buy those of the SCEC. At the annual meeting in December 1925 the SCEC board, led by Maharg, attacked the pool, while pro-pool delegates attacked the board. In the end SCEC delegates voted to force the SCEC to consider the pool's offer, repudiating the board. Finally, in April 1926 a special meeting of co-op members voted 366 to 77 to sell. SCEC investors did not lose. They had paid $7.50 for their shares originally (the balance being paid out of profits), but received $155.84 from the sale. Arbitrators valued SCEC's elevators at $11 million. In 1926, the SCEC came to an end as its elevator network was taken over by the pool, providing a huge boost to the growing network of SWP country elevators. The pool's elevator network, which totaled eighty-nine in 1925-26, grew at a stroke by 451 country elevators and three terminals.

Brett Fairbairn

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Further Reading

Fairbairn, G. 1984. From Prairie Roots: The Remarkable Story of Saskatchewan Wheat Pool. Saskatoon: Western Producer Prairie Books; Irwin, R. 1993. “‘The Better Sense of the Farm Population’: The Partridge Plan and Grain Marketing in Saskatchewan,” Prairie Forum 18 (1): 35–52; MacPherson, I. 1979. Each For All: A History of the Co-operative Movement in English Canada, 1900–1945. Toronto.