Deep Furrows Part 8

"You can't do any more business with our members till you change your ways," declared the Exchange and forthwith, on October 25th, notice was posted to all Exchange members that any of them found dealing with the farmers' company would be penalized themselves.

Expelled from trading privileges! Practically boycotted! It was a straight punch on the nose that threatened to put the young organization out of business for the final count. Members.h.i.+p in the Exchange was absolutely imperative if the farmers were to be in a position to sell grain to exporters; they were not strong enough yet to export direct to Old Country markets and all the exporters through whom they were compelled to deal were members of the Exchange.

"The whole thing's just a pretext!" cried Partridge vehemently. "We haven't got any by-law regarding distribution of profits co-operatively; the only thing they've got to go on is that circular.

They're beginning to get scared of us and they see a chance to put us out of business."

If this were the object, it looked as if it might be achieved in short order. The grain was pouring in steadily by the carload and with no buyer daring to deal with them in face of the mandate from the Exchange, of which they were all members, the new company was in a quandary to dispose of the incoming grain on a falling market. The only thing they could do was to wait until they had sufficient of any grade to make a s.h.i.+pment of from 8,000 to 10,000 bushels of that grade and try to place it somewhere in the East. The Manager was sent east hurriedly to see what connections he could establish while his office a.s.sistant mailed letter after letter to eastern points in an endeavor to work several contracts.

The farmers who s.h.i.+pped their grain to the new company were expecting to receive seventy-five per cent. of an advance from the bank on their bills of lading and a prompt remittance of the balance when the Inspection Certificate and Outturn were in the hands of the Company.

With the grain piling up on their company day by day, it was not long before the overdraft at the bank began to a.s.sume alarming proportions.

Luckily the a.s.sistant Manager succeeded in making several sales in the East, which eased away from the crisis which was shaping. It was quite patent that it would have been suicide for the young trading organization to notify the farmers to stop sending in business. They dare not do that.

In desperation the President and Vice-President went to the Manitoba Government and laid their case in full before the cabinet. Premier R.

P. Roblin (now Sir Rodmond Roblin) was very much surprised to learn the facts.

"The Government certainly cannot countenance any such action on the part of the grain dealers," he declared emphatically. "We cannot allow them to boycott a company composed of farmers who have as much right to sell grain as any other body of men."

Accordingly the Government set a time limit within which the Exchange had the option of removing the ban against the farmers' company or of losing their Provincial charter. In the meantime, however, this did not obtain restoration of trading privileges, without which the farmers' company could not do business with Exchange members except by paying them the full commission of one cent per bushel.

The situation, therefore, was approaching a crisis rapidly. The company was fortunate in having the friends.h.i.+p of their local bank manager; but even he could not go on forever making advances on consigned grain and there was some suspicion that letters were reaching the head office of the bank in Montreal, advising that the quicker this particular account was closed out the better off the bank would be.

Then one morning the local manager called on the Executive and his face was grave.

"This is not the first time I've heard from the Head Office about this account, as you know," he began at once, "but I'm afraid it's the last call, gentlemen." He handed a letter to the President. "As you see, I am instructed to close out your account at once unless further security is forthcoming. I'm sorry; for I believe you've merely run into hard luck in getting squared away. But--I'm not the bank, you understand."

"What do you want us to do? What can we do?" asked Partridge anxiously. "This thing will straighten out, Mr. Machaffie. We're getting the business. You know that. We're going to get back our trading privileges and everything will be alright."

The banker shook his head slowly.

"I'm sorry, gentlemen. But do you know what your overdraft amounts to now?"

"Three hundred and fifty-six thousand dollars," murmured the Secretary-Treasurer.

"Exactly."

"What are we to do?"

"Before coming here I've been to see the Scottish Co-Operative Wholesale Society about taking some of your wheat. Fisher is ready to help you out if he finds he's not overstepping the rules of the Exchange. I may be able to carry you along for a short time if you three gentlemen, the Executive of your company, will give the bank your personal bond without limit as to the amount. I have even gone so far as to draw up the doc.u.ment for signature, if it meets with your approval."

"What about that, Kennedy? Spencer?"

"Guess we've got to do it," nodded Kennedy.

"Looks like it," agreed Spencer.

"Then--down she goes!" decided Partridge, dipping his pen in the ink.

The others signed after him.

"That means we three go down with the s.h.i.+p," he remarked quietly after the door had closed upon the bank manager. "I appreciate you two fellows signing that thing." He got up and shook hands with each of them in turn. "If bad gets worse and we go to smash----"

"It can't get worse and we're not going to smash," rea.s.sured the others.

But that remained to be seen. Although placing grain in the East was robbing them of profits, it was the best that could be done to tide things over. The three active officials were on the anxious seat from morning till night. It had got down now to a question of meeting each day's events as they came and frequently the lights blazed in the little office till two and three in the morning while the provisional officers raked the situation from every angle in an endeavor to forecast the next day's difficulties and to prepare for them.

For three months the overdraft at the bank had averaged $275,000, due almost entirely to the conditions resulting from the action of the Exchange. It was useless to worry over the amount of interest which this accommodation was costing and the profits which might have been rolled up had things been different; the real worry was to keep going at any cost. For, as the bank manager had intimated, the whole thing was just hard luck rather than any unsoundness in the business. It was a fine paradox that the more p.r.o.nounced the success of the idea itself became, the greater grew the danger of complete failure because of the predicament! Death by wheat! An ironical fate indeed for a grain company!

Upon investigation, the farmers' company discovered that their original idea of distributing their profits co-operatively--as embodied in the circular to which the Exchange had objected--was contrary to the provisions of the Manitoba Joint Stock Companies' Act under which they held their charter. Therefore the co-operative idea in connection with profits was formally dropped by the Grain Growers' Grain Company. This had been done at a directors' meeting on December 22nd (1906), when a resolution had been pa.s.sed, cancelling the proposal contained in the objectionable circular.[3] But although the Exchange had been notified immediately and repeated applications for reinstatement had been made, the farmers' company was still struggling along in the throes of their dilemma--proof positive, concluded the farmers, that the Grain Exchange had used the co-operative suggestion as a mere pretext to oust the Company from the field altogether.

In piled the wheat, car after car of it! A considerable portion of it had been bought on track and farmers who had consigned their grain were anxious, naturally, to have it disposed of without delay. With prices going down and navigation on the point of closing, the best hopes of the management became centred in getting a big s.h.i.+pment away to Buffalo by boat. That would enable them to escape a big item in storage charges and to place the grain in line for export at rates considerably below the all-rail figures.

"With those bills of lading in the bank, we've no control of them and the bank can do just about as it likes," reviewed the President one night. "If they should come down on us to sell our wheat inside of forty-eight hours--we're goners, boys! All that those fellows over at the Exchange have got to do is to shove down the market thirty points and our name is _mud_! The loss to the farmers who've s.h.i.+pped us their grain will kill this movement and every one like it in the West for all time to come. This company will be as dead as a doornail and so will we financially as its bonded backers."

Kennedy was running a finger tentatively down the window-pane. It left a streak in the forming frost.

"What I want to know is, how long ought it to take to load up this whole boatload we're trying to move?"

"Oh, about seventeen hours or so."

"And how long have they been at it already? Five days, ain't it? And she's not away yet! What d'you suppose that means?" he snapped. He began to throw things into a grip. He made for the door.

"Where'n the mischief are you going, John?"

"Fort William--can just make the train if I hustle. The _J. P. Walsh_ gets out of that harbor with that wheat of ours, by Hickory!--if she has to be chopped out with an axe!"

Two days later a telegram reached the little office:

_S.S. J. P. Walsh_ cleared to-day for Buffalo. Three hundred and ten thousand bushels. Last boat out. KENNEDY.

[1] See Appendix--Par. 7.

[2] See Appendix--Par. 8.

[3] This resolution was confirmed at a meeting of the shareholders, February 5th, 1907.

CHAPTER VIII

A KNOCK ON THE DOOR

Every man is worth just as much as the things are worth about which he is concerned.--_Marcus Aurelius_.

That big s.h.i.+pment to Buffalo, along with several others which were placed in the East with the market recovering, relieved the situation greatly. Also, the Scottish Co-Operative Wholesale Society's Winnipeg office decided to stand by the farmers' co-operative marketing venture and risked disapproval to buy some of the young company's wheat; not only that, but the farmers' company was allowed the regular commission of one cent per bushel on the purchase and the cheque paid in to the bank amounted to $58,298. This friendly co-operation the farmers were not quick to forget and they still speak of it with grat.i.tude.