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The Story of Manitoba
Chapter XLVII The Growth of Trade


With the close of the Riel rebellion in 1870, the little village of Winnipeg caught its breath, and started on the first mile of the road which was to lead not only to its being the capital of .Manitoba, but also the largest city west of the Great Lakes and the centre of the trade which in 1912 furnished the unprecedented record of bank clearings to the amount of $1,527,391,110. Standing at the very gateway of the prairies, Winnipeg has been a natural centre for the establishment of manufactories and for the distribution of goods to the districts further west. When the Hudson's Day Company ceased to be the only source of supplies, and others were entering the trade, the means of transport was mainly by Red River cart across the prairies to St. Cloud, Minnesota, or by Red River boat to the same place. From the time that General Wolseley arrived in Winnipeg and crushed the first Riel rebellion, the idea of a permanent road to eastern Canada became firmly fixed in the western mind. Long before the Canadian Pacific Railway was completed between Manitoba and eastern Canada, it had been built to the Great Lakes, where it connected with a line of steamers, thus opening a means of communication between east and west for seven or eight months in the year.

Manitoba developed, the cheapness of transportation by the lakes produced a condition of trade which was somewhat peculiar. As has been said Winnipeg was a natural distributing point, and immediately trade, other than that of the Hudson's Day Company, was opened up, the merchants recognized the importance of getting in supplies for shipment further west. Until the Canadian Pacific Railway was built to the head of the lakes, this hail to be done for the most part by ox cart from Minnesota, and later by the first railroad which ran in from the south; but as soon as there was railway communication between Winnipeg and the head of the Canadian Lakes, the trade in wholesale supplies commenced, and the conditions, which made it desirable to bring in large quantities of goods during the season of open water, led to the establishment in Winnipeg of the largest wholesale jobbing houses in Canada. Indeed there are few of equal size in any of the western states. This applies to all classes of merchandise, and is especially noticeable in the matter of heavy goods, such as hardware. Taking advantage of the lower lake freights, every wholesale house brings in sufficient supplies during the summer to last it until the next season. This fact alone has promoted the development of Winnipeg to a very marked degree.

Trade in Manitoba, while it now reaches out to practically every branch of industry, began first of all with furs; but as settlement extended beyond the narrow district of the Red River, the trade in furs was exceeded by that in

grain. Grain raising began with the coming of the Selkirk settlers, but it was not general throughout Manitoba until the early seventies. There were patches of grain grown in and about the Red River, and small beginnings of grain growing were made on the Portage plains; but with the coming of the Mennonites in 1872, 1873, and 1874 grain raising was undertaken on an extended scale;! These people, who are German by descent, came to western Canada from the steppes along the Black Sea in Russia. They were attracted by the plains north of the international boundary and, settling there, engaged in the production of grain, especially wheat.

The grain trade of Manitoba may be said to have opened in 1876, for on October 21st of that year, Messrs. Higgins and Young sacked 827 bushels of wheat and shipped it on a Red River steamer to St. Cloud, and thence by rail to Steele Bros., Toronto. This wheat was sold for seed at $2.50 a bushel. On the 17th of October m the following year the first shipment of wheat was made from Manitoba directly to Great Britain. This shipment was made by Robert Gerrie, one of the early pioneer merchants, and was sent to Barclay & Brown, of Glasgow, Scotland. It also went out by Red River steamer and through the United States. It was seven years later, namely, in the fall of 1884:, that a shipment was made by an all Canadian route to Great Britain. This was made by Thomas Thompson, now head of the firm of Thompson & Sons, of the Winnipeg grain exchange! but at that time resident in Brandon. This shipment of wheat, which consisted of 1000 bushels in sacks, went through Winnipeg to Port Arthur by rail, from Fort Arthur to Owen Sound by boat, and thence by rail and boat to Glasgow. It reached Glasgow only twenty-one days after it left Brandon. These were the tentative beginnings of an export trade which has grown to gigantic proportions*, but is still considered as being in its infancy.

With this first export movement by an all Canadian route, came the first provision for an export trade. This was in the form of an elevator erected by the Canadian Pacific Railway Company at the head of the Great Lakes. This building is still standing, is known as Elevator "A".of Canadian Pacific Rail way system, and has a capacity of 1,500,000 bushels. When it was projected, the papers of eastern Canada were full of scorn at the idea that it would ever be filled. Today the elevator capacity at the head of the Great Lakes has grown to 30,000,000 bushels; but it is entirely inadequate to present requirements, and it is being increased as rapidly as steel and fire-proof brick can be put together.

Manitoba being a prairie country, there was no need of preparation before beginning to cultivate; all that was necessary was to plough and sow. This condition, which made the raising of large quantities of grain within the second year of settlement possible, also made the development of storage facilities necessary. In those early days, the Canadian Pacific Railway was the one railroad, and having been built at great cost, it was questionable whether there was ever going to be freight enough to make it pay. The railway company was not anxious to increase its liabilities by the erection of warehouses to handle crops as it did to handle ordinary package freight. It therefore offered free sites at its various stations to men who were willing to erect elevators for the storage and handling of grain, and this developed what are known today as line elevators, that is, numbers of elevators at various points in the country owned by a single company. In the start the railway company guaranteed the owners of elevators


ROYAL ALEXANDRIA HOTEL AND CANADIAN PACIFIC RAILWAY STATION, WINNIPEG

that it would not accept grain which was not loaded through their houses. At that time there was no system of checks on charges for elevating and loading the grain, or on the amount of dockage which the elevator companies might make on the grain.

As early as 1881 grain commission houses had been established in Winnipeg. In 1888 an attempt was made to organize the trade; but this was not successful, and it was not until the crop of 1887 was ready for market, that a grain exchange was successfully organized. The crop of that year, 12,351,724 bushels, was very greatly in excess of local requirements. A meeting was called, and a grain exchange organized, of which I). II. McMillan, now Sir Daniel McMillan, was the first president. The trading was confined to cash business only ; but the exchange secured option markets by wire from Minneapolis and Chicago, and on these was based to a very great extent the Winnipeg price. Almost simultaneously with the establishment of the first grain commission house an inspection system had been inaugurated under the Dominion government, this system being based on that in vogue in eastern Canada under the general inspection act. The Grain Inspection Act of Canada has been a very important factor in the development of the western grain trade. From 1887 onward, there was a steady increase in the export trade,, all of this wheat being sold on the British market on the certificates of inspection given at Winnipeg, and this system has been pronounced by British buyers the best inspection system in the world.

Twelve years after the date of the first shipment of grain from Winnipeg, namely, at the end of 1888, there was a weir established inspectiou department, a grain exchange organized to do an active cash trade, elevators at all important points in the province, and a steadily growing activity. Matters went along in this way for ten years, but the fact that the railway companies compelled the farmers to ship through the local elevators led to very serious abuses. The farmers were entirely at the mercy of the owners of elevators, and discontent with the conditions became so serious that they petitioned the Dominion government for relief. A royal commission was apj>ointed in 1898 to inquire into the whole question of the handling of western grain. This committee, after careful investigation, made a report, and on this report the Manitoba Grain Act was based. Among many radical changes, this act provided that the farmers should have the privilege of loading their grain directly into cars without putting it through the elevators, and that for this purpose, the railway companies must establish loading platforms. The office of warehouse commissioner was created, the special duty of this official being to see that elevator companies complied with the act. This act was a good one, but not perfect, and later it was found necessary to amend it, especially in the matter of distribution of cars. The amendment provided that cars should be distributed pro rata, according to the registration of names on a car order book, which the railway companies were compelled 1o keep at each railway station. In 1912, a new act was passed, which is known as the Canada Grain Act. This provided for a commission to have supervision over the entire business of handling grain. It brings many new elements into the business, and of course its effect on the grain trade is yet unknown.

Money to move the crop is one of the great factors in the commercial life of Manitoba. Practically all the financing for the crop, not only of Manitoba, but also of the entire Canadian west, is done through the Winnipeg banks. The first shipments of grain were bought and paid for, probably with no such thing as a line of credit being thought of; but in 1912 the banks at Winnipeg provided the sum of $36,000,000 for lines of credit to elevator and rulling companies. The grain firms establish lines of credit with Winnipeg banks, and these banks send to their branches in the country money to handle the trade.

In spite of the privilege of loading their own cars, the farmers still do the bulk of their grain trade through the elevators. A man may sell his load of grain to the owner of an elevator for cash, or tie may store it m an interior elevator and receive tickets which indicate the number of bushels and the grade of his grain. By presenting these at the local banks he can raise money up to 60 per cent of the value of the grain before it is actually sold.

Perhaps a few bald facts may best indicate the magnitude of the grain business. When the grain exchange was established in 1887, it traded in cash grain only, and the whole crop of that year was under 13,000,000 bushels. In 1912 about 400,000.000 bushels were traded in options through the grain exchange clearing house, and the cash grain business was the largest on the continent of America. All grain is inspected at Winnipeg, and during the rush season of 1912, as many as 1,596 cars of grain were inspected in one day, while the average receipts of the period from the beginning of the new crop in September to the close of navigation on the Great Lakes was close to 1,200 cars daily.

When the grain exchange was opened in 1887, the membership fee was $15 and the number of members was ten. Today there are three hundred members, and the official value of the seats is $4,500. The first meeting was held in a single room on a side street; today the members occupy a building in the central portion of Winnipeg, which is valued at $900,000 and to which a $600,000 addition will be made during the present year. To meet the requirements of the grain trade, the railway companies have invested millions of dollars in rolling stock. The Canadian grain fleet has a capacity of 9,000,000 bushels, and has to be constantly supplemented by the freighters from the American side, many of which carry out 400,000 bushels at a single load.

Running side by side with the development of the grain trade, is the trade in agricultural implements. The first binders were sold in 1882, the first shipment of binders, mowers and rakes coming in that year The level prairies of Manitoba particularly lend themselves to cultivation by machinery, and the implement business has advanced by leaps and bounds. Next to the grain business itself, it probably shows the largest investment of any individual business in Manitoba. The first shipment of agricultural implements which arrived represented an investment of a few hundred dollars. In 1912 the implement and tractor houses of Winnipeg shipped out motor trucks alone worth more than $1,500,000.

The cattle trade has formed one of the great enterprises of Manitoba. When the second Riel rebellion broke out in 1885, cattle were so scarce in Manitoba that it was necessary to bring in supplies from eastern Canada and the United States to supply the troops with necessary meat. The men who were engaged in that work saw the possibilities for a great trade in cattle. Englishmen and Americans saw the opportunities of the great prairies lying west of Manitoba for the range cattle business, and this was developed very rapidly indeed between the

years 3885 and 1908, when the export trade in cattle of western Canada reached its maximum, namely 90,000 head. The Canadian Pacific Railway, having the one through route to the Atlantic seaboard, all export cattle trade to Britain must of necessity pass through Winnipeg, and it has become the great sorting market of the west. Here train loads of GO and 70 cars of cattle are brought in, unloaded, sorted, and those suitable for export re-shipped, while the inferior grades find their local market there. The local market for Winnipeg has now reached a consumption of about. 70,000 head a year. The concentration of this trade in Winnipeg led to the establishment of huge abattoirs and packing houses, with their complement of plants for the utilization of by-products. The actual investment in these plants at the present time is $4,000,000.

The development of manufactories in Manitoba was slow. For many years the future of the province was somewhat uncertain, and capitalists hesitated to invest their money in its manufacturing enterprises. Some of the raw materials to be used in them would have to be imported, and freight rates were high. Power and labor were expensive. But as the population increased, the demand for all kinds of manufactured goods grew also, and local factories of various kinds were-established to meet a part of this demand. The fact that "Winnipeg is a distributing point tended to tix many of these factories in that city, but several of the smaller .towns possess manufacturing plants which do much to supply the needs of the people in the surrounding districts.

Of necessity tlour was one of the first articles to be manufactured in Manitoba, and mills were erected in each new district occupied by settlers; but until rail and steamboat communication with the outside world made an export trade possible, the manufacture of flour was limited to the needs of the people of the province. As soon as the necessary facilities for transportation were provided, the Ogilvie Company and other great companies established mills in Manitoba, and flour became one of its principal exports.

To meet the needs of the early settlers lumber mills were built in the districts where a supply of standing timber was available. The lumber business has grown with the province, but up to the present time the output of the local mills has not been equal to the demand, and much lumber is imported every year. Neither have the factories for the manufacture of doors, sashes, etc., been able to meet the demand for their products. At an early date large deposits of clay suitable for brick were found in Manitoba, and the demand for building material in all parts of the province soon made the manufacture of brick one of its important industries. For a similar reason the quarrying and dressing of building stone has become an important business in some parts of the country. In recent years there has been a great demand for structural iron and steel. The Vulcan Iron Works, established in Winnipeg about thirty years ago, was one of the first establishments for casting and the manufacture of structural iron. At the present time several companies are engaged in this business.

Among other articles which have been manufactured extensively in Winnipeg for some time, saddlery, soap, biscuits and confectionery may be mentioned. Since about 1887; the Royal Crown Soap Company has supplied the west with a large part of the soap which it uses and from the time of the second Riel rebellion the Paulin-Cliainbers Company has furnished the country with a considerable part of the biscuits and confectionery consumed in it. Quite recently several factories for the manufacture of shirts, blouses and other wearing apparel have been established in Winnipeg. Some years ago the city of Winnipeg acquired one of the best sites on the Winnipeg River for the generation of electric power. A dam and a plant were built at an expense of several million dollars. and now the city is in a position to sell power at a low rate to manufacturers who wish to establish factories within its boundaries. Arrangements will probably be made, too, by which it will sell power to the smaller towns in the neighborhood.

The development of trade has brought into existence a network of railways, which cover Manitoba from east to west and from north to south. Of all the prairie provinces it is best supplied with railway transportation, having no less than 3,895 miles of railroads. The western headquarters of the three transcontinental railways are at Winnipeg, and their great yards and shops are located in the vicinity, necessitating the investment of millions of money and the employment of thousands of men.

Today Winnipeg has manufactories whose total output is valued at $92,000,000 per year and whose pay roll is estimated at $12,000,000. In forty-one years the little prairie village, with its one muddy street, has developed into a busy city with 162 miles of paved streets, an assessment of $214,460,000 and a building record of $20,000,000 a year. There seems to be no limit to her manufacturing and trade in the future.

Of the total 2,864 banks in the Dominion of Canada, 196 are located in the province of Manitoba. The money orders issued by the post office are always an indication of the growth of trade and the general wealth of the community. In 1907 the value of the money orders issued in Manitoba was $4,480,227. In 1912 this had risen to $7,328,677. Very much of this money is sent by foreign-born citizens to their home land to bring out other members of their families or communities.

The development since confederation has been wonderful, but unless all signs Sail, the growth of Manitoba's trade in the next forty-three years will place her in the very front of the provinces of Canada.


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